| Habib Sugar Mills Ltd - 2007 |
|
Balance Sheet as at September 30, 2007
================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Assets
Non-Current Assets
Fixed assets
Property, plant and equipment 3 680,445 618,039
Long-term investments 4 801,364 614,725
Long-term loans 5 5,050 6,210
Long-term deposits 2,903 2,564
Current Assets
Stores and spares 6 67,974 70,004
Stock-in-trade 7 390,494 419,296
Trade debts 8 202,887 175,255
Loans and advances 9 126,022 92,639
Trade deposits and short-term prepayments 10 7,569 6,556
Profit accrued on bank deposits 8,170 2,127
Other receivables 11 8,027 7,019
Cash and bank balances 12 638,531 381,272
1,449,674 1,154,168
Total Assets 2,939,436 2,395,706
Equity and Liabilities
Share Capital and Reserves
Share Capital
Authorised
80,000,000 (2006: 80,000,000) 400,000 400,000
ordinary shares of Rs. 5 each
Issued, subscribed and paid-up capital 13 288,000 216,000
Reserves 14 952,743 851,730
Unrealised gain on long-term investments
available for sale 738,929 495,337
1,691,672 1,347,067
1,979,672 1,563,067
Non-Current Liabilities
Deferred taxation 15 66,500 74,000
Current Liabilities
Short-term borrowings 16 488,190 337,000
Trade and other payables 17 393,259 379,025
Accrued mark-up on short-term borrowings 18 4,565 8,581
Provision for income tax - net 19 7,250 34,033
893,264 758,639
Contingencies and Commitments 20
Total Equity and Liabilities 2,939,436 2,395,706
================================================================================Profit and Loss Account for the year ended September 30, 2007================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Net sales and services 21 2,838,960 4,019,324
Cost of sales 22 2,468,787 3,601,775
Gross Profit 370,173 417,549
Distribution and marketing expenses 23 (85,228) (61,280)
Administrative expenses 24 (68,045) (62,658)
Other operating expenses 25 (19,836) (34,637)
Other operating income 26 81,386 50,651
(91,723) (107,924)
Operating Profit 278,450 309,625
Finance costs 27 (22,237) (49,036)
Profit before taxation 256,213 260,589
Taxation 28 (40,000) (45,000)
Profit after taxation 216,213 215,589
(Restated)
Earnings per share - Basic and diluted (Rupees) 29 3.75 3.74
================================================================================Statement of Changes in Equity for the year ended September 30, 2007=======================================================================================================
Unrealised
gain on
long-term
invest--
ments Unappro
Share Capital General available priated
Capital Reserve Reserve for sale Profit Total
=======================================================================================================
(Rupees in thousands)
=======================================================================================================
Balance as on October 1, 2005 162,000 34,000 521,000 321,770 167,541 1,206,311
Dividend declared for 2005 @ 20% - - - - (32,400) (32,400)
Issue of bonus shares 54,000 - - - (54,000) -
Transfer to general reserve - - 80,000 - (80,000)
Profit after taxation for the year ended
September 30, 2006 - - - - 215,589 215,589
Unrealised gain realised on disposal
of long-term investments - - - (13,970) - (13,970)
Unrealised gain due to change in fair
values of long-term investments - - - 187,537 - 187,537
Balance as on September 30, 2006 216,000 34,000 601,000 495,337 216,730 1,563,067
Dividend declared for 2006 @ 20% - - - - (43,200) (43,200)
Issue of bonus shares 72,000 - - - (72,000) -
Transfer to general reserve - - 100,000 - (100,000) -
Profit after taxation for the year ended
September 30, 2007 - - - - 216,213 216,213
Unrealised gain realised on disposal
of long-term investments - - - (25,866) - (25,866)
Unrealised gain due to change in fair
values of long-term investments - - - 269,458 - 269,458
Balance as on September 30, 2007 288,000 34,000 701,000 738,929 217,743 1,979,672
=======================================================================================================Cash Flow Statement for the year ended September 30, 2007================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Cash flows from operating activities
Cash generated from operations 30 250,584 489,960
Finance charges paid (51,190) (56,676)
Profit received on short-term deposits 18,894 12,258
(32,296) (44,418)
Income tax paid (74,283) (73,592)
Long-term loans 1,160 (31)
Long-term deposits (339) 389
Net cash generated from operating activities 144,826 372,308
Cash flows from investing activities
Fixed capital expenditure (124,922) (35,666)
Redemption / sale proceeds 118,090 81,591
of long-term investments
Dividend received 17,569 12,387
Purchase of long-term investments (9,741) (80,995)
Sale proceeds of fixed assets 2,620 14,999
Net cash used in investing activities 3,616 (7,684)
Cash flows from financing activities
Dividend paid (42,373) (31,801)
Net cash used in financing activities (42,373) (31,801)
Net increase in cash and cash equivalents 106,069 332,823
Cash and cash equivalents 44,272 (288,551)
at the beginning of the year
Cash and cash equivalents at 31 150,341 44,272
the end of the year
================================================================================Notes to the Financial Statements for the year ended September 30, 20071. The Company and its operations Habib Sugar Mills Limited is a public limited Company incorporated in Pakistan, with shares quoted on the Karachi and Lahore Stock Exchanges. The Company is engaged in the manufacturing and marketing of sugar, molasses, ethanol, household textiles and providing bulk storage facilities. 2. Summary of significant accounting policies 2.1. Statement of compliance These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of Companies Ordinance, 1984. Approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) as notified under the provisions of the Companies Ordinance, 1984. Wherever, the requirements of the Companies Ordinance, 1984 or directives issued by the Securities and Exchange Commission of Pakistan differ with the requirements of these standards, the requirements of Companies Ordinance, 1984 or the requirements of the said directives take precedence. 2.2. Significant accounting judgements and estimates The preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. Estimates and judgements are continually evaluated and are based on historic experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. In the process of applying the accounting policies, management has made the following estimates and judgements which are significant to the financial statements: a).Determining the residual values and useful lives of property, plant and equipment (Note 2.5); b).Classification of investments (Note 2.6); c).Impairment of inventories / adjustment of inventories to their net realizable value (Note 2.8); d).Accounting for staff retirement benefits (Note 2.11); e).Recognition of taxation and deferred tax (Note 2.14) ; and f).Impairment of financial assets (Note 2.20). 2.3. Accounting standards not yet effective The following new standards and amendments of approved accounting standards are applicable in Pakistan from the dates mentioned below against the respective standard or amendment: ===============================================================================
IAS-1 Presentation of Financial statements effective from accounting period
beginning
amendments relating to capital disclosures on or after January 1, 2007
IAS-23 (Revised) Borrowing Costs effective from accounting
period beginning on or after
January 1, 2009
IAS-41 Agriculture effective from accounting
period beginning on or after
May 22, 2007
IFRS-2 Share based Payment effective from accounting
period beginning on or after
December 6, 2006
IFRS-3 Business Combinations effective for business
combinations for which
agreement date is on or
after December 6, 2006
IFRS-5 Non-Current Assets Held for Sale effective from accounting
period beginning
and Discontinued Operations on or after December 6, 2006
IFRS-6 Exploration for and Evaluation
of Mineral effective from accounting
period beginning
Resources on or after December 6, 2006
