| Suhail Jute Mills Limited |
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|
| Annual
Report 1999 |
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| Contents |
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| Board
of Directors |
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| Notice
of Meeting |
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| Directors'
Report to the Shareholders |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Statement
of Cash Flow |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| Board
of Directors |
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| Chairman |
Mian Farooq Ahmad Shaikh |
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| Managing/Director |
Sohail Farooq Shaikh |
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| Director |
Mian Rashid Ahmed
Mussarrat |
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|
Mr. Muhammad Aslam Hayat
Qureshi |
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|
Mr. Azam Jamil |
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|
Mrs. Sharmeen Azam Jamil |
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|
Mrs. Saddia Mohsin |
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| Company Secretary |
Muhammad Nadeem |
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| Auditors |
Messerrs Anjum Asim
Shahid & Co. |
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|
(Chartered Accountants) |
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|
Jinnah Avenue, Blue Area, |
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|
Islamabad. |
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| Registered Office |
125-Murree Road, |
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|
Rawalpindi. |
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| Factory |
Kabul River Railway
Station, |
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|
Mardan Road, |
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|
Nowshera, N.W.F.P. |
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| NOTICE
OF MEETING |
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| Notice is hereby given that the 18th
Annual General Meeting of the |
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| shareholders
of Suhail Jute Mills Limited will be held at the Registered |
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| Office
125 Murree Road, Rawalpindi on Tuesday the 14th day of March, |
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| 2000
at 1230 hrs to transact the fol lowing business :- |
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| 1.
To confirm the Minutes of 17th Annual General Meeting held on |
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| January 02, 1999. |
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| 2.
To receive, consider and adopt the Balance Sheet and Profit and Loss |
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| Account
alongwith notes for the year ended 30th June, 1999 together |
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| with
the Directors' and Auditors' report thereon. |
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| 3.
To appoint Auditors for the year 1999-2000 and to fix their remunera- |
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| tion.
M/S Anjum Asim Shahid & Co., Chartered Accountant have |
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| retired
and being eligible offer themselves for re-appointment as Audi- |
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| tors
of the Company. |
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| 4. To transact any other business with the
permission of Chair. |
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|
By Order of the Board |
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| RAWALPINDI |
|
MUHAMMAD NADEEM |
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| Dated:
February 07, 2000 |
COMPANY SECRETARY |
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| NOTE:
(1) A member entitled to attend and vote at the meeting may |
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| appoint an other member as his/her proxy to
attend and vote |
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| for him/her, Proxies in order to be
effective must be received at |
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| the Registered Office of the Company at
least 48 hours before |
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| the time of meeting, |
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| (2)
Shareholders are requested to notify the company of any |
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| change in their address. |
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| (3)
The Share Transfer Books of the company will remain closed. |
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| from 7th March 2000 to 14th March 2000
(Both days inclusive) |
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| DIRECTORS
REPORT TO THE SHARE HOLDERS |
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| DEAR
SHAREHOLDERS |
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|
| The Directors of the Company welcome you
to 18th Annual General |
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| Meeting
of Suhail Jute Mills Ltd and present to you the audited accounts and |
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| the
Auditors report for the year ended 30th June 1999. |
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|
| PERFORMANCE |
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| We
feel pleasure to inform you that this year your company has made an |
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| operating
profit before depreciation of Rs. 10.168 million. Last year profit was |
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| higher
due to the reason of low prices of Raw Jute Internationally etc as was |
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| explained
in previous years report. |
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|
| However the over all lower profit before
tax is due to accrual of Rs.7.5 |
|
| million
for gratuity and also abnormally high provision of depreciation on |
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| basis
revalued assets of the company. We would like to highlight that the |
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| depreciation
if charged on historical cost basis as explained in note 13.3 the |
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| Net
profit will be higher by Rs.3.610 million. |
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|
| Next year operations depends on Pak
Rupees Exchange fluctuation and |
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| the
Govt and its agencies jute goods procurement policy, inputs like electricity |
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| tariffs
borrowing costs and sales tax etc as these factors play an important |
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| role.
If condition remains stable normal profit can be expected in future. |
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| RELATED
MATTERS |
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| Your Company's Net Worth is on sound
footing as per prudential |
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| regulation
parameters |
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|
| National Banks of Pakistan and Habib Bank
Ltd have lodged recovery |
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| suits
against the company which are being contested along with the counter |
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| claims
was explained in detail in previous year report. .However the |
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| compromise
outside the court without prejudice are in process with Habib |
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| Bank
and National Bank of Pakistan. |
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|
| A letter of credit was opened by National
Bank of Pakistan 1994.National |
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| Bank
of Pakistan did not accept the discrepant documents in connection with |
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| letter
of credit opened in 1994.The ship supposed to carry the goods never |
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| docked
nor was destined for Karachi, . For reasons unknown, National Bank of |
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| Pakistan
lost the recovery suits filed by the beneficiary banks in London( the |
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| company
was not a party to the suit).The company has not accepted the |
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| liability
under the Law. |
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| The
Bank in an effort to make good its loss arising due to losing of the case in |
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| London,
the bank to pressurize the company did not renew its fourteen years |
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| old
working capital financing and seek to recover it, resulting in low |
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| productivity
and liquidity crunch. Inspite of the company's best efforts to come |
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| of
a settlement and have its working capital lines restored the bank has not |
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| responded
in to positive manner. |
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| If State Bank of Pakistan can take cognizance
of wrongful practices adopted |
|
| by
the bank the company can be saved from sickness threatened by lack of Working |
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| Capital.
The sickness is being created inspire of the fact that the Balance Sheet |
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| of
the company meets all Prudential Regulation of the credit worthy. |
|
|
| As
regards associated company borrowing/lending, arrangements are on |
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| reciprocal
basis, which were in existence between the associated company and |
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| your
company before the amendment of the ordinance pertaining to associated |
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| company.
However Rs.0.266 million has been received back during the year |
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| inspire
of the serious textile crisis. The associated company has approached for |
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| restructuring/revival
of the industry under the State Bank of Pakistan scheme |
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| and
latest being under the company law in pursuance of the Govt. Policy. |
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|
| DIVIDEND
/ BONUS SHARES |
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| As
regards dividend, since 1996/97 we have been trying to declare dividend / |
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| Bonus
Shares but because of financial institution refusal to give consent. |
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| Further
more we did make request to CLA on 23 12-1996 for removing of the |
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| anomaly
and difficulty coming in our way due to the unrealistic treatment of |
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| depreciation
abnormally high due to the revaluation of assets given in the |
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| Balance
Sheet by the auditors. |
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|
| However
recently the Security and Exchange Commission has taken a rationale |
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| and
realistic step in the matter of deferred tax to its circular no. 16 of 1999 |
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| dated
09-09-1999 the deferred tax case is on similar lines to our request in |
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| connection
with the treatment of depreciation. If the treatment of the |
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| depreciation
on historical cost basis is allowed to be reflected and absorbed in |
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| profit/loss
and the difference of revaluation effect of depreciation is absorbed |
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| in
revaluation surplus would reflect more realistic treatment of depreciation |
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| and
its effect on profit & loss and company thus will be able to give |
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| bonus / dividend. |
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| CIB REPORT |
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| There
is one very important aspect due to which the Bank ability of a company |
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| suffers
on account of alleged bank s liabilities which are not only subject of |
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| litigation
but also have counter claims. |
|
|
| The
disputed liabilities although are sub judice but banks are misusing |
|
| the
State Bank of Pakistan CIB by reporting a default unilaterally thus
concealing the facts of the case. |
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| GENERAL |
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| The
company is taking all possible steps including examination and |
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| upgradation
of technical equipment's and computer hardware to ensure their |
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| Y2K compliance. |
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| The
Board of Directors would like to express their appreciation for the efforts |
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| and
dedication of all officers, staff and workers of the company which enabled |
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| the
management to run the company efficiently during the year. |
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|
| AUDITORS |
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| M/s
Anjum Asim Shahid and Co. Chartered accountants, have retired and are |
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| eligible
to offer themselves for re-appointment as Auditors of the company. |
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|
|
|
On the behalf of Board of
Directors. |
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|
| RAWALPINDI |
|
Mian Farooq Ahmad Shaikh |
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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 Suhail Jute Mills |
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| Limited
as at June 30, 1999 and the related profit and loss account and the |
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| cash
flow statement together with the notes forming part thereof, for the |
|
| year
then ended and we state that: |
|
|
| 1.
An amount of Rs. 27,128,993 (1998: Rs. 25,511,718) is recoverable |
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| from
an associated company, (Colony) Sarhad Textile Mills Limited |
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| (detailed
in note 15 of the financial statements). The recoverability of |
|
| this
amount is dependent on the financial capability of the associated |
|
| company. |
|
|
| 2.
Out of the total financial obligations of Rs. 148,312,120 (1998: Rs. |
|
| 148,312,120)
pertaining to National Bank of Pakistan and Habib Bank |
|
| Limited,
an amount of Rs. 119,916,511 (1998: Rs. 119,916,511) is |
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| reflected
as "disputed and contingent financial liabilities" in the |
|
| financial
statements (detailed in notes 6 & 8 to the financial |
|
| statements).
