| INDUS FRUIT PRODUCTS LIMITED |
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|
|
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|
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|
| Annual
Reports 2002 |
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| |
| COMPANY'S
PROFILE |
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| |
|
| BOARD
OF DIRECTORS |
Mr. Masud Iqbal |
|
| |
Mr. Muhammad Naeem Tahir |
|
| |
Mr. Imtiaz Majeed |
|
| |
Mrs. Ayesha Abbas |
|
| |
Mr. Raja Muhammad Rafiq |
|
| |
Mr. Ahmed Masud |
|
| |
Mrs. Zainab Abbas |
|
| |
Mr. Saleem Hayder Zaidi |
|
| |
| AUDIT
COMMITTEE |
Mr. Masud Iqbal |
|
| |
Mr. Imtiaz Majeed |
|
| |
Mr. Muhammad Naeem Tahir |
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| |
| REGISTERED
OFFICE/ |
65 K.M. Main Multan Road, |
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| HEAD OFFICE |
|
Jamber Kalan, Tehsil
Chunian, |
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| |
|
Distric Kasur |
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| |
Ph: 04951-388017 |
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| |
| FACTORY |
|
65 K.M. Main Multan Road, |
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| |
Jamber Kalan, Tehsil
Chunian, |
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| |
Distric Kasur |
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| |
Ph: 04951-388017 |
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| |
| AUDITORS |
|
M/s. Sidat Hyder Qamar
& Co., |
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| |
Chartered Accountants |
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| |
39 Link Farid Kot Road, |
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| |
Lahore - 54000. |
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| |
| REGISTRAR AND |
|
Hameed Majeed Associates
(Pvt.) Ltd. |
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| SHARE
TRANSFER OFFICE |
HM House, 7-Bank Square, |
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| |
Shahrah-e-Quaid-e-Azam, |
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| |
Lahore. |
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| |
| BANKERS |
|
United Bank Limited |
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| |
Habib Bank Limited |
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| |
Agricultural Development
Bank of Pakistan. |
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| |
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| NOTICE
OF MEETING |
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| |
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| Notice
is hereby given that the Annual General Meeting of the Members will be held
at registered |
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| office
of the company situated at 65-K.M. Multan Road, Jambar Kalan, Distt Kasur on
Wednesday the |
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| 30th
October 2002, at 10.00 A.M. to transact the following business: |
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| |
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| 1.
To confirm the minutes of the last Annual General Meeting held on 28th
December 2001. |
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| |
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| 2.
To receive , consider and adopt the audited accounts of the Company for the
year ended June |
|
| 30,
2002, together with the Directors, Report and Auditors' Report thereon. |
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| |
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| 3.
To appoint auditors and fix their remuneration for the year ending June 30,
2003. The present |
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| auditors
M/s Ford Rhodes Sidat Hyder & Co. Chartered Accountants, Lahore, retired
and being |
|
| eligible
offer themselves for reappointment. |
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| |
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| 4.
To transact any other lawful business with the permission of the Chair. |
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| |
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| BY
ORDER OF THE BOARD |
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| |
|
| LAHORE |
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| September 30, 2002 |
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| |
|
| (AHMED MASUD) |
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| |
|
| CHIEF EXECUTIVE |
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| |
|
| Note: |
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| |
|
| 1.
The share transfer books of the Company will remain closed from October 21,
2002 to October |
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| 30,
2002 (both days inclusive). |
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| |
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| 2.
A member entitled to attend and vote at the meeting is entitled to appoint
another member as his |
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| proxy
to attend and vote instead of him. |
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| |
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| 3.
Shareholders are requested to promptly notify the Company of any change in
their address. |
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| |
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| Directors7
Report to The Shareholders |
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| |
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| The
directors are pleased to present the financial accounts of the company
together with auditors' |
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| report
thereon for the year ended June 30, 2002. |
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| |
|
| Review
of Financial Results |
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| |
|
| The
year under review was very difficult because Nestle Milk Pak Ltd who has
taken entire production |
|
| facility
on lease, discontinued it in August 2001. Since takeover of the facilities
the company has been |
|
| engaged
in processing of fruits on behalf of third parties and suffered a loss of Rs.
