| Dewan Salman Fibre Limited |
|
|
|
|
|
|
|
| Annual
Report 2001 |
|
|
|
| CONTENTS |
|
|
| Company
information |
|
| Notice
of Meeting |
|
| Directors' Report |
|
| Auditors' Report |
|
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
|
| Summary
of Differences between IAS, UK GAAP and US GAAP |
|
| Pattern
of Share Holding |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
DEWAN ZIA-UR-REHMAN
FAROOQUI |
|
|
|
President / Chief
Executive |
|
|
|
|
|
|
DEWAN ASIM MUSH.FIQ
FAROOQUI |
|
|
|
Managing Director |
|
|
|
|
|
|
HO SIK KI |
|
|
|
HIROSHI KANAMORI |
|
|
|
DEWAN GHULAM MUSTAFA
KHALID |
|
|
|
DEWAN MOHAMMAD YOUSUF
FAROOQUI |
|
|
|
DEWAN MOHAMMAD AYUB
KHALID |
|
|
|
DEWAN ABDUL REHMAN
FAROOQUI |
|
|
|
YOUNG KYUN BANG |
(Alternate Director) |
|
|
|
M. MEGURIYA |
|
(Alternate Director) |
|
|
| AUDITORS |
|
FARUQ ALI & COMPANY |
|
|
|
CHARTERED ACCOUNTANTS |
|
|
|
FEROZE SHARIF TARIQ &
COMPANY |
|
|
|
CHARTERED ACCOUNTANTS |
|
|
|
|
| SECRETARY |
|
FARRUKH S. ANSARI |
|
|
|
|
| LEGAL
ADVISORS |
KHALID ANWER &
COMPANY |
|
|
|
ADVOCATES |
|
|
|
|
| TAX
ADVISORS |
SHARIF & COMPANY |
|
|
|
ADVOCATES |
|
|
|
|
| FACTORY
OFFICE |
PLOT NO. 1, DEWAN
FAROOQUE INDUSTRIAL PARK, |
|
|
|
DISTRICT HARIPUR
(N.W.F.P.) |
|
|
| HEAD OFFICE |
|
DEWAN CENTRE, |
|
|
|
3-A, LALAZAR, |
|
|
|
BEACH HOTEL ROAD, |
|
|
|
KARACHI-74000. |
|
|
|
| REGISTERED
OFFICE |
DEWAN CENTRE, |
|
|
|
17, STREET-84, |
|
|
|
SECTOR G-6/4,
ISLAMABAD-44000. |
|
|
|
|
| BANKERS |
|
ABN AMRO BANK |
|
|
|
AL BARAKA ISLAMIC
INVESTMENT BANK |
|
|
|
ALLIED BANK LIMITED |
|
|
|
AMERICAN EXPRESS BANK |
|
|
|
ASKARI COMMERCIAL BANK
LIMITED |
|
|
|
BANK AL FALAH |
|
|
|
BANK OF CEYLONE |
|
|
|
BANK OF KHYBER |
|
|
|
CITIBANK N.A |
|
|
|
CREDIT AGRICOLE INDOSUEZ |
|
|
|
EMIRATES BANK
INTERNATIONAL LIMITED |
|
|
|
FAYSAL BANK LIMITED |
|
|
|
HABIB BANK LIMITED |
|
|
|
HONG KONG & SHANGHAI
BANKING CORPORATION LIMITED |
|
|
|
MASHREQ BANK LIMITED |
|
|
|
MUSLIM COMMERCIAL BANK
LIMITED |
|
|
|
NATIONAL BANK OF PAKISTAN |
|
|
|
PICIC COMMERCIAL BANK
LIMITED |
|
|
|
SOCIETE GENERALE, THE
FRENCH AND INTERNATIONAL BANK |
|
|
|
STANDARD CHARTERED BANK
PLC |
|
|
|
UNITED BANK LIMITED |
|
|
|
UNION BANK LIMITED |
|
|
|
| NOTICE
OF TWELVTH ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 12th Annual General Meeting of DEWAN
SALMAN FIBRE LIMITED |
|
| will
be held on December 31, 2001 at 4.00 p.m, at 46 Nazim-ud-din Road, F-7/4,
Islamabad, to |
|
| transact
the following business: |
|
|
| ORDINARY
BUSINESS: |
|
|
| 1.
