| Latif Jute Mills Limited |
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| Annual
Report 2001 |
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| CORPORATE
INFORMATION |
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| BOARD
OF DIRECTORS |
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| Chairman |
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Mr. Yahya Ahmed Bawany |
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| Vice Chairman |
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Mr. A. Karim M. Yahya |
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| Chief
Executive Officer |
Mr. M. Tariq Bawany |
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| Directors |
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Mr. Ghulam Muhammad M.
Adamjee |
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Mr. Arif S. Gazi |
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Mr. Zakaria H. A. Sattar
Maniya |
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Com. (Retd.) M. Idrees
Khan |
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Mr. Shahid Mehmood
(Nominee of ICP) |
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| COMPANY
SECRETARY |
Mr. Muhammad Suhail
Hingora |
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| AUDITORS |
|
M/s. M. Yousuf Adil
Saleem & Co. |
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Chartered Accountants |
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| BANKERS |
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United Bank Limited |
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Crescent Investment Bank
Limited |
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Orix Investment Bank
Pakistan Limited |
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Standard Chartered Bank |
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| REGISTERED
OFFICE |
Hub Chowki, Viii. Beirut,
Tehsil Hub |
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Lasbella District,
Balochistan. |
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| CITY OFFICE |
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6, Nadir House, 3rd
Floor, |
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I. I. Chundrigar Road, |
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Karachi. |
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Phone: 2427806-9 |
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Fax: 2414790 |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 24th Annual General Meeting of LATIF JUTE MILLS
LIMITED will be held at the |
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| Registered
Office at Hub Chowki, Village Beirut, Tehsil Hub, Lasbella District,
Balochistan on Monday, |
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| December
24, 2001 at12:30 p.m. to transact the following business: |
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| ORDINARY
BUSINESS |
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| 1.
To confirm the minutes of the 23rd Annual General Meeting held on December
23, 2000. |
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| 2.
To receive and adopt the Audited Accounts of the Company for the year ended
June 30, 2001 |
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| together
with Directors' and Auditors' Report thereon. |
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| 3.
To appoint Auditors for the year 2001-2002 and fix their remuneration. |
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| 4.
To transact any other business as may be placed before the meeting with the
permission of the |
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| Chair. |
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By order of the board |
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| KARACHI |
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|
Muhammad Suhail Hingora |
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| Dated:
November 26, 2001 |
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Company Secretary |
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| NOTES: |
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| i.
The Share Transfer Book of the Company will remain closed from Monday,
December 17, 2001 |
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| to
Monday, December 24, 2001 (both days inclusive). |
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|
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| ii.
Transport will be provided to the members of the Company. Pick-up point will
be at Karachi |
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| Stock
Exchange Building and departure time will be at 11:00 a.m. sharp on December
24, 2001. |
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| iii.
Proxies in order to be valid must be received at City Office not later than
48 hours before the |
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| meeting. |
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| iv.
Shareholders whose shares are deposited with Central Depository System (CDS)
are requested |
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| to
bring Original National Identity Card (NIC) along with their account number
in CDS for verifica- |
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| tion. |
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|
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| v.
