You are on page 1of 154

Annual Report 2014 | A

Before bringing life to a vision we have to see it first. And for that we need people
who specialize in seeing the impossible. Here at JDW, we are proud of the visionary
men we have who take up the responsibility of creating opportunities for the
future, not only for our company but for the whole community we operate in.
We believe life is about the betterment of the hu man condition; it’s about
social awareness, and random acts of kindness that weave the soul of
hu manity. Together, we all participate in weaving the social fabric; we
should all therefore be patching the fabric when it develops holes.
The change has begun, here at JDW, as we have started to unpack
the challenges that encounter us, realizing that we each have
a role that requires us to change and become more responsible
for shaping our community and creating magic under JDW’s
vision. A vision in which everyone is benefited, be it our
shareholders, the farmers or you.

Contents

Company Review
02 Corporate Information
04 Mission & Strategy
05 Notice of Annual General Meeting
08 Operating Highlights
11 Directors’ Report
16 Pattern of Shareholding
18 Categories of Shareholders
19 High Pressure Co-Generation
Power Plants
20 Corporate Farming
22 Corporate Social Responsibility

Financial Statements
26 Statement of Compliance with the

Code of Corporate Governance

28 Review Report to the Members
29 Auditors’ Report to the Members
30 Balance Sheet
32 Profit & Loss Account
33 Statement of Comprehensive Income
34 Cash Flow Statement
35 Statement of Changes in Equity
36 Notes to the Financial Statements
Consolidated Financial Statements
86 Directors’ Report on Consolidated

Financial Statements

87 Auditors’ Report to the Members
88 Consolidated Balance Sheet
90 Consolidated Profit & Loss Account

91 Consolidated Statement of

Comprehensive Income

92 Consolidated Cash Flow Statement
93 Consolidated Statement of

Changes in Equity

94 Notes to the Consolidated

Financial Statements

Form of Proxy

Annual Report 2014 | 1

Asim Nisar Bajwa Mr.Corporate Information Board of Directors Audit Committee Mukhdoom Syed Ahmed Mahmud Mr. Raheal Masud Mr. Lane & Mufti 2 | JDW Sugar Mills Limited . Legal Advisor Cornelius.) Ltd. Raheal Masud Member Mr. Ijaz Ahmed Member Mr. Raheal Masud Director/Chief Executive Member Syeda Sameera Mahmud Mr. Zafar Iqbal Chief Operating Officer Rana Nasim Ahmed Group Director (Finance). Chartered Accountants Registrar Corplink (Pvt. Muhammad Rafique HR & R Committee Mr. CFO & Company Secretary Mr. Asim Nisar Bajwa Director/Chairman Chairman / Member Mr. Ijaz Ahmed Chairman / Member Mr. Zafar Iqbal Mr. Zafar Iqbal Member Auditors KPMG Taseer Hadi & Co. Jahangir Khan Tareen Mr.

com Pak Brunei Investment Company Limited Pakistan Kuwait Investment Company (Private) Limited Pair Investment Company Limited JS Bank Limited Meezan Bank Limited Habib Metropolitan Bank Limited Pak Libya Holding Company (Private) Limited National Bank of Pakistan Annual Report 2014 | 3 . Sadiqabad. Jamal Din Wali. Rahim Yar Khan. The Bank of Punjab United Bank Limited MCB Bank Limited Allied Bank Limited Askari Bank Limited BankIslami (Pakistan) Limited Barclays Bank Plc. Unit-III Mauza Laluwali. Rahim Yar Khan. Distt. Dubai Islamic Bank Pakistan Limited Web Presence Pak Oman Investment Company Limited www. Ghotki. Habib Bank Limited Silk Bank Limited Standard Chartered Bank (Pakistan) Limited Soneri Bank Limited Saudi Pak Industrial & Agricultural Investment Company Limited Mills Unit-I Mauza Shirin. Distt.jdw-group. Unit-II Machi Goth.Bankers / Financial Institutions Registered Office Faysal Bank Limited 17-Abid Majeed Road. Lahore Cantonment. Lahore. Distt. Near Village Islamabad.

4 | JDW Sugar Mills Limited . STRATEGY • To undertake and support community development and welfare projects in order to fulfil social commitments.Mission & Strategy • To be the market leader and a worldclass organization by meeting and proactively anticipating customer needs. MISSION • To grow our base business in sugar and build those related activities where there is opportunity to smooth the impact of sugar price cycles. • To offer equal and fair growth opportunities to all employees. • To make investment in sugarcane crop to ensure regular supply of cane and profitability of growers. harmonious and challenging working environment for the employees. • To produce sugar which is of highest international standards. • To maximize the wealth of stakeholders by optimizing the long term returns and growth of the business. • To be amongst the most efficient and lowest cost producers in the industry. • To ensure a safe.

Notice of Annual General Meeting Annual General Meeting Notice is hereby given that 25th Annual General Meeting of JDW Sugar Mills Limited (the “Company”) will be held at Summit Hall. consider and adopt the annual audited unconsolidated and consolidated financial information of the company for the financial year ended on September 30. 2014 together with Directors’ and Auditors’ Reports thereon. Royal Palm. to transact the following business: 4. 5. have offered themselves for re-appointment as Auditors of the Company. To receive. 2014.00 (70%) per share. 1. 3. January 31. the total dividend for the financial year ended on September 30. By Order of the Board Dated: January 10.m. To confirm the minutes of the last Extra Ordinary General Meeting held on March 22. Golf & Country Club. 2015 at 9:00 a. To appoint Auditors of the Company for the next financial year 2014-15 and fix their remuneration. 7.00 (50 %) per share as recommended by the Board of Directors on January 3. Chartered Accountants. 2014. being eligible. Ordinary Business: 5.. To approve a final cash dividend of Rs.00 (20%) per share. 2. The retiring Auditors M/s KPMG Taseer Hadi & Co. 2015 along with an interim cash dividend of Rs. Lahore on Saturday. 52-Canal Bank Road. 2. which was paid on August 18. 2015 Lahore (Muhammad Rafique) Company Secretary Annual Report 2014 | 5 . To transact any other business with the permission of the Chair. 2014 will amount to Rs.

O. 2014: It is further being informed that pursuant to the provisions of Finance Act. Change of Address Physical shareholders are requested to notify any change in their addresses to the Company or its Shares’ Registrar. shall be submitted to the company along with completed proxy form. are advised to provide the mandate to CDC or their Participants/ Stock Brokers. A corporate entity.pk as well as ensure that your CNIC / Passport number has been recorded by your Participant / Investor Account Services (in case your shareholding is in book entry form) or by Company’s Share Registrar Messers Corplink (Private) Limited (in case of physical shareholding). 2013. . Transfers received in order at the Company’s Office or Shares Registrar’s Office. being a member. a resolution of the Board of Directors / Power of Attorney with specimen signature of the person nominated to represent and vote on behalf of the corporate entity.fbr. Corporate bodies (non-Individual shareholders) should ensure that their names and National Tax Numbers (NTN) are available in Active Tax Payer List at FBR website and recorded by Participant / Investor Account Services or by Company’s Share Registrar (in case of physical shareholding). all members of the Company who wish to receive soft copy of Annual Report are requested to send their e-mail addresses. regardless whether they are a member or not. 2001 through Finance Act. Revision of Withholding Tax on dividend income under Section 150 of Income Tax Ordinance. Shareholders who hold shares with CDC or Participants/ Stock Brokers. the SECP has announced an e-dividend mechanism where shareholders can get their dividend credited directly into their respective bank accounts electronically by authorizing the Company to electronically credit their dividend to their accounts. will be treated in time for payment of the final cash dividend to the transferees. Therefore.gov. dividend warrants cannot be issued without valid CNICs. the company will be constrained to withhold dispatch of dividend to such shareholders. 2015. 8(4) SM/CDC 2008 of April 05. 787 (I)/2014 dated September 8. 2012 and advertisement in newspapers dated May 09. Wings Arcade. Accordingly. 5.com. Those shareholders who have not yet submitted their valid CNICs are once again advised to provide attested copies of their valid CNICs with their folio numbers to the Company’s Share Registrar if they hold physical shares. Closure of Share Transfer Books: The share transfer books of the company will remain closed from 24th January. may appoint any person. The Consent Form for electronic transmission could be downloaded from Company’s website: www. Model Town. 4. income has been introduced by Federal Board of Revenue (FBR). 2014. Lahore by close of business on 23rd January. 2015 (both days inclusive). Messers Corplink (Private) Limited. S. effective from July 1.jdw-group. all non CDC shareholders are requested to send their bank account details to the Company’s Registrar. as its proxy. 2014 has allowed the circulation of Audited Financial Statements along with Notice of Annual General Meeting to the members of the Company through e-mail. Submission of copy of CNIC (Mandatory): As directed by the SECP through its Notification No. In order to enable a more efficient method of cash dividend. Through the Company’s letter dated May 09. ‘Filer’ and ‘NonFiler’ shareholders will pay tax on dividend income @ 10% and 15% respectively. 2. Furthermore. 1-K Commercial. In case of corporate entities.Notice of Annual General Meeting NOTES: 1. through its Circular No. all shareholders were advised to submit copies of their valid CNICs. Messers Corplink (Private) Limited. 6.R. if not provided earlier. Audited Financial Statements through e-mail (Optional): SECP through its Notification SRO No. 2012. 2011. 2014 a new criteria for withholding of tax on dividend 6 | JDW Sugar Mills Limited You are therefore advised to check and ensure your Filer status from Active Tax Payer List (ATL) available at FBR website http://www. members holding shares in CDC/Participants accounts are also requested to update their addresses to CDC or their Participants/ Stock Brokers. Payment of Dividend Electronically (Optional): In order to be effective. Participation in the Annual General Meeting: All members. duly completed and signed proxy forms must be received at the Company’s Registered Office at least 48 hours before the time fixed for the meeting. as per this criteria. In the absence of a shareholder’s valid CNIC. 779 (I)/2011 of August 18. are entitled to appoint another member in writing as their proxy to attend and vote on their behalf. 2015 to 31st January. entitled to attend and vote at the general meeting. 7. to ensure timely disbursement of dividend. 3. The proxy holders are required to produce their original CNICs or original passports at the time of the meeting.

The Proxy shall produce his/her original CNIC or original passport at the time of the meeting. free of cost. Attested copies of CNICs or passports of the beneficiary owner and the proxy shall be attached with the proxy form. In case of individuals. provide hard copy of the Audited Financial Statements to its shareholders. a resolution of the Board of Directors/Power of attorney with specimen signature of the nominee shall be produced (unless the same has been provided earlier) at the time of meeting. ii. The Company shall. whose names. stated herein below: A. the account holders or subaccount holders whose registration details are uploaded as per Regulations. however. iv. In case of corporate entity. The Proxy form shall be witnessed by two persons. 2000. the account holder or sub-account holders whose registration details are uploaded as per Regulations shall submit the proxy form as per requirement. 8. within seven days of receipt of such request. a resolution of the Board of Directors/Power of attorney with specimen signature should be submitted along with the proxy form to the Company. Annual Report 2014 | 7 . For Attending the Meetings: In case of individuals. Further guidelines for CDC Account Holders: CDC Account holders will have to follow the guidelines issued by the Securities and Exchange Commission of Pakistan (SECP) through its Circular 1 of January 26. In case of Corporate Entity. addresses and CNIC numbers shall be stated on the proxy form. shall authenticates his/ her original valid CNIC or original passport at the time of attending the meeting. For Appointing Proxies: i. v. on request. iii. B.

021 Unit .372.044) (66.051.006 60.440 1.459 Cost of sales 27.275 1.654 16.223.535.Tons 128.697 62.439) Administrative & selling expenses Profit before taxation 978.40 3.516 108.Tons 1.226 221.936 34.650 1.879 Sugar cane crushed M.15 312.439) (58.84 4.001 119.036 Profit after taxation 979.832 548.121.II Season started Date 24-Nov-13 30-Nov-12 18-Nov-11 25-Nov-10 15-Nov-09 23-Nov-08 Season closed Date 17-Apr-14 7-Apr-13 31-Mar-12 30-Mar-11 1-Mar-10 5-Mar-09 Days worked Days 145 129 135 126 107 103 Average daily crushing M.677 25.523 687.17 4.626 21.083 Unit .186.028 137.118.749.Tons 1.01 4.618 356.866.099 23.Operating Highlights (Rupees in thousand) Operating Results 2014 2013 2012 2011 2010 2009 Gross sales 32.47 11.03 123.91 11.281 2.701 8.668 134.646 Sugar recovery % age 10.079 151.044 Molasses recovery % age 4.534.463 Sucrose recovery % age Sugar production M.887 6.516.197 24.22 10.363 595.151 242.11 4.811 7.183.67 9.409 1. Tons 19.25 Sugar production M.721 115.229 81.134 28.41 4.457 927.384 44.327.89 13.675 44.38 4. Interim Dividend .94 10.228 16.375.711.051 115. Tons 2.467.48 4.135.95 22.310. 2014 2013 2012 2011 2010 2009 Unit .40 10.645 26.507) (126.394 1.Tons 62.I Season started Date 24-Nov-13 30-Nov-12 18-Nov-11 25-Nov-10 15-Nov-09 23-Nov-08 Season closed Date 21-Apr-14 11-Apr-13 7-Apr-12 31-Mar-11 5-Mar-10 9-Mar-09 Days worked Days 149 133 142 127 111 107 Average daily crushing M.744. Tons Molasses recovery % age Molasses production M.469 13.984 587.36 10.318 486.81 11.381 Interest expenses 1.16 4.898.386.64 10.594.306.155 49.007.631 2.cash Final Dividend Production Data .968 4.957.42 8.746 289.250 8 | JDW Sugar Mills Limited .50 % 20 - - - - - .30 3. .52 24.510.cash % 50 60 60 90 70 40 .504.282 22.729.488.054 651.703 15.062.066 19.Tons 10.783 36.595 68.684 9.761 1.850 165.826 10.430 1.822 2. 10 - Basic earnings per share Rs.911 Sugarcane crushed M.578 1.880.484 Molasses recovery % age 4.128 769.24 10.168.063 1.III Season started Date 20-Nov-13 3-Dec-12 25-Nov-11 1-Dec-10 9-Nov-09 1-Dec-08 Season closed Date 7-Apr-14 27-Mar-13 20-Mar-12 31-Mar-11 5-Mar-10 4-Mar-09 Days worked Days 139 115 117 121 117 94 Average daily crushing M.411 20.181 7.90 4. Tons 10.39 15.491 20.127.864 27.222 30.572 48.35 4.658 1.421 114.463 2.095 16.768 1.bonus % .440 9.872 6.895 20.720 5.65 11.204 156.02 Molasses production M.377 99.553 Other income (344.033 83.999 1.245.651 7.147 272.30 Sugar production M.864 92. .352 67.701 1.784 Sugar cane crushed M.429 445.742 867.468 Other expenses 63.650 119.69 11.21 4.380.21 Molasses production M.387.685 22.Tons 52.04 10.484 11.718 120.83 11.981.796 705.Tons 8.269 1.717.880 24.765 Sugar recovery % age 10.525 786.41 4.491.239 19.253.041 1.592 5.200.690 6.256 552.466 77.261 Net sales 30.706 924.544) (134.232 1.27 4.334.975 212.066) (24.304 41.84 11.Tons 162.

268 11.42 10.500.898 9.000 70.246 900 2010 28.000 303.000 27.000 22.500.750 18.811 20.84 8.660 2.311 16.372 1.000 220.500.208.000 10.000 3.00 1200 978 927 687 925 980 600 16.040.000 295.83 10.000 100.69 9.000 6.30 11.00 1.65 5.5 1.834 30.00 2009 2010 2011 2012 2013 2009 2010 2014 Sugar Production (M.000 8.000 538.39 15.131 10.707 15.0 8.24 4.000 4.5 4.0000 603.552 10.380 24.22 10.5 5. Tons) 2011 Unit-I 2012 Unit-II 2013 2014 Unit-III Net Sales (Rupees in Million) 33.744.81 10.04 9.535 30.000 460.91 10.67 10.495 12.52 12.899 9.500.40 11.00 2009 2010 2011 Profit before tax 2012 2013 Profit after tax 2014 - 2009 2010 2011 2012 2013 2014 Annual Report 2014 | 9 .000 501.729 24.500.89 24.00 548 588 2011 20.500.0 500.25 10.000 11.873 3. Tons) 12.36 11.00 1500 2012 2013 2014 24.000 2009 2010 2011 2012 2013 2.000 428.000 580.50 11.94 11.223 2100 2009 22.00 8.381 21.0 4.557.64 10.957 1800 300 0 - Earnings Per Share (Rupees) Profitability (Rupees in Million) 2400 2014 4.47 13.15 11.Operating Highlights Graphical Presentation Sucrose Recovery (% age) Sugar Cane Crushed (M.183 27.000 11.636.0 3.000 340.5 2.95 1.000 9.668 10.909.00 1.0 6.

00 32.05 Billion .Financial Highlights Year 2014 Earnings Per Share 16.33 Billion Contribution to National Exchequer Rs 2.39 Rs Sugar Production 604 Rs Thousand Tonnes Profit After Tax Rs 980 Million 10 | JDW Sugar Mills Limited Sales Revenue Dividend Per Share Rs 7.

535 27.612 137.36 11.04.866.04.39 M.81 10. Salaries & allowances Annual Report 2014 | 11 . 1.234 M.658 1.13 -- 30.535.11.11.13 20.746 128.11.83 10.67% Salaries & allowances 3.04.22 11. Operating profit has registered 14% increase over last year.822 1.269 1.650 4.12 30.186.11. 32 billion.Tons 2.516 134. molasses recovery has registered increase from 3.40 11.007.86 11.001 41.574 49. 2014.631 1.13 07. Despite comparatively low sucrose recovery the sugar produced this time was 12 % higher than last year which was a record production and mainly because of 17 % higher sugar cane crushed. Deharki Sugar Mills being wholly owned subsidiary of the company has achieved 11.183 Operating profit 2.130 538.768 5.11.09% Cost of cane 70.834 289.327 28.204.Tons 175.29%. in million) Gross sales 32.668 603.03.04.29 3.03.Tons 66.13 Days 142 119 M.90 4.13 17.39 15.12 Date 10.04 % sucrose recovery which was the highest sucrose recovery achieved by any sugar mills in Pakistan.652 tons per day last year.11 4.35% to 10.253 99. the Mills on the average were operated for 144 days during the year under review as against 126 days with average crushing of 37.13 149 145 139 144 133 129 115 126 Sugarcane crushed M.516 Net sales 30.13 30. The operating and financial results for the year under review are summarized below: Operating Results 2013-14 2012-13 Description Unit JDW-I JDW-II JDW-III COMBINED JDW-I JDW-II JDW-III COMBINED Starting Date 24.421 162.90% Cost of cane Other overheads Finance Cost Depreciation & amortization 2.540 Molasses recovery %age 4.12 03.91 10.377 52.Tons 1.41 4.97% to 4.30 4.04 11.744.595 tons per day.718 Sugar recovery %age 10.47 • The Company’s gross turnover has increased by 13 % as compared to last year with total volume has now crossed the level of Rs.72% Finance Cost 6.946 1.Tons 312.Directors’ Report It gives me pleasure in presenting you the Company’s 25th Annual Report and Audited Accounts for the year ended 30th September 2014. • The Company has earned a pre-tax profit amounting to Rs.35 Molasses production M. • • Average sucrose recovery achieved this time was 49 bps less than last crushing season which has reduced from 11.14 28.97 The comments on these results are as under: • With average combined crushing of 38.04.Tons 123.147 114.16 4. Expenditures’ Allocation Other overheads 17. 978 million as against pre-tax profit of Rs.567 Profit before tax 978 1.922 2.13 27.185 %age 11.13 24.62% Depreciation & amortization 1.86% due to heavy frost caused damage to the sugar cane during first week of January.311 million last year registering a decrease of 25 % mainly due to substantial increase in the financial charges.12.572 238.504.13 Financial Indicators An analysis of the key operating results of JDWSML is given below: 2013-14 2012-13 (Rs.11.11.304 62.311 Profit after tax 980 925 Earnings per share 16.384 48.746 %age 4.557.380 The subsidiary of the company has achieved the following operating results in its third year of operation: Operating Results – Subsidiary Company Description Unit 2013-14 2012-13 Starting Ending Working Sugarcane crushed Sugar production Sugar recovery Molasses production Molasses recovery Date 20. However.18 4.590.04. Sucrose recoveries achieved by others three units of the group were also among the top five highest recovery achiever mills in Pakistan.13 07.200.668 Sugar production M.01 3.155 188.13 -- Working Days 21.12 -- Ending Date -- 11.

However.578 tons of sugar during the year. 5.47 to Rs. 170 million. 170 per 40 kg in Punjab and Rs. Rs. Sale of electricity and value addition of bagasse in the form of power generation have contributed significantly in the net profitability of the company. 24 billion to Rs. The first 26.980 million resultantly basic earnings per share have slightly increased from Rs. for ongoing crushing the support price of sugar cane has been increased by Rs. Electricity from Deharki sugar mills amounting to Rs. • The Company continued its policy of prompt payment to growers during the season. TCP on instructions 12 | JDW Sugar Mills Limited Other points of your interest are summarized below: • The Company has been successful in completing and commissioning its two high-pressure Co-Generation plants at Unit-II (Sadiqabad) and Unit-III (Ghoki). However. BMR and carrying over of huge unsold sugar stocks for longer time. The core reasons are unfavorable sale prices of sugar. 135. • The Company is struggling this year to improve its financial ratios. • The company has been making investments on steam economy since last four years by virtue of which surplus bagasse is becoming available for sale and internal consumption. certification and trial run requirements.000 tons of sugar. the Company is fulfilling its financial obligations on time and enjoying good relations with all the financial institutions its dealing with.5 billion to Rs. The company on group basis was successful in exporting approx.15.6 MW plant at Unit-II achieved commercial operations on 12 June 2014 after clearing all testing.9 billion to Rs. • Gross revenue from sale of electricity from captive power to Multan Electric Power Company (MEPCO) and Sukkur Electric Power Company (SEPCO) from JDW I and JDW III was Rs. • The balance sheet size has increased from Rs. During the financial year under review. acquisition of sugar cane cultivation activity. In order to . massive expansion in Co-Gen and additions to fixed assets through BMR.000 tons with export incentive of just inland freight subsidy of Rs. • For the crushing season 2013-14 the minimum support price of sugar cane remained unchanged at Rs. Huge carryover stocks and record sugar production with comparatively low sugar exports kept the sugar prices under pressure throughout the year. 172 per 40 kg in the province of Sindh.4 billion. 6 billion. huge carry over sugar stocks. investments in group companies. a gross turnover of Rs. • There has been substantial increase in the financial charges of the company as compared to last year which is mainly due to increase in bank borrowings on account of major expansion. Ministry of Finance has not yet fully released funds of inland freight subsidy to Trade Development Authority of Pakistan (TDAP) hence accumulated inland freight subsidy on group basis amounting to approx. Other operating expenses have decreased by 54% due to decrease in the provisioning of WPPF and WWF. 925 million to Rs.16. Rs.Directors’ Report Profit after tax has increased from Rs. Owing to reduction in sucrose recovery the gross profit ratio has decreased from 11. 1 per kg. The second 26. from Federal Government has stopped buying sugar from the Mills. 118 Million sold last year. 177 Million was also sold to SEPCO as against Rs. 474 million (2012-13: Rs.39.78% to 10. Bottom line outcome from sale of sugar remained discouraging due to depressed sugar prices.57%. These pioneering projects are now supplying much-needed renewable electricity to the national grid. Accumulated reserves are more than nine times of the paid up capital registering increase from Rs. However. 34 billion. 10 per 40 kg by the Governments of Sindh and Punjab. In future. However. all such sugar purchases will be made by the Utility Stores Corporation directly. 5. Decrease in selling expenses is attributable lesser sale of sugar export as compared to last year. Total equity & reserves have increased from Rs. 4. There has been normal increase in administrative expenses which have gone up by 8%. 306 million on account of export of sugar is still receivable from TDAP. 358 million). Immediately after the close of the crushing season 2013-14 the Company had fully cleared the balance cane payment.8 MW project at Unit-III achieved commercial operations on 03 October 2014 after similarly completing all pre-commissioning formalities. Company will keep on investing more money in this area until targeted level of “Steam %age to Cane” is achieved. • Depreciation charges have increased by approx. Except sale of small quantity of bagasse rest of the entire quantity was used internally in the Co-Gen Projects for power generation. • Due to huge carry over sugar stocks and expected surplus sugar production in the country Federal Government allowed export of sugar up to 750.744 million was achieved from the two Co-Generation projects. • The Company took part in the tenders floated by Trading Corporation of Pakistan (TCP) for purchase of sugar and on group basis was able to sell 35.

183. Chartered Accountants who were recommended for appointment by the Board and duly approved by the Securities & Exchange Commission of Pakistan (SECP). the Company always gives priority and endeavors to.000 tons of sugar and rest of the quota was lapsed.000 million prior to start of crushing season 2014-15 was completed by arranging long term loans and lease financing. In view of expected surplus sugar production in the crushing season 2014-15 both in the domestic and international markets Federal Government has recently allowed export of sugar up to 650.577 5.314 Relationship with Growers • The Company enjoys cordial relationship with the farmers’ community as it considers the growers to be its backbone. 2013 decided to acquire all assets & liabilities of JK Farming System Limited pertaining to cultivation of sugarcane. 2013 has reaffirmed the entity ratings of JDW Sugar Mills Limited (JDWSML) at ‘A/A-1’ (Single A/A-One). This acquisition is helping to exercise better controls over the corporate farm under the umbrella of a listed company to bring more technological changes. 2013 was assumed as the cut-off date. Out of this quota sugar industry was able to export up to 650. Annual Report 2014 | 13 . • Before start of crushing season 2013-14 federal government has allowed export of sugar up to 500. The operations which were not cost effective were stopped. Dividend The Board of Directors of the company has recommended 20% interim & 50 % final cash dividend. subject to approval of the shareholders in the Annual General Meeting. amounting to Rs. In order to fix technical issues company has shortlisted technical consultants for pulp and power & steam who will be appointed soon to start work on these areas.410 Appropriations during the Year Final cash dividend 60% for the year ended 30 September 2013 (358.553) Balance as at 30 September 2014 4.705.. JCR-VIS Credit Rating Company Limited (JCR-VIS) on October 07. 8 per kg and inland freight subsidy of Rs. Whatever wood pulp was produced during trial run was sold in the local and international markets and got good response regarding quality of the pulp. 3. further increase the farm size and improve yield per acre. The cost audit is being conducted by Uzair Hammad Faisal & Co. All this is being done through a mandate given to MCB Bank Limited. The project was completed and put on trial two years ago but due to technical issues relating to steam and power operations could not be continued. For this purpose 20th November. The audit report will be directly submitted to SECP within the prescribed period as required by above referred law. This has helped a lot otherwise had there been no permission of export the local sugar prices would had been a disaster for the sugar industry. Outlook on the assigned ratings is ‘Stable’. Rating of the company for TFC issues has also been reaffirmed at ‘A+’ (Single A Plus). in thousands) Un-appropriated profit as at 01 October 2013 Total comprehensive income for the year 4.197 Subsequent Effects The Board of Directors of the Company in their meeting held on 03 January 2015 has proposed the following: Final cash dividend 50% for the year ended 30 September 2014 (298. 2014 (Rs. 2 per kg to facilitate sugar industry to compete internationally to sell surplus sugar abroad and make timely payment to sugar cane growers.212. • • The Company’s financial results are also subject to cost audit under the companies (Audit of Cost Accounts) Rules 1998 as in previous years. In addition to above 20 % regulatory duty has been imposed on import of raw and refined sugar to stop inflow of cheap imported sugar. The company has been successful to complete this process of acquisition as per schedule. To maintain and further strengthen the relationship. This project is being taking forward with new thinking and revised structuring to achieve desired results.000 tons with cash subsidy of Rs.000 tons was granted during the season.000 tons and another permission of 250.put financial ratios in line with required standards the company has re-profiled its few debts by capitalizing short term borrowings into long term loans for a period of five to six years and entire BMR approx.660) Proposed Interim cash dividend 20% for the year ended 30 September 2014 (119.833 970. • The Board of Directors in its meeting held on 20 November. • The company has been making investments in Faruki Pulp Mills Limited (associated company) since last few years.406.883) 4. Appropriation of Profit The following appropriations were made during the current year.

500 to Rs. • Appropriate accounting policies as stated in the notes to the financial statements have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable prudent judgment. There is still uncertainty as to how subsidy of Rs.458 tons of sugarcane has already been crushed with average sucrose recovery of 10. seed. • Provide better quality and better yield varieties of sugarcane resulting in increased productivity in sugarcane yield per acre. 180 per 40 kg by the Punjab Govt. agricultural implements. cash flow and changes in equity. has not been absorbed by the market in view of surplus sugar production both in the domestic and international markets which has kept the sugar prices depressed and even below the manufacturing cost. the results of its operations. 2. has recently allowed export of sugar with certain incentives up to 650. These measures of the government has given some stability to sugar prices in the local market. huge amount of agri loans were advanced to growers in the form of cash. • Enhance technical skills through various extension and advisory programs. 1.11% and sugar production of 180. turbines & tube wells. reduction in sucrose recoveries and yield per acre the estimated sugar production is expected to be down by 15 to 20 % as compared to last year. Imposition of 15 % Regulatory Duty by the previous Government on export of molasses is causing loss of approx. • Proper books of accounts of the Company have been maintained. as applicable in Pakistan and the requirements of Companies Ordinance. 10 per kg would be paid to sugar mills against export of sugar. 2014 and on group basis up to 3 January 2015. Rs. 1. Govt. 182 per 40 kg by the Sindh Govt. Future Outlook • • The crushing season 2014-15 was started in the last week of November. 172 to Rs. Federal Govt. • Sugar industry is going through difficult times where during last few years the minimum support price of sugar cane has been significantly increased which 14 | JDW Sugar Mills Limited • Under above referred challenging environment the company wants to focus more on valuation of it’s byproducts. Due to decrease in area under cultivation. making its processes more efficient and reduction in financial charges. • The system of internal control is sound in design and has been effectively implemented and monitored. has realized and came forward to rescue sugar industry by allowing export of 650. and from Rs. Crop size this time is approx.823.000 tons. Corporate and Financial Reporting Framework The Directors are pleased to confirm compliance with corporate and financial reporting framework of the Securities and Exchange Commission of Pakistan and the Code of Corporate Governance for the following: • The financial statements present fairly the state of affairs of the Company. Abolishing of Regulatory Duty on export of molasses and creation of strategic reserves of sugar by TCP up to at-least 500.000 tons in addition to its monthly requirement for Utility Stores Corporation (USC) and other institutions would also help the sugar industry to come out of its crisis. During period under review.Directors’ Report • Consistently follow the policy of timely payments of sugarcane to growers. 1984 have been followed in preparation of the financial statements. • Procure and provide latest agricultural equipment on subsidized rates to growers on easy installment basis. • International Financial Reporting Standards.000 per ton of molasses at prevailing export price of molasses to each mill having no distillery set up which is discriminately and not giving level playing field.350 tons including sugar in process. Once there is a clarity in this regard the export of sugar will boost which will result in bringing the sugar prices at profitable levels. • Fulfill farmers’ financial requirements by providing them financial assistance from own sources & by arranging loans for them from banks and also through different financial schemes of National Rural Support Program (NRSP).000 tons as stated above. 10 per kg subsidy but the key factor is the prompt payment of subsidy to the sugar industry otherwise this measure of the govt would hardly bailout the industry from ongoing crisis.000 tons of sugar with Rs. fertilizers and pesticides. The minimum support price of sugarcane for crushing season 2014-15 has been increased from Rs. • The carryover sugar stocks of the industry were app. 500. 10% less than last crushing season. 170 to Rs. . • There are no doubts about the Company’s ability to continue as going concern.

CEO. 4. KPMG Taseer Hadi & Co. 6. During the year. which was organized by Executive Development Centre of The University of Lahore duly approved training institution by Securities and Exchange Commission of Pakistan. The committee regularly meets as per requirement of the code. On behalf of the Board of Directors 03 January 2015 Ijaz Ahmed Lahore Director Annual Report 2014 | 15 .217 shareholders of the Company as of 30 September 2014. 2014 aggregating to Rs. audited accounts of the Employees Provident Fund the value of its investments as on June 30. Chartered Accountants retire and have offered themselves for re-appointment. 278 million). one HR & R committee meeting was held and attended by all members of the committee. nine meetings of the Board of Directors spouses and minor children during the year is enclosed in were held. Corporate Social Responsibility Activities: Directors who could not attend board meetings due to their preoccupations were granted leave of absence. 2. As per The present auditors M/s. The Directors of the Company are also thankful to the banks and leasing companies for the financial assistance and co-operation they have extended to the Company.782 Million) approximately to the national exchequer in the form of taxes & duties during the year under review. Audit Committee Auditors The Board has constituted an Audit Committee consisting of three members including Chairman of the Committee. 289 million (2013: Rs. staff and members of the management team. 3. Jahangir Khan Tareen Makhdoom Syed Ahmed Mahmud Syeda Sameera Mahmud Ijaz Ahmed Raheal Masud Asim Nisar Bajwa Zafar Iqbal 7 6 7 9 9 9 9 National Exchequer The Company contributed a sum of Rs. Value of Provident Fund Investment The Company operates a recognized provident fund scheme covering all its permanent employees.047 million (2013: Rs. A statement of pattern of shareholding is enclosed in this report. Equal monthly contributions to the fund are made both by the Company and its employees in accordance with fund rules. Human Resource Committee The Board has constituted a Human Resource Committee in compliance with the Code of Corporate Governance 2012. Meetings of Board of Directors Statement of transaction in shares of the Company by the Directors.. Acknowledgement The Directors would like to express their appreciation for the dedicated hard work of the workers. Zafar Iqbal during the year. • A statement regarding key financial data for the last six years is annexed to this report. 7. Growers are the key element of our industry and we thank them for their continued cooperation. The Company undertook the Corporate Social Responsibility Activities which are discussed in detail on pages from 22 to 23 during the period under review. Meetings attended 1. five audit committee meetings were held and all meetings were attended by all members. The committee assists the Board in reviewing internal audit manual and internal audit system. During the year. There were 1.• There has been no material departure from the best practices of corporate governance as detailed in the listing regulations. 2. 5. 1. Pattern of Shareholding • Information about taxes and levies is given in the notes to the financial statements. Directors’ Training Program The Company has arranged one training program for one of its Director namely Mr. Attendance was as under: this report. CFO and Company Secretary and their During the year.

001 655.123.001 195.001 135.678 25 5.640.001 775. Name of the Company JDW SUGAR MILLS LIMITED 3.140.648 1 10.000 2 775.001 2.250 3 40.930.000 1.647 322 1.342 1 5.000 651.600 2 110.001 120.001 100.001 110.839 1 130.327 1 190.000 229.001 170.001 15.000 5.000 110.495.000 200.292 4 45.864 1 770.001 20.145.281 1 7.001 5.000 1 2.470.001 2.000 222.001 115.000 125.000 2.Pattern of Shareholding FORM “34” The Companies Ordinance 1984 (Section 236(1) & 464) 1.000 536.000 195. No.548 1 400.547 5 20.940.300 2 105.000 68.000 1 50.000 312.001 7.001 25.285.000 130.465.776.001 45.001 10.001 780.329 17 10.001 80.001 405.494 1 650.355.145 1 2.000 337.000 775.143.001 2.000 2.000 52.001 35.357.733.932 1.000 350.730.000 2.001 3.472 1 1.001 2.925.645.001 65.360.937.465. Incorporation Number 0021835 2.779 2 165.000 105.000 2.000 187.661 16 | JDW Sugar Mills Limited .319 7 25.735.216.928.551 3 115.120.540 1 95.648 1 2.000 1 105.001 11.290.125.000 402.000 73.000 156.691 3 60. Pattern of holding of the shares held by the shareholders as at 30–09–2014 4.001 10.000 173.000 10.000 2.000 100.001 110.688 16 15.888 1 75.000 63.000 3.001 2.000 1.001 5.220.643.648 1 2.001 55.285.500.500.636 1 2.475 277 410 101 500 127.048 2 30. of Shareholders From 1 Shareholding To Total Shares Held 100 8.000 7.551.381 1 3.935.001 30.001 1.000 11.254 95 501 1.001 50.217 59.000 192.215.580 1 11.

288 2.1573% 35.8 General Public a. Chief Executive Officers. Date 30–09–2014 Annual Report 2014 | 17 .398.0334% Banks.183 0. 5.0035% 5.2 Associated Companies.959.1 Directors. Categories of shareholders 5.370 - 40.941.441 60.028 51. undertakings and related parties 5. and their spouse and minor children 5.172 1. Local b.7 Share holders holding 10% and more - 94.5 Insurance Companies .6 Modarabas and Mutual Funds 5. Name of Signatory MUHAMMAD RAFIQUE 8.7912% .545 87. CNIC Number 35201–3029372–5 10.085 3.9 Others (to be specified) Joint Stock Companies Investment Companies Foreign Companies Others 6.4459% 0.4 Shares Held Percentage 30. Development Financial Institutions. - NIT and ICP 19.6854% 0. Signature of Company Secretary 7.1458% 5. Non Banking Financial Institutions 49.302.023 0.6553% – 864.3 5.5.0823% 5.967 0.1262% 24. Designation COMPANY SECRETARY 9. Foreign 5.

Development Finance Institutions. 2014 Sr.357. No.381 7.0905% 7 MR. RAHEAL MASUD (Director) 500 0.7635% 3 MR. IJAZ AHMED 4 RANA NASIM AHMED 5 MR. IJAZ AHMED (Director) 2.573 0.0990% All trades in the shares of the listed company.813.0008% 7. ALI KHAN TAREEN 7.UBL RETIREMENT SAVING FUND .8236% 9 MRS.000 . - .000) 210.932 19.000) . Mutual Funds (name wise detail): 1 CDC .4233% 5 EFG PRIVATE BANK LIMITED 3.421 0.0990% 6 SYEDA SAMEERA MAHMUD (Director) 651. MUHAMMAD RAFIQUE 18 | JDW Sugar Mills Limited Addition Through Gift Deletion Through Gift (1.212.300 0.864 1. Directors.500. ZAFAR IQBAL (Director) 1.6165% 16.360 0.050 0.648 13.7635% 3 MR. Banks.285.198. .861 2 MUKHDOOM SYED AHMED MAHMUD (Director) 11. JAHANGIR KHAN TAREEN (Director/Chief Executive) 16.928.0051% IV. 300.2638% 4 RANA NASIM AHMED 4.025 0.TRUSTEE AKD INDEX TRACKER FUND 2 CDC . Company Secretary and their spouses and minor children: Name Purchase/ (Sale) 1 MR.000) . JAHANGIR KHAN TAREEN 2 MUKHDOOM SYED AHMED MAHMUD 11. SARWAT SULTANA W/O IJAZ AHMED 3.0041% 4 MR.432 (300. CFO. AMINA TAREEN W/O JAHANGIR KHAN TAREEN 2.EQUITY SUB FUND 3 GOLDEN ARROW SELECTED STOCKS FUND LTD. of Shares Held Percentage Associated Companies.283 0.198.7198% . carried out by its Directors. JAHANGIR KHAN TAREEN 2 MUKHDOOM SYED AHMED MAHMUD S. No.0118% 68.Categories of Shareholders As required under Code of Corporate Governance (CCG) As on September 30. - VI. Public Sector Companies & Corporations: 8. Insurance Companies and Modarabas: 56. Non Banking Finance Institutions. COO.0194% 27.813.932 19.381 V.429 0.500. Name I. No 3 MR.636 3.0023% 8 MRS.0024% 5 MR. - 1.000) .0942% VII. - II. III. CEO and their Spouse and Minor Children (name wise): 1 MR.000 - (365. (175.861 27. Executives: 5.342 5.1143% 11.437. Undertakings and Related Parties (name wise details): . ASIM NISAR BAJWA (Director) 1. Shareholders holding five percent or more voting rights in the listed company (name wise details): 1 MR. CEO.

Punjab achieved Commercial Operations Date (COD) on June 12. high-pressure cogeneration power plants with total capacity of approximately 53 MW were successfully completed and commissioned during the year. The first 26. it is hoped that the Company’s initiatives will serve as a catalyst for the realization of the sugar industry’s 2. The plants efficiently utilize indigenous bagasse as fuel. Sindh achieved COD on October 3. 2014.6 MW power plant at JDW Unit-II. also has the major benefit of saving precious foreign exchange for the country compared to imported fuels such as furnace oil or imported coal. As various other sugar mills are now following suit. Both of the Company’s pioneering bagasse-based. Annual Report 2014 | 19 .8 MW plant at JDW Unit-III. while the second 26. The Company’s power plants are the first to materialize under NEPRA’s upfront bagasse tariff. District Rahim Yar Khan. Both power plants are fully operational and supplying affordable and renewable electricity to the national grid under long-term Energy Purchase Agreements executed with the Central Power Purchasing Agency of the National Transmission & Despatch Company Limited.High Pressure Co-Generation Power Plants 2014 was a breakthrough year for the Company’s ongoing diversification into the power sector. 2014 after completing all independent testing and certification requirements. Sadiqabad. which besides being environmentally friendly. District Ghotki.500 MW power potential.

