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CONTENTS
Companys' Information
Notice of Annual General Meeting
Directors' Report
Auditors' Report to the members
Balance Sheet
Profit and Loss Account
Statement of Changes in Equity
Statement of Changes in Financial Position
Notes to the Accounts
Pattern of Shareholding
COMPANYS' INFORMATION
BOARD OF DIRECTORS
1. MR. TAHIR SALEEM CHAUDHRY
2. MR. SHAHID SALEEM CHAUDHRY
3. MRS. NASEEM SALEEM CHAUDHRY
4. MRS. SOBIA SALEEM
5. MR. ABDUL HAQ CHAUDHRY
6. MRS. NOSHEEN SHAHID
7. MR. ASIF JAMIL ( BEL NOMINEE )
8. MR. ABDUL AZIZ CHAUDHRY
9. MR. GHULAM FARID
COMPANY SECRETARY
MR. SYED MADAD ALI SHAH
AUDITORS
M. ATHER & COMPANY
Chartered Accountants
BANKERS
NATIONAL BANK OF PAKISTAN
ASKARI COMMERCIAL BANK LIMITED.
ALLIED BANK OF PAKISTAN LIMITED
REGISTERED OFFICE
33- K.M., SHEIKHUPURA ROAD,
FAISALABAD.
MILLS
33-K.M.,SHEIKHUPURA ROAD,
FAISALABAD.
Notice is hereby given that the 14th Annual General Meeting of the Shareholders of SALEEM
DENIM INDUSTRIES LIMITED will be held at the Registered Office 33- K.M., Sheikhupura
Road Faisalabad, on March 31st, 2001 at 10.00 a.m. to transact the following business:-
1. To confirm the minutes of the 13th Annual General Meeting held on 31st March, 2000.
2. To receive, consider and adopt the Audited Balance Sheet and Profit and Loss Account
of the Company together with the Directors' and Auditors' Report for the year ended
September.30, 2000.
3. To appoint Auditors and to fix their remuneration. The retiring Auditors M/S M. Ather &
Co., Chartered Accountants being eligible offer themselves for reappointment.
4. To transact any other lawful business, with the permission of the chair.
NOTES:
1. The share transfer books of the company will remain closed from March 24th to
March 31st 2001. ( both days inclusive )
Dear Members,
At the occasion of 14th Annual General Meeting of the company the directors are pleased to
present as under the Annual report for the year ended 30th September 2000.
General
Inspite of the best possible efforts of the management the declining trend in the compare/
business continued during the year under review. The problems of shortage of working capital
continued because the short term financing limits of the company could not be renewed by the
banks.
The proposal for the rescheduling and restructuring of long term loans remained undecided by
M/S Bankers Equity Limited. In the circumstances the company could not process its own
fabric and continued with the processing for out side parties, which resulted in to further
decrease in turnover.
The stock of yarn purchased by the company in 1998-99 could not be utilized because of the
lack of demand in the market. The quality of the same deteriorated due to moisture and was
disposed of during the year, there by incurring a loss of Rs. 4.827 million.
Because of the above factors the loss for the year after taxation comes to Rs. 27.316 million.
FINANCIAL RESULTS
Rs. In Million
Sales 8.866
Cost of Sales 14.974
Gross Profit/(Loss) (6.108)
OPERATING EXPENSES
Administrative 2.048
Selling 0.040
------------
2.088
------------
Operating profit/(loss) (8.196)
Other Income 0.044
OTHER CHARGES
Financial 14.28
------------
Net profit / (loss) for the year before taxation (27.263)
Provision for taxation 0.053
------------
Net profit / (loss) for the year after taxation (27.316)
FUTURE PROSPECTS
The management is striving hard to bring the project out of woods, but because of the cold
response given by the concerned banks / Financial Institutions their has been no visible
improvements. We are planning to resolve the problems of working capital from other
available sources, and hope that our proposal with the Bankers Equity Limited will also be
finalized in the near future. This will improve the overall results in the coming year.
AUDITORS
The auditors M/S M. Ather & Co. Chartered Accountants retired and being eligible offer
themselves for reappointment.
