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DIAMOND INDUSTRIES LTD. |
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|
ANNUAL REPORT FOR THE YEAR ENDED 30TH JUNE 1996 |
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|
|
| Contents |
|
Page # |
|
|
|
| Company
Information |
|
3 |
|
|
|
| Notice
of Meeting |
|
4 |
|
|
|
| Directors'
Report |
|
6 |
|
|
|
| Auditors'
Report |
|
7 |
|
|
| Balance
Sheet |
|
8 |
|
|
|
| Profit
& Loss Accounts |
|
10 |
|
|
|
| Cash
Flow Statement |
|
11 |
|
|
| Notes
to the Accounts |
|
12 |
|
|
|
| Form '34' |
|
17 |
|
|
|
| COMPANY
INFORMATION |
|
|
|
| BOARD
OF DIRECTORS: |
|
| S.
M. SHAFFI |
|
| Chairman |
|
|
|
| MR.
IFTIKHAR A. SHAFFI |
|
| Chief
Executive |
|
|
|
| MR.
WAQAR A. SHAFFI |
|
| MR.
MUHAMMAD SAEED |
|
| MR.
SHARIQ IFTIKHAR |
|
| MR.
M. H. PER VEZ |
|
| SYED
M. NAWAZ |
|
|
|
| SECRETARY: |
|
| CH.
MUHAMMAD TUFAIL |
|
|
| AUDITORS: |
|
| Saleem
Ahsan & Co, |
|
| Chartered
Accountants |
|
|
| LEGAL
ADVISORS: |
|
| AMANULAH
CHAUDHRY & ASSOCIATES |
|
|
|
| BANKERS: |
|
| - ALLIED BANK OF PAKISTAN LTD. |
|
| - BOLAN BANK LTD. |
|
| -
EMIRATES BANK INTERNATIONAL LTD. |
|
| -
HABIB BANK LTD. |
|
| -
MUSLIM COMMERCIAL BANK LTD. |
|
| -
NATIONAL BANK OF PAKISTAN. |
|
|
| REGISTERED
OFFICE: |
|
| PLOT
NO. 25, GADOON AMAZAI INDUSTRIAL ESTATE, |
|
| SWABI
(N. W. FF) |
|
| PH:
05372-70297, PAKTEL: 0342-385142 |
|
|
|
| WORKS: |
|
| PLOT
NO. 25, GADOON AMAZAI INDUSTRIAL ESTATE, |
|
| SWABI
(N. W. FP.) |
|
| PH:
05372-70297, PAKTEL: 0342-385142 |
|
|
|
| SHARES
DEPARTMENT: |
|
| MALIK
BAGH, BARADARI ROAD, SHAHDARA, LAHORE. |
|
| PH:
111-111-666, 7932001-8, |
|
| FAX:
7925299, TLX: 44590 DRM PK. |
|
|
|
| NOTICE
OF MEETING |
|
| NOTICE
is hereby given that the 7th Annual General Meeting of Diamond Industries
Limited will be held |
|
| at
Company's office at Malik Bagh, Baradari Road, Shahdara, Lahore, on Nov. 24,
1996 at 3.00 P.M. to |
|
| transact
the following business:- |
|
|
| 1.
To confirm the minutes of the last General Meeting. |
|
|
| 2.
To receive, consider and adopt the Annual Audited Accounts of the Company
together with the |
|
| Auditors'
and Directors' reports for the period ended June 30, 1996. |
|
|
| 3.
To appoint Auditors and fix their remuneration. |
|
|
| SPECIAL
BUSINESS |
|
| 4.
To consider & approve the remuneration of the full time working
Director(s) of the Company and |
|
| to
pass with or without amendment the following resolution as Special
Resolution: |
|
|
| "It
is hereby resolved that the consent of the Company be and is hereby accorded
to approve |
|
| the
remuneration of Mr. Muhammad Saeed and Mr. M.H. Pervez. Executive Directors
in the |
|
| amount
of Rs. 12,400 each monthly from the period commencing July 01, 1996 and
provision |
|
| to
them of housing, transport, medical leave facilities and other benefits
incidental or relating |
|
| to
their offices in accordance with the rules and policy of the Company". |
|
|
| Further
Resolved "that the Board of Directors of the company be and is hereby
authorised to |
|
| revise
the above stated remuneration/terms as, when and how it deems
appropriate". |
|
|
| 5.
To approve investment of upto Rs. 50.000,000 in the Diamond Polymers (Pvt.)
Limited by way of |
|
| equity
and/or loans/advances as the discretion of the Board of Directors subject
however to the |
|
| provisions
of section 208 of the Companies Ordinance 1984 as amended; And to pass with
or |
|
| without
amendment, the following resolution as Special Resolution: |
|
|
| Resolved
"that consent and approval of the Company be and is hereby accorded to
invest in |
|
| the
share capital/loan upto Rs. 50 (million) of Diamond Polymers (Pvt.) Limited
from time to time |
|
| as
may deem expedient on terms and conditions not unfavorable as compared to
such |
|
| investments,
loans, advances etc. obtained from Commercial Banks. It is further resolved
that |
|
| the
Chief Executive of the Company be and is hereby authorised to negotiate, and
to take any |
|
| and
all actions as may be deemed necessary to invest/disinvest of the
aforementioned share |
|
| capital/loan
upto Rs. 50 (million) er any part thereof of Diamond Polymers (Pvt.) Limited
from |
|
| time
to time as may deem expedient for said consideration, and/or on such terms
and conditions |
|
| as
he may think fit on behalf of the Company. He is further authorised for such
investment in |
|
| Diamond
Polymers (Pvt.) Limited in the amount which is within the limit prescribed in
as well as |
|
| the
meaning and terms of Section 208 of the Companies Ordinance 1984". |
|
|
| 6.
To transact any other business of the Company with the permission of the
chair. |
|
|
| By
Order of the Board |
|
|
|
|
| CH.
MUHAMMAD TUFAIL |
|
|
|
| Company Secretary |
|
|
| Lahore |
|
| Oct.
31, 1996. |
|
|
|
| NOTES: |
|
| 1.
The share transfer books of the Company will be closed from 21st November to
27th November |
|
| I996
(both days inclusive). |
|
|
| 2.
A member entitled to attend and vote at this Meeting may appoint another
member as his/her |
|
| proxy
to attend and vote on his/her behalf. The instrument appointing a proxy must
be received |
|
| by
the company not later than 48 hours before the Meeting. |
|
|
| 3.
Members are requested to notify any change in address immediately. |
|
|
| 4.
Kindly quote folio number in all correspondence with the Company. |
|
|
| STATEMENT
OF FACTS UNDER SECTION 160 (1) (b) |
|
| FOR
AGENDA ITEM 4 |
|
|
| Mr.
Muhammad Saeed and Mr. M. H. Pervez, Executive Directors of the Company are
working full time. It |
|
| justifies
to fix and pay them the remuneration's; and give usual facilities to
compensate for the services |
|
| being
rendered by them. The terms and conditions in the relevant draft resolution
are quite fair. |
|
|
| Besides
the above, Mr. Muhammad Saeed and Mr. M. H. Pervez do not have any other
interest in the |
|
| company
except the entitlement if any, in promotion to their investment in the
company as ordinary |
|
| shareholders. |
|
|
| STATEMENT
OF FACTS UNDER SECTION 160 (1) (b) |
|
| FOR
AGENDA ITEM 5 |
|
|
| Diamond
Polymers (Pvt.) Limited has been formed by Mr. Iftikhar A. Shaffi, Mr. Waqar
A. Shaffi and Mr. |
|
| Muhammad
Saeed as promoter Directors who are the common Directors of both the
Companies (DIAMOND |
|
| INDUSTRIES
LIMITED & DIAMOND POLYMERS (PVT) LIMITED). The authorised capital of
Diamond |
|
| Polymers
(Pvt.) Limited is Rs. 10,000,000 and its majority shares will be offered to
Diamond Industries |
|
| Limited. |
|
|
| Diamond
Polymers (Pvt.) Limited has been incorporated in Mirpur (AJK) to setup an
industrial undertaking |
|
| for
the martufacturing of Foam and Foam Products, Plastic goods of all kinds and
Furniture and Fixture |
|
| both
for industrial and commercial purposes. |
|
|
| In
view of various incentives offered by the Government of Azad Jammu &
Kashmir, the manufacturing |
|
| cost
of products of the Company would be low and would compete fairly with the
products brought from |
|
| outside.
The local as well as surrounding areas demand with increased sales will
result into higher |
|
| profitability
of the Company. The investment return is therefore, expected to be fairly
satisfactory. |
|
|
| The
interest of the Directors in this Special Resolution is that of the other
shareholders of the Company. |
|
|
|
| DIRECTORS'
REPORT TO THE |
|
| SHAREHOLDRES |
|
| The
Directors of the Company are pleased to place before you the Annual Report
together with the |
|
| Financial
Statement and Auditor's Report thereon for the year ended June 30, 1996. |
|
|
| FINANCIAL
RESULTS |
|
| By
the Grace of Allah, the financial results of the Company for the Year under
review have been most |
|
| encouraging
and show a healthy increase in Profit not only over the corresponding period
but have |
|
| registered
the highest profit in the history of the Company. The financial results of
the Company are: |
|
|
|
|
|
|
Rupees |
|
|
|
|
|
|
| Profit
for the year before Tax |
|
|
83,016,827 |
|
| Provision
for Taxation |
|
|
4,463,300 |
|
|
|
|
|
---------- |
|
|
|
|
|
78,553,527 |
|
| Accumulated
Profit brought forward |
|
|
72,435,353 |
|
| Prior Year Adjustment |
: |
|
|
|
293,713 |
|
|
|
|
|
---------- |
|
|
|
|
|
72,729,066 |
|
|
|
|
|
---------- |
|
| Accumulated
Profit carried forward to Balance Sheet |
|
151,282,593 |
|
|
| The
main reasons for the increased profitability can be attributed to better
prices of our finished products |
|
| because
of their better quality and consumers' satisfaction. Increase in cost of raw
materials due to |
|
| international
prices and rupee devaluation has been absorbed by the market. |
|
|
| FUTURE
TREND |
|
| Market
trend shows steady growth of foam products market. Though, the competition
has increased |
|
| because
of new entrants and price cutting strategy of some existing manufacturers,
yet your company is |
|
| maintaining
its market share and enjoy consumer confidence. We are hopeful that we shall
maintain our |
|
| growth
rate in coming years. |
|
|
| CHANGE
IN DIRECTORS |
|
| During
the year, two directors namely Mrs. Seema Iftikhar and Mrs. Farah Waqar
rendered their |
|
| resignations
from the Board. The Board appointed Mr. M. H. Pervez and Mr. Syed M. Nawaz as
Directors |
|
| to
fill the vacancies. Both gentlemen are quite experienced executives. The
existing Directors welcome and |
|
| wish
them all the best. |
|
|
| AUDITORS |
|
| The
Present auditors M/S Saleem Ahsan & company, Chartered Accountants,
Lahore, retire and being |
|
| eligible
offer themselves for re-appointment. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| The
Pattern of holding of Shares as required Under Section 236 of the Companies
Ordinance, 1984 is |
|
| annexed
to this report. |
|
|
| We
are also thankful to our management and staff team, who have put in best to
achieve what progress we |
|
| have
todate and we are confident that with their support we will Insha-Allah, be
able to do better in future. |
|
|
| Lahore |
|
|
| October
12, 1996. |
|
|
| FOR
AND ON BEHALF OF THE BOARD |
|
0 |
R |
T |
1 |
9 |
9 |
6 |
| Chief
Executive |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| We
have audited the annexed Balance Sheet of DIAMOND INDUSTRIES LIMITED as at
June 30, 1996, |
|
| and
the related profit and loss account and Statement of Changes in Financial
Position, 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 and, after due verification thereof, we report that:- |
|
|
| In
our opinion, proper books of accounts have been kept by the company as
required by the |
|
| Companies
Ordinance, 1984. |
|
|
| b. In our opinion: |
|
| i.
The balance sheet and profit and loss account together with the notes thereon
have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984, and are in agreement
with |
|
| the
books of accounts and are further in accordance with accounting policies
consistently |
|
| applied; |
|
|
| ii.
The expenditure incurred during the period was for the purpose of the
company's business |
|
| and; |
|
|
|
| iii.
The business conducted, investments made and the expenditure incurred during
the period |
|
| were
in accordance with the objects of the company; |
|
|
|
| c.
In our opinion and to the best of our information and according to the
explanations given to us, |
|
| the
Balance Sheet, Profit and Loss account and 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, 1996 and of the profit and changes in
financial |
|
| position
for the period then ended; and |
|
|
| d.
In our opinion Zakat deductible at source under Zakat and Ushr Ordinance,
1980, was deducted |
|
| by
the Company and deposited in the Central Zakat Fund established under Section
7 of the |
|
| Ordinance. |
|
|
| Lahore |
|
| October
12, 1996. |
|
|
| SALEEM
AHSAN & CO. |
|
| Chartered
Accountants |
|
|
|
|
| BALANCE
SHEET |
|
1996 |
1995 |
|
|
Note |
Rupees |
Rupees |
|
|
|
| CAPITAL
& LIABILITIES |
|
|
|
| AUTHORISED
CAPITAL |
|
| 12,000,000
Shares of Rs. 10 Each |
|
120,000,000 |
120, 000,000 |
|
|
|
============ |
============ |
|
| ISSUED,
SUBSCRIBED & PAID UP CAPITAL |
|
| 9,000,000
(1995:6,000,000) |
|
| Ordinary
Shares of Rs. 10 Each. |
|
3 |
90,000,000 |
60, 000,000 |
|
|
|
| Un-appropriated
Profit |
|
151,282,593 |
72,435,353 |
|
|
|
----------------------- |
|
|
241,282,593 |
132,435,353 |
|
| CURRENT
LIABILITIES |
|
| Short
term Loans - Secured |
|
4 |
36,767,850 |
15,464,840 |
|
| Creditors
& Accrued Liabilities |
|
5 |
9,705,415 |
14,711,190 |
|
| Other
Liabilities |
|
7,432,111 |
3, 062, 728 |
|
| Provision
for Taxation |
|
4,463,300 |
1,397,915 |
|
| Dividend
Payable |
|
73,720 |
12,000, 000 |
|
| Proposed
Dividend |
|
42, 000, 000 |
|
|
|
|
| CONTINGENCIES
AND |
|
|
|
| COMMITMENTS |
|
6 |
|
|
|
|
----------------------- |
|
|
|
58,442,396 |
88,636,673 |
|
|
|
|
|
|
|
|
|
|
----------------------- |
|
|
|
299, 724,989 |
221,072,026 |
|
|
|
============ |
============ |
|
|
|
|
|
| IFTIKHAR
A. SHAFFI |
|
| Chief
Executive |
|
|
|
|
Note |
1996 |
1995 |
|
| AS
ON JUNE 30, 1996 |
|
|
Rupees |
Rupees |
|
|
|
| PROPERTY
& ASSETS |
|
| FIXED
ASSETS |
|
| (At
cost less depreciation) |
|
7 |
50,150,407 |
50,609, 703 |
|
|
|
| Capital
work in Progress |
|
2,995,373 |
1,888, 008 |
|
|
| Deferred
Cost |
|
|
2,109,668 |
2,637,085 |
|
|
| CURRENT
ASSETS |
|
| Stock
in Trade |
|
8 |
56,695,274 |
55,548,525 |
|
| Debtors |
|
45,586,497 |
48,665,016 |
|
| Due
from Associated Concern |
|
1,090,693 |
4,829,375 |
|
| Short
Term Investment |
|
3,116,700 |
|
| Advances
Deposits, Prepayments & |
|
|
|
| Others
Receivable |
|
9 |
26,852,829 |
16,186,543 |
|
| Cash
& Bank Balances |
|
111,127,548 |
40,707,771 |
|
|
----------------------- |
|
|
|
244,469,541 |
165,937,230 |
|
|
|
|
|
|
|
|
----------------------- |
|
|
299, 724,989 |
221,072,026 |
|
|
|
============ |
============ |
|
| MUHAMMAD
SAEED |
|
| Director |
|
|
|
|
|
|
Twelve months |
|
Six months |
|
| PROFIT
& LOSS ACCOUNT |
|
ended June 30,1996 |
|
ended June 30, 1995 |
|
| FOR
THE YEAR ENDED JUNE 30, 1996 |
Note |
Rupees |
|
Rupees |
|
|
|
|
|
|
| Sales |
|
|
292,660,196 |
|
152,643,029 |
|
| Cost
of Goods Sold |
|
11 |
156,310,732 |
|
99, 244, 729 |
|
|
|
|
------------- |
------------- |
|
| Gross
Profit |
|
136,349,464 |
|
53,398,300 |
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| Administrative |
|
12 |
25,186,028 |
|
11,071,047 |
|
| Selling |
|
13 |
17,994,213 |
|
5,974.67 |
|
| Financial |
|
14 |
5,842,127 |
|
2,578,140 |
|
| Others |
|
4,369,383 |
|
1,698,500 |
|
|
------------- |
------------- |
|
|
|
53,391,751 |
|
21,322,353 |
|
|
|
|
|
|
|
|
|
| Operating
Profit |
|
82,957,713 |
|
32,075,948 |
|
| Others
Income |
|
59,114 |
|
196,120 |
|
|
------------- |
------------- |
|
| Profit
/ (Loss) Before Taxation |
|
83,016,827 |
|
32,272,068 |
|
|
|
|
| Taxation |
|
4,463,300 |
|
763,215 |
|
|
------------- |
------------- |
|
| Profit
/ (Loss) After Taxation |
|
78,553,527 |
|
31,508,853 |
|
|
|
------------- |
------------- |
|
|
|
|
|
| Un-appropriated
Profit Brought Forward |
|
72,435,353 |
|
6,811,004 |
|
| Prior
Year Adjustment |
|
293, 713 |
|
76,115,496 |
|
|
------------- |
------------- |
|
|
|
72,729,066 |
|
82,926,500 |
|
|
|
|
|
|
------------- |
------------- |
|
| Profit
/ (Loss) Before Appropriations |
|
151,282,593 |
|
114,435,353 |
|
|
|
============ |
|
============ |
|
|
|
| APPROPRIATIONS |
|
| Cash
Dividend |
|
- |
|
12,000,000 |
|
| Bonus
Shares |
|
- |
|
30,000,000 |
|
|
------------- |
------------- |
|
|
- |
|
42,000,000 |
|
|
|
|
------------- |
------------- |
|
| Unappropriated
Profit Carried |
|
151,282,593 |
|
72,435,353 |
|
|
|
============ |
|
============ |
|
| Forward
to Balance Sheet |
|
|
|
| IFTIKHAR
A. SHAFFI |
|
| Chief
Executive |
|
|
|
| MUHAMMAD
SAEED |
|
| Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 1996 |
|
|
Twelve months |
|
Six months |
|
| Cash
Flow From Operating Activities |
|
ended June 30,1996 |
|
ended June 30, 1995 |
|
|
Rupees |
|
Rupees |
|
|
|
| Net
Profit Before Taxation |
|
83,016,827 |
|
32,272,068 |
|
| Adjustment
for |
|
|
|
|
| Depreciation |
|
6,031,280 |
|
2,623,384 |
|
| Amortization |
|
527,417 |
|
- - |
|
| Financial
Expenses |
|
5,842,127 |
|
2,578,140 |
|
| Profit
on Disposal of Assets |
|
(59,114) |
|
(196,120) |
|
| Others |
|
4,369,383 |
|
1,698,500 |
|
| Operating
Profit Before Working |
|
|
|
|
|
------------- |
------------- |
|
| Capital
Changes and Financial Expenses |
|
99, 72 7,920 |
|
38, 975, 972 |
|
|
| Change
in Working Capital |
|
|
|
| (Increase)
/ Decrease in Stock in Trade |
|
(1,146,749) |
|
15.621.575 |
|
| (Increase)
/ Decrease in Debtors |
|
3,078,519 |
|
(5.419.997) |
|
| (Increase)
/ Decrease in Due from Associated Concern |
3,738,682 |
|
4,071,333 |
|
| (Increase)
/ Decrease in Advances. Deposit. |
|
| Prepayments
and Others Receivables |
|
(10,666,286) |
|
(6,826,584) |
|
|
|
------------ |
|
------------ |
|
|
|
'(4,995,34) |
|
7,446,327 |
|
|
|
| (Increase)
/ Decrease in Creditors and accrued |
|
| Liabilities |
|
(5,005,775) |
|
(19,464.570) |
|
| (Increase)
/ Decrease in Due from Associated Concern |
- - |
|
(2,673,881) |
|
| (Increase)
/ Decrease in Others Liabilities |
|
- - |
|
(603,201) |
|
|
------------ |
|
------------ |
|
|
|
(5,005,775) |
|
(22,741,652) |
|
|
|
|
|
------------ |
|
------------ |
|
| Change
in Working Capital |
|
(10,001,609) |
|
(15,295,325) |
|
|
|
------------ |
|
------------ |
|
|
|
|
|
| Cash
Generated From Operations |
|
89, 726,311 |
|
23,680, 647 |
|
|
|
|
| Financial
Expenses |
|
5,842,127 |
|
2,578, 140 |
|
| Taxes
Paid/Adjustment |
|
1,104,202 |
|
763,215 |
|
|
|
|
------------ |
|
------------ |
|
| Net
Cash From Operating Activities |
|
82,779,982 |
|
20,339,292 |
|
| Cash
Flow, From Investing Activities |
|
|
|
| Net
Fixed Assets |
|
5,512,870 |
|
2,207,975 |
|
| Short
Term Investment |
|
3,116,700 |
|
- - |
|
| Payment
of Dividend |
|
23,926,280 |
|
18,000,000 |
|
| Capital
Work in Progress |
|
1,107,365 |
|
| Net
Cash Provided By (Use In) |
|
|
------------ |
|
------------ |
|
| Investing
Activities |
|
33,663,215 |
|
20,207,975 |
|
|
| Cash
Flow From Financing Activities |
|
| Increase
/ (Decrease) in Short Term Loans |
|
21,303,010 |
|
2,564,321 |
|
|
|
|
------------ |
|
------------ |
|
| Net
Cash Used in Financing Activities |
|
21,303,010 |
|
2,564,321 |
|
|
|
------------ |
|
------------ |
|
|
|
|
|
|
|
| Net
Increase / (Decrease) in Cash & |
|
|
|
| Cash
Equivalents |
|
70,419,777 |
|
2,695,638 |
|
| Cash
& Cash Equivalents at Beginning |
|
|
|
| of
the Period |
|
40,707,771 |
|
38,012,133 |
|
| Cash
& Cash Equivalents at Close |
|
| of
the Period |
|
|
|
