| THE BUREWALA TEXTILE MILLS LIMITED |
|
|
|
|
|
|
|
|
| Annual
Report 1997 |
|
|
|
| CONTENTS |
|
| Company
Information |
|
| Ten
Years at a Glance |
|
| Notice
of Meeting |
|
| Directors
Report |
|
| Auditors
Report |
|
| Balance
Sheet |
|
| Profit
& Loss Account |
|
| Cash
Flow Statement |
|
| Notes |
|
|
| Pattern
of Shareholdings |
|
|
|
|
|
|
|
| Company
Information |
|
|
| Chairman |
|
AHMED DAWOOD |
|
|
| Managing Director |
M. HUSSAIN DAWOOD |
|
|
| Directors |
KHWAJA AMANULLAH |
|
|
|
AMIR ABDULLAH KHAN ROKHRI |
|
|
|
TAJ MUHAMMAD KHANZADA |
|
|
D.S.O., M.C.,
Fakhr-e-Kashmir |
|
|
|
SARDAR ALI KHAN |
|
|
|
BRIG (Retd.) DR.
MAZHAR-UL-HAQ |
|
|
Sitara-e-Imtiaz |
|
|
| Company
Secretary |
BASHIR AHMAD ARIF |
|
|
| Auditors |
|
RAHMAN SARFARAZ & CO. |
|
|
|
Chartered Accountants, |
|
|
Nawa-i-Waqt Building, |
|
|
4-Shahrah-e-Fatima
Jinnah, |
|
|
Lahore. |
|
|
| Registered
Office |
403-405, ALFALAH, |
|
|
Shahrah-e-Quaid-e-Azam, |
|
|
Lahore. |
|
|
| Mills |
|
DAWOODABAD |
|
|
|
| Ten
Year at a Glance |
|
|
|
|
|
(Rupees in Thousands) |
|
|
|
1997 |
1996 |
1995 |
1994 |
1993 |
1992 |
1991 |
1990 |
1989 |
1988 |
| Capital
& Reserves |
|
| Paid
u1) capital |
|
73,074 |
73,074 |
73,074 |
73,074 |
73,074 |
73,074 |
37,260 |
37,260 |
37,260 |
37,260 |
| Reserves
and surplus |
259,962 |
247,538 |
250,332 |
241,280 |
258,856 |
252,971 |
159,245 |
141,470 |
115,029 |
81,048 |
| Shareholders
equity |
333,036 |
320,612 |
323,406 |
314,354 |
331,930 |
326,045 |
196,505 |
178,730 |
152,289 |
118,308 |
| Break
up value of |
|
| share
of Rs. 10 |
|
45.58 |
43.87 |
44.26 |
43.02 |
45.42 |
44.62 |
52.74 |
47.97 |
40.87 |
31.75 |
|
| Sales: |
|
|
| Export |
|
- |
- |
6,408 |
7,877 |
22,751 |
45,907 |
56,232 |
86,808 |
80,186 |
59,229 |
| Local |
|
445,896 |
475,912 |
273,137 |
344,448 |
297,053 |
502,953 |
535,658 |
469,772 |
444,962 |
481,369 |
|
445,896 |
475,912 |
279,545 |
352,325 |
319,804 |
548,860 |
591,890 |
556,580 |
525,148 |
540,598 |
|
| Profit |
|
|
| Profit
before taxation |
32,490 |
45,485 |
5,083 |
(18,913) |
25,740 |
60,813 |
70,858 |
68,796 |
82,063 |
68,374 |
| Profit
after taxation |
48,961 |
33,743 |
9,052 |
(17,576) |
16,847 |
44,381 |
43,858 |
48,796 |
60,063 |
42,874 |
|
| Dividend: |
|
|
| Cash % |
|
50 |
50 |
- |
- |
15 |
55 |
70 |
60 |
70 |
45 |
| Amount |
|
36,537 |
36,537 |
- |
- |
10,961 |
40,191 |
26,082 |
22,356 |
26,082 |
16,767 |
|
| Earning
per share |
|
6.70 |
4.61 |
1.24 |
(2.41) |
2.31 |
6.07 |
11.77 |
13.10 |
16.12 |
11.51 |
|
|
| Notice |
|
|
| Notice
is hereby given that the 44th annual general meeting of the shareholders of
the |
|
| Company
will be held on Tuesday 31 March 1998 at 3.00 p.m. in Room Nos. 415-419,
Alfalab |
|
| Building,
Shahrah-e-Quaid-e-Azam, Lahore to transact the following business:- |
|
|
| 1.
