| Noon Pakistan Ltd - 2007 |
|
BALANCE SHEET AS AT 30 JUNE, 2007
==================================================================================
2007 2006
Note Rupees Rupees
==================================================================================
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Authorised capital 5.1 100,000,000 100000,000
Issued, subscribed and paid-up capital 5.2 79,200,000 79,200000
Capital redemption reserve 5.2.2 15,879,507 15879,507
Unappropriated profit 13,678,117 1 3,938,323
108,757,624 109,017,830
SURPLUS ON REVALUATION OF PROPERTY,
PLANT AND EQUIPMENT 6 22,921,856 23,434,309
NON-CURRENT LIABILITIES
Long term finances 7 57,036,924 129,195,396
Long term loan from chief executive 8 54,000,000 54,000,000
Liabilities against assets subject to finance 9 2,883,240 5,788,163
Deferred taxation 10 13,683,821 18,567,789
127,603,985 207,551,348
CURRENT LIABILITIES
Current portion of:
long term finances 7 72,158,473 49,607,181
liabilities against assets subject to finance 9 6,335,920 11,131,938
Short term finances 11 93,820,156 79,976,065
Trade and other payables 12 90,733,740 56,373,629
Accrued mark-up 13 5,703,017 5,488,319
Taxation 14 5,945,200 5,735,745
Dividends 15 19,152,134 861,599
293,848,640 209,174,476
CONTINGENCIES AND COMMITMENTS 16
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 17 360,726,815 366,236,966
Deferred cost 18 264,666 580,253
Long term loans 19 80,350 347,700
Security deposits 565,019 3,213,295
361,636,850 370,378,214
CURRENT ASSETS
Stores, spares and loose tools 20 53,512,460 57,910,114
Stock-in-trade 21 44,283,000 30,202,000
Trade debtors-unsecured considered good 39,499,006 35,789,982
Loans and advances 22 3,390,769 2,853,676
Short term security deposits and prepayments 23 2,848,985 3,384,185
Other receivables 24 126,656 133,275
Sales tax refundable 27,439,437 683,009
Advance income tax, tax deducted at
source and income tax refundable 6,059,495 7,953,945
Cash and bank balances 25 14,335,447 39,889,563
191,495,255 178,799,749
553,132,105 549,177,963
==================================================================================PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE, 2007==================================================================================
2007 2006
Note Rupees Rupees
==================================================================================
SALES - Net 26 1,152,734,715 1,123,210,690
COST OF SALES 27 988,920,832 982,531,036
GROSS PROFIT 163,813,883 140,679,654
ADMINISTRATIVE EXPENSES 28 35,994,330 31,436,233
DISTRIBUTION COST 29 89,255,999 108,842,772
125,250,329 140,279,005
OPERATING PROFIT 38,563,554 400,649
OTHER OPERATING EXPENSES 30 1,512,513 425,762
FINANCE COST 31 36,742,885 24,862,156
38,255,398 25,287,918
308,156 (24,887,269)
OTHER OPERATING INCOME 32 18,177,525 15,221,577
PROFIT/(LOSS) BEFORE TAXATION 18,485,681 (9,665,692)
TAXATION
Current 14 5,825,508 5,486,271
Deferred 10 (4,883,968) (3,286,552)
941,540 2,199,719
PROFIT/(LOSS) AFTER TAXATION 17,544,141 (11,865,411)
LOSS PER SHARE 33.1 (1.07) (16.48)
==================================================================================CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE, 2007==================================================================================
2007 2006
Rupees Rupees
==================================================================================
CASH FLOW FROM OPERATING ACTIVITIES
Profit/(loss) for the year - before taxation 18,485,681 (9,665,692)
Adjustment for:
Depreciation 39,008,142 37,707,402
Gain on sale of operating fixed assets (714,997) (4,281,717)
Finance cost 36,742,885 24,862,156
Deferred cost amortised 315,587 452,587
Unclaimed balances - written back - (557,762)
Receivable balances / trade debts written-off 472,210 30,558
Excess bonus accrual written-back - (5,238,451)
Profit on bank deposits (80,865) (24,923)
CASH INFLOW FROM OPERATING ACTIVITIES 94,228,643 43,284,158
Before working capital changes
(Increase) / decrease in current assets:
Stores, spares and loose tools 4,397,654 (11,502,065)
Stock-in-trade (14,081,000) 14,127,000
Trade debtors (3,709,024) (10,014,970)
Loans and advances (1,012,774) (699,089)
Short term security deposits and Prepayments 2,415,175 6,538,476
Other receivables 37,889 (71,826)
Sales tax refundable (26,756,428) (683,009)
Increase/(decrease) in trade and other payables 34,360,111 (16,701,152)
(4,348,397) (19,006,635)
CASH INFLOW FROM OPERATING ACTIVITIES
- Before taxation 89,880,246 24,277,523
Taxes paid (3,721,603) (3,637,155)
NET CASH INFLOW FROM OPERATING ACTIVITIES
- After taxation 86,158,643 20,640,368
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (31,469,994) (80,100,569)
Sale proceeds of operating fixed assets 2,977,000 28,134,848
Long term loans to employees - net 270,821 (262,193)
Security deposits 768,301 (1,920,571)
Profit on bank deposits received 49,595 22,090
NET CASH OUTFLOW FROM
INVESTING ACTIVITIES (27,404,277) (54,126,395)
CASH FLOW FROM FINANCING ACTIVITIES
Long term finance-net (49,607,180) 34,692,819
Loan from chief executive - 54,000,000
Lease finances - net (11,990,941) (12,200,787)
Short term finances - net 13,844,091 2,476,015
Finance cost paid (36,528,187) (23,481,265)
Dividends paid (26,265) (15,609,715)
NET CASH (OUTFLOW)/INFLOW FROM FINANCING
ACTIVITIES (84,308,482) 39,877,067
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (25,554,116) 6,391,040
CASH AND CASH EQUIVALENTS
- At the beginning of the year 39,889,563 33,498,523
CASH AND CASH EQUIVALENTS
- At the end of the year 14,335,447 39,889,563
==================================================================================STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE, 2007===============================================================================================
Capital
Share redemption Unappropr- Total
Capital reserve iated Profit
(R u p e e s)
===============================================================================================
Balance as at 30 June 2005 79,200,000 15,879,507 32,434,342 127,513,849
Final dividend for the year ended
30 June, 2005 @ Rs. 10 per share - - (7,200,000) (7,200,000)
Loss for the year ended 30 June, 2006 - - (11,865,411) (11,865,411)
Transfer from surplus on revaluation of
property, plant and equipment on
account of incremental depreciation
for the year-net of deferred taxation - - 569,392 569,392
Balance as at June, 2006 79,200,000 15,879,507 13,938,323 109,017,830
Dividend on preference shares - - (18,316,800) (18,316,800)
Profit for the year ended 30 June, 2007 - - 17,544,141 17,544,141
Transfer from surplus on revaluation of
property, plant and equipment on
account of incremental depreciation
for the year-net of deferred taxation - - 512,453 512,453
Balance as at 30 June, 2007 79,200,000 15,879,507 13,678,117 108,757,624
