42494-Pak Leather Craft Annual 2019 PDF

ANNUAL REPORT
2018 - 2019
CONTENTS
Details Page No.
Corporate Profile 2
Notice of Annual General Meeting 3-6
Directors Report 7-10
Directors Report (in Urdu) 11-16
Chairmans Review 17
Chairmans Review (in Urdu) 18
Statement of Value Added 19
Six years at a glance 20
Statement of Compliance with Listed Companies
(Code of Corporate Governance) Regulation, 2017 21-22
Auditors Review Report to the Members on the Statement of
Compliance contained in Listed Companies
(Code of Corporate Governance) Regulation, 2017 23
Indendent Auditors Report to the Members 24-28
Statement of Financial Position 29
Statement of Profit or Loss 30
Statement of Comprehensive Income 31
Statement of Cash Flows 32
Statement of Changes in Equity 33
Notes to the Financial Statements 34-58
Pattern of Shareholding 59-60
Form of Proxy
CORPORATE PROFILE
BOARD OF DIRECTORS
Dr.Muhammad Shoaib Ahmed Chairman / Director

Muhammad Saleem Ahmed Director / CEO
Nayyer Ahmed Jalali Director
Azeem Ahmed Director
Bilal Ahmed Director
Umer Ahmed Director
Syed Fawad Hussain Rizvi Director
AUDIT COMMITTEE
Syed Fawad Hussain Rizvi Chairman

Bilal Ahmed Member
Umer Ahmed Member
HUMAN RESORCE & REMUNERATION

COMMITTEE
Umer Ahmed Chairman

Muhammad Saleem Ahmed Member
Bilal Ahmed Member
CHIEF FINANCIAL OFFICER &

COMPANY SECRETARY
Naseer Ahmed
BANKERS
Albaraka Bank Pakistan Ltd

NIB Bank Limited
Habib Metropolitan Bank Ltd
Habib Bank Limited
Industrial Development Bank Ltd
Faysal Bank Limited
Soneri Bank Ltd
United Bank Limited
Bank Alfalah Ltd
Bank of Khyber
EXTERNAL AUDITORS LEGAL ADVISOR
RSM Avais Hyder Liaquat Nauman Shakiel Z. Lari, Advocate

Chartered Accountants
Lahore
REGISTERED OFFICE SHARE REGISTRAR
Plot 18, Sector 7 - A NI Associates (pvt) Ltd

Korangi Industrial Area, Karachi 53, Kokan Society, Alamgir Road,
Website: www.pakleather.com Karachi - 74800
Tel: 021-34937012
021-34945892
2
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that 32nd Annual General Meeting of Pak Leather Crafts Limited will be held
at Plot No. 9, Sector 59, Malir Development Authority, Taiser Town Karachi on October 28, 2019
at 6.30 PM to transact the following business:
A) Ordinary Business:
1. To confirm minutes of the 31stOrdinary General Meeting held on October 27,2018.
2 To receive, consider and adopt the audited accounts of the Company for the year ended June
30, 2019 together with the Chairman's Review, Directors' and Auditors' Reports thereon.
3. To appoint auditors and fix their remuneration for the year ending June 30, 2020.
4. To elect seven directors of the Company as fixed by the Board in accordance with the provisions
of section 159 (1) of the Companies Act 2017 for the term of three years. The retiring directors
are Dr. M. Shoaib Ahmed, Mr. M. Saleem Ahmed, Mr. Nayyer Ahmed Jalali, Mr. Azeem Ahmed,
Mr. Bilal Ahmed, Mr. Umer Ahmed, Syed Fawad Hussain Rizvi. Retiring directors are eligible for
re-election.
B) Special Business
5. To obtain consent of the shareholders in terms of S.R.O. 470(I)/2016 dated 31 May 2016 issued
by Securities and Exchange Commission of Pakistan, for the transmission of the annual reports
including annual audited accounts, notices of annual general meetings and other information
contained therein of the Company either through CD or DVD or USB and to pass the following
resolution as an Ordinary Resolution, with or without modification:
"Resolved that consent & approval of the members of Pak Leather Crafts Limited (the "Company")
be and is hereby accorded for transmission of annual reports including annual audited accounts,
notices of annual general meetings and other information contained therein of the Company to
the members for future years commencing from the year ending on 30 June 2020 through CD
or DVD or USB instead of transmitting the same in hard copies. Resolved Further that Chief
Executive Officer or Company Secretary of the Company be and is hereby authorized to do all
acts, deeds and things, take or cause to be taken all necessary actions to comply with all legal
formalities and requirements and file necessary documents as may be necessary or incidental
for the purposes of implementing this resolution"
C) Other Business
6. To transact any other business with the permission of the Chair.
By order of the Board
Naseer Ahmed
Karachi: October 07, 2019 Company Secretary
3
1. The share transfer books of the Company will remain closed from 21-10-2019 to 28-10-2019
(both days inclusive) and no transferwill be accepted during this period.
Transfers received, complete in all respect by the Shares Registrar, M/s.N I Associates (Pvt)
Limited,53, Kokan society, Alamgir Road, Karachi-74800 by the close of business on 15.10.2019
will beconsidered in time for the purpose of payment of final cash dividend and for the purpose
of attendingand voting at the meeting.
2. A member entitled to attend and vote at this meeting may appoint another person as his/her
proxy toattend the meeting and vote for him/her. Proxies in order to be effective must be received
at theRegistered Office of the Company duly stamped and signed not less than 48 hours before
themeeting.
3. Members, who have deposited their shares into Central Depository Company of Pakistan will
furtherhave to follow the under mentioned guidelines.
A. Attending of Meeting in Person:
i) In case of individuals, the account holder or sub-account holder and/or the person whosesecurities
are in group account and their registration detail are uploaded as per the regulations,shall
authenticate his/her identity by showing his/her original Computerized National Identity Card(CNIC)/
original passport at the time of attending the meeting.
ii) In case of corporate entity, the Board of Directors resolution/power of attorney with
specimensignature of the nominee shall be produced at the time of meeting.
B. Appointment of Proxies:
i) In case of individuals, the account holder or sub-account holder and /or the person whosesecurities
are in group account and their registration details are uploaded as per the regulations,shall
submit the proxy form as per the above requirement.
ii) The proxy form shall be witnessed by two persons whose names, addresses and CNIC
numbersshall be mentioned on the form.
iii) Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be
furnishedwith the proxy form.
iv) The proxy shall produce his/her original CNIC/original passport at the time of the meeting.
v) In case of corporate entity, the Board of Directors resolution/power of attorney with

specimensignature shall be submitted along with proxy form to the Company.
4. Filing of Consent for Election of Directors
As required u/s 159(3) of Companies Act, 2017, any member who seeks to contest an election
to theoffice of a director, shall whether he/ she is retiring director or otherwise, file with the
Company, notlater than fourteen days before the date of meeting at which elections are to be
held, a notice ofhis/her intention to offer himself/herself for election as a director along with
consent to act as adirector in form 28, duly completed as required under section 167(1) of the
Companies Act, 2017;and a detailed personal profile along with office address for placement
on to the Company's websitein accordance with SECP's SRO No.634(I)/2014 dated July 10,
2014.
4
The following declaration should also be furnished as required under the Code of
CorporateGovernance and Listing Regulations of the Stock Exchange, I hereby declare that:
a) I am not serving as a director on the Boards of more than five (05) listed companies.
b) I am a registered tax payer and my National Tax No. is ------------------.
c) I have never been declared defaulter in payment of any loan to banking company, a
Development Financial Institution or a Non Banking Financial Institution.
d) Neither I nor my spouse has ever been engaged in the business of "Stock Brokerage" in anyStock
Exchange.
5. Video Conference Facility
As per Companies Act, 2017, if the Company receives consent from members holding in
aggregate10% or more shareholding residing at a geographical location, to participate in the
Annual GeneralMeeting (AGM) through video conference at least seven days prior to the date
of AGM, the Companywill arrange a video conference facility in that city subject to availability
of such facility in that city.
TheCompany will intimate members regarding the video conference facility venue at least 5 days
beforethe date of the AGM along with the complete information needed to access the facility.
If you would like to avail video conferencing facility, as per above, please fill the following and
submitto registered office of the Company at least 07 days before AGM.
I / We, __________________ of ________________ being a member of Pak Leather Crafts

Limited holder of __________ Ordinary Share(s) as per Register Folio No / CDC
Account No.______________ hereby opt for video conference facility at _________________.
6. E-voting
Pursuant to SECP S.R.O No. 254(I)/2018 dated February 22, 2018 members may also exercise
theirright to vote through e-voting
The financial statements of the Company for the year ended June 30, 2019 along with reports
havebeen placed at the website of the Company.
7. Transmission of Annual Financial Statements through email
The Securities and Exchange Commission of Pakistan vide SRO 787(1)/2014 dated September
08,2014 has allowed companies to circulate annual balance sheet, profit & loss account, auditors'
anddirectors' reports along with notice of annual general meeting to its members through e-mail.
Members who wish to avail this facility can give their consent.
5
STATEMENT U/S 134(3) OF THE COMPANIES ACT, 2017
Selection of independent directors:
In compliance of Section 166(3) of the Companies Act, 2017 for an independent director, consent
paper will be accepted from those persons who are compliant of Section 166(2) of Companies
Act, 2017.
Circulations of Annual Reports through CD/DVD/USB:
Securities and Exchange Commission of Pakistan has vide S.R.O 470(I)/2016 dated 31 May
2016 allowed the companies to circulate the annual reports including annual audited accounts,
notices of annual general meetings and other information contained therein of the Company to
its members through CD/DVD/USB subject to consent of the shareholders in the general meeting.
This will save time and expenses incurred on printing of the annual report. The Directors of the
Company in their meeting held on September 27, 2018 has recommended the transmission of
Annual Audited Accounts to the members at their registered addresses instead of Hard copies,
however, the Company shall supply the hard copies of the aforesaid document to the shareholders
on demand, free of cost, within one week of such demand. After approval of the shareholders,
the Company will place a Standard Request Form on its website to communicate their need of
hard copies of the documents along with postal and email address of the Company Secretary/Share
Registrar to whom such requests shall be made. The directors are not interested, directly or
indirectly, in the above business except to the extent of their investment as has been detailed
in the pattern of shareholding annexed to the Directors Report.
6
DIRECTORS REPORT
The Directors of the Company are pleased to present the Annual report together with the audited
financial statements of the Company for the year ended June 30, 2019 and auditor's report thereon.
ECONOMIC OVERVIEW
There was considerable slowdown in the economic activities of the Country during the year 2018-
19 as the overall business environment of the country remained challenging. Economic measures
taken by the government to correct the fiscal imbalances affected the performance of the industrial
sector. Tightening in monetary policy, currency depreciation, and imposition of regulatory measures
dampened industrial activities in the Country..
COMPANY OVERVIEW
The year 2018-19 was a landmark year for the Company as the bottom-line of the profit and loss
account turned into green after five consecutive loss making years.
The financial results of the Company for the year under report are shown below.
2019 2018
Rupees Rupees
Profit / Loss before taxation 5,061,354 (4,772,726)
Taxation (915,627) (516,877)
Profit / Loss after tax 4,145,727 (5,289,603)
Accumulated (Loss) Brought Forward (400,627,157) (395,337,554)
Accumulate (Loss) Carried Forward (396,481,430) (400,627,157)
During the year under review, the company succeeded to record turnover of Rs. 76.580 (M) registering
an improvement 48.16% over last year. In the directors report of previous year it was reported that
your directors are adamant to bring the Company out from the losses by increasing the turnover
and exercising economies of scale in expenses. By the grace of Almighty the goal is achieved.
Resultantly, the Company registered an after tax net profit of Rs. 4.15 (M) for the year under review
as compared to after tax loss of Rs 5.29 (M) last year
COMMENTS ON AUDITORS' REPORT OBSERVATIONS
Material Uncertainty relating to Going Concern:
For the last two years the Company has started performing well. Lost share of export market being
regained and local revenues are also increasing. It is very well disclosed by the reviewed financials
of half year ended 31.12.2018 and under audit annual account year ended 30.6.2019. Management
also has large orders in hand from export customers and local customers. Company is turning
around in after tax profit of Rs.4.15 million comparing with the after tax loss of (Rs. 5.289) million.
In depth study further reveals that the Company incurred heavy loss of Rs. 20.974 million for the
first time in the year 2013-14. However the company survived and managed to reduce the losses
at gradual diminishing scale for five years and now the company is reporting the bottom line in
green. The management and the sponsors are of the view and confident that when the Company
sustained to survive as a going concern when it was making losses, it will InshaAllah, definitely
remain as a going concern. Now the company is making profits and reducing its accumulated losses.
The management is further doing all out efforts to improve the operating performance.
1. Last year a sum of Rs. 7.00 million was invested in machinery to improve the productivity in
terms of quality and quantity. We are now able to prepare wet leathers and dry leathers
separately without delaying production times.
2. Visits to foreign customers in Indonesia, Korea, Cambodia and Thailand and participation in
APLF 2019 in Hong Kong has improved the export sales this year, which is our high margin
sales segment as depicted below:
Export in 2017: 26.48 million, 2018: 38.88 million, and 2019: 31.01 million. Prior to last three
years export was very negligible i.e. in 2016 export was only Rs.0.47 million.
7
DIRECTORS REPORT
3. We also succeeded to add two local customers and hence local revenues are also improving.
4. Economies are exercised in cost of production which is depicted from the improvement in gross
profit to sale ratio.
Stock in trade:
Old stocks in trade have been appropriately written down and reported at net realizable value. We
believe that its sale in future will fetch amount more than its carrying value.
Trade debts:
The company provides for debts considered doubtful and write off the balances considered bad.
Bad debts of Rs. 2.151 million have been written off during the year and doubtful trade debts of Rs.
9.376 million against which 100% provision was made in the prior periods have also been written
off during the year. We believe that trade debts are good and fully recoverable. We are taking
measures for the recovery of these receivables.
Recovery suits filed by banks and non recording of mark up
The auditors have drawn attention to the information disclosed in Note 18 to the financial statements
which does not require further explanation.
CORPORATE AND FINANCIAL REPORTING
In compliance with the applicable listing regulations of Pakistan Stock Exchange, the directors of
the company do hereby declare the following:
a) The financial statements prepared in conformity with the requirements of companies Act. 2017
by the management of the company, present fairly its state of affairs, the result of its operations,
cash flow and changes in equity.
b) Proper books of account of the listed company have been maintained.
c) Appropriate accounting policies have been consistently applied in preparation of financial
statements. Accounting estimates are based on reasonable and prudent judgment.
d) International Accounting Standards, as applicable in Pakistan, have been followed in preparation
of financial statements and any departure there from has been adequately disclosed.
e) The management is of the opinion that the company has sound system of internal control.
f) The Company's ability to continue as a going concern is effective as discussed in Note 1.2 to
the financial statements.
g) There has been no material departure from the best practices of corporate governance, as
detailed in the listing regulation.
KEY OPERATING & FINANCIAL DATA:
The key operating & financial data is mentioned on Page No. 20
EARNINGS PER SHARE (EPS)
The profit per Share is Rs. 1.22 (2018: loss per share Rs.1.56)
BOARD AUDIT COMMITTEE
The Board Audit Committee is comprised of one Independent Non-Executive director as Chairman
and two Non-Executive Directors as member of audit committee. The terms of reference include
reviews of annual and quarterly financial statements, internal audit report, information before
dissemination to Stock Exchanges and proposal for appointment of external auditors for approval
of the shareholders, apart from other matters of significant nature. Four meeting were held during
the period under review.
8
DIRECTORS REPORT
NUMBER OF BOARD MEETING

