| Crescent Jute Products Limited |
|
|
|
|
|
|
|
|
|
|
| Annual
Report 1999 |
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|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Directors'
Report to the Shareholders |
|
| Chief
Executive's Review |
|
| Pattern
of Share Holding |
|
| Auditors'
Report |
|
| Balance Sheet |
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
|
|
| 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 |
|
|
| Sail Saif Khan |
|
|
(Nominee PICIC) |
|
| Shaukat Shafi |
|
|
| CORPORATE
SECRETARIES: |
|
| Zaheer
A. Shaikh |
|
| Rashid Sadiq |
|
|
| AUDITORS: |
|
| A.
F. Ferguson & Co., |
|
| Chartered
Accountants |
|
|
| REGISTERED
OFFICE: |
|
| 83-Babar Block, |
|
| 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, |
|
| Cotton
Spinning Unit, Jaranwala. |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that 35th Annual General Meeting of the Shareholders of
CRESCENT JUTE PRODUCTS |
|
| LIMITED
will be held on Friday December 31, 1999 at 9.00 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, 1999 |
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| together
with the Directors' and Auditors' Reports thereon. |
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|
|
| 2.
To appoint Auditors for the year 1999-2000 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 December 30, 1999
to January 05, 2000 (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: |
|
|
|
| 83-Babar
Block, New Garden Town, Lahore. |
|
|
|
| Tel:
5881974- 75, Fax No: 5881976 |
|
Rashid Sadiq |
|
| Email:
rashid.sadiq@cressoft.com.pk |
|
Corporate Secretary |
|
| Dated:
December 07, 1999. |
|
|
| Notes: |
|
|
| 1.
A member eligible to attend and vote at this meeting may appoint another
member as his/her proxy to |
|
| attend
and vote instead of him/her. Proxies in order to be effective must be
received by the Company at the |
|
| 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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|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| Your
directors have the pleasure in presenting their 35th Annual Report together
with the Audited accounts of the |
|
| Company
for the year ended 30th June, 1999. |
|
|
| Your
company's operations for the year resulted in a loss of Rupees 132,680,245
resulting in negative EPS Rs. 8.78. |
|
|
| REASONS
FOR INCURRING LOSS |
|
| Higher
cotton prices, continued depletion in the value of rupee, extra depreciation
on revalued assets, inflation and |
|
| acute
shortage of working capital resulting in excessive borrowing and financial
charges thereon are the major |
|
| reasons
for incurring loss for the year. |
|
|
| DEFAULT
IN DEBTS, IF ANY |
|
| Overdue
of First Crescent Modaraba Rupees 4.5 million, Habib Bank Limited Rupees
33.543 million, National |
|
| Development
Finance Corporation Rupees 5.0 million and Pakistan Industrial Credit &
Investment Corporation |
|
| Limited
Rupees 10.108 million are reported in Credit Information Bureau Report as on
30th June, 1999. All the above |
|
| dues
have either been paid or re-scheduled. |
|
|
| THE
MILLENNIUM BUG |
|
| Crescent
Jute Products Limited has addressed the year 2000 compliance issue in
relation to the computer hardware |
|
| and
software. Our hardware and Software in use are year 2000 compliant. |
|
|
| 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. |
|
|
| The
directors thank the Shareholders, Bankers and Customers who continue to
extend their cooperation in days of |
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| our crisis. |
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|
For and on behalf of the Board |
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|
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|
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| Lahore: |
|
(MAZHAR KARIM) |
|
| Dated:
December 07, 1999. |
|
Chief Executive |
|
|
|
|
|
|
| CHIEF
EXECUTIVE'S REVIEW |
|
|
| JUTE UNIT |
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| In
anticipation of lesser demand from Government Procurement Agencies,
Production of Jute bags was curtailed to |
|
| avoid
further increase in financial charges. These agencies purchased 1321.035
bales of jute bags this year |
|
| compared
to 210.334 bales purchased in 1998. Production also suffered due to
availability of raw material disturbed |
|
| due
to shortage of working capital. Production during the year decreased by 31%.
