KOHINOOR OIL MILLS LIMITED
ANNUAL REPORT 2004
COMPNAY INFORMATION
BOARD OF DIRECTORES
Chairman			Mr. Jai Parkash
Chief Executive/
Managing Director			Haji Iqbal Khan Afridi
Directors			Maj. General (R) Saeed Ahmed Wahla
			Col. (R) Asghar All Malik
			Hafiz Muhammad Arshad
			Mian Muhammad Rashid
			Mr. Muhammad Ayaz Khan
Chief Accountant/
Company Secretary			Iftkhar Ahmad Javed
Auditors			Azhar Zafar & Company
			Chartered Accountants
Bankers			National Bank of Pakistan.
			United Bank Limited.
Registered Office &			G.T. Road,
Factory			Kala Shah Kaku
DIRECTORS' REPORT TO THE SHAREHOLDERS
Dear Shareholders
On behalf of the directors of the company, audited balance sheet as on June 30, 2004 and the profit
& loss account for the year ended as on that date are presented for consideration.
During the period under report, there was no production of vegetable ghee as the operation of the
company had been closed since September 1997 under the orders of government of Pakistan for its
privatization.
The company sustained a net loss of Rs. 1 .764 million during the period under review as against Rs.
4.745 million during the corresponding period last year (decrease of 63 %). The loss for the period
mainly comprised insurance, depreciation and administrative expenses amounting to Rs. 0.254
million, Rs. 0.260 million and 1.225 million respectively. All the unit's employees were relived
under VSS/GHS. All the assets of the company lying in the unit were intact and to ensure safe
custody of these assets, security arrangements had been improved and a well reputed security
company had been assigned the entire security of the unit. During the period under review, Ghee
Corporation of Pakistan (a holding company) had met all the unit's expenses pertaining to watch &
ward, insurance and administrative expenses. The GCP had also not charged mark up on the
outstanding balance during this financial year.
				Rs.in Thousand
FINANCIAL RESULTS				2004	2003
Operating loss				1,764	4,745
Loss before taxation				1,764	4,745
Loss after taxation				1,764	4,745
Accumulated loss B/F				1,389,783	1,385,038
Accumulated loss C/F				1,391,547	1,389,783
STATEMENT IN COMPLIANCE OF
CODE OF CORPORATE GOVERNANCE
The Board of Directors of Kohinoor Oil Mills Limited is pleased to state that we have adopted the
code of corporate governance, and all necessary actions have been taken for all applicable and
relevant clauses and Board agreed to take care of the remaining clauses as and when applicable.
As required by the code, it is stated that:
The following statements prepared by the management of your company present a fairly its state of
affairs, the result of its operations cash flows and changes in equity.
Proper books of accounts have been maintained by your company.
Appropriate accounting policies are consistently applied by your company in preparation of
financial statements and accounting estimates are based on reasonable and prudent judgement.
International accounting standards as applicable in Pakistan have been followed in the preparation
of these financial statements and any departure there from, if any, has adequately been disclosed.
The company's current liabilities exceed its current assets by Rs. 1389.180 million which shows
that the company is no more a going concern.
There has been no material departure from the best practices of corporate governance as detailed in
the listing regulations.
KEY OPERATING & FINANCIAL DATA Following is the key operating and financial data for your company for the last six years :
					Rs. in Thousand
	2004	2003	2002	2001	2000	1999
Sales	-	-	-	-	-	-
Cost of goods sold	-	-	-	-	-	-
Operating loss	1764	4745	5627	73933	77582	42167
Loss before taxation	1764	4745	5627	73933	77582	42167
Loss after taxation	1764	4745	5627	73933	77582	42167
Paid up capital	5239	5239	5239	5239	5239	5239
Total assets	40538	41023	44518	44992	45448	45161
Total liabilities	1426847	1425567	1424317	1425995	1352518	1271146
Current assets	37667	37856	41025	41125	41176	41438
Current liabilities	1426847	1425567	1424317	1425995	1352518	1271146
MEETING OF BOARD OF DIRECTORS
During the period under review, the meeting of the Board of Directors were held on:-
(i)   22nd September 2003               (ii)   27th October 2003        (iii)   25th February 2004
(iv) 27th April 2004
The attendance of the Directors was as follows :-
Major General (Retd) Muhammad Mohsin			2
Major General (Retd) Zafar Abbas			2
Mr. Muhammad Aslam			4
Miss Zahida Alvi			4
Mr. ShahidAmin			4
Mr. T. I. Chaughtai			2
Mr. Abdul Manan			2
Mr. Mumtaz Hussain Balouch			4
Mr. ImranAzeem
The directors not attending the meeting were granted leave of absence in accordance with the law.
