| Rupali Polyester Ltd - 2005 |
============================================================================== BALANCE SHEET AS AT JUNE 30, 2005 ============================================================================== Rupees in thousand Notes 2005 2004 ============================================================================== EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES SHARE CAPITAL AUTHORISED: 35,000,000 Ordinary Shares of Rs 10 each 350,000 350,000 Issued, Subscribed and Paid-up 3 340,685 340,685 Reserves 4 1,681,888 1,635,888 2,022,573 1,976,573 NON-CURRENT LIABILITIES: Deferred Liabilities 5 126,928 132,536 CURRENT LIABILITIES: Trade and Other Payables 6 165,890 142,726 Mark-up Accrued 7 2 62 Short Term Borrowings 8 - - Current Portion of Liability against asset subject to finance lease 9 - 1,701 Taxation-net 10 37,510 - Dividends 11 613 528 204,015 145,017 Contingencies and commitments 12 2,353,516 2,254,126 ASSETS NON-CURRENT ASSETS: Property, Plant and Equipment 13 666,768 471,535 Long Term Investments 14 60,122 - Long Term Deposits and Prepayments 15 7,232 7,024 734,122 478,559 CURRENT ASSETS: Stores, Spares and Loose Tools 16 409,555 174,632 Stock-in-Trade 17 489,409 756,512 Trade Debts 18 7,618 13,951 Loans and Advances 19 23,541 8,953 Trade Deposits and Short Term Prepayment 20 5,629 5,081 Other Receivables 21 123,050 24,265 Taxation - net 10 - 24,455 Cash and Bank Balances 22 560,592 767,718 1,619,394 1,775,567 2,353,516 2,254,126 ============================================================================== ============================================================================== PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2005 ============================================================================== Rupees in thousand Notes 2005 2004 ============================================================================== Sales 23 3,649,631 3,210,297 Cost of Sales 24 3,378,752 2,868,514 Gross Profit 270,879 347 ,183 Selling and Distribution Expenses 25 10,098 9,381 Administrative and General Expenses 26 81,123 75,780 Other Operating Expenses 27 21,819 23,914 113,040 109,075 Other Operating Income 28 102,667 75,168 Profit from Operations 260,506 307,876 Finance Costs 29 1,785 3,161 Profit before Taxation 258,721 304,517 Taxation 30 76,447 116,113 Profit after Taxation 182,274 188,602 Basic Earnings per Share (Rupees) 31 5.35 5.54 ============================================================================== ============================================================================== CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2005 ============================================================================== Rupees in thousand Note 2005 2004 ============================================================================== CASH FLOW FROM OPERATING ACTIVITIES: Profit Before Taxation 258,721 304,715 ADD/(LESS) ADJUSTMENT FOR NON CASH CHARGES AND OTHER ITEMS: Depreciation 13.2 45,163 49,628 Amortisation of Deferred Income - (119) Adjustment/Amortisation of Long Term Deposits and Prepayments 15 3,978 3,670 Provision for Doubtful Receivables - 914 Staff Retirement Benefits - Gratuity 5.1.5 7,635 7,805 Mark-up/Interest Income 28 (30,863) (19,500) Remission of Liabilities 28 (172) (498) Profit on Disposal of Operating Fixed Assets 28 (824) (688) Profit on Sale of Capital Work-in-Progress 28 - (26,317) Exchange Gain 28 (219) (144) Mark-up on Short Term Borrowings 29 100 254 Bank Charges 29 1,629 2,383 Financial Charges on Leased Asset 29 56 524 26,483 17,912 EFFECT ON CASH FLOW DUE TO WORKING CAPITAL CHANGES (INCREASE)/DECREASE IN CURRENT ASSETS: Stores, Spares and Loose Tools (234,923) 491 Stock-in-Trade 267,103 (273,736) Trade Debts 6,333 326,757 Loans and Advances (14,588) 2,990 Trade Deposits and Short Term Prepayments 182 1,404 Other Receivables (98,785) (12,016) (74,678) 45,890 INCREASE / (DECREASE) IN CURRENT LIABILITIES: Trade and Other Payables 23,336 (58,489) (51,342) (12,599) Cash generated from Operations 233,862 310,028 Mark-up on Short Term Borrowings (1,729) (2,636) and Bank Charges Paid Income Tax Paid (22,434) (15,113) Mark-up/Interest Received 30,863 19,500 Staff Retirement Benefits - Gratuity Paid (5,291) (4,586) Net Cash Inflow from Operating Activities 235,271 307,193 ============================================================================== ============================================================================== CASH FLOW FROM INVESTING ACTIVITIES ============================================================================== Rupees in thousand Note 2005 2004 ============================================================================== Fixed Capital Expenditure (241,441) (13,744) Long Term Investments (60,122) - Long Term Deposits and Prepayments (4,916) (5,656) Proceeds from Sale of Operating Fixed Assets 1,869 38,624 Net Cash (Outflow) / Inflow from Investing Activities (304,610) 19,224 CASH FLOW FROM FINANCING ACTIVITIES: Payment of Lease Obligations (1,817) (2,996) Dividend Paid (136,189) (68,097) Net Cash Outflow from Financing Activities (138,006) (71,093) Net (Decrease)/Increase in Cash and Cash Equivalents (207,345) 255,324 Cash and Cash Equivalents at the Beginning of the Year 767,718 512,345 Effect of Exchange Rate Fluctuations 219 49 Cash and Cash Equivalents 32 560,592 767,718 at the End of the Year ============================================================================== ==============================================================================================================
Rupees in thousand
Ordinary Un-
Share Capital Revenue appropriated
Notes Capital Reserve Reserve Profit Total
==============================================================================================================
Balance as on July 1, 2003
as previously stated 340,685 71,490 1,364,125 11,671 1,787,971
Effect of change in accounting policy 11.1
Final dividend for the year ended
June 30, 2003 declared subsequent
to year end - - - 68,137 68,137
Balance as on July 1, 2003 as restated 340,685 71,490 1,364,125 79,808 1,856,108
Net Profit for the year ended June 30, 2004 - - - 188,602 188,602
Final Dividend for the year ended
June 30, 2003 @ 20% - - - (68,137) (68,137)
Transferred to Revenue Reserve - 60,000 (60,000) -
Balance as on June 30, 2004 as restated 340,685 71,490 1,424,125 140,273 1,976,573
Balance as on July 1, 2004
as previously stated 340,685 71,490 1,424,125 3,999 1,840,299
Effect of change in accounting policy 11.1
Final dividend for the year ended
June 30, 2004, declared subsequent
to year end - - - 136,274 136,274
Balance as on July 1, 2004 as restated 340,685 71,490 1,424,125 140,273 1,976,573
Net Profit for the year ended June 30, 2005 - - - 182,274 182,274
Final Dividend for the year ended
June 30, 2004 @ 40% - - - (136,274) (136,274)
Balance as on June 30, 2005 340,685 71,490 1,424,125 186,273 2,022,573
==============================================================================================================NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 20051. THE COMPANY AND ITS OPERATIONS 1.1. The RUPALI POLYESTER LIMITED was incorporated in Pakistan on May 24, 1980 under Companies Act 1913 (now Companies Ordinance, 1984) as a Public Limited Company and is quoted on the Karachi, Lahore and Islamabad Stock Exchanges. The registered office of the company is situated at 4th Floor, IEP Building, 97-B/D-1, Gulberg-III, Lahore. 1.2. The company's principal business is the production and sale of Polyester Products. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1. STATEMENT OF COMPLIANCE 2.1.1. These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984. Approved accounting standards comprise of such International Accounting Standards as notified under the provisions of the Companies Ordinance, 1984. Wherever, the requirements of the Companies Ordinance, 1984 or directives issued by the Securities and Exchange Commission of Pakistan (SECP) differ with the requirements of these standards, the requirements of the Companies Ordinance, 1984 or the requirements of the said directives take precedence. 2.1.2. During the year, the SECP substituted the Fourth Schedule to the Companies Ordinance, 1984 which is effective from financial year ending on or after July 5, 2004. This has resulted in the change in accounting policy pertaining to the recognition of dividends proposed subsequent to year end (note: 11). 