| Lucky Cement Ltd - 2004 |
=================================================================================== BALANCE SHEET AS AT JUNE 30, 2004 =================================================================================== Note 2004 2003 Rupees in '000 =================================================================================== SHARE CAPITAL AND RESERVES Authorised capital 300,000,000 (2003: 300,000,000) Ordinary shares of Rs. 10/- each 3,000,000 3,000,000 Issued, subscribed and paid-up capital 245,000,000 (2003: 245,000,000) Ordinary shares of Rs. 10/- each fully paid in cash 2,450,000 2,450,000 Capital reserve Share premium 990,000 990,000 Issue of bonus shares 183,750 - Unappropriated profit 683,346 181,334 4,307,096 3,621,334 LONG TERM LOANS 3 1,150,000 100,000 DEFERRED LIABILITIES 4 604,028 327,233 LONG TERM DEPOSITS 5 20,318 16,551 CURRENT LIABILITIES Short term finances 6 568,451 277,935 Creditors, accrued and other liabilities 7 354,466 252,945 Dividend 8 7,965 190,084 Provision for taxation 27,596 31,897 958,478 752,861 CONTINGENCIES AND COMMITMENTS 9 - - 7,039,920 4,817,979 FIXED ASSETS-TANGIBLE Operating assets 10 4,007,262 4,181,736 Capital work-in-progress 11 1,005,725 40,530 5,012,987 4,222,266 LONG TERM DEPOSITS 2,275 2,475 CURRENT ASSETS Stores and spares 12 632,640 326,133 Stock-in-trade 13 172,281 115,101 Trade debtors 14 16,356 5,121 Advances, deposits, prepayments and other receivables 15 203,314 106,490 Cash and bank balances 16 1,000,067 40,393 2,024,658 593,238 7,039,920 4,817,979 =================================================================================== =================================================================================== PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2004 =================================================================================== Note 2004 2003 Rupees in '000 =================================================================================== Sales - net 17 2,907,807 2,190,352 Cost of sales 18 1,807,353 1,742,707 Gross Profit 1,100,454 447,645 Operating expenses Administration 19 Selling and distribution 20 19,599 18,288 66,350 57,643 Operating profit 1,034,104 390,002 Other income 21 (1,018) 238 1,033,086 390,240 Financial charges 22 10,842 29,094 Workers' profit participation fund 51,143 18,110 61,985 47,204 Profit before tax 971,101 343,036 Provision for tax-current 23 16,565 11,031 prior years' 679 87,781 - deferred 268,095 12,246 285,339 115,058 Net profit after tax 685,762 227,978 Unappropriated profit brought forward 181,334 137,106 Profit available for appropriation 867,096 365,084 Appropriation as under: Proposed issue of Bonus Shares @ 7.5% (2003: nil) 183,750 - Proposed cash dividend Rs. nil per share (2003: Re. 0.75 per share) - 183,750 Unappropriated profit carried forward 683,346 181,334 Earnings per share - before tax (Rupees) 24.1 3.96 1.40 - after tax (Rupees) 24.1 2.80 0.93 =================================================================================== ================================================================================================
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2004
================================================================================================
Rupees in '000'
------------------------------------------------------------------------------------------------
Issued, Capital Reserves
subscribed Share Issue of Unappro-
and paid premium bonus priated
up capital shares profit Total
================================================================================================
Balance at June 30, 2002 2,450,000 990,000 - 137,106 3,577,106
Profit for the year - - - 227,978 227,978
Cash dividend (Re.0.75 per share) - - - (183,750) (183,750)
Balance at June 30, 2003 2,450,000 990,000 - 181,334 3,621,334
Profit for the year - - - 685,762 685,762
Proposed issue of bonus shares @ 7.5% - - 183,750 (183,750) -
Balance at June 30, 2004 2,450,000 990,000 183,750 683,346 4,307,096
================================================================================================
===================================================================================
CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2004
===================================================================================
2004 2003
Rupees in '000
===================================================================================
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation 971,101 343,036
Adjustments for:
Depreciation 215,302 213,718
Gain on disposal of fixed assets (1,452) (123)
Provision for gratuity 10,483 (2,055)
Financial charges 10,842 29,094
Operating profit before working capital changes 1,206,276 583,670
Changes in working capital:
(Increase) / decrease in current assets
Stores and Spares (306,507) 3,097
Stock-in-trade (57,180) 16,232
Trade debtors (11,235) 11,314
Advances, deposits, prepayments
and other receivables (99,807) 9,792
Increase/(decrease) in current liabilities
Creditors, accrued and other liabilities 97,597 (69,694)
Cash generated from operations 829,144 554,411
Gratuity paid (1,782) (999)
Financial charges paid (6,918) (35,892)
Income tax paid (18,562) (74,988)
Net cash from operating activities 801,882 442,532
CASH FLOW FROM /(USED IN) INVESTING ACTIVITIES
Fixed capital expenditure (1,007,940) (254,480)
Sale proceed from disposal of fixed assets 3,368 191
Long term deposits 3,967 (357)
