| Rupali Polyester Ltd - 2006 |
|
Balance Sheet As at 30 June 2006
=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Share Capital
Authorised
35,000,000 (2005: 35,000,000) 350,000 350,000
Ordinary Shares of Rs. 10 each
Issued, Subscribed and Paid-up 3 340,685 340,685
Reserves 4 1,690,456 1,681,888
2,031,141 2,022,573
NON-CURRENT LIABILITIES
Deferred Liabilities 5 175,725 126,928
CURRENT LIABILITIES
Trade and Other Payables 6 197,279 166,503
Mark-up Accrued 7 44 2
Short Term Borrowings 8 - -
Taxation - net 9 - 37,510
197,323 204,015
CONTINGENCIES AND COMMITMENTS 10
2,404,189 2,353,516
ASSETS
NON-CURRENT ASSETS
Property, Plant and Equipment
Operating Fixed Assets 11 661,303 422,077
Capital Work-in-Progress 12 79,365 244,691
740,668 666,768
Long Term Investments 13 77,351 60,722
Long Term Loans 14 33,000 -
Long Term Deposits and Prepayments 15 3,727 7,232
854,746 734,722
CURRENT ASSETS
Stores, Spares and Loose Tools 16 271,624 409,555
Stock-in-Trade 17 706,555 489,409
Trade Debts 18 12,081 7,618
Loans and Advances 19 31,078 22,941
Trade Deposits and Short Term Prepayments 20 4,860 5,629
Other Receivables 21 110,825 123,050
Taxation - net 9 8,528 -
Cash and Bank Balances 22 403,892 560,592
1,549,443 1,618,794
2,404,189 2,353,516
=========================================================================================Profit and Loss Account for the year ended 30 June 2006=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Sales 23 3,525,961 3,649,631
Cost of Sales 24 3,353,139 3,378,752
Gross Profit 172,822 270,879
Selling and Distribution Expenses 25 9,407 10,098
Administrative and General Expenses 26 71,963 81,123
Other Operating Expenses 27 10,041 21,819
91,411 113,040
Other Operating Income 28 88,808 102,667
Profit from Operations 170,219 260,506
Finance Costs 29 1,100 1,785
Profit before Taxation 169,119 258,721
Taxation 30 58,345 76,447
Profit after Taxation 110,774 182,274
Earnings per Share 31 3.25 5.35
- Basic and Diluted (Rupees)
=========================================================================================Cash Flow Statement For the year ended 30 June 2006=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
CASH FLOW FROM OPERATING ACTIVITIES
Profit Before Taxation 169,119 258,721
Add/(Less):
Adjustment for Non Cash Charges and Other Items:
Depreciation 11 61,704 45,163
Adjustment/Amortization of Long Term Deposits
and Prepayments 15 4,396 3,978
Staff Retirement Benefits - Gratuity 5.1.5 8,758 7,635
Mark-up/Interest Income 28 (46,243) (30,863)
Reversal of Provision for Doubtful Receivables 28 (19,870) -
Remission of Liabilities 28 (427) (172)
Profit on Disposal of Operating Fixed Assets 28 (1,716) (824)
Exchange Gain 28 (14) (219)
Mark-up on Short Term Borrowings 29 56 100
Bank Charges 29 1,044 1,629
Financial Charges on Leased Assets 29 - 56
7,688 26,483
Effect on Cash Flow Due to Working Capital Changes:
(Increase)/Decrease In Current Assets:
Stores, Spares and Loose Tools 137,931 (234,923)
Stock-in-Trade (217,146) 267,103
Trade Debts (4,463) 6,333
Loans and Advances (8,137) (14,588)
Trade Deposits and Short Term Prepayments 30 182
Other Receivables 33,702 (98,785)
(58,083) (74,678)
Increase / (Decrease) in Current Liabilities:
Trade and Other Payables 31,156 23,336
(26,927) (51,342)
Cash generated from Operations 149,880 233,862
Mark-up on Short Term Borrowings (1,058) (1,729)
and Bank Charges Paid
Income Tax Paid (58,582) (22,434)
Mark-up / Interest Received 44,636 30,863
Staff Retirement Benefits - Gratuity Paid (5,762) (5,291)
Net Cash Inflow from Operating Activities 129,114 235,271
CASH FLOW FROM INVESTING ACTIVITIES
Fixed Capital Expenditure (136,931) (241,441)
Long Term Investments (16,629) (60,122)
Long Term Loans (33,000) -
Long Term Deposits and Prepayments (152) (4,916)
Proceeds from Disposal of Operating Fixed Assets 3,043 1,869
Net Cash Outflow from Investing Activities (183,669) (304,610)
CASH FLOW FROM FINANCING ACTIVITIES
Payment of Lease Obligations - (1,817)
Dividend Paid (102,159) (136,189)
Net Cash Outflow from Financing Activities (102,159) (138,006)
Net Decrease in Cash and Cash Equivalents (156,714) (207,345)
Cash and Cash Equivalents 560,592 767,718
at the Beginning of the Year
Effect of Exchange Rate Fluctuations 14 219
Cash and Cash Equivalents 32 403,892 560,592
at the End of the Year
=========================================================================================Statement of Changes in Equity For the year ended 30 June 2006======================================================================================================
Rupees in thousand
======================================================================================================
Ordinary Un-
Share Capital Revenue appropriated
Capital Reserve Reserve Profit Total
======================================================================================================
Balance as on 01 July 2004
as previously reported 340,685 71,490 1,424,125 140,273 1,976,573
Net Profit for the year ended 30 June 2005 - - - 182,274 182,274
Final Dividend for the year ended
30 June 2004 @ 40% - - - (136,274) (136,274)
Balance as on 30 June 2005
as previously reported 340,685 71,490 1,424,125 186,273 2,022,573
Balance as on 01 July 2005 340,685 71,490 1,424,125 186,273 2,022,573
Net Profit for the year ended 30 June 2006 - - - 110,774 110,774
Final Dividend for the year ended
30 June 2005 @ 30% - - - (102,206) (102,206)
Balance as on 30 June 2006 340,685 71,490 1,424,125 194,841 2,031,141
