| Sapphire Textile Mills Limited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annual
Report 1997 |
|
|
|
| CONTENTS |
|
| Board of Directors |
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance Sheet |
|
| Profit
& Loss Account |
|
| Cash Flow Statement |
|
| Notes to the Accounts |
|
| Pattern of Shareholding |
|
| Company's
Subsidiary Accounts |
|
|
|
|
|
| BOARD
OF DIRECTORS |
|
|
| Chief
Executive |
|
| MOHAMMAD
ABDULLAH |
|
|
| Directors |
|
|
| SHAHID
ABDULLAH |
|
| NADEEM
ABDULLAH |
|
| AMER
ABDULLAH |
|
| MOHAMMAD
YAMIN |
|
| MOHAMMAD
YOUNUS |
|
| SARDAR
ALAM |
|
|
| Secretary |
|
|
| SHAUKAT
MAHMUD |
|
|
|
| Auditors |
|
|
| HAMEED
CHAUDHRI & CO. |
|
| CHARTERED
ACCOUNTANTS |
|
|
|
| Management |
|
| M.
YOUSUF ADIL & CO. |
|
|
| Consultants |
|
| CHARTERED
ACCOUNTANTS |
|
|
| Tax
Consultants |
|
| MUSHTAQ
& COMPANY |
|
| CHARTERED
ACCOUNTANTS |
|
|
|
| Bankers |
|
|
| HABIB
BANK LTD. |
|
| BANK
OF AMERICA |
|
| CITI
BANK N.A. |
|
|
| Registered
Office |
|
| 149-COTTON
EXCHANGE BUILDING, |
|
| I.I.
CHUNDRIGAR ROAD, KARACHI. |
|
|
| Mills |
|
|
| S.I.T.E.
KOTRI |
|
| S.I.T.E.
NOORIABAD |
|
| CHUNIAN,
DISTT. KASUR |
|
| FEROZE
WATWAN |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 29th Annual General Meeting of Sapphire Textile
Mills Limited will |
|
| be
held on Tuesday the 31st day of March, 1998 at 0g:00 P.M. at Registered
Office of the Company |
|
| 149,
Cotton Exchange Building, I.I. Chundrigar Road, Karachi to transact the
following business: |
|
|
| 1.
To confirm the minutes of 28th Annual General Meeting. |
|
|
| 2.
To receive, consider and adopt the report of the Directors and Auditors and
audited accounts |
|
| of
the Company for the year ended 30th September, 1997. |
|
|
| 3.
To approve cash dividend @ 15% as recommended by the Board of Directors. |
|
|
| 4.
To appoint auditors for the year ended 30th September, 1998 and to fix their
remuneration. |
|
|
| 5.
To transact any other business with the permission of the Chair. |
|
|
| Notes: |
|
|
| 1.
A member entitled to attend and vote at this meeting may appoint another
member as his/her |
|
| proxy
to attend and vote on his/her behalf. Proxies in order to be valid must be
deposited at |
|
| the
Registered Office of the Company not less than 48 hours before the time of
the meeting. |
|
|
| 2.
The share transfer Books of the Company shall remain closed from 27th March,
1998 to 04th |
|
| April,
1998 (both days inclusive). |
|
|
| 3.
Shareholders are requested to notify the company of any change in their
addresses. |
|
|
| DIRECTORS
REPORT TO THE SHAREHOLDERS |
|
|
| The
Directors have pleasure in presenting their report to the members with
audited accounts of the |
|
| company
for the year ended September 30, 1997. |
|
|
| By
the Grace of God the operations of the Company have resulted in a pretax
profit of Rs. 101,959,468 |
|
| after
meeting all operational, administrative, financial and other expenses.
