| CLARIANT PAKISTAN LIMITED |
|
|
|
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|
|
| ANNUAL
REPORT 204 |
|
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|
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|
Note |
2004 |
2003 |
|
|
|
|
|
Restated |
|
|
|
|
|
(Rupees '000) |
|
|
|
| Property,
Plant and Equipment |
|
3 |
547,350 |
584,081 |
|
|
| Long-term
Loans and Advances considered good |
4 |
22,084 |
17,043 |
|
|
| Long-term
Deposits |
|
|
2,080 |
1,504 |
|
|
| Deferred
Tax Asset |
|
17 |
- |
38,113 |
|
|
| Current Assets |
|
|
|
|
| Stores
and spares |
|
5 |
30,555 |
31,996 |
|
|
| Stock-in-trade |
|
6 |
964,092 |
782,304 |
|
|
| Trade debts |
|
7 |
1,145,330 |
951,229 |
|
|
| Loans
and advances |
|
8 |
9,939 |
8,649 |
|
|
| Trade
deposits and short-term prepayments |
9 |
5,179 |
3,979 |
|
|
| Taxation
recoverable |
|
|
90,647 |
117,713 |
|
|
| Other receivables |
|
10 |
21,020 |
11,243 |
|
|
| Cash
and bank balances |
|
11 |
103,627 |
86,538 |
|
|
|
|
2,370,389 |
1,993,651 |
|
|
| Less:
Current Liabilities and Provisions |
|
|
|
| Short-term loans |
|
12 |
375,000 |
325,000 |
|
|
| Short-term
running finances utilised under |
13 |
465,560 |
244,807 |
|
|
| mark-up
arrangements |
|
|
|
|
| Mark-up accrued |
|
14 |
19,950 |
20,789 |
|
|
| Creditors,
accrued and other liabilities |
15 |
537,418 |
578,858 |
|
|
| Current
portion of redeemable capital |
|
16 |
166,666 |
166,666 |
|
|
|
|
1,564,594 |
1,336,120 |
|
|
|
|
805,795 |
657,531 |
|
|
| Redeemable
Capital |
|
16 |
475,000 |
541,667 |
|
|
| Deferred
Tax Liability |
|
17 |
4,942 |
- |
|
|
| Net Assets |
|
|
897,367 |
756,605 |
|
|
| Financed By: |
|
|
|
|
| Share capital |
|
18 |
155,968 |
155,968 |
|
|
| Revenue reserves |
|
|
620,000 |
480,000 |
|
|
| Unappropriated
profit |
|
|
121,399 |
120,637 |
|
|
| Shareholders'
Equity |
|
|
897,367 |
756,605 |
|
|
|
|
|
|
| Cash
Flow Statement |
|
Note |
2004 |
2003 |
|
|
| for
the year ended 31 December 2004 |
|
|
|
|
(Rupees '000) |
|
|
|
| Cash
flow from operating activities |
|
|
|
|
| Cash
generated from operations |
|
33 |
301,205 |
626,844 |
|
|
| Staff gratuity paid |
|
|
-33,253 |
-9,386 |
|
|
| Interest/mark-up
paid |
|
|
-68,439 |
-108,446 |
|
|
| Taxes paid |
|
|
-139,992 |
-186,223 |
|
|
| Long-term
loans and advances |
|
|
-5,041 |
-10,962 |
|
|
| Long-term
deposits and prepayments |
|
|
-576 |
346 |
|
|
| Net
cash inflow from operating activities |
|
53,904 |
312,173 |
|
|
| Cash
flow from investing activities |
|
|
-47,312 |
-49,252 |
|
|
| Fixed
capital expenditure |
|
|
|
|
| Proceeds
from sale of property, plant and equipment |
|
374 |
3,828 |
|
|
| Net
cash outflow from investing activities |
|
-46,938 |
-45,424 |
|
|
| Cash
flow from financing activities |
|
|
|
|
| Redeemable
capital (net) |
|
|
-66,667 |
-16,545 |
|
|
| Short-term
loans less repayments |
|
|
50,000 |
-320,000 |
|
|
| Dividend paid |
|
|
-193,963 |
-148,236 |
|
|
| Net
cash outflow from financing activities |
|
-210,630 |
-484,781 |
|
|
| Net
decrease in cash and cash equivalents |
|
-203,664 |
-218,032 |
|
|
| Cash
and cash equivalents at beginning of the year |
|
-158,269 |
59,763 |
|
|
| Cash
and cash equivalents at end of the year |
34 |
-361,933 |
-158,269 |
|
|
|
|
| The
Company and its Operations |
|
|
| The
Company is a limited liability Company and is incorporated and domiciled in
