| Suhail Jute Mills Limited |
|
|
|
|
|
|
|
| Annual
Report 2001 |
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| CONTENTS |
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| COMPANY
INFORMATION |
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| Notice
of Meeting |
|
| Directors'
Report to the Shareholders |
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| Auditors'
Report to the Members |
|
| Balance Sheet |
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|
| Profit
and Loss Account |
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| Statement
of Cash Flow |
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| Statement
of Change in Equity |
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| Notes
to the Accounts |
|
| Pattern
of Shareholding |
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|
|
| BOARD
OF DIRECTOR |
|
|
| Chairman |
|
| Mian
Farooq Ahmad Shaikh |
|
|
| Managing
Director |
|
| Sohail
Farooq Shaikh |
|
|
| Directors |
|
| Mian
Rashid Ahmed Mussarrat |
|
| Mr.
Muhammad Aslam Hayat Qureshi |
|
| Mr. Azam Jamil |
|
| Mrs.
Sharmeen Azam Jamil |
|
| Mrs.
Saddia Mohsin |
|
|
| Auditors |
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| Messers
Anjum Asim Shahid & Co. |
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| (Chartered
Accountants) |
|
| Jinnah
Avenue, Blue Area, |
|
| Islamabad. |
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|
| Registered
Office |
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| 125-Murree
Road, Rawalpindi. |
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|
| Factory |
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| Kabul
River Railway Station, |
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| Mardan Road, |
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| Nowshera,
N.W.F.P. |
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| NOTICE
OF MEETING |
|
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| Notice
is hereby given that the 20th Annual General Meeting of the |
|
| shareholders
of Suhail Jute Mills Limited will be held at the Registered Office 125 |
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| Murree
Road, Rawalpindi on Monday the 31st day of December, 2001 at 1230 hrs |
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| to
transact the following business:- |
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| ORDINARY
BUSINESS |
|
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| 1.
To confirm the Minutes of 19th Annual General Meeting held on January 01, |
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| 2001. |
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|
|
|
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| 2.
To receive, consider and adopt the Balance Sheet and Profit and Loss |
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| Account
alongwith notes for the year ended 30th June 2001 together with |
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| the
Directors and Auditors report thereon. |
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|
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| 3.
To appoint Auditors for the year 2001-2002 and to fix their remuneration. M/S |
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| Anjum
Asim Shahid & Co., Chartered Accountants have retired and being |
|
| eligible
offer themselves for re-appointment as auditors of the company. |
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|
|
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| 4.
To transact any other business with the permission of the Chair. |
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| SPECIAL
BUSINESS |
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| To
approve the remuneration of the Chief Executive and Working Directors |
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| of the company. |
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|
By Order of the Board |
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| Rawalpindi |
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|
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| Dated:
December 06, 2001 |
|
COMPANY SECRETARY |
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|
|
| NOTE: |
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|
|
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| (1)
A member entitled to attend and vote at the meeting may appoint |
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| an
other member as his/her proxy to attend and vote for him/her. |
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| Proxies
in order to be effective must be received at the Registered |
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| Office
of the Company at least 48 hours before the time of |
|
| meeting. |
|
|
| (2)
Shareholders are requested to notify the company of any change |
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| in their address. |
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|
|
|
| (3)
The share transfer books of the company will remain closed from |
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| 24-12-2001
to 31-12-2001 (Both days inclusive) |
