Contents

Corporate Information
02
Vision & Mission Statement
03
Notice of Annual General Meeting
04
Directors’ Report To The Members
06
Summary of Last Six Year's Financial Results
09
Statement of Compliance with the Best Practices of
Code of Corporate Governance
10
Review Report to the Members on the Statement of
Compliance with the Best Practices of Corporate Governance
12
Auditors’ Report to the Members
13
Balance Sheet
14
Profit and Loss Account
16
Cash Flow Statement
17
Statement of changes in equity
19
Notes to the Accounts
20
Pattern of Shareholding
37
Proxy Form
39

Annual Report 2007 01

Corporate Information
BOARD OF DIRECTORS
Muhammad Rehman Chairman
Muhammad Tousif Paracha Chief Executive
Tariq Siddiq Paracha
A.A.Ademiluyi
Dr. Gbadebo Akisanya
Muhammad Usman
Mrs. Shazia Tariq Paracha

COMPANY SECRETARY
Iqbal Ahmed Rizvi

AUDIT COMMITTEE
Mrs. Shazia Tariq Paracha Chairperson
Mr. Mohammad Rehman Member
Mr. Muhammad Usman Member

BANKS AND FINANCIAL INSTITUTIONS

Bank Al Falah Limited
ABN-AMRO Bank N.V
Al Baraka Islamic Bank Limited
Citibank N.A
Crescent Commercial Bank Limited HEAD OFFICE
Faysal Bank Limited 32-B/II, Main Gulberg,
KASB Bank Limited Lahore.
Meezan Bank Limited Ph: 042-5712344, 5761004
National Bank of Pakistan Fax: 042-5756924
PICIC Commercial Bank Limited Web: www.balochistanglass.com
United Bank Limited
Hong Kong and Shanghai Banking Corporation Limited ACTORIES
First Dawood Investment Bank Limited
UNIT-I
Orix Leasing Limited
Plot No. 8, Sector M, H.I.T.E.,
Orix Investment Bank Limited
Hub, District Lasbella,
Saudi Pak Industrial and Credit Corporation
Balochistan.
Atlas Investment Bank Limited
PICIC Corporation
UNIT-II
29-KM, Sheikhupura Road,
AUDITORS
Sheikhupura.
Faruq Ali & Company
Chartered Accountants UNIT-III
12-KM, Sheikhupura Road,
LEGAL ADVISOR Kot Abdul Malik,
Sayed Ehsan Raza Lahore.

REGISTERED OFFICE SHARE REGISTRAR

Firdousi Manzil, THK Associates (Pvt.) Limited
Rustamji Lane, Ground Floor, State Life Building-3
M.A. Jinnah Road, Quetta. Dr. Ziauddin Ahmed Road, Karachi

02 Balochistan Glass Limited

 Vision Statement
To attain and maintain second to none status in Quality,
Customers’ Satisfaction, Cost Effectiveness and Market
Leadership

Mission Statement
To Establish, Maintain and continuously improve the
management system by:

Developing and maintaining the Lean organization

structure

Monitoring and reducing the cost without compromising

the quality

Establishing, maintaining and continuous improvement

of process efficiency and effectiveness

Developing a culture of process ownership

Annual Report 2007 03

Notice of Annual General Meeting
Notice is hereby given that the Twenty Seventh Annual General Meeting of Balochistan Glass Limited
will be held on Wednesday, October 31, 2007 at 2:00 p.m at Institute of Cost and Management Accountants
of Pakistan (ICMAP), City Campus, ICMAP Centre, Hussain Shaheed Road, Soldier Bazar Karachi to
transact the following business:

Ordinary Business
1. To confirm the minutes of the last Annual General Meeting held on October 21, 2006.

2. To receive, consider and adopt the audited financial statements of the company for the year ended
June 30, 2007 together with the Director’s and Auditor’s .Report thereon.

3. To appoint Auditors of the Company for the year ending June 30, 2007 and to fix their remuneration.

The retiring auditors M/s Faruq Ali & Company, Chartered Accounts, being eligible, have offered
themselves for appointment as auditors of the company.

Special Business
4. To pass the following resolutions with or without modification.

Increase in Authorized Capital:

To increase the authorized share capital of the company from Rs.500 million to Rs.1,200 million
and to amend the Memorandum & Articles of Association of the company accordingly by passing
the following resolutions as special resolutions;

i To increase the authorized share capital of the company from Rs.500 million (Rupees five
hundred million) divided into 50,000,000 ordinary shares of Rs.10/- (Rupees ten) each, to
Rs.1,200 million (Rupees one thousand and two hundred million) divided into 120,000,000
ordinary shares of Rs.10/- (Rupees ten) each by addition of 70,000,000 ordinary shares of
Rs.10/- (Rupee ten) each.

ii. The Memorandum of Association of the company be altered by substituting the figures and
words 500,000,000 (Five Hundred Million Only) and 50,000,000 appearing in clause V, with
the figures and words 1,200,000,000 (One Thousand and Two Hundred million) and 120,000,000
respectively.

iii. The Articles of Association of the company be altered by substituting the figures and words
500,000,000 (Five Hundred Million Only) and 50,000,000 appearing in clause 4(a), with the
figures and words 1,200,000,000 (One Thousand and Two Hundred Million Only) and 120,000,000
respectively.

iv. The Company Secretary of the company is hereby authorized to complete all legal and corporate
formalities in connection with the above.

5. To transact any other business with the permission of the chair.

Statement under section 160(1)(b) of the Companies Ordinance, 1984 is annexed.

By Order of the Board

Date : October 08, 2007 Iqbal Ahmed Rizvi

Place: Lahore Company Secretary

04 Balochistan Glass Limited

Notice....
Notes:

1. The share transfer books of the Company will remain closed from October 24, 2007 to October 31,
2007 (both days inclusive). The transfers received at share registrar office i.e. THK Associates (Pvt.)
Limited by the close of business on October 23, 2007 will be considered in time for the entitlement
of 100% right issue (i.e. one share for every one share held) at a price of Rs.10/- per share as
recommended by the Board of Directors’ in their meeting held on October 08, 2007 and to attend
Annual General Meeting (AGM).

2. A member of the Company entitled to attend and vote at this meeting may appoint another member
as his / her proxy to attend and vote instead of him/her. Proxies in order to be effective must be
received by the Company not less than 48 hours before the meeting.

3. Any individual beneficial owner of CDC, entitled to attend and Vote at the AGM, must bring
his/her CNIC or passport with his/her to prove his/her identity and in case of proxy, attested
copy of the shareholder’s CNIC must be attached with the proxy form. The representative of
corporate member should bring usual documents required for such purpose.

4. Members are requested to immediately notify the change of their addresses, if any to our share
registrar, THK Associates (Pvt.) Limited, Ground Floor, State Life Building-3, Dr. Ziauddin Ahmed
Road, Karachi.

5. Members who have not yet submitted photocopy of their CNIC to the company’s registrar are
requested to send the same, with the folio numbers, to our share registrar, at the earliest.

STATEMENT U/S 160(1)(b) OF THE COMPANIES ORDINANCE,1984

The present authorized share capital of the company is Rs.500 million and it is proposed to increase
the authorized capital to Rs.1,200 million in order to facilitate the 100% right issue as proposed by the
Directors’ for the future expansion and restructuring of the company.

The directors are not interested in the business except as ordinary member of the company.

Annual Report 2007 05

Directors’ Report
The Board of Directors’ of Balochistan Glass Limited takes pleasure in presenting the Annual Report
and Audited Financial Statements of the company together with the Auditors’ report for the year ended
June 30, 2007.

COMPANY PERFORMANCE
The analysis of key operating results for the current year and comparison with the results of the previous
year is given below:
2007 2006
Financial Indicators
(Rupees in thousand)
Sales-Net 1,235,225 1,162,192
Gross Profit 168,752 227,927
Operating Profit 55,528 146,924
(Loss)\Profit before Tax (105,600) 26,998
(Loss)\Profit after Tax (76,500) 25,861

The net Sale of the company increased marginally by 7.4% in comparison to last year. The company
made a shift in its sales mix with the local sales on the decline and higher export sales. The decline in
the gross margin is attributed mainly to the reduced selling price in a highly competitive local market
and increase in the cost of productions. Cost of Raw materials particularly Soda Ash reached at its
highest peak. The export sale has increased during the year and is 27.51 % of total sale as compared to
8.8% in last year and your company has received further export enquiries and confirmed orders for the
present year with increased prices. The heavy financial cost of the company has also contributed towards
the increased losses. In order to reduce the impact of heavy financial burden the company is in the
process of financial restructuring by bringing in 100% more equity to make it less geared.

