| Thai Jute Mills Limited |
|
|
|
|
|
|
|
|
|
|
| Annual Report 1999 |
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| CONTENTS |
|
| Board of Directors |
|
|
| Notice
of Annual General Meeting |
|
| Directors' Report |
|
|
| Auditors' Report |
|
|
| Balance Sheet |
|
|
| Profit & Loss Account |
|
|
| Statement of Changes in
Financial Position |
|
| Notes to the Accounts |
|
|
|
| Pattern of Shareholdings |
|
|
|
|
|
| BOARD OF DIRECTORS |
|
| Rafiq M. Habib |
|
Chairman |
|
| Ali S. Habib |
|
| Mohamedali R. Habib |
|
| Mazhar Valjee |
|
Chief Executive |
|
| S. A. Q. Haqqani |
|
| Sohail P. Ahmed |
|
| Muhammad Jamil Hussain |
|
|
| AUDITORS |
|
| Hyder Bhimji & Co. |
|
| Chartered Accountants |
|
|
| REGISTERED
OFFICE |
|
| 4th Floor, Siddiqsons Tower, |
|
| 3-Jinnah
Cooperative Housing Society, |
|
| Sharea Faisal, Karachi. |
|
|
| MILLS: |
|
| Jute Operation: |
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| UNIT- 1 |
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| D. G. Khan Road, |
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| Muzaffargarh. |
|
|
| Auto Airconditioners Plant: |
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| UNIT - 2 |
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| Korangi, Karachi. |
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|
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| NOTICE OF MEETING |
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|
|
| NOTICE
is hereby given that the thirty-third Annual General Meeting of the
Shareholders of the |
|
| Company
will be held at Raffia Choudri Memorial Centre, Ground Floor, Sidco Avenue
Centre, 264 R.A. |
|
| Lines,
Karachi on Thursday, December 02, 1999 at 9:30 A.M. to transact the following
business: - |
|
|
| 1.
To receive and adopt the Audited Accounts for the year ended June 30, 1999
together with the |
|
| Reports
of the Directors and Auditors. |
|
|
| 2.
To approve cash dividend @ 50% i.e. Rs. 2.50 per share for the financial year
ended June 30, |
|
| 1999
as recommended by the Board of Directors. |
|
|
| 3.
To appoint Auditors for the year 1999-2000 and fix their remuneration. |
|
|
| By Order of the Board, |
|
|
(ALl ASGHAR MOTEN) |
|
| Karachi: November 02, 1999. |
|
Secretary |
|
|
| NOTES: |
|
| i)
The Share Transfer Books of the Company will remain closed from Thursday,
November 25, |
|
| 1999
to Thursday, December 02, 1999 (both days inclusive). Shares may be lodged
for transfer |
|
| with
our Registrar M/s. Noble Computer Services (Pvt.) Limited, 2nd Floor,
AI-Manzoor Building, |
|
| I.
I. Chundrigar Road, Karachi. The Shareholders are advised to notify the
Registrar of any |
|
| change in their addresses. |
|
|
| ii)
A member entitled to attend and vote at this meeting may appoint another
member as his/her |
|
| proxy to attend and vote for him/her.
