Nishat Mills (1)

8/18/2019 Nishat Mills (1)

1/12

Nishat Mills Limited

2014’s Annual Report

of Nishat Mills Limited

By Hijab aheed


2/12


3/12

condition. )reehold land and capital #ork5in5progress are stated at cost less any

recogni(ed impairment loss. *ubse3uent costs are included in the asset$s carrying

amount or recogni(ed as a separate asset% as appropriate% only #hen it is probable

that uture economic beneits associated #ith the item #ill lo# to the Company and

the cost o the item can be measured reliably. +ll other repair and maintenance costs

are charged to proit and loss account during the period in #hich they are incurred.

Property% plant and e3uipment include operating ixed assets and

capital #ork in progress. &perating ixed assets are urther categori(ed into o#ned

and leased. )reehold land% buildings on reehold land% Plant and machinery% stand by

e3uipment% electric installations% actory e3uipment% computer e3uipment% vehicles

and urniture% ixtures : oice e3uipment are o#ned ixed assets% #hile some plant

and machinery are leased.

• 0epreciation

0epreciation on property% plant and e3uipment is charged to proit and

loss account applying the reducing balance method so as to #rite o the cost 4depreciable amount o the assets over their estimated useul lives. The Company

charges the depreciation on additions rom the date #hen the asset is available or

use and on deletions up to the date #hen the asset is de5recogni(ed. The residual

values and useul lives are revie#ed by the management% at each inancial year5end

and ad,usted i impact on depreciation is signiicant.

/uildings% plant and machinery% stand by e3uipment% electric

installations% actory e3uipment% urniture% ixtures : e3uipment have 18;

depreciation rate. Computer e3uipment has


4/12

Intangible assets include ranchise and computer sot#are. These are

amorti(ed at the rate o '8;.

orkers$ proit participation und and

>orkers$ #elare und. )rom these Income tax is an estimated liability.

• *hort term borro#ings

It includes *hort term running inances% *tate /ank o Pakistan 6*/P7 reinance%

Temporary bank overdrats and other short term borro#ings. *hort term running

inances rates o mark5up range rom !.9"; to 1'.'"; per annum on the balance&utstanding. *tate bank o Pakistan reinances rates o markup range rom ?.@8; to

?.!8; per annum on the balance outstanding. These inances are obtained rom

banking companies under markup arrangements and are secured against ,oint pari

passu hypothecation charge on all present and uture current assets% other

instruments and ranking hypothecation charge on plant and machinery and pledge o

cotton o the Company.

• Contingencies

The Company is contingently liable on account o central excise duty not

ackno#ledged as debt as the case is pending beore Court.

Postdated che3ues are issued to customs authorities in respect o duties on imported

items availed on the basis o consumption and export plans. I documents o exports

are not provided on due dates% che3ues issued as security shall be encashable.

-uarantees are given by the banks o the Company to *ui Northern -as Pipelines

Limited against gas connections% *hell Pakistan Limited and Pakistan *tate &il

Limited against purchase o urnace oil% 0irector 2xcise and Taxation% Aarachi

<

Nishat Mills Limited '819


5/12

against inrastructure% Pakistan +rmy against ulilment o sales order and Pun,ab

Po#er 0evelopment /oard or issuance o Letter o Interest to set up an electricity

generation acility.

Nishat Linen 6Private7 Limited 5 *ubsidiary Company is contesting sales tax

demands o upees ".'


6/12

paid ordinary shares o upees 18 each% e3uity held 1shares. nited /ank Limited5upees 18 each in Lalpir Po#er Limited #hereby. &rdinary shares o Lalpir Po#er

Limited are no# listed on the Aarachi *tock 2xchange Limited and Lahore *tock2xchange Limited. Investments in Lalpir Po#er Limited and Pakgen Po#er

Limited include ""8 and "88 shares respectively% held in the name o nominee

director o the olding Company. 0.-. Ahan Cement Company Limited

1

e3uity held '?.?8;Pakgen Po#er Limited518'%"'9%@'? ully paid ordinary shares

o upees 18 each% e3uity held '@."";. Nishat Paper Products Company Limited5

11%B


7/12

Pak Au#ait Investment Company 6Private7 Limited. +ccording to the lease

agreement% leasing company has contributed upees 1"8.89@ million rom its o#n

sources and the remaining amount o upees 19!.!"< million has been inanced

under Long Term )inance )acility 6LT))7 scheme o *tate /ank o Pakistan.

Minimum lease payments have been discounted using implicit interest rate rangingrom !.@8; to 1'.1"; per annum. /alance rentals are payable in 3uarterly

instalments. Taxes% repairs and insurance costs are borne by the olding Company.

These are secured against the leased assets and demand promissory notes.

@. Cash lo# statementsThe operating activities in cash lo# statement had proit beore taxation and

urther ad,ustments #ere done in them. Those urther ad,ustments included adding

deprecation as it is a non5cash expense% deducting o Provision or slo# moving

stores% spare parts and loose tools% deducting Net exchange gain on or#ardcontracts% deducting -ain on sale o property% plant and e3uipment% deducting -ain

on sale o investment% deducting 0ividend Income% deducting Proit on deposits #ith

banks% deducting *hare o proit rom associated companies% and adding inance

costs. +ter things #orking capital ad,ustments #ere made. There #as an increase in

current assetsD stores% spares parts% and loose tools% stock in trade% trade debts% short

term deposits and prepayments% and other receivables. There #as deduction by the

amount these assets #ere increased. Loans and advances 6Current assest7 #ere

decreased so they #ere being added to the amount. +s ar as current liabilities are

concerned% trade and other payables #ere increased so they #ere being added. There

#as a cash outlo# in the operating activities o Nishat Mills Limited.

B



8/12

@



9/12

?



10/12

!



11/12

18



12/12

11


Documents

Nishat Mills (1)