======================================================================================================Notes To The Financial Statements For the year ended 30 June 20061. Legal Status and Nature of Business RUPALI POLYESTER LIMITED ("the Company") was incorporated in Pakistan on 24 May 1980 under the Companies Act 1913 (now the 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, Guberg-III, Lahore. It is principally engaged in the manufacture and sale of polyester products. 2. Summary of Significant Accounting Polices 2.1. Statement of Compliance These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984. Approved accounting standards comprise of such International Accounting Standards (IAS) 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. 2.2. Basis of Measurement 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. The preparation of financial statements in conformity with approved Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the companies accounting policies. Estimates and judgments are continually evaluated and are based on historical experience, including expectations of future events that are believed to be reasonable under the circumstances. The areas involving a higher degree of judgements or complexity or areas where assumptions and estimates are significant to the financial statements are as follows: a) Defined Benefit Plan - Gratuity b) Provision for Taxation c) Property, Plant and Equipment 2.3. Staff Retirement Benefits 2.3.1. Defined Benefit Plan - Gratuity The Company operates an Unfunded Defined Benefit 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 30 June 2005 (refer 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. 1.314 million (2005: Rs. 1.103 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 recognized 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. Short Term Borrowings 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 recognized 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 Property, plant and equipment except Freehold Land and Capital Work-in-Progress are stated at cost less accumulated depreciation and any identified impairment loss. Freehold Land and Capital Work-in-Progress are stated at cost less any identified impairment loss. Depreciation on Operating Fixed Assets is calculated on reducing balance method. Rates of depreciation are disclosed in Note: 11 International Accounting Standard (IAS) 16, "Property, Plant and Equipment (revised 2003)" is applicable to financial statements covering annual periods beginning on or after 1 January 2005 and requires a review of residual value of assets, useful lives and depreciation method at each financial year end. Accordingly, based on a review of the above the management has revised the following: Depreciation on additions is now charged from the month in which an asset is acquired or available for use or capitalized while no depreciation is charged in the month in which the asset is disposed off. Previously, full year's depreciation was charged in the year of acquisition while no depreciation was charged in the year of disposal. The above revisions have been accounted for as changes in accounting estimates in accordance whith the requirements of International Accounting Standard (IAS) 8, "Accounting Policies, Changes in Accounting Estimates and Errors". Accordingly, the effect of these changes in accounting estimates has been recognized prospectively in the profit and loss account of the current yea. Had there been no change in these estimates, the profit before taxation would have been lower by Rs. 8.763 million. The assets' residual values and useful lives are reviewed at each financial year end, adjusted if impact on depreciation is significant. The Company assesses at each balance sheet date whether there is any indication that Property, Plant and Equipment may be impaired. If such indication exists, the carrying amounts of such assets are reviewed to assess whether they are recorded in excess of their recoverable amount. Where carrying values exceed the respective recoverable amount, assets are written down to their recoverable amounts and the resulting impairment loss is recognized in income currently. The recoverable amount is the higher of an assets' fair value less costs to sell and value in use. Where an impairment loss is recognized, the depreciation charge is adjusted in the future periods to allocate the assets' revised carrying amount over its estimated useful life. Normal repairs and maintenance costs are charged to the profit and loss account as and when incurred. Major renewals and improvements are capitalized. 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 recognized as an income or expense. 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 recognized as an expense in the profit and loss account. 2.10. Long Term Investments Investment in Equity Instruments of Related Parties and Others Available for Sale Investment 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. In pursuance of the revised International Accounting Standard (IAS) 39 "Financial Instruments: Recognition and Measurement" which is applicable for accounting years beginning on or after 1 January 2005, the Company has changed it's accounting policy relating to recognition of unrealized gains and losses arising from changes in the fair value of available for sale investments that were previously included in the net profit & loss for the period in which these arise. Now unrealized gains and losses arising from changes in fair value are directly recognized in equity in the period in which these arise. Accumulative gains and losses arising from changes in fair value are included in net profit or loss for the period in which an investment is derecognised. Such a change in accounting policy should be accounted for retrospectively and comparative financial statements should be restated in accordance with IAS-8 "Accounting Policies, Changes in Accounting Estimates and Errors". However, the change has no effect on the current or prior years' shareholders' equity and profit. All purchases and sales of investments are recognized 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 recognized 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 recognized in income. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. 2.11. Advances, 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 lower of moving average cost and net realizable value. 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 Stock-in-Trade, except for those in transit, are valued at lower of weighted average cost and net realizable value. Items-in-transit are valued at cost comprising invoice value plus other charges paid thereon. Cost of work-in-process and finished goods comprises direct material, labour and appropriate manufacturing overheads. Provision is made for slow moving and obsolete items. Net realizable value signifies the estimated selling price in the ordinary course of business less costs necessarilly to be incurred in order to make a sale. 2.14. Trade Debts and Other Receivables Trade debts originated by the Company are recognized and carried at original invoice amount less provission 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 recognized 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 available, 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 recognized 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 credit can be utilized. 