| Chaudhry Textile Mills 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 Meeting |
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| Directors'
Report |
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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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| Notes
to the Accounts |
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| Pattern
of Shareholdings |
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| Accounts
of Subsidiary Company |
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| Zubaida
Enterprises (Private) Limited |
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| Consolidated
Accounts |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
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| CHAIRMAN |
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MR. ILYAS M. CHAUDHRY |
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| DIRECTORS |
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CH. MOHAMMAD ASHIQ |
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CH. MOHAMAD NAWAZ |
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MIAN ZAHIO SAID |
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MR. M. IMRAN AMJAD |
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MIAN AAMER MAHMOOD |
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MR. SAQIB ALI |
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MR. AKRAM HUSSAIN |
- REPRESENTING SLIC |
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MR. H. A. NAQVI |
- REPRESENTING NIT |
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MR. ADNAN MERAJ |
- REPRESENTING NIT |
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| CHIEF
EXECUTIVE |
MIAN MOHAMMAD AMJAD |
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| COMPANY
SECRETARY |
MOHAMMAD IQBAL MIRZA |
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| AUDITORS |
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HAMEED CHAUDHRI &
CO., |
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CHARTERED ACCOUNTANTS |
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| BANKERS |
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HABIB BANK LIMITED |
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| REGISTERED
OFFICE |
AL-FIRDOUS, 135-
FEROZEPUR ROAD, |
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LAHORE |
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PHONES: 7581556-7 |
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7588617 |
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FAX: 7589359 |
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| MILLS |
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HUSSIAN NAGAR, |
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DISTRICT SHEIKHUPURA |
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PHONES: 04931-6571 |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 33rd Annual General Meeting of Shareholders of the
Company will be held at 1st Floor, Regal |
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| Cinema
Building, 65-Shahrah-e-Quaid-e-Azam, Lahore, on 28th March, 2000 at 10.30 A.M
to transact the following business:- |
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| 1.
To confirm the minutes of 32nd Annual General Meeting held on 31st March,
1999. |
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| 2.
To receive, consider and approve the audited accounts of the Company for the
year ended 30th September, 1999 and |
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| Directors'
& Auditors' Reports thereon. |
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| 3.
To appoint Auditors for the year 1999-2000 and fix their remuneration. |
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| 4.
To consider any other matter with the permission of the Chair. |
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| SPECIAL
BUSINESS: |
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| To
authorise the Chief Executive of the Company to dispose off the old, obsolete
and unserviceable machinery/assets lying at |
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| the
Mills Premises and to pass the following resolution with or without
modification: |
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| "Resolved
that the Chief Executive of the Company be and is hereby authorised to
dispose off the old, |
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| obsolete
and unserviceable machinery / assets lying at the Mills Premises to some
prospective buyers in the |
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| best
interest of the Company for the repayment of debts." |
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By Order of the Board |
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| LAHORE |
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|
MUHAMMAD IQBAL MIRZA |
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| 6th March, 2000 |
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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 28th March,
2000 to 3rd April, 2000 (both days |
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| inclusive). |
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| 2.
A member entitled to attend and vote may appoint another member as his / her
proxy to attend, speak and vote instead |
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| of him / her. |
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| 3.
Forms of proxy must be deposited at the Company's Registered Office
(AI-Firdous, 135 Ferozepur Road, Lahore) not |
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| later
than 48 hours before the time of holding the meeting. |
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| STATEMENT
U/S 160 (1) OF COMPANIES ORDINANCE, 1984. |
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| Since
the machinery / assets installed in the Mills premises have become old,
obsolete and unserviceable with age, it has, |
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| therefore,
been decided to dispose off the machinery / assets to some prospective buyers
with a view to repay the debts of the |
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| company. |
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| DIRECTORS'
REPORT |
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| BISMILLAH-AR-REHMAN-AR-RAHIM |
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| Your
directors present their 33rd Annual Report together with the Audited Accounts
of the company for the year ended 30 |
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| September,
1999. |
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| The
company earned a profit of Rs.1.190 million before taxation during the year
as against loss of Rs. 6.473 million last year. |
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| However,
after taking into account the prior year and extraordinary items, the company
has earned a profit of Rs. 1.968 million |
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| after
taxation as compared to a profit of Rs. 13.007 million last year. The
accumulated loss brought forward from last year was |
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| Rs.
