| Nina Industries Limited |
|
|
|
|
|
|
|
| ANNUAL
REPORT 1998 |
|
|
| CONTENTS |
|
| COMPANY
INFORMATION |
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
| CHAIRMAN'S REVIEW |
|
| DIRECTOR'S REPORT TO THE
SHAREHOLDERS |
|
| AUDITOR'S REPORT TO THE MEMBERS |
|
| BALANCE
SHEET |
|
| PROFIT AND LOSS ACCOUNT |
|
| CASH FLOW STATEMENT |
|
| NOTES
TO THE ACCOUNTS |
|
| PATTERN
OF SHAREHOLDING |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
|
| Mr.
Saeed A. Sattar |
|
Chairman |
|
| Mr.
Waqar A. Sattar |
|
Chief Executive |
|
| Mr.
Urooj Saeed |
|
Director |
|
| Mr.
Kashif Saeed Sattar |
Director |
|
| Mr.
Yasir Waqar |
|
Director |
|
| Mst.
Khairunnisa Begum |
Director |
|
| Mrs.
Saeeda Saeed |
|
Director |
|
| Mrs.
Anjum Waqar |
|
Director |
|
|
| COMPANY
SECRETARY |
|
|
| Mohammad
Hanif Razzak |
|
|
| AUDITORS |
|
|
| Muniff
Ziauddin & Co. |
|
| Chartered
Accountants |
|
|
| LEGAL
ADVISER |
|
|
| M/s.
Raza Hashmi - Advocates |
|
| 301-IIIrd
Floor, Kashif Centre, Opp.: Hotel Mehran, |
|
| Shahra-e-Faisal,
Karachi. |
|
|
| MILLS
AND REGISTERED OFFICE |
|
|
| A-29/A,
S.I.T.E,, Manghopir Road, Karachi. |
|
| Telephone:
2575043-46, 2575571-73 |
|
| Fax
2562315 - 2562319 |
|
|
| SHARES
OFFICE |
|
|
| 4th
Floor. Bank House No. 2 |
|
| Habib
Square, M.A. Jinnah Road, |
|
| Karachi. |
|
|
| Tel:
2426927 - 2426932 |
|
| Fax.
2423593 |
|
|
|
| NOTICE
OF 6th ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 6th Annual General Meeting of the shareholders of
INDUSTRIES |
|
| LIMITED
will be held on December 28, 1998 (Monday) at 2:00 p.m. at Beach Luxury
Hotel, Karachi |
|
| to
transact the following business:- |
|
|
| ORDINARY
BUSINESS |
|
|
| 1.
To confirm the minutes of Last Annual General Meeting held on December 31,
1997. |
|
|
| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended June |
|
| 30,
1998 together with Directors and Auditors report thereon. |
|
|
| 3.
To appoint the auditors and fix their remuneration. |
|
|
| 4.
To transact any other business that may be brought forward with the
permission of the Chair. |
|
|
| BY
ORDER OF THE BOARD |
|
|
| Mohammad
Hanif Razzak |
|
| (Company
Secretary) |
|
|
| Dated
· December 05, 1998. |
|
|
| NOTES: |
|
|
| 1.
A member entitled to attend and vote may appoint another member as his/her
proxy to |
|
| attend
the meeting and vote for him/her. Proxies to be effective must reach at the
Registered |
|
| Office
of the Company not less than 48 hours before the time of the Meeting. |
|
|
| 2.
The Shares Transfer books of the Company will be closed from December 17,
1998 to |
|
| December
28, 1998 (both days inclusive) |
|
|
| 3.