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| STATMENT
U/S 160 OF THE COMPANIES ORDANCE 1984. |
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| Approval
of the remuneration of the Chief Executive and Working |
|
| Directors
is necessary in the General Meeting as per Government of |
|
| Pakistan
SRO No. 572 (I) 82 dated June 16. 1982. |
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|
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| DIRECTOR
REPORT TO THE SHARE HOLDERS |
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|
| DEAR
SHAREHOLDERS |
|
|
| The
directors of the company are pleased to place before you the annual |
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| accounts
and auditors report thereon at the 20th Annual General Meeting of |
|
| Suhail
Jute Mills Ltd. for the year ended 30th June 2001. |
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|
| PERFORMANCE |
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| The
operative profit for the year without depreciation is Rs. 30667 million, |
|
| loss
after charging depreciation on historical cost basis is Rs. 0.537 million and |
|
| on
revaluation increment depreciation will increase the loss by Rs. 3.628 |
|
| million. |
|
|
| The
entire raw material is imported and the continuous decline in |
|
| exchange
parity of the Pak currency has an adverse impact on cost which as |
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| compared
to last year is about 15%. The bulk of the production activity consists |
|
| of
bags, the purchases by the food department and PASSCO were less as |
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| compared
to last year which had a negative impact. Further the input cost of |
|
| utilities
& financing etc. are ever increasing and play an important role to the |
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| input
costs. Inspire of the above odds cost of manufacture remained in check |
|
| and
the closing inventories remained under control. |
|
|
| RELATED
MATTERS |
|
| Your
company's net worth is on sound footing as per prudential |
|
| regulation
parameters. Treatment of increment depreciation to net off with the |
|
| revaluation
surplus reflects more realistic figure of equity which is Rs. 282. 137 |
|
| million. |
|
|
| The
company has been doing business with NBP since 1985 to finance its |
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| working
capital requirements and till date there has been not a single instance |
|
| or
any problem with this finance provided by NBP. In 1996 NBP arbitrarily |
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| forced
a liability on the company to the tune of Rs. 11.139 million which was |
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| later
on enhanced to Rs. 22.467 million on account of L/C opened in 1994 in |
|
| connection
with return to the suppliers of documents being discrepant. For |
|
| unknown
reasons NBP lost the recovery suit filed by the beneficiary bank in |
|
| London.
The company was not a party to suit and has not accepted this |
|
| liability. |
|
|
| In
order to make good its loss arising due to losing the case in London, |
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| the
bank to pressurize the company did not renew its fifteen years old working |
|
| capital
financing and seek to recover it creating an uncalled for and illegal |
|
| financial
crisis in the company resulting in low productivity. |
|
|
| In
spite of the company's best efforts to come of a settlement and have its |
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| working
capital lines restored the bank has not responded in any positive |
|
| manner. |
|
|
| In
brief the case is of "non-observance" of banking norms and
procedures |
|
| including
no action on State Bank circulars on the part of NBP. |
|
|
| However
the company as per its policy without prejudice is making |
|
| efforts
for settlement outside the court. Furthermore, the company has applied |
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| for
rehabilitation and restructuring. |
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|
| GRATUITY |
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| The
company has provided adequate sum as provision for gratuity which |
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| stands
at Rs. 6.693 million after satisfying the gratuity payments during the |
|
| year.
There is no precedent nor any tendency with the employees of the |
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| company
to suppose that the payment of staff gratuity to entire work force |
|
| become
payable at any one time therefore the amount of Rs. 6.693 million in |
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| the
opinion of board of director is enough provision for meeting the |
|
| requirements. |
|
|
| ASSOCIATION
UNDERTAKING |
|
|
| (a)
The sum was advanced before the amendment in section 208 of the |
|
| companies
ordinance 1984 and as per management's point of view the same is |
|
| not
applicable retrospectively on the advance. Furthermore the company has |
|
| reciprocal
arrangements of lending and borrowing with its associated |
|
| undertaking.