Sales quantity decreased by 26%. |
|
| Sales
in monitory terms decreased by 155 million of which 90% is due to decrease in
quantity and 10% is due to fall |
|
| in
prices. Average price of jute imported increased by 18%. The impact was
doubled due to increase in $ exchange |
|
| rate
that also increased by 18% during the year. |
|
|
| Operating
expenses remained well within control. |
|
|
| COTTON UNIT |
|
| Mills
remained closed for 89 shifts due to non-availability of cotton caused by
shortage of working capital. Production |
|
| decreased
by 5.68%. Sales for the year decreased by 4%. Sales decreased by 12% due to
decrease in quantity and |
|
| increased
by 8% due to improvement in sale rates. As for Cost of Production, Cotton
Purchase rate increased by |
|
| Rupees
4 per Kg. But level of other costs remained the same. |
|
|
| Administrative
Expenses remained at same level. Selling expenses witnessed minor saving. |
|
|
| CONSOLIDATED |
|
| Profit
before financial and other charges decreased from 89.8 million in 1998 to
15.8 million in 1999. On the other |
|
| hand
financial and other charges decreased from 181 million in 1998 to 162 million
in 1999. Loss before tax |
|
| increased
to 126.7 million compared to loss of Rs. 91.29 million in 1998. |
|
|
| THE
WAY FORWARD |
|
| Main
problem of the company lies in shortage of working capital and excessive
charge of financial expenses. A |
|
| number
of measures have been taken and implemented late this year under the
reconstruction plan approved by the |
|
| directors
of the company. Some measures are under implementation. This will help in
reducing the burden of |
|
| financial
charges to a great extent. |
|
|
|
|
|
(MAZHAR KARIM) |
|
| Lahore:
December 07, 1999. |
|
Chief Executive |
|
|
|
|
|
| FORM '34' |
|
| PATTERN
OF HOLDING OF SHARES |
|
| HELD
BY THE SHAREHOLDERS AS AT 30TH JUNE, 1999 |
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|
| No. of |
Shareholding |
Total Shares |
|
|
|
|
| Shareholders |
From |
To |
Held |
|
|
|
|
|
|
|
|
|
| 574 |
1 |
100 |
18972 |
|
|
|
|
| 511 |
101 |
500 |
132396 |
|
|
|
|
| 212 |
501 |
1000 |
148487 |
|
|
|
|
| 214 |
1001 |
5000 |
504904 |
|
|
|
|
| 64 |
5001 |
10000 |
464976 |
|
|
|
|
| 27 |
10001 |
15000 |
337230 |
|
|
|
|
| 11 |
15001 |
20000 |
196132 |
|
|
|
|
| 11 |
20001 |
25000 |
253306 |
|
|
|
|
| 7 |
25001 |
30000 |
199724 |
|
|
|
|
| 9 |
30001 |
35000 |
289491 |
|
|
|
|
| 2 |
35001 |
40000 |
74744 |
|
|
|
|
| 4 |
40001 |
45000 |
167180 |
|
|
|
|
| 2 |
45001 |
50000 |
96901 |
|
|
|
|
| 3 |
50001 |
55000 |
154788 |
|
|
|
|
| 1 |
55001 |
60000 |
55345 |
|
|
|
|
| 3 |
60001 |
65000 |
184877 |
|
|
|
|
| 2 |
65001 |
70000 |
132715 |
|
|
|
|
| 1 |
90001 |
95000 |
92812 |
|
|
|
|
| 1 |
95001 |
100000 |
97152 |
|
|
|
|
| 1 |
145001 |
150000 |
149724 |
|
|
|
|
| 1 |
150001 |
155000 |
151420 |
|
|
|
|
| 2 |
155001 |
160000 |
312335 |
|
|
|
|
| 2 |
200001 |
205000 |
405087 |
|
|
|
|
| 1 |
225001 |
230000 |
225366 |
|
|
|
|
| 1 |
260001 |
265000 |
263366 |
|
|
|
|
| 1 |
275001 |
280000 |
278266 |
|
|
|
|
| 1 |
305001 |
310000 |
309375 |
|
|
|
|
| 1 |
365001 |
370000 |
367224 |
|
|
|
|
| 1 |
535001 |
540000 |
538417 |
|
|
|
|
| 1 |
685001 |
690000 |
686489 |
|
|
|
|
| 1 |
1155001 |
1160000 |
1155660 |
|
|
|
|
| 1 |
1715001 |
1720000 |
1716683 |
|
|
|
|
| 1 |
2150001 |
2155000 |
2154713 |
|
|
|
|
| 1 |
2745001 |
2750000 |
2747211 |
|
|
|
|
| ------------------ |
|
------------------ |
|
|
|
|
| 1676 |
|
15063468 |
|
|
|
| ========== |
|
========== |
|
|
| Categories
of Shareholders |
|
Number |
Shares Held |
Percentage |
|
|
|
|
|
|
|
| Individuals |
|
1622 |
3721480 |
24.705 |
|
|
| investment
Companies |
|
3 |
287472 |
1.908 |
|
|
| insurance
Companies |
|
9 |
726905 |
4.826 |
|
|
| Joint
Stock Companies |
|
22 |
6137040 |
40.741 |
|
|
| Financial
Institutions |
|
12 |
3703787 |
24.588 |
|
|
| Others |
|
8 |
48678 |
3.232 |
|
|
|
|
------------------ |
------------------ |
------------------ |
|
|
| TOTAL |
