| Kohinoor Textile Mills Limited |
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| Annual
Report 1998 |
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| CONTENTS |
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| Board
of Directors |
|
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditors'
Report |
|
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
|
| Statement
of Changes in Financial Position |
|
| (Cash
Flow Statement) |
|
| Notes
to the Accounts |
|
| Pattern
of Holding of the Shares |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
|
| MR.
TARIQ SAYEED SAIGOL |
|
Chairman |
|
| MR.
TAUFIQLIE SAYEED SAIGOL |
Chief Executive |
|
| MR.
SAYEED TARIQ SAIGOL |
|
| MR.
AAMIR FAYYAZ SHEIKH |
|
| MR.
ASAD FAYYAZ SHEIKH |
|
| MR.
USMAN SAID |
|
| MR.
ZIA A. SHEIKH |
|
| MR.
NASIM BEG |
|
NIT Nominee |
|
|
| COMPANY
SECRETARY |
|
| MR.
MUHAMMAD ASHRAF |
|
|
| AUDITORS |
|
| M/S.
M. HUSSAIN CHAUDHURY & CO. |
|
| Chartered
Accountants |
|
|
| BANKERS |
|
| ASKARI
COMMERCIAL BANK LIMITED |
|
| HABIB
BANK LIMITED |
|
| BANK
ALFALAH LIMITED |
|
| MUSLIM
COMMERCIAL BANK LIMITED |
|
| NATIONAL
BANK OF PAKISTAN |
|
| THE
BANK OF PUNJAB |
|
| GULF
COMMERCIAL BANK LIMITED
' |
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| UNITED
BANK LIMITED |
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| UNION
BANK LIMITED |
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| REGISTERED
OFFICE |
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| 42
- LAWRENCE ROAD, |
|
| LAHORE |
|
| Tel:
6302261 - 6302262 |
|
| Fax:
92-42-6368721 |
|
|
| MILLS |
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| PESHAWAR
ROAD, |
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| RAWALPINDI |
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| Tel:
051 - 473941-3 |
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| Fax:
051 - 473083 |
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|
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| NOTICE
OF ANNUAL GENERAL MEETING |
|
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| Notice
is hereby given that the Thirtieth Annual General Meeting of the members of
KOHINOOR |
|
| TEXTILE
MILLS LIMITED will be held on Saturday, March 27, 1999 at 10.00 a.m. at its
Registered |
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| Office,
42-Lawrence Road, Lahore, to transact the following business: |
|
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| (A)
ORDINARY BUSINESS |
|
|
| 1.
To confirm the minutes of the previous Annual General Meeting held on March
27, 1998. |
|
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| 2.
To receive, consider and adopt the audited accounts of the Company for the
year ended |
|
| September
30, 1998 together with the Auditors' and Directors' reports thereon. |
|
|
| 3.
To elect eight Directors, as fixed by the Board of Directors, in accordance
with the provisions |
|
| of
Section 178 of the Companies Ordinance, 1984 for a term of three years
commencing April |
|
| 23,
1999 in place of the following retiring Directors:- |
|
|
| 1.
Mr. Tariq Sayeed Saigol |
2. Mr. Taufique Sayeed
Saigol |
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| 3.
Mr. Sayeed Tariq Saigol |
4. Mr. Aamir Fayyaz
Sheikh |
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| 5.
Mr. Asad Fayyaz Sheikh |
6. Mr. Usman Said |
|
| 7.
Mr. Zia A. Sheikh |
|
8. Mr. Nasim Beg (Nominee
of NIT) |
|
|
|
|
| 4.
To appoint Auditors for the year ending September 30, 1999 and fix their
remuneration. M/s |
|
| M.
Hussain Chaudhury & Co., Chartered Accountants, the retiring auditors,
being eligible |
|
| offer
themselves for re-appointment. |
|
|
|
| 5.