===============================================================================================NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 20071. CORPORATE INFORMATION The Company was incorporated in Pakistan on 26 September, 1966 as a Public Company and its shares are quoted on Karachi and Lahore Stock Exchanges. It is principally engaged in processing and sale of toned milk, milk powder, fruit juices, allied dairy and food products. The registered office of the Company is situated at 1st Floor, Alfalah Building, Shahrah-e-Quaid-e-Azam, Lahore and the plant is located at Bhalwal, District Sargodha. 2. STATEMENT OF COMPLIANCE 2.1. These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984 (the Ordinance). Approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) as notified under the provisions of the Ordinance. Wherever, the requirements of the Ordinance or directives issued by the Securities and Exchange Commission of Pakistan (SECP) differ with the requirements of these standards, the requirements of the Ordinance or the requirements of the said directives take precedence. 2.2. Standards, interpretations and amendments to the published approved accounting standards that are not yet effective Accounting standards, interpretations and amendments in approved accounting standards effective for accounting periods beginning on or after 01 July, 2007 are either not relevant to the company's operations or are not expected to have significant impact on the company's financial statements other than certain increased disclosures in certain cases. 3. BASIS OF PREPARATION These financial statements have been prepared under the historical convention except as disclosed in the accounting policies below. The preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. Estimates and judgement are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The areas involving a higher degree of judgement or complexity or areas where assumptions and estimates are significant to the financial statements are as follows: a) provision for taxation - note 4.3; and b) useful life of depreciable assets and provision for impairment there against - note 4.4. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied through out the year. 4.1. Equity instruments These are recorded at their face value. 4.2. Staff retirement benefits (defined contribution plan) The Company is operating a provident fund scheme for all its employees since 01 May, 1986; contribution to the fund is made monthly at the rate of 10% of the basic salaries both by the employees and the Company. 4.3. Taxation (a) Current Provision for current taxation is based on taxable income at the current rates of taxation after taking into account tax credits and tax rebates available, if any, or minimum tax at the rate of 0.5% of turnover, whichever is higher. (b) Deferred Deferred tax is recognised using the balance sheet liability method in respect of all temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. 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 liability is based on the expected tax rates applicable at the time of reversal. 4.4. Property, plant and equipment and depreciation Operating fixed assets Operating fixed assets are stated at cost / revalued amount less accumulated depreciation and any identified impairment loss except freehold land, which is stated at cost. Cost of some items of plant & machinery consists of historical cost and exchange fluctuation effects on foreign currency loans capitalised during prior years. Borrowing costs are also capitalised for the period upto the date of commissioning of the respective assets, acquired out of the proceeds of such borrowings. Freehold land, buildings on freehold land and plant & machinery of the Company were revalued on 30 June, 1999 by independent Valuers; these property, plant and equipment are shown at such revalued figures. The Company has adopted the cost model for its fixed assets. The surplus on revaluation on these assets shall be held on the balance sheet till realisation in accordance with the requirements of section 235 of the Companies Ordinance, 1984. Depreciation is taken to profit and loss account applying reducing balance method so as to write off the depreciable amount of an asset over its remaining useful life at the rates stated in note 17.1. The assets' residual values and useful lives are reviewed at each financial year end and adjusted if impact on depreciation is significant. Depreciation on additions to property, plant and equipment is charged from the month in which an asset is acquired or capitalised while no depreciation is charged for the month in which the asset is disposed off. Normal repairs and replacements are taken to profit and loss account. Major improvements and modifications are capitalised and assets replaced, if any, other than those kept as stand-by, are retired. Gain / loss on disposal of property, plant and equipment, if any, is taken to profit and loss account. Capital work-in-progress Capital work-in-progress is stated at cost less any identified impairment loss. 4.5. Assets subject to finance lease These are stated at the lower of present value of minimum lease payments under the lease agreements and the fair value of the assets. The related obligations of lease are accounted for as liabilities. Finance charges are allocated to accounting periods in a manner so as to provide a constant periodic rate of financial cost on the remaining balance of principal liability for each period. Depreciation is charged to income at the rates stated in note 17.1 applying reducing balance method to write-off the cost of the asset over its estimated remaining useful life in view of certainty of ownership of asset at the end of lease period. 4.6. Deferred costs Expenses incurred upto 05 July, 2004, the benefit of which is expected to spread over several years, have been deferred and are being amortised over a period of not more than five years. The Company, during the financial year ended 30 June, 2005, in pursuance of the substituted Fourth Schedule and SECP's Circular No.1 of 2005 has changed its accounting policy with respect to deferred cost; accordingly, deferred costs incurred after 05 July, 2004 are being taken to profit and loss account. 4.7. Stores and spares These are valued at moving average cost. Items-in-transit are valued at cost accumulated to the balance sheet date. 4.8. Stock-in-trade ======================================================================= Particulars Mode of valuation ======================================================================= Work-in-process - At cost Finished products 'A' grade - At lower of cost and net realisable value. 'B' grade - At estimated realisable value. =======================================================================-- Cost in relation to work-in-process and finished goods represents annual average cost which consists of prime cost and appropriate manufacturing overheads. -- Net realisable value signifies the selling price in the ordinary course of business less cost of completion and cost necessary to be incurred to effect such sale. 4.9. Trade debtors Trade debtors are carried at original invoice amount less an estimate for doubtful debtors based on review of outstanding amounts at the year-end. Bad debts are written-off when identified. 4.10. Cash and cash equivalents For the purpose of cash flow statement, cash and cash equivalents comprise of cash-in-hand, cheques-in-hand and balances at banks. 4.11. Borrowing costs Borrowing costs incurred on finances obtained for acquisition of fixed assets are capitalised upto the date of commissioning of the respective assets. All other borrowing costs are taken to profit and loss account. 4.12. Provisions Provisions are recognised when the Company has a legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. 4.13. Foreign currency translation Transactions in foreign currencies are accounted for in Pak Rupees at the exchange rates prevailing at the date of transactions. Monetary assets and liabilities in foreign currencies are translated into Pak Rupees at rates of exchange prevailing at the balance sheet date. Foreign exchange differences are recognised in the profit and loss account. 4.14. Financial instruments Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. 4.15. Off-setting of financial instruments Financial assets and liabilities are off-set and the net amount reported in the balance sheet when there is a legally enforceable right to set-off the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. 4.16. Related party transactions Sales, purchases and other transactions with related parties are made at arm's length prices determined in accordance with the comparable uncontrolled price method except for the allocation of expenses relating to combined offices shared with the Associates, which are on the actual basis. 4.17. Revenue recognition -- Sales are recognized on dispatch of goods to customers. -- Return on deposit / saving accounts is accounted for on 'accrual basis'. 4.18. Borrowings Loans and borrowings are initially recognised at the proceeds received; subsequent to initial recognition, these are stated at amortised cost. 4.19. Trade and other payables Creditors relating to trade and other payables are carried at cost which is the fair value of consideration to be paid in the future for goods and services received, whether or not billed to the Company. 4.20. Loans and advances These are stated at cost. 4.21. Dividend distribution Ordinary dividend distribution to shareholders is recognised as liability in the financial statements in the period in which the dividend is approved. 4.22. Impairment The carrying amounts of the Company's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss, if any. Impairment losses are recognised as expense in the profit and loss account. 5. SHARE CAPITAL 5.1. Authorised: ====================================================================================
