| Jubilee Spinning & Weaving Mills Limited |
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| Annual
Report 1998 |
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IN THE NAME OF ALLAH, THE BENEFICENT, THE MERCIFUL |
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| CONTENTS |
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|
| Board
of Directors |
|
|
| Notice
of Meeting |
|
| Director's
Report to the Shareholders |
|
| Chief
Executive's Review |
|
| Selected
Financial and Operational Data |
|
| Financial
Ratios |
|
|
| Breakup
of Salaries & Benefits |
|
| Auditor's
Report to the Members |
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| Balance
Sheet |
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|
| Profit
and Loss Accounts |
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| Cash
flow Statement |
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|
| Notes
to the Accounts |
|
|
| Pattern
of Shareholdings |
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|
| BOARD
OF DIRECTORS |
|
|
| Ahsan
M. Saleem |
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| Mazhar
Karim (Chairman) |
|
| Mohammad
Arshad |
|
| Mohammad
Rafi (Chief Executive) |
|
| Shams Rafi |
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| Shaukat
Shafi |
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| Zahid
Bashir |
|
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| Secretaries |
|
| Zaheer
A. Shaikh |
|
| Rashid
Sadiq |
|
|
| Auditors |
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| Rahim
Jan & Company |
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| Chartered
Accountants |
|
|
| Internal
Auditors |
|
| M.
Yousuf Adil & Co. |
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| Chartered
Accountants |
|
|
| Legal
Advisers |
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| A.
K. Brohi & Co. |
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| Ghani
Law Associates |
|
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| Bankers |
|
| Bank
of America NT & SA |
|
| Habib
Bank Limited |
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| Citibank
N.A. |
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| Habib
Credit & Exchange Bank Limited |
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| Muslim
Commercial Bank Limited |
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| National
Bank of Pakistan |
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|
| Registered
Office |
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| 83-Babar
Block, New Garden Town, Lahore. |
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|
| Mills |
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| B-28,
S.I.T.E., 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 ANNUAL GENERAL MEETING |
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| NOTICE
IS HEREBY GIVEN THAT the Twenty Fifth Annual General Meeting of the
shareholders of JUBILEE |
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| SPINNING
& WEAVING MILLS LIMITED will be held at Registered Office, 83-Babar
Block, New Garden Town, |
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| Lahore
on Wednesday the March 31, 1999 at 9:00 a.m. to transact the following
business:- |
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| 1.
To receive and adopt the Audited Accounts of the Company for the year ended
September 30, 1998 |
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| together
with the Director and Auditor's Reports thereon. |
|
|
| 2.
To appoint Auditors and fix their remuneration. The present Auditors M/s.
Rahim Jan & Company. Chartered |
|
| Accountants
retire and being eligible, offer themselves for re-appointment. |
|
|
| 3.
To elect seven Directors of the Company, as fixed by the Board for a period
of three years commencing |
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| from
May 10, 1999 in accordance with the provisions of the Companies Ordinance,
1984 in place of |
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| retiring
Directors namely: |
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|
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| 1.
Mr. Ahsan M. Saleem |
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2. Mr. Mazhar Karim |
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| 2.
Mr. Muhammad Arshad |
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4. Mr. Muhammad Rafi |
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| 3.
Mr. Shams Rafi |
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6. Mr. Shaukat Shafi |
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| 4.