Pakistan. The address of its registered office is 1-A/1, Sector 20, Koranp; |
| Industrial
Area, Korangi, Karachi, Pakistan. The Company is listed on the Karachi Stock
Exchange. |
|
|
|
|
| The
Company manufactures and sells chemicals, dyestuffs, emulsions and
masterbatches. It also acts as an indenting agent. |
|
|
| Summary
of Significant Accounting Policies |
|
|
| Statement
of Compliance |
|
|
|
|
| These
financial statements have been prepared in accordance with the approved
accounting standards as applicable in Pakistan and the requirements o |
|
| the
Companies Ordinance, 1984. Approved accounting standards comprise of such
International Accounting Standards (ISA) as notified under th( |
|
| provision
of the Companies Ordinance, 1984. Wherever the requirements of the Companies
Ordinance, 1984 or directives issued by the Securities am |
|
| Exchange
Commission of Pakistan differ with the requirements of these standards, the
requirements of the Companies Ordinance, 1984 or thf |
|
| requirements
of the said directives take precedence. |
|
|
|
|
| Accounting
Convention |
|
|
| These
financial statements have been prepared under the historical cost convention
except that certain financial instruments have been accounted for ii |
|
| the
financial statements on the basis of their fair values. |
|
|
|
|
| Change
in Accounting Policy |
|
|
| During
the year, the SECP substituted the Fourth Schedule to the Companies Ordinance
1984, which is effective from the financial year ending on 01 |
|
| after
5 July 2004. This has resulted in the change in accounting policy pertaining
to recognition of dividends declared subsequent to the year / period end |
| The
Company, effective from the current year, has not recognised the final
dividend proposed subsequent to the year end. The change in accounting |
|
| policy
has been accounted for retrospectively and comparative information has been
restated in accordance with the benchmark treatment specified in |
|
| IAS
8 (Net Profit or Loss for the Period, Fundamental Errors and Changes in
Accounting Policies). Had there been no change in the accounting policy, the |
| 'unappropriated
profit' would have been lower and the 'creditors, accrued and other
liabilities' would have been higher for the years ended 31 December |
|
| 2002
and 31 December 2003 by Rs 85.782 million and Rs 109.177 million
respectively. The effect of the change in accounting policy has been
reflected: |
|
| in
the statement of changes in equity. The change in accounting policy has not
resulted in any change in the profit and loss for the current year. ; |
|
|
| Property,
Plant and Equipment |
|
|
| Property,
plant and equipment are stated at cost less accumulated depreciation except
freehold land and capital work-in-progress which are stated at |
|
| cost.
Cost in relation to property, plant and equipment signifies historical cost. |
|
|
|
|
| Depreciation
is charged to income applying the straight line method, whereby the cost of
an asset is written off over its estimated useful life without |
|
| taking
into account any residual value. The cost of leasehold land is amoritised
equally over the lease period. |
|
|
|
|
| Depreciation
is charged on additions from the month the asset is put to use and on
disposals upto the month of disposal.
