| Latif Jute Mills Limited |
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| Annual
Report 2000 |
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| CORPORATE
INFORMATION |
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| BOARD
OF DIRECTORS |
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| Chairman |
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Mr. Yahya Ahmed Bawany |
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| Vice Chairman |
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Mr. A. Karim M. Yahya |
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| Chief
Executive Officer |
Mr. M. Tariq Bawany |
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| Directors |
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Mr. Ghulam Muhammad M.
Adamjee |
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Mr. Arif S. Gazi |
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Mr. Zakaria H. A. Sattar
Maniya |
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Com. (Retd.) M. Idrees
Khan |
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Mr. Shahid Mehmood
(Nominee of ICP) |
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| COMPANY
SECRETARY |
Mr. Muhammad Suhail
Hingora |
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| AUDITORS |
|
M/s. M. Yousuf Adil
Saleem & Co. |
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Chartered Accountants |
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| BANKERS |
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United Bank Limited |
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Crescent Investment Bank
Limited |
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Citibank N.A. |
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Standard Chartered Bank |
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| REGISTERED
OFFICE |
Hub Chowki, Viii. Beirut,
Tehsil Hub |
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Lasbella District,
Balochistan. |
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| CITY OFFICE |
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6, Nadir House, 3rd
Floor, |
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I. I. Chundrigar Road, |
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Karachi. |
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Phone: 2427806-9 |
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Fax: 2414790 |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 23rd Annual General Meeting of LATIF JUTE MILLS
LIMITED will be held at |
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| the
Registered Office at Hub Chowki, Village Beirut, Tehsil Hub, Lasbella
District, Balochistan on Saturday, |
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| December
23, 2000 at 12:30 p.m. to transact the following business: |
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| ORDINARY
BUSINESS |
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| 1.
To confirm the minutes of the 22nd Annual General Meeting held on December
22, 1999. |
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| 2.
To receive and adopt the Audited Accounts of the Company for the year ended
June 30, 2000 |
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| together
with Directors' and Auditors' Report thereon. |
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| 3.
To appoint Auditors for the year 2000-2001 and fix their remuneration. |
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| 4.
To transact any other business as may be placed before the meeting with the
permission of |
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| the Chair. |
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By order of the board |
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| KARACHI |
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|
Muhammad Suhail Hingora |
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| Dated:
November 25, 2000 |
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|
Company Secretary |
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| NOTES: |
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| i.
The Share Transfer Book of the Company will remain closed from Saturday,
December 16, |
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| 2000
to Saturday, December 23, 2000 (both days inclusive). |
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|
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| ii.
Transport will be provided to the members of the Company. Pick-up point will
be at Karachi |
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| Stock
Exchange Building and departure time will be at 11:00 a.m. sharp on December
23, 2000. |
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|
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| iii.
Proxies in order to be valid must be received at City Office not later than
48 hours before the |
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| meeting. |
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|
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| iv.
Shareholders whose shares are deposited with Central Depository System (CDS)
are re- |
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| quested
to bring Original National Identity Card (NIC) along with their account
number in CDS |
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| for verification. |
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|
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| v.
Shareholders are requested to promptly notify the Company of any change in
address. |
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| CHAIRMAN/DIRECTORS'
REPORT TO THE SHAREHOLDERS |
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| Assalam-O-Alaikum |
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| The
Directors of Latif Jute Mills Limited present the Annual Report together with
the Company's audited |
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| accounts
for the year ended June 30, 2000. |
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| During
the year under review the Company has sustained a loss of Rs. 17.667 million
after providing tax |
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| provision
Rs. 2.576 million and reversal of general reserve Rs. 11.000 million carried
forward loss stands at Rs. 9.159. |
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| The
industry has been hit by the worst recession which was felt not only in the
country but also globally and |
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| effecting
the viability of several companies. |
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| This
year the sales has decreased from Rs. 245.901 million to Rs. 240.192 million
on the other hand the cost |
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| of
goods sold has increased by 10.62% i.e. from Rs. 174.605 million to Rs.
193.141 million. Production has |
|
| also
gone down from 6,737 tons to 5,938 tons (i.e. about 11.86%) due to lack of
demand in the first half of the |
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| year.
