| NISHAT MILLS LIMITED |
|
|
|
|
|
|
|
|
| Annual
Report 1997 |
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Meeting |
|
| Chief
Executive's Review |
|
| Financial
Highlights |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
|
| 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 |
|
| Mrs.
Akhter Jehan Begum |
|
| Mr.
Muhammad Bilal 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 |
|
| Faisalabad, |
|
|
| BANKERS
TO THE COMPANY: |
|
| ABN
AMRO Bank |
|
Habib Bank Limited |
|
| Allied
Bank of Pakistan Limited |
|
Habib Bank A.G. Zurich |
|
| AI-Baraka
Islamic Investment Bank |
|
Metropolitan Bank Limited |
|
| American
Express Bank Limited |
|
Mashreq Bank P.S.C. |
|
| Askari
Commercial Bank Limited |
|
National Bank of Pakistan |
|
| Soneri
Bank Limited |
|
Prudential Commercial
Bank |
|
| Bank
of America |
|
Prime Commercial Bank
Ltd. |
|
| Credit
Agricole Indosuez |
|
Standard Chartered Bank
Ltd. |
|
| Citibank
N.A. |
|
Societe General - The
French |
|
| Crescent
Investment Bank Limited |
|
and International Bank |
|
| Deutsche
Bank |
|
The Hong Kong &
Shangai |
|
| Emirates
Bank International P.J.S.C |
|
Banking Corporation
Limited. |
|
| Faysal
Bank Limited |
|
Union Bank Limited |
|
|
United Bank Limited. |
|
|
|
| MILLS: |
|
(Spinning, Weaving,
Processing |
|
| Nishatabad,
Faisalabad |
|
stitching & Power
Plant) |
|
|
|
| 12
K.M. Faisalabad Road, Sheikhupura (Weaving units & power Plant) |
|
|
|
| REGISTERED
OFFICE: |
|
| Nishatabad,
Faisalabad |
|
| Tel:
041-754809-16 |
|
| Fax:
041-753105, 754817 |
|
| Email
edp@nishat.fsd.brain.net. PK. |
|
|
|
| LIAISON
OFFICE: |
|
| 1
st Floor, Karachi Chambers, |
|
| Hasrat
Mohani Road, Karachi. |
|
| Tel:
021-2414721-23 |
|
| Fax:
021-2412936 |
|
|
| BRANCH
/ SHARES OFFICE: |
|
| Nishat
House, |
|
| 53,A,
Lawrence Road, Lahore. |
|
| Tel:
042-6367812-16 |
|
| Fax:
042-6367414 |
|
| Page |
|
|
|
|
|
| Notice
of Annual General Meeting |
|
|
| NOTICE
is hereby given that 49th Annual General Meeting of the members of NISHAT
MILLS LIMITED will be held on |
|
| March
31, 1998 (Tuesday) at 11.00 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 of the Company for the year ended
September 30, 1997 together |
|
| with
Directors' and Auditors' reports thereon. |
|
|
| 3.
To approve Cash Dividend @ 15% (i.e. Rs. 1.50 per share) as recommended by
the Board of Directors, |
|
|
| 4.
To appoint Auditors for the year ending September 30, 1998 and fix their
remuneration. The present Auditors |
|
| M/s.
Riaz Ahmad & Company, Chartered Accountants, being eligible have offered
themselves for |
|
| reappointment, |
|
|
| 5.
