| Bela Engineers Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| CORPORATE
PROFILE |
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| NOTICE
OF MEETING |
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| CHAIRMAN
AND DIRECTORS' REPORT |
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| AUDITORS'
REPORT |
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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 SHAREHOLDINGS |
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| CORPORATE
PROFILE |
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| BOARD
OF DIRECTORS |
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| Chairman |
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ZAHID HUSSAIN |
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|
Chairman, |
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PIDC (Pvt) Ltd. |
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| Directors |
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NASIM BEG |
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Company Secretary |
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National Investment Trust
Ltd. |
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SHAIKH BASHIR AHMED |
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Dy. Secretary |
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Ministry of Industries
& Production |
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Govt. of Pakistan,
Islamabad. |
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ABDUL BARI KHAN |
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General Manager (F &
A / A & P) |
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PIDC (Pvt) Ltd. |
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SAROSH YOUSUFI |
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General Manager (Projects
/ Operations) |
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PIDC (Pvt) Ltd. |
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MUHAMMAD IBRAHIM DODA |
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362, Doda House, Bakra
Piri, |
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Mewa Shah Road, |
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Madina Masjid Street,
Karachi. |
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| CHIEF
EXECUTIVE |
MUHAMMAD SAEED |
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|
Chief Executive |
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Bela Engineers Limited |
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| COMPANY
SECRETARY |
SYED ABRAR HUSSAIN RAZVI |
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| AUDITORS |
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M/S. HAFIZULLAH &
CO., |
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Chartered Accountants |
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| REGISTERED
OFFICE |
2ND FLOOR, PIDC HOUSE, |
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DR. ZIAUDDIN AHMED ROAD, |
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KARACHI.75530 |
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| FACTORY |
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HUB CHOWKI ROAD, |
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VILLAGE BAROOT, |
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DISTRICT LASBELA,
BALUCHISTAN. |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the 28th Annual General Meeting of Bela Engineers
Limited |
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| will
be held at Pakistan Institute of Management (PIM), Clifton, Karachi on
Friday, |
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| the
28th January, 2000 at 09:00 A.M. to transact the following business:- |
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| 1.
To confirm minutes of the 27th Annual General Meeting held on 30 November
1998. |
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| 2.
To receive, consider and ad. opt the Audited Accounts of the Company for the |
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| year
ended 30th June, 1999, together with the Directors' and Auditors' Reports |
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| thereon. |
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| 3.
To appoint Auditors for the year ending 30th June, 2000 and to fix their |
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| remuneration.
The Present Auditor M/s. Hafizullah & Company, Chartered |
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| Accountants,
being eligible, offer themselves for reappointment. |
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| 4.
Special Business |
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| The
Auditors of the Company in their report to the members have expressed |
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| doubts
whether the Company will be able to continue as a going concern due |
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| to
the fact that the Company's accumulated loss was Rs. 205.807 million and |
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| its
total liabilities exceeded its total assets by Rs. 159.389 million as on 20th |
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| June, 1999. |
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| The
Board of Directors discussed the affairs of the Company in its meeting |
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| held
on 26th November, 1999. It was of the opinion that the Company's operations |
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| are
no longer viable and to continue its operations or its existence will further |
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| deteriorate
the Company's financial 'position. The Company is no longer able |
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| to
continue as a 'going concern' in view of its huge accumulated losses,
negative |
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| net
worth of Rs. 159.389 million against the paid-up capital of Rs. 34.0 million |
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| and
its inability to discharge its liabilities, including the Decreed amount |
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| of
Rs. 68.6 million arising out of a Decree granted by the Hon'ble High Court |
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| of
Sindh against the Company in favour of commercial banks viz; Habib Bank |
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| Limited
and United Bank Limited. As such the Board has recommended to |
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| consider
Company's liquidation and proposed to pass the following Resolution |
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| for
winding up/liquidation of the Company with or without any modification:- |
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| RESOLUTION: |
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| RESOLVED
THAT the consent of the company be and is hereby accorded |
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| to
the Board of Directors of the Company to present a petition to the Hon'ble |
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| High
Court of Sindh Karachi for winding-up the Company by the Court, under |
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| section
305 of Companies Ordinance, 1984, from such date as it may determine. |
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| RESOLVED
FURTHER THAT the Chief Executive of the Company, Mr. Muhammad |
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| Saeed,
be and is hereby authorised to make a petition under Section 309 of |
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| the
Companies Ordinance, 1984 and also to execute all necessary application/ |
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| documents
as may be required in this regard from time to time and to take |
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| or
cause to take such other action(s) as may be deemed necessary in this |
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| regard. |
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BY ORDER OF THE BOARD |
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SYED ABRAR HUSSAIN RlZVl |
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Company Secretary |
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| NOTES: |
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| 1.
