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The General Tyre and
Rubber |
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|
Company of Pakistan
Limited |
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|
(A Bibojee Group Company) |
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|
(33rd ANNUAL REPORT 1996) |
|
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| CONTENTS |
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|
Page |
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|
|
| Company
Profile |
|
2 |
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| Notice
of Meeting |
|
4 |
|
| Chairman's
Review |
|
6 |
|
| Directors'
Report to the Shareholders |
8 |
|
| Five
Years at a Glance |
|
9 |
|
| Graphic
Illustrations |
|
10 |
|
| Auditors'
Report to the Members |
12 |
|
| Balance
Sheet |
|
14 |
|
| Profit
& Loss Account |
|
16 |
|
| Cash
Flow Statement |
|
17 |
|
| Notes
to the Accounts |
|
19 |
|
| Pattern
of Shareholding |
|
37 |
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| Major
Customers |
|
38 |
|
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| BOARD
OF DIRECTORS |
|
|
| Raza
Kuti Khan Khattak |
|
Dr A.S. Hufti |
|
| Chairman |
|
Managing Director |
|
|
|
|
| Brig
(Retd) Hahmud Jan |
|
Ahmed Kuli Khan Khattak |
|
| Humayaun
S. Hufti |
|
Chaudhry Sher Mohammad |
|
| Adnan
Ahmed All |
|
A.K.H. Sayeed |
|
| Irfan
Siddiqui |
|
Shahid Ghaffar |
|
| Abdulazim
Mohammad Ali AI-Shamali |
David R. Johnson |
|
| Dr
J. Mispagel (Technical) |
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| COMPANY
PROFILE |
|
|
| Secretary |
|
| Chaudhry
Sher Mohammad |
|
|
| Bankers |
|
| American
Express Bank Limited |
|
| Deutsche
Bank AG |
|
| Muslim
Commercial Bank Limited |
|
| National
Bank of Pakistan |
|
| Allied
Bank of Pakistan Limited |
|
| Faysal
Bank Limited |
|
| National
Development Finance Corporation |
|
| Banque
Indosuez |
|
| Societe
Generale The French and International Bank |
|
| Bank
AI-Habib Limited |
|
| ANZ
Grindlays Bank |
|
|
| Auditors |
|
| Hameed
Chaudhri & Company |
|
| Chartered
Accountants |
|
|
| Registered
Office & Factory |
|
| H-23/2,
Landhi Industrial Trading Estate, Landhi |
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| Karachi,
Phone: 7738862-3-4-7 |
|
|
| Head Office |
|
| P
& 0 Plaza, I.I. Chundrigar Road, Karachi |
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| Phone:
2417571-4, Fax: 2430662, 2418781 Telex: 21495 6TR PK |
|
|
| Branch
Office |
|
| Lahore |
|
| Gardee
Trust Building, Thornton Road, Lahore. |
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| Phone:
352663 Fax: 7235745 |
|
|
| Islamabad |
|
| Plot
No. 176, 1- 10/3 Kurang Road, Islamabad. |
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| Phone:
449955, 449956 Fax: 417071 |
|
|
| Liaison
Office |
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| 6,
Agha Khan Road |
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| F-6/4,
lslamabad |
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| Phone:
820829 Fax: 220805 |
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|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the Thirtythird Annual General Meeting of The General
Tyre & |
|
| Rubber
Company of Pakistan Limited will be held at Beach Luxury Hotel, Karachi on |
|
| Tuesday
24th December 1996, at 11.00 a.m to transact the following business: |
|
|
| Ordinary
Business |
|
|
| 1.
To confirm the minutes of the Extra-Ordinary General Meeting of the
Shareholders held |
|
| on August 20, 1996. |
|
|
| 2.
To receive and consider the audited accounts for the 18th months period ended
June |
|
| 30,
1996, together with Directors' and Auditors' reports thereon. |
|
|
| 3.
To appoint auditors for the year 1996-97 and to fix their remuneration. The
Board of |
|
| Directors have recommended appointment of
existing auditors M/s. Hameed Chaudhri |
|
| & Co., Chartered Accountants along with
A.F. Ferguson & Co., Chartered Accountants as |
|
| Joint Auditors. |
|
|
| 4.
Any other matter with the permission of the Chair. |
|
|
| Special
Business |
|
|
| 1.
To approve issue of bonus shares in the ratio of one bonus share for every
ten ordinary |
|
| shares i.e. @ 10%. |
|
|
| 2.
