| THE THAL INDUSTRIES CORPORATION LIMITED |
|
|
|
|
|
| Annual
Report 1997 |
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| CONTENTS |
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| Company
Information |
|
| Notice
of Annual General Meeting |
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| Chairman's
Review |
|
| Director's
Report |
|
|
|
| Auditor's
Report |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement of Changes in
Financial Position |
|
| Notes
to the Accounts |
|
| Pattern
of Shares Holding |
|
|
| BOARD
OF DIRECTORS |
|
|
| Mr.
Muhammad Parvez Masud |
|
Chairman |
|
|
| Chief
Secretary to Government of the Punjab and |
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|
|
| Administrator
Thal Development. |
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| Mr.
Imtiaz Masrur |
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|
Director |
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| Senior
Member Board of Revenue, Punjab. |
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| Mr.
Tariq Farook |
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|
Director |
|
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| Secretary
to Government of the Punjab |
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| Finance
Department. |
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|
| Mr.
Yousaf Kamal |
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|
Director |
|
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| Secretary
to Government of the Punjab |
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|
|
| Labour
and Manpower Department. |
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|
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| Mr.
Muhammad Humayun Farshori |
|
Director |
|
|
| Secretary
to Government of the Punjab |
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|
|
| Food
Department. |
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|
|
| Mr.
Kamrau Rasool |
|
|
Director |
|
|
| Secretary
to Government of the Punjab |
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|
|
| Industrial and Mineral Development |
Department. |
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|
|
| Mr.
Shafique Hussain Bokhari |
|
Special Director |
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| Commissioner,
D.G.Khan Division. |
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|
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| Mr.
J.A.Zaman |
|
Director |
|
|
| 1-White
House Lane, |
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|
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| Lahore. |
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|
|
| Mr.
Safdar Iqbal Puri |
|
Director |
|
|
| 10-Commercial
Zone, Liberty Market, |
|
|
|
| Gulberg,
Lahore. |
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|
|
| Mr.
Muhammad Ahsan |
|
|
Secretary |
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|
|
| Managing
Agents |
|
Thai Development |
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| General
Manager |
|
Mian Muhammad Sarwar |
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| Finance
Manager |
|
Mr. Muhammad Aslam
Karimi, A.C.M.A. |
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|
|
|
| Auditors |
|
M/s. RIAZ AHMAD & CO. |
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|
|
Chartered Accountants
Lahore. |
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|
|
|
| Bankers |
|
Habib Bank Limited |
|
|
|
Lahore & Layyah. |
|
|
|
The Bank of Punjab,
Lahore. |
|
|
|
Muslim Commercial Bank
Ltd. Layyah. |
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|
|
|
| Sugar
Factory |
|
Layyah |
|
|
|
|
|
| NOTICE
TO SHARE HOLDERS |
|
|
| Notice
is hereby given that the 44th Annual General Meeting of the shareholders of
the Thal |
|
| Industries
Corporation Limited will be held on 30th March, 1998 (Monday) at 5 p.m. at
the Avari |
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| Hotel,
Shahrah-e-Quaid-e-Azam, Lahore to transact the following business:- |
|
|
| ORDINARY
BUSINESS: |
|
| a)
to confirm the Minutes of the 43rd Annual General Meeting held on 31-3-1997. |
|
| b)
to receive, consider and adopt audited accounts of the Company for the year
which ended on |
|
| September
30, 1997 together with the Auditors and Directors Reports thereon. |
|
|
| c)
to approve the payment of 22.5% cash dividend as recommended by the Board of
Directors. |
|
|
| d)
to appoint Auditors for the year ending 30-9-1998 and to fix their
remuneration. (M/s. Riaz |
|
| Ahmad
and Company Chartered Accountants retire and are eligible for
re-appointment): |
|
|
| SPECIAL
BUSINESS: |
|
|
| e)
to consider and pass the following resolution: |
|
|
| "Resolved
that the Managing Agency of Thai Development be and is hereby extended for a |
|
| period
of 5 years with effect from 05-09-1998 and para 133 of Articles of
Association of the |
|
| Company
be amended accordingly" |
|
|
| f)
to consider any other business with permission of the Chair. |
|
|
| N.B.
