| Husein Industries Limited |
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| Chairman
& Chief Executive |
|
| MR.
LATIF E. JAMAL |
|
|
| Directors |
|
| MR.
AZIZ L. JAMAL |
|
| MR.
RASHID L. JAMAL |
|
| MR.
MASRUR HASAN KHAN |
|
| MR.
AKHTAR WASIM DAR |
|
| MR.
JAWEED NIAZ |
|
| MR.
MOHAMMAD SAEED AKHTAR |
|
|
| Bankers |
|
| METROPOLITAN
BANK LIMITED |
|
| HABIB
BANK LIMITED |
|
| HABIB
BANK AG ZURICH |
|
|
| Auditors |
|
| A.F.
FERGUSON & CO. |
|
| Chartered
Accountants |
|
|
|
| Registered
Office |
|
| 6TH
FLOOR, JUBILEE INSURANCE HOUSE, |
|
| I.I.
CHUNDRIGAR ROAD, KARACHI. |
|
|
|
| Mills |
|
| LANDHI
INDUSTRIAL AREA, |
|
| KARACHI
- PAKISTAN |
|
|
|
|
|
| NOTICE
OF MEETING |
|
|
| The
47th Annual General Meeting of the Shareholders of Husein Industries Limited
will be held |
|
| within
Company's Mills premises at Plot No. HT-8, Landhi Industrial Area, Landhi,
Karachi on |
|
| Saturday
March 31, 2001 at 11:00 a.m. to transact the following business: |
|
|
|
|
| 1.
To confirm the minutes of the 46th Annual General Meeting held on March 31,
2000. |
|
|
|
|
| 2.
To receive and adopt the Directors' Report and the Audited Accounts of the
Company for |
|
| the
year ended September 30,2000. |
|
|
|
|
| 3.
To appoint Auditors for the year 2000-2001 and to fix their remuneration. |
|
|
| 4.
To approve the dividend as recommended by the directors. |
|
|
| 5.
To transact any other business with the permission of the Chair. |
|
|
|
|
|
By order of the Board |
|
|
|
|
|
|
|
|
|
MOHAMMED ANWAR KALUDI |
|
| Karachi:
March 5, 2001 |
|
Secretary |
|
|
| NOTES: |
|
|
| 1.
The Share Transfer Books of the Company will remain closed from March 24,
2001 to March |
|
| 31,
2001, both days inclusive. |
|
|
|
|
|
|
| 2.
A member entitled to attend and vote at this Meeting may appoint another
member as a |
|
| proxy
to attend and vote instead of him or her. Proxies, in order to be valid, must
be |
|
| deposited
at the Registered Office of the Company not later than 48 hours before the
meeting. |
|
|
|
|
| 3.
Members are requested to promptly notify change of address, if any. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| The
Directors are pleased to place before you the 47th Annual Report together
with the audited |
|
| accounts
of the Company for the year ended September 30, 2000 as well as the Auditors,
Report |
|
| thereon. |
|
|
| During
the year under review the Company made an after tax profit of Rs. 35,724,899
and after |
|
| adding
there to un-appropriated profit of Rs. 327,208 brought forward from last
year, the |
|
| appropriation
thereof is' tabulated as under: |
|
|
|
|
Rupees |
|
|
| Profit after tax |
|
|
35,724,899 |
|
|
| Un-appropriated
profit brought forward |
|
327,208 |
|
|
|
|
|
------------------ |
|
|
| Profit
available for appropriation |
|
36,052,107 |
|
|
|
|
|
|
|
|
| Appropriations |
|
|
|
|
| Transfer
to general reserve |
|
14,000,000 |
|
|
| Proposed
dividend @ 20% |
|
21,251,704 |
|
|
|
|
|
------------------ |
|
|
|
|
|
35,251,704 |
|
|
|
|
|
------------------ |
|
|
| Un-appropriated
profit carried forward |
|
800,403 |
|
|
|
|
|
========== |
|
|
| The
Directors are pleased to report that the overall performance of the Company
during the year |
|
| under
review was satisfactory. Despite difficult economic conditions persisting
throughout the |
|
| year
ended September 30, 2000 and global recession in export markets it is indeed
satisfying to |
|
| note
that the Company has posted after tax profit of Rs. 35.725 million which is
higher by 36.57% |
|
| over
the last year. |
|
|
| The
tough competition in the international markets makes very difficult for
Pakistani textile products |
|
| to
have a smooth sailing. Yet, the company managed to maintain its export
portfolio of value-added |
|
| products
reflective of customers satisfaction due to stringent quality control
exercised at all levels. |
|
| The
availability of cotton at reasonable prices, especially in the first half of
the year, has been |
|
| contributed
towards better results. |
|
|
| The
earnings per share for the year ended September 30, 2000 have been worked out
to Rs. 3.36 per |
|
| share
as against last year of Rs. 2.46 per share. |
|
|
| Subsequent
to the year end, Mr. Imtiaz Rasool, Director of the Company, submitted his
resignation |
|
| with
effect from December 26, 2000. Mr. Mohammad Saeed Akhtar has been appointed
as Director |
|
| in
his place. The Board of Directors wish to place on record appreciation of
services rendered by |
|
| the
outgoing director and welcome the new director. |
|
|
| M/s.
