| Suhail Jute Mills Limited |
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|
| Annual
Report 1999 |
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| Contents |
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| Board
of Directors |
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| Notice
of Meeting |
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| Directors'
Report to the Shareholders |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Statement
of Cash Flow |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| Board
of Directors |
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| Chairman |
Mian Farooq Ahmad Shaikh |
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| Managing/Director |
Sohail Farooq Shaikh |
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| Director |
Mian Rashid Ahmed
Mussarrat |
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|
Mr. Muhammad Aslam Hayat
Qureshi |
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|
Mr. Azam Jamil |
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|
Mrs. Sharmeen Azam Jamil |
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|
Mrs. Saddia Mohsin |
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| Company Secretary |
Muhammad Nadeem |
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| Auditors |
Messerrs Anjum Asim
Shahid & Co. |
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|
(Chartered Accountants) |
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|
Jinnah Avenue, Blue Area, |
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|
Islamabad. |
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| Registered Office |
125-Murree Road, |
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|
Rawalpindi. |
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| Factory |
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 18th
Annual General Meeting of the |
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| shareholders
of Suhail Jute Mills Limited will be held at the Registered |
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| Office
125 Murree Road, Rawalpindi on Tuesday the 14th day of March, |
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| 2000
at 1230 hrs to transact the fol lowing business :- |
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| 1.
To confirm the Minutes of 17th Annual General Meeting held on |
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| January 02, 1999. |
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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, 1999 together |
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| with
the Directors' and Auditors' report thereon. |
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| 3.
To appoint Auditors for the year 1999-2000 and to fix their remunera- |
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| tion.
M/S Anjum Asim Shahid & Co., Chartered Accountant have |
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| retired
and being eligible offer themselves for re-appointment as Audi- |
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| tors
of the Company. |
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| 4. To transact any other business with the
permission of Chair. |
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|
By Order of the Board |
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| RAWALPINDI |
|
MUHAMMAD NADEEM |
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| Dated:
February 07, 2000 |
COMPANY SECRETARY |
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| NOTE:
(1) A member entitled to attend and vote at the meeting may |
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| appoint an other member as his/her proxy to
attend and vote |
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| for him/her, Proxies in order to be
effective must be received at |
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| the Registered Office of the Company at
least 48 hours before |
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| the time of meeting, |
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| (2)
Shareholders are requested to notify the company of any |
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| change in their address. |
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| (3)
The Share Transfer Books of the company will remain closed. |
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| from 7th March 2000 to 14th March 2000
(Both days inclusive) |
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| DIRECTORS
REPORT TO THE SHARE HOLDERS |
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| DEAR
SHAREHOLDERS |
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|
| The Directors of the Company welcome you
to 18th Annual General |
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| Meeting
of Suhail Jute Mills Ltd and present to you the audited accounts and |
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| the
Auditors report for the year ended 30th June 1999. |
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|
| PERFORMANCE |
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| We
feel pleasure to inform you that this year your company has made an |
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| operating
profit before depreciation of Rs. 10.168 million. Last year profit was |
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| higher
due to the reason of low prices of Raw Jute Internationally etc as was |
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| explained
in previous years report. |
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|
| However the over all lower profit before
tax is due to accrual of Rs.7.5 |
|
| million
for gratuity and also abnormally high provision of depreciation on |
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| basis
revalued assets of the company. We would like to highlight that the |
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| depreciation
if charged on historical cost basis as explained in note 13.3 the |
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| Net
profit will be higher by Rs.3.610 million. |
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|
| Next year operations depends on Pak
Rupees Exchange fluctuation and |
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| the
Govt and its agencies jute goods procurement policy, inputs like electricity |
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| tariffs
borrowing costs and sales tax etc as these factors play an important |
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| role.
