| AKD Capital Ltd - 2005 |
=============================================================================== BALANCE SHEET AS AT JUNE 30, 2005 =============================================================================== 2005 2004 NOTES RUPEES RUPEES =============================================================================== ASSETS Fixed Assets Property plant and equipment 4 1,636,123 363,345 Capital work in progress 5 2,210,000 - 3,846,123 363,345 Current assets Loans and advances - Considered good 18,000 - Trade deposits 6 115,000,000 - Investments 7 46,216 7,358,400 Advance income tax 182,667 117,181 Cash and bank balances 8 32,091,896 1,598,028 147,338,779 9,073,609 Total assets 151,184,902 9,436,954 Current liabilities Trade and other payables 9 781,432 363,375 Short term borrowings 10 100,000,000 - Provision for taxation 78,752 71,024 100,860,184 434,399 Contingencies and Commitment 11 - - Net assets 50,324,718 9,002,555 Represented by: Share capital 12 25,072,733 2,788,363 Share premium 20,891,600 - General reserve 752,000 752,000 Unappropriated Profit 3,608,385 5,462,192 50,324,718 9,002,555 =============================================================================== =============================================================================== PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2005 =============================================================================== 2005 2004 NOTES RUPEES RUPEES =============================================================================== Fee income 120,000 240,000 Dividend income 141,859 7,196 Interest on TFC's 350 1,298 Capital gain on investment 2,883,039 4,360,385 3,145,248 4,608,879 Administrative expenses 13 3,636,998 504,508 Operating (loss)/ profit (491,750) 4,104,371 Gain / (loss) on remeasurement of investment to fair value 38,441 (270,706) Net (loss) / profit before taxation (453,309) 3,833,665 Provision for taxation - Current 14 (7,728) (71,024) Net (loss) / profit after taxation (461,037) 3,762,641 Earnings per share basic and diluted 15 (0.23) 1.97 =============================================================================== ===============================================================================
CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2005
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2005 2004
RUPEES RUPEES
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A. CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) / profit before taxation (453,309) 3,833,665
Adjustments for
Dividend (141,859) (7,196)
Interest on TFC's (350) (1,298)
Depreciation 144,930 65,909
2,721 57,415
Operating cash flow before working
capital changes (450,588) 3,891,080
Changes in working capital:
(Increase)/decrease in current assets
Loans and advances (18,000) -
Trade deposit (115,000,000) -
Increase/(decrease) in current liabilities
Trade and other payables 418,057 -
(114,599,943) -
Cash flow from operations (115,050,531) 3,891,080
Income tax paid (65,486) (163,057)
Net cash flow from operating activities (115,116,017) 3,728,023
B. CASH FLOW FROM INVESTING ACTIVITIES
Fixed assets acquisition (3,627,708) -
Purchase of investment - (7,340,052)
Sale proceed from investment 7,312,184 -
Dividend received 141,859 7,196
Interest received 350 1,298
Net cash flow from investing activities 3,826,685 (7,331,558)
C. CASH FLOW FROM FINANCING ACTIVITIES
Issue of shares 20,891,600 -
Premium received on issue of shares 20,891,600 -
Short Term borrowing 100,000,000 -
Net cash flow from financing activities 141,783,200 -
Net increase/(decrease) in cash and cash
equivalents30,493,868(3,603,535)
Cash and bank balances at the beginning
of the year 1,598,028 5,201,563
Cash and bank balances at the end of the year 32,091,896 1,598,028
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STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2005
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Capital Reserves Revenue Reserve
Share Share Bonus General Unappropriated Total
Capital Premium Shares Reserve Profit
Rupees
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Balance as at July 01, 2003 2,788,363 - - - 2,451,551 5,239,914
Profit for the year - - - - 3,762,641 3,762,641
Transfer to general reserve - - - 752,000 (752,000) -
Transfer from profit and loss account - - 1,392,770 - (1,392,770) -
Balance at June 30, 2004 as previously
reported 2,788,363 - 1,392,770 752,000 4,069,422 9,002,555
Effect of change in accounting policy
for issuance of bonus share (Refer 3.12) - - (1,392,770) - 1,392,770
Balance at June 30, 2004 (Restated)2,788,363 - - 752,000 5,462,192 9,002,555
Bonus shares issued for the year
ended June 30, 2004 1,392,770 - - - (1,392,770) -
Issue of right shares @ 500% at premium
of Rs. 10 per share 20,891,600 - - - - 20,891,600
Share premium received
@ Rs. 10 per share -20,891,600 - - - 20,891,600
Loss for the year - - - - (461,037) (461,037)
Balance as at June 30, 2005 25,072,73320,891,600 - 752,000 3,608,385 50,324,718
=============================================================================================NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 20051. THE COMPANY AND ITS BUSINESS 1.1. The Company was incorporated as a Public Limited Company in the year 1936 and its shares are quoted on the Karachi Stock Exchange. The registered office of the company is situated at Karachi. The principal activity of the Company is to deal in shares and securities and also engage in leasing / hiring of safe. 1.2. Subsequent to year end Securities and Exchange Commission of Pakistan vide their order No. K-12/COM/2005-2978 dated August 30, 2005 has confirmed Special resolution passed by the members in extraordinary general meeting held on May 31, 2005, where the name of the company is changed to AKD Capital Limited, the authorized capital is increased to Rs. 500 million from Rs. 100 million and the object of the company is enhanced to carry on business of builders, contractors, dealers in and manufacturers of residential and commercial buildings, houses, apartments, townships and markets. 2. STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of 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 differ with the requirements of these standards, the requirements of Companies Ordinance, 1984 or the requirements of the said directives take precedence. During the year, the Securities and Exchange Commission of Pakistan substituted the Fourth Schedule to the Companies Ordinance which is effective from financial year ending on or after July 5, 2004. This has resulted in the change in accounting policy pertaining to recognition of dividends declared and issuance of bonus shares and appropriation of profit subsequent to the year end (note 3.12). 