| Dawood Lawrencepur - 2007 |
|
BALANCE SHEET AS AT JUNE 30, 2007
==================================================================================
2007 2006
NOTE RUPEES RUPEES
==================================================================================
NON CURRENT ASSETS
Fixed Assets
Property, plant and equipment 4 543,766,550 801,001,492
Intangible asset 5 6,900 6,900
543,773,450 801,008,392
Long Term Investments 6 2,013,209,948 2,567,083,797
Long Term Deposits 7 20,822,339 27,391,294
CURRENT ASSETS
Stores and spares 8 94,339,565 103,880,512
Stock-in-trade 9 365,792,225 723,624,248
Trade debtors 10 184,145,547 327,523,203
Short term investments 11 5,252,445 5,292,540
Loans and advances 12 3,924,264 9,240,159
Deposits, prepayments and other receivables 13 111,541,740 163,590,453
Cash and bank balances 14 42,567,777 34,441,439
807,563,563 1,367,592,554
Assets of disposal group classified as held 15.2 376,699,002 -
3,762,068,302 4,763,076,037
SHARE CAPITAL AND RESERVES
Share Capital
Authorised:
55,000,000 (2006: 55,000,000)
Ordinary shares of Rs. 10/- each 550,000,000 550,000,000
Issued, subscribed & paid up 16 424,418,680 385,835,160
Reserves 17 2,927,962,608 3,497,693,147
3,352,381,288 3,883,528,307
NON CURRENT LIABILITIES
Liabilities against assets subject
to finance lease 18 23,520,113 45,747,722
Deferred Liabilities 19 82,735,535 122,464,970
CURRENT LIABILITIES
Trade and other payable 20 124,618,976 177,804,675
Short term bank finances-secured 21 135,253,162 466,819,984
Current portion of lease liabilities 18 22,614,052 38,728,065
Interest/ markup on running finance 5,945,176 13,719,528
Provision for taxation 12,958,615 14,262,786
301,389,981 711,335,038
Liabilities directly associated with the as 15.3 2,041,385 -
CONTINGENCIES AND COMMITMENTS 22 -
3,762,068,302 4,763,076,037
==================================================================================PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2007==================================================================================
NOTE 2007 2006
RUPEES RUPEES
Restated
==================================================================================
CONTINUING OPERATIONS
Sales Net 23 1,221,321,736 1,861,352,483
Cost of goods sold 24 (1,160,437,308) (1,761,142,755)
Gross Profit 60,884,428 100,209,728
Operating Expenses
Administrative and general 25 (54,549,981) (74,073,903)
Selling and distribution 26 (45,340,442) (62,155,076)
Other charges 27 (50,000) (12,482,869)
(99,940,423 (148,711,848)
Operating (Loss) (39,055,995) (48,502,120)
Financial charges 28 (35,115,712) (75,843,080)
Other income 29 59,283,874 51,105,065
Share of profit from associate 223,460,489 439,155,000
247,628,651 414,416,985
Profit before tax 208,572,656 365,914,865
Taxation
- Current (12,958,614) (14,262,786)
Share of taxation from associates (51,378,489) (124,125,000)
- Deferred 14,704,844 -
(49,632,259) (138,387,786)
Profit after tax from continuing operations 158,940,397 227,527,079
DISCONTINUED OPERATIONS
Loss after tax for the year from 15.1 (74,390,570) -
discontinued operation
Profit for the year 84,549,827 227,527,079
Earnings per share-basic and diluted 31.1 3.74 5.90
- continuing operations
Earnings per share-basic and diluted 31.2 (1.75) -
- discontinued operations
==================================================================================CASH FLOW STATEMENTS FOR THE YEAR ENDED JUNE 30, 2007===================================================================================================================
Continuing Discontinued Total Total
Operations Operations 2007 2006
Rupees Restated
===================================================================================================================
Cash Flow from Operating Activities:
Profit/(Loss) before taxation 208,572,657 (72,349,184) 136,223,473 365,914,865
Adjustment for:
Depreciation 64,548,226 10,807,129 75,355,355 77,094,236
Profit on sale of fixed assets (303,558) (1,203) (304,761) (1 3,122,602)
Provision for gratuity 11,609,904 1,534,193 13,144,097 15,966,460,
Gain on sale of investments (1,417,769) - (1,417,769) (7,363,522)
Income from investments (23,693,423) (891,609) (24,585,032 (29,753,496)
Insurance claim received (817,803) - (817,803) -
Share of profit from associates (223,460,489) - (223,460,489) (439,155,000)
Financial charges 35,115,712 15,186,464 50,302,176 75,843,080
Operating profit/(loss) before working capital changes 70,153,457 (45,714,210) 24,439,247 45,424,021
Net Decrease in Working Capital 226,923,014 63,852,570 290,775,584 146,172,506
Cash generated from operations 297,076,471 18,138,360 315,214,831 191,596,527
Payments for:
Gratuity (34,386,928) (3,781,760) (38,168,688) (14,090,317)
Tax 38,939,232 - 38,939,232 (15,035,538)
Financial charges 35,115,712 (15,186,464) (50,302,176) (67,774,626)
Net cash inflow/(outflow) from Operating Activities (A 266,513,063 (829,864) 265,683,199 94,696,046
Cash Flow from Investing Activities
Sales of fixed assets 1,706,221 163,673 1,869,894 27,570,402
Sale of shares 4,372,651 4,372,651 106,704,138
Income from investments 131,037,638 891,609 131,929,247 127,471,960
Long term deposits 6,568,955 - 6,568,955 2,622,477
Fixed capital expenditure (32,358,170) - (32,358,170) (147,230,467)
Net cash inflow from Investing Activities (B) 111,327,295 1,055,282 11 2,382,577 11 7,138,510
Cash Flow from Financing Activities
Dividend paid (30,994) - (30,994) (251,244)
Finance Lease (38,341,622) - (38,341,622) (49,473,771)
Net cash (outflow) from Financing Activities (C) (38,372,616) - (38,372,616) (49,725,015)
Net increase in cash and cash equivalents (A+B+C) 339,467,742 225,418 339,693,160 162,109,541
Cash and cash equivalents at the beginning of the year(432,378,545) - (432,378,545) (594,488,086)
Cash and cash equivalents at the end of the year (92,910,803) 225,418 (92,685,385) (432,378,545)
Movement in Working Capital
(Increase) /Decrease in Current Assets
Stores and spares 6,303,337 3,237,609 9,540,946 (11,709,930)
Stock-in-trade 128,028,043 58,191,727 186,219,770 197,548,336
Trade debts 128,938,334 14,439,322 143,377,656 (42,078,774)
Loans and advances 1,534,319 1,226,751 2,761,070 -
Deposits, prepayments and other receivables (53&792) 2,567,638 2,030,846 (18,337,251)
264,267,241 79,663,047 343,930,288 125,422,381
Increase / (Decrease) in Current Liabilities
Trade and other payable (37,344,227) (15,810,477)) (53,154,704) 20,750,125
Net Decrease in Working Capital 226,923,014 63,852,570 /5A5~844 146,172,506~
Cash and Cash Equivalents
Cash and bank balances 42,342,359 225,418 42,567,777 34,441,439
Short term bank finances (1 35,253,162) - (135,253,1 62 ) (466,819,984)
Cash and Cash Equivalents at the end of the year (92,910,803) 225,418 (92,685,385) (432,378,545)
===================================================================================================================STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2007========================================================================================================================================================================================
CAPITAL RESERVE REVENUE RESERVE
Share Merger Right Share Capital Capital Revenue Unappropriate Fair Value Fair Value
Capital Reserve Premium Reserve Redemption Reserve Profit Reserve on Reserve on Total
Reserve Investments Investments
In associates
========================================================================================================================================================================================
Balance as at June 30, 2005 as reported previously 350,759,240 10,520,929 136,865,545 33,310,918 25,960,000 395,354,584 941,430,650 - 1,846, 174,814 3,740,376,680
Due to change of measurement from fair value to equity - - - - - - 1,002,223,000552,581,000 (1,871,568,870) (316,764,870)
