Balance Sheet
Profit and Loss
Change In Equity
Cash Flow
Financial Notes

Acrobat Reader

( Download )

DIRECTOR'S' REPORT TO THE SHAREHOLDERS

Your directors are pleased to present unaudited  accounts for the first quarter ended on December 31, 2003.  

FINANCIAL RESULTS: 

The company registered a gross loss of Rs. 12.72 million during the period under review (Rs 3.97 million gross profit in the corresponding quarter of 2002). 

Cotton prices increased sharply from an average price of Rs. 1,904 per maund in the corresponding period of last year to Rs 3,149 per maund in the current period. Slight increase in sale prices did not match at all the sharp increase in prices of raw material,  thus causing gross loss. 

After taking credit of other income of Rs 3.714 million (Rs 0.8 million in the corresponding quarter of last year), on account of old credit balances written back and after charging Admin, Selling and Financial expenses the net loss before tax stands at Rs 11.866 million (net before tax profit of Rs 0.834 million in the corresponding quarter of last year).

 COURT CASES:

As mentioned in previous  directors’ reports that the case filed against the company by Faysal Bank Limited for recovery of Rs. 45.616 million was decided in company’s favour in the sense that a decree of only Rs 4.05 M was awarded to the bank by the banking court No.2, Faisalabad. Faysal Bank Limited has appealed against this decision to the Division Bench of the honourable Lahore High Court, Lahore. The appeal has not yet been fixed for regular hearing.

The case filed by the company against Muslim Commercial Bank, as reported in previous  directors’ reports for charging compound markup to the extent of Rs 10.006 M is still in progress. As a counter blast, the bank has filed a recovery suit for Rs. 23.34 million, in the same court. Both these cases are being heard together. Final outcome of this litigation is likely to take at least more then one year. Payments on account of banks’ liability have been stopped, until decision of the cases. 

OUTSTANDING STATUTORY PAYMENT: 

An amount of Rs. 5,591,401, has been shown in the balance sheet as custom levies payable. This consists of import duty and import surcharge on the import of ring spinning frames. The payment has not yet been made because the exact payable amount has to be settled with the custom authorities. Our contention is that only 30% of the total import duty was payable, which the company has paid. As per our understanding it was intention of the Federal Government to exempt 70% of the import duty and that the exemption under SRO 1076(1195) should be extended to the import surcharge as well.

 FUTURE PROSPECTS: 

The management of your company is determined to improve the performance of the company. It is expected that company will show good results in future.

 ACKNOWLEDGMENT:

The management would like to place on record its appreciation for the continuous support of its shareholders, customers and employees and expect to receive same cooperation in the future.                                                             

                                                                For and on Behalf of the Board

Faisalabad.                                                                            IMRAN ZAHID

30-01-2004                                                                           Chief Executive