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 item 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 nominal amount. 2.17. Revenue Recognition Revenue from sales is recognized 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. Dividend income on equity investment is recognized as income when the right of receipt is established. 2.18. Foreign Currency Translation Transactions denominated in foreign currencies are translated to Pak. Ruppees 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. Exchange differences are included in income currently. 2.19. Financial Assets and Liabilities Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are initially measured at cost, which is the fair value of the consideration given and received respectively. These financial assets and liabilities are subsequently measured at fair value, amortized cost or cost as the case may be. The particular measurement methods adopted are disclosed in the individual policy statements associated with each item. 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 recognized amounts and intends either to settle on a net basis or to realize asset and settle the liability simultaneously. 2.21. Cash and Cash Equivalents Cash and cash equivalents are carried in the balance sheet at cost. Consistent with prior year, for the purpose of the cash flow statement, cash and cash equivalents comprise of cash in hand, deposits held with banks and running finances under mark-up arrangements. 2.22. Borrowing Cost Mark-up, interest and other charges on long-term borrowings, if any, are capitalized upto 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. 2.23. Dividend Dividend distribution to the shareholders in recognized as a liability in the period in which it is approved by the shareholders. 2.24. 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. 3. Issued, Subscribed and Paid-up Capital =========================================================================================
Rupees in thousand
2006 2005
Number of shares
2006 2005
=========================================================================================
9,690,900 9,690,900 Ordinary Shares of Rs. 10 each
fully paid in cash 96,909 96,909
19,933,895 19,933,895 Ordinary Shares of Rs. 10 each
is issued against non-repatriable
investment 199,339 199,339
4,443,719 4,443,719 Ordinary Shares Rs. 10 each
issued as Bonus Shares 44,437 44,437
34,068,514 34,068,514 340,685 340,685
=========================================================================================4. Reserves=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Capital Reserves:
Share Premium 71,490 71,490
Revenue Reserves:
General 1,424,125 1,424,125
Un-appropriated Profit 194,841 146,273
1,618,966 1,610,398
1,690,456 1,681,888
=========================================================================================5. Deferred Liabilities=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Staff Retirement Benefits - Gratuity 5.1 44,786 41,790
Deferred Taxation 5.2 130,939 85,138
175,725 126,928
=========================================================================================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 "Employees benefits" as of 30 June 2005, using the Projected Unit Credit Method. 5.1.2. Principal Actuarial Assumptions Following are a few important actuarial assumptions used in the valuation: =========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Discount rate (%) per annum 9 9
Expected rate of salary increase 8 8
in future years (%) per annum
Average expected remaining working 11 11
life time of employees (years)
=========================================================================================5.1.3. Reconciliation of Payable to Defined Benefit Plan=========================================================================================
Rupees in thousand
=========================================================================================
Present value of defined benefit obligation 44,786 40,967
Unrecognized actuarial losses - 823
Net liability recognized in the Balance Sheet 44,786 41,790
=========================================================================================5.1.4. Movement in Liability Recognized in Balance Sheet=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Present value of defined benefit obligation at the
beginning of the year 71,790 39,446
Charge for the year 5.1.5 8,758 7,635
Payments made during the year (5,762) (5,291)
Present value of defined obligation at the
End of the year 44,786 41,790
=========================================================================================5.1.5. Charge for the Year=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Current Service Cost 5,071 4,479
Interest Cost 3,687 3,156
8,758 7,635
=========================================================================================5.1.6. Charge for the year has been Allocated as Follows:=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Cost of Sales 24.1 6,218 5,421
Selling and Distribution Expenses 25.1 127 111
Administrative and General Expenses 26.1 2,413 2,103
8,758 7,635
=========================================================================================5.2. Deferred Taxation=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Deferred Tax Liability on Taxable Temporary Difference:
Tax Depreciation Allowance 130,939 85,138
=========================================================================================6. Trade and Other Payables=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Creditors 136,921 105,616
Due to Associated Companies 6.1 3,933 1,736
Accrued Liabilities 31,624 29,087
Advances from Customers 994 1,281
Customers Deposits-Payable 585 655
on Demand - Interest Free
Contractors' Retention Money 5,839 1,340
Payable to Provident Fund 213 311
Income Tax Deducted at Source 171 147
Workers' Profit Participation Fund 6.2 9,642 14,518
Workers' Welfare Fund 5,433 10,397
Unclaimed Dividend 660 613
Other Payables 1,264 802
197,279 166,503
=========================================================================================6.1. Due to Associated Companies=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Amount due to associated companies of:
