| Mitchell's Fruit Farms Limited |
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
|
| Company
information |
|
| Chairman's
review |
|
| Directors'
report |
|
| Notice
of annual general meeting |
|
| Five
years at a glance |
|
| Auditors'
report |
|
| Balance
sheet |
|
| Profit
and loss account |
|
| Statement
of changes in equity |
|
| Cash
flow statement |
|
| Notes
to the accounts |
|
| Pattern
of shareholding |
|
| Pattern
of shareholding - CDC |
|
|
|
| COMPANY
INFORMATION |
|
|
| Board
of Directors |
S.M. Mohsin |
|
|
Chairman & Managing
Director |
|
|
|
Mehdi Mohsin |
|
|
Executive Director |
|
|
|
Syed Babar Ali |
|
|
Syed Faisal Imam |
|
|
Sitwat Mohsin |
|
|
Umme Kulsum Imam |
|
|
Anis Wahab Zuberi - NIT
Nominee |
|
|
| Company
Secretary |
Amir Sattar |
|
|
| Auditors |
|
A.F. Ferguson &
Company |
|
|
Chartered Accountants |
|
|
| Legal
Advisor |
Bokhari Aziz & Karim |
|
|
2-A, Block-G, Gulberg-II,
Lahore |
|
| Bankers |
|
ABN Amro Bank N.V. |
|
|
Emirates Bank
International PJSC |
|
|
Muslim Commercial Bank
Limited |
|
|
National Bank of Pakistan |
|
|
| Share
Registrar |
Softlink (Private)
Limited, |
|
|
Wings Arcade, 1-K
(Commercial) Model Town, Lahore |
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|
Phones |
(042) 5839180- 82 |
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|
Fax |
(042) 5837061 |
|
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| Registered
Office, |
Renala Khurd, District
Okara, Pakistan |
|
| Factory
& Farms |
Phones |
(04443) 622907 - 8 &
2416 |
|
|
Fax |
(04443) 621416 |
|
|
E. Mail |
rnk@mitchells.com.pk |
|
|
| Corporate
Office |
3-B, LDA Flats, |
|
|
Mian Muhammad Shafi Road,
(Lawrence Road), Lahore |
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|
Phones |
(042) 6307410 - 13 |
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|
Fax |
(042) 6307414 - 15 |
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|
E. Mail |
ho@mitchells.com.pk |
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|
Website |
www. mitchells.com.pk |
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|
| Regional
Sales Office |
Block No. 1 - A, Sector G
- 7/4, |
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| (North) |
|
Street No. 40, Islamabad |
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|
Phones |
(051) 201961 - 62 &
812669 |
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|
E.Mail |
rson@mitchells.com.pk |
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|
| Regional
Sales Office |
Syed House, Canal Berg, |
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| (Central) |
|
13 K.M. Multan Road,
Lahore |
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|
Phone |
(042) 5419350, 5423732
& 5425478 |
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|
Fax |
5419350 & 5423732 |
|
|
E-mail |
rsoc@mitchells.com.pk |
|
|
| Regional
Sales Office |
Mehran VIP II, Ground
Floor, |
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| (South) |
|
Plot 18/3 Dr. Dawood Pota
Road, Karachi |
|
|
Phones |
(021) 519675, 512112
& 5212712 |
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|
Fax |
(021) 5673588 |
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|
E. Mail |
rsos@mitchells.com.pk |
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|
|
| CHAIRMAN'S
REVIEW |
|
|
| It
gives me great pleasure to present to the shareholders the results relating
to another year of |
|
| growth
and unsurpassed profit for your company. The results assume sharper
significance if |
|
| considered
from the perspective of a year of general uncertainty for the national
economy. |
|
|
| The
market for value added consumer goods was disturbed from time to time by the
on-going tax |
|
| survey.
