DIRECTORS’ REPORT
The Board
of Directors of your company are pleased to present 16th Annual
Report together with Audited accounts and Report thereon for the year ended
Your
company has sustained a net loss after tax, of Rs.800,637 during the year ended
During the
period under review, the factory remained idle owing to paucity of
infrastructural facilities in Winder caused frequent electricity load shedding,
unworkable prices of oil (diesel) and high fluctuation in cotton and yarn
prices thus causing recession in this Textile unit. To facilitate Winder
Industrial units, the Federal Government has approved supply of Gas connections
for which Federal Government and Provincial Government contributed funds and
Sui Southern Gas Company Limited has undertaken and started work for gas pipe
line. The management is hopeful to revive the factory upon the supply of gas
connection to resume the operational activity so as to utilize precious capital
investment for upliftment of economic activity in
As
regards, the Auditors observations in Auditors Report at c) , d) and
e),regarding non charging of depreciation on specific fixed assets since 2002,
it is clarified that the company’s policy with regard to depreciation is to
follow minimum recommended approach under International Accounting
Standards(IAS). According to IAS 16, the depreciation method envisaged at No.62
for units of production method has been adopted by your company as suited as
the said method for expected use and output of the respective fixed assets is
based on the life expectancy of the
machineries having good condition. Hence, your ,management on each year while
reviewing the expected pattern of consumption of those asset’s residual value not
made provision for charging the depreciation from the period of non usage.
However, when these assets are utilized upon start of commercial production,
the adjustment as required to the carrying of amounts and classification of
assets with an appropriate method would be applied and determined in
recognition of impairment loss for charging depreciation.
Further, it is
clarified that straight line depreciation charging during the period of un-use
of assets would have inappropriately resulted in further depletion of value of
assets and the burden of losses on the books of the company for the period when
its operations were fully suspended and its fixed assets being unutilized have
useful life.
Regarding doubts on going concern
with material uncertainty highlighted by the Auditors at d) and e) reference to
it is clarified that such observation for this unit over the years have not
made any significance at all as the management of your company has been
striving with utmost efforts by injecting funds from their own account. The
assets of your company are not revalued from its inception whereas its market
value would be sufficient to bear the liabilities as no mark up or interest
bearing debts created which may result in aggravating the losses. The
management has been in untiring efforts to resume the operations based on
viability of the Unit for Gas connection which is in progress.
The Board of Directors through out
the period under Review have complied with the Code of Corporate Governance as
per Listing Regulations of Stock Exchange and confirm that:-
*. The
Financial statements prepared by the Company present fair state of affairs, the
results of its operations, cash flows and changes.
* Proper books of accounts of the Company
have been maintained.
*. Appropriate accounting policies have been
adhered-to in preparation of financial statements based on reasonable and
prudent practices.
*. International Accounting standards as
applicable in
*. The
internal control system has been effectively implemented and monitored.
*. There
are no significant doubts upon the Company’s ability to continue as going
concern as the work for repairs and maintenance of machinery is progressing and
your management has planned to re-start the Unit during the current cotton
Crop.
*. There has been no material departure from the
best practices of corporate governance as well as Transfer pricing.
*. During the year, 4 (Four) meetings of the
Board of Directors were held. The attendance record of which is as follows:-
Names of Directors No. of
meetings attended
1.
Mr. Akbar Ali Hashwani Chief Executive. 4
2.
Mr. Amin A. Hashwani Director 4
3.
Mr. Nizam A. Hashwani Director 4
4.
Mr. Abdullah Hashwani Director 4
5.
Mrs. Sultana Hashwani Director 4
6.
Mrs.Farieha Hashwani Director 3
7.
Syed Raza Abbas Jaffery Director ( Representing
NIT) 3
(Leave of absence granted to the
directors upon their request exhibiting pre-engagement and / or inability to
attend the Board meetings.)
The retiring Auditors M/S Feroze
Sharif Tariq & Co. Chartered Accountants Karachi being eligible have
offered themselves for re-appointment for the financial year ending 30th
June, 2008. The Board of directors on the recommendation of Audit committee
have proposed appointment of M/S Feroze Sharif Tariq & Co. Chartered
Accountants for the year ending
DIVIDEND
As the company booked losses
therefore no dividend has been declared.
The Pattern of shareholding as
required under Section 234 of the Companies Ordinance, 1984 for the period
ended
Your directors place on record the
appreciation of efforts of the concerned quarters and look forward to their
continued support.
By Order of
the Board.
Date :
Chief Executive.