| Lawrencepur Woollen & Textile Mills Limited |
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| Annual
Report 1998 |
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| CERTIFICATE |
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| This
is to certify that: |
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| LAWRENCEPUR
WOOLLEN & TEXTILE MILLS LTD |
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| Dawoodpur
Pakistan |
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| has
been assessed by AOQC Moody International Limited in respect of their Quality |
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| Management
Systems and found to comply with ISO 9001 (1994). |
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| Approval
is hereby granted for registration providing the rules and conditions
relating to |
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| certification
are observed at all times. |
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| CERTIFICATION
SCOPE: |
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| Production
of yarns of 100% wool blends of polyester/wool, acrylic/wool and fabrics made |
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| from
100% wool, polyester/wool, wool/cotton, polyester/cotton, polyester/viscose
and exotic |
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| blends
of wool/silk, wool/cashmere and wool/cashmere/silk and shawls in various
blends. |
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| DATE
OF ISSUE: 26th March 1998 |
VALID UNTIL: 25th March
2001 |
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| REGISTRATION
NUMBER: |
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9802507 |
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|
Lord Chapple of Hoxton |
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|
AOQC Ltd. |
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Chairman |
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Authorised Signatory |
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| Multilateral
Agreement EAC (European Accreditation of Certification) dated 18th May 1995, |
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| signed
by FINAS, DAR (TGA), SINCERT. RvA (RVC), NA, SWEDAC, SAS, UKAS (NACCB). |
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| Contents |
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| Company
Information |
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| Notice
Of Annual General Meeting |
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| Directors'
Report |
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| Auditors'
Report to the Members |
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| Balance
Sheet |
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| Profit
& Loss Account |
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| Cash
Flow Statement |
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| Notes
to the Accounts |
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| Pattern
of Shareholdings |
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| Company
Information |
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| Chairman: |
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AHMED DAWOOD |
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| Directors: |
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KHAN AMIR ABDULLAH KHAN
ROKHRI |
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TAJ MOHAMMAD KHANZADA
D.S.O.M.C (FAKHAR-E-KASHMIR) |
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KHAWAJA AMANULLAH |
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|
GUL HAMEED KHAN ROKHRI |
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SARDAR ALI KHAN |
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| Managing
Director: |
M. HUSSAIN DAWOOD |
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| Company
Secretary: |
AFTAB AHMED QAISER |
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| Auditors: |
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M.HUSSAIN CHAUDHURY &
CO. |
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25-E, Main Market Gulberg
II |
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Lahore |
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| Bankers: |
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HABIB BANK LIMITED |
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|
NATIONAL BANK OF PAKISTAN |
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|
ASKARI COMMERCIAL BANK
LTD. |
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| Registered
Office: |
423-424, ALFALAH, |
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SHAHRAH-E-QUAID-E-AZAM, |
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LAHORE |
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Phones: 6301759-6301760 |
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| Head Office |
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35-A, Shahrah-e-Abdul
Hameed Bin Badees |
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|
(Empress Road) Lahore. |
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Phones: 6301601-6301607 |
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| Mills: |
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DAWOODPUR, |
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DISTRICT ATTOCK |
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Phones: ( 0597 )
641074-76 |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 38th Annual General Meeting of the Shareholders
shall be |
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| held
on Thursday the 17th of December 1998 at 03 pm at the Registered Office of
the |
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| Company
(Fourth Floor, Alfalah Building, Shahrah-e-Quaid-e-Azam, Lahore) for the
purpose |
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| of
transacting the following business: |
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| 1)
Recitation from the Holy Quran. |
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| 2)
To confirm the minutes of the 37th Annual General Meeting. |
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| 3)
To receive and adopt the Accounts for the year ended 30th June 1998, together
with |
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| the
Directors' and Auditors' Report thereon. |
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| 4)
To Appoint Auditors for the year 1998-99 and fix their remuneration. M/s. M.