The Share Transfer Books of the Company will remain closed from 21-01-2000 |
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| to
28-01-2000 (Both days inclusive). |
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| 2.
A member entitle to attend and vote at the meeting may appoint another member |
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| as
his/her Proxy to attend and vote for him/her. Proxies in order to be
effective |
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| must
be received by the Company not less than 48 hours before the meeting. |
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| 3.
Shareholders are requested to notify the Company of any change in their
address. |
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| Karachi
26th November 1999. |
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| CHAIRMAN
AND DIRECTORS' REPORT |
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| The
Audited Accounts of the Company for the year ended 30th June, 1999 alongwith
Auditors' |
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| Report
thereon are hereby presented. |
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| Since
the closure of assembly of Bedford/Issuzu Engines for National Motors Ltd.
w.e.f. |
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| 30-05-1991,
the Company practically had no business. However, subsequently, the Company |
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| started
assembling of engines for Sindh Engineering Ltd. (SEL) at their premises. |
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| As
compared to revenue of Rs. 5.411 million during the last year, the net
revenue during |
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| the
year under review stood at Rs. 6.101 million witnessing an increase of 12.75%
which was |
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| mainly
on a account of assembly charges received from SEL. |
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| PROFITABILITY |
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| Due
to adjustment made in the Books of Accounts during the year under review
amounting |
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| to
Rs. 62.846 million pursuant to the Order dated 9.9.1998 of the Hon'ble High
Court of Sindh |
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| wherein
short term borrowings from Banks have been reduced, the Company had earned
profit |
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| of
Rs. 50.709 million after taxation. However, the adjustment did not generate
cash funds or |
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| improved
liquidity position of the Company. Only the loan liabilities to be settled as
a result of |
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| decree
granted by the Hon'ble High Court of Sindh to the Bank will reduce.. |
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| PATTERN
OF SHARE HOLDINGS |
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| The
pattern of share holdings is given on Page-20 of the Annual Report of the
Company |
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| for
the year ended 30th June, 1999. |
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| AUDITORS |
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| The
present Auditors of the Company, M/s. Hafeezullah & Company, Chartered
Accountants, |
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| retired
and being eligible have offered themselves for reappointment as Auditors of
the Company |
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| for
the year ending 30th June, 2000. The Board of Directors has recommended their
reappiontment |
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| at
the existing remuneration of Rs. 25,000/=. |
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| FUTURE
/ LIQUIDATION |
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| The
Auditors of the Company in their report to the members have expressed doubts
whether |
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| the
Company will be able to continue as a going concern due to the fact that the
Company's |
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| accumulated
loss was Rs. 205.807 million and its total liabilities exceeded its total
assets by Rs. |
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| 159.389
million as on 30-06-1999. |
|
|
| The
Board of directors discussed the affairs of the company and of the opinion
that the |
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| Company's
operations are no longer viable and to continue operations or its existence
will further |
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| deteriorate
the Company's financial position. The Company is no longer able to continue
as a |
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| 'going
concern', as such the Board has recommended to consider Company's liquidation
and |
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| proposed
to pass a Special Resolution in this connection by the shareholders in the
28th Annual |
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| General
Meeting schedule to be held on 28th January, 2000. |
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|
FOR AND ON BEHALF OF THE BOARD |
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| Dated,
the 26th November, 1999. |
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Chairman |
|
Chief Executive |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed Balance Sheet of M/S. BELA ENGINEERS LIMITED as |
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| at
30th June, 1999 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 obtained |
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| all
the information and explanations which to the best of our knowledge and
belief were necessary |
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| for
the purposes of our audit, and after due verification thereon, except for the
matter discussed |
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| in
the paragraph 'C' we report that : |
|
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| (a)
In our opinion, proper books of account have been kept by the Company as
required |
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| 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, and are |
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| in
agreement with the books of account and are further in accordance with
accounting |
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| policies
consistently applied; |
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|
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| (ii)
the expenditure incurred during the year was for the purpose of Company's
business; and |
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| (iii)
the business conducted, investments made and the expenditure incurred during
the |
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| year
were in accordance with the objects of the Company; |
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| (c)
As shown in the financial statement, the company earned a net profit of Rs.
