| Quice Food Industries Limited |
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| CONTENTS |
|
|
| CORPORATE INFORMATION |
|
| NOTICE OF MEETING |
|
| DIRECTORS' REPORT |
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
& LOSS ACCOUNT |
|
| CASH FLOW STATEMENT |
|
| NOTES TO THE ACCOUNTS |
|
| PATTERN OF SHAREHOLDING |
|
|
|
| CORPORATE
INFORMATION |
|
|
| BOARD
OF DIRECTORS: |
|
| Mr.
Muhammad Afaq Shamsi |
Chief Executive |
|
| Mr.
Muhammad Farooq |
|
| Mr.
Muhammad Ahmed |
|
| Mr.
Akhtar Rasheed |
|
| Mr.
Muhammad Asim |
|
| Mr.
Muhammad Fahim |
|
| Mr.
Shahid Durvish |
|
|
| COMPANY
SECRETARY: |
|
| Mr.
Iqbal Shahid |
|
|
| BANKERS: |
|
| Union
Bank Limited |
|
| Allied
Bank of Pakistan Limited |
|
| Muslim
Commercial Bank Limited |
|
|
| AUDITORS: |
|
| M/s.
Haroon Shrif Gogan & Co., |
|
| Chartered
Accountants |
|
| Room
No. 31, 1st Floor, |
|
| Naz
Chamber, Shahrah-e-Liaquat, |
|
| Karachi. |
|
|
| LEGAL
ADVISOR: |
|
| Mr.
Khalil Ahmed Siddiqui |
|
| Advocate |
|
| 707,
7th Floor, |
|
| Uni
Shoping Center, Saddar, |
|
| Karachi. |
|
|
| SHARE
TRANSFER OFFICE: |
|
| 11/139,
Jamaluddin Afghani Road, |
|
| Sharfabad,
Near Bahadurabad, |
|
| Karachi. |
|
|
| REGISTERED
OFFICE & FACTORY: |
|
| Plot
No. 15, Phase III, |
|
| Hattar
Industrial Estate, |
|
| N.W.F.P. |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
id hereby given that the Nineth Annual General Meeting of the shareholders |
|
| of
Quice Food Industries Limited will be held at the registered office of the
Company |
|
| Plot
No. 15, Phase III, Hattar Industrial Estate, Hattar, on Saturday, November
25, |
|
| 2000
at 9.00 A.M. to transact the following business :- |
|
|
| 1)
To confirm the minutes of the Seventh Annual General Meeting held on March, |
|
| 30, 1998. |
|
|
| 2)
To receive, consider and adopt the audited accounts of the Company for the |
|
| year
ended June $0, 1999. Together with Directors' and Auditors' Reports |
|
| thereon. |
|
|
| 3)
To appoint auditors for the year ended June 30, 2000 and fix their
remuneration. |
|
| M/s.
Haroon Sharif Gogan & Company, Chartered Accountants retire and offer |
|
| themselves
for re-appointment. |
|
|
| 4)
To transact any other business with the permission of the Chair. |
|
|
|
BY ORDER OF THE BOARD |
|
|
|
Sd/- |
|
| Karachi. |
|
Iqbal Shahid |
|
| Date:
October 20, 2000 |
|
Company Secretary |
|
|
| Notes: |
|
| i)
The Share Transfer Books of the Company will remain closed from November 19, |
|
| 2000
to November 25, 2000 (both days inclusive). |
|
|
| ii)
A member entitled to attend and vote at the meeting may appoint a proxy.
Proxies |
|
| in
order to be effective must be received at the Head Office of the Company duly |
|
| signed,
stamped and witnessed not later than 48 hours before the meeting. A |
|
| proxy
needs not to be a member of the Company. |
|
|
| Members
are requested to communicate to the Company and change in their |
|
| addresses. |
|
|
|
| DIRECTORS'
REPORTS TO THE SHAREHOLDERS |
|
|
| The
Directors of the Company are pleased to put before you the Nineth Annual
Report |
|
| alongwith
the Audited Accounts for the year ended June 30, 1999 of your Company. |
|
|
| FINANCIAL
RESULTS |
|
Rupees |
|
|
| Profit/(Loss)
after charging all expenses |
|
(17,332,928) |
|
|
|
|
| Add:
Provision for Bad debts |
|
5,545,900 |
|
|
|
|
| Add:
Provision for tax |
|
243,711 |
|
|
---------- |
|
| Net
profit/(Loss) for the year |
|
(23,122,538) |
|
|
|
|
| Un-appropriated
profit brought forward |
|
26,651,826 |
|
|
---------- |
|
| Un-appropriated
profit carried forward |
|
3,529,288 |
|
|
========== |
|
|
| ACTIVITIES
FOR THE YEAR |
|
| During
the year under review the Company's performance remained downward trend as |
|
| compared
to the Sales of Year 1998, there is a short fall in sales i.e. 51.43% and |
|
| increase
in the cost of goods sold by 55.04%. This fall in the turnover was mainly due
to |
|
| the
shortage of funds and the close of the factory during the season of because
of the |
|
| "Attachment
Order" passed by the Sindh High Court, during the period under review
and |
|
| requirement
for the working capital sanctioned by the local bank but disbursement of the |
|
| funds
delayed. The Company has overcome the problem of fund and started the |
|
| production
activities on the reporting date. The expansion programme in the production |
|
| capacity
of the Hattar Plant for the installation of machinery is to be started in the
near |
|
| future.