The banks have disputed this and have gone into |
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| litigation
with the company and are is yet unresolved. |
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|
| Further,
the company has also forwarded an application for |
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| settlement
of the liabilities under the Debt Settlement Scheme of State |
|
| Bank
of Pakistan. In the absence of confirmation from the Banks as |
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| to
the acceptability of the company's proposal or any other |
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| confirmation
and on being unable to corroborate the underlying |
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| assumptions
of the proposals as conceived and debt related |
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| assertions
as made by the management of the company we are unable |
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| to
confirm the correctness of the accounting treatment and related |
|
| disclosures
given in note 6 to the financial statements. |
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| We
also draw attention to note 29 and except for the effects of the above and |
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| without
further qualifying our opinion we report that we have obtained all |
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| the
information and explanations which to the best of our knowledge and |
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| belief
were necessary for the purposes of our audit and after due verification |
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| thereof,
we report that: |
|
|
| a)
in our opinion, proper books of accounts have been kept by the |
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| company
as required by the Companies Ordinance, 1984; |
|
|
| b)
in our opinion: |
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| i)
the balance sheet, 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 |
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| applied, |
|
|
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| 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, investments made and the expenditure |
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| incurred
during the year were in accordance with the objects of the |
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| company; |
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|
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| c)
in our opinion, subject to the adjustments, if any, which may be re- |
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| quired
when the above matters are ultimately resolved, and to the best |
|
| of
our information and according to the explanations given to us, the |
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| balance
sheet, profit and loss account and statement of changes in fi- |
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| nancial
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 June 30, 1999 and of the |
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| profit
and of the cash flows for the year then ended; and |
|
|
| d)
in our opinion, no Zakat was deductible at source under the Zakat and |
|
| Ushr
Ordinance, 1980 |
|
|
| Place: Islamabad |
ANJUM ASIM SHAHID &
CO. |
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| February 4, 2000 |
CHARTERED ACCOUNTANTS |
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|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
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|
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|
NOTE |
1999 |
1998 |
|
| SHARE
CAPITAL AND RESERVES |
|
|
(RUPEES) |
(RUPEES) |
|
|
|
|
|
| Share capital |
|
3 |
37,450,000 |
37,450,000 |
|
| Revenue
reserves |
|
4 |
10,870,000 |
10,870,000 |
|
| Accumulated
loss |
|
|
(10,871,920) |
(13,082,986) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
37,448,080 |
35,237,014 |
|
|
|
|
| SURPLUS
ON REVALUATION OF |
|
|
| FIXED ASSETS |
|
5 |
246,228,869 |
246,228,869 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
283,676,949 |
281,465,883 |
|
|
|
|
|
| DISPUTED
AND CONTINGENT |
|
|
|
| FINANCIAL
LIABILITIES |
|
6 |
119,916,511 |
119,916,511 |
|
|
|
|
|
|
| RESERVE
FOR REDEEMABLE CAPITAL |
|
7 |
-- |
-- |
|
| LONG
TERM LOAN |
|
8 |
-- |
-- |
|
|
|
|
|
|
| DEFERRED
LIABILITY- GRATUITY |
|
9 |
8,429,224 |
1,500,000 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current maturity |
|
10 |
14,591,060 |
14,666,934 |
|
| Short
term borrowing from banks |
|
11 |
16,395,609 |
16,482,989 |
|
| Creditors,
accrued and other liabilities |
|
12 |
49,357,641 |
38,239,737 |
|
| Provision
for taxation |
|
|
5,442,734 |
4,392,734 |
|
|
|
|
------------------ |
------------------ |
|
| CONTINGENCIES
& COMMITMENTS |
|
30 |
85,787,044 |
73,782,394 |
|
|
|
|
------------------ |
------------------ |
|
|
497,809,728 |
476,664,788 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
|
Mian Farooq Ahmad Shaikh |
|
|
|
CHAIRMAN |
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
|
(RUPEES) |
(RUPEES) |
|
| FIXED
ASSETS- Tangible |
|
|
|
|
| At
cost or reassessed values |
|
13 |
362,712,654 |
391,777,193 |
|
| Less
· Accumulated depreciation |
|
13 |
118,850,718 |
110,845,328 |
|
|
|
|
------------------ |
------------------ |
|
|
|
243,861,936 |
280,931,865 |
|
|
|
|
|
|
| REALIZABLE
ASSETS |
|
14 |
33,512,500 |
2,550,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
277,374,436 |
283,481,865 |
|
|
|
|
| NON
CURRENT ASSETS |
|
15 |
51,867,966 |
50,050,345 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Inventories |
|
16 |
69,073,675 |
53,539,680 |
|
| Trade debtors |
|
17 |
2,321,968 |
2,522,404 |
|
| Advances,
deposits, prepayments and other |
|
|
|
| receivables |
|
18 |
20,876,318 |
19,394,384 |
|
| Cash
and bank balances |
|
19 |
76,295,365 |
67,676,110 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
168,567,326 |
143,132,578 |
|
|
|
|
------------------ |
------------------ |
|
|
|
497,809,728 |
476,664,788 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
Sohail Farooq Shaikh |
|
|
|
MANAGING DIRECTOR/CHIEF EXECUTIVE |
|
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| AS
AT JUNE 30, 1999 |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
(RUPEES) |
(RUPEES) |
|
|
| SALES |
|
20 |
142,357,169 |
207,654,691 |
|
| COST
OF SALES EXCLUDING DEPRECIATION |
21 |
96,931,631 |
139,787,576 |
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
EXPENSES |
|
|
45,425,538 |
67,867,115 |
|
|
|
| Administrative
expenses |
|
22 |
10,793,056 |
11,016,759 |
|
| Selling
and distribution expenses |
|
23 |
2,212,847 |
3,942,211 |
|
| Financial
expenses |
|
24 |
22,251,312 |
20,289,517 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
35,257,215 |
35,248,487 |
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT BEFORE DEPRECIATION |
|
10,168,323 |
32,618,628 |
|
| Depreciation
for the year |
|
13 |
8,005,390 |
8,054,466 |
|
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT |
|
|
2,162,933 |
24,564,162 |
|
| Other income |
|
|
25 |
8,769,766 |
7,910,385 |
|
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE EXTRAORDINARY AND PRIOR |
10,932,699 |
32,474,547 |
|
| YEARS'
ADJUSTMENTS |
|
|
| Extraordinary
items |
|
-- |
22,647,023 |
|
| Gratuity-accrued |
|
|
9 |
7,500,000 |
-- |
|
| Prior
years' adjustment |
|
-- |
1,582,853 |
|
|
------------------ |
------------------ |
|
|
7,500,000 |
24,229,876 |
|
|
------------------ |
------------------ |
|
| PROFIT
FOR THE PERIOD |
|
3,432,699 |
8,244,671 |
|
| Workers
(profit) participation fund |
|
(171,633) |
(412,234) |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
3,261,066 |
7,832,437 |
|
| Provision
for taxation- Current |
|
(1,050,000) |
(2,797,466) |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
FOR THE YEAR AFTER TAXATION |
|
2,211,066 |
5,034,971 |
|
| UNAPPROPRIATED
LOSS BROUGHT FORWARD |
(13,082,986) |
(18,117,957) |
|
|
|
|
------------------ |
------------------ |
|
| ACCUMULATED
LOSS CARRIED TO BALANCE SHEET |
(10,871,920) |
(13,082,986) |
|
|
------------------ |
------------------ |
|
| Earning
per share (before extraordinary items, prior year |
2.92 |
8.67 |
|
| adjustment
& taxation) |
|
------------------ |
------------------ |
|
|
| Eating
per share (after extraordinary items, prior year |
|
0.59 |
1.34 |
|
| adjustment
& taxation) |
|
------------------ |
------------------ |
|
|
| The
annexed notes form an integral part of these |
|
| financial
statements. |
|
|
|
Mian Farooq Ahmad Shaikh |
|
Sohail Farooq Shaikh |
|
|
CHAIRMAN |
|
MANAGING DIRECTOR/CHIEF EXECUTIVE |
|
|
|
|
| STATEMENT
OF CASH FLOW |
|
| AS
AT JUNE 30, 1999 |
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
(RUPEES) |
(RUPEES) |
|
|
|
|
|
| Cash
flow from operational activities |
|
|
|
| Profit
for the year before taxation |
|
|
3,261,066 |
7,832,437 |
|
| Adjustment
for items not involving movement |
|
|
| of funds: |
|
|
|
| Depreciation |
|
|
8,005,390 |
8,054,466 |
|
| Provision
for gratuity |
|
|
7,500,000 |
1,500,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
15,505,390 |
9,554,000 |
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
