| Zulfeqar Industries Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| ZULFEQAR
INDUSTRIES LIMITED |
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| BOARD
OF DIRECTORS |
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| NOTICE
OF MEETING |
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| REPORT
OF DIRECTORS |
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| AUDITORS'
REPORT |
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| BALANCE
SHEET |
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| PROFIT
AND LOSS ACCOUNT |
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| STATEMENT
OF CHANGES IN EQUITY |
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| NOTES
TO THE ACCOUNTS |
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| FORM - 34 |
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| HI-LANDER
SOAPS (PVT) LIMITED |
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| AUDITORS'
REPORT |
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| BALANCE
SHEET |
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| PROFIT
AND LOSS ACCOUNT |
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| STATEMENT
OF CHANGES IN EQUITY |
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| NOTES
TO THE ACCOUNTS |
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| Board
of Directors |
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| SYED
WAJID ALI |
Chairman |
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| S.
FERIEL RIFAAT ALI |
Managing Director |
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| SYED
SHAHID ALI |
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| KARAM
ELLAHI SHAIKH |
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| MUHAMMAD
RAFIQ |
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| KEMAL
SHOAIB |
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| SHAMIM
AHMED |
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| COMPANY
SECRETARY |
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| A.
JABBAR GHORI |
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| AUDITORS |
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| TASEER
HADI KHALID & CO. |
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| CHARTERED
ACCOUNTANTS |
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| KARACHI. |
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| REGISTERED
OFFICE |
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| KANDAWALA
BUILDING |
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| M.A.
JINNAH ROAD |
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| KARACHI-74400 |
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| BANKERS |
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| HABIB
BANK LIMITED-KARACHI. |
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| LEGAL
ADVISOR |
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| HUSSAIN
AND HAIDER-KARACHI. |
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| FACTORY |
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| LINK
HALI ROAD, HYDERABAD-71900 |
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| SHARES
REGISTRAR |
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| THK
Associates (Pvt) Limited |
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| Ground
Floor, Shaikh Sultan Trust Building No. 2, |
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| Beaumont
Road, Karachi. |
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| Notice
of Meeting |
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| NOTICE
IS HEREBY GIVEN THAT the Fortieth Annual General Meeting of Zulfeqar
Industries Limited will |
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| be
held at Beach Luxury Hotel, Moulvi Tamizuddin Khan Road Karachi on Saturday,
18th November, 2000 at 10.00 |
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| a.m.
to transact the following business: |
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| ORDINARY
BUSINESS: |
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| 1.
To confirm the minutes of the last Annual General Meeting held on Monday,
27th December, 1999. |
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| 2.
To receive, consider and adopt the audited Balance Sheet and Profit and Loss
Account of the Company for |
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| the
year ended 30th June, 2000 together with tile report of Auditors and
Directors thereon. |
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| 3.
To appoint Auditors for the year ending 30-6-2001 and to fix their
remuneration. |
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| 4.
To transact any other ordinary business with tile permission of the Chair |
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| SPECIAL
BUSINESS: |
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| 5.
To approve the remuneration of Managing Director / Chief Executive who is
also a director on the Board. |
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| 6.
To approve members' voluntarily winding up of M/s. Hi-Lander Soaps (Pvt) Ltd.