: |
|
|
| Maintenance
and repairs are charged to income as and when incurred. Major renewals and
improvements are capitalised and the assets so replaced, if |
|
| any, are retired. |
|
|
|
|
| Foreign
Currency Translation |
|
|
| Transactions
in foreign currencies are accounted for in rupees at the rates prevailing on
the date of transaction. Monetary assets an |
|
|
| liabilities
in foreign currencies are translated into rupees at the rates of exchange
approximating those at the balance sheet date. Exchang- |
|
| differences
are taken to the profit and loss account. |
|
|
|
|
| Provisions |
|
|
| Provisions
are recognised when the Company has a present legal or constructive
obligation as a result of past events, it is probable that a |
|
| outflow
of resources will be required to settle the obligation and a reliable
estimate of the amount can be made. |
|
|
|
|
| Revenue
Recognition |
|
|
| - Sales are recorded on despatch of goods to
customers. |
|
|
|
|
| - Indent commission is recognised on receipt
of shipment confirmation from suppliers. |
|
|
| Financial
Instruments |
|
|
|
|
| Financial Assets |
|
|
| Financial
assets are loans, advances, deposits, trade debts, other receivables and cash
and bank balances. These are stated at thei |
|
|
| nominal
value as reduced by appropriate allowances for estimated irrecoverable
amounts, if any. |
|
|
|
|
| Financial
Liabilities |
|
|
| Financial
liabilities are classified according to the substance of the contractual
agreements entered into. Significant financial liabilities art |
|
| short-term
loans, short-term finances utilised under mark-up arrangements, creditors,
provisions, accrued and other liabilities and unclaimei |
|
| dividends. |
|
|
|
|
| Offsetting |
|
|
| Financial
assets and liabilities are offset when the Company has a legally enforceable
right to offset and intends to settle either on a ne' |
|
| basis
or to realise the asset and settle the liability simultaneously. |
|
|
|
|
| Cash
and Cash Equivalent |
|
|
| Cash
and cash equivalent are carried in the balance sheet at cost. For the purpose
of cash flow statement, cash and cash equivalent |
|
|
| comprise
of cash in hand and current and deposit account balances with banks. |
|
|
|
|
|
|
Note |
2004 |
2003 |
|
|
|
|
|
Restated |
|
|
|
|
|
(Rupees '000) |
|
|
|
| Turnover |
|
20 |
5,025,949 |
4,340,112 |
|
|
| Discount
and commission |
|
|
377,864 |
326,556 |
|
|
| Sales tax |
|
|
683,147 |
651,466 |
|
|
|
|
1,061,011 |
978,022 |
|
|
| Net Sales |
|
|
3,964,938 |
3,362,090 |
|
|
| Cost of Sales: |
|
|
|
|
| Cost
of goods sold |
|
21 |
3,068,394 |
2,468,171 |
|
|
| Distribution
and marketing expenses |
|
22 |
220,038 |
211,596 |
|
|
|
|
3,288,432 |
2,679,767 |
|
|
| Administration
expenses |
|
23 |
98,924 |
97,060 |
|
|
|
|
577,582 |
585,263 |
|
|
| Indent
commission - |
|
|
|
|
| net
of payment of Rs 12.820 million (2003: Rs 13.961 million) |
26,008 |
19,642 |
|
|
| Operating profit |
|
|
603,590 |
604,905 |
|
|
| Other income |
|
25 |
81,699 |
7,121 |
|
|
|
|
685,289 |
612,026 |
|
|
| Financial charges |
|
26 |
98,405 |
112,810 |
|
|
| Other charges |
|
27 |
41,050 |
36,142 |
|
|
|
|
139,455 |
148,952 |
|
|
| Profit
before taxation |
|
|
545,834 |
463,074 |
|
|
| Taxation |
|
28 |
210,113 |
179,065 |
|
|
| Profit
after taxation |
|
|
335,721 |
284,009 |
|
|
|
|
( |
Rupees) |