1. Shares Transfer books of the Company will remain closed from 24-3-1998 to
30-3-1998 |
|
| (both
days inclusive). |
|
|
| 2.
Members are requested to attend in person alongwith National Identity Card or
send their |
|
| proxy
duly signed witnessed so as to reach the registered office of the Company not
less |
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| than
48 hours before the meeting. |
|
|
| 3.
Shareholders are requested to notify any change in address immediately. |
|
|
| STATEMENT
OF MATERIAL FACTS UNDER SECTION 160 |
|
|
| The
existing term of the Managing Agency of Thal Development is expiring on
05-9-1998. |
|
| The
Board of Directors has recommended that the term of Managing Agency may be |
|
| extended
for 5 years from the said date. |
|
|
|
| REVIEW
BY THE CHAIRMAN |
|
|
| Ladies
and Gentleman, |
|
| 1.
I welcome you to the 44th Annual General Meeting of the Company. |
|
| 2.
During the year under review, Layyah Sugar Mill crushed 66.50 lacs maunds |
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| of
sugarcane and produced 1,92,220 bags of 100 kg sugar with average |
|
| recovery
of 7.75%. During the previous year the cane crushed was 75.25 lacs |
|
| maunds
and production of sugar was 2,24,440 bags of I00 kg with average |
|
| recovery
of 8%. The major reasons for shortfall in sugar production were poor |
|
| availability
of cane, adverse climatic conditions and pest attack. Because of the |
|
| combination
of these factors, the recovery was as low as 7.75%. Volume of |
|
| cane
crushed in the season also fell because of lower total availability as well |
|
| as
poaching by neighbouring Mills. |
|
|
| 3.
Final account of the Company for the year under review have shown profit of |
|
| Rs.2.77
crore before taxation. After making provision for taxation and other |
|
| adjustments,
the net profit works out to be Rs. 1.99 crore. Unappropriated |
|
| amount
in the last year accounts was Rs.0.10 crore. Rs. 2.01 crore is now |
|
| available
for appropriation. |
|
|
| 4.
Government has decided to privatize Layyah Sugar Mill/disinvest its shares in |
|
| the
Company and this process is expected to be completed in the near future. |
|
|
| 5.
The relationship of the Mill Management and workers remained cordial during |
|
| this
period. During the year under review 5.49 bonuses were granted to the |
|
| employees. |
|
|
|
|
| 6.
I take this opportunity to place on record my appreciation for the hard work |
|
| put
in by directors, officers and workers. |
|
|
| 7.