18,766,456 |
17,386,903 |
|
| (Increase)/decrease
in current assets: |
|
|
|
|
| Inventories |
|
|
|
(15,533,995) |
(5,316,430) |
|
| Trade debts |
|
|
|
200,436 |
761,199 |
|
| Advances,
deposits, prepayments and |
|
(1,481,934) |
(991,530) |
|
| other
receivables |
|
|
------------------ |
------------------ |
|
|
|
|
(16,815,492) |
(5,546,761) |
|
| Increase/
(decrease) in current liabilities |
|
|
|
| Creditors,
accrued and other liabilities |
|
11,117,903 |
(9,044,897) |
|
|
|
|
|
------------------ |
------------------ |
|
| (Increase)
/ decrease in Non-current assets |
|
11,117,903 |
(9,044,897) |
|
|
|
|
|
|
| Gratuity paid |
|
|
|
|
(570,776) |
-- |
|
| Withholding
tax refundable |
|
|
|
(200,346) |
(233,320) |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(771,122) |
(233,320) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
10,346,781 |
(9,278,217) |
|
|
|
|
| Net
cash from operating activities |
|
(A) |
12,297,745 |
2,561,925 |
|
| Cash
flow from investing activities |
|
|
|
|
| Purchase
of operating fixed assets |
|
|
(1,897,961) |
(1,311,628) |
|
| Due
from associated undertaking |
|
|
(1,617,275) |
(1,778,280) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities |
|
(B) |
(3,515,235) |
(3,089,908) |
|
|
|
|
|
|
|
|
| Cash
flow from financing activities |
|
|
| Adjustment
of long term loan |
|
|
-- |
14,458,989 |
|
| Adjustment
of disputed liabilities |
|
|
-- |
22,647,023 |
|
| Adjustment
of short term borrowings |
|
|
(87,380) |
1,728,806 |
|
| Repayment
of long term loan |
|
|
-- |
(2,000,000) |
|
| Repayment
of redeemable capital |
|
|
(75,874) |
(226,535) |
|
| Proceeds/(payments)
of finance lease |
|
|
-- |
(132,118) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from financing activities |
|
(C) |
(163,254) |
36,476,165 |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Net
increase/{decrease) in cash and cash |
|
8,619,255 |
35,948,182 |
|
| equivalents |
|
|
|
| Cash
and cash equivalents at the beginning |
|
|
67,676,110 |
31,727,928 |
|
| of the year |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of |
|
|
76,295,365 |
67,676,110 |
|
| the year |
|
|
|
========== |
========== |
|
|
|
|
Mian Farooq Ahmad Shaikh |
|
Sohail Farooq Shaikh |
|
|
CHAIRMAN |
|
MANAGING DIRECTOR/CHIEF EXECUTIVE |
|
|
|
| STATEMENT
OF CHANGE IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
Share |
Revenue |
Revaluation |
Accumulated |
Total |
|
| Particulars |
|
Capital |
Reserve |
Reserves |
(Loss) |
|
|
|
|
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
|
|
|
|
|
| Balance
as on June 30,1997 |
37,450,000 |
10,870,000 |
246,228,869 |
(18,117,957) |
276,430,912 |
|
| Net
gain or loss not recognized in the |
|
|
| income
statement |
-- |
-- |
-- |
-- |
-- |
|
| Net
profit for the year |
-- |
-- |
-- |
5,034,971 |
5,034,971 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as on June 30, 1998 |
37,450,000 |
10,870,000 |
246,228,869 |
(13,082,986) |
281,465,883 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
|
|
| Balance
as on June 30, 1998 |
37,450,000 |
10,870,000 |
246,228,869 |
(13,082,986) |
281,465,883 |
|
| Net
gain or loss not recognized in |
|
|
| the
income statement |
-- |
-- |
-- |
-- |
-- |
|
| Net
profit for the year |
-- |
-- |
-- |
2,211,066 |
2,211,066 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as on June 30, 1999 |
37,450,000 |
10,870,000 |
246,228,869 |
(10,871,920) |
283,676,949 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
Mian Farooq Ahmad Shaikh |
|
Sohail Farooq Shaikh |
|
|
CHAIRMAN |
|
MANAGING DIRECTOR/CHIEF EXECUTIVE |
|
|
|
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| Suhail
Jute Mills Limited ("the company") was incorporated in Pakistan in |
|
| 1981
as a public limited company under the Companies Act, 1913. Its |
|
| shares
are quoted on all stock exchanges in' Pakistan. The company is |
|
| principally
engaged in the business of manufacturing and sale of Jute |
|
| products. |
|
|
| 2.
PRINCIPAL ACCOUNTING POLICIES |
|
| The
following accounting policies have been consistently applied in dealing |
|
| with
items which are considered material in relation to the company's accounts: |
|
|
| 2.1
Basis of accounting |
|
|
|
| These
accounts have been prepared under the historical cost |
|
| convention
as modified by the adjustment of revaluation of fixed assets |
|
| referred
to in note # 5, 13 and 14. |
|
|
|
|
|
|
| 2.2 Taxation |
|
|
|
| Current: |
|
| Provision
for current taxation is based on current rates of tax |
|
| after
taking into account tax credits available, if any, in the Income |
|
| Tax
Ordinance, 1979. |
|
|
| Deferred: |
|
| The
company accounts for deferred taxation on all material timing dif- |
|
| ferences
using the liability method. However, provision for deferred |
|
| taxation
is not accounted for in these financial statements if it can be |
|
| established
with reasonable certainty that these timing differences will |
|
| not
reverse in the foreseeable future. |
|
|
| 2.3
Fixed capital expenditure and depreciation |
|
| Company
owned assets |
|
| Fixed
assets are principally stated at cost less accumulated deprecia- |
|
| tion,
while the revalued assets are stated at revalued amounts less |
|
| accumulated
depreciation. |
|
|
| Capital
work in progress is stated at cost. These costs are transferred |
|
| to
fixed assets as and when the assets are ready for use. |
|
|
| Depreciation
is charged to income applying the reducing balance |
|
| method.
Full year's depreciation is charged on additions during the year |
|
| and
no depreciation is charged on the assets deleted during the year. |
|
|
| Maintenance
and normal repairs are charged to income as and when |
|
| incurred.
Major renewals and improvements are capitalized. Gain or |
|
| loss
on retirement or disposal of fixed assets is included in current |
|
| year income. |
|
|
| Exchange
differences are depreciated subsequent to the year in which |
|
| these
are capitalized. |
|
|
|
|
| Leased assets |
|
| The
company accounts for assets under finance lease by recording the |
|
| asset
and the related liability. The amounts are determined on the |
|
| basis
of the lower of fair value of the assets and the present value of |
|
| minimum
lease payments. |
|
|
| Financial
charges are charged to profit and loss account and are |
|
| allocated
to accounting periods in a manner so as to provide a |
|
| constant
periodic rate of charge on the outstanding liability |
|
| Depreciation
is charged at the same rates as company owned assets, |
|
| so
as to write off the assets over their estimated useful lives in view of |
|
| the
certainty of the ownership of the assets at the end of the lease. |
|
|
| In
case of operating leases, lease rentals are charged to income |
|
| currently. |
|
|
|
|
| 2.4
Stores and spares |
|
| These
are valued at moving average cost. |
|
|
|
|
| 2.5
Stock in trade |
|
| These
are valued at lower of cost and net realizable value, Cost of the |
|
| major
components of stocks are determined as follows: |
|
|
| Raw material |
|
- On average cost basis |
|
| Work
in process and |
- Production cost and related |
|
| finished goods |
|
overheads |
|
| Material
in transit |
- Material cost and other |
|
|
charges paid thereon |
|
|
| Net
realizable value signifies the estimated selling price in the ordinary |
|
| course
of business less cost necessarily to be incurred in order to make |
|
| the sale. |
|
|
|
|
| 2.6 Debts |
|
|
|
| Known
bad debts are written off, while debts considered doubtful of |
|
| recovery
are fully provided for: |
|
|
|
|
|
| 2.7
Revenue recognition |
|
| Sales
represent the invoiced value of goods despatched by the |
|
| company
to its customers during the year. Return on marketable |
|
| securities
is accounted for an receipt basis. |
|
|
|
|
|
| 2.8
Deferred costs |
|
| These
are written off over a maximum period of five years. |
|
|
| 2.9
Staff retirement benefits |
|
| The
company operates an unfunded gratuity scheme for all its |
|
| permanent
employees. Provision has been made in the accounts to |
|
| cover
the obligations under the scheme based on one month's last |
|
| drawn
gross salary for each completed year. |
|
|
| 2.10
Rates of exchange |
|
|
|
| a)
Assets and liabilities denominated in foreign currencies are |
|
| translated
into rupees at the exchange rates ruling at the |
|
| balance
sheet date or at the rate of the foreign exchange cover, |
|
| where
applicable. Exchange differences arising there from are |
|
| capitalized. |
|
|
|
|
|
|
| b)
Exchange difference arising on account of purchase and sales |
|
| of
goods and services are taken to profit and loss account or |
|
| capitalized
according to the nature of the transaction. |
|
|
| 2.11
Investments |
|
| Realizable
assets are stated at cost or reassessed values. |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
|
(RUPEES) |
(RUPEES) |
|
| 3
SHARE CAPITAL |
|
|
|
| Authorized: |
|
|
|
|
| 5,000,000
(1998: 5,000,000) ordinary |
|
|
|
| shares
of Rs. 10 each |
|
|
50,000,000 |
50,000,000 |
|
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up: |
|
|
|
| 3,245,000
(1998: 3,245,000) ordinary shares |
|
|
| of
Rs. 10 each issued for cash |
|
32,450,000 |
32,450,000 |
|
| 500,000
(1998: 500,000) ordinary shares of |
|
|
| Rs.