|
|
| Earnings
per share |
|
29 |
21.53 |
18.21 |
|
|
|
|
| Porfit
and Loss Account |
|
|
| or
the year ended 31 December 2004 |
|
|
|
|
|
|
|
|
2004 |
2003 |
|
|
| The
depreciation charge for the year has been allocated as follow: |
|
Restated |
|
|
|
|
(Rupees '000) |
|
|
|
| Cost
of goods sold- note 21 |
|
62,078 |
57,906 |
|
|
| Distribution
and marketing expenses - note 22 |
|
18,874 |
18,620 |
|
|
| Administration
expenses note 23 |
|
2,956 |
2,778 |
|
|
|
|
83,908 |
79,304 |
|
|
|
|
|
|
|
|
2004 |
2003 |
|
|
| Capital
Work-in-progress comprises of: |
|
(Rupees '000) |
|
|
|
| Civil works |
|
255 |
- |
|
|
| Plant
and machinery |
|
2,867 |
- |
|
|
| Equipment |
|
21,899 |
- |
|
|
|
|
25,021 |
- |
|
|
|
|
|
|
| Long-term
Loans and Advances - Considered good |
|
|
|
|
|
|
2004 |
2003 |
|
|
|
|
|
Restated |
|
|
| Due from : |
|
(Rupees '000) |
|
|
|
| Executives |
|
3,197 |
2,678 |
|
|
| Employees |
|
27,730 |
22,116 |
|
|
|
|
30,927 |
24,794 |
|
|
| Less:
Receivable within one year note 8 |
|
8,843 |
7,751 |
|
|
|
|
22,084 |
17,043 |
|
|
|
|
|
|
Issued, |
|
|
|
|
|
subscribed |
Revenue |
Unappropriated |
Total |
|
|
|
|
and paid-up |
reserves |
profit |
|
|
|
|
|
capital |
|
|
|
|
|
.......................................
(Rupees '000) .................................................. |
|
| blance
as at 31 December 2002 as reported earlier |
155,968 |
370,000 |
9,015 |
534,983 |
|
|
| feet
of change in accounting policy (note 2.3) |
|
|
|
| Final
dividend for the year ended 31 December |
|
|
|
| 2002
declared subsequent to year end |
- |
- |
85,782 |
85,782 |
|
|
| alance
as at 31 December 2002 - restated |
155,968 |
370,000 |
94,797 |
620,765 |
|
|
| feet
of change in accounting policy (note 2.3) |
|
|
|
| Final
dividend for the year ended 31 December |
|
|
|
| 2002
declared subsequent to year end |
- |
- |
-85,782 |
-85,782 |
|
|
| ofit
after taxation for the year ended 31 December 2003 |
- |
- |
284,009 |
284,009 |
|
|
| ransfer
to revenue reserves |
|
- |
110,000 |
-110,000 |
- |
|
|
| terim dividend |
|
- |
- |
-62,387 |
-62,387 |
|
|
| alance
as at 31 December 2003 |
|
155,968 |
480,000 |
120,637 |
756,605 |
|
|
| alance
as at 31 December 2003 as reported earlier |
155,968 |
480,000 |
11,460 |
647,428 |
|
|
| effect
of change in accounting policy (note 2.3) |
|
|
|
| Final
dividend for the year ended 31 December |
|
|
|
| 2003
declared subsequent to year end |
- |
- |
109,177 |
109,177 |
|
|
| alance
as at 31 December 2003 - restated |
155,968 |
480,000 |
120,637 |
756,605 |
|
|
| effect
of change in accounting policy (note 2.3) |
|
|
|
| Final
dividend for the year ended 31 December |
|
|
|
| 2003
declared subsequent to year end |
- |
- |
-109,177 |
-109,177 |
|
|
| profit
after taxation for the year ended 31 December 2004 |
- |
- |
335,721 |
335,721 |
|
|
| Transfer
to revenue reserves |
|
- |
140,000 |
-140,000 |
- |
|
|
| iterim dividend |
|
- |
- |
-85,782 |
-85,782 |
|
|
| Balance
as at 31 December 2004 |
|
155,968 |
620,000 |
121,399 |
897,367 |
|
|
|
|
|
|
| Statement
of Changes in Equity |
|
|
| or
the year ended 31 December 2004 |
|
|
|
|
| Trade Debts |
|
2004 |
2003 |
|
|
|
(Rupees '000) |
|
|
| Considered good: |
|
|
|
|
| - Secured |
|
2,577 |
3,016- |
|
|
| - Unsecured |
|
1,142,753 |
948,213 |
|
|
|
1,145,330 |
951,229 |
|
|
| Considered
doubtful |
|
184,280 |
