KARACHI, Feb 20: In spite of a huge accumulated deficit of Rs217.4 million on the balance sheet, a cash dividend at 5 per cent was paid by the company to the shareholders for 2001. Financial year 2002 has again gone blank. The company is scheduled to hold its 37th annual general meeting on Feb 27, at the company’s mills premises in Karachi.

For the year ended September 30, the company posted a profit, which was the third consecutive year since the company emerged from the red. But the pretax profit for the year which amounted to Rs13 million, was 68 per cent lower than before tax profit of Rs41 million the previous year. Operating profit declined by 22.7 per cent to Rs92 million, from Rs119.4 million, which represented drop of operating margin to 8.6 per cent, from 11.6 per cent.

Sales, in terms of value, for the year ended September 30, 2002 increased 4.8 per cent to Rs1,074.5 million, from Rs1,025.4 million the year ago. In the aggregate sales, exports constituted Rs839.6 million, showing a 5 per cent growth from Rs800 million the earlier year. Exports figured at 78 per cent of the total sales. Chairman Mohammad Farooq Sumar said in his report that the increase of 5 per cent in export sales “was not commensurate with the actual performance of the company as the increase in revenues had been eroded by the unnecessary strength of the rupee”. The company said it had been acknowledged as the largest exporter from Pakistan to France for the year 2001. It also claimed that amongst all exporters of bedlinen to the European Union, the company had obtained the highest price on the basis of US dollars obtained for every kilogram of products exported ($ per kg.)

As usual there are several tough statements in the chairman’s report, which include: “The Export Promotion Bureau is nothing but merely a slave of the Commerce Ministry. There has to be a massive change in our structure”. He suggests that a separate Export Division be created within the Commerce Ministry just like there was an Economic Affairs Division within the Finance Ministry.

Paid-up capital of Mohammad Farooq Textile Mills Limited stood at Rs188.9 million. Including the surplus on revaluation of fixed assets amounting to Rs255.7 million, break-up value of the share worked out at Rs14.64; the recent market price is at about 60 per cent discount to its par value. Pattern of shareholding at end-September 2002 showed that associated companies, undertakings and related parties (M/S Textile Management (Pvt) Limited) held 35.8 per cent shares in the company; NIT and ICP together had stake of 25.12 per cent; directors, CEO & their spouse and minor children held 11 per cent shares. A total of 2,163 individuals, had holdings of 18.3 per cent in the company equity.

The production details were that the company had 12,584 spindles available for production with the capacity to produce 2.3 million kgs of yarn. Actual production of yarn (20 counts) stood at 2.6 million during the year under review. Plant capacity of fabrics was 16.5 million sq.mt, which was utilized to the optimum.

The company held Rs1.2 billion in total assets at end-September 2002.

Chairman Mohammad Farooq Sumar makes interesting statement in regard to the country’s exports. He observes that there were lot of headlines in the newspapers these days regarding a 15 per cent increase in export during the current financial year and that we may reach the target of $10 billion exports. Sumar says: “May I remind you that this target was set for the year 1993-94 and it has taken us 10 years to achieve it! To my mind, it is nothing but a failure that a country of 140 million people (albeit largely uneducated) blessed with over 10 million bales of cotton per annum and fertile land with adequate natural resources, exports only $10 billion worth of goods per annum; sells its goods in the export market at the cheapest prices in the world; has the worst reputation for product quality and reliability; is considered one of the poorest in the world, who until the blessing of 9/11, could not muster enough foreign exchange in its Central Bank for more than 3 months’ imports”.