| Nishat Mills Limited |
|
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|
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| (Annual
Report for the year ended September 30, 1996) |
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| Company
Information |
|
|
| BOARD
OF DIRECTORS: |
|
| Mrs.
Naz Mansha |
Chief Executive |
|
| Mr.
Yusuf H. Shirazi |
|
| Mian
M. Iqbal Saigol |
|
| Mian
Gulzar Ahmad |
|
| Mian
Tanveer A. Sheikh |
|
|
| Mr.
Muhammad Bashir Tariq |
|
| Rana
Muhammad Mushtaq |
|
| Mr.
Asad Ali Sheikh (PICIC) |
|
|
| ADVISER: |
|
|
| Mian
Muhammad Mansha |
|
|
| COMPANY
SECRETARY: |
|
| Mr.
Mohammad Azam |
|
|
| AUDITORS: |
|
|
| Riaz
Ahmad & Company |
|
| Chartered
Accountants |
|
|
| LEGAL
ADVISER: |
|
| Mr.
M. Aurangzeb Khan, Advocate, |
|
| Chamber
No.6, District Court, |
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| Faisalabad. |
|
|
| BANKERS
TO THE COMPANY: |
|
| ABN
AMRO Bank |
|
|
Habib Bank Limited |
|
| Allied
Bank of Pakistan Limited |
Habib Bank A.G. Zurich |
|
| American
Express Bank Limited |
|
National Bank of Pakistan |
|
| Askari
Commercial Bank Limited |
|
Schon Bank Limited |
|
| Bank
of America |
|
Standard Chartered Bank |
|
| Banque
Indosuez |
|
Societe Generale - The
French |
|
| Citibank
N.A. |
|
and International Bank |
|
| Crescent
Investment Bank Limited |
The Bank of Punjab |
|
| Emirates
Bank International Limited |
Union Bank Limited |
|
| Faysal
Bank Limited |
|
United Bank Limited |
|
|
| MILLS: |
|
|
| Nishatabad,
Faisalabad |
|
(Spinning, Weaving,
Processing |
|
|
|
and stitching units) |
|
| 12 K.M. Faisalabad Road,
Sheikhupura. |
(Weaving II) |
|
|
|
|
|
| REGISTERED
OFFICE: |
|
| Nishatabad,
Faisalabad |
|
| Tel:
041-754809-16 |
|
| Fax:
041-753105, 754817 |
|
|
| LIAISON
OFFICE: |
|
| 1st
Floor, Karachi Chambers, |
|
| Hasrat
Mohani Road, Karachi. |
|
| Tel:
021-2414721-23 |
|
|
| Fax:
021-2412936 |
|
|
|
| BRANCH
OFFICE: |
|
| Nishat
House, |
|
| 53-A,
Lawrence Road, Lahore. |
|
| Tel:
042-6367812-16 |
|
| Fax:
042-6367414 |
|
|
| SHARES
OFFICE: |
|
| 28-Main
Gulberg, Lahore. |
|
| Tel:
042-5763916, 5769918 |
|
| Fax:
042-5769918 |
|
|
|
|
|
|
|
Notice of Annual General
Meeting |
|
|
| NOTICE
is hereby given that 48th Annual General Meeting of the shareholders of
NISHAT MILLS LIMITED will be |
|
| held
on March 31, 1997 (Monday) at 10.30 a.m. at the Registered Office,
Nishatabad, Faisalabad to transact the |
|
| following
business:- |
|
|
| 1.
To confirm the minutes of the last General Meeting. |
|
|
| 2.
To receive and adopt the audited accounts for the year ended September 30,
1996 together with the Auditors' |
|
| and
Directors' reports thereon. |
|
|
|
|
| 3.
To appoint auditors for the year ending September 30, 1997 and fix their
remuneration. The present Auditors |
|
| M/s.
Riaz Ahmad & Company, Chartered Accountants, retire and being eligible,
offer themselves for re- |
|
| appointment. |
|
|
| 4.
SPECIAL BUSINESS: |
|
| To
pass the following Special Resolution with or without modification to
increase the authorized capital of the |
|
| Company: |
|
|
|
|
|
| RESOLVED
THAT the authorized capital of the Company be and is hereby increased from |
|
| Rs.
