| Elite Textile Mills Limited |
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| Annual
Report 1998 |
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|
IN THE NAME OF ALLAH, THE BENEFICENT, THE MERCIFUL |
|
|
| CONTENTS |
|
|
| Board
of Directors |
|
| Notice
of Meeting |
|
| Directors'
Report to the Shareholders |
|
| Auditors'
Report to the Members |
|
| Balance
Sheet |
|
| Profit
and Loss Accounts |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
| Shareholding
Statistics |
|
|
|
| BOARD
OF DIRECTORS |
|
|
| Ahsan
M. Saleem |
|
| Amjad
Mahmood |
|
| Khalid
Bashir |
|
| Shams Rafi |
|
| Shaukat
Shafi |
|
| Tariq
Shafi (Chief Executive) |
|
| Zahid
Bashir |
|
|
| Auditors |
|
| M.
Yousuf Adil & Co., |
|
| Chartered
Accountants |
|
|
| Bankers |
|
| Citibank
N. A. |
|
| Muslim
Commercial Bank Ltd. |
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| National
Bank of Pakistan |
|
|
| Legal
Advisers |
|
| A.
K. Brohi & Co. |
|
| Ghani
Law Associates |
|
|
| Registered
Office |
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| A-40,
S.I.T.E., Manghopir Road, Karachi. |
|
|
| Mills |
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| A-40,
S.I.T.E., Manghopir Road, Karachi. |
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|
| Head
Office |
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| 3rd
Floor, Finlay House, |
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| I.I.
Chundrigar Road, Karachi. |
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|
|
| NOTICE
OF MEETING |
|
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| Notice
is hereby given that the 47th Annual General Meeting of "ELITE TEXTILE
MILLS LTD." will be |
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| held
on Wednesday the March 31, 1999, at 5.00 p.m. at the Registered Office A/40,
S.I.T.E., Karachi, |
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| to
transact the following Ordinary Business. |
|
|
| Agenda: |
|
|
| Ordinary
Business: |
|
|
| 1.
To confirm the Minutes of the 46th Annual General Meeting held on March 31,
1998. |
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|
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| 2.
To receive and adopt the Directors' and Auditors' Reports & Accounts for
the year ended September |
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| 30, 1998. |
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|
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| 3.
To appoint Auditors for the year 1998-99 and fix their remuneration. |
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| The
present Auditors M/s. M. Yousuf Adil Saleem & Co., Chartered Accountants,
being eligible, |
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| offer
themselves for re-appointment. |
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|
|
|
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| 4.
To consider any other business which may be placed before the Meeting with
the permission of the |
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| Chair. |
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| Book
Closure |
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| The
Share Transfer Books of the Company will remain closed from March 29, 1999 to
April 04, |
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| 1999
(both days inclusive) |
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|
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|
On behalf of the Board |
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|
|
|
|
|
|
Shaukat Shafi |
|
|
|
Director |
|
|
| A/40,
S.I.T.E., Manghopir Road, Karachi. |
|
| March
09, 1999 |
|
|
| Note:
Participation in the Annual General Meeting: |
|
|
| 1.
A member eligible to attend and vote at this Meeting may appoint another as
his/her proxy to attend |
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| and
vote instead of him/her. Proxies in order to be effective must be received by
the Company at |
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| the
Registered Office not later than 48 hours before the time for holding the
Meeting. |
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|
|
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| 2.