To transact any other business with the permission of the Chair. |
|
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| (B)
SPECIAL BUSINESS: |
|
|
| To
approve the remuneration of the Chief Executive and full time working
Director of the Company and |
|
| pass
the following two resolutions as ordinary resolutions with or without
amendment :- |
|
|
| (i)
"RESOLVED that a sum of Rs. 75,000/- (Rupees seventy five thousand only)
be and is hereby |
|
| approved
towards monthly remuneration of Chief Executive of the Company for a period
of three |
|
| years
effective from April 23, 1999. In addition to the above, a Company maintained
car with |
|
| driver's
and chaukidar's salaries, furnished accommodation, life insurance
contribution, medical |
|
| facilities
and all other benefits incidental or relating to his office plus bonus and
provident fund in |
|
| accordance
with the rules and policy of the Company applicable to the Directors shall
also be |
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| provided
to him". |
|
|
|
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| (ii)
"RESOLVED that a sum of Rs. 50,000/- (Rupees fifty thousand only) be and
is hereby approved |
|
| towards
monthly remuneration inclusive of house rent allowance of the full time
working Director of |
|
| the
Company for a period of three years effective from April 23, 1999. In
addition to the above, a |
|
| Company
maintained car with driver's and chaukidar's salaries, life insurance
contribution, LFA, |
|
| medical
facilities and all other benefits incidental or relating to his office plus
bonus and provident |
|
| fund
in accordance with the rules and policy of the Company applicable to the
Directors shall also |
|
| be
provided to him". |
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|
BY ORDER OF THE BOARD, |
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|
| LAHORE: |
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|
(MUHAMMAD ASHRAF) |
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| March
05, 1999. |
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The share transfer books of the Company shall remain closed from March 20,
1999 to March 27, |
|
| 1999
(both days inclusive). |
|
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|
|
|
|
| 2.
Any person who seeks to contest election to the office of Director of the
Company should file with |
|
| the
Company at its Registered Office, a notice of his intention to offer himself
for election not later |
|
| than
14 days before the date of the Annual General Meeting. |
|
|
| 3.
A member entitled to vote at this meeting is entitled to appoint another
member as proxy. Proxies |
|
| in
order to be effective must be received at 42-Lawrence Road, Lahore, the
Registered Office of the |
|
| Company
not less than 48 hours before the meeting and must be duly stamped, signed
and |
|
| witnessed.
~:: |
|
|
| 4.
Shareholders are requested to promptly notify the Company of any change in
their addresses. |
|
|
| Statement
under section 160 (1) (b) of the Companies Ordinance, 1984. |
|
|
|
| The
Shareholders approval will be sought for the remuneration payable to the
Chief Executive and the |
|
| full
time working Director of the Company in accordance with the terms and
conditions of their service |
|
| with
the Company. The authorized capital of the Company is Rs. 700 Million with
subscribed and paid up |
|
| capital
of Rs. 271.649 Million. The production facilities are located at Peshawar
Road, Rawalpindi and |
|
| annual
sales revenue is Rs. 1.9 Billion for the year ended September 30, 1998. |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| The
Directors of the Company welcome you to the Annual General meeting and
present the 30th annual |
|
| report
alongwith audited accounts of the Company for the financial year ended
September 30, 1998 for |
|
| your
consideration and approval. |
|
|
| APPROPRIATION
AND EARNING PER SHARE |
|
|
|
|
Rs. in '000' |
|
|
| Profit/(Loss)
before taxation |
|
(16,927) |
|
| Provision
for taxation |
|
|
8,068 |
|
|
|
|
---------- |
|
| Profit/(Loss)
after taxation |
|
(24,995) |
|
| Unappropriated
profit brought forward |
|
3,617 |
|
|
|
|
---------- |
|
| Profit/(Loss)
available for appropriation |
|
(21,378) |
|
| Transfer
from General Reserve |
|
25,000 |
|
|
|
|
---------- |
|
| Unappropriated
profit carried forward |
|
3,622 |
|
|
|
|
========== |
|
|
| There
being a net loss for the year resulting in nil Earnings Per Share (EPS), the
Company is unable to |
|
| pay
any dividend for the year. |
|
|
| OPERATING
RESULTS |
|
|
| During
the year under review, net sales of the Company were Rs. 1,919,096 thousand
(1997 : |
|
| Rs.