3. SIGNIFICANT ACCOUNTING POLICIES 3.1. ACCOUNTING CONVENTION These financial statements have been prepared under the "historical cost convention", except for measurement of held for trading investment at fair value. 3.2. INVESTMENT (HELD FOR TRADING) These are securities, which are either acquired for generating a profit from short-term fluctuations in market prices, interest rate movements, dealers' margin or are securities included in a portfolio in which a pattern of short-term profit making exists. All purchases and sales of investments that require delivery within the time frame established by regulations or market conventions are recognized at the trade date. Trade date is the date that the Company commits to purchase or sell the assets. Gains and losses arising from remeasurement of held for trading investments to fair value are included in the profit and loss account in the period in which they arise. 3.3. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost less accumulated depreciation and impairment in value, if any. Depreciation is charged to income applying the reducing balance method. Full quarter's depreciation is charged on additions during the quarter while no depreciation is charged on assets during the quarter in which assets disposed off. Maintenance and repairs are charged to income as and when incurred. Major renewals and improvements are capitalised and the assets so replaced, if any, are retired. Gains or losses on disposal of assets, if any, are recognised as and when incurred. 3.4. CAPITAL WORK IN PROGRESS Capital work in progress is stated at cost. All expenditure connected with specific owned assets incurred during the development of such assets are carried under capital work-in progress. These are transferred to specific assets as and when these assets are available for use. 3.5. IMPAIRMENT The carrying amounts of the assets are reviewed at each balance sheet date to determine whether there is any indication of impairment of any asset or a group of assets. If any such indication exists, the recoverable amount of that asset is estimated and impairment losses are recognised in the profit and loss account. 3.6. TRADE AND OTHER PAYABLES Liabilities for trade and other amounts payable are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received whether billed to the Company or not. 3.7. PROVISIONS Provisions are recognized when the company has a legal or constructive obligation as a result of past events and it is probable that an outflow of resources will be acquired settle the obligation and a reliable estimate of the amount can be made. 3.8. TAXATION CURRENT The charge for current taxation is based on taxable income at current rates of taxation after taking into consideration available tax credits, rebates and tax losses, if any, at the rate of 0.5 percent of turnover, whichever is higher. DEFERRED Deferred tax is recognised using the balance sheet liability method on all significant temporary differences between the amounts attributed to assets and liabilities for financial reporting purposes and amounts used for taxation purposes. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reduced to extent that it is no longer probable that the related tax benefit can be realized. 3.9. REVENUE RECOGNITION Capital gain or losses on sale of investments are taken to income in the period in which they arise. Dividend income is recognised when the right to receive the same is establised. Fee income are recognised as and when services are provided. 3.10. RELATED PARTY TRANSACTIONS All transactions between the Company and related parties are recorded at arm length prices determined in accordance with comparable uncontrolled price method. 3.11. FINANCIAL INSTRUMENTS Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument and de-recognised when the Company loses control of the contractual rights that comprise the financial asset and in case of financial liability when the obligation specified in the contract is discharged, cancelled or expired. A financial asset and a financial liability is offset and the net amount reported in the balance sheet, if the Company has a legal enforceable right to set off the transaction and also intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. 3.12. DIVIDEND AND ISSUANCE OF BONUS SHARES The proposed dividend and issuance of bonus shares are being shown as a liability in the period in which they are declared. Previously, proposed dividend and issuance of bonus shares that we declared after the balance sheet date but before the financial statements were authorised for issue, reported as a liability / reserve, the change is made to conform with the revised Fourth Schedule to the Companies Ordinance, 1984. The changed accounting policy has been accounted for retrospectively in accordance with benchmark treatment of International Accounting Standard "Net profit or loss for the period, Fundamental errors and Changes in accounting policy (IAS-8)". Had there been no change in the accounting policy the reserve for issue of bonus shares and unappropriated profit for the period ended June 30, 2005 would have been lower and higher respectively by Rs. 1,392,770 (2004: Rs. 1,392,770). 4. PROPERTY PLANT AND EQUIPMENT =======================================================================================================================
Particulars Cost at Additions Cost Accumulated Depreciation AccumulatedWritten down Dep.
July 01, June 30,Depreciation Depreciation value at Rate %
2004 2005 at July 01 at June 30, June 30,
2004 2005 2005
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urnitureand fixtures 276,350 - 276,350 161,390 11,496 172,886 103,464 10
Office Equipment 413,500 703,825 1,117,325 243,387 35,507 278,894 838,431 10
Computers 296,663 677,383 974,046 230,983 94,843 325,826 648,220 33.33
Vehicles - 36,500 36,500 - 1,825 1,825 34,675 20
Lockers 32,500 - 32,500 19,908 1,259 21,167 11,333 10
Rupees 1,019,0131,417,708 2,436,721 655,668 144,930 800,598 1,636,123
Total Rs. 2004 1,019,013 - 1,019,013 589,759 65,909 655,668 363,345
=======================================================================================================================5. CAPITAL WORK IN PROGRESS===============================================================================
2005 2004
RUPEES RUPEES
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Advance for furniture and fixture 1,980,000 -
Advance for software purchase 230,000 -
2,210,000 -
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