| Nakshbandi Industries Limited |
|
|
|
|
|
|
|
|
| ANNUAL
REPORT 1997 |
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Schedule
of Tangible Fixed Assets |
|
| Cash
Flow Statement |
|
| Yearwise
Statistical Summary |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
|
| BOARD
OF DIRECTORS |
|
|
| A.
GHAFFAR HAJI SATTAR- Chairman |
|
| AMANULLAH
HAJI LATIF |
|
| HAMID
HAJI LATIF |
|
| SIRAJUDDIN
KHAN (NIT) |
|
| JUNAID
HAJI LATIF |
|
| MOHAMMED
ASIF A. GHAFFAR |
|
| A.
RAZAK HAJI SATTAR--Chief Executive |
|
|
| CHIEF
ACCOUNTANT |
|
| AND
COMPANY SECRETARY |
|
| RAUF
DAWOOD |
|
|
| BANKERS |
|
| HABIB
BANK LIMITED |
|
| BANK
AL-HABIB LIMITED |
|
|
| AUDITORS |
|
| HYDER
BHIMJI & COMPANY |
|
| Chartered
Accountants |
|
|
| REGISTERED
OFFICE |
|
| H-23/4-A
LANDHI, KARACHI. |
|
|
| MILLS |
|
| H-23/4-A,
LANDHI, KARACHI. |
|
|
|
| Notice
of Meeting |
|
|
| NOTICE
is hereby given that the Twenty Fifth Annual General Meeting of the
Shareholders of Nakshbandi |
|
| Industries
Limited will be held at the Registered Office of the Company at H-23/4A,
Landhi Industrial Area, Karachi |
|
| on
Tuesday, March 31, 1998 at 12:00 Noon. to transact the following business:- |
|
|
| 1.
To confirm the minutes of the Twenty Fourth Annual General Meeting held on
March 29, 1997. |
|
|
| 2.
To receive and adopt the Director's Report and Audited Accounts for the year
ended September 30, |
|
| 1997,
and Auditors' Report thereon. |
|
|
| 3.
To approve the payment of dividend @ 5% and other appropriation as
recommended by the Board. |
|
|
| 4.
To appoint Auditors' and fix their remuneration. |
|
|
| 5.
To transact any other ordinary business as may be placed before the meeting
with the permission |
|
| of
the Chairman. |
|
|
| NOTES: |
|
|
| 1.
The Shares Transfer Book of the Company will remain closed from March 30,
1998 to April 8, 1998 |
|
| (both
days inclusive). |
|
|
|
|
| 2.
A member entitled to vote at any meeting may appoint a proxy. Proxies in
order to be effective, must |
|
| be
received at the Registered Office of the Company duly stamped and signed not
later than 48 |
|
| hours
before the meeting. |
|
|
|
| 3.
A proxy must be a member of the Company. |
|
|
| 4.
Shareholders are requested to immediately notify the change of address if
any. |
|
|
|
| Directors'
Report |
|
|
| Your
Directors have pleasure in presenting to you the Twenty Fifth Annual Report
alongwith the |
|
| audited
accounts of the Company for the year ended September 30, 1997. |
|
|
| The
Financial result of the Company for the year under report are:- |
|
|
|
|
Rupees |
|
|
| Profit
after taxation |
|
6,905,874 |
|
| Add:
Un-appropriated profit brought forward |
|
7,342 |
|
|
|
|
| Amount
available for appropriation |
|
6,913,216 |
|
|
| Appropriation: |
|
| Proposed
Dividend |
|
|
4,538,820 |
|
| Transfer
to General Reserve |
|
2,000,000 |
|
|
---------- |
|
| Un-appropriated
profit carried forward |
|
6,538,820 |
|
|
|
|
---------- |
|
|
|
|
374,396 |
|
|
========== |
|
|
|
|
| During
the year under review, the sales of the company increased by 15.43% from Rs.
551 Million |
|
| to
Rs. 636 Million and profit before tax has increased from Rs. 4,659,437 to Rs.
