Reliance Weaving Mills Limited - Annual Reports 2003

Reliance Weaving Mills Ltd.

Annual Report 2003

VISION STATEMENT

The company is interested to install complete textile finishing plant including bleaching,

dyeing, mercerizing, calendaring, folding, printing plant in the existing weaving units at

Multan to make it a complete composite unit, which can explore local and international market

of high value products. The Company would keep its emphasis on product and market

diversification, value addition and cost effectiveness. We want to fully equip the Company to

play a meaningful role on the sustainable basis in the economic development of the country.

MISSION STATEMENT

The mission of the Company is to operate state of the art textile plants capable of producing

yarn and fabrics.

The Company will conduct its operations prudently assuring customer satisfaction and will

provide profits and growth to its shareholders through:

* Manufacturing of yarn and fabrics as per the customer's requirements and

market demand.

* Exploring the global market with special emphasis on Europe and USA.

* Keeping pace with the rapidly changing technology by continuously balancing,

modernization and replacement (BMR) of plant and machinery.

* Enhancing the profitability by improved efficiency and cost controls.

* Recruiting, developing, motivating and retaining the personnel having

exceptional ability and dedication by providing them good working conditions,

performance based compensation, attractive benefit program and opportunity

for growth.

* Protecting the environment and contributing towards the economic strength of

the country and function as a good corporate citizen.

COMPANY INFORMATION

Board of Directors

Mr. Fawad Ahmed

(Chairman)

Mr. Fazal Ahmed

(Chief Executive Officer)

Mr. Faisal Mukhtar

Mrs. Ambreen Fawad

Mrs. Fatima Fazal

Mrs. Fadia Kashif

Mr. Farasat AN

(Nominee NIT)

Audit Committee

Mr. Fawad Ahmed

Chairman

Mr. Fazal Ahmed

Member

Mr. Faisal Mukhtar

Member

Mr. M. Sabir Bhatti

Secretary

Chief Financial Officer (CFO)

Mr. Iftikhar Mehmood

Company Secretary

Mr. Amanullah

Auditors

M/s. M. Yousuf Adil Saleem & Co.,

Chartered Accountants,

Abdali Road, Multan.

Share Registrar

M/s. Your Secretary

1020, 10th Floor, Uni Plaza

I.I. Chundrigar Road, Karachi.

Bankers

Habib Bank Limited

United Bank Limited

Union Bank of Pakistan Limited

National Bank of Pakistan

Muslim Commercial Bank Limited

Registered Office

Second Floor, Trust Plaza,

L.M.Q. Road, Multan. (Punjab) Pakistan.

Tel : (061)512031, 546238

Fax : (061) 51 1677, 584288

E-Mail : reliance.finance@fatima-group.com

mail@fatima-group.com

Mills • Weaving Units

Fazal Pur, Khanewal Road,

Multan. (Punjab) Pakistan.

Tel : (061)578183-4, 515154

Fax: (061)578185

Spinning Unit

Mukhtarabad, Chak Beli Khan Road,

Rawat (Rawalpindi)

Tel : (05777) 61 1579-81

Fax: (05777)611092

COMPANY PROFILE

Reliance Weaving Mills Limited (RWML) is part of the Fatima Group. Fatima Group established RWML on April

7, 1990 as a public limited company and obtained certificate for commencement of business on May 14, 1990.

Presently RWML has authorized and paid up Capital of Rs.400 million and Rs. 205.406 million respectively, listed at

Karachi and Lahore stock Exchanges and also inducted to Central Depository Company (C.D.C).

The principal business of the Company is manufacture and sale of cotton yarn and grey woven fabric. RWML

production capacity consists of two main segments, Weaving and Spinning; both are ISO - 9002 Certified. Today

Reliance Weaving Mills Limited is the 3rd largest weaving mills in Pakistan with modern and technologically

advanced greige weaving plants. The weaving units are situated at Multan and spinning unit at Rawalpindi. The

details are as under:

Weaving Units:

Weaving units are situated at Fazalpur, Khanewal Road, Multan.

WEAVING UNIT-1

Commenced its commercial production on May 01, 1993 with 96 Tsudakoma air jet weaving machines imported

from Japan along with modern auxiliary machinery to produce high quality cloth for export markets. Further an

additional 20 Tsudakoma air jet weaving machines from Japan were installed in 1999 coupled with yarn doubling

and twisting machines to produce value added fabrics. The installed production capacity of the unit-1 is

approximately 16.085 million meters perannum.

WEAVING UNIT-2

Weaving unit • 2 was set at a cost of about Rs. 500 million, comprising 108 Tsudakoma air jet weaving machines from

Japan along with modern auxiliary machinery to produce high quality cloth for export markets. The project started its

commercial production from October 01, 2001. During the year another 48 Air jet looms expansion plan in existing

weaving Unit # 2 has been implemented at a cost of 300.996 million which started its commercial production from

March, 2003 with the addition of these looms the production capacity of unit-2 has become 30.7 million meters per

annum.

The company has a captive power plant consisting of 3.5 MW capacity. The company has purchased two more

generating sets of 1.8 MW capacity which are under installation and by addition of these generators the company will

be able to produce its required power from in house sources by which the company will save power cost and

production losses.

Spinning Unit

The spinning unit of the RWML is located at Mukhtarabad, Rawat, District Rawalpindi in the province of Punjab. The

unit commenced commercial production on October 01,1999 with 14,400 spindles with a very good combination of

European and Japanese machinery with allied accessories. It produces high quality yarn for in house consumption

and for export markets. The installed capacity after conversion into 20/s count is approximately 4.849 million Kgs per

annum. The spinning unit is spread over an area of 36 acres.