Recitation from HOLY QURAN. |
|
|
|
|
|
|
| 2.
To read and confirm the minutes of the Eleventh Annual General Meeting held
on March |
|
| 21, 2001. |
|
|
|
|
|
|
| 3.
To receive, consider and adopt the annual audited accounts for the year ended |
|
| June
30, 2001, together with the Directors' and Auditors' Report thereon. |
|
|
| 4.
To approve issuance of Bonus Shares @ 12.5%. |
|
|
| 5.
To appoint Auditors of the Company for the year ending June 30, 2002 and to
fix their |
|
| remuneration. |
|
|
|
|
| SPECIAL
BUSINESS: |
|
|
| 6.
To consider and approve an increase in the Authorized Capital of the Company
from |
|
| Rs.3,600
million to Rs.6,300 million. |
|
|
|
| 7.
To consider and approve alterations in the Articles of Association of the
Company. |
|
|
| 8.
To transact any other business with permission of the Chair. |
|
|
|
|
|
By Order of the Board |
|
|
|
(FARRUKH S. ANSARI) |
|
|
|
|
|
| Date:
December 10, 2001 |
|
Chief Financial Officer/ |
|
| Place: Islamabad |
|
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The Shares Transfer Books of the Company will remain closed from Saturday,
December |
|
| 29,
2001 to Friday, January 4, 2002 (Both days inclusive). |
|
|
| 2.
A member entitled to attend and vote at this meeting, is entitled to appoint
a proxy |
|
| to
attend and vote on his/her behalf. A proxy must be a member of the Company. |
|
| Proxy
forms in order to be effective must be received at the Registered Office of
the |
|
| Company
located at 17-Dewan Centre, Street 84, Sector G-6/4, Islamabad duly |
|
| stamped
and signed not less than 48 hours before the meeting. |
|
|
| 3.
CDC shareholders desiring to attend the meeting are requested to bring their
original |
|
| National
Identity Card, Account and Participant's ID number and their account |
|
| number
at the time of attending the Annual General Meeting in order to facilitate |
|
| identification
of the respective shareholders. |
|
|
| 4.
Members are requested to promptly communicate to the Company any change in |
|
| their address. |
|
|
|
|
| "Statement
under Section 160 of the Companies Ordinance, 1984 is attached with the |
|
| Annual
Report circulated to the members of the Company" |
|
|
|
| STATEMENT
UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984 |
|
|
| This
statement is annexed to the Notice of the 12th Annual General Meeting of
Dewan Salman |
|
| Fibre
Limited to be held on December 31,2001 and sets out material facts concerning
the Special |
|
| Business
to be transacted at the Meeting. |
|
|
| 1.
Increase in Authorized Capital |
|
| The
Board of Directors of the Company recommends to increase the Authorized
Capital |
|
| of
the Company from Rs. 3,600 Million to Rs. 6,300 Million by creation of 270
Million Ordinary |
|
| Shares
of Rs. 10/- each. The primary objective to increase the Authorized Capital is
to cater |
|
| to
possible future requirements such as issuance of Right, Bonus Shares, fresh
issue of shares, |
|
| etc.
In this regard following Resolution is proposed to be passed, with or without
modification, |
|
| as
a "SPECIAL RESOLUTION". |
|
|
| "RESOLVED
THAT THE AUTHORIZED CAPITAL OF THE COMPANY BE AND IS HEREBY |
|
| INCREASED
FROM RS. 3,600 MILLION TO RS. 6,300 MILLION BY CREATION OF 270 |
|
| MILLION
ORDINARY SHARES OF RS. 10/- EACH AND TO EFFECT THE SAME, CLAUSE V OF |
|
| THE
MEMORANDUM OF ASSOCIATION AND ARTICLE NO. 4 (A) OF THE ARTICLES OF |
|
| ASSOCIATION
BE AND ARE HEREBY AMENDED TO READ AS FOLLOWS: |
|
|
| CLAUSE
V OF MEMORANDUM OF ASSOCIATION OF THE COMPANY. |
|
|
| THE
AUTHORIZED CAPITAL OF THE COMPANY IS RS, 6,300 MILLION (RUPEES SIX THOUSAND |
|
| THREE
HUNDRED MILLION) DIVIDED INTO 630 MILLION ORDINARY SHARES OF RS. 10/- |
|
| EACH.
