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Balance sheetAs at june 30,2011
Note 2011 (Rupees in 2010 thousand)
Equity and liabilities
Balance sheetShare capital and reservesAuthorized share capital
370,000,000(2010: 370,000,000) 3,700,000 3,700,000
ordinary shares of rupees 10 each
30,000,000(2010:30,000,000)prefrence 300,000 300,000
shares of rupees 10 each
4000000 4000000
Issued, subscribed and paid up share capital 3 2,455,262 1,455,262
Reserves 4 1931374 1906006
Total equity 4,386,636 3,361,268
Surplus on revaluation on land and invesment properties 5 3685497 3673825
NON-CURRENT LIABILTIES
long term financing 6 1318710 1628067
liabilities against assets subject t finance lease 7 42843 67005
defferred income tax 8 62141 157996
1423694 1853068
CURRENT LIABILTIES
Trade and other payable 9 834691 1040257
Accrued mark-up 10 230138 289987
Short term brrowing 11 5130265 6070435
Current portion of non-current liabilties 12 611744 768459
6806838 8169138
TOTAL LIABILTIES 8230532 10022206
TOTAL EQUITY AND LIABILTIES 16,302,665 17,057,299
CONTINGENCIES AND COMMITMENTS 13
ASSETS 14 6,747,691 6,496,299
NON - CURRENT ASSETS 15 9,563 -
Property, plant and equipment 16 1,721,714 1,720,835
Intangible asset 17 3,248,880 2,249,170
Investment properties 18 35,758 34,887
Long term investments 11763606 10501191
Long term deposits
CURRENT ASSETS
Stores, spare parts and loose tools 19 328,393 345,798
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Stock-in-trade 20 1,657,252 2,393,113
Trade debts 21 707,400 1,329,065
Advances 22 241,331 596,795
Security deposits and short term prepayments 23 19,045 15,578
Accrued Interest 46 141
Due from subsidiary companies 24 601,144 14,987Other receivables 25 432,943 386,941
Short term investments 26 600 642,111
Taxation recoverable 129,909 99,805
Cash and bank balances 27 420,996 78,851
4539059 5903185
Non-current assets classified as held for sale 28 - 652,923
4539059 6556108
TOTAL ASSETS 16,302,665 17,057,299
Profit and Loss AccountFor the year ended june 30,2011
Note 2011 2010
(Rupees in thousand)
SALES 29 12,037,253 10,693,338
COST OF SALES 30 -10,213,705 -8,692,529
GROSS PROFIT 1823548 2000809
DISTRIBUTION COST 31 -425,063 -397,818
ADMINISTRATIVE EXPENSES 32 -218,739 -195,103
OTHER OPERATING EXPENSES 33 -49,432 -37,323
-693234 -630244
1,130,314 1,370,565
OTHER OPERATING INCOME 34 595,770 78,651
PROFIT FROM OPERATIONS 1726084 1449216
FINANCE COST 35 -1,037,294 -1,072,768
PROFIT BEFORE TAXATION 688790 376448
TAXATION 36 -200,939 -98,587
PROFIT AFTER TAXATION 487851 277861
EARNINGS PER SHARE - BASIC AND DILUTED (Rupees) 40 2.2 1.91
The annexed notes from an integral part of these financial statement
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Statement of Comprehensive incomeFor the year ended june 30, 2011
PROFIT AFTER TAXATION487,851 277,861
OTHER COMPREHENSIVE INCOME / (LOSS)
Surplus arising on remeasurement of available for sale investment
to fair value- 32,632
Reclassification adjustment for gain included in profit and loss-462,483 -
Deferred income tax relating to surplus on available for sale
investment- -8,566
Other comprehensive income / (loss) for the year - net of tax -462,483 24,066
TOTAL COMPREHENSIVE INCOM FOR THE YEAR 25368 301927
The annexed notes from an integral part of these financial statement
Cash Flow StatementFor the year ended June 30, 2011 2011 2010
Note (Rupees in thousand)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations 37 2,998,394 674,317
Finance cost paid -1,094,698 -968,040
Workers profit participation fund paid -13,397
Income tax paid -162,285 -108,787
Net increase in long term deposits -871 -1,270
Net cash generated from / (used in) operating activities 1,727,143 -403,780
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditure on property, plant and equipment -177891 -281042
Capital expenditure on intangible asset -9836 -
Payment for non-current assets classified as held for sale - -51261
Investments made -174 -200
Return on bank deposits received 1363 934
Proceeds from sale of property, plant and equipment 13132 7765
Proceeds from sale of investments 8715 -
Proceeds from sale of non current-assets classified as held for sale 119200 -
Advance against purcahse of land received back 100000 -Dividend received 16263 13222
Net cash from / (used in) investing activities 70772 -310582
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long term financing 150000 -
Repayment of long term financing -595077 -420840
Short term borrowings - net -940170 1259964
Repayment of liabilities against assets subject to finance lease -70523 -90286
Repayment of lease finance advance - -35922
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Net cash (used in) / from financing activities -1455770 712916
Net increase / (decrease) in cash and cash equivalents 342,145 -1,446
Cash and cash equivalents at the beginning of the year 78851 80297
Cash and cash equivalents at the end of the year 420,996 78,851
The annexed notes form an integral part of these financial statements
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Profit and Loss AccountFor the year ended june 30,2011
Note 2011
(Rupees in
SALES 29 12,037,253
COST OF SALES 30 (10,213,705)
GROSS PROFIT 1823548
DISTRIBUTION COST 31 (425,063)
ADMINISTRATIVE EXPENSES 32 218,739
OTHER OPERATING EXPENSES 33 (49,432)
-693234
1,130,314
OTHER OPERATING INCOME 34 595,770
PROFIT FROM OPERATIONS 1726084
FINANCE COST 35 (1,037,294)
PROFIT BEFORE TAXATION 688790
TAXATION 36 (200,939)
PROFIT AFTER TAXATION 487851
EARNINGS PER SHARE - BASIC AND DILUTED (Rupees) 40 2.20
The annexed notes from an integral part of these financial statement
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2010
thousand)
10,693,338
(8,692,529)
2000809
(397,818)
195,103
(37,323)
-630244
1,370,565
78,651
1449216
(1,072,768)
376448
(98,587)
277861
1.91
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Statement of Comprehensive incomeFor the year ended june 30, 2011
PROFIT AFTER TAXATION
OTHER COMPREHENSIVE INCOME / (LOSS)
Surplus arising on remeasurement of available for sale investment to fair value
Reclassification adjustment for gain included in profit and loss
Deferred income tax relating to surplus on available for sale investment
Other comprehensive income / (loss) for the year - net of tax
TOTAL COMPREHENSIVE INCOM FOR THE YEAR
The annexed notes from an integral part of these financial statement
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Cash Flow StatementFor the year ended June 30, 2011 2011 2010
Note (Rupees in thousand)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations 37 2,998,394 674,317
Finance cost paid -1,094,698 -968,040
Workers profit participation fund paid -13,397
Income tax paid -162,285 -108,787
Net increase in long term deposits -871 -1,270
Net cash generated from / (used in) operating activities 1,727,143 -403,780
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditure on property, plant and equipment -177891 -281042
Capital expenditure on intangible asset -9836 -
Payment for non-current assets classified as held for sale - -51261
Investments made -174 -200
Return on bank deposits received 1363 934
Proceeds from sale of property, plant and equipment 13132 7765Proceeds from sale of investments 8715 -
Proceeds from sale of non current-assets classified as held for sale 119200 -
Advance against purcahse of land received back 100000 -
Dividend received 16263 13222
Net cash from / (used in) investing activities 70772 -310582
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long term financing 150000 -
Repayment of long term financing -595077 -420840
Short term borrowings - net -940170 1259964
Repayment of liabilities against assets subject to finance lease -70523 -90286
Repayment of lease finance advance - -35922
Net cash (used in) / from financing activities -1455770 712916
Net increase / (decrease) in cash and cash equivalents 342,145 -1,446
Cash and cash equivalents at the beginning of the year 78851 80297
Cash and cash equivalents at the end of the year 420,996 78,851
The annexed notes form an integral part of these financial statements
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Statement of Changes in EquityFor the year ended June 30, 2011
Share
premium
Fair vlue
reserve
Balance as at 30 June 2009 1455262 144919 438417
Total comprehensive income for the year ended 30 June 2010 - - 24066
Balance as at 30 June 2010 1455262 144919 462483
Ordinary shares issued other than through a Right issue during the year ended 30 June 2011 1000000 - -
Total comprehensive income for the year ended 30 June 2011 - - -462483
Balance as at 30 June 2011 2455262 144919 0
The annexed notes form an integral part of these financial statements
Share
Capital
Capital Reserves
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Sub-
total
General
reserve
Unappropriat
ed
profit/
(accumulated
loss)
Sub- total
583336 1450491 -429748 1020743 1604079 3059341
24066 - 277861 277861 301927 301927
607402 1450491 -151887 1298604 1906006 3361268
- - - - - 1000000
-462483 - 487851 487851 25368 25368
144919 335964 1786455 1931374 4386636
Reserves Total
Equity
Revenue Reserves Total
Reserves
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Notes to the Financial StatementsFor the year ended June 30, 20111 THE COMPANY AND ITS OPERATIONSKohinoor Textile Mills Limited is a public limited company incorporated in Pakistan under the Companies Act,1913 (now
Companies Ordinance, 1984) and listed on all Stock Exchanges in Pakistan. The registered office of the Company is situated
at 42-Lawrence Road, Lahore. The principal activity of the Company is manufacturing of yarn and cloth, processing and
stitching the cloth and trade of textile products.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied in the preparation of these financial statements are set out below. These policies
have been consistently applied to all years presented, unless otherwise stated:
2.1 Basis of Preparation
a) Statement of ComplianceT ese inancia statements ave een prepare in accor ance wit approve accounting stan ar s as app ica e in Pa istan.
Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board as are notified under the Companies Ordinance, 1984, provisions of and directives
issued under the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the Companies
1984 shall prevail.
b) Accounting Convention
These financial statements have been prepared under the historical cost convention, except for the certain financial
instruments, investment properties and freehold land which are carried at their fair values. These financial statements
represent separate financial statements of the Company. The consolidated financial statements of the Group are being
c)Critical accounting estimates and judgments
e prepara on o nanc a s a emen s n con orm y w e approve accoun ng s an ar s requ res e use o cer a n
critical accounting estimates. It also requires the management to exercise its judgment in the process of applying the
Companys accounting policies. Estimates and judgments 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 where various assumptions and estimates are significant to the Companys financial statements or where judgments
were exercised in application of accounting policies are as follows:
Financial instruments
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques
based on assumptions that are dependent on conditions existing at balance sheet date.
Useful lives, patterns of economic benefits and impairmentsEstimates wit respect to resi ua va ues, use u ives an pattern o ow o economic ene its are ase on t e ana ysis o
the management of the Company. Further, the Company reviews the value of assets for possible impairment on an annual
basis. Any change in the estimates in the future might affect the carrying amount of respective item of property, plant and
equipment, with a corresponding effect on the depreciation charge and impairment.
Inventories
Net realizable value of inventories is determined with reference to currently prevailing selling prices less estimated
expenditure to make sales.
Taxation
In making the estimates for income tax currently payable by the Company, the management takes into account the currentincome tax law and the decisions of appellate authorities on certain issues in the past.
Provisions for doubtful debts
The Company reviews its receivable against any provision required for any doubtful balances on an ongoing basis. The
provision is made while taking into consideration expected recoveries, if any.
Impairment of investments in subsidiary companies
In making an estimate of recoverable amount of the companys investments in subsidiary companies, the management
considers future cash flows.
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d)Amendments to published approved standards that are effective in current year and are relevant to the Company
The following amendments to published approved standards are mandatory for the Companys accounting periods
beginning on or after 01 July 2010:,
periods beginning on or after 01 January 2010). The amendment provides clarification that the potential settlement of a
liability by the issue of equity is not relevant to its classification as current or non-current. By amending the definition of
current liability, the amendment permits a liability to be classified as non-current (provided that the entity has an
unconditional right to defer settlement by transfer of cash or other assets for at least 12 months after the accounting period)notwithstanding the fact that the entity could be required by the counterparty to settle in shares at any time. The
application of the amendment does not affect the results or net assets of the Company as it is only concerned with
IAS 7 (Amendment), Statement of Cash Flows (effective for annual periods beginning on or after 01
January 2010). The amendment provides clarification that only expenditure that results in a recognized
asset in the balance sheet can be classified as a cash flow from investing activity. The clarification
results in an improvement in the alignment of the classification of cash f lows from investing activities
in the cash flow statement and the presentation of recognized assets in the balance sheet. The
application of the amendment does not affect the results or net assets of the Company as it is only
concerned with presentation and disclosures.
IFRS 8 (Amendment), Operating Segments (effective for annual periods beginning on or after 01
January 2010). The amendment is part of the International Accounting Standards Boards (IASB)annual improvements project published in April 2009. The amendment provides clarification that the
requirement for disclosing a measure of segment assets is only required when the Chief Operating
Decision Maker (CODM) reviews that information. The application of the amendment does not affect
the results or net assets of the Company as it is only concerned with presentation and disclosures.
e)Interpretations and amendments to published approved standards that are effective in current year but not relevant to tThere are other new interpretations and amendments to the published approved standards that are mandatory for
accounting periods beginning on or after 01 July 2010 but are considered not to be relevant or do not have any significant
impact on the Companys financial statements and are therefore not detailed in these financial statements.
f)Standards and amendments to published approved standards that are not yet effective but relevant to the Company
Following standards and amendments to existing standards have been published and are mandatory for the Companys
accounting periods beginning on or after 01 July 2011 or later periods:IFRS 9 Financial Instruments (effective for annual periods beginning on or after 01 January 2013). This standard is the first
step in the process to replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 introduces new
requirements for classifying and measuring financial assets and is likely to affect the Companys accounting for its financial, .
The new disclosure requirements apply to transfer of financial assets. An entity transfers a financial asset when it transfers
the contractual rights to receive cash flows of the asset to another party. These amendments are part of the IASBs
comprehensive review of off balance sheet activities. The amendments will promote transparency in the reporting of
transfer transactions and improve users understanding of the risk exposures relating to transfers of financial assets and the
effect of those risks on an entitys financial position, particularly those involving securitization of financial asset. The
management of the Company is in the process of evaluating the impacts of the aforesaid amendment on the Companys
IFRS 10 Consolidated Financial Statements (effective for annual period beginning on or after 01 January
2013). Concurrent with the issuance of IFRS 10, the IASB has also issued IFRS 11 Joint Arrangements,IFRS 12 Disclosure of Interests in Other Entities, IAS 27 (revised 2011) Consolidated and Separate
Financial Statements and IAS 28 (revised 2011) Investments in Associates. The objective of IFRS
10 is to have a single basis for consolidation for all entities, regardless of the nature of the investee,
and that basis is control. The definition of control includes three elements: power over an investee,
exposure or rights to variable returns of the investee and the ability to use power over the investee
to affect the investors returns. IFRS 10 replaces those parts of IAS 27 Consolidated and Separate
Financial Statements that address when and how an investor should prepare consolidated financial
statements and replaces Standing Interpretations Committee (SIC) 12 Consolidation Special Purpose
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Entities in its entirety. The management of the Company is in the process of evaluating the impacts of
the aforesaid standard on the Companys financial statements.
IFRS 12 Disclosure of Interests in Other Entities (effective for annual period beginning on or after 01
January 2013). IFRS 12 applies to entities that have an interest in subsidiaries, joint arrangements,
associates or unconsolidated structured entities. IFRS 12 establishes disclosure objectives and
specifies minimum disclosures that an entity must provide to meet those objectives. IFRS 12 requires
an entity to disclose information that helps users of its f inancial statements evaluate the nature ofand risks associated with its interests in other entities and the effects of those interests on its financial
statements. The management of the Company is in the process of evaluating the impacts of the
aforesaid standard on the Companys financial statements.
IFRS 13 Fair Value Measurement (effective for annual period beginning on or after 01 January
2013). IFRS 13 establishes a single framework for measuring fair value where that is required by
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he Company
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2.6 Investment propertiesLand and buildings held for capital appreciation or to earn rental income are classified as investment properties. Investment
properties are carried at fair value which is based on active market prices, adjusted, if necessary, for any difference in the
nature, location or condition of the specific asset. The valuation of the properties is carried out with sufficient regularity.
Gain or loss arising from a change in the fair value of investment properties is included in the profit
and loss account currently.
