| Crescent Jute Products Limited |
|
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|
|
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|
| Annual
Report 2000 |
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| CONTENTS |
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| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Director's
Report to the Shareholders |
|
| Chief
Executive Review |
|
| Pattern
of Share Holding |
|
| Auditors'
Report |
|
| Balance Sheet |
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
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|
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| Mr.
Zahid Hussain |
(Chairman) |
|
| Mazhar Karim |
|
(Chief Executive) |
|
|
| (in
alphabetic order) |
|
|
| A. H. Zaidi |
|
| A.
Rashid M. Hanif |
|
| Anjum
M. Saleem |
|
| Khalid Bashir |
|
| Anis
Wahab Zuberi |
(Nominee NIT) |
|
| Riaz Masood |
|
|
| Saif Ullah Khan |
|
(Nominee PICIC) |
|
| Shaukat Shafi |
|
|
| CORPORATE
SECRETARIES: |
|
| Zaheer
A. Sheikh |
|
| Rashid Sadiq |
|
|
| AUDITORS: |
|
| A.
F. Ferguson & Co. |
|
| Chartered
Accountants |
|
|
| REGISTERED
OFFICE: |
|
| 83-Babar Block, |
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| New
Garden Town, Lahore. |
|
| Tel:
(042)5881974-75 |
|
| Fax:
(042) 5881976 |
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| E-mail:
rashid.sadiq@cressoft.com.pk |
|
|
| WORKS: |
|
| Jute
Unit, Jaranwala. |
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|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that 36th Annual General Meeting of the Shareholders of
CRESCENT JUTE PRODUCTS |
|
| LIMITED
will be held on Tuesday February 27, 2001 at 10.00 a.m. at Registered Office,
83-Babar Block, New |
|
| Garden
Town, Lahore to transact the following business: |
|
|
| 1.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended June 30, 2000 |
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| together
with the Directors' and Auditors' Reports thereon. |
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|
|
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| 2.
To appoint Auditors for the year 2000-2001 and fix their remuneration. |
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| BOOK
CLOSURE |
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| The
share transfer books of the company will remain closed from February 21, 2001
to February 27, 2001 (both days |
|
| inclusive). |
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|
By order of the Board |
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|
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|
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| Registered
Office: |
|
|
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| 83-Babar
Block, New Garden Town, Lahore. |
|
|
|
| Tel:
5881974-75, Fax No: 5881976 |
|
(Rashid Sadiq) |
|
| Email:
rashid.sadiq@cressoft.com.pk |
|
Corporate Secretary |
|
| Dated:
January 26, 2001 |
|
|
| Notes: |
|
|
| 1.
A member eligible to attend and vote at this meeting may appoint another
member as his/her proxy to |
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| attend
and vote instead of him/her. Proxies in order to be effective must be
received by the Company at the |
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| Registered
Office not later than 48 hours before the time for holding the Meeting. |
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|
|
|
| 2.
Shareholders are requested to immediately notify the change in address, if
any. |
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|
|
| DIRECTOR'S
REPORT TO THE SHAREHOLDERS |
|
|
| Your
directors have the pleasure in presenting their 36th Annual Report together
with the Audited Accounts of the |
|
| Company
for the year ended 30th June, 2000. |
|
|
| Accounts
for the year ended 30th June, 2000 show profit of Rupees 53.928 million after
adjustment of profit of |
|
| Rupees
161.713 million on sale of cotton unit. Your company suffered loss of Rupees
107.785 million from |
|
| operations
during the year. |
|
|
| REASONS
FOR INCURRING LOSS FROM OPERATIONS |
|
| Acute
shortage of working capital resulting in excessive borrowing and financial
charges thereon is the prime reason |
|
| for
incurring loss for the year. Production was curtailed at 25% of installed
capacity due to shortage of Raw Material. |
|
|
| DEFAULT
IN DEBTS, IF ANY |
|
| Overdue
of 110.350 million and Default of Rupees 9.450 million are reported in Credit
Information Bureau Report as |
|
| on
30th June, 2000. Negotiations are being made with the banks for
re-scheduling. |
|
|
| AUDITORS |
|
| The
present Auditors Messrs. A.F. Ferguson & Company, Chartered Accountants
retire and being eligible offer them |
|
| for
re-appointment. |
|
|
| REVIEW
OF OPERATIONS |
|
| The
Directors of the company endorse the contents of the Chief Executive Review
of operations on the next pages, |
|
| which
deals with the Company's activities, its performance and future prospects.. |
|
|
| AUDITOR'S
OBSERVATIONS |
|
| The
auditors in their report have shown reservations regarding: |
|
|
| 1.