1,071,309 against |
|
| lease/service
income of Rs. 12,613,648 of previous year. Administrative expenses were
efficiently |
|
| controlled
and decreased by Rs.2,262,121 or 12.28% to Rs.16,229,446 as against
Rs.18,418,747 for |
|
| the
year 2001. Depreciation charged on fixed assets decreased by Rs.1,753,546 to
Rs.15,277,235 |
|
| (2001:
Rs.16,980,781). Salaries and benefits decreased 49.3% over the previous year. |
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| |
|
| The
operating results of your company for the year ended June 30, 2002 are
summarized below: |
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| |
|
| |
(Rupees) |
|
| |
2002 |
2001 |
|
| |
|
|
| Loss before Taxation |
|
(17,300,930) |
(5,805,674) |
|
| Taxation |
|
(107,969) |
(63,068) |
|
| Loss After Taxation |
|
(17,408,899) |
(5,868,742) |
|
| Accumulated
loss brought forward |
|
(194,119,995) |
(188,251,253) |
|
| Accumulated
loss carried forward |
|
(211,528,894) |
(194,119,995) |
|
| Earning per share |
|
(1.93) |
(0.65) |
|
| |
|
| ADBP
Loan Rescheduling/Restructuring |
|
| |
|
| The
management of the company has submitted proposals for loan
rescheduling/restructuring to |
|
| ADBP
wherein they have requested the ADBP for complete waiver and relief in
respect of outstanding |
|
| interest
and the liability be fixed at the principal amount. This is in line with the
Pakistan Government |
|
| policy
for rehabilitation of sick industrial units. The Directors are confident that
ADBP would consider |
|
| this
proposal. During the year company signed a Memorandum of Understanding with
M/s SST |
|
| Enterprises
for change of management. Upon approval by ADBP the transfer of management
shall |
|
| take
place. The new management is financially sound and with induction of working
capital by new |
|
| management
the financial health of the company shall improve. |
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| |
|
| Auditor's
Observation |
|
| |
|
| The
observations stated by the auditors in their opinion are the same as those of
last year and there |
|
| has
been no material change during the year. Presently, the company's,
application for |
|
| restructuring/rescheduling
of loan is under consideration by the Project Revival Committee of State |
|
| Bank
of Pakistan. We strongly believe the matter shall be resolved amicably and
the project shall be |
|
| revived
after providing relief in mark up as requested. However, the clarifications
as to the Auditors' |
|
| observations
are as follows: |
|
| |
|
| a)
Mark up on long term loans, short term borrowings and insurance premium for
the year |
|
| amounting
to Rs. 34.308 million, Rs. 1.797 million and Rs. 0.558 million respectively
and |
|
| accumulating
to Rs. 142.383, Rs. 8.849 million and Rs. 1.658 million respectively have not
been |
|
| accounted
for as the negotiations with ADBP are in process for waiver of mark up, in
response to |
|
| loan
restructuring application pending with ADBP. Keeping this in view the mark up
has been |
|
| deferred
till the decision of the pending application with ADBP for the restructuring
is made. The |
|
| management
is confident that the waiver of mark-up shall be approved to rehabilitate the
unit. |
|
| This
is in line with the Government policy to revive sick units. |
|
| |
|
| b)
The Creditors amounting to Rs.1.327 remained unconfirmed due to
non-operational activities and |
|
| are
outstanding since long. |
|
| |
|
| c)
The spares and fork lifter are under custody of Custom Authorities. The
Company has to pay Rs. |
|
| 0.621
million as custom duty, sales tax and other dues to get them cleared and at
present, the |
|
| company
is not in the position to pay these dues nor has any access to these items
for Auditor's |
|
| verifications. |
|
| |
|
| d)
As explained above the negotiations for the restructuring/rescheduling and
waiver of the interest |
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| with
ADBP are in process and if these matters are resolved positively and waiver
is given, the |
|
| current
liabilities shall be reduced automatically. During the year lease
arrangements with |
|
| Nestle
Milk Pak Ltd was terminated. However, the management of the company has
entered into |
|
| Memorandum
of Understanding (MOD) with M/s SST Enterprises whereby the existing |
|
| management
will transfer the management of the company including the physical and
effective |
|
| control
of the entire assets of the company to the new management upon approval by