2.7 Intangible assets
n ang e asse s, w c are non-mone ary asse s w ou p ys ca su s ance, are recogn ze a cos , w c compr sepurchase price, non-refundable purchase taxes and other directly attributable expenditure relating to their implementation
and customization. After initial recognition an intangible asset is carried at cost less accumulated amortization and
impairment losses, if any. Intangible assets are amortized from the month, when these assets are available for use, using the
straight line method, whereby the cost of the intangible asset is amortized over its estimated useful life over which economic
benefits are expected to flow to the Company. The useful life and amortization method is reviewed and adjusted, if
2.8 Investments
Classification of investment is made on the basis of intended purpose for holding such investment. Management determines
the appropriate classification of its investments at the time of purchase and
re-evaluates such designation on regular basis.
Investments are initially measured at fair value plus transaction costs directly attributable to acquisition, except for
investment at fair value through profit and loss which is initially measured at fair value.
The Company assesses at the end of each reporting period whether there is any objective evidence that investments are
impaired. If any such evidence exists, the Company applies the provisions of IAS
39 Financial Instruments: Recognition and Measurement to all investments, except investments in subsidiary companies,
which are tested for impairment in accordance with the provisions of IAS 36
Impairment of Assets.
a) Investment at fair value through profit or lossInvestment classified as held-for-trading and those designated as such are included in this category. Investments are
classified as held-for-trading if these are acquired for the purpose of selling in the short term. Gains or losses on investments
held-for-trading are recognised in profit and loss account.
b) Held-to-maturitynves men s w xe or e erm na e paymen s an xe ma ur y are c ass e as e - o-ma ur y w en e ompany
has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not
included in this classification. Other long term investments that are intended to be held to maturity are subsequently
measured at amortized cost. This cost is computed as the amount initially recognised minus principal repayments, plus or
minus the cumulative amortization, using the effective interest method, of any difference between the initially
c)Available-for-salenves men s n en e o e e or an n e n e per o o me, w c may e so n response o nee or qu y, or
changes to interest rates or equity prices are classified as available-for-sale. After initial recognition, investments which are
classified as available-for-sale are measured at fair value. Gains or losses on available-for-sale investments are recognized
directly in statement of other comprehensive income until the investment is sold, de-recognized or is determined to be
impaired, at which time the cumulative gain or loss previously reported in statement of other comprehensive income is
Quoted
For investments that are actively traded in organized capital markets, fair value is determined by reference to stock
exchange quoted market bids at the close of business on the balance sheet date.Unquoted
Fair value of unquoted investments is determined on the basis of appropriate valuation techniques as allowed by IAS 39
Financial Instruments: Recognition and Measurement.
d)Investment in Subsidiary companies
Investments in subsidiary companies are stated at cost less impairment loss, if any, in accordance with the provisions of IAS
27 Consolidated and Separate Financial Statements.
2.9 Inventories
determined as follows:
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s.
e date of bill of lading.
s applicable thereon.
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2.16 Financial instrumentsnanc a ns rumen s carr e on e a ance s ee nc u e nves men s, epos s, ra e e s, a vances, n eres accrue ,
other receivables, cash and bank balances, long-term financing, liabilities against assets subject to finance lease, short-term
borrowings, accrued mark-up and trade and other payables etc. Financial assets and liabilities are recognized when the
Company becomes a party to the contractual provisions of instrument. Initial recognition is made at fair value plus
transaction costs directly attributable to acquisition, except for financial instrument at fair value through profit or lossnanc a asse s are e-recogn ze w en e ompany oses con ro o e con rac ua r g s a compr se e nanc a
asset. The Company loses such control if it realizes the rights to benefits specified in contract, the rights expire or the
Company surrenders those rights. Financial liabilities are de-recognized when the obligation specified in the contract is
discharged, cancelled or expired. Any gain or loss on subsequent measurement (except available for sale investments) and de-
recognition is charged to the profit or loss currently. The particular measurement methods adopted are disclosed in the
following individual policy statements associated with each item and in the accounting policy of investments.
a) Trade and other receivables
Trade debts and other receivables are carried at original invoice value less an estimate made for doubtful debts based on a
review of all outstanding amounts at the year end. Bad debts are written off when identified.
b)Borrowings
proceeds and the redemption value is recognized in the profit and loss account over the period of the borrowings using the
effective interest method.
c)Trade and other payables
Liabilities for trade and other amounts payable are initially recognized at fair value, which is normally the transaction cost.
2.17 Impairment
a)Financial assets
A financial asset is considered to be impaired if objective evidence indicate that one or more events had a negative effect on
the estimated future cash flow of that asset.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as a difference between its
carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate. An
impairment loss in respect of available for sale financial asset is calculated with reference to its current fair value.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are
assessed collectively in groups that share similar credit risk characteristics.
b)Non financial assetse carry ng amoun o asse s are rev ewe a eac a ance s ee a e or mpa rmen w enever even s are c anges n
circumstances indicate that the carrying amounts of the assets may not be recoverable. If such indication exists, and where
the carrying value exceeds the estimated recoverable amount, assets are written down to their recoverable amounts.
Recoverable amount is the higher of an assets fair value less costs to sell and value in use. The resulting impairment loss is
taken to the profit and loss account except for impairment loss on revalued assets, which is adjusted against the related
revaluation surplus to the extent that the impairment loss does not exceed the surplus on revaluation of that asset.
2.18 Segment reportingegmen repor ng s ase on e opera ng us ness segmen s o e ompany. n opera ng segmen s a componen o
the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues
and expenses that relate to the transactions with any of the Companys other components. An operating segments
operating results are reviewed regularly by the chief executive officer to make decisions about resources to be allocated to
the segment and assess its performance, and for which discrete financial information is available.
Segment results that are reported to the chief executive officer include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Those income, expenses, assets, liabilities and other balances which can
not be allocated to a particular segment on a reasonable basis are reported as unallocated.
The Company has three reportable business segments. Spinning (Producing different quality of yarn using natural and
artificial fibers), Weaving (Producing different quality of greige fabric using yarn) and Processing and Home Textile
(Processing greige fabric for production of printed and dyed fabric and manufacturing of home textile articles).
Transaction among the business segments are recorded at arms length prices using admissible valuation methods. Inter
segment sales and purchases are eliminated from the total.
2.19 Dividend and other appropriations
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3. ISSUED SUBSCRIBED AND PAID UP SHARE CAPITAL
2011 2010
1,596,672 1,596,672
26,156,000 26,156,000
26,858,897 26,858,897
38,673,628 38,673,628
152,241,019 52,241,019
245,526,216 145526216
3.1 Movment during the year
145,526,216 145,526,216
100,000,000
245,526,216 145,526,216
3.2)During the period, the Company has issued
100,000,000 ordinary shares of Rupees 10 each at
face value of Rupees 10 per share otherwise than
right issue to Mercury Management Incorporated
(25 million shares), Hutton Properties Limited (52
million shares) and Zimpex (Private) Limited (23
million shares) in accordance with the agreement
dated 10 March 2010 among the three allottees,
the Company and Maple Leaf Cement Factory
Limited subsidiary company after the approval
of Securities and Exchange Commission of
Pakistan.
3.3)Zimpex (Private) Limited which is an associated company held 45,496,057 (2010
shares of Rupees 10 each as at 30 June 2011.
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2011 2010
(Rupee in thousand)
Ordinary shares of Rupees 10 each allotted on reorgani 15,967 15,967
Ordinary shares allotted under scheme ofarrangement of merger of Part II of Maple Leaf
Electric Company Limited
261,560 261,560
Ordinary shares allotted under scheme of
arrangement of merger of
Kohinoor Raiwind Mills Limited and
Kohinoor Gujar Khan Mills Limited.
