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SALES IN PAK RUPEES 1,713,548,176

985,579,446 591,356,383




Amount in PKR
352,886,777 314,462,679 943,026,479 411,092,726

Amount in PKR
1,264,483,697 1,531,582,409









2012 Rupees

2011 Rupees

EQUITY CAPITAL AND RESERVES Authorised share capital 37,500,000 ordinary shares of Rs. 10/- each Issued, subscribed and paid up capital 30,000,000 ordinary shares of Rs. 10/- each fully paid in cash Accumulated profits

375,000,000 300,000,000 111,092,726 411,092,726 3 308,376,305

375,000,000 300,000,000 52,886,777 352,886,777 320,437,541

Surplus on revaluation of property, plant and equipment LIABLITIES NON CURRENT LIABILITIES Loans and advances from Directors and related companies Liability against assets subject to finance lease Deferred tax liabilties CURRENT LIABILITIES Creditors, accrued and other payables Short term loans Current portion of liabilities against assets subject to finance lease Provision for taxation

4 5 3

102,883,442 5,187,494 119,136,809 227,207,745

79,964,232 25,501,536 125,631,321 231,097,089

6 7 8

175,038,926 374,686,026 19,987,820 15,192,861 584,905,633

75,650,482 259,086,797 16,296,084 9,760,877 360,794,240


9 1,531,582,409 1,265,215,647

The annexed notes form an integral part of these Financial statements.





2012 Rupees

2011 Rupees









CURRENT ASSETS Stores, spares and loose tools Stocks in trade Trade debts Advances, deposits, prepayments and other receivables Cash and bank balances 12 13 14 15 16 9,403,326 461,618,808 187,585,707 92,199,585 13,497,508 764,304,934 1,531,582,409 7,603,326 271,380,276 117,342,553 41,540,695 8,074,265 445,941,115 1,265,215,647

(0) The annexed notes form an integral part of these Financial statements.






2012 Rupees

2011 Rupees

Sales Cost of sales Gross profit

17 18

1,519,286,107 1,343,503,166 175,782,941

873,305,889 746,161,726 127,144,163

Operating expenses Distribution cost Administrative expenses 19 20 35,971,177 24,584,836 60,556,013 Operating profit 115,226,929 25,588,269 21,772,720 47,360,989 79,783,175

Finance Cost


60,843,337 54,383,592

42,755,006 37,028,168 664,683 37,692,851 9,760,877 27,931,974 0.93

Other operating income Profit before taxation Provision for taxation Profit after taxation Basic /diluted earning per share


459,471 54,843,063

15,192,861 39,650,201 1.32

The annexed notes form an integral part of these Financial statements.




Share Capital

Unappropriated Profit Rupees 14,462,679 27,931,974 6,819,880 3,672,243


Rupees Balance as at June 30, 2010 Profit for the year Incremental depriciation net off deferred tax Deferred tax adjustment Balance as at June 30, 2011 Profit for the Year Incremental depriciation net off deferred tax Deferred tax adjustment Balance as at June 30, 2012 300,000,000 300,000,000 300,000,000 -

Rupees 314,462,679 27,931,974 6,819,880 3,672,243 352,886,777 39,650,201 12,061,236 6,494,512 411,092,726

52,886,777 39,650,201 12,061,236 6,494,512 111,092,726

The annexed notes form an integral part of these Financial statements.





2012 Rupees

2011 Rupees

Profit after tax for the period Other comprehensive income

39,650,201 -

27,931,974 -

Total comprehensive income for the period



The annexed notes form an integral part of these financial statements.



DIAMOND TYRES LIMITED CASH FLOW STATEMENT FOR THE YEAR JUNE 30, 2012 2012 Rupees Cash flow from operating activities Profit before taxation Adjustments for: Depreciation / Amortisation Lease Charges Mark up Financial charges Gain on Disposal of fixed assets Amortisation of deferred cost Operating profit before working capital changes Working capital changes Decrease / (increase) in current assets Stores and spares Stock-in-trade Trade debts Advances, deposits, prepayments and other receivables (1,800,000) (190,238,532) (70,243,154) (39,493,095) (301,774,780) (121,577,563) 115,599,229 99,388,444 214,987,673 93,410,110 (5,686,211) (51,514,432) (3,642,694) (20,926,672) (81,770,009) 11,640,101 (5,195,545) (76,393,272) (16,823,379) (1,438,820) (99,851,016) 29,501,756 103,448,536 (13,561,922) 89,886,614 119,388,370 (10,216,451) (30,442,577) (2,095,978) (12,885,760) (55,640,766) 63,747,604 54,843,063 37,692,851 2011 Rupees

