| JDW Sugar Mills Ltd - 2005 |
============================================================================================== BALANCE SHEET AS AT 30 SEPTEMBER 2005 ============================================================================================== 2005 2004 Notes (Rupees) (Rupees) ============================================================================================== LIABILITIES SHARE CAPITAL AND RESERVES AUTHORISED CAPITAL: 25,000,000 ordinary shares of Rs 10/- each 250,000,000 250,000,000 Issued, Subscribed and Paid-up Capital 22,634,920 ordinary shares of Rs 10/- each fully paid in cash 4 226,349,200 205,772,000 Un-appropriated Profit 651,073,195 378,698,059 877,422,395 584,470,059 NON CURRENT LIABILITIES: Subordinated Loan From Director - Unsecured 5 100,000,000 100,000,000 Long Term Loans - Secured 6 1,187,500,000 827,500,000 Liabilities Against Assets Subject to Finance Lease 7 211,562,572 124,773,192. Deferred Liability - Tax 25 6,932,840 - 1,505,995,412 1,052,273,192 CURRENT LIABILITIES: Short term borrowings - Secured 8 655,503,773 496,930,642 Current maturity of long term liabilities 9 263,493,079 140,530,730 Trade and other payables 10 266,219,340 199,195,311 Interest and mark-up accrued 52,371,521 19,162,966 Provision for taxation 13,968,068 9,456,609 1,251,555,781 865,276,258 Contingencies and commitments 11 ASSETS FIXED ASSETS: Property, Plant and Equipment 12 2,043,801 932,021,869 Capital Work in Progress 14 456,489,503 219,412,514 Stores and Spares held for Capital Expenditure 7,555,414 32,730,246 2,507,846,098 1,184,164,629 Long term advances - Unsecured - 377,284,326 Long term deposits 15 20,269,954 14,812,014 CURRENT ASSETS: Stores, spares and loose tools 16 176,453,326 110,880,772 Stock in Trade - Finished goods - 33,663,119 Trade debtors - Unsecured, considered good 75,240,207 124,675,910 Advances, deposits, prepayments 17 702,134,049 571,630,368 and other receivables Cash and bank balances 18 153,029,954 84,908,371 1,106,857,536 925,758,540 3,634,973,588 2,502,019,509 ============================================================================================== ============================================================================================== PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 SEPTEMBER 2005 ============================================================================================== 2005 2004 Notes (Rupees) (Rupees) ============================================================================================== Gross Sales 3,194,271,497 2,057,537,650 Less: Sales tax and brokerage charges (401 797,469) (167,355,383) Net Sales 19 2,792,474,028 1,890,182,267 Cost of Sales 20 (2,147,391,542) (1,471,980,368) Gross profit 645,082,486 418,201,899 OPERATING EXPENSES: Administrative 21 (71,416,725) (62,137,305) Selling and distribution 22 (3,964,465) (2,368,339) (75,381,190) (64,505,644) Operating profit 569,701,296 353,696255 Financial charges 23 (172,857,336) (69,341,086) 396,843,960 284,355,169 Other (expenses) / income 24 (12,327,596) 1,184,903 384,516,364 285,540,072 Workers' Profit Participation Fund (19,225,818) (14,277,004) Profit before taxation 365,290,546 271,263,068 Provision for taxation 25 (20,895,210) (9,456,609) Profit after taxation 344,395,336 261,806,459 Basic and diluted earnings per share 30 15.22 11.57 ============================================================================================== ============================================================================================== CASH FLOW STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER 2005 ============================================================================================== 2005 2004 Note (Rupees) (Rupees) ============================================================================================== CASH FLOW FROM OPERATING ACTIVITIES: Profit before taxation 365,290,546 271,263,068 ADJUSTMENTS FOR NON CASH AND OTHER ITEMS: Depreciation 138,466,286 69,080,829 Profit on disposal of fixed assets (256,000) - Financial charges 172,857,336 69,341,086 Workers' Profit Participation Fund 19,225,818 14,277,004 Staff retirement benefits 8,325,442 5,476,122 338,618,882 158,175,041 Operating Profit before working capital changes 703,909,428 429,438,109 (INCREASE) / DECREASE IN CURRENT ASSETS: Stores, spares and loose tools (65,572,554) (46,508,929) Stock in trade 33,663,119 (33,663,119) Advances, deposits, prepayments and other receivables (100,090,701) (240,311,135) Trade debtors 49,435,703 (107,025,272) (82,564,433) (427,508,455) INCREASE IN CURRENT LIABILITIES: Trade and other payables 62,118,106 90,879,538 Cash generated from operations 683,463,101 92,809,192 Financial charges paid (126,531,439) (52,970,265) Staff retirement benefits paid (8,013,273) (49,901,550) Workers' Profit Participation Fund payments (16,493,985) (8,329,064) Income tax paid (10,665,700) (8,797,973) (161,704,397) (119,998,852) Net cash generated from / (used in) operating activities 521,758,704 (27,189,660) CASH FLOW FROM INVESTING ACTIVITIES: Additions to fixed assets (1,472,990,086) (320,567,377) Advances to suppliers for capital expenditure 377,284,326 (377,284,326) Stores and spares held for capital expenditure 25,174,832 (32,730,246) Proceeds realised from sale and lease back transactions 112,738,400 106,740,180 Increase in long term deposits (5,457,939) (9,058,415) Net cash used in investing activities (963,250,467) (632,900,184) CASH FLOW FROM FINANCING ACTIVITIES: Lease rental paid (57,934,518) (48,671,068) Short term borrowings 158,573,132 286,641,409 Increase in long term loans 460,000,000 540,656,043 Dividend paid (51,025,268) (40,694,262) Net cash generated from financing activities 509,613,346 737,932,122 Net increase in cash and cash equivalents 68,121,583 77,842,278 Cash and cash equivalents at the beginning of the year 84,908,371 7,066,093 Cash and cash equivalents at the end of the year 18 153,029,954 84,908,371 ============================================================================================== ===============================================================================================