2007 2006
Rupees Rupees
====================================================================================
2,500,000 ordinary shares of Rs. 10 each 25,000,000 25,000,000
7,500,000 12% redeemable cumulative convertible
Preference shares of Rs. 10 each 75,000,000 75,000,000
10,000,000 100,000,000 100,000,000
====================================================================================5.2. Issued, subscribed and paid-up:====================================================================================
2007 2006
Rupees Rupees
====================================================================================
500,000 Ordinary shares of Rs. 10 each
fully paid in cash 5,000,000 5,000,000
220,000 Ordinary shares of Rs. 10 each
Issued as fully paid bonus shares 2,200,000 2,200,000
7,200,000 12% redeemable cumulative convertible
Preference right shares (non-voting)
of Rs. 10 each fully paid in cash 72,000,000 72,000,000
79,200,000 79,200,000
====================================================================================5.2.1. The Company, during the financial year ended 30 June, 2004, offered to the existing shareholders of the Company 7,200,000 preference shares of Rs.10 each at par value. This preference shares right issue was made in the ratio of 1,000 preference shares (non-voting) for every 100 ordinary shares held by the Company's shareholders on 17 February, 2004. These shares are listed on Karachi and Lahore Stock Exchanges. The salient terms of this issue are as follows:(a) The preference shareholders are not entitled to: -- receive notice, attend general meetings of the Company and vote at meetings of the shareholders of the Company, except as otherwise provided by the Companies Ordinance, 1984 (the Ordinance), whereby the holders of such shares would be entitled to vote separately as a class i.e. with respect to voting entitlement of preference shareholders on matters / issues affecting substantive rights or liabilities of preference shareholders; -- bonus or right shares, in case the Company / Directors decide to increase the capital of the Company by issue of further shares; and -- participate in any profits or assets of the Company except the right of dividend attached to the preference shares. (b) The Company may at its option convert the preference shares into non-voting ordinary shares (as defined in the Articles of Association of the Company), at the expiry of the period of five years after issuance / allotment to be converted at par value of Rs.10 each, if the same are not redeemed. (c) The preference shares will be redeemed after five years of issuance / allotment, if conversion option is not offered by the Company to preference shareholders subject to the provisions of section 85 of the Ordinance. (d) The preference shareholders shall be paid preferred dividend @12% per annum on cumulative basis. If the Company does not pay dividend annually the rate of dividend for the following year(s) shall be increased accordingly in order to account for the delay in payment of dividend. (e) At the end of period of five years from the date of allotment, any unpaid accrued dividend will also be convertible into non-voting ordinary shares in the same manner as the preference shares. 5.2.2. The Company has created a redemption reserve and appropriates the required amount each month from the profit and loss appropriation account to ensure that reserve balance at the redemption date is equal to the principal amount of preference shares. However, for the last two years, no appropriation has been made. 6. SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT Freehold land, buildings on freehold land and plant & machinery of the Company were revalued on 30 June, 1999 by M/s Hamid Mukhtar & Co. - Independent Valuation Consultants and Surveyors, Lahore - to replace the carrying values of these assets with their market values / depreciated market values. The aggregated appraisal surplus arisen on the revaluation amounting Rs.34.793 million was credited to this account to comply with the requirements of section 235 of the Companies Ordinance, 1984. The Company had incorporated the revaluation adjustments with effect from 01 July, 1999. The revaluation surplus has been adjusted only by incremental depreciation arising out of revaluation and deferred taxation. The year-end balance has been arrived at as follows: ====================================================================================
2007 2006
Rupees Rupees
====================================================================================
Opening balance 23,434,309 24,003,701
Less: Transferred to unappropriated profit on
account of incremental depreciation for the year-net
of deferred taxation 512,453 569,392
Closing balance 22,921,856 23,434,309
====================================================================================7. LONG TERM FINANCES - Secured====================================================================================
Note 2007 2006
Rupees Rupees
====================================================================================
ABN AMRO Bank (ABN)
-- Term finance - I 7.1 23,162,255 38,603,758
-- Term finance - II 7.2 8,948,517 14,914,194
32,110,772 53,517,952
Habib Bank Limited (HBL)
-- Demand finance - I 7.3(a) 22,584,625 45,784,625
-- Demand finance - II 7.3(b) 50,000,000 55,000,000
-- Demand finance - III 7.3(c) 24,500,000 24,500,000
97,084,625 125,284,625
129,195,397 178,802,577
Less: Current portion grouped under current liabilities
-- ABN 21,407,181 21,407,181
-- HBL 50,751,292 28,200,000
72,158,473 49,607,181
57,036,924 129,195,396
====================================================================================7.1. The Company, during the financial year-ended 30 June, 2004, arranged a term finance facility of Rs.65 million from ABN to finance import of Tetra Pak filling equipment. The facility, during the year, carried mark-up at the rates ranging from 10.98% to 11.36% per annum and is secured against ABN's ranking charge over fixed assets excluding land and building for Rs. 87 million, personal guarantees of some of the directors of the Company and unconditional guarantee of Tetra Pak Pakistan Ltd. for Rs.65 million covering 100% principal, interest and other costs. Initially this finance facility was available for a period of two years; however, it may be extended on annual basis for a maximum period of three years at ABN's discretion. Maximum tenure of the finance facility is five years.7.2. The Company, during the financial year ended 30 June 2005, arranged a further term finance facility of Rs.25 million from ABN to finance purchase of Tetra Pak filling machine. The facility, during the year, carried mark-up at the rates ranging from 11.20% to 12.42% per annum and is secured against ABN's exclusive charge on Tetra Pak filling machine financed by it, personal guarantees of some of the directors of the Company and unconditional guarantee of Tetra Pak Pakistan Ltd. covering 100% principal, interest and other costs. This finance facility was available for a period of two years; subsequently the facility may be extended on annual basis for a maximum period of three years at ABN's discretion. Maximum tenure of facility will be five years. 