A. F. Ferguson & Co., the retiring auditors, being eligible,- offer their
services for the ensuing |
|
| year. |
|
|
| The
pattern of shareholdings as at September 30, 2000 appears at page No. 23 |
|
|
| The
Directors wish to place on record their appreciation for the services
rendered by the employees |
|
| (1,378)
of the Company. |
|
|
|
|
|
On behalf of the Board |
|
|
|
|
|
|
|
|
|
Latif E. Jamal |
|
| Karachi:
March 5, 2001 |
|
Chairman & Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Husein Industries Limited as at
September 30, 2000 |
|
| and
the related profit and loss account, statement of changes in equity 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. |
|
|
| It
is the responsibility of the Company's management to establish and maintain a
system of internal |
|
| control,
and prepare and present the above said statements in conformity with the
approved |
|
| accounting
standards and the requirements of the Companies Ordinance, 1984. Our
responsibility |
|
| is
to express an opinion on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These |
|
| standards
require that we plan and perform the audit to obtain reasonable assurance
about whether |
|
| the
above said statements are free of any material misstatement. An audit
includes examining, on a |
|
| test
basis, evidence supporting the amounts and disclosures in the above said
statements. An audit |
|
| also
includes assessing the accounting policies and significant estimates made by
management, as |
|
| well
as, evaluating the overall presentation of the above said statements. We
believe that our audit |
|
| provides
a reasonable basis for our opinion and, after due verification, 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, statement of changes in equity
and cash flow |
|
| statement
together with the notes forming part thereof conform with the approved
accounting |
|
| standards
as applicable in Pakistan, and, 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 September 30, 2000 and of the profit,
changes in |
|
| equity
and its cash flows for the year then ended; and |
|
|
|
| (d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 (XVIII |
|
| of
1980), was deducted by the Company and deposited in the Central Zakat Fund
established |
|
| under
section 7 of that Ordinance. |
|
|
|
|
|
|
A.F. FERGUSON & CO. |
|
| Karachi:
March 5, 2001 |
|
Chartered Accountants |
|
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
capital 15,000,000 |
|
| ordinary
shares of Rs. 10 each |
|
|
150,000,000 |
150,000,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| Issued,
subscribed and paid up capital |
3 |
106,258,520 |
106,258,520 |
|
|
|
|
|
| Reserves
- capital |
|
|
33,857,517 |
33,857,517 |
|
| - revenue |
|
135,142,483 |
121,142,483 |
|
|
|
------------------ |
------------------ |
|
|
|
|
169,000,000 |
155,000,000 |
|
|
| Unappropriated
profit |
|
800,403 |
327,208 |
|
|
|
------------------ |
------------------ |
|
|
|
|
169,800,403 |
155,327,208 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
276,058,923 |
261,585,728 |
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
| SUBJECT
TO FINANCE LEASE |
|
4 |
4,556,227 |
6,837,274 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
| Staff
retirement gratuities |
|
|
12,487,556 |
10,369,948 |
|
|
|
|
| CURRENT
LIABILITIES AND PROVISIONS |
|
| Current
portion of long-term liabilities |
5 |
2,281,047 |
13,181,813 |
|
| Short-term
finances |
|
6 |
553,037,934 |
578,865,448 |
|
| Creditors,
accrued and other liabilities |
7 |
234,728,923 |
207,161,072 |
|
| Taxation |
|
|
12,373,836 |
7,892,107 |
|
| Proposed
Final dividend |
|
|
21,251,704 |
15,938,778 |
|
|
|
|
------------------ |
------------------ |
|
|
|
823,673,444 |
823,039,218 |
|
| CONTINGENCIES
AND COMMITMENTS |
8 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,116,776,150 |
1,101,832,168 |
|
|
|
|
========== |
========== |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
assets |
|
9 |
307,685,855 |
273,058,805 |
|
| Capital stores |
|
|
52,418 |
52,418 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
307,738,273 |
273,111,223 |
|
| LONG-TERM
INVESTMENTS |
|
10 |
29,525 |
29,525 |
|
| LONG-TERM
DEPOSITS |
|
|
2,960,006 |
2,689,231 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
11 |
42,759,949 |
38,915,638 |
|
| Stock-in-trade |
|
12 |
285,347,858 |
281,563,303 |
|
| Trade debts |
|
13 |
360,176,396 |
385,996,693 |
|
| Loans,
advances, deposits, prepayments |
|
|
| and
other receivables |
|
14 |
109,269,493 |
107,316,722 |
|
| Balances
with banks on current accounts |
|
8,494,650 |
12,209,833 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
806,048,346 |
826,002,189 |
|
|
------------------ |
------------------ |
|
|
|
|
1,116,776,150 |
1,101,832,168 |
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Latif E. Jamal |
|
Aziz L. Jamal |
|
|
Chairman &-Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
|
| Sales |
|
15 |