Balance as at July 01, 2005- Restated 350,759,240 10,520,929 136,865,545 33,310,918 25,960,000 395,354,584 1,943,653,650 552,581,000 (25,394,056) 3,423,611,810
Profit for the year 227,527,079 227,527,079
Bonus Shares Issued 35,075,920 (35,075,920) -
Transfer to profit and loss account on sale of
investments 3,982,336 3,982,336
Increase in carrying value of investments
carried at market value 2,322,566,961 2,322,566,961
Due to change of measurement from fair value to equity (65,996,000) (2,028,163,879)(2,094,159,879)
Balance as at June 30,2006 - Restated 385,835,160 10,520,929 136,865,545 33,310,918 25,960,000 395,354,584 2,136,104,809 486,585,000 272,991,362 3,883,528,307
Appropriations
Issuance of Bonus shares for the year ended 38,583,520 (38,583,520) -
June 30, 2006 in the ratio of 1:10
Profit for the year from continuing operations 158,940,397 158,940,397
Loss for the year from discontinuing operations (74,390,570) (74,390,570)
Transfer to profit and loss account on sale of (379,070) (379,070)
Increase in carrying value of investments
carried at market value (165,694,776) (165,694,776)
Share of fair value reserve on investment in associate (449,623,000) (449,623,000)
Balance as at June 30, 2007 424,418,680 10,520,929 136,865,545 33,310,918 25,960,000 395,354,584 2,182,071,116 36,962,000 106,917,516 3,352,381,288
========================================================================================================================================================================================Notes to the Accounts For the Year Ended June 30, 20071. STATUS AND BUSINESS ACTIVITIES OF THE COMPANY 1.1. The Company and its Operations Dawood Lawrencepur Limited (the Company) is a public limited company incorporated in 2004 as a result of scheme of arrangement for amalgamation in terms of provisions of section 284 to 287 of the Companies Ordinance, 1 984 between Dawood Cotton Mills Limited, Dilon Limited, Burewala Textile Mills Limited, Lawrencepur Woollen and Textile Mills Limited and members of the said companies. The shares of the company are listed on the Karachi and Lahore Stock Exchanges. The company is principally engaged in the business of manufacture and sale of yarns and fabrics made from natural and man-made fibers and blends thereof. The registered office of the Company is situated at 35-A, Shahrah-e-Abdul Hameed Bin Baadees (Empress Road), Lahore. 1.2. SIGNIFICANT EVENTS i) Textile Operations The cotton textile business continued to incur losses on account of unfavorable trading condition and due to plant inefficiencies resulting from old plant and machinery. As a consequence, the increased cost of production made these units unviable. Despite management's best efforts, it was not possible to achieve turnaround and accordingly, the Board of Directors at its meeting held on April 26, 2007 approved the closure of the textiles operations at Landhi Mills unit No. 4 and Burewala Mills Unit No. 4. ii) Polyester Staple Fiber Operations - Dilon Due to the abundant availability of imported filament yarn in the market at cheaper prices as compared to the locally manufactured product, it was not possible to make Dilon operations financially viable. Accordingly, the Board of Directors also approved the closure of Dilon operations on April 26, 2007 iii) In accordance with listing regulation No.28 and Clause (xxiii) of the listing regulations No.37 under Code of Corporate Governance, The Karachi Stock Exchange, The Lahore Stock Exchange and Securities and Exchange Commission of Pakistan was conveyed the decision of the Board of Directors vide company letter dated April 27, 2007. IV) In view of the above, the above operations have been classified as 'discontinued operations' and have been accounted for under IFRS - 5, Non Current Assets held for Sale and Discontinued Operation. 1.3. The IFRS requires that the company identifies all the assets and liabilities relating to the discontinued operation and classify them in current assets and current liabilities under the heading of 'Asset of Disposal Group classified as Held for Sale' and 'Liabilities Directly Associated with Assets classified as Held for Sale' as separate line items. This IFRS also requires that the company carries the assets classified as held for sale on the lower of carrying value or fair value less cost of sale. 2. STATEMENT OF COMPLIANCE 2.1. These financial statements have been prepared in accordance with the requirements of the Companies Ordinance, 1984, and Approved Accounting and Financial Reporting Standards as applicable in Pakistan, unless otherwise disclosed. Approved Accounting and Financial Reporting Standards comprise of such International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as notified under the provisions of the Companies Ordinance, 1984. Wherever, the requirements of the Companies Ordinance, 1984 or directives issued by the SECP differ with the requirements of these standards, the requirements of Companies Ordinance, 1984 or the requirements of the said directives shall take precedence. 2.2. SECP has issued SRO 1228 (1)/2006 dated December 6, 2006 to notify that IFRS - 2 share based payments, IFRS - 3 business combination, IFRS - 5 Non current assets held for sale and discontinued operations and IFRS - 6 exploration for and evaluation of Mineral Resources are required to be followed in preparation of financial standards of the listed companies. The company has adopted the above IFRS's. The adoption of above IFRS's except for IFRS-5 did not have any effect on the financial statement of the company, they did however, give rise to additional disclosures. Further IFRS - 5 is applicable for the financial period beginning on or after December 2006. However the company chooses the earlier adoption of this IFRS-5. 2.3. BASIS OF PRESENTATION These financial statements have been prepared under the historical cost 'convention', except for those 'available for sale investments', which hove been recognised at fair value, investment in associate which has been accounted for using equity method and recognition of certain staff retirement benefits at present value. 3. SIGNIFICANT ACCOUNTING POLICIES 3.1. Fixed Assets 3.1.1. Property, Plant and Equipment Owned Operating fixed assets, except for free hold and, are stated at cost has accumulated depreciation. Depreciation is provided on a diminishing balance method at the rate mentioned in the relevant note except for lease hold land which is amortized on straight line method. Depreciation is charged from the date the asset is put into operation and discontinued from the date the asset is retired. Major renewals, replacements and imports are capitalized and the assets so replaced, if any are retired. Normal repairs and maintenance are charged to income as an when incurred. Gain and loss on disposal of the assets are included in the income currently. Leased Assets held under finance lease are stated at the lower of present value of minimum lease payment under the lease agreement and the fair value of asset acquired on lease. The aggregate amount of obligations relating to assets subject to finance lease is accounted for at the net present value of liabilities. Value of leased assets is depreciated over the useful lives of assets using the same rates applicable to the own assets. Depreciation of leased assets is charged to income. The related obligations of leased assets are accounted for as liabilities. The finance charge is calculated at interest rate implicit in the lease and is charged to the profit and loss account, unless capitalised as stated in note 3.1.1 above. 3.1.2. Intangible Assets Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in the income statement in the year in which the expenditure is incurred. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the income statement in the expense category consistent with the function of the intangible asset. 3.1.3. Capital Work In Progress Capital work in progress is stated at cost incurred to date less impairment in value if any. It normally consist of expenditure incurred and advances made in respect of operating fixed asset in the course of their completion. 3.1.4. Assets of Disposal Group Classified as Held For Sale As stated in note 1.3 above these are stated at lower of carrying value or fair value less cost of disposal. Fair value has been determined by an independent valuer 3.1.5. Impairment of Assets The Company assesses at each balance sheet date whether there is any indication that the assets may be impaired. If such indication exists, the carrying amount of such assets are reviewed to assess whether they are recorded in excess of their recoverable amounts. Where carrying values exceed the respective recoverable amounts, assets are written down to their recoverable amounts and the resulting impairment difference is charged to profit and loss account. 3.2. Investments 3.2.1. Associates Associated companies, where the company holds 20% or more of the voting power of the investee company and where the company has significant influence, but not control, over the financial and operating policies, are accounted for using the equity method of accounting. Equity method is a method under which the financial statements of the company include the company's share of the income and expenses of the associate, after adjustments, if required, to align the accounting policies of associate with those of the company from the date when the significant influence is established until the date when the significant influence ceases. When the company share of loss exceeds its interest in associate accounted for under the equity method, the carrying amount of that interest is reduced to zero and recognition of further losses is discontinued except to the extent that the company has an obligation or has made payments on behalf of the investee. In accordance to IAS-28, Accounting for Investment in Associates, where significant influence exists are required to be measured under the equity method of accounting. The company has adopted the above IAS effective January 01, 2005, however, the investments in Associates were being measured under IAS-39 on Fair Value. During the company has started measuring its investments in associates under IAS-28 to correctly reflect its share of profit in Associates. The above has been applied restropectively. Accordingly the financial statements for the corresponding year and for prior periods presented have been restated. The effect of remeasurement of investment in Associates on the financial statements for June 30, 2006 is summarised below: ===========================================================
Rs in million
===========================================================
Decrease in long term investment 2,652
Decrease in Reserve for fair value on investment 2,028
Share of profit from associates 315
Increase in profit before tax 230
===========================================================Unrealised gains arising from transactions, if any, with an associate accounted for under the equity method of accounting are eliminated against the investment to the extent of the company's interest in the associate. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.3.2.2. Other Investments All investments are initially recognised at cost, being the fair value of the consideration given and include transaction costs. These are recognised and classified as follows: Available for Sale The management determines the appropriate classification of these investments in accordance with the requirements of IAS-39 'Financial Instruments: Recognition and Measurement', at the time of purchase depending on the purpose for which the investments are acquired and re-evalutes this classification on a regular basis. The existing investment portfolio of the Company has been classified as 'available for sale'. Available for sale financial assets' that are quoted securities are initially measured at fair value inclusive of transaction costs and are subsequently re-measured to fair value using the quoted market prices. Investment in unquoted securities are initially recognised and subsequently carried at fair value or at cost where fair value cannot be reliably measured. Gain / loss upon remeasurement of available for sale financial assets' are recognised directly in equity through the statement of changes in equity. Except for the investment in Karnaphuli Paper Mills Limited which is stated at nominal value all other investment in unquoted securities are stated at cost, less provision for impairment, if any. 3.3. Stores and Spares Stores and spares are valued at lower of average cost and realisable value. Stores and spares in transit are valued at cost incurred upto the balance sheet date. Provision for obsolete and slow moving stores and spares is determined based on the assessment regarding their future usability. 3.4. Stock in Trade Stock in trade is valued at the lower of cost and net relisable value. ================================================================================
Cost incurred in bringing each product to its present location and condition are
accounted for as follows:
Raw and packing material except
in transit/bond At purchase cost on an average basis
Finished goods and work in progress Average production cost which
includes cost of:
Direct material
Direct wages
Direct expenses
Overheads
================================================================================Items in transit/bond are valued at cost comprising invoice values plus other charges incurred thereon upto the balance sheet date.Net realisable value signifies the estimated selling price in the ordinary course of business less cost necessary to be incurred to make the sale. Trading goods are accounted for on cost which is the invoice value plus other expenses incurred to bring them to the point of sale. 3.5. Trade Debts Known bad debts are written off, while provisions are made against debts considered doubtful based on review of outstanding amount at the end of the year. 3.6. Taxation Current Provision for current taxation is based on taxable income for the year at the current rates of taxation after taking into account tax credits and rebates available, if any, or one half of one percent of turnover, whichever is higher. Deferred Deferred tax is recognised using the balance sheet liability method on all temporary differences between the carrying amounts of assets and liabilities and their tax bases. The carrying amount of deferred tax asset is reviewed at each balance sheet date and is recognised only to the extent that it is probable that future taxable profits will be available against which the asset may be utilised. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefits will be realised. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. Income tax relating to items recognised directly in equity is recognised in equity and not in the profit and loss account. 