Recitation from the Holy Quran. |
|
|
| 2.
To confirm the minutes of the 43rd annual general meeting held on 29th March
1997. |
|
|
| 3.
To receive and adopt the audited accounts of the Company for the year ended
30 |
|
| September
1997 together with directors and auditors' reports thereon. |
|
|
| 4.
To declare dividend. The Directors' have recommended a cash dividend of 50% |
|
| (Rs.
5.00 per ordinary share). |
|
|
| 5.
To appoint auditors and fix their remuneration. |
|
|
| 6.
To transact any other business with the permission of the Chairman. |
|
|
| Lahore:
24 February 1998 |
|
|
| Notes: |
|
|
| 1.
The share transfer books of the Company will remain closed from 20 March 1998
to 31st March 1998 |
|
| (both
days inclusive). |
|
|
| 2.
A member entitled to attend and vote at the meeting may appoint another
member as his/her proxy |
|
| attend
and vote. Votes may be given personally or by proxy or by attorney or in case
of a Corporation |
|
| by
a representative duly authorised. |
|
|
| The
instrument of proxy duly executed should be lodged at the Registered office
of the Company not |
|
| later
than 48 hours before the time of meeting. |
|
|
| 3.
The dividend if approved will be payable to those shareholders whose names
appear in the register |
|
| of
the Company as at 19th March 1998. |
|
|
| 4.
Shareholders are requested to promptly notify the Company any change in their
addresses. |
|
|
|
| Director's
Report |
|
|
| Dear
Shareholders |
|
|
| Assalam-u-Alaikum |
|
|
| Your
directors feel pleasure to present before you the 44th annual report together
with audited |
|
| accounts
of the Company and the auditors report thereon for the year ended 30
September 1997. |
|
| Your
Company has made a net pretax profit of Rs. 32,489,972 after charging all
operational, |
|
| administrative,
financial and selling expenses including depreciation amounting to Rs.
16,791,186 |
|
| and
Workers (Profit) Welfare Fund of Rs. 1,068,638 as against pretax profit of
Rs. 45,484,693 |
|
| in
the preceding year. |
|
|
| Your
Directors have recommended the appropriation of current year's profit as
under: |
|
|
|
Rupees |
|
| Pretax
Profit |
|
32,489,972 |
|
| Provision
for taxation |
|
| current |
- for the year |
|
(7,000,000) |
|
|
- prior years |
|
21,951,508 |
|
| deferred |
|
1,519,956 |
|
|
--------- |
|
| After
tax profit |
|
48,961,436 |
|
| Un-appropriated
profit b/f |
|
2,796,206 |
|
|
--------- |
|
| Profit
available for appropriation |
|
51,757,642 |
|
|
========== |
|
| Appropriation: |
|
| Proposed
Dividend @ 50% |
|
36,537,025 |
|
| Unappropriated
profit |
|
15,220,617 |
|
|
--------- |
|
|
51,757,642 |
|
|
========== |
|
|
| We
are grateful to Almighty Allah Who enabled us to show these results in the
year under |
|
| review.
The previous policy of producing coarse and medium varieties has been changed
and the |
|
| Company
is now concentrating on production of superfine Counts (up to 120) of Yarn
and high |
|
| value
added Fabrics. The market response to our new products is very encouraging. |
|
|
| The
sales revenue for the year is Rs. 445,896,465 as against last year sale of
Rs. 475,912,232. |
|
| The
imposition of Sales Tax by the Government has adversely affected sales.
