| The National Silk & Rayon 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 |
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| Auditors' Report |
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| Balance Sheet |
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| Profit
& Loss Account |
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| Statement
of Changes in Financial Position |
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| Notes
to the statement of Changes in Financial Position |
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| Notes
to the Account |
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| Pattern
of Share Holding |
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| BOARD
OF DIRECTORS |
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|
| DIRECTOR |
|
| Sh.
Tauheed Ellahi Puri |
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| Sh.
Faisal Tauheed Puri |
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| Sh.
Kashif Tauheed Puri |
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| Mst.
Shahida Tauheed |
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| Mst.
Amna Tauheed |
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| Mst.
Saima Shahid |
|
| Mst. Samira Faisal |
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|
| CHIEF
EXECUTIVE |
|
| Sh.
Tauheed Ellahi Puri |
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| SECRETARY |
|
| Mohammad
Islam Haider |
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| AUDITORS |
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| Amin
Mudassar & Co. |
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| Chartered
Accountants |
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| 4th
Floor, I.E.P. Building, |
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| 97-B/D-I,
Gulberg-III, |
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| Lahore. |
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|
| FACTORY |
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| The
National Silk & Rayon Mills Limited. |
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| Jaranwala
Road, P.O. Box No. 18, Faisalabad. |
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| REGISTERED
OFFICE |
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| 4th
Floor, I.E.P. Building, |
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| 97/B/D-I,
Gulberg-III, |
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| Lahore. |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the 49th Annual General Meeting of the shareholders of |
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| the
National Silk and Rayon Mills Limited, Faisalabad will be held at Faletti's
Hotel |
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| Agerton
Road, Lahore on Friday, the 31st December, 1999 at 11.30 A.M. for the |
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| following
purposes: |
|
|
| 1.
To confirm the minutes of the 48th Annual General Meeting held on |
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| 30th
December, 1998. |
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|
| 2.
To receive and adopt the Directors' Report and the Audited Accounts |
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| for
the year ended 30th June, 1999. |
|
|
| 3.
To approve cash dividend @ 10% as recommended by the directors. |
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| 4.
To appoint Auditors and to fix their remuneration. The retiring |
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| auditors
M/s. Amin Mudassar & Co., Chartered Accountants have |
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| offered
themselves for reappointment. |
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| 5.
To transact any other ordinary business of the company that may be |
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| brought
forward with the permission of the Chair. |
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|
By Order of the Board |
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|
(MUHAMMAD ISLAM HAIDER) |
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|
SECRETARY |
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| Notes: |
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| 1.
The share transfer books of the company will remain closed from 23rd |
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| December
1999 to 31st December 1999 (both days inclusive). |
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| 2.
Any member of the Company entitled to attend and vote at this Annual |
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| General
Meeting may appoint another member as his/her proxy to attend |
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| and
vote instead of him/her. Proxies in order to be effective must be received |
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| by
the Company not less than 48 hours before the meeting. |
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| 3.