268,589 268,589
Ordinary shares of Rupees 10 each issued
as fully paid bonus shares
386,736 386,736
Ordinary shares of Rupees 10 each issuedas fully paid in cash
1,522,410 522,410
2455262 1455262
At 01 July 1,455,262 1,455,262
Ordinary shares of Rupees 10 each issued
during the year as fully paid
1,000,000
At 30 June 2,455,262 1,455,262
: 22,510,635) ordinary
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2011 2010
6.LONG TERM FINANCING Note (Rupee in thousand)
From banking companies and other financial
institutions - secured
NIB Bank Limited (NIB - 1) 6.1 31,836 107,716
NIB Bank Limited (NIB - 2) 6.2 150,006 198,803NIB Bank Limited (NIB - 3) 6.3 100,000
NIB Bank Limited (NIB - 4) 6.4 50,000
Allied Bank Limited (ABL -1 ) 6.5 7,232 65,094
Saudi Pak Industrial and Agricultural Investment
Company Limited (SPIAICL-3) 6.6 125,000 156,250
Standard Chartered Bank (Pakistan) Limited
- syndicated term finance 6.7 167,085 186,500
Allied Bank Limited - syndicated term finance 6.7 456,413 543,150
The Bank of Khyber - syndicated term finance 6.7 80,250 95,500
Pak Libya Holding Company Limited - syndicated term finance 6.7 40,125 47,750
Bank Al falah Limited - syndicated term finance 6.7 417,500 477,500
Faysal Bank Limited - syndicated term finance 6.7 250,500 279,750
The Bank of Punjab (BOP - 1) - 26,623
Albaraka Bank (Pakistan) Limited - 8,333
Saudi Pak Industrial and Agricultural Investment
Company Limited (SPIAICL-1) - 18,055
Saudi Pak Industrial and Agricultural Investment
Company Limited (SPIAICL-2) - 10,000
Standard Chartered Bank (Pakistan) Limited (SCB-2) - 100,000
1,875,947 2,321,024
Less:Current portion shown under current liabilities 12 564,714 700,434Other loans - unsecured 1,311,233 1,620,590
Kohinoor Sugar Mills Limited (KSML) 6.11 4,794 4,794
Kohinoor Industries Limited (KIL) 6.12 2,683 2,683
7,477 7,477
1,318,710 1,628,067
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Company.
6.9 Kohinoor Industries Limited (KIL)
The balance is an old one, un-reconciled, unconfirmed and disputed.
6.10 Current portion of long term financing include overdue installments amounting to Rupees 32.678 million (2010 : Rupees
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2011
Note (Rupee in
7.LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE
Future minimum lease payments 101,238
Less: Un-amortized finance charges 11,365
Present value of future minimum lease payments 89,873
Less: Current portion shown under current liabilities 12 47,03042,843
7.1 The future minimum lease payments have been discounted at implicit interest rates
which range from 6.00 % to 18.85% (2010: from 6.00% to 18.00%) per annum to arrive at
their present values. The lease rentals are payable in monthly and quarterly installments.
In case of any default, an additional charge at the rate of 0.1 percent per day shall be
payable. Taxes, repairs, replacements and insurance costs are to be borne by the
Company. The lease agreements carry renewal and purchase option at the end of the
lease term. There are no financial restrictions in lease agreements. These are secured by
deposit of Rupees 22.098 million (2010: Rupees 21.065 million) included in long term
deposits, demand promissory notes, personal guarantees and pledge ofsponsors shares
in public limited companies.8.DEFERRED INCOME TAX
This comprises of following :
Deferred tax liability on taxable temporary differences in respect of:
- Accelerated tax depreciation 394,104
- Surplus on revaluation of investment -
394,104
Deferred tax asset on deductible temporary differences in respect of:
Unused tax losses 331,963
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2010
thousand)
155,263
20,233
135,030
68,02567,005
329,260
164,613
493,873
335,877
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2011 2010
Note (Rupee in thousand)
9.TRADE AND OTHER PAYABLES
Creditors 615,087 788,562
Accrued liabilities 128,401 151,067
Advances from customers 11,089 18,593
Workers profit participation fund 9.1 20,905 21,669
Workers welfare fund 7,686 7,686
Unclaimed dividend 2,681 2,681
Withholding tax payable 4,629 2,715
Payable to employees provident fund trust 36,287 42,096
Others 7,926 5,188
834,691 1,040,257
9.1 Workers profit participation fund
Balance as on 01 July 21,669 1,254
Add: Interest for the year 35 2,445 188
Provision for the year 33 10,188 20,227Less: Payments during the year -13,397
20,905 21,669
9.1.1The Company retains workers profit participation fund for its business
operations till the date of allocation to workers. Interest is paid at
prescribed rate under the Companies Profit (Workers Participation) Act,
1968 on funds utilized by the Company till the date of allocation to workers
10.ACCRUED MARK-UP
Long term financing 88,006 119,580
Short term borrowings 140,535 167,594
Liabilities against assets subject to finance lease 1,597 2,813
230,138 289,987
11.SHORT TERM BORROWINGS
From banking companies - secured
Short term running finances 11.1 1,879,564 2,285,452
Other short term finances 11.2 1,815,701 2,200,553
State Bank of Pakistan (SBP) refinances 11.3 1,435,000 1,555,000
Temporary bank overdraft - 29,430
5,130,265 6,070,435
11.1 The running finance facilities sanctioned by various banks aggregate to
Rupees 2,184 million (2010: Rupees 2,390 million). The rates of mark-uprange from 3.49% to 21.90% (2010: from 3.23% to 25%) per annum. These
arrangements are secured by pledge of raw material, charge on current
assets of the Company including hypothecation of work-in-process, stores
and spares, letters of credit, firm contracts, book debts and personal
guarantees of the sponsor directors.
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13. CONTINGENCIES AND COMMITMENTS
13.1 Contingencies
b) The Company has filed an appeal before the Appellate Tribunal Inland
Revenue under section 122(5A)
/ 122(1) / 129 of Income Tax Ordinance, 2001 for tax year 2004 which is
pending adjudication. The
loss for the year has been assessed at Rupees 255.886 million against
declared loss of Rupees 255.886
million creating refund of Rupees 7.498 million. Department has also filed
cross appeal mainly on issue
of chargeability of 3.5% tax on local purchases amounting to Rupees
955.547 million. The Company
has strong grounds and is expecting favourable outcomec)The Company has filed an appeal before the Appellate Tribunal Inland
Revenue under section 122(5A)
/ 122(1) / 129 of Income Tax Ordinance, 2001 for tax year 2005, which is
pending adjudication. The
Income for the year has been assessed at Rupees 113.440 million against
declared loss of Rupees
205.576 million creating payable of Rupees 74.576 million. Department
has also filed cross appeal
mainly on issue of chargeability of 3.5% tax on local purchases amounting
to Rupees 828.839 million.
The Company has strong grounds and is expecting favourable outcome.d) The Company and the tax authorities have filed appeals before
different appellate authorities regarding sales tax matters. Pending the
outcome of appeals filede e ompany as e recovery su s n c v cour s o upees .
million (2010: Rupees 4.589 million) against various suppliers and
customers for goods supplied by/ to them. Pending the outcome of the
cases, no provision there against has been made in these financial
statements since the Company is confident about favourable outcome of
the cases.ree cases are pen ng e ore e un a a our ppe a e r una ,
Shadman 1, Lahore regarding the reinstatement into service of three
employees dismissed from their jobs. No provision has been made in
these financial statements, since the Company is confident about
favourable outcome of the cases.
g) Guarantees issued by various commercial banks, in respect of financial
and operational obligations of the Company, to various institutions and
corporate bodies aggregate Rupees 249.620 million as at
30 June 2011 (2010: Rupees 248.962 million)
13.2 Commitments in respect of:
a) The Company has filed an appeal before AppellateTribunal Inland
Revenue, Lahore for tax year 2003 under section 129/132 of Income Tax
Ordinance, 2001, which is pending adjudication. The tax loss was
restricted to Rupees 27.540 million against declared loss of Rupees
122.933 million. In addition to the above, another appeal for tax year2003 against order under section 221 dated 24 January
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a) Letters of credit for capital expenditure amount to Rupees Nil (2010:
Rupees 38.865 million).
b) Letters of credit other than for capital expenditure amount to
Rupees 42.070 million (2010: Rupees
325.393 million).
