| Pakistan Synthetics Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| Company
Information |
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| Performance
of the Company at a Glance |
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| Notice
of Meeting |
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| Report
of the Directors |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Cash
Flow Statement |
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| Statement
of Changes in Equity |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| COMPANY
INFORMATION |
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|
| BOARD
OF DIRECTORS |
EBRAHIM HAJI KARIM -
CHAIRMAN |
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|
UMER HAJI KARIM-CHIEF
EXECUTIVE |
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HAROON HAJI KARIM |
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ANWAR HAJI KARIM |
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YAKOOB HAJI KARIM |
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|
AHMED EBRAHIM |
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AALIYA DOSSA |
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| SECRETARY |
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M. SALEEM AZIZ |
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| BANKERS |
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HABIB BANK LIMITED |
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HABIB BANK AG ZURICH |
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CITIBANK N.A. |
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AMERICAN EXPRESS BANK
LIMITED |
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METROPOLITAN BANK LIMITED |
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BANK AL-HABIB LIMITED |
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MUSLIM COMMERCIAL BANK
LIMITED |
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NATIONAL BANK OF PAKISTAN |
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BANK ALFALAH LIMITED |
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| AUDITORS |
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HYDER BHIMJI &
COMPANY |
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CHARTERED ACCOUNTANTS |
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| LEGAL
ADVISORS |
MANSOOR AHMED KHAN &
COMPANY |
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ADVOCATES AND SOLICITORS |
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| REGISTERED
OFFICE |
3RD FLOOR, KARACHI DOCK
LABOUR BOARD |
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BUILDING, 58- WEST WHARF
ROAD, |
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KARACHI-74000 |
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| FACTORY |
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F. 1,2,3, & F. 13, 14
& 15, |
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|
HUB INDUSTRIAL TRADING
ESTATE, |
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DISTRICT LASBELLA,
BALOCHISTAN |
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| PERFORMANCE
OF THE COMPANY AT A GLANCE |
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|
EIGHTEEN |
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MONTHS |
|
YEAR |
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ENDED |
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ENDED |
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YEAR ENDED
DECEMBER 31, |
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JUNE 30, |
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JUNE 30, |
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|
1991 |
1992 |
1993 |
1994 |
1995 |
1997 |
1998 |
1999 |
2000 |
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| STATISTICAL
SUMMARY |
|
Rupees in
million |
|
|
|
|
| Gross sales |
|
909 |
833 |
1,143 |
1,409 |
1,699 |
2,054 |
1,170 |
1,013 |
1,558 |
|
| Profit/(loss)
before taxation |
15 |
35 |
154 |
257 |
274 |
36 |
(8) |
12 |
122 |
|
| Taxation |
|
4 |
4 |
5 |
6 |
7 |
9 |
5 |
1 |
38 |
|
| Profit/(loss)
after taxation |
11 |
31 |
149 |
251 |
267 |
27 |
(13) |
11 |
84 |
|
| Gross
assets employed |
|
|
| (including
capital work-in-progress) |
1,452 |
1,290 |
1,365 |
1,443 |
1,481 |
1,477 |
1,446 |
1,392 |
1,317 |
|
| Paid-up capital |
|
374 |
374 |
374 |
448 |
560 |
560 |
560 |
560 |
560 |
|
| Shareholders'
equity |
384 |
416 |
565 |
816 |
985 |
1,012 |
999 |
969 |
997 |
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|
|
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| EARNING
AND PAY OUT |
|
Rs. per
share of Rs. 10 |
|
|
|
|
|
|
|
|
|
| Earnings
per share after taxation |
0.29 |
0.84 |
3.98 |
5.60 |
4.77 |
0.49* |
(0.23) |
0.21 |
1.50 |
|
| Break-up value |
|
10.29 |
11.13 |
15.11 |
18.19 |
17.57 |
18.06 |
17.83 |
17.29 |
17.79 |
|
| Bonus shares |
|
-- |
-- |
1:5 |
1:4 |
-- |
-- |
-- |
-- |
-- |
|
| Cash dividend |
|
-- |
-- |
-- |
-- |
1.75 |
-- |
-- |
0.75 |
1.00 |
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| *The
net earning per share for the year ended June 30,1998 was negative |
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| FINANCIAL
RATIOS |
|
Ratios |
|
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|
|
| Current
Assets: Current Liabilities |
0.66:1 |
0.63:1 |
0.86:1 |
1.12:1 |
1.30:1 |
1.31:1 |
1.34:1 |
1.39:1 |
2.00:1 |
|
| Long-term
Debts: Equity |
62:38 |
55:45 |
42:58 |
25:75 |
13:87 |
7:93 |
2:98 |
0:100 |
0:100 |
|
|
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| PRODUCTION |
|
|
Tonnes |
|
|
|
|
| Polyester
Staple Fibre |
17,457 |
16,673 |
20,858 |
19,430 |
17,834 |
27,290 |
21,055 |
18,745 |
22,142 |
|
| Polyester Chips |
|
-- |
-- |
497 |
772 |
1,267 |
976 |
-- |
-- |
2,834 |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the Fifteenth Annual General Meeting of Pakistan
Synthetics Limited will be |
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| held
on Friday, the 24th November, 2000, at 3.30 p.m. at the General Assembly
Hall, Islamic Chamber of |
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| Commerce
and Industry, ST 2/A, Block-9, K.D.A. Scheme No. 5, Clifton, Karachi -
Pakistan, to transact the |
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| following
business:- |
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| 1.
