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Mohammad Farooq Textile Mills Limited’s financial results for the year ended June, 2012

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Karachi, December 10, 2012 (PPI-OT): As required under Listing Regulation No. 17 of Karachi Stock Exchange, we are pleased to enclose financial results of Mohammad Farooq Textile Mills Limited (MFTM) for the year ended June 30, 2012.

Financial Results of Mohammad Farooq Textile Mills Limited for the Year Ended June, 2012

We have to inform you that the Board of Directors of Mohammad Farooq Textile Mills Limited in their meeting held on Saturday, December 8, 2012 at 03:30 p.m. at 50-B, South Circular Avenue, Phase II, Defence Housing Authority, Karachi, recommended the following:

(i) Cash Dividend                                    -Nil-

And/ Or

(ii) Bonus Issue                                     -Nil-

And/ Or

(iii) Right Shares                                   -Nil-

And/ Or

(iv) Any Other Entitlement/Corporate Action          -Nil-

And/ Or

(v) Any Other Price-Sensitive Information            -Nil-

The Financial Results of the Company is as follows.

(Rs. ‘000)

(Rs. ‘000)

For the year

For the year

Ended 30-06-2011

Ended 30-06-2012

Restated

Sales

37,533

225,127

Cost of goods sold

(50,653)

(449,498)

——

——-

Gross (Loss)

(13,120)

(224,371)

Other operating income

3,387

21,430

——

——-

(9,733)

(202,941)

——

——-

Distribution cost

(7,567)

Administrative expenses

(11,157)

(23,016)

Finance cost

(21,596)

(43,282)

Other charges

(72)

Writeoffs to net realizable values

1,059

(59,450)

——

——-

(31,694)

(133,387)

——

——-

(Loss) before taxation

(41,427)

(336,328)

Taxation

2,227

(23,456)

——

——-

(Loss) after taxation

(39,200)

(359,784)

Other Comprehensive Income
incremental depreciation arising from revaluation
of property, plant and equipment

37,540

Deferred tax relating to component of
comprehensive income

——

——-

Other Comprehensive Income-net off tax

37,540

——

——-

Total (loss) after other comprehensive income

(39,200)

(322,244)

——

——-

(Loss) per share

(2.08)

(19.05)

The auditors’ observation in its report are as under:

The financial statements where it has been mentioned that the financial statements of the company have been prepared on net realizable value basis and not on going concern but the management has not conducted any valuation of the assets and liabilities to arrive at their realizable value.

The management has an opinion that the carrying values of assets and Liabilities are closed to their realizable value; therefore there is no such need of the valuation. However, we believe that their realizable value will be significantly different from their carrying amounts in the financial statements.

The company is also engaged in a compromise agreement with the financial institution which is still under negotiation and not finalized for more than a year for the settlement of their Bank liabilities therefore compromise agreement can’t be made basis for the valuation.

There is an outstanding balance of Rs. 49.7 million on account of amounts due to staff provident fund. Nonpaymwnt of the funds liability is a violation of section 227 of Companies Ordinance, 1984. The Securities and Exchange Commission of Pakistan (SECP) vide its letter dated May 24, 2010 had allowed deferment of the payment of Provident Fund which was payable in monthly installments of Rs. 0.5 million to the Fund.

However, due to liquidity problem the company could not pay the installments from September 2010 onwards, Further, staff gratuity of Rs. 5.7 Million was not paid to employees on their full and final settlements.

In our opinion and to the best of our information and according to the explanations given to us, the balance sheet, profit and loss account, cash flow statement and statement of changes in equity together with the notes forming part thereof don’t give a true and fair view of the state of the Company’s affairs as at June 30, 2012 and of the loss, its cash flows and changes in equity for the year then ended.

The Annual General Meeting of the Company will be held at the Company’s Mills premises Plot Nos.6 and 7, Sector 21, Korangi Industrial Area, Karachi on Saturday, December 31, 2012 at 03:30 p.m.

The Share Transfer Books of the Company will be closed from December 25, 2012 to December 31, 2012 (both days inclusive).

For more information, contact:
Mohammad Farooq Sumar
Chairman
Mohammad Farooq Textile Mills Limited
Plot 6 and 7, Sector 21,
Korangi Industrial Area, Karachi
P.O. Box: 4628
Tel: (021) 5011571-5, 5023006-8,
Fax: (021) 5011607, 5015498,
E-mail: mftml@cyber.net.pk
Web: www.mohammadfarooq.com.pk

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