| Chenab Fibres Limited |
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| Annual
Report 1999 |
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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 |
|
| Auditors'
Report to the Members |
|
| Balance Sheet |
|
|
| Profit
& Loss Account |
|
| Statement
of Changes in Financial Position (Cash Flow Statement) |
|
| Notes
to the Accounts |
|
| Pattern
of Holdings of the Shares |
|
|
|
| Company
Information |
|
|
| Chairman |
|
Haji Mohammad Saleem |
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| Chief Executive |
|
Mian Mohammad Latif |
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|
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| Directors |
|
Mian Mohammad Javaid
Iqbal |
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|
|
Mr. Mohammad Naeem |
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|
Mr. Mohammad Faisal Latif |
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|
Mst. Sughran Begum |
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|
Mst. Shahnaz Latif |
|
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|
Mr. Mohammad Naeem
Khalid. |
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|
(Nominee ICP) |
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| Bankers/Financial
Institutions |
Askari Commercial Bank
Ltd. |
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|
Habib Bank Limited |
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|
The Bank of Punjab |
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|
United Bank Limited |
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| Company
Secretary |
Mr. Mohammad Arshad |
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|
| Auditors |
|
M. Yousuf Adil Saleem
& Co., |
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|
Chartered Accountants, |
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|
Regency Arcade,
Faisalabad. |
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| Legal Advisor |
|
Ch. Shahid Mehmood
(Advocate) |
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| Registered
Office |
Nishatabad, Faisalabad. |
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| Mills |
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3rd Kilometer, Shorkot
Road, |
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|
Toba Tek Singh. |
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| Notice
of Annual General Meeting |
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| Notice
is hereby given that the 10th Annual General Meeting of the shareholders of
CHENAB FIBRES LIMITED |
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| will
be held at 11.00 a.m. on Thursday, the 30th March, 2000 at the Registered
Office of the Company at |
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| Nishatabad,
Faisalabad to transact the following business:- |
|
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| A.
ORDINARY BUSINESS |
|
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| 1.
To confirm the minutes of the Last meeting. |
|
|
| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended September |
|
| 30,
1999 together with Directors and Auditors Reports thereon. |
|
|
| 3.
To approve cash dividend @ 10% (Rs. 1 per share) on the ordinary share
capital of the company as |
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| recommended
by the Board of Directors, except shareholding of the Directors and their
relatives/ |
|
| friends. |
|
|
| 4.
To appoint auditors and fix their remuneration for the year 1999-2000. The
retiring Auditors, M/s. |
|
| M.
Yousuf Adil Saleem & Company, Chartered Accountants, being eligible,
offer themselves for re- |
|
| appointment. |
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|
|
|
|
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| 5.
To elect 9 Directors of the Company in accordance with the provisions of
Section 178 of the |
|
| Companies
Ordinance 1984 for a term of 3 years commencing from March 30, 2000. The
number of |
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| Directors
of the Company to be elected, as fixed by the Board of Directors in their
meeting held on |
|
| 23rd
February, 2000 is nine. |
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|
|
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| The
following are the names of the retiring Directors:- |
|
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| i)
Haji Mohammad Saleem |
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ii) Mian Mohammad Latif |
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| iii)
Mian Mohammad Javed Iqbal |
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iv) Mr. Mohammad Naeem |
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| v)
Mr. Mohammad Faisal Latif |
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vi) Mst. Sughran Begum |
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| vii)
Mst. Shahnaz Latif |
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viii) Mr. Mohammad Naeem
Khalid (Nominee ICP) |
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| 6.
Any other matter with the permission of the Chair. |
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|
By order of the Board |
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| Faisalabad |
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|
|
(MOHAMMAD ARSHAD) |
|
| 08th
March, 2000 |
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|
COMPANY SECRETARY |
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|
| NOTES: |
|
|
| 1.
Any person who seeks to contest elections to the office of Director of the
Company shall file with |
|
| the
Company at its Registered Office, a notice of his/her intention to offer
himself/herself for |
|
| election
not Later than 14 days before the date of the Annual General Meeting. |
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|
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| 2.
Share Transfer Books of the Company will remain closed from 24th, March, 2000
to 30th |
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| March
2000 (both days inclusive). |
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| 3.
The members eligible to attend and vote at this meeting may appoint another
member as his/her |
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| proxy
to attend and vote instead of him/her. Proxies in order to be effective must
reach the |
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| Company's
Registered Office duly signed, stamped and witnessed not Later than 48 hours
before |
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| the
time of holding the meeting. |
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|
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| 4.
The shareholders who are not liable to pay Zakat at source, are requested to
send their declaration |
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| and
affidavit for claiming exemption from Zakat under Zakat Usr ordinance, 1980. |
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|
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| 5.
