| Modern Textile Mills Limited |
|
|
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Directors'
Report |
|
| Pattern
of Shareholding |
|
| Auditors'
Report |
|
| Balance Sheet |
|
| Profit
& Loss Account |
|
| Cash
Flow Statement |
|
| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
|
|
|
| COMPANY
INFORMATION |
|
|
| CHAIRMAN
& CHIEF EXECUTIVE |
|
| MR. MUHAMMAD |
QASIM |
|
|
| DIRECTORS |
|
| MR.
MUHAMMED AMIN TAHIR |
|
| MR.
MUHAMMED YOUSUF SULEMAN |
|
| MR.
MUHAMMED EIJAZ TAHIR |
|
| MR.
SHOUKAT ALI |
|
| MR.
MUHAMMAD SIDDIQ SULEMAN |
|
| MR.
MUHAMMAD YAQOOB IBRAHIM |
|
|
| AUDITORS |
|
| MESSRS
EBRAHIM & CO. |
|
| CHARTERED
ACCOUNTANTS |
|
|
| BANKERS |
|
| HABIB
BANK LIMITED |
|
| HABIB
BANK AG ZURICH |
|
| METROPOLITAN
BANK LIMITED |
|
|
| LEGAL
ADVISER |
|
| ABDUL
GHANI KHAN ADVOCATES |
|
|
| REGISTERED
OFFICE |
|
| 18-BADRI
BUILDING |
|
| I.
I. CHUNDRIGAR ROAD, |
|
| KARACHI. |
|
| PHONES:
2414538, 2412106 & 2414429 |
|
|
| MILLS |
|
| TANDO
JAM (SINDH) |
|
|
| FAX |
|
| (92-21) 2417914 |
|
|
| E-MAIL: |
|
| modern@cubexs.net.pk |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| The
47th Annual General Meeting of the shareholders of MODERN TEXTILE MILLS LTD.
will be held |
|
| at
Haji Abdullah Haroon Muslim Gymkhana, Aiwan-e-Sadar, Behind Shaheen Complex,
Karachi on |
|
| Saturday,
31st March, 2001 at 2.30 p.m. to transact the following business:- |
|
|
| 1.
To confirm the minutes of the 46th Annual General Meeting held on 31st March,
2000. |
|
|
|
|
| 2.
To receive, consider and adopt the Director's Report, Auditor's Report and
Audited Accounts of |
|
| the
Company for the year ended 30th September, 2000. |
|
|
| 3.
To appoint Auditors for the ensuing year and fix their remuneration. The
retiring |
|
| Auditors
M/s. Ebrahim & Co., Chartered Accountants being eligible have offered
themselves for |
|
| reappointment. |
|
|
| 4.
To transact any other business, with the permission of the chair. |
|
|
|
|
By Order of the Board |
|
|
|
|
|
|
|
|
|
for Modern Textile Mills Ltd. |
|
| Karachi, |
|
|
MUHAMMAD QASIM |
|
| Dated:
9th March, 2001 |
|
(Chief Executive) |
|
|
| NOTES: |
|
|
| I.
The Share transfer books of the Company will remain closed from 29th March,
2001 to 7th April, |
|
| 2001. |
|
|
|
|
| II.
A member entitled to attend the Annual General Meeting is entitled to appoint
a proxy to attend |
|
| and
vote instead of himself/herself. Proxies in order to be valid must be
received at the Registered |
|
| Office
of the Company atleast 48 hours of the time appointed for the meeting. A
proxy must be |
|
| a
member of the Company. |
|
|
| III.
