GGL Half Year Dec. 2020-21

GGL Half Year Dec. 2020-21Auditors
Mr. Zaid Ghani
Mr. Ibrahim Ghani
Share Registrar Corplink (Pvt) Ltd
Wings Arcade, 1-K Commercial
Model Town, Lahore, Pakistan
Phones : (042) 35916714, 35916719
National Bank of Pakistan
The Bank of Punjab
Dubai Islamic Bank Limited
GHANI GLASS LIMITED01
GGL Plant-2
GGL Plant-3
Fax : (021) 34926349
Thesil & District Haripur (KPK)
Fax : (0995) 639067
Fax : ( 042) 35172263
DIRECTORS' REPORT
On behalf of the Board of Directors
Anwaar Ahmed Khan Director
Assalam-o-Alaikum wa Rahmatullah wa Barakatohu.
The Board of Directors of Ghani Glass Limited is pleased to present the Financial Statements of the Company for the half year ended December 31, 2020 along with review report of auditors thereon.
During the six months ended December 31, 2020, the net revenue of the company has increased to Rupees 10 billion as compared to Rupees 9 billion for the corresponding period of the last year.
Margins increased significantly from top to bottom. The Company recorded gross profit of Rupees 2.6 billion as compared to Rupees 1.5 billion for the same period of the last year .
The company succeeded to earn net profit of Rupees 1.8 billion as compared to Rupees 889 million for first half of the FY2020-21. Earning per share also increased to Rupees 3.38 as compared to Rupees 1.64 for the corresponding period of the last year.
The large-scale manufacturing (LSM) continued recovery and registered a growth of 8.16% (FY2019: -5.3%) upto December 2020 for FY 2021. During the half year ended December 31, 2020, Inflation (CPI) was recorded at 8.6% (half year Dec 2019: 11.1%). YoY inflation reduced to 8.0% in Dec 2020 (2019: 12.6%). Fiscal deficit stood at 1.8% of GDP, whereas the primary surplus improved to 0.5%. From July to December 2020, the Current Account recorded a surplus of 0.8% of GDP (except for deficit for the month of December).
Future outlook
Acknowledgment
The Board and the management would like to thank senior executives of Pharmaceutical, food and beverage industries for their continuous support and confidence on our quality products. Thanks are also due to our dealers and customers of float glass for their trust reposed on our quality products. The Board also appreciates the cooperation of our suppliers, contractors and bankers.
The Board acknowledges and puts on record its sincere appreciation for all employees of the Company for their hard work, commitment and loyalty.
The Board of directors, in its meeting held on December 22, 2020, has approved to issue 55% right shares at par value of Rupees 10 per share. The proceeds of the right issue would be utilized on the project of new float line and Balancing, Modernization and Replacement (BMR) of the other existing lines. The project of new float line would contribute to enhance the production capacity. Commercial Production from the project will come during the last quarter of FY2020-21.
(Rupees in million)
Net Sales 10,317 9,084
Gross Profit 2,559 1,528
1.64
04Half Year Financial Statements 2020-21
INDEPENDENT AUDITORS' REVIEW REPORT To the Members of Ghani Glass Limited Report on Review of Interim Financial Statements
Introduction
We have reviewed the accompanying condensed interim statement of financial position of Ghani Glass Limited as at 31 December 2020 and the related condensed interim statement of profit or loss, condensed interim statement of other comprehensive income, condensed interim statement of changes in equity, condensed interim statement of cash flows and notes to the financial statements for the six-month period then ended (here-in-after referred to as the “interim financial statements”). Management is responsible for the preparation and presentation of these interim financial statements in accordance with accounting and reporting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on these financial statements based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial statements are not prepared, in all material respects, in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting.
Other Matters
The figures of the condensed interim statement of profit or loss, condensed interim statement of other comprehensive income and related notes for the quarter ended 31 December 2020 have not been reviewed, as we are required to review only the cumulative figures for the six-month period ended 31 December 2020.