1,188,613,751 |
1,214,898,611 |
|
| Cost
of goods sold |
|
16 |
1,026,932,066 |
1,055,759,952 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
161,681,685 |
159,138,659 |
|
| Selling
and other expenses |
|
18 |
43,412,230 |
33,596,565 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
118,269,455 |
125,542,094 |
|
| Other income |
|
19 |
693,470 |
1,701,996 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
118,962,925 |
127,244,090 |
|
|
|
|
| Financial
charges |
|
20 |
57,912,704 |
91,685,125 |
|
| Other charges |
|
21 |
6,621,281 |
2,201,229 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
64,533,985 |
93,886,354 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
54,428,940 |
33,357,736 |
|
|
|
|
|
| Taxation |
|
23 |
18,704,041 |
7,200,000 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
35,724,899 |
26,157,736 |
|
|
| Profit
brought forward |
|
|
327,208 |
350,733 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
36,052,107 |
26,508,469 |
|
|
| Appropriations: |
|
| Transfer
to revenue reserve - General |
|
14,000,000 |
10,242,483 |
|
| Proposed
dividend @ 20% |
|
|
21,251,704 |
15,938,778 |
|
| (1999:
Rs. 1.50 per share) |
|
|
|
|
|
|
|
|
35,251,704 |
26,181,261 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
800,403 |
327,208 |
|
|
|
|
========== |
========== |
|
| Earnings
per share |
|
24 |
3.36 |
2.46 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Latif E. Jamal |
|
Aziz L. Jamal |
|
|
Chairman &-Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
Capital reserves |
|
|
|
Share |
Tax |
Share |
Revenue |
Unappropriated |
Total |
|
|
Capital |
holiday |
premium |
reserve - |
profit |
|
|
|
|
general |
|
|
|
|
|
|
|
|
Rupees |
|
|
| Balance
at September |
|
| 30, 1998 |
|
106,258,520 |
7,040,000 |
26,817,517 |
110,900,000 |
350,733 |
251,366,770 |
|
|
|
|
| Profit
for the year |
-- |
-- |
-- |
-- |
26,157,736 |
26,157,736 |
|
| Dividends |
|
-- |
-- |
-- |
-- |
(15,938,778) |
(15,938,778) |
|
| Transfer
to general reserve |
-- |
-- |
-- |
10,242,483 |
(10,242,483) |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
at September |
|
|
| 30,
1999/October 1, 1999 |
106,258,520 |
7,040,000 |
26,817,517 |
121,142,483 |
327,208 |
261,585,728 |
|
|
|
|
|
| Profit
for the year |
-- |
-- |
-- |
-- |
35,724,899 |
35,724,899 |
|
| Dividends |
|
-- |
-- |
-- |
-- |
(21,251,704) |
(21,251,704) |
|
| Transfer
to general reserve |
-- |
-- |
-- |
14,000,000 |
(14,000,000) |
-- |
|
| Balance
at September |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| 30, 2000 |
|
106,258,520 |
7,040,000 |
26,817,517 |
135,142,483 |
800,403 |
276,058,923 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Latif E. Jamal |
|
Aziz L. Jamal |
|
|
Chairman &-Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Cash
generated from operations |
|
25 |
203,446,320 |
316,715,555 |
|
| Staff
gratuity paid |
|
|
(756,781) |
(1,665,162) |
|
| Financial
charges paid |
|
|
(69,937,610) |
(114,000,778) |
|
| Taxes paid |
|
|
(14,222,312) |
(10,555,374) |
|
| Long-term
deposits - net |
|
|
(270,775) |
(840,329) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
118,258,842 |
189,653,912 |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Fixed
capital expenditure |
|
(70,574,924) |
(91,531,111) |
|
| Sale
proceeds of fixed assets |
|
589,013 |
500,829 |
|
| Dividend
received |
|
4,789 |
2,916 |
|
|
|
------------------ |
------------------ |
|
| Net
cash outflow from investing activities |
|
(69,981,122) |
(91,027,366) |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Repayment
of redeemable capital |
|
(11,958,354) |
(18,003,213) |
|
| Repayment
of liability under finance lease |
|
(1,223,459) |
(121,037) |
|
| Short
- term borrowings less repayments |
|
(76,675,000) |
158,689,000 |
|
| Dividends paid |
|
(12,983,576) |
(8,699,490) |
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow)/inflow from financing activities |
|
(102,840,389) |
131,865,260 |
|
|
|
|
------------------ |
------------------ |
|
| Net
(decrease)/increase in cash and cash equivalents |
(54,562,669) |
230,491,806 |
|
| Cash
and cash equivalents at beginning of the year |
|
6,103,385 |
(224,388,421) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at end of the year |
26 |
(48,459,284) |
6,103,385 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Latif E. Jamal |
|
Aziz L. Jamal |
|
|
Chairman &-Chief Executive |
|
Director |
|
|
|
| NOTES
TO AND FORMING PART OF THE ACCOUNTS |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
| 1.
LEGAL STATUS AND OPERATIONS |
|
|
| The
Company was incorporated in Pakistan on May 25, 1953 as a public limited
company |
|
| under
the name Husein Textile Mills Limited, which was changed to Husein Industries |
|
| Limited
in 1964. Its shares are listed on Karachi and Lahore Stock Exchanges in
Pakistan. |
|
| The
major activities of the Company are textile manufacturing, producing cotton
and |
|
| polyester