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 SEPTEMBER 2005
===============================================================================================
Reserve for
Share Issuance of Accumulated
Capital Bonus Profit Total
Shares
(Rupees)
===============================================================================================
Balance as at September 30, 2003 205,772,000 - 116,891,600 322,663,600
Net profit for the year - - 261,806,459 261,806,459
Balance as at September 30, 2004 205,772,000 - 378,698,059 584,470,059
Cash dividend at the rate of
Rs 2.5 (25 %) per share - - (51,443,000) (51,443,000)
Transferred to reserve for issuance
of bonus shares - 20,577,200 (20,577,200) -
Bonus shares issued at the rate of 20,577,200 (20,577,200) - -
Net profit for the year - - 344,395,336 344,395,336
Balance as at September 30, 2005 226,349,200 - 651,073,195 877,422,395
===============================================================================================NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 20051. THE COMPANY AND ITS OPERATIONS JDW Sugar Mills Limited ("the Company") was incorporated in Pakistan on 31 May 1990 as a Private Limited Company under the Companies Ordinance, 1984 and was subsequently converted into a Public Limited Company on 24 August 1991. Shares of the Company are listed on the Karachi and Lahore Stock Exchanges. The registered office of the Company is situated at 32-N, Gulberg - II, Lahore, Pakistan. The principal activity of the Company is production and sale of crystalline sugar. Subsequent to the year's end, the company has acquired 96.03 % share holding in United Sugar Mills Limited for a total consideration of Rs 960,290,397. 2. 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 Accounting Standards as notified under the provisions of the Companies Ordinance, 1984. Wherever, the requirements of the Companies Ordinance, 1984 or directives issued by the Securities and Exchange Commission of Pakistan differ with the requirements of these standards, the requirements of Companies Ordinance, 1984 or the requirements of the said directives take precedence. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 3.1. ACCOUNTING CONVENTION These accounts have been prepared under the historical cost convention. 3.2. PROPERTY, PLANT AND EQUIPMENT Owned Operating fixed assets are stated at cost less accumulated depreciation and any identified impairment loss except freehold land, capital work in progress and stores and spares held for capital expenditure, which are stated at cost. Depreciation is charged to income on reducing balance method, so as to write off the written down value of an asset over its estimated useful life at rates disclosed in note 12 to the accounts. Full year's depreciation is charged on all assets in the year of acquisition. No depreciation is charged in the year of disposal. Maintenance and normal repairs are charged to income as and when incurred. Major renewals and improvements are capitalized and the assets so replaced, if any, are retired. Gain or loss arising on the sale of fixed assets is taken to profit and loss account. Leased Leased assets held under finance leases are stated at cost less accumulated depreciation at the rates and basis applied to the Company's owned assets. The outstanding obligations relating to assets subject to finance lease are accounted for at the net present value of liabilities. The financial charges are calculated at the interest rates implicit in the lease and are charged to income. 3.3. STORES AND SPARES These are valued at weighted average cost except for items in transit, which are valued at cost comprising invoice value and related expenses incurred thereon up to the balance sheet date. 3.4. STOCK IN TRADE Finished goods These are valued at the lower of weighted average cost and net realisable value except for stock in transit, which is valued at cost comprising invoice value and related expenses incurred thereon up to the balance sheet date. Cost is determined as follows: Raw materials at weighted average cost
Work-in-process and finished goods at weighted average cost and
related manufacturing expenses