The Shareholders are requested to communicate immediately to the Company for
any change |
|
| in address. |
|
|
|
|
|
|
| DIRECTOR'S
REPORT |
|
|
| BISMILLAH-HIR-REHMAN-NIR-RAHIM |
|
|
| Assalam-o-Alaikum, |
|
| The
Directors of your Company are pleased to present their 47th annual report and
audited financial |
|
| statements
for the year ended 30 September, 2000. |
|
|
| OPERATING
RESULTS: |
|
| The
Board regrets the continuing losses sustained by the Company. The following
are the results of |
|
| the
Company for the year under review:- |
|
|
|
|
RUPEES |
|
|
| Gross profit |
|
|
1,433,168 |
|
| Administrative,
selling and distribution expenses |
|
9,220,401 |
|
|
|
|
------------------ |
|
| Operating
(Loss) |
|
(7,787,233) |
|
| Other Income |
|
|
6,562,625 |
|
|
|
|
------------------ |
|
|
|
|
(1,224,608) |
|
| Financial
Charges |
|
1,310,260 |
|
|
|
|
------------------ |
|
| Net (Loss) |
|
|
(2,534,868) |
|
| Taxation |
|
|
(1,725,633) |
|
|
------------------ |
|
| Net
(loss) after taxation |
|
(809,235) |
|
| Accumulated
(losses) brought forward |
|
(81,569,992) |
|
|
|
|
------------------ |
|
| Accumulated
(losses) carried forward |
|
(82,379,227) |
|
|
========== |
|
|
| Hence
no dividend could be recommended |
|
|
| THE
YEAR UNDER REVIEW |
|
| As
reported last year, due to financial constraints, we could not procure full
quantities of cotton |
|
| required
for the full year's operation. Although many textile mills were able to cover
their stocks |
|
| from
their available bank facilities as the prices went down to the lowest.
However after intervention |
|
| of
buying cotton by Trading Corporation of Pakistan the prices flared up and
instantly they were |
|
| unworkable
for mills. Your company could acquire only few quantities of cotton for day
to day |
|
| operation.
Hence we had to often close down the plant thus incurring heavy expenses. The
electric |
|
| power
rates and diesel purchase expenses increased substantially. We are trying to
cut down all |
|
| unnecessary
expenses specially administration expenses. However, your directors tried to
run the |
|
| mills
to the best of their efforts to minimize losses. |
|
|
| During
the year, as approved by the shareholders meeting held on 7th July, 2000,
portion of textile |
|
| machines
and extra land was offered for sale. We are pleased to confirm sale of
machines having |
|
| a
written down value of Rs.9,187,154 at Rs.15,128,400 making a profit of
Rs.5,941,246. This |
|
| enabled
your company to pay off substantial portion of bank liabilities. Our main
bankers Habib |
|
| Bank
Ltd. have not yet finalized mode of balance payment of principal amount of
loan as they |
|
| are
still insisting for payment of principal amount together with markup accrued
to-date or make |
|
| a
lump sum payment of the outstanding loan. We are persuing the bankers to
forgo current markup |
|
| as
the balance of loan outstanding includes markup charged by them and the
additional markup |
|
| is
un Islamic and the Banking Courts are not allowing the charging of this
markup. In anticipation |
|
| we
have not charged any markup during the year. |
|
|
| FUTURE
PROSPECTS |
|
| During
the year, in anticipation of rescheduling of our loan and waiver of markup,
we made further |
|
| payment
of Rs.5 Million to Habib Bank Ltd. We are hopeful of the outcome in our
negotiation with |
|
| the
Bankers. We have prepared a plan to modernize the plant at the earliest after
Bank's settlement |
|
| as
the bank is insisting on settling Bank's liabilities first. Once again
requesting all shareholders |
|
| for