SPECIAL BUSINESS: |
|
|
| To
pass the following Special Resolution with or without modification |
|
|
| "RESOLVED
THAT the following Special Resolution dated December 23, 1992 adopted by the
members of the |
|
| Company,
be and is hereby treated as cancelled: |
|
|
| "b)
That the following object clause No. 54 be added in the Memorandum of
Association of the Company |
|
|
| To
carry on all or any kind of the cement business of manufacturers, sellers,
dealers and conveniences |
|
| of
all kinds. |
|
|
| STATEMENT
UNDER SECTION 160 (I) (b) OF THE COMPANIES ORDINANCE 1984 |
|
|
| The
shareholders of the company had approved the insertion of sub-clause 54 in
object clause II! of the |
|
| Memorandum
of Association of the company, At the later stage the management considered
that insertion |
|
| of
said clause is not required due to change in market conditions and revised
economic policy. Therefore, |
|
| the
change was dropped. |
|
|
| The
copies of Memorandum and Articles of Association of the company have been
kept at the registered |
|
| office
of the company which can be inspected from 9.00. a.m. to 11,00 a.m. during
working hours, upto |
|
| March
30, 1998. |
|
|
| 6.
To transact any other matter with the permission of the chair, |
|
| BOOKS
CLOSURE |
|
| The
share Transfer Books of the Company will remain closed from March 31, 1998 to
April 07, 1998 (both days |
|
| inclusive), |
|
|
| NOTES: |
|
|
| i)
The Cash Dividend will be paid to the shareholders whose name will appear in
the register of members as at |
|
| the
close of business on March 30, 1998 |
|
|
| ii)
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 by the Company at the |
|
| Registered
Office not later than 48 hours before the time for holding the meeting in
working hours, |
|
|
| iii)
Members are requested to immediately notify the change of 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 |
|
| 49th
Annual General Meeting of the Company and to present the financial statements
for the year |
|
| ended
30 September, 1997. By the grace of Almighty Allah "Nishat" was
able to earn a net profit after |
|
| taxation
of Rs. 324.739 million (after merger) against Rs. 135.209 million during the
last year. Sales for the |
|
| year
were recorded at Rs. 8.572 billion (after merger) against Rs. 6.748 billion
in the preceding year. |
|
| Export
sales touched Rs. 7.215 billion (after merger) against last year's Rs, 4.850
billion. |
|
|
| FPCCI
Export Trophy Awards |
|
|
| Nishat
Mills Limited is basically an export oriented company equipped with latest
textile technology and |
|
| takes
pride in having maintained / improved its standards of quality and
efficiency. For the last three |
|
| years
the company has continuously been awarded the FPCCI President of Pakistan
Trophy in recogni- |
|
| tion
of outstanding performance in the export of fabrics, yarn and comber nell. |
|
|
| Merger
of Nishat Fabrics Limited and Nishat Tek Limited |
|
|
| It
is a matter of great pleasure that Nishat Fabrics Limited and Nishat Tek
Limited have been merged |
|
| with
Nishat Mills Limited on October 01,1996 as per the scheme of arrangement
approved by the |
|
| Honourable
Lahore High Court Lahore. This merger had been deemed essential in view of
the current |
|
| phase
of the textile industry cycle. Consolidation of operations and resulting