At JDW we have developed our own sugarcane varieties using conventional sugarcane breeding and selection processes. Information available covers topics such as farming for efficient harvesting. pest and disease outbreaks like red rot. Soil and water testing laboratory. sugar cane pyrilla are a common feature. Magnum 340 HP tractors with GPS Scrappers for levelling. 20 | JDW Sugar Mills Limited Crop varieties Cultivating the right variety is imperative to sustainable and competitive farming. • Harvesting. Fertilizing (2 and 3 row coulter applicators). Transfer of technology. . • Granular pesticide applicator. and increasing yield potential. Both harvesting efficiency and crop presentation affect cane yield. Pest and diseases Due to the inherent nature of sugarcane crop. JDW has established a separate bio-lab with a team of entomologists keeping check on the pest and disease situation and other factors common to sugarcane cultivation. Precision agriculture Precision agriculture (PA) is the act of managing different land variables using latest technology such as global positioning systems (GPS). This collection includes local selected varieties. We have managed to acquire latest tractors and other farming equipment from local and imported suppliers. and Application of precision agriculture methodologies Automation and mechanization The operations of large size corporate farms cannot be managed effectively unless its key operations are either mechanized or supplemented with mechanization. clones from previous crosses and wild and foreign varieties. Adoption of PA practices can improve the efficiency and profitability of farming operations to a great extent. and • Well equipped workshop for high tech maintenance. Parents with valuable traits are used for cross-pollination and are selected from our germplasm collection. Bio-laboratory facility. The HBP guidelines also focus on the impact that crop presentation has on harvesting efficiency. crop yield. Our engineering team under the supervision of foreign consultants are making full use of these techniques to achieve higher yield at lower costs. reduction in base cutter/chopper losses.tonnes of cane over 12. cane quality and ratooning. We at JDW believe in investing in our future by undertaking large scale research and development activities such as:• • • • • • Varietal screening and selection.000/. Over the years. experience together with modern tools and machinery and distinctive agronomic strategies have helped us built highly efficient and ecofriendly farms with higher yields. we have rationalized farm layouts and combined traditional farming techniques with newly acquired technologies to achieve maximum yield in the region. CCS. The mechanical harvest and transport system continues to evolve into a world class operation as efficiencies improve with new innovations. • Inter row herbicide sprayer. • CNH Tractor 140 HP for Zonal Ripper. This large and expanding corporate farming identity is now a farming leader within the Asian sub-continent. Harvesting Operations JDW has adopted the use of mechanical harvesters and prime mover cane transport systems for harvesting and transporting cane from farm to mill on timely basis. pokah. geographic information systems (GIS). and improvement in billet quality for planting.000/. all ground water sources are constantly tested at the laboratory to ensure that suitable water is applied to crops. JDW currently operates 14 harvesters and has the capacity to mechanically harvest over 400. improve cane quality. and reduce stool damage. The farms are designed using latest laser levelling technology thus helping achieve improved irrigation efficiencies. Foreign consultants are working with JDW and have developed Harvesting Best Practice (HBP) guidelines to reduce cane loss. • Magnum 340 HP tractors with GPS enable Ecolotiger Cultivation. At JDW. improved infrastructure and improved farm designs. reducing irrigation cost. Our unique farming techniques have also led to the capacity building of existing farmers thereby resulting in improved and reliable cane supply to JDW. Further. Irrigation JDW has put greater emphasis on improving irrigation efficiency in the region. This saves a lot of harvesting and transportation costs and crucial cane nutrition. which is being led by a team of highly experienced professionals. Few of our mechanized operations are given below:• • • Using semi-mechanized planting techniques. remote sensing (RS) and yield mapping. • Gypsum Spreaders. • Puma Tractor 140 HP with hydraulic tilting blade to make drains. irrigation using poor quality tube well water has led to serious soiled gradation resulting in loss of yield. Cane production is affected by both harvesting and field issues which can impact on sugar quality and quantity.Corporate Farming Farming Activities by JDW Sugar Mills Limited During the year a separate division ‘Corporate Farms’ has been set up within the company.acres per season. • High clearance tractor spraying. Our people with prior knowledge. Also since the majority of our cane growing area lies along the Indus River there is a greater risk of presence of harmful weeds and herbs. the effect of extractor fan speed on cane loss. Application of GIS (Computerized Geographic Information System).

Annual Report 2014 | 21 .

) and a non-profit organization (National Rural Support Programme). After producing flowers.284 (2013:17. 22 | JDW Sugar Mills Limited . followed by selection process best sugar cane cultivators are evaluated for commercial growing. NRSP has distributed loan of Rs. After germinating the fuzz. The community organizations (COs) receive SPEP support from a professional team consisting of a social organizer. 731. These parents are made to grow and produce flowering at Thatta which has a suitable site/climate.027) farmers. 2. private sector (JDW Sugar Mills Ltd. Sugarcane Productivity Enhancement Project (SPEP) This program is a truly multi-stakeholder project comprising of partnership between farming communities.322) with a membership of 20.772 (2013: 1. • Provision of agricultural extension services through which agricultural graduates employed by JDW Sugar Mills provide services through direct advice in CO meetings. these are subjected to cross each other to produce sugarcane fuzz/ seed. The main features of the SPEP include: • Social mobilization and organization of the rural poor into Cos. top quality sugarcane germplasms/ parents have been imported from all over the world. • Credit facility from JDW Sugar Mills and NRSP for purchase of seed and other agricultural inputs on guarantee of the CO. Further. With continued support from JDW Sugar Mills. 40 seedlings/varieties have been produced from flowering at Thatta research site. and • Small farmers have access to farm machinery provided by JDW Sugar Mills on credit at subsidized rates. an agricultural extension officer. NRSP extended its operations in 58 union councils. SPEP has been designed to enhance small farm (less than land area of 20 acres) profitability through agriculture & livestock extension services and provision of credit without collateral. 542. published literature and farm visits.39 million (2013: Rs. The number of active COs grew to 1.Corporate Social Responsibility 1. In 2014. Crop Improvement Program High Yielding and high sucrose contents sugarcane varieties have been produced through sugarcane Fuzz.77 million) in the year 2013-14 to raise the productivity & income of the farming communities. and a veterinary officer.

3. Integrated Pest Management

5. Education

Currently JDW is using Integrated Pest Management (IPM)
approach which is an integrated control mechanism which
combines and integrates biological (natural predators
& parasites) and chemical control and employs the use
of economic threshold to determine when chemical
control should be utilized to prevent pests from reaching
the economic injury level”. IPM is an effective and
environmentally sensitive approach to pest management.
Many species of insects attack sugarcane crop which can
be divided into two major categories including Sucking
Pests and Borers. Pests of both groups can damage the
crop severely which may results in low yield and inferior
quality juice.

Quality Education for All (QEFA) in Rasool Pur Union
Council

Here in JDW IPM is used to control the above said species of
insect pests. Among the sucking pests Pyrilla Perpusilla or
Sugarcane Leafhopper is the most destructive one. To keep
the Pyrilla Perpusilla population below Economic Threshold
Level (ETL) we use Egg Parasite of Pyrilla Perpusilla i.e.
Parachrysocheris Javensis, Nymphal and adult parasite i.e.
Epiricania Melanoleuca. In fields where population of above
mentioned parasites is not enough, we manage releasing
of parasites in such fields and in case of severe attack of
Pyrilla Perpusilla chemical control is employed. As far as
Borers are concerned Trichogramma Chilonis has reared in
bio-lab and released in fields for their control. In addition to
this granular form of chemicals are also applied for control
of Borer complex. Similarly, JDW group has established
a “Pest Warning & Control System for Growers” which is
working at grass root level for creating awareness among
farming community.
4. Farmer Support Program / Livestock Support Project
Livestock has 56% share in economy of rural community
but due to lack of knowledge and skills farmers are not
harnessing full potential of animals either in the form of
milk or meat. As compared to “EU” countries per animal
production of milk and meat in Pakistan is very low. Under
umbrella of “Farmer Support Program” JDW group owns a
dedicated team of Veterinary Assistants/A. I. Technicians for
providing following facilities to growers at their door steps.
1.

Artificial Insemination for breed improvement.

2. Deworming for control of endo and ecto parasites.

In 2002-03, the District Government of Rahim Yar Khan
took a bold initiative in the education sector and handed
over the management of all the primary schools of Rasool
Pur Union Council to NRSP. JDW Sugar Mills fully supported
this initiative and provided operational, financial and
logistic support to the project. The local community was
mobilized & fully involved in the management of schools.
The following additional tasks were given to the community:


Raising funds for provision of missing facilities
Reducing the drop-out rate and increasing enrollment
Reducing teacher’s absenteeism.

The project has been a resounding success, resulting in
efficient management of schools, increase in the student
enrolment, reduction in the drop-out ratio, provision of
basic facilities, and involvement of local communities in
monitoring the performance of school administration. In
the year 2103-14 in District Rahim Yar Khan 7.91 million has
been utilized whereas 9.58 million has been employed in
District Ghotki.
Progress by the Quality Education Program till 2013-2014.
Programs

Boys

Girls Co-Education Total

QEFA - Rahim Yar Khan
No. of Schools
Enrollment
No. of Teachers

50

42

8

8,666 5,015
140

114

100

- 13,681
-

254

8

58

Ghotki – Khairpur
No. of Schools
Enrollment
No. of Teachers

39

11

4,635 2,771
65

26

- 7,406
-

91

Grand Total
No. of Schools 89 53 16 158
Enrollment

13,301 7,786

- 21,087

No. of Teachers 205 140 - 345

JDW Sugar Mills is using its valuable links with the district
education department to make another contribution
towards educational institutes by raising the elementary
and higher schools to graduation level.

3. Vaccination for control of diseases like FMD, HS and
ETV etc.
4.

Counselling related to treatments on phone call.

5.

Special care of model animals for increasing meat and
milk production by use of balanced nutrition.

All medicines are provided to the growers at purchase price
and services are free of cost.
Annual Report 2014 | 23

24 | JDW Sugar Mills Limited

Financial Statements

Annual Report 2014 | 25

including appointment and determination of remuneration and terms and conditions of employment of the CEO. The meetings of the Board were presided over by the Chairman and. The Board has developed a vision/ mission statement. 10. 11. 35 of listing regulations of Karachi and Lahore Stock Exchanges for the purpose of establishing a framework of good governance. were circulated at least seven days before the meetings. 2. There was no change in CFO. The Company has applied the principles contained in the CCG in the following manner: 1. There was no causal vacancy occurred on the Board of Directors during the year. All the Directors on the Board are well conversant with their responsibilities as Directors and the company had arranged one training program for one of its Director namely Mr.Statement of Compliance with the Code of Corporate Governance This statement is being presented to comply with the Code of Corporate Governance (“CCG”) contained in Regulation No. has been declared as a defaulter by that stock exchange. A complete record of particulars of significant policies along with the dates on which they were approved or amended has been maintained. The Directors’ report for this year has been prepared in compliance with the requirements of the CCG and fully describes the salient matters required to be disclosed. in his absence. including this company. 4. Jahangir Khan Tareen Non-Executive Directors Mukhdoom Syed Ahmed Mahmud Syeda Sameera Mahmud Mr. The Company encourages representation of Independent and Non-Executive Directors on its Board of Directors. Zafar Iqbal Executive Director Mr. 7. The Directors have confirmed that none of them is serving as a Director on more than seven listed companies. All the resident Directors of the Company are registered as taxpayers and none of them has defaulted in payment of any loan to a banking company. Zafar Iqbal during the year. Written notices of the Board meetings. have been taken by the Board. 6. The minutes of the meetings were appropriately recorded and circulated. 26 | JDW Sugar Mills Limited . All the powers of the Board have been duly exercised and decisions on material transactions. a DFI or an NBFI or. 8. 9. being a member of a stock exchange. At present the Board includes: Category Names Independent Directors Mr. 3. by a Director elected by the Board for this purpose and the Board met at least once in every quarter. whereby a listed Company is managed in compliance with the best practices of corporate governance. 5. overall corporate strategy and significant policies of the company. Asim Nisar Bajwa Mr. Ijaz Ahmed The Independent Directors meet the criteria of independence under clause i(b) of the CCG. Company Secretary and Head of Internal Audit during the financial year. which was organized by Executive Development Centre of The University of Lahore duly approved training institution by Securities and Exchange Commission of Pakistan. other Executive and NonExecutive Directors. Raheal Masud Mr. The Company has prepared a “Code of Conduct” and has ensured that appropriate steps have been taken to disseminate it throughout the company along with its supporting policies and procedures. along with agenda and working papers.

23. The Board has set up an effective internal audit function who is considered suitably qualified and experience for the purpose and is conversant with the policies and procedures of the Company. Material / price sensitive information has been disseminated among all market participants at once through stock exchanges. 20. which may materially affect the market price of company’s securities.Statement of Compliance with the Code of Corporate Governance 12. We confirm that all other material principles enshrined in the CCG have been complied with. It comprises three members. 03 January 2015 Ijaz Ahmed Lahore Director Annual Report 2014 | 27 . The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard. CEO and Executives do not hold any interest in the shares of the company other than that disclosed in the pattern of shareholding. 13. The financial statements of the Company were duly endorsed by CEO and CFO before approval of the Board. employees and stock exchanges. The Company has complied with all the corporate and financial reporting requirements of the CCG. was determined and intimated to Directors. 14. Chairman is Non-Executive Directors and two of them are Independent Directors. 17. It comprises three members. that they or any of the partners of the firm. The Directors. The Board has formed an Audit Committee. 21. The ‘closed period’. 15. 16. The Board has formed HR & Remuneration Committee. all of them including Chairman are Independent Directors. 18. their spouses and minor children do not hold shares of the company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the ICAP. and business decisions. The terms of reference of the committee have been formed and advised to the committee for compliance. The meetings of the Audit Committee were held at least once every quarter prior to approval of interim and final results of the company and as required by the CCG. prior to the announcement of interim / final results. The statutory auditors of the company have confirmed that they have been given a satisfactory rating under the quality control review program of the ICAP. 22. 19.

Pakistan. to the extent where such compliance can be objectively verified. with the best practices contained in the Code as applicable to the Company for the year ended 30 September 2014. The responsibility for compliance with the Code is that of the Board of Directors of the Company. and upon recommendation of the Audit Committee. We are not required to consider whether the Board of Directors’ statement on internal control covers all risks and controls or to form an opinion on the effectiveness of such internal controls. 2-Main Gulberg Jail Road. place before the Board of Directors for their review and approval its 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 and recording proper justification for using such alternate pricing mechanism. KPMG Taseer Hadi & Co. a Partnership firm registered in Pakistan and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘‘KPMG International’’). As a part of our audit of the 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. 35 of the Karachi and Lahore Stock Exchanges where the Company is listed..kpmg. We are only required and have ensured compliance of this requirement to the extent of the approval of the related party transactions by the Board of Directors upon recommendation of the Audit Committee. Chartered Accountants 2nd Floor. the Company’s corporate governance procedures and risks.com. Our responsibility is to review.pk Review Report to the Members on the Statement of Compliance with the Code of Corporate Governance We have reviewed the enclosed Statement of Compliance with the best practices contained in the Code of Corporate Governance (“the Code”) prepared by the Board of Directors of JDW Sugar Mills Limited (“the Company”) for the year ended 30 September 2014 to comply with the requirements of Listing Regulation No. Servis House.KPMG Taseer Hadi & Co. We have not carried out any procedures to determine whether the related party transactions were undertaken at arm’s length price or not. A review is limited primarily to inquiries of the Company’s personnel and review of various documents prepared by the Company to comply with the Code. in all material respects. 03 January 2015 Lahore Chartered Accountants (Kamran Iqbal Yousafi) KPMG Taseer Hadi & Co. Telephone + 92 (42) 3579 0901-6 Fax + 92 (42) 3579 0907 Internet www. Based on our review. nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Company’s compliance. a Swiss entity 28 | JDW Sugar Mills Limited . whether the Statement of Compliance reflects the status of the Company’s compliance with the provisions of the Code and report if it does not and to highlight any noncompliance with the requirements of the Code. Lahore. The Code requires the Company to place before the Audit Committee.

We conduct our audit in accordance with the auditing standards as applicable in Pakistan. 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. An audit includes examining on a test basis. statement of comprehensive income. Lahore. evaluating the overall presentation of the above said statements. cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan. give the information required by the Companies Ordinance. b) 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. 1984. profit and loss account. a Partnership firm registered in Pakistan and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘‘KPMG International’’). KPMG Taseer Hadi & Co.4 with which we concur. in the manner so required and respectively give a true and fair view of the state of the Company’s affairs as at 30 September 2014 and of the profit. statement of comprehensive income.com.pk Auditors’ Report to the Members We have audited the annexed balance sheet of JDW Sugar Mills Limited (“the Company”) as at 30 September 2014 and the related profit and loss account. to the best of our knowledge and belief. evidence supporting the amounts and disclosures in the above said statements. proper books of accounts have been kept by the Company as required by the Companies Ordinance. Pakistan. cash flow statement and statement of changes in equity together with the notes forming part thereof. Our responsibility is to express an opinion on these statements based on our audit. ii) the expenditure incurred during the year was for the purpose of the Company’s business. was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance. 1984. investments made and the expenditure incurred during the year were in accordance with the objects of the Company. Chartered Accountants 2nd Floor. and iii) the business conducted. Telephone + 92 (42) 3579 0901-6 Fax + 92 (42) 3579 0907 Internet www. c) in our opinion and to the best of our information and according to the explanations given to us. the balance sheet. for the year then ended and we state that we have obtained all the information and explanations which.KPMG Taseer Hadi & Co. as well as. its comprehensive income. we report that: a) in our opinion. and are in agreement with the books of accounts and are further in accordance with accounting policies consistently applied except for the change as stated in note 2. 03 January 2015 Lahore Chartered Accountants (Kamran Iqbal Yousafi) KPMG Taseer Hadi & Co. its cash flows and changes in equity for the year then ended. and d) in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance. 1984. We believe that our audit provides a reasonable basis for our opinion and. 2-Main Gulberg Jail Road. a Swiss entity Annual Report 2014 | 29 .. It is the responsibility of the Company’s management to establish and maintain a system of internal control.kpmg. and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance. and. 1980 (XVIII of 1980). Servis House. were necessary for the purposes of our audit. after due verification. An audit also includes assessing the accounting policies and significant estimates made by management. 1984.

765 9.717 11.702 1.secured 12 Current portion of non-current liabilities 13 Trade and other payables 14 Interest and markup accrued 15 CONTINGENCIES AND COMMITMENTS 16 The annexed notes 1 to 50 form an integral part of these financial statements.067.818.150.035 6.164 23.610 4.555.292.716 1.699 222.677.916.891.216.486.482 4.677.009 .712.secured 8 Liabilities against assets subject to finance lease 9 Deferred taxation 10 Staff retirement benefits .039 44.427.694.488.577.120.616.419 11.834.953 305. 03 January 2015 Lahore 30 | JDW Sugar Mills Limited 2014 Rupees 2013 Rupees 597.secured 7 Long term loans .256.447.034.749 438.721.801.412 5.973 4.gratuity 11 CURRENT LIABILITIES Short term borrowings .761.249.383.542.936.453.164 16.225.766.610 5.076 1.766.981.563.Balance Sheet Note SHARE CAPITAL AND RESERVES Share capital 6 Reserves NON CURRENT LIABILITIES Redeemable capital .831 6.190.156 302.399 68.881.513.343 5.730.555 8.542.052.269 2.666 796.957.280.056.802 597.946 2.291 33.967 498.626.243.732.721.789.578.

As at 30 September 2014 Note ASSETS NON CURRENT ASSETS Property.822.822 173.unsecured 26 Advances.315.610.251 608. prepayments and other receivables 27 Tax refund due from Government Cash and bank balances 28 Non current asset held for sale 29 1.000 11.525.880 113.000 1.280 85.164 23.111 – 693. spares and loose tools 24 Stock in trade 25 Trade debts .594 3.712 14.515.693 1.594.855.661.126.806.252 239.561.136.055 41.383.863.121.642 CURRENT ASSETS Biological assets 18 Stores.452 86.016 4.380.025.310.452 9.072.250.426. deposits.895 200.721.040.324.026.354.471.480 10.000.009 Director 17 18 19 20 21 22 23 2014 Rupees Director Annual Report 2014 | 31 .872.538.650.555 220.777.367 33.692.382 662.243.707 4.048.681.387.056.135.289.094.307 22.930 626.721.050 1. plant and equipment Biological assets Investment property Intangible assets Investments Long term advances Long term deposits 2013 Rupees 17.776 – – 588.216 3.041 10.961 1.273.553.958 426.761.928.775.801.398.443.677.509 3.

516.544.256.792) Selling expenses 33 (122.721) Other income 34 344.091 3.118.050 (306.870.729) (278.099.591 Taxation 1.788.basic and diluted 38 (386.705.269) The annexed notes 1 to 50 form an integral part of these financial statements.332.719) (1.183.649.792.304 Profit after taxation 979.973.434) Gross profit 3.134.652) (490.822) (137.981.228.864.386 27.132 2.922.309.232) Net sales 30 30.270.201.026.838 Cost of sales 31 (27.Profit and Loss Account For the year ended 30 September 2014 Note 2014 Rupees Gross sales 32. Sales Tax and others (1.197.027.522.578.765.227.852) Profit before taxation 978.411.534.832.39 15. 03 January 2015 Lahore 32 | JDW Sugar Mills Limited Director Director .393.306.310.799) Finance cost 36 (1.880.943.182.343.312.915.507.470 Federal Excise Duty.47 Earnings per share .820 16.463) Operating profit 2.053) (1.422 134.281.567.404 Administrative expenses 32 (529.100.295) (23.059.941 Other expenses 35 (63.760.541) (1.089 37 1.810.582.959) (634.895 924.070 (1.084) 2013 Rupees 28.327.

03 January 2015 Lahore Director Director Annual Report 2014 | 33 .496.895 924.522.820 Other comprehensive income Items that will not be reclassified to profit and loss account: Remeasurement of defined benefit liability (13.705.Statement of Comprehensive Income For the year ended 30 September 2014 2014 Rupees 2013 Rupees Profit after taxation 979.747 924.576.594) – Related tax 4.625.820 The annexed notes 1 to 50 form an integral part of these financial statements.522.148) – Total comprehensive income for the year 970.129.446 – (9.

478) (385.310.886) Lease rentals paid (365.881 29.699 23.504.944.776 41.786.599.Cash Flow Statement For the year ended 30 September 2014 Note 2014 Rupees 2013 Rupees CASH FLOW FROM OPERATING ACTIVITIES Cash generated from operations 39 4.485.853.002.018.357.448.000.212) (33.534.995.301) Net cash generated from operations 4.949) (29.458) (488.929.938) (39.994) (2.354.796) (173.921 4.957) Dividend paid (473.027 Payment with respect to net assets acquired from JK Farming Systems Limited (2.458) Proceeds from sale of property.304.602 Short term borrowings .369) CASH FLOW FROM INVESTING ACTIVITIES Capital expenditure (5.399) (355.095.000 (86.366.754) Long term advances 16.888.964 4.000 100.990.508.507.645.382.545) CASH FLOW FROM FINANCING ACTIVITIES Long term loans availed during the year 5.428) – Proceeds from sale of investment in JK Dairies (Private ) Limited 120.398 333.031) Finance cost paid (2.122) Long term loans repaid (1.827.331.937) (1.624) Workers’ profit participation fund paid (83.439.956.717) Net cash increase in cash and cash equivalents 45.net (189.000) Long term deposits .303.972.991) Net cash used in investing activities (7.199) Staff retirement benefits paid (64.215.393.994.947.195. plant and equipment 312.232.848) (678.205.277.354.895 Cash and cash equivalents at the end of the year 28 The annexed notes 1 to 50 form an integral part of these financial statements.129.599.771.480 Proceeds from issuance of term finance certificates 166.035.760 86.384.000 Investment property – (7.215.280) (434.151.911 (1.000.323) Redemption of term finance certificates (474.805.895 11.480) Net cash generated from / (used in) financing activities 3.420.354.042.000.614.253.net (97.244 (1.746.397 (2.881.net 2.728.680.444.806.736.042.135 Cash and cash equivalents at the beginning of the year 41.047) Advances to related parties .213.698 Income tax paid (237.036.601.738) (380.000.957) (237.649 2.451.495.888. 03 January 2015 Lahore 34 | JDW Sugar Mills Limited Director Director .

705.150.213.766.576. - - Total comprehensive income for the year 4.659.561 5.895 (478.553.659.213.576.522.576. 2.891.129.747 (9.322) 5.928 – – - 597.966) 4.833.895 (478.522.213.415 924.820 – (358.610 Profit for the year ended 30 September 2014 Other comprehensive loss for the year ended 30 September 2014.00 per share – – – – – – – 678.net of tax 597.659.923.287.522.766.148) 979.280.00 per share Interim dividend paid for the period ended 30 June 2014 @ Rs.747 (9.316.953 924.966) (119.00 per share Total comprehensive income for the year Transaction with owners of the Company: Balance as at 30 September 2012 Share capital Statement of Changes in Equity For the year ended 30 September 2014 Annual Report 2014 | 35 .820 924.820 – (358.522.553.705. 6.928 Profit for the year ended 30 September 2013 Other comprehensive income for the year ended 30 September 2013.322) 4. 6.747 (9.129.212.net of tax Balance as at 30 September 2014 Lahore 03 January 2015 The annexed notes 1 to 50 form an integral part of these financial statements.705.820 924.383.054.513.412 970.325.659.916.646.659.288) (358.820 – (358.820 924.288) (358.522.553.- 678.970.196.322) 4.981.705.928 - 597.610 Balance as at 30 September 2013 678.129.316.874 970.489 5.099 Director Director – – - – – Final dividend for the year ended 2013 @ Rs.802 970.966) (119.148) 979.343 924.288) (358.895 (478.966) 4.966) (119.148) 979.966) 3.610 Rupees Rupees Rupees Rupees Rupees – Transactions with owners of the Company: Reserves Capital Revenue Share Accumulated premium profit Total reserves Total equity Final dividend for the year ended 2012 @ Rs.766.659.488.522.316.

1984 and was subsequently converted into a public limited Company on 24 August 1991.3 The Company has acquired Corporate Sugar Cane Farms business of JK Farming Systems Limited (“a related party”) (“JKFS”) on 20 November 2013.572. Fair values. electricity and managing corporate farms. Lahore.942.60 MW power plant at Unit-II achieved Commercial Operations Date (“COD”) on 12 June 2014 while the 26.345.941.374 3.443.000. accrued and other liabilities Net assets transferred 4.358. The registered office of the Company is situated at 17 .408 Intangible asset 1.090 4. Sindh. of the assets and liabilities transferred to the Company are as follows: Fair value as at 20 Nov 2013 Rupees Non-current assets Property.433 20.584.000 126. District Ghotki.090 Purchase consideration (225.474. until payment of full purchase consideration. plant and equipment Operating fixed assets Capital work in progress 1. Lahore Cantonment.777) – The purchase consideration is to be paid in one or more instalments.1 1. Further.941.239. 36 | JDW Sugar Mills Limited . The Company shall pay mark up at the rate of average borrowing cost of the Company on the outstanding amount of purchase consideration from 20th November 2013.2 JDW Sugar Mills Limited (“the Company”) was incorporated in Pakistan on 31 May 1990 as a private limited Company under the Companies Ordinance.867 Current liabilities Trade creditors. spares and loose tools Biological assets Advances.712 Stores.216.155 Total assets 4.785. the Company’s Co-Generation Power Plants are the first to materialize under National Electric Power Regulatory Authority’s (“NEPRA”) upfront bagasse tariff. The Company has executed Energy Purchase Agreements (“EPA”) on 20 March 2014 with the Central Power Purchasing Agency (“CPPA”) of the National Transmission & Despatch Company Limited (“NTDC”) relating to its Bagasse Based Co-Generation Power Plants (“Co-Generation Power”) at JDW Unit-II.726.358. Shares of the Company are listed on the Karachi and Lahore Stock Exchanges.025 2. Sadiqabad.83 MW power plant at Unit-III achieved COD on 03 October 2014 after completing all independent testing and certification requirements and supplying renewable electricity to the national grid. Punjab and JDW Unit-III. District Rahim Yar Khan. duly determined by independent valuer and management.283.397. prepayments and other receivables 276. 1. The principal activity of the Company is production and sale of crystalline sugar.Abid Majeed Road.279 Current assets 1.219.046.870. deposits. The assets and liabilities have been transferred to the Company at fair values to comply with the requirements of Business Combinations “(IFRS-3)”.781 2.412.Notes to the Financial Statements For the year ended 30 September 2014 1 STATUS AND NATURE OF BUSINESS 1. The 26.

2 Statement of compliance 2. being considered immaterial. Basis of measurement These financial statements have been prepared under the historical cost convention except for biological assets which are measured at fair value less estimated point of sale costs and recognition of certain employee retirement benefits at present value. immediately in the period in which they occur. the Company determines the net interest expense / (income) for the period on the net defined benefit liability / (asset) by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability / (asset) at the beginning of the annual period. Approved accounting standards comprise of such International Financial Reporting Standards (“IFRSs”) issued by the International Accounting Standards Board as notified under the Companies Ordinance. The change in accounting policy has been applied prospectively.98% Pakistan Pakistan 48. The estimates and associated assumptions and judgments are based on historical experience and various other factors that are believed to be reasonable under the circumstances.1 Separate financial statements These financial statements are the separate financial statements of the Company in which investments in subsidiary and associates are accounted for on the basis of direct equity interest rather than on the basis of reported results and net assets of the investees.Faruki Pulp Mills Limited . In case requirements differ. The Company has following investments: Name of company Subsidiary . Annual Report 2014 | 37 . the provisions of or directives of the Companies Ordinance. estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities. taking into account any changes in the net defined benefit liability / (asset) during the period as a result of contributions and benefit payments. All changes in the present value of defined benefit obligation are now recognized in the statement of comprehensive income and the past service costs are recognized in the profit and loss account. Consolidated financial statements of the Company are prepared separately. the result of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. all transactions have been accounted for on accrual basis. All financial information presented in Pakistani Rupees has been rounded to the nearest rupee. provisions of and directives issued under the Companies Ordinance. USE OF ESTIMATES AND JUDGMENTS The preparation of financial statements in conformity with approved accounting standards requires management to make judgments. 1984.5 3 Country of incorporation Shareholding Pakistan 99. Under IAS 19 (2011). the Company has changed its accounting policy with respect to the basis for determining the income or expense related to its postemployment defined benefit plans. Actual results may differ from these estimates.37% These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of Companies Ordinance. 1984 shall prevail.JDW Power (Private) Limited 2.Deharki Sugar Mills (Private) Limited Associates .39% 47.3 2. except for the amounts reflected in the cash flow statement. In these financial statements.Notes to the Financial Statements For the year ended 30 September 2014 2 BASIS OF PREPARATION 2. Functional and presentation currency These financial statements are presented in Pakistani Rupees which is also the Company’s functional currency. 1984. 1984. Change in accounting policy As a result of amendment to IAS 19 Employee Benefits (amended 2011).4 2. income and expenses.

111. Amendment to IAS 36 “Impairment of Assets” Recoverable Amount Disclosures for Non-Financial Assets (effective for annual periods beginning on or after 1 January 2014).424 46. The following standards.424) (46. Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) – (effective for annual periods beginning on or after 1 January 2014). The interpretation is not likely to have an impact on Company’s financial statements. The amendments clarify the meaning of ‘currently has a legally enforceable right of set-off’.041 64. Amendments to IAS 39 “Financial Instruments: Recognition and Measurement” Continuing hedge accounting after derivative novation (effective for annual periods beginning on or after 1 January 2014).029. 38 | JDW Sugar Mills Limited .377) 56. The amendments are not likely to have an impact on Company’s financial statements. The change in accounting estimate has been recognized prospectively in the financial statements in accordance with the requirement of IAS 8 “Accounting Policy.067. These narrow-scope amendments to IAS 36 Impairment of Assets address the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal.884. Change in Accounting Estimate and Errors.111. However. amendments and interpretations of approved accounting standards will be effective for accounting periods beginning on or after 01 July 2014: IFRIC 21. not disclosed in these financial statements. The areas where various assumptions and estimates are significant to Company’s financial statements or where judgments were exercised in application of accounting policies are as follows: - - - - - Retirement and other benefits Provision for taxation Residual values and useful lives of depreciable assets Provisions and contingencies Biological assets 3.” Change in estimate has no impact on current year depreciation expense and profit and loss respectively. therefore. Revision to accounting estimates are recognized in the period in which the estimate is revised if the revision effects only that period. interpretations and amendments thereto There were certain new standards and amendments to the approved accounting standards which became effective during the year but are considered not to be relevant or have any significant effect on the Company’s operations except as disclosed in note 2.Notes to the Financial Statements For the year ended 30 September 2014 The estimates and underlying assumptions are reviewed on an ongoing basis.041) (64.280.987 34.Levies ‘an Interpretation on the accounting for levies imposed by governments’ (effective for annual periods beginning on or after 1 January 2014). and that some gross settlement systems may be considered equivalent to net settlement.4 and are. or in the period of revision and future periods if the revision affects both current and future periods.067.845 (56. The amendments address inconsistencies in current practice when applying the offsetting criteria in IAS 32 Financial Instruments: Presentation.845) New and revised approved accounting standards.1 Change in estimate Effectively from 20 November 2013.029. The Interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy.884. future outcome as a result of change in estimate is given below: Increase in depreciation (Decrease) in net profit 4 SIGNIFICANT ACCOUNTING POLICIES 4.280.1 - - - - 2015 2016 2017 2018 2019 (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) 18.377 (18. the Company has changed its depreciation method from reducing balance method to straight-line method on certain agri related assets to bring it in line with method used for charging deprecation on the assets of Corporate Sugar Cane Farms.987) (34.

a company can elect to measure bearer plants at cost. IAS 40 ‘Investment Property’. The amendments are relevant only to defined benefit plans that involve contributions from employees or third parties meeting certain criteria. either directly or through a group entity. or when the intangible asset is expressed as a measure of revenue. Further IFRS 3 has also been amended to clarify that the standard does not apply to the accounting for the formation of all types of joint arrangements including joint operations in the financial statements of the joint arrangement themselves. The practical expedient addresses an issue that arose when amendments were made in 2011 to the previous pension accounting requirements. These amendments clarify the classification and measurement of contingent consideration in a business combination. the produce growing on bearer plants will continue to be measured at fair value less costs to sell under IAS 41 Agriculture. bearer plants are accounted for in the same way as selfconstructed items of property. The new cycle of improvements contain amendments to the following standards: IFRS 2 ‘Share-based Payment’. is expected to bear produce for more than one period. Therefore. and has a remote likelihood of being sold as agricultural produce. recognizing that the restatement of accumulated depreciation (amortization) is not always proportionate to the change in the gross carrying amount of the asset. This change aligns the disclosure requirements with those for segment liabilities. Agriculture: Bearer Plants [Amendment to IAS 16 and IAS 41] (effective for annual periods beginning on or after 1 January 2016). Annual Report 2014 | 39 . plant and equipment during construction. IAS 40 has been amended to clarify that an entity should: assess whether an acquired property is an investment property under IAS 40 and perform a separate assessment under IFRS 3 to determine whether the acquisition of the investment property constitutes a business combination. plant and equipment. Plant and Equipment for measurement and disclosure purposes. Annual Improvements 2010-2012 and 2011-2013 cycles (most amendments will apply prospectively for annual period beginning on or after 1 July 2014). IFRS 8 ‘Operating Segments’ has been amended to explicitly require the disclosure of judgments made by management in applying the aggregation criteria. The amendments introduce a relief that will reduce the complexity and burden of accounting for certain contributions from employees or third parties. IAS 24 ‘Related Party Disclosure’. The definition of related party is extended to include a management entity that provides key management personnel services to the reporting entity. The amendments are not likely to have an impact on Company’s financial statements. Bearer plants are now in the scope of IAS 16 Property. The rebuttable presumption that the use of revenuebased amortization methods for intangible assets is inappropriate can be overcome only when revenue and the consumption of the economic benefits of the intangible asset are ‘highly correlated’. IFRS 3 ‘Business Combinations’. A bearer plant is a plant that: is used in the supply of agricultural produce. Before maturity. Plant and Equipment (effective for annual periods beginning on or after 1 January 2016) introduce severe restrictions on the use of revenue-based amortization for intangible assets and explicitly state that revenue-based methods of depreciation cannot be used for property. plant and equipment’ and IAS 38 ‘Intangible Assets’. Amendments to IAS 16 ‘Property. In addition this amendment clarifies that a reconciliation of the total of the reportable segment’s assets to the entity assets is required only if this information is regularly provided to the entity’s chief operating decision maker. However. The amendment also clarifies both: how to distinguish between a market condition and a non-market performance condition and the basis on which a performance condition can be differentiated from a vesting condition. IFRS 2 has been amended to clarify the definition of ‘vesting condition’ by separately defining ‘performance condition’ and ‘service condition’.Notes to the Financial Statements For the year ended 30 September 2014 The amendments add a limited exception to IAS 39. to provide relief from discontinuing an existing hedging relationship when a novation that was not contemplated in the original hedging documentation meets specific criteria. - - - - - - - - - Amendments to IAS 19 “Employee Benefits” Employee contributions – a practical approach (effective for annual periods beginning on or after 1 July 2014). The amendments clarify the requirements of the revaluation model in IAS 16 and IAS 38. Amendments to IAS 38 Intangible Assets and IAS 16 Property.

or disposal groups. All other repair and maintenance costs are charged to income during the period in which they are incurred. Freehold land and capital work in progress are stated at cost less any identified impairment loss. Depreciation methods. finance leases are capitalized at the lower of present value of minimum lease payments under the lease agreements and the fair value of the assets. Where an impairment loss is recognized.2 Property. Each lease payment is allocated between the liability and finance costs so as to achieve a constant rate on the balance outstanding. residual values and useful lives of assets are reviewed at each financial year end. net of finance costs.1. plant and equipment may be impaired. plant and equipment. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.3 Leases where the Company has substantially all the risks and rewards of ownership are classified as finance leases. are generally measured at lower of their carrying amount and fair value less costs to sell. Leased 4. except that no loss is allocated to inventories.1 except that straight-line method is used for Corporate Sugar Cane Farms related assets. while no depreciation is charged on the date of disposal. Depreciation is charged to profit and loss account on reducing balance method so as to write off the written down value of assets over their estimated useful lives at rates disclosed in note 17. are classified as held for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset. Assets held for sale Non-current assets. The interest element of the rental is charged to profit over the lease term. less accumulated depreciation and impairment loss. only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. the depreciation charge is adjusted in the future periods to allocate the asset’s revised carrying amount over its estimated useful life. the carrying amounts of such assets are reviewed to assess whether they are recorded in excess of their recoverable amount. or disposal groups comprising assets and liabilities.Notes to the Financial Statements For the year ended 30 September 2014 4. Depreciation of leased assets is charged to profit and loss account. Cost includes direct cost and related overheads. The Company assesses at each balance sheet date whether there is any indication that property. and then to remaining assets and liabilities on a pro rata basis. If such indication exists. At inception. Any impairment loss on a disposal group is allocated first to goodwill. The related rental obligations. as appropriate. Assets acquired under a finance lease are depreciated over the estimated useful life of the assets on reducing balance method at the rates disclosed in note 17. Depreciation methods. 40 | JDW Sugar Mills Limited . if any. 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 recognized as an income or expense. Depreciation on additions is charged from the date when the asset is available for use. plant and equipment Owned Property. Where carrying values exceed the respective recoverable amount. Major repairs and improvements are capitalized. except freehold land are stated at cost less accumulated depreciation and any identified impairment loss. and adjusted if impact on depreciation is significant. are included in liabilities against assets subject to finance lease as referred to in note 9. The liabilities are classified as current and non-current depending upon the timing of the payment. residual values and useful lives of the assets are reviewed at each financial year end. Such assets. and adjusted if impact on depreciation is significant. assets are written down to their recoverable amounts and the resulting impairment loss is recognized in income currently.

