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Burewala Textile Mills Limited
Annual Report 1999
CONTENTS
Company Information
Five years at a Glance
Notice of Annual General Meeting
Directors' Report
Auditors' Report
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Notes to the Accounts
Pattern of Shareholdings
COMPANY INFORMATION
Board of Directors		Ahmed Dawood
		M. Hussain Dawood, Chief Executive
		Shahzada Dawood
		Khawaja Amanullah
		Mohammad Aslam
		Malik Mushtaq Ali Khan
		Iftikhar Ahmed Dar
Company Secretary		Aftab Ahmed Qaiser
Auditors		Rahman Sarfaraz & Co.
		Chartered Accountants
		Nawa-i-Waqt Building
		4-Shahrah-e-Fatima Jinnah
		Lahore
Bankers		Habib Bank Limited
		United Bank Limited
Registered Office		35-A, Shahrah-e-Abdul Hameed Bin Badees
		(Empress Road) Lahore-54000.
		Phones' 6301601-07
Mills		Dawoodabad
		District Vehari
		Phone; (0447) 53246, 53145, 53347
FIVE YEARS AT A GLANCE
						(Rupees in Thousands)
Particulars		1999	1998	1997	1996	1995
Capital Reserves:
Paid up Capital		73,074	73,074	73,074	73,074	73,074
Reserves & Surplus		262,845	280,883	259,962	247,538	250,332
Shareholders equity		335,919	353,957	333,036	320,612	323,406
Break up value of
Shares of Rs. 10 each		45.97	48.44	45.58	43.87	44.26
Sales:
Export		--	--	--	--	8,408
Local		373,900	360,277	445,896	479,015	273,137
		------------------	------------------	------------------	------------------	------------------
Total		373,900	360,277	445,896	475,912	279,545
		------------------	------------------	------------------	------------------	------------------
Profit
Profit before Taxation		32,318	38,460	32,490	45,485	5,083
Profit after Taxation		33,113	39,190	48,961	33,743	9,052
Dividend
Cash %		70	25	50	50	--
Amount		51,151	18,269	36,537	36,537
Earning per Share		4.53	5.36	6.70	4.62	1.24
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Forty Sixth Annual General Meeting of the shareholders of
the Company will Insha Allah be held on Tuesday 21 March 2000 at 10:30 a.m. at the
Registered Office of the Company, 35-A Shahrah-e-Abdul Hameed Bin Badees, Lahore,
to transact the following business after recitation from the Holy Quran.
1. To confirm the minutes of the Forty Fifth Annual General Meeting,
2. To receive, consider and adopt the audited Accounts of the Company for the
year ended 30 September 1999 together with the Directors' and Auditors'
Report thereon.
3. To consider and approve payment of cash dividend as recommended by the
Directors.
4. To appoint Auditors and fix their remuneration. M/s. Rahman Sarfaraz &
Company, the retiring Auditors of the Company, being eligible offer
themselves for re-appointment.
5. To transact any other business with the permission of the Chairman.
					BY ORDER OF THE BOARD
Lahore:					AFTAB AHMED QAISER
Dated; 15 February 2000					Company Secretary
Notes:
1. The share transfer books of the Company will remain closed from 14 March 2000 to
21 March 2000 (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. Shareholders are requested to notify the change in their addresses, if any,
4. Members are also informed that the Supreme Court of Pakistan in a recent judgment
has held that deductions on account of zakat shall not be made from payments
against dividends to the members of all recongnized fiqahs on filing declarations as
required under the Zakat Ordinance. Accordingly, you are requested to file a
declaration on non judicial stamp paper of Rs, 20/= duly attested by Oath
Commissioner.
DIRECTORS' REPORT
Dear Shareholders
Assalam-u-Alaikum
Your Directors feel pleasure to present before you the forty sixth annual report together with audited accounts of
the Company and the auditors report thereon for the year ended 30th September 1999. Your Company has
earned a pretax profit of Rs. 32,318,102 after charging all operational, administrative, financial and selling
expenses including depreciation amounting to Rs. 13,743,752 as against pretax profit of Rs. 38,459,635 in the
preceding year.