Rupafil Limited 3,813 -
Rupali Nylon (Pvt.) Limited 120 1,736
3,933 1,736
=========================================================================================These are in the normal course of business and are interest free.6.2. Workers Profit Participation Fund =========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Balance at the beginning of the year 14,518 16,999
Allocation for the year 8,937 13,876
23,455 30,875
Less: Amount paid to the trustees of the fund 3,781 4,280
Deposited with the Government 10,032 12,077
13,813 16,357
Balance at the end of the year 9,642 14,518
=========================================================================================7. Mark-up Accrued=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
on Running Finances Utilized under Mark-up arrangement 44 2
=========================================================================================8. Short Term Borrowings=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Secured - From Banking Companies
Running Finances Utilized 8.1, 8.2 & 8.4 - -
under Mark-up arrangements
Term Finances Utilized 8.1 & 8.3 - -
under Mark-up arrangements
=========================================================================================8.1. The total facilities aggregating Rs. 1,000.000 million (2005: Rs. 955.000 million) available from various commercial banks. These are secured by way hypothecation charge over current assets to the extent of Rs. 1,307.621 million (2005: Rs. 1,370.621 million) and promissory notes valuing Rs. 1,019.093 million (2005: Rs. 966.224 million) and as at 30 June 2006 the entire outstanding amount has been adjusted. 8.2. The rate of mark-up for these facilities ranges between 8.40% to 10.00% (2005: 3.00% to 7.50%). 8.3. The rate of mark-up for these facilities is Nil (2005: 1.98%). 8.4. The aggregate facility available for opening letters of credit from various commercial banks amount to Rs. 1,930.000 million (2005: 1,088.000 million) of which Rs. 454.659 million were utilized at 30 June 2006 (2005: Rs. 256.355 million). 9. Taxation-Net =========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Advance Tax 23,094 61,476
Provision for Taxation (14,566) (98,986)
=========================================================================================The income tax assessment of the Company has been finalized upto tax year 2005 (accounting year ended 30 June 2005) and adequate provisions have been made in these financial statements for the year ended 30 June 2006 (tax year 2006). 10. Contingencies and Commitments 10.1. Contingencies: 10.1.1. Guarantees issued to different organizations in the normal course of business amounted to Rs. 66.314 million (2005: Rs. 69.642 million). 10.1.2. Outstanding guarantees given on behalf of Related Parties amounted to Rs. 6.060 million (2005: Rs. 6.018 million). 10.2. Commitments: 10.2.1. Contracts for capital expenditure commitments outstanding as at 30 June 2006 amounted to Rs. 17.737 million (2005: Rs. 6.307 million). 10.2.2. Commitments against irrevocable letters of credit as at 30 June 2006 amounted to Rs. 454.659 million (2005: Rs. 256.355 million). 11. Operating Fixed AssetRupees in thousand =========================================================================================================================
COST DEPRECIATION BOOK
VALUE
Accumu-
Additions/ For the lated
As at (Deletions)/ As at Rate As at year / upto As at
01.07.05 (Transfers) 30.06.06 % 01.07.05 (deletions) 30.06.06 30.06.06
=========================================================================================================================
Freehold Land 21,172 - 21,172 - - - - 21,172
Building
Factory on
Freehold Land 113,881 52,440 166,321 10 87,499 6,571 94,070 72,251
Office on
Freehold Land 13,865 - 13,865 5 5,121 437 5,558 8,307
Roads 4,312 - 4,312 5 2,462 92 2,554 1,758
Plant & Machinery 1,614,879 247,319 1,862,198 10 1,288,860 49,839 1,338,699 523,499
Furniture & Fittings 15,026 102 14,028 10 8,289 658 8,097 5,931
(1,100) (850)
Vehicles 35,064 683 31,290 20 26,154 1,837 24,028 7,262
(4,457) (3,963)
Office Equipments 49,714 1,644 49,082 10 29,990 2,012 30,306 18,776
(2,276) (1,696)
Other Assets 4,217 69 4,281 10 1,678 258 1,934 2,347
(5) (2)
=========================================================================================================================
2006 1,872,130 302,257 2,166,549 1,450,053 61,704 1,505,246 661,303
(7,838) (6,511)
=========================================================================================================================
2005 1,870,095 6,980 1,872,130 1,408,791 45,163 1,450,053 422,077
(4,945) (3,901)
=========================================================================================================================11.1. The depreciation charge for the year has been allocated as follows:=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Cost of Sales 24 56,760 39,535
Selling and Distribution Expenses 25 247 281
Administrative and General Expenses 26 4,697 5,347
61,704 45,163
=========================================================================================11.2. Property Plant and Equipment includes assets amounting to Nil (2005: Rs. Nil) of the Company which are not in operation.11.3. The cost of fully depreciated assets which are still in use as at 30 June 2006 is Rs. Nil (2005: Rs. Nil). 11.4. Disposal of Operating Fixed Assets The following assets disposed off during the year: =========================================================================================================================================
Accumu- Gain/
Lated (Loss)
Depreci- Book Sale on Mode of
Particulars of Assets Cost ation Value Proceeds Disposal Disposal Particulars of Buyers
=========================================================================================================================================
Vehicles
KIA Classic (LXR-7919) 493 342 151 200 49 Insurance Claim received
Claim from New Jubilee Insurance Co.
Prime Mover (LSA-6196) 2,005 1,819 186 225 39 Negotiation Al-Amin Enterprise D-9/8
Salmina Bugalows Park Lane,
Block -5, Clifton, Karachi
Toyota Corolla (LOW-2152) 758 698 60 65 5 Negotiation Rupafab Limited, 33 Km.
Raiwind Road, Lahore
Toyota Corolla (LOW-2153) 587 539 48 50 2 Negotiation Rupafab Limited, 33 Km.
Raiwind Road, Lahore
Toyota Corolla (LOW-7074) 614 565 49 53 4 Negotiation Rupafab Limited, 33 Km.
