| ANNOOR TEXTILE MILLS LIMITED |
|
|
|
|
|
|
|
|
| ANNUAL
REPORT 1997 |
|
|
|
|
| BOARD
OF DIRECTORS |
|
| Mr.
Khalid Ebrahim -- Chairman |
|
| Mr.
Mohammed Ibrahim -- Chief Executive |
|
| Mr.
Esmail Ebrahim |
|
| Mr.
Dawood Ebrahim |
|
| Mr.
Ahmed Ebrahim |
|
| Mr.
Tariq Bawany |
|
| Mr.
Mohammed Khalid Valimohamad |
|
|
| COMPANY
SECRETARY |
|
| Mr.
Jahangir Adam |
|
|
| BANKERS |
|
| Habib
Bank Limited |
|
| National
Bank of Pakistan |
|
| Muslim
Commercial Bank Ltd. |
|
|
| CO-AUDITORS |
|
| Messrs.
Hyder Bhimji & Co. |
|
| Chartered
Accountants |
|
|
| Messrs.
Rahim lqbal Rafiq & Co. |
|
| Chartered
Accountants. |
|
|
| REGISTERED
OFFICE |
|
| 3rd
Floor, Bank House No. 1, |
|
| Habib
Square, |
|
| M.
A. Jinnah Road, |
|
| Karachi. |
|
|
| MILLS |
|
| Dhabeji
(District Thatta). |
|
|
|
| NOTICE
OF THE MEETING |
|
|
| Notice
is hereby given that the Twenty-eight Annual General Meeting of the Company
will be held on |
|
| Thursday,
19th March, 1998 at 12.00 noon at the Registered Office of the Company at 3rd
Floor, Bank House |
|
| No.
1, Habib Square, M. A. Jinnah Road, Karachi to transact the following
business :- |
|
|
| 1)
To confirm the Minutes of the Twenty-seventh Annual General Meeting of the
Company held on |
|
| 2nd
February, 1997. |
|
|
| 2)
To receive, consider and adopt the Audited Accounts for the year ended 30th
September, 1997 |
|
| together
with Directors' and Auditors' reports thereon. |
|
|
| 3)
To appoint Auditors for the year 1997-98 and to fix their remuneration. The
present Co-Auditors |
|
| of
the Company, M/s. Hyder Bhimji & Co., Chartered Accountants and M/s.
Rahim Iqbal Rafiq & |
|
| Co.,
Chartered Accountants, being eligible, offer themselves for re-appointment. |
|
|
| 4)
To transact any other business that may be brought forward with the
permission of the Chairman. |
|
|
| The
Share Transfer Books of the company will be closed from 10th March, 1998 to
19th March, 1998 (both |
|
| days
inclusive.) |
|
|
By order of the board |
|
| Karachi:
Dated 12th February, 1998 |
|
(JAHANGIR ADAM) |
|
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
A member entitled to attend and vote at the General Meeting is entitled to
appoint a proxy to attend and |
|
| vote
on his behalf. Form of Proxies in order to be valid must be received at the
Registered Office of the |
|
| Company
48 hours before the time of the Meeting. A proxy must be a member of the
Company. |
|
|
| 2.
Shareholders are requested to notify any change in address immediately. |
|
|
|
| DIRECTORS'
REPORT |
|
| IN
THE NAME OF ALLAH, THE MOST GRACIOUS |
|
| THE
MOST MERCIFUL |
|
|
| Dear
Shareholders, |
|
|
| By
the grace of Almighty Allah, your Directors present herewith Twenty-eighth
Report alongwith the Audited |
|
| Accounts
and Auditors' Report for the year ended 30th September, 1997. |
|
|
| Loss
before taxation after charging depreciation |
|
Rs. |
6,929,993 |
|
| Less:
Provision for taxation written back |
|
Rs. |
1,928,241 |
|
|
|
---------- |
|
| Net
Loss for the year after taxation |
|
Rs. |
5,001,752 |
|
| Add:
Accumulated Loss brought forward from the previous year |
Rs. |
4,098,356 |
|
|
|
---------- |
|
| Loss
carried over to balance sheet |
|
Rs. |
9,100,108 |
|
|
========== |
|
|
| As
reported in last printed balance sheet for the year ended 30th September
1996, we had again closed down |
|
| our
mills from 27th October 1996 due to textile crisis and increase in the cost
of raw materials and other |
|
| inputs.
