| Burewala Textile Mills Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 1998 |
|
|
|
| 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 |
|
| Chief
Executive |
|
M. HUSSAIN DAWOOD |
|
| Directors |
|
|
KHAWAJA 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 |
|
AFTAB AHMED QAISER |
|
|
|
| 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
Years at a Glance |
|
|
|
|
1998 |
1997 |
1996 |
1995 |
1994 |
1993 |
1992 |
1991 |
1990 |
1989 |
|
|
| Capital
& Reserves: |
|
|
|
|
| Paid
up Capital |
73,074 |
73,074 |
73,074 |
73,074 |
73,074 |
73,074 |
73,074 |
37,260 |
37,260 |
37,260 |
|
| Reserves
& Surplus |
299,152 |
259,962 |
247,538 |
250,332 |
241,280 |
258,856 |
252,971 |
159,245 |
141,470 |
115,029 |
|
| Shareholders
equity |
372,226 |
333,036 |
320,612 |
323,406 |
314,354 |
331,930 |
326,045 |
196,505 |
178,730 |
152,289 |
|
| Break
up value of |
|
| Shares
of Rs. 10 each |
50.94 |
45.58 |
43.87 |
44.26 |
43.02 |
45.42 |
44.62 |
52.74 |
47.97 |
40.87 |
|
|
| Sales: |
|
|
| Export |
|
- |
- |
- |
6,408 |
7,877 |
22,751 |
45,907 |
56,232 |
86,808 |
80,186 |
|
| Local |
|
360,277 |
445,896 |
475,912 |
273,137 |
344,448 |
297,053 |
502,953 |
535,658 |
469,772 |
444,962 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| TOTAL |
|
360,277 |
445,896 |
475,912 |
279,545 |
352,325 |
319,804 |
548,860 |
591,890 |
556,580 |
525,148 |
|
|
|
|
|
|
|
| Profit |
|
| Profit
before Taxation |
38,460 |
33,153 |
45,485 |
5,083 |
(18,913) |
25,740 |
60,813 |
70,585 |
68,796 |
82,063 |
|
| Profit
after Taxation |
39,190 |
48,961 |
33,743 |
9,052 |
(17,576) |
16,847 |
44,381 |
43,858 |
48,796 |
60,063 |
|
|
| Dividend |
|
| Cash % |
|
25 |
50 |
50 |
- |
- |
15 |
55 |
70 |
60 |
70 |
|
| Amount |
|
18,269 |
36,537 |
36,537 |
- |
- |
10,961 |
40,191 |
26,082 |
22,356 |
26,082 |
|
|
|
|
|
| Earning
per Share |
5.36 |
6.70 |
4.62 |
1.24 |
(2.41) |
2.31 |
6.07 |
11.77 |
13.10 |
16.12 |
|
|
|
|
| Notice
of Annual General Meeting |
|
|
| Notice
is hereby given that Forty Fifth Annual General Meeting of the shareholders
of the Company will be held on |
|
| 1999
at 3:00 p.m in Room Nos. 415-419, Alfalah Building, Shahra-e- Quaid-e-Azam,
Lahore, to |
|
| transact
the following business: |
|
|
| 1.
Recitation from the Holy Quran. |
|
|
|
|
| 2.
To Confirm the minutes of the Forty Fourth Annual General Meeting held on 31
March 1998. |
|
|
|
|
| To
receive and adopt the audited Accounts of the Company for the year ended 30
September 1998 |
|
| together
with Directors and Auditors Reports thereon. |
|
|
|
| 4.
To declare dividend. The Directors have recommended a cash dividend of
Rs.2.50 (25%) per ordinary |
|
| share. |
|
|
|
|
| 5.
To elect directors for three years in accordance with section 178(1) of the
Companies Ordinancel984. |
|
| The
present directors have fixed the number of directors of the Company at seven,
including the |
|
| Chief
Executive of the Company in place of the following retiring directors:- |
|
|
| Mr.
Ahmed Dawood |
|
| Mr.
M. Hussain Dawood |
|
| Mr.
Khawaja Amanullah |
|
| Mr.
Amir Abdullah Khan Rokhri |
|
| Mr.
Taj Muhammad Khanzada, D.S.O Fakhr-e-Kashmir |
|
| Mr.
Sardar Ali Khan |
|
|
| Brig
(Retd.) Dr. Mazhar-ul-Haq (Sitara-e-Imtiaz) |
|
|
| 6.
To appoint auditors and fix their remuneration. |
|
|
| 7.