While some of our distributors have acquired registration under the General
Sales Tax |
|
| rules,
others remain outside their purview. Retail stores, notably in the bigger
cities, continued to |
|
| be
quite heavily stocked with imported food stuff, including confectionery and
groceries, and it |
|
| would
be reasonable to assume that much of this merchandise is smuggled into the
country. |
|
|
| SALES |
|
| In
the face of these difficult operating conditions net sales increased from Rs.
611,916,540 to Rs. |
|
| 636,775,658
in the year under review, likewise profit before tax rose from Rs.65,460,312
to |
|
| Rs.68,190,398.
It would be relevant to mention here that this increase was achieved while
the |
|
| selling
prices of most of our major volume products remained unchanged. |
|
|
| CAPITAL
INVESTMENT |
|
| It
will be observed from the accompanying accounts that capital expenditure was
in excess of Rs. |
|
| 32
million. New PLC controlled manufacturing equipment was installed in our
sugar confectionery |
|
| section
resulting in full recipe standardization and ensuring minimal waste.
Increased capacity |
|
| was
created with the commissioning of sophisticated machines for producing high
quality chocolate. |
|
| With
total renovation of our electric power supply system we expect a significant
reduction in the |
|
| cost
of electricity as also savings arising from less frequent power cuts and a
relatively more |
|
| stable
supply. |
|
|
| COMPETITION |
|
| The
year was marked by the emergence of several competitors and the launch of a
variety of |
|
| processed
food products in groceries as well as in the sugar / chocolate confectionery
group. |
|
| Goods
bearing familiar national and multinational brand names have begun to be
produced & |
|
| sold
in the domestic market. I am glad to report however that our consistent
policy of offering our |
|
| customers
value for money has been vindicated by the continued growth of our business.
We |
|
| hope
to build on this time-tested approach to our work. |
|
|
| RAW/PACKAGING
MATERIALS |
|
| The
citrus crop was again disappointing. While we were able to ensure adequate
supply of most |
|
| fruit
and vegetables - including mangoes, apples and tomatoes- the lemon crop
remained a |
|
| problem.
It has been aggravated by the fact that growers, for want of a sufficiently
large market |
|
| for
fresh lemons, appear to have cut back on the limited land that was under this
fruit crop. |
|
|
| Although
during the last year the sugar price was fairly stable the current year has
seen a big |
|
| increase.
Since this essential raw material is a major component of nearly all our
products its |
|
| higher
cost is likely to have its effect on our profitability for the ensuing year. |
|
|
| NEW
PRODUCTS |
|
| An
outstanding feature of recent months has been the launch of at least four new
products; two |
|
| in
the chocolate confectionery group and two in groceries. "Festival"
- an assortment of high |
|
| quality
chocolate attractively packaged - was launched in November 2000. A new
creamed wafer |
|
| enrobed
in chocolate "Twentee-l" was appropriately put on the market in
2000. Consumer |
|
| response
has been heartening. Two products - Imlee Sauce and Plum Jam - were added to
our |
|
| range
of sauces and preserves. Both, I am happy to advise, have got off to an
encouraging start. |
|
|
| PERSONNEL |
|
| The
results achieved and the on-going efforts to raise our standards is a tribute
to the commitment |
|
| and
hard work of company employees at every level. Both the management and the
work force |
|
| deserve
our wholehearted appreciation. |
|
|
| S.M.
