CONTENTS_2009.pdf · 2012. 2. 14. · 1,168,958 TOTAL ASSETS 3,907,952 3,805,687 CHIEF EXECUTIVE DIRECT OR (Rupees in thousand) EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorized

CONTENTS3

4

5

6

7

8

9

10

15

1

Corporate Information

Directors’ Report

Condensed Interim Balance Sheet

Condensed Interim Profit & Loss Account

Condensed Interim Statement of Comprehensive Income

Condensed Interim Cash Flow Statement

Condensed Interim Statement of Changes in Equity

Notes to the Condensed Interim Financial Statements

Condensed Consolidated Interim Financial Statements

ITTEHAD CHEMICALS LIMITEDCONDENSED INTERIM FINANCIAL STATEMENTSFOR THE PERIOD ENDED SEPTEMBER 30, 2009(UN-AUDITED)

2

3

On behalf of the Board of Directors of Ittehad Chemicals Limited, I am pleased to present the un-audited financial statements of the Company for the quarter ended September 30, 2009.

Financial Results

During this quarter, due to stiff market competition, pathetic economic conditions prevailing in the country and non availability of gas and power to the industries, the business operations of the Company have been adversely affected. During the period under review, sales of the Company remained under pressure and dropped by 14% over the corresponding period of last year, which has ultimately resulted in the decline in the overall profitability of the Company.

The key financial indicators of the company for the quarter ended September 30, 2009 are as follows:

DIRECTORS’ REPORT

Due to decrease in sales, the gross profit has dropped by 3% compared to the corresponding period of last year. Operating profit of the Company stood at Rs. 113.762 million compared to Rs. 136.718 million for the corresponding period of last year. During the period, profit before and after tax has plunged by 28 % and 27 % respectively compared to the corresponding quarter of last year. As a consequence the Earning per share of the Company has also gone down by 26%.

To combat the current economic situation and all the above challenges, management will continue its focus on improving its operational performance, developing competitive marketing strategies, reducing costs and improving efficiencies.

We appreciate the Company's staff for their continuous dedication and support. We also express our gratitude to our shareholders, bankers, customers and suppliers, for their continued support and cooperation for the prosperity of the Company.

On behalf of the Board

Muhammad Siddique Khatri

Chief Executive October 27, 2009Lahore

Increase(Decrease)

4

AS AT SEPTEMBER 30, 2009 - (UN-AUDITED)CONDENSED INTERIM BALANCE SHEET

September 30, June 30,2009 2009

Note (Un-audited) (Audited)

ASSETSNON CURRENT ASSETS

Property, plant and equipmentOperating fixed assets 6 2,389,297 2,422,693Capital work in progress 7 43,486 32,919

2,432,783 2,455,612Intangible assets 2,814 3,310Investment properties 78,700

78,700Long term investments 87,880

87,786Long term deposits 11,321

11,3212,613,498

2,636,729CURRENT ASSETS

Stores, spares and loose tools 386,748

341,790Stock in trade 214,177

105,732Trade debts 528,398

573,001Loans and advances 68,954

61,151Trade deposits and short term prepayments 15,381

14,120Other receivables 5,158

1,404Tax refunds due from Government 7,401

45,723Taxation - net 5,413

-Cash and bank balances 62,824

26,0371,294,454

1,168,958TOTAL ASSETS 3,907,952

3,805,687

CHIEF EXECUTIVE DIRECTOR

(Rupees in thousand)

EQUITY AND LIABILITIESSHARE CAPITAL AND RESERVES

Authorized share capital 8.1 750,000

750,000

Issued, subscribed and paid up capital 8.2 360,000

360,000Reserves 533,031

530,505Shareholders' equity 893,031

890,505

SURPLUS ON REVALUATION OF FIXED ASSETS 749,059

749,059

NON CURRENT LIABILITIESLong term financing 9 101,389

18,750Long term diminishing musharaka 10 499,999

583,333Long term murabaha 11 233,333

272,222Deferred liabilities 356,009

357,5281,190,730 1,231,833

CURRENT LIABILITIESTrade and other payables 519,701 445,311Markup accrued 26,712 72,387Short term borrowings 250,906 130,143Current portion of long term liabilities 277,813 276,193Provision for taxation - net - 10,256

1,075,132 934,290CONTINGENCIES AND COMMITMENTS 12 - -TOTAL EQUITY AND LIABILITIES 3,907,952 3,805,687

The annexed notes from 1 to 17 form an integral part of these financial statements.