8,805,874. We are grateful |
|
| to
Almighty Allah that inspite the increase in the prices of Raw material, Dyes
& Chemical and an enormous |
|
| increase
in cost of electricity, gas and water charges that the company was able to
increase Net earning |
|
| per
share from Re. 0.4059 to Re. 0.7607. |
|
|
| DIVIDEND |
|
| Your
Directors are pleased to recommend cash dividend @ 5% that is Re. 0.50 per
share. |
|
|
| BMR
PROGRAMME |
|
| Under
the balancing, modernisation and replacement programme, the majority of the
machines |
|
| imported
by the company were installed and the trial production started. The remaining
Machines listed |
|
| started
operation in the current financial year: |
|
|
| 1.
PAD STEAM WITH WASHING RANGE |
|
| 2.
SHRINKING RANGE |
|
| 3.
SOFT WINDER |
|
| 4.
ROPE DETWISTING |
|
| 5.
LABORATORY EQUIPMENTS |
|
| 6.
JACQUARD CAD CAM SYSTEM |
|
| 7.
EMERIZlNG |
|
|
| Further
the Letter of Credit for following machinery under BMR have been opened and
are expected |
|
| to
be installed in the current financial year: |
|
|
| 1.
STENTER |
|
| 2.
WARPING |
|
| 3.
REVERSE OSMOSIS |
|
|
| It
is expected that all the above equipment will be in operation during the
financial year resulting in |
|
| the
improved financial result in the future years to come. |
|
|
| CURRENT
PROSPECTS |
|
| With
the addition and start up of the above equipment the Company will be in a
position to produce |
|
| value
added dyed fabrics for domestic garment industries and for exports to
Bangladesh, UAE and Sri |
|
| Lankan
Garment manufacturers in addition to Europe and USA. |
|
|
| Inshah
Allah now the company will be able to produce value added Apparel Fabrics in
addition to its |
|
| regular
business of Towels and Grey Cloth. This will help us in achieving better
prices in domestic and |
|
| international
markets. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| A
statement showing the pattern of shareholding in the Company as at September
30, 1997 is |
|
| included
in this report. |
|
|
| AUDITORS |
|
| The
present auditors Hyder Bhimji & Co. Chartered Accountants, retire and
offer themselves for re- |
|
| appointment. |
|
|
| EMPLOYEES'
RELATIONS |
|
| The
Directors wish to express their appreciation for the loyalty to duty of the
workers and staff |
|
| members. |
|
|
|
| Auditors'
Report |
|
| to
the members |
|
|
| We
have audited the annexed Balance Sheet of NAKSHBANDI INDUSTRIES LIMITED, as
at September |
|
| 30,
1997 and the related Profit and Loss Account and Statement of Changes in
Financial Position, (cash flow |
|
| statement)
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 |
|
| the
business conducted, investment 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 Statement of Changes in Financial
Position, (cash flow |
|
| statement)
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 Profit
and Changes in |
|
| Financial
Position (cash flow position) for the year then ended; and |
|
|
| (d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980, was deducted |
|
| by
the Company and deposited in the Central Zakat Fund established under section
7 of that |
|
| Ordinance. |
|
|
|
|
HYDER BHIMJI & CO |
|
| Karachi:
March 5, 1998 |
Chartered Accountants |
|
|
|
|
|
| Balance
Sheet as at September 30, 1997 |
|
|
|
|
|
1997 |
1996 |
|
|
|
Notes |
Rupees |