Raiwind Road, Lahore
=========================================================================================================================================
Fire at Karachi Office
=========================================================================================================================================
Furniture & Fittings 1,100 850 250
Office Equipments 2,266 1,689 577
Other Assets 5 2 3
3,371 2,541 830 2,450 1,620 Fire Insurance Claim received
Claim from Adamjee
Insurance Co. Limited
=========================================================================================================================================
Office Equipments
=========================================================================================================================================
Electric Water Cooler 10 7 3 0 (3) Salvaged
=========================================================================================================================================
2006 7,838 6,511 1,327 3,043 1,716
=========================================================================================================================================
2005 4,945 3,901 1,044 1,868 824
=========================================================================================================================================12. Capital Work-in-Progress=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Land and Land Development 4,721 6,173
Building and Civil Works 69,497 33,661
Plant and Machinery 2,460 204,423
Furniture and Fittings 257 16
Office Equipments - 203
Other Assets 20 3
Capital Stores 2,410 212
79,365 244,691
=========================================================================================13. Long Term Investments=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
These represent long term investments in:
Related Parties 13.1 17,429 800
Others 13.2 59,922 59,922
77,351 60,722
=========================================================================================13.1. Related Parties=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Associated Company-Unquoted
Swat HydroPower Limited
19,988 (2005: 19,988) fully paid Ordinary Shares of
Rs. 10 each. Equity held 40% (2005: 40%) 200 200
Advance for Issue of Shares 13.1.1 17,229 600
17,429 800
=========================================================================================13.1.1. This advance has been given as equity investment, being 40% of the proposed expenses till the issuance of Letter of Support (LOS) by the Government of Pakistan for Swat Hydro Power Limited subject to compliance of all statutory requirements. After the issuance of LOS the ordinary shares against this advance shall be issued to the Company and shall rank pari passu with the existing shares, at the face value of Rs. 10/- each and /or at a discount or otherwise as decided and mutually agreed by the Board of Directors of both the investing and investee companies after determination of shares capital.13.2. Other =========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
World Bridge Connect (Pvt.) Limited
1,469,659 (2005: 1,469,659) fully paid Ordinary Shares
of Rs. 10/- each Equity held 13.44% (2005: 13.44%) 59,922 59,922
=========================================================================================14. Long Term Loans=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Considered Good
Other
World Bridge Connect (Pvt.) Limited
4.1 15,000 -
14.2 18,000 -
33,000 -
=========================================================================================14.1. This represents the US $ 250,000 (Rs. 15.000 million), and is unsecured and interest free. The Company has the option to convert this amount into ordinary shares @ US $ 0.51 per share.14.2. This represents the US $ 300,000 (Rs. 18.000 million) and is unsecured, carries mark-up @ 2.00% per month, becomes due and payable after US $ 2.000 million in equity has been invested in series B subject to the Company exercising its option to convert this amount into ordinary shares @ US $ 0.71 per share. 15. Long Term Deposits and Prepayments =========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Security Deposits 3,727 3,575
Prepaid Rent 3,657 8,053
Less: Current Portion 20 3,657 4,396
- 3,657
3,727 7,232
=========================================================================================16. Stores, Spares and Loose Tools=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Stores
-- In Hand 50,359 64,699
-- In Transit 16,247 2,988
66,606 67,687
Spares
-- In hand 177,431 318,626
-- In Transit 24,375 20,008
201,806 338,634
Loose Tools
-- In hand 3,212 3,234
271,624 409,555
=========================================================================================17. Stock-in-Trade=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Raw and Packing Materials
-- In Hand 311,581 161,444
-- In Transit 142,104 147,297
453,685 308,741
Work-in-Process 47,093 33,905
Finished Goods 205,777 146,763
706,555 489,409
=========================================================================================18. Trade Debts=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Unsecured - considered good
-- Others 12,081 7,618
=========================================================================================19. Loans and Advances=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Loans-considered good
Loans to Staff
-- Executives 19.1 613 440
-- Other Employees 610 946
1,223 1,386
Advances - considered good
Advances to:
-- Staff Against Expenses 441 389
-- Suppliers and Contractors 28,871 20,936
29,312 21,325
Margin on Letters of Credit 543 230
31,078 22,941
=========================================================================================19.1. Executives:=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Opening balance 440 280
Transferred to executives during the year 450 400
Disbursements during the year (277) (240)
173 160
Closing balance 613 440
=========================================================================================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. 0.710 million (2005: Rs. 0.522 million).20. Trade Deposits and Short Term Prepayments =========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Deposits - considered good
Margin on Bank Guarantees 265 265
Prepayments - considered good
Prepaid Insurance 146 31
Current portion of Prepaid Rent 15 3,657 4,396
Prepaid Rent of Port Qasim - 36
Letters of Credit 355 454
Other Prepayments 437 447
4,860 5,629
=========================================================================================21. Other Receivables=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Considered good
Export Rebate Receivable - 1,409
Due from Associated Companies 21.1 - 10,475
Due from Related Parties 21.2 175 5,727
Insurance Claim Receivable 323 4,356
Custom Duty Refundable 21.3 12,459 65,861
Sales Tax Refundable 93,734 33,105
Accrued Interest 1,607 -
Others 543 133
108,841 121,066
Considered doubtful
Transit Pass Fee Refundable from KMC Karachi 142 142