The management is of the opinion to achieve the targets in the sales which
were |
|
| effected
in the current financial year. |
|
|
| AUDITORS |
|
| The
auditors, M/s. Haroon Sharif Gogan & Company, Chartered Accountants,
retired |
|
| and
offered themselves for re-appointment. |
|
|
| ACKNOWLEDGMENT |
|
| The
Directors wish to place on record their appreciation for the dedication
efforts and |
|
| hard
work of staff members, without which the revival of the Company made during
the |
|
| period
under review, would not be possible. |
|
|
| PATTERN
OF SHARE HOLDERS |
|
| The
pattern of shareholding as at June 30, 1999 is on page No. 19. |
|
|
|
MUHAMMED AFAQ SHAMSI |
|
| October
17, 2000 |
|
Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE SHAREHOLDERS |
|
|
| We
have audited the annexed Balance Sheet of Quice Food Industries Limited, as
at 30th |
|
| June,
'1999 and the related Profit & Loss Account and Cash Flow Statement
together with |
|
| the
notes forming part thereof, for the year then ended and we state that we have
obtained |
|
| all
the information and explanation which to the best of our knowledge and belief
were |
|
| necessary
for the purpose 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 |
|
| required
by the Companies Ordinance, 1984; |
|
|
| b)
In our opinion: |
|
|
| (i)
the Balance Sheet and Profit & Loss Account together with the notes
thereon |
|
| have
been drawn up in confirmity with the Companies Ordinance, 1984 and are |
|
| in
agreement with the books of account and are further in accordance with |
|
| accounting
policies consistently applied; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the
companies' |
|
| business;
and |
|
|
| (iii)
the business conducted, investment made and the expenditure incurred during |
|
| the
year were in accordance with the objects of the company; |
|
|
| c) In our opinion and to the best of our
information and according to the explanations |
|
| given
to us, the balance sheet, profit and loss account and the cash flow
statement, |
|
| together
with notes forming part thereof, give the 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 Company's affairs as at 30th June, 1999 and of
the |
|
| profit
and the cash flow position for the year then ended; and |
|
|
| d)
In our opinion no Zakat was deducted at source under the Zakat and Ushr
Ordinance, |
|
| 1980. |
|
|
|
Sd/ |
|
| Place: |
Karachi. |
|
HAROON SHARIF GOGAN &
CO., |
|
| Date: |
July 20, 2000, |
|
Chartered Accountants. |
|
|
|
| BALANCE
SHEET |
|
| AS
AT 30TH JUNE, 1999 |
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL & RESERVES |
|
| Authorised |
|
| 20,000,000
Ordinary Shares |
|
| of
Rs. 10/- each |
|
200,000,000 |
200,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid up |
|
2 |
106,875,000 |
106,875,000 |
|
| Premium
on issuance of Shares |
|
6,875,000 |
6,875,000 |
|
| Unappropriated
profit' |
|
3,529,288 |
26,651,826 |
|
|
---------- |
---------- |
|
|
117,279,288 |
140,401,826 |
|
| LIABILITIES
AGAINST ASSETS |
|
| SUBJECT
TO FINANCE LEASE |
|
8,983,388 |
7,664,030 |
|
|
| CURRENT
LIABILITIES |
|
| CURRENT
MATURITY |
|
| 1.
Lease Payment |
|
3 |
17,005,940 |
12,483,356 |
|
| 2.
