| Shahtaj Textile Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Annual General Meeting |
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| Directors'
Report to the Shareholders |
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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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| Statement
of Changes in Financial Position |
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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 |
Mr. Muneer Nawaz
(Chairman) |
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Mr. M. Naeem (Chief
Executive) |
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Mr. Mahmood Nawaz |
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Mr. C.M. Khalid |
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Begum Majeeda Shahnawaz |
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Mrs. Amtul Bari Naeem |
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Mrs. Bushra Mahmood Nawaz |
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Lt. Col. (Retd.) R.D.
Shams |
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| COMPANY
SECRETARY |
Mr. Jamil Ahmad Butt,
FCMA |
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| AUDITORS |
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Messrs Ford, Rhodes.
Robson, Morrow |
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Chartered Accountants |
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1st Floor, Finlay House |
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I.I. Chundrigar Road |
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Karachi. |
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| BANKERS |
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Habib Bank Limited |
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Emirates Bank
International |
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The Bank of Khyber |
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Standard Chartered Bank |
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United Bank Limited |
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The Bank of Punjab |
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Prime Commercial Bank
Limited |
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Bank Al-Falah Limited |
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| LEGAL
ADVISORS |
Mr. Ras Tariq Chaudhary |
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30-Mall Mansion |
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The Mall |
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Lahore. |
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| HEAD OFFICE |
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Shahnawaz Building |
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19-Dockyard Road |
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West Wharf |
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Karachi-74000 |
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| REGISTERED
OFFICE |
39-A, Zafar Ali Road |
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Gulberg-V |
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Lahore. |
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| FACTORY |
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46 K.M. Lahore/Multan
Road |
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Chunian Industrial Estate |
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Bhai Pheru, Distt. Kasur. |
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| SHARE
REGISTRARS |
Messrs Ford, Rhodes,
Robson, Morrow |
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Management Consultancy
Services |
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12/A, 1st Floor, Writers
Chamber |
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Mumtaz Hassan Road |
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Off: I.I. Chudrigar Road,
Karachi. |
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Tel: 2427497 |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| To, |
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| All
the Shareholders, |
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| Notice
is hereby given to all the shareholders of SHAHTAJ TEXTILE LIMITED that the
11th Annual |
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| General
Meeting of the Company will be held on Monday, the 26th March, 2001 at 11:00
A.M. at |
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| 83,
Shahrah-e-Quaid-e-Azam, Lahore to transact the following business:- |
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| A.
ORDINARY BUSINESS: |
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| 1.
To confirm the minutes of 10th Annual General Meeting held on 29th March,
2000. |
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| 2.
To receive, consider and adopt audited accounts of the Company for the year
ended September 30, |
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| 2000
together with Auditors' and Directors' Reports thereon. |
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| 3.
To approve a cash Dividend @ 30% i.e. Rs.3.00 per share for the year ended
September 30, 2000 as |
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| recommended
by the Directors. |
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| 4.
To appoint Auditors for the year 2000-2001 and to fix their remuneration. The
present Auditors |
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| M/s.
Ford, Rhodes, Robson, Morrow, Chartered Accountants, being eligible, have
offered themselves |
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| for
reappointment. |
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| 5.
To transact any other ordinary business with the permission of the Chair. |
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| B.
SPECIAL BUSINESS: |
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| 6.
To consider and if thought fit to pass with or without modification the
following as a Special |
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| Resolution: |
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| "RESOLVED
that Article 65 of the Articles of Association of the Company be amended to
increase |
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| the
remuneration for attending the meetings to the Board of Directors to Rs.
2000/= per meeting |
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| from
existing Rs.500/=." |
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By Order of the Board |
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|
JAMIL AHMAD BUTT |
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| Karachi:
February 22. 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 16th March,
2001 to 28th |
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| March,
2001 (both days inclusive.) |
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| 2.
A member entitled to attend and vote at this meeting may appoint another
member as his/her |
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| proxy
to attend and vote. Proxies in order to be effective must be received at the
Company's |
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| Registered
Office not less than 48 hours before the meeting and must be duly stamped,
signed and |
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| witnessed. |
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| 3.
Holders of Accounts and Sub-accounts for Company's Shares in Central
Depository Company of |
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| Pakistan
Limited, who wish to attend this Annual General Meeting may do so by
identifying |
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| themselves
through original I.D. Card/Passport and providing a copy thereof. |
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| Statement
under section 160 of the Companies Ordinance, 1984: |
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| The
fee for attending the board meetings, fixed since inception, is due for
review in line with the all |
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| around
changes. The Directors are interested in this change to the extent of fees
receivable by them on |
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| attending
these meetings. |
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| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
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| The
Directors are pleased to present their 11th Annual Report on company's
performance and Audited |
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| Accounts
of the Company for the year ended 30th September, 2000. |
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| By
the Grace of God Company's operating results, when compared with the last
year. have improved in all |
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| respects.
