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| NAKSHBANDI
INDUSTRIES LIMITED |
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| CONTENTS |
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| Company Information |
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| Notice of
Annual General Meeting |
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| Directors'
Report to the Members |
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| Year Wise
Statistical Summary |
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| Statement of
Compliance with the |
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| Code of
Corporate Governance |
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| Auditors'
Review Report to the Members on Statement of |
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| Compliance with
best Practices of Code of Corporate Governance |
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| Auditors' Report to the Members |
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| Balance
Sheet |
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| Profit and Loss Account |
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| Cash Flow Statement |
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| Statement of Changes in Equity |
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| Notes to the Financial
Statements |
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| Pattern of
Shareholding |
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| Pattern of
Shareholders As Required Under Code of Corporate Governance. |
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| COMPANY
INFORMATION |
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| Board of
Directors |
A. RAZAK HAJI SATTAR (Chairman) |
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HAMID HAJI LATIF |
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AMBREEN A. RAZAK |
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JUNAID HAJI LATIF |
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MUSTAFA A. RAZAK |
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MURTAZAA. RAZAK |
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MUHAMMAD ASIF A. GHAFFAR (Chief Executive) |
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| CHIEF FINANCIAL
OFFICER (CFO) |
MUHAMMAD HANIF |
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| COMPANY
SECRETARY |
RAUF DAWOOD |
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| AUDIT COMMITTEE |
A. RAZAK HAJI SATTAR - Chairman |
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HAMID HAJI LATIF -
Member |
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JUNAID HAJI LATIF -
Member |
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| REGISTERED
OFFICE |
H-23/4-A LANDHI, KARACHI. |
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| MILLS |
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H-23/4-A LANDHI, KARACHI. |
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| SHARE
DEPARTMENT |
177-A, S.M.C.H.S., Karachi. |
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| BANKERS |
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HABIB BANK LIMITED |
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BANK ALHABIB LIMITED |
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ASKARI COMMERCIAL BANK LIMITED |
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CITI BANK, N.A. |
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UNION BANK LIMITED |
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HABIB BANK AG ZURICH |
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BANK ALFALAH LIMITED |
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| AUDITORS |
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KHALI D MAJID RAHMAN SARFARAZ |
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RAHIM IQBAL RAFIQ |
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Chartered Accountants |
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180-A.S.M.C.H.S. |
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KARACHI. |
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| LEGAL ADVISOR |
M. ADAM PATEL & CO. |
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| NOTICE OF
ANNUAL GENERAL MEETING |
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| Notice is
hereby given to the Members that the 31st Annual General Meeting of the
shareholder of |
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| NAKSHBANDI
INDUSTRIES LIMITED will be held at the Registered
Office of the Company at H-23/4A, |
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| Landhi
Industrial Area, Karachi, on Thursday January 29, 2004 at 2:00 p.m. to
transact the following |
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| business: |
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| ORDINARY
BUSINESS |
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| 1. To receive, consider and adopt the
Directors' Report, Audited Accounts of the Company and Auditors |
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| Report thereon
for the year ended September 30, 2003. |
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| 2. To approve the payment of dividend @ 5%
as recommended by the Board. |
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| 3. To appoint Auditors for the Year
2003-2004 and to fix their remuneration. |
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| 4. To transact any other business with the
permission of the Chair. |
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| By Order of the
Board |
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| RAUF DAWOOD |
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| Karachi:
December 27, 2003
Company Secretary |
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| NOTES: |
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| 1. The Share Transfer Books of the Company
will remain closed from January 26, 2004 to February 6, |
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| 2004 (both days
inclusive). |
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| 2. A Member eligible to attend and vote at
