| Tri-Pack Films Limited |
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| Annual
Report 1998 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Meeting |
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| Directors'
Report to the Shareholders |
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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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SGS Yarsley |
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International Certification Services Limited |
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Certificate Number |
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Q14O39 |
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This is to certify that the |
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Quality Management systems of |
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TRI-PA CK FILMS Ltd. |
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Haripur, Pakistan |
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have been assessed and registered as meeting the |
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requirements of ISO 9001 |
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The scope of registration is detailed on the Assessment |
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Schedule bearing this certificate number. |
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SGS Yarsley International Certification Services Ltd |
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Signed by |
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05 August 1998 |
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This certificate remains valid subject to |
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satisfactory maintenance of the system |
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Registered Office: |
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SGS Yarsley |
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International Certification Services Limited |
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SGS House, 217/221 London Road, |
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Camberley, Surrey GUi5 3EY, United Kingdom. |
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Whilst all due care and skill was exercised in carrying out
this assessment, |
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SGS Yarsley ICS accepts responsibility only for proven gross
negligence. This |
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is not a legal document and cannot be used as such. The use of
the Accreditation |
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mark shown on this certificate indicates accreditation in the
respect of those |
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activities covered by that Accreditation Authority. This
certificate remains the |
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property of SGS Yarsley ICS to whom it must be returned on
request. |
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| COMPANY
INFORMATION |
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| Board
of Directors: |
Akira Yamamura |
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Javed Aslam (Managing
Director) |
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Khalid Yacob |
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Kiyohide lnoue |
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Syed Babar Ali (Chairman) |
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Syed Hyder Ali |
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Tariq Hamid |
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Yukio Imamura (Alternate
to Kiyohide Inoue) |
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M. Saeed Iqbal (Alternate
to Syed Babar Ali) |
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| Company
Secretary: |
Khalid Yacob |
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| Auditors: |
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A.F. Ferguson & Co.,
Chartered Accountants |
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| Legal
Advisors: |
Minto & Mirza |
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| Bankers: |
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Albaraka Islamic
Investment Bank B.S.C. (E.C) |
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Al-Towfeek Investment
Bank Limited |
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American Express Bank
Limited |
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ANZ Grindlays Bank
Limited |
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Emirates Bank
International P.J.S.C. |
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Muslim Commercial Bank
Limited |
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National Bank Of Pakistan |
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| Registered
Office: |
1st Floor, Hilal-e-Ahmer
House, |
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Khayaban-e-Iqbal, Main
Clifton Road, |
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Karachi 75600, Pakistan. |
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PABX 5863941-42,
5874047-49 |
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Telex. 20315 PKGS PK,
Fax: (021) S860251 |
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| Head
Office & |
1st Floor, G.D. Arcade,
Fazal-ul-Haq Road, |
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| Sales
Office: |
73-E, Blue Area,
Islamabad. |
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Tel: 273135, 273907-08
Fax: (051) 273136 |
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E-mail:
isb@tripack1.sdnpk.undp.org |
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| Regional
Sales Office: |
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| Karachi: |
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201-202, Marine Pride,
Block 7,Clifton, |
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Karachi 75600 |
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Telephone: (021)
S871801-2, Fax: (021) S871803 |
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E-mail:
rm-south@cyber.net.pk |
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| Lahore: |
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36-C/I, Ghalib Road.
Gulberg Ill, Lahore |
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Tel: (042) 5753371,
5763824. Fax: (042) 5753397 |
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E-mail:
info@tripack.brain.net.pk |
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| Works: |
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Plot No. 78/1, Phase IV, |
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Hattar Industrial Estate,
Hattar, N.W.F.P. |
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Telephone: (0995)
617406-7, Fax: (0995) 617054 |
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E-mail:
pm@tripack2.sdnpk.undp.org |
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| NOTICE
OF MEETING |
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| NOTICE
IS HEREBY GIVEN that the Sixth Annual General Meeting of Tri-Pack Films |
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| Limited
will be held at Auditorium of the Institute of Chartered Accountants of |
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| Pakistan,
G-31/8, Kehkashan, Clifton, Karachi on Wednesday, December 16, 1998 at |
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| 3:30
p.m. to transact the following Business:- |
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| 1.
To receive and consider the Audited Accounts for the year ended June 30, |
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| 1998,
the Report of the Auditors thereon and the Report of the Directors. |
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| 2.
To appoint Auditors and to fix their remuneration. |
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| 3.
To transact any other business with the permission of the Chair. |
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By Order of the Board |
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Khalid Yacob |
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| Karachi:
November 24, 1998 |
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Director & Company Secretary |
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| Notes: |
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| 1.
