| Island Textile Mills Limited |
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| Contents |
|
|
| BOARD
OF DIRECTORS |
|
| NOTICE
OF MEETING |
|
| CHAIRMAN'S
REVIEW |
|
| DIRECTORS'
REPORT |
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
& LOSS ACCOUNT |
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| NOTES
TO THE ACCOUNTS |
|
| PATTERN
OF SHARE HOLDING |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
|
|
| CHAIRMAN |
|
| Mr.
Anwar Ahmed Tata |
|
|
| CHIEF
EXECUTIVE |
|
| Mr.
Shahid Anwar Tata |
|
|
| DIRECTORS |
|
| Mr.
Shehzada Alam |
|
| Mr.
Shafique Alam |
|
| Mr. Kausar Ejaz |
|
| Mrs.
Parveen Anwar |
|
| Mr.
Mushataq Ali Qazi |
|
|
| COMPANY
SECRETARY |
|
| Mr.
Farooq Advani |
|
|
| BANKERS |
|
| Habib
Bank Limited |
|
| National
Bank of Pakistan |
|
| Soneri
Bank Limited |
|
|
| AUDITORS |
|
| Messrs
M. Yousuf Adil Saleem & Co. |
|
| CHARTERED
ACCOUNTANTS. |
|
|
| LEGAL
ADVISER |
|
| Dr.
Raees M. Mushtaq |
|
|
| REGISTERED
OFFICE |
|
| 8-Sth
Floor, Textile Plaza, |
|
| M.A.
Jinnah Road, Karachi. |
|
|
| SHARE
REGISTRAR |
|
| KHALID
MAJID HUSAIN RAHMAN |
|
| Chartered
Accountants, |
|
| 16-K,
Block-6, P.E.C.H.S., |
|
| Off:
Shara-e-Faisal, Karachi. |
|
| Tel.
No. 4542333,111-414141. |
|
|
| MILLS |
|
| A/12,
S.I.T.E., Kotri (Sindh) |
|
| District (Dadu). |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 30th Annual General Meeting of the shareholders of
ISLAND TEXTILE |
|
| MILLS
LIMITED will be held on WEDNESDAY the March 22, 2000 at 10:30 A.M. at Beach
Luxury Hotel, |
|
| Moulvi
Tamizuddin Khan Road, Karachi, to transact the following business:- |
|
|
| 1.
To confirm the minutes of the 29th Annual General Meeting held on March 11,
1999. |
|
|
|
|
| 2.
To receive, consider and adopt the report of the Directors and Auditors and
Audited accounts |
|
| of
the Company for the year ended September 30, 1999. |
|
|
|
|
|
| 3.
To appoint Auditors for the year 1999-2000 and to fix their remunerations.
The retiring auditors |
|
| Messrs.
M. Yousuf Adil Saleem & Co. Chartered Accountants, being eligible offer
themselves |
|
| for
re-appointment. |
|
|
|
|
| 4.
To approve the payment of dividend @ 25% (i.e. Rs. 2.50 per share) out of the
profit for the year |
|
| ended
September, 30, 1999 as recommended by the Board of Directors. |
|
|
| 5.
To transact any other business with the permission of the CHAIRMAN. |
|
|
|
|
By order of the Board of Directors |
|
|
|
|
|
|
| Karachi: |
|
|
FAROOQ ADVANI |
|
| Dated:
February 29, 2000. |
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The Share Transfer books of the company will remain closed from March 15,
2000 to March 24, |
|
| 2000.
(both days inclusive) |
|
|
|
|
|
|
| 2.
A member entitled to attend and vote at this meeting may appoint a proxy.
Proxies in order to |
|
| be
effective must be received by the Company not less than 48 hours before the
meeting. |
|
|
| 3.