THE COMPANY SHALL HAVE POWERS TO INCREASE OR REDUCE THE SHARE |
|
| CAPITAL
FROM TIME TO TIME AS IT MAY THINK PROPER AND THE SHARES FORMING THE |
|
| CAPITAL-ORIGINAL,
INCREASED OR REDUCED, MAY BE DIVIDED INTO SUCH CLASSES, |
|
| IN
ACCORDANCE WITH THE PROVISIONS OF THE COMPANIES ORDINANCE, 1984. |
|
|
| ARTICLE
NO. 4 (A) OF THE ARTICLES OF ASSOCIATION OF THE COMPANY. |
|
|
|
| THE
AUTHORIZED CAPITAL OF THE COMPANY IS RS. 6,300 MILLION (RUPEES SIX THOUSAND |
|
| THREE
HUNDRED MILLION) DIVIDED INTO 630 MILLION ORDINARY SHARES OF RS. 10/- |
|
| EACH." |
|
|
| 2.
Alteration of Articles of Association of the Company |
|
| The
Company had given special rights to Bankers Equity Limited/Asian Development
Bank |
|
| in
its Articles of Association. The provisions of Articles of Association
containing such rights |
|
| are
no longer required as the Company has paid off all its obligations towards
Bankers |
|
| Equity
Limited/Asian Development Bank. Hence it is necessary to amend the Articles
of |
|
| Association
as the subject articles have become redundant, In this regard following |
|
| Resolution
is proposed to be passed, with or without modification, as a "SPECIAL
RESOLUTION". |
|
|
| "RESOLVED
THATTHE ARTICLES 60-B AND 99-A CONTAINED IN THE ARTICLES OF ASSOCIATION |
|
| OF
THE COMPANY BE AND ARE HEREBY DELETED". |
|
|
| "THE
ARTICLE 51 CONTAINED IN THE ARTICLES OF ASSOCIATION OF THE COMPANY BE |
|
| AND
IS HEREBY AMENDED TO READ AS FOLLOWS: |
|
|
|
| THE
BOARD OF DIRECTORS SHALL CONSIST OF EIGHT (8) DIRECTORS. IF FOR ANY REASON |
|
| THERE
OCCURS A VACANCY IN 1HE BOARD OF DIRECTORS, SUCH VACANCY SHALL BE |
|
| FILLED
BY THE BOARD OF DIRECTORS". |
|
|
|
|
| DIRECTORS'
REPORT |
|
|
| Your
Directors take pleasure in presenting to you the Twelfth Annual Report of the
Company |
|
| together
with the Audited Accounts for the year ended June 30, 2001. |
|
|
| The
year under review was an eventful year for your company in which full impact
of merger |
|
| of
Dhan Fibre (Unit-IV) into your company as well as first year of commercial
operations of the |
|
| acrylic
unit are reflected. Also the synergy benefits accrued post merger in respect
of production |
|
| capabilities
also contributed significantly towards total turn over. |
|
|
| Your
company earned net profit before tax of Rs. 795.281 million after setting off
the net loss |
|
| incurred
in acrylic business of Rs. 149.149 million. |
|
|
| The
salient features of the accounts are provided below: |
|
|
|
|
(Rs. in '000) |
|
|
| * Gross Sales |
|
17,972,447 |
* Debt-- Equity Ratio |
51:49 |
|
| * Sales Tax |
|
2,371,298 |
* Current Ratio |
|
1:1.03 |
|
| * Depreciation |
|
1,240,420 |
* Earnings Per Share
(Rs.) |
2.23 |
|
| * Gross Profit |
|
2,182,529 |
* Return on Equity (%) |
14.24 |
|
| *
Operating Profit |
1,892,843 |
* Breakup Value (Rs.) |
14.63 |
|
| *
Financial Charges |
1,047,855 |