Shareholders are requested to notify immediately the change if any in their
addresses. |
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| Directors'
Report to the Shareholders |
|
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| With
profound gratitude of Almighty Allah, I on behalf |
|
| of
the Board place before you the 10th Annual Report |
|
| of
your Company for the year ended 30th September, 1999. |
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| SALES |
|
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| The
Sales Revenue has been earned at Rs. 585.301 |
|
| million
as against Rs. 524.682 million of the last year |
|
| depicting
thereby an increase of 11.55%. |
|
|
| FINANCIAL
RESULTS |
|
| There
has been a profit of Rs. 15.150 million after |
|
| taxation
for the year under report and the Directors |
|
| recommend
its appropriation as under:- |
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|
|
|
Amount |
|
|
|
|
|
Rupees |
|
|
|
|
|
|
|
|
|
| Profit/(Loss)
for the year |
|
|
|
19,672,159 |
|
|
| Add/(Less):
Taxation (Net) |
|
|
|
(4,521,591) |
|
|
|
|
|
------------------ |
|
|
| Profit/(loss)
after Taxation |
|
|
|
15,150,568 |
|
|
| Appropriation |
|
|
|
|
|
|
| Proposed
dividend @ 10% |
|
|
|
1,931,800 |
|
|
| Net
profit/(Loss) after appropriation |
|
|
13,218,768 |
|
|
| Accumulated
(Loss) Brought Forward |
|
|
(24,861,931) |
|
|
|
|
------------------ |
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| Accumulated
(Loss) carried to Balance Sheet |
|
|
(11,643,163) |
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|
|
|
========== |
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| DIVIDEND |
|
|
| In
order to reduce the accumulated Loss sustained by he Company as much as
possible the directors, their |
|
| relatives
and friends have considered it appropriate to forego again their share from
the proposed dividend |
|
| being
recommended for the year under report extending their gesture for the Larger
interest of the Company. |
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|
|
|
| YEAR
2000 COMPLIANCE OF COMPUTER SYSTEM |
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| All
hardwares and softwares of the Company are now year 2000 compliant. |
|
|
| FUTURE
PROSPECTS |
|
| In
view of good quality cotton crop and its availability on economical prices
this year coupled with favourable |
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| marketing
conditions the textile spinning industry is in the process of coming out from
financial crisis |
|
| prevailing
since Long. If the conditions remain as such in years to come, it shall
Inshallah, play a significant |
|
| role
in strengthening the economy of the country as it has contributed a Long time
before in the past. |
|
|
| BOARD
OF DIRECTORS |
|
| Since
the tenure of present Board of Directors is expiring on March 30, 2000
therefore, election of Directors |
|
| shall
take place accordingly for the next term of three years in the forthcoming
Annual General Meeting. |
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|
| PATTERN
OF SHARE HOLDING |
|
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| The
pattern of holding of shares is annexed. |
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| ACKNOWLEDGMENT |
|
|
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| The
Directors thank the bankers of the Company for extending their financial
assistance during the year. The |
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|
|
|
| Directors
place on record appreciation for hard work and dedicated services rendered by
the employees of the |
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| Company
during this period. |
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|
For and on behalf of |
|
|
|
BOARD OF DIRECTORS |
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|
|
|
|
| FAISALABAD |
|
(MIAN MOHAMMAD LATIF) |
|
| March
8, 2000 |
|
|
|
Chief Executive |
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|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Chenab Fibres Limited as at
September 30, 1999 and the |
|
| related
profit and loss account and statement of changes in financial position (cash
flow statement), 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 and, after due verification thereof, we report that: |
|
|
| (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 together with the notes thereon |
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| 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 except for the change referred in note 2.2 with |
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| which
we concur; |
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|
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the Company's |
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| business; and |
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|
