| Murree Brewery Co Ltd - 2005 |
======================================================================================================================== Balance sheet as at June 30, 2005 ======================================================================================================================== 2005 2004 2005 2004 Notes (Rs '000) (Rs '000) Notes (Rs '000) (Rs '000) SHARE CAPITAL AND RESERVES (Restated) FIXED ASSETS -Tangible ======================================================================================================================== Share Capital 4 89,620 71,696 Property, plant & equipment 12 636,144 589,171 RESERVES: Capital reserve 30,681 30,681 Contingency reserve 20,000 20,000 Revenue reserve 5 457,620 371,002 Long term investments 13 724 - 508,301 421,683 Long term advances 14 2,370 1,972 - considered good 597,921 493,379 Long term deposits 2,404 2,190 Surplus on revaluation of property, plant and equipment 6 337,626 347,820 CURRENT ASSETS: Stores, spares and loose tools 15 52,042 50,686 Non-current liabilities Stock in trade 16 174,227 132,099 Liabilities against assets 7 2,893 3,349 Trade debts - considered good 17 31,548 46,081 subject to finance lease Deferred liabilities 8 16,438 27,271 Advances - considered good 18 34,768 25,954 - staff retirement benefits Deferred taxation -net 9 41,954 45,074 Short term prepayments 5,982 1,668 61,285 75,694 Interest accrued 1,108 - CURRENT LIABILITIES: Other receivables 19 130 194 - considered good Trade and other payables 10 237,716 171,115 Short term investments 20 69,773 76,750 Current portion of Advance income tax - net 4,617 34,594 liabilities against assets subject to finance lease 7 2,897 2,733 Cash and bank balances 21 221,608 129,382 595,803 497,408 240,613 173,848 Contingencies and commitments 11 - - 1,237,445 1,090,741 1,237,445 1,090,741 ========================================================================================================================These financial statements were authorised for issue by the Board of Directors of the company in their meeting held on 5th October 2005. ============================================================================================================================== PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 2005 ============================================================================================================================== Liquor Division Glass Division Tops Division Company Company 2005 2004 2005 2004 2005 2004 2005 2004 Notes (Rs '000) (Rs '000) (Rs '000) (Rs '000) (Rs '000) (Rs '000) (Rs '000) (Rs '000) ============================================================================================================================== SALES: Third party sales 22 699,870 545,728 24,546 41,161 418,314 323,739 1,142,730 910,628 Inter divisional sales 36,606 21,434 135,743 64,944 - - - - 736,476 567,162 160,289 106,105 418,314 323,739 1,142,730 910,628 Less: Duties and taxes 22.3 (254,547) (189,374) (3,202) (5,426) (57,536) (53,965) (315,285) (248,765) 481,929 377,788 157,087 100,679 360,778 269,774 827,445 661,863 COST OF SALES: Third parties 23 183,324 161,768 164,159 129,061 232,460 179.122 579,943 469,951 Inter divisional 97,262 45,576 - - 75,087 40,802 - - 280,586 207,344 164,159 129,061 307,547 219,924 579,943 469,951 Gross profit/(loss) 201,343 170,444 (7,072) (28,382) 53,231 49,850 247,502 191,912 Distribution cost 24 11,895 13,092 728 1,480 23,694 17,223 36,317 31,795 Administrative expenses 25 47,815 40,037 9,618 9,318 17,150 13,876 74,583 63,231 Finance cost 26 480 1,383 - - 394 446 874 1,829 60,190 54,512 10,346 10,798 41,238 31,545 111,774 96,855 Other operating expenses 27 12,019 8,491 Other operating income 28 45,613 35,038 Net profit/(loss) 141,153 115,932 (17,418) (39,180) 11,993 18,305 169,322 121,604 before taxation Taxation 29 (49,880) (33,442) Net profit after taxation 119,442 88,162 EARNING PER SHARE - BASIC (RUPEES) 30 13.33 9.84 ======================================================================================================================== ================================================================================= CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2005 ================================================================================= 2005 2004 Note (Rupees in '000) ================================================================================= CASH FLOW FROM OPERATING ACTIVITIES Net profit before tax 169,322 121,604 ADJUSTMENTS FOR: Depreciation 56,401 47,486 Provision for staff retirement benefits 7,972 3,701 Profit on deposits/dividend income/capital gain (21,140) (33,182) Bad debts written off 9 342 Stores and stock written off - 29 Finance cost 874 1,829 Unrealised (gain)/loss on re-measurement of available for sale securities (5,158) 5,827 Compensation for impaired (10,230) - property, plant and equipment Loss/(Profit) on disposal of 2,994 (889) property, plant and equipment 31,722 25,143 Operating profit before working capital changes 201,044 146,747 (Increase)/ decrease - Trade debts 14,524 (10,723) - Advances and other receivables (13,064) (12,699) - Stocks and stores (43,483) 7,476 (42,023) (15,946) Increase in current liabilities 52,713 30,125 211,734 160,926 Finance cost paid (418) (2,003) Staff retirement benefits paid (6,212) (1,327) Income taxes paid (23,030) (38,144) Net cash generated from operating activities 182,074 119,452 CASH FLOW FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (97,930) (43,292) Sales proceeds of property, plant and equipment 1,794 2,090 Long term deposits and advances (612) (9) Decrease/(increase) in short term investments 23,678 (39,753) (Increase)/decrease in long term investments (750) 132,115 Return on deposits/dividend income 8,515 3,511 Net cash (used in)/ generated (65,305) 54,662 from investing activities CASH FLOW FROM FINANCING ACTIVITIES: Repayment of finance leases (749) (2,564) Dividend paid (23,794) (11,506) Net cash used in financing activities (24,543) (14,070) Net increase in cash and cash equivalents 92,226 160,044 Cash and cash equivalents at the beginning of the year 129,382 (30,662) Cash and cash equivalents 31 221,608 129,382 at end of the year ================================================================================= =============================================================================================================================
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2005
=============================================================================================================================
Share Capital Reserve for General Contingency Unappropriated Total
Capital Reserves Issue of Reserve Reserve Profit
bonus shares
(Rupees in '000)
=============================================================================================================================
Balance as at June 30, 2003 59,747 30,681 11,949 274,042 20,000 886 397,305
as previously stated
Change in accounting policy with respect to
dividends and bonus shares declared after the
balance sheet date - - (11,949) - - 23,898 11,949
Restated balance as at July 1, 2003 59,747 30,681 - 274,042 20,000 24,784 409,254
Net profit for the year 2004 - - - - - 88,162 88,162
Final dividend for the year ended
June 30, 2003 (Rs 2 per share) - - - - - (11,949) (11,949)
Bonus shares issued for the year ended
June 30, 2003 @20% 11,949 - - - - (11,949) -
Surplus on revaluation of property, plant and
equipment realised through depreciation for
the year - net of deferred tax - - - - - 7,912 7,912
Transfer to general reserve - - - 53,000 - (53,000) -
Restated balance as at June 30, 2004 71,696 30,681 - 327,042 20,000 43,960 493,379
Balance as at July 1, 2004 71,696 30,681 17,924 327,042 20,000 942 468,285
- as previously reported
Change in accounting policy
with respect to dividends
and bonus shares declared after - - (17,924) - - 43,018 25,094
the balance sheet date
Restated balance as at June 30, 2004 71,696 30,681 - 327,042 20,000 43,960 493,379
Net profit for the year 2005 - - - - - 119,442 119,442
Final dividend for the year ended
June 30, 2004 (Rs 3.5 per share) - - - - - (25,094) (25,094)