Other factors which have impacted the overall profitability were fire incidents and loss of stocks due
to torrential rains. However, with the keen interest and support from the directors and the employees
the Unit 1 which suffered from the fire was put back into production with in a week and the company
is now adopting better safety measures to avoid such incidents in future.

EARNING PER SHARE

The earning per share is worked out at Rs. (1.78) per share as compared to Rs.0.60 per share of last year.

DIVIDEND
Due to loss in the current year, no dividend is recommended by the Board of Directors for the year
under review.

EXPANSION PLANS AND FUTURE OUTLOOK

The margins from the beverage sector are reducing due to fierce competition and increased usage of
pet bottles. Taking into consideration the present market scenario, your company is diversifying and
consolidating into Pharma and Tableware glass to eliminate the seasonal impact related to beverage
and thereby improving the profitability of the company.

Returnable glass bottles are expected to be replaced by Non-returnable glass bottles due to consumer's
behavior pattern of Soft Drink Industry. To produce glass bottles at low cost it became necessary to opt
new technology. The management thus decided to install a new machine at Unit-II. This new technology
is called Narrow Neck Press & Blow which helped to produce glass bottles at much less weight. This
machine has already started production but as this technology is new in Pakistan so certain teething
problems are being faced.

06 Balochistan Glass Limited

Directors’ Report
To coup up with the growing demand of Plastic shells we have added one more plastic shell manufacturing
machine which has started production in the month of November 2006 and this line is contributing to
the profitability as expected. Your company has also received significant export orders of plastic shells
as well for the present year.

The Tableware project has started commercial production in the month of June 2007. We are proud to
say that our product which was launched by the brand name of MARIMEX is very much welcomed
in the market. We foresee that this project will contribute in the overall profitability of the company.

Our outlook for the coming year looks better than the previous year for the reason that the production
units are working optimally and management is working hard to improve the efficiency of the units
by hiring some local and oversees employees and also by injecting funds in the company. The future
prospects of the company are very bright with projects specially, Tableware and Plastic Division. It is
due to the hard efforts of the marketing team the export sales of the company had increased during the
year although the profit margin remained low but it also given an opportunity to the company to operate
in local as well as in foreign market.

With all our future plans, strong financial commitments of the directors' of the company and diversified
product range, we are quite confident that our results for the coming year will be encouraging for
shareholders.

STATEMENT ON CORPORATE AND FINANCIAL MATTERS

a) The financial statements, prepared by the management of the company, present fairly its state of
affairs, the results of its operations, cash flows, and changes in equity.

b) Proper books of accounts of the company have been maintained.

c) Appropriate accounting policies have been consistently applied in preparation of these financial
statements and accounting estimates are based on reasonable and prudent judgment.

d) International accounting standards, as applicable in Pakistan, have been followed in preparation

of these financial statements and any departure there from has been adequately disclosed.

e) The system of internal control is sound in design and has been effectively implemented and
monitored.

f) There are no significant doubts upon the company’s ability to continue as going concern.

g) There has been no material departure from the best practices of corporate governance, as detailed
in the listing regulations.

h) There has been no trading during the year in the shares of the Company carried out by the directors,
CEO, CFO, and Company Secretary and their spouses and minor children.

i) No material changes and commitments affecting the financial position of the company have occurred
between the end of the financial year to which these financial statements relate and the date of
directors report.

j) Key operating and financial data of last six years is annexed.

k) The pattern of shareholding is annexed.

Annual Report 2007 07

Directors’ Report
STATUTORY AND FINANCIAL OBLIGATIONS
The company has fulfilled its statutory and financial obligations in the year under review.

MEETING OF BOARD OF DIRECTORS DURING THE YEAR

During the year four meetings of the board of directors were held. Attendance of each Director personally
or through alternate Director is as follows:

1. Mr. Mohammad Rehman 3

2. Mr. Tariq Siddiq Paracha 4
3. Mr. Mohammad Tousif Paracha 4
4. Mrs. Shazia Tariq Paracha 4
5. Mrs. Tabassum Tousif Paracha 3
6. Mr. A.A.Adelmiluyi 2
7. Mr. Mohammad Usman 2
8. Dr. Gbadebo Akisanya 1

AUDITORS
The auditors of the company M/S Faruq Ali & Company, Chartered Accountants, retire and offer their
services for re-appointment for the next year.

The Audit Committee has recommended the re-appointment of M/S Faruq Ali & Company, Chartered
Accountants, as auditors of the Company for the forthcoming year.

CONCLUSION
The directors wish to acknowledge and appreciate the untiring efforts, dedication and commitment
demonstrated by all the employees and their performance, significant contributions and excellent
response to the challenges faced during the year.

The directors are also like to appreciate the assistance and co-operation that has been extended by our
banks and financial institutions.

For on the behalf of Board of Directors’

Mohammad Tousif Paracha

Lahore: October 08, 2007 Chief Executive

08 Balochistan Glass Limited

Summary of Last Six Year's Financial Results
2007 2006 2005 2004 2003 2002
Rs. (000) Rs. (000) Rs. (000) Rs. (000) Rs. (000) Rs. (000)

OPERATING RESULTS
Sales-Net 1,235,225 1,162,192 1,148,487 948,538 515,248 252,313
Gross Profit 168,752 227,927 263,058 261,684 152,164 66,090
Profit before Tax (105,600) 26,998 62,994 16,834 44,304 10,401
Profit after Tax (76,500) 25,861 24,185 (5,215) 23,398 9,139

BALANCE SHEET
Property, plant and Equipment 1,457,054 1,209,237 960,360 886,624 886,843 355,006
Current Assets 1,275,368 1,137,756 1,024,229 883,305 620,956 296,202
Current Liabilities 1,098,241 894,570 698,829 785,590 567,525 239,982
Current portion of Long term Liabilities 332,895 185,690 135,188 136,136 73,003 45,696
Long Term Loans 433,063 361,095 444,700 249,269 273,627 191,205
Subordinated Loan-Unsecured 482,080 384,034 380,785 373,200 224,084 153,142
Share Capital 429,000 429,000 330,000 330,000 330,000 110,000

SIGNIFICANT RATIOS
Gross Profit ratio 13.66% 19.61% 22.90% 27.59% 29.53% 26.19%
Profit before Tax ratio -8.55% 2.32% 5.48% 1.77% 8.60% 4.12%
Profit after Tax ratio -6.19% 2.23% 2.11% -0.55% 4.54% 3.62%
Current ratio 0.89:1 1.05:1 1.23:1 0.96:1 0.97:1 1.04:1
Working Capital (155,768) 57,496 190,212 (38,421) (19,572) 10,524

Annual Report 2007 09

Statement of Compliance with Best Practices of
Code of Corporate Governance
This statement is being presented to comply with the Code of Corporate Government contained in
Listing Regulation No. 37 Chapter XI and No. 40 (Chapter XIII) of the Karachi and Lahore Stock
Exchanges respectively for the purpose of establishing a framework of good governance, whereby a
listed company is managed in compliance with the best practices of corporate governance.

The Company has applied the principles contained in the Code in the following manner:

1. The company encourages representation of independent non-executive directors on its Board of

Directors. At present the Board includes four independent non-executive directors.

2. The directors have confirmed that none of them serving as a director in more than ten listed
companies, including this company.

3. To the best of our knowledge 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, a DFI or an NBFI
or, being a member of a stock exchange, has been declared as a defaulter by that stock exchange.

4. The Company has prepared a “statement of ethics and business practices”, which has been signed
by all the directors and employees of the company.

5. The Board has developed a vision/mission statement, overall corporate strategy and significant
policies of the company.

6. All the powers of the Board has been duly exercised and decisions on material transactions, including
appointment and determination of remuneration and terms and conditions of employment of the
CEO and other executive directors, have been taken by the Board.

7. The meeting of board was presided over by the Chairman and the Board meets at least once in
every quarter. Written notices of the Board meetings, along with agenda, was circulated at least
seven days before the meetings. The minutes of meetings were appropriately recorded and circulated.

8. The Board arranged orientation courses for its certain directors during the year to apprise them
of their duties and responsibilities.