1,000,000,000 divided into 100,000,000 ordinary shares of Rupees 10/- each to
Rs. 1,500,000,000 |
|
| divided
into 150,000,000 ordinary shares of Rupees 10/- each and new shares so issued
shall rank |
|
| pari
passu with the existing shares in all respects and clause "V" of
the Memorandum of Association |
|
| of
the Company will be amended to read as follows: |
|
|
| "The
authorized capital of the Company shall be Rs.1,500,000,000 (one billion five
hundred million) |
|
| divided
into 150,000,000 (one hundred fifty million) ordinary shares of Rupees 10/-
each. The |
|
| Company
shall have the power to increase, reduce or reorganize the said capital and
divide shares |
|
| in
the capital for the time being in several classes in accordance with the
provisions of the Companies |
|
| Ordinance,
1984". |
|
|
|
| STATEMENT
UNDER SECTION 160(I)(b) OF THE COMPANIES ORDINANCE 1984. |
|
|
|
| It
is proposed to increase the authorized capital of the Company as above to
enable the issue of |
|
| shares
as and when deemed necessary. |
|
|
| 5.
To transact any other business that may be brought forward with the
permission of the chair. |
|
|
| BOOKS
CLOSURE |
|
| The
Share Transfer Books of the company will remain closed from March 31,1997 to
April 06, 1997 (both days |
|
| inclusive). |
|
|
|
|
BY ORDER OF THE BOARD |
|
|
| Lahore: |
|
|
(MOHAMMAD AZAM) |
|
| March
05, 1997. |
|
COMPANY SECRETARY |
|
|
|
| NOTES: |
|
| 1)
A member eligible to attend and vote at this meeting may appoint another
member as his/her proxy to attend |
|
| and
vote instead of him/her. Proxies in order to be effective must be received at
the Company's Registered |
|
| Office
not less than 48 hours before the time for holding the meeting, during
working hours. |
|
|
|
|
| 2)
Members are requested to immediately notify the change in address, if any. |
|
|
|
|
|
Chief Executive's Review |
|
|
| On
behalf of the Board of Directors of NISHAT MILLS LIMITED, it is my pleasure
to welcome you |
|
| all
to the 48th Annual General Meeting of the Company, and to present the
financial statements |
|
| for
the year ended 30 September 1996. By the grace of Almighty Allah
"Nishat" was able to earn |
|
| a
net profit after taxation of Rs. 135.209 million, against Rs. 29.886 million
during the last year. |
|
| Sales
for the year were recorded at Rs. 6.748 billion, against Rs. 6.158 billion in
the preceding year, |
|
| recording
an increase of 9.58%. Export sales touched Rs. 4.850 billion, showing an
increase of |
|
| 13.29%
against last year's Rs. 4.281 billion. With these exports, we have maintained
our position |
|
| of
being the largest textile exporter in the country for the year under review.
The federation of |
|
| Pakistan
Chamber of Commerce and Industry has decided to award the FPCCI President of |
|
| Pakistan
Trophy to our company for the year 1994-95 in recognition of the company's
outstanding |
|
| performance
in the export of Fabrics, Yarn and comber noil. |
|
|
| These
remarkable results are attributed to timely purchase of raw cotton at cheaper
rates, |
|
| continuous
monitoring, adjustment of our production mix in view of changing market
conditions and |
|
| aggressive
marketing and financial planning. |
|
|
| The
Management is relentlessly following the policy of keeping up with the latest
technology so as |
|
| to
have better quality. It is hoped that your company will continue to progress
(Inshallah). |
|
|
| I
would like to place on record appreciation for the hardwork and cooperation
of both staff and |
|
| officers
of the company towards achieving the targets set and progress of the company. |
|
|
|
|
(MRS. NAZ MANSHA) |
|
|
|
CHIEF EXECUTIVE |
|
|
|
|
Directors' Report |
|
|
| The
Directors of the Company feel pleasure in submitting their report together
with the audited accounts of the |
|
| Company
for the year ended 30 September 1996. |
|
|
|
|
(RUPEES IN THOUSAND) |
|
|
|
1996 |
1995 |
|
|
| Profit
and appropriations |
|
| Profit
before taxation |
|
145,787 |
4,301 |