1,728,481 thousand) registering an increase of 11 percent. |
|
|
| In
order to improve quality and productivity and for the sake of competing
positively in the market, the |
|
| Company
had to undertake major repairs, replacements and general overhauling of
various machines of |
|
| spinning
unit. This resulted in substantial increase in consumption of stores. |
|
|
| Enhancement
in electricity tariff by WAPDA, increase in minimum wages, impact of adhoc
relief in |
|
| wages/salaries
enacted by the government last year and general inflationary trend increased
cost of |
|
| production.
During the year under review additional 9 ring frames were installed and
started commercial |
|
| production.
Additional capacity in spinning also raised costs. Volume of commercial
processing of cloth |
|
| increased
as compared to that of last year. All these factors caused increase in cost
of sales by 16.90% |
|
| as
compared to that of last year. |
|
|
| Reorganisation
and related induction necessary for marketing, organisational and corporate
culture |
|
| changes
of the Company and large sales volume entailed increase in administrative,
selling and general |
|
| expenses. |
|
|
| Repayment
of financial liabilities and change in financial management strategies
resulted in reduction of |
|
| Rs.
30.250 million in financial charges of the year. |
|
|
| After
adjustment of operating and non-operating income and financial charges,
Company suffered a loss |
|
| of
Rs. 16.927 million as against loss of Rs. 54.610 million for the previous
year. |
|
|
| FUTURE
OUTLOOK |
|
|
|
| Additional
10 ring frames have been imported and installed. As a part of our policy of
balancing, |
|
| modernization
and replacement of machinery, the management is planning to replace 22 more
ring |
|
| frames,
combers and auto coners, which will help in improving performance of the
spinning unit. |
|
|
|
|
| Efforts
for utilization of full capacity of cloth processing unit by commercial
processing for outside |
|
| parties
have started contributing positively to financial results of the Company. |
|
|
|
|
| We
hope that through best efforts of management and staff, improvement in
marketing strategies |
|
| and
spin plan and better production facilities, the Company will be able to
achieve better results, |
|
| (insha
Allah). |
|
|
|
| Process
of documentation of procedures and systems of the Company for ISO 9001
certification is in |
|
| the
final stages. |
|
|
|
|
|
| YEAR
2000 PROBLEM |
|
|
| Measures
have been taken to make hardware and software systems compliant to year 2000.
We do not |
|
| anticipate
any problem in this regard. |
|
|
|
|
| PATTERN
OF SHAREHOLDING |
|
|
| The
shareholding pattern of the Company as on September 30, 1998 is included in
the Annual Report. |
|
|
|
| APPRECIATION |
|
|
| The
Directors place on record their appreciation for the support and cooperation
extended by its |
|
| bankers
and other financial institutions to the Company. |
|
|
| Your
Directors also appreciate the efforts of management, staff and workers for
their dedication and |
|
| hard work. |
|
|
| AUDITORS |
|
| Auditors,
Messrs M. Hussain Chaudhury & Co., Chartered Accountants, retire and
being eligible, offer |
|
| themselves
for reappointment for the next year. |
|
|
|
|
|
FOR AND ON BEHALF OF THE BOARD |
|
|
|
|
|
| LAHORE: |
|
TAUFIQUE SAYEED SAIGOL |
|
| Dated:
February 18, 1999. |
|
Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of "KOHINOOR TEXTILE MILLS
LIMITED" as at 30th |
|
| September,
1998 and the related profit and loss account and statement of cash flow