10 each issued for consideration other than cash |
|
5,000,000 |
5,000,000 |
|
|
|
------------------ |
------------------ |
|
|
|
37,450,000 |
37,450,000 |
|
|
|
|
========== |
========== |
|
| 4.
REVENUE RESERVES |
|
|
|
| These
are made up as follows: |
|
|
|
| - General reserve |
|
|
|
|
3,380,000 |
3,380,000 |
|
| -
Dividend equatization reserve |
|
|
|
7,490,000 |
7,490,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
10,870,000 |
10,870,000 |
|
|
|
|
========== |
========== |
|
| 5.
SURPLUS ON REVALUATION OF FIXED ASSETS |
|
|
|
| Surplus
on revaluation of land |
|
|
|
| - Land at Mill site |
(Note 5.1) |
|
|
7,067,886 |
7,067,886 |
|
| -
Land at Kabul River station near (Note 5.2) |
|
|
29,167,447 |
29,167,447 |
|
|
|
|
|
|
| Surplus
on revaluation of buildings, plant |
|
|
209,993,536 |
209,993,536 |
|
| and machinery |
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
246,228,869 |
246,228,869 |
|
|
|
|
========== |
========== |
|
|
|
|
| 5.1
The surplus arising from revaluation of mill's land by the directors during |
|
| the
accounting year 1992 was based on the valuation certificates of the |
|
| Revenue
Authorities of N.W.F.P. which amounted to Rs. 7,067,886. The |
|
| cost
of land before revaluation was Rs. 432,114 and was revalued by the |
|
| directors
on the basis of the prevailing market conditions. |
|
|
| 5.2
Land at Kabul River Station near the factory appearing at cost of Rs. |
|
| 1,795,053
was revalued at Rs. 30,962,500 by M/s Razzaq Umrani & Co. |
|
| Lahore
at the then prevailing market rates during the accounting year |
|
| ended
30th June, 1992. In the opinion of the directors, this represents |
|
| the
fair value of the land. |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
|
(RUPEES) |
(RUPEES) |
|
| 6.
DISPUTED AND CONTINGENT |
|
|
| FINANCIAL
LIABILITIES |
|
|
|
| National
Bank of Pakistan |
|
(Note 6.1) |
33,079,608 |
33,079,608 |
|
| Habib
Bank Limited |
|
(Note 6.2) |
86,836,903 |
86,836,903 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
119,916,511 |
119,916,511 |
|
|
|
|
========== |
========== |
|
|
| The
company has identified certain financial liabilities of National Bank of |
|
| Pakistan
and Habib Bank Limited which are not acceptable to the company |
|
| on
grounds that the circumstances do not justify such liabilities to be |
|
| chargeable
to the account of the company. Accordingly such liabilities have |
|
| been
disputed. The company while providing for such liability has |
|
| separated
these amounts to be disclosed as a disputed and contingent |
|
| liability. |
|
|
| The
company has also undertaken and applied for settlement of its |
|
| defaulted
liabilities with National Bank of Pakistan and Habib Bank Limited |
|
| under
the scheme of settlement announced by the State Bank of Pakistan |
|
| under
its BPRD Circular Letter No. 26 dated 11 November 1998. The |
|
| management
is of the point of view that a considerable part of the |
|
| outstanding
liabilities are to be waived through settlement under this |
|
| scheme.
As such the company while providing for such liabilities has |
|
| separated
such amounts to be disclosed as a liability contingent upon the |
|
| finalization
of the settlement under the State Bank Scheme and |
|
| consequently
has included it in disputed and contingent liability. |
|
|
| The
liabilities covered hereunder relate to National Bank of Pakistan and |
|
| Habib
Bank Limited are as follows:- |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
(RUPEES) |
(RUPEES) |
|
| 6.1
National Bank of Pakistan |
|
|
|
| Cash finance |
|
|
(Note 6.1.1) |
7,880,725 |
7,880,725 |
|
| Bills of exchange |
|
|
(Note 6.1.2) |
2,551,860 |
2,551,860 |
|
| Forced
Liability- L/C No. 382/40/8 |
|
|
(Note 6.1.3) |
22,647,023 |
22,647,023 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
33,079,608 |
33,079,608 |
|
|
|
|
========== |
========== |
|
|
| 6.1.1
The above amount reflects the banks claim on various accounts |
|
| including
excessive / compounded markup, unverified transactions |
|
| and
unrelated entries in the concerned facility, which the company is |
|
| contesting.
This cash finance facility is under sale / purchase markup |
|
| (NIB)
arrangement, which expired on December 31, 1996 and was |
|
| subsequently
not renewed. |
|
|
| 6.1.2
The above amount reflects the banks claim on markup charged on |
|
| Import
Letter of Credit / Bills of Exchange against which the company |
|
| is contesting. |
|
|
| 6.1.3
The Bank has debited the company's accounts in respect of costs |
|
| arising
from a decision involving litigation between the Bank and a |
|
| negotiating
bank in London relating to non-acceptance / return of |
|
| discrepant
documents of the letter of credit opened in 1994 by the |
|
| Bank
through its Nowshera Cantonment branch on behalf of the |
|
| company.
Initially the cost charged to the account of the company |
|
| amounted
to Rs. 11.139 million during 1996-97 'which was |
|
| subsequently
increased to Rs. 21.057 million in 1997-98 due to |
|
| additional
charges. Since the company is not a direct party to the |
|
| litigation
and since the costs arose as a consequence of the Bank's |
|
| inability
to take corrective action timely, therefore, the company |
|
| does
not accept such liability including any consequential or |
|
| additional
costs or markup and contests this being charged to their |
|
| account. |
|
|
| 6.1.4
The National Bank of Pakistan has filed a suit under which it has |
|
| claimed
for all outstanding liabilities (including claims identified in |
|
| Note
11) of Rs. 49.48 million together with interest at various rates |
|
| till
the date of decree and recovery of decretal amount which the |
|
| company
is contesting. |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
|
(RUPEES) |
(RUPEES) |
|
| 6.2
Habib Bank Limited |
|
|
|
| Long term loan |
|
|
(Note 6.2.1) |
86,836,903 |
86,836,903 |
|
|
|
|
========== |
========== |
|
|
| 6.2.1
The above amount reflects the Bank's claim for capitalized mark up |
|
| /interest,
excise duty and other financial charges, which the |
|
| company
has been contesting on the grounds that the same |
|
| comprises
of compounded mark up/interest and other un justified |
|
| charging
entries. Furthermore, the company has moved an |
|
| application
for settlement of such outstanding liabilities under the |
|
| State
Bank of Pakistan scheme for settlement of' liabilities, without |
|
| prejudice
to the company's rights and the pending litigation. |
|
| Consequently
the amount stated above is considered as disputed |
|
| and
is subject to settlement with the Bank. |
|
|
| 6.2.2
The Bank has filled a suit for the recovery of the total amount due to |
|
| them
which includes the amount shown above. This is defined in |
|
| more
detail in Note 8 below. |
|
|
| 7.
RESERVE FOR REDEEMABLE CAPITAL |
|
|
| 7.1
The redeemable capital represents Participation Term Certificates |
|
| (PTCs)
the total disbursed amount of which was Rs. 14,300,000. The |
|
| PTCs
were repayable in sixteen semi annual installments, beginning |
|
| from
30th December, 1984 and ending in December 1992. |
|
|
|
|
| 7.2
The company has already settled with Bankers Equity Limited, the |
|
| consortium
leader under the provisions of State Bank of Pakistan |
|
| circular
No. 19 & 21 dated 5th & 7th June, 1997 along with some |
|
| other
members to the extent of 70% of the PTC issue. |
|
|
| 7.3
The outstanding claims of the remaining members amounting to Rs. |
|
| 1,360,000
remains unsettled and has been provided for through |
|
| provision
of Rs. 2,591,060 (1998: Rs. 2,666,934) reflected in the |
|
| current
liabilities. The difference between the claim and the amount |
|
| provided
is to cater for any additional cost arising at the time of final |
|
| settlement
with the financial institutions. |
|
|
| 7.4
Under the trust deed and investment agreement, the syndicate |
|
| investment
and any accrual to it whether represented by PTCs or |
|
| otherwise
are secured by first fixed mortgage of all present and future |
|
| land
and building belonging directly or indirectly to the company and |
|
| all
plants, equipment and machinery that are installed at present or |
|
| that
may be installed in future. The PTCs are also secured by a |
|
| floating
charge on the company's undertaking and all its assets and |
|
| property
both present and future. The first fixed mortgage and the |
|
| floating
charge shall rank pari passu with the mortgage and charge |
|
| created
in favour of Habib Bank Limited. |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
(RUPEES) |
(RUPEES) |
|
| 8.