Members are requested to immediately notify the change of address, if any. |
|
|
|
| CHAIRMAN'S
REVIEW |
|
|
| Welcome
to Sixth Annual General Meeting of the Company. I am pleased to present to
you audited |
|
| accounts
for the year ended June 30, 1998. |
|
|
| The
year under review faced decline in exports, thus lower profits, the factors
are increase in cost of |
|
| production
by 20O/o anti-dumping duties imposed on finished bedlinen by the EU
countries, various |
|
| Government
measures i.e. reduction in duty drawback rates, huge blockade funds by
various |
|
| Government
departments, badly affected Company's liquidity, restraining the management
to follow |
|
| the
aggressive pattern of marketing of pervious years, resulted in decline m
export sales. |
|
|
| Your
director policy of keeping up with the latest technology in order to maintain
the lead in the |
|
| higher
value added exports helped to remain buoyant in the international market and
kept your |
|
| Company's
customer's profile intact which are now placing huge export orders for the
year 1999 |
|
| which
now appears very promising and profitable. Your director's efforts to expand
customer base |
|
| and
enter into non-traditional markets have kept the exports continued and
Company in profits. |
|
|
| Your
Company's chain of retail outlets in local market remained operational and is
gradually expanding |
|
| to
contribute profits by local sales. |
|
|
| Though
the year was extremely difficult for the management and staff, I place on
record my appreciation |
|
| for
meeting the challenges and keeping the Company's profile intact. I am
confident that they will |
|
| continue
to further improve their performance to face the challenges in changed
economic scenario. |
|
|
|
(Saeed A,, Sattar) |
|
|
Chairman |
|
| Karachi
:- December 05, 1998. |
|
|
|
| DIRECTOR'S
REPORT |
|
|
| The
Directors of the Company take pleasure in submitting their report together
with audited accounts |
|
| of
the Company and Auditor's report thereon, for the year ended June 30, 1998. |
|
|
| ACCOUNTS |
|
Rupees |
|
| Net
profit before taxation |
|
10,395,033 |
|
| Less:
Provision for taxation |
|
2,112,537 |
|
|
---------- |
|
|
8,282,496 |
|
| Add
- Unappropriated profit brought forward |
92,819,388 |
|
|
---------- |
|
| Unappropriated
profit carried forward |
|
101,101,884 |
|
|
========== |
|
|
|
|
|
| OPEPRATING
RESULT |
|
|
|
| Export
sales encountered decline due to world wide recession during most of the Fear
due to imposition |
|
| of
anti-dumping duties imposed by EU countries on finished bedlinen items,
various adverse measures |
|
| taken
by the Government of Pakistan in the financial sector as demanded by the IMF,
resulted in the |
|
| increase
in cost of production, delays in refund by Central Board of Revenue huge
funds of the |
|
| Company
were blocked resulting in financial crunch, discouraging the marketing of our
profitable |
|
| export
sector. |
|
|
| Despite
all adverse conditions, the management took various measures to remain in
green figures, |
|
| thus
earning a pretax profit of Rs. 10.39 Million. |
|
|
| RETAIL
OUTLETS |
|
|
| Your
Company's chain of retail outlets located at prime locations in Karachi and
Lahore performed well |
|
| and
fetched turnover of Rs. 11.5 Million and kept your Company's quality products
available for local |
|
| consumers.
Response by the local consumers were unprecedented and encouraged the
management to |
|
| expand
the chain by adding one more outlet at Islamabad, where presently furnishing
in progress. |
|
|
| FUTURE
OUTLETS |
|
|
| Though
the proceeding five months of the year 1998-99 were extremely difficult due
to country's |
|
| response
with nuclear explosion, number of economic sanctions imposed by developed
countries. |
|
|
| However,
the advent of lifting sanctions by the G-7 countries and certain changes in
Government |
|
| economic
policies, export orders again started pouring in and your directors expects a
