| Liberty Mills Limited |
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| Annual
Report 2000 |
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| Contents |
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| Board
of Directors |
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| Notice
of Meeting |
|
| Report
of the Directors |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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| Profit
& Loss Account |
|
| Statement
of Changes in Financial Position |
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| Statement
of Changes in Equity |
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| Notes
to the Accounts |
|
| Pattern
of Share Holding |
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|
|
| Board
of Directors |
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| BOARD
OF DIRECTORS |
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| DIRECTORS |
|
MR. SALIM N. MUKATY |
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|
MR. ARIF N. MUKATY |
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|
MR. YUSUF N. MUKATY |
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|
MR. ASHRAF SALIM MUKATY |
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|
MR. NOOR MOHAMMAD YOUSUF
MUKATY |
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|
MR. ARIF HAJI ABDUL
SATTAR MANIYA |
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|
MR. LUQMAN F. POONWALA |
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|
MR. MADNI GUL MUHAMMAD |
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|
MRS. HAMIDA SALIM MUKATY |
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| CHIEF
EXECUTIVE |
MR. YUSUF N. MUKATY |
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| SECRETARY |
|
MR. MUHAMMAD ASHRAF GHAZI |
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| AUDITORS: |
|
HYDER BHIMJI & CO. |
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|
CHARTERED ACCOUNTANTS |
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|
A.R. DIWAN & CO. |
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CHARTERED ACCOUNTANTS |
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| BANKERS |
|
HABIB BANK LIMITED |
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|
HABIB BANK A.G. ZURICH |
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|
METROPOLITAN BANK LTD. |
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SONERI BANK LTD. |
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|
BANK AL HABIB LTD. |
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| REGISTERED
OFFICE |
A-51-A, S.I.T.E.,
KARACHI, |
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| AND MILLS: |
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TEL. NOS. 2578103 TO
2578116 |
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TELEX: 21989 LML PK |
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TELE FAX: (021) 2564600 |
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| Notice
of Meeting |
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| NOTICE
is hereby given that 34th Annual General Meeting of Shareholders of Liberty
Mills Limited |
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| will
be held at Beach Luxury Hotel, Moulvi Tamizuddin Khan Road, Karachi on
Wednesday 20th |
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| December,
2000 at 10.00 A.M. to transact the following business: |
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| 1.
To confirm the minutes of the 33rd Annual General Meeting of the Company held
on 27th |
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| December 1999. |
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|
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| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended 30th |
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| June
, 2000 together with Directors' and Auditors' report thereon. |
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| 3.
To approve cash dividend @10% (i.e. Rupee 1.00 per share) for the year ended
30th June, 2000 |
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| as
recommended by the Directors. |
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| 4.
To appoint Auditors for the year ending 30th June 2001 and to fix their
remuneration. The retiring |
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| Auditors
M/s. Hyder Bhimji & Company and M/s. A. R. Diwan & Company Chartered |
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| Accountants
of the Company have offered themselves for re-appointment. |
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| 5.
To transact any other ordinary business which may be placed before the
meeting with the |
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| permission
of the chair. |
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| SPECIAL
BUSINESS |
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| To
consider and approve disposal of Fixed Assets and to pass with or without
modification the following |
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| resolution: |
|
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| 1.
"RESOLVED that disposal of used GENERATORS which have written down value
of Rs. |
|
| 4,677,098/=
as on 30th June 2000 be and is hereby approved" |
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| 2.
"FURTHER RESOLVED that disposal of SULZER LOOMS which have a written
down value of |
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| Rs.
9,474, 613/: as on 30th June , 2000 be and is hereby approved" |
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|
By Order of the Board |
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|
(Muhammad Ashraf Ghazi) |
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| KARACHI:
27th November, 2000 |
|
Company Secretary |
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| NOTE: |
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| 1.
The Share Transfer Books of the Company will be closed from 13th December,
2000 to 20th |
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| December,
2000 (both days inclusive) |
|
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| 2.
A. Member entitled to attend and vote at this meeting is entitled to appoint
another member of |
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| the
Company as a proxy to attend and vote on his/her behalf. Proxies in order to
be effective |
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| must
be received at the Registered Office of the Company duly stamped and signed
not less than |
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| 48
hours before the meeting. |
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|
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| 3.