Proxies in order to be effective must be received at the |
|
| Registered Office of the Company not less
than 48 hours before the time of holding the |
|
| meeting. A proxy must be a member of the
Company. |
|
|
| iii)
CDC shareholders desiring to attend the meeting are requested to bring their
original National |
|
| Identity Card, Account and Participant's ID
numbers, for identification purpose and in case of |
|
| proxy, to enclose an attested copy of
his/her National Identity Card. |
|
|
|
| THIRTY-THIRD
REPORT OF THE DIRECTORS |
|
| FOR
THE YEAR ENDED JUNE 30, 1999. |
|
|
| The Shareholders, |
|
|
| The
Directors are pleased to place before you the annual report of the operations
of the company (jute and engineering |
|
| divisions),
with the audited accounts for the year ended June 30, 1999. The consolidated
financial results are |
|
| 'Alhamdolillah'
comparable to that of last year as follows · - |
|
|
|
1998-99 |
1997-98 |
|
|
|
Rs. 000's |
Rs. 000's |
|
|
| Sales
Revenue |
|
1,058,215 |
999,916 |
|
| Gross Profit |
|
178,243 |
145,952 |
|
|
| Net profit before taxation |
|
126,339 |
108,418 |
|
| Provision for taxation |
|
43,246 |
35,645 |
|
|
|
------------------- |
------------------- |
|
| Net profit after taxation |
|
83,093 |
72,773 |
|
| Unappropriated
profit brought forward |
|
2,351 |
2,686 |
|
|
------------------- |
------------------- |
|
|
85,444 |
75,459 |
|
|
| Appropriations : |
|
| Interim
Dividend -- Nil (1998: 20%) |
|
-- |
13,913 |
|
|
| Final
Dividend -- proposed @ 50% (1998: 15%) |
|
34,783 |
10,435 |
|
| Transfer to General Reserve |
|
50,000 |
48,760 |
|
| Unappropriated
profit carried forward |
|
------------------- |
------------------- |
|
|
661 |
2,351 |
|
|
============ |
============ |
|
|
| The
earnings per share after tax was Rs. 5.97 against Rs. 5.23 of last year. |
|
|
| The
sales turnover of the company was Rs. 1,058.215 million during the year under
review as against Rs. 999.916 |
|
| million
last year's showing an increase of Rs. 58.299 million or 6%. The gross profit
improved from Rs. 145.952 |
|
| million
to Rs. 178.243 million during the year, that is Rs. 32.291 million or 22%
attributed mainly to enhanced sales |
|
|
| volume,
favorable sales prices and cost savings in manufacturing overheads. The NPBT
for the year under review |
|
| was
Rs. 126.339 million as opposed to Rs. 108.418 million in the previous
financial year thus showing an increase of |
|
| Rs. 17.921 million or 16%. |
|
|
| JUTE OPERATIONS:· |
|
| Sales Turnover: |
|
| The
sales turnover for the year under review dropped to Rs. 577.214 million from
Rs. 689.941 million of the previous year |
|
| due
to "normalized" demand for sacking bags from the Government. The
industry had experienced an unusual increase |
|
| in
demand for sacking from Director General Food, Ministry of Food and
Agriculture last year on account of higher |
|
| imports
of wheat. The fall in demand would have been sharper had the unexpected
demand for sacking from Private |
|
| Sector
importers of wheat not come up during the year. The Rs. 112.727 million i.e.
16% decrease in sales turnover |
|
| contributed
to a reduction in gross profits of the division. |
|
|
| Production: |
|
| The
production for the year under review was 16,906 tons as opposed to last
year's 18,263 tons, a decrease of 1,357 |
|
| tons
or 7%. The management of the company took a timely decision, in February 1999
to curtail output to adjust to the |
|
| reduced
demand by working the jute mill two shifts instead of three. |
|
| The
exercise of renovation and refurbishment of mill machinery is expected to
reach completion by middle of year 2000. |
|
|
| Cost of Manufacture : |
|
| Cost
of manufacture remained in check by virtue of improved efficiencies and
better productivity brought about by |
|
| renovation
of machinery and improved working conditions and HR activities. The cost of
raw jute registered a marginal |
|
| increase
contrary to the earlier expectations of a dramatic one, since the increase of
raw jute prices in the international |
|
| market
did not escalate to levels predicted earlier. The wage cost came down to Rs.
140.500 million this year from |
|
| Rs.
169.370 million of last year. The costs on account of stores & spares,
repairs & maintenance and fuel & power |
|
| reduced
from Rs. 96.783 million to Rs. 89.597 million resulting in savings of Rs.