7 4. which continue to be measured in accordance with the Company’s other accounting policies. employee benefit assets. Immature biological assets have not yet reached that stage. Equal monthly contribution is made both by the Company and employee to the fund at the rate of 10% of basic salary.5 financial assets.4 4. Those expected to mature before 12 months are included in current assets. Obsolete and used items are recorded at nil value. All other costs are charged to profit and loss account. Biological assets are categorized as mature or immature.2 Defined benefit plans The Company also operates an unfunded gratuity scheme for eligible employees who have completed their qualifying period. which is valued at cost comprising invoice value and related expenses incurred thereon up to the balance sheet date.8. Stores. and any equity-accounted investee is no longer equity accounted. Costs incurred on plantation and management of biological assets are capitalized as part of the asset. Mature biological assets are those that have attained harvestable specifications. which are valued at cost comprising invoice value and related expenses incurred thereon up to the balance sheet date. intangible assets and property. deferred tax assets.1 Defined contribution plan The Company operates approved contributory provident fund for its eligible employees. plant and equipment are no longer amortized or depreciated. Bad debts are written off when identified. Fair value is deemed to approximate the cost when little biological transformation has taken place or the impact of the transformation on price is not expected to be material. 4. Provision is made annually to cover obligations under the scheme on the basis of actuarial valuation and is charged to profit and loss account. investment property or biological assets. The fair value is determined using the present value of expected net cash-flow from the asset based on significant assumptions stated in note 18. Stock in trade These are valued at the lower of weighted average cost and net realizable value except for stock in transit. These assets are measured at fair value less estimated point of sale costs.8. Biological assets that are expected to mature after more than a period of 12 months are classified in long term assets. Trade debts Trade debts are carried at original invoice amount less an estimate made for doubtful debts based on a review of all outstanding amounts at the year end. with changes in the fair value during the period recognized in the profit and loss account. Annual Report 2014 | 41 . Once classified as held for sale. spares and loose tools These are valued at lower of weighted average cost and net realizable value except for items in transit.6 4.by products Net realizable value signifies the estimated selling price in the ordinary course of business less other costs necessary to be incurred to make the sale. Cost is determined as follows: Raw materials at weighted average cost Work-in-process and finished goods at lower of weighted average cost plus related manufacturing expenses and net realizable value net realizable value 4.8 Molasses and bagasse . Impairment losses on initial classification as held-for-sale or held-for-distribution and subsequent gains and losses on remeasurement are recognized in profit or loss. Biological assets Biological assets comprise of crop in field.4.Notes to the Financial Statements For the year ended 30 September 2014 4. Employee benefits 4.

rebates and exemptions. any excluding interest).8. Any changes in the liability are recognized in profit or loss. with a corresponding increase in equity. To calculate the present value of economic benefits. Calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. which comprise actuarial gains and losses. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met. The fair value of the amount payable to employees in respect of Share Appreciation Rights (“SARs”). 42 | JDW Sugar Mills Limited . The charge for current tax also includes adjustments. unused tax losses and tax credits can be utilized. such that the amount ultimately recognized is based on the number of awards that meet the related service and nonmarket performance conditions at the vesting date.50% 11. Net interest expense and other expenses related to defined benefit plan is recognized in profit and loss account. is recognized as an expense with a corresponding increase in liabilities. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). For share-based payment awards with non-vesting conditions. 4. if any. The charge for current tax is calculated using prevailing tax rates or tax rates expected to apply to the profit for the year if enacted after taking into account tax credits. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary differences. When the calculation results in a potential asset for the Company. Remeasurement of the net defined benefit liability. discounting that amount and deducting the fair value of any plan assets. Current Provision of current tax is based on the taxable income for the year determined in accordance with the prevailing law for taxation of income.3 Discount rate Expected increase in eligible pay Expected average working life of employee Withdrawal rates 2014 13. over the vesting period of the awards.Notes to the Financial Statements For the year ended 30 September 2014 The most recent valuation was carried out as at 30 September 2014 using the “Projected unit credit method”. the return on plan assets (excluding interest) and the effect of the asset ceiling (if. to provision for tax made in previous years arising from assessments framed during the year for such years. where considered necessary. which are settled in cash. consideration is given to any applicable minimum funding requirements. Following significant assumptions are used for valuation of the scheme: 4. Employees’ stock option scheme The grant-date fair value of equity-settled share-based payment awards granted to employees is generally recognized as an expense. over the period during which the employees become unconditionally entitled to payment. The liability is measured at each reporting date and at settlement date based on the fair value of the SARs.9 Taxation Income tax expense comprises current and deferred tax. are recognized immediately in Statement of Comprehensive Income (“OCI”). the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. Deferred Deferred tax is accounted for using the balance sheet liability method in respect of all temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of the taxable profit. taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contribution to the plan.50% 10 years Moderate 2013 13% 11% 10 years Moderate The Company’s net obligation in respect of defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods.

13. Assets in this category are classified as current assets. 4. 4. Revenue recognition Revenue from the sale of goods is measured at the fair value of the consideration received or receivable.1(b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Dividends on available-for-sale equity instruments are recognized in the profit and loss account when the Company’s right to receive payments is established. They are included in non-current assets unless management intends to dispose of the investments within twelve months from the balance sheet date. Annual Report 2014 | 43 . Management determines the classification of its financial assets at the time of initial recognition. 4.1(d) Held to maturity Held to maturity are financial assets with fixed or determinable payments and fixed maturity. Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer. 4. Deferred tax is charged or credited in the profit and loss account. 4. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Dividend income is recognized when the right of receipt is established.11 Cash and cash equivalents Cash and cash equivalents are carried at cost in the balance sheet. 4.10 Deferred tax is calculated at the rates are expected to apply to the period when the differences reverse based on tax rates that have been enacted or substantively enacted by the balance sheet date.1(c) Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. When securities classified as available-for-sale are sold or impaired. except in the case of items credited or charged to equity in which case it is included in equity.13.12 Provisions Provisions are recognized when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. available-for-sale and held to maturity. For the purpose of cash flow statement.1 Financial assets The Company classifies its financial assets in the following categories: at fair value through profit or loss.13 Financial instruments 4. the accumulated fair value adjustments recognized directly in equity are included in the profit and loss account as gains and losses from investment securities. Revenue from the sale of electricity is recognized on transmission of electricity. The classification depends on the purpose for which the financial assets were acquired.1(a) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets held for trading and financial assets designated upon initial recognition as at fair value through profit or loss.13. Interest and rental income are recognized on accrual basis. 4. where management has the intention and ability to hold till maturity are carried at amortized cost. Available-forsale financial assets are classified as short term investments in the balance sheet.Notes to the Financial Statements For the year ended 30 September 2014 4. loans and receivables. A financial asset is classified as held for trading if acquired principally for the purpose of selling in the short term.13.13. Interest on available-for-sale securities calculated using effective interest method is recognized in the profit and loss account. cash and cash equivalents comprise of cash in hand and bank balances.

4. Financial liabilities in this category are presented as current liabilities except for maturities greater than twelve months from the reporting date where these are presented as non-current liabilities. An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount. 44 | JDW Sugar Mills Limited . The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or group of financial assets is impaired. net of amortization.e. Individually significant financial assets are tested for impairment on an individual basis.2 Financial liabilities Non-derivative financial liabilities that are not financial liabilities at fair value through profit or loss are classified as financial liabilities at amortized cost. Financial assets are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit and loss. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of the asset.14 Impairment Financial assets A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired.13. If any such indication exists. If the market for a financial asset is not active (for unlisted securities). Impairment loss in respect of a financial asset measured at fair value is determined by reference to that fair value.3 Recognition and derecognition All the financial assets and financial liabilities are recognized at the time when the Company becomes party to the contractual provisions of the instrument. when the obligation specified in the contract is discharged. In assessing value in use.Notes to the Financial Statements For the year ended 30 September 2014 All financial assets are recognized at the time when the Company becomes a party to the contractual provisions of the instrument. 4. and the present value of the estimated future cash flows discounted at the original effective interest rate. the estimated future cash flows are discounted to their present values using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash generating unit. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. Any gain or loss on derecognition of the financial assets and financial liabilities is taken to profit and loss account. if any. Financial assets carried at fair value through profit and loss are initially recognized at fair value and transaction costs are expensed in the profit and loss account. the Company measures the investments at cost less impairment in value. Regular purchases and sales of investments are recognized at trade date i. 4.13.e. the date on which the Company commits to purchase or sell the asset. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. cancelled or expires. The fair values of quoted investments are based on current prices. All impairment losses are recognized in profit or loss. The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less cost to sell. Financial assets are derecognized when the Company looses control of the contractual rights that comprise the financial assets. other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. if no impairment loss had been recognized. ‘Loans and receivables’ and ‘held to maturity’ investments are carried at amortized cost using effective interest rate method. Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. Non-financial assets The carrying amount of the Company’s non-financial assets. An impairment loss is reversed only to the extent that the financial asset’s carrying amount after the reversal does not exceed the carrying amount that would have been determined. then the asset’s recoverable amount is estimated. The particular measurement methods adopted are disclosed in the individual policy statements associated with each instrument. Financial liabilities are derecognized when they are extinguished i. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. The Company is required to issue consolidated financial statements along with its separate financial statements. equity instruments issued and the liabilities incurred or assumed at the date of acquisition. Impairment losses are recognized as an expense. All other borrowing costs are taken to the profit and loss account currently. 4. as per the requirements of IAS-27 “Separate Financial Statements”. Investments in equity instruments of associated companies Associates are all entities over which the Company has significant influence but no control.Notes to the Financial Statements For the year ended 30 September 2014 4.15 An impairment loss is recognized if the carrying amount of the assets or its cash generating unit exceeds its estimated recoverable amount. 4. Transactions in foreign currencies are translated into rupees at the spot rate. Acquisition-related costs are expensed as incurred. if no impairment loss had been recognized. in accordance with the requirements of IAS 27 ‘Separate Financial Statements’. Investments in associated undertakings. are being accounted for using the equity method. Impairment losses are recognized in profit or loss.19 Foreign currency transactions All monetary assets and liabilities in foreign currencies are translated into rupees at exchange rates prevailing at the balance sheet date.20 Investments Investment in equity instruments of subsidiary company Investment in subsidiary company is measured at cost in the Company’s separate financial statements. net of depreciation and amortization. 4.18 Financial assets and financial liabilities are set off and the net amount is reported in the financial statements when there is a legally enforceable right to set off the recognized amount and the Company intends either to settle on net basis. in the consolidated financial statements. If this is less than the fair value of the net assets acquired in the case of a bargain purchase. at subsequent reporting dates. Exchange differences are included in the profit and loss account. Impairment losses recognized in respect of cash generating units are allocated to reduce the carrying amounts of the assets in a unit on a pro rata basis. Borrowing cost Borrowing costs incurred on finances obtained for the construction of qualifying assets are capitalized up to the date the respective assets are available for the intended use. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. if any. An impairment loss is reversed only to that extent that the asset’s carrying amount after the reversal does not exceed the carrying amount that would have been determined. Annual Report 2014 | 45 . Trade and other payables 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. If any such indication exists the carrying amount of the investment is adjusted to the extent of impairment loss. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Business combination Business combinations are accounted for by applying the acquisition method. the Company reviews the carrying amount of the investment and its recoverability to determine whether there is an indication that such investment has suffered an impairment loss. All non-monetary items are translated into rupees at exchange rates prevailing on the date of transactions or on the date when fair values are determined. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists.17 4. However. The cost of acquisition is measured as the fair value of assets given. or to realize the assets and to settle the liabilities simultaneously. Investments in associates are measured at cost less any identified impairment loss if any in the Company’s separate financial statements. the difference is recognized directly in the profit and loss account.16 Offsetting 4. The excess of the consideration transferred over the fair value of the identifiable net assets acquired is recorded as goodwill.

subject to approval of the Board of Directors. 4. The estimated useful life and amortization method is reviewed at the end of each annual reporting period. Amortization on additions to intangible assets is charged from the date when an asset is put to use and on disposal up to the date of disposal. Management determines the appropriate classification of its investments at the time of the purchase and re-evaluates such designation on a regular basis. Where carrying value exceeds the respective recoverable amount. use in production or supply of goods or services as for administrative purpose. 4. unless fair value cannot be reliably measured. if any.21 4. being the fair value of consideration given. but not for sale in ordinary course of business.1 Goodwill Goodwill represents the excess of the cost of acquisition over the fair value of the net identifiable assets of the merged subsidiaries at the dates of acquisition.24 Dividend Dividend distribution to shareholders is recognized as a liability in the period in which the dividends are approved. The recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use. Investment Property Investment Property is property held either to earn rental income or for capital appreciation or for both. 4. Unrealized gains and losses arising from the changes in the fair value are directly recognized in equity in the period in which they arise. these investments are re-measured at fair value. assets are written down to their recoverable amounts and the resulting impairment loss is recognized in the profit and loss account for the year. Related party transactions The Company enters into transactions with related parties on an arm’s length basis except in extremely rare circumstances where. 46 | JDW Sugar Mills Limited . At subsequent reporting dates. 4. all other investments are classified as noncurrent assets.23.2 Computer software Expenditure incurred to acquire computer software is capitalized as intangible asset and stated at cost less accumulated amortization and any identified impairment loss. The gain or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and the carrying amounts of the asset is recognized as an income or expense.Notes to the Financial Statements For the year ended 30 September 2014 Available for sale Investments classified as available for sale are initially measured at cost.23 Intangibles 4. it is in the interest of the Company to do so. The Company’s investment property comprises of land which is carried at cost less identified impairment loss. with effect of any changes in estimate being accounted for on a prospective basis. The Company assesses at each balance sheet date whether there is any indication that investment property may be impaired. Cumulative gains and losses arising from changes in fair value are included in net profit or loss for the period in which an investment is derecognized. the carrying amount of such assets are reviewed to assess whether they are recorded in excess of their recoverable amount. Goodwill recognized is tested annually for impairment and carried at cost less accumulated impairment losses. If such indication exists. Intangible assets are amortized using straight-line method over its useful period.22 Investments intended to be held for less than twelve months from the balance sheet date or to be sold to raise operating capital. are included in current assets.23.

666.000) voting ordinary shares of Rs.666 – – 333.630.000 1.II”) have been issued by way of private placements with a consortium of institutional investors to finance Balancing.309. unless otherwise determined by the Compensation Committee.360 276. 2014 2013 Rupees Rupees 6 SHARE CAPITAL 6.457.000 32.610 Note 7 REDEEMABLE CAPITAL . at any time.244) 305. will be the lesser of 30% of the average of market price of shares quoted on Karachi Stock Exchange. 10 each fully paid in cash 27. 10 each fully paid 321.II is payable quarterly at a rate of three months KIBOR plus 250 bps per annum.000.726 (111.250 276.II (“PPTFC .000 each.482 Current maturity presented under current liabilities 7. subscribed and paid up capital 750.145.II These Privately Placed Term Finance Certificates .000.000.II holders.610 597.145.000 250. The total issue comprises of 10 TFC’s having face value of Rs.457.222.000.000.000) preference shares of Rs.II Privately Placed Term Finance Certificates Privately Placed Sukkuk Certificates 2013 Rupees 416. during 3 months prior to the date of grant of option and 3 months prior to date of exercise of option.888 416. Under the Scheme the Compensation Committee of the Company shall recommend to the Board as to which of the eligible employees are entitled to grant of option to subscribe for shares at an option price.2 7. Trustee In order to protect the interests of PPTFC .000.354. 1984 read with Public Companies’ Employee Stock Option Scheme Rules.666.222.II is structured to be in 18 equal quarterly instalments commencing after a grace period of six months starting from December 2013 and ending in March 2018.000 250.236 88.000.725) voting ordinary shares of Rs.936 (2013: 27.000 1. Modernization and Replacement (“BMR”) of plant and machinery of the Company.936) voting bonus shares of Rs.1 7.309. exceed 1% of the paid up capital of the Company. 10 each 25.SECURED Privately Placed Term Finance Certificates .000. 2001.000 (2013: 75.000.000.360 597.1 Privately Placed Term Finance Certificates . Principal redemption The principal redemption of PPTFC .766. The aggregate number of the shares for all options granted or to be granted under the Scheme to all eligible employees shall not.243. The Company has neither awarded any option to its eligible employees during the year nor any option is outstanding as at the balance sheet date. subject to expiry of relevant minimum vesting period.766. Annual Report 2014 | 47 .000.602 302.000 (2013: 25.1 Authorized capital 75.111.465. JS Bank Limited has been appointed as trustee under a trust deed dated 27 June 2013. Option price.888.630. The Option shall be exercised during the applicable option period.000.Notes to the Financial Statements For the year ended 30 September 2014 5 EMPLOYEES’ STOCK OPTION The Company operates a stock option scheme “the Scheme” approved by Securities and Exchange Commission of Pakistan “SECP” dated 16 July 2010.000 750. 50.555.3 2014 Rupees 13 7.666 724.000.111) (502.2 Issued. 10 each 6. under section 86 of the Companies Ordinance.725 (2013: 32.250 321. Rate of return The return on PPTFC .555 222.

11 8. Note 8 LONG TERM LOANS . Principal repayment The loan is repayable in 20 unequal quarterly instalments after a grace period of eighteen months starting from March 2013 and ending in December 2017.6 249.888.680 1.000 2. all present and future fixed assets.000 8.000.12 8.292.2 7. plant and machinery of the Company and its subsidiary Deharki Sugar Mills (Private) Limited and personal guarantees of Directors.2 8.567. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 250 bps per annum.637.7 8. Faysal Bank Limited.280 4.1 8.999.000.II Pak Oman Investment Company Limited Silk Bank Limited The Bank of Punjab Dubai Islamic Bank Pakistan Limited Askari Bank Limited Faysal Bank Limited The Bank of Punjab 2014 Rupees 2013 Rupees 8.000 622.517.000. all present and future fixed assets.190.000 168.750.4 8.413. 7.000 700.000.916.000 500.Led Syndicated Loan Faysal Bank Limited Pak Brunei Investment Company Limited Saudi Pak Industrial & Agricultural Investment Company Limited . plant and machinery of the Company and its subsidiary Deharki Sugar Mills (Private) Limited and personal guarantees of Directors.262 kanals.666 4.I Saudi Pak Industrial & Agricultural Investment Company Limited .Led Syndicated Loan MCB Bank Limited .000. The Company obtained this loan to finance its subsidiary.3 Privately Placed Term Finance Certificates These Privately Placed Term Finance Certificates (“PPTFCs”) have been redeemed during the year.10 8.542.618. The effective markup rate charged during the year on the outstanding balance is three months KIBOR plus 125 bps per annum.8 8.057.169. Soneri Bank Limited and Meezan Bank Limited. Security This loan is secured by joint pari passu charge on land measuring 4.999. 48 | JDW Sugar Mills Limited .177.051.000.Led Syndicated Loan This syndicated loan has been obtained from a consortium of banking companies comprising of United Bank Limited.14 188.952 (1.1 United Bank Limited .262 kanals.286) 5.000.Led Syndicated Loan Habib Bank Limited .13 8.000 450.985.667 299.000. Pakistan Kuwait Investment Company (Private) Limited. Deharki Sugar Mills (Private) Limited.423.000.402) 8.000 8.749 8. Privately Placed Sukkuk Certificates These Privately Placed Sukkuk Certificates (“PPSCs”) have been redeemed during the year. The effective markup rate charged during the year on the outstanding balance is three months KIBOR plus 125 bps per annum.480 532.9 8.860.151 (884. subsequent to the year end this loan facility has been transferred from the Company to its subsidiary on approval received from United Bank Limited (Agent Bank) dated 30 October 2014 .888 500.975.563.450 277.Notes to the Financial Statements For the year ended 30 September 2014 Security This loan is secured by joint pari passu on land measuring 4.013.000 300.680 – – – – – – – – Current maturity presented under current liabilities 13 10.999 300.605.553. The Bank of Punjab.5 1.SECURED United Bank Limited .988 450. However.000 48.3 8.991 500.999.

Security 8. plant and machinery of the Company and its subsidiary Deharki Sugar Mills (Private) Limited and personal guarantees of Directors. all present and future fixed assets. MCB Bank Limited. This loan was obtained to setup Unit-III of the Company. United Bank Limited. Faysal Bank Limited This loan has been obtained from Faysal Bank Limited for reprofiling of balance sheet of the Company. Principal repayment This loan is repayable in 22 unequal quarterly instalments after a grace period of eighteen months starting from June 2010 and ending in September 2015.5 This loan is secured by joint pari passu charge on land measuring 4. plant and machinery of the Company and its subsidiary Deharki Sugar Mills (Private) Limited and personal guarantees of Directors. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 200 bps per annum. JS Bank Limited and Meezan Bank Limited. Annual Report 2014 | 49 . Askari Bank Limited. all present and future fixed assets. Security 8.2 MCB Bank Limited . The Company obtained this loan to finance the Bagasse-Based Co-Generation Power Project. Habib Metropolitan Bank Limited. Pak Brunei Investment Company Limited This loan was obtained to finance the capital expenditure of the Company for setting up the sugar mill under the name of Deharki Sugar Mills (Private) Limited. The Bank of Punjab.262 kanals. Principal repayment Rate of return The interest is payable quarterly at a rate of six months KIBOR plus 250 bps per annum. Principal repayment The loan is repayable in 22 unequal quarterly instalments after a grace period of eighteen months starting from April 2015 and ending in July 2020. Security 8.4 This loan is secured by joint pari passu charge on land measuring 4. The loan is repayable in 10 unequal semi-annual instalments starting from December 2013 and ending in June 2018. Habib Bank Limited . all present and future fixed assets.262 kanals.262 kanals. Faysal Bank Limited.Led Syndicated Loan This syndicated loan has been obtained from a consortium of banking companies comprises of Habib Bank Limited. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 225 bps per annum.Led Syndicated Loan This syndicated loan has been obtained from a consortium of banking companies comprises of MCB Bank Limited. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 275 bps per annum. plant and machinery of the Company and its subsidiary Deharki Sugar Mills (Private) Limited and personal guarantees of Directors.Notes to the Financial Statements For the year ended 30 September 2014 8.3 This loan is secured by joint pari passu charge on land measuring 4. JS Bank Limited and Pakistan Kuwait Investment Company (Private) Limited. Principal repayment This loan is repayable in 20 unequal quarterly instalments starting from February 2013 and ending in November 2017. Allied Bank Limited.

plant and machinery of the Company and its subsidiary Deharki Sugar Mills (Private) Limited and personal guarantees of Directors. 8.262 kanals. all present and future fixed assets. all present and future fixed assets. Pak Oman Investment Company Limited This loan has been obtained during the year to finance BMR of plant and machinery at Unit II of the Company. This loan is secured by joint pari passu charge on land measuring 4. Security 8.262 kanals.8 This loan is secured by joint pari passu charge on land measuring 4.6 This loan is secured by joint pari passu charge on land measuring 4.Notes to the Financial Statements For the year ended 30 September 2014 Security 8. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 250 bps per annum. Principal repayment The loan is repayable in 18 equal quarterly instalments after a grace period of six months starting from September 2014 and ending in December 2018.II This loan has been obtained from Saudi Pak Industrial & Agricultural Investment Company Limited for reprofiling of balance sheet of the Company. all present and future fixed assets.9 Security Silk Bank Limited This loan has been obtained during the year to finance BMR of plant and machinery at Unit II of the Company.262 kanals. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 250 bps per annum. plant and machinery of the Company and its subsidiary Deharki Sugar Mills (Private) Limited and personal guarantees of Directors. However. Principal repayment This loan is repayable in 16 equal quarterly instalments after a grace period of twelve months starting from September 2015 and ending in June 2019. 8. subsequent to the year end ranking charge has been converted into joint pari passu charge.309 kanals. Principal repayment The loan is repayable in 18 equal quarterly instalments after a grace period of six months starting from March 2014 and ending in June 2018.I This loan has been obtained from Saudi Pak Industrial & Agricultural Investment Company Limited for reprofiling of balance sheet of the Company. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 250 bps per annum. 50 | JDW Sugar Mills Limited . This loan is secured by ranking charge on land measuring 3. Rate of return The interest is payable quarterly at a rate of six months KIBOR plus 250 bps per annum. Principal repayment This loan is repayable in 20 equal quarterly instalments after a grace period of twelve months starting from August 2015 and ending in May 2020. Saudi Pak Industrial & Agricultural Investment Company Limited . plant and machinery of the Company and its subsidiary Deharki Sugar Mills (Private) Limited and personal guarantees of Directors.7 Security Saudi Pak Industrial & Agricultural Investment Company Limited . all present and future fixed assets. plant and machinery of the Company and personal guarantees of Directors.

12 This loan is secured by ranking charge on land measuring 3.11 Dubai Islamic Bank Pakistan Limited This loan has been obtained during the year to finance BMR of plant and machinery at Unit II of the Company. 8. Annual Report 2014 | 51 . However.262 kanals.13 This loan is secured by ranking charge on land measuring 3. plant and machinery of the Company and personal guarantees of Directors. However. Principal repayment This loan is repayable in 20 equal quarterly instalments after a grace period of twelve months starting from July 2015 and ending in April 2020. subsequent to the year end ranking charge has been converted into joint pari passu charge. Principal repayment This loan is repayable in 24 equal quarterly instalments starting from July 2014 and ending in April 2020. Security 8.309 kanals. Security Principal repayment This loan is repayable in 20 unequal quarterly instalments after a grace period of six months starting from May 2015 and ending in January 2020. plant and machinery of the Company and personal guarantees of Directors.10 The Bank of Punjab This loan has been obtained during the year to finance BMR of plant and machinery at Unit II of the Company. plant and machinery of the Company and its subsidiary Deharki Sugar Mills (Private) Limited and personal guarantees of Directors. subsequent to the year end ranking charge has been converted into joint pari passu charge.309 kanals. Askari Bank Limited This loan has been obtained during the year to finance BMR of plant and machinery at Unit II of the Company. However.Notes to the Financial Statements For the year ended 30 September 2014 Security This loan is secured by ranking charge on land measuring 3. all present and future fixed assets. Principal repayment This loan is repayable in 20 equal quarterly instalments after a grace period of twelve months starting from October 2015 and ending in July 2020. Rate of return The interest is payable quarterly at a rate of six months KIBOR plus 225 bps per annum. all present and future fixed assets. Faysal Bank Limited This loan has been obtained during the year to finance partial acquisition of assets of JK Farming Systems Limited. plant and machinery of the Company and personal guarantees of Directors. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 235 bps per annum. Security 8. subsequent to the year end ranking charge has been converted into joint pari passu charge. all present and future fixed assets. subsequent to the year end ranking charge has been converted into joint pari passu charge. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 225 bps per annum. However. all present and future fixed assets. 8.309 kanals. This loan is secured by ranking charge on land measuring 4.

494. all present and future fixed assets.292 2013 Finance Minimum cost for lease future Present payments periods value Rupees Rupees Rupees Not later than one year Later than one year and not later than five years 287. plant and machinery of the Company and its subsidiary Deharki Sugar Mills (Private) Limited and personal guarantees of Directors.781. 52 | JDW Sugar Mills Limited .881.520 339.262 kanals.716 1.824.189.721.523 94. 8. subsequent to the year end ranking charge has been converted into joint pari passu charge. plant and machinery of the Company and its subsidiary Deharki Sugar Mills (Private) Limited and personal guarantees of Directors.352.024.056 438. The Company has the option to purchase the assets upon completion of lease period and has the intention to exercise such option.076 763. Lease rentals are payable on quarterly / monthly basis and include finance cost ranging from three to six months KIBOR plus 200 to 300 bps per annum (2013: three to six months KIBOR plus 200 to 300 bps per annum) which has been used as the discounting factor.635. implements and vehicles.074 796. This loan is secured by ranking charge on land measuring 4.886 222. Security Principal repayment This loan is repayable in 20 equal quarterly instalments after grace a period of twelve months starting from October 2015 and ending in July 2020.576 925.137.623 The Company has entered into various lease agreements with financial institutions for plant and machinery. subsequent to the year end ranking charge has been converted into joint pari passu charge.233.790 128.768 476.699 229. However.375.132 37. However.881.529. This loan is secured by ranking charge on land measuring 4.136.257.Notes to the Financial Statements For the year ended 30 September 2014 Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 200 bps per annum.591.313. all present and future fixed assets.356.14 The Bank of Punjab This loan has been obtained during the year to finance acquisition of liabilities of JK Farming Systems Limited.594 1. Security 9 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE The amount of future minimum lease payments along with their present value and the periods during which they will fall due are: 2014 Minimum lease Note payments Finance cost for future Present periods value Rupees Rupees Rupees Not later than one year 13 Later than one year and not later than five years 433.359.391 57.096 94.824 668. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 250 bps per annum.262 kanals.

396) (303.573 Recognized in other comprehensive income: .employee retirement benefits .leased assets .620 8.705 6.858) (15.094.liabilities against assets subject to finance lease .039 Note 2014 Rupees 2013 Rupees 11 STAFF RETIREMENT BENEFITS .1 68. 2001 against normal tax charge in future years (14.216.666.039 1.266) (27. 2001 against normal tax charge in future years 1.732.157) (13.555.152) (233.277 299.186.864 – (2.753 (4.118.tax credits under section 113 of Income Tax Ordinance.693.131) 105.394) 1.801) (22.436.371 – 2.provisions for doubtful debts and obsolescence .379.other timing differences .061) 273.574.924.717) (3.524.485.976.other timing differences .256.accelerated tax depreciation on operating fixed assets .1.881.913 373.620 Annual Report 2014 | 53 .047) (24.950.612 5.256.208 1.035.368.112 (4.provisions for doubtful debts and obsolescence .adjustment of losses related to Co-Generation Power .adjustment of losses related to Co-Generation Power Deferred tax asset on deductible temporary differences arising in respect of: .662.957.281.tax loss for the year .607) 8.097.190 4.946.601.1 Movement in liability for defined benefit obligation Opening present value of defined benefit obligations Current service cost for the year Interest cost for the year Benefit paid during the year Actuarial (gain) / loss on present value of defined benefit obligation Closing present value of defined benefit obligations 61.665.144.835 10.080.310 273.845) (243.495) (29.accelerated tax depreciation on fixed assets .039 1.021.284 (367.2 68.801) (46.256.453.664) 50.liabilities against assets subject to finance lease .369.486 68.982.748 28.890.333.216.049 (3.927 204.863) 9.GRATUITY Present value of defined benefit obligations Unrecognized actuarial losses 11.772) 46.543.tax loss for the year .131) – (727.290.045.Notes to the Financial Statements For the year ended 30 September 2014 10 2014 Rupees 2013 Rupees DEFERRED TAXATION Deferred tax liability on taxable temporary differences arising in respect of: .946.201) Liability as at 30 September 11.016.446) – 1. 2001 Ordinance.699 44.194) 177.208 (13.496.694.712.712.436.732.592 (6.699 61.904.907.419 11.329.643.679.957.601.leased assets .1 11.employees’ retirement benefits (14.889) (27.620 (16.732.045) (243.866.tax credits under section 113 of Income Tax Ordinance.399 1.762.397.302.1 Movement in deferred tax balances is as follows: As at 01 October Recognized in profit and loss account: .employee retirement benefits .216.245) 1.931.392.440.207.1.713.307) (134.795 2.982.601.399 1.364 (73.699 – 61.669.

694.601.1 Charge to other comprehensive income Payments Liability as at 30 September 11.302.428.317 – Closing unrecognized actuarial losses 11.717) 68.1.928.281.397.1.286.352 (1.358) 11. 11. the impact on present value of the defined benefit obligation as at 30 September 2014 would have been as follows: Gratuity Impact on present value of defined benefit obligation Increase Decrease Rupees Rupees 11.753 – 5.827.486 2012 2011 2010 Rupees Rupees Rupees 46.777 2.1.1.907.580 10.282.190 4.458 13.065 44.073.1 Charge to profit and loss account for the year comprises: Current service cost Interest cost for the year Actuarial losses recognized 11.256.694.486) 430.1.625.699 44.186.620 (3.201) 3.927.607 – 13.281.890. had fluctuated by 100 bps with all other variables held constant.368.049 430.607) 8.810.625.594 (4.2 Change in present value of net staff gratuity – (16.419 8.016.556 Balance as at 01 October Charge to profit and loss account 11.Notes to the Financial Statements For the year ended 30 September 2014 Note 11. 15.940.666.961.317 14.032) (8.1.612 49.256.705 6.282.288.2.6 Movement in unrecognized actuarial losses Discount rate 100 bps movement (4.4 Expected expense for the next year The expected expense to the gratuity scheme for the year ending 30 September 2015 works out to Rs.1 2014 Rupees 2013 Rupees Movement in unrecognized actuarial losses Opening unrecognized actuarial losses Actuarial gain / (loss) arising during the year Actuarial losses recognized Charge to other comprehensive income (16.594 (8.580 Future salary increase 100 bps movement 4.397.5 Sensitivity analysis If the significant actuarial assumptions used to estimate the defined benefit obligation at the reporting date.419 14.3 Historical information comparison for five years Present value of defined obligations Experience adjustment (loss) / gain 2014 2013 Rupees Rupees 68.458.201) 44.883.699 61.827.2.1.458 10.907.1.524.15 million.953) 54 | JDW Sugar Mills Limited .556 – (3.474 (4.601 7.704) 4.772) 37.

180.126 4.934. JK Dairies (Private) Limited (“ JKDL”) and Agro Industrial Solutions respectively (related parties).226.1 Running finances 12.923 3.851 3.2 Accrued expenses Retention money Unclaimed dividend Tax deducted at source Payable to provident fund trust Federal excise duty and sales tax payable Advance against sale of investment 29 Workers’ welfare fund 14.286 339. The markup rates applicable during the year ranges from one to six months KIBOR plus 150 to 250 bps per annum (2013: one to six months KIBOR plus 150 to 250 bps per annum).2 Finance against trust receipts (FATR) 12.400 million (2013: Rs.830 million (2013: Rs.111 1.14 million (2013: Rs.09 million (2013: Rs.591.623 2.2 The Company has obtained running finance facilities aggregating to Rs.921.767 164.052.453 27.446 9.834.200 million).395 million (2013: Rs.839 100.504 1.400 22.626.860.946 6.487 27. 450 million).324 447. 600 million (2013: Rs.42 million).900.SECURED Banking and financial institutions Cash finances 12.097 19.177.340 413.576 502.877. 14.121.470 252.509 27. 700 million). These are secured against present and future current assets of the Company and personal guarantees of the Directors.494.048. These are secured against present and future current assets of the Company and personal guarantees of the Directors.456 51.713 698.050.312.467 3.402 229. 1. 12.906.967 2013 Rupees 1.975.702 12.484.458.076 184. 7.834.561 – – – 37.721 21.577. 3.1 2014 Rupees 2.1 The Company has obtained these facilities from various banks and financial institutions aggregating to Rs. 3.Notes to the Financial Statements For the year ended 30 September 2014 Note 12 SHORT TERM BORROWINGS . 12. 2. 50.265.067.056.197.750 million).000. It carries markup ranging from one to six months KIBOR plus 200 to 250 bps per annum (2013: one to six months KIBOR plus 200 to 250 bps per annum ).052. 13.789.3 Other payables 14. Nil) and Rs.605.358.824 4.564 9.42 million) due to JDW Aviation (Private) Limited.4 2014 Rupees 4.671.244 884.908.114. Rs.464.558 64.573.450.973 1.541 – 69. Annual Report 2014 | 55 .4 14.453.962.1 Payable on behalf of growers Payable to JKFS against purchase consideration Workers’ profit participation fund 14.074 17.269 Note 14 TRADE AND OTHER PAYABLES Advances from customers Trade and other creditors 14.644.975 1.4 13 CURRENT PORTION OF NON-CURRENT LIABILITIES Redeemable capital Long term finances Liabilities against assets subject to finance lease The Company has obtained Morabaha / Istisna finance facilities aggregating to Rs.3 The limit of this facility is Rs. The markup rates applicable during the year ranges from one to three months KIBOR plus 150 to 275 bps per annum (2013: one to six months KIBOR plus 150 to 250 bps per annum).677.464 422.000 18.616.192.427.579 2.303. The markup rates applicable during the year ranges from three to six months KIBOR plus 150 to 250 bps per annum (2013: three to six months KIBOR plus 150 to 250 bps per annum). Note 2014 2013 Rupees Rupees 7 8 9 111.704. These are secured against pledge of sugar and personal guarantees of the Directors.399.89 million (2013: Rs.276.039.156 This includes an amount of Rs.494.3 Morabaha finances 12.189.102. 10.809. It is secured against first charge over current assets of the Company. 3. 12.936.613 612.222.049 2013 Rupees 2.898.111.959.

63 million out of which the Company deposited Rs.399.131 498.12 million (2013: Rs.042.478) Balance as at 30 September 14.166 39. Rs.4 This includes an amount of Rs.536.558 4.814. 47.1.400 13. 16.679. a related party.232 69.509 – 329.494. However. 0.558 Balance as at 01 October Add: Allocation for the year 18.3 Workers’ Welfare Fund 51. 10.729) Balance as at 30 September – 18.509 14.399.2 The Company availed 50% exemption of excise duty in 1990 . An award had been announced by it in favor of the Company whereby instead of paying the aforementioned amount.727.3 The Punjab Industrial Development Board (“PIDB”) has claimed in respect of Pasrur Sugar Mills Limited (formerly subsidiary of United Sugar Mills Limited) an amount of Rs.818.509 (18.935 – 302.959.246 Less: paid during the year 134.78 million.321.831 4. The Company has challenged the same in Honourable Lahore High Court. Based on opinion from legal advisor.e.238 (329.399.612 (83. 6.1 A sales tax demand was raised by the tax department for the year 2002-2003 on grounds of various observations.2 2014 Rupees 2013 Rupees Workers’ Profit Participation Fund Balance as at 01 October Add: allocation for the year 35 Interest on funds utilized 36 69. 45 million during the year.018.959.821 12.399. Alternative dispute resolution committee unanimously decided the matter partially in favor of the Company and forwarded its recommendations to Federal Board of Revenue (“FBR”) for further necessary actions.082. management of the Company expects a favorable outcome in this case.21 million become recoverable from them.654 28.400 69.155.729.811.91 crushing season on account of excess production over last year by having completed full crushing season i.1 Contingencies 16. 2014 2013 Rupees Rupees 15 INTEREST AND MARKUP ACCRUED Interest and markup accrued on: Redeemable capital Long term loans Short term borrowings Purchase consideration related to JKFS 13. the Deputy Collector issued show cause notice.874.1.1.581.509) 18.120.399. According to the audit report of Excise Department the exemption was wrongly availed. A dispute arose at the time of settlement of the consideration of the mills between PIDB and USML and the matter was referred to an arbitrator.729 18.486 310.195.164 16 CONTINGENCIES AND COMMITMENTS 16.063 257.393 162.959.509 Less: adjusted during the year 18.306.1. 56 | JDW Sugar Mills Limited . 160 days. No provision has been made in financial statements for this as the management is confident that the case will be decided in its favor. Therefore.036 (33.Notes to the Financial Statements For the year ended 30 September 2014 Note 14.19 million) due to National Rural Support Program. 16. FBR decided the case against the Company on 29 November 2013 and raised a demand of Rs.212) 103.494. the Company has filed an appeal before Honorable Lahore High Court against the order passed by the Appellate Tribunal.558 51.

