| Diamond Industries Limited |
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| Annual Report 1999 |
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| Contents |
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| DIAMOND
INDUSTRIES |
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| Company
Information |
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| Notice Meeting |
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| Directors' Report |
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| Auditors' Report |
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| Balance Sheet |
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| Profit
& Loss Account |
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| Cash Flow Statement |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| Accounts
of Subsidiary Company |
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| DIAMOND
POLYMERS (PVT) LTD |
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| Company
Information |
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| Directors' Report |
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| Auditors' Report |
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| Balance Sheet |
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| Profit
& Loss Account |
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| Cash Flow Statement |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| CONSOLIDA
TED FINANCIAL STATEMENTS |
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| DIAMOND
INDUSTRIES LTD AND SUBSIDIARY |
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| General
Information (Subsidiary) |
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| Auditor
Report to the Board of Directors' |
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| Consolidated
Balance Sheet |
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| Consolidated
Profit and Loss Accounts |
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| Consolidated
Cash Flow Statement |
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Diamond Industries Limited |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS: |
MR. IFTIKHAR A. SHAFFI |
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Chairman / Chief
Executive |
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MR. WAQAR A. SHAFFI |
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MR. MUHAMMAD SAEED |
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MR. SHARIQ IFTIKHAR |
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MR. M. H. PERVEZ |
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|
SYED M. NAWAZ |
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|
MR. SOHAIL MALIK |
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| COMPANY
SECRETARY: |
CH. MUHAMMAD TUFAIL |
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| AUDITORS: |
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SALEEM AHSAN & CO. |
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|
Chartered Accountants |
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| LEGAL ADVISORS: |
|
IRTIZA ALI NAQVI &
ASSOCIATES |
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| BANKERS: |
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- ALLIED BANK OF PAKISTAN
LTD. |
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- EMIRATES BANK
INTERNATIONAL |
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- FIDELITY INVESTMENT
BANK LTD. |
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- GULF COMMERCIAL BANK
LTD. |
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- MUSLIM COMMERCIAL BANK
LTD. |
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- PLATINUM COMMERCIAL
BANK LTD. |
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- NATIONAL BANK OF PAKISTAN. |
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| REGISTERED
OFFICE: |
PLOT NO. 25, GADOON
AMAZAI |
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|
INDUSTRIAL ESTATE, SWABI
(N.W.F.P.) |
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PH:
0938-70297-70397-70597 |
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| WORKS: |
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PLOT NO. 25, GADOON
AMAZAI |
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|
INDUSTRIAL ESTATE, SWABI
(N.W.F.P.) |
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PH: 0938-70297 |
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| SHARES
DEPARTMENT: |
MALIK BAGH, BARADARI
ROAD, |
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SHAHDARA, LAHORE |
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PH: 111-111-666,
7932001-8 |
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FAX: 7925299, TLX; 44590
DRM PK. |
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Email: diamond@brain.net.
pk |
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| NOTICE
OF MEETING |
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| NOTICE
is hereby given that the 10th Annual General Meeting of Diamond Industries
Limited, |
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| will
be held at Principal Office of the company at Malik Bagh, Baradari Road,
Shahdara, |
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| Lahore,
on December 27, 1999 at 2.00 P.M. to transact the following business. |
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| 1.
To confirm the minutes of the last General Meeting held on 30th December,
1998. |
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| 2.
To receive, consider and adopt the Annual Audited Accounts of the Company
together |
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| with
the Auditors' and Directors' Reports for the period ended June 30, 1999. |
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| 3.
To appoint Auditors and fix their remuneration. |
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| 4.
To consider any other matter of the Company with the permission of the Chair. |
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| SHARE
REGISTRAR ADDRESS: |
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By Order of the Board |
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| Soft
Link (Pvt), Limited |
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| Wings
Arcade, 1-K (Commercial) |
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CH. MUHAMMAD TUFAIL |
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| Model
Town, Lahore. |
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Company Secretary |
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| Lahore |
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| Dated
4th December, 1999. |
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| NOTES: |
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| 1.
The share transfer books of the Company will be closed from 27 December, 1999
to |
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| 2nd
January, 2000 (both days inclusive). |
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| 2.
A member entitled to attend and vote at this Meeting may appoint another
member as |
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| his/her
proxy to attend and vote on his/her behalf. The instrument appointing a proxy |
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| must
be received by the company not later than 48 hours before the Meeting. |
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| 3.