During the year, four board meetings were held, which were attended by the Directors as under:
S. No. Names No. of Meetings Attended / held
1. Mr. M. Saleem Ahmed (CEO) 4/4

2. Dr. M. Shoaib Ahmed 1/4
3. Mr. Nayyer Ahmed Jalali 3/4
4. Mr. Bilal Ahmed 3/4
5. Mr. Azeem Ahmed 4/4
6. Mr. Umer Ahmed 4/4
7. Syed Fawad Husain Rizvi 2/4
ELECTION OF DIRECTORS
The term of the present board of directors is expiring and election of fresh board of directors will
be held in the forthcoming annual general meeting to be held on October 28th, 2019.
Retiring directors:
Mr. M. Saleem Ahmed
Dr. M. Shoaib Ahmed
Mr. Nayyer Ahmed Jalali
Mr. Bilal Ahmed
Mr. Azeem Ahmed
Mr. Umer Ahmed
Syed Fawad Husain Rizvi
Retiring directors are eligible for re-election
PURCHASE / SALE OF SHARES
The Directors, CEO, CFO, Company Secretary and their spouses and minor children did not purchase
or sale any shares of the Company during the period under review.
PATTERN OF SHAREHOLDING
The pattern of shareholding as on June 30, 2019 is annexed with this report.
AUDITORS
Present auditors M/s.RSM Avais Hyder Liaquat Nauman retire and being eligible offer themselves
for re-appointment for the year 2019-2020.
SOCIAL AND ENVIRONMENTAL RESPONSIBILITY POLIC
Being a conscientious member of the corporate community, the Company contributes generously
to various social and charitable causes including towards health and education sectors. In this
regard, it has worked with many reputable organizations and associations. Currently our organization
pays monthly to Pakistan Tanner's Association Southern Zone Environmental Society also we are
proudly paying for students studying at National Institute of Leather Technology and have made our
unit available for students to visit yearly and examine how leather is prepared. We also provide
internship for graduating students to help them enter the market with confidence.
The Company is fully committed for acting in an environmentally responsible manner. To achieve
this result, we:
1. Ensure our product and operations comply with relevant environmental legislation and regulations.
All our chemicals are REACH certified and our leathers are tested at random in various countries
where we pass with exceptional results. We certify our leathers do not contain Chrome VI or
AZO Dyes or any other banned substance or hazardous substance.
9
DIRECTORS REPORT
2. Maintain and continually improve our environmental management systems to conform to the
stringent requirements as dictated by specific markets or local regulations. As such we are fully
cooperative with Effluent Treatment Plant requirements.
3. Operate in a manner that is committed to continuous improvement in environmental sustainability
through recycling, conservation of resources, prevention of pollution, product development,
and promotion of environmental responsibility amongst our employees.
STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE
The statement of compliance with the Code of Corporate Governance is annexed with this report.
FUTURE OUTLOOK
The business environment in the Country remains challenging. The Country is passing through a
critical phase as the government has embarked on an Economic reform agenda. Due to the corrective
measures taken by the government, the macroeconomic indicators of the Country are expected to
revert to a stable trajectory in due course. However, the growth rate is likely to be affected in the
short term.
With the rising dollar disparity we are now able to cater to more export customers. We have orders
in hand which exceed our capacity.
We plan to visit Hong Kong, Cambodia, Thailand and China in near future to extract more business.
APLF 2020 will be more beneficial as the company will represent itself second year in a row after
a pause of nearly 10 years. We are hopeful this is will bring much needed attention to our abilities
to perform.
The company is looking forward to settle its liabilities with banking institutions in a respectful manner.
In the meantime all financial needs will be taken care of by the directors as and when needed.
Currently no financial constraint is on working capital and company is doing well to manage its day
to day expenses.
ACKNOWLEDGEMENT
The Board of Directors would like to place on record its appreciation to all our Patrons, Dealers,
Suppliers and Employees for their valuable help, uncompromising support and contribution to the
Company.
WORKER MANAGEMENT RELATIONSHIP
The board of Directors would like to place on record the valuable contribution of all members of the
staff & workers. The workers management relationship remained cordial throughout the year which
resulted in the smooth operation of your company.
On behalf of the Board
Muhammad Saleem Ahmed Umer Ahmed

Chief Executive Officer Director
Karachi: October 07, 2019
10
Chairman's Review
I am pleased to present you the financial results of the Company for the year 2018-19. It has been
a momentous year as it turned around the Company into profit from losses incurred continuously
for last five years. Company's achievements are further elaborated in the directors' report.
The Code of Corporate Governance requires an annual evaluation of the Board of Directors. The
evaluation is carried out with the aime to measure the Board's overall performance and conduct
of the Company's affairs in accordance with the best practices of corporate governance. For the
year under review, based on the evaluation, the overall performance and effectiveness of the Board
has been assessed as satisfactory.
We seek blessings of Almighty Allah for success of the Company.
Dr. M. Shoaib Ahmed

Chairman
October 07, 2019
17
18
STATEMENT OF VALUE ADDED
2019 2018
(Rupees) % (Rupees)
WEALTH GENERATED
TOTAL REVENUE 76,580,537 51,687,730

BROUGHT IN MATERIAL & SERVICES (54,845,645) (38,285,978)
21,734,892 13,401,752
WEALTH DISTRIBUTED
TO EMPLOYEES
SALARIES, BENEFITS & RELATED COST 18,207,114 83.77 11,398,180
TO GOVERNMENT
INCOME TAX, SALES TAX, IMPORT DUTY

AND WORKERS' FUND 1,467,787 6.75 455,822
RETAINED FOR REINVESTMENT &

FUTURE GROWTH
DEPRECIATION / AMORTISATION 2,059,991 9.48 1,547,750
21,734,892 100.00 13,401,752
19
SIX YEARS AT A GLANCE
(Rs in 000)
PARTICULARS 2019 2018 2017 2016 2015 2014
Net Sales 76,580 51,688 45,286 20,914 17,170 9,005
Gross Profit/(loss) 14,906 1,875 61 (2,312) (11,631) (9,917)
Net Profit/(loss) before tax 5,061 (4,773) (4,790) (6,672) (15,371) (20,963)
Gross Profit/(loss) ( % ) 19.47 3.63 0.13 (11.05) (67.74) (110.13)
Net Profit/(loss) ( % ) 6.61 (9.23) (10.58) (31.90) (89.52) (232.79)
Earning/(loss) per share
( after tax ) 1.22 (1.56) (1.54) (2.02) (4.57) (6.17)
Current ratio (0.32) (0.30) (0.29) (0.26) (0.26) (0.28)
20
STATEMENT OF COMPLIANCE WITH LISTED COMPANIES
(CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2017
The company has complied with the requirements of the Regulations in the following manner:
1. The total number of directors is seven (07) as per the following:
a. Male: 07
b. Female: None
*Relevant requirement of the regulation is applicable on next election of directors.
2. The composition of board is as follows:
Category Number Names

Independent 01 - Mr Syed Fawad Hussain Rizvi
Director
Non-executive - Mr.Umer Ahmed
Directors 04 - Mr. Bilal Ahmed
- Dr. Muhammad Shoaib Ahmed
- Mr. Azeem Ahmed
Executive Directors 02 - Mr. Saleem Ahmed

- Mr. Nayyer Ahmed Jalali
*Relevant requirement of the regulation is applicable on next election of directors.
3. The directors have confirmed that none of them is serving as a director on more than five listed
companies, including this company.
4. The company has prepared a Code of Conduct and has ensured that appropriate steps have
been taken to disseminate it throughout the company along with its supporting policies and
procedures.
5. The board has developed a vision/mission statement, overall corporate strategy and significant
policies of the company. A complete record of particulars of significant policies along with the
dates on which they were approved or amended has been maintained.
6. All the powers of the board have been duly exercised and decisions on relevant matters have
been taken by board/ shareholders as empowered by the relevant provisions of the Act and
the Regulations.
7. The meetings of the board were presided over by the Chairman and, in his absence, by a
director elected by the board for this purpose. The board has complied with the requirements
of Act and the Regulations with respect to frequency, recording and circulating minutes of
meeting of board.
8. The board of directors have a formal policy and transparent procedures for remuneration of
directors in accordance with the Act and these Regulations.
9. Directors have been apprised of and are well conversant of their duties and responsibilities.
Four out of seven directors meet the exemption criteria from Directors' Training requirement
as contained in the Regulations.
10. The board has approved appointment of CFO, Company Secretary and Head of Internal Audit,
including their remuneration and terms and conditions of employment.
21
STATEMENT OF COMPLIANCE WITH LISTED COMPANIES
(CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2017
11. CFO and CEO duly endorsed the financial statements before approval of the board.
12. The board has formed following committees comprising of members given below:
a) Audit Committee :
Syed Fawad Hussain Rizvi Chairman
Bilal Ahmed Member
Umer Ahmed Member
b) HR& Remuneration Committee:
Umer Ahmed Chairman

