| Blessed Textile Mills Ltd - 2002 |
=============================================================================== BALANCE SHEET AS AT SEPTEMBER 30, 2002 =============================================================================== NOTE 2002 2001 RUPEES RUPEES =============================================================================== CAPITAL AND LIABILITIES CAPITAL AND RESERVES Authorized share capital 3 65,000,000 65,000,000 Issued, subscribed and paid-up share capital 4 64,320,000 64,320,000 REVENUE RESERVES General reserve 5 211,200,000 173,700,000 Un-appropriated profit 22,511 45,723 275,542,511 238,065,723 LONG TERM LIABILITIES Excise and custom duty payable 6 12,487,526 12,487,526 OBLIGATION UNDER FINANCE LEASE 7 1,209,708 6,460,086 DEFERRED LIABILITIES Gratuity 8 12,352,975 9,314,710 CURRENT LIABILITIES Bank finance under mark-up arrangements 9 - 23,500,000 Current maturity of obligation under finance lease 6,997,261 7,564,919 Creditors, accrued and other liabilities 10 43,782,361 40,568,970 Provision for taxation 18,168,841 17,704,393 Proposed dividend 12,864,000 17,688,000 81,812,463 107,026,282 CONTINGENCIES AND COMMITMENTS 11 - - 383,405,183 373,354,327 PROPERTY AND ASSETS TANGIBLE ASSETS Operating fixed assets 12 182,032,118 195,241,759 Capital work in progress 13 53,498,110 2,010,054 235,530,228 197,251,813 LONG TERM LOAN 14 3,064,413 2,387,500 LONG TERM DEPOSITS 15 4,311,853 6,464,953 CURRENT ASSETS Stores, spares and loose tools 16 4,523,350 3,879,307 Stock in trade 17 61,151,055 57,626,607 Trade debtors 18 17,322,207 23,545,751 Loans and advances 19 44,272,717 66,079,761 Deposits, prepayments and other receivables 20 3,600,412 4,007,696 Cash and bank balances 21 9,628,948 12,110,939 140,498,689 167,250,061 383,405,183 373,354,327 =============================================================================== =============================================================================== PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED SEPTEMBER 30, 2002 =============================================================================== NOTE 2002 2001 RUPEES RUPEES =============================================================================== Sales (net) 22 682,758,144 751,406,183 Cost of sales 23 552,295,777 625,136,050 Gross profit 130,462,367 126,270,133 OPERATING EXPENSES Administrative 24 22,468,416 15,801,479 Selling and distribution 25 30,876,143 26,326,662 53,344,559 42,128,141 Operating profit 77,117,808 84,141,992 Other income 26 60,429 2,961 77,178,237 84,144,953 OTHER CHARGES Workers' profit participation fund 10.1 3,002,194 2,465,436 Financial charges 27 17,134,357 34,836,227 20,136,551 37,301,663 Profit before taxation 57,041,686 46,843,290 Taxation: 28 Current year 8,646,547 9,522,294 Prior Year (1,945,649) (2,588,478) 6,700,898 6,933,816 Profit after taxation 50,340,788 39,909,474 Un-appropriated profit brought forward 45,723 24,249 Available for appropriation 50,386,511 39,933,723 Appropriations Proposed dividend @20% (Rs: 2.00 per share) (2001: @ 2 12,864,000 17,688,000 Transferred to general reserve 37,500,000 22,200,000 50,364,000 39,888,000 Un-appropriated profit carried forward 22,511 45,723 Earning per share 29 7.83 6.2 =============================================================================== ===============================================================================
CASH FLOW STATEMENT FOR THE YEAR ENDED SPETEMBER 30, 2002
===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation 57,041,686 46,843,290
Add: Adjustments to reconcile profit to net
cash provided by operating activities
Depreciation 20,032,410 21,523,626
Transitional loss/(gain) 890,334 (72,537)
Provision for gratuity 2,878,511 2,555,893
Financial charges 17,134,357 34,836,227
Provision for bad debts 2,318,286 -
(Gain) on disposal of fixed assets (57,070) -
43,196,828 58,843,209
Operating profit before working
capital changes 100,238,514 105,686,499
(Increase)/decrease in current assets
Stocks, stores and spares (4,168,491) 11,563,713
Trade debts 3,905,258 109,099,872
Loan and advances 24,777,646 (7,568,230)
Deposits, prepayments and other receivables 407,284 1,250,953
24,921,697 114,346,308
Increase/(decrease) in current liabilities
Bank finance under mark-up arrangements (23,500,000) (92,787,764)
Creditors, accrued and other liabilities 4,529,756 (9,436,894)
Workers' profit participation fund 89,753 734,567
(18,880,491) (101,490,091)
Cash generated from operations 106,279,720 118,542,716
Payment for:
Taxes (9,207,052) (11,262,528)
Gratuity (730,580) (649,976)
Financial charges 18,614,052 35,971,549
(28,551,684) (47,884,053)
NET CASH INFLOW FROM OPERATING ACTIVITIES 77,728,036 70,658,663
Balance brought forward 77,728,036 70,658,663
B. CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from disposal of fixed assets 100,000 238,080
Fixed Capital expenditure (58,353,755) (15,775,642)
(Increase)/Decrease in long term loans (676,913) 50,748
Decrease/(Increase) in long term deposit 2,153,100 -559,810
Net cash (outflow) from investing activities (56,777,568) (16,046,624)
C. CASH FLOW FROM FINANCING ACTIVITIES
Proceed from obligation under finance lease 1,970,000 3,560,000
Repayment of obligation under finance lease (7,788,036) (6,421,970)
Dividend paid (17,614,423) (46,483,541)
Net cash (outflow) from financing activities (23,432,459) (49,345,511)
Net (decrease)/Increase in cash and cash equivalents -2,481,991 -5,266,528
Cash and cash equivalents at
Beginning of the year 12,110,939 6,844,411
Cash and cash equivalents at end of the year 9,628,948 12,110,939
===============================================================================NOTES TO THE ACCOUNTS FOR THE YEAR ENDED SEPTEMBER 30, 20023. AUTHORIZED SHARE CAPITAL ===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
6,500,000 (2001: 6,500,000)
ordinary shares of Rs. 10/- each 65,000,000 65,000,000
===============================================================================4. ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
6,432,000 (2001: 6,432,000)
ordinary shares of Rs. 10/- each
fully paid in cash 64,320,000 64,320,000
===============================================================================5. REVENUE RESERVES===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
General reserves 173,700,000 151,500,000
Add: Transferred from profit and loss account 37,500,000 22,200,000
211,200,000 173,700,000
===============================================================================6. EXCISE AND CUSTOM DUTY PAYABLE===============================================================================
Note 2002 2001
RUPEES RUPEES
===============================================================================
Excise duty payable 6.1 4,180,072 4,180,072
Custom duty payable 6.2 8,307,454 8,307,454
12,487,526 12,487,526
===============================================================================6.1. This represents central excise duty payable on bank loans.The matter has been decided in Sindh High Court in favour of the company. However, provision continues as the Federation of Pakistan has filed an appeal before the Supreme Court of Pakistan against the said orders of the Sindh High Court. 6.2. This represents disputed amounts with custom authorities against import of machinery. The matter is subjudice. 7. OBLIGATIONS UNDER FINANCE LEASE ===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
The future outstanding payments and the periods
in which they will become due are:
Year to September 30,
2003 7,378,923 8,957,808
2004 713,976 6,710,692
2005 613,486 -
8,706,385 15,668,500
Less: financial charges not yet due 499,416 1,643,495
8,206,969 14,025,005
Present value of total minimum lease payments payable
with-in one year 6,997,261 7,564,919
Present value of total minimum lease payments payable
later than one year and not later than five years 1,209,708 6,460,086
===============================================================================The company has entered into lease agreements with leasing companies for lease of plant and machinery and vehicles on monthly rental basis.It is repayable over a period of 36 months commencing on different dates. The lease agreements contain purchase bargain option. Implicit rate of return ranges between 13.50% to 19.00%. Taxes, repairs and maintenance, insurance and other costs relating to the leased assets are borne by the company. There are no financial restrictions. 8. GRATUITY ===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
Opening net liability 9,314,710 7,481,330
Actuarial loss/(gain) 890,334 -72,537
10,205,044 7,408,793
Add:
Current service cost 1,931,065 1,744,835
Interest cost 947,446 811,058
2,878,511 2,555,893
13,083,555 9,964,686
Less: Payment during the year 730,580 649,976
Closing net liability 12,352,975 9,314,710
===============================================================================9. BANK FINANCE UNDER MARK-UP===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
ARRANGEMENTS - SECURED - 23,500,000
===============================================================================9.1. Aggregate financing facilities available from various banks amount to Rs 945 million. (2001: Rs. 750 million), at mark-up rates ranging between 7.25% to 14 % per annum.These facilities are expiring on different dates and renewable at the end of the year. 9.2. The arrangements are secured by pari-passu hypothecation charge, pledge of stocks, lien on export bills under collection and by way of personal guarantees of sponsoring directors of the company. 10. CREDITORS, ACCRUED AND OTHER LIABILITIES ===============================================================================
