| Pak Suzuki Motors Co Ltd - 2004 |
======================================================================================== BALANCE SHEET AS AT DECEMBER 31, 2004 ======================================================================================== 2004 2003 Notes (Rupees in thousand) ======================================================================================== NON-CURRENT ASSETS Property, plant and equipment - at book value 3 2,203,452 926,083 Intangible asset 4 13,423 26,845 Investments in related parties 5 28,800 28,800 Long-term loans 6 2,073 1,751 Long-term deposits and prepayments 7 5,978 5,531 Deferred tax asset 8 161,000 144,000 CURRENT ASSETS Stores, spares and loose tools 9 40,661 23,677 Stock in trade 10 3,765,277 2,258,413 Trade debts 11 140,379 74,057 Loans and advances 12 25,484 22,755 Trade deposits and prepayments 13 30,432 7,855 Accrued income on bank deposits 55,858 46,941 Other receivables 14 19,488 18,056 Investment 15 101,365 - Sales tax adjustable - considered good 160,611 357,034 Cash and bank balances 16 6,693,996 5,732,752 11,033,551 8,541,540 Total assets 13,448,277 9,674,550 Share capital and reserves Authorised share capital 150,000,000 (2003: 150,000,000) ordinary shares of Rs 10/- each 1,500,000 1,500,000 Issued, subscribed and paid-up share capital 17 491,312 491,312 Reserves 4,984,406 3,726,863 5,475,718 4,218,175 CURRENT LIABILITIES Bills payable 656,507 350,415 Security deposits 19 62,304 58,504 Trade and other payables 20 1,486,926 948,235 Advances from customers and dealers 21 5,288,863 3,178,181 Income tax payable - net 51,670 577,175 Provision for customs duties and sales tax 22 426,289 343,865 7,972,559 5,456,375 Commitments 23 Total share holders' equity and liabilities 13,448,277 9,674,550 ======================================================================================== ======================================================================================== PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2004 ======================================================================================== 2004 2003 Notes (Rupees in thousand) ======================================================================================== Net sales 24 24,461,966 18,484,220 Cost of sales 25 22,045,303 15,846,866 Gross profit 2,416,663 2,637,354 Administrative expenses 26 178,772 159,080 Selling expenses 27 89,105 64,556 Other operating income 28 189,485 183,822 Operating Profit 2,338,271 2,597,540 Financial charges 29 40,060 37,333 Workers' profits participation fund 20.1 114,911 128,010 Workers' welfare fund 30 43,484 50,594 198,455 215,937 Profit before taxation 2,139,816 2,381,603 Taxation 31 736,244 811,412 Net Profit for the year 1,403,572 1,570,191 Basic earnings per share 32 28.57 31.96 ======================================================================================== ======================================================================================== CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2004 ======================================================================================== 2004 2003 Note (Rupees in thousand) ======================================================================================== Cash flow from operating activities Cash generated from operations 33 3,993,400 1,828,008 Financial charges paid (15,115) (22,528) Taxes paid (1,278,749) (743,656) Long-term loans and advances (322) 1,014 Long-term deposits and prepayments (447) 1,838 Net cash from operating activities 2,698,767 1,064,676 CASH FLOW FROM INVESTING ACTIVITIES Fixed capital expenditure (1,658,972) (438,354) Acquisition of intangible asset - (40,267) Sale proceeds on disposals of fixed assets 14,753 12,568 Purchase of investment (100,000) - Mark-up on cash deposits with banks 152,618 187,016 Net cash used in investing activities (1,591,601) (279,037) CASH FLOW FROM FINANCING ACTIVITIES Dividends paid (145,922) (147,005) Net increase in cash and cash equivalents 961,244 638,634 Cash and cash equivalents at beginning of the year 5,732,752 5,094,118 Cash and cash equivalents at end of the year 6,693,996 5,732,752 ======================================================================================== ============================================================================================================================================================== STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2004 ============================================================================================================================================================== Unappropriated Notes gain on Accumulated Total Shareholders Share Share General available for Profit Reserves Equity Capital Premium Reserve Sale Investments ============================================================================================================================================================== Balance as at December 31, 2002 as previously reported 491,312 584,002 1,571,818 - 852 2,156,672 2,647,984 Effect of change in accounting policy - Final dividend for the year ended December 31, 2002 declared subsequent to the year-end 2.3 - - - - 147,394 147,394 147,394 Transfer to general reserve - - (768,000) - 768,000 - - Balance at December 31, 2002 - restated 491,312 584,002 803,818 - 916,246 2,304,066 2,795,378 Effect of change in accounting policy - Final dividend for the year ended December 31, 2002 declared subsequent to the year-end 2.3 - - - - (147,394) (147,394) (147,394) Transfer to general reserve - - 768,000 - (768,000) - - Net profit for the year - - - - 1,570,191 1,570,191 1,570,191 Balance at December 31, 2003 491,312 584,002 1,571,818 - 1,571,043 3,726,863 4,218,175 Balance at December 31, 2003 as previously reported 491,312 584,002 2,994,818 - 649 3,579,469 4,070,781 Effect of change in accounting policy - Final dividend for the year ended December 31, 2003 declared subsequent to the year-end 2.3 - - - - 147,394 147,394 147,394 Transfer to general reserve - - (1,423,000) - 1,423,000 - - Balance at December 31, 2003 - restated 491,312 584,002 1,571,818 - 1,571,043 3,726,863 4,218,175 Effect of change in accounting policy - Final dividend for the year ended December 31, 2003 declared subsequent to the year-end 2.3 - - - - (147,394) (147,394) (147,394) Transfer to general reserve - - 1,423,000 - (1,423,000) - - Net profit for the year - - - - 1,403,572 1,403,572 1,403,572 Unrealised gain on available for sale investment - - - 1,365 - 1,365 1,365 Balance at December 31, 2004 491,312 584,002 2,994,818 1,365 1,404,221 4,984,406 5,475,718 ==============================================================================================================================================================NOTES TO AND FORMING PART OF FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2004 1. COMPANY'S BACKGROUND, OPERATIONS AND LEGAL STATUS The Company was formed in accordance with the terms of a joint venture agreement concluded between Pakistan Automobile Corporation Limited (PACO) and Suzuki Motor