| Dewan Sugar Mills - 2009 |
|
BALANCE SHEET AS AT SEPTEMBER 30, 2009
==========================================================================================
Notes 2009 2008
(Rupees)
==========================================================================================
ASSETS NON-CURRENT ASSETS
Property, Plant and Equipment 5 3,691,077,783 3,934,553,558
Intangible assets 6 - 35,287,958
3,691,077,783 3,969,841,516
Long Term Deposits 7 4,658,250 4,718,250
CURRENT ASSETS
Stores, Spares and Loose Tools 8 391,054,179 324,473,243
Stock-in-Trade 9 748,380,332 828,021,153
Trade Debts - Unsecured,
Considered Good 10 40,417,734 136,382,940
Loans and Advances
Unsecured, Considered Good 11 1,306,252,065 1,445,876,487
Trade Deposits,
Short-Term Prepayments
and Current Balances with
Statutory Authorities 12 40,179,607 53,591,111
Other Receivables -Unsecured
Considered Good 17,397,520 15,227,745
Income Tax Refunds and Advances 59,163,453 60,631,204
Short term Investment - Related Party 13 28,392,000 58,695,000
Cash and Bank Balances 14 10,613,005 35,276,803
2,641,849,895 2,958,175,686
6,337,585,928 6,932,735,452
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Authorized Capital
50,000,000 (2008: 50,000,000)
Ordinary Shares of Rs. 10/- each 500,000,000 500,000,000
Issued, Subscribed and Paid-up Capital 15 365,119,920 365,119,920
Impairment loss on investment
to be charged in future 16 (24,230,375) -
Reserves and Surplus 17 (437,332,492) (367,654,360)
(96,442,947) (2,534,440)
Surplus on Revaluation of
Property, Plant & Equipment (Net) 18 908,423,367 1,001,024,640
NON-CURRENT LIABILITIES
Sponsors Loan - Unsecured 19 196,605,453 189,605,453
Redeemable Capital
Secured, Non-Participatory 20 - -
Term Finance - Secured 21 586,159,577 287,569,448
Liabilities Against Assets
Subject to Finance Lease -Secured 22 491,411 11,471,687
Deferred Liabilities 23 115,114,052 362,748,994
CURRENT LIABILITIES
Trade and Other Payables - Unsecured 24 1,145,799,380 1,605,614,554
Interest, Profit, Mark-up Accrued on
Loans and Other Payables 25 355,809,207 211,022,035
Short Term Finances - Secured 26 2,316,125,264 2,753,814,471
Current Portion of Non-Current Liabilities 27 746,045,910 452,620,144
Provision for Taxation 63,455,254 59,778,466
4,627,235,015 5,082,849,670
Contingencies & Commitments 28 - -
6,337,585,928 6,932,735,452
==========================================================================================PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED SEPTEMBER 30, 2009==========================================================================================
2009 2008
Notes (Rupees)
==========================================================================================
Sales - net 29 2,439,049,969 5,469,616,728
Cost of Sales 30 (2,419,704,363) (5,427,223,173)
Gross Profit 19,345,606 42,393,555
Administrative and General Expenses 31 (99,032,891) (114,870,774)
Distribution and Selling Costs 32 (16,812,193) (44,653,881)
Other Operating Income 33 653,645 3,639,269
Loss from Operations (95,845,833) (113,491,831)
Finance Cost 34 (297,870,179) (627,205,830)
Impairment Loss Charged 16 (77,377,625) -
Loss Before Income Tax (471,093,637) (740,697,661)
Taxation 35 237,509,232 201,394,682
Loss for the Year - After Income Tax (233,584,405) (539,302,979)
Loss Per Share - Basic 36 (6.40) (14.77)
==========================================================================================CASH FLOW STATEMENT FOR THEYEAR ENDED SEPTEMBER 30, 2009==========================================================================================
2009 2008
(Rupees)
==========================================================================================
Cash Flow from Operating Activities
(Loss) before Taxation (471,093,637) (740,697,661)
Adjustment for non-cash and other items:
Depreciation 244,672,205 308,221,321
Financial Charges 297,870,179 627,205,830
Gain on Disposal of Property,
Plant & Equipment (41,500) (1,205,874)
Intangible Assets Amortized 35,287,958 -
Impairment Loss on Investment 77,377,625 --
655,166,467 934,221,277
184,072,830 193,523,616
Changes in Operating
Assets and Liabilities
(Increase) /Decrease in Current Assets
Stores and Spares (66,580,936) 26,389,721
Stock in Trade 79,640,821 34,054,556
Trade Debts 95,965,206 75,257,427
Loans and Advances 139,624,421 10,143,567
Trade Deposits, Prepayments
& Other Balances 13,411,504 (22,351,275)
Other Receivables (2,169,775) (7,453,888)
Increase / (Decrease) in
Current Liabilities
Trade and Other Payables 39,805,432 (24,603,683)
Short Term Finances (327,389,207) 738,935,953
(27,692,534) 830,372,378
Taxes Refund/(Taxes paid)- Net 1,467,751 (34,044,833)
Financial Charges Paid (153,083,007) (505,459,628)
Dividend Paid (2,316) (35,325)
Gratuity Paid (6,448,922) (4,861,107)
(158,066,494) (544,400,893)
Net Cash Flows from
Operating Activities (1,686,198) 479,495,101
Cash Flow from Investing Activities
Long Term Deposits 60,000 32,184,013
Fixed Capital Expenditure (1,507,697) (374,897,766)
Proceed from Sales of
Property, Plant & Equipment 352,768 3,274,934
Net Cash Out Flows from
Investing Activities (1,094,929) (339,438,819)
Cash Flow from Financing Activities
Sponsors Loans 7,000,000 (233,203,031)
Syndicated Term Finance
Secured Net of Payment (6,250,000) 156,709,127
Lease Finance (22,632,671) (43,598,684)
Net cash out flows from
financing activities (21,882,671) (120,092,588)
Net (Decrease) /Increase
in Cash and Bank Balances (24,663,798) 19,963,694
Cash and Bank Balances
at Beginning of the year 35,276,803 15,313,109
Cash and Bank Balances at the end of the year 10,613,005 35,276,803
==========================================================================================STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED SEPTEMBER 30, 2009============================================================================================================================================
Impairment Loss
Issued, Surplus on on Investment to Accumulated Total
Subscribed & General Revaluation of be charged Oct- Profit/(Loss)
Paid-up Capital Reserve Investment 08 --Dec-2009
(Rupees)
============================================================================================================================================
Balance as on October 01, 2007 365,119,920 190,000,000 70,655,000 - (53,435,622) 572,339,298
Loss on Revaluation of Investment - - (141,960,000) - (141,960,000)
Loss for the year - - - - (539,302,979) (539,302,979)
Transfer of incremental depreciation
on the revalued items of
property, plant and equipment,
from the Surplus account (Net of Tax) - - - - 106,389,241 106,389,241
Balance as on September 30,2008 365,119,920 190,000,000 (71,305,000) - (486,349,360) (2,534,440)
Adjustment of Impairment Loss on Investment - - 71,305,000 - - 71,305,000
Impairment in the value of Investment taken
directly in to equity - - - (101,608,000) (101,608,000)
Charged to Profit & Loss for Jan 2009 - Sep - - - 77,377,625 77,377,625
Loss for the year - - - - (233,584,405) (233,584,405)
Transfer of incremental depreciation on the
revalued items of property, plant and equipment,
from the Surplus account (Net of Tax) - - - - 92,601,273 92,601,273
Balance as on September 30, 2009 365,119,920 190,000,000 - (24,230,375) (627,332,492) (96,442,947)
============================================================================================================================================NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 20091. Corporate Information Dewan Sugar Mills Limited (the Company) was incorporated in Pakistan, as a public limited company on June 27, 1982, under the Companies Act, 1913 (Now the Companies Ordinance, 1984) and its shares are listed on the Karachi and Lahore Stock Exchanges in Pakistan. The registered office of the company is situated at 7th Floor, Block A, Finance & Trade Centre, Shahrah-e-Faisal, Karachi, Pakistan; while its manufacturing facilities are located at Jillaniabad, Budho Talpur, Taluka: Mirpur Bathoro, District: Thatta, Sindh, Pakistan, and production facilities of Khoski in Sind, Pakistan. The Principal activity of the Company is production and sale of white crystalline refined sugar, processing and trading of by-products, and other related activities and allied products. The company employed 633 persons (2008:679 persons) at the balance sheet date. 1.1. Going Concern Assumption The financial statements for the year ended September 30, 2009 reflect loss after taxation of Rs.233.584 (2008: Rs.539.303) million and as of that date it has accumulated losses of Rs.627.332 (2008: Rs. 486.349) which has been eroded its Capital resulted in net capital deficiency of Rs. 96.443 (2008: 2.535) million and its current liabilities exceeded its current asset by Rs.1.985 (2008: Rs.2.l24) billion. The working capital constraints resulted in low capacity utilization ultimately leading to reduce gross profit situation further the Company is facing liquidity difficulties to ensure timely repayments of debts owing to financial institutions and short term finance facilities have not been renewed by certain bank. Following course, certain lenders have gone into litigation for repayment of liabilities through attachment and sales of Company's hypothecated / mortgaged properties. These conditions indicated the existence of material uncertainty which may cast significant doubt about the company's ability to continue as a going concern. These financial statements have been prepared on going concern assumption because the above conditions are temporary and would reverse. The management is confident that the outcome will be positive as the company is negotiating reprofiling of the debt with all the lenders and is expected to be closed in near future. Accordingly, during the year, the company has approached its lenders for the restructuring of its entire debts in the following manner: (a) All the debts obligation of the Company be converted into Long Term Loan, including of Rs. 1.5 billion as non interest/ markup bearing, of nine years inclusive of grace period of 2 years. (b) The principal to be paid in equal quarterly installments with first such payment following due after three months from the end of grace period; and (c) Markup payable as on December 31, 2008 to be freezed and paid quarterly over the period of three years from the date of restructuring. The management believes that the restructuring proposal presented is workable and would enable the company to service its debts. Therefore, the management is confident that the proposal will be accepted by its lenders accordingly, these financial statements have been prepared on a going concern basis. 