To confirm the minutes of the Fourteenth Annual General Meeting of the
Company held on |
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| 22nd December, 1999. |
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| 2.
To receive and adopt the Audited Accounts of the Company together with
Directors' and |
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| Auditors'
Reports for the year ended 30th June, 2000. |
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| 3.
To approve the payment of a Final Dividend for the year ended 30th June,
2000, as recommended by |
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| the
Board of Directors. |
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| 4.
To appoint Auditors and fix their remuneration. |
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| 5.
To transact such other ordinary business as may be placed before the meeting
with the |
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| permission
of the Chair. |
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|
By Order of the Board |
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|
UMER HAJI KARIM |
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| Karachi:
20th October, 2000 |
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CHIEF EXECUTIVE |
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| NOTES :- |
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| 1.
The Shares Transfer Books of the Company will remain closed from Friday, 17th
November, 2000 to Monday, |
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| 27th
November, 2000 (both days inclusive). Transfers received at the Registered
Office of the Company at the |
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| close
of business on 16th November, 2000 will be treated in time for the purpose of
determining the entitlement |
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| for
the payment of proposed cash dividend to the transferees and to attend the
Annual General Meeting of the |
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| Company. |
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|
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| 2.
A member of the Company entitled to attend and to vote at the meeting may
appoint any other member as his/ |
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| her
proxy to attend, speak and vote at the meeting on his/her behalf. Instrument
appointing proxies, in order |
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| to
be effective, must be received at the Registered Office of the Company at 3rd
Floor, Karachi Dock Labour |
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| Board
Building, 58-West Wharf Road, Karachi, duly stamped, signed and witnessed not
less than 48 hours |
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| before
the time of holding the meeting. |
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|
|
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| 3.
Account holders and sub-account holders holding book entry securities of the
Company in Central Depository |
|
| Company
of Pakistan Limited, who wish to attend the Annual General Meeting, are
requested to bring original |
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| National
Identity Card with copy thereof duly attested by their Bankers for
identification purpose and should |
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| present
their CDC Account Number. |
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|
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| 4.
The Shareholders are requested to notify the Company if there is any change
in their addresses immediately. |
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| CDC
Account Holders will further have to follow the undermentioned guidelines as
laid down in |
|
| Circular
I dated January 26, 2000 issued by the Securities and Exchange Commission of
Pakistan: |
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| A.
For Attending the Meeting: |
|
|
| i)
In case of individuals, the account holder or sub-account holder and/or the
person whose securities are in group |
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| account
and their registration details are uploaded as per the Regulations, shall
authenticate his identity by |
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| showing
his original National Identity Card (NIC) or original passport at the time of
attending the meeting. |
|
|
| ii)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen signature of the |
|
| nominee
shall be produced (unless it has been provided earlier) at the time of the
meeting. |
|
|
| B.
For Appointing Proxies: |
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| i)
In case of individuals, the account holder or sub-account holder and/or the
person whose securities are in group |
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| account
and their registration details are uploaded as per the Regulations, shall
submit the proxy form as per |
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| the
above requirement. |
|
|
| ii)
The proxy form shall be witnessed by two persons whose names, addresses and
NIC numbers shall be mentioned |
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| on the form. |
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|
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| iii)
Attested copies of NIC or the passport of the beneficial owners and the proxy
shall be furnished with the proxy |
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| form. |
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|
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| iv)
The proxy shall produce his original NIC or original passport at the time of
the meeting. |
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| v)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen signature shall |
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| be
submitted (unless it has been provided earlier) alongwith proxy form to the
Company. |
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|
| REPORT
OF THE DIRECTORS FOR THE YEAR ENDED 30TH JUNE, 2000 |
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| Your
Directors are pleased to present 15th Annual Report of your Company together
with the |
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| Audited
Accounts for the year ended 30th June, 2000. |
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|
|
| BOARD
OF DIRECTORS |
|
| Mr.