If condition remains stable normal profit can be expected in future. |
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| RELATED
MATTERS |
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| Your Company's Net Worth is on sound
footing as per prudential |
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| regulation
parameters |
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|
| National Banks of Pakistan and Habib Bank
Ltd have lodged recovery |
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| suits
against the company which are being contested along with the counter |
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| claims
was explained in detail in previous year report. .However the |
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| compromise
outside the court without prejudice are in process with Habib |
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| Bank
and National Bank of Pakistan. |
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|
| A letter of credit was opened by National
Bank of Pakistan 1994.National |
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| Bank
of Pakistan did not accept the discrepant documents in connection with |
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| letter
of credit opened in 1994.The ship supposed to carry the goods never |
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| docked
nor was destined for Karachi, . For reasons unknown, National Bank of |
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| Pakistan
lost the recovery suits filed by the beneficiary banks in London( the |
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| company
was not a party to the suit).The company has not accepted the |
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| liability
under the Law. |
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| The
Bank in an effort to make good its loss arising due to losing of the case in |
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| London,
the bank to pressurize the company did not renew its fourteen years |
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| old
working capital financing and seek to recover it, resulting in low |
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| productivity
and liquidity crunch. Inspite of the company's best efforts to come |
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| of
a settlement and have its working capital lines restored the bank has not |
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| responded
in to positive manner. |
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| If State Bank of Pakistan can take cognizance
of wrongful practices adopted |
|
| by
the bank the company can be saved from sickness threatened by lack of Working |
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| Capital.
The sickness is being created inspire of the fact that the Balance Sheet |
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| of
the company meets all Prudential Regulation of the credit worthy. |
|
|
| As
regards associated company borrowing/lending, arrangements are on |
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| reciprocal
basis, which were in existence between the associated company and |
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| your
company before the amendment of the ordinance pertaining to associated |
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| company.
However Rs.0.266 million has been received back during the year |
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| inspire
of the serious textile crisis. The associated company has approached for |
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| restructuring/revival
of the industry under the State Bank of Pakistan scheme |
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| and
latest being under the company law in pursuance of the Govt. Policy. |
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|
| DIVIDEND
/ BONUS SHARES |
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| As
regards dividend, since 1996/97 we have been trying to declare dividend / |
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| Bonus
Shares but because of financial institution refusal to give consent. |
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| Further
more we did make request to CLA on 23 12-1996 for removing of the |
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| anomaly
and difficulty coming in our way due to the unrealistic treatment of |
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| depreciation
abnormally high due to the revaluation of assets given in the |
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| Balance
Sheet by the auditors. |
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|
| However
recently the Security and Exchange Commission has taken a rationale |
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| and
realistic step in the matter of deferred tax to its circular no. 16 of 1999 |
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| dated
09-09-1999 the deferred tax case is on similar lines to our request in |
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| connection
with the treatment of depreciation. If the treatment of the |
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| depreciation
on historical cost basis is allowed to be reflected and absorbed in |
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| profit/loss
and the difference of revaluation effect of depreciation is absorbed |
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| in
revaluation surplus would reflect more realistic treatment of depreciation |
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| and
its effect on profit & loss and company thus will be able to give |
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| bonus / dividend. |
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| CIB REPORT |
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| There
is one very important aspect due to which the Bank ability of a company |
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| suffers
on account of alleged bank s liabilities which are not only subject of |
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| litigation
but also have counter claims. |
|
|
| The
disputed liabilities although are sub judice but banks are misusing |
|
| the
State Bank of Pakistan CIB by reporting a default unilaterally thus
concealing the facts of the case. |
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| GENERAL |
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| The
company is taking all possible steps including examination and |
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| upgradation
of technical equipment's and computer hardware to ensure their |
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| Y2K compliance. |
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| The
Board of Directors would like to express their appreciation for the efforts |
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| and
dedication of all officers, staff and workers of the company which enabled |
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| the
management to run the company efficiently during the year. |
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|
| AUDITORS |
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| M/s
Anjum Asim Shahid and Co. Chartered accountants, have retired and are |
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| eligible
to offer themselves for re-appointment as Auditors of the company. |
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|
|
|
On the behalf of Board of
Directors. |
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|
| RAWALPINDI |
|
Mian Farooq Ahmad Shaikh |
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|
|
CHAIRMAN |
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|
|
| AUDITORS'
REPORT TO THE MEMBERS |
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|
| We have audited the annexed balance sheet
of Suhail Jute Mills |
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| Limited
as at June 30, 1999 and the related profit and loss account and the |
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| cash
flow statement together with the notes forming part thereof, for the |
|
| year
then ended and we state that: |
|
|
| 1.