Note 2002 2001
RUPEES RUPEES
===============================================================================
Trade creditors 16,352,833 10,937,937
Accrued expenses 17,497,923 16,729,127
Mark-up on bank finance - short term 1,018,317 2,438,469
Lease finance charges 45,743 105,286
Workers' profit participation fund 10.1 7,281,714 7,191,961
Sales tax payable - 1,740,851
Unclaimed dividend 1,278,860 1,205,283
Other liabilities 306,971 220,056
43,782,361 40,568,970
===============================================================================10.1. WORKERS' PROFIT PARTICIPATION FUND===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
Opening balance 7,191,961 6,457,394
Interest on fund 651,743 1,028,170
7,843,704 7,485,564
Contribution for the year 3,002,194 2,465,436
10,845,898 9,951,000
Less: Payment during the year 3,564,184 2,759,039
7,281,714 7,191,961
===============================================================================11. CONTINGENCIES AND COMMITMENTS:11.1. CONTINGENT LIABILITIES The company has issued indemnity bonds amounting to Rs 2.393 million (2001: Rs. 2.13 million) in favour of Collector of Custom in lieu of custom levies against various statutory notifications. The indemnity bonds furnished by the company are likely to be released after fulfilment of the terms of related S.R.O's. 11.2. CAPITAL COMMITMENTS Capital commitments under irrevocable letters of credit were Rs 413.991 million (2001 Rs 1.970). Commitments for construction work in progress are Rs. 72.895 million (2001 Rs: Nil) 12. OPERATING FIXED ASSETS - TANGIBLE: =======================================================================================================================================
COST DEPRECIATION W.D.V.
Categories As at Additions Adjustments/ As at RATE As at For the Adjustment As at AS ON
1/10/2001 Disposal 30-09-02 % 1/10/2001 Year 30-09-02 30-09-02
=======================================================================================================================================
Own Assets
Land
Free hold 3,657,849 - - 3,657,849 - - - - - 3,657,849
Building on freehold land
Factory 63,131,380 - - 63,131,380 10 33,616,806 2,951,457 - 36,568,263 26,563,117
Non factory 14,683,335 2,317,033 - 17,000,368 5 5,755,209 562,258 - 6,317,467 10,682,901
Plant and machinery 313,972,954 2,012,927 (1,970,000) 314,015,881 10 186,103,602 12,810,928 -197,000 198,717,530 115,298,35
Factory equipment 2,259,081 - - 2,259,081 10 1,435,147 82,393 - 1,517,540 741,541
Office equipments 725,679 180,000 - 905,679 10 383,084 52,260 - 435,344 470,335
Furniture and fixture 2,117,189 235,000 - 2,352,189 10 952,028 140,016 - 1,092,044 1,260,145
Vehicles 7,886,485 2,120,739 (399,815) 9,607,409 20 3,832,927 1,226,273 (356,885) 4,702,315 4,905,094
Total - A 408,433,982 6,865,699 (2,369,815) 412,929,836 232,078,803 17,825,585 (553,885) 249,350,503 163,579,33
Leased Assets
Plant and machinery 19,759,668 - 1,970,000 21,729,668 10 3,577,967 1,795,470 197,000 5,570,437 16,159,231
Factory equipment 1,600,332 - - 1,600,332 10 304,063 129,627 - 433,690 1,166,642
Vehicle 2,201,000 - - 2,201,000 20 792,360 281,728 - 1,074,088 1,126,912
Total-B 23,561,000 - 1,970,000 25,531,000 4,674,390 2,206,825 197,000 7,078,215 18,452,785
TOTAL RUPEES 2002 431,994,952 6,865,699 (399,815) 438,460,836 236,753,193 20,032,410 (356,885) 256,428,718 182,032,11
TOTAL RUPEES 2001 417,674,943 14,785,009 (465,000) 431,994,952 215,456,487 21,523,626 (226,920) 236,753,193 195,241,75
=======================================================================================================================================12.1. DEPRECIATION HAS BEEN ALLOCATED AS UNDER:===============================================================================
Note 2002 2001
RUPEES RUPEES
===============================================================================
Cost of sales 23 18,332,133 19,990,549
Administrative 24 1,700,277 1,533,077
20,032,410 21,523,626
===============================================================================12.2. DETAIL OF DISPOSAL OF FIXED ASSETS================================================================================================
Description Cost Accumulate Book Sales Gain Mode of Sold
Depreciation Value Proceeds Disposal To
================================================================================================
Vehicle
S-7192 399,815 356,885 42,930 100,000 57,070 Negotiation Mr. Mohammed Mehboob
Qila Gujar Singh
Total Rupees 399,815 356,885 42,930 100,000 57,070 Lahore.
