| Thal Jute Mills Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| 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 |
|
| Ten
Years at a Glance |
|
| Distribution
of Revenue |
|
|
|
| BOARD
OF DIRECTORS: |
|
|
| Rafiq M. Habib |
|
Chairman |
|
| Ali S. Habib |
|
|
| Mohamedali
R. Habib |
|
| S.
A. Q. Haqqani |
|
| Mazhar Valjee |
|
Chief Executive |
|
| 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: |
|
| UNIT- 1 |
|
| D.
G. Khan Road, |
|
| Muzaffargarh. |
|
|
| Engineering
Operation: |
|
| UNIT - 2 |
|
| Korangi,
Karachi. |
|
|
|
| NOTICE
OF MEETING |
|
|
| NOTICE
is hereby given that the thirty-fourth Annual General Meeting of the
Shareholders of the |
|
| Company
will be held at Islamic Chamber of Commerce & Industry, ST 2/A, Block-9,
KDA Scheme 5, Clifton, |
|
| Karachi
on Thursday, November 16, 2000 at 10:00 A.M. to transact the following
business:- |
|
|
|
| 1.
To receive and adopt the Audited Accounts for the year ended June 30, 2000
together with the |
|
| Reports
of the Directors and Auditors thereon. |
|
|
|
| 2.
To approve cash dividend @ 50% i.e. Rs. 2.50 per share for the financial year
ended June 30, |
|
| 2000
as recommended by the Board of Directors. |
|
|
| 3.
To appoint Auditors for the year 2000-2001 and fix their remuneration. |
|
|
|
|
By Order of the Board, |
|
|
|
|
|
|
|
(ALI ASGHAR MOTEN) |
|
| Karachi:
September 25, 2000. |
|
Secretary |
|
|
| NOTES: |
|
|
| i)
The Share Transfer Books of the Company will remain closed from Thursday,
November 09, 2000 to Thursday, |
|
| November
16, 2000 (both days inclusive). Shares may be lodged for transfer with our
Registrar M/s. Noble Computer |
|
| Services
(Pvt.) Limited, 14, Banglore Town, Sharea Faisal, 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-FOURTH
REPORT OF THE DIRECTORS |
|
| FOR
THE YEAR ENDED JUNE 30, 2000. |
|
|
| The
Shareholders, |
|
|
| The
Directors of your company 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,
2000. |
|
|
|
|
1999-2000 |
1998-1999 |
|
|
|
Rs. 000's |
Rs. 000's |
|
|
| Sales Revenue |
|
|
1,244,887 |
1,058,215 |
|
| Gross Profit |
|
|
170,506 |
178,243 |
|
|
|
|
|
|
|
| Net
profit before taxation |
|
|
119,898 |
126,339 |
|
| Provision
for taxation |
|
|
45,131 |
43,246 |
|
|
|
|
------------------ |
------------------ |
|
| Net
profit after taxation |
|
|
74,767 |
83,093 |
|
| Unappropriated
profit brought forward |
|
661 |
2,351 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
75,428 |
85,444 |
|
| Appropriations: |
|
|
|
|
| Final
Dividend - proposed @ 50% (1999: 50%) |
|
34,783 |
34,783 |
|
| Transfer
to General Reserve |
|
|
40,000 |
50,000 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
645 |
661 |
|
|
|
|
========== |
========== |
|
|
|
|
| After
having crossed turnover of Rs. 1 billion last year, the sales of the company
Al-Hamdolillah touched Rs. 1.2 billion in |
|
| the
year under review, an increase of 17.6%. The gross profit however declined by
4.3% and net profit before tax by |
|
| 5.1%
due to weaker rupee, increased cost of jute and reduced selling prices. |
|
|
| JUTE
OPERATIONS: |
|
|
|
| Sales Turnover: |
|
| The
sales for the year under review improved from Rs. 577.214 million to Rs.