63,778,867 5,686,211 51,514,432 3,642,694 731,951 125,354,155 180,197,217

48,837,647 10,216,451 30,442,577 2,095,978 (664,683) 731,951 91,659,921 129,352,773

Increase / (Decrease) in current liabilities Short term running finance Creditors, accrued and other liabilities Cash generated from operation Payment for: Lease Financial charges paid Mark up paid Financial charges paid Tax paid

Net cash generated from operating activities Cash flow from investing activities Fixed capital expenditure Sale proceed From Fixed Assets Deferred cost Net cash used in investing activities Cash flow from financing activities Loan from other companies and directors Liabilities against assets subject to finance lease Net cash generated / (used) from financing activities Net cash inflow / (outflow) in cash and cash equivalent Opening cash and cash equivalents Cash and cash equivalent at the end of the period

(12,513,762) (12,513,762)

(23,753,059) 6,000,000 (17,753,059)

22,919,210 (16,622,305) 6,296,905 5,423,244 8,074,265 13,497,509

(14,031,159) (26,385,430) (40,416,589) 5,577,956 2,496,309 8,074,265 (5,577,956)

The annexed notes form an integral part of these financial statements.



DIAMOND TYRES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2012 STATUS AND NATURE OF BUSINESS The company was incorporated in Pakistan on September 21, 2004 as a limited company in the name of Hashir Export Limited, under the Companies Ordinance, 1984 and was engaged in the business of textile. Subsequently, the name of the company was changed to Diamond Tyres Limited with effect from August 30, 2007. The Memorandum and Articles of Association of the company were accordingly also amended. The Company is engaged in the manufacturing of tyres and tubes of Two wheelers and Auto Rikshaws.

1- STATEMENT OF COMPLIANCE AND SIGNIFICANT ESTIMATES 1.1STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with approved accounting standards, as applicable in Pakistan. Approved accounting standards comprise of, and includes Accounting and Financial Reporting Standards and provisions of and directives issued under the Companies Ordinance, 1984/ The Institute of Chartered Accountants of Pakistan. In case requirements differ, the provisions and directives of Companies Ordinance, 1984 shall prevail. 1.2Functional and presentation currency These financial statements are presented in Pakistan Rupees, which is also the Company's functional and presentation currency. All financial information presented in Pakistan rupees has been rounded off to nearest rupees unless otherwise stated. 1.3SIGNIFICANT ESTIMATES: Preparation of financial statements in conformity with approved accounting standards require the use of certain critical accounting estimates. It also requires the management to exercise its judgments in the process of applying company's policies. Estimates and judgments are continually evaluated and are based on historical experience, including future events expectations. The areas where assumptions and estimates are significant to the companys financial are exercised for calculation of provision for doubtful balances, provision for income taxes, useful life and residual values of property plant and equipments. 1.4Standards, Interpretations and amendmentss adopted during the year The following amendments to existing standards have been published that are applicable to the company's financial statements covering annual periods, beginning on or after the following dates: 1.4.1- Changes in accounting policies and disclosures - Standards, interpretations and amendments to published approved accounting standards that are effective in the current year The company has adopted the following new and amended IFRS and IFRIC interpretations which became effective during the year IAS-24 IAS-32 IFRIC-14 IFRIC-19 Related Party Disclosures Financial Instruments: Presentation- Classification of Right Issues Prepayments of a Minimum Funding Requirement (Amendment) Extinguishing Financial Liabilities with Equity Instruments

DIAMOND TYRES LIMITED In May 2010, International Accounting Standards Board (IASB) issues amendments to various standards primarily with a view to removing inconsistencies and clarifying wording. These improvements are listed below: IFRS-3 Business combinations - Transition requirement for contingent consideration from a business combination that occurred before the effective date of the revised IFRS - Measurment of Non Controlling Interest (NCI) - Un-replaced and voluntarily replaced share-based payment awards IFRS-7 Financial Instruments: Disclosures - Clarifications of Disclosures IAS-1 Presentation of Financial Statements - Clarification of statement of changes in equity IAS-27 Consolidated and Separate Finacial Statements - Transition requirements for amendments made as a result of IAS-27 Consolidated and Separate Finacial Statements IAS-34 Interim Financial Reporting - Significant events and transactions IFRIC-13 Customer Loyalty Programmes - Fair Value of award credits The adoption of the above standards, amendments, interpretations and improvements did not have any material effect on the financial statements or accounting policies of the company, to the manner and extent applied. 1.4.2- STANDARDS, INTERPRETATIONS AND AMENDMENTS TO PUBLISHED APPROVED ACCOUNTING STANDARDS THAT ARE NOT YET EFFECTIVE The following revised standards, amendments and interpretations with respect to the approved accounting standards as applicable in Pakistan would be effective from the dates mentioned below against the respective standards: Standard Effective Date (accounting periods beginning on or after) Financial Instruments: Disclosures- (Amendements) -Amendments enhancing disclosures about transfers of financial assets July 01, 2011 -Amendments enhancing disclosures about offsetting of financial assets January 01, 2013 and financial liabilities Presentation of Financial Statements- Presentation of items of comprehensive income Income Taxes (Amendment) - Recovery of underlying Assets Employee Benefits - (Amendents) July 01, 2012



