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COMPANY INFORMATION NOTICE OF ANNUAL GENERAL MEETING VISION AND MISSION STATEMENTS DIRECTORS REPORT STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE SIX YEARS FINANCIAL SUMMERY REVIEW REPORT TO THE MEMBERS ON COMPLIANCE WITH CODE OF CORPORATE GOVERNANCE AUDITOR’S REPORT TO THE MEMBERS BALANCE SHHET PROFIT AND LOSS ACCOUNT CASH FLOW STATEMENT STATEMENT OF CHANGES IN EQUITY NOTE TO THE ACCOUNTS PATTERN OF SHARE HOLDING PROXY FORM 11 12-13 14-15 16 17 18 19-54 55-56 57 08-09 10 2 3 4 5-7
CHAIRMAN Mr. Muhammad Umar Virk CHIEF EXECUTIVE Mr. Nadeem Aslam Butt BOARD OF DIRECTORS Mr. Muhammad Umar Virk Mr. Nadeem Aslam Butt Mr. Umair Umar Mrs. Shahnaz Umar Mrs. Fatima Nadeem Mrs. Sadiya Umair Mr. Saeed Ahmad Khan AUDIT COMMITTEE Chairman Member Member
Mr. Umair Umar Mrs. Shahnaz Umar
Mrs. Sadiya Umair COMPANY SECRETARY & CHIEF FINANCIAL OFFICER
Mr.Saeed Ahmad Khan
Messrs M.Yousuf Adil Saleem & CO. A Member Firm of Deloitte Touche Tohmatsh Chartered Accountant 66‐E –FCC, Syed Maratab Ali Road, Gulberg IV, Lahore REGISTRAR OF THE COMPANY
Vision Consulting Ltd. 3 – C , 1st floor, LDA Flats Lawrance Road Lahore Ph: + 92 42 637 5531, 637 5339 REGISTERED OFFICE
44‐E‐1,Gulberg III, Lahore
Ph: + 92 42 571 4191 Fa: + 92 42 571 0048 W: www,hiramills.com.pk MILLS
8 KM Manga Raiwind Road Raiwind District Kasur
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that 19th annual general meeting of the members of Hira Textile Mills Limited will be held on Saturday, October 30, 2010 at 11.00 AM at the registered office of the company i.e. 44 E/1 Gulberg III, Lahore, to transact the following: 1. To confirm the minutes of the last General Meeting. 2. To receive and adopt the audited accounts of the company for the year ended on June 30, 2010 together with the Directors and auditor’s reports thereon. 3. To approve a cash dividend as recommended by the Board of Directors. 4. To appoint auditors and fix their remuneration. The retiring auditors M/S M. Yousuf Adil Saleem & Co. chartered accountants, being eligible offer themselves for reappointment. 5. SPECIAL BUSINESS: i) To consider and, if thought fit, Pass the following Special Resolution in terms of Section 208 of The Companies Ordinance 1984,with or without amendments. “RESOLVED THAT the Company be and is hereby authorized to make temporary loans/advances from time to time to the extent of Rs. 150,000,000/- (Rupees One Hundred Fifity Million only) to Hira Terry Mills Ltd an associated Company. ”FURTHER RESOLVED THAT the Chief Executive of the Company be and is hereby authorized to undertake and make the above temporary loans/advances as short term financing on the terms and conditions given in the statement under Section 160(1) (b) annexed herewith 6. To transact any other business with the permission of the Chair. (By the order of the Board)
Lahore: October 08, 2010
Saeed Ahmad Khan Company Secretary
Notes 1- The statement under section 160(1) (b) of the Companies Ordinance, 1984, read with S.R.O 865 (1)/ 2000 dated December 6, 2000 issued by SECP pertaining to the Special Business is annexed with this notice to the members. 2- The Share Transfer Books of the Company will remain closed from October 29, 2010 to November 04, 2010 (both days inclusive). 3- A member entitled to attend and vote at the General Meeting may appoint any person as proxy to attend and vote instead of him/her. No person other than a member shall act as proxy. 4- An instrument appointing a proxy and the power of attorney or other Authority (if any) under which it is signed or a notarially certified copy of such power or authority, in order to be valid, must be deposited at the registered office of the company at least 48 hours before the time of the meeting and must be duly stamped, singed and witnessed. 5- The account holders of CDC are requested to bring their original NI/Passport for the purpose of identification at the meeting. 6- Members are requested to immediately inform of any change in their address.
A dynamic profitable and professionally managed successful business organization.
Hira Textile Mills Ltd is committed to the highest standards of integrity, honesty, openness and professionalism in all of its activities whenever they are undertaken. We, the Management Team of HTML are striving to improve the quality of yarn by continuously improving its manufacturing facilities. We are committed to positioning the Company at the apex of the industry by satisfying our valued customers, archiving superior returns for shareholders, by providing congenial work environment where the employees feel part of the organization and be a good corporate citizen by fulfilling our social responsibilities.
DIRECTORS REPORT TO THE MEMBERS
The Board of Directors feel immense pleasure in presenting the Company’s Audited financial statements together with the auditor’s report thereon for the year ended on June 30, 2010. Company Performance Following are the operating & Financial results:2010 2009
(Rupees in Million) Net Sale Gross Profit Share of Profit of Hira Terry Profit before taxation Provision for taxation Profit for The Year EPS – basic & diluted 3,116.91 608.79 47.21 277.58 28.75 248.83 3.48 2,524.73 392.27 40.10 12.23 10.35 1.88 0.03
By the grace of Almighty Allah the Overall performance of the company is quite satisfactory and Company managed to make a profit of Rs 248.83 Million after meeting all operational, administrative, financial & other expenses. Gross profit has increased due to change in production pattern and batter sale Rates. Share of profit of M/S Hira Terry associated company is Rs.47.21 Million as compared to last year Rs.40.10 Million. The Financial cost decreased by Rs.77.50 Million showing an decrease of 22.72 % due to decrease in borrowings and interest rates. Despite of increasing trend in prices of raw material and other input costs the overall picture clearly shows that the efforts of the management were successful in maintaining the effects of abnormal increase and achieving maximum profitability. Expansion and BMR No Major Investment was made during the year however the Company has spent Rs. 2.77 millions on Construction of Mixing Hall and Admin Block etc. The Management of the Company is planning to add 2 Auto cones Machines, 2 Card Machines and replace 11 Ring Frames to Improve productivity, quality, improved market prospects. Dividend The Board of directors is pleased to recommend a cash dividend of Rs.1.00 per share or 10%.
d. ISO 9001 – 2000 Certification The company continues to operate the high standard of quality and had obtained latest version of certification which is renewed every year. wages. b. Future Plans Although the performance of the company is quite satisfactory during the year but the future market situation is changing to adversely due to increase in the cotton prices. Health and Safety The Company maintains working conditions which are safe and without risk to the health of all employees and public at large. International accounting standards. c. There are no doubts upon the Company’s ability to continue as a going concern. Business Strategy Aggressive marketing strategy has been the major factor in HTML consistent profitability over the last years. Directors are pleased to report that: a. . The management is taking the view of consolidation for the moment and take advantage of new textile policy 2009 by reasonably enhancing its direct and indirect exports by improving productivity and quality.Related Parties The transactions between the related parties were made at arm’s length prices determined in accordance with the comparable uncontrolled prices method. e. The quality control certification will help to build up trust of new and old customers. Corporate & Financial Reporting Frame Work As required by the Code of Corporate Governance. The management has maintained safe environment in all its operations through out the year and is constantly upgrading their living facilities. Environments. as applicable in Pakistan have been followed in preparation of financial statements. The system of internal control is sound and has been effectively implemented and monitored. Proper books of account of the Company have been maintained. The financial statements prepared by the management of the Company present fairly its true state of affairs. The company has fully complied with the best practices of the transfer pricing as contained in the listing regulation of stock exchanges in Pakistan. markup rates and other input costs. f. In the light of the Company’s overall objectives the Board of Directors regularly review the Company’s strategy business plans and set performance targets accordingly. Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. cash flows and changes in equity. the results of its operations.
Shahnaz Umar Mr.598 Million. Audit Committee The Board of Directors in compliance with the code of corporate governance has established an audit committee. h. Fatima Nadeem Mrs. HBL Bank. There has been no material departure from the best practices of corporate governance as detailed in the listing regulations of the stock exchanges. Board Meeting During the year under review Six (6) meetings were held. Particularly. CFO. their spouses and minor children. Mr. Except as stated hereunder. Saeed Ahmad Khan Attendance 6 6 4 6 4 4 6 Acknowledgements The Directors take this opportunity to thank the Company’s Bankers. 2010 Chief Executive Officer . the name of its members are given in the Company profile. Attendance by each Director is as follows: Name of Director Muhammad Umar Virk Nadeem Aslam Butt Mrs.900.000 shares and gifted 1.000 Shares to his daughter Umaira Umar. Mr. 6. 2010 amount to Rs. a. The value of investment of contributory provident fund as at June 30. no trade in the shares of the company were carried out by the Directors.Director purchased 2. CEO. The pattern of shareholding as at June 30. Sadiya Umair Mr. United Bank of Pakistan. 2010 is annexed.732. Bank of Punjab. Operating and financial data and key ratio of six years are annexed. Umair Umar Mrs. Company secretary. NIB Bank and other financial institutions for their confidence in the Company. The Directors feel pleasure in expressing appreciation for the continued interest and support of all the shareholders. It is hoped that the staff and workers will continue to work with the same sense of devotion to achieve high standards and reach Company’s goals. Umair Umar . Umar Virk – Director purchased 300. The Directors are also glad to mention the dedication and devotion displayed by the staff and workers of the Company.g.253 Shares. On Behalf of the Board Nadeem Aslam Butt Lahore October 08. MCB Bank. i. b. National Bank.
9. The meetings of the Board were presided over by the Chairman and the Board met at least once every quarter. has been declared as defaulter by that stock exchange. being a member of a stock exchange. 5. including this company.STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE This statement is being presented to comply with the Code of Corporate Governance (the Code) contained in the Regulation No. The CEO and CFO duly endorsed the financial statements of the Company before approval by the Board. 10. a DFI or an NBFI or. Written notices of the Board meetings. All the powers of the Board have been duly exercised and decisions on material transactions. 7. 4. The Company has applied the principles contained in the Code in the following manner: 1. A complete record of particulars of significant policies along with the dates on which they were approved or amended is being maintained. 2. were circulated at least seven days before the meeting. The Board has developed a mission statement.37 of the Listing Regulations of the Karachi Stock Exchange and Clause 49 (Chapter Vlll) of the Listing Regulations of the Lahore Stock Exchange for the purpose of establishing a framework of good governance. The directors have confirmed that none of them is serving as a director in more than ten listed companies. overall corporate strategy and significant policies of the Company. . The Company encourages representation of independent non‐executive directors. 3. whereby a listed Company is managed in compliance with the best practices of corporate governance. The Directors Report for this year has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed. have been taken by the Board. All the resident directors of the Company are registered as taxpayers and none of them has defaulted in payment of any loan to any banking company. including appointment and determination of remuneration and terms and conditions of employment of the CEO and other executive directors. The minutes of the meetings were appropriately recorded and circulated. along with agenda. At present the Board includes three (3) independent non‐executive directors. 6. No casual vacancy occurred during the year 8. The Company has complied with all the corporate and financial reporting requirements of the Code.
The related party transactions have been placed before the Audit Committee and approved by the Board of Directors 14. 13. 2010. For and on behalf of the Board Lahore: October 08. The staff is considered to be suitably qualified and experienced for the purpose and is fully conversant with the policies and procedures of the Company. We confirm that all other material principles contained in the Code have been complied with. of whom two are non‐ executive directors. 15. The Board has set‐up an effective internal audit function. 11. The terms of reference of the committee have been formed and advised to the committee for compliance. NADEEM ASLAM BUTT (Chief Executive Officer) . The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the Quality Control Review Program of the Institute of Chartered Accountants of Pakistan. The Board has formed an audit committee comprising three members. 12. 17. their spouses and minor children do not hold shares in the Company. 16. The statutory auditors and persons associated with them have not been appointed to provide any other services except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard. The meeting of the audit committee was held at least once every quarter prior to approval of interim and final results of the Company as required by the Code. that they or any of the partners of the firm.