7.186 million or 7% lower over last year. |
|
|
| Administration
& Selling Expenses: |
|
| The
costs of administration and selling have remained in control except for the
cost incurred in shifting of the registered |
|
| office
from AI-Manzoor Building, I. I. Chundrigar Road to Siddiqsons Tower, Sharea
Faisal, Karachi. |
|
|
| ENGINEERING OPERATIONS: |
|
| Sales Turnover: |
|
| It
is heartening to report that the sales turnover increased from Rs. 309.975
million to Rs. 481.001 million that is an |
|
| increase
of Rs. 171.026 million or 55% over the last financial year corresponding to
the increase in sales volume of 54% |
|
| from
10,807 units to 16,659 units last year. The increase in the sales volume was
due to improved demand for auto cars |
|
| in the country. |
|
|
| Cost of Manufacture: |
|
| The
cost of manufacturing overheads went up from Rs. 36.960 million last year to
Rs. 46.303 million during the current |
|
| financial
year due to enhanced sales volume but the per unit cost registered a decline
due to reduction in government |
|
| levies
and higher localization, which led to improvement of gross margins. |
|
|
| Administration
& Selling Expenses: |
|
| The
administration and selling expenses showed an increase from Rs. 10.356
million to Rs. 15.066 million to cater for |
|
| expanded
sales volume as well as brand positioning. During the year under review Thai
Engineering established Denso |
|
| Aircon
Center at Sharea Faisal to meet consumer needs of sales, service & parts.
A beginning has been made and we |
|
| hope
to make our presence felt progressively in the after market. |
|
|
| ISO 9000: |
|
| The
Engineering Division received ISO 9002 certification from AIB-Vincotte
International Ltd., UAE in March 1999. |
|
|
| FINANCIAL EXPENSES: |
|
| During
the year under review the financial expenses of the company doubled over last
year from Rs. 8.111 million to |
|
| Rs.
16.528 million due to higher borrowings on account of · |
|
|
| ·
Delayed off-take of Jute goods compared to the last year that kept finances
tied up in higher stocks of finished goods. |
|
| ·
Higher sales receivables on account of enhanced credits extended to the
private trade to induce higher sales of |
|
| sacking. |
|
| ·
Imposition of margins on Letters of Credit by State Bank resulting in
blockade of funds against imports made by both |
|
| divisions. |
|
|
| OTHER INCOME : |
|
| Other
income was on account of the following · |
|
|
| ·
Renting out part of unit 2 and all of unit 3 to generate rental income. |
|
| ·
Placing liquid funds available in the early part of the year in short-term
deposits. |
|
| ·
Receipt of dividend on investment in stocks. |
|
|
| FUTURE
PLANS & PROSPECTS: |
|
| Jute Division : |
|
|
| The
major brunt of the slow down in sales and increase in costs forecasted by
your management, in the last annual report |
|
| is
now taking place in the current year. The following reasons are attributed to
the expected downturn : |
|
|
| 1.
The Government's ban on import of wheat by the private sector continues to
remain in force. |
|
|
| 2.
Sales tax payable by non-registered buyers has been increased to 18% as
opposed to 15% for registered buyers. |
|
| Jute
goods attracted only 12.5% Sales tax for all categories of buyers till
December of 1998. |
|
|
| 3.
Rice exports have slowed down resulting in reduced demand from that sector. |
|
|
| 4.
Prices of raw jute have in the last few months registered a sharp increase in
the international market. |
|
|
| 5.
Government will not start lifting of sacking before late October this year
whereas in 1997-98 the deliveries |
|
| commenced
in mid July and in 1998-99 Director General Food had started accepting goods
in late August. |
|
|
| Engineering Division : |
|
| The
auto sector has begun the current year well, but with the possibility of
Trade Related Investment Measures (TRIM) |
|
| being
implemented from January 1, 2000 under General Agreement on Tariff &
Trade (GATT), the fate of the auto parts |
|
| manufacturers
is unclear. The policies of the new Government have also not yet been
enunciated and add to the |
|
| uncertainty. |
|
|
| The
Division however is committed to achieving 52% local content by June 2000
mandated by the Government and will |
|
| be
investing in hi-tech facilities for manufacture of condensers and
evaporators, to achieve the target. |
|
|
| Your
management has in the meantime finalized a Technical Assistance Agreement
with Furukawa Electric Company of |
|
| Japan
for manufacture of Wiring Harnesses, and plan to begin mass production of
Wiring Harnesses for Daihatsu Cuore |
|
| in February 2000. |
|
|
| DIRECTORS: |
|
| The
newly elected Board of Directors took over office with the start of the term
beginning January 31, 1999. The Board |
|
| welcomes
Mr. S. A. Q. Haqqani and Mr. Muhammad Jamil Hussain the new Directors on the
Board and looks forward to |
|
| benefit
from their long and rich experiences. |
|
|
| The
Board of Directors place on record its appreciation and gratitude for the
contributions made by Mr. Nasim Beg and |
|
| Mr.