Sales Tax Refundable 33,121 52,991
Less: Provision for Doubtful Receivable 21.4 31,569 51,439
1,552 1,552
Investment in Rupali Power (Pvt.) Ltd. 21.5 45,000 45,000
Less: Provision for Doubtful Receivable 45,000 45,000
- -
Others 290 290
110,825 123,050
=========================================================================================21.1. Maximum amount due from Associated Companies at the end of any month during the year was Rs. 18.171 million (2005: Rs. 72.962 million).These are in the normal course of business and are interest free. 21.2. Maximum amount due from Related Parties at the end of any month during the year was Rs. 20.162 million (2005: Rs. 16.197 million). These are in the normal course of business and are interest free. 21.3. This represents an amount of Rs. 12.459 million (2005: Rs. 34.758 million) in respect of custom duty refundable on the inventory existed as at 30 June 2006 of Pure Terephthalic Acid (PTA). 21.4. This includes provision for doubtful receivable to the tune of Rs. 28.985 million (2005: Rs. 48.822 million) which has been created towards payments made under protest to Sales Tax Department to avail amnesty offered vide SRO 575(1)/98 dated 12.06.98 and SRO 679 (I)/99 dated 12.06.99. During the year sales tax refund amounting to Rs. 19.870 million was received from sales tax department and has been shown as the reversal of provision for doubtful receivable in Note 28. 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) Limited. 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
2006 2005
=========================================================================================
Cash in Hand:
-- Local Currency 172 422
-- Foreign Currency 263 259
435 681
Balance With Banks in:
-- Current Accounts 4,176 2,693
-- PLS Accounts
-- Local Currency 398,808 555,865
-- Foreign Currency 473 1,353
403,457 559,911
403,892 560,592
=========================================================================================22.1. The balances in PLS accounts carry mark-up rate ranging between 3.25% to 10.00% (2005: 3.00% to 7.00%) for local currency and 1.50% to 2.00% (2005: 0.50% to 1.00%) for foreign currency.22.2. Cash at banks in PLS accounts include US$ 7,877.09 (2005: US$ 22,729.00) and Pound Sterling 0.15 (2005: Pound Sterling 0.15). 23. Sales =========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Gross Sales:
-- Local 3,538,031 4,121,369
-- Export - 16,677
Export Rebate - 1,409
3,538,031 4,139,455
Less:
Sales Return & Allowances 20 -
Sales Tax - 478,545
Discount on - Local Sales 12,050 10,949
Commission on - Export Sales - 330
12,070 489,824
3,525,961 3,649,631
=========================================================================================24. Cost of Sales=========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Raw and Packing Materials Consumed 2,611,318 2,714,294
Stores and Spares Consumed 133,599 75,288
Salaries, Wages and Amenities 24.1 104,698 92,999
Fuel and Power 479,361 335,298
Repair and Maintenance 27,070 21,895
Running and Maintenance of Vehicles 5,964 5,094
Insurance 4,948 5,145
Depreciation 11.1 56,760 39,535
Rent, Rates and Taxes 570 653
Other Expenses 1,053 1,010
3,425,341 3,291,211
Add: Opening Work-in-Process 33,905 23,490
Less: Closing Work-in-Process 47,093 33,905
3,412,153 3,280,796
Add: Opening Finished Goods 146,763 244,719
Less: Closing Finished Goods 205,777 146,763
3,353,139 3,378,752
=========================================================================================24.1. Salaries, Wages and Amenities include Rs. 6.218 million (2005: Rs. 5.421 million) in respect of staff retirement benefits.25. Selling and Distribution Expenses =========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Salaries, Wages and Amenities 25.1 1,825 1,719
Rent, Rates and Taxes 228 205
Electricity, Gas and Water Charges 118 170
Postage, Telephone and Telex 136 179
Printing and Stationery 91 117
Books and Subscription 15 14
Running and Maintenance of Vehicles 87 75
Repair and Maintenance 75 59
Legal and Professional Charges 208 896
Travelling Expenses 469 312
Entertainment 34 41
Insurance 31 22
Sales Promotion - 59
Depreciation 11.1 247 281
Freight and Forwarding 5,843 5,218
Export Expenses - 731
9,407 10,098
=========================================================================================25.1. Salaries, Wages and Amenities include Rs. 0.127 million (2005: Rs. 0.111 million) in respect of staff retirement benefits.26. Administrative and General Expenses =========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Salaries, Wages and Amenities 26.1 34,684 31,919
Directors' Remuneration 2,610 2,553
Rent, Rates and Taxes 4,329 3,902
Electricity, Gas and Water Charges 2,243 3,230
Postage, Telephone and Telex 2,585 3,412
Printing and Stationery 1,734 2,230
Books and Subscription 285 271
Running and Maintenance of Vehicles 1,655 1,421
Repair and Maintenance 1,415 1,128
Legal and Professional Charges 3,963 17,021
Travelling Expenses 8,911 5,925
Entertainment 646 771
Insurance 585 411
Advertisement 1,059 1,083
Depreciation 11.1 4,697 5,347
Miscellaneous Expenses 562 499
71,963 81,123
=========================================================================================26.1. Salaries, Wages and Amenities Rs. 2.413 million (2005: Rs 2.103 million) in respect of staff retirement benefits.27. Other Operating Expenses =========================================================================================
Rupees in thousand
Note 2006 2005
=========================================================================================
Worker's Profit Participation Fund 8,937 13,876
Worker's Welfare Fund 690 4,921
Auditors's Remuneration 27.1 409 262
Donations 27.2 5 2,760
10,041 21,819
=========================================================================================27.1. Auditors' Remuneration=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Audit Fee 200 150
Certification and Review 65 40
Taxation Services 144 72
409 262
=========================================================================================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
Note 2006 2005
=========================================================================================
Scrap, Waste and Other Sales-Net 28.1 15,176 30,531
Mark-up / Interest Income 28.2 46,243 30,863
Custom Duty Refundable - 34,758
Reversal of Provision for Doubtful Receivables 21.4 19,870 -
MEG Handling Income 5,362 5,300
Remission of Liabilities 427 172
Profit on Disposal of Operating Fixed Assets 11.4 1,716 824
Exchange Gain 14 219
88,808 102,667
=========================================================================================28.1. Scrap, Waste and Other Sales -Net=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Gross Sales 16,605 35,052
Less: Sales Tax 1,429 4,521
15,176 30,531
=========================================================================================28.2. Mark-up / Interest Income=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Interest Income on:
Bank Accounts 44,555 30,484
