| JOHNSON & PHILLIPS |
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|
|
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|
| ANNUAL
REPORT 1996-97 |
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| CONTENTS |
|
| Board
of Directors |
|
| Notice of Meeting |
|
| Chairman's Review |
|
| Report
of the Directors |
|
| Auditors's
Report to the Members |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement
of changes in financial position |
|
| Notes
to the Accounts |
|
| Statement
U/S 237 (1) E of the Companies Ordinance, 1984 |
|
| 10
Years Comparative Results |
|
| Pattern
of share Holding |
|
| Johnson
& Phillips Industries (Pakistan) Limited |
|
| Johnson
& Phillips Transformers (Private) Limited |
|
| J&P
EMO Pakistan (Private) Limited |
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| Proxy Form |
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|
| DIRECTORS |
|
|
| BILAL
AHMED QURESHI (CHAIRMAN & CHIEF EXECUTIVE) |
|
| RAJA
AHMED KHAN |
|
| H. U. BEG |
|
| ABDUR
REHMAN KHAN |
|
| RASHEED
Y. CHINOY |
|
| SHAHID
GHAFFAR |
|
| SYED
WIQAR ALI |
|
|
| COMPANY
SECRETARY |
|
| AZIZUR
RAHMAN |
|
|
| AUDITORS |
|
| Messrs
Ebrahim & Co. |
|
| Chartered
Accountants |
|
|
| SOLICITORS |
|
| Messrs
Surridge & Beecheno |
|
|
| BANKERS |
|
| MUSLIM
COMMERCIAL BANK LIMITED |
|
| UNITED
BANK LIMITED |
|
| HABIB
BANK LIMITED |
|
|
| REGISTERED
OFFICE |
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| C/10,
South Avenue, S.I.T.E., Karachi-75700 |
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| Tel:
2560030 to 2560037 |
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| Telex:
20695 JPK PK |
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| Fax:
2564603 & 2563201 |
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| E-Mail:
test @johnson.khi.erum.com.pk |
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|
| REGIONAL
OFFICES: |
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| 5-B,
LDA Complex, |
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| Lawrence
Road, Garden View, Lahore |
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| Tel:
6314006 - 9 |
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| Telex:
44790 JPL PK |
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| Fax:
6368817 |
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| E-Mail:
johnson @jppl.brain.com.pk |
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|
| 291/1
Street 56, F7/4 |
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| Islamabad: |
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| Tel:
274984 - 90 |
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| Telex:
54148 JPI PK |
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| Fax:
274988 |
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| E-Mail:
isd@johnson.sdnpk.undp.org |
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| NOTICE
OF ANNUAL GENERAL MEETING |
|
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| Notice
is hereby given that thirty sixth Annual General Meeting of Johnson &
Phillips (Pakistan) Limited will be held on |
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| Thursday,
March 26, 1998 at Hotel Avari Towers Karachi at 02:00 p.m. to transact the
following business: |
|
|
| 1.
To confirm the minutes of the thirty fifth Annual General Meeting held on 26
March 1997. |
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|
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| 2.
To receive, consider and approve the audited accounts for the fifteen months
ended 30 June 1997 and the reports of |
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| Directors
and Auditors thereon. |
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|
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| 3.
To appoint Auditors and fix their remuneration. |
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|
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| 4.
Special Business: |
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| To
consider and if thought fit, to pass the following resolution as an Ordinary
Resolution under section 191 of the |
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| Companies
Ordinance 1984. |
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| RESOLVED
that the Company hereby approve and authorise the payment as remuneration to
Mr. Syed Wiqar Ali, |
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| a
working Director, of a sum not exceeding Rs. 700,000/- per annum and for the
subsequent two years sums not |
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| exceeding
the said amount as increased by 15% per annum. |
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|
|
|
| 5.
To consider any other business which may be placed before the meeting with
the permission of the Chair. |
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|
| NOTE: |
|
|
| 1.
