Ashfaq Textile Mills Ltd - 2001

Ashfaq Textile Mills Ltd - 2001

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BALANCE SHEET AS ON JUNE 30, 2001
NOTE 2001 2000
RUPEES RUPEES
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CAPITAL & LIABILITIES
SHARE CAPITAL & RESERVES:
AUTHORISED:
8,000,000 Ordinary Shares of Rs. 10/- each 80,000,000 80,000,000
ISSUED, SUBSCRIBED & PAID UP:
6,997,000 Ordinary Shares of Rs. 10/- each
fully paid in cash 69,970,000 69,970,000
Accumulated Loss (36,335,927) (38,863,228)
33,634,073 31,106,772
SURPLUS ON REVALUATION OF FIXED ASSETS 3 26,135,676 26,135,676
LONG TERM LOANS 4 55,439,000 46,719,000
LIABILITIES AGAINST ASSETS SUBJECT TO
FIANNCE LEASE 5 298,250 572,758
DEFERRED LIABILITIES
Provision for gratuity 1,331,057 1,396,076
CURRENT LIABILITIES:
Short term borrowings 6 36,170,371 57,872,294
Current portion of long term liabilities 7 12,340,395 8,879,569
Creditors, accrued & other liabilities 8 16,015,172 28,975,907
64,525,938 95,727,770
CONTINGENCIES & COMMITMENTS 9 181,363,994 201,658,052
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PROPERTIES & ASSETS
TANGIBLE FIXED ASSETS
Net operating assets 10 123,287,210 102,500,754
Capital work in progress 11 2,691,625 11,849,227
125,978,835 114,349,981
LONG TERM DEPOSITS 136,700 1,108,898
CURRENT ASSETS:
Stores, spares & loose tools 12 4,239,436 6,500,295
Stock in trade 13 27,719,851 29,269,553
Trade debts 14 8,435,793 8,233,614
Advances, deposits & prepayments 15 2,498,212 7,028,277
Short term investments 16 - 17,600,000
Other receivables 17 10,574,433 9,067,998
Cash & bank balances 18 1,780,734 8,499,436
55,248,459 86,199,173
181,363,994 201,658,052
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PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2001
NOTE 2001 2000
RUPEES RUPEES
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SALES 19 198,789,911 148,330,181
COST OF SALES 20 160,971,901 141,131,861
GROSS PROFIT 37,818,010 7,198,320
OPERATING EXPENSES:
Administrative 21 7,834,737 5,797,601
Selling & distribution 22 10,613,847 9,396,707
18,448,584 15,194,308
OPERATING PROFIT / (LOSS) 19,369,426 (7,995,988)
Other income 23 6,393 159,067
19,375,819 (7,836,921)
Financial charges 24 11,862,278 11,265,587
Prior year adjustments 1,255,040 437,566
Workers profit participation fund 309,973 -
13,427,291 11,703,153
PROFIT / (LOSS) BEFORE TAXATION 5,948,528 (19,540,074)
TAXATION
Current 25 3,421,227 1,030,404
Prior year - 14,736
3,421,227 1,045,140
PROFIT / (LOSS) AFTER TAXATION 2,527,301 (20,585,214)
ACCUMULATED LOSS BROUGHT FORWARD (38,863,228) (18,278,014)
ACCUMULATED LOSS CARRIED TO BALANCE SHEET (36,335,927) (38,863,228)
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STATEMENT OF CHANGES IN FINANCIAL POSITION (CASH FLOW STATEMENT) FOR
THE YEAR ENDED JUNE 30, 2001
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2001 2000
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CASH FLOW FROM OPERATING ACTIVITIES
Profit / (loss) before taxation 5,948,528 (19,540,074)
Adjustment to reconcile profit/ (loss) for net cash
provided by operating activities:
Depreciation 5,561,633 4,561,199
Provision for gratuity 167,311 795,782
Payment of gratuity (232,330) (262,763)
Financial charges 11,935,685 11,269,022
Other Income (79,645)
CASH FLOW FROM OPERATING ACTIVITIES BEFORE
WORKING CAPITAL CHANGES: 23,301,182 (3,176,834)
(Increase) / decrease in current assets:
Stores, spare & loose tools 2,260,859 412,717
Stock in trade 1,549,702 (7,453,361)
Trade debts (202,179) (4,692,238)
Advances, deposits and prepayments 4,568,494 (3,299,902)
Other receivables (1,506,435) (2,868,457)
Increase / (decrease) in current liabilities
Creditors & Accrued liabilities (13,085,014) 16,374,114
NET CASH FLOW FROM WORKING CAPITAL CHANGES (6,414,573) (1,527,127)
CASH GENERATED FROM (USED IN) OPERATIONS
(4,703,961)
Financial charges paid (11,811,406) (10,396,866)
Taxes paid (3,459,656) (1,378,458)
Other Income 79,645 -
NET CASH FLOWS FROM OPERATING ACTIVITIES (15,191,417) (16,479,285)
CASH FLOW FROM INVESTING ACTIVITIES
Short Term Investment 17,600,000 2,000,000
Fixed capital expenditures (26,348,090) (6,017,307)
Capital work in progress 9,157,603 -
Long term deposits 972,198 (402,241)
NET CASH FLOW FROM INVESTING ACTIVITIES 1,381,711 (4,419,548)
CASH FLOW FROM FINANCING ACTIVITIES
Lease finance acquired 475,000 -
Lease finance paid (1,288,682) (1,716,286)
Long term loans 71,000,000 25,000,000
Repayments of long term loans (58,280,000) (3,300,000)
Short term borrowings (21,701,923) 3,602,411
CASH FLOW FROM FINANCING ACTIVITIES (9,795,605) 23,586,125
NET INCREASE IN CASH AND CASH EQUIVLAENTS (6,718,702) 2,687,292
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 8,499,436 5,812,144
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 1,780,734 8,499,436
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NOTES TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 2001