yarn, cloth and garments which are marketed within and outside Pakistan. |
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| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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| 2.1
Basis of Preparation |
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| These
accounts have been prepared in accordance with the requirements of the |
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| Companies
Ordinance, 1984 and International Accounting Standards as applicable in |
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| Pakistan. |
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| 2.2
Accounting convention |
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| These
accounts have been prepared under the historical cost convention. |
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| 2.3
Staff retirement gratuities |
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| The
Company operates an unfunded gratuity scheme covering all employees whose
period |
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| of
service with the Company is twelve months or more. Provisions are made
annually on |
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| the
basis of last drawn basic salary and cost of living allowance for each
completed year |
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| of
service to cover obligations under the scheme. The actuarial valuation to
determine the |
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| liability
in accordance with requirements of IAS-19 (Revised 1998) is in progress. The |
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| consequential
financial effect on the accounts cannot be ascertained at present. |
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| 2.4 Taxation |
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| Current |
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| Provision
for current taxation is based on taxable income after taking into account tax
credits |
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| and
tax rebates available, if any. |
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| The
Company accounts for deferred taxation on all major timing differences using
the liability |
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| method. |
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| 2.5
Tangible fixed assets and depreciation |
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| Operating
fixed assets except freehold land are stated at cost less accumulated
depreciation. |
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| Freehold
land and Capital work-in-progress are stated at cost. |
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| Depreciation
is charged to income applying the diminishing balance method except |
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| leasehold
land on which depreciation is charged to income applying the straight line |
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| method.
Depreciation on additions during the year is charged at half the applicable
rate |
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| while
no depreciation is charged on deletions during the year. Gains and losses on |
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| disposal
of assets are included in income currently. Maintenance and normal repairs
are |
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| charged
to income as and when incurred. Major renewals and improvements are
capitalised |
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| and
the assets so replaced, if any, are retired. |
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| Assets
subject to finance lease are stated at the lower of present value of minimum
lease |
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| payments
under the lease agreements and the fair value of the assets. The related
obligations |
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| under
the leases are accounted for as liabilities. Assets acquired under finance
lease are |
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| depreciated
over the lease term of the assets. |
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| 2.6 Investments |
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| These
are stated at cost except where a permanent diminution in value is deemed to
have |
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| occurred
in which case these are stated at estimated realisable value. |
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| 2.7
Stores and spares |
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| These
are valued at average cost except items in transit which are stated at
invoice values |
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| plus
other charges paid thereon. |
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