Hussain |
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| Chaudhury
& Company the present Auditors of the company retire at this Annual |
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| General
Meeting and being eligible offer themselves for re-appointment. |
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| 5)
To elect 7 (seven) Directors as fixed by the Board under section 178(1) of
The |
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| Companies
Ordinance, 1984 for three years in place of the following retiring |
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| Directors:- |
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| 1.
Mr. Ahmed Dawood |
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| 2.
Mr. Muhammad Hussain Dawood |
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| 3.
Mr. Khan Amir Abdullah Khan Rokhri |
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| 4.
Mr. Taj Mohammad Khanzada D.S.O.M.C (Fakhar-e-Kashmir) |
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| 5.
Mr. Khawaja Amanullah |
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| 6.
Mr. Gul Hameed Khan Rokhri |
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| 7.
Mr. Sardar All Khan |
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| 6)
To transact any other business with the permission of the chair. |
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| The
share transfer books of the company will remain closed from 10-12-98 to
17-12-98. |
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| (both
days inclusive) |
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| BY
ORDER OF THE BOARD. |
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| Aftab
Ahmed Qaiser |
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| Company
Secretary |
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| Dated:
10-11-98 |
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| Notes:- |
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| 1.
Members unable to attend the Annual General Meeting may send the Forms of |
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| Proxy
duly stamped, signed and attested to the Company so as to reach the |
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| Registered
Office of the Company not later than 48 hours before the time of the |
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| Meeting. |
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| 2.
Nominations for election of Directors must reach the Registered Office 14
days |
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| before
the Annual General Meeting. |
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| 3.
Shareholders are requested to promptly notify the company of any change in
their |
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| address. |
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| Directors'
Report |
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| Your
Directors have pleasure in presenting the 38th. Annual Report along with the
audited accounts |
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| of
the Company for the year ending 30th. June, 1998 and the Auditors' Report
thereon. |
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| By
the grace of almighty Allah, your company has produced fairly good results
under very difficult |
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| conditions.
Our costs are constantly rising but we are forced to maintain out' price in
conformity with |
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| the
previous year due to strong competition. |
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| The
consumer is exposed to cheap smuggled fabrics which has resulted in
restricting the growth of |
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| our
market share. |
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| Nevertheless,
on account of sustained marketing efforts we have managed to keep our head
above |
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| water
and have earned a pre-tax profit of Rs. 264.91 lacs. |
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| During
the year, relations between the management and the employees remained
cordial. Your |
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| Directors
wish to place on record their appreciation for the hard work and devotion to
duty by all |
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| cadres
of employees |
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| The
company's present Auditors M/s M. Hussain Chaudhury & Company retire and
being eligible |
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| offer