Bonus shares issued for the year ended
June 30, 2004 @25% 17,924 - - - (17,924) - -
Transferred from surplus
on revaluation of property,
plant and equipment on disposal - - - - - 2,536 2,536
- net of deferred tax
Surplus on revaluation of property, plant and
equipment realised through
depreciation for the
year - net of deferred tax - - - - - 7,658 7,658
Balance as at June 30, 2005 89,620 30,681 - 327,042 20,000 130,578 597,921
=============================================================================================================================NOTES To THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 20051. THE COMPANY AND ITS OPERATIONS Murree Brewery Company Limited ("the company") is a public limited company incorporated in Pakistan. The shares of the company are listed on the Karachi, Lahore and Islamabad Stock Exchanges. The registered office of the company is situated in Rawalpindi. The company is principally engaged in the manufacturing of alcoholic beer, non-alcholic beer, Pakistan Made Foreign Liquor (P.M.F.L), juices in Tetrapacks in Rawalpindi and food products, juices and glass bottles and jars in Hattar. The company is presently operating three divisions to carry out its principal activities namely Liquor Division, Tops Food and Beverages Division and Glass Division. 2. STATEMENT OF COMPLIANCE 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 comprise 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 (SECP) differ with the requirements of these standards, the requirements of the Companies Ordinance, 1984 or the requirements of the said directives take precedence. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 3.1. ACCOUNTING CONVENTION These financial statements have been prepared under the historical cost convention except to the extent that certain property, plant and equipment and investments have been stated at revalued amounts. 3.2. TAXATION (i) Current Taxation charged in the accounts is based on taxable income at the current rates of taxes after taking into accounts tax rebates realisable, if any. (ii) Deferred Deferred tax is accounted for using the balance sheet liability method in respect of all temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of tax. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent to which it is probable that taxable profits will be available against which the deductible temporary differences, unused tax losses and tax credits can be utilised. 3.3. STAFF RETIREMENT BENEFITS The company operates the following retirement benefit schemes for its employees: (i) Defined contribution plan The company operates a Provident Fund Trust for which the company and the employees contribute equally @ 8.33 % of the basic pay. (ii) Defined benefit plans The company operates pension and gratuity plans for its eligible staff. The pension plan is a funded plan while the gratuity plan is defined benefit final salary book reserve plan. The liabilities under the plans determined on the basis of actuarial valuations carried out by using the "Projected Unit Credit Method" are charged to income. The company has a policy of carrying out actuarial valuations after every two years. Latest valuations were conducted as of June 30, 2005. Significant actuarial assumptions are as follows; Discount rate: 9% Increase in salary: 9% Mortality rate: EFU 61-66 mortality rate The amount recognised in the balance sheet represents the present value of defined benefits as adjusted for unrecognised actuarial gains and losses. The company recognises actuarial gains/losses over the expected remaining life of employees. (iii) Compensated absences The company also provides for compensated absences according to the company's rules. 3.4. PROPERTY, PLANT AND EQUIPMENT (i) Owned These are stated at cost less accumulated depreciation except for: --Lands, which were revalued on 31 July 1995 and 30 June 2002 and are stated at revalued figures. --Buildings, which were revalued on August 22, 1991,30 November 1991,31 July 1995 and 30 June 2002 are stated at revalued figures less accumulated depreciation thereon. --Plant and machinery which was revalued on August 10, 1992, 31 July 1992 and 30 June 2002 is stated at revalued figures less accumulated depreciation thereon. Depreciation is calculated on the cost of property, plant and equipment or their reassessed value, as the case may be, on the straight line method at rates given in the note 12 to the financial statements. Full year's depreciation is charged to the profit and loss account on additions during the year. Depreciation is not charged on deletions in the year of disposal. Minor renewals, replacements and repairs are charged to the profit and loss account as and when incurred, major improvements are capitalized. Gains and losses on disposals of fixed assets are taken to income currently. Capital work in progress is stated at cost. These costs are transferred to fixed assets as and when the assets are ready for use. Consequent to the amendments in Section 235 of the Companies Ordinance, 1984 and in terms of SRO 45(1)/2003 dated 13 January 2003 revaluation surplus to the extent of excess depreciation on revalued assets during the current financial year is taken to retained earnings. This effect has been shown in note 6 to these financial statements. (ii) Leased Leases in terms of which the company assumes substantially all the risks and rewards of ownership are classified as finance lease. Assets acquired by ways of finance lease are stated at an amount equal to the lower of their fair value and the present value of minimum lease payments at the inception of the lease less accumulated depreciation and impairment losses, if any. Lease payments are accounted for as described in note 3.11 to these financial statements. 3.5. IMPAIRMENT The carrying amount of the company's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment loss. If any such indication exists, the asset's recoverable amount is estimated in order to determine the extent of the impairment loss if any. Impairment losses are recognised as expense in the profit and loss account. 3.6. BORROWING COSTS All borrowing costs are charged to the profit and loss account as incurred. 3.7. INVESTMENTS (i) Investments held to maturity Investments with fixed maturity, where management has both the intent and ability to hold to maturity are classified as held to maturity and are stated at amortised costs. The resultant change in values is reported directly in the profit and loss account. (ii) Investments available for sale These are investments, which do not fall under the held for trading or held for maturity categories. These represent investments in equity instruments (including listed and unlisted securities) and except for investments in unlisted securities, are stated at fair values with any resulting gains/losses recognised directly in the profit and loss account. The fair value of these investments representing listed equity securities are determined on the basis of year end stock exchange prices. Investment in de- listed/suspended companies are carried at nil value. 3.8. STORES, SPARES AND STOCKS Stores and spares are valued at average cost with provision being made for obsolete and damaged items. Raw materials are valued at average cost. Finished goods are valued at lower of average cost and estimated net realisable value. Stocks under maturation are valued at manufacturing cost. Work in process is valued at estimated manufacturing cost. Goods in transit are valued at actual cost, which includes invoice value and other charges incurred thereon, less impairment losses, if any. Cost of finished goods include prime cost and appropriate portion of production over heads. Net realisable value represents the selling price less costs necessary to make the sale. 3.9. TRADE AND OTHER RECEIVABLES Trade and other receivables are recognised at nominal value less allowance for impairment. 