68.815 million and as a result, accumulated loss of Rs. 66.847 million is
being carried forward for adjustment against future |
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| profit. |
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| During
the year, the overall business environment continued to remain subdued. The
stagnant position in the industrial sector |
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| coupled
with rising inflationary trends adversely effected the textile industry. The
position was further aggravated with the failure |
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| of
cotton crop in quality and quantity, frequent and abnormal increase in input
cost, therefore, it was no longer viable and prudent |
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| to
restart the company's operations during the year under review. |
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| However,
your directors are pleased to report that company has fully paid the entire
loan of Pakistan Industrial Credit & |
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| Investment
Corporation Limited (PICIC) during the year. As regard Habib Bank Limited,
the loan has been fully paid against |
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| lumpsum
settlement subsequent to the Balance Sheet date. With the continued financial
support from the Directors and |
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| associated
undertaking, all bank liabilities have been fully liquidated. Due to
difficulties being faced by the company, it has not |
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| been
possible to restart the operations of the mills since May, 1993. Therefore,
your Directors are of the view that surplus |
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| machinery
/ land be sold .and the sale proceeds be utilised toward discharging
liabilities and this may make it possible to operate |
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| the
downsized mills. |
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| Your
directors are endeavouring to safeguard the available machinery by
re-organising its order on economic lines under one |
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| roof,
to be able to meet specified needs of the market. Moreover, your directors
are confident that with the availability of cotton |
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| lint
at reasonable prices, and with improved market conditions, your company will
be able to again operate on profitable lines. |
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| Regarding
Auditors' report, the Directors are of the view that depreciation has not
been provided for as the mills has not been in |
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| operation
since May, 1993. Further, as regard valuation of stocks, these are brought
forward as previous year's valuation based |
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| at
cost. Due to price inflation, cost is much lower than the current prices,
hence no need of any adjustment. Provision for taxation |
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| is
not required due to expected Appeal relief and brought forward losses. Last
year, the company had incorporated some |
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| transactions
which were inadvertently not taken in prior years. |
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| With
regard to the "going concern basis", the Directors are of the view
that the. company has potential for growth and should, |
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| Insha-Allah,
achieve satisfactory profitability in the coming year, based on the plans
drawn up by the management as mentioned |
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| above. |
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| Zubaida
Enterprises (Pvt) Limited. (a subsidiary company) which operated for the
whole year, has also shown improvement and |
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| earned
a profit of Rs.4.990 million before taxation as compared to loss of Rs.4.414
million sustained last year. The production |
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| into
20s average count increased by 34.23% to 0.862 million Kgs during the year
under review as compared to 0.642 million Kgs, |
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| last
year. With the addition of one frame and replacement of three frames of BD
200 RN Model, the quality of yam improved |
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| considerably
and contributed significantly toward profitability. Moreover Rs.12.247
million earned by conversion of yarn during |
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| the
year. The sale increased by 18.71% from Rs.71.473 million to Rs.84.843
million. Thus resulting an increase in G.P. rate over |
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| last year. |
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| The
auditors of the company M/s Hameed Chaudhri & Co; Chartered Accountants,
retire and offer themselves for re- |
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| appointment
for the ensuing year. |
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| We
call upon you to join us in seeking Guidance and Blessing of ALLAH in
accelerating efforts to restart the company's |
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| operations
and overcome all the difficulties. |
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On behalf of the Board |
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| LAHORE |
