| Lawrencepur Woollen & Textile Mills
Limited |
|
|
|
|
|
|
|
| Annual
Report 1999 |
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|
|
| 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 |
|
|
| Board
of Directors |
Ahmed Dawood |
|
|
|
|
|
|
M. Hussain Dawood (Chief
Executive) |
|
|
|
|
|
|
Khan Amir Abdullah Khan
Rokhri |
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|
|
|
|
|
Taj Mohammad Khanzada |
|
|
|
D.S.O.M.C
(Fakhar-e-Kashmir) |
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|
|
|
|
Shahzada Dawood |
|
|
|
|
|
Khawaja Amanullah |
|
|
|
|
Sardar Ali Khan |
|
|
|
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| Company
Secretary |
Aftab Ahmed Qaiser |
|
|
|
|
| Auditors |
|
M. Hussain Chaudhury
& Co. |
|
|
|
Chartered Accountants |
|
|
|
|
| Bankers |
|
Habib Bank Limited |
|
|
|
National Bank Of Pakistan |
|
|
|
Askari Commercial Bank
Ltd. |
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|
|
| Registered
Office |
35-A, Shahrah-e-Abdul
Hameed Bin Badees |
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|
|
(Empress Road) Lahore |
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|
Phones: 6301601-07 |
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| Mills |
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Dawoodpur, |
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|
District Attock |
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|
Phone: (0597) 641074-76 |
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| NOTICE
OF ANNUAL GENERAL MEETING |
|
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| Notice
is hereby given that the Thirty Nineth Annual General Meeting of the
shareholders |
|
| of
the Company will Insha Allah be held on Tuesday 7 December 1999 at 3:00 p.m.
at the |
|
| Registered
Office of the Company at Lahore to transact the following business: |
|
|
| 1)
Recitation from the Holy Quran. |
|
|
| 2)
To confirm the minutes of the Thirty Eighth Annual General Meeting held on |
|
| 17
December 1998. |
|
|
| 3)
To receive, consider and adopt the Audited Accounts of the Company for the
year |
|
| ended
30 June 1999 together with the Directors' and Auditors' Reports thereon. |
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|
|
|
| 4)
To consider and approve payment of cash dividend as recommended by the |
|
| Directors. |
|
|
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| 5)
To appoint Auditors and to fix their remuneration. M/s. M. Hussain Chaudhury
& |
|
| Company,
the retiring Auditors of the Company, being eligible, offer themselves |
|
| for
re-appointment. |
|
|
| 6)
To transact any other business with the permission of the Chairman. |
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|
BY ORDER OF THE BOARD |
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|
|
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|
|
|
|
AFTAB AHMED QAISER |
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| Lahore:
12 November 1999 |
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|
|
Company Secretary |
|
|
| Notes: |
|
|
| 1.
The share transfer books of the company will remain closed from 30-11-1999 to |
|
| 0%
12-1999. (both days inclusive) |
|
|
| 2.
A member entitled to attend and vote at the Meeting may appoint another
member as |
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| his/her
proxy to attend and vote. Votes may be given personally or by proxy or by an |
|
| attorney
or in case of Corporation by a representative duly authorised. The instrument |
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| of
proxy duly executed should be lodged at the Registered Office of the Company
not |
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| later
than forty eight hours before the meeting. |
|
|
| 3.