2.2. ACCOUNTING CONVENTION These financial statements have been prepared under the historical cost convention, except for measurement of certain financial instruments at fair value and staff retirement benefits which have been recognised at present value. 2.3. STAFF RETIREMENT BENEFITS 2.3.1. DEFINED BENEFIT PLAN - GRATUITY The company operates an Unfunded Defined Gratuity Scheme for all its permanent employees who attain the minimum qualification period for entitlement to gratuity. The provision is made on the basis of actuarial recommendation to cover the obligation under the scheme for all employees eligible to gratuity benefits, Actuarial valuation is normally carried out once in every two years. The latest actuarial valuation for gratuity scheme was carried out as at June 30, 2005 (note 5.1). 2.3.2. DEFINED CONTRIBUTION PLAN - PROVIDENT FUND The company contributes to an Approved Provident Fund Scheme which covers all permanent employees. Equal contributions are made by the Company and Employees. Contribution is made by the Company at the rate of 8.33% of basic salary and cost of living allowance. During the year Rs 1.103 million (2004: Rs 1.009 million) has been recognised as an expense by the company. 2.4. COMPENSATED ABSENCES The company accounts for these benefits in the period in which the absences are earned. 2.5. PROVISIONS A provision is recognised in the balance sheet when the company has a legal or constructive obligation as a result of past event and it is probable that an out flow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. 2.6. BORROWINGS Loans and borrowings are recorded at the proceeds received. Financial charges are accounted for on an accrual basis and are disclosed as Mark-up Accrued to the extent of the amount remaining unpaid. All mark-up, interest and other charges on long term and short-term borrowings are charged to profit in the period in which they are incurred. 2.7. TRADE AND OTHER PAYABLES Liabilities for trade and other amounts payable are recognised and carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Company. 2.8. PROPERTY, PLANT AND EQUIPMENT 2.8.1. OWNED Property, Plant and Equipment except freehold land are stated at cost less accumulated depreciation and impairment loss, if any. Depreciation on operating fixed assets is calculated on reducing balance method. Rates of depreciation are disclosed in note 13.1. Depreciation on additions during the year to property, plant and equipment is charged for the full year irrespective of the date of addition and no depreciation is charged on disposals during the year. Impairment loss or its reversal, if any, is also charged to income. Where an impairment loss is recognised, the depreciation charge is adjusted in the future periods to allocate the asset's useful life. Major repairs and improvements are capitalised. Minor repairs and renewals are charged to income. The gain or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and the carrying amount of the asset is recognised as an income or expense. 2.8.2. TANGIBLE-ASSETS SUBJECT TO FINANCE LEASE These are stated at lower of present value of minimum lease payments under the lease agreements and the fair value of assets. Aggregate amount of obligation relating to leased assets subject to finance lease is accounted for at net present value of liabilities. The related obligation under the lease less financial charges allocated to future period are shown as a liability. The financial charges are allocated to accounting periods in a manner so as to provide a constant periodic rate of charge on the outstanding liability. In the case of sale and lease back transactions, any excess of sale proceeds over the carrying amount is deferred over the lease period. Assets so acquired are depreciated over the useful life of the assets on the reducing balance method at the rates given in note 13.1. 2.8.3. CAPITAL WORK-IN-PROGRESS Capital Work-in-Progress is stated at cost less any identified impairment loss. 2.9. IMPAIRMENT The carrying amounts of the company's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment loss. If such indications exist, the assets recoverable amount is estimated in order to determine the extent of impairment loss, if any. Impairment losses are recognised as expense in the profit and loss account. 2.10. LONG TERM INVESTMENTS Investment in Equity Instruments of Related Parties and Others Available for Sale Investments classified as available for sale are initially measured at cost, being the fair value of consideration given. At subsequent reporting dates, these investments are measured at fair value (quoted market price), unless fair value cannot be reliably measured. The investments for which a quoted market price is not available, are measured at cost as it is not possible to apply any other valuation methodology. Realised and unrealised gains and losses arising from changes in fair value are included in the net profit or loss for the period in which these arise. All purchases and sales of investments are recognised on the trade date which is the date that the company commits to purchase or sell the investment. Cost of purchase includes transaction cost. At subsequent reporting dates, the company reviews the carrying amounts on the investments to assess whether there is any indication that such investments have suffered an impairment loss. If any such indication exists, the recoverable amount is estimated in order to determine the extent of the impairment loss if any. Impairment losses are recognised as expense. Where an impairment loss subsequently reverses, the carrying amount of the investment is increased to the revised recoverable amount but limited to the extent of initial cost of the investment. A reversal of the impairment loss is recognised in income. 2.11. LONG TERM DEPOSITS AND PREPAYMENTS These are stated at cost which represents the fair value of consideration given. 2.12. STORES, SPARES AND LOOSE TOOLS Stores, Spares and Loose Tools are valued at moving average cost. Items-in-transit are valued at cost comprising invoice value plus other charges paid thereon. Provision is made for slow moving and obsolete items. 2.13. STOCK-IN-TRADE Raw and Packing Materials are stated at cost. Costs incurred in bringing Raw and Packing Materials to their present location and condition are accounted for at purchase cost using the moving average basis. Items-in-transit are valued at cost comprising invoice value plus other charges paid thereon. Work-in-process is valued at average cost. Finished goods are valued at lower of average cost and net realisable value. Cost includes prime cost and appropriate portion of production overheads. Provision is made for slow moving and obsolete items. Net realisable value signifies the estimated selling price in the ordinary course of business less costs necessary to be incurred in order to make a sale. 2.14. TRADE DEBTS AND OTHER RECEIVABLES Trade debts originated by the Company are recognised and carried at original invoice amount less provision for any uncollectible amounts. Provision for doubtful debt is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. Other receivables and receivables from related parties are recognised and carried at cost. 2.15. TAXATION 2.15.1. CURRENT Provision for current taxation is based on current rates of tax after taking into account tax credits and rebates, if any, under the Income Tax Ordinance, 2001. 2.15.2. DEFERRED Deferred tax is accounted for using the balance sheet liability method in respect of all temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of the taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and tax credits can be utilised. Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse based on tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited in the income statement, except in the case of items credited or charged to equity in which case it is included in equity. 2.16. CASH AND BANK BALANCES Cash in hand and at bank are carried at cost. 2.17. REVENUE RECOGNITION Revenue from sales is recognised on despatch of goods to customers. Return on deposits is accrued on a time proportion basis by reference to the principal outstanding and the applicable rate of return. 