Molasses at lower of cost and net realisable valueNet realisable value signifies the estimated selling price in the ordinary course of business less other costs necessary to be incurred to make the sale.3.5. RECEIVABLES Trade debts are carried at original invoice amount less an estimate made for doubtful debts based on a review of all outstanding amounts at the year's end. Bad debts are written off when identified. 3.6. STAFF RETIREMENT BENEFIT Defined contribution plan The company has established a recognised employees' provident fund on 06 November 2003. The employees and the Company make equal monthly contribution of 10% of basic salary towards the fund. 3.7. TAXATION Current Provision for current taxation is based on taxable income at the current rates of taxation after taking into account available tax credits and rebates. Deferred The Company accounts for deferred taxation, using the liability method, on all temporary differences. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, unused tax losses and tax credits can be utilised. Deferred tax is calculated at the rates are expected to apply to the period when the differences reverse based on tax rates that have been enacted or substantively enacted by the balane sheet date. 3.8. REVENUE RECOGNITION Revenue is recognised on delivery of goods to the customers or when the Company enters into firm contracts for future delivery of goods. Interest and harvesting income are recognised on accrual basis. 3.9. CASH AND CASH EQUIVALENTS Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of cash flow statement, cash and cash equivalents comprise of cash in hand and bank balances. 3.10. PROVISIONS Provisions are recognised when the company has a present obligation as a result of past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. 3.11. FINANCIAL INSTRUMENTS Financial assets and liabilities are recognised when the Company becomes party to the contractual provisions of the instrument. Financial assets are de-recognised when the company loses control of the contractual rights that comprise the financial asset. Financial liabilities are de-recognised when they are extinguished - that is, when the obligation specified in the contract is discharged, cancelled, or expired. The particular measurement methods adopted are disclosed in the individual policy statements associated with each item. 3.12. BORROWING COSTS Borrowing costs incurred on long term finances obtained for the construction of qualifying assets are capitalised up to the date, the respective assets are available for the intended use. All other borrowing costs are taken to the profit and loss account currently. 3.13. TRADE AND OTHER PAYABLES Liabilities for trade and other amounts payable are carried at cost, which is the fair value of the consideration to be paid in future for goods and services. 3.14. FOREIGN CURRENCY TRANSACTIONS Foreign currency transactions are converted into Pak Rupees using the rates prevailing on the date of transaction while monetary assets and liabilities are converted into Pak Rupees using the rates of exchange prevailing at the balance sheet date. Exchange gains and losses on conversion are charged to income. 3.15. OFFSETTING Financial assets and liabilities are off set 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. 3.16. IMPAIRMENT The carrying amounts of the Company's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated and impairment losses are recognised. 3.17. DIVIDEND Dividend is recognised as a liability in the period in which it is declared. 4. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL ==============================================================================================
2005 2004
(Rupees) (Rupees)
==============================================================================================
20,577,200 Ordinary shares of Rs 10/
each fully paid in cash 205,772,000 205,772,000
2,057,720 Ordinary shares of Rs 10/-each issued as fully
paid bonus shares 20,577,200 -
226,349,200 205,772,000
==============================================================================================5. SUBORDINATED LOAN FROM DIRECTOR - UN SECUREDThis loan is subordinated to the syndicated loan. Mark up at the rate of 8 - 13.14 % per annum is payable on quarterly basis. 6. LONG TERM LOANS - SECURED =====================================================================================================================
2005 2004 Mark-up rate Number of
(Rupees) (Rupees) Installments
=====================================================================================================================
i) Faysal Bank Limited 97,500,000 127,500,000 6 months KIBOR 4 equal monthly
- Morabaha LPO plus 200 bps with a installments of Rs. 7.5
floor rate of 10% p.a. million from March to
June each year till 30
September 2008.
ii) Habib Bank Limited 96,000,000 128,000,000 6 months cut off yield 2 equal installments of
- Demand Finance T.Bill plus 250 bps with 16 million each in April
floor rate of 5.5 % p.a. and July each year till 01
July 2008.
iii) Union Bank Limited 84,000,000 112,000,000 6 months KIBOR plus 300 4 equal monthly
- Term Finance bps with floor rate of installments of Rs. 7
7.5% p.a. million each from
December to March each
year till 31 March
2008.
iv) Syndicated Loan - I
National Bank of
Pakistan 300,000,000 300,000,000 6 months KIBOR plus 250 12 equal semi annual
Habib Bank Limited 150,000,000 100,000,000 bps with floor rate of 5% installments starting from
The Bank of Punjab 100,000,000 100,000,000 p.a. 18 November 2005 and
Saudi Pak Commercial ending on 18 May 2011.
Bank Limited 50,000,000 50,000,000
600, 000 000 550,000,000
v) Syndicated Loan - II
- Faysal Bank Limited 150,000,000 - 6 months KIBOR plus 2.5% 12 equal and consecutive
- Allied Bank Limited 100,000,000 - with a floor rate semi annual installments
- Soneri Bank Limited 50,000,000 - of 5% p.a. with a grace period of
- Pak Kuwait Investment 12 months, the first
Company Limited 100,000,000 - installment falls due on the
- PICIC Commercial 18th month after
Bank Limited 100,000,000 - disbursement.