2011 2010
(Rupee in thousand)
14. PROPERTY, PLANT AND EQUIPMENT
Operating fixed assets (Note 14.1) 6,745,943 6,409,975
Capital work in progress (Note 14.4) 1,748 86,324
6,747,691 6,496,299
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14.1 Operating fixed Assets
Freehold
land
Office
Building
Factory and Residential and Plant and
Machinery
Other Building Other Building
----------------------------------------------------------------------------------------------------- (Rupees in thousand) ---------
At 30 June 2009
Cost 14,836 12,734 870,159 98,808 4,793,224Accumulated depreciation -5,078 -351,972 -35,102 -1,842,164
Net book value 14,836 7,656 518,187 63,706 2,951,060
Year ended 30 June 2010
Opening net book value 14,836 7,656 518,187 63,706 2,951,060
Revaluation surplus 2,410,233
Additions 1,442 28,949 7,924 216,689
Transfer:
Cost 173,260
Accumulated depreciation -60,029
113,231
Disposals:Cost -9425
Accumulated depreciation 8680
-745
Depreciation charge -444 -43,075 -3,912 -273,014
Closing net book value 2,425,069 8,654 504,061 67,718 3,007,221
Year ended 30 June 2011
Opening net book value 2,425,069 8,654 504,061 67,718 3,007,221
Revaluation surplus 11,672
Additions 71,944 5,853 172,647
Transfer
Cost 399673 182807
Accumulated depreciation -66247
399673 116560
Disposals:
Cost -3228
Accumulated depreciation 945
-2283
Depreciation charge -452 -41,517 -4,039 -271,106
Closing net book value 2,836,414 8,202 534,488 69,532 3,023,039
At 30 June 2011
Cost / revalued amount 2,836,414 14,176 971,052 112,585 5,525,974
Accumulated depreciation -5,974 -436,564 -43,053 -2,502,935
2,836,414 8,202 534,488 69,532 3,023,039
Depreciation rate (%) - 5 10-May 10-May 10
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14.2 Detail of operating fixed assets, exceeding the book value of Rupees 50,000 disposed of during the year is as
Particulars Cost Accumulated Net book Sale Gain/ Mode of Particulars of purchaser
depreciation value proceed (Loss) disposal
Vehicle
Honda Civic
LEF 08-353
1,376 119 1,257 1,400 143 Negotiation Miss Bushra Naz Malik,
156-B, Shah Jamal, Lahore
Honda Civic
ARS-003
1,922 667 1,255 1,077 -178 Negotiation Abdul Hai Mahmood
Bhaimia, 12th street,
Khayaban-e-sehar, Phase
6, DHA Karachi
Honda
Reborn VTI
861 193 668 1,400 732 Insurance
claim
EFU General Insurance
Limited, Rawalpindi
Plant and
Machinery
Diesal
Generator
(Catterpilla
r
3,228 945 2,283 9,200 6,917 Negotiation Frontier Techwood
Industries, Lahore
7,387 1,924 5,463 13,077 7,614
Agrregate
of other
items of
property,
plant and
equipment
with
individual
values not
exceedin
Rupees
50,000
152 151 1 55 54 Negotiation
7,539 2,075 5,464 13,132 7,668
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2011 2010
Note (Rupee in thousand)
14.3 Depreciation charged during the year has been allocated as follows:
Cost of sales 30 338,107 350,778
Administrative expenses 32 19,638 20,840
357,745 371,618
14.4 Capital work in progressCivil works and buildings 105 67,593
Plant and machinery 1,643 18,731
1,748 86,324
15.INTANGIBLE ASSET
Computer software
Year ended 30 June 2011
O enin net book vlaue
- -
Addition 9836 -
Amortization -273 -
Closing net book value 9,563 -
Cost as at 30 June 2011 9,836 -
Accumulated amortization (273) -
Net book value 9,563 -
Amortization rate (per annum) 33.33% -
16.INVESTMENT PROPERTIES
Year ended 30 June
Opening net book amount
1,720,835 1,720,835
Fair value gain 879 -
Closing net book amount 1,721,714 1,720,835
16.1)The fair value of investment properties comprising land and building
situated at Lahore and Rawalpindi have been determined at 30 June 2011and 30 June 2010 by an independent valuer having relevant professional
qualifications. The fair value was determined on the basis of professional
assessment of the current prices in an active market for similar properties in
the same location and condition. No expenses directly related to invetrment
properties were incurred during the year.
17.1) During the period, the Company has made an investment of Rupees
999.710 million by subscribing
153,801,617 ordinary shares of Rupees 10 each of Maple Leaf Cement
Factory Limited - subsidiary
company vide agreement dated 10 March 2010 between Mercury
Management Incorporated, Hutton
Properties Limited, Zimpex (Private) Limited, Maple Leaf Cement FactoryLimited and Kohinoor Textile
Mills Limited, after approval of Securities and Exchange Commission of
Pakistan.
17.2) Based on value in use calculations as at 30 June 2011, there was no
impairment loss on investments in subsidiary companies (tested for
impairment under IAS 36 (Impairment ofAssets). The recoverable amount
of investment in Maple Leaf Cement Factory Limited - subsidiary company
was determined by an independent valuer.
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2011 2010
Note (Rupee in thousand)
21. TRADE DEBTS
Considered good:
Secured (against letters of credit) 166,654 747,285
Unsecured 540,746 581,780
707,400 1,329,065Considered doubtful:
Others - unsecured 2,274 0
- Less: Provision for doubtful debts
As at 01 July 0
- Add: Provision for the year 33 2,274 0
As at 30 June 2,274
0 0
21.1 As at 30 June 2011, trade debts of Rupees 493.844
million (2010 : Rupees 568.309 million) were past due but not
impaired. These relate to a number of independentcustomers from whom there is no recent history of default.
The ageing analysis of these trade debts is as follows:
Upto 1 month 293,516 433,697
1 to 6 months 167,262 116,664
More than 6 months 33,066 17,948
493,844 568,309
22. ADVANCES
Considered good:
Employees - interest free
- Executives 1,390 621
- Other employees 224 1,0401,614 1,661
Advances to suppliers 222,985 593,555
Letters of credit 16,732 1,579
241,331 596,795
23. SECURITY DEPOSITS AND SHORT TERM PREPAYMENTS
Current portion of long tern deposits 18 7,622 6,237
Short term prepayments 11,423 9,341
19,045 15,578
24. DUE FROM SUBSIDIARY COMPANIES
Maple Leaf Cement Factory Limited 24.1 63,636 14,987Concept Trading (Private) Limited 24.2 537,508
601,144 14,98724.1 T is inc u es a justment o sa es tax re un s o t e
company against sales tax liability of subsidiary company
including mark up thereon amounting to Rupees 45.512
million (2010 : Rupees Nil) and receivable against allocation
of pool expenses.
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24.2 This represents the receivable from Concept Trading
(Private) Limited - a wholly owned subsidiary company on
account of disposal of available for sale investment in
Security General Insurance Company Limited.
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Note 2011 (Rupees in 2010 housand)
25.OTHER RECEIVABLES
Considered good:
Sales tax refundable 242,402 260,161
Custom duty receivable 3,642 3,642
Mark up subsidy 11,689 -
Export rebate 42,664 47,561Insurance claims 281 175
Research and development support 472 473
Duty draw back 119,555 25,808
Cotton claim - 28,745
Others 12,238 20,376
432,943 386,941
26. SHORT TERM INVESTMENTS
Investments at fair value through profit or loss
Quoted companies 702 13,611
Loss on remeasurement of fair value during the year -102 -5,595
600 8016
26.1 During the current year, the Company has disposed of its
available for sale investment in Security General Insurance
Company Limited to Concept Trading (Private) Limited - a
wholly owned subsidiary company at a price of Rupees 84 per
share by considering the valuation report, prepared by Messers
Anjum Asim Shahid Rahman, chartered Accountants (Member
of Grant Thornton International) based on generally accepted
valuation method.
26.2 Security General Insurance Company Limited ceased to
be an associated company from 22 June 2011
27. CASH AND BANK BALANCES
Cash in hand 1,301 961
Cash at bank:
- On current accounts 98,651 65,217
- On saving accounts 321,044 12,673
419,695 77,890
420,996 78,851
28. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Land - 552,923
Advance against land - 100,000
652,923
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28.1 During the current year, the Company has disposed off
its land at M.M. Alam Road, Lahore at an amount of Rupees
119.200 million. Advance of Rupees 100 million for purchase of
land has been received back. Further, the Company has ceased
to classify the other land at Raiwind Road as held for sale after
managements assessment that the criteria prescribed by IFRS
5 Non-current Assets Held for Sale and Discontinued
Operations is no longer being met. Now, this land at Raiwind
Road has been classified as a non-current asset under the head
Property, Plant and Equipment in these financial statements
and is being carried at fair value in accordance with IAS 16
Property, Plant and Equipment.
29. SALES
Export 6,661,344 6,406,061
Local 29.1 5,213,062 4,189,295
Duty drawback 116,458 54,845
Export rebate 46,389 43,137
12,037,253 10,693,338
29.1 Local sales 5,213,384 4,189,295
Less: Sales tax 322
5,213,062 4,189,295
29.2 Exchange gain due to currency rate fluctuations relating
to export sales amounting to Rupees
15.966 million (2010: Rupees 35.245 million) has been included
in export sales.