2.18. FOREIGN CURRENCY TRANSLATION Transactions denominated in foreign currencies are translated to Pak. Rupees at the foreign exchange rate approximating those prevailing at the date of transaction. Monetary assets and monetary liabilities denominated in foreign currencies are established using the rate of exchange prevailing at the balance sheet date except for liabilities covered under forward exchange contract, if any, which are translated at the contractual rate. Gain or loss in translation at the year end has been taken to income. 2.19. FINANCIAL ASSETS AND LIABILITIES All the financial assets and financial liabilities are recognised at the time when the Company becomes a party to the contractual provisions of the instrument. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. Any gain or loss on derecognition of the financial assets and financial liabilities is included in current year income. 2.20. OFFSETTING OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES A financial asset and a financial liability is offset and the net amount is reported in the balance sheet if the Company has a legally enforceable right to set-off the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. 2.21. CASH AND CASH EQUIVALENTS Cash and cash equivalents are defined as cash in hand, cash at banks, short-term finances and short-term highly liquid investments that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. For the purpose of cash flow statement, cash and cash equivalents consist of cash in hand and at banks net off short-term finances. 2.22. TRANSACTION WITH RELATED PARTIES All transactions with related parties are priced on an arm's length basis. The prices are determined in accordance with the methods prescribed in the Companies Ordinance, 1984. 2.23. BORROWING COST Mark-up, interest and other charges on long-term borrowings, if any, are capitalised up to the date of commissioning of the related plant and machinery, acquired out of the proceeds of such long-term borrowings. All other mark-up, interest and other charges are charged to profit. 3. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL ==============================================================================
Number of shares Rupees in thousand
2005 2004 2005 2004
==============================================================================
9,690,900 9,690,900 Ordinary Shares of Rs 10 each 96,909 96,909
fully paid in cash
19,933,895 19,933,895 Ordinary Shares of Rs 10 each
issued against
non-repatriable investment 199,339 199,339
4,443,719 4,443,719 Ordinary Shares of Rs 10 each 44,437 44,437
34,068,514 34,068,514 issued as Bonus Shares 340,685 340,685
==============================================================================4. RESERVES==============================================================================
Rupees in thousand
2005 2004
==============================================================================
CAPITAL RESERVES:
- Share Premium 71,490 71,490
REVENUE RESERVE:
- General 1,424,125 1,424,125
- Un-appropriated Profit 186,273 140,273
1,610,398 1,564,398
1,681,888 1,635,888
==============================================================================5. DEFERRED LIABILITIES==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
Staff Retirement Benefits - Gratuity 5.1 41,790 39,446
Deferred Taxation 5.2 85,138 93,090
126,928 132,536
==============================================================================5.1. STAFF RETIREMENT BENEFITS - GRATUITYDefined Benefit Plan 5.1.1. GENERAL DESCRIPTION The scheme provides for terminal benefits for all its permanent employees who attain the minimum qualifying period for entitlement to gratuity. Annual charge is based on actuarial valuation conducted in accordance with IAS-19 "Employee benefits" as of June 30, 2005, using the Projected Unit Credit Method. 5.1.2. PRINCIPAL ACTUARIAL ASSUMPTIONS Following are a few important actuarial assumptions used in the valuation: ==============================================================================
2005 2004
==============================================================================
Discount rate (%) per annum 9 8
Expected rate of salary increase 8 7
in future years (%) per annum
Average expected remaining working 11 13
life time of employees (years)
==============================================================================5.1.3. RECONCILIATION OF PAYABLE TO DEFINED BENEFIT PLAN==============================================================================
Rupees in thousand
2005 2004
==============================================================================
Present value of defined benefit obligation 40,967 39,446
Unrecognised actuarial losses 823 -
Net liability recognised in the Balance Sheet 41,790 39,446
==============================================================================5.1.4. MOVEMENT IN LIABILITY RECOGNISED IN THE BALANCE SHEET==============================================================================
Rupees in thousand
Note 2005 2004
==============================================================================
Present value of defined benefit
obligation at the beginning of the year 39,446 36,227
Charge for the year 5.1.5 7,635 7,805
Payments made during the year (5,291) (4,586)
Present value of defined benefit
obligation at the end of the year 41,790 39,446
==============================================================================5.1.5. CHARGE FOR THE YEAR==============================================================================
Rupees in thousand
2005 2004
==============================================================================
Current Service Cost 4,479 4,894
Interest Cost 3,156 2,911
7,635 7,805
==============================================================================5.1.6. CHARGE FOR THE YEAR HAS BEEN ALLOCATED AS FOLLOWS==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
Cost of Sales 24.1 5,421 5,466
Selling and Distribution Expenses 25.1 111 117
Administrative and General Expenses 26.1 2,103 2,222
7,635 7,805
==============================================================================5.2. DEFERRED TAXATIONDeferred Tax Liability on Taxable Temporary Difference: ==============================================================================
Rupees in thousand
2005 2004
==============================================================================
Tax Depreciation Allowance 85,138 93,090
==============================================================================6. TRADE AND OTHER PAYABLES==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
Creditors 105,616 72,260
Due to Associated Companies 6.1 1,736 1,033
Accrued Liabilities 29,087 31,795
Advances from Customers 1,281 635
Customers Deposits - Payable 655 477
on Demand - Interest free
Retentions 1,340 7
Payable to Provident Fund 311 275
Income Tax Deducted at Source 156 187
Sales Tax Payable - 8,166
Workers' Profit Participation Fund 6.2 14,518 16,999
Workers' Welfare Fund 10,397 10,706
Other Payables 793 186
165,890 142,726
==============================================================================6.1. DUE TO ASSOCIATED COMPANIESAmount due to associated companies, comprises of: ==============================================================================
Rupees in thousand
2005 2004
==============================================================================
Rupafil Limited - 344
Rupali Nylon (Pvt) Limited 1,736 689
1,736 1,033
==============================================================================6.2. WORKERS' PROFIT PARTICIPATION FUND==============================================================================
Rupees in thousand
2005 2004
==============================================================================
Balance at the beginning of the year 16,999 7,181
Allocation for the year 13,876 16,414
30,875 23,595
Less: Amount paid to the trustees of the fund 4,280 5,292
Deposited with the Government 12,077 1,304
16,357 6,596
Balance at the end of the year 14,518 16,999
==============================================================================7. MARK UP ACCRUED==============================================================================