Rupees |
|
| CAPITAL
AND LIABILITIES |
|
|
|
|
|
|
| CAPITAL
AND RESERVES |
|
|
|
| Share
Capital |
|
|
3 |
|
| Authorised |
|
3.1 |
100,000,000 |
100,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
3.2 |
90,776,400 |
85,473,340 |
|
| REVENUE
RESERVES |
|
|
|
|
| Reserve |
|
|
|
4.1 |
155,033,740 |
145,079,150 |
|
| Un-appropriated
profit |
|
|
374,396 |
7,342 |
|
|
|
|
---------- |
---------- |
|
|
|
|
246,184,536 |
230,559,832 |
|
| Right
shares subscription (R-6) |
|
4.2 |
121,100 |
137,375 |
|
| REDEEMABLE
CAPITAL |
|
5 |
77,500,000 |
25,000,000 |
|
| LONG
TERM LOANS - (Secured) |
|
6 |
410,062 |
12,908,721 |
|
| DEFERRED
LIABILITIES |
|
|
---------- |
---------- |
|
| Gratuity |
|
14,008,933 |
10,946,139 |
|
| Deferred
taxation |
|
|
5,215,614 |
6,515,614 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
19,224,547 |
17,461,753 |
|
| CURRENT
LIABILITIES AND PROVISIONS |
|
---------- |
---------- |
|
| Shod
term running finance (secured) |
7 |
270,149,202 |
243,688,484 |
|
| Current
maturity of long term loans |
|
| and
Redeemable Capital |
|
8 |
22,498,661 |
22,498,331 |
|
| Creditors
and accrued liabilities |
|
9 |
69,079,834 |
36,923,817 |
|
| Workers
participation fund |
|
10 |
905,162 |
674,721 |
|
| Other
liabilities |
|
11 |
880,661 |
646,634 |
|
| Provision
for taxation |
|
|
3,200,000 |
5,275,000 |
|
| Proposed
dividend |
|
|
4,538,820 |
4,084,938 |
|
|
|
|
---------- |
---------- |
|
|
|
371,252,340 |
313,791,925 |
|
| CONTINGENT
LIABILITIES AND COMMITMENTS |
12 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
Total Rupees |
714,692,585 |
599,859,606 |
|
|
|
|
========== |
========== |
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
|
|
|
| At
cost less depreciation as per schedule attached |
330,058,151 |
244,083,682 |
|
|
|
|
| CAPITAL
WORK- IN - PROGRESS |
|
13 |
109,425,291 |
80,771,565 |
|
|
|
|
| LONG
TERM DEPOSITS |
|
14 |
112,280 |
112,280 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
| Stores
and spares |
|
15 |
21,440,964 |
11,702,345 |
|
| Stock-in-trade |
|
16 |
179,578,708 |
134,713,482 |
|
| Trade
Debts |
|
17 |
32,351,497 |
71,040,844 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
18 |
39,209,118 |
56,593,716 |
|
| Cash
and bank balances |
|
19 |
2,516,576 |
841,692 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
275,096,863 |
274,892,079 |
|
|
|
|
---------- |
---------- |
|
|
Total Rupees |
714,692,585 |
599,859,606 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
| Note:
The annexed notes form an integral part of these accounts. |
|
|
|
| Profit
and Loss Account |
|
| for
the year ended September 30, 1997 |
|
|
|
|
|
1996 |
1997 |
|
|
Notes |
Rupees |
Rupees |
|
|
|
|
| SALES |
|
|
20 |
636,192,749 |
550,738,155 |
|
| Cost
of Sales |
|
21 |
545,627,239 |
465,751,717 |
|
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT |
|
90,565,510 |
84,986,438 |
|
|
|
|
---------- |
---------- |
|
| Administrative
expenses |
|
22 |
14,549,258 |
12,795,300 |
|
| Selling
expenses |
|
23 |
23,451,594 |
22,399,521 |
|
|
|
|
---------- |
---------- |
|
|
|
|
38,000,852 |
35,194,821 |
|
| OPERATING
PROFIT |
|
|
52,564,658 |
49,791,617 |
|
| other
income |
|
|
384,147 |
774,487 |
|
|
|
|
---------- |
---------- |
|
|
|
|
52,948,805 |
50,566,104 |
|
|
|
|
---------- |
---------- |
|
| Financial