To approve the remuneration payable to the Managing Director and whole-time |
|
| working
Director. |
|
|
| Statement
under section 160 of the Companies Ordinance, 1984 pertaining to the Special |
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| Business
is annexed herewith. |
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|
BY ORDER OF THE BOARD |
|
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| Karachi |
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|
(CH. SHER MOHAMMAD) |
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| Dated:
November 24, 1996 |
|
Director & Secretary |
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|
| NOTES: |
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|
|
| 1.
The share transfer books of the company will remain closed from December 16, |
|
| 1996
to December 24, 1996 (both days inclusive). The members whose names |
|
| appear
in the Register of members as at the close of business on December 16, |
|
| 1996,
will qualify for the purpose of issue of bonus shares. |
|
|
| 2.
A member entitled to attend and vote at the Annual General Meeting is
entitled |
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| to cast his/her vote by proxy. Proxies must
be deposited with the Company's |
|
| Shares Department located at Parker House,
Aiwan-e-Tijarat Road, Off I.I. |
|
| Chundrigar Road, Karachi not later than 48
hours before the time for holding the |
|
| meeting. |
|
|
| 3.
Members are requested to notify any change in their addresses immediately. |
|
|
| Statement
Under Section 160 of the Companies Ordinance, 1984. |
|
| 1.
The Directors have recommended issue of bonus shares @ 10% i.e. in the ratio
of one |
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| bonus
shares for every ten ordinary shares held by the members at the close of |
|
| business
on December 16, 1996. For this purpose to approve capitalization of a sum of |
|
| Rs.
15,525,000 partly out of General Reserves and the remaining out of profits as
on |
|
| June
30, 1996 and to pass, with or without notification, the following resolutions
as |
|
| Ordinary
Resolutions: |
|
|
| "RESOLVED: |
|
|
|
| a)
That a sum of Rs. 15,525,000 partly out of General Reserves and the remaining
out |
|
| of
the profits of the Company as on June 30, 1996 be capitalized and applied to |
|
| the
issue of Ordinary Shares of Rs. 10/- each as fully paid Bonus Shares to the |
|
| members
of the Company whose names appear on the register of members as at |
|
| the
close of business on December 16, 1996 in the proportion of one bonus share |
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| for
every ten shares held. |
|
|
| b)
That the members entitled to fractions of a share shall be given the sale
proceeds |
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| of their fractional entitlement for which
purpose the fractions shall be |
|
| consolidated into whole shares and sold in
the stock market. |
|
|
| c)
That the Managing Director of the Company be and is hereby authorized and |
|
| empowered
to give effect to the resolutions and to do or cause to be done all |
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| acts,
deeds and things that may be necessary or required for issue, allotment and |
|
| distribution
of bonus shares." |
|
|
| The
Directors are interested in this business only to the extent of their
entitlement to |
|
| the
bonus shares as shareholders. |
|
|
| 2.
The remuneration of Dr A.S. Hufti, Managing Director was reviewed in 1994. |
|
| Furthermore,
Ch Sher Mohammad, Director Finance & corporate Affairs and Secretary |
|
| has
been elected as director and is working as whole-time director. He is
entitled to |
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| remuneration
in accordance with the terms and conditions of his service. For this |
|
| purpose,
it is proposed to pass the following resolution as an Ordinary Resolution, |
|
| namely: |
|
|
|
|
|
| "RESOLVED
THAT Dr A.S. Hufti, Managing Director and Ch Sher Hohammad, whole-time |
|
| Director
be paid a sum not exceeding in the aggregate Rupees 4.1 million per annum |
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| consisting
of salary and allowances but excluding perquisites and long-term benefits |
|
| effective
August 23, 1996. |
|
|
|
|
| Further
resolved that these Directors shall be entitled to receive annual increase in |
|
| salary
and allowances equivalent to the rate of increase approved to Management
staff, |
|
| but
not exceeding 10%." |
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|
|
|
|
| CHAIRMAN'S
REVIEW |
|
|
| I
welcome you to the Thirtythird Annual General Meeting of General Tyre &
Rubber Company of |
|
| Pakistan
Limited and present the Report & Accounts for the eighteen months period
ended June |
