| Kashmir Polytex Limited |
|
|
|
|
|
|
|
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|
|
| Annual
Report 2000 |
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| CONTENTS |
|
|
| Company
information |
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern of Shareholding |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS: |
|
| Mr. Mohammed Ashraf Khan |
Chief Executive |
|
| Mr.
Farooq Khan |
|
| Mr.
Nisar Husain Virani |
|
| Mr.
Mohammed Akram |
|
| Dr.
Mrs. Yasmin Ashraf |
|
| Mst.
Azra Khan |
|
| Mrs.
Harmeen Ara Hashmi |
|
|
| SECRETARY: |
|
| Mr.
Shoaib Abdullah |
|
|
| BANKERS: |
|
| National
Bank of Pakistan |
|
| Bank
AI-Habib Limited |
|
| Industrial
Development Bank of Pakistan |
|
|
| AUDITORS: |
|
| Kanwer
Furqan All & Co. |
|
| Chartered
Accountants |
|
|
| REGISTERED
OFFICE: |
|
| Plot
Nos. A/8-11 Industrial Estate, Mirpur, A.K. |
|
|
| LIAISON
OFFICE: |
|
| 501,
Fifth Floor, Business Avenue, Main Shahrah-e-Faisal, Karachi. |
|
|
| FACTORIES: |
|
| i)
Plot Nos. A/8-11 Industrial estate, Mirpur, A.K. |
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| ii)
Plot No. 190 Phase-Ill, Industrial Estate, |
|
| Gadoon
Amazai, N.W.F.P. |
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|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the 17th Annual General Meeting of the Shareholders of
the Company will be |
|
| held
at plot Nos. A/8-11, Industrial Estate, Mirpur A. K., on Saturday 30th
December, 2000 at 11.00 am |
|
| to
transact the following business: |
|
|
| 1.
To confirm the Minutes of Extra Ordinary General Meeting of the Shareholders
of the Company held |
|
| on
12th December, 2000. |
|
|
| 2.
To receive and adopt the report of the Directors and Audited Accounts of the
Company for the year |
|
| ended
30th June, 2000. |
|
|
| 3.
To appoint Auditors for the year 2000-2001 and fix their remuneration, the
retiring Auditors |
|
| M/s.
Kanwer Furqan All & Co., Chartered Accountants have offered their
services for the ensuing |
|
| year. |
|
|
| 4.
To transact such other business as may be placed before the meeting with the
permission of the |
|
| Chairman. |
|
|
|
By Order of the Board |
|
|
|
|
|
SHOAIB ABDULLAH |
|
| December
09, 2000 |
|
Secretary |
|
| Mirpur,
Azad Kashmir |
|
|
| NOTE: |
|
| 1.
The Share Transfer Books of the Company will remain closed from December 21,
2000 to |
|
| December
30, 2000 (both days inclusive). |
|
|
| 2.
A member entitled 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 be effective, must
be received at |
|
| the
Registered office of the Company not less than 48 hours before the meeting. |
|
|
| 3.
The shareholders are requested to communicate to the Company any change in
their addresses. |
|
|
| 4.