Net cash used in investing activities (1,000,605) (254,646)
CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES
Long term loans 1,050,000 (241,147)
Dividend paid (182,119) (190,689)
Net cash from / (used in) financing activities 867,881 (431,836)
Net (decrease) / increase in cash and cash
equivalents 669,158 (243,950)
Cash and cash equivalents at the
beginning of the year (237,542) 6,408
Cash and cash equivalents at the
end of the year 431,616 (237,542)
Cash and cash equivalents
Cash and bank balances 1,000,067 40,393
Short term finances (568,451) (277,935)
431,616 (237,542)
===================================================================================NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 20041. THE COMPANY AND ITS OPERATIONS Lucky Cement Limited was incorporated in Pakistan on September 18, 1993 under the Companies Ordinance, 1984. The shares of the Company are quoted on all the three stock exchanges in Pakistan. The principal activity of the Company is manufacturing and marketing of Cement. The project is located at Pezu, District Lakki Marwat in North West Frontier Province. 2. SIGNIFICANT ACCOUNTING POLICIES 2.1. ACCOUNTING CONVENTION These financial statements have been prepared under the 'historical cost convention' except obligations under certain employee benefits, which are measured at present value. 2.2. BASIS OF PREPARATION These financial statements have been prepared in accordance with Approved Accounting Standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984. Approved Accounting Standards comprise of such International Accounting Standards as notified under the provisions of Companies Ordinance, 1984. Wherever, the requirements of Companies Ordinance, 1984 or directives issued by the Securities and Exchange Commission of Pakistan differ with the requirements of these Standards, the requirements of the Companies Ordinance, 1984 or the requirements of the said directives take precedence. 2.3. STAFF RETIREMENT BENEFITS The Company operates an unfunded gratuity scheme for all permanent employees of the Company who attained the minimum qualifying period of services. 2.4. FIXED ASSETS AND DEPRECIATION These are stated at cost less accumulated depreciation and impairment losses if any, except free hold land, which is stated at cost. Depreciation is charged to income applying the straight-line method on building and quarry equipment and on written down value on all other assets at the rates mentioned in the relevant note. On plant and machinery depreciation is charged on units of production method based on higher of estimated life or production. Full year's depreciation is charged on additions while no depreciation is charged on assets deleted during the year. However, capitalization of major projects cost is depreciated proportionately for the period of use. Maintenance and normal repairs are charged to income as and when incurred. Major renewals and improvements are capitalized. Gains and losses on disposal of assets, if any, are included in income currently. 2.5. TAXATION CU FRONT CURRENT Provision for current taxation is based on taxable income at current rates of tax after taking into account tax rebates and credits available, if any, or one half of one percent of turnover, whichever is higher. DEFERRED Deferred tax is provided using balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax is calculated at the rates that are expected to apply to the period in which the differences are likely to be reversed based on the tax rates that have been enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available and the credits can be utilised. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefits will be realised. Deferred tax is charged or credited in the income statement, except in the case of items credited or charged to equity, if any, in which case it is included in equity. 2.6. CAPITAL WORK IN PROGRESS All costs/expenditures directly related to specific assets incurred during project implementation period are carried under this head. These are transferred to specific assets as and when assets are available for use. 2.7. BORROWING COST Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use. All other borrowing costs are dealt with profit and loss account in the period in which they are incurred. 2.8. IMPAIRMENT At each balance sheet date, the carrying amount of assets is reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of the cash generating unit to which the asset belongs is estimated. Recoverable amount is the greater of net selling price and value in use. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment losses are recognized as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized as income immediately. 2.9. STORES AND SPARES These are valued at moving average cost. Items in transit are stated at cost accumulated up to the balance sheet date. 2.10. STOCK IN TRADE These are valued at lower of cost or net realizable value. Cost signifies in relation to raw and packing material at average cost. In case of work in process and finished goods valuation is carried out at average cost comprising prime cost and appropriate manufacturing overheads. Net realisable value signifies the estimated selling price in the ordinary course of business less net estimated costs of completion and selling expenses. 2.11. TRADE DEBTORS Known bad debts, if any, are written-off and provision is made against debts considered doubtful. 