I must also thank the District Administration Layyah for their assistance to
the |
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| Mill
Management. |
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|
|
| DIRECTORS'
REPORT |
|
|
| The
Directors have the pleasure in presenting the 44th annual report together
with the audited |
|
| accounts
of the company for the year ending 30th September, 199T The financial results
of the |
|
| company
for the year under review are as follows:- |
|
|
| OPERATING
RESULTS. |
|
|
1997 |
1996 |
|
|
| Sugarcane
crushed |
|
|
248,203 MT |
280,879 MT |
|
|
|
|
66,49,943 Mds |
7,525,416 Mds |
|
|
|
|
| Sugar
produced |
|
|
19,222 MT |
22,444 MT |
|
|
|
|
192,220 Bags |
224,440 Bags |
|
|
| Recovery |
|
|
|
7.75 % |
8.00 % |
|
| Duration |
|
|
|
116 Days |
122 Days |
|
| FINANCIAL
RESULTS. |
|
|
Rupees |
Rupees |
|
| Profit
before taxation |
|
|
27,727,265 |
81,987,487 |
|
| Provision
for taxation |
|
|
7,824,379 |
18,667,338 |
|
| Profit
after taxation |
|
|
19,902,886 |
63,320,149 |
|
| Unappropriated
profit |
|
|
107,303 |
10,368,466 |
|
|
---------- |
---------- |
|
| Available
for appropriation |
|
|
20,010,189 |
73,688,615 |
|
| APPROPRIATION |
|
|
| Proposed
dividend 22.5 % (1996 70%) |
|
16,901,136 |
52,581,312 |
|
| General
reserves |
|
|
3,000,000 |
21,000,000 |
|
|
---------- |
---------- |
|
| Unappropriated
profit |
|
109,053 |
107,303 |
|
|
| BONUS
TO EMPLOYEES |
|
| The
company paid 5.49 Bonuses to the employees during the year under report. |
|
| AUDITORS |
|
| The
present auditors of the company M/s. Riaz Ahmed & Company Chartered
Accountants retire |
|
| and
are eligible for reappointment. |
|
|
| APPRECIATION |
|
| The
Management - employees relations remain cordial and the Directors record
their appreciation of |
|
| the
efficient services rendered and the hard work put in by the officers, staff
and workers of the |
|
| Company. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of THE THAL INDUSTRIES CORPORATION |
|
| LIMITED
as at 30 September 1997 and the related profit and loss account and statement
of changes |
|
| in
financial position, together with the notes forming part thereof, for the
year then ended and we |
|
| state
that we have obtained all the information and explanations which to the best
of our knowledge |
|
| and
belief were necessary for the purposes of our audit and, after due
verification thereof, we report |
|
| that: |
|
|
| (a)
in our opinion, proper books of account have been kept by the company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| (b)
in our opinion: |
|
|
| i)
the balance sheet arid profit and loss account together with the notes
thereon have |
|
| been
drawn up in confirmity with the Companies Ordinance, 1984, and are in |
|
| agreement
with the books of account and are further in accordance with |
|
| accounting
policies consistently applied; |
|
|
| ii)
the expenditure incurred during the year was for the purpose of the company's |
|
| business:
and |
|
|
| iii)
the business conducted. investments made and the expenditure incurred during
the |
|
| year
were in accordance with the objects of the company; |
|
|
| (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,
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 30 September 1997 and of the
profit and |
|
| changes
in financial position for the year then ended; and |
|
|
| (d)