744.417 million, that is an increase of Rs. |
|
| 167.203
million or 29%. This year Pakistan harvested a record wheat crop of 22
million tons and the Food Department; |
|
| Government
of Punjab procured a record 6.5 million tons of wheat. For their packaging
needs they bought double the |
|
| quantity
of jute sacks that they usually buy. Your management capitalized on the
strong demand and sold a record |
|
| 21,610
tons of jute goods in 1999-2000 opposed to 15,807 tons last year, an increase
of 37%. The selling price per ton |
|
| however
declined as Punjab Government awarded a very low price for jute sacks that
impacted the gross margins |
|
| negatively. |
|
|
| Under
the market expansion program your management met with success in securing an
export order for 80 tons of |
|
| hessian
cloth to Iran valuing Rupees three million. Larger export orders have been
received in the current year. |
|
|
| Production: |
|
| The
production for the year under review improved to 20,440 tons from 16,906 tons
of last years', an increment of 3,534 |
|
| tons
that is 21%. The mills reverted temporarily to round the clock working to
cater to the increased demand for jute |
|
| sacks. |
|
|
| The
refurbishing (revamping) of mills machinery that has yielded high
productivity is near completion. |
|
|
| Cost
of Manufacture: |
|
| Your
management was able to contain cost of manufacture except for raw materials
as the price of raw jute registered |
|
| an
increase in the international market. |
|
|
| Administration
& Selling Expenses: |
|
| The
administrative expenses were maintained close to last year's; the selling
expenses registered an increase in |
|
| travelling,
new export expenses and due to a provision made for doubtful debts. |
|
|
| ENGINEERING
OPERATIONS: |
|
|
|
| Sales Turnover: |
|
| The
turnover of engineering operations registered a marginal increase of 4% from
Rs. 481.001 million to Rs. 500.470 |
|
| million
even though the sales volume of 16,179 units was not very different from last
year's. The marginal increase in |
|
| value
represents adjustment in price due to weakening of rupee and sale of some
wiring harnesses towards the end of |
|
| the year. |
|
|
| You
will be happy to know that your Company crossed the 50,000 units cumulative
sales mark since start-up of |
|
| operation
in the year under review. |
|
|
| Cost
of Manufacture: |
|
| The
cost of manufacturing increased from Rs. 395.704 million to Rs. 429.666
million that is an increase of Rs. 33.962 |
|
| million
due to depreciation on plant and machinery of the heat exchanger and wire
harness, cost of wire harness |
|
| operations
and provision for technical fee to Furukawa, Japan. |
|
|
| Administration
& Selling Expenses: |
|
| The
administration and selling expenses remained in check. However to enhance
awareness in the market, increased |
|
| advertisement
and publicity campaigns as free checkup etc. were undertaken. A Denso aircon
Centre has been |
|
| established
also in Lahore and a Denso Club has been formed. These activities have
naturally increased the costs |
|
| under
relevant heads. |
|
|
| OTHER
INCOME: |
|
| Other
income declined from Rs. 18.232 million to Rs. 13.876 million due to
reduction in rental income. The building that |
|
| was
earlier rented out to tenants is now being put to productive use by the
Engineering Division for the manufacture of |
|
| wire harness. |
|
|
| FINANCIAL
EXPENSES: |
|
| The
financial expenses during the year under review reduced substantially from
Rs. 16.528 million to Rs. 6.333 million |
|
| i.e.
Rs. 10.195 million due to diversified and larger sales of jute goods
throughout the year coupled with prompt |
|
| collection
of sales receivables and downward revision of markup rates. |
|
|
| FUTURE
PROSPECTS: |
|
|
|
| Jute: |
|
| The
sales pattern of jute sacks is undergoing a change this year. There being no
need for import of wheat the MINFAL |
|
| will
have no demand for jute sacks. The Provincial Government and PASSCO are
however expected to procure larger |
|
| volumes
to give support to the anticipated larger wheat crop. |
|
|
| The
experiment of using Woven Polypropylene (WPP) bags carried out by the
Governments of Balochistan and Punjab |
|
| Food
Departments proved a hopeless failure, in fact a disaster in case of
Balochistan. |
|
|
| The
Government has entered into agreements to export surplus wheat to Afghanistan
and Iran Governments and will |
|
| require
new sacks for packing the wheat when the sales materialize. |
|
|
| It
is hoped that the resultant demand due to above factors will makeup for the
absence of demand for packing of |
|
| imported wheat. |
|
|
| Prices
of Raw Jute are erratic this year and the continuous weakening of the rupee
will only make it dearer. |
|
|
| Export
of large volumes of jute goods mainly to Iran is a possibility. Some
financial assistance from the Government of |
|
| Pakistan
can make it remunerative and attractive for the industry. |
|
|
| Engineering
Division: |
|
| Changes
in the car market are happening with new models and new entrants in the
field. Your Company has begun |
|
| supplies
of airconditioners and wiring harness for Daihatsu Cuore, which hopefully
will more than compensate for the |
|
| decline
in some other models. |
|
|
| The
Government is cooperating with the industry in implementing the Trade Related
Investment Measures (TRIMS) |
|
| under WTO. |
|
|
| Your
Company has in the meantime invested in condenser and
evaporator-manufacturing facilities to achieve the |
|
| mandated
52% local content and will invest further in tube bending facilities required
for the said condensers & |
|
| evaporators.