Mr. Zahid Bashir |
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| All
retiring directors shall be eligible to offer themselves for re-election. |
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| PARTICIPATION
IN THE ANNUAL GENERAL MEETING: |
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| A
member eligible to attend and vote at this Meeting may appoint another member
as his/her proxy to attend |
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| and
vote instead of him/her behalf. Proxies in order to be effective must be
received by the Company at the |
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| Registered
Office not later than 48 hours before the time of holding the meeting. |
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| Any
person who seeks to contest election to the Office of Directors, whether he
is a retiring Directors or |
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| otherwise,
file with the company at its Registered Office not later than fourteen days
before the date of meeting, |
|
| a
notice of his intention to offer himself for election as Director, together
with his consent to act as a Director. |
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|
| BOOK
CLOSURE: |
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| The
Share Transfer Books of the Company will remain closed from March 25, 1999 to
March 31, 1999 (both |
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| days
inclusive). |
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|
ON BEHALF OF THE BOARD |
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|
|
ZAHEER A. SHAIKH |
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|
|
CORPORATE SECRETARY |
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|
| REGISTERED
OFFICE: |
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| 83-Babar
Block, New Garden Town, |
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| LAHORE: |
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| Phone
No. (042) 5881974-75 |
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| Fax
No. (042) 5881976 |
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| Dated
March 06, 1999 |
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|
| DIRECTOR'S
REPORT TO THE SHAREHOLDERS |
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| Your
Directors are pleased to present the 25th Annual Report alongwith detailed
notes for the year ended |
|
| September
30, 1998. |
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| Your
company's trading for the year resulted in pre-tax loss of Rs. 94,146,893
after meeting all operational, |
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| administrative,
financial and other expenses. |
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|
| Break
up of the same can be read under Profit & Loss Account 1998. |
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|
1998 |
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|
Rupees |
|
|
| Loss
before taxation |
|
(94,146,893) |
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| Provision
for taxation |
|
(3,780,682) |
|
|
|
|
---------- |
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|
|
|
(97,927,575) |
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| Unappropriated
profit brought forward |
|
7,723,629 |
|
|
|
|
---------- |
|
| Accumulated
loss carried forward |
|
(90,203,946) |
|
|
========== |
|
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| The
present Auditors Messrs Rahim Jan & Co., retire and eligible, offer
themselves for re-appointment. |
|
|
| Information
required under section 236 (2) of the Companies Ordinance 1984 follows as
"Review" on |
|
| the
next page. |
|
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| Management
express their appreciation to all categories of employees for their diligent
performance, display |
|
| of
harmony and their continued efforts to improve the efficiency all round. |
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|
For and on behalf of the Board |
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|
|
|
Mohammad Rafi |
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|
|
Chief Executive |
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| March
06, 1999 |
|
|
|
| CHIEF
EXECUTIVE'S REVIEW |
|
|
|
| The
management is pleased to present the accounts for the year ended September |
|
| 30th, 1998. |
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| The
period under review was difficult one for your Company: Although sales
revenue |
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| increased
from Rs. 577.9 million to Rs. 662.9 million, the Company suffered a loss |
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| of
Rs. 97.93 million after tax. This translates to a loss of Rs. 13.96 per
share. |
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| Various
factors contributed to this loss. Raw material prices were significantly |
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| higher
and selling prices were reduced due to an ongoing crisis in the textile
industry. |
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| Other
input costs such as dyes and chemicals, salaries and wages and utilities also
posted |
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| increases.
The domestic retail market remained severely depressed' and this had an |
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| adverse
impact on sales of the Company's lawn and latha. All the above mentioned |
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| factors
caused a liquidity crunch forcing the Company to increase borrowing. Due to |
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| an
exorbitant mark-up rate, this increased borrowing further contributed to the
Company's |
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| losses. |
|
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| The
management of the Company, in cooperation with its workers and bankers, |
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| has
started an aggressive drive to lower all costs, increase efficiencies and
improve |
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| the
quality of all products. Some capital investment has been made to change the
balance |
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| of
the spinning division in order to provide flexibility and better quality.