The mill has remained closed up till now. |
|
|
| In
view of above, the company has suffered losses during the year under review.
Beside this, in pursuance |
|
| to
Resolution passed in the Extra ordinary general meeting of Share Holders held
on 27th December 1995, |
|
| the
company had disposed off certain Assets during the year. |
|
|
| PRODUCTION: |
|
| During
the year under review, our production on the basis of 20s Count remained at
336240 Lbs against |
|
| last
year's production of 2,206,355 Lbs. due to lesser number of days mills worked
i.e. 27 days against |
|
| last
year's 468 days. As a result of curtailment of production, our sales have
also decreased from Rs. |
|
| 58,847,008/-
to Rs. 8,425,199/-. |
|
|
| PROSPECTS
FOR THE YEAR 1997-98. |
|
| Due
to textile crisis, from which textile industry is passing since last so many
years, prospects for the |
|
| year
1997-98 are not very bright in view of shortage of cotton production and
higher prices of Polyester |
|
| Fibre.
The spinning of yarn is not viable at such increased prices of Raw Materials
and on old machinery |
|
| which
we have. |
|
|
| As
such, the board of directors have decided to dispose off certain old
remaining machineries to reduce |
|
| the
financial charges so there will be reduction in losses to the company, in
accordance with the Resolution, |
|
| of
extra ordinary general meeting of the company held on 27th Dec. 1995, in
which it was decided that |
|
| old
and outdated assets of the company be disposed off and if deemed fit, to
purchase the substantial |
|
| assets
of balancing or modernization/replacement of plant & machineries. The
apprehension of auditors |
|
| regarding
continuing of company as going concern, it is not ascertained at the moment
due to uncertain |
|
| future
of textile industry. |
|
|
| AUDITORS: |
|
| The
Co-Auditors of the company M/s. Hyder Bhimji & Co., Chartered Accountants
and M/s. Rahim |
|
| Iqbal
Rafique & Co., Chartered Accountants, retire and offer themselves for
re-appointment. |
|
|
| PATTERN
OF SHAREHOLDINGS: |
|
| The
pattern of shareholdings is annexed to the report. |
|
|
| CONCLUSION: |
|
| With
the blessings of Almighty Allah, the Labour Management relations remained
cordial throughout the |
|
| year.
Your Directors also place on record their appreciation for the loyalty and
devotion to duty of workers, |
|
| officers
and members of staff of the company. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Annoor Textile Mills Limited as at
September 30, 1997 |
|
| and
the related profit and loss account and statement of changes in financial
position 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)
The company has on September 30, 1997 accumulated losses of Rs. 9.100 million
and its current |
|
| liabilities
exceed its current assets by Rs. 7.524 million as on that date. In view of
the above alongwith |
|
| the
significance of the matter as stated in note 1.2 raise doubt that the company
will be able to |
|
| continue
as a going concern. The financial statements do not include any adjustments
relating to |
|
| the
recoverability and classification of recorded assets and liabilities that are
necessary to reflect these |
|
| items
on realizable basis. |
|
|
| (b)
In our opinion, proper books of account have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| (c)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; |
|
|
| (d)
Except as stated in para (a) above, 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 |
|
| changes
in financial position, 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 September 30, 1997 and
of the loss and |
|
| the
changes in financial position for the year then ended; and |
|
|
| (e)
in our opinion, "No Zakat was deductible at source under the Zakat and
Ushr Ordinance, 1980." |
|
|
| RAHIM
IQBAL RAFIQ & COMPANY |
|
HYDER BHIMJI &
COMPANY |
|
| Chartered
Accountants |
|
Chartered Accountants |
|
| Karachi:
dated the 12th February, 1998 |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 1997 |
|
|
|
1997 |