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|
ILYAS M. CHAUDHRY |
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| 6th
March, 2000 |
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CHAIRMAN |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed Balance Sheet of CHAUDHRY TEXTILE MILLS LIMITED as
at 30 September, 1999 and the |
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| related
Profit and Loss Account and Cash Flow Statement, together with the notes
forming part thereof, for the year then ended |
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| and
we state that we have obtained all the information and explanations which to
the best of our knowledge and belief were |
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| necessary
for the purposes of our audit and, after due verification thereof, we report
that: |
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| (a)
in our opinion, proper books of account, have been kept by the Company as
required by the Companies Ordinance |
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| 1984; |
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| (b)
in our opinion: |
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| (i)
the Balance Sheet and Profit and Loss Account together with the notes thereon
have been drawn up in |
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| conformity
with the Companies Ordinance, 1984 and are in agreement with the books of
account and, except |
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| for
the unprovided depreciation aggregating Rs.8.267 million (note 10.2), are
further in accordance with |
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| accounting
policies consistently applied; |
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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 in accordance |
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| with
the objects of the Company; |
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| (c)
in our opinion, except for the contents of note 21.2 regarding corresponding
figures, and to the best of our information |
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| and
according to the explanations given to us, the Balance Sheet, Profit and Loss
Account and Cash Flow Statement, |
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| together
with the notes forming part thereof, give the information required by the
Companies Ordinance, 1984 in the |
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| manner
so required and, except for the contents of notes 8.2 and 13.1 and the extent
to which these may affect the |
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| annexed
accounts, respectively give a true and fair view of the state of the
Company's affairs as at 30 September, |
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| 1999
and of the profit and cash flows for the year then ended; and |
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| (d)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
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| Without
further qualifying our opinion, we draw attention to note 2.1 to the accounts
which states factors that raise doubt |
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| regarding
the Company's ability to continue as a 'Going Concern.' The validity of
'Going Concern Basis' is dependent on the |
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| Company's
ability to achieve satisfactory levels of profitability in foreseeable future
and continued support from the Company's |
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| Sponsors
Associated Undertakings and Bankers. |
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| LAHORE: |
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|
HAMEED CHAUDHRI & CO; |
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| 6th
March, 2000 |
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CHARTERED ACCOUNTANTS |
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| BALANCE
SHEET |
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| AS
AT 30 SEPTEMBER, 1999 |
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1999 |
1998 |
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Note |
Rupees |
Rupees |
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| CAPITAL
AND RESERVE |
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| Authorised
capital |
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| 2,000,000
ordinary shares |
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| of Rs. 10 each |
|
20,000,000 |
20,000,000 |
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|
========== |
========== |
|
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| Issued.
subscribed |
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| and
paid-up capital |
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3 |
15,070,000 |
15,070,000 |
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| General reserve |
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|
3,680,000 |
3,680,000 |
|
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| Accumulated
loss |
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|
(66,847,295) |
(68,814,896) |
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|
|
|
------------------ |
------------------ |
|
|
|
|
|
(48,097,295) |
(50,064,896) |
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|
|
|
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|
|
| LONG
TERM LOANS AND |
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|
|
|
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| FINANCES |
|
4 |
0 |