|
| 30,
1996. in compliance with the Finance Act 1995 your company has changed its
accounting year |
|
| from
December to June and are therefore, presenting financial statements for the
period January |
|
| 1995
to June 1996. |
|
|
| OPERATING
RESULTS |
|
| The
Company recorded a pretax profit of Rs 28.8 Nillion during the eighteen
months of |
|
| 1995-96
as against pretax profit of Rs 26.1 Nillion in 1994. On a year to year basis
production |
|
| and
Sales in terms of unit increased by 17% and 16% respectively due to enhanced |
|
| production/sale
in all segments of products caused by higher demand from Assembly Plants |
|
| particularly
the truck assembly plants. Similarly Gross Sales increased by 44% as compared
to |
|
| the
last year due to enhanced unit sales and better selling prices. This is a
reflection of strong |
|
| demand
for company's products. |
|
|
| Your
Company incurred a pretax loss of Rs 31.7 Million during first half ended
June 30, 1995, |
|
| due
to substantial increase in prices of imported raw materials, the impact of
which could |
|
| not
be fully absorbed by increasing the selling prices. I am pleased to report
that the adverse |
|
| profitability
situation has been partially retrieved by gradual increase in selling prices
during |
|
| the
last one year thereby improving the gross profit margin for the previous
twelve months. |
|
| The
Company earned a profit before tax of Rs 60.5 Nillion during July 1995 June
1996 period |
|
| out
of which loss incurred during the first half ended June 30, 1995 Rs 31.7
Million was |
|
| recouped
thereby leaving a balance of Rs 28.8 Nillion. This is a significant
improvement and a |
|
| turnaround
situation for the Company. The profit would have been still better, had it
not been |
|
| marred
by 7% devaluation of the currency and imposition of 10% regulatory duty
during the |
|
| second
quarter of the year. |
|
|
| EXPANSION
PROGRAMME |
|
| The
original expansion programme envisaged increase in production capacity by
500,000 |
|
| tyres
involving a cost of Rs 1.23 billion. This programme is now proposed to be
implemented |
|
| in
two phases. The first phase envisages increase in production of tyres by
306,000 to |
|
| 1,062,000
tyres per year involving a cost of Rs 722.0 Million, is currently being
implemented. |
|
| The
second phase will be implemented upon successful completion of the first
phase. |
|
|
| A FINANCING |
|
|
| The
Right Shares were fully subscribed in August 1995. International Finance |
|
| Corporation
(IFC) Washington has approved a loan of US $ 10.7 Million (including standby |
|
| loan
of US$ 1.5 Million and subordinated convertible loan of US $ 2.4 Million) to
meet |
|
| project
cost requirement for the first phase of the Expansion Project. The terms and |
|
| conditions
of this loan are being negotiated with the IFC management. In addition, |
|
| Islamic
Development Bank (IDB) Jeddah has approved a Lease Financing of US$ 5.0 |
|
| Nillion
to meet the remaining foreign currency cost requirement. The terms and |
|
| conditions
of this financing arrangement are being negotiated. The rupee loan |
|
| requirement
is being met from Saudi Pak loan of Rs. 85.0 Million. |
|
|
| B PROJECT IMPLEMENTATION |
|
| The
revised scope of expansion project (Phase 1) comprises of: |
|
| ·
increase in production capacity by 84,000 farm tyres and; |
|
| ·
Increase in production capacity by 222,000 steel belted radial
passenger/Light truck tyres. |
|
| I
am pleased to report that installation of farm tyre machinery has been
completed, trial |
|
| production
commenced and regular production will start from December 1996. As regards |
|
| installation
of radial tyres capacities, part of this project is also under implementation
i.e. civil |
|
| work
is in progress, steelastic machinery/X-ray machine, which are required for
radial tyre |
|
| production,
have arrived. This part Of radial tyres project will be operational by the
end of |
|
| 1997. |
|
|
| FUTURE
OUTLOOK |
|
| The
Commencement of additional production of Farm tyres will provide boost to
Company's |
|
| Sales
and profitability. However, devaluation of Pak Rupee in relation to USS by
8.5% and other |
|
| fiscal
measures initiated by the Government on October 22, 1996 will affect the
profitability. In |
|
| addition,
lowering of import duty on Light Commercial vehicle tyres from 65% to 25% as |
|
| implemented
in the 1996 budget is a fiscal anomaly which requires government's remedial |
|
| action. |
|
|
| BOARD
OF DIRECTORS |
|
| As
a consequence of election to the Board of Directors held in the Extra
Ordinary General |
|
| Meeting
on August 20, 1996 a new Board was elected. The Board members place on record |
|
| their
appreciation for the valuable services rendered by the outgoing members
namely |
|
| Mr.