3.7. Staff Retirement Benefits Gratuity The company operates a funded gratuity scheme covering its management employees of one unit and an unfunded gratuity scheme for all other eligible employees. As per actuarial valuation carried out as at June 30, 2007 the following significant assumptions were used for determining the gratuity liability. ============================================================ Discount rate 1 0% Expected rate of salary increase 9% Expected rate of return on plan assets 8% Average expected remaining life of employees 8-10 years ============================================================The Company recognises actuarial gain/losses over the expected future service of current members, based on the "minimum 10% corridor" approach recommended under IAS-19 "Employee Benefits". Provident Fund The Company also operates a contributory provident fund scheme covering its management employees of one unit. These benefits are payable to employees on completion of prescribed qualifying period of service under the scheme. Equal contributions is made both by the Company. Contributions made by the company are charged to income for the year. Compensated Absences The Company accounts for these benefits in the period in which the absences are earned. 3.8. Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, 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. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates. 3.9. Foreign Currency Translations These financial statement are presented in Pak Rupees, which is the Company's functional and presentational currency. Transaction in foreign currencies are recorded in Pak Rupees at the exchange rate approximating those prevailing on the date of the transaction. Monetary assets and liabilities in foreign currencies are reported in Pak. Rupees at the exchange rate approximating those prevalent at the balance sheet date. Non monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in foreign currencies, are translated using the exchange rates at the date when the fair value was determined. 3.10. Revenue Recognition Sales are recorded as revenue when the title of the goods is transferred to the customer which normally corresponds with the dispatch of goods to customers. Income from investments/deposits is recognised on accrual basis. Dividend income is recognised when the Company's right to receive the dividend is established. 3.11. Borrowing Cost Borrowing Costs are recognised as an expense in the period they are incurred. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as a part of asset. 3.12. Related Party Transactions Transactions with related parties are stated at arm's length determined in accordance with the prescribed method. 3.13. 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 equivalent include cash in hand and with banks and short term bank finances. The fairvalue of cash and cash equivalents approximates their carrying amount. 3.14. Financial Assets and Liabilities All financial assets and liabilities are recognised at the time when the Company becomes a party to the contractual provisions of the instrument. Any gain or loss on the recognition and derecognition of the financial assets and financial liabilities is taken to the profit and loss account currently. Financial assets and liabilities, other than specifically mentioned in these policies, are carried at amortized cost. The fair value of these approximate their carrying value. 3.15. Off-setting of Financial Assets and Financial Liabilities Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to set-off the recognized amounts and the company intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously and the same is required or permitted by IASs or interpretations thereof. 4. PROPERTY, PLANT AND EQUIPMENT - ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Operating assets (Note 4.1) 543,766,550 793,415,616
Capital work-in-process - 7,585,876
==================================================================================4.1. OPERATING ASSETS===========================================================================================================================================================================================================================
COST DEPRECIATION
As at Additions Deleted/Sold Transfer from Transfer to As at As at Provided On Sale / Transfer fro Transfer to Accumulated Book value
PARTICULARS July 01 During the during Leased to Held for sale June July 01 during the (deletion) Leased to Held for saleDepreciation u As at Dep. Rate
2006 year year Own Assets 30, 2007 2006 year Own Assets June June %
30,2007 30,2007
===========================================================================================================================================================================================================================
PROPERTY PLANT AND EQUIPMENT
Owned Assets
Land .Free hold 3,156,616 - - - - 3,156,616 - - - - - - 3,156,616
Lease hold 1,080,702 - - - - 1,080,702 454,620 8,770 - - - 463,390 617,312 1%
Building - on free hold land 69,744,006 813,500 - - - 70,557,506 56,221 .277 1,563,932 - - - 57,785,209 12,772,297 5-10%
on lease hold land 43,065,885 11,348,281 - - - 54,414,166 32,376,785 1,523,173 - - - 33,899,958 20,514,208 10%
Plant & Machinery 1,347,045,638 13,148,108 (385,000) 102,084,510 (672,702,439)789,190,81 7 786,725,553 57,041,143 (160,060) 24,312,974 (467,806,126) 400,113,484 389,077,3310- 20%
Furniture & fixtures and
office equipment 28,165,392 1,587,511 - - (1,169,029) 28,583,874 14,286,719 1,872,688 - - (1,062,966) 15,096,441 13,487,433 10-15%
Electric installations 36,712,468 - - - (1,049,267) 35,663,201 30,685,905 598,216 - - (964,895) 30,319,226 5,343,975 10%
Tools and equipment 2,808,041 429,000 (343,542) - - 2,893,499 2,366,209 45,300 - (294,355) - 2,117,154 776,345 10%
Vehicles 21,678,455 5,031,770 (3,374,337) 828,190 . 24,164,078 13,129,760 2,886,155 (2,083,331) 554,264 - 14,486,848 9,677,230 25%
Leased Assets
Plant and Machinery 220,962,301 - - (102,084,510) - 118,877,791 45,030,986 9,815,978 - (24,312,974) - 30,533,990 88,343,801 10%
Vehicles 828,190 - - (828,190) - - 554,264 - - (554,264) - - - 10%
Total 2007 Rupees 1,775,247,694 32,358,170 (4,102,879) - (674,920,735)1,128,582,250 981,832,078 75,355,355 (2,537,746) - (469,833,987) 584,815,700 543,766,550
Total 2006 Rupees 1,436,743,995 414,265,951 (75,762,252) - - 1,775,247,694 966,052,294 77,094,236 (61,314,452) - - 981,832,078 793,415,616
===========================================================================================================================================================================================================================4.2. Assets of disposal group==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
classified as held for sale
Cost 674,920,735
Less: Accumulated Depreciation (469,833,987)
205,086,748
==================================================================================4.3. The Company is in the process of transferring Land and other as sets in the name of Dawood Lawrencepur Limited and is currently held in the name of the companies before the merger.4.4. Depreciation/Amortization has been charged to ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Cost of goods sold 73,103,635 75,301,189
Administrative and general expenses 1,403,863 1,253,015
Selling and distribution expenses 847,857 540,032
75,355,355 77,094,236
==================================================================================4.5. DETAILS OF FIXED ASSETS SOLD DURING THE YEAR==============================================================================================================================================
Particulars Original Accumulated Written Sales Profit Mode of disposal Sold to
Cost Depreciation Down Value Proceeds
Plant & Machinery 385,000 160,060 224,940 224,940 - Insurance claim M/s. Central Insurance Co., Ltd
Tools and Equipment 343,542 294,355 49,187 226,000 1 76,813 Negotiation M/s. Zultiqar Zarai Industries,
Burewalo
==============================================================================================================================================
Vehicle 6,912 6,869 43 43 As per Company Policy (Employee) Mr. Abdul Rahim