7.3 (a) The Company, during the financial year ended 30 June, 2005, arranged a demand finance facility of Rs. 70 million from HBL to repay the long term exposure of the Bank of Punjab. This finance facility is repayable in 12 equal quarterly instalments of Rs. 5.800 million commencing July, 2005 and, during the year, it carried mark-up at the rates ranging from 10.20% to 11.92% per annum. (b) The Company, during the preceding year, has arranged this demand finance facility of Rs.60 million from HBL. This finance facility, during the year, carried mark-up at the rates ranging from 10.70% to 11.92% per annum. Year-end outstanding balance of this finance facility is repayable in 11 equal quarterly instalments of Rs. 5 million commencing June, 2007. (c) The Company, during the preceding year, has arranged this demand finance facility of Rs.24.500 million from HBL to finance purchase of TBA filling machine and is secured against HBL's exclusive charge on the TBA filling machine financed by it. The facility, during the year, has carried mark-up ranging from 10.70% to 11.92% per annum and is repayable in 12 equal quarterly instalments of Rs. 2.042 million commencing September, 2007. (d) These demand finance facilities are secured against first charge for Rs. 295 million on fixed assets of the Company including land, buildings and plant & machinery located at Bhalwal excluding the ABN's exclusive charge of Rs. 120.340 million on the filling machine. 8. LONG TERM LOAN FROM CHIEF EXECUTIVE - Unsecured The Chief Executive, during the preceding year, has arranged loans aggregating Rs.54 million by borrowing the equivalent amounts from PICIC Commercial Bank Ltd. (PCBL). The Company is liable to pay mark-up on these loans at the same rate as the Chief Executive has to pay to PCBL on the loans obtained by him. This loan, during the current year, has carried mark-up ranging from 11.63% to 14.92% per annum. The Company is also liable to reimburse to Chief Executive the charges and fees payable by him to PCBL on the loan amounts. The Company is proposing to issue right shares during the financial year ending 30 June, 2008. After approval of all the formalities from the concerned authorities regarding issuance of right shares, the Company will adjust the principal amount of loans against the subscription amount payable by the Chief Executive against the right shares to be offered to him. In case, the subscription amount of right shares is less than the loan amounts or the Company decides against the issuance of right shares, any remaining amount after the adjustment of subscription amount will be paid to the Chief Executive in one instalment by or on 31 December, 2008. Until such time, the Company will pay the applicable mark-up, fees and charges on the loan amounts. 9. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE - Secured ====================================================================================================================
Upto one From one Upto one From one
year to five 2007 year to five 2006
years years
Rupees
====================================================================================================================
Minimum lease payments 9,843437 3,097,860 12,941,297 13,681,999 9,388,945 23,070,944
Less: finance charges allocated
to future periods 28,5099 16,620 301,719 1,356,551 298,864 1,655,415
9,558,338 3,081,240 12,639,578 12,325,448 9,090,081 21,415,529
Less: security deposits adjustable
on expiry of lease terms 3,222,418 198,000 3,420,418 1,193,510 3,301,918 4,495,428
Present value of minimum
lease payments 6,335,920 2,883,240 9,219,160 11,131,938 5,788,163 16,920,101
Less: Current portion grouped
Under current liabilities 6,335,920 11,131,938
2,883,240 5,788,163
====================================================================================================================9.1. The Company has entered into lease agreements with Atlas Bank Limited, Bank Alfalah Limited, Prime Commercial Bank Limited and ORIX Leasing Pakistan Limited to acquire plant & machinery and vehicles. The liabilities under the lease agreements are payable in monthly instalments by February, 2009 and are subject to finance charges at the rates ranging from 7.50% to 14.50% per annum. The Company intends to exercise its option to purchase the leased plant & machinery and vehicles upon completion of the respective lease terms. The lease liabilities are secured against demand promissory notes and personal guarantees of some of the directors.9.2. The Company, during September, 2006, has obtained a lease finance facility of Rs.3.860 million from the Bank of Punjab (BoP) under Kisan Dost Livestock Development Scheme to acquire Farm Cooling Tanks along with its allied accessories. This finance facility is repayable in 20 equal quarterly instalments by September, 2011 and carries mark-up at 6-months KIBOR + 475 bps with a floor of 10% per annum; mark-up is payable by Pakistan Dairy Development Company. This finance facility is secured against BoP's charge on leased assets and corporate guarantee of the Company. The Company intends to exercise its option to purchase the leased assets upon completion of the lease term. 10. DEFERRED TAXATION =====================================================================================
2007 2006
Rupees Rupees
=====================================================================================
Credit balance arising in respect of:
-- accelerated tax depreciation allowances 59,055,014 62,229,238
-- lease finances 4,946,573 4,836,350
-- surplus on revaluation of property,
plant and equipment 2,483,424 2,759,360
Debit balances arising in respect of:
-- available tax losses (35,131,999) (40,970,888)
-- minimum tax recoverable against
tax charge in future years (17,669,191) (10,286,271)
13,683,821 18,567,789
=====================================================================================11. SHORT TERM FINANCES - Secured11.1. Running finance facility available from Habib Bank Limited (HBL) amounts to Rs. 95 million (2006: Rs. 95 million). The facility, during the year, carried mark-up at the rates ranging from 10.20% to 11.92% per annum and is available upto March, 2008. The finance facility is secured against first exclusive hypothecation charge for Rs. 200 million on all current assets of the Company. 11.2. Facilities for opening letters of credit / guarantee aggregate Rs.35 million (2006: Rs.30 million) of which the amount aggregating Rs.33.049 million (2006: Rs.29.503 million) remained unutilised at the year-end. These facilities are secured against lien on import documents and personal guarantee of some of the directors of the Company. These facilities are available upto February, 2008. 12. TRADE AND OTHER PAYABLES =====================================================================================
2007 2006
Note Rupees Rupees
=====================================================================================
Creditors 64,351,413 35,810,612
Due to Associates 154,848 8,897
Accrued expenses 9,556,197 7,825,252
Advance payments 12,740,989 10,122,837
Duetoemployees 111,151 96,583
Income tax deducted at source 37,445 19,345
Employees' provident fund 2,307,249 2,012,484
Workers' (profit) participation fund 12.1 1,411,502 438,571
Others 62,946 39,048
90,733,740 56,373,629
=====================================================================================12.1. Workers' (profit) participation fund=====================================================================================
2007 2006
Rupees Rupees
=====================================================================================
Opening balance 438,571 1,793,596
Allocation for the year 972,931 -
Interest on funds utilized in the Company's business - 438,571
972,931 438,571
1,411,502 2,232,167
Less: amount paid during the year - 1,793,596