Share holders are requested to immediately notify the change in address if
any. |
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|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
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| The
Directors of your Company are pleased to present the 47th Annual Report and
audited financial statement |
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| of
the Company for the year ended September 30, 1998. |
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|
| Your
Company's trading for the year resulted in a pre-tax profit of Rs. 41.98
million after meeting all |
|
| operational,
administrative, depreciation and other expenses. |
|
|
| Break
up of it can be read under profit & loss account 1998. |
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|
1998 |
|
|
|
|
Rupees |
|
|
|
| Profit
before taxation |
|
41,985,241 |
|
| Less:
Provision for taxation |
|
154,824 |
|
|
|
|
---------- |
|
| Profit
after taxation |
|
41,830,417 |
|
| Accumulated
(loss) brought forward |
|
(171,562,044) |
|
|
|
|
---------- |
|
| Accumulated
(loss) carried forward |
|
(129,731,627) |
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|
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|
========== |
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| The
Company has ceased all its production activities from September 01, 1997 and
has disposed of all |
|
| plant
& machinery, portion of the land has also been sold. Considering the
above fact the Auditors observe |
|
| that
the Company is no more a going concern and the same they mentioned in their
report. |
|
|
| During
the year under review plant and machinery and some portion of land &
building were sold resulting |
|
| in
net gain of Rs. 69.72 million. Continuing efforts are being made for the sale
of remaining assets. |
|
|
| The
earning per share is Rs. 21.65. |
|
|
| The
pattern of shareholding is provided on page 24 |
|
|
| The
present auditors M. Yousuf Adil Saleem & Co. retire and being eligible
offer themselves for reappointment. |
|
|
| for
and on behalf of the |
|
| Board
of Directors. |
|
|
|
|
SHAUKAT SHAFI |
|
|
|
Director |
|
|
| Date:
March 06, 1999 |
|
| Karachi |
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|
| AUDITORS'
REPORT TO THE MEMBERS |
|
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| We
have audited the annexed balance sheet of Elite Textile Mills Limited as at
September 30, 1998 and |
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| 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 ended on that date 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 ceased all production activities from September 01, 1997 and
has disposed |
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| of
major portion of plant and machinery and negotiating for sale of leasehold
land with buildings |
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| thereon.
Therefore, the company is no more a going concern. Consequently adjustment
required |
|
| to
record assets at realizable value and classification of liabilities has not
been made. |
|
|
|
|
| (b)
in our opinion, proper books of account have been kept by the Company as
required by the |
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| Companies
Ordinance, 1984; |
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|
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| (c)
in our opinion: |
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|
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| (i)
the balance sheet and profit and loss account together with the notes thereon
have been |
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| drawn
up in conformity with the Companies Ordinance, 1984, and are in agreement |
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| with
the books of account and are further in accordance with accounting policies |
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| consistently
applied; |
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|
|
|
| (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 |
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| were
in accordance with the objects of the Company; |
|
|
|
| (d)
in our opinion and to the best of our information and according to the
explanations given |
|
| to
us, except for the effect of any adjustment had the assets been taken at
realizable value |
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| and
classification of liabilities in view of the matter referred to in para (a)
above, the balance |
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| sheet
and profit and loss account and the 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 |
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| and