However, if the |
|
| amount
of Sales Tax levied during the year is taken into account the sales revenue
would be |
|
| Rs.
492,193,185. |
|
|
| The
imposition of 12.50'7o Sales Tax is an intolerable burden for the Industry.
It also |
|
| discourages
value added production and runs contrary to the declared policy of the
Government. |
|
|
| The
Company has earned other income of Rs. 16,336,558 including dividend income
of Rs. 9,242,369. |
|
|
| The
Company undertook implementation of ISO 9002 in September 1996 and has
recently been |
|
| awarded
ISO 9002 Certification which will help in boosting sales. |
|
|
| The
present Auditors Messrs. Rahman Sarfaraz & Co., Chartered Accountants
retire and being' |
|
| eligible
offer themselves for re-appointment. |
|
|
| The
labour - management relations remained cordial throughout the year and your
Directors feel |
|
| pleasure
in expressing their appreciation for the devoted services rendered by the
employees of |
|
| the
Company. |
|
|
|
| Auditor's
Report to the Members |
|
|
| We
have audited the annexed balance sheet of THE BUREWALA TEXTILE MILLS LIMITED |
|
| as
at 30 September 1997 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
purpose 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
explanations given |
|
| to
us, the balance sheet, profit and loss account and the cash flow statement,
together |
|
| with
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 30 September 1997 and of the Profit and
the Cash |
|
| flow
Statement 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. |
|
|
|
|
| Balance
Sheet as at 30 September 1997 |
|
|
| CAPITAL
& LIABILITIES |
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
|
| SHARE
CAPITAL & RESERVES |
|
|
| Authorised |
|
| 15,000,000
ordinary shares of Rs. 10/- each |
|
150,000,000 |
150,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed & fully paid up |
|
| 7,307,405
ordinary shares of Rs. 10/- each |
3 |
73,074,050 |
73,074,050 |
|
|
| RESERVES
& SURPLUS |
|
4 |
259,962,305 |
247,537,894 |
|
|
|
---------- |
---------- |
|
|
333,036,355 |
320,611,944 |
|
|
| LONG
TERM LOANS & DEFERRED LIABILITIES |
|
|
| Loans-
secured |
|
5 |
5,118,708 |
10,237,415 |
|
| Deferred
taxation |
|
|
25,981,408 |
27,501,364 |
|
| Other
deferred liabilities |
|
6 |
11,166,146 |
9,672,723 |
|
|
---------- |
---------- |
|
|
42,266,262 |
47,411,502 |
|
|
| CURRENT
LIABILITIES |
|
|
| Creditors,
provisions & accrued expenses |
7 |
44,115,033 |
45,574,058 |
|
| Provision
for taxation |
|
8 |
18,712,975 |
35,023,635 |
|
| Dividend-
unclaimed |
|
6,253,163 |
5,407,626 |
|
|
- proposed |
|
36,537,025 |
36,537,025 |
|
|
---------- |
---------- |
|
|
105,618,196 |
122,542,344 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
26 |
|
|
---------- |
---------- |
|
|
480,920,813 |
490,565,790 |
|
|
========== |
========== |
|
| The
annexed notes 1 to 26 form an integral part of these accounts. |
|
|
| Lahore:
19 February 1998 |
|
|
|
| PROPERTY
& ASSETS |
|
Note |
1997 |
1996 |
|
|
Rupees |
Rupees |
|
|
| FIXED
ASSETS |
|
| Operating
assets |
|
9 |
159,628,251 |
144,421,358 |
|
| Capital
work in progress |
|
- |
31,198,349 |
|
|
---------- |
---------- |
|
|
159,628,251 |
175,619,707 |
|
|
| INVESTMENTS |