Hence no provision has been made in the financial statements.695. 2013 declared the amendments made in the The Workers’ Welfare Fund Ordinance.68 million. sale. these financial statements do not include any adjustment to this effect since the Company is of the opinion that it does not come under the purview of the order of the Honourable Sindh High Court and that the Honourable Lahore High Court had already declared the above amendments unconstitutional via the case reported as 2011 PLD 2643. department has filed appeal before appellate tribunal (“ATIR”) against order of CIR (Appeals).249 1.6 Case of the Company was selected for audit u/s 177 of I.771.5% has been charged as allowed by the FBR vide SRO 77(I)/2013 dated 07 February 2013. Accordingly no provision has been made in financial statements.e. 516 million by reducing brought forward losses.392. management of the Company expects a favorable outcome in this case. The Court suspended the proceedings of the notice vide its order dated 24 April 2013 and the final outcome of the case is pending. counter guarantee given for amounting to Rs. 123. 3. 16.333 million has been vacated on 14 November 2014.04 million (2013: Rs. 380.783 million). 16. In the light of the above order. 16.990 2013 Rupees – – – 1. However the management of the Company based on the opinion of its legal advisor is confident that this case will be decided in its favor.247 – Annual Report 2014 | 57 .8 Cross corporate guarantees given by the Company to its bankers for DSML as at the reporting date amounts to Rs. interest expense. Now PIDB has again filed a petition and Honourable Supreme Court has accepted the petition to re open the case.420. 1971 (“WWF”) through Finance Act. salaries. Accordingly no provision is made in the books of account of the Company.1.78 million).Notes to the Financial Statements For the year ended 30 September 2014 An appeal filed by PIDB against decision of arbitrator in Honourable Sindh High Court Karachi was dismissed during the year 2004-05. which is still pending. 2014 2013 Rupees Rupees 16. 380.9 Guarantees issued by the banks on behalf of the Company in favour of various parties as at the reporting date amounts to Rs. Company filed a writ petition against this notice in the Honorable Lahore High Court (“Court”) on the basis that the rate of 0.778 16. the provision to date based on accounting profit comes to Rs. Consequently. The final outcome of this case is not known at present. who vide order dated 06 April 2010 decided appeal in favour of the Company on most of the issues. Assistant Commissioner of Inland Revenue (‘ACIR”) passed order u/s 122(5) / 122(1) by making additions on different issues i.1.1. Further. gain on sale of assets etc. amounting to Rs.274 127.912. 4.703.1 Letters of credit for import of machinery and its related components 617.. 16. 232. However the management of the Company based on the opinion of its tax advisor is confident that this case will be decided in its favour.1. 16.T. However.701 million (2013: Rs.1. 94.020.7 Counter guarantees given by the Company to its bankers on account of agricultural loan as at the reporting date amounts to Rs. Company has filed appeal before Commissioner Inland Revenue (Appeals) (“CIR”). subsequent to the year end.375.32 million (2013: 61.32 million (2013: Rs. However.4 The tax department issued a show cause notice to the Company on 09 April 2013 on the grounds that the Company has charged Federal Excise duty at the rate of 0.2.983 803.70 million) for the current year. 2008 applicable through which WWF is applicable on accounting profits rather than on the taxable income computed after incorporating the brought forward losses. 5.1.2.5% instead of 8% on local supplies made and raised a demand of Rs.2 Commitments 16.5 The Honourable Sindh High Court through its order dated March 01.O 2001 for Tax year 2008. Based on opinion from legal advisor.32 million). 50.2 The amount of future lease rentals on agricultural contract and the period in which payments will become due are as follows: Not later than one year Later than one year but not later than five year Later than five years 2014 Rupees 444. 16.

987 1.353 1.211 27.213 5 75.709 10 442.315.828.054) .836 .065 (58.013. 7.345.771.045 463.533.255.817 10.803.391. 8.180 122.360.385 2.499.784.829.291.432 187.370) (52.216.1 17.406.889 345.186 56.024 15.432.732 68.672.865.870 2.1 Operating fixed assets PROPERTY.591.632 10 21.477.991.650.303.621.577 249.102.954 408.004) .777.450.646 Tube well 2.442) (53.158.679.082.857.207.630.127.012 3.857.099) (190.322 135. 13.429) Electrical installation 78.000 (99.682.678 3.576.677 .056.520) Furniture and fixture 28.867 26.088. .657. 35.268 (122.283.256 5-20 2.376 332. .249 10.060 Non-factory building on freehold land 656.360 Owned Freehold land 558.255 (711.748.769.000 .517 50. .351.559 20 29.250) .260 334.604 33.024 17.583 . .243.691.919.802.153.729.861.072 11.499.132 .451.570.573 Arms and ammunitions 7.450.240.308. 29.960.714 .595.101 10 41.543.839) .288.498. 1.341 (19.679 10 1.589.316.615 5.245. 2. 11.321 666.234) Tools and equipment 46.323.110 5-20 182.474.014 10 92.648.573) As at 01 October 2013 10.099 2013 Rupees Net book As at value as at 30 September 30 September 2014 2014 17.524.142) (80.968.059 32.097 (81.793.2 58 | JDW Sugar Mills Limited Rupees Rupees Rupees Additions/ (deletion) Transfers during the year to / (from) Rupees Fair value of assets acquired Rupees % As at 30 September Rate 2014 Rupees Rupees Rupees As at 01 October For the Adjustments 2013 year Rupees Rupees 10.208.383 . 1. 102.628 10 145.072.527 10-20 24.677.448 .108. 251.212 2014 Rupees Cost Depreciation 17.245.156. PLANT AND EQUIPMENT 17 Note Notes to the Financial Statements For the year ended 30 September 2014 .012 1.555 10 149.645.589.783 .781. 7.098.381 .564 832.258 .Operating fixed assets Capital work in progress 17.972.842.460.790 .438.042.238 125.465 20 167.829.562.915 Office equipment 55.839 .454.597.529 2.837.510.690.867.572 (122.322.000. 46.928 5.650.011) 77.216.058.828. .219.814.480 12.476 295.612.481 Weighbridge 10.908.249 12.787.319.486. 4. . 17. (1.713.067) Factory building on freehold land 872. 657. 27.073 961.529) 51.268 4.890 266.110.393.641.330 2.432 81.401.980 Aircraft 398.634.265.054.636.971.281.595 Agri implements 409.636 1.321 1.175 3.608.517 10 3.416.537 4.175.407 10.666) 3.502 * It represents land transferred from investment property.503 .016 4. 492.191.398.682 20 96.403 4.354.418 560.869 336.270 (2.955 (983.400.843 220.031) .011 176.784.763.867.016) (190.057.207 .992. 3.178.158 1.079 576.150.909 520.405 .170 .922 (44.738.804.722.250 268.454.008.010.317 .218 102.881. (25.189.819 *520.645.612.185.054 57.032. - 10.002 5.784.567 2. .955.050.608 3. 297.142) (80.932 65.806.116.198.536.683.074 45.548 .758. .116.517 450.253 10.677.474.921.665.272.458.840 .324.656 10 7.986 7.285 8. 245.587 678.864.330.044 32.174) (591.817 .543.508 33 14.039.577 25.982 228.853 3.439 41.679.484 19.516.649 716.370) Plant and machinery 7.426.895.451.275.078.482.537.000 99.541.813 1.128 24.713. 95. 1.422 107.628 .331.061.689.577) .097 .964.680 . 24.099) Leased Plant and machinery 677.292.823.476) 116.946 122.930.884.472.500 7. 170.513 4.088.682 102.255 23.955.015.402.202. 56.691.149.813 48.202.149.277.234 Computers 22.295 (148.025.215 620. .973) Motor vehicles 241.089 Roads and boundary wall 46. 510.393 (57.900 89.665.882. 398.668 6.185. 17.030 65. .323.562.768 (45.624.171 Motor vehicles 260.250.227.768.814 .656 .290.846 .136.843. 1.674 .258. (749.174.609 10 15.417.666 265.910.313.908 605.305 Agri implements 393. .176 11.500 (89.098.471. .056.111 8.517 (311.445 1.315. .543 264. 156.

000 .094. 442.483 Weighbridge 10.864 Arms and ammunitions 7.695 2.086.403 36.217.813 10-20 22.961 .507.482. 1. 471.815.000) (651.451.563 Aircraft 398.481.331.955.456 10.875.291 291.173 167.901 .521 99.185. .553.793. 7.453 1.158 10 93.287.144.453.580 Plant and machinery 6.985 .998.873 246.738. 1.517 .289. Rupees Rupees Rupees Rupees Fair value of assets acquired Rupees % As at 30 September Rate 2013 Rupees Rupees Rupees As at 01 October For the Adjustments 2012 year Cost Depreciation Additions/ (deletion) Transfers during the year to / (from) Rupees Rupees Net book As at value as at 30 September 30 September 2013 2013 11.853 10 86.916 .151.783 32.967. .205.517 10 3. .503. .867.817) 265. 3.865) .198 Agri implements 309.320.080 (58.394 342.240.581 - - - .581 Factory building on freehold land 844.420.500 20 24.583 296.307 .587 1.858.010.832.645.188.098.491.391 46.198.964 5.265.510) .294. .191.852 Office equipment 48.091.807.210 .625. 78.576.226) Owned Freehold land 467.784.292.387.795.402 (1. 41.624.000) (84.260 . (27.016 28.863 1.849) Leased Plant and machinery 542.916.927.374.869 10 396.075) 9.188.857.012 7.376 4.330.087.490.226) 1.285 260.030.065. .000 (99. .890 2.363 18.215.760.707) Motor vehicles 246.889 . 241.489.901.143 175.499.992 . 393.114.842. . 145. 471.349.192.589.028 23.250. .454.253.510 28.290.645. . .089.699 2.513 300.749 508.656 10 7.562. 55.592.623 .391.313 26.174 Agri implements 447.720) .249 10 18.820.932 (175.759.281. 7.216.916 (1.426 58.630.503 230. 278.628 10 117.990 (165. .608.470 95. 398.544.461 286.499.160 (59.124.720 .577 253.889 10 1.829.355 .064.774.218 5 72. .124. 409.832.715.892. 7.580 70.728.063 . 11.041.726.668 25. 15.418 3. 46. . 2.898.349.877.242 36.199 10.359.765.690.427 695.002 33 11.096.954 4.937. (3.391.537.309.000) .116.610.387 7.491.891 449.512 23.832 59.780.012 (25.588.908.182) 75.961.177 527.963.279) As at 01 October 2012 Notes to the Financial Statements For the year ended 30 September 2014 Annual Report 2014 | 59 .122.044 583.213. (24.375.561 .660.740.456.050.609 27.255 10 38.126 .601.740.340 Motor vehicles 226.030 181.921.788 .337 17. .283.416.420.802.149.865) .279 412.254 .758.601.115.245.787.983.051 Tube well 2.817 3.189. 28. .846.447 5-20 158.182 2.656 .187 (10.127.173) 96. 659.454.277 105.954 (5.867 560.432 20 71.538.158.245.648.238 953.422 74. 10.079 7.648 175.352 Non factory building on freehold land 620.000) .781 (23.541.507.873 Furniture and fixture 27.651 Computers 19.690 1.870 13.360 . 3.127.490 .729.075 (39.955.959.000) (651.288.370.313) Electrical installation 72.416. 29.852 (17.865) .032 .460.630.023.328. 24. 182.506 (32.307 .886 .881.660. . .175 3.456. 14.666.766.161.517 429.000) .340. 742.401.353 10 13.615 22.550) Tools and equipment 44.747. .882.468 818. .489. 21.510 . 872.695 4.113 .153.515.223 6.156.678. .330 5-20 2.702 2.210) .063 45.824 122.697.678 3.096 (38.186.000. (21.462) 92.867.374. 46.385 25.628 .390 3.666 8. .359.543.683 .192 (26.852.462 149.454. 22.445 26. 10.370.541. .928 20 160.176.536.766 Roads and boundary wall 46.832 (54.180 .

630 252.063 Negotiation Tractor Mr.833 .754 .214.371. Muhammad Arshad 1.342 194.446.967 16.323.437 271.547.680.947 25.437 .000 305.075.027 9.339 329.502 .484.566 770.do Tractor Mr.000 2.579 1.633 710.669.142 80.754 376.333 297.326 .222 615.623 435.598.000 52.000 529.786.292. Nazir Gopang 1.121.628 (322.000 4.595 356.2 2014 Rupees 2013 Rupees Depreciation charge for the year has been allocated as follows: Cost of goods manufactured Administrative expenses Biological assets 31.000 404.001.1.000.700 339.326 .Notes to the Financial Statements For the year ended 30 September 2014 17.116.786 2.367 .102 2.000 1.410.602.637.897.406.304 92. Elahi Bukhsh 543.754 744.000 729.000 788.000 165.800. Abid Ansar 1.622 628.450.859 1.111 271.434 Negotiation Vehicle Mr. Luqman Hakeem 611.330.do 04 Vehicles Mr.500 (129.434 306.084.do Net book value of assets less than Rs.591 Insurance claim Vehicle Mr.865 25.094 .700.489 23.621.992 Sale proceeds Gain/ (loss) Mode of disposal Rupees Rupees Rupees Rupees Rupees Rupees Employees 07 Vehicles Employees 6.437 18.682 508.670 .437 271.000 398.137.109.753.667 9.do 2014 190.111 271.099 110. Atta ur Rehman 139.246 1.do Vehicle Mr.086.017 970.170 57.do Tractor Mr.111 307.2 17.525 40.398.000 503. 249.354 7.000 1. Note 17.760 46.000 473.246 1.696 16.674 715. Shah Mohammad 543.600 390.010. Khurram Ayub 489.000 2.395 Negotiation Tubewell bore Written off 1.000 463.851.818. Abdul Sattar 551. Rahim Bukhsh 543.359 .661 2.818.041 338.do Dumper Trolly Mr.146. Karamat Ali 2. Raheel 4.000 195.000 1.866 .099) .515.do Vehicle EFU General Insurance Limited 916.790 60 | JDW Sugar Mills Limited 312.748. Zahir Khan 2.do 16 Laptops Open market 1.387 7.819.do Tractor Mr.091 2.747 695.000 57.000 443.1 32 18.344.000 296.do Others parties Freehold land and Mr. Plant and Equipment Accumulated Description Particulars of buyer Owned Cost depreciation Book value 469.do 02 Tractors Mr.055.946 44.605 1.839 876.1.000 953.674 670.123 297.202.500. 1.330 59.294 Negotiation Lathe machine New United Agro Industry 124.533.44 million acquired from JKFS are in process of being transferred in the name of Company.524 (102.655.633) .118. Company Policy 17 Peter engines Mr.380.608 .do 03 Tractor Mr.133 167.276 .591 127. 50.463) Company Policy 02 Motor cycles Employees 123.500 16.724 276.933 1.do Vehicle Mr.971.215.027.409 750.3 Disposal of Property.021.437 271.256 1.237 .702 462.674 745.370 Negotiation non-factory building Freehold land Syed Murtaza Mehmood 1.141 4.358.289 470.do Tractor Mr.do 02 Laptops Employees 164.000 (15.467 533.342 46.177 . Qamber Hamid 1. Nauman Nazir 810.909 2. Talib Hussain 543. .523 511.202.947) .do Vehicle Mr.816.020 1.814.000 316. Qamber Hamid 108.629.067 .699 203.873.000 406.333 884.421 .111 271.906 1.477 172.644 235.367 305.222 80.075 13.381.500 66.645 .472 123.392 150.623 333.1.232 – 678.326 .095.do 04 Vehicles Mr.242.000 622.1 Assets having net book value of Rs.472.do 02 Vehicles Mr.094 1.003. Abid Nasir 2.700 .000 1.do 30 Tractors Mr.425.544.000 1.672 876.043 2013 39.638 162.728.498 2.370 86. Abid Ansar 14.

1 Capital work in progress mainly represents capital expenditure incurred by the Company for Co-Generation Power at Unit III and for BMR at Unit II.266.942.642.classified as non current assets 10.115.057.840) (527.521.562.438.411.132 5.691.942.411.457 As at 30 September 2013 Rupees (150.212 2013 As at 01 October 2012 Rupees Additions Transfers Rupees Rupees Building Plant and machinery Advances to suppliers 126.542 (2.2.346.693 3.770 2.984.515.2 Capital work in progress 2014 Building Plant and machinery Advances to suppliers As at 01 October 2013 Rupees Additions Transfers Rupees Rupees As at 30 September 2014 Rupees 209.958 (1.783 – 18.204) 5.136.477 (506.757.679.981 298.519 92.127.958 1.987.979.2.134.751 49.840.190.000 Carrying value Rupees - – 2.872 (2.913 233.190.338 151.132 – 5.604.679.561 691. 34.000.115.837.000 18.093.690.136.381) 576.979.295.840) Crop harvested (3.929.classified as current assets 1.53% to 12.190.411.942.303) 4.691.681.981 298.040.68% per annum (2013: 11.056.057.891.524.961 – 1.641 1.2 2.987.511.286.414.477 357.000.50 million after deducting the net proceeds from sale of electricity during testing period.477) 298.319.942.099 7.042.671) (356.511. 253.24% to 12.079.66 million (2013: Rs.894.132 – 2.919.562.416 (4.916 (268.822 – Mature .993.032 1.1 Movement in the carrying value of biological assets Note Balance at 01 October 2013 Crops acquired from JKFS Expenses incurred during the year Cost Rupees Fair value Rupees - 2.749.783 Balance at 30 September 2014 Annual Report 2014 | 61 .2 Additions to capital work in progress also include borrowing costs of Rs.642.457) – 209.579 1.190.622) 691.533.564 369.509) 1.Notes to the Financial Statements For the year ended 30 September 2014 17.099 17.055.392.99 million) relating to specific borrowings at the rates ranging from 11.979. 18 BIOLOGICAL ASSETS Consumable biological assets represent: 2014 Rupees 2013 Rupees Sugarcane Immature .471.762.132 Fair value loss charged to profit and loss – (527.919.434.07% per annum) and costs of testing Co-Generation Power amounting to Rs. 17.314 502.774. 404.336.128) 1.641 1.

190.779.086 22.102. 35.398.806 37. wages and other benefits include Rs.3 The Company harvested 19. the fair value measurement for the standing crop has been categorized as Level 3 fair value based on the inputs to the valuation techniques used. The valuation model considers the present value of net cash flows expected to be generated by the planation.2.325 22.897.337 maunds.702 125. 13. The expected cash flows are discounted using a risk adjusted discount rate.4.Notes to the Financial Statements For the year ended 30 September 2014 Note 18.956.600 242.093. wages and other benefits 18.261.328 255.50 million (2013: Rs.251 171.463 291.840) – 49.2 Level 3 fair values The following table shows a break down of the total gains / (losses) recognised in respect of Level 3 fair values: Note (Loss) / gain included in cost of good manufactured and other income Change in fair value (unrealised) .382 – – – – – – – – – – – – – – – – – – – – 2.144 4.115.218 87.692 8.5 maunds per acre respectively in addition to issuance of 779 acres of sugar cane mature crop for seeding purposes to internal farms and some external parties.342 1.1 Land preparation & cultivation expenses Depreciation 17.511.031. Nil) in respect of provident fund.126. 18.885.2.077.1 Fair value hierarchy In absence of active market for sugarcane standing crops.4.2 Expenses incurred during the year Land rentals Irrigation expenses Fertilizer expenses Salaries.202 91.984. wheat and moong during the year at yields of 797.200. 18.4 Measurement of fair values 18.5 and 3.205. Fair value has been determined on the basis of a discounted cash flow model.367.1.2 Harvesting expenses Seed and sapling expenses Pesticide and herbicide expenses Sowing expenses Vehicle running expenses Repairs and maintenance Bio-laboratory expenses Insurance Utility expenses Printing & stationary Freight Amortization 31.396.332.908 21.374 maunds and 202 maunds of sugar cane. The cash flow projections includes specific estimates for next year .657 20.876.other income Change in fair value (realised) cost of goods consumed 62 | JDW Sugar Mills Limited 34 2014 Rupees 2013 Rupees (527.475.945 162.702.257 308.132 – 18.1 Salaries. 15.537 60.316.1 Travelling and conveyance Others 2014 Rupees 2013 Rupees 469.287 1. 18.032 – .

093.520.7 Fair value Rupees Total Rupees 831.892.305 (65.39% Cost of Rs.947.691.674.783 The company is exposed to the following risks relating to its sugarcane cultivation.040.3 Valuation techniques and significant unobservable inputs The key variables.987. assumptions and the impact of changes in those is given below: Valued plantations (Actual) -Punjab Zone Acres 9.723.800) – Decrease of 10% in expected average selling price per maund (261.741) – Increase of 10% in discount rate 18. Regulatory and environmental risks Annual Report 2014 | 63 .894.032 925.446 766.751 1.374. Management performs regular reviews to identify environmental risks and to ensure that the systems in place are adequate to manage those risks.6 Segment-wise composition Cost Rupees Punjab Sindh Total Risk management strategy related to agricultural activities 18.Notes to the Financial Statements For the year ended 30 September 2014 Unit 2014 Value 2013 Value 18.5 million in respect of plantation on 250 acres of sugarcane crop is considered to approximate their respective fair values less point of sale costs as these assets are still at a very early stage of plantation and it is considered that in-significant biological transformation has taken place or the impact of fair value measurement is not significant.adjusted discount rate % per month 1.4.642.414) 114.5 Sensitivity analysis Impact of changes in key subjective assumptions on fair value of biological assets is given below: 2014 2013 (Decrease) (Decrease) Rupees Rupees Decrease of 10% in expected average yield per acre (182.480.790) – (7.751 49.446 811. 18.357 Estimated yield per acre -Punjab Zone Maunds 793 -Sindh Zone Maunds 801 Harvest age Months 12-14 Estimated future sugarcane market price per Maund -Punjab Zone Rupees 180 - -Sindh Zone Rupees 182 Risk . The Company has established environmental policies and procedures aimed at compliance with local environmental and other laws.064 -Sindh Zone Acres 10. The Company is subject to various laws and regulations in Pakistan.573. 10.032 1.

1 It represents agricultural land given on lease.973. This goodwill was merged in the Company’s financials at the time of merger of USML and GSML into the Company.2 20.310.310.251 19. The Company manages this risk by aligning its harvest volume to market supply and demand.675.251 (520.693 – 626. affecting the quality and quantity of production. the recoverable amount of both cash generating units has been determined based on the value in use calculations by discounting the five years cash flow projections at 17.881.930 693. Management performs regular industry trend analysis for projected harvest volume and analysis.1 20. 273 million (2013: Rs.260 – 7.Notes to the Financial Statements For the year ended 30 September 2014 Climate and other risks Due to inherent nature of the agricultural assets. 39.991 Balance as at 30 September 173.511. For impairment testing.302 paid by the Company in excess of the fair value of identifiable net assets of United Sugar Mills Limited (“USML”) and Ghotki Sugar Mills (Private) Limited (“GSML”) respectively. Surplus production or bumper crop may result in a lower selling price hence affecting profitability of the Company adversely.1 Land purchased during the year 2014 Rupees 693. fungal and weed infestations resulting in crop failure and reduced yields The Company is principally dependent upon the Government’s measures for flood control.816 608. it contains elements of significant risks and uncertainties which may adversely affect business and resultant profitability.855. The calculation of value in use is sensitive to discount rate and local inflation rates. including but not limited to the following: i) adverse weather conditions such as floods etc. The fair value of investment property is Rs.855.822.97 million) on the basis of revaluation carried out on 14 April 2014 by an independent valuer .321) – 2013 Rupees 685. 1. Note 19 INVESTMENT PROPERTY Balance as at 01 October Transferred to operating fixed assets 17.310. Note 2014 2013 Rupees Rupees 20 INTANGIBLE ASSETS Goodwill Oracle computer software 20. 64 | JDW Sugar Mills Limited .84% per annum.693 18. and ii) potential insect. 568. The Company follows an effective preventive pesticide/insecticide/fungicide program and additional regularly monitors for any infestations and takes immediate curative measures.026.828.391 and Rs.765.545.1 608.509 608.693 Goodwill includes Rs. Supply and demand risk The price of sugarcane is driven by consumer demand of sugar as well as Government’s intervention in setting of minimum/support price for the grower.

250.500.000 560.1 fully paid shares of Rs.2 2013 Rupees – 1.1 21.049.000 – (200.000 (90.511.000 560.050 1.2.000) fully paid shares of Rs.2 Investment in associate .885.805 (2013: Nil) 21.648.805 (2013: 51.648.049.39% (2013: 47.975.648. 10 each Equity held 48.414.22%) Less: investment classified as held for sale 29 JDW Power (Private) Limited (“JDWPL”) Cost as at 01 October 9.000 90.398.2 21.2.148.463 – As at 30 September 18.610.000 – 200.000) fully paid shares of Rs.000.unquoted Faruki Pulp Mills Limited (“FPML”) 199. The amortization of the software represents the total amortization charged during the current year which is equal to accumulated amortization.000 (2013: 104.000.000 3.98%) 21.049.000.000 (2013: 9.816 – Rate of amortization 10.000.397.500.750.500.750.000) – – 90.050 560. 10 each Less: accumulated impairment allowance 21.37% (2013: 47.000.1 The software represents financial accounting software acquired during the current year from JKFS. 10 each Cost as at 30 September JK Dairies (Private) Limited (“JKDL”) 10.000) – (90.463 – – 1.000) fully paid shares of Rs.000.000) – 2.750.69%) Cost as at 01 October Acquired during the year: 148.000 (2013: 10.050 – 2.000 1.000.500.044.750.1 & 18.914.044.975.2 Equity held 47.37%) 1.000 2. Note 2014 Rupees 2013 Rupees 21 INVESTMENTS Investment in subsidiary company Investment in associated companies 21. 10 each Equity held 99.500.000 1.885.98% (2013: 99.484.2 Oracle computer software Cost As at 01 October Acquired during the year – 20.000 Annual Report 2014 | 65 .Notes to the Financial Statements For the year ended 30 September 2014 Note 2014 Rupees 20.050 1.000.044.000) fully paid shares of Rs.094.500.00% 0.1 Investment in subsidiary company .un quoted Deharki Sugar Mills (Private) Limited (“DSML”) 104.050 560.397.000 560.000 1.279 – – 20.000. 10 each Equity held Nil (2013: 22.049.00% 20.2.279 – Accumulated amortization As at 01 October Amortization for the year 31.000.

880 58.400) 1.692.1 22. 22.880 1.1.057.077.2 The impairment was charged on the basis that board of JDWPL had decided to discontinue its operation and has no intention to build.000) (3.567.860.1 This represents amount given to DSML out of the proceeds of long term loan availed by the Company from United Bank Limited . 12 June 2014.2 36.000) 27. The loan is recoverable in 36 equal monthly instalments starting after three months from the commercial operation date i.led syndicated loan.1 This represents interest free soft loan given to meet 100 % expenses of grid interconnection at Unit III of the Company for Co-Generation Power.4 (489.280 2.860.692. The markup and principal repayment terms of the amount given are similar to those narrated in note 8.680 27.2.553.000.000 1.553.1 to these financial statements. Note 2014 2013 Rupees Rupees 22. 23 LONG TERM DEPOSITS These mainly comprise of security deposits with leasing companies in respect of leasing facilities availed.000.000.2 Advances to electricity distribution Companies Sukkur Electric Power Company (“SEPCO”) 22.000. 03 October 2014.567.280 Advance given Less: current maturity presented under current assets 20.413.000 22.000.000.2.Notes to the Financial Statements For the year ended 30 September 2014 21.000 36.2. considered good Advances to electricity distribution companies 22.1.553.e.1 Additions in equity investment represents right shares issued by FPML.650.2 2014 Rupees 2013 Rupees 1. operate and maintain a Co-Generation Power plant.2 This represents interest free soft loan given to meet 100 % expenses of grid interconnection at Unit II of the Company for Co-Generation Power.e.000.1 Advance to subsidiary 1.400) (489.000 22.000.000.880 1.000 58.000 33. - 66 | JDW Sugar Mills Limited .000 50. The loan is recoverable in 36 equal monthly instalments starting after eighteen months from the commercial operation date i. 21.000 83.000.1 1.000.135.2.280 83.2.280 22.553. own.567.000 (9. Note 22 LONG TERM ADVANCES Advance to subsidiary-unsecured.692.000 31.2.1 Less: current maturity presented under current assets Multan Electric Power Company (“MEPCO”) 22.000.077.

839 – – 726.486.382 3.754.398.625.486.357 (14.165.172.527. 2014 2013 Rupees Rupees 25 STOCK IN TRADE Raw material Finished goods 211.considered doubtful Less: provision for doubtful debts 2014 Rupees 662.661.863.252 Note 26 TRADE DEBTS .UNSECURED Trade debts .876.287.237. SPARES AND LOOSE TOOLS Stores . 72.Co-Generation Power 19.092. an associated company.486.considered good 26.239.768 3.775.141) 662.141 677.261.604) (44.31 million) due from Riaz Bottlers (Private) Limited.2 Increase in trade debts mainly represents the receivable balance from NTDC on account of sale of electricity under EPA.644.corporate sugarcane farms 337.1 Stores. Annual Report 2014 | 67 .157 (14.380.Notes to the Financial Statements For the year ended 30 September 2014 24 2014 Rupees 2013 Rupees STORES.604) 1.Co-Generation Power 404.802 241.601 16.029.691 361.121.661.839 Spares .439. Nil (2013: Rs.728 254.048.486.762 – .478.383.594 24.216 14.630 15.597 Less: provision for obsolescence 1.216 239.876.sugar 390.198 (44.189 254.663 77.597 – 34.719 4.231 16.561.311 632.082.sugar .762 Loose tools .016 26.Co-Generation Power .141) 2013 Rupees 239.sugar .239.082. spares and loose tools include items which may result in fixed capital expenditure but are not distinguishable.775.569.141 254.891 361.398 147.257.147.536.016 14.1 Trade debts .484 4.461 14.324.1 This includes an amount of Rs.315.346.527. 26.671.707 588.246.

249. 68 | JDW Sugar Mills Limited .6 Other receivables include an amount of Rs.965.4 This represents advances given to: Faruki Pulp Mills Limited Deharki Sugar Mills (Private) Limited Current portion of long term advances 27.200 27.4 Letters of credit Federal excise duty and sales tax receivable Advances to staff .000 3. 20 million) receivable from executives of the Company.682.533.347 1.883 173.883 20.541.1 This amount includes markup of Rs.74% to 12.966 Less: provision for doubtful advances 27.530.472.considered doubtful – 4.360 (4.930 9.347 20.590.956.182.590.472.555 27.174 489.4.472.4.109.937. 27.326 3.182.061 3.966) Advance to suppliers and contractors Unsecured .considered good 27.976.59% per annum (2013: 11.056.530.883) 193.937 18.4.364 3.937.unsecured.044 2.1 Unsecured .883 Less: provision for doubtful advances 27.003 42.785 – 9.04 million (2013: Rs.512.398.918.585 (20.400 1.702 20.45% per annum).45% per annum).006. 27.525. DEPOSITS.47% to 12.945 244.492 19.044 562.650) 27.426. considered good .682. Nil (2013: Rs.342.54 million (2013: Rs.535. 89.3 541.937.860.937.398.1 It represents advance given to JKFS which includes markup of Rs.972.472.321 489.000.5 This includes an amount of Rs. 22.59% per annum (2013: 11. During the year this balance has been settled.4.94 million) charged at the rates ranging from 11.000 9.000.620.346.966 34.767.against expenses Deposits Prepaid expenses Excise duty receivable Current maturity of long term advances Other receivables 27. Note 2014 2013 Rupees Rupees 27.626 474.2 This amount includes markup of Rs.5 521.883) Advances to related parties .655.675.59% per annum (2013: 11.060. 8.considered doubtful – 1. considered good 27. 27.502 23.considered good Unsecured .200 208.240.1 27.unsecured.937.91 million (2013: Rs.1 27. 183.038.966 1.883 – 25. 32.827.273.74% to 12.994.394 521.99 million) charged at the rates ranging from 11.2 22.860.275.883 489.394 4.937.47% to 12.323 611.2 Movement in provision for doubtful advances to growers As at 01 October Less: provision written off 4.702 2. 1.438.74 million) at markup rates ranging from 11.2 4.74% to 12.832.433.675. PREPAYMENTS AND OTHER RECEIVABLES Advance to growers Unsecured .472.3 Movement in provision for doubtful advances to suppliers and contractors As at 01 October Less: provision written off 20.47% to 12.937.750) As at 30 September 20.633 (4.958 4. 20.Notes to the Financial Statements For the year ended 30 September 2014 Note 27 2014 Rupees 2013 Rupees ADVANCES.707.472.868 173.616 (30.230 (20.97 million) receivable from ATF Mango Farms (Private) Limited (a related party).45% per annum). 83.527 5.966 4.966 – As at 30 September 4.827.888.209 45.65 million (2013: Rs.472.400 1.937.966 (4.060.877 – 28.against salaries .025.966) 1.

861.501 – 357.818 1.861.180.299 85.849 .861.634.563) (31.3.Commission and others 32.327.501 2.500.688 38.156) (187.1 Cash in hand 86.180 5.084) (1.197.114.756.591.257.332.903 1.908 1.306 983.365) (1.281.Sales tax .288.311 – – 30.012.366 5.776 41.051) (9.707) (1.296.638.534.559.2 Electricity 30.387 – 473.868 40.00% per annum).756.218.180.332. Note 30 2014 Rupees 2013 Rupees SALES .270.416 – – 30.1 Agriculture produce 30.792.788.971.650.354.242.Notes to the Financial Statements For the year ended 30 September 2014 Note 2014 Rupees 2013 Rupees 80.387 1.3 Electricity 983.203.402 322.012.838 .758.1 Sales Tax is being charged on the variable energy purchase price only as per Sales Tax Special Procedures Rules.241.by products 27.010.394.3.940 21.1 Sugar 30.sugarcane to DSML .332. 100 million was received by the Company from CEO for purchase of these shares.470 28.516. Accordingly.183.134.264.sugarcane seed and others 956.3 Molasses and Bagasse .297 1.2 Agriculture produce .296.171.070 (1.Federal excise duty .3.903 30.1 The balances in saving accounts carry markup at 6.683 357.NET Sugar 30.Captive Power .915.864.local .export 22.2 Co-Generation Power plant at Unit-II started its commercial operations on 12 June 2014 and it is supplying renewable electricity to the national grid.276 26.939.057.901 27. 22 per share on 28 December 2013.151. 30.948 4. the said investment was presented as non-current asset held for sale.903 422.806. 29 NON-CURRENT ASSET HELD FOR SALE The Board of Directors in their meeting held on 20 August 2013 decided to sell the Company’s entire holding in JKDL to the CEO of the Company and an advance of Rs.341.222.573.766. the sale transaction has been completed at a sale price of Rs.386 27.306 26.337.849 – 357.756.076.474) (114. 2007.413.362.895 28.547.3.547.50% per annum (2013: 6.209.964.318 Less: . Annual Report 2014 | 69 .232) 30.2 744.500. During the year.998 1.076 26.1 fixed energy price 30.Co-Generation Power variable energy price 30.218.598 28 CASH AND BANK BALANCES At banks: Current accounts Saving accounts 28.

569.642 25.252 28.088.642 31.648.1 Salaries.215.549.930 1.031 23.244 43.545.Notes to the Financial Statements For the year ended 30 September 2014 Note 31 2014 Rupees 2013 Rupees COST OF SALES Opening stock in trade Add: Cost of goods manufactured 31.080.1.736 131.478.696 56.729 8.696.736 Reimbursable cost Operating fee 19.2 Depreciation 17.688.716 – 21.072.220.132.243 28.1 Cost of sugarcane consumed .78 million) in respect of provident fund and Rs.811) – 175.136.790.771 437.001.926 13.908.235.4 Operation and maintenance costs 70 | JDW Sugar Mills Limited . wages and other benefits include Rs.411.191. 19.014 922.545.543.663) (108.655 3.492 16.071 – 31.486) (3.696.371.324.768) 27.298 21.263.172.857 22.324.215.295.896 6.207 114.072.1.484) (77.636.1 23.897.014 21.072.013 462.161.246. 36.192 3.500.149.993 93.496. 10.044.84 million (2013: Rs.953.951.551. lubricants and fuel consumed Mud and bagasse shifting expenses Electricity and power Insurance Operation and maintenance costs 31.3 Stores and spares consumed Less: bagasse capitalized during testing of Co-Generation Power 2014 Rupees 2013 Rupees 429. 31.885.sugarcane produced .sugarcane purchased 25. 7.099.327.928.521 – 19.088.463 861.485.1.1.411.071 23.2 Salaries.570 43.555 15.648.263.38 million (2013: Rs.295 Note 31.311 5. wages and other benefits 31.011.731.968 – – 9.926.760 237.655 (4.1.2 Packing materials consumed Stores and spares consumed 31.749.158 87.513.249 3.582 437.573.019 18.691 62.sugar .4 Handling and storage Freight and octroi Repairs and maintenance Land vacation charges Printing and stationery Telephone and fax Travelling and conveyance Amortization of computer software 20.533 2.688.192 23.293 144.088.850 – – 25.625.603.192 2.329 175.1.1.1.20 million) in respect of staff gratuity.970 25.3 Chemicals consumed Vehicle running expenses Oil.385.450.713.696.908.215.542.759.1 Less: Closing stock .642 850.736 (253.434 2014 Rupees 2013 Rupees Cost of goods manufactured Cost of sugarcane consumed (including procurement and other costs) 31.342 316.573.bagasse 3.250 469.1.048 3.088.981.221 5.211.306.843.048.235.043.685 18.752 21.139.639 48.771 162.089 437.870.2 Assets written off Other expenses 31.

Islamabad in which Mr.896.113 7.801 – 31.597 2013 Rupees 269.595.464.382 20. Annual Report 2014 | 71 .296.057 5.172 11.240 4.594.595.503.000 2.000 9.867. 0.000 125.397. 32.790 161.1 Salaries.973.232 24.429 7. wages and other benefits 32.679.851. F6/4.211.000 8.625.3 Entertainment Advertisement Newspapers.433 23. 4.905 14. wages and other benefits include Rs.711.15 million) in respect of provident fund and Rs.750.052 171.3 Auditors’ remuneration Statutory audit Half yearly review Other certificates Out of pocket expenses 2.004.652 490.2 Fee and taxes Subscription and renewals Telephone.21 million (2013: Rs.444.24 million) in respect of provident fund. books and periodicals Assets written off Arms and ammunition Other expenses 2014 Rupees 284.000 1.981.064.721 33.2 None of the Directors of the Company or their spouses have any interest in.1.014. 2014 2013 Rupees Rupees 32.972 2. wages and other benefits include Rs. or are otherwise associated with any of the recipients of donations made by the Company during the year except for National Rural Support Program (“NRSP”) situated at 46.000 2.212 5.954 31.258 26.336 122.812 15.815. wages and other benefits 33.2 Travelling and conveyance Office rent and renovation Vehicle running and maintenance Legal and professional services Repair and maintenance Insurance Charity and donations 32.108.308.323 1.294.000 350.443 18.958 19.632 15.Notes to the Financial Statements For the year ended 30 September 2014 Note 32 ADMINISTRATIVE EXPENSES Salaries.938 16.343 5.967.469.45 million (2013: Rs.000 Note 2014 Rupees 2013 Rupees 33 SELLING EXPENSES Freight and handling charges Salaries.1 Other selling expenses 86.352 1.442 241.000 105.614.000 1. 6. 8.714 3.000 120. 0.684.368 9.908.511.001.32 million (2013: Rs. fax and postage Printing and stationery Electricity and power Auditors’ remuneration 32.135.924.368.341 – 15.1 Salaries.198 6.069 46.308.245.664 6. Aga Khan Road.000 90.214. Jahangir Khan Tareen is a Director.658 23.349 529.007.204.026.052.1 Depreciation 17.634 22.08 million) in respect of staff gratuity.100.214.752.638 38.000 300.190 8.061.792 32.245.343.688.105 8.157 2.729 278.000.000 2. 3.751 15.880 46.

103) 1.027.Workers’ Profit Participation Fund 14.561.564.246 43.872.11 million) on receivable from Deharki Sugar Mills (Private) Limited.760.000.150.848.419.78 million (2013: Rs.221 20.2 .secured 36.959.3 . 36.030 133.732 2013 Rupees FINANCE COST Interest and markup on: .843 (404.211 – 141.4.174. plant and equipment 17.050 34.secured .519 1.1 .262 173.780.719 1. 238.073 9.422 134.1 It mainly represents the rental income earned from investment property.814.671 662.999) 2.507 79. 387. Nil) charged to Riaz Bottlers (Private) Limited.285.659.717 Profit on sale of property.374 2.799 36 2014 Rupees 18.197.376 72.093.484. 279.523 20.3 Fair value gain on biological assets 18.716.997.58 million) on receivable from these parties.000 14.590 74.824 76.153.399.188.578.229.494.030 19.finance leases .018 1. an associated company.2 Excise duty written off Sales tax receivable written off Worker’s welfare fund Other expenses 51.544.698. Note 2014 2013 Rupees Rupees 35 OTHER EXPENSES Worker’s profit participation fund 14.2 344.Led Syndicated Loan.124) 1.507.156 (34.2 This amount includes markup amounting to Rs.1 Markup on short term borrowings is net of markup from related parties amounting to Rs.333 – Income from non-financial assets 3.567.393 9.938.06 million (2013: Rs. 232. This receivable has been made from the proceeds of long term loan from United Bank Limited .237 – 43.333 203.redeemable capital .505.2 Bank charges and commission 1.151.509 49.082.645.649.645 20.058 – – 69.332.174.768. 72 | JDW Sugar Mills Limited .392 1.281.313 340.880.822 137.053 36.489 49.589.871 814.887 12.44 million (2013: Rs.224.622 Less: Borrowing costs capitalized 2. This receivable is in respect of proceeds of short term borrowings from banks.321.purchase consideration related to JKFS 1.032 39.000 (405.558 – Note 63.297.1.2 Markup on long term loans is net of markup from related party amounting to Rs.400 9.118.339.696.secured 36.short term borrowings .499. 34.663 4.290.888.Notes to the Financial Statements For the year ended 30 September 2014 Note 2014 Rupees 2013 Rupees 34 OTHER INCOME Income from financial assets Profit on bank deposit Markup on delayed payment from NTDC 1.482.long term loans .034.986.654 59.836.1 Insurance claim Foreign exchange (loss)/ gain Others 34.787.364 1. 2.384 – 6.502 13.2 Scrap sales Gain on sale of investment Sale of mud Rental income 34.