An amount of Rs. 27,128,993 (1998: Rs. 25,511,718) is recoverable |
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| from
an associated company, (Colony) Sarhad Textile Mills Limited |
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| (detailed
in note 15 of the financial statements). The recoverability of |
|
| this
amount is dependent on the financial capability of the associated |
|
| company. |
|
|
| 2.
Out of the total financial obligations of Rs. 148,312,120 (1998: Rs. |
|
| 148,312,120)
pertaining to National Bank of Pakistan and Habib Bank |
|
| Limited,
an amount of Rs. 119,916,511 (1998: Rs. 119,916,511) is |
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| reflected
as "disputed and contingent financial liabilities" in the |
|
| financial
statements (detailed in notes 6 & 8 to the financial |
|
| statements).
The banks have disputed this and have gone into |
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| litigation
with the company and are is yet unresolved. |
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|
| Further,
the company has also forwarded an application for |
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| settlement
of the liabilities under the Debt Settlement Scheme of State |
|
| Bank
of Pakistan. In the absence of confirmation from the Banks as |
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| to
the acceptability of the company's proposal or any other |
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| confirmation
and on being unable to corroborate the underlying |
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| assumptions
of the proposals as conceived and debt related |
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| assertions
as made by the management of the company we are unable |
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| to
confirm the correctness of the accounting treatment and related |
|
| disclosures
given in note 6 to the financial statements. |
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| We
also draw attention to note 29 and except for the effects of the above and |
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| without
further qualifying our opinion we report that we have obtained all |
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| the
information and explanations which to the best of our knowledge and |
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| belief
were necessary for the purposes of our audit and after due verification |
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| thereof,
we report that: |
|
|
| a)
in our opinion, proper books of accounts have been kept by the |
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| company
as required by the Companies Ordinance, 1984; |
|
|
| b)
in our opinion: |
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| i)
the balance sheet, profit and loss account together with the notes |
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| 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 |
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| applied, |
|
|
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| ii)
the expenditure incurred during the year was for the purpose of the |
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| company's
business; and |
|
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| iii)
the business conducted, investments made and the expenditure |
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| incurred
during the year were in accordance with the objects of the |
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| company; |
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|
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| c)
in our opinion, subject to the adjustments, if any, which may be re- |
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| quired
when the above matters are ultimately resolved, and to the best |
|
| of
our information and according to the explanations given to us, the |