* Gross Margin (%) |
12.14 |
|
| *
Net Profit before Tax |
795,281 |
* Operating Margin (%) |
10.53 |
|
| *
Net Profit after Tax |
630,669 |
* Net Margin (%) |
3.51 |
|
|
| We
humbly and gratefully bow our heads before Almighty Allah, the most Gracious
and Merciful, |
|
| who
has rewarded and blessed your company with His innumerable bounties in these
difficult |
|
| times. |
|
|
| IF
YE GIVE THANKS, I WILL GIVE YOU MORE (AL-QURAN) |
|
|
| Your
Directors have recommended distribution of Bonus Shares at the rate of 12.5%
i.e, one Bonus |
|
| Share
for each eight Shares held for the year and are pleased to propose
appropriation of profit |
|
| in
the following manner: |
|
|
|
|
(Rs. in 000) |
|
|
|
|
| Profit
for the year 2000-2001 |
|
630,669 |
|
| Un-appropriated
profit brought forward |
|
196,626 |
|
| Transfer
from share premium account |
|
224,004 |
|
|
|
|
------------------ |
|
| Profit
available for appropriation |
|
1,051,299 |
|
|
|
|
========== |
|
|
|
|
| Appropriations |
|
|
| Reserve
for issue of bonus shares @ 12.5% |
|
378,626 |
|
| Un-appropriated
profit carried forward |
|
672,673 |
|
|
|
|
------------------ |
|
| Total |
|
|
1,051,299 |
|
|
========== |
|
|
|
| The
Board of Directors has transferred Rs. 224.004 million from Share Premium
Account for issuing |
|
| fully
paid bonus shares to the shareholders of the company. |
|
|
| REVIEW
ON ACCOUNTS |
|
| The
financial performance, for the year under review, of the company is the first
year of |
|
| combined
operating results of all four units. Hence turn over of the company increased
by 167% |
|
| over
the past year. More over, de-bottlenecking and technical upgrading activities
as reported |
|
| in
last Annual Report also brought significant impact. |
|
|
| The
negative goodwill amounting to Rs.52.011 million appearing in the Balance
Sheet represents |
|
| the
excess of fair value of the net assets acquired over the acquisition cost of
Dhan Fibres Limited |
|
| (Unit-IV)
after adjusting for the goodwill amounting to Rs. 842 million, The estimation
of fair value |
|
| of
assets was carried out by M/s Iqbal A. Nanjee & Company (a leading firm
of surveyors, valuers |
|
| and
engineering consultants recognized by financial institutions). The amount of
negative |
|
| goodwill
will be amortized over a period of 10 years. |
|
|
| Depreciation
provided for the year carries an additional charge of Rs. 90 million
resulting from |
|
| estimation
of fair value of assets of Unit-IV as prescribed by International Accounting
Standards. |
|
| Thus,
this year depreciation includes an extra Rs. 180.36 million due to
revaluation of Assets |
|
| carried
out last year and adjustment this year. |
|
|
| The
incidence of tax has increased to Rs. 164 million in the year under review
from Rs. 34 million |
|
| in
the preceding year as Unit-I, Unit-III and Unit-IV are liable to taxation.