DIVIDEND
Due to huge accumulated loss and loss in current year, no dividend is recommended by the Board
for the period under review .
OUTSTANDING STATUTORY PAYMENTS
There is no outstanding statutory payments on account of taxes, duties, levies and charges.
PROVIDENT FUND AND GRATUITY FUND
The company is not operating Provident Fund and Gratuity Fund Schemes because all the unit's
employees had already been relieved under VSS/GHS .
AUDITORS
M/s Azhar Zafar & company, Chartered Accountants, the retiring auditors have completed five
years as statutory auditors of Kohinoor Oil Mills Limited. Under listing regulation No. 37 of Stock
Exchange containing the "code of corporate governance" a listing company is required to change
their external auditors every five years. If for any reason, this is impractical, the company should
obtain the consent for the appointment of auditors from Securities & Exchange Commission of
Pakistan.
In view of the above regulation and the transfer of management of the company to the new owner
and appointment of the new Directors, it is proposed that the appointment of external auditors for
the financial year 2004-05 should be left to be decided by the newly constituted Board of Directors
representing the new owner.
AUDIT COMMITTEE
The operations of the company had been closed since September 1997 by the orders of Government
of Pakistan for its privatization. All employees were relieved under GHS/VSS. The company has
been privatized by the Government of Pakistan on 24th July, 2004. Therefore, the Board of
Directors has not recommended to establish Audit Committee.
PATTERN OF SHAREHOLDING
The statement of pattern of shareholding of the company as at June 30, 2004 is given with the
annexed annual report hi accordance with the code of corporate governance.
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of KOHINOOR OIL MILLS LIMITED as at June 30,
2004 and the related profit and loss account, cash flow statement and statement of changes in equity
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 .
It is the responsibility of the company's management to establish and maintain a system of internal
control, and prepare and present the above said statements in conformity with the approved
accounting standards and the requirements of the Companies Ordinance, 1984. Our responsibility is
to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These
standards require that we plan and perform the audit to obtain reasonable assurance about whether
the above said statements are free of any material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the above said statements. An audit
also includes assessing the accounting policies and significant estimates made by management, as
well as, evaluating the overall presentation of the above said statements. We believe that our audit
provides a reasonable basis for our opinion and, after due verification, we report that:
a)       The company during the year has incurred a loss of Rs. 1 .764 million and has accumulated
losses up to Rs. 1,391.547 million as on the balance sheet date, which has eroded the capital and
equity and is showing a negative figure of Rs. 1,386.305 million. The company's current liabilities
are Rs. 1,426.846 million in comparison with current assets of Rs. 37.667 million. As a result of
Government decision to privatize the company, the management discontinued its operations in
1997. As a consequence, funding arrangements from the Federal Government where withdrawn.
The revival of its status is not possible due to the Government of Pakistan's policy of privatization of
state owned units. These factors clearly demonstrate that the company is not a going concern.
Consequently, these   accounts do not include any adjustments relating to the recover ability,
classification of the recorded assets amount and classification of liabilities that might result should
the company not be able to continue as a going concern and therefore may be unable to realize its
assets or discharge its liabilities in the normal course of business. The financial statements however,
do not include any adjustment to that effect.
b)       Amount due to Government of Pakistan amounting to Rs. 1 ,420.617 million as referred to in
Note 10 remained unverified and unconfirmed.
c)       Provision amounting to Rs . 4 . 24 1 million as referred to in Note 1 3 regarding embezzlement
from National Bank of Pakistan, Namak Mandi Branch, Rawalpindi has been made and shown
under the head "Current Liabilities" as against deduction from the relevant asset as required under
the Fourth Schedule of Companies Ordinance, 1984. Investigation for the embezzlement is
presently pending with Government Agencies.