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| balance
sheet, profit and loss account and statement of changes in fi- |
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| nancial
position (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 |
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| profit
and of the cash flows for the year then ended; and |
|
|
| d)
in our opinion, no Zakat was deductible at source under the Zakat and |
|
| Ushr
Ordinance, 1980 |
|
|
| Place: Islamabad |
ANJUM ASIM SHAHID &
CO. |
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| February 4, 2000 |
CHARTERED ACCOUNTANTS |
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|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
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|
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|
NOTE |
1999 |
1998 |
|
| SHARE
CAPITAL AND RESERVES |
|
|
(RUPEES) |
(RUPEES) |
|
|
|
|
|
| Share capital |
|
3 |
37,450,000 |
37,450,000 |
|
| Revenue
reserves |
|
4 |
10,870,000 |
10,870,000 |
|
| Accumulated
loss |
|
|
(10,871,920) |
(13,082,986) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
37,448,080 |
35,237,014 |
|
|
|
|
| SURPLUS
ON REVALUATION OF |
|
|
| FIXED ASSETS |
|
5 |
246,228,869 |
246,228,869 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
283,676,949 |
281,465,883 |
|
|
|
|
|
| DISPUTED
AND CONTINGENT |
|
|
|
| FINANCIAL
LIABILITIES |
|
6 |
119,916,511 |
119,916,511 |
|
|
|
|
|
|
| RESERVE
FOR REDEEMABLE CAPITAL |
|
7 |
-- |
-- |
|
| LONG
TERM LOAN |
|
8 |
-- |
-- |
|
|
|
|
|
|
| DEFERRED
LIABILITY- GRATUITY |
|
9 |
8,429,224 |
1,500,000 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current maturity |
|
10 |
14,591,060 |
14,666,934 |
|
| Short
term borrowing from banks |
|
11 |
16,395,609 |
16,482,989 |
|
| Creditors,
accrued and other liabilities |
|
12 |
49,357,641 |
38,239,737 |
|
| Provision
for taxation |
|
|
5,442,734 |
4,392,734 |
|
|
|
|
------------------ |
------------------ |
|
| CONTINGENCIES
& COMMITMENTS |
|
30 |
85,787,044 |
73,782,394 |
|
|
|
|
------------------ |
------------------ |
|
|
497,809,728 |
476,664,788 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
|
Mian Farooq Ahmad Shaikh |
|
|
|
CHAIRMAN |
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
|
(RUPEES) |
(RUPEES) |
|
| FIXED
ASSETS- Tangible |
|
|
|
|
| At
cost or reassessed values |
|
13 |
362,712,654 |
391,777,193 |
|
| Less
· Accumulated depreciation |
|
13 |
118,850,718 |
110,845,328 |
|
|
|
|
------------------ |
------------------ |
|
|
|
243,861,936 |
280,931,865 |
|
|
|
|
|
|
| REALIZABLE
ASSETS |
|
14 |
33,512,500 |
2,550,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
277,374,436 |
283,481,865 |
|
|
|
|
| NON
CURRENT ASSETS |
|
15 |
51,867,966 |
50,050,345 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Inventories |
|
16 |
69,073,675 |
53,539,680 |
|
| Trade debtors |
|
17 |
2,321,968 |
2,522,404 |
|
| Advances,
deposits, prepayments and other |
|
|
|
| receivables |
|
18 |
20,876,318 |
19,394,384 |
|
| Cash
and bank balances |
|
19 |
76,295,365 |
67,676,110 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
168,567,326 |
143,132,578 |
|
|
|
|
------------------ |
------------------ |
|
|
|
497,809,728 |
476,664,788 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
Sohail Farooq Shaikh |
|
|
|
MANAGING DIRECTOR/CHIEF EXECUTIVE |
|
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| AS
AT JUNE 30, 1999 |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
(RUPEES) |
(RUPEES) |
|
|
| SALES |
|
20 |
142,357,169 |
207,654,691 |
|
| COST
OF SALES EXCLUDING DEPRECIATION |
21 |
96,931,631 |
139,787,576 |
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
EXPENSES |
|
|
45,425,538 |
67,867,115 |
|
|
|
| Administrative
expenses |
|
22 |
10,793,056 |
11,016,759 |
|
| Selling
and distribution expenses |
|
23 |
2,212,847 |
3,942,211 |
|
| Financial
expenses |
|
24 |
22,251,312 |
20,289,517 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
35,257,215 |