50.709 million |
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| during
the year ended 30th June, 1999 due to credits pertaining to prior periods,
still, |
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| as
of that date the amount of accumulated loss is Rs. 205.807 million and the
company's |
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| current
liabilities exceeded its current assets by Rs. 164.388 million and its total
liabilities |
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| exceeded
its total assets by Rs. 159.389 million. These factors raise doubt whether |
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| the
company will be able to continue as a going concern. The financial statements
do |
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| not
include any adjustments relating to the recoverability and classification of
liabilities |
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| that
might be necessary should the company be unable to continue as a going
concern. |
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|
| (d)
In our opinion, except for the effects of such adjustments, if any, as might
have been |
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| required
had the out come of the uncertainty referred to in the preceding paragraph |
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| been
known, the balance sheet and profit and loss account and cash flow statement |
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| together
with the notes forming part thereof, give the information required by the
Companies |
|
| Ordinance,
1984, in the manner so required and give a true and fair view of the state |
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| of
the Company's affairs as at 30th June, 1999 and of the profit for the year
then ended; |
|
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| (e)
In our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
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| (f)
Honorable High Court of Sindh in its judgement passed on 09-09-1998 awarded a
decree |
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| for
an amount of Rs. 51.073 million in favour of UBL in respect of suit No.
413/98. The |
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| above
decrees have been awarded against their claim payable by the Company of
higher |
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| amount
of loans as described in Notes No. 7.1 and 8.1 |
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| Karachi: |
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HAFIZULLAH & CO. |
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| Dated:
26th November, 1999. |
|
Chartered Accountants |
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|
| BALANCE
SHEET AS AT 30TH JUNE, 1999 |
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|
NOTE |
1999 |
1998 |
|
|
|
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|
(Rs. in
"000") |
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| CAPITAL
& LIABILITIES |
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|
| CAPITAL
& RESERVES |
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|
| SHARE CAPITAL |
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|
3 |
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| AUTHORISED |
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|
3.1 |
60,000 |
60,000 |
|
|
|
|
|
========== |
========== |
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| ISSUED,
SUBSCRIBED & PAID-UP |
|
3.2 |
34,000 |
34,000 |
|
| RESERVES |
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|
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|
| Capital Reserve |
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|
4 |
4,418 |
4,418 |
|
| General Reserve |
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|
5 |
8,000 |
8,000 |
|
| Accumulated
Loss |
|
|
|
(205,807) |
(256,516) |
|
|
|
|
------------------ |
------------------ |
|
|
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|
(159,389) |
(210,098) |
|
| DEFERRED
LIABILITIES |
|
|
|
| Gratuity and Leave Salary |
|
|
6 |
5,288 |
6,710 |
|
|
|
|
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|
| CURRENT
LIABILITIES |
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|
|
| Short
Term Borrowings |
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|
7 |
135,510 |
153,801 |
|