The interim financial statements for the six-month period ended 31 December 2019 and the annual financial statements for the year ended 30 June 2020 of the Company were reviewed and audited, by another firm of chartered accountants who expressed an unmodified conclusion and opinion on those interim and annual financial statements on 29 February 2020 and 07 October 2020, respectively.
The engagement partner on the audit resulting in this independent auditor's review report is Farooq Hameed.
Lahore : February 26, 2021 EY Ford Rhodes
Chartered Accountants
Current assets
Trade debts
Short term investments
ordinary shares of Rs 10 each
Issued, subscribed and paid up share capital
541,542,666 (30 June 2020: 541,542,666)
ordinary shares of Rs 10 each)
Capital reserves
Share premium
Merger reserve
Revenue reserves
Unappropriated profit
Non-current liabilities
Deferred taxation
Current liabilities
Loan from sponsor directors
CONTINGENCIES AND COMMITMENTS
The annexed notes from 1 to 18 form an integral part of these condensed interim financial statements.
Un-audited Audited 31 December 30 June
Note 2020 2020
CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
_____________ Chief Executive Officer
Chief Financial Officer _____________
31 December 31 December 31 December 31 December
Note 2020 2019 2020 2019
(Rupees) (Rupees)
(7,555,536,485)
(4,230,102,103)
(451,535,514)
(257,400,635)
Other expenses (134,654,043) (59,245,334) (11,720,094) Expected credit loss on trade debts (8,467,588) (73,768,453) (73,768,453) Other income 14,563,329
48,132,377
25,718,892
(763,902,765)
(756,399,636)
(431,086,883)
55,134,407
12,041,032
3.38
1.64
2.21
0.46
Six months ended Three months ended
_____________ Chief Executive Officer Chief Financial Officer
_____________ Lahore
5,798,783,931
(4,108,930,455)
1,698,853,476
(258,132,931)
(99,464,705)
_____________ Lahore
_____________ Director
2020 2019 2020 2019
889,728,192
1,195,422,685
248,481,841
Other comprehensive income
-
-
-
Items that may be reclassified to profit or loss in subsequent periods
-Exchange translation - net of tax 66,185,589 (58,320,478) - (58,320,478)
Total comprehensive income for the period 1,894,625,099
831,407,714
1,195,422,685
190,161,363
Six months ended Three months ended
For the six months ended 31 December 2020
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)
_ _ _ _ _ _
_ _ _ _ _ _ _
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation
- Amortization of intangible assets
- Exchange gain - net
- Gain on disposal of property, plant and equipment
- Finance cost
- Provision for Workers' Welfare Fund
Operating profit before working capital changes
Effect on cash flow due to working capital changes:
(Increase) / decrease in current assets
- Stock in trade
- Stores and spares
- Trade and other payables
Finance costs paid
Net cash generated from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Dividend income received from associate
Net increase in long term advances and deposits
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Loan repaid to directors - net of receipts
Dividend paid
Net cash used in financing activities
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS AT THE END OF PERIOD
31 December
2020 2019
1,863,017,512 815,382,247
_____________ Lahore
_____________ Director
1.1
- Provisions of and directives issued under the Companies Act, 2017.
2.2
2.3
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The accounting policies and methods of computation adopted in the preparation of these condensed interim
financial statements are the same as those applied in the preparation of the financial statements for the year
ended 30 June 2020.
The preparation of condensed interim financial statements requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and reported amount of assets and liabilities,
income and expenses. Actual results may differ from these estimates. The significant judgements made by
management in applying the Company's accounting policies and the key sources of the estimation are the same
as those that applied to the financial statements for the year ended 30 June 2020.
The management has assessed the impact of the COVID-19 on the condensed interim financial statements and
concluded that there is no material financial impact of COVID-19 on the carrying amounts of assets, liabilities,
income or expenses which required specific disclosures.
Statement of compliance
These condensed interim financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for
International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by the International
Accounting Standard Board (IASB) as notified under the Companies Act, 2017; and
These condensed interim financial statements are unaudited but subject to limited scope review by the auditors
and are being submitted to the shareholders as required under Section 237 of the Companies Act, 2017 and the
Listing Regulations of Pakistan Stock Exchange Limited.