Vehicle 59,200 53,184 6,016 6,617 601 As per Company Policy (Employee) Mr. M. Aftab Hussain
Vehicle 59,200 53,185 6,015 6,617 602 As per Company Policy (Employee) Mr. M. Amin Yousuf
Vehicle 599,000 448,604 150,396 150,396 . As per Company Policy (Employee) Mr. Musheer A. Khan
Vehicle 746,725 624,707 122,018 134,220 12,202 As per Company Policy (Employee) Mr. Abdul Ghafoor Khan
Vehicle 1,147,000 253,322 893,678 983,046 89,368 As per Company Policy (Employee) Mr. M. Saleem Forooqui
Vehicle 636,300 528,951 107,349 118,084 10,735 As per Company Policy (Employee) Mr. Malik Fayyaz Ahmed
Vehicle 120,000 114,509 5,491 19,931 14,440 As per Company Policy (Employee) Mr. Abdul Ghani
Total 2007 Rupees 4,102,879 2,537,746 1,565,133 1,869,894 304,761
Total 2006 Rupees 75,762,252 61,314,452 14,447,800 27,570,402 13,122,602
==============================================================================================================================================5. INTANGIBLE ASSETFollowing is the statement of intangible assets which represent Trade Marks. ==================================================================================
2007 2006
As at July 1, 2005 Rupees Rupees
==================================================================================
Cost 24,190 24,190
Less: accumulated depreciation (17,290) (17,290)
Net book value 6,900 6,900
Year ended June 30, 2006
Opening net book value 6,900 6,900
Less: amortization charge for the year - -
Closing net book value 6,900 6,900
As at July 1, 2006
Cost 24,190 24,190
Less: accumulated depreciation (17,290) (17,290)
Net book value 6,900 6,900
Year ended June 30, 2007
Opening net book value 6,900 6,900
Less: amortization charge for the year - -
Closing net book value 6,900 6,900
As at June 30, 2007
Cost 24,190 24,190
Less: accumulated depreciation (17,290) (17,290)
Net book value 6,900 6,900
==================================================================================6. LONG TERM INVESTMENTS==================================================================================
2007 2006
Note RUPEES RUPEES
==================================================================================
Investment in related parties 6.1 1,414,239,694 1,799,124,910
Other investments 6.2 598,970,254 767,958,887
2,013,209,948 2,567,083,797
==================================================================================6.1. Investment in Associate==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Equity Method
Dawood Hercules Chemicals Limited (DHCL)
13,418,027 (2006:13,418,027) Ordinary share 65,294,230 65,294,230
Percentage of equity held - 16.19% (2006:16.19%)
Share of post acquisition profits 1,456,289,680 1,803,838,000
Less: Dividend received during the year (107,344,216) (70,007,320)
1,414,239,694 1,799,124,910
==================================================================================6.1.1. Fair value of investment in associate is Rs. 3,742,287,730 (2006: 3,965,026,979)6.1.2. The financial year end of DHCL is 31 December. Due to non availability of financial statements for the period ended 30 June 2007 at the time of preparation of these accounts, financial results as of 31 March 2007 have been used for the purpose of application of equity method as on 30 June 2007. For corresponding period financial results as on 30 June 2006 has been used. 6.1.3. Summarised financial information of DHCL is as follows: ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Total assets as on 31st March 2007
(for 2006: 30th Jun 16,562,200 19,154,593
Total liabilities as on 31st
March 2007 (for 2006: 30t 7,319,909 7,535,101
Revenue (9 months from 1st July 2006
till 31st March 2007)
For 2006 (12 months from 1 July 2006 till
30th June 20 2,749,246 3,732,194
Profit after taxation (9 months from
1st July 2006 till 31 March 2007)
For 2006 (12 months from
1st July 2006 till 30th June 1,062,892 2,259,818
==================================================================================6.1.4. Dawood Lawrencepur Limited holds less then 20% (16.19%) of the voting power in DHCL, however due to representation of its Directors on the Board of Directors of DHCL and participation in policy making processes including participation in decisions about dividends or other distributions it has significant influence over DHCL.6.2. Other Investments ==================================================================================
2007 2006
Available for sale RUPEES RUPEES
==================================================================================
Listed Companies
Related Parties
Sui Northern Gas Pipelines Ltd.
8,272,470 (2006: 7,566,700) Ordinary shares of
Rs. 10/- each Equity held 1 .52% (2006: 1.52 %)
Cost Rs. 480,238,817/- (2006 : Rs.483,193,699/-) 585,277,253 756,670,000
Others
Sui Southern Gas Company Ltd.
55,310 (2006 : 55,310) Ordinary shares of Rs. 10/- each
Cost Rs. 698,313/- (2006 : Rs. 698,313/-) 1,426,998 1,602,884
National Investment Trust
Units 200,000 (2006: 200,000) of Rs. 10/- each
Cost Rs. 2,440,000/- (2006 : Rs. 2,440,000/-) 12,250,000 9,670,000
598,954,251 767,942,884
Other entities
Karnaphuli Paper Mills Ltd.
795,000 (2006: 795,000) Ordinary shares of Rs. 10/- ea 3 3
Mianwali Central Co-operative Bank Ltd.
100 (2006: 100) Ordinary shares of Rs. 10/- each 1,000 1,000
Asian Co-operative Society Ltd.
1,500 (2006: 1,500) Ordinary shares of Rs. 10/- each 15,000 15,000
598,970,254 767,958,88
==================================================================================7. LONG TERM DEPOSITS==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Security deposit against finance lease 11,313,283 17,862,231
Electricity & Gas Deposit 8,561,478 8,590,72)
Others 947,578 938,328
20,822,339 27,391,29
==================================================================================8. STORES AND SPARES==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Stores 41,331,048 52,730,33
Spares 53,008,517 51,150,18.
94,339,565 103,880,51
==================================================================================9. STOCK IN TRADE==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Raw materials 1)
Work in process 105,117,156 193,957,44
Finished goods 334,501,259 361,163,77
Trading goods 3,580,733 4,100,911
537,404,478 723,284,66
Raw materials in transit 339,580
537,404,478 723,624,24
Transferred to discontinued operations (171,612,253) --
365,792,225 723,624,24
==================================================================================10. TRADE DEBTORS - unsecured considered good==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Trade debtors 197,020,247 329,447,16
Less: Provision for doubtful debts (Note 10.1) (12,874,700) 1,923,965
==================================================================================10.1. PROVISION FOR DOUBTFUL DEBTS - MOVEMENT==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Opening Balance 1,923,965 1,923,965
Add Provided during the year 10,950,735 -
12,874,700 1,923,965
==================================================================================10.2. The amount due and maximum aggregate a parties at the end of any month during the year are as follows:-==================================================================================
Amount Maximum month
Outstanding end balance
==================================================================================
2007
Sach International (Pvt) Limited 753,948 21,734,910
Dawood Hercules Chemicals Limited 412,584 8,671,287
2006
Sach International (Pvt) Limited 13,176,914 22,037,339
Dawood Hercules Chemicals Limited 875,605 7,755,420
==================================================================================11. SHORT TERM INVESTMENTS - Available for sale==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Southern Electric Power Co. Ltd.