Musharaka |
|
|
25,000,000 |
25,000,000 |
|
| 3. Marabaha |
|
|
4,000,000 |
4,000,000 |
|
| Short
Term Finance |
|
4 |
38,000,000 |
38,000,000 |
|
| Creditors,
accrued and other liabilities |
|
5 |
20,497,706 |
5,851,370 |
|
|
| PROVISION
FOR TAXATION |
|
| Minimum
tax on turnover |
|
243,711 |
473,855 |
|
|
---------- |
---------- |
|
|
104,747,357 |
85,808,581 |
|
| Contingencies
and commitments |
|
6 |
-- |
-- |
|
|
|
|
---------- |
---------- |
|
|
231,010,033 |
233,874,437 |
|
|
========== |
========== |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
| Operating
fixed assets |
|
8 |
81,283,909 |
66,515,362 |
|
|
| DEFERRED
COST |
|
9 |
-- |
-- |
|
|
| CURRENT
ASSETS |
|
| Stock-in-trade |
|
10 |
79,666,312 |
75,480,400 |
|
| Trade debts |
|
11 |
54,928,051 |
64,281,966 |
|
| Advances,
deposits & prepayments |
|
12 |
14,651,252 |
26,497,765 |
|
| Cash
& bank balances |
|
13 |
480,509 |
1,098,944 |
|
|
|
---------- |
---------- |
|
|
149,726,124 |
167,359,075 |
|
|
---------- |
---------- |
|
|
Total Rupees : |
231,010,033 |
233,874,437 |
|
|
========== |
========== |
|
| Note:
The annexed notes form an integral part of these accounts. |
|
|
|
Muhammad Afaq Shamsi |
|
Muhammad Ahmed |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
& LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
Notes |
Rupees |
Rupees |
|
|
| Sales |
|
14 |
48,742,115 |
94,771,029 |
|
| Cost
of gods sold |
|
15 |
40,921,316 |
74,352,189 |
|
|
----------- |
----------- |
|
| GROSS
PROFIT |
|
7,820,799 |
20,418,840 |
|
|
| OPERATING
EXPENSES |
|
| Administrative |
|
16 |
2,436,151 |
3,218,276 |
|
| Selling
& distribution |
|
17 |
2,847,471 |
4,060,644 |
|
|
----------- |
----------- |
|
|
5,283,622 |
7,278,920 |
|
|
----------- |
----------- |
|
| OPERATING
PROFIT |
|
2,537,178 |
13,139,920 |
|
|
| Financial
charges |
|
18 |
19,600,745 |
8,836,347 |
|
| Other
charges |
|
19 |
269,360 |
332,790 |
|
|
|
----------- |
----------- |
|
|
19,870,105 |
9,169,137 |
|
|
----------- |
----------- |
|
| PROFIT
BEFORE TAX ON TURNOVER |
|
(17,332,928) |
3,970,783 |
|
|
| Bad
Debts Written Off |
|
5,545,900 |
-- |
|
| Provision
for taxation |
|
| (minimum
tax on turnover - current year) |
|
243,711 |
473,855 |
|
|
----------- |
----------- |
|
| PROFIT
AFTER TAX PROVISIONS |
|
(23,122,538) |
3,496,928 |
|
|
| UNAPPROPRIATED
PROFIT/(LOSS) BROUGHT FORWARD |
26,651,826 |
23,154,898 |
|
|
----------- |
----------- |
|
| UNAPPROPRIATED
PROFIT/(LOSS) CARRIED FORWARD |
3,529,288 |
26,651,826 |
|
|
========== |
========== |
|
| Earning
per share |
|
(2.16) |
(0.33) |
|
|
| Note:
The annexed notes form an integral part of these accounts. |
|
|
|
Muhammad Afaq Shamsi |
|
Muhammad Ahmed |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATION ACTIVITIES |
|
| Net
profit after taxation |
|
(23,122,538) |
3,496,928 |
|
| Adjustment
for: |
|
|
|
| Depreciation |
|
4,937,199 |
5,330,664 |
|
| Deferred
expenditure written off |
|
-- |
356,658 |
|
| Financial
charges |
|
19,010,629 |
8,449,850 |
|
|
----------- |
----------- |
|
|
23,947,828 |
14,137,172 |
|
|
----------- |
----------- |
|
| Operating
Profit before working capital change |
|
825,289 |
17,634,100 |
|
| (Increase)/Decrease
in Current Assets |
|
|
| Stock
in trade |
|
(4,185,912) |
(14,139,827) |
|
| Trade
debtors |
|
935,391 |
(8,007,391) |
|
| Advances,
deposits & prepayments |
|
11,846,513 |
(4,802,081) |
|
|
----------- |