and pass the following |
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| resolution
with or without modifications as a special resolution. |
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| RESOLVED
that the Company be wound up voluntarily and Mr. Abdul Jabbar Ghori, Company
Secretary be and |
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| is
hereby authorized to initiate the legal proceedings as per law. |
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| FURTHER
RESOLVED that S. Feriel Rifaat Ali, Chief Executive of the company be and is
hereby authorized to |
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| incur
expenses properly as may be required for liquidation proceedings and exercise
all necessary acts in this connection. |
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| Statement
under section 160 of the Companies Ordinance 1984, pertaining to the Special
Business is being sent |
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| to
the members with this notice. |
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By order of the Board |
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| Karachi. |
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|
(Abdul Jabbar Ghori) |
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| 13th,
Oct, 2000 |
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|
Company Secretary |
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| NOTES: |
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| i)
The Share Transfer Books of the Company for the purpose of this Annual
General Meeting will |
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| remain
closed from 9-11-2000 to 18-11-2000 (both days inclusive). |
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| ii)
A member entitled to attend and vote at the Annual General Meeting is also
entitled to appoint |
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| another
member as proxy to attend and vote instead of him. |
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| iii)
The instrument appointing proxy must be received at the Registered Office of
the Company not |
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| less
than 48 hours before the time appointed for the meeting. |
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| iv)
Members are requested to notify change ill their address, if any, immediately
to the Registrar |
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| of
the company, Messrs. THK Associates (Pvt) Limited, Ground Floor, Sheikh
Sultan Trust |
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| Building
No.2, Beaumont Road, Karachi. |
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| Statement
u/s. 160 of the Companies Ordinance, 1984 in respect of Special Business:- |
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| ITEM NO. 5 |
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| The
Board of Directors recommended to increase the remuneration of Miss S. Feriel
Rifaat Ali, the Chief |
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| Executive/Managing
Director, from Rs. 600,000/= to Rs. 900,000/- per year from 1st July, 2000 to
June 30, |
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| 2001
and further provision of housing, transport, medical and leave facilities and
other benefits incidental or |
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| relating
to her office in accordance with the Company's rules from time to time in
force. |
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| The
share holders are requested to approve her remuneration and pass the
following resolution as a special |
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| resolution. |
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| Resolved
that consent be and is hereby given for the payment as remuneration to Miss.
S. Feriel Rifaat Ali, the |
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| Chief
Executive/Managing Director of the sum not exceeding Rs. 900,000/- per year
for the period from 1st July |
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| 2000
to June 30, 2001 and further provision for housing, transport, medical and
leave fare facilities and other |
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| benefits
incidental or relating to her office in accordance with the Company's rules
from time to time in force. |
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| Miss.
S. Feriel Rifaat Ali is interested to the extent of her remuneration. |
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| ITEM NO. 6 |
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| Hi-Lander
Soaps (Pvt) Ltd is the wholly owned subsidiary of Zulfeqar Industries Ltd.
The imposition of certain |
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| heavy
levies on the soap industry which previously enjoyed five years tax holiday
by the Government of Azad |
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| Kashmir
rendered the operations uneconomical and consequent termination of operations
of Hi-Lander Soaps |
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| (Pvt)
Ltd. The board of directors of Zulfeqar Industries Limited intends to move
members' voluntarily winding |
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| up
of the company. |
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| In
this respect the board of directors of Zulfeqar Industries Ltd recommends the
general body to pass with or |
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| without
modification as a special business, the following resolution as a special
resolution; |
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| RESOLVED
that the Company be wound up voluntarily and Mr. Abdul Jabbar Ghori, Company
Secretary be |
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| and
is hereby authorized to initiate the legal proceedings as per law. |
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| FURTHER
RESOLVED that S. Feriel Rifaat Ali, Chief Executive of the company be and is
hereby authorized to |
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| incur
expenses properly as may be required for liquidation proceedings and exercise
all necessary acts in this connection. |
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| DIRECTORS'
REPORT TO THE MEMBERS |
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| The
members of the Board of Directors feel pleasure in presenting to you the
Company's Audited Accounts for |
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| the
year ended on June 30, 2000, together with the Auditors' Report thereon. |
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| Overview: |
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| The
year under review commenced with the prevailing depressed economic conditions
in the country, encountering |
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| an
unhealthy environment for the industry. |
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| The
performance for the year under review, incorporate in it, the impact of an
enormously higher increase in the |
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| Utilities
cost, volatility of prices in the World Fat market, and last but not the
least an extremely fierce competition |
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| and
the availability of smuggled soaps at comparatively much cheaper prices. |
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| The
Tax Survey initiated by the new regime in March 2000, further deteriorated
the situation in affecting adversely |
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| the
soap industry due to Trade negative response, continuous calling of strike,
reduction in investment resulting |
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| in
an overall chaotic situation in the trade/industry. |
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| Operating
Results: |
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| The
Company's Operating Results are detailed thereunder:- |
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(Rs. in '000') |
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Year Ended |
Year Ended |
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June 30, 2000 |
June 30, 1999 |
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| Operating
Profit / (Loss) |
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|
3,647 |
(13,569) |
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| Add:
Other Income |
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|
4,397 |
210 |
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| Profit
/ (Loss) before Taxation |
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|
8,044 |
(13,359) |
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| Provision
for Taxation |
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|
2,632 |
2,385 |
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| Profit/(Loss)
after Taxation |
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|
5,412 |
(15,744) |
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| Accumulated
Profit / (Loss) brought forward |
|
(33,516) |
(17,772) |
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| Accumulated
Profit / (Loss) carried forward |
|
(28,104) |
(33,516) |
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| Despite
the above adversities / uncertainties coupled with the most aggressive
competition and the availability of |
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| smuggled
soaps, your Company has succeeded in achieving a modest increase in sales
volume and profitability. |
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| However,
the Operating Results for the year under review, if compared with previous
year shows a tremendous |
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| improvement,
as a result of many corrective actions taken, such as building of the Capri
Brand Quality Image, |
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| restructuring
of the organization and a reduction in operating cost. |
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| The
Gross profit at 14.3% as compared to the gross profit at 11.3% of last year,
confirms an overall excellent |
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| performance
with ownership and as a team in achieving these excellent results. The net
before tax profit of Rs. |
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| 8.04
million as compared to the net before Tax Loss of Rs. 13.3 million last year,
further proves a turn around of |
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| Rs.