The shareholders are requested to communicate the Company of any change in
their address. |
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| 4.
Statement under section 160(1)(b) of the Companies Ordinance, 1984 pertaining
to the Special |
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| Business
is being sent to the members with this notice. |
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| STATEMENT
PERSUANT TO SECTION 160(1)(B) |
|
| OF
THE COMPANIES ORDINANCE, 1984 |
|
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| The
approval of the Members in respect of sale of a portion of Fixed Assets is
sought in accordance |
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| with
the provision of the section 196 of the Companies Ordinance, 1984. |
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| Report
of the Directors |
|
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| The
Directors of the Company take pleasure in presenting their report together
with audited accounts |
|
| of
the Company and auditors report thereon for the year ended 30th June, 2000. |
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| OPERATING
RESULTS: |
|
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| The
year under review proved to be a challenging one for the Country's economy.
Inspite of slow |
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| economy,
the results of your Company reflect much better position as compared to the
previous |
|
| year.
The sales rose to Rs. 1.456 billion over the last year's sales of Rs. 1.438
billion, up 1.25%. |
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| The
gross profit rose to Rs. 197.596 million over the last year's gross profit of
Rs. 133.677 |
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| million,
up 47.82%. The profit before tax rose to Rs. 68.442 million over the last
year's profit |
|
| of
Rs. 27.620 million, up 147.80%.' Our entire concentration is on the quality
improvement of |
|
| our
products which is the key to success in exports resulting in better earnings
and satisfied clients. |
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| The
summarized results are as under: |
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|
2000 |
1999 |
|
|
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|
Rs. in million |
Rs. in million |
|
|
|
|
| Sales
& Services |
|
|
1,455.70 |
1,437.97 |
|
| Gross Profit |
|
|
197.60 |
133.68 |
|
| Profit
before Taxation |
|
|
68.44 |
27.62 |
|
| Profit
after Taxation |
|
|
35.13 |
8.99 |
|
| Earning
per share (Rupees) |
|
|
2.36 |
0.60 |
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| DIVIDEND: |
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| Your
Directors are pleased to recommend 10% dividend, i.e. Re. 1.00 per share of
Rs. 10/- each |
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| for
the year ended 30th June, 2000. |
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| FUTURE
OUT LOOK: |
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| Your
Company will continue to strive and grow as we hope that present policies of
the government |
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| will
bear fruits in coming months which will result in improved socio-economic
conditions. We |
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| expect
to perform better with good corporate governance, product innovation and
aggressive |
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| marketing.
Using the collective efforts of workers and management, we are planning to
increase |
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| our
profitability by improving operating efficiency and reducing cost. Quality of
service to the |
|
| customers
shall remain our top priority. |
|
|
| PATTERN
OF SHAREHOLDING: |
|
| The
Shareholding pattern of the Company as on 30th June, 2000 is given on page
No. 28. |
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| AUDITORS: |
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| The
present Auditors Messrs. Hyder Bhimji & Company, Chartered Accountants
and Messrs A.R. |
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| Diwan
& Company, Chartered Accountants, retire and offer themselves for
re-appointment. |
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| EMPLOYEES'
RELATION: |
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| Your
Directors place on record their appreciation for efforts put in by management
team and workers |
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| of the Company. |
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|
For and on behalf of the Board of Directors |
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|
YUSUF N. MUKATY |
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| Karachi:
the 27th November, 2000 |
|
Chief Executive |
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|
|
|
| Auditors
Report to the Members |
|
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| We
have audited the annexed Balance Sheet of M/S. LIBERTY MILLS LIMITED, as at
June 30, 2000, |
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| and
the related profit and Loss Account, cash flow statement and statement of
changes in equity, together |
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| with
the Notes forming part thereof, for the year then ended and we state that we
have obtained all |
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| the
information and explanations which, to the best of our knowledge and belief,
were necessary for |
|
| the
purposes of our audit. |
|
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| It
is the responsibility of the company's management to establish and maintain a
system of Internal |
|
| Control,
and prepare and present the above said statements in conformity with the
approved accounting |
|
| standards
and the requirements of the Companies Ordinance, 1984. Our responsibility is
to express |
|
| an
opinion on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These |
|
| standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the |
|
| above
said statements are free of and material misstatement. An audit includes
examining, on a test |
|
| basis,
evidence supporting the amounts and disclosures in the above said statements.
