MS AR 2018 (1)

Recommendations

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REPORT OF THE AUDIT COMMITTEE The Board Audit Committee comprises only of Non- Executive Directors. Chairman of the Committee is an Independent Director. Composition of the Audit Committee has been given in the Directors’ report section. • Four (04) meetings of the Audit Committee were held during the financial year ended June 30, 2018 which were presided by the Chairman, Audit Committee. • The Audit Committee reviewed and recommended for approval the quarterly, half yearly and annual financial statements of the Company prior to their approval by the Board of Directors. • Appropriate accounting policies have been consistently applied. All core and other applicable International Accounting Standards were followed in preparation of financial statements of the Company on a going concern basis, which present fairly the state of affairs, results of operations, cash flows and changes in equity of the Company. • Accounting estimates are based on reasonable and prudent judgment. Proper and adequate accounting records have been maintained by the Company in accordance with the Companies Act, 2017 and the external reporting is consistent with management processes and adequate for member’s needs. • The Board has issued a “Statement of Compliance with the Listed Companies (Code of Corporate Governance) Regulations, 2017” which has also been reviewed and certified by the auditors of the Company. • The Audit Committee has reviewed and recommended all related party transactions. • The Chief Executive Officer and the Chief Financial Officer have endorsed the financial statements of the Company. They acknowledge their responsibility for true and fair presentation of the Company’s financial condition and results, compliance with regulations and applicable accounting standards and establishment and maintenance of internal controls and systems of the Company. • All Directors have access to the Company Secretary. All direct or indirect trading and holdings of Company’s shares by Directors & Executives or their spouses were notified in writing to the Company Secretary along with the price, number of shares, form of share certificates and nature of transaction which were notified by the Company Secretary to the Board within the stipulated time. All such holdings have been disclosed in the pattern of shareholdings. The annual secretarial compliance certificate was filed within stipulated time. • Closed periods were duly determined and announced by the Company, precluding the Directors, the Chief Executive Officer and Executives of the Company from dealing in Company shares, prior to each Board meeting involving announcement of interim / final results, distribution to members or any other business decision, which could materially affect the share market price of Company, along with maintenance of confidentiality of all business information. • The Company’s system of internal control is sound in design and is continually evaluated for effectiveness and adequacy. • The internal control framework has been effectively implemented through an independent in-house internal audit function established by the Board which is independent of the external audit function. 64 MUGHAL IRON & STEEL INDUSTRIES LIMITED
• The internal audit function has carried out its duties under the charter defined by the Committee. The Committee reviews material internal audit findings, taking appropriate action or bringing the matters to the Board’s attention where required. • The Audit Committee on the basis of the internal audit reports reviewed the adequacy of controls and compliance shortcomings in areas audited and discussed corrective actions in the light of management responses. This has ensured the continual evaluation of controls and improved compliance. • The Head of Internal Audit has direct access to the Chairman of the Audit Committee and the Committee has ensured staffing of personnel with sufficient internal audit acumen and that the function has all necessary access to management and the right to seek information and explanations. • Coordination between the external and internal auditors was facilitated to ensure efficiency and contribution to the Company’s objectives, including a reliable financial reporting system and compliance with laws and regulations. • The Chairman of Audit Committee is an Independent Non-Executive Director and is a Ph.D. in finance from the Kelley School of Business Administration, Indiana University, USA. • The Audit Committee has ensured that statutory and regulatory obligations and requirements of best practices of Governance have been met. • The external auditors Fazal Mahmood & Co, Chartered Accountants were allowed necessary coordination with internal auditors. Major findings (if any) arising from audits and any matters that the external auditors wished to highlight were freely discussed with them. • The external auditors have been allowed direct access to the