3.10. REVENUE RECOGNITION Sales are recorded on dispatch of goods to customers. Net sales represent the invoiced value of goods, net of commission and discount, dispatched to customers by the company during the year. Return on deposits is accounted for on a time proportion basis using the applicable rate of interest. Capital gains or losses on sale of investments are taken to the profit and loss account in the period in which they arise. Dividend income is recognised at the time of book closure of the company declaring the dividend. 3.11. MARK-UP BEARING BORROWINGS Mark-up bearing borrowings are recognised initially at cost, less attributable transaction costs. Subsequent to initial recognition, mark-up bearing borrowings are stated at original cost less subsequent repayments. The company accounts for lease obligations by recording the asset and corresponding liability there against determined on the basis of discounted value of total minimum lease payments. Finance charge is recognised in the profit and loss account using the effective mark-up rate method. 3.12. TRADE AND OTHER PAYABLES Trade and other payables are stated at cost. 3.13. PROVISIONS A provision is recognised in the balance sheet when the company has legal or constructive obligation as a result of past event, if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. 3.14. FOREIGN CURRENCY TRANSACTIONS Foreign currency transactions during the year are translated in the Pak. Rupees at the exchange rates prevailing on the date of transaction. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated into Pak Rupees at the rates of exchange prevailing on the balance sheet date. Exchange differences, if any are charged to the profit and loss account. 3.15. DIVIDEND APPROPRIATION Dividends are recognised in the financial statements in the period in which they are declared. Up to previous year, dividends and transfers to reserve for issue of bonus shares, as the case may be, proposed after the balance sheet date but before the financial statements were authorised for issue were recorded as liability or transferred to the reserve for issue of bonus shares, as the case may be. The change has been necessitated by revision in the Fourth Schedule to the Companies Ordinance, 1984. The comparative statements for the year ended 30 June 2004 have been restated to conform to the changed policy. This change has resulted in increase of unappropriated profit as at 30 June 2004 by Rs 43.018 million, which represents the amount of final dividend and bonus shares proposed for the year ended June 30, 2004. Unappropriated profit for the year ended June 30, 2003 has been increased by Rs 23.898 million, which is the amount of final dividend and bonus proposed for the year ended 30 June 2003. 3.16. CASH AND CASH EQUIVALENTS Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of cash flow statement, cash and cash equivalents comprise of cash, bank balances and bank borrowings for working capital requirements. 3.17. FINANCIAL INSTRUMENTS All the financial assets and financial liabilities are recognised at the time when the company becomes the party to the contractual provisions of the instruments. The company de-recognises a financial asset or a portion of a financial asset when, and only when, the company loses control of the contractual right that comprise the financial asset or portion of financial asset. While a financial liability or part of financial liability is de-recognised from the balance sheet, when and only when, it is extinguished i.e., when the obligation specified in the contract is discharged, cancelled or expired. Financial assets are long term investments, trade debts, advances, deposits, other receivables, short term investments and cash and bank balances. These are stated at their nominal value or fair value as applicable and reduced by appropriate allowances for estimated irrecoverable amount, if any. Financial liabilities are classified according to the substance of contractual agreements entered into. Significant financial liabilities are liabilities against assets subject to finance lease and trade and other payables. 3.18. INTANGIBLE ASSET An intangible asset is recognised if it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and that the cost of such assets can also be measured reliably. The assets so recognised or amortised over the period during which the related economic benefits are likely to occur to the company. Intangible assets are stated at cost less accumulated amortisation. 4. SHARE CAPITAL =================================================================================
2005 2004 2005 2004
Numbers Numbers (Rupees in '000)
=================================================================================
ISSUED, SUBSCRIBED AND PAID UP CAPITAL:
264,000 264,000 Ordinary shares of Rs 10 each 2,640 2,640
fully paid in cash
Ordinary shares of Rs 10 each
8,698,006 6,905,605 issued as fully paid bonus shares 86,980 69,056
8,962,006 7,169,605 89,620 71,696
=================================================================================AUTHORISED SHARE CAPITALThis represents 10,000,000 ordinary shares of Rs 10 each 5. REVENUE RESERVES =================================================================================
2005 2004
(Rupees in '000)
=================================================================================
General reserve 327,042 327,042
Unappropriated profit 130,578 43,960
457,620 371,002
=================================================================================6. SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT=================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Opening balance of surplus on revaluation 381,599 393,771
of property, plant and equipment
Less: Adjustment of revaluation surplus on
property, plant & equipment disposed off
during the year (3,902) -
377,697 393,771
Transferred to un-appropriated profit
in respect of incremental
depreciation charged during the year (7,658) (7,912)
- net of deferred tax
Related deferred tax liability (4,124) (4,260)
(11,782) (12,172)
Surplus on revaluation of 365,915 381,599
fixed assets as at June 30
RELATED DEFERRED TAX LIABILITY ON:
Revaluation as at July 1 (33,779) (38,039)
Property, plant and equipment 1,366 -
disposed off during the year
Incremental depreciation charged during the year
transferred to profit and loss account 4,124 4,260
(28,289) (33,779)
337,626 347,820
=================================================================================7. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE================================================================================================
2005 2004
(Rs '000) (Rs '000)
Minimum Financial Principal Minimum Financial Principal
Lease Charge for Outstanding Lease Charge for Outstanding
Payments future period payments future periods
================================================================================================
Not later than one year 3,195 298 2,897 3,098 365 2,733
later than one year and not
later than five years 3,013 120 2,893 3,548 199 3,349
6,208 418 5,790 6,646 564 6,082
================================================================================================7.1. Lease rentals are payable on monthly basis and include finance charge ranging from 8% to 8.33%.The company has the option to purchase the assets upon completion of the lease period and has the intention to exercise such option. 7.2. These include minimum lease payments amounting to Rs 0.943 million (2004: Rs 2.009 million) payable to Atlas Investment Bank Limited - an associated company. 8. DEFERRED LIABILITIES - STAFF RETIREMENT BENEFIT =================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Provision for pension - 8,998
Provision for gratuity 16,438 18,273
16,438 27,271
================================================================================= The amounts recognised in the balance sheet are as follows:===================================================================================
Defined Benefits
2005 2004 2004
Gratuity Plan Pension plan Gratuity Plan Total
Rs '000 Rs '000 Rs '000 Rs '000
===================================================================================
Present value of unfunded obligation 15,999 12,222 18,955 31,177
Fair value of plant assets - - - -