98 7.55 11.542.12 0.85 .508 879.893 18.11 0.685 1.000 797.16 1.09 27.546 183.223.172 1.311 32.552.17 27.312 270.027 28.86 71.657 311.508.000.223 90.40 1.20 41:59 1.486.216 23.412.824 727.298 39.667 1.06 0.53 0.723 (48.119 2.681 1.27 0.598 47.752 1.029 170.34 71.232 1.07 0.48 15.431 186.457 163.878 48.68 1.248 215.743.863 116.55) 15.00 1.834 41.233 64.351 1.552.10 26.428.322 795.871 1.16 1.117 497 5.068 4.41 0.069 1.090.464 1.169 263.822 ‐ 211.840 42.076 158.24 13.03 0.817 1.061.93 0.429 23.725.84 71.312.99) 1.790 392.710.577 517.552.26 21:79 0.641 6.130 15.078 615.92) (1.86 1.539 218.012.145 1.413.46 39:61 0.893 14.365 216.729.105 21.607 1.31 15.17 14.93 5.058 295.04 1.552.s Equity Surplus on Revaluation on Fixed Assets Break ‐up Value Per Share (Rupees) Number of shares Financial Ratios Analysis (Annualized) Current Ratio Total Debt to Total Assets Acid ‐Test Ratio Debt Equity Debt Coverage Ratio Leverage Ratio Interest Coverage Ratio Fixed Assets Turnover Total Assets Turnover Per Share Results & returns Earning per Share Return on Capital employed‐ net Gross Profit to Sales Operating Profit To Sales Net Income to Sale (Profit margin) Return on Assets (ROA) 1.272 22.87) (3.27 1.09 1.465.49 2.356.15 71.94 11.13 15.92 5.61 7.33 0.630 14.89 12.682 228.19) 1.780 378.449 277.841 1.063.19 3.22 16.75 18.844 315.449.64 3.297 1.23 0.72 1.761 16.03 18.368.536 65.828 1.309.538 1.91 19.223 1.480.56 2.305.196 289.666.549 71.325 3.67 (2.18 5.723 8.116.491 203.379 1.593 280.93 46.893 14.272 276.567.242 65.286.052 2.64 11.76 1.978 1.564.329 23.F I N A N C I A L S U M M A R Y Amount Rs.131 48.85 1.721 38.500.425.721 2.04 2.466 ‐ 106.000 1.63 4.689 2.769 208 3.06 14.11 0.386 1.000 931.813 65.505.490 1.000 1.449 28.10 21:79 (0.86 23.061 247.462 252.211 40.68 3.639) 3.104 1.488.000 956.552.246 1.260 517.14 10.579 12.456 4.728 2.53 16.94 5.193 1.664.575.664 313.68 0.457 1.878 210.20 19.87 1.751 10.02 12.82 1.419 1.810 3.447.217 1. Profit before Taxation Provision for Taxation Profit after Taxation (Net Profit) Financial Position Current Assets Current Liabilities Operating Fixed Assets Total Assets Net Capital Employed Long Term Debts Share Holder.526 341.415 157.39 1.170 35.(000) 2010 2009 2008 2007 2006 (9 Months) 2005 Net Sales Cost of Sales Gross profit Administration Expenses Selling Expences Operating Profit Other Operating Income Profit before Interest & Taxation Other Operating Expenses Financial & Other Charges Share of profit Hira Terry Mills Ltd.315.132.450 27.46 12:88 0.355 15.637 39.714 6 2.524 619.76 30:70 0.393 640.50 (0.54 12.83 13.78 0.82 18.909 2.69 26.27 1.254 3.089 248.000 0.409 741.848 608.022.414 65.893 14.240.594 37.37 1.85 9.911 63.571 177.143 1.524.
all such transactions are also required to be separately placed before the audit committee. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Company. Our responsibility is to review. to the extent where such compliance can be objectively verified. (Chartered Accountants) Date: October 08. with the best practices contained in the Code of Corporate Governance. in all material respects. As part of our audit of financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. 2010 Lahore . or to form an opinion on the effectiveness of such internal controls. Based on our review. We are not required to consider whether the Board’s statement on internal control covers all risks and controls.REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE WITH BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate Governance prepared by the Board of Directors of HIRA TEXTILE MILLS LIMITED (“the Company”) to comply with the Listing Regulations of Karachi and Lahore Stock Exchanges in Pakistan where the Company is listed. 2009 requires the Company to place before the Board of Directors for their consideration and approval related party transactions distinguishing between transactions carried out on terms equivalent to those that prevail in arm’s length transactions and transactions which are not executed at arm’s length price recording proper justification for using such alternate pricing mechanism. We have not carried out any procedures to determine whether the related party transactions were undertaken at arm’s length price or not. Sub-Regulation (xiii) of Listing Regulations 37 notified by The Karachi Stock Exchange (Guarantee) Limited vide circular KSE/N-269 dated January 19. A review is limited primarily to inquiries of the Company personnel and review of various documents prepared by the Company to comply with the Code. We are only required and have ensured compliance of requirement to the extent of approval of related party transactions by the Board of Directors and placement of such transactions before the audit committee. Further. the Company’s corporate governance procedures and risks. whether the Statement of Compliance reflects the status of the Company’s compliance with the provisions of the Code of Corporate Governance and report if it does not. nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Company’s compliance. Further.
in our opinion(i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance. and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance. for the year then ended and we state that we have obtained all the information and explanations which. We believe that our audit provides a reasonable basis for our opinion and. evidence supporting the amounts and disclosures in the above said statements. after due verification. 2010 and the related profit and loss account. on a test basis. An audit also includes assessing the accounting policies and significant estimates made by management. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. as well as. 1984. were necessary for the purposes of our audit.2. It is the responsibility of the Company’s management to establish and maintain a system of internal control. and the business conducted. the expenditure incurred during the year was for the purpose of the Company’s business. (ii) (iii) 1/2 .1 to these financial statements with which we concur. to the best of our knowledge and belief. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. cash flow statement and statement of changes in equity together with the notes forming part thereof. 1984. proper books of account have been kept by the Company as required by the Companies Ordinance. Our responsibility is to express an opinion on these statements based on our audit. investments made and the expenditure incurred during the year were in accordance with the objects of the Company. evaluating the overall presentation of the above said statements.AUDITORS’ REPORT TO THE MEMBERS We have audited the annexed balance sheet of HIRA TEXTILE MILLS LIMITED (“the Company”) as at June 30. we report that: (a) (b) in our opinion. An audit includes examining. 1984 and are in agreement with the books of account and are further in accordance with accounting policies consistently applied except for change in accounting policy as stated in note 2.
cash flow statement and statement of changes in equity together with the notes forming part thereof conform with the approved accounting standards as applicable in Pakistan. 2010 and of the profit. its cash flows and changes in equity for the year then ended. in the manner so required and respectively give a true and fair view of the state of the Company’s affairs as at June 30. profit and loss account. and give the information required by the Companies Ordinance. 2010 Lahore 2/2 . and in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance. 1980 (XVIII of 1980) was deducted by the Company and deposited in Central Zakat Fund established under section 7 of that Ordinance. 1984. the balance sheet. (d) (Chartered Accountants) Mohammed Saleem (Engagement Partner) Date: October 08.(c) in our opinion and to the best of our information and according to the explanations given to us.
341 13.324.447 17.600.640 9.657 12.675 247. plant and equipment Long term investments Long term advances and deposits 4 5 6 1.361 7.463 29.162 1.161.659 1.241.023.809.918 52.020.924 1.527 5.506 1.716.536 136.786 1.982 294.285.500.221 2009 ----------Rupees ---------- CURRENT ASSETS Stores.641 3.758.810.817.863.597 29.673 6.089 3.528.214. 2010 2010 Note ASSETS NON-CURRENT ASSETS Property.498.129.136 18.714 17.567. spare parts and loose tools Stock-in-trade Trade debts Advances Trade deposits and short term prepayments Advance income tax Tax refunds due from government Cash and bank balances 7 8 9 10 11 12 13 14 64.585.283.862 The annexed notes from 1 to 44 form an integral part of these financial statements.HIRA TEXTILE MILLS LIMITED BALANCE SHEET AS AT JUNE 30.575 8.906 1.778.652.463.480.513 79.202.840.465.835.128.423.789.222.829 1.356.959.333.704. CHIEF EXECUTIVE OFFICER CHAIRMAN / DIRECTOR .223.
284. 3.385.865 2009 ----------Rupees ---------- SURPLUS ON REVALUATION OF PROPERTY.542 18 19 20 170.000 715.142.000 82.133 108.000.000 514.HIRA TEXTILE MILLS LIMITED BALANCE SHEET AS AT JUNE 30.198.262.840.151.477 28.063.722.000.255.247.911 267.520.856.918 The annexed notes from 1 to 44 form an integral part of these financial statements.500.000.000 (2009: 75.892.460.308.500.723 CURRENT LIABILITIES Trade and other payables Mark up accrued Short-term borrowings Current portion of non-current liabilities 21 22 23 24 256.837 750. PLANT AND EQUIPMENT NON .892.029.356.542 65.966 CHIEF EXECUTIVE OFFICER CHAIRMAN / DIRECTOR .517 CONTINGENCIES AND COMMITMENTS 25 3.710.223.393.520.000) ordinary shares of Rs.CURRENT LIABILITIES Long-term financing Liabilities against assets subject to finance lease Deferred liabilities 17 65.312.275.023.905 124.151 1.000 82.837 1.845 1.729.862 255.000.252 220.127.116.118.000 265.413. 2010 2010 Note EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorized capital 75.437.289 69.000 715.944 15.167 82.10 each Issued.865 1.463. subscribed and paid up capital Reserves Un-appropriated profit 15 16 750.892.127 1.555 90.515 1.
877.432 23.210.029.594.368.730 392.183 394.001 39.613 6.353 378.104.HIRA TEXTILE MILLS LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30.009 42.354.48 The annexed notes from 1 to 44 form an integral part of these financial statements.165 248.436 47.591 2.908. CHIEF EXECUTIVE OFFICER CHAIRMAN / DIRECTOR .916 (27.296 2.573 230.167) 40.975 263.260.03 Distribution cost Administrative expenses Other operating expenses Finance cost 29 30 31 32 Share of profit of jointly controlled entity Profit before taxation Provision for taxation Profit for the year Other comprehensive income Total comprehensive income Earnings per share .768.827.271.429.132. 2010 2010 Note Sales .978 1.137 2.basic and diluted 5 33 28.833.813 48.877.526.net Cost of sales Gross profit Other operating income 28 26 27 2009 ----------Rupees ---------3.972 248.566 2.524.978 608.728.972 34 3.427.744 10.911 12.232.789.117.468 208.749 41.827.456.311 422.116.751.701 277.298.796.766 1.136 341.388.978 0.872.396 608.118.579.508.
562) 4.917.376) (119.620.384 (38.953) 169.048) (3.000 (109.260 (4.057.924 6.HIRA TEXTILE MILLS LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30.815 2.080.878.755 208.107.072 (60.020.502 12.127) (20.431.032.500 (4.net Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR 14 (11.265) 17.423.585.701) 263.505.057) (13. plant and equipment Provision for employee benefits Share of profit of jointly controlled entity Finance cost 277.779.685.526.389) (320.125.718) 2.104.252 (279.232.056.409 28.911) 341.997.342.351) 15.673 (10.353 585.237) 288.750.621 (299.022.585.720.960.202 609.665.771.180) 163.218) (56.961.924 Increase in stores. CHIEF EXECUTIVE OFFICER CHAIRMAN / DIRECTOR .296.746) (230.305.840 3.977) 57.935.373 (47.465. spare parts and loose tools (Increase) / decrease in stock-in-trade Decrease in trade debts (Increase) / decrease in advances Increase in trade deposits and short term prepayments Increase in trade and other payables Cash generated from operations Finance cost paid Employee benefits paid Taxes paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property.673) 8.182.140 (5.957) (118.468. plant and equipment Increase in long term advances and deposits Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long term financing Payment of long term financing Payment of liabilities against assets subject to finance lease Decrease in short term borrowings .029.839. plant and equipment Proceeds from disposal of property.565.311 401.164) (26.659 The annexed notes from 1 to 44 form an integral part of these financial statements.137 78.057.968) (334.073 Working capital changes 2010 2009 ----------Rupees ---------12.419 (14.606.790) 950.527.630 (40.478.862 50.744 79.957.697 (86. plant and equipment Loss/(gain) on disposal of property.519) (11.600) (62.479.210.894.228) (112.821) 498.818) 42.423. 2010 Note CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Adjustments for: Depreciation on property.148.577) (46.318 (170.911.635) (8.135.471.109 17.558.464.187.486.791) (7.407) (43.648) (54.579.522.561.951) 567.101.