2.12. TRADE AND OTHER PAYABLE Liabilities for trade and other amount payable are carried at cost which represent the fair value of the consideration to be paid in the future for goods and services received whether or not billed to the Company. 2.13. PROVISIONS A provision is recognized in the balance sheet when the Company has a legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made to the amount of obligation. 2.14. FOREIGN CURRENCY TRANSLATIONS Monetary assets and liabilities in foreign currencies are translated into Pak Rupees at the rate of exchange prevailing at the balance sheet date, except where forward exchange contracts have been entered into for payment of liabilities in which case the rate contracted for are used. Foreign currency transactions are translated into Pak Rupees at the rate of exchange ruling at the date of transaction, except where forward exchange contracts have been entered into in which case the rate contracted for are used. Exchange gains and losses on translation are included in income currently. 2.15. RELATED PARTY TRANSACTION All transactions with related parties are entered into at arm's length basis determined in accordance with "Comparable Uncontrolled Price Method". 2.16. REVENUE RECOGNITION Sales are recorded on dispatch of goods to customers. 2.17. FINANCIAL INSTRUMENTS All financial assets and financial liabilities are recognised upon becoming the party to the contractual provisions of the instrument. Financial assets are derecognised when the control of the contractual rights that comprise the financial asset is lost. Financial liabilities are derecognised when they are extinguished i.e. when the obligation specified in the contract is discharged, cancelled or expired. Any gain or loss on derecognition of the financial assets and financial liabilities is taken to income directly. 2.18. FINANCIAL ASSETS Financial assets comprise of cash and bank balances, advances, deposits, other receivables and trade debtors. Valuation of financial assets have been disclosed in relevant notes. 2.19. FINANCIAL LIABILITIES Financial liabilities are classified according to the substance of contractual arrangements entered into. Significant financial liabilities are accrued and other liabilities, long term loans and long term deposits. Valuation of financial liabilities have been disclosed in relevant notes. 2.20. OFF SETTING A financial asset and financial liability is off-set and the net amount is reported in the balance sheet when there is a legal enforceable right to set-off the transactions is available and also there is an intention to settle on a net basis or to realize the asset and settle the liability simultaneously. Corresponding income on the asset and charge on the liability is also off-set. 3. LONG TERM LOANS - SECURED ===================================================================================
2004 2003
Note Rupees in '000
===================================================================================
Banking Companies
Demand Finance 3.1 1,000,000 100,000
Demand Finance 3.2 150,000 -
1,150,000 100,000
===================================================================================3.1. The finance is repayable monthly from June 2006 in six installments, subject to mark up @ 6 month KIBOR + 2% per annum with a floor of 3.75% per annum and a cap of 3.95% per annum. The finance is secured against first charge over plant and machinery.3.2. The finance is repayable in four years in quarterly installments subject to markup 2.65% per annum payable quarterly. 4. DEFERRED LIABILITIES ===================================================================================
2004 2003
Note Rupees in '000
===================================================================================
Deferred Taxation 497,607 229,512
Staff gratuity 4.1 38,765 30,065
Retention money
Plant and machinery - foreign supplier 4.2 11,477 11,477
Encashment of performance
guarantee (US$1,313,250) 4.2 56,179 56,179
604,028 327,233
===================================================================================4.1. Actuarial valuation has been carried out as at June 30, 2004 using the Projected Unit Credit Method assuming a discount rate of 8% p.a. and expected rate of increase in salaries at 7% p.a. As per the actuary's valuation report the net liability of the company in respect of employee benefits is Rs. 38.765 million.Movement in the net liability recognised in the balance sheet are as follows: ===================================================================================
2004 2003
Rupees in '000
===================================================================================
Opening balance 30,065 33,119
Charge / (reversal) for the year 10,482 (2,055)
Payment made during the year (1,782) (999)
Closing balance 38,765 30,065
The amounts recognised in the balance sheet are as follows:
Present value of defined benefit obligation 38,095 31,680
Actuarial gain to be recognised 670 (1,615)
38,765 30,065
===================================================================================4.2. These represent net retention money and proceed of encashment of performance guarantee. The encashment amount of performance guarantee is valued at the conversion rate on the date of encashment.These amounts are likely to be settled from the claims made by the Company against the supplier which is pending in the court since 1998. (refer note 9.3). 5. LONG TERM DEPOSITS - UNSECURED ===================================================================================