Closing balance 1,411,502 438,571
=====================================================================================13. ACCRUED MARK-UP=====================================================================================
2007 2006
Rupees Rupees
=====================================================================================
Mark-up accrued on
-- long term finances 1,261,241 2,651,709
-- loan from chief executive 1,875,490 843,958
-- short term finances 2,545,458 1,992,652
Accrued lease finance charges 20,828 -
5,703,017 5,488,319
=====================================================================================14. TAXATION-Net=====================================================================================
2007 2006
Rupees Rupees
=====================================================================================
Opening balance 5,735,745 4,894,200
Add: Provision made during the year
-- current year 5,851,000 5,641,545
-- prior years' - net (25,492) (155,274)
5,825,508 5,486,271
11,561,253 10,380,471
Less: adjustments against completed assessments 5,616,053 4,644,726
5,945,200 5,735,745
=====================================================================================14.1. The Company had filed an appeal with the Commissioner of Income Tax (Appeals) for the Assessment Year 2002-03 on the grounds that the Assessing Officer while finalising assessment had not allowed the refund of Rs.136,432 and also not established the tax credit of Rs.634,598 available under section 107AA of the repealed Income Tax Ordinance, 1979. The appeal is pending adjudication; However, the Company had adjusted the aforementioned tax credit of Rs.634,598 in its Income Tax Return for the Tax Year 2003.14.2. No numeric tax rate reconciliation is given as the Company is liable for minimum tax. 15. DIVIDENDS =====================================================================================
2007 2006
Note Rupees Rupees
=====================================================================================
Unclaimed dividends on:
-- ordinary shares 823,694 849,870
-- preference shares 11,640 11,729
Dividend on preference shares:
-- preceding year 15.1 9,676,800 -
-- current year 8,640,000 -
19,152,134 861,599
=====================================================================================15.1. Dividend on preference shares, for the preceding year, includes mark-up @ 12% per annum16. CONTINGENCIES AND COMMITMENTS 16.1. The Collector of Sales Tax Adjudication, Faisalabad raised sales tax demand aggregating Rs. 272,036 alongwith additional tax and penalty on account of sale of vehicles, scrap and advances received pertaining to prior years. The Company filed an appeal with the Customs, Central Excise and Sales Tax Appellate Tribunal, Lahore, which partly accepted the Company's appeal and determined a refund of Rs.380,320. The Collectorate, however, has filed an appeal against the judgment passed by the Tribunal with the Lahore High Court; the matter is presently sub-judice before the Court. 16.2. As at 30 June, 2007, guarantees issued by Bank Alfalah Limited on behalf of the Company to SNGPL were outstanding for Rs.1.300 million (2006: guarantees issued by National Bank of Pakistan and Bank Alfalah were for Rs.2.300 million). Also refer contents of note 25.1. 16.3. Commitments outstanding as at 30 June were for: =====================================================================================
2007 2006
Rupees Rupees
=====================================================================================
-- capital expenditure 27,859,100 119,100
-- others - irrevocable letters of credit - 497,291
27,859,100 616,391
=====================================================================================17. PROPERTY, PLANT AND EQUIPMENT=====================================================================================
2007 2006
Note Rupees Rupees
=====================================================================================
Operating fixed assets 17.1 353,305,588 364,826,166
Capital work-in-progress - at cost 17.5 7,421,227 1,410,800
360,726,815 366,236,966
=====================================================================================17.1. OPERATING FIXED ASSETS - Tangible================================================================================================================================================================
COST/REVALUATION DEPRECIATION Net
PARTICULARS As at 30 June, Additions / Transfers ins As at 30 June, Rate As at 30 June, For the year On transfer As at 30 Book value as
2006 (disposals) / (outs) 2007 % 2006 (on ins / (outs) June, 2007 at 30
disposals) June 2007
OWNED: Rupees Rupees
================================================================================================================================================================
Land-Freehold 18,807,460 - - 18,807,460 - - - - 18,807,460
Buildings on freehold land 38,763,171 903,895 - 39,667,066 10 13,075,906 2,616,631 - 15,692,537 23,974,529
Plant and machinery 365,117,074 14,896,026 2,899,100 382,912,200 10 99,188.318 27,068,153 1,187,210 127,443,681 255,468,519
Milk chums 143,740 - - 143,740 15 142,628 167 - 142,795 945
Electric & gas installation 7,984,527 355,259 - 8339,786 10 2,247,952 591,340 - 2,839,292 5,500,494
Other works equipment 4,300,849 29,954 - 4330,803 10 2,229,356 209026 - 2,438,382 1,892,421
Office equipment 3,799,649 402,394 - 4,202,043 10 1,443,990 262,293 - 1,706,283 2,495,760
Furniture and fixtures 10,629,908 905,607 - 11,535,515 10 4,168,067 706,725 - 4,874,792 6,660,723
Vehicles 22,547,083 7,966,432 11,040,457 37,872,977 20 15,509,321 3,124,075 5,506,062 22,720,466 15,152,511
(3,680,995) (1,418,992)
472,093,461 25,459,567 13,939,557 507,811,590 138,005,538 34,578,410 6,693,272 177,858,228 329,953,362
(3,680,995) (1,418,992)
LEASED:
Plant and machinery 9,409,704 4,290,000 (2,899,100) 10,800,604 10 2,866,209 697,661 (1.187.210) 2,376,660 8,423,944
Vehicles 39,415,457 - (11,040,457) 28,375,000 20 15,220,709 3,732,071 (5,506,062) 13,446,718 14,928,282
48,825,161 4,290,000 (13,939,557) 39,175,604 18,086,918 4,429.732 (6,693,272) 15,823,378 23,352,226
2007 Rupees 520,918,622 29,749,567 - 546,987,194 156,092,456 39,008,142 - 193,681,606 353,305,588
(3,680,995) (1,418,992)
2006 Rupees 470,205,050 79,348,056 - 520,918,622 123,166,407 37,707,402 - 156,092,456 364,826,166
(28,634,484) (4,781,353)
================================================================================================================================================================17.2. Depreciation on UHT plant, installed and operated on trial run during the financial year ended 30 June; 2004, was not provided for in that year. Had depreciation been properly provided for, profit for the current year would have been higher by Rs.1.137 million and unappropriated profit as at 30 June, 2007 would have been lower by Rs.10.234 million.17.3. Depreciation for the year has been apportioned as under: ====================================================================================
2007 2006
Rupees Rupees
====================================================================================
Milk collection centers 6,764,784 7,811,588
Cost of sales 29,174,783 26,909,241
Administrative expenses 1,680,875 2,027,981
Distribution cost 1,387,700 958,592
39,008,142 37,707,402
====================================================================================17.4. Disposal of operating fixed assets=============================================================================================================================
Particulars Cost Accumulated Book Sale Gain / Sold through
Depreciation Value Proceeds (Loss) Negotiations to on
(Rupees)
=============================================================================================================================
Owned:
Vehicles
Suzuki Bolan 358,000 289,588 68,412 270,000 201,588 Mr. Mehmood Ashraf - Phalla
Tank, Lahori Mandi, Lahore.