Provision for Income |
|
| Tax
amounting to Rs. 26,762,541 has been made for the year. The company is liable
to pay Tax |
|
| 80(D)
as per judgment of Supreme Court of Pakistan. As such provision has been made
in the accounts |
|
| for
Rs. 19,794,837, for the year 1991-92 to 1993-94. The Board of Directors
unanimously recommended |
|
| the
following appropriations: |
|
|
| Net
Profit |
|
Rs. 55,402,090 |
|
| Unappropriated
profit brought forward |
|
Rs. 156,617,609 |
|
| Available
Surplus |
|
Rs. 212,019,699 |
|
|
|
|
| Appropriations: |
|
| Proposed
Dividend@ 15% (Rs. 1.50 per share) |
|
Rs. 11,157,300 |
|
|
|
|
| Unappropriated
profit carried forward |
|
Rs. 200,862,399 |
|
|
| EXPORTS |
|
| By
the Grace of God our exports during the year 1996-97 were Rs. 2,446,314,990
as compared to |
|
| Rs.
2,129,882,264 during the preceding year. The exports have increased by about
15% over last |
|
| year. |
|
|
| DIVIDEND |
|
| Your
Directors feel pleasure to recommend a cash dividend @ Rs. 1.50 per share
(15%) for the year |
|
| ended
September 30, 1997. |
|
|
| FUTURE
OUTLOOK |
|
| Yarn
in the international as well as local market is not doing well, due to Far
East economic crisis. |
|
|
| Further
due to untimely and excessive rains in the cotton growing areas during the
current year the |
|
| quality
of raw cotton has deteriorated, which would generally effect the yield and
quality. However, |
|
| the
management is making all possible efforts to get maximum production through
balancing and |
|
| modernisation
of the machinery, marketing efforts, effective cost controls, to achieve good
financial |
|
| results
for the coming year. |
|
|
| AUDITORS |
|
| You
are requested to appoint auditors for the year 1997-98 and fix their
remuneration. The present |
|
| auditors
M/s. Hameed Chaudhri & Company Chartered Accountants, retire and offer
themselves for' |
|
| re-appointment. |
|
|
| STAFF
AND WORKERS |
|
| Relations
continued to be good between management and staff and labour. On behalf of
the Board, |
|
| I
would like to thank workers and staff at all levels for the hard work put in
by them in enabling the |
|
| company
to operate efficiently and profitably and hope their efforts will continue
during the coming |
|
| years. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of SAPPHIRE TEXTILE MILLS LIMITED as
at 30 |
|
| September,
1997 and the related profit and loss account and 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. Without qualifying our opinion |
|
| we
report that direct expenses incurred on sales have been reclassified as
explained |
|
| in
Note 2.12. |
|
|
|
| (ii)
the expenditure incurred during the year was for the purpose of Company's |
|
| business;
and |
|
|
| (iii)
the business conducted, investments made and 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 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 30 September, 1997 and of the profit and
cash |
|
| flows
for the year then ended; and |
|
|
| (d)
in our opinion, zakat deductible at source under Zakat and Ushr Ordinance
1980 was |
|
| deducted
by the company and deposited in the Central Zakat Fund established under |
|
| section
7 of that Ordinance. |
|
|
|
|
|
| Karachi: |
|
|
HAMEED CHAUDHRI & CO. |
|
|
| Dated:
7th March, 1998. |
|
Chartered Accountants |
|
|
|
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER, 1997 |
|
|
|
|
|
1997 |
1996 |
|
|
|
|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL |
|
| Authorised |
|
| 10,000,000
Ordinary Shares of Rs. 10/- each |
|
100,000,000 |
100,000,000 |
|
|
========== |
========== |
|
| Issued, subscribed paid up |
|
3 |
74,382,000 |
74,382,000 |
|
| RESERVES |
|
| Capital
Reserve |
|
| Fixed
assets replacement reserve |
|
65,000,000 |
65,000,000 |
|
| General
reserve |
|
|
330,000,000 |
330,000,000 |
|
| Unappropriated
profit |
|
200,862,399 |
156,617,609 |
|
|
|
|
---------- |
---------- |
|
|
|
|
595,862,399 |
551,617,609 |
|
|
---------- |
---------- |
|
|
|
670,244,399 |
625,999,609 |
|
|
|
|
|
| REDEEMABLE
CAPITALS |
|
4 |
25,208,059 |
31,084,000 |
|
| LONG TERM LOANS |
|
5 |
119,124,005 |
158,027,984 |
|
| OBLIGATION
UNDER FINANCE LEASE |
|
6 |
68,775,878 |
83,700,878 |
|
| DEFEND
LIABILITIES |
|
| Provision for gratuity |
|
7 |
30,462,075 |
29,541,154 |
|
| CUSTOMS DUTY PAYABLE |
|
2,356,573 |
2,356,573 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
| Short term finances |
|
8 |
639,434,391 |
499,819,790 |
|
| Current maturity of long
term liabilities |
|
9 |
57,831,510 |
75,860,929 |
|
| Creditors, accruals
& other liabilities |
|
10 |
154,558,954 |
245,100,531 |
|
| Workers profit participation
fund |
|
11 |
5,366,288 |
7,026,995 |
|
| Provision for taxation |
|
26,762,541 |
22,038,761 |
|
| Dividend |
|
12 |
11,241,449 |
11,217,739 |
|
|
|
--------- |
--------- |
|
|
|
895,195,133 |
861,064,745 |
|
|
|
--------- |
--------- |
|
|
|
1,811,366,122 |
1,791,774,943 |
|
|
========== |
========== |
|
| The
annexed notes from an integral part of these accounts. |
|
|
|
|
1997 |
1996 |
|
|
|
|
Note |
Rupees |
Rupees |
|
|
|
| FIXED
ASSETS |
|
| At
cost less depreciation |
|
|
13 |
798,131,427 |
831,896,003 |
|
|
|
|
|
|
| CAPITAL
WORK IN PROGRESS |
|
|
14 |
47,951,337 |
14,249,255 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
846,082,764 |
846,145,258 |
|
| INVESTMENTS
AT COST |
|
|
15 |
93,798,430 |
96,050,430 |
|
| LONG
TERM LOAN & DEPOSIT |
|
|
16 |
11,001,477 |
14,500,000 |
|
| CURRENT
ASSETS |
|
|
|
|
|
|
|
|
|
| Stores,
spares & loose tools |
|
|
17 |
57,800,757 |
48,391,915 |
|
| Stocks |
|
|
18 |
213,207,766 |
187,234,404 |
|
| Debtors-considered
good |
|
|
19 |
302,019,086 |
290,327,248 |
|
| Loans,
advances, deposits & prepayments |
|
20 |
70,766,650 |
90,109,872 |
|
| Deposits |
|
|
|
14,365,270 |
24,524,384 |
|
| Short
term investments |
|
|
21 |
104,607,832 |
99,308,202 |
|
| Other
receivables |
|
|
22 |
10,520,434 |
12,510,760 |
|
| Cash
& bank balances |
|
|
23 |
87,195,656 |
82,672,470 |
|
|
|
|
---------- |
---------- |
|
|
|
|
860,483,451 |
835,079,255 |
|
|
---------- |
---------- |
|
|
|
1,811,366,122 |
1,791,774,943 |
|
|
========== |
========== |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER, 1997 |
|
|
|
|
|
1997 |
1996 |
|
|
|
|
|
Note |
Rupees |
Rupees |
|
|
| SALES
(NET) |
|
|
24 |
3,421,331,586 |
3,996,369,474 |
|
| COST
OF SALES |
|
|
25 |
3,035,296,496 |
2,848,622,052 |
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT |
|
|
|
386,035,090 |
447,747,422 |
|
| OPERATING
EXPENSES |
|
| ADMINISTRATIVE
& GENERAL |
|
26 |
29,031,825 |
21,805,787 |
|
| SELLING |
|
|
27 |
8,258,659 |
6,666,575 |
|
|
---------- |
---------- |
|
|
|
|
37,290,484 |
28,472,369 |
|
| OPERATING
PROFIT |
|
|
|
348,744,606 |
419,275,060 |
|
| MISCELLANEOUS
REVENUE |
|
|
28 |
13,558,898 |
5,361,030 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
362,303,504 |
424,636,090 |
|
| FINANCIAL
& OTHER CHARGES |
|
|
|