Unrealised actuarial gains 439 (3,224) (682) (3,906)
Past Service cost not recognised - - - -
Net liability at the end of the year 16,438 8,998 18,273 27,271
Net liability at the beginning of the 18,273 7,786 17,111 24,897
NET EXPENSE:
Current service cost 1,031 590 813 1,403
Interest cost 1,327 790 1,246 2,036
Actuarial losses recognised - 262 - 262
2,358 1,642 2,059 3,701
Benefits paid during the year (4,193) (430) (897) (1,327)
16,438 8,998 18,273 27.271
===================================================================================8.1. During the year the company has established a separate fund for defined benefit pension plan, which is administered by its trustees.Company's liability towards the fund is shown under trade and other payables. 9. DEFERRED TAXATION =================================================================================
2005 2004
(Rupees in '000)
=================================================================================
TAXABLE TEMPORARY DIFFERENCES:
Surplus on revaluation of fixed assets 28,289 33,779
Tax depreciation allowance and finance lease 23,826 20,840
52,115 54,619
DEDUCTIBLE TEMPORARY DIFFERENCES:
Provision for staff retirement benefits (10,161) (9,545)
41,954 45,074
=================================================================================10. TRADE AND OTHER PAYABLES=================================================================================
2005 2004
Notes (Rupees in '000)
=================================================================================
Creditors 10.1 34,337 34,530
Accrued liabilities 24,120 22,047
Customers advances and securities 10.2 16,965 11,421
Unpaid dividend 5,852 5,125
Unclaimed dividend 1,979 1,401
Workers' (Profit) Participation Fund 10.3 10,023 5,082
Amount due to directors 190 48
With holding tax payable 177 128
Sales tax payable 16,596 9,687
Export Duty payable 10.4 72,628 51,263
Workers Welfare Fund 13,334 13,334
Payable to pension fund 10.5 12,593 -
Zila tax payable 6,871 6,871
Other liabilities 22,051 10,178
237,716 171,115
=================================================================================10.1. This includes Rs 0.863 million (2004: Rs 0.662 million) due to an associated undertaking - M/s D.P. Eduji & Co (Private) Limited on account of services rendered for the sale of company's products.10.2. These are payable on demand and carry no interest. 10.3. WORKERS' (PROFIT) PARTICIPATION FUND =================================================================================
2005 2004
Note (Rupees in '000)
=================================================================================
Opening Balance 5,006 2,489
Interest for the year 413 115
Contribution for the year 10.3.1 8,158 5,035
13,577 7,639
Less: Payments during the year (3,653) (2,633)
9,924 5,006
Add: Unpaid 5% Workers' (Profit) 89 66
Participation Fund
Unpaid interest 10 10
10,023 5,082
=================================================================================10.3.1. COMPUTATION OF WORKER'S (PROFIT) PARTICIPATION FUND=================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Profit for the year 180,540 129,024
LESS:
Rental income 1,013 1,705
(Loss)/gain on disposal of property, (2,994) 889
plant and equipment
Profit on long term investments - 15,179
Return on deposits 2,520 -
Gain on sale of investments 11,685 16,381
Unrealised gain/(loss) on
re-measurement of short term
investments to fair value 5,158 (5,827)
17,382 28,327
163,158 100,697
Contribution for the year at the rate of 5% 8,158 5,035
=================================================================================For the purpose of calculating worker's (Profit) Participation Fund, profit on deposits, investments etc. have been excluded.This is company's interpretation of the relevant law. The fund balance has been utilised by the company for its own purpose and interest at the rate of 26.25% has been credited to the fund. 10.4. This represents Rs 72.63 million (2004: Rs 51.26 million) payable on account of Export Duty on Pakistan Made Foreign Liquor and Beer. 10.5. THE AMOUNT RECOGNISED IN THE BALANCE SHEET ARE AS FOLLOWS =================================================================================
Funded pension Plan
2005 2004
(Rupees in '000)
=================================================================================
PRESENT VALUE OF DEFINED BENEFIT OBLIGATIONS:
Fair value of plan assets 12,154 -
Unrealised actuarial gains (1,061) -
Past service cost not recognised 2,956 -
Net liability at the end of the year (1,456) -
12,593 -
Net liability at the beginning of the year 8,998 -
NET EXPENSES:
Current service cost 603 -
Interest cost 856 -
Actuarial losses recognised 200 -
Past service cost recognised 3,955 -
5,614 -
Benefits paid during the year (2,019) -
12,593 -
=================================================================================11. CONTINGENCIES AND COMMITMENTS11.1. As a result of investigations by the National Accountability Bureau (NAB), relating to vend fee payments, a fine of Rs 20 million was imposed by the Accountability Court on an employee of the company. The Honourable High Court of Sindh in its order dated 29 May 2003 acquitted the employee, however, NAB has now preferred an appeal in the Honourable Supreme Court of Pakistan. Supreme Court of Pakistan in its order dated April 21, 2005 finally dismissed NAB's appeal in employee's favour. The Accountability Court had also held that reference be filed against certain directors and the General Manager of the company. This decision was suspended by the High Court of Sindh and the matter is currently pending with the Honourable High Court of Sindh. In the opinion of the management and on the basis of legal opinion, the company is not exposed to any liability on account of the above matter. 11.2. The company is contingently liable in respect of guarantees amounting to Rs 17.01 million (2004: Rs 11.82 million) issued by banks on behalf of the company in the normal course of business. 11.3. The company is contesting certain claims and levies imposed by various government authorities and departments amounting to Rs 7.02 million (2004: Rs 7.36 million) in various courts of law and other assessment forums. The company is hopeful of favourable settlement of these cases. 11.4. The company has opened Letters of Credit for the import of machinery and inventory items valuing approximately Rs 60.175 million (2004: Rs 39.28 million). 11.5. The company's capital commitments outstanding at the year end amount to Rs 166.362 million (2004: Rs 22.68 million). 11.6. Refer note 29.2 for contingencies related to tax matters. 12. PROPERTY, PLANT AND EQUIPMENT ============================================================================================================================================================================
COST / REASSESSED VALUE DEPRECIATION
============================================================================================================================================================================
PARTICULARS As at Of additions/ Impairment As at Rate As at On (deletions) Released For the As at Written down
1 July 2004 (deletions)/ during the 30 June 2005 % 01 July adjustments on account year 30 June value as
adjustments year 2004 during the of impairment 2005 at 30 June
during the year year 2005
Notes Rs ('000) Rs ('000) Rs ('000)
============================================================================================================================================================================
OWNED:
Freehold land 287,833 - - 287,833 - - - - - - 287,833
Buildings on freehold land 100,743 1,493 - 102,236 5-10 18,858 - - 9,581 28,439 73,797
Plant and machinery 248,154 54,636 (8,643) 284,952 10-20 65,311 (4,868) (5,186) 39,581 94,838 190,114
(9,195)
Furniture, fixtures and 7,902 813 - 8,695 10-33.3 4,779 (18) - 770 5,531 3,164
equipment (20)
Motor vehicles 14,056 12,136 - 27,465 20 8,419 (803) - 4,571 13,433 14,032
(1,260) 1,246
2,533
658,688 69,078 (8,643) 711,181 97,367 (5,689) (5,186) 54,503 142,241 568,940
(10,475) 1,246
2,533
LEASED:
Vehicles 9,819 2,741 - 10,027 20 3,328 (1,246) - 1,898 3,980 6,047
