| LAWRENCEPUR WOOLLEN & TEXTILE MILLS LIMITED |
|
|
|
|
|
|
| ANNUAL
REPORT 1997 |
|
|
| Contents |
|
|
| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Directors'
Report |
|
| Auditors'
Report to the Members' |
|
| Balance
Sheet |
|
| Profit
& Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholdings |
|
|
| Company
Information |
|
|
| Chairman: |
|
| AHMED
DAWOOD |
|
|
| Directors: |
|
| KHAN
AMIR ABDULLAH KHAN ROKHRI |
|
| TAJ
MOHAMMAD KHANZADA D.S.O.M.C (FAKHAR-E-KASHMIR) |
|
| KHWAJA
AMANULLAH |
|
| GUL
HAMEED KHAN ROKHRI |
|
| SARDAR
ALl KHAN |
|
|
| Managing
Director: |
|
| MUHAMMAD
HUSSAIN DAWOOD |
|
|
| Company
Secretary: |
|
| MUSHTAQ
ALl KHAN |
|
|
| Auditors: |
|
| M.
HUSSAIN CHAUDHURY & CO. |
|
| 25-E,
Main Market Gulberg II |
|
| Lahore. |
|
|
| Bankers: |
|
| HABIB
BANK LIMITED |
|
| NATIONAL
BANK OF PAKISTAN |
|
| ASKARI
COMMERCIAL BANK LTD. |
|
|
| Registered
Office: |
|
| 423-424,
ALFALAH, |
|
| SHAHRAH-E-QUAID-E-AZAM, |
|
| LAHORE |
|
| (Phones:
6301759- 6301760) |
|
|
| Head
Office: |
|
| 35-A,
Shahrah-e-Abdul Hameed Bin Badees |
|
| (Empress
Road) Lahore. |
|
| (Phones:
6301601 - 6301607) |
|
|
| Mills: |
|
| DAWOODPUR, |
|
| DISTRICT
ATTOCK |
|
| (Phones:
(0597) 641074-76) |
|
|
| Notice
of Annual General Meeting |
|
|
| Notice
is hereby given that 37th Ordinary General Meeting of the Shareholders shall
be held |
|
| on
Friday the 26th December, 1997 at 11.30 a.m. on 4th Floor, Alfalah Building,
Shahrah-e-Quaid- |
|
| e-Azam
Lahore for the purpose of transacting the following business:- |
|
|
| 1.
Recitation from the Holy Quran and its translation in Urdu. |
|
|
| 2.
To confirm the minutes of the 36th Annual General Meeting. |
|
|
| 3.
To receive and adopt the Accounts for the year ending 30th June 1997 and
Reports of |
|
| Directors
and Auditors thereon. |
|
|
| 4.
To declare dividend. |
|
|
| 5.
To appoint Auditors for the year 1997-98 and to fix their remunerations. M/s.
M. Hussain |
|
| Chaudhury
& Company the present Auditors of the Company retire at this Annual
General |
|
| Meeting
and offer themselves for re-appointment. |
|
|
| 6.
To transact any other business that may be brought forward with the
permission of the |
|
| Chairman. |
|
|
| The
Share Transfer Books of the Company shall remain closed from 19th December,
1997 to |
|
| 26th
December, 1997 (both days inclusive). |
|
|
| NOTES: |
|
|
| 1.
Members unable to attend the General Meeting may send the Forms of Proxy duly
stamped, |
|
| signed
and attested to the Company so as to reach the Registered Office of the
Company not |
|
| later
than 48 hours before the time of the meeting. |
|
|
| 2.
Transfers received in order at the Registered Office of the Company by the
18th December, |
|
| 1997
shall be in time for payment of dividend to the transferees. |
|
|
| 3.
Shareholders are requested to promptly notify the Company of any change in
their |
|
| addresses. |
|
|
| Directors'
Report |
|
|
| Your
Directors have pleasure in presenting the 37th Annual Report alongwith the
audited |
|
| accounts
of the Company for the year ending 30th June, 1997 and the Auditors' Report
thereon. |
|
|
| During
the year under report your Company earned e.. Pre-tax Profit of Rs.
56,212,508 after |
|
| providing
for all the operating, administrative and financial expenses including Rs.
