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Valika Art Fabrics Limited
Annual Report 1999
CORPORATE INFORMATION
Board of Directors:
AMIRUDDIN FAKHRUDDIN			Chief Executive
KAMRUDDIN FAKHRUDDIN			Director
NASIRUDDIN FAKHRUDDIN			Director
KUTBUDDIN FAKHRUDDIN			Director
SHIRIN KAMRUDDIN			Director
JUMANA NASIRUDDIN			Director
ALI ASGHAR KAMRUDDIN			Director
Bankers:
MUSLIM COMMERCIAL BANK LTD.
HABIB BANK LTD.
Auditor:
NAMDAR & CO.			Chartered Accountants
542-Sunny Plaza, Hasrat Mohani Road, Karachi
Shares Department & Registered Office:
Valika Chambers, Altaf Hussain Road, Karachi.
Telephone # 221.7397-2218193
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 45th Annual General Meeting of the Share Holders of the
Company will be held at its Registered Office at Valika Chambers, Altar Hussain Road,
Karachi, on Wednesday the December, 29th 1999 at 08.00 a.m. to transact the following
business:
ORDINARY BUSINESS
1. To confirm the Minutes of the last Annual General Meeting.
2. To consider and adopt the Audited Balance Sheet and Profit and Loss Account for
the year ended June, 30th, 1999 and the Director's Report thereon.
3. To appoint Auditors for the year 1999-2000 and fix their remuneration. The retiring
Auditors M/s. Namdar & Co. Chartered Accountants have offered their services
for the ensuing year.
4. To transact such other business as may be brought before the meeting with the
permission of the Chairman.
					By order of the Board
					AMIRUDDIN FAKHRUDDIN
Karachi Dated: 7th December, 1999					Chief Executive
(a) The transfer Books of the Company will remain closed from 29th December 1999
to 9th January, 2000 (both days inclusive).
(b) Members are requested to promptly notify the Company of any change in their
address.
(c) A member entitled to attend and vote at this meeting is entitled to appoint another
member as proxy to attend and vote for him/her.
DIRECTOR'S REPORT TO THE SHAREHOLDERS
Your Directors are pleased to place before you 45th Annual Report with financial
statements duly audited for the financial year ended June 30, 1999.
Operating result and its consequent effect on share-holders equity position is
summarised as under:
					Rupees
Net Profit for the year before Taxation					60,354
Provision for Diminution in Value of Marketable Securities					(666,522)
Provision for Taxation		- Current			(40,000)
Provision for Taxation		- Prior Year's			(600,000)
Accumulated Profit Brought Forward					265,319
Loss Carried Forward					(980,849)
SHARE HOLDER EQUITY
Issued, subscribed and paid-up capital					1,210,000
Add: Capital Reserve					1,571,167
Revenue Reserve					985,000
Accumulated Loss as shown above					(980,849)
					------------------
Share Holder' Equity as on June 30, 1999					2,785,318
					==========
The Company over head expenses is being meet from Public Bonded Warehouse,
functioning since last year. There has been no other business during the period under
report but Directors are looking for alternate business.
The Company does not anticipate any potential problem that may arise due to the
Millennium bag, since the company is using Basic Software System.
The present auditors M/s. Namdar & .Co., Chartered Accountants, retire and being
eligible offer themselves for re-appointment.
A statement showing pattern of shareholding in the Company as at June 30,1998 appears
on the last page.
Directors are happy to report that they have cordial relation with staff members who
have been very co-operative and responsive to the need of the company.
					for and on behalf of Directors of
					VALIKA ART FABRICS LTD.
					(AMIRUDDIN FAKHRUDDIN)
Karachi: 7th December, 1999					Chief Executive Director
AUDITORS REPORT TO THE MEMBERS
We have audited the annexed balance sheet of M/s. Valika Art Fabrics Limited as
at June 30, 1999 and the related Profit and Loss Account and Statement of Changes in
Financial Position (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 &
explanations which to the best of our knowledge and belief were necessary for the
purposes 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 and 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 company's
business; and
(iii) The business conducted, investments 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 & Loss Account and Statement of Changes in
Financial Position (cash flow statement), together with the 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 June 30, 1999 and of the Loss and the changes in the financial position
(Cash flow statement) for the year then ended: and
(d) In our opinion no Zakat was deductible at source under Zakat and Ushr Ordinance,
1980.
Karachi:					NAMDAR & CO.
Dated 7th December 1999					Chartered Accountant.