Long Term Loans 1,607 -
Mark-up on:
Credit Sales (Net) - 281
Staff Loans 81 98
46,243 30,863
=========================================================================================29. Finance Costs=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Mark-up on short Term borrowings 56 100
Bank Commission and Other Charges 1,044 1,629
Financial Charges on Leased Assets - 56
1,100 1,786
=========================================================================================30. Taxation=========================================================================================
Rupees in thousand
2006 2005
=========================================================================================
Current
for the year 12,660 97,080
for prior years' (115) (12,681)
12,545 84,399
Deferred
58,345 76,447
=========================================================================================30.1. Numerical reconciliation between the applicable tax rate and average effective tax rate is as follows:=========================================================================================
2006 2005
% %
=========================================================================================
Applicable Tax Rate 35.00 35.00
Effect of Change in Prior Years' Tax (0.07) (4.90)
Effect of Change in Deferred Tax 27.08 (3.07)
Tax effect of Expenses that are not
Deductible in determining Taxable Profit (27.51) 2.52
(0.50) (5.45)
Average Effective Tax Rate 34.50 29.55
=========================================================================================31. Earings Per Share31.1. Earings Per Share - Basic =========================================================================================
Note Rupees in thousand
=========================================================================================
Net profit for the year after taxation 110,774 182,274
attributable to Ordinary Shareholders
=========================================================================================
Number of Shares
=========================================================================================
Weighted Average Ordinary Shares 3 34,068,514 34,068,514
in Issue during the year
=========================================================================================
Rupees
=========================================================================================
Basic Earnings Per Share 3.25 5.35
=========================================================================================31.2. Earnings Per Share - DilutedThere is no dilution effect on Basic Earnings Per Share as the Company has no such commitments. 32. Cash and Cash Equvalents =========================================================================================
Note Rupees in thousand
=========================================================================================
Cash and Bank Balances 22 403,892 560,592
Short Term Borrowings 8 - -
403,892 560,592
=========================================================================================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. =======================================================================================================================
2006 Rupees in thousand
=======================================================================================================================
INTEREST BEARING NON INTEREST BEARING
Maturity Maturity Maturity Maturity
upto after Sub upto after Sub
one year one year Total one year one year Total Total
=======================================================================================================================
Financial Assets
On Balance Sheet
Long Term Investments - - - - 77,351 77,351 77,351
Long Term Loans - 18,000 18,000 - 15,000 15,000 33,000
Long term Security Deposits - - - - 3,727 3,727 3,727
Trade Debts - - - 12,081 - 12,081 12,081
Loans to Staff 1,223 1,223 - - - - 1,223
Other Receivables - - - 2,399 - 2,399 2,399
Cash and Bank Balances 399,281 - 399,281 4,611 - 4,611 403,892
=======================================================================================================================
400,504 18,000 418,504 19,091 96,078 115,169 533,673
Off Balance Sheet - - - - - - -
=======================================================================================================================
Total 400,504 18,000 418,504 19,091 96,078 115,169 533,673
=======================================================================================================================
Financial Liabilities
On Balance Sheet
Trade and Other Payable - - - 179,464 - 179,464 179,464
Mark-up Accrued - - - 44 - 44 44
=======================================================================================================================
- - - 179,508 - 179,508 179,508
=======================================================================================================================
Off Balance Sheet
Contracts for Capital Expenditur - - - - 17,737 17,737 17,737
Letters of Credit - - - 454,659 - 454,659 454,659
Guarantees - - - 72,374 72,374 72,374
- - - 454,659 90,111 544,770 544,770
=======================================================================================================================
Total - - - 634,167 90,111 724,278 724,278
=======================================================================================================================
2005 Rupees in thousand
=======================================================================================================================
INTEREST BEARING NON INTEREST BEARING
Maturity Maturity Maturity Maturity
upto after Sub upto after Sub
one year one year Total one year one year Total Total
=======================================================================================================================
Financial Assets
On Balance Sheet
Long Term Investments - - - - 60,722 60,722 60,722
Long Term Security Deposit - - - -3,575 3,575 3,575
Trade Debts - - - 7,618 - 7,618 7,618
Loans to Staff 1,386 - 1,386 - - - 1,386
Other Receivable - - - 20,866 - 20,866 20,866
Cash and Bank Balance 557,218 - 557,218 3,374 - 3,374 560,592
=======================================================================================================================
558,604 - 558,604 31,858 64,297 96,155 654,759
Off Balance Sheet - - - - - - -
=======================================================================================================================
Total 558,604 - 558,604 31,858 64,297 96,155 654,759
=======================================================================================================================
Financial Liabilities
=======================================================================================================================
On Balance Sheet
Trade and Other Payables - - - 139,101 - 139,101 139,101
Mark-up Accrued - - - 2 - 2 2
- - - 139,103 - 139,103 139,103
Off Balance Sheet
Contracts for Capital Expenditur - - - - 6,307 6,307 6,307
Letters of Credit - - - 256,355 - 256,355 256,355
