annual report 2016 A-4 Half report 2016 A-4 Half... · 2017. 1. 3. · Company Secretary Mr. Ali Nawaz Bhatti Registered Ofﬁce Ofﬁce No 17, 2nd Floor, Anique Arcade, I-8 Markaz,

ANNUAL REPORT

2016

Contents

I

II.

III.

IV.

V.

VI.

VII.

VIII.

IX.

X.

XI.

XII.

XIII.

XIV.

XV.

XVI.

Vision and Mission Statement

Company Information

Our Values

Notice of Annual General Meeting

Director's Report to the Shareholders

Financial Highlights

Statement on Corporate Financial Reporting Frame Work

Review Report to the members

Statement of Compliance with Code of Corporate Governance

Financial Statements DKL

Auditor's Report to the Members

Statement of Financial Position

Statement of Profit and Loss

Statement of Comprehensive Income

Statement of Cash Flows

Statement of Changes in Equity

Notes to the Financial Statements

01

02

04

05

06

14

18

22

24

28

31

32

33

34

35

36

XVII.

XVIII.

XIX.

XX.

XXI.

XXII.

XXIII.

XXIV.

XXV.

Consolidated Financial Statements

Auditor's Report to the Members

Statement of Financial Position

Statement of Profit and Loss

Statement of Comprehensive Income

Statement of Cash Flows

Statement of Changes in Equity

Notes to the Financial Statements

Pattern of Share Holding

Proxy Form

51

53

54

55

56

57

58

76

78

VISION STATEMENT

We aspire to be known for the quality of our management and develop rela�onships with our stakeholders based on coopera�on and ethical values.

MISSION STATEMENT

We strive to achieve excellence by mee�ng expecta�ons of stakeholders through efficient, effec�ve and organized management keeping constant high quality standards.

DREKKAR KINGSWAY LIMITEDDrekkarKingsway

1

Company Information

Drekkar Kingsway Limited was registered on June 28, 1993 under Companies

Ordinance 1984 as Private Limited Company and subsequently converted into Public

Limited Company as on June 29, 1994. The shares of the Company are quoted on

Pakistan Stock exchange. The primary business of company was manufacturing of all

type of electrical appliances, cosme�cs, toiletries, leather goods, machinery,

components and parts. In 1996 the company sold its plant and machinery. The

Company is currently engaged in making equity investments in undervalued and

special situa�ons.

We are able to bring highest poten�al cogs who have demonstrated their skills to

compete and sustain at local and interna�onal avenues, with those business

visionaries, investors and experts that will enable opportuni�es and poten�al for all

the stakeholders rather than provide a mere assessment.

Board of Directors 1.

2.

3.

4.

5.

6.

7.

Mr. Humayun Gauhar

Mr. Rais Umair Habib Ahmed

Mr. Muhammad Ubaid

Mr. Adnan-Ullah Tauseef

Mr. Kamal Pasha

Mr. Taj Muhammad

Mr. Mubasher Mehmood Abbasi

Chairman and CEO

Audit Committee 1.

2.

3.

Mr. Kamal Pasha



Chairman

Member

Member

Chairman

Member

Member

1. Mr. Ehmer Iqbal

Human Resource 1.

Remuneration 2.

Committee 3.



Mr. Taj Muhammad


2

Mr. Ali Nawaz BhattiCompany Secretary

Registered Office Office No 17, 2nd Floor, Anique Arcade,I-8 Markaz, Islamabad Phone: +92 (51) 4862330-1 Fax: +92 (51) 4862330

Share Registrar F. D. Registrar Services (SMC-Pvt) Limted. 1705, 17th Floor, Saima Trade Tower A, I.I Chundrigar Road Karachi. Phone: (+92-21) 35478192-93, 32271906 Fax : (+92-21) 32621233

Auditors

Legal Advisor

M/s. Horwath Hussain Chaudhary & Co.

Mr. Ch. Abdul Kahliq


3


Our Values

The Company's Policy is to conduct business with honesty and integrity and to be ethical

in all its dealings showing respect for the interest of those with whom it has relationships.

The Company complies with all laws and regulations. All employees are expected to

familiarize themselves with laws and regulations governing their individual areas of

responsibility, and not to transgress them. In case of any doubt the employees are

expected to seek necessary advice. The Company believes in fair competition and

supports appropriate competition laws.

The Company does not support any political party nor contribute to the funds of groups

whose activities promote party interests.