|
|
|
10 |
64,639,262 |
64,639,262 |
|
| LONG
TERM DEPOSITS |
|
1,712,394 |
1,712,840 |
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
11 |
20,586,143 |
23,008,200 |
|
| Stock
in trade |
|
12 |
175,560,642 |
176,522,550 |
|
| Book
debts |
|
13 |
18,133,305 |
3,974,282 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
14 |
9,418,488 |
4,805,469 |
|
| Cash
& bank balances |
|
15 |
31,242,328 |
40,283,480 |
|
|
---------- |
---------- |
|
|
254,940,906 |
248,593,981 |
|
|
---------- |
---------- |
|
|
480,920,813 |
490,565,790 |
|
|
========== |
========== |
|
|
|
| Profit
& Loss Account for the year ended 30 September 1997 |
|
|
|
|
1997 |
|
|
Note |
Ginning |
Textile |
Total |
|
|
Rupees |
Rupees |
Rupees |
|
| Gross
sales |
|
- |
445,896,465 |
445,896,465 |
|
| Brokerage |
|
(228,922) |
(228,922) |
|
|
---------- |
---------- |
---------- |
|
|
|
|
-- |
445,667,543 |
445,667,543 |
|
| NET
SALES |
|
| COST
OF SALES |
|
16 |
2,546,233 |
395,706,264 |
398,252,497 |
|
|
|
|
---------- |
---------- |
---------- |
|
| GROSS
PROFIT / (LOSS) |
|
(2,546,233) |
49,961,279 |
47,415,046 |
|
| OPERATING
EXPENSES |
|
| Administrative |
|
17 |
202,539 |
23,437,184 |
23,639,723 |
|
| Selling
& distribution |
18 |
- |
4,991,457 |
4,991,457 |
|
| Financial |
|
19 |
- |
344,776 |
344,776 |
|
| Depreciation |
|
|
553,977 |
553,977 |
|
| Workers
(profit) participation fund |
- |
1,068,638 |
1,068,638 |
|
| Workers
welfare fund |
|
- |
663,061 |
663,061 |
|
|
---------- |
---------- |
---------- |
|
|
202,539 |
31,059,093 |
31,261,632 |
|
|
| OPERATING
PROFIT/(LOSS) |
|
(2,748,772 |
18,902,186 |
16,153,414 |
|
| Other
Income |
|
20 |
792,807 |
15,543,751 |
16,336,558 |
|
|
---------- |
---------- |
---------- |
|
| PRETAX
PROFIT/(LOSS) |
|
(1,955,965) |
34,445,937 |
32,489,972 |
|
|
========== |
========== |
|
| PROVISION
FOR TAXATION |
|
| Current
- For the year |
|
7,000,000 |
|
|
- Prior years |
|
(21,951,508) |
|
| Deferred |
|
(1,519,956 |
|
|
---------- |
|
|
(16,471,464 |
|
|
---------- |
|
| PROFIT
AFTER TAX |
|
48,961,436 |
|
| Un-appropriated
profit b/f |
|
2,796,206 |
|
|
---------- |
|
|
51,757,642 |
|
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
| Appropriation: |
|
| Proposed
dividend |
|
36,537,025 |
|
|
| Un-appropriated
profit carried to |
|
--------- |
|
| Balance
Sheet |
|
15,220,617 |
|
|
========== |
|
|
|
|
|
|
|
|
1996 |
|
|
|
Ginning |
Textile |
Total |
|
|
Rupees |
Rupees |
Rupees |
|
|
- |
475,912,232 |
475,912,232 |
|
|
- |
(475,986) |
(475,986) |
|
|
--------- |
--------- |
--------- |
|
|
- |
475,436,246 |
475,436,246 |
|
|
2,738,307 |
425,224,399 |
427,962,706 |
|
|
--------- |
--------- |
--------- |
|
|
(2,738,307) |
50,211,847 |
47,473,540 |
|
|
|
297,418 |
20,496,921 |
20,794,339 |
|
|
- |
6,419,819 |
6,419,819 |
|
|
- |
1,295,760 |
1,295,760 |
|
|
- |
628,660 |
628,660 |
|
|
- |
1,031,500 |
1,031,500 |
|
|
- |
928,000 |
928,000 |
|
|
--------- |
--------- |
--------- |
|
|
297,418 |
30,800,660 |
31,098,078 |
|
|
--------- |
--------- |
--------- |
|
|
(3,035,725) |
19,411,187 |
16,375,462 |
|
|
101,074 |
29,008,157 |
29,109,231 |
|
|
--------- |
--------- |
--------- |
|
|
(2,934,651) |
48,419,344 |
45,484,693 |
|
|
========== |
========== |