2. Statement of Compliance These financial statements have been prepared in accordance with approved accounting standards, as applicable in Pakistan. Approved accounting standards comprise of such international Financial Reporting Standards (IFRS) issued by International Accounting Standard Board as notified under the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail." 2.1. Basis of Preparation These financial statements have been prepared under the historical cost convention except revalued assets which are stated at revalued amounts and certain investments which are carried at revalued amounts. The areas involving a higher degree of judgment or complexity, are areas where assumptions and estimates are significant to the financial statements, are as follows: i) Staff retirement benefits ii) Income Taxes iii) Revaluation of Property, Plant and Equipment iv) Estimation of Residual values and useful lives of Property, Plant and Equipment New accounting standards and IFRIC interpretations that are not yet effective The following standards, amendments and interpretations of approved accounting standards are only effective for accounting periods beginning on or after 1 July, 2009 and are either not relevant to the Company's operations or are not expected to have significant impact on the Company's financial statements other than certain increased disclosures in the certain cases: Initial Application of a standard or an Interpretation The following standards, amendments and interpretations become effective during the current year; IFRS 7 - Financial instruments: Disclosures (effective for annual periods beginning on or after 28 April 2008) supersedes IAS 30 - Disclosures in the Financial Statements of Banks and Similar Financial Institutions and the disclosure requirements of IAS 32 - Financial Instruments: Disclosure and Presentation. The application of the standard is not expected to have significant impact on the Company's financial statements other than increase in disclosures. IAS 29 - Financial Reporting in Hyperinflationary Economics (effective for annual periods begin fling on or after 28 April 2008). The Company does not have any operations in Hyperinflationary Economies and therefore the application of the standard is not likely to have an effect on the Company's financial statements. IFRIC 13 - Customer Loyalty Programmes (effective for annual periods beginning on or after 01 July 2008) addresses the accounting by entities that operate or otherwise participate in customer loyalty programmes under which the customer can redeem credits for awards such as free or discounted goods or services. The application of IFR1C 13 is not likely to have an effect on the Company's financial statements. IFRIC 14 IAS 19- The Limit on Defined Benefit Asset, Minimum Funding Requirements and their interaction (effective for annual periods beginning on or after 1 January 2008). IFRIC 14 - Clarifies when refunds or reductions in future contributions in relation to defined benefit assets should be regarded as available and provides guidance on minimum funding requirements (MFR) for such asset. The interpretation has no effect on Company's financial statements for the year ended 30 September2009. Standards, Interpretations and Amendments not yet effective The following standards, interpretations and amendments of approved accounting standards are effective for accounting periods beginning from the dates specified below. These standards are either not relevant to the Company's operations or are not expected to have significant impact on the Company's financial statements other than increase in disclosures in certain cases: Revised IAS 1 - Presentation of financial statements (effective for annual periods beginning on or after 1 January 2009) Revised IAS 23 - Borrowing costs (effective for annual periods beginning on or after 1 January 2009) IAS 27 'Consolidated and separate financial statements' (effective for annual periods beginning on or after 1 January 2009). Amended IAS 27 Consolidated and Separate Financial Statements (effective for annual periods beginning on or after 1 July 2009) Amendment to IAS 32 Financial Instruments: Presentation and IAS I Presentation of Financial Statements (effective for annual periods beginning on or after 1 January 2009) Amendments to IAS 39 and IFRIC 9- Embedded derivatives (effective for annual periods beginning on or after 1 January 2009). Amendments to IAS 39 Financial Instruments: Recognition and measurement - Eligible hedged items (effective for annual periods beginning on or after 1 July 2009). Amendment to IFRS 2 Share-based Payment - Vesting Conditions and Cancellations (effective for annual periods beginning on or after 1 January2009). Amendment to IFRS 2 - Share-based Payment- Group Cash-settled Share-based Payment Transactions (effective for annual periods beginning on or after 1 January2010). Revised IFRS 3 Business Combinations (applicable for annual periods beginning on or after 1 July 2009). IFRS 4 - Insurance Contracts (effective for annual periods beginning on or after 1 January 2009). Amendment to IFRS 7 - Improving disclosures about Financial Instruments (effective for annual periods beginning on or after 1 January 2009). IFRS 8 'Operating segments' (effective for annual periods beginning on or after 1 January 2009). IFRIC 15-Agreement for Construction of Real Estate (effective for annual periods beginning on or after 1 October2009). IFRIC 16- Hedge of Net Investment in a Foreign Operation (effective for annual periods beginning on or after 1 October2008). IFRIC-17 Distributions of Non-cash Assets to Owners (effective annual periods beginning on or after 1 July2009). IFRIC 18 Transfers of Assets from Customers (to be applied prospectively to transfers of assets from customers received on or after 01 July 2009). 3. Approval of Financial Statements These financial statements were resolved as approved by the Board of Directors and authorized for issue on January 6, 2010. 4. Significant Accounting Policies 4.1. Post Employment Benefits - Defined Benefit Plan The Company operated an unfunded gratuity scheme for its staff till 31 March 2007 and changed its policy for Staff retirement benefit from Gratuity to Provident Fund from April 1, 2007. 4.2. Trade and Other Payables Liabilities for trade and other payables, are carried at cost which is the fair value of the consideration to be paid in the future in respect of the goods and services received. 4.3. Taxation Current Year Provision in respect of current year's taxation is based on the method of taxation prescribed under the Income Tax Ordinance, 2001, whereby taxable income is determined, and tax charged at the current rates of taxation after taking into account tax credits, rebates available, if any, and the income falling under the presumptive tax regime, or the minimum tax liability is determined on whichever is higher basis, and in the event of a current or accumulated carried forward tax loss. Deferred Deferred tax is provided, using the balance sheet liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amount for financial statement reporting purposes. Deferred tax assets are recognized for all deductible temporary. differences to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, tax credits and unused tax losses can be utilized. Deferred tax liabilities are generally recognized for all temporary taxable differences. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply when the asset is realized or the liability is settled, based on the tax rates that have been enacted or substantially enacted at the balance sheet date. 4.4. Property, Plant and Equipment Property, Plant and Equipment are stated at cost less accumulated depreciation and impairment losses, if any or revalued amounts; except for lease hold land which is stated at cost, and capital works in progress which are stated at cost accumulated up to the balance sheet date. Leased The company accounts for fixed assets acquired under finance leases by recording the assets and the related liability. These amounts are determined as the fair values or discounted value of minimum lease payments; whichever is the lower, as at inception, less accumulated depreciation and impairment losses. Financial charges are allocated to the accounting period in a manner so as to provide a constant periodic rate of charge on the outstanding liability. Depreciation Depreciation is charged on monthly basis using the reducing balance method whereby the cost of an asset is written off over its estimated useful life. Previously the same was charged at an annual basis. Further, the rates applied are in no case less than the rates prescribed by the Central Board of Revenue. The depreciation method and useful lives of the items of property, plant and equipment are reviewed periodically and altered if circumstances or expectations have changed significantly. Any change is accounted for as a change in accounting estimate by changing the depreciation charge for the current and future periods. Depreciation is charged for the full month in the period of acquisition and is not charged for the month in which it is disposed. Depreciation on Plant and Machinery of Board & Panel Unit, Poly propylene Unit & Distillery Unit on unit of production method. In accordance with the IAS- 16 every Company should select the method for charging depreciation that most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The Method is applied consistently from period to period unless there is a change in the expected pattern of consumption of those future economic benefits. The IAS further requires that such pattern of flow of economic benefits should be periodically reviewed and reassessed. Repairs, renewals and maintenance Major repairs and renewals are capitalized- Normal repairs and maintenance are charged as expense when incurred. Disposal/Retirement of Assets Gains or losses on disposal or retirement of assets are determined as the difference between the sale proceeds and the carrying amounts of these assets, and are included in the income currently. When revalued assets are sold, the relevant undepreciated surplus is transferred directly by the company to its accumulated profit / loss. Capital Works-in-Progress All expenditures connected with specific assets and incurred during development, installation and construction period are carried as capital work-in-progress. These are transferred to the specific assets as and when these assets are available for commercial or intended use. Surplus on Revaluation Increases in the carrying amount arising on revaluation of property, plant and equipment are credited to surplus on revaluation of property, plant and equipment. Decreases that offset previous increases of the same assets are charged against this surplus, all other decreases are charged to income. Each year the depreciation based on revalued carrying amount of the asset (the depreciation charged to income) and depreciation based on the assets original cost is transferred from revaluation of property, plant and equipment to unappropriated profit. All transfers to / from surplus on revaluation of property, plant and equipment are net of applicable taxes. In accordance with section 235 of the Companies Ordinance 1984, as clarified by Securities and Exchange Commission of Pakistan, an amount equal to the incremental depreciation charged on revalued assets is transferred from surplus on revaluation of Fixed Assets to retained earning. 4.5. Leases Finance leases, which transfer to the company, substantially all the risks and benefits incidental to ownership, are capitalized at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. In the case of operating leases, rentals are accounted for in the current period profit and loss account, while liability for future payments are disclosed as commitments of the company. 4.6. Investment in Associated Companies Investment in associated undertakings is classified as an 'Available-for-Sale Financial Asset', whereby the investment, being a quoted one, is restated to its fair value at the close rate of the investment on the year end day. The resulting gain is transferred to equity in the reserve for the surplus on revaluation of investment via the statement of changes inequity. A decline in the value of investment is first offset against the available surplus for the revaluation of the investment, exceeding which it is then charged to the current period profit and loss account. 4.7. Stores, Spares and Loose Tools These are stated at the lower of cost and net realizable value. The cost of inventory is based on the weighted average cost measurement. Items in transit are stated at cost accumulated up to the date of the balance sheet. 4.8. Stock-in-Trade These are valued as follows =======================================================================
Raw Material : At lower of weighted average
cost and net realizable value.
