DIRECTORS’ REPORT TO THE MEMBERS

 

Your directors are pleased to present 2nd quarter and half yearly accounts for the period ended December 31, 2007.

 

The company has earned net profit of Rs. 1.095 million as compared to net loss of Rs. 10.674 million of corresponding period of last year. The non provision of financial charges of Rs. 5.998 million on long term morabaha in current period has resulted in profit. The financial charges have not been accounted for due to litigation with bank. Had financial charges been accounted for, the loss for the period would be Rs. 4.903 million as compared to loss of Rs. 10.674 million for the corresponding period of last year. It is also due to better utilization of production facilities, better sale rates and strict control on operating expenses.

 

Auditors have qualified the report that mark up aggregating to Rs. 5.998 million on financial institution’s lending as referred in note 4 of the interim condensed financial statements has not been accrued in the interim condensed financial statements. The financial charges have not been accounted for due to litigation with bank. Due to this, current liabilities and accumulated losses are understated and profit for the half year is overstated by that amount.

 

Earning per share (EPS) for the 2nd quarter is Rs. 0.15 and Rs. 0.07 for half year as compared to negative (EPS) of Rs. 0.30 for 2nd quarter and Rs. 0.70 for half year in the corresponding period of last year.

 

There has been no change in the position of on going court cases with the bank, as reported in the director’s report of the financial statements for the year ended 30.06.2007.

 

Transactions with related parties are carried out at arms length. The prices are determined in accordance with comparable uncontrolled price method. The power if purchased from related parties is at WAPDA power tariff.

 

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 future.

 

 

                                                                              for and on behalf of the Board 

 

Faisalabad.                                                                                                           Zahid Anwar

28.02.2008                                                                                                          Chief Executive