|
| Current
taxation |
|
|
(10,578) |
25,585 |
|
|
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
135,209 |
29,886 |
|
|
|
|
|
|
| Unappropriated
profit brought forward |
|
33,994 |
4,108 |
|
|
|
|
|
|
| Profit
available for appropriation |
|
169,203 |
33,994 |
|
|
|
|
---------- |
---------- |
|
| Appropriation |
|
|
|
|
|
|
|
|
|
| Transferred
to general reserve |
|
169,000 |
-- |
|
|
|
|
---------- |
---------- |
|
| Unappropriated
profit |
|
203 |
33,994 |
|
|
========== |
========== |
|
|
|
| Auditors |
|
| The
present auditors M/s Riaz Ahmad and Company, Chartered Accountants retire,
and being eligible, offer |
|
| themselves
for reappointment. |
|
|
| Pattern
of Shareholdings |
|
| The
pattern of shareholdings as referred by Section 236 of th~ Companies
Ordinance, 1984 is enclosed. The |
|
| Directors
place on record their appreciation for the efforts put in by the executives,
staff members and workers of |
|
| the
Company. |
|
|
|
|
FOR AND ON BEHALF OF THE
BOARD |
|
|
| Lahore: |
|
|
(MRS. NAZ MANSHA) |
|
| 05
March, 1997 |
|
CHIEF EXECUTIVE |
|
|
|
|
Auditors' Report to the
Members |
|
|
| We
have audited the annexed balance sheet of NISHAT MILLS LIMITED as at 30
September 1996 and the related |
|
| profit
and loss account and statement of sources and application of funds, together
with the notes forming part |
|
| thereof,
for the year then ended 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 our audit
and, after due verification thereof, |
|
| we
report that: |
|
|
| a)
in our opinion, proper books of account have been kept by the Company as
required by the Companies |
|
| Ordinance,
1984; |
|
|
|
|
| b)
in our opinion: |
|
|
| i)
the balance sheet and profit and loss account together with the notes thereon
have been drawn up in |
|
| conformity
with the Companies Ordinance, 1984, and are in agreement with the books of
account and |
|
| are
further in accordance with accounting policies consistently applied; |
|
|
| ii)
the expenditure incurred during the year was for the purpose of the Company's
business; and |
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the year were in |
|
| accordance
with the objects of the Company; |
|
|
| c)
in our opinion and to the best of our information and according to the
explanations given to us, the balance |
|
| sheet,
profit and loss account and the statement of sources and application of
funds, together with the |
|
| notes
forming part thereof, give the information required by the Companies
Ordinance, 1984, in the manner |
|
| so
required and respectively give a true and fair view of the state of the
Company's affairs as at 30 September |
|
| 1996
and of the profit and the changes in sources and application of funds for the
year then ended; and |
|
|
| d)
in our opinion, no Zakat was deductible at source under the Zakat & Ushr
Ordinance, 1980. |
|
|
| Faisalabad
' |
|
(RIAZ AHMAD &
COMPANY) |
|
| 23
February, 1997 |
|
CHARTERED ACCOUNTANTS |
|
|
|
|
Balance Sheet as at
September 1996 |
|
|
(RUPEES IN THOUSAND) |
|
|
NOTE |
1996 |
1995 |
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
share capital |
|
|
| 100,000,000
ordinary shares |
|
| of
Rs. 10/- each |
|
|
1,000,000 |
1,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid up share capital |
3 |
869,149 |
847,710 |
|
| Capital
reserves |
|
4 |
911,878 |
890,440 |
|
| Revenue
reserves |
|
5 |
1,324,965 |
1,155,965 |
|
| Unappropriated
profit |
|
|
203 |
33,994 |
|
|
---------- |
---------- |
|
|
|
|
3,106,195 |
2,928,109 |
|
| SURPLUS
ON REVALUATION OF |
|
| TANGIBLE
FIXED ASSETS |
|
|
12,118 |
12,118 |
|
| REDEEMABLE
CAPITAL |
|
6 |
830 |
10,535 |
|
| DEBENTURES
AND LONG TERM LOANS |
|
|
|
| Custom
debentures |
|
7 |
2,024 |
5,103 |
|
| Long
term loans |
|
8 |
534,535 |
671,182 |
|
|
|
|
---------- |
---------- |
|
|
|
|
536,559 |
676,285 |
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
| SUBJECT
TO FINANCE LEASE |
|
9 |
163,231 |
230,200 |
|
|
| DEFERRED
LIABILITIES |
|
| Taxation |
|
|
|
-- |