To Transact any other business with the permission of the Chairman. |
|
|
|
|
BY ORDER OF THE BOARD |
|
|
AFTAB AHMED QAISER |
|
| Lahore:
12 February 1999 |
|
|
|
|
| Notes: |
|
|
| 1.
The shares transfer books of the Company will remain closed from 10 March,
1999 to 19 March, 1999 |
|
| (both
days inclusive). |
|
|
|
|
|
|
| 2.
A member entitled to attend and vote at the meeting may appoint another
member as his/her proxy to |
|
| attend
and vote. Votes may be given personally or by proxy or by attorney or in case
of 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 the meeting. |
|
|
| 3.
Nomination for the election of the directors must reach the Registered office
14 days before Annual |
|
| General
meeting. |
|
|
| 4.
Shareholders are requested to promptly notify the company any charge in their
addresses. |
|
|
|
| Directors'
Report |
|
|
| Dear
Shareholders |
|
|
| Assalam-u-Alaikum |
|
|
| Your
directors feel pleasure to present before you the 45th annual report together
with audited accounts of the |
|
| Company
and the auditors report thereon for the year ended 30 September 1998. Your
Company has earned a |
|
| net
pretax profit of Rs. 38,459,635 after chargin g all operational,
administrative, financial and selling expenses |
|
| including
depreciation amounting to Rs. 15,421,923 as against pretax profit of
Rs.33,153,033 in the preceding |
|
| year. |
|
|
| Your
Directors have recommended the appropriation of current year's profit as
under: |
|
|
|
Rupees |
|
| Pretax
Profit |
|
|
38,459,635 |
|
| Provision
for taxation |
|
|
|
|
| Current
- for the year |
|
|
(1,800,000) |
|
|
-
Prior years |
|
|
4,243,709 |
|
| Deferred |
|
|
|
(1,713,725) |
|
|
|
|
---------- |
|
| After
tax profit |
|
|
39,189,619 |
|
| Un-appropriated
profit b/f |
|
|
15,220,617 |
|
|
|
|
---------- |
|
| Profit
available for appropriation |
|
|
54,410,236 |
|
|
|
|
========== |
|
| Appropriation: |
|
|
| Proposed
Dividend @ 25% |
|
|
l 8,268,513 |
|
| Retained
Earning |
|
|
36,141,723 |
|
|
|
|
---------- |
|
|
|
|
54,410,236 |
|
|
|
|
========== |
|
|
|
|
| The
company is continuing its policy of concentrating on the manufacture of fine
counts of yarn and fabrics |
|
| However,
the imposition of Sales Tax is a major deterrent in the production of value
added products. During the |
|
| period
under review the Company paid a sum of Rs. 45,095,584 as Sales Tax. The Sales
revenue for the year in |
|
| Rs.
360,276,873 as against Rs. 445,896,465 last year. |
|
|
| The
increase in Energy and Labour costs and the imposition of Sales Tax is making
it difficult for the company to |
|
| keep
its head above water. |
|
|
| The
company has earned other income of Rs. 47,486,839 including dividend income
of Rs. 44,075,307. |
|
|
| 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. |
|
|
|
|
For & on behalf of the Board |
|
|
|
|
|
|
| Lahore:
12 February 1999 |
|
M. HUSSAIN DAWOOD |
|
|
|
|
Chief Executive |
|
|
|
| Auditors'
Report to The Members |
|
|
| We
have audited the annexed Balance Sheet of THE BURAWALA TEXTILE MILLS LIMITED
AS |
|
| at
30 September 1998 and the related Profit & 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
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 & 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 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 & Loss Account and the 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 30 September, 1998 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. |
|
|
|
|
|
RAHMAN SARFARAZ & CO. |
|
|
|
|
CHARTERED ACCOUNTANTS |
|
| Dated:
10 February 1999 |
|
|
| LAHORE |
|
|
|
|
|
| Balance
Sheet as at 30 September 1998 |
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
|
NOTE |
Rupees |