LONG TERM LOAN |
|
|
|
| Habib
Bank Limited |
|
|
|
|
|
|
|
|
| Total
loan outstanding claimed |
|
|
(Note 8.1) |
12,000,000 |
86,377,914 |
|
| by the Bank. |
|
|
|
|
|
|
|
|
|
| Interest
and excise duty capitalized |
|
|
-- |
14,458,989 |
|
| by the Bank. |
|
|
------------------ |
------------------ |
|
|
|
12,000,000 |
100,836,903 |
|
|
|
|
|
|
| Loan
considered disputed / |
|
|
(Note 6.2/8.2) |
-- |
(86,836,903) |
|
| contingent
by company |
|
|
|
------------------ |
------------------ |
|
|
|
|
| Amount
considered payable for |
|
(Note 8.2) |
12,000,000 |
14,000,000 |
|
| settlement
under the State Bank of |
|
|
|
|
|
| Pakistan
scheme of settlement. |
|
|
|
|
|
|
|
|
|
|
| Amount
paid under |
|
(Note 8.2) |
-- |
(2,000,000) |
|
|
|
|
------------------ |
------------------ |
|
| SBP
settlement scheme |
|
|
12,000,000 |
12,000,000 |
|
|
|
|
|
|
| Balance
payable - transferred to |
|
(Note 10) |
12,000,000 |
(12,000,000) |
|
| current maturity. |
|
|
|
------------------ |
------------------ |
|
|
|
|
|
-- |
-- |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 8.1
This amount represents the total outstanding in respect of eleven |
|
| independent
loans provided to the company during 1985 to 1990 by |
|
| Habib
Bank Limited on mark up basis with the aggregate principal |
|
| amount
of Rupees 34.464 million plus capitalized markup / interest |
|
| and
other costs till to date of Rs. 4.875 million. Subsequently in |
|
| 1991
the balances outstanding on such loans was consolidated to |
|
| form
one forced loan, payable in 20 equal semi annual installments of |
|
| Rs.
5.76 million each commencing from June 1991 and carries mark |
|
| up
@ 14% per annum. As against twenty semi annual installments |
|
| the
company could pay only five installments uptill 1993. |
|
|
| Thereafter,
in 1995 the Bank have given consent to a grace period of |
|
| two
years till June 30 1997, conditional upon payment of Rs. 10 |
|
| million
in five semi annual installments of Rs. 2.000 million each. The |
|
| repayment
of the balance outstanding as on June 30, 1997 was to be |
|
| finalized
after rendition in accounts and taking into consideration the |
|
| cash
flow position of the company as at that date, vide letter No. |
|
| AHQ/CBS/1727
dated July 25, 1995. Meanwhile the State Bank of |
|
| Pakistan
has introduced a debt settlement scheme under its circular |
|
| No.
19 dated June 05, 1997 for which the company has applied on |
|
| June
25, 1997 for settlement of its debts. |
|
|
|
| 8.2
This amount represents the liabilities disputed by the company and |
|
| the
amount of liabilities expected to be waived through settlement |
|
|
| under
the State Bank of Pakistan scheme for settlement of liabilities |
|
|
| issued
under its BPRD circular letter No. 27 dated November 11, |
|
|
| 1998.
Consequently the amount considered payable to for attaining |
|
|
| final
settlement in respect of the liabilities relating to Habib Bank |
|
|
| Limited
under this scheme is calculated at Rs. 14.000.000 (for all |
|
|
| eleven
loans). As pat of the settlement the company has made |
|
|
| payment
of Rs. 1,500,000 (1998 Rs. 2,000,000) as deposit under the |
|
|
| State
Bank of Pakistan Scheme introduced in 1997 through BPRD |
|
|
| circular
letter No. 19 dated June 5, 1997 read with BPRD circular No. |
|
|
| 36
dated July 17, 1997 without prejudice to the company's rights |
|
|
| and
the pending litigation whereas these payments have not been |
|
|
| acknowledged
and cleared by the bank. |
|
|
|
| 8.3
The Bank has filed a law suit of Rs. 98.836 million against the |
|
| company
for the recovery of the total amount, which the company is |
|
| contesting
on the grounds that it includes compounded mark |
|
| up/Interest
and un justified charging entries as well as amounts to |
|
| be
waived through settlement under the State Bank of Pakistan |
|
| scheme
for settlement of outstanding debts. |
|
|
| 8.4
The loan is secured against equitable mortgage on the present and |
|
| future
fixed assets of the factory. |
|
|
|
|
|
| 9.
DEFERRED LIABILITY- Gratuity |
|
|
| The
Company has provided an amount of Rs. 7,500,000 (1998: Rs. |
|
| 1,500,000)
for fettered gratuity as on June 30, 1999. Previously gratuity |
|
| was
accounted for on payment basis. This year the entire amount of |
|
| gratuity
has been accounted for in order to bring the provision for gratuity |
|
| in
line with the requirements of the statue and the policy of the company. |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
(RUPEES) |
(RUPEES) |
|
| 10
CURRENT MATURITY |
|
|
|
|
|
| Overdue
installments of |
|
|
|
| Long-term loan: |
|
|
|
|
12,000,000 |
12,000,000 |
|
| Redeemable
capital |
|
|
(Note 7) |
2,591,060 |
2,666,934 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
14,591,060 |
14,666,934 |
|
|
|
|
========== |
========== |
|
|
|
|
| 11.
SHORT TERM BORROWING FROM BANKS |
|
|
| National
Bank of Pakistan |
|
|
| Cash Finance |
|
(Note 11.1) |
7,085,796 |
7,085,796 |
|
| Bills
of Exchange |
|
(Note 11.2) |
9,309,813 |
9,309,813 |
|
| ABN Amro Bank |
|
|
|
-- |
87,380 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
16,395,609 |
16,482,989 |
|
|
|
|
========== |
========== |
|
|
| 11.1
This represents facility of cash finance amounting to Rs. 14,966,521 |
|
| which
was under mark-up basis @ 19.7% per annum and is secured |
|
| against
hypothecation of raw jute, finished goods, work-in-process |
|
| and
stores & spares. The company has disputed this liability to the |
|
| extent
of Rs. 7,880,725 as explained more fully in Note 6.1.1 above. |
|
| The
balance of Rs. 7,085,796 (1998: Rs. 7,085,796) is stated as the |
|
| accepted
liability. This facility has expired on December 31, 1996 |
|
| and
since then has not been renewed. The company has applied |
|
| under
State Bank of Pakistan Incentive Scheme as modified in 1998 |
|
| for
settlement, without prejudice to the company's rights and the |
|
| pending
litigation. Moreover, the company have made payments of |
|
| Rs.
1,771,324 to the bank for the settlement of its obligations under |
|
| the
above scheme. These payments have not been acknowledged and |
|
| cleared
by the bank. |
|
|
| 11.2
This represents bills of exchange relating to letters or credit of Rs. |
|
| 11,861,673.
The company has disputed this liability to the extent of |
|
| Rs.
2,551,860 as explained more fully in Note 6.1.2 above. The |
|
| balance
of Rs.. 6,982,359 (1998: Rs. 9,309,813) is stated as the |
|
| accepted
liability. The company has applied for settlement under the |
|
| State
Bank of Pakistan Incentive Scheme, without prejudice to the |
|
| company's
rights and the pending litigation. |
|
|
| 11.3
The National Bank of Pakistan has filed a suit under which it has |
|
| claimed
for all outstanding liabilities (including claims identified in |
|
| Note
6.1) of Rs. 49.48 million together with interest at various rates |
|
| till
the date of decree and recovery of decretal amount which the |
|
| company
is contesting. |
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
(RUPEES) |
(RUPEES) |
|
|
|
|
|
|
|
| 12
CREDITORS, ACCRUED AND OTHER LIABILITIES |
|
| Creditors |
|
(Note 12.1) |
14,035,490 |
24,716,585 |
|
| A6crued
expenses |
|
|
7,395,498 |
6,951,362 |
|
| Security deposit |
|
(Note 12.2) |
1,500 |
1,500 |
|
| Customers
advances |
|
|
1,741,370 |
2,727,853 |
|
| Accrued
mark-up on loans |
|
|
21,149,995 |
-- |
|
| Workers'
(Profit) participation fund |
|
(Note 12.3) |
2,571,375 |
2,133,104 |
|
| Dividend
unclaimed |
|
|
7,935 |
7,935 |
|
| Sales
tax payable |
|
|
526,576 |
-- |
|
| Taxes payable |
|
|
766,736 |
603,753 |
|
| Others |
|
|
1,161,166 |
1,097,645 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
49,357,641 |
38,239,737 |
|
|
|
|
========== |
========== |
|
|
|
|
| 12.1
These includes liabilities on account of deferred letters of credit of |
|
|
| Rs.
11.476 million (1998: Rs. 22.316 million). |
|
|
|
|
|
| 12.2
These represents securities from dealers. The deposit do not carry |
|
| any
interest and are payable on demand |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
(RUPEES) |
(RUPEES) |
|
|
|
|
| 12.3
Workers (Profit) Participation Fund |
|
|
| Opening
Balance |
|
2,133,104 |
1,529,660 |
|
| Allocation
for the year |
|
|
171,633 |
412,234 |
|
| Interest
for the year |
|
|
266,638 |
191,210 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,571,375 |
2,133,104 |
|
|
|
|
========== |
========== |
|
|
| The
fund balance has been utilized by the company for its own |
|
| purpose
and interest @ 2.5% above the bank rate has been credited |
|
| to the fund. |
|
|
|
| 13.