(2,533)
668,507 71,819 (8,643) 721,208 100,695 (5,689) (5,186) 56,401 146,221 574,987
(10,475)
Capital Work in progress 12.5 21,359 72,390 - 61,157 - - - - - 61,157
28.1 13,687
(46,279)
2005 (Rs '000) 689,866 101,142 (8,643) 782,365 100,695 (5,689) (5,186) 56,401 146,221 636,144
2004 (Rs '000) 638,836 33,316 - 668,507 55,653 (2,444) - 47,486 100,695 567,812
(3,645)
Capital Work in progress 6,988 14,436 - 21,359 - - - - - 21,359
(65)
2004 (Rs '000) 645,824 44,042 - 689,866 55,653 (2,444) - 47,486 100,695 589,171
============================================================================================================================================================================12.1. The company had its lands, buildings and plant and machinery revalued in 1991, 1992, 1995 and 2002 by independent valuers on market basis.These revaluations resulted in net surplus of Rs 21.577 million, Rs 38.478 million, Rs 15.396 million and Rs 376.885 million respectively. Revalued assets having revaluation surplus of Rs 4.607 million have been sold to date. The remaining balance of revaluation surplus amounting to Rs 365.916 million is included in the gross carrying value of the respective assets with corresponding amount appearing as 'Surplus on Revaluation of Property, Plant and Equipment'. 12.2. Land includes 2 Kanals and 3 marlas which was given to Army Housing Colony by the Military Estate Office (MEO) for construction of a housing colony. The court of Civil Judge, Rawalpindi has decreed against MEO for vacating the land. The management is confident that the final outcome of this matter will be in the company's favour. 12.3. As referred to in note 6 of these financial statements, land, buildings and plant and machinery are carried at revalued amount. Had there been no revaluation, related figures of revalued assets would have been as follows: ===========================================================
(Rs '000)
Accumulated Written Down
Cost Depreciation Value
===========================================================
Land 2,743 - 2,743
Buildings 59,260 (35,089) 24,171
Plant and Machinery 461,119 (302,247) 158,872
2005 523,122 (337,336) 185,786
2004 472,286 (301,324) 170,962
===========================================================12.4. DEPRECIATION CHARGE HAS BEEN ALLOCATED AS FOLLOWS=================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Cost of sales 45,507 39,771
Administrative expenses 10,894 7,715
56,401 47,486
=================================================================================12.5. CAPITAL WORK IN PROGRESSThis is made up as follows: =================================================================================
2005 2004
Note (Rupees in '000)
=================================================================================
Bio-gas plant - 15,739
Tubewell - 177
Capping machine - 224
Beer fermentors - 1,229
Pet bottling plant - 3,990
Molasses storage tank 4,434 -
Brine tank 458 -
Fire tube boiler 3,450 -
Labelling machine 452 -
Refractories and machines for
rebuild of glass furnace 38,676 -
Refractories received as compensation 28.1 13,687 -
61,157 21,359
=================================================================================13. LONG TERM INVESTMENTAvailable for sale This represents 75,000 (2004: Nil) ordinary shares of Rs 10 each of Pakistan Strategic Allocation Fund which are non transferable till 14th August 2006. Fair value of these shares at the year end was Rs 0.724 million. Un-realised loss on-re-measurement to fair value of this investment amounting to Rs 0.026 million has been included in the profit and loss account for the year. 14. LONG TERM ADVANCES - CONSIDERED GOOD =================================================================================
2005 2004
(Rupees in '000)
=================================================================================
To employee - Secured 4,364 3,075
Less: Due within one year, shown under current advances (1,994) (1,103)
2,370 1,972
=================================================================================These advances carry interest @11%p.a. and are repayable in periods of up to three years.15. STORES, SPARES AND LOOSE TOOLS =================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Stores 22,215 14,156
Spares 28,280 34,481
Bottles and Shells 364 148
Goods in transit 1,183 1,901
52,042 50,686
=================================================================================16. STOCK IN TRADE=================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Raw material 97,332 73,130
Work in process 19,723 12,119
Stock under maturation 46,778 34,940
Finished goods 10,394 11,910
174,227 132,099
=================================================================================17. TRADE DEBTS=================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Considered good - unsecured 31,548 46,081
Considered doubtful 2,500 2,500
34,048 48,581
Less: provision for doubtful debts (2,500) (2,500)
31,548 46,081
=================================================================================18. ADVANCES - CONSIDERED GOOD=================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Employees including current portion of 4,949 4,492
long term advances - secured
Suppliers - Unsecured 29,738 16,414
Others - Unsecured 81 5,048
34,768 25,954
=================================================================================19. OTHER RECEIVABLES - CONSIDERED GOODS=================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Royalty receivable 123 187
Miscellaneous 7 7
130 194
=================================================================================20. SHORT TERM INVESTMENTSAvailable for Sale =================================================================================================
2005 2004 2005 2004
Carrying Fair Carrying Fair
Value value value Value
Number of Shares/Certificate Name of Companies (Rs '000) (Rs 000)
=================================================================================================
LISTED COMPANIES:
156 156 Baluchistan Glass Limited 2 1 2 2
Ordinary Shares of Rs 5 each
300 300 Habib Arkady Limited 3 2 3 3
Ordinary Shares of Rs 10 each
432 360 Attock Refinery Limited 33 69 35 33
Ordinary Shares of Rs 10 each
10,840 189,440 Pakistan Oilfields Limited 2,912 3,050 44,388 39,877
Ordinary Shares of Rs 10 each
100 100 Shezan International Limited 7 16 7 7
Ordinary Shares of Rs 10 each
342 25,080 Saudi Pak Leasing Company Limited 5 5 176 376
Ordinary Shares of Rs 10 each
1,000 4,000 Shell Pakistan Limited 520 554 1,942 1,406
Ordinary Shares of Rs 10 each
102,500 92,500 Hub Power Company Limited 3,340 2,706 3,411 3,025
Ordinary Shares of Rs 10 each
24,500 19,500 lndus Motor Company Limited 2,312 2,205 2,032 1,775
Ordinary Shares of Rs 10 each
- 13,300 Pakistan State Oil Company Limited - - 3,594 3,419
Ordinary Shares of Rs 10 each
137,000 114,000 Pakistan Telecommnication
Company Limited-A 7,337 9,035 5,002 4,839
Ordinary Shares of Rs 10 each
105,000 70,000 Maple Leaf Cement Limited 3,413 2,002 3,057 2,783
Ordinary Shares of Rs 10 each
4,000 30,000 Engro Chemicals Pakistan Limited 470 461 2,987 2,961
Ordinary Shares of Rs 10 each
22,000 30,000 Oil and Gas Development Company limited 2,932 2,316 2,051 1,992
Ordinary Shares of Rs 10 each
18,241 - Fauji Fertilizer Company Limited 1,890 2,213 - -
Ordinary Shares of Rs 10 each
21,000 - Dewan Salman Fibre Limited 472 354 - -
Ordinary Shares of Rs 10 each
11,550 - Pak Suzuki Motors Limitd 1,515 1,155 - -
Ordinary Shares of Rs 10 each
5,000 - Pakistan Petroleum Limited 655 1,076 - -
Ordinary Shares of Rs 10 each
10,000 - D.G. Khan Cement Factory Limited 526 558 - -
Ordinary Shares of Rs 10 each
500 - Kot Addu Power Company Limited 15 19 - -
Ordinary Shares of Rs 10 each
28,359 27,797 68,687 62,498
BANKS & FINANCIAL INSTITUTIONS:
72,050 55,000 Faysal Bank Limited 2,415 3,876 1,944 2,178
Ordinary shares of Rs 10 each
20,900 19,000 Orix Investment Bank Limited 475 449 495 475
Ordinary shares of Rs 10 each
- 21,500 Atlas Investment Bank (an associated Co) - - 496 602
Ordinary shares of Rs 10 each