978 265.221.015.827.887 1.500.827.887 1.HIRA TEXTILE MILLS LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30.500. 2010 Capital Reserve Share capital Share of other General reserve comprehensive income of associate Revenue Reserve Un-appropriated profit Sub-total Total ------------------------------------.520.837 The annexed notes from 1 to 44 form an integral part of these financial statements.500.535.865 248.000 82.837 346.000 263.000 715.520.as restated Profit for the year Other comprehensive income for the year Balance as at June 30. CHIEF EXECUTIVE OFFICER CHAIRMAN / DIRECTOR .887 1.413.972 1. 2009 Profit for the year Other comprehensive income for the year Balance as at June 30.837 1. 2010 715.978 347.972 514.972 596.000 715.893. 2008 .000 82.877.393.721.877.515.827.061.877.865 248.978 1.312.000 82.063.Rupees ------------------------------------Balance as at June 30.865 248.241.520.
The Company has elected to present one statement only. STATEMENT OF COMPLIANCE AND SIGNIFICANT ESTIMATES STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan. The change in accounting policy does not have any impact on the presentation of current and comparative transactions of the Company and on earnings per share. 1984. The revaluation on fixed assets does not form a part of equity in Pakistan and hence. Lahore. The registered office of the Company is situated at 44 – E / 1. which became effective from January 01. not been considered as part of other comprehensive income. which is the Company's functional as well as presentation currency. the provisions or directives of the Companies Ordinance. 2. In case requirements differ.1 "Presentation of Financial Statements" The Company applies revised IAS .1 These financial statements are presented in Pak Rupees.2 2 2.1 "Presentation of Financial Statements". provisions of and directives issued under the Companies Ordinance. 1984. the Company has adopted the following new Standards and Interpretations issued by the International Accounting Standards Board (the "IASB") and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB and as notified by the SECP that are relevant to its operations and effective for Company's accounting period beginning on or after January 01.1 International Accounting Standard .HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.2 ADOPTION OF NEW INTERNATIONAL FINANCIAL REPORTING STANDARDS In the current period. Said application requires the Company to present all changes in owners equity in the statement of changes in equity and all non-owner changes in equity in the statement of comprehensive income. 1984. . Gulberg III. 2007 and February 16. Tehsil and District Kasur in the province of Punjab. 1984 shall prevail. 2009. 2010. 2. 2010 1 1. This presentation has been applied as of and for the year ended on June 30. The principal activity of the Company is manufacturing and sale of yarn. Approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board as are notified under the Companies Ordinance. 2009.1 LEGAL STATUS AND ACTIVITY Hira Textile Mills Limited ("the Company") was incorporated in Pakistan on January 31. The Company was listed on Karachi and Lahore Stock Exchanges of Pakistan on February 15. The project is located at Manga Raiwind Road. 1991 as a public limited Company under the Companies Ordinance. 1.2. 2007 respectively.
2. 2010 January 01. The Company's accounting policy on borrowing costs. 2011 January 01. The amendments introduce a three level hierarchy for fair value measurement disclosures and require entities to provide additional disclosures about the relative reliability of fair value measurement. Adoption of this amendment to IFRS-7 has not any effect on these financial statements as the carrying values of the financial assets and financial liabilities approximate to their fair values. 2011 February 01. The option of immediately expensing those borrowing costs has been removed.2. the definition of borrowing cost has been amended so that interest expense is calculated using the effective interest method defined in IAS 39 'Financial Instruments: Recognition and Measurement'. This standard requires an entity to capitalise borrowing costs directly attributable to the acquisition.9 Financial Instruments January 01. 2010 January 01. 2010 January 01. as disclosed in note 3. 2. interpretations are effective for accounting periods beginning on or after the date mentioned against each of them: Effective from Amendments to IAS 7 Statement of Cash Flows Amendments to IAS 17 Leases Amendments to IAS 24 Related Party Disclosures Amendments to IAS 32 Financial Instruments Presentation Amendments to IFRS . 2009). The management has assessed that the change in interest calculation method would not have a material impact on the Company's financial statements. 2010 2. 2013 The management believes that these accounting standards and interpretations do not have any .HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.2 International Accounting Standard .2 Group Settled Transaction Amendments to IFRS . construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) as part of the cost of that asset.3 Amendments to IFRS-7 Improving disclosures about financial instruments The amendment to IFRS 7 expanded the disclosures requirements more closely in line with US standards.23 " Borrowing Cost" IAS 23 (Revised) . 2010 January 01. 2010 January 01. complies with the above mentioned requirement to capitalise borrowing costs and hence this change has not impacted the Company's accounting policy. Further.'Borrowing Costs' (effective from annual periods beginning on or after January 01. 2010 July 01.5 Non-current Assets Held for Sale and Discontinued Operations IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments Amendments to IFRIC 14 Prepayments of a Minimum Funding Requirement IFRS .3 NEW ACCOUNTING STANDARDS AND IFRS INTERPRETATIONS THAT ARE NOT YET EFFECTIVE The following IFRSs. 2.19.
IFRS-3 Business Combinations-July 01. to be recognized as an equity transaction. under which segment information is presented on the same basis as that used for internal reporting purposes. introduces the concept of nonvesting conditions. while maintaining control.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. any interest retained in the former subsidiary will be d t f i l ith th g i l g i d i th fit d l t / th .'Business Combinations' (applicable for annual periods beginning on or after July 01. contingent consideration to be measured at fair value. requires non-vesting conditions to be reflected in grant-date fair value and provides the accounting treatment for non-vesting conditions and cancellations. Implication of amendment to this standard does not have effect on these financial statements. 2009 Amended IAS 27 . IFRS .(effective for annual periods beginning on or after January 01. International Financial Reporting Standard .8 "Operating Segments" IFRS .8 requires "management approach".4 ACCOUNTING STANDARDS. or at its proportionate interest in the identifiable assets and liabilities of an acquiree. IFRS AND INTERPRETATIONS TO EXISTING STANDARDS THAT ARE EFFECTIVE AND NOT APPLICABLE TO THE COMPANY The following accounting standards and interpretations to existing standards have been published and are mandatory for the Company’s accounting year beginning on or after January 01. 2009. 2009) clarifies the definition of vesting conditions. with the related gain or loss recognized in profit and loss account / other comprehensive income and any non-controlling (minority) interest to be measured at either fair value. 2009) broadens among other things. Implication of this standard does not have effect on these financial statements. on a transaction-by-transaction basis. any pre-existing interest in an acquiree to be measured at fair value. Amendment to IAS 27-July 01. interpretations and amendments when applicable. 2009 IFRS 3 (Revised) .January 01. transaction costs other than share and debt issue costs to be expensed. 2009) requires accounting for changes in ownership interest by the group in a subsidiary. The adoption of this standard has no material impact on the financial statements except change in presentation of segment information.Consolidated and Separate Financial Statements (effective for annual periods beginning on or after July 01.8 "Operating Segments".2 Share based payment . 2. Implication of revision to this standard does not have effect on these financial statements. the definition of business. The Company would comply with these standards. 2010 impact on the present transactions of the Company. 2009 Amendment to IFRS 2 . 2009 but are not relevant for the Company’s operations: IFRS . resulting in more acquisitions being treated as business combinations. When the group loses control of subsidiary.Share-based Payment . which replaces IAS -14 " Segment Reporting" and became effective from January 01.
‘off-plan’. Amendments to IAS-39 and IFRIC-9: Embedded derivatives . 2008 IFRIC 16 . 2009 Amendments to IAS 39 .Financial Instruments: Recognition and Measurement . IFRS 4 Insurance Contracts.15 Agreements for the construction of real estate . 2009) clarifies the recognition of revenue by real estate developers for sale of units. 2009 IFRS 4 . that is.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. 2009 Amendments to IAS 39 and IFRIC 9 . Implication of amendment to this standard does not have effect on these financial statements. the cumulative gain or loss on the hedging instrument that was determined to be effective is reclassified to profit and loss account / other comprehensive income. Implication of interpretation does not have effect on these financial statements.January 01. before construction is complete.16 Hedge of net investment in a foreign operation .January 01.Embedded Derivatives (effective for annual periods beginning on or after January 01. Amendments to IAS-39 Financial instruments. 2009). such as apartments or houses. Implication of amendment to this standard does not have effect on these financial statements.January 01. the hedging instrument may be held by any entity within the group except the foreign operation that is being hedged and that on disposal of a hedged operation.Hedge of Net Investment in a Foreign Operation (effective for annual periods beginning on or after October 01. 2008) clarifies that net investment hedging can be applied only to foreign exchange differences arising between the functional currency of a foreign operation and the parent entity’s functional currency and only in an amount equal to or less than the net assets of the foreign operation.Agreement for the Construction of Real Estate (effective for annual periods beginning on or after January 1. IFRIC . The IFRS makes limited improvements to accounting for insurance contracts until the Board completes the second phase of its project on insurance contracts.Insurance Contracts (effective for annual periods beginning on or after January 01. 2009). IFRIC . 2009 IFRIC 15 . Amendments require entities to assess whether they need to separate an embedded derivative from a hybrid (combined) financial instrument when financial assets are reclassified out of the fair value. Implication of amendment to this standard does not have effect on these financial statements. 2009) clarifies the application of existing principles that determine whether specific risks or portions of cash flows are eligible for designation in a hedging relationship.Eligible hedged Items (effective for annual periods beginning on or after July 01. The standard also requires that an entity issuing insurance contracts (an insurer) to disclose information about those contracts. . 2010 measured at fair value with the gain or loss recognized in the profit and loss account / other comprehensive income.January 01.October 01. Implication of amendment to this standard does not have effect on these financial statements.
or in the period of the revision and future periods. Revisions to accounting estimates are recognized in the period in which estimates are revised if the revision affects only that period.17 Distribution of non-cash assets to owners .Distributions of Non-cash Assets to Owners (effective for annual periods beginning on or after July 01. IFRIC . 2009) states that when a Company distributes non cash assets to its shareholders as dividend. 2009 IFRIC 18 . income and expenses. If there are subsequent changes in the fair value before the liability is discharged.Transfers of Assets from Customers (to be applied prospectively to transfers of assets from customers received on or after July 01. 2009 IFRIC 17 . plant and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services (such as a supply of electricity. this is recognized in equity.July 01. the liability for the dividend is measured at fair value. This interpretation clarifies the requirements of IFRS for agreements in which an entity receives from a customer an item of property. if the revision affects both current and future periods. 2. Implication of interpretation does not have effect on these financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. The estimates and associated assumptions are based on historical experience and various other factors that are belived to be reasonable under circumstances. 2009). the difference between the carrying amount and fair value is recognized in the profit and loss account / other comprehensive income.5 SIGNIFICANT ESTIMATES The preparation of financial statements in conformity with approved accounting standards require management to make judgments. estimates and assumptions that affect the application of policies and reported amounts of assets. . IFRIC . 2010 The interpretation allows an entity that uses the step-by-step method of consolidation an accounting policy choice to determine the cumulative currency translation adjustment that is reclassified as to profit or loss on disposal of a net investment as if the direct method of consolidation had been used. Implication of interpretation does not have effect on these financial statements. Judgments made by management in the application of IASs that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next years are disclosed in the ensuing paragraphs. results of which form the basis of making judgment about carrying value of assets and liabilities that are not readily apparent from other sources.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. gas or water). When the non cash asset is distributed.July 01.18 Transfer of assets from customers . Implication of interpretation does not effect on these financial statements. Actual results may differ from these estimates. liabilities.