The Share Transfer Books of the Company will be closed from |
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| December
03, 1998 to December 16, I998 both days inclusive. |
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| 2.
A member entitled to attend and vote at the General Meeting is entitled to |
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| appoint
another member as a proxy to attend and vote instead of him. |
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| 3.
The instrument appointing a proxy must be received at the Registered Office |
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| of
the Company, First Floor, Hilal-e-Ahmer House, Khayaban-e-Iqbal, Main |
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| Clifton
Road, Karachi 75600, not later than forty-eight hours before the time |
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| appointed
for the Meeting. A member shall not be entitled to appoint more |
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| than
one proxy. If a member appoints more than one proxy and more than |
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| one
instrument of proxy are deposited by a member with the Company, all |
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| such
instruments of proxy shall be rendered invalid. |
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| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
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| The
Directors take pleasure in placing their Report and Audited Accounts for the |
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| year
ended June 30, 1998 before the Sixth Annual General Meeting of the Company |
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| to
be held on December 16, 1998. |
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| By
the grace of the Almighty, 1997-98 was landmark year during which your |
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| Company
recorded net profit of Rs. 62.09 million against loss of Rs. 20.21 million
for |
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preceding year. Invoiced sales increased from Rs. 358.93 million in 1996-97
to |
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| Rs.542.58
million in 1997-98. Production of BOPP film during the year under review |
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| was
4,390 tonnes as compared to 2,737 tonnes in I996-97. We were able to achieve |
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| these
operating results despite unfavourable tariff structure for the BOPP
industry. |
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| Continuous
enhancement of our product quality has been the policy of the |
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| Company.
We are happy to inform you that your Company has obtained ISO 9001 |
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| certification.
This is a recognition of our quality standards, operational systems and |
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| procedures. |
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| With
the active support from our Joint Venture partners M/s. Mitsubishi
Corporation, |
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| Japan,
we were able to solve technical problems and plant operations were smooth |
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| during
the year. We are also up-grading technical skills of our employees and have |
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| been
able to finalise specialised training facility abroad through our Joint
Venture |
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| partners
M/s. Packages Limited. |
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| During
the year under review special emphasis was given on the export. We |
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| exported
over 320 tonnes of BOPP film valuing US $ 586 thousand primarily to Iran |
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| and
Sri-Lanka. However, due to the delay on the part of the Government in
settling |
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| the
issue of export rebate of customs duty, we foresee a decline in our export |
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| business
during 1998-99. |
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| Appointment
of Auditors |
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| You
are requested to appoint the Auditors for the year ending June 30, 1999 and
fix |
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| their
remuneration. The present Auditors A.F. Ferguson ~4 Company, Chartered |
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| Accountants
retire and offers themselves for reappointment |
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| Future
Outlook |
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| The
Directors look to the future with confidence and hope that the Company's |
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| business
will keep on growing with satisfactory results and our efforts to further |
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| increase
our customer base and market share will continue. |
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| As
you are aware our products are used by other industries in Pakistan to pack
their |
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| products
and our success is directly linked to their ability to perform. Your Board |
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| expects
the Government to ensure conducive and peaceful conditions in the country |
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| enabling
the industry to perform successfully and contribute to the economic growth |
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| of
the nation. |
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| Management/Employees
Relationship |
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| The
Directors would like to recognize and record their appreciation for the |
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| continuous
efforts and dedication of all its employees, and look forward to their |
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| efforts
in future with the same zeal and dedication. |
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For and on behalf of the Board. |
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Javed Aslam |
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| October
22, 1998 |
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(Managing Director) |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of Tri-Pack Films Limited as at |
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| June
30,1998 and the related profit and loss account and cash flow statement,
together |
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| with
the notes forming part thereof, for the year then ended and we state that we
have |
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| obtained
all the information and explanations which to the best of our knowledge and |
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| belief
were necessary for the purposes of our audit and, after due verification
thereof, we |
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| report
that: |
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| (a)
in our opinion, proper books of account have been kept by the Company as |
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| required
by the Companies 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 |
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| have
been drawn up in conformity with the Companies Ordinance, 1984 |
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| and
are in agreement with the books of account and are further in |
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| accordance
with the accounting policies consistently applied; |