expenses |
|
25 |
43,363,674 |
45,529,855 |
|
| Worker's
welfare fund |
|
|
300,000 |
125,000 |
|
| Worker's
participation fund |
|
|
479,257 |
251,812 |
|
|
|
|
---------- |
---------- |
|
|
|
|
44,142,931 |
45,906,667 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
BEFORE TAXATION |
|
|
8,805,874 |
4,659,437 |
|
| Provision
for taxation |
|
27 |
1,900,000 |
975,000 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
AFTER TAXATION |
|
|
6,905,874 |
3,684,437 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
7,342 |
407,843 |
|
|
|
|
---------- |
---------- |
|
| Amount
available for appropriation |
|
6,913,216 |
4,092,280 |
|
| APPROPRIATIONS |
|
|
|
---------- |
---------- |
|
| Proposed
dividend @ 5% (1996: @ 4.5%) |
|
4,538,820 |
4,084,938 |
|
| General
Reserve |
|
|
2,000,000 |
- |
|
|
|
|
|
---------- |
---------- |
|
|
|
6,538,820 |
4,084,938 |
|
|
|
---------- |
---------- |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
|
374,396 |
7,342 |
|
|
|
========== |
========== |
|
|
| Note:
The annexed notes form an integral pad of these accounts. |
|
|
|
| Schedule
of tangible fixed assets |
|
| as
at September 30, 1997 |
|
|
|
|
|
COST |
|
|
|
Annual |
Depre- |
Accumulated |
Net Book |
|
|
As at |
|
Disposal |
As at |
rate of |
ciation for |
Depreciation |
Value as at |
| Particulars |
|
October |
Additions |
and |
Sept. 30, |
Deprec- |
the year |
upto |
30-09-1997 |
|
|
1, 1996 |
|
Adjustment |
1997 |
iation % |
|
30-09-1997 |
|
|
| Leasehold
land |
|
|
250,000 |
- |
- |
250,000 |
|
|
|
|
- |
- |
- |
250,000 |
| Leasehold
land Office |
|
|
1,500,000 |
- |
- |
1,500,000 |
|
|
|
|
|
- |
- |
- |
1,500,000 |
| Building
on |
|
|
69,892,320 |
5,450,371 |
- |
75,342,691 |
10% |
3,638,597 |
42,595,323 |
32,747,369 |
| leasehold
land |
|
|
|
|
|
|
| Office
Bldg. |
|
|
|
| on
leasehold land |
|
5,868,979 |
- |
- |
5,868,979 |
10% |
448,819 |
1,829,611 |
4,039,368 |
| Plant
& machinery |
|
|
364,328,194 |
132,541,266 |
20,399,000 |
476,470,460 |
10% |
30,894,058 |
198,423,953 |
278,046,508 |
| Electric
fitting |
|
|
2,991,747 |
- |
- |
|
|
|
|
|
|
2,991,747 |
10% |
128,723 |
1,833,240 |
1,158,507 |
| Office
equipments |
|
|
5,299,867 |
1,690,165 |
- |
6,990,032 |
15% |
680,145 |
3,135,875 |
3,854,157 |
| Furniture
& Fixture |
|
|
1,956,447 |
665,347 |
- |
2,621,794 |
10% |
194,458 |
871,669 |
1,750,125 |
| Vehicles |
|
8,069,727 |
3,429,000 |
32,300 |
11,466,427 |
20% |
1,678,029 |
4,754,310 |
6,712,117 |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
| Total
Rupees: 1997 |
|
460,157,281 |
143,776,149 |
20,431,300 |
583,502,130 |
|
37,662,829 |
253,443,981 |
330,058,151 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
| Total
Rupees: 1996 |
|
404,033,780 |
61,584,283 |
5,460,782 |
460,157,281 |
|
27,804,538 |
216,073,599 |
244,083,682 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
| Depreciation
charge for the year has been allocated as under:- |
|
|
|
|
|
1997 |
1996 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Cost
of goods manufactured |
|
|
36,788,225 |
27,160,494 |
|
| Administrative
expenses |
|
|
874,604 |
644,044 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
37,662,829 |
27,804,538 |
|
|
|
========== |
========== |
|
|
|
|
|
|
| Statement
of Changes in Financial Position (Cash Flow |
|
| Statement)