The Shares Transfer Books of the Company will be closed from 25 March 1998 to
31 March 1998 both days inclusive. |
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| Transfers
received in order at the Registered Office of the Company before the close of
business on 24 March 1998 |
|
| will
be in time for the purpose of the Annual General Meeting. |
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|
|
|
| 2.
A member entitled to attend, speak and vote at the Annual General Meeting is
entitled to appoint a proxy who must |
|
| be
a member of the Company and such proxy will have a right to attend speak and
vote in place of the member. The |
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| instrument
appointing a proxy to be valid must be deposited at the Registered Office of
the company at least 48 hours |
|
| before
the meeting, duly stamped, signed and witnessed. |
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|
|
|
| 3.
Statement under section 160 of the Companies Ordinance 1984 pertaining to
special business: |
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|
|
| Mr.
S. Wiqar Ali who was elected as a Director of the Company last year is an
engineer by profession and is |
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| associated
with the Company for the last eleven years. |
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|
|
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| In
accordance with section 191 of the Companies Ordinance 1984, approval is
sought to fix his emoluments. |
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|
|
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| 4.
Shareholders are requested to promptly notify the Company of any change in
their addresses. |
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|
| CHAIRMAN'S
REVIEW |
|
|
| This
was one of the most difficult year in terms of business opportunities in the |
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| industry.
There were no significant projects or orders from the Utility |
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| Companies,
who have been facing considerable financial problems and |
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| consequently
delaying payments to the manufacturers. |
|
|
| Due
to fewer orders in the private sector projects also, the companies whose |
|
| manufacturing
capacities remained un-utilized for major part of the year, offered |
|
| uneconomical
low prices resulting in huge losses due to inadequate gross profit |
|
| margins
to cover selling and administrative expenses and financial charges. |
|
|
| It
is indeed a difficult task to present the Annual Report, when the financial |
|
| results
are not satisfactory and no dividend is recommended by the Board of |
|
| Directors. |
|
|
| During
1996-97 we could not achieve better results due to continued |
|
| depreciation
of rupee against foreign currencies and imposition of regulatory |
|
| duty
which increased the cost of imported raw materials and components and a |
|
| cut
throat price competition in the wake of fewer orders available in the market. |
|
| Political
situation and inconsistency in government policies for manufacturing |
|
| industries
and financial institutions also effected the industrial growth. Banks' |
|
| rigid
attitude for normal approved facilities delayed the procurement of imported |
|
| components
and resulted in late delivery penalties, demurrage, etc. |
|
|
| The
government has in the past not given the priority to engineering industry |
|
| which
it deserved and no real incentives were provided to increase the exports |
|
| of
engineering goods. Local manufacturers have shown capability by securing |
|
| orders
against international contracts and earning foreign exchange. Engineering |
|
| capital
goods industry has been waiting for a long term stable policy for preparing |
|
| themselves
for exports and to be in a position to compete with developed |
|
| countries
in Asia, Middle East and South East Asia. One of the possible way to |
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| export
our equipment, is by opening small assembly units in other countries, |
|
| where
our equipment and components can be assembled. |
|
|
| The
labour laws require to be reformed to bring these in line with the new |
|
| aspirations
of the country and needs for a free market economy. |
|
|
| Company
has taken positive steps to curtail the expenses and improve the quality |
|
| and
profitability by restructuring the organization, inducting new methods, |
|
| designs
and equipment. Despite the prevailing problems, we are hopeful that |