IAS-12 IAS-19

January 01, 2012 January 01, 2013

The company expects that adoption of the above revisions and amendments of the standards will not materially

DIAMOND TYRES LIMITED effect the company's financial statements in the period of initial application other than the ammendments to IAS-19 'Employee Benefits'. Such amendments range from fundamental changes to simple clarifications and rewording. The significant changes include the following: - For defined benefit plans, the ability to defer recognition of acturial gains and losses (i.e. the corridor approach) has been removed. As revised, acturial gains and losses are recognised in other comprehensive income when they occur. Amounts recorded in profit and loss account are limited to current and past service costs, gains or losses on settlements, and net interest income (expense). All other changes in the net defined benefit asset (liability) are recognised in other comprehensive income with no subsequent recycling to profit and loss account. - Objectives for disclosures of defined benefit plans are explicitly stated in the revised standard, along with new or revised disclosure requirements. These new disclosures include quantitative information of the sensitivity of the defined benefit obligation to a reasonably possible change in each significant acturial assumptions. The company is currently assessing the impact of the above amendments which are effective from January 01, 2013 on the financial statements. In addition to the above, the following new standards have been issued by IASB which are yet to be notified by the SECP for the purpose of applicability in Pakistan. Standard IFRS-9 IFRS-10 IFRS-11 IAS-32 IAS-27 IAS-28 IFRS-12 IFRS-13 IASB Effective Date (annual periods beginning on or after) Financial Instruments: Classification and Measurement Consolidated Financial Statements Joint Arrangements Financial Instruments : Presentation Separate Financial Statements Investment in Associate Disclosure of Interest in other Entities Fair Value Measurement January 01, 2015 January 01, 2013 January 01, 2013 July 01, 2012 January 01, 2013 January 01, 2013 January 01, 2013 January 01, 2013

2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1BASIS OF PREPARATION These financial statements have been prepared under the historical cost convention without any adjustment for the effect of inflation except for following items, see note 2.4 also with reference to surplus arising on revaluation of fixed assets -Financial instruments at fair value -Recognition of certain employee benefits at present value -Investment in associate at equity method 2.2INVESTMENT IN ASSOCIATE Associates are entities over which the company has significant influence, but not controlled. Investment in associates is accounted for using equity method of accounting. Under the equity method, the investment in associate is initially recognized at cost and the carrying amount is increased or decreased to recognise the company's shares of profit or loss of the associate after the date of acquistion. The company's share of the profit or loss of the associate is recognised in the company's profit and loss account, Whenever it is applicable. The carryiing amount of investment in associate is reduced by the amount of distribution recieved from the associate. The carrying amount is also adjusted by the amount of changes in the compqany's proportionate interest in the associate arising from changes in associate's equity that is recognised directly in equity of the company account.

DIAMOND TYRES LIMITED The carrying amount of investment is tested for impairment by comapring its recoverable amount (higher of valve in use and fair value less cost to sell) with its carrying amount and loss, if any, is recognised in profit or loss. When impairment losses subsequently reversed, the carrying amount of investment is increased to the revised recoverable amounts but limited to the extent of initial cost of investment. A reversal of impairment loss is recognised in the profit and loss account. 2.3TAXATION Current: The charge for current tax is based on the taxable income at the current rate of taxation after taking in to account applicable tax credit, rebates and exemptions available. However, for income covered under final tax regime, the rate of tax and income determination is according to the guidelines of Income Tax Ordinance 2001.. The charge for current tax also include prior year adjustments, where considered, arising due to assessments finalized during the year, commencing from current tax year, where no taxable income is earned, the minimum tax as laid down in law is provided. Deferred: The company accounts for deferred tax, if any, using the liability method, on all major temporary differences at the balance sheet date, between the tax base of asses and liabilities and their carrying values for the financial reporting purposes. In this regard, the effects on deferred taxation of the portion of income subject to final tax regime are also considered in accordance with the requirement of Technical Release- 27 of the institute of chartered accountants of Pakistan. Provision for deferred tax has been made in these financial statements in accordance with treatment spelled in IAS-12 (Income taxes), using the tax rate enacted at the balance sheet date. Deferred tax assets, if any, is recognized to the extent that it is probable that future taxable profits will be available against which the assets can be recognized. The company also recognizes the assets/liability on deficit/surplus on revaluation, which is adjusted against the deficit/surplus in accordance with the requirement of revised IAS-12 (Income taxes).