Kia Classic 345,000 142,600 202,400 205,000 2,600 Mr. Saeed Taj Din, 6-A, Jail
Road, Lahore.
Suzuki 506,113 425,448 80,665 290,000 209,335 Mr. Muhammad Khan - Tehsil
Potohar & Distt. Faisalabad.
Suzuki Cultus 609,000 20,300 588,700 634,000 45,300 M/s. Suzuki Falcon - Sargodha.
Toyota Corolla 450,000 332,035 117,965 150,000 32,035 Brig. (R) Qamar Ahmad (Ex-employee)
Toyota Corolla 1,279,000 85,267 1,193,733 1,050,000 (143,733) Mr. Masood Anwar (Ex-employee)
Milk Tanker 108,950 98,907 10,043 365,000 354,957 Mr. Nisar Ahmad - Bhalwal
Yamaha 10,145 10,126 19 12,000 11,981 Haji Ghos Muhammad
Motocycle Bhalwal
Kawasaki 14,787 14,721 66 1,000 934 Rana Muhammad Akmal Khan
Motorcycle (Ex-employee)
3,680,995 1,418,992 2,262,003 2,977,000 714,997
=============================================================================================================================17.5. Capital work-in-progress===================================================================================
2007 2006
Rupees Rupees
===================================================================================
Advance payment for:
-- website development - 131,800
-- vehicle - 1,279,000
-- plant and machinery 1,708,705 -
-- building 3,184,827 -
Civil work - building 2,527,695 -
7,421,227 1,410,800
===================================================================================18. DEFERRED COST===================================================================================
2007 2006
Rupees Rupees
===================================================================================
Opening balance 580,253 1032,840
Less: amortised during the year 315,587 452,587
264,666 580,253
===================================================================================19. LONG TERM LOANS - Secured, considered good===================================================================================
2007 2006
Rupees Rupees
===================================================================================
Loan to employees 430,362 701,183
Less: current portion grouped under current assets 350,012 353,483
80,350 347,700
===================================================================================/hjs219.1. These interest free loans have been advanced as financial assistance and are recoverable in monthly instalments. These are secured against provident fund balance of the employees.19.2. No amount was due from the directors, chief executive and executives during the year. 20. STORES, SPARES AND LOOSE TOOLS ===================================================================================
2007 2006
Rupees Rupees
===================================================================================
Stores - at mills including in transit valuing
Rs. 1,980,145 (2006: Rs. Nil) 42,920,085 51,533,777
Spares 10,512,155 6,273,758
Loose tools 80,220 102,579
53,512,460 57,910,114
===================================================================================20.1. Stores and spares inventory includes slow moving items valuing Rs. 1.840 million (2006: Rs.2.680 million).21. STOCK-IN-TRADE ===================================================================================
2007 2006
Rupees Rupees
===================================================================================
Work-in-process 13,322,000 8,233,000
Finished goods 'A' grade 30,961,000 21,969,000
44,283,000 30,202,000
===================================================================================22. LOANS AND ADVANCES - Considered good===================================================================================
2007 2006
Rupees Rupees
===================================================================================
Due from employees (including current portion
of long term loan 490,343 468,235
Advance payments 2,900,426 2,383,485
Letters of credit - 1,956
3,390,769 2,853,676
===================================================================================23. SHORT TERM SECURITY DEPOSITS AND PREPAYMENTS===================================================================================
2007 2006
Rupees Rupees
===================================================================================
Security deposits 1,879,975 -
Prepayments 969,010 3,384,185
2,848985 3,384,185
===================================================================================24. OTHER RECEIVABLES===================================================================================
2007 2006
Note Rupees Rupees
===================================================================================
Accrued profit on bank deposits 45,119 13,819
Due from Associates - considered good 24.1
-- Noon Sugar Mills Ltd. - 23,800
-- Noon International (Pvt.) Ltd. - 23,800
-- Textile Technics (Pvt.) Ltd. 1,711 -
Insurances claim receivable 79,826 71,826
126,656 133,275
===================================================================================24.1. These balances have arisen on account of normal course of business and are interest free.25. CASH AND BANK BALANCES ===================================================================================
2007 2006
Note Rupees Rupees
===================================================================================
Cash in hand 392,244 536,608
Cheque-in-hand - 24,500,000
Cash at banks on:
-- current accounts 11,313,677 12,241,830
-- PLS/saving accounts 25.1 2,374,575 2,355,935
-- dividend accounts 254,951 255,190
13,943,203 14,852,955
14,335,447 39,889,563
===================================================================================25.1. The Company has deposited a term deposit receipts of Rs.500,000 and Rs. 800,000 with Bank Alfalah Limited as security of guarantees of the equivalent amount issued by it to Sui Northern Gas Pipelines Ltd. on behalf of the Company. These guarantees will expire on 28 May, 2008 and 09 October, 2008 respectively.26. SALES - Net ===================================================================================
2007 2006
Rupees Rupees
===================================================================================
Gross sales 1,168,184,000 1,160,854,697
Less:
Sales tax 1,639,535 20,847,259
Shortages/leakages allowed 9,190,123 12,775,323
Discounts 4,619,627 4,021,425
15,449,285 37,644,007
1,152,734,715 1,123,210,690
===================================================================================27. COST OF SALES===================================================================================
2007 2006
Note Rupees Rupees
===================================================================================
Raw materials consumed 27.1 591,714,235 533,116,348
Milk collection expenses 76,210,113 64,630,369
Salaries, wages and benefits 27.2 27,874,004 23,120,342
Power and fuel 37,310,755 33,191,655
Packing material consumed 193,737,166 248,178,366
Stores consumed 27,002,282 24,894,845
Repair and maintenance 14,008,463 8,660,188
Rent, rates and taxes 2,523,218 2,205,479
Depreciation 29,174,783 26.909,241
Insurance 3,333,088 3,433,603
Others 113,725 63,600
1,003,001,832 968,404,036
Adjustment of work-in-process
Opening 8,233,000 4,781,000