| Creditors,
Accrued & |
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|
| Other Liabilities |
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|
8 |
61,735 |
95,285 |
|
| Deposits & Advances |
|
|
9 |
356 |
356 |
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| Taxation |
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|
10 |
12,799 |
12,260 |
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|
------------------ |
------------------ |
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|
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|
210,400 |
261,702 |
|
| CONTINGENCIES & COMMITMENTS |
|
11 |
-- |
-- |
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|
------------------ |
------------------ |
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|
56,299 |
58,314 |
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|
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|
========== |
========== |
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| PROPERTY & ASSETS |
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| FIXED ASSETS |
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| (At Cost Less |
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| Accumulated
Depreciation) |
|
12 |
9,927 |
10,939 |
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|
| LONG
TERM INVESTMENTS |
|
13 |
-- |
500 |
|
| LONG
TERM LOANS AND ADVANCES |
|
14 |
185 |
185 |
|
| LONG
TERM DEPOSITS, |
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|
| PRE-PAYMENTS
AND DEFERRED COSTS |
|
15 |
175 |
181 |
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|
| CURRENT
ASSETS |
|
|
|
| Stores,
Spares & Loose Tools |
|
16 |
7,394 |
7,402 |
|
| Stock-in-Trade |
|
17 |
32,822 |
32,845 |
|
| Trade Debtors |
|
18 |
952 |
1,142 |
|
| Loans
& Advances |
|
19 |
4,140 |
4,651 |
|
| Deposits
& Pre-Payments |
|
20 |
5 |
5 |
|
| Other
Receivables |
|
21 |
163 |
249 |
|
| Cash
& Bank Balances |
|
22 |
536 |
215 |
|
|
|
|
------------------ |
------------------ |
|
|
46,012 |
46,509 |
|
|
------------------ |
------------------ |
|
|
56,299 |
58,314 |
|
|
|
|
========== |
========== |
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| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
|
| Karachi
26th November 1999. |
|
|
|
Chief Executive |
|
Chairman |
|
HAFIZULLAH & CO. |
|
|
Chartered Accountants |
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30TH JUNE, 1999 |
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|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
(Rs. in
"000") |
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|
|
|
| SALES |
|
23 |
6,101 |
5,411 |
|
| LESS
: Cost of Sales |
|
24 |
3,985 |
3,941 |
|
| GROSS
PROFIT |
|
|
2,116 |
1,470 |
|
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| Administration
& General Expenses |
|
25 |
3,855 |
3,330 |
|
| Selling
& Distribution Expenses |
|
26 |
224 |
371 |
|
| Financial
Charges |
|
27 |
11,355 |
13,919 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
15,434 |
17,620 |
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
LOSS |
|
|
(13,318) |
(16,150) |
|
| OTHER
INCOME |
|
28 |
77 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| LOSS
BEFORE TAXATION |
|
|
(13,241) |
(16,150) |
|
| PRIOR
PERIOD ADJUSTMENTS |
|
29 |
63,980 |
82 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
50,739 |
(16,068) |
|
|
|
|
|
| TAXATION
- CURRENT |
|
|
(30) |
(27) |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
/ (LOSS) AFTER TAXATION |
|
|
50,709 |
(!6,095) |
|
| ACCUMULATED
LOSS BROUGHT FORWARD |
|
|
(256,516) |
(240,421) |
|
|
|
|
------------------ |
------------------ |
|
| ACCUMULATED
LOSS CARRIED FORWARD |
|
|
(205,807) |
(256,516) |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral |
|
| part
of these accounts. |
|
|
|
Chief Executive |
|
Chairman |
|
|
| Karachi
26th November, 1999. |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30TH JUNE, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
(Rs. in
"000") |
|
|
|
|
| Net
Profit/(Loss) for the year |
|
|
50,709 |
(16,095) |
|
|
|
|
| (Add)
/ Deduct non Cash charges |
|
|
| Depreciation |
|
|
|
1,066 |
1,179 |
|
| Gain
on Sale of Long Term Investment |
|
|
75 |
-- |
|
| Gratuity
and Leave Salary Provided - net |
|
|
585 |
510 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,726 |
1,689 |
|
|
|
|
------------------ |
------------------ |
|
| CASH
USED BEFORE WORKING CAPITAL CHANGE |