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| (ii)
the expenditure incurred during the year was for the purpose of the |
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| Company's
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 objects of the Company; |
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| (c)
in our opinion and to the best of our information and according to the |
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| explanations
given to us, the balance sheet, profit and loss account and cash flow |
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| statement
together with the notes forming part thereof, give the information |
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| required
by the Companies Ordinance, 1984, in the manner so required and |
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| respectively
give a true and fair view of the state of the Company's affairs as at |
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| June
30, 1998 and of the profit and cash flows for the year then ended: and |
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| (d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr |
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| Ordinance,
1980. |
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A.F. Ferguson & Co. |
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|
Chartered Accountants |
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| October
22, 1998 |
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Islamabad |
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| BALANCE
SHEET AS AT JUNE 30, 1998 |
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(Rupees in thousand) |
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Note |
1998 |
1997 |
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| SHARE
CAPITAL |
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| Authorised |
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3 |
300,000 |
300,000 |
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========== |
========== |
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| Issued,
subscribed and paid up |
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3 |
300,000 |
300,000 |
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| Accumulated
Profit/(Loss) |
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9,927 |
(52,167) |
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---------- |
---------- |
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309,927 |
247,833 |
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| LONG
TERM LIABILITIES AGAINST ASSETS |
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| SUBJECT
TO FINANCE LEASE |
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4 |
45,741 |
129,599 |
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| LONG
TERM FINANCE |
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5 |
20,000 |
- |
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| CURRENT
LIABILITIES |
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| Current
portion of liabilities against assets |
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| subject
to finance lease |
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4 |
83,858 |
76,235 |
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| Current
portion of long-term finance |
5 |
13,333 |
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| Short-term
finance |
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6 |
26,659 |
79,518 |
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| Creditors,
accrued and other liabilities |
7 |
18,573 |
16,148 |
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---------- |
---------- |
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142,423 |
171,901 |
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| Contingencies and Commitments |
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8 |
---------- |
---------- |
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518,091 |
549,333 |
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========== |
========== |
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(Rupees in thousand) |
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Note |
1998 |
1997 |
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| FIXED
CAPITAL EXPENDITURE |
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| Fixed
assets |
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9 |
376,783 |
424,318 |
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| Capital work-in-progress |
10 |
395 |
1,479 |
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---------- |
---------- |
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377,178 |
425,797 |
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| LONG
TERM DEPOSITS AND |
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| DEFERRED
COSTS |
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11 |
192 |
2,207 |
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| CURRENT
ASSETS |
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| Stores
and spares |
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12 |
13,780 |
7,906 |
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| Stock-in-trade |
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13 |
45,677 |
59,142 |
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| Trade debts |
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14 |
52,492 |
40,109 |
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| Advances,
deposits, prepayments and |
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| other
receivables |
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15 |
16,651 |
12,856 |
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| Cash
and bank balances |
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16 |
12,121 |
1,316 |
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---------- |
---------- |
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140,721 |
121,329 |
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---------- |
---------- |
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518,091 |
549,333 |
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========== |
========== |
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| The
annexed notes form an integral part of these accounts |
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|
Javed Aslam |
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|
Kiyohide Inoue |
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|
Chief Executive |
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|
Director |
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| PROFIT
AND LOSS ACCOUNT |
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| FOR
THE YEAR ENDED JUNE 30 1998 |
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(Rupees in thousand) |
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Note |
1998 |
1997 |
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| SALES |
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17 |
542,577 |
358,925 |
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| Cost
of sales |
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18 |
395,943 |
302,579 |
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---------- |
---------- |
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| GROSS
PROFIT |
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146,634 |
56,346 |
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| OPERATING
EXPENSES |
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| Administrative
and general |
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19 |
21,468 |
16,477 |
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| Selling
and distribution |
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20 |
15,997 |
10,191 |
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---------- |
---------- |
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37,465 |
26,668 |
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---------- |