In our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was |
|
| deducted
by the company and deposited in the Central zakat fund established u/s 7 of
that |
|
| ordinance. |
|
|
| LAHORE:-25th
February 1998 |
|
RIAZ AHMAD & COMPANY |
|
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30 SEPTEMBER 1997 |
|
|
|
|
NOTE |
1997 |
1996 |
|
|
|
|
Rupees |
Rupees |
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
capital |
|
|
| 20
000 000 ordinary shares |
|
| of
Rupees 10 each |
|
200 000 000 |
200 000 000 |
|
| Issued,
subscribed and |
|
========== |
========== |
|
| paid
up capital |
|
|
| 7
511 616 ordinary |
|
| shares
of Rupees 10 each |
|
3 |
75 116 160 |
75 116 160 |
|
|
| Reserves |
|
|
4 |
90 800 000 |
93 800 000 |
|
| Unappropriated
profit |
|
|
109 053 |
107 303 |
|
|
|
|
---------- |
---------- |
|
|
|
|
169 025 213 |
166 023 463 |
|
|
| REDEEMABLE
CAPITAL |
|
5 |
4 670 513 |
8 945 149 |
|
| DEFERRED
TAXATION |
|
|
10 000 000 |
10 000 000 |
|
| CURRENT
LIABILITIES |
|
| Current
portion of |
|
| redeemable
capital |
|
|
4 274 636 |
3 912 518 |
|
| Creditors,
accrued and |
|
|
|
| other
liabilities |
|
6 |
20 249 168 |
30 253 073 |
|
| Provision
for taxation |
|
25 329 000 |
40 504 779 |
|
| proposed
dividend |
|
|
16 901 136 |
52 581 312 |
|
|
---------- |
---------- |
|
|
|
66 753 940 |
127 251 682 |
|
| CONTINGENCIES AND COMMITMENTS |
7 |
-- |
-- |
|
|
---------- |
---------- |
|
|
|
|
250 449 666 |
312 220 294 |
|
|
|
|
=========== |
=========== |
|
| The
annexed note form an integral part of these accounts |
|
|
| TANGIBLE
FIXED ASSETS |
|
|
| Operating
fixed assets |
|
8 |
85 430 347 |
82 587 729 |
|
| Capital
work-in-progress |
|
9 |
2 522 870 |
1 670 536 |
|
|
|
|
---------- |
---------- |
|
|
|
|
87 953 217 |
84 258 265 |
|
| LONG
TERM SECURITY DEPOSITS |
|
|
492 298 |
492 298 |
|
| CURRENT
ASSETS |
|
|
| Stores,
spare parts and |
|
| loose
tools |
|
10 |
24 942 363 |
23 547 185 |
|
|
|
|
|
|
| stock
in trade |
|
11 |
48 804 918 |
34 204 659 |
|
|
|
|
|
|
| Advances,
prepayments |
|
|
|
|
| and
other receivables |
|
12 |
36 326 676 |
51 384 334 |
|
|
|
|
|
|
| Cash
and bank balances |
|
13 |
51 930 194 |
118 333 553 |
|
|
|
|
---------- |
---------- |
|
|
|
|
162 004 151 |
227 469 731 |
|
|
---------- |
---------- |
|
|
|
250 449 666 |
312 220 294 |
|
|
========== |
========== |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED |
|
| 30
SEPTEMBER 1997 |
|
|
|
|
NOTE |
1997 |
1996 |
|
|
|
|
Rupees |
Rupees |
|
| SALES |
|
14 |
387 940 115 |
329 887 700 |
|
| COST
OF GOODS SOLD |
|
15 |
339 382 126 |
259 579 589 |
|
|
|
|
---------- |
---------- |
|
| GROS
PROFIT |
|
|
48 557 989 |
70 308 111 |
|
| OPERATING
EXPENSES |
|
|
| Administrative
and general |
|
16 |
23 718 927 |
22 657 324 |
|
| Selling
and distribution |
|
17 |
996 379 |
820 722 |
|
|
|
|
---------- |
---------- |
|
|
|
24 715 306 |
23 478 046 |
|
|
|
---------- |
---------- |
|
| OPERATING
PROFIT |
|
|
23 842 683 |
46 830 065 |
|
| OTHER
INCOME |
|
18 |
14 499 132 |
42 754 977 |
|
|
|
|
---------- |
---------- |
|
|
|
38 341 815 |
89 585 042 |
|
| FINANCIAL
AND OTHER |
|
| CHARGES |
|
|
19 |
10 614 550 |
7 597 555 |
|
|
---------- |
---------- |
|
| PROFIT
BEFORE TAXATION |
|
|
27 727 265 |
81 987 487 |
|
| PROVISION
FOR TAXATION |
|
20 |
7 824 379 |
18 667 338 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
AFTER TAXATION |
|
|
19 902 886 |
63 320 149 |
|
|
| UNAPPROPRIATED