Rupees |
|
|
|
|
|
|
| CAPITAL
& LIABILITIES |
|
|
|
|
|
|
| SHARE
CAPITAL & RESERVES |
|
|
|
|
|
| Authorised |
|
|
|
| 15,000,000
ordinary shares of Rs. 10/- each |
|
150,000,000 |
150,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed & fully paid up |
|
|
|
|
| 405
ordinary shares of Rs. 10/- each |
|
3 |
73,074,050 |
73,074,050 |
|
|
| RESERVES
& SURPLUS |
|
|
4 |
280,883,411 |
259,962,305 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
353,957,461 |
333,036,355 |
|
|
|
|
|
|
| LONG
TERM LOANS & DEFERRED LIABILITIES |
|
|
| Loans
- secured |
|
|
5 |
- |
5,118,708 |
|
|
|
| Deferred
taxation |
|
|
27,695,133 |
25,981,408 |
|
|
|
| deferred
liabilities |
|
|
6 |
11,175,095 |
11,166,146 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
38,870,228 |
42,266,262 |
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Creditors,
provisions & accrued expenses |
7 |
45,293,945 |
47,654,989 |
|
| Provision
for taxation |
|
|
11,891,769 |
15,173,019 |
|
| Dividend
- unclaimed |
|
|
9,427,750 |
6,253,163 |
|
|
- proposed |
|
|
18,268,513 |
36,537,025 |
|
|
|
|
---------- |
---------- |
|
|
|
|
84,881,977 |
105,618,196 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
25 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
477,709,666 |
480,920,813 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
|
|
|
| FIXED
ASSETS |
|
|
|
|
| Operating
assets |
|
8 |
145,969,934 |
159,628,251 |
|
| INVESTMENTS |
|
9 |
64,639,262 |
64,639,262 |
|
| LONG
TERM DEPOSITS |
|
|
|
1,712,394 |
1,712,394 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores
and spies |
|
10 |
20,310,479 |
20,586,143 |
|
| Stock
in trade |
|
11 |
178,301,066 |
175,560,642 |
|
| Book debts |
|
12 |
14,658,104 |
18,133,305 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
13 |
13,310,417 |
9,418,488 |
|
| Cash
& bank balances |
|
14 |
38,808,010 |
31,242,328 |
|
|
|
|
---------- |
---------- |
|
|
|
|
265,388,076 |
254,940,906 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
477,709,666 |
480,920,813 |
|
|
|
|
|
========== |
========== |
|
| The
annexed notes 1 to 25 form an integral part of |
|
| these
accounts. |
|
|
|
|
|
|
|
|
RAHMAN SARFARAZ & CO. |
TAJ MUHAMMAD KHANZADA |
M. HUSSAIN DAWOOD |
|
| Lahore:
10 February 1999 |
Chartered Accountants |
Director |
|
Chief Executive |
|
|
|
|
|
|
|
|
| Profit
and Loss Account |
|
|
|
| For
The Year Ended 30 September 1998 |
|
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
NOTE |
Rupees |
Rupees |
|
|
|
|
|
|
|
|
|
| Gross Sales |
|
|
360,276,873 |
445,896,465 |
|
| Brokerage |
|
|
(178,903) |
(228,922) |
|
|
|
|
---------- |
---------- |
|
| NET SALES |
|
|
360,097,970 |
445,667,543 |
|
| COST
OF SALES |
|
15 |
338,233,590 |
398,252,497 |
|
|
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT |
|
|
|
47,415,046 |
21,864,380 |
|
|
|
|
|
|
| OPERATING
EXPENSES: |
|
|
|
|
| Administrative |
|
16 |
23,639,723 |
24,070,780 |
|
| Selling
& distribution |
|
17 |
4,991,457 |
5,667,818 |
|
| Financial |
|
18 |
344,776 |
316,761 |
|
| Depreciation |
|
|
553,977 |
836,225 |
|
| Workers
(Profit) Participation Fund |
|
|
- |
1,068,638 |
|
|
|
|
---------- |
---------- |
|
|
|
|
30,891,584 |
30,598,571 |
|
|
|
|
|
| OPERATING
PROFIT/(LOSS) |
|
|
(9,027,204) |
16,816,475 |
|
| Other
Income |
|
19 |
47,486,839 |
16,336,558 |
|
|
|
|
---------- |
---------- |
|
| PRETAX
PROFIT |
|
|
38,459,635 |
33,153,033 |
|
|
|
|
|
|
| PROVISION
FOR TAXATION |
|
|
|
|
| Current
-For the year |
|
|
|
1,800,000 |
7,663,061 |
|
|
-Prior years |
|
|
(4,243,709) |
(21,951,508) |
|
| Deferred |
|
|
|
|
1,713,725 |
(1,519,956) |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
(729,984) |
(15,808,403) |
|
|
|
|
|
| PROFIT
AFTER TAX |
|
|