Corporation, Japan (SMC) - the principal shareholder of the Company, for the purposes of assembling, progressive manufacturing and marketing of Suzuki cars, pickups, vans and 4x4s. Under the joint venture agreement, the net assets of Awami Autos Limited (AAL), a subsidiary of PACO, now liquidated, were taken over by the Company in August 1983 in consideration for which shares in the Company were issued to PACO. The Company was incorporated in Pakistan as a public limited company in August 1983 and started commercial production in January 1984. The shares of the Company are quoted on Karachi and Lahore Stock Exchanges. In accordance with the terms of a sale agreement dated September 19, 1992 between SMC and PACO, SMC increased its shareholding to 40% in the Company by purchasing shares from PACO and took over its management with effect from September 21, 1992. Since then SMC progressively increased its equity to 73.09%. In July 1996, PACO had disinvested its remaining shareholding. These shares were acquired by SMC in terms of the joint venture agreement between PACO and SMC - Japan which since came to an end. The total foreign investment brought in by SMC - Japan since inception stands at Rs. 1,027.28 million. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1. BASIS OF PREPARATION These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984. Approved accounting standards comprises of such International Accounting Standards as notified under the provisions of the Companies Ordinance, 1984. Wherever the requirements of the Companies Ordinance, 1984 or directives issued by the Securities and Exchange Commission of Pakistan differ with the requirements of these standards, the requirements of the Companies Ordinance, 1984 or the requirements of the said directives take precedence. 2.2. ACCOUNTING CONVENTION The financial statements have been prepared under the historical cost convention, except for revaluation of certain financial instruments at fair value and recognition of certain employees' benefits at present value. 2.3. CHANGE IN ACCOUNTING POLICY During the year, the Securities and Exchange Commission of Pakistan substituted the Fourth Schedule to the Companies Ordinance, 1984, effective from the financial year ending on or after July 5, 2004. This has resulted in the change in accounting policy pertaining to the recognition or dividends and other appropriations declared subsequent to the year end. Dividends and other appropriations to general reserve are now recognised in the period in which these are declared. Up until the previous year, dividends declared and appropriations made after the balance sheet date but before the financial statements were authorised for issue, were recognised as of the balance sheet date. The change in accounting policy has been accounted for retrospectively and comparative information has been restated in accordance with the bench mark treatment specified in IAS - 8 (Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies). Had there been no change in accounting policy, the unappropriated profit brought forward would have been lower by Rs. 1,570.394 million [2003: Rs. 915.394 million] and the liability for proposed dividend and general reserve would have been higher by 147.394 million [2003: Rs 147.394 million] and Rs. 1,423 million [2003: Rs. 768 million) respectively. The effect of change in accounting policy has been reflected in the comparative balance sheet and the statement of changes in equity. The change in accounting policy has not resulted in any change in the profit for the current period. 2.4. TANGIBLE FIXED ASSETS AND DEPRECIATION Operating fixed assets are stated at cost less accumulated depreciation. Capital work-in-progress is stated at cost. Items of fixed assets costing Rs 10,000/- or less are not capitalised and charge off in the year of purchase. Depreciation on all operating fixed assets, except leasehold land, is charged to income applying the reducing balance method whereby the cost of an asset is written off over its estimated useful life. Leasehold land is depreciated using the straight line method whereby the cost of the leasehold land is written off over its lease term. The full year's depreciation is charged on additions while no depreciation is charged on assets deleted during the year. Maintenance and normal repairs are charged to income as and when incurred. Gain or loss on sale or retirement of fixed assets is included in income currently. 2.5. INTANGIBLE ASSETS Intangible assets are stated at cost less accumulated amortisation. Cost in relation in intangible asset is amortised using straight line method spread over a period not exceeding three years. 2.6. INVESTMENTS AVAILABLE FOR SALE Investments which are not held for trading or held to maturity are classified as available for sale. All investments are initially recognised at cost, being the fair value of the consideration given including acquisition charges associated with the investment. After initial recognition, investment which are classified as available for sale are remeasured at fair value. Unrealised gains and losses on available for sale investments are recognised in equity until the investment is sold, collected or otherwise disposed off, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is include in income. IN RELATED PARTIES Investments in related parties are accounted for using cost method of accounting as allowed by International Accounting Standard - 28 "Accounting for investment in associates". Provision is made for impairment loss in the value of investments, if any. 2.7. STORES, SPARES AND LOOSE TOOLS Stores, spares and loose tools, except items-in-transit, are valued at cost calculated on a first-in-first-out basis. Items in-transit are valued at cost comprising invoice value plus other charges accrued thereon to the balance sheet date. Provision is made annually in the financial statements for slow moving and obsolete items. 2.8. STOCKS Stocks, except items in-transit, are valued at the lower of cost and net realisable value. Cost is calculated on a first-in-first-out or specific consignment basis, depending upon their categories. Stocks-in-transit are stated at invoice value plus other charges accrued thereon to the balance sheet date. The Company assumes title to stocks-in-transit after shipments. Vehicles on wheels are taken as work-in-process until they are approved by the quality control department. After such approval the vehicles are classified as finished goods. The assembled engines are included in raw material. The cost of assembled engines, work-in-process and finished goods consists of landed cost of imported materials, average local material cost, factory overhead and direct labour. Cost in relation to CKD vehicles represents landed cost. Net realisable value is determined by considering the prevailing selling prices of vehicles in the ordinary course of business less cost of completion and cost necessary to be incurred in order to make the sale. The net realisable values are determined on the basis of each line of product. Provision is made annually in the financial statements for slow moving and obsolete items. 