21.4 million, due to the concerted efforts of the management and staff. |
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| In
order to improve the "Capri Brand Quality Image" in the Soap
market, which is flooded with the smuggled |
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| soaps,
your company had carried out intensive marketing activities within its
limited resources. Consequently, the |
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| marketing,
selling and distribution expenses this year have recorded an increase of Rs.
9.2 million (year 2000 Rs. |
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| 44.2
million year 1999 Rs. 35.0 million) as compared to the last year. Further,
the financial expenses reduced by |
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| about
Rs. 3.5 million as compared to the previous year, due to the reduction in the
extended Banking facilities |
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| from
the local banks but at comparatively much higher markup rate. |
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| Future
Prospects: |
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| The
Company within its mandate, the required business / professional ethics and
legal boundaries is making all |
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| efforts
to achieving the cost leadership through various corrective measures. These
include the rectification of |
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| identified
structural weaknesses through restructuring of organization, combining of
services of ZIL & WIL, |
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| induction
of an effective and efficient management team and an adjustment in the
distribution network. On successful |
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| implementation
of above, the overall performance of the Company will improve further,
together with a favorable |
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| improvement
on the profitability of the Company. The members of the Board of Directors
look forward a much |
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| better
and prosperous future of the Company due to a clear articulation of
management vision and mission. |
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| In
the light of corrective measures discussed above, together with a better
leverage and the most aggressive business |
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| and
marketing plans, that your Company had developed for the faster promotion /
growth of 31 years old Nationally |
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| known
Capri Brand, will improve the performance of the Company considerably in the
forthcoming year, |
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| INSHALLAH. |
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| Right Issue: |
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| The
right issue of shares on 1:1 basis as approved in the last Board of Directors
meeting held on February 23, |
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| 2000
is in progress and that these will be fully subscribed. |
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|
| Development
and Diversification: |
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| The
improvement in the existing products and the development of the new products
remained apace. |
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| The
performance of the newly revamped "Capri" and newly developed and
launched "ZIL Dish Wash Bar" had |
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| been
excellent, in taking care of the health and well being of the entire family. |
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| Further,
the management of your Company has also considered it advisable to diversify
in some related skin and |
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| personal
care product business. |
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| ISO-9001: |
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| Another
encouraging news is that your Company has been awarded the ISO-9001
Certificate. It represents the hard |
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| working
and determination of your management in modifying and developing the
Production Processes and Factories |
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| to
classify Zulfeqar Industries Limited, as the only Company of Pakistan engaged
in manufacturing the highest |
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| quality
Toilet and Laundry Soaps under the "Most Clean and Hygienic
Environment." |
|
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| Change
in the Board of Directors: |
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| In
the year under review, the following directors had retired, to whom the
members of the Board of Directors place |
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| on
record their appreciation and recognition for their services rendered in the
development and growth of the |
|
| Company. |
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|
| Mr.