Members are requested to notify any change in address immediately. |
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| 4.
Kindly quote folio number in all correspondence with the Company. |
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| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
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| I
welcome you to the 10th Annual General Meeting arid am pleased to present to
you |
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| on
behalf of the Board of Directors this annual report alongwith the financial
results |
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| of
the Company and Auditors' Report thereon for the period ended June 30, 1999. |
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| The
financial results of your company are as under: |
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|
(In Rs.) |
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| Operating
Profit/(Loss) |
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|
(11,542,879) |
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| Other Income/ (Loss) |
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|
11,699,952 |
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|
---------------- |
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| Profit |
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|
117,073 |
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| Financial Charges |
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|
5,228,202 |
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|
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|
---------------- |
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| Profit/
(Loss) before taxation |
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|
(5,111,129) |
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| Taxation |
|
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|
677,339 |
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|
---------------- |
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| Profit/
(Loss) after taxation |
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|
(5,788,468} |
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| Accumulated
profit brought forward |
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|
108,852,426 |
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| Prior year adjustment |
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|
84,144 |
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---------------- |
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|
108,936,570 |
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---------------- |
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| Unappropriated
profit carried forward to Balance sheet |
103,148,102 |
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========= |
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| The
results show loss and it is not surprising if we keep in view the overall |
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| deteriorating
political and economic situation of the Country almost in all areas and |
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| more
particularly in industrial and commercial sectors. . |
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| You
will also notice that the investment by the Company has yielded an income of |
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| Rs.
12,297,541/- , being dividend received by your company. This not only has
lowered |
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| the
loss figure but also shows that how prudently the funds of the company are |
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| invested
in its best interest. |
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| The
financial year started under the shadow of economic sanctions and fear of |
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| imminent
default on international financial commitments. Large part of the year |
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| was
spent by the economic managers in encountering these developments. Even |
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| till
this date the situation is not very clear as to how future out look should be |
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| considered. |
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| Then
the Kargil issue at the fag end of the year compounded the problems further
for |
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| the
Country. The economic situation had hardly started towards some recovery |
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| after
rescheduling of debts and release of IMF tranche, the conflict between India
and |
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| Pakistan
arose on Karg'11 and stunned growth in the trading and industrial |
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| activities.
. |
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| Although
the crises is over, its effect on foreign trade and the national economy is |
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| not
yet fully recovered. While we were hoping for the better, the army coup in
the |
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| country
took place and Nawaz Sharif Government was toppled. General Pervez Musharraf |
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| took
over as Chief Executive of the Country. For some time, the situation for the |
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| future
was not clear. The government laid great stress on the recovery of loans /
dues |
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| from
the defaulters and although we were not at all defaulters in any way but were |
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| victimized
by the move towards us by the concerned agencies on forced and unlawful |
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| encashment
of bank guarantees by the Collector of Customs, Peshawar, while our |
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| case
was still pending with the Supreme Court of Pakistan. |
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| We
summarize as under the following facts to explain our problems so as to bring
it |
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| to
your notice being our shareholders in particular and to others in general.
The |
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| Collector
of Customs, Peshawar, was aware that the honourable Supreme Court of |
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| Pakistan
had delivered its judgment on our petition filed against CBR with respect to |
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| the
bank guarantees provided by us and in sheer violation of the Honourable
Supreme |
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| Court's
stay order dated 18.02.1999, the Collector Customs, Peshawar, on |
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| 18.10.1999
encashed our bank guarantees to the tune of Rs. 242.194(M) by |
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| pressurizing
our bank arbitrarily and with malafide intentions. The Collector himself |
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| worked
out our 25% compensation for Rs. 18.374(M), which later was also encashed |
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| making
the total to Rs. 260.568(M). Actually , the compensation was required to be |
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| worked
out by C.B.R. (Survey & Rebate department) as was worked out in 109
cases, |
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| wherein
compensation of more than Rs. 437 Crore was paid. We are giving below |
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| comparison
of our unit with our competitors in Gadoon: |
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|
AL-KHAIR |
KHYBER |
DIAMOND |
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| 1. Land |
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3 Acres |
4 Acres |
6 Acres |
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| 2.
Manufacturing Licence date |
30.1.1991 |
20.1.1990 |
11.10.1989 |
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| 3. Plant Capacity |
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7500 Tons |
8000 Tons |
8000 Tons |
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| 4.
