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Interim Condensed Financial Information (Un-Audited)for the period ended 30 September 2009
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Company Information
Board of Directors:
Mr. Muneer NawazChairmanMr. Saifi ChaudhryChief ExecutiveMr. Mahmood NawazMr. C. M. KhalidMrs. Amtul Hai KhalidMr. M. NaeemMr. Muhammad KhalidMr. Shamshad Ahmad(N.I.T. Nominee)Mr. Muhammad Asif(N.I.T. Nominee)
Director & Company Secretary:
Mr. Muhammad Khalid
Chief Financial Officer:
Mr. Faisal Ahmad Nisar, FCA
Audit Committee:
Mr. Muneer NawazChairmanMr. Muhammad KhalidMemberMr. Muhammad AsifMember
Registered Office / Head Office:
56 - Bund Road,Lahore-54500.Phones: (042) 37466900-04.Faxes: (042) 37466899 & 37466895.E-mail: [email protected]
Factories:
• 56 - Bund Road, Lahore-54500. Phones: (042) 37466900-04. Faxes: (042) 37466899 & 37466895. E-mail: [email protected]
• Plot No. L-9, Block No. 22, Federal “B”, Industrial Area, Karachi-75950. Phones: (021) 36344722-23. Fax: (021) 36313790. E-mail: [email protected]
• Plot No. 33-34, Phase III, Hattar Industrial Estate, Hattar. Phones: (0995) 617158 & 617343. Fax: (0995) 617342. E-mail: [email protected]
Auditors:
Messrs. Ford Rhodes Sidat Hyder & Co.Chartered Accountants,Mall View Building, 4 - Bank Square, Lahore.
Share Registrar:
Messrs. Corp Link (Private) Limited,Wings Arcade, 1-K, Commercial,Model Town, Lahore.
Legal Advisors:
Messrs. Cornelius, Lane & Mufti.Nawa-e-Waqt Building,Shahrah-e-Fatima Jinnah, Lahore.
Bankers:
United Bank Limited.MCB Bank Limited.National Bank of Pakistan.The Bank of Khyber.Bank Al-Habib.Habib Bank Limited.
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Directors’ Report to the Members
The Board of Directors take pleasure in presenting the interim condensed financial information for the first
quarter ended 30 September 2009.
The results for the quarter showed strong volumetric sales and growth in net profits. During the quarter, the
Company posted a profit of Rs. 42.126 million which was higher by 13.58% than the profit registered in the
corresponding quarter of 2008. Turnover of Rs. 234 million represented 33.82% growth over the same period
last year. Cost of sales rose mainly due to significant increase in input costs. These are impressive results in the
face of increased costs of many significant raw materials, packaging and energy costs.
The most significant contributors to increased sales volume were the sales of bottled juices as well as Tetra
Pak juices. However, gross margin was lower by 3.86% as compared to the corresponding quarter due to hike
in the prices of raw and packaging materials. Further, sugar crises also affected our profitability because of the
fact that sugar is our main raw material. During the period, the average rate of sugar was Rs. 42.82 per kg as
compared to Rs. 26.48 per kg in the same period of 2008.
Looking ahead, we expect to achieve significant increase in sales volume for the next fiscal year ending 30 June
2010. To cater the ongoing demand of our juice products, “Twist” and “All Pure”, in the Central and Northern
regions, we are shifting two Tetra Pak machines from Karachi Plant to Lahore Plant. Similarly a TBA-19 base
machine would be shifted from Hattar plant to Lahore plant. Work on the project has already been started and
hopefully this would be completed by 31 December 2009. The most important aspect of this shifting would be
a saving on account of freight costs.
In closing, we would like to place on record our appreciation for the commitment, devotion to duty and hard work
of the officers and workers of all categories.
For and on Behalf of the Board of Directors
Lahore: Saifi Chaudhry
27 October 2009. Chief Executive
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Interim Condensed Balance Sheet (Un-Audited)as at 30 September 2009
(Un–Audited) (Audited) September June Note 2009 2009 (Rupees in thousand)
ASSETS
NON–CURRENT ASSETS
Property, plant and equipment 299,738 299,770 Investment in associate 7,724 7,724 Investment available for sale 937 824 Long term deposits and prepayments 2,768 2,661
311,167 310,979 CURRENT ASSETS
Stores and spares 18,873 18,796 Stock in trade 752,463 755,711 Trade debts 213,216 86,291 Advances, deposits, prepayments and other receivables 31,290 37,113 Income tax recoverable 4,054 74,651 Cash and bank balances 61,951 70,844
1,081,847 1,043,406
TOTAL ASSETS 1,393,014 1,354,385
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Share capital 60,000 60,000 Reserves 653,562 583,449 Unappropriated profits 70,497 134,371
TOTAL EQUITY 784,059 777,820
NON–CURRENT LIABILITIES
Liabilities against assets subject to finance lease 191 543 Deferred taxation 45,419 45,419
45,610 45,962 CURRENT LIABILITIES
Trade and other payables 413,176 392,371 Mark up accrued on short term borrowings 2,627 393 Short term borrowings– Secured 89,054 30,228 Current portion of liabilities against assets subject to finance lease 1,477 3,869 Provision for taxation 57,011 103,742
563,345 530,603
TOTAL LIABILITIES 608,955 576,565
CONTINGENCIES AND COMMITMENTS 6 – –
TOTAL EQUITY AND LIABILITIES 1,393,014 1,354,385 The annexed notes from 1 to 10 form an integral part of this interim condensed financial information.