Amount receivable from Crescent Group Services (Pvt) Limited (CGSL)
aggregating Rupees 243.6 million. |
|
| CGSL
is projecting an approximate losses Rupees 100 million subject to favourable
settlement of legal suits |
|
| and
claim filed against WAPDA Rs. 1 million and realizable value of the assets
Rupees 50 million. The |
|
| recoverability
of the amount due from CGSL is dependent upon its ability to successfully
realize the claim |
|
| and
sale proceeds of its assets. |
|
|
|
|
| Further
Monopoly Control Authority (MCA) in its order dated November 20, 2000 has
directed the company |
|
| to
recover the amount due from CGSL alongwith interest by December 31, 2002. The
company had stopped |
|
| charging
interest on the advance since 1995. |
|
|
| The
company is contesting the decision and has filed a writ petition in the
Lahore High Court that has not |
|
| yet
been admitted. |
|
|
| Management
is of the view that: |
|
| ·
Order of MCA is contrary to law of the image having the force of law. |
|
| ·
Order has failed to determine issue of
law and usage having force of law. |
|
| ·
There has been substantial error/defect in following the procedure provided
in the Ordinance, |
|
| ·
The writ will be admitted and favourably decided. |
|
|
| 2.
Various factors and accounting ratios raising sub-stantial doubts that the
company will be able to continue |
|
| as
a going concern. To enable the company to continue as a going concern. The
management further |
|
| intends
to restructure its credit facilities and arrange alternative funding to
reduce the debt burden to attain |
|
| satisfactory
levels of profitability and meet other operational requirements. |
|
|
|
|
| As
indicated some plans are under consideration of management. Hopefully these
plans will be |
|
| implemented
and the company will come out of the financial problem and continue as going
concern. |
|
|
| The
directors thank the Shareholders, bankers and Customers who continue to
extend their cooperation in days of |
|
| our crisis. |
|
|
|
|
For and on behalf of the Board |
|
|
|
|
|
|
|
(Mazhar Karim) |
|
|
|
Chief Executive |
|
| Date:
January 26, 2001 |
|
Lahore |
|
|
|
|
| CHIEF
EXECUTIVE REVIEW |
|
|
| JUTE UNIT |
|
| Company
faces acute shortage of working capital. The banks have not renewed their
lines of credit for running |
|
| finance
and Import Letters of credits. We could not import raw jute sufficient to
keep the mills running at full capacity. |
|
| Production
of Jute Unit decreased from 9123 tons in 1998-99 to 5983 tons in 1999-00.
Sales quantity decreased from |
|
| 10043
tons in 1998-99 to 6192 tons in 1999-00. Sale price of Hessian decreased by
15% while sale price of Sacking |
|
| and
Twine also declined by 2-3% respectively. On the other hand Jute prices
increased by 20%. |
|
|
| Other
costs remained well with in control. |
|
|
| COTTON UNIT |
|
| We
had better cotton crop after many years. Average rate of cotton decreased
from 64,33 Kg-in 1998-99 to 49.11 per |
|
| Kg
in 1999-00. Production increased by more than 18%. Although there has been
general reduction in sale price of |
|
| yarn
in sympathy with the decrease in cotton prices, sales increased by 58
million. Administrative and Selling & |
|
| Distribution
expenses remained within control. Cotton unit showed profit of Rupees 39.281
million for the year. |
|
|
| CONSOLIDATED |
|
| Consolidated
accounts for the year show loss of Rupees 107.785 million from operations
compared to the loss of |
|
| Rupees
132.225 million in 1998-99. Loss for the year is converted into profit of
Rupees 53.928 million by the profit of |
|
| Rupees
161.713 million from sale of cotton unit. |
|
|
|
|
|
1999-00 |
1998-99 |
|
|
|
|
Rupees in '000' |
Rupees in '000' |
|
|
| Jute Unit |
|
|
(143,566) |
(87,928) |
|
| Cotton Unit |
|
|
39,281 |
(38,773) |
|
| Sub Total |
|
|
(104,285) |
(126,701) |
|
| Provision
for Taxation |
|
|
(3,500) |
(5,524) |
|
| Loss
from Operations |
|
|
(107,785) |
(132,225) |
|
| Profit
on sale of Cotton Unit |
|
|
161,713 |
0 |
|
| Profit
& Loss for the year |
|
|
53,928 |
(132,225) |
|
|
| Main
problem of Crescent Jute lies in accumulated losses resulting in excessive
borrowings and high financial |
|
| charges.