themselves for re-appointment. |
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ON BEHALF OF THE BOARD |
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| LAHORE |
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| Dated:
10-11-98 |
|
Taj Muhammad Khanzada |
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|
Chairman of the meeting |
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| Auditors'
Report to the Members |
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| We
have audited the annexed balance sheet of LAWRENCEPUR WOOLLEN & TEXTILE |
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| MILLS
LIMITED as at June 30, 1998 and the related profit and loss account and cash
flow statement, |
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| together
with the notes forming part thereof, for the year then ended and we state
that we have obtained all |
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| the
information and explanations which to the best of our knowledge and belief
were necessary for the |
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| purpose
of our audit and, after due verification thereof, 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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| b)
in our opinion: |
|
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| i
) the balance sheet and profit & loss account together with the notes
thereon have been |
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| drawn
up in the conformity with the Companies Ordinance, 1984 and are in agreement |
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| with
the books of account and are further in accordance with accounting policies |
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| consistently
applied; |
|
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| ii
) the expenditure incurred during the year was for the purpose of the
Company's |
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| 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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| (c)
in our opinion and to the best of our information and according to the
explanations given to |
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| us,
the balance sheet, profit and loss account and cash flow statement, together
with the notes |
|
| forming
part thereoff give the information required by the Companies Ordinance, 1984
in the |
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| manner
so required and respectively give a true and fair view of the state of the
Company's affairs |
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| as
at June 30, 1998 and of the profit and the cash flows for the year then
ended; and |
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| (d)
in our opinion, Zakat deductible at the source under the Zakat and Ushr
Ordinance 1980 was |
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| deducted
by the company and deposited in the Central Zakat Fund established under
section 7 of |
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| that
Ordinance. |
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| Lahore |
|
(M. Hussain Chaudhury & Co) |
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| Dated:
10-11-98 |
|
CHARTERED ACCOUNTANTS |
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| Balance
Sheet as at 30th June, 1998 |
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1998 |
1997 |
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Note |
Rupees |
Rupees |
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| CAPITAL
AND LIABILITIES |
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| SHARE
CAPITAL & RESERVES |
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| Authorised |
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| 7,000,000
ordinary shares of Rs. 10 each |
|
70,000,000 |
70,000,000 |
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| 30,000
cumulative redeemable preference |
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| shares
of Rs. 1,000 each |
|
30,000,000 |
30,000,000 |
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|
--------------- |
--------------- |
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|
100,000,000 |
100,000,000 |
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|
========== |
========== |
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| Issued,
subscribed and fully paid up |
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| Ordinary
shares |
|
3 |
50,222,170 |
50,222,170 |
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| Preference
shares |
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4 |
25,960,000 |