Notes to the Financial Statements For the year ended 30 September 2014 Note 37 TAXATION Income tax . 1997 (whether as an owner or cultivator of land. 2001. the Company’s sale of electricity from the power plants to CPPA/ NTDC is exempt from income tax including turnover tax and withholding tax on imports.2 The tax provision is charged by considering the provision of section 113 and other tax credits available under the Income Tax Ordinance. the accounts of the Company including the power projects are being prepared under normal taxation regime.3 Deferred tax income relates to reversal and origination of temporary differences.39 15. as the case may be) and that leviable on ‘other operating income’ under the Income Tax Ordinance.191.522.6 The two new high-pressure Co-Generation Power plants have been set up by the Company under the Federal Government’s Framework for Power Co-Generation 2013 read with the Policy for Development of Renewable Energy for Power Generation.1 The provision for current tax includes the tax chargeable to the Company under Punjab Agricultural Income Tax Act. 2001. In addition to this. 37. 2013 37.194) 209.705.67 Average effective rate charged to profit and loss account 29. 37.47 Numerical reconciliation between the average tax rate and applicable tax rate for the current year has not been presented in these financial statements as the Company is chargeable to minimum tax under section 113 of the Income Tax Ordinance.33) Others 1.1 Basic earnings per share Rupees 979.449.47 Profit after taxation Weighted average number of ordinary shares 38.895 924. 2001.890 (14.820 Numbers 59. As per the aforementioned policies.current Deferred tax 37.40 Tax effects of amount deductible for tax purposes (1. 2006. the Company is seeking clarification on whether existing notified exemptions for other power projects shall also apply to the Company’s power projects or new exemptions shall be notified.157 177.118. 37.661 Rupees 16.4 The assessments of the Company are completed up to tax year 2014 except for the tax year disclosed in contingency.776.2 Basic earnings per share There is no dilution effect on the basic earnings per share of the current year as the Company has no such commitments. 2014 2013 38 EARNINGS PER SHARE . However.3 2014 Rupees 2013 Rupees 13.304) 386.1 & 37. and for this purpose. it also includes tax on exports and capital gains which is full and final discharge of Company’s tax liability in respect of income arising from such source.2 37. the new power generation units of the Company shall be treated as separate entities.661 59. In the meantime.776.112 (1.BASIC AND DILUTED 38.762. 37.27) Tax effect of income chargeable under Final Tax Regime (5.269 37.5 Reconciliation of tax charge for the year % age Applicable tax rate 34.309.00 Tax effects of amount not deductible for tax purposes 0. Diluted earnings per share Annual Report 2014 | 73 .312.

Notes to the Financial Statements For the year ended 30 September 2014 39 2014 Rupees 2013 Rupees CASH GENERATED FROM OPERATIONS Profit before taxation Adjustments for non-cash and other items: Finance cost Depreciation Amortization Workers’ Profit Participation Fund Staff retirement benefits Workers’ Welfare Fund Profit on disposal of property. for which the proportionate share of expenses is reimbursed to the Company.631.682 1.591 24.100.853.000.841.000 12.053 508.666 48.246 45.397.000.880.358.900.399.000.486.947.195 Cash generated from operations 4.484 2 2 90 61 .016 735.089 Executives 2014 2013 2014 2013 2014 2013 2014 2013 Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Managerial remuneration 27. spares and loose tools Advances.733.330.775 1.535.147 34.713.621.969.320.985. In addition to the above.463 51.850.86 million ( 2013: Rs.007) 1.757 Operating profit before working capital changes (Increase) / decrease in current assets 5.779 – 129.215.921 4. deposits.000 10.883.562 39.000 .617.333 Bonus 12.000 117.853.200) (255.799.237) – – – – 4.000 41.000 9.561.657 1.000 2.643.396) (423.128.578.600.052.489) 876.000 234.502.118.420. the Chief Executive was charged Rs.959.994 7.093.276 11.484.460.600.667 Company’s contribution towards provident fund .760.037.080.054 Increase in current liabilities Trade and other payables (2.823. 978.400.931. DIRECTORS AND EXECUTIVES The aggregate amount charged in the financial statements for the year for remuneration.666.259 8.846 Stock in trade Biological assets Trade debts Stores. Chief Executive. 40.833 2.992 69.000 2. plant and equipment Assets written off Biological assets acquired and consumed internally Fair value gain on biological assets Gain on sale of investment 1.215.333 House allowance 10.366 3.933.000 20.176 407.429 – (203.393.143.053.666. including all benefits to the Chief Executive.509 (9.972 85.814.262.494.882 18.400.80 million) for the use of aircraft.816.000 1 1 - - - - - - - - - - - - .300.000 2. 27.003.558 36. subject to availability. 53.Executives 1.554.366.332) 170.770 (49. 23.000 8. one Director and some of the Executives are provided with free use of Company maintained cars.000 10.333.719 678.114. During the year.441.017 - 11.400 73.808 2.319 47. Directors and Executives of the Company is as follows: Directors Chief Executive Executive Number of persons Non .853.333 Utilities 2. The Chief Executive is permitted to use the Company maintained aircraft for private trips.815 70.752 205. .698 40 REMUNERATION OF CHIEF EXECUTIVE.455. prepayments and other receivables (698.297.133.000) 1.310.832.191 46.741.947.275.800.320.000.032) (20.000 9.885.393.255) (1. 74 | JDW Sugar Mills Limited .178.

Notes to the Financial Statements
For the year ended 30 September 2014
41

FINANCIAL INSTRUMENTS

The Company has exposure to the following risks from its use of financial instruments:

- Credit risk
- Liquidity risk
- Market risk
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk
management framework. The Board is also responsible for developing and monitoring the Company’s risk
management policies.
This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives,
policies and processes for measuring and managing risk, and the Company’s management of capital.
The Company’s risk management policies are established to identify and analyze the risks faced by the Company,
to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed regularly to react changes in market conditions and the Company’s activities.
41.1

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 arises principally from the Company’s receivables from
customers and other parties and loans to / due from related parties. Out of the total financial assets of
Rs. 6,625.55 million (2013: Rs. 6,191.73 million) financial assets which are subject to credit risk amount to
Rs. 3,515.03 million (2013: Rs. 4,365.79 million).
Majority of the Company’s sales are on advance basis and trade debts mainly represents receivable from
NTDC.
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each
customer. To manage exposure to credit risk in respect of trade receivables, management reviews credit
worthiness, references, establish purchase limits taking into account the customer’s financial position,
past experience and other factors. Export sales are secured through letters of credit. The management
has set a maximum credit period of 15 days to reduce the credit risk. Limits are reviewed periodically
and the customers that fail to meet the Company’s benchmark creditworthiness may transact with the
Company only on a prepayment basis.
Concentration of credit risk arises when a number of counter parties are engaged in similar business
activities or have similar economic features that would cause their abilities to meet contractual obligation
to be similarly effected by the changes in economic, political or other conditions. The Company believes
that it is not exposed to major concentration of credit risk.
The carrying amount of financial assets represents the maximum credit exposure before any credit
enhancements. The maximum exposure to credit risk at the reporting date is:

Annual Report 2014 | 75

Notes to the Financial Statements
For the year ended 30 September 2014

2014
Rupees

2013
Rupees

Trade debts
Advances, deposits, prepayments and other receivables
Long term advances
Bank balances

662,775,216
1,631,389,073
1,135,692,880
85,171,868

239,661,016
2,435,426,587
1,650,553,280
40,151,297

The aging of trade receivables at the reporting date is:

Not past due

Past due 365 days

3,515,029,037

4,365,792,180

662,775,216
14,486,141

239,661,016
14,486,141

677,261,357

254,147,157

2014 2013
Gross
Accumulated
Gross
Accumulated
carrying amount impairment carrying amount impairment

Rupees Rupees Rupees Rupees

Neither past due nor impaired

Past due more than 365 days

662,775,216

239,661,016

14,486,141

14,486,141

14,486,141

14,486,141

677,261,357

14,486,141

254,147,157

14,486,141

The analysis of trade receivables from Riaz Bottlers (Private) Limited, an associate of the Company as at the
reporting date is as follows:

2014 2013
Gross
Accumulated
Gross
Accumulated
carrying amount impairment carrying amount impairment
Rupees Rupees Rupees Rupees

Neither past due nor impaired

72,313,484

72,313,484

The Company’s five significant customers account for Rs. 651.98 million (2013: Rs. 212.34 million) of trade debts as
at the reporting date, apart from which, exposure to any single customer does not exceed 74.47% (2013: 6.00%) of
trade debts as at the reporting date.


Based on past experience the management believes that no further impairment allowance is necessary in respect
of trade receivables and there are reasonable grounds to believe that the amounts will be recovered in normal
course.


Credit quality of major financial assets

The credit quality of major financial assets that are neither past due nor impaired can be assessed by reference to
external credit ratings (if available) or to historical information about counterparty default rate:

76 | JDW Sugar Mills Limited

Notes to the Financial Statements
For the year ended 30 September 2014

Rating

Rating

Long term Short term Agency

2014

Banks























Al-Baraka Bank (Pakistan) Limited
Allied Bank Limited
Askari Bank Limited
Bank Al Habib Limited
Bank Alfalah Limited
Bank Islami Pakistan Limited
Burj Bank Limited
Dubai Islamic Bank Pakistan Limited
Faysal Bank Limited
Habib Bank Limited
JS Bank Limited
KASB Bank Limited
MCB Bank Limited
Meezan Bank Limited
National Bank of Pakistan
NIB Bank Limited
Soneri Bank Limited
Sindh Bank Limited
Summit Bank Limited
The Bank of Khyber
The Bank of Punjab
The First Micro Finance Bank Limited
United Bank Limited

Rupees
A
AA+
A1+
A1+
A1+
A1
A-1
A-1
A1+
A-1+
A1
C
A1+
A-1+
A-1+
A1+
A1+
A-1+
A-3
A1
A1+
A-1
A-1+

A1
A1+
AA
AA+
AA
A
A
A+
AA
AAA
A+
B
AAA
AA
AAA
AA-
AA-
AA-
A-
A
AA-
A
AA+

PACRA
PACRA
PACRA
PACRA
PACRA
PACRA
JCR-VIS
JCR-VIS
PACRA
JCR-VIS
PACRA
PACRA
PACRA
JCR-VIS
JCR-VIS
PACRA
PACRA
JCR-VIS
JCR-VIS
PACRA
PACRA
JCR-VIS
JCR-VIS

Remaining financial assets mainly represents receivable from related party.

41.2

2013

129,461
54,126
215,128
16,520
631,807
827,594
46,892
162
368,724
51,153,940
143,896
21,604
2,035,445
3,146,098
2,369,547
204,741
-
17,363
5,227,880
22,183
18,117,501
30,442
390,814

31,201
16,638
50,581
14,733
4,518,471
1,957,079
129,239
9,937
35,848
970,313
82,203
8,575
1,205,179
5,000
1,407,806
27,553,552
265,143
1,601,299
5,000
99,154
20,135
164,211

85,171,868

40,151,297

Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.
The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions. For this
purpose the Company has sufficient running finance facilities available from various commercial banks
to meet its liquidity requirements. Further liquidity position of the Company is closely monitored through
budgets, cash flow projections and comparison with actual results by the Board.

41.2.1

41.2.1(a) Contractual maturities of financial liabilities, including estimated interest payments.

Exposure to liquidity risk

2014
Carrying
amount

Contractual
cash flows

One year
or less

One to More than
five years five years

Rupees

Non-derivative financial liabilities

Redeemable capital

Long term loans

10,169,517,952 14,661,008,759

Short term borrowings

9,067,052,946 10,189,675,228

Liabilities against assets subject to finance lease

Interest and markup accrued

Trade and other payables

416,666,666

1,136,313,292

563,476,255

1,359,137,886

401,278,447

2,848,537,126 10,579,938,904

162,197,808

1,232,532,729

10,189,675,228
433,781,096


925,356,790


498,818,831

498,818,831

498,818,831

1,974,992,685

1,974,992,685

1,974,992,685

23,263,362,372 29,247,109,644

16,108,002,774

11,906,574,141

1,232,532,729

Annual Report 2014 | 77

702 668.852 1.989 473.3.037.16 93.92 103.78 95.39 139.07 16.3.88 90.785 - Long term finances 5. Currency risk Currency risk is the risk that fair values or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.30 170.222.64 167.14 16.81 2013 Spot rate Buying Selling Average rate for the year Average rate for the year Rupees 142.714.769 1.520 .Notes to the Financial Statements For the year ended 30 September 2014 2013 Carrying amount Contractual cash flows One year or less One to five years More than five years Rupees Non-derivative financial liabilities Redeemable capital 724.391 - 476. - 14.051.138.735.92 165.138.233.75 0.161 7.50 88.50 170.28 101.06 1. while optimizing the return.607.102.279 Short term borrowings Liabilities against assets subject to finance lease Interest and markup accrued Trade and other payables 41.965.570 1.85 0.453.25 1. such as foreign exchange rates.914.1(b) Exchange rates applied during the year The Company’s exposure to currency risk as at the reporting date is as follows: 2014 Spot rate Buying Selling EURO USD GBP AUD JPY SEK 129.36 167.132 - 302.726 1.600.99 168.222.697. 41.600. 287.209 11.164 .164 302.677.279 Market risk Market risk is the risk that changes in market prices.773.87 92. 41.834. The objective of market risk management is to manage and control market risk exposures within acceptable parameters.786. - 1.745.138.151 9.523 .93 14.375.120.164 302.3 41.470.876.97 1. purchases and resulting balances that are denominated in a currency other than functional currency.99 17.50 .954.95 14.465.520 1.439 6.120.33 EURO USD GBP AUD JPY SEK 78 | JDW Sugar Mills Limited 142.120. Currency risk arises from sales.677.699 7.361.658 763. interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments.677.257.845.024.962 20.1(a) Exposure to currency risk The Company is not exposed to foreign currency risk  as at  the reporting date.07 16.42 131.20 105.143.954.802.04 Rupees 131.177.454.1 6.774 564.658 7.25 98.735.902.3.57 98.520 1.47 105.21 103.92 0.

4.687.2 Interest rate risk The effective interest / markup rates for interest / markup bearing financial instruments are mentioned in relevant notes to the financial statements. Annual Report 2014 | 79 .3.278 As at 30 September 2013 Profit and loss 100 bps Increase Rupees Decrease 185.666 10.136.312 3.292 9.051. This analysis assumes that all other variables. 41.480 The Company does not account for any fixed rate financial assets and liabilities at fair value through profit and loss.1.658) The sensitivity analysis prepared is not necessarily indicative of the effects on profit for the year and assets / liabilities of the Company.323 – 1.456 416. This includes matching of foreign currency liabilities / payments to assets / receipts.379.1 Payable to JKFS against purchase consideration 14 Redeemable capital .666.465.834.Notes to the Financial Statements For the year ended 30 September 2014 41.313.952 – – – – 724.966. As at 30 September 2014 13.517.1 & 27.1(d) Currency risk management The Company manages its exposure to currency risk through continuous monitoring of expected / forecast committed and non-committed foreign currency payments and receipts.380.626 – – – – 447.4. Cash flow sensitivity analysis for variable rate instruments A change of 100 basis points in interest rates at the reporting date would have increased / (decreased) profit for the year by the amounts shown below.367.687.726 5.375.3.379.secured 8 Liabilities against assets subject to finance lease 9 Short term borrowings . Reports on forecast foreign currency transactions.346.237.994. using source inputs in foreign currency and arranging cross currency swaps to hedge non-functional currency debt. The Company’s interest / markup bearing financial instruments as at the reporting date are as follows: Note 2014 2013 Financial asset Financial liability Financial asset Financial liability Rupees Non-derivative financial instruments Advance to DSML 20.826.702 2.178.2 Advance to Faruki Pulp Mills Limited 27.433.124.3. Balances in foreign currency are also maintained in current and saving / deposits accounts with banking companies. exposure to currency risk is measured and appropriate steps are taken to ensure that such exposure is minimized while optimizing return.658 (94. Proceeds from exports are used to repay / settle / rollover the Company’s obligations under these working capital lines which substantially reduces exposure to currency risk in respect of such liabilities.564 (185.067.385. hence sensitivity analysis has not been presented.052.532.564) 94. Therefore a change in interest rates at the reporting date would not affect profit and loss account.secured 12 Variable rate instruments 2.946 – – 668. receipts and payments are prepared on monthly basis.1(c) Sensitivity analysis Company does not has any variable rate financial instrument.573. remain constant.151 – – 1.699 6.854 – 489.601 – 2. The Company maintains foreign currency working capital lines in order to finance production of exportable goods. 41.secured 7 Long term loans .541.924 21.177.169.668.453.404. The Company also occasionally uses currency options to cover any significant unfavorable rate scenarios. in particular foreign currency rates. The analysis is performed on the same basis for 2013.

the Company may. fair values of all financial instruments are considered to approximate their book values. creditor and market confidence and to sustain the future development of its business.3. There were no changes in the Company’s approach to capital management during the year.576 12. issue new shares. and to provide an adequate return to shareholders. As at the reporting date.892. The short term borrowing and loans and advances by the Company has variable rate pricing that is mostly dependent on Karachi Inter Bank Offered Rate (“KIBOR”) as indicated in respective notes. 41. liabilities against assets subject to finance lease and current portion of non-current liabilities. 41.778.3 Interest rate risk management The Company manages these mismatches through risk management strategies where significant changes in gap position can be adjusted. The Company’s objectives when managing capital are: to safeguard the entity’s ability to continue as a going concern. 41. or sell assets to reduce debt. The Company monitors capital on the basis of the debt-to-equity ratio as follows: Unit 2014 Total debt Total equity and total debt Debt-to-equity ratio Rupees Rupees % age 11.497.3. The Company manages the capital structure in the context of economic conditions and the risk characteristics of the underlying assets.5 Fair value of financial instruments Fair value is the amount for which an asset could be exchanged or liability be settled between knowledgeable willing parties in an arm’s length transaction. adjust the amount of dividends paid to shareholders. which the Company defines as operating income divided by total capital employed. The Board of Directors monitors the return on capital employed.910 17. for example. The Company believes that it is not exposed to other price risk.058.Notes to the Financial Statements For the year ended 30 September 2014 41.569. long term loans. 80 | JDW Sugar Mills Limited .322 66% 2013 6. Equity price risk arises from available-for-sale equity securities held. The Board of Directors also monitors the level of dividends to ordinary shareholders. In order to maintain or adjust the capital structure.809.703.6 Capital management a) b) The Board’s policy is to maintain an efficient capital base so as to maintain investor. The increase in the debt-to-equity ratio in 2014 is due to the increase in redeemable capital and long term loan availed during the year. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the Board.529 54% Total debt comprises of redeemable capital. so that it can continue to provide returns for shareholders and benefits for other stakeholders.4 Other price risk Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk).3.722.3.

403.730.000 19. Directors of the Company.877. other related companies.050 457.320 232.000 – 750.581 30.000.820 489.2 Associated Companies Short term advance received .492.423.573 4.114.000 88.net Long term loans received Markup income on: .588.000 80.588 Key management personnel Advances given Advances recovered Consultancy services Annual Report 2014 | 81 . Other significant transactions with related parties are as follows: 2014 2013 Relationship Nature of transactions Rupees Rupees 42.293 – – Sale of sugar Investment in shares Advances given Markup income Payment against purchase of Aircraft Sale of molasses Rent of land given on lease Rent of land acquired on lease 156.000 563.860.940.393.long term .444.780.990.000 1.145 74.4 Post employment benefit plans 42. The Company in the normal course of business carries out transactions with various related parties.428 - – 2.548.726 956.210 52.100.362.652 20.Notes to the Financial Statements For the year ended 30 September 2014 42 TRANSACTIONS WITH RELATED PARTIES The related parties comprise subsidiary company.005.360 279.264 3.short term Sugarcane supplies Purchase of bagasse 671.1 Subsidiary 42.747 4.915 101.628.000.000 82.836.689.471.076 145.000 1.000 106.400 150.236 125.198 362.779 3.000 – 42.484.356.000.000.750 861.957. key management personnel and post employment benefit plans.432. associated companies.395 16.086.000. Amounts due from and due to related parties are shown under respective notes to the accounts.111.008.148.5 Provident fund contribution 2.3 Other Related Parties Payment with respect to net assets acquired Purchase of sugarcane 42.899.

.000 1.665.664 2013 MWH Based on hours MWH 233. Corporate Sugar Cane Farms Land Crop under cultivation 2014 2013 Area Acres Area Acres Punjab & Sindh Punjab & Sindh 24.789.016 64.896 4.000 1.460.516 1.074.650 134.246.664 2.020.535.202 58.746 2.768 115 162.969 .200.000 120 1.460.481.667 15.421 1.866.189 - - - - Under utilization of available capacity has resulted because plant started its commercial operations on 12 June 2014.671 RESTRICTION ON TITLE AND ASSETS PLEDGED AS SECURITY Mortgages and charges Hypothecation of all present and future assets and properties Mortgage over land and building Pledge Finished goods 82 | JDW Sugar Mills Limited - 44 .760 2. 2014 Rupees 2013 Rupees 10.143.033.913.718 Crushing capacity 120 Sugarcane crushed 139 Sugar production 2014 Co .020.000 2.668 1.269 129 128.583.631 133 312.822 289.433.Notes to the Financial Statements For the year ended 30 September 2014 2014 2013 Days Tonnes 43 CAPACITY AND PRODUCTION Unit I Days Tonnes Crushing capacity 120 Sugarcane crushed 149 Sugar production Unit II 2.000 19.961.395 7.234 3.000 20.072.504.000 120 1.658 114.000 120 2.560.147 Crushing capacity 120 Sugarcane crushed 145 Sugar production Unit III 1.186.320.007.Generation Power Unit II Installed capacity Utilized capacity Energy delivered Based on hours 8.

Notes to the Financial Statements For the year ended 30 September 2014 45 PROVIDENT FUND TRUST The following information is based on latest audited financial statements of Provident Fund Trust.843.534 3.00 per share).244 48 DATE OF AUTHORIZATION FOR ISSUE These financial statements were authorized for issue on 03 January 2015 by the Board of Directors of the Company.487 313.371 Cost of investments made Rupees 285. 46 NUMBER OF EMPLOYEES The average and total number of employees are as follows: 2014 2013 Average number of employees during the year 4.53% 80.444.42% 76.00% The investments of the Provident Fund Trust are in compliance with the provision of section 227 of the Companies Ordinance. Annual Report 2014 | 83 .015.188.16% Fair value of investment Rupees 289.850 100.58% 289.00% 278.938 100.550 229.104.071. 5.261.104.70% 79.435 251.166.166.886 47 Total number of employees as at 30 September 3. 6. EVENTS AFTER THE BALANCE SHEET DATE The Board of Directors of the Company has proposed a final cash dividend for the year ended 30 September 2014 of Rs.573 3. 30 June Unit 2014 30 June 2013 (Restated) Size of fund .total assets Rupees 358.30% 65.850 278.343. 1984 and the rules formulated for this purpose.00 per share (2013: Rs.938 The breakup of fair value of investments is as follows: 30 June 2014 Rupees Percentage 30 June 2013 Rupees (Restated) Percentage Shares in listed companies Cash at bank 59.232 213.706 23.300 20.151.201 Percentage of investments made Percentage 79.

Statement under section 241(2) of the Companies Ordinance. 03 January 2015 Lahore 84 | JDW Sugar Mills Limited Director Director . 1984. 50 GENERAL These financial statements have been signed by two Directors instead of Chief Executive Officer and one Director. as the Chief Executive Officer is for the time being not in Pakistan.Notes to the Financial Statements For the year ended 30 September 2014 49 FIGURES Figures have been rounded off to the nearest rupee.

Consolidated Financial Statements Annual Report 2014 | 85 .

financial position and financial results of the group and are in conformity with approved accounting standards as applicable in Pakistan.027 957 961 368 16. 2014.08 6. in Million) Gross Sales 39. The Subsidiary Company was incorporated in Pakistan on July 14. On behalf of the Board of Directors Ijaz Ahmed Lahore Director 03 January 2015 86 | JDW Group .215 36. liabilities. 2010 as a Private Limited Company under the Companies Ordinance 1984. The consolidated financial results are as follows: 30 September 30 September 2014 2013 (Rs.886 34.767 3. The Principal activity of Subsidiary Company is production and sale of crystalline sugar.122 36.16 Net Sales Profit after Tax Earnings Per Share Directors have given their detailed report of affairs of the Holding Company as well as Subsidiary Company in Directors’ report to the shareholders of Holding Company.Directors’ Report on Consolidated Financial Statements I am pleased to present the Consolidated Audited Financial Statements of JDW Sugar Mills Limited (the “Holding Company”) and its wholly owned Subsidiary Company Deharki Sugar Mills (Private) Limited (“the Group”) for the year ended on September 30. 2014 give a true and fair view of the assets.066 Profit before Tax 1. It is being confirmed that to the best of our knowledge. the consolidated financial statements for the year ended September 30.423 Operating Profit 3.

KPMG Taseer Hadi & Co.
Chartered Accountants
2nd Floor,
Servis House,
2-Main Gulberg Jail Road,
Lahore, Pakistan.

Telephone + 92 (42) 3579 0901-6
Fax
+ 92 (42) 3579 0907
Internet www.kpmg.com.pk

Auditors’ Report to the Members
We have audited the annexed consolidated financial statements comprising consolidated balance sheet of JDW Sugar
Mills Limited (“the Holding Company”) and its subsidiary company Deharki Sugar Mills (Private) Limited (“the Group”)
as at 30 September 2014 and the related consolidated profit and loss account, consolidated statement of comprehensive
income, consolidated cash flow statement and consolidated statement of changes in equity together with the notes forming
part thereof, for the year then ended. We have also expressed separate opinion on the financial statements of the Holding
Company. The financial statements of the subsidiary company, Deharki Sugar Mills (Private) Limited was audited by other
firm of auditors whose report has been furnished to us and our opinion, in so far as it relates to the amounts included for
such Company, is based solely on the report of such other auditor. These financial statements are the responsibility of the
Holding Company’s management. Our responsibility is to express an opinion on these financial statements based on our
audit.
Our audit was conducted in accordance with the International Standards on Auditing and accordingly included such tests
of accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements present fairly the financial position of the Holding Company and its
subsidiary company as at 30 September 2014 and the results of their operations for the year then ended.

KPMG Taseer Hadi & Co.

03 January 2015
Lahore

Chartered Accountants
(Kamran Iqbal Yousafi)

KPMG Taseer Hadi & Co., a Partnership firm registered in Pakistan
and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative
(‘‘KPMG International’’), a Swiss entity

Annual Report 2014 | 87

Consolidated Balance Sheet

Note

SHARE CAPITAL AND RESERVES

2014
Rupees

2013
Rupees

Share capital
6
Reserves

597,766,610
4,821,560,088

597,766,610
4,343,938,419

Non-controlling interest

5,419,326,698
240,849

4,941,705,029
192,155

NON CURRENT LIABILITIES

Redeemable capital - secured
7
Long term loans - secured
8
Liabilities against assets subject to finance lease
9
Deferred taxation
10
Staff retirement benefits - gratuity
11

5,419,567,547

4,941,897,184

305,555,555
8,563,542,666
926,722,054
1,571,426,934
68,256,699

222,243,482
4,292,190,749
642,013,396
1,555,721,583
44,694,419

11,435,503,908

6,756,863,629

10,496,978,844
2,130,032,413
5,168,489,507
530,179,913
74,527,846

7,692,553,702
1,675,060,118
3,043,707,130
325,116,640
86,520,545

18,400,208,523

CONTINGENCIES AND COMMITMENTS 16


35,255,279,978

The attached notes from 1 to 51 form an integral part of these consolidated financial statements.

12,822,958,135

CURRENT LIABILITIES

Short term borrowings - secured
12
Current portion of non current liabilities
13
Trade and other payables
14
Interest and markup accrued
15
Provision for taxation

03 January 2015
Lahore
88 | JDW Group

24,521,718,948

As at 30 September 2014

Note

ASSETS
NON CURRENT ASSETS

Property, plant and equipment
Biological assets
Investment property
Intangible assets
Investments
Long term advances
Long term deposits

2014
Rupees

2013
Rupees

17
18
19
20
21
22
23

20,434,779,307
10,471,822
173,026,930
627,111,582
1,524,478,075
58,000,000
131,897,041

13,387,162,405

693,855,251
608,742,144
239,732,936
83,000,000
104,004,307

CURRENT ASSETS

Biological assets
18
Stores, spares and loose tools
24
Stock in trade
25
Trade debts - unsecured
26
Advances, deposits, prepayments and other receivables
27
Tax refund due from Government
Cash and bank balances
28
Non current asset held for sale
29

22,959,764,757

15,116,497,043

1,681,515,961
1,327,727,124
5,970,317,798
671,430,276
2,021,991,366
513,768,880
108,763,816


787,936,802
3,777,690,212
655,358,234
3,602,014,748
284,457,186
77,764,723
220,000,000

12,295,515,221

9,405,221,905

35,255,279,978

24,521,718,948

Director Director
Annual Report 2014 | 89

611.986.627) (1.422.212.035.328.385) Finance cost 36 (2.219 956.233.701) (621.247.951.965 37 (66.216) (1. 03 January 2015 Lahore 90 | JDW Group Director Director .464.182.363) (2.742) Selling expenses 33 (130.589.349 367.665) 3.978.809 36.770.214. Sales Tax and others (2.963 Administrative expenses 32 (591.951.792.222) The attached notes from 1 to 51 form an integral part of these consolidated financial statements.650.890.027.326) (178.403 Non controlling interest 48.181 Equity holders of the Holding Company 960.Consolidated Profit and Loss Account For the year ended 30 September 2014 Note 2014 Rupees 2013 Rupees Gross sales 39.278.basic and diluted 38 (56.883.949.213 Federal Exicse Duty.784) Profit after taxation 960.067) Gross profit 4.605.045.08 6.375.519.208.16 Share of loss of associated companies .124.149.953) (1.065.348.533 170.679) 3.568.334) Other income 34 340.993) Operating profit 3.470.655 368.284 Other expenses 35 (83.699.net of taxation Taxation Attributable to: Earnings per share .829.585) Net sales 30 36.628 (30.453.902.349 367.571) Profit before taxation 1.526 34.536.862.122.554.181 16.599 (381.403.870) (588.986.159.397 (767.833.737.324.694 960.568.042.886.891) (316.767.593 Cost of sales 31 (32.361) (279.338.950.518.748) 21 (203.

222) 367.883.349 367.061.181 368.651 367.986.042.651 (56.834.067.403 Attributable to: Equity holders of the Holding Company 955.594) – Share of other comprehensive income of associated Company 4.446 – (5.883.951.986.986.957 Non controlling interest 48.181 Other comprehensive income Items that will not be reclassified to profit and loss account: Remeasurement of defined benefit liability (13. 03 January 2015 Lahore Director Director Annual Report 2014 | 91 .694 955.698) – Total comprehensive income for the year 955.625.Consolidated Statement of Comprehensive Income For the year ended 30 September 2014 Profit after taxation 2014 Rupees 2013 Rupees 960.496.450 – Related tax 4.181 The attached notes from 1 to 51 form an integral part of these consolidated financial statements.

716) Net cash generated from / (used in) financing activities Net increase in cash and cash equivalents 30.122.602 Redemption of term finance certificates (474.886) Finance cost paid (2.723 Cash and cash equivalents at the end of the year 28 The attached notes from 1 to 51 form an integral part of these consolidated financial statements.702 5.991) CASH FLOW FROM FINANCING ACTIVITIES Short term borrowings .061) Dividend paid (473.901.764.304.000 100.184.195.934.975) Workers’ profit participation fund paid (83.778) Capital expenditure (5.130 Income tax paid (306.480) 4.559.649 2.458) Long term advances 16.881 Cash and cash equivalents at the beginning of the year 77.608 (1.020.000 (86.396.645.480 Proceeds from issuance of term finance certificates 166.482.002.000) Proceeds realized from sale of property.000 Net cash used in investing activities (8.323) Lease rentals paid (451.888.net 2.471.282.005.723 53.828.458) (488.212) (190.533) (856.286.771.Consolidated Cash Flow Statement For the year ended 30 September 2014 Note 2014 Rupees 2013 Rupees CASH FLOW FROM OPERATING ACTIVITIES Cash generated from operations 39 4.609.370.000.163.000.624.244.655) (33.net (97.354.448.335.911) (43.878.842 108.093 24.439.764.399) (355. 03 January 2015 Lahore 92 | JDW Group Director Director .042.067.513.516) (1.804.699 25.030.728.398 333.819.812.999.393.397.888.923.167.428) . (7.492) Net cash generated from operations 4.680.036. acquired from JK Farming Systems Limited Investment property Proceeds from sale of investment in JK Dairies (Private) Limited 120.444.800 5.816 77.098) (267.600.027 Payment with respect to net assets (2.000.711) Long term loans availed during the year 5.142 (1.994.673.229.899.848) (678.877.763.253.215.581.881.990.000.365.425.938) (57.041) .217) (3.754.638 CASH FLOW FROM INVESTING ACTIVITIES Advances to related parties (542.360) (422. plant and equipment 312.359) (459.015.478) Staff retirement benefits paid (70.841) Long term deposits .258.337) Long term loans repaid during the year (1.017) (2.180.

222) – – 248.00 per share Total comprehensive income for the year Transaction with owners of the Company: Balance as at 30 September 2012 Rupees Rupees Rupees Rupees Rupees Rupees Rupees Sub Non controlling Total total Total interest equity Attributable to equity holders of the Holding Company Reserves Capital Revenue Consolidated Statement of Changes in Equity For the year ended 30 September 2014 Annual Report 2014 | 93 .610 – – Final dividend for the year ended 2013 @ Rs.567.928 3.316.042.042.377 4.957 960.570.322) 4.849 5.553.966) 955.403 – (358.655 (5.766.243.560.343.766.553.659. 902.547 48.net of tax Balance as at 30 September 2013 – (358.213.553.966) 955.969 Director Director 678.938.181 367.029 368. 6.592 367.042.181 – (358.403 – 955.067.698) (478.705. 2.403 368.834.334.698) (478.982 4.941.403 368.00 per share Transactions with owners of the Company: 368.143.665.213.184 (56.986.067.834.966) (119.928 4.403 368.621.553.160 – – – – – (358.326.957 960.054 – 597.419 4.698) (478.555.659.088 5.656.659.042.966) 4.067.957 960.951.883.067.Share Share Accumulated capital premium profit – – – – Total comprehensive income for the year Profit for the year ended 30 September 2014 Other comprehensive loss for the year ended 30 September 2014 .00 per share Interim dividend paid for the period ended 30 June 2014 @ Rs.288) (358.659.659.655 (5.288) (358.316.659.322.651 960.419.net of tax Balance as at 30 September 2014 03 January 2015 Lahore The attached notes from 1 to 51 form an integral part of these consolidated financial statements.042.698) (478.316.902.349 (5.902.932.834.766.941.213.659.213.403 – (358.932.491 – – 597.659. 6.419.928 3.322) 4.897.986.966) (119.322) 678. 597.821.966) (119.610 – – – – Profit for the year ended 30 September 2013 Other comprehensive income for the year ended 30 September 2013 .694 – – – – 192.966) – (119.042.322) 240.288) 368.655 (5.698 955.239.288) (358.966) 678.155 4.222) (56.694 48.610 Final dividend for the year ended 2012 @ Rs.

