| Moonlite (Pak) Limited |
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|
|
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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 |
|
| BALANCE SHEET |
|
|
| PROFIT
&-LOSS ACCOUNT |
|
| CASH
FLOW STATEMENT |
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| NOTES
TO THE ACCOUNTS |
|
| PATTERN
OF SHARE HOLDING |
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|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
MR. TAR, H. ISMAIL |
(Chairman & Chief
Executive) |
|
|
|
MR. ABDUL AZIZ T. ISMAIL |
|
| MR.
ASHRAF T. ISMAlL |
|
|
|
MR. M. SOHAIL UMER |
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|
|
MR. SHAHID UMER |
|
| MRS.
NASREEN ASHRAF |
|
|
|
MS. AALIYA K. DOSSA
(N.I.T. Nominee) |
|
|
|
| AUDITORS |
|
RAHIM IQBAL RAFIQ &
CO. |
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|
Chartered Accountants |
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|
| BANKERS |
|
MUSLIM COMMERCIAL BANK
LIMITED |
|
|
|
ASKARI COMMERCIAL BANK
LIMITED |
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|
BANK AL-HABIB LIMITED |
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|
UNITED BANK LIMITED |
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| REGISTERED |
|
F-120, Hub River Road, |
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| OFFICE & MILLS |
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S.I.T.E., Karachi - 75730 |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the 29th Annual General Meeting of the shareholders of |
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| Moonlite
(Pak) Limited will be held at Registered Office of the Company F-120, Hub
River |
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| Road,
S.I.T.E., Karachi - 75730 on Wednesday December 22, 1999 at 11.30 A.M. to |
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| transact
the following business:- |
|
|
| 1.
To confirm the minutes of 28th Annual General Meeting held on December 07,
1998. |
|
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| 2.
To receive and adopt the directors' report and audited accounts of the
company for |
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| the
year ended June 30, 1999. |
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| 3.
To appoint Auditors and fix their remuneration. |
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| 4.
To transact any other business with the permission of the Chairman. |
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|
By order of the Board |
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|
TAR H. ISMAlL |
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| Karachi |
|
CHAIRMAN & CHIEF EXECUTIVE |
|
| 10th
November 1999. |
|
|
| Notes: |
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| 1.
The Share Transfer Books of the Company will be closed from December 20, 1999
to |
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| December
31, 1999 (Both days inclusive). |
|
|
| 2.
A member of the company entitled to attend and vote at meeting may appoint a
proxy |
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| and
vote for him/her. A Proxy must be a member of the company and in order to be |
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| effective
must be received by the company not less than 48 hours before the time of |
|
| holding
the meeting. |
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|
|
| DIRECTORS'
REPORT |
|
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| On
behalf of the Board of Directors I welcome you to the 29th Annual General
Meeting of the |
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| company
and take opportunity to present the Annual Report together with the audited
accounts for |
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| the
year ended June 30,1999. |
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|
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| 1.
FINANCIAL HIGHLIGHTS |
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|
1999 |
|
|
|
|
Rupees |
|
|
|
|
| Loss
Before Taxation |
|
|
2,973,025 |
|
| Add: |
Taxation |
|
|
|
Current Year |
|
|
1,205,546 |
|
|
Prior Years |
|
|
|
85,724 |
|
|
------------------ |
|
|
|
|
1,291,270 |
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|
|
|
------------------ |
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| Loss
for the year after Taxation |
|
|
4,264,295 |
|
|
|
|
========== |
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|
|
|
| 2.