this meeting may appoint another member as his/her proxy. |
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| Proxies in
order to be effective must be received by the Company at the Registered
Office of the |
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| Company duly
stamped and signed not later than 48 hours before the meeting. |
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| 3. Shareholders who have deposited their
shares into Central Depository Company of Pakistan Limited |
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| must bring
their original Identity Card (NIC) or Original Passport at the time of
attending the meeting. |
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| If proxies are
granted by such shareholders the same must be accompanied with attested
copies of |
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| the NIC or the
Passport of the beneficial owners. Representatives of corporate members
should |
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| bring the usual
documents required for such purpose. |
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| 4. A Proxy must be a member of the Company. |
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| 5. Shareholders are requested to immediately
notify the change of address if any. |
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| DIRECTORS'
REPORT TO THE MEMBERS |
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| Your directors
are presenting the 31st Annual Report together with the audited financial
statemei |
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| the Company for
the year ended September 30, 2003. |
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| OPERATING
RESULTS |
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| Operating
results are as follows: |
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Rupees |
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| Loss before
taxation |
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| (after charging
depreciation of Rs. 1 1 7,228,282) |
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-49,772,985 |
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| Provision for
taxation |
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| (after
adjustment of deferred taxation) |
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-1,900,000 |
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| Loss after
taxation |
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-51,672,985 |
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| Unappropriated
profit brought forward |
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1,278,113 |
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| Accumulated
loss |
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-50,394,872 |
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| Transfer from
General Reserve |
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51,000,000 |
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| Profit
available for appropriation |
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605,128 |
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| Appropriation: |
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| Proposed
Dividend (5%) |
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-250,858 |
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| Unappropriated
profit carried forward |
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354,270 |
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| Our capacity
remained substantially under-utilized due to recession in the international
market |
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| and the war in
Iraq region, resulting in loss due to depreciation charged on machinery and
other |
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| assets.
Although we exported more in quantitative terms compared to the prior year,
sales in terms |
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| of monetary
value could not be increased to a desired level due to continuous fall in
prices of |
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| finished
products as well as continuous depreciation of US dollar in the international
currency |
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| market. In
order to meet timely deliveries of confirmed orders for the subsequent
quarter, the |
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| Company had to
keep higher stocks as at the close of the accounting year. |
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| DIVIDEND |
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| Your directors
have recommended cash dividend @ 5%, i.e., Re. 0.50 per share. However, in
view |
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| of the current
losses, the directors and sponsors have waived dividend on their
shareholding. |
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| Despite loss
for the year under report, the dividend is being paid out of reserves to
benefit the |
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| minority
shareholders. |
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| FUTURE
PROSPECTS |
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| Due to
adjustments in marketing strategy, the sales have started picking up
substantially since October |
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| 2003. However,
due to steep rise in the prices of cotton and the resultant rise in prices of
cotton yarn |
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| in the domestic
as well as the international market since beginning of the current quarter,
cost of |
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| production has
gone up considerably putting pressure on the profitability. In order to
utilize the capacity |
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| and absorb the
fixed costs, the Company had to go for volume based products for supply to
large |
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| retailers.