|
| with
anticipated restructuring of Wapda, K.E.S.C., W.A.S.A., and other projects |
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| and
the revival in the private sector, the Company will be able to recoup its |
|
| losses
and look forward to making profits in the future years. |
|
|
| The
Company had a negative earning per share of Rs. 9.22 due to loss during |
|
| the year. |
|
|
| JOHNSON
& PHILLIPS INDUSTRIES (PAKISTAN) LIMITED |
|
|
| For
reasons explained in the Report of Directors, and to restrict accumulated |
|
| losses
the factory operations have been temporarily suspended. |
|
|
| As
soon as the financial restructuring is agreed by NDFC and the marketing |
|
| conditions
revive, the manufacturing operations will re-commence. |
|
|
| The
Company had a negative earning per share of Rs. 5.81 due to loss during |
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| the year. |
|
|
| JOHNSON
& PHILLIPS TRANSFORMERS (PRIVATE) LIMITED |
|
|
| Reasons
for the loss during the year have been explained in the Directors Report. |
|
|
| It
is hoped that the financial restructuring will soon be agreed by NDFC and the |
|
| liquidity
position of utility companies will improve, thus enabling the Company |
|
| to
generate adequate profits in the future. |
|
|
| The
Company had a negative earning per share of Rs. 4.02 due to loss during |
|
| the year. |
|
|
| J&P
EMO PAKISTAN (PRIVATE) LIMITED |
|
|
| As
explained in the Directors' Report the Company has not yet been able to get |
|
| any
turn key project business. |
|
|
| However,
as soon as the overall economics conditions improve, the Company is |
|
| expected
to enter into projects with Pakistan Railways and Government / Semi |
|
| Government
organizations. |
|
|
| The
Company had a negative earning per share of Rs. 7.12 due to loss during |
|
| the year. |
|
|
| In
the end I would like to thank all my colleagues for their co-operation and |
|
| support. |
|
|
|
| REPORT
OF DIRECTORS |
|
|
| 1.
The Directors have pleasure in submitting their annual report along with the
audited accounts of the company. |
|
| for
the year ended June 30, 1997 and auditors' report thereon. |
|
|
| 2.
Summarised position of the financial results for the year and its
appropriation is as follows: |
|
|
|
|
(Rs. 000') |
(Rs. 000') |
|
|
| Loss
for the period before provision for |
|
| diminution
in value of investment and taxation |
|
37,038 |
|
| Provision
for diminution in value of investment |
|
10,510 |
|
|
| Provision
for taxation |
|
| Current |
|
|
759 |
|
| Deferred |
|
|
1,972 |
2,731 |
|
|
|
|
---------- |
---------- |
|
| Net
loss after taxation |
|
50,279 |
|
| Accumulated
loss brought forward |
|
5,198 |
|
|
|
|
---------- |
|
| Accumulated
loss carried forward |
|
55,477 |
|
|
|
|
========== |
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|
|
|
|
|
| 3.
Material information regarding the affairs of the Company and that of the
subsidiaries is given with Chairman's |
|
| Review
which may be taken as part of the Director's Report. |
|
|
| 4.
Pattern of shareholding is annexed. |
|
|
| 5.
The present auditors, Messrs. Ebrahim & Co., Chartered Accountants,
retire and being eligible offer themselves |
|
| for
re-appointment. |
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|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of JOHNSON AND PHILLIPS (PAKISTAN)
LIMITED as at June 30, 1997 |
|
| and
the related profit and loss account and statement of changes in financial
position, together with the notes forming |
|
| part
thereof, for the yea,- 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 accounts 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 con- |
|
| formity
with the Companies Ordinance, 1984 and are in agreement with the books of
accounts 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 yea,- were in accord- |
|
| ance
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 statement of changes in financial position,
together with the notes forming |
|
| part
thereof, give the information required by the Companies Ordinance, 1984 in
the manner so required anti |
|
| respectively
give a true and fair view of the state of the Company's affairs as at June
30. 1997 and of the loss |
|
| and
the changes in financial position for the yea,- then ended; and |
|
|
| d)
in our opinion no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1997 |
|
|
|
|
|
NOTES |
JUNE 30, |
JUNE 30, |
|
|
|
|
|
1997 |
1996 |
|
|
|
|
|
(Rupees in thousands) |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
| Authorised
capital |
|
|
|
| 8,000,000
ordinary shares of |
|
|
|
| Rs.