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2011 2010
Note (Rupee in thousand)
30.COST OF SALES
Raw materials consumed
30.1 5,349,247 3,347,817
Cloth and yarn procured and consumed 1,443,577 2,464,620
Salaries, wages and other benefits 30.2 699,683 740,125
Dyes and chemicals consumed 341,963 518,965
Processing charges 13,508 12,267
Stores, spare parts and loose tools consumed 513,192 608,508
Packing materials consumed 325,142 374,847
Fuel and power 575,707 619,450
Repair and maintenance 55,592 59,445
Insurance 21,969 22,915
Other factory overheads 33,860 39,795
Depreciation 14.3 338,107 350,778
Work-in-process 9,711,547 9,159,532
Opening stock 891,618 546,792Closing stock -391,129 -891,618
500,489 -344,826
Cost of goods manufactured 10,212,036 8,814,706
Finished goods
O enin stock
736,946 614,769
Closing stock -735,277 -736,946
1,669 -122,177
Cost of sales 10,213,705 8,692,529
30.1 Raw material consumed
Opening stock 709,197 558,033
Add: Purchased during the year 4,997,799 3,498,9815,706,996 4,057,014
Less: Closing stock -357,749 -709,197
5,349,247 3,347,817
30.2 Salaries, wages and other benefits include provident fund
contribution of Rupees 16.631 million
s
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2011 2010
Note (Rupee in thousand)
31.DISTRIBUTION COST
Salaries and other benefits
31.1 39,374 39,011
Outward freight and handling 30,995 30,549
Clearing and forwarding 232,933 227,943
Travelling and conveyance 13,732 17,911
Insurance 505 348
Vehicles running expenses 3,389 3,252
Electricity, gas and water 910 808
Postage, telephone and fax 2,247 2,832
Legal and professional 80 -
Sales promotion and advertisement 13,804 16,726
Commission to selling agents 83,955 54,501
Miscellaneous expenses 3,139 3,937
425,063 397,818
31.1 Salaries and other benefits include provident fund contribution ofRupees 1.399 million (2010: Rupees
1.284 million) by the Company.
32.ADMINISTRATIVE EXPENSES
Salaries and other benefits
32.1 107,214 93,990
Travelling and conveyance 6,744 5,587
Repairs and maintenance 9,123 8,280
Rent, rates and taxes 7,061 9,001
Insurance 4,481 4,600
Vehicles running expenses 9,574 7,296
Printing, stationery and periodicals 4,115 4,359
Electricity, gas and water 2,506 2,589
Postage, telephone and fax 5,607 4,878
Legal and professional 5,895 4,433
Security, gardening and sanitation 20,424 19,813
Amortization 15 273 -
Depreciation 14.3 19,638 20,840
Miscellaneous expenses 16,084 9,437
218,739 195,103
32.1 Salaries and other benefits include provident fund contribution of
Rupees 3.008 million (2010: Rupees
2.800 million) by the Company.33. OTHER OPERATING EXPENSES
Auditors remuneration 33.1 1,608 1,265
Donations 33.2 451 8,100
Loss on disposal of land classified as held for sale 34,050
Loss on remeasurement of fair value of investments
at fair value through profit or loss 102
Provision for doubtful debts 2,274
Provision for slow moving stores and spares 744
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2011 2010
Note (Rupee in thousand)
34. OTHER OPERATING INCOME
Income from financial assets:
Exchange gain 5,570 19,261
Gain on disposal of investments at fair value through profit or loss 1,227 -Gain on disposal of investment - Security General Insurance
Company Limited 34.1 530,477
Gain on remeasurement of fair value of investments
at fair value through profit or loss - 1,869
Return on bank deposits 1,268 953
Dividend income 266 425
538,808 22,508
Income from related parties:
Dividend income - Security General Insurance Company Limited 15,997 12,797
Mark up on loan to Maple Leaf Cement Factory Limited 2,517 -
18,514 12,797
Income from non-financial assets:
Scrap sales 29,898 29,175
Gain on disposal of property, plant and equipment 14.2 7,668 6,049
Gain on remeasurement of fair value of investment property 879 -
Miscellaneous 3 8,122
38,448 43,346
595,770 78,651
34.1 This represents gain on disposal of available for sale investment in
Security General Insurance
Company Limited to Concept Trading (Private) Limited - a wholly owned
subsidiary company
35. FINANCE COST
Mark-up/finance charges/ interest on:
Long term financing 263,350 329,679
Short term borrowings 721,918 683,516
Liabilities against assets subject to finance lease 14,211 21,169
Workers profit participation fund (WPPF) 9.1 2,445 188
Employees provident fund trust 6,407 2,968
1,008,331 1,037,520
Bank charges and commission 28,963 35,248
1,037,294 1,072,768
36. TAXATION For the year
Current tax 36.1 132,181 83,824
Deferred tax 68,758 14,763
200,939 98,587
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36.1 Provision for current tax represents final tax on export sales,
minimum tax on local sales and tax on income from other sources under
the relevant provisions of the Income Tax Ordinance, 2001. Numeric tax
reconciliation has not been presented, being impracticable.
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2011
Note (Rupee in
37. CASH GENERATED FROM OPERATIONS
Profit before taxation 688,790
Adjustment for non-cash charges and other items:
Depreciation 357,745
Amortization 273Finance cost 1,034,849
Gain on sale of property, plant and equipment -7,668
Gain on disposal of investments at fair value through profit or loss -1,227
Gain on disposal of investment - Security General Insurance
Company Limited -530,477
Gain on remeasurement of investment property -879
Dividend income -16,263
Return on bank deposits -1,268
Provision for doubtful debts 2,274
Provision for slow moving stores and spares 744
Loss on disposal of non-current assets classified as held for sale 34,050
Gain / (loss) on remeasurement of investments at fair value
through profit or loss 102
Working capital changes 37.1 1,437,349
2,998,394
37.1 Working capital changes
(Increase) / decrease in current assets:
Stores, spare parts and loose tools 16,661
Stock-in-trade 735,861
Trade debts 619,391
Advances 355,464Security deposits and short term prepayments -3,467
Due from subsidiary companies -585,867
Other receivables 491,475
1,629,518
Increase / (decrease) in trade and other payables -192,169
1,437,349
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38. REMUNERATION OF CHIEF EXECUTIVE OFFICER,
DIRECTORS AND EXECUTIVES
2011 2010 2011 2010
-----------------------( Rupees in Thous
Managerial remuneration 4,920 5,300 5,157
Contribution to provident fund 315 308 158 154Housing and utilities - - 133 87
Medical - 84 1,229 1,246
Group insurance - - 95 92
Club subscription 67 64 - -
Others 189 185 - -
5,491 641 6,915 6,736
Number of persons 1 1 3 3
38.1 The Chief Executive Officer and directors are
provided with the Companys maintained vehicles, free
medical facilities and residential telephone facilities for
both business and personal use. Chief Executive Officer
is also provided with free furnished accommodation
alongwith utilities.
vehicles in accordance with the Company policy. The
70,000).