FIXED ASSETS |
|
|
|
|
COST OR REVALUATION |
|
RATE |
|
DEPRECIATION |
|
Written down |
|
As on |
Addition/ |
As on |
|
As on |
For the |
As on |
value as on |
|
1st July 98 |
(deletion) |
30th June 99 |
|
1st-July 98 |
year |
30th June-99 |
30th June-99 |
|
(Rupees) |
(Rupees) |
(Rupees) |
|
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
|
|
| Free hold land |
|
38,551,531 |
(30,962,5000 |
7,589,031 |
-- |
-- |
-- |
-- |
7,589,031 |
| Building
on freehold land |
41,734,118 |
-- |
41,734,118 |
3% |
13,092,614 |
859,245 |
13,951,859 |
27,782,259 |
| Plant
& machinery |
307,244,880 |
1,698,682 |
308,943,562 |
3-15% |
94,972,911 |
6,912,355 |
101,885,266 |
207,058,296 |
| Tools
and equipment |
156,142 |
-- |
156,142 |
10% |
116,967 |
3,918 |
120,885 |
35,257 |
| Electric fittings |
|
199,312 |
-- |
199,312 |
10% |
147,406 |
5,185 |
152,651 |
46,661 |
| Furniture
& Fixtures |
742,305 |
34,326 |
776,631 |
10% |
500,154 |
27,648 |
527,802 |
248,829 |
| Office
equipment |
537,415 |
164,953 |
702,368 |
10% |
212,989 |
48,938 |
261,927 |
440,441 |
| Weight
& measures |
491,782 |
-- |
491,782 |
10% |
360,617 |
13,116 |
373,733 |
118,049 |
| Motor vehicles |
|
20,092,419 |
-- |
2,092,419 |
20% |
1,421,059 |
134,272 |
1,555,331 |
537,088 |
| Fire
fighting equipment |
23,130 |
-- |
23,130 |
10% |
16,584 |
655 |
17,239 |
5,891 |
| Library books |
|
4,159 |
-- |
4,159 |
30% |
3,967 |
58 |
4,025 |
134 |
|
------------------ |
------------------ |
------------------ |
|
------------------ |
------------------ |
------------------ |
------------------ |
| Total 1999 |
|
391,777,193 |
1,897,961 |
362,712,654 |
|
110,845,328 |
8,005,390 |
118,850,718 |
243,861,936 |
|
|
(30,962,500) |
|
|
|
|
========== |
========== |
========== |
|
========== |
========== |
========== |
========== |
| Total 1998 |
|
359,503,064 |
32,274,129 |
391,777,193 |
|
102,790,862 |
8,054,466 |
110,845,718 |
280,931,865 |
|
========== |
========== |
========== |
|
========== |
========== |
========== |
========== |
|
| 13.1
The deletion in freehold land represents the reclassification of a |
|
| particular
land at Kabal River Station from fixed assets to realizable |
|
| assets.
Also refer to note 14 below. |
|
|
| 13.2
Necessary details regarding revaluation are as under:- |
|
|
|
|
|
|
|
Original |
W.D.V. at |
|
|
|
|
Year of |
Cost of |
the time of |
Revalued |
Surplus on |
|
| PARTICULARS |
Revaluation |
Assets |
revaluation |
Amount |
Revaluation |
|
|
|
|
| Mills Land |
|
1999 |
2,227,167 |
2,227,167 |
38,462,500 |
36,235,333 |
|
| Building |
|
1995 |
17,953,472 |
7,601,354 |
31,382,000 |
23,780,646 |
|
| Plant & Machinery |
1995 |
119,135,655 |
45,659,110 |
231,872,000 |
186,212,890 |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Total |
|
|
139,316,294 |
55,487,631 |
301,716,500 |
246,228,869 |
|
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
|
(RUPEES) |
(RUPEES) |
|
| 13.3
Depreciation |
|
|
|
| On
historical cost |
|
|
|
4,394,676 |
4,684,090 |
|
| On
revaluation increment |
|
|
|
3,610,714 |
3,370,376 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
8,005,390 |
8,054,466 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 14.
REALIZABLE ASSETS |
|
|
|
| Opening
Balance |
|
|
2,550,000 |
33,512,500 |
|
| Transferred
from / (to) fixed assets |
|
|
30,962,500 |
(30,962,500) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
33,512,500 |
2,550,000 |
|
|
|
========== |
========== |
|
|
|
|
| The
last year classification of land at Kabal River Station in fixed assets is |
|
| reversed
during the current year. |
|
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
(RUPEES) |
(RUPEES) |
|
| 15.
NON CURRENT ASSETS |
|
|
|
|
| Due
from associated undertaking on account of' |
|
|
| Borrowings |
|
(Note 15.1) |
13,343,680 |
13,606,308 |
|
| Mark up |
|
|
13,785,313 |
11,905,410 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
27,128,993 |
25,511,718 |
|
| Withholding
tax refundable |
|
(Note 15.2) |
24,738,973 |
24,538,627 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
51,867,966 |
50,050,345 |
|
|
|
|
========== |
========== |
|
|
| 15.1
This represents the amount due from the associated undertaking, (Col- |
|
| ony)
Sarhad Textile Mills Limited. The company has reciprocal arrange- |
|
| ments
of lending and borrowing with its associated undertaking at an |
|
| interest
rate of 14% per annum. The whole of these borrowings have |
|
| been
made prior to the amendment made in Section 208 of the Compa- |
|
| nies
Ordinance, 1984. However, Rs. 0.263 million (1998: Rs. 0.122 mil- |
|
| lion)
have been paid during the year by the associated undertaking. The |
|
| maximum
balance due from the associated undertaking during the year |
|
| was
Rs. 27.129 million (1998 Rs. 25.512 million). |
|
|
|
|
|
| Due
to the textile crisis since 1992 (Colony) Sarhad Textile Mills Limited |
|
| is
under restructuring/rescheduling, therefore the status of the above |
|
| arrangements
can be finalized only after the completion of the |
|
| restructuring/rescheduling
arrangements with the financial institutions. |
|
|
| 15.2
This amount represents withholding tax deducted at source from |
|
| assessment
years 1992-93 to 1997-98. Income Tax authorities have |
|
| raised
demand of Rs. 21,512,275 for the said assessment years, |
|
| which
is under appeals and final adjustments are pending to date. (See |
|
| note:
28). Moreover, the tax authorities have set aside the cases for de- |
|
| novo
consideration of the assessing officer and withheld the refunds. |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
(RUPEES) |
(RUPEES) |
|
| 16.
INVENTORIES |
|
|
|
| Stores
and spares |
|
|
(Note 16.1) |
10,079,151 |
9,572,277 |
|
| Stock in trade |
|
|
|
(Note 16.2) |
58,994,524 |
43,967,403 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
69,073,675 |
53,539,680 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
| 16.
1 Stores and spares |
|
|
| Stores |
|
|
|
2,374,247 |
2,140,914 |
|
| Spares |
|
|
7,704,256 |
7,429,859 |
|
| Stores in transit |
|
|
648 |
1,504 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
10,079,151 |
9,572,277 |
|
|
|
|
========== |
========== |
|
|
|
|
| 16.2
Stock in trade |
|
|
|
| Raw Material |
|
|
18,583,130 |
21,663,730 |
|
| Work in process |
|
|
6,172,400 |
4,531,829 |
|
| Finished Goods |
|
|
33,658,000 |
17,112,500 |
|
| Raw
Material in transit |
|
580,994 |
659,344 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
58,994,524 |
43,967,403 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
| 17.
TRADE DEBTORS - Unsecured |
|
|
| Trade
debtors - Considered good |
|
|
2,321,968 |
2,522,404 |
|
| Trade
debtors - Considered bad |
|
|
302,181 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
2,624,149 |
2,522,404 |
|
| Less:
Bad debts written off |
|
|
(302,181) |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
|
2,321,968 |
2,522,404 |
|
|
|
|
========== |
========== |
|
|
|
|
| 18.
ADVANCES, DEPOSITS, PREPAYMENTS AND |
|
| OTHER
RECEIVEABLE |
|
|
| Advances
(considered good) to: |
|
|
| Employees |
|
|
738,145 |
655,817 |
|
| Others |
|
|
307,290 |
417,707 |
|
| Deposits |
|
|
|
7,300,700 |
3,461,242 |
|
| Prepayments |
|
|
|
71,954 |
160,959 |
|
| Sales
tax refundable |
|
|
|
-- |
698,261 |
|
| Due
from associated undertaking |
|
|
(Note 18.1) |
10,633,176 |
8,707,136 |
|
| Other
receivables - (considered good) |
|
|
1,825,053 |
5,293,262 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
20,876,318 |
19,394,384 |
|
|
|
|
| 18.1
The maximum balance due from the associated undertaking during the |
|
| year
was Rs. 10.663 million (1998 Rs. 8.707 million). |
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
|
(RUPEES) |
(RUPEES) |
|
| 19.