However since few years the associated undertaking has turned |
|
| to
a sick unit and is making its best efforts for its revival which may become |
|
| possible
in the next few months hence both companies are meanwhile trying to |
|
| workout
plan for repayment. It may be added that no disbursement of principal |
|
| was
made after the said amendment. |
|
|
| (b)
Regarding joint office reimbursable expenditure as per company's point |
|
| of
view it does not constitute investment as per section 208. However monthly |
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| payments
will be ensured from January alongwith possible reduction on this |
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| account
(Refer Note 14). |
|
|
| Next
years operations depends on Pak Rupee exchange parity and |
|
| Government
procurement policy of gunny bags, electricity tariffs, borrowing |
|
| costs
and sales tax etc. play an important role. If conditions remain stable, |
|
| normal
profit can be expected next year. |
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|
| CIB REPORT |
|
| There
is one very important aspect due to which the bankability of a |
|
| company
suffers on account of alleged bank liabilities which are not only |
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| subject
to litigation but also have adverse effect for full utilization of the |
|
| available
production capacity. |
|
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| The
disputed liabilities although are' subjudice but banks are misusing |
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| the
State Bank of Pakistan CIB reporting a default unilaterally thus concealing |
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| the
facts of the case. |
|
|
| This
misuse is injuriously affecting the productive capacity of the units |
|
| in
spite of the facts that the financial health of the company is sound as per |
|
| parameters
of the prudential regulation for bankibility. Therefore the remedial |
|
| measures
for maximization of the productive potentials and to remove the |
|
| sickness
of the productive units by restoring the availability of the working |
|
| capital
facilities in the light of State Bank of Pakistan circular No. BPRD 14 |
|
| dated
25-10-1994 and No. 9/121.04-95 dated 05-04-1995 will go a long way |
|
| for
revival of the economy which is the need of the day. |
|
|
| AUDITORS |
|
| The
present auditors of the company M/s Anjum Asim Shahid & Co. |
|
| Chartered
Accountants retire and being eligible offer their services for re- |
|
| appointment. |
|
|
| GENERAL |
|
| The
board of directors would like to express their appreciation for the |
|
| efforts
of all officers, staff and workers of the company, which enabled the |
|
| management
to run the company efficiently during the yearn |
|
|
|
|
On behalf of board of directors |
|
|
|
|
|
| Rawalpindi |
|
|
MIAN FAROOQ AHMAD SHAIKH |
|
| December
06, 2001 |
|
CHAIRMAN |
|
|
|
|
| AUDITOR'S
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Suhail Jute Mills Limited |
|
| as
at June 30, 2001 and the related profit and loss account, cash flow |
|
| statement
and the 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, 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 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 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:- |
|
|
| 1.
The aggregate investment of Rs. 45.4 million (2000: Rs. 41.459 million) |
|
| made
in an associated undertaking has exceeded the limit prescribed |
|
|
| under
Section 208 of the Companies Ordinance, 1984 which is not in |
|
|
| lines
with the above provisions of the Ordinance, 1984 (refer note 14). |
|
| More
over, the company has not charged interest aggregating Rs. 1.852 |
|
| million
on the outstanding receivable during the year as required under |
|
| the
law. The refund of this investment is dependent on the financial |
|
|
| ability
and liquidity of the associated company. |
|
|
|
|
|
| 2.
The company has under provided staff gratuity by Rs. 2.0 million (2000: Rs. |
|
| nil).