2.9. TRADE DEBTS Known bad debts are written off and provision is made for impairment losses. 2.10. Provisions are recognised in the balance sheet where the Company has a legal or constructive obligation as a result of past event, and it is probable that outflow of economic benefits will be required to settle the obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect current best estimate. 2.11. IMPAIRMENT The carrying amounts of the Company's assets except for inventories and deferred tax assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets' recoverable amount is estimated and impairment losses are recognised in the profit and loss account. 2.12. FINANCIAL INSTRUMENTS All financial assets and liabilities are initially measured at cost, which is the fair value of the consideration given and received respectively. These are subsequently measured at fair value, amortised cost or cost, as the case may be and the resulting gain or loss, if any, is included in the profit and loss account/equity in the period in which it arises. 2.13. DERIVATIVE FINANCIAL INSTRUMENTS In relation to fair value hedges, which meet the conditions for special hedge accounting, any gain or loss from remeasuring the hedging instrument at fair value is recognised immediately in the profit and loss account. Any gain or loss on the hedged item attributable to the hedged risk is adjusted against the carrying amount of the hedged item and recognised in the profit and loss account. 2.14. EMPLOYEES RETIREMENT BENEFIT SCHEMES The Company operates an approved contributory provident fund scheme as well as an approved defined benefit funded gratuity scheme covering all its permanent employees. The gratuity benefits are payable to staff on completion of prescribed qualifying period of service at the time of retirement as laid down in the scheme. Contributions are payable to the gratuity fund on yearly basis as per actuarial recommendations. Actuarial gains and losses are accounting for in accordance with the minimum recommended approach under International Accounting Standard - 19, 'Employee Benefits'. 2.15. TAXATION Current Provision for current taxation in the financial statements is based on taxable income at the current rate of taxation after taking into account tax credits and tax rebates available, if any, and under final tax regime of the Income Tax Ordinance, 2001 on commercial imports or minimum tax at 0.5 percent of turnover, whichever is higher. Deferred Deferred tax is recognised using the liability method, on major temporary differences at the balance sheet between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets are recognised for all deductible temporary differences to the extent that the temporary differences will reverse in the future and taxable income will be available against which the deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part for the deferred tax asset to be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or subsequently enacted at the balance sheet date. 2.16. FOREIGN CURRENCIES Foreign currency transactions are converted at the rates of exchange ruling on the dates of those transactions. Monetary assets and liabilities expressed in foreign currencies are translated into Pak rupees at the rates of exchange prevailing on the balance sheet date. Exchange gains and losses are included in profit and loss account currently. 2.17. REVENUE RECOGNITION Revenue is recognised when goods and sold and services rendered. Goods are treated as sold when they are specified and invoiced. Warranty and insurance claims are recognised when the claims in respect thereof the lodged with the respective parties. Indenting and agency commission is recognised when the shipments are made by the principal. Return on bank deposits is accounted for on accrual basis. Dividend income is recognised when the company's right to receive such dividends has been established. 2.18. ACCOUNTING FOR COMPENSATED ABSENCES The Company accounts for employees' compensated absences on the basis of unavailed earned leave balance of each employee as at the end of the year. 2.19. TRANSACTIONS WITH RELATED PARTIES The Company enters into transactions with related parties for sale / purchase of goods and these are priced on arm's length basis using Transactions Net Margin Method. Royalty and fee for technical services are accounted for at the rates mentioned in the respective agreements, duly registered with the State Bank of Pakistan. 2.20. WARRANTY OBLIGATIONS The Company accounts for its warranty obligations on accrual basis. 2.21. CASH AND CASH EQUIVALENT For the purpose of the cash flow statement, cash and cash equivalents consists of cash in hand and at banks net off short-term running finances. 3. PROPERTY, PLANT AND EQUIPMENT - AT BOOK VALUE ========================================================================================
2004 2003
Notes (Rupees in thousand)
========================================================================================
Operating fixed assets 3.1 1,057,949 862,085
Capital work-in-progress 3.7 1,145,503 63,998
2,203,452 926,083
========================================================================================3.1. OPERATING FIXED ASSETSThe following is a statement of operating fixed assets: ===============================================================================================================================
Acc. Depr. * Charge for * Acc. Book
Cost as Cost as at the year/ depre. as value as
Notes at Jan. 01,Additions/ at Dec. 31, Jan. 01 (depre. at Dece. 31, at Dec. 31 Rate
2004 (deletions) 2004 2004 on deletion) 2004 2004 %
===============================================================================================================================
Leasehold land 57,871 - 55,083 12,728 918 13,204 41,879 60 Years
(2,788) (442)
Buildings on lease hold
Land 3.4 & 3.5
- Factory 545,476 57,018 602,494 314,989 48,454 363,443* 239,051 10&20
- Office 2,063 - 2,063 2,063 - 2,063 - 20
- Test Tracks & other building 7,780 5,723 13,503 6,312 1,438 7,750 5,753 10
Plant and machinery 1,513,255 378,216 1,891,471 1,220,519 184,756 1,405,275* 486,196 25&35
Welding guns 48,074 8,457 56,531 35,371 7,406 42,777* 13,754 35
Waste water treatment plant 44,928 - 44,928 40,844 1,021 41,865 3,063 25
Permanent & special tools 131,242 13,174 144,416 106,951 13,716 120,667* 23,749 35&40
Dies - 3.6 609,273 56,319 665,592 465,034 71,188 536,222* 129,370 35&40
Jigs & fixtures 256,327 8,006 264,333 209,909 20,749 230,758* 33,575 35&40
Electrical installations 17,105 20,523 37,628 14,995 4,527 19,522 18,106 20
Furniture and fittings 10,162 278 10,440 8,810 326 9,136 1,304 20
Vehicles 110,953 15,469 106,092 63,690 11,519 60,019 46,073 20
(20,330) (15,190)
Airconditioners and refrigerate 17,040 3,990 19,722 14,267 1,316 14,457 5,265 20
(1,308) (1,126)
Office equipment 14,061 3,822 17,883 10,349 1,507 11,856 6,027 20