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 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 and profit and loss account together with the notes forming
part thereof, gives |
|
| 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 30th
September, |
|
| 1998
and of the loss and the cash flows for. the year then ended; and |
|
|
| d)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| Rawalpindi: |
|
|
(M. HUSSAIN CHAUDHURY & co.) |
|
| Dated:
February 18, 1999. |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 1998 |
|
|
|
|
|
Note |
1998 |
1997 |
|
|
|
|
|
(Rupees in
thousand) |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| SHARE
CAPITAL |
|
|
|
| Issued,
subscribed and paid up |
|
3 |
271,649 |
271,649 |
|
|
|
|
|
| RESERVES |
|
|
|
| Capital
Reserves |
|
4 |
105,615 |
105,145 |
|
| Revenue
Reserves |
|
5 |
50,000 |
75,000 |
|
| Unappropriated
profit |
|
|
3,622 |
3,617 |
|
|
|
|
---------- |
---------- |
|
|
|
|
159,237 |
183,762 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
430,886 |
455,411 |
|
| DEBENTURES
AND LONG TERM LOANS |
|
|
|
|
| Debentures |
|
6 |
- |
- |
|
| Long
Term Loans |
|
7 |
219,568 |
152,324 |
|
|
|
|
---------- |
---------- |
|
|
|
|
219,568 |
152,324 |
|
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
| SUBJECT
TO FINANCE LEASES |
|
8 |
62,223 |
87,048 |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
portion of long term liabilities |
9 |
84,289 |
95,574 |
|
| Short
term finances |
|
10 |
730,319 |
792,640 |
|
| Creditors,
accrued and other liabilities |
11 |
341,444 |
375,460 |
|
| Taxation |
|
12 |
- |
- |
|
| Unclaimed
dividend |
|
|
99 |
99 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,156,151 |
1,263,773 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
13 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,868,828 |
1,958,556 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| At
cost less accumulated depreciation |
14 |
368,002 |
387,380 |
|
| Assets
subject to finance leases |
|
15 |
157,326 |
171,067 |
|
| Capital
work in progress |
|
16 |
- |
246 |
|
|
|
|
---------- |
---------- |
|
|
|
|
525,328 |
558,693 |
|
| LONG
TERM INVESTMENTS - at cost |
|
17 |
352,610 |
310,641 |
|
| LONG
TERM LOANS AND ADVANCES |
|
18 |
24,000 |
32,000 |
|
|
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores
and spares |
|
19 |
133,706 |
94,396 |
|
| Stocks
in trade |
|
20 |
293,477 |
368,186 |
|
| Short
term investments |
|
21 |
135,792 |
177,762 |
|
| Trade debts |
|
|
22 |
178,480 |
222,074 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
23 |
197,250 |
174,300 |
|
| Cash
and bank balances |
|
24 |
28,185 |
20,504 |
|
|
|
|
---------- |
---------- |
|
|
|
|
966,890 |
1,057,222 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
1,868,828 |
1,958,556 |
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
| Auditors'
report of date is annexed hereto. |
|
|
|
|
|
|
|
|
| Rawalpindi: |
|
|
TAUFIQUE SAYEED SAIGOL |
|
USMAN SAID |
|
| Dated:
February 18, 1999. |
|
Chief Executive |
|
Director |
|
|
|
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
|
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1998 |
|
|
|
|
|
|
|
|
Note |
1998 |
1997 |
|
|
|
|
|
(Rupees in
thousand) |
|
|
|
|
|
| Sales |
|
25 |
1,919,096 |
1,728,481 |
|
| Cost
of Goods Sold |
|
26 |
1,646,070 |
1,408,064 |
|
|
|
|
---------- |
---------- |
|
| Gross
Profit |
|
|
|
273,026 |
320,417 |
|
| Administrative,
Selling & General Expenses |
27 |
125,620 |
112,625 |
|
|
|
|
---------- |
---------- |
|
| Operating
Profit |
|
|
|
147,406 |
207,792 |