These condensed interim financial statements do not include all the information and the disclosures required in
the annual financial statements and should be read in conjunction with annual audited financial statements of the
Company for the year ended 30 June 2020.
Where the provisions of and directives issued under Companies Act, 2017 differ with the requirements of IAS-34,
the provisions of and directives issued under Companies Act, 2017 have been followed.
Provision in respect of taxation, Workers' Profit Participation Fund and Workers' Welfare Fund in these
condensed interim financial statements is estimated and this is subject to final adjustment in the annual financial
statements.
Plant 1 and Regional Marketing Office (North): 22 Km Haripur Taxila Road, District Haripur;
Ghani Glass Limited ("the Company") was incorporated in Pakistan in 1992 as a limited liability company under
the Companies Ordinance, 1984 (now Companies Act, 2017). Its shares are quoted on Pakistan Stock Exchange.
The principal activity of the Company is to engage in the business of manufacturing and sale of glass containers
and float glass. Following are the business units of the Company including production facilities, along with their
respective locations:
Head office and Registered office: 40 - L Model Town Extension, Lahore;
Marketing Office: 12 D/5 Chandani Chowk, KDA Scheme No. 7-8, Karachi;
The Company’s management is fully cognizant of the business challenges posed by the COVID-19 outbreak and
closely monitoring the possible impacts on the Company’s operations and liquidity positions and believes that its
current policies for managing credit, liquidity and market risk are adequate in response to current situation.
Plant 2: H-15 Landhi Industrial Area, Karachi;
Plant 3: 29 Km Lahore Sheikupura Road, District Sheikupura;
Plant 4: 50 Km Lahore Gujranwala road, Tehsil Kamonke, District Gujrawala.
Impact of COVID-19
The World Health Organization (WHO) declared COVID-19 as a global pandemic on 11 March, 2020. Accordingly
on 20 March, 2020, the Government of Pakistan announced temporary lock down as a measure to reduce the
spread of COVID-19. The outbreak of COVID-19 has had a distressing impact on overall demand in the global
economy with notable downgrade in growth forecasts.
For the six months ended 31 December 2020
Un-audited Audited
Operating fixed assets - tangible 5.1 11,519,297,754 11,884,228,354
Capital work in progress 5.2 848,733,138
770,222,313
12,368,030,893
12,654,450,667
Opening book value 11,884,228,354
2,023,219,324
111,812,416
12,110,276,491
13,133,563,627
Less: Deletions during the period / year - net book value 5.1.2 (2,599,045)
(2,822,954)
12,107,677,446
13,130,740,673
(1,246,512,319)
Book value at the end of the period / year 11,519,297,754
11,884,228,354
Buildings 97,327,836
Vehicles 2,599,045 2,822,954
Opening book value 770,222,313
542,696,455
165,150,576
1,177,531,627
1,929,673,626
Less: Transfers to operating assets during the period / year (212,368,322)
(1,159,451,313)
-
Book value at the end of the period / year 848,733,138
770,222,313
Cost of investment
664,050,766
Company's share of profit - post acquisition
As at 01 July 737,138,084
644,818,508
- Profit for the period / year 131,918,721
187,706,517
209,784,120 239,296,810
946,922,204 737,138,084
(Rupees)
This represents 49.934% investment in RAK Ghani Glass LLC, a limited liability company registered with the Ras Al
Khaimah Investment Authority in United Arab Emirates. The associate is engaged in the business of container glass
manufacturing.
(Rupees)
Local
2,001,652,252
1,865,687,038
2,255,679,925
Foreign
(186,382,172)
1,956,753,784
2,263,315,099
7.1
Cash in hand 31,631,806
Creditors for goods and services 602,827,603 899,701,842
Bills payable 148,320,465 150,857,642
Accrued liabilities 2,544,809,299 3,681,289,813
Retention money 8,223,470 7,015,184
Workers' Welfare Fund 38,116,644 35,927,635
Security deposits 291,093,489 288,848,489
Sales tax payable 153,650,319 -
i)
ii)
This includes Rs. 56.63 million (30 June 2020: Rs. 182.91 million) due from Ghani Value Glass Limited, a related party.