Rupees in thousand
2005 2004
==============================================================================
- on Running Finances Utilised 2 2
under Mark-up arrangements
- on Lease - 60
2 62
==============================================================================8. SHORT TERM BORROWINGS==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
Secured - From Banking Companies
Running Finances Utilised 8.1, 8.2 & 8.4 - -
under Mark-up arrangements
Term Finances Utilised 8.1 & 8.3 - -
under Mark-up arrangements - -
==============================================================================8.1. The total facilities aggregating Rs 955.000 million (2004: Rs 1,055.000 million) available from various commercial banks.These are secured by way of hypothecation charge over current assets to the extent of Rs 1,370.621 million and promissory notes valuing Rs 966.224 million and as at June 30, 2005 the entire outstanding amount has been adjusted. 8.2. The rate of mark-up for these facilities ranges between 3.00% to 7.50% (2004: 3.00% to 10.00%). 8.3. The rate of mark-up for these facilities 1.98% (2004: 1.98%). 8.4. The aggregate facility available for opening letters of credit from various commercial banks amount to Rs 1,088.000 million (2004: Rs 1,751.300 million) of which Rs 256.355 million were utilised at June 30, 2005 (2004: Rs 247.973 million). 9. LIABILITY AGAINST ASSET SUBJECT TO FINANCE LEASE FINANCE LEASE LIABILITIES ARE PAYABLE AS FOLLOWS ==================================================================================================
Rupees in thousand
2005 2004
Minimum Financial Minimum Financial
Lease Charges for Principal Lease Charges for Principal
Payments Future Period Outstanding Payments Future Period Outstanding
==================================================================================================
Less than one year - - - 1,757 56 1,701
Between one and five years - - - - - -
- - - 1,757 56 1,701
==================================================================================================9.1. The minimum lease payments under the lease agreement were payable in 12 equal quarterly instalments commencing from January 15, 2002.The present value of minimum lease payments had been discounted at an implicit interest rate of 17% to arrive at their present value. Taxes, Repairs and Insurance costs were to be borne by the company. The company has purchased the leased asset at the end of lease period. 10. TAXATION - NET ==============================================================================
Rupees in thousand
2005 2004
==============================================================================
Advance Tax 61,476 137,996
Provision for Taxation (98,986) (113,541)
(37,510) 24,455
==============================================================================The income tax assessment of the Company has been finalised up to tax year 2004 (accounting year ended June 30, 2004) and adequate provisions have been made in these financial statements for the year ended June 30, 2005 (Tax Year 2005).11. DIVIDENDS ==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
Unclaimed 613 528
Proposed Final 11.1 & 11.2 - -
613 528
==============================================================================11.1.The company, effective from the current year, has not recognised the final dividend, proposed subsequent to year end, as a liability to comply with the substituted Fourth Schedule to the Companies Ordinance, 1984 as referred to note 2.1.2. Such a change in policy has been accounted for retrospectively and comparative financial statements have been restated in accordance with the recommended bench mark treatment of IAS-8, "Accounting Policies, Changes in Accounting Estimates and Errors". Had there been no change, the unappropriated profit and the current liabilities for the year ended June 30, 2005 would have been lower and higher respectively by Rs 102.206 million (2004: Rs 136.274 million). 11.2. The Board of Directors have proposed a final dividend for the year ended June 30, 2005 of Rs 3/- per share, amounting to Rs 102.206 million at their meeting held on September 19, 2005 for approval of the members at the annual general meeting to be held on October 29, 2005. These financial statements do not reflect this dividend payable as explained in note 11.1. 12. CONTINGENCIES AND COMMITMENTS 12.1. CONTINGENCIES 12.1.1. Guarantees issued to different organisations in the normal course of business amounted to Rs 69.642 million (2004: Rs 4.567 million). 12.1.2. Outstanding guarantees given on behalf of Related Parties amounted to Rs 6.018 million (2004: Rs Nil). 12.2. COMMITMENTS 12.2.1. Capital expenditure commitments outstanding as at June 30, 2005 amounted to Rs 6.307 million (2004: Rs Nil). 12.2.2. Commitments against irrevocable letters of credit as at June 30, 2005 amounted to Rs 256.355 million (2004: Rs 247.973 million). 13. PROPERTY, PLANT AND EQUIPMENT ==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
Operating Fixed Assets 13.1 422,077 461,304
Capital Work-in-Progress 13.4 244,691 10,231
666,768 471,535
==============================================================================13.1. OPERATING FIXED ASSETS13.1.1. OWNED ===================================================================================================================
COST Rupees in thousand
DEPRECIATION
Additions/ Book Value
As at (Deletions)/ As at Rate As at For the year Accumulated As at
01.07.04 (Transfers) 30.06.05 % 01.07.04 (deletions) upto 30.06.05 30.06.05
===================================================================================================================
Freehold Land 21,172 - 21,172 - - - - 21,172
Building
- Factory on
Freehold Land 113,443 438 113,881 10 84,567 2,932 87,499 26,382
- Office on
Freehold Land 13,865 - 13,865 5 4,661 460 5,121 8,744
Roads 4,312 - 4,312 5 2,365 97 2,462 1,850
Plant & Machinery 1,614,879 - 1,614,879 10 1,252,636 36,224 1,288,860 326,019
Furniture & Fittings 14,378 648 15,026 10 7,540 749 8,289 6,737
Vehicles 30,005 1,783 35,064 20 23,676 2,227 26,154 8,910
7,000* 3,416*
(3,724) (3,165)
Office Equipments 48,565 2,169 49,714 10 28,457 2,192 29,990 19,724
(1,020) (659)
Other Assets 2,476 1,942 4,217 10 1,473 282 1,678 2,539
(201) (77)
1,863,095 13,980 1,872,130 1,405,375 48,579 1,450,053 422,077
(4,945) (3,901)
===================================================================================================================13.1.2. ASSET SUBJECT TO FINANCE LEASE===================================================================================================================
COST Rupees in thousand
DEPRECIATION
Additions/ Book Value
As at (Deletions)/ As at Rate As at For the year Accumulated As at
01.07.04 (Transfers) 30.06.05 % 01.07.04 (deletions) up to 30.06.05 30.06.05
===================================================================================================================
Vehicles 7,000 (7,000)* - 20 3,416 (3,416)* - -
2005 1,870,095 6,980 1,872,130 1,408,791 45,163 1,450,053 422,077
(4,945) (3,901)
2004 1,857,950 12,323 1,870,095 1,359,285 49,628 1,408,791 461,304
(178) (122)
=================================================================================================================== * Represents transfers from leased assets to owned assets.13.2. THE DEPRECIATION CHARGE FOR THE YEAR HAS BEEN ALLOCATED AS FOLLOWS ==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
Cost of Sales 24 39,535 43,672
Selling and Distribution Expenses 25 281 298
Administrative and General Expenses 26 5,347 5,658
45,163 49,628
==============================================================================13.3. DISPOSAL OF OPERATING FIXED ASSETSThe following assets disposed off during the year: =================================================================================================================================
Rupees in thousand
Accumulated Book Sale Gain/ (Loss) Mode of
Particulars of Assets Cost Depreciation Value Proceeds on Sale Disposal Particulars of Buyers
=================================================================================================================================
VEHICLES:
Toyota Corolla 40 38 2 150 148 Insurance Claim received
Claim from New Jubilee Insurance Co.