| FINANCIAL |
|
|
|
29 |
259,447,619 |
254,985,705 |
|
| OTHER
CHARGES |
|
|
30 |
896,417 |
11,800,416 |
|
|
|
|
---------- |
---------- |
|
|
|
|
260,344,036 |
266,786,121 |
|
|
---------- |
---------- |
|
|
|
|
101,959,468 |
157,849,969 |
|
| UNUSUAL
AND PRIOR PERIOD ITEM |
|
|
|
0 |
(24,337,075) |
|
| NET
PROFIT FOR THE YEAR BEFORE TAXATION |
|
|
101,959,468 |
133,512,894 |
|
| PROVISION
FOR TAXATION |
|
|
31 |
|
|
|
Current year |
|
|
|
26,762,541 |
22,038,761 |
|
|
Prior year |
|
|
|
0 |
135,714 |
|
|
|
|
---------- |
---------- |
|
|
|
|
26,762,541 |
22,174,475 |
|
|
|
|
---------- |
---------- |
|
| NET
PROFIT AFTER TAXATION |
|
|
75,196,927 |
111,338,419 |
|
|
| PRIOR
YEARS' TAXATION |
|
32 |
|
| UNDER
SECTION 80 (D) |
|
|
19,794,837 |
0 |
|
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
|
156,617,609 |
56,436,490 |
|
|
|
|
|
|
---------- |
---------- |
|
| AVAILABLE
SURPLUS |
|
|
|
212,019,699 |
167,774,909 |
|
| APPROPRIATIONS |
|
|
|
|
|
|
| Proposed
dividend: |
|
|
|
| Cash
dividend'-- 15% (1996: 15%) |
|
|
11,157,300 |
11,157,300 |
|
|
---------- |
---------- |
|
| UNAPPROPRIATED
PROFIT RETAINED |
|
200,862,399 |
156,617,609 |
|
|
|
|
========== |
========== |
|
| The
annexed notes from an integral part of these accounts. |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER, 1997 |
|
|
|
|
|
1997 |
1996 |
|
|
|
Note |
Rupees |
Rupees |
|
|
| Net
cash inflow from operating activities |
|
A |
302,698,407 |
608,563,791 |
|
| Returns
on investments and servicing of finance |
|
| Mark
up/interest paid |
|
|
(235,485,476) |
(220,160,498) |
|
| Finance
charges on leased assets |
|
(17,805,605) |
(20,744,686) |
|
| Zakat
paid |
|
|
(177,687) |
(59,000) |
|
| Dividend
paid |
|
|
(11,133,590) |
(13,120) |
|
| Interest received on
advances to associated |
|
|
|
| undertakings |
|
|
71,557 |
81,156 |
|
| Dividend
received |
|
|
5,633,817 |
0 |
|
| Profit/return
on deposits & investments |
|
4,567,709 |
4,072,593 |
|
|
---------- |
---------- |
|
| Net
cash out flow from investments and |
|
|
|
| servicing
of finance |
|
|
(254,329,275) |
(236,823,555) |
|
|
|
|
| Taxation |
|
| Taxes
paid (including deducted at source) |
|
|
(29,818,991) |
(17,806,483) |
|
| Investing
activities |
|
| Fixed
capital expenditure |
|
|
(72,613,374) |
(44,207,936) |
|
| Sale
proceeds of fixed assets |
|
|
5,278,847 |
3,214,774 |
|
| Investments |
|
|
1,422,240 |
(19,281,525) |
|
| Sale
proceeds of investments |
|
|
0 |
512,678 |
|
| Loan
to subsidiary |
|
|
3,500,000 |
(18,000,000) |
|
| Term
deposit |
|
|
(2,501,477) |
0 |
|
|
----------- |
----------- |
|
| Net
cash out flow from investing activities |
|
(64,913,764) |
(77,762,009) |
|
|
|
|
|
|
----------- |
----------- |
|
| Not
cash (outflow)/inflow before financing activities |
|
(46,363,623) |
276,171,744 |
|
| Financing
activities |
|
| Increase/
(decrease) in short term finances |
|
161,071,001 |
(150,431,562) |
|
| Redeemable
capital & loans received |
|
0 |
20,225,000 |
|
| Repayment
of redeemable capital & loans |
|
(46,084,307) |
(77,923,811) |
|
| Repayment
of obligation under finance leases |
|
(46,432,489) |
(49,531,689) |
|
|
|
|
----------- |
----------- |
|
| Net
cash inflow/(outflow) from financing activities |
|
68,554,205 |
(257,662,062) |
|
|
|
|
----------- |
----------- |
|
| Increase
in cash & cash equivalents |
|
B |
22,190,582 |
18,509,682 |
|
|
========== |
========== |
|
|
|
|
|
1997 |
1996 |
|
|
|
|
Rupees |
Rupees |
|
| A.