Muhammad Saleem Ahmed Member
Bilal ahmed Member
13. The terms of reference of the aforesaid committees have been formed, documented and
advised to the committee for compliance.
14. The frequency of meetings of the committee were as follow:
a) Audit Committee: Quarterly
b) HR and Remuneration Committee: Yearly
15. The board has set up an effective internal audit function who are considered suitably qualified
and experienced for the purpose and are conversant with the policies and procedures of the
company.
16. 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 and registered with Audit Oversight
Board of Pakistan, 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
ICAP.
17. The statutory auditors or the persons associated with them have not been appointed to provide
other services except in accordance with the Act, these Regulations or any other regulatory
requirement and the auditors have confirmed that they have observed IFAC guidelines in this
regard.
18. We confirm that all other material requirements of the Regulations have been complied with.
(Muhammad Saleem Ahmed)

Karachi: October 07, 2019 Chief Executive Officer
22
REVIEW REPORT
TO THE MEMBERS OF PAK LEATHER CRAFTS LIMITED
REVIEW REPORT ON THE STATEMENT OF COMPLIANCE CONTAINED
IN LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2017
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of
Corporate Governance) Regulations, 2017 (the Regulations) prepared by the Board of Directors
of Pak Leather Crafts Limited for the year ended June 30, 2019 in accordance with the requirements
of regulation 40 of the Regulations.
The responsibility for compliance with the Regulations is that of the Board of Directors of the
company. Our responsibility is to review whether the Statement of Compliance reflects the status
of the company's compliance with the provisions of the Regulations and report if it does not and
to highlight any non compliance with the requirenments of the Regulations. 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 Regulations.
As part of our audit of financial statements we are required to obtain an understanding of the
accounting and internal control systems sufficient to plan the audit and develop an effective audit
approach. We are not required to consider whether the Board of Directors' statement on internal
control covers all risks and control or to form an opinion on effectiveness of such internal controls,
the company's corporate governance procedures and risks.
The Regulations require the company to place before the Audit Committee, and upon recommendation
of the Audit Committee, place before the Board of Directors for their review and approval, its related
party transactions and also ensure compliance with the requirements of section 208 of the Companies
Act, 2017. We are only required and have ensured compliance of this requirement to the extent of
the approval of the related party transactions by the Board of Directors upon the recommendations
of the Audit Committee. We have not carried out procedures to asses and determine the company's
process for identification of related parties and that whether the related party transactions were
undertaken at arm's length price or not.
Following instances of non-compliance with the requirements of the Regulations were observed
which are not stated in the Statement of Compliance:
a) No director of the compnay has obtained certification under the approved directors training
program till June 30, 2019. Four directors meet the criteria of exemption but exemption is not
obtained from the Securities and Exchange Commission of Pakistan (SECP) as required.
b) CFO and company secretary is the same person. He meets the criteria as defined in regulation
23(c) but the approval of SECP is not obtained as required under this regulation.
c) The internal audit department of the company comprise of only one person designated as head
of internal audit who is not eleigible for appointment as head of internal audit of a listed company
as per requirements of the Regulations. Moreover, copies of internal audit reports were not
provided to us for our review.
d) Key elements of director's remuneration policy and other significant policies are not placed on
the company's website as required.
e) Level of materiality has not been defined by the Board as required.
Based on our review, except for the above instances of non-compliance, 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 Regulations
as applicable to the company for the year ended June 30, 2019.
RSM AVAIS HYDER LIAQUAT NAUMAN

CHARTERED ACCOUNTANTS
LAHORE 07 Oct, 2019 Engagement Partner: Inam ul Haque
23
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF
PAK LEATHER CRAFTS LIMITED

Report on the Audit of the Financial Statements
Qualified opinion:
We have audited the annexed financial statements of Pak Leather Crafts Limited (the company),
which comprise the statement of financial position as at June 30, 2019, and the statement of profit
or loss, the statement of comprehensive income, the statement of changes in equity, the statement
of cash flows for the year then ended, and notes to the financial statements, including a summary
of significant accounting policies and other explanatory information, and 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 the audit.
In our opinion and to the best of our information and according to the explanations given to us,
except for the possible effects of the matters described in the Basis for Qualified Opinion Section
of our report, the statement of financial position, the statement of profit or loss, the statement of
comprehensive income, the statement of changes in equity and the statement of cash flows together
with the notes forming part thereof conform with the accounting and reporting standards as applicable
in Pakistan and give the information required by the Companies Act, 2017 (XIX of 2017), in the
manner so required and respectively give a true and fair view of the state of the company's affairs
as at June 30, 2019 and of the profit, the comprehensive income, the changes in equity and its cash
flows for the year then ended.
Basis for Qualified Opinion:
(a) Stock in trade includes old outstanding stock in trade with cost of Rs. 100.204 million which
is being carried at net realizable value of Rs. 38.729 million since prior periods (Refer Note
8.1). We are unable to satisfy ourselves as to the carrying value of these old stocks as net
realizable value is not determinable in the absence of any sale transaction of old stocks or
assessment by an independent technical expert. Accordingly, the quantum of any further write
down of these old stocks, if any, is not determinable.
(b) Trade debts of the company include past due trade debts of Rs. 62.511 million. These past
due trade debts are impaired in our view, but the management has not made any provision
in the books of account in respect of these past due impaired trade debts on the basis of
expected credit loss method as required under IFRS-9 Financial Instruments. We are unable
to determine the quantum of required provision with reasonable accuracy and, therefore, its
impact on the results for the year and equity could not be quantified.
Except for the matters discussed in para (a) and (b) above; we conducted our audit in accordance
with International Standards on Auditing (ISAs) as applicable in Pakistan. Our responsibilities under
those standards are further described in the Auditor's Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the company in accordance with the
International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants
as adopted by the Institute of Chartered Accountants of Pakistan, the ICAP Code of Ethics for
Chartered Accountants (the Code) and we have fulfilled our other ethical responsibilities in accordance
with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our qualified opinion.
24
Material Uncertainty relating to Going Concern
Note 1.2 to the financial statements states that the company has incurred losses in the prior years.
As at the reporting date, its accumulated loss was Rs. 396.481 million as against the issued,
subscribed and paid up capital of Rs. 34.000 million and its current liabilities exceed its current
assets by Rs. 302.204 million. These events and conditions, along with other matters as set forth
in Note 1.2, indicate that a material uncertainty exists that may cast significant doubt on the company's
ability to continue as a going concern.
Emphasis of Matter
Without further qualifying our opinion, we draw attention to Note 18 to the financial statements that
indicates that the bankers / financial institutions of the company have filed suits against the company
for recovery of overdue short term and long term finances along-with related mark up and cost of
funds and that the company has not recorded mark up / cost of funds from the date of institution
of recovery suits by the banks / financial institutions. It also states that the quantum of cost of funds
cannot be determined at this stage.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
In addition to the matters described in the Basis for Qualified Opinion section, Material Uncertainty
Related to Going Concern section and Emphasis of Matter Section of our report, we have determined
following Key audit matters:
Serial How our audit addressed the

Key Audit Matters
# key audit matter
New standards, amendments to We identified new standards, amendments
standards and interpretations becoming to standards and interpretations that became
effective during the year effective during the year. Our audit
procedures included the following;
There are new standards, amendments to
- Considered the management's process
standards and interpretations that became
to identify and assess the impact of new
effective during the current year. As these
1) standards, amendments to standards
new standards, amendments to standards
and interpretations on the company's
and interpretations may have impact on the
financial statements.
financial statements of the company, we
considered this as a key audit matter. - Reviewed the appropriateness of the
disclosures made by the management
in the financial statements in respect of
new standards, amendments to
standards and interpretations becoming
effective during the current year along-
with its impact on the financial statements
of the company.
- We reviewed and assessed the impact
and additional disclosures made in the
financial statements with regard to the
new standards, amendments to
standards and interpretations.
25
Serial How our audit addressed the

Key Audit Matters
# key audit matter
2) Overdue loans and related mark up We studied last year's financial statements
and auditor's report thereon to gain an
Over-due loans and related mark-up were understanding of the matter. We performed
classified as non-current liabilities in the the following audit procedures;
prior year. The bankers / financial institutes
of the company have filed suits against the - Reviewed the management's financial
company for recovery of these overdue reporting process.
finances along-with mark up and cost of
funds. Considering the facts that these loans - Reviewed the management's process
and related mark-up were overdue and to identify and disclose the information
under litigation and were classified as non- relevant to the cases filed by or against
current in prior year, we considered this as the company.
a key audit matter.
- Obtained and reviewed the reply of legal
counsel of the company in respect of
the recovery suits filed by the bankers
/ financial institutes of the company under
the provisions of Financial Institutions
(Recovery of Finances) Ordinance, 2001.
- Checked the correctness and adequacy

of disclosures related to these overdue
loans and mark up including the
disclosure of contingency involved.
Information Other than the Financial Statements and Auditor's Report Thereon
Management is responsible for other information. The other information comprises the information
included in the Annual Report, but does not include the financial statements and our auditor's report
thereon.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information; we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Board of Directors for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with the accounting and reporting standards as applicable in Pakistan and the requirements
of Companies Act, 2017(XIX of 2017) and for such internal control as management determines is
necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the company's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate the
company or to cease operations, or has no realistic alternative but to do so.
26

Board of directors is responsible for overseeing the company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs as applicable in Pakistan will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional

judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the company's ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor's report. However, future events or conditions
may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
We communicate with the board of directors regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the board of directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
27

From the matters communicated with the board of directors, we determine those matters that were
of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements:
Based on our audit, we further report that in our opinion:
a) except for the matters described in para (a) and (b) of Basis for Qualified Opinion section of
our report, proper books of account have been kept by the company as required by the
Companies Act, 2017 (XIX of 2017);
b) except for the matters described in para (a) and (b) of Basis for Qualified Opinion section of
our report, the statement of financial position, the statement of profit or loss, the statement of
other comprehensive income, the statement of changes in equity and the statement of cash
flows together with the notes thereon have been drawn up in conformity with the Companies
Act, 2017 (XIX of 2017). These are in agreement with the books of account and returns;
c) investments made, expenditure incurred and guarantees extended during the year were for
the purpose of the company's business; and
d) no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980).
Other Matter
The financial statements of the company for the year ended June 30, 2018 were audited by another
firm of chartered accountants who have expressed a qualified opinion in their report dated October
03, 2018.
The engagement partner on the audit resulting in this independent auditor's report is Inam ul Haque.
RSM AVAIS HYDER LIAQUAT NAUMAN

CHARTERED ACCOUNTANTS
LAHORE
DATED: October 07, 2019
28
STATEMENT OF FINANCIAL POSITION AS AT JUNE 30, 2019
2019 2018
NOTE
RUPEES RUPEES
ASSETS
Non current assets

Property, plant and equipment 6 23,894,119 24,196,410
Long terms deposits 7 1,409,612 1,409,612
25,303,731 25,606,022
CURRENT ASSETS
Loose tools 294,487 317,487
Stock in trade 8 47,638,691 50,579,191
Trade debts 9 86,946,052 72,250,729
Advances and other receivable 10 1,645,536 2,599,313
Tax refunds due from Government 11 896,600 622,909
Cash and bank balances 12 2,292,185 388,849
139,713,551 126,758,478
TOTAL ASSETS 165,017,282 152,364,500
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVE

Authorised share capital
5,000,000 Ordinary shares of Rs. 10/- each. 50,000,000 50,000,000
Issued, subscribed and paid up capital

3,400,000 Ordinary shares of Rs. 10/- each fully paid in cash 34,000,000 34,000,000
Loan from Director 13 68,204,444 -
Accumulated loss (396,481,430) (400,627,157)
(294,276,986) (366,627,157)
NON CURRENT LIABILITIES

Long term loans 14 12,987,073 85,352,742
Deferred interest income 14 4,389,817 -
17,376,890 85,352,742
CURRENT LIABILITIES
Short term bank borrowings 15 237,419,981 237,419,981

Current portion of long term financing 16 46,903,419 46,903,419
Interest / mark up payable 124,029,303 124,029,303
Trade and other payables 17 32,684,939 25,286,212
Provision for taxation - income tax 879,736 -
441,917,378 433,638,915
CONTINGENCIES 18 - -
165,017,282 152,364,500
The annexed notes form an integral part of these financial statements.
MUHAMMAD SALEEM AHMED UMER AHMED NASEER AHMED

CHIEF EXECUTIVE OFFICER DIRECTOR CHIEF FINANCIAL OFFICER
29
STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED JUNE 30, 2019
2019 2018
NOTE RUPEES RUPEES
Sales 19 76,580,537 51,687,730