PROPERTY, PLANT & EQUIPMENT Property, plant & equipments are stated at historical cost or revalued amount less accumulated depreciation and accumulated impairment in value. Cost of operating assets consists of purchase price/ construction cost (after trade discounts and rebates) taxes/duties and relevant directly attributable cost for bringing the assets into its intended use. Pre-production and trial run operation's results are capitalized. Depreciation is charged on diminishing balance method at the rates specified in relevant note. Full years depreciation is charged on assets in the year in which they are purchased. No depreciation is charged in the year, in which the asset is sold or disposed off. Surplus arising on revaluation is credited to Surplus on revaluation of fixed assets in accordance with the provision of section 235 of Companies Ordinance, 1984. Surplus on revaluation of fixed assets to the extent of incremental depreciation is directly charged to equity. Gain / (loss) on disposal of fixed assets, if any is taken to profit and loss account except that the related surplus on revaluation of fixed assets is transferred directly to unappropriated profits. Repair & maintenance costs are charged to the profit and loss account in the year in which these are incurred. Major renewals and improvements are capitalized.



DIAMOND TYRES LIMITED The leases, where all the risks and rewards incidental to ownership of the leased assets have been transferred to the company are classified as finance leases. Assets subject to finance lease are stated at the lower of present value of minimum lease payments under the lease agreements and the fair value of the leased assets. The related rental obligations, net of finance charges, are included in liabilities against assets subject to finance leases. The liabilities are classified as current and long term depending upon the timing of the payment. Each lease payment is allocated between the liability and finance charges so as to produce a constant periodic rate of interest on the balance outstanding. The interest element of the rental is charged to income over the lease term. Assets acquired under a finance lease are depreciated over the useful life of assets on reducing balance method. Depreciation of leased assets is charged to profit and loss account. Full depreciation on additions in leased assets is charged when an asset is acquired while no depreciation is charged in the year in which the asset is disposed off/ transferred to own assets. 2.6INTANGIBLE ASSETS AND AMORTIZATION Intangible assets, which are non-monetary assets without physical substance, are recognized at cost and comprise the purchase price, on-refundable purchase taxes and any directly attributable expenditure. Amortization is charged to the income following the straight line basis for a maximum period of five years. Subsequent expenditures on intangible assets after its purchase are recognized as an expense, when it is incurred unless the expenditure will enable the asset to generate future economic benefits in excess of its After initial recognition, an intangible asset is carried at its cost less accumulated amortization. originally assessed standard of performance. 2.7CREDITORS, ACCRUED AND OTHER LIABILITIES Liabilities for trade and other amounts payable are carried at cost which is the fair value of the consideration to be paid in future for goods and services received, whether or not billed to the company. 2.8STOCKS, STORES AND SPARES Inventories are valued at lower of cost and net realizable value as per requirements of IAS-2. Cost of major stock items is determined as follows Raw Material Work in process Finished goods Waste Store, spares and loose tools At Weighted average cost At Proportionate conversion cost. Lower of the cost or Net Realizable Value At Net Realizable Value (NRV) At moving average cost less allowance for obsolete and slow moving items. At invoice value and related charges incurred thereon.

Material in transit

Net realizable value signifies the estimated selling price in the ordinary course of business less costs necessarily to be incurred in order to make a sale.



