| Al-Khair Gadoon Limited |
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| Annual Report 1999 |
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| CONTENTS |
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| Company Information |
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| Notice of Annual General
Meeting |
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| Directors'
Report to the Members |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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| Profit and 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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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS : |
|
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| CHAIRMAN |
Mr. Umer Hayat Sheikh |
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| CHIEF EXECUTIVE |
Mr. Mohammad Saeed Sheikh |
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| DIRECTORS |
Mr. Amir Mohammad Khan |
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|
Mr. Mohammed Afzal Sheikh |
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|
Mr. Sheikh Pervaiz Afzal |
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|
Mr. Mohammed Amin Sheikh |
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|
Mr. Nadeem Afzal |
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| COMPANY SECRETARY: |
Mr. Mohammed Amin Sheikh |
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| JOINT AUDITORS: |
M/s. Akhtar Naqvi &
Co., Chartered Accountants. |
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|
M/s. Tahir Siddiqi &
Co., Chartered Accountants. |
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| LEGAL ADVISOR: |
Mr. Iqbal
Hameed-ur-Rehman |
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| BANKERS: |
Allied Bank of Pakistan
Ltd, |
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|
Islamic Investment Bank
Ltd. |
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|
Faysal Bank Limited |
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| REGISTERED OFFICE |
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| & FACTORY SITE: |
92/3, Phase III,
Industrial Estate, |
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|
Gadoon Amazai, |
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|
District Swabi, (N.W.F.P) |
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|
Tel: (0938) 70260 |
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Fax: (0938)70270 |
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| CORPORATE OFFICE: |
Al-Khair House, |
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|
43-T, Gulberg II, |
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|
Lahore. |
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Tel: (042) 5716580- 87 |
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|
Fax: (042) 5716588- 89 |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the 9th Annual General Meeting of Al-Khair Gadoon
Limited, will be held on Thursday the |
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| December
30, 1999 at 9:00 A.M. at the Registered Office of the company at 92/3, Phase
III, Industrial Estate; |
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| Gadoon
Amazai, District Swabi, NWFP, to transact the following business: |
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| 1.
To confirm the minutes of the 8th Annual General Meeting held on December 31,
1998. |
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| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended June 30, 1999, |
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| together
with the Directors' and Auditors' Reports thereon. |
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| 3.
To approve and declare the 10% final dividend to the Shareholders for the
year ended June 30, 1999. |
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| Except
sponsoring Directors and their relatives, wing at the request of the
Management agreed to forego |
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| their right to dividend. |
|
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| 4. To appoint Auditors of the Company and
fix their remuneration. |
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| 5.
To transact any other business with the permission of the Chairman. |
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| BY
ORDER OF THE BOARD |
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|
|
(MOHAMMED AMIN SHEIKH) |
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| Dated: December 06, 1999 |
|
Company Secretary |
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| NOTES: |
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| 1.
Share Transfer Books of the Company will remain closed from December 24 to
December 30, 1999 |
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| (both
days inclusive). Transfers received in order upto the close of business on
December 23, 1999 at the |
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| Head
Office of the company at AI-Khair House, 43-T, Gulberg II, Lahore will be
entitled to dividend. |
|
|
| 2.
A member of the Company entitled to attend and vote at the meeting may
appoint another member as |
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| his/her
proxy to attend and vote. Votes may be given personally or by proxy or Dy
Attorney or in case of a |
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| Corporation
by representative. The instrument of proxy duly executed should be lodged at
the Head |
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| Office
of the company at Al-Khair House, 43 - T, Gulberg II, Lahore not later than
48 hours before the time |
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| of meeting. |
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| 3.
Filing of Declaration for exemption of Zakat. Members are requested to file
their declaration under the Zakat |
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| and
Ushr Ordinance, 1980 on non-judicial Stamp Paper of Rs.20/- for exemption of
Zakat, if desired. |
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|
| 4.
Members are requested to notify the change in their address, if any,
immediately. |
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| DIRECTORS'
REPORT TO THE MEMBERS |
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|
| On
behalf of the Board of Directors I am pleased to present the 9th annual
report of your Company. This report relates to the |
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| year ended June 30, 1999. |
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| During
the year under review, the Company has continued to capitalise its strength
by investing in its wholly owned subsidiary at |
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| Mirpur
(AJK). M/s Al-Khair Mirpur (Pvt) Ltd. This decision has been very fruitful as
the overall profitability has been enhanced. |
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| Due
to withdrawal of every facility given to Gadoon Industrial Estate, the
existence of the Company was no more economically |
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| viable,
The Company has plan to continue its operation at Gadoon Industrial Estate,
but at low level, The main emphasis will be |
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| through its subsidiary. |
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| The
Head Office building. Al-Khair House at 43-T, Gulberg II, Lahore was
completed and its two floors have been rented out to |
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| Government
owned M/s Small and Medium Enterprises Development Authority (SMEDA), The
basement is being used by the |
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| Company itself. |
|
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| During
the year there had a loss of work in process due to fire to the extent of Rs.