Shareholders are requested to promptly notify the Company of any change in
address. |
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| CHAIRMAN/DIRECTORS'
REPORT TO THE SHAREHOLDERS |
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| Assalam-O-Alaikum |
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| The
directors of the company welcome you to the twenty-fourth annual general
meeting and present before |
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| you
the audited accounts for the year ended June 30, 2001. |
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| During
the year under review posed serious and complex problems resulting the
company has sustained a |
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| loss
of Rs. 28,366,754/- after providing turnover tax amounting to Rs. 825,000/-
and taking into account the |
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| reversal
of deferred tax provision of Rs. 3,500,000/- and prior years' tax provisions
of Rs. 102,614/- the net loss |
|
| stands
at Rs. 34,748,022/-. |
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| The
sales and production of the company both were decreased from Rs. 240.192
million to 187.733 million |
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| and
from 5,938 M. Tons to 5,201 M. Tons respectively. |
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| The
adverse result of the operation of the company is mainly attributed to the
non lifting of finished goods by |
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| the
government food agencies for first nine(09) months (i.e. from July 2000 to
March 2001). The company had |
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| been
supplying over 11,000 bales an average of last four years to the government
food agencies but for the |
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| period
under review the company supplied only 4,773 bales. We are still awaiting our
bill amounting to Rs. |
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| 5.156
million and bank guarantee for Rs. 1.982 million from Sindh Food Department
against the supply of jute |
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| bags
made in the month of April 2001. This method discourage many sellers to
participate in the tenders and |
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| will
create a system to monopolize the supplies by very few. |
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| It
has been uneconomical to continue pilling up finished goods for delivery to
government food agencies who |
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| are
major buyers of jute bags. It is unfortunate that management has been
compelled to close jute bags |
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| manufacturing
division as permanent for the participation in these tenders receiving late
payments and mak- |
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| ing
losses. It had also resulted in making many workers jobless. |
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| The
management as stated in the last report had been compelled to reduce
expenditure to cut down costs. |
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| The
impact of these measures can be viewed by comparing administration and
selling expenses with last |
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| years.
Your directors are not very optimistic about the future of the Jute Industry.
It is upto government to help |
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| and
save the Jute Industry from total collapse by adopting improve policy of
purchases and payments. |
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| The
Revaluation of land and building of the company has been carried out by M/s.
Surval Consulting Engi- |
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| neers
and the same has been incorporated in the accounts to reflect the present
correct value. |
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|
| Mr.
Arif Yousuf Jaliawala has been co-opted as a member of the board of directors
in place of Mr. Ghulam |
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| Muhammad
who resigned from the of directorship due to his bad health. The board has
accepted the resigna- |
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| tion
with regret and places on record the deep appreciation for his valuable
guidance and advices received |
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| from
time to time during the tenure of his directorship. The board prayed for
early recovery of his health. |
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| The
present auditors M/s. M. Yousuf Adil Saleem & Co. Chartered Accountants
have retired and are eligible |
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| to
offer themselves for re-appointment for the year 2001-2002 on the
remuneration to be decided by the |
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| directors. |
|
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| Pattern
of shareholding is attached with the report. |
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| We
wish to record our deep appreciation for the loyalty, devotion to duty and
co-operation by the staff and |
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| workers
of the company through these troubled times. |
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On behalf of the board |