Cost of raw material and components
represents invoice value
plus other charges paid thereon.
Finished Goods : At lower of weighted average
cost and net realizable value.
Cost of finished goods comprises
of prime cost and an
appropriate portion of production overheads.
Work-in-Process : At lower of weighted average
cost and net realizable value.
Weighted average cost comprises
of the cost of raw materials
only. Conversion costs are not
included as these are insignificant.
Stock in Transit : At cost plus direct expenses accumulated
up to the balance sheet date.
Molasses : Cost in relation to Stock of
molasses held by distillery acquired
from out side sugar mills is valued
at lower of weighted average
cost and net realizable value where
as the molasses transferred
by the mill to distillery are valued
on the basis mentioned in note 4.9
Stock at fair price: At cost calculated on the
first-in-first-out method of valuation.
Packing Material : At lower of weighted average
cost and net realizable value.
=======================================================================Net Realizable Value signifies the estimated selling price in the ordinary course of business less costs necessarily to be incurred in order to make the sale.4.9. Inter Segment transfer Transfer between business segment are recorded at net realizable value. 4.10. Trade Debts and Other Receivables Trade debts originated by the company are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. A review of the carrying amount is made at each year end. An estimate for a doubtful receivable is made when collection of the whole or part of the amount is no longer probable. Bad debts are written off as incurred. 4.11. Foreign Currency Translation and Hedging Transactions in foreign currencies are initially recorded using the rates of exchange ruling at the date of transaction. Monetary assets and liabilities in foreign currencies are translated into Rupees at the exchange rates prevailing on the balance sheet date. In order to hedge its exposure to foreign exchange risks, the company, at times, enters into forward exchange contracts. Such transactions are translated at contracted rates. Exchange differences on translating of foreign currency are charged to the current period Profit and Loss Account. 4.12. Revenue Recognition - Revenue from sales is recognized on dispatch of goods to customers. - Dividend income is recognized on the basis of declaration by the investee company. - Export sales are recorded when shipped. - Interest on Saving accounts and Bank Deposits is recorded on accrual basis. 4.13. Borrowing Cost Borrowing cost directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets until such time the assets are ready for their intended use. All other borrowing costs are charged to income in the period in which they are incurred. 4.14. Provisions A provision is recognized in the balance sheet when the company has a legal or constructive obligation, and, as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and that a reliable estimate can be made for the amount of this obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. 4.15. Financial Instruments All financial assets and liabilities are recognized at the time when the company becomes a party to the contractual provisions of the instrument. Any gain or loss on derecognizing of the financial assets and financial liabilities are taken to profit and loss account currently. Financial assets are derecognized when the company loses control of the contractual rights that compromise the financial asset. Financial liabilities are removed from the balance sheet when the obligation is extinguished, discharged, cancelled or expired. Financial instruments carried on the balance sheet includes investments, deposit trade debts, loan and advances, receivables, cash and bank balances, redeemable capital, liabilities against assets subject to finance lease, creditors, running finance and other payables. The particular recognition method adopted is disclosed in the individual policy statements associated with each item. Assets or liabilities that are not contractual in nature and that are created as a result of statutory requirements imposed by the government are not the financial instruments of the company. Financial assets and liabilities are offset when the company has a legally enforceable right to offset the same and intends to settle either on a net basis or to realize the asset and settle the liability simultaneously. 4.16. Cash and Cash Equivalents For the purpose of the cash flow statement, cash and cash equivalents comprise cash and bank balances. 4.17. Impairment of Assets The carrying amounts of the assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount, whereby the asset is written down to the recoverable amount and the impairment loss is recognized in the profit and loss account. The recoverable amount of property, plant and equipment is the greater of the net selling price and its value in use. 4.18. Related Party Transactions and Transfer Pricing All transactions with related parties are carried out by the company at arm's length prices, and the transfer price is determined in accordance with the methods prescribed under the Companies Ordinance, 1984, and as approved by the board of directors of the company. 4.19. Loans, Advances and Other Receivables Loans, advances and other receivables are recognized initially at cost, and subsequently at their amortized! residual cost. 4.20. Short Term and Long Term Loans Loans, advances and other receivables are recognized initially at cost, and subsequently at their amortized/ residual cost. 4.21. Business Segments Business segments are distinguishable components of the company that are engaged in providing an individual product or a group of related products and that is subject to risk and returns that are different from those of other business segments. The business segments of the company are located in the same geographical location. The assets of a segment include all operating assets used by a segment and consists principally of receivables, inventories and property, plant and equipment, net of allowances and provisions, if any. Segment liabilities include all operating liabilities consisting principally of deferred liabilities, other payables and accrued liabilities. The carrying amount of identifiable assets and liabilities are directly attributed to respective segments. The carrying amount of jointly used assets and liabilities of sugar and allied segments are classified as unallocated assets and liabilities. Inter-segment transfers are effected at cost to the transferring department. All identifiable expenses are directly attributed to the respective segments. 4.22. Intangible Assets Computer software costs that are directly associated with the computer and computer controlled machines which cannot operate without the related specific software, are included in the costs of the respective assets. Software which are not an integral part of the related hardware are classified as intangible assets. 5. Property, Plant and Equipment ==========================================================================================
Note 2009 2008
RUPEES
==========================================================================================
Operating Property, Plant and Equipment 5.1 3,328,217,536 3,571,693,312
Capital Work-in-Progress 5.2 362,860,247 362,860,246
3,691,077,783 3,934,553,558
==========================================================================================5.1. Operating Property, Plant and Equipment============================================================================================================================================
COST DEPRECIATION
Written Down
PARTICULARS As at Additions/ As at Rate As at For the As at Value as at
October 01, (Disposals) September 30, % October 01, year/ September 30, September 30,
2008 2009 2008 (Adjustment) 2009 2009
============================================================================================================================================
Free Hold Land 86,053,029 - 86,053,029 - - - - 86,053,029
Factory Building on
Free Hold Land 860,492,552 - 860,492,552 10 299,617,076 53,586,954 353,204,030 507,288,522
Labour Quarters on
Free Hold Land 233,773,333 - 233,773,333 25 204,002,017 6,646,543 210,648,560 23,124,773
Plant and Machinery
Owned 3,899,910,810 454,667 3,940,734,465 10 1,333,475,695 169,089,898 1,517,014,052 2,423,720,413
40,368,988 14,448,459
Leased 263,972,328 (40,368,988) 223,603,340 10 30,115,600 1,798,169 17,465,310 206,138,030
(14,448,459)
Furniture and Fixtures 44,074,271 101,550 44,175,821 10 26,627,511 1,673,923 28,301,434 15,874,387
Office Equipment 53,654,748 252,480 53,907,228 10 27,073,562 2,553,974 29,627,536 24,279,692
Vehicles
Owned 120,540,966 699,000 123,760,966 20 86,805,866 6,485,582 94,464,837 29,296,129
3,210,000 1,551,121
(689,000) (377,732)
Leased 24,503,000 (3,210,000) 21,293,000 20 7,564,398 2,837,162 8,850,439 12,442,561
(1,551,121)
2009 5,586,975,037 1,507,697 5,587,793,734 2,015,281,725 244,672,205 2,259,576,198 3,328,217,536
(689,000) (377,732)
============================================================================================================================================
COST DEPRECIATION
Written Down
PARTICULARS As at Additions/ As at Rate As at For the As at Value as at
October 01, (Disposals) September 30, % October 01, year/ September 30, September 30,
2007 2008 2007 (Adjustment) 2008 2008
============================================================================================================================================
Free Hold Land 86,053,029 - 86,053,029 - - - - 86,053,029
Factory Building on
Free Hold Land 860,492,552 - 860,492,552 10 240,369,515 59,247,561 299,617,076 560,875,476
Labour Quarters on
Free Hold Land 233,773,333 - 233,773,333 25 195,445,121 8,556,896 204,002,017 29,771,316
Plant and Machinery
Owned 3,847,229,138 52,681,672 3,899,910,810 10 1,118,060,931 215,414,764 1,333,475,695 2,566,435,115
Leased 263,972,328 - 263,972,328 10 20,722,052 9,393,548 30,115,600 233,856,728
Furniture and Fixtures 43,458,686 615,585 44,074,271 10 24,797,612 1,829,899 26,627,511 17,446,760
Office Equipment 52,160,941 1,493,807 53,654,748 10 24,312,564 2,760,998 27,073,562 26,581,186
Vehicles
Owned 118,829,066 3,625,900 120,540,966 20 81,188,114 7,245,503 86,805,866 33,735,100
(1,914,000) (1,627,751)
Leased 25,739,000 1,200,000 24,503,000 20 4,445,434 3,772,153 7,564,398 16,938,602
(2,436,000) (653,189)
2008 5,531,708,073 59,616,964 5,586,975,037 1,709,341,343 308,221,321 2,015,281,725 3,571,693,312
(4,350,000) (2,280,940)
============================================================================================================================================5.1. a The segment, and category wise allocation of depreciation is as follows:==========================================================================================
2009 2008
RUPEES
==========================================================================================
Cost of Sales
Sugar Unit 204,980,179 226,816,066
Polypropylene Unit 8,128,988 15,669,479
Board and Panel Unit 6,354,858 12,540,431
Distillery Unit 16,318,914 43,095,622
Administrative and General Expenses
Sugar Unit 8,270,902 9,423.412
Polypropylene Unit 255,245 2 72.636
Board and Panel Unit 69,874 80,491
Distillery Unit 293,245 323,184
244,672,205 308,221,321
==========================================================================================5.1. b. The company arranged a revaluation of Property, Plant and Machinery of its Sugar, Polypropylene and Board & Panel units resulting in incremental surplus of Rs. 1,113,326,520/- as at September 30, 2006. The surplus had been added to the carrying amount of these fixed assets and credited to the surplus on revaluation of fixed assets account under Section 235 of the Companies Ordinance, 1984. These assets were revalued by M/s. Younus Mirza Associates (Private) Limited on the 'Prevailing Market Basis'. Had there been no such revaluation made by the company, the written down values of these assets would have been as under:==========================================================================================
2009 2008
RUPEES
==========================================================================================
Factory building on freehold land 217,995,558 241,023.318
Labour quarters on freehold land 4,965,361 6,392,510
Plant and Machinery 1,239,186,351 1,369,628,170
1,462,147,270 1,617,043,998
==========================================================================================5.1. c Disposal of Property, Plant & Equipment======================================================================================================================================================
2009
Original Accumulated W.D.V Proceed Gain on Mode of Particulars of
Description Cost Depreciation Amount Disposal Disposal Purchaser
======================================================================================================================================================
Santro Executive 2006
Reg. No. AKE-746 689,000 377,732 311,268 352,768 41,500 Negotiation Mian Kauser Hameed
New Garden Town, Lahore
689.000 377,732 311,268 352,768 41,500
2008
Description Original Accumulated W.D.V. Claim Gain on Mode of Name of
Cost Depreciation Received Disposal Disposal Insurance Co.