178,825 |
|
|
|
1,329,610 |
1,130,054 |
|
|
| Less:
Provision for doubtful debts - note 7.1 |
|
184,280 |
178,825 |
|
|
|
1,145,330 |
951,229 |
|
|
| Reconciliation
of Provision for Doubtful Debts |
|
|
|
|
| Opening provision |
|
178,825 |
168,239 |
|
|
| Charge
for the year - note 22 |
|
5,455 |
10,586 |
|
|
| Closing provision |
|
184,280 |
178,825 |
|
|
|
|
| Loans
and Advances |
|
|
|
|
|
2004 |
2003 |
|
|
|
|
Restated |
|
|
| Considered good |
|
(Rupees '000) |
|
|
|
| Amounts
due from : |
|
|
|
|
| Executives |
|
1,046 |
1,271 |
|
|
| Employees |
|
7,797 |
6,480 |
|
|
|
8,843 |
7,751 |
|
|
| Advances
to employees against salaries |
|
22 |
|
|
|
| Advances
for supplies and services |
|
1,074 |
898 |
|
|
|
9,939 |
8,649 |
|
|
|
|
|
|
| Trade
Deposits and Short-term Prepayments |
|
4,149 |
2,410 |
|
|
| Deposits |
|
1,030 |
1,569 |
|
|
| Short-term
prepayments |
|
5,179 |
3,979 |
|
|
|
|
|
|
|
| Stores
and Spares |
|
|
| Stores
and spares are valued at the lower of cost determined on the moving average
method and net realisable value except for items in |
|
| transit
which are valued at cost comprising invoice values and other charges incurred
thereon. |
|
|
|
|
| Stock-in-trade |
|
|
| Stock-in-trade
are valued at the lower of cost determined on the moving average method and
net realisable value except for items in transit |
|
| which
are stated at cost incurred to date. |
|
|
|
|
| Cost
of work-in-process and manufactured finished goods comprises cost of direct
materials, direct labour and an appropriate portion of |
|
| production
overheads. |
|
|
|
|
| Net
realisable value signifies the estimated selling price in the ordinary course
of business less the estimated cost of completion and cost |
|
| necessarily
to be incurred to make the sale. |
|
|
|
|
| Trade Debts |
|
|
| Trade
debts are carried at original invoice amount less an estimate for doubtful
trade debt balances based on review of outstanding amounts. |
|
| Bad
debts are written off when identified. |
|
|
|
|
| Taxation |
|
|
| Current |
|
|
| Provision
for current taxation is based on taxable income at the current rates of
taxation after taking into account tax credits available, if |
|
| any. |
|
|
|
|
| Deferred |
|
|
| Deferred
taxation is recognised on all major temporary differences between the
carrying amounts for financial reporting purposes and the |
|
| amounts
used for taxation purposes. Deferred tax liabilities are recognised for all
taxable temporary differences. Deferred tax assets are |
|
| recognised
for all deductible temporary differences to the extent that it is probable
that the temporary differences will reverse in the future |
|
| and
taxable income will be available against which the temporary differences can
be utilised. Deferred tax assets and liabilities are measured |
|
| at
the tax rates that are expected to apply to the period when the 2sset is
realised or the liability is settled, based on the rates (and tax laws) |
|
| that
have been enacted or subsequently enacted at the balance sheet date. |
|
|
|
|
| Staff
Retirement Benefits |
|
|
| The
Company operates: |
|
|
|
|
| a) an approved contributory
provident fund for all employees; and |
|
|
|
|
| b) an approved funded gratuity scheme
for all employees. Annual contributions are made to the Fund on the basis of
actuarial |
|
|
| recommendations.