KOHINOOR OIL MILLS LIMITED
Balance Sheet as on June 30, 2004
			Note	2004	2003
				Rupees	Rupees
NON CURRENT ASSETS
Fixed Assets - Tangible			3	2,798,175	3,092,998
Security Deposits				73,129	73,129
				2,871,304	3,166,127
CURRENT ASSETS
Stores and Spares			4	5,652,705	5,652,705
Stock in Trade			5	3,011,032	3,011,032
Trade Debtors			6	2,262,192	2,262,192
Advances, Deposits, Pre-
Payments and Receivables			7	22,496,982	22,685,890
Cash and Bank Balances			8	4,244,098	4,244,848
				37,667,009	37,856,667
				40,538,313	41,022,794
CAPITAL AND RESERVES
SHARE CAPITAL
Authorised:-
2,000,000 Ordinary Shares
of Rupees 10/- each.				20,000,000	20,000,000
Issued, Subscribed and
paid up:-			9	5,239,160	5,239,160
ACCUMULATED LOSS				-1,391,547,675	-1,389,783,616
				-1,386,308,515	-1,384,544,456
CURRENT LIABILITIES
Due to Government of Pakistan			10	1,420,617,893	1,049,488,000
Due to Ghee Corporation
of Pakistan (Private) Limited			11	1,239,577	371,129,892
Creditors, Accrued and Other
Liabilities			12	748,034	708,034
Provision For Embezzled
Amount-NBP Rawalpindi			13	4,241,324	4,241,324
				1,426,846,828	1,425,567,250
CONTINGENCIES AND
COMMITMENTS			14	-	-
				40,538,313	41,022,794
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2004
			NOTE	2004	2003
				Rupees	Rupees
Expenditure of In-operative Unit			15	514,512	550,845
Administrative and General Expenses			16	1,225,155	4,184,689
Financial Charges			17	24,392	22,915
LOSS BEFORE OTHER INCOME				-1,764,059	-4,758,449
OTHER INCOME				_	13,073
				-1,764,059	-4,745,376
PRIOR YEAR'S ADJUSTMENTS-Credit/ (Debit)			18	-	-
				-1,764,059	-4,745,376
LOSS - BROUGHT DOWN				-1,389,783,616	-1,385,038,240
LOSS CARRIED TO THE BALANCE SHEET				-1,391,547,675	(1,389,783,6161
BASIC EARNING PER SHARE			19	-3.37	-9.06
CASH FLOW STATEMENT
FOR THE YEAR ENDED JUNE 30,2004
				2004	2003
				Rupees	Rupees
CASH FLOW FROM OPERATING ACTIVITIES
Loss before taxation				-1,764,059	-4,745,376
Adjustment for Items not involving
movement of cash:
Depreciation				294,824	326,989
Other Income					-13,073
Provision for doubtful debts					2,981,590
Bonus gifts — Ex-employees					269,630
				-1,469,235	-1,180,240
MOVEMENT IN WORKING CAPITAL
(Increased/Decrease in Current Assets
Trade Debtors				-	-
Advances, Deposits, Prepayments
& Receivables				188,908	-69,879
				188,908	-69,879
Increase/(Decrease) in Current Liabilities
Due to Government of Pakistan				371,129,892	-
Due to Ghee Corp. of Pakistan (Pvt.) Ltd.				-369,890,315	1,237,592
Creditors, Accrued & Other Liabilities				40,000	11,927
				1,279,577	1,249,519
NET CASH FLOW FROM OPERATING ACTIVITIES				-750	-600
Financial Charges Paid				-
CASH FLOW FROM INVESTING ACnVITIES
Sale of Vehicles				-
NET CASH FROM INVESTING ACTIVITIES				-	-
CASH FLOW FROM FINANCING ACTIVITIES				_	.
NET CASH FROM FINANCING ACTIVITIES				-	-
NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS				-750	-600
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE YEAR				4,244,848	4,245,448
CASH AND CASH EQUIVALENTS AT THE END
OF THE YEAR				4,244,098	4,244,848
STATEMENT OF CHANGES IN EQUITY
for the year ended June 30, 2004
		Share	General	Accumulated
		Capital	Reserve	Profit/ (Loss)	Total
		Rupees	Rupees	Rupees	Rupees
Balance as at
June 30, 2002		5,239,160	-	-1,385,038,240	-1,379,799,080
Profit/ (Loss) for the year		-	-	-4,745,376	-4,745,376
Balance as at
June 30, 2003		5,239,160	-	-1,389,783,616	-1,384,544,456
Profit/ (Loss) for the year		-	-	-1,764,059	-1,764,059
Balance as at