Committee and the effectiveness, independence and objectivity of the auditors has thereby been ensured. The auditors attended the Annual General Meeting of the Company held during the year and have confirmed attendance of the upcoming Annual General Meeting scheduled for October 27, 2018 and have indicated their willingness to continue as auditors. • The Audit Committee reviewed the management letter issued by the external auditors and the management response thereto. Observations were discussed with the auditors and required actions recorded. • Appointment of external auditors and fixing of their audit fee was reviewed and the Audit Committee following this review, recommended to the Board of Directors re-appointment of Fazal Mahmood& Co., as external auditors for the year ending June 30, 2019. On behalf of the Audit Committee Sd- SYED SALMAN ALI SHAH Chairman Audit Committee Lahore: September 19, 2018 Annual Report 2018 65
Page 2 and 3:
COVER STORY Building a strong path
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KEY FIGURES Sales Revenue (2017: 18
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CONTENTS 02 DIRECTORS’ REPORT 24
Page 9 and 10:
01 • COMPANY OVERVIEW Vision, Mis
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VISION STATEMENT To be a leading co
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FAIRNESS We are devoted to implemen
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EQUAL EMPLOYMENT OPPORTUNITIES AND
Page 17 and 18:
PRODUCT PORTFOLIO The Company’s p
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A SIMPLE, EFFECTIVE AND ACHIEVABLE
Page 21 and 22: BOARD OF DIRECTORS Mirza Javed Iqba
Page 23 and 24: ORGANOGRAM OF COMPANY SHAREHOLDERS
Page 25 and 26: CALENDAR OF MAJOR EVENTS 2017-2018
Page 27 and 28: MIRZA JAVED IQBAL Chairman / Non -
Page 29: MR. FAZEEL BIN TARIQ Non - Executiv
Page 32 and 33: CHAIRMAN’S LETTER TO THE SHAREHOL
Page 34 and 35: CHIEF EXECUTIVE OFFICER’S REMARKS
Page 36 and 37: DIRECTORS’ REPORT TO THE SHAREHOL
Page 48 and 49: 40 MUGHAL IRON & STEEL INDUSTRIES L
Page 59 and 60: 03 • REVIEWS & REPORTS Additional
Page 61 and 62: DESCRIPTION OF ENTITY’S RESOURCES
Page 63 and 64: ANALYSIS OF PROSPECTS OF THE ENTITY
Page 65 and 66: BOARD COMMITTEES Audit Committee Co
Page 67 and 68: ANNUAL EVALUATION OF BOARD PERFORMA
Page 69 and 70: WHISTLE BLOWING POLICY As part of o
Page 71: STAKEHOLDERS’ ENGAGEMENT The deve
Page 76 and 77: HORIZONTAL ANALYSIS Statement of Fi
Page 78 and 79: SUMMARY OF STATEMENT OF CASH FLOWS
Page 80 and 81: ANALYSIS OF FINANCIAL RATIOS Ratio
Page 82 and 83: DUPONT ANALYSIS Year Return on Equi
Page 84 and 85: STATEMENT OF CASH FLOWS DIRECT METH
Page 86 and 87: GRAPHICAL ANALYSIS Market Ratios Ru
Page 88 and 89: DISTRIBUTION OF WEALTH 2018 2017 Rs
Page 91 and 92: 05 • FINANCIAL STATEMENTS Indepen
Page 93 and 94: STATEMENT OF COMPLIANCE WITH LISTED
Page 95 and 96: GLOBAL PRESENCE LOCAL EXCELLENCE FA
Page 97 and 98: internal control. • Obtain an und
Page 99 and 100: STATEMENT OF PROFIT OR LOSS & OTHER
Page 101 and 102: STATEMENT OF CASH FLOWS FOR THE YEA
Page 103 and 104: i) Property, plant and equipment an
Page 105 and 106: 5.2 Intangible asset This is stated
Page 107 and 108: taxable temporary differences and d
Page 109 and 110: An impairment loss in respect of a
Page 111 and 112: term loans from banking companies a
Page 113 and 114: calculating the capitalisation rate
Page 115 and 116: 7.1.1 The depreciation for the year
Page 117 and 118: Rupees Note 2018 2017 10. LONG-TERM
Page 119 and 120: 16.3 Government of Pakistan (GoP) i
Page 121 and 122: 21. EQUITY CONTRIBUTION FROM DIRECT
Page 123 and 124:
Rupees 2018 2017 23.2.2 Changes in
Page 125 and 126:
Rupees Note 2018 2017 25. ACCRUED P
Page 127 and 128:
these financial statements as the m
Page 129 and 130:
Rupees Note 2018 2017 33. OTHER CHA
Page 131 and 132:
Rupees 2018 2017 37. EARNINGS PER S
Page 133 and 134:
Rupees 2018 2017 Al-Bashir (Private
Page 135 and 136:
45.1 Credit risk Credit risk repres
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45.2 Liquidity risk Liquidity risk
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Rupees 2018 2017 Variable rate inst
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Other financial Loans and Total Rup
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The heading of following separate l
Page 145:
Annual Report 2018 137
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PATTERN OF SHAREHOLDING AS ON JUNE
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CATEGORY OF SHAREHOLDERS AS ON JUNE
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NOTICE OF THE ANNUAL GENERAL MEETIN
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NOTICE OF THE ANNUAL GENERAL MEETIN
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148 MUGHAL IRON & STEEL INDUSTRIES
Page 158 and 159:
MUGHAL IRON & STEEL INDUSTRIES LIMI
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DEFINITIONS Gross Profit Ratio The
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