2004 2003
Note Rupees in '000
===================================================================================
Cement stockists 5.1 8,533 5,571
Transporters 5.2 11,650 10,850
Others 135 130
20,318 16,551
===================================================================================5.1. These represent interest free security deposits received from stockists and are repayable on cancellation or withdrawal of stockist arrangement and are also adjustable against unpaid amount of sales.5.2. These represent interest free security deposits received from transporters and are repayable on cancellation or withdrawal of contracts. 6. SHORT TERM FINANCES - SECURED ===================================================================================
2004 2003
Note Rupees in '000
===================================================================================
Running finance 6.1 169,765 77,390
Import finance 6.2 398,686 200,545
568,451 277,935
===================================================================================6.1. The limit of facilities for running finances from various banks amounting to Rs.1,050 million (2003: 155 million). These are subject to mark-up ranging from 1.75 to 4 percent per annum (2003: 2.75 to 4.75 percent per annum). The facilities are secured by way of hypothecation on stock, stores, spares and trade debtors.6.2. The Company has entered into Finance agreements for availing foreign currency financing for import of raw material and stores. These facilities are sub-limit of running finance facilities (refer note 6.1) maturing from 90 to 180 days and carry markup @ LIBOR plus 0.5% per annum. 7. CREDITORS, ACCRUED AND OTHER LIABILITIES ===================================================================================
2004 2003
Note Rupees in '000
===================================================================================
Creditors 181,606 147,400
Accrued expenses 26,997 22,319
Markup on long term loans 6,350 1,895
Markup on short term finance 2,721 3,252
Accounts with customers 65,581 38,751
Retention money 157 1,371
Workers' profit participation fund 7.1 51,755 18,110
Sales tax 11,748 19,719
Others 1,551 128
354,466 252,945
===================================================================================7.1. WORKERS' PROFIT PARTICIPATION FUND===================================================================================
2004 2003
Rupees in '000
===================================================================================
Opening balance 18,110 18,268
Interest provided 612 1,046
18,722 19,314
Transferred to the fund (18,110) (19,314)
612 -
Allocation tar the year 51,143 18,110
51,755 18,110
===================================================================================8. DIVIDEND===================================================================================
2004 2003
Rupees in '000
===================================================================================
Proposed - 183,750
Unclaimed 7,965 6,334
7,965 190,084
===================================================================================9. CONTINGENCIES AND COMMITMENTSCONTINGENCIES 9.1. Under SRO 484(1)/92 dated May 14, 1992 the plant and machinery not being manufactured locally was exempt from customs duty, if imported before June 30, 1995. The Company obtained certificates from the Ministry of Industries and Central Board of Revenue (CBR) that the machinery being imported was not manufactured locally. In April 1995 the Central Board of Revenue advised the Customs authorities that the local industry was capable of manufacturing some of the equipment being imported by the Company and that exemption from customs duty on such equipment be denied. The Company filed a writ petition against CBRs instructions before the Peshawar High Court. The Honorable High Court has decided the case in favour of the Company. The Collector of Customs, Karachi has filed an appeal in the Supreme Court of Pakistan against the Order of Peshawar High Court. The case is pending before the Supreme Court. 9.2. The Company was entitled to sales tax exemption on cement produced by it from the date of commissioning to June 30, 2001 vide SROs 580 (1)/91 and 561 (I) /94 dated 27-06-1991 and 9-06-1994 respectively. In June 1997 the Federal Government withdrew the sales tax from the entire cement industry and deprived the Company from the advantage of its sales tax exemption. Being aggrieved by the denial of the benefit of sales tax exemption, the Company had filed a writ petition in the Peshawar High Court. Subsequently, the sales tax exemption was restored on September 5, 2000. The writ petition was therefore withdrawn on legal advice but at the same time a suit for compensation was filed in the appropriate court. 9.3. The Company filed suits in 1998 against the supplier of main plant and machinery in the Sindh High Court, Karachi on account of uneconomical operation, short supply of equipment and parts and supply of sub-standard/ defective parts etc. The suits are pending with the High Court. The total amount of these claims is not determinable in monetary terms at this stage. 