special prayers to Allah Almighty to relieve the company of the Bank's
clutches and make the |
|
| company
profitable as was for so many years in sequence. |
|
|
| AUDITORS
OBSERVATIONS |
|
| The
Management's comments on the auditors observations regarding non accrual of
markup on |
|
| short
term running finance and Company's ability to continue as a going concern are
given in Note |
|
| 8.1(c)
and 1.2 respectively in the Notes to the Accounts. |
|
|
| INDUSTRIAL
RELATIONS |
|
| The
Directors wish to thank the staff and the workers for their continued
dedication and honest |
|
| work
in improving the working and maintaining the standard of quality during the
year under review. |
|
|
| EARNING
PER SHARE |
|
| The
earnings per share of your Company was Rs.(0.22)[1999: Rs.(4.18)]. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| The
pattern of shareholding in prescribed form is included in this report. |
|
|
| AUDITORS |
|
| The
auditors of the Company M/s. Ebrahim & Co., Chartered Accountants, retire
and being eligible |
|
| offer
themselves for reappointment. |
|
|
|
|
For and on behalf of the board |
|
|
|
|
|
|
| Karachi |
|
|
MUHAMMAD QASlM |
|
| Dated:
9th March, 2001 |
|
(Chief Executive) |
|
|
|
| FORM 34 |
|
| PATTERN
OF SHARE-HOLDING AS ON 30-09-2000 |
|
|
| NO. OF SHARE |
|
SHARE HOLDINGS |
|
TOTAL |
|
| HOLDERS |
|
|
|
SHARES HELD |
|
|
| 105 |
FROM |
1 |
TO |
100 |
1,828 |
|
| 172 |
FROM |
101 |
TO |
500 |
38,369 |
|
| 33 |
FROM |
501 |
TO |
1,000 |
27,113 |
|
| 157 |
FROM |
1,001 |
TO |
5,000 |
476,931 |
|
| 153 |
FROM |
5,001 |
TO |
10,000 |
1,112,664 |
|
| 39 |
FROM |
10,001 |
TO |
15,000 |
475,216 |
|
| 10 |
FROM |
15,001 |
TO |
20,000 |
181,670 |
|
| 13 |
FROM |
20,001 |
TO |
25,000 |
292,345 |
|
| 7 |
FROM |
25,001 |
TO |
30,000 |
192,000 |
|
| 4 |
FROM |
30,001 |
TO |
35,000 |
131,625 |
|
| 5 |
FROM |
35,001 |
TO |
40,000 |
185,373 |
|
| 5 |
FROM |
40,001 |
TO |
45,000 |
214,125 |
|
| 5 |
FROM |
45,001 |
TO |
50,000 |
239,616 |
|
| 1 |
FROM |
50,001 |
TO |
55,000 |
53,625 |
|
| 2 |
FROM |
|
55,001 |
127,500 |
|
| ------------------ |
|
------------------ |
|
| 711 |
|
|
3,750,000 |
|
| ========== |
|
|
========== |
|
|
| CATEGORIES
OF SHAREHOLDERS |
NUMBER |
SHARES HELD |
PERCENTAGE |
|
|
| INDIVIDUALS |
|
710 |
3,740,426 |
99.74% |
|
| INVESTMENT
COMPANIES |
|
1 |
9,574 |
0.26% |
|
| JOINT
STOCK COMPANIES |
|
-- |
-- |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
|
| TOTAL |
|
711 |
3,750,000 |
100.00% |
|
|
|
|
========== |
========== |
========== |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of MODERN TEXTILE
MILLS LIMITED as at September |
|
| 30,
2000 and the related profit and loss account and cash flow statement and
statement of changes |
|
| in
equity, togetherwith 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 above said statements. We believe
that our audit provides |
|
| a
reasonable basis for our opinion, and after due verification, we report that: |
|
|
| Provision
of mark-up accrued on short term running finance amounting to Rs. 18.407
million has not |
|
| been
recognised in these accounts as explained morefully in note: 8.1(c) |
|
|
| Except
for the adjustment, if any, in respect of matter stated above: |
|
|
| a)
in our opinion, proper books of accounts 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 togetherwith the notes thereon
have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984 and are in agreement with |
|
| the
books of accounts 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)
except for the matter referred above, 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 |