3. SURPLUS ON REVALUATION OF FIXED ASSETS:

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2001 2000
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The surplus on revaluation has been determined by
M/S ILYAS SAEED & CO., Chartered accountants as an
independent valuer. Basis of revaluation has been
mentioned in detail.
26,135,676 26,135,676
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4. LONG TERM LOANS: (Secured)
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2001 2000
NOTE RUPEES RUPEES
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From Banking Companies 4.1 59,389,000 54,669,000
From Ishaq Textile Mills Ltd. 8,000,000
Current portion shown under current liabilities
Over due 1,650,000 1,650,000
Due within next 12 months 10,300,000 6,300,000
11,950,000 7,950,000
55,439,000 46,719,000
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4.1. The Loan carries mark-up @ 14% per annum. The loan is repayable
in twenty semi annual instalments with one year grace period
commencing from December 31, 1997. The loan is secured against
Mortgage on company�s land Pari Passu with NDLC and personal
guarantees of three sponsoring Directors.
4.2. The company has applied for conversion of short term facility
of Rs. 38.000 Million (2000 Rs. 20.000 Million) to long term loan
which is under consideration of the lenders.
5. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE:
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2001 2000
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Opening balance 1,502,327 3,218,613
Lease finance obtained 475,000 -
1,977,327 3,218,613
Lease liability paid 1,288,682 1,716,286
Balance 30-06-2001 688,645 1,502,327
Current portion due within one year 390,395 929,569
298,250 572,758
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The company has entered into lease agreements with Askari leasing
company for vehicle amounting to Rs. 475000/=. Purchase option is
 available to the company at the end of lease term by surrender of
Lease key money.