CASH AND BANK BALANCES |
|
|
|
|
| Cash in hand |
|
|
|
62,404,241 |
28,654,553 |
|
| Cash at bank |
|
|
|
13,532,048 |
37,542,620 |
|
|
|
|
------------------ |
------------------ |
|
| in
current accounts |
|
|
|
75,936,289 |
66,197,173 |
|
|
|
|
------------------ |
------------------ |
|
| in
deposit accounts |
|
|
|
76,295,365 |
67,676,110 |
|
|
|
|
========== |
========== |
|
|
|
|
| 20. SALES |
|
|
|
|
| Jute Twine |
|
|
|
|
6,152,350 |
1,515,320 |
|
| Gunny bags |
|
|
|
|
125,861,460 |
196,648,999 |
|
| Hessian cloth |
|
|
|
|
23,411,262 |
31,438,700 |
|
| Rice bags |
|
|
|
|
11,700,900 |
10,687,720 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
167,125,972 |
240,290,739 |
|
| Less |
|
|
|
|
| Commission |
|
|
|
-- |
323,155 |
|
| Sales Tax |
|
|
|
21,108,621 |
26,699,002 |
|
| Forwarding
and other expenses |
|
|
3,660,182 |
5,613,891 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
24,768,803 |
32,636,048 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
142,357,169 |
207,654,691 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
|
(RUPEES) |
(RUPEES) |
|
| 21.
COST OF SALES EXCLUDING DEPRECIATION |
|
| Opening
work in process |
|
|
4,531,829 |
6,931,445 |
|
| Raw
material consumed |
|
(Note 21.1) |
68,159,555 |
79,461,175 |
|
| Stores
and spares |
|
|
10,778,778 |
11,417,244 |
|
| Salaries
and wages |
|
|
19,096,569 |
24,790,329 |
|
| Bonus
and welfare |
|
|
2,788,837 |
3,649,534 |
|
| Fuel and power |
|
|
|
10,914,817 |
12,190,511 |
|
| Repair
and maintenance |
|
|
1,869,724 |
1,622,437 |
|
| Insurance |
|
|
|
907,241 |
1,077,730 |
|
| Bad
debts written off |
|
(Note 17) |
302,181 |
-- |
|
| Other costs |
|
|
|
300,000 |
300,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
119,649,531 |
141,440,405 |
|
| Less:
Closing work in process |
|
|
|
(6,172,400) |
(4,531,829) |
|
|
|
|
------------------ |
------------------ |
|
| Cost
of goods manufactured |
|
|
|
113,477,131 |
136,908,576 |
|
|
|
|
|
|
| Adjustment
of finished goods: |
|
|
|
| Opening stock |
|
|
17,112,500 |
19,991,500 |
|
| Closing stock |
|
|
(33,658,000) |
(17,112,500) |
|
|
|
------------------ |
------------------ |
|
|
|
|
(16,545,500) |
2,879,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
96,931,631 |
139,787,576 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 21.1
Raw material consumed |
|
|
|
| Opening stock |
|
|
21,663,730 |
12,600,450 |
|
| Add: Purchases |
|
|
|
65,078,955 |
88,524,455 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
86,742,685 |
101,124,905 |
|
| Less:
Closing stock |
|
|
(18,583,130) |
(21,663,730) |
|
|
|
------------------ |
------------------ |
|
|
|
|
68,159,555 |
79,461,175 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 22.
ADMINISTRATIVE EXPENSES |
|
|
| Salaries
and allowances |
|
|
|
4,222,823 |
3,870,598 |
|
| Directors'
meeting fee |
|
|
|
6,000 |
6,000 |
|
| Travelling |
|
|
|
|
624,679 |
930,781 |
|
| Motor
vehicle running expenses |
|
|
|
948,046 |
998,779 |
|
| Entertainment |
|
|
|
|
315,897 |
432,762 |
|
| Printing
and stationery |
|
|
|
498,477 |
576,451 |
|
| Postage,
telegrams and telephones |
|
|
|
1,144,645 |
1,388,352 |
|
| News
papers & periodicals |
|
|
|
24,677 |
21,928 |
|
| Rent,
rates and taxes |
|
|
|
1,088,263 |
1,136,535 |
|
| Electricity |
|
|
|
|
631,108 |
552,420 |
|
| Fees
& subscription |
|
|
|
146,837 |
136,353 |
|
| Donations |
|
(Note 22.1) |
43,159 |
41,065 |
|
| Professional
charges |
|
|
|
377,461 |
342,420 |
|
| Audit
and professional services |
|
|
(Note 22.2) |
81,700 |
65,140 |
|
| Miscellaneous |
|
|
|
|
639,284 |
517,175 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
10,793,056 |
11,016,759 |
|
|
|
|
========== |
========== |
|
|
|
|
| 22.1
None of the directors or their spouses had any interest in the donees fund |
|
|
|
|
| 22.2
Audit and professional services |
|
|
| Audit fee |
|
|
65,000 |
50,000 |
|
| Out
of pocket expenses |
|
|
16,700 |
15,140 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
81,700 |
65,140 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| 23.
SELLING AND DISTRIBUTION EXPENSES |
|
|
|
| Advertisement |
|
|
|
58,200 |
109,709 |
|
| Loading
/ unloading expenses |
|
|
2,154,647 |
3,832,502 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,212,847 |
3,942,211 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| 24.
FINANCIAL EXPENSES |
|
|
|
| Interest on: |
|
|
|
| Long term loan |
|
|
11,903,755 |
14,220,851 |
|
| Workers
(profit) participation fund |
|
266,638 |
191,210 |
|
| Mark
up on bank borrowings |
|
|
9,255,659 |
4,352,274 |
|
| Excise duty |
|
414,542 |
458,470 |
|
| Bank charges |
|
410,718 |
1,060,254 |
|
| Leasing charges |
|
-- |
6,458 |
|
|
|
------------------ |
------------------ |
|
|
|
22,251,312 |
20,289,517 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 25.
OTHER INCOME |
|
|
|
|
|
| Return
on associated undertaking |
|
|
1,879,903 |
1,900,762 |
|
| Interest
earned on deposits |
|
|
6,444,922 |
6,002,446 |
|
| Miscellaneous
Income |
|
|
444,941 |
7,177 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
8,769,766 |
7,910,385 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
| 26.
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES |
|
|
|
|
|
|
Interest bearing |
|
Non-Interest bearing |
|
|
|
|
Less than |
More than |
Total |
Less than |
More than |
Total |
Total |
|
|
|
one year |
one year |
|
one year |
one year |
|
|
|
(Rupees |
(Rupees |
(Rupees |
(Rupees |
(Rupees |
(Rupees |
(Rupees |
|
| Financial
Assets |
|
| Non-current
assets |
-- |
13,343,680 |
13,343,680 |
-- |
13,785,313 |
13,785,313 |
27,128,993 |
|
| Trade debtors |
|
-- |
-- |
-- |
2,321,968 |
-- |
2,321,968 |
2,321,968 |
|
| Advances |
|
|
|
| deposits |
|
|
|
| prepayments & |
|
|
|
| other
receivables |
-- |
-- |
-- |
20,804,364 |
-- |
20,804,364 |
20,804,364 |
|
| Cash and bank |
|
13,532,048 |
-- |
13,532,048 |
62,763,317 |
-- |
62,763,317 |
76,295,365 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
13,532,048 |
13,343,680 |
26,875,728 |
85,889,648 |
13,785,313 |
99,674,961 |
126,550,689 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Effective
interest rate |
13% |
14% |
13% |
-- |
-- |
-- |
13% |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| Financial
Liabilities |
|
| Disputed & |
|
| contingent
liabilities |
-- |
-- |
-- |
-- |
119,916,511 |
119,916,511 |
119,916,511 |
|
| Redeemable
capital |
-- |
-- |
-- |
-- |
2,591,060 |
2,591,060 |
2,591,060 |
|
| Long term loans |
|
12,000,000 |
-- |
12,000,000 |
-- |
-- |
-- |
12,000,000 |
|
| Short term borrowings |
16,395,609 |
-- |
16,395,609 |
-- |
-- |
-- |
16,395,609 |
|
| Creditors,
accrued |
|
|
| &
other liabilities |
-- |
2,571,375 |
2,571,375 |
45,492,954 |
-- |
45,492,954 |
48,064,329 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
28,395,609 |
2,571,375 |
30,966,984 |
45,492,954 |
122,507,571 |
168,000,525 |
198,967,509 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Effective
interest rate |
17% |
12.5% |
16.6% |
-- |
-- |
-- |
16.6% |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Gap |
|
(14,863,561) |
10,772,305 |
(4,091,257) |
40,396,695 |
(108,722,258) |
(68,325,563) |
(72,416,820) |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
|
|
|
|
| 26.1
Fair value of the financial assets and liabilities |
|
| The
carrying values of the financial assets and liabilities reflected in |
|
| the
financial statements approximates there fair value except disputed |
|
| and
contingent liabilities, redeemable capital and long term loans |
|
| which
are disputed and the fair value of which is dependent on the |
|
| final
decision of the court. Refer notes 6,, 7 and 8 to the accounts. |
|
|
| 26.2
Credit Risk |
|
| Credit
risk represents the accounting loss that would be recognized |
|
| at
the reporting date if the counter part failed completely to perform |
|
| as
contracted. The following assets of the company are exposed to |
|
| credit risks: |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
(RUPEES) |
(RUPEES) |
|
|
|
|
| Trade debtors |
|
|
|
2,321,968 |
2,522,404 |
|
| Non
current assets |
|
|
|
51,867,966 |
50,050,345 |
|
| Other
receivables (joint office expenses |
|
|
10,663,176 |
8,707,136 |
|
|
|
|
------------------ |
------------------ |
|
| due
from associated undertaking) |
|
|
|
64,853,110 |
61,279,885 |
|
|
|
|
========== |
========== |
|
|
| Due
from associated company is exposed to credit risk because of |
|
| the
reasons explained in note 15. l of the financial statements. The |
|
| company
controls its credit risk by ascertainment of the credit |
|
| worthiness
of customers and monitoring of debts through |
|
| continuous
follows up. |
|
|
| 27.