|
| loss,
its cash flows and changes in equity for the year then ended; and |
|
|
|
|
| d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
| Without
qualifying our opinion we draw attention to the fact that the Company has
been incurring losses |
|
| for
a number of years and accumulated losses exceed the issued, subscribed and
paid up capital and |
|
| revenue
reserves by Rs. 14.879 million. The current liabilities of the Company exceed
the current |
|
| assets
by Rs. 39.861 million. The ability of the Company to continue as a going
concern is dependent |
|
| on
the prospect of operating profitably in the future in the absence of which
the basis would not be |
|
| valid
and adjustments would have to be made for any gain or loss arising on
realisation of the |
|
| Company's
assets and settlement of liabilities. |
|
|
| Karachi: |
|
|
|
EBRAHIM & CO. |
|
| Dated:
9th March, 2001 |
|
|
Chartered Accountants |
|
|
|
|
|
| BALANCE
SHEET AS AT 30 SEPTEMBER, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
|
Notes |
Rupees |
Rupees |
|
|
| CAPITAL
AND RESERVES |
|
| Authorised
capital |
|
| 5,000,000
ordinary shares of Rs.10/- each |
|
50,000,000 |
50,000,000 |
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid up capital |
3 |
37,500,000 |
37,500,000 |
|
| Revenue
reserves |
|
4 |
30,000,000 |
30,000,000 |
|
| Profit
and loss account |
|
|
|
|
| (adverse
balance) |
|
|
(82,379,227) |
(81,569,992) |
|
|
------------------ |
------------------ |
|
|
|
(14,879,227) |
(14,069,992) |
|
|
| DEFERRED
LIABILITIES |
|
5 |
5,001,259 |
6,663,137 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term running finances |
|
6 |
49,789,788 |
68,597,080 |
|
| Creditors,
accrued and other liabilities |
7 |
12,034,557 |
12,379,601 |
|
| Dividend
- Unclaimed |
|
|
56,865 |
56,865 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
61,881,210 |
81,033,546 |
|
| CONTINGENCIES
AND COMMITMENTS |
8 |
|
|
|
|
------------------ |
------------------ |
|
|
|
52,003,242 |
73,626,691 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
| Karachi: |
|
| Dated:
9th March, 2001 |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
fixed assets |
|
9 |
28,688,994 |
38,798,591 |
|
| Spares
held for capital expenditure |
|
1,259,196 |
1,214,978 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
29,948,190 |
40,013,569 |
|
|
| LONG
TERM DEPOSITS |
|
| Security
deposits |
|
34,650 |
34,650 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
10 |
1,759,139 |
2,066,118 |
|
| Stock in trade |
|
11 |
6,218,273 |
13,081,239 |
|
| Trade debts |
|
12 |
4,406,243 |
8,801,174 |
|
| Advances,
deposits, prepayments |
|
|
| and
other receivables |
|
13 |
9,242,435 |
9,507,608 |
|
| Cash
and bank balances |
|
14 |
394,312 |
122,333 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
22,020,402 |
33,578,472 |
|
|
------------------ |
------------------ |
|
|
|
52,003,242 |
73,626,691 |
|
|
|
========== |
========== |
|
|
|
MUHAMMAD QASIM |
|
MUHAMMAD AMIN TAHIR |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED 30 SEPTEMBER, 2000 |
|
|
|
|
|
|
2000 |
1999 |
|
|
|
Notes |
Rupees |
Rupees |
|
|
|
|
| Sales |
|
|
15 |
69,906,828 |
104,884,544 |
|
| Cost of sales |
|
|
16 |
68,473,660 |
99,937,374 |
|
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
1,433,168 |
4,947,170 |
|
|
|
|
|
|
| Administrative
expenses |
|
17 |
5,846,773 |
6,607,330 |
|
| Selling
and distribution expenses |
|
18 |
3,373,628 |
6,290,099 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
9,220,401 |
12,897,429 |
|
|
------------------ |
------------------ |
|