5

FOR THE PERIOD ENDED SEPTEMBER 30, 2009 - (UN-AUDITED)CONDENSED INTERIM PROFIT AND LOSS ACCOUNT

September 30, September 30,Note 2009 2008

Sales - net 740,845

858,691Cost of sales 13 (544,987)

(656,821)

Gross profit 195,858

201,870

Selling and distribution expenses (54,267) (38,049)General and administrative expenses (27,700) (23,770)Other operating expenses (4,753) (6,132)Other operating income 4,624

2,799

(82,096)

(65,152)

Operating profit 113,762

136,718

Financial charges (55,142)

(55,156)Profit before taxation 58,620

81,562

Taxation (20,188)

(29,183)

Profit after taxation 38,432

52,379

15 1.07

1.45




Earning per share - basic and

diluted (Rupees)

Quarter ended

6

September 30,

2009

September 30,

2008

Profit for the period 38,432

52,379

Other comprehensive incomeSurplus / (deficit) on remeasurement of

available for sale financial assets 94

(261)

Total comprehensive income for the period 38,526

52,118


Quarter ended


CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME - (UN-AUDITED)FOR THE QUARTER ENDED SEPTEMBER 30, 2009


7

CONDENSED INTERIM CASH FLOW STATEMENTFOR THE PERIOD ENDED SEPTEMBER 30, 2009 - (UN-AUDITED)

September 30, September 30,2009 2008

CASH FLOW FROM OPERATING ACTIVITIESProfit before taxation 58,620 81,562Adjustments for items not involving movement of funds:

Depreciation 44,989 42,645Amortization of intangible assets 496

414Provision for gratuity 491

491Gain on sale of fixed assets (119)

(49)Financial charges 55,142

55,156Net cash flow before working capital changes 159,619

180,219

Decrease / (increase) in current assetsStores, spares and loose tools (44,958)

(43,886)Stock in trade (108,445)

(35,184)Trade debts 44,603

(187,133)Loans and advances (7,803)

(9,738)Trade deposits and short term prepayments (1,261)

(39,351)Other receivables (3,754)

111(121,618)

(315,181)Increase in current liabilities

Trade and other payables 78,034

153,514Cash generated from operations 116,035 18,552

Income taxes paid (2,924) (6,775)Gratuity paid (266) (223)Financial charges paid (100,817)

(81,575)

Net cash inflow from operating activities 12,028

(70,021)

CASH FLOW FROM INVESTING ACTIVITIESAdditions to operating fixed assets-net (12,000)

(14,919)Additions to capital work in progress (10,567)

(11,951)Proceeds from sale of operating fixed assets 527

155Long term investments -

(23,000)Net cash (used in) investing activities (22,040)

(49,715)

CASH FLOW FROM FINANCING ACTIVITIESProceeds from long term financing 100,000

-Repayment of long term financing (15,625)

(15,625)Repayment of long term diminishing musharaka (83,334)

-Repayment of long term murabaha (38,889)

-Repayment of liabilities against assets subject to finance lease (116)

(98)Dividend paid (36,000) -Short term borrowings 120,763 148,585

Net cash inflow / (outflow) from financing activities 46,799 132,862Net increase in cash and cash equivalents 36,787 13,126Cash and cash equivalents at the beginning of the period 26,037 40,859Cash and cash equivalents at the end of the period 62,824 53,985



Quarter ended


8

FOR THE PERIOD ENDED SEPTEMBER 30, 2009 - (UN-AUDITED)CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY

Issued, subscribed and paid-up capital

Capital reserve - Fair value reserve

Unappropriated profits

Total

Balance as at July 1, 2008 360,000

699

414,951

775,650

Total comprehensive income for the period -

(261)