OPERATING RESULTS |
|
|
| 2.1
Depressed conditions continued during the year and sales revenue did not pick
up |
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| but
matched the last year's level Rs. 22.83 million. Selling prices of tufted
products |
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| and
sales volume remained under pressure where as input costs increased |
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| disproportionately
which could not be passed on to buyers. Gross profit consequently |
|
| decreased
from 15.58% to 14.74% during the year as compared to last year. |
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|
|
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| 2.2
Bank markup ranging from 0.53 to 0.61 paisas per thousand per day continued
to |
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| erode
the profitability and liquidity position of the company. The high financing
cost |
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| matter
has been taken up with the bankers in the recent past. |
|
|
| 2.3
Free import of carpet and blankets together with channel like Smuggling and
Afghan |
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| Transit
have blatantly affected our manufacturing. Carpet manufacturing remained |
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| more
or less inoperative because of fiscal anomaly in the sense that Finished
Carpet |
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| duty
is 35 % whereas carpet yarn being raw material for our use the duty is 35%. |
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|
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| 2.4
Earning per share at the year end computes in negative Rs. 1.97 (1998
negative |
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| Rs.
1.71) due to after tax loss and minimum tax. |
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|
|
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| 2.5
Pattern of shareholding is annexed to the report. |
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|
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| 2.6
The company has made an assessment of the computer system related to the year |
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| 2000
and is satisfied that same is Y2K compliant. |
|
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| 3.
AUDIT OBSERVATION |
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| The
audit observation regarding accounts receivable balance to the extent of |
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| Rs.
1,457,428/= were outstanding for over three years at the year end. In this
connection |
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| out
of the outstanding balance a sum total of Rs. 542,450/- has been received
subsequent |
|
| to
the balance sheet date till the signing of this report. Management is
confident to recover |
|
| the
remaining balance Rs. 914,978/= by June 30, 2000. |
|
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| 4.
FUTURE OUTLOOK |
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| Sluggish
conditions coupled with unending upward trend of input costs will have a
definite |
|
| bearing
on operating performance. General depressed economic condition visa vis
ongoing |
|
| smuggling
and tariff policy will continue to hamper the organized industry in competing
the |
|
| market
on a level playing field. |
|
|
| 5. AUDITORS |
|
|
| M/S.
RAHIM IQBAL RAFIQ & COMPANY, Chartered Accountants retire and offer
themselves |
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| for
reappointment as auditors for the ensuing year. |
|
|
|
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| 6.
ACKNOWLEDGEMENT |
|
| Under
the highly depressed and recessionary conditions we appreciate the commitment
of |
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| our
workforce at all levels. The response of our esteemed clients and dealers
never let us |
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| down
despite sluggish market conditions. We have been always louding the
contribution |
|
| and
co-operation extended from time to time by MCB and PICIC as banker and lender
in |
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| our
growth over the years. |
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|
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|
On behalf of Board of Directors |
|
|
|
|
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|
TAR H. ISMAlL |
|
| Karachi