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| (iii)
the business conducted, investments made and the expenditure incurred during |
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| the
year were 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 balance sheet, profit and loss account and statement of changes in
financial |
|
| position
(cash flow statement), together with the notes forming part thereof, 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, 1999 and of the profit and changes in financial position for the year
then |
|
| ended; and |
|
|
|
|
| (d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980, was |
|
| deducted
by the Company and deposited in the Central Zakat Fund established under |
|
| Section
7 of that Ordinance. |
|
|
|
|
| FAISALABAD |
|
|
(M. YOUSUF ADIL SALEEM & CO.,) |
|
| March 8, 2000 |
|
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at September 30, 1999 |
|
|
| CAPITAL
& LIABILITIES |
|
Note |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| SHARE
CAPITAL |
|
|
|
|
|
|
|
| Authorised
capital |
|
|
|
| 10,000,000
Ordinary shares of Rs. 10/- each |
|
100,000,000 |
100,000,000 |
|
|
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid up capital |
|
|
|
|
| 7,500,000
Ordinary shares of Rs. 10/- each |
|
75,000,000 |
75,000,000 |
|
| Accumulated
Loss |
|
(11,643,163) |
(24,861,931) |
|
|
|
------------------ |
------------------ |
|
|
|
|
63,356,837 |
50,138,069 |
|
|
|
|
|
|
| LONG
TERM LOANS |
|
3 |
154,146,943 |
145,965,024 |
|
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
| Custom levies |
|
4 |
937,561 |
1,875,122 |
|
| Financial
charges |
|
5 |
-- |
30,429,842 |
|
| Staff
retirement gratuity |
|
|
2,170,217 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
3,107,778 |
32,304,964 |
|
| CURRENT
LIABILITIES |
|
|
|
|
| Short
term borrowings |
|
6 |
20,502,063 |
5,241,568 |
|
| Current
portion of long term liabilities |
|
7 |
24,786,150 |
17,251,784 |
|
| Creditors,
accrued and other liabilities |
|
8 |
28,843,453 |
22,654,754 |
|
| Taxation |
|
|
5,549,253 |
4,212,552 |
|
| Dividend |
|
9 |
2,041,217 |
1,471,725 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
81,722,136 |
50,832,383 |
|
| CONTINGENCIES |
|
10 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
302,333,694 |
279,240,440 |
|
|
|
|
|
========== |
========== |
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
|
| Operating
assets |
|
11 |
210,507,491 |
222,508,212 |
|
| Capital
work in progress - Civic work |
|
|
2,369,076 |
283,013 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
212,876,567 |
222,791,225 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores,
spares and loose tools |
|
12 |
3,215,741 |
2,490,955 |
|
| Stock in trade |
|
|
13 |
31,739,781 |
14,946,651 |
|
| Trade debts |
|
|
14 |
30,967,886 |
12,081,612 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
15 |
21,072,164 |
25,610,137 |
|
| Cash
and bank balances |
|
16 |
2,461,555 |
1,319,860 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
89,457,127 |
56,449,215 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
302,333,694 |
279,240,440 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| NOTE:
The annexed Notes from 1 to 30 form an integral part of these accounts. |
|
|
|
|
|
(MIAN MOHAMMAD LATIF) |
|
(MOHAMMAD NAEEM) |
|
|
Chief Executive |
|
Director |
|
|
|
|
|
|
|
| Profit
& Loss Account |
|
| for
the year ended September 30, 1999 |
|
|
|
Note |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Sales |
|
|
584,530,279 |
523,877,028 |
|
| Cost
of goods sold |
|
502,265,508 |
484,410,102 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
|
82,264,771 |
39,466,926 |
|
|
|
|
|
|
| Operating
expenses |
|
|
|
| Administration |
|
|
19 |
9,822,534 |
5,713,078 |
|
| Selling |
|
20 |
1,834,200 |
2,589,956 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
11,656,734 |
8,303,034 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
|
70,608,037 |
31,163,892 |
|
| Other income |
|
|
21 |
316,377 |
539,505 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
70,924,414 |
31,703,397 |
|
|
|
|
| Other charges |
|
|
|
| Financial |
|
|
22 |
50,216,878 |
33,273,284 |
|
| Workers'
Profit Participation Fund |
|
|
1,035,377 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
51,252,255 |
33,273,284 |
|
|
|
|
------------------ |
------------------ |
|
| Net
profit / (loss) for the year before taxation |
|
19,672,159 |
(1,569,887) |
|
| Taxation |
|
|
23 |
|
|
| Current |
|
|
(2,922,000) |
(2,623,062) |
|
| Prior years' |
|
|
(1,599,591) |
7,802,883 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(4,521,591) |
5,179,821 |
|
|
|
|
------------------ |
------------------ |
|
| Net
profit for the year after taxation |
|
|
15,150,568 |
3,609,934 |
|
| Appropriation |
|
|
|
|
| Proposed
cash dividend @ 10% (1998 @ 7.5%) |
|
|
1,931,800 |
1,471,725 |
|
|
|
|
------------------ |