An audit also includes |
|
| assessing
the accounting policies and significant estimates made by management, as well
as, evaluating |
|
| the
overall presentation of the above said statements. We believe that our audit
provides a reasonable |
|
| basis
for our opinion and, after due verification, we report that- |
|
|
|
| (a)
in our opinion, proper books of accounts have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984. |
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|
|
|
|
| (b)
in our opinion: |
|
|
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| i)
the Balance Sheet and profit and loss Account together with the notes thereon
have been |
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| drawn
up in conformity with the Companies Ordinance, 1984 and are in agreement with |
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| the
books of accounts and are further in accordance with accounting policies
consistently |
|
| applied. |
|
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|
|
|
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| ii)
the expenditure incurred during the year were for the purpose of the
company's business; and |
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|
|
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| 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 , cash flow statement and statement of
changes in |
|
| equity
together with the notes forming part thereof confirm with approved accounting
standards |
|
| as
applicable in Pakistan ,and, give the information required by the Companies
Ordinance, 1984 |
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| in
the manner so required and respectively give a true and fair view of the
state of the company's |
|
| affairs
as at June 30, 2000 and of the Profit, its cash flows and changes in equity
for the year |
|
| then ended; and |
|
|
|
|
|
| (d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 (XVIII |
|
| of
1980) was deducted by the Company and deposited in the Central Zakat Fund
established under |
|
| Section
7 of that Ordinance. |
|
|
|
|
HYDER BHIMJI & CO. |
|
A.R. DIWAN & CO. |
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|
Chartered Accountants |
|
Chartered Accountants |
|
|
| Karachi:
the 27th November, 2000 |
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|
|
| Balance
Sheet as at 30th June, 2000 |
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|
|
|
2000 |
1999 |
|
|
|
Notes |
Rupees |
Rupees |
|
|
|
|
|
| CAPITAL
AND RESERVES |
|
|
|
|
|
|
|
|
| CAPITAL |
|
|
|
|
| Authorised: |
|
|
|
|
| 20,000,000
Ordinary Shares |
|
|
|
| of Rs. 10/- each. |
|
200,000,000 |
200,000,000 |
|
|
|
|
|
========== |
========== |
|
|
| ISSUED,
SUBSCRIBED AND PAID-UP |
3 |
148,946,900 |
148,946,900 |
|
|
| RESERVE
AND SURPLUS |
|
|
|
|
|
| Revenue
Reserve |
|
4 |
44,000,000 |
24,000,000 |
|
|
| Un-appropriated
Profit |
|
343,103 |
102,375 |
|
|
|
------------------ |
------------------ |
|
|
|
|
193,290,003 |
173,049,275 |
|
|
|
|
|
|
|
|
|
|
| REDEEMABLE
CAPITAL |
|
5 |
-- |
-- |
|
|
| LONG
TERM LOANS |
|
6 |
-- |
7,171,440 |
|
|
| SUBORDINATED
LOAN |
|
7 |
233,000,000 |
125,000,000 |
|
|
| DEFERRED
LIABILITIES |
|
8 |
55,438,279 |
35,553,466 |
|
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
Portion of Redeemable Capital |
|
-- |
11,089,811 |
|
|
| Current
Portion of Long Term Loans |
|
7,171,389 |
11,981,750 |
|
|
| Short
Term Running Finance utilised under |
|
|
|
|
| mark-up
Arrangements |
|
9 |
424,460,613 |
297,880,609 |
|
|
| Creditors,