The Sales increased by 11% and now stand at Rs. 474 million. Gross profit
also increased to |
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| 17%.
This resulted in pre-tax profit of Rs. 56 million which is 29% higher than
the corresponding figure |
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| of the last year. |
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| Directors
acknowledge with thanks the hard work put in by all the employees of the
Company, which |
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| bearing
fruits, and Company is progressing ahead. |
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| Prospects |
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| Starting
from last year, the textile sector lost its buoyancy, which it enjoyed during
the preceding years. |
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| As
it result of down turn in the U.S. market and depressed value of Euro as well
as arrival of China as a big |
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| player
in quality textile fabrics, the price position has come under extreme
pressure. Therefore the textile |
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| fabric
industry is looking at the current year with a great deal of caution. Due to
reduced demand of fabric |
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| the
spinning sector is also facing difficulties. |
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| The
management of the company will continue to strive hard and, relying on its
flexible production and |
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| quality
premium of its fabric expects to tie over this difficult period with
relatively better results. |
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| Expansion
Programme |
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| The
Company has successfully implemented its expansion programme of adding of 18
Nos new wider |
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| width
Picanol Looms well within the stipulated budgets. The new Loom Shed has
attained satisfactory |
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| quality
and efficiency level. This will help the Company to increase its sales and
distribute some of the |
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| fixed
cost over larger production. More over the new looms will enable the company
to produce designed |
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| fabrics also. |
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| Dividend |
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| With
continued policy to share profits with the shareholders, your Directors are
pleased to recommend a |
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| cash
dividend of 30% for this year. They also recommend to transfer Rs. 15 million
to the general reserve. |
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| Directors |
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| There
has been no change and all the Directors are contributing towards betterment
of the Company. |
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| Auditors |
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| Messrs
Ford, Rhodes, Robson, Morrow, Chartered Accountants are Company's Auditors
and being eligible |
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| have
expressed their willingness to act as Auditors for the year 2000-2001. |
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| Pattern
of Shareholding |
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| The
pattern of shareholding as on 30th September, 2001 is enclosed to this
report. |
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for and on behalf of the Board of Directors |
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(M. NAEEM) |
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| Karachi:
Feb, 22nd, 2001 |
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Chief Executive |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of SHAHTAJ TEXTILE
LIMITED as at September 30, 2000 |
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| and
the related profit and loss account. cash flow statement and statement of
changes in equity together |
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| with
the notes forming part thereof for the year then ended and we state that we
have obtained all the |
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| information
and explanations which, to the best of our knowledge and belief. were
necessary for the |
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| purposes
of our audit. |
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| 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 |
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| and
the requirements of the Companies Ordinance, 1984. Our responsibility is to
express an opinion on |
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| these
statements based on our audit. |
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| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These Standards |
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| require
that we plan and perform the audit to obtain reasonable assurance about
whether the above said |
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| statements
are free of any material misstatement. An audit includes examining, on a test
basis, evidence |
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| supporting
the amounts and disclosures in the above said statements. An audit shall also
include assessing |
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| the
accounting policies and significant estimates made by management, as well as,
evaluating the overall |
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| presentation
of the above said statements. We believe that our audit provides a reasonable
basis for our |
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| opinion