BALANCE SHEET AS AT 30TH JUNE 1999
				NOTE	1999	1998
				NO.	RUPEES	RUPEES
SHARE CAPITAL AND RESERVES
AUTHORISED:
302,500 Ordinary 'A' Class Shares
of Rs. 4/- each					1,210,000	1,210,000
					==========	==========
ISSUED, SUBSCRIBED AND PAID-UP
302,500 Ordinary 'A' Class
shares of Rs. 4/- each				3	1,210,000	1,210,000
RESERVES
Capital Reserve				4	1,571,167	1,571,167
Revenue Reserve				5	985,000	985,000
Accumulated Profit/(Loss)					(980,849)	265,319
					------------------	------------------
					1,575,318	2,821,486
					2,785,318	4,031,486
LIABILITY AGAINST ASSET SUBJECT TO FINANCE LEASE				6	351,069	--
DEFERRED LIABILITY GRATUITY					103,532	98,198
CURRENT LIABILITIES
Current Maturity of Lease				6	175,392	--
Accruals				7	353,324	199,024
Other Liabilities				8	89,302	89,302
Provision for Income Tax				9	1,348,869	708,869
					------------------	------------------
					1,966,887	997,195
Contingencies & Commitments				10	--	--
					------------------	------------------
					5,206,806	5,126,879
					==========	==========
TANGIBLE FIXED ASSETS
Operating Fixed Assets				11	732,986	410,119
LONG TERM INVESTMENTS (at Cost)				12	1,154,523	1,821,045
LONG TERM DEPOSITS &
DEFERRED COST				13	352,626	227,626
CURRENT ASSETS:
Trade Debts				14	1,509,435	1,246,918
Advances, Deposits, Prepayments
and other Receivables				15	1,330,012	1,331,505
Cash & Bank Balances				16	127,224	89,666
					------------------	------------------
					2,966,671	2,668,089
					------------------	------------------
					5,206,806	5,126,879
					==========	==========
The annexed notes from 1 to 21 form
an integral part of these accounts.
	AMIRUDDIN FAKHRUDDIN		KAMRUDDIN FAKHRUDDIN		NASIRUDDIN FAKHRUDDIN
	Chief Executive		Director		Director
Karachi Dated 7th December, 1999
PROFIT & LOSS ACCOUNT AS AT 30TH JUNE 1999
					1999	1998
				NOTE	RUPEES	RUPEES
Revenue				17	2,601,987	2,110,041
Operating Expenses:
Administrative				18	2,310,371	1,868,379
Financial				19	12,055	971
Advertisement					27,680	30,390
Depreciation					130,529	46,634
Bad Debts					60,998	--
					------------------	------------------
					2,541,633	1,946,374
Net Profit/(Loss) before taxation					60,354	163,667
Provision for Diminution in
value of marketable securities					(666,522)	--
Net Profit (Loss) Before. Taxation					(606,168)	--
Provision for Taxation-Current					!40,000)	(43,000)
Provision for Taxation-Priors' Year					(600,000)	(445,000)
					------------------	------------------
					(1,246,168)	(324,333)
Accumulated Profit/(Loss)
Brought Forward					265,319	589,652
					------------------	------------------
Accumulated Profit/(Loss)					(980,849)	265,319
Carried to Balance Sheet					==========	==========
The annexed notes from 1 to 21 form
an integral part of these accounts.
	AMIRUDDIN FAKHRUDDIN		KAMRUDDIN FAKHRUDDIN		NASIRUDDIN FAKHRUDDIN
	Chief Executive		Director		Director
Karachi Dated 7th December, 1999
STATEMENT OF THE CHANGES IN FINANCIAL POSITION
(CASH FLOW STATEMENT) as at 30th June 1999
					1999	1998
					RUPEES	RUPEES
CASH FLOW FROM OPERATING ACTIVITIES
Profit/(Loss) before taxation					(606,168)	163,667
Adjustment for:
Depreciation					130,529	46,634
Profit on sale of Motor Car					(10,896)	--
Gratuity					5,334	5,334
Provision for Diminution in value of Marketable Securities					666,522	--
					------------------	------------------
					791,489	51,968
					------------------	------------------
Operating Profit/(Loss) before changes					185,321	215,635
(Increase) / decrease in Operating assets
Loan & Advances					1,493	(8,049)
Trade Debt.					(262,517)	(86,834)
					------------------	------------------
					(261,024)	(94,883)
					------------------	------------------
					(75,703)	120,752
Increase/(decrease) in current Liabilities
Accrued & other liability					154,300	(95,726)
					------------------	------------------
Net cash from Operating Activities					78,597	25,026
CASH FLOW FROM INVESTING ACTIVITIES
Motor Car					(530,000)	--
Furniture & Fixture					(2,500)	(5,650)
Long Term Deposits & Deferred Cost					(125,000)	--
Sale of Motor Car					90,000	--
					------------------	------------------
Net Cash from investing activities					(567,500)	(5,650)
