| Kohinoor Oil Mills Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| COMPANY
INFORMATION |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| DIRECTORS'
REPORT TO THE MEMBERS |
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| AUDITOR'S
REPORT TO THE MEMBERS |
|
| BALANCE
SHEET |
|
| PROFIT
& LOSS ACCOUNT |
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| CASH
FLOW STATEMENT |
|
| NOTES
TO THE ACCOUNT |
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| PATTERN
OF HOLDING OF THE SHARES |
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|
| COMPANY
INFORMATION |
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|
| BOARD
OF DIRECTORS |
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|
| Chairman |
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MAJOR GENERAL (RETD.)
IJAZ AMJAD |
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|
Nominee of Ghee
Corporation of |
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|
Pakistan / Federal
Government |
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| Chief Executive/ |
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SHAMIM RAZA |
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| Managing
Director |
Nominee of Ghee
Corporation of |
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|
Pakistan / Federal
Government |
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| Directors |
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MUHAMMAD ISLAM MUNAWAR |
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|
Nominee of Ghee
Corporation of |
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Pakistan / Federal
Government |
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MR. MUMTAZ HUSSAIN BALOCH |
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Nominee of Ghee
Corporation of |
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Pakistan / Federal
Government |
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MR. IMRAN AZIM |
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Nominee of National
Investment |
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Trust Limited / Federal
Government |
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MR. M. FAROOQUE SAIGOL |
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Elected |
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MR. ZIA A. SHEIKH |
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|
Elected |
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| Chief
Accountant / |
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| Company
Secretary |
IFTIKHAR AHMED JAVED |
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| Auditors |
|
AZHAR ZAFAR & CO. |
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|
Chartered Accountants |
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| Bankers |
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National Bank of Pakistan |
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|
United Bank Limited |
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|
Habib Bank Limited |
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| Registered
Office & Factory |
G.T. Road, Kala Shah Kaku |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 31st Annual General Meeting of the share-holders |
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| will
be held at Kohinoor Oil Mills Ltd. G. T. Road, Kala Shah Kaku, Distt.
Sheikhupura on |
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| Sunday,
30th January, 2000 at 11.00 A. M. to transact the following business:- |
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| i)
To confirm the minutes of the last Annual General Meeting held on 30th |
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| December 1998. |
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| ii)
To receive, consider and adopt the accounts of the Company for the year |
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| ended
30th June, 1999 together with the Auditors and Directors' Report, |
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| thereon. |
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|
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| iii)
To appoint Auditors and fix their remuneration for the year ended 30th June,
2000. |
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| iv)
To transact any other lawful business with the permission of the Chair. |
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|
By order of the Board |
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| Kala Shah Kaku |
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|
(IFTIKHAR AHMAD JAVED) |
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| Dated:
21st December 1999 |
|
COMPANY SECRETARY |
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|
| NOTE: |
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| 1.
The member entitled to attend and vote at this meeting may appoint another |
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| member
as his/her proxy to attend the meeting and vote instead of him/her. |
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| Proxies
in order to be effective must be received by the Company not less |
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| than
48 hours before meeting. |
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| 2.
Share Transfer books of the company will remain closed from 23rd |
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| January,
2000 to 30th January, 2000 (both days inclusive). |
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| 3.