MOHSIN |
|
|
|
| DIRECTORS'
REPORT |
|
|
| Your
Directors are pleased to place before you the audited financial statements
for the year |
|
| ended
September 30, 2000. |
|
|
| FINANCIAL |
|
|
Rupees |
|
| Profit
before tax |
|
68,190,398 |
|
| Provision
for tax |
|
25,211,364 |
|
|
------------- |
|
| Profit
after tax |
|
42,979,034 |
|
| Unappropriated
profit brought forward |
|
85,599,329 |
|
|
------------- |
|
| Profit
available for appropriation |
|
128,578,363 |
|
| Proposed
cash dividend @ 41% |
|
17,220,000 |
|
|
------------- |
|
| Unappropriated
profit carried forward |
|
111,358,363 |
|
|
========== |
|
|
|
|
| AUDITORS |
|
| The
present auditors Messers A. F. Ferguson & Company, Chartered Accountants,
retire and |
|
| being
eligible, offer themselves for reappointment. |
|
|
| CHAIRMAN'S
REVIEW |
|
| The
Directors of the Company endorse the contents of the Chairman's Review
dealing with the |
|
| activities
of the Company. |
|
|
| EARINING
PER SHARE |
|
| Earning
per share of Rs. 10 each amounts to Rs. 10.23 which has been calculated on
the basis |
|
| of
4.2 million shares outstanding at the year end. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| A
statement showing the pattern of holding of shares as on September 30, 2000
is attached. |
|
|
|
For and on behalf of the Board |
|
|
|
|
| Lahore |
|
S.M. Mohsin |
|
| March
2, 2001 |
|
Chairman |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 68th Annual General Meeting of the Company will be
held on |
|
| Saturday,
31st March 2001 at 11:30 a.m. at the Registered Office of the Company at
Renala |
|
| Khurd,
District Okara to transact the following business: |
|
|
| 1.
To confirm the minutes of the last meeting. |
|
| 2.
To receive, consider and adopt the Annual Audited Accounts for the year ended
September |
|
| 30,
2000 together with the Directors' and Auditors' reports thereon. |
|
| 3.
To approve cash dividend @ 41% as recommended by the Board of Directors. |
|
| 4.
To appoint auditors for the year ending September 30, 2001 and to fix their
remuneration. |
|
| The
retiring auditors namely Messers A. F. Ferguson & Co., Chartered
Accountants, being |
|
| eligible
offer themselves for reappointment. |
|
| 5.
To transact any other business which may be placed before the meeting with
the permission |
|
| of the chair. |
|
|
|
By order of the Board |
|
|
|
|
|
Amir Sattar |
|
| Lahore,
March 3, 2001 |
|
Company Secretary |
|
|
| Notes |
|
|
| 1.
The share transfer book of the Company will remain closed from March 25, 2001
to March |
|
| 31,
2001 (both days inclusive) for entitlement of 41% final cash dividend for the
accounting |
|
| year
ended September 30, 2000. Transfers received in order (including deposit
requests |
|
| under
CDS) at our Registrar's office upto 1:00 p.m. on March 24, 2001 will be
considered in |
|
| time. |
|
|
| 2.
A member eligible to attend and vote at this 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
meeting is |
|
| scheduled
for. |
|
|
| 3.
The Beneficial Owners of the Company through Central Depository Company,
entitled to |
|
| attend
and vote at this meeting, must bring his/her NIC or Passport to prove his/her
identity. |
|
| In
case of proxy, must enclose an attested copy of his/her NIC or Passport.
Representative |
|
| of
corporate members should bring the usual documents required for such purpose. |
|
|
| 4.