PROFIT |
|
| BROUGHT
FORWARD |
|
|
107 303 |
10 368 466 |
|
|
---------- |
---------- |
|
| PROFIT
AVAILABLE FOR |
|
| APPROPRIATION |
|
|
20 010 189 |
73 688 615 |
|
|
| APPROPRIATIONS |
|
|
| Proposed
dividend 22.5 % (1996 70%) |
|
16 901 136 |
52 581 312 |
|
| Transfer
to general reserve |
|
|
3 000 000 |
21 000 000 |
|
|
---------- |
---------- |
|
|
|
|
19 901 136 |
73 581 312 |
|
|
|
---------- |
---------- |
|
| UNAPPROPRIATED
PROFIT |
|
|
109 053 |
107 303 |
|
|
========== |
========== |
|
| The
annexed note form an integral part of these accounts |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER 1997 |
|
|
|
|
|
1997 |
1996 |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
Rupees |
Rupees |
|
|
| Profit
before taxation |
|
|
27 727 265 |
81 987 487 |
|
| Adjustment
for non-cash and other items |
|
|
|
| Depreciation |
|
|
10 120 230 |
9 738 053 |
|
| Gain
on sale of agricultural land |
|
(2 701 408) |
(32 240 997) |
|
| (Gain)
/ loss on disposal of |
|
| tangible
fixed assets |
|
|
(884 368) |
101 904 |
|
| Provisions
for: |
|
| Obsolete/slow
moving stores and spares |
|
1 500 000 |
-- |
|
| Doubtful
loans and advances |
|
|
-- |
730 207 |
|
| Credit
balances added back |
|
|
(449 729) |
(454 521 ) |
|
| Securities
forfeited |
|
|
(4 428 600) |
(2 508 201) |
|
| Financial
charges |
|
|
5 852 281 |
2 071 700 |
|
|
---------- |
---------- |
|
| CASH
FLOWS BEFORE WORKING |
|
| CAPITAL
CHANGES |
|
|
36 735 671 |
59 425 632 |
|
|
| (Increase)
/ decrease in current assets |
|
| Stores,
spare parts and loose tools |
|
(2 895 178) |
(6 493 955) |
|
| Stock
in trade |
|
|
(14 600 259) |
(31 835 61l) |
|
| Advances,
deposits, prepayments |
|
| and
other receivables |
|
|
5 064 730 |
(14 675 503) |
|
|
|
|
| Increase
/ (decrease) in current liabilities |
|
|
| Creditors,
accrued and other |
|
| liabilities |
|
|
(5 749 366) |
(20 484 691) |
|
|
---------- |
---------- |
|
| NET
CASH FLOWS FROM CHANGES IN |
|
| WORKING
CAPITAL |
|
|
(18 180 073) |
(73 489 760) |
|
|
| CASH
FLOWS AFTER WORKING CAPITAL CHANGES |
18 555 598 |
(14 064 128) |
|
| Financial
charges paid |
|
|
(5 970 317) |
(2 150 996) |
|
| Income
tax paid |
|
|
(13 007 230) |
(16 825 339) |
|
| NET
CASH FLOWS FROM OPERATING ACTIVITIES |
(421 949) |
(33 040 463) |
|
|
|
1997 |
1996 |
|
| CASH
FLOWS FROM INVESTING |
|
Rupees |
Rupees |
|
| ACTIVITIES |
|
|
|
| Fixed
assets acquired |
|
(14 128 118) |
(8 936 038) |
|
| Sale
proceeds of agricultural land |
|
2 710 000 |
32 348 000 |
|
| Sale
proceeds of fixed assets |
|
1 188 712 |
133 300 |
|
|
---------- |
---------- |
|
| NET
CASH FLOWS FROM INVESTING |
|
| ACTIVITIES |
|
|
(10 229 406) |
23 545 262 |
|
|
| CASH
FLOWS FROM FINANCING |
|
| ACTIVITIES |
|
|
| Redeemable capital |
|
(3 912 518) |
(3 581 076) |
|
| Dividend
paid |
|
|
(51 839 486) |
(107 040) |
|
|
|
|
---------- |
---------- |
|
| NET
CASH FLOWS FROM FINANCING |
|
| ACTIVITIES |
|
|
(55 752 004) |
(3 688 116) |
|
| NET
INCREASE/(DECREASE) IN CASH |
|
| AND
CASH EQUIVALENT |
|
(66 403 359) |
(13 183 317) |
|
| CASH
AND CASH EQUIVALENT AT THE |
|
| BEGINNING
OF THE YEAR |
|
118 333 553 |
131 516 870 |
|
|
---------- |
---------- |
|
| CASH
AND CASH EQUIVALENT AT THE |
|
| END
OF THE YEAR |
|
|
51 930 194 |
118 333 553 |
|
|
========== |
========== |
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED |
|
| 30
SEPTEMBER 1997 |
|
|
| THE
COMPANY AND ITS OPERATIONS |
|
|
| 1.