2,993,092 |
|
|
|
|
|
|
|
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| DUE
TO WHOLLY OWNED |
|
|
|
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| SUBSIDIARY
COMPANY |
|
5 |
6,840,229 |
962,814 |
|
|
|
|
|
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| DEFERRED
LIABILITY FOR |
|
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|
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| GRATUITY |
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|
2,648,329 |
3,723,192 |
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| CURRENT
LIABILITIES |
|
|
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|
| Current
portion of long term |
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|
|
|
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| loans
and finances |
|
4 |
2,993,092 |
20,394,292 |
|
|
| Shod
term loans |
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6 |
30,310,385 |
17,885,385 |
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|
| Creditors,
accruals and |
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|
|
|
|
| other liabilities |
|
7 |
27,586,520 |
29,821,513 |
|
|
| Provision
for taxation |
|
8 |
375.39 |
1,874,950 |
|
|
| Dividend
payable |
|
|
987,680 |
987,680 |
|
|
|
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|
------------------ |
------------------ |
|
|
|
|
|
62,253,066 |
70,963,820 |
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| CONTINGENCIES
AND |
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| COMMITMENTS |
|
9 |
-- |
-- |
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|
------------------ |
------------------ |
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|
23,644,329 |
28,578,022 |
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|
========== |
========== |
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| TANGIBLE
FIXED ASSETS |
|
10 |
18,705,898 |
23,474,445 |
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| LONG
TERM DEPOSITS |
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|
46,341 |
46,341 |
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|
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| CURRENT
ASSETS |
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|
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| Stores,
spares and tools |
|
12 |
3,538,138 |
3,578,785 |
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|
| Stock-in-trade |
|
13 |
506,380 |
720,009 |
|
|
|
| Advances,
deposits and other |
|
|
|
|
|
|
| receivables |
|
15 |
829,384 |
722,985 |
|
|
|
| Cash
and bank balances |
|
16 |
18,188 |
35,457 |
|
|
|
|
|
|
------------------ |
------------------ |
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|
|
|
|
|
4,892,090 |
5,057,236 |
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|
|
|
|
|
------------------ |
------------------ |
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|
|
|
|
|
|
23,644,329 |
28,578,022 |
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|
|
|
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|
========== |
========== |
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| The
annexed notes form an integral part of these accounts. |
|
|
|
ILYAS M. CHAUDHRY |
|
MIAN MUHAMMAD AMJAD |
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|
CHAIRMAN |
|
CHIEF EXECUTIVE |
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|
| PROFIT
AND LOSS ACCCOUNT |
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| FOR
THE YEAR ENDED 30 SEPTEMBER, 1999 |
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|
1999 |
1998 |
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|
Note |
Rupees |
Rupees |
|
|
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|
| MISCELLANEOUS
INCOME |
|
17 |
3,545,372 |
2,505,581 |
|
| ADMINISTRATIVE
AND GENERAL EXPENSES |
18 |
798,262 |
1,064,999 |
|
| FINANCIAL
CHARGES |
|
19 |
1,059,841 |
3,759,091 |
|
| MISCELLANEOUS
CHARGES |
|
20 |
497,019 |
4,154,404 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,355,122 |
8,978,494 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT/(LOSS)
BEFORE TAXATION |
|
|
1,190,250 |
(6,472,913) |
|
| PROVISION
FOR TAXATION |
|
8 |
140,535 |
2,313,335 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT/(LOSS)
AFTER TAXATION |
|
|
1,049,715 |
(8,786,248) |
|
| PRIOR
YEARS ITEMS - Net |
|
21 |
917,886 |
5,951,246 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT/(LOSS)
FROM ORDINARY ACTIVITIES |
|
1,967,601 |
(2,835,002) |
|
| EXTRA
ORDINARY ITEM |
|
22 |
0 |
15,842,026 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
FOR THE YEAR |
|
|
1,967,601 |
13,007,024 |
|
| ACCUMULATED
LOSS - Brought forward |
|
|
(68,814,896) |
(81,821,920) |
|
| ACCUMULATED
LOSS |
|
|
|
------------------ |
------------------ |
|
| -
Carried to Balance Sheet |
|
|
(66,847,295) |
(68,814,896) |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| EPS |
|
23 |
1.31 |
8.63 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
ILYAS M. CHAUDHRY |
|
MIAN MUHAMMAD AMJAD |
|
|
CHAIRMAN |
|
CHIEF EXECUTIVE |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER, 1999 |
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| NET
CASH OUTFLOW FROM OPERATING ACTIVITIES (note 'A') |
(629,205) |
(8,697,361) |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Proceeds
from disposal of fixed assets |
|
5,966,301 |
18,638,205 |
|
| Due
to wholly owned Subsidiary Company |
|
4,841,318 |
4,192,874 |
|
|
|
------------------ |
------------------ |
|
| NET
CASH INFLOW FROM INVESTING ACTIVITIES |
|
10,807,619 |
22,831,079 |
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Payments
of long term loans, finances and financial charges |
|
(22,620,683) |
(29,539,909) |