Shareholders are requested to immediately notify the change in their address,
if any. |
|
|
|
| FIVE
YEARS AT A GLANCE |
|
|
|
(Rupees in thousand) |
|
|
|
1996 |
1997 |
1998 |
1999 |
2000 |
|
| Net sales |
|
309,021 |
402,988 |
504,328 |
610,873 |
636,776 |
|
| Cost of sales |
|
242,841 |
304,770 |
384,282 |
475,893 |
495,642 |
|
| Gross profit |
|
66,180 |
98,218 |
120,046 |
134,980 |
141,134 |
|
| Gross
profit to sales - % |
21.42 |
24.37 |
23.80 |
22.10 |
22.16 |
|
| Profit
before tax |
21,086 |
42,640 |
63,669 |
65,460 |
68,190 |
|
| Taxation |
|
8,869 |
13,218 |
21,262 |
23,149 |
25,211 |
|
| Profit
after tax |
12,217 |
29,422 |
42,407 |
42,311 |
42,979 |
|
| Earning
per share - Rupees |
3.49 |
8.41 |
10.09 |
10.07 |
10.23 |
|
| Cash
dividend - % |
22.50 |
30.00 |
50.00 |
45.00 |
41.00 |
|
| Stock
dividend - % |
-- |
-- |
20.00 |
-- |
-- |
|
| Capital
expenditure |
10,001 |
7,047 |
40,231 |
14,393 |
32,556 |
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Mitchell's Fruit Farms Limited as
at September |
|
| 30,
2000 and the related profit and loss account, cash flow statement and
statement of changes |
|
| in
equity 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 inter- |
|
| nal
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
responsibil- |
|
| ity
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 in- |
|
| cludes
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 esti- |
|
| mates
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 agree- |
|
| ment
with the books of account and are further in accordance with accounting poli- |
|
| cies
consistently applied; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's
busi- |
|
| ness; 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, cash flow statement and statement
of changes |
|
| in
equity 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,
its cash flows |
|
| and
changes in equity 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
estab- |
|
| lished
under section 7 of that Ordinance. |
|
|
| Lahore |
|
A.F. Ferguson & Co. |
|
| Dated:
March 2, 2001 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET |
|
| AS
AT SEPTEMBER 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorised
capital |
|
| 5,000,000
(1999: 5,000,000) ordinary |
|
| shares
of Rs 10 each |
|
50,000,000 |
50,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
|
3 |
42,000,000 |
42,000,000 |
|
| Reserves |
|
4 |
9,635,878 |
9,635,878 |
|
| Unappropriated
profit |
|
|
111,358,363 |
85,599,329 |
|
|
|
------------ |
------------ |
|
|
|
162,994,241 |
137,235,207 |
|
|
|
|
|
| SURPLUS
ON REVALUATION OF |
|
|
|
|
| FIXED
ASSETS |
|
5 |
40,665 |
40,665 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
6 |
20,353,764 |
18,304,729 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
|
|
|
|
| Shod
term running finances |
|
7 |
25,763,638 |
22,674,459 |
|
| Creditors,
accrued and other liabilities |
|
8 |
473,587,961 |
39,130,256 |
|
| Proposed
dividend |
|
|
17,220,000 |
18,900,000 |
|
|
|
------------ |
------------ |
|
|
|
90,342,434 |
80,704,715 |
|
| CONTINGENCIES
AND COMMITMENTS |
9 |
------------ |
------------ |
|
|
273,731,104 |
236,285,316 |
|
|
========== |
========== |
|
| FIXED
CAPITAL EXPENDITURE |
|
| Operating
fixed assets |
|
10 |
99,792,505 |
80,033,516 |
|
| Capital
work in progress |
|
11 |
5,436,050 |
9,866,979 |
|
|
|
105,228,555 |
89,900,495 |
|
|
| LIVESTOCK |
|
690,000 |
582,300 |
|
| LONG
TERM DEPOSITS |
|
147,223 |
147,223 |
|
| CURRENT
ASSETS |
|
| Stores
and spares |
|
12 |
7,166,037 |
6,184,511 |
|
| Stock
in trade |
|
13 |
104,588,140 |
104,684,102 |
|
| Trade debts |
|
14 |
4,152,758 |
5,304,881 |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables |
|
15 |
40,690,509 |
15,334,258 |