13,915 53,000 Muslim Commercial Bank Limited 999 1,042 3,008 2,727
Ordinary shares of Rs 10 each
159,400 43,500 National Bank of Pakistan 12,639 17,207 2,996 2,917
Ordinary shares of Rs 10 each
136,875 109,500 Pakistan Premier Fund 2,102 2,046 1,955 2,102
Ordinary shares of Rs 10 each
161,920 128,000 Al-Meezan Mutual Fund 2,022 1,733 2,003 2,022
Ordinary shares of Rs 10 each
500,000 - Pakistan Capital Market Fund 5,276 5,975 - -
Ordinary shares of Rs 10 each
20,400 - Askari Commercial Bank Limited 1,971 1,591 - -
Ordinary shares of Rs 10 each
31,250 - PICIC Commercial Bank Limited 1,092 1,039 - -
Ordinary shares of Rs 10 each
10,800 - Bank of Punjab 972 905 - -
Ordinary shares of Rs 10 each
500,000 - Pakistan Strategic Allocation Fund 4,250 4,101 - -
Ordinary shares of Rs 10 each
4,000 - Atlas Stock Mutual Fund 2,000 2,000 - -
Ordinary shares of Rs 10 each
36,213 41,964 12,897 13,023
LISTED MODARABAS:
468 14,968 First Grindlays Modaraba
Modaraba Certificates of Rs 10 each 16 11 578 518
344 169,344 First Prudential Modaraba
Modaraba Certificates of Rs 10 each 1 1 415 711
17 12 993 1,229
DE-LISTED COMPANY:
252 252 Prince Glass Works Limited
Ordinary Shares of Rs 5 each - - - -
64,589 69,773 82,577 76,750
Unrealised (loss)/gain on account of
re-measurement to fair value 5,184 - (5,827) -
69,773 69,773 76,750 76,750
=================================================================================================21. CASH AND BANK BALANCES=================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Cash in hand 556 315
CASH AT BANKS:
- in current accounts 95,052 129,067
- in deposit accounts 126,000 -
221,052 129,067
221,608 129,382
=================================================================================22. SALES==========================================================================================================
Liquor Glass Tops Company Company
Division Division Division 2005 2004
Note (Rs '000) (Rs '000) (Rs '000) (Rs '000) (Rs '000)
==========================================================================================================
Sales to customers 728,250 24,546 449,216 1,202,012 960,477
Less: Commission and discount 22.1 (28,380) - (30,902) (59,282) (49,849)
699,870 24,546 418,314 1,142,730 910,628
==========================================================================================================22.1. COMMISSION AND DISCOUNT==========================================================================================================
Liquor Glass Tops Company Company
Division Division Division 2005 2004
Note (Rs '000) (Rs '000) (Rs '000) (Rs '000) (Rs '000)
==========================================================================================================
Commission to an associated
undertaking D.P. Eduiji &
Company (Private) Limited 22.1.1 4,963 - - 4,963 4,150
Discount to others 23,417 - 30,902 54,319 45,699
28,380 - 30,902 59,282 49,849
==========================================================================================================22.1.1.Also refer to note 36. 22.2. Interdivisional sales are at normal selling prices. 22.3. DUTIES AND TAXES ==========================================================================================================
Liquor Glass Tops Company Company
Division Division Division 2005 2004
(Rs '000) (Rs '000) (Rs '000) (Rs '000) (Rs '000)
==========================================================================================================
Sales Tax 124,035 3,202 57,536 184,773 150,635
Excise Duty 130,512 - - 130,512 98,130
254,547 3,202 57,536 315,285 248,765
==========================================================================================================23. COST OF SALES==========================================================================================================
Liquor Glass Tops Company Company
Division Division Division 2005 2004
Note (Rs '000) (Rs '000) (Rs '000) (Rs '000) (Rs '000)
==========================================================================================================
Raw material consumed 23.1 234,029 45,843 277,546 557,418 372,052
Stores and spares consumed 1,839 12,950 81 14,870 10,119
Fuel and power 25,427 55,048 6,082 86,557 65,826
Salaries, wages and other benefits 13,668 12,231 6,084 31,983 28,295
Repairs and maintenance 8,054 9,288 8,177 25,519 23,057
Other manufacturing expenses 1,262 4,658 2,445 8,365 7,197
Depreciation 16,065 22,803 6,639 - 45,507 39,771
300,344 162,821 307,054 770,219 546,317
WORK IN PROCESS:
Opening Stock July 1 45,366 420 1,273 47,059 47,048
Closing Stock June 30 (64,320) (420) (1,762) (66,502) [47,059)
(18,954) - (489) (19,443) (11)
Cost of goods manufactured 281,390 162,821 306,565 750,776 546,306
Add: Opening stock of finished goods July 1 3,536 3,278 5,096 11,910 21,933
Less: Closing stock of finished goods June 30 (4,340) (1,940) (4,114) (10,394) (11,910)
(804) 1,338 982 1,516 10,023
280,586 164,159 307,547 752,292 556,329
Less: Inter divisional transfers (97,262) - (75,087) (172,349) (86,378)
183,324 164,159 232,460 579,943 469,951
==========================================================================================================23.1. RAW MATERIAL CONSUMED==========================================================================================================
Liquor Glass Tops Company Company
Division Division Division 2005 2004
(Rs '000) (Rs '000) (Rs '000) (Rs '000) (Rs '000)
==========================================================================================================
Opening Stock of raw material July 1 38,220 2,920 31,990 73,130 76,669
Purchases 248,538 48,441 284,641 581,620 368,513
286,758 51,361 316,631 654,750 445,182
Less: Closing stock of raw material June 30 (52,729) (5,518) (39,085) (97,332) (73,130)
234,029 45,843 277,546 557,418 372,052
==========================================================================================================24. DISTRIBUTION COST=================================================================================
2005 2004
Notes (Rupees in '000)
=================================================================================
Advertisement and publicity 6,324 3,901
Salaries and wages 25.1.1 & 25.1 7,186 5,720
Selling expenses 9,422 11,990
Samples 355 420
Sales promotion 1,532 1,085
Breakage 80 169
Truck freight 9,829 7,285
Others 1,589 1,225
36,317 31,795
=================================================================================25. ADMINISTRATIVE EXPENSES=================================================================================
2005 2004
Notes (Rupees in '000)
=================================================================================
Directors' fees and travelling 579 524
Salaries, wages and benefits 25.1.1 & 25.1 42,909 36,876
Travelling and conveyance 856 649
Printing and stationery 1,586 1,626
Repairs and maintenance 5,017 3,448
Fuel and power 3,651 2,750
Communication 1,749 1,676
Entertainment 633 628
Advertisement 212 326
Legal and professional 288 1,237
Security expenses 651 487
Subscriptions and periodicals 218 202
Donations 25.1.3 35 2
Training expenses 3 35
Insurance 3,639 3,074
Rent, rates and taxes 432 807
Depreciation 10,894 7,715
Others 1,231 1,169
74,583 63,231
=================================================================================25.1.1. The number of permanent employees of the company at the year end was 261 (2004: 265).25.1.2. Staff retirement benefits amounting to Rs 9.566 million (2004: Rs 5.262 million) have been charged to these accounts. 25.1.3. The directors or their spouses do not have any interest in any donee agency to which donations were made. 26. FINANCE COST =================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Mark-up on bank borrowings-secured - 1,234
Finance charge on leased assets 457 480
Interest on Worker's (Profit) Participation Fund 413 115
Bank Charges 4 -
874 1,829
=================================================================================27. OTHER OPERATING EXPENSES=================================================================================
2005 2004
Note (Rupees in '000)