===============================================================================In addition, interpretations in relation to certain IFRSs have been issued by the International Accounting Standards Board that are not yet effective.These standards are not expected to have a material impact on the Company's financial statements other than an increase in disclosures in certain cases. 2.4. Basis of preparation These financial statements have been prepared under historical cost convention, except for long-term investments which have been recognised at fair value in accordance with the requirements of IAS-39 "Financial Instruments: Recognition and Measurement". 2.5. Fixed assets 2.5.1. Property, plant and equipment These are stated at cost less accumulated depreciation / amortization / impairment, if any, except for freehold land and capital work-in-progress which are stated at cost. Significant borrowing cost related to acquisition, construction or production of a qualifying asset is capitalised. Depreciation is charged to profit and loss account applying the reducing balance method. Depreciation on additions is charged from the month in which the asset is put to use and on disposals up to the month the asset is in use, in line with the recommendations of the Institute of Chartered Accountants of Pakistan. Assets residual values and useful lives are reviewed, and adjusted, if appropriate at each balance sheet date. Maintenance and normal repairs are charged to profit and loss account as and when incurred. Major renewals and improvements are capitalised. Gain or loss on disposal of assets is included in profit and loss account. 2.5.2. Capital work-in-progress Capital work-in-progress, machinery in transit and advances to suppliers made in respect of fixed assets are stated at cost and are transferred to the respective assets when available for intended use. Significant borrowing cost related to acquisition, construction or production of a qualifying asset is capitalized. 2.6. Long-term investments - Available for sale Long-term investments are classified as available for sale. All investments are initially recognised at cost, being the fair value of the consideration given. Subsequent to initial recognition, these investments are re-measured at fair value (quoted market price). Any gain or loss from a change in the fair value of investments available for sale is recognised directly in equity as unrealised, unless sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at which time cumulative gain or loss previously taken to equity is released to the profit and loss account of the year. 2.7. Stores and spares These are valued at lower of moving average cost and net realisable value except for items in transit which are valued at actual cost. Provision is made for obsolescence and slow moving items. 2.8. Stock-in-trade These are valued as follows: =======================================================================
Raw materials At the lower of average cost and net realisable value
Work-in-process At the lower of average cost and net realisable value
Finished goods At the lower of average cost and net realisable value
Fertilizers At the lower of cost on FIFO basis and net realisable
Value
=======================================================================2.9. Trade debts and other receivablesTrade debts are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. Other receivables are carried at cost less estimates made for doubtful receivables. An estimate for doubtful trade debts and other receivables is made when collection of the full amount is no longer probable. Bad debts are written off when identified. 2.10. Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. For the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand, with banks on current, savings and deposits accounts net of short term borrowings under mark-up arrangements, if any. 2.11. Staff retirement benefits a) Staff gratuity The Company operates an approved defined benefit gratuity scheme for all permanent employees. Minimum qualifying period for entitlement to gratuity is five years continuous service with the Company. The scheme is funded and contributions to the fund are made in accordance with the recommendations of the actuary. The latest actuarial valuation of the gratuity scheme was carried out as at September 30, 2007. The projected unit credit method, using the following significant assumptions, has been used for actuarial valuation. ==================================================================== Discount rate 10% per annum compound Expected rate of return on investments 10% per annum Expected rate of increase in salaries 9% per annum ====================================================================Based on the actuarial valuation of gratuity scheme as of September 30, 2007, the fair value of gratuity scheme assets and liabilities were Rs. 35.459 million and Rs. 37.183 million respectively. The Company recognises the total actuarial gains and losses in the year in which they arise. The amounts recognised in balance sheet are as follows: ================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Present value of defined benefit obligation 37,183 32,006
Fair value of plan assets (35,459) (32,228)
Net (asset) / liability recognised 1,724 (222)
in the balance sheet
Movement in the net (asset) /
liability recognised in the
balance sheet is as follows:
Opening balance (222) 1,022
Charge for the year 3,268 1,586
Contribution during the year (1,322) (2,830)
Closing balance 1,724 (222)
================================================================================The following amounts have been charged in the profit and loss account for the year ended September 30, 2007 in respect of these benefits:================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Current service cost 1,483 1,324
Interest cost 2,657 2,252
Expected return on plan assets (2,678) (2,164)
Actuarial (Gain) / Loss recognised 1,806 174
Gratuity cost for the year 3,268 1,586
ended September 30, 2007
================================================================================Actual return on plan assets is Rs. 2.998 (2006: Rs. 2.60) millionAmounts for the current period and previous four annual periods of the fair value of plan assets, present value of defined benefit obligation and surplus/(deficit) arising thereon are as follows: =====================================================================================
As at September 30, 2007 2006 2005 2004 2003
(Rupees in thousands)
=====================================================================================
Fair value of plan assets 35,459 32,228 28,382 25,128 24,538
Present value of benefit obligatio (37,183) (32,006) (29,404) (26,036) (23,896)
Surplus / (Deficit) (1,724) 222 (1,022) (908) 642
===================================================================================== b) Provident fundThe Company operates a recognized provident fund scheme for all its permanent employees. Equal contributions are made by the company and the employees at the rate of 8.33% of basic salary plus applicable cost of living allowance. c) Compensated absences The Company provides for its estimated liability towards leaves accumulated by employees on an accrual basis using current salary level. 2.12. Borrowings and their cost Borrowings are recorded at the proceeds received. Borrowing costs are recognised as an expense in the period in which these are incurred except to the extent of borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. Such borrowing costs, if any, are capitalised as part of the cost of that asset. 2.13. 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 for goods and services received, whether or not billed to the Company. 2.14. Taxation Current Provision for current taxation is computed in accordance with the provisions of the applicable Income Tax laws. Deferred Deferred tax is recognised using the balance sheet liability method, on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts appearing in the financial statements. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that the temporary differences will reverse in the future and taxable income will be available against which the temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reducec to the extent that it is no longer probable that sufficient taxable profit will be available to allow al or part of the deferred tax assets to be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates that have beer enacted or substantially enacted by the balance sheet date. 2.15. Impairment The carrying amounts of the Company's assets are reviewed annually to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amount is estimated and impairment losses are recognised in the profit and loss account. 