|
| Short
term finances- net |
|
0 |
(520,656) |
|
| Short
term loans - net |
|
12,425,000 |
15,936,491 |
|
|
|
------------------ |
------------------ |
|
| NET
CASH OUTFLOW FROM FINANCINGACTIVITIES |
|
(10,195,683) |
(14,124,074) |
|
|
|
|
------------------ |
------------------ |
|
| NET
(DECREASE) /INCREASE IN CASH AND CASH EQUIVALENTS |
(17,269) |
9,644 |
|
| CASH
AND CASH EQUIVALENTS -At the beginning of the year |
|
35,457 |
25,813 |
|
|
|
|
------------------ |
------------------ |
|
| CASH
AND CASH EQUIVALENTS - At the end of the year |
|
18,188 |
35,457 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed note 'A' forms an integral pad of this Statement. |
|
|
|
|
| NOTE 'A' |
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
/ (Loss) from ordinary activities |
|
1,967,601 |
(2,835,002) |
|
| Adjustments
for: |
|
|
|
| Gain
on disposal of fixed assets |
|
(1,197,754) |
(10,071,151) |
|
| Financial
charges |
|
1,059,841 |
4,349,427 |
|
| Provision
for diminution in value of long term investments |
|
0 |
2,500,040 |
|
| Provision
for doubtful debtors |
|
(909,464) |
1,019,526 |
|
| Provision
for doubtful advances and deposits |
|
0 |
348,832 |
|
| Deferred
liability for gratuity - net |
|
(1,074,863) |
3,723,192 |
|
| Provision
for taxation |
|
140,535 |
2,313,335 |
|
|
|
|
|
------------------ |
------------------ |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| -
Before working capital changes |
|
(14,104) |
1,348,199 |
|
| (Increase)/Decrease
in current assets |
|
|
|
| Stores,
spares and tools |
|
40,647 |
(16,361) |
|
| Stock-in-trade |
|
|
213,629 |
0 |
|
| Advances,
deposits and other receivables |
|
|
|
| (excluding
tax deposited/deducted at source) |
|
(500) |
0 |
|
| (Decrease)/Increase
in creditors, accruals and |
|
|
|
| other
liabilities (excluding accrued financial charges) |
|
(158,979) |
(8,811,284) |
|
|
|
------------------ |
------------------ |
|
|
|
(94,797) |
(8,827,645) |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| -
After working capital changes |
|
80,693 |
(7,479,446) |
|
| Taxes paid |
|
|
(709,898) |
(1,217,915) |
|
|
|
------------------ |
------------------ |
|
| NET
CASH OUTFLOW FROM OPERATING ACTIVITIES |
|
(629,205) |
(8,697,361) |
|
|
|
|
|
========== |
========== |
|
|
|
ILYAS M. CHAUDHRY |
|
|
MIAN MUHAMMAD AMJAD |
|
|
CHAIRMAN |
|
|
CHIEF EXECUTIVE |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER, 1999 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
|
|
| The
Company was incorporated in Pakistan on 17 March, 1967 as a Public Company
and its shares are quoted on Stock |
|
| Exchanges
in Pakistan. The principal activity of the Company is manufacture and sale of
yarn. |
|
|
| 1.1
Compliance with International Accounting Standards (IASs) |
|
| These
accounts comply with IASs, as applicable in Pakistan, in all material
respects, except for the contents of notes10.2, 13.1 & |
|
| 21.2. |
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
|
| 2.1
Basis of accounting |
|
|
|
| The
Company closed-down its spinning unit in May, 1993 due to operational losses.
The accumulated loss as on the balance |
|
| sheet
date aggregated Rs.66.847 million. Current liabilities of the Company
exceeded its current assets by Rs. 57.361 million |
|
| and
total liabilities exceeded total assets by Rs.48.097 million. These factors
raise doubt that the Company will be able to |
|
| continue
as a 'Going Concern'. |
|
|
| These
accounts, however, have been prepared on a 'Going Concern Basis' on the
assumptions that the Company will achieve |
|
| satisfactory
levels of profitability in the foreseeable future based on the plans drawn by
the Management for this purpose and |
|
| will
have the required continued financial support from the Sponsors, Associated
Undertakings and the Company's Bankers. |
|
| Further,
the Company, during the year, succeeded in the repayment of long term loans
and finances of PICIC and HBL as per |
|
| terms
of settlement packages. These accounts, therefore, do not include any
adjustment relating to realisation of the |
|
| Company's
assets and liquidation of its liabilities that might be necessary should the
Company be unable to recommence its |
|
| operations. |
|
|
| 2.2
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention modified by
adjustments of exchange rate |
|
| fluctuations
as referred to in notes 2.5 and 2.6. |
|
|
| 2.3
Staff retirement benefits |
|
| The
Company operates an un-funded Gratuity Scheme for all its eligible employees.
Provision is made annually, to cover |
|
| obligation
under the Scheme. |
|
|
| 2.4 Taxation |
|
| Provision
for current taxation is made on taxable income for the year, if any. Tax
credits and brought forward losses are |
|
| recognised
for arriving at taxable income for the year. The Company does not account for
tax effects of major timing |
|
| differences
due to reason stated in note 8.3. |
|
|
| 2.5
Foreign currency translations |
|
| Assets
and liabilities in foreign currencies are translated into Pak Rupees at the
exchange rates ruling on the balance sheet |
|
| date. |
|
|
| Exchange
gains/losses on principal loans are transferred to the cost of plant and
machinery acquired out of the proceeds of |
|
| such
loans and on other liabilities/assets are taken to Profit and Loss Account. |
|
|
| 2.6
Fixed assets and depreciation |
|
| Fixed
assets are stated at cost less accumulated depreciation except freehold land
and capital work-in-progress which are |
|
| stated
at cost. Cost of plant and machinery consists of historical cost and exchange
rate fluctuations on foreign currency loans |
|
| as
referred to in note 2.5. |
|
|
| Depreciation
is charged applying Reducing Balance Method to writ |