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|
YAHYA AHMED BAWANY |
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| Dated:
November 26, 2001 |
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Chairman |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of LATIF JUTE MILLS
LIMITED as at June 30, 2001 and the |
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| related
profit and loss account, statement of changes in equity and cash flow
statement together with the |
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| notes
forming part thereof, for the year then ended and we state that we have
obtained all the information and |
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| 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, |
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| and
prepare and present the above said statements in conformity with the approved
accounting standards and |
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| the
requirements of the Companies Ordinance, 1984. Our responsibility is to
express an opinion on these |
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| statements
based on our audit. |
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| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These stan- |
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| dards
require that we plan and perform the audit to obtain reasonable assurance
about whether the above said |
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| statements
are free of any material misstatement. An audit includes examining, on a test
basis, evidence |
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| supporting
the amounts and disclosures in the above said statements. An audit also
includes assessing the |
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| accounting
policies and significant estimates made by management, as well as, evaluating
the overall pre- |
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| sentation
of the above said statements. We believe that our audit provides a reasonable
basis for our opinion |
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| and,
after due verification, we report that: |
|
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| (a)
in our opinion, proper books of account have been kept by the company as
required by the |
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| Companies
Ordinance, 1984; |
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|
|
|
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| (b)
in our opinion: |
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|
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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 account and are further in accordance with accounting policies |
|
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| consistently
applied; |
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|
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| ii)
the expenditure incurred during the year was for the purpose of the Company's
business; and |
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| iii)
the business conducted, investments made and the expenditure incurred during
the |
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| year
were in accordance with the objects of the Company; |
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|
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| (c)
in our opinion and to the best of our information and according to the
explanations given to us, |
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| the
balance sheet, profit and loss account, statement of changes in equity and
Cash flow |
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| statement
together with the notes forming part thereof conform with approved accounting |
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| standards
as applicable in Pakistan, and, 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 |
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| of
the company's affairs as at June 30, 2001 and of the loss, its cash flows and
changes in |
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| equity
for the year then ended; and |
|
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| d)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
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| Without
qualifying our opinion, we would like to draw attention of the members that
Rs. 6.479 |
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| million
due to Employee Provident Fund is not paid by the Company (Refer Note 10). |
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|
M. YOUSUF ADIL SALEEM & CO. |
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| Karachi:
November 26, 2001 |
|
Chartered Accountants |
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| BALANCE
SHEET AS AT JUNE 30, 2001 |
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|
2001 |
2000 |
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|
Note |
Rupees |
Rupees |
|
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| SHARE
CAPITAL |
|
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| Authorised |
|
|
|
| 5,000,000
Ordinary shares |
|
|
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| of Rs. 10/= each |
|
50,000,000 |
50,000,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| Issued,
subscribed and paid up |
|
3 |
35,574,000 |
35,574,000 |
|
|
| Accumulated
loss |
|
|
(34,748,022) |
(9,158,882) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