Shareholders are requested to immediately notify the change in address, if
any. |
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| DIRECTOR'S
REPORT TO THE SHARE HOLDERS |
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| Your
directors take pleasure in presenting their Annual Report along with audited |
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| account
and the auditor's report thereon for the year ended 30th June 1999. |
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| Despite
heavy odds in this competitive industry and increase in cost of raw material, |
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| energy
and wages, we have by the grace of God improved the working results of the |
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| company. |
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| Operational
Results |
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| The
management has been able to earn net profit of Rs. 0.615 million as compared |
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| to
the previous year's loss of Rs. 0.067 million. The turnover of your company
has |
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| increased
from 72.230 million to 84.813 million which reflects the better quality of |
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| processing. |
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| You
will be much pleased to know that after a period of 5 years your Company is |
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| able
to pay the dividend to the share holders, as such your Directors recommended |
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| 10%
dividend for the year and following appropriation. |
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|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
|
| Profit/(Loss)
before taxation |
|
614,712 |
(67,410) |
|
|
|
|
|
| Unappropriated
profit brought forward |
|
494,333 |
99,391 |
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| Transferred
from Reserves |
|
500,000 |
500,000 |
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|
------------------ |
------------------ |
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|
994,333 |
599,391 |
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|
------------------ |
------------------ |
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|
1,609,045 |
531,981 |
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|
| Provisions
for Taxation |
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| Prior year |
|
424,042 |
4,880 |
|
| Current year |
|
127,909 |
361,154 |
|
| Deferred |
|
(225,05 7) |
(328,386) |
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|
------------------ |
------------------ |
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|
326,894 |
37,648 |
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|
------------------ |
------------------ |
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|
1,282,151 |
494,333 |
|
| Appropriation |
|
| Workers
profit participation fund |
|
30,735 |
-- |
|
| Proposed
dividend |
|
1,110,941 |
-- |
|
|
------------------ |
------------------ |
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|
1,141,676 |
0 |
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|
------------------ |
------------------ |
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| Balance
carried forward |
|
140,475 |
494,333 |
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|
========== |
========== |
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| Due
to increasing trend of Embroidery of cloth the management imported one |
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| Embroidery
machine and installation of this machine was completed in the month |
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| of
June and now it is working satisfactorily. The management has also
established a |
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| letter
of credit to import another Embroidery machine form Germany. The addition |
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| of
this machine will increase the production of Embroidery section and hope that |
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| we
shall earn a reasonable profit in this section in future years. |
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| The
board would like to place on record their deepest sense of appreciation to
the |
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| services
rendered by National Bank of Pakistan. The management have had cordial |
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| relations
with the workers and staff of the company. |
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|
| Auditor's |
|
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| M/s.
Amin Mudassar and Company, Chartered Accountants, retire and being |
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| eligible
offer themselves for re-appointment. |
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|
| Pattern
of Shareholding |
|
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| The
pattern of shareholding is annexed. |
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| LAHORE |
|
Sh. Tauheed Ellahi Puri |
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| Dated:. 01-12-1999 |
|
Chief Executive |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of THE NATIONAL SILK & RAYON |
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| MILLS
LIMITED as at 30th June, 1999 and the related profit and loss account and |
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| statement
of changes in the financial position together with the notes forming part |
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| thereof,
for the year then ended and we state that we have obtained all the |
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| information
and explanations which to the best of our knowledge and belief were |
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| necessary
for the purposes of our audit and, after due verification thereof, we report |
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| that: |
|
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| (a)
in our opinion, proper books of account have been kept by the |
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| Company
as required by the Companies Ordinance, 1984; |
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| (b) in our opinion |
|
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| I.
the balance sheet and profit & loss account together with the |
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| notes
thereon have been drawn up in conformity with the |
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| Companies
Ordinance, 1984' and are in agreement with the |
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| books
of account and are further in accordance with accounting |
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| policies
consistently applied. |
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|
| II.