500,000,000 500,000,000
1,377,500,000 917,500,000
Less: Transfer to
current maturity note-9 190,000,000 90,000,000
1,187,500,000 827,500,000
===================================================================================================================== Securities of Loans(i) This loan is secured by way of first pari passu charge to an extent of Rs. 200 million over fixed assets and personal guarantee of all Directors of the Company. (ii) The loan is secured by way of first pari passu charge to an extent of Rs 250 million over fixed assets of the Company and personal guarantee of all Directors of the company. (iii) The loan is secured by way of first pari passu charge over fixed assets of the company to an extent of Rs 250 million and personal guarantee of all Directors of the Company. (iv) This loan is secured by way of first pari passu equitable mortgage on lands measuring 248 and 552 Kanals, first pari passu charge on all other fixed assets and personal guarantee of all Directors of the company. (v) This loan is secured by way of first pari passu charge over fixed assets of the company and personal guarantee of all Directors of the company. 7. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE The amount of future minimum lease payments along with their present value and the periods during which they will fall due are: =============================================================================================================
2005 2004
(Rupees) (Rupees)
=============================================================================================================
Minimum Financial Present Minimum Financial Present
lease charges for value lease charges for value
payments future periods payments future periods
=============================================================================================================
Not later than one year 86,880,315 13,387,236 73,493,079 61,578,024 11,047,294 50,530,730
Later than one year
and not later
than five years 217,765,900 24,536,664 193,229,236 135,568,455 10,795,263 124,773,192
Later than five years 20,635,066 2,301,730 18,333,336 - - -
325,281,281 40,225,630 285,055,651 197,146,479 21,842,557 175,303,922
=============================================================================================================The company has entered into various lease agreements with First Punjab Modaraba, Faysal Bank Ltd., Bank Alfalah Limited, First Habib Bank Modarba, National Bank Modaraba and Orix Leasing Pakistan Ltd for plant and machinery and vehicles. Lease rentals are payable on quarterly and monthly basis and include finance charges ranging from 6.76% to 13% per annum which has been used as the discounting factor.The company has the option to purchase the assets upon completion of lease period and has the intention to exercise such option. There are no financial restrictions imposed by lessors. 8. SHORT TERM BORROWINGS - SECURED ==========================================================================================
Limits Notes 2005 2004
(Rs. in million) (Rupees) (Rupees)
==========================================================================================
Banking and Financial Institutions
Faysal Bank Limited - Morabaha LPO 150 8.1 150,000,000 100,000,000
Union Bank Limited
Running Finance 200 8.2 177,012,057 99,963,793
- Running Finance 50 - 50,000,000
First Punjab Modaraba - Morabaha 42 8.3 30,000,000 30,000,000
The Bank of Punjab - Running finance 50 8.4 49,898,056 29,989,667
Habib Bank Limited
- Running Finance 100 8.5 78,830,330 11,422,046
- Cash Finance 270 - - 4,259,992
Allied Bank Limited - Running finance 100 8.6 99,792,230 -
-United Bank Limited - Running finance 70 8.7 69,971,100 -
Saudi Pak Commercial Bank Limited
- Running Finance 50 - 49,957,144
- Cash Finance 100 - 76,338,000
Fidelity Investment Bank Ltd - PDF 25 - 25,000,000
Escorts Investment Bank Limited - Morabaha 50 - 20,000,000
655,503,773 496,930,642
==========================================================================================8.1. This facility is secured by way of first pari passu charge over current assets for Rs. 134 million and personal guarantee of all the Directors of the company.Mark up at the rate of 6 months KIBOR+225 bps with a floor of 10% pa. payable on quarterly basis. The repayment of the loan is due on 31 March 2006. 8.2. This facility is secured by way of first pari passu charge over fixed assets for Rs 250 million, joint pari passu charge over current assets for Rs 250 million, ranking charge over fixed assets for Rs 135 million and personal guarantee of all the Directors of the company. Mark up is at the rate of 6 months KIBOR+ 350 bps payable on quarterly basis. The repayment of the loan is due on 30 April 2006 or on demand whichever is earlier. 8.3. This facility is secured by way of ranking charge for Rs 84 million on current and fixed assets which will be converted into joint pari passu charge within 45 days from the date of disbursements and personal guarantee of all the Directors of the company. The repayment of the loan is due on November 30, 2005. Mark up at the rate of 6 months KIBOR+350 bps with floor of 8% p.a payable on quarterly basis. 8.4. This facility is secured by way of joint pari passu charge over current assets of the Company up to 66.6 million and personal guarantee of all the Directors of the company. Mark up at the rate of 6 months KIBOR+300 bps with a floor of 6.5% p.a payable on quarterly basis. The repayment of the loan is due on 30 September 2005. 8.5. This facility is secured by way of first pari passu charge to the extent of Rs. 200 million over current assets of the company, personal guarantee of all the Directors of the company. The repayment of the loan is due on May 31, 2006. Mark up at the rate of one month KIBOR+250 bps with a floor of 5.5% p.a payable on quarterly basis. 8.6. This facility is secured by way of joint pari passu charge over the present and future current assets including book debts and related receivable of the company and personal guarantee of all the Directors of the company. The repayment of the loan is due on 30 June 2006. The markup is payable at the rate of 3 months KIBOR plus 175 bps with no cap or floor. 8.7. This facility is secured by way of first pari passu charge over the current assets of the company for an amount of Rs 94 million and personal guarantee of all the Directors. The repayment of loan is due on October 30, 2005. Mark up is payable at the rate of 3 months KIBOR+125 bps payable on quarterly basis. 9. CURRENT MATURITY OF LONG TERM LIABILITIES ==============================================================================================