Closing (13,322,000) (8,233,000)
(5,089,000) (3,452,000)
Cost of goods manufactured 997,912,832 964,952,036
Adjustment of finished goods
Opening stock 21,969,000 39,548,000
Closing stock (30,961,000) (21,969,000)
(8,992,000) 17,579,000
988,920,832 982,531,036
===================================================================================27.1. Raw materials consumed:===================================================================================
2007 2006
Rupees Rupees
===================================================================================
Fresh milk 566,944,646 503,237,533
Skimmed milk powder 19,259,496 24,641,780
Jams 4,340,852 3,605,131
Cream 51,108 336,706
Apple and orange concentrate 945,455 1,273,264
Processing charges of mineral water 56,745 21,934
Honey 115,933 -
591,714,235 533,116,348
===================================================================================27.2. The Company, during the year, made contributions to employees' provident fund trust aggregating Rs. 1,151,671 (2006: Rs. 1,232,765).28. ADMINISTRATIVE EXPENSES ===================================================================================
2007 2006
Note Rupees Rupees
===================================================================================
Salaries and benefits 28.1 15,840,063 12,028,710
Travelling and conveyance:
-- directors 781,875 416,713
-- others 1,558,560 1,613,800
Rent, rates and taxes 2,695,077 2,195,407
Entertainment 1,344,573 1,068,084
Communication 1,526,757 1,624,273
Printing and stationery 1,179,756 1,068,489
Electricity, gas and water 675,624 706,766
Insurance 473,111 657,324
Repair and maintenance 915,078 705,517
Advertisement 290,040 31,950
Vehicles' running 2,817,041 3,140,753
Subscription 171,963 711,738
Auditors' remuneration 28.2 365,000 450,000
Legal and professional charges (other than Auditors) 1,313,970 747,500
Technical and administrative service contract charges 1,498,600 1,200,000
Amortisation of deferred cost 18 315,587 452,587
Cash security charges 93,733 65,445
General 457,047 523,196
Depreciation 1,680,875 2,027,981
35,994,330 31,436,233
===================================================================================28.1. The Company, during the year, made contributions to employees' provident fund trust aggregating Rs. 541,463 (2006: Rs. 414,100).28.2. Auditors' remuneration ===================================================================================
2007 2006
Rupees Rupees
===================================================================================
-- audit fee 125,000 125,000
-- half yearly review 40,000 35,000
-- consultancy charges 150,000 250,000
-- certification charges 20,000 30,000
-- out-of-pocket expenses 30,000 10,000
365,000 450,000
===================================================================================29. DISTRIBUTION COST===================================================================================
2007 2006
Note Rupees Rupees
===================================================================================
Salaries and benefits 29.1 11,579,632 10,746,073
Freight and forwarding 24,311,830 28,449,681
Rent 930,398 467,249
Entertainment 70,030 72,157
Communication 175,779 283,291
Electricity and gas 48,330 41,942
Travelling and conveyance 53,681 117,936
Vehicles' running and maintenance 21,797 395,393
Advertisement and sales promotion - net of marketing
support credits allowed by Tetra Pak Pakistan Ltd.
aggregating Rs. Nil (2006: Rs. 33.518 million) 48,671,919 65,392,496
Insurance 221,765 83,250
Depreciation 1,387,700 958,592
Samples 1,655,463 1,721,836
Others 127,675 112,876
89,255,999 108,842,772
===================================================================================29.1. The Company, during the year, made contributions to employees' provident fund trust aggregating Rs. 363,347 (2006: Rs. 398,802).30. OTHER OPERATING EXPENSES ===================================================================================
2007 2006
Note Rupees Rupees
===================================================================================
Workers' (profit) participation fund 12.1 972,931 -
Donations 30.1 67372 395,204
Receivable balance written-off-others 472,210 30,558
1,512,513 425,762
===================================================================================30.1. None of the directors or their spouses have any interest in any of the donees, however, donations of preceding year includes Rs. 20,000 donated to Noor Hayat Noon Trust Hospital Bhalwal, District Sargodha. Mr. Manzoor Hayat Noon (Chairman and Chief Executive of the Company) is one of the Trustees of the Hospital.31. FINANCE COST Mark-up on - long term finances-net of mark-up shared by Tetra Pak Pakistan Ltd. aggregating Rs. 1.867 million (2006: Rs. 2.610 million) ===================================================================================
2007 2006
Rupees Rupees
===================================================================================
15,811,030 12,997,251
-- Short term finances 10,074,978 7,030,454
Lease finance charges 1,366,618 2,197,271
Mark-up on loan from Chief Executive 7,635,100 843,958
Interest on workers' (profit) participation fund - 438,571
Bank and other charges 1,855,159 1,354,651
36,742,885 24,862,156
===================================================================================32. OTHER OPERATING INCOME===================================================================================
2007 2006
Note Rupees Rupees
===================================================================================
Profit on PLS / saving accounts 80,865 24,923
Unclaimed balances written-back - 557,762
Sale of scrap - net of sales tax 1,200,482 1,674,007
Gain on sale of fixed assets 17.4 714,997 4,281,717
Refund of excise duty - 18,814
Packing charges of juices 16,166,620 3,424,272
Excess bonus accrual made in
preceding year written-back - 5,238,451
Miscellaneous 14,561 1,631
18,177,525 15,221,577
===================================================================================33. LOSS PER SHARE33.1. Basic ===================================================================================
2007 2006
===================================================================================
Profit/(loss) after taxation 17,544,141 (11,865,411)
Less: dividend on preference shares (18,316,800) -
Loss attributable to ordinary shareholders (772,659) (11,865,411)
===================================================================================
No. of Shares
===================================================================================
Weighted average number of ordinary
shares outstanding during the year 720,000 720,000
===================================================================================
Rupees
===================================================================================
Loss per share (1.07) (16.48)