|
1676 |
15063468 |
100.000 |
|
|
|
|
========== |
========== |
========== |
|
|
| Others |
|
|
|
|
| Abandoned
Property |
|
1 |
1106 |
0.007 |
|
|
| Government
Authorities |
|
1 |
1 |
0.000 |
|
|
| Modarabas |
|
5 |
176302 |
1.171 |
|
|
| Non Resident |
|
1 |
309375 |
2.054 |
|
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
|
8 |
486784 |
3.232 |
|
|
|
|
========== |
========== |
========== |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Crescent Jute Products Limited as
at June 30, 1999 and the related |
|
| profit
and loss account and the cash flow statement, 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 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 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
explanation given to us, the balance |
|
| sheet,
profit and loss account and the cash flow statement, 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 June
30, 1999, and of the |
|
| loss
and cash flows for the year 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. 132.2 million during the year and has
accumulated losses of Rs. 601 million |
|
| as
at June 30, 1999. As of that date the company's current liabilities exceeded
its current assets by Rs. 177 million. |
|
| These
factors raise doubt that the company may not be able to continue as a going
concern. Management's plan in |
|
| regard
to this matter are also discussed in note 2.1 to the accounts. These accounts
do not include any adjustments |
|
| that
might result from the outcome of this uncertainty. |
|
|
| Without
qualifying our opinion, we draw attention to note 20 to the accounts which
includes an amount receivable |
|
| from
an associated company aggregating Rs. 248.5 million. The recoverability of
this amount is dependent on certain |
|
| factors
more fully explained in note 11.1 to the accounts. Pending the outcome of the
matters referred to note 11.1, |
|
| no
provision that might result from the outcome of this uncertainty has been
made in the accounts in respect of |
|
| balance due. |
|
|
| Lahore: |
|
|
A.F. Ferguson & Co., |
|
| December
08, 1999 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
| CAPITAL
AND RESERVES |
|
|
|
| Authorised
capital |
|
|
|
| 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) |
|
|
(600,953,394) |
(468,728,150) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(311,551,130) |
(179,325,886) |
|
| SURPLUS
ON REVALUATION |
|
|
|
|
| OF
FIXED ASSETS |
|
5 |
348,568,550 |
348,568,550 |
|
|
|
|
|
| REDEEMABLE
CAPITAL |
|
|
|
| Long-term
running finances - secured |
|
6 |
35,256,481 |
69,900,612 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
|
|
| TO
FINANCE LEASE |
|
7 |
-- |
118,851 |
|
|
|
|
|
|
| DEBENTURES
AND LONG TERM LOANS |
|
8 |
173,508,191 |
133,256,731 |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of |
|
|
|
| Long-term
running finances |
|
6 |
4,670,000 |
1,800,000 |
|
| Liabilities
against assets subject to finance lease |
|
7 |
118,851 |
5,320,848 |
|
| Debentures
and long-term loans |
|
8 |
46,282,442 |
53,616,651 |
|
| Short-term
running finances |
|
9 |
225,781,437 |
473,734,529 |
|
| Creditors,
accrued and other liabilities |
|
10 |
322,404,414 |
320,017,619 |
|
| Provision
for taxation |
|
-- |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
599,257,144 |
854,489,647 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
11 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
845,039,236 |
1,227,008,505 |
|
|
|
|
|
========== |
========== |
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
| Operating
fixed assets |
|
12 |
418,698,491 |
457,069,738 |
|
| Assets
subject to finance lease |
|
13 |
205,312 |
3,989,358 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
418,903,803 |
461,059,096 |
|
| LONG-TERM
INVESTMENTS |
|
14 |
2,570,000 |
2,144,804 |
|
| LONG-TERM
SECURITY DEPOSITS |
|
|
|
| AND
DEFERRED COSTS |
|
15 |
1,258,491 |
3,448,819 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
16 |
22,995,441 |