The tax holiday for Unif- |
|
| II
will continue till June 2003. |
|
|
| FINANCIAL
OBLIGATIONS |
|
| Alhamdolillah, as always your company has fulfilled its financial obligations
on time. With |
|
| Almighty
Allah's blessings, your company has redeemed the entire
principal and interest of Euro |
|
| Convertible
Bonds (ECB) amounting to US $ 38.222 million equivalent to Rs. 2,301 million
on May |
|
| 04,
2001 i.e on its due date. |
|
|
| The
ECB were issued in the international capital market in May 1994 for an amount
of US $ 45 |
|
| million
as part of financial scheme for the company's polyester Unit-II. The ECB were
for a seven |
|
| years
tenor carrying an option of conversion to equity. It was the first such issue
from Pakistan |
|
| and
todate is the only private sector instrument in the international capital
market. Subsequent |
|
| to
the issue, an amount of US $ 7.710 million was converted into shares of the
company. |
|
| Throughout
the tenor, the company paid the coupon amount on the respective due dates. |
|
|
| The
Board wishe to place on record it's gratitude to international bondholders
for reposing their |
|
| trust
and confidence in our company. It would also wishes to thank The Ministry of
Finance, State |
|
| Bank
of Pakistan, Securities and Exchange Commission and the Bankers who lent
their support |
|
| in
the floatation and repayment of ECB. |
|
|
| The
final installment of US $ 20 million lease financing obtained from Al-Tawfeek
Company for |
|
| Investment
Funds for meeting cost of machinery and equipment for Unit-II was also
remitted on |
|
| its
due date in April 2001. |
|
|
| Your
company shall continue to follow a conservative financial profile and will
focus on meeting |
|
| its
future debt servicing requirements through its own cashflows. It intends to
accomplish this by |
|
| achieving
higher level of operational efficiencies. |
|
|
| IMPACT
OF MERGER |
|
| As
forecasted in the previous Directors' Report we are pleased to state that
with the blessing |
|
| of
Almighty Allah and the dedicated
efforts of the engineering staff the production capacity |
|
| of
polyester fibre has increased to 250,000 tons per annum. This was achieved by
applying |
|
| technology
and know-how gained over decade long experience in polyester manufacturing |
|
| process.
As a result the combined polyester fibre production increased by over 16% to
225,302 |
|
| tons
as compared to output of 193,743 tons in the preceding year. |
|
|
| The
quality and product characteristics of Unit-IV have been brought at par with
Unit-I and Unit- |
|
| II
and the discount in selling price, which was being provided prior to merger,
is gradually being |
|
| reduced. |
|
|
| The
management of the plant is now working towards further de-bottlenecking of
the capacity |
|
| and
increasing production efficiencies. Moreover, the Engineering and Technical
team has |
|
| already
developed various new varieties and are in the process to carry out this
exercise further. |
|
| The
Board is happy to report that already your company succeeded in selling about
16 different |
|
| varieties
in polyester and 10 different varieties in acrylic. The pioneering role in
developing newer |
|
| varieties
is continuously the motto of our Engineering and Technical staff. |
|
|
| FUTURE
OUTLOOK OF POLYESTER INDUSTRY |
|
| The
Chinese polyester fibre producers are aggressively expanding their capacities
thus distorting |
|
| the
regional market and trading environment. The polyester fibre capacities built
in the Far East |
|
| relying
on exports to China are reverting to distress sales in the region thus
causing excesses in |
|
| the
regional supplies and weakening the prices of polyester fibre. USA, European
Union and India |
|
| have
already imposed anti dumping duties to protect their domestic industrial
investments in |
|
| the
wake of slow down of downstream textile industry. |
|
|
| The
Chinese market has got maximum leverage over all chemical fibres as not only
they are |
|
| big
producers themselves but at the same time being the largest consumer of
chemical fibres |
|
| in
the world, they are still big importers of chemical fibres. The dynamics are
such that they are |
|
| capable
of becoming very competitive exporting country as well, The Chinese leverage
is not |
|
| just
impacting polyester and other chemical fibre industry, but it is also
dictating movement of |
|
| raw
material prices as well as downstream textile industry. |
|
|
| In
the absence of anti dumping support from the Government the local polyester
fibre prices |
|
| are
continuously under pressure, consequently exerting pressure on the already
meager margins |
|
| in
the industry. The local businesses will have to upgrade themselves to world
scale size and |
|
| improve
their efficiencies to international levels to combat the onslaught of cheap
and dumped |
|
| material.
It is a big and difficult challenge to overcome as the infrastructure,
financial and other |
|
| costs
of doing business are comparatively higher in Pakistan. Your company is
striving to combat |
|
| this
challenge by increasing efficiencies through de-bottlenecking and cross
technology synergy. |
|
|
| The
initiative taken by the Honorable Minister of Commerce to look for markets
for domestic |
|
| polyester
fibre exports, especially to china, using existing good political relations
between the |
|
| two
countries holds a ray of hope for the industry. However, this can only be
achieved if the |
|
| Government
provides supportive duty draw back regime to the industry, The Government
will |
|
| have
to comprehend this situation and should expeditiously move to avail this
window of |
|
| opportunity.