Suzuki Potohar Jeep
Reg. No. BD-2241 618,000 233,771 384,229 525,000 40,771 Insurance Claim Adamjee Insurance Co
Suzuki Potohar Jeep
Reg. No. BD-2271 618,000 233,771 384.229 525,000 140,771 insurance Claim Adamjee Insurance Co
Mitsubishi Lancer
Reg. No. KG-6296 925,000 847,811 77,189 400,000 322,811 Insurance Claim Adamjee Insurance Co
Mini Bus (Coach) 12 Seater
Reg. No. CK-91 13 950,000 756,458 93,542 700,000 506,458 Insurance Claim Adamjee Insurance Co
Star Motor Cycle
Reg. No. KBD-5284 39,000 23,482 15,518 25,000 9,482 Insurance Claim Adamjee Insurance Co
Hino Pak Truck 1,200,000 185,647 1,014,353 1,099.934 85.581 Insurance Claim Adamjee insurance Co
4.350,000 2,280,940 2,069,060 3,274,934 1,205,874
======================================================================================================================================================5.2. Capital work-in-Progress============================================================================================
Balance as at Transfers to Balance as at
October 01, Additions operating September 30,
2008 assets 2009
============================================================================================
Civil Works 19,021,960 - - 19,021,960
Plant and Machinery-Owned 343,838,287 - - 343,838,287
2009 362,860,247 - - 362,860,247
2008 47,579,443 343,838,287 28,557,484 362,860,246
============================================================================================6. Intangible Assets==========================================================================================
2009 2008
RUPEES
==========================================================================================
Opening Balance 35,287,958 35,287,958
Less: Written off during the year (35,287,958) -
Closing Balance - 35,287,958
==========================================================================================The above Intangible assets are related to SAP Computer Software. The amount has been fully amortized during the year.7. Long Term Deposits and Prepayments ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Lease Security Deposits 4,658,250 4,718,250
==========================================================================================8. Stores, Spares and Loose Tools==========================================================================================
2009 2008
RUPEES
==========================================================================================
Stores 293,290,634 243,071,683
Spares 97,763,545 81,401,560
391,054,179 324,473,243
==========================================================================================9. Stock-in-Trade==========================================================================================
2009 2008
RUPEES
==========================================================================================
Raw Materials
Polypropylene Unit 8,208,859 21,444,427
Board and Panel Unit 993,163 67,372
Molasses (Distillery Unit) 88,497,229 43,042,144
97,699,251 64,553,943
Work-in-Progress
Sugar Unit 2,542,831 2,998,342
Polypropylene Unit 8,834,187 9,557,536
Board and Panel Unit 3,853,395 4,266,494
Distillery Unit 338,846 338,846
15,569,259 17,161,218
Finished Goods
Refined Sugar 452,076,573 529,959,571
Fertilizer 855,644 1,032,544
Molasses 525,720 -
Polypropylene Unit 31,817,429 11,781,012
Boards and Panels 7,946,975 10,647,556
Industrial Alcohol 141,889,481 189,706,045
635,111,822 743,126,728
Stock-in-Transit
Polypropylene Raw Material - 3,179,264
748,380,332 828,021,153
==========================================================================================10. Trade Debts - Unsecured, Considered Good==========================================================================================
2009 2008
RUPEES
==========================================================================================
Sugar Unit 4,269,215 39,600,868
Polypropylene Unit 14,972,543 55,229,337
Board and Panel Unit 21,142,281 38,525,040
Distillery Unit 33,695 3,027,695
40,417,734 136,382,940
==========================================================================================11. Loans and Advances - Unsecured, Considered Good==========================================================================================
Note 2009 2008
RUPEES
==========================================================================================
Advances
Against Imports 133,129,820 97,937,224
To Contractors 364,990,895 364,911,587
To Growers 341,929,820 488,971,537
To Staff 11.1 7,906,800 9,857,622
Against Stores and Expenses 101,516,067 137,149,190
Sundry 25,408,161 37,345,201
Others 11.2 331,370,502 309,704,126
1,306,252,065 1,445,876,487
==========================================================================================11.1. Advance to Staff includes Rs.3.94 (2008: Rs. 4.85) million due from the executives of the company. The maximum amount due from these executives at any month end was Rs.3.94 (2008: Rs. 6.20) million.11.2. The amount principally represents amount advanced under the toll manufacturing arrangements made by the company with associated undertakings amounting to Rs. 331.371 (2008:309.704) million. 12. Trade Deposits, Short-Term Prepayments and Current Balances with Statutory Authorities ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Security Deposits 37,236,870 49,775,426
Prepayments / Others 2,082,861 2,955,809
Export Rebate Receivable 859,876 859,876
40,179,607 53,591,111
==========================================================================================13. Short term Investment in Related Party - Available for Sale=============================================================================
No of Ordinary Shares of Rs. 10/- each
=============================================================================
2009 2008
=============================================================================
13,000,000 13,000,000 Invested in cash
650,000 650,000 received as full paid
13,650,000 13,650,000 bonus shares 130,000,000 130,000,000
Surplus on revaluation of investment (101,608,000) (71,305,000)
28,392,000 58,695,000
Market Value as at September 30 2.08 4.30
(Rupees per share Percentage of Equity held 15.34% 17.71%
=============================================================================13.1. The Market value of Dewan Farooque Motors Limited as at September 30, 2009 was Rs. 2.08 per share and as of financial statement issuing date the market value of above share are Rs 1.50 per share. Had the company account for the effect of change in market value of accounts issuing date the value of investment would have been decreased by Rs. 7.917 million and the loss for the current period have been increased by Rs. 4.766 million.14. Cash and Bank Balances ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Cash in Hand 2,467,848 2,282,862
Cash at Banks
Current Accounts 7,010,138 32,463,052
Deposit Account 1,135,019 530,889
8,145,157 32,993,941
10,613,005 35,276,803
==========================================================================================15. Issued, Subscribed and Paid-up Capital============================================================================================
2009 2008
============================================================================================
No of Ordinary Shares of Rs. 10/- each
11,430,000 11,430,000 Fully paid in cash 114,300,000 114,300,000
18,255,996 18,255,996 Add: 100 right issue 182,559,960 182,559,960
of the ordinary share
capital of the company,
29,685,996 29,685,996 subscribed at par in cash. 296,859,960 296,859,960
6,825,996 6,825,996 Issued as fully paid bonus shares 68,259,960 68,259,960
36,511,992 36,511,992 365,119,920 365,119,920
============================================================================================15.1. The shareholders are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at the meetings of the company. All shares rank equally in respect to the company's residual assets.15.2. The pattern of shareholding, as required under the Code of Corporate Governance issued by the Securities and Exchange Commission of Pakistan, is attached at the end of this report. 16. Impairment loss on investment to be charged in future ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Deficit on investment transferred to Impairment
beginning of the year (71,305,000) -
Provision during the year (30,303,000) -
(101,608,000) -
Impairment loss charged during the year 77,377,625 -
Impairment loss to be charge in
next following Quarter from
October 1, 2009 to December 31, 2009 (24,230,375) -
==========================================================================================16.1. Impairment in value of available for sale investment has been taken directly to equity as per relaxation provided by Securities & Exchange Commission of Pakistan (SECP) vide its notification SRO 150(I)/2009 dated February 13, 2009. The aforesaid treatment is not in line with the requirements of International Accounting Standard 39 'Financial Instruments - Recognition and Measurement' (IAS-39). IAS -39 requires that any impairment in value of available for sale financial assets should be recognized in profit and loss account for the period. Had the treatment in accordance with IAS-39 been made, the loss for the period would have been higher by Rs.24.230 millions. The said impairment loss including any adjustment / effect for the price movements during the quarter of calendar year 2009 will be taken to Profit and Loss Account on quarterly basis during the calendar year ending on 31-12-2009.17. Reserves and Surplus ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Capital Reserve
Surplus on Revaluation of Investment (71,305,000) (71,305,000)
Deficit on investment transferred to Impairment 71,305,000 -
- (71,305,000)
Revenue Reserves
General Reserve 190,000,000 190,000,000
Accumulated Loss (627,332,492) (486,349,360)
(437,332,492) (367,654,360)
==========================================================================================18. Surplus on Revaluation of Property, Plant and Equipment (Net) Surplus on Revaluation of==========================================================================================
2009 2008
RUPEES
==========================================================================================
Property, Plant and Equipment (Beg.) 1,540,037,909 1,703,713,664
Less: Surplus transferred to
unappropriated profit on account of
incremental depreciation - Net of tax (92,601,273) (106,389,241)
Related deferred tax liability (49,862,224) (57,286,514)
(142,463,497) (163,675,755)
1,397,574,412 1,540,037,909
Related Deferred Tax Liability
Less: Opening balance 539,013,269 596,299,783
Less: Reversal of Deferred Tax liability
on account of incremental
depreciation charged during the year (49,862,224) (57,286,514)
489,151,045 539,013,269
908,423,367 1,001,024,640
==========================================================================================19. Sponsors Loan � UnsecuredThis represents interest/mark-up free unsecured loan from sponsors of the ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Company and repayable on demand. 196,605,453 189,605,453
==========================================================================================20. Redeemable Capital - Secured, Non-Participatory==========================================================================================
Note 2009 2008
RUPEES
==========================================================================================
Privately Placed Term Finance
Certificates - Series 2 20.1 12,495,000 12,495,000
