| Ishaq Textile Mills Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| LIST
OF DIRECTORS |
|
| NOTICE
OF MEETING |
|
| DIRECTORS'
REPORT |
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| STATEMENT
OF CHANGES IN EQUITY |
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| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| NOTES
TO THE ACCOUNTS |
|
| PATTERN
OF SHAREHOLDINGS |
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|
|
| LIST
OF DIRECTORS |
|
|
| CHAIRMAN: |
|
| MR.
MUHAMMAD ARSHAD |
|
|
| CHIEF
EXECUTIVE: |
|
| MR.
N1SAR AHMAD SHEIKH |
|
|
| DIRECTORS: |
|
| MR.
MUHAMMAD SAEED SHEIKH |
|
| MR.
M. ANWAR SAJJAD |
|
| MR.
AMJAD SAEED |
|
| MR.
SHAHZAD AHMAD |
|
| MR.
HASSAN MEHMOOD (NIT) |
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|
| AUDITORS: |
|
| M.
YOUSUF ADIL SALEEM & CO., |
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| CHARTERED
ACCOUNTANTS |
|
|
| BANKERS: |
|
| HABIB
BANK LIMITED |
|
| FAYSAL
BANK LIMITED |
|
| EMIRATES
BANK INTERNATIONAL |
|
| ASKARI
COMMERCIAL BANK LIMITED |
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| REGISTERED
OFFICE AND |
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| SHARES
DEPARTMENT: |
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| 404/405,
4TH FLOOR, BUSINESS CENTRE, |
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| DUNALLY
ROAD, |
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| KARACHI. |
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| FACTORY: |
|
| SHEIKHUPURA
ROAD, |
|
| TEHSIL
JARANWALA, |
|
| D1STT.
FAISALABAD. |
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|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the 19th Annual General Meeting of ISHAQ
TEXTILE MILLS LIMITED will |
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| be
held at Room No. 25-B, 4th Floor, Textile Plaza, M.A. Jinnah Road, Karachi on
31st March, 2001 at 10:00 |
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| A.M.
to transact the following business. |
|
|
| 1.
To confirm the minutes of the 18th Annual General Meeting held on March 31st
2000. |
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|
|
|
| 2.
To receive, consider and adopt the audited accounts for the year ended
September 30. 2000 together |
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| with
the Auditors'' and Directors' reports thereon. |
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|
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| 3.
To approve the payment of cash dividend @ 12.50% (Rs.1.25 per share) on the
ordinary share capital |
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| of
the Company as recommended by the board of directors. |
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|
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| 4.
To appoint Auditors for the year 2000-2001 and fix their remuneration. The
present Auditors M/S |
|
| M.
Yousuf Adil Saleem & Co., Chartered Accountants, being eligible have
offered themselves for |
|
| reappointment. |
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|
|
|
|
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| 5.
To transact any other business with the permission of the chair. |
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By Order of the Board |
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| KARACHI: |
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|
(MIAN MUHAMMAD TARIQ) |
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| Dated:
February 28th, 2001 |
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|
Company Secretary |
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|
| NOTES |
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|
| 1.
The share transfer books of the Company will remain closed from March 24th
2001 to 2nd April 2001 |
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| (both
days inclusive). Transfer received in order with the registered office at
404-405, 4th Floor. |
|
| Business
Centre, Karachi by the close of business hours on March 22nd, 2001 will be
treated in time |
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| for
disbursement of dividend. |
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|
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| 2.
A member entitled to attend and vote at the general meeting is entitled to
appoint another member as |
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| proxy.
Proxies must be received in order to effective at the registered office of
the Company not less |
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| than
48 hours before the time for the meeting. |
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|
|
|
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| 3.