Our main thrust at present is to cut down our borrowings and reduce the
financial charges. |
|
|
| With
this aim in view Cotton Unit (Crescent Cotton Products) has been sold out to
an Associated Company: Crescent |
|
| Steel
& Allied Products for 220.132 million at a profit of Rupees 161.713
million. Details are as follow: |
|
|
| *
Sale of Fixed Assets |
|
|
220,621,464 |
|
| *
Long Term Security |
|
|
706,162 |
|
| *
Stores & Spares |
|
|
8,418,474 |
|
|
|
|
------------------ |
|
|
|
|
229,746,100 |
|
| *
Surplus on Revaluation Transfer |
|
171,327,845 |
|
|
|
|
------------------ |
|
|
|
|
58,418,255 |
|
| *
Profit on Sale of Project |
|
|
161,713,745 |
|
|
|
|
------------------ |
|
| * Sale Price |
|
|
220,132,000 |
|
|
========== |
|
|
| Sale
price includes PICIC loan of Rupees 91,713,526 taken over by Crescent Steel.
Balance price has been paid in |
|
| Cash. |
|
|
| In
addition Stocks of Rupees 31.697 million held by cotton unit as on 30-06-2000
have been subsequently sold at a |
|
| profit
of Rupees 9.227 million for Rupees 40.925 million. |
|
|
| This
has helped the company reduction in borrowing from banks and financial
charges. In addition to reduction of |
|
| long
term loan of Rupees 91.713 million that has been transferred to buyers with
the sale of cotton unit at the year |
|
| end
there has been reduction of 171 million in average borrowings from banks and
a reduction of Rupees 37 million |
|
| in
financial charges during the year. Further reduction is also expected in
subsequent period. |
|
|
| THE
WAY FORWARD |
|
| We
have been negotiating with the Banks for restoration of our L.C. Limits so
that import of Raw Jute could be made |
|
| without
any hindrance at proper time and at a right price. Hopefully this will be
finalized very soon. We except to |
|
| boost
up our production and bring it to normal production capacity. There is
sufficient demand for jute goods though |
|
| seasonal
in nature. We have to produce and keep the goods in stock in anticipation of
demand. |
|
|
| Now
the most of the management plans have been implemented and some more are in
progress, we are sure that |
|
| the
results will start to show gradual improvement in the future years. |
|
|
|
|
(Mazhar Karim) |
|
|
|
Chief Executive |
|
| Date:
January 26, 2001 |
|
Lahore |
|
|
|
|
| FORM '34' |
|
| PATTERN
OF HOLDING OF SHARES |
|
| HELD
BY SHAREHOLDERS AS AT 30TM JUNE, 2000 |
|
|
| Shareholders |
From |
To |
Total |
|
|
Shares held |
|
|
| 576 |
1 |
100 |
18,988 |
|
| 510 |
101 |
500 |
132,136 |
|
| 212 |
501 |
1000 |
148,348 |
|
| 215 |
1001 |
5000 |
507,467 |
|
| 64 |
5001 |
10000 |
464,676 |
|
| 27 |
10001 |
15000 |
336,621 |
|
| 12 |
15001 |
20000 |
215,798 |
|
| 11 |
20001 |
25000 |
256,349 |
|
| 7 |
25001 |
30000 |
199,724 |
|
| 9 |
30001 |
35000 |
289,491 |
|
| 2 |
35001 |
40000 |
74,764 |
|
| 4 |
40001 |
45000 |
167,180 |
|
| 2 |
45001 |
50000 |
96,901 |
|
| 3 |
50001 |
55000 |
154,788 |
|
| 1 |
55001 |
60000 |
55,345 |
|
| 3 |
60001 |
65000 |
184,877 |
|
| 2 |
65001 |
70000 |
132,715 |
|
| 1 |
90001 |
95000 |
92,812 |
|
| 1 |
95001 |
100000 |
97,152 |
|
| 1 |
100001 |
105000 |
100,001 |
|
| 1 |
145001 |
150000 |
149221 |
|
| 1 |
150001 |
155000 |
151,420 |
|
