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SERF issues second rejoinder on its placement in Defaulter’s segment

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November 11, 2021 (MLN): Service Fabrics Limited (SERF) has issued a second rejoinder against the Pakistan Stock Exchange notification in which it placed the company in the Defaulter’s segment.

In its second statement, Service Fabrics Limited (SERF) informed that it has resumed its commercial activities, which was the major reasons for placing the company in Default Segment.

In a clarification statement, the company updated that its commercial activities have been resumed by taking the concrete steps which include revision of memorandum of association and submitted the same with SECP, issuance of 1486% Right Shares and receipt of 2,341.163 million as subscription money.

It also awarded civil work contract to setup Calcium Carbide Project.

For import of plant and machinery, Letter of Credit (LC) has been opened.

The company also appointed full time Chief Executive Officer. It also completed the process of hiring of Plant Manager, Admin Manager and other staff for day-to-day operations of the Company.

Furthermore, Investment of Rs.400 million has been made in Ghani Chemical Industries Limited (GCIL) and purchased 10,000,000 shares of a largest manufacturer of Industrial and Medical Gases in Pakistan.  SERF holds 6.12% equity stake in GCIL. It is a profitable Company and equity method will be followed for investment in this associated company.

The company also confirmed receipt of 12,200,000 Bonus Shares from Ghani Chemical Industries Limited. It also deposited funds in Saving Bank Accounts & Fixed Accounts and earning profit on unutilized Cash not immediately required, the notice said.

“Thus, at present there is no Going Concern Assumption bar on the SERF and the company has also resumed commercial activities, being the two major reasons for putting the company in Defaulter’s Segment”, the notice cited.

To recall, Pakistan Stock Exchange (PSX) on Tuesday placed the company in Defaulter’s segment on account of default of Clause 5.11.1.(b) of PSX Regulations which states that:

“A listed company may be placed in the Defaulters’ Segment if it has suspended commercial production/ business operation in its principal line of business for a continuous period on one year”.

The next day company issued a rejoinder against PSX notification, wherein the company considered the placement of its shares in the Defaulter's segment as unilateral and due to narrow, one-sided, rigid and unaccled-for interpretation of PSX's regulations.

The Company informed the shareholders that the above has been done without any consideration to the notices of material information having been continuously and timely shared with the market/shareholders since the start of the revival process of the Company.

Company stated that under the regulation 5.11.1(b), the matter of suspension of commercial production/business operations is not applicable to the Company, as it has submitted the memorandum for the change of principle line of the Company's business to SECP.

Also, with regards to the new business activities, the Company has already commenced the business operations/activities that include; Calcium Carbide Project, Super Capacitor Project and Investment in GCIL.

Keeping in view the above, the company is confident that the use of going concern assumption while preparing the forthcoming financial statements would be validated.

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Posted on: 2021-11-11T13:31:43+05:00

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