2005 2004
Notes (Rupees) (Rupees)
==============================================================================================
Current portion of long term loans from banking
companies and financial institutions 6 190,000,000 90,000,000
Current portion of liabilities against assets
subject to finance lease 7 73,493,079 50,530,730
263,493,079 140,530,730
==============================================================================================10. TRADE AND OTHER PAYABLES==============================================================================================
2005 2004
Note (Rupees) (Rupees)
==============================================================================================
Trade creditors 182,295,981 97,082,448
Sales tax payable 43,745,310 47,166,150
Advances from customers 2,036,245 27,940,279
Worker's Profit Participation Fund payable 10.1 19,225,818 15,049,800
Accrued expenses 6,751,512 5,823,992
Tax deducted at source 2,459,632 1,164,976
Retention money 1,208,965 971,336
Unclaimed dividend 1,342,348 924,615
Payable to Employees Provident Fund Trust 1,019,689 707,520
Provision for Social Security Contribution 3,189,464 -
Other payables 2,944,376 2,364,195
266,219,340 199,195,311
==============================================================================================10.1. WORKERS' PROFIT PARTICIPATION FUND==============================================================================================
2005 2004
(Rupees) (Rupees)
==============================================================================================
Opening balance 15,049,800 8,329,064
Add: Allocation for the year 19,225,818 14,277,004
Interest on funds utilised in the company's business 1,444,185 772,796
35,719,803 23,378,864
Less: Paid during the year (16,493,985) (8,329,064)
Closing balance 19,225,818 15,049,800
==============================================================================================11. CONTIGENCIES AND COMMITMENTSContingencies 11.1. The company claimed an exemption of Rs.10.75 million from excise duty on an export transaction during 1993-94. However, the Excise Department rejected the claim and the Company deposited Rs 9.88 million under protest. The company has been in litigation against this demand since then and the decision of the case is still pending. The company expects the outcome of the case to be favourable. 11.2. The Sales Tax Department has demanded further tax from the Company on the grounds that it charged sales tax at the rate of 15% on it's sales to persons liable to be registered. The company is in adjudication against this on grounds of the definition of registered person in the Sales Tax Act. The Lahore High Court has stopped any recovery by the sales tax department from JDW Sugar Mills Limited till the decision of Collector of Customs, Sales Tax and Central Excise, Multan Region. The Company expects a favourable outcome in this case. The amount of further sales tax is Rs 77.9 million. Commitments 11.3. The company has capital commitments of Rs 42.293 million (2004: Rs 392.882 million) on account of import of machinery and its related components. 11.4. The Company has commitments of Rs 251.630 million (2004: Rs Nil) in respect of letters of credit for import of raw sugar. 11.5. The Company has commitment of Rs 100 million (2004: Rs Nil) in respect of counter guarantee given to United Bank Ltd., on account of agricultural loan to growers. 12. PROPERTY, PLANT AND EQUIPMENT =====================================================================================================================================================================================
Rupees
PARTICULARS COST DEPRECIATION Net
=====================================================================================================================================================================================
As at Additions Transfers/ As at Rate As at For the Transfers/ As at book value
01 October during the deletion doting 30 September % 01 October year Deletion during 30 September asat30
2004 year the year 2005 2004 the year 2005 September
2005
=====================================================================================================================================================================================
OWNED:
Freehold land 24,130,863 3,150,057 - 27,280,920 - - - - 27,280,920
Factory building on freehold land 111,477,737 13021,786 - 124,499523 10 56,909,390 6,759,013 - 63,668,403 60,831,120
Non factory building on
freehold land 19,296,711 160,985,049 - 180,281760 5 5,396,169 8,744,280 - 14,140,449 166,141,311
Roads and boundary wall 7,098,931 - - 7,098,931 10 4,726,782 237,215 - 4,963,997 2,134,934
Plant and machinery 933,425,591 936,401,833 - 1,869,827,424 5 316,966,570 77,643,043 - 394,609,613 1,475,217,811
Office equipment 16,623,479 3,764,280 - 20,387,759 20 10,446,214 1,988,309 - 12,434,523 7,953,236
Electrical installation 32,661,927 - - 32,661,927 10 22,021,235 1,064,069 - 23,085,304 9,576,623
Tools and equipment 9,064,731 882,754 - 9,947,485 10 3,564,895 638,259 - 4,203,154 5,744,331
Furniture and fixture 8,783,770 377,904 - 9,161,674 10 4,112,719 504,896 - 4,617,615 4,544,060
Weigh bridge 9,717,830 - - 9,717,830 10 5,645,689 407,214 - 6,052,903 3,664,927
Arms and ammunitions 835,500 126,000 - 961,500 10 266,700 69,480 - 336,180 625320
Motor vehicles 73,181,893 43,400,132 (44,972,000) 71,610025 20 44,818,687 5,358,268 (1,656,000) 48,520,955 23,089,070
Tubewell 744,434 - - 744,434 10 193,180 55,125 - 248,305 496,129
Implements 4,726,117 73,803,302 (69,166,4001 9,363,019 10 1,418,782 794,424 - 2,213,206 7,149,813
1,251,769,514 1,235,913,097 (114,138,400) 2,373,544,211 476,487,013 104,263,594 (1,656,000) 579,094,607 1,794,449,604
LEASED:
Plant and machinery 115,156,160 14,100,000 - 129,256,160 5-10 6,090,014 8,843,307 - 14,933,321 114,322,839
Motor vehicles 59,164,980 43,332500 - 102,497,480 20 11,491,758 18,201,144 - 29,692,902 72,804,578
Implements - 69,382400 - 69,382,400 10 - 7158,240 - 7,158,240 62,224,160
174,321,140 126,814,900 - 301,136040 17,581,772 34,202,691 - 51,784,463 249,351,577
2005 1,426,090,654 1,362,727,897 (114,138,400) 2,674,680,251 494,068,785 138,466,285 (1,656,000) 630,879,070 2,043,801,181
2004 1,275,245,791 288,096,680 (137,251,817) 1,426,090,654 425,001,755 69,080,829 113,8001 494,068,785 932,021,869