Share-holders are requested to promptly notify the Company, if any change in |
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| their addresses. |
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| DIRECTORS'
REPORT TO THE MEMBERS |
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| Dear Members, |
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| The
Directors of the Company welcome you to the 31st Annual General Meeting of |
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| the
Company and present their report alongwith audited balance sheet as on June
30, |
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| 1999,
Profit & Loss Account and Financial Statement for the period ended on
that date. |
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|
| During
the period under report there was no production of Vegetable Ghee as |
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| operation
of the company had been closed since August 1997 under the order of the |
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| Government
of Pakistan for its privatisation. The company sustained a loss of Rs. 53,506 |
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| million
as compared to the previous year loss of Rs. 214,876 million which is mainly
due to |
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| fixed
cost. The major break up of the loss is as follows:- |
|
|
| i)
Administrative Expenses |
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|
Rs. 3.833 Million |
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| ii)
Financial Charges |
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|
Rs. 36.216 Million |
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| iii)
GCP, Service Charges |
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|
Rs. 2.284 Million |
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|
---------------------- |
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TOTAL |
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Rs. 42.333 Million |
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|
============ |
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| The
administrative expenses have been curtailed from Rs. 16.546 Million to Rs. |
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| 6.117
Million (63%) during the year under review. Presently the company engaged
skeleton |
|
| staff
of ten persons. The Security arrangement have been given to M/s. Yennissaries |
|
| Security
(Pvt) Limited under contract. |
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| The
financial charges have also been decreased from Rs. 167.287 million to Rs. |
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| 36.21
6 million, 78.35% over the last year. |
|
|
| The
Auditors of the Company have reported that certain balances of the Debtors
and |
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| Creditors
of the Company have remained unconfirmed and have recommended that the |
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| debit
balances and the NBP, Pindi embezzled amount of Rs. 4.241 million, which are |
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| overdue
for many years should be written off or atleast provided for. The case of the |
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| embezzled
amount at NBP, Pindi, has been referred to FIA and the FIR lodged with the |
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| Ferozewala
Police Station and the Management feel not to provide for embezzled amount. |
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| The
Company is on the list of privatisation. It is expected that in near future
it would |
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| be
privatized by the Privatization Commission. |
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|
ON BEHALF OF THE BOARD OF DIRECTORS |
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|
(SHAMIM RAZA) |
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|
CHIEF EXECUTIVE/ |
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| Dated:
21st December, 1999 |
|
MANAGING DIRECTOR |
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|
| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have examined the annexed Balance Sheet. of KOHINOOR OIL MILLS LIMITED as at |
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| June
30, 1999 and the related Profit and Loss Account and Cash Flow Statement,
together |
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| with
notes forming part thereof for the year then ended and we report that: |
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| The
Company is not a going concern as its capital has been completely wiped out |
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| due
to accumulated losses, closure of operations as well as excess of current
liabilities over |
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| its
current assets. The revival of its status as a going concern is solely
dependent upon |
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| Ghee
corporation of Pakistan's providing financial support which we feel may not
be |
|
| forthcoming
due to Government of Pakistan's policy of privatisation. Consequently |
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| adjustments
may be required to the recorded assets and liabilities amount. The financial |
|
| statements
together with the notes do not disclose this fact; |