=================================================================================
Workers' (Profit) Participation Fund 8,158 5,035
Workers' Welfare Fund 3,060 2,385
Auditors' remuneration 27.1 600 550
Internal audit fee 192 150
Bad debts written off 9 342
Stores and stocks written off - 29
12,019 8,491
=================================================================================27.1. AUDITORS' REMUNERATION=================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Annual Audit fee 450 400
Half yearly review 100 100
Other certifications 50 50
600 550
=================================================================================28. OTHER OPERATING INCOME=================================================================================
2005 2004
Notes (Rupees in '000)
=================================================================================
INCOME FROM FINANCIAL ASSETS:
Dividend income 7,103 1,622
Interest on advances 91 178
Unrealised gain/(Loss) on investments 5,158 (5,827)
Return on deposit accounts 2,520 15,179
Gain on sale of investments 11,517 16,381
26,389 27,533
INCOME FROM NON-FINANCIAL ASSETS:
Rental income 1,013 1,705
Royalty income 178 187
(Loss)/profit on disposal of property, (2,994) 889
plant and equipment
Publicity support from supplier 2,769 -
Service charges 2,446 2,294
Income on sale of (B-Grade) barley 1,333 487
Miscellaneous receipts 4,249 1,943
8,994 7,505
Compensation for impaired property,
plant and equipment
Compensation received during the year 28.1 13,687 -
Less: Impairment loss recognised 28.2
Cost of property, plant and equipment 8,643 -
Accumulated depreciation (5,186) -
3,457 -
10,230
45,613 35,038
=================================================================================28.1. This represents free of cost refractories received during the year from M/s Beijing SEPR Refractories Company Limited, China as compensation for substandard refractories.28.2. The company has charged off portion of the carrying amount of substandard refractories to the profit and loss account, since in the management's estimate that the carrying amount of these substandard refractories was more than their recoverable amount at the balance sheet date. 29. TAXATION =================================================================================
2005 2004
Note (Rupees in '000)
=================================================================================
Current 53,000 41,000
Deferred (3,120) (7,558)
29.1 49,880 33,442
=================================================================================29.1. RECONCILIATION OF TAX CHARGE FOR THE YEAR=================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Accounting profit before taxation 169,322 121,604
Tax rate 35% 35%
Tax on accounting profit 59,263 42,561
Tax effect of temporary differences (1,324) 1,753
Tax effect of permanent differences (5,883) (10,385)
Tax effect of lower rate on certain income (2,176) (487)
49,880 33,442
=================================================================================29.2.(a) The company's tax assessments have been finalised up to and including the assessment year 2001-2002 up to the Deputy Commissioner of Income Tax level. While framing assessment for the assessment year 2001-2002, the Income Tax Authorities made certain add backs and taxed income on Government Securities. The company is contesting these assessments and has preferred appeals before the Commissioner of Income Tax (Appeals). (b) The company has filed reference in the High Court through Income Tax Appellate Tribunal, Islamabad for the assessment year 1996-97. The amount of revenue involved is Rs 0.5 million, which has been provided for. The management is confident of favourable outcome of the above tax matters. 30. EARNINGS PER SHARE There is no dilutive effect on the basic earnings per share of the company, which is based on: =================================================================================
2005 2004
=================================================================================
Net profit for the year (Rs '000) 119,442 88,162
Weighted average number of shares 8,962,006 8,962,006
Earnings per share-Basic (Rupees) 13.33 9.84
=================================================================================For the purpose of computing earnings per shares, the number of share for the previous year have been adjusted for the effect of bonus shares issued during the year.31. CASH AND CASH EQUIVALENTS These are made up as follows: =================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Cash in hand 556 315
Bank balances 221,052 129,067
221,608 129,382
=================================================================================32. DETAIL OF PROPERTY, PLANT AND EQUIPMENT DISPOSED OFF==============================================================================================
Original cost Book Sale Particulars of Purchasers
Description or reassessed Value Proceeds
value
(Rs '000) (Rs '000) (Rs '000)
==============================================================================================
PLANT AND MACHINERY
INSURANCE CLAIM:
PU Monitor 446 110 720 IGI Insurance Company
of Pakistan Ltd.
BY NEGOTIATION:
Ammonia compressor 36 ton 905 321 124 Mr M. Khan, Rawalpindi
Firdous ammonia compressor 3,387 2,710 85 Mr M. Khan, Rawalpindi
Squash cooling tunnel 414 180 32 Mr M. Khan, Rawalpindi
R-Juice filling machine 583 136 24 Mr M. Khan, Rawalpindi
R-Juice crowning machine 583 136 24 Mr M. Khan, Rawalpindi
Motor pumps and gear boxes 1,501 413 74 Mr M. Khan, Rawalpindi
7,819 4,006 1,083
VEHICLES:
By company policy to employees
Toyota Corolla - RPT 34 530 254 254 Mrs Huma Zuabir- Employee
Suzuki Margalla - IDH 8086 485 186 186 Mr Amir Fahim - Ex-Employee
1,015 440 440
Aggregate value of other items
of property, plant and equipment
with individual book
value not exceeding Rs 50,000 1,641 341 270
10,475 4,787 1,793
==============================================================================================33. ADDITIONAL INFORMATION ON DIVISIONSThe detail of utilisation of related liabilities is as follows: ======================================================================================
LIQUOR GLASS TOPS UNAL- COMPANY
DIVISION DIVISION DIVISION LOCATED
(Rs '000) (Rs '000) (Rs '000) (Rs '000) (Rs '000)
======================================================================================
Assets 2005 813,844 173,000 175,485 75,116 1,237,445
2004 697,586 143,817 140,916 108,422 1,090,741
Liabilities 2005 138,059 10,966 44,758 108,115 301,898
2004 102,059 12,478 37,429 97,576 249,542
Capital expenditures 2005 44,321 42,601 11,008 - 97,930
2004 20,973 1,955 24,759 - 47,687
Depreciation 2005 20,774 22,977 12,650 - 56,401
2004 14,894 22,075 10,517 - 47,486
======================================================================================34. REMUNERATION OF CHIEF EXECUTIVE AND DIRECTORSThe aggregate amounts charged in the year for remuneration, including benefits and perquisites, were as follows: ===========================================================================
2005 2004
(Rs '000) (Rs '000)
CHIEF DIRECTORS CHIEF DIRECTORS
EXECUTIVE EXECUTIVE
===========================================================================
Fees - 39 - 4
Managerial remuneration 320 676 543 813
Reimbursable expenses 112 229 96 423
Provident Fund - 6 - 36
OTHER PERQUISITES AND BENEFITS:
(i) Bonus - 86 248 331
(ii) Travelling Expenses 366 174 195 325
(iii) Gratuity - 187 - 100
(iv) Leave Salary - 78 41 79
(v) Pension paid 223 173 - -
1,021 1,648 1,123 2,111
Numbers 1 6 1 6
===========================================================================In addition, free furnished accommodation is provided to the Chief Executive and one Director and semi-furnished accommodation to one Director Company maintained cars are provided to the Chief Executive and one Director of the company.35. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES 35.1. INTEREST RATE RISK EXPOSURE Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The information about the company's exposure to interest rate risk based on contractual refinancing or maturity dates whichever is earlier is as follows: =======================================================================================