The Company is committed to run its business in an environment that is sound and

sustainable. As a good corporate entity, the Company recognizes its social

responsibilities and will endeavor to contribute to community activities as a whole.

The Company believes in and fully adheres to the principles of reliability and credibility

in its financial reporting and in transparency of business transactions.

The Company is an equal opportunity employer. Its employee recruitment and

promotional policies are free of any gender bias and are merit and excellence oriented. It

believes in providing its employees safe and healthy working conditions and in

maintaining good channels of communications.

The Company expects its employees to abide by certain personal ethics whereby

Company information and assets are not used for any personal advantage or gain. Any

conflict of interest should be avoided, where it exists it should be disclosed and guidance

sought.

1.

2.

3.

4.

5.

6.

7.

The Board of Directors has constituted the 'Board Audit Committee' to ensure

Compliance of above principles.

4


Notice of Annual General Meeting

Notice is hereby given that the 23rd Annual General Meeting of Drekkar Kingsway

Limited will be held on Friday, 28 October, 2016 at 10:00 am at Islamabad Club, to

transact the following business: -

To confirm the minutes of 23rd Annual General Meeting held on Friday 30, October

2015.

To receive, consider and adopt the Audited Accounts of the Company for the year

ended June 30, 2016 together with Report of the Director’s and Auditor's thereon.

To appoint Auditors for the year ending on 30th June 2017 and fix their

remuneration. The retiring Auditors Horwath Hussain Chaudhry, Chartered

Accountants, being eligible, have offered themselves for re-appointment.

To consider any other business with the permission of the Chair.

On behalf of the Board

Ahmer IqbalChief Executive Office

Islamabad October 03, 2016

1.

2.

3.

4.

5

The financial statements prepared by the management of the Company present fairly its state of affairs, the result of its operations, cash flows and changes in equity.Proper books of accounts of the Company have been maintained.Appropriate accounting policies have been consistently applied in preparation of the financial statements and accounting estimates are based on reasonable and prudent judgment.

Director Report


During the year under review, we directed all our efforts to improve the financial and operational

condition of the company to create a fair value for our shareholders. During the year under review,

equity base of the company has been increased from 12.69 million to 37.92 million. Company

invested its available funds in equity investments, in paying long term liabilities and paying

dividend to our worthy shareholders. To this effect, sizeable investments were made in oil, energy,

cements, pharmaceutical and FMCG. The loss on investment amounting to Rs. 30.567 Million was

mainly because of crunch in oil prices, and diminution in the value of Shezan International Limited

during the year. Company has purchased 95.5% controlling shares of Invest Forum (Private)

Limited against cash consideration of Rs. 17,190,000 @ 35.29 per share during the year. This has

helped a lot in turning the Group's position better. Total loss for the period under review was

reduced to Rs. 11.563 Million resulting loss per share to Rs. 1.35 as shown in the accompanying

financial statements.

The Board members are pleased to state that the management of the Company is committed to

good corporate governance and complying with the best practices. In compliance with the Code of

Corporate Governance, the Directors are pleased to state as follows:

6

Ahmed,


7


8.89(Restated)

8


of M/S

9


in Financial

highlights.

10


three Two

11

16


12


(Ehmer Iqbal)

Chief Executive Officer

13


14


15


50,000,000

40,000,000

30,000,000

20,000,000

10,000,000

(10,000,000)

(20,000,000)

(30,000,000)

(40,000,000)

Net Equity

Net Equity

CURRENT LIABILITIES

16,000,000

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

-

Year

2010

Year

2011

Year

2012

Year

2013

Year

2014

Year

2015

Year

2016

CURRENT LIABILITIES

Year

2015

Year

2016

Year

2010Year

2011

Year

2012

Year

2013

Year

2014

16


70,000,000

60,000,000

50,000,000

40,000,000

30,000,000

20,000,000

10,000,000

Year

2010

Year

2011

Year

2012

Year

2013

Year

2014

Year

2015

Year

2016

CURRENT ASSETS

CURRENT ASSETS

17

The Company has complied with all the requirements of the Code of Corporate Governance by

the listing regulations.

Accordingly the Directors are pleased to confirm the following:

The financial statements together with the notes thereon have been drawn up in conformity with the Companies Ordinance, 1984. These statements present fairly the Company's state of affairs, the results of its operations, cash flow and changes in equity.

Proper books of accounts of the Company have been maintained.