9.4. On September 5, 2000, the Government of Pakistan imposed sales tax on cement which resulted in the restoration of statutory sales tax exemption available to the Company up to June 30, 2001. On September 20, 2000 the Sales Tax Wing, Central Board of Revenue (CBR) issued a letter stating that all dealers/distributors/whole sellers and suppliers of cement are required to be registered irrespective of their purchases from a cement manufacturer whose supplies are taxable or exempt. It also advised not to supply cement to any unregistered dealer/distributor/whole seller and supplier of cement. Being aggrieved from this letter, the Company filed a writ petition in the Peshawar High Court. The High Court has decided the case and declared that the Company's dealers/distributors/whole sellers are not liable to be registered up to the statutory exemption period of the Company. The CBR has filed an appeal before the Supreme Court of Pakistan and the case is pending before it. 9.5. The Income Tax department levied tax of Rs. 85 million on certain pre- operational earnings for assessment years 1994-95, 1995-96 and 1996-97. The CIT (Appeal) has reversed the order in favour of the Company. The Tax Department filed appeal before Income Tax Appellate Tribunal who deleted the order of CIT (Appeal). The Company has now filed appeal in Peshawar High Court against the order of Income Tax Appellate Tribunal. The Company expects favourable decision from the High Court, however as a matter of prudence the same has been provided in the accounts. 9.6. The Additional Collector, Customs & Central Excise Peshawar has raised a demand of Rs. 5,530,335/- as differential excise duty on a new brand introduced by the Company. The Company has filed an appeal before the Customs, Excise & Sales Tax Appellate Tribunal against the demand raised by the Additional Collector. The Tribunal accepted the appeal of the Company and set aside the order of Additional Collector. An appeal has been filed against the order of the Tribunal by Collector of Customs and the matter is pending before the Peshawar High Court. No liability has been accounted for in lieu of the relief granted by the Tribunal. 9.7. Dispute with a civil contractor is under arbitration. The amount is not ascertainable at this stage. COMMITMENTS 9.8. CAPITAL COMMITMENTS ===================================================================================
2004 2003
Rupees in '000
===================================================================================
Plant and machinery under letters of credit 6,418,944 120,997
Civil works & others 1,545,860 -
===================================================================================9.9. OTHER COMMITMENTS===================================================================================
2004 2003
Rupees in '000
===================================================================================
Stores, spares and packing material
under letters of credit 523,225 203,076
===================================================================================10. OPERATING ASSETS=================================================================================================================================
COST DEPRECIATION Written down
charge/ /Book value Rate %
Particulars July 01, Additions/ June 30, at July 01, disposals at June 30, at June 30, p.a
2003 (disposals) 2004 2003 for the year 2004 2004
=================================================================================================================================
Land - Free hold 5,367 - 5,367 - - - 5,367
Building on free hold Land 982,177 13,503 995,680 280,951 49,784 330,735 664,945 5
Plant and machinery 3,520,115 19,319 3,539,434 638,617 117,981 756,598 2,782,826 UPM
Generators 633,625 115 633,740 204,585 31,704 236,289 397,451 UPM
Quarry equipments 188,309 - 188,309 60,804 9,415 70,219 118,090 5
Vehicles 35,235 6,142 36,953 20,463 3,836 21,610 15,343 20
(4,424) (2,689)
Furniture and fixtures 6,611 1,359 7,957 3,627 434 4,055 3,902 10
(13) (6)
Office equipments 27,348 2,159 29,117 13,843 1,549 15,177 13,940 10
(390) (215)
Other assets 12,612 148 12,760 6,773 599 7,372 5,388 10
June 2004 (Rupees in '000') 5,411,399 42,745 5,449,317 1,229,663 215,302 1,442,055 4,007,262
(4,827) (2,910)
June 2003 (Rupees in '000') 4,937,663 474,067 5,411,399 1,016,208 213,718 1,229,663 4,181,736
(331) (263)
=================================================================================================================================UPM = Unit of production method10.1. Depreciation charged for the year has been allocated as follows: ===================================================================================
2004 2003
Rupees in '000
===================================================================================
Cost of sales 211,448 210,260
Administration expenses 3,079 2,743
Selling and distribution expenses 775 715
Total 215,302 213,718
===================================================================================10.2. DETAIL OF ASSETS DISPOSED OFF DURING THE YEAR======================================================================================================================================
Rupees in '000'
Particulars Cost Accumulated Written Down Sale Mode of Particulars of Buyers
Depreciation Value Proceeds Disposal
---------------------------------------------------------------------------------------------------------------------------------------
Vehicle 702 630 72 400 Negotiation Capt. M..Jawad Khan,
Village Lachi, District Kohat.