9. The board has approved the appointment of CFO, Company Secretary and Head of Internal Audit
Including his remuneration and terms and conditions of employment, as determined by the CEO.

10. The directors’ report for this year has been prepared in compliance with the requirements of the
code and it fully describes the salient matters required to be disclosed.

11. The financial statements of the company were duly endorsed by the CEO and the CFO before
approval by the Board.

12. The directors, 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 company has complied with all the corporate and financial reporting requirements of the Code.

14. The Board has formed an audit committee. It comprises three members, of whom two are non-
executive directors including the Chairman of the committee.

10 Balochistan Glass Limited

15. Due to inadequate profits available for distribution, declaration of dividend was not considered.

16. 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 Code. The terms of reference of
the committee have been formulated and advised to the committee for compliance.

17. The statutory auditors of the company have confirmed that they have been given a satisfactory
rating under the quality control review program of the Institute of Chartered Accountants of
Pakistan, that they or any of the partners of the firm, 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 Institute of Chartered
Accountants of Pakistan.

18. 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.

19. The management of the company is committed to good corporate governance and appropriate
steps are being taken to comply with the best practices.

For and on behalf of the Board of Directors

Mohammad Tousif Paracha

Lahore: October 08, 2007 Chief Executive

Annual Report 2007 11

Review Report to the Members on Statement of Compliance
with Best Practices of Code of Corporate Governance

We have reviewed the Statement of Compliance with the best practices contained in the Code of
Corporate Governance prepared by the Board of Directors of Balochistan Glass Limited to comply
with the Listing Regulation No. 37 (Chapter XI) and No. 40 (Chapter XIII) of the Karachi and Lahore
Stock Exchanges respectively where the Company is listed.

The responsibility for compliance with the Code of Corporate Governance is that of the Board of
Directors of the Company. Our responsibility is to review, to the extent where such compliance can
be objectively verified, whether the Statement of Compliance reflects the status of the Company's
compliance with the provisions of the Code of Corporate Governance and report if it does not. A
review is limited primarily to inquiries of the Company personnel and review of various documents
prepared by the company to comply with the Code.

As part of our audit of 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. We
have not carried out any special review of the internal control system to enable us to express an opinion
as to whether the Board's statement on internal control covers all controls and the effectiveness of such
internal controls.

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, in all material respects,
with the best practices contained in the Code of Corporate Governance as applicable to the Company
for the year ended June 30, 2007.

Karachi: October 08, 2007 CHARTERED ACCOUNTANTS

12 Balochistan Glass Limited

Auditors’ Report to the Members

We have audited the annexed balance sheet of Balochistan Glass Limited as at June 30, 2007 and the
related profit and loss account, cash flow statement and statement of changes in equity together with
the notes forming part thereof, for the year then ended and we state that we have obtained all the
information and explanations which, to the best of our knowledge and belief, were necessary for the
purpose of our audit.

It is the responsibility of the company's management to establish and maintain a system of internal
control, and prepare and present the above said statements in conformity with the approved accounting
standards and the requirements of the Companies Ordinance, 1984. Our responsibility is to express
an opinion on these statements based on our audit.

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, evidence supporting the amounts and disclosures in the above said statement. An audit also
includes assessing the accounting policies and significant estimates made by management, as well as,
evaluating the overall presentation of above said statements. We believe that our audit provides a
reasonable basis for our opinion and, after due verification, we report that:

a) in our opinion, proper books of accounts have been kept by the company as required by the
Companies Ordinance, 1984;

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, and are in agreement with the books
of account and are further in accordance with accounting policies consistently applied;

ii) the expenditure incurred during the year was for the purpose of the company's business; and

iii) the business conducted, investment made and the expenditure incurred during the year were
in accordance with the objects of the company;

c) in our opinion and to the best of our information and according to the explanations given to us,
the balance sheet, profits and loss account, 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, and, give the information required by the Companies Ordinance, 1984, in
the manner so required and respectively give a true and fair view of the state of the company's
affairs as at June 30, 2007 and of the loss, its cash flows and changes in equity for the year then
ended; and

d) in our opinion no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980.

Karachi: October 08, 2007 CHARTERED ACCOUNTANTS

Annual Report 2007 13

Balance Sheet
as at June 30, 2007

Notes 2007 2006

(Rupees in thousand)

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Authorized capital
50,000,000 Ordinary shares of Rs. 10/- each
(2006: 50,000,000 ordinary shares of Rs. 10/- each) 500,000) 500,000

Issued, subscribed and paid-up capital 3 429,000) 429,000

Accumulated (loss) / Un-appropriated profit (49,529) 26,971

379,471) 455,971

NON-CURRENT LIABILITIES
Subordinated loan - Unsecured 4 482,080) 384,034
Long term loans 5 299,773) 288,045
Liabilities against assets subject to finance lease 6 133,290) 74,707
Long term morabaha - Secured 7 -)))) 5,000
Deferred liabilities 8 47,058) 78,458

CURRENT LIABILITIES
Trade and other payables 9 356,532) 333,674
Markup accrued 26,938) 11,580
Short term borrowings 10 714,771) 549,316
Current portion of long term loans 5 221,597) 123,825
Current portion of liabilities against
assets subject to finance lease 6 106,298) 56,865
Current portion of long term morabaha 7 5,000) 5,000

1,431,136) 1,080,260

CONTINGENCIES AND COMMITMENTS 11 -)))) -))))

2,772,808) 2,366,475

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

Muhammad Tousif Paracha

Chief Executive

14 Balochistan Glass Limited

Balance Sheet
as at June 30, 2007

Notes 2007 2006

(Rupees in thousand)

ASSETS

NON-CURRENT ASSETS
Property, plant and equipment 12 1,457,054 1,209,237
Long term deposits 40,386 19,482

CURRENT ASSETS
Stores, spares and loose tools 13 312,912 274,912
Stock in trade 14 603,174 554,840
Trade debts - Considered good 232,144 205,426
Loans and advances - Considered good 15 38,267 27,430
Trade deposits, prepayments and other receivable 16 47,930 38,831
Taxes recoverable 17 27,076 23,725
Cash and bank balances 18 13,865 12,592

1,275,368 1,137,756

2,772,808 2,366,475

Tariq Siddiq Paracha

Director

Annual Report 2007 15

Profit and Loss Account
for the year ended June 30, 2007

Notes 2007 2006

(Rupees in thousand)

Sales - Net 19 1,235,225) 1,162,192)

Cost of sales 20 1,066,473) 934,265)

Gross profit 168,752) 227,927)

Administrative and selling expenses 21 113,224) 81,003)

Operating profit 55,528) 146,924)

Financial charges 22 166,051) 127,738)

Workers’ profit participation fund -)))) 1,439)

166,051) 129,177)

(Loss) / profit for the year (110,523) 17,747)

Other income 23 4,923) 9,251)

(Loss) / profit before taxation (105,600) 26,998)

TAXATION
Current 24 6,176) 5,811)
Deferred (35,276) (4,674)

(29,100) 1,137)

(Loss) / profit after taxation (76,500) 25,861)

Accumulated profit brought forward 26,971) 1,110)

Balance carried over to balance sheet (49,529) 26,971)

Earnings per share - Basic and diluted (Rupees) 25 (1.78) 0.60)

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

Muhammad Tousif Paracha Tariq Siddiq Paracha

Chief Executive Director

16 Balochistan Glass Limited

Cash Flow Statement
for the year ended June 30, 2007

Notes 2007 2006

(Rupees in thousand)

CASH FLOW FROM OPERATING ACTIVITIES

(Loss) / profit before taxation (105,600) 26,998)

Adjustments for:
Depreciation 114,755) 96,779)
Financial charges 166,051) 127,738)
(Gain) on sale of fixed assets -)))) (809)
Provision for gratuity 7,403) 7,159)
Workers’ profit participation fund -)))) 1,439)
Movement in:
Working capital Note A (94,984) (9,668)
Long term deposits (34,611) 10,832)

Cash generated from operations 53,014 260,468)

Payments for:
Financial charges (143,512) (130,134)
Taxes (9,527) (9,329)
Workers’ profit participation fund (1,532) (3,667)
Gratuity (3,527) (2,061)

Net cash (used) / generated from operating activities (105,084) 115,277)

CASH FLOW FROM INVESTING ACTIVITIES

Payment for capital expenditure (241,908) (240,473)
Sale proceeds of fixed assets 49,000) 1,361)