Future obligations of Minimum lease payments under finance lease and

present value of future minimum lease payments (MLP) are as under:
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FUTURE MLP PRESENT VALUE
OF MLP
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Installments due not later than 1 year 466,440 390,395
Installments due later than 1 year but not later than
5 years 321,007 298,250
Installments due later than 5 years - -
787,447 688,645
Less: Current maturity 390,395
298,250
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6. SHORT TERM BORROWINGS:
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2001 2000
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Banking companies (secured) Limit: Rs. 103.50 million 33,100,000 51,100,949
Due to Directors 2,645,023 4,110,712
Book overdrawn 425,348 2,660,633
36,170,371 57,872,294
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Borrowing from banking companies are secured against the
hypothication of stock in trade, lien on export documents and
personal guarantees of the sponsoring directors.

The rates of mark-up on borrowing companies ranges from 33 paisas to

50.

Interest free loan is advanced by the Directors to the company which

will be repayable with in a period of one year.
7. CURRENT PORTION OF LONG TERM LIABILITIES:
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2001 2000
NOTE RUPEES RUPEES
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Long term loans 4 11,950,000 7,950,000
Liabilities against assets subject to
finance lease 5 390,395 929,569
12,340,395 8,879,569
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8. CREDITORS, ACCRUED AND OTHER LIABILITIES:
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2001 2000
NOTE RUPEES RUPEES
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Creditors 10,975,101 24,765,662
Accrued expenses:
M-up on secured long term loans 1,591,617 1,809,888
M-up on secured short term borrowings 1,224,906 882,356
Other accrued liabilities 1,089,836 1,448,776
Workers profit participation Fund 8.1 341,725 11,147
Others payable 791,987 58,078
16,015,172 28,975,907
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8.1. WORKERS PROFIT PARTICIPATION FUND:
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2001 2000
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Balance at July 01, 2000 11,147 474,955
Allocation for the year 309,973 -
Interest on the funds utilised in the company Business 20,605 44,887
341,725 519,842
Less: Amount paid - (508,695)
Balance at June 30, 2001 341,725 11,147
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9. CONTINGENCIES & COMMITMENTS:

The company is contingently liable for Rs. 1,190,827 on account of

turnover Tax u/s 80D of he Income Tax Ordinance 1979.

The company has gone into litigation in Lahore High Court in 1991
vide petition under Article 199 of the constitution of Islamic
Republic Of Pakistan 1973.