25,960,000 |
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| Reserves
and Surplus |
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| Reserves |
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5 |
104,543,613 |
104,543,613 |
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| Un-appropriated
profit |
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|
54,222,072 |
39,567,078 |
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|
--------------- |
--------------- |
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|
234,947,855 |
220,292,861 |
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|
--------------- |
--------------- |
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| LONG
TERM AND DEFERRED LIABILITIES |
|
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|
| Deferred
taxation |
|
|
6,500,000 |
6,500,000 |
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| Provision
for gratuity |
|
6 |
45,693,349 |
38,814,631 |
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| Obligations
under finance lease |
|
7 |
1,745,268 |
-- |
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|
--------------- |
--------------- |
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|
53,938,617 |
45,314,631 |
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|
--------------- |
--------------- |
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| CURRENT
LIABILITIES |
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| Bank
overdrafts-secured |
|
8 |
-- |
16,925,209 |
|
| Current
portion of obligations under finance lease |
266,963 |
-- |
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| Creditors,
accrued and other liabilities |
9 |
44,087,973 |
45,080,113 |
|
| Provision
for taxation |
|
10 |
6,014,629 |
14,340,578 |
|
| Proposed
dividend on ordinary shares |
|
-- |
11,299,988 |
|
| Proposed
dividend on preference shares |
|
2,336,400 |
2,336,400 |
|
|
|
--------------- |
--------------- |
|
|
|
52,705,965 |
89,982,288 |
|
|
|
--------------- |
--------------- |
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| CONTINGENCIES
AND COMMITMENTS |
|
11 |
-- |
-- |
|
|
|
--------------- |
--------------- |
|
|
|
341,592,437 |
355,589,780 |
|
|
|
========== |
========== |
|
|
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
|
| OPERATING
FIXED ASSETS |
|
12 |
87,565,420 |
79,466,589 |
|
| LONG
TERM DEPOSITS |
|
|
216,120 |
-- |
|
| INVESTMENTS |
|
13 |
6,000 |
6,000 |
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
14 |
48,513,625 |
52,001,627 |
|
| Stock
in trade |
|
15 |
142,630,028 |
166,815,630 |
|
| Goods
in transit |
|
|
1,518,528 |
1,310,759 |
|
| Book debts |
|
16 |
46,444,075 |
41,006,246 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
17 |
2,789,856 |
9,294,471 |
|
| Cash
and bank balances |
|
18 |
11,908,785 |
5,688,458 |
|
|
|
--------------- |
--------------- |
|
|
|
253,804,897 |
276,117,191 |
|
|
|
--------------- |
--------------- |
|
|
|
341,592,437 |
355,589,780 |
|
|
|
========== |
========== |
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| Note:
The annexed notes from 1-28 form an integral part of these accounts |
|
| 'Auditors' Report to the
members: (Annexed) |
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|
| 'Lahore: 10-11-98 |
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| DIRECTORS: |
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|
| TAJ
MUHAMMAD KHANZADA |
|
M. Hussain Dawood |
|
| GUL
HAMEED KHAN ROKHRI |
|
MANAGING DIRECTOR |
|
| KHAWAJA
AMANULLAH |
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| PROFIT
& LOSS ACCOUNT |
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| FOR
THE YEAR ENDED JUNE 30, 1998 |
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|
1998 |
1997 |
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|
Note |
Rupees |
Rupees |
|
|
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| Sales |
|
19 |
250,741,184 |
257,511,474 |
|
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|
|
| Cost
of sales |
|
20 |
200,244,245 |
205,397,001 |
|
|
|
--------------- |
--------------- |
|
| GROSS
PROFIT |
|
|
50,496,939 |
52,114,473 |
|
| Administrative,
selling & general expenses |
21 |
24,980,165 |
18,074,201 |
|
|
|
--------------- |
--------------- |
|
| OPERATING
PROFIT |
|
|
25,516,774 |
34,040,272 |
|
| Other
income |
|
22 |
4,130,187 |
31,572,482 |
|
|
|
--------------- |
--------------- |
|
| Financial
and other charges |
|
23 |
3,155,567 |
9,400,246 |
|
|
|
--------------- |
--------------- |
|
| PROFIT
BRFORE TAXATION |
|
|
26,491,394 |
56,212,508 |
|
| Provision
for taxation-Current |
|
|
9,500,000 |
13,000,000 |
|
|
|
--------------- |
--------------- |
|
| PROFIT
AFTER TAXATION |
|
|