27,038,014 |
|
| Stock-in-trade |
|
17 |
72,408,342 |
102,982,142 |
|
| Shod
term investments |
|
18 |
41,145,681 |
291,168,348 |
|
| Trade debts |
|
19 |
7,757,206 |
7,999,750 |
|
| Advances,
deposits, prepayments and other receivables |
20 |
272,803,955 |
325,821,005 |
|
| Cash
and bank balances |
|
21 |
5,196,317 |
5,346,527 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
422,306,942 |
760,355,786 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
845,039,236 |
1,227,008,505 |
|
|
|
|
|
========== |
========== |
|
| The
annexed notes from an integral part of these accounts. |
|
|
|
MAZHAR KARIM |
|
KHALID BASHIR |
|
|
|
Chief Executive |
|
Director |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Sales |
|
22 |
747,720,741 |
917,759,364 |
|
| Cost of Sales |
|
23 |
653,272,809 |
761,166,090 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
94,447,932 |
156,593,274 |
|
|
|
|
| Administration
expenses |
|
24 |
46,319,817 |
42,029,890 |
|
| Selling
and distribution expenses |
|
25 |
17,048,891 |
30,880,155 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
63,368,708 |
72,910,045 |
|
| Operating profit |
|
|
31,079,224 |
83,683,229 |
|
| Other income |
|
27 |
4,684,661 |
6,134,620 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
35,763,885 |
89,817,849 |
|
|
|
|
| Financial
charges |
|
28 |
162,465,216 |
169,643,458 |
|
| Other charges |
|
29 |
-- |
11,463,470 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
162,465,216 |
181,106,928 |
|
|
|
|
| (Loss)
before taxation |
|
|
(126,701,331) |
(91,289,079) |
|
| Taxation |
|
30 |
5,523,913 |
4,600,000 |
|
|
|
|
------------------ |
------------------ |
|
| (Loss)
after taxation |
|
|
(132,225,244) |
(95,889,079) |
|
| Accumulated
(loss) brought forward |
|
|
(468,728,150) |
(372,839,071) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
(loss) carried forward |
|
|
(600,953,394) |
(468,728,150) |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
MAZHAR KARIM |
|
KHALID BASHIR |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
| Cash
inflow/(outflow) from operating activities |
|
|
| Cash
generated from operations |
|
31 |
148,347,795 |
152,155,321 |
|
| Financial
charges paid |
|
|
142,647,885) |
(133,160,872) |
|
| Income
taxes paid |
|
|
(6,680,766) |
(7,955,658) |
|
| Long
term security deposits and deferred costs |
|
|
2,190,328 |
120,812 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
|
1,209,472 |
11,159,603 |
|
|
|
|
|
|
|
| Cash
inflow/(outflow) from investing activities |
|
|
| Fixed
capital expenditure |
|
(1,768,085) |
(3,288,617) |
|
| Proceeds/adjustments
on sale of fixed assets |
|
759,240 |
830,000 |
|
| Proceeds
on sale of investments |
|
250,680,000 |
6,745,000 |
|
| Dividends
received |
|
1,099,983 |
3,097,837 |
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from investing activities |
|
250,771,138 |
7,384,220 |
|
|
|
|
|
| Cash
inflow/(outflow) from financing activities |
|
|
| Net
repayments/adjustments of long term borrowings |
|
1,143,120 |
119,792,019 |
|
| Repayments
of finance leases |
|
|
(5,320,848) |
(7,758,965) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow)/inflow from financing activities |
|
|
(4,177,728) |
112,033,054 |
|
|
|
|
------------------ |
------------------ |
|
| Net
increase in cash and cash equivalents |
|
|
247,802,882 |
130,576,877 |
|
| Cash
and cash equivalents at the beginning of year |
|
(468,388,002) |
(598,964,879) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of year |
|
32 |
(220,585,120) |
(468,388,002) |
|
|
|
|
========== |
========== |
|
|
|
MAZHAR KARIM |
|
KHALID BASHIR |
|
|
Chief Executive |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
| 1.
Legal status and nature of business |
|
| The
company is incorporated in Pakistan and it is listed on the Karachi,
Islamabad and Lahore Stock |
|
| Exchanges.
It is currently engaged in manufacture and sale of jute bags and cotton yarn. |
|
|
| 1.1
Compliance with IAS |
|
|