Behram Hassan |
|
| Ms. Sara Jawaid |
|
| Mr. Nasim Beg |
|
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| Auditors: |
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| The
present auditors, Taseer Hadi Khalid and Company, Chartered Accountants, due
to retire and being eligible, |
|
| offer
themselves for reappointment for the year ending on June 30, 2001. |
|
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| Pattern
of Shareholding: |
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| The
Statement of pattern of shareholding is given on Page No. 27 |
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| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Zulfeqar Industries Limited as at
30 June 2000 and the related profit |
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| 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 purposes 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 statement in conformity with the approved
accounting standards and the |
|
| requirements
of the Companies Ordinance, 1984. Our responsibility is to express an opinion
on these statement |
|
| based
on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These standards require |
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| that
we plan and perform the audit to obtain reasonable assurance about whether
the above said statements are free |
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| of
any material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and |
|
| disclosures
in the above said statements. An audit also includes assessing the accounting
policies and significant |
|
| estimates
made by management, as well as, evaluating the overall presentation of the
above said statement. We |
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| 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 account have been kept by the company as
required by the Companies |
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| Ordinance,
1984; |
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|
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| b)
in our opinion: |
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|
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| i)
the balance sheet and profit and loss account together with the notes thereon
have been drawn up in |
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| conformity
with the Companies Ordinance, 1984, and are in agreement with the books of
account and |
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| 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 |
|
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| iii)
the business conducted, investments made and the expenditure incurred during
the year were in |
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| 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, profit 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 us a true and fair view of the state of the company's affairs as at 30
June 2000 and of |
|
| the
profit, 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 (XVIII of 1980). |
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|
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| Karachi |
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|
Taseer Hadi Khalid & Co, |
|
| 13 October 2000 |
|
|
Chartered Accountants |
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|
| Balance
Sheet as at 30 June 2000 |
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|
Note |
2000 |
1999 |
|
|
|
(Rupees in
'000) |
|
|
|
|
|
| OPERATING
ASSETS - at cost/revaluation less |
|
| accumulated
depreciation |
|
3 |
67,093 |
24,981 |
|
| TRADE
MARKS - at cost |
|
|
471 |
471 |
|
| LONG
TERM DEPOSITS |
|
4 |
1,198 |
845 |
|
|
| CURRENT
ASSETS |
|
| Stores
and spares |
|
5 |
2,684 |
5,326 |
|
| Stock-in-trade |
|
6 |
58,231 |
72,045 |
|
| Short
term investment |
|
7 |
3,000 |
3,000 |
|
| Trade
debtors-unsecured, considered good |
8 |
20,447 |
10,338 |
|
| Advances,
deposits, prepayments and other receivables |
9 |
32,329 |
27,779 |
|
| Cash
and bank balances |
|
10 |
17,770 |
4,190 |
|
|
|
|
------------------ |
------------------ |
|
|
|
134,461 |
122,678 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
| Current
maturity of long term demand finance and |
|
| liabilities
against assets subject to finance lease |
11 |
17,220 |
398 |
|
| Finance
under mark-up arrangements - secured |
12 |
11,055 |
77,139 |
|
| Creditors,
accrued expenses and other liabilities |
13 |
62,312 |
46,075 |
|
| Provision
for taxation |
|
14 |
4,864 |
2,232 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