17288,196/- after receipt of Insurance claim, |
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| the
net loss of Rs. 7,288,196/- has to be suffered. The Management of the Company
is keen to extend its operation throughout |
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| Pakistan,
especially in Karachi. A branch office bas been set-up and a young and
talented sales team is looking after its affair. |
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| The
overall sales is expected to increase by 50% after Karachi market is fully
explored. The other cities are also being explored |
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| to
enhance the sales of the Company. |
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| DIVIDEND |
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| The
Directors recommend Dividend @ 10% for the year ended June 30. !999. At the
request of the Management, the Directors |
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| and
sponsors agreed to forego their right to dividend. |
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|
| APPROPRIATIONS |
|
| The
profit is appropriated as under:- |
|
Rupees |
|
| Net
loss after charging prior period and unusual items |
(6,995,587) |
|
| Un-appropriated
profit brought forward |
|
4,370,491 |
|
| Transfer
of General Reserve |
|
15,000,000 |
|
|
-------------------- |
|
| Un-appropriated
profit available for appropriation |
12,374,904 |
|
| Less: Proposed Dividend |
|
5,000,000 |
|
|
|
-------------------- |
|
| Profit
carried forward to Balance Sheet |
|
7,374,904 |
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|
=========== |
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|
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| AUDITORS |
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| The
present joint auditors M/s. Akhtar Naqvi & Co., Chartered Accountants and
M/s. Tahir Siddiqi & Co., Chartered Accountants |
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| retire
and being eligible offer themselves for re-appointment. |
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|
| EPS |
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| Earning
per Share, before charging the prior years and unusual items works out to Rs.
1.02. |
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| PATTERN
OF SHAREHOLDING |
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| Pattern
of shareholding is annexed to this report. |
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| MILLENNIUM
BUG YEAR 2000 |
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| Our
Software consultants have developed software, which is fully capable of
overcoming the Millennium Bug Year 2000 |
|
| Phenomena. |
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| STAFF
& ORGANISATION |
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| I
and all the Directors recognise the efforts of all the executives and
employees of the company in making possible the progress |
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| for
the period under review. We are sure that with the present team we can
continue our growing trend in the current and future |
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| years. |
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|
On behalf of the Board |
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| Lahore: December 06, 1999 |
|
UMER HAYAT SHEIKH |
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|
Chairman |
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|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
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| We
have audited the annexed balance sheet of AL-KHAIR GADOON LIMITED as at June
30, 1999 and the related |
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| profit
and loss account and statement of changes in financial position, together
with the notes forming part thereof, |
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| for
the year then ended and we state that we have obtained all the information
and explanations which to the best of |
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| our
knowledge and belief were necessary for the purposes of our audit and, after
due verification thereof, we report |
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| that: |
|
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| (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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| (b) in our opinion-- |
|
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| (i)
the balance sheet and profit and loss account together with the notes thereon