Behram Hasan retiring Directors during their tenure on the Board. |
|
|
| Y2K COMPLIANCE : |
|
| The
Company migrated last year to a PC based Y2K compliant software from the
non-compliant BPCS software being |
|
| run
on IBM AS 400 mainframe. This was a temporary migration and plans to migrate
in the current fiscal year to a PC |
|
| based
Y2K compliant Oracle accounting software system have been firmed. |
|
|
| AUDITORS : |
|
| The
present auditors of the Company Messers Hyder Bhimji and Co., Chartered
Accountants retire and being eligible |
|
| offer
their services for re-appointment. |
|
|
| PATTERN
OF SHAREHOLDINGS: |
|
| The
pattern of shareholdings as at June 30, 1999 is attached to this report. |
|
|
| APPRECIATION: |
|
| The
Board places on record its appreciation of the fruitful and productive
efforts put in by the workers, staff and |
|
| executives
of the Company that produced these favorable results in face of unfavorable
economic conditions |
|
|
|
On behalf of the Board |
|
|
MAZHAR VALJEE |
|
| Karachi, November 02, 1999. |
|
Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We have audited the annexed Balance Sheet
of THAL JUTE MILLS LIMITED, as at June 30, 1999 and |
|
| the
related Profit and Loss Account for the year then ended and the Statement of
Changes in Financial |
|
| Position
(Cash Flow Statement) together with the notes forming part thereof, for the
year then ended and we |
|
| state
that we have obtained all the information and explanations which to the best
of our knowledge and |
|
| belief
were necessary for the purpose 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; |
|
|
| b) in our opinion; |
|
|
| i)
the Balance Sheet and Profit and Loss Account together with the notes thereon
have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984 and are in agreement with
the |
|
| books
of account and are further in accordance with accounting policies
consistently applied; |
|
|
| ii)
the expenditure incurred during the year was for the purpose of Company's
business; and |
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the year |
|
| were
in accordance with the objects of the Company; |
|
|
| c)
in our opinion, and to the best of our information and according to the
explanations given to us, the |
|
| Balance Sheet, Profit and Loss Account and
the Statement of Changes in Financial Position (Cash |
|
| Flow Statement) together with the notes
forming part thereof, give the information required by the |
|
| Companies Ordinance, 1984 in the manner so
required and respectively give a true and fair view of |
|
| the state of the Company's affairs as at
June 30, 1999 and of the profit and the Changes in |
|
| Financial Position (Cash Flows) for the
year then ended; and |
|
|
| d)
in our opinion, Zakat deductible at source, under Zakat and Ushr Ordinance,
1980 was deducted |
|
| by
the Company and deposited into the Central Zakat Fund established under
section 7 of that |
|
| Ordinance. |
|
|
HYDER BHIMJI & CO. |
|
| Karachi: November 02, 1999. |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
Note |
1999 |
1998 |
|
|
No. |
Rs. 000's |
Rs. 000's |
|
|
| SHARE CAPITAL : |
|
|
| Authorised · |
|
| 20,000,000
Ordinary Shares of Rs. 5/-each |
|
100,000 |
100,000 |
|
|
=========== |