|
|
8,000,000 |
|
|
-- |
|
|
3,741,626 |
|
|
--------- |
|
|
11,741,626 |
|
|
--------- |
|
|
33,743,067 |
|
|
5,590,164 |
|
|
--------- |
|
|
39,333,231 |
|
|
|
36,537,025 |
|
|
--------- |
|
|
2,796,206 |
|
|
========= |
|
|
|
| Cash
flow Statement for the year ended 30 September 1997 |
|
|
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Net
income after taxation |
|
48,961,436 |
33,743,067 |
|
| Adjustments
for non cash charges |
|
| Depreciation |
|
16,791,186 |
15,108,144 |
|
| Provision
for gratuity |
|
6,500,000 |
2,200,000 |
|
| Deferred
taxation |
|
(1,519,956) |
3,741,626 |
|
| Profit
on sale of fixed assets |
|
(3,499) |
(211) |
|
|
---------- |
---------- |
|
|
21,767,731 |
21,049,559 |
|
| Payment
of gratuity |
|
(5,006,577) |
11,997,663 |
|
|
---------- |
---------- |
|
|
65,722,590 |
42,794,963 |
|
| Cash
provided (used) by working capital |
|
| Stores
& spares |
|
2,422,057 |
2,198,989 |
|
| Stock
in trade |
|
961,908 |
80,468,165 |
|
| Book
debts |
|
(14,159,023) |
(1,894,444) |
|
| Advances,
deposits, prepayments etc. |
|
(4,613,019) |
666,791 |
|
| Creditors,
provisions & accrued expenses |
(1,459,025 |
15,465,625) |
|
| Provision
for taxation |
|
(16,310,660 |
7,159,505 |
|
|
---------- |
---------- |
|
|
32,564,828 |
115,928,344 |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Sales
proceeds of fixed assets |
|
57,704 |
16,216 |
|
| Capital
expenditure |
|
(853,935 |
(69,775) |
|
| Long
term deposits |
|
446 |
- |
|
|
---------- |
---------- |
|
|
(795,785) |
(53,559 |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Long
term loans-suppliers credit |
|
(5,118,707) |
(5,118,707) |
|
| Dividend
paid |
|
(35,691,488) |
(5,615) |
|
|
---------- |
---------- |
|
|
(40,810,195) |
(5,124,322) |
|
|
---------- |
---------- |
|
| Increase/(decrease)
in cash & cash equivalents |
(9,041,152) |
110,750,463 |
|
| Cash
& cash equivalents at the beginning |
|
| of the year |
|
40,253,480 |
(70,466,983) |
|
|
---------- |
---------- |
|
| Cash
& cash equivalents at the end of the year |
31,242,328 |
40,283,480 |
|
|
========== |
========== |
|
|
|
| Notice |
|
|
|
| 1.
COMPANY AND ITS OPERATIONS |
|
|
| The
Burewala Textile Mills Limited is a public limited company listed with stock
exchanges at |
|
| Lahore
and Karachi. The Company is engaged in the manufacture of yarn and cloth and
has also |
|
| ginning
factories. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
| (a)
Accounting convention |
|
|
| The
financial statements are prepared on historical cost convention without any |
|
| adjustment
for inflation or reference to current values. |
|
|
| (b)
Retirement benefits |
|
|
| The
Company operates an unfunded gratuity scheme covering its non-management |
|
| employees
and the provision is made from year to year in the books of account. For |
|
| management
staff a scheme of contributory provident fund is in operation and the trust |
|
| invests
the fund in Defence Saving Certificates. |
|
|
| (c)
Taxation |
|
|
| Provision
for current taxation is based on taxable income at the current rates after |
|
| taking
into account rebates and credits admissible. Adequate provision is also made
for |
|
| deferred
taxation on all major timing differences. |
|