2.16. Provisions Provisions are recognised when the Company has a present legal or constructive obligations as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. Provisions are reviewed periodically and adjusted to reflect the current best estimate. 2.17. Foreign currencies Transactions in foreign currencies are translated into Pak rupees which is the Company's functional and presentation currency, at the rates of exchange prevailing on the date of transactions. Monetary assets and liabilities in foreign currencies are translated into Pak rupees at the rates of exchange ruling on the balance sheet date. Exchange gains and losses are included in profit and loss account. 2.18. Revenue recognition Sales are recorded on despatch of goods to customers. Income on long-term investments is recorded when right to receive is established. Income I profit on bank deposits is recorded on accrual basis. Storage income is recorded on accrual basis. 2.19. Segment reporting Business segments provide products that are subject to risks and returns that are different from those of other business segments. 2.20. Financial instruments All the financial assets and financial liabilities are recognised at the time when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognised at the time when the Company loses control of the contractual rights that comprises the financial assets. All financial liabilities are derecognised at the time when they are extinguished, that is, when the obligation specified in the contract is discharged, cancelled, or expires. Any gains or losses on derecognition of financial assets and financial liabilities are taken to profit and loss account currently. 2.21. Offsetting Financial assets and liabilities are offset when the Company has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset or settle the liability simultaneously. 3. Property, plant and equipment ================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Property, plant and equipment 3.1 557,563 618,039
Capital work-in-progress 3.4 122,882 -
680,445 618,039
================================================================================3.1. The following is a statement of property, plant and equipment for 2007:===============================================================================================================================
Depre- Accum-
ciation/ ulated
Accum- amortization deprec- Annual
Cost! Cost! ulated charge for iation / Wrillen rate of
book book deprec- the year amortization/ down deprec-
value value iation & accum- impairment value iation /
as at as at as at lated deprec- as at as at amortiz-
Oct. 1 Additions / Sept, 30, Oct. 1 ation on Sept. 30, Sept. 30, ation
2006 (disposals) 2007 2006 deletions 2007 2007 %
===============================================================================================================================
(Rupees in thousands)
===============================================================================================================================
Land
Freehold -Sugar/Distillery division 11,134 - 11,134 - - - 11,134 -
Leasehold-Textile division 489 - 489 186 5 191 298 1.01
Buildings on freehold land
Sugar division 52,527 - 52,527 43,816 871 44,687 7,840 10
Distillery division 21,243 - 21,243 9,768 1147 10915 10,328 10
Non-factory buildings 30,228 - 30228 18,204 601 18,805 11,423 5
Buildings on leasehold land
Textile division 16,480 - 16,480 13,177 330 13,507 2,973 10
Plant and machinery
Sugar division 744,160 - 743,560 460,337 28,380 488,178 255,382 10
(600) (539)
Distillery division 399,369 - 399,369 143,440 25,593 169,033 230,336 10
Textile division 47,427 193 46,254 30308 1,698 30,926 15,328 10
(1,366) (1080)
Railway siding-Sugar division 468 - 468 451 2 453 15 10
Electric, gas and water installations
Sugar/Distillery division 8,808 - 8,808 7,258 155 7,413 1,395 10
Textile division 2,766 - 2,766 2,063 70 2,133 633 10
Furniture fillings, electrical and
office equipment
Sugar/Distillery division 40,588 713 41163 31,868 2,311 34,047 7,116 25
(138) (132)
Textile division 7,945 223 8,168 6,932 284 7,216 952 25
Tractors / trolleys and
agriculture implements
Sugar division 2,765 - 2,765 2,196 114 2,310 455 20
Motorcars! vehicles
Sugar/Distillery division 4,807 828 4,743 3,278 390 2,950 1,793 20
(892) (718)
Textile division 811 83 773 694 35 611 162 20
(121) (118)
2001 1,392,015 2,040 1,390,938 773,976 61,986 833,375 557,563
(3,117) (2,587)
=============================================================================================================================== The following is a statement of property, plant and equipment for 2006:===============================================================================================================================
Depre- Accum-
ciation/ ulated
Accum- amotization deprec- Annual
Cost / Cost ulated charge for iation / Written rate of
book book deprec- the year & amodization / down deprec-
value value iation accumu- impairment value iation /
as at as at as at lated deprec- as at as at amortiz-
Oct. 1, Additions! Sept. 30, Oct. 1, iation on Sept. 30, Sept. 30, ation
2005 (disposals) 2006 2005 deletions 2006 2006 %
===============================================================================================================================
(Rupees in thousands)
===============================================================================================================================
Land
Freehold - Sugar/Distillery division 11,134 - 11,134 - - - 11,134 -
Leasehold-Textile division 489 - 489 181 5 186 303 1.01
Buildings on freehold land
Sugar division 52,527 - 52,527 42,848 968 43816 8,711 10
Distillery division 21,243 - 21,243 8,493 1,275 9,768 11,475 10
Non-factory buildings 30,228 - 30,228 17,571 633 18,204 12,024 5
Buildings on leasehold land
Textile division 16,480 - 16,480 12,810 367 13,177 3,303 10
Plant and machinery
Sugar division 689,499 54,661 74,4160 432,869 27,468 460,337 28,3823 10
Distillery division 399,369 - 399,369 115,003 28,437 143,440 255,929 10
Textile division 74,583 4,492 47,427 48,177 2,147 30,308 17,119 10
(31648) (20,016)
Railway siding-Sugar division 468 - 468 449 2 451 17 10
Electric, gas and water installations
Sugar/Distillery division 8,808 - 8808 7,086 172 7,258 1,550 10
Textile division 2,766 - 2,766 1,985 78 2,063 703 10
Furniture, fittings, electrical and
office equipment
Sugar / Distillery division 39,522 1,628 40,588 29,709 2,708 31,868 8,720 25
(562) (549)
Textile division 7,945 - 7,945 6,594 338 6:932 1,013 25
Tractors! trolleys and
agriculture implements
Sugar division 2,765 606 2765 2,621 75 2,196 569 20
(606) (500)
Motorcars/ vehicles
Sugar/Distillery division 6,817 350 4,807 3901 501 3,278 1,529 20
(2,360) (1,124)
Textile division 764 47 811 666 28 694 117 20
2006 1,365,407 61,784 1,392,015 730,963 65,202 773,976 618,039
(35,176) (22,189)
===============================================================================================================================3.2. Depreciation / amortization charge for the year has been allocated as follows:================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Cost of Sales
Sugar division 22 31,095 30,520
Distillery division 22 26,795 29,814
Textile division 22 2,104 2,625
59,994 62,959
Administrative expenses
Sugar division 24 1,210 1,405
Distillery division 24 104 120
Textile division 24 318 338
Terminal 21.6 360 380
1,992 2,243
61,986 65,202
================================================================================3.3. The following are the details of fixed assets disposed of:==========================================================================================================================
Accumu.
lated Mode
depre- Book Sale Gain on of
Cost ciation value proceeds disposal disposal Particulars of purchasers
==========================================================================================================================
(Rupees in thousands)
==========================================================================================================================
Plant and machinery
Sugar division
Centrifugal Machine 600 539 61 110 49 Negotiati M/s. S.K. Salt Refinery, F/376,
S.l.T.E., Karachi.
600 539 61 110 49
Textile division
Beem plate / raiser 612 492 120 390 270 Tender Mohd. Saeed S/o Wali Mohd. House
No. D142 Noor Colony, Sector,
UC, Orangi Town, Karachi.
Punching machine 9 7 2 25 23 Tender Mohd. Boota S/o Ghulam Mohd. 3
Faisalabad Ghulam Mohd. Abad,
UC 186, Dhakhana Ghulam Mohd.