================================================================================================13. CAPITAL WORK IN PROGRESS===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
Building and other civil work 23,456,388 44,225
Plant and machinery 6,010,650 1,965,829
Advance to contractors 22,402,667 -
Unallocated expenses 1,628,405 -
53,498,110 2,010,054
===============================================================================14. LONG TERM LOANS===============================================================================
Note 2002 2001
RUPEES RUPEES
===============================================================================
Unsecured-considered good
Due from executives 14.1 2,603,600 1,998,848
Due from employees 14.1 1,596,833 1,215,295
4,200,433 3,214,143
Less: receivable within one year 19 1,136,020 826,643
3,064,413 2,387,500
===============================================================================14.1. The amount represents interest free loans given to the executives and employees as per the terms of employment and repayable over 2 to 6 years.Aggregate balance includes Rs.1,650,000 (2001: Rs. 1,598,000) outstanding for period exceeding 3 years. 15. LONG TERM DEPOSIT ===============================================================================
Note 2002 2001
RUPEES RUPEES
===============================================================================
With financial institutions 15.1 3,488,493 3,488,493
Others 823,360 2,976,460
4,311,853 6,464,953
===============================================================================16. STORES, SPARES AND LOOSE TOOLS===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
Stores 318,290 77,586
Spares 3,694,188 3,336,204
Loose tools 510,872 465,517
4,523,350 3,879,307
===============================================================================Stores and spares include items, which may result in fixed capital expenditure but are not distinguishable.17. STOCK IN TRADE ===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
Raw material 42,416,155 27,818,347
Work in process 4,684,167 4,278,569
Finished goods 12,651,294 23,646,712
Packing material 1,399,439 1,882,979
61,151,055 57,626,607
===============================================================================18. TRADE DEBTORS===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
Foreign bills receivable - secured 7,323,360 8,465,968
Local trade debtors - unsecured
Considered good 9,998,847 15,079,783
Considered doubtful 3,298,101 979,815
13,296,948 16,059,598
20,620,308 24,525,566
Less: provision for doubtful debts 3,298,101 979,815
17,322,207 23,545,751
===============================================================================19. LOANS AND ADVANCES - UNSECURED===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
CONSIDERED GOOD:
Loans:
To executives and employees 1,136,020 826,643
Advances:
Income tax 21,879,996 18,909,394
Against supplies 5,769,019 -
Against office purchase 15,449,584 12,280,990
Against electric power supply - 34,000,000
to others 38,098 62,734
43,136,697 65,253,118
44,272,717 66,079,761
===============================================================================20. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
Unsecured - considered good
Deposits:
Deposits with leasing companies 2,356,100 -
Balances with statutory authorities 5,880 157,211
Others 90,500 -
2,452,480 157,211
Prepayments - 47,000
Other receivables:
Sales tax receivable 1,021,140 135,927
Income tax refundable 20,000 3,567,894
Others 106,792 99,664
1,147,932 3,803,485
3,600,412 4,007,696
===============================================================================21. CASH AND BANK BALANCES===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
At bank - in current accounts 9,501,485 3,648,109
in foreign currency current accounts 127,463 8,462,830
9,628,948 12,110,939
===============================================================================22. SALES (NET)===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
Yarn:
Export - direct 507,631,735 609,986,197
- indirect 60,816,628 40,868,855
568,448,363 650,855,052
Local 120,173,434 106,983,571
Waste 3,845,770 3,944,865
692,467,567 761,783,488
Less: commission and brokerage 9,709,423 10,377,305
682,758,144 751,406,183
===============================================================================During the year the company discounted its export bills due to which no significant exchange difference arose.23. COST OF SALES ===============================================================================
Note 2002 2001
RUPEES RUPEES
===============================================================================
Opening work-in-process 4,278,569 3,457,258
Raw material consumed 23.1 325,634,328 432,165,488
Packing material consumed 12,988,451 11,682,261
Stores and spares consumed 12,186,508 12,673,558
Salaries, wages and other benefits 23.2 39,015,976 35,849,236