Sufficient orders for supply of towels are in hand for subsequent quarters
and the directors are |
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| trying to get
increase in price of the products from January 2004 onwards and to get
additional orders |
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| at better
prices in order to counter the increase in cost of raw materials. |
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| RIGHT SHARES
ISSUE |
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| The right
shares issue, announced in July 2003, has been subscribed/completed by the
end of |
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| October 2003 in
accordance with the corporate regulations. Total equity to the extent of
Rs.90 |
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| million
(including Rs.60 million paid-up capital and Rs.30 million premium) has been
raised through |
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| the right issue
in order to avoid depletion of equity due to current losses and to maintain
the debt |
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| equity ratio. |
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| CORPORATE
GOVERNANCE |
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| The directors
have taken all necessary measures in order to comply with the Code of
Corporate Governance |
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| in accordance
with the listing rules of the stock exchange and state that: |
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| 1. The financial statements of the Company
for the year ended September 30, 2003 present |
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| fairly the
Company's state of affairs, the results of its operations, cash flows and
changes in |
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| equity. |
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| 2. The Company has maintained proper books
of accounts. |
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| 3. Appropriate accounting policies have
been consistently applied in preparation of the financial |
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| statements and
the accounting estimates are based on prudent judgement. |
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| 4. International Accounting Standards, as
applicable in Pakistan, have been followed in preparation |
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| of the
financial statements, and the departure, if any, has been adequately
disclosed. |
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| 5. The system of internal controls is
sound in design and has been effectively implemented and |
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| monitored. The
process of review will continue and any weaknesses in controls will be |
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| removed. |
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| 6. There are no significant doubts about
the Company's ability to continue as a going concern. |
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| 7. There is no material departure from the
best practices of corporate governance as defined in the |
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| listing
regulations of the stock exchange. |
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| 8. There are no outstanding dues on
account of taxes, levies and charges except of a normal and |
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| routine nature. |
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| Key operating
data for the last six years is annexed. |
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| The Audit
Committee comprises of: |
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| 1. Mr. A. Razak Haji Sattar (Chairman). |
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| 2. Mr. Hamid Haji Latif. |
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| 3. Mr. Junaid Haji Latif. |
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| BOARD OF
DIRECTORS |
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| The last
elections of the Board of Directors were held on March 27, 2002. |
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| During the year
under report, Ms. Shahnila Parekh (NIT nominee) resigned and the casual
vacancy was |
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| filled by
appointment of Mr. S. Hussain Aqa Naqvi (NIT nominee) in her place.
Subsequently, |
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| Mr. S. Hussain
Aqa Naqvi also resigned and Ms. Ambreen A. Razak was appointed as director |
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| to fill the
casual vacancy in his place. |
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| During the
year, four meetings of Board of Directors were held. Attendance by the
directors is as follows: |
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| DIRECTORS |
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ATTENDANCE |
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| Mr. A. Razak
Haji Sattar (Chairman) |
|
3 |
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| Mr. Muhammad
Asif A. Ghaffar (Chief Executive) |
|
4 |
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| Mr. Hamid Haji
Latif |
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|
4 |
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| Mr. Junaid Haji
Latif |
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|
2 |
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| Mr. Mustafa A.
Razak |
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4 |
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| Mr. Murtaza A.
Razak |
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|
4 |
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| Ms. Ambreen A.
Razak |
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|
0 |
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| Ms. Shahnila
Parekh (NIT nominee) (resigned) |
|
0 |
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| Mr. S. Hussain
Aqa Naqvi (NIT nominee) (resigned) |
|
1 |
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| AUDITORS |
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| The present
auditors, M/s Khalid Majid Rahman Sarfaraz Rahim Iqbal Rafiq, Chartered
Accountants, |
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| retire at the
forthcoming Annual General Meeting of the Company and offer themselves for
re-appointment. |
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| PATTERN OF
SHAREHOLDING |
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| The pattern of
shareholding as on September 30, 2003 is annexed to this report. |
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| ACKNOWLEDGEMENT |
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| The directors
appreciate the commitment, dedication and devotion of the employees towards
the |
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| Company. Ever
increasing emphasis on human resource development is always the priority. |
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| For and on
behalf of the Board |
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| A. RAZAK HAJI
SATTAR |
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| Karachi:
December 27, 2003.