Appropriate accounting policies have been consistently applied in the preparation of financial statements which conform to the International Accounting Standards as applicable in Pakistan. The accounting estimates, wherever required are based on reasonable and prudent judgment.

The International Financial Reporting Standards, as applicable in Pakistan, have been followed in the preparation of financial statements.

The system of Internal Control is sound in design and has been effectively implemented and monitored.

There are no significant doubts upon the Company's ability to continue as a going concern.

There has been no material departure from the best practices of Corporate Governance, as required by the listing regulations.

ii)

iii)

iv)

v)

vi)

vii)

Audit Committee was established by the Board to assist the directors in discharging their

responsibilities, Corporate Governance, Financial Reporting and Corporate Control. The

Committee consists of three members.

The Board Audit Committee is responsible for reviewing reports of the company's financial results,

audit and adherence to standards of the system of management controls. The Committee reviews

the procedures, ensures their independence with respect to the services performed for the Company

and makes recommendations to the Board of Directors.


STATEMENT ON CORPORATE FINANCIAL REPORTING FRAME WORK

AUDIT COMMITTEE

18

The Audit held four meetings during the year under review, each before the Board of

Directors meeting to review the financial statements, internal audit reports and

compliance of the Corporate Governance requirements. These meetings included

meeting with external auditors before and after completion of audit and other statutory

meetings as required by the Code of Corporate Governance.

In order to put in place professional standards and corporate values for promotion of

integrity of the Board, senior management and other employees, the Board has approved

and disseminated a Code of Conduct, defining therein acceptable and unacceptable

behaviors. The same has been placed on the Company's Website.

The numbers of employees as on 30 June 2016 were 11 compared to 10 of last year.

Human Resource and Remuneration Committee was established by the Board to assist

the Directors in discharging their responsibilities with regard to selection, evaluation,

compensation and carrier planning of key management personnel. It is also involved in

recommending improvements in Company's human resource policies and procedures

and their periodic review. The Committee consists of three members. Two members of

the Committee are Independent and one is non executive director.

All transactions with related parties are reviewed and approved by the Board. The Board

approved pricing policy for related party transactions as disclosed in the notes to the

accounts.

Mr. Tauseef Ullah Adnan

Mr. Kamal Pasha


Chairman

Member

Member

The present constitution of the Committee is as under:


CODE OF CONDUCT

NUMBER OF EMPOLYES

HUMAN RESOURCE AND REMUNERATION COMMITTEE

RELATED PARTY TRANSACTIONS

19

The requirements of the Code of Corporate Governance set out by the Stock Exchanges

in their Listing Regulations, relevant for the year ended 30 June 2016 have been duly

complied with. A statement to this effect is annexed with the report.

Company's periodic financial statements for the current financial year including annual

reports for the last three years are available on the Company's website

www.drekkarkingsway.com for information of the investors.


The company strictly complies with the standards of the safety rules & regulations. It

also follows environmental friendly policies.

Short medium and long term targets are set by the Board. Management endeavors to

achieve those through better planning, concerted efforts and hard work. Each year a

comprehensive business plan is chalked out and duly approved by the Board. The

management believes that based on orders in hand and expansion in production and

marketing facilities, the Company will operate as a “Going Concern” till indefinite

period.

Communication with the shareholders is given high priority. Annual, Half Yearly and

Quarterly Accounts are circulated to them within the time specified in the Companies

Ordinance, 1984. The Company also has a web site, which contains up to date

information on Company's activities and financial reports. Every opportunity is given to

the individual shareholders to attend and ask freely the questions about the Company'

affairs at the Annual General Meeting

STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE

GOVERNANCE

WEB PRESENCE

SAFETY AND ENVIRONMENTS

BUSINESS PLANS & ACHIEVEMENT OF TARGETS

COMMUNICATION

20


The Board would like to thank all of their stakeholders and customers and suppliers of the

Company for their valuable support and sheer confidence. Such confidence has allowed

the Company to perform well in a difficult business environment.

The Board would like to thank executives, staff members and workers of the Company

for their commitment, dedication and hard work. We continue to pray to Allah for the

continued success of your Company and for the benefit of all stakeholders, and the

country in general.