801,900 (2006 : 801,900) Ordinary shares of Rs.10/- each 5,252,445 5,292,540
Cost Rs. 13,912,050/- (2006 : Rs. 13,912,050/-)
5,252,445 5,292,540
==================================================================================12. LOANS AND ADVANCES==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Unsecured- Considered good
Loans and advances due from employees 1,628,776 1,901,226
Advances to suppliers and others 2,295,488 6,738,933
Advance against purchase of vehicles - 600,000
3,924,264 9,240,159
==================================================================================13. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Security deposits 3,344,665 2,385,001
Prepayments 688,107 591,430
Letters of credit 4,115,544 2,343,313
Income tax 74,935,767 124,953,634
Sales tax 23,450,642 18,710,696
Excise duty - 90,920
Insurance claim (Note 13.1) 2,900,000 -
Others (Note 13.1) 2,107,015 14,515,459
1,541,740 163,590,453
==================================================================================13.1. The amount due and maximum aggregate amount due from related parties at the end of any month during the year are as follows:==================================================================================
Amount Maximum month
Outstanding end balance
==================================================================================
2007
Central Insurance Company Limited 3,464,590 3,739,324
2006
Central Insurance Company Limited 222,310 3,943,869
Dawood Hercules Chemicals Limited 318,088 1,358,088
==================================================================================14. CASH AND BANK BALANCES==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
In hand 446,510 1,764,748
At bank
- in current accounts 22,814,488 23,095,876
- in deposit accounts 19,306,779 9,580,815
42,121,267 32,676,691
42,567,777 34,441,439
==================================================================================15. DISCONTINUED OPERATIONS15.1. Sales - Net ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
408,277,089 -
Cost of goods sold (Note 15.5) (451,552,487) -
Gross (Loss) (43,275,398) -
Operating Expenses
Administrative and general (17,001,551) -
Selling and distribution (7,571,705) -
Operating (Loss) from discontinuing operations (67,848,654) -
Other income 10,685,934 -
Financial charges (15,186,464) -
(Loss) before tax from discontinued operations (72,349,184) -
Taxation - Current (2,041,385)
(Loss) after tax from discontinuing operations (74,390,570) -
==================================================================================15.2. Assets of disposal group classified as held for sale==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Property, plant and equipment (Note 4.2) 205,086,748 -
Stock-in-trade 171,612,254 -
376,699,002 -
==================================================================================15.3. Liabilities directly associated with the assets classified as held for sale==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Provision for taxation 2,041,385 2,041,385
==================================================================================15.4. Net asset==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
directly associated with disposal group 374,657,617 -
==================================================================================15.5. Cost of Good Sold Raw Material==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Opening inventory 27,475,469 -
Purchases 234,194,457 -
Less: Closing inventory (32,607,892) -
Raw materials consumed 229,062,034 -
Other Cost
Cloth and yarn purchased 1 831,452 -
Salaries, wages and allowances 58,354,709 -
Stores and spares consumed 18,540,657 -
Electricity, gas and water consumed 61,400,293 -
Depreciation 10,807,129 -
Insurance 3,540,536 -
Repair and maintenance 1,074,914 -
-Rent, rates and taxes - 1,057,915
Workers' welfare 2,024,610 -
Other expenses 534,088 -
388,228,337
Add: Opening work in process 23,631,327 -
Less: Closing work in process (1,434,638) -
Cost of production 410,425,026 --
Add: Opening inventory of finished goods 1,78,697,184 -
Less: Closing inventory of finished goods (137,569,723) -
- -
==================================================================================15.6. Comparative information is not provided as the company has not maintained unit wise data for prior periods.16. ISSUED, SUBSCRIBED AND PAID UP CAPITAL ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
2,204,002 (2006: 2,204,002) Ordinary shares of Rs. 10/-
each fully paid in cash. 22,040,020 22,040,020
12,805,118 (2006: 12,805,118) Ordinary shares of Rs. 10/- each issued
with the share-swap ratio to the
shareholders of the merging companies 128,051,180 128,051,180
27,432,748 (2006: 23,574,396) Ordinary shares of Rs. 10/-
each fully paid as bonus shares 274,327,480 235,743,960
42,441,868 385,835,160
==================================================================================16.1. Movement in share capital during the year==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Opening balance 385,835,160 350,759,240
Issued 3,858,352 (2006: 3,507,592) Ordinary shares of 38,583,520 35,075,920
Rs.10/- each fully paid as bonus shares
Closing Balance 424,418,680 385,835,1 60
==================================================================================17. RESERVES==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Revenue reserve (including unappropriated profit) 2,577,425,700 2,531,459,393
Capital reserve
Capital reserve 33,310,918 33,310,918
Capital redemption reserve 25,960,000 25,960,000
Right share premium (Note 17.1) 136,865,545 136,865,545
Merger reserve 10,520,929 10,520,929
Fair value reserve on investment in associate 36,962,000 486,585,000
Fair value reserve on investment 106,917,516 272,991,362
350,536,908 966,233,754
2,927,962,618 3,497,693,147
==================================================================================17.1. This reserve can be utilised by the company only for the purposes as specified in section 83(2) of the Companies Ordinance, 1 984.18. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Opening balance 84,475,787 133,949,558
Less: Repayments during the year (38,341,622) (49,473,771)
46,134,1 651 84,475,787
Less: Current maturity (22,614,052) (38,728,065)
23,520,113 45,747,722
==================================================================================18.1. The minimum lease payments have been discounted @ 7% to 16.25% (2006: 7% to 16.25%) per annum to arrive at the present value of minimum lease payments. These liabilities are secured against relevant assets and security deposits of Rs.11.31 million (2006: Rs. 17.86 million).The amount of future payments and the period in which they will become due are: ===========================================================
Present value of
Total Minimum Financial Charges minimum lease
Lease payment
Rupees
===========================================================
2007 - 2008 26,543,556 3,929,504 22,614,052
2008 - 2009 24,585,062 1,064,949 23,520,113
51,128,618 4,994,453 46,1 34,165
===========================================================19. DEFERRED LIABILITIES==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Gratuity (Note 19.1) 82,735,535 107,760,126
Deferred Taxation (Note 19.2) - 14,704,844
82,735,535 122,464,970
==================================================================================19.1. Gratuity dues==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Opening Balance 107,760,126 105,883,983
Add: Expense charged during the year 13,144,097 15,966,460
120 904,221 121,850,443
Less: Payments during the year (38,168,688) (14,090,317)
82,735,535 107,760,126
Expense
Current service cost 5,306,015 8,427,342
Interest cost 8,015,782 7,986,541
Acturial gain recongnised - (282,886)
Return on plan assets (177,700) (164,537)
Charged to profit and loss account 13,144,097 15,966,460
Reconciliation
Present value of obligation 76,631,471 100,197,275
Fairvalue of plan assets (2,161,999) (2,221,248)
Unrecognised actuarial gain 8,266,063 9,784,099
82,735,535 107,760,126
==================================================================================19.2. Deferred taxThe liability for deferred taxation comprises of timing differences relating to: ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Accelerated tax depreciation - 116,822,329
Provision for gratuity - (37,716,044)
Finance lease - 32,105,309
Tax losses - (96,506,749)
- 14,704,845
==================================================================================19.3. Taking into consideration the potential tax saving related to the tax loss carry forward there is no deferred tax liability as at June 30, 200720. TRADE AND OTHER PAYABLES ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Creditors (Note 20.1) 23,982,833 36,551,683