39. TRANSACTIONS WITH RELATED PARTIES
Subsidiary companies
2011 2010 (Rupees in thousand)
Purchase of goods and services 479 484
Sale of goods and services - 147
Purchase of property, plant and equipment - 1,770
Sale of property, plant and equipment 204 419
Purchase of shares - 200
Associated Company
Dividend income 15,997 12,797
Post employment benefit plan
Contribution to provident fund 21,038 20,897
Other related parties
Sale of vehicles 2,477
Chief Executive Officer Directors
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40.EARNINGS PER SHARE - BASIC AND DILUTED
There is no dilutive effect on the basic earning per share which is based on: 2011
Profit attributable to ordinary shares Rupees in thousand 487,851
Weighted average number of ordinary shares Numbers 221,964,572
Earnings per share Rupees 2.2
41. PLANT CAPACITY AND ACTUAL PRODUCTION
SPINNING:
- Rawalpindi Division (Numbers)
Spindles (average) installed / worked 85,680
(Kilograms in
100% Plant capacity converted into 20s count based on
3 shifts per day for 1,095 shifts (2010: 1,095 shifts) 33,620
Actual production converted into 20s count based on
3 shifts per day for 1,095 shifts (2010: 1,095 shifts) 23,547
- Gujar Khan Division (Numbers)
Spindles (average) installed / worked 70,848
2011
(Kilograms in thou
100% Plant capacity converted into 20s count based on 32,042
3 shifts per day for 1,095 shifts (2010: 1,095 shifts )
Actual production converted into 20s count based on 25,989
3 shifts per day for 1,095 shifts (2010: 1,095 shifts) (Numbers)
WEAVING:
- Raiwind Division
Looms installed / worked 204(Square mete
100% Plant capacity at 60 picks based on 3 shifts per 72,568
day for 1,095 shifts (2010: 1,095 shifts)
Actual production converted to 60 picks based on 66,580
3 shifts per day for 1,072 shifts (2010: 1,072 shifts)
PROCESSING OF CLOTH:
- Rawalpindi Division (Meters in thous
Capacity at 3 shifts per day for 1,095 shifts (2010: 1,095 shifts) 41,975
Actual at 3 shifts per day for 1,095 shifts (2010: 1,095 shifts) 21,367
POWER PLANT:
Annual rated capacity (based on 365 days) Actual generation 207,787
Main engines 884
Gas engines 60,935
- Raiwind Division
Annual rated capacity (based on 365 days) 54,460
Actual generation
Gas engines 22,432
- Rawalpindi Division (Mega Watts)
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42. SEGMENT INFORMATION
42.1 2011 2010 2011 2010
(------------------------------------------------ ( R u p e
SALES 5,508,677 4,822,128 3,917,979 3,079,523
COST OF SALES -4,667,274 -3,599,136 -3,375,707 -2,698,019
GROSS PROFIT 841,403 1,222,992 542,272 381,504
DISTRIBUTION COST -16,650 -16,234 -70,903 -57,076
ADMINISTRATIVE EXPENSES -74,787 -64,130 -68,961 -60,939
-91,437 -80,364 -139,864 -118,015
PROFIT BEFORE TAX AND UNALLOCATED
INCOME AND EXPENSES
749,966 1,142,628 402,408 263,489
UNALLOCATED INCOME AND EXPENSES
FINANCE COST
OTHER OPERATING EXPENSES
OTHER OPERATING INCOME
TAXATION
PROFIT AFTER TAXATION
42.2 Reconciliation of reportable segment assets and liabilities
2011 2010 2011 2010
(------------------------------------------ ( R u p e e s i
TOTAL ASSETS FOR REPORTABLE SEGMENT 2,741,104 2,399,058 2,187,389 1,211,488
UNALLOCATED ASSETS
TOTAL ASSETS AS PER BALANCE SHEET
All segment assets are allocated to reportable segments other than those
directly relating to corporate and tax assets
TOTAL LIABILITIES FOR REPORTABLE SEGMENT 998,668 1,142,941 1,860,641 1,927,037
UNALLOCATED LIABILITIES
TOTAL LIABILITIES AS PER BALANCE SHEET
Spinning Weaving
Spinning Weaving
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2011 2010 2011 2010 2011 2010
e s in t h o u s a n d ) -----------------------------------------------)-
5,463,823 5,474,514 -2,853,226 -2,682,827 12,037,253 10,693,338
-5,023,950 -5,078,201 2,853,226 2,682,827 -10,213,705 -8,692,529
439,873 396,313 0 0 1,823,548 2,000,809
-337,510 -324,508 -425,063 -397,818
-74,991 -70,034 -218,739 -195,103
-412,501 -394,542 0 0 -643,802 -592,921
27,372 1,771 0 0 1,179,746 1,407,888
-1,037,294 -1,072,768
-49,432 -37,323
595,770 78,651
-200,939 -98,587
-691,895 -1,130,027487,851 277,861
2011 2010 2011 2010
n t h o u s a n d ) --------------------------------------)-
2,707,311 2,973,709 7,635,804 6,584,255
8,666,861 10,473,044
16,302,665 17,057,299
4,257,469 5,386,980 7,116,778 8,456,958
1,113,754 1,565,248
8,230,532 10,022,206
Company
Processing and home textile Company
Processing and home textileElimination of inersegment
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43.FINANCIAL RISK MANAGEMENT
43.1 Financial risk factorse ompany s ac v es expose o a var e y o nanc a r s s: mar e r s nc u ng
currency risk, other price risk and interest rate risk), credit risk and liquidity risk. The
Companys overall risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the Companys
financial performance. The Company uses derivative financial instruments to hedge
certain risk exposures.
Risk management is carried out by the Companys finance department under policies
approved by the Board of Directors. The Companys finance department evaluates and
hedges financial risks. The Board provides principles for overall risk management, as
well as policies covering specific areas such as currency risk, other price risk, interest
rate risk, credit risk, liquidity risk, use of derivative financial instruments and non
derivative financial instruments and investment of excess liquidity.
a) Market risk
(i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in foreign exchange rates. Currency riskarises mainly from future commercial transactions or receivables and payables that
exist due to transactions in foreign currencies.
The Company is exposed to currency risk arising from various currency exposures,
primarily with respect to the United States Dollar (USD) and Euro. Currently, the
Companys foreign exchange risk exposure is restricted to bank balances, the amounts
receivable / payable from / to the foreign entities. The Company uses forward
exchange contracts to hedge its foreign currency risk, when considered appropriate.
The Companys exposure to currency risk was as follows:
(a) Market risk
Cash at banks - USD 218,000
Trade debts - USD 4,485,184
Trade debts - Euro -
Trade and other payable - USD 57,000
Net exposure - USD 4,646,184
Net exposure - Euro -
The following significant exchange rates were applied
during the year
Rupees per US Dollar
Average rate 85.25
Reporting date rate 86.05
Rupees per EuroAverage rate 114.54
Reporting date rate 124.89
Index Impact on profit
2011
--------------- (RUPEES IN TH
KSE 100 (5% increase) 28
KSE 100 (5% decrease) 28
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(iii) Interest rate risks represen s e r s a e a r va ue or u ure cas ows o a nanc a
instrument will fluctuate because of changes in market interest rates.The Company
has no significant long-term interest-bearing assets. The Companys interest rate risk
arises from long term financing, liabilities against assets subject to finance lease and
short term borrowings. Financial instruments obtained at variable rates expose the
Company to cash flow interest rate risk. Financial instruments obtained at fixed rate
expose the Company to fair value interest rateAt the balance sheet date the interest rate profile of the Companys interest bearing
financial instruments was:
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37,000
11,864,000
832,000
30,000
11,871,000
832,000
83.55
85.4
107.92
104.33
after taxation Impact on statement comprehensive income
2010 2011 2010
USAND) -----------------
401
-401
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2011 2010
(Rupee in thousand)
Fixed rate instruments
Financial liabilities
Long term financing 196,551 407,742
Short term borrowings 1,435,000 1,555,000
Floating rate instrumentsFinancial assets
Bank balances- saving accounts 321,044 12,673
Financial liabilities
Long term financing 1,686,873 1,920,759
Short term borrowings 3,695,265 4,515,435
Liabilities against assets subject to finance lease 89,873 135,030
Fair value sensitivity analysis for fixed rate instruments
The Company does not account for any fixed rate financial assets and liabilities at fair value
through profit or loss. Therefore, a change in interest rate at the balance sheet date would not
affect profit or loss of the Company.Cash flow sensitivity analysis for variable rate instruments
If interest rate at the year end date, fluctuates by 1% higher lower with all other variables
held constant, profit after taxation for the year would have been Rupees 48.934 million (2010 :
Rupees
65.712 million) lower higher, mainly as a result of higher lower interest expense on floating
rate borrowings. This analysis is prepared assuming the amounts of liabilities outstanding at
balance sheet dates were outstanding for the whole year.
(b) Credit risk
Credit risk represents the risk that one party to a financial instrument will cause a financial
loss for the other party by failing to discharge an obligation.