Toyota Fork Lifter 136 134 2 110 108 Negotiation M/s. Hasnain Crane Works,
Farooqabad Bund Road
Daroghawala Lahore
Suzuki FX 104 102 2 60 58 Negotiation Mr Muhammad Khalil S./O
Muhammad Shafi H#9/15-E
Mohallah Peer Colony,
2 Walton Road Lahore
Trailer 3,250 2,705 545 426 (119) Negotiation Al-Amin Enterprises D-9/3
Salmina Bungalows, Park Lane,
Block-5, Clifton, Karachi
Nissan Pick-Up 120 118 2 141 139 Negotiation Mr Mir Alam Khan S/O
Mr Jalat Khan R/O Mohalla
Sharria KheI, Gojar Garhi,
Teshil Takht Bhai, Distt., Mardan
Nissan Sunny 37 34 3 300 297 Negotiation Mr Muhammad Shakeel S/O
M. Shafi R/O Chak#55/4 R,
Tehsil & Distt., Sahiwal
Toyota Corolla 37 34 3 460 457 Negotiation Mr Muhammad Bashir S/O
M. Rasheed R/O House # 13
Street Main Bazar Hameedpura
Fateh Garh The., Lahore
Office Equipments
3 Ups-(Emerson Ap 176, 961 616 345 100 (245) Negotiation M/s. Omega Computers
Lie Ap 210 & Emerson Ap 161) 38-L, House #4 Mini Market
Gulberg II, Lahore
Card Punching Machine 31 23 8 0 (8) Salvaged
Seikosha QR. 725
Air Conditioner 19 13 6 0 (6) Salvaged
18000 BTU Complete
Electric Water Cooler 9 7 2 0 (2) Salvaged
OTHER ASSETS:
13 Nos Weapons (8 D/B.G. 46 39 7 6 (1) Negotiation Buksh Elahee & Co 8, Dyalsing
And 5.7mm Rifles) Mansion, The Mall Lahore
4 Nos 7mm & 2 Nos 22mm 39 33 6 3 (3) Negotiation Buksh Elahee & Co 8, Dyalsing
Mansion, The Mall Lahore
Two Weapons 6 5 1 2 1 Negotiation Hasan Khan Arms & Ammunition
Dealers Near Caltex Petrol Pump,
Ravi Road Lahore
Pump Action 110 - 110 110 - Negotiation Rupafil Limited, 4th Floor, IEP Bldg.
97-B/D-1, Gulberg III, Lahore
2005 4,945 3,901 1,044 1,868 824
2004 178 122 56 744 688
=================================================================================================================================13.4. CAPITAL WORK-IN-PROGRESS==============================================================================
Rupees in thousand
2005 2004
==============================================================================
Land and Land Development - at cost 6,173 6,173
Building and Civil Works 33,661 3,549
Plant and Machinery 204,423 -
Furniture and Fittings 16 227
Office Equipments 203 -
Other Assets 3 7
Capital Stores 212 275
244,691 10,231
==============================================================================14. LONG TERM INVESTMENTS==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
AVAILABLE FOR SALE
THESE REPRESENT THE LONG TERM INVESTMENTS IN:
Related Parties 14.1 200 -
Others 14.2 59,922 -
60,122 -
==============================================================================14.1. RELATED PARTIES==============================================================================
Rupees in thousand
Note 2005 2004
==============================================================================
Associated Company-Unquoted
Swat HydroPower Limited 19,988
(2004: Nil) fully paid Ordinary Shares of
Rs 10 each.
Equity held 40% (2004: Nil) 14.1.1 200 -
==============================================================================14.1.1. The company has not commenced its operations and accordingly no Profit and Loss Account has been prepared.The company's share of the net assets of Swat HydroPower Limited, based on the unaudited balance sheet as at June 30, 2005 was Rs 0.800 million. 14.2. OTHERS-UNQUOTED ==============================================================================
Rupees in thousand
Note 2005 2004
==============================================================================
World Bridge Connect (Pvt) Limited
1,469,659 (2004: Nil) fully paid
Ordinary Shares of Rs 40.77 each.