Share holders are requested to notify the change of address if any
immediately. |
|
|
|
| CHAIRMAN'S
REVIEW |
|
|
| Assalam-o-Alaikum |
|
|
| I
would like to welcome the shareholders of the Company to the 30th Annual
General Meeting to consider |
|
| the
Operational and Financial Results for the year ended September 30, 1999. |
|
|
| By
the grace of Almighty Allah, Island Textile Mills has achieved IS0 9002
certification for both |
|
| manufacturing
and Commercial activities. IS0 9002 is the first step for development of a
prudent |
|
| Management
system and it would play a very important role towards continuous quality
improvement. |
|
|
| During
the year under review the Company has made a net profit of Rs. 18.336 million
as compared to a |
|
| net
loss of Rs. 4.855 million of the preceding year. The reason for achieving
unprecedented results has |
|
| been
due to the blessing of Almighty Allah. We remain committed for continuous
improvement towards |
|
| quality,
production and marketing. Moreover, as you are aware of the fact that our
unit is in the production |
|
| of
poly cotton yarn and we have been able to improve the quality of yarn thus
achieving better yarn rates. |
|
|
| An
analysis of the operational and financial results for the year with the
comparison of previous years |
|
| appear below: |
|
|
| PRODUCTION
CONVERTED INTO 20/S IN KGS. |
|
|
|
1999 |
1998 |
1997 |
1996 |
1995 |
|
|
|
|
|
4,769,865 |
4,601,138 |
4,472,655 |
4,271,904 |
4,271,904 |
|
|
|
|
|
|
| FINANCIAL
RATIOS |
|
| AS
AT 30TH SEPTEMBER |
1999 |
1998 |
1997 |
1996 |
1995 |
|
|
|
|
| Cost
of Sales as % |
|
| age of Sales |
|
88.48 |
95.96 |
92.24 |
96.33 |
94.62 |
|
|
|
|
| Gross
Profit as % |
|
| age of Sales |
|
11.52 |
4.04 |
7.76 |
3.67 |
5.38 |
|
|
|
|
|
| Operating
Profit |
|
|
| as
% age of Sales |
8.73 |
1.66 |
5.49 |
1.58 |
3.45 |
|
|
|
|
|
| Net
Profit/(Loss) as % |
|
|
| age of Sales |
|
4.99 |
(2.03) |
1.07 |
(4.48) |
(1.87) |
|
|
|
|
|
| Total
Assets turnover |
1.67 |
1.55 |
1.76 |
1.92 |
2.84 |
|
|
|
| PROFIT
AND LOSS ACCOUNT COMPARISON AS PERCENTAGE TO SALES |
|
|
|
1999 |
1998 |
1997 |
1996 |
1995 |
|
|
|
|
| Net Sales |
|
|
| (Rs.
in thousand) |
367.777 |
304.998 |
336.164 |
298.531 |
335.253 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| In
term of percentage |
100.00 |
100.00 |
100.00 |
100.00 |
100.00 |
|
| Cost of Sales |
|
88.48 |
95.96 |
92.24 |
96.33 |
94.62 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Gross Profit |
|
11.52 |
4.04 |
7.76 |
3.67 |
5.38 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
|
| Administrative
Expenses |
1.95 |
1.52 |
1.26 |
1.23 |
1.06 |
|
| Selling
& Distribution |
|
| Expenses |
|
0.84 |
0.86 |
1.01 |
0.86 |
0.87 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
2.79 |
2.38 |
2.27 |
2.09 |
1.93 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
|
|
| Operating
Profit |
8.73 |
1.66 |
5.49 |
1.58 |
3.45 |
|
| Financial
Expenses |
(3.93) |
(4.43) |
(4.46) |
(6.46) |
(5.56) |
|
| Other Income |
|
0.45 |
0.74 |
0.10 |
0.40 |
0.24 |
|
| W.P.P.F. |
|
(0.26) |
0.00 |
(0.06) |
-- |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Net
Profit/(Loss) |
4.99 |
(2.03) |
1.07 |
(4.48) |
(1.87) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
| MACHINERY
MODERNIZATION PLAN: |
|
|
| We
have always given top priority on the upkeep and modernization of plant for
producing high quality |
|
| yarn
and keeping this factor in mind, your Company has incurred the following
capital expenditures. |
|
|
| Name
of the Machinery |
|
|
Cost |
|
|
|
|
|
|
| 1.