95,451 |
125,844 |
|
|
|
|
------------------ |
------------------ |
|
| NET
CURRENT ASSETS |
|
|
39,010 |
(3,166) |
|
|
|
|
------------------ |
------------------ |
|
| NET ASSETS |
|
|
107,772 |
23,131 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| FINANCED BY: |
|
| SHARE
CAPITAL |
|
15 |
20,000 |
20,000 |
|
| REVENUE
RESERVES |
|
|
6,000 |
6,000 |
|
| ACCUMULATED
LOSS |
|
|
(28,104) |
(33,516) |
|
|
|
|
------------------ |
------------------ |
|
| SHARE
HOLDER'S EQUITY |
|
|
(2,104) |
(7,516) |
|
|
|
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
16 |
58,761 |
16,519 |
|
| LONG
TERM DEMAND FINANCE |
17 |
22,000 |
-- |
|
| ADVANCE
AGAINST RIGHT ISSUE |
18 |
7,500 |
-- |
|
| LONG
TERM DEPOSITS |
|
|
450 |
50 |
|
| DEFERRED
LIABILITIES |
|
19 |
19,566 |
13,728 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT TO |
|
|
|
| FINANCE
LEASE |
|
20 |
1,599 |
350 |
|
| CONTINGENCIES
AND COMMITMENTS |
21 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
107,772 |
23,131 |
|
|
|
========== |
========== |
|
|
|
|
| These
account should be read in conjunction with the attached notes. |
|
|
|
S. Feriel Rifaat Ali |
|
|
Kemal Shoaib |
|
|
Chief Executive |
|
|
Director |
|
|
|
| Profit
and Loss Account |
|
| for
the year ended 30 June 2000 |
|
|
|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees in
'000) |
|
|
|
|
|
| Sales - Net |
|
22 |
511,277 |
436,588 |
|
| Cost
of Goods Sold |
|
23 |
438,026 |
387,405 |
|
|
|
|
------------------ |
------------------ |
|
| Gross Profit |
|
|
73,251 |
49,183 |
|
|
| Administrative
expenses |
|
24 |
10,813 |
10,147 |
|
| Selling
and distribution expenses |
|
25 |
44,249 |
35,085 |
|
| Financial
expenses |
|
26 |
13,982 |
17,520 |
|
| Worker's
Welfare Fund |
|
|
130 |
-- |
|
| Worker's
Profit Participation Fund |
|
430 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
69,604 |
62,752 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
3,647 |
(13,569) |
|
|
|
|
|
|
| Other
income - net |
|
27 |
4,397 |
210 |
|
|
|
|
------------------ |
------------------ |
|
| Profit/(1oss)
before taxation |
|
|
8,044 |
(13,359) |
|
|
| Provision
for taxation |
|
| - Current |
|
|
2,632 |
2,239 |
|
| - Prior |
|
|
-- |
146 |
|
|
|
------------------ |
------------------ |
|
|
|
2,632 |
2,385 |
|
|
|
------------------ |
------------------ |
|
| Profit/(1oss)
after taxation |
|
5,412 |
(15,744) |
|
|
| Accumulated
loss brought forward |
|
(33,516) |
(17,772) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
loss carried forward |
|
|
(28,104) |
(33,516) |
|
|
|
|
========== |
========== |
|
| Earning/(Loss)
per share |
|
29 |
2.71 |
(7.87) |
|
|
========== |
========== |
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
S. Feriel Rifaat Ali |
|
|
Kemal Shoaib |
|
|
Chief Executive |
|
|
Director |
|
|
|
| Statement
of Changes in Financial Position |
|
| for
the year ended 30 June 2000 |
|
|
|
|
2000 |
1999 |
|
|
|
(Rupees in
'000) |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
| Profit/(loss)
before taxation |
|
|
8,044 |
(13,359) |
|
|
| Adjustment for: |
|
| Mark-up
expense |
|
|
11,455 |
13,586 |
|
| Depreciation |
|
|
3.22 |
3,153 |
|
| Provision
for gratuity |
|
|
1,977 |
2,082 |
|
| Provision
for retirement benefits |
|
|
6,012 |
-- |
|
| Gain
on disposal of fixed assets |
|
|
(4,261) |
(113) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
18,403 |
18,708 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
26,447 |
5,349 |
|
|
| Decrease/(increase)
in operating assets |
|
| Stores
and spares |
|
|
2.64 |
205 |
|
| Stock in trade |
|
|
13,814 |
26,263 |
|
| Trade debtors |
|
|
(10,109) |
(2,133) |
|
| Advances,
deposits, prepayments and other receivables |
485 |
3,601 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
6,832 |
27,936 |
|
| Increase/(decrease)
in operating liabilities |
|
| Creditors,
accrued expenses and other liabilities |
|
18,344 |
(25,220) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
51,623 |
8,065 |
|
|
| Income tax paid |
|
|
(5,035) |
(6,843) |
|
| Gratuity paid |
|
|
(1,150) |
(856) |
|
| Retirement
Benefits paid |
|
|
(1,001) |
-- |
|
| Mark-up paid |
|
|
(13,563) |
(10,518) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(20,749) |
(18,217) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flows/(used in) from operating activities |
|
30,874 |
(10,152) |
|
|
| Cash
Flows From Investing Activities |
|
| Fixed
capital expenditure |
|
|
(3,871) |
(2,467) |
|
| Sale
proceeds of fixed assets |
|
|
5,043 |
157 |
|
| Long
term deposits |
|
|
(353) |
25 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
819 |
(2,285) |
|
|
|