825,978 |
26,415,118 |
|
|
|
|
|
|
|
| SURPLUS
ON REVALUATION |
|
|
|
|
| OF
FIXED ASSETS |
|
4 |
67,568,689 |
-- |
|
|
| LONG
TERM LOANS |
|
5 |
15,845,633 |
15,000,000 |
|
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
| SUBJECTTORNANCELEASE |
|
6 |
2,256,236 |
6,021,356 |
|
|
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
|
| Staff gratuity |
|
|
5,510,913 |
5,510,913 |
|
25,208,131 |
18,578,912 |
|
| Taxation |
|
7 |
-- |
3,500,000 |
|
|
| Others |
|
8 |
19,682,332 |
1,695,451 |
|
11,927,016 |
23,303,604 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
25,193,245 |
10,706,364 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Short
term borrowings |
|
9 |
37,881,253 |
43,231,124 |
|
12,307,234 |
11,814,675 |
|
| Current
portion of long term loans |
|
|
10,154,367 |
5,000,000 |
|
|
| Current
portion of lease liabilities |
|
|
3,629,972 |
4,718,399 |
|
|
| Creditors,
accrued and |
|
|
|
|
|
| other liabilities |
|
10 |
30,198,885 |
18,543,684 |
|
|
| Taxation |
|
|
825,000 |
1,042,050 |
|
|
I |
|
|
|
------------------ |
------------------ |
|
|
|
|
82,689,477 |
72,535,257 |
|
|
| COMMITMENTS |
|
11 |
|
|
|
------------------ |
------------------ |
|
|
|
|
194,379,258 |
130,678,095 |
|
194,379,258 |
130,678,095 |
|
|
========== |
========== |
|
|
|
|
| OPERATING
ASSETS |
|
12 |
123,214,931 |
61,966,478 |
|
| LONG
TERM DEPOSITS |
|
13 |
709,825 |
1,972,070 |
|
|
|
|
|
| CURRENTASSETS |
|
|
|
| Stores,
spares and |
|
|
|
| loose tools |
|
14 |
11,081,489 |
10,701,500 |
|
| Stock in trade |
|
15 |
25,208,131 |
18,578,912 |
|
| Trade debtors |
|
16 |
11,927,016 |
23,303,604 |
|
|
| Loans,
advances, deposits |
|
| and
prepayments |
|
17 |
12,307,234 |
11,814,675 |
|
| Marketable
securities |
|
18 |
1,041,435 |
779,085 |
|
| Other
receivables |
|
19 |
5,342,240 |
-- |
|
| Cash
and bank balances |
|
20 |
3,546,957 |
1,561,771 |
|
|
|
------------------ |
------------------ |
|
|
70,454,502 |
66,739,547 |
|
|
------------------ |
------------------ |
|
|
194,379,258 |
130,678,095 |
|
|
========== |
========== |
|
|
|
|
|
M. TARIQ BAWANY |
|
ARIF S. GAZI |
|
|
Chief Executive Officer and Director |
|
Director |
|
|
| The
annexed notes from 1 to 33 form an integral part of these accounts. |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
| Sales |
|
|
187,733,493 |
240,192,332 |
|
| Sales
tax and other deductions |
|
|
(25,750,256) |
(31,782,269) |
|
|
|
------------------ |
------------------ |
|
| Net sales |
|
|
161,983,237 |
208,410,063 |
|
| Cost
of goods sold |
|
|
(159,856,641) |
(193,140,913) |
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
2,126,596 |
15,269,150 |
|
| Operating
expenses |
|
|
|
|
| Administration |
|
|
|
12,141,369 |
14,478,768 |
|
| Selling |
|
|
|
2,705,900 |
3,301,477 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
(14,847,269) |
(17,780,245) |
|
|
|
------------------ |
------------------ |
|
| Operating loss |
|
|
(12,720,673) |
(2,511,095) |
|
| Other income |
|
|
397,708 |
506,586 |
|
|
------------------ |
------------------ |
|
|
(12,322,965) |
(2,004,509) |
|
| Other charges |
|
|
|
| Financial |
|
|
26 |
16,043,789 |
15,772,775 |
|
| Reversal
of diminution in value of |
|
|
|
|
| marketable
securities |
|
|
-- |
(109,655) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(16,043,789) |
(15,663,120) |
|
|
|
|
|
------------------ |
------------------ |
|
| Loss
for the year before taxation |
|
|
(28,366,754) |
(17,667,629) |
|
|
|
|
|
| Taxation |
|
|
|
| Current |
|
|
825,000 |
1,042,050 |
|
| Prior years' |
|
|
(102,614) |
533,611 |
|
| Deferred |
|
|
(3,500,000) |
1,000,000 |
|
|
|
------------------ |
------------------ |
|
|
|
|
2,777,614 |
(2,575,661) |
|
|
|
|
------------------ |
------------------ |
|
| Loss
after taxation |
|
|
(25,589,140) |
(20,243,290) |
|
| Unappropriated
(loss) / profit brought forward |
|
(9,158,882) |
84,408 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(34,748,022) |
(20,158,882) |
|
|
|
|
|
|
|
|
|
| Appropriations |
|
|
|
|
| Transferred
from general reserve |
|
-- |
11,000,000 |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
loss carried forward |
|
(34,748,022) |
(9,158,882) |
|
|
========== |
========== |
|
| Earning
per share |
|
27 |
(7.19) |
(5.69) |
|
|
|
|
|
|
|
|
M. TARIQ BAWANY |
|
|
ARIF S. GAZI |
|
|
Chief Executive Officer and Director |
|
|
Director |
|
|
| The
annexed notes from 1 to 33 form an integral part of these accounts. |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
|
Issued, |
|
|
|
subscribed |
|
|
|
and paidup |
Capital |
General |
Accumulated |
|
|
|
Capital |
Reserve |
Reserve |
(Loss)/Profit |
Total |
|
|
|
Rupees |
|
|
|
|
|
|
| Balance
at June 30, 1999 |
32,340,000 |
3,234,000 |
11,000,000 |
84,408 |
46,658,408 |
|
|
| Loss
after taxation |
-- |
-- |
-- |
(20,243,290) |
(20,243,290) |
|
|
|
|
|
| Appropriations |
|
|
| Issue
of bonus shares |
3,234,000 |
(3,234,000) |
-- |
-- |
-- |
|
| Transferred
from general reserve |
-- |
-- |
(11,000,000) |
11,000,000 |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
at June 30, 2000 |
35,574,000 |
-- |
-- |
(9,158,882) |
26,415,118 |
|
|
| Loss
after taxation |
-- |
-- |
-- |
(25,589,140) |
(25,589,140) |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| Balance
at June 30, 2001 |
35,574,000 |
-- |
-- |
(34,748,022) |
825,978 |
|
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
M. TARIQ BAWANY |
|
ARIF S. GAZI |
|
|
Chief Executive Officer and Director |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
|
Rupees |
Rupees |
|
| A.