Abad Faisalabad.
Kier & Towel Heater 42 32 10 100 90
Warping machine I box 703 549 154 425 271
1,366 1,080 286 940 654
1,966 1,619 347 1,050 703
Furniture, fittings, electrical and
office equipment
Sugar division
Furniture & fittings 138 132 6 32 26 Negotiati Various Company employees
138 132 6 32 26
Motorcars! vehicles
Sugar division
Motor car 73 38 35 430 395 Tender Mr. Muhammad Zalar Alam S/o
M. Salauddin, K-354, Gali #3,
Sector 16, Block B/2, Gulshan.e.
Bahar, Karachi.
89 48 41 400 359 Mr. Abdul Karim S/o Abdul Hamid
Khan House #343, Bhutto Nagar.
Quaidabad, Karachi.
599 562 37 155 118 Mr. Adnan Ahmed S/o Fazal Ahmed
A-198, Block 2
, Gulshan-e-lqbal, Khi.
73 44 29 450 421 Mr. Noman Saleem S/o Abdul Saleem
A 825 Block 12, Gulberg
Federal B,
Area Karachi.
Motorcycle 58 26 32 32 - NegotiatiSyed Afzal Hussain Shah
, Masjid Road
Nawabshah.
892 718 174 1,467 1,293
Textile division
Motor Car 121 118 3 71 68 Syed Ghulam Hussain S/o
Syed Zafar
Abid B 7/2005, Rabia Patel,
Abul Hasan lshphani Road
, Karachi.
1,013 836 177 1,538 1,361
2007 3,117 2,587 530 2,620 2,090
2006 35,176 22,189 12,987 14,999 2,012
==========================================================================================================================3.4. Capital work-in-progress - at cost================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Plant and machinery 3.4.1 88,003 -
Machinery under clearance 3.4.1 15,974 -
Advances to suppliers 3.4.1 18,905 -
122,882 -
================================================================================3.4.1. Included in the above is an aggregate sum of Rs. 1.561(2006: Nil) capitalized as borrowing cost at the mark-up rate of 10.5% per annum (2006: Nil).3.4.2. Movement in Capital work-in-progress ================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Balance as on October 1, - 26,118
Additions during the year 122,882 833
122,882 26,951
Capitalized during the year - 26,951
122,882 -
================================================================================4. Long-term investments - Available for saleFully paid-up Ordinary Shares, Term Finance Certificates (TFC's) and Unit Certificates of quoted companies are as follows: =============================================================================================
2007 2006
(Rupees in thousands)
=============================================================================================
Number of sh Face
2006 2007 value Company's Name
Rs.
=============================================================================================
a).Investments in related parties
147,797 147,797 5 Balochistan Particle Board Ltd. 296
4,373,455 6,122,837 10 Bank AL Habib Ltd. 406,556 295,208
1,902,602 2,568,512 5 Habib Insurance Company Ltd. 176,714 97,033
583,566 392,537
b).Investments in other companies
100,000 38,500 10 ABN Amro Bank (Pakistan) Limited
(Formerly Prime Commercial Bank Ltd) 2,092 4,810
527,923 - 10 Askari Commercial Bank Limited - 49,942
- 50,000 10 Crescent Commercial Bank Limited 970 -
36,703 40,373 10 Dawood Lawrencepur Limited 3,371 2,155
34,100 39,215 10 Engro Chemical Pakistan Limited 10,192 6,107
35,500 - 10 Faran Sugar Mills Limited - 817
71,568 71,568 10 Fauji Fertilizer Company Limited 8,230 8,373
- 257,000 5 First Habib Modaraba 2,930 -
106,666 178,132 10 Habib Metropolitan Bank Limited
(Formerly Metropolitan Bank Limited) 11,454 8,347
17,000 27,000 10 Honda Atlas Cars (Pakistan) Limited 1,339 1,222
41,000 47,150 10 MCB Bank Limited 15,701 10,455
586 586 5,000 MCB Bank Limited - TFC's 879 3,047
19,140 8,840 10 Meezan Bank Limited 312 392
63,500 - 10 Mehran Sugar Mills Limited - 1,667
- 22,500 10 My Bank Limited 540 -
- 4,700 10 New Jubilee Insurance Company Limited 939 -
20,000 - 10 NIB Bank Limited - 2,808
46,229 46,229 10 Oil and Gas Development Company Ltd. 5,316 5,910
52,400 19,650 10 Pak Suzuki Motor Company Limited 7,581 21,088
2,850 - 10 Pakistan Refinery Limited - 763
50,000 50,000 10 Pakistan Telecommunication Co. Ltd. ( 2,625 2,058
14,507 14,507 10 Pakistan Tobacco Company Limited 2,321 936
593,935 855,266 5 Shabbir Tiles and Ceramics Limited 33,783 24,945
358,410 421,182 10 Soneri Bank Limited 18,069 14,892
55,230 - 10 Standard Chartered Bank Pakistan Ltd.