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that 14th Annual General Meeting of Members of the Company "Reliance Weaving Mills

Limited" will be held on Saturday the January 31, 2004 at 11:00 a.m. at its registered office 2nd Floor Trust Plaza,

LM.Q. Road Multan, to transact the following business:-

1 To confirm the minutes of last Annual General Meeting held on March 31,2003.

2 To receive and adopt the Audited Account of the Company for the year ended September 30,2003,

together with Auditors'and Directors' Reports thereon.

3 To consider and approve payment of cash dividend @ 7.5% (seven and half percent) to all the share

holders as recommended by the Board of Directors.

4 To appoint the Auditors for the year ending September 30,2004 and to fix their remuneration.

5 To consider any other item with permission of the Chairman.

By order of the Board of Directors

Dated : 30th December2003 AMANULLAH

Place: Multan. (Company Secretary)

Notes:

Book Closure

The Share Transfer Books of the company will remain closed from January 22nd, 2004 to January 31 st, 2004 (both

days inclusive).

1 The Cash dividend will be paid to the members, whose names will appear in the register of the member as

at the close of business on January 21st, 2004. Transfers received in order by our Share Registrars, M/s.

Your Secretary, 1020, 10th Floor, Uni Plaza, I.I. Chundrigar Road, Karachi up to January 21st, 2004

maximum by 1.00 p.m. will be taken in the books.

2 A member eligible to attend and vote at the Meeting may appoint another member as his / her proxy to

attend, and vote instead of him/her. Proxies in order to be effective must be received by the Company at

the Registered Office not later than 48 hours before the time for holding the meeting in the working hours.

3 Any individual beneficial owner of C.D.C. entitled to attend and vote at this meeting must bring his / her

identity and in case of proxy must inclose an attested copy of his / her National Identity Card (NIC) or

Passport. Representatives of corporate members should bring the usual documents required for such

purposes.

4 Members are requested to notify any changes in their addresses immediately.

DIRECTORS' REPORT TO THE MEMBERS

For the year Ended September 30,2003

Assalam-o-Alaikum

am pleased to present the 14th Annual Report along with annexed Profit & Loss Account, Balance Sheet, Cash

Flow Statement and Statement of Changes in Equity together with Notes forming part thereof for the year ended

September 30, 2003. During the year under review, the Company has implemented an expansion project for its

weaving unit at a cost of Rs. 304 million, comprising 48 Tsudakoma air jet weaving machines from Japan along with

his addition, your Company attained capability to manufacture multiple varieties of fabrics with dobby design and

stretch fabrics.

MARKETING ACTIVITIES

Last year has been a frustrating year for global economic recovery. After the significant downtime in late 2001,

Drecipitated by the event of 9/11 and subsequent developments, the world economy was showing signs of recovery

juring first half of 2002. The optimism for global economic recovery largely dissipated during the second half of the

Year owing to a series of adverse developments, unfolded on the international economic scene.

These developments include several major corporate scandals and bankruptcies in the United States, resulting in

Bursting of equity market bubble, rising uncertainties in the run-up to war in Iraq causing oil prices to rise sharply, and

outbreak of SARS virus, badly affecting business environment in Asia. As a result, the world economic outlook

remained subdued, and global trade remained sluggish during the year 2002-3.

n spite of the prevailing market conditions, Allhamdolillah, your Company has achieved net sales of Rs. 2,244

million as compared to last year sales of Rs. 2,032 million.

After the end of the transitional period of ten years of WTO, all quantitative restrictions on export and import of

Textiles and clothing will be eliminated from 1st January, 2005. This would have a profound impact on our

Dredominant textile sector.

COTTON CRISES

Even at this point of picking of the cotton crop there is enormous confusion over what the actual production will be.

Panic and confusion have lifted cotton prices to all time highs, yet the Government has done very little till now to

affectively deal with the problem. Continued damage to the textile sector because of high cotton prices is likely to

affect growth in export and GDP as well as the employment level in the industry.

PRODUCTION OPERATIONS

During the year under review the spinning plant having an installed capacity of 4.850 million Kgs (converted into

20/s) of yarn per annum produced 4.124 million Kgs (converted into 20/s) of yarn as against 4.203 million Kgs

(converted into 20/s) during the previous year.

The weaving unit # 1 consisting of 116 looms having an installed capacity of 16.085 million meters of cloth per annum

produced 16.065 million meters of cloth as compared to production of 17.041 million meters in the previous year.

Commercial production of the newly installed weaving machines consisting of 48 iooms in weaving unit # 2 having

an installed capacity of 9.05 million meters of cloth per annum started from March, 2003. Now, with this addition,

new weaving unit consists of 156 looms having proportionate installed capacity of 26.007 million meters of cloth per

annum had produced 25.268 million meters of cloth as compared to production of 21.797 million meters in the

previous year from 108 looms.

The products of the Company are known in domestic as well as international market for high quality and are being

preferred by quality conscious cloth manufacturers and dyers. Your management adhered to its policy of procuring

the best quality raw materials from the renowned suppliers.

FINANCIAL PERFORMANCE

During the year under review your Company has recorded sales of Rs. 2,244 million as against sales of Rs. 2,032

million during the previous year. The gross profit earned during the year under review was Rs. 289 million as against

Rs. 311 million earned during the previous year. Your Company achieved profit before tax of Rs.109 million during

the year under review as against Rs. 75 million earned during the previous year. After providing for corporate taxes

the Company earned profit after tax for the year of Rs. 93 million as against Rs. 54 million during the previous year.