Shareholders are requested to promptly notify the Company of change in their
addresses. |
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|
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| DIRECTORS'
REPORT TO THE SHARE HOLDERS |
|
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| The
Directors of your Company feel pleasure in submitting 19th Annual Report
together with the audited |
|
| accounts
of the Company for the year ended September 30, 2000. |
|
|
| FINANCIAL
RESULTS |
|
|
1999-2000 |
1998-1999 |
|
|
| Operating profit |
|
|
61,363,615 |
71,376,434 |
|
| Less
financial charges |
|
37,004,087 |
50,093,111 |
|
|
|
------------------ |
------------------ |
|
|
|
24,359,528 |
21,283,323 |
|
|
|
|
|
| Provision
for taxation |
|
12,438,785 |
5,351,000 |
|
| Other charges |
|
1,151,715 |
1,078,838 |
|
|
|
------------------ |
------------------ |
|
|
|
13,590,500 |
6,429,838 |
|
|
|
------------------ |
------------------ |
|
| Profit
for the year |
|
10,769,028 |
14,853,485 |
|
| Un-appropriated
profit brought forward |
|
106,131,371 |
110,597,886 |
|
|
|
------------------ |
------------------ |
|
| Available
for appropriation |
|
116,900,399 |
125,451,371 |
|
|
|
|
|
| APPROPRIATION |
|
| Cash
dividend paid @ 7.5% for 1997-98 |
|
-- |
7,245,000 |
|
| Proposed
cash dividend @ 12.50% (1999 12.50%) |
|
12,075,000 |
12,075,000 |
|
|
|
|
------------------ |
------------------ |
|
| Un-appropriated
profit carried forward |
|
104,825,399 |
106,131,371 |
|
|
|
|
========== |
========== |
|
| Earning
per share |
|
1.11 |
1.54 |
|
|
|
|
|
========== |
========== |
|
|
| REVIEW
OF OPERATING RESULTS |
|
| During
the period under review the Sales were Rs.742.776 Million as compared to
Rs.847.770 Million |
|
| last
year. Similarly Gross Profit is Rs.103.409 Million (13.92%) as compared to
Rs.116.979 Million |
|
| (13.80%)
in the previous year. There is a decrease in sales during the period under
review due to |
|
| replacement
of old model Sulzer looms. By the Grace of Al-Mighty ALLAH the new project of
72 AIR |
|
| JET
looms has successfully started production. Further LCs have also been
established for new Sizing |
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| machine
to enhance the back process as well. |
|
|
| FUTURE
PROSPECTS |
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| The
Management is hopeful that new addition in Weaving Unit of the Company will
give the Company |
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| the
competitive edge it requires to compete in the international market and will
eventually add to the |
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| profitability
of the Company. |
|
|
| DIVIDEND |
|
| The
directors of your Company are pleased to recommend a cash dividend @ 12.50%
(Rs. 1.25 per |
|
| Share)
for the year. |
|
|
| AUDITORS |
|
| The
present auditors M/S M. Yousuf Adil Saleem & Co., Chartered Accountants
retire and being |
|
| eligible,
offer themselves for reappointment. |
|
|
| PATTERN
OF SHAREHOLDING |
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| The
pattern of shareholding is attached to this report. |
|
|
| ACKNOWLEDGEMENT |
|
| The
board places on record its appreciation for loyalty and devotion to work, by
staff and workers of the |
|
| Company. |
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|
ON BEHALF OF THE BOARD |
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|
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|
| FAISALABAD. |
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|
|
|
(NISAR AHMAD SHEIKH) |
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| DATED:
FEBRUARY 28th, 2001 |
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|
Chief Executive |
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|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of ISHAQ TEXTILE
MILLS 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, |
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| 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 |
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| 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 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 was deducted |
|
| by
the Company and deposited in the Central Zakat Fund established under Section
7 of that |
|
| Ordinance. |
|
|
|
|
| Date:
28th February, 2001 |
|
M. YOUSUF ADIL SALEEM & CO., |
|
| FAISALABAD: |
|
|
CHARTERED ACCOUNTANTS |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
NOTE |
Rupees |
Rupees |
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorised
Capital |
|
| 10,000,000
Ordinary shares of Rs. 10/- each |
|
100,000,000 |
100,000,000 |
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid up capital |
3 |
96,600,000 |
96,600,000 |
|
| Capital
reserve-share premium |
|
|
17,250,000 |
17,250,000 |
|
| Unappropriated
profit |
|
|
104,825,399 |
106,131,371 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
218,675,399 |
219,981,371 |
|
|
|
|
|
| LONG
TERM LOANS |
|
4 |
168,125,782 |
-- |
|
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
| Taxation |
|
|
19,200,000 |
19,200,000 |
|
| Staff
retirement gratuity |
|
|
7,596,051 |
5,735,584 |
|
| Due
to associated undertaking |
|
5 |
3,000,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
29,796,051 |
24,935,584 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term borrowings |
|
6 |
341,803,289 |
337,135,747 |
|
| Current
portion of long term |
|
|
|
| and
deferred liabilities |
|
7 |
52,404,218 |
13,843,900 |
|
| Creditors,
accrued and other liabilities |
8 |
142,775,223 |
97,159,214 |
|
| Taxation |
|
|
13,653,360 |
7,697,116 |
|
| Dividends |
|
9 |
12,629,395 |
15,386,838 |
|
|
|
------------------ |
------------------ |
|
|
|
|
563,265,485 |
471,222,815 |
|
| CONTINGENCIES
& COMMITMENTS |
10 |
-- |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
979,862,717 |
716,139,770 |
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes from 1 to 36 form an integral part of these accounts. |
|
|
|
|
NISAR AHMAD SHEIKH |
|
|
|
CHIEF EXECUTIVE |
|
|
|
| FIXED
CAPITAL EXPENDITURE |
|
| Operating
assets |
|
11 |
230,658,197 |
268,889,832 |
|
| Capital
work in progress |
|
12 |
224,364,550 |
682,451 |
|
| Un-allocated
capital expenditure |
|
13 |
12,701,315 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
467,724,062 |
269,572,283 |
|
|
| LONG
TERM DEPOSITS |
|
1,052,572 |
1,052,572 |
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores.