fair view of the state of the Company's affairs as at September 30, 1998 and
of the loss |
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| 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. |
|
|
| Date:
March 06-1999 |
|
M. Yousuf Adil Saleem & Co., |
|
| Karachi |
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|
Chartered Accountants |
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|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 1998 |
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|
|
1998 |
1997 |
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|
Note |
Rupees |
Rupees |
|
|
|
|
| SHARE
CAPITAL |
|
|
|
|
|
|
| Authorised |
|
|
|
| 2,000,000
Ordinary shares |
|
|
| of
Rs. 10/- each |
|
|
20,000,000 |
20,000,000 |
|
|
|
|
========= |
========= |
|
| Issued,
subscribed and paid up |
|
3 |
119,320,000 |
19,320,000 |
|
| Accumulated
loss |
|
|
(129,731,627) |
(171,562,044) |
|
|
|
|
---------- |
---------- |
|
|
|
|
(110,411,627) |
(152,242,044) |
|
| SURPLUS
ON REVALUATION OF |
|
|
|
| FIXED
ASSETS |
|
4 |
49,800,000 |
138,500,000 |
|
|
|
|
|
| LONG
TERM LOAN |
|
5 |
- |
- |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
|
| Staff
gratuity |
|
|
- |
777,737 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Short
term bank borrowings |
|
6 |
42,539,380 |
57,942,159 |
|
| Short
term loans |
|
7 |
92,093,745 |
80,417,368 |
|
| Current
portion of long term loan |
|
|
- |
1,796,894 |
|
| Creditors,
accrued and other |
|
|
|
| liabilities |
|
8 |
41,319,493 |
92,792,776 |
|
| Taxation |
|
|
813,232 |
4,342,070 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
176,765,850 |
237,291,267 |
|
| CONTINGENCIES |
|
|
9 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
116,154,223 |
224,326,960 |
|
|
|
|
|
========= |
========= |
|
|
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
|
|
|
|
| Operating
Assets |
|
10 |
511,295 |
160,435,233 |
|
| Non
Operating Assets |
|
11 |
57,693,101 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
58,204,396 |
160,435,233 |
|
|
|
|
|
|
| LONG
TERM INVESTMENTS |
|
|
6,200,000 |
6,200,000 |
|
|
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
968,900 |
968,900 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores,
spares and loose tools |
|
13 |
- |
6,949,714 |
|
| Stock
in trade - finished goods |
|
|
- |
985,800 |
|
| Trade
debts |
|
14 |
6,768,672 |
7,110,236 |
|
| Loans
and advances |
|
15 |
1,930,999 |
4,931,827 |
|
| Deposits
and prepayments |
|
16 |
11,630,625 |
11,459,913 |
|
| Other
receivables |
|
17 |
29,306,242 |
24,025,996 |
|
| Cash
and bank balances |
|
18 |
1,144,389 |
1,259,341 |
|
|
|
|
---------- |
---------- |
|
|
|
|
50,780,927 |
56,722,827 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
116,154,223 |
224,326,960 |
|
|
|
|
========= |
========= |
|
| The
annexed notes from 1 to 30 form an integral part of these accounts. |
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1998 |
|
|
|
|
|
|
1998 |
1997 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Sales |
|
|
|
19 |
19,521,649 |
382,328,443 |
|
| Cost
of goods sold |
|
|
20 |
18,009,991 |
381,378,496 |
|
|
|
|
---------- |
---------- |
|
| Gross
profit |
|
|
1,511,658 |
949,947 |
|
| Trading
profit |
|
21 |
- |
129,706 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,511,658 |
1,079,653 |
|
| Operating
expenses |
|
|
|
| Administration
expenses and fixed overheads |
22 |
2,403,089 |
3,352,067 |
|
| Selling |
|
23 |
1,197,810 |
11,507,535 |
|
|
|
|
---------- |
---------- |
|
|
|
|
(3,600,899) |
(14,859,602) |
|
|
|
|
---------- |
---------- |
|
| Operating
loss |
|
|
(2,089,241) |
(13,779,949) |
|
| Extra
ordinary item |
|
24 |
69,716,460 |
9,082,901 |
|
|
|
|
---------- |
---------- |
|
|
|
|
67,627,219 |
(4,697,048) |
|
| Other
income storage, handling and other |
|
29,356 |
1,598,994 |
|
|
|
|
---------- |
---------- |
|
|
|
|
67,656,575 |
(3,098,054) |
|
|
|
|
| Financial
charges |
|
|
25 |
(25,671,334) |
(44,464,372) |
|
|
|
|
---------- |
---------- |
|
| Profit/(Loss)
before taxation |
|
|
41,985,241 |
(47,562,426) |
|
|
|
|
|
|
|
| Provision
for taxation |
|
|
|
| Minimum
tax/presumptive tax |
|
|
| Current |
|
|
|
187,443 |
2,125,000 |
|
| Prior
year's |
|
|
(32,619) |
1,153,270 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
(154,824) |
(3,278,270) |
|
|
|
|
|
|
---------- |
---------- |
|
| Profit/(Loss)
after taxation |
|
|
41,830,417 |
(50,840,696) |
|
| Accumulated
Loss brought forward |
|
|
(171,562,044) |
(120,721,348) |
|
|
|
|
|
|
---------- |
---------- |
|
| Accumulated
loss carried forward |
|
|
(129,731,627) |
(171,562,044) |
|
|
|
|
|
|
========= |
========= |
|
|
|
|
|
|
|
| The
annexed notes from 1 to 30 form |
|
| an
integral part of these accounts. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1998 |
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| A.