17,044,318 as |
|
| depreciation
adding thereto a sum of Rs. 990,958 being the unappropriated amount of last
year's |
|
| profit,
the total comes to Rs. 66,203,466. |
|
|
| Your
Directors recommended the appropriation of the profits as under: |
|
| Provision
for taxation |
|
13,000,000 |
|
| Dividend
on ordinary shares @ Rs. 2.25 per share |
|
| of
Rs. 10.00 |
|
11,299,988 |
|
|
| Dividend
on cumulative redeemable preference |
|
| shares @ 9% |
|
2,336,400 |
|
|
| Un-appropriated
profit carried forward |
|
39,567,078 |
|
|
---------- |
|
|
66,203,466 |
|
|
========== |
|
| By
the grace of Almighty Allah, your Company, inspite of depressed conditions in
the country |
|
| made
a significant progress as is evident from the operating results. The gross
profit of the |
|
| Company
rose to a healthy figure of Rs. 34,040,272 during the year under review, as
compared to |
|
| a
figure of Rs. 4,847,300 in the previous year. The Management has accordingly
decided to pass |
|
| on
the benefit of higher profits to the Shareholders by recommending the
dividend @.22.5% as |
|
| compared
to 10% last year. |
|
|
| As
mentioned in the last year's report the local market is still flooded with
smuggled goods. |
|
| Although
the quality of our products is superior to most of the foreign varieties, yet
it takes a great |
|
| deal
of marketing efforts. |
|
|
| The
improved results of the year under review were made possible in large measure
by the |
|
| extraordinary
marketing efforts of the Management. Nevertheless, it is imperative that the |
|
| government
must do all it can to arrest the growing menace of smuggling if the Company
is to |
|
| achieve
its true potential. |
|
|
| During
the year, relations between the Management and the Employees remained
cordial. |
|
| Your
Directors wish to place on record their appreciation for the hard work and
devotion to duty by |
|
| all
cadres of employees. |
|
|
| The
Company's present Auditors M/s. M. Hussain Chaudhury & Company retire and
being |
|
| eligible
offer themselves for reappointment. |
|
|
| Auditor's
Report to the Members |
|
|
| We
have audited the annexed balance sheet of LAWRENCEPUR WOOLLEN & TEXTILE |
|
| MILLS
LIMITED as at the 30th June, 1997 and the related profit and loss account and
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 & 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 the 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 cash flow statement, |
|
| together
with the notes forming part thereof, give the information require, d 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 30th June 1997 and of the
profit and |
|
| the
changes in financial position 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 established |
|
| under
Section 7 of the Ordinance. |
|
|
| Balance
Sheet ,as at |
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
| CAPITAL
AND LIABILITIES |
|
|
| SHARE
CAPITAL & RESERVES |
|
|
| Authorised: |
|
|
| 7000000
ordinary shares of Rs. 10 each |
|
70,000,000 |
70,000,000 |
|
| 30000
cumulative redeemable preference |
|
| shares
of Rs. 1000 each |
|
30,000,000 |
30,000,000 |
|
|
---------- |
---------- |
|
|
100,000,000 |
100,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed & fully paid up: |
|
|
| 5022217
ordinary shares of Rs. 10 each |
2 |
50,222,170 |
50,222,170 |
|
| 25960
9% cumulative redeemable |
|
| preference
shares of Rs. 1000 each |
|
25,960,000 |
25,960,000 |
|
|
| Reserves
and surplus |
|
| Reserves |
|
3 |
104,543,613 |
104,543,613 |
|
| Un-appropriated
profit |
|
39,567,078 |
9,990,958 |
|
|
---------- |
---------- |
|
|
220,292,861 |
190,716,741 |
|
| DEFERRED
LIABILITIES |
|
| Deferred
taxation |
|
4 |
6,500,000 |
8,500,000 |
|
| Provision
for gratuity |
|
5 |
38,814,631 |
33,269,034 |
|
|
---------- |
---------- |
|
|
45,314,631 |
41,769,034 |
|
| CURRENT
LIABILITIES |
|
|
| Bank
Overdrafts-secured |
|
6 |
16,925,209 |
138,459,038 |
|
| Creditors,
accrued charges and |
|
|
|
| other
liabilities |
|
7 |