spares and loose tools |
|
14 |
16,527,461 |
11,895,019 |
|
| Stock in trade |
|
15 |
185,796,936 |
192,713,823 |
|
| Trade debts |
|
16 |
210,101,640 |
138,413,679 |
|
| Loans
and advances |
|
17 |
31,470,568 |
42,324,593 |
|
| Deposits
and prepayments |
|
18 |
2,732,247 |
1,742,667 |
|
| Other
receivables |
|
19 |
58,492,733 |
40,735,009 |
|
| Cash
and bank balances |
|
20 |
5,964,498 |
17,690,125 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
511,086,083 |
445,514,915 |
|
|
------------------ |
------------------ |
|
|
|
979,862,717 |
716,139,770 |
|
|
========== |
========== |
|
|
|
|
SHAHZAD AHMAD |
|
|
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
NOTE |
Rupees |
Rupees |
|
|
| Sales |
|
21 |
742,776,397 |
847,769,673 |
|
| Cost
of goods sold |
|
22 |
639,367,511 |
730,790,925 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
103,408,886 |
116,978,748 |
|
|
|
|
| Operating
expenses |
|
| Administration |
|
|
23 |
20,941,052 |
21,664,196 |
|
| Selling |
|
|
24 |
19,214,788 |
24,402,092 |
|
|
|
|
|
------------------ |
------------------ |
|
|
40,155,840 |
46,066,288 |
|
|
------------------ |
------------------ |
|
|
63,253,046 |
70,912,460 |
|
|
------------------ |
------------------ |
|
| Trading profit |
|
|
25 |
94,213 |
13,171 |
|
| Other income |
|
|
26 |
(1,983,644) |
450,803 |
|
|
------------------ |
------------------ |
|
|
(1,889,431) |
463,974 |
|
|
------------------ |
------------------ |
|
|
61,363,615 |
71,376.43 |
|
| Other charges |
|
|
|
| Financial |
|
27 |
37,004,087 |
50,093,111 |
|
| Workers'
profit participation fund |
|
1,151,715 |
1,078,838 |
|
|
------------------ |
------------------ |
|
|
38,155,802 |
51,171,049 |
|
|
------------------ |
------------------ |
|
| Net
Profit for the year before taxation |
|
23,207,813 |
20,204,485 |
|
| Taxation |
|
|
28 |
|
| Current |
|
12,438,785 |
5,351,000 |
|
|
------------------ |
------------------ |
|
| Net
Profit for the year after taxation |
|
10,769,028 |
14,853,485 |
|
| Unappropriated
profit brought forward |
|
106,131,371 |
110,597,886 |
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
116,900,399 |
125,451,371 |
|
|
|
|
| Appropriation |
|
| Cash
dividend @ 7.5% |
|
| Paid
for the year 1998 |
|
-- |
7,245,000 |
|
| Proposed
cash dividend @ 12.50 % (1999-12.50%) |
|
12,075,000 |
12,075,000 |
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
104,825,399 |
106,131,371 |
|
|
|
|
========== |
========== |
|
| Earnings
per share Basic |
|
32 |
1.11 |
1.54 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| The
annexed notes from 1 to 36 form an integral part of these accounts. |
|
|
|
NISAR AHMAD SHEIKH |
|
SHAHZAD AHMAD |
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
Share Capital |
Revenue
Reserves |
Total |
|
|
|
|
|
|
Capital Reserve |
Unappropriated |
|
|
|
|
Share Premium |
Profit |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
| Balance
as at Sep. 30, 1998 |
96,600,000 |
17,250,000 |
110,597,886 |
224,447,886 |
|
|
|
|
|
| Profit
for the year ended |
|
|
| Sep.