DIAMOND TYRES LIMITED For the purpose of cash flow statement, Cash and cash equivalents comprise of cash in hand and balance with banks on current and deposit accounts. 2.10-Employee benefits The company operates an unapproved unfunded gratuity scheme for all its permanent employees who have completed a minimum qualified period of service. 2.11-Impairment The carrying amounts of the assets are reviewed at each balance sheet date to identify the circumstances indicated the occurrence of impairment loss or reversal of previous impairment losses. If any such indication exists, the recoverable amount of such assets is estimated and impairment loss is recognized in the profit and loss account. Where an impairment loss subsequently reverses, the carrying amount of such assets is increased to the revised recoverable amount. A reversal of the impairment loss is recognized. 2.12-Provisions Provisions are recognized when the company has present, legal or constructive obligation as result of past event, it is probable that an out flow of resources embodying economic benefit will be required to settle the obligation and reliable estimate of the amount can be made. However, provisions are reviewed at each balance sheet date and adjusted to reflect the current reliable estimates. 2.13-Financial instruments Financial assets and liabilities are recognized when the company becomes a party to the contractual provisions of the instrument and de-recognized when the company loses control of the contractual rights that comprise the financial asset and in case of financial liability when the obligation specified in the contract is discharged , cancelled or expired. Financial instruments are initially recorded at cost on the date a derivative contract is entered into and are remeasured to fair value at subsequent reporting date. The gain or loss relating to financial instruments is recognized immediately in the profit and loss account for the year. The particular recognition methods adopted by the Company are disclosed in the individual policy statements associated with each item of financial instruments. 2.14- Off-setting of financial assets and financial liabilities A financial asset and financial liability are off set and the net amount reported in the balance sheet, if the company has a legal enforcement right to set off the transaction and also intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. 2.15-Borrowings Loans and borrowings in Pakistan Rupees are recorded at the proceeds received. Liabilities in foreign currency are converted in Pakistani Rupee at appropriate rate on the date of receipt. Subsequent periods, borrowings are stated at amortized cost using the effective yield method. Finance cost is accounted for on an accrual basis and is included in current liabilities to the extent of amount remaining unpaid, if any. 2.16-Borrowing cost The borrowing costs are charged off to the income in the year in which they are incurred except to the extent costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of assets. 2.17-Foreign currencies Transaction in foreign currencies other than Pakistan rupees are recorded at the exchange rate prevailing on

DIAMOND TYRES LIMITED the date of transaction. At each balance sheet, monetary assets and liabilities that are dominated in foreign currencies are translated in rupees at the exchange rate ruling on the balance sheet date, except where forward exchange contracts have been entered in to for repayments of liabilities, in that case, rates contracted for, are used. Gains and losses arising on re-translation are included in net profit & loss for the year. 2.18-Revenue recognition Revenue is measured at fair value of the consideration received or receivable and represents amounts receivables for provided in the normal course of business. Sale of goods is recognized on delivery of goods to customers along with all the significant risks and rewards of ownership. 2.19-Trade debts and other receivables Trade debtors and other receivables are carried at original invoice amount less an estimate made for doubtful debts based on review of all outstanding amounts at year end. Bad debts, if any, are written off when identified. Provision for bad and doubtful debt, if any, is made after ascertaining the status. 2.20-Associated party transaction All transactions between company and related party are accounted for at arm's length price as an independent business in accordance with 'comparable Uncontrolled Price Method'. The company has voluntarily applied SubRegulation (Xiii) of listing regulations 37 notified by the Karachi Stock Exchange (Guarantee) Limited vide circular KSE/N-269 dated January 19,2009 requires the company to place before the board of directors for their consideration and of approval of related party transactions, distinguishing between transactions carried out on terms equivalent to those that prevail in arm's length transactions in accordance with normal business, price recordings proper justification for using if any, alternate pricing mechanism. 2.21-Segment reporting A segment is a distinguishable component within the company that is engaged in providing products and under a common control environment (geographical segment), which is subject to risks and returns that are different from those of other segments. Segments results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment.

2.22-General a) The figures have been presented in pakistani currency and rounded off to the nearest rupee. b) Corresponding figures have been rearranged and reclassified wherever necessary to reflect more appropriate presentation of events and transactions for the purpose of comparison without any effect on profit and loss account. c) The confirmations have been circularized to all the debtors and creditors as per requirements of the audit, in response to any variation, the balances were supported with reconciliations. d) The sequence and placement of various notes to the financial statements is drawn from the fourth schedule of the Companies Ordinance 1984 to the extent and manner as applicable.


2012 Rupees 3. SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT Opening balance Add: Surplus on revaluation of property, plant and equipment Closing balance Less: Transferred to accumulated profit/(loss) in respect of incremental depreciation charged on related assets For Current Year: - net of deferred tax - related deferred tax liability 446,068,862 446,068,862

2011 Rupees

220,411,026 236,149,960 456,560,986

(12,061,236) (6,494,512) (18,555,748) 427,513,115

(6,819,880) (3,672,243) (10,492,124) 446,068,862

Less: Related deferred tax liability on revaluation: Balance as at July 01 Deferred Tax created Prior year adjustment Incremental depreciation charged on related assets for current year

125,631,321 (6,494,512) 119,136,809 308,376,305

129,901,655 (598,091) (3,672,243) 125,631,321 320,437,541

Less: Realization on disposal of assets

The company revalued its fixed assets on the basis of market valuation conducted by independent valuers and the resultant difference was credited to surplus on revaluation of fixed assets, in accordance with the requirements of the section 235 of the Companies Ordinance 1984, the surplus on revaluation of fixed assets can now be utilized to the extent of the incremental depreciation charged on these assets. The management has no intention of revaluing the assets in next twelve months. The management is of the opinion , that there is no significant change in valuation of other assets. 4. LOAN AND ADVANCES FROM ASSOCIATED UNDERTAKINGS Loan and advances from an associated undertaking 102,883,442 79,964,232 It represents advances/loan taken from an associated undertaking to meet working capital requirements of the Company. It carries interest @ 14.5% and these are unsecured with undetermined repayment period. The minimum balance was Rs. 79.964 millions while the maximum balance at any time during the year was Rs. 102.884 millions. The company follows the listing regulations notified by KSE in reporting transactions with associated undertakings.