Nasim Beg, a Director of the Company resigned and in his place Mr. S. Zubair
Ahmed was |
|
| appointed
as a Director. Mr. Nasim Beg was associated with the Company for last three
years and |
|
| he
actively participated in the meetings of the Company. The Board placed on
record appreciation of |
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| the
valuable services rendered by him. |
|
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| The
Board welcomes Mr. S. Zubair Ahmed as a Director of the Company and hopes
that the |
|
| Company
would be benefited by his active participation. |
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|
| OVERVIEW |
|
| During
the period under review, there was considerable improvement in the overall
performance |
|
| of
the local Polyester Staple Fibre Industry. Fibre consumption in the country
has increased |
|
| considerably
in the last few years. Demand for Polyester Staple Fibre remained strong
during the year |
|
| under
review inspite of sharp decline in the cotton prices. The production,
turnover and profitability of |
|
| your
Company have improved significantly. |
|
|
| PRODUCTION |
|
| The
Company produced 22,142 tons of Polyester Staple Fibre during the year under
review as |
|
| against
18,745 tons of Polyester Staple Fibre in the corresponding period of last
year. In addition, |
|
| 2,834
tons of Polyester Chips were also produced during the year. |
|
|
| FINANCIAL
RESULTS |
|
| The
gross turnover for the year ended 30th June, 2000 increased to Rs. 1,558
million |
|
|
| as
compared to the gross turnover of Rs. 1,013 million for the year ended 30th
June, 1999, which |
|
| was
due to higher sales volume and increase in the selling price of Polyester
Staple Fibre. |
|
|
| The
raw material in-put cost increased during the year under review due to upward
trend in international |
|
| prices
of PTA and MEG resulting in increase in the overall cost of production for
the year under review. |
|
|
| By
the grace of Almighty Allah, the Company earned a net profit, before taxation
of Rs. 121.898 million, |
|
| after
providing for depreciation and financial charges aggregating to Rs. 108.760
million, as against a net profit |
|
| of
Rs.12.340 million in the last year. The net profit, after providing for
taxation and prior years' tax adjustment, |
|
| worked
out to Rs.83.965 million. |
|
|
| Your
Directors are pleased to propose payment of cash dividend of Re. 1/- per
share for the year under |
|
| review
(1999: Re. 0.75 per share). |
|
|
| Accordingly,
the following appropriations have been proposed:- |
|
|
|
|
|
(Rs' 000) |
|
|
|
|
| Net
profit after taxation |
|
83,965 |
|
| Unappropriated
profit brought forward |
|
956 |
|
|
|
|
------------------ |
|
| Profit
available for appropriation |
|
84,921 |
|
|
|
|
| Appropriations:- |
|
| Final
dividend @ Re. 1/- per share of Rs. 10/- each |
|
56,040 |
|
| Transfer
to general reserve |
|
25,000 |
|
|
|
|
------------------ |
|
| Unappropriated
profit carried forward |
|
3,881 |
|
|
|
|
========== |
|
|
| EARNINGS
PER SHARE |
|
| The
net earning per share after providing for taxation for the year ended 30th
June, 2000 |
|
| was
Rs. 1.50 (1999: Re. 0.21). |
|
|
| FUTURE
OUTLOOK |
|
| The
prices of PTA and MEG have shown upward trend in the international market in
view of |
|
| unprecedented
oil crisis. The landed cost of raw materials has risen due to depreciation of
Pak |
|
| currency
by over 10% since July, 2000 and incidence of 30% cash margin on imports.