1996 |
|
|
Notes |
Rupees |
Rupees |
|
|
| SHARE
CAPITAL |
|
| AUTHORISED |
|
| 2,000,000
ordinary shares of Rs.5/- each |
|
10,000,000 |
10,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
3 |
8,712,000 |
8,712,000 |
|
|
| General
Reserve |
|
4 |
-- |
-- |
|
| Accumulated
loss |
|
(9,100,108) |
(4,098,356) |
|
|
---------- |
---------- |
|
|
(388,108) |
4,613,644 |
|
|
| DEFERRED
LIABILITIES |
|
5 |
1,050,000 |
4,240,000 |
|
|
| CURRENT
LIABILITIES |
|
| Short
term finance |
|
6 |
2,355,506 |
11,290.04 |
|
| Creditors,
accrued and other liabilities |
|
7 |
5,924,613 |
7,648,696 |
|
| Taxation |
|
2,181,214 |
3,063,831 |
|
|
---------- |
---------- |
|
|
10,461,333 |
22,002,565 |
|
| CONTINGENCY |
|
8 |
|
|
---------- |
---------- |
|
|
11,123,225 |
30,856,209 |
|
|
========== |
========== |
|
|
| OPERATING
FIXED ASSETS |
|
9 |
7,921,675 |
16,176,935 |
|
|
| LONG
TERM DEPOSITS |
|
264,960 |
264,960 |
|
|
| CURRENT
ASSETS |
|
| Stores
and spares |
|
10 |
2,446,899 |
2,567,120 |
|
| Stock-in-trade |
|
11 |
-- |
5,535,676 |
|
| Trade
debts - unsecured considered good |
|
|
98,857 |
5,031,505 |
|
| Loans,
advances, and deposits |
|
12 |
172,946 |
753,446 |
|
| Cash
and bank balances |
|
13 |
217,888 |
526,567 |
|
|
---------- |
---------- |
|
|
2,936,590 |
14,414,314 |
|
|
---------- |
---------- |
|
|
11,123,225 |
30,856,209 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these financial statements. |
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1997 |
|
|
|
1997 |
1996 |
|
|
Notes |
Rupees |
Rupees |
|
|
| Sale |
|
14 |
8,425,199 |
58,847,008 |
|
| Cost
of goods sold |
|
15 |
(10,036,978) |
(56,702,176) |
|
|
---------- |
---------- |
|
| Gross
(loss) / Profit |
|
(1,611,779) |
2,144,832 |
|
| Operating
expenses |
|
| Administrative
and general |
|
16 |
(668,632) |
(1,369,630) |
|
| Selling
and distribution |
|
17 |
(37,469) |
(674,391) |
|
|
---------- |
---------- |
|
|
(706,101) |
(2,044,021) |
|
|
---------- |
---------- |
|
| Operating
profit/(loss) |
|
(2,317,880) |
100,811 |
|
| Financial
charges |
|
18 |
(1,457,469) |
(2,563,624) |
|
| Loss
on sale of assets |
|
(3,154,644) |
(4,252,695) |
|
|
---------- |
---------- |
|
|
(4,612,113) |
(6,816,319) |
|
|
---------- |
---------- |
|
| Loss
before taxation |
|
(6,929,993) |
(6,715,508) |
|
| Provision
for taxation |
|
| current
-- minimum tax |
|
(40,000) |
(300,000) |
|
| Prior
years |
|
18,241 |
-- |
|
| Deferred |
|
1,950,000 |
2,000,000 |
|
|
---------- |
---------- |
|
|
1,928,241 |
1,700,000 |
|
|
---------- |
---------- |
|
| Loss
after taxation |
|
(5,001,752) |
(5,015,508) |
|
| Accumulated
loss brought forward |
|
(4,098,356) |
(82,848) |
|
|
---------- |
---------- |
|
|
(9,100,108) |
(5,098,356) |
|
| Transferred
from general reserve |
|
-- |
1,000,000 |
|
|
---------- |
---------- |
|
| Accumulated
loss carried forward to |
|
| balance
sheet |
|
(9,100,108) |
(4,098,356) |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these financial-statements. |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1997 |
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Loss
before taxation |
|
(6,929,993) |
(6,715,508) |
|
| Adjustment
for |
|
| Depreciation |
|
324,881 |
844,096 |
|
| Financial
charges |
|
1,457,469 |
2,563,624 |
|
| Loss
on sale of assets -- net |
|
3,154,644 |
4,252,695 |
|
| Gratuity
(Net) |
|
(1,240,000) |
(85,000) |
|
|
---------- |
---------- |
|
|
3,696,994 |
7,575,415 |
|
| Operating
profit/(loss) before |
|
| working
capital changes |
|
(3,232,999) |
859,907 |
|
|
|
|
|
| Changes
in working capital |
|
|
|
| (Increase)/decrease
in current assets |
|
|
|
| Stores
and spares |
|
120,221 |
109,518 |
|
| Stock
in trade |
|
5,535,676 |
3,090,655 |
|
| Trade
debts |
|
4,932,648 |
(5,031,505) |
|
| Loans,
advances and deposits |
|
580,500 |
(166.278) |
|
| Increase/(decrease)
in current liabilities |
|
|
|
| Creditors,
accrued and other liabilities |
|
(2,514,156) |
1,584,008 |
|
|
---------- |
---------- |
|
|
8,654,889 |
(413,602) |
|
|
---------- |
---------- |
|
| Cash