=========== |
|
|
| Issued, Subscribed and
Paid-up |
|
3 |
69,566 |
69,566 |
|
| Reserves |
|
4 |
180,000 |
130,000 |
|
| Unappropriated
Profit |
|
|
661 |
2,351 |
|
|
|
-------------------- |
-------------------- |
|
|
|
250,227 |
201,917 |
|
| DEFERRED LIABILITIES |
|
5 |
21,739 |
23,398 |
|
|
| CURRENT LlABILITIES: |
|
|
| Short Term Borrowings |
|
6 |
15,726 |
17,561 |
|
| Creditors,
Accrued and Other Liabilities |
|
7 |
181,771 |
215,596 |
|
| Taxation |
|
44,512 |
38,096 |
|
| Proposed Dividend |
|
34,783 |
10,435 |
|
|
-------------------- |
-------------------- |
|
|
276,792 |
281,688 |
|
| CONTINGENCIES
& COMMITMENTS |
|
8 |
|
|
-------------------- |
-------------------- |
|
|
|
|
548,758 |
507,003 |
|
|
=========== |
=========== |
|
|
| TANGIBLE FIXED ASSETS: |
|
|
| Operating Assets |
|
9 |
90,459 |
103,403 |
|
| Capital Work-in-Progress |
|
10 |
-- |
82 |
|
|
-------------------- |
-------------------- |
|
|
90,459 |
103,485 |
|
| LONG TERM INVESTMENTS |
|
11 |
23,854 |
23,854 |
|
| LONG
TERM LOANS, ADVANCES |
|
| AND
DEPOSITS |
|
12 |
990 |
1,675 |
|
|
| CURRENT ASSETS : |
|
| Stores, Spares and Loose
Tools |
|
13 |
29,423 |
31,334 |
|
| Stock-in-Trade |
|
14 |
182,655 |
130,561 |
|
| Trade Debts |
|
15 |
103,583 |
71,385 |
|
| Short Term Investments |
|
16 |
72,400 |
85,438 |
|
| Advances,
Deposits, Prepayments |
|
|
|
| and Other Receivables |
|
17 |
33,657 |
36,192 |
|
| Cash and Bank Balances |
|
18 |
11,737 |
23,079 |
|
|
-------------------- |
-------------------- |
|
|
433,455 |
377,989 |
|
|
-------------------- |
-------------------- |
|
|
548,758 |
377,989 |
|
|
=========== |
=========== |
|
| Note: The annexed notes form an integral part of
these financial statements. |
|
|
| Karachi: November 02, 1999. |
|
Mazhar Valjee |
|
Sohail P. Ahmed |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
Note |
1999 |
1998 |
|
|
No. |
Rs. 000's |
Rs. 000's |
|
|
| Sales |
|
19 |
1,058,215 |
999,916 |
|
| Cost
of Sales |
|
20 |
879,972 |
853,964 |
|
|
|
--------------------- |
--------------------- |
|
| GROSS
PROFIT |
|
178,243 |
145,952 |
|
| Administrative Expenses |
|
21 |
34,649 |
29,800 |
|
| Selling Expenses |
|
22 |
9,459 |
7,045 |
|
|
--------------------- |
--------------------- |
|
|
44,108 |
36,845 |
|
|
--------------------- |
--------------------- |
|
| OPERATING PROFIT |
|
134,135 |
109,107 |
|
| Other
Income |
|
23 |
(18,232) |
(14,678) |
|
| Financial Expenses |
|
24 |
16,528 |
8,111 |
|
| Other Charges |
|
25 |
9,500 |
7,256 |
|
|
--------------------- |
--------------------- |
|
|
7,796 |
689 |
|
|
--------------------- |
--------------------- |
|
| PROFIT BEFORE TAXATION |
|
126,339 |
108,418 |
|
| Provision for Taxation |
|
| Current |
|
42,703 |
35,776 |
|
| Prior year |
|
1,978 |
-- |
|
| Deferred |
|
(1,435) |
(131) |
|
|
--------------------- |
--------------------- |
|
|
43,246 |
35,645 |
|
|
--------------------- |
--------------------- |
|
| PROFIT AFTER TAXATION |
|
83,093 |
72,773 |
|
| Unappropriated
Profit Brought Forward |
|
2,351 |
2,686 |
|
|
--------------------- |
--------------------- |
|
|
85,444 |
75,459 |
|
| Appropriations: |
|
| Interim Dividend Nil (1998:
20%) |
|
-- |
13,913 |
|
| Final
Dividend @ 50% (1998: 15%) |
|
34,783 |
10,435 |
|
| Transfer to General Reserve |