Classified as current maturity of liability
Overdue 12,495,000 12,495,000
- -
==========================================================================================20.1. The company had in issued ten PPTFC's of Rs. 5,000,000/- each to a consortium of banks, with RBS formerly (ABN AMRO Bank) as the agent. The return on these PPTFC's, being a floating rate, was linked to the discount rate of the State Bank of Pakistan, as the base rate, minus 2% per annum; with a floor limit of 6% and a ceiling of 12% per annum. The redemption period is five years, with the bi-annuat payment starting from December 2003. A first pari passu charge on the present and future moveable assets of the company, including plant and machinery but excluding stocks and book debts, amounting to Rs. 66.67 million, in favour of the trustee was issued as security in respect of the arrangement. The total outstanding reflects as overdue installments shown in current portion.21. Term Finance � Secured ==========================================================================================
Note 2009 2008
RUPEES
==========================================================================================
Term Finance Facility No. 1 21.1 90,975,000 101,250,000
Term Finance Facility No. 2 21.2 125,000,000 175,000,000
Term Finance Facility No. 3 21.3 50,000,000 60,000,000
Term Finance Facility No. 4 21.4 77,777,780 97,222,224
Term Finance Facility No. 5 21.5 21,428,568 24,999,997
Term Finance Facility No. 6 21.6 10,000,000 15,000,000
Term Finance Facility No. 7 21.7 200,000,000 200,000,000
Term Finance Facility No. 8 21.8 55,000,000 55,000,000
Term Finance Facility No. 9 21.9 499,618,290 -
Term Finance Facility No. 10 21.10 110,300,000 -
1,240,099,638 728,472,221
Less: Repayments during the year 6,250,000 98,290,873
1,233,849,638 630,181,348
Classified as current portion
Current Maturity 296,582,530 151,478,169
Overdue Installments 351,107,531 191,133,731
Classified as current maturity of liability 647,690,061 342,611,900
586,159,577 287,569,448
==========================================================================================21.1. The syndicate term finance facility of Rs. 405 million has been obtained from a consortium of banks with RBS formerly (ABN AMRO Bank) as the agent. The markup on the facility is a floating rate, linked to the discount rate of the State Bank of Pakistan, as the base rate, minus 2% per annum; with a floor limit of 6% and a ceiling of 12% per annum. The tenure of this facility is for five years including one year grace period. Payments are required to be made in eight equal bi-annual installments of Rs. 50.625 million each, commencing from December 2004. A first pari passu charge by way of hypothecation over all present and future of fixed assets of the company, and a first pari passu equitable mortgage over the immoveable property of the company, amounting to Rs. 540 million, has been registered as security in respect of the arrangement. The total outstanding reflects as overdue installments shown in current portion.21.2. The syndicate term finance facility of Rs. 400 million was obtained from a consortium of banks with National Bank of Pakistan acting as the agent. The facility was obtained to partly finance the Distillery Unit being set up by the company. The markup on the facility is a floating rate, linked to the six month KIBOR (Ask Side) as the base rate, plus 4% per annum. The tenure of this facility is for five years. Payments are required to be made in sixteen equal quarterly installments of Rs. 25 million each, commencing from July 2005. A first pari passu charge by way of hypothecation over plant and machinery, amounting to Rs. 533 million, has been registered as security in respect of the arrangement. The total outstanding reflects as overdue installments shown in current portion. 21.3. The term finance facility of Rs. 100 million was obtained from Pak Kuwait Investment Company (Private) Limited. The facility was obtained to partly finance the Distillery Unit being set up by the company. The markup on the facility is a floating rate, linked to the six month KIBOR (Ask Side) as the base rate, plus 2.75% per annum. The tenure of this facility for five years. Payments are required to be made in ten equal bi-annual installments of Rs. 10 million each, commencing from November 2005. A pari passu charge by way of hypothecation over plant and machinery, amounting to Rs. 133.33 million, has been registered as security in respect of the arrangement. The total outstanding reflects the payment of five bi-annual installments that shall be paid by November 2010, which comprise of over due installments as well as current maturity shown in current portion. 21.4. The term finance facility of Rs. 175 million has been obtained from the National Bank of Pakistan, in order to partly finance the acquisition of the assets of Khoski Sugar Mills. The markup on the facility is a floating rate, linked to the three months KIBOR (Ask Side) as the base rate, plus 2.75% per annum. The tenure of this facility is for five years. Payments are required to be made in twenty equal quarterly installments of Rs. 8.750 million each, commencing from December 2005. A pan passu charge by way of hypothecation over plant and machinery, amounting to Rs. 233.33 million, has been registered as security in respect of the arrangement. The total outstanding reflects the payment of the eight quarterly installments that shall be paid by March, 2010. which comprise of over due installments as well as current maturity shown in current portion. 21.5. The term finance facility of Rs. 50 million has been obtained from the Saudi Pak Industrial and Agricultural Investment Company (Private) Limited, in order to partly finance the acquisition of the assets of Khoski Sugar Mills. The markup on the facility is a floating rate, linked to the three months KIBOR (Ask Side) as the base rate, plus 3% per annum. The tenure of this facility is for three and a half years. Payments are required to be made in fourteen equal quarterly installments of Rs. 3.57 million each, commencing from March 2006. A pari passu charge by way of hypothecation over plant and machinery, amounting to Rs. 66.67 million, has been registered as security in respect of the arrangement. The total outstanding reflects the payment of six quarterly installments that shall be paid by June, 2009, shown as overdue installments. 21.6. The term finance facility of Rs. 20 million has been obtained from the Orix Investment Bank Limited, in order to finance the acquisition of certain identifiable assets of the company. The markup on the facility is a floating rate, linked to the three months KIBOR (Ask Side) as the base rate, plus 3.25% per annum. The tenure of this facility is for twelve months. Payments are required to be made in four equal quarterly installments of Rs.5 million each, commencing from 13 September 2007. A pari passu charge by way of hypothecation over plant and machinery, amounting to Rs. 26.67 million, has been registered as security in respect of the arrangement. The total outstanding reflects the payment of the two quarterly installments that required to be paid by June 2008, shown as over due installments in current maturity. 21.7. The term finance facility of Rs. 200 million has been obtained from the National Bank of Pakistan. The facility was obtained to finance the working capital requirement of the company. The markup on the facility is a floating rate, linked to the three months KIBOR (Ask Side) as the base rate, plus 0.5% per annum. The tenure of this facility is for five years with a 1-5 years grace period. Payments are required to be made in fourteen equal quarterly installments of Rs. 14.285 million each, commencing from 28 October, 2009. A joint pari passu charge over fixed assets amounting to Rs. 150 million and Ranking charge over the fixed assets of the Company to the extent of Rs. 117 million has been registered as security in respect of the arrangement. 21.8. The term finance facility of Rs.55 million was obtained from Bank of Khyber. The facility was obtained to restructure the Balance Sheet of the Company. The markup on the facility is a floating rate, linked to the six month KIBOR (Ask Side) as the base rate, plus 3% per annum. The tenure of this facility is for 2 years with a nine month grace period. Payments are required to be made eight quarterly equal installment commencing from 31 July 2009. A pari passu charge by way of MOTD over present and future fixed assets of the Company. The total outstanding includes one overdue installment. 21.9. The term finance facility of Rs.499.61 million was obtained from My Bank Limited. The facility was obtained to restructure the Balance Sheet of the Company. The markup on the facility is a floating rate, linked to the six month KIBOR (Ask Side) as the base rate, plus 3% per annum. The tenure of this facility is for five years with a one year grace period. Payments are required to be made monthly commencing from August 2009 and ended on July 2013. A ranking change over plant and machinery, amounting to Rs.677 million, has been registered as security in respect of the arrangement. 21.10. The term finance facility of Rs. 110.30 million was obtained from My Bank Limited. The facility was obtained to restructure the Balance Sheet of the Company. The markup on the facility is a floating rate, linked to the six month KIBOR (Ask Side) as the base rate, plus 5% per annum. Payment is required to be made in three equal half yearly installment with a half year grace period. A ranking charge over plant and machinery, amounting to Rs. 146.667 million, has been registered as security in respect of the arrangement. 21.11. Certain Banks have filed recovery suits in Honorable High Court of Sindh at Karachi as fully described in not 28.1(b) to the financial statements. 22. Liability against Assets subject to Finance Lease ==========================================================================================================
2009 2008
Present value Present value
Minimum of Minimum Minimum of Minimum
Lease Lease Lease Lease
Payments Payments Payments Payments
(Rupees)
==========================================================================================================
Due not later than one year 91,101,181 85,860,849 100,276,048 97,513,244
Due later than one year
but not later than five years 527,800 491,411 11,817,727 11,471,687
Total Payments 91,628,981 86,352,260 112,093,775 108,984,931
Less Financial charges
allocated to future periods 5,276,721 - 3,108,844 -
Present Value of
Minimum Lease Payments 86,352,260 86,352,260 108,984,931 108,984,931
Classified as current portion
Current Maturity 31,517,974 31,517,974 61,618,247 61,618,247
Overdue installments 54,342,875 54,342,875 35,894,997 35,894,997
85,860,849 85,860,849 97,513,244 97,513,244
491,411 491,411 11,471,687 11,471,687
