Investigation under Section 265 of the Companies Ordinance, 1984 (the "Ordinance") was ordered into the affairs of Ados Pakistan Limited (the "Company") on August 10, 1999 due to deteriorated financial position, continuous losses suffered by the Company, inter-corporate financing and non- payment of dividend to the shareholders. The Company went into appeal against the impugned order in the Lahore High Court, Rawalpindi Bench, Rawalpindi (the "High Court") on September 04, 2000. The Court dismissed the appeal of the Company vide its order dated April 27, 2004.
2. The financial performance of the Company improved slightly in the years 2001 and 2002 and it also paid a dividend @5% in the year 2001. However, its performance again deteriorated in the year 2003. The undersigned instead of ordering investigation into the affairs of the Company decided to provide an opportunity to the Company to come up with a definite plan in the interest of the shareholders if it was desired that investigation into the affairs of the Company may not be conducted. Accordingly the case was fixed for hearing on August 05, 2004.
3. On the date of hearing, Mr. Imran Haider Bokhari, CFO and Mr. Muzafar Zaidi, Accounts Officer of the Company appeared on behalf of the Company and submitted that the management over the past few years has succeeded in settling the loans of financial institutions and has been able to repay the institutional as well the sponsor's loans. The performance of the Company has improved due to which the market price of the Company's share which stood at Rs.1.00 only at the time of issue of show cause notice is now being quoted above par value thus reflecting the shareholder's confidence. They further stated that the fruits of the management's efforts will be reflected in the future financial statements and, therefore, they requested that final decision on investigation proceedings may be deferred for now and taken on the basis of the financial statements for the year ending on June 30, 2005.
4. I have considered all the relevant facts, spirit of law and have also perused the documents placed before me. Although the financial performance of the Company has improved in the previous years, the latest financial statements for the quarter ended March 31, 2004 reflect that the Company has suffered a net loss of Rs.10.924 million for the nine months of the current financial year and accumulated losses stood at Rs.25.837 million against the paid up capital of Rs.65.826 million. Although the current ratio has improved from 1.22:1 to 1.03:1, the financial position of the Company is still not up to satisfactory level. However, keeping in view the submissions of the Company regarding improvement in financial performance and its request to allow some time to improve performance, the investigation proceedings are held in abeyance till receipt of the annual accounts for the period ended on June 30, 2004 to be circulated by October 30, 2004.