Net cash used in investing activities (192,908) (239,112)

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds of right shares issued -)))) 99,000)
Subordinated loan received 90,958) -))))
Repayment of long term morabaha (5,000) (5,000)
Repayment of long term borrowings (173,526) (80,335)
Long term loans received 283,026) 85,000)
Repayment of liability against assets subject to finance lease (61,648) (84,760)
Short term borrowings 89,166) 17,155
Dividend -)))) (166)

Net cash generated from financing activities 222,976) 30,894)

Net (decrease) in cash and cash equivalents (75,016) (92,941)

Cash and cash equivalents as at 1st July (264,215) (171,274)

Cash and cash equivalents as at 30th June Note B (339,231) (264,215)

Annual Report 2007 17

Cash Flow Statement
for the year ended June 30, 2007

Notes 2007 2006

(Rupees in thousand)

Note A - Movement in working capital

(Increase) / decrease in current assets

Stores, spares and loose tools (38,000) (66,748)
Stock in trade (48,334) (37,178)
Trade debts - Considered good (26,718) (1,720)
Loans and advances - Considered good (10,837) 5,844)
Trade deposits, prepayments and other receivable 4,608) (2,041)

(119,281) (101,843)

Increase in current liabilities

Trade and other payables 24,297) 92,175)

(94,984) (9,668)

Note B - Cash and cash equivalents

Cash and cash equivalents include:

Cash and bank balances 13,865) 12,592)
Short term finances (353,096) (276,807)

Net borrowings (339,231) (264,215)

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

Muhammad Tousif Paracha Tariq Siddiq Paracha

Chief Executive Director

18 Balochistan Glass Limited

Statement of Changes in Equity
for the year ended June 30, 2007

Issued Un-appropriated
subscribed profit
Total
and paid-up Accumulated
capital (loss)

(Rupees in thousand)

Balance as on July 01, 2005 330,000 1,110 331,110

Right shares issued 99,000 — 99,000

Profit after taxation — 25,861 25,861

Balance as on June 30, 2006 429,000 26,971 455,971

Loss after taxation — (76,500) (76,500)

Balance as on June 30, 2007 429,000 (49,529) 379,471

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

Muhammad Tousif Paracha Tariq Siddiq Paracha

Chief Executive Director

Annual Report 2007 19

Notes to the Financial Statements
for the year ended June 30, 2007

1 THE COMPANY AND ITS OPERATIONS

The Company was incorporated in Pakistan as a public limited company in 1980 under Companies
Act 1913 (now Companies Ordinance, 1984). Its shares are listed on the Karachi and Lahore Stock
Exchanges. The Company is engaged in manufacturing and sale of glass containers and plastic
shells.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Statement of compliance
These financial statements have been prepared in accordance with approved accounting
standards as applicable in Pakistan and the requirements of Companies Ordinance, 1984.
Approved accounting standards comprise of such International Accounting Standards as
notified under the provisions of the Companies Ordinance, 1984. Wherever, the requirements
of the Companies Ordinance, 1984 or directives issued by the Securities and Exchange
Commission of Pakistan differ with the requirements of these standards, the requirements of
Companies Ordinance, 1984 or the requirements of such directives take precedence.

Standards, Interpretations and amendments to published approved accounting standards

Amendments to published standards effective in 2006
IAS 19 (Amendment) - Employee Benefits, is mandatory for the company’s accounting period
beginning on or after January 01, 2006. It introduces the option of an alternative recognition
approach for actuarial gains and losses. It also adds new disclosure requirements. The company
does not intend to adopt the alternative approach for recognition of actuarial gains and losses.
Adoption of this amendment only impacts the format and extent of disclosures presented in
note 8.2 to the financial statements.

International financial reporting standards or interpretations not yet effective but relevant
The following new standards and amendments of approved accounting standards are only
effective for accounting periods beginning on or after July 01, 2007;

IAS – 1 Presentation of financials – amendments relating to capital disclosures

IAS – 41 Agriculture
IFRS – 2 Share based payment
IFRS – 3 Business combinations
IFRS – 5 Non-current Assets Held for Sale and Discontinued Operations
IFRS – 6 Exploration for and Evaluation of Mineral Resources

In addition, interpretations in relation to certain IFRSs have been issued by the International
Accounting Standards Board (IASB) that are not yet effective.

The Company expects that the adoption of the above standards, amendments and interpretations
will have no impact on the company’s financial statements in the period of initial application
other than increased disclosures.

2.2 Basis of preparation

These financial statements have been prepared under the historical cost convention, except
for borrowing costs as referred in note 2.12, which have been included in the cost of the relevant
assets.

The preparation of financial statements in conformity with approved accounting standards

20 Balochistan Glass Limited

Notes ......
requires the use of certain critical accounting estimates. It also requires management to exercise
its judgment in the process of applying the Company’s accounting policies. Estimates and
judgments are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.

The areas involving a higher degree of judgment or complexity, or areas where assumptions
and estimates are significant to the financial statements, are disclosed in note 30 to these
financial statements.

2.3 Staff retirements benefits

The Company operates unfunded gratuity scheme covering all employees eligible to the benefit.
Provisions are based on actuarial recommendations. Actuarial valuations are carried out using
the projected unit credit method as required by International Accounting Standard 19 “Employee
Benefits”. The unrecognized actuarial gains or losses at each valuation date are amortized over
the average remaining working lives of the employees in excess of 10% of the present value
of the defined benefit obligation.

2.4 Taxation
Current
Provision for current taxation is based on current rates of tax after taking into account tax
credits and rebates available, if any.

Deferred
Deferred tax is recognized on all timing differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amount used for taxation purposes.

2.5 Property, plant and equipment and depreciation

Owned
These are stated at cost less accumulated depreciation except for freehold land which is stated
at cost. All expenditures connected with specific assets incurred during installation and
construction period are carried under capital work in progress at cost. These are transferred
to specific assets as and when these assets are available for use.

Leased
Assets subject to finance lease are initially recorded at lower of the present value of minimum
lease payments under the lease agreements and the fair value of leased assets. The related
obligation under the lease less financial charges allocated to future period are shown as a
liability.

These financial charges are allocated to accounting periods in a manner so as to provide a

constant periodic rate of charge on the outstanding liability.

Depreciation charge is based on the reducing balance method at the rates specified in note
12.1.

Depreciation on additions is charged from the month in which the asset is put into use and
on disposals upto the month the asset is in use.

Maintenance and normal repairs are charged to income as and when incurred; major renewals

Annual Report 2007 21

Notes ......
and improvements are capitalized and the assets so replaced, if any, are retired.

Gains and losses on disposal of assets are taken to profit and loss account.

2.6 Stores and spares

These are valued at lower of average cost and net realizable value except for those in transit,
which are valued at cost.

2.7 Stock in trade

These are stated at the lower of cost and net realizable value. The cost is determined as follows:

Raw and packing materials Average cost

Work in process Average material cost only. Conversion costs are not
included as these are not significant.

Finished goods Average cost which includes prime cost and appropriate
portion of production overheads.

Items in transit Cost comprising invoice values plus other charges incurred
thereon.

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

2.8 Trade debts and other receivables

Trade debts originated by the company are recognized and carried at original invoice amount
less an allowance for any uncollectible amounts. An estimate for doubtful debt is made when
collection of full amount is no longer probable. Bad debts are written off as incurred.

2.9 Foreign currency translation

Transactions in foreign currencies are recorded using the rates of exchanges ruling at the date
of transaction.

Assets and liabilities in foreign currencies are translated into Rupees at exchanges rates
approximating those prevailing at the balance sheet date except where forward exchange
contracts have been entered into for repayment of liabilities, in which case the rates contracted
are used.

In respect of foreign currency loans obtained for acquisition of fixed assets, exchange differences
on principal amount are included in the cost of relevant assets over the period of these loans.

All other exchanges differences are taken into profit and loss account.

2.10 Transaction with related parties

Transactions with related parties are based on the policy that all the transactions between the
Company and related parties are carried out at arm’s length. Prices for these transactions are
determined on the basis of comparable uncontrolled price method, which sets the price by
reference to comparable goods sold in an economically comparable market to a buyer unrelated

22 Balochistan Glass Limited

Notes ......
to the seller.

2.11 Revenue recognition

Sales are recorded on dispatch of goods to customers. Profit / mark-up on deposits and
investments are accounted for when it becomes receivable.