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ACCOUNTING CONVENTION These financial statements have been prepared under historical cost convention modified by: certain property. building on freehold land. plant and equipment have different useful lives. PLANT AND EQUIPMENT Property. 2010 EMPLOYEE BENEFITS The Company operates unfunded gratuity scheme (defined benefit plan) for all its permanent mill employees who have completed the minimum qualifying period of service as defined under the respective scheme. Freehold land. Capital work-in-progress and stores held for capital expenditure are stated at cost. Assets' residual values. Instances where the Company's view differs from the view taken by the income tax department at the assessment stage and the Company considers that its view on items of material nature is in accordance with the law. . plant and equipment on regular basis. 3 3. plant and equipment except freehold land. plant and equipment with corresponding effect on the depreciation charge and impairment. The calculation requires assumptions to be made of future outcomes. building on free hold land and plant and machinery are stated at revalued amounts. if significant then useful lives are reviewed and adjusted. the principal ones being in respect of increases in remuneration and discount rate used to derive present value of defined benefit obligation. if appropriate at each balance sheet date. the amounts are shown as contingent liabilities. Cost also includes borrowing cost wherever applicable. Any change in the estimates in future years might affect the carrying amounts of the respective items of property.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. PLANT AND EQUIPMENT The Company reviews the useful lives of property. Provisions are made annually to cover the obligations under the schemes on the basis of actuarial valuation and are charged to income . if any.2 PROPERTY. When significant parts of an item of property. The assumptions are determined by independent actuaries after three years. PROPERTY. plant and machinery and capital work-in-progress are stated at cost less accumulated depreciation and impairment in value. plant and equipment at revalued amount financial instruments at fair value recognition of certain employee benefits at present value investment in jointly controlled entity at equity method PRINCIPAL ACCOUNTING POLICIES ADOPTED ARE STATED BELOW: 3. TAXATION The Company takes into account the current income tax law and decisions taken by appellate authorities.
plant and equipment is credited to surplus on revaluation of property. only when it is probable that future economic benefits associated with item will flow to the Company and the cost of item can be measured reliably.6 STOCK IN TRADE . plant and equipment to the extent of incremental depreciation charged on the related property. 3. Depreciation is charged to profit and loss account applying the reducing balance method over its estimated useful life at the rates specified in note 4 to the financial statements. Provision is made for obsolete and slow moving stores and spares based on management estimates. Items in transit are valued at cost comprising invoice value plus other charges thereon. These are transferred to specific assets as and when these assets become available for use. 3. All expenditures connected with specific assets incurred during installation and construction period are carried under capital work-in-progress. plant and equipment is disposed off. Subsequent costs are included in the assets' carrying value or recognised as a separate asset. Depreciation on additions to property. 3. plant and equipment becomes available for use while no depreciation is charged after the day when property. plant and equipment. plant and equipment. SPARE PARTS AND LOOSE TOOLS Stores and spares are valued at lower of moving average cost and net realizable value less allowances for obsolete and slow moving items.3 ASSETS SUBJECT TO FINANCE LEASE Assets subject to finance lease are depreciated over their expected useful lives on the same basis as owned assets. 3.5 STORES. All investments are de-recognized when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. All other repair and maintenance costs are charged to income during the year in which they are incurred. The surplus on revaluation of property.4 INVESTMENTS Investments in equity instruments of jointly controlled entities are initially recognised at cost and subsequently accounted for at the Company's share of their underlying net assets using the equity method of accounting. plant and equipment is charged from the day at which property. 2010 they are recognized as separate items of property.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. as appropriate. Surplus arising on revaluation of property. The gain or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and the carrying amount of the asset is recognised as an income or expense. plant and equipment during the year is transferred to un-appropriated profit.
assets are written down to their recoverable amounts and the resulting impairment loss is recognised in income currently. 3. consists of direct material and labour and a proportion of manufacturing overheads based on normal capacity. The gain or loss relating to financial instruments is recognized immediately in the profit and loss account. Particular recognition methods adopted by the Company are disclosed in the individual policy statements associated with each item of financial instruments. Where impairment loss subsequently reverses.7 IMPAIRMENT The Company assesses at each balance sheet date whether there is any indication that property. Where carrying values exceed the respective recoverable amounts. If such indication exists.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. the carrying amounts of such assets are reviewed to assess whether they are recorded in excess of their recoverable amount.8 FINANCIAL INSTRUMENTS Financial assets and financial liabilities are recognized at the time when the Company becomes a party to the contractual provisions of the instrument and de-recognized when the Company loses control of contractual rights that comprise the financial asset and in case of financial liabilities when the obligation specified in the contract is discharged. 3. plant and equipment may be impaired. 3. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Reversal of impairment loss is recognised as an income. the depreciation charge is adjusted in future periods to allocate the assets revised carrying amount over its estimated useful life. cancelled or expired. the carrying amount of the asset is increased to the revised recoverable amount but limited to the carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognised for the asset in prior years. Average manufacturing cost in relation to work-in-process and finished goods. Net realizable value signifies the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale.9 OFFSETTING OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES . Where an impairment loss is recognised. 2010 These are valued at the lower of cost and net realizable value applying the following basis: Raw material Work-in-process Finished goods Waste Weighted average cost Average manufacturing cost Average manufacturing cost Net realizable value Raw material in transit is stated at invoice price plus other charges paid thereon up to the balance sheet date.
3. 2010 Financial assets and financial liabilities are offset and the net amount reported in the financial statements only when there is a legally enforceable right to set-off the recognised amount and the Company intends either to settle on net basis or to realize the assets and settle the liabilities simultaneously.12 TRADE AND OTHER PAYABLES Liabilities for trade and other payables are carried at their cost which is the fair value of the consideration to be paid in the future for goods and services received whether billed to the Company or not. Bad debts are written off when identified. All other leases are classified as operating leases. 3. Lease payments are apportioned between finance charges and reduction of the liabilities against assets subject to finance lease so as to achieve a constant rate of interest on the remaining balance of the liability. in which case they are capitalised in accordance with the Company's general policy on borrowing costs.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. The liabilities are classified as current and long-term depending upon the timing of payment. IJARAH TRANSACTIONS 3. For the purpose of cash flow statement. at the present value of the minimum lease payments. 3. Rentals payable under operating leases are charged to profit and loss account on a straight-line basis over the terms of the relevant lease. Finance charges are charged to profit and loss account. 3. Benefits received and receivable as an incentive to enter into an operating lease are also deferred on a straight-line basis over the lease term.11 CASH AND CASH EQUIVALENTS Cash and cash equivalents are carried in the balance sheet at cost except for foreign currency deposits.10 TRADE DEBTS AND OTHER RECEIVABLES Trade debts and other receivables are carried at original invoice amount less an estimate made for doubtful debts based on review of outstanding amounts at the year end. unless they are directly attributable to qualifying assets. cash and cash equivalents consist of cash in hand and balances with banks.13 LEASES Leases are classified as finance lease whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.14 . The corresponding liability to the lessor is included in the balance sheet as liabilities against assets subject to finance lease. Assets held under finance leases are recognised as assets of the Company at their fair value at the inception of the lease or. if lower.
HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. Cumulative net unrecognized actuarial gains and losses at the end of previous year which exceeds 10% of the present value of the Company’s gratuity is amortised over the average expected remaining working lives of the employees.16 PROVISIONS Provisions are recognized when the Company has a present. Details of the scheme are given in relevant note to the financial statements. 2010 Ujrah payments under an Ijarah are recognized as an expense in the income statement on a straight line basis over the Ijarah term unless systematic basis is representative of the time pattern of the user's benefit . legal or constructive obligation as a result of past events. 3. Provisions are made annually to cover the obligations under the schemes on the basis of actuarial valuation and are charged to income. it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. The assumptions are determined by independent actuaries after every three years.33% of the basic salary. 3. Contributions are charged to profit and loss account. Equal monthly contributions are made both by the Company and the employees at the rate of 8. even if the payments are not on that basis.15 EMPLOYEE BENEFITS The main features of the schemes operated by the Company for its employees are as follows: DEFINED BENEFIT PLAN The Company operates unfunded gratuity scheme ( defined benefit plan ) for all its permanent employees at mill who have completed the minimum qualifying period of service as defined under the respective scheme. DEFINED CONTRIBUTION PLAN The Company also operates a provident fund scheme for all its employees of head office who have completed the minimum qualifying period of service as defined under the respective scheme. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. and a reliable estimate of the amount of obligation can be made. The amount recognized in the balance sheet represents the present value of defined benefit obligations as adjusted for unrecognized actuarial gains and losses. 3. COMPENSATED ABSENCES The Company provides for compensated absences of its employees on unavailed balance of leaves in the period in which the leaves are earned.17 REVENUE RECOGNITION .
rebates and exemptions available. 2010 Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business. Export rebate is recognized on accrual basis at the time of making the export sales.27" and "Technical Release . are added to the cost of those assets. Dividend income from equity investments is recognized when the right to receive the payment has been established. for income covered under final tax regime.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. Revenue from sale is recognized on dispatch of goods to the customers. if any or minimum taxation at the rate of one half percent of the turnover whichever is higher. Profit on saving accounts is accrued on a time proportion basis. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. Subsequently. construction or production of qualifying assets. 3. 3.30 " of the Institute of Chartered Accountants f P ki t . the effects on deferred taxation of the portion of income subject to final tax regime is also considered in accordance with the requirement of "Technical Release . However.20 TAXATION CURRENT The charge for current taxation is based on taxable income at the current rate of taxation after taking into account applicable tax credits.18 BORROWINGS Borrowings are initially recorded at the proceeds received. All other borrowing costs are recognized in profit or loss in the period in which they are incurred. until such time as the assets are substantially ready for their intended use or sale. DEFERRED Deferred tax is provided using the balance sheet liability method in respect of all temporary differences at the balance sheet date between tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. which are assets that necessarily take a substantial period of time to get ready for their intended use or sale. In this regard. Finance costs are accounted for on an accrual basis and are included in current liabilities to the extent of amount unpaid.19 BORROWING COSTS Borrowing costs directly attributable to the acquisition. taxation is based on applicable tax rates under such regime. 3. borrowings are stated at amortized cost using the effective yield method. by reference to the principal outstanding and at the effective profit rate applicable.
21 FOREIGN CURRENCIES Transactions in foreign currencies are recorded at the rates of exchange prevailing on the date of transaction. . 2010 of Pakistan. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. if any to the extent that it is probable that taxable profit will be available against which such temporary differences and tax losses can be utilized. Monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing on the balance sheet date except where forward exchange contracts have been entered into for repayment of liabilities in that case. Exchange differences are included in profit and loss account. Prices for these transactions are determined on commercial terms and conditions. 3. Deferred tax liability is recognized for all taxable temporary differences while deferred tax asset is recognized for all deductible temporary differences and carry forward of unused tax losses. 3. based on the tax rates that have been enacted or substantively enacted at the balance sheet date.22 RELATED PARTY TRANSACTIONS Transactions with related parties are priced on arm's length basis. the rates contracted for are used. 3.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. Deferred tax is charged or credited to income except in the case of items credited or charged to equity in which case it is included in equity.23 DIVIDEND DISTRIBUTION Dividend distribution to the Company’s shareholders is recognized as a liability in the financial statements in the period in which the dividends are approved by the Company’s shareholders.
530.106 1.900 1.000) (18.736.217 2.446.152.710 150.919.219) 31.217) 74.000 18.048.006.283.128.718.217) 6.000.676.824.022.057 2.600.351.884) (64.772.275.488 16.503 10.147 131.117.417) 21.884 (31.001.865.283.600.026.217 161.356 1.854 8.774.751.715 1.051 5.660 553.082.982 5 10 20 * Transfers include both inter category adjustments and transfer from assets held under finance lease to owned assets on completion / termination of respective arrangements.480.792 1.445 447.718 (3.661 (1.1 PROPERTY.533 39.446.588 1.043.296 1.466 1.756 625.417 192.941 596.879 38.736.718.964.730.878.638 1.417 (21.000 18.075 384.559 3.322.385.001. PLANT AND EQUIPMENT As at June 30.919.245 503. 2010 ----------------------------------------------------------------------.161 37.001.274 7.618.317.051) (5.000) 60.809.000 866.977 985.380.283.600 (610.059 4.068.808 17.149 2.828 1.488.385.216 1.000 14.697.216 129.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.072 2.748 6.619 161.776.913. 2010 As at July 01.166.219) 60.319) 72.409 (1.055 463. .070 24.091 12.230 235.000.776.429.444 115.504.863 21.250 217.287 117.286.315.101 2.358.419 1.941 61.686.686.144.057 2.014.964.118 31.973 502.809.721 659.002.920 382.135 86.898) 4.324.884 (64.170.426.825.312.006.368.539.000) (14.984.219) 7.503) (10. 2009 Transfers * As at June 30.668 (429.041.091.041.076.866. 2009 Depreciation Charge for the year / (Accumulated depreciation on disposals) Book value as at June 30.751.001 721.269 1. 2010 Cost / Revaluation Particulars As at July 01.735.913.773 250.881 1.511 10.304 5.250 145.828 1.884) 86.766 5 5 10 10 10 10 10 10 10 10 10 20 5.881.250 220.774.016.528 50.117.039.128.369 48.225.424.415 50.985 88.901 66.675 (1.034.736.942.748 78.778.479.776.939.004 38.136 129.350.169.543 14.944 - (5.001.884 64.877 7.866.322 15.349 26.776.293.393 1.864.479.256.884) 64.046.863 47.449.503 10.627 140. 2010 4 4.834 279.353 1.902.000.176 33.884 225.718 (3.654 16.356 1.001 32.421.518 Leased Plant and machinery Power house Vehicles 2010 2.863) (21.919 1.016.041.393 1.153 688.718.749 81.417) 32.941 75.582.041.408 36. 2010 Annual rate of depreciation % Additions / (Disposals) Transfers * As at June 30.828 1.634 8.859 2.845 382.984.006.Rupees ----------------------------------------------------------------------Owned Freehold land Building on freehold land Plant and machinery Electric installation Generator Power house Factory equipment Office equipment Telephone installation Tarpaulin Computers Furniture and fixture Vehicles 86.670 644.913.351.600 697.201.455 (3.914.618.505.217 14.981 50.