economies of scale are |
|
| considered
vital for survival and success in the current environment. This acquisition
will also allow Nishat |
|
| Mills
Limited several cost advantages. |
|
|
| Future
Prospects |
|
|
| In
spite of inflationary trend and increasing cost of materials / auxiliaries, I
hope that through efforts of |
|
| management
and staff, latest textile technology and diversification of resources your
company will |
|
| Inshallah
continue to progress. |
|
|
|
| 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, 1997 being the first year of
accounts after merger of |
|
| Nishat
Fabrics Limited and Nishat Tek Limited into Nishat Mills Limited. |
|
|
|
(Rupees in thousand) |
|
|
1997 |
1996 |
|
| Profit
and appropriations |
|
|
| Profit
before taxation |
|
379,589 |
145,787 |
|
| Current
taxation |
|
(54,850) |
(10,578) |
|
|
--------- |
--------- |
|
| Profit
after taxation |
|
324,739 |
135,209 |
|
|
|
|
| Un-appropriated
profit brought forward |
203 |
33,994 |
|
| Transferred
on merger |
|
(24,104) |
- |
|
|
| Profit
available for appropriation |
|
300,838 |
169,203 |
|
| Appropriations |
|
| Proposed
dividend |
|
167,017 |
- |
|
| Transferred
to general reserve |
|
133,000 |
169,000 |
|
|
--------- |
--------- |
|
| Un-appropriated
profit |
|
821 |
203 |
|
|
========= |
========= |
|
| 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 the Companies
Ordinance, 1984 is enclosed. |
|
| Acknowledgment |
|
| The
Directors place on record their appreciation for the efforts put in by the
executives, staff members |
|
| and
workers of the Company. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of NISHAT MILLS LIMITED as at 30
September 1997 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 infor- |
|
| mation
and explanations which to the best of our knowledge and belief were necessary
for the pur- |
|
| poses
of our audit and, after due verification thereof, 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 1997 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 and Ushr
Ordinance, 1980. |
|
|
|
|
|
| Balance
Sheet as at 30 September 1997 |
|
|
|
(Rupees in thousand) |
|
| |
|
NOTE |
1997 |
1996 |
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
share capital 150,000,000 (1996: |
|
| 100,000,000)
ordinary shares of Rupees 10 each |
|
1,500,000 |
1,000,000 |
|
|
========= |
========= |
|
|
| Issued,
subscribed and paid up share capital |
3 |
1,113,444 |
869,149 |
|
| Capital
reserves |
|
4 |
1,037,622 |
911,878 |
|
| Revenue
Reserves |
|
5 |
1,666,518 |
1,324,965 |
|
| Unappropriated
profit |
|
821 |
203 |
|
|
--------- |
--------- |
|
|
3,818,405 |
3,106,195 |
|
|
| SURPLUS
ON REVALUATION OF |
|
| TANGIBLE
FIXED ASSETS |
|
12,118 |
12,118 |
|
|
| REDEEMABLE
CAPITAL |
|
6 |
250,259 |
830 |
|
|
| DEBENTURES
AND LONG TERM LOANS |
|
| Custom
debentures |
|
7 |
1,828 |
2,024 |
|
| Long
term loans |
|
8 |
623,973 |
534,535 |
|
|
--------- |
--------- |
|
|
625,801 |
536,559 |
|
|
| LIABILITIES
AGAINST ASSETS |
|
| SUBJECT
TO FINANCE LEASE |
|
9 |
221,871 |
163,231 |
|
|
| DEFERRED
LIABILITIES FOR GRATUITY |
|
6,591 |
2,748 |
|
| CURRENT
LIABILITIES |
|
| Current
portion of long term liabilities |
10 |
318,581 |
239,584 |
|
| Shod
term running finances |
|
11 |
2,481,574 |
1,656,464 |
|