CDC shareholders desiring to attend the meeting are requested to bring their
original National |
|
| Identity
Card, Account and Participants ID number for identification purpose and in
case of |
|
| proxy,
to enclose an attested copy of his / her National Identity Card. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| Dear
Shareholders, |
|
| On
behalf of the Board of Directors of Kashmir Polytex Limited, I am pleased to
submit the Annual Report on the |
|
| affairs
of the company, together with the Audited Accounts for the year ended June
30, 2000. |
|
|
| FINANCIAL
RESULTS |
|
| (Rupees
in thousand) |
|
|
MIRPUR |
GADOON |
TOTAL |
|
| Net
Loss for the period |
18,042 |
30,968 |
49,010 |
|
| Prior
years adjustments |
(95) |
(549) |
(644) |
|
|
------------- |
------------- |
------------- |
|
|
17,947 |
30 419 |
48,366 |
|
| Add:
Accumulated Loss B/F |
86,743 |
61,812 |
148,555 |
|
|
------------- |
------------- |
------------- |
|
|
104,690 |
92,231 |
196,921 |
|
|
========== |
========== |
========== |
|
| Your
Company operated during the year at only 21% of the total capacity. While the
Mirpur plant was closed since |
|
| May
1999, the Gadoon unit also operated far below capacity during the year for
want of profit yielding orders of |
|
| woven
sacks. Realizing the potential in Jumbo Bags (Flexible Intermediate Bulk
Containers - FIBC's) business, |
|
| the
management of the company decided in April 2000, to concentrate here only,
thus completely quitting the |
|
| polypropylene
woven sacks making sector that is plagued by tax evading informal sector, and
unhealthy trading |
|
| practices. |
|
|
| Another
very cogent reason to exit the woven sacks making sector is the large
overcapacities that came on line |
|
| because
the woven sacks making sector is not a high-tech industry. |
|
|
| Adequately
supported by the UK based principals, M/s. Storsack (UK) Limited, and
Directors' friends and |
|
| associates,
your company was able to embark on the business of producing Jumbo Bags,
after procuring all |
|
| necessary
machinery understandably without any support from the company's Bankers.
Storsack has also |
|
| committed
to providing working capital support. |
|
|
| Upto
June 30, 2000, an amount of Rs. 16.3 m, was outstanding as Directors' loans
arranged from friends and |
|
| associates.
Subsequent to the balance sheet date, this amount has risen to over Rs. 20 m,
in addition to over Rs. |
|
| 5
m, of working capital support from Storsack. |
|
|
| The
Market and Future Prospects |
|
| Jumbo
bags are generally used extensively in developed countries where the labor is
expensive, but these are |
|
| mostly
made in developing countries like India, Turkey, East Europe and Far East.
The biggest and the fastest |
|
| growing
exporter countries are Turkey and India respectively. Jumbo Bags are highly
labor-intensive, and this |
|
| feature
has converted most companies in Europe and North America from manufactures to
importer-resellers. |
|
| The
market is hardly brand loyal, though some leading manufactures do have very
distinct brand image. |
|
|
| The
export potential for KPL is large, but your company is not expecting
substantial margins in this business due |
|
| 1o
intense international competition. However, because of a high degree of
dedication and commitment your |
|
| company's
management expects to make sizeable gains. |
|
|
| What
is greatly needed is rationalization of Duty Drawback rates on the part of
CBR on export of Jumbo bags. |
|
| Local