For and on Behalf of the Board

Dated: 28 September 2016Islamabad

(Ehmer Iqbal)Chief Executive Officer

ACKNOWLEDGMENT

21


REVIEW REPORT TO THE MEMBERS ON THE STATEMENT OF

COMPLIANCE WITH THE BEST PRACTICES OF THE CODE OF

CORPORATE GOVERNANCE

We have reviewed the Statement of Compliance with the best practices contained in the

Code of Corporate Governance prepared by the Board of Directors of DREKKAR

KINGSWAY LIMITED to comply with the requirements of chapter XI of the Listing

Regulations of the Karachi, Lahore and Islamabad Stock Exchanges where the Company

is listed.

The responsibility for compliance with the Code of Corporate Governance is that of the

Board of Directors of the Company. Our responsibility is to review, to the extent where

such compliance can be objectively verified, whether the Statement of Compliance

reflects the status of the Company's compliance with the provision of the Code of

Corporate Governance and report if it does not. A review is limited primarily to inquiries

of the Company's personnel and review of various documents prepared by the Company

to comply with the Code.

As part of our audit of the financial statements we are required to obtain an understanding

of the accounting and internal control systems sufficient to plan the audit and develop and

effective audit approach. We have not carried out any special review of the internal

control system to enable us to express an opinion as to whether the Board's statement on

internal control covers all controls and the effectiveness of such internal controls.

Regulation 35 (X) of the Listing Regulations requires the Company to place before the

Board of Directors of their consideration and approval related party transactions

distinguishing between transactions carried out on term equivalent to those that prevail in

arm's length transactions and transactions which are not executed at arm's length prices

recording proper justification for using such alternate pricing mechanism. All such

transactions are also required to be separately placed before the Audit Committee. We are

only required and have ensured compliance of the

22

requirement to the extent of approval of related party transactions by the Board of

Directors and placement of such transactions before the Audit Committee. We have not

carried out any procedures to determine whether the related party transactions were under

taken at arm's length prices or not.

Based on our review nothing has come to our attention which causes us to believe that the

Statement of Compliance does not appropriately reflect the Company's compliance, in all

material respects, with the best practices contained in the Code of Corporate Governance

as applicable to the Company for the year ended June 30, 2016.

HORWATH HUSSAIN CHAUDHURY & CO.Chartered AccountantsShahzad Qazi (FCA).

Date: 26 September, 2016Islamabad


23


STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE

GOVERNANCE

This statement is being presented to comply with the Code of Corporate Governance

(CCG) contained in Regulation No. 35 of listing regulations of the stock exchanges for

the purpose of establishing a framework of good governance, whereby a listed company

is managed in compliance with the best practices of corporate governance.

The company has applied the principles contained in the CCG in the following manner:

At year ended June 30, 2016, the Board consists of the following Non-Executive

and Executive Directors:

The directors have confirmed that none of them is serving as a director on more

than seven listed companies, including this company.

1.

2.

Independent Directors Executive Directors Non-Executive Directors

Humayun Gauhar Humayun GauharMubasher Mehmood Abbasi

Rais Umair Habib Ahmed Muhammad Ubaid

Kamal Pasha Tauseef Ullah Adnan

Taj Muhammad

All the resident directors of the company are registered as tax payers and none of

them has defaulted in payment of any loan to a banking company, a DFI or an NBFI

or, being a member of a stock exchange, has been declared as a defaulter by that

stock exchange.

3.

24

During the year no casual vacancy was arised.

The company has prepared a “Code of Conduct” and has ensured that appropriate

steps are taken to disseminate it throughout the company along with its supporting

policies and procedures.

The board has developed a vision/mission statement, overall corporate strategy and

significant policies of the company prepared by the management. A complete record

of particulars of significant policies along with the dates on which they were

approved or amended has been maintained.

All the powers of the board have been duly exercised and decisions on material

transactions, including appointment and determination of remuneration and terms

and conditions of employment of the Chief Executive and other executive directors,

have been taken by the board.

The meetings of the board were presided over by the Chairman and the board met at

least once in every quarter. Written notices of the board meetings, along with agenda

and working papers, were circulated at least seven days before the meetings. The

minutes of the meetings were appropriately recorded and circulated.

During the year, the Board has arranged orientation courses for the Directors.

During the year no new appointment of CFO, Company Secretary and Head of

Internal Audit was approved by the Board. However, remuneration of the above

officers was ratified as per company policy approved by the Board.

The directors' report for this year has been prepared in compliance with the

requirements of the CCG and fully describes the salient matters required to be

disclosed.


4.

5.

6.

7.

8.

9.

10.

11.