generated from operations |
|
5,421,890 |
446,305 |
|
|
---------- |
---------- |
|
| Taxes
paid |
|
(904,376) |
(125,745) |
|
| Financial
charges paid |
|
(667,103) |
(2,242,979) |
|
| Dividend
paid |
|
(293) |
(211) |
|
|
---------- |
---------- |
|
|
(1,571,772) |
(2,368,935) |
|
|
---------- |
---------- |
|
| Net
cash (used in)/from operating activities |
|
3,850,118 |
(1,922,630) |
|
|
========== |
========== |
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
| Proceeds
from disposal of fixed assets |
|
4,775,735 |
7,645,000 |
|
|
---------- |
---------- |
|
| Net
cash from investing activities |
|
4,775,735 |
7,651.85 |
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
|
| Decrease
in short term finance |
|
(8,934,532) |
(5,662,129) |
|
|
---------- |
---------- |
|
| Net
cash used in financing activities |
|
(8,934,532) |
(5,662,129) |
|
|
---------- |
---------- |
|
| Increase/(Decrease)
in cash |
|
(308,679) |
67,091 |
|
| Cash
and bank balances at the beginning |
|
|
|
| of
the year |
|
526,567 |
459,476 |
|
|
---------- |
---------- |
|
| Cash
and bank balance at the end of the year |
|
217,888 |
526,567 |
|
|
========== |
========== |
|
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1997 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
|
| 1.1
The company is limited by shares incorporated in Pakistan on August 8, 1966
and is listed |
|
| on
Karachi and Lahore stock exchanges. The principal activity of the company is
to |
|
| manufacture
and sell various kinds of yarn. |
|
|
| 1.2
The company ceased its operations on July 22, 1995 and has restarted the same
from March |
|
| 18,
1996 and again ceased its operations from October 27, 1996. In the Extra
Ordinary |
|
| General
Meeting held on December 27, 1995 the company decided to dispose off the
sizeable |
|
| portion
of the assets. Upto January 15, 1998 after the balance sheet date the company
has |
|
| disposed
off certain items of plant and machinery to the tune of Rs.378,422/-. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting Convention |
|
|
| The
financial statement of the company have been prepared under the
"historical cost |
|
| convention". |
|
|
| 2.2
Employees' retirement benefit |
|
|
| The
company operates an unfunded gratuity scheme covering all employees eligible
to the |
|
| benefit.
Provision is made annually to cover the obligation under the scheme. |
|
|
| 2.3
Taxation |
|
|
| Current |
|
|
| Provision
for current taxation is based on taxable income at the current rates of
taxation after |
|
| taking
into account tax credits and rebates available, if any or turnover tax which
ever is higher. |
|
|
| Deferred |
|
|
| The
company accounts for deferred taxation on all material timing differences
using liability |
|
| method. |
|
|
| 2.4
Operating Fixed Assets |
|
|
| Operating
fixed assets are stated at cost less accumulated depreciation except freehold
land |
|
| which
is stated at cost. |
|
|
| Depreciation
is charged to income applying the reducing balance method at the rates
specified |
|
| in
fixed assets note except for plant & machinery on which depreciation is
charged on the |
|
| basis
of actual operating days. |
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. Major renewals |
|
| and
replacements are capitalised. |
|
|
| Gains
or losses on disposal of assets are included in current income. |
|
|
| 2.5
Stores and Spares |
|
|
| These
are valued at moving average cost. |
|
|
| 2.6
Stock in trade |
|
|
| These
are valued at lower of net realizable value and cost. The cost is determined
applying |
|
| the
following basis: |
|
|
| Raw
material |
: at actual cost.. |
|
| Work
in process |
: at prime cost. |
|
| Finished
goods |
: at average
manufacturing cost. |
|
| Waste |
|
: at net realisable value |
|
| 2.7
Trade Debts |
|
| Debts
considered irrecoverable are written off and provision is made for debts
considered |
|
| doubtful. |
|
|
| 2.8
Revenue Recognition |
|
|
| Sales
are recorded on despatch of goods. |
|
|
1996 |
1997 |
|
|
Rupees |
Rupees |
|
|
| 3.