market presently is sizeable too, but much of the demand may be latent and is
expected to come on stream |
|
| when
your company begins marketing locally. Your company believes that presently
in excess of USD 3 million |
|
| worth
of Jumbo bags are being imported in Pakistan each year, which can be
comfortably replaced by the high |
|
| quality
produce of your company. |
|
|
| Your
company has started commercial production and sales of Jumbo Bags during the
current year (2000-2001), |
|
| and
full scale operations and their results are expected around the year-end,
that is June 2001. |
|
|
| We
are thankful to our Bankers, Auditors, Clients and especially devoted
employees for their meritorious services. |
|
|
|
For and on behalf of the Board |
|
|
|
|
|
MOHAMMAD ASHRAF KHAN |
|
|
Chairman |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of KASHMIR POLYTEX LIMITED as at June
30, 2000 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 informations 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. |
|
|
| in
our opinion; |
|
|
| i)
the Balance Sheet and Profit and Loss Account 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 by the Company; |
|
|
| 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 and Profit and Loss Account 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 30th June, 2000 and of the loss for the year
then ended; |
|
| and |
|
|
| (d)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
|
(KANWER FURQAN ALI & co.) |
|
| Karachi:
December 6, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30, 2000 |
|
|
|
|
|
|
|
(Rupees in
thousands) |
|
|
Note |
2000 |
1999 |
|
| SHARE
CAPITAL AND RESERVES |
|
| CAPITAL |
|
| Authorised |
|
| 7,500,000
Ordinary Shares of Rs. 10/- each |
|
75,000 |
75,000 |
|
|
========== |
========== |
|
| Issued,
Subscribed & Paid up |
|
3 |
71,000 |
71,000 |
|
| GENERAL
RESERVE |
|
7,100 |
7,100 |
|
|
| ACCUMULATED
LOSS |
|
(196,921) |
(148,555) |
|
|
------------ |
------------ |
|
|
(118,821) |
(70,455) |
|
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
4 |
96,420 |
96,420 |
|
| LONG-TERM
LOANS |
|
5 |
91,377 |
78,566 |
|
| DEFERRED
LIABILITY |
|
6 |
18,284 |
17,630 |
|
|
| CURRENT
LIABILITIES |
|
| Current
Maturity |
|
7 |
-- |
3,770 |
|
| Short
Term Loans and Bank Borrowings |
|
8 |
139,408 |
163,387 |
|
| Creditors |
|
|
9,565 |
5,712 |
|
| Accrued
Liabilities |
|
9 |
46,006 |
25,130 |
|
|
------------ |
------------ |
|
|
194,979 |
197,999 |
|
|
| CONTINGENCIES
& COMMITMENTS |
|
10 |
-- |
-- |
|
|
------------ |
------------ |
|
|
282,239 |
320,160 |
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
11 |
182,068 |
178,737 |
|
| CAPITAL
-WORK-IN-PROGRESS |
|
|
-- |
20,960 |
|
|
|
|
|
| LONG-TERM
DEPOSITS |
|
12 |
740 |
740 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
|
|
| Stores,
Spares and Loose Tools |
|
13 |
5,929 |
5,276 |
|
|
|
|
|
| Stock-in-Trade |
|
14 |
36,444 |
36,230 |
|
|
| Trade
Debtors - Unsecured, |
|
| Considered
Good |
|
1,069 |
13,020 |
|
|
| Advances,
Deposits, Prepayments |
|
|
|
|
| and
Other Receivables |
|
15 |
55,258 |
54,797 |
|
|
|
|
| Cash
and Bank Balances |
|
16 |
731 |
10,400 |
|
|
|
------------ |
------------ |
|
|
99,431 |
119,723 |
|
|
------------ |
------------ |
|
|
282,239 |
320,160 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
MOHAMMAD ASHRAF KHAN |
|
|
|
FAROOQ KHAN |
|
|
CHIEF EXECUTIVE |
|
|
|
DIRECTOR |
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
(Rupees in
thousands) |
|
|
Note |
2000 |
1999 |
|
| Sales |
|
17 |