16,991,394 |
43,212,508 |
|
| UN-APPROPRIATED
PROFIT BROUGHT FORWARD |
|
39,567,078 |
9,990,958 |
|
|
|
|
--------------- |
--------------- |
|
| Profit
available for appropriation |
|
|
56,558,472 |
53,203,466 |
|
| APPROPRIATIONS |
|
|
|
|
| Proposed
dividend on ordinary shares |
|
-- |
11,299,988 |
|
| Proposed
dividend on preference shares |
|
2,336,400 |
2,336,400 |
|
|
|
--------------- |
--------------- |
|
|
|
2,336,400 |
13,636,388 |
|
| UN-APPROPRIATED
PROFIT CARRIED |
|
|
--------------- |
--------------- |
|
| TO
BALANCE SHEET |
|
|
54,222,072 |
39,567,078 |
|
|
|
========== |
========== |
|
|
| DIRECTORS: |
|
M. Hussain Dawood |
|
| TAJ
MUHAMMAD KHANZADA |
|
MANAGING DIRECTOR |
|
| GUL
HAMEED KHAN ROKHR1 |
|
| KHAWAJA
AMANULLAH |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 1998 |
|
|
|
1998 |
1997 |
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
26,491,394 |
56,212,508 |
|
| Adjustment
to reconcile net profit before tax |
|
| to
net cash provided by operating activities |
|
|
| Depreciation |
|
19,284,109 |
17,044,318 |
|
| Provision
for gratuity |
|
11,618,333 |
9,439,858 |
|
| Gain
on disposal of fixed assets |
|
(3,163,215) |
(27,671,755) |
|
| Movement
in working capital |
|
19,296,974 |
50,671,895 |
|
|
--------------- |
--------------- |
|
| Cash
generated from operations |
|
47,036,201 |
49,484,316 |
|
| Payment
For: |
|
| Staff
Gratuity |
|
(4,739,615) |
(3,894,261) |
|
| Income tax |
|
(9,989,823) |
(2,882,811) |
|
|
--------------- |
--------------- |
|
|
(14,729,438) |
(6,777,072) |
|
|
--------------- |
--------------- |
|
| Net
Cash inflows from operating activities |
|
58,798,157 |
98,919,752 |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Capital
Expenditure |
|
(27,589,714) |
(696,250) |
|
| Proceeds
from sale of fixed assets |
|
3,369,989 |
30,259,281 |
|
| Long
term deposits |
|
(216,120) |
-- |
|
|
--------------- |
--------------- |
|
| Net
cash inflows/(outflows) from investing activities |
(24,435,845) |
29,563,031 |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Bank
Overdrafts |
|
(16,925,209) |
(121,533,829) |
|
| Obligations
under finance lease |
|
2,012,231 |
-- |
|
| Dividend
paid |
|
(13,229,007) |
(8,064,164) |
|
|
--------------- |
--------------- |
|
| Net
cash (outflow) from Financing activities |
|
(28,141,985) |
(129,597,993) |
|
|
--------------- |
--------------- |
|
| Net(decrease)/Increase
in cash |
|
6,220,327 |
( 1,115,210) |
|
| Cash
and bank balances on July 01 |
|
5,688,458 |
6,803,668 |
|
|
--------------- |
--------------- |
|
| Cash
and bank balances on June 30 |
|
11,908,785 |
5,688,458 |
|
|
========== |
========== |
|
|
| A)
MOVEMENT IN WORKING CAPITAL |
|
| (Increase)/decrease
in current assets: |
|
| Stores
and Spares |
|
3,488,002 |
6,084,821 |
|
| Stock
in Trade |
|
24,185,602 |
51,393,012 |
|
| Goods
in transit |
|
(2071769) |
1,801,313 |
|
| Book debts |
|
(5,437,829) |
(12,286,273) |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
Receivables |
|
(747,234) |
1,005,689 |
|
|
--------------- |
--------------- |
|
| Net(increase)/decrease
in current assets |
|
21,280,772 |
47,998,562 |
|
| (Decrease)/increase
in current liabilities |
|
|
|
| Creditors,
accrued charges & other Liabilities |
|
(1,399,521) |
1,536,577 |
|
| Worker's
Welfare Fund |
|
(584,277) |
1,136,756 |
|
|
--------------- |
--------------- |
|
| Net(decrease)/increase
in current liabilities |
|
(1,983,798) |
2,673,333 |
|
|
--------------- |
--------------- |
|
|
19,296,974 |
50,671,895 |
|
|
========== |
========== |
|
| DIRECTORS: |
|
| TAJ
MUHAMMAD KHANZADA |
|
M. Hussain Dawood |
|
| GUL
HAMEED KHAN ROKHRI |
|
MANAGING DIRECTOR |
|
| KHAWAJA
AMANULLAH |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 1998 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| 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 sale of
woollen worsted |
|
| yarn,
man made yarn, woollen/worsted fabrics and man made 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 an unfunded gratuity scheme for all its employees. Liability
is provided |
|
| annually
on the basis of the last drawn salary and the 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 the
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)
Store, spares, and stocks |
|
|
| 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 ownership of the assets at the end of the
lease period. |
|
|
| (h)
Revenue recognition |
|
| Revenue
from sales is recognised on delivery of goods to customers. |
|
|
|
1998 |
1997 |
|
|
Rupees |
Rupees |
|
| 3.
ORDINARY SHARES |
|
| 1998 |
1997 |
|
| No of shares |
No of shares |
|
|
| 1,281,720 |
1,281,720 |
Ordinary shares of |
|
12,817,200 |
12,817,200 |
|
|
Rs. 10 each fully |
|
|
paid in cash |
|