244.972.307 49.941 596.225 (1. 2008 Depreciation Charge for the year / (Accumulated depreciation on disposals) Book value as at June 30.718.621 1.209 (1.250 215.749 81.783.881 1.345.345.635 384.134 49.558.559.792 1.838 11.629.088 1.087.450 10.666 123.808 17.088 79.592.121.000) 43.941 61.866.518 58.540 1.195.446.160 750.056.168 (39.884 268.349 26.964.428.702.783. 2009 Annual rate of depreciation % Additions / (Disposals) Transfers * As at June 30.230 (1.681) 31.435.033) 5.884 225.681 66.615 146.283.708.607.149 2.279 22.300.896 616.039.945 382.497 8.428.000 18.001.006.106 1.500.913.500) 38.864.152.000.558.500) 39.905.000) (3.605.000 3.919.067 1.137.753.500) 38.033) 8.286.001.234.318 (1.880 522.234.274 86.990 1.877 7.681 (7.881 6.217 14.938 454.878.900 94.318 Note 4.905.317.137.538.296 7.455 982.176 33.951 (1.919 4.658.000 86.493.900 1.356 1.429.521 8.245 503.850 49.670.825 42.3 The depreciation charge for the year has been allocated as follows: Cost of sales Administrative expenses 27 30 .757 1.668 1.978 22.675 5 10 20 Transfers include both inter category adjustments and transfer from assets held under finance lease to owned assets on completion / termination of the respective arrangements.121.006.193 926.548.056.809.250 150.594.494.007.126 79.297 6.908.212 16.944 161.812 2.300 4.018 219.530.443.061.869 7.996 885.000) 192.057 2. 2010 2009 ----------Rupees ---------77.244 5 5 10 10 10 10 10 10 10 10 10 20 Leased Plant and machinery Power house Vehicles 2009 * 232.706 930.351.741.697.200 74.716.184 59.304 5.108.650.057 2.312. 2010 4.130.101 2.659 (5.014.573 48.984.356 1.431 1.349.148 498.778.606.021 178.812) (2.149. 2009 Cost / Revaluation Particulars (Restated) As at July 01.225.448.545.568 78.869) (7.875.265 1.588 1.000.311 392.043.599 15. 2009 ----------------------------------------------------------------------.358.471.169.043 1.619 28.721 659.488.741.238.828 1.000 43.863 47.670 644.453 74.845 382.190.855.092.046.606.144.647 1.053 2.371 3.681) 7.315.839.077 4.751.915.275.026.409 78.947 982. 2009 Transfers * As at June 30.197 724.263 565.354 12.504.592 35.137.654 16.000 (43.440 1.192 1.299 2.393 1.841 1.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.2 As at June 30.137.367.618.250 217.850.322.905.133.824.503 10.006.217 14.Rupees ----------------------------------------------------------------------Owned Freehold land Building on freehold land Plant and machinery Electric installation Generator Power house Factory equipment Office equipment Telephone installation Tarpaulin Computers Furniture and fixtures Vehicles 86.306.460.530.511 10.215.951 (1.033) 67.195.175 70.977.777 9.000 22.000 4.438.252 136.905.396 7.000) (43.230 235.159.016.577.014.787.445 447. 2008 (Restated) As at July 01.101 2.913 8.741.607.894 43.287 28.730.345.530.
328.540 20.217 1.526 5.154.4 The latest revaluation of free hold land.321) Negotiation Mr. Evaluators. 2010 4.202 1. usage and physical condition.973 534.600.032 Particulars Freehold land Building on freehold lan Plant and machinery 2010 2009 4.048.105.467 2.000 (305.706 145.845 175.600.345.345 Negotiation Negotiation Mr.219 1. 2010 at June 30.296 1. Plant and machinery 4.673 .899.741.000 379.800. Abdul Kareem 3.298. Planners. plant and equipment as at June 30.758.321 1. The basis used for revaluation of these property.Rupees ----------------------------------Machinery DOUBLER & TWISTER MACHINES Vehicle SUZUKI CULTUS MOTORCYCLE YAHAMA 555.199 1.907. 2004 by International Design Group (Architects.170.312.6 Description Cost Accumulated depreciation Book value Mode of disposal Particulars of buyers ----------------------------------.219 1. 2007 and resulting impairment was incorporated in the financial statements for that year. 2010 20.978 542. 2010 would have been as follows:Accumulated depreciation as Book Value as at June 30.267. plant and equipment are as follows: Free hold land The value of free hold land is ascertained according to the local market value.905.086.500 567. Planners.113.474 7. plant and equipment Gain/(Loss) on disposal of property.112.Rupees ----------------------------------Cost as at June 30. plant and equipment 74.086. Had there been no revaluation. building on freehold land and plant and machinery was carried as at January 31. Engineers.686.076. building on free hold land and plant and machinery was carried out by International Design Group (Architects.898 1. The earlier revaluation of freehold land. and book value of revalued property. the cost.305.5 The value has been determined with reference to prevailing prices of similar plant and machinery depreciated to account for the age.005 609.500 1. Iftikhar Ali 2010 2009 3.113. 2010 ----------------------------------. Assessors and Technical Consultants) as at April 2.177 1.356.000 55.002 396.140 (28.057. Evaluators.132.735.033 2.667. plant and equipment Proceeds from disposal of property.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. Engineers.155 445.269 1. Present day construction rates for different types of building structure depreciated to account for the age and Building on free hold land condition of the building.000 12. Assessors and Technical Consultants) which resulted in increase in values and such increase was incorporated in the financial statements for that year.502) 170.500 269. Habib Asad Mr.474 49.706 220.197 1.572 Disposal of property. accumulated depreciation.
664.985 47.331.000 110.1 7 This represent interest free deposits with various government agencies.778.506 900.90% 1.869.701 15.Unquoted Hira Terry Mills Limited .956. 2010 have been used for the purpose of application of equity method.640 47.1 2009 ----------Rupees ---------- 184.818. 10 each Share of profits 5.835.755.000 10.082 1.911 63.704.251.Jointly Controlled Entity Cost of Investment 18.363.288.640 247.149.513.97 46.729 40.104.506 4.947.920.283 32.152.1 Share of profits at beginning of year Share of profit for the year Share of profits 5.735.290. 2010 2010 Note 5 LONG TERM INVESTMENTS Investment at equity method .640 23.340.906 600.678.600 15.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.993 1.678.210. The latest audited financial results of Hira Terry Mills Limited as of June 30.162 2010 25.499 6.991.341 63.278.341 184.450.786 2009 .904.911 527.400 26.000) fully paid ordinary shares of Rs.128. SPARE PARTS AND LOOSE TOOLS Stores Spare parts and loose tools 31.420.635.210.325 2.047.104.500.136 85.652.163 100.342 628.701 110.506 900.341 294.41 46.906 4.000 13.450.879 64.500.670 40.407 11.801.906 900.000 63.640 5.835. Summarised financial information of Hira Terry Mills Limited are set out below: Total assets Total liabilities Net assets Sales-net Profit for the year Company's share of jointly controlled entity's profit for the year 2.000 9.90% 5.582.000 (2009: 18. STORES.363.2 5.1 6 10.152.094.152.386 52.911 13.000 14.667 1.660.545.906 6.3 Breakup value per share Percentage of holding LONG TERM ADVANCES AND DEPOSITS Balance at beginning of year Add: deposits made during the year Less: adjusted during the year Less: current portion Balance at end of year 11 6.2 The financial year of Hira Terry Mills Limited ends on June 30.863.
640.513 1.361 24.600.766) 12.103 55.unsecured.190.864 2.539.978 1.285 120.597 2010 6.527 10.318 22.773) 17. 2010 8 STOCK-IN-TRADE Raw material and components .354.136 9.2 10 These include Rs.463 69.574. These are secured against letters of credit.039.secured.1 9.498.409.739 67.unsecured.657 11 11.617.387 164.360 79.1 10.132.397 136. These represent advance expenses incurred in respect of letters of credit for import of raw material and stores.959.900. considered good Employees.428.654 million) receivable from jointly controlled entity in the ordinary course of business.321 22.902.020 8.591 2.1 9.430.531.1 10.202.249 765.1 ----------Rupees ---------1.649.214.000 19.333.863. 0.948 1.953 900.current Balance at end of year 33 12.379.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.447 4.285. considered good Letters of credit 4.319 18.2 10.716.in stores .1 6 6.451 46.370 (19. TRADE DEPOSITS AND SHORT TERM PREPAYMENTS L/C margin deposits Current portion of long term deposits Prepayments 11.569.000 1.229 16.663 2.628 161. Nil (2009: Rs.468 17.009 36.1 12 These are margins kept by various banks against negotiation of foreign letter of credit.090. spare parts and loose tools.427 900. considered good 9.889.119.secured.in transit Packing material Work-in-process Finished goods .waste Note 27.536 27 27 9 TRADE DEBTS Local .423.560.959 15.124.120 118.403. ADVANCES Advances to: Suppliers.390 29.528.946.768.952.056.285.809 15.810.000 88.227 16.2 These interest free advances are repayable within one year and are secured against employee retirement benefits and are recoverable from salaries of the employees.634. considered good Foreign .293.2 24.575 1. ADVANCE INCOME TAX Balance at beginning of year Add: paid during the year Less: provision for income tax .361 2009 .704.704 5.yarn .739.419.182.127 (10.129.
022.020.current accounts .308.6 24 34.2 18.552.000 230.000 250.331.000 15.653.238.000 235.714 ----------Rupees ---------- These represent accumulated difference of input tax on purchases and output tax payable.500.477 17 18 18.fully paid in cash .1 15 These include Rs. Reserves represent the share premium at Rs.000 23.000 142. 10 per share on 2.673 6.435 7.000 ordinary shares issued to general public during previous years and share premium at Rs.secured Habib Bank Limited .000.432 267.540 10.300 14.000.deposit accounts 1.000.Issued as bonus shares 230.552.540.336.10 each .1 The loan from HBL (“the loan”) was initially restructured vide letter no.659 1.901 12.000 71.000 ordinary shares issued through right offer in previous years.524.000.demand finance I Bank of Punjab .000.4 18.1 18.161.500.term finance Bank of Punjab .552. This represents surplus on revaluation of free hold land of the Company.283.000.924 14.542.410 16.000 715. CASH AND BANK BALANCES Cash in hand Cash with banks on: . ISSUED.585.652 282.000 Ordinary shares of Rs.032.000 235.Issued to general public .520.819 6.525 32.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.000 71.944 74.745 112.500. LONG-TERM FINANCING From banking companies .691 29.937. SUBSCRIBED AND PAID UP CAPITAL 2010 2009 Number of shares 23.000.819 17.279 947.909 81.78.331.695 10.000 127.1 15.1 4.2 16 The Company has only one class of ordinary shares which carries no right to fixed income.1 15.346.081 1. AE / 9939 dated August 31.938) in foreign currency accounts.000.500 316.000 35.029.161.3 18.demand finance II MCB Bank .000 250. 1999.000 715. The .878.025 95.000.000.520.520.1 14 13.791.093 84.014 (2009: Rs.5 18.745 282.000 25.000 23. There is no movement in the share capital during the year.552.000 3.000 25. 2010 Note 13 TAX REFUNDS DUE FROM GOVERNMENT Sales tax refundable Excise duty refundable Rebate receivable 13.520.demand finance MCB Bank .000 23. 2.801 170.term loan Letters of credit / term loan facility Less : current portion 18.553.000.315.5 per share on 25.784.384 348.225. 69.