|
52,435 |
(14,406) |
|
|
|
|
|
|
| CASH
GENERATED/USED DUE TO WORKING CAPITAL CHANGE |
|
| Stores
and spares |
|
|
|
8 |
4 |
|
| Stock in trade |
|
|
23 |
97 |
|
| Debtors |
|
|
190 |
(182) |
|
| Loans
and advances |
|
|
511 |
3 |
|
| Deposits
and prepayments |
|
|
-- |
61 |
|
| Other
receivables |
|
|
86 |
(46) |
|
| Short
Term Borrowings |
|
|
|
(18,291) |
-- |
|
| Creditors,
Accrued and other liabilities |
|
|
(33,550) |
13,273 |
|
| Deposits
and Advances |
|
|
|
-- |
(40) |
|
| Taxation |
|
|
539 |
455 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(50,484) |
13,625 |
|
|
|
|
------------------ |
------------------ |
|
| CASH
USED IN OPERATION |
|
|
1,951 |
(781) |
|
|
|
|
|
|
|
| CASH
INFLOW/(OUTFLOW) DUE TO INVESTING ACTIVITIES |
|
| Gratuity
and Leave Salary Paid - net |
|
|
(2,008) |
-- |
|
| Long
term deposits |
|
|
|
6 |
5 |
|
| Sale
Proceeds of Long Term Investment |
|
|
425 |
-- |
|
| Long
Term Loans and Advances |
|
|
|
-- |
540 |
|
| Acquisition
of Fixed Assets |
|
|
|
(53) |
(21) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(1,630) |
524 |
|
|
|
|
------------------ |
------------------ |
|
| CASH
AND ITS EQUIVALENT AT THE END OF YEAR |
|
321 |
(257) |
|
| CASH
AND ITS EQUIVALENT AT BEGINNING OF YEAR |
|
(153,585) |
(153,328) |
|
|
|
|
|
|
------------------ |
------------------ |
|
| CASH
AND ITS EQUIVALENT AS PER BALANCE SHEET |
|
(153,264) |
(153,585) |
|
|
|
|
========== |
========== |
|
|
|
Chief Executive |
|
Chairman |
|
|
|
|
| Karachi
26th November, 1999. |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED 30TH JUNE, 1999. |
|
|
| 1.0
THE COMPANY AND IT'S OPERATIONS |
|
| Bela
Engineers Limited is a Public Limited Company (State Enterprise) quoted on
Stock |
|
| Exchanges
in Pakistan. The Company is engaged in Manufacture and Sale of diesel
engines. |
|
| The
Company was initially incorporated as Private Limited Company in 1970 as
Ghandhara |
|
| Diesels
Limited and was subsequently converted into Public Limited Company in 1971. |
|
| It
was taken over by the Government under Economic Reforms Order of 1972. |
|
|
| 2.0
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
| 2.1
ACCOUNTING CONVENTION |
|
| These
accounts have been prepared under the "historical cost" convention. |
|
|
| 2.2
FIXED ASSETS |
|
| These
are stated at cost less accumulated depreciation except freehold land and
capital |
|
| work-in-progress
which are stated at cost. Depreciation is charged on reducing balance |
|
| method
and the rates applied are in no case less than the rates prescribed. |
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. |
|
|
| Major
renewal and Improvement are capitalised. |
|
|
| Gain
or loss on disposal of fixed assets is included in current year's income. |
|
|
| 2.3
STORES, SPARES, LOOSE TOOLS & STOCKS-IN-TRADE |
|
| These
are valued at cost determined on First-in-First-out basis. Finished Goods are
valued |
|
| at
lower of cost of production or net realisable value. Goods-in-transit are
valued at |
|
| actual cost. |
|
|
| 2.4
PROVISION FOR GRATUITY |
|
| The
Company operates an unfunded gratuity scheme for all of it's employees.
Provision |
|
| is
made annually and charged to Profit & Loss Account to cover obligations
under the |
|
| scheme. |
|
|
| 2.5
INVESTMENTS |
|
| Investments
are stated at cost. |
|
|
| 2.6 TAXATION |
|
|
|
| CURRENT |
|
| The
liability in respect of Current Taxation is provided in the accounts on the
taxable |
|
| income
after adjustment of accelerated depreciation allowance admissible under
Income |
|
| Tax
Ordinance, 1979. |
|
|
| DEFERRED
TAX: |
|
| Deferred
Tax Liability is provided by using liability method on all major timing
differences |
|
| but
debit balance is not recognised. |
|
|
| 2.7
PROVISION FOR CUSTOMS DUTY / SURCHARGE ON BONDED STOCK |
|
| The
Customs Duty / Surcharge is provided on raw-material at the time of arrival
at the |
|
| bonded
warehouse. However, element of Customs Duty/Surcharge is charged to cost of |
|
| sales
at actual at the time of ex-bonding. |
|
|
| 2.8
REVENUE RECOGNITION |
|
| The
Company records sales on despatch of goods. |
|
|
| 3.
SHARE CAPITAL |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
(Rs. in
"000") |
|
| 3.1
AUTHORISED |
|
|
|
| 5,000,000
Ordinary Shares of Rs.10/= each |
|
|
50,000 |
50,000 |
|
| 1,000,000
Preference Shares of Rs.10/= each |
|
|
10,000 |
10,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
60,000 |
60,000 |