45,080,113 |
44,249,083 |
|
| Provision
for Taxation |
|
8 |
14,340,578 |
1,815,429 |
|
| Proposed
dividend on ordinary shares |
|
11,299,988 |
5,022,217 |
|
| Proposed
dividend on ;reference shares |
|
2,336,400 |
2,336,400 |
|
|
|
---------- |
---------- |
|
|
|
89,982,288 |
191,882,167 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
9 |
- |
- |
|
|
|
---------- |
---------- |
|
|
|
355,589,780 |
424:367,942 |
|
|
========== |
========== |
|
|
|
|
| Note:
The annexed notes form an integral part of these accounts |
|
| Auditor's
Report: To the members (Annexed) |
|
| Lahore:
November 19, 1997 |
|
|
| 30th
June, 1997 |
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
| PROPERTY
AND ASSETS |
|
|
| FIXED
ASSETS |
|
| At
cost less depreciation |
|
10 |
79,466,589 |
98,402,183 |
|
| INVESTMENTS
at cost |
|
11 |
6,000 |
6,000 |
|
| CURRENT
ASSETS |
|
| Stores
and spares |
|
12 |
52,001,627 |
58,086,448 |
|
| Stock
in trade |
|
13 |
166,815,630 |
218,208,642 |
|
| Goods
in transit |
|
1,310,759 |
3,112,072 |
|
| Book debts |
|
14 |
41,006,246 |
28,719,973 |
|
| Advances,
deposits, prepayments |
|
| and
other receivables |
|
15 |
9,294,471 |
11,028,956 |
|
| Cash
and bank balances |
|
16 |
5,688,458 |
6,803,668 |
|
|
|
---------- |
---------- |
|
|
276,117,191 |
325,959,759 |
|
|
---------- |
---------- |
|
|
355,589,780 |
424,367,942 |
|
|
========== |
========== |
|
|
| Profit
& Loss Account |
|
| For
the year ended 30th June, 1997 |
|
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
|
| Sales |
|
17 |
257,511,474 |
179,868,335 |
|
| Cost
of Sales |
|
18 |
205,397,001 |
153~523,698 |
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT |
|
52,114,473 |
26,344,637 |
|
|
| Administrative,
selling & general expenses |
19 |
18,074,201 |
21,497,257 |
|
|
|
---------- |
---------- |
|
| OPERATING
PROFIT |
|
34,040,272 |
4,847,380 |
|
|
| Other
Income |
|
20 |
31,572,482 |
7,236,236 |
|
|
|
---------- |
---------- |
|
|
65,612,754 |
12,083,616 |
|
|
| Financial
and other charges |
|
21 |
9,400,246 |
3,986,585 |
|
|
|
---------- |
---------- |
|
| PROFIT
BEFORE TAXATION |
|
56,212,508 |
8,097,031 |
|
| Provision
for taxation-Current |
|
13,000,000 |
- |
|
|
---------- |
---------- |
|
|
43,212,508 |
8,097,031 |
|
| Un-appropriated
profit from the |
|
| previous
years |
|
9,990,958 |
9,252,544 |
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
53,203,466 |
17,349,575 |
|
|
---------- |
---------- |
|
| Proposed
dividend on ordinary shares |
|
11,299,988 |
5,022,217 |
|
| Proposed
dividend on preference shares |
|
2,336,400 |
2,336,400 |
|
|
---------- |
---------- |
|
|
13,636,388 |
7,358,617 |
|
|
---------- |
---------- |
|
| Un-appropriated
profit carried to Balance Sheet |
39,567,078 |
9,990,958 |
|
|
========== |
========== |
|
|
| Cash
Flow Statement for the |
|
| year
ended 30th June, 1997 |
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
56,212,508 |
8,097,031 |
|
| Adjustment
to reconcile net profit before tax |
|
| to
net cash provided by operating activities |
|
|
| Depreciation |
|
17,044,318 |
21,006,959 |
|
| Provision
for gratuity |
|
9,439,858 |
2,805,135 |
|
| Gain
on disposal of fixed assets |
|
(27,671,755) |
(4,613,400) |
|
| Movement
in working capital |
|
50,671,895 |
(44,572,665) |
|
|
---------- |
---------- |
|
| Cash
generated from operation |
|
49,484,316 |
(25,373,971) |
|
| Payment
for: |
|
---------- |
---------- |
|
| Staff
Gratuity |
|
(3,894,261) I |
(2,822,711) |
|
| Income tax |
|
(2,882,811) |
(4,122,506) |
|
|
---------- |
---------- |
|
|
(6,777,072) |
(6,945,217) |
|
|
---------- |
---------- |
|
| Net
Cash provided/(used) by operating activities |
98,919,752 |
(24,222,157) |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
---------- |
---------- |
|
| Capital
Expenditure |
|
(696,250) |
(780,637) |
|
| Proceeds
from sale of fixed assets |
|
30,259,281 |
4,674,300 |
|
|
---------- |
---------- |
|
| Net
cash provided/(used)by investing activities |
29,563,031 |