Lahore.000 126.941.584. 1984 and was subsequently converted into a public limited company on 24 August 1991. Sindh.941.60 MW power plant at Unit-II achieved Commercial Operations Date (“COD”) on 12 June 2014 while the 26. the Group’s Co-Generation Power Plants are the first to materialize under National Electric Power Regulatory Authority’s (“NEPRA”) upfront bagasse tariff. 1984.239.942.358. duly determined by independent valuer and management. JDW Sugar Mills Limited was incorporated in Pakistan on 31 May 1990 as a private limited company under the Companies Ordinance.279 Current assets 1.000.345. The principal activity of the Holding Company is production and sale of crystalline sugar.283.216. electricity and managing corporate farms.726.155 Total assets 4. Further.046.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 1 STATUS AND NATURE OF BUSINESS The Group comprises of 1. Fair values. Lahore Cantonment.090 Purchase consideration 94 | JDW Group – .474. The 26. Shares of the Holding Company are listed on the Karachi and Lahore Stock Exchanges.712 Stores.4 - JDW Sugar Mills Limited (“the Holding Company”).443. Deharki Sugar Mills (Private) Limited was incorporated in Pakistan on 14 July 2010 as a Private Limited Company under the Companies Ordinance.397. The assets and liabilities have been transferred to the Holding Company at fair values to comply with the requirements of Business Combinations “(IFRS-3)”. District Rahim Yar Khan. Lahore Cantonment. There were no changes in ownership interest in Subsidiary Company during the year. accrued and other liabilities (225.785. Lahore.Abid Majeed Road. The Group has executed Energy Purchase Agreements (“EPA”) on 20 March 2014 with the Central Power Purchasing Agency (“CPPA”) of the National Transmission & Despatch Company Limited (“NTDC”) relating to its Bagasse Based Co-Generation Power Plants (“Co-Generation Power”) at JDW Unit-II. deposits.3 1. and - Deharki Sugar Mills (Private) Limited (“the Subsidiary Company”). The registered office of the Subsidiary Company is situated at 17-Abid Majeed Road.867 Current liabilities Trade creditors. prepayments and other receivables 276.025 2. Sadiqabad.219.433 20. of the assets and liabilities transferred are as follows: Non current assets Property.2 1. spares and loose tools Biological assets Advances. The Group has acquired Corporate Sugarcane Farms of JK Farming Systems Limited (“a related party”) (“JKFS”) on 20 November 2013. Punjab and JDW Unit-III. plant and equipment Fair value as at 20 Nov 2013 Rupees Operating fixed assets Capital work in progress 1. The principal activity of the Subsidiary Company is production and sale of crystalline sugar. The registered office of the Holding Company is situated at 17 .1 1.83 MW power plant at Unit-III achieved COD on 03 October 2014 after completing all independent testing and certification requirements and supplying renewable electricity to the national grid.412. District Ghotki.374 3.572.777) Net assets transferred 4.358.781 2.408 Intangible asset 1.870.090 4.

the Group determines the net interest expense / (income) for the period on the net defined benefit liability / (asset) by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability / (asset) at the beginning of the annual period. Statement of compliance These consolidated financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of Companies Ordinance. The Holding Company shall pay mark up at the rate of average borrowing cost of the Holding Company on the outstanding amount of purchase consideration from 20 November 2013 until payment of full purchase consideration. BASIS OF PREPARATION 2. Change in accounting policy As a result of amendment to IAS 19 Employee Benefits (amended 2011). The accounting policies used by the Group’s associates in preparation of their respective financial statements are also consistent with that of the Holding Company. Details regarding the Group’s investment in associates are given in note 21 to these consolidated financial statements. Details regarding the financial information of associates used in the preparation of these consolidated financial statements are given in note 21 to these consolidated financial statements. the requirements of Companies Ordinance. The change in accounting policy has been applied prospectively.5 2 The purchase consideration is to be paid in one or more instalments. Wherever. The accounting policies used by the Subsidiary Company in preparation of its financial statements are consistent with that of the Holding Company. except for the amounts reflected in the cash flow statement. Annual Report 2014 | 95 .Notes to the Consolidated Financial Statements For the year ended 30 September 2014 1.4 2.1 2. taking into account any changes in the net defined benefit liability / (asset) during the period as a result of contributions and benefit payments. the Group has changed its accounting policy with respect to the basis for determining the income or expense related to its postemployment defined benefit plans. being considered immaterial. All changes in the present value of defined benefit obligation are now recognized in the statement of comprehensive income and the past service costs are recognized in the profit and loss account. Functional and presentation currency These consolidated financial statements are presented in Pakistani Rupees which is also the Group’s functional currency.2 2. In these financial statements. immediately in the period in which they occur. the requirements of the Companies Ordinance. Under IAS 19 (2011). 1984. all transactions have been accounted for on accrual basis. Approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) issued by the International Standard Board as are notified under the provisions of the Companies Ordinance. 1984 or directives issued by the Securities and Exchange Commission of Pakistan differ with the requirements of these standards. All financial information presented in Pakistani Rupees has been rounded to the nearest rupee.5 These consolidated financial statements have been prepared from the information available in the audited separate financial statements of the Holding Company for the year ended 30 September 2014 and the audited financial statements of Deharki Sugar Mills (Private) Limited for the year ended 30 September 2014.3 2. Basis of measurement These consolidated financial statements have been prepared under the historical cost convention except for biological assets which are measured at fair value less estimated point of sale costs and recognition of certain employee retirement benefits at present value. 1984. 1984 or the requirements of the said directives shall prevail.

the result of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The areas where various assumptions and estimates are significant to Group’s financial statements or where judgments were exercised in application of accounting policies are as follows: - Retirement and other benefits - Provision for taxation - Residual values and useful lives of depreciable assets - Provisions and contingencies - Biological assets 3. not disclosed in these consolidated financial statements. The amendments address inconsistencies in current practice when applying the offsetting criteria in IAS 32 Financial Instruments: Presentation.987) (34.377 56.845 (Decrease) in net profit (18. Actual results may differ from these estimates.041 64.111.987 34. Revision to accounting estimates are recognized in the period in which the estimate is revised if the revision effects only that period. 96 | JDW Group . The amendments are not likely to have an impact on the Group’s financial statements.111. therefore.280. The following standards. However.377) (56. The interpretation is not likely to have an impact on the Group’s financial statements. or in the period of revision and future periods if the revision affects both current and future periods. - Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) – (effective for annual periods beginning on or after 1 January 2014).424) (46.” Change in estimate has no impact on current year depreciation expense and profit and loss respectively.424 46. Change in Accounting Estimate and Errors. The amendments clarify the meaning of ‘currently has a legally enforceable right of set-off’. The estimates and underlying assumptions are reviewed on an ongoing basis.029. estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities.Levies ‘an Interpretation on the accounting for levies imposed by governments’ (effective for annual periods beginning on or after 1 January 2014). future outcome as a result of change in estimate is given below: 2015 2016 2017 2018 2019 (Rupees) (Rupees) (Rupees) (Rupees) (Rupees) Increase in depreciation 18.067. income and expenses.029.1 New and revised approved accounting standards. amendments and interpretations of approved accounting standards will be effective for accounting periods beginning on or after 01 July 2014: - IFRIC 21. interpretations and amendments thereto There were certain new standards and amendments to the approved accounting standards which became effective during the year but are considered not to be relevant or have any significant effect on the Group’s operations except as disclosed in note 2. The Interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy.1 Effectively from 20 November 2013. and that some gross settlement systems may be considered equivalent to net settlement.884.041) (64.884. The change in accounting estimate has been recognized prospectively in the financial statements in accordance with the requirement of IAS 8 “Accounting Policy.845) 4 SIGNIFICANT ACCOUNTING POLICIES 4.067.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 3 USE OF ESTIMATES AND JUDGMENTS The preparation of consolidated financial statements in conformity with approved accounting standards requires management to make judgments.4 and are. the Group has changed its depreciation method from reducing balance method to straight-line method on certain agri related assets to bring it in line with the method used for charging depreciation on the assets of Corporate Sugarcane Farms. The estimates and associated assumptions and judgments are based on historical experience and various other factors that are believed to be reasonable under the circumstances.280.

a Group can elect to measure bearer plants at cost. The new cycle of improvements contain amendments to the following standards: IFRS 2 ‘Share-based Payment’. IFRS 3 ‘Business Combinations’. bearer plants are accounted for in the same way as selfconstructed items of property. The amendments introduce a relief that will reduce the complexity and burden of accounting for certain contributions from employees or third parties. Further IFRS 3 has also been amended to clarify that the standard does not apply to the accounting for the formation of all types of joint arrangements including joint operations in the financial statements of the joint arrangement themselves. Plant and Equipment for measurement and disclosure purposes. However. Bearer plants are now in the scope of IAS 16 Property. the produce growing on bearer plants will continue to be measured at fair value less costs to sell under IAS 41 Agriculture. to provide relief from discontinuing an existing hedging relationship when a novation that was not contemplated in the original hedging documentation meets specific criteria. The practical expedient addresses an issue that arose when amendments were made in 2011 to the previous pension accounting requirements. or when the intangible asset is expressed as a measure of revenue. The amendments are relevant only to defined benefit plans that involve contributions from employees or third parties meeting certain criteria. Annual Improvements 2010-2012 and 2011-2013 cycles (most amendments will apply prospectively for annual period beginning on or after 01 October 2014). Before maturity. The amendments are not likely to have an impact on the Group’s financial statements. and has a remote likelihood of being sold as agricultural produce. These narrow-scope amendments to IAS 36 Impairment of Assets address the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal. Agriculture: Bearer Plants [Amendment to IAS 16 and IAS 41] (effective for annual periods beginning on or after 1 January 2016). plant and equipment during construction.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 - Amendment to IAS 36 “Impairment of Assets” Recoverable Amount Disclosures for Non-Financial Assets (effective for annual periods beginning on or after 1 January 2014). These amendments clarify the classification and measurement of contingent consideration in a business combination. Amendments to IAS 38 Intangible Assets and IAS 16 Property. A bearer plant is a plant that: is used in the supply of agricultural produce. Amendments to IAS 16 ‘Property. plant and equipment’ and IAS 38 ‘Intangible Assets’. The amendment also clarifies both: how to distinguish between a market condition and a non-market performance condition and the basis on which a performance condition can be differentiated from a vesting condition. is expected to bear produce for more than one period. - - - - - - - Amendments to IAS 19 “Employee Benefits” Employee contributions – a practical approach (effective for annual periods beginning on or after 1 July 2014). The amendments add a limited exception to IAS 39. Plant and Equipment (effective for annual periods beginning on or after 1 January 2016) introduce severe restrictions on the use of revenue-based amortization for intangible assets and explicitly state that revenue-based methods of depreciation cannot be used for property. The amendments clarify the requirements of the revaluation model in IAS 16 and IAS 38. - Amendments to IAS 39 “Financial Instruments: Recognition and Measurement” Continuing hedge accounting after derivative novation (effective for annual periods beginning on or after 1 January 2014). The rebuttable presumption that the use of revenuebased amortization methods for intangible assets is inappropriate can be overcome only when revenue and the consumption of the economic benefits of the intangible asset are ‘highly correlated’. recognizing that the restatement of accumulated depreciation (amortization) is not always proportionate to the change in the gross carrying amount of the asset. Therefore. IFRS 2 has been amended to clarify the definition of ‘vesting condition’ by separately defining ‘performance condition’ and ‘service condition’. This change aligns the disclosure requirements with those for segment liabilities. Annual Report 2014 | 97 . IFRS 8 ‘Operating Segments’ has been amended to explicitly require the disclosure of judgments made by management in applying the aggregation criteria. plant and equipment. In addition this amendment clarifies that a reconciliation of the total of the reportable segment’s assets to the entity assets is required only if this information is regularly provided to the entity’s chief operating decision maker.

Depreciation on additions is charged from the date when the asset is available for use. IAS 40 has been amended to clarify that an entity should: assess whether an acquired property is an investment property under IAS 40 and perform a separate assessment under IFRS 3 to determine whether the acquisition of the investment property constitutes a business combination. are included in liabilities against assets subject to finance lease as referred to in note 9. Property. Depreciation methods. except freehold land are stated at cost less accumulated depreciation and any identified impairment loss. while no depreciation is charged on the date of disposal. residual values and useful lives of assets are reviewed at each financial year end. and adjusted if impact on depreciation is significant. assets are written down to their recoverable amounts and the resulting impairment loss is recognized in income currently. The liabilities are classified as current and non-current depending upon the timing of the payment. Cost includes direct cost and related overheads. plant and equipment may be impaired. Major repairs and improvements are capitalized. less accumulated depreciation and impairment loss. Where carrying values exceed the respective recoverable amount. The Group assesses at each balance sheet date whether there is any indication that property. Leased 98 | JDW Group Leases where the Group has substantially all the risks and rewards of ownership are classified as finance leases. as appropriate. residual values and useful lives of the assets are reviewed at each financial year end. The interest element of the rental is charged to profit over the lease term. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset. the depreciation charge is adjusted in the future periods to allocate the asset’s revised carrying amount over its estimated useful life. if any. Where an impairment loss is recognized. plant and equipment Owned 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 recognized as an income or expense. All other repair and maintenance costs are charged to income during the period in which they are incurred.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 - - 4. either directly or through a group entity. Each lease payment is allocated between the liability and finance costs so as to achieve a constant rate on the balance outstanding. and adjusted if impact on depreciation is significant.1. If such indication exists. . At inception. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. IAS 40 ‘Investment Property’.2 IAS 24 ‘Related Party Disclosure’. The related rental obligations. finance leases are capitalized at the lower of present value of minimum lease payments under the lease agreements and the fair value of the assets. Depreciation methods. net of finance costs. only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Depreciation of leased assets is charged to profit and loss account.1 except that straight-line method is used for corporate farms related assets. Freehold land and capital work in progress are stated at cost less any identified impairment loss. Assets acquired under a finance lease are depreciated over the estimated useful life of the assets on reducing balance method at the rates disclosed in note 17. the carrying amounts of such assets are reviewed to assess whether they are recorded in excess of their recoverable amount. plant and equipment. Depreciation is charged to profit and loss account on reducing balance method so as to write off the written down value of assets over their estimated useful lives at rates disclosed in note 17. The definition of related party is extended to include a management entity that provides key management personnel services to the reporting entity.

are generally measured at lower of their carrying amount and fair value less costs to sell. All other costs are charged to profit and loss account. 4. employee benefit assets. financial assets. except that no loss is allocated to inventories.7 Molasses and Bagasse .Notes to the Consolidated Financial Statements For the year ended 30 September 2014 4. and then to remaining assets and liabilities on a pro rata basis. with changes in the fair value during the period recognized in the profit and loss account. Immature biological assets have not yet reached that stage. These assets are measured at fair value less estimated point of sale costs. deferred tax assets. Stock in trade These are valued at the lower of weighted average cost and net realizable value except for stock in transit. Costs incurred in plantation and management of biological assets are capitalized as part of the asset. Fair value is deemed to approximate the cost when little biological transformation has taken place or the impact of the transformation on price is not expected to be material. are classified as held for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use. Stores. which is valued at cost comprising invoice value and related expenses incurred thereon up to the balance sheet date. Biological assets Biological assets comprise of crop in field. Once classified as held for sale.3 Assets held for sale Non-current assets. Obsolete and used items are recorded at nil value.4 4. spares and loose tools These are valued at lower of weighted average cost and net realizable value except for items in transit. which are valued at cost comprising invoice value and related expenses incurred thereon up to the balance sheet date.6 4. The fair value is determined using the present value of expected net cash-flow from the asset based on significant assumptions stated in note 18.4. or disposal groups comprising assets and liabilities. investment property or biological assets. Those expected to mature before 12 months are included in current assets. Biological assets that are expected to mature after more than a period of 12 months are classified in long term assets. Bad debts are written off when identified. Cost is determined as follows: Raw materials at weighted average cost Work-in-process and finished goods at lower of weighted average cost plus related manufacturing expenses and net realizable value net realizable value 4. Annual Report 2014 | 99 . intangible assets and property. and any equity-accounted investee is no longer equity accounted. plant and equipment are no longer amortized or depreciated.by products Net realizable value signifies the estimated selling price in the ordinary course of business less other costs necessary to be incurred to make the sale. Mature biological assets are those that have attained harvestable specifications. Impairment losses on initial classification as held-for-sale or held-for-distribution and subsequent gains and losses on remeasurement are recognized in profit or loss. Biological assets are categorized as mature or immature. Trade debts Trade debts are carried at original invoice amount less an estimate made for doubtful debts based on a review of all outstanding amounts at the year end. which continue to be measured in accordance with the Group’s other accounting policies.5 Such assets. Any impairment loss on a disposal group is allocated first to goodwill. or disposal groups.

the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contribution to the plan.8. The fair value of the amount payable to employees in respect of Share Appreciation Rights (“SARs”). For share-based payment awards with non-vesting conditions. Following significant assumptions are used for valuation of the scheme: 2014 2013 Discount rate 13. the return on plan assets (excluding interest) and the effect of the asset ceiling (if. over the vesting period of the awards. When the calculation results in a potential asset for the Holding Company. Provision is made annually to cover current obligation under the scheme on the basis of actuarial valuation and is charged to consolidated profit and loss account. The grant-date fair value of equity-settled share-based payment awards granted to employees is generally recognized as an expense. Net interest expense and other expenses related to defined benefit plan is recognized in profit and loss account. . over the period during which the employees become unconditionally entitled to payment. which comprise actuarial gains and losses.8.2 Defined benefit plans The Holding Company also operates an unfunded gratuity scheme for eligible employees who have completed their qualifying period. such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met.3 Employees’ stock option scheme 100 | JDW Group The Holding Company operates an approved Employees’ stock option scheme. any excluding interest). taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments.50% 11% Expected average working life of employee 10 years 10 years Withdrawal rates Moderate Moderate The Holding Company’s net obligation in respect of defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods. To calculate the present value of economic benefits. 4.8 Employee benefits 4. is recognised as an expense with a corresponding increase in liabilities.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 4. the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.8. which are settled in cash. The liability is measured at each reporting date and at settlement date based on the fair value of the SARs. with a corresponding increase in equity. Equal monthly contribution is made both by the Holding Company and Subsidiary Company & their respective employees to the fund at the rate of 10% of basic salary. Remeasurement of the net defined benefit liability. 4. discounting that amount and deducting the fair value of any plan assets. The Holding Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Any changes in the liability are recognized in profit or loss. Calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. are recognized immediately in other comprehensive income.1 Defined contribution plan The Group operates approved contributory provident fund for its eligible employees. The most recent valuation was carried out as at 30 September 2014 using the “Projected unit credit method”. consideration is given to any applicable minimum funding requirements.50% 13% Expected increase in eligible pay 11.

A financial asset is classified as held for trading if acquired principally for the purpose of selling in the short term.11 Interest and rental income are recognized on accrual basis. Cash and cash equivalents 4. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.10 Deferred tax is accounted for using the balance sheet liability method in respect of all temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of the taxable profit. Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse based on tax rates that have been enacted or substantively enacted by the balance sheet date. rebates and exemptions. The charge for current tax also includes adjustments. Deferred 4. available-for-sale and held to maturity. Deferred tax is charged or credited in the profit and loss account.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 4.1(a) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets held for trading and financial assets designated upon initial recognition as at fair value through profit or loss.1 Financial assets The Group classifies its financial assets in the following categories: at fair value through profit or loss. Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer.9 Taxation Income tax expense comprises current and deferred tax. Annual Report 2014 | 101 . cash and cash equivalents comprise of cash in hand and bank balances. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary differences. For the purpose of cash flow statement.12 Provisions Provisions are recognized when the Group has a present legal or constructive obligation as a result of past event and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made.13 Financial instruments 4. if any. where considered necessary. The charge for current tax is calculated using prevailing tax rates or tax rates expected to apply to the profit for the year if enacted after taking into account tax credits. Revenue recognition Revenue from the sale of goods is measured at the fair value of the consideration received or receivable. Assets in this category are classified as current assets. loans and receivables. 4. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at the time of initial recognition. Revenue from the sale of electricity is recognized on transmission of electricity. to provision for tax made in previous years arising from assessments framed during the year for such years. Current Provision of current tax is based on the taxable income for the year determined in accordance with the prevailing law for taxation of income. unused tax losses and tax credits can be utilized. 4. Cash and cash equivalents are carried at cost in the balance sheet.13.13. except in the case of items credited or charged to equity in which case it is included in equity. Dividend income is recognized when the right of receipt is established. 4.

Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.e. Any gain or loss on derecognition of the financial assets and financial liabilities is taken to profit and loss account. Financial assets are derecognized when the Group looses control of the contractual rights that comprise the financial assets. Financial liabilities in this category are presented as current liabilities except for maturities greater than twelve months from the reporting date where these are presented as non-current liabilities.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 4. if any. cancelled or expires. where management has the intention and ability to hold till maturity are carried at amortized cost.3 Recognition and derecognition 102 | JDW Group All the financial assets and financial liabilities are recognized at the time when the Group becomes party to the contractual provisions of the instrument. Financial assets are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit and loss. Interest on available-for-sale securities calculated using effective interest method is recognized in the profit and loss account. Financial liabilities are derecognized when they are extinguished i.13. When securities classified as available-for-sale are sold or impaired. Available-forsale financial assets are classified as short term investments in the balance sheet.13. They are included in non-current assets unless management intends to dispose of the investments within twelve months from the balance sheet date.1(e) All financial assets are recognized at the time when the Group becomes a party to the contractual provisions of the instrument.1(b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. If the market for a financial asset is not active (for unlisted securities). 4.2 Financial liabilities Non-derivative financial liabilities that are not financial liabilities at fair value through profit or loss are classified as financial liabilities at amortized cost. 4. . The fair values of quoted investments are based on current prices. Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. Financial assets carried at fair value through profit and loss are initially recognized at fair value and transaction costs are expensed in the profit and loss account. The particular measurement methods adopted are disclosed in the individual policy statements associated with each instrument. the accumulated fair value adjustments recognized directly in equity are included in the profit and loss account as gains and losses from investment securities. The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or Group of financial assets is impaired.1(c) Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. 4. ‘Loans and receivables’ and ‘held to maturity’ investments are carried at amortized cost using effective interest rate method.e.1(d) Held to maturity Held to maturity are financial assets with fixed or determinable payments and fixed maturity. Dividends on available-for-sale equity instruments are recognized in the profit and loss account when the Group’s right to receive payments is established. 4.13. the date on which the Group commits to purchase or sell the asset. 4.13.13. Regular purchases and sales of investments are recognized at trade date i.13. when the obligation specified in the contract is discharged. the Group measures the investments at cost less impairment in value.

if no impairment loss had been recognized. Impairment loss in respect of a financial asset measured at fair value is determined by reference to that fair value. An impairment loss is reversed only to the extent that the financial asset’s carrying amount after the reversal does not exceed the carrying amount that would have been determined. and the present value of the estimated future cash flows discounted at the original effective interest rate. Borrowing cost Borrowing costs incurred on long term finances obtained for the construction of qualifying assets are capitalized up to the date the respective assets are available for the intended use.16 4. then the asset’s recoverable amount is estimated. 4. Transactions in foreign currencies are translated into rupees at the spot rate. Non-financial assets The carrying amount of the Group’s non-financial assets.14 Impairment Financial assets A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. Impairment losses recognized in respect of cash generating units are allocated to reduce the carrying amounts of the assets in a unit on a pro rata basis. net of depreciation and amortization. The remaining financial assets are assessed collectively in Groups that share similar credit risk characteristics. Impairment losses are recognized in profit or loss.17 4. if no impairment loss had been recognized. An impairment loss is recognized if the carrying amount of the assets or its cash generating unit exceeds its estimated recoverable amount.18 Financial assets and financial liabilities are set off and the net amount is reported in the financial statements when there is a legally enforceable right to set off the recognized amount and the Group intends either to settle on net basis. An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. or to realize the assets and to settle the liabilities simultaneously. All other borrowing costs are taken to the profit and loss account currently. Exchange differences are included in the profit and loss account. Annual Report 2014 | 103 . other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. Individually significant financial assets are tested for impairment on an individual basis. An impairment loss is reversed only to that extent that the asset’s carrying amount after the reversal does not exceed the carrying amount that would have been determined. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.15 Offsetting 4.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 4. The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less cost to sell. Foreign currency transactions All monetary assets and liabilities in foreign currencies are translated into rupees at exchange rates prevailing at the balance sheet date. net of amortization. If any such indication exists. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. All non-monetary items are translated into rupees at exchange rates prevailing on the date of transactions or on the date when fair values are determined. the estimated future cash flows are discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash generating unit. Trade and other payables 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. All impairment losses are recognized in profit or loss. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of the asset. In assessing value in use.

No adjustments are made to goodwill and no gain or loss is recognized in profit or loss. Transactions costs. If share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards) and relate to past services. plus at fair value. plus if the business combination is achieved in stages. If the contingent consideration is classified as equity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. When the excess is negative. c) Subsidiaries 104 | JDW Group Subsidiaries are entities controlled by the Group. the Group takes into consideration potential voting rights that are currently exercisable. a bargain purchase gain is recognized immediately in profit or loss. Such amounts are generally recognized in profit or loss. less the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed. Any contingent consideration payable is measured at fair value at the acquisition date. or at their proportionate share of the acquiree’s identifiable net assets. Adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. the Group elects to measure any non-controlling interests in the acquiree either: i) ii) the fair value of the consideration transferred. the fair value of the pre-existing equity interest in the acquiree. . subsequent changes in the fair value of the contingent consideration are recognized in profit or loss. then it is not remeasured and settlement is accounted for within equity. In assessing control. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as transactions with owners in their capacity as owners.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 4.19 Basis of consolidation a) Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date – i. that the Group incurs in connection with a business combination are expensed as incurred. Otherwise. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. when control is transferred to the Group. This determination is based on the market based value of the replacement awards compared with the market-based value of the acquiree’s awards and the extent to which the replacement awards relate to past and/or future service. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. other than those associated with the issue of debt or equity securities.e. which are generally at fair value. then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. The Group measures goodwill at the acquisition date as: i) ii) iii) iv) b) the recognized amount of any non-controlling interests in the acquiree. Non-controlling interest For each business combination.

the carrying amount of that investment (including any long-term interests that. are eliminated in preparing the consolidated financial statements. Subsequently that retained interest is accounted for as an equity-accounted investee or as an availablefor-sale financial asset depending on the level of influence retained.20 4. Annual Report 2014 | 105 . from the date that significant influence commences until the date it ceases. These investments are initially recognized at cost. in substance. An impairment loss is recognized if the carrying amount exceeds its recoverable amount and is charged to profit and loss account. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. The recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use. The Group transfers the revaluation surplus directly to retained earnings when it loses control of the subsidiary. Investment property Investment property is property held either to earn rental income or for capital appreciation or for both. If any such indication exists. and any unrealized income and expenses arising from intra-group transactions. Any surplus or deficit arising on the loss of control is recognized in profit or loss. assets are written down to their recoverable amounts and the resulting impairment loss is recognized in the profit and loss account for the year. but not for sale in ordinary course of business. subject to approval of the Board of Directors. then such interest is measured at fair value at the date that control is lost.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 d) Loss of control On the loss of control. Share of post acquisition profit and loss of associates is recognized in the profit and loss account. If the Group retains any interest in the previous subsidiary. if any. any noncontrolling interests and the other components of equity related to the subsidiary. When the Group’s share of losses exceeds its interest in an equity accounted investee. but only to the extent that there is no evidence of impairment. The Group’s investment property comprises of land which is carried at cost less identified impairment loss. Related party transactions The Group enters into transactions with related parties on an arm’s length basis except in extremely rare circumstances where. use in production or supply of goods or services as for administrative purpose. A reversal of impairment loss is recognized in the profit and loss account. after adjustments to align the accounting policies with those of the Group. it is in the interest of the Group to do so. the carrying amount of such assets are reviewed to assess whether they are recorded in excess of their recoverable amount. Unrealized losses are eliminated in the same way as unrealized gains. e) Transactions eliminated on consolidation Intra-group balances and transactions. The Group assesses at each balance sheet date whether there is any indication that investment property may be impaired. Distributions received from associates reduce the carrying amount of investment. If such indication exists. An impairment loss is reversed if there has been a change in estimates used to determine the recoverable amount but limited to the extent of initial cost of the investments.21 Entities in which the Group has significant influence but not control and which are neither subsidiaries nor joint ventures of the members of the Group are associates and are accounted for under the equity method of accounting (equity accounted investees). form part of the Group’s net investment in the associate) is reduced to nil and the recognition of further losses is discontinued. The carrying amount of investments in associates is reviewed at each balance sheet date to determine whether there is any indication of impairment. the Group derecognizes the assets and liabilities of the subsidiary. The consolidated financial statements include the associates’ share of profit or loss and movements in other comprehensive income. f) Associates 4. Where carrying value exceeds the respective recoverable amount. the recoverable amount of the investments is estimated which is higher of its value in use and its fair value less costs to sell. The gain or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and the carrying amounts of the asset is recognized as an income or expense.

000.23 Dividend Dividend distribution to shareholders is recognized as a liability in the period in which the dividends are approved.888.000. with effect of any changes in estimate being accounted for on a prospective basis.000) voting ordinary shares of Rs.000.482 7 REDEEMABLE CAPITAL .000.000.000 250. exceed 1% of the paid up capital of the Holding Company.000.360 597.244) 305. 1984 read with Public Companies’ Employee Stock Option Scheme Rules.000.000.888 Current maturity presented under current liabilities 13 416.000 (2013: 75. during 3 months prior to the date of grant of option and 3 months prior to date of exercise of option.000. The estimated useful life and amortization method is reviewed at the end of each annual reporting period.222.457.465. 4. under section 86 of the Companies Ordinance. 1 1 1 . 1 1 1 ) 724.000 750. 10 each fully paid in cash 27.610 597.222. 2001.766. Amortization on additions to intangible assets is charged from the date when an asset is put to use and on disposal up to the date of disposal.666. The Holding Company has neither awarded any option to its eligible employees during the year nor any option is outstanding as at the balance sheet date.000 250.2 Computer software Expenditure incurred to acquire computer software is capitalized as intangible asset and stated at cost less accumulated amortization and any identified impairment loss.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 4.236 88.309.666 – – 333.000) preference shares of Rs.725) voting ordinary shares of Rs.3 416.610 7.309. will be the lesser of 30% of the average of market price of shares quoted on Karachi Stock Exchange. Under the Scheme the Compensation Committee of the Holding Company shall recommend to the board as to which of the eligible employees are entitled to grant of option to subscribe for shares at an option price. Note 2014 2013 Rupees Rupees 6 SHARE CAPITAL 6. Intangible assets are amortized using straight-line method over its useful period. 10 each 6.000 (2013: 25. 4. The aggregate number of the shares for all options granted or to be granted under the Scheme to all eligible employees shall not.666 (1 1 1 . The Option shall be exercised during the applicable option period.145.602 302.243. 10 each fully paid voting bonus shares 321. subject to expiry of relevant minimum vesting period.555. 10 each 25.936) voting bonus shares of Rs.360 276.936 (2013: 27.666. subscribed and paid up capital 750.630. at any time.000.145.22.250 321.725 (2013: 32.2 Issued. unless otherwise determined by the Compensation Committee.22 Intangibles 4. Option price.000.457. Goodwill recognized is tested annually for impairment and carried at cost less accumulated impairment losses.000 32.726 (502. 5 EMPLOYEES’ STOCK OPTION The Holding Company operates a stock option scheme “the Scheme” approved by Securities and Exchange Commission of Pakistan “SECP” dated 16 July 2010.250 276.SECURED Privately Placed Term Finance Certificates .2 7.000 1.555 222.630.II Privately Placed Term Finance Certificates Privately Placed Sukkuk Certificates 106 | JDW Group .354.1 Goodwill Goodwill represents the excess of the cost of acquisition over the fair value of the net identifiable assets of the merged subsidiaries at the dates of acquisition.766.1 7.22.000.000 1.1 Authorized capital 75.

4 8.999.517.750.2 8.8 8.280 4.292. The effective markup rate charged during the year on the outstanding balance is three month KIBOR plus 125 bps per annum.000.000 450. 50.II Pak Oman Investment Company Limited Silk bank Limited The Bank of Punjab Dubai Islamic Bank Pakistan Limited Askari Bank Limited Faysal Bank Limited The Bank of Punjab 2014 Rupees 2013 Rupees 8.SECURED United Bank Limited .666 4.II These Privately Placed Term Finance Certificates .000.637.999.985.999 300. Trustee Security 7. plant and machinery of the Company and its subsidiary company and personal guarantees of Directors.13 8.14 188.6 249.000.888 500.013.Led Syndicated Loan MCB Bank Limited .860.1 8.618.169.000.I Saudi Pak Industrial & Agricultural Investment Company Limited .991 500. Privately Placed Term Finance Certificates These Privately Placed Term Finance Certificates (“PPTFCs”) have been redeemed during the year.000.12 8. In order to protect the interests of PPTFC .000 2.000. Privately Placed Sukkuk Certificates These Privately Placed Sukkuk Certificates (“PPSCs”) have been redeemed during the year.151 (884.000 each.3 8.190.423.Led Syndicated Loan Faysal Bank Limited Pak Brunei Investment Company Limited Saudi Pak Industrial & Agricultural Investment Company Limited .057.916.413.567.888.000 500.553.1 Privately Placed Term Finance Certificates .Notes to the Consolidated Financial Statements For the year ended 30 September 2014 7.667 299.Led Syndicated Loan Habib Bank Limited .II holders.II is payable quarterly at a rate of three months KIBOR plus 250 bps per annum.262 kanals.5 1. Note 8 LONG TERM LOANS . Principal repayment The principal redemption of PPTFC-II is structured to be in 18 equal quarterly instalments commencing after a grace period of six months starting from December 2013 and ending in March 2018. Rate of return The return on PPTFC .286) 5.000.000.000 8. all present and future fixed assets.II”) have been issued by way of private placements with a consortium of institutional investors to finance Balancing Modernization and Replacement (“BMR”) of plant and machinery of the Holding Company.563. The total issue comprises of 10 TFC’s having face value of Rs.988 450.952 (1.680 - Current maturity presented under current liabilities 13 10.051.000 8.3 This loan is secured by joint pari passu on land measuring 4.402) 8.605.000 48.999.000 300.000.000.000 168.2 7.10 8.680 1.000 622.9 8.177.480 532.975.II (“PPTFC .7 8. JS Bank Limited has been appointed as trustee under a trust deed dated 27 June 2013.000 700.11 8. The effective markup rate charged during the year on the outstanding balance is three month KIBOR plus 125 bps per annum.749 Annual Report 2014 | 107 .450 277.542.

all present and future fixed assets. Pakistan Kuwait Investment Company (Private) Limited.3 This loan is secured by joint pari passu charge on land measuring 4. plant and machinery of the Holding Company and its subsidiary company and personal guarantees of Directors. This loan is secured by joint pari passu charge on land measuring 4. subsequent to the year end this loan facility has been transferred from the Holding Company to its subsidiary on approval received from United Bank Limited (Agent Bank) dated 30 October 2014 . Security 8.Led Syndicated Loan This syndicated loan loan has been obtained from a consortium of banking companies comprises of Habib Bank Limited. 8. JS Bank Limited and Pakistan Kuwait Investment Company (Private) Limited. Principal repayment This loan is repayable in 22 unequal quarterly instalments after a grace period of eighteen months starting from June 2010 and ending in September 2015.262 kanals. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 225 bps per annum. plant and machinery of the Holding Company and its subsidiary company and personal guarantees of Directors. This loan was obtained to setup Unit-III of the Holding Company. Soneri Bank Limited and Meezan Bank Limited. The Holding Company obtained this loan to finance its subsidiary. Faysal Bank Limited. all present and future fixed assets.Led Syndicated Loan This syndicated loan has been obtained from a consortium of banking companies comprising of MCB Bank Limited. Habib Metropolitan Bank Limited.2 This loan is secured by joint pari passu charge on land measuring 4. JS Bank Limited and Meezan Bank Limited.1 United Bank Limited . The Bank of Punjab. Allied Bank Limited.262 kanals.4 108 | JDW Group Security Faysal Bank Limited This loan has been obtained from Faysal Bank Limited for reprofiling of balance sheet of the Holding Company. Faysal Bank Limited. Askari Bank Limited. The Bank of Punjab. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 200 bps per annum.Led Syndicated Loan This syndicated loan has been obtained from a consortium of banking companies comprising of United Bank Limited. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 250 bps per annum. Principal repayment The loan is repayable in 22 unequal quarterly instalments after a grace period of eighteen months starting from April 2015 and ending in July 2020.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 8. Security 8. The Holding Company obtained this loan to finance the Bagasse-Based Co-Generation Power Project.262 kanals. United Bank Limited. Principal repayment The loan is repayable in 20 unequal quarterly instalments after a grace period of eighteen months starting from March 2013 and ending in December 2017. plant and machinery of the Holding Company and its subsidiary company and personal guarantees of Directors. However. . MCB Bank Limited. MCB Bank Limited . all present and future fixed assets. Habib Bank Limited . Deharki Sugar Mills (Private) Limited.

II This loan has been obtained from Saudi Pak Industrial & Agricultural Investment Company Limited for reprofiling of balance sheet of the Holding Company.I This loan has been obtained from Saudi Pak Industrial & Agricultural Investment Company Limited for reprofiling of balance sheet of the Holding Company. Security Annual Report 2014 | 109 . plant and machinery of the Holding Company and its subsidiary company and personal guarantees of Directors. plant and machinery of the Holding Company and its subsidiary company and personal guarantees of Directors.262 kanals. Pak Brunei Investment Company Limited This loan was obtained to finance the capital expenditure of the Holding Company for setting up its subsidiary company. Security 8. all present and future fixed assets. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 250 bps per annum. Principal repayment This loan is repayable in 20 unequal quarterly instalments starting from February 2013 and ending in November 2017.262 kanals.262 kanals.7 Security Saudi Pak Industrial & Agricultural Investment Company Limited . This loan is secured by joint pari passu charge on land measuring 4. Saudi Pak Industrial & Agricultural Investment Company Limited .Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Principal repayment The loan is repayable in 10 unequal semi-annual instalments starting from December 2013 and ending in June 2018.6 This loan is secured by joint pari passu charge on land measuring 4. all present and future fixed assets. all present and future fixed assets. Principal repayment The loan is repayable in 18 equal quarterly instalments after a grace period of six months starting from March 2014 and ending in June 2018. plant and machinery of the Holding Company and its subsidiary company and personal guarantees of Directors. Security 8. This loan is secured by joint pari passu charge on land measuring 4. Rate of return The interest is payable quarterly at a rate of six months KIBOR plus 250 bps per annum.262 kanals. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 275 bps per annum. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 250 bps per annum.5 This loan is secured by joint pari passu charge on land measuring 4. Principal repayment The loan is repayable in 18 equal quarterly instalments after a grace period of six months starting from September 2014 and ending in December 2018. plant and machinery of the Holding Company and its subsidiary company and personal guarantees of Directors. all present and future fixed assets. 8.

309 kanals. subsequent to the year end ranking charge has been converted into joint pari passu charge. Rate of return The interest is payable quarterly at a rate of six months KIBOR plus 250 bps per annum. all present and future fixed assets. However. However.8 Pak Oman Investment Company Limited This loan has been obtained during the year to finance BMR of plant and machinery at Unit II of the Holding Company. all present and future fixed assets. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 250 bps per annum.11 110 | JDW Group Security Dubai Islamic Bank Pakistan Limited This loan has been obtained during the year to finance BMR of plant and machinery at Unit II of the Holding Company. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 235 bps per annum.309 kanals. Principal repayment This loan is repayable in 20 equal quarterly instalments after a grace period of twelve months starting from October 2015 and ending in July 2020. subsequent to the year end ranking charge has been converted into joint pari passu charge. However. 8. 8.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 8.10 Security The Bank of Punjab This loan has been obtained during the year to finance BMR of plant and machinery at Unit II of the Holding Company.9 Security Silk bank Limited This loan has been obtained during the year to finance BMR of plant and machinery at Unit II of the Holding Company. Principal repayment This loan is repayable in 16 equal quarterly instalments after a grace period of twelve months starting from September 2015 and ending in June 2019. all present and future fixed assets. Principal repayment This loan is repayable in 20 equal quarterly instalments after a grace period of twelve months starting from August 2015 and ending in May 2020. plant and machinery of the Holding Company and personal guarantees of Directors. This loan is secured by ranking charge on land measuring 3. This loan is secured by ranking charge on land measuring 3. plant and machinery of the Holding Company and its subsidiary company and personal guarantees of Directors. .262 kanals. plant and machinery of the Holding Company and personal guarantees of Directors. Principal repayment This loan is repayable in 20 unequal quarterly instalments after a grace period of six months starting from May 2015 and ending in January 2020. This loan is secured by ranking charge on land measuring 4. subsequent to the year end ranking charge has been converted into joint pari passu charge. 8.

Security This loan is secured by ranking charge on land measuring 3.13 This loan is secured by ranking charge on land measuring 3. Rate of return The interest is payable quarterly at a rate of six months KIBOR plus 225 bps per annum. subsequent to the year end ranking charge has been converted into joint pari passu charge. This loan is secured by ranking charge on land measuring 4. Principal repayment This loan is repayable in 20 equal quarterly instalments after a grace period of twelve months starting from July 2015 and ending in April 2020. all present and future fixed assets.309 kanals. Principal repayment This loan is repayable in 20 equal quarterly instalments after grace a period of twelve months starting from October 2015 and ending in July 2020. all present and future fixed assets. Principal repayment This loan is repayable in 24 equal quarterly instalments starting from July 2014 and ending in April 2020. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 200 bps per annum. plant and machinery of the Holding Company and personal guarantees of Directors. Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 250 bps per annum. plant and machinery of the Holding Company and its subsidiary company and personal guarantees of Directors.12 Askari Bank Limited This loan has been obtained during the year to finance BMR of plant and machinery at Unit II of the Holding Company.14 Security The Bank of Punjab This loan has been obtained during the year to finance acquisition of liabilities of JK Farming Systems Limited. 8.262 kanals. However. subsequent to the year end ranking charge has been converted into joint pari passu charge.262 kanals.309 kanals. Faysal Bank Limited This loan has been obtained during the year to finance partial acquisition of assets of JK Farming Systems Limited. subsequent to the year end ranking charge has been converted into joint pari passu charge. plant and machinery of the Holding Company and personal guarantees of Directors. plant and machinery of the Holding Company and its subsidiary company and personal guarantees of Directors. However. Security 8.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Rate of return The interest is payable quarterly at a rate of three months KIBOR plus 225 bps per annum. all present and future fixed assets. However. This loan is secured by ranking charge on land measuring 4. 8. subsequent to the year end ranking charge has been converted into joint pari passu charge. all present and future fixed assets. However. Security Annual Report 2014 | 111 .

implements and vehicles.426.016 373.282 1.451 642.260. 10 2014 Rupees 2013 Rupees DEFERRED TAXATION Deferred tax liability on taxable temporary differences arising in respect of: .038) (525.700.426.677 Later than one year and not later than five years 709.722.354.643.845) (617.054 1.583 112 | JDW Group . The Group has the option to purchase the assets upon completion of lease period and has the intention to exercise such option.656 929.taxable loss for the year .266) (27.166) (27.208 2.626) (1.571.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 9 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE The amount of future minimum lease payments along with their present value and the periods during which they will fall due are: 2014 Minimum lease Note payments Finance cost for future periods Present value Rupees Rupees Not later than one year 13 Later than one year and not later than five years Rupees 527.674 114.224.678 140.005.858) (15.485.990.506.950.392.021.463.946.352 255.560 2.398.422.provisions for doubtful debts and obsolescence .668.472 67.387 (428.034.713.270. 2001 against normal tax charge in future years 3.514.099.929.311.461.081.868 The Group has entered into various lease agreements with financial institutions for plant and machinery. Lease rentals are payable on quarterly / monthly basis and include finance cost ranging from three to six months KIBOR plus 200 to 300 bps per annum (2013: three to six months KIBOR plus 200 to 300 bps per annum) which has been used as the discounting factor.804) 1.other timing differences .205 287.555.liabilities against assets subject to finance lease .013.852.310 273.205) (75.employee retirement benefits .094.067.570.070 2013 Minimum lease payments Finance cost for future periods Present value Rupees Not later than one year 13 372.524 151.794) (316.417.261.396 1.078.708.132) (1.977.721.560.934 1.033.946.371 – Deferred tax asset on deductible temporary differences arising in respect of: .670) (400.047) (24.339.leased assets .157) (53.658 412.018.252) (29.421.accelerated tax depreciation on operating fixed assets .436.633.697.847 Rupees Rupees 84.624 926.adjustment of losses related to Co-Generation Power 2.042 299.tax credits under section 113 of Income Tax Ordinance.959.594.016 1.

907.772) 46.419 14.876 169.486 68.302.256.1.584.428.583 Note 2014 Rupees 2013 Rupees 11 STAFF RETIREMENT BENEFITS .666.713.436.555.583 2013 Rupees 1.397.049 (3.426.208 (28.486) 430.876.256.601.1 Movement in liability for defined benefit obligation 61.620 8.1 Movement in unrecognized actuarial losses Balance as at 01 October Charge to profit and loss account 11.144.2 Change in present value of net staff gratuity – (16.612 5.201.026 (73.186.073) 231. 2001 against normal tax charge in future years 200.GRATUITY Present value of defined benefit obligations Unrecognized actuarial losses 11.694.061) 273.868.705 6.016.liabilities against assets subject to finance lease .adjustment of losses related to Co-Generation Power .190 4.tax loss for the year .419 Opening present value of defined benefit obligations Current service cost for the year Interest cost for the year Benefit paid during the year Actuarial (gain) / loss on present value of defined benefit obligation Closing present value of defined benefit obligations 11.664) 91.699 44.625.890.620 (16.601.835 – (14.281.1 68.890.717) (3.934 1.907.1.556 – (3.022) (325.665.201) 3.545 28.496.1.032) (8.397.193) (112.317 – Closing unrecognized actuarial losses 11.772) 37.379.430.740.893) – (2.1 Charge to other comprehensive income Payments Liability as at 30 September Annual Report 2014 | 113 .458 13.914) 1.580 10.797 306.provisions for doubtful debts and obsolescence .355.employees’ retirement benefits 20.1.281.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 10.721.1 11.368.201) 44.699 – 61.419 11.2.555.1 Movement in deferred tax balances is as follows: As at 01 October 2014 Rupees 1.607) 8.694.employee retirement benefits .675.594 (8.201) Liability as at 30 September 11.643 Recognized in profit and loss account: .592 (6.388.tax credits under section 113 of Income Tax Ordinance.699 61.907.679.881.863) (72.248.446) – 1.543.282.571.607 – 13.694.383 Recognized in other comprehensive income: .459.753 (4.699 44.721.016.620 Opening unrecognized actuarial losses Actuarial gain / (loss) arising during the year Actuarial losses recognized Charge to other comprehensive income (16.524.980.940.594 (4.045) (33.827.256.1.256.625.717) 68.601.other timing differences .940 (4.2 68.leased assets .accelerated tax depreciation on fixed assets .