Equity held 10.689% (2004: Nil) 14.2.1 59,922 -
==============================================================================14.2.1. The company has not commenced its operations and accordingly no financial statements have been prepared.15. LONG TERM DEPOSITS AND PREPAYMENTS ==============================================================================
Rupees in thousand
Note 2005 2004
==============================================================================
Security Deposits 3,575 3,464
Prepaid Rent 8,053 7,226
Less: Current Portion 20 4,396 3,666
3,657 3,560
7,232 7,024
==============================================================================16. STORES, SPARES AND LOOSE TOOLS==============================================================================
Rupees in thousand
2005 2004
==============================================================================
STORES:
- In Hand 64,699 39,187
- In Transit 2,988 91
67,687 39,278
SPARES:
- In Hand 318,626 126,016
- In Transit 20,008 6,273
338,634 132,289
LOOSE TOOLS:
- In Hand 3,234 3,065
409,555 174,632
==============================================================================17. STOCK-IN-TRADE==============================================================================
Rupees in thousand
2005 2004
==============================================================================
RAW AND PACKING MATERIALS - AT COST:
- In Hand 161,444 100,357
- In Transit 147,297 387,946
308,741 488,303
Work-in-Process 33,905 23,490
Finished Goods 146,763 244,719
489,409 756,512
==============================================================================18. TRADE DEBTS==============================================================================
Rupees in thousand
2005 2004
==============================================================================
UNSECURED - CONSIDERED GOOD:
- Others 7,618 13,951
==============================================================================19. LOANS AND ADVANCES==============================================================================
Rupees in thousand
Note 2005 2004
==============================================================================
LOANS-CONSIDERED GOOD
LOANS TO STAFF:
- Executives 19.1 440 280
- Other Employees 946 777
1,386 1,057
ADVANCES-CONSIDERED GOOD
ADVANCES TO:
- Staff Against Expenses 389 399
- Suppliers and Contractors 20,936 3,437
- Associated Companies 19.2 600 -
21,925 3,836
Margin on Letters of Credit 230 4,060
23,541 8,953
==============================================================================19.1. RECONCILIATION OF CARRYING AMOUNT OF LOANS TO EXECUTIVES==============================================================================
Rupees in thousand
2005 2004
==============================================================================
Opening balance 280 155
Transferred to executives during the year 400 500
Disbursements during the year (240) (375)
160 125
Closing balance 440 280
==============================================================================19.1.1. The maximum aggregate amount of loans and advances due from executives at the end of any month during the year was Rs 0.522 million (2004: Rs 0.635 million).19.2. This represents advance given to Swat HydroPower Limited for issue of shares. 19.2.1. The maximum aggregate amount due from Associated Companies at the end of any month during the year was Rs 0.600 million (2004: Rs Nil). 20. TRADE DEPOSITS AND SHORT TERM PREPAYMENTS ==============================================================================
Rupees in thousand
Note 2005 2004
==============================================================================
DEPOSITS-CONSIDERED GOOD:
Margin on Bank Guarantees 265 265
PREPAYMENTS-CONSIDERED GOOD:
Prepaid Insurance 31 88
Current portion of Prepaid Rent 15 4,396 3,666
Prepaid Rent of Port Qasim 36 -
Letters of Credit 454 576
Other Prepayments 447 486
5,629 5,081
==============================================================================21. OTHER RECEIVABLES==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
CONSIDERED GOOD:
Export Rebate Receivable 1,409 850
Due from Associated Companies 21.1 10,474 -
Due from Related Parties 21.2 5,727 -
Transit Pass Fee Refundable from KMC Karachi 142 142
Insurance Claim Receivable 4,356 742
Custom Duty Refundable 21.3 65,861 -
Others 424 7,347
88,393 9,081
CONSIDERED DOUBTFUL:
Sales Tax Refundable 86,096 66,623
Less: Provision for Doubtful Receivable 21.4 51,439 51,439
34,657 15,184
Investment in Rupali Power (Pvt) Ltd 21.5 45,000 45,000
Less: Provision for Doubtful Receivable 45,000 45,000
- -
123,050 24,265
==============================================================================21.1. The maximum aggregate amount due from Associated Companies at the end of any month during the year was Rs, 72.962 million (2004: Rs 7.103 million).21.2. The maximum aggregate amount due from Related Parties at the end of any month during the year was Rs 16.197 million (2004: Rs Nil). 21.3. This includes an amount of Rs 34.758 million in respect of custom duty refundable on the inventory existed as at June 30, 2005 of Pure Terephthalic Acid (PTA). 21.4. This includes provision for doubtful receivable to the tune of Rs 48.822 million (2004: Rs 48.822 million) which has been created towards payments made under protest to Sales Tax Department to avail amnesty offered vide SRO 575(I)/98 dated 12.06.98 and SRO 679(I)/99 dated 12.06.99. 21.5. This amount represents investment in performance bond provided to Private Power and Infrastructure Board (PPIB), Government of Pakistan, on behalf of Rupali Power (Pvt) Ltd. The Performance Bond was encashed by PPIB and the matter is in litigation with Government of Pakistan. 22. CASH AND BANK BALANCES ==============================================================================
Rupees in thousand
2005 2004
==============================================================================
CASH IN HAND:
- Local Currency 422 268
- Foreign Currency 259 112
681 380
BALANCE WITH BANKS IN:
- Current Accounts 2,693 4,347
- PLS Accounts
- Local Currency 555,865 755,571
- Foreign Currency 1,353 7,420
559,911 767,338
560,592 767,718
==============================================================================22.1. The balances in PLS accounts carry mark-up rate ranging between 3.00% to 7.00% (2004: 3.00% to 3.50%) for local currency and 0.50% to 1.00% (2004: 0.50% to 1.00%) for foreign currency.22.2. Cash at banks in PLS accounts include US $ 22,729.00 (2004: US $128,033.77) and Pound Sterling 0.15 (2004: Pound Sterling 0.15). 23. SALES ==============================================================================
Rupees in thousand
2005 2004
==============================================================================
GROSS SALES:
-Local 4,121,369 3,745,390
-Export 16,677 44,519
Export Rebate 1,409 4,169
4,139,455 3,794,078
LESS:
Sales Return & Allowances - 107
Sales Tax 478,545 573,276
Discount on - Local Sales 10,949 10,318
Commission on - Export Sales 330 80
489,824 583,781
3,649,631 3,210,297
==============================================================================24. COST OF SALES==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
Raw and Packing Materials Consumed 2,714,294 2,310,417
Stores and Spares Consumed 75,288 88,287
Salaries, Wages and Amenities 24.1 92,999 94,038
Fuel and Power 335,298 306,798
Repair and Maintenance 21,895 24,697
Running and Maintenance of Vehicles 5,094 5,051
Insurance 5,145 5,009
Depreciation 13.2 39,535 43,672
Rent, Rates and Taxes 653 501
Other Expenses 1,010 1,598
3,291,211 2,880,068
Add: Opening Work-in-Process 23,490 16,328
Less: Closing Work-in-Process 33,905 23,490
3,280,796 2,872,906
Add: Opening Finished Goods 244,719 240,327
Less: Closing Finished Goods 146,763 244,719
3,378,752 2,868,514
==============================================================================24.1. Salaries, Wages and Amenities include Rs 5.421 million (2004: Rs 5.466 million) in respect of staff retirement benefits.25. SELLING AND DISTRIBUTION EXPENSES ==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
Salaries, Wages and Amenities 25.1 1,719 1,510
Rent, Rates and Taxes 205 191
Electricity, Gas and Water Charges 170 180
Postage, Telephone and Telex 179 586
Printing and Stationery 117 98
Books and Subscription 14 17
Running and Maintenance of Vehicles 75 73
Repair and Maintenance 59 92
Legal and Professional Charges 896 165
Travelling Expenses 312 272
Entertainment 41 109
Insurance 22 30
Sales Promotion 59 59
Depreciation 13.2 281 298