Hoshang Kandawala, Mr. J.L. Dillon, Mr. Khawaja Asadullah and Mr. Nefer Jooma
and |
|
| welcome
the new Directors on the Board. |
|
|
|
|
DIRECTORS' REPORT |
|
|
TO THE SHAREHOLDERS |
|
|
|
| Your
Directors are pleased to place before you the audited financial statements
for the |
|
| eighteen
months ended June 30, 1996. |
|
|
|
|
Rupees |
|
| Profit
and Appropriations |
|
|
| Profit
after taxation |
|
|
9,038,137 |
|
| Unappropriated
profit brought forward |
|
1,964,862 |
|
|
|
|
|
---------- |
|
| Profit
available for appropriation |
|
11,002,999 |
|
|
|
|
|
|
|
| Appropriations |
|
|
|
|
| Transfer
to reserve for bonus issue |
|
15,525,000 |
|
| Transfer
from general reserve |
|
(5,000,000) |
|
|
|
|
|
---------- |
|
|
|
|
|
10,525,000 |
|
|
|
|
|
---------- |
|
| Unappropriated
profit |
|
|
477,999 |
|
|
========== |
|
|
|
|
| Chairman's
Review |
|
| The
Directors of the Company endorse the contents of the Chairman's Review
dealing with |
|
| the
activities of the Company. |
|
|
| Pattern
of Shareholding |
|
| A
Statement showing the pattern of holding of shares as at June 30, 1996 is
attached. |
|
|
|
| Auditors |
|
| The
present Auditors, Messrs Hameed Chaudhri & Company, Chartered Accountants
retire and |
|
| being
eligible, offer themselves for re-appointment. |
|
|
| For
and on behalf of the Board of Directors |
|
|
DR A. S. MUFTI |
|
| Karachi:
November 24, 1996 |
|
Chief Executive |
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|
|
| Five
Years at a Glance |
|
|
|
(RS. in million) |
|
|
|
1996 |
1994 |
1993 |
1992 |
1991 |
|
|
|
|
| Operating
Results |
|
|
|
|
|
| Gross sales |
|
1,765 |
1,220 |
1,243 |
1,346 |
1,153 |
|
|
|
|
| Net sales |
|
1,379 |
971 |
997 |
1,080 |
879 |
|
|
|
|
| Gross profit |
|
|
174 |
143 |
189 |
181 |
163 |
|
|
|
|
| Profit
before tax |
|
61 |
28 |
73 |
83 |
74 |
|
|
|
|
| Profit
after tax |
|
44* |
30 |
58 |
66 |
50 |
|
|
| Financial
Position |
|
| Gross assets |
|
1,769 |
1,581 |
1,649 |
1,384 |
1,266 |
|
|
|
|
| Paid
up share capital |
|
155 |
124 |
83 |
83 |
2 |
|
| Reserves
and unappropriated profit |
243 |
125 |
135 |
77 |
84 |
|
|
|
|
| Shareholders'
equity |
|
398 |
249 |
218 |
160 |
136 |
|
|
|
|
| breakup
value per share |
|
26 |
20 |
26 |
19 |
26 |
|
|
|
|
| Contribution
to public exchequer |
448 |
332 |
421 |
339 |
308 |
|
|
| *
1996 figures for eighteen months annualized |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of THE GENERAL TYRE AND RUBBER |
|
| COMPANY
OF PAKISTAN LIMITED as at 30 June, 1996 and the related profit and loss
account |
|
| and
cash flow statement, together with the notes forming part thereof, for the
eighteen |
|
| months
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 period was for the purpose of Company's |
|
| business; and |
|
|
| (iii)
the business conducted, investments made and expenditure incurred during the |
|
| period
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 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 June, 1996 and of the profit and |
|
| cash flow for the eighteen months then
ended; and |
|
|
| (d)
in our opinion, no Zakat was deductible at source under Zakat and Ushr
Ordinance, |
|
| 1980. |
|
|
|
| Accounts |
|
|
| BALANCE
SHEET AS AT 30 JUNE, 1996 |
|
|
| Notes |
|
|
30 June, |
31 December, |
|
|
|
1996 |
1994 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| Share
capital |
|
| Authorised |
|
| 30,000,000
shares of Rs. 10 each |
|
|
300,000,000 |
300,000,000 |
|
|
|
|
| issued,
subscribed & paid-up |