Computers 24,072 6,472 27,699 20,766 4,785 22,915* 4,784 50
(2,845) (2,636)
2004 3,409,682 577,467 3,959,878 2,547,597 373,726 2,901,929 1,057,949
(27,271) (19,394)
2003 3,062,787 376,767 3,409,682 2,218,896 349,858 2,547,597 862,085
(29,872) (21,157)
===============================================================================================================================* includes accumulated impairment loss amounting to Rs. 42,772 million (2003: Rs. 42,772 million).3.2. DEPRECIATION CHARGE FOR THE YEAR HAS BEEN ALLOCATED AS UNDER ========================================================================================
2004 2003
Notes (Rupees in thousand)
========================================================================================
Cost of goods manufactured 25.1 353,852 332,250
Selling and administration expenses 26 19,874 17,608
373,726 349,858
========================================================================================3.3. THE FOLLOWING ASSETS WERE DISPOSED OFF DURING THE YEAR=============================================================================================================================================================
Accumulated Net Book Sale Profit Mode of Particulars of buyers &
Particulars Cost depreciation value proceeds (loss) disposal Insurance Company
=============================================================================================================================================================
Leasehold land 2,133 339 1,794 2,844 1,050 Negotiation Muitiple Autoparts Plot No. 23, Sector 19 Korangi
Industries Industrial Area, Karachi
Leasehold land 655 103 552 874 322 Negotiation Bhawalpur A-68, Moria Khan Goth, Main
Engineering Shahra-e-Faisal, Karachi
4,788 442 2,346 3,718 1,372
VEHICLES
Suzuki Vehicles 4,796 3,331 1,465 1,942 477 As per company Company Employees
Policy
Suzuki Baleno Estate Car 1,562 1,194 368 368 Negotiation Capt Retd Bashir Ex-Company employee
Ahmed
Suzuki Khyber & Bolan 630 475 155 531 376 Tender M. Saeed Siddiqui A-133, Block L, North Nazimabad
Karachi
Suzuki Baleno 775 546 229 507 278 Tender Abdul Aziz Juma A/64 Ahmed Abdul Ghani Mill,
S.I.T.E, Karachi
Suzuki Baleno 605 382 223 482 259 Tender Mohammad Muneer Flat No. 29, Bantva Memon
Complex, North Nazimabad, Karachi
Suzuki Baleno, Margalla, 3,876 2,850 1,026 2,031 1,005 Tender Saeed Meer Naz Motors-Mistri Khan
Mehran Village Mangho Pir Road, Karachi
Suzuki Mehran, Ravi 741 527 214 490 276 Tender Ghulam Murtaza Naz Motor-Mistri Khan
Village Mangho Pir Road, Karachi
Suzuki Baleno 685 483 202 515 313 Tender Mohammad Arif B/30, Sector 11-C 1, Sir Syed
Town, Karachi
Suzuki Bolan 260 199 61 196 135 Tender Rashid Ayub B-51, Sector 11-A, North Karachi,
Karachi
Suzuki Margalla, Mehran 755 562 193 621 428 Tender Waseem Mirza A-48, Block 2, G Iqbal, Karachi
Suzuki Mehran, Ravi 270 219 51 180 129 Tender Faisal Mahmood 35-W, DHA, Lahore
Suzuki Sedan 507 430 77 426 349 Tender Zahid Zafar C/o Suzuki Oriental Motors
Toyota Hiace Diesel 229 225 4 60 56 Insurance National Insurance NIC Building Rafique Shaheed
Claim corporation Road, Karachi
Suzuki Bolan 285 230 55 216 161 Tender Mohammad Yar 31-Jala Din Road, Mazang,
Lahore
Suzuki Cars 2,219 1,534 685 822 137 Negotiation Company Employees Under Executive Car Scheme
TCM Fork Lift Truck 2,135 2,003 132 1,485 1,353 Tender Mr. Ijaz Fine Arcade House No. 1/5
Lee Market, Karachi
20,330 15,190 5,140 10,872 5,732
AIRCONDITIONERS & REFIRGERATORS
AC & Refirgerators 184 156 28 28 - Negotiation Company Employees
AC & Refrigerators 1,124 970 154 53 (101) Tender Abdullah Soomro Hawa Bai Manzil, Timber Market,
Karachi
1,308 1,126 182 81 (101)
COMPUTERS
Personal Computers 1,663 1,519 144 75 (69) Negotiation Company Employees and Printers
Personal Computers 1,182 1,117 65 7 (58) Tender Abdullah Soomro wa Bai Manzil, Timber Market,
Karachi and Printers
2,845 2,636 209 82 (127)
2004 27,271 19,394 7,877 14,753 6,876
2003 29,872 21,157 8,715 12,568 3,853
=============================================================================================================================================================3.4. The buildings on leasehold land at West Wharf are situated at three plots numbered 16, 20 and 21. These plots are owned by Karachi Port Trust (KPT). The lease tenures of plots number 16, 20 and 21 expired on July 31, 1998, March 31, 1998 and September 30, 1998 respectively.Except for plot No 20, lease agreements of plot Nos 16 and 21 are registered in the name of Sindh Engineering (Private) Limited and Republic Motors (Private) Limited respectively, both subsidiary companies of PACO. Despite persistent efforts, KPT has not issued mutation letter in respect of plot No 20 neither have they effected transfer and / or renewed leases in respect of plot Nos 16 and 21. On the other hand KPT without any notice, intimation or warning forcibly took possession of plot Nos 20 and 21. The Company had filed writ petitions in the Honourable High Court of Sindh praying for restoration of possession and renewal of leases in favour of the Company. Status quo had been granted and notices issued to the respondents by the Court in this respect. No formal hearing has been conducted to date. 3.5. The immovable assets lying at West Wharf have been impaired by the action of KPT as explained in note 3.4 above. Such assets included buildings, electric installations and immovable plant. The book value of these assets was Rs 14.604 million. This impairment had necessitated charging off the entire book value of these assets to the said extent and accordingly it was fully charged in the year 1998. 3.6. Certain dies of book value Rs 6.871 million (2003: Rs 10.932 million) were lying vendor for production of components to be supplied to the Company. 3.7. CAPITAL WORK-IN-PROGRESS ========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Advance for capital expenditure 57,503 14,165
Building 259,107 5,887
Plant and machinery 828,893 43,946
1,145,503 63,998
========================================================================================4. INTANGIBLE ASSETS========================================================================================
2004 2003
Note (Rupees in thousand)
========================================================================================
Designing fee for development of a component
Cost at beginning of the year 40,267 -
Addition during the year - 40,267
Cost at end of the year 40,267 40,267
Less: Accumulated amortisation at
beginning of the year 13,422 -
Amortisation for the year 25.1 13,422 13,422
Accumulated amortisation at end of the year 26,844 13,422
Book value 13,423 26,845
========================================================================================4.1.The above intangible asset is amortised over three years. 5. INVESTMENTS IN RELATED PARTIES -AT COST ========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
QUOTED
Suzuki Motorcycles Pakistan Limited an associated company
18 million (2003: 18 million)
fully paid ordinary shares of Rs 10/- each representing 41% holding.