464. the impact on present value of the defined benefit obligation as at 30 September 2014 would have been as follows: Gratuity Impact on present value of defined benefit obligation Increase Decrease Rupees Rupees Discount rate 100 bps movement (4.906.1.458 10.978.065 44. had fluctuated by 100 bps with all other variables held constant.506.644.3 12.358) The expected expense to the gratuity scheme for the year ending 30 September 2015 works out to Rs.467 3.580 Future salary increase 100 bps movement 4.076 184.834.256.927.Finance against trust receipts (FATR) .1 12.2.190 4.Running finances .753 – 5.486 46.474 (4.286.524.1.496.504 1.2 12.705 6.SECURED Banking and financial institutions .821 3.601 7. 11.692.303.551.777 2. 15. These are secured against pledge of sugar and personal guarantees of the Directors.358.302.607) 8.281.883.450.810.704) 4.352 (1.556 Charge to profit and loss account for the year comprises: Current service cost Interest cost for the year Actuarial losses recognized 11.049 3.4 68.1. The markup rates applicable during the year ranges from one to six months KIBOR plus 150 to 300 bps per annum (2013: one to six months KIBOR plus 150 to 250 bps per annum).1 2014 Rupees 2013 Rupees 5.620 (3.280 million (2013: Rs.Cash finances .317 14.Morabaha finances 12.612 49.702 The Group has obtained these facilities from various banks and financial institutions aggregating to Rs.601.049 430.1.470 252.15 million.288.3 Historical information comparison for five years 2014 2013 Rupees Rupees 2012 2011 2010 Rupees Rupees Rupees Present value of defined obligations Experience adjustment (loss) / gain Expected expense for the next year 11.699 61.073.458.553. 14.302.713 698.048.5 Sensitivity analysis If the significant actuarial assumptions used to estimate the defined benefit obligation at the reporting date.446 10. 16.961.368.282.485 million).827.844 7.4 12.666. 114 | JDW Group .928.186.804.397.953) Note 12 SHORT TERM BORROWINGS .Notes to the Consolidated Financial Statements For the year ended 30 September 2014 2014 Rupees 2013 Rupees 11.410.1 8.

120.004.000 million).14 million (2013: Rs.573.283 413.852 46.111.111 1.273.226.3 Unclaimed dividend Tax deducted at source Retention money Payable to provident fund trust Advance against sale of investment 29 Other payables 14.032.130 14 TRADE AND OTHER PAYABLES 14.145 69. 450 million).456 50.125 1.707.066 498.809. 4.114.060. 4.080 million (2013: Rs.168. 3.946.89 million (2013: Rs.222. Nil) and Rs.507 3.860.064 100. 7.244 884.541 – 211.2 The Group has obtained running finance facilities aggregating to Rs.309 1.287. 12.4 2.130.089 5.016 502.982. Annual Report 2014 | 115 .312.1 This includes an amount of Rs.445.851 27.000. These are secured against present and future current assets of the Holding Company and personal guarantees of the Directors.052 21.509 17.923 18.675.908.192 66. 700 million).043.1 Payable on behalf of growers Payable to JKFS against purchase consideration Federal excise duty and sales tax payable Workers’ profit participation fund payable 14.286 412.400 million (2013: Rs.399.977.564 9.534.558 78. It carries markup ranging from one to six months KIBOR plus 200 to 250 bps per annum (2013: one to six months KIBOR plus 200 to 250 bps per annum ).494.574.324 447.489. 10.621 612.824 19.42 million). 600 million (2013: Rs.402 287.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 12.34 million (2013: Rs.579 5.413 1.587.605.959.975.152. It is secured against first charge over current assets of Holding Company.877.2 Accrued expenses Workers’ welfare fund 14.000 27.180.074 5.387. Note 2014 2013 Rupees Rupees 13 CURRENT PORTION OF NON-CURRENT LIABILITIES Redeemable capital Long term finances Liabilities against assets subject to finance lease 7 8 9 111.472 2.050. 1. 3.719.558. JK Dairies (Private) Limited (“JKDL”) and Agro Industrial Solutions respectively (related parties).118 Advances from customers Trade and other creditors 14.462 – 37.67 million) due to JDW Aviation (Private) Limited.276. 12.4 The Holding Company has obtained Morabaha / Istisna finance facilities aggregating to Rs.192. Rs.590. 66. These are secured against present and future current assets of the Holding Company and its subsidiary company and personal guarantees of the Directors.453 27. The markup rates applicable during the year ranges from one to three months KIBOR plus 150 to 300 bps per annum (2013: one to six months KIBOR plus 150 to 300 bps per annum). The markup rates applicable during the year ranges from three to six months KIBOR plus 150 to 250 bps per annum (2013: three to six months KIBOR plus 150 to 250 bps per annum).721 4.3 The limit of this facility is Rs.

166 39.120.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 14.478) Balance as at 30 September 66.155.163.179.2 2014 Rupees 2013 Rupees Workers’ profit participation fund Balance as at 01 October Add: allocation for the year Interest on funds utilized 69. 45 million during the year.238 (329.399.042.246 Less: paid during the year 149.12 million (2013: Rs.063 280.900 12. According to the audit report of Excise Department the exemption was wrongly availed.116. Holding Company 116 | JDW Group .959.811.729.3 Workers’ welfare fund Balance as at 30 September 5.957. 16.509) 18.052 329.018.399. The Holding Company has challenged the same in Honorable Lahore High Court. 160 days.120. 6.63 million out of which the Holding Company deposited Rs.064 (83.558 4.509 14.489 342.131 4.232 69.195.581. Alternative dispute resolution committee unanimously decided the matter partially in favor of the Holding Company and forwarded its recommendations to Federal Board of Revenue (“FBR”) for further necessary actions.e.393 162. FBR decided the case against the Holding Company on 29 November 2013 and raised a demand of Rs. Based on opinion from legal advisor.874.959.558.212) 103.2 The Holding Company availed 50% exemption of excise duty in 1990 . 15 2013 Rupees INTEREST AND MARKUP ACCRUED 2014 Rupees Interest and markup accrued on: Redeemable capital Long term loans Short term borrowings Purchase consideration related to JKFS 13.306.729) 14.561 (18.729 18.1 Contingencies 16.913 325.509 Less: adjusted during the year 23.321.558 66.411 – 16 CONTINGENCIES AND COMMITMENTS 530.558 Balance as at 01 October Add: allocation for the year 18. management expects a favorable outcome in this case.19 million) due to due to National Rural Support Program (“NSRP”).852 69.959.654 28. the Deputy Collector issued show cause notice. However.082.1.509 5.724.814.399. 47.1. No provision has been made in financial statements for this as the management is confident that the case will be decided in its favor.040.852 13. a related party. the Holding Company has filed an appeal before Honorable Lahore High Court against the order passed by the Appellate Tribunal.4 This includes an amount of Rs. 0.052 18.1 A sales tax demand was raised by the tax department for the year 2002-2003 on grounds of various observations.036 (33.640 16.91 crushing season on account of excess production over last year by having completed full crushing season i.399. Therefore.558.

.6 Case of the Holding Company was selected for audit u/s 177 of I.9 Guarantees issued by the banks on behalf of the Holding Company in favour of various parties as at the reporting date amounts to Rs. who vide order dated 06 April 2010 decided appeal in favour of the Company on most of the issues.54 million (2013: Rs.70 million) for the current year.3 The Punjab Industrial Development Board (PIDB) has claimed in respect of Pasrur Sugar Mills Limited (formerly subsidiary of United Sugar Mills Limited) an amount of Rs. Accordingly no provision is made in these consolidated financial statements. sale. 10. Assistant Commissioner of Inland Revenue (‘ACIR”) passed order u/s 122(5) / 122(1) by making additions on different issues i. 4.7 Counter guarantees given by the Holding Company to its bankers on account of agricultural loan as at the reporting date amounts to Rs. 16. amounting to Rs. The final outcome of this case is not known at present. interest expense. 16. 516 million by reducing brought forward losses.8 Cross corporate guarantees given by the Holding Company to its bankers for DSML as at the reporting date amounts to Rs. management expects a favorable outcome in this case.O 2001 for Tax year 2008. An appeal filed by PIDB against decision of arbitrator in Honorable Sindh High Court Karachi was dismissed during the year 2004-05. Further.10 The Subsidiary Company is in a Constitutional Petition with the Additional Secretary Industries and Commerce Department.1. subsequent to the year end.1. 61.5 The Honorable Sindh High Court through its order dated 01 March 2013 declared the amendments made in the The Workers’ Welfare Fund Ordinance. 94. Rs. However.1.68 million. Holding Company filed a writ petition against this notice in the Honorable Lahore High Court (“Court”) on the basis that the rate of 0.333 million has been vacated on 14 November 2014.32 million (2013: Rs.1. these financial statements do not include any adjustment to this effect since the management is of the opinion that it does not come under the purview of the order of the Honorable Sindh High Court and that the Honorable Lahore High Court had already declared the above amendments unconstitutional via the case reported as 2011 PLD 2643. Hence no provision has been made in these consolidated financial statements. Now PIDB has again filed a petition and Honorable Supreme Court has accepted the petition to re open the case.783. 16. The actual date of further hearing in this case is yet to be notified by the high court.1.78 million). 16. 1971 (“WWF”) through Finance Act.32 million (2013: Rs.T. Government of Sindh against cancelling of No Objection Certificate (collectively “impugned Cancellation Order”).1.21 million become recoverable from them. In the light of the above order.1. which is still pending. However. 16. 3. salaries. 5. 239. 123. However the management based on the opinion of its tax advisor is confident that this case will be decided in its favor. 380. Annual Report 2014 | 117 .1.. department has filed appeal before appellate tribunal (“ATIR”) against order of CIR (Appeals).78 million. 16. gain on sale of assets etc. counter guarantee given for amounting to Rs. Subsidiary Company 16. 50.33 million (2013: Rs. The Court suspended the proceedings of the notice vide its order dated 24 April 2013 and the final outcome of the case is pending.5% instead of 8% on local supplies made and raised a demand of Rs.1. Holding Company has filed appeal before Comissioner Inland Revenue (Appeals) (“CIR”).5% has been charged as allowed by the FBR vide SRO 77(I)/2013 dated 07 February 2013.e. the provision to date based on accounting profit comes to Rs.701. Based on opinion from legal advisor. However the Honorable Sindh High Court has suspended the Impugned Cancellation Order and the respondents in the Constitutional Petition have been restrained from interfering in the construction of the sugar mill. A dispute arose at the time of settlement of the consideration of the mills between PIDB and USML and the matter was referred to an arbitrator.32 million). 380. However the management based on the opinion of its legal advisor is confident that this case will be decided in its favor. Whilst in the view of legal advisor the Subsidiary Company has an arguable case. 2008 applicable through which WWF is applicable on accounting profits rather than on the taxable income computed after incorporating the brought forward losses.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 16. Accordingly no provision is made in these consolidated financial statements.4 The tax department issued a show cause notice to the Holding Company on 09 April 2013 on the grounds that the Company has charged Federal Excise duty at the rate of 0. Consequently. and it is not possible at this stage to give a definitive opinion on the ultimate outcome or any losses that may be incurred by the Subsidiary Company. An award had been announced by it in favor of the Holding Company whereby instead of paying the aforementioned amount.33 million).

Notes to the Consolidated Financial Statements
For the year ended 30 September 2014

16.1.11 The Subsidiary Company has received a show cause notice u/s 14 of the Federal Excise Act, 2005 for
availing the facility of SRO 77(I)/2013 dated February 07, 2013 against local supplies amounting to
Rs. 211.27 million and charging FED at the reduced rate of 0.5% (Rs. 1.06 million) instead of charging FED
at rate of 8% (Rs. 16.90 million) in the month of February, 2013. Therefore the difference amount of FED
(Rs. 15.88 million) is recoverable by the FBR as per the show cause notice.


However, the Subsidiary Company has filed a petition against SRO 77(I)/2013 and above mentioned show
cause notice for challenging actions and omissions of the FBR to the extent they purport to restrict and
impose conditions and limitations on availment of benefit of reduced FED. Adjudication is still pending
and the case has been adjourned for January 22, 2015.


16.1.12 The Subsidiary Company is in Constitutional petition file by Shah Nawaz Chahchar of village Saindion
wherein the allegations have been leveled that said sugar mill use sugarcane for sugar without filter
plant and without completion the legal formalities and their village has experienced the deteriorating
environmental atmosphere conditions of the area due to polluted and foul water pumped out of the
Sugar Mill.


In the view of the legal advisor of the Subsidiary Company the petitioner does not seem to be interested
to pursue his petition and this petition will be dismissed in near future in favour of the company.


2014
Rupees

2013
Rupees

16.2 Commitments

16.2.1

Letters of credit for import of machinery
and its related components

Holding Company

617,912,249

1,771,392,778

Subsidiary Company

16.2.2 The amount of future lease rentals on agricultural contract and the period in which payments will become
due are as follows:


Note
2014
2013

Rupees
Rupees


Not later than one year
Later than one year but not later than five year
Later than five years

444,020,983
803,695,274
127,703,990



1,375,420,247

15,819,652,556
4,615,126,751

11,420,990,025
1,966,172,380

20,434,779,307

13,387,162,405

17

PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets
Capital work in progress

17.1
17.2

118 | JDW Group

Operating fixed assets

Rupees

-

-

*520,828,321

Rupees

Transfers
to /
(from)

-

13,061,215

666,432,813

Rupees

Fair value
of assets
acquired

794,111,670

1,648,181,373

1,815,302,761

Rupees

5-20

10

-

%

As at
30 September
Rate
2014

-

200,942,790

499,898,789

Rupees

-

34,100,060

84,902,702

Rupees

Rupees

-

-

-

As at

01 October
For the
Adjustments
2013
year

- 1,815,302,761

Plant and machinery

2,550,814,649

442,463,010

20

176,376,704

111,091,383

182,570,480

7,426,381

-
99,450,839

-

7,050,732
163,181,774

121,602,406

10
20

43,779,188
30,206,859

7,077,753

5,522,583

(1,324,973)

-

-

(25,010,429)

45,677,476

36,535,378

49,301,771

51,740,226
413,309,949

1,964,000

48,602,234

-
-

415,125,507

- 100,342,460
-

10

10-20

25,342,118
149,641,376

5,435,645
8,607,675

-
19,056,011

30,777,763
177,251,542

Tube well

Computers

34,054,619

27,400,797

2,245,889

398,645,628

7,541,517

109,046,924

10,454,656

5,875,480

345,790

-

450,000

10,025,383

-

1,308,817

-

-

-

-

-

-

-
7,991,517

119,072,307

10,454,656

46,958,875

-

-

32,565,103

2,591,679

- 398,645,628

-

-

-

11,595,439

10

33

10

10

10

10

10

17,176,691

1,292,238

145,191,577

3,499,954

29,907,262

7,787,890

16,196,388

4,016,891

125,207

25,345,405

408,583

8,220,754

266,677

2,830,433

-

-

-

-

-

-

-

20,602,009

1,417,445

170,536,982

3,908,537

38,128,016

8,054,567

19,026,821

Motor vehicles

187,597,072

81,150,500

3,960,000

102,486,572

* It represent land transferred from investment property.

3,898,054,473

740,414,761

(104,713,577)

- 1,094,026,668

5
20

10

- 1,625,787,364

- 233,768,682

- 297,992,014

520,828,321 1,216,474,024 20,778,184,977

(311,829,666)

(107,665,250)

(99,450,839)

88,381,385

4,175,933,401

277,878,928

96,867,030

92,630,513

862,801,119

122,386,358

65,008,768

4,098,341

53,279,249

(190,323,142)

15,596,923,426 3,634,282,348

1,750,019,958

260,283,432

393,482,853

1,096,253,673

Plant and machinery

Agri implements

Leased

832,657,987 1,216,474,024 19,152,397,613

(190,323,142)

13,846,903,468 3,446,685,276

11,963,094

1,174,234

228,108,646

4,082,980

80,944,291

2,400,089

27,932,054

(80,202,099)

-

(122,185,016)

(45,677,476)

(19,056,011)

(57,451,529)

(80,202,099)

220,319,171
117,570,360

4,958,532,421 15,819,652,556

278,080,270 1,347,707,094

116,198,322

77,672,843

84,209,105 1,009,817,563

122,185,016 4,680,452,151 14,471,945,462

(711,174)
(591,573)

Arms and ammunitions

Aircraft

Roads and boundary wall

Furniture and fixture

Weighbridge

237,873,965

69,564,697

126,646,396

72,300,635

308,135,134 295,922,432

(148,442)
(53,520)

Tools and equipment

Agri implements

611,541,190
57,451,529 3,049,404,215 9,822,808,116

(983,054)
(749,234)

57,287,608

90,168,630

24,383,044

604,057,566

Electrical installation

268,650,418

Office equipment

107,665,250

5,512,300

267,013,629

5-20

(44,784,031)

Motor vehicles

249,683,407 12,872,212,331

104,713,577

(2,803,004)

9,618,591,169 2,902,027,182

Rupees

584,801,491 1,063,379,882

Rupees

Net book
As at
value as at
30 September 30 September
2014
2014

(58,972,370)
(52,472,370)

825,012,131

28,071,909

382,827,937

Factory building on freehold land

Non factory building on freehold land

1,252,292,221

27,864,819
(81,921,067)

682,097,875

Freehold land

Rupees

Additions/
(deletion)
during the year

Owned

As at
01 October
2013

Cost Depreciation

17.1

Notes to the Consolidated Financial Statements

For the year ended 30 September 2014

Annual Report 2014 | 119

120 | JDW Group

Non factory building on freehold land

Plant and machinery

9,090,879,346

779,241,598

1,196,556,362
473,879,313

132,373,163

55,735,859

4,391,886

Rupees

Additions/
(deletion)
during the year

-
-

-
58,832,510

Rupees

Rupees

Rupees

911,614,761

- 9,618,591,169

-

- 1,252,292,221
5

5

10

-

%

As at
30 September
Rate
2013

- 595,495,245

Fair value
of assets
acquired

-

2,172,790,052

169,495,449

418,957,039

Rupees
-

358,086,122

31,447,341

80,941,750

Rupees
-

- 200,942,790

Motor vehicles

273,882,169

11,146,735

17,420,000

-

267,013,629

20

165,288,390

23,147,275

10,124,173

176,376,704

50,146,895

83,976,598
7,194,713

6,192,032

-
-

-
-

90,168,630
57,287,608

10
20

24,306,136

38,912,685
5,928,273

4,866,503

-
-

43,779,188
30,206,859

49,102,541

-

-

51,740,226

10

22,536,463

-
26,489,462

2,805,655
29,231,858

Aircraft

Tube well

Computers

24,802,710

2,245,889

398,645,628

7,541,517

108,462,549

2,763,087

-

-

-

584,375

-

1,173,444

-

-

-

-

-

-

-
10,454,656

34,054,619

-

-

-

-

27,400,797

2,245,889

398,645,628

7,541,517

- 109,046,924

-

-

33

10

10

10

10

10

10

12,875,000

1,186,277

117,030,016

3,050,891

21,150,079

7,491,583

14,265,991

4,385,970

105,961

28,161,561

449,063

8,757,183

296,307

1,930,397

-

-

-

-

-

-

25,342,118

17,176,691

1,292,238

145,191,577

3,499,954

29,907,262

7,787,890

16,196,388

13,012,523,419 699,432,604

175,601,720

- 13,846,903,468

3,283,256,107

580,541,219

Motor vehicles

542,961,648
226,660,580

447,294,063
70,401,852

45,538,000

594,124,535

(58,832,510)
(17,420,000)

(99,349,210)

- 1,078,253,673
- 278,283,432

- 393,482,853

5
20

10

71,491,242

86,198,783

72,766,445

36,151,187

32,921,192

38,742,122

(23,127,182)
(10,124,173)

(26,489,462)

1,216,916,291

710,064,387

(175,601,720)

- 1,750,019,958

230,456,470

107,814,501

(59,740,817)

14,229,439,710 1,409,496,991

-

- 15,596,923,426

3,513,712,577

688,355,720

96,867,030

277,878,928 1,472,141,030

181,416,402

- 4,175,933,401 11,420,990,025

(42,013,275)
(26,134,896)

10,224,106

953,651

253,454,051

4,041,563

79,139,662

88,381,385 989,872,288

(1,359,000)
(651,226)

17,858,231
2,666,766

92,630,513 300,852,340

(1,359,000)
(651,226)

Plant and machinery

Agri implements

Leased

26,398,108

27,080,749

46,389,442

90,636,925

59,740,817 3,898,054,473 9,948,848,995

(40,654,275)
(25,483,670)

710,671,971

752,393,432

149,641,376 263,668,573

(165,000)
(84,279)

Roads and boundary wall

Arms and ammunitions

10,454,656

32,881,175

Weighbridge

93,920,056

10

-

- 413,309,949

-

99,349,210

Furniture and fixture

1,360,312

2,637,685

312,600,427

Tools and equipment

Agri implements

(54,000)
(27,550)

Electrical installation

Office equipment

(35,435,275)
(22,183,134)

Rupees
- 595,495,245

- 499,898,789

Rupees

Net book
As at
value as at
30 September 30 September
2013
2013

23,127,182 2,550,814,649 7,067,776,520

Rupees

As at

01 October
For the
Adjustments
2012
year

Cost Depreciation
Transfers
to /
(from)

(5,000,000)
(3,188,707)

Freehold land

Factory building on freehold land

591,103,359

Rupees

Owned

As at
01 October
2012

Notes to the Consolidated Financial Statements

For the year ended 30 September 2014

833 .471.488 46.463) Company Policy 02 Motor cycles Employees 123.do 622.116.do 463.680.000 1.380.437 271.661 376.do - Tubewell bore Written off 1.367 02 Vehicles 04 Vehicles 04 Vehicles Vehicle Vehicle Vehicle Vehicle Vehicle Vehicle Mr.304 92.906 329.111 543.118.434 316.021.672 876.472.498 1.355.342 194. Luqman Hakeem 1.do Net book value of assets less than Rs.702 642.094 2.246 306.754 503.326 404.44 million acquired from JKFS are in process of being transferred in the name of Holding Company.067 1.450. 1.2 2014 Rupees 2013 Rupees Depreciation charge for the year has been allocated as follows: Cost of goods manufactured Administrative expenses Biological asset 31. Karamat Ali 2.724 276.027.222 1. Talib Hussain Mr.do 2014 190.075.700 297.592.do .134.do 02 Laptops Employees 164.608 .055.623 333.do 17 Peter engines Mr.379 25.000 1.084.644 271.409 2.1.242.339 1. Shah Mohammad Mr.246 1.177 .119 688.637.747 695.000 Mr.111 543.141.622 Mr.2 17.437 18.214.222 80. Elahi Bukhsh Mr.289 884.720 Sale proceeds Gain/ (loss) Mode of disposal Rupees Rupees Rupees Rupees Rupees Rupees Employees 07 Vehicles Employees 6.533.do .648 Annual Report 2014 | 121 .667 533. Plant and Equipment Accumulated Description Particulars of buyer Owned Cost depreciation Book value 653.502 .878.109. Qamber Hamid Mr. 249.591 2.326 443.839 876.000 4.102 2.753.do 953.395 .628 (322.489 2013 42.292.000 390. 50.1.359 .do 729.000 770.595 356.358.do Dumper Trolly Mr. Zahir Khan 2.326 398.000 670.873. Khurram Ayub 489.do .398.142 80.1 Assets having net book value of Rs. Raheel 4.579 7. Note 17.000 Mr.003.000 715.017 1.202.063 Negotiation . Abid Nasir 2.638 162.do Others parties Freehold land and non factory building Freehold land Mr.041 338.500 66.816.859 628.086. Nauman Nazir 810.967 235.674 305.754 7.500 16.786 1.1.696 16.655.121.232 – 862.728.000 (15. Abid Ansar Mr.do 339. Nazir Gopang Mr.123 297.500 (129.000 195.410.387 307.633) .000 Mr. Qamber Hamid 108.946 44.700 750.897.367 470.748.111 611.256 1.370 .020 1.111 543.202.500.do Lathe machine New United Agro Industy 124.645 .000 57.027 9.099 110.141 970.094 .700.000 2.669.818.524 (102.do .330.525 40.000 511.043 312. Company Policy 16 Laptops Open market 1.605 1. Atta ur Rehman Syed Murtaza Mehmood 02 Tractors 03 Tractor 30 Tractors Tractor Tractor Tractor Tractor Tractor Mr.137.674 271.276 . Muhammad Arshad 1.275 26.947 25.754 .000 Mr.437 271.602.670 .630 252.381.000 EFU General Insurance Limited 916.000 1.010.000 Mr.344. .819.370 86.699 203.477 788.591 Insurance claim 139.323. Abdul Sattar 551.330 59.000 1.446.294 .547.133 167.000.do 1.800.633 1.437 305.866 473.600 Mr.091 2.095.550.000 4. Rahim Bukhsh Mr.000 710.437 52.896 15.779 46.000 529.000 1.801.170 57.do 2.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 17.013.146.933 744.do .do .623 435.392 150.851.523 127.425.598.do .629.000 615.1 32 18.do .434 .333 745.674 271.000 16.000 296.099) .472 123.do 406.406.3 Disposal of Property.818.421 9.000 165.484. Abid Ansar 1.354 543.566 172.909 2.947) .333 14.467 271.

840) Crop harvested (3.53% to 12.439.132 – 5.159 2.000 – 2.2.032 1.084 6.615.771 (1.190.850.000.190.190.837.172.019.345) 2013 4.987.112.751 49.2 Capital work in progress 2014 As at 01 October 2013 Rupees Additions Transfers Rupees Rupees As at 30 September 2014 Rupees Building Plant and machinery Advances to suppliers 93.515.592 128.380 17.642.180.07% per annum) and costs of testing Co-Generation Power amounting to Rs.477) 691.872 (2.681.751 Building Plant and machinery Advances to suppliers Stores and spares held for capital expenditure As at 01 October 2012 Rupees Additions Transfers Rupees Rupees As at 30 September 2013 Rupees 155.476 – 582.319.094.605.classified as non current assets Mature .979.380 7.115. 17.459 303.691.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 17.840) (527.172.725 (190.820 357.101.99 million) relating to specific borrowings at the rates ranging from 11.397.012.380.381) 576.classified as current assets 10.942.057.783 122 | JDW Group – .979.556.604.012.762.476 691.2 – Movement in the carrying value of biological assets Note 1.180.564 – – (30.592) 93.466.824.411.000.511.783 – – Cost Rupees Fair value Rupees Carrying value Rupees - - - 2.126.594) 1.304 1.716 (4.822 1.820 461. 253.958 (1.2.1 Balance at 01 October 2013 Crops acquired from JKFS Expenses incurred during the year 18.509) Balance at 30 September 2014 1.403.132 – 2.411.912 30.987.084 1.509.622) 3.942.550) 1.842 (2.691.916 (276.757.000 2.411.50 million after deducting the net proceeds from sale of electricity during testing period.132 5.196 92.66 million (2013: Rs. 404.511.666.2 Additions to capital work in progress include borrowing costs of Rs.748.521.414.364) 955.336.057.490 461.246) 174.096. 34.1 Capital work in progress mainly represents capital expenditure incurred by the Company for Co-Generation Power at Unit III and for BMR at Unit II.942.68% per annum (2013: 11.115.957 1.674.966.24% to 12.093.894.295.482 (797.044.942.690.445.471.605.642.979.602.961 18. 18 BIOLOGICAL ASSETS Consumable biological assets represent: 2014 Rupees 2013 Rupees Sugarcane Immature .966.190.132 Fair value loss charged to profit and loss (527.156.

The cash flow projections include specific estimates for next year.374 maunds and 202 maunds of sugar cane.840) – 34 49.984.332.205.5 maunds per acre in addition to issuance of 779 acres of sugar cane mature crop for seeding purposes to internal farms and some external parties. Nil) in respect of provident fund. 15.other income 2014 Rupees 2013 Rupees (527.657 20.475.2 Harvesting expenses Seed and sapling expenses Pesticide and herbicide expenses Sowing expenses Vehicle running expenses Repairs and maintenance Bio-laboratory expenses Utility expenses Printing & stationary Freight Insurance Amortization 31.325 22.2 2014 Rupees 2013 Rupees Expenses incurred during the year Land rentals Irrigation expenses Fertilizer expenses Salaries.093. wages and other benefits include Rs.382 - 2. wheat and moong during the year at yields of 797.287 21.396.144 4.316.1 Travelling and conveyance Others 469. 18.086 22. the fair value measurement for the standing crop has been categorized as Level 3 fair value based on the inputs to the valuation techniques used.4 Measurement of fair values 18. wages and other benefits 18.5 and 3.945 162.077.511.692 1.261.337 maunds.200.328 255.257 308.908 8.342 1.2.702 125. The expected cash flows are discounted using a risk adjusted discount rate.897.1 Land preparation & cultivation expenses Depreciation 17.537 60.50 million (2013: Rs.202 91.702.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Note 18.1.031.190.1 Fair value hierarchy In absence of active market for sugarcane standing crops.126.600 242.3 The Holding Company harvested 19.876.2 Level 3 fair values The following table shows a break down of the total gains / (losses) recognised in respect of Level 3 fair values: Note (Loss) / gain included in cost of good manufactured and other income Change in fair value (realised) cost of goods consumed Change in fair value (unrealised) .806 37.4.132 18.956. The valuation model considers the present value of net cash flows expected to be generated by the plantation.218 87. 13.4.398. 18.251 171.1 Salaries.779.463 291.885.2. Fair value has been determined on the basis of a discounted cash flow model.115. 18. 35.032 – Annual Report 2014 | 123 .102.367.

7 1.Sindh Zone Acres Estimated yield per acre -Punjab Zone Maunds -Sindh Zone Maunds Harvest age Months Estimated future sugarcane market price per Maund 18.032 925.894. Management performs regular reviews to identify environmental risks and to ensure that the systems in place are adequate to manage those risks.39% - Cost of Rs 10.446 Sindh 811.947.480.892.446 766.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Unit 2014 Value 2013 Value 18.3 Valuation techniques and significant unobservable inputs The key variables.741) – Increase of 10% in discount rate 18.674.064 10.691.040. assumptions and the impact of changes in fair values of biological asset is given below: Valued plantations (Actual) .5 . The Holding Company has established environmental policies and procedures aimed at ensuring compliance with local environmental and other laws.374.4.751 Total 49.414) 114.Sindh Zone Risk .751 Fair value Rupees Total Rupees The Holding Company is exposed to the following risks relating to its sugarcane cultivation.783 Risk management strategy related to agricultural activities 18.520.573.Punjab Zone Acres .adjusted discount rate 9.093.987. Sensitivity analysis Impact of changes in key subjective assumptions on fair value of biological assets is given below: 2014 2013 (Decrease) (Decrease) Rupees Rupees Decrease of 10% in expected average yield per acre (182.6 Segment-wise composition Cost Rupees Punjab 831.Punjab Zone .357 - 793 801 - 12-14 Rupees Rupees 180 182 - % per month 1.5 million in respect of plantation on 250 acres of sugarcane crop is considered to approximate their respective fair values less point of sale costs as these assets are still at a very early stage of plantation and it is considered that in-significant biological transformation has taken place or the impact of fair value measurement is not significant.800) – Decrease of 10% in expected average selling price per maund (261.723.032 1. The Holding Company is subject to various laws and regulations in Pakistan.642.305 (65.790) – (7. 124 | JDW Group Regulatory and environmental risks .

The calculation of value in use is sensitive to discount rate and local inflation rates.693 431. fungal and weed infestations resulting in crop failure and reduced yields The Holding Company is principally dependent upon the Government’s measures for flood control. This goodwill was merged in the Holding Company’s financials at the time of merger of USML and GSML into the Holding Company.321) – 2013 Rupees 685. The Holding Company follows an effective preventive pesticide / insecticide / fungicide program and regularly monitors the crop for any infestations and takes immediate curative measures.2 20.302 paid by the Holding Company in excess of the fair value of identifiable net assets of United Sugar Mills Limited (“USML”) and Ghotki Sugar Mills (Private) Limited (“GSML”) respectively.391 and Rs. 39. it contains elements of significant risks and uncertainties which may adversely affect business and resultant profitability.84% per annum.1 1 1 .1 20.675. Supply and demand risk The price of sugarcane is driven by consumer demand of sugar as well as Government’s intervention in setting of minimum / support price for the grower.991 Balance as at 30 September 173.889 608. The Holding Company manages this risk by aligning its harvest volume to market supply and demand.1 It represents agricultural land given on lease. The fair value of investment property is Rs. and ii) potential insect.930 693. 19 INVESTMENT PROPERTY Balance as at 01 October Transfered to operating fixed assets Land purchased during the year 2014 Rupees 693.582 608. 273 million (2013: Rs 1. Surplus production or bumper crop may result in a lower selling price hence affecting profitability of the Holding Company adversely. 568.026.310.97 million) on the basis of revaluation carried out on 14 April 2014 by an independent valuer.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Climate and other risks Due to inherent nature of the biological assets. For impairment testing.765. affecting the quality and quantity of production.693 18.800.828. including but not limited to the following: i) adverse weather conditions such as floods etc.1 608. Management performs regular industry trend analysis for projected harvest volume and analysis. the recoverable amount of both cash generating units has been determined based on the value in use calculations by discounting the five years cash flow projections at 17.451 627.545.310.855.742.855.881.260 – 7.251 19. Annual Report 2014 | 125 .973.144 Goodwill includes Rs.251 (520. Note 2014 2013 Rupees Rupees 20 INTANGIBLE ASSETS Goodwill Computer software 20.

478.027.500.000 (2013: 51.975) (320.061.586) (610.767.957) - (5.000 – (200.050 560.2.027.39% (2013 : 47.500.075 239.936 126 | JDW Group .500.1 Equity held 48.378 Note 212.464.1.648.767.914. 10 each Acquired during the year: 148.524.050 560.000 – 21.169.463 142.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Note 2014 Rupees 2013 Rupees 1.000) fully paid shares of Rs.451 20.504 2.1 Accumulated amortization As at 01 October Amortization for the year 20. 20.000.549 As at 30 September 18.3 51.800.500.69%) Share of loss (410.1.150.unquoted Cost of investments As at 01 October Acquired during the year Less: investment classified as held for sale 650.1 The software represents financial accounting software acquired during the current year from JKFS. The amortization of the software represents the total amortization charged during the current year which is equal to accumulated amortization.450 – – (70.596.500.504 2.997.2 Amortization charge for the year has been allocated as follows: Cost of goods manufactured Administrative expenses 31.2.148.044.464.484.080) - As at 30 September (520.000.2.805 (2013: Nil) 21.478.500.064) (203.725.648.279 1.397.000 568.936 560.148.000 1.000 1.2 & 21.732.045 212.075 239.361) 4.450 (34.984) (285.000 As at 01 October Share of loss for the year Share of other comprehensive income Impairment allowance for the year Less: loss related to investment classified as held for sale As at 30 September 21.000 20.767.2 Rate of amortization 10% & 33% 33% 20.414.524.1 Faruki Pulp Mills Limited (“FPML”) Cost of investment 21.975) (410.169.549 2.000 – 2..397.889 431.500.050 - 850.064) 1.134.732.2.050 650.000.279 1.769.504 2014 Rupees 2013 Rupees 21 INVESTMENTS Investment in associated companies.361) 4.484.1 32 1.885.390 568.000.841 356.614) (60. 21.064) (203.2 Computer software Cost As at 01 October Acquired during the year 20.000) Share of loss 2.500.000 As at 01 October Share of loss for the year Share of other comprehensive income (320.061.907) (273.064) 1.767.841 212.975.

267 – (423. Annual Report 2014 | 127 .850.760.000.018 287.37%) Share of loss 90.000 (260.3.192.106.725.319.000) - (90.586 – – Share of profit Less: investment classified as held for sale 29 21.1.182 3.619.3 JDW Power (Private) Limited (“JDWPL”) 200.975.000.549.725.386) Less: impairment loss - - 5.000.586 – 260.000 90.983.223 3.000) 5.969) 3.000.000.695 – 16. operate and maintain a co-generation power plant.975.153 367.177.1 As at 01 October 21.1 Additions in equity investment represents right shares issued by FPML.614 As at 30 September (90.350.427 – (599.170 584.22%) As at 01 October Share of profit for the year – – 54.868) 1.326 – 22.000.586) – – Cost of investment 9. own.508 170.580 3.975.024.070 Investments of the Group in associated companies has been accounted for under equity mehtod of accounting based on their audited financial statements for the year ended 30 June 2014.358.077 6.725.184.000.200.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Note 21. 10 each Equity held Nil (2013 : 22.611 3.763.511.360.956.518.614) 21.725.37% (2013 : 47.004.3.000) (84.000.354.000 (2013: 9.000) fully paid shares of Rs.889 30. – 21.173.000. 2014 FPML JKDL JDWPL Rupees Rupees Rupees Assets Liabilities Equity Revenues (Loss) / profit after tax for the year 4.000) fully paid shares of Rs.779 3.848 904.328.313.474 118.1 Share of profit for the year – The impairment was charged on the basis that board of JDWPL had decided to discontinue its operation and has no intention to build.369 2013 – – – – – FPML JKDL JDWPL Rupees Rupees Rupees Assets Liabilities Equity Revenues (Loss) / profit after tax for the year 4.614 (5.2 2014 Rupees 2013 Rupees JK Dairies (Private) Limited (“JKDL”) Cost of investment Nil (2013: 10.000 (90. 10 each Equity held 47.509 As at 30 September – 60.490 1.846.367.

327. 23 LONG TERM DEPOSITS These mainly comprise of security deposits with leasing companies in respect of leasing facilities availed.561.corporate sugarcane farms 456.1 Stores.663 147.536.728 349.1 Less: current maturity presented under current assets 2014 Rupees 2013 Rupees 36.691 461.784.029.146 14.092.604) Less: provision for obsolescence 1.000 22.000) 36.019.082.872.936.237.690.347 1.497.784.000 (9. 2014 2013 Rupees Rupees 24 STORES.561.000 50.000 33.193.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Note 22 LONG TERM ADVANCES Sukkur Electric Power Company (“SEPCO”) 22.Co-Generation power 487.673.809.370 473.007.000.Co-Generation Power .2 This represents interest free soft loan given to meet 100 % expenses of grid interconnection at Unit II of the Holding Company for Co-Generation Power.097 15.Co-Generation power 844.929.777.689 23.798 3.000 31.000) 27.000 Multan Electric Power Company (“MEPCO”) 22. 22.759.212 128 | JDW Group .156 461.604) (44.728 832.000.727.2 58.406 (44.124 787.105 5.601 20.673.000.107 Finished goods 5.688.1 This represents interest free soft loan given to meet 100 % expenses of grid interconnection at Unit III of the Holding Company for Co-Generation Power.000.970.000.sugar .380.079 3.082.719 89.000 (3.000. spares and loose tools include items which may result in fixed capital expenditure but are not distinguishable.317. SPARES AND LOOSE TOOLS Stores .sugar . The loan is recoverable in 36 equal monthly instalments starting after three months from the commercial operation date i.011.802 24. 12 June 2014.000.e. 03 October 2014.e.080.000.802 241.000 83.000.698 20.371.874 349.915.843.370 – – Spares .000.347 – 39.sugar . The loan is recoverable in 36 equal monthly instalments starting after eighteen months from the commercial operation date i.689 – Loose tools . 2014 Rupees 2013 Rupees 25 STOCK IN TRADE Raw material 211.