CASH FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
| Profit/(Loss)
before taxation |
|
41,985,241 |
(47,562,426) |
|
| Adjustment
for |
|
|
|
| Depreciation |
|
127,824 |
2,549,008 |
|
| Gain
on disposal of fixed assets |
|
(70,443,238) |
(9,082,901) |
|
| Provision
for gratuity |
|
82,376 |
2,007,082 |
|
| Payment
of gratuity |
|
(860,113) |
(5,674,090) |
|
| Financial
charges |
|
25,671,334 |
44,464,372 |
|
|
|
---------- |
---------- |
|
| Operating
loss before working capital changes |
|
{3,436,576) |
{13,298,955) |
|
|
|
---------- |
---------- |
|
|
|
|
|
| Changes
in working capital |
|
|
|
| (Increase)/decrease
in current assets |
|
|
| Stores,
spares and loose tools |
|
6,949,714 |
711,962 |
|
| Stock
in trade |
|
985,800 |
16,776,466 |
|
| Trade
debts |
|
341,564 |
3,716,752 |
|
| Loans
and advances |
|
240,184 |
1,176,521 |
|
| Deposits
and prepayments |
|
(170,712) |
1,403,089 |
|
| Other
receivables |
|
(5,280,246) |
(20,097,145) |
|
| Increase/(decrease)
in current liabilities |
|
|
|
| Creditors,
accrued and other liabilities |
|
(54,218,753) |
63,967,510 |
|
|
|
---------- |
---------- |
|
|
|
|
|
(51,152,449) |
67,655,155 |
|
|
|
|
|
---------- |
---------- |
|
| Cash
(used in)/generated from operations |
|
(54,589,025) |
54,356,200 |
|
|
|
|
|
|
|
|
| Financial
charges paid |
|
|
(22,925,863) |
(52,339,950) |
|
| Tax paid |
|
|
(923,018) |
(3,290,923) |
|
|
|
---------- |
---------- |
|
| NET
CASH (USED IN) OPERATING ACTIVITIES |
|
(78,437,906) |
(1,274,673) |
|
|
|
========= |
========= |
|
|
|
|
| B.
CASH FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
| Proceeds
from disposal of fixed assets |
|
83,846,250 |
96,790,000 |
|
| Fixed
capital expenditures |
|
|
- |
(2,804,280) |
|
| Long
term investments |
|
|
|
- |
7,000,000 |
|
| Long
term deposits |
|
|
|
- |
10,000 |
|
|
|
|
|
---------- |
---------- |
|
| NET
CASH FROM INVESTING ACTIVITIES |
|
|
83,846,250 |
100,995,720 |
|
|
|
|
|
========= |
========= |
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
| C.
CASH FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
| Repayment
of long term loans |
|
|
(1,796,894) |
(3,249,000) |
|
| Decrease
in short term borrowings |
|
|
(15,402,779) |
(17,500,731) |
|
| Increase/(Decrease)
in short term loans |
|
11,676,377 |
(78,350,399) |
|
|
|
|
|
---------- |
---------- |
|
| NET
CASH (USED IN) FINANCING ACTIVITIES |
|
(5,523,296) |
(99,100,130) |
|
|
|
---------- |
---------- |
|
|
|
|
|
| Net
(Decrease)/Increase in cash and bank balances (A+B+C) |
(114,952) |
620,917 |
|
|
|
|
| Cash
and bank balances at the |
|
|
|
| beginning
of the year |
|
|
|
1,259,341 |
638,424 |
|
|
|
|
|
|
| Cash
and bank balances |
|
|
|
---------- |
---------- |
|
| at
end of the year |
|
|
|
1,144,389 |
1,259,341 |
|
|
|
|
|
========= |
========= |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1998 |
|
|
| 1.