(Formerly Union Bank Limited) - 7,428
6,250 - 10 Standard Chartered Modaraba - 115
65,167 71,683 10 Sui Northern Gas Pipelines Limited 4,469 5,673
171,392 267,371 5 Thal Limited 80,479 34,510
30,000 20,000 10 The Hub Power Company Limited 672 780
394 502 5000 Unit Trust of Pakistan 3,534 2,948
217,798 222,188
801,364 614,725
=============================================================================================4.1. The aggregate cost of the above referred investments, net of impairment, is Rs. 62.434 (2006: Rs. 119.388) million.4.2. The above investments are stated at fair value. Unrealised gain of Rs. 269.458 million (2006: Rs.187.537 million ) arising from a change in the fair value of these investments during the current year has been recognised directly in equity whereas impairment in the ordinary shares of Rs.0.551 million (2006: Rs.1 .207 million) has been charged to the profit and loss account. Refer Note 25 to the financial statements. 5. Long-term loans ================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Secured - considered good
Executives 5.1 & 5.2 3,258 3,453
Employees 7,719 7,893
10,977 11,346
Receivable within twelve months shown
under current assets:
Executives 9 (1,242) (1,188)
Employees 9 (4,685) (3,948)
(5,927) (5,136)
5,050 6,210
================================================================================5.1. These loans are given to executives for purchase of assets and are secured against pledge of title documents / lien marked over retirement benefits. Movement of loans to executives during the year is as follows:================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Balance as on October 1, 3,453 4,628
Disbursements 1,065 98
4,518 4,726
Repayments 1,260 1,273
3,258 3,453
================================================================================5.2. The maximum aggregate amount due from executives at the end of any month during the year was Rs. 3.81 (2006: Rs. 5.77) million.6. Stores and spares ================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Stores -
In hand 44,628 43,522
In transit - 635
44,628 44,157
Provision for obsolescence and 22 (5,400) (2,000)
slow moving stores
39,228 42,157
Spares 38,746 37,847
Provision for obsolescence and (10,000) (10,000)
slow moving spares
28,746 27,847
67,974 70,004
================================================================================7. Stock-in-trade================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Raw materials
Sugar division - 53,167
Distillery division 68,883 37,201
Textile division 342 263
69,225 90,631
Work-in-process
Sugar division 5,931 426
Textile division 450 790
1,043 1,216
Finished goods
Sugar division 175,293 18,030
Distillery division 143,707 165,978
Textile division 98 1,239
Trading division 396 141,603
319,494 326,850
Fertilizers 732 599
390,494 419,296
================================================================================8. Trade debts================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Considered good
Export - Secured against export documents 83,268 50,293
Local -Unsecured 119,619 124,962
202,887 175,255
================================================================================9. Loans and advances================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Considered good
Current maturity of long-term loans
Executives 5 1,242 1,188
Employees 5 4,685 3,948
5,927 5,136
Advances
Employees 37 20
Suppliers 120,058 87,483
120,095 87,503
126,022 92,639
================================================================================10. Trade deposits and short-term prepayments================================================================================
2007 2006
(Rupees in thousands)
================================================================================
922 1,650
6,647 4,906
7,569 6,556
================================================================================11. Other receivables================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Duty drawback and research & 6,901 5,301
development support claim
Others 1,126 1,718
8,027 7,019
================================================================================12. Cash and bank balances================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Cash in hand 27 68
Balance with banks on:
Current accounts 12.1 7,804 10,244
Deposit accounts 12.2 630,700 370,960
638,504 381,204
638,531 381,272
================================================================================12.1. Included herein is a sum of Rs. 1.15 (2006: Rs. 1.15) million earmarked against guarantee issued by a bank in favour of Sui Southern Gas Company Limited on behalf of the company.12.2. These deposits carry profit at the rates ranging between 8.00% to 9.5% (2006: 2.5% to 9.5%) per annum. 13. Issued, subscribed and paid-up capital ===========================================================================================
2007 2006
(Rupees in thousands)
===========================================================================================
Number of shares
===========================================================================================
10,136,700 (2006:10,136,700) Ordinary shares of
Rs. 5 each fully paid in cash 50,684 50,684
47,463,300 (2006: 33,063,300) Ordinary shares of
Rs. 5 each issued as fully paid
bonus shares, including 14,400,000
Ordinary shares of Rs. 5 each issued
during the year 237,316 165,316
57,600,000 288,000 216,000
===========================================================================================Issued, subscribed and paid-up capital of the Company includes 9,367,696 Ordinary shares of Rs. 5 each (2006: 7,032,773) held by related parties at the end of the current year.14. Reserves ================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Capital
Share premium 34,000 34,000
Revenue
General 14.1 701,000 601,000
Unappropriated profit 217,743 216,730
952,743 851,730
================================================================================14.1. At the beginning of the year================================================================================
2007 2006
(Rupees in thousands)
================================================================================
601,000 521,000
Transfer from Unappropriated profit 100,000 80,000
701,000 601,000
================================================================================15. Deferred taxation================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Deferred taxation - relating to accelerated tax
depreciation allowance 66,500 74,000
================================================================================16. Short - term borrowings================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Secured
Export finances 16.1 488,190 337,000
================================================================================16.1. The short-term borrowing facilities, comprising of running / term and export finances, are secured by way of registered charge against hypothecation of stock-in-trade, stores and spares and assignment of trade debts and other receivables.The facility for running / term and export finances amounts to Rs. 1,645 (2006: Rs. 1,545) million. The outstanding balance of export finances as at the close of the year represents Pak rupee financing of Rs. 488.19 (2006: Rs. 337) million. The rate of mark-up ranged between 7.0% and 7.5% (2006: 6.9% and 8.25%) per annum during the year. 17. Trade and other payables ================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Trade creditors 273,279 275,256
Accrued liabilities 54,638 41,411
Sales-tax payable 31,456 33,052
Workers' Profit Participation Fund 17.1 13,775 14,010
Workers' Welfare Fund 11,471 7,384
Income-tax deducted at source 116 215
Unclaimed dividends 8,524 7,697
393,259 379,025
================================================================================17.1. Workers' Profit Participation Fund================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Balance as at October 1, 14,010 11,055
Interest on funds utilized in Company's business 472 395
14,482 11,450
Amount paid to Trustees (14,482) (11,450)
Allocation for the year 13,775 14,010
13,775 14,010
================================================================================18. Accrued mark-up on short-term borrowings================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Export finances 4,562 8,425
Running/term finances 3 156
4,565 8,581
================================================================================19. Provision for income-tax - net================================================================================
2007 2006
(Rupees in thousands)
================================================================================
7,250 34,033
================================================================================19.1. The return of income for the tax year 2007 (financial year ended September 30, 2006) has been filed on the due date and the same is deemed to be the assessment order under the provisions of the Income Tax Ordinance, 2001.20. Contingencies and Commitments 20.1. Contingencies The Company has provided counter guarantees to banks, aggregating to Rs. 169.128 (2006: Rs. 104.13) million against agriculture finance facilities to growers and guarantees issued by banks in favour of third parties on behalf of the 20.2. Commitments ================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Capital expenditure 9,449 -