Cost of sales 20 61,674,763 49,813,042
Gross profit 14,905,774 1,874,688
Other income 23 860,783 1,866,335

15,766,557 3,741,023
Administrative expenses 21 7,207,496 5,015,084

Selling and distribution expenses 22 2,699,502 2,858,674
Bank carges and commission 798,205 639,991
10,705,203 8,513,749
Profit/(loss) for the year before taxation 5,061,354 (4,772,726)
Provision for taxation 24 915,627 516,877

Profit/(loss) for the year 4,145,727 (5,289,603)
Earnings per share - Basic and diluted 25 1.22 (1.56)

30
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED JUNE 30, 2019
2019 2018
RUPEES RUPEES
Profit/(loss) for the year 4,145,727 (5,289,603)
Other comprehensive income - -
Total comprehensive income/(loss) for the year 4,145,727 (5,289,603)

31
STATEMENT OF CASH FLOWS AS AT JUNE 30, 2019
2019 2018
NOTE RUPEES RUPEES
CASH FLOW FROM OPERATING ACTIVITIES

Profit/(loss) for the year before taxation 5,061,354 (4,772,726)
Adjustment for non-cash changes and other items:

Depreciation 2,059,991 1,547,750
Gain on disposal - (336,706)
Balances written off - net 2,151,300 841,764
4,211,291 2,052,808
Cash flow before working capital changes
9,272,645 (2,719,918)
Changes in working capital
(Increase) / decrease in current assets
Stores, spares and loose tools 23,000 -
Stock in trade 2,940,500 (12,555,709)
Trade debts (16,846,623) 10,463,538
Advances and other receivables 953,777 (905,361)
Tax refunds due from government (273,691) (76,032)
Increase / (decrease) in current liabilities

Trade and other payables 8,735,647 (697,376)
(4,467,390) (3,770,940)
Cash generated from operations 4,805,255 (6,490,858)
Income tax paid (915,627) (516,877)
Net cash flow from operating activities (a) 3,889,628 (7,007,735)
CASH FLOW FROM INVESTING ACTIVITIES

Addition in property, plant and equipment (1,757,700) (8,724,253)
Proceeds from disposal of property, plant and equipment - 390,000
Net cash flow from investing activities (b) (1,757,700) (8,334,253)
CASH FLOW FROM FINANCING ACTIVITIES

Long term loans (228,592) 14,361,824
Net cash flow from financing activities (c) (228,592) 14,361,824
Net increase/(decrease) in cash and cash equivalents (a+b+c) 1,903,336 (980,164)

Cash and cash equivalents at the beginning of the year 388,849 1,369,013
Cash and cash equivalents at the end of the year 2,292,185 388,849

32
STATEMENT OF CHANGES IN EQUITY AS AT JUNE 30, 2019
Issued
Subscribed Accumulated Total
and paid up loss
Particulars Capital
<-------------------(all amount in PKR)------------------>
Balance as at July 01, 2017 34,000,000 (395,337,554) (361,337,554)
Total comprehensive loss for the year

Loss for the year - (5,289,603) (5,289,603)
Other comprehensive income - - -
- (5,289,603) (5,289,603)
Balance as at June 30, 2018 34,000,000 (400,627,157) (366,627,157)
Total comprehensive income for the year

Profit for the year - 4,145,727 4,145,727
Other comprehensive income - - -
- 4,145,727 4,145,727
Balance as at June 30, 2019 34,000,000 (396,481,430) (362,481,430)

33
Notes to the Financial Statements for the year ended June 30, 2019
1. LEGAL ENTITY & NATURE OF BUSINESS
1.1 Pak leather crafts limited (the Company) is a public limited company incorporated in
Pakistan under the repealed Companies Ordinance, 1984 and is quoted on Pakistan
Stock Exchange. The principal activity of the Company is leather tanning and export of
leather and leather garments. The registered office and mill of the Company are situated
at Plot # 18, Sector 7-A, Korangi Industrial Area, Karachi, in the province of Sindh.
1.2 The Company incurred losses in the prior years. As at the reporting date, its accumulated
loss was Rs. 396.481 million (2018: Rs. 400.627 million) as against the issued, subscribed
and paid up capital of Rs. 34.000 million (2018: Rs. 34.000 million) and its current
liabilities exceed its current assets by Rs. 302.204 million (2018: Rs. 306.880 million).
The Company is facing operational and financial problems and has been unable to pay
off its liabilities on due dates. The bankers / finnancial institutions of the Company have
filed suits for recovery of outstanding finances and related mark up along with cost of
funds. These factors indicate material uncertainty related to events and conditions which
may cast significant doubt about the Companys ability to continue as a going concern
and, therefore, the Company may not be able to realize its assets and discharge its
liabilities in the normal course of business.
The management has prepared and is implementing its plan to address all these issues
and is focusing to enhance its profitability by increasing its revenue and reducing its
cost. The management is focussing on increasing the local sales through toll manufacturing.
As a result of its concentrated efforts, the management has been able to increase its
revenue and profitability which is evident from the fact that the Company has earned
profit during the year. The overdue loans and related mark up are not expected to be
paid in next twelve months but are appearing in the current liabilities resulting in negative
current ratio. The management is negotiating with its major bankers / finnancial institutions
for rescheduling / out of court settlements. Negotiations with a banker are at advanced
stage for re-scheduling of loan with waiver of mark up. Moreover, the directors of the
Company have undertaken to continue to support the Company and to inject further
funds in the ensuing years, as may be needed by the Company. The management
believes that its plan is resulting in and will result in the improvement of financial position
and financial results of the Company and the Company will be able to continue as a
going concern.
2. STATEMENT OF COMPLIANCE
These financial statements have been prepared in accordance with the accounting and reporting
standards as applicable in Pakistan. The accounting and reporting standards applicable in
Pakistan comprise of:
- International Financial Reporting Standards (IFRS Standards) issued by the International

Accounting Standards Board (IASB) as notified under the Companies Act, 2017; and
- Provisions of and directives issued under the Companies Act, 2017.
Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS
Standards, the provisions of and directives issued under the Companies Act, 2017 have been
followed.
34
3. STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS
3.1 Standards, amendments to standards and interpretations becoming effective in

current year
The following standards, amendments to standards and interpretations have been

effective and are mandatory for financial statements of the Company for the periods
beginning on or after July 01, 2018 and therefore, have been applied in preparing these
financial statements.
3.1.1 IFRS 9 Financial Instruments
IFRS 9 replaced the provisions of IAS 39 Financial Instruments: Recognition and

Measurement that relates to the recognition, classification and measurement of financial
assets and financial liabilities, derecognition of financial instruments, impairment of
financial assets and hedge accounting. The adoption of IFRS 9 did not have a significant
effect on the Companys accounting policies related to financial liabilities. The changes
in accounting policies have been applied retrospectively. The nature and effect of the
changes to previous accounting policies related to financial assets are set out below:
a. Classification and measurement of financial assets
IFRS 9 eliminates the previous IAS 39 categories for financial assets of held to maturity,
loans and receivables, held for trading and available for sale. IFRS 9, classifies financial
assets in the following three categories:
- fair value through other comprehensive income (FVOCI);
- fair value through profit or loss (FVTPL); and
- amortized cost.
The following assessments have been made on the basis of the facts and circumstances
that existed at the date of initial application:
- The determination of business model within which a financial asset is held; and
- The designation and revocation of previous designation of certain financial assets

as measured at FVTPL.
A financial asset is measured at amortized cost if it meets both of the following conditions
and.
- it is held within business model whose objective is to hold assets to collect contractual
cash flows; and
- its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and
is not designated as FVTPL:
35
- It is held within a business model whose objective is achieved by both collecting

contractual cash flows and selling financial assets; and
- Its contractual terms give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
An investment in equity instruments, not held for trading, may be measured at FVOCI
if an irrevocable election is made at the time of intial application of this IFRS or initial
recognition of such investment.
IFRS 9 Financial Instruments ( Continued)
All financial assets that are not classified as measured at amortized cost or FVOCI, as described
above, are measured at FVTPL. On initial recognition, the Company may irrevocably designate
a financial asset that otherwise meets the requirements to be measured at amortized cost or
at FVOCI as FVTPL if doing so eliminates or significantly reduces an accounting mismatch
that would otherwise arise.
For assets measured at fair value, gains and losses will either be recorded in the statement
of profit or loss account or other comprehensive income.
A financial asset is initially measured at fair value plus transaction costs that are directly
attributable to its acquisition, except FVTPL which is measured at fair value.
The accounting policies that apply to financial instruments are stated in note 5.6 to the financial
statements.
The following table explains the original measurement categories under IAS 39 and the new
measurement categories under IFRS 9 for each class of the Companys financial assets as
at June 30, 2018:
Original Classification New Classification Carrying New Carrying
Under ISA 39 Under IFRS 9 Amount Amount
-------------- Rupees--------------
Long terms deposits Loans and receivables Amortized cost 1,409,612 1,409,612
Trade debts Loans and receivables Amortized cost 72,250,729 72,250,729
Advances and other

receivables Loans and receivables Amortized cost 2,599,313 2,599,313
Tax refunds due from

Government Loans and receivables Amortized cost 622,909 622,909
Cash and bank balances Loans and receivables Amortized cost 388,849 388,849
b. Impairment
IFRS 9 replaces the incurred loss model in IAS 39 with an expected credit loss (ECL)
model. IFRS 9 introduces a forward-looking expected credit loss model, rather than the
current incurred loss model, when assessing the impairment of financial asset in the
scope of IFRS 9. The new impairment model applies to financial assets measured at
amortized cost, contract assets and debt investments at FVOCI, but not to investments
in equity instruments.
The Company applies the IFRS 9 simplified approach for measuring expected credit
losses which uses a lifetime expected loss allowance for all trade debts. Impairment
losses related to trade debts are presented separately in the statement of profit or loss.
Trade debts are written off when there is no reasonable expectation of recovery.
Management used actual credit loss experience over past years to base the calculation
of ECL on adoption of IFRS 9. Given the Companys experience of collection history
and historical loss rates / bad debts and normal receivable aging, the move from an
incurred loss model to an expected loss model has not had any significant impact on
the financial position and / or financial performance of the Company.
36
Impairment (Continued)
Loss allowance on debt securities are measured at 12 months expected credit losses
as those are determined to have low credit risk at the reporting date. Since there is no
loss given default, no credit loss is expected on these securities. Loss allowance on
other securities and bank balances is also measured at 12 months expected credit
losses.
3.1.2 IFRS 15 - Revenue from Contracts with Customers
On 28 May 2014, the International Accounting Standards Board (IASB) issued International
Financial Reporting Standards (IFRS) 15 Revenue From Contracts with Customers which
provides a unified five-step model for determining the timing, measurement and recognition
of revenue. The focus of the new standard is to recognize revenue as performance obligations
are made rather than based on the transfer of risk and rewards. IFRS 15 includes a comprehensive
set of disclosure requirements including qualitative and quantitative information about contracts
with customers to understand the nature, amount, timing and uncertainty of revenue. The
standard supersedes IAS 18 Revenue, IAS 11 Construction Contracts and a number of
revenue related interpretations.
The Company has applied the modified retrospective method upon adoption of IFRS 15 as
allowed under the Standard. This method requires the recognition of the cumulative effect
(without practical expedients) of initially applying IFRS 15 to opening retained earnings. Under
this transition method, comparative information for prior periods are not required to be restated
and continues to be reported in accordance with the previous standards and related interpretations.
Apart from providing more extensive disclosures, the application of IFRS 15 has not had a
significant impact on the financial position and / or financial performance of the Company.
Accordingly, there was no adjustment to retained earnings on application of IFRS 15 at 1 July
2018.
3.1.3 IFRIC 22 Foreign Currency Transactions and Advance Consideration
IFRIC 22 clarifies the accounting for transactions that include the receipt or payment of advance
consideration in a foreign currency.
The Interpretation covers foreign currency transactions when an entity recognizes a non-
monetary asset or non-monetary liability arising from the payment or receipt of advance
consideration before the entity recognizes the related asset, expense or income. It does not
apply when an entity measures the related asset, expense or income on initial recognition at
fair value or at the fair value of the consideration received or paid at a date other than the date
of initial recognition of the non-monetary asset or non-monetary liability. Also, the Interpretation
need not be applied to income taxes, insurance contracts or reinsurance contracts.
The application of these amendments has no impact on the Companys financial statements.
3.2 Standards, amendments to standards and interpretations becoming effective in the

current year but not relevant
There are certain new standards, amendments to standards and interpretations that became
effective during the year and are mandatory for accounting periods of the Company beginning
on or after July 01, 2018 but are considered not to be relevant to the Companys operations
and are, therefore, not disclosed in these financial statements.
3.3 Standards, amendments to standards and interpretations becoming effective in future

periods
The following standards, amendments to standards and interpretations have been published
and are mandatory for the Companys accounting periods beginning on or after their respective
effective dates.
37
3.3.1 IFRS 3 Business Combinations
The IASB has issued Definition of a Business (Amendments to IFRS 3) aimed at
resolving the difficulties that arise when an entity determines whether it has acquired a
business or a group of assets. The amendments are effective for business combinations
for which the acquisition date is on or after the beginning of the first annual reporting
period beginning on or after 1 January 2020.
The application of these amendments has no impact on the Companys financial

statements.
3.3.2 Amendments to References to the Conceptual Framework in IFRS Standards:
The IASB issued Amendments to References to the Conceptual Framework in IFRS