STATUS AND ACTIVITIES |
|
|
| 1.1
The company is limited by shares incorporated in Pakistan on August 21, 1951
and quoted |
|
| on
the Karachi and Islamabad stock exchanges. The principal business of the
Company was |
|
| manufacture
and sale of yarn. The Mills is located at Sindh Industrial Trading Estate,
Karachi. |
|
|
| 1.2
A special resolution has been passed in the general meeting of members on
July 10, 1997 |
|
| authorizing
the Board of Directors to dispose off the whole of the undertaking comprising
of |
|
| land,
building, plant & machinery and other fixed and current assets of the
Company. |
|
|
| The
Company has ceased all production activities from September 01, 1997 and has |
|
| disposed
off major portion of plant & machinery and relieved the workers of the
Company. |
|
| The
Company is negotiating for sale of land with buildings thereon and other
remaining |
|
| assets. |
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
|
|
| These
accounts have been prepared under 'historical cost convention' except lease
hold land |
|
| that
has been included at revaluation. |
|
|
|
|
| 2.2
Taxation |
|
|
|
| Provision
for taxation is based on taxable income at current tax rates after taking
into account |
|
| tax
rebates and tax credits available, if any. |
|
|
|
| 2.3
Operating fixed assets |
|
|
|
| Operating
assets except leasehold land are stated at cost less accumulated
depreciation. |
|
| Depreciation
is charged to income applying the reducing balance method at the rates
specified |
|
| in
fixed assets note. |
|
|
|
|
|
|
| Depreciation
on additions for the year is charged on the basis of whole year while no
depreciation |
|
| is
charged on deletion during the year. |
|
|
|
|
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. Major renewals |
|
| and
improvements are capitalised. |
|
|
|
|
| Gains
and losses on disposal of fixed assets are included in current income. |
|
|
| 2.4
Non operating assets |
|
|
|
| These
are stated at lower of book value and net realizable value. |
|
|
| 2.5
Investments |
|
| Long
term investment in shares of joint stock companies are stated at cost.
Permanent diminution |
|
| in
value is charged to current income. |
|
|
|
| 2.6
Trade debtors |
|
|
|
| Known
bad debts are written off and provision is made for debts considered
doubtful. |
|
|
| 2.7
Rates of exchange |
|
| Assets
and liabilities in foreign currencies are converted into Rupees at the rates
of exchange ruling |
|
| on
the balance sheet date. Exchange differences are included in current income. |
|
|
| 2.8
Revenue recognition |
|
|
| Sales
are recorded on despatch of goods. |
|
|
| 3.
ISSUED, SUBSCRIBED |
|
| AND
PAID UP CAPITAL |
|
|
| 1998 |
1997 |
|
1998 |
1997 |
|
| No. of Shares |
|
Rupees |
Rupees |
|
|
|
|
|
Ordinary shares of
Rs.10/= |
|
| 920,000 |
920,000 |
each fully paid in cash |
|
9,200,000 |
9,200,000 |
|
|
|
|
|
Ordinary shares of
Rs.10/= |
|
|
each issued as fully paid |
|
| 1,012,000 |
1,012,000 |
bonus shares |
|
10,120,000 |
10,120,000 |
|
| ---------- |
---------- |
|
|
---------- |
---------- |
|
| 1,932,000 |
1,932,000 |
|
|
19,320,000 |
19,320,000 |
|
| ========== |
========== |
|
|
========== |
========== |
|
|
| 4.
SURPLUS ON REVALUATION OF FIXED ASSETS |
|
|
|
|
| Opening
balance |
|
138,500,000 |
138,500,000 |
|
| Realizable
gain on disposal transferred |
|
|