ADBP. This |
|
| MOD
requires consent of major creditor which is ADBP and negotiations with it are
in process. |
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| The
production facilities are being tested by prospective buyer on trial from
April 01, 2002. The |
|
| Directors
believe that with the change in management the working capital fund
requirement for |
|
| profitable
operations will be forthcoming and hence there are no doubts about the
company to |
|
| continue
as a going concern. |
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| |
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| Future Prospects |
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| |
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| The
directors are quite hopeful that waiver of interest and change of management
would prove very |
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| beneficial
for the shareholders and company would be able to earn profits in the future. |
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| |
|
| Auditors |
|
| |
|
| The
present auditors, Messrs Ford, Rhodes, Sidat Hyder & Company Chartered
Accountants are due |
|
| to
retire and being eligible offer themselves for reappointment and the Audit
Committee has also |
|
| recommended
the appointment of Messrs Ford, Rhodes, Sidat Hyder & Company
Chartered |
|
| Accountants,
as auditors for the year 2002-2003. |
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| |
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| Corporate
Governance |
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| |
|
| The
Directors are pleased to report that your company has taken necessary steps
to comply with the |
|
| provisions
of the Code of Corporate Governance as incorporated in the listing regulation
of stock |
|
| exchange. |
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| |
|
| Statement
of Directors' Responsibilities |
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| |
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| The
Board is committed to maintain the high standards of good corporate
governance. We give below |
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| statements
on Corporate and Financial Reporting Frame Work. |
|
| |
|
| >
Presentation Of Financial Statements |
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| |
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| The
financial statements, prepared by the management of the company, fairly
present its state of |
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| affairs,
the results of its operations, cash flows and changes in equity. |
|
| |
|
| >
Proper Books Of Account |
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| |
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| The
company has maintained proper books of account. |
|
| |
|
| >
Accounting Policies |
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| |
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| Appropriate
accounting policies have been consistently applied in preparation of
financial |
|
| statements
and accounting estimates are based on reasonable and prudent judgment. |
|
| |
|
| >
Application Of International Accounting Standards |
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| |
|
| International
Accounting Standards, as applicable in Pakistan, have been followed in
preparation |
|
| of
financial statements. |
|
| |
|
| >
Internal Control System |
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| |
|
| The
system of internal control, which was in place, is being followed. |
|
| > Going Concern |
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| |
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| There
is no doubt about the company's ability to continue as a going concern. The
detailed |
|
| explanations
have been provided in above paragraphs. |
|
| |
|
| >
Best Practices of Corporate Governance |
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| |
|
| There
has been no material departure from the best practices of corporate
governance, as |
|
| detailed
in listing regulations. |
|
| |
|
| > Audit Committee |
|
| |
|
| The
Board has constituted the Audit Committee, in compliance with the Code of
Corporate |
|
| Governance
and the following directors are its members: |
|
| |
|
| Mr.
Masud Iqbal (Chairman) |
|
| |
|
| Mr.
Imtiaz Majeed (Non Executive Director) |
|
| |
|
| Mr.
Naeem Tahir (Non Executive Director) |
|
| |
|
| >
Operating And Financial Data |
|
| |
|
| Operating
and financial data and key ratios of last six years are annexed. |
|
| |
|
| > Dividend |
|
| |
|
| Since
the company suffered loss during the year and also has accumulated losses of
previous |
|
| years
therefore directors are unable to declare any dividend. |
|
| |
|
| >
Outstanding Duties, Taxes and other Statutory Payments |
|
| |
|
| Please refer
note 7 of the annexed audited accounts. |
|
| |
| > Gratuity Scheme |
|
| |
|
| The
company operates an un-funded gratuity scheme for its employees and provision
has been |
|
| made
in the accounts accordingly. |
|
| |
|
| >
Dealing in Company Shares |
|
| |
|
| No
trades in the shares of the Company were carried out by the Directors, CEO,
CFO, Company |
|
| Secretary,
their spouses and minor children. |
|
| |
|
| >
Meetings Of The Board Of Directors |
|
| |
|
| During
the year five (5) Board meetings were held. All the directors, except
following, attended |
|
| the
Board meetings. Mr. Naeem Tahir attended 4 meetings and Mrs Ayesha Abbas
attended 3 |
|
| meetings
whereas Mr. Saleem Hyder Zaidi and Mr. Raja Muhammad Rafique did not attend
any |
|
| meeting. |
|
| |
|
| Leave
of absence was granted to Directors who could not attend some of the Board
meetings. |
|
| |
|
| >
Statement of Code of Ethics and Business Practices |
|
| |
|
| Statement
of Code of Ethics and Business Practices has been developed and are now
being |
|
| communicated
and acknowledged by each Director and employee of the company. |
|
| |
|
| >
Pattern of Shareholding |
|
| |
|
| The
statement of shareholding as at June 30, 2002 is annexed to this report. |
|
| |
|
| >
Statement of Compliance with Best Practices of Corporate Governance |
|
| |
|
| The
company is in process of implementing all facets of the Code of Corporate
Governance issued |
|
| by
the Karachi Stock Exchange and Lahore Stock Exchange and the Board feel
pleasure in stating |
|
| that
provisions of the Code, relevant for the year ended June 30, 2002 have been
duly complied |
|
| with. |
|
| |
|
| BY
ORDER OF THE BOARD |
|
| |
|
| (AHMED MASUD) |
|
| |
|
| CHIEF EXECUTIVE |
|
| |
|
| LAHORE |
|
| September 30, 2002 |
|
| |
|
| Statement
of Compliance with Best Practices of Corporate Governance |
|
| |
|
| The
company is in process of implementing all facets of the Code of Corporate
Governance issued by |
|
| the
Karachi, Islamabad and Lahore Stock Exchanges. The Board feel pleasure in
stating that |
|
| provisions
of the code, relevant for the period from May 02, 2002 to June 30, 2002, have
been duly |
|
| complied with. |
|
| |
|
| Lahore
: September 30, 2002 |
|
| |
|
| 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 Indus Fruit Products Limited
to comply |
|
| with
the Listing Regulation No. 37 of the Karachi Stock Exchange, Chapter XIII of
the Lahore Stock |
|
| Exchange
and Chapter XI of the Islamabad Stock Exchange 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
effective for the |
|
| period
from May 02, 2002 to June 30, 2002. |
|
| |
|
| Lahore: |
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| |
|
| September 30, 2002 |
|
| |
|
| Chartered
Accountants |
|
| |
|
| FINANCIAL
HIGHLIGHTS |
(Rupees in Millions) |
|
| |
2002 |
2001 |
2000 |
1999 |
1998 |
1997 |
1996 |
|
| |
| Net Sales |
|
- |
- |
- |
|
4,837 |
8,321 |
9,110 |
|
| Lease
/ Service income |
100 |
12,614 |
11,895 |
10,950 |
5,250 |
- |
- |
|
| Gross Profit (Loss) |
|
- |
• |
- |
- |
(3,933) |
(9,318) |
(10,007) |
|
| Operating
Profit / (Loss) |
(17,254) |
(5,805) |
(8,577) |
(12,086) |
(11,257) |
(12,027) |
(14,108) |
|
| Profit
(Loss) Before Tax |
(17,254) |
(5,806) |
(8,226) |
(11,849) |
(11,014) |
(39,935) |
(33,641) |
|
| Profit
(Loss) After Tax |
(17,363) |
(5,869) |
(8,297) |
(12,594) |
(11,068) |
(40,272) |
(33,670) |
|
| Share Capital |
|
90,000 |
90,000 |
90,000 |
90,000 |
90,000 |
90,000 |
90,000 |
|
| Share
Holders' Equity |
(121,483) |
(104,120) |
(98,251) |
(89,954) |
(77,360) |
(66,292) |
(22,878) |
|
| Fixed Assets - Net |
|
139,492 |
154,769 |
171,750 |
190,625 |
211,669 |
227,181 |
237,229 |
|
| Total Assets |
|
143,867 |
159,529 |
177,043 |
196,411 |
218,502 |
235,427 |
255,010 |
|
| Long Term Liabilities |
|
54,454 |
54,454 |
54,454 |
65,888 |
76,283 |
86,364 |
190,822 |
|
| |
|
|
| Profitability Ratios |
|
| Gross Profit |
|
- |
- |
- |
. |
-81.31% |
-111.98% |
-109.85% |
|
| Profit Before Tax |
|
-17254.00% |
-46.03% |
-69.16% |
-108.21% |
-227.70% |
-479.93% |
-369.28% |
|
| Profit After Tax |
|
-17363.00% |
-6.53% |
-69.75% |
-115.01% |
-228.82% |
-483.98% |
-369.59% |
|
| Return
to Shareholders |
|
| ROE - Before tax |
|
-14.20% |
-5.58% |
-8.37% |
-13.17% |
-14.24% |
-60.24% |
-147.05% |
|
| ROE - After tax |
|
-14.29% |
-5.64% |
-8.44% |
-14.00% |
-14.31% |
-60.75% |
-147.17% |
|
| Return
of Capital Employed |
-25.90% |
-11.82% |
-18.94% |
-52.33% |
-1027.67% |
-200.64% |
-20.05% |
|
| E.P.S. after tax (Rs.) |
|
-1.93 |
-0.65 |
-0.92 |
-1.4 |
-1.23 |
-4.47 |
-3.74 |
|
| Price Earning Ratio |
|
-0.67 |
-2.46 |
-2.17 |
-1.32 |
-1.75 |
|
| Market
Price (June 30) |
1.3 |
1.6 |
2 |
1.85 |
2.15 |
|
| |
| Liauiditv / Leveraoe |
|
| Current Ratio |
|
0.01 |
0.02 |
0.02 |
0.02 |
0.03 |
0.04 |
1.18 |
|
| Break
up value per-share (Rs |
(13.50) |
(11.57) |
(10.92) |
(9.99) |
(8.60) |
(7.37) |
(2.54) |
|
| Long term debts to |
|
|
|
| to Equity (Times) |
|
(0.45) |
(0.52) |
(0.55) |
(0.73) |
(0.99) |
(1.30) |
(8.34) |
|
| Total liabilities |
|
|
|
| to Equity (Times) |
|
(1.57) |
(1.82) |
(2.05) |
(2.36) |
(2.87) |
(3.43) |
(8.90) |
|
| |
|
| CATEGORIES OF SHAREHOLDERS |
|
| As On 30-06-2002 |
|
| |
|
| |
Shareholder's |
|
Number of |
Number of |
|
|
| Sr. |
|
Shares |
|
|
| # |
Category |
|
Shareholders |
Held |
Percentage |
|
| 1 |
Directors/Chief Executive
Officer and their |
|
| |
spouse and minor children |
|
45 |
1,723,654 |
19.15 |
|
| 2 |
Executives; |
|
|
|
| 3 |
Associated Companies,
Undertakings and |
|
|
|
| |
related parties |
|
|
|
| 4 |
Public Sectors Companies
& Corporations |
|
4 |
2,212,500 |
24.58 |
|
| 5 |
NIT and ICP |
|
|
|
| |
NIT |
|
|
|
| |
ICP |
|
- |
- |
0 |
|
| 6 |
Banks Development
Financial Institutio |