Saifi Chaudhry Muhammad Khalid Faisal Ahmad Nisar Chief Executive Director Chief Financial Officer
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Interim Condensed Profit and Loss Account (Un-Audited)for the period ended 30 September 2009
30 September 2009 2008 (Rupees in thousand)
Sales – net 928,103 693,555
Cost of sales 673,948 476,905
Gross profit 254,155 216,650
Distribution cost 141,341 119,213
Administrative expenses 21,276 21,547
Other operating expenses 22,210 18,325
Other operating income (4,188) (5,798)
180,639 153,287
Operating profit 73,516 63,363
Finance costs 3,390 1,273
Profit before taxation 70,126 62,090
Taxation 28,000 25,000
Net profit for the period 42,126 37,090
Earnings per share – basic and diluted (Rupees) 7.02 6.18
The annexed notes from 1 to 10 form an integral part of this interim condensed financial information.
Saifi Chaudhry Muhammad Khalid Faisal Ahmad Nisar Chief Executive Director Chief Financial Officer
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Interim Condensed Cash Flow Statement (Un-Audited)for the period ended 30 September 2009
30 September Note 2009 2008 (Rupees in thousand)
CASH FLOW FROM OPERATING ACTIVITIES
Cash generated from operations Profit before taxation 70,126 62,090 Adjustments for: Depreciation 9,284 9,123 Interest/mark–up 2,905 961 Profit on bank deposits (539) (600) Deterioration in value of shells, pallets and barrels 2,017 2,321 Gain on disposal of property, plant and equipment (32) –
13,635 11,805
Operating profit before working capital changes 83,761 73,895 (Increase)/decrease in current assets Stores and spares (77) 24 Stock in trade 1,231 78,077 Trade debts (126,925) (51,746) Advances, deposits, prepayments and other receivables 5,742 6,794
(120,029) 33,149 Increase/(decrease) in current liabilities Trade and other payables (15,195) (100,300) Short term borrowings– Secured 58,826 8,499
43,631 (91,801)
Cash generated from operations 7,363 15,243 Interest/mark–up paid (671) (838) Profit on bank deposits–Received 539 1,003 Income tax paid (4,054) (22,084)
Net cash generated from operating activities 3,177 (6,676)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (9,709) (10,405)Sale proceeds from disposal of property, plant and equipment 489 – Long term deposits (107) (300)
Net cash used in investing activities (9,327) (10,705)
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of liabilities against assets subject to finance lease (2,743) (7,810)
Net cash used in financing activities (2,743) (7,810)
Net decrease in cash and cash equivalents (8,893) (25,191)
Cash and cash equivalents at the beginning of the period 70,844 84,042
Cash and cash equivalents at the end of the period –A 61,951 58,851 A– Cash and cash equivalents include cash and bank balances as stated in balance sheet. The annexed notes from 1 to 10 form an integral part of this interim condensed financial information.
Saifi Chaudhry Muhammad Khalid Faisal Ahmad Nisar Chief Executive Director Chief Financial Officer
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Interim Condensed Statement of Changes in Equity (Un-Audited)for the period ended 30 September 2009
Capital Reserve Revenue Reserve Unrealized (loss)/gain on remeasurement Share Merger General Unappropriated of investments – Capital Reserve Reserve Profits available for sale Total
( R u p e e s i n t h o u s a n d )
Balance as at 01 July 2008 60,000 5,000 495,000 176,900 (200) 736,700
Transfer to general reserve – – 85,000 (85,000) – –
Dividend @ Rs. 10/- per share
for the year ended 30 June 2008 – – – (60,000) – (60,000)
Net profit for the period
ended 30 September 2008 – – – 37,090 – 37,090
Unrealized loss on remeasurement
of investments– available for sale – – – – (467) (467)
Balance as at 30 September 2008 60,000 5,000 580,000 68,990 (667) 713,323
Net profit for the year
ended 30 June 2009 – – – 65,381 – 65,381
Unrealized loss on remeasurement
of investments– available for sale – – – – (884) (884)
Balance as at 30 June 2009 60,000 5,000 580,000 134,371 (1,551) 777,820
Transfer to general reserve – – 70,000 (70,000) – –
Dividend @ Rs. 6/– per share
for the year ended 30 June 2009 – – – (36,000) – (36,000)
Net profit for the period
ended 30 September 2009 – – – 42,126 – 42,126
Unrealized gain on remeasurement
of investments – available for sale – – – – 113 113
Balance as at 30 September 2009 60,000 5,000 650,000 70,497 (1,438) 784,059
The annexed notes from 1 to 10 form an integral part of this interim condensed financial information.