25

The financial statements of the company were duly endorsed by CEO and CFO

before approval of the board.

The directors, CEO and executives do not hold any interest in the shares of the

company other than that disclosed in the pattern of shareholding.

The company has complied with all the corporate and financial reporting

requirements of the CCG.

The board has formed an Audit Committee. It comprises 3 members, of whom 1 is

non-executive director and the chairman of the committee is an independent

director.

The meetings of the audit committee were held at least once every quarter prior to

approval of interim and final results of the company and as required by the CCG. The

terms of reference of the committee have been formed and advised to the committee

for compliance.

The board has formed an HR and Remuneration Committee. It comprises 3

members, of whom 1 is non-executive director and the chairman of the committee is

a non-executive director.

The board has set-up an effective internal audit function within the Company.

The statutory auditors of the company have confirmed that they have been given a

satisfactory rating under the quality control review program of the ICAP, that they or

any of the partners of the firm, their spouses and minor children do not hold shares of

the company and that the firm and all its partners are in compliance with

International Federation of Accountants (IFAC) guidelines on code of ethics as

adopted by the ICAP.

12.

13.

14.

15.

16.

17.

18.

19.


26

The statutory auditors or the persons associated with them have not been appointed

to provide other services except in accordance with the listing regulations and the

auditors haveconfirmed that they have observed IFAC guidelines in this regard.

The 'closed period', prior to the announcement of interim/final results, and business

decisions, which may materially affect the market price of company's securities,

was determined and intimated to directors, employees and stock exchange(s).

Material/price sensitive information has been disseminated among all market

participants at once through stock exchange(s).

We confirm that all other material principles enshrined in the CCG have been

complied with.


20.

21.

22.

23.

CHIEF EXECUTIVE�� DIRECTOR

27

We have audited the annexed balance sheet of DREKKAR KINGSWAY LIMITED, as

at June 30, 2016 and related profit and loss account, cash flow statement and statement of

changes in equity together with the notes forming part thereof, for the year then ended, we

state that we have obtained all the information and explanations which, to the best of our

knowledge and belief, were necessary for the purposes of our audit.


AUDITOR'S REPORT TO THE MEMBERS

It is the responsibility of the company's management to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit.

We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the above said statements. An audit also includes assessing the accounting policies and significant estimates made by management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that: -

1. As stated in the note 1 to the financial statements, the company has accumulated loss of 60,279,839/- (June 30, 2015: Rs. 9,712,517/-) as at June 30, 2016 against issued, subscribed and paid up capital of Rs 100,000,000/- (June 30, 2015: Rs. 22,392,000/-)Further the company has disposed off all of its assets related to production. These circumstances give rise to significant uncertainty as to the ability of the company to continue operations as going concern in the foreseeable future. However, these financial statements do not include any adjustment relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should the company be unable to continue as going concern. The management has not prepared cash flow projection and future plan to revive the operation since closed.

28

2. During the reporting period company issued right share to shareholders on October 15, 2015 for the purpose of investment in various undervalued profitable businesses. According to plan these funds were supposed to be utilized for making equity investments, whereas management made use of these funds for the payment of dividend, repayment of directors and associated company's loan and advance of loan to Noor Capital (Private) Limited (previously an associated company).


3. An amount of Rs. 28,405,999/- advanced to Noor Capital (Private) Limited (Previously related party) during the reporting period. Remaining balance at reported date was Rs. 11,963,660/- against which no payment terms were provided.

4. As stated in note 1, the company was initially doing business as a manufacturing unit. It has disposed off all its plant and machinery and is now involved in sale purchase of shares.

a) Except for the effects of the matter stated above, in our opinion, proper books of accounts have been kept by the company as required by the Companies Ordinance, 1984;

b) in our opinion:-

I except for the matters referred in stated above the balance sheet and profit and loss account together with the notes thereon have been drawn in conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are further in accordance with accounting policies consistently applied,

ii) the expenditure incurred during the year was for the purpose of the

company's business; and

iii) the business conducted, investments made and the expenditure incurred

during the year were in accordance with the objects of the company;

29

c) in our opinion because of the effects of the matters discussed in the paragraph 1 to 4 the financial statements do not give a true and fair view of the balance sheet of Drekkar Kingsway Limited as of June 30, 2016 and of its profit and loss account, cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan, and, given the information required by the Companies Ordinance, 1984, in the manner so required and respectively do not give a true and fair view of the state of the company's affairs as at June 30, 2016 and of the loss, its cash flows and changes in equity for the year ended;


d) in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,

1980, was deducted by the company and deposited in the Central Zakat Fund

establish under section 7 of that Ordinance.