52,379

52,118

Balance as at September 30, 2008 360,000

438

467,330

827,768

Dividend paid - - (54,000) (54,000)

Total comprehensive income for the period -

(60)

116,797

116,737

Balance as at June 30, 2009 360,000

378

530,127

890,505

Dividend paid -

-

(36,000)

(36,000)

Total comprehensive income for the period - 94 38,432 38,526

Balance as at September 30, 2009 360,000 472 532,559 893,031




9

FOR THE PERIOD ENDED SEPTEMBER 30, 2009 - (UN-AUDITED)NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

1. NATURE AND STATUS OF BUSINESS

2. STATEMENT OF COMPLIANCE

Ittehad Chemicals Limited (the Company) was incorporated on September 28, 1991 to takeover theassets of Ittehad Chemicals and Ittehad Pesticides under a Scheme of Arrangement dated June 18, 1992as a result of which the Company became a wholly owned subsidiary of Federal Chemical and CeramicsCorporation (Private) Limited. The Company was privatized on July 03, 1995 when 90% of the shareswere transferred to the buyer.

The Company was listed on Karachi Stock Exchange on April 14, 2003 when sponsors of the Companyoffered 25% of the issued, subscribed and paid up shares of the Company to the general public.

The registered office of the Company is situated at 39, Empress Road, Lahore. The Company is engagedin business of manufacturing and selling caustic soda and other allied chemicals.

These condensed interim financial statements are unaudited and are being submitted to the shareholdersas required under Section 245 of the Companies Ordinance, 1984.

These condensed interim financial statements have been prepared in accordance with approvedaccounting standards as applicable in Pakistan. Approved accounting standards comprise of suchInternational Financial Reporting Standards (IFRS) issued by the International Accounting StandardBoard as are notified under the Companies Ordinance, 1984, provisions of and directives issued underthe Companies Ordinance, 1984. In case requirements differ, the provisions or directives of theCompanies Ordinance, 1984 shall prevail.

The disclosures made in these condensed interim financial statements have, however, been limited inaccordance with the requirements of the International Financial Reporting Standards (IFRS) IAS - 34,Interim Financial Reporting. They do not include all the information and disclosures made in the annualpublished financial statements and should be read in conjunction with the financial statements of theCompany for the year ended June 30, 2009.

These condensed interim financial statements have been presented in Pakistan Rupees, which is thefunctional currency of the Company.

3. ACCOUNTING POLICIES

4. TAXATION

Income tax expense is recognized based on management's best estimate of the weighted average annualincome tax rate expected for the full financial year.

The accounting policies adopted and methods of computation followed in the preparation of thesefinancial statements are the same as those of the preceding published annual financial statements for theyear ended June 30, 2009.

10

5. ESTIMATES

September 30, June 30,

2009 2009

(Unaudited) (Audited)

Note

6 OPERATING FIXED ASSETS

2,422,693

2,316,478

Additions during the period / year 6.1 12,000

294,625

2,434,693 2,611,103

Disposals during the period / year 6.2 (407) (316)

Depreciation charged during the period / year (44,989) (188,094)

(45,396) (188,410)

Closing book value 2,389,297 2,422,693

The preparation of condensed interim financial statements requires management to make judgments,estimates and assumptions that affect the application of accounting policies and the reported amounts ofassets and liabilities, income and expenses. Actual results may differ from these estimates. Thesignificant judgments made by management in applying the Company's accounting policies and keysources of estimation of uncertainty are the same as those that were applied to the financial statementsfor the year ended June 30, 2009.

Opening book value


6.1 Details of additions during the period / year are as follows:

Owned assets: Freehold land - 106,287

Building on freehold land - 7,636

Plant and machinery 8,573 163,265

Other equipment 906 1,021

Furniture and fixtures 18 249 Office and other equipment 409 4,891 Vehicles 2,094 11,276