Though we |
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| have
a long way to go before the Company's problems can be rectified, this
strategy |
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| has
led to improved performance and better margins. |
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| The
Company has taken all necessary steps to avoid any negative effects from |
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| millennium
bug. |
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| The
Company's Board of Directors wished to place on record its appreciation |
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| for
the dedicated services rendered by the employees of the Company. The Board
would |
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| also
like to thank the Company's bankers and other financiers for their
cooperation |
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| during
this difficult time. |
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| For
and on behalf of Board of Directors. |
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|
|
Muhammad Rafi |
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|
Chief Executive |
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| March
06, 1999 |
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|
|
| SELECTED
FINANCIAL AND |
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| OPERATIONAL
DATA |
|
|
| Application
of Revenue Earned: |
|
|
|
|
|
1998 |
1997 |
1996 |
1995 |
1994 |
|
| SALE
(Rupees in thousand) |
662,895 |
577,916 |
497,059 |
496,138 |
405,868 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
% |
% |
% |
% |
% |
|
| (IN
TERM OF PERCENTAGE) |
100.00 |
100.00 |
100.00 |
100.00 |
100.00 |
|
| Cost
of Sales |
|
97.95 |
84.42 |
88.32 |
84.38 |
82.40 |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
| GROSS
PROFIT |
|
2.75 |
15.58 |
11.68 |
15.62 |
17.60 |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
| Administrative
expenses |
2.75 |
2.67 |
2.15 |
2.75 |
2.25 |
|
| Selling
& Distribution expenses |
1.99 |
1.13 |
0.83 |
3.17 |
3.02 |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
4.74 |
3.80 |
2.98 |
5.92 |
5.27 |
|
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|
---------- |
---------- |
---------- |
---------- |
---------- |
|
| OPERATING
(LOSS)/PROFIT |
(1.99) |
11.78 |
8.70 |
9.70 |
12.33 |
|
| Other
Income |
|
0.64 |
0.79 |
2.34 |
6.55 |
2.10 |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
(1.35) |
12.57 |
11.04 |
16.25 |
14.43 |
|
|
|
|
| Financial
expenses |
|
11.42 |
12.40 |
10.43 |
11.13 |
9.39 |
|
| Non-operating
expenses |
|
0.33 |
0.06 |
0.00 |
0.06 |
0.47 |
|
| Provision
for diminution in the |
|
|
| value
of short-term investments |
1.10 |
- |
- |
- |
- |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
(12.85) |
12.46 |
10.43 |
11.19 |
9.86 |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
| (LOSS)/PROFIT
BEFORE TAXATION |
(14.20) |
0.11 |
0.61 |
5.06 |
4.57 |
|
| Taxation |
|
(0.57) |
0.66 |
(0.55) |
(0.74) |
(0.72) |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
| (LOSS)/PROFIT
AFTER TAXATION |
(14.77) |
0.77 |
0.06 |
4.32 |
3.85 |
|
|
|
| FINANCIAL
RATIOS AT 30TH SEPTEMBER |
|
|
|
|
|
1998 |
1997 |
1996 |
1995 |
1994 |
|
|
|
|
|
|
| Gross
Profit to Sales |
|
% |
2.75 |
15.58 |
11.68 |
15.62 |
17.60 |
|
| Operating
(Loss)/Profit to Sales |
|
% |
(1.99) |
11.78 |
8.70 |
9.70 |
12.33 |
|
| Pre-tax
(Loss)/Profit to Sales |
|
% |
(14.20) |
0.11 |
0.61 |
5.06 |
457 |
|
| Pre-tax
(Loss)/Profit to Capital |
|
% |
(134.17) |