10 each |
|
|
80,000 |
80.00 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
|
3 |
54,500 |
54,500 |
|
| Capital
reserves - share premium |
|
|
29,727 |
29,727 |
|
| Revenue
reserve - general |
|
|
23,073 |
23,073 |
|
| Accumulated
(loss) |
|
|
(55,477) |
(5,198) |
|
|
|
|
---------- |
---------- |
|
|
|
|
51,823 |
102,102 |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
|
42,642 |
42,642 |
|
| LONG
TERM LOAN |
|
|
4 |
3,100 |
- |
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
|
|
| TO
FINANCE LEASES |
|
|
5 |
5,234 |
3,045 |
|
|
|
|
|
|
| DEFERRED
LIABILITY |
|
|
|
|
| Staff
gratuity |
|
|
6,614 |
6,504 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
---------- |
---------- |
|
| Short
term loan and running finance |
|
6 |
85,603 |
79,824 |
|
| Current
portion of long term liabilities |
|
7 |
7,791 |
2,149 |
|
| Creditors,
accrued and other liabilities |
|
8 |
102,111 |
71,139 |
|
| Dividends |
|
9 |
2,546 |
2,780 |
|
|
|
|
---------- |
---------- |
|
|
|
|
198,051 |
155,892 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
|
10 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
307,464 |
310,185 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
|
|
|
|
June 30, |
June 30, |
|
|
|
|
NOTES |
1997 |
1996 |
|
|
|
|
|
(Rupees in thousands) |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
11 |
68,557 |
64,561 |
|
| LONG
TERM INVESTMENTS |
|
12 |
61,000 |
71,510 |
|
| DEFERRED
TAXATION |
|
13 |
714 |
2,686 |
|
| LONG
TERM DEPOSITS |
|
|
| Security
deposits |
|
|
2,431 |
1,063 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
---------- |
---------- |
|
| Consumable
stores |
|
14 |
463 |
305 |
|
| Stock
in trade |
|
15 |
106,449 |
89,458 |
|
| Trade
debts |
|
16 |
15,094 |
37,352 |
|
| Advances
and deposits |
|
17 |
45,277 |
34,501 |
|
| Prepayments
and other |
|
|
| receivables |
|
18 |
5,200 |
4,911 |
|
| Cash
and bank balances |
|
19 |
2,279 |
3,838 |
|
|
|
|
---------- |
---------- |
|
|
|
|
174,762 |
170,365 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
307,464 |
310,185 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
|
|
|
YEAR |
FIFTEEN |
|
|
|
|
ENDED |
MONTHS ENDED |
|
|
|
|
JUNE 30, 1997 |
JUNE 30, 1996 |
|
|
|
|
NOTES |
(Rupees in thousands) |
|
|
|
|
| Sales
(Net) |
|
20 |
151,771 |
188,792 |
|
| Cost
of sales |
|
21 |
135,652 |
148,078 |
|
|
|
|
---------- |
---------- |
|
| Gross
profit |
|
|
16,119 |
40,714 |
|
| Administrative
and selling expenses |
|
22 |
29,648 |
36,335 |
|
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
(13,529) |
4,379 |
|
| Other
income |
|
|
23 |
3,556 |
1,426 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
(9,973) |
18,640 |
|
|
|
|
---------- |
---------- |
|
| Research
and development expenses |
|
|
323 |
2,442 |
|
| Financial
charges |
|
|
24 |
26,742 |
21,157 |
|
|
|
|
---------- |
---------- |
|
|
|
|
27,065 |
23,599 |
|
|
|
|
---------- |
---------- |
|
|
|
(37,038) |
(4,959) |
|
| Provision
for diminution in value |
|
|
|
| of
investment |
|
|
|
|
10,510 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