----------- |
|
|
17,014,516 |
(26,949,299) |
|
| Increase/(Decrease)
in Current Liabilities |
|
| Creditors,
accrued and other liabilities |
|
14,646,336 |
(5,862,267) |
|
| Minimum
tax on turnover |
|
(230,145) |
44,821 |
|
|
----------- |
----------- |
|
|
14,416,191 |
(5,817,446) |
|
|
----------- |
----------- |
|
|
31,430,707 |
(32,766,745) |
|
|
----------- |
----------- |
|
| Cash
generated from operations |
|
32,255,997 |
(15,132,645) |
|
| Financial
Charges paid |
|
(19,010,629) |
(8,449,850) |
|
|
----------- |
----------- |
|
| NET
CASH FROM OPERATING ACTIVITIES |
|
13,245,368 |
(23,582,495) |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Purchase
of operating fixed assets |
|
(19,705,745) |
(2,605,'044) |
|
|
----------- |
----------- |
|
| NET
CASH USED IN INVESTING ACTIVITIES |
|
(6,460,377) |
(26,187,539) |
|
|
| Finance
lease obtained |
|
12,998,378 |
-- |
|
| Repayment
of lease liabilities |
|
(7,156,436) |
(1,539,801) |
|
| Musharika
facility |
|
-- |
-- |
|
| Marabaha
facility |
|
-- |
4,000,000 |
|
| Short
Term Finance |
|
-- |
23,000,000 |
|
|
----------- |
----------- |
|
| NET
CASH USED IN FINANCING ACTIVITIES |
|
5,841,942 |
25,460,199 |
|
|
| Net
Increase/(Decrease) in cash and Cash Equivalents |
|
(618,435) |
(727,340) |
|
| Cash
& Cash Equivalents at the beginning of the year |
|
1,098,944 |
1,826,284 |
|
|
----------- |
----------- |
|
| Cash
& Cash Equivalents at the beginning of the year |
|
480,509 |
1,098,944 |
|
|
========== |
========== |
|
|
|
Muhammad Afaq Shamsi |
|
Muhammad Ahmed |
|
|
Chief Executive |
|
Director |
|
|
|
| NOTES
FORMING PART OF THE ACCOUNT FOR THE YEAR |
|
| ENDED
JUNE 30, 1999 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| The
company was incorporated in Pakistan on March 12, 1990 as a Private Limited
Company and was converted |
|
| into
Public Limited Company on December 13, 1993. Company was listed on Karachi
Stock Exchange on August 2, |
|
| 1994
and on Islamabad Stock Exchange on July 18, 1995. Principal activity of the
company is the manufacturing |
|
| and
selling of Jam, Jelly, Syrups, Custard Powder, Pickles, Essence, Juices and
aerated and drinks. |
|
|
| SIGNIFICANT
ACCOUNTING POLICIES |
|
| 1.1
Accounting Convention |
|
| These
accounts have been prepared under historical cost convention without any
adjustment for the effect |
|
| of
inflation or current values. |
|
|
| 1.2
Tangible Fixed Assets |
|
| a) Owned: |
|
| Fixed
Assets are stated at cost less accumulated depreciation except lease hold
land which is stated |
|
| at cost. |
|
| Depreciation
is charged to income applying reducing balance method at the normal rates,
without taking |
|
| effect
of extra shift. Additions in a year are depreciated for a full year
irrespective of the date of |
|
| purchases.
No depreciation is charged on assets in the year of their disposal. |
|
| Maintenance
and normal repairs are charged to income as and when incurred; major renewals
and |
|
| improvements
are capitalised and the assets so replaced, if any, are retired, Profit or
Loss on disposal |
|
| of
fixed assets is included in current period's income. |
|
|
| b)
Assets subject to Finance Lease: |
|
| These
are stated at lower of present value of minimum lease payments under the
lease agreements and |
|
| fair
value of the assets acquired on lease. The related obligation under the lease
are accounted for as |
|
| liabilities.