for the year ended September 30, 1997 |
|
|
|
|
|
1997 |
1996 |
|
|
|
Rupees |
Rupees |
|
| CASH
FROM OPERATING ACTIVITIES |
|
|
|
| Profit
before taxation |
|
|
8,805,874 |
4,659,437 |
|
| Adjustment
For: |
|
|
|
---------- |
---------- |
|
| Depreciation |
|
37,662,829 |
27,804,538 |
|
| Financial
Charges |
|
|
43,363,674 |
45,529,855 |
|
| Gratuity |
|
|
3,062,794 |
857,224 |
|
| Loss/(Profit)
on sales of fixed assets |
|
(384,147) |
(774,487) |
|
|
|
---------- |
---------- |
|
| Cash
generated from operations before |
|
92,511,024 |
78,076,567 |
|
| working
capital changes |
|
|
|
|
|
|
| Changes
in working Capital |
|
|
|
| (Increase)/Decrease
in current assets |
|
|
| Stores
and spares |
|
9,738,619 |
808,085 |
|
| Stock-in-trade |
|
44,865,226 |
(16,072,704) |
|
| Sundry
'debtors |
|
(38,689,347) |
40,524,105 |
|
| Advances,
deposits and prepayments |
|
(17,384,598) |
7,853,956 |
|
|
|
|
|
---------- |
---------- |
|
|
|
(1,470,100) |
(33,113,442) |
|
| Increased
in Creditors, Accrued and other Liabilities |
32,614,146 |
(10,148,321 |
|
|
|
---------- |
---------- |
|
| Cash
generated from operating activities |
|
123,655,070 |
34,814,804 |
|
|
|
|
| Cash
(out flow)/inflow from operations |
|
|
| Financial
Charges Paid |
|
(43,363,674) |
(45,529,855) |
|
| Payment
of Income Tax |
|
|
(2,334,800) |
(2,500,000) |
|
| Dividend
Paid |
|
|
(4,078,599) |
(3,394,235) |
|
| Fixed
Capital Expenditure |
|
(172,429,875) |
100,183,383 |
|
| Refund
of Right Shares Subscription |
|
(16,275) |
(3,121,625) |
|
| Long
term loan |
|
|
(22,498,331) |
(34,396,873) |
|
|
|
---------- |
---------- |
|
| Net
Cash (outflow) from operating activities |
|
(121,066,484) |
(154,311,167) |
|
| CASH
FROM FINANCING ACTIVITIES |
|
|
|
| Right
Shares Subscription |
|
13,257,650 |
100,212,850 |
|
| Reedemable
Capital |
|
|
62,500,000 |
- |
|
| Proceed
from disposal of fixed assets |
|
20,523,000 |
2,725,690 |
|
|
|
---------- |
---------- |
|
| Net
Cash (inflow) from financing activities |
|
96,280,650 |
102,938,540 |
|
|
|
|
|
========== |
========== |
|
| Net
(Decrease)/Increase in Cash and Cash Equivalent |
(24,785,834) |
(51,372,627) |
|
| Cash
and cash equivalent at the beginning |
|
(242,846,792) |
(191,474,165) |
|
|
|
|
|
---------- |
---------- |
|
| Cash
and cash equivalent at the end |
|
(267,632,626) |
(242,846,792) |
|
|
|
|
|
========== |
========== |
|
| CASH
AND CASH EQUIVALENTS |
|
|
|
|
| Cash
and bank balance |
|
|
2,516,576 |
841,692 |
|
| Shod
term running finance |
|
|
(270,149,202) |
(243,688,484) |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
(267,632,626) |
(242,846,792) |
|
|
|
|
========== |
========== |
|
|
| Yearwise
Statistical Summary |
|
|
|
|
|
|
(Rs. in million) |
|
|
|
|
| ASSETS
EMPLOYED |
|
1993 |
1994 |
1995 |
1996 |
1997 |
|
|
|
|
| Fixed
Assets |
|
232.64 |
222.69 |
254.43 |
324.86 |
439.48 |
|
| Investments,
Long term |
|
| Advances
& deposits |
|
0.11 |
0.11 |
0.11 |
0.11 |
0.11 |
|
| Current
Assets |
|
165.53 |
197.11 |
241.56 |
274.89 |
275.10 |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
| Total
Assets Employed |
|
398.28 |
419.92 |
496.10 |
599.86 |
714.69 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
|
| FINANCED
BY |
|
|
|
|
|
| Shareholders'
Equity |
|
41.26 |
41.26 |
45.39 |
85.47 |
90.78 |
|
| Long
Term Liabilities |
|
80.18 |