| 2 |
155001 |
160000 |
312,335 |
|
| 3 |
200001 |
205000 |
606,453 |
|
| 1 |
260001 |
265000 |
263,366 |
|
| 1 |
275001 |
280000 |
278,266 |
|
| 1 |
305001 |
310000 |
309,375 |
|
| 1 |
365001 |
370000 |
367,224 |
|
| 1 |
535001 |
540000 |
538,417 |
|
| 1 |
685001 |
690000 |
686,489 |
|
| 1 |
1715001 |
1720000 |
1,716,683 |
|
| 1 |
2745001 |
2750000 |
2,747,211 |
|
| 1 |
3210001 |
3215000 |
3,210,372 |
|
| ------------------ |
|
------------------ |
|
| 1,679 |
|
15,063,468 |
|
| ========== |
|
========== |
|
|
| Categories
of Shareholders |
|
Numbers |
Shares held |
Percentage |
|
|
| Financial
Institution |
|
12 |
3,703,787 |
24.59 |
|
| Individual |
|
1621 |
3,683,237 |
24.45 |
|
| Insurance
Companies |
|
9 |
726,905 |
4.83 |
|
| Investment
Companies |
|
3 |
287,472 |
1.91 |
|
| Joint
Stock Companies |
|
22 |
6,136,940 |
40.74 |
|
| Other |
|
12 |
525,127 |
3.48 |
|
|
|
------------------ |
------------------ |
------------------ |
|
| TOTAL |
|
1679 |
15,063,468 |
100.00 |
|
|
|
|
========== |
========== |
========== |
|
|
| Others |
|
| Abandoned
Property |
|
1 |
1,106 |
0.01 |
|
| Government
Authorities |
|
1 |
1 |
0.00 |
|
| Modaraba |
|
5 |
176,302 |
1.16 |
|
| Non Resident |
|
1 |
309,375 |
2.05 |
|
| Trust |
|
4 |
38,343 |
0.25 |
|
|
|
------------------ |
------------------ |
------------------ |
|
| TOTAL |
|
12 |
525,127 |
3.48 |
|
|
========== |
========== |
========== |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Crescent Jute Products Limited as
at June 30, 2000 and the related |
|
| profit
and loss account, cash flow statement and statement of changes in equity
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. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of internal control, and |
|
| prepare
and present the above said statements in conformity with the approved
accounting standards and the |
|
| requirements
of the Companies Ordinance, 1954. Our responsibility is to express an opinion
on these statements |
|
| based
on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These standards |
|
| require
that we plan and perform the audit to obtain reasonable assurance about
whether the above said statements |
|
| are
free of any material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts |
|
| and
disclosures in the above said statements and audit also includes assessing
the accounting policies and |
|
| significant
estimates made by the management as well as, evaluating the overall
presentation of the above said |
|
| statements. |
|
|
| We
believe that our audit provides a reasonable basis for our opinion and, after
due verification, 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 will 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
except for the |
|
| change
in accounting policy referred to in note 2.4 and 2.11 to the accounts, with
which we concur; |
|
|
| (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)
as explained in note 20.3, the accounts include an amount receivable from
Crescent Group Services (Pvt) |
|
| Limited
(CGSL), an associated company, aggregating Rs. 243.6 million. The
recoverability of this amount is |
|
| dependent
on certain factors more fully explained in note 12.1 to the accounts.