Market value as at December 31, 2004 Rs. 477 million
(2003: Rs. 292.5 million) 28,800 28,800
UNQUOTED
Arabian Sea Country Club Limited an associated company
500,000 (2003: 500,000) full paid ordinary
shares of Rs 10/- each 5,000 5,000
Equity held 6.45% (2003: 6.45%)
Value based on net assets as at June
30, 2004 Rs 2.945 million
Less: Provision for impairment
in the value of investment 5,000 5,000
- -
28,800 28,800
Automotive Testing & Training Centre
(Pvt.) limited (AT & TC) - an associated company
75,000 (2003: 75,000) fully paid
ordinary shares of Rs 10/- each 750 750
Equity held 4.17% (2003: 5%)
Value based on net assets as at
June 30, 2004 Rs 0.526 million
Less: Provision for impairment in
the value of investment 750 750
- -
28,000 28,800
========================================================================================6. LONG-TERM LOANS-CONSIDERED GOOD========================================================================================
2004 2003
Notes (Rupees in thousand)
========================================================================================
Loans to employees 6.1 3,940 3,947
Less: Receivable within one year 12 1,867 2,196
2,073 1,751
========================================================================================6.1. These represent loans given to employees, against guarantee of two employees of the Company. These loans are repayable in thirty-six equal monthly installments free of any financial charges.7. LONG-TERM DEPOSITS AND PREPAYMENTS ========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Deposits 5,019 5,069
Prepayments 959 462
5,978 5,531
========================================================================================8. DEFERRED TAX ASSETS========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
DEBIT BALANCE ARISING ON ACCOUNT OF:
Provision for customs duty and sales tax 149,500 120,000
Provision for compensatory leave 4,000 5,000
Difference between accounting and tax depreciation 7,500 19,000
161,000 144,000
========================================================================================9. STORES, SPARES AND LOOSE TOOLS========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Stores 23,310 17,970
Spares 13,580 13,035
Loose tools 22,736 12,884
59,626 43,889
Less: Provision for slow moving and obsolete items 18,965 20,212
40,661 23,677
========================================================================================10. STOCK IN TRADE========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Raw material and components [including items in transit
Rs 1,497.383 million (2003: Rs 743.763 million)] 2,896,746 1,959,757
Less: Provision for obsolete items 9,485 10,509
2,887,261 1,949,248
Work-in-process 73,407 36,109
Finished goods 736,154 237,571
Trading stocks 89,690 60,475
Less: Provision for slow moving and obsolete items 21,235 24,990
68,455 35,485
3,765,277 2,258,413
========================================================================================10.1. Of the aggregate amount, stocks worth Rs 210.794 million (2003: Rs 15.4 million) were in the custody of dealers and vendors.11. TRADE DEBTS - CONSIDERED GOOD ========================================================================================
2004 2003
Note (Rupees in thousand)
========================================================================================
Due from Government Agencies 122,190 64,369
Others 11.1 18,189 9,688
140,379 74,057
========================================================================================11.1. Includes Rs 1.951 million (2003: nil) receivable from associated company, Arabian Sea Country Club Limited. The maximum aggregate balance at the end of any month is Rs 2.508 million (2003: nil).12. LOANS AND ADVANCES ========================================================================================
2004 2003
Notes (Rupees in thousand)
========================================================================================
CONSIDERED GOOD
Current portion of loans to employees 6 1,867 2,196
ADVANCES TO:
- Employees 2,078 2,105
- Provident fund - 1
- Gratuity fund - 3,727
- Suppliers / vendors 12.1 21,539 14,726
25,484 22,755
Considered doubtful - advances to suppliers / vendors 8,000 12,000
33,484 34,755
Less: Provision for doubtful advances to suppliers / vendors 8,000 12,000
25,484 22,755
========================================================================================12.1. Includes advances to vendors of Rs 4.278 million, which carry mark-up ranging from 14% - 18% per annum.13. TRADE DEPOSITS AND PREPAYMENTS ========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Prepayments 28,492 6,925
Trade deposits 1,940 930
30,432 7,855
========================================================================================14. OTHER RECEIVABLES - CONSIDERED GOOD========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Due from Suzuki Motor Corporation, Japan - holding company 11,102 9,816
Due from vendors for material / components supplied 3,868 3,703
Others 4,518 4,537
19,488 18,056
========================================================================================14.1. The maximum aggregate amount due from the holding company at the end of any month during the year was Rs 15.094 million (2003: Rs 13.996 million).15. INVESTMENT - AVAILABLE FOR SALE ========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Atlas Income Fund - quoted
196,607 units (2003: nil) having
a face value of Rs 500 each 98,303 -
Amount of premium paid on acquisition 1,697 -
100,000 -
Gain arising on remeasurement to fair value 1,365 -
101,365 -
========================================================================================15.1. The above investment is remeasured to fair value using market value as at December 31, 2004.16. CASH AND BANK BALANCES ========================================================================================
2004 2003
Notes (Rupees in thousand)
========================================================================================
Cash in hand 3,109 1,615
Cheques in hand - 66,959
CASH AT BANK:
On deposit 16.1 & 16.2 6,538,986 5,527,202
In a special deposit account 16.2 & 16.3 62,304 58,504
In current accounts 16.1 89,597 78,472
6,690,887 5,664,178
6,693,996 5,732,752
========================================================================================16.1. The above balance include book overdraft amounting to Rs 110.431 million (2003: Rs 101.383 million).16.2. The mark-up on funds placed on deposit accounts ranges from 3% to 5.1% (2003: 1% to 3%) per annum. 16.3. The special account is maintained in respect of security deposits (note 19) in accordance with the requirements of Section 226 of the Companies Ordinance, 1984. 17. ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL ========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
44,284,117 (2003: 44,284,117) Ordinary shares of Rs 10/- each
fully paid in cash 442,841 442,841
2,800,000 (2003: 2,800,000) Ordinary shares of Rs 10 each fully
paid-up for consideration other than cash 28,000 28,000
2,047,135 (2003: 2,047,135) Ordinary shares
of Rs 10/- each issued as fully paid bonus shares 20,471 20,471
491,312 491,312
========================================================================================17.1. At December 31, 2004 Suzuki Motor Corporation, Japan (holding company) held 35,909,838 Ordinary shares of Rs 10/- each (2003: 35,909,838 Ordinary shares).18. RUNNING FINANCE The facilities for running finances available from banks amounted to Rs 500 million (2003: Rs 1,668 million). These facilities are secured by hypothecation charge on stocks. The mark-up rates are base rate plus 150 basis points with a floor of 4.5% per annum. Base rate is one month Karachi Inter Bank Offer Rate (KIBOR). Base rate is to be reset on monthly basis as prevailing on last working day of every month. These facilities are for one year and are renewable on agreed terms. 19. SECURITY DEPOSITS ========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Repayable on demand 59,454 55,654
Other deposits 2,850 2,850
62,304 58,504
========================================================================================The above deposits are not liable to financial charges.20. TRADE AND OTHER PAYABLES ========================================================================================
2004 2003
Notes (Rupees in thousand)