39,189,619 |
48,961,436 |
|
| Unappropriated
profit b/f |
|
|
15,220,617 |
2,796,206 |
|
|
|
|
|
|
---------- |
---------- |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
|
54,410,236 |
51,757,642 |
|
| Appropriation: |
|
|
|
|
| Proposed
dividend |
|
|
18,268,513 |
36,537,025 |
|
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried to Balance Sheet |
|
36,141,723 |
15,220,617 |
|
|
|
|
========== |
========== |
|
|
|
|
|
TAJ MUHAMMAD KHANZADA |
|
M. HUSSAIN DAWOOD |
|
|
Director |
|
Chief Executive |
|
|
|
|
|
| Cash
Flow Statement |
|
| For
The Year Ended 30 September 1998 |
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Cash
flow from operating activities |
|
|
|
| Net
Income after taxation |
|
39,189,619 |
48,961,436 |
|
| A4iustments
for non cash charges |
|
|
|
| Depreciation |
|
|
15,421,923 |
16,791,186 |
|
| Provision
for gratuity |
|
|
6,000,000 |
6,500,000 |
|
| Deferred
taxation |
|
|
1,713,725 |
(1,519,956) |
|
| Profit
on sale of fixed assets |
|
(270,295) |
(3,499) |
|
|
|
---------- |
---------- |
|
|
|
22,865,353 |
21,767,731 |
|
| Payment
of gratuity |
|
|
(5,991,051) |
(5,006,577) |
|
|
|
---------- |
---------- |
|
|
|
56,063,921 |
65,722,590 |
|
| Cash
provided (used) by working capital |
|
|
| Stores
& Spares |
|
|
|
275,664 |
2,422,057 |
|
| Stock
in trade |
|
(2,740,424) |
961,908 |
|
| Book Debts |
|
|
3,475,201 |
(14,159,023) |
|
| Advances.
deposits, prepayments etc. |
|
(3,891,929) |
(4,613,019) |
|
| Creditors,
provision & accrued expenses |
|
(2,361,044) |
(1,459,025) |
|
| Provision
for taxation |
|
(3,281,250) |
(16,310,660) |
|
|
|
---------- |
---------- |
|
|
|
47,540,139 |
32,564,828 |
|
|
|
|
|
|
| Cash
flow from investing activities |
|
|
|
| Sale
proceeds of fixed assets |
|
383,333 |
57,704 |
|
| Capital
expenditure |
|
(1,876,644) |
(853,935) |
|
| Long
term deposits |
|
- |
446 |
|
|
|
---------- |
---------- |
|
|
|
(1,493,311) |
(795,785) |
|
|
|
|
|
|
| Cash
flow from financing activities |
|
|
|
| Long
term loans - suppliers credit |
|
(5,118,708) |
(5,118,707) |
|
| Dividend
paid |
|
|
(33,362,438) |
(35,691,488) |
|
|
|
|
|
---------- |
---------- |
|
|
|
(38,481,146) |
(40,810,195) |
|
|
|
---------- |
---------- |
|
| Increase/(decrease)
in cash & cash equivalent |
|
7,565,682 |
(9,041,152) |
|
| Cash
& cash equivalent at the beginning of the year |
31,242,328 |
40,283,480 |
|
|
|
---------- |
---------- |
|
| Cash
& Cash equivalent at the end of the year |
|
38,808,010 |
31,242,328 |
|
|
|
========== |
========== |
|
|
|
TAJ MUHAMMAD KHANZADA |
|
M. HUSSAIN DAWOOD |
|
|
Director |
|
Chief Executive |
|
|
|
|
| Notes
To The Accounts |
|
| For
The Year Ended 30 September 1998 |
|
|
| 1.
COMPANY AND ITS OPERATIONS |
|
| The
Burawala 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 also |
|
| has
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 accounts. For
management staff a |
|
| scheme
of contributory provident fund is in operation and the trust invests the
funds 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. |
|
|
|
| (d)
Fixed assets |
|
|
| (i)
Fixed assets, except freehold land, are valued at cost less accumulated
depreciation. Freehold |
|
| land
is valued at cost. |
|
|
|
|
|
|
| (ii)
Depreciation on fixed assets is charged to income on diminishing balance
method at the rates |
|
| specified
in Note 8. |
|
|
|
|
|
|
| (iii)
Full year depreciation is charged in the year of installation/operation and
no depreciation is |
|
| charged
in the year fixed assets are disposed off or scrapped. |
|
|
|
|
| (iv)
Normal repairs and maintenance are charged to expenses as incurred. |
|
|
|
|
| (v)
Gains or losses on disposal or scrapping of assets are shown in the current
income. |
|