HORWATH HUSSAIN CHAUDHURY& CO.Chartered accountantsShahzad Qazi (FCA)

Dated: 26 September, 2016Islamabad.

30


Chief Executive Director

31

8.89



32



33



34

integral part

OriginallyReported)

winding

in recording of imputed markup on

recording

Shares Issued during the year

Total Comprehensive loss for the year



35


1 THE COMPANY AND ITS OPERATIONS

DREKKAR KINGSWAY LIMITEDNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED JUNE 30, 2016

Drekkar Kingsway Limited was registered on June 28, 1993 under Companies

Ordinance 1984 as Private Limited Company and subsequently converted into

Public Limited Company as on June 29, 1994. The shares of the Company are

quoted on Pakistan Stock exchange. The primary business of company was

manufacturing of all type of electrical appliances, cosmetics, toiletries, leather

goods, machinery, components and parts. In 1996 the company sold its plant and

machinery. The Company is currently engaged in making equity investments in

undervalued and special situations.

The registered office of the Company is situated at Office No. 17, 2nd Floor,

Anique Arcade, I-8 Markaz, Islamabad.

The company has accumulated loss of Rs. 60,279,839/- (June 30, 2015: Rs. 9,712,517/-) as at June 30, 2016 against issued, subscribed and paid up capital of Rs 100,000,000/- (June 30, 2015: Rs. 22,392,000/-) Further the company has disposed off all of its assets related to production. These circumstances give rise to significant uncertainty as to the ability of the company to continue operations as going concern in foreseeable future. However, these financial statements do not include any adjustment relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should the company be unable to continue as going concern.

These financial statements are the separate financial statements of the company in which investment in subsidiary company is accounted for on the basis of direct equity interest rather than on the basis of reported results. Consolidated financial statements are prepared seperately.

36


2 STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with the approved

accounting standards as applicable in Pakistan. Approved accounting standards

comprise of such International Financial Reporting Standards (IFRS) issued by

International Accounting Standards Board as are notified under the provisions of

companies ordinance 1984, and the requirements of companies ordinance 1984

and the directives issued by the Securities and Exchange Commission of

Pakistan(SECP). Where the requirements of the Companies Ordinance,1984 or

the directives issued by the SECP differ with the requirements of IFRS, the

requirements of Companies Ordinance,1984 or the directives issued by the SECP

prevails.

3 SIGNIFICANT ACCOUNTING POLICIES

3.1 Basis of Preparation

3.1.1 New Standards, Interpretations and Amendments to Published Approved Accounting Standards

The following amendments/improvements to approved accounting standards, effective for accounting periods beginning from the dates specified below and are either not relevant to the Company's current operations or are not expected to have significant impact on the Company's financial statements other than certain additional disclosures:

IAS 38

IAS 16

IFRS 14

IFRS 15

Amendment to IAS 38 'Intangible Assets' - (effective for annual

periods beginning on or after 01 January 2016).

Amendment to IAS 16'Property plant and Equipment' - (effective for

annual periods beginning on or after 01 January 2016).

Regulatory Deferral Accounts - (effective for annual periods beginning

on or after 01 January 2016).

Revenue from contracts with customer - (effective for annual periods

beginning on or after 01 January 2017).

37


IFRS 16Leases - (effective for annual periods beginning on or after 01 January

2019).

These financial statements have been prepared on the historical cost convention,

except for certain investments which are measured at fair value as described in note

14.

The preparation of financial statements in conformity with approved accounting standards requires management to make judgments, estimates and assumptions that effect the application of policies and reported amounts of assets and liabilities, income and expenses. the estimates and associated assumptions are based on historical experience, industry trends, legal and technical pronouncements and various other factors that are believed to be reasonable under the circumstances. The estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised. Significant areas involving high degree of judgments or complexity are areas where assumptions and estimates are significant to the financial statements are as follows:

Basis of Measurement

Useful lives of property, plant & equipment (notes 11)

The company reviews the useful lives of property, plant and equipment on a regular basis. Any change in estimates in future years might affect the carrying amounts of respective items of property, plant and equipment with a corresponding effect on the depreciation charge and impairment.

ii) Classification and valuation of investments (note 14.1)

The company takes into accounts its intention for classification of investment as mentioned in note 14.1 at the time of purchase. The valuation of investments is done based on the criteria mentioned in the note 3.4.3

iii) Income taxes

The company takes into account the current income tax law and the decisions taken by the appellate authorities. Instances where the company's view differs from the view taken by the income tax department at the assessment stage and where the company considers that its views on the terms of material nature is in accordance with the law, the amount is shown as contingent liability.