------------------ |
|
| Net
Profit after appropriation |
|
|
13,218,768 |
2,138,209 |
|
| Accumulated
toss brought forward |
|
|
(24,861,931) |
(27,000,140) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
toss carried forward |
|
|
(11,643,163) |
(24,861,931) |
|
|
|
|
------------------ |
------------------ |
|
| Earnings
per share - Basic |
|
27 |
2.02 |
0.48 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes from 1 to 30 form and integral |
|
| part
of these account. |
|
|
|
|
(MIAN MOHAMMAD LATIF) |
|
(MOHAMMAD NAEEM) |
|
|
Chief Executive |
|
Director |
|
|
|
| Statement
of Changes in Financial Position |
|
| (Cash
Flow Statement) |
|
| for
the year ended September 30, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| a)
CASH FLOW FROM OPERATING ACTIVITIES |
|
| Net
Profit/(loss) before taxation |
|
|
|
19,672,159 |
(1,569,887) |
|
| Depreciation |
|
|
|
|
12,152,424 |
12,615,965 |
|
| Gain
on disposal of fixed assets |
|
|
|
(167,400) |
(66,688) |
|
| Financial
charges |
|
|
|
50,216,878 |
33,273,284 |
|
| Provision
for gratuity |
|
|
|
2,170,217 |
-- |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
|
84,044,278 |
44,252,674 |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Changes
in working capital |
|
|
|
|
|
| (Increase)
/ decrease in current assets |
|
|
|
|
| Stores,
spares and loose tools |
|
(724,786) |
188,609 |
|
|
| Stock in trade |
|
|
(16,793,130) |
(3,671,648) |
|
| Trade debts |
|
|
(18,886,274) |
9,983,958 |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables |
|
4,537,973 |
(6,062,401) |
|
| Increase
in current liabilities |
|
|
|
|
|
| Creditors,
accrued and other liabilities |
|
|
1,860,336 |
6,686,185 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(30,005,881) |
7,124,703 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
54,038,397 |
51,377,377 |
|
| Financial
charges paid |
|
|
(43,255,252) |
(21,628,586) |
|
| Taxes paid |
|
|
(3,184,890) |
(2,769,898) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated from operating activities |
|
|
7,598,255 |
26,978,893 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
| b)
CASH FLOW FROM INVESTING ACTIVITIES |
|
|
| Fixed
capital expenditure |
|
|
|
(2,695,366) |
(8,747,302) |
|
| Proceeds
from disposal of fixed assets |
|
|
625,000 |
640,000 |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities |
|
|
(2,070,366) |
(8,107,302) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
| c)
CASH FLOW FROM FINANCING ACTIVITIES |
|
|
| Payment of: |
|
|
|
|
| Long term loans |
|
(17,346,820) |
(8,652,360) |
|
| Sponsors
bridge finance |
|
|
-- |
(4,475,000) |
|
| Deferred
mark up |
|
|
-- |
(2,400,000) |
|
| Custom levies |
|
|
(937,561) |
(937,561) |
|
| Redemption
of redeemable capital |
|
|
|
-- |
(2,897,576) |
|
| Increase
in short term borrowings |
|
|
|
15,260,495 |
1,253,308 |
|
| Payment
of dividend |
|
|
|
(1,362,308) |
-- |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) financing activities |
|
|
(4,386,194) |
(18,109,189) |
|
| Net
increase in cash and bank balances (a+b+c) |
|
|
1,141,695 |
762,402 |
|
| Cash
and bank balances at the beginning of the year |
|
1,319,860 |
557,458 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and bank balances at the end of the year |
|
|
2,461,555 |
1,319,860 |
|
|
|
|
========== |
========== |
|
|
|
|
|
(MIAN MOHAMMAD LATIF) |
|
(MOHAMMAD NAEEM) |
|
|
Chief Executive |
|
Director |
|
|
|
|
|
| Notes
to the Accounts |
|
| for
the year ended September 30, 1999 |
|
|
| 1.
STATUS AND ACTIVITIES |
|
|
|
| The
Company is limited by shares incorporated on November 05, 1989 in Pakistan
under the Companies |
|
| Ordinance,
1984 and quoted at stock exchanges in Pakistan. The principal business of the
Company |
|
| is
manufacturing and sale of yarn. The mills is Located at Tehsil and District
Toba Tek Singh in the |
|
| province
of Punjab. |
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
|
| 2.1
ACCOUNTING CONVENTION |
|
|
| These
accounts have been prepared under "historical cost convention"
modified by certain |
|
| exchange
differences as mentioned in Note 2.4. |
|
|
|
|
|
| 2.2
STAFF RETIREMENT BENEFITS |
|
|
|
| The
Company operates an unfunded gratuity scheme covering all its employees.
Provision |
|
| is
made to cover the liability under the scheme. Gratuity was accounted for on
payment |
|
| basis
till September 30, 1998. The management decided to make provision for
gratuity |
|
| payable
for more appropriate presentation. |
|
|
|
|
| 2.3 TAXATION |
|
|
|
|
|
|
| Current |
|
|
|
| Provision
for current taxation is based on taxable income at the current tax rates
after |
|
| taking
into account tax rebates and tax credits available, if any. |
|
|
|
|
| Deferred |
|
|
|
| The
company accounts for the deferred taxation on material timing differences
using the |
|
| Liability
method. However, deferred tax is not provided, if it can be established with |
|