Had the gratuity been fully provided, the loss for the year would have |
|
| been
higher by the similar amount. |
|
|
|
| Except
for the matters stated above and the extent to which the same may |
|
| effect
the financial statements of the Company, 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 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, 2001 and |
|
| of
the loss, its cash flows and changes in equity 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 under Section 7 of that Ordinance. |
|
|
|
| Place: Islamabad |
|
|
ANJUM ASIM SHAHID & CO. |
|
| December
06, 2001 |
|
CHARTERED ACCOUNTANTS |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2001 |
|
|
| CAPITAL
AND LIABILITIES |
|
NOTE |
2001 |
2000 |
|
|
|
|
(RUPEES) |
(RUPEES) |
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
| SHARE
CAPITAL |
|
|
| Authorised |
|
| 5,000,000
(2000: 5,000,000) ordinary shares |
|
| of Rs. 10 each |
|
|
50,000,000 |
50,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up |
|
3 |
37,450,000 |
37,450,000 |
|
| Revenue
reserves |
|
4 |
10,870,000 |
10,870,000 |
|
| Accumulated
loss |
|
|
(10,526,708) |
(7,086,502) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
37,793,292 |
41,233,498 |
|
| SURPLUS
ON REVALUATION OF |
|
|
| FIXED ASSETS |
|
5 |
244,344,759 |
246,228,869 |
|
|
|
|
|
| LONG
TERM LOAN |
|
6 |
37,000,000 |
43,000,000 |
|
| OBLIGATIONS
UNDER FINANCE LEASE |
7 |
909,867 |
1,569,949 |
|
| DEFERRED
LIABILITIES |
|
8 |
46,007,204 |
46,811,591 |
|
| DEFERRED
TAXATION |
|
|
494,287 |
2,015,310 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
| Current
portion / overdue installment of |
|
|
| redeemable
capital |
|
9 |
8,235,390 |
8,285,390 |
|
| long term loan |
|
6 |
6,000,000 |
4,500,000 |
|
| obligations
under finance lease |
|
7 |
660,087 |
552,046 |
|
| Bank
borrowing claims. |
|
10 |
49,475,217 |
49,475,217 |
|
| Creditors,
accrued and other liabilities |
11 |
41,004,093 |
34,880,691 |
|
| Provision
for taxation |
|
25 |
7,650,469 |
6,856,841 |
|
| Proposed
dividend |
|
|
-- |
2,808,750 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
113,025,256 |
107,358,935 |
|
| CONTINGENCIES
AND COMMITMENTS |
30 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
479,574,665 |
488,218,152 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed notes form an integral of these financial statements. |
|
|
|
|
Mian Farooq Ahmad Shaikh |
|
|
|
CHAIRMAN |
|
|
| PROPERTIES
AND ASSETS |
|
|
|
|
| FIXED
ASSETS - Tangible |
|
| At
cost or reassessed values |
|
12 |
367,611,702 |
369,578,921 |
|
| Less:
Accumulated depreciation |
|
12 |
134,068,927 |
127,284,101 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
233,542,775 |
242,294,820 |
|
|
|
|
|
| REALIZABLE
ASSETS |
|
13 |
33,512,500 |
33,512,500 |
|
|
|
|
|
| DUE
FROM ASSOCIATED |
|
14 |
45,400,433 |
41,459,266 |
|
| UNDERTAKING |
|
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Inventories |
|
15 |
51,394,482 |
49,992,655 |
|
| Trade debtors |
|
16 |
1,003,469 |
4,199,094 |
|
| Advances,
deposits, prepayments |
|
|
| and
other receivables |
|
17 |
36,637,004 |
36,376,624 |
|
| Cash
and bank balances |
|
18 |
78,084,002 |
80,383,193 |
|
|
|
|
------------------ |
------------------ |
|
|
167,118,957 |
170,951,566 |
|
|
------------------ |
------------------ |
|
|
479,574,665 |
488,218,152 |
|
|
========== |
========== |
|
|
|
|
Sohail Farooq Shaikh |
|
|
|
MANAGING DIRECTOR/CHIEF EXECUTIVE |
|
|
|
|
| PROFIT
& LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2001 |
|
|
|
Note |
2001 |
2000 |
|
|
|
(RUPEES) |
(RUPEES) |
|