Saifi Chaudhry Muhammad Khalid Faisal Ahmad Nisar Chief Executive Director Chief Financial Officer
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Notes to the Interim Condensed Financial Information (Un-Audited)for the period ended 30 September 2009
1. THE COMPANY AND ITS OPERATIONS
The Company is a Public Limited Company incorporated in Pakistan and is listed on Lahore and Karachi Stock Exchanges. The registered office of the Company is situated at 56 – Bund Road, Lahore, Pakistan. It is engaged in the manufacturing, trading and sale of juices, pickles, jams, ketchups etc., based upon or derived from fresh fruits and vegetables.
Shezan International Limited owned 44.88% ordinary shares in a Private Limited company namely Hattar Food Products (Private) Limited, which has not commenced its commercial operations so far. The principal business activities of the associated undertaking will be to process food products.
2. STATEMENT OF COMPLIANCE
This interim condensed financial information has been prepared in accordance with the requirements of IAS – 34 “Interim Financial Reporting”, as applicable in Pakistan in all material respects. This interim condensed financial information is un–audited and is being submitted to the members under section 245 of the Companies Ordinance, 1984, and listing regulations of Lahore and Karachi stock exchanges.
3. BASIS OF MEASUREMENT, SIGNIFICANT JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The basis of presentation and measurement adopted by the Company for the preparation of this interim condensed financial information are the same as those adopted in the preparation of the preceding annual audited financial statements for the year ended 30 June 2009.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies adopted and applied by the company for the preparation of this interim condensed financial information are the same as those adopted and applied in the preparation of the preceding annual audited financial statements for the year ended 30 June 2009.
5. TAXATION, WORKERS’ WELFARE FUND AND WORKERS’ PROFIT PARTICIPATION FUND
Provisions in respect of Workers’ Welfare Fund, Workers’ Profit Participation Fund and Taxation are estimated and these are subject to final adjustments in the annual audited financial statements.
6. CONTINGENCIES AND COMMITMENTS
a) CONTINGENCIES
i) There has been no change in the status of the contingencies reported in the annual audited financial statements for the year ended 30 June 2009 in respect of P.E.S.S.I., sales tax and excise duty, leasehold land and income tax.
b) COMMITMENTS
i) Commitments in respect of letters of credit opened for the import of machinery, raw and packing materials amounted to Rs. (thousand) 71,987 (30 June 2009: Rs. (thousand) 19,944).
ii) Counter guarantees in favour of banks in the ordinary course of business amounted to Rs. (thousand)
18,281 (30 June 2009: Rs. (thousand) 19,500). iii) Commitments for equity investment in an associated undertaking amounted to Rs. (thousand) 1,500
(30 June 2009: Rs. (thousand) 1,500).
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7. ADDITIONS AND DELETIONS OF PROPERTY, PLANT AND EQUIPMENT Additions Deletions (Rupees in thousand) Company owned assets
Plant and machinery 5,505 – Motor vehicles and bicycles 1,256 (489) Electric Equipments 175 – Computers and accessories 58 –
Grand total 6,994 (489) 8. TRANSACTIONS WITH RELATED PARTIES
The related parties and associated undertakings comprise related group companies, local associates, staff provident fund, directors and key management personnel. Transactions with related parties and associated undertakings, other than remuneration and benefits to key management personnel under the terms of their employment are as follows:
30 September 2009 2008 (Rupees in thousand)
Purchases of raw materials 148,029 60,510 Sales of finished goods 361 103 Royalty charged 9,281 6,935 Purchases/repairs of electric equipment/vehicles 61 164 Services rendered 45 45 Contributions to staff provident fund 683 619 All transactions with related parties and associated undertakings are entered into arm’s length determined
in accordance with comparable uncontrolled price method except for transactions with M/s. Shahnawaz (Private) Limited, where an additional discount of 40% is given by them on service charges and 7.5% on spare parts in connection with the repairs of motor vehicles, due to group policy.
9. AUTHORIZATION
These interim condensed financial statements were authorized for issue by the Board of Directors on 27 October 2009.
10. GENERAL
Figures in these interim condensed financial statements have been rounded off to the nearest thousand of rupees.
Notes to the Interim Condensed Financial Information (Un-Audited)for the period ended 30 September 2009
Saifi Chaudhry Muhammad Khalid Faisal Ahmad Nisar Chief Executive Director Chief Financial Officer
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