========================================================================================
Creditors 699,736 380,544
ACCRUED LIABILITIES:
Accrued expenses 161,022 88,856
Royalties and technical fee payable to Suzuki Motor
Corporation, Japan - holding company 198,214 125,479
Mark-up on waiting for delivery of vehicles 50,836 25,891
Dealers' commission 178,362 134,605
Workers' profit participation fund 20.1 114,911 128,010
Workers' welfare fund 45,817 52,609
749,162 555,450
Gratuity fund .2.1 2,705 -
Unclaimed dividend 2,759 1,287
OTHER LIABILITIES:
Retention money 16,895 4,476
Others 15,669 6,478
32,564 10,954
1,486,926 948,235
========================================================================================20.1. WORKERS' PROFIT PARTICIPATION FUND========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Balance at beginning of the year 128,010 70,892
Mark-up on funds utilised in
the company's business 22 3,452
128,032 74,344
Allocation for the year 114,911 128,010
242,943 202,354
Less: Paid during the year 128,032 74,344
Balance at end of the year 114,911 128,010
========================================================================================20.2. EMPLOYEES GRATUITY FUNDThe latest actuarial valuation was carried out as at December 31, 2004 using the Projected Unit Credit Method, according to which present vale of gratuity obligation and fair value of gratuity assets were Rs 100.972 million and Rs 128.458 million respectively. The rate of 8% was assumed for discount/return on investment and increase in salaries. 20.2.1. AMOUNT RECOGNISED IN THE BALANCE SHEET ========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Present value of defined benefit obligation (100,972) (101,231)
Fair value of plan assets 128,458 115,772
Un-recognised actuarial gains (30,191) (10,814)
(2,705) (3,727)
========================================================================================20.2.2. EXPENSE RECOGNISED IN THE PROFIT AND LOSS ACCOUNT========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Current service cost 6,877 6,837
Interest cost 8,098 8,215
Expected return on plan assets (10,419) (10,875)
Actuarial gain - (1,381)
4,556 2,796
========================================================================================20.2.3. MOVEMENT IN NET (LIABILITY)/ASSET RECOGNISED IN THE BALANCE SHEET========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Opening balance - asset 3,727 3,670
Expense recognised in the financial statements (4,556) (2,796)
Contribution (received)/paid during the year (1,876) 2,853
(2,705) 3,727
========================================================================================20.2.4. ACTUAL RETURN/LOSS ON PLAN ASSETS========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Expected return on plan assets 10,419 10,875
Actuarial gain/(loss) on plan assets 16,741 (15,792)
Actual return/(loss) on plan assets (27,160) (4,917)
========================================================================================21. ADVANCES FROM CUSTOMERS AND DEALERS========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
5,288,263 3,178,181
========================================================================================Mark-up is payable for delayed period if the delivery is made after sixty days from the date of booking. The rate of mark-up varies from month to month subject to weighted average rate of 3 months treasury bills of last three months.22. PROVISION FOR CUSTOM DUTIES AND SALES TAX ========================================================================================
2004 2003
Notes (Rupees in thousand)
========================================================================================
Provision for custom duties and sales tax 22.1 & 22.4 426,289 343,865
========================================================================================22.1. Includes Rs 69.455 million (2003: Rs 69.455 million) being provision against various demands raised by the custom authorities on account of alleged short payment of custom duties, additional surcharge on goods overstayed in bond and custom duties on loading for association charges in respect of material imported in prior years.The company's appeals against the orders passed in above cases are pending in Customs Appellate Tribunal/Sindh High Court. In view of the inherent delays that are associated and the element of uncertainty inherent in legal matters, provisions have been made as a matter of prudence. 22.2. Includes Rs 192.747 million (2003: Rs 110.323 million) being provision for custom duties and sales tax in respect of certain components of Suzuki Baleno imported during the current and last year. Based on clause (iii) of SRO No 436(1) dated June 18, 2001, the custom authorities have interpreted that CBU rate of duty is applicable on such components. The Company had disputed the contention before the custom authorities. The consignments of such components have been cleared from custom after payment of custom duty at "auto-parts" rate of duty on the basis of undertaking/bank guarantee given by the Company that the Company would pay the differential amount of duty if the Engineering Development Board (EDB) conforms the interpretation of custom authorities. EDB has been approached by the custom authorities for clarification. Pending such confirmation by EDB, the Company has worked out the differential amount of duty for which provision has been made in the financial statements as a matter of prudence. 22.3. Includes Rs 164.087 million (2003: Rs 164.087 million) being provision for custom duties and sales tax on discount allowed by SMC Japan in the FOB price of CKD imported during prior years. Custom authorities have interpreted such discount as being special in nature and in consequence had issued Demand cum Show Cause Notice to the Company demanding custom duties and sales tax aggregating to Rs 57 million relating to imports during the period from August 1999 to September 2000. The company has contended before the custom authorities and is of the view that these are normal trade discounts. The case are decided against the company by the Assistant Collector. The company's appeal against the decision of Assistant Collector, was dismissed by the Collector Appeals. The Company is in the Process of filing said appeal before the Tribunal. Apprehending such demand from the custom authorities for the period October 2000 to March 2002 as well, the Company ahs worked out an amount of Rs 107.087 million being alleged short payment of custom duties and sales tax in respect of discount availed by the Company and accordingly made a provision in the financial statements as a matter of prudence in view of inherent uncertainties associated in such matters. 22.4. THE MOVEMENT IN PROVISION FOR CUSTOM DUTIES AND SALES TAX IS AS UNDER ========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Balance brought forward 343,865 298,058
Payment made during the year - (7,157)
Reversal of provision - (3,038)
Provision during the year 82,424 56,002
426,289 343,865
========================================================================================23. COMMITMENTS23.1. Capital expenditure contracted for but not incurred amounted to Rs 195.065 million (2003: Rs 44.88 million). 23.2. The facilities for opening letters of credit as at December 31, 2004 amounted to Rs.1,832 million (2003: Rs 2,205 million) of which the amount remaining unutilised at the year end was Rs 1,005 million (2003: Rs 1,545 million). 24. NET SALES ========================================================================================
2004 2003
Note (Rupees in thousand)
========================================================================================
MANUFACTURED GOODS:
Turnover 24.1 28,363,754 21,510,749
Less: Sales tax 3,695,611 2,802,070
Discounts - 17
3,695,611 2,802,087
24,668,143 18,708,662
Less: Commission paid to selling agents 471,980 367,852
24,196,163 18,340,810
TRADING STOCKS:
Turnover 307,183 167,734
Less: Sales tax 41,380 24,324
265,803 143,410
24,461,966 18,484,220
========================================================================================24.1.This includes export sales of Rs 57.720 million (2003: Rs 28.506 million). 25. COST OF SALES ========================================================================================
2004 2003
Note (Rupees in thousand)