12,000 294,625

6.2 Details of disposals during the period / year are as follows:

Vehicles 407

316

7 CAPITAL WORK-IN -PROGRESS

Plant and machinery 42,915

32,487

Building 571

432

43,486

32,919

7.1 Nothing (June 30, 2009: Rs. 128.711 million) has been transferred to operating fixed assets during theperiod.

11


2009 2009


8 SHARE CAPITAL

8.1 Authorized share capital

50,000,000 (June 30, 2009: 50,000,000)

ordinary shares of Rs. 10/- each 500,000

500,000

25,000,000 (June 30, 2009: 25,000,000)

preference shares of Rs. 10/- each 250,000

250,000

750,000

750,000

8.2 Issued, subscribed and paid up share capital

100,000 ordinary shares (June 30, 2009: 100,000)

fully paid in cash 1,000 1,000

24,900,000 (June 30, 2009: 24,900,000) issued for

consideration other than cash 249,000 249,000

11,000,000 (June 30, 2009: 11,000,000)

fully paid bonus shares 110,000 110,000

360,000 360,000


9 LONG TERM FINANCING

From banking companies and financial institutions- secured

Balance as at July 01

Obtained during the period / year

Repayments made during the period / year

Current portion shown under current liabilities

10 LONG TERM DIMINISHING MUSHARAKA





11 LONG TERM MURABAHA

From banking companies - secured




50,000 100,000

100,000 -

150,000 100,000

(15,625) (50,000)

134,375 50,000

(32,986) (31,250)

101,389 18,750

750,000 750,000

(83,334)

-

666,666 750,000

(166,667) (166,667)

499,999

583,333

350,000

350,000

(38,889) -

311,111 350,000

(77,778) (77,778)

233,333 272,222

12

12 CONTINGENCIES AND COMMITMENTS

12.1 Contingent liabilities

a)

b)

The Company is facing claims,the event of an adverse decision2009: Rs. 2.947 million) against these claims.

Letters of guarantee outstanding198.240 million) and corporateRs. 203 million (June 30, 2009: 203 million)

launched in the labour courts, pertaining to staff retirement benefits. Inthe Company would be required to pay an amount of Rs. 2.947 (June 30,

as at September 30, 2009 were Rs. 198.226 million (June 30, 2009: Rs.guarantee on behalf of Chemi Chloride Industries Limited amounted to

12.2 Commitments

Commitments as on September 30, 2009 were as follows:

a)

b)

13 COST OF SALES

September 30, September 30,

2009 2008

Raw materials consumed 92,221

111,657

Other overheads

Salaries, wages and other benefits 40,237 34,923

Stores, spares and consumables 27,566 54,087

Packing materials consumed 1,766

4,524

Fuel and power 375,721

444,358

Repair and maintenance 14,084

4,599

Insurance 2,212

2,117

Vehicle running expenses 3,282

2,825

Postage, printing and stationery 235

381

Depreciation 43,681

41,581

Other expenses 855

746

509,639

590,141

Opening work in process 4,384

3,694

Closing work in process (4,789)

(3,694)

(405) -

Cost of goods manufactured 601,455 701,798

Opening stock of finished goods 53,587 46,537

Closing stock of finished goods (110,055) (91,514)

(56,468) (44,977)

544,987 656,821

Against letters of credit outstanding amounting to Rs. 111.229 million (June 30, 2009: Rs. 128.073million)

Quarter ended


Against purchase of land amounting to Rs.1.838 million (June 30, 2009: Rs 1.838 million).

(Un-audited)

13


14 TRANSACTIONS WITH RELATED PARTIES


2009 2008

Relationship with Nature of transaction

the Company

Associated company Marketing services charges 7,991 8,646

Subsidiary / Associated companies Sales of good and services 12,905 5,371

Subsidiary company Land rentals 12,000 12,000

Subsidiary company Loans and advances made 19,833 5,634

Subsidiary company Mark up on loans and advances 813 401

Retirement benefit plans Contribution to staff retirement

benefit plans 47 41

Key management personnel Remuneration and other benefits 12,079 9,084

15 EARNINGS PER SHARE - BASIC AND DILUTED

Profit after taxation - (Rupees in thousand) 38,432

52,379

Weighted average number of ordinary shares (in thousands) 36,000

36,000

Earnings per share - (Rupees) 1.07

1.45

16 DATE OF AUTHORIZATION

17 GENERAL

Amounts have been rounded off to the nearest rupees in thousand unless otherwise stated.