2.12 Borrowing costs

Borrowings costs are recognized as an expense in the period in which these are incurred except
to the extent of borrowing cost that are directly attributable to the acquisition, construction or
production of a qualifying asset. Such borrowing costs, if any, are capitalized as part of the
cost of the relevant asset.

2.13 Provisions
A provision is recognized in the balance sheet when the company has a legal or constructive
obligation as a result of past event, it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation and a reliable estimate can be made
of the amount of obligation.

2.14 Cash and cash equivalents

For the purpose of cash flow statement, cash and cash equivalents comprise of cash and bank
balances, net of short term running finances.

2.15 Financial instruments

All the financial assets and liabilities are recognized at the time when the company becomes
a party to the contractual provisions of the instrument. Any gain or loss on derecognition of
the financial assets and financial liabilities is taken to profit and loss account currently.

Financial assets and financial liabilities are offset when the company has legally enforceable
right to offset and intends to settle either on a net basis or to realize the assets and settle the
liability simultaneously.

2.16 Trade and other payables

Short term liabilities for trade and other amounts payable are carried at cost which is the fair
value of the consideration to be paid in the future for goods and services received.

2.17 Impairment
The carrying amounts of the company’s assets are reviewed at each balance sheet date to
determine whether there is an indication of impairment loss. Any impairment loss arising is
recognized as expense in the profit and loss account.

2.18 Off setting of financial assets and liabilities

A financial asset and a financial liability are offset and the net amount is reported in the balance
sheet if the company has a legally enforceable right to set-off the recognized amounts and
intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

Annual Report 2007 23

Notes ......
Notes 2007 2006
(Rupees in thousand)

3 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

42,400,000 Ordinary shares of Rs.10/- each fully paid
in cash (2006: 42,400,000 of Rs.10/- each) 424,000 424,000

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

issued as fully paid Bonus Shares
(2006: 500,000 shares of Rs.10/- each) 5,000 5,000

42,900,000 429,000 429,000

4 SUBORDINATED LOAN - Unsecured

From related parties (Directors)
- Foreign currency 68,152 61,998
- Local currency 82,493 82,493
From sponsors and shareholders
- Foreign currency 331,435 239,543

482,080 384,034

4.1 The above loans are interest free, unsecured and are repayable in respective currencies. These
loans shall be treated as subordinated to the principal amounts of the long term debt owing
to the creditors of the Company from time to time and to all debts of the Company from time
to time owing to the banks and financial institutions and accordingly may only be repaid by
the Company in whole or in part provided that upon such repayment, the Company shall
comply with the debt to equity ratio requirements of the Prudential Regulations of State Bank
of Pakistan as applicable to the Company for the time being.

5 LONG TERM LOANS

From banks and financial institutions - Secured
Syndicate loan I 5.1 16,875 35,363
Syndicate loan II 5.2 219,167 222,500
Term finance 5.3 41,667 50,000
From related party - Unsecured
Directors 5.4 240,661 104,007
Others - interest free, unsecured 3,000 -))))

521,370 411,870

Less: Current portions

Syndicate loan I 16,875 20,363
Syndicate loan II 190,833 70,000
Term finance 13,889 11,112
Related party - Director -)))) 22,350

221,597 123,825

299,773 288,045

24 Balochistan Glass Limited

Notes ......
5.1 The above loans have been obtained from various banks and financial institutions which carry
mark-up at the rate 4% (2006: 4% to 6%) p.a. above six month KIBOR payable quarterly in
arrears. These loans are repayable in four years, from the date of disbursement, in twelve
equal quarterly installments commencing after a grace period of one year. The loans are secured
by way of first pari passu charge on all present and future fixed assets of the company and
personal guarantees of directors.

5.2 The above loans have been obtained from various banks and financial institutions which carry
mark-up at the rates 3% to 4.5% (2006:3%) above six month KIBOR payable monthly / quarterly
in arrears. Out of total amount Rs.25 million is repayable by December, 2008, Rs.3.33 million
by June, 2008 and rest of the loans are repayable up to June 2008. The loans are secured by
way of first pari passu hypothecation charge over present and future fixed assets of the company
and personal guarantees of directors.

5.3 The above loan has been obtained from M/s Saudi Pak Industrial and Agricultural Investment
Co. which carries markup @ 3% (2006: 3% )over 6 months average KIBOR and is repayable
within five years including a grace period of six months in 18 equal quarterly installments.
The facility is secured by way of first pari passu charge on all present and future fixed assets
of the company.

5.4 Represent unsecured long term loans received from directors. Out of total amount Rs.97.350
million carries markup @9.5%(2006: 9.5%) per annum, rest of the amounts are interest free.
The loans are repayable at the convince of the company.

6 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE

2007 2006
Lease Payments Lease Payments
Present Present
Minimum Value Minimum Value
(Rupees in thousand)

Less than one year 127,401 106,298 68,043 56,865

Within one to five years 143,337 133,290 85,253 74,707

Total 270,738 239,588 153,296 131,572

Less: Financial charges allocated

to the future periods 31,150 -)))) 21,724 -))))

Present value of minimum

lease payments 239,588 239,588 131,572 131,572

Less: due within one year 106,298 106,298 56,865 56,865

133,290 133,290 74,707 74,707

Annual Report 2007 25

Notes ......
The Company entered into lease agreement with various leasing companies to acquire vehicles
and plant and machinery for its balancing, modernization, replacement and expansion program.

The rentals under these lease agreements are payable monthly and quarterly up to the period
ending June 2009. Mark up rate ranging from 8.5% to 17.57% per annum (2006: 8.5% to 13.50% per
annum) have been used as discounting factors. The cost of operating and maintaining the leased
assets is borne by the company. The Company intends to exercise its option to purchase the leased
assets at its aggregate residual value of Rs.54.121 millions (2006: Rs. 20.027 million) upon the
completion of the respective lease periods.

Notes 2007 2006

(Rupees in thousand)
7 LONG TERM MORABAHA - Secured
Meezan Bank Ltd. 5,000 10,000
Less: Current maturity 5,000 5,000

-)))) 5,000

The company has obtained long term morabaha finance facility from Meezan Bank Limited. The
facility carries markup @12.50% (2006: 12.50 %) per annum, payable quarterly in arrears. The facility
is repayable in four equal annual installments of Rs. 5.00 million each commencing from August,
2004 and is secured against first pari passu hypothecation charge over fixed assets of the company
and first mortgage by deposit of title deeds over immovable property of the company.

8 DEFERRED LIABILITIES
Deferred taxation 8.1 25,968 61,244
Employees retirements benefits 8.2 21,090 17,214

47,058 78,458

8.1 Deferred taxation

Deferred tax liability arising due to
accelerated tax depreciation 173,549 123,264
Deferred tax liability arising due to
finance lease transactions 27,114 16,953
Deferred tax assets arising out of staff
gratuity, available tax losses and credits (174,695) (78,973)

25,968 61,244

8.2 Employees retirements benefits

Staff gratuity:
Movement in balance
Opening balance 17,214 12,116
Payments during the year 3,527 2,061

13,687 10,055
Charge for the year 8.2.1 7,403 7,159

8.2.2 21,090 17,214

26 Balochistan Glass Limited

Notes ......
Notes 2007 2006
(Rupees in thousand)
8.2.1 Charge for the year
Service cost 5,876 6,001
Interest cost 1,527 1,158

7,403 7,159

8.2.2 Balance sheet reconciliation

Present value of defined benefit obligations 20,689 16,975
Less: unrecognized actuarial gains 401 239

21,090 17,214

8.2.3 Principal actuarial assumption

Expected rate of increase in salaries 9 % p.a. 8 % p.a.
Discount factor used 10 % p.a. 9 % p.a.
Average expected remaining
working life time of employees 11 years 12 years

9 TRADE AND OTHER PAYABLES

Bills payable 165,088 156,210
Trade creditors 9.1 107,122 114,631
Accrued expenses 49,165 45,039
Advances from customers 9.2 20,167 5,960
Workers’ profit participation fund 9.3 -)))) 1,439
Unclaimed dividend 164 164
Sales Tax payable 1,304 4,746
Others 13,522 5,485

356,532 333,674

9.1 This includes amount of Rs. 6.725 million (2006: Rs. 5.381 million) payable to M/s Pak Hy Oils
Limited (associated company).