Shareholders are requested to notify the change in address if any,
immediately. |
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|
|
| DIRECTORS'
REPORT |
|
|
| Your
Directors have pleasure in presenting the 39th Annual Report along with the
audited |
|
| accounts
of the Company for the year ended 30th June 1999 and the Auditors' Report |
|
| thereon. |
|
|
| By
the grace of Allah this year's results are quite encouraging considering the
recessionary |
|
| environment
in the country. This is largely due to the unusual devotion and hard work of |
|
| the
management and its constant monitoring of all aspects of the company's
operations. |
|
|
| The
market is still exposed to the influx of cheap smuggled goods. As a result,
the capacity |
|
| utilization
of our plant is severely restricted. |
|
|
| In
spite of the depressed conditions your company, made a significant progress
as is evident |
|
| from
the enclosed operating results. The gross profit rose to Rs.56,611,007 during
the year |
|
| under
review, as compared to Rs.50,496,939 for the previous year. Consequently the
net |
|
| profit
before taxation has reached a figure of Rs.26,869,474 as compared to
Rs.26,491,394 |
|
| of
the previous year, after providing for all the operating, administrative and
financial |
|
| expenses
and depreciation of Rs. 16,786,822 for the year. Therefore, the total
available |
|
| profit
is as under:- |
|
|
| Un-appropriated
profit brought forward from the previous year. |
|
54,222,072 |
|
| Add:
Profit before taxation for the current year. |
|
26,869,474 |
|
|
|
|
------------------ |
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| Total
available for appropriation. |
|
|
81,091,546 |
|
|
|
|
========== |
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|
|
|
| Your
directors have recommended the following appropriation of financial results. |
|
|
| Provision
for Taxation. |
|
|
10,000,000 |
|
| Dividend
on cumulative redeemable preference shares @ 9%. |
|
2,336,400 |
|
| Dividend
on Ordinary shares @ Rs.2.25 per share of Rs. 10 each. |
|
11,299,998 |
|
| Un-appropriated
profit carried over. |
|
57,455,148 |
|
|
|
|
------------------ |
|
|
|
|
Total |
81,091,546 |
|
|
|
|
========== |
|
|
| The
Company is aware of the year 2000 millennium bug. In our opinion Y2K
compliance |
|
| for
computer is not going to create any problem for us. |
|
|
| 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 re-appointment. |
|
|
|
|
ON BEHALF OF THE BOARD |
|
|
|
|
|
|
| LAHORE |
|
|
Taj Mohammad Khanzada |
|
| Dated
28-10-1999 |
|
Chairman of the meeting |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of LAWRENCEPUR WOOLLEN & TEXTILE |
|
| MILLS
LIMITED as at June 30, 1999 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 and 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 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 June 30, 1999 and of
the |
|
| profit
and the cash flows for 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 that Ordinance. |
|
|
| LAHORE |
|
|
(M. HUSSAIN CHAUDHURY & CO.) |
|
| Dated:
28 October, 1999. |
|
Chartered Accountants |
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|
|
| BALANCE
SHEET AS AT 30TH JUNE, 1999 |
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|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
| CAPITAL
AND LIABILITIES |
|
|
|
| Share
Capital & Reserves |
|
|
|
| Authorised: |
|
|
|
| 7,000,000
ordinary shares of Rs. 10 each |
|
70,000,000 |
70,000,000 |
|
| 30,000
cumulative redeemable preference |
|
|
| shares
of Rs. 1,000 each |
|
30,000,000 |
30,000,000 |
|
|
|
------------------ |
------------------ |
|
|
|
100,000,000 |
100,000,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Issued,
subscribed and fully paid up: |
|
|
| Ordinary shares |
|
|
3 |
50,222,170 |
50,222,170 |
|
|
|
|
|
| Preference
shares |
|
4 |
25,960,000 |
25,960,000 |
|
| Reserves
and Surplus |
|
|
|
| Reserves |
|
|
5 |
104,543,613 |
104,543,613 |
|
| Un-appropriated
profit |
|
|
57,455,148 |
54,222,072 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
238,180,931 |
234,947,855 |
|
| Deferred
Liabilities |
|
|
|
|
| Deferred
Taxation |
|
|
6,500,000 |
6,500,000 |
|
| Provision
for gratuity |
|
6 |
43,801,067 |
45,693,349 |
|
| Obligation
Under Finance Lease |
|
7 |
1,415,591 |
1,745,268 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
51,716,658 |
53,938,617 |
|
|
|
|
|
|
| Current
Liabilities |
|
|
|
| Bank
overdrafts-secured |
|
8 |
12,843,493 |
-- |
|
| Current
portion of obligation under finance lease |