have been drawn up |
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| in
conformity with the Companies Ordinance, 1984, and are in agreement with the
books of |
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| account
and are further in accordance with accounting policies consistently applied; |
|
|
| (ii) the expenditure incurred during the year
was for the purposes of the company's business; and |
|
|
| (iii)
the business conducted, investments made and 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 |
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| sheet,
profit and loss account and the statement of changes in financial position,
together with the notes |
|
| forming
part 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 profit and the changes in financial position for the year then ended;
and |
|
|
|
| (d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
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| Tahir Siddiqi & Co. |
|
Akhtar Naqvi & Co. |
|
| Chartered Accountants |
|
Chartered Accountants |
|
|
| Lahore; December 06, 1999 |
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|
|
| BALANCE SHEET |
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| AS
AT JUNE 30, 1999 |
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|
1999 |
1998 |
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|
Note |
Rupees |
Rupees |
|
| SHARE CAPITAL |
|
| & RESERVES |
|
|
| Authorized capital |
|
| 12,000,000 ordinary shares |
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| of Rs. 10/- each |
|
120,000,000 |
120,000,000 |
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|
=========== |
=========== |
|
| Issued,
subscribed & paid up |
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| 7,000,000 ordinary shares |
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| of Rs. 10/- each |
|
70,000,000 |
70,000,000 |
|
| 3,000,000 ordinary shares |
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| of Rs. 10/ each issued as |
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| fully paid bonus shares |
|
30,000,000 |
30,000,000 |
|
|
-------------------- |
-------------------- |
|
|
100,000,000 |
100,000,000 |
|
| Share premium |
|
25,000,000 |
25,000,000 |
|
| General reserves |
|
-- |
15,000,000 |
|
| Un-Appropriated Profit |
|
7,374,904 |
4,370,491 |
|
|
|
-------------------- |
-------------------- |
|
|
132,374,904 |
144,370,491 |
|
|
| Long Term Liability |
3 |
3,000,000 |
-- |
|
|
|
|
| Deferred liability |
|
1,017,393 |
1,574,117 |
|
|
|
|
| Liabilities against assets |
|
|
| subject to finance lease |
4 |
13,571,921 |
4,665,108 |
|
|
| CURRENT LIABILITIES |
|
| Short term borrowing |
|
| - secured |
5 |
24,436,940 |
28,029,169 |
|
| Current portion of Long |
|
|
|
| Term Liability |
3 |
12,000,000 |
-- |
|
| Current portion of
liabilities |
|
|
|
| against assets subject to |
|
|
|
| finance lease |
4 |
10,598,929 |
2,417,132 |
|
| Creditors & accrued |
|
|
|
| liabilities |
6 |
22,470,031 |
33,984,013 |
|
| Dividend payable |
|
5,000,000 |
-- |
|
| Un-Claimed Dividend |
|
46,925 |
50,600 |
|
|
------------------- |
------------------- |
|
|
74,552,825 |
64,480,914 |
|
| Contingencies and |
|
| commitments |
7 |
-- |
-- |
|
|
------------------- |
------------------- |
|
|
224,517,043 |
215,090,630 |
|
|
=========== |
=========== |
|
|
| FIXED CAPITAL |
|
| EXPENDITURE |
|
|
| Operating fixed assets |
|
| (at cost less accumulated |
|
| depreciation) |
8 |
83,072,847 |
53,067,472 |
|
| Capital Work in Progress |
|
-- |
8,664,071 |
|
| Long Term Investment |
9 |
29,995,000 |
-- |
|
|
|
|
|
| LONG
TERM DEPOSITS AND |
|
|
| DEFERRED COST |
10 |
4,404,281 |
3,828,301 |
|
|
| CURRENT ASSETS |
|
|
| Stocks |
11 |
44,026,693 |
81,614,959 |
|
|
|
|
| Sundry debtors |
12 |
18,178,335 |
29,365,438 |
|
|
| Advances, prepayments |
|
| and receivables |
13 |
35,147,046 |
34,978,918 |
|
|
|
|
| Cash & bank balances |
14 |
9,692,841 |
3,571,471 |
|
|
-------------------- |
-------------------- |
|
|
107,044.92 |
149,530,786 |
|
|
-------------------- |
-------------------- |
|
|
224,517,043 |
215,090,630 |
|
|
=========== |
=========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
| Auditors'
report to the members is annexed. |
|
|
|
UMER HAYAT SHEIKH |
MOHAMMED SAEED SHEIKH |
|
| Lahore · December 06, 1999 |
Chairman |
|
Chief Executive |
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
|
| Sales |
|
100,617,507 |
133,967,386 |
|
| Cost of sales |
|
15 |
80,478,735 |
113,653,934 |
|
|
-------------------- |
-------------------- |
|
| Gross profit |
|
20,138,772 |
20,113,452 |
|
|
| Operating Expenses |
|
| Administration |
|
16 |
6,779,559 |