(47,548) |
(4,959) |
|
|
|
|
---------- |
---------- |
|
| Taxation-current |
|
|
|
759 |
780 |
|
| - deferred |
|
|
|
|
1,972 |
(393) |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
2,731 |
387 |
|
|
|
|
|
|
---------- |
---------- |
|
| Loss
after taxation |
|
|
|
|
(50,279) |
(5,346 |
|
| Accumulated
(1oss)/profit brought forward |
|
|
(5,198) |
148 |
|
|
|
|
|
|
---------- |
---------- |
|
| Accumulated
(loss) carried forward |
|
|
(55,477) |
(5,198) |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
|
|
|
|
|
YEAR |
FIFTEEN |
|
|
|
|
|
|
ENDED |
MONTHS ENDED |
|
|
|
|
|
|
JUNE 30, 1997 |
JUNE 30, 1996 |
|
|
|
|
(Rupees in thousands) |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
| Net
(loss) for the year |
|
|
|
(47,548) |
(4,959) |
|
| Adjustments
for items not involving |
|
|
|
|
| movement
of funds |
|
|
|
|
|
| Depreciation |
|
|
|
6,473 |
6, 150 |
|
| Provision
for staff gratuity (Net) |
|
|
110 |
947 |
|
| Provision
for diminution in value |
|
|
|
|
|
| of
investment |
|
|
|
10,510 |
- |
|
| Profit
on sale of fixed assets |
|
|
|
(2,047) |
(883) |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
(32,502) |
1,255 |
|
| (Increase)/Decrease
in current assets |
|
|
---------- |
---------- |
|
| Consumable
stores |
|
|
|
(158) |
67 |
|
| Stock
in trade |
|
|
|
16,991) |
(11,140) |
|
| Trade
debts |
|
|
|
22,258 |
19,918 |
|
| Advances
and deposits |
|
|
|
(4,443) |
573 |
|
| Prepayments
and other receivables |
|
|
|
(289) |
(1,924) |
|
|
|
---------- |
---------- |
|
|
|
|
|
377 |
7,494 |
|
| lncrease/(Decrease)
in current liabilities |
|
|
| Creditors,
accrued and other liabilities |
|
|
30,972 |
(13,361) |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash from operating activities before tax |
|
(1,153) |
(4,612) |
|
| Tax paid |
|
|
|
(7,092) |
(6,755) |
|
|
|
---------- |
---------- |
|
| Net
(decrease) in cash from |
|
|
|
| operating
activities |
|
|
|
(8,245) |
(11,367) |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Addition
to fixed assets and capital |
|
|
---------- |
---------- |
|
| work
in progress |
|
|
|
(3,752) |
(8,034) |
|
| Long
term loan |
|
|
|
- |
20,000 |
|
| Long
term investments |
|
|
- |
(20,000) |
|
| Long
term deposit |
|
|
|
(1,368) |
33 |
|
| Proceeds
from sale of fixed assets |
|
|
2,331 |
979 |
|
|
|
---------- |
---------- |
|
| Net
cash from investing activities |
|
(2,789) |
(7,022) |
|
|
|
|
|
|
|
|
YEAR |
FIFTEEN |
|
|
|
|
|
|
ENDED |
MONTHS ENDED |
|
|
|
|
|
|
JUNE 30, 1997 |
JUNE 30. 1996 |
|
|
|
|
(Rupees in thousands) |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
| Long
term loan |
|
|
|
6,200 |
- |
|
| Prepayment
of liabilities against |
|
|
|
|
|
| finance
leases |
|
|
|
(2,270) |
(1,861) |
|
| Short
term loans and running finances |
|
|
5,779 |
26,125 |
|
| Dividend
paid |
|
|
|
(234) |
(2,843) |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash from financing activities |
|
|
9,475 |
21,421 |
|
|
|
---------- |
---------- |
|
| Net
(decrease)/increase in cash and |
|
|
|
| cash
equivalents |
|
|
|
(1,559) |
3,032 |
|