Increase in the |
|
| cost
of other inputs due to prevailing inflationary trend in the country, increase
in rate of mark-up and |
|
| cost
of power generation due to increase in gas charges would add to the overall
cost of production. |
|
|
| The
local prices of Polyester Staple Fibre have increased in the first quarter of
the current year. |
|
| Future
trend of the local prices of Polyester Staple Fibre, depending upon local as
well as international |
|
| market
forces, would determine the financial results of the Company for the current
year. |
|
|
| Your
Directors are fully cognisant of the present situation and are striving their
best to improve |
|
| the
financial results of the Company by maximizing the production, improving the
operating efficiencies |
|
| and
taking appropriate cost reduction measures. |
|
|
| AUDITORS |
|
| The
present Auditors, M/s. Hyder Bhimji & Co., Chartered Accountants, retire
at the conclusion |
|
| of
the 15th Annual General Meeting and being eligible, offer themselves for
re-appointment as |
|
| auditors
of the Company. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| A
Statement showing the pattern of shareholding in the Company as on 30th June,
2000 is |
|
| attached
to this report on Page. 31. |
|
|
| ACKNOWLEDGEMENT |
|
| The
Management Employees relations remained cordial throughout the year. The
Management |
|
| expresses
its gratitude for the continuing support and hardwork rendered by its
employees and |
|
| workers
for the progress of the Company. |
|
|
|
|
For and on behalf of |
|
|
|
Board of Directors |
|
|
|
|
|
|
|
|
UMER HAJI KARIM |
|
| Karachi:
20th October, 2000 |
|
CHIEF EXECUTIVE |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of PAKISTAN SYNTHETICS LIMITED as at
June 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 internal control, |
|
| and
prepare and present the above said statements in conformity with the approved
accounting standard 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, 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 June
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 established
under section |
|
| 7
of that Ordinance. |
|
|
|
|
|
HYDER BHIMJI & CO. |
|
| Karachi:
20th October, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees in
thousand) |
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorised
Capital |
|
| 70,000,000
(1999: 70,000,000) ordinary shares of |
|
| Rs. 10 each |
|
|
700,000 |
700,000 |
|
|
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid-up capital |
3 |
560,400 |
560,400 |
|
| Revenue
reserves |
|
4 |
432,500 |
407,500 |
|
| Unappropriated
profit |
|
|
3,881 |
956 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
996,781 |
968,856 |
|
|
|
|
| REDEEMABLE
CAPITAL |
|
5 |
-- |
-- |
|
|
| DEFERRED
LIABILITIES |
|
6 |
49,038 |
11,310 |
|
|
|
|
| CURRENT
LIABILITIES AND PROVISIONS |
|
| Short
- term running finance utilized |
|
|
| under
mark up arrangement |
|
7 |
-- |
232,782 |
|
| Current
portion of redeemable capital |
5 |
-- |
16,160 |
|
| Creditors,
accrued and other liabilities |
8 |
206,611 |
109,515 |
|
| Taxation |
|
|
8,920 |
11,760 |
|
| Proposed
dividend |
|
|
56,040 |
42,030 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
271,571 |
412,247 |
|
| CONTINGENT
LIABILITIES AND CAPITAL COMMITMENTS |
9 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
TOTAL |
1,317,390 |
1,392,413 |
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
fixed assets |
|
10 |
749,634 |
815,291 |
|
| Capital
work - in - progress |
|
11 |
20,486 |
450 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
770,120 |
815,741 |
|
|
|
|
|
| LONG
- TERM LOANS AND ADVANCES |
12 |
317 |
898 |
|
| LONG
- TERM DEPOSITS |
|
|
2,601 |
2,601 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
13 |
112,262 |
105,105 |
|
| Stock-in-trade |
|
14 |
261,251 |
264,137 |
|
| Trade debts |
|
15 |
95,430 |
110,685 |
|
| Loans
and advances |
|
16 |
1,886 |
1,364 |
|
| Trade
deposits and short-term prepayments |
17 |
-- |
1,067 |
|
| Other
receivables |
|
18 |
45,125 |
70,025 |
|
| Cash
and bank balances |
|
19 |
28,398 |
20,790 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
544,352 |
573,173 |
|
|
------------------ |
------------------ |
|
| TOTAL |
|
|
1,317,390 |
1,392,413 |
|
|
|
|
========== |
========== |
|
|
|
EBRAHIM HAJI KARIM |
|
|
UMER HAJI KARIM |
|
|
CHAIRMAN |
|
|
CHIEF EXECUTIVE |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees in
thousand) |
|
|
|
|
| Net sales |
|
20 |
1,347,822 |
883,912 |
|
| Cost
of goods sold |
|
21 |
1,169,650 |
791,913 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
178,172 |
91,999 |
|
| Administration
and general expenses |
22 |
25,948 |
27,140 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
152,224 |
64,859 |
|
| Other income |
|
23 |
966 |
586 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
153,190 |
65,445 |
|
| Financial
charges |
|
24 |
24,802 |
52,401 |
|
| Other charges |
|
25 |
6,490 |
704 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
121,898 |
12,340 |
|
| Taxation |
|
27 |
37,933 |
614 |
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
83,965 |
11,726 |
|
| Unappropriated
profit/(accumulated loss) brought forward |
956 |
(11,240) |
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
84,921 |
486 |
|
|
| Appropriations: |
|
| Transfer
(to)/from revenue reserve |
|
(25,000) |
42,500 |
|
| Proposed
final dividend @ Re. 1/- per share |
|
|
|
| of
Rs. 10/- each (1999: Re. 0.75) |
|
(56,040) |
(42,030) |
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
3,881 |
956 |
|
|
========== |
========== |
|
|
|
Rs. |
Re. |
|
|
|
|
|
| Earnings
per share |
|
28 |
1.50 |
0.21 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
EBRAHIM HAJI KARIM |
|
UMER HAJI KARIM |
|
|
CHAIRMAN |
|
CHIEF EXECUTIVE |
|
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
|
(Rupees in
thousand) |
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
|
121,898 |
12,340 |
|
| Adjustments
for: |
|
|
|
|
| Depreciation |
|
|
83,958</ |