|
|
|
| SALES - Net |
|
|
19 |
158,725,594 |
169,848,851 |
|
|
|
|
|
|
| COST
OF SALES |
|
20 |
137,951,968 |
141,035,011 |
|
|
|
|
|
------------------ |
------------------ |
|
| Gross Profit |
|
|
|
20,773,626 |
28,813,840 |
|
| OPERATING
EXPENSES |
|
|
|
| Administrative |
|
|
21 |
11,707,373 |
11,594,184 |
|
| Selling
and distribution |
|
22 |
1,753,006 |
2,137,327 |
|
| Gratuity |
|
|
|
500,000 |
635,000 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
13,960,379 |
14,366,512 |
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT BEFORE DEPRECIATION |
|
6,813,247 |
14,447,328 |
|
|
|
|
| Depreciation
for the year: |
|
12 |
7,834,332 |
8,433,383 |
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
(LOSS)/ PROFIT AFTER DEPRECIATION |
(1,021,085) |
6,013,945 |
|
|
|
|
------------------ |
------------------ |
|
| Other income |
|
23 |
7,104,780 |
8,510,968 |
|
| Excess
mark up written back |
|
|
-- |
11,903,755 |
|
| Financial
charges |
|
24 |
(10,251,296) |
(16,194,049) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(3,146,516) |
4,220,674 |
|
| Workers
profit participation fund |
|
|
-- |
211,034 |
|
|
|
------------------ |
------------------ |
|
| NET
(LOSS) /PROFIT BEFORE TAXATION |
|
(4,167,601) |
10,023,585 |
|
|
|
|
| Provision
for taxation |
|
|
|
| -current |
|
25 |
793,628 |
1,414,107 |
|
| -deferred |
|
|
(1,521,023) |
2,015,310 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(727,395) |
3,429,417 |
|
|
|
|
------------------ |
------------------ |
|
| NET
(LOSS) /PROFIT AFTER TAXATION |
|
(3,440,206) |
6,594,168 |
|
| DIVIDENDS |
|
|
-- |
2,808,750 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(3,440,206) |
3,785,418 |
|
|
|
|
|
|
| ACCUMULATED
LOSS BROUGHT FORWARD |
|
(7,086,502) |
(10,871,920) |
|
|
|
|
------------------ |
------------------ |
|
| ACCUMULATED
LOSS CARRIED TO |
|
|
|
| BALANCE
SHEET |
|
|
(10,526,708) |
(7,086,502) |
|
|
|
|
========== |
========== |
|
| Earnings
per share |
|
26 |
(0.92) |
1.76 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
Mian Farooq Ahmad Shaikh |
|
Sohail Farooq Shaikh |
|
|
CHAIRMAN |
|
MANAGING DIRECTOR/CHIEF EXECUTIVE |
|
|
|
|
| STATEMENT
OF CASH FLOW |
|
| FOR
THE YEAR ENDED JUNE 2001 |
|
|
|
|
|
|
2001 |
2000 |
|
|
|
(RUPEES) |
(RUPEES) |
|
| Cash
flow from operating activities |
|
| (Loss)
/ Profit for the year before taxation |
|
(4,167,601) |
10,023,585 |
|
|
|
|
|
|
| Adjustment
for items not involving movement of funds: |
|
| -
Depreciation |
|
7,834,332 |
8,433,383 |
|
| - Gain on disposal of fixed
assets |
|
(1,526,993) |
-- |
|
| - Mark-up accrued on
redeemable capital |
|
-- |
6,156,191 |
|
| - Provision for gratuity |
|
500,000 |
635,000 |
|
|
|
------------------ |
------------------ |
|
|
|
6,807,339 |
15,224,574 |
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
2,639,738 |
25,248,159 |
|
|
|
|
|
| Change
in working capital |
|
| (Increase)
/ decrease in current assets: |
|
| -
Inventories |
|
(1,401,827) |
19,081,020 |
|
| -
Trade debtors |
|
3,195,625 |
(1,877,126) |
|
| - Advances, deposits,
prepayments and |
|
|
|
| other
receivables |
|
(260,380) |
(1,394,509 |
|
| Increase/
(decrease) in current liabilities |
|
|
|
| - Creditors, accrued and
other liabilities |
|
6,123,402 |
(13,385,886) |
|
|
|
------------------ |
------------------ |
|
| Net
changes in working capital |
|
7,656,820 |
2,423,499 |
|
| Gratuity paid |
|
|
(1,672,826) |
(1,197,532) |
|
| Deferred
liabilities - provident fund |
|
368,441 |
16,932 |
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
8,992,173 |
26,491,058 |
|