=====================================================================================================================================================================================12.1. DEPRECIATION CHARGE FOR THE YEAR HAS BEEN ALLOCATED AS FOLLOWS==============================================================================================
2005 2004
Notes (Rupees) (Rupees)
==============================================================================================
Cost of sales 20.1 120,634,52 2 64,867,033
Administrative expenses 21 5,210,523 4,213,796
Other Income (Harvesting) 24 12,621,240 -
138,466,285 69,080,829
==============================================================================================12.2. BORROWING COSTS CAPITALISED DURING THE YEAR ARE AS FOLLOWS==============================================================================================
2005 2004
(Rupees) (Rupees)
==============================================================================================
Subordinated loan from director 2,295,274 -
Syndicated loan - I 25,677,383 -
27,972,657 -
==============================================================================================13. DISPOSAL OF FIXED ASSETS=======================================================================================================
Description Cost Accumulated Book Sale Gain Particular of
Depreciation Value proceed Buyer
=======================================================================================================
Motor vehicle 4,600,000 1,656,000 2,944,000 3,200,000 256,000 Mr. Tariq -
by negotiation
2005 4,600,000 1,656,000 2,944,000 3,200,000 256,000
2004 - - - - - -
=======================================================================================================14. CAPITAL WORK IN PROGRESS==============================================================================================
2005 2004
(Rupees) (Rupees)
==============================================================================================
Machinery and equipment 367,914,621 167,527,071
Civil works 24,990,771 16,463,856
Financial charges 36,019,066 10,335,134
Other expenses 27,565,045 25,086,453
456,489,503 219,412,514
==============================================================================================14.1. An amount of Rs 923,348,809 (2004: Rs Nil) have been transferred during the year from capital work in progress.15. LONG TERM DEPOSITS These mainly comprise of security deposits with leasing companies in respect of leasing facilities availed. 16. STORES, SPARES AND LOOSE TOOLS ==============================================================================================
2005 2004
(Rupees) (Rupees)
==============================================================================================
Stores 141,811,182 85,281,400
Spares 27,131,391 18,106,970
Loose tools 2,818,156 2,812,490
Oil and lubricants 1,786,935 2,608,177
Packing materials 2,212,278 1,334,494
Civil stores 693,384 737,241
176,453,326 110,880,772
==============================================================================================17. ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES==============================================================================================
2005 2004
Notes (Rupees) (Rupees)
==============================================================================================
Advances to growers, suppliers and contractors
- Unsecured, considered good 632,199,528 366,629,937
Advances to staff - Unsecured, considered good 17.1 2,977,841 1,910,996
Letters of credit 37,272,256 181,467,989
Excise duty receivable 9,888,364 9,888,364
Advance income tax 11,109,920 9,895,131
Prepaid expenses 5,925,965 489,168
Other receivables 17.2 2,760,175 1,348,783
702,134,049 571,630,368
==============================================================================================17.1. This represents unsecured interest free advances to employees and includes Rs 5,217,750 (2004: Rs 3,689) receivable from executives of the company.17.2. The balance includes expenses amounting to Rs. 2,689,662 (2004: Rs.1 278,270) reimbursable by JK Agri Solutions (Private) Limited, Riaz Bottlers (Private) Limited and Superior Textile Mills Limited, all associated Companies, on account of telephone, fax and photocopying charges, as the companies share common premises. 18. CASH AND BANK BALANCES ==============================================================================================
2005 2004
Note (Rupees) (Rupees)
==============================================================================================
Cash in hand 994,576 1,483,930
AT BANKS:
Current account 18.1 152,035,378 83,424,441
153,029,954 84,908,371
==============================================================================================18.1. This balance icncludes Rs 3,745,883 kept under lien under security against Central Excise duty on Demand Finance.19. SALES-NET ==============================================================================================
2005 2004
(Rupees) (Rupees)
==============================================================================================
Sugar 3,082,060,637 2,011,283,889
Molasses 112,210,860 46,253,761
3,194,271,497 2,057,537,650
Less: Sales tax 401,334,545 166,943,613
Brokerage charges 462,924 411,770
401,797,469 167,355,383
2,792,474,028 1,890,182,267
==============================================================================================20. COST OF SALES==============================================================================================
2005 2004
Note (Rupees) (Rupees)
==============================================================================================
Opening stock finished goods - Sugar 33,663,119 -
Add: Cost of goods manufactured 20.1 2,113,728,423 1,505,643,487
2,147,391,542 1,505,643,487
Less: Closing stock finished goods - Sugar - (33,663,119)
2,147,391,542 1,471,980,368
==============================================================================================20.1. COST OF GOODS MANUFACTURED COST OF SUGARCANE CONSUMED==============================================================================================
2005 2004
Notes (Rupees) (Rupees)
==============================================================================================
(Including procurement and other costs) 1,710,842,341 1,243,744,315
Salaries, wages and other benefits 20.1.1 103,018,534 75,840,844
Depreciation 12.1 120,634,522 64,867,033
Stores and spare consumed 69,591,144 47,761,193