Vehicle 1,102 538 564 950 Ins. Claim Adamjee Insurance Co. Ltd.
I.I. Chundngar Road,
Karachi.
Vehicle 1,172 234 938 1,145 Negotiation United Collieries Ltd.,
Karachi.
Vehicle 801 719 82 485 Negotiation Abdul Samad Bawani,
Karachi.
Vehicle 334 300 34 230 Negotiation Kashif Ashfaq, 149-B,
New Chuburji Park,
Lahore.
Vehicle 312 266 46 120 Negotiation Salman A. Seljuki,
Jamrud Road, Peshawar.
Office Equipment 236 142 93 7 Negotiation Malik Saleem,
Adeel Plaza, Blue Area,
Islamabad.
Office Equipment 14 8 6 2 Negotiation M/s. Supreme Engg.
Services, Blue Area,
Islamabad.
Office Equipment 34 21 13 1 Negotiation M/s. HP Laser and
Computer Point, Blue Area,
Islamabad.
Office Equipment 5 3 2 1 Negotiation Mr. Fida M. Khattak & Mr.
M. Pervaiz, Islamabad.
Office Equipment 100 41 59 25 Negotiation M/s. Shirazi Trading Co.
(Pvt) Ltd. Muslim Insurance
Bldg. 3-Bank Square,
Shahrah-e-Quaid-e-Azam,
Lahore.
Furniture & Fixture 13 6 7 2 Negotiation Various parties
Total 4,827 2,910 1,916 3,368
June 2003 331 263 68 191
======================================================================================================================================11. CAPITAL WORK-IN-PROGRESS===================================================================================
2004 2003
Rupees in '000
===================================================================================
Civil works 269,080 7,668
Plant and machinery 341,470 3,611
Advance against machinery 395,175 29,251
1,005,725 40,530
===================================================================================12. STORES AND SPARES===================================================================================
2004 2003
Rupees in '000
===================================================================================
Stores 426,724 134,002
Spares 194,190 187,826
Spares-in-transit 11,726 4,305
632,640 326,133
===================================================================================13. STOCK-IN-TRADE===================================================================================
2004 2003
Rupees in '000
===================================================================================
Raw and packing material 49,500 39,879
Work-in-process 90,916 57,524
Finished goods 31,865 17,698
172,281 115,101
===================================================================================14. TRADE DEBTORS===================================================================================
2004 2003
Rupees in '000
===================================================================================
Unsecured - considered good 16,356 5,121
===================================================================================15. ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES===================================================================================
2004 2003
Note Rupees in '000
===================================================================================
Loans and advances - Considered good
Employees 15.1 3,331 1,635
Advance income tax 64,935 67,918
Excise duty 7,999 2,900
Advance to suppliers and others 39,817 14,153
116,082 86,606
Deposits and prepayments
Deposits 6,910 5,367
Prepayments 1,006 616
7,916 5,983
Other receivables - considered good
Octroi refundable 714 714
Sales tax 6,883 19,504
Others 71,719 3,683
79,316 13,901
203,314 106,490
===================================================================================15.1. This includes amounts to executives of Rs. 1,244,266 (2003: Rs. 1,560,009). The maximum aggregate amount to executives at the end of any month during the year was Rs. 2,315,320.16. CASH AND BANK BALANCES ===================================================================================
2004 2003
Rupees in '000
===================================================================================
Bank balances
Current accounts 19,901 6,769
Sales collection in transit 65,158 31,107
PLS accounts 314,683 2,432
Bank deposits 600,000 -
999,742 40,308
Cash in hand 325 85
1,000,067 40,393
===================================================================================17. SALES - NET===================================================================================
2004 2003
Rupees in '000
===================================================================================
Sales - local 4,028,392 3,730,460
- export 241,578 78,282
4,269,970 3,808,742
Less: Excise duty 752,375 1,039,814
Sales tax 570,620 562,986
Loading and other charges 39,168 15,590
1,362,163 1,618,390
2,907,807 2,190,352
===================================================================================18. COST OF SALES===================================================================================
2004 2003
Note Rupees in '000
===================================================================================
Raw material consumed 65,927 54,349
Packing material 216,453 223,615
Salaries, wages and benefits 18.1 116,089 98,430
Fuel and power 1,025,778 950,836
Stores and spares 125,552 93,482
Repairs and maintenance 22,690 12,741