|
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| Except
for the above and the effect of notes 6.1, 6.2, 9.2, 10.1, 11.1, 12.1, 12.2,
12.4, |
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| 16.2,
and in particular note 13.1 where in the case of National Bank of Pakistan,
Namak |
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| Mandi
Branch Rawalpindi, no provision has been made in the accounts for the
embezzled |
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| amount
of Rs. 4,110,638, we state that we have obtained all the informations and |
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| explanations
which to the best of our knowledge and belief were necessary for the |
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| purposes
of our audit and, after due verification thereof, we report that: |
|
|
| a)
In our opinion, proper books of account have been kept by the Company as |
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| required
by the Companies Ordinance, 1984; |
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|
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| b)
In our opinion; |
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| i)
the Balance Sheet and Profit and Loss Account together with the |
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| notes
thereon have been drawn up in conformity with the Companies |
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| Ordinance,
1984 and are in agreement with the books of account and |
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| are
further in accordance with the accounting policies consistently |
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| applied; |
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|
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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 |
|
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| incurred
during the year were in accordance with the objects of the |
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|
| Company; |
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|
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| c)
in our opinion and the best of our information and according to the |
|
| explanations
given to us, the Balance sheet and Profit and Loss Account, and |
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| Cash
Flow Statement together with the notes forming part thereof, give the |
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| information
required by the Companies Ordinance, 1984 in the manner so |
|
| required
and respectively give a true and fair view of the state of the |
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| company's
affairs as at June 30, 1999 and of the loss for the year then |
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| ended; and |
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|
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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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| LAHORE: |
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|
AZHAR ZAFAR & CO. |
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| 21st
December, 1999 |
|
Chartered Accountants |
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|
|
| BALANCE
SHEET AS AT 30 JUNE, 1999 |
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|
Note |
1999 |
1998 |
|
|
|
RUPEES |
RUPEES |
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| CAPITAL
& LIABILITIES |
|
|
|
|
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| SHARE
CAPITAL |
|
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|
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|
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| Authorised: |
|
|
|
| 2,000,000
Ordinary Shares |
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|
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| of Rs. 10 each |
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|
20,000,000 |
20,000,000 |
|
|
|
|
========== |
========== |
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| Issued,
subscribed & paid up |
|
3 |
5,239,160 |
5,239,160 |
|
| Accumulated
loss |
|
|
(1,230,223,721) |
(1,176,718,166) |
|
|
|
|
------------------ |
------------------ |
|
|
|
(1,224,984,561) |
(1,171,479,006) |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Due
to Government Of Pakistan |
|
4 |
23,524,000 |
23,524,000 |
|
| Due
to Ghee Corporation of Pakistan (Pvt.) Limited |
|
5 |
1,245,289,494 |
1,192,716,356 |
|
| Creditors,
Accrued & Other Liabilities |
|
6 |
2,332,779 |
6,082,035 |
|
| Unpaid
statutory guaranteed return |
|
|
-- |
75,828 |
|
| Gratuity Payable |
|
|
-- |
324,660 |
|
|
|
|
------------------ |
------------------ |
|
|
1,271,146,273 |
1,222,722,879 |
|
| CONTINGENCIES
& COMMITMENTS |
|
7 |
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|
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|
------------------ |
------------------ |
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|
|
|
|
46,161,712 |
51,243,873 |
|
|
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|
========== |
========== |
|
|
| ASSETS |
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|
|
| FIXED ASSETS |
|
|
|
| At
cost less Accumulated depreciation |
|
8 |
4,650,335 |
5,156,596 |
|
|
|
|
| LONG
TERM SECURITY DEPOSITS |
|
|
73,129 |
73,129 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores & Spares |