|
| Other
Income/(Loss) |
|
|
|
|
|
|
- Operating |
|
28.1 |
3,809 |
5,184 |
|
|
- Non Operating |
|
28.2 |
48,310 |
(20,884) |
|
|
|
|
---------- |
---------- |
|
|
|
|
199,525 |
192,092 |
|
| Financial
Charges |
|
|
29 |
216,452 |
246,702 |
|
|
|
|
---------- |
---------- |
|
| Profit/(Loss)
Before Taxation |
|
|
(16,927) |
(54,610) |
|
|
|
|
|
|
| Provision
for Taxation |
|
|
12 |
8,068 |
11,270 |
|
|
|
|
---------- |
---------- |
|
| Profit/(Loss)
after Taxation |
|
|
(24,995) |
(65,880) |
|
| Unappropriated
Profit brought forward |
|
3,617 |
4,497 |
|
|
|
|
---------- |
---------- |
|
| Profit/(loss)
available for appropriation |
|
(21,378) |
(61,383) |
|
| Appropriation |
|
|
|
|
| Transfer
from general reserves |
|
|
25,000 |
65,000 |
|
|
|
|
|
|
---------- |
---------- |
|
| Unappropriated
Profit |
|
|
|
3,622 |
3,617 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
TAUFIQUE SAYEED SAIGOL |
|
|
USMAN SAID |
|
|
|
Chief Executive |
|
Director |
|
|
|
| Auditors'
report of date is annexed hereto. |
|
|
| Rawalpindi: |
|
|
| Dated:
February 18, 1999. |
|
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) FOR THE YEAR ENDED SEPTEMBER 30, 1998 |
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
(Rupees in
thousand) |
|
|
|
|
| Cash
flow from operating activities: |
|
|
|
|
| Net
profit/(loss) before taxation |
|
(16,927) |
(54,610) |
|
| Adjustments
for: |
|
|
|
|
| Depreciation |
|
|
58,842 |
62,320 |
|
| (Gain)/Loss
on sale of fixed assets |
|
(11,576) |
(2,439) |
|
| (Gain)/Loss
on sale of investments |
|
- |
57,663 |
|
| Financial
charges |
|
|
216,452 |
246,702 |
|
| Operating
profit |
|
|
---------- |
---------- |
|
| before
working capital changes: |
|
246,791 |
309,636 |
|
|
|
|
| (Increase)/decrease
in: |
|
|
|
| Stores
and spares |
|
(39,310) |
(5,215) |
|
| Stocks
in trade |
|
74,709 |
(92,108) |
|
| Trade debts |
|
|
43,594 |
(16,717) |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
(17,602) |
(5,361) |
|
|
|
|
| Increase/(decrease)
in: |
|
|
|
| Creditors,
accrued and other liabilities |
|
(8,486) |
6,939 |
|
|
|
|
---------- |
---------- |
|
| Effect
due to working capital changes: |
|
52,905 |
(112,462) |
|
|
|
|
| Cash
generated from operations |
|
299,696 |
197,174 |
|
|
|
---------- |
---------- |
|
| Financial
charges paid |
|
(241,981) |
(235,872) |
|
| Income
tax paid |
|
(13,416) |
(28,247) |
|
|
|
---------- |
---------- |
|
|
|
(255,397) |
(264,119) |
|
|
|
---------- |
---------- |
|
| Net
cash from operating activities |
|
44,299 |
(66,945) |
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
(Rupees in
thousand) |
|
|
|
|
| Cash
flow from investing activities: |
|
|
|
|
| Fixed
assets purchased |
|
|
(34,716) |
(14,572) |
|
| Fixed
assets acquired under finance leases |
|
(12,600) |
(3,210) |
|
| Sale
of fixed assets |
|
|
33,415 |
7,739 |
|
| Sale
of investments |
|
|
|
44,950 |
|
| Gain
on sale of KTML shares tendered by |
|
|
|
| one
of principal share holders |
|
470 |
- |
|
|
|
|
---------- |
---------- |
|
| Net
cash from/(used in)investing activities. |
|
(13,431) |
34,907 |
|
|
|
|
|
|
| Cash
flow from financing activities: |
|
|
|
|
| Long-term
advances recovered |
|
8,000 |
8,000 |
|
| Long-term
borrowings |
|
|
80,000 |
24,323 |
|
| Finance
leases |
|
|
12,600 |
3,210 |
|
| Repayment
of: |
|
|
|
|
| Debentures |
|
|
|
(10) |
(114) |
|
| Long-term
loans |
|
|
(16,380) |
(35,376) |
|
| Finance
leases |
|
|
(45,076) |
(19,332) |
|
| Dividends
paid |
|
|
- |
(1) |
|
|
|
|
---------- |
---------- |
|
| Net
cash from/(used in) financing activities. |
|
39,134 |