Form-S (Capacity Certificate) |
227 Tons |
2922 Tons |
2229 Tons |
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| 5. Entitlement |
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3400 Tons |
3672 Tons |
300 Tons |
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| 6.
Compensation paid value (Rs.) |
256.000 M |
216.000 M |
18.000 M |
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| On
19.2.1999, we had filed compensation claim with the C.B.R. (Survey &
Rebate |
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| Department)
on the directions of the Honourable Supreme Court for Rs. 477(M). Our claim |
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| was
based on same methodology by which the C.B.R. had paid claims of Rs. 437
Crores |
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| to
A1-Khair, Khyber and 107 other industrial units in Gadoon. |
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| The
intention of the Collector appeared simply to victimize us and create huge
tax liability |
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| against
our company and turn us into tax defaulters / evaders before 16th November, |
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| 1999.
Moreover, Peshawar Collectorate is gearing up fictitious tax demands against
our |
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| company.
We moved contempt of Court proceeding against Collector of Customs, |
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| Peshawar.
· |
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| The
case came up for hearing before the Honourable Supreme Court of Pakistan on |
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| 05.11.1999
and observed discrimination by the C.B.R. / Collector, Peshawar in our case |
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| and
ordered for hearing main case within this month. |
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| The
industries / business houses by such undiscriminating attitude by the
authorities |
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| are
hardly able to run smoothly.
. |
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| The
financial results of your company do not warrant declaration of any dividend
as |
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| present
situation shows loss per share of Rs. (0.64). . |
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| We
had imported raw material with the consideration to restart production at our
factory |
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| at
Gadoon Amazai, but in view of the situation in the Country and the attitude
of |
|
| agencies
against us as explained above, we feel that we should wait for some suitable
time. |
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| Foreseeing
such an uncertain state of affairs for quite some time till the establishment |
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| of
an elected democratic Government in Pakistan, your directors, is your
interest and in |
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| the
interest of General Public, are considering to arrange for delisting of your
company |
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| from
the Stock Exchanges at Karachi, Lahore and Islamabad. |
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|
| MILLENNIUM
COMPLIANCE |
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| The
Y2K compliance program has had been on our priority list and we have tried to |
|
| develop
it to meet with our business requirements. Though it cannot be predicted with |
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| full
certainty as to what may happen as a result of millennium bug, but we are
hopeful |
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| that
our preparation relating to computer system will enable us to achieve
satisfactory |
|
| results. |
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|
| AUDITORS |
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| The
retiring auditors Saleem Ahsan & Company, Chartered Accountants being
eligible, |
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| offer
themselves for reappointment. |
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|
| PATTERN
OF SHAREHOLDING |
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| A
statement reflecting the pattern of shareholding under section 236 of the
Companies |
|
| Ordinance
1984 is attached to the report. |
|
|
| The
Board places on record its appreciation to the contribution made by the
outgoing |
|
| Chairman
Mian S. M. Shaffi having resigned and greets Mr. Iktikhar A. Shaffi as the
new |
|
| Chairman
who would also continue as the Chief Executive of the Company. |