9.2 This includes amount of Rs. 15.00 million relating to M/s Gharibwal Cement Limited (associated
company).

9.3 Workers’ profit participation fund

Opening balance 1,439 3,319
Interest provided for the year 93 348
Add: Contribution during the year -)))) 1,439

1,532 5,106
Less: Paid during the year 1,532 3,667

-)))) 1,439

Annual Report 2007 27

Notes ......
Notes Sanctioned 2007 2006
Limits (Rupees in thousand)
10 SHORT TERM BORROWINGS
From banks and financial institutions - Secured
Demand finance 10.1 40,000 40,000 65,561
Export re-finance 10.2 75,200 75,277 40,000
Short term morabaha 10.3 205,000 205,000 166,948
Short term running finance 10.4 368,741 351,470 272,698
From related parties - Unsecured
Associated company 10.5 39,398 -))))
Others - Unsecured, interest free
Temporary book overdraft 1,626 4,109
Others 2,000 -))))

714,771 549,316

10.1 This facility is obtained from Citibank N.A. which carries mark-up @ 2.25% (2006:1%) above
three months KIBOR and is secured by way of first pari passu charge by way of hypothecation
over companies present and future stocks and book debts and personal guarantee of directors
/ sponsors. This security also covers all other credit facilities from the bank. The maximum
tenure of the facility is six months from the date of disbursement. The mark-up is payable
quarterly in arrears.

10.2 These export refinance facilities have been obtained from various banks which carry mark-up
@ 2.25% over three months KIBOR (2006: 1% above six months KIBOR) and is secured by way
of first pari passu charge by way of hypothecation over companies present and future stocks
and book debts and personal guarantee of directors / sponsors. The maximum tenure of the
facility is six months from the date of disbursement. The mark-up is payable quarterly in
arrears.

10.3 The company has entered into morabaha facilities with various banks. Under the agreements
the company is allowed to drawdown the facility under a series of Sub-Morabahas transactions
subject to the maximum available limit. The maximum tenure of the facility is twelve months
from the date of first drawdown. The facility carries markup @ 2.75% to 3% (2006: 1 % to 2%)
above six month KIBOR and is secured by way of first pari passu charge over present and
future stocks and receivables of the company.

10.4 The facilities for running finance under mark-up arrangement available from various banks
which carry mark up ranging from 2% to 3.5% (2006: 2% to 3%) above six months KIBOR
payable quarterly in arrears. These facilities are secured by first pari passu hypothecation
charge over the Company’s present and future current assets and personal guarantees of
directors / sponsors; and are generally for a period of one year renewable at the end of the
period.

10.5 The unsecured loan from associated company has been obtained for the working capital
requirement which carries markup ranging from 10% p.a to 18% p.a.

11 CONTINGENCIES AND COMMITMENTS

11.1 Contingencies
- Bank guarantees amounting to Rs. 71.399 million (2006: Rs.80.151 million) have been given
by various banks on behalf of the company.

28 Balochistan Glass Limited

Notes ......
- A suit for recovery of Rs. 1.200 million was filed by M/s Tawakkal Traders against the
company. The legal advisor of the company has opined that there will be no financial loss
to the company as the documents filed by M/s Tawakkal Traders provide no concurrent
evidence in support of its claim. The matter is still pending adjudication.

11.2 Commitments
Commitments in respect of:
- letter of credits as on June 30, 2007 amounted to Rs. 84.095 million (2006: Rs. 75.906 million).

- capital expenditures amount to Rs. NIL (2006: Rs.158 million).

Notes 2007 2006

(Rupees in thousand)
12 PROPERTY, PLANT AND EQUIPMENT
Operating Assets - At cost less
accumulated depreciation 12.1 1,457,054 1,028,854
Capital work in progress - At cost 12.4 — 180,383

1,457,054 1,209,237

12.1 Operating Assets - At cost less accumulated depreciation

COST DEPRECIATION Book Value
Particulars Rate As at On As at as at
As at As at % For the
July 01, Additions Disposals June 30, July 01, Deletions/ June 30, June 30,
2006 Transfers Year 2007 2007
2006 2007
(Rupees in thousand) (Rupees in thousand)

Freehold land 45,167 -)))) -)))) 45,167 -) -)))) -)))) -)))) -)))) 45,167
Building on freehold land
Factory 41,766 3,247 -)))) 45,013 10 26,769 -)))) 1,824 28,593 16,420
Non factory 19,353 -)))) -)))) 19,353 5 7,575 -)))) 589 8,164 11,189
Plant and machinery
Owned 1,251,811 413,515 (66,000) 1,599,326 10&15 491,227 (17,000) 84,973 559,200 1,040,126
Leased 193,177 124,414 66,000 383,591 10 16,360 17,000 23,942 57,302 326,289

Electric and gas installation 10,747 -)))) -)))) 10,747 10 9,213 -)))) 153 9,366 1,381
Furniture and fixtures 9,222 7 -)))) 9,229 10 6,940 -)))) 229 7,169 2,060
Office equipment 5,828 456 -)))) 6,284 10 1,803 -)))) 448 2,251 4,033
Vehicles
Owned 7,813 766 -)))) 8,579 20 4,032 -)))) 909 4,941 3,638
Leased 10,295 550 -)))) 10,845 20 2,406 -)))) 1,688 4,094 6,751

2007 1,595,179 542,955 -)))) 2,138,134 -) 566,325 -)))) 114,755 681,080 1,457,054

2006 1,431,327 163,852 -)))) 1,595,179 -) 470,967 (1,421) 96,779 566,325 1,028,854

12.2 Depreciation charge for the year has been allocated as follows:
Administrative and selling 2,045 1,725
Cost of sales 112,710 95,054

114,755 96,779

Annual Report 2007 29

Notes ......
12.3 The following operating assets were disposed off during the year

Accumulated Book Sale Mode of

Description Cost Particulars of Buyer
Depreciation Value Proceeds Disposal

(Rupees in thousand)

Plant and machinery 66,000 17,000 49,000 49,000 Sale & Saudi pak Leasing
lease back Co. Ltd.

2007 66,000 17,000 49,000 49,000

2006 1,973 1,421 552 1,361

2007 2006
(Rupees in thousand)
12.4 Capital work in progress - At cost
Civil works and buildings -)))) 3,125
Plant and machinery
- Owned -)))) 172,958
- Leased -)))) 4,300

-)))) 180,383

13 STORES, SPARES AND LOOSE TOOLS

Stores 132,995 148,250
Spares and loose tools 179,917 126,662

312,912 274,912

14 STOCK IN TRADE
Raw and packing materials 237,370 252,825
Work in process 14,950 12,825
Finished goods 256,749 243,419
Stock in transit 94,105 45,771

603,174 554,840

15 LOANS AND ADVANCES - Considered good

Employees 1,042 116
Suppliers 29,993 20,506
Against expenses 7,232 6,808

38,267 27,430

15.1 Aggregate amount due from executives of the company is Rs.0.068 million (2006: Rs. 0.162
million).

16 TRADE DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLE

Short term deposits 38,129 25,106
Short term pre-payments 4,132 6,943
Other receivable 5,669 6,782

47,930 38,831

30 Balochistan Glass Limited

Notes ......
Notes 2007 2006
(Rupees in thousand)
17 TAXES RECOVERABLE
Advance income tax - Net 24,638 21,287
Income tax refundable 2,438 2,438

27,076 23,725

18 CASH AND BANK BALANCES

Cash in hand 2,752 2,782
Cash at banks - Current account 11,113 9,810

13,865 12,592

19 SALES - Net
Gross Sales
Local 1,030,125 1,219,626
Export 339,778 102,748

1,369,903 1,322,374
Less: Sales tax 134,678 160,182

1,235,225 1,162,192

20 COST OF SALES
Raw material consumed
Opening stock 252,825 237,825
Purchases 441,581 415,286

694,406 653,111
Closing stock (237,370) (252,825)

457,036 400,286
Power, fuel and water 315,135 294,201
Salaries, wages and other benefits 20.1 146,045 144,925
Stores and spares 34,949 34,624
Repairs and maintenance 3,211 8,904
Communication 1,359 1,717
Traveling and conveyance 4,285 1,081
Legal and professional 328 545
Stationery, fees and subscription 2,646 1,178
Insurance 1,495 2,913
Depreciation 12.2 112,710 95,054
Rent, rates and taxes 906 780
Others 1,823 922

1,081,928 987,130
Work in process - Opening 12,825 9,285
Work in process - Closing (14,950) (12,825)

Cost of goods manufactured 1,079,803 983,590

Finished goods - Opening 243,419 194,094
Finished goods - Closing (256,749) (243,419)

1,066,473 934,265

20.1 Salaries, wages and other benefits include amount of Rs. 5.898 million (2006: Rs.5.491 million)
relating to staff retirement benefits.