The expenditure incurred during the year was for the purpose of |
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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 |
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| the Company; |
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| (c)
in our opinion and to the best of our information and according to |
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| the
explanations given to us, the balance sheet, profit and loss |
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| account
and the statement of changes in the financial position, |
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| together
with the notes forming part thereof, give the information |
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| required
by the Companies Ordinance, 1984 in the manner so |
|
| required
and respectively give a true and fair view of the state of the |
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| Company's
.affairs as at 30th June, 1999 and of the profit and the |
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| changes
in financial position for the year then ended; and |
|
|
| (d)
in our opinion no zakat was deductible at source under the Zakat and |
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| Ushr
Ordinance, 1980. |
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| LAHORE |
|
(Amin Mudassar & Co.) |
|
| Dated: 02-12-1999 |
|
Chartered Accountants |
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|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
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|
1999 |
1998 |
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|
Note |
Rupees |
Rupees |
|
| Share
Capital and Reserves. |
|
|
|
| Authorised
share capital |
|
3 |
14,000,000 |
14,000,000 |
|
|
|
========== |
========== |
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| Issued,
subscribed and paid up share capital |
4 |
11,109,410 |
11,109,410 |
|
| Reserves |
|
5 |
500,000 |
1,000,000 |
|
| Unappropriated
profit |
|
|
140,475 |
494,333 |
|
|
|
------------------ |
------------------ |
|
|
|
11,749,885 |
12,603,743 |
|
|
|
|
| Long Term Loans |
|
6 |
19,400,000 |
20,600,000 |
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|
| Deferred
Liabilities |
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| Deferred Taxation |
|
505,721 |
730,778 |
|
|
| Liabilities
against assets subject to finance lease |
7 |
3,879,937 |
-- |
|
|
|
| Current
Liabilities |
|
| Short
term running finance |
|
8 |
7,986,058 |
7,787,366 |
|
| Current
portion of long term loans |
|
|
879,162 |
-- |
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| Due
to directors and members |
|
|
246,157 |
1,216,084 |
|
| Creditors,
accrued and other liabilities |
9 |
11,190,171 |
9,394,455 |
|
| Unclaimed
dividend |
|
|
266,081 |
266,938 |
|
| Proposed
dividend |
|
|
1,110,941 |
-- |
|
| Workers
profit participation fund |
|
|
30,736 |
-- |
|
| Provision
for taxation |
|
|
424,042 |
361,154 |
|
|
|
------------------ |
------------------ |
|
|
|
22,133,348 |
19,025,997 |
|
| Contingencies
& Commitments |
|
10 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
57,668,891 |
52,960,518 |
|
|
========== |
========== |
|
|
| Tangible
Fixed Assets |
|
| Operating Assets |
|
11 |
32,545,170 |
33,018,685 |
|
| Assets
subject to finance lease |
|
12 |
4,900,000 |
0 |
|
|
|
------------------ |
------------------ |
|
|
37,445,170 |
33,018,685 |
|
|
| Long
Term Security Deposits |
|
|
237,121 |
202,865 |
|
|
|
|
|
| Current Assets |
|
|
|
| Stores
spares and loose tools |
|
13 |
1,000,591 |
982,614 |
|
| Stock in trade |
|
14 |
9,062,618 |
5,939,927 |
|
| Trade debts |
|
15 |
831,794 |
2,085,575 |
|
| Advances,
deposits, prepayments and |
|
|
| other receivables |
|
16 |
7,202,405 |
8,843,996 |
|
| Cash
and bank balances |
|
17 |
1,889,192 |
1,886,856 |
|
|
------------------ |
------------------ |
|
|
19,986,600 |
19,738,968 |
|
|
------------------ |
------------------ |
|
|
57,668,891 |
52,960,518 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| LAHORE |
|
Sh. Tauheed Ellahi Puri |
|
Sh. Kashif Tauheed Puri |
|
| Dated: 02-12-1999 |
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
& LOSS ACCOUNT FOR |
|
| THE
YEAR ENDED JUNE 30, 1999 |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
|
| Sales |
|
18 |
84,813,111 |
72,230,831 |
|
| Cost of sales |
|
19 |
71,514,229 |
61,433,581 |
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