Freight and Forwarding 5,218 3,949
Provision for Doubtful Receivables - 255
Export Expenses 731 1,497
10,098 9,381
==============================================================================25.1. Salaries, Wages and Amenities include Rs 0.111 million (2004: Rs 0.117 million) in respect of staff retirement benefits.26. ADMINISTRATIVE AND GENERAL EXPENSES ==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
Salaries, Wages and Amenities 26.1 31,919 32,538
Directors' Remuneration 2,553 2,468
Rent, Rates and Taxes 3,902 3,630
Electricity, Gas and Water Charges 3,230 3,415
Postage, Telephone and Telex 3,412 11,134
Printing and Stationery 2,230 1,868
Books and Subscription 271 331
Running and Maintenance of Vehicles 1,421 1,377
Repair and Maintenance 1,1 28 1,741
Legal and Professional Charges 17,021 3,141
Travelling Expenses 5,925 5,164
Entertainment 771 2,061
Insurance 411 571
Advertisement 1,083 456
Depreciation 13.2 5,347 5,658
Miscellaneous Expenses 499 227
81,123 75,780
==============================================================================26.1. Salaries, Wages and Amenities include Rs 2.103 million (2004: Rs 2.222 million) in respect of staff retirement benefits.27. OTHER OPERATING EXPENSES ==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
Workers' Profit Participation Fund 13,876 16,414
Workers' Welfare Fund 4,921 7,145
Auditors' Remuneration 27.1 262 255
Donations 27.2 2,760 100
21,819 23,914
==============================================================================27.1. AUDITORS' REMUNERATION==============================================================================
Rupees in thousand
2005 2004
==============================================================================
Audit Fee 150 150
Certification and Review 40 105
Taxation Services 72 -
262 255
==============================================================================27.2. Recipients of donations do not include any donee in whom a director or his spouse had any interest.28. OTHER OPERATING INCOME ==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
Scrap, Waste and Other Sales - Net 28.1 30,531 12,999
Mark-up / Interest Income 28.2 30,863 19,500
Custom Duty Refundable 34,758 -
Mark-up Recovered from Rupafab Limited - 10,715
MEG Handling Income 5,300 4,188
Remission of Liabilities 172 498
Amortisation of Deferred Income - 119
Profit on Disposal of Operating Fixed Assets 13.3 824 688
Profit on Sale of Capital Work-in-Progress - 26,317
Exchange Gain 219 144
102,667 75,168
==============================================================================28.1. SCRAP, WASTE AND OTHER SALES - NET==============================================================================
Rupees in thousand
2005 2004
==============================================================================
Gross Sales 35,052 15,175
Less: Sales Tax 4,521 2,176
30,531 12,999
==============================================================================28.2. MARK-UP / INTEREST INCOME==============================================================================
Rupees in thousand
2005 2004
==============================================================================
Interest Income on Bank Accounts 30,484 19,349
MARK-UP ON:
- Credit Sales (Net) 281 28
- Staff Loans 98 123
30,863 19,500
==============================================================================29. FINANCE COSTS==============================================================================
Rupees in thousand
2005 2004
==============================================================================
Mark-up on Short Term Borrowings 100 254
Bank Commission and Other Charges 1,629 2,383
Financial Charges on Leased Asset 56 524
1,785 3,161
==============================================================================30. TAXATION==============================================================================
Rupees in thousand
2005 2004
==============================================================================
CURRENT:
- for the year 97,080 111,915
- for prior years (12,681) 11,872
84,399 123,787
Deferred (7,952) (7,674)
76,447 116,113
==============================================================================30.1. NUMERICAL RECONCILIATION BETWEEN THE APPLICABLE TAX RATE AND AVERAGE EFFECTIVE TAX RATE IS AS FOLLOWS==============================================================================
% %
==============================================================================
Applicable Tax Rate 35.00 35.00
Effect of Change in Prior Years' Tax (4.90) 3.90
Effect of Change in Deferred Tax (3.07) (2.52)
Tax effect of Expenses that are not
deductible in determining Taxable Profit 2.52 1 .73
(5.45) 3.11
Average Effective Tax Rate 29.55 38.11
==============================================================================31. EARNINGS PER SHARE==============================================================================
Note Rupees in thousand
==============================================================================
There is no dilutive effect on Earnings
Per Share which is based on profit.
for the year after Taxation
attributable to ordinary shareholders 182,274 188,602
Weighted Average number
of Ordinary Shares in Issue 3 34,068,514 34,068,514
Basic Earnings Per Share (Rupees) 5.35 5.54
==============================================================================32. CASH AND CASH EQUIVALENTS==============================================================================
Rupees in thousand
Notes 2005 2004
==============================================================================
Cash and Bank Balances 22 560,592 767,718
Short Term Borrowings 8 - -
560,592 767,718
==============================================================================33. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES33.1. INTEREST/MARK-UP/PROFIT RATE RISK Interest / mark-up / profit rate risk arises from the possibility that changes in interest / mark-up / profit rates will affect the value of financial instruments. In respect of income earning financial assets and interest / mark-up / profit bearing financial liabilities, the following table provides information about the exposure of the Company to interest / mark-up / profit rate risk at the balance sheet date based on contractual re-pricing or maturity dates, whichever is earlier. ============================================================================================================================
2005 Rupees in thousand
INTEREST BEARING NON INTEREST BEARING
Maturity Maturity Maturity Maturity
Maturity more than more Maturity more than more
up to one year than Sub up to one year than Sub Total
one and upto five Total one and upto five Total
year five years years year five years years
============================================================================================================================
FINANCIAL ASSETS:
Long Term Investments - - - - - 59,922 200 60,122 60,122
Long Term Deposits and Prepayments - - - - - - 3,575 3,575 3,575
Trade Debts - - - - 7,618 - - 7,618 7,618
Loans and Advances 1,145 - - 1,145 233 - - 233 1,378
Trade Deposits and
Short Term Prepayments - - - - 265 - - 265 265
Other Receivables - - - - 86,133 - - 86,133 86,133
Cash and Bank Balances 557,218 - - 557,218 3,374 - - 3,374 560,592
558,363 - - 558,363 97,623 59,922 3,775 161,320 719,683
FINANCIAL LIABILITIES:
Staff Retirement Benefits-Gratuity - - - - - - 41,790 41,790 41,790
Trade and Other Payables 14,518 - - 14,518 140,618 - - 140,618 155,136
Mark-up Accrued 2 - - 2 - - - - 2
14,520 - - 14,520 140,618 - 41,790 182,408 196,928
Letters of Credit 256,355
Guarantees 75,660
============================================================================================================================
============================================================================================================================
2004 Rupees in thousand
INTEREST BEARING NON INTEREST BEARING
Maturity Maturity Maturity Maturity
Maturity more than more Maturity more than more
up to one year than Sub up to one year than Sub Total
one and upto five Total one and up to five Total
year five years years year five years years
============================================================================================================================
FINANCIAL ASSETS:
Long Term Deposits and Prepayments - - - - - - 3,464 3,464 3,464
Trade Debts - - - - 13,951 - - 13,951 13,951
Loans and Advances 804 - - 804 247 - - 247 1,051
Trade Deposits and
short Term Prepayments - - - - 265 - - 265 265