and, after due verification, we report that: |
|
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| (a)
in our opinion, proper books of accounts have been kept by the company as
required by the Companies |
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| Ordinance,
1984; |
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|
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| (b)
in our opinion:- |
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|
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| (i)
the balance sheet and profit and loss account together with the notes thereon
have been drawn |
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| up
in conformity with the Companies Ordinance, 1984, and are in agreement with
the books |
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| of
account and are further in accordance with accounting policies consistently
applied except |
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| for
the change as stated in note 2.3 to the accounts with which we concur: |
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|
|
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| (ii)
the expenditure incurred during the year was for the purpose of the company's
business; and |
|
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| (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. |
|
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| (c)
in our opinion and to the best of our information and according to the
explanations given to us, the |
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| balance
sheet, profit and loss account, cash flow statement and statement of changes
in equity |
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| together
with the notes forming part thereof conform with approved accounting
standards as |
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| applicable
in Pakistan, and, give the information required by the Companies Ordinance,
1984 in the |
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| manner
so required and respectively give a true and fair view of the state of the
company's affairs |
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| as
at September 30, 2000 and of the profit, its cash flows and changes in equity
for the year then |
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| ended; and |
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| (d)
in our opinion, Zakat deductible at source under Zakat and Ushr Ordinance,
1980 (XVIII of 1980), |
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| was
deducted by the company and deposited in the Central Zakat Fund established
under section 7 |
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| of
that Ordinance; |
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|
Ford, Rhodes, Robson, Morrow |
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| Karachi
- February 23, 2001. |
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Chartered Accountants |
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| BALANCE
SHEET AS AT SEPTEMBER 30, 2000 |
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|
2000 |
1999 |
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|
Note |
Rupees |
Rupees |
|
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| TANGIBLE
FIXED ASSETS |
|
| Operating
fixed assets |
|
3 |
116,924,483 |
122,268.68 |
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| Capital
work-in-progress |
|
4 |
118,064,914 |
-- |
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|
|
------------------ |
------------------ |
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|
|
|
234,989,397 |
122,268,681 |
|
|
|
|
| LONG
TERM LOAN |
|
|
-- |
20,453 |
|
|
|
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|
| LONG
TERM DEPOSITS AND |
|
|
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| DEFERRED
COST |
|
5 |
1,301,445 |
441,091 |
|
|
|
|
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| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
6 |
11,800,162 |
16,077,361 |
|
| Stock-in-trade |
|
7 |
35,024,820 |
31,150,973 |
|
| Trade debts |
|
8 |
37,899,008 |
45,837,654 |
|
| Advances,
deposits, prepayments and |
|
|
| other
receivables |
|
9 |
10,784,939 |
5,311,590 |
|
| Cash
and bank balances |
|
10 |
13,985,801 |
9,932,642 |
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|
|
|
------------------ |
------------------ |
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|
|
|
109,494,730 |
108,310.22 |
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|
|
|
------------------ |
------------------ |
|
|
|
|
345,785,572 |
231,040,445 |
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|
========== |
========== |
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|
|
M. NAEEM |
|
|
|
Chief Executive |
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| SHARE
CAPITAL AND RESERVES |
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|
| Share capital |
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| Authorised |
|
| 10,000,000
ordinary shares of Rs. 10 each |
|
100,000,000 |
100,000,000 |
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|
========== |
========== |
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| Issued,
subscribed and paid-up capital |
11 |
84,000,000 |
84,000,000 |
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| Revenue
reserves |
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| General reserve |
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|
60,000,000 |
45,000,000 |
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| Unappropriated
profit |
|
|
2,766,458 |
3,294,216 |
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|
------------------ |
------------------ |
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|
|
|
146,766.46 |
132,294,216 |
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| REDEEMABLE
CAPITAL |
|
12 |
-- |
1,716.60 |
|
| LONG
TERM LOANS |
|
13 |
100,000,000 |
-- |
|
| OBLIGATION
UNDER FINANCE LEASES |
14 |
1,818,465 |
521,685 |
|