November 10, 1999. |
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CHAIRMAN & CHIEF EXECUTIVE |
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|
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| AUDITORS'
REPORT TO THE MEMBERS |
|
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| We
have audited the annexed Balance Sheet of Moonlite (Pak) Limited as at June
30, |
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| 1999
and the related Profit and Loss Account and 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 account have been kept by the company as
required |
|
| by
the Companies 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 |
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| 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 |
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| company's
business; and |
|
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| (iii)
the business conducted, investment made and the expenditure incurred |
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| during
the year were in accordance with the objects of the company; |
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|
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| (c)
in our opinion and to the best of our information and according to the
explanations |
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| given
to us, the Balance Sheet and Profit and Loss Account and the 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 June 30,
1999; |
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| and
of the loss and the change in financial position for the year then ended: and |
|
|
|
|
| (d)
in our opinion, "No Zakat was deductible at source under the Zakat and
Ushr |
|
| Ordinance, 1980". |
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|
|
| Karachi: |
|
|
RAHIM IQBAL RAFIQ & CO. |
|
| 10th
November 1999. |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised Capital |
|
|
|
| 4,000,000
Ordinary Shares of Rs. 10/- each |
|
|
40,000,000 |
40,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
3 |
21,595,860 |
91,595,860 |
|
| Reserves |
|
4 |
399,305 |
399,305 |
|
| Accumulated
(loss) / profit |
|
|
(7,731,483) |
(3,467,188) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
14,263,682 |
18,597,977 |
|
| LONG
TERM LOANS |
|
5 |
7,118,799 |
14,049,057 |
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
| SUBJECT
TO FINANCE LEASE |
|
6 |
9,799,393 |
15,749,982 |
|
|
|
|
|
| DEFERRED
TAXATION |
|
|
1,800,000 |
1,800,000 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
Term 'Finances |
|
7 |
134,983,429 |
134,903,264 |
|
| Current
portion of long term liabilities |
|
8 |
19,149,749 |
13,935,840 |
|
| Creditors,
accrued and other liabilities |
|
9 |
138,958,926 |
103,960,457 |
|
| Taxation |
|
|
1,205,546 |
1,202,239 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
294,297,650 |
254,001,800 |
|
| CONTINGENCY
AND COMMITMENTS |
|
10 |
------------------ |
------------------ |
|
|
|
|
327,279,524 |
304,128,816 |
|
|
|
|
========== |
========== |
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
|
| Operating assets |
|
11 |
67,587,459 |
69,389,431 |
|
| Capital
work-in-progress |
|
12 |
5,900,000 |
1,200,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
73,487,459 |
70,589,431 |
|
|
|
|
|
| LONG
TERM INVESTMENTS |
|
13 |
25,000 |
25,000 |
|
| LONG
TERM DEPOSITS |
|
14 |
3,019,208 |
3,079,918 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
15 |
5,346,667 |
6,410,734 |
|
| Stock in trade |
|
16 |
152,709,405 |
143,377,958 |
|
| Trade debts |
|
17 |
77,027,155 |
64,117,609 |
|
|
|
|
| Loans,
advances, deposits, |
|
|
|
| prepayments
and other receivables |
|
18 |
15,257,351 |
15,922,875 |
|
| Cash
and bank balances |
|
19 |
407,279 |
605,291 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
250,747,857 |
230,434,467 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
327,279,524 |
304,128,816 |
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these financial statements. |
|
|
| Karachi: |
|
TAR H. ISMAlL |
|
M. SOHAIL UMER |
|
| 10th
November 1999. |
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
| Sales |
|
20 |
228,270,917 |
228,575,255 |
|
| Cost of goods sold |
|
21 |
(194,625,929) |
(192,948,324) |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
33,644,988 |
35,626,931 |
|
| Processing
receipts |
|
22 |
12,077,647 |
10,338,946 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
45,722,635 |
45,965,877 |
|
| Operating
Expenses |
|
|
|
|
| Administration
and general |
|
23 |
7,775,516 |