Other Receivables - - - - 2,043 - - 2,043 2,043
Cash and Bank Balances 762,991 - - 762,991 4,727 - - 4,727 767,718
763,795 - - 763,795 21,233 - 3,464 24,697 788,492
FINANCIAL LIABILITIES:
Liability Against Asset Subject
to Finance Lease 1,701 - - 1,701 - - - - 1,701
Staff Retirement Benefits-Gratuity - - - - - - 39,446 39,446 39,446
Trade and Other Payables 16,999 - - 16,999 102,261 - - 102,261 119,260
Mark-up Accrued 62 - - 62 - - - - 62
18,762 - - 18,762 102,261 - 39,446 141,707 160,469
Letters of Credit 247,973
Guarantees 4,567
============================================================================================================================The comparative information has been restated due to revisions in Fourth Schedule to The Companies Ordinance, 1984.33.2. EFFECTIVE INTEREST RATES Effective interest rates for the monetary financial liabilities are mentioned in the respective notes to the financial statements. Effective interest rates for the monetary financial assets are given below: ==============================================================================
2005 2004
==============================================================================
Loan against instalment (%) 16 16
CASH WITH BANKS ON PLS ACCOUNTS:
Local currency (%) 3.00 to 7.00 3.00 to 3.50
Foreign currency (%) 0.50 to 1.00 0.50 to 1.00
==============================================================================33.3. CONCENTRATION OF CREDIT RISKThe Company does not believe that it is exposed to major concentration of credit risk. Further, the Company controls its credit risk by ascertainment of credit worthiness of customers, monitoring of debt on a continuous basis and providing appropriate provisions. 33.4. LIQUIDITY RISK Liquidity Risk is the risk that an institution will be unable to meet its funding requirements. To guard this risk, Company has diversified funding sources and assets are managed with liquidity in mind. The maturity profile is monitored to ensure that adequate liquidity is maintained. 33.5. FOREIGN EXCHANGE RISK MANAGEMENT Foreign currency risk arises mainly where receivables and payables exist due to transactions entered into foreign currencies. The company incurs foreign currency risk on sales and purchases that are entered in a currency other than Pak. Rupees. The company uses forward foreign exchange contracts to hedge its foreign currency risk, when considered appropriate. 33.6. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES The Management is of the view that carrying values of financial assets and financial liabilities approximate their fair value. 34. REMUNERATION OF DIRECTORS AND EXECUTIVES The aggregate amount charged in the financial statements for remuneration including certain benefits to the Chief Executive, Directors and the Executives of the company is as follows: =====================================================================================================
Rupees in thousand
Chief Executive Directors Executives Total
2005 2004 2005 2004 2005 2004 2005 2004
=====================================================================================================
Managerial Remuneration - - 1,459 1,338 3,546 2,901 5,006 4,239
House Rent - - 438 464 1,064 1,004 1,502 1,468
Utilities - - 146 134 355 290 501 424
Medical Expenses - - 146 134 355 290 501 424
Retirement Benefits - - 122 111 106 97 228 208
Bonus etc. - - 242 287 426 463 668 750
- - 2,553 2,468 5,852 5,045 8,405 7,513
Number of Persons 1 1 2 2 6 4 9 7
=====================================================================================================The Chief Executive and one Director are provided with free use of the Company maintained cars.In view of the change in the definition of "executive" in the revised Fourth Schedule to the Companies Ordinance, 1984, the corresponding figures in respect of the number and remuneration of executives have been restated for the purpose of comparison. 35. RELATED PARTY DISCLOSURES Disclosure of transactions between the Company and Related Parties. The company in the normal course of business carries out transactions with various Related Parties. Significant balances and transactions with the Related Parties are as follows: ==============================================================================
Rupees in thousand
2005 2004
==============================================================================
RELATIONSHIP WITH THE COMPANY
SALE OF GOODS AND SERVICES:
Rupafil Limited Associate 110,866 44,038
Spintex Limited Related party 424,090 405,382
Rupafab Limited Associate - 25
Rupali Nylon (Pvt) Limited Associate 5,300 4,188
PURCHASE OF GOODS AND SERVICES:
Rupafil Limited Associate 343,888 355,278
Spintex Limited Related party 7,840 3,753
DISPOSAL OF OPERATING FIXED ASSETS:
Rupafil Limited Associate 110 -
MARK-UP RECOVERED:
Rupafab Limited Associate - 10,715
Settlement of liabilities
on behalf of entity
Swat HydroPower Limited Associate 2,158 -
Gurantees issued on behalf of entity
Swat HydroPower Limited Associate 6,018 -
Investments / Advance to parties
Swat HydroPower Limited Associate 800 -
Contribution to staff retirement benefits
Provident Fund Trust Employees Fund 1,225 1,009
==============================================================================The company continues to have a policy whereby all transactions with Related Parties and Associated Companies are entered into at arm's length prices using comparable un-controlled price method and cost plus method, wherever, appropriate.Further, contributions to the Defined Contribution Plan (Provident Fund) are made as per the terms of employment. Remuneration of Directors and Key anagement Personnel are disclosed in note 34. 36. PLANT CAPACITY AND ACTUAL PRODUCTION ==============================================================================
2005 2004
In Metric Tons
==============================================================================
ANNUAL CAPACITY (IN THREE SHIFTS):
- Yarn 6,840 6,840
- Fiber 12,000 1 2,000
ACTUAL PRODUCTION:
- Yarn 8,221 9,263
- Fiber 24,387 24,063
==============================================================================37. STAFF STRENGTH==============================================================================
2005 2004
==============================================================================
Number of Employees as at June 30 1,068 1,095
==============================================================================38. DATE OF AUTHORISATION FOR ISSUEThese financial statements were authorised for issue on September 19, 2005 by the Board of Directors of the Company. 39. CORRESPONDING FIGURES Consequent to substitution of Fourth Schedule to the Companies Ordinance, 1984, previous figures have been re-arranged and re-classified wherever necessary for the purposes of comparison. Major changes made during the year are as follows: -- Un-appropriated Profit has been disclosed in Reserves -- Advances, Deposits and Retentions have been re-classified to Trade and Other Payables -- Mark-up Accrued on Short Term Borrowings have been re-classified from Creditors, Accrued and Other Liabilities and disclosed separately on the face of Balance Sheet -- Furniture, Fixture and Equipment have been bifurcated into Furniture & Fittings and Office Equipments -- Loans, Advances, Deposits, Prepayments and Other Receivables have been bifurcated into Loans and Advances, Trade Deposits and Short Term Prepayments & Other Receivables and disclosed separately on the face of Balance Sheet -- Deferred Cost has been restated from Long Term Deposits, Prepayments and Deferred Cost to Other Receivables -- Cash in Hand and balance with Banks have been further bifurcated into Local Currency and Foreign Currency -- Administration, Selling and General Expenses have been bifurcated into Selling and Distribution Expenses & Administrative and General Expenses and disclosed separately on the face of Profit and Loss Account. -- Workers' Profit Participation Fund and Workers' Welfare Fund is now included in "Other Operating Expenses" -- Auditors' Remuneration and Donations have been re-classified from Administration, Selling and General Expenses to Other Operating Expenses -- Figures in notes 19 & 34 have been restated due to change in definition of "Executive" In addition to the above figures, comparative information has also been restated in order to comply with the change in accounting policy as explained in note 2.1.2. 40. GENERAL Figures have been rounded off to the nearest thousand rupees unless otherwise stated. |