Accrued and Other Liabilities |
10 |
78,090,277 |
126,435,191 |
|
|
| Proposed
Dividend |
|
|
14,894,690 |
8,936,814 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
524,616,969 |
456,324,175 |
|
|
|
|
|
|
|
|
| CONTINGENCIES
& COMMITMENTS |
11 |
-- |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
|
Total |
1,006,345,251 |
797,098,356 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| FIXED
TANGIBLE ASSETS |
|
|
|
|
|
| Operating
Assets |
|
12 |
567,052,115 |
363,348,415 |
|
|
| Capital
Work-in-progress |
|
13 |
18,408,806 |
113,265,556 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
585,460,921 |
476,613,971 |
|
|
|
|
|
|
|
|
| LONG
TERM SECURITY DEPOSITS |
|
3,146,245 |
2,646,245 |
|
|
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
| Stores & Spares |
|
14 |
12,452,169 |
8,001,595 |
|
|
| Stock-in-Trade |
|
15 |
177,490,307 |
33,433,923 |
|
|
| Trade Debts |
|
16 |
159,364,050 |
207,971,201 |
|
|
| Advances,
Prepayments and |
|
|
|
| other
Receivables |
|
17 |
64,941,201 |
65,483,492 |
|
|
| Cash
& Bank Balances |
|
18 |
3,490,358 |
2,947,929 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
417,738,085 |
317,838,140 |
|
|
|
------------------ |
------------------ |
|
|
|
|
Total |
1,006,345,251 |
797,098,356 |
|
|
|
========== |
========== |
|
|
| NOTE:
The annexed Notes form an integral part of these accounts. |
|
|
|
|
|
|
|
YUSUF N. MUKATY |
|
|
SALIM N. MUKATY |
|
|
|
|
Chief Executive |
|
|
Director |
|
|
|
|
|
|
|
|
|
|
| Karachi:
the 27th November, 2000 |
|
|
|
|
|
|
|
|
|
| Profit
and Loss Account |
|
|
|
| For
the Year Ended 30th June, 2000 |
|
|
|
|
|
|
|
|
|
2000 |
1999 |
|
|
|
Notes |
Rupees |
Rupees |
|
|
|
|
|
| Sales
& Services |
|
19 |
1,455,703,872 |
1,437,969,750 |
|
|
| Cost
of Sales and Services |
|
20 |
1,258,108,047 |
1,304,293,217 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Gross Profit |
|
|
197,595,825 |
133,676,533 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Administrative
Expenses |
|
21 |
43,975,302 |
31,968,991 |
|
|
| Selling
& Distribution Expenses |
|
22 |
53,389,583 |
42,469,652 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
97,364,885 |
74,438,643 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Operating Profit |
|
|
100,230,940 |
59,237,890 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Financial
Charges |
|
23 |
29,386,939 |
37,624,586 |
|
|
| Other Charges |
|
24 |
4,233,785 |
2,001,030 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
33,620,724 |
39,625,616 |
|
|
|
------------------ |
------------------ |
|
|
|
|
|
66,610,216 |
19,612,274 |
|
|
| Other Income |
|
25 |
1,831,691 |
8,007,289 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Profit
before Taxation |
|
|
68,441,907 |
27,619,563 |
|
|
| Taxation |
|
26 |
(33,306,489) |
(18,625,542) |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Profit
after Taxation |
|
|
35,135,418 |
8,994,021 |
|
|
| Un-appropriated
Profit brought forward |
|
102,375 |
45,168 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Profit
available for Appropriation |
|
|
35,237,793 |
9,039,189 |
|
|
|
|
|
|
|
| Less
Appropriation: |
|
|
|
| Transfer
(to)/from Revenue Reserve |
|
(20,000,000) |
-- |
|
|
| Proposed
Dividend @ 10% (1999: @ 06%) |
|
(14,894,690) |
(8,936,814) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(34,894,690) |
(8,936,814) |
|
|
|
|
------------------ |
------------------ |
|
|
| Un-appropriated
profit carried forward |
|
343,103 |
102,375 |
|
|
|
|
|
========== |
========== |
|
|
| Earning
per share |
|
|
2.36 |