==========================================================================================================The company has entered into Finance Lease arrangements with various leasing companies in order to obtain certain Property, Plant & Equipments. The minimum lease payments have been discounted at an implicit interest rate, floating as per the relevant arrangements, i.e., three month KIBOR (Ask Side) base rate plus 2.75% per annum and State Bank of Pakistan Discount rate base rate plus 2% per annum; to arrive at the present value of the liability. Rentals are paid in monthly / quarterly / bi-annual basis, and in case of a default in any payment, an additional charge @ 3% 20% per annum is required to be paid.The company has the option to purchase the asset upon expiry of the lease term, which it intends to exercise at the offered residual value being the amount advanced as security deposit to the leasing companies. Taxes, repairs, and insurance are borne by the company. In case of an early termination of the lease contract, the company is required to pay the entire amount of the rentals under the contract for the unexpired period of the lease agreement. In case of a finance lease, the prime security is the leased asset itself, as the title to the asset does not transfer to the company until the satisfactory discharge of the lease contract. 23. Deferred Liabilities 23.1. Deferred Liability for Staff Gratuity (Provision) 23.1.1 23.2. Deferred Income Tax Liability ==========================================================================================
2009 2008
RUPEES
==========================================================================================
46,965,707 53,414,629
68,148,345 309,334,365
115,114,052 362,748,994
==========================================================================================23.1.1. Deferred Liability for Staff Gratuity (Provision)==========================================================================================
2009 2008
RUPEES
==========================================================================================
Opening Balance 53,414,629 58,275,736
Less: Payments made during the year 6,448,922 4,861,107
46,965,707 53,414,629
==========================================================================================23.1.2. The Company discontinued its policy for staff retirement benefits plan for gratuity on 31-3-2007 and provision for all its outstanding liabilities had been made until 31-3-2007. The payable amount of gratuity shall be transferred to provident fund scheme after deduction of income tax payable by each members as per income tax law. The Company has not paid yet any amount to the Provident Fund Trust as of Balance Sheet Date23.2. Deferred Income Tax Liability ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Deferred tax liability arising on Surplus on
Revaluation of Property, Plant and Equipment 489,151,045 539,013,269
Deferred tax liability arising
due to accelerated tax
depreciation 33,527,774 40,649,377
Deferred tax asset / (liability)
arising on liability and assets
subject to Finance Lease (1,447,140) 6,173,854
Deferred tax asset arising
on carry forward losses (436,645,337) (257,807,015)
Deferred tax assets arising
on Staff Gratuity and
Other Provisions (16,437,997) (18,695,120)
68,148,345 309,334,365
==========================================================================================24. Trade and Other Payables==========================================================================================
2009 2008
RUPEES
==========================================================================================
Creditors for Goods 787,293,891 1,330,250,414
Advance from Customers 109,134,787 224,409,626
Accrued Expenses
Sales Tax 158,590,908 -
Excise Duty 3,761,688 3,877,529
Sales Commission 6,469,618 1,371,546
Salaries and Wages 16,467,406 408,991
Others 25,217,778 8,546,505
210,507,398 14,204,571
Unclaimed Dividends 769,748 772,064
Other Liabilities
Staff Income Tax 1,853,093 1,261,320
Others 36,240,463 34,716,559
38,093,556 35,977,879
1,145,799,380 1,605,614,554
==========================================================================================25. Interest, Profit, Mark-up Accrued on Loans and Other Payables==========================================================================================
2009 2008
RUPEES
==========================================================================================
On Redeemable Capital (Privately Placed
Term Finance Certificates) 2,411,509 2,158,460
On Term Finance Facilities 96,008,182 40,946,082
On Liability Against Assets
subject to Finance Lease 8,599,702 4,558,750
On Short Term Finances 248,789,814 163,358,743
355,809,207 211,022,035
==========================================================================================26. Short Term Finances � Secured==========================================================================================
Note 2009 2008
RUPEES
==========================================================================================
Short Term Running
Finance Facilities - Secured 26.1 2,126,186,112 2,507,103,745
Short Term Morabaha Facilities - Secured 26.2 184,999,895 184,999,895
Book Overdraft 4,939,257 61,710,831
2,316,125,264 2,753,814,471
==========================================================================================26.1. The facilities for running finances under markup arrangements have been obtained from various banks, with an aggregate available limit of Rs.2,126 million (2008: Rs.2,507 million). These facilities carry markup ranging KIBOR pIus 2% to 3% per annum payable quarterly / monthly in arrears. These facilities are secured by way of pan passu registered hypothecation charge of stock-in-trade and book debts. These arrangements are generally for a period of twelve months and are renewable at the end of the period. However some of these facilities were not renewed during the year.26.2. The short term Morabaha finance facilities have been obtained from various banks against an available limit of Rs.185 million (2008: Rs.185 million). The floating rate of markup is linked to the six month KIBOR (Ask Side) plus 2% per annum payable quarterly, in arrears. These facilities are secured by way of joint pari passu registered charge over present and future movables and receivables of the company. The facilities are generally for a period of 365 days, commencing from the date of the first draw down by the company, and are renewable at the end of the period. 26.3. Certain Banks have filed recovery suits in Honorable High Court of Sindh at Karachi as fully described in not 28. 1(b) to the financial statements. 27. Current Portion of Non-Current Liabilities ==========================================================================================
Note 2009 2008
RUPEES
==========================================================================================
Redeemable Capital (Privately Placed
Term Finance Certificates) 20 12,495,000 12,495,000
Term Finance Facilities 21 647,690,061 342,611,900
Liability against Assets
subject to Finance Lease 22 85,860,849 97,513,244
746,045,910 452,620,144
==========================================================================================28. Contingencies and Commitments28.1. Contingencies (a) Certain appeals are pending with the Income tax authorities in respect of various tax years. The appeals are related to the disallowances of expenses etc. The management feels that the outcome of the appeals will not be against the company. (b) Certain banks have filed recovery suits in the High Court of Sindh U/s 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 against the Company for an aggregate amount of Rs. 1,410 million (being Principal and Mark-up) through sale of hypothecated assets of the company. The Company has strongly disputed the banks' claim to be unreasonable and filed an application leave to defend. Since the cases are pending for hearing, therefore the ultimate outcome cannot be established. (c) Subsequent to Balance Sheet date, one of the bank has also filed a recovery suit against the company U/s 9 of the Financial Institutions (Recovery of Finances) Ordinance 2001 for an aggregate amount of Rs. 182.088 million being Principal and Mark-up thereon through sale of company's hypothecated assets. The case is pending for hearing therefore the ultimate outcome cannot be determined at this stage. d) Guarantees given by the commercial banks on behalf of the Company amounted to Rs. 2,930,000 (2008: Rs. 2,407,640) 28.2. Commitments: In respect of letter of credits other than for capital expenditures amounts to Rs. Nil (2008: Rs. Nil) =============================================================================================================================================================================================================
SALES
=============================================================================================================================================================================================================
Sugar Segment Polypropylene Segment Board and Panel Segment Distillery Segment Total
Note 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008
(Rupees)
=============================================================================================================================================================================================================
Gross Sales
Local 2,215,840,113 4,320,183,071 118,511,325 371,217,379 58,873,785 161,171,274 1,711,416 23,583.695 2,394,936,639 4,876,155,419
Exports - 319,045,473 . - - 357,464,435 1,005,299,611 357,464,435 1,324,345,144
2,215,840,113 4,639,228,544 118,511,325 371,217,379 58,873,785 161,171,274 359,175,851 1,028,883,366 2,752,401,074 6,200,500.563
Sales Commission 591,100 1,030,981 1,922,335 6,264,286 - - 525,284 4.853,400 3,038,719 12,148,667
Sales Tax/Special Excise Duly 317,166,865 640,852,522 17,245,341 51,923,734 8,554,311 22,532,222 248,667 3,426,690 343,215,184 718,735,168
Less: Refund of Excise Duty 29.1 (32,902,798) - - - . - - - (32,902.798)
284,855,167 641,883,503 19,167,676 58,188,020 8,554,311 22.532,222 773,951 8,280.090 313,351,105 730,883,835
Net Sales 1,930,984,946 3,997,345,041 99,343,649 313,029,359 50,319,474 138,639,052 358,401,900 1,020,603,276 2,439,049,969 5,469,616,728
=============================================================================================================================================================================================================29.1. This include Refund of 50% concessional rate of Excise Duty amounting Rs.3 1.221/- million deposited under protest against show cause notice No.A/8 (2)CE/93/5343 dated January 31, 1993 and refund of Rs. 1.682 million 1% Special Central Excise Duty implemented in finance act 2007.30. COST OF SALES =====================================================================================================================================================================================================
Sugar Segment Polypropylene Segment Board and Panel Segment Distillery Segment Total
Note 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008
(Rupees)
=====================================================================================================================================================================================================
Raw material -opening stock 21,444,428 13,472,311 67,372 608.024 43,042,144 22.814.979 64,553,944 36,895,314
Purchases/Acquired 1,481,892,793 3,604,136,281 76,388,046 283,699,425 24,399,551 74,353,091 203,355,566 581,165,538 1,785,335,956 4,543,954,335
Raw material closing stock - - (8,208,859) (21,444,428) (993,163) (67.372) (88,497,229) (43,042.144) (97,699,251) (64,553,944)
Raw material consumed 1,481,192,793 3,604,136,281 89,623,615 275,727,308 23,473,760 74,893,743 157,900,481 561,538,373 1,752,190,649 4,516,295,705
Road Cess 3,423,602 13,717,608 - - - - - - 3,423,602 13,117,608
Salaries, Wages and Other Benefits 30.1 137,134,841 184,757,387 9,871,723 14,581,988 7,418,791 12,157,472 13,806,987 18,870,602 168,232,342 230,367,449