| Operating (loss) |
|
|
(7,787,233) |
(7,950,259) |
|
| Other income |
|
19 |
6,562,625 |
263,255 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(1,224,608) |
(7,687,004) |
|
| Financial
charges |
|
20 |
1,310,260 |
1,534,998 |
|
|
|
|
------------------ |
------------------ |
|
| Net
(loss) for the year |
|
|
(2,534,868) |
(9,222,002) |
|
| Taxation |
|
21 |
(1,725,633) |
6,451,510 |
|
|
|
|
------------------ |
------------------ |
|
| Net
(loss) after taxation |
|
|
(809,235) |
(15,673,512) |
|
| Accumulated
(losses) brought forward |
|
(81,569,992) |
(65,896,480) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
(losses) carried forward |
|
(82,379,227) |
(81,569,992) |
|
|
|
========== |
========== |
|
| Earning
per share |
|
27 |
(0.22) |
(4.18) |
|
|
|
========== |
========== |
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
MUHAMMAD QASIM |
|
MUHAMMAD AMIN TAHIR |
|
|
Chief Executive |
|
Director |
|
|
| Karachi:
Dated: 9th March, 2001 |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER, 2000 |
|
|
|
|
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Net
(loss) for the year |
|
|
(2,534,868) |
(9,222,002) |
|
|
| Adjustments
for items not involving movement of funds |
|
| Depreciation |
|
2,496,343 |
3,608,020 |
|
| Profit
on sale of fixed assets |
|
(5,941,246) |
(263,255) |
|
| Reversal
of custom duty capitalised |
|
624,034 |
-- |
|
| Reversal
of accumulated depreciation charged |
|
|
|
| on
custom duty capitalised |
|
(519,863) |
-- |
|
| Provision
for gratuity (net) |
|
69,801 |
(96,199) |
|
| Provision
for doubtful debts |
|
581,388 |
2,136,214 |
|
|
|
------------------ |
------------------ |
|
|
(5,224,411) |
(3,837,222) |
|
|
| (Increase)
/ Decrease in current assets |
|
| Stores
and spares |
|
306,979 |
(142,742) |
|
| Stock in trade |
|
6,862,966 |
7,081,977 |
|
| Trade debts |
|
3,813,543 |
(2,678,260) |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables |
|
589,720 |
(117,293) |
|
|
|
------------------ |
------------------ |
|
|
11,573,208 |
4,143,682 |
|
|
|
------------------ |
------------------ |
|
| Increase
in current liabilities |
|
6,348,797 |
306,460 |
|
|
|
|
|
| Creditors,
accrued and other liabilities |
|
273,711 |
577,793 |
|
|
------------------ |
------------------ |
|
| Net
cash from operating activities before tax |
|
6,622,508 |
884,253 |
|
| Taxes paid |
|
|
(949,348) |
(2,106,988) |
|
|
------------------ |
------------------ |
|
| Net
cash from operating activities |
|
|
5,673,160 |
(1,222,735) |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Addition
to fixed assets |
|
(1,678,071) |
(1,254,903) |
|
| Spares
held for capital expenditure |
|
(44,218) |
(1,214,978) |
|
| Proceeds
from disposal of fixed assets |
|
15,128,400 |
945,000 |
|
|
|
------------------ |
------------------ |
|
| Net
cash from investing activities |
|
13,406,111 |
(1,524,881) |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Short
term running finances |
|
|
(18,807,292) |
1,541,140 |
|
|
------------------ |
------------------ |
|
| Net
increase / (decrease) in cash and |
|
| cash
equivalents |
|
|
271,979 |
(1,206,476) |
|
|
|
|
|
|
| Cash
and cash equivalents at the |
|
|
|
|
| beginning
of the year |
|
|
122,333 |
1,328,809 |
|
|
| Cash
and cash equivalents at the end of |
|
------------------ |
------------------ |
|
| the year |
|
|
394,312 |
122,333 |
|
|
|
|
|
========== |
========== |
|
|
|
|
MUHAMMAD QASIM |
|
MUHAMMAD AMIN TAHIR |
|
|
Chief Executive |
|
Director |
|
|
| Karachi:
Dated: 9th March, 2001 |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 SEPTEMBER, 2000 |
|