The carrying amount of financial assets represents the maximum credit exposure. The
maximum exposure to credit risk at the reporting date was as follows:Investments 600 642,111
Deposits 43,380 41,124
Trade debts 707,400 1,329,065
Advances 1,614 1,661
Accrued interest 46 141
Due from subsidiary companies 601,144 14,987
Other receivables 24,208 49,296
Bank balances 419,695 77,890
1798087 2156275The credit quality of financial assets that are neither past due nor impaired can be assessed by
reference to external credit ratings (If available) or to historical information about
counterparty default rate:
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The Company manages liquidity risk by maintaining sufficient cash and the availability of
funding through an adequate amount of committed credit facilities. At 30 June 2011, the
Company had Rupees 6,045 million available borrowing limits from financial institutions and
Rupees 420.996 million cash and bank balances. The management believes the liquidity risk
to be low. Following are the contractual maturities of financial liabilities, including interest
payments. The amount disclosed in the table are undiscounted cash flows:
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Financial liabilties
at amortized cost
(------------------------------------------ ( R u p e e s in t h o u s a n d ) --------------------------------------)-
Liabilities as per balance sheet
Long term financing 1,883,424
Liabilities against assets subject to finance lease 89,873
Trade and other payables 754,095Accrued mark-up 230,138
Short term borrowings 5,130,265
8,087,795
Loans and Through profit Available for
receivables or loss sale
(--------------------- ( R u p e e s in t h o u s a n d ) ----
As at 30 June 2010
Assets as per balance sheet
Investments - 8,016 634,095
Deposits 41,124 - -
Trade debts 1,329,065 - -
Advances 1,661 - -
Interest accrued 141
Due from subsidiary companies 14,987
Other receivables 49,296 - -
Cash and bank balances 78,851 - -
1,515,125 8,016 634,095
Financial liabilties
at amortized cost(--------------------- ( R u p e e s in t h o u s a n d ) ----
Liabilities as per balance sheet
Long term financing 2,328,501
Liabilities against assets subject to finance lease 135,030
Trade and other payables 947,498
Accrued mark-up 289,987
Short term borrowings 6,070,435
9,771,451
43 a) Capital risk management
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The Companys objectives when managing capital are
to safeguard the Companys ability to continue as a
going concern in order to provide returns for
shareholders and benefits for other stakeholders and
to maintain an optimal capital structure to reduce the
cost of capital. In order to maintain or adjust the
capital structure, the Company may adjust theamount of dividends paid to shareholders, return
capital to shareholders through repurchase of shares,
issue new shares or sell assets to reduce debt.
Consistent with others in the industry and the
requirements of the lenders, the Company monitors
the capital structure on the basis of gearing ratio.
This ratio is calculated as borrowings divided by
total capital employed. Borrowings represent long-
term financing, liabilities against assets subject to
finance lease and short-term borrowings obtained by
the Company as referred to in note
6, note 7an note 11 respective y. Tota capitaemployed includes total equity as shown in the
balance sheet plus borrowings. The gearing ratio as at
year ended 30 June 2011 and 30 June 2010 is as
follows:
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Total
------------------)-
642,111
41,124
1,329,065
1,661
141
14,987
49,296
78,851
2,157,236
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44. DATE OF AUTHORIZATION FOR ISSUET ese inancia statements were
authorised for issue on September
28, 2011 by the Board of Directors of
the Company
45. CORRESPONDING FIGURESNo significant reclassification
rearrangement of correspondingfigures has been made.
46. GENERAL 2011 2010Figures have been rounded off to the
nearest thousand of Rupees unless
stated otherwise. (Rupee in thousand)
Borrowings 7,103,562 8,533,966
Total equity 4,386,636 3,361,268
Total capital employed 11,490,198 11,895,234
Gearing Ratio 62% 72%
Pattern of Shareholding1.CUIN (Incorporation Number) 2805
2.Name of the Company KOHINOOR TEXTILE MILLS LIMITED
3.Pattern of holding of the shares
held by the shareholders as at
30.06.2011
4 S i z e o f
No. of shareholders from to
2618 1 -100
1028 101 -500385 501 -1,000
625 1,001 -5,000
121 5,001 -10,000
45 10,001 -15,000
26 15,001 -20,000
12 20,001 -25,000
9 25,001 -30,000
8 30,001 -35,000
4 35,001 -40,000
7 40,001 -45,000
7 45,001 -50,000
7 50,001 -55,000
5 55,001 -60,000
6 60,001 -65,000
1 65,001 -70,000
2 70,001 -75,000
1 75,001 -80,000
1 85,001 -90,000
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1 90,001 -95,000
4 95,001 -100,000
4 105,001 -110,000
2 115,001 -120,000
1 120,001 -125,000
2 145,001 -150,000
1 150,001 -155,0002 160,001 -165,000
1 165,001 -170,000
1 170,001 -175,000
1 180,001 -185,000
1 200,001 -205,000
1 205,001 -210,000
1 210,001 -215,000
1 215,001 -220,000
1 235,001 -240,000
1 250,001 -255,000
2 275,001 -280,000
1 295,001 -300,000
2 300,001 -305,000
1 315,001 -320,000
1 405,001 410,000
1 440,001 445,000
1 445,001 450,000
1 450,001 455,000
1 470,001 475,000
2 490,001 495,000
1 495,001 500,000
1 620,001 625,000
1 625,001 630,000
1 645,001 650,000
1 690,001 695,000
1 780,001 785,000
1 840,001 845,000
1 855,001 860,000
1 905,001 910,000
1 1,115,001 1,120,000
1 1,560,001 1,565,000
1 1,620,001 1,625,000
1 2,360,001 2,365,000
1 3,325,001 3,330,000
1 3,935,001 3,940,000
1 5,075,001 5,080,000
1 8,260,001 8,265,000
1 9,045,001 9,050,000
1 10,040,001 10,045,000
1 10,825,001 10,830,000
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H o l d i n g
Total shares held
72,426
297,212288,723
1,657,868
893,760
559,950
495,236
276,807
247,750
252,476
157,817
299,846
342,073
367,213
290,604
374,734
67,000
145,937
75,600
88,214
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92,350
399,010
430,524
232,119
121,000
300,000
150,223321,085
169,838
171,793
180,004
201,156
208,272
215,000
218,000
236,000
251,293
553,549
300,000
605,291
315,847
406,936
440,500
447,218
450,216
474,988
988,483
500,000
622,811
627,849
645,500
691,753
784,047
841,200
858,917
905,062
1,116,000
1,560,500
1,621,517
2,362,066
3,326,368
3,936,190
5,077,500
8,261,366
9,045,940
10,040,331
10,827,332
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5Categories of
Shareholders
No. of
Shareholders
Shares
Held
5.1 Directors, CEO and their spouses
& minor children
Mr. Tariq Sayeed Saigol, Chairman/Director 10,040,331
Mr. Taufique Sayeed Saigol, Chief Executive/Director 10,827,332
Mr. Sayeed Tariq Saigol, Director 315,847
Mr. Waleed Tariq Saigol, Director 70,937
Mr. Kamil Taufique Saigol, Director 2,500
Mr. Zamiruddin Azar, Director 5,930
Mr. Arif Ijaz, Director 2,500
Mrs. Shehla Tariq Saigol, spouse of Mr. Tariq Sayeed Saigol 450,216
8 21,715,593
5.2 Associated Companies, undertakings and related parties
Zimpex (Private) Limited 1 45,496,057
5.3 NIT and ICP
National Bank of Pakistan, Trustee Deptt. 3,326,368
IDBP (ICP UNIT) 18,247
5.4 Banks, Development Financial Institutions, 2 3,344,615
Non-Banking Financial Institutions 20 4,014,452
5.5 Insurance Companies 4 848,734
5.6 Modarabas , Leasing and Mutual Funds 7 213,851
5.7 Shareholders holding Ten Percent or
more voting interest in the Company
refer 5.2 & 5.8 b
5.8 General Public
a. Individuals 4,842 31,798,092
b. Foreign Investor (s) 9 120,479,119
5.9 Joint Stock Companies 73 17,231,248
5.10. Public Sector Companies and Corporations 1 300,405
5.11 Executives
5.12 Others
Artal Restaurant Int Limited Employees Provident Fund 1,815
Fikree Development Corporation Limited 2,794
Hussain Trustees Limited 260
Securities & Exchange Commission of Pakistan 1
The Deputy Administrator Abandoned Properties Organization 3,045
The Ida Rieu Poor Welfare Association 354
The Karachi Stock Exchange (Guarantee) Limited-Future Cont. 61,425The Okhai Memon Madressah Association 1
Trustees Al-Abbas Sugar Mills Limited Employees Gratuity Fund 9,075
Trustees Artal Restaurants Intl Employees Provident Fund 760
Trustees Moosa Lawai Foundation 3,751
United Executers & Trustee Company Limited 173
University of Sindh 596
13 84,050
4980 245,526,216
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Percentage of Capital
4.0893
4.4099
0.1286
0.0289
0.001
0.0024
0.001
0.1834
9
18.53
1.3548
0.0074
1
1.635
0.3457
0.0871
12.951
49.0698
7.0181
0.1224