2012 Rupees 5. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE Future minimum lease payment under finance lease are as follows: Present value of minimum lease payments Less: Current portion shown under current liabilities 25,175,314 19,987,820 5,187,494 The future payments and the period in which these will be due are as follows: GROSS MINIMUM LEASE PAYMENTS Not later than one year Later than one year but not later than five years LESS: FINANCE CHARGES ALLOCATED TO FUTURE PERIOD Not later than one year Later than one year but not later than five years PRESENT VALUE OF MINIMUM LEASE PAYMENTS Not later than one year Later than one year but not later than five years Less: Current portion of liabilities against assets subject to finance lease 19,987,820 5,187,494 25,175,314 19,987,820 5,187,494 2,292,840 206,466 2,499,306 22,280,660 5,393,960 27,674,620

2011 Rupees

41,797,620 16,296,084 25,501,536

23,815,716 32,621,675 56,437,391

7,519,632 7,120,139 14,639,771

16,296,084 25,501,536 41,797,620 16,296,084 25,501,536

This represents finance lease entered into with leasing companies and financial institution for purchase of fixed assets. Rate of finance charges range from 13.50% to 21.96% IRR. The company intends to exercise the option to purchase the leased assets upon completion of the lease periods. Liabilities are secured against security deposit and personal guarantees of the directors. 6. CREDITORS, ACCRUED AND OTHER PAYABLES Trade creditors for supplies and goods Advances from customers Income tax payable Accrued expenses including mark-up payables SHORT TERM LOAN - secured Local Bills Discounted Facility Running Finance Local and Import Murahaba Finance against Merchandise Finance against Trust Receipts 49,994,921 20,849,007 124,613,112 20,941,023 158,287,963 374,686,026 40,180,495 16,724,725 99,424,897 8,625,240 94,131,440 259,086,797

131,427,237 4,854,021 309,646 38,448,022 175,038,926

40,443,211 5,244,006 2,889,359 27,073,905 75,650,482


These finances have been obtained from banking institutions and are secured by first equitable mortgage on fixed assets, hypothecation of raw material, first parri passu charge on current assets, pledge of imported goods of the Company (Bank of Punjab only) and personal guarantees of directors of the company.


2012 Rupees

2011 Rupees


PROVISION FOR TAXATION Opening Balance Less: Adjusted during the period Provision: Current period Prior year

9,760,877 (9,760,877) 15,192,861 15,192,861

8,733,059 1,027,818 9,760,877

15,192,861 9,760,877 8.1 The Company is liable to pay minimum income tax under IT Ordinance 2001. The assesments for early arrears stand completed under the deeming provisions of IT Ordinance 2001. 9. 9.1 9.2 9.3 9.4 CONTINGENCIES AND COMITTMENTS Post dated cheques issued to the Collector of Customs Rs. 1.95 M against various L/Cs. Letter of guarantee issued in favor of Sui Northern Gas Pipe Lines Ltd Rs. 6 M Post dated cheques amounting to Rs. 8 milllion has been issued to Silk Bank Limited as a security against local bills discounting facility obtained from the Bank. Commitments on account of letters of credit opened for the import of raw material as on June 30, 2012 amounts to Rs. 168.7 million (2011= Rs. 60.7 million) DEFERRED COST Opening Balance Addition during the year Less: Amortization during the year These are preliminary and statutory expenses. 12. STORES AND SPARES AND LOOSE TOOLS Stores and spares and loose tools 13. STOCKS IN TRADE These comprise of the folllowing Raw materials Work in process Stocks in Transit Finished goods


731,951 (731,951) -

1,463,901 (731,951) 731,951



223,576,197 64,101,115 38,793,046 135,148,450 461,618,808 187,585,707

123,796,311 32,150,125 31,127,686 84,306,154 271,380,276 117,342,553

14. TRADE DEBTS - unsecured These are unsecured and considered good. 15. ADVANCES, DEPOSITS AND PREPAYMENTS -Unsecured considered good, and are on account of the following, Advance to employees Advances to suppliers Advances for containers Advance income tax Sales tax advance Advances to Collector of Customs Prepaid insurance