The Thal Industries Corporation Limited was incorporated on 07 September 1953
under the |
|
| companies
Act, 1913 (Now Companies Ordinance, 1984) as public company limited by |
|
| shares.
Its shares are quoted on Karachi and Lahore stock exchanges in Pakistan. The |
|
| company
is engaged in production and sale of sugar. Thal Development is a managing
agent |
|
| of
the company since the date of incorporation. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
|
| These
accounts have been prepared under the historical cost convention except to
the extent |
|
| of
exchange differences capitalized during previous years. |
|
|
| 2.2
Tangible fixed assets and depreciation |
|
|
| Operating
fixed assets except freehold land are stated at cost less accumulated
depreciation. |
|
| Capital
work-in-progress and freehold land are stated at cost. Cost in relation to
plant and |
|
| machinery
signifies historical cost and exchange differences on foreign currency loan
utilized |
|
| for
acquisition thereof. Borrowing cost pertaining to the construction / erection
period has |
|
| also
been capitalized as part of historical cost. |
|
|
| Depreciation
on all operating fixed assets is charged to income on the reducing balance |
|
| method
to write off their cost over their remaining useful life. Full year's
depreciation is |
|
| charged
on additions including exchange differences while no depreciation is charged
on |
|
| assets
deleted during the year. Normal repairs and maintenance are charged to
income. Major |
|
| renewals
and improvements are capitalized. Gain or loss on disposal of tangible fixed
assets |
|
| is
included in current year's income. |
|
|
| 2.3
STAFF RETIREMENT BENEFITS |
|
|
| The
company operates a gratuity scheme, administered by a Board of Trustees
covering all |
|
| permanent
employees. The provision is made on the basis of length of service and
existing |
|
| pay
of the eligible employees to cover the obligation under the scheme. All sums
due are |
|
| contributed
to the Employees Gratuity Fund Trust. |
|
|
| The
company also operates employees provident fund scheme for all permanent
employees. |
|
| Equal
monthly contributions are made both by the employees and the company at the
rate of |
|
| ten
percent of the basic salary to the fund. |
|
|
| 2.4
Taxation |
|
|
| The
charge for current taxation is based on taxable income at the current rates
of taxation |
|
| after
taking into account available tax rebates and credits. The company accounts
for deferred |
|
| taxation
by using the liability method on all major timing differences. |
|
|
| 2.5
Consumable stores, spare parts and loose tools |
|
|
| These
are valued at cost determined on a moving average basis. Items in transit are
valued at |
|
| cost
comprising invoice value plus other charges paid thereon to the balance sheet
date. |
|
| Adequate
provision is made against items considered obsolete/slow moving. |
|
|
| 2.6
Stock - in- trade |
|
|
| Stock
-in- trade is valued at the lower of average cost and net realizable value
except |
|
| molasses
(By-product) which is valued at net realizable value. The average cost means |
|
| production
cost including all production overheads. Net realizable value signifies the |
|
| estimated
selling prices in the ordinary course of business less selling expenses
incidental to |
|
| sales. |
|
|
| 2.7
Receivables |
|
|
|
| Known
bad debts are written off and provision is made against debts considered
doubtful. |
|
| 2.8
Revenue recognition |
|
| Revenue
from sales is recognized on delivery of goods to customers. Profit on
deposits with |
|
| banks
is recognized on time proportion basis taking into account the principal
outstanding and |