As per the terms of restructuring. Habib Bank Limited again rescheduled the outstanding liability vide their letter No. payable biannually in arrear. along with insurance coverage in favour of Habib Bank Limited covering all risks as per bank policy and against personal guarantees of all the sponsoring directors of the Company.4 18. The first installment was repayable after fifteen months from the date of first draw down which was made in June 2007.3 18. During this period whole outstanding loan was paid. payable on a quarterly basis in arrears.466 million.5% per annum with a floor of 12.0% per annum was to be charged for the delayed period on the over due amount.0 % floor and no cap) per annum with 12. The loan carries markup at six months KIBOR plus 2. 1999 in accordance with repayment schedule with no mark up in future.0 % per annum and no cap (2009: KIBOR plus 1.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.0 % floor and no cap.5 . The loan is secured against first pari passu charge on present and future fixed assets and personnel guarantees of all sponsoring directors of the Company.240 million and at the time of restructuring the amount of outstanding liability was Rs. 2008. AE / 9939 dated August 31. This loan is secured by way of first pari passu equitable mortgage charge over present and future fixed assets. in case of delay of more than thirty days in any repayment.5 % with a floor of 12. The loans carry markup at the rate of six months KIBOR plus 300 bps (2009: six months KIBOR plus 300 bps) per annum payable bi-annually in arrear.. hypothecation charge on plant and machinery of the Company with existing charge of Rs. The principal is repayable in twenty four equal monthly installments starting from February 02. Mark up is chargeable at the average rate of six months offer rate of KIBOR plus 1.438 million is repayable in twenty four equal quarterly installments. According to new agreement the Company paid Rs. 464 million. The principal is repayable in twenty equal quarterly installments with grace period of one year after first disbursement which was made in June 2007. 623 million as at September 30. Bank could claim the entire outstanding liabilities including penal interest etc. This facility was obtained from Bank of Punjab to facilitate early repayment of TFCs. The loans carry markup at six months average KIBOR plus 300 bps (2009: six months average KIBOR plus 300 bps per annum with 12. This facility is obtained from MCB Bank Limited during the year against letter of credit due for import of machinery. SA / SANC / 050319 dated March 19. in case of default in payment of two installments in one calendar year. 1999 will become enforceable. This facility was obtained from MCB Bank Limited. payable on hl b h l d f h f 6 ll f d df 18.2 This facility was obtained from Bank of Punjab . 202. Moreover. the restructured package was to automatically stand cancelled with application of mark up at the rate of 14.0% on the entire balance. in lump sum together with mark up and other charges. 478. 116. 50 million as down payment and remaining amount of Rs. The principal is repayable in twenty equal quarterly installments after grace period of one year.The Company was given a further grace period of one year when it paid first installment in September 2008. 1998. 18. However. 2005 with a waiver of Rs. The loan is secured against first pari passu charge on present and future fixed assets and personnel guarantees of all sponsoring directors of the Company.50%) per annum payable quarterly on outstanding balance without any grace period.50% (2009: six months KIBOR plus 2.564 million) and personal guarantees of sponsoring directors. mark-up at the rate of 20.The Company was given a further grace period of one year when it paid first installment in September 2008. the loan was repayable in forty eight quarterly equal installments commencing from July 01. 564 million (2009: Rs. The loan was secured against first charge on all present and future fixed and current assets of the Company covering the entire Habib Bank Limited exposure having book value of Rs. In case of default in payments of loan or in case of further rescheduling.The loan carries markup at six months KIBOR plus 3% per annum with no floor or cap. 2010 ( ) y g aggregate limit of the loan was Rs.0 % and no cap). the restructured package would automatically stand cancelled and the rescheduling term of demand finance loan vide letter No.
Term facility will carry mark up at the rate of six months KIBOR plus 3.675 36.988.110 22.7 Maturity 6 months or less 6 .944 282.1 The Company has entered into lease agreements with various leasing companies to acquire plant and machinery and vehicles.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.0 % per annum to be reset on semi-annually basis and secured against lien on import machinery / inland documents for imports / local purchase of cotton bales only.289 19. The principal is repayable in thirty six equal monthly installments starting from November 10.959. The maturity profile is as follows: 18. These letter of credits are converted into term loan during the period. The present value of minimum lease payments has been discounted at an implicit interest rate ranging from 13.785 19.408. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE Note Present value of minimum lease payments Less: current portion 19. Related taxes. 34 million over current assets and personnel guarantees of all sponsoring directors of the Company.056.12 months 1 . on the maturity of respective letters of credit.063. Lease agreemnts against vehicles have been matured during the period and paid.8 19 The carrying amount under long term financing is same as its fair value.553.745 36.6 The Company has imported machinery against two letters of credit opened with MCB Bank Limited.289. 2010).568 45. One letter of credit is payable on October 14. 2010 monthly basis.008 26.446.054.476 348.99% to 14.390. The rentals under these lease arrangements are payable on monthly and quarterly basis.909 18.64%) per annum. There are no financial restrictions in lease agreements.821. As per arrangement with MCB Bank Limited. The Company has an option to purchase the assets after expiry of the lease term and has the intention to exercise the option. The loan is secured against first pari passu charge of Rs.484 46. 2010.865 267. will be converted into term loan facility expiring after three years starting from the maturity of respective letter of credit (i.79% to 18.5 years 2010 2009 --------. 2009 and the other on February 22.881 12.454 69.Rupees ------14. 18.e.719 28. February 22.794 49.349. 2009.331.626.029.248 .Rupees --------65.833. replacements and insurance costs are borne by the Company. repairs.317 170. 19.167 55.84% (2009: 15.722.308. 67 million over fixed assets and first pari passu charge of Rs.880. These are payable in 720 days from bill of lading.2 The reconciliation between minimum lease payments and its present value is as under: Note Minimum lease payments Not later than one year Later than one year but not later than five years 2010 2009 ------.714 15.469.2 24 2010 2009 ----------Rupees ---------28.
464.541.881 1.001 7.797 6. Actuarial valuation of these benefits is carried out on June 30.660.797 71.722.363.076.812 55.626.008 The carrying amounts of assets held under finance lease approximate their fair values as the rate used for discounting is the rate implicit in the lease.630 (7.289 Maturity 6 months or less 6 .660.3 Charge for the year .881 26.305.349.114 82.821.681 4.626.1 Movement in liability Balance at beginning of year Charge for the year Benefits paid during the year Balance at end of year 20.833.349.881 12.714 15.1.057) 7.167 13.1.821.079.558.660. 2010 Present value of obligation Un-recognized actuarial gain Note 2010 2009 ---------Rupees--------10.468.821.833.3 ---------Rupees--------7. 2010 Less: finance cost allocated to future periods Less: current portion Present value of minimum lease payments Not later than one year Later than one year but not later than five years 19.008 26.262.348. 2010 using "Projected Unit Credit Method".167 28.722.501 6.008 7.373 (8.12 months 1 .577) 10.719 28.2 Balance sheet reconciliation as at June 30.001 20.001 20.988.076.723 Provision has been made on the basis of actuarial assumptions.988.289 55.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.per annum Expected rate of increase in salaries .1.1 20.904 28.1.911 7.722 69.624.5 years 8.988.023.3 The maturity profile is as follows: 12.349.076.797 7.001 62. 20 DEFERRED LIABILITIES Employee benefits Deferred tax liability 20.2 10. The assumptions are determined by independent actuary after every three years.441.1. Assumptions used for valuation for the scheme are as under: 2010 Discount rate .1 20.428 8.940.076.per annum Expected remaining life time of employees 12% 11% 5 years 2009 12% 11% 5 years 20.797 10.660.720.695 47.714 15.292.719 28.001 12.167 28.240 55.033 15.186.076.
789) (72.950.Secured Sanctioned limit Rupees in million Cash finance 1.455.967) 71.373 7.770 2.818. 2010 Service cost Interest cost Acturial losses Expenses recognized in the profit and loss account 20.027.882 (1.277 12.277 23.255 162.892.276 736.127 2010 2009 ----------Rupees ---------23 SHORT-TERM BORROWINGS From banking companies.132 255.555 11. Workers' profit participation fund Balance at beginning of year Allocation / expense for the year Payments made during the year Balance at end of year 22.319 12.091 90.934 136.114 78.713 908.948 17.385.770 12.778 1.745.055 149.754 65.578) (77.391 73.244 569.109.1 21.081 (1.252 118.407.232) 22.409.305.194.004.185.967 2.794.305.895 5.248.282 2.164.079.282.454.407.370 12.2 775.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.407.283.198.1 21.2 21.370 22 MARK UP ACCRUED Markup accrued on: Long term financing Liabilities against assets subject to finance lease Short term borrowings 18.773 37.200.464.007.305.596 8.363.886 22.389) (76.770 5.010.516 24.400 12.978.910.881.974.719.321 146.404 618.175 .315 million (2009: Rs.2 These include Rs.722 49.318 100. Nil) advances from jointly controlled entity in the ordinary course of business.186.247.283.630 21 TRADE AND OTHER PAYABLES Creditors Accrued liabilities Letters of credit payable Advances from customers Workers' profit participation fund Worker's welfare fund Others 21.370 50.602 2.708. 48.026 15.390.835.2 Deferred tax liability on taxable temporary differences: Tax depreciation allowance Finance lease Deferred tax asset on deductible temporary differences: Provision for employee benefits Available tax losses 133.284.602 (2.250.408 45.532 256.094.487 52.772.160) 62.845 22.303 89.666.371) (73.
515 81.002 28.508. Please also refer to the note 18.5 23. These are secured against first hypothecation charge of Rs.79% ( 2009: 12.432 26.54 % (2009: 13. 2010 Finance against packing credit Finance against foreign bills Running finance Temporary overdraft 320 340 160 2. 2011.272 159.6 320.275. Rs.942. 2010 2009 ---------Rupees--------112.29% to 14.989 (2009: 2.3 23. 25 25. 507 million).60%) per annum.428 million) and personal guarantees of directors of the Company.1.2 23. first equitable mortgage charge on all present and future fixed assets and first hypothecation charge on plant and machinery of the Company.5 23.110) respectively.75% ) per annum.500) and Rs. the restructured package would automatically stand cancelled and consequently the original terms of loan shall apply.781 14.4 23. 2011.6 24 CURRENT PORTION OF NON-CURRENT LIABILITIES Note 18 19 Long term financing Liabilities against assets subject to finance lease 24.172. 428 million (2009 : Rs.75 % ) per annum.1 Current portion of long term financing and current portion of liabilities against assets subject to finance lease includes overdue installments of Rs. 12. These are secured against pledge of stocks of cotton lint and cotton yarn amounting to Rs.1 of the financial statements. 700 million) over current assets of the Company including work in process.133 The aggregate unavailed short term borrowings amount to Rs. first pari passu charge over current assets amounting Rs.963 35.4 23.50% ) per annum.022. These are secured against lien over export documents and personal guarantees of directors of the Company.03% to 14.3 23. 817 million (2009: Rs.524.e.437. 2011. These are secured against lien over export documents.124.097 23.901 1. The facility will expire on March 31.905 315. These facilities have been obtained from various banks under mark up arrangements and carry mark up ranging from 14. The facility will expire on March 31.59% (2009: 13. In such case an amount equal to adjustment of finance cost i.60% (2009: 12. 2011. 54.94% to 16.51% to 16.433.361. These facilities will expire on respective dates maximum by April 30.151. This represents booked overdraft due to cheques issued by the Company in excess of balance with banks which will be presented for payment in subsequent period.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. These facilities were obtained from a commercial bank and carry mark up rate ranging from 14.084 shall be payable by the Company.714 124.76% to 16.833. These facilities have been obtained from various commercial banks and carry mark up ranging from 14.151 23.03 % to 15. 1.719 108.1 In case of default in payment of rescheduled loan from Habib Bank Limited.12% to 16.947 159. lien over export documents and personal guarantees of directors of the Company.999.1 CONTINGENCIES AND COMMITMENTS Contingencies 25.077 million).000. 909 million (2009: Rs.213 million ( 2009: Rs.626.000 ( 2009: 562.255. These facilities have been obtained from a commercial bank and carry mark up at the rate ranging from 13. 101.721 1. . ranking hypothecation charge over current assets of the Company amounting to Rs.13 % to 16.930 million (2009: Rs.1 23. 812 million).165.801 12.856.460. These facilities will expire on various dates by March 31.
3 Commitments Letters of credit for import of: .342 17.523 13.174.958 244.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.689.053 249.778 123. 2010 2010 2009 ---------Rupees--------- 25.442 18.238.420 25.910.374 21.373.979.563 . spare parts and loose tools 164.2 Guarantees Guarantee issued by the Habib Bank Limited to Sui Northern Gas Pipelines Limited on behalf of the Company in the ordinary course of business 27.363 25.stores.plant and machinery .032.472.234.872.121 31.247 1.120 25.raw material .463.715.243.719.104.095 309.352 4.4 The aggregate amount of ujrah payments for Ijarah financing and the period in which these payments will become due are as follows: Not later than one year Later than one year and not later than five years 13.191.181 4.
HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.202.083.760.820.160.498 106.303.302 75.405 128.222.295 308.212.581 1.686.608.728.989.202.295 384.737.422.631 15.379.660.116.296 .139.238.336.275 2.707 128.906 15.189 43.591 1.598 1.102.931 1.610 2.904.116.111 3.NET Local 2010 Export Total Local 2009 Export Total --------------------------------------------------------------------Rupees -------------------------------------------------------------------Gross sales Finished goods Sales under SPO Waste Cotton Less: Sales return 1.598 3.671.608.583 1.134.111 1.999 1.741.138.008 621.538.583 1.540.102.027.999 177.854.606 43.138.116.066.538.066.275 864.524.997 177.222.737.676.303.584 1.973 864.498 106.908. 2010 26 SALES .021 788.525.272.610 1.530.526.904 2.
773 4.377.1 Raw material consumed Opening stock Add: purchases Less: cotton sold Less: closing stock 1.968.430.000 1.634 34.192 10.569.500.018 1.776.776 22.132.554 1.522 355.753.458 1.862 2.085.374 138.120 16.804 28.208 2.802 138.352.320.972 Less: finished stocks .216.531.014.041.625.764.007.165.464 million).628 2.984 2.056.567.132.948 1.776 92.310 Work-in-process .029.12.293.2 1.165. wages and benefits include employee benefits amounting to Rs.538 105.127.658.783.902.430.493.000 1.562.closing Cost of goods manufactured Finished stocks .350 6.783.568.240.416 137.638.978 1.866.944.402.closing Cost of finished goods sold Cost of cotton sold Cost of goods sold 27.442 21.721.776.118.590.841 9.2 165.232.969.355 1.opening Add : cost of goods manufactured Yarn purchased 8 17.779.320.415.634 8 164.266 17.987.805.802 120. wages and benefits Fuel and power Stores.306. 2010 2010 2009 ----------Rupees ---------1. spare parts and loose tools consumed Insurance Dyes and chemicals Depreciation Others Note 27.777.354.446.730 27 COST OF SALES Raw material consumed Packing material consumed Salaries.300.782.415.915.130 175.531.307.978 2.984 2.902.493. 2010 2009 ----------Rupees ---------- 28 OTHER OPERATING INCOME Income from financial assets Note .103 27.948 2.634 1.029.103 38.899.414.139.459.054 27.249.969.024 2.852 24.647.470 120.897.056.451 1.454 17.090.307.120 1.384 355.450.508.3 77.1 Salaries.611 35. 8.994 105.465 78.456.277.415.208 2.222 2.305 million (2009: Rs.658.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.961.676 1.139.opening Less: work-in-process .452 1.670 9.
767 25.510 4.782.382 48.250 825.673 2.785 1. 2010 Markup on advances given to jointly controlled entity Income from assets other than financial assets Gain on disposal of property.262.000 89.443 188.793 12.137.363 4.414 42.832.429.990 (2009: Rs.156.918 15.160 - . 585.2 460.143 725.444 958.965 1.833.586 1.920 45.385.400 4. rate and taxes Electricity.545.681 6.1 15.887 367.568 832.813 30.518.946. allowances and other benefits include provident fund amounting to Rs.575 41.131 14.994 1.383 706.850 686.635.000 120. allowances and other benefits Ujrah Payments Repair and maintenance Rents.177 137.467.000 120.994 715.320 686.292.967 954.432 1. water and gas Printing and stationery Vehicles running and maintenance Postage.285.298.685.017 39.000 150.769).3 30.250 1.2 Auditors' remuneration Annual audit fee Half year review fee Review report on Code of Corporate Governance Out of pocket expenses 500.553 118.647 944.521 281.117.519.000 55.001 14.798.089 901.468 30.838 20.092 1.181 715.1 Salaries.221 22.396 170.592. plant and equipment 29 DISTRIBUTION COST Local Commission Others Export Commission Freight / export forwarding charges Others 30 ADMINISTRATIVE EXPENSES Salaries.000 104.262.582 1.420 17.087 825.594.183 6.350 8.000 100.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.772 16.939. telephone and fax Fee and subscription Donations Entertainment Legal and professional charges Newspaper and periodicals Traveling and conveyance Insurance Auditors' remuneration Depreciation Others 6.2 4.994 31 OTHER OPERATING EXPENSES Workers' profit participation fund Workers' welfare fund 2010 2009 ----------Rupees ---------12.212.577.445. 30.915 585.396 1.000 35.553 352.250 Note 21.126 929.954.044 17. 623.
HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.901 269.552 million (2009: nil) at Rs.1 34.353 55. plant and equipment Exchange loss 32 FINANCE COST Markup on: .526.391. EARNINGS PER SHARE .392 28. nil) per ordinary share of Rs. 71.921. the directors have proposed to pay final cash dividend of Rs.long term financing .751.827.000 3.773 9.BASIC AND DILUTED The calculation of the basic earnings per share is based on the following data : Earnings Profit for the year 248.756.176.liabilities against assets subject to finance lease .766 34.029.48 71.913 23.574.519 8. Financial effect of the proposed dividend has not been taken in these financial statements and will be accounted for subsequently in the year when such dividend is approved. .609 217.354. 2001.460 7.768.972 Number of shares Weighted average number of ordinary shares outstanding Earnings per share ( Rupees ) 71. 2001 falls under final tax regime and hence tax has been provided under sections 154 and 169 of the Income Tax Ordinance. No figure for diluted earnings per share has been presented as the Company has not issued any instrument carrying options which would have an impact on earnings per share when exercised. 10 each for approval of the shareholders at the forthcoming Annual General Meeting.2 35 Basic earnings per share has been computed by dividing earnings as stated above with weighted average number of ordinary shares.182 263.000 0.978 2010 2009 ----------Rupees ---------- 34 34.431 341.877.452. DIVIDEND AND APPROPRIATION In respect of current year.304 2.136 The numerical reconciliation between the average tax rate and applicable tax rate has not been presented in these financial statements as the total income of the Company attracts minimum tax under section 113 of the Income Tax Ordinance.642.552.975 208.03 1.1 12 19.6 28.400.552. 2010 Loss on disposal of property.766 10.short term borrowings Bank charges and guarantee commission 33 PROVISION FOR TAXATION Current Deferred 33.165 10.136 208.258 9.354.00 (2009: Rs. 1.311 4.022.040.502 6.328.
716.265.996 4.946.906.004 560.330.400.550 677.021 .247.064.690 225.235 585.505.278 2.992 12.040 1.004 64.872.996 161. The Company in the normal course of business carries out transactions with various related parties. associated companies.1 37 1 1. of persons 36.110.218 No.500 125.000 4.147 159.884.129 159.249 75.709.616.475.127 3 2.365 1.308.996 225.641 121.996 1.398 6.105 1 3.396 (584. stores and spares Expenses charged Mark up charged on balance due Other transactions in ordinary course of business .004 116. DIRECTORS AND EXECUTIVES CHIEF EXECUTIVE DIRECTORS EXECUTIVES 2010 2009 2010 2009 2010 2009 -----------------------------------------------------------Rupees---------------------------------------------------------------Remuneration House rent Retirement benefits Motor vehicle expenses Utilities Others 1.451. directors.780 1.477 140.000 1.021) 390.232 623.000 1.930 242.379.470.616 48.990 7. TRANSACTIONS WITH RELATED PARTIES The related parties comprise jointly controlled entity.132 242.982.000 421.250 5.701.505.017 3 3.470 3 Chief executive officer. directors and executives have been provided with free use of the Company's maintained cars.721.182 12.net Transactions with Other related parties Remuneration paid to directors and chief executive of the Company Payment to Employees' Provident Fund Trust Compensation of key management personnel Remuneration of key management personnel during the year are as follows : Remuneration and other benefits Post employment benefits Payment of advance rent 4.702 270.083.446 882.184 512.225.960 1. Amounts due from and due to related parties are shown under receivables and payables and remuneration of directors and key management personnel is disclosed in note 36 to these financial statments.114 3 2.769 2010 2009 ----------Rupees ---------446.348 5.004 2.060.996 306.780 410.980 327.589 7.100. 2010 36 REMUNERATION OF CHIEF EXECUTIVE.115.837.550 4.490 145. key management personnel and post employment benefit plans.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.250 70.510 584. Other sgnificant transactions with related parties are as follows: Description Transactions with jointly controlled entity Sales of yarn and dyes and chemicals Purchases of towels.184 472.392 311.
Credit quality of the customer is assessed based on credit rating. through its training and management standards and procedures. The Board is responsible for developing and monitoring the Company’s risk management policies. The Company does not hold collateral as security. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other form of credit insurance. procedures and controls relating to customer credit risk management. aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. experience and supervision. The Audit Committee is assisted in its oversight role by Internal Audit. Exposure to credit risk The carrying amount of financial assets represents the maximum credit exposure. The Company. 38. The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. Further quantitative disclosures are included throughout these financial statements. To manage credit risk the Company maintains procedures covering the application for credit approvals. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills. policies and processes for measuring and managing risk. The Company’s credit risk exposures are categorized under the following headings: Counterparties The Company conducts following major types of transactions with the counterparties: Trade debts Trade debts are essentially due from local customers and from foreign customers against supply of yarn and the Company does not expect these counterparties to fail to meet their obligations. The maximum exposure to credit risk at the reporting date was: . Customer credit risk is managed by the Company’s established credit policy.Credit risk . The Board of Directors reviews and agrees policies for managing each of these risks. The majority of sales to the Company’s customers are made on specific terms. It is the Company’s policy that no trading in derivatives for speculative purposes shall be undertaken. The Company's Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. to set appropriate risk limits and controls. the Company’s objectives. Credit limits are established for all customers based on internal rating criteria. granting and renewal of counterparty limits and monitoring of exposures against these limits.Liquidity risk . The Company’s risk management policies are established to identify and analyze the risks faced by the Company. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. 2010 38 FINANCIAL RISK MANAGEMENT The Company has exposure to the following risks from its use of financial instruments: . the results of which are reported to the Audit Committee.Market risk This note presents information about the Company’s exposure to each of the above risks.1 Credit risk and concentration of credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. and the Company’s management of capital.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. Internal Audit undertakes both regular and ad-hoc reviews of risk management controls and procedures. The Company is exposed to credit risk from its operating activities primarily for local trade debts and advances . and to monitor risks and adherence to limits. As part of these processes the financial viability of all counterparties is regularly monitored and assessed.
The quoted market price used for financial assets held by the Company are the current bid prices.871 12.875.190.257. The Company manages liquidity risk by maintaining adequate reserves.772 22. Ageing analysis of trade debts Not past due Past due 0-30 days Past due 30-60 days Past due 60-90 days Over 90 days Impairment losses Based on age analysis.959 16.514 153. 45.local There is no single significant customer in the trade debts of the Company.119. The maximum exposure to credit risk for trade receivables at the reporting date by type of customer was: Yarn . medium and long term funding and liquidity management requirements.463 78.081 5. The management believes that trade debts are considered good and hence no impairment allowance is required in this regard. Included in note 23 to these financial statements is a listing of additional undrawn facilities that the Company has at its disposal to further reduce liquidity risk.423 8.027. 38.103 69. Liquidity and interest risk table The following table details the Company’s remaining contractual maturity for its non-derivative financial liabilities. Management closely monitors the Company’s liquidity and cash flow position. 2010 2010 2009 ----------.632.409. debtors and creditors concentration both in terms of the overall funding mix and avoidance of undue reliance on large individual customer. which has built an appropriate liquidity risk management framework for the management of the Company’s short. Ultimate responsibility for liquidity risk management rests with the Board of Directors.739 136.387. The financial instruments that are not traded in active market are carried at cost and are tested for impairment according to IAS-39.456 79.782. This includes maintenance of balance sheet liquidity ratios.632 6. The table has been drawn up based on the undiscounted cash flows of financial liabilities under long term financing agreements based on the earliest date on which the Company can be required to pay. by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.463 2.609 . unsecured . Fair values of financial assets and liabilities The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. Carrying amount and contractual cash flows of trade and other financial liabilities are approximately same.2 Liquidity risk management Liquidity risk reflects the Company’s inability in raising funds to meet commitments.143 Geographically there is no concentration of credit risk.498.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.359 86.343 9.136 24. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Company for similar financial instruments.649.126 136.Rupees ----------Trade debts Advances to staff.600.600.857.123. relationship with customers and past experience the management does not expect any party to fail to meet their obligations.considered good Bank balances 79.391 11.943.919.553.321 4.504 15. banking facilities and reserve borrowing facilities.745. The carrying amount less impairment provision of trade receivables and payables are assumed to approximate their fair values.136 765.795. The fair value of cross currency swaps is calculated as the present value of the estimated future cash flows.498.