					------------------	------------------
Net Cash from after investing activities					(488,903)	19,376
					------------------	------------------
CASH FLOW FROM FINANCING ACTIVITIES
Lease Finance Less Repayment					526,461	--
Net Cash flow after financing activities					37,558	19,376
					------------------	------------------
Cash & Cash equivalents at the beginning of the year					89,666	70,290
					------------------	------------------
Cash & Cash equivalents at the end of the year					127,224	89,666
					==========	==========
	AMIRUDDIN FAKHRUDDIN		KAMRUDDIN FAKHRUDDIN		NASIRUDDIN FAKHRUDDIN
	Chief Executive		Director		Director
Karachi Dated 7th December, 1999
NOTES TO THE ACCOUNTS
for the year ended June 30, 1999
1. NATURE & STATUS OF THE COMPANY.
The company was incorporated on 25th day of November, 1953 under the Companies Act, 1913
as a Public Limited Company with the principal objects to manufacture artificial leather and
plastic sheets and to carry on jobs of dying and bleaching. Currently Company is engaged in the
business providing service of public Bonded Ware House.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting Convention
These financial statements are prepared under the historical cost convention, without any
adjustment for the effect of inflation or current values.
These accounts comply with International accounting Standards in all material aspects.
2.2 Taxation & Deferred Tax Liabilities
Taxation is normally charged in the accounts based on taxable income while in any year due
to admissible carry forward loss. If there is no taxable income, no provision for taxation is
made in the accounts.
The company does not provide for deferred taxation as the management considers that timing
difference are unlikely to reverse.
2.3 Tangible fixed Assets & Depreciation
Operating fixed assets are stated at cost less accumulated depreciation. Depreciation is charged
to income applying the diminishing balance method, except for lease hold land applying the
straight line method.
Full year s depreciation is charged on assets acquired during the year, while no depreciation
is charged on assets disposed off during the year.
Normal repairs and maintenance are charged to income as and when incurred. Major renewals
and improvements are capitalised and assets so replaced, if any are retired.
Gains or losses on disposal of fixed assets are included in current year's income.
2.4 Assets subject to Finance
Assets subject to finance lease are stated at the lower of present value of minimum lease
payments under the lease agreement and the fair value of the assets. The related obligation of
the lease accounted for as liabilities. Assets acquired under finance lease are depreciated over
the useful life of the assets commencing from the year in which the leased assets are put into
operation. Depreciation policy is the same as for owned assets.
2.5 Investments
Investment in Shares are Stated at cost provision for diminution in the value of investment in
accounted for where the diminution is of permanent nature.
2.6 Provision for Gratuity
Provision for gratuity is accounted for on accrual basis.
2.7 Revenue Recognition
Rental income is realised on accrual basis.
Income on investment is recorded when received.
					1999	1998
					RUPEES	RUPEES
3. ISSUED, SUBSCRIBED & PAID-UP CAPITAL
'A' Class Ordinary Shares
250,000	Shares of Rs. 4/- each fully paid in cash.				1,000,000	1,000,000
52,500	Shares of Rs. 4/- each issued as bonus shares				210,000	210,000
------------------					------------------	------------------
302,500					1,210,000	1,210,000
==========					==========	==========
4. CAPITAL RESERVE					1,571,167	1,571,167
					==========	==========
5. REVENUE RESERVE
General Reserve					585,000	585,000
Replacement cost of machinery reserve					400,000	400,000
					------------------	------------------
					985,000	985,000
					==========	==========
6. LIABILITY AGAINST ASSET SUBJECT
TO FINANCE LEASE - SECURED
From Paramount Leasing Ltd.					526,461	--
Less: Classified as current
liabilities being payable within one year					(175,392)	--
					------------------	------------------
					351,069	--
					==========	==========
a) The Above Liability represents unpaid balance of total minimum lease payment and
residual value payable at the end of lease Incremental rate-of borrowing applied to
lease is 25.12% per annum.
b) The rental under lease agreement in respect of above liability are payable are payable
over future accounting years are as under:
1999-2000					175,392
2000-2001					175,392
2001-2002					160,776
					------------------
					511,560
Financial charges allocated to future periods.					(135,099)
					------------------
					376,461
Deposit					150,000
					------------------
					526,461
					==========
c) At the end of lease period the ownership of assets shall be transferred to the Company
on payment of residual value.
d) The Cost of operating and maintaining the lease assets is to be home by the Company
e) The payment of lease rentals are secured by way of demand promissory note and
personal guarantee of sponsoring directors.
7. ACCRUALS
Accrued Expenses					353324	199,024
					------------------	------------------
					353324	199,024
					==========	==========
8. OTHER LIABILITIES:
Partial Capital refundable					22,304	22,304
Unclaimed dividend					669,913	669,913
					------------------	------------------
					89,302	89,302
					==========	==========
9. STATUS OF INCOME TAX ASSESSMENT
9.1 Income Tax Assessment up to assessment year 1997 -98 has been finalized and the
company has filed appeals against the Income Tax orders in respects of priors
years, the decisions are still awaited. The total tax liability in respect of prior
years was Rs. 1.354 million against which company had made provision of Rs.
0.709 million (Note 10).
9.2 Income Tax Assessment for the Assessment year 1998-99 has also been
finalised, creating a demand of Rs. 79,366 against which company has
provided Rs. 43,000 only.