Standards. The document contains amendments to IFRS 2, IFRS 3, IFRS 6, IFRS 14,
IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22, and SIC-
32. Not all amendments, however update those pronouncements with regard to references
to and quotes from the framework so that they refer to the revised Conceptual Framework.
Some pronouncements are only updated to indicate which version of the framework
they are referencing to (the IASC framework adopted by the IASB in 2001, the IASB
framework of 2010, or the new revised framework of 2018) or to indicate that definitions
in the standard have not been updated with the new definitions developed in the revised
Conceptual Framework.
The amendments, where they actually are updates, are effective for annual periods
beginning on or after January 1, 2020. The application of these amendments has no
impact on the Companys financial statements.
3.3.3 Annual Improvements to IFRS Standards 20152017 Cycle, applicable for annual
reporting periods beginning on or after January 01, 2019.
In December 2017, the IASB published Annual Improvements to IFRS Standards

20152017 Cycle, containing the following amendments to IFRSs:
IFRS 3 Business Combinations and IFRS 11 - Joint Arrangements The

amendments to IFRS 3 clarify that when an entity obtains control of a business that
is a joint operation, it remeasures previously held interests in that business. The
amendments to IFRS 11 clarify that when an entity obtains joint control of a business
that is a joint operation, the entity does not remeasure previously held interests in
that business.
Annual Improvements to IFRS Standards 20152017 Cycle, applicable for annual

reporting periods beginning on or after January 01, 2019. ( Continued. )
IAS 12 - Income Taxes The amendments clarify that all income tax consequences
of dividends (i.e. distribution of profits) should be recognized in profit or loss, regardless
of how the tax arises.
IAS 23 - Borrowing Costs The amendments clarify that if any specific borrowing
remains outstanding after the related asset is ready for its intended use or sale, that
borrowing becomes part of the funds that an entity borrows generally when calculating
the capitalization rate on general borrowings.

statements.
38
3.3.4 IAS 1 and IAS 8 Presentation of Financial Statements

The International Accounting Standards Board (IASB) has issued Definition of Material
(Amendments to IAS 1 and IAS 8) to clarify the definition of and to align the definition
used in the Conceptual Framework and the Standards themselves.
Information is material if omitting, misstating or obscuring it could reasonably be expected
to influence decisions that the primary users of general purpose financial statements
make on the basis of those financial statements, which provide financial information
about a specific reporting entity.
The amendments, where they actually are updates, are effective for annual periods
beginning on or after January 1, 2020. The application of these amendments has no
impact on the Companys financial statements.
3.3.5 IFRS 16 Leases
IFRS 16 specifies how an IFRS reporter will recognize, measure, present and disclose
leases. The standard provides a single lessee accounting model, requiring lessees to
recognize assets and liabilities for all leases unless the lease term is 12 months or less
or the underlying asset has a low value. Lessors continue to classify leases as operating
or finance, with IFRS 16s approach to lessor accounting substantially unchanged from
its predecessor, IAS 17.
IFRS 16 replaces the following standards and interpretations:
- IAS 17 Leases
- IFRIC 4 Determining whether an Arrangement contains a Lease
- SIC-15 Operating Leases - Incentives
- SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease
IFRS 16 was issued in January 2016 and applies to annual reporting periods beginning
on or after 1 January 2019, as notified by S.R.O. 434 (I)/2018 dated April 9, 2018. The
management of the Company is reviewing the changes to evaluate the impact of
application of standard on the financial statements.
3.3.6 IAS 19 - Employee Benefits
Amendments, applicable for annual reporting periods beginning on or after January 01,
2019, related to plan amendment, curtailment or settlement detailed as below:
If a plan amendment, curtailment or settlement occurs, it is now mandatory that the
current service cost and the net interest for the period after the remeasurement are
determined using the assumptions used for the remeasurement.
In addition, amendments have been included to clarify the effect of a plan amendment,
curtailment or settlement on the requirements regarding the asset ceiling.
The application of these amendments has no impact on the Company's financial
statements.
3.3.7 IAS 28 Investments in Associates and Joint Ventures
Amendments resulting from Annual Improvements 20142016 Cycle (clarifying certain
fair value measurements), applicable for periods beginning on or after January 01, 2018,
clarified that the election to measure at fair value through profit or loss an investment
in an associate or a joint venture that is held by an entity that is a venture capital
organization, or other qualifying entity, is available for each investment in an associate
or joint venture on an investment-by-investment basis, upon initial recognition.
Further, amendments applicable for periods beginning on or after January 01, 2019 have
been added to clarify that an entity applies IFRS 9 including its impairment requirements,
to long-term interests in an associate or joint venture that form part of the net investment
in the associate or joint venture but to which the equity method is not applied.
39

statements.
3.3.8 IFRIC 23 Uncertainty over Income Tax Treatments
IFRIC 23 clarifies the accounting for uncertainties in income taxes.
The interpretation is to be applied to the determination of taxable profit (tax loss), tax
bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty
over income tax treatments under IAS 12.IFRIC 23 is effective for annual reporting
periods beginning on or after January 01, 2019. Earlier application is permitted.

statements.
3.4 Standards, amendments to standards and interpretations becoming effective in

future periods but not relevant
There are certain new standards, amendments to standards and interpretations that are
effective from different future periods but are considered not to be relevant to the
Companys operations, therefore, not disclosed in these financial statements.
3.5 Standards issued by IASB but not applicable in Pakistan
Following new standards have been issued by IASB which are yet to be notified by the
SECP for purpose of applicability in Pakistan:
IFRS 1 - First-time adoption of International Financial Reporting Standards
IFRS 14 - Regulatory Deferral Accounts
IFRS 17 - Insurance Contracts
4. BASIS OF PREPARATION
These financial statements have been prepared on the basis of 'historical cost convention.
5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
5.1 Property, plant and equipment
Property, plant and equipment except freehold land and capital work in progress are
stated at cost/valuation less accumulated depreciation and impairment in value, if any.
Freehold land is stated at valuation less accumulated impairment in value, if any.
Depreciation is charged to income applying the reducing balance method at the rates
specified in property, plant and equipment note.
Depreciation on additions during the year is charged from the month in which asset is
acquired or capitalised, while no depreciation is charged for the month in which asset
is disposed off. The assets' residual values and useful lives are reviewed at each financial
year end and adjusted if impact on depreciation is significant.
40
Repairs and maintenance costs are charged to income during the period in which they
are incurred. Major renewals and improvements are capitalised.
Gains or losses on disposal of assets, if any, are recognised as and when incurred.
All expenditure connected with specific assets incurred during installation and construction
period are carried under capital work in progress. These are transferred to specific assets
as and when these assets are available for use.
5.2 Impairment
The company assesses at each balance sheet date whether there is any indication that
assets except deferred tax assets may be impaired. If such indication exists, the carrying
amounts of such assets are reviewed to assess whether these are recorded in excess
of their recoverable amounts. Where carrying values exceed the respective recoverable
amounts, assets are written down to their recoverable amounts and the resulting
impairment loss is recognised in profit and loss account, unless the relevant assets are
carried at revalued amounts, in which case the impairment loss is treated as a revaluation
decrease. The recoverable amount is the higher of an asset's fair value less cost to sell
and value in use.
Where impairment loss subsequently reverses, the carrying amounts of the assets are
increased to the revised recoverable amounts but limited to the carrying amounts that
would have been determined had no impairment loss been recognised for the assets
in prior years. A reversal of an impairment loss is recognised immediately in profit or
loss account.
5.3 Borrowing costs
Borrowing costs directly attributable to the acquisition or construction of qualifying assets,

which are assets that necessarily take a substantial period of time to get ready for their
intended use, are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use. Investment income earned on the temporary
investment of specific borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are
incurred.
5.4 Loose tools
These are valued at moving average cost less allowance for obsolete and slow moving
items. Items in transit are valued at invoice value plus other charges incurred thereon.
5.5 Stock in trade
Stock in trade except wastes is valued at lower of cost and net realisable value. Cost
is determined as follows:
Raw material Weighted average cost.

Work in process Average manufacturing cost.
Finished goods Average manufacturing cost.
Wastes are valued at net realisable value.
Net realisable value represents the estimated selling price in the ordinary course of
business less estimated cost of completion and estimated cost necessary to make the
sales. Average manufacturing cost includes cost of direct material, labour and appropriate
manufacturing overheads.
41
5.6 Financial Instruments

5.6.1 Measurement of financial asset
Initial measurement
The Company classifies its financial assets into following three categories:
- fair value through other comprehensive income (FVOCI);
- fair value through profit or loss (FVTPL); and
- measured at amortized cost.
A financial asset is initially measured at fair value plus transaction costs that are directly
attributable to its acquisition, except FVTPL which is measured at fair value.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification, as
follows:
Debt Investments at FVOCI
These assets are subsequently measured at fair value. Changes in fair value are
recognized in other comprehensive income. Interest / markup income calculated
using the effective interest method, foreign exchange gains and losses and impairment
are recognized in the statement of profit or loss. On de-recognition, gains and losses
accumulated in other comprehensive income are reclassified to the statement of
profit or loss.
Equity Investments at FVOCI
These assets are subsequently measured at fair value. Changes in fair value are
recognized in other comprehensive income and are never reclassified to the statement
of profit or loss. Dividends are recognized as income in the statement of profit or loss
unless the dividend clearly represents a recovery of part of the cost of the investment.
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including
any interest markup or dividend income, are recognized in the statement of profit or
loss.
Financial assets measured at amortized cost
These assets are subsequently measured at amortized cost using the effective
interest method. The amortized cost is reduced by impairment losses. Interest /
markup income, foreign exchange gains and losses and impairment are recognized
in the statement of profit or loss.
5.6.1 Measurement of financial asset
Non-derivative financial assets
All non-derivative financial assets are initially recognized on trade date i.e. date on
which the Company becomes party to the respective contractual provisions. Non-
derivative financial assets comprise loans and receivables that are financial assets
with fixed or determinable payments that are not quoted in active markets and includes
trade debts, advances, other receivables and cash and cash equivalents.
42
Derecognition
The Company derecognizes the financial assets when the contractual rights to the cash
flows from the assets expire or it transfers the rights to receive the contractual cash
flows in a transaction in which substantially all of the risk and rewards of ownership of
the financial assets are transferred or it neither transfers nor retain substantially all of
the risks and rewards of ownership and does not retain control over the transferred
assets.
5.6.2 Financial liabilities

Initial recognition
Financial liabilities are classified in the following categories:

- fair value through profit or loss; and
- other financial liabilities.
The Company determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognized initially at fair value and, in case of other financial
liabilities also include directly attributable transaction costs.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification, as

follows:
Fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held-
for-trading and financial liabilities designated upon initial recognition as being at fair
value through profit or loss. The Company has not designated any financial liability
upon recognition as being at fair value through profit or loss.
Other financial liabilities
After initial recognition, other financial liabilities which are interest bearing are
subsequently measured at amortized cost using the effective interest rate method.
Gain and losses are recognized in statement of profit or loss, when the liabilities are
derecognized as well as through effective interest rate amortization process.
Derecognition
The Company derecognizes financial liabilities when and only when the Companys
obligations are discharged, cancelled or expire.
5.6.3 Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset and the net amount is reported in the
financial statements only when the Company has currently legally enforceable right to
set-off the recognized amounts and the Company intends either to settle on a net basis
or to realise the assets and to settle the liabilities simultaneously. The legally enforceable
right must not be contingent on future events and must be enforceable in normal course
of business and in the event of default, insolvency or winding up of the Company or the
counter parties.
5.6.4 Impairment of financial assets
The Company recognizes loss allowances for Expected Credit Losses (ECLs) in respect
of financial assets measured at amortized cost. The Company measures loss allowances
at an amount equal to lifetime ECLs, except for the following, which are measured at
12-month ECLs:
43
- debt securities that are determined to have low credit risk at the reporting date; and
- other debt securities and bank balance for which credit risk (i.e. the risk of default
occurring over the expected life of the financial instrument) has not increased significantly
since initial recognition.
Loss allowances for receivables are always measured at an amount equal to lifetime
ECLs. When determining whether the credit risk of a financial asset has increased
significantly since initial recognition and when estimating ECLs, the Company considers
reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis,
based on the Companys historical experience and informed credit assessment and
including forward-looking information.
Impairment of financial assets ( Continued. )
The Company assumes that the credit risk on a financial asset has increased significantly
if it is more than past due for a reasonable period of time. Lifetime ECLs are the ECLs
that result from all possible default events over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible
within the 12 months after the reporting date (or a shorter period if the expected life of
the instrument is less than 12 months). The maximum period considered when estimating
ECLs is the maximum contractual period over which the Company is exposed to credit
risk. Loss allowances for financial assets measured at amortized cost are deducted from
the gross carrying amount of the assets. The gross carrying amount of a financial asset
is written off when the Company has no reasonable expectations of recovering of a
financial asset in its entirety or a portion thereof. The Company individually makes an
assessment with respect to the timing and amount of write-off based on whether there
is a reasonable expectation of recovery. The Company expects no significant recovery
from the amount written off. However, financial assets that are written off could still be
subject to enforcement activities in order to comply with the Companys procedures for
recovery of amounts due.
5.7 Trade debts, Loans, advances and other receivables
These are classified at amortized cost and are initially recognized when they are originated
and measured at fair value of consideration receivable. These assets are written off
when there is no reasonable expectation of recovery. Actual credit loss experience over
past years is used to base the calculation of expected credit loss.
5.8 Trade and other payables
Liabilities for trade and other payables are carried at cost which is the fair value of the
consideration to be paid in future for goods and services received, whether billed to the
Company or not.
Contract liability represents advances received from customer for subsequent sales of
the Company's products.
5.9 Dividend and other appropriations
Dividend is recognised as a liability in the period in which it is approved. Appropriations

of profits are reflected in the statement of changes in equity in the period in which such
appropriations are made.
44
5.10 Provisions
Provisions are recognised when the Company has a present, legal or constructive
obligation as a result of past event, it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation and a reliable estimate of the
amount can be made. However, provisions are reviewed at each balance sheet date
and adjusted to reflect the current best estimate.
5.11 Provision for taxation
Current
Provision for current taxation is based on taxable income at the current rate of taxation
after taking into account applicable tax credits and tax rebates available under the law.
Deferred
Deferred tax is provided using the liability method for all temporary differences at the
balance sheet date between tax bases of assets and liabilities and their carrying amounts
for financial reporting purposes. In this regard, the effect on deferred taxation of the
portion of income subject to final tax regime is also considered in accordance with the
requirement of Technical Release 27 of the Institute of Chartered Accountants of
Pakistan.
Deferred tax asset is recognised for all deductible temporary differences and carry
forward of unused tax losses, if any, to the extent that it is probable that taxable profit
will be available against which such temporary differences and tax losses can be utilised.
Deferred tax assets and liabilities are measured at the tax rate that is expected to apply
to the period when the asset is realised or the liability is settled, based on tax rates that
have been enacted or substantively enacted at the balance sheet date.
Deferred tax charged or credited in the income statement, except in case of items
charged or credited to equity in which case it is included in equity.
5.12 Revenue recognition
Revenue is recognized at an amount that reflects the consideration to which the company
is expected to be entitled in exchange for transferring goods or services to a customer.
For this purpose, the company:
- identifies the contract with a customer;
- identifies the performance obligations in the contract;
- determines the transaction price which takes into account estimates of variable
consideration, if any, and the time value of money;
- allocates the transaction price to the separate performance obligations, if applicable,

on the basis of the relative stand-alone selling price of each distinct good or service
to be delivered; and
- recognizes revenue when or as each performance obligation is satisfied in a manner

that depicts the transfer of control of the goods or services promised to the customer.
Determining the timing of the transfer of control at a point in time or over time requires
judgement.
45
The Company is engaged in leather tanning, export and sale of leather garments, which
generally include single performance obligation. Management has concluded that revenue
from sale of goods be recognised at the point in time when control of the asset is
transferred to the customer, which is upon the delivery of goods. Delivery occurs when
the products have been shipped to the specific location and the risks of loss have been
transferred to the customers . The transfer can be either in the form of acceptance by
the customer of products as per the sales contract or lapse of acceptance provision or
the Company has objective evidence that all criteria for acceptance have been satisfied.
Revenue recognition ( Continue .)
Invoices are generated at the point in time when control of the asset is transferred and
revenue is recognised at that point in time. Receivable is also recognised when the
goods are delivered as this is the point in time that the consideration is unconditional
because only the passage of time is required before the payment is due.
5.13 Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of
cash flow statement, cash and cash equivalents consist of cash in hand, balances with
banks, books overdrawn and highly liquid short-term investments that are convertible
to known amounts of cash and are subject to insignificant risk of change in value.
5.14 Foreign currencies
Transactions in currencies other than Pakistani Rupee are recorded at the rates of
exchange prevailing on the dates of the transactions. At each balance sheet date,
monetary assets and liabilities that are denominated in foreign currencies are retranslated
at the rates prevailing on the balance sheet date except where forward exchange
contracts have been entered into for repayment of liabilities, in that case, the rates
contracted for are used.
Gains and losses arising on retranslation are included in net profit or loss for the period.
5.15 Related party transactions
Transactions with related parties are priced on arms length basis. Prices for these
transactions are determined on the basis of comparable uncontrolled price method,
which sets the price by reference to comparable goods and services sold in an economically
comparable market to a buyer unrelated to the seller.
5.16 Compensated absences
The liability for accumulated compensated absences of employees is recognized in the
period in which employees render services that increase their entitlement to future
compensated absences.
5.17 Critical accounting estimates and judgments
The preparation of financial statements in conformity with IASs / IFRSs requires
management to make judgments, estimates and assumptions that affect the application
of policies and reported amounts of assets and liabilities, incomes and expenses. The
estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results
of which form the basis of making judgments about carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the estimates are revised.
46
Critical accounting estimates and judgments ( Continue. )
Significant areas, other than those specifically discussed in these financial statements,
requiring the use of management estimates are as follows ;
(a) Determining the useful lives of Property, plant and equipment.

(b) Provsion for slow moving and obsolete stores and spares.
(c) Write down of stock in trade.
(d) Provision for taxation.
(e) Provision for doubtful receivables.
5.18 Functional and presentation currency
These financial statements are presented in Pakistani Rupee which is the company's
functional and presentation currency.
6. PROPERTY, PLANT AND EQUIPMENT

(Amount in Rupees)
2019
Cost Depreciation W.D.V
PARTICULARS Accumulated Accumulated Rate
As at July Additions / As at June Adjustment Charge for As at June
01, 2018 Disposals 30, 2019 as at July 01, on disposal the year as at June 30, 30, 2019
2018 2019
Leasehold land 6,382,167 - 6,382,167 - - - - 6,382,167 -
Building on leasehold land 16,098,309 1,513,850 17,612,159 14,537,021 - 294,898 14,831,919 2,780,240 10%
Plant and machinery 85,193,391 190,000 85,383,391 70,861,351 - 1,447,454 72,308,805 13,074,586 10%
Furniture and fixture 5,103,287 - 5,103,287 4,821,405 - 28,188 4,849,593 253,694 10%
Office equipment 6,864,007 53,850 6,917,857 6,492,908 - 38,262 6,531,170 386,687 10%
Books 75,000 - 75,000 51,029 - 2,397 53,426 21,574 10%
Motor vehicles 9,614,404 - 9,614,404 8,370,441 - 248,793 8,619,234 995,170 20%
129,330,565 1,757,700 131,088,265 105,134,155 - 2,059,991 107,194,147 23,894,119
(Amount in Rupees)
2018
Cost Depreciation W.D.V
PARTICULARS Accumulated Accumulated Rate
As at July Additions / As at June Adjustment Charge for As at June
01, 2017 Disposals 30, 2018 as at July 01, on disposal the year as at June 30, 30, 2018
2017 2018
Leasehold land 6,382,167 - 6,382,167 - - - - 6,382,167 -

Building on leasehold land 15,527,966 570,343 16,098,309 14,412,899 - 124,122 14,537,021 1,561,288 10%
Plant and machinery 79,029,481 6,763,910 85,193,391 70,269,372 (558,362) 1,150,341 70,861,351 14,332,040 10%
(600,000)
Furniture and fixture 5,103,287 - 5,103,287 4,790,085 - 31,320 4,821,405 281,882 10%
Office equipment 6,864,007 - 6,864,007 6,451,675 - 41,233 6,492,908 371,099 10%

Books 75,000 - 75,000 48,366 - 2,663 51,029 23,971 10%
Motor vehicles 10,115,404 1,390,000 9,614,404 10,051,714 (1,879,344) 198,071 8,370,441 1,243,963 20%
(1,891,000)
123,097,312 6,233,253 129,330,565 106,024,111 (2,437,706) 1,547,750 105,134,155 24,196,410
47
2019 2018
RUPEES RUPEES
6.1 Allocation of depreciation for the year is as under ;
Cost of sales 1,936,393 1,454,885

Administrative expenses 123,599 92,865
2,059,992 1,547,750
6.2 Head office and production facility of the Company are located at Plot # 18, Sector 7-A,
Korangi Industrial Area, Karachi, Pakistan, measuring 2667 square yards which is held under
lease.
2019 2018
NOTE RUPEES RUPEES
7. LONG TERMS DEPOSITS
Against utilities 843,112 843,112

Others 566,500 566,500
1,409,612 1,409,612
8. STOCK IN TRADE
Raw material 6,835,679 8,589,187

Work in process 3,647,581 22,097,332
Finished goods 37,155,431 19,892,672
8.1 47,638,691 50,579,191
8.1 Stock in trade includes old stock with cost of Rs. 100.204 million (2018: Rs. 100.204
million) carried at written down value of Rs. 38.729 million (2018: Rs. 38.729 million)
since prior periods. Old stock with carrying value of Rs. 16.950 million (2018: Rs. 16.950
million) is pledged with a banking company against cash finance from a financial institution.
2019 2018
RUPEES RUPEES
9. TRADE DEBTS
Unsecured - Considered good
Local 81,983,146 68,693,018
Foreign 4,962,906 3,557,711
86,946,052 72,250,729
10. ADVANCES AND OTHER RECEIVABLE
Considered good
Advances
Employees 105,000 -
Suppliers 280,000 1,056,615
Income tax 362,543 -
Other receivable
Duty drawback 897,993 1,542,698
1,645,536 2,599,313
48
2019 2018
NOTE RUPEES RUPEES
11. TAX REFUNDS DUE FROM GOVERNMENT
Considered good
Income tax refund - 35,892
Sales tax refund 896,600 587,017
896,600 622,909
12. CASH AND BANK BALANCES
Cash in hand 40,331 46,436

Cash at bank - In current accounts 2,251,854 342,413
2,292,185 388,849
13. LOAN FROM DIRECTOR 68,204,444 -
13.1 This is unsecured and interest free and is now repayable at the discretion of the Company.
The loan is accounted for as part of equity during the year under Technical Release -
32 "Accounting Directors Loan" issued by the Institute of Chartered Accountants of
Pakistan.
14. LONG TERM LOANS
Un-secured
From director - 67,975,852
From director's associate 14.1 12,987,073 17,376,890
12,987,073 85,352,742
14.1 This is interest free. Terms of repayment have not been decided so far. However, It is
confirmed by the lender that repayment will not be demanded within next twelve months
from the balance sheet date. The loan is now carried at amortized cost, with an estimated
repayment term of 3 years. The unearned interest income is recorded as deferred interest
income and presented on the face of statement of financial position.
15. SHORT TERM BANK BORROWINGS
Secured - under mark up arrangements