|
9 |
5,652,705 |
5,652,705 |
|
| Stock in Trade |
|
10 |
3,111,345 |
3,154,825 |
|
| Trade Debtors |
|
11 |
3,372,137 |
3,393,373 |
|
| Advances,
Deposits, Prepayments |
|
|
|
| & Receivables |
|
12 |
24,864,727 |
28,373,198 |
|
| Bank Balances |
|
13 |
4,437,334 |
5,440,047 |
|
|
|
|
------------------ |
------------------ |
|
|
41,438,248 |
46,014,148 |
|
|
------------------ |
------------------ |
|
|
46,161,712 |
51,243,873 |
|
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts |
|
|
|
|
|
| LAHORE: |
|
| 21st
December, 1 999 |
Chief Executive |
|
Director |
|
AZHAR ZAFAR & CO. |
|
|
|
|
|
|
Chartered Accountants |
|
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
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| FOR
THE YEAR ENDED 30 JUNE, 1999 |
|
|
|
Note |
1999 |
1998 |
|
|
|
RUPEES |
RUPEES |
|
|
|
|
| SALES - Net |
|
14 |
-- |
44,906,835 |
|
| COST
OF SALES |
|
15 |
-- |
62,458,932 |
|
|
|
|
|
------------------ |
------------------ |
|
| GROSS LOSS |
|
|
|
(17,552,097) |
-- |
|
|
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
|
|
| Administrative
& General |
|
|
16 |
6,117,089 |
16,545,552 |
|
| Selling
& Distribution |
|
|
17 |
-- |
308,537 |
|
|
|
|
------------------ |
------------------ |
|
|
|
6,117,089 |
16,854,089 |
|
| OPERATING
LOSS |
|
|
(6,117,089) |
(34,406,186) |
|
| OTHER
INCOME |
|
18 |
166,275 |
473,898 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(5,950,814) |
(33,932,288) |
|
| FINANCIAL
CHARGES |
|
19 |
(36,216,617) |
(167,287,582) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(42,167,431) |
(201,219,870) |
|
| Extra
Ordinary item; Loss of stock due to flood |
|
|
-- |
(1,862,981) |
|
|
|
|
------------------ |
------------------ |
|
| LOSS
BEFORE TAXATION |
|
|
(42,167,431) |
(203,082,851) |
|
|
|
|
|
| TAXATION |
|
|
|
| Income
Tax-Current Year |
|
|
-- |
224,883 |
|
| Income
Tax-Prior Years |
|
|
-- |
4,265,786 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
-- |
4,490,669 |
|
| LOSS
AFTER TAXATION |
|
|
(42,167,431) |
(207,573,520) |
|
| Prior
Year's Adjustments |
|
20 |
11,338,124 |
7,302,611 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
(53,505,555) |
(214,876,131) |
|
| ACCUMULATED
LOSS-Brought Down |
|
|
(1,176,718,166) |
(961,842,035) |
|
|
|
|
|
|
------------------ |
------------------ |
|
| ACCUMULATED
LOSS - Carried to Balance Sheet |
|
|
(1,230,223,721) |
(1,176,718,166) |
|
|
|
|
========== |
========== |
|
|
| The
annexed noted form an integral part of these accounts. |
|
|
|
|
|
|
AZHAR ZAFAR & CO., |
|
|
Director |
|
Chief Executive |
|
Chartered Accountants |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
RUPEES |
RUPEES |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Loss
after taxation |
|
(42,167,431) |
(207,573,519) |
|
| Adjustment
for Items not involving |
|
|
| movement
of cash: |
|
|
|
| Depreciation |
|
|
|
506,262 |
452,872 |
|
| Prior
Year's Adjustments |
|
(11,338,124) |
(7,302,611) |
|
|
|
------------------ |
------------------ |
|
|
|
(52,999,293) |
(214,423,259) |
|
|
|
|
------------------ |
------------------ |
|
| (Increase)/Decrease
in Current Assets |
|
|
| Stores & Spares |
|
|
|
|
-- |
341,610 |
|
| Stock in Trade |
|
|
|
|
43,480 |
38,587,447 |
|
| Trade debtors |
|
|
|
|
21,236 |
-- |
|
| Advances,
Deposits, Prepayments |
|
|
|
|
| & receivables |
|
|
|
|
3,508,471 |
2,040,523 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
3,573,187 |
40,969,580 |
|
|
|
|
------------------ |
------------------ |
|
| Increase/(Decrease)
in Current Liabilities |
|
|
| Due
to Ghee Corporation of Pakistan |
|
|
| (Pvt.) Limited |
|
52,573,138 |
-- |
|
| Creditors
and accrued Liabilities |
|
(3,749,256) |
173,216,296 |
|
| Un
paid Statutory Guaranteed return |
|
(75,828) |
-- |
|
| Gratuity Payable |
|
(324,660) |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
48,423,394 |
173,216,296 |
|
|
|
------------------ |
------------------ |
|
| NET
CASH FLOW FROM OPERATING ACTIVITIES |
|
(1,002,712) |
(237,383) |
|
|
|
|
|
------------------ |
------------------ |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Additional
to fixed Assets |
|
-- |
(10,150) |
|
| NET
CASH FROM INVESTING ACTIVITIES |
|
-- |
(10,150) |
|
| NET
INCREASE/(DECEASE) IN CASH AND |
|
|
|
| CASH
EQUIVALENT |
|
(1,002,712) |
(247,533) |
|
|
|
|
========== |
========== |
|
| CASH EQUI) |
|
|
5,440,047 |
5,687,580 |
|
| CASH
EQUIVALENTS AT THE END |
|
4,437,335 |
5,440,047 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
AZHAR ZAFAR & CO. |
|
|
Director |
|
Chief Executive |
|
Chartered Accountants |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED 30 JUNE, 1999 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
|
|
| The
Company was incorporated in 1968 as a Private Limited Company and than |
|
| converted
into a Public Company in 1971. its shares are quoted on stock exchanges |
|
| in
Pakistan. It is principally engaged in the production and sale of vegetable
ghee and |
|
| extraction
of oil through Solvent Plant, and laundry soap as its by-product. |
|
|
|
|
| The
company ceased its operations in September 1997 resulting in no |
|
| production/sales
during the year. Now all the workers and officers with the |
|
| exception
of three (3) employees have been relieved after settlement of their |
|
| terminal
benefits. |
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICES |
|
|
|
|
|
| 2.1
Accounting Convention |
|
|
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.2.