|
|
329,677 |
266,963 |
|
| Creditors,
accrued charges and other liabilities |
|
9 |
31,252,894 |
44,087,973 |
|
| Provision
for taxation |
|
10 |
1,624,900 |
6,014,629 |
|
| Proposed
dividend on ordinary shares |
|
|
11,299,998 |
-- |
|
| Proposed
dividend on preference shares |
|
|
2,336,400 |
2,336,400 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
59,687,362 |
52,705,965 |
|
| Contingencies
and Commitments |
|
11 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
349,584,951 |
341,592,437 |
|
|
|
|
========== |
========== |
|
|
| PROPERTY
AND ASSETS |
|
|
|
| Operating
Fixed Assets |
|
12 |
76,732,677 |
87,565,420 |
|
| Long
Term Deposits |
|
|
216,120 |
216,120 |
|
| Investments |
|
13 |
6,000 |
6,000 |
|
|
|
|
|
|
| Current Assets |
|
|
|
|
| Stores
and spares |
|
14 |
47,575,298 |
48,513,625 |
|
| Stock in trade |
|
15 |
159,168,490 |
142,630,028 |
|
| Goods in transit |
|
|
4,377,683 |
1,518,528 |
|
| Book debts |
|
16 |
50,124,225 |
46,444,075 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
17 |
8,022,258 |
2,789,856 |
|
| Cash
and bank balances |
|
18 |
3,362,200 |
11,908,785 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
272,630,154 |
253,804,897 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
349,584,951 |
341,592,437 |
|
|
|
|
|
========== |
========== |
|
| Note:
The annexed notes from 1 to 28 form an integral part of these accounts. |
|
|
| Auditors'
Report to the members (Annexed) |
|
|
| Lahore:
28-10-1999 |
|
|
| DIRECTORS: |
|
| Taj
Mohammad Khanzada |
|
|
M. Hussain Dawood |
|
| Khan
Amir Abdullah Khan Rokhri |
|
|
Chief Executive |
|
| Khawaja
Amanullah |
|
| Sardar Ali Khan |
|
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30TH JUNE, 1999 |
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Sales |
|
19 |
259,032,279 |
250,741,184 |
|
| Cost of sales |
|
20 |
202,421,272 |
200,244,245 |
|
|
|
|
------------------ |
------------------ |
|
| Gross Profit |
|
|
56,611,007 |
50,496,939 |
|
| Administrative,
selling & general expenses |
|
21 |
25,600,213 |
24,980,165 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
Profit |
|
|
31,010,794 |
25,516,774 |
|
| Other income |
|
22 |
880,171 |
4,130,187 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
31,890,965 |
29,646,961 |
|
| Financial
and other charges |
|
23 |
5,021,491 |
3,155,567 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
Before Taxation |
|
|
26,869,474 |
26,491,394 |
|
| Provision
for taxation-Current |
|
|
10,000,000 |
9,500,000 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
After Taxation |
|
|
16,869,474 |
16,991,394 |
|
| Un-Appropriated
Profit Brought Forward |
|
|
54,222,072 |
39,567,078 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
71,091,546 |
56,558,472 |
|
| Appropriation |
|
|
|
|
| Proposed
dividend on ordinary shares |
|
|
11,299,998 |
-- |
|
| Proposed
dividend on preference shares |
|
|
2,336,400 |
2,336,400 |
|
|
|
|
------------------ |
------------------ |
|
|
|
13,636,398 |
2,336,400 |
|
|
|
|
| Un-appropriated
Profit Carried |
|
|
|
------------------ |
------------------ |
|
| to
Balance Sheet |
|
57,455,148 |
54,222,072 |
|
|
|
|
========== |
========== |
|
|
| DIRECTORS: |
|
| Taj
Mohammad Khanzada |
|
M. Hussain Dawood |
|
| Khan
Amir Abdullah Khan Rokhri |
|
Chief Executive |
|
| Khawaja
Amanullah |
|
| Sardar Ali Khan |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION (CASH FLOW) |
|
| STATEMENT
FOR THE YEAR ENDED 30TH JUNE, 1999 |
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| Cash
Flow From Operating Activities |
|
|
| Profit
before taxation |
|
|
26,869,474 |
26,491,394 |
|
| Adjustment
to reconcile net profit before tax |
|
|
|
| to
net cash provided by operating activities |
|
|
|
| Depreciation |
|
|
16,786,822 |
19,284,109 |
|
| Provision
for gratuity |
|
|
4,556,616 |
11,618,333 |
|
| Gain
on disposal of fixed assets |
|
|
(40,023) |
(3,163,215) |
|
| Movement
in working capital |
|
(A) |
(33,508,629) |
19,296,974 |
|
|
|
|
------------------ |
------------------ |
|
| cash
generated from operation |
|
|
(12,205,214) |
47,036,201 |
|
|
|
|
|
|
| Payment For: |
|
|
|
| Staff Gratuity |
|
|
(6,448,898) |
(4,739,615) |
|
| Income tax |
|
|
(20,562,774) |
(9,989,823) |
|
|
|
|
------------------ |
------------------ |
|
|
|
(27,011,672) |
(14,729,438) |
|
|
|
------------------ |
------------------ |
|
| Net
Cash provided/(used)by operating activities |
|
(12,347,412 ) |
58,798,157 |
|
|
|
|
|
|
| Cash
Flow From Investing Activities |
|
|
|
| Capital