| Creditors,
accrued and other liabilities |
12 |
766,487 |
940,925 |
|
| Workers'
participation fund |
|
13 |
21,021 |
7,792 |
|
| Provision
for taxation |
|
168,534 |
100,085 |
|
| Proposed
dividend |
|
167,017 |
- |
|
| Dividend
payable |
|
1,786 |
917 |
|
|
--------- |
--------- |
|
|
3,925,000 |
2,945,767 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
14 |
-- |
-- |
|
|
--------- |
--------- |
|
|
8,860,045 |
6,767,448 |
|
|
========= |
========= |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| TANGIBLE
FIXED ASSETS |
|
| Operating
fixed assets |
|
15 |
3,295,763 |
2,275,622 |
|
| Assets
subject to finance lease |
|
16 |
500,582 |
343,557 |
|
| Capital
work-in-progress |
|
17 |
23,276 |
182,314 |
|
|
|
--------- |
--------- |
|
|
|
3,819,621 |
2,801,493 |
|
| LONG
TERM INVESTMENTS |
|
18 |
1,813,420 |
1,973,776 |
|
| LONG
TERM LOANS, DEPOSITS, |
|
| PREPAYMENTS
AND DEFERRED COST |
|
19 |
65,509 |
50,604 |
|
|
| CURRENT
ASSETS |
|
| Stores,
spare parts and loose tools |
|
20 |
453,646 |
336,984 |
|
| Stock-in-trade |
|
21 |
904,951 |
740,193 |
|
| Short
Term Investments |
|
22 |
12,375 |
-- |
|
| Trade
debts |
|
23 |
562,955 |
248,788 |
|
| Advances,
deposits and prepayments |
|
24 |
430,747 |
270,476 |
|
| Other
receivables |
|
25 |
375,882 |
332,421 |
|
| Cash
and bank balances |
|
26 |
420,939 |
12,713 |
|
|
|
--------- |
--------- |
|
|
3,161,495 |
1,941,575 |
|
|
--------- |
--------- |
|
|
8,860,045 |
6,767,448 |
|
|
========= |
========= |
|
|
|
| Profit
and Loss Account |
|
| for
the year ended 30 September 1997 |
|
|
(Rupees in thousand) |
|
|
NOTE |
1997 |
1996 |
|
|
| SALES |
|
27 |
8,572,414 |
6,748,089 |
|
| COST
OF GOODS SOLD |
|
28 |
6,948,918 |
5,712,460 |
|
|
--------- |
--------- |
|
| GROSS
PROFIT |
|
1,623,496 |
1,035,629 |
|
|
| ADMINISTRATIVE,
SELLING AND GENERAL |
|
| EXPENSES |
|
29 |
478,682 |
361,359 |
|
|
--------- |
--------- |
|
| OPERATING
PROFIT |
|
1,144,814 |
674,270 |
|
| OTHER
INCOME |
|
30 |
59,037 |
49,279 |
|
|
--------- |
--------- |
|
|
1,203,851 |
723,549 |
|
| FINANCIAL
AND OTHER CHARGES |
|
31 |
804,156 |
570,012 |
|
| WORKERS'
PARTICIPATION FUND |
|
|
20,106 |
7,750 |
|
|
|
--------- |
--------- |
|
|
|
824,262 |
577,762 |
|
|
|
--------- |
--------- |
|
| PROFIT
BEFORE TAXATION |
|
|
379,589 |
145,787 |
|
| PROVISION
FOR TAXATION |
|
32 |
54,850 |
10,578 |
|
|
--------- |
--------- |
|
| PROFIT
AFTER TAXATION |
|
324,739 |
135,209 |
|
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
| BALANCE
AS AT 01 OCTOBER |
|
203 |
33,994 |
|
| TRANSFERRED
ON MERGER |
|
(24,104) |
- |
|
|
--------- |
--------- |
|
|
(23,901) |
33,994 |
|
|
--------- |
--------- |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
300,838 |
169,203 |
|
| APPROPRIATIONS |
|
| Proposed
Dividend |
|
167,017 |
-- |
|
| Transfer
to general reserve |
|
133,000 |
169,000 |
|
|
--------- |
--------- |
|
|
300,017 |
169,000 |
|
|
--------- |
--------- |
|
| UNAPPROPRIATED
PROFIT |
|
821 |
203 |
|
|
======== |
======== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| STATEMENT
OF SOURCES AND APPLICATION OF FUNDS |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER 1997 |
|
|
| CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
(Rupees in thousand) |
|
|
1997 |
1996 |
|
|
| Profit
before taxation |
|
379,589 |
145,787 |