Processing charges 14,898,300 17,789,241
Fuel and power 80,570,146 78,206,091
Insurance 1,639,117 1,591,427
Fees and subscription 32,949 30,057
Communication expenses 194,461 150,007
Travelling, conveyance and entertainment 81,211 92,618
Repair and maintenance 2,359,351 669,375
Vehicle running and maintenance 682,972 619,321
Rent, rates and taxes 105,900 213,642
Other manufacturing expenses 125,704 61,215
Depreciation 12.1 18,332,133 19,990,549
513,126,076 615,241,344
Closing work in process (4,684,167) 4,278,569
Cost of goods manufactured 508,441,909 610,962,775
Yarn purchases for export 32,858,450 17,112,800
541,300,359 628,075,575
Opening stock of finished goods 23,646,712 20,707,187
564,947,071 648,782,762
Closing stock of finished goods (12,651,294) (23,646,712)
552,295,777 625,136,050
===============================================================================23.1. RAW MATERIAL CONSUMED===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
Opening stock 27,818,347 44,108,713
Purchases 340,232,136 415,875,122
368,050,483 459,983,835
Closing stock (42,416,155) (27,818,347)
325,634,328 432,165,488
===============================================================================24. ADMINISTRATIVE EXPENSES===============================================================================
Note 2002 2001
RUPEES RUPEES
===============================================================================
Directors remuneration 33 564,000 564,000
Salaries and other benefits 24.1 9,133,514 7,298,705
Printing and stationery 677,950 740,774
Communication expenses 2,588,880 2,539,054
Vehicle running and maintenance 852,196 469,691
Auditor's remuneration 24.2 80,000 70,000
Fees and subscription 292,085 366,929
Rent, rates and utilities 2,606,820 1,350,880
Travelling, conveyance and entertainment 214,206 290,171
Repair and maintenance 409,367 222,040
Legal and professional charges 115,267 28,400
Depreciation 12.1 1,700,277 1,533,077
Charity and donation 24.3 750,000 50,000
Bad debt expenses 2,318,286 -
Other expenses 165,568 277,758
22,468,416 15,801,479
===============================================================================24.1. Staff salaries and benefits include Rs. 1,098,066 (2001: Rs 537,134) in respect of staff retirement benefits.24.2. AUDITOR'S REMUNERATION ===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
Audit fees 75,000 50,000
Out of pocket expenses 5,000 20,000
80,000 70,000
===============================================================================24.3. None of the directors or their spouses had any interest in charity and donation made during the year.25. SELLING AND DISTRIBUTION EXPENSES ===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
Salaries and wages of sales office 316,259 300,701
Freight on export sales 20,722,230 19,802,711
Freight on local sales 4,289,660 4,297,529
Other selling expenses 5,547,994 1,925,721
30,876,143 26,326,662
===============================================================================26. OTHER INCOME===============================================================================
Note 2002 2001
RUPEES RUPEES
===============================================================================
Profit on deposit 3,359 2,961
Gain on disposal of fixed assets 12.2 57,070 -
60,429 2,961
===============================================================================27. FINANCIAL CHARGES===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
Interest on:
Workers' profit participation fund 651,743 1,028,170
Lease finance charges 1,407,719 2,489,285
Mark-up on bank finance - short term 11,005,525 28,064,660
Bank charges and commission 4,067,082 3,251,983
Zakat 2,288 2,129
17,134,357 34,836,227
===============================================================================28. TAXATION28.1. The provision for taxation has been made in these accounts on the basis of section 169 of the income Tax Ordinance, 2001. 28.2. The income tax assessments of the company have been finalised upto assessment year 2002-2003 (income year ended on 30th September, 2001) 28.3. TAX CHARGE RECONCILIATION ===============================================================================
2002 2001
RUPEES RUPEES
===============================================================================
Applicable tax rate 35 34.65
Effective presumptive tax regime (19.84) (14.32)
Average effective tax rate 15.16 20.33
===============================================================================29. EARNING PER SHARE===============================================================================
2002 2001
===============================================================================
Profit for the year after tax Rs. 50,340,788 39,909,474
Weighted average number of ordinary shares 6,432,000 6,432,000
Earning per share Rs. 7.83 Rs. 6.20
=============================================================================== |