===================================================================================33.2.There was no dilutive effect on loss per share for the current and preceding year.34. TRANSACTIONS WITH RELATED PARTIES 34.1. Maximum amount receivable from Associates at the end of any month during the year was Rs. 254,293 (2006: Rs. 120,549). 34.2. Aggregate transactions made during the year with the Associates were as follows: ===================================================================================
2007 2006
Rupees Rupees
===================================================================================
-- sale of dairy products 117,391 81,120
-- purchase of stores and spares 614,135 272,102
===================================================================================34.3. No other transactions, other than remuneration and benefits to key management personnel under the terms of their employment, were executed with other related parties during the year.35. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES ==================================================================================================
Chief Executive Directors Executives
Particulars 2007 2006 2007 2006 2007 2006
==================================================================================================
Remuneration
(including bonus) - - 633,333 600,000 3,666,000 884,000
Provident fund - - - 128,496 -
Rent and utilities 995,423 1,003,410 499,430 416,713 125,821 138,217
Medical - - 22,000 - 112,481 -
Club bills - - 853,485 643,233 - -
Rupees 995,423 1,003,410 2,008,248 1,659,946 4,032,798 1,022,217
Number of persons 1 1 1 1 3 1
==================================================================================================35.1. In addition, the Chief Executive, Director and three (2006: one) of the Executives were also provided free use of the Company's maintained car.35.2. Rent free accommodation is also provided to one (2006: one) of the Executives. 35.3. The above payments do not include amounts paid or provided for, if any, by the Associates. 36. FINANCIAL INSTRUMENTS 36.1. Financial assets and liabilities ============================================================================================================================================
Non interest/
Interest / Mark-up bearing Mark-up bearing
Interest / Maturity Maturity Maturity Maturity
Mark-up upto one after one Sub-total upto one after one Sub-total Total
rate range year year year year
% per annum
(Rupees)
============================================================================================================================================
FINANCIAL ASSETS:
Security deposits - - - 1,879,975 565,019 2,444,994 2,444,994
Trade debtors - - - 39,499,006 - 39,499,006 39,499,006
Other receivables - - - 126,656 - 126,656 126,656
cash and bank balances 6.0% 2,374,575 - 2,374,575 11,960,872 - 11,960,872 14,335,447
2007: 2,374,575 - 2,374,575 53,466,509 565,019 54,031,528 56,406,103
2006: 2,355,935 - 2,355,935 73,409,285 3,213,295 76,622,580 78,978,515
FINANCIAL LIABILITIES:
Long term finances 10.20% to
12.42% 72,158,473 57,036,924 129,195,397 - - 129,195,397
Long term loan from 11.63%to 54,000,000 54,000,000 - - - 54,000,000
chief executive 14.92%
Liabilities against
assets subject to 7.50% to
finance lease 14.50% - - - - - -
Short term finances 10.20% to
11.92% 93,820,156 - 93,820,156 - - - 93,820,156
Trade and other payables - - - 74,081,707 - 74,081,707 74,081,707
Accrued mark-up - - - 5,703,017 - 5,703,017 5,703,017
Dividends - - - 19,152,134 - 19,152,134 19,152,134
2007: 165,978,629 111,036,924 277,015,553 98,936,858 - 98,936,858 375,952,411
2006: 140,715,184 188,983,559 329,698,743 49,985,782 - 49,985,782 379,684,525
Off balance sheet items
Guarantees - - - - 1,300,000 1,300,000 1,300,000
Commitments - - - - 27.859,100 27,859,100 27,859,100
2007: - - - - 29,159,100 29,159,100 29,159,100
2006: - - - 2,916,391 2,916,391 2,916,391
============================================================================================================================================36.2. Concentration of credit riskCredit risk represents the accounting loss that would be recognised at the reporting date if counter parties fail completely to perform as contracted. The Company believes that it is not exposed to any major credit risk as a major portion of its financial assets represents balances with major commercial banks having reasonably high credit ratings. Further, in the case of trade debtors, exposure is spread over a large number of counter-parties. To manage exposure to credit risk, the Company applies credit limits to its customers and also obtains advances from them. 36.3. Foreign exchange risk Foreign currency risk mainly arises where receivables and payables exist due to transactions with foreign undertakings. The Company believes that it is not exposed to major foreign exchange risk in this respect. 36.4. Interest rate risk Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in the market interest rates. The Company usually borrows funds at fixed and market based rates and as such the risk is minimised. 36.5. Liquidity risk Liquidity risk reflects an enterprise's inability in raising funds to meet commitments. The Company follows an effective cash management and planning policy to ensure availability of funds and to take appropriate measures for new requirements. 36.6. Fair values of financial assets and liabilities The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values. 37. CAPACITY AND PRODUCTION =============================================================================
2007 2006
=============================================================================
Milk Powder and Butter Plant
Annual rated capacity of milk processing
based on two shifts Kgs. 26,127,500 26,127,500
Fresh milk processed during the year Kgs. 14,681,778 9,380,077
Cheese Plant
Annual rated capacity of milk processing
Based on 24 hours per day Kgs. 2,000,000 2,000,000
Fresh milk processed during the year Kgs. 2,736,745 2,304,070
Pasteurised Milk Plant
Annual rated capacity of milk
Pasteurization based on two shifts Kgs. 5,840,000 5,840,000
Milk pasteurised during the year Kgs. 1,543,588 1,417,665
2007 2006
UHT Milk Plant
Annual rated capacity of milk
processing based on 20 hours per day Ltrs. 46,720,000 46,720,000
Milk processed during the year Ltrs. 15,883,030 21,236,132
UHT cream Ltrs. 386,315 933,684
Flavoured milk Ltrs. 1,362,780 39,253
High calcium lowfat Ltrs. 30,000 -
Juice Plant
Annual rated capacity of juices
Based on three shifts operation Ltrs. 43,800,000 43,800,000
Juices processed during the year Ltrs. 95,645 131,385
=============================================================================Processing and pasteurisation were restricted to the availability of milk to the Company.38. DATE OF AUTHORISATION FOR ISSUE These financial statements were authorised for issue by the Board of Directors of the Company in its meeting held on 05 September, 2007. 39. GENERAL -- Figures in the financial statements have been rounded-off to the nearest Rupee. -- Corresponding figures have been rearranged and reclassified, wherever necessary, for the purpose of comparison. However, no material rearrangements and reclassifications have been made in these financial statements. |