|
| Adjustments
to reconcile profit to net cash provided |
|
| by
operating activities |
|
|
| Depreciation
and amortization |
|
401,989 |
281,593 |
|
| Gain
on disposal / adjustment |
|
| of
operating fixed assets |
|
(23,205) |
(10,178) |
|
| Provision
/ adjustment of Gratuity |
|
1,758 |
(284) |
|
| Operating
fixed assets |
|
| discarded
/ adjusted |
|
- |
3,618 |
|
| Amortization
of deferred cost |
|
10,353 |
5,082 |
|
| Profit
on sale of equity investments |
|
- |
(3,263) |
|
| Financial
charges |
|
794,597 |
569,900 |
|
|
--------- |
--------- |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| BEFORE
WORKING CAPITAL CHANGES |
|
1,565,081 |
992,255 |
|
| CASH
FLOWS FROM WORKING CAPITAL |
|
| CHANGES |
|
|
| (Increase)
/ decrease in current assets |
|
| Stores,
Spare parts and loose tools |
|
(33,680) |
15,830 |
|
| Stock-in-trade |
|
(61,321) |
173,241 |
|
| Trade
debts |
|
(157,642) |
(48,739) |
|
| Advances,
deposits and prepayments |
|
36,585 |
(24,571) |
|
| Other
receivables |
|
23,976 |
(38,167) |
|
| Increase
/ (decrease)in current |
|
| liabilities |
|
|
| Short
term finances |
|
371,073 |
(95,789) |
|
| Creditors,
accrued and other |
|
|
|
| liabilities |
|
(263,099) |
(131,414) |
|
| workers'
participation fund |
|
5,810 |
7,408 |
|
|
---------- |
---------- |
|
| NET
CASH FLOWS FROM WORKING CAPITAL |
|
| CHANGES |
|
(78,298) |
(142,201) |
|
|
|
---------- |
---------- |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
1,486,783 |
850,054 |
|
|
| Financial
charges paid |
|
(809,211) |
(574,997) |
|
| Taxes
paid |
|
(86,522) |
(65,294) |
|
| Gratuity
paid |
|
(1,651) |
(553) |
|
| NET
CASH FLOWS FROM OPERATING |
|
---------- |
---------- |
|
| ACTIVITIES |
|
589,399 |
209,210 |
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
| Long
term loans, deposits and |
|
| prepayments |
|
11,411 |
18,135 |
|
| Proceeds
from disposal of |
|
|
|
| operating
fixed assets |
|
219,549 |
80,625 |
|
| Proceeds
from sale of equity investments |
|
- |
3,263 |
|
| Investments
made |
|
(9,224) |
- |
|
| Fixed
capital expenditure |
|
(342,969) |
(92,106) |
|
| Leased
assets acquired |
|
(102,618) |
(56,872) |
|
|
--------- |
--------- |
|
| NET
CASH FLOWS FROM INVESTING |
|
| ACTIVITIES |
|
(223,851) |
(46,955) |
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
| Share
capital and reserves |
|
195,558 |
42,877 |
|
| Redemption
of redeemable capital |
|
(9,774) |
(12,265) |
|
| Custom
debentures issued |
|
- |
2,529 |
|
| Redemption
of custom debentures |
|
(5,195) |
(14,548) |
|
| Repayment
of Long term Loans |
|
(193,069) |
(139,527) |
|
| Liabilities
against leased assets |
|
- |
24,428 |
|
| Repayment
of liabilities against |
|
|
|
| leased
assets |
|
(85,417) |
(108,368) |
|
| Dividend
paid |
|
(21,354) |
(11) |
|
|
--------- |
--------- |
|
| NET
CASH FLOWS FROM FINANCING |
|
| ACTIVITIES |
|
(119,251) |
(204,885) |
|
|
--------- |
--------- |
|
| NET
INCREASE / (DECREASE) IN CASH |
|
| AND
CASH EQUIVALENT |
|
246,297 |
(42,630) |
|
|
| CASH
AND CASH EQUIVALENT AT THE |
|
| BEGINNING
OF THE YEAR |
|
12,713 |
55,343 |
|
| TRANSFERRED
ON MERGER |
|
161,929 |
- |
|
|
--------- |
--------- |
|
|
174,642 |
55,343 |
|
|
--------- |
--------- |
|
| CASH
AND CASH EQUIVALENT AT THE |
|
| END
OF THE YEAR |
|
420,939 |
12,713 |
|
|
========= |
=== |