29,000 |
|
| Gratuity |
|
|
|
2,748 |
3,585 |
|
|
---------- |
---------- |
|
|
|
|
2,748 |
32,585 |
|
|
| CURRENT
LIABILITIES |
|
| Current
portion of long term liabilities |
10 |
239,584 |
270,935 |
|
| Short
term running finances |
|
11 |
1,656,464 |
1,752,253 |
|
| Creditors,
accrued and other liabilities |
12 |
940,925 |
1,077,436 |
|
| Workers'
participation fund |
|
13 |
7,792 |
384 |
|
| Provision
for taxation |
|
|
100,085 |
60,507 |
|
| Dividend
payable |
|
|
917 |
928 |
|
|
|
|
---------- |
---------- |
|
|
|
|
2,945,767 |
3,162,443 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
14 |
-- |
-- |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
6,767,448 |
7,052,275 |
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| TANGIBLE
FIXED ASSETS |
|
| Operating
fixed assets |
|
15 |
2,275,622 |
2,484,805 |
|
| Assets
subject to finance lease |
16 |
343,557 |
343,954 |
|
| Capital
work -in-progress |
|
17 |
182,314 |
179,414 |
|
|
|
|
---------- |
---------- |
|
|
|
|
2,801,493 |
3,008,173 |
|
|
|
|
|
| LONG
TERM INVESTMENTS |
|
18 |
1,973,776 |
1,973,776 |
|
|
|
|
| LONG
TERM LOANS, DEPOSITS, |
|
|
| PREPAYMENTS
AND DEFERRED COSTS |
|
19 |
50,604 |
73,821 |
|
|
|
|
| CURRENT
ASSETS |
|
|
| Stores,
spare parts and loose tools |
20 |
336,984 |
352,814 |
|
| Stock-in-trade |
|
21 |
740,193 |
913,434 |
|
| Trade
debts |
|
22 |
248,788 |
200,049 |
|
| Advances,
deposits and prepaymerits |
23 |
270,476 |
180,611 |
|
| Other
receivables |
|
24 |
332,421 |
294,254 |
|
| Cash
and bank balances |
|
25 |
12,713 |
55,343 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,941,575 |
1,996,505 |
|
|
---------- |
---------- |
|
|
|
6,767,448 |
7,052,275 |
|
|
========== |
========== |
|
|
|
|
Profit and Loss Account |
|
|
for the year ended 30
September 1996 |
|
|
|
(RUPEES IN THOUSAND) |
|
|
|
NOTE |
1996 |
1995 |
|
|
|
| SALES |
|
26 |
6,748,089 |
6,157,932 |
|
| COST
OF GOODS SOLD |
|
27 |
5,712,460 |
5,510,724 |
|
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT |
|
|
1,035,629 |
647,208 |
|
| ADMINISTRATIVE,
SELLING AND |
|
|
|
| GENERAL
EXPENSES |
|
28 |
361,359 |
336,698 |
|
|
|
|
---------- |
---------- |
|
| OPERATING
PROFIT |
|
|
674,270 |
310,510 |
|
| OTHER
INCOME |
|
29 |
49,279 |
197,174 |
|
|
|
|
---------- |
---------- |
|
|
|
|
723,549 |
507,684 |
|
|
|
|
|
|
| FINANCIAL
AND OTHER CHARGES |
|
30 |
570,012 |
502,999 |
|
| WORKERS'
PARTICIPATION FUND |
|
|
7,750 |
384 |
|
|
|
|
---------- |
---------- |
|
|
|
|
577,762 |
503,383 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
BEFORE TAXATION |
|
|
145,787 |
4,301 |
|
| PROVISION
FOR TAXATION |
|
31 |
(10,576) |
25,585 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
AFTER TAXATION |
|
|
135,209 |
29,886 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FOWARD |
|
33,994 |
4,108 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
169,203 |
33,994 |
|
| APPROPRIATION |
|
|
| Transfer
to general reserve |
|
|
169,000 |
-- |
|
|
|
|
---------- |
---------- |
|
| UNAPPROPRIATED
PROFIT |
|
|
203 |
33,994 |
|
|
========== |
========== |
|
| The
annexed notes form an integralpart of these accounts. |
|
|
|
|
Statement of Sources and
Application of Funds |
|
|
for the year ended 30
September 1996 |
|
|
ii |
|
(RUPEES IN THOUSAND) |
|
|
|
1996 |
1995 |
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
145,787 |
4,301 |
|
| Adjustments
to reconcile profit to net |
|
| cash
provided by operating activities |
|
| Depreciation
and amortization |
|
|
281,593 |
290,803 |
|
| Gain
on disposal/adjustment of |
|
|
|
|
| operating
fixed assets |
|
|
(10,178) |
(22,481) |
|
| Provision/adjustment
of gratuity |
|
(284) |
1,151 |
|
| Operating
fixed assets discarded/adjusted |
|
3,618 |
14,054 |
|
| Amortization
of deferred cost |
|
|
5,082 |
5,082 |
|
| Profit
on sale of equity investments |
|
(3,263) |
(12,755) |
|
| Financial
charges |
|
|
569,900 |
499,655 |
|
|
---------- |
---------- |
|
| Cash
flows from operating activities |
|
| before
working capital changes |