13,298,882 |
10,797,250 |
|
| Selling,
administrative and general expenses |
20 |
11,585,733 |
10,880,528 |
|
|
|
------------------ |
------------------ |
|
| Operating
(Loss)/Profit |
|
|
1,713,149 |
(83,278) |
|
| Other income |
|
21 |
716,489 |
814,275 |
|
|
|
------------------ |
------------------ |
|
|
|
2,429,638 |
730,997 |
|
| Financial charges |
|
22 |
1,814,926 |
798,407 |
|
|
|
------------------ |
------------------ |
|
| Profit/(Loss)
before taxation |
|
|
614,712 |
(67,410) |
|
|
| Provision
for taxation |
|
| Current
year u/s 80-D |
|
4,240,421 |
361,154 |
|
| Prior year |
|
127,909 |
4,880 |
|
| Deferred |
|
(225,057) |
(328,386) |
|
|
------------------ |
------------------ |
|
|
326,894 |
37,648 |
|
|
------------------ |
------------------ |
|
| Profit/(Loss)
after taxation |
|
287,818 |
(105,058) |
|
|
| Unappropriated
profit brought forward |
|
494,333 |
99,391 |
|
| Transferred
from reserves |
|
500,000 |
500,000 |
|
|
------------------ |
------------------ |
|
|
994,333 |
599,391 |
|
|
------------------ |
------------------ |
|
| Appropriation |
|
1,282,151 |
494,333 |
|
|
|
------------------ |
------------------ |
|
| Workers
profit participation fund |
|
30,735 |
-- |
|
| Proposed
dividend |
|
1,110,941 |
-- |
|
|
------------------ |
------------------ |
|
|
1,141,676 |
0 |
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
140,475 |
494,333 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of this statement. |
|
|
|
Sh. Tauheed Ellahi Puri |
|
Sh. Kashif Tauheed Puri |
|
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) FOR THE YEAR ENDED 30TH JUNE 1999 |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
| Cash
flow from Operating Activities |
|
| Cash
generated from operation |
|
A |
6,473,555 |
(3,960,238) |
|
|
|
|
| Payments for: |
|
|
|
| Taxation |
|
(489,063) |
(276,370) |
|
| Long
term security deposits |
|
(34,256) |
(50) |
|
|
------------------ |
------------------ |
|
| Net
Cash inflow from operating activities |
|
5,950,236 |
(4,236,658) |
|
|
| Cash
flow from investing activities |
|
| Fixed
assets purchased |
|
(13,049,129) |
(4,519,789) |
|
| Sale
proceeds of fixed assets |
|
5,080,000 |
893,133 |
|
|
------------------ |
------------------ |
|
| Net
Cash inflow/(Outflow) from investing activities |
|
(7,969,129) |
(3,626,656) |
|
|
| Cash
flow from financing activities |
|
| Long
term loans less repayments |
|
3,559,099 |
4,500,000 |
|
| Mark
up paid on short term loans |
|
(1,736,563) |
(701,502) |
|
|
------------------ |
------------------ |
|
|
|
1,822,536 |
3,798,498 |
|
|
|
------------------ |
------------------ |
|
| Net
increase/(decrease) in cash and cash equivalents |
|
(196,357) |
(4,064,816) |
|
| Cash
and cash equivalent at beginning of the year |
B |
(5,900,510) |
1,835,694) |
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at end of the year |
B |
(6,096,867) |
(5,900,510) |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of this statement. |
|
|
|
Sh. Tauheed Ellahi Puri |
|
Sh. Kashif Tauheed Puri |
|
|
Chief Executive |
|
Director |
|
|
|
| NOTES
TO THE STATEMENT OF CHANGES |
|
| IN
FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
| Cash
generated from operations |
|
| Profit/(Loss)
before taxation |
|
614,712 |
(67,410) |
|
|
|
| Add/(less)
adjustment for non cash charges |
|
| and other items. |
|
| Depreciation |
|
3,766,905 |
3,841,752 |
|
| Profit
on sale of fixed assets |
|
(224,261) |
(97,936) |
|
| Interest
receivable |
|
(113,440) |
(111,270) |
|
| Mark
up paid on short term loan |
|
1,736,563 |
701,502 |
|
|
------------------ |
------------------ |
|
| Profit
before working capital changes |
|
5,780,479 |
4,266,638 |
|
|
|
| Movement
in working capital |
|
|
|
| Decrease/(Increase)
in current assets |
|
| Store,
spares and loose tools |
|
(17,977) |
488,928 |
|
| Stock in trade |
|
(3,122,691) |
3,340,782 |
|
| Trade debts |
|
1,253,781 |
(1,027,810) |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables (net) |
|
1,643,761 |
(6,317,831) |
|
|
------------------ |
------------------ |
|
|
(243,126) |
(3,515,931) |
|
|
| (Decrease)/Increase
in current liabilities, |
|
| Creditors,
accrued and other liabilities |
|
1,906,986 |
3,324,852 |
|
| Due to directors |
|
(969,927) |
(8,035,797) |
|
| Unclaimed
dividends |
|
(857) |
0 |
|
|
------------------ |
------------------ |
|
|
936,202 |
(4,710,945) |
|
|
------------------ |
------------------ |
|
|
6,473,555 |
(3,960,238) |
|
|
========== |
========== |
|
| B.