|
50,000 |
48,760 |
|
|
--------------------- |
--------------------- |
|
|
84,783 |
73,108 |
|
|
--------------------- |
--------------------- |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
|
661 |
2,351 |
|
|
=========== |
=========== |
|
| Note:
The annexed notes form an integral part of these financial statements. |
|
|
|
Mazhar Valjee |
|
Sohail P. Ahmed |
|
| Karachi: November 02, 1999. |
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION (CASH FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
1999 |
1998 |
|
|
Rs. 000's |
Rs. 000's |
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES : |
|
| Profit before Taxation |
|
126,339 |
108,418 |
|
| Adjustments for : |
|
| Depreciation |
|
16,024 |
15,735 |
|
| Financial
Charges |
|
16,528 |
8,111 |
|
| Gratuity |
|
1,331 |
4,676 |
|
| Profit on Sale of Fixed
Assets |
|
(353) |
(3,145) |
|
|
--------------------- |
--------------------- |
|
|
33,530 |
25,377 |
|
|
--------------------- |
--------------------- |
|
| Operating Profit
before Working Capital changes |
|
159,869 |
133,795 |
|
| Changes in Working Capital : |
|
| (Increase)/Decrease
in Current Assets : |
|
| Stores, Spares and Loose
Tools |
|
1,911 |
4,439 |
|
| Stock-in-Trade |
|
(52,094) |
57,993 |
|
| Trade
Debts (Unsecured Considered Good) |
|
(32,198) |
(13,997) |
|
| Short Term Investments |
|
13,038 |
(85,438) |
|
| Advances,
Deposits, Prepayments and Other Receivables |
|
2,556 |
(3,220) |
|
| Increase/(Decrease)
in Current Liabilities:· |
|
|
|
| Creditors,
Accrued and Other Liabilities |
|
(38,472) |
80,709 |
|
|
--------------------- |
--------------------- |
|
|
(105,259) |
40,486 |
|
|
--------------------- |
--------------------- |
|
| Cash generated from
operations |
|
54,610 |
174,281 |
|
| Financial Charges paid |
|
(11,881 ) |
(14,004) |
|
| Dividend paid |
|
(10,435) |
(13,517) |
|
| Gratuity paid |
|
(1,555) |
(1,313) |
|
| Income
tax paid |
|
(38,265) |
(2,591) |
|
|
--------------------- |
--------------------- |
|
|
(62,136) |
(31,425) |
|
|
--------------------- |
--------------------- |
|
| Net cash (used
in) / from operating activities (A) |
|
(7,526) |
142,856 |
|
|
--------------------- |
--------------------- |
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Fixed Capital Expenditure |
|
(7,346) |
(10,465) |
|
| Long
Term Loans, Advances and Deposits |
|
664 |
116 |
|
| Proceed from disposal of Assets |
|
4,701 |
8,551 |
|
|
--------------------- |
--------------------- |
|
| Net
cash used in investing activities (B) |
|
(1,981) |
(1,798) |
|
|
--------------------- |
--------------------- |
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
| Decrease in Short Term Finance |
|
(1,835) |
(119,261) |
|
|
--------------------- |
--------------------- |
|
| Net Cash used in financing
activities (c) |
|
(1,835) |
(119,261) |
|
|
--------------------- |
--------------------- |
|
| (DECREASE) / INCREASE IN CASH
(A+B+C) |
|
(11,342) |
21,797 |
|
|
| CASH
AND BANK BALANCE AT THE |
|
| BEGINNING
OF THE YEAR |
|
23,079 |
1,282 |
|
|
|
--------------------- |
--------------------- |
|
| CASH
AND BANK BALANCE AT THE |
|
| END
OF THE YEAR |
|
11,737 |
23,079 |
|
|
=========== |
=========== |
|
|
|
|
|
| NOTES
TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