7,844,496 |
|
| Selling and distribution |
|
17 |
5,488,759 |
4,982,475 |
|
| Financial |
|
18 |
8,282,270 |
4,843,271 |
|
| Amortization
of deferred cost |
9 |
1,374,420 |
1,374,426 |
|
|
-------------------- |
-------------------- |
|
|
21,925,008 |
19,044,668 |
|
|
-------------------- |
-------------------- |
|
| Operating (Loss)/Profit |
|
(1,786,236) |
1,068,784 |
|
| Other Income |
|
11,954,971 |
42,056 |
|
|
-------------------- |
-------------------- |
|
|
10,168,735 |
1,110,840 |
|
| Prior
Period and unusual items |
19 |
17,164,322 |
881,515 |
|
|
-------------------- |
-------------------- |
|
|
(6,995,587) |
1,992,355 |
|
| Provision for minimum tax |
|
-- |
669,837 |
|
|
-------------------- |
-------------------- |
|
| (Loss)/Profit after tax |
|
(6,995,§87) |
1,322,518 |
|
| Un-appropriated
profit brought forward |
|
4,370,491 |
3,047,973 |
|
|
-------------------- |
-------------------- |
|
| Un-appropriated
profit available for appropriation |
(2,625,096) |
4,370,491 |
|
|
| Appropriations |
|
| Transfer
from General Reserve |
|
15,000,000 |
-- |
|
| Final Dividend |
|
(5,000,000) |
-- |
|
|
-------------------- |
-------------------- |
|
|
10,000,000 |
-- |
|
|
-------------------- |
-------------------- |
|
| Un-appropriated
profit carried forward |
|
| to balance sheet |
|
7,374,904 |
4,370,491 |
|
|
=========== |
=========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
UMER HAYAT SHEIKH |
MOHAMMED SAEED SHEIKH |
|
| Lahore · December 06, 1999 |
|
Chairman |
|
Chief Executive |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Funds generated from operations |
|
| (Loss)/Profit for the year |
|
(6,995,587) |
1,322,518 |
|
|
| Adjustment
for items not involving |
|
| movement of funds |
|
| Depreciation |
|
8,891,656 |
7,128,144 |
|
| Provision for bad debts |
|
(907,062) |
71,635 |
|
| Deferred Liability |
|
(556,724) |
559,931 |
|
| Gain
on Sale of Fixed Assets |
|
(5,628,343) |
(42,0,56) |
|
| Prior period adjustment |
|
- |
(119,305) |
|
| Amortisation
of deferred costs |
|
1,374,420 |
1,374,426 |
|
|
------------------- |
------------------- |
|
|
(3,821,640) |
10,295,293 |
|
| (Increased)/decreased
in Current Assets |
|
| Advances,
prepayments & receivables |
|
(168,128) |
(18,999,262) |
|
| Stocks |
|
375,882,661 |
14,341,803 |
|
| Trade Debts |
|
120,941,651 |
(955,134) |
|
|
------------------- |
------------------- |
|
|
49,514,303 |
(5,612,593) |
|
| Increase/(decrease)
in Current Liabilities |
|
| Short term borrowings |
|
(3,592,229)' |
9,207,411 |
|
| Creditors,
accrued & other liabilities |
|
(11,513,982) |
1,584,196 |
|
| Provisions for minimum tax |
|
-- |
(494,261) |
|
| Un-Claimed Dividend |
|
(3,675) |
(1,625,680) |
|
|
------------------- |
------------------- |
|
|
(15,109,886) |
8,671,666 |
|
|
------------------- |
------------------- |
|
| NET
CASH FLOW FROM OPERATING ACTIVITIES |
|
| CARRIED FORWARD |
|
30,582,777 |
13,354,366 |
|
|
|
| NET
CASH FLOW FROM OPERATING ACTIVITIES |
|
| BROUGHT FORWARD |
|
30,582,777 |
13,354,366 |
|
|
| CASH
FLOW FROM INVESTMENT ACTIVITIES |
|
| Purchase of fixed assets |
|
(43,000,088) |
(1,5,482,974) |
|
| Capital Work in Progress |
|
8,664,071 |
(8,664,071) |
|
| Long term investment |
|
(29,995,00) |
-- |
|
| Sale of Fixed Assets |
|
10,000,000 |
125,000 |
|
|
------------------- |
------------------- |
|
| NET
CASH FROM INVESTING ACTIVITIES |
|
(54,331,017) |
(24,022,045) |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Proceeds
from obligation under finance lease |
|
21,740,000 |
3,800,000 |
|
| Payment
of obligations under finance lease |
|
(4,651,390) |
(1,776,444) |
|
| Loan
term deposits to leasing companies |
|
(2,219,000) |
(380,000) |
|
| Demand finance |
|
20,000,000 |
-- |
|
| Repayment
of demand finance |
|
(5,000,000) |
-- |
|
|
------------------- |
------------------- |
|
| NET
CASH FROM FINANCING ACTIVITIES |
|
29,869,610 |
1,643,556 |
|
|
| NET
INCREASE/(DECREASE) IN |
|
| CASH
AND CASH EQUIVALENT |
|
6,121,370 |
(9,024,123) |
|
|
| CASH
& CASH EQUIVALENT AT THE |
|
| BEGINNING
OF THE YEAR |
|
3,571,471 |
12,595,594 |
|
|
------------------- |
------------------- |
|
| CASH
& CASH EQUIVALENT AT THE |
|
| END OF THE YEAR |
|
9,692,841 |
3,571,471 |
|
|
========== |
========== |
|
|
|
UMER HAYAT SHEIKH |
MOHAMMED SAEED SHEIKH |
|
| Lahore: December 06, 1999 |
|
Chairman |
|
Chief Executive |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
| The
Company and its Operations |
|
|
| The
company was incorporated as a Private Limited Company on August 27, 1990. The
company was converted into |
|
| a
Public Limited Company on August 31, 1995 and it is enlisted on Karachi,
Lahore and Islamabad Stock |
|
| Exchanges.