|
| Cash
and bank balances |
|
16 |
11,067,882 |
14,147,546 |
|
|
------------ |
------------ |
|
|
167,665,326 |
145,655,298 |
|
|
------------ |
------------ |
|
|
273,731,104 |
236,285,316 |
|
|
========== |
========== |
|
| The
annexed notes form an integral pads of these accounts. |
|
|
|
S.M. Mohsin |
|
Sitwat Mohsin |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| Sales |
|
17 |
636,775,658 |
611,916,540 |
|
| Cost of sales |
|
18 |
495,641,536 |
475,892,632 |
|
|
----------- |
----------- |
|
| Gross profit |
|
141,134,122 |
136,023,908 |
|
|
| Selling
and distribution expenses |
|
19 |
42,437,661 |
42,912,348 |
|
| Administrative
expenses |
|
20 |
21,220,805 |
22,888,139 |
|
|
----------- |
----------- |
|
|
63,658,466 |
65,800,487 |
|
|
----------- |
----------- |
|
| Operating
profit |
|
77,475,656 |
70,223,421 |
|
| Other
income |
|
21 |
1,048,137 |
4,228,727 |
|
|
----------- |
----------- |
|
|
78,523,793 |
74,452,148 |
|
|
| Financial
charges |
|
22 |
5,393,395 |
4,063,836 |
|
| Other
charges |
|
23 |
4,940,000 |
4,928,000 |
|
|
----------- |
----------- |
|
|
10,333,395 |
8,991,836 |
|
|
| Profit
before taxation |
|
68,190,398 |
65,460,312 |
|
| Provision
for taxation |
|
24 |
25,211,364 |
23,149,031 |
|
|
|
----------- |
----------- |
|
| Profit
after taxation |
|
|
42,979,034 |
42,311,281 |
|
|
|
========== |
========== |
|
| Earning
per share |
|
30 |
10.23 |
10.07 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
S.M. Mohsin |
|
Sitwat Mohsin |
|
|
Chief Executive |
|
Director |
|
|
|
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
Reserve for |
|
Unappro |
|
|
Share |
Share |
issue of |
General |
priated |
|
|
capital |
premium |
bonus share |
reserve |
profit |
Total |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| Balance
as on September 30, 1998 |
35,000,000 |
9,335,878 |
7,000,000 |
300,000 |
62,188,048 |
113,823,926 |
|
| 700,000
ordinary shares of Rs. 10 |
|
| each
issued as fully paid bonus shares |
7,000,000 |
-- |
-- |
-- |
-- |
7,000,000 |
|
| Nominal
value of bonus shares issued |
-- |
-- |
(7,000,000) |
-- |
-- |
(7,000,000) |
|
| Net
profit for the year |
|
-- |
-- |
-- |
-- |
42,311,281 |
42,311.28 |
|
| Proposed
dividend (@ Rs. 4.50 per share) |
-- |
-- |
-- |
-- |
(18,900,000) |
(18,900,000) |
|
|
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
|
| Balance
as on September 30, 1999 |
42,000,000 |
9,335,878 |
-- |
300,000 |
85,599,329 |
137,235,207 |
|
| Net
profit for the year |
|
-- |
-- |
-- |
-- |
42,979,034 |
42,979,034 |
|
| Proposed
dividend (@ Rs 4.10 per share) |
-- |
-- |
-- |
-- |
(17,220,000) |
(17,220,000) |
|
|
------------ |
------------ |
------------ |
------------ |
------------ |
------------ |
|
| Balance
as on September 30, 2000 |
42,000,000 |
9,335,878 |
-- |
300,000 |
111,358,363 |
162,994,241 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
|
S.M. Mohsin |
|
Sitwat Mohsin |
|
|
Chief Executive |
|
Director |
|
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
| Cash
flow from operating activities |
|
| Cash
generated from operations |
|
27 |
76,209,552 |
69,247,941 |
|
| Financial
charges paid |
|
(5,776,535) |
(3,099,393) |
|
| (Increase)
/ decrease in long term deposits |
|
-- |
(100,000) |
|
| Payment
of gratuity and leave salary |
|
(1,270,941) |
(888,917) |
|
| Taxes paid |
|
(28,299,334) |
(38,521,338) |
|
|
------------ |
------------ |
|
| Net
cash inflow from operating activities |
|
40,862,742 |
26,638,293 |
|
| Cash
flow from investing activities |
|
| Fixed
capital expenditure |
|
(28,125,465) |
(22,460,682) |
|
| Proceeds
from sale of fixed assets |
|
25,000 |
3,551,607 |
|
| Proceeds
from sale of livestock |
|
76,900 |
173,450 |
|
|
------------ |
------------ |
|
| Net
cash |