326,000 6,375,091 5,021,313 35,391,945 31,839,020 5,234,874 764,230

57,000 717,920 3,012,354 24,226,150 3,182,257 2,486,073 375,342


Security deposits Advance against L/C's L/C's Margins Other advances

2012 Rupees 18,000 4,055,721 2,885,896 287,495 92,199,585

2011 Rupees 18,000 972,193 6,027,888 465,519 41,540,695

16. CASH AND BANK BALANCES Cash in hand Cash at banks -current accounts

1,318,492 12,179,016 13,497,508

984,140 7,090,126 8,074,265

17. SALES Gross Sales Less: Sales tax and FED

1,713,548,176 (194,262,069) 1,519,286,107

985,579,446 (112,273,557) 873,305,889 615,503,448 35,750,898 73,568,912 2,175,575 1,131,191 3,184,067 43,856,203 1,475,372 776,645,667

18. COST OF SALES Raw material consumed (18.1) Salaries, wages and benefits Utilities Repair and maintenance Vehicle running and maintenance Insurance Depreciation Other manufacturing expense 1,210,161,805 59,798,170 86,876,095 3,620,022 1,172,378 2,207,243 60,491,103 1,969,636 1,426,296,452

Work in process: Opening stocks Closing stocks 32,150,125 (64,101,115) (31,950,990) 1,394,345,462 Finished goods: Opening stocks Closing stocks 84,306,154 (135,148,450) (50,842,296) 1,343,503,166 18.1 Raw Material Consumed Opening stocks Purchases during the year Less: Closing stocks 123,796,311 1,309,941,691 1,433,738,002 (223,576,197) 1,210,161,805 84,122,413 655,177,346 739,299,759 (123,796,311) 615,503,448 67,236,009 (84,306,154) (17,070,145) 746,161,726 18,736,329 (32,150,125) (13,413,796) 763,231,871


2012 Rupees 19. DISTRIBUTION COST Salaries, wages and benefits Sales promotion Commission on Sales Vehicle running and maintenance Traveling and conveyance Freight and octroi (Outward) Other selling expenses 5,869,717 13,771,334 102,556 2,325,754 1,529,307 11,468,625 903,884 35,971,177 20. ADMINISTRATIVE EXPENSES Salaries, wages and other benefits Telephone & courier Printing and stationery Vehicle running expenses Traveling and conveyance Legal and professional charges Repair and maintenance Auditors' remuneration Amortization Rent, Rates & Taxes Utilities Electricity , Gas etc Depreciation Other administrative expenses 14,636,531 238,098 37,988 1,415,936 267,016 477,675 107,219 300,000 731,951 1,660,837 3,287,764 1,423,821 24,584,836

2011 Rupees 5,063,529 9,272,868 796,174 1,995,777 1,308,699 6,871,850 279,372 25,588,269

10,406,780 551,414 280,275 1,509,201 92,953 246,614 228,877 300,000 731,951 1,130,100 573,368 4,981,444 739,742 21,772,720

21. FINANCE COST Financial lease charges Mark up charges Bank charges

5,686,211 51,514,432 3,642,694 60,843,337 -

10,216,451 30,442,577 2,095,978 42,755,006

22. OTHER OPERATING INCOME Profit on bank deposits Profit on disposal of vehicle Exchange gain / (Loss) on imports / Exports

459,471 459,471

664,683 664,683

23. CAPITAL RISK MANAGEMENT The related parties comprise associated companies, directors and key management personnel. The company in the normal course of business carries out transactions as the case may be with various related parties. Amounts due from related parties are shown under receivables and payables in these financial statements. 24. COMPARATIVES Corresponding figures have been re-classified wherever necessary to reflect more appropriate presentation of events and transactions for the purpose of comparison. There are no major changes in the comparative figures


2012 Rupees affecting the financial results of the company. 25.1 CAPITAL DISCLOSURES

2011 Rupees

The company's objective when managing capital is to safeguard the company's ability to continue to provide returns for shareholders and benefits for other stakeholders; and to maintain a strong capital base to support the sustained development of its business. 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. In order to maintain or adjust the capital structure, the company may adjust the appropriation of amounts to reserve or/and issue new shares. 25.2 There is no movement in the Paid up Capital of the Company. 26. FINANCIAL INSTRUMENTS Financial assets and liabilities are recognized when the Company becomes party to the contractual provisions of the instrument. Financial assets are de-recognized when the Company loses control of the contractual rights that comprise the financial assets. Financial liabilities are de-recognized when they are extinguished i.e, when the obligation specified in the contract is discharged, cancelled or expired. The particular measurement methods adopted are disclosed in the individual policy statements associated with each item. The carrying values of cash, accounts receivable, account payable and accrued liabilities, approximate fair value because of the short-term maturity of those instruments. The loan from directors and other parties are interest free long term loan with no specified date of return. Unless otherwise noted, it is managment's opinion, that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments These are same as stated in the financial statements. No provision for losses has been made, as all the assets and liabilities are considered good on the date of balance sheet.