Depreciation is charged on these assets applying reducing balance method. |
|
| Finance
charges under the lease agreements is allocated to the periods during lease
term so as produce |
|
| a
constant period rate of financial cost on the remaining balance of principal
liability for each period. |
|
|
| 1.3 Taxation |
|
| Provision
for current taxation is based on taxable income, if any, at current rates of
tax after taking into |
|
| account
tax credit available, rebate and exemptions, if any. |
|
| The
company accounts for deferred taxation on all material timing difference
using liability method, However, |
|
| deferred
tax is not provided if it can be established with reasonable probability that
these timing difference |
|
| will
not reverse in the foreseeable future. |
|
|
| 1.4
Deferred Costs |
|
| Deferred
costs are amortized over a period of five years from the year of expenditure. |
|
|
| 1.5
Stock-in-trade |
|
| All
stocks are valued at lower of cost and estimated net realisable value. Cost
of raw and packing material |
|
| is
determined by Average Cost method of valuation. |
|
| Cost
of finished goods comprises of prime cost and appropriate portion of
production overheads. |
|
| Net
realisable value signifies the estimated selling prices in the ordinary
course of business, less cost |
|
| necessary
to be incurred in order to make the sale. |
|
|
| 1.6
Revenue Recognition |
|
| Sales
are recorded on despatch of goods to customers. |
|
|
| 2.
ISSUED, SUBSCRIBED AND PAID-UP CA |
|
1999 |
1998 |
|
|
|
|
|
| 4,954,366
Ordinary Shares of Rs. 10/- each |
|
49,543,660 |
49,543,660 |
|
| 433,888
Ordinary Shares of Rs. 10/- each |
|
|
|
| fully
paid in cash to NIT and ICP |
|
4,338,880 |
4,338,880 |
|
| 3,576,424
Ordinary Shares of Rs. 10/- each |
|
|
|
| fully
paid in cash issued to General Public |
|
35,764,240 |
35,764,240 |
|
| 1,722,822
Ordinary Shares of Rs. 10/- each |
|
|
|
| issued
as Bonus Shares |
|
17,228,220 |
17,228,220 |
|
|
----------- |
----------- |
|
|
106,875,000 |
106,875,000 |
|
|
========== |
========== |
|
|
|
|
| 3.
LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE |
|
|
| Present
value of minimum lease payment |
|
33,145,764 |
21,687,187 |
|
| Installment
paid |
|
(7,156,436) |
(1,539,801) |
|
|
----------- |
----------- |
|
|
25,989,328 |
20,147,386 |
|
| Current
maturity |
|
8,282,070 |
12,483,356 |
|
| Overdues |
|
8,723,070 |
-- |
|
|
----------- |
----------- |
|
|
17,005,940 |
12,483,356 |
|
|
----------- |
----------- |
|
|
8,983,388 |
7,664,030 |
|
|
========== |
========== |
|
|
|
|
| The
amount of future payments and the periods in which they will become due are: |
|
| (Year
Ending June 30 ) |
|
| 1999 |
|
-- |
20,313,614 |
|
| 2000 |
|
20,519,843 |
5,982,233 |
|
| 2001 |
|
5,469,485 |
5,469,485 |
|
|
|
----------- |
----------- |
|
|
25,989,328 |
31,765,332 |
|
| Financial
charges allocated to future period |
|
-- |
(11,617,946) |
|
|
----------- |
----------- |
|
|
25,989,328 |
20,147,386 |
|
|
========== |
========== |
|
| The
agreements under finance lease are as follows: |
|
| i)
The Company has entered into various agreements for Plant and Machinery and
vehicles. The |
|
| aggregate
rentals of Rs. 553,690 inclusive of make-up are payable in monthly
installments latest by 2001. |
|
| Financing
rate of 22.1 to 24.5 percent per annum have been used to arrive at a constant
periodic |
|
| finance
charges over the term of lease. |
|
| iii)
At the end of lease period the ownership of the assets shall transfer to the
company on payment of |
|
| residual
value. |
|
| iv)
The cost of operating and maintaining the leased assets is to be borne by the
Company. |
|
| v)
The above liability is secured against personal guarantee of Directors and
demand promissory note. |
|
|
| FIRST
ALLIED BANK MODARABA |
Musharka Facility |
Rupees |
25,000,000 |
|
| --- do --- |
|
Murabha Facility |
Rupees |
4,000,000 |
|
|
| 4.
SHORT TERM FINANCES |
|
| Running
Finance |
|
10,000,000 |
10,000,000 |
|
| Cash
Finance |
|
20,000,000 |
20,000,000 |
|
| Letter
of Credit Finance |
|
8,000,000 |
8,000,000 |
|
|
---------- |
---------- |
|
|
38,000,000 |
38,000,000 |
|
|
========== |
========== |
|
| 4.1
The finance obtained from Allied Bank of Pakistan limited under mark-up
arrangement computed at a rate |
|
| of
19% per annum. This has been obtained to meet the working capital
requirements. |
|
| 4.2
The finance obtained from Allied Bank of Pakistan limited under mark-up
arrangement computed at a rate |
|
| of
19% per annum. This has been obtained to meet the working capital
requirements. |
|