================================================================================Rentals under operating lease agreements with First Habib Modaraba in respect of vehicles, payable over the following next four years, are as follows Year ending September 30================================================================================
2007 2006
(Rupees in thousands)
================================================================================
2007 - 7,365
2008 8,515 5,050
2009 7,586 4,233
2010 4,560 1,962
2011 2,051 -
22,712 18,610
================================================================================21. Segment operating results and related information=======================================================================================================================================================
(Rupees in thousands)
Sugar Division Distillery Division Textile Division Trading Division Total
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
Note
=======================================================================================================================================================
Net sales and services
Net sales 21.5 1,501,201 2,187,540 922,887 903,740 301,524 250,658 111,818 675,943 2,837,430 4,017,881
Services - Storage income
-Net 21.6 - - 1,530 1,443 -- - - - 1,530 1,443
1,501,201 2,187,540 924,417 905,183 301,524 250,658 111,818 675,943 2,838,960 4,019,324
Less: Cost of sales 22 1,329,686 1,844,827 753,397 807,790 273,648 228,026 112,056 721,132 2,468,787 3,601,775
Gross profit/(loss) 171,515 342,713 171,020 97,393 27,876 22,632 (238) (45,189) 370,173 417,549
Distribution and marketing
expenses 23 28,227 12,985 44,470 33,807 12,273 10,791 258 3,697 85,228 61,280
Administrative expenses 24 60,658 51,826 2,393 1,527 4,370 3,681 5,624 68,045 62,658
88,885 64,811 46,863 35,334 16,643 14,472 882 9,321 153,273 123,938
Profit before other operating
expenses and income 82,630 277,902 124,157 62,059 11,233 8,160 (1,120) (54,510) 216,900 293,611
Other operating expenses 25 (19,836) (34,637)
Other operating income 26 81,386 50,651
Operating profit 278,450 309,625
=======================================================================================================================================================21.1. Segment assets=======================================================================================================================================================
(Rupees in thousands)
Sugar Division Distillery Division Textile Division Trading Division Total
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
=======================================================================================================================================================
734,905 773,409 627,039 568,131 114,914 95,509 396 263,315 1,477,254 1,700,364
Unallocated assets 1,462,182 695,342
2,939,436 2,395,706
=======================================================================================================================================================21.2. Segment liabilities=======================================================================================================================================================
(Rupees in thousands)
Sugar Division Distillery Division Textile Division Trading Division Total
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
=======================================================================================================================================================
343,631 339,932 536,418 365,823 33,643 31,118 - 21,831 913,692 758,704
Unallocated liabilities 46,072 73,935
959,764 832,639
=======================================================================================================================================================21.3. Capital expenditure=======================================================================================================================================================
(Rupees in thousands)
Sugar Division Distillery Division Textile Division Trading Division Total
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
=======================================================================================================================================================
95,570 31,127 28,853 - 499 4,539 - - 124,922 35,666
=======================================================================================================================================================21.4. Company accounts for inter-segment revenue /transfers at arm's length.21.5. Net sales =======================================================================================================================================================
(Rupees in thousands)
Sugar Division Distillery Division Textile Division Trading Division Total
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
=======================================================================================================================================================
Local sales 1,710,955 2,374,362 104,225 86,924 - - 131,108 758,071 1,946,288 3,219,357
Less: Sales-tax 209,754 297,724 12,274 9,450 - - 19,290 98,673 241,318 405,847
Discount - - 278 279 - - - - 278 279
209,754 297,724 12,552 9,729 - - 19,290 98,673 241,596 406,126
1,501,201 2,076,638 91,673 77,195 - - 111,818 659,398 1,704,692 2,813,231
Export sales - 110,902 845,528 826,545 319,014 266,383 - 16,545 1,164,542 1,220,375
Less: Freight and commission - - 14,314 - 17,490 15,725 - - 31,804 15,725
- 110,902 831,214 826,545 301,524 250,658 - 16,545 1,132,738 1,204,650
2,187,540 922,887 903,740 301,524 250,658 111,818 675,943 2,837,430 4,017,881
=======================================================================================================================================================21.6. Services - Storage income - Net=======================================================================================================================================================
(Rupees in thousands)
Sugar Division Distillery Division Textile Division Trading Division Total
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
=======================================================================================================================================================
Terminal rental income - Note 21.7 - - 9,827 8,666 - - - - 9,827 8,666
Less: Terminal expenses
Salaries, wages and
other benefits - Note 21.8 - - 3,674 3,372 - - - - 3,674 3,372
Repairs and maintenance - - 1,105 965 - - - - 1,105 965
Water, electricity and gas - - 895 663 - - - - 895 663
Rent, rates and taxes - - 1,181 960 - - - - 1,181 960
Depreciation - - 360 380 - - - - 360 380
Travelling and vehicle running expenses - - 373 367 - - - - 373 367
Insurance - - 162 124 - - - - 162 124
Other expenses - - 547 392 - - - - 547 392
- - 8,297 7,223 - - - - 8,297 7,223
- - 1,530 1,443 - - - - 1,530 1,443
=======================================================================================================================================================21.7. Included herein is a sum of Rs. Nil (2006: Rs. 0.43) million representing inter-segment income.21.8. Salaries, wages and other benefits include a sum of Rs. 0.26 (2006: Rs. 0.09) million in respect of staff retirement benefits. 22. Cost of sales =======================================================================================================================================================
(Rupees in thousands)
=======================================================================================================================================================
Sugar Division Distillery Division Textile Division Trading Division Total
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
=======================================================================================================================================================
Opening stock of raw material 53,167 185,841 37,201 3,845 263 422 - - 90,631 190,108
Purchases 1,281,867 j 1,495,225 634,362 691,549 14,853 10,681 - - 1,931,082 2,197,455
1,335,034 1,681,066 671,563 695,394 15,116 11,103 - - 2,021,713 2,387,563
Closing stock of raw material - (53,167) (68,883) (37,201) (342) (263) - - (69,225) (90,631)
Raw material consumed 1,335,034 1,627,899 602,680 658,193 14,774 10,840 - - 1,952,488 2,296,932
Semi finished goods purchased - - - - 150,380 167,911 - - 150,380 167,911
1,335034 1,627,899 602,680 658,193 165,154 178,751 - - 2,102,868 2,464,843
Salaries, wages and
other benefits- Note 22.1 81,452 73,957 21,284 18,487 11,090 10,259 - - 113,826 102,703
Research and development expenses 860 762 - - - - - - 860 762
Process chemicals 17,643 17,035 9,193 6,975 - - - - 26,836 24,010
Packing material 19,053 19,301 - - 3,482 3,538 - - 22,535 22,839
Dyeing, weaving and other charges - - - - 1,080 881 - - 1,080 881
Provision for obsolescence and
slow moving stores - - - - 3,400 - - - 3,400 -
Stores and spares 24,730 24,512 7,626 9,497 64 - - - 32,420 34,009
Rent, rates, taxes and lease rentals 4,176 3,672 2,420 1,983 1,596 1,141 - - 8,192 6,796
Water, fuel and power 25,772 61,153 46,769 56,502 10,978 9,740 - - 83,519 127,395
Repairs and maintenance 56,571 56,782 9,928 9,588 3,866 1,987 - - 70,365 68,357
Legal and professional charges 1,262 1,108 - - - - - - 1,262 1,108
Insurance 4,202 4,586 2,460 2,403 377 488 - - 7,039 7,477
Postage, telephone and stationery 1,594 1,736 - - - - - - 1,594 1,736
Depreciationmortization 31,095 30,520 26,795 29,814 2,104 2,625 - - 59,994 62,959