REMUNERATION AND BENEFITS OF DIRECTORS, |
|
| MANAGING
DIRECTOR AND EXECUTIVES |
|
|
|
|
1999 |
|
1998 |
|
|
|
Directors |
Managing |
Executives |
Directors |
Managing |
Executives |
|
|
|
Director |
|
|
Director |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| Fee |
|
6,000 |
-- |
-- |
6,000 |
-- |
-- |
|
| Remuneration |
|
240,000 |
960,800 |
360,000 |
142,758 |
479,160 |
360,000 |
|
| Allowances / |
|
-- |
-- |
-- |
-- |
-- |
-- |
|
| Reimbursement |
|
108,000 |
634,723 |
-- |
64,242 |
362,388 |
-- |
|
| Provident Fund |
|
-- |
-- |
21,600 |
-- |
-- |
21,600 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Rupees |
|
354,000 |
1,595,523 |
381,600 |
213,000 |
841,548 |
381,600 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Number |
|
1 |
1 |
1 |
1 |
1 |
1 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| The
Managing Director was provided with a company maintained car and |
|
| telephone
facility at his residence. |
|
|
| 28.
TRANSACTIONS WITH AN ASSOCIATED UNDERTAKING |
|
| Aggregate
transactions with an associated undertaking during the year were as |
|
| follows: |
|
|
|
|
1999 |
1998 |
|
|
|
(RUPEES) |
(RUPEES) |
|
|
|
|
| Purchases |
|
|
137,586 |
134,583 |
|
| Sales |
|
|
50,000 |
19,350 |
|
| Return
on lending |
|
|
1,879,903 |
1,900,762 |
|
|
| Purchases
have been made from (Colony) Sarhad Textile Mills Limited at |
|
| average
cost to them and sees at normal selling prices. |
|
|
| 29. TAXATION |
|
| The
Income Tax assessments of the company were made upto and including |
|
| the
assessment year 1997-98 and total demand raised by department was |
|
| Rs.
21.512 million. The assessments have been set aside for all years by the |
|
| commissioner
of Income Tax Appeals for reconsideration/reassessments. |
|
| The
final tax liability of company is contingent on the reassessment of all |
|
| the
years pending in tax department. The management is hopeful that the |
|
| decision
at all forums will be in 'their favour. The total withholding tax paid |
|
| by
the company is Rs. 24.738 million and tax liability including the previ- |
|
| ous
demands raised by the Income Tax Authorities and for the Assessment |
|
| years
1998-99 and 1999-2000 of Rs. 1.750 million becomes Rs. 23.262 mil- |
|
| lion
which is still below the withholding tax deductions of the company. In |
|
| the
opinion of the management, the provision for taxation is adequate to |
|
| meet
the tax liability of the company. |
|
|
|
|
| The
deferred tax liability arising due to the |
|
| accelerate
tax depreciation allowance is insign- |
|
| ificant
and accordingly no provision for deferred |
|
| taxation
have been made in these accounts |
|
|
| 30.
CONTINGENCIES & COMMITMENTS |
|
|
| 30.1
Certain banks have issued guarantees on behalf of the company in |
|
| the
ordinary course of business. |
|
|
| 30.2
The National Bank of Pakistan has filed a suit for Rs. 49.48 million |
|
| for
the recovery of its all outstanding claims namely short term |
|
| finance,
bills of exchange and force liability relating to cotton letter |
|
| of
credit. The suit also includes claim for mark up @ Rs. 0.54 per |
|
| Rs.
1,000 per day on cash finance, Rs. 0.60 per Rs. 1,000 per day |
|
| on
the bills of exchange and Rs. 0.55 per Rs. 1,000 per day on |
|
| demand
finance and the litigation expenses with effect from May |
|
| 01,
1998 till the date of decree and recovery of the decretal |
|
| amount.
The company has approached the bank without prejudice |
|
| to
its rights and the pending litigation, through a letter dated |
|
| November
11, 1998 for settlement in pursuance of State Bank of |
|
| Pakistan
incentive scheme, circulars and directives of June 05, |
|
| 1998
as modified in November 1998. As the outcome of the case is |
|
| not
precisely, determinable at this stage. |
|
|
| 30.3
The company is defendant in a lawsuit filed by Habib Bank Limited |
|
| for
the recovery of long term loan. The ultimate outcome of the |
|
| matter
can not be precisely determined. |
|
|
|
1999 |
1998 |
|
|
| 31.
PRODUCTION DATA |
|
| Capacity
(in kgs)on 360 days basis |
|
6,000,000 |
6,000,000 |
|
|
|
|
------------------ |
------------------ |
|
| Production
achieved (KG) |
|
| Sacking cloth |
|
|
3,285,360 |
4,652,010 |
|
| Hessian cloth |
|
|
568,490 |
650,457 |
|
| Twine |
|
|
365,863 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
4,219,713 |
5,302,467 |
|
|
========== |
========== |
|
|
| 31.1
It may be noted that determination of production capacity of a Jute |
|
| Mill
varies widely with the pattern of production and number of |
|
| shifts
worked. Higher production was achievable but suffered due |
|
| to
non-availability of working capital which was withdrawn |
|
| arbitrarily
by National Bank of Pakistan, the case is under litigation |
|
| and
out of court settlement is under progress without prejudice to |
|
| our rights. |
|
|
| 32. GENERAL |
|
| Figures
have been rounded off to the nearest rupee. |
|
|
| Figures
of the previous year have been re-arranged, wherever necessary, |
|
| for
the purposes of comparison. |
|
|
|
Mian Farooq Ahmad Shaikh |
|
Sohail Farooq Shaikh |
|
|
CHAIRMAN |
|
MANAGING DIRECTOR/CHIEF EXECUTIVE |
|
|
|
|
|
| PATTERN
OF SHARE HOLDINGS |
|
| AS
AT 30TH JUNE 1999 |
|
|
| No. of |
|
share held |
|
|
Total |
|
|
| shareholders |
|
|
|
|
share held |
|
|
|
| 441 |
From |
1 |
to |
100 |
Shares |
44,100 |
|
| 132 |
From |
101 |
to |
500 |
Shares |
44,800 |
|
| 94 |
From |
501 |
to |
1,000 |
Shares |
80,602 |
|
| 79 |
From |
1,001 |
to |
5,000 |
Shares |
169,300 |
|
| 15 |
From |
5,001 |
to |
10,000 |
Shares |
99,200 |
|
| 1 |
From |
10,001 |
to |
15,000 |
Shares |
11,500 |
|
| 3 |
From |
15,001 |
to |
20,000 |
Shares |
52,700 |
|
| 2 |
From |
25,001 |
to |
30,000 |
Shares |
54,300 |
|
| 1 |
From |
70,001 |
to |
75,000 |
Shares |
74,300 |
|
| 1 |
From |
80,001 |
to |
85,000 |
Shares |
84,198 |
|
| 4 |
From |
305,001 |
to |
310,000 |
Shares |
1,240,000 |
|
| 1 |
From |
495,001 |
to |
500,000 |
Shares |
500,000 |
|
| 1 |
From |
1,285,001 |
to |
1,290,000 |
Shares |
1,290,000 |
|
| ------------------ |
|
------------------ |
|
| 775 |
|
|
3,745,000 |
|
| ========== |
|
|
========== |
|
|
| Categories
of shareholder |
|
Number |
Shares held |
Percentage |
|
|
| Individuals |
|
767 |
3,198,900 |
85.42 |
|
| Investment
Companies |
|
2 |
5,400 |
0.14 |
|
| Insurance
Companies |
|
1 |
200 |
0.01 |
|
| Joint
Stock Companies |
|
2 |
502,000 |
13.41 |
|
| Financial
Institutions |
|
1 |
9,000 |
0.24 |
|
| Surriya
Farooq Charitable |
|
|
| Foundation |
|
1 |
20,000 |
0.53 |
|
| Punjab
Cooperative Board for |
|
|
| Liquidation |
|
1 |
9,500 |
0.25 |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
775 |
3,745,000 |
100 |
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