---------- |
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109,169 |
29,678 |
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| FINANCIAL
CHARGES |
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21 |
44,332 |
52,316 |
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---------- |
---------- |
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64,837 |
(22,638) |
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| OTHER
INCOME |
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22 |
525 |
894 |
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---------- |
---------- |
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65,362 |
(21,744) |
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| Workers'
profit participation fund |
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3,268 |
- |
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|
---------- |
---------- |
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| PROFIT/(LOSS)
BEFORE TAXATION |
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62,094 |
(21,744) |
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| TAXATION |
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23 |
- |
1,530 |
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---------- |
---------- |
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| PROFIT/(LOSS)
AFTER TAXATION |
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62,094 |
(20,214) |
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| PROFIT/(LOSS)
BROUGHT FORWARD |
|
(52,167) |
(31,953) |
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---------- |
---------- |
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| PROFIT/(LOSS)
CARRIED FORWARD |
|
9,927 |
(52,167) |
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|
========== |
========== |
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| The
annexed notes form an integral part of these accounts. |
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|
Javed Aslam |
|
Kiyohide Inoue |
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|
Chief Executive |
|
Director |
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|
|
| CASH
FLOW STATEMENT |
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| FOR
THE YEAR ENDED JUNE 30, 1998 |
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|
(Rupees in thousand) |
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|
Note |
1998 |
1997 |
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| CASH
FLOW FROM OPERATING ACTIVITIES |
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| Cash
generated from operations |
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25 |
156,031 |
85,446 |
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| Hark-up
and related charges paid |
|
(45,877) |
(82,325) |
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|
|
---------- |
---------- |
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| Net
cash inflow from operating activities |
|
110,154 |
3,141 |
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| CASH
FLOW FROM INVESTING ACTIVITIES |
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| Fixed
capital expenditure |
|
(3,588) |
(2,650) |
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| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Long-term
finance - net of repayment |
|
33,333 |
- |
|
| Repayment
of liability against assets subject to |
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| finance
lease |
|
|
(76,235 |
(68,079) |
|
|
|
|
---------- |
---------- |
|
| Net
cash (outflow) from financing activities |
|
(42,902) |
(68,079) |
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|
|
---------- |
---------- |
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|
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|
|
| NET
INCREASE/(DECREASE) IN CASH AND CASH |
|
| EQUIVALENTS |
|
|
63,664 |
(67,588) |
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|
|
| Cash
and cash equivalents at beginning of the year |
(78,202) |
(10,614) |
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|
|
|
---------- |
---------- |
|
| CASH
AND CASH EQUIVALENTS AT END OF |
25.1 |
|
| THE YEAR |
|
|
|
(14,538) |
(78,202) |
|
|
|
|
|
========== |
========== |
|
|
|
Javed Aslam |
|
Kiyohide Inoue |
|
|
Chief Executive |
|
Director |
|
|
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED |
|
| JUNE
30, 1998 |
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|
| 1.
The Company and its operations |
|
| The
Company is a public company incorporated in Pakistan under the Companies |
|
| Ordinance,
1984 and is listed on stock exchanges in Pakistan. It is principally engaged |
|
| in
the manufacture and sale of biaxially oriented polypropylene (BOPP) film. The |
|
| Company
commenced commercial production on June 1, 1995. |
|
|
| 2.
Significant accounting policies |
|
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention. |
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|
| 2.2
Retirement benefits |
|
| The
Company contributes towards pension of certain executives of the Company who |
|
| are
member of an approved Contributory Pension Fund of an associated company. |
|
| Contributions
made by the Company are charged to income currently. |
|
|
| The
Company operates a funded Provident Fund Scheme covering permanent |
|
| employees.
Monthly contribution is made to the fund at the prescribed rates under the |
|
| rules
of fund at basic pay of employees. |
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|
|
|
| 2.3
Taxation |
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| Profit
and gains derived by the Company are exempt from income tax for a period of |
|
| eight
years beginning commencement of commercial production, in terms of clause |
|
| 118C
of the Second Schedule of the Income Tax Ordinance, 1979. |
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|
| 2.4
Fixed capital expenditure and depreciation |
|
|
| a)
Owned assets |
|
|
| Operating
fixed assets except leasehold land are stated at cost less accumulated |
|
| depreciation.
Capital work-in-progress is stated at cost. Cost of the leasehold land |
|
| is
amortised using the straight line basis over the period of the lease from |
|
| commencement
of commercial production. |
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|
| Depreciation
on operating fixed assets is charged to profit on straight line method |
|
| at
the rates given in note 9. Full year's depreciation is charged on normal |
|
| additions,
while no depreciation is charged on deletions during the year. |
|
|
| Maintenance
and repairs are charged to income as and when incurred. Major |
|
| renewals
and improvements are capitalised and the assets so replaced, if any, are |
|
| retired.
Gains and losses on disposal of assets, if any, are included in income |
|
| currently. |
|
|
|
| b.
Assets subject to finance lease |
|
| Assets
subject to finance lease are stated at the lower of present value of |
|
| minimum
lease payments at the inception of the lease and their fair value at that |
|
| date.
The outstanding obligations under the lease less financial charges allocated |
|
| to
future periods are accounted for as liabilities. Related financial expenses
are |
|
| charged
to the profit and loss account except those related to the period upto the |
|
| commencement
of commercial production, which expenses have been |
|
| capitalised. |
|
|
| Assets
subject to finance lease are amortised over the useful life of the asset on a |
|
| straight
line method at the rates given in note 9. Amortisation of leased assets is |
|
| charged
to income. |
|
|
| 2.5
Deferred costs |
|
| These
costs are amortised over a period of three years. |
|
|
| 2.6
Stores and spares |
|
| These
are valued at weighted average cost. |
|
|
| 2.7
Stock-in-trade |
|
| Stock
of raw materials, except for those in transit, work-in-process and finished
goods |
|
| are
valued at the lower of average cost and net realisable value. Cost of
work-in- |
|
| process
and finished goods comprises |