|
|
| The
board welcomes Mr. Sohail Malik as the new director appointed by the board to
fill |
|
| up
the casual vacancy. |
|
|
| On
behalf of the board I would like to thank all the staff and the management
for their |
|
| efforts
and contribution. |
|
|
|
For and on behalf of the
Board |
|
| Lahore |
|
|
IFTIKHAR A. SHAFFI |
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| Dated:
November 20, 1999. |
|
CHIEF EXECUTIVE |
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|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of DIAMOND INDUSTRIES LIMITED, as at |
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| June
30, 1999, and the related Profit and Loss account and Statement of Changes in |
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| Financial
Position, together with the notes forming part thereof, for the year then
ended |
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| 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 and
after |
|
| due
verification thereof, we report that: . |
|
|
| a)
In our opinion, proper books of account have been kept by the company as
required |
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| by
the Companies Ordinance, 1984. |
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|
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| b) In our opinion; |
|
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| (i)
the balance sheet and profit and loss accounts together with the notes
thereon |
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| have
been drawn upon in conformity with the Companies Ordinance, 1984, and |
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| are
in agreement with the books of account and are further in accordance with |
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| accounting
policies consistently applied; |
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|
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| (ii)
the expenditure incurred during the year was for the purpose of the company's |
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| business', and |
|
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| (iii)
the business conducted, investments made and the expenditure incurred |
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| during the year were in accordance with the
object of the company. |
|
|
| c)
In our opinion subject to Note No. 7 and to the best of our information and
according |
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| to the explanations given to us, the
Balance Sheet, Profit and Loss Account and |
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| Statement of Changes in Financial Position,
together with the notes forming part |
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| thereof, 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, 1999, and of the
LOSS and Changes in Financial Position for the |
|
| year then ended; and |
|
|
| d)
In our opinion no zakat was deductible at source under Zakat and Ushr
Ordinance, |
|
| 1980. |
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|
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| Lahore |
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|
SALEEM AHSAN & CO. |
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| Dated:
November 20, 1999. |
|
Chartered Accountants |
|
|
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|
|
| BALANCE
SHEET AS ON JUNE 30, 1999 |
|
|
|
|
Note |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
| CAPITAL
& LIABILITIES |
|
|
| AUTHORIZED
CAPITAL |
|
| 12,000,000
Ordinary Shares of Rs. 10 Each |
|
120,000,000 |
120,000,000 |
|
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|
========== |
========== |
|
| ISSUED,
SUBSCRIBED & PAID UP CAPITAL |
|
|
| 9,000,000
Ordinary Shares of Rs. 10 Each. |
3 |
90,000,000 |
90,000,000 |
|
| Up-appropriated
Profit |
|
|
103,148,102 |
108,852,426 |
|
|
|
|
----------------- |
----------------- |
|
|
|
|
193,148,102 |
198,852,426 |
|
|
| SURPLUS ON REVALUATION OF
FIXED ASSETS |
4 |
50,163,799 |
50,163,799 |
|
|
| CURRENT
LIABILITIES |
|
|
| Short
Term Loans - Secured |
|
5 |
42,956,641 |
32,045,466 |
|
| Creditors
& Accrued Liabilities |
|
6 |
16,090,937 |
7,100,706 |
|
| Other Liabilities |
|
|
|
7,432,111 |
7,432,111 |
|
| Provision
For Taxation |
|
|
677,339 |
-- |
|
| Unclaimed Dividend |
|
|
67,890 |
67,890 |
|
|
| CONTINGENCIES AND
COMMITMENTS |
7 |
|
|
|
67,224,918 |
46,646,173 |
|
|
|
----------------- |
----------------- |
|
|
|
310,536,819 |
295,662,398 |
|
|
========== |
========== |
|
|
| PROPERTY
& ASSETS |
|
| FIXED ASSETS |
|
| (At
cost less depreciation) |
|
8 |
92,398,420 |
91,310,852 |
|
|
|
|
-- |
4,023,813 |
|
| Capital