benchmark |
|
| export
sales during the year 1998-99 as for the 1st half year of 1999, your
Company's order book is |
|
| full
as so far export orders for Rs. 597 Million have already being booked and
inshallah exports will |
|
| cross
Rs. 800 Million benchmark and will improve profitability of the Company. |
|
|
| We
hope that higher value addition in products and through economies of scale,
your Company would |
|
| be
able to maintain its growth in sales and profit, Inshallah. |
|
|
| AUDITORS |
|
|
| The
retiring auditors M/S. Muniff Ziauddin & Co. Chartered Accountants being
eligible have offered |
|
| themselves
for reappointment. |
|
|
| PATTERN
OF SHAREHOLDING |
|
|
| The
Pattern of Shareholdings as on June 30, 1998 is annexed to this report. |
|
|
| Your
directors place on record their appreciation for efforts put by its
management team and workers |
|
| of
the Company. |
|
|
|
For and on behalf of the
Board |
|
|
|
(Waqar A. Sattar) |
|
|
Chief Executive |
|
| Karachi
:- December 05, 1998. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of NINA INDUSTRIES LIMITED as at June
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 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; |
|
|
| (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 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 June 30, 1998 and of the profit and the cash flow for
the |
|
| year
then ended: and |
|
|
| (d)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, |
|
| 1980. |
|
|
| Karachi:
December 05, 1998. |
|
|
| MUNIFF
ZIAUDDIN & CO. |
|
| CHARTERED
ACCOUNTANTS |
|
|
|
| BALANCE
SHEET |
|
|
|
Note |
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
| CAPITAL
& LIABILITIES |
|
|
| AUTHORISED |
|
| SHARE
CAPITAL |
|
|
| 25,000,000
Ordinary shares of Rs. 10/- each |
250,000,000 |
250,000,000 |
|
|
========== |
========== |
|
| CAPITAL
AND RESERVE |
|
| Issued
subscribed and paid-up capital |
3 |
220,000,000 |
120,000,000 |
|
| Capital
reserve - share premium |
4 |
10,000,000 |
10,000,000 |
|
| Un-appropriated
profit |
|
101,101,884 |
92,819,388 |
|
|
--------- |
--------- |
|
|
331,101,884 |
222,819,388 |
|
| Long
term loans |
|
5 |
91,327,746 |
104,440,169 |
|
| Liabilities
against assets |
|
| subject
to finance lease |
6 |
7,820,732 |
10 176,157 |
|
|
|
|
|
| Directors
Loan |
|
7 |
16,662,745 |
26,538,727 |
|
| CURRENT
LIABILITIES |
|
| Short
term finance utilised. under |
|
| mark
up arrangements |
|
8 |
243,307,025 |
164,092,932 |
|
|
|
|
| Current
maturity of long term liabilities |
9 |
62,622,076 |
86,158,859 |
|
| Creditors,
accrued charges and other |
10 |
161,649,380 |
200,617,298 |
|
| Liabilities |
|
|
---------- |
---------- |
|
|
|
467,578,481 |
450,869,089 |
|
| Contingencies
and Commitments |
11 |
- |
- |
|
|
---------- |
---------- |
|
|
914,491,588 |
814,843,530 |
|
|
========== |
========== |
|
|
| PROPERTY
AND ASSETS |
|
| FIXED
CAPITAL EXPENDITURE |
|
| Operating
fixed assets |
12 |
480,153,120 |
471,940,645 |
|
| Capital
work in progress |
13 |
15,961,349 |
1,258,869 |
|
|
|
---------- |
---------- |
|
|
496,114,469 |
473,199,514 |
|
| Long
term deposits |
|
| and
deferred cost |
|
14 |
7,595,950 |
543,936 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and Spares |
|
15 |
31,174,365 |
33,076,733 |
|
| Stock
in trade |
|
16 |
266,354,874 |
204,107,599 |
|
| Trade
Debts |
|
17 |
62,333,233 |
42,819,994 |
|
| Advances
deposits, prepayments |
|
|
| &
other receivables |
|
18 |
18,136,875 |
22,300,222 |
|
|
|
|
| Income
tax refundable |
|
|
11,024,095 |
8,648,099 |
|
| Export
rebates and sales tax receivable |
19 |
18,487,258 |
27,181,130 |
|
| Bank
and Cash Balances |
20 |
3,270,469 |
2,966,303 |
|
|
|
---------- |
---------- |
|
|
|
410,781,169 |
341,100,080 |
|
|
---------- |
---------- |
|
|
914,491,588 |
814,843,530 |
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts |
|
|
|
| CHIEF
EXECUTIVE |
|