211 |
65,660 |
|
| Cost of Sales |
|
18 |
6,130 |
67,894 |
|
|
------------ |
------------ |
|
| Gross
Profit - Mirpur A.K. Project |
|
(5,919) |
(2,234) |
|
|
17 |
42,718 |
93,706 |
|
| Cost of Sales |
|
18 |
46,598 |
94,265 |
|
|
|
------------ |
------------ |
|
| Gross
Profit -Gadoon Amazai Project |
|
(3,880) |
(559) |
|
|
------------ |
------------ |
|
| Consolidated
Gross profit |
|
(9,799) |
(2,793) |
|
| OPERATING
EXPENSES |
|
| Administrative |
|
19 |
14,391 |
18,451 |
|
| Selling |
|
20 |
3,261 |
20,632 |
|
|
------------ |
------------ |
|
|
17,652 |
39,083 |
|
|
| OPERATING
PROFIT / (LOSS) |
|
(27,451) |
(41,876) |
|
| Other
income |
|
21 |
297 |
255 |
|
|
------------ |
------------ |
|
|
(27,154) |
(41,621) |
|
| OTHER
CHARGES |
|
| Financial
Charges |
|
22 |
21,856 |
37,913 |
|
|
------------ |
------------ |
|
| PROFIT
/ (LOSS) FOR THE YEAR |
|
(49,010) |
(79,534) |
|
| Prior
year's adjustment |
|
644 |
(790) |
|
|
------------ |
------------ |
|
|
(48,366) |
(80,324) |
|
| Accumulated
Loss brought forward |
|
(148,555) |
(68,231) |
|
|
------------ |
------------ |
|
| ACCUMULATED
LOSS CARRIED FORWARD |
|
(196,921) |
(148,555) |
|
|
| The
annexed notes form an integral part of these accounts. |
|
| Auditor's
Report of even number and date is attached hereto. |
|
|
|
MOHAMMAD ASHRAF KHAN |
|
FAROOQ KHAN |
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
(Rupees in
thousands) |
|
|
2000 |
1999 |
|
| SOURCES
OF CASH (IN FLOW) |
|
|
|
| OPERATION |
|
| Profit
/ (Loss) after taxation |
|
(49,010) |
(79,534) |
|
| Items
not involving funds |
|
|
| Depreciation |
|
|
|
17,428 |
17,024 |
|
| (Gain)
/ Loss on disposal of fixed assets |
|
|
(58) |
(200) |
|
| Deferred
Liabilities |
|
|
|
654 |
13,814 |
|
| Prior
Year's adjustment |
|
644 |
(709) |
|
|
------------ |
------------ |
|
|
|
|
18,668 |
29,848 |
|
|
|
|
------------ |
------------ |
|
| Net
Operational flow |
|
(30,342) |
(49,686) |
|
| OTHER
SOURCES |
|
|
|
| Sale
proceed of fixed assets |
|
560 |
286 |
|
| Increase
in long-term loans |
|
1,843 |
-- |
|
| Directors
loan |
|
7,198 |
9,113 |
|
| increase
in bank borrowings |
|
-- |
23,518 |
|
| Increase
in creditors |
|
3,853 |
55 |
|
| Increase
in accrued liabilities |
|
20,876 |
-- |
|
| Decrease
in store and spares |
|
-- |
154 |
|
| Decrease
in stock trade |
|
-- |
17,989 |
|
| Decrease
in trade debtors |
|
11,951 |
18,655 |
|
|
------------ |
------------ |
|
|
46,281 |
69,770 |
|
|
------------ |
------------ |
|
|
15,939 |
20,084 |
|
|
| CASH
OUT FLOW |
|
| Capital
expenditure |
|
21,261 |
821 |
|
| Capital
work-in-progress |
|
(20,960) |
10,644 |
|
| Repayment
of long-term loans |
|
-- |
3,061 |
|
| Decrease
in Short term bank borrowings |
|
23,979 |
-- |
|
| Decrease
in Creditors |
|
-- |
2,961 |
|
| Increase
in store & spares |
|
653 |
-- |
|
| Increase
in stock in trade |
|
214 |
-- |
|
| Increase
in advances, deposits and |
|
|
|
| other
receivables |
|
461 |
2,820 |
|
|
------------ |
------------ |
|
|
25,608 |
20,307 |
|
|
------------ |
------------ |
|
| NET
INCREASE/(DECREASE) IN CASH & BANK BALANCES |
(9,669) |
(223) |
|
|
|
========== |
========== |
|
| CASH
& BANK BALANCE |
|
| Opening |
|
10,400 |
10,623 |
|
| Closing |
|
731 |
10,400 |
|
|
------------ |
------------ |
|
| NET
INCREASE / (DECREASE) IN CASH & BANK BALANCES |
(9,669) |
(223) |
|
|
========== |
========== |
|
|
|
|
|
MOHAMMAD ASHRAF KHAN |
|
FAROOQ KHAN |
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR |
|
| ENDED
JUNE 30, 2000 |
|
|
| 1.