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
| Provision
for gratuity |
|
|
6,121,950 |
4,575,132 |
|
| Deferred
taxation |
|
|
5,957,574 |
3,501,028 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term finances |
|
15 |
7,350,000 |
30,159.29 |
|
| Current
portion of long term liabilities |
16 |
1,716,598 |
2,207,520 |
|
| Current
portion of obligation under finance leases |
14 |
1,468,948 |
1,483,654 |
|
| Creditors,
accrued and other liabilities |
17 |
27,617,109 |
19,233.36 |
|
| Provision
for taxation |
|
|
21,768,470 |
18,547,970 |
|
| Proposed
Dividend |
|
|
25,200,000 |
16,800,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
85,121,125 |
88,431,786 |
|
| CONTINGENCY &
COMMITMENTS |
18 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
345,785,572 |
231,040,445 |
|
|
|
========== |
========== |
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| The
annexed notes form an integral part of these accounts. |
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|
|
MUNEER NAWAZ |
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|
|
Director |
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|
|
| PROFIT
AND LOSS ACCOUNT |
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| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Net sales |
|
19 |
474,082,105 |
426,557,239 |
|
| Cost
of goods sold |
|
20 |
392,969,909 |
358,667,601 |
|
|
|
|
------------------ |
------------------ |
|
| Gross Profit |
|
|
81,112,196 |
67,889,638 |
|
| Other income |
|
21 |
1,420,820 |
1,102,505 |
|
|
|
|
|
|
| Administrative
expenses |
|
22 |
13,885,016 |
12,258,386 |
|
| Selling
expenses |
|
24 |
1,452,986 |
3,111,777 |
|
| Other charges |
|
25 |
3,712,818 |
3,166,889 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
19,050,820 |
18,537,052 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
Profit |
|
|
63,482,196 |
50,455,091 |
|
| Financial
charges |
|
26 |
7,765,924 |
7,054,515 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
55,716,272 |
43,400,576 |
|
| Taxation |
|
27 |
16,044,030 |
8,563,855 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
39,672,242 |
34,836,721 |
|
| Unappropriated
profit brought forward |
|
3,294,216 |
4,257,495 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
42,966,458 |
39,094,216 |
|
|
|
| Appropriations: |
|
|
| Transfer
to general reserve |
|
1,150,000,001 |
19,000,000 |
|
| Proposed
dividend @30% (1999: @ 20%) |
|
25,200,000 |
16,800,000 |
|
|
|
------------------ |
------------------ |
|
|
|
|
40,200,000 |
35,800,000 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
2,766,458 |
3,294,216 |
|
|
|
|
========== |
========== |
|
| Basic
Earnings Per Share |
|
28.1 |
4.72 |
4.15 |
|
|
|
|
========== |
========== |
|
| Diluted
Earnings Per Share |
|
28.2 |
4.72 |
4.16 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
M. NAEEM |
|
MUNEER NAWAZ |
|
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
|
| FOR
THE YEAR ENDED SEPTEMBER, 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
| Profit
before taxation |
|
|
55,716,272 |
43,400,576 |
|
| Adjustment for: |
|
|
|
|
| Depreciation |
|
|
12,731,396 |
13,255.45 |
|
| Profit
on sale of fixed assets |
|
|
(821) |
-- |
|
| Amortization
of deferred cost |
|
|
14,046 |
131,852 |
|
| Provision
for gratuity - Net |
|
|
1,546,818 |
1,016,764 |
|
| Financial
expenses |
|
|
7,765,924 |
7,054,515 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
22,057,363 |
21,458,578 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
77,773,635 |
64,859.15 |
|
|
|
|
|
| Movement
in working capital: |
|
| (Increase)
in stocks |
|
|
403,352 |
(15,085,197) |
|
| Decrease
in trade debts |
|
|
7,938,646 |
6,403,387 |
|
| (Increase)
in advances and deposits |
|
(5,473,349) |
(1,308,674) |
|
| Decrease
in short term investment |
|
-- |
220,000 |
|
| Increase
in creditors |
|
|
5,814,333 |
1,561,637 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
8,682,982 |
(8,208,847) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
86,456,617 |
56,650,307 |
|
|
|
|
| Payments for: |
|
| Financial
expenses |
|
|
(5,668,549) |
(7,077,612) |
|
| Taxes |
|
|
(10,366,984) |
(2,007,133) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated from operating activities |
|
70,421,084 |
47,565,562 |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Capital
expenditure |
|
|
(7,421,377) |
(5,442,768) |
|
| Capital
work-in-progress |
|
(118,064,914) |
929,124 |
|
| Proceed
from sale of fixed assets |
|
|
35,000 |
-- |
|
| Long
term loan and advances |
|
|
(1,052,547) |
(12,900) |
|
|
------------------ |
------------------ |
|
| Net
cash (used) in investing activities |
|
(126,503,838) |
(4,526,544) |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| (Payments)/Proceeds
of export refinance |
|
7,350,000 |
(25,400,000) |
|
| Proceeds
from long term borrowing |
|
97,792,480 |
(3,663,632) |
|
| Lease finance |
|
1,480,674 |
(692,516) |
|
| Dividend paid |
|
|
(16,327,956) |
(20,323,081) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated/(used) from financing activities |
90,295,198 |
(50,079,229) |
|
|
|
|
------------------ |
------------------ |
|
| Net
(decrease)/increase in cash and cash equivalent |
34,212,444 |
(7,040,211) |
|
| Cash
and cash equivalents at the beginning of the year |
(20,226,643) |
(13,186,432) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of the year |
|
13,985,801 |
(20,226,643) |
|
|
========== |
========== |
|
| CASH
AND CASH EQUIVALENTS |
|
| Cash
and bank balances |
|
|
13,985,801 |
9,932,642 |
|
| Short
term running finance |
|
|
-- |
(30,159,285) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
13,985,801 |
(20,226,643) |
|
|
|
|
========== |
========== |
|
|
|
|
|
M. NAEEM |
|
|
MUNEER NAWAZ |
|
|
Chief Executive |
|
|
Director |
|
|
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
Share Capital |
|
Revenue Reserves |
|
|
|
Issued, |
General |
Unappropriated |
|
|
|
subscribed & |
reserve |
profit |
Total |
|
|
paid up capital |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
| Balance as at |
|
| September
30, 1998 |