|
3 |
155,250,000 |
124,200,000 |
|
|
|
|
| Reserves
& unappropriated profit |
|
|
| Reserves |
|
4 |
241,950,000 |
122,750,000 |
|
| Unappropriated
profit |
|
|
477,999 |
1,964,862 |
|
|
|
|
------------ |
------------ |
|
|
|
242,427,999 |
124,714,862 |
|
|
|
|
|
|
|
------------ |
------------ |
|
|
|
397,677,999 |
248,914,862 |
|
|
|
|
|
| Redeemable
capital |
|
5 |
47,396,776 |
- |
|
| Debentures
& long term loans |
|
6 |
15,622,416 |
22,750,000 |
|
| Obligation
under finance leases |
|
7 |
1,740,952 |
25,976,212 |
|
|
|
|
| Deferred
liabilities |
|
|
| Provision
for gratuity |
|
48,032,568 |
40,795,143 |
|
| Deferred
taxation |
|
6,200,000 |
6,200,000 |
|
|
|
|
|
|
|
54,232,568 |
46,995,143 |
|
| Long
term deposits |
|
|
8 |
6,730,000 |
6,710,000 |
|
|
|
|
|
|
| Current
liabilities |
|
|
| Short
term finances/borrowings |
|
9 |
199,542,346 |
330,094,707 |
|
| Current
maturity of long term liabilities |
10 |
22,084,027 |
37,110,136 |
|
| Creditors,
provisions & accrued charges |
11 |
408,738,509 |
346,709,573 |
|
| Dividend |
|
12 |
533,837 |
545,292 |
|
| Provision
for Taxation |
|
|
29,052,500 |
10,619,292 |
|
|
|
|
------------ |
------------ |
|
|
|
|
659,951,219 |
725,079,000 |
|
|
| Contingent
liabilities / |
|
13 |
|
| commitments |
|
|
------------ |
------------ |
|
|
|
1,183,351,930 |
1,076,425,217 |
|
|
============================ |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Tangible
fixed assets |
|
| Operating Fixed |
|
14 |
240,932,347 |
302,264,275 |
|
| Capital
work in progress |
|
15 |
84,614,187 |
4,701,129 |
|
|
|
|
------------ |
------------ |
|
|
|
325,546,534 |
306,965,404 |
|
| Investments |
|
|
16 |
606,200 |
1,915,300 |
|
| Long
term loans |
|
17 |
999,911 |
1,140,816 |
|
| Long
term deposits and deferred costs |
|
18 |
8,769,718 |
6,828,957 |
|
| Current
assets |
|
|
| stores |
|
|
19 |
128,622,454 |
121,139,761 |
|
| Stocks |
|
|
20 |
402,692,212 |
315,809,835 |
|
| Trade
debtors |
|
21 |
132,145,231 |
138,151,155 |
|
| Advances,
deposits, prepayments |
|
|
|
6~ other receivables |
|
22 |
153,411,422 |
148,813,724 |
|
| Cash
6L bank balances |
|
23 |
30,558,248 |
35,660,265 |
|
|
|
|
------------ |
------------ |
|
|
|
|
847,429,567 |
759,574,740 |
|
|
|
|
------------ |
------------ |
|
|
1,183,351,930 |
1,076,425,217 |
|
|
============================ |
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| FOR
THE EIGHTEEN MONTHS ENDED 30 JUNE, 1996 |
|
|
|
|
30 June, |
31 December, |
|
|
|
Note |
1996 |
1994 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| Sales |
|
24 |
1,935,961,154 |
971,243,672 |
|
|
| Less:
cost of sales |
|
25 |
1,721,103,983 |
828,642,855 |
|
|
|
------------ |
------------ |
|
|
|
Gross profit |
|
|
214,857,171 |
142,600,817 |
|
|
|
|
|
| Operating
expenses |
|
|
|
| Administrative |
|
26 |
47,161,914 |
29,167,938 |
|
|
| Selling
and distribution |
|
27 |
38,555,931 |
24,273,794 |
|
|
|
|
|
|
|
85,717,845 |
53,441,732 |
|
|
|
|
------------ |
------------ |
|
|
| Operating
profit |
|
|
129,139,326 |
89,159,085 |
|
|
| Other income |
|
|
28 |
18,384,097 |
19,950,918 |
|
|
|
|
147,523,423 |
109,110,003 |
|
| Less: |
|
------------ |
------------ |
|
| Financial
expenses |
|
29 |
110,089,246 |
80,595,054 |
|
| Other
charges |
|
30 |
8,598,778 |
2,414,533 |
|
|
|
|
118,688,024 |
83,009,587 |
|
|
|
------------ |
------------ |
|
| Profit
before taxation |
|
|
28,835,399 |
26,100,416 |
|
| Provision
for taxation |
|
|
|
|
| Current |
|
22,000,000 |
5,500,000 |
|
|