Water, Fuel and Power 36,129,172 57,130,924 19,916,882 22,842,723 18,649,756 32,388,121 13,498,669 30,543,918 88,194,479 142,905,685
Stores and Spares consumed 119,237,529 151,893,295 5,995,960 16,735,972 3,823,128 8,050.090 14,482,572 43,719,466 143,539,189 220,398.822
Printing and Linter feeding - - 1,732,378 4,531,656 - - - - 1,732,378 4,531,656
Insurance 13,726,613 10,442,828 245,856 60,368 387,864 323,244 1,231,200 1,164,852 15,591,533 12,091,292
Depreciation 5.1 a 204,980,179 226,816,065 8,128,989 15,669,479 6,354,858 12,540,431 16,318,914 43,095,622 235,782,940 298,121,597
Repairs and Maintenance 11,026,216 19,040.075 247,090 928,936 68,996 556,898 706,845 4,217,111 12,049,147 24,743,020
Toll Manufacturing charges 57,990,870 426,210,348 - - - - - - 57,990,870 426,210,348
Other Over heads 7,570,593 9,681,217 801,571 1,270,819 76,282 202,310 184,317 241,467 8,632,763 11,395,813
Vehicle Running Expenses 5,605,219 9,088,259 184,486 439,546 63,9101 57,140 148,977 227.929 6,002,592 9,912,874
2,078,017,627 4,712,914,287 136,748,550 352,888,795 60,317,345 141,269,449 218,278,962 703,619,340 2,493,362,484 5,910,691,869
Work in process- beginning 2,998,342 6,947,835 9,557,536 13,734,347 4,266,494 1,765,200 338,846 338.846 17,161,218 22,786,228
Work in process acquired - - - - - - - - - -
Work in process - ending (2,542,831) (2,998,342) (8,834,187) (9,557,536) (3,853,395) (4,266,494) (338,846) (338,846) (15,569,259) (17,161,218)
Cost of Goods Manufactured 2,078,473,138 4,716,863,780 137,471,899 357,065,606 60,730,444 138,768,155 218,278,962 703.619,340 2,494,954,443 5,916,316,879
Finished goods. opening sleek 529,959,571 521.653.981 11,781,012 11,056.086 10,647,556 10,951,131 189,706,045 254,403,620 742,094,184 798,064,818
Purchases/Acquired - - 3.459.978 - - - - 3,459.978
Transfer to Other Segments (159,730,436) (489,788,858) (23,357,650) (45,390,460) - - - (183,088,086) (535,179,318)
Finished goods - closing stock (452,602,293) (529,959,571) (31,817,429) (11,781,012) (7,946,975) (10,647,556) (141,889,481) (189,706,045) (634,256,178) (742,094,184)
Insurance Claim - (13.345,000) - - - - - - - (13,345,000)
1,996,099,980 4,205,424,332 94,077,832 314,410,198 63,431,025 139,071,730 266,095,526 768,316,915 2,419,704,363 5,427,223,173
=====================================================================================================================================================================================================30.1. Salaries, Allowances & Other Benefits include Rs. 3.217 (2008:4.265) million in respect of Staff Retirement Benefits.31. Administrative and General Expenses ===========================================================================================================================================================================================================
Sugar Segment Polypropylene Segment Board and Panel Segment Distillery Segment Total
Note 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008
(Rupees)
===========================================================================================================================================================================================================
Salaries, Allowance & Other Benef 31.1 30,265,568 53,888,125 - - - - - - 30,265,568 53,888,125
Office and Other Expenses 710 681,175 86,710 - - - - 710 767,885
Entertainment 1,202,388 1,629,937 - 28,626 - - - - 1,202,388 1,658,563
Communication 3,873,123 7,474,130 86,573 23,481 517 - 2,164 - 3,962,377 7,497,611
Depreciation 5.1 a 8,270,903 9,423,412 255,245 272,636 69,877 80,491 293,244 323,184 8,889,269 10,099,723
Vehicle Running Expenses 5,649,487 8,581,426 4,500 45,122 - . - 6,719 5,653,987 8,633,267
Legal and Professional Charges 2,639,763 7,714,329 3,650 4,661 - 900,396 2,643,413 8,619,386
Printing and Stationery 1,255,350 1,710,948 86,400 14,580 - 20,274 46 350 1,341,796 1,746,152
Rent, Rates and Taxes 6,686,715 11,330,437 - - - - - - 6,686,715 11,330,437
Traveling and Conveyance 377,693 2,036,337 - 7,114 23,020 70 - - 400,713 2,043,521
Auditors' Remuneration 31.2 440,000 295,000 - - - - - . 440,000 295,000
Fees and Subscription 66,780 1,057,125 155,002 - - - 579,132 - 800,914 1,057,125
SAP Expenses Amortized 6 35,287,958 - - - - - - - 35,287,958 -
Books and Periodicals - - - 1,382 - - - - - 1,382
Miscellaneous 37,083 132,297 20,000 - - - - - 57,083 132,297
Donation 31.3 1,400,000 7,100,300 - - - - - - 1,400,000 7,100,300
97,453,521 113,054,978 611,370 484,312 93,414 100,835 874,586 1,230,649 99,032,891 114,870,774
===========================================================================================================================================================================================================31.1. Salaries, Allowances & Other Benefits include Rs. 1.229 (2008: 17.773) million in respect of Staff Retirement Benefits.31.2. Auditors Remuneration ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Audit Fee 300,000 175,000
Half Yearly Review 100,000 80,000
Cost Audit 40,000 40,000
440,000 295,000
==========================================================================================31.3. Interest of the directors or their spouses in the donation made during the year is as follows:==========================================================================================
2009 2008
RUPEES
==========================================================================================
Dewan Farooque
Trust related party 1,400,000 7,100,000
==========================================================================================
=========================================================
Dewan M. Yousuf Farooqui - Chairman Board
of Trustee
Dewan Abdullah Ahmed - Trustee
Dewan Asim Mushfiq Farooqui - Trustee
Dewan Abdul Baqi Farooqui - Trustee
=========================================================32. Distribution and Selling Costs===========================================================================================================================================================================================
Sugar Segment Polypropylene Segment Board and Panel Segment Distillery Segment Total
2009 2008 2009 2008 2009 2008 2009 2008 2009 2008
===========================================================================================================================================================================================
Sugar Bags Handling 3,384,925 5,356,537 - - - - - - 3,384,925 5,356,537
Selling Expenses - - 1,670,041 4,155,553 - - - - 1,670,041 4,155,553
Export Expenses - 5,090,665 - - - - 11,745,227 26,122,674 11,745,227 31,213,339
Freight, Octroi, and Other Expenses 12,000 920,543 - - - - - - 12,000 920,543
Selling & other exp. Sugarita - 3,007,909 - - - - - - - 3,007,909
3,396,925 14,375,654 1,670,041 4,155,553 - - 11,745,227 26,122,674 16,812,193 44,653,881
===========================================================================================================================================================================================33. Other Operating Income==========================================================================================
2009 2008
RUPEES
==========================================================================================
Profit from Fair Price Shop Operations 34,268 151,609
Profit from Dewan Petroleum Services 140,880 2,088,444
Profit on Deposit Account 436,997 193,342
Gain on disposal of fixed assets 41,500 1,205,874
653,645 3,639,269
==========================================================================================34. Finance Cost Markup and Charges on:==========================================================================================
2009 2008
RUPEES
==========================================================================================
Privately Placed Term Finance Certificates 253,049 1,874,250
Term Finance Facilities 80,387,398 78,968,523
Liability against Assets subject to Finance Lease 5,595,039 12,641,830
Short Term Finance Facilities 208,355,011 523,447,520
Bank Charges 3,279,682 10,273,707
297,870,179 627,205,830
==========================================================================================34.1. The Company has not provided the markup on long term and short term borrowing from January 2009 to September 2009 amounting to Rs. 421 million the management feels that we are in the process of restructuring of loans with the financial institutions and which in accordance with the proposal as fully described in note 2 to the financial statements. Management is hopeful that the restructuring proposal will be accepted by the financial institutions. However if the Company provided this amount during the year the loss of the Company had been increases by Rs. 421 million and consequently the financial charges and accrued mark-up will also increases by same amount and the loss for the year has been increased by the same amount.35. Taxation ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Current Income Tax charge 3,676,788 33,300,000
Provision for Deferred Income Tax (241,186,020) (234,694,682)
(237,509,232) (201,394,682)
==========================================================================================In view of the carry forward tax losses of the company; current year taxation charge, except for income covered under the presumptive tax regime, has been determined as the minimum tax under Section 113 of the Income Tax Ordinance, 2001. Following course, gross turnover from all sources up to June 30, 2008 have been taxed @ 0.5% and advance tax deducted under the presumptive tax regime have been determined as the current tax liability of the company for the year and that preceding. Hence a reconciliation of the accounting and taxable profits is deemed not applicable in the instance.36. Loss per Share � Basic ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Loss for the Year (233,584,405) (539,302,979)
Weighted average number of shares in issue 36,511,992 36,511,992
Loss per Share - Basic (6.40) (14.77)
==========================================================================================36.1. There is no dilution of the basic earning per share of the company, as it has not issued any instrument having an option to convert into the issued ordinary share capital of the company.37. Remuneration of Chief Executive, Directors and Executives The aggregate amount charged in the financial statements for the year, in respect of remuneration, including certain benefits to the Directors and Executives of the company, is as follows: =========================================================================================================================
2009 2008
Directors Executives Total Directors Executives Total
=========================================================================================================================
Managerial Remuneration 1,059,933 11,742,657 12,802,590 1,362,771 13,560,903 14,923,674
House Rent Allowance 476,970 5,284,196 5,761,166 613,247 6,102,406 6,715,653
Utilities 623,097 1,233,347 1,856,444 138,982 1,361,490 1,500,472
Total 2,160,000 18,260,200 20,420,200 2,115,000 21,024,799 23,139,799
Number of Persons 1 17 18 1 18 19
=========================================================================================================================The Chief Executive is not being provided any remuneration for their services. Certain Directors and executives of the company are provided with free use of company maintained cars.38. Plant Capacity and Production ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Sugar Unit
Rated crushing capacity