The levy of turnover tax on the basis that the company was enjoying
tax holiday under clause 118-D of 2nd schedule of the Income Tax
Ordinance 1979, has been strongly contested.
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10. OPERATING ASSETS
DESCRIPTION COST / REVALUATION DEPRECIATION W.D.V
As at Revaluation Deletion
Addition As at As at Adjustment Rate For As at as
at
01-07-00 30-06-2001
01-07-00 % the year 30-06-2001 30-06-2001
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Freehold assets: 10.1
Freehold land 2,762,305 5,045,695 - -
7,808,000 - - 7,808,000
Building on Freehold land 15,743,101 12,630,935 - 4,427,030
32,801,066 6,463,836 - 2.5 658,431 7,122,267 25,678,799
Machinery 87,045,102 8,459,046 - 21,458,897
116,963,045 27,693,148 - 5 4,463,495 32,156,643 84,806,402
Furniture & fixtures 944,047 - 74,271
1,018,318 292,185 - 5 36,307 328,492 689,826
Office equipments 1,544,659 - 374,592
1,919,251 581,939 - 5 66,866 648,805 1,270,446
Vehicles 2,391,565 - 1,550,068
3,941,633 1,172,382 - 10 276,925 1,449,307 2,492,326
Arms & ammunitions 21,300 - -
21,300 11,461 - 5 492 11,953 9,347
TOTAL 110,452,079 26,135,676 27,884,858
164,472,613 36,214,951 5,502,515 41,717,466 122,755,147
LEASEHOLD ASSETS 10.2
Machinery 600,000 600,000 -
- 138,300 138,300 5 - - -
Vehicles 3,215,860 2,337,860 475,000
1,353,000 1,549,610 787,792 10 59,118 820,936 532,064
TOTAL 3,815,860 - 2,937,860 475,000
1,353,000 1,687,910 926,092 59,118 820,936 532,064
2001RUPEES 114,267,939 26,135,676 2,937,860 28,359,858
165,825,613 37,902,861 926,092 5,561,633 42,538,402 123,287,210
2000RUPEES 114,430,424 26,135,676 1,212,000 1,049,515
140,403,615 33,689,582 347,920 4,561,199 37,902,861 102,500,754
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30-06-2001 30-06-2000
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10.3. ALLOCATION OF DEPRECIATION
Cost of goods sold 5,123,676 4,042,591
Administrative Expenses 437,957 518,608
5,561,633 4,561,199
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10.4. Had there been no revaluation the related figures of the free
hold land, building on free hold land and machinery at June 30,
2001, would have been as follows:
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COST ACC.DEP W.D.V
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Free Hold Land 2,762,305 - 2,762,305
Building 20,170,131 6,498,614 13,671,517
Machinery 108,503,999 31,331,886 77,172,113
131,436,435 37,830,500 93,605,935
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11. CAPITAL WORK IN PROGRESS:
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2001 2000
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Building 196,699 4,427,030
Machinery 2,494,926 7,422,197
2,691,625 11,849,227
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12. STORES, SPARES & LOOSE TOOLS:
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2001 2000
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Stores 363,131 370,585
Spares 1,641,848 1,396,908
Loose tools 2,234,457 4,732,802
4,239,436 6,500,295
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13. STOCK IN TRADE:
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2001 2000
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Raw materials 9,843,250 7,274,507
Work in process 1,897,388 2,198,959
Finished goods 14,483,945 18,607,949
Sizing chemicals 1,495,268 1,188,138
27,719,851 29,269,553
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13.1. Stock figures have been taken as per certificate by the
management.
 14. TRADE DEBTORS:
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2001 2000
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Foreign � secured 4,335,000 7,985,360
Local � unsecured (considered good) 4,100,793 248,254
8,435,793 8,233,614
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15. ADVANCES, DEPOSITS, & PREPAYMENTS:
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2001 2000
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Advances:-
- Income tax department 1,767,090 1,728,661
- Employees 443,218 413,126
- Suppliers - 4,462,365
- Quotta Export 154,618 -
- Others 59,123 202,243
Deposits:-
- Security - 1,400
- Margin on bank guarantee - 66,100
Prepayments:-
- Insurance 74,163 153,755
- Others - 627
2,498,212 7,028,277
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16. SHORT TERM INVESTMENTS:
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2001 2000
RUPEES RUPEES
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Musarat textile mills limited - 17,600,000
Associated undertaking (Quoted)
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16.1. The company has sold all the shares at par at Lahore Stock
Exchange through a stock broker Muhammad Sarfraz Ghumman 504, LSE
Building, Lahore
17. OTHER RECEIVABLES:
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2001 2000
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Export rebate 2,998,488 1,499,000
Sales tax refund 7,475,945 7,518,998
Others 100,000 50,000
10,574,433 9,067,998
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18. CASH & BANK BALANCES:
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2001 2000