6 Sets of Ring Frames Chinese Made EJM-125 |
|
Rs. 9 Million |
|
| 2.
1 Set of second hand Murata Cone Winder |
|
Rs. 2.3. Million. |
|
|
| FUTURE
PROSPECTS |
|
| By
the grace of Almighty Allah the cotton crop has been very good and we hope
the year 1999-2000 shall |
|
| be
very bright for us. Moreover the reduction in mark-up rates by the State Bank
of Pakistan shall also |
|
| have
a healthier effect on our overall results. |
|
|
| ACKNOWLEDGMENT |
|
| The
relations between Labour and the Management continued to be cordial
throughout the year and I am |
|
| pleased
to place on record my appreciation for the sincere efforts and hard work done
by the workers, |
|
| staff
and officers of the Company. I also wish to place on record our deep
gratitude to the management of |
|
| Soneri
Bank Limited and Habib Bank Limited for their active support, guidance and
efforts in achieving |
|
| our
aims and objectives. |
|
|
| Karachi |
|
|
ANWAR AHMED TATA |
|
| Dated:
February 17, 2000. |
|
Chairman |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| The
Directors have pleasure in presenting before you the 30th Annual Report
together with the Audited |
|
| Accounts
for the year ended September 30, 1999. |
|
|
| FINANCIAL
RESULTS |
|
| The
Company made a Net Profit of Rs. 18,336,110/- after charging costs, expenses
and depreciation for the |
|
| year. |
|
|
|
|
|
|
RUPEES |
|
|
|
|
|
|
|
| NET
PROFIT FOR THE YEAR |
|
|
18,336,110 |
|
|
|
|
| TAXATION |
|
|
|
| CURRENT |
|
|
6,350,000 |
|
| DEFERRED |
|
|
1,735,100 |
|
|
------------------ |
|
|
|
(8,085,100) |
|
|
------------------ |
|
| PROFIT
AFTER TAXATION |
|
10,251,010 |
|
| APPROPRIATION |
|
|
|
| PROPOSED
CASH DIVIDEND RS. 2.50 PER SHARE |
|
(1,250,000) |
|
|
------------------ |
|
|
|
9,001,010 |
|
| ACCUMULATED
LOSS BROUGHT FORWARD |
|
(72,823,173) |
|
|
|
|
------------------ |
|
| ACCUMULATED
LOSS CARRIED FORWARD |
|
(63,822,163) |
|
|
========== |
|
|
| CHAIRMAN'S
REVIEW |
|
| The
Directors of the Company endorse the contents of the Chairman's review which
is deemed to be a part |
|
| of
the Directors' report. |
|
|
| DIVIDEND |
|
| The
Board of Directors have pleasure in recommending cash dividend @ 25% for the
year ended September |
|
| 30,
1999.The Directors realise the fact that payment of dividend without
considering the accumulated losses |
|
| is
not a prudent policy to follow. But feel that in view of the present
circumstances and also considering the |
|
| interest
of the shareholders it was necessary to share the current profit. |
|
|
| AUDITORS |
|
| The
present Auditors of the Company, M/s. M. YOUSUF ADIL SALEEM & CO.