Packing materials consumed 29,356,849 21,809,584
Chemicals consumed 10,344,410 8,921,685
Oil, lubricants and fuel consumed 15,612,134 9,091,450
Telephone and fax 835,968 1,059,107
Electricity 7,154,251 4,346,692
Insurance 12,273,172 4,179,000
Vehicle running expenses 11,607,572 7,226,080
Printing and stationery 2,618,850 1,575,651
Travelling and conveyance 1,403,463 1,202,549
Freight and octroi 3,024,408 2,368,256
Mud and bagasse shifting expenses 2,227,065 1,524,435
Handling and storage of sugar 4,590,990 1,646,385
Repairs and maintenance 2,049,466 3,095,630
Other expenses 6,543,284 5,383,598
2,113,728,423 1,505,643,487
==============================================================================================20.1.1. Salaries, wages and other benefits include Rs 3,377,074 (2004: Rs 2,195,392) in respect of staff retirement benefits.21. ADMINISTRATIVE EXPENSES ==============================================================================================
2005 2004
Notes (Rupees) (Rupees)
==============================================================================================
Salaries, wages and other benefits 21.1 19,360,649 15,285,096
Travelling expenses 28,022,955 26,078,846
Depreciation 12.1 5,210,523 4,213,796
Vehicle running and maintenance 3,659,128 4,109,552
Charity and donations 21.2 3,079,000 3,427,000
Telephone and fax 2,455,813 2,529,872
Legal and professional charges 1,339,430 1,304,775
Computer software and maintenance 886,540 915,420
Office rent and renovation 2,960,110 825,116
Fee, subscription and renewals 157,817 517,182
Advertising 685,361 487,068
Printing and stationery 964,659 420,695
Auditors' remuneration 21.3 526,000 500,000
Electricity 298,556 326,634
Insurance 932,008 302,676
Postage 255,407 232,258
Entertainment 165,185 205,722
Fee and taxes 184,414 160,125
Newspapers, books and periodicals 130,950 152,972
Other expenses 142,220 142,500
71,416,725 62,137,305
==============================================================================================21.1. Salaries, wages and other benefits include Rs 683,415 (2004: Rs 482,947) in respect of staff retirement benefits.21.2. CHARITY AND DONATIONS None of the Directors of the company or their spouses have any interest in, or are otherwise associated with any of the recipients of donations made by the company during the year. 21.3. AUDITORS REMUNERATION ==============================================================================================
2005 2004
(Rupees) (Rupees)
==============================================================================================
Audit fee 400,000 309,000
Half yearly review and others 100,000 165,000
Out of pocket expenses 26,000 26,000
526,000 500,000
==============================================================================================22. SELLING EXPENSES==============================================================================================
2005 2004
Note (Rupees) (Rupees)
==============================================================================================
Salaries, wages and other benefits 22.1 1,820,230 1,212,176
Sugar loading expenses 2,070,334 1,062,921
Other selling expenses 73,901 93,242
3,964,465 2,368,339
==============================================================================================22.1. Salaries, wages and staff benefits include Rs 54,308 (2004: As. 32,976) in respect of staff retirement benefits.23. FINANCIAL CHARGES ==============================================================================================
2005 2004
(Rupees) (Rupees)
==============================================================================================
Mark up on secured short term loans 70,192,037 29,762,450
Mark up on secured long term loans 83,933,543 26,265,900
Financial charges on leases 11,673,157 7,491,432
Bank charges and commission 5,246,414 3,630,519
Project monitoring fee 368,000 1,303,220
Mark up on Worker's Profit Participation Fund 1,444,185 772,796
Mark up on Provident Fund balance - 114,769
172,857,336 69,341,086
==============================================================================================24. OTHER (EXPENSES) / INCOME==============================================================================================
2005 2004
Note (Rupees) (Rupees)
==============================================================================================
Harvesting income 7,615,535 1,139,486
Depreciation on implements 12.1 (12,621,240) --
Financial cost of leased assets (7,598,671) --
(12,604,376) 1,139,486
Miscellaneous income 20,780 45,417
Profit on sale of fixed asset 256,000 --
(12,327,596) 1,184,903
==============================================================================================25. TAXATION==============================================================================================
2005 2004
Notes (Rupees) (Rupees)
==============================================================================================
Income tax - Current 25.1 13,962,370 9,456,609
Deferred tax 25.2 6,932,840 -
20,895,210 9,456,609
==============================================================================================25.1. RECONCILIATION OF TAX CHARGE FOR THE YEAR==============================================================================================
2005 2004
==============================================================================================
%age %age
Applicable tax rate 35 35
Tax effect of minimum turnover tax and others 29 32
Average effective rate charged to profit and loss account 6 3
==============================================================================================25.2. The liability for deferred taxation comprises timing differences relating to accelerated tax depreciation.26. FINANCIAL INSTRUMENTS =========================================================================================================================
Interest bearing Non-interest bearing
=========================================================================================================================
Effective Maturity Maturity Maturity Maturity Total
mark-up within one to within one to
rates % one year five years one year five years
(Rupees) (Rupees) (Rupees)
=========================================================================================================================
FINANCIAL ASSETS:
Trade debts - - 75,240,207 - 75,240,207
Advances, deposits and other
Receivables 7.5-12.71 322,238,085 - 352,971,715 - 675,209,800
Cash and bank balances - - 153,029,954 - 153,029,954