315.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.833.801 170.167 1.822. 2010 Carrying amount 2010 Trade and other Payables Maturity up to one year Short term borrowings Maturity up to one year Long term financing Maturity up to one year Maturity after one year and up to five years Liabilities against assets subject to finance lease Maturity up to one year Maturity after one year and up to five years 38.470 914 649. while optimizing the return on risk.653 112. 309 million (2009: Rs.555 2009 ------------.133 256.255.3 Market risk Market risk is the risk that changes in market prices.437.1 Foreign currency risk management Pak Rupee (PKR) is the functional currency of the Company and as a result currency exposure arises from transactions and balances in currencies other than PKR.003 Commitments outstanding at year end amounted to Rs.308.Transactional exposure in respect of non functional currency monetary items.384 2009 USD 829.714 15. 38.460. The Company's potential currency exposure comprises.198.789. Exposure to currency risk The Company’s exposure to foreign currency risk is as follows based on notional amounts: 2010 USD Trade debts Cash and bank balances 648.144 859 830.896. Transactional exposure in respect of non functional currency monetary items Monetary items.247. .905 1.Rupees ------------- Transactional exposure in respect of non functional currency expenditure and revenues Certain operating and capital expenditure are incurred by the Company in currencies other than the functional currency. The potential currency exposures are discussed below.432 316.524.719 28.022. interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. denominated in currencies other than the functional currency of the Company are periodically restated to PKR equivalent.525 1. including financial assets and liabilities.988. and the associated gain or loss is taken to the profit and loss account. These currency risks are managed as a part of overall risk management strategy.783 26. .722. 12.3. 249 million) relating to letter of credits . The objective of market risk management is to manage and control market risk exposures within acceptable parameters. Certain sales revenue is earned in currencies other than the functional currency of the Company. such as foreign exchange rates.983.252 255.626.289 1.944 81.Transactional exposure in respect of non functional currency expenditure and revenues. The Company does not enter into forward exchange contracts. The foreign currency risk related to monetary items is managed as part of the risk management strategy.275.
331.Rupees --------USD 1 Sensitivity analysis A 10 percent strengthening of the Pak Rupee against the USD at June 30. spare parts and loose tools. 2010 2009 -------------% ------------Floating rate instruments Financial liabilities Short term financing Long term financing 13.51-16.Rupees --------------Decrease in profit and loss account 5.936 6. raw material and stores. 38.749) Fair value sensitivity analysis for floating rate instruments The following table demonstrates the sensitivity to a reasonably possible change in floating interest rates. 2010 would have increased (decreased) profit or loss by the amounts shown below.893. Profile At the reporting date the interest rate profile of the Company's interest bearing financial instruments was: Fixed rate instruments The Company is not having any fixed rate instruments. 2010 for import of plant and machinery.004) (282. 2010 2009 ---------------.91-15. on the basis that all other variables remain constant. with all other variables held constant.209. remain constant. The following significant exchange rates applied during the year: Average rate 2010 2009 --------.4 78.924 83. Sensitivity to interest rate risk arises from mismatches of financial assets and liabilities that mature in a given period.60 13.75 12. (1. 2009. This analysis assumes that all other variables.47 (1.423.255.3 A 10 percent weakening of the Pak Rupee against the US $ at June 30. The analysis is performed on the same basis for June 30. There is only an immaterial impact on the Company’s equity.4 81.Rupees ------------- .315.525) (1.Rupees --------------85.537.310.854) (316. of the Company’s profit before tax (through the impact on floating rate borrowings).94-16.379) 2010 2009 ------------. 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 and loss therefore. 2010 would have had the equal but opposite effect on US $ to the amounts shown above.745) (1. a change in interest rate would not affect profit or loss. in particular interest rates.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.54 12.82 Reporting date mid spot rate 2010 2009 ---------------.747.4 Interest rate risk The interest rate risk is the risk that the value of the financial instrument will fluctuate due to changes in the market interest rates.537.87-18.627.754.
7 Capital Risk Management The company’s objectives when managing capital are to safeguard the company’s 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.312.725. The Company manages its capital structure which comprises capital and reserves by monitoring return on net assets and makes adjustments to it in the light of changes in economic conditions.190.591.074.00% 13.865 2.020.050 17.413. The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values. 38. appropriation of amounts to capital reserves or/and issue new shares. 2010 2009 ------------.812.823.491 555.126 1.142.585.566.5 Equity price risk management The Company’s unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities.376.560.00% % Effect on profit before tax Rupees 12.738 17.317 288. In order to maintain or adjust the capital structure.872 1. or a liability settled. 2010 Increase / (Decrease) in basis points 2010 Short term borrowings Long term financing Liabilities against assets subject to finance lease 1.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30.872.659 1.570. The Company manages the equity price risk through diversification and placing limits on individual and total equity instruments.241.665.Rupees ------------Total borrowings Less: Cash and bank balance Net debt Total Equity Total capital Gearing ratio 1.924 1.679.260 3. 38.489 38.554.991 61% .899 2009 Short term borrowings Liabilities against assets subject to finance lease Long term financing 1.379 2. The Company’s Board of Directors reviews and approves all equity investment decisions.363. the Company may adjust the amount of dividend paid to shareholders.6 Determination of fair values Fair value of financial instruments Fair value is the amount for which an asset could be exchanged. between knowledgeable willing parties in an arms length transaction other than in a forced or liquidation sale.837 2.661.709 54% 1.203 15.777.063.531 6.
754.260.789 13.064 2.750 56.080 ------------Bags------------56.661 ----------Kilograms----------15.953.000 51.792 3 3 43.792 39. raw materials used.036. 2010 39 CAPITAL DISCLOSURE The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for the other stakeholders.547 .080 2. and to maintain a strong capital base to support the sustained development of its businesses.094.498 329. In order to maintain or adjust the capital structure .855.260. The Company manages its capital structure which comprises capital and reserves by monitoring return on net assets and makes adjustments to it in the light of changes in economic conditions. Dyeing Machines ----------Numbers---------4 4 ----------Numbers---------2. appropriation of amounts to reserve or / and issue new shares.423 13.711. Doubling Spindles installed Spindles worked Capacity after conversion into 20/1 count Actual production of yarn after conversion into 20/1 count Under utilization of available sources was due to actual demand. 40 PLANT CAPACITY AND ACTUAL PRODUCTION Spinning Spindles installed Shifts per day Spindle worked 2010 2009 ----------Numbers---------39.064 2.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. spindle speed and twist etc.241 Capacity after conversion into 20/1 count Capacity after conversion into 20/1 count Actual production of yarn after conversion into 20/1 count It is difficult to precisely describe production capacity and the resultant production converted into base count in the textile industry since it fluctuates widely depending on various factors such as count of yarn spun. the Company may adjust the amount of dividend paid to shareholders. It would also vary accordingly to the pattern of production adopted in a particular year.984 ------------Bags------------331.749 14.736 42.000 48.
To Reason Rupees 1. 2010.HIRA TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. 2010 -------Kilograms-------Dyeing capacity Actual dyeing production Under utilization of available sources was due to actual demand. 43 RE-CLASSIFICATIONS AND RE-ARRANGEMENTS Corresponding figures have been re-classified and re-arranged.946. 42 DATE OF AUTHORIZATION FOR ISSUE These financial statements have been approved by the Board of Directors of the Company and authorized for issue on October 08.450 1. 2010 and 2009. 41 NON-CASH TRANSACTIONS There is no non-cash transaction during the year ended June 30. wherever necessary.869 Stock in trade Better presentation 19.095.095.000 873. Significant reclassification and re-arrangements are as follows: From Balance sheet Packing material 44 GENERAL Figures have been rounded off to the nearest Rupee.000 939. to reflect more appropriate presentation of events and transactions for the purpose of comparison.468 CHIEF EXECUTIVE OFFICER CHAIRMAN / DIRECTOR .
166 125.968 400.322.280 196.048 198.749.000 103.000 75.720 870.000 211.000 150.552.000 113.764 1.813.000 449.432 7.120 358.700 4.659.643 115.854 100 500 1000 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 55000 60000 70000 75000 80000 95000 100000 105000 110000 120000 160000 170000 175000 210000 290001 295000 325000 350000 355000 395000 445000 450000 495000 555000 815000 870000 915000 1315000 1505000 1645000 2580000 3745000 3810000 4655000 4730000 4840000 7110000 22320000 22325000 718 71.085 393.999 85.318.899 260.000 2.500 128.450 4.671 919.507. 2010 INCORPORATION No.480 22.072 1.112 4.100 345.047 600.485 400.435 353.490 293.000 3.843.795 177.000.000 557.000 161.499 115.001 217.052 552.582.FORM 34 Pattern of Shareholding As at June 30.253 3.000 200.500 453.122 580.000 328.710 1.732.866 197. 0023196 Share Holders From 40 174 117 195 63 21 21 8 7 4 5 5 8 4 2 2 2 1 1 2 1 1 1 1 1 2 1 2 1 2 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Shareholding To 1 101 501 1001 5001 10001 15001 20001 25001 30001 35001 40001 45001 50001 55001 60001 70001 75001 80001 95001 100001 105001 110001 120001 160001 170001 175001 210001 290002 295001 325001 350001 355001 395001 445001 450001 495001 555001 815001 870001 915001 1315001 1505001 1645001 2580001 3745001 3810001 4655001 4730001 4840001 7110001 22320001 Total Shares Held 1.000 425.650.616 137.111.093 819.093 84.880 1.000 107.000 .
00 9.31 Others 71.622.504. Moderabas and Mutual Funds Joint Stock Cpmpanies General Public Local Foreign 6.854 819.19 NIL NIL 25.659.500 0. Muhammad Umar Virk Mr.720 4. Nadeem Aslam Butt Mrs.480 31.51 2.62 1. Mr.Categories of Shareholders Description Director. and their Spouse.881 11.00 31. Chief Executive Officer.01 9.94 Shares Held % 49.450 1.Non Banking Finance Institutions Insurance Companies.01 0.181 Associated Companies.Fatima Nadeem Mr.000 7.000 Shareholders holding10% or more Mr.15 6.000 353120 5.072 69.39 1.56 8.552.25 .048.Sadiya Umair Mrs.880 2.61 11.685 4. Saeed Ahmad Khan Umaira Umar D/O Muhammad Umar Virk 22.111. Umair Umar Mrs.854 8.25 6.428 400.62 11.727. Shahnaz Umar Mr.112 8. Umair Umar 22.Muhammad Umar Virk Mr. undertakings and related parties.818 Nil 939.881. NIT and ICP Investment Companies Bank.048.507.and minor children.720.11 0.04 7. Development Finance Institutions.685 100.732.622.
I / We _________________________________________________________________ of ____________________________________________________being a member(s) of Hira Textile Mills Limited. In case of Central Depository System Account Holder. ______________________________________________ (in case of Central Depository System Account Holder A/C No. Proxies. to be held on October 30. signed and witnessed. b. d. No person shall act as proxy unless he is member of the company.PROXY FORM The Company Secretary Hira Textile Mills Limited 44 E/1 Gulberg III Lahore.____________________ Participant I. c. Signature must agree with the specimen signature registered with the Company. an attested copy of identity Card should be attached to this proxy form. ____________ or (Failing him / her______________________ of __________________________ another member of the Company) as my / our proxy to attend and vote for me / us and on my / our behalf at Annual General Meeting of the Company.___________________) hereby appoint ________________________ of _____________________________________ another member of the Company as per Share Register Folio No.00 AM at the Registered Office of the Company (44 E/1 Gulberg III. As witness my hand this ________________________ day of _________________ 2010 signed by the said _______________________________________________ in presence of _____________________________________________________________________ Affix Witness Signature Signature Revenue Stamp Notes: a. in order to be effective. Lahore) and at any adjournment thereof. and a holder of ______________________ Ordinary Shares as per Share Register Folio No. must be received at the Company’s Registered Office / head Office not less than 48 hours before the meeting duly stamped.D No. 2010 (Saturday) at 11. .
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