CASH FROM OPERATING ACTIVITIES |
|
| Loss
before taxation |
|
(28,366,754) |
(17,667,629) |
|
| Adjustment for |
|
|
|
|
| Depreciation |
|
|
5,917,254 |
6,783,610 |
|
| Financial
charges |
|
16,043,789 |
15,772,775 |
|
| Provision
for doubtful debts |
|
-- |
300,000 |
|
| Gain
on disposal of fixed assets |
|
(211,327) |
(212,391) |
|
| Operating
(loss) / profit before changes in |
|
------------------ |
------------------ |
|
| operating
assets and liabilities |
|
(6,617,038) |
4,976,365 |
|
|
| Changes
in operating assets and liabilities |
|
| (Increase)/decrease
in operating assets |
|
| Stores,
spares and loose tools |
|
|
(379,989) |
(915,830) |
|
| Stock in trade |
|
|
(6,629,219) |
24,596,711 |
|
| Trade debtors |
|
|
11,376,588 |
(22,242,399) |
|
| Loans,
advances, deposits and prepayments |
|
(62,587) |
(1,641,014) |
|
| Other
receivables |
|
|
(11,163) |
749,753 |
|
| Long
term deposits |
|
|
1,262,245 |
53,702 |
|
| Increase
/ (decrease) in operating liabilities |
|
|
|
| Creditors,
accrued and other liabilities |
|
11,980,089 |
5,465,293 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
10,918,906 |
11,042,581 |
|
|
| Financial
charges paid |
|
|
(16,368,677) |
(11,436,284) |
|
| Tax paid |
|
|
(6,700,465) |
(7,816,066) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in operating activities |
|
(12,150,236) |
(8,209,769) |
|
|
========== |
========== |
|
|
| B.
CASH FROM INVESTING ACTIVITIES |
|
| Proceeds
from disposal of fixed assets |
|
730,000 |
707,000 |
|
| Fixed
capital expenditure |
|
|
(115,691) |
(1,617,597) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from / (used in) investing activities |
|
614,309 |
(910,597) |
|
|
========== |
========== |
|
|
| C.
CASH FROM FINANCING ACTIVITIES |
|
| Long
term loan obtained |
|
6,000,000 |
20,000,000 |
|
| Advance
from associated undertaking / directors |
|
23,936,881 |
(695,452) |
|
| Repayment
of long term loans |
|
(5,950,000) |
(2,587,500) |
|
| Lease
finance obtained |
|
|
-- |
680,000 |
|
| Repayment
of lease liability |
|
(4,853,547) |
(3,787,494) |
|
|
------------------ |
------------------ |
|
| Net
cash from financing activities |
|
|
19,133,334 |
13,609,554 |
|
|
|
|
------------------ |
------------------ |
|
| Net
increase in cash and cash equivalents |
|
7,597,407 |
4,489,188 |
|
| Cash
and cash equivalents at the beginning of the year |
(40,890,268) |
(45,379,456) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of the year |
|
(33,292,861) |
(40,890,268) |
|
|
========== |
========== |
|
|
| Cash
and cash equivalents |
|
| Cash
and bank balances |
|
|
3,546,957 |
1,561,771 |
|
| Short
term borrowings |
|
|
(37,881,253) |
(43,231,124) |
|
| Marketable
securities |
|
|
1,041,435 |
779,085 |
|
|
------------------ |
------------------ |
|
|
|
(33,292,861) |
(40,890,268) |
|
|
========== |
========== |
|
|
|
M. TARIQ BAWANY |
|
ARIF S. GAZI |
|
|
Chief Executive Officer and Director |
|
Director |
|
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
| 1.
STATUS AND ACTIVITIES |
|
|
|
| It
is a Public Company Limited by shares incorporated in Pakistan on July 14,
1977 and quoted on |
|
| Karachi
Stock Exchange. The Company is engaged in the manufacture and sale of jute
products. The |
|
| Mills
is located near Hub Industrial Trading Estate in the Province of Baluchistan. |
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
|
|