The actuarial valuations are carried out using the Projected Unit Credit
Method. The unrecognised actuarial gains |
|
|
| or
losses at each valuation date are recognised as income or expense
immediately. |
|
|
|
|
| Mark-up
Accrued |
|
|
|
2004 |
2003 |
|
|
|
|
Restated |
|
|
| Mark-up
accrued on: |
|
(Rupees '000) |
|
|
|
| Secured
redeemable capital |
|
11,684 |
17,57 |
|
|
| Short-term
running finances utilised under mark-up arrangements |
4,609 |
1,04 |
|
|
| Short-term loans |
|
3,657 |
2,17 |
|
|
|
19,950 |
20,78i |
|
|
|
|
|
|
|
2004 |
2003 |
|
|
| Reconciliation
of carrying amount of loans and advances to executives. |
(Rupees '000) |
|
|
|
| Opening balance |
|
2,678 |
453 |
|
|
| Disbursement
during the year |
|
2,088 |
3,184 |
|
|
| Repayment
during the year |
|
-1,569 |
-959 |
|
|
| Closing balance |
|
3,197 |
2,678 |
|
|
|
|
|
|
|
2004 |
2003 |
|
|
| Stores
and Spares |
|
(Rupees '000) |
|
|
|
| Stores |
|
6,592 |
5,844 |
|
|
| Spares |
|
22,759 |
25,457 |
|
|
| In transit |
|
1,204 |
695 |
|
|
| Stock-in-trade |
|
30,555 |
31,996 |
|
|
|
|
| Raw
and packing materials including in transit Rs 93.554 million |
556,496 |
429,155 |
|
|
| (2003:
Rs 203.334 million) |
|
95,671 |
68,633 |
|
|
| Work-in-process |
|
311,925 |
284,516 |
|
|
| Finished
goods including in transit Rs 27.377 million |
|
|
|
|
| (2003:
Rs 37.901 million) |
|
964,092 |
782,304 |
|
|
|
|
|
|
|
2004 |
2003 |
|
|
|
|
(Rupees '000) |
|
|
|
| Deferred
Taxation |
|
|
|
|
| Deferred
tax liability arising due to: |
|
|
|
|
| Accelerated
tax depreciation allowance |
|
33,996 |
34,399 |
|
|
| Surplus
in gratuity scheme plan asset |
|
2,321 |
- |
|
|
|
|
36,317 |
34,399 |
|
|
| Deferred
tax asset arising due to: |
|
|
|
|
| Provision
for doubtful trade debts |
|
31,375 |
62,624 |
|
|
| Deficit
in gratuity scheme plan assets |
|
- |
9,888 |
|
|
|
|
31,375 |
72,512 |
|
|
| Deferred
tax (liability) / asset
(4,942) |
38,113 |
|
|
|
|
|
|
| Reconciliation
of Deferred Tax (Liability) | Asset |
|
|
|
|
| Deferred
tax asset as at January 1 |
|
38,113 |
50,636 |
|
|
| Charge
for the year |
|
-43,055 |
-12,523 |
|
|
| Deferred
tax (liability) / asset as at December 31 |
|
-4,942 |
38,113 |
|
|
|
|
|
|
2004 |
2003 |
|
|
| Other Receivables |
|
(Rupees '000) |
|
|
|
| Due
from the Government : |
|
|
|
|
| Sales tax |
|
|
830 |
|
|
| Others |
|
2,066 |
1,354 |
|
|