(Rupees)
There has been no significant change in the status of contingencies as reported in the preceding published annual financial
statements of the Company for the year ended 30 June 2020.
Aggregate amount of bank guarantees issued by banks on behalf of the Company outstanding as at 31 December
2020 amounts to Rs. 2,699.47 million (30 June 2020: Rs. 2,682.57 million).
Letters of credit for import of plant and machninery, materials and stores outstanding as at 31 December 2020
amounts to Rs. 2,168.89 million (30 June 2020: Rs. 1,902.95 million).
The balances in savings accounts bear mark-up at the rates ranging from 5.2% to 7% (30 June 2020: 5.2% to 11.2%) per
annum.
(Rupees)
This includes net receivable from RAK Ghani LLC (associated company) in respect of dividend receivableamounting to Rs.
146.710 million (30 June 2020: Rs. 146.710 million) and amount payableof Rs. 84.159 million (30 June 2020: receivableof
10.671 million) representing current account balance outstanding with the associate at the reporting date.
This includes foreign currency bank balance of USD 73,072 (30 June 2020: USD 23,093).
2020 2019 2020 2019
Un-audited Un-audited Un-audited Un-audited
12,273,866,057
11,053,866,914
6,896,466,578
5,822,481,194
3,797,525,104
365,334,690
Raw material consumed 1,610,028,435
201,897,900
105,224,969
98,852,537
Half year ended - unaudited
31 December
31 December
The related parties comprise of associated undertakings, post employment benefit plans and key management personnel. The
Company in the normal course of business carries out transactions with various related parties. Amounts due from and due to
related parties are shown under receivables and payables. Other significant transactions with related parties are as follows:
482,721,223
RAK Ghani Glass LLC Dividend received during the period 90,757,747
136,111,818
-
4,072,123
4,067,378
-
Sami Pharmaceutical (Private) Limited Sales 129,657,187
122,958,760
115,086,068
143,888,973
Key management personnel Salary and other benefits 256,789,856 331,874,845
Purchases
Expenses incurred by the Company on behalf of related party
All transactions with related parties are carried out on commercial terms and conditions.
Directors
Expenses incurred on behalf of the company
1 5
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Un-audited Audited
Trade debts 1,956,753,784
360,910,482
Short term investments 4,235,300
3,825,840
5,118,690,642
2,785,432,172
Set out below, is an overview of financial liabilities held by the Company as at 31 December 2020 and 30 June 2020:
Un-audited Audited
Trade and other payables 3,328,387,626
4,354,629,972
104,726,685
16.2 Fair value hierarchy
Level 1. Quoted market price (unadjusted) in an active market for identical instrument.
Level 2.
Level 3. Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The main level of inputs used by the Company for its financial assets are derived and evaluated as follows:
Level 1 Level 2 Level 3
(Rupees) (Rupees) (Rupees)
Equity instruments at fair value through P&L 4,235,300 - -
As at 30 June 2020
Assets carried at fair value
Equity instruments at fair value through P&L 3,825,840 - -
Set out below, is an overviewof financial assets, other than cash and bank balances, held by the company as at 31
Decemeber 2020 and 30 June 2020:
Carrying values of the financial assets and financial liabilities approximate their fair values. Fair value is the amount for
which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length
The carrying value of all financial assets and liabilities reflected in the financial statements approximate their fair value.
The table below analyse financial instruments carried at fair value, by valuation method. The different levels have been
defined as follows:
Inputs other than quoted price included within Level 1 that are observablefor the asset or liability, either directly
(i.e., as prices) or indirectly (i.e., derived from prices).
17 GENERAL
18 DATE OF AUTHORIZATION FOR ISSUE
These condensed interim financial statements were authorized by the Board of Directors of the Company for issue on
Figures have been rounded off to the nearest rupee, unless otherwise stated.
_____________ Lahore
2019

Documents

GGL Half Year Dec. 2020-21