per day (MT) (Sujawal unit) 8,000 8,000
Cane crushed by the company (MT) 272,257 855,473
Sugar produced by the company (MT) 27,020 79,150
Days worked (Nos.) 76 149
Sugar Recovery (%) 9.92% 9.25%
Rated crushing capacity
per day (MT) (Khoski unit) 4,000 4,000
Cane crushed by the company (MT) 140,980 425,362
Sugar produced by the company (MT) 15,080 44,610
Days worked (Nos.) 72 130
Sugar Recovery (%) 10.70% 10.49%
Cane crushed under
tolling arrangements (MT) 134,539 913,979
Sugar produced under
tolling arrangements (MT) 12,940 86,365
Polypropylene Unit
Annual Capacity in Tons 4,455 4,455
Capacity Utilization 23% 55%
Board and Panel Unit
Per Day Capacity (Number of Sheets) 1,000 1,000
Capacity Utilization 31% 100%
Distillery Unit
Annual Capacity on
the basis of 300 days (Tons) 30,000 30,000
Capacity Utilization 19% 86%
==========================================================================================39. Financial Instruments and Related DisclosuresThe company is exposed to the following risks from its use of financial instruments: Credit risk Liquidity risk Market risk The board of directors has the overall responsibility for the establishment and oversight of company's risk management framework. The Board is also responsible for developing and monitoring the Company's risk management policies. 39.1. Credit risk Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties failed completely to perform as contracted. The company's credit risk is primary attributable to its receivables and balances with banks. The carrying amounts of financial assets represent the maximum credit exposure. The maximum exposure to credit risk at the reporting date is: ==========================================================================================
30-Sep-09 30-Sep-08
==========================================================================================
Short term Investment 28,392,000 58,695,000
Long Term Deposits 4,658,250 4,718,250
Trade Debts 40,417,735 136,382,940
Loans and Advances 1,306,252,064 1,445,876,487
Trade Deposits and Prepayments 39,319,131 52,731,235
Other Receivables 17,397,520 15,227,745
Cash and Bank Balances 10,613,005 35,276,803
1,447,050,305 1,748,908,459
==========================================================================================The company manages credit risk of receivables through the monitoring of credit exposures and continuous assessment of credit worthiness of its customers. The company believes that it is not exposed to any major concentration of credit risk as its customers are credit worthy and dealing banks posses good credit ratings.39.2. Liquidity risk Liquidity risk reflects an enterprise's inability in raising funds to meet commitments. The company follows an effective cash management and planning policy to ensure availability of funds and to take appropriate measures for new requirements. The following are the contractual maturities of the financial liabilities, including estimated markups: ========================================================================================================================
Carrying Contractual Six months Six to twelve One to Two to
Amounts Cash flows or less months two years five years
(Rupees in '000)
========================================================================================================================
Financial Liabilities - Recognized
Sponsors Loan 196,605,453 196,605,453 - - - 196,605,453
Redeemable Capital - PPTFCs 12,495,000 14,906,509 14,906,509 - - -
Term Finance 1,233,849,638 1,557,522,538 626,498,488 200,298,735 253,421,389 477,303,926
Short Term Finances 2,316,125,2642 316,125,2642 316,125,264 - - -
Finance Lease Liability 86,352,260 91,127,971 90,275,673 325,008 427,965 99,325
Trade & Other Payables 983,321,778 983,321,778 983,321,778 - - -
Mark up payable 355,809,207 355,809,207 355,809,207 - - -
Total 2009 5,184,558,600 5,515,418,720 4,386,936,919 200,623,743 253,849,354 674,008,704
Financial liabilities - Recognized
Sponsors Loan 189,605,453 189,605,453 - -- - 189,605,453
Redeemable Capital - PPTFCs 12,495,000 14,653,460 14,653,460 - - -
Term Finance 630,181,348 794,028,498 319,390,340 102,112,746 129,194,795 243,330,617
Short Term Finances 2,753,814,4712 753,814,4712,75 3,814,471 - - -
Finance Lease Liability 108,984,931 112,093,775 111,045,389 399,783 526,427 122,177
Trade & Other Payables 1,601,737,0251 601,737,0251 601 737,025 - - -
Markup payable 211,022,035 211,022,035 211,022,035 - - -
Total 2008 5,507,840,2635 676,954,7175,011 662,720 102,512 529 129,321,222 433,058,247
========================================================================================================================All the financial liabilities of the company are non derivative financial liabilities. The contractual cash flows relating to the above financial liabilities have been determined on the basis of markup rates effective as at September 30.39.3. Market Risk Market risk is a risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company's income or the value of financial instruments. The company is exposed to currency risk and interest rate risk only. 39.3.1. Currency risk Foreign currency risk arises mainly where receivables and payables exists due to transactions in foreign currencies. The company's financial instruments are in its functional currency therefore it is not exposed to any significant currency risk. 39.3.2. Interest rate risk Interest rate risk is the risk that the value of financial instrument will fluctuate due to changes in market interest rates. The company's exposure to the risk of changes in interest rates relates primarily to the following: Fixed rate instruments at carrying amounts: ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Financial Assets
Balance with banks 1,135,019 530,889
Variable rate instruments
at carrying amounts:
Financial liabilities
Redeemable Capital - PPTFCs 12,495,000 12,495,000
Loans 1,233,849,638 630,181,348
Lease liabilities 86,352,260 108,984,931
Short term borrowings 2,316,125,264 2,753,814,471
3,648,822,162 3,505,475,750
========================================================================================== Fair value sensitivity analysis for fixed rate instruments:The company does not account for any fixed rate financial assets at fair value through profit or loss, therefore a change in interest rates at the reporting date would not affect profit or loss. Cash flow sensitivity analysis for variable rate instruments: A change of 100 basis points in interest rates at the reporting date would have increased / decreased loss/profit for the year by the amounts shown below: Effect on loss / profit due to change of 100 BPs ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Increase 18,244,111 35,054,757
Decrease 18,244,111 35,054,757
==========================================================================================The effective interest! mark up rates for the monetary financial assets and liabilities are mentioned in respective notes to the financial statements.39.4. Capital risk management The primary objective of the Company's capital management is to maintain healthy capital ratios, strong credit rating and optimal capital structures in order to ensure ample availability of finance for its existing and potential investment projects, to maximize shareholder value and reduce the cost of capita. The Company manages its capital structure and makes adjustment to it, in light of changes in economic conditions. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total equity plus net debt. Net debt is calculated as total loans and borrowings including any finance cost thereon, trade and other payables, less cash and bank balances and investments. Capital signifies equity as shown in the balance sheet plus net debt. 39.5. Fair value of financial instruments Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arms length transaction. The carrying values of financial instruments reflect in these financial statements approximate their fair values. 40. Related Party Transactions The related parties comprise associated undertaking, directors, key management personnel and staff provident fund statement regarding remuneration and benefits and Chief Executives, Directors and key management personnel. ==========================================================================================
2009 2008
RUPEES
==========================================================================================
Sales of polypropylene 16,606,857 97,004,622
Purchase of Fixed Assets 699,000 3,038,900
Sales Commission 2,447,619 11,117,686
Tolling Manufacturing Charges 67,269,409 426,210,348
==========================================================================================All transactions were carried out on commercial terms and conditions and were valued at arm's length price. Reimbursement of expenses were on actual basis. Remuneration and benefits to key management personnel under the terms of their employment are given in Note 38 above.41. Additional Business Segment Information =======================================================================================================================================================================================
Sugar Segment Polypropylene Segment Board & Panel Segment Distillery Segment Total
2009 2008 2009 2008 2009 2008 2009 2008 2009 2008
=======================================================================================================================================================================================
Net Sales (Note 30) 1,930,984,946 3,997,345,041 99,343,649 313,029,359 50,319,474 38,639,052 358,401,900 1,020,603,276 2,439,049,968 5,469,616,728
Cost of Sales (Note 31) 1,996,099,980 4.205.424,332 94,077,832 314,410,198 63,431,025 139,071,730 266,095,526 768,316,915 2,419,704,364 5,427,223,176
Gross Profit (65,115,034) (208,079,291) 5,265,817 (1,380,839) (13,111,551) (432,678) 92,306,373 252,286.361 19,345,605 42,393,552
Administrative Expenses (Note 32) 97,453,521 113,054.978 611,370 J 484,312 93,414 100.835 874,586 1,230,649 99,032,891 114,870,773
Selling & Distribution costs (Note 33) 96,925 14,375,654 1,670,041 4,155,553 - - 11,745,227 26,122,674 16,812,193 44,653,881
100,850,446 127,430,632 2,281,412 4,639,865 93,414 00,835 12,619,813 27,353,323 115,845,083 159,524,654
Segment Results (165,965,479) (335.509,923) 2,984,405 (6,020,704) (13,204,965) (533,513) 79,686,560 224.933,038 (96,499,479) (117,131,102)
Segments Assets 4,886,396,353 4982,612,650 326,232,901 326,232,901 302,344,948 302,344.948 1,321,544,955 1,321,544,955 6,836,519,157 6.932,735.453
Segments Liabilities 5,053,084,522 5,419,941,860 169,662,858 74,696,856 40,836,488 63,155,853 262,015,644 276,450,684 5,525,599,512 5.934245,253
Capital Expenditure 1,507,697 372,801,527 - 1.900,000 - - - 196,240 1,507,697 374.897,767
Depreciation 213,251,081 236,239.478 8,384,233 15,942,115 6,424,735 12,620,922 16,612,159 43,418,806 244,672,208 308,221,321
=======================================================================================================================================================================================42. Corresponding FiguresComparative figures have been reclassified and restated wherever necessary for to facilitate comparison, no significant reclassification to report during the year. 43. Functional and Presentation Currency These financial statements are presented in Rupees, which is the Company's functional currency. All financial information presented in Pak Rupee. |