Other manufacturing expenses 7,667 5,490 1,971 1,944 313 273 - - 9,951 7,707
Duty drawback and research &
development support claim - - - - (17,113) (6,506) - - (17,113) (6,506)
Bagasse sale (5,468) (2,156) - - - - - - (5,468) (2,156)
Molasses transfer to distillery division (118,527) (101,484) - - - - - - (118,527) (101,484)
152,082 196,974 128,446 137,193 21,237 24,426 - - 301,765 358,593
Manufacturing cost 1,487,116 1,824,873 731,126 795,386 186,391 203,177 - - 2,404,633 2,823,436
Opening stock of work-in-process 426 382 - - 790 735 - - 1,216 1,117
Closing stock of work-in-process (593) (426) - - (450) (790) - - (1,043) (1,216)
(167) (44) - - 340 (55) - - 173 (99)
Cost of goods manufactured 1,486,949 1,824,829 731,126 795,386 186,731 203,122 - - 2,404,806 2,823,337
Opening stock of finished goods 18,030 38,028 165,978 178,382 1,239 5,792 141,603 115,9501 326,850 338,152
Finished goods purchased - - - - 85,776 20,351 - 746,785 85,776 767,136
Molasses transfer to distillery division - - - - - - (29,151) - (29,151) -
Closing stock of finished goods (175,293) (18,030) (143,707) (165,978) (98) (1,239) (396) (141,603) (319,494) (326,850)
(157,263) 19,998 22,271 12,404 86,917 24,904 112,056 721,132 63,981 778,438
1,329,686 1,844,827 753,397 807,790 273,648 228,026 112,056 721,132 2,468,787 3,601,775
=======================================================================================================================================================22.1. Salaries, wages and other benefits include a sum of Rs. 5.36 (2006: Rs. 3.73) million in respect of staff retirement benefits.23. Distribution and marketing expenses =======================================================================================================================================================
(Rupees in thousands)
Sugar Division Distillery Division Textile Division Trading Division Total
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
=======================================================================================================================================================
Salaries, wages and
other benefits Note 23.1 3,540 3,094 475 399 2,068 1,787 118 599 6,201 5,879
Insurance 1,467 965 901 604 14 517 29 733 2,411 2,819
Rent, rates, taxes and lease rentals 327 221 - - - - 50 456 377 677
Transport, freight, handling,
forwarding expenses 22,893 8,705 41,511 31,890 5,037 4,428 - 633 69,441 45,656
Other expenses - - 1,583 914 5,154 4,059 61 1,276 6,798 6,249
28,227 12,985 44,470 33,807 12,273 10,791 258 3,697 85,228 61,280
=======================================================================================================================================================23.1. Salaries, wages and other benefits include a sum of Rs. 0.28 (2006: Rs. 0.15) million in respect of staff retirement benefits.24. Administrative expenses =======================================================================================================================================================
(Rupees in thousands)
Sugar Division Distillery Division Textile Division Trading Division Total
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
=======================================================================================================================================================
Salaries, wages and other
benefits - Note 24.1 32,905 25,984 949 543 2,082 1,809 355 919 36,291 29,255
Insurance 911 835 35 35 - - 10 94 956 964
Repairs and maintenance 1,080 1,202 52 14 513 272 43 22 1,688 1,510
Postage, telephone and stationery 2,841 2,332 341 160 326 333 4 847 3,512 3,672
Travelling and vehicle
running expenses 6,625 4,342 44 41 156 136 80 543 6,905 5,062
Rent, rates, taxes and lease rentals 3,597 2,876 388 364 - - 51 1,480 4,036 4,720
Water, electricity and gas 2,027 1,748 53 54 263 147 34 519 2,377 2,468
Fees, subscription and periodicals 773 1,262 - - 3 3 - - 776 1,265
Legal and professional charges 601 460 67 26 - - - - 668 486
Directors' meeting fee 32 26 - - - - - - 32 26
Depreciation 1,210 1,405 104 120 318 338 - - 1,632 1,863
Auditors' remuneration - Note 24.2 661 524 290 141 95 38 35 105 1,081 808
Other expenses - Note 24.3 7,395 8,830 70 29 614 605 12 1,095 8,091 10,559
60,658 51,826 2,393 1,527 4,370 3,681 624 5,624 68,045 62,658
=======================================================================================================================================================24.1. Salaries, wages and other benefits include a sum of Rs. 1.68 (2006: Rs. 1.55) million in respect of staff retirement benefits.24.2. Auditors' remuneration =======================================================================================================================================================
(Rupees in thousands)
Sugar Division Distillery Division Textile Division Trading Division Total
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
=======================================================================================================================================================
Annual audit fee 198 163 122 68 40 19 15 50 375 300
Half yearly review fee 53 41 33 17 11 4 3 13 100 75
Cost audit fee 150 150 - - - - - - 150 150
Tax/other services 169 99 104 41 34 11 13 30 320 181
Out of pocket expenses 91 71 31 15 10 4 4 12 136 102
661 524 290 141 95 38 35 105 1,081 808
=======================================================================================================================================================Auditors' remuneration, other than the cost audit fee of the sugar division, is allocated on the basis of sales.24.3. Donations of Rs. 4.5 (2006: Rs. 6.9) million are included under other expenses of sugar division. None of the directors or their spouses had any interest in the donee's fund. 25. Other operating expenses ================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Workers' Profit Participation Fund 13,775 14,010
Workers' Welfare Fund 5,510 5,604
Impairment on long-term investments 551 1,207
Sales tax - prior years - 13,816
19,836 34,637
================================================================================26. Other operating income================================================================================
Note 2007 2006
(Rupees in thousands)
================================================================================
Profit on sale of long-term investments 51,947 31,421
Dividend income 26.1 18,024 12,355
Gain on sale of fixed assets previously written off 4,024 -
Exchange gain 3,020 1,952
Gain on disposal of fixed assets 2,090 2,012
Agricultural income - net 1,259 2,258
Scrap sale 1,022 298
Other - 355
81,386 50,651
================================================================================26.1. Dividend income includes dividend received from the following related parties:================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Bank AL Habib Limited 6,560 5,467
Habib Insurance Company Limited 6,183 2,561
12,743 8,028
================================================================================In addition to cash dividend, the Company received 1,749,382 Ordinary shares (2006: 728,909 shares) of Rs. 10/- each and 665,910 Ordinary shares (2006: 439,062 shares) of Rs. 5/- each as bonus shares from Bank AL Habib Limited and Habib Insurance Company Limited, respectively.27. Finance cost ==========================================================================================================================================================
Sugar Division Distillery Division Textile Division Trading Division Total
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
==========================================================================================================================================================
Mark-up b interest on
Short-term borrowings 26,340 35,543 14,644 11,740 - 5 - 8,027 40,984 55,315
Workers' Profit Participation Fund 472 395 - - - - - - 472 395
Bank charges 789 1,513 1,018 1,010 3,911 2,968 - - 5,718 5,491
27,601 37,451 15,662 12,750 3,911 2,973 - 8,027 47,174 61,201
Less: Profit on short-term deposits 24,333 12,061 - - 604 104 - - 24,937 12,165
3,268 25,390 15,662 12,750 3,307 2,869 - 8,027 22,237 49,036
==========================================================================================================================================================28. Taxation================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Income tax - Current 47,500 68,000
Prior - (33,000)
47,500 35,000
Deferred tax (7,500) 10,000
40,000 45,000
================================================================================28.1. Reconciliation of tax charge for the year================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Accounting profit 256,213 260,589
Corporate tax rate 35% 35%
Tax on accounting profit at applicable rate 89,674 91,206
Tax effect of timing differences (2,380) 4,625
Tax effect of lower tax rates on certain income (31,381) (11,088)
Tax effect of income exempt from tax (19,680) (12,471)
Tax effect of expenses that are inadmissible
in determining taxable income 3,767 5,728
Adjustment relating to prior years - (33,000)
(49,674) (46,206)
Provision for taxation 40,000 45,000
================================================================================29. Earnings per share - Basic and diluted================================================================================
2007 2006
================================================================================
Profit after taxation 216,213 215,589