1.02 |
5.28 |
49.86 |
51.50 |
|
| Pre-tax
(Loss)/Profit to capital employed |
% |
(303.93) |
0.51 |
2.46 |
20.26 |
18.07 |
|
| (Loss)/Earning
per share |
|
Rs. |
(13.96) |
0.70 |
0.05 |
4.25 |
4.34 |
|
| Bonus
issue to capital |
|
% |
0.00 |
10.00 |
10.00 |
15.00 |
40.00 |
|
| Break
up value per share |
|
Rs. |
4.41 |
20.21 |
21.46 |
24.61 |
28.50 |
|
| Debt/Equity
Ratio |
|
|
59/41 |
20/80 |
20/80 |
22/78 |
18/82 |
|
| Current
ratio |
|
|
0.83:1 |
1.01:1 |
1.09:1 |
1.03:1 |
0.94:1 |
|
|
| BREAKUP
OF SALARIES & BENEFITS |
|
|
|
|
|
|
(RUPEES IN THOUSANDS) |
|
|
|
|
1998 |
1997 |
1996 |
1995 |
1994 |
|
|
|
|
|
| Salaries
& Wages |
|
62,627 |
51,271 |
46,050 |
42,359 |
38,860 |
|
| Bonus |
|
3,627 |
3,439 |
4,407 |
3,547 |
3,674 |
|
| Gratuity
provision |
|
7,518 |
7,375 |
5,758 |
6,144 |
2,525 |
|
| Social
Security |
|
2,180 |
1,792 |
1,823 |
1,724 |
1,611 |
|
| Old
Age Benefits |
|
1,574 |
1,361 |
1,382 |
1,324 |
1,249 |
|
| Education
Cess |
|
141 |
163 |
111 |
174 |
112 |
|
| Group
Insurance |
|
631 |
582 |
305 |
634 |
620 |
|
| Medical
Expenses |
|
587 |
504 |
400 |
320 |
256 |
|
| Canteen
subsidy |
|
504 |
653 |
666 |
603 |
540 |
|
| Other
welfare charges |
|
1,597 |
1,207 |
1,056 |
1,101 |
974 |
|
| Total
Benefits |
|
18,359 |
17,076 |
15,908 |
15,571 |
11,561 |
|
| Total
Salaries, Wages & benefits |
|
80,986 |
68,347 |
61,958 |
57,930 |
50,421 |
|
|
|
|
|
| AUDITORS'
REPORT TO THE-MEMBERS |
|
|
| We
have audited the annexed balance sheet of Jubilee Spinning & Weaving
Mills Limited as at September |
|
| 30,
1998 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 purpose 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 |
|
|
| 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 cash flow statement, together
with the notes |
|
| forming
part thereof, give the information required by 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, 1998 and of the loss and the cash flow statement for the year then ended;
and: |
|
|
| d)
in our opinion no Zakat was deductible at source under the Zakat and Usher
Ordinance, 1980. |
|
|
|
|
|
Rahim Jan & Company |
|
| KARACHI: |
|
|
Chartered Accountants |
|
|
| DATED:
March 06, 1999 |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 1998 |
|
|
|
|
|
1998 |
1997 |
|
| CAPITAL
& LIABILITIES |
|
Note |
Rupees |
Rupees |
|
|
|
|
|
| SHARE
CAPITAL |
|
|
|
| AUTHORISED |
|
|
|
| 20,000,000
Ordinary Shares of Rs. 10/- each |
|
200,000,000 |
200,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed & Paid-up |
|
3 |
70,168,670 |
63,789,700 |
|
|
|
|
| RESERVES
& SURPLUS |
|
|
| Reserves |
|
4 |
51,012,000 |
57,390,970 |
|
| Accumulated
(loss)/Unappropriated Profit |
|
990,203,946) |
7,723,629 |
|
|
|
|
---------- |
---------- |
|
|
|
(39,191,946) |
65,114,599 |
|
|
|
---------- |
---------- |
|
| SHARE
HOLDERS' EQUITY |
|
30,976,724 |
128,904,299 |
|
| SURPLUS
ON REVALUATION OF |
|
|
| FIXED
ASSETS |
|
5 |
70,000,000 |
- |
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
| ACQUIRED
UNDER FINANCE LEASE |
|
6 |
45,245,240 |
32,341,867 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
| Gratuity |
|
7 |
35,746,715 |
31,517,766 |
|
| Taxation |
|
8 |
12,976,944 |
12,976,944 |
|
|
|
|
---------- |
---------- |
|
|
|
|
48,723,659 |
44,494,710 |
|
|
|
|
|
|
| CURRENT
LIABILITIES & PROVISIONS |
|
|
| Current
portion of long term liabilities |
9 |
26,710,682 |
21,237,834 |
|
| Short-term
running finance-secured |
|
10 |
359,797,545 |
308,214,685 |
|
| Creditors,
accrued and other liabilities |
11 |
147,002,128 |
93,831,969 |
|
| Provision
for taxation |
|
12 |
3,780,682 |