CHAIRMAN |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1998. |
|
|
|
Note |
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
| SALES |
|
21 |
543,994,962 |
606,092,371 |
|
| COST
OF SALES |
|
22 |
449,274,600 |
480,822,358 |
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT |
|
94,720,362 |
125,270,013 |
|
|
| OPERATING
EXPENSES |
|
| General
and administrative |
23 |
22,839,328 |
21,600,216 |
|
| Selling
and distribution |
24 |
4,313,107 |
5,251,085 |
|
|
|
---------- |
---------- |
|
|
|
27,152,435 |
26,851,301 |
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
67,567,927 |
98,418,712 |
|
| Financial
charges |
|
25 |
57,439,770 |
61,826,167 |
|
| Other
charges |
|
26 |
547,107 |
1,742,502 |
|
| Other
income |
|
27 |
(813,983) |
(920,415) |
|
|
|
---------- |
---------- |
|
|
57,172,894 |
62,648,254 |
|
| Profit
before taxation |
|
10,395,033 |
35,770,458 |
|
| Taxation
- current |
|
2,112,537 |
- |
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
8,282,496 |
35,770,458 |
|
| Unappropriated
profit |
|
| brought
forward |
|
92,819,388 |
57,048,930 |
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
101,101,884 |
92,819,388 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts |
|
|
CHIEF EXECUTIVE |
CHAIRMAN |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 1998. |
|
|
1998 |
1997 |
|
|
Rupees |
Rupees |
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
| Profit
after taxation |
|
8,282,496 |
35,770,458 |
|
|
|
|
| Adjustments
for |
|
|
|
| Depreciation
& amortization |
|
48,418,595 |
48,269,389 |
|
| Gain/(loss)
on disposal of fixed Assets |
|
- |
40,324 |
|
|
|
48,418,595 |
48,309,713 |
|
|
---------- |
---------- |
|
|
| Net
cash in flows |
|
56,701,091 |
84,080,171 |
|
|
|
|
| CASH
FLOWS FROM WORKING |
|
| CAPITAL
CHANGES |
|
|
| (Increase)/Decrease
in current assets |
|
|
| Stores,
spare parts & loose tools |
|
1,902,368 |
(5,633,946) |
|
| Stock-in-trade |
|
(62,247,275) |
(72,783,081) |
|
| Trade
debts |
|
(19,513,239) |
(10,555,463) |
|
| Advances,
deposits, prepayments |
|
|
|
| &
other receivables |
|
10,481,223 |
(16,406,111) |
|
|
---------- |
---------- |
|
|
(69,376,923) |
(105,378,601) |
|
| Increase/(Decrease)
in current liabilities |
(38,967,918) |
49,865,938 |
|
|
| Creditors,
accrued and other liabilities |
(38,967,918) |
49,865,938 |
|
|
---------- |
---------- |
|
| Net
cash outflows from working capital changes |
(108,344,841) |
(55,512,663) |
|
|
---------- |
---------- |
|
| Cash
flow from operating activities |
|
(51,643,750) |
28,567,508 |
|
|
========== |
========== |
|
|
|
1998 |
1997 |
|
|
Rupees |
Rupees |
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
| Long
term deposits & deferred cost |
|
(7,870,205) |
(56,000) |
|
| Proceeds
from disposal of operating fixed assets |
- |
100,000 |
|
| Fixed
capital expenditure |
|
(55,812,879) |
(30,809,686) |
|
| Capital
work in progress |
|
(14,702,480) |
- |
|
|
---------- |
---------- |
|
| Net
cash flows from investing activities |
(78,385,564) |
(30,765,686) |
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
| Issue
of share capital |
|
100,000,000 |
- |
|
| Long
term directors loan |
|
(9,875,982) |
(2,026,663) |
|
| Increase
in short term finances |
|
79,214,093 |
20,280,262 |
|
| Inflow
and outflow of long term loans and leases-net |
(39,004,631) |
(13,328,122) |
|
|
---------- |
---------- |
|
| Net
cash flows from financing activities |
130,333,480 |
4,925,477 |
|
|
---------- |
---------- |
|
|
51,947,916 |
(25,840,209) |
|
|
========== |
========== |
|
|
|
|
| Net
increase/(decrease) in cash and cash equivalents |
304,166 |
2,727,299 |
|
| Cash
& cash equivalents at the beginning of the year |
2,966,303 |
239,004 |
|
|
---------- |
---------- |
|
| Cash
& cash equivalents at the year end |
|
3,270,469 |
2,966,303 |
|
|
========== |
========== |
|
| CHIEF
EXECUTIVE |
|
CHAIRMAN |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1998. |
|
|
| 1.