Export refinance 192,600,004 192,600,004
Cash finance 10,250,000 10,250,000
Running finance 4,679,088 4,679,088
Forced finance 29,890,889 29,890,889
237,419,981 237,419,981
15.1 These barrowings except cash finance of Rs. 10.250 million (2018: Rs.10.250) are
expired and renewable. These are secured against first charge over current and fixed
assets of the Company ranking pari passu with the charge created in respect of long
term financing (Refer Note 16.1), lien over import and export documents and personal
guarantee of the directors of the Company. Cash finance is secured against pledge of
stocks. All these borrwings and related mark up are over due and the banks / financial
institutions have filed suits for recovery of these finances alongwith related mark up and
cost of funds. Refer Note 18.
49
2019 2018
NOTE RUPEES RUPEES
16. CURRENT PORTION OF LONG TERM FINANCING
Secured - under mark up arrangements

Demand finance 46,903,419 46,903,419
16.1 This is secured against first charge over fixed assets of the Company ranking pari passu
with the charge created in respect of short term bank borrowings (Refer Note 15.1) and
personal gaurantee of directors of the Company. The principal and related mark up are
overdue and the bank has filed suit for recovery of the finance alongwith related mark
up and cost of funds. Refer Note 18.
17. TRADE AND OTHER PAYABLES
Creditors 22,592,585 16,101,310

Accrued liabilities 17.1 3,267,662 2,359,385
Advance from customers 17.2 5,441,384 5,444,089
Tax deducted at source 13,643 11,763
Workers' welfare fund 907,066 907,066
Compensated absences 320,091 320,091
Unclaimed dividend 142,508 142,508
32,684,939 25,286,212
17.1 Accrued liabilities included in trade and other payables include remuneration payable
to chief executive officer and directors amounting to Rs. 0.425 million (2018: Rs. 0.827
million).
17.2 Advance received from customer is recognized as revenue when the performance
obligation in accordance with the policy as described in note 5.12 is satisfied.
18. CONTINGENCIES
Bankers / financial instituions of the Company have filed suits in banking courts against
the Company under the provisions of Financial Institutions (Recovery of Finances)
Ordinance, 2001 for recovery of overdue short term and long term finances alongwith
related mark up and cost of funds which the Company is defending. The Company has
fully provided for mark up till the date of filing of suits by the banks / financial institutions.
Mark up from the date of filing of suits amounting to Rs. 96.631 million (2018: Rs. 75.610
million) is not acknolwedged in view of pending cases. No provision is made in respect
of any cost of funds as the same depends on the ultimate decision by the banking courts.
The quantum of cost of funds cannot be determined at this stage.
19. SALES
Export
Leather 19.1 31,008,775 38,575,640
Garments - 305,921
31,008,775 38,881,561
Local sale
Job work income -Leather Processing 45,571,762 13,593,715
76,580,537 52,475,276
Commission and discount - (787,546)
76,580,537 51,687,730
19.1 It includes exchange gain of Rs. 687,999 ( 2018 : Rs 32,644 ).
50
2019 2018
NOTE RUPEES RUPEES
20. COST OF SALES
Opening stock of finished goods 19,892,666 14,725,338

Cost of goods manufactured 20.1 78,937,528 54,980,370
98,830,194 69,705,708
Less: Closing stock of finished goods (37,155,431) (19,892,666)
61,674,763 49,813,042
20.1 Cost of goods manufactured
Raw material consumed 19.1.1 28,790,969 33,602,569
Salaries, wages, and benefits 16,178,257 9,732,111
Power, fuel and water 7,681,385 7,770,130
Repairs and maintenance 5,433,340 4,538,332
Cartage and carriage 150,650 219,320
Depreciation 6.1 1,936,393 1,454,885
Others 316,775 299,929
60,487,769 57,617,276
Work in process:
Opening 22,097,340 19,460,432
Closing (3,647,581) (22,097,340)
18,449,759 (2,636,908)
78,937,528 54,980,370
19.1.1 Raw material consumed
Opening 8,589,187 3,837,711

Purchased during the year 27,037,461 38,354,045
Available for consumption 35,626,648 42,191,756
Closing (6,835,679) (8,589,187)
28,790,969 33,602,569
51
2019 2018
NOTE RUPEES RUPEES
21. ADMINISTRATIVE EXPENSES
Directors' remuneration 26 1,086,000 1,086,000

Salaries and benefits 942,857 580,069
Telephone, fax and postage 316,794 357,505
Fees and subscription 935,150 143,795
Printing and stationary 205,714 203,740
Repairs and maintenance 465,440 753,215
Vehicles running and maintenance 127,860 60,870
Legal and professional 131,525 190,800
Auditors' remuneration 21.1 545,000 600,000
Advertisement 10,638 11,820
Balances written off - net 2,151,300 841,764
Depreciation 6.1 123,599 92,865
Others 165,619 92,641
7,207,496 5,015,084
21.1 Auditors' remuneration
Half year review 100,000 100,000

Audit fee 350,000 350,000
Out of pocket expenses 45,000 10,000
Other professional services 50,000 140,000
545,000 600,000
22. SELLING AND DISTRIBUTION EXPENSES
Freight charges 1,899,169 1,922,220

Travelling and conveyance 207,470 313,720
Others 592,863 622,734
2,699,502 2,858,674
23. OTHER INCOME
Duty draw back 558,473 1,529,629

Gain on disposal of property, plant and equipment - 336,706
Sale of scrap 302,310 -
860,783 1,866,335
24. PROVISION FOR TAXATION
Current
for the year 879,735 516,877
for prior years 35,892 -
Deferred 24.2 - -
915,627 516,877
52
24.1 Relationship between tax expense and accounting profit
The relationship between tax expense and accounting profit has not been presented in
these financial statements as the local income of the Company is subject to minimum
tax and export income is subject to final tax. The provision for current taxation is made
under section 113, 153, 154 and 169 of the Income Tax Ordinance, 2001.
24.2 Deferred tax asset works out to Rs. 6.547 million (2018: Rs. 4.617 million) which is not
recognized in these financial statements in view of un-certain future results. It comprises
of the following;
2019 2018
RUPEES RUPEES
Difference between accounting and tax basis of assets 1,490,900 1,673,818

Tax losses carried forward (6,927,169) (5,735,657)
tax credit under section 113 - minimum tax (1,124,783) (555,136)
(6,561,052) (4,616,975)
25. EARNINGS PER SHARE - BASIC AND DILUTED
Profit / (loss) for the year 4,145,727 (5,289,603)

Weighted average number of ordinary shares 3,400,000 3,400,000
Earnings per share - Basic and diluted 1.22 (1.56)
25.1 There is no dilutive effect on the basic earning per share of the Company.
26. REMUNERATION OF CHIEF EXECUTIVE AND DIRECTORS
Chief Executive Directors Total

------------------- (Rupees) -------------------
Remuneration 2019 2018 2019 2018 2019 2018
Managerial 380,160 380,160 314,880 314,880 695,040 695,040

Housing rent 171,072 171,072 142,680 142,680 313,752 313,752
Utilities 42,768 42,768 34,440 34,440 77,208 77,208
594,000 594,000 492,000 492,000 1,086,000 1,086,000

Number of persons 1 1 1 1 2 2
26.1 The Company has also provided mobile and company maintained vehicle to a director.
53
27. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURE
27.1 Financial assets and liabilities
2019
Interest bearing Non - interest bearing
Maturity Maturity Maturity Maturity
Particulars upto after upto after
one year one year one year one year
Financial assets at amortized cost

--------------------------------- (Rupees) ---------------------------------
Long terms deposits - - - 1,409,612
Trade debts - - 86,946,052 -
Advances and other receivables - - 1,084,102 -
Cash and bank balances - - 2,292,185 -
- - 90,322,339 1,409,612
Financial liabilities at amortised cost

Long term loans - - - 12,987,073
Short term bank borrowings 237,419,981 - - -
Current portion of long term demand financing 46,903,419 - - -
Interest / mark up payable - - 124,029,303 -
Trade and other payables - - 26,322,846 -
284,323,400 - 150,352,149 12,987,073
2018
--------------------------------- (Rupees) ---------------------------------
Particulars

Long terms deposits - - - 1,409,612
Trade debts - - 72,250,729 -
Advances and other receivables - - 1,542,698 -
Cash and bank balances - - 388,849 -
- - 74,182,276 1,409,612
Financial liabilities at amortised cost

Long term loans - - - 85,352,742
Short term bank borrowings 237,419,981 - - -
Current portion of long term demand financing 46,903,419 - - -
Interest / mark up payable - - 124,029,303 -
Trade and other payables - - 18,923,294 -
284,323,400 - 142,952,597 85,352,742
54
27.2 Financial risk management objectives and policies
Risk management policies
The company's objectives in managing risks is the creation and protection of shareholders'
value. Risk is inherent in the company's activities, but it is managed through a process
of ongoing identification, measurement and monitoring, subject to risk limits and other
controls. The process of risk management is critical to the company's continuation. The
company is exposed to credit risk, liquidity risk and market risk arising from the financial
instruments it holds.
The company finances its operations through equity, borrowing and management of
working capital with a view to maintain an appropriate mix among various sources of
finances to minimize risk.
Credit risk exposure and concentration of credit risk
Credit risk is the risk which arises with the possibility that one party to a financial
instrument will fail to discharge its obligations and cause the other party to incur a
financial loss. The company attempts to control credit risk by monitoring credit exposure,
limiting transaction with specific counterparties and continually assessing the credit
worthiness of counterparties.
Concentration of credit risk arise when a number of counterparties are engaged in similar
business activities or have similar economic features that would cause their ability to
meet contractual obligations to be similarly affected by changes in economic, political
or other conditions. Concentrations of credit risk indicate the relative sensitivity of the
Company's performance to developments affecting a particular industry.
The maximum exposure to credit risk at the reporting date is as follows:
2019 2018
RUPEES RUPEES
Long terms deposits 1,409,612 1,409,612
Trade debts 86,946,052 72,250,729
Advances and other receivables 1,002,993 1,542,698
Bank balances 2,251,854 342,413
91,610,511 75,545,452
Due to Companys long standing relations with counter parties and after giving due
consideration to their financial standing, the management does not expect non performance
by these counter parties on their obligations to the Company.
For trade debts, credit quality of customers is assessed taking into consideration their
financial position and previous dealings and on that basis, individual credit limits are set.
Moreover, the management regularly monitors and reviews customers' credit exposure.
The credit risk exposure is limited in respect of bank balances as these are placed with
the banks having good credit rating from international and local credit rating agencies.
55
2019 2018
RUPEES RUPEES
The analysis of trade debts is as follows:
Not past due 24,435,350 7,435,532
Past due within one year 2,713,906 737,100
Past due over one year 59,796,797 64,078,097
62,510,703 64,815,197
86,946,053 72,250,729
Liquidity risk
Liquidity risk is the risk that the company will encounter difficulty in meeting its financial
obligations as they fall due. The company's approach to managing liquidity is to ensure,
as far as possible, that it will have sufficient liquidity to meet its liabilities when due,
under both normal and stress conditions without incurring unacceptable losses of risking
damage to the company's reputation. But due to nature of business, unavailability of
proper export orders and bad economic conditions, the management of the company
is making their effort for recoveries from parties and assure that they provide financial
support to Company in meeting its obligations.
Following are the contractual maturities of financial liabilities as at June 30, 2019 and June
30, 2018.
Carrying Contractual Within twelve More than twelve

Amount Cash Flows months months
------------------------------ (Rupees) ------------------------------

2019
Long term loans 12,987,073 12,987,073 - 12,987,073

Short term bank borrowings 237,419,981 237,419,981 237,419,981 -
Current portion of long term financing 46,903,419 46,903,419 46,903,419 -
Interest / mark up payable 124,029,303 124,029,303 124,029,303 -
Trade and other payables 26,322,846 26,322,846 26,322,846 -
447,662,622 447,662,622 434,675,549 12,987,073
Carrying Contractual Within twelve More than twelve

Amount Cash Flows months months
------------------------------ (Rupees) ------------------------------