10,379,768 |
|
| Selling
and distribution |
|
24 |
5,282,820 |
5,559,754 |
|
| Financial |
|
25 |
35,903,933 |
32,999,668 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(48,939,190) |
(48,962,269) |
|
|
|
|
------------------ |
------------------ |
|
| Operating loss |
|
|
(3,239,634) |
(2,973,313) |
|
| Other income |
|
26 |
266,609 |
966,798 |
|
|
|
------------------ |
------------------ |
|
|
|
|
(2,973,025) |
(2,006,515} |
|
| Workers'
welfare fund |
|
|
-- |
(93,789) |
|
|
|
|
------------------ |
------------------ |
|
| (Loss)
/ Profit before taxation |
|
|
(2,973,025) |
(2,100,304) |
|
| Taxation |
|
|
|
| - Current |
|
1,205,546 |
1,202,239 |
|
| -
Prior years' |
|
85,724 |
389,876 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(1,291,270) |
1,592,115) |
|
|
|
|
------------------ |
------------------ |
|
| (Loss)
/ Profit after taxation |
|
|
(4,264,295) |
(3,692,419) |
|
| Unappropriated
(Loss) / Profit brought forward |
|
|
(3,467,188) |
225,231 |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
(Loss) / Profit carried forward |
|
|
(7,731,483) |
(3,467,188) |
|
|
|
|
------------------ |
------------------ |
|
| Earning
per share - Basic and Diluted |
|
33 |
(1.97) |
(1.71) |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
TAR H. ISMAIL |
|
|
M. SOHAIL UMER |
|
|
CHIEF EXECUTIVE |
|
|
DIRECTOR |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| (Loss)
/ Profit before taxation |
|
|
(2,973,025) |
(2,100,304) |
|
| Adjustment for: |
|
|
|
| Depreciation |
|
|
7,886,182 |
8,070,253 |
|
| Gain
on disposal of fixed assets |
|
|
(266,609) |
(392,635) |
|
| Financial charges , |
|
|
35,903,933 |
32,999,668 |
|
| (Increase)
/ Decrease in working capital |
|
29 |
5,570,576 |
(12,429,530) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operation |
|
|
46,121,057 |
26,147,452 |
|
|
|
|
|
| Financial
charges paid |
|
|
( 17,389,217) |
(31,772,288) |
|
| Taxes paid |
|
|
(1,287,963) |
(1,690,285) |
|
| Gratuity paid |
|
|
(9,544,383) |
(885,467) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (out flow)/inflow from operating activities |
|
|
17,899,494 |
(8,200,588) |
|
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Fixed
capital expenditure |
|
|
|
(12,289,759) |
(2,098,304) |
|
| Proceeds
from disposal of fixed assets |
|
|
1,772,158 |
602,000 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow) from investing activities |
|
|
( 10,517,601) |
(1,496,304) |
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
| Lease
finance obtained |
|
|
-- |
10,180,029 |
|
| Loan
from directors and their family members |
|
|
-- |
4,106,156 |
|
| Repayment
of long term loans |
|
|
(3,963,000) |
(7,151,000) |
|
| Payment
of lease liabilities |
|
|
(3,703,938) |
(3,531,985) |
|
| Long
term deposits (net) |
|
|
60,710 |
(935,788) |
|
| Dividend paid |
|
|
(227) |
(2,131,831) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow/(outflow) from financing activities |
|
|
(7,606,455) |
535,581 |
|
|
|
|
------------------ |
------------------ |
|
| (Decrease)/Increase
in cash and cash equivalents |
|
|
{224,562) |
(9,161,311) |
|
| Cash
and cash equivalents at beginning of the year |
|
|
(15,805,211) |
(6,643,900) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at end of the year |
|
30 |
(16,029,773) |
(15,805,211) |
|
|
|
|
========== |
========== |
|
|
|
TAR H. ISMAlL |
|
|
M. SOHAIL UMER |
|
|
CHIEF EXECUTIVE |
|
|
DIRECTOR |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED JUNE, 30, 1999 |
|
|
| 1.
STATUS AND ACTIVITIES |
|
| Moonlite
(Pak) Limited was incorporated in Pakistan as Public Limited Company and is
quoted on Karachi Stock |
|
| Exchange.
The company is engaged in the manufacturing oaf woollen yarn, acrylic
blankets, synthetic tufted carpets and |
|
| allied
cotton synthetic products. |
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
|
| These
financial statements have been prepared under the 'historical cost
convention.' |
|
|
|
|
| 2.2
Foreign currencies |
|
|
| Assets
and liabilities in foreign currencies not covered by forward exchange risk
cover are translated into Pak rupees at |
|
| the
exchange rates prevailing at the balance sheet date except those covered by
forward exchange risk cover are |
|
| converted
at contracted rates. Exchange differences are charged to income. |
|
|
| 2.3
Staff retirement benefit |
|
|
| The
Company operated an unfunded gratuity scheme upto March 31, 1997 Provision
was made to cover the obligation |
|
| under
the scheme upto that date, From April 1, 1997 company operates an approved
contributory provident fund |