322,238,085 - 581,241,876 - 903,479,961
FINANCIAL LIABILITIES:
Subordinated loan 8-13.14 - 100,000,000 - - 100,000,000
Long term loans 5.5-11.82 190,000,000 1,187,500,000 - - 1,377,500,000
Liabilities against assets
subject to finance lease 6.67-13 73,493,079 211,562,572 - - 285,055,651
Short term borrowings 5.29-13.71 655,503,774 - - - 655,503,774
Interest and mark-up accrued - - 52,371,521 52,371,521
Creditors, accrued and other
liabilities - - 218,672,050 - 218,672,050
Commitments - - 293,924,177 - 293,924,177
918,996,853 1,499,062,572 564,967,748 - 2,983,027,173
Net financial (Liabilities)/Assets - 2005 (596,758,768) (1,499,062,572) 16,274,128 - (2,079,547,212)
Net financial (Liabilities)/Assets - 2004 (637,461,372) (1,052,273,192) 189,579,427 - (1,500,155,137)
=========================================================================================================================26.1. CONCENTRATION OF CREDIT RISKCredit risk represents the loss that would result if counter parties failed to perform as contracted. The company believes that it is not exposed to major concentration of credit risk. To manage exposure to credit risk, the Company applies approved credit limits to its customers. 26.2. INTEREST RATE RISK The company usually borrows funds at fixed and market based rates, as such the risk is minimised. 26.3. 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 and maintains flexibility in funding by keeping committed credit lines available. 26.4. FAIR VALUE OF THE FINANCIAL INSTRUMENT The carrying values of all the financial instruments reflected in the financial statements are approximately their fair values. This assessment is based upon settlement / realisable values. 27. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES The aggregate amounts charged in the accounts for the year for remuneration, including all benefits to the Chief Executive, Directors and Executives of the company were as follows: ===============================================================================================
Chief Executive Directors Executives
2005 2004 2005 2004 2005 2004
(Rupees) (Rupees) (Rupees)
===============================================================================================
Managerial remuneration 3,400,000 2,820,000 - - 7,859,272 5,584,894
House allowance 960,000 888,000 - - 3,143,709 1,787,446
Utilities 240,000 222,000 - - 785,927 446,862
Others - - - - - 21,600
Company's
contribution towards
provident fund - - - - 785,927 446,862
4,600,000 3,930,000 - - 12,574,835 8,287,664
Number of persons
(including those who
worked part of the year) 1 2 7 7 12 6
===============================================================================================In addition to the above, some of the Executives are provided with free use of Company maintained cars.28. TRANSACTIONS WITH RELATED PARTIES The Company, in the normal course of business carries out transactions with related parties. Transactions with related parties other than remuneration and benefits to key management personnel under the terms of their employment disclosed above are as follows: ========================================================================================================
Name of parties Relationship Nature of Transactions 2005 2004
(Rupees) (Rupees)
========================================================================================================
Riaz Bottlers (Pvt) Limited Associated Sale of sugar - 23,692,800
Company
JK Agri Solution (Pvt) Limited Associated Reimbursement of cane
Company development expenditure 6,888,849 6,579,096
JDW Aviation (Pvt) Limited Associated Travelling services provided 21,471,221 15,651,760
Company JDW Sugar Mills Limited
Superior Textile Mills Limited Associated Provision of services to
Company Superior Textile Mills Limited - 26,891
Jahangir Khan Tareen Director Subordinated loan - 100,000,000
Jahangir Khan Tareen Director Mark up on subordinated loan 9,550,171 1,841,164
Provident Fund Employees' Contributions 4,162,721 2,738,061
Benefit Plan
========================================================================================================29. CAPACITY AND PRODUCTIONThe overall cane crushing capacity of the plant on three shifts basis for 150 days operations comes to 2,100,000 tonnes. During the season, plant was operated for 143 days (2004: 167 days) and 1,296,893 tonnes (2004: 1,183,943 tonnes) of sugarcane was crushed producing 135,490 tonnes (2004: 124,856) of sugar. Due to normal technical stoppages and non-availability of adequate sugarcane during the season 100% crushing capacity could not be achieved. 30. BASIC AND DILUTED EARNING PER SHARE ==============================================================================================
2005 2004
==============================================================================================
Net profit after taxation Rupees 344,395,336 261,806,459
Weighted average number of ordinary shares 22,634,920 22,634,920
Basic and diluted earnings per share Rupees 15.22 11.57
==============================================================================================31. NUMBER OF EMPLOYEES==============================================================================================
2005 2004
==============================================================================================
942 744
==============================================================================================32. DIVIDENDSThe Board of Directors in their meeting held on December 9, 2005 have proposed cash dividend @ Rs.3 per share (30%) and bonus shares at the rate of 15%. 33. DATE OF AUTHORISATION FOR ISSUE These financial statements were authorised for issue on December 9, 2005 by the Board of Directors of the company. 34. FIGURES Figures have been rounded off to the nearest rupee. Corresponding figures have been re-arranged, where necessary, for the purpose of comparison. During the year the following rearrangement has been made for more appropriate presentation in pursuance of the revision in Fourth Schedule to the Companies Ordinance, 1984. ======================================================================================
From To (Rupees)
======================================================================================
Trade and other payables Interest and mark up accrued 52,371,521
======================================================================================Apart from the above no significant re-arrangements have been made. |