It is principally engaged in manufacture of foam products. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1 Accounting Convention |
|
| These accounts have been prepared under the
historical cost convention. |
|
|
| 2.2 Fixed |
|
|
| Owned |
|
| Fixed
assets are stated at cost less depreciation except the land, which is stated
at cost, |
|
| Depreciation
is charged on reducing balance method at the rates stated in note 8. |
|
|
| Full
year's depreciation is charged on the addition made during the year while |
|
| depreciation
is charged on deletions during the year. |
|
|
| Leased |
|
| Leased
assets held under finance lease are stated at cost less accumulated
depreciation. |
|
| These
assets will be depreciated over the lease period using straight line method. |
|
|
| The
outstanding obligations under the lease less finance charges allocated to
future |
|
| periods
are shown as liability in note 3. The financial charges are calculated at the |
|
| markup
rate implicit in the lease and are charged to profit and loss account. |
|
|
| 2.3 Stores & Spares |
|
| These are stated at cost. |
|
|
| 2.4 Stocks |
|
| Raw material |
- |
at average cost |
|
| Work in progress |
- |
at average cost |
|
| Finished goods |
- |
at lowest of cost or net
realisable value |
|
|
| 2.5
Staff retirement benefit |
|
| The
company is maintaining a non funded gratuity scheme for its employees. The
provision made for |
|
| gratuity
is shown as deferred liability. |
|
|
| 2.6 Deferred cost |
|
| Deferred
cost consists of expenses incurred in connection with the issue of shares of
the company including |
|
| brokerage
and commission etc, These are being amortized over a period of 5 years. |
|
|
| 2.7 Taxation |
|
| The
Company is enjoying a tax holiday under clause (122C) of the Second Schedule
to the Income Tax |
|
| Ordinance.
1979 for a period of ten years. The Company had been providing for minimum
tax u/s 80D of the |
|
| Income
Tax Ordinance, 1979. The Peshawar High Court, Peshawar has accepted Company's
plea of being |
|
| exempted
from levy of Income Tax. Hence the tax provisions U/s 80B for previous year
have been |
|
| reversed. |
|
|
| 2.8 Revenue recognition |
|
| Revenue
from sales is recognised on despatch of goods to the customer. |
|
|
| 3. LONG TERM |
|
|
| Demand Finance |
|
Rupees |
Rupees |
|
|
|
|
|
| Allied
Bank of Pakistan Ltd. |
|
15,000,000 |
-- |
|
| Less: Current Liability |
|
12,000,000 |
-- |
|
|
-------------------- |
-------------------- |
|
|
3,000,000 |
-- |
|
|
=========== |
=========== |
|
|
| It
represents the Demand Finance facility of Rs. 20,000 million obtained from
M/s Allied Bank of Pakistan |
|
| Limited.
It carries markup @ 17%. It is repayable in a monthly installment of Rs,
1.000 million each. It is |
|
| secured
against equitable mortgage of two residential properties and the personal
guarantees of the |
|
| Directors, |
|
|
| 4.
LIABILITIES AGAINST ASSETS SUBJECT TO |
|
| FINANCE LEASE |
|
|
Residual |
1999 |
1998 |
|
|
Value |
Rupees |
Rupees |
|
|
| Orix
Leasing Pakistan Limited |
1,029,848 |
6,145,049 |
6,771,010 |
|
| First
Leasing Corporation Ltd, |
1,000,000 |
8,988,702 |
311,230 |
|
| Pak Apex Leasing Co. Ltd. |
|
1,000,000 |
9,037,099 |
-- |
|
|
-------------------- |
-------------------- |
-------------------- |
|
|