This will help in controlling costs better and strengthening us whenever
TRIMS comes into force. We are |
|
| also
working towards finding new clients for our products and view the forthcoming
year with a great deal of optimism. |
|
|
| AUDITORS: |
|
| The
present auditors of the Company Messers Hyder Bhimji and Company, Chartered
Accountants retire and being |
|
| eligible
offer their services for re-appointment. |
|
|
| PATTERN
OF SHAREHOLDINGS: |
|
| The
pattern of shareholdings as at June 30, 2000 is attached to this report. |
|
|
| APPRECIATION: |
|
| The
Board places on record its appreciation of 'Allah's Blessings' and of the
hard work put in by all team members of the |
|
| company
in bringing home such consistent excellent performance. |
|
|
|
|
On behalf of the Board |
|
|
|
|
|
|
|
MAZHAR VALJEE |
|
| Karachi,
September 25, 2000. |
|
Chief Executive |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of THAL JUTE MILLS 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 purpose 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, 1984. 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. An audit
also includes |
|
| assessing
the accounting policies and significant estimates made by 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 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 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 opinions 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 flows and changes in equity
for the year then |
|
| ended; and |
|
|
| d)
in our opinion, Zakat deductible at source, under Zakat and Ushr Ordinance,
1980 (XVIII of 1980), |
|
| was
deducted by the company and deposited into the Central Zakat Fund established
under |
|
| section
7 of that Ordinance. |
|
|
|
|
|
|
HYDER BHIMJI & CO. |
|
| Karachi:
September 25, 2000. |
|
Chartered Accountants |
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
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 |
220,000 |
180,000 |
|
| Unappropriated Profit |
|
|
645 |
661 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
290,211 |
250,227 |
|
| LONG
TERM LOANS |
|
5 |
6,500 |
-- |
|
| LIABILITY
AGAINST ASSETS SUBJECT |
|
|
|
| TO
FINANCE LEASE |
|
6 |
2,244 |
-- |
|
| DEFERRED
LIABILITIES |
|
7 |
24,564 |
21,739 |
|
|
|
|
|
| CURRENT
LIABILITIES: |
|
|
|
| Current
Maturity of Long Term Liabilities |
8 |
6,964 |
-- |
|
| Short
Term Borrowings |
|
9 |
51,680 |
15,726 |
|
| Creditors,
Accrued and Other Liabilities |
10 |
255,282 |
181,384 |
|
| Taxation |
|
|
43,732 |
44,512 |
|
| Dividend |
|
|
34,783 |
34,783 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
392,441 |
276,405 |
|
| CONTINGENCIES
& COMMITMENTS |
11 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
715,960 |
548,371 |
|
|
|
|
========== |
========== |
|
|
| Karachi:
September 25, 2000. |
|
|
|
|
|
|
| OPERATING
ASSETS |
|
12 |
126,393 |
90,459 |
|
| LONG
TERM INVESTMENTS |
|
13 |
23,122 |
23,854 |
|
|
|
|
| LONG
TERM LOANS, ADVANCES |
|
|
| AND
DEPOSITS |
|
14 |
926 |
1,290 |
|
|
|
|
|
| CURRENT
ASSETS: |
|
|
|
| Stores,
Spares and Loose Tools |
|
15 |
31,534 |
294,123 |
|
| Stock-in-Trade |
|
16 |
172,975 |
182,655 |
|
| Trade Debts |
|
17 |
109,256 |
103,585 |
|
| Short
Term Investments |
|
18 |
168,800 |
72,400 |
|
| Advances,
Deposits, Prepayments |
|
|
| and
Other Receivables |
|
19 |
68,073 |
32,968 |
|
| Cash
and Bank Balances |
|
20 |
14,881 |
11,737 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
565,519 |
432,768 |
|
|
------------------ |
------------------ |
|
|
|
715,960 |
548,371 |
|
|
|
========== |
========== |
|
|
| Note:
The annexed notes form an integral part of these financial statements. |
|
|
|
|
|
Mazhar Valjee |
|
Sohail P. Ahmed |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
Note |
2000 |
1999 |
|
|
No. |
Rs. 000's |
Rs. 000's |
|
|
| Sales |
|
21 |
1,244,887 |
1,058,215 |
|