Your directors have recommended the appropriation of current year's profit as under:
					Rupees
Pretax Profit					32,318,102
Provision for taxation
Current -- for the year					(1,900,000)
Deferred Taxation					2,695,133
					------------------
After tax profit					33,113,235
Un-appropriated Profit B/F					36,141,723
					------------------
Profit available for appropriation					69,254,958
					==========
Appropriation:
Proposed Dividend @ 70%,					51,151,835
Retained Earning.					18,103,123
					------------------
					69,254,958
					==========
The Company is still pursuing the policy of producing fine count of yarns and fabrics. Ironically, the imposition of
ad-valorem Sales Tax is punishing us for our efforts to increase value addition.
The Company has earned Other Income of Rs. 49,196,665 including Dividend Income of Rs. 40,116,130.
The earning per share of the Company is Rs. 4.53.
The Company's Sales and Cash flows are indicating an upward trend and give a significant indication of
improved prospects. The cotton prices in the current year reinforce the management's optimism.
Y2K problem was adequately handled by the Company.
The present auditors M/s. 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.
The pattern of shareholding as required by section 236 of the Companies Ordinance, 1984 is enclosed.
					For & on behalf of the Board
LAHORE					M. Hussain Dawood
Dated: 15 February 2000					Chief Executive
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed Balance Sheet of THE BUREWALA TEXTILE MILLS
LIMITED as at 30 September 1999 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 accountin9 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, 1999 and of
the Profit and the Cash Flow 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.
LAHORE					(RAHMAN SARFARAZ & CO.)
Dated: 15 February 2000					Chartered Accountants
BALANCE SHEET AS AT 30TH SEPTEMBER 1999
					1999	1998
				Note	Rupees	Rupees
CAPITAL AND 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
7,307,405 ordinary shares of Rs. 10/- each				3	73,074,050	73,074,050
Reserves & surplus				4	262,844,811	280,883,411
					==========	==========
					335,918,861	353,957,461
Long term loans & deferred liabilities
Deferred taxation					25,000,000	27,695,133
Obligation under finance lease					1,001,618	--
Other deferred liabilities					11,219,260	11,175,095
					------------------	------------------
					37,220,878	38,870,228
Current liabilities
Creditors, provisions & accrued expenses				9	449,444,161	45,293,945
Provision for taxation					114,787,021	11,891,769
Dividend - unclaimed					3,070,510	9,427,750
- proposed					51,151,835	18,268,513
					------------------	------------------
					110,645,463	84,881,977
Contingencies and commitments				10	--	--
					------------------	------------------
					483,785,202	477,709,666
					==========	==========
PROPERTY & ASSETS
Fixed Assets
Operating Assets				11	133,718,700	145,969,934
Investments				12	64,639,262	64,639,262
Long Term Deposits					1,852,281	1,712,394
Current Assets
Stores and spares				13	19,399,626	20,310,479
Stock in trade				14	195,911,032	178,301,066
Book debts				15	27,120,595	14,658,104
Advances, deposits, prepayments
and other receivables				16	6,107,450	13,310,417
Cash and Bank balances				17	35,036,256	38,808,010
					------------------	------------------
					283,574,959	265,388,076
					------------------	------------------
					483,785,202	477,709,666
					==========	==========
Note: The annexed notes from 1 to 26 form an integral part of these accounts.