2005 (Rs'000)
Less than Over one Non-interest Total Effective
one year year bearing Interest
rate (%)
=======================================================================================
FINANCIAL ASSETS:
Long term investment - - 724 724 11
Long term advances - 2,370 - 2,370
Long term deposits - - 2,404 2,404
Trade debts - - 31,548 31,548
Advances 1,994 - 1,989 3,983 11
Interest accrued 1,108 - - 1,108
Other receivables - - 130 130
Short term investments - - 69,773 69,773
Cash and Bank 126,000 - 95,608 221,608 8.25-8.50
129,102 2,370 202,176 333,648
FINANCIAL LIABILITIES:
Liabilities against assets
subject to finance lease 2,965 2,825 - 5,790 8-8.33
Trade and other payables 10,017 - 88,529 98,546 26.25
12,982 2,825 88,529 104,336
Excess of financial assets over
financial liabilities 116,120 (455) 113,647 229,312
=======================================================================================
=======================================================================================
2004 (Rs '000)
Less than Over one Non-interest Total Effective
Financial assets one year year bearing Interest
rate (%)
=======================================================================================
Long term advances - 1,972 - 1,972 11
Long term deposits - - 2,190 2,190
Trade debts - - 46,081 46,081
Advances 1,103 - 8,437 9,540 11
Other receivables - - 194 194
Short term investments - - 76,750 76,750
Cash and Bank - - 129,382 129,382
1,103 1,972 263,034 266,109
FINANCIAL LIABILITIES:
Liabilities against assets
subject to finance lease 2,710 3,372 - 6,082 8-18
Trade and other payables 5,082 - 84,749 89,831 15
7,792 3,372 84,749 95,913
Excess of financial assets over
financial liabilities (6,689) (1,400) 178,285 170,196
=======================================================================================35.2. FOREIGN EXCHANGE RISKThis exists due to the company's exposure resulting from outstanding import payments and royalty income. The company is not materially exposed to foreign exchange risk. 35.3. FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair value of financial instruments is not significantly different from their book values shown in these financial statements. 35.4. CREDIT RISK MANAGEMENT Credit risk represents the accounting loss that would be recognised at the reporting date if counter parties failed to perform as contracted. The company believes that it is not exposed to major concentration of credit risk. The company controls its credit risk by the following methods: -- Ascertainment of credit worthiness of customers. -- Monitoring of debt on a continuous basis. -- Legal notices and follow-up. 35.5. LIQUIDITY RISK Liquidity risk is the risk that the company will encounter difficulty in raising funds to meet its commitments associated with financial instruments. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value. In the opinion of the management, the company is not exposed to liquidity risk. 35.6. CASH FLOW RISK Cash flow risk is the risk that future cash flows associated with a monetary financial instrument will fluctuate in amount. In the opinion of the management, the company is not exposed to cash flow risk. 36. TRANSACTIONS WITH RELATED PARTIES Related parties comprise of entities over which the directors are able to exercise significant influence, entities with common directors, major shareholders, subsidiary undertakings, staff retirement fund, directors and key management personnel. Balances with related parties are shown elsewhere in the accounts. Transactions with related parties other than remuneration and benefits to key management personnel under the terms of their employment are as follows: =================================================================================
2005 2004
(Rupees in '000)
=================================================================================
Goods and services purchased 525 475
Commission charged 4,963 4,150
Purchase of listed securities 43,715 85,337
Sale of listed securities 74,542 45,135
Purchase of raw materials and packing materials 38,945 35,343
Shares held by an associated company 851,337 681,070
Dis investment/investment in associated company 717 496
Contribution to staff provident fund 2,438 2,400
Lease instalments paid 1,066 911
=================================================================================The following are associated undertakings of the company:-- D.P. Edulji & Company (Pvt.) Limited - Common Directorship -- Murree Breweries (U.K) Limited - Common Directorship -- Akbarally Cassim & Sons - Common Directorship -- Packages Limited - Common Directorship -- ICI Pakistan Limited - Common Directorship -- Atlas Investment Bank Limited - Common Directorship The company continues to have a policy whereby all transactions with related parties are entered into at arm's length determined in accordance with "Comparable Uncontrolled Price Method". 37. CAPACITY AND PRODUCTION =================================================================================
2005 2004
=================================================================================
1 Liquor Division
a) Capacity of Industrial Unit
Beer and Malt 79 Liters 5,450,000 5,450,000
P.M.F.L. (1 shift) Cases (2 B.G) 450,000 450,000
Alcohol (96 GL) Liters 2,000,000 2,000,000
b) Actual Production
Beer Liters 3,396,626 2,214,589
P.M.F.L. Cases (2 B.G) 397,312 331,542
Alcohol Liters 1,667,534 1,585,722
Malt 79 Liters 891,173 568,543
Cindy Liters 558,800 358,549
Lemonades Liters 1,575,268 650,271
2 Tops Division
i) Rawalpindi
a) Capacity
Juice (TP) 12,000 Packs per hr
Malt Extract 700 Kg per 8 hr
b) Actual Production
Juice (TP) Packs 44,920,494 36,331,281
Malt Extract Kgs 52,267 35,331
c) Hattar
a) Capacity
Food products 1,250 dozens per8 hours shift.
Juice 2,500 crates per 8 hours shift
(non - returnable)
Juice (Ret) 1500 Crates per 8 hours
b) Actual Production
Food products Dozens 115,551 92,446
Juice(NR) Dozens 842,283 522,556
Juice (Other) Dozens 18,486 28,196
Juices (Ret) Crates 455 4,293
3 Glass Division - Hattar
a) Melting Capacity 80 Tons
Nominal glass per day M.Tons 11,167 8,455
=================================================================================38. GENERAL38.1. Figures have been rounded to the nearest thousand of Rupees, unless otherwise stated. 38.2. UNDRAWN FACILITIES The company has unavailed running finance facilities amounting to Rs 10 million and Rs 35 million from Askari Commercial Bank Limited, Rawalpindi and Bank Alfalah Limited, Rawalpindi, respectively. These facilities carry mark up at the rate of KIBOR plus 0.5% per annum. Askari Commercial Bank Limited, Rawalpindi. (i) 1st hypothecation charge ranking pari passu over stocks and spares of company amounting to Rs 35 million. (ii) 2nd hypothecation charge over stocks and spares of the company amounting to Rs 20 million duly registered with RJSC. (iii) 1st charge by way of equitable mortgage amounting to Rs 36 million over three bungalows owned by the company. (iv) 1st charge by way of equitable mortgage amounting to Rs 25 million over land and building of Glass Division. Bank Alfalah Limited, Rawalpindi. (i) 1st hypothecation charge on current assets of the company amounting to Rs 60 million. 38.3. PROPOSED DIVIDEND 38.3.1. Dividend payable to Muslim shareholders is deemed to be appropriated from income arising from company's investments. 38.3.2. The Board of Directors of the company in the meeting held on 05 October 2005 proposed final cash dividend of Rs 5 per share and stock dividend @ 10% i.e. 1 bonus share for every 10 shares held. The final dividend shall be recorded in the financial statements for the next financial year as required by International Accounting Standard 10: "Events after the Balance Sheet Date." 38.4. Due to revision of the 4th Schedule to the Companies Ordinance, 1984 by the Securities and Exchange Commission of Pakistan vide SRO 589(1)/2004 date July 5, 2004, previous year's figures have been rearranged and restated, wherever necessary, for the purpose of comparison. |