================================================================================
Number of shares
(Restated)
================================================================================
Number of ordinary shares of Rs. 5 each 57,600,000 57,600,000
Earnings per share - basic and diluted Rs. 3.75 Rs. 3.74
================================================================================30. Cash generated from operations================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Profit before taxation 256,213 260,589
Adjustment for non-cash charges and other items
Depreciation 61,986 65,202
Provision for obsolescence and 3,400 -
slow moving stores
Gain on disposal of fixed assets (2,090) (2,012)
Profit on sale of long-term investments (51,947) (31,421)
available for sale
Impairment on long-term investments 551 1,207
available for sale
Finance cost 22,237 49,036
Dividend income (18,024) (12,355)
Working capital changes - Note 30.1 (21,742) 159,714
250,584 489,960
================================================================================30.1. Working capital changes================================================================================
2007 2006
(Rupees in thousands)
================================================================================
(Increase) / decrease in current assets
Stores and spares (1,370) 5,609
Stock-in-trade 28,802 112,556
Trade debts (27,632) (24,566)
Loans and advances (33,383) 13,504
Trade deposits and short-term prepayments (1,013) 2,819
Other receivables (553)
(35,149) 146,971
Increase / (decrease) in current liabilities
Trade and other payables 13,407 12,743
Net changes in working capital (21,742) 159,714
================================================================================31. Cash and cash equivalents at the end of the year================================================================================
2007 2006
(Rupees in thousands)
================================================================================
These comprise of the following:
Cash and bank balances 638,531 381,272
Short-term borrowings (488,190) (337,000)
150,341 44,272
================================================================================32. Remuneration of Chief Executive, Directors and Executives==================================================================================================
2007 2006
==================================================================================================
Chief Chief
Execu- Direc- Execu- Total Execu- Direc- Execu- Total
tive tors tives tive tors tives
(Rupees in thousands)
==================================================================================================
Meeting fee - 7 directors
(2006: 7 directors) - 32 - 32 - 26 - 26
Managerial
remuneration 4,488 11,750 18,494 34,732 3,740 9,792 18,424 31,956
Perquisites
Telephone 33 325 396 754 30 318 289 637
Medical 12 142 1,461 1,615 12 155 82 249
Utilities - 641 - 641 - 574 - 574
Entertainment - 184 111 295 - 185 60 245
Retirement benefits 404 1,093 1,699 3,196 281 762 1,156 2,199
4,937 14,135 22,161 41,233 4,063 11,786 20,011 35,860
Number of persons 1 3 11 15 1 3 9 13
==================================================================================================32.1. Chief Executive, Directors and certain Executives are provided with the Company maintained cars.33. Financial instruments and related disclosures 33.1. Concentration of credit risk The Company manages credit risk in trade receivables by limiting significant exposure to any individual customer by setting out credit limits or by securing letters of credit. 33.2. Interest / mark-up risk exposure The Company's exposure to interest / mark-up rate on its financial assets and liabilities are summarized as under: ===============================================================================================================================
2007 2006
Interest / Mark-up bearing Interest / Mark-up bearing
Effective Effective
interest / interest /
profit / Maturity Maturity profit / Maturity Maturity
mark-up upto one after one mark-up upto one after one
rate % year year Total rate % year year Total
===============================================================================================================================
(Rupees in thousands)
===============================================================================================================================
Financial assets
Long-term investments 11.75 879 - 879 11.75 - 3,047 3,047
Cash and bank balances 8.00 to 9.50 630,700 - 630,700 2.50 to 9.50 370,960 - 370,960
631,579 - 631,579 370,960 3,047 374,007
Financial liabilities
Short-term borrowings 7.00 to 7.50 488,190 - 488,190 6.90 to 11.30 337,000 - 337,000
488,190 - 488,190 337,000 - 337,000
===============================================================================================================================33.3. Liquidity riskPrudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities. Company treasury aims at maintaining flexibility in funding by keeping committed credit lines available. 33.4. Foreign exchange risk management Foreign currency risk arises where receivables and payables exist due to transactions with foreign undertakings. The management takes out forward foreign exchange contracts, where appropriate, to mitigate the risk. 33.5. Fair value of the financial instruments The carrying values of all the financial assets and liabilities reflected in the financial statements approximate their fair values. 34. Number of Employees ================================================================================
2007 2006
================================================================================
Total number of permanent employees 353 335
as at September 30
================================================================================35. Capacity and productiona).Sugar division =============================================================================================
2007 2006
Working Working
Quantity days Quantity days
=============================================================================================
Crushing capacity 7,000 M.Tons Per Day 7,000 M. Tons Per Day
Capacity based on actual
working days 959,000 M.Tons 137 861,000 M.Tons 123
Actual crushing 710,965 M. Tons 137 536,644 M. Tons 123
Sucrose recovery 9.00 % 9.75
Sugar production 64,015 M. Tons 52,302 M. Tons
=============================================================================================In addition to production of sugar from sugarcane, 2,860 (2006: 28,228) M. Tons of sugar have been produced from refining of raw sugar.Main reason for under utilization of production capacity of sugar division is insufficient supply of sugarcane. b) Distillery division ========================================================================== Capacity 34,000 MTons 300 34,000 M.Tons 300 Actual production 29,608 M.Tons 324 26,322 M.Tons 284 ==========================================================================c).Textile division ========================================================================== Capacity 300,000 Kgs. 300 300,000 Kgs. 300 Actual production 685,287 Kgs. 300 856,749 Kgs. 296 ==========================================================================The actual production of textile division is higher than the capacity due to purchase of semi-finished goods. 36. Transactions with related parties Material transactions with related parties, other than remuneration and benefits to Directors and key management personnel under the terms of their employment, are given below: ================================================================================
2007 2006
(Rupees in thousands)
================================================================================
Insurance premium 10,824 16,543
Insurance claim received 3,158 3,119
Profit on short-term deposits 3,200 3,551
Purchases / sales / services 717 1,602
Dividend received 12,744 8,028
Dividend paid 5,490 5,385
Bonus shares received at nominal value 20,823 9,484
Bonus shares issued at nominal value 9,150 8,975
Freight (Paid to Asia Marine (Pvt.) Ltd.
as agents of Stolt-Neilson 14,314 -
Transportation Group Pte. Ltd.)
Bank charges 276 239
================================================================================Transactions with related parties are carried out at arm's length.37. Dividend In their meeting held on December 19, 2007, the Board of Directors of the Company have proposed a final cash dividend for the year ended September 30, 2007 of Re. 1.00 per share (20%). The Directors have also recommended a stock dividend through the issue of bonus shares in the proportion of one (1) bonus share of Rs. 5 each for every four (4) (25%) Ordinary shares of Rs. 5 each held. The bonus shares, so issued shall not be eligible for the final cash dividend declared for the year ended September 30, 2007. The approval of the members for the proposed final cash dividend and the proposed bonus issue will be obtained at the Annual General Meeting to be held on January 26, 2008. The financial statements for the year ended September 30, 2007 do not include the effect of the proposed final cash dividend and the proposed bonus issue which will be accounted for in the financial statements for the year ending September 30, 2008. 38. General -- Figures have been rounded off to the nearest thousand rupees. -- These financial statements were authorised for issue on December 19, 2007 by the Board of Directors of the Company. |