These financial statements were authorized for issue on October 27, 2009 by the Board of Directors of theCompany.

There is no dilutive effect on the basic earnings per share of the Company, which is based on:

The related parties comprise of related group companies, local associated companies, staff retirementfunds, directors and key management personnel. Transactions with related parties and remuneration andbenefits to key management personnel under the term of their employment are as follows:

(Un-audited)

Quarter ended


14

CONTENTS17

18

19

20

21

22

23

Directors’ Report on Consolidated Financial Statements

Condensed Consolidated Interim Balance Sheet

Condensed Consolidated Interim Profit & Loss Account

Condensed Consolidated Interim Statement of Comprehensive Income

Condensed Consolidated Interim Cash Flow Statement

Condensed Consolidated Interim Statement of Changes in Equity

Notes to the Condensed Consolidated Interim Financial Statements

ITTEHAD CHEMICALS LIMITEDCONDENSED CONSOLIDATEDINTERIM FINANCIAL STATEMENTSFOR THE PERIOD ENDED SEPTEMBER 30, 2009(UN-AUDITED)

15

16

On behalf of the Board of Directors, I am pleased to present to you, the un-audited

consolidated financial statements of the Company and its subsidiary, Chemi

Chloride Industries Limited (CCIL) for the first quarter ended September 30, 2009.

The Directors' Report on the performance of Ittehad Chemicals Limited (ICL), for

the first quarter ended September 30, 2009, has been presented separately.

During the period under review, CCIL has attained net sales of Rs. 46.984 million as

compared to the sales of Rs. 6.209 million for the corresponding period of last year.

The Company has earned gross profit of Rs. 15.939 million as compared to gross

profit of Rs. 1.326 million for the corresponding quarter of last year. During the

period under review, CCIL has posted profit before tax of Rs. 1.136 million and

profit after tax of Rs. 0.988 million. The subsidiary Company has therefore reported

earning per share of Re. 0.11 for the period under review, whereas group's earning

per share is Rs. 1.07.

We take this opportunity to thank all our customers, shareholders, bankers,

employees and workers for their continued cooperation and support.

DIRECTORS’ REPORT ONCONSOLIDATED FINANCIAL STATEMENTS

On behalf of the Board

Muhammad Siddique Khatri

Chief Executive October 27, 2009Lahore

17

AS AT SEPTEMBER 30, 2009 - (UN-AUDITED)CONDENSED CONSOLIDATED INTERIM BALANCE SHEET


2009 2009

Note (Un-audited) (Audited)

ASSETS

NON CURRENT ASSETS

Property, plant and equipment

Operating fixed assets 6 2,560,878 2,598,293

Capital work in progress 7 43,486 32,919

2,604,364 2,631,212

Intangible assets 2,814 3,310

Goodwill 6,445 6,445

Investment properties 61,200

61,200

Long term investments 480

386

Long term deposits 12,186

12,186

2,687,489

2,714,739

CURRENT ASSETSStores, spares and loose tools 390,437

344,471

Stock in trade 237,476

128,307

Trade debts 566,348

601,687

Loans and advances 60,148

50,511

Trade deposits and short term prepayments 16,459

14,409

Other receivables 12

12

Tax refunds due from Government 13,404

45,723

Taxation - net 6,274

-

Cash and bank balances 62,861

26,494

1,353,419

1,211,614

TOTAL ASSETS 4,040,908 3,926,353

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVESAuthorized share capital 8.1 750,000