148 228.916.2 Movement in provision for doubtful advances to growers As at 01 October 4.45% per annum).125.962 4.4 Federal excise duty and sales tax receivable Prepaid expenses Advances to staff .918 2.447.considered good 26.1 26.602.417 (14.994.962 1.597. 2014 2013 Rupees Rupees 27. Increase in trade debts mainly represents the receivable balance from NTDC on account sale of electricity under EPA.758 (4.937.501 24.512.1 It represents advance given to JKFS which includes markup of Rs.928 (4.472.433.447.960 Letters of credit Advances to related parties-unsecured.UNSECURED Trade debts .908.976.5 .265 207. considered good .398.considered doubtful 56.against salaries 27.209 45.265 20.792 561.1 Unsecured .74% to 12.486.141) 669.883 581.792 4.423 Less: Provision for doubtful advances 27.634.323 244.31 million) due from Riaz Bottlers (Private) Limited.276 655.883 207.639.626 20.375 (14.364 9.141) 671.937.460.317.430.000.817. DEPOSITS.1 Trade debts .966) 1.considered good Unsecured .279.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Note 26 TRADE DEBTS .141 655.541.141.316.883) (20.991.considered doubtful 2014 Rupees 2013 Rupees 671. 3.843 (20.000 .087 3. Nil (2013: Rs 72. considered good 27.014.021.342.141 Less: Provision for doubtful debts 685.234 26.966 1.864 18.unsecured.486.956.2 61.290.960 20.472.945 489.492 3.844.47% to 12.343 43. PREPAYMENTS AND OTHER RECEIVABLES Advance to growers Unsecured .920.650) 4.358.937.937.634.937.472.366 3.038.74 million) at markup rates ranging from 11.486.877 1.966) Advance to suppliers and contractors Unsecured .3 29.817.937. Note 27 2014 Rupees 2013 Rupees ADVANCES.203.486.183 5.considered good 27.000 9.203.430. Nil (2013: 22.234 14.considered doubtful 56.129.966 34.883) 561.937.977 208.358.59% per annum (2013: 11.2 This includes an amount of Rs.748 27.against expenses Deposits Current maturity of long term advances Excise duty receivable Other receivables 27.240.966 Annual Report 2014 | 129 .6 562. an associated Company.276 14.966 Less: Provision for doubtful advances 27.006.460.000.918.616 (30.888.966 Less: provision written off – As at 30 September 4. During the year this balance has been settled.472.003 9.

883 20.472.691 76.00% per annum).00% to 10% per annum (2013: 6.00% to 8.883 27.1 2014 Rupees – – 2013 Rupees 260. 183.65 million (2013: 8. 20.99 million) charged at the rates ranging from 11.000 29.055 108.725.700.723 28.47% to 12.45% per annum).3 Movement in provision for doubtful advances to suppliers and contractors As at 01 October Less: provision written off 2014 Rupees 2013 Rupees 20.750) As at 30 September 20.438.4 This amount includes markup of Rs. the sale transaction has been completed at a sale price of Rs. 130 | JDW Group .91 million (2013: Rs.135. 22 per share during the year end on 28 December 2013. 27.766 35.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 27.369.902 106. 100 million was received by the Group from CEO of the Holding Company for purchase of these shares.1 Cash in hand 101.472.987.668. therefore an impairment loss was charged in the previous year to measure the value of non current asset held for sale at lower of its carrying amount and fair value less costs to sell. 22 per share on 28 December 2013.016 5.816 77.74% to 12. During the year. 20 million) receivable from executives of the Holding Company.472.763. Note 2014 2013 Rupees Rupees 28 CASH AND BANK BALANCES At banks: Current accounts Saving accounts 28. the said investment was presented as non current asset held for sale.6 Other receivables include an amount of Rs.776.1 The balances in saving accounts carry markup at 6.000.125 1.109 40.633 (4. 29 NON CURRENT ASSET HELD FOR SALE The Board of Directors in their meeting held on 20 August 2013 decided to sell the Group’s entire holding in JKDL to the CEO of the Holding Company and an advance of Rs.883 – 25. 1. Accordingly.395.586 (40.586) Fair value less cost to sell – 220.59% per annum (2013: 11.641.725.1 Since the sale transaction completed at a sale price of Rs. 27.54 million (2013: Rs. Note Carrying value as at 20 August Less: impairment loss 29.5 This includes an amount of Rs.965.668 1.764.97 million) receivable from ATF Mango Farms (Private) Limited (a related party). 32.

512) (1.650.700.505.1 Sales tax is being charged on the variable energy purchase price only as per Sales Tax Special Procedures Rules.597.067 2013 Rupees 4.208.233.597.585) 30.238 – 475.605.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Note 30 SALES .265) (10.213 (2.916.611.672) (243.950.Co-Generation Power 1.666.916.056.281.sugarcane seed and others 30.827.072.777.337.045.430) 32.597.105) (89.665 Annual Report 2014 | 131 .040 27.3 Electricity .419 (5.112.688.2 Agriculture produce 34.3.214.056.065 6.bagasse 2014 Rupees 3.984.920.322 2. 30.381.122.1 fixed energy price 422.Captive Power .by products 2014 Rupees 2013 Rupees 34.368 (3.238 26.142.173 30.293.328.198.589.1 Less: closing stock .Federal excise duty .365.sugar .311 – 650.737.413.212 34.550.699.034.395.322 variable energy price 30.046.3.Sales tax .739. Note 31 COST OF SALES Opening stock in trade Add: cost of goods manufactured 31.402 322.956 33.999. 2007.2 Co-Generation Power plant at Unit-II started its commercial operations on 12 June 2014 and it is supplying renewable electricity to the national grid.190.2 Electricity 30.134) (128.830 475.315.650.749.3 Molasses & Bagasse .012 475.1 Agriculture produce 30.509 29.395.local .252.NET Sugar 30.365.278.159.593 34.1 Sugar 36.export 29.830 2.726.628 .876.809 36.270.818 - .397.886.690.Commission and others 39.598.712 26.193.315.076.061.3.497.216) (1.883.672 5.107) 30.774.422.416 – – 30.032) (38.607) (138.322 30.007.653 Less: .2 744.713) (2.311 1.190.3.777.712 33.

38 million (2013: 7.485.298 27.827.720.527 288.954 579.2.892.492 8.391 – 12.896 19.660.798. Rs.1.776 642. 42.811) – 31.758.588 579.153.1 2014 Rupees 2013 Rupees Cost of goods manufactured Cost of sugarcane consumed (including procurement and other costs) 31.1.780.1.397 31.2 Depreciation 17.465 176.750.3 Chemicals consumed Vehicle running expenses Oil.664.988.463 3.588 207.040.470. 10.241 1.279 141.367.235.660.208.1.899.628.20 million) in respect of staff gratuity.488 299.674.221 5.959 4.208.1.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Note 31.850 – – 25.675 58.208.467.807.400 1.727 (253.086.551.827.512.738.498 6.772.174 23.497 861.4 Printing and stationery Amortization of computer software 20.545.124.3 2014 Rupees 2013 Rupees Stores and spares consumed Less: bagasse capitalized during testing of Co-Generation Power 542.343. wages and other benefits 31.749. lubricants and fuel consumed Electricity and power Mud and bagasse shifting expenses Insurance Repairs and maintenance Freight and octroi Handling and storage Operation and maintenance costs 31.501.727 653.516.920.816 25.1 Cost of sugarcane consumed 31.815 15.674.557 3.141.1 Salaries.727 19.327.80 million) in respect of provident fund. 24.2 Travelling and conveyance Telephone and fax Assets written off Land vacation charges Other expenses 31.679.660 101.841.068 3.1.127.397 1.034.1.763 25.957 29.929 34.sugarcane purchased 3.604.827 22.4 Operation and maintenance costs 288.305.897 51.899.2 Packing materials consumed Stores and spares consumed 31.071 – Reimbursable cost Operating fee 132 | JDW Group .1.1.399 579.368 .885.397 31. 31.516.111 50.129 19.943 – 26.071.300.813.241 26.501.805 26.897.72 million (2013: Rs.890 28.128.779 409.978.235.587 95.550.2 Salaries.071 9.727 162.500.106 65.419 29.660.700.406 65.516. wages and other benefits include Rs.sugarcane produced .400.336.

341 – 15.1 Salaries.656. Annual Report 2014 | 133 .247 1.000 125.790 4.101.298. 6.159 46.851.348 88. Note 2014 2013 Rupees Rupees Auditors’ remuneration KPMG Taseer Hadi & Co.030.638 42.040.282 7.584.000 651.614. wages and other benefits include Rs.664 5.105 10.714.443 19.158 23.27 million) in respect of provident fund.595.632 142. wages and other benefits include Rs.24 million) in respect of provident fund.3 None of the Directors of the Group or their spouses have any interest in. wages and other benefits 32.000 2.000 1.46 million (2013: Rs.988 7.2 Fee and taxes Telephone.801 212.197.231 130.955.701 621. 4.000 2.007.000 350.000. wages and other benefits 33. 0.000 1.164 26.504 – 31.1.473.000 9.083. Islamabad in which Mr.994 24.1 Salaries.939 273.344. books and periodicals Amortization of computer software 20.771.681.000 315.870.08 million) in respect of staff gratuity.45 million (2013: Rs.792.000 120.522.227.004.581. fax and postage Subscription and renewals Printing and stationery Advertisement Electricity and power Auditors’ remuneration 32.319.204.1 Freight and handling charges Other selling expenses 33. Statutory audit Half yearly review Other certificates Out of pocket expenses Riaz Ahmed Saqib Gohar & Co.2 32.000 105.000 210.29 million (Rupees: Rs.995.000 8.000 1. Rs.334 33 SELLING EXPENSES Salaries.703 2.906 1.564.891 316.000 225.345 46.052 5.2 Travelling and conveyance Office rent and renovation Vehicle running and maintenance Legal and professional services Repair and maintenance Insurance Charity and donations 32.892 15. F6/4.549 15.329 5.750.656.245.000 17.825. or are otherwise associated with any of the recipients of donations made by the Group during the year except for the National Rural Support Program (“NRSP”) situated at 46.887. 32.742 32.2 Assets written off Arms and ammunition Other expenses 2014 Rupees 336.886 27.250 750.568 82.467.469 18.417.552.113 6.403.124.319 11.693 4.061.378 15.3 Entertainment Newspapers.679.595 171.453.744 3.000 90. Jahangir Khan Tareen is a Director.143 161.545 6.702.786.511.214.250 35.978.347.531 2013 Rupees 342.841 9.250 2.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Note 32 ADMINISTRATIVE EXPENSES Salaries. Aga Khan Road. 8.232 25.000 375.466.000 300.250 2. Statutory audit Tax services Other certificates 2.438 23.2.850 9. 0.1 Depreciation 17.268 22.601 591.214.444. 3.896.000 3.995.

secured .362.197.1 .2 Bank charges and commission 1.021.3 Fair value gain on biological assets Scrap sales Rental income 34. an associated Company.47 million) on receivable from these parties.600 4.short term borrowings . 34.212. This receivable is in respect of the proceeds of short term borrowings from banks.558.494.586 49.592. 286.342.348.540.561.1 Other expenses 66.197.079 9. 134 | JDW Group .041.725.988.732 83.042.654 61.375.751 (404.887 12.035.349 203.852 5.124) 1.986.616 2. 2.669 25.100.220 20.041.399.349 – Income from non-financial assets 4.509 – – 40.986.857.redeemable capital .112 420.507 106.949.558 18.082.82 million (2013: Rs.152 1.362.385 Interest and mark-up on: .167.purchase consideration related to JKFS .453.305. Note 2014 2013 Rupees Rupees 35 OTHER EXPENSES Worker’s profit participation fund 14.484.Worker’s profit participation fund 14.694.279 15.secured .872.935.648 – 52.466 (34.859.032 41.733 13.052 9.273 4.590 95.long term loans .093.328.730.2 This amount includes markup amounting to Rs.489 49.614.178 Less: Borrowing costs capitalized 2.364 1.650.696 1.408.058 – – 69.397 34.478.281.297.1 Insurance claim Gain on foreign exchange transactions Sale of mud Others 34.888.959.2 340.685.290.326 165.secured 36.030 29.780.315 336.163.018 4.030.finance leases .048 Profit on sale of property.659.000 7.671 72.1 Markup on short term borrowings is net of markup from related parties amounting to Rs.255 2.392 9.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Note 2014 Rupees 2013 Rupees 34 OTHER INCOME Income from financial assets Profit on bank deposit Markup on delayed payment from NTDC 2. 112.1.321.627 1.06 million (2013: Rs.938.1 It mainly represents the rental income earned from investment property.120.740 76.199 21.246 48.645.505.103) 36 FINANCE COST 2.326 178.363 36.338 173. Nil) to Riaz Bottlers (Private) Limited.599 170.454.519 1.519.768.2 Worker’s welfare fund Federal excise duty written off Sales tax receivable written off Impairment of non current asset held for sale 29. plant and equipment 17.

08 6. and for this purpose.951. 2001. 2006.4 The assessments of the Holding Company are completed up to tax year 2014 except for the tax year disclosed in contingency. As per the aforementioned policies.518. 37.201. In the meantime.3 Deferred tax income relates to reversal and origination of temporary differences. the accounts of the Holding Company including the power projects are being prepared under normal taxation regime.587. 2001.986.776.27) (5.BASIC AND DILUTED 38.870 588.47 37. 2013 37.1 2014 2013 Basic earnings per share Profit after taxation Weighted average number of ordinary shares Basic earnings per share Rupees 960.797 281.332 (40.3 86. 1997 (whether as an owner or cultivator of land.661 Rupees 16. the new power generation units of the Holding Company shall be treated as separate entities.2 prior years Deferred tax 37.1 The provision for current tax includes the tax chargeable to the Holding Company under Punjab Agricultural Income Tax Act. Numerical reconciliation between the average tax rate and applicable tax rate for the current year has not been presented in these financial statements as the Group is chargeable to minimum tax under section 113 of the Income Tax Ordinance.6 The two new high-pressure Co-Generation Power plants have been set up by the Holding Company under the Federal Government’s Framework for Power Co-Generation 2013 read with the Policy for Development of Renewable Energy for Power Generation.181 Numbers 59.784 37.349 367. the Holding Company is seeking clarification on whether existing notified exemptions for other power projects shall also apply to the Holding Company’s power projects or new exemptions shall be notified.661 59. 37. 2001. it also includes tax on exports and capital gains which is full and final discharge of Company’s tax liability in respect of income arising from such source.33) 1.845 – 306. the Holding Company’s sale of electricity from the power plants to CPPA/NTDC is exempt from income tax including turnover tax and withholding tax on imports.568.67 Average effective rate charged to profit and loss account 29.16 Annual Report 2014 | 135 .259) 20.2 The tax provision is charged by considering the provision of section 113 and other tax credits available under the Income Tax Ordinance. However.582. 38 EARNINGS PER SHARE .939 66.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Note 37 2014 Rupees 2013 Rupees TAXATION Income tax current 37.40 (1.776. 37. as the case may be) and that leviable on ‘other operating income’ under the Income Tax Ordinance.265.5 Reconciliation of tax charge for the year % age Applicable tax rate Tax effects of amount not deductable for tax purposes Tax effects of amount deductable for tax purposes Tax effect of income chargeable under Final Tax Regime Others 34.00 0.1 & 37. In addition to this.980.

900.347 35.024.300.128. 27.297 – (203.080.987.501. 136 | JDW Group .841 66. deposits.120.400.000.489) – 1.919. Number of persons In addition to the above.509 41.577.394. The Chief Executive is permitted to use the Holding Company maintained aircraft for private trips.282.558 18.849.095.581.000.939 8.965 Adjustments for non cash and other items: Finance cost Depreciation Amortization Workers’ profit participation fund Workers’ welfare fund Staff retirement benefits Share of loss of associated companies Assets written off Biological assets acquired and consumed internally Fair value gain on biological assets Profit on disposal of property. 53.800. Directors and Executives of the Group is as follows: Directors Chief Executive Executive Non .320.330.333 Utilities 2.975.399.424.674 1.733.470.291.333 House allowance 10.666.794 24.188 8. one Director and some of the Executives are provided with free use of Group maintained cars.000 10.949.558. for which the proportionate share of expenses is reimbursed to the Holding Company.400.052 79.000 2.878.666.617.035.725.720 212.2 Diluted earnings per share There is no dilution effect on the basic earnings per share of the current year as the Group has no such commitments.202) 5.351 51.363 688. spares and loose tools Advances.355. DIRECTORS AND EXECUTIVES The aggregate amount charged in the consolidated financial statements for the year for remuneration. including all benefits to the Chief Executive.601.119 2.396) (16.093.571 – – – (9.000 9.000 174.027.743.320.877.042) (262.484. prepayments and other receivables (1. subject to availability.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 38.000 20. 1.804 - 11.86 million ( 2013: Rs.852 5.002.000 299.148 3.647 12.203.447.600.853.972 89.648) 40. plant and equipment Impairment loss 2.000. During the year.Executives (46.609.130 Executives 2014 2013 2014 2013 2014 2013 2014 2013 Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Managerial remuneration 27.798) 29.658.666 48.000 1 1 - - - - - - - - - - - - . .430 2 2 101 68 .573 Operating profit before working capital changes 7.867.586 5.000 2.332) 888.728 877.000 9.737.830.027.567 Increase / (decrease) in current liabilities Trade and other payables (3.000 2.509. 23.788.554.592.000 12.995 203.959.554.000 .361 876.801.260.600. 2014 Rupees 2013 Rupees 39 CASH GENERATED FROM OPERATIONS Profit before taxation 1.070 283.861.770 (49.072.538 (Increase) / decrease in current assets Stock in trade Biological assets Trade debts Stores.453.410 279.993.650.000 8.850.605 45.912 47.333 Bonus 12.541) (271.504 69.419.592.333.272.667 Company’s contribution towards provident fund .933.240.022) Cash generated from operations 4.897.000 10.000 41.735 140.464.056. the Chief Executive was charged Rs.691.890.219 956.627 862.998.929 2.833 2.455.950. Chief Executive.032) (203.800 40 REMUNERATION OF CHIEF EXECUTIVE.780.711) (1.80 million) for the use of aircraft. 40.

Majority of the Company’s sales are on advance basis and trade debts mainly represents receivable from NTDC. references. 1. Export sales are secured through letters of credit. The management has set a maximum credit period of 15 days to reduce the credit risk. Concentration of credit risk arises when a number of counter parties are engaged in similar business activities or have similar economic features that would cause their abilities to meet contractual obligation to be similarly effected by the changes in economic. establish purchase limits taking into account the customer’s financial position.64 million) financial assets which are subject to credit risk amount to Rs.Credit risk .76 million). past experience and other factors. and the Group’s management of capital.518. and arises principally from the Group’s receivables from customers and other parties & and loans to / due from related parties.Liquidity risk .1 Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. 1. to set appropriate risk limits and controls. The carrying amount of financial assets represents the maximum credit exposure before any credit enhancements. The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.Market risk The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. 41. Risk management policies and systems are reviewed regularly to react changes in market conditions and the Group’s activities.367.55 million (2013: Rs. The Group believes that it is not exposed to major concentration of credit risk. Out of the total financial assets of Rs. This note presents information about the Group’s exposure to each of the above risks.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 41 FINANCIAL INSTRUMENTS The Group has exposure to the following risks from its use of financial instruments: . The maximum exposure to credit risk at the reporting date is: Annual Report 2014 | 137 . policies and processes for measuring and managing risk.285. 2. 2.07 million (2013: Rs. To manage exposure to credit risk in respect of trade receivables.383. the Group’s objectives. political or other conditions. Limits are reviewed periodically and the customers that fail to meet the Group’s benchmark creditworthiness may transact with the Group only on a prepayment basis. The Group’s risk management policies are established to identify and analyze the risks faced by the Group. management reviews credit worthiness. and to monitor risks and adherence to limits. The Board is also responsible for developing and monitoring the Group’s risk management policies.

651.471.276 – 655.47% (2013`: 2%) of trade debts as at the reporting date.141 14.276 14.369.844.486.375 2014 2013 Gross carrying amount Accumulated impairment Gross carrying amount Accumulated impairment Rupees Rupees Rupees Rupees Neither past due nor impaired Past due more than 365 days 671.10 million) of trade debts as at the reporting date.865.776.141 669.313.486.844.141 14.430.916.141 14.276 530.125 655.358.98 million (2013: Rs.000 76.631 83. exposure to any single customer does not exceed 74.484 – The Group’s five significant customers account for Rs.234 1.484 – - – 72.533 671.430. Based on past experience the management believes that no further impairment allowance is necessary in respect of trade receivables and there are reasonable grounds to believe that the amounts will be recovered in normal course. apart from which.486.141 The analysis of trade receivables from Riaz Bottlers (Private) Limited.000. an associate of the Group as at the reporting date is as follows: 2014 2013 Gross carrying amount Accumulated impairment Gross carrying amount Accumulated impairment Rupees Rupees Rupees Rupees Neither past due nor impaired - – 72.408 2.430.668 The aging of trade receivables at the reporting date is: Not past due Past due 365 days 1.486.760.234 14.000.916.032.367.234 – 14.141 655.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Note 2014 Rupees 2013 Rupees Trade debts Advances.007 58.486.141 685.358. Credit quality of major financial assets The credit quality of major financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rate: 138 | JDW Group .417 14. deposits.417 669.141 685.375 14. prepayments and other receivables Long term advances Bank balances 671.071.285.486.313.000 106.358. 573.486.486.

8.135 2.876.117.954.203 8.735.468 148.946 979.658 7.892 162 368.470.594.103.516.2 A AA+ A1+ A1+ A1+ A1 A-1 A-1 A1+ A-1+ A1 C A1+ A-1+ A-1+ A1+ A- A-1+ A1+ A-3 A1 A1+ A-1 A-1+ Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.952 9.741 6.773.279 10.460 3.714.183. Further liquidity position of the Group is closely monitored through budgets.1 Exposure to liquidity risk 41.920.157 905. 41.037.647 25.2.668 Al-Baraka Bank (Pakistan) Limited Allied Bank Limited Askari Bank Limited Bank Al Habib Limited Bank Alfalah Limited Bank Islami Pakistan Limited Burj Bank Limited Dubai Islamic Bank Pakistan Limited Faysal Bank Limited Habib Bank Limited JS Bank Limited KASB Bank Limited MCB Bank Limited Meezan Bank Limited National Bank of Pakistan NIB Bank Limited Silk Bank Limited Sindh Bank Limited Soneri Bank Limited Summit Bank Limited The Bank of Khyber The Bank of Punjab The First Micro Finance Bank Limited United Bank Limited 2013 A1 A1+ AA AA+ AA A A A+ AA AAA A+ B AAA AA AAA AA- A-2 AA- AA- A- A AA- A AA+ Remaining financial assets mainly represents receivable from related party. 1.179.750.179.315 1.363 16.929.004.378.191.2.852 1.678 .320 .937 176. For this purpose the Group has sufficient running finance facilities available from various commercial banks to meet its liquidity requirements. cash flow projections and comparison with actual results by the Board.000 116.474 266.501 30.070 1. as far as possible.954.528.666 1.202.728 252. including estimated interest payments.902.805.750.1(a) Contractual maturities of financial liabilities.369.517.664 1.179.209 20.149.222.623.913 530.674 530.103.129 106.102.581 14.222.618.246 143.442 10.724 54.887.896 21.860 5.496.461 46.776.239 9.192 10.570 416.844 7.552 25.553.604 4.125 76. 2014 Carrying amount Contractual cash flows One year or less One to More than five years five years Rupees Non-derivative financial liabilities Redeemable capital Long term loans Short term borrowings Liabilities against assets subject to finance lease Interest and markup accrued Trade and other payables 1.965.323 204.575 16.978.422.506.792 27.286 2.090 5.647 2.785 - 10.439 6.516.024.361.989 473. that it will always have sufficient liquidity to meet its liabilities when due. under both normal and stressed conditions.358 82.658 1.785 9.733 5.241 706.545.339.913 530.352 527. .668.793.372 50.520 3.666.842. 41.092 22.516.521.878 1.911 18.647 2. The Group’s approach to managing liquidity is to ensure.169.056.735.914 13.774 564.997 16.103.307 177.913 2.988 1.067.196 18.430.279 Annual Report 2014 | 139 .505.104.190.786.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Rating Long term Rating Short term Agency 2014 Banks Rupees PACRA PACRA PACRA PACRA PACRA PACRA JCR-VIS JCR-VIS PACRA JCR-VIS PACRA PACRA PACRA JCR-VIS JCR-VIS PACRA JCR-VIS JCR-VIS PACRA JCR-VIS PACRA PACRA JCR-VIS JCR-VIS 144.475 129.169.

95 14. such as foreign exchange rates.989 8.750.301.018.25 1.965.116.36 167.954.50 88.465.3.151 9.586 1.079.1(b) Exchange rates applied during the year foreign currency exchange rates applied during the year is as follows: 2014 Spot rate Buying Selling EURO USD GBP AUD JPY SEK 124.99 168. 41.20 105.92 103.28 101.279 Market risk Market risk is the risk that changes in market prices.78 95.876.116. Currency risk arises from sales. while optimizing the return.586 1.3 41.47 105.3.222.081.88 90.752 11.586 – – 16.1 325.06 1.773.42 131.16 93. Currency risk Currency risk is the risk that fair values or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.852 1.957.037.279 Short term borrowings 7.92 165.123.750.673 21.570 1.97 1.04 Rupees 131.640 325.57 98.954.735.990.30 170.39 139. The objective of market risk management is to manage and control market risk exposures within acceptable parameters.361.989 473.50 170.484 1.640 – – 1.177.786.553.50 .785 – Long term finances 5.640 325.102.1(a) Exposure to currency risk The Group is not exposed to foreign currency risk as at the reporting date.328.774 564.470. 41.902.222.868 1.702 7. purchases and resulting balances that are denominated in a currency other than functional currency.847 – Interest and mark-up accrued Trade and other payables 41.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 2013 Carrying amount Contractual cash flows One year or less One to five years More than five years Rupees Non-derivative financial liabilities Redeemable capital 724.735.85 0.3.25 98.714.483.81 2013 Spot rate Buying Selling Average rate for the year Average rate for the year Rupees 142.398.99 17.33 140 | JDW Group EURO USD GBP AUD JPY SEK 142.87 92.14 16.93 14.147.230.056.417.658 – – Liabilities against assets subject to finance lease 929.07 16.123.726 1. interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments.051.21 103.07 16.692.439 6.75 0.618.658 7.677 709.64 167.230.92 0.116.524 372.123.230.

using source inputs in foreign currency and arranging cross currency swaps to hedge non-functional currency debt.952 – – – – 724.541.433.447 A change of 100 basis points in interest rates at the reporting date would have increased / (decreased) profit for the year by the amounts shown below. The Group maintains foreign currency working capital lines in order to finance production of exportable goods.1(d) Currency risk management The Group manages its exposure to currency risk through continuous monitoring of expected / forecast committed and non-committed foreign currency payments and receipts.secured Liabilities against assets subject to finance lease Short term borrowings .668. remain constant.177.secured Long term loans .061.808. exposure to currency risk is measured and appropriate steps are taken to ensure that such exposure is minimized while optimizing return. The analysis is performed on the same basis for 2013.433.339.465.169.secured Variable rate instruments The Group does not account for any fixed rate financial assets and liabilities at fair value through profit and loss.3. Therefore a change in interest rates at the reporting date would not affect profit and loss account. Proceeds from exports are used to repay / settle / rollover the Group’s obligations under these working capital lines which substantially reduces exposure to currency risk in respect of such liabilities.524. Reports on forecast foreign currency transactions.668 (130.666.994.990.726 5. Profit and loss 100 bps Increase Decrease Rupees As at 30 September 2014 223.3.573.900.666 10. This analysis assumes that all other variables.808. The Group also occasionally uses currency options to cover any significant unfavourable rate scenarios. The Group’s interest / mark-up bearing financial instruments as at the reporting date are as follows: Note 2014 2013 Financial asset Financial liability Financial asset Financial liability Rupees Non-derivative financial instruments Advance to Faruki Pulp Mills Limited Payable to JKFS against purchase consideration Redeemable capital .323 22.844 – – 929.3. This includes matching of foreign currency liabilities / payments to assets / receipts.637) As at 30 September 2013 130.637 (223. Cash flow sensitivity analysis for variable rate instruments 27.517.870. in particular foreign currency rates.4 489.456 416. Balances in foreign currency are also maintained in current and saving / deposits accounts with banking companies.323 – 1. 41. 41.868 7.702 489.1(c) Sensitivity analysis The Group does not has any variable rate financial instrument.988 1.626 – 14 7 8 – – – 447. hence sensitivity analysis has not been presented.626 14.553.978.541.404.994.496. Annual Report 2014 | 141 .070 10. receipts and payments are prepared on monthly basis.668) The sensitivity analysis prepared is not necessarily indicative of the effects on profit for the year and assets / liabilities of the Group.900.051.2 Interest rate risk The effective interest / mark-up rates for interest/mark-up bearing financial instruments are mentioned in relevant notes to the financial statements.692.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 41.151 9 12 – – 1.

long term loans. or sell assets to reduce debt.387 69% 2013 6. and to provide an adequate return to shareholders. liabilities against assets subject to finance lease and current portion of non-current liabilities.831. The Group manages the capital structure in the context of economic conditions and the risk characteristics of the underlying assets.925. adjust the amount of dividends paid to shareholders.3. for example.5 Fair value of financial instruments Fair value is the amount for which an asset could be exchanged or liability be settled between knowledgeable willing parties in an arm’s length transaction. 41.852.688 17.3. the Group may. The Group monitors capital on the basis of the debt-to-equity ratio as follows: Unit 2014 Total debt Total equity and total debt Debt-to-equity ratio Rupees Rupees % age 11. The Board of Directors also monitors the level of dividends to ordinary shareholders. 41. The short term borrowing and loans and advances by the Company has variable rate pricing that is mostly dependent on Karachi Inter Bank Offered Rate (“KIBOR”) as indicated in respective notes. Equity price risk arises from available-for-sale equity securities held. which the Group defines as operating income divided by total capital employed. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the Board.345.773. There were no changes in the Group’s approach to capital management during the year. fair values of all financial instruments are considered to approximate their book values. issue new shares.179.774 58% Total debt comprises of redeemable capital.507. so that it can continue to provide returns for shareholders and benefits for other stakeholders.4 Other price risk Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk).3.3 The Group manages these mismatches through risk management strategies where significant changes in gap position can be adjusted. In order to maintain or adjust the capital structure. 41.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 41.6 Capital management a) b) The Board’s policy is to maintain an efficient capital base so as to maintain investor. The Group’s objectives when managing capital are: to safeguard the entity’s ability to continue as a going concern.212.3. 142 | JDW Group .745 11. The increase in the debt-to-equity ratio in 2014 is due to the increase in redeemable capital and long term loan availed during the year. As at the reporting date. creditor and market confidence and to sustain the future development of its business. The Group believes that it is not exposed to other price risk. The Board of Directors monitors the return on capital employed.

343.696 22.781.205.529 1. 36.298 47.732. - 28.342.224 34.140 .936 2.035.529 1.371. (4.609.279.965 (279.008.490 Reportable segment revenue 36.419 5.886.284.399.1 BUSINESS SEGMENT INFORMATION Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Annual Report 2014 | 143 .077.075 2.844 1.157 . Corporate farms segment (652.524. .682.628 . 42. (4.524.848.860 1.083.047) (4. (605. .483.814.2.2 42.628 .727.868.518.453. Operations Information regarding the Group’s reportable segments is presented below: Sugar & other segment Co-Generation segment Corporate farms segment Reportable Segment The Group has three reportable segments.628 Total 1.521. .286.844 653.781. .42 Sugar & other segment (203.649.176.260.422.255.345.718.047 721. Inter segment reconciliation Total Co-Generation segment 123. .310 3.184.963. and are managed separately because they require different technology and marketing strategies.571) 1. . .270. .764 239.5 956. 35.960 .948 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Sugar & other segment All inter-segment transfers are made at fair value.236 10. .377) . .579.666) - 174.625 .712. Information reported to the Group’s chief operating decision maker for the purpose of resource allocation and assessment of segment performance is focused on type of goods supplied.363 688. .422.949.1 Segment revenues and results Co-Generation segment production and sale of crystalline sugar and other related joint and by-products generation and sale of electricity to NTDC managing corporate farms.443 Net external revenues Inter-segment revenues Segment assets Total assets for reportable segments Capital expenditure Equity-accounted investment Segment liabilities Total liabilities for reportable segments 42.593 . .890.571) 1.3 Inter-segment sales and purchases Corporate farms segment 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees 42. .427 - .627 864.950.613.828.593 34.422.950.650.663 683.590. 956.821.2 2.517.542.950.436.2.086. .075 5.171.009.485 164.219 (203.170.361) 1.650. 1.637.323 .881 Inter segment reconciliation .464.478.026. - - .562.363 688. (2. The strategic divisions offer different products and services.556.165 3. .965 (279. .202.554.458.064 26.978 19.740.936 1.458.628 34.961.143.4 42.841 24.836.017 .613.904 6.898.605 694.224 34.077.728 Depreciation and amortisation Finance cost Share of loss of equity-accounted investee’s Segment profit / (loss) before tax 42. Basis of inter-segment pricing Inter-segment sales and purchases have been eliminated.949.347. which are the Group’s strategic divisions.184. The following summary describes the operations in each of the Group’s reportable segments : 42.848.801.618.284 239.276.384.470.384) 29.096 7.732.850.480 .361) 2.751) .422.278. as described below.371 17.835. .650.377) .278.673.253.2.619.191 26.950. . 75.2.886.751) . (4.568.027.668.890.734. 1.464.335. 3.049.579.554.190 36. 36. .568.478.511.204.431 1.2.

000 82.000 – Payment with respect to net assets acquired 2.000 – 19.940.951.780.403.040 6.395 16.886.264 3. key management personnel and post employment benefit plans. Directors of the Group.127.870) 956.708 20.965 (588.4 Geographical information 2014 Rupees 2014 Rupees 2013 Rupees 42.986.4 Key management personnel 86.470.342 62. Amounts due from and due to related parties are shown under respective notes to the accounts.000.050 457.581 132. other related companies.554.966.181 The segments of the Group are managed on a nationwide basis except export sales.984.950.233. The Group in the normal course of business carries out transactions with various related parties.000 156.492.4.637.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 Total 42.455 42.000.471.112.593 34.1 Revenue Foreign revenue Asia 5.000 563. Other significant transactions with related parties are as follows: 2014 2013 Relationship Nature of transactions Rupees Rupees 43.045.428 – – 2.219 (66.877.553 28.3 1.628 Local revenue All non-current assets of the Group as at 30 September 2014 are located in Pakistan.349 367.588 Purchase of sugarcane 43.750 – 750.000 106.990.628.784) 960.2 Investment in shares Advances given Sale of sugar Markup income Payment against purchase of Aircraft Sale of molasses Rent of land given on lease Rent of land acquired on lease Other Related Parties 1.573 4.518.005.730.000 861.3 Post employment benefit plans 144 | JDW Group Advances given Advances recovered Consultancy services .148.689.1 Associated Companies 43.4.000 1.899.484.112. 43 TRANSACTIONS WITH RELATED PARTIES The related parties comprise associated companies.423.000.000 110.000.145 Provident fund contribution 43.779 3.027.173 Pakistan 31.000 30. Geographical information relating to segment is presented below: 2013 Rupees Reconciliation of reportable segment profit and loss Total profit before tax for reportable segments Unallocated corporate expense Profit after taxation 42.278.2 Non-current assets 36.774.568.747 4.309.422.548.588.000.393.

204.269 129 128.000 120 1.746 2.664 2.320.000 120 2.560.946 119 175.000 1.664 233.Generation Power Holding Company Unit II Installed capacity Utilized capacity Energy delivered Based MWH on hours 8.631 133 312.189 Based MWH on hours - - - - Under utilization of available capacity has resulted because plant started its commercial operations on 12 June 2014. . 2014 2013 Corporate sugarcane farms Holding Company Land Crop under cultivation Area Acres Punjab & Sindh Punjab & Sindh 24.320.718 120 142 1.007.000 1.671 Area .768 115 162.000 1. Acres - Annual Report 2014 | 145 .020.016 64.460.185 Unit II Crushing capacity Sugarcane crushed Sugar production Unit III Crushing capacity Sugarcane crushed Sugar production Subsidiary Company Crushing capacity Sugarcane crushed Sugar production 2014 2013 Co .000 2.020.866.504.760 2.421 1.200.650 134.822 289.535.202 58.516 120 139 1.590.234 137.147 120 145 1.612 1.000 120 1.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 2014 2013 44 Days Tonnes Days CAPACITY AND PRODUCTION Sugar Holding Company Unit I Crushing capacity 120 Sugarcane crushed 149 Sugar production Tonnes 2.440.658 114.668 1.000 19.186.000 120 1.460.

835.835.661 Percentage of investments made Percentage 90% 92% Fair value of investment Rupees 25.071.435 15.667 32.023.435 251.051.812.023.835.00% 278. 30 June Unit 2014 30 June 2013 Holding Company (Restated) Size of fund .184.30% 65.835.151.201 Percentage of investments made Percentage 79.143.295 Cost of investments made Rupees 25.733.188.00% Unit 30 June 2014 30 June 2013 Subsidiary Company Size of fund .661 The breakup of fair value of investments is as follows: 30 June 2014 Rupees 30 June 2013 Percentage Rupees Percentage Cash at bank 25.481.015.166.487 313. 146 | JDW Group .58% 289.70% 79.232 213.661 100% The investments of the Provident Fund Trust of the Group are in compliance with the provision of section 227 of the Companies Ordinance.371 Cost of investments made Rupees 285.444.166.429.938 The breakup of fair value of investments is as follows: 30 June 2014 Rupees 30 June 2013 Percentage Rupees Percentage (Restated) Shares in listed companies Cash at bank 59.502 17.834.550 229.total assets Rupees 27.957 5.total assets Rupees 358.718 3.365.843.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 45 RESTRICTION ON TITLE AND ASSETS PLEDGED AS SECURITY Mortgages and charges Hypothecation of all present and future assets and properties Mortgage over land and building Pledge Finished goods 46 PROVIDENT FUND TRUST 2014 Rupees 2013 Rupees 11.42% 76.53% 80.300 20.104.16% Fair value of investment Rupees 289.261.023.700.431. 1984 and the rules formulated for this purpose.435 15.023.133.661 100% 25.850 100.706 23.456 8.526.435 100% 15.525.000 37.104.435 100% 15.343.850 278.938 100.929 The following information is based on latest audited financial statements of Provident Fund Trust.

5.573 3. 1984. FIGURES Figures have been rounded off to the nearest rupee. EVENTS AFTER THE BALANCE SHEET DATE The Board of Directors of the Group has proposed a final cash dividend for the year ended 30 September 2014 of Rs.00 per share). 6. 03 January 2015 Lahore Director Director Annual Report 2014 | 147 . as the Chief Executive Officer is for the time being not in Pakistan.00 per share (2013: Rs.244 The average and total number of employees are as follows: Average number of employees during the year 1.035 981 Total number of employees as at 30 September 760 741 48 DATE OF AUTHORIZATION FOR ISSUE 49 50 Subsidiary Company These consolidated financial statements were authorized for issue on 03 January 2015 by the Board of Directors of the Group.Notes to the Consolidated Financial Statements For the year ended 30 September 2014 2014 2013 47 NUMBER OF EMPLOYEES Holding Company The average and total number of employees are as follows: Average number of employees during the year 4. 51 GENERAL Statement under section 241(2) of the Companies Ordinance.534 3. These consolidated statements have been signed by two Directors instead of Chief Executive Officers and one Director.886 Total number of employees as at 30 September 3.

Notes 148 | JDW Group .

/Ms.Proxy Form JDW Sugar Mills Limited 25th Annual General Meeting Folio No. 2015 Witnesses: 1. Royal Palm. vide Registered Folio/CDC or failing him / her. as my/our proxy to vote for me/us and on my/our behalf at the 25th Annual General Meeting of the Company to be held at Summit Hall. Signature Name: CNIC: Address: Affix Revenue stamp of Rupees Five 2. Golf & Country Club. and at any adjournment thereof or of any ballot to be taken in consequence thereof.10 each.m. in order to be effective. 52–Canal Bank Road. January 31. Lahore on Saturday. 2015 at 9:00 a./CDC A/c No. hereby appoint Mr. signed and witnessed as required. a member of the Company. Annual Report 2014 | 149 . Signature Signature by Member(s) Name: CNIC: Address: Note: All proxies. I/We of in the district of holding being a member/members of JDW Sugar Mills Limited shares of Rs. of A/c No. must be received at the Company’s Registered Office not less than forty eight (48) hours before the time fixed for holding the Annual General Meeting and must be duly stamped. Signed this day of January.

AFFIX CORRECT POSTAGE The Company Secretary JDW Sugar Mills Limited Registered Office: 17– Abid Majeed Road. Lahore Cantt. . Pakistan.

.

26 | JDW Sugar Mills Limited .