(a) in our opinion, proper books of accounts have been kept by the company
as required by the Companies Ordinance, 1984;
(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 accounts and
(ii) the expenditure incurred during the year was for the purpose of the
company's business; and
(iii) the business conducted, investment made and the expenditure. Incurred
during the year were in accordance with the object 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, statement of changes in
equity and cash flow statement 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 September 30, 2000 and of the loss, changes in equity and its 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 ( XVIII of 1980 ).
Without qualifying our opinion, we draw attention to the fact that the company has
incurred accumulated losses of Rs. 205,769,039/- and its current liabilities have
exceeded current assets by Rs. 109,866,750/-. The management is making efforts to
arrange sufficient funds for the company on long term basis in order to enhance working
capital to overcome financial problems. Validity of the" Going Concern" basis used by
the company in preparation of its financial statements is dependent on the prospect of
operating profitability in the future and the availability of adequate working capital.
2000 1999
SHARE CAPITAL Note Rupees Rupees
Authorised
5,000,000 ordinary shares of
Rs. 10/- each 50,000,000 50,000,000
SURPLUS ON REVALUATION OF
FIXED ASSETS 88,454,939 88,454,939
LONG TERM LOANS 3 47,307,293 54,917,170
DEFERRED LIABILITIES
Deferred mark-up 4 42,322,158 52,902,698
Staff retirement gratuity 908,800 792,120
CURRENT LIABILITIES
Current portion of
long term liabilities 5 43,485,773 25,295,356
Short term loan 6 6,188,553 7,007,509
Creditors, accrued and
other liabilities 7 75,247,699 61,681,174
Taxation 8 978,713 1,389,608
----------- -----------
125,900,738 95,373,647
CONTINGENCIES AND
COMMITMENTS 9 -- --
----------- -----------
138,142,889 153,006,030
========== ==========
FIXED CAPITAL
EXPENDITURE
Operating Fixed Assets 10 121,464,411 128,145,385
SECURITY DEPOSITS 644,490 644,490
CURRENT ASSETS
Stores and Spares 4,703,354 4,762,924
Stock-in-Trade 11 9,036,649 15,070,704
Trade debts considered good 137,500 196,113
Advances, Deposits and
prepayments 12 1,977,227 3,896,098
Cash and Bank balances 13 179,258 290,316
----------- -----------
16,033,988 24,216,155
----------- -----------
138,142,889 153,006,030
========== ==========
The annexed notes from 1 to 26 form an integral part of these accounts
Place: Faisalabad.
Dated: Feb 24,2001 CHIEF EXECUTIVE DIRECTOR
2000 1999
Note Rupees Rupees
SALES 14 8,865,618 11,255,995
COST OF SALES 15 14,974,453 20,322,701
GROSS PROFIT/(LOSS) (6.108,835) (9,066,706)
OPERATING EXPENSES
Administrative 2,047,673 2,130,273
Selling and Distribution 40,331 41,726
----------- -----------
2,088,004 2,171,999
----------- -----------
OPERATING PROFIT/(LOSS) (8,196,839) (11,238,705)
OTHER INCOME 17 44,705 2,122
----------- -----------
(8,152,134) (11,236,583)
TRADING INCOME/(LOSS) 18 (4,827,833) --
OTHER CHARGES
Financial 19 14,283,168 14,319,576
----------- -----------
NET PROFIT/(LOSS) FOR THE YEAR BEFORE TAXATION (27,263,135) (25,556,159)
Place: Faisalabad.
Dated: Feb 24,2001 CHIEF EXECUTIVE DIRECTOR
Place: Faisalabad.
Dated: Feb 24,2001 CHIEF EXECUTIVE DIRECTOR
2000 1999
Rupees Rupees
a) CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the year before taxation (27,263,135) (25,556,159)
Depreciation 6,657,905 7,089,646
2.3 Taxation
Current
Provision for current taxation is based on taxable income at current
tax rates after taking into account tax rebates and tax credits
available, if any.
Deferred
The company accounts for deferred taxation on all material timing
differences using the liability method. However, deferred tax to
certain extent is not provided if it can be established with
reasonable probability that these timing differences will not reverse
in the foreseeable future.