Staff retirement benefits |
|
| The
Company operated a contributory provident fund for all its permanent |
|
| employees
and' contributions based on salaries were made monthly to cover |
|
| the
obligation. The Company also operated funded gratuity scheme for its |
|
| employees
which was provided for on completion of qualifying period. |
|
| Provision
is made annually to cover the obligation as following:- |
|
|
|
| Officers |
|
30 day for each completed
year of service. |
|
|
|
|
| Workers |
|
30 days for each
completed year of service with effect |
|
|
from 1996-97. The scheme
of gratuity for workers was made |
|
|
effective since July 01,
1976 |
|
|
| 2.3
Fixed assets and depreciation |
|
|
|
| Fixed
assets are stated at cost less accumulated depreciation except capital |
|
| work
in progress which is stated at cost. |
|
|
|
|
|
|
| Depreciation
is charged to income applying the reducing balance method at |
|
| rates
given in note No. 8 as per company's policy. |
|
|
|
|
| No
depreciation is provided on assets in the year of disposal/retirement, while |
|
| full
year's depreciation is charged in the year of purchase. |
|
|
| Minor
repairs and replacements are charged to current income. Major |
|
| renewals
and replacements are capitalized. |
|
|
| Fully
depreciated assets are retained in books at a token value of Rs. 1/- |
|
|
| Gain
and losses on disposal of assets are charged to profit and Loss Account. |
|
|
|
| 2.4 Taxation |
|
| The
Company provide income tax liability on the basis of taxable income, if |
|
| any.
However no tax liability u/s 80-D of the Income Tax Ordinance, 1979 |
|
| has
been provided due to no turn over during the year. |
|
|
| Tax
credits and brought forward losses are recognized for arriving at taxable |
|
| income.
The Company does not account for deferred taxation arising due to |
|
| major
timing differences. |
|
|
| 2.5
Stores and spares |
|
| These
are valued at moving average cost computed on monthly basis. |
|
|
| 2.6
Stock in trade |
|
|
| a)
Valuation basis are as follows: |
|
|
|
|
|
| Raw Material |
|
|
--- |
at moving average cost |
|
| Raw material in transit |
|
--- |
at invoice price |
|
| Work-in-process |
|
--- |
at manufacturing cost |
|
|
|
|
|
| Finished goods |
|
|
|
|
| vegetable
ghee & Oil |
|
--- |
at lower of cost and net
realizable value |
|
| By-products |
|
|
--- |
at selling price |
|
| Packing material |
|
|
--- |
at moving average cost |
|
|
|
|
| Scrap
is accounted for at the time of sale. |
|
|
| b)
Cost in relation to work in process and finished goods represent annual |
|
| average
manufacturing cost which consists of prime cost and appropriate |
|
| production
overheads. |
|
|
| Net
realizable value signifies the selling price in the ordinary course of |
|
| business
less cost necessary to be incurred to effect such sale. |
|
|
|
| 2.7
Revenue recognition |
|
| Sales
are recorded on despatch of goods to customers. |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
RUPEES |
RUPEES |
|
|
|
|
| 3.
ISSUED, SUBSCRIBED & PAID UP CAPITAL |
|
|
| Issued for .cash: |
|
|
|
| 8
Ordinary shares of Rs. 10/- each |
|
|
80 |
80 |
|
|
|
|
|
|
| Issued
for consideration other than cash: |
|
|
| 523,908/-Ordinary
shares of Rs.10/- |
|
|
| each fully paid. |
|
|
5,239,080 |
5,239,080 |
|
|
|
|
========== |
========== |
|
|
|
|
|
5,239,160 |
5,239,160 |
|
|
|
|
|
========== |
========== |
|
| 4.
DUE TO GOVERNMENT OF PAKISTAN |
|
23,524,000 |
23,524,000 |
|
|
|
|
========== |
========== |
|
|
| 4.1
This represents a loan amount of Rs. 23,524,000/- payable to National Bank |