Annual Report 2007 31

Notes ......
Notes 2007 2006
(Rupees in thousand)
21 ADMINISTRATIVE AND SELLING EXPENSES
Salaries and other benefits 21.1 23,949 17,584
Communication 2,751 3,455
Rent, rates and taxes 1,426 3,035
Travelling and conveyance 4,260 4,587
Legal and professional 1,506 2,285
Advertisement 2,815 889
Stationery, fees and subscription 1,308 2,786
Electricity, gas and water 1,576 1,029
Insurance 5,017 5,089
Audit fee 21.2 188 188
Depreciation 12.2 2,045 1,725
Repairs and maintenance 673 2,589
Freight, handling and forwarding 64,256 35,035
Charity and donation 21.3 24 256
Miscellaneous 391 471
Trade debts written off 1,039 -))))

113,224 81,003

21.1 Salaries and other benefits include amount of Rs. 1.505 million (2006: Rs. 1.668 million) relating
to staff retirement benefits.

21.2 Auditor remuneration 125 125

Half yearly review 63 63

188 188

21.3 Recipients of donation do not include any donee in whom a director or his spouse had any
interest.

22 FINANCIAL CHARGES
Mark up on
- Long term loans
- banks and financial institutions 41,454 42,982
- related party (director) 9,248 9,248
- Long term morabaha 688 1,253
- Liabilities against assets subject to finance lease 19,739 12,401
- Short term borrowings
- banks and financial institutions 71,857 50,233
- related party (associated company) 3,088 -))))
Exchange loss on foreign currency translation - net 5,134 3,363
Interest on workers’ profit participation fund 93 348
Bank charges 14,750 7,910

166,051 127,738

32 Balochistan Glass Limited

Notes ......
2007 2006
(Rupees in thousand)
23 OTHER INCOME
Gain on disposal of fixed assets -)))) 809
Sale of scrap 4,923 8,442

4,923 9,251

24 TAXATION
The income tax assessment of the company deemed to have been finalized up to and including tax
year 2006.

The reconciliation of accounting income with tax expense is as follows:

(Loss) / profit before taxation as per financial statements (105,600) 26,998

Applicable tax rate 35% 35%

Tax on accounting profit (36,960) 9,449

Tax effect of export subject to tax separately U/s. 169 32,776 2,312
Tax effect of accelerated depreciation (61,973) (11,458)
Tax effect of other expenses (20,220) (24,138)

Tax payable before adjustment of losses brought forward (86,377) (23,835)

less: Tax effect of brought forward losses (86,377) 23,835

Tax payable under normal rules -)))) -))))

Tax payable under normal rules -)))) -))))

Minimum tax payable under the ordinance 6,176 5,811

Total tax payable by the company 6,176 5,811

25 EARNINGS PER SHARE - Basic and diluted

There is no dilutive effect on the basic earnings per
share of the company, which is based on:
(Loss) / profit after taxation (76,500) 25,861

Number of shares

Weighted average ordinary shares in issue during the year 42,900,000 42,900,000

Earnings per share - Basic and diluted (Rupees) (1.78) 0.60

Annual Report 2007 33

Notes ......
26 FINANCIAL ASSETS AND LIABILITIES
26.1 Financial assets and liabilities
Interest / Markup bearing Non Interest / Markup bearing Total
Maturity Maturity
upto One to Total upto One to Total 2007 2006
one year five years one year five years
Financial Assets
Deposits -))))) -))))) -))))) 38,129 40,386 78,515 78,515 44,588
Trade debts -))))) -))))) -))))) 232,144 -))))) 232,144 232,144 205,426
Loans and advances -))))) -))))) -))))) 1,042 -))))) 1,042 1,042 116
Other receivables -))))) -))))) -))))) 5,669 -))))) 5,669 5,669 6,782
Cash and bank balances -))))) -))))) -))))) 13,865 -))))) 13,865 13,865 12,592

Total -))))) -))))) -))))) 290,849 40,386 331,235 331,235 269,504

Financial Liabilities
Subordinated loan -))))) -))))) -))))) -))))) 482,080 482,080 482,080 384,034
Long term loans 221,597 299,773 521,370 -))))) -))))) -))))) 521,370 411,870
Liabilities against assets
subject to finance lease 106,298 133,290 239,588 -))))) -))))) -))))) 239,588 131,572
Long term morabaha 5,000 -))))) 5,000 -))))) -))))) -))))) 5,000 10,000
Trade and other payables -))))) -))))) -))))) 335,061 -))))) 335,061 335,061 321,529
Markup accrued -))))) -))))) -))))) 26,938 -))))) 26,938 26,938 11,580
Short term borrowings 711,145 -))))) 711,145 3,626 -))))) 3,626 714,771 549,316

Total 1,044,040 433,063 1,477,103 365,625 482,080 847,705 2,324,808 1,819,901

2007 (1,044,040) (433,063) (1,477,103) (74,776) (441,694) (516,470) (1,993,573) -)))))

2006 (735,006) (361,095) (1,096,101) (89,744) (364,552) (454,296) -))))) (1,550,397)

26.2 Interest rate risk

All financial liabilities are subject to predetermined interest / markup rates except where the
floating rates have been used. The effective interest / mark up rates for the monetary financial
assets and liabilities are mentioned in respective notes to the financial statements.

26.3 Fair Value of financial assets and liabilities

The carrying amounts of the financial assets and liabilities approximate their fair values.

26.4 Credit risk and concentration of credit risk

Credit risk represents the accounting loss that would be recognized at the reporting date if
counter parties fail to perform as contracted. The company does not have significant exposure
to any individual customer. The management continuously monitors the credit exposure
towards the customers. The financial assets exposed to credit risk amount to Rs. 328.483 million
(2006: Rs. 266.722 million).

26.5 Foreign exchange risk management

Foreign currency risk arises mainly where receivables and payables exist due to transactions
with foreign undertakings. In appropriate cases the management takes out forward contract
to mitigate the risk. On balance sheet items exposed to foreign currency risk consist of liabilities
as disclosed in note 4 to the financial statements. Off balance sheet items exposed to foreign
currency risk consist of commitments under letters of credit as disclosed in note 11.2 to the
financial statements.

26.6 Liquidity risk

Liquidity risk is the risk that an institution will be unable to meet its funding requirements.
To guard against this risk, Company has diversified funding sources and assets are managed
with liquidity in mind. The maturity profile is monitored to ensure that adequate liquidity is
maintained.

26.7 Off balance sheet financial instruments

Off balance sheet financial liabilities are disclosed in note 11.2 to the accounts.

34 Balochistan Glass Limited

Notes ......
27 REMUNERATION OF DIRECTORS AND EXECUTIVES
The aggregate amount charged in the accounts for remuneration, including all benefits, to the Chief
Executive, Directors and Executives of the Company was as follows:

Chief Executive Directors Executives Total

2007 2006 2007 2006 2007 2006 2007 2006

(Rupees in thousand)
Managerial remuneration 1,161 1,161 -))) -))) 5,944 1,633 7,105 2,794
House rent allowance 465 465 -))) -))) 2,395 653 2,860 1,118
Utilities 116 116 -))) -))) 594 163 710 279
Medical -))) -))) -))) -))) 25 -))) 25 -)))
Conveyance -))) -))) -))) -))) 18 -))) 18 -)))
Meeting fees -))) -))) -))) -))) -))) -))) -))) -)))

1,742 1,742 -))) -))) 8,976 2,450 10,718 4,192

Number of persons 1 1 -))) -))) 8 2 9 3

28 TRANSACTIONS WITH RELATED PARTIES

The related parties comprise associated companies, directors and key management personnel.
Remuneration and benefits to chief executive, directors and key management personnel under
terms of their employment are disclosed in note 27 to the financial statements. Transaction with
related parties, other than those which have been specifically disclosed elsewhere in these financial
statements, are as follows:
2007 2006
(Rupees in thousand)
Associated companies
Purchases 8,449 8,876
Short term loan received 218,210 96,023
Repayment of short term loan 178,812 96,023
Markup charged on loan 3,088 --
Advance against sale received 15,000 --