Accrued expenses (Note 20.1) 46,025,882 85,802,866
Advance from customers and others 829,685 1,267,265
Unclaimed Dividend 20,792,272 20,823,266
Due to Islamic Development Bank (Note 20.2) 25,960,000 25,960,000
Deposits (Note 20.3) 810,979 1,004,368
Withholding tax 276,509 307,687
Others 5,940,816 6,087,540
124,618,976 177,804,675
==================================================================================20.1. These includes amount due to following related parties:==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Creditors
Central Insurance Company Limited 65,835 -
Sach International (Pvt) Limited 644,930 2,789,228
Accrued expenses
Dawood Foundation 32,636 17,200
Dawood Corporation (Pvt) Limited 468,912 4,873,074
Central Insurance Company Limited 292,954 207,419
==================================================================================20.2. This represents preference share capital of one of the merging company namely Lawrencepur Woollen and Textile Mills Limited issued to Islamic Development Bank with right to redeem.The merging company had served notice to the Bank for redemption before the scheme of amalgamation was approved and as such the same has been classified as liability and redemption reserve has been created. 20.3. All deposits are re-payable on demand and no interest is payable thereon. 21. SHORT TERM BANK FINANCES-SECURED This represents running finance facilities of Rs. 1,490 million (2006 : Rs. 1,290 million) obtained from commercial banks and are secured against pledge of 3,985,000 shares (2006: 3,985,000 shares) of Sui Northern Gas Pipelines Limited and hypothecation of stock in trade. The rate of markup ranges from 0.25% to 1 .00% above monthly / quarterly KIBOR rate (2006: 0.25% to 1 .00%) per annum. =========================================================================================
Sanctioned Outstanding
Bank Amount Percentage Amount Security
Rs. in Millio mark up Rs. in Million
=========================================================================================
Bank Al Habib Limited 740 Kibor + 0.25% 12.748 Hypothecation of stock
MCB Bank Limited 500 Kibor + 1% 14.515 Pledge of SNGPL shares
Habib Metropolitan Bank L 250 Kibor + 1% 107.991 Hypothecation of stock
Total 1,490 135.254
=========================================================================================22. CONTINGENCIES AND COMMITMENTS22.1. Contingencies The Company is contingently liable against the guarantees and the counter guarantees amounting to Rs 36.73 million (2006: Rs 36.73 million). These are secured against guarantee margin, investment in NIT and lien over current account. The Collector of Central Excise and Sales Tax during the period from 1975 to 1986 has created various demands along with penalities aggregating to Rs.3.816 million. Upon the demand of the Collector of Customs and Central Excise the Company has submitted bank guarantees for each of the demand so raised. The company has preferred appeal before the various forums which resulted in reduction in penalty by 50% of the original demand. Upon the initiation of the recovery proceeding by the department concerned the department has recovered the amount by assignment of bank account of the Company. The Company is under appeal at various appellate forums for the recovery of the amount subjugated. The management of the Company is hopeful that it succeed in the appeal so made. 22.2. Commitments: The Company has letter of credit commitments for capital expenditures amounting to Rs Nil (2006: Rs. 97.78 million). The Company has letter of credit commitments for purchases amounting to Rs 1.33 million (2006: Rs 6.08 million) 23. SALES - NET ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Local 1,633,538,228 1,845,895,743
Export - 20,065,548
Trading goods 10,087,660 4,484,748
Sales Tax 462,905 219,784
Brokerage, commission and discount 13,564,158 8,873,772
(14,027,06 (9,093,556)
1,629,598,825 1,861,352,483
Transferred to discontinued operations
Sales - Local 409,917,930 -
Sales Tax (462,905) -
Brokerage, commission and discount (1,177,936 -
408,277,089 -
1,629,598,825 1,861,352,483
==================================================================================24. COST OF GOODS SOLD==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
RAW MATERIALS:
Opening inventory 264,062,538 330,904,991
Purchases 793,319,603 909,880,384
1,057,381,141 1,240,785,375
Less: Closing inventory (94,205,330) (264,062,538)
Raw materials consumed 963,176,811 976,722,837
OTHER COSTS:
Cloth and yarn purchased 2,322,579 230,638
Salaries, wages and allowances (Note 24.1) 232,877,101 214,285,897
Stores and spares consumed 63,587,855 82,696,334
Electricity, gas and water consumed 222,598,491 253,857,915
Yarn conversion cost 3,718,825 4,808,974
Depreciation (Note 4.4) 73,103,635 75,301,189
Insurance 12,120,02,6 10,958,508
Repair and maintenance 5,254,053 5,682,773
Rent, rates and taxes 2,231,076 2,537,733
Workers' welfare 4,738,147 3,405,725
Other expenses 4,776,743 5,203,038
1,590,505,342 1,635,691,561
Add: Opening work in process 93,957,445 107,400,527
Less: Closing work in process (105,117,156) (93,957,445)
COST OF PRODUCTION 1,579,345,631 1,649,134,643
Less: Transfer for donation to earthquake relief fund - 12,432,869
1,579,345,631 1,636,701,774
Add: Opening inventory of finished goods 361,163,774 482,310,775
Less: Closing inventory of finished goods (334,501,259) (361,163,774)
1,606,008,146 1,757,848,775
Cost of sales - Trading goods (Note 24.2) 5,981,649 3,293,980
1,611,989,795 1,761,142,755
Transferred to discontinued operations (451,552,487) -
==================================================================================24.1. This includes staff retirement benefits of Rs. 9,537,558/-(2006: Rs. 12,932,833/-)24.2. Cost of sales - Trading goods ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Opening inventory 4,100,911 -
Purchases 5,461,471 7,394,891
9,562,382 7,394,891
Less: Closing inventory 4,100,911 3,293,980
==================================================================================25. ADMINISTRATIVE AND GENERAL EXPENSES==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Salaries and allowances (Note 25.1) 44,353,031 42,936,969
Printing and stationary 3,083,312 2,802,600
Rent, rates and taxes 7,375,858 6,703,326
Electricity and gas 1,107,767 2,344,903
Conveyance and travelling 4,772,782 6,989,203
Postage, fax and telephone 2,822,686 4,340,884
Insurance 344,225 993,155
Repair and maintenance 783,663 1,037,529
Legal and professional charges (Note 25.2) 3,657,483 2,223,290
Fees and subscription 525,167 610,132
Advertisement - 66,000
Entertainment 572,774 794,662
Depreciation (Note 4.4) 1,403,863 1,253,015
Charity & donation (Note 25.3) 3,000 45,000
Other miscellaneous expenses 745,921 933,235
71,551,532 74,073,903
Transferred to discontinued operations (17,001,551) -
54,549,981 74,073,903
==================================================================================25.1. This includes staff retirement benefits of Rs. 2,986,031/- (2005: Rs.2,985,728/-)25.2. This includes: ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Audit fee 300,000 300,000
Review and other certification fee 60,000 60,000
360,00 360,000
==================================================================================25.3. None of the Directors of the Company or any of their spouses have any interest in or are otherwise associated with any of the recipients of donations made by the Company during the year.26. SELLING AND DISTRIBUTION EXPENSES ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Storage and forwarding charges 4,861,863 5,945,785
Salaries and allowances (Note 26.1) 10,444,731 10,771,214
Printing and stationery 913,826 1,055,914
Rent, rates and taxes 5,749,670 8,526,233
Electricity and gas 599,347 847,636
Conveyance and travelling 1,173,738 1,163,501
Postage, fax and telephone 839,383 706,017
Freight and Insurance 518,719 2,194,443
Repair and maintenance 464,872 311,504
Doubtful debts 10,950,735 -
Loading and unloading charges 72,033 70,631
Depreciation (Note 4.4) 847,857 540,032
Entertainment 153,613 226,489
Terminal tax and transportation charges 729,599 2,622,671
Advertisement charges 12,314,947 24,370,286
Packing charges 248,906 381,934
Other miscellaneous expenses 2,028,308 2,420,786
52,912,147 62,155,076
Transferred to discontinued operations (7,571,705) -
45,340,442 62,155,076