30, 1999 |
|
-- |
-- |
14,853,485 |
14,853,485 |
|
|
|
| Dividend |
|
-- |
-- |
(19,320,000) |
(19,320,000) |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at Sep. 30, 1999 |
96,600,000 |
17,250,000 |
106,131,371 |
219,981,371 |
|
|
| Profit
for the year ended |
|
| Sep.
30, 2000 |
|
-- |
-- |
10,769,028 |
10,769,028 |
|
| Dividend |
|
-- |
-- |
(12,075,000) |
(12,075,000) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at Sep. 30, 2000 |
96,600,000 |
17,250,000 |
104,825,399 |
218,675,399 |
|
|
========== |
========== |
========== |
========== |
|
|
| The
annexed notes from 1 to 36 form an integral part of these accounts. |
|
|
|
NISAR AHMAD SHEIKH |
|
|
SHAHZAD AHMAD |
|
|
CHIEF EXECUTIVE |
|
|
DIRECTOR |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| a)
CASH FLOW FROM OPERATING ACTIVITIES |
|
| Cash
generated from operations (Note 33) |
|
46,234,048 |
86,896,953 |
|
| Financial
charges paid |
|
(26,850,160) |
(53,961,698) |
|
| Taxes paid |
|
(6,008,541) |
(16,552,000) |
|
|
|
------------------ |
------------------ |
|
| Net
cash from operating activities |
|
13,375,347 |
16,383,255 |
|
|
========== |
========== |
|
|
| b)
CASH FLOW FROM INVESTING ACTIVITIES |
|
| Fixed
capital expenditure |
|
(243,983,455) |
(9,651,066) |
|
| Proceeds
from disposal of fixed assets |
|
20,099,995 |
4,744,115 |
|
| Long
term investment |
|
|
-- |
667,000 |
|
| Long
term deposit |
|
|
-- |
(200,000) |
|
| Mark-up
(paid) / recovered from associated under-takings |
(738,713) |
658,825 |
|
| Profit
on investment |
|
|
-- |
24,100 |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
Cash used in investing activities |
|
(224,622,173) |
(3,757,026) |
|
|
------------------ |
------------------ |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
| Long term loans |
|
208,530,000 |
-- |
|
| Due
to associated undertaking |
|
15,000,000 |
-- |
|
| Repayment
of long term loans |
|
(8,892,086) |
(26,676,213) |
|
| Lease liabilities |
|
(4,951,814) |
(5,593,251) |
|
| Increase
in short term borrowings - net |
|
4,667,542 |
37,451,076 |
|
| Payment
of dividends |
|
(14,832,443) |
(16,138,764) |
|
|
|
------------------ |
------------------ |
|
| Net
cash from / (used in) financing activities |
|
199,521,199 |
(10,957,152) |
|
|
|
------------------ |
------------------ |
|
| Net
(decrease) / increase in cash and bank balances (a+b+c) |
(11,725,627) |
1,669,077 |
|
| Cash
and bank balances at the beginning of the year |
17,690,125 |
16,021,048 |
|
|
|
------------------ |
------------------ |
|
| Cash
and bank balances at the end of the year |
|
5,964,498 |
17,690,125 |
|
|
========== |
========== |
|
|
|
NISAR AHMAD SHEIKH |
|
|
SHAHZAD AHMAD |
|
|
CHIEF EXECUTIVE |
|
|
DIRECTOR |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
| 1.
STATUS AND ACTIVITIES |
|
|
|
| The
Company is limited by shares incorporated in Pakistan on Feb. 14, 1982 and is
quoted at Stock |
|
| Exchanges
in Pakistan. The principal business of the Company is manufacture and sale of
yarn and |
|
| cloth
and trading. The mills is located at Tehsil Jaranwala, District Faisalabad in
the province of |
|
| Punjab. |
|
|
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
| 2.1
Accounting convention and basis of preparation |
|
| These
accounts have been prepared under "historical cost convention" and
in accordance with |
|
| International
Accounting Standards as applicable in Pakistan. |
|
|
|
|
| 2.
Staff retirement benefits |
|
|
|
| The
Company operates an unfunded gratuity scheme covering all its employees.
Provision is |
|
| made
annually to cover the liability under the scheme. |
|
|
| 2.3 Taxation |
|
|
|
|
|
|
|
| Current |
|
|
|