Net cash inflow from operating activities |
|
|
| Operating
profit before taxation, unusual and |
|
| prior
period item |
|
|
101,959,468 |
157,849,969 |
|
| Depreciation |
|
|
83,987,731 |
87,140,829 |
|
| Profit
on sale of investments |
|
|
0 |
(87,721) |
|
| Dividend
income |
|
|
(5,633,817) |
0 |
|
| Interest
on advances to associated undertakings |
|
(71,557) |
(81,156) |
|
| Profit/interest
on deposits and investments |
|
(4,466,249) |
(3,175,404) |
|
| Profit
on sale of fixed assets |
|
|
(2,530,710) |
(694,585) |
|
| Exchange
gain |
|
|
(3,789,004) |
(1,394,419) |
|
| Provision
for gratuity (net) |
|
|
920,921 |
4,363,483 |
|
| Provision
for diminution in value |
|
|
|
| of
investments written back |
|
|
(4,469,871) |
4,469,871 |
|
| Financial
expenses |
|
|
245,279,676 |
234,962,358 |
|
| Finance
charges on leased assets |
|
18,528,062 |
23,220,907 |
|
| Zakat |
|
|
177,687 |
59,000 |
|
|
---------- |
---------- |
|
| Profit
before working capital changes |
|
429,892,337 |
506,633,132 |
|
| (Increase)/decrease
in current assets |
|
| Stores,
spares & loose tools |
|
|
(9,408,842) |
6,307,573 |
|
| Stocks |
|
|
(25,973,362) |
128,963,691 |
|
| Debtors |
|
|
(11,691,838) |
(106,874,309) |
|
| Loans,
advances, deposit & prepayment |
|
9,828,615 |
9,517,186 |
|
| Deposits |
|
|
10,159,114 |
1,475,440 |
|
| Other
receivables |
|
|
1,888,866 |
5,563,531 |
|
|
| Increase/(decrease)
in current liabilities |
|
|
| Creditors,
accruals & other liabilities |
|
(100,335,776) |
50,956,359 |
|
| Workers'
profit participation fund |
|
(1,660,707) |
6,021,188 |
|
|
|
|
---------- |
---------- |
|
|
|
|
(127,193,930) |
101,930,659 |
|
|
|
|
---------- |
---------- |
|
| Net
Cash inflow froth operating activities |
|
302,698,407 |
608,563,791 |
|
|
========== |
========== |
|
| B.
Changes in cash & cash equivalents |
|
|
| Balance
as at 30 September, 1996 |
|
53,683,532 |
33,779,431 |
|
| Exchange
gain |
|
|
3,789,004 |
1,394,419 |
|
| Increase
in cash & cash equivalents |
|
22,190,582 |
18,509,682 |
|
|
|
|
---------- |
---------- |
|
| Balance
as at 30 September, 1997 |
|
79,663,118 |
53,683,532 |
|
|
========== |
========== |
|
|
| C.
Analysis of cash & cash equivalents |
|
|
| Cash
& Bank balances |
|
|
87,195,656 |
82,672,470 |
|
| Short
term investments |
|
|
690,000 |
690,000 |
|
|
|
|
---------- |
---------- |
|
|
|
|
87,885,656 |
83,362,470 |
|
| Less:
Short term finances (unsecured) |
|