2.5 Investments
These are stated at cost.
3.1 These loans have been obtained from M/S Bankers Equity Ltd. The amount
outstanding is payable in 16 half yearly instalments with grace period of two years
starting May 12, 1997. The loan carries mark-up @ 21.535% and is secured against
1st mortgage of all the present and future movable and immovable properties of the
company. However the balances remained unconfirmed/ unreconciled with M/S
Bankers Equity Limited.
3.2 It is interest free. Terms of repayment have not been decided so far. However it is
confirmed by the Directors that repayment would not be demanded within next twelve
months from the balance sheet date.
4 DEFERRED MARK-UP
Opening Balance 66,783,238 66,982,412
Less: Adjusted/Paid during the year -- (199,174)
----------- -----------
66,783,238 66,783,238
Less: Current maturity shown
under current liabilities:
Overdue 13,880,540 1,000,000
Payable within one year 10,850,540 12,880,540
----------- -----------
24,461,080 13,880,540
----------- -----------
42,322,158 52,902,698
========== ==========
4.1 This is secured against 1st mortgage of all the movable and immovable properties of
the company and is repayable in 36 monthly / half yearly instalments starting June
1997. However the balance remained unconfirmed/unreconciled with M/S Bankers
Equity Limited.
2000 1999
Rupees Rupees
5 CURRENT PORTION OF LONG TERM LIABILITIES
Long term loan (Note 3) 19,024,693 11,414,816
Deferred Mark-up (Note4) 24,461,080 13,880,540
----------- -----------
43,485,773 25,295,356
========== ==========
6.1 The cash finance facility of Rs. 5.641 million has been obtained from National Bank
of Pakistan and carry mark-up at the rate of 50 paisas per thousand per day. The
facility is secured by pledge of stock of denim cloth, cotton yarn and chemicals,
second equitable mortgage on present and future assets of the company and
personal guarantees of all the directors of the company.
7.1 The maximum aggregate amount due to associated under taking at the end of any
month during the year was Rs. 10,144,211 (1999 Rs. 11,937,799)
2000 1999
Rupees Rupees
8. TAXATION
Opening balance 1,389,608 2,053,328
Provided during the year 53,360 56,280
----------- -----------
1,442,968 2,109,608
Less: paid during the year 464,255 720,000
----------- -----------
978,713 1,389,608
========== ==========
The Income Tax assessment of the company has been finalized up to accounting year
ended 30.09.1996.
2000 1999
Rupees Rupees
2000 1999
11. STOCK IN TRADE Rupees Rupees
Raw material 1,713,297 7,365,439
Work-in-Process 608,977 585,890
Finished goods 6,714,375 7,119,375
----------- -----------
9,036,649 15,070,704
========== ==========
Finished goods have been valued at net realisable value being lower than the cost.
12.1 The maximum amount outstanding at the end of any month during
the year was Rs. 1,454,782(1999 Rs. 3,241,088)
14. SALES
16.2 Neither Chief Executive nor Directors or their spouses had any
interest in any of the donees.
2000 1999
Rupees Rupees
Chief Executives Chief Executives
Executive Executive
Salary 356,500 294,000 138,000 345,000
----------- ----------- ----------- -----------
356,500 294,000 138,000 345,000
========== ========== ========== ==========
No. of Persons 1 2 1 2
----------- ----------- ----------- -----------
The Chief Executive is provided with the use of a company maintained car and utility
bills at his residence.
2000 1999
Rupees Rupees
24. TRANSACTIONS WITH ASSOCIATED COMPANIES
Sizing Charges
Yarn Sales (at cost) -- 5,560,851
-- 4,220,269
----------- -----------
-- 9,781,120
========== ==========
26. FIGURES
-Have been rounded off to the nearest Rupee.
-Corresponding figures of prior year have been re-arranged where ever necessary, to
facilitate the comparison.
Place: Faisalabad
Dated: Feb. 24, 2001 Chief Executive Director
Categories of Number of
Shareholders Shareholders Shares Held Percentage