750,000

Issued, subscribed and paid up capital 8.2 360,000

360,000

Reserves 481,022

478,408

841,022

838,408

Minority interest 5,161

4,261

846,183

842,669

SURPLUS ON REVALUATION OF FIXED ASSETS 748,559

748,559

NON CURRENT LIABILITIESLong term financing 9 195,365 128,058

Long term diminishing musharaka 10 499,999 583,333

Long term murabaha 11 233,333 272,222

Deferred liabilities 356,009 357,528

1,284,706 1,341,141

CURRENT LIABILITIESTrade and other payables 528,984 448,247

Markup accrued 29,629 74,560

Short term borrowings 287,858 152,327

Current portion of long term liabilities 314,989 309,263

Provision for taxation - net - 9,587

1,161,460 993,984

CONTINGENCIES AND COMMITMENTS 12 - -

TOTAL EQUITY AND LIABILITIES 4,040,908 3,926,353



18


FOR THE PERIOD ENDED SEPTEMBER 30, 2009 - (UN-AUDITED)CONDENSED CONSOLIDATED INTERIM PROFIT AND LOSS ACCOUNT


Note 2009 2008

Sales - net 775,389

861,182

Cost of sales 13 (562,095)

(656,486)

Gross profit 213,294

204,696

Selling and distribution expenses (64,393)

(39,168)

General and administrative expenses (27,788)

(24,017)

Other operating expenses (4,776)

(6,629)

Other operating income 2,329 729

(94,628) (69,085)

Operating profit 118,666

135,611

Financial charges (58,911)

(57,912)

Profit before taxation 59,755

77,699

Taxation (20,335)

(29,257)

Profit after taxation 39,420

48,442

Minority Interest - share of (profit) / loss (900)

(191)

Profits attributable to equity holders of parent 38,520

48,251

Earning per share - basic anddiluted (Rupees) 15 1.07 1.34




Quarter ended

19

September

30, 2009

September

30, 2008

Profit for the period 38,520 48,251

Other comprehensive incomeSurplus / (deficit) on remeasurement of

available for sale financial assets 94 (261)

Total comprehensive income for the period 38,614 47,990


Quarter ended


CONDENSED CONSOLIDATED INTERIM STATEMENT OFCOMPREHENSIVE INCOME - (UN-AUDITED)FOR THE QUARTER ENDED SEPTEMBER 30, 2009


20

CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTFOR THE PERIOD ENDED SEPTEMBER 30, 2009 - (UN-AUDITED)

September 30, September 30,2009 2008

CASH FLOW FROM OPERATING ACTIVITIESProfit before taxation 59,755

77,699Adjustments for items not involving movement of funds:

Depreciation 49,235

47,672Amortization of intangible assets 496

414Provision for gratuity 491

491Gain on sale of fixed assets (119)

(49)Loss on foreign exchange -

478Financial charges 58,911

57,912Net cash flow before working capital changes 168,769

184,617

Decrease / (increase) in current assetsStores, spares and loose tools (45,966)

(44,142)Stock in trade (109,169)

(46,392)Trade debts 35,339

(184,535)Loans and advances (9,637)

(22,325)Trade deposits and short term prepayments (2,050)

(40,023)Other receivables -

(20)Tax refunds due from Government (6,003)

-(137,486)

(337,437)

Increase in current liabilitiesTrade and other payables 84,381 152,994

Cash generated from operations 115,664 174Income taxes paid (3,263)

(6,905)

Gratuity paid (266)

(223)

Financial charges paid (103,842)

(84,303)Net cash inflow from operating activities 8,293

(91,257)

CASH FLOW FROM INVESTING ACTIVITIESAdditions to operating fixed assets-net (12,227)

(14,919)Additions to capital work in progress (10,567)

(11,951)Proceeds from sale of operating fixed assets 527

155Net cash (used in) investing activities (22,267)

(26,715)

CASH FLOW FROM FINANCING ACTIVITIESProceeds from long term financing 100,000

-Repayment of long term financing (26,851)

(17,625)Repayment of long term diminishing musharaka (83,334)

-Repayment of long term murabaha (38,889)

-Repayment of liabilities against assets subject to finance lease (116)

(98)Dividend paid (36,000)

-Short term borrowings 135,531 148,585

Net cash inflow / (outflow) from financing activities 50,341 130,862Net increase in cash and cash equivalents 36,367 12,890Cash and cash equivalents at the beginning of the period 26,494 42,070Cash and cash equivalents at the end of the period 62,861 54,960



Quarter ended


21

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NOTES TO THE CONDENSED CONSOLIDATEDINTERIM FINANCIAL STATEMENTSFOR THE PERIOD ENDED SEPTEMBER 30, 2009 - (UN-AUDITED)

1. NATURE AND STATUS OF BUSINESS

2. STATEMENT OF COMPLIANCE

These condensed consolidated interim financial statements include financial statements of IttehadChemicals Limited (Holding company) and Chemi Chloride Industries Limited (Subsidiary company), inwhich holding company has 95% shareholding.