Depreciation 211,448 210,260
Insurance 35,807 35,949
Other manufacturing expenses 35,168 25,790
1,854,912 1,705,452
Work-in-process
Opening 57,524 61,090
Closing (90,916) (57,524)
(33,392) 3,566
Cost of goods manufactured 1,821,520 1,709,018
Finished goods
Opening 17,698 51,387
Closing (31,865) (17,698)
(14,167) 33,689
1,807,353 1,742,707
===================================================================================18.1. Salaries, wages and benefits include Rs. 7,182,862 in respect of staff retirement benefits.19. ADMINISTRATION EXPENSES ===================================================================================
2004 2003
Note Rupees in '000
===================================================================================
Staff salaries and benefits 19.1 25,179 19,458
Communication 4,192 3,286
Travelling and conveyance 1,891 1,394
Insurance 641 517
Rent, rates and taxes 587 464
Vehicles running and maintenance 1,230 1,256
Advertisement 839 614
Printing and stationery 1,519 1,603
Fees and subscription 1,154 862
Security services 132 133
Legal and professional 2,936 3,669
Transportation and freight 189 208
Utilities 1,161 1,001
Repairs and maintenance 438 638
Auditors' remuneration 19.2 370 830
Depreciation 3,079 2,743
Others 1,214 679
46,751 39,355
===================================================================================19.1. Staff salaries and benefits include Rs. 2,140,071 in respect of staff retirement benefits.19.2. AUDITORS' REMUNERATION ===================================================================================
2004 2003
Rupees in '000
===================================================================================
Statutory auditors
Audit fee 200 200
Half yearly review fee 80 120
Corporate & other advisory services 20 450
Out of pocket 35 30
Other auditors
Cost audit fee 35 30
370 830
===================================================================================20. SELLING AND DISTRIBUTION EXPENSES===================================================================================
2004 2003
Note Rupees in '000
===================================================================================
Staff salaries and benefits 20.1 10,682 9,250
Communication 2,029 2,237
Travelling and conveyance 886 887
Printing and stationery 328 259
Insurance 448 268
Rent, rates and taxes 1,488 1,418
Utilities 638 588
Vehicles running and maintenance 1,044 1,119
Repairs and maintenance 141 148
Fees, subscription and periodicals 42 40
Advertisement 255 408
Entertainment 363 328
Depreciation 775 715
Sales promotion 247 362
Others 233 261
19,599 18,288
===================================================================================20.1. Staff salaries benefits include Rs. 1,168,856 in respect of staff retirement benefits.21. OTHER INCOME ===================================================================================
2004 2003
Rupees in '000
===================================================================================
Gain on disposal of assets 1,452 123
Exchange loss (2,554) -
Others 84 115
(1,018) 238
===================================================================================22. FINANCIAL CHARGES MARK-UP ON===================================================================================
2004 2003
Rupees in '000
===================================================================================
- Long term loans - 16,077
- Short term finances 5,670 8,170
Interest on workers' profit participation fund 612 1,046
Bank charges and commission 4,560 3,801
10,842 29,094
===================================================================================23. PROVISION FOR TAXATIONThe provision for current taxation represents the minimum tax payable under section 113 of the Income Tax Ordinance, 2001. 23.1. The tax assessments of the Company have been finalized upto and including tax year 2003 and assessed tax losses amounting to Rs.1.496 billion are available to be carried forward. 23.2. Since the Company is liable for turnover tax, therefore, no tax reconciliation is given. 24. EARNINGS PER SHARE 24.1. BASIC ===================================================================================
2004 2003
Rupees in '000
===================================================================================
No. of ordinary shares (in thousands) 245,000 245,000
Profit before tax (Rupees in thousands) 971,101 343,036
Earnings per share - before tax (Rupees) 3.96 1.40
Profit after tax (Rupees in thousands) 685,762 227,978
Earnings per share - after tax ( Rupees) 2.80 0.93
===================================================================================24.2. DILUTIVEThere is no dilutive effect on the basic earnings per share of the Company. 25. REMUNERATION TO CHIEF EXECUTIVE, DIRECTOR AND EXECUTIVES =============================================================================================
2004 2003
Chief Chief
Executive Director Executives Executive Director Executives
Rupees in '000