0.60 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
| Note:
The annexed Notes form an integral part of these accounts. |
|
|
|
|
|
|
|
|
|
YUSUF N. MUKATY |
|
|
SALIM N. MUKATY |
|
|
|
|
Chief Executive |
|
|
Director |
|
|
|
|
|
|
|
|
| Karachi:
the 27th November, 2000 |
|
|
|
|
|
|
|
|
|
| Statement
of Changes in Financial Position |
|
|
|
| (Cash
Flow Statement) For the Year Ended 30th June, 2000 |
|
|
|
|
|
|
|
|
2000 |
1999 |
|
|
|
Notes |
Rupees |
Rupees |
|
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
| Net
Profit for the year before taxation |
|
68,441,907 |
27,619,563 |
|
|
|
|
|
| Adjustments
for items not involving movement of funds |
|
|
|
|
|
|
| Depreciation |
|
|
62,881,816 |
40,190,692 |
|
|
| Depreciation
written back |
|
|
-- |
(35,500) |
|
|
| Provision
for staff Retirement benefits (Net) |
|
2,184,813 |
(9,300,386) |
|
|
| (Profit)
on sale of fixed assets |
|
|
(1,790,663) |
(531,739) |
|
|
| Financial
charges |
|
|
29,386,939 |
37,624,586 |
|
|
| Capital Gain |
|
|
-- |
(7,440,050) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
92,662,905 |
60,507,603 |
|
|
|
|
========== |
========== |
|
|
|
|
161,104,812 |
88,127,166 |
|
|
|
|
|
| Add:
Net (Increase) / Decrease in working capital |
30 |
(145,567,011) |
(95,793,151) |
|
|
|
|
|
|
|
| Less:
Financial charges paid |
|
|
(31,222,368) |
(35,890,026) |
|
|
| Income
Taxes paid |
|
|
(15,906,479) |
(9,479,419) |
|
|
| Long
term security deposits |
|
|
(500,000) |
-- |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Net
cash flow generated from operations |
|
(32,091,046) |
(53,035,430) |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Fixed
Capital Expenditure |
|
|
(174,238,107) |
(142,450,915) |
|
|
| Proceeds
from disposal of fixed assets |
|
4,300,000 |
14,649,809 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Net
cash flow towards investing activities |
|
(169,938,107) |
(127,801,106) |
|
|
|
|
|
|
|
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Repayment
of long term loans |
|
|
(11,981,750) |
(10,564,750) |
|
| Repayment
of Redeemable capital |
|
|
(11,089,858) |
(10,221,023) |
|
| From
Directors Loan |
|
|
108,000,000 |
125,000,000 |
|
| Dividend paid |
|
|
(8,936,814) |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flow from financing activities |
|
75,991,578 |
104,214,227 |
|
| Net
increase in Cash & Cash equivalents |
|
(126,037,575) |
(76,622,309) |
|
| Cash
& cash equivalent at the beginning of the year |
(294,932,680) |
(218,310,371) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
& cash equivalent at the end of the year |
|
(420,970,255) |
(294,932,680) |
|
|
|
|
========== |
========== |
|
|
|
YUSUF N. MUKATY |
|
|
SALIM N. MUKATY |
|
|
|
Chief Executive |
|
|
Director |
|
|
|
| Karachi:
the 27th November, 2000 |
|
|
|
| Statement
of Changes in Equity |
|
| For
the year ended 30th June, 2000 |
|
|
|
Share |
Revenue |
Un-appropriated |
|
|
|
Capital |
Reserve |
Profit |
Total |
|
|
|
| Balance
as at 30-June-98 |
148,946,900 |
24,000,000 |
45,168 |
172,992,068 |
|
|
| Net
Profit for the year |
|
|
|
|
|
| ended
30 June, 1999 |
-- |
-- |
8,994,021 |
8,994,021 |
|
|
| Dividend |
|
-- |
-- |
(8,936,814) |
(8,936,814) |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30-June-99 |
148,946,900 |
24,000,000 |
102,375 |
173,049,275 |
|
|
|
|
|
|
|
|
|
| Net
profit for the year ended 30-June |
-- |
-- |
35,135,418 |
35,135,418 |
|
|
| Appropriations
Transfer to |
|
|
| Revenue
Reserve |
-- |
20,000,000 |
(20,000,000) |
-- |
|
|
| Dividend |
|
-- |
-- |
(14,894,690) |
(14,894,690) |
|