==================================================================================26.1. This includes staff retirement benefits of Rs. 620,508/- (2006:Rs.47,899/-)27. OTHER CHARGES ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Donation to earthquake relief fund - 12,432,869
Zakat 50,000 50,000
50,000 12,482,869
==================================================================================28. FINANCIAL CHARGES==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Markup on bank finances 38,404,131 60,763,870
Lease financial charges 6,121,169 8,403,529
Bank charges 1,277,533 2,007,042
Local L/C bill discount charges 4,499,343 4,668,639
50,302,176 75,843,080
Transferred to discontinued operations (15,186,464) -
35,115,712 75,843,080
==================================================================================29. OTHER INCOME==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
(i).Dividend Income
Sui Northern Gas Pipelines Ltd. 22,700,100 27,366,900
Sui Southern Gas Co. Ltd 71,903 82,965
National Investment Trust (NIT) 1,160,000 660,000
23,932,003 28,109,865
(ii).Profit / Interest Income
Profit / Interest on Call/Time/Security Deposits 653,029 1,166,452
Interest on Deposits with KESC/SSGC - 477,179
653,029 1,643,631
Profit on sale of fixed assets (Note 4.5) 304,761 13,122,602
Capital gain on sale of shares 1,417,769 7,363,522
Exchange gain 150,000 40,688
Sundry sales and receipts 4,147,783 824,757
Insurance Claim 817,803 -
Liabilities written back 38,546,660 -
69,969,808 51,105,065
Transferred to discontinued operations (10,685,934) -
59,283,874 51,105,065
==================================================================================30. RECONCILIATION OF TAX CHARGE FOR THE YEAR==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Tax on accounting profit 35.00% 35.00%
Tax effect of expenses that are not 27.70% -834.66%
deductible in determining taxable income
Tax effect of payments allowed as -224.80% 3312.18%
expenses in determining taxable income
Tax effect of income exempt from tax -0.60% 79.72%
Tax effect of applicability of lower rate of tax -3.56% 910.51%
Tax effect of minimum tax liability 184.15% -3943.94%
17.90% -441.19%
==================================================================================31. EARNINGS PER SHARE-BASIC AND DILUTED31.1. ==================================================================================
Continuing operations
==================================================================================
Net Profit after tax 158,940,397 227,527,079
Average ordinary shares in issue 42,441,867 35,075,924
Earnings per share-basic and diluted 3.74 5.90
==================================================================================31.2. Discontinued operations==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
Net loss after tax (74,390,570) -
Average ordinary shares in issue 42,441,867 -
Earnings per share-basic and diluted (1.75) -
==================================================================================32. EMOLUMENTS OF CHIEF EXECUTIVE AND EXECUTIVESThe aggregate amount charged in the accounts for the year for emoluments including all benefits were as under: ====================================================================
Chief Executive Executives Total
====================================================================
Remuneration 1,392,784 5,990,817 7,383,601
House rent allowance 473,890 2,100,790 2,574,680
Utilities 130,516 619,215 749,731
Other allowances 44,656 2,974,643 3,019,299
2007- Rupees 2,041,846 11,685,465 13,727,311
2006- Rupees 2,712,000 10,863,953 13,575,953
No. of persons 2007 1 17 18
1 11 12
====================================================================32.1. Chief Executive and some senior executives are provided with free use of cars owned and maintained by the company/employees and some other benefits in accordance with the company policy.33. TRANSACTIONS WITH RELATED PARTIES ==================================================================================
2007 2006
RUPEES RUPEES
==================================================================================
INSURANCE PREMIUM
Central Insurance Company Limited 13,109,868 11,887,335
RENTAL CHARGES
Dawood Foundation 5,002,938 10,791,960
STORAGE CHARGES
Dawood Corporation (Pvt) Limited 560,386 2,745,537
SALE
Sach International (Pvt) Limited 23,690,842 3,988,750
PURCHASE
Sach International (Pvt) Limited 7,973,115 7,302,461
==================================================================================33.1. Comparable uncontrol price method is used to determine the transaction price with related parties. The transaction with related party are in the normal course of business and have been entered on arm's length basis.34. INSTALLED CAPACITY AND PRODUCTION =======================================================
2007 2006
CapacityActual Capacity Actual
=======================================================
(in thousands) (in thousands)
=======================================================
Polyester yarn kgs. 1,400 538 1,400 1,351
Yarn kgs. 25,519 10,341 25,519 14,082
Cloth Mtrs. 1,063 5,060 2,035
=======================================================35. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES35.1. Financial Assets and Liabilities =============================================================================================================================
Interest/Markup Bearing Non interest/Markup Bearing
Less than Over Sub-Total Less than Over Total Total
one year one year one year one year 2007 2006
Rupees
=============================================================================================================================
Financial Assets
Long term Investments - - - - 2,013,209,948 2,013,209,948 2,567,083,797
Long term deposits - 6,421,591 6,421,591 - 14,400,748 20,822,339 27,391,294
Short term Investments - - 5,252,445 - 5,252,445 5,292,540
Trade debtors - - - 184,145,547 - 184,145,547 327,523,203
Loans and advances - - - 3,924,264 - 3,924.264 9,240,159
Deposits, prepayments & other
receivables 19,306,779 111,541,740 111,541,740 163,590,453
cash and bank balances - - 19,306,779 23,260,998 - 42,567,777 34,441,439
Financial Liabilities 19,306,779 6,421,591 25,728,370 328,124,994 2,027,610,696 2,381,464,060 3,134,562,885
Lease liabilities 22,614,052 23,520,113 46,134,165 - - 46,134,165 84,475,787
Short term bank finance 135,253,162 - 135,253,162 - - 135,253,162 466,819,984
Creditors, occurred & other liabili - - - 103,826,704 103,826,704 156,981,408
Dividend - - - 20,792,272 - 20,792,272 20,823,266
157,867,214 23,520,113 181,387,327 124,618.976 - 306,006,303 729,100,445
=============================================================================================================================35.2. Credit RiskCredit risk represents the accounting loss that would be recognized at the reporting date if counter parties failed completely to perform as contracted. Other than cash and bank balance, all other financial assets are subject to credit risk. The Company applied credit limits to its customers and does not have significant exposure to any individual customer. 35.3. Interest rate risk Interest rate risk arises from the possibility that changes in interest rates will effect the value of financial instruments. The Company is not exposed to any interest rate risk due to the fact that funds are borrowed at fixed market based rates. 35.4. Fair Values of financial instruments The carrying value of all the financial instruments reported in the financial statements approximate their fair value. This assessment is based on settlement! realisable value. 35.5. Liquidity risk Liquidity risk is the risk that an enterprise will encounter difficulty in raising funds to meet its commitments. Due to effective working capital management policy, the Company aims at maintaining flexibility in funding by keeping committed credit lines available. 36. AUTHORISATION OF FINANCIAL STATEMENTS AND APPROPRIATIONS These financial statements were authorised for issue on September 26, 2007 by the Board of Directors. The Board of Directors have proposed the issue of bonus shares in the ratio of 1:10 (one share for each ten held). 37. EVENTS AFTER THE BALANCE SHEET DATE As was detailed in note 1.4, subsequent to the balance sheet date the management has discontinued operations of unit 6at Landhi Mills as a result of which all the operations at Mills has been discontinued. 38. NUMBER OF EMPLOYEES Number of employees as at year end were 2,050 (2006: 3,999) 39. GENERAL 39.1. Previous year figures have been rearranged and reclassified, wherever necessary, for the purpose of comparison 39.2. Figures have been rounded off to the nearest rupee. |