---------------------------------------------------------------------------------------------
Remuneration 3,180 2,092 28,295 2,400 1,600 28,237
House rent allowance 1,272 837 11,616 960 640 11,643
Utility allowance 318 209 2,848 240 160 3,533
Conveyance allowance - - 3,387 - - 2,762
4,770 3,138 46,146 3,600 2,400 46,175
Number of persons 1 1 149 1 1 148
=============================================================================================25.1. The Chief Executive and some Executives are provided company maintained car.25.2. An aggregate amount of Rs.43,500/- was paid to 8 directors during the year on account of board meeting fee (2003: 8 directors - Rs.1 7,000/-). 26. RELATED PARTY TRANSACTIONS The Company has related party relationship with its associated undertakings, its directors and executive officers (including their associates). Remuneration to Chief Executive Officer, Director and Executives is disclosed in note 25. Details of transactions with related parties as at year end are as follows: SALE OF CEMENT 27. PRODUCTION CAPACITY - CLINKER ===================================================================================
2004 2003
Rupees in '000
===================================================================================
Matric Tons
Designed capacity 4000 tpd (300 days) 1,200,000 1,200,000
Upgraded capacity 4800 tpd (300 days) 1,440,000 1,440,000
Actual Production 1,126,045 1,054,200
===================================================================================28. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURESCONCENTRATION OF CREDIT RISK Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties failed completely to perform as contracted. The Company manages credit risk by limiting significant exposure to any individual customers, by obtaining advance against sales and does not have significant exposure to any individual customer. INTEREST RATE RISK Interest rate risk arises from the possibility that changes in interest rates will effect the value of financial instruments. The Company is not materially exposed to interest rate risk. The rate of financing and their maturity period has been disclosed in the relevant notes. LIQUIDITY RISK Liquidity risk reflects an enterprises inability in raising fund to meet commitments. The Company's management closely monitors the Company's liquidity and cash flow position. FOREIGN CURRENCY RISK MANAGEMENT Foreign currency risk arises mainly due to conversion of foreign currency assets and liabilities into local currency. The Company is not materially exposed to foreign currency risk on foreign currency assets and liabilities. FAIR VALUES OF FINANCIAL INSTRUMENTS Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arms length transaction. As at June 30, 2004 the fair value of all financial instruments is based on the valuation methodology outlined below: LONG TERM DEPOSITS Long term deposits do not carry any rate of return. The fair value has been taken at book value as it is not considered materially different from the prevailing market value. These deposits are not readily exchangeable. NON-CURRENT LIABILITIES For all non-current liabilities, the fair values have been taken at book values as these are not considered materially different based on the current market rate of return and repricing profile of similar non-current liabilities. OTHER FINANCIAL INSTRUMENTS The fair values of all other financial instruments are considered to approximate their book values as they are short term in nature. The analysis of yield markup rate is as under: =====================================================================================================================
Rupees in '000'
Interest bearing
Effective Maturity upto Maturity after Sub Non-interest Total
interest rate one year one year Total bearing Rupees
=====================================================================================================================
FINANCIAL ASSETS
Long term deposits - - - - 2,275 2,275
Trade debtors - - - - 16,356 16,356
Advances, deposits, prepayments
and other receivables - - - - 131,496 131,496
Cash and bank balances 1.75% to 5.5% 914,683 - 914,683 85,384 1,000,067
914,683 - 914,683 235,511 1,150,194
FINANCIAL LIABILITIES
Long term loans 2.65% to 3.95% - 1,150,000 1,150,000 - 1,150,000
Long term deposits - - - - 20,318 20,318
Short term finances 1.75% to 4% 568,451 - 568,451 - 568,451
Creditors, accrued and
other liabilities 7.5% 51,755 - 51,755 290,963 342,718
620,206 1,150,000 1,770,206 311,281 2,081,487
=====================================================================================================================29. DATE OF AUTHORISATION FOR ISSUEThese financial statements were authorized for issue on September 22, 2004 by the Board of Directors of the Company. 30. CORRESPONDING FIGURES Corresponding figures have been restated for the purpose of comparison. 31. GENERAL Figures have been rounded off to the nearest thousand of Rupees. Total number of permanent employees as on June 30, 2004 were 693 (2003 - 591). |