CHARTERED ACCOUNTANTS |
|
| retire
and being eligible, offer themselves for reappointment as Auditors for the
ensuring year. |
|
|
| PATTERN
OF SHARE HOLDING |
|
| As
required by Section 236 of the Companies Ordinance 1984, pattern of
shareholding is attached to this |
|
| report. |
|
|
| CONCLUSION |
|
| The
Directors place on record their appreciation to the officers, members of the
staff and workers for their |
|
| efforts
and hard work. |
|
|
|
|
ON BEHALF OF THE BOARD OF DIRECTORS |
|
|
|
|
|
|
| KARACHI: |
|
|
SHAHID ANWAR TATA |
|
| DATED:
February 17, 2000. |
|
Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of ISLAND TEXTILE MILLS 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)
The Company have proposed a Cash dividend out of the Current year's Profit
without taking |
|
| into
Consideration the accumulated losses which is against the prudent policy. |
|
|
| (b)
in our opinion, proper books of account have been kept by the company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
|
|
|
|
| (c)
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; |
|
|
|
|
| (d)
in our opinion and to the best of our information and according to the
explanations given to us, |
|
| except
for the effect of the para (a) above, the balance sheet, profit and loss
account and the |
|
| 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, 1 999 and of the profit and the changes in financial
position for the |
|
| year
then ended; and |
|
|
|
|
| (e)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| Karachi: |
|
|
|
M. YOUSUF ADIL SALEEM & CO., |
|
| Dated:
February 17, 2000 |
|
|
Chartered Accountants. |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
| SHARE
CAPITAL |
|
|
|
|
|
|
| Authorised |
|
|
|
| 1,000,000
Ordinary Shares of Rs. 10/- each |
|
|
10,000,000 |
10,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up |
|
|
|
| 500,000
Ordinary shares of Rs. 10/- each |
|
|
| fully
paid in cash |
|
|
5,000,000 |
5,000,000 |
|
| Accumulated
loss |
|
|
(63,822,163) |
(72,823,173) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(58,822,163) |
(67,823,173) |
|
|
|
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
3 |
80,636,650 |
84,915,924 |
|
|
|
|
|
| LONG
TERM LOANS |
|
4 |
6,145,500 |
8,194,000 |
|
|
|
|
|
| DEFERRED
LIABILITY |
|
5 |
40,457,520 |
3,195,870 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term bank borrowings |
|
6 |
66,730,755 |
84,244,901 |
|
| Current
portion of long term loans |
|
|
1,365,666 |
-- |
|
| Current
portion of Deferred Liability |
|
|
7,850,788 |
-- |
|
| Creditors,
accrued and other liabilities |
|
7 |
61,645,919 |
77,890,006 |
|
| Taxation |
|
|
12,858,904 |
6,508,904 |
|
| Proposed
Dividend |
|
|
1,250,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
151,702,032 |
168,643,811 |
|
| COMMITMENTS |
|
8 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
220,119,539 |
197,126,432 |
|
|
|
|
|
========== |
========== |
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
| Operating
assets |
|
|
9 |
113,298,562 |
113,709,622 |
|
| Capital
work in progress |
|
|
|
| Civil work |
|
|
-- |
1,685,685 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
113,298,562 |
115,395,307 |
|
| LONG
TERM INVESTMENTS |
|
10 |
1,998,000 |
1,998,000 |
|
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
50,995 |
37,995 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores,
Spares and loose tools |
|
11 |
3,450,732 |
4,172,363 |
|
| Stock-in-trade |
|
12 |
47,099,165 |
26,443,882 |
|
| Trade debts |
|
13 |
34,641,575 |
28,176,024 |
|
| Loans
and advances |
|
14 |
9,471,460 |