3.1.2

38


Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates. These financial statements are presented in Pak Rupees, which is the Company's functional currency.

3.1.3. Functional and Presentation Currency

Income tax expense comprises of current tax.

3.2 Taxation

Provision for current taxation is based on taxable income at the applicable rates of

taxation after taking into account tax credits and tax rebates, if any. Income tax

expense is recognized in profit or loss except to the extent that it relates to items

recognised directly in equity or in other comprehensive income.

3.2.1 Current Tax

Operating fixed assets are stated at cost less accumulated depreciation and impairment. Depreciation on all operating fixed assets is charged using reducing balance method at the rate specified in note 11 without taking in account the residual value. Depreciation on additions is charged from the month the asset is available for use in the year of addition and on deletion up to the month preceding the month of deletion. Maintenance and normal repairs are charged to revenue as and when incurred. Major renewals and improvements are capitalized and the assets so replaced, if any, are retired. Gains or losses on disposal of property and equipment are charged to profit and loss account.

3.3 Operating Fixed Assets

The Investments of the Company determines the appropriate classification of its

investment at the time of purchase or increase in holding and classifies its

investment through profit or loss, available for sale, held to maturity, loans and

receivables. The classification depends on purpose for which the investment were

acquired.

3.4 Investments

All investments are initially recognized at cost, being the fair value of consideration given including transaction cost associated with the investment except in the case of fair value through profit or loss investments where transaction costs are charged to the profit and loss account when incurred. ( See Note 14 for Short term Investments)

39

Investment in subsidariay is initially recognized at cost. At subsequent reporting

date, recoverable amounts estimated to determine the extent of impairment loss, if

any, and carrying amount of investment is adjusted accordingly. Impairment

losses are recoginzed as expenses in profit or loss. Where impairment loss

subsequently reverses, the carrying amounts of the investments are increased to its

revised recoverable amount but limited to the extent of initial cost of investment.

Reversal of impariment losses are recogized in the profit or loss.


3.4.1 Investment in subsidaries

The profits and losses of subsidiaries are carried forwarded in their financial statements and not dealt within these financial statements except to the extent of dividend decleared by subsidiary. When the disposal of investment in subsidiary resulted in loss of control such that it becomes an associate, the retained investment is carried at cost.

3.4.2 Investment available for sale

These are initially measured at their fair value plus directly attributable transaction cost and at subsequent reporting dates measured at fair values and gains or losses from changes in fair values other than impairment loss are recognised in other comprehensive income until disposal at which time these are recycled to profit or loss. Impairment loss on investments available for sale is recognised in the profit or loss.

3.4.3 Investments at fair value through profit or loss

Investments which are acquired principally for the purpose of selling in the near term or the investments that are part of a portfolio of financial instruments exhibiting short term profit taking, are classified as fair value through profit or loss and designated as such upon initial recognition. These are stated at fair values with any resulting gains or losses recognized directly in profit or loss.

3.5 Cash and Cash Equiva lents

Cash and cash equivalents are carried at cost. For the purpose of cash flow statement,

cash and cash equivalents comprise cash in hand and cash at banks in current and

saving accounts.

40

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument and de-recognised when the Company loses control of the contractual rights that comprise the financial assets and in case of financial liabilities when the obligation specified in the contract is discharged, cancelled or expired. All financial assets and liabilities other than at fair value through profit or loss are initially recognised at fair value plus transaction costs. Financial assets and liabilities carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are charged to profit or loss for the year. Any gain or loss on derecognition of financial assets and financial liabilities is included in profit or loss for the year.

3.6 Financial instruments


Financial assets and liabilities are offset and the net amount is reported in the balance sheet if the Company has a legally enforceable right to setoff the recognised amounts and the Company intends to settle on a net basis, or realise the asset and settle the liability simultaneously.

3.7 Finance Income and Finance Cost

Finance income comprises interest income on funds invested (including available-for-sale

financial assets), dividend income, gain on disposal of available-for-sale financial assets and

changes in fair value of investments held for trading. Interest income is recognised as it

accrues in profit or loss, using effective interest method. Dividend income is recognised in

profit or loss on the date that the Company's right to receive payment is established.