27. SEGMENTATION The company is engaged in the business of tyre and tubes manufacturing for two wheelers and rickshaw assembling industry. The company has classified its bussiness operation into one main division called "Tyre & Tubes Division". Hence no segmentation is provided in these financial statements. 28. TRANSACTION WITH ASSOCIATED COMPANIES Transaction with related companies comprise related companies through directorship and close family member of the directors of the company. Transaction with related companies undertaken were as follows. Purchase made from: Capital Industustrial Enterprises (Pvt) Limited Goods sold to: Capital Industustrial Enterprises (Pvt) Limited Diamond Industries Limited 29. REMUNERATION OF CHIEF EXECUTIVES, DIRECTORS AND EXECUTIVES Chief Executives 2012 Remuneration NIL Executives 9,540,000

58,116,670 208,439,568 129,091,216


No. of person 2011 Remuneration No. of person 30. The figures have been round off to the nearest rupee.

2012 Rupees 1

2011 Rupees 8


10,020,000 8

31. DATE OF AUTHORIZATION These financial statements were authorized for issue on October 05, 2012 by the board of directors of the company.



DIAMOND TYRES LIMITED NOTES TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 2012 10. Property, Plant and Equipment Owned Assets Description Land Building Plant and Machinery Office Equipment Vehicles Total Plant and Machinery Leased Assets Vehicles Total Grand Total

COST Balance as at July 01, 2010 Additions during the year Disposals Transfers/Adjustments Reavaluation Balance as at June 30, 2011 Balance as at July 01, 2011 Additions during the year Disposals Transfers/Adjustments Balance as at June 30, 2012 DEPRECIATION Balance as at July 01, 2010 Charge for the year Disposals Transfers/Adjustments 8,552,187 9,016,596 17,568,783 17,568,783 9,547,217 27,116,000 68,517,215 29,778,054 98,295,269 98,295,269 45,390,465 143,685,734 1,751,042 2,615,215 753,018 753,018 998,024 405,536 347,482 629,755 179,094 1,560,684 78,104,693 39,321,227 1,560,684 3,446,528 5,061,552 6,102,433 4,454,868 (2,864,683) (1,560,684) 6,131,934 6,131,934 3,042,083 13,063,478 9,174,017 9,548,961 9,516,421 (2,864,683) (1,560,684) 87,653,654 48,837,647 (2,864,683) 99,000,000 99,000,000 99,000,000 99,000,000 184,227,671 1,054,621 23,230,828 208,513,120 208,513,120 208,513,120 321,541,452 15,243,047 212,919,132 549,703,631 549,703,631 11,826,331 561,529,962 3,498,194 7,039,175 10,537,369 10,537,369 453,378 10,990,747 1,604,200 416,216 1,920,124 3,940,540 3,940,540 234,053 4,174,593 609,871,517 23,753,059 1,920,124 236,149,960 871,694,660 871,694,660 12,513,762 884,208,422 54,062,052 54,062,052 54,062,052 54,062,052 36,532,611 (8,200,000) (1,920,124) 26,412,487 26,412,487 26,412,487 90,594,663 (8,200,000) (1,920,124) 80,474,539 80,474,539 80,474,539 700,466,180 23,753,059 (8,200,000) 236,149,960 952,169,199 952,169,199 12,513,762 964,682,961

Balance as at June 30, 2011 Balance as at July 01, 2011 Charge for the year Disposals Transfers/Adjustments Balance as at June 30, 2012

2,369,533 2,369,533 245,681

118,986,604 118,986,604 56,181,387 175,167,991

8,508,080 8,508,080 4,555,397

14,640,015 14,640,015 7,597,480 22,237,495

133,626,618 133,626,618 63,778,867 197,405,486

Written down values as at June 30, 2011 Written down values as at June 30, 2012 Rate of depreciation in %

99,000,000 99,000,000 -

190,944,337 181,397,120 5%

451,408,362 417,844,228 10%

9,784,351 9,239,705 10%

1,571,007 1,559,378 15%

752,708,056 709,040,431

45,553,972 40,998,574 10%

20,280,553 17,238,470 15%

65,834,524 58,237,044

818,542,581 767,277,475

2012 Allocation of Depreciation Cost of Sales Administrative Expenses 60,491,103 3,287,764 63,778,867

2011 43,856,203 4,981,444 48,837,647