| Cost of Sales |
|
22 |
1,074,381 |
879,972 |
|
|
------------------ |
------------------ |
|
| GROSS
PROFIT |
|
170,506 |
178,243 |
|
|
------------------ |
------------------ |
|
| Administrative
Expenses |
|
23 |
34,035 |
34,649 |
|
| Selling
Expenses |
|
24 |
15,040 |
9,459 |
|
|
------------------ |
------------------ |
|
|
|
|
49,075 |
44,108 |
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT |
|
121,431 |
134,135 |
|
|
|
|
|
|
|
| Other Income |
|
25 |
(13,876) |
(18,232) |
|
| Financial Expenses |
|
26 |
6,333 |
16,528 |
|
| Other
Charges |
|
27 |
9,076 |
9,500 |
|
|
|
------------------ |
------------------ |
|
|
|
|
1,533 |
7,796 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
|
119,898 |
126,339 |
|
|
|
|
|
|
| Provision
for Taxation |
|
|
|
| Current |
|
41,548 |
42,703 |
|
| Prior years |
|
(89) |
1,978 |
|
| Deferred |
|
|
3,672 |
(1,435) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
45,131 |
43,246 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
AFTER TAXATION |
|
|
74,767 |
83,093 |
|
| Unappropriated
Profit Brought Forward |
|
661 |
2,351 |
|
|
|
|
------------------ |
------------------ |
|
|
|
75,428 |
85,444 |
|
| Appropriations |
|
| Final
Dividend @ 50% (1999: 50%) |
|
34,783 |
34,783 |
|
| Transfer
to General Reserve |
|
|
40,000 |
50,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
74,783 |
84,783 |
|
|
------------------ |
------------------ |
|
| UNAPPROPRIATED PROFIT CARRIED
FORWARD |
645 |
661 |
|
|
|
|
========== |
========== |
|
| Earning
per share |
|
28 |
5.37 |
5.97 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| Note:
The annexed notes form an integral part of these financial statements. |
|
|
|
Mazhar Valjee |
|
|
Sohail P. Ahmed |
|
|
Chief Executive |
|
|
Director |
|
|
| Karachi:
September 25, 2000. |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION (CASH FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
|
Rs. 000's |
Rs. 000's |
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES: |
|
| Profit
before Taxation |
|
119,898 |
126,339 |
|
|
| Adjustments
for: |
|
| Depreciation |
|
|
27,934 |
16,024 |
|
| Financial
Charges |
|
|
6,333 |
16,528 |
|
| Gratuity |
|
|
353 |
1,331 |
|
| Provision for Doubtful Debts |
|
|
3,093 |
-- |
|
| Provision
for Diminution in value of Investment |
|
18 |
-- |
|
| Loss on Sale of Investment |
|
|
207 |
-- |
|
| Profit
on Sale of Fixed Assets |
|
|
(263) |
(353) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
37,675 |
33,530 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
Profit before Working Capital changes |
|
157,573 |
159,869 |
|
|
|
|
| Changes
in Working Capital: |
|
| (Increase)/Decrease
in Current Assets: |
|
| Stores,
Spares and Loose Tools |
|
|
(2,111) |
1,911 |
|
| Stock-in-Trade |
|
|
|
9,680 |
(52,094) |
|
| Trade
Debts (Unsecured Considered Good) |
|
(8,764) |
(32,198) |
|
| Advances,
Deposits, Prepayments and Other Receivables |
(35,139) |
2,556 |
|
| Increase/(Decrease)
in Current Liabilities: |
|
|
|
| Creditors,
Accrued and Other Liabilities |
|
75,534 |
(38,472) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
39,200 |
(118,297) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
196,773 |
41,572 |
|
|
|
|
| Financial
Charges paid |
|
(8,536) |
(11,881) |
|
| Dividend paid |
|
|
(34,216) |
(10,435) |
|
| Gratuity
paid |
|
|
(1,201) |
(1,555) |
|
| Income tax paid |
|
|
(42,239) |
(38,265) |
|
|
------------------ |
------------------ |
|
| Net
cash from/(used in)operating activities (A) |
|
110,581 |
(62,136) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Fixed
Capital Expenditure |
|
|
(64,932) |
(7,346) |
|
| Long
Term Loans, Advances and Deposits |
|
398 |
664 |
|
| Proceed
from disposal of Assets |
|
|
1,327 |
4,701 |
|
| Proceed
from Sale of Investment |
|
|
508 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities (B) |
|
(62,699) |