These condensed consolidated interim financial statements have been prepared in accordance withapproved accounting standards as applicable in Pakistan. Approved accounting standards comprise ofsuch International Financial Reporting Standards (IFRS) issued by the International AccountingStandard Board as are notified under the Companies Ordinance, 1984, provisions of and directives issuedunder the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of theCompanies Ordinance, 1984 shall prevail.

The disclosures made in these condensed consolidated interim financial statements have, however, beenlimited in accordance with the requirements of the International Financial Reporting Standards (IFRS)IAS - 34, Interim Financial Reporting. They do not include all the information and disclosures made inthe annual published financial statements and should be read in conjunction with the financial statementsof the Company for the year ended June 30, 2009.

These condensed consolidated interim financial statements have been presented in Pakistan Rupees,which is the functional currency of the Company.

Ittehad Chemicals Limited (the Company) was incorporated on September 28, 1991 to takeover theassets of Ittehad Chemicals and Ittehad Pesticides under a Scheme of Arrangement dated June 18, 1992as a result of which the Company became a wholly owned subsidiary of Federal Chemical and CeramicsCorporation (Private) Limited. The Company was privatized on July 03, 1995 when 90% of the shareswere transferred to the buyer.

The Company was listed on Karachi Stock Exchange on April 14, 2003 when sponsors of the Companyoffered 25% of the issued, subscribed and paid up shares of the Company to the general public.

The registered office of the Company is situated at 39, Empress Road, Lahore. The Company is engagedin business of manufacturing and selling caustic soda and other allied chemicals.

3. ACCOUNTING POLICIES

4. TAXATION

The accounting policies adopted and methods of computation followed in the preparation of thesefinancial statements are the same as those of the preceding published annual financial statements of thegroup for the year ended June 30, 2009.

Income tax expense is recognized based on management's best estimate of the weighted average annualincome tax rate expected for the full financial year.

23

5. ESTIMATES


2009 2009


Note

6 OPERATING FIXED ASSETS

2,598,293

2,523,899

Additions during the period / year 6.1 12,227

294,221

2,610,520

2,818,120

Disposals during the period / year 6.2 (407)

(13,553)

Depreciation charged during the period / year (49,235)

(206,274) (49,642) (219,827)

Closing book value 2,560,878

2,598,293

6.1 Details of additions during the period / year are as follows:

Owned assets: Freehold land - 105,787

Building on freehold land - 7,636

Plant and machinery 8,573 163,265

Other equipment 906 1,021

The preparation of condensed interim financial statements requires management to make judgments,estimates and assumptions that affect the application of accounting policies and the reported amounts ofassets and liabilities, income and expenses. Actual results may differ from these estimates. Thesignificant judgments made by management in applying the Company's accounting policies and keysources of estimation of uncertainty are the same as those that were applied to the financial statementsfor the year ended June 30, 2009.

Opening book value


Furniture and fixtures 18 249 Office and other equipment 636 4,987 Vehicles 2,094 11,276

12,227 294,221

6.2 Details of disposals during the period / year are as follows:

Plant and machinery -

13,237

Vehicles 407

316

407

13,553

7 CAPITAL WORK-IN -PROGRESS

Plant and machinery 42,915

32,487

Building 571

432

43,486

32,919

7.1 Nothing (June 30, 2009: Rs. 128.711 million) has been transferred to operating fixed assets during theperiod.

24


2009 2009


8 SHARE CAPITAL

8.1 Authorized share capital

50,000,000 (June 30, 2009: 50,000,000)

ordinary shares of Rs. 10/- each 500,000

500,000

25,000,000 (June 30, 2009: 25,000,000)

preference shares of Rs. 10/- each 250,000

250,000

750,000 750,000

8.2 Issued, subscribed and paid up share capital

100,000 ordinary shares (June 30, 2009: 100,000)

fully paid in cash 1,000 1,000

24,900,000 (June 30, 2009: 24,900,000) issued for

consideration other than cash 249,000 249,000

11,000,000 (June 30, 2009: 11,000,000)

fully paid bonus shares 110,000 110,000

360,000 360,000


9 LONG TERM FINANCING


Balance as at July 01 162,568 230,010

Obtained during the period / year 100,000 -

262,568 230,010

Repayments made during the period / year (16,851) (67,442)