3,893,663 |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Bank
Overdrafts |
|
(121,533,829) |
26,427,102 |
|
| Dividend
paid |
|
(8,064,164) |
(6,921,311) |
|
|
---------- |
---------- |
|
| Net
cash provided/(used) by Financing activities |
'(129,597,993) |
19,505,791 |
|
|
---------- |
---------- |
|
| Net
(decrease) /Increase in cash |
|
(1,115,210) |
(822,703) |
|
| Cash
and bank balance on 1st July |
|
6,803,668 |
7,626,371 |
|
|
---------- |
---------- |
|
| Cash
and bank balance on 30th June |
|
5,688,458 |
6,803,668 |
|
| MOVEMENT
IN WORKING CAPITAL |
|
========== |
========== |
|
| (Increase)/decrease
in current assets: |
|
| Stores
and Spares |
|
6,084,821 |
(2,075,039) |
|
| Stock
in Trade |
|
51,393,012 |
(38,079,008) |
|
| Goods
in transit |
|
1,801,313 |
(1,061,493) |
|
| Book debts |
|
(12,286,273) |
(3,199,477) |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
Receivables |
|
1,005,689 |
570,178 |
|
|
---------- |
---------- |
|
| Net(increase)/decrease
in current assets |
|
47,998,562 |
(43,844,839) |
|
| (Decrease)/increase
in current liabilities |
|
---------- |
---------- |
|
| Creditors,
accrued charges & other Liabilities |
|
1,536,577 |
(759,187) |
|
| Workers'
Welfare Fund |
|
1,136,756 |
31,361 |
|
|
---------- |
---------- |
|
| Net(decrease)/increase
in current liabilities |
|
2,673,333 |
(727,826) |
|
|
---------- |
---------- |
|
|
50,671,895 |
(44,572,665) |
|
|
========== |
========== |
|
|
| Notes
to the accounts |
|
| for
the year ended 30th June, 1997 |
|
|
| 1.1
STATUS AND ACTIVITIES OF THE COMPANY |
|
|
| Lawrencepur
Woollen & Textile Mills Limited is a public limited company listed with
Karachi & |
|
| Lahore
stock exchanges. The Company is engaged in the manufacture and sale of
woollen |
|
| worsted
yarn, man made yarn, woollen/worsted fabrics and man made fabrics. |
|
|
| 1.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
| (a)
Accounting convention: |
|
|
| The
financial statements have been prepared on historical cost convention,
without any |
|
| adjustment
for inflation or reference to current values. |
|
|
| (b)
Gratuity fund: |
|
|
| The
company operates an unfunded gratuity scheme for all its employees. Liability
is |
|
| provided
annually on the basis of the last drawn salary, length of service of the |
|
| employee
in accordance with the rules. |
|
|
| (c)
Taxation: |
|
|
| The
charge for current taxation is based on taxable income at the current rates
after |
|
| taking
into account tax credits, if any. The company accounts for deferred taxation |
|
| using
the liability method, on all major timing differences. |
|
|
| (d)
Fixed assets: |
|
|
| i)
All the fixed assets are valued at cost less accumulated depreciation except
for |
|
| free
hold land and capital work-in-progress which are shown at cost. |
|
|
| ii)
Depreciation on fixed assets is charged to income on reducing balance method
at |
|
| the
normal rates as specified in Note 10. |
|
|
| iii)
Full year's depreciation is provided in the year of installation/operation
and no |
|
| depreciation
is accounted for the year in which fixed assets are disposed off. |
|
|
| iv)
Normal repairs and maintenance are charged to expenses as incurred. |
|
|
| v)
Gain or loss, if any, on disposal of assets is included in current income. |
|
|
| (e)
Investments- These are stated at cost. |
|
|
| (f)
Stock and stores :- These are valued as under: |
|
|
|
| Stores
and spares |
- At moving average cost |
|
| Raw
material |
- At average cost |
|
| Work
in process |
- At production cost |
|
| Finished
goods |
- At lower of average
cost or net realizable value |
|
|
| (g)
Revenue recognition: |
|
|
| Revenue
from sales is recognised on delivery of goods to customers. |
|
|
| (h)
General: |
|
|
|
| i)
Figures have been rounded off to the nearest rupee; and |
|
| ii)
Figures of previous year have been re-arranged to facilitate comparison where |
|
| necessary. |
|
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
|
| 2.