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Cash in hand 1,070,761 631,255
Cash with banks 709,973 7,868,181
1,780,734 8,499,436
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19. SALES:
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2001 2000
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Export Sales 143,236,409 121,605,066
Local Sales 18,734,430 19,723,456
Conversion receipts 31,278,345 -
Sizing receipts 4,159,046 -
Waste Sales 420,935 4,216,314
Custom rebate 5,110,231 5,614,179
202,939,396 151,159,015
Less:
Foreign commission 4,127,128 2,125,444
Local commission 22,357 50,160
Export claims - 653,230
4,149,485 2,828,834
198,789,911 148,330,181
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20. COST OF SALES:
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2001 2000
NOTE RUPEES RUPEES
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Opening stock � Finished goods 18,607,949 15,132,208
Cost of goods manufactured 20.1 156,847,897 144,607,602
175,455,846 159,739,810
Closing stock of finished goods (14,483,945) (18,607,949)
160,971,901 141,131,861
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20.1. COST OF GOODS MANUFACTURED:
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2001 2000
NOTE RUPEES RUPEES
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Raw material consumed 20.1.1 103,938,606 104,927,655
Stores & spares consumed 7,279,371 1,353,392
Wages salaries and amenities 12,081,161 10,659,145
Sizing expenses 20.1.2 15,273,487 5,545,909
Mending, dying, folding & packing 2,396,261 4,88,623
Freight, loading, unloading & octroi 319,497 224,575
Repair & maintenance 1,295,932 369,916
Fuel & power 8,702,180 11,810,939
Depreciation 5,123,676 4,042,591
Insurance 136,155 344,792
Other overheads - 522,660
156,546,326 144,590,197
Work in process:
Opening stock 2,198,959 2,216,364
Closing stock (1,897,388) (2,198,959)
301,571 17,405
156,847,897 144,607,602
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20.1.1. RAW MATERIAL CONSUMED:
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2001 2000
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Opening stock 7,274,507 4,467,620
Purchases 106,507,349 107,734,542
113,781,856 112,202,162
Closing stock (9,843,250) (7,274,507)
103,938,606 104,927,655
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20.1.2. SIZING EXPENSES:
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2001 2000
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Opening balance 1,188,138 -
P.V.A 3,684,731 2,364,376
Strach 4,144,300 3,023,050
Tallow 358,282 112,106
Chemical 19,485 88,744
Electrical charges 611,995 -
Gas charges 3,507,843 -
Telephone charges 45,836 232
Freight octroi and taxes 702,909 -
Repair and maintenance 511,552 -
Salaries & wages 1,445,764 649,442
Over time 278,585 -
Worker�s welfare 48,391 -
Rice 86,114 -
Swereage expenses 1,432 -
Sizing charges 133,398 496,097
16,768,755 6,734,047
Less Closing Balance 1,495,268 1,188,138
15,273,487 5,545,909
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21. ADMINISTRATIVE EXPENSES:
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2001 2000
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Directors remuneration 1,740,000 756,000
Salaries, and amenities 828,881 1,045,808
Travelling & conveyance 301,577 96,565
Rent, rates & taxes 337,788 337,788
Printing & stationery 370,893 303,390
Telecommunication charges 1,012,924 1,120,913
Electricity expenses 192,248 167,691
Motor Vehicle running 868,880 489,953
Fee & subscription 573,513 373,223
Entertainment 148,840 124,394
Audit fee 40,000 30,000
Legal & professional charges 60,000 6,250
Newspapers & periodicals 3,356 4,399
Insurance 815,191 354,500
Depreciation 437,957 518,608
Miscellaneous 77,107 68,119
Donation 17,328 -
Other expenses 8,254 -
7,834,737 5,797,601
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22. SELLING & DISTRIBUTION:
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2001 2000
RUPEES RUPEES
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Advertisement 51,100 30,900
Selling & distribution 10,562,747 9,365,807
10,613,847 9,396,707
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23. OTHER INCOME:
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2001 2000
RUPEES RUPEES
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Sale of scrap - 150,000
Profit on PLS account 6,393 9,067
6,393 159,067
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24. FINANCIAL CHARGES:
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2001 2000
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Mark up / Interest on:
Long term loans 3,226,458 3,945,470
Liabilities under Finance Lease 194,679 420,657
Short term running finance Lease 7,625,983 6,035,514
Worker�s profit Participation Fund. 20,605 44,887
Bank charges and commission. 794,553 819,059
11,862,278 11,265,587
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25. TAXATION:
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2001 2000
RUPEES RUPEES
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Provision for Taxation 3,421,227 1,045,140
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