This matter assumes further significance as the expansion of Ibrahim Fibres
and ICI |
|
| is
expected to come on stream by mid of next year adding further capacity of
180,000 tons of |
|
| polyester
fibre in an already saturated market. |
|
|
| UNIT
III --ACRYLIC FIBRE AND TOW |
|
| Your
directors are pleased to report the results of first year of commercial
operations. Though |
|
| the
company has suffered a loss of Rs. 149 million before tax in it's maiden
year, the Board feels |
|
| that
the operations will improve significantly in the current year. |
|
|
| The
technical operations are running smoothly and producing high-class acrylic
fibre and tow, |
|
| both
dyed and raw white. The company is slowly and successfully penetrating the
market despite |
|
| having
to compete with the menace of dumping. Furthermore, acrylic products are
being |
|
| smuggled
in the country without any let and hindrance through the porous border of
Afghanistan. |
|
| On
the other hand, some rogue importers are getting their consignments cleared
through mis- |
|
| declaration
of C&F values, quantity and quality to evade custom levies especially at
dry ports |
|
| in
the interior of the country where custom authorities are not suitably
equipped to counter such |
|
| menace. |
|
|
| The
documentation drive of the Government and strikes by the unorganized sector
also played |
|
| its
role in the stockpiling of inventory as your company's downstream industry
operates in |
|
| unorganized
sector. |
|
|
| The
Board is confident that with the hard efforts of Technical and Marketing
staff and thorough |
|
| enhancing
technical skills for developing more and more varieties as well as cost
saving |
|
| operations
together with Government support for eradicating malpractices as enumerated |
|
| above
and above all with the blessing of Allah, your company will be able to
overcome these |
|
| difficulties
and will be able to make its acrylic operations contributing to profits of
the company. |
|
|
| TARIFF
PROTECTION AND FISCAL ISSUES |
|
|
|
| Polyester
Fibre Industry |
|
| In
the previous budget the tariff regime for polyester fibre was retained and
subsequently |
|
| Government
excluded polyester fibre from the ambit of Duty and Tax Remission for Export
(DTRE) |
|
| scheme. |
|
|
| On
the other hand the Government announced a phased reduction in the duty draw
back rates |
|
| applicable
to domestic consumption of polyester fibre for export purposes. APTMA has
made |
|
| a
representation to the Government for review of the decision. The polyester
fibre producers |
|
| also
support their viewpoint and urge the Government to restore the drawback rates
to previous |
|
| level.
However in order to enable local industry to compete internationally the
Government |
|
| should
take note of duty drawbacks made available to the competing countries. For
example |
|
| in
India where the entire chemical chain is available locally the Government is
providing duty |
|
| drawback
to the textile industry at 13% of FOB value, equal to Pakistani Rs. 12. T0
per kg. of |
|
| polyester
fibre, although no duty is collected by the state in the value addition
process. |
|
|
| If
the Government wishes to achieve the targets laid down in its 'Fibre Vision
2005' it will have |
|
| to
take bold steps for providing supportive export policy as well providing due
protection to the |
|
| local
industry from the unrealistic competition from abroad and menace of dumping. |
|
|
| The
Government should implement multiple duty slabs in the next budget to
accommodate |
|
| various
steps in the value addition chain. It is indicated that the top duty rate
will come down |
|
| to
25% in the forthcoming budget. The Government should freeze the current
tariff regime |
|
| available
to polyester industry for a period of five years to provide certainty and if
it wishes to |
|
| induct
further polyester fibre capacity as envisaged in the 'Fibre Vision 2005'. |
|
|
| Acrylic
Fibre Industry |
|
| Instead
of providing support to the fledgling industry the import duty was reduced to
20% in the |
|
| last
budget thus adding further miseries in our first year of operation. The
industry has been |
|
| suffering
world wide from recession and the menace of dumping and due to this fact
several |
|
| countries
like India, Indonesia and Malaysia have responded by levying harsh anti
dumping |
|
| duties
whereas the Government of Pakistan is turning deaf ear to our requests for
protection |
|
| instead
of imposing punitive antidumping duties on rogue exporters. We strongly urge
the |
|
| Government
to atleast bring the acrylic fibre and tow duty to 25% i.e. in line with the
duty on |
|
| polyester fibre, |
|
|
| In
the past, Government had provided high protective duties to polyester fibre
industry which |
|
| enabled
it to prosper and grow from a modest capacity of 12,000 tons in 1982 to over
425,000 |
|
| tons
in 2001. Similarly, the acrylic industry should also be provided with a
supportive tariff so that |
|
| it
can replicate the success of polyester industry in the country. Large-scale
acrylic industry would |
|
| not
0nly boost the development of downstream textile and worsted industry but
also develop |
|
| newer
products for local and export market. |
|
|
| Furthermore,
there is very high import duty of 20% on dyestuff being used to produce dyed
fibre |
|
| and
tow, thereby leaving no protection to these products which comprise almost
90% of the |
|
| market.