work in progress |
|
|
|
|
|
|
| Deferred Cost |
|
|
527,417 |
1,054,834 |
|
| Long
Term Investment |
|
9 |
31,772,120 |
11,116,700 |
|
|
| CURRENT ASSETS |
|
| Stock in Trade |
|
10 |
64,381,451 |
18,903,982 |
|
| Debtors |
|
|
2,712,752 |
611,238 |
|
| Short
Term Investment |
|
11 |
99,816,578 |
141,820,416 |
|
| Advances,
Deposit, Prepayments & |
|
| Other Receivable |
|
12 |
16,940,454 |
12,194,986 |
|
| Cash
and Bank Balances |
|
13 |
1,987,627 |
14,625,577 |
|
|
|
|
----------------- |
----------------- |
|
|
|
|
185,838,862 |
188,156,199 |
|
|
----------------- |
----------------- |
|
|
|
310,536,819 |
295,662,398 |
|
|
========== |
========== |
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| IFTIKHAR
A. SHAFFI |
|
MUHAMMAD SAEED |
|
| CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
FOAM |
|
PVA |
|
TOTAL |
|
|
|
|
|
1999 |
1998 |
1999 |
1998 |
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
| SALES |
|
|
7,628,226 |
8,356,140 |
4,864,152 |
-- |
12,492,378 |
8,356,140 |
|
| COST
OF GOODS SOLD |
14 |
11,256,784 |
10,970,371 |
3,763,070 |
-- |
15,019,854 |
10,970,371 |
|
|
---------------- |
---------------- |
---------------- |
---------------- |
---------------- |
---------------- |
|
| GROSS
PROFIT/(LOSS) |
|
(3,628,558) |
(2,614,231) |
1,101,082 |
-- |
(2,527,476) |
(2,614,231) |
|
|
|
| OPERATING
EXPENSES |
|
| Administrator |
|
15 |
6,474,274 |
8,693,567 |
1,865,388 |
-- |
8,339,662 |
8,693,567 |
|
| Selling |
|
16 |
-- |
304,111 |
675,741 |
-- |
675,741 |
304,111 |
|
|
|
---------------- |
---------------- |
---------------- |
---------------- |
---------------- |
---------------- |
|
|
6,474,274 |
8,997,678 |
2,541,129 |
-- |
9,015,403 |
8,997,678 |
|
|
---------------- |
---------------- |
---------------- |
---------------- |
---------------- |
---------------- |
|
| Operating
Profit/(Loss) |
|
(10,102,832) |
(11,611,909) |
(1,440,047) |
-- |
(11,542,879) |
911,611,909) |
|
|
---------------- |
---------------- |
---------------- |
---------------- |
|
|
| Other Income (Loss) |
|
17 |
|
11,659,952 |
(3892,794) |
|
|
|
|
---------------- |
---------------- |
|
|
|
|
117,073 |
(15,504,703) |
|
| Financial Charges |
|
18 |
|
5,228,202 |
6,254,842 |
|
|
|
|
---------------- |
---------------- |
|
| Profit/(Loss)
Before Taxation |
|
|
(5,111,129) |
(21,759,545) |
|
| Taxation |
|
677,339 |
-- |
|
|
---------------- |
---------------- |
|
| Profit/(Loss)
After Taxation |
|
(5,788,468) |
(21,759,545) |
|
|
---------------- |
---------------- |
|
| Un-appropriated
Profit Brought Forward |
|
108,852,426 |
1,307,232,176 |
|
| Prior
Year Adjustments |
|
84,144 |
-110,205 |
|
|
---------------- |
---------------- |
|
|
108,936,570 |
130,611,971 |
|
|
|
---------------- |
---------------- |
|
| Un-appropriated
Profit Carried Forward to Balance Sheet |
|
103,148,102 |
108,852,426 |
|
|
========== |
========== |
|
|
|
|
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Net
Profit/ (Loss) before taxation |
|
(5,111,129) |
(21,759,545) |
|
| Adjustments for: |
|
| Depreciation |
|
|
2,923,929 |
9,224,519 |
|
| Amortization |
|
|
527,417 |
527,417 |
|
| Financial Expenses |
|
|
5,228,202 |
6,254,842 |
|
| Profit
on Disposal of Assets |
|
|
(724,749) |
(54,221) |
|
| Other Income |
|
|
(12,297,541) |
(3,258,685) |
|
| Others |
|
|
1,362,338 |
7,205,700 |
|
|
| Operating
Profit Before Working |
|
| Capital
Changes And Financial Expenses |
|
(8,091,533} |
(1,859,973) |
|
| Change
in working Capital |
|
|
|
|
| (Increase)
/Decrease in Stock in Trade |
|
(45,477,469) |
(6,692,851) |
|
| (Increase)
/ Decrease in Debtors |
|
|
(2,101,514) |
7,399,729 |
|
| (Increase)/Decrease
in Due from Associated Concern |
-- |
19,800,814 |
|
| (Increase)/Decrease
in Advances, Deposits, |
|
|
|
| Prepayments
& Others Receivable |
|
|
(4,745,468) |
(1,657,145) |
|
|
|
|
----------------- |
----------------- |
|
|
|
|
|
(52,324,451) |
18,850,547 |
|
| Increase/(Decrease)
in Creditors & accrued Liabilities |
8,990,231 |
1,986,214 |
|
|
|
|
----------------- |
----------------- |
|
| Changes
in Working Capital |
|
|
(43,334,220) |
20,836,761 |
|
|
|
|
----------------- |
----------------- |
|
| Cash
Generated From Operations |
|
|
(51,425,753) |
18,976,788 |
|
| Financial Expenses |
|
|
(5,228,202) |
6,254,842 |
|
| Taxes
Paid/Adjustment |
|
|
84,144 |
110,205 |
|
|
|
|
----------------- |
----------------- |
|
| Net
Cash From Operating Activities |
|
(56,569,811) |
12,611,741 |
|
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Net Fixed Assets |
|
|
(4,554,934) |
(4,046,541) |
|
| Long
Term Investment |
|
|
(20,655,420) |
-- |
|
| Short
Term Investment |
|
|
42,003,838 |
26,959,734 |
|
| Payment of Dividend |
|
|
-- |
(1,080) |
|
| Capital
Work in Progress |
|
|
4,023,813 |
(3,389) |