2018
Long term loans 85,352,742 85,352,742 - 85,352,742

Short term bank borrowings 237,419,981 237,419,981 237,419,981
Current portion of long term demand financing 46,903,419 46,903,419 46,903,419 -
Interest / mark up payable 124,029,303 124,029,303 124,029,303 -
Trade and other payables 18,923,294 18,923,294 18,923,294 -
512,628,739 512,628,739 427,275,997 85,352,742
56
Market risk
Market risk is the risk that changes in market price, such as foreign exchange rates,
interest rates and equity prices will effect the company's income or the value of its
holdings of financial instruments.
Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of financial
instruments will fluctuate because of changes in foreign currency rates. The company
is not significantly exposed to currency risk as at the reporting date.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates.
Majority of interest rate risk arises from long term and short term borrowings from banks.
The Company is not providing markup on long term and short term borrowings as referred
in Note 18, hence is not exposed to any significant interest rate risk.
27.3 Fair value of financial instruments
The carrying value of all financial assets and liabilities reflected in the financial statements
approximating their fair values. Fair value is determined on the basis of objective evidence
at each reporting date. It is the amount for which as asset could be exchanged, or a
liability settled between knowledgeable and willing parties, in arm's length transaction.
27.4 Capital risk management
The Company's objectives when managing capital are to safeguard the Company's
ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital.
Debt is calculated as total external borrowings ('long term financing' and 'short term
borrowings' as shown in the balance sheet) including related mark up payable. Equity
comprises of share capital, loan from director and accumulated loss as shown in the
balance sheet under 'share capital and reserves'.
The information relating to capital employed by the Company as of June 30, 2016 and
2015 were as follows:
2019 2018
RUPEES RUPEES
Total debt 421,339,776 493,705,445

Total equity (294,276,986) (366,627,157)
Total capital employed 127,062,790 127,078,288
28. TRANSACTIONS WITH RELATED PARTIES

The Company carried out transactions with related parties in the normal course of business
which comprise of staff retirement funds, directors and key management personnel. Transactions
with related parties are made under normal commercial terms and conditions. The amounts
due to related party is disclosed in Note 13 to the financial statements and remuneration to
Cheif Executive and Directors is disclosed in Note 26. There is no significant related party
transactions except reciept of loan of Rs. 0.229 million from a director during the year.
29. PLANT CAPACITY AND ACTUAL PRODUCTION
In view of the peculiar nature of the business carried on by the Company, the capacity of the
tanneries is not determinable.
57
2019 2018
RUPEES RUPEES
30. NUMBER OF PERSONS EMPLOYED BY THE COMPANY
Number of employees at the year end 40 21
Average number of employees during the year 37 21
31. DATE OF AUTHORIZATION FOR ISSUE
The financial statements have been authorised for issue by the Board of Directors of the
Company on October 07, 2019.
32 GENERAL
32.1 Rearrangements
Prior year figures have been re-arranged / re-grouped wherever considered necessary
for the purpose of better presentation and comparison. Significant rearrangements made
are as under;
- Short term bank borrowings amounting to Rs. 207.529 million, current portion of long
term financing amounting to Rs. 46.903 million and interest / mark up payable
amounting to Rs. 124.462 million were inlcuded in one line item of 'stagnant liabilities
towards banks' on the face of statement of financial posistion as non current liabilities.
These are presented as separate line items respectively on the face of statement of
financial position as current liabilities.
- Overdue payables under letters of credits amounting to Rs. 29.891 million were
included in creditors under the head of trade and other payables. These are included
in short term borrowings as forced finance.
- Old finished / semi finished stock with written down value of Rs. 19.460 million was
included in the work in process stock. This is included in the finished stock as no
further process will be carried out on this stock.
- Cash finance of Rs. 10.250 million was included in export refinances under the head
of stagnant liabilities towards banks. This is disclosed as a separate line item under
the head of short term bank borrowings.
- Balances written off amounting to Rs.5.692 million and balances written back
amounting to Rs. 4.850 million were included in 'selling and distribution expenses'
and 'other operating income' respectively. These are netted off and presented as
'balances written off - net' under the head of 'administrative expenses'.
32.2 Previous nomenclature Current nomenclature

- Share capital Issued, subscribed and paid up capital
- Unappropriated loss Accumulated loss
- Other liabilities Long term loans
- Trade Debtors Trade debts
- Stores, spares and loose tools Loose tools
- Administrative Administrative expenses
- Selling and distribution Selling and distribution expenses
- Finance cost Bank charges and commission
32.3 Name of ''profit and loss account'' has been changed to ''statement of profit or loss '' to
comply with the requirements of Companies Act, 2017.
32.4 Figures have been rounded off to the nearest Rupee unless otherwise stated.

58
PATTERN OF SHARE HOLDING AS AT JUNE 30, 2019
NUMBER OF SHARE HOLDINGS SHARES HELD

SHAREHOLDERS FROM TO OF RS. 10/- EACH
252 1 100 12,250

187 101 500 37,650
44 501 1000 32,900
47 1001 5000 56,400
7 5001 10000 36,000
9 85001 90000 810,000
1 100001 105000 104,000
1 165000 170000 167,800
2 185000 190000 368,000
1 275001 280000 280,000
1 310001 315000 311,300
1 325001 330000 330,000
1 330001 335000 334,800
1 515000 520000 518,900
555 3,400,000
CATEGORIES OF NO. OF NO. OF HOLDING

SHAREHOLDERS SHAREHOLDERS SHARES HELD PERCENTAGE
Individuals 552 3,392,500 99.78
Investment Companies 2 5,700 0.17
Joint Stock Companies 1 1,800 0.05
555 3,400,000 100.00
59
DETAILS OF PATTERN OF SHAREHOLDING
AS PER REQUIREMENT OF CODE OF CORPORATE GOVERNANCE
NO. OF SHARES PERCENTAGE

SHAREHOLDERS HELD
Associated Companies NIL NIL -
Mutual Funds:
NBP - Trustee Deptt (NIT) 1 3,900 0.11
Investment Corp. of Pakistan 1 1,800 0.05
Public Sector Companies & Corporations:

State Life Insurance Corporation 1 167,800 4.94
Directors, their sposes & Miner children:

Mr. M. Saleem Ahmed Chief Executive 1 518,900 15.26
Mrs. Rubina Jalali W/O M. Saleem Ahmed 1 311,300 9.16
Director
Mr. Azeem Ahmed S/O M. Saleem Ahmed 1 1,000 0.03
Director
Mr. Umer Ahmed S/O M. Saleem Ahmed 1 3,000 0.09
Mr. M. Shoaib Ahmed Chairman / Director 1 330,000 9.71
Mrs. Veronique Ahmed W/O M. Shoaib Ahmed 1 334,800 9.85
Mr. Nayyer Ahmed Jalali Director 1 1,000 0.03
Director
Mr. Bilal Ahmed S/O M. Saleem Ahmed 1 1,000 0.03
Syed Fawad Hussain Rizvi Director 1 1,000 0.03
Sponsors' asspciates & friends: 12 1,282,500 37.72
Other Individuals: 531 442,000 13.00
555 3,400,000 100.00
60
PROXY FORM
I/We__________________________________________________________________________
___________________________________________________of_________________________
being member (s) of Pak Leather Crafts Limited and a holder of ordinary shares, hereby
appoint_____________________________________________of _________________________
____________________________________who is also a member of the company vide Folio No.
____________________________________as my/our proxy to attend and vote for me/us and on
my/our behalf at the 32nd Annual General Meeting of the Company to be held on Monday 28th
October 2019 at 06:30 p.m. or at any adjournment thereof.
Signed this__________________________________day of______________________2019
Please affix
Revenue Stamp
of Rs. 10/=
Signature of Witness
Shareholders Folio No. Number of Shares held
IMPORTANT :
1. A member entitled to attend and vote at a General Meeting is entitled to appoint a proxy to attend and vote instead of him/her. No person
shall act as a proxy, who is not a member of the company except that a company may appoint a person who is not a member.
2. An instrument of proxy duly stamped, and witnessed and the power of attorney or other authority (if any) under which it is signed or a
notarially certified copy of such power or authority, in order to be valid, must be deposited at the registered office of the Company at least
48 hours before the time of the meeting.
3. Signature should agree with the specimen signature registered with the Company.
4. If a member appoints more than one proxy and more than one instrument of proxy are deposited by a member with the company, all
such instrument of proxy shall be rendered invalid
FOR CDC ACCOUNT HOLDERS/CORPORATE ENTITIES:
In addition to the above the following requirements have to be met:
The Proxy form shall be witnessed by two persons whose names, addresses and CNIC numbers shall be mentioned on the form.
Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form.
The proxy shall produce his original CNIC or original passport at the time of the meeting.
In case of corporate entity, the Board of Directors' resolution/power of attorney with specimen signature shall be submitted (unless it
has been provided earlier) alongwith proxy form of the Company.
6:30 2019 28

42494-Pak Leather Craft Annual 2019 PDF

Uploaded by

Copyright:

Available Formats

42494-Pak Leather Craft Annual 2019 PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

42494-Pak Leather Craft Annual 2019 PDF

Uploaded by

Copyright:

Available Formats

ANNUAL REPORT

Details Page No.

Dr.Muhammad Shoaib Ahmed Chairman / Director

Syed Fawad Hussain Rizvi Chairman

HUMAN RESORCE & REMUNERATION

Umer Ahmed Chairman

CHIEF FINANCIAL OFFICER &

Albaraka Bank Pakistan Ltd

EXTERNAL AUDITORS LEGAL ADVISOR

RSM Avais Hyder Liaquat Nauman Shakiel Z. Lari, Advocate

REGISTERED OFFICE SHARE REGISTRAR

Plot 18, Sector 7 - A NI Associates (pvt) Ltd

1. To confirm minutes of the 31stOrdinary General Meeting held on October 27,2018.

6. To transact any other business with the permission of the Chair.

By order of the Board

A. Attending of Meeting in Person:

v) In case of corporate entity, the Board of Directors resolution/power of attorney with

4. Filing of Consent for Election of Directors

b) I am a registered tax payer and my National Tax No. is ------------------.

Development Financial Institution or a Non Banking Financial Institution.

5. Video Conference Facility

I / We, __________________ of ________________ being a member of Pak Leather Crafts

Account No.______________ hereby opt for video conference facility at _________________.

7. Transmission of Annual Financial Statements through email

STATEMENT U/S 134(3) OF THE COMPANIES ACT, 2017

Selection of independent directors:

Circulations of Annual Reports through CD/DVD/USB:

NUMBER OF BOARD MEETING

S. No. Names No. of Meetings Attended / held

1. Mr. M. Saleem Ahmed (CEO) 4/4

On behalf of the Board

Muhammad Saleem Ahmed Umer Ahmed

Karachi: October 07, 2019

We seek blessings of Almighty Allah for success of the Company.

Dr. M. Shoaib Ahmed

October 07, 2019

TOTAL REVENUE 76,580,537 51,687,730

SALARIES, BENEFITS & RELATED COST 18,207,114 83.77 11,398,180

INCOME TAX, SALES TAX, IMPORT DUTY

RETAINED FOR REINVESTMENT &

DEPRECIATION / AMORTISATION 2,059,991 9.48 1,547,750

21,734,892 100.00 13,401,752

PARTICULARS 2019 2018 2017 2016 2015 2014

Net Sales 76,580 51,688 45,286 20,914 17,170 9,005

Gross Profit/(loss) 14,906 1,875 61 (2,312) (11,631) (9,917)

Gross Profit/(loss) ( % ) 19.47 3.63 0.13 (11.05) (67.74) (110.13)

Net Profit/(loss) ( % ) 6.61 (9.23) (10.58) (31.90) (89.52) (232.79)

Earning/(loss) per share

( after tax ) 1.22 (1.56) (1.54) (2.02) (4.57) (6.17)

Current ratio (0.32) (0.30) (0.29) (0.26) (0.26) (0.28)

1. The total number of directors is seven (07) as per the following:

*Relevant requirement of the regulation is applicable on next election of directors.

2. The composition of board is as follows:

Category Number Names

Executive Directors 02 - Mr. Saleem Ahmed

b) HR& Remuneration Committee:

Umer Ahmed Chairman

14. The frequency of meetings of the committee were as follow:

a) Audit Committee: Quarterly

I / We, __ of being a member of Pak Leather Crafts

Account No. hereby opt for video conference facility at ___.

3.1.1 IFRS 9 Financial Instruments

IFRS 9 replaced the provisions of IAS 39 Financial Instruments: Recognition and