========================================================================================
MANUFACTURED GOODS:
Finished goods at beginning of the year 237,571 366,712
Cost of goods manufactured 25.1 22,343,439 15,605,047
Export expenses 13,272 5,500
22,594,282 15,977,259
Less: Finished goods at end of the year 736,154 237,571
21,858,128 15,739,688
TRADING STOCKS:
Stocks at beginning of the year 34,485 30,882
Purchases during the year 220,145 111,781
255,630 142,663
Less: Stocks at end of the year 68,455 35,485
187,175 107,178
22,045,303 15,846,866
========================================================================================25.1. COST OF GOODS MANUFACTURED========================================================================================
2004 2003
Notes (Rupees in thousand)
========================================================================================
Raw materials and components at beginning of the year 1,949,248 1,496,107
Purchases during the year 1.1 21,800,616 14,912,561
23,749,864 16,408,668
Less: Raw materials and components
at end of the year 2,887,261 1,949,248
Raw materials and components consumed 20,862,603 14,459,420
Stores and spares consumed 85,043 62,807
Reversal of provision for
slow moving and obsolete stores, spares
and loose tools (1,247) (2,205)
Fuel and power 82,403 67,273
Salaries, wages and other benefits 1.2 290,498 239,763
Rent, rates and taxes 9,085 1,592
Travelling and training 20,795 9,479
Insurance 14,938 10,457
Repairs and maintenance 106,936 85,712
Royalties and technical fee 359,465 223,341
Depreciation and impairment loss 3.2 353,852 332,250
Amortisation of intangible asset 4 13,422 13,422
Provision for customs duties and sales tax - net 82,424 52,964
Refund of pre-shipment inspection charges (11) (5,561)
Conveyance and transportation 63,960 52,634
Communications 3,041 2,384
Hired security guards services 3,272 3,267
Compensation to vendor and supplier 12,800 339
Local development and promotional expenses 9,937 2,667
Printing and stationery 4,015 2,504
Others 3,506 1,227
1,518,134 1,156,316
22,380,737 15,615,736
Add: Work-in-process at beginning of the year 36,109 25,420
22,416,846 15,641,156
Less: Work-in-process at end of the year 73,407 36,109
22,343,439 15,605,047
========================================================================================25.1.1. Purchases are stated net of proceeds from the sale of packing materials Rs 69.474 million (2003: Rs 58.962 million).25.1.2. Includes Rs 2.723 million (2003: Rs 1.688 million) in respect of defined benefit gratuity fund and Rs 3.108 million (2003: Rs 3.205 million) in respect of defined contributory provident fund. 26. ADMINISTRATIVE EXPENSES ========================================================================================
2004 2003
Notes (Rupees in thousand)
========================================================================================
Salaries, wages and other benefits 26.1 102,673 87,762
Travelling and training 9,906 10,458
Hired security guards services 2,233 2,212
Rent, rates and taxes 5,345 4,417
Utilities 7,366 7,021
Insurance 4,708 4,053
Repairs and maintenance 7,376 3,532
Depreciation 3.2 19,874 17,608
Auditors' remuneration 26.2 1,090 1,138
Legal and professional charges 3,756 3,701
Conveyance and transportation 7,972 6,137
Entertainment 1,120 564
Printing and stationery 3,107 3,918
Communications 4,646 4,556
Directors fees 23 33
Donations - Relief goods for flood affectees of Sindh - 994
Reversal of provision for doubtful advances (4,000) -
Others 1,577 976
178,772 159,080
========================================================================================26.1. Includes Rs 1.833 million (2003: Rs 1.108 million) in respect of defined benefit gratuity fund and Rs 1.910 million (2003: Rs 1.933 million) in respect of defined contributory provident fund.26.2. AUDITORS' REMUNERATION ========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Audit fee 450 450
Fee for half yearly review, special
certifications and advisory services 610 656
Out of pocket expenses 30 32
1,090 1,138
========================================================================================27. SELLING EXPENSES========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Advertising and sales promotion 70,941 51,187
Free service and warranty claims 15,106 12,143
Royalty of spare parts 3,058 1,226
89,105 64,556
========================================================================================28. OTHER OPERATING INCOME========================================================================================
2004 2003
Note (Rupees in thousand)
========================================================================================
Mark-up on cash deposits with banks 161,535 170,954
Net profit disposal of fixed assets 3.3 6,876 3,853
Miscellaneous income 17,721 9,015
Net exchange gain 3,353 -
189,485 183,822
========================================================================================29. FINANCIAL CHARGES========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Mark-up on waiting for delivery of vehicles 34,423 27,744
Mark-up on running finance - 16
Mark-up on workers' profit participation fund 22 3,452
Bank charges 5,615 4,185
Net exchange loss - 1,936
40,060 37,333
========================================================================================30. WORKERS' WELFARE FUND========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
For the current year 44,500 52,000
For the prior years' (1,016) (1,406)
43,484 50,594
========================================================================================31. TAXATION========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
FOR THE YEAR:
- Current 772,000 888,000
- Deferred (17,000) (49,140)
755,000 838,860
FOR PRIOR YEARS'
- Current (18,756) (23,588)
- Deferred - (3,860)
(18,756) (27,448)
736,244 811,412
========================================================================================31.1. RECONCILIATION OF TAX CHARGE FOR THE YEAR========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Accounting profit 2,139,816 2,381,603
Corporate tax rate 35% 35%
Tax on accounting profit at applicable rate 748,936 833,561
Tax effect of income assessed
under Presumptive Tax Regime 5,047 522
Tax effect of expenses that are not allowable
in determining taxable income 1,017 4,777
Net effect of income tax
provision relating to prior years (18,756) (23,588)
Tax effect of adjustments in respect
of deferred taxation of prior years - (3,860)
736,244 811,412
========================================================================================32. BASIC EARNINGS PER SHARE (EPS)========================================================================================
2004 2003
========================================================================================
Net profit for the year (Rupees) 1,403,572 1,570,191
Number of ordinary shares (in 000's) issued
and subscribed at the end of the year 49,131 49,131
(Rupees)
Basic earnings per share 28.57 31.96
========================================================================================32.1.Basic earnings per share has no dilution effect. 33. CASH GENERATED FROM OPERATIONS ========================================================================================
2004 2003
Note (Rupees in thousand)
========================================================================================
Profit before taxation 2,139,816 2,381,603
ADJUSTMENTS FOR NON CASH CHARGES AND OTHER ITEMS:
Depreciation 373,726 349,858
Amortisation of intangible asset 13,422 13,422
Provision for custom duties and sales tax 82,424 52,964
Profit on disposal of fixed assets (6,876) (3,853)
Mark-up on cash deposits with banks (161,535) (170,954)
Financial charges 40,060 31,212
341,221 272,649
Working capital changes 33.1 1,512,363 (826,244)
3,993,400 1,828,008
========================================================================================33.1. WORKING CAPITAL CHANGES========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
(INCREASE)/DECREASE IN CURRENT ASSETS:
Stores, spares and loose tools (16,984) (6,743)
Stock in trade (1,506,864) (339,292)
Trade debts (66,322) (60,667)
Loans and advances (2,729) 9,159
Trade deposits and prepayments (22,577) 3,032
Other receivables (1,432) 14,991
Sales tax adjustable - considered good 196,423 (356,237)
(1,420,485) (735,757)
INCREASE/(DECREASE) IN CURRENT LIABILITIES