|
|
992,255 |
779,810 |
|
|
| CASH
FLOWS FROM WORKING CAPITAL CHANGES |
|
| (Increase)/decrease
in current assets |
|
| Stores,
spare parts and loose tools |
|
15,830 |
(110,152) |
|
| Stock-in-trade |
|
|
173,241 |
(191,299) |
|
| Trade
debts |
|
|
(48,739) |
49,141 |
|
| Advances,
deposits and prepayments |
|
(24,571) |
(15,027) |
|
| Other
receivables |
|
|
(38,167) |
(108,970) |
|
|
| Increase/(decrease)
in current liabilities |
|
| Short
term running finances |
|
|
(95,789) |
708,027 |
|
| Creditors,
accrued and other liabilities |
|
(131,414) |
81,836 |
|
| Workers'
participation fund |
|
|
7,408 |
(5,533) |
|
|
|
|
|
|
|
| Net
cash flows from working capital changes |
|
(142,201) |
408,023 |
|
|
|
|
---------- |
---------- |
|
| Cash
flows from operating activities |
|
850,054 |
1,187,833 |
|
|
|
|
|
|
| Financial
charges paid |
|
|
(574,997) |
(531,073) |
|
| Taxes
paid |
|
|
(65,294) |
(62,497) |
|
| Gratuity
paid |
|
|
(553) |
(277) |
|
|
|
|
---------- |
---------- |
|
| Net
cash flows from operating activities |
|
209,210 |
594,046 |
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
| Long
term loans, deposits and prepayments |
|
18,135 |
(11,983) |
|
| Quota
purchased |
|
|
-- |
(25,409) |
|
| Proceeds
from disposal of operating fixed assets |
80,625 |
157,014 |
|
| Proceeds
from sale of equity investments |
|
3,263 |
65,157 |
|
| Short
term investment made |
|
-- |
(796,585) |
|
| Fixed
capital expenditure |
|
(92,106) |
(289,864) |
|
| Leased
assets acquired |
|
(56,872) |
(124,846) |
|
|
|
|
---------- |
---------- |
|
| Net
cash flows from investing activities |
|
(46,955) |
(1,026,516) |
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
| Share
capital and reserves |
|
|
42,877 |
187,163 |
|
| Redemption
of redeemable capital |
|
(12,265) |
(12,042) |
|
| Custom
debentures issued |
|
|
2,529 |
-- |
|
| Redemption
of custom debentures |
|
(14,548) |
(6,359) |
|
| Repayment
of long term loans |
|
|
(139,527) |
(334,261) |
|
| Liabilities
against leased assets |
|
24,428 |
76,749 |
|
| Repayment
of liabilities against leased assets |
(108,368) |
(91,151) |
|
| Dividend
paid |
|
|
(11) |
(6) |
|
|
|
|
|
|
| Net
cash flows from financing activities |
|
(204,885) |
(179,907) |
|
|
---------- |
---------- |
|
| Net
increasel(decrease) in cash and |
|
| cash
equivalent |
|
|
(42,630) |
(612,377) |
|
|
| Cash
and cash equivalent at the beginning |
|
| of
the year |
|
|
55,343 |
667,720 |
|
|
| Cash
and cash equivalent at the end |
|
---------- |
---------- |
|
| of
the year |
|
|
12,713 |
55,343 |
|
|
========== |
========== |
|
|
| Notes
to the Accounts for the year |
|
| ended
30 September 1996 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
|
| Nishat
Mills Limited is a public company incorporated in Pakistan under the
Companies Act, 191:~ (Now |
|
| Companies
Ordinance, 1984) and listed on Stock Exchanges in Pakistan. The company is
engaged in the |
|
| business
of textile manufacturing and of spinning, combing, weaving, bleaching,
dyeing, printing, stitching, |
|
| buying,
selling and otherwise dealing in yarn, linen, cloth and other goods and
fabrics made from raw |
|
| cotton,
synthetic fibre and cloth. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting Convention |
|
| These
accounts have been prepared under the historical cost convention as modified
by capitalization |
|
| of
exchange differences (Note 2.4) and revaluation of freehold land which was
made by the independent |
|
| valuer
in 1976. |
|
|
|
|
|
| 2.2
Staff Retirement Benefits |
|
| The
Company operates a funded provident fund scheme covering all permanent
employees. Monthly |
|
| contribution
at the rate of 6.25 percent of basic pay of employees is made to the fund.
The company |
|
| has
also provided the liability for gratuity in respect of all employees
according to the West Pakistan |
|
| Industrial
and Commercial Employment (Standing Orders) Ordinance, 1968 upto the period
when there |
|
| was
no provident fund scheme inforce. |
|
|