245,717 162,568

From directors and others - unsecured


Obtained during the period / year -

6,000

Repayments made during the period / year (10,000) -

19,810 29,810

265,527 192,378

Current portion shown under current liabilities (70,162) (64,320)

195,365 128,058

10 LONG TERM DIMINISHING MUSHARAKA



Repayments made during the period / year (83,334)

-

666,666 750,000


499,999 583,333

25


2009 2009


11 LONG TERM MURABAHA

From banking companies - secured

Balance as at July 01 350,000

350,000

Repayments made during the period / year (38,889)

-

311,111

350,000


233,333 272,222

12 CONTINGENCIES AND COMMITMENTS

12.1 Contingent liabilities

a) The Company is facing claims, launched in the labour courts, pertaining to staff retirement benefits. Inthe event of an adverse decision the Company would be required to pay an amount of Rs. 2.947 (June 30,2009: Rs. 2.947 million) against these claims.


b)

12.2 Commitments

Commitments as on September 30, 2009 were as follows:

a)

b)

Against letters of credit outstanding amounting to Rs. 117.643 million (June 30, 2009: Rs. 128.073million)

Against purchase of land amounting to Rs.1.838 million (June 30, 2009: Rs 1.838 million).

Letters of guarantee outstanding as at September 30, 2009 were Rs. 198.226 million (June 30, 2009: Rs.198.240 million).

13 COST OF SALES

Raw materials consumed 91,842

111,139

Other overheads

Salaries, wages and other benefits 42,693

36,706

Stores, spares and consumables 30,588

55,487

Packing materials consumed 2,700

4,532

Fuel and power 379,639

446,195

Repair and maintenance 15,228

4,688

Insurance 2,353

2,246

Vehicle running expenses 3,282

2,825

Postage, printing and stationery 242

381

Depreciation 47,905

46,554

Other expenses 855

746

525,485

600,360

Opening work in process 4,384

3,694

Closing work in process (4,789) (3,694)

(405) -

Cost of goods manufactured 616,922 711,499

Opening stock of finished goods 71,280 48,756

Closing stock of finished goods (126,107) (103,769)

(54,827) (55,013)562,095 656,486

26


2009 2008

(Un-audited)

Quarter ended


14 TRANSACTIONS WITH RELATED PARTIES


2009 2008

Relationship with Nature of transaction

the Company

Associated company Marketing services charges 7,991 8,646

Associated companies Sales of good and services 466 169

Retirement benefit plans Contribution to staff retirement

benefit plans 47 41

Key management personnel Remuneration and other benefits 12,402 9,534

15 EARNINGS PER SHARE - BASIC AND DILUTED

Profit after taxation - (Rupees in thousand) 38,520

48,251

Weighted average number of ordinary shares (in thousands) 36,000

36,000

Earnings per share - (Rupees) 1.07

1.34

16 DATE OF AUTHORIZATION

17 GENERAL

Amounts have been rounded off to the nearest rupees in thousand unless otherwise stated.


These financial statements were authorized for issue on October 27, 2009 by the Board of Directors of theCompany.

There is no dilutive effect on the basic earnings per share of the Company, which is based on:

The related parties comprise of related group companies, local associated companies, staff retirementfunds, directors and key management personnel. Transactions with related parties and remuneration andbenefits to key management personnel under the term of their employment are as follows:

(Un-audited)

Quarter ended


27

28

Documents

CONTENTS_2009.pdf · 2012. 2. 14. · 1,168,958 TOTAL ASSETS 3,907,952 3,805,687 CHIEF EXECUTIVE DIRECT OR (Rupees in thousand) EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorized