| AMIN SPINNING MILLS LIMITED (MIRPUR A.K.) |
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| 14TH
ANNUAL REPORT AND ACCOUNTS |
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| FOR
THE YEAR ENDED 30TH SEPTEMBER, 1997 |
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| CONTENTS |
|
| Board
of Directors |
|
| Notice
of Meeting |
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| Director's Report |
|
| Auditor's
Report |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Source and Application of Funds |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
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|
|
|
| BOARD
OF DIRECTORS |
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|
| MANAGING
DIRECTOR/ |
|
|
| CHIEF
EXECUTIVE: |
|
Kh. Mohammad Jahangir |
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| DIRECTORS: |
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|
Ch. Mohammad Eusaff |
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|
Ch. Mohammad Sadiq |
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|
Kh. Mohammad Javed |
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|
Kh. Mohammad Kaleem |
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|
Kh. Mohammad Nadeem |
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|
Kh. Mohammad Tanvir |
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|
Ch. Khuda Dad |
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|
Ch. Waqar Sadiq |
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|
Mr. Shahid Aziz (NIT) |
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| SECRETARY: |
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|
S.M. Aseer Multani |
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| AUDITORS: |
|
|
M. Hussain Chaudhury
& Co. |
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|
Chartered Accountants |
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| BANKERS: |
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|
National Bank of Pakistan |
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|
Askari Commercial Bank
Ltd. |
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|
Habib Bank Limited |
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|
United Bank Limited |
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|
Muslim Commercial Bank
Ltd. |
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| REGISTERED
OFFICE: |
|
Industrial Estate Mirpur
(A.K) |
|
| MILLS: |
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|
Industrial Estate Mirpur
(A.K.) |
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| CABLE: |
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|
PAMIR |
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|
| NOTICE
OF MEETING |
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| Notice
is hereby given that the 14th Annual General Meeting of Shareholders of Amin
Spinning Mills |
|
| Ltd,
Mirpur (AK) will be held on 28th March, 1998 at 10.30 A.M. at MILLS Office,
Industrial Area, Mirpur |
|
|
| (A.K)
to transact the following business :- |
|
|
| 1.
To receive and confirm the proceedings of the last Annual General Meeting of
Shareholders of the |
|
| Company. |
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|
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| 2.
To receive consider and adopt the Director's Report and Audited Accounts
alongwith Auditor's |
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| Report
of the Company for the year ending 30th September, 1997. |
|
|
| 3.
To appoint auditors of the Company for the ensuing year and fix their
remuneration, the |
|
| retiring
auditors M/S M. Hussain .Chaudhury & Co. Chartered Accountants, 25-E,
Main Market, |
|
| Gulberg-2,
Lahore being eligible have offered themselves for re-appointment. |
|
|
| 4.
To transact any other business with the permission of the Chairman |
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|
| Notes |
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| i)
A member entitled to attend and vote at the meeting may appoint another
member as |
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| his/her
Proxy to attend and vote, proxies in order to be effective must be received
at |
|
| registered
office of the Company not later than 48 hours before the time of holding the |
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| meeting. |
|
|
|
| ii)
Members are requested to immediately notify the change in address, if any. |
|
|
| iii)
The register of members will remain closed from 24th March 1998 to 2nd April,
1998 (both |
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| days
inclusive). |
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| DIRECTOR'S
REPORT |
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|
| Dear
Shareholders, |
|
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| Your
Directors take the opportunity of submitting the Annual Report alongwith
Audited Accounts for |
|
| the
year ended 30th September, 1997. |
|
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| All
the factors those caused shortage of cotton and increase of its prices in the
last year remained as it |
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| is
in the year under review too. Beside this the banks and other lending
institutions were afraid of the |
|
| crises
effected condition of the spinning units, as such they did not extend credit
lines to the spinners. |
|
|
| Therefore.
the management had no way except to switch on to man-made fiber as tile same
was easily |
|
| available
from tile local market. and had to make policy of day to day stock for the
procurement of raw |
|
| material.
However inflationary trend in the prices of other inputs badly effected the
profitability. Thus |
|
| your
Company suffered a loss of Rs. 40.658 million. |
|
|
| A
relief package has been granted under the incentive scheme of State Bank of
Pakistan t)y virtue of |
|
| which
the Company will have opportunity to take adequate measures for its revival. |
|
|
| M/S
M. Hussain Chaudhury & Co. Chartered Accountants, retired and being
eligible offered |
|
| themselves
for re-appointment as the Auditors of the Company for the year 1997-98 |
|
|
| The
Directors place on record their sincere appreciation to the devotion arid
loyalty of the workers. |
|
| Staff
& Officers and expect the similar behaviour in the Year to come. |
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|
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| AUDITORS'
REPORT TO THE MEMBERS |
|
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| We
have audited the annexed balance sheet of AMIN SPINNING MILLS LIMITED as at
September |
|
| 30,
1997 and the related profit and loss account and statement of changes in
financial position (cash |
|
| flow
statement), 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: |
|
|
| a)
in our opinion, proper books of account have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984 (as applicable to Azad Government of the State of Jammu & |
|
| Kashmir); |
|
|
| b)
in our opinion: |
|
|
| i)the
balance sheet and profit & loss account together with the notes thereon
have been |
|
| drawn
up in conformity with the Companies. Ordinance, 1984 and are in agreement |
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| with
the books of account and are further in accordance with accounting policies |
|
| consistently
applied; |
|
|
| ii)
the expenditure incurred during the year was for the purpose of the Company's |
|
| business;
and |
|
|
|
| iii)
the business conducted, investments made and the 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 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 September 30, 1997 and of the
loss 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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| (as
applicable to Azad Government of the State of Jammu & Kashmir). |
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|
(M. HUSSAIN CHAUDHARY & CO.) |
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| LAHORE:
March 4, 1998 |
|
CHARTERED ACCOUNTANTS |
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|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 1997 |
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|
1997 |
1996 |
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|
|
Rupees |
Rupees |
|
| CAPITAL
AND LIABILITIES |
|
|
|
|
|
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
| Authorised : |
|
|
|
|
| 10.000,000
(1996:10,000,000) ordinary shares |
|
| of
Rs. 10/- each |
|
100,000,000 |
100,000,000 |
|
|
|
|
========== |
========== |
|
| Issued.
subscribed and paid up |
|
3 |
51,750,000 |
51,750,000 |
|
| Share
deposit money |
|
4,500,000 |
4,500.00 |
|
| Accumulated
loss |
|
(290,441,001) |
(249,782,587) |
|
|
|
|
---------- |
---------- |
|
|
|
|
(234,191,001) |
(193,532,587) |
|
|
|
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
5 |
90,645,457 |
0 |
|
|
|
|
|
| FINANCES/LOANS
FROM BANKS |
|
|
|
| National
Bank of Pakistan |
|
6 |
148,596,740 |
140,951,016 |
|
| Askari
Commercial Bank Limited |
|
7 |
14,625,000 |
2,875,000 |
|
| Habib
Credit and Exchange Bank Limited |
8 |
0 |
21,387,581 |
|
|
|
|
---------- |
---------- |
|
|
|
|
163,221,740 |
165,213,597 |
|
| LIABILITY
AGAINST ASSETS SUBJECT |
|
|
|
| TO
FINANCE LEASE |
|
9 |
0 |
0 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Over
due and current portion |
|
|
| of
long term liabilities |
|
10 |
45,550,062 |
28,458,264 |
|
| Loan
from associated undertaking-over due |
11 |
15,000,000 |
15,000,000 |
|
| Short
term finances |
|
12 |
24,370,631 |
25,804,589 |
|
| Morabaha
finance |
|
13 |
13,400,000 |
16,334.60 |
|
| Due
to associated undertakings-unsecured |
14 |
56,947,499 |
26,670,024 |
|
| Borrowing
from directors - unsecured |
15 |
8,334,076 |
8,334,076 |
|
| Creditors,
accrued and other liabilities |
16 |
70,448,074 |
91,102,341 |
|
|
|
|
---------- |
---------- |
|
|
|
|
234,050,342 |
211,703,894 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
17 |
0 |
0 |
|
|
|
|
---------- |
---------- |
|
|
|
|
253,726,538 |
183,384,904 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| LIMITED
(MIRPUR A.K.) |
|
| SEPTEMBER
30, 1997 |
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
|
| OPERATING
FIXED ASSETS |
|
18 |
226,206,016 |
150,450,042 |
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
19 |
1,472,109 |
1,614,338 |
|
| Stock
in trade |
|
20 |
15,925,868 |
16,949.23 |
|
| Trade
debtors |
|
21 |
1,918,594 |
2,961,321 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
22 |
6,877,690 |
11.046,567 |
|
| Cash
and bank balances |
|
23 |
1,326,261 |
363,411 |
|
|
|
|
---------- |
---------- |
|
|
|
|
27,520,522 |
32,934,862 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
253,726,538 |
183,384,904 |
|
|
|
|
========== |
========== |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED SEPTEMBER 30, 1997 |
|
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
|
|
| Sales Net |
|
24 |
169,769,801 |
210,668,843 |
|
| COST
OF SALES |
|
25 |
166,636,305 |
209,255,831 |
|
|
|
|
---------- |
---------- |
|
| GROSS PROFIT |
|
|
3,133,496 |
1,413,012 |
|
|
|
|
| OPERATING
EXPENSES: |
|
|
|
| Administrative
and general expenses |
|
|
14,996,991 |
5,174,895 |
|
| Selling
expenses |
|
27 |
3,721,859 |
3,052,952 |
|
|
|
|
---------- |
---------- |
|
|
|
|
18,718,770 |
8,227,847 |
|
|
|
|
---------- |
---------- |
|
| OPERATING
LOSS |
|
|
(15,585,274) |
(6,814,835) |
|
|
|
|
|
|
|
| Other income |
|
|
28 |
22,298,386 |
3,183,422 |
|
|
|
|
---------- |
---------- |
|
| Financial
charges |
|
29 |
47,010,226 |
48,134,590 |
|
| Other
charges |
|
30 |
361,300 |
114,780 |
|
|
|
|
---------- |
---------- |
|
|
|
|
47,371,526 |
48,249,370 |
|
|
|
|
---------- |
---------- |
|
| LOSS
FOR THE YEAR |
|
|
(40,658,414) |
(51,880,783) |
|
|
|
|
|
|
|
| Accumulated
loss brought forward |
|
|
(249,782,587) |
(197,901,804) |
|
|
|
|
---------- |
---------- |
|
| ACCUMULATED
LOSS CARRIED TO BA~NCE SHEET |
|
(290,441,001) |
(249,782,587) |
|
|
|
|
========== |
========== |
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION (CASH FLOW) |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1997 |
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
|
Rupees |
Rupees |
|
| CASH
FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
| Net
loss for the year |
|
(40,658,414) |
(51,880,783) |
|
| Adjustment
for: |
|
|
|
| Depreciation |
|
15,176,423 |
16,859,345 |
|
| Gain
on disposal of fixed assets |
|
0 |
(253,238) |
|
| Gain
on restructuring of long term loans and liabilities |
(17,481,637) |
0 |
|
| Interest
written back |
|
(1,439,810) |
0 |
|
| Bad
debts written off |
|
9,342,253 |
0 |
|
| Financial
charges |
|
47,010,226 |
48,134,590 |
|
|
|
---------- |
---------- |
|
| Operating
profit before working capital changes |
11,949,041 |
12,859,914 |
|
|
|
|
| (Increase)/decrease
in current assets: |
|
|
|
|
|
|
|
|
| Stores
and spares |
|
142,229 |
231,000 |
|
| Stock
in trade |
|
1,023,357 |
(960,677) |
|
| Trade
debtors |
|
1,042,727 |
(1,176,905) |
|
| Advances,
deposits, prepayments and other receivables |
(5,173,376) |
4,298,851 |
|
|
|
|
| Increase/(decrease)
in current liabilities: |
|
|
|
|
|
| Creditors,
accrued and other liabilities |
|
(5,195,676) |
(3,376,189) |
|
|
|
|
|
| Due
to associated undertakings |
|
30,277,475 |
12,184,578 |
|
|
|
---------- |
---------- |
|
|
|
|
|
22,116,736 |
11,200,658 |
|
|
|
|
|
---------- |
---------- |
|
| Cash
generated from operations |
|
|
34,065,777 |
24,060,572 |
|
|
|
|
| Financial
charges paid |
|
(24,687,034) |
(16,511,789) |
|
|
|
---------- |
---------- |
|
| Net
cash from operating activities |
|
9,378,743 |
7,548,783 |
|
|
|
|
| ASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
| Fixed
capital expenditure |
|
(286,940) |
(239,993) |
|
| Proceeds
from disposal of fixed assets |
|
0 |
411,150 |
|
|
|
---------- |
---------- |
|
| Net
cash (used in) from investing activities |
|
(286,940) |
171,157 |
|
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
| Lease
obligations |
|
3,364,605 |
(1,000,000) |
|
| Increase/(decrease)
in shod term borrowing |
|
2,566,042 |
(4,245,373) |
|
| Increase/(decrease)
in morabaha finance |
|
(2,934,600) |
0 |
|
| Long
term loans repaid |
|
(11,125,000) |
(2,400,000) |
|
|
|
---------- |
---------- |
|
| Net
cash used in financing activities |
|
(8,128,953) |
(7,645,373) |
|
|
|
---------- |
---------- |
|
| Net
increase in cash and cash equivalents |
|
962,850 |
74,567 |
|
| Cash
and cash equivalents at the beginning of year |
363,411 |
288,844 |
|
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at the end of year |
|
1,326,261 |
363,411 |
|
|
|
========== |
========== |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1997 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| Amin
Spinning Mills Limited was incorporated as a public limited company in Azad
Kashmir under |
|
| the
repealed Companies Act, 1913 (now Companies Ordinance, 1984 as applicable to
Azad |
|
| Government
of the State of Jammu and Kashmir). The company is listed on Karachi and
Lahore |
|
| Stock
Exchanges. |
|
|
| The
principal activity of the company is the manufacture and sale of textile
yarn. |
|
|
| 2.
ACCOUNTING POLICIES |
|
| 2.1
ACCOUNTING CONVENTIONS: |
|
|
|
|
| These
accounts have been prepared under the historical cost convention without any |
|
| adjustment
for the effect of inflation or reference to current values, except to the
extent of |
|
| revaluation
of certain fixed assets and capitalization of the foreign currency exchange
rate |
|
| fluctuations
on principals loans. |
|
|
| 2.2
STAFF RETIREMENT BENEFITS: |
|
|
| The
company accounts for gratuity on payment basis for all of its employees
covered under |
|
| the scheme. |
|
|
|
|
|
| 2.3
FIXED ASSETS: |
|
|
| Fixed
assets are stated at cost less accumulated depreciation except land which is
stated at |
|
| revalued
amount, buildings and plant and machinery which are stated at revalued
amounts |
|
| less
accumulated depreciation and capital work in progress which is stated at
cost. The |
|
| cost
includes incidental charges of acquisition of fixed assets including
differences arising |
|
| due
to exchange rate fluctuations on foreign currency principal loans acquired
for |
|
| acquisition
of imported plant and machinery. |
|
|
| Depreciation
is charged on reducing balance method at the rates specified in Note 18. Full |
|
| year's
depreciation is charged on additions whereas no depreciation is charged on
assets |
|
| deleted
during the year. |
|
|
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. Major |
|
| renewals
and replacements are capitalised and assets retired, if any, are kept as
standby. |
|
|
|
|
| Gains
or losses on disposal of fixed assets are included in income currently. |
|
|
|
|
| 2.4
ASSETS SUBJECT TO FINANCE LEASE: |
|
|
| These
are stated at lower of present value of minimum lease payments and fair value
of |
|
| assets
acquired on lease. Depreciation policy for leased assets is consistent with
the owned |
|
| assets.
Depreciation charge on leased assets is charged to current year income.
Aggregate |
|
| amount
of obligation relating to assets subject to finance lease is accounted for at
present |
|
| value
of liabilities. |
|
|
| 2.5
DEFERRED COSTS: |
|
|
| These
are amortised over a period of five years in equal instalments, commencing
from the |
|
| year
of their incurrence. |
|
|
| 2.6
STOCK IN TRADE: |
|
|
| These
are valued as under: |
|
| Raw
materials |
|
-
At average cost |
|
| Work
in process |
|
- At estimated cost |
|
| Finished
goods |
|
- AT cost or net realisable |
|
|
|
|
value which ever is
lower. |
|
| Wastes |
|
|
- At net realisable value |
|
|
| Net
realisable value signifies the selling price at which goods in stock could be
currently |
|
| sold
less any further costs which would be incurred to complete the sales. |
|
|
| 2.7
STORES AND SPARES: |
|
|
| These
are valued at moving average cost. |
|
|
| 2.8
REVENUE RECOGNITION: |
|
|
| Sales
are recognised on despatch of goods to customers. |
|
|
| 2.9
EXPORT BILLS: |
|
|
| Export
bills receivable at balance sheet date are accounted for at the value
realised |
|
| subsequently. |
|
|
|
|
| 2.10
TAXATION: |
|
|
| CURRENT:
~. |
|
|
|
|
| The
charge for current taxation for the year is based on taxable income at
current rate after |
|
| considering
the applicable rebates, tax credits and exemptions available. |
|
|
| Deferred: |
|
|
|
|
|
|
| The
company accounts for deferred tax on all material timing differences using
the liability |
|
| method.
Deferred tax, however, is not provided, if it can be established with
reasonably |
|
| probability
that the timing differences involved will not reverse in the foreseeable
future. |
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
|
Rupees |
Rupees |
|
| 3.
ISSUED, SUBSCRIBED AND PAID UP |
|
|
|
|
|
|
| 4,000,000
(1996'4,000,000) Ordinary shares |
|
|
| of
Rs. 10/- each fully paid up in cash |
|
40,000,000 |
40,000,000 |
|
| 1,175,000
(1996 · 1,175,600) ordinary shares of |
|
| Rs.
10/- each issued as bonus shares |
|
11,750,000 |
11,750,000 |
|
|
|
---------- |
---------- |
|
|
|
51,750,000 |
51,750,000 |
|
|
|
|
========== |
========== |
|
| 4.
SHARE DEPOSIT MONEY |
|
|
|
|
|
|
| Balance
as at September 30, |
|
|
4,500,000 |
4,500,000 |
|
|
|
========== |
========== |
|
|
| This
represents amount deposited by directors of the company in 1991. |
|
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| 5.
SURPLUS ON REVALUATION OF FIXED ASSETS |
|
|
|
|
|
| Buildings
- on lease hod land |
|
|
31,870,007 |
0 |
|
| Plant
and machinery |
|
|
|
58,775,450 |
0 |
|
|
|
---------- |
---------- |
|
|
|
|
90,645,457 |
0 |
|
|
|
|
========== |
========== |
|
|
| Revaluation
was carried out by M/s. Harold Mukhtar and Co., 14-Q Gulberg-II, Lahore,
valuers |
|
| and
surveyors as at September 30, 1997 and certified by an independent firm of
Chartered |
|
| Accountants. |
|
|
|
| 6.
FINANCES FROM NATIONAL BANK OF PAKISTAN |
|
|
| Restructured
demand finance |
|
6.1 |
0 |
140,951,016 |
|
| Demand
finance - I |
|
6.2 |
98,596,740 |
0 |
|
| Demand
finance - II |
|
6.3 |
50,000,000 |
0 |
|
|
|
|
---------- |
---------- |
|
|
|
|
148,596,740 |
140,951,016 |