LAHORE
Dated: 15 February 2000
	Khawaja Amanullah				M. Hussain Dawood
	DIRECTOR				CHIEF EXECUTIVE
PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED 30TH SEPTEMBER 1999
					1999	1998
				Note	Rupees	Rupees
Gross Sales					373,699,783	360,276,873
Brokerage					(294,457)	(178,903)
					------------------	------------------
Net Sales					373,605,326	360,097,970
Cost of Sales				18	358,537,398	338,233,590
					------------------	------------------
Gross Profit					15,067,928	21,864,380
Operating Expenses
Administrative				19	25,735,454	24,070,780
Selling & Distribution				20	4,655,860	5,667,818
Financial				21	545,326	316,761
Depreciation					1,009,851	836,225
					------------------	------------------
					31,946,491	30,891,584
					------------------	------------------
Operating Loss					(16,878,563)	(9,027,204)
Other Income				22	49,196,665	47,406,039
					------------------	------------------
Pretax Profit					32,318,102	38,459,635
Provision for taxation
Current - For the year					1,900,000	1,800,000
- Prior years					--	(4,243,709)
Deferred					(2,695,133)	1,713,725
					------------------	------------------
					(795,133)	(729,984)
					------------------	------------------
Profit after Tax					33,113,235	39,189,619
Un-appropriated profit b/f					36,141,723	15,220,617
					------------------	------------------
Profit available for appropriation					69,254,958	54,410,236
Appropriation
Proposed dividend @ 70% (1998: 25%)					(51,151,835)	(18,268,513)
					------------------	------------------
Un-appropriated Profit Carried to Balance Sheet					18,103,123	36,141,723
					==========	==========
	Khawaja Amanullah				M. Hussain Dawood
	DIRECTOR				CHIEF EXECUTIVE
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30TH SEPTEMBER 1999
					1999	1998
				Note	Rupees	Rupees
Cash Flow From Operating Activities
Net Income before taxation					32,318,102	38,459,635
Adjustment for non cash charges
Depreciation					13,743,752	15,421,923
Provision for gratuity					6,500,000	6,000,000
Profit on sale of fixed assets					---	(270,295)
					------------------	------------------
					20,243,752	21,151,028
Cash provided (used) by working capital
Stores & Spares					910,853	275,664
Stock in trade					(17,609,966)	(2,740,424)
Book Debts					(12,462,491)	3,475,201
Advances, deposits, prepayments etc.					7,202,967	(3,891,929)
Creditors, provision & accrued expenses					(349,529)	(2,361,044)
					------------------	------------------
					(22,308,166)	(5,242,532)
Gratuity paid					(6,455,834)	(5,991,052)
Income tax paid					(2,313,067)	(837,541)
					------------------	------------------
					21,484,787	47,540,138
Cash Flow From Investing Activities
Sale proceeds of fixed assets					--	383,333
Capital expenditure					(112,500)	(1,876,644)
Long term deposits					(139,887)	--
Assets on lease					(1,380,018)	--
					------------------	------------------
					(1,632,405)	(1,493,311)
Cash flow from financing activities
Long term loans-suppliers credit					--	(5,118,708)
Obligation under finance lease					1,001,618	--
Dividend paid					(24,625,754)	(33,362,438)
					------------------	------------------
					(23,624,136)	(38,481,146)
					------------------	------------------
Increase/(decrease) in cash & cash equivalent					(3,771,754)	7,565,682
Cash & cash equivalent at the beginning of the year					38,808,010	31,242,328
					------------------	------------------
Cash & cash equivalent at the end of the year					35,036,256	38,808,010
					==========	==========
	Khawaja Amanullah				M. Hussain Dawood
	DIRECTOR				CHIEF EXECUTIVE
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 30TH SEPTEMBER 1999
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 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 un-funded 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 Savings 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 11.
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.
e) Investments:
All investments are shown at cost except in Karnaphuli Paper Mills Limited
presently under foreign occupation, which is shown at nominal value of Re. 1.
f) Stock and stores:
These are valued as under:
Stores and spares		at moving average cost
Raw material		at lower of average cost or market value
Work in process		at average cost
Wastes		at market value
Finished goods		at lower of average cost or market value
g) Accounting for lease:
The company accounts for assets acquired under finance lease by recording the
assets and related liabilities. Finance charges are allocated in a manner so as to
provide a constant periodic rate of charge on the outstanding liabilities.
Depreciation is charged at the rates specified in Note No. 11 to write off the assets
over their estimated useful life.
h) Revenue Recognition:
Revenue from sales is recognized on delivery of goods to customers. Interest is
accounted for on maturity / receipts and rebates are accounted for when allowed.
i) General:
(i) Figures are rounded off to the nearest rupee.
(ii) Figures of previous year are rearranged and regrouped to facilitate
comparison wherever necessary.
3. SHARE CAPITAL
					1999	1998