|
| scheme
for all eligible employees. The scheme is administered by Trustees nominated
under the relevant Trust Deed. |
|
|
| 2.4
Borrowing costs |
|
| Borrowing
costs are recognised as an expense in the year in which they are incurred
except those that are directly |
|
| attributable
to the acquisition of a fixed assets. |
|
|
| The
capitalisation of borrowing costs as part of a fixed assets commences when
expenditure for the assets are being |
|
| incurred,
borrowing costs are being incurred and activity that are necessary to prepare
asset for their intended use are |
|
| in
progress. Capitalization of borrowing costs ceases when substantially all the
activities necessary to prepare the assets |
|
| for
their intended use are complete. |
|
|
| 2.5 Taxation |
|
|
|
| Current |
|
| The
charge for current taxation is based on taxable income at the current rate of
taxation after taking into account tax |
|
| credits
and tax rebates available, if any, or on the basis of 0.5% of turnover,
whichever is higher. |
|
|
| Deferred |
|
| The
company accounts for deferred taxation using the liability method on all
major timing differences. However, deferred |
|
| tax
is not provided if it is determined with reasonable probability that these
timing differences will not reverse in the |
|
| foreseeable
future. 'The deferred tax debits are not incorporated in the financial
statements. |
|
|
| 2.6
Fixed capital expenditure |
|
|
|
| Operating assets |
|
| These
are stated at cost less accumulated depreciation except lease hold land which
is stated at cost. |
|
|
| Depreciation
is charged to income applying the reducing balance method at the rates
specified in operating assets note. |
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. Major renewals
and improvements are |
|
| capitalised,
and assets so replaced, if any, are retired. Gain and loss on disposals of
operating assets is included in |
|
| income currently. |
|
|
| Additions
to fixed assets are depreciated for full year irrespective of date of
purchase. No depreciation is charged on |
|
| fixed
assets in the year of their disposal. |
|
|
| Capital
work in progress |
|
|
| All
cost/expenditure connected with specific assets incurred during the project
implementation period is carried under |
|
| this
head. These are transferred to specific assets as and when assets are
available for use. |
|
|
| 2.7
Accounting for lease |
|
| The
company accounts for the assets acquired under finance lease by recording the
assets and. related liability. Finan- |
|
| cial.
charges are allocated to accounting period in a manner so as to provide a
constant periodic rate of charge on the |
|
| outstanding
liability. Depreciation is charged at the rates specified in the related note
to write off the assets over its |
|
| estimated
useful life in view of the certainty of ownership of the assets at the end of
the lease period. |
|
|
| 2.8
Long term investments |
|
| These
are valued at cost |
|
|
| 2.9
Stores, spares and loose tools |
|
| Stores,
spares and loose tools are valued at average cost. |
|
|
| 2.10
Stock in trade |
|
| These
are valued at lower of cost and net realizable value. Cost is determined by
applying the following basis. |
|
|
| a.
Raw and packing material |
|
at average cost. |
|
| b. Work in process |
|
at average prime cost. |
|
| c. Finished good |
|
at average manufacturing
cost. |
|
| d.
Raw material in bonded warehouse |
at actual cost. |
|
| e.
Raw material in transit |
|
at actual cost. |
|
|
| 2.11 Trade debts |
|
|
| Debts
if considered irrecoverable are written off and provision is made for the
amount considered doubtful. |
|
|
|
|
| 2.12
Revenue recognition |
|
| - Sales are recorded on
despatch of goods. |
|
| - Income on
investments are recorded when received. |
|
| - Export rebate is
recorded when received. |
|
|
|
1999 |
1998 |
|
|
|
RUPEES |
RUPEES |
|
|
|
|
|
|
| 3.
ISSUED, SUBSCRIBED AND PAID-UP CAPITAL |
|
|
| 1,9,34,050
(1998: 1,234,050) Ordinary Shares |
|
|
| of
Rs. 10/- each fully paid in cash |
|
12,340,500 |
12,340,500 |
|
| 925,536
(1998: 99.5,536) Ordinary Shares |
|
|
| of
Rs. 10/- each issued as fully paid bonus shares |
|
9,255,360 |
9,255,360 |
|
|
|
------------------ |
------------------ |
|
|
|
21,595,860 |
21,595,860 |
|
|
|
========== |
========== |
|
|
|
|
|
| 4. RESERVES |
|
|
|
| Capital Reserve |
|
399,305 |
399,305 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 5.
LONG TERM LOANS |
|
|
|
| Secured |
|
(5.1) |
3,012,643 |
9,942,901 |
|
| Unsecured |
|
(5.2) |
4,106,156 |
4,106,156 |
|
|