STATUS OF THE COMPANY |
|
|
| The
Company was incorporated in Pakistan under the Companies Ordinance, 1984 and
is |
|
| listed
at Karachi Stock Exchange. The Company operates textile processing Unit and
is also |
|
| engaged
in exports. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
ACCOUNTING CONVENTION |
|
|
| These
accounts have been prepared under the historical cost convention. |
|
| 2.2
GRATUITY |
|
|
| The
Company operates an unfunded gratuity scheme for non-managerial employees |
|
| and
records the same on as and when paid basis. However, total liability under
this |
|
| head
as on June 30, 1998 works out to Rs. 847,536/:. |
|
|
| 2.3
TAXATION |
|
|
| Current |
|
| The
charge for current taxation is based on profit as adjusted for tax purposes
and |
|
| also
considering chargeability of export sales u/s 80CC of the Income Tax
Ordinance, |
|
| 1979. |
|
|
| Deferred |
|
| No
provision for deferred taxation has been made in these accounts as the timing |
|
| differences
relating to accelerated tax depreciation allowances are irrelevant or these |
|
| are
not likely to reverse in foreseeable future. The timing differences are
irrelevant |
|
| due
to the fact that major sales of the company are exports which are covered
under |
|
| section
80CC of the Income Tax Ordinance, 1979. |
|
|
| 2.4
FIXED ASSETS |
|
|
| Fixed
assets except leasehold land are stated at cost less accumulated
depreciation. |
|
| Depreciation
is charged to income on reducing balance method at the rates specified |
|
| in
depreciation schedule whereby the cost of an asset is written off over its
estimated |
|
| useful
life. Depreciation is charged for full year on assets capitalised during a
year. |
|
| No
depreciation is charged on assets sold/disposed off during the year. |
|
|
| 2.5
ACCOUNTING FOR LEASE |
|
|
| The
Company records assets acquired under finance lease and related liabilities
at |
|
| lower
of present value of minimum lease payment under the lease agreement and |
|
| fair
value of assets. Finance charges are allocated to accounting period in a
manner |
|
| so
as to produce a constant periodic rate of charge on the outstanding
liability. |
|
| Depreciation
is provided at the rates specified in the depreciation schedule. |
|
|
| 2.6
DEFERRED COSTS |
|
|
| These
represent share floatation expenses which are being amortised over a period |
|
| of
five years commencing from the year 1998. |
|
|
| 2.7
STORES AND SPARES |
|
|
| These
are valued at weighted average cost. |
|
|
| 2.8
STOCK-IN-TRADE |
|
|
| Stock
of raw, packing materials and finished goods are valued at lower of cost and |
|
| net
realisable value. Cost in relation to cloth in process represent cost of raw
material |
|
| and
applicable overheads. |
|
| Stock
in transit is stated at invoice value plus other charges incurred thereon. |
|
|
| 2.9
FOREIGN CURRENCY TRANSACTIONS |
|
|
| Foreign
exchange transactions have been recorded at the exchange rates prevailing |
|
| on
the date of transactions. Exchange gain or loss on realisation of export
bills is |
|
| included
in income currently. |
|
|
| 2.10
REVENUE RECOGNITION |
|
|
|
|
| Sales
are recorded on despatch of goods to customers. Income from processing is |
|
| recognized
on the performance of the services. |
|
|
|
1998 |
1997 |
|
|
Rupees |
Rupees |
|
|
| 3.
ISSUED, SUBSCRIBED AND PAID-UP CAPITAL |
|
|
| 12,000,000 |
Ordinary shares of Rs.
10/- |
|
| each
fully paid in cash |
|
120,000,000 |
120,000,000 |