Cash and cash equivalents |
|
| Cash
and bank balances |
|
1,889,191 |
1,886,856 |
|
| Short
term running finance |
|
(7,986,058) |
(7,787,366) |
|
|
------------------ |
------------------ |
|
|
(6,096,867) |
(5,900,510) |
|
|
========== |
========== |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED 30TH JUNE, 1999 |
|
|
| 1.
The Company and Nature of Business |
|
| The
Company is a public limited company, incorporated under the |
|
| Companies
Act. 1913 (Now Companies Ordinance, 1984). The Company is |
|
| quoted
on Lahore and Karachi stock exchange. The principal activity of the |
|
| company
is the dying bleaching and finishing of textile materials. |
|
|
| 2.
Significant Accounting Policies |
|
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost |
|
| convention. |
|
|
| 2.2
Retirement benefits |
|
| The
Company operates an unfunded gratuity scheme for employees. |
|
|
| No
provision for gratuity has been provided as the same is charged as |
|
| and when paid. |
|
|
| 2.3 Taxation |
|
|
|
| Current |
|
| The
provision for current taxation is based on taxable income at the |
|
| current
rates of taxation after taking into account tax credits and tax |
|
| rebates
realisable, if any. |
|
|
| Deferred |
|
| The
company accounts for deferred taxation using the liability |
|
| method
on all major timing differences which are considered |
|
| reversible
in the foreseeable future. |
|
|
| 2.4
Tangible fixed assets |
|
| Operating
Fixed-assets are stated at cost less accumulated |
|
| depreciation
except freehold land and capital work in progress which |
|
| are
stated at cost. Depreciation is charged on reducing balance |
|
| method
at the rates specified in note 11. Full year depreciation is |
|
| provided
in the year of addition while no depreciation is charged in |
|
| the
year of deletion. Normal repairs and maintenance are charged to |
|
| income.
Gain or loss, if any, on disposal of assets is included in |
|
| current income. |
|
|
| Freehold
land and buildings include cost of land and building of |
|
| National
Primary School which has been taken over by the |
|
| Government
and no compensation in this respect has been awarded |
|
| to the company. |
|
|
| 2.5
Assets subject to finance lease |
|
| Assets
subject to finance lease are stated at lower of present value of |
|
| minimum
lease payments under the lease agreement and the fair |
|
| value
of the asset. The related obligation of the lease are accounted |
|
| for as liabilities. |
|
|
| No
depreciation on leased assets has been provided for the year as |
|
| company
has not started commercial production. |
|
|
| 2.6
Stores, spares, loose tools and stocks in trade |
|
| These
are valued as follows |
|
|
| Particular |
|
Mode of valuation |
|
| Store,
spare parts, dyes |
|
| chemicals
and packing material |
- at moving average cost |
|
| Chemicals
and dyes in process |
- at estimated cost |
|
| Finished goods |
|
- at lower of average cost and |
|
|
net realisable value |
|
|
| Cost
in relation to work in process and finished goods represents the |
|
| annual
average manufacturing cost which consists of prime cost and |
|
| appropriate
manufacturing overheads. Net realisable value signifies |
|
| the
estimated selling price in the ordinary course of business less |
|
| estimated
cost necessary to be incurred to make the sale. |
|
|