Subsequent to June 30, |
|
| 2000,
Monopoly Control Authority (MCA) in its order dated November 20, 2000 has
directed the company to |
|
| recover
the balance due from CGSL alongwith interest by December 31, 2002. The
company had stopped |
|
| charging
interest on the advance since 1995. The company is contesting the decision
and has filed a writ |
|
| petition
in the Lahore High Court against the order of MCA. The petition however has
not yet been admitted. |
|
| Pending
the outcome of these matters, no adjustments have been made in these accounts
which may be |
|
| required,
consequent to the outcome of the uncertainties. |
|
|
|
| Except
for the effect of adjustments, if any, which may be required on the
settlement of matter referred to in |
|
| the
paragraph above 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, cash flow statement and
statement of changes in |
|
| equity
together with the notes forming part thereof conform with approved accounting
standards as |
|
| applicable
in Pakistan, and, 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, 2000 and of the profit, its cash flow and changes in equity for the year
then ended; and |
|
|
| (d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| Without
qualifying our opinion, we draw attention to note 2.1 to the accounts, which
states that these |
|
| accounts
have been prepared assuming that the company will continue as a going
concern. As explained in |
|
| note
2.1 to the accounts, the company has suffered a loss of Rs. 107.8 million
during the year and has |
|
| accumulated
losses of Rs. 547 million as at June 30, 2000. As of that date the company's
current liabilities |
|
| exceeded
its current assets by Rs. 166 million. These factors raise substantial doubt
that the company will |
|
| be
able to continue as a going concern. Management's plan in regard to this
matter is also discussed in note |
|
| 2.1
to the accounts. Consequently these accounts do not include any adjustments
relating to the |
|
| recoverability
and classification of the recorded assets amount and classification of
liabilities that might |
|
| result
should the company not be able to continue as a going concern and therefore
may be unable to |
|
| realise
its assets or discharge its liabilities in the normal course of business. |
|
|
| Lahore: |
|
|
A.F. Ferguson & Co., |
|
| February
02, 2001 |
|
Chartered Accountants |
|
|
|
| FINANCIAL
STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
Notes |
Rupees |
Rupees |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
capital |
|
| 20,000,000
(1999: 20,000,000) ordinary shares |
|
| of Rs. 10 each |
|
|
200,000,000 |
200,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
3 |
150,634,680 |
150,634,680 |
|
| Reserves |
|
4 |
138,767,584 |
138,767,584 |
|
| Accumulated
loss |
|
|
(547,025,216) |
(600,953,394) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(257,622,952) |
(311,551,130) |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
5 |
177,240,705 |
348,568,550 |
|
| REDEEMABLE
CAPITAL |
|
|
|
|
| Long
term running finances - secured |
6 |
35,324,198 |
35,256,481 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT TO |
|
| FINANCE
LEASE |
|
7 |
505,633 |
-- |
|
| DEBENTURES
AND LONG-TERM LOANS |
8 |
30,432,833 |
173,508,191 |
|
| DEFERRED
LIABILITIES |
|
9 |
12,109,187 |
9,200,000 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of |
|
|
|
| Long
term running finances |
|
6 |
22,629,904 |
4,670,000 |
|
| Liabilities
against assets subject to finance lease |
7 |
152,226 |
118,851 |
|
| Debentures
and long term loans |
|
8 |
60,977,047 |
46,282,442 |
|
| Short
term running finances |
|
10 |
292,130,882 |
225,781,437 |
|
| Creditors,
accrued and other liabilities |
11 |
243,408,749 |
313,204,414 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
619,298,808 |
590,057,144 |
|
|
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
12 |
------------------ |
------------------ |
|
|
|
|
617,288,412 |
845,039,236 |
|
|
========== |
========== |
|
|
|
|
Mazhar Karim |
|
|
|
Chief Executive |
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
| Operating
fixed assets - tangible |
|
13 |
160,507,163 |
418,698,491 |
|
| Assets
subject to finance lease |
|
14 |
601,040 |
205,312 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
161,108,203 |
418,903,803 |
|
|
|
|
|
| LONG-TERM
INVESTMENT |
|
15 |
2,570,000 |
2,570,000 |
|
| LONG-TERM
DEPOSITS |
|
|
1,031,091 |
1,258,491 |
|
|
|
|
|
| CURRENT
ASSETS |
|
| Stores
and spares |
|
16 |
12,842,999 |
22,995,441 |
|
| Stock-in-trade |
|
17 |
35,087,549 |
72,408,342 |
|
| Short
term investments |
|
18 |
43,067,630 |
41,145,681 |
|
| Trade debts |
|
19 |
5,705,492 |
7,757,206 |
|
| Advances,
deposits, prepayments and other receivable |
20 |
277,791,969 |
269,701,533 |
|
| Income
tax recoverable |
|
|
3,484,825 |
3,102,422 |
|
| Cash
and bank balance |
|
21 |
74,598,654 |
5,196,317 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
452,579,118 |
422,306,942 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
617,288,412 |
845,039,236 |
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
|
Anjum M. Saleem |
|
|
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 20, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Notes |
Rupees |
Rupees |
|
|
| Sales |
|
22 |