THE COMPANY AND ITS OPERATION |
|
| The
Company is incorporated in Azad Jammu & Kashmir, under the Companies
Ordinance, 1984, as |
|
| adopted
by Azad Jammu & Kashmir Government, as a Public Limited Company, quoted
on Karachi:, |
|
| and
Lahore Stock Exchanges in Pakistan. The Company is engaged in the business of
manufacturing |
|
| and
sale of polypropylene woven bags and cloth. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting Convention. |
|
| These
Accounts have been prepared under the historical cost convention. |
|
|
| 2.2
Retirement Benefits |
|
| The
Company operates an unfunded gratuity scheme and provision is made annually
to cover |
|
| the
obligations under the scheme. |
|
|
| 2.3 Taxation |
|
|
| Provision
for current taxation is based on taxable income at current rates of taxation
as applicable |
|
| in
Pakistan as adopted in Azad Jammu and Kashmir. |
|
|
| 2.4
Tangible Fixed Assets |
|
| All
fixed capital expenditure are at cost less accumulated depreciation except
Leasehold Land |
|
| which
is stated at cost. Depreciation on assets calculated on reducing balance
method at the |
|
| rates
specified in the fixed assets note. Maintenance and normal repairs are
charged to income |
|
| as
and when incurred, while major replacements and improvements, if any are
capitalised. |
|
| Gain
or Loss on disposal of assets is included in current income. |
|
|
| 2.5
Store, Spares & Loose Tools |
|
| These
are valued at Moving Average cost. |
|
|
| 2.6
Stock in Trade |
|
|
| Stocks
are valued at lower of cost or net releasable value, determined by First in
First out |
|
| method.
Stock in Transit and at Bond are valued at cost. |
|
|
| 2.7
Revenue Recognition |
|
| Sales
are recorded when goods are dispatched and Invoiced. |
|
|
|
| 2.8
Mark up/Interest on Working Capital loan has been allocated
on the basis of Sales of Mirpur |
|
| and
Gadoon projects. |
|
|
|
|
(Rupees in
thousands) |
|
|
Note |
2000 |
1999 |
|
| 3.
ISSUED, SUBSCRIBED AND PAID UP CAPITAL |
|
| 7,100,000
Ordinary Shares of Rs. 10/- |
|
| each
fully paid in cash. |
|
71,000 |
71,000 |
|
|
========== |
========== |
|
|
| 4.
SURPLUS ON REVALUATION OF FIXED ASSETS |
|
| Surplus
on Revaluation of Fixed Assets represents excess of the value of fixed assets
as assessed |
|
| by
an independent valuer over Net Book Value as on February 28, 1999. The
surplus is not available |
|
| for
distribution until realized on disposal of assets. |
|
|
| 5.
LONGTERM LOANS |
|
| Directors'/Other
Loan |
|
5.1 |
16,311 |
9,113 |
|
| PICIC
Loan for Mirpur-Secured |
|
5.2.1 |
19,895 |
17,572 |
|
| PICIC
Loan for Gadoon-Secured |
|
5.2.2 |
43,404 |
43,884 |
|
| TFCs
for Gadoon-Secured |
|
5.3 |
11,767 |
7,997 |
|
|
------------- |
------------- |
|
|
91,377 |
78,566 |
|
|
========== |
========== |
|
|
|
|
| 5.1
DIRECTORS/OTHER LOAN |
|
| Mohammad
Ashraf Khan |
|
5,487 |
2,289 |
|
| Farooq Khan |
|
1,824 |
1,824 |
|
| M/S.
Storsack (UK) Limited |
|
5,000 |
5,000 |
|
| Zafar/Ahsan |
|
4,000 |
-- |
|
|
------------- |
------------- |
|
|
16,311 |
9,113 |
|
|
========== |
========== |
|
|
|
|
| 5.2 PICIC LOAN FOR MACHINERY |
|
| 5.2.1 Mirpur |
|
| Principle
Amount |
|
26,726 |
26,726 |
|
| Paid
upto June, 2000 |
|
21,900 |
24,223 |
|
| Adjustment
on Rescheduling |
|
(15,069) |
(15,069) |
|
|
------------- |
------------- |
|
|
6,831 |
9,154 |
|
|
------------- |
------------- |
|
|
19,895 |
17,572 |
|
|
========== |
========== |
|
| Long
term PICIC loan for Machinery is secured by first charge on fixed assets of
the Company. |
|
| The
loan had been adjusted in terms of rescheduling arrangement agreed on
September, |
|
| 1998. |
|
|
|
(Rupees in
thousands) |
|
|
2000 |
1999 |
|
| 5.2.2 Gadoon |
|
| Principle
Amount |
|
62,546 |
62,546 |
|
|
| Paid
upto June, 2000 |
|
8,771 |
8,291 |
|
| Adjustment
on Rescheduling |
|
10,371 |
10,371 |
|
|
------------- |
------------- |