Expenditure |
|
(6,025,949) |
(27,589,714 ) |
|
| Proceeds
from sale of fixed assets |
|
111,893 |
3,369,989 |
|
| Long
term deposits |
|
-- |
(216,120) |
|
|
|
------------------ |
------------------ |
|
| Net
cash provided/(used) by investing activities |
|
(5,914,056) |
(24,435,845) |
|
|
|
|
| Cash
Flow From Financing Activities |
|
|
| Bank Overdrafts |
|
12,843,493 |
(16,925,209) |
|
| Lease Finance |
|
(266,963) |
2,012,231 |
|
| Dividend paid |
|
(2,861,647) |
(13,229,007) |
|
|
|
------------------ |
------------------ |
|
| Net
cash provided/(used)by Financing activities |
|
9,714,883 |
(28,141,985) |
|
|
|
------------------ |
------------------ |
|
| Net
(decrease)/Increase in cash |
|
(8,546,585) |
6,220,327 |
|
| Cash
and bank balance at the beginning of the year |
|
11,908,785 |
5,688,458 |
|
|
|
------------------ |
------------------ |
|
| Cash
and bank balance at the end of the year |
|
3,362,200 |
11,908,785 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| A)
Movement in Working Capital |
|
|
| (Increase)/decrease
in current assets: |
|
|
| Stores
and Spares |
|
938,327 |
3,488,002 |
|
| Stock in Trade |
|
(16,538,462) |
24,185,602 |
|
| Goods in transit |
|
(2,859,155) |
(207,769) |
|
| Book debts |
|
(3,680,150) |
(5,437,829) |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
Receivables |
|
967,598 |
(747,234) |
|
|
|
------------------ |
------------------ |
|
| Net
(increase)/decrease in current assets |
|
(21,171,842) |
21,280,772 |
|
|
|
|
|
|
| (Decrease)/increase
in current liabilities |
|
|
|
|
| Creditors,
accrued charges & other Liabilities |
|
|
(12,309,832) |
(1,399,521) |
|
| Worker's
Welfare Fund |
|
(26,955) |
(584,277) |
|
|
|
------------------ |
------------------ |
|
| Net
(decrease)/increase in current liabilities |
|
(12,336,787) |
(1,983,798) |
|
|
|
------------------ |
------------------ |
|
|
|
(33,508,629) |
19,296,974 |
|
|
|
========== |
========== |
|
|
| DIRECTORS: |
|
| Taj
Mohammad Khanzada |
|
| Khan
Amir Abdullah Khan Rokhri |
|
M. Hussain Dawood |
|
| Khawaja
Amanullah |
|
Chief Executive |
|
| Sardar Ali Khan |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED 30TH JUNE 1999 |
|
|
| 1.
THE COMPANY AND ITS OPERATION |
|
| Lawrencepur
Woollen & Textile Mills Limited is a public limited company listed on |
|
| Karachi
and Lahore stock exchanges. The Company is engaged in the manufacture and |
|
| sales
of worsted yams and fabrics. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
| (a)
Accounting convention: |
|
| The
financial statements have been prepared under historical cost convention, |
|
| without
any adjustment for inflation or reference to current values. |
|
|
|
|
| (b)
Gratuity fund: |
|
| The
company operates a funded gratuity scheme covering its management |
|
| employees
and an unfunded gratuity scheme for its non-management 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: |
|
|
| Operating
fixed assets are stated at cost less accumulated depreciation except for |
|
| free
hold land which is stated at cost. |
|
|
|
|
| Depreciation
is charged on reducing balance method at the rates specified in note |
|
| No.
12. Full year's depreciation is charged on additions during the year,
whereas, |
|
| no
depreciation is charged on the assets disposed off during the year. |
|
|
|
|
| Normal
repair and maintenance is charged to revenue as and when incurred. |
|
| Major
renewals and replacements are capitalised. |
|
|
|
|
| Gain
or loss on disposal of fixed assets, if any, is taken to current year' s
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)
Accounting for lease: |
|
| The
company accounts for assets acquired under finance lease by recording the |
|
| assets
and related liabilities. Finance charges are allocated to accounting period |
|
| in
a manner so as to provide a constant periodic rate of charge on the
outstanding |
|
| liability.
Depreciation is charged at the rates specified in note No. 12 to write off |
|
| the
assets over their estimated useful life in view of the certainty of the
assets at |
|
| the
end of the lease period. |
|
|
| (h)
Revenue recognition: |
|
| Revenue
from sales is recognised on delivery of goods to customers. |
|
|
| 3.
SHARE CAPITAL |
|
|
| 1999 |
1998 |
|
1999 |
1998 |
|
| No. of shares |
No. of shares |
|
Rupees |
Rupees |
|
|
|
|
| 1,281,720 |
1,281,720 |
Ordinary shares of |
|
12,817,200 |
12,817,200 |
|
|
Rs. 10 each fully |
|
|
|
paid in cash |
|
|
|
|
|
| 2,366,521 |
2,366,521 |
Ordinary shares of |
|
23,665,210 |
23,665,210 |