SHARE CAPITAL |
|
| Issued,
subscribed and fully paid up: |
|
| Issued
for cash: |
|
| 1,281,720
ordinary shares of Rs. 10 each |
|
12,817,200 |
12,817,200 |
|
| 2,366,521
ordinary shares of Rs. 10 issued |
|
| as
right shares. |
|
23,665,210 |
23,665,210 |
|
|
| Issued
for consideration other than cash: |
|
| (for
assets taken over) |
|
| 931,360
ordinary shares of Rs. 10 each |
|
9,313,600 |
9,313,600 |
|
|
| Issued
as bonus shares: |
|
| 442,616
ordinary shares of Rs. 10 each |
|
4,426,160 |
4,426,160 |
|
|
---------- |
---------- |
|
|
50,222,170 |
50,222,170 |
|
|
========== |
========== |
|
| Preference
shares: |
|
| 25,960
9% cumulative redeemable |
|
| preference
shares of Rs. 1000 each
25,960,000 |
25,960,000 |
25,960,000 |
|
|
========== |
========== |
|
|
|
|
| 9%
cummulative redeemable preference shares have been allotted to the Islamic |
|
| Development
Bank Jeddah to be redeemable at any time mutually agreed upon. |
|
|
| 3. RESERVES |
|
| Capital
reserve |
|
598,609 |
598,609 |
|
| Premium
on shares |
|
47,330,420 |
47,330,420 |
|
| General
reserve |
|
56,614,584 |
56,614,584 |
|
|
---------- |
---------- |
|
|
104,543,613 |
104,543,613 |
|
|
|
|
========== |
========== |
|
| 4.
DEFERRED TAXATION |
|
| Opening
balance |
|
8,500,000 |
11,000,000 |
|
| Provision
for the Year |
|
- |
- |
|
| Transfer
to Current Taxation |
|
(2,000,000) |
(2,500,000) |
|
|
---------- |
---------- |
|
|
6,500,000 |
8,500,000 |
|
|
========== |
========== |
|
| 5.
PROVISION FOR GRATUITY |
|
| Opening
balance |
|
33,269,034 |
33,286,610 |
|
| Paid
during the year |
|
3,894,261 |
2,822,711 |
|
|
---------- |
---------- |
|
|
29,374,773 |
30,463,899 |
|
| Accrued
for the year |
|
9,439,858 |
2,805,135 |
|
|
---------- |
---------- |
|
| Balance
payable |
|
38,814,631 |
33,269,034 |
|
|
========== |
========== |
|
| 6.
BANK OVERDRAFT-SECURED |
|
| 6.1
Habib Bank Ltd. LHR. (6-1) |
|
16,925,209 |
138,459,038 |
|
|
---------- |
---------- |
|
|
16,925,209 |
138,459,038 |
|
|
========== |
========== |
|
|
| 6.1
- Bank running finance obtain from H.B. Ltd. is secured by way of
Hypothecation of stock |
|
| in
trade. The total sanctioned Limit of credit facility is Rs. 90.000 Million
under Markup |
|
| arrangements
@ Rs. 0.39 per thousand per day. |
|
|
|
1997 |
1996 |
|
|
Rupees |
Rupees |
|
|