Finance costs comprise interest expense on borrowings, changes in fair value of investment carried at fair value through profit or loss and impairment losses recognised on financial assets. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using effective interest method. 3.8 Earnings per share

The Company presents basic and diluted earning per share (EPS) data for its ordinary shares.

Basic EPS is calculated by dividing the profit or loss attributable to ordinary share holders of

the Company by the weighted average number of ordinary shares outstanding during the year.

Dilued EPS is determined by adjusting the profit or loss attributable to ordinary shareholders

and the weighted average number of ordinary shares outstanding for the effects of all

dilutive potential ordinary shares.

41


42


43


Eq

uip

men

t

44


45

27,394

Printing & stationery

Fees & subscription


Legal fee

346,175

46

1,683,131


47

associated undertakings / relatedcarried

NUMBER OF EMPLOYEES

1,489,763Short term loan


48

36,2

38,0

09


49

8.89


26 September, 2016

50


AUDITOR'S REPORT TO THE MEMBERS OF DREKKAR KINGSWAY LIMITED

We have audited the annexed consolidated financial statements comprising consolidated

balance sheet of Drekkar Kingsway Limited (the Holding Company) as at June 30, 2016

and the related consolidated profit and loss account, consolidated statement of

comprehensive income, consolidated statement of changes in equity and consolidated

cash flow statement together with the notes forming part thereof, for the year then ended.

We have also expressed separate opinion on the financial statements of the Holding

Company. These financial statements are responsibility of the Holding Company's

management. Our responsibility is to express an opinion on these financial statements

based on our audit.

1. As stated in the note 1 to the financial statements, the company has accumulated loss of 41,133,524 /- (June 30, 2015: Rs. 9,712,517/-) as at June 30, 2016 against issued, subscribed and paid up capital of Rs 100,000,000/- (June 30, 2015: Rs. 22,392,000/-) Further the company has disposed off all of its assets related to production. These circumstances give rise to significant uncertainty as to the ability of the company to continue operations as going concern in the foreseeable future. However, these financial statements do not include any adjustment relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should the company be unable to continue as going concern. The management has not prepared cash flow projection and future plan to revive the operation since closed.

Our audit was conducted in accordance with the International Standards on Auditing and

accordingly included such tests of accounting records and such other auditing

procedures as we considered necessary in the circumstances. We report that:-

2. During the reporting period company issued right share to shareholders on October 15, 2015 for the purpose of investment in various undervalued profitable businesses. According to plan these funds were supposed to be utilized for making equity investments, whereas management made use of these funds for the payment of dividend, repayment of directors and associated company's loan and advance of loan to Noor Capital (Private) Limited(previously an associated company).

51

3. An amount of Rs. 28,405,999/- advanced to Noor Capital (Private) Limited (Previously related party) during the reporting period. Remaining balance at reported date Rs.11, 963,660/- against which payment terms were provided.


4. As stated in note 1, the company was initially doing business as a manufacturing unit. It has disposed off all its plant and machinery and is now involved in sale purchase of shares.

In our opinion, the consolidated financial statements do not present fairly the financial

position of Drekkar Kingsway Limited as at 30 June 2016 and the results of their

operations for the year then ended.

The financial statements of subsidiary for the year ended June 30, 2016 were audited by

another auditor and express an unmodified opinion on those financial statements.

HORWATH HUSSAIN CHAUDHURY & CO.

Chartered Accountants

Shahzad Qazi (FCA)

Date: 26 September, 2016

Islamabad

52



53



54


Ch

ief

Exe

cuti

veD

irec

tor

55



56

inco

me

Pro

fit/

(Loss

)


Ch

ief

Exe

cuti

veD

irec

tor

57


58


59


60

DREKKAR KINGSWAY LIMITEDDrekkarKingsway DREKKAR KINGSWAY LIMITEDDrekkarKingsway

61


62


63


64


65


66


67


68


69


70


71


72


73


74



26 September, 2016

75


76


77


78

Documents

annual report 2016 A-4 Half report 2016 A-4 Half... · 2017. 1. 3. · Company Secretary Mr. Ali Nawaz Bhatti Registered Ofﬁce Ofﬁce No 17, 2nd Floor, Anique Arcade, I-8 Markaz,