35,248,487 |
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT BEFORE DEPRECIATION |
|
10,168,323 |
32,618,628 |
|
| Depreciation
for the year |
|
13 |
8,005,390 |
8,054,466 |
|
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT |
|
|
2,162,933 |
24,564,162 |
|
| Other income |
|
|
25 |
8,769,766 |
7,910,385 |
|
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE EXTRAORDINARY AND PRIOR |
10,932,699 |
32,474,547 |
|
| YEARS'
ADJUSTMENTS |
|
|
| Extraordinary
items |
|
-- |
22,647,023 |
|
| Gratuity-accrued |
|
|
9 |
7,500,000 |
-- |
|
| Prior
years' adjustment |
|
-- |
1,582,853 |
|
|
------------------ |
------------------ |
|
|
7,500,000 |
24,229,876 |
|
|
------------------ |
------------------ |
|
| PROFIT
FOR THE PERIOD |
|
3,432,699 |
8,244,671 |
|
| Workers
(profit) participation fund |
|
(171,633) |
(412,234) |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
3,261,066 |
7,832,437 |
|
| Provision
for taxation- Current |
|
(1,050,000) |
(2,797,466) |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
FOR THE YEAR AFTER TAXATION |
|
2,211,066 |
5,034,971 |
|
| UNAPPROPRIATED
LOSS BROUGHT FORWARD |
(13,082,986) |
(18,117,957) |
|
|
|
|
------------------ |
------------------ |
|
| ACCUMULATED
LOSS CARRIED TO BALANCE SHEET |
(10,871,920) |
(13,082,986) |
|
|
------------------ |
------------------ |
|
| Earning
per share (before extraordinary items, prior year |
2.92 |
8.67 |
|
| adjustment
& taxation) |
|
------------------ |
------------------ |
|
|
| Eating
per share (after extraordinary items, prior year |
|
0.59 |
1.34 |
|
| adjustment
& taxation) |
|
------------------ |
------------------ |
|
|
| 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 |
|
| AS
AT JUNE 30, 1999 |
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
(RUPEES) |
(RUPEES) |
|
|
|
|
|
| Cash
flow from operational activities |
|
|
|
| Profit
for the year before taxation |
|
|
3,261,066 |
7,832,437 |
|
| Adjustment
for items not involving movement |
|
|
| of funds: |
|
|
|
| Depreciation |
|
|
8,005,390 |
8,054,466 |
|
| Provision
for gratuity |
|
|
7,500,000 |
1,500,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
15,505,390 |
9,554,000 |
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
18,766,456 |
17,386,903 |
|
| (Increase)/decrease
in current assets: |
|
|
|
|
| Inventories |
|
|
|
(15,533,995) |
(5,316,430) |
|
| Trade debts |
|
|
|
200,436 |
761,199 |
|
| Advances,
deposits, prepayments and |
|
(1,481,934) |
(991,530) |
|
| other
receivables |
|
|
------------------ |
------------------ |
|
|
|
|
(16,815,492) |
(5,546,761) |
|
| Increase/
(decrease) in current liabilities |
|
|
|
| Creditors,
accrued and other liabilities |
|
11,117,903 |
(9,044,897) |
|
|
|
|
|
------------------ |
------------------ |
|
| (Increase)
/ decrease in Non-current assets |
|
11,117,903 |
(9,044,897) |
|
|
|
|
|
|
| Gratuity paid |
|
|
|
|
(570,776) |
-- |
|
| Withholding
tax refundable |
|
|
|
(200,346) |
(233,320) |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(771,122) |
(233,320) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
10,346,781 |
(9,278,217) |
|
|
|
|
| Net
cash from operating activities |
|
(A) |
12,297,745 |
2,561,925 |
|
| Cash
flow from investing activities |
|
|
|
|
| Purchase
of operating fixed assets |
|
|
(1,897,961) |
(1,311,628) |
|
| Due
from associated undertaking |
|
|
(1,617,275) |
(1,778,280) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities |
|
(B) |
(3,515,235) |
(3,089,908) |
|
|
|
|
|
|
|
|
| Cash
flow from financing activities |
|
|
| Adjustment
of long term loan |
|
|
-- |
14,458,989 |
|
| Adjustment
of disputed liabilities |
|
|
-- |
22,647,023 |
|
| Adjustment
of short term borrowings |
|
|
(87,380) |
1,728,806 |
|
| Repayment
of long term loan |
|
|
-- |
(2,000,000) |
|
| Repayment
of redeemable capital |
|
|
(75,874) |
(226,535) |
|
| Proceeds/(payments)
of finance lease |
|
|
-- |
(132,118) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from financing activities |
|
(C) |
(163,254) |
36,476,165 |