Directors
Loan received 280,026 86,457
Repayment of loan 143,566 79,800
Markup charged on loan 9,248 9,248

29 CAPACITY AND PRODUCTION

2007 2006
Unit Annual Annual
Capacity Production Capacity Production

Based on 350 working days

Glass containers Tons 120,400 62,644 108,500 83,256

Plastic shells
Full depth Pieces 1,500,000 1,172,367 900,000 809,203
Half depth Pieces 800,000 24,837 800,000 --

Pieces 2,300,000 1,197,204 1,700,000 809,203

Annual Report 2007 35

Notes ......
Keeping in view the market requirement no consideration was give to the production of half depth
shells and only full depth shells were being produced. The production of full depth shells remained
low on account of installation of new machines in the months of November 2006 and April 2007.
Production of glass containers remained at low level due to closure of furnace at Unit III for almost
for more three quarters due to table ware project and furnace at Unit II which remained closed for
installation of ‘Narrow Neck Press and Blow Machine’

30 ACCOUNTING JUDGMENTS AND ESTIMATES

The areas involving a higher degree of judgment or complexity, or areas where assumptions and
estimates are significant to the financial statements are as follows:

30.1 Staff retirement benefits

Certain actuarial assumptions have been adopted as disclosed in note 8.2.3 to the financial
statements for valuation of prevent value of defined benefit obligations. Any changes in these
assumptions in future years might affect unrecognised gains and losses in those years.

30.2 Income taxes

The company takes into account law of income tax and decisions taken by the appellate
authorities. The company may be able to avail the benefit of payment of turnover tax, subject
to the availability of sufficient taxable profits in the next five years when this credit can be
utilized.

30.3 Property, plant and equipment

The company reviews the value of assets for possible impairment on annual basis. Any changes
in the estimates in future years might affect the carrying amounts of the respective items of
property, plant and equipment with a corresponding affect on the depreciation charge and
impairment.

31 COMPARATIVES
Comparative figure of director’s loan of Rs.6.657 million has been reclassified from short term
borrowings to long term borrowings on account of revised repayment terms.

32 EVENTS AFTER BALANCE SHEET DATE

The board of directors in their meeting held on October 08, 2007 approved 100% right issue of
shares (1 share for every 1 share held) at a price of Rs.10/- per share accumulating to Rs.429 million.

33 DATE OF AUTHORIZATION FOR ISSUE

These financial statements are authorized for issue on October 08, 2007 in accordance with the
resolution of the Board of Directors of the company.

34 GENERAL
34.1 These financial statements are presented in rupees and figures have been rounded off to nearest
thousand rupees.

Muhammad Tousif Paracha Tariq Siddiq Paracha

Chief Executive Director

36 Balochistan Glass Limited

Pattern of Shareholding
as of June 30, 3007

No. of Having Shares

Shareholders Share Held Percentage
From To

749 1 100 24764 .0577

609 101 500 168889 .3936
253 501 1000 203251 .4737
385 1001 5000 1009719 2.3536
100 5001 10000 751456 1.7516
49 10001 15000 623249 1.4527
16 15001 20000 289550 .6749
11 20001 25000 254800 .5939
6 25001 30000 165935 .3867
10 30001 35000 331801 .7734
1 35001 40000 39650 .0924
5 45001 50000 250000 .5827
1 50001 55000 51500 .1200
2 60001 65000 123750 .2884
1 65001 70000 70000 .1631
1 75001 80000 80000 .1864
1 95001 100000 100000 .2331
1 100001 105000 105000 .2447
4 115001 120000 468052 1.0910
1 125001 130000 130000 .3030
1 145001 150000 150000 .3496
1 170001 175000 172590 .4023
1 195001 200000 200000 .4662
1 240001 245000 242500 .5652
1 245001 250000 250000 .5827
1 385001 390000 388458 .9054
1 590001 595000 591534 1.3788
1 605001 610000 609330 1.4203
1 625001 630000 626558 1.4605
1 630001 635000 634439 1.4788
1 740001 745000 740248 1.7255
1 930001 935000 932000 2.1724
1 995001 1000000 1000000 2.3310
1 1000001 1005000 1000835 2.3329
1 1495001 1500000 1500000 3.4965
1 1890001 1895000 1892208 4.4107
1 1950001 1955000 1950716 4.5471
1 1995001 2000000 2000000 4.6620
1 2175001 2180000 2179455 5.0803
1 2495001 2500000 2500000 5.8275
1 2545001 2550000 2547548 5.9383
1 2550001 2555000 2550215 5.9445
1 12995001 13000000 13000000 30.3030

2229 42900000 100.0000

Categories of Shareholders as at June 30 2007

Particulars Shareholders Shareholdring Percentage
General Public (Local) 2182 20,678,302 48.2011
Insurance 2 172,640 .4024
Joint Stock Companies 31 2,782,670 6.4864
Financial Institutions 3 1,201,164 2.7999
Foreign Companies 4 15,468,052 36.0561
Non-resident 7 2,597,172 6.0541

2,229 42,900,000 100.0000

Annual Report 2007 37

Pattern of Shareholding
as of June 30, 3007 (According to Code of Corporate Governance)

Categories of Shareholders Numbers Shares Held Percentage

Associated Companies, undertaking and related parties - - -

N.B.PANDI.C.P 2 1,200,914 2.7993

National Bank of Pakistan 1 1,200,864 2.7992
Investment Corporation of Pakistan 1 50 0.0001

Directors, CEO & their Spouse and minor children 7 10,364,448 24.1596
Mr. Tariq Siddiq Paracha 2,213,821 5.1604
Mr.Mohammed Usman 6,899 0.0161
Mr. Mohammed Rehman 2,577,924 6.0091
Mr. A.A. Ademiluyi [non resident) 2,581,835 6.0183
Mr. Mohammed Tauseef Peracha 635,089 1.4804
Mrs. Tabassum Tauseef Peracha 1,926,095 4.4897
Mrs. Shazia Tariq Paracha 422,785 0.9855

Executives - - -

Public Sector Companies and Corporations - - -

Banks, Development Financial Institutions,

Non Banking Financial Unstitutions,
Insurance companies, Leasing Companies,
Modaraba and Mutual Fund 3 172,890 0.4030

Foreign Companies 4 15,468,052 36.0560

ELLIOTT Assets Limited 3,867,013 9.0140
MARCO Holding Inc. 3,867,013 9.0140
WEST FORCE Ltd. 3,867,013 9.0140
ZENA Partners Ltd. 3,867,013 9.0140

Non Residents 6 15,337 0.0358

Others 31 2,782,670 6.4864

General Public 2176 12,895,689 30.0599

2229 42,900,000 100.00

38 Balochistan Glass Limited

Form of Proxy
27th Annual General Meeting

The Secretary
Balochistan Glass Limited
32-B/II, Main Gulberg,
Lahore.

I/We of

a member (s) of Balochistan Glass Limited and holding

ordinary shares, as per Registered Folio

hereby appoint of

or failing him of

another member of the company to vote for me/us and on my lour behalf at the Annual General Meeting
of the Company to be held on October 31, 2007 and at any adjournment thereof.

As witness my lour hand this day of 2007

FOLIO I CDC Account No.

Rs. Five
Revenue
Stampe

[SIGNATURE OF MEMBER/(S)]
Important:
1. This proxy form, duly completed and signed, must be deposited at the Shares Department not less
than 48 hours before the time of holding the meeting.
2. No person shall act as proxy unless he/she him/her self is a member of the Company, except that
a corporation may appoint a person who is not a member.
3. If a member appoints more than one proxy and more than one instalment of proxy are deposited
by a member with the Company, all such instruments of proxy shall be rendered invalid.

For CDC Account Holders / Corporate Entities:

In addition to the above the following requirements have to be met:
1. The proxy form shall be witnessed by two persons whose names, addresses and NIC numbers shall
be mentioned on the form.
2. Attested copies of NIC or the passport of the beneficial owners and the proxy shall be furnished
with the proxy form.
3. The proxy shall produce his/her original NIC or original passport at the time of the meeting.
4. In case of corporate entity, the Board of Directors resolution / power of attorney with specimen
signature shall be submitted [unless it has been provided earlier) along with proxy form to the
company.

Annual Report 2007 39