CHAIRMAN |
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| YEAR WISE
STATISTICAL SUMMARY |
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| Year Ended
September 30, |
|
2003 |
2002 |
2001 |
2000 |
1999 |
1998 |
|
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| TOWEL
PRODUCTION SUMMARY |
|
|
|
|
|
|
|
|
| Towel (Kgs, 000) |
|
|
2,894 |
1,695 |
1,487 |
1,477 |
1,416 |
1,522 |
|
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| CLOTH
PRODUCTION SUMMARY |
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| Cloth (Sq.mtr,
000) |
|
- |
1,381 |
3,834 |
6,530 |
6,259 |
6,115 |
|
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| ASSETS EMPLOYED |
|
|
|
|
|
(Rs. |
in million) |
|
|
| Fixed Assets |
|
|
1,037.16 |
1 ,052.54 |
687.38 |
544.37 |
514.68 |
527.79 |
|
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| Investments,
Long term, |
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|
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|
|
|
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| Advances and
Deposits |
|
0.45 |
0.27 |
0.27 |
0.27 |
0.27 |
0.27 |
|
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| Current Assets |
|
|
1 ,091 .53 |
798.8 |
659.93 |
532.86 |
468.13 |
365.84 |
|
|
| Total Assets
Employed |
|
2,129.14 |
1,851.61 |
1,347.58 |
1,077.50 |
983.08 |
893.9 |
|
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| FINANCED BY |
|
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|
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| Shareholders'
Equity |
|
377.49 |
429.41 |
429.71 |
262.59 |
246.28 |
246.19 |
|
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| Long Term
Liabilities |
|
500.5 |
510 |
167.38 |
145.55 |
116.33 |
163.35 |
|
|
| Obligation
under Finance Lease |
|
13.09 |
25.39 |
30.41 |
0 |
0 |
0 |
|
|
| Deferred
Liabilities |
|
32.88 |
36.74 |
36.86 |
34.96 |
29.72 |
27.46 |
|
|
| Current
Liabilities |
|
1,205.18 |
850.07 |
683.21 |
634.42 |
590.75 |
456.9 |
|
|
| Total Funds
Invested |
|
2,129.14 |
1,851.61 |
1,347.57 |
1,077.52 |
983.08 |
893.9 |
|
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| TURNOVER &
PROFIT |
|
|
|
|
|
|
|
|
|
| Turnover (Net) |
|
|
1,147.10 |
1 ,094.98 |
1,185.62 |
1,067.19 |
968.61 |
824.87 |
|
|
| Gross Profit |
|
|
145.87 |
196.45 |
200.91 |
172.33 |
141.45 |
1 1 1 .39 |
|
|
| Operating Profit |
|
|
40.68 |
102.41 |
107.25 |
96.7 |
79.03 |
66.42 |
|
|
| (Loss)/Profit
Before Taxation |
|
-49.77 |
19.22 |
36.54 |
35.73 |
11.2 |
14.07 |
|
|
| (Lossj/Profit
After Taxation |
|
(51 .67) |
8.77 |
26.44 |
27.63 |
6.45 |
4.54 |
|
|
| Dividend |
|
|
0.25 |
9.08 |
13.62 |
11.35 |
6.35 |
4.54 |
|
|
| Transfer
(from)/to General Reserve |
|
(51 .00) |
0 |
12 |
16 |
0 |
0 |
|
|
| (Loss) Profit C/F |
|
|
0.35 |
1.28 |
1.58 |
0.76 |
0.47 |
0.38 |
|
|
| Financial
Charges |
|
90.46 |
83.31 |
68.71 |
58.75 |
67.19 |
52.28 |
|
|
| Earning per
share |
|
-2.85 |
0.48 |
1.46 |
3.04 |
0.71 |
0.5 |
|
|
| BREAKUP VALUE
OF SHARES |
|
|
|
|
( Amount ii n
Rupees) |
|
|
| No. of Shares |
|
|
18,155,280 |
18,155,280 |
18,155,280 |
9,077,640 |
9,077,640 |
. 9,077,640 |
|
|
| Capital + Rev.
Reserve |
|
377,484,290 |
429,408,133 |
429,711,631 |
262,568,416 |
246,284,574 |
246,188,867 |
|
|
| Breakup Value |
|
|
20.79 |
23.65 |
23.67 |
28.92 |
27.13 |
27.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| STATEMENT OF
COMPLIANCE WITH THE BEST PRACTICES OF |
|
|
|
|
|
|
|
|