The Government should reduce the duty on dyestuff to the level that is
available for |
|
| primary
raw materials. As none of the dyestuff is produced locally therefore
reduction in duty |
|
| will
not pose any threat to local industry. |
|
|
| In
the last budget the Government has levied 20% sales tax on polyester fibre,
its raw materials, |
|
| acrylic
fibre and tow and its raw materials instead of 15% applicable generally on
all other |
|
| products.
This is causing another setback in the growth of chemical fibres particularly
our acrylic |
|
| business.
Yet there is another discrepancy in respect of acrylic products where the
rate of sales |
|
| tax
is 20% whereas on the import of acrylic tops the rate applicable is 15%,
Acrylic tow and tops |
|
| are
similar products where through a small and simple process tow is converted to
tops, This has |
|
| provided
opportunities to such rogue importers who are not utilizing their sales tax
payments |
|
| in
value added chain and have got an incentive to further manipulate on this
discrepancy. We |
|
| strongly
urge the Government to review the rate of 20% sales tax on the acrylic fibre
and tow |
|
| and
bring it down to 15% as is in the case of other products. |
|
|
| CONTRIBUTION
TO NATIONAL EXCHEQUER |
|
| During
the year, your Company's contribution to the National Exchequer amounted to
about |
|
| Rs.
3,655.063 million in respect of payments under Sales Tax, Custom Duty and
other statutory |
|
| levies
as well as tax deducted from payments made to employees, suppliers and
contractors, |
|
|
| VOTE
TO THANKS |
|
| The
Board places on record its gratitude to its valued shareholders, Federal and
Provincial |
|
| Government
functionaries, banks, financial institutions and customers of Salsabil, whose |
|
| cooperation,
continued support and patronage have enabled the company to achieve the |
|
| desired results. |
|
|
| The
Board also expresses its appreciation for the valuable services, loyalty and
laudable efforts |
|
| continuously
rendered by the executives, staff members and workers of the company. It |
|
| recognizes
that they are the most valuable assets of the company. The Board also
appreciates |
|
| the
efforts of those executives, staff members and workers of Unit-IV who decided
to continue |
|
| with
the new management and worked wholeheartedly for achieving the targets and
integrating |
|
| into
the company. |
|
|
| AUDITORS |
|
| The
Auditors of the Company, M/s. Faruq Ali and Company, Chartered Accountants
and M/s. |
|
| Feroze
Sharif Tariq and Company, Chartered Accountants, retire and offer their
services for re- |
|
| appointment
for the ensuing year. |
|
|
| CONCLUSION |
|
| In
conclusion, we bow, beg and pray to Almighty Allah,
Rahman-e-Rahim, in the name of our |
|
| beloved
prophet, Muhammad, peace be upon him, for continued showering of His Blessings, |
|
| Guidance,
Strength, Health and Prosperity on us, our company, Country and Nation: and
also |
|
| pray
to Almighty Allah to bestow peace,
harmony, brotherhood and unity in true Islamic spirit |
|
| to
the whole of Muslim Ummah, Ameen, Summa-Ameen. |
|
|
| LO-MY
LORD IS INDEED HEARER OF PRAYER (HOLY QURAN) |
|
|
|
|
|
|
For and on behalf of the Board of Directors |
|
|
|
DEWAN ZIA-UR-REHMAN FAROOQUI |
|
| Islamabad:
30th November 2001 |
|
|
President / Chief Executive |
|
|