Guarantees - - - - 75,660 75,660 75,660
- - - 256,355 81,967 338,322 338,322
=======================================================================================================================
Total - - - 395,458 81,967 477,425 477,425
=======================================================================================================================33.2. Effective Interest Rates Efective 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: =========================================================================================
2006 2005
=========================================================================================
Loan against installment (%) 10.00 to 16.00 16.00
Cash with Banks on PLS accounts:
Local currency (%) 3.25 to 10.00 3.00 to 7.00
Foreign currency (%) 1.50 to 2.00 0.50 to 1.00
=========================================================================================33.3. Concentration of Credit RiskCredit risk represents the accounting loss that would be recognized at the reporting date if counter parties fail to perform as contracted. The Company controls its credit risk by ascertainment of credit worthiness of customers, monitoring of debt on a continuous basis and providing provisions. The Company believes that it is not exposed to major concentration of credit risk. 33.4. Liquidity Risk Liquidity Risk reflects an enterprise's inability in raising funds to meet commitments. 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 ot transactions entered into foreign currencies. The Company incures 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 all benefits to the Chief Executive, Directors and the Executives of the Company areas follows: Rupees in thousand =========================================================================================================================
Rupees in thousand
=========================================================================================================================
Chief Executive Directors Executives Total
2006 2005 2006 2005 2006 2005 2006 2005
=========================================================================================================================
Managerial Remuneration - - 1,489 1,459 4,638 3,546 6,127 5,006
House Rent - - 447 438 1,391 1,064 1,838 1,502
Utilities - - 149 146 464 355 613 501
Medical Expenses - - 149 146 464 355 613 501
Retirement Benefits - - 124 122 109 106 233 228
Bonus etc. - - 252 242 381 426 633 668
- - 2,610 2,553 7,447 5,852 10,057 8,405
=========================================================================================================================
Number of Persons 1 1 1 2 7 6 9 9
=========================================================================================================================The new Chief Executive of the Company was appointed with effect form January 2006 and is provided with free use of Company maintained car.35. Transactions with Relate Parties The related parties Comprise Associated Companies, Other Related Group Companies, Directors of the Company, Key Management Personnel and Defined Contribution Plan (Provident Fund). The Company in the normal course of business carries out transactions with various related parties. Amounts due from and to the rated parties are shown under receivables and payables, amounts due from key management personnel are shown under receivables and remuneration of directors and key management personnel is disclosed in note 34. Other significant transactions with the related parties are as follows: =================================================================================================
Rupees in thousand
2006 2005
=================================================================================================
Relationship with Company Nature of Transactions
1 Associated Companies Sales of goods and services 51,200 116,166
Purchase of goods and services 226,872 343,888
Disposal of Operating Fixed Assets 168 110
Profit on bank deposits 43,420 -
Settlement of liabilities on behalf of entity 692 2,158
Guarantees issued on behalf of entity 6,060 6,018
Investment / Advance to parties 16,629 800
2 Other Related Parties Sales of goods and services 348,669 424,090
Purchase of goods and services 179,976 7,840
3 Defind Contribution Plan
(Provident Fund) Contribution to provident fund 1,374 1,225
=================================================================================================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.36. Plant Capacity and Actual Production ========================================================================================= Annual Capacity (In Three Shifts) In Metric Tons ========================================================================================= -- Yarn 10,100 6,840 -- Fider 12,000 12,000 Actual Production -- Yarn 9,464 8,221 -- Fiber 22,442 24,387 =========================================================================================37. Staff Strength =========================================================================================
Number of Employees as at 30 June Number of Employees
=========================================================================================
1,181 1,068
=========================================================================================38. Date of Authorisation for IssueThese financial statements were authorised for issue on 15 September 2006 by the Board of Directors of the Company 39. Events after the Balance Sheet date The Board of Directors have proposed a final dividend for the year ended 30 June 2006 of Rs. 2.50 per share (2005: Rs. 3/- per share), amounting to Rs. 85.171 million (2005: Rs 102.206 million) at their meeting held on 15 September 2006 for approval of the members at the annual general meeting to be held on 30 October 2006. Previously, appropriations other than dividends made subsequent to the balance sheet date were recorded in the statement of changes in equity. The Company, effective from the current year, has not recorded such appropriations in its statement of changes in equity as it is considered more appropriate for the purpose of presentation. The chance has been made consequent to the amendment made by the Securities and Exchange Commission of Pakistan in the Fourth Schedule to the Companies Ordinance, 1984 and the new policy is in accordance with the requirements of IAS-10 "Events After Balance Sheet Date". Such a change in policy should be accounted for retrospectively and comparative financial statements should be restated in accordance with the benchmark treatment of IAS-8 "Accounting policies, changes in Accounting Estimates and Errors". However, the change has no effect on the current or prior years' shareholders' equity and profit. 40. Corresponding Figures Corresponding figures have been re-arranged, wherever necessary, for the purposes of comparison. However, no significant re-arrangements have been made. 41. General Figures have been rounded off to the nearest thousand rupees unless otherwise stated. |