3,169,159 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
537,291,037 |
426,453,647 |
|
| CONTINGENCIES
& COMMITMENTS |
|
13 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
732,236,660 |
632,194,523 |
|
|
|
|
========== |
========== |
|
|
| PROPERTY
& ASSETS |
|
|
|
|
|
|
|
| FIXED
ASSETS - Tangible |
|
|
| At
Cost-Less Depreciation |
|
14 |
255,538,676 |
134,913,451 |
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
8,963,175 |
7,491,533 |
|
| INVESTMENT
- At Cost |
|
15 |
40,955,618 |
80,207,218 |
|
|
|
|
|
| LONG
TERM LOANS |
|
16 |
2,490,884 |
1,803,324 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
17 |
19,219,746 |
20,124,383 |
|
| Stock-in-trade |
|
18 |
205,792,553 |
195,652,917 |
|
| Trade
debtors |
|
19 |
32,756,979 |
61,817,253 |
|
| Bills
receivable |
|
20 |
6,321,919 |
4,267,515 |
|
| Loans
and advances |
|
21 |
8,462,456 |
22,622,505 |
|
| Deposits,
prepayments and other receivables |
22 |
84,636,051 |
68,743,780 |
|
| Short-term
investments |
|
23 |
65,160,565 |
33,184,737 |
|
| Cash
and. bank balances |
|
24 |
1,938,038 |
1,365,907 |
|
|
|
|
---------- |
---------- |
|
|
|
|
424,288,307 |
407,778,997 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
732,236,660 |
632,194,523 |
|
|
|
|
|
========== |
========== |
|
| NOTE:
the above Balance Sheet and annexed Profit and Loss Account should be read in
conjunction |
|
| with
the Notes to the accounts annexed hereto, which form an integral part of
these accounts. |
|
|
| KARACHI:
March 06, 1999 |
|
Mohammad Rafi |
|
Shams Rafi |
|
|
|
|
Chief Executive |
|
Director |
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1998 |
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Sales (Net) |
|
25 |
662,895,385 |
577,915,922 |
|
| Cost
of Sales |
|
26 |
(644,635,173) |
(487,876,720) |
|
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT |
|
|
18,260,212 |
90,039,202 |
|
|
|
|
|
| Administrative
expenses |
|
27 |
(18,226,384) |
(15,448,744) |
|
| Selling
and Distribution Expenses |
|
28 |
(13,215,963) |
(6,521,752) |
|
|
|
|
---------- |
---------- |
|
|
|
|
(31,442,347) |
(21,970,496) |
|
|
|
|
---------- |
---------- |
|
| OPERATING
(Loss)/PROFIT |
|
|
(13,182,135) |
68,068,706 |
|
| Other
Income |
|
29 |
4,208,809 |
4,605,732 |
|
|
|
|
---------- |
---------- |
|
|
|
|
(8,973,326) |
72,674,438 |
|
|
|
|
---------- |
---------- |
|
| Financial
expenses |
|
30 |
(75,723,918) |
(71,662,693) |
|
| Non-operating
expenses |
|
31 |
(2,173,8 77) |
(358,600) |
|
| Provision
for diminution in the value of short-term investments |
(7,275,772) |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
(85,173,567) |
(72,021,293) |
|
|
|
|
---------- |
---------- |
|
| (LOSS)/PROFIT
BEFORE TAXATION |
|
|
(94,146,893) |
653,145 |
|
| PROVISION
FOR TAXATION |
|
32 |
(3,780,682) |
3,825,897 |
|
|
|
|
|
---------- |
---------- |
|
| (LOSS)/PROFIT
AFTER TAXATION |
|
(97,927,575) |
4,479,042 |
|
| Unappropriated
profit from previous year |
|
7,723,629 |
9,623,557 |
|
|
|
---------- |
---------- |
|
|
|
(90,203,946) |
14,102,599 |
|
| APPROPRIATIONS: |
|
|
|
| Proposed
Bonus shares issue |
|
- |
6,378,970 |
|
|
|
|
| ACCUMULATED
(LOSS)/UNAPPROPRIATED |
|
|
---------- |
---------- |
|
| PROFIT
CARRIED TO BALANCE SHEET |
|
(90,203,946) |
7,723,629 |
|
|
|
========== |
========== |
|
|
|
|
|
Mohammad Rafi |
|
Shams Rafi |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| OR
THE YEAR ENDED SEPTEMBER 30, 1998 |
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
RUPEES |
RUPEES |
|
| A-CASH
FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