Bills payable 306,092 (979,405)
Security deposits 3,800 2,950
Trade and other payables 512,274 253,970
Advances from customers 2,110,682 631,998
2,932,848 (90,487)
1,512,363 (826,244)
========================================================================================34. TRANSACTIONS WITH RELATED PARTIESRelated parties of the Company include Suzuki Motor Corporation - Japan, holding company, and related group companies, local associated companies, staff retirement funds, directors and executives. The Company in the normal course of business carries out transactions with various related parties. Amount due from and to related parties, amount due from executives and remuneration of directors and executives are disclosed in the relevant notes to the financial statements. Other material transactions with related parties are given below: ========================================================================================
2004 2003
(Rupees in thousand)
========================================================================================
Purchases of components 10,324,491 6,999,319
Purchases of fixed assets 53,799 162,045
Sales including exports 45,183 25,159
Royalties and technical fee 362,523 224,567
Sub-assembly revenues and other claims 3,921 2,018
========================================================================================The above transactions with related parties were entered into at arm's length determined in accordance with approved valuation method.35. PLANT CAPACITY AND ACTUAL PRODUCTION ========================================================================================
2004 2003
(Number of Units)
========================================================================================
Plant capacity of all models (double shifts basis) 60,000 50,000
Actual production 66,369 49,155
========================================================================================The plant capacity was enhanced by hiring additional manpower, adjustment in conveyor speed and additional facilities. By extra hours over the double shift, actual production exceeded the capacity.36. NUMBER OF EMPLOYEES The Company had 584 employees at the year-end (2003: 569). 37. REMUNERATION OF EXECUTIVES, DIRECTORS AND CHIEF EXECUTIVE The aggregate amounts charged in the financial statements for remuneration, including benefits, to the chief executive, directors and executives of the Company are given below: =========================================================================================================
December 2004 December 2004
Chief Chief
Executives Directors Executive Executives Directors Executive
(Rupees in thousand)
=========================================================================================================
Managerial remuneration 8,412 8,116 3,840 5,470 7,534 4,978
Directors fees - 23 - - 33 -
Retirement benefits 1,097 183 - 767 165 -
Utilities and upkeep 7,425 120 72 4,611 432 200
Telephone 588 - - 402 - -
Entertainment - - - 44 - -
17,522 8,442 3,912 11,294 8,164 5,178
Number of persons 11 4 1 7 4 1
=========================================================================================================37.1. The chief executive, directors and certain executives of the company are provided with free use of company maintained cars. Medical facility is also provided as per Company's policy.37.2. Due to amendment in fourth schedule of Companies Ordinance 1984, number of executives in the corresponding figure, has changed from 137 to 7 and their remuneration from Rs. 66.822 to Rs. 11.294 million. 38. FINANCIAL ASSETS AND LIABILITIES The following are the financial assets and financial liabilities and have been recognised in the balance sheet at amortised costs because they are not held for trading. These financial assets and financial liabilities may be subject to interest rate / mark-up and credit risk. ===========================================================================================================================================
Interest/Markup bearing Non Interest bearing
Maturity upto one year
Maturity Maturity Sub-Total Total
Upto one after one
2004 2003 year year 2004 2003 2004 2003
(Rupees in thousand)
===========================================================================================================================================
Financial Assets
Investments - - 101,365 28,800 130,165 28,800 130,165 28,800
Loans & advances - - 1,867 2,073 3,940 7,675 3,940 7,675
Deposits - - 1,940 5,019 6,959 5,999 6,959 5,999
Trade debts - - 140,379 - 140,379 74,057 140,379 74,057
Accrued income on bank deposits - - 55,858 - 55,858 46,941 55,858 46,941
Other receivables - - 17,577 - 17,577 17,535 17,577 17,535
Cash & bank balances 6,601,290 5,585,706 92,706 - 92,706 147,046 6,693,996 5,732,752
6,601,290 5,585,706 411,692 35,892 447,584 328,053 7,048,874 5,913,759
Financial Liabilities
Bills payable - - 656,507 - 656,507 350,415 656,507 350,415
Security Deposits - - 62,304 - 62,304 58,504 62,304 58,504
Trade and other payables - - 1,326,198 - 1,326,198 767,616 1,326,198 767,616
Advances from customers 5,288,863 3,178,181 - - - - 5,288,863 3,178,181
5,288,863 3,178,181 2,045,009 - 2,045,009 1,176,535 7,333,872 4,354,716
===========================================================================================================================================The effective interest/mark-up rates for the monetary financial assets and liabilities are mentioned in respective notes to the financial statements.39. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair value except where it is separately disclosed in the notes to the financial statements. 40. CREDIT RISK AND CONCENTRATION OF CREDIT RISK Credit risk represents the accounting loss that would be recognised at the reporting date if the counter part fails completely to perform as contracted. The Company does not have any significant exposure to any individual customer or vendor. To reduce the exposure to credit risk the Company obtains insurance guarantee from the suppliers, security deposits from the dealers and generally retains the title till final recovery of debts. 41. FOREIGN EXCHANGE RISK MANAGEMENT Foreign currency risk arises mainly where payables exist due to the transactions with foreign undertakings. Payables to be matured after 30 days are covered through foreign exchange contracts. 42. DATE OF AUTHORISATION FOR ISSUE The financial statements have been authorised for issue by the Board of Directors of the Company in its meeting held on March 25, 2005. 43. CORRESPONDING FIGURES Corresponding figures have been rearranged and reclassified, wherever necessary, for the purpose of comparison. Significant reclassifications are as follows: Tangible fixed assets has been reclassified and shown as property, plant and equipment. Long term loans, deposits and prepayments has been bifurcated between long term loans and long term deposits and prepayments. Loan, advances, trade deposits and prepayments within current assets have been bifurcated between loans and advances, and trade deposits and prepayments. Creditors, accrued and other liabilities has been reclassified and shown as trade and other payables. Mark-up on waiting for delivery of vehicles has been reclassified from creditors, accrued and other liabilities and shown separately in notes to the financial statements. Administration and selling expenses has been bifurcated and shown separately. Remuneration of executives has been restated due to amendment in the definition of executive. The above changes have been made to comply with the new disclosure requirements arising on account of amendments in the fourth schedule to the Companies Ordinance, 1984. In addition to the above, comparative information has also been restated in order to comply with the change in accounting policy as explained in note 2.3. 44. STOCK DIVIDEND In their meeting held on March 25, 2005, the Board of Directors of the Company have proposed to issue Bonus Shares @ 10% (2003: Nil). The approval of the members for the above mentioned issue of bonus shares will be obtained at the Annual General Meeting to be held on April 27, 2005. The above appropriation has not been recognised in these financial statements as explained in note 2.3. 45. GENERAL Figures in these financial statements have been rounded off to the nearest thousand rupees. |