8,435,577 |
|
| Deposits
and prepayments |
|
15 |
214,655 |
2,949,719 |
|
| Other
receivables |
|
16 |
1,543,892 |
453,940 |
|
| Cash
and bank balances |
|
17 |
8,350,503 |
9,063,625 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
104,771,982 |
79,695,130 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
220,119,539 |
197,126,432 |
|
|
|
|
|
========== |
========== |
|
| The
annexed notes from 1 to 32 form an integral part of these accounts |
|
|
|
SHAHID ANWAR TATA |
|
ANWAR AHMED TATA |
|
|
Chief Executive |
|
Chairman/Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
|
| Sales |
|
18 |
367,777,433 |
304,998,085 |
|
| Cost
of goods sold |
|
19 |
325,420,232 |
292,677,844 |
|
|
|
|
------------------ |
------------------ |
|
| Gross Profit |
|
|
42,357,201 |
12,320,241 |
|
|
|
|
|
|
| Operating
expenses |
|
|
|
|
| Administration |
|
|
|
20 |
7,180,858 |
4,638,605 |
|
| Selling |
|
|
|
21 |
3,090,695 |
2,610,100 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
10,271,553 |
7,248,705 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit |
|
|
32,085,648 |
5,071,536 |
|
| Other Income |
|
22 |
1,658,472 |
1,616,405 |
|
|
|
|
------------------ |
------------------ |
|
|
|
33,744,120 |
6,687,941 |
|
| Other charges |
|
|
|
|
|
|
|
| Financial |
|
23 |
14,442,952 |
11,542,772 |
|
| Workers
profit participation fund |
|
965,058 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(15,408,010) |
(11,542,772) |
|
|
|
|
------------------ |
------------------ |
|
| Profit
/ (Loss) before taxation |
|
|
|
18,336,110 |
(4,854,831) |
|
| Taxation |
|
|
|
|
|
| Current |
|
|
|
6,350,000 |
(1,536,082) |
|
| Prior Years' |
|
|
|
-- |
(61,139) |
|
| Deferred |
|
|
|
1,735,100 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(8,085,100) |
(1,597,221) |
|
|
|
|
------------------ |
------------------ |
|
| Profit
/ Loss after taxation |
|
|
|
10,251,010 |
(6,452,052) |
|
| Appropriation: |
|
|
|
|
| Proposed
Cash Dividend Rs. 2.50 per share |
|
|
(1,250,000) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
9,001,010 |
(6,452,052) |
|
| Accumulated
loss brought forward |
|
|
(72,823,173) |
(66,371,121) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
loss carried forward |
|
|
(63,822,163) |
(72,823,173) |
|
|
|
|
========== |
========== |
|
| Earning
per share |
|
28 |
20.50 |
(12.90) |
|
|
|
|
|
|
|
|
|
|
|
| The
annexed notes from 1 to 32 form an integral part of these accounts. |
|
|
|
SHAHID ANWAR TATA |
|
|
ANWAR AHMED TATA |
|
|
Chief Executive |
|
|
|
Chairman/Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
RUPEES |
RUPEES |
|
|
|
|
| A.
CASH FROM OPERATING ACTIVITIES |
|
|
|
|
|
| Profit
/ (Loss) before taxation |
|
|
18,336,110 |
(4,854,831) |
|
|
|
|
| Adjustments
for |
|
|
|
| Depreciation |
|
12,061,826 |
11,997,110 |
|
| Provision
for gratuity |
|
1,182,494 |
1,234,541 |
|
| Financial
charges |
|
14,442,952 |
11,542,772 |
|
| Revaluation
surplus of fixed assets disposed |
|
(4,279,274) |
(3,167,453) |
|
| Loss
on disposal of fixed assets |
|
3,048,501 |
1,551,049 |
|
| Gratuity paid |
|
(627,619) |
(679,520) |
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
44,164,990 |
17,623,668 |
|
|
|
|
------------------ |
------------------ |
|
| Changes
in working capital |
|
|
|
|
|
|
| (Increase)/decrease
in current assets |
|
|
| Stores,
spares and loose tools |
|
|
721,631 |
(748,090) |
|
| Stock in trade |
|
|
(20,655,283) |
(10,562,068) |
|
| Trade debts |
|
|
(6,465,551) |
(3,255,768) |
|
| Loans
and advances |
|
|
1,657,520 |
3,200,492 |
|
| Deposits
and prepayments |
|
|
2,735,064 |
(1,175,254) |