ISSUED, SUBSCRIBED AND PAID UP CAPITAL |
|
|
| 1997 |
1996 |
|
|
| 1,200,000 |
1,200,000 |
Ordinary Shares of Rs.
5/- |
|
|
each fully paid in cash |
|
6,000,000 |
6,000,000 |
|
|
| 542,400 |
542,400 |
Ordinary shares of Rs.
5/- |
|
|
issued as fully paid
bonus |
|
|
shares |
|
2,712,000 |
2,712,000 |
|
| ---------- |
---------- |
|
---------- |
---------- |
|
| 1,742,400 |
1,742,400 |
|
8,712,000 |
8,712,000 |
|
| ========== |
========== |
|
========== |
========== |
|
|
|
|
|
| 4.
GENERAL RESERVE |
|
|
| Opening
balance |
|
-- |
1,000,000 |
|
| Transferred
to profit and loss account |
|
-- |
(1,000,000) |
|
|
---------- |
---------- |
|
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
| 5.
DEFERRED LIABILITIES |
|
|
| Gratuity |
|
-- |
1,240.00 |
|
| Deferred
taxation |
|
1,050,000 |
3,000,000 |
|
|
---------- |
---------- |
|
|
1,050,000 |
4,240,000 |
|
|
========== |
========== |
|
|
|
|
| 5.1
The gratuity of all permanent staff have been paid off during the year.
However, certain staff have |
|
| been
retained as an Adhoc basis, therefore no provision for gratuity have been
provided for the year. |
|
|
| 6.
SHORT TERM FINANCE -- Secured |
|
| Under
mark-up arrangements: |
|
2,355,506 |
11,290,038 |
|
|
---------- |
---------- |
|
| --
From banks (6.1) |
|
2,355,506 |
11,290,038 |
|
|
========== |
========== |
|
|
|
|
| 6.1
Security |
|
| The
finance are secured by way of hypothecation of stock, equitable mortgage of
property and |
|
| personal
guarantee of Directors. |
|
|
| Markup |
|
| It
carries markup @ 60 paisa per Rs. 1,000/- per day. |
|
|
| Limit |
|
| Rs.
15.5 million (1996: Rs. 25.5 million) |
|
|
| 7.
CREDITORS, ACCRUED AND OTHER LIABILITIES |
|
|
| Creditors |
|
28,622 |
1,927,206 |
|
| Accrued
expenses |
|
3,755,935 |
4,370,037 |
|
| Accrued
mark-up on finance |
|
1,922,109 |
1,131,743 |
|
| Withholding
income tax |
|
-- |
1,470 |
|
| Unclaimed
dividend |
|
217,947 |
218,240 |
|
|
---------- |
---------- |
|
|
5,924,613 |
7,648,696 |
|
| 8.
CONTINGENCY |
|
| Arrears
of octroi for a period from |
|
| July
1, 1990 to May 31, 1991 and |
|
| December,
1991 written back |
|
| Rs.
1,875,000 in 1995. |
|
|
| 9.
OPERATING FIXED ASSETS |
|
|
|
C O S T |
|
DEPRECIATION |
|
|
---------------------------------- |
------------------------------------------- |
Written down |
| PARTICULARS |
|
As at |
|
As at |
RATE |
As at |
for the year |
As at |
value as at |
|
October |
(Disposals) |
September |
% |
October |
(Adjustment) |
September |
September |
|
|
01, 1996 |
|
30, 1997 |
|
01, 1996 |
|
30, 1997 |
30, 1997 |
|
|
---------------------------------- |
------------------------------------------- |
|
| Land-Freehold |
|
96,626 |
-- |
96,626 |
-- |
-- |
-- |
-- |
96,626 |
|