These all have resulted in a remarkable shrink in gross profit. The negative
impact on gross profit is |
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| mainly
attributed to the following factors: |
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| decrease
in finished goods sale prices |
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| increase
in raw jute prices in Bangladesh due to flood |
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| continuous
devaluation of Pak rupee |
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| higher
financial cost due to continuous carrying of sizable stocks |
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| Despite
the said unfavorable factors your management is constantly emphasizing on
cost effective measures |
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| and
kept in check the administration and selling expenses. |
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| The
present auditors M/s. M. YOUSUF ADIL SALEEM & CO. Chartered Accountants
have retired and are |
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| eligible
to offer themselves for re-appointment for the year 2000 - 2001 on the
remuneration to be decided by |
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| the directors. |
|
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| Pattern
of shareholding is attached with the report., |
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| We
wish to record our deep appreciation for the loyalty, devotion to duty and
co-operation by the staff and |
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| workers
of the Company during the period under review. |
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On behalf of the board |
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|
YAHYA AHMAD BAWANY |
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| Dated:
November 25, 2000. |
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Chairman |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of LATIF JUTE MILLS LIMITED as at June
30, 2000 and the |
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| related
profit and loss account, statement of changes in equity and cash flow
statement together with the |
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| notes
forming part thereof, for the year then ended and we state that we have
obtained all the information and |
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| explanations
which to the best of our knowledge and belief, were necessary for the
purposes of our audit. |
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| It
is the responsibility of the Company's management to establish and maintain a
system of internal control, |
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| and
prepare and present the above said statements in conformity with the approved
accounting standards and |
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| the
requirements of the Companies Ordinance, 1984. Our responsibility is to
express an opinion on these |
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| statements
based on our audit. |
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| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These stan- |
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| dards
require that we plan and perform the audit to obtain reasonable assurance
about whether the above said |
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| statements
are free of any material misstatement. An audit includes examining, on a test
basis, evidence |
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| supporting
the amounts and disclosures in the above said statements. An audit also
includes assessing the |
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| accounting
policies and significant estimates made by management, as well as, evaluating
the overall pre- |
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| sentation
of the above said statements. We believe that our audit provides a reasonable
basis for our opinion |
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| and,
after due verification, 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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|
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| i)
the balance sheet and profit and loss account together with the notes thereon
have been |
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| drawn
up in conformity with the Companies Ordinance, 1984, and are in agreement
with |
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| the
books of account and are further in accordance with accounting policies
consis- |
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| tently applied; |
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|
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| ii)
the expenditure incurred during the year was for the purpose of the Company's
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 us, |
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| the
balance sheet, profit and loss account, statement of changes in equity and
Cash flow |
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| statement
together with the notes forming part thereof conform with approved accounting
stan- |
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| dards
as applicable in Pakistan, and, give the information required by the
Companies Ordi- |
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| nance,
1984 in the manner so required and respectively give a true and fair view of
the state of |
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| the
company's affairs as at June 30, 2000 and of the loss, its cash flows and
changes in equity |
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| for
the year then ended; and |
|
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| (d)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
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|
M. YOUSUF ADIL SALEEM & CO. |
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| Karachi:
November 25, 2000 |
|
Chartered Accountants |
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| BALANCE
SHEET AS AT JUNE 30, 2000 |
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|
Note |
2000 |
1999 |
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|
|
Rupees |
Rupees |
|
| SHARE
CAPITAL |
|
|
| Authorised |
|
|
|
|
|
| 5,000,000
Ordinary shares |
|
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| of Rs. 10/= each |
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|
50,000,000 |
50,000,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
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| Issued,
subscribed and paid up |
|
3 |
35,574,000 |
32,340,000 |
|
| Capital reserve |
|
4 |
-- |
3,234,000 |
|
| General reserve |
|
5 |
-- |
11,000,000 |
|
| Accumulated
(loss) / profit |
|
|
(9,158,882) |
84,408 |
|
|
|
|
------------------ |
------------------ |
|
|
|
26,415,118 |
46,658,408 |
|
|
|
|
|
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| LONG
TERM LOANS |
|
6 |
15,000,000 |
-- |
|
|
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| LIABILITIES
AGAINST ASSETS |
|
|
| SUBJECT
TO FINANCE LEASE |
|
7 |
6,021,356 |
9,923,325 |
|
|
|
|
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| DEFERRED
LIABILITIES |
|
|
|
| Staff gratuity |
|
|
5,510,913 |
5,510,913 |
|
| Taxation |
|
8 |
3,500,000 |
2,500,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
9,010,913 |
8,010,913 |
|
| CURRENT
LIABILITIES |
|
|
|
|
| Short
term bank borrowings |
|
9 |
43,231,124 |
48,650,425 |
|
| Current
portion of long |
|
|
|
|
| term loans |
|
|
5,000,000 |
2,587,500 |
|
| Current
portion of lease liabilities |
|
|
4,718,399 |
3,923,924 |
|
| Creditors,
accrued and other |
|
|
|
| liabilities |
|
10 |
20,239,135 |
11,632,803 |
|
| Taxation |
|
|
1,042,050 |
4,065,923 |
|
|
------------------ |
------------------ |
|
|
|
74,230,708 |
70,860,575 |
|
| CONTINGENCIES
AND COMMITMENTS |
11 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
130,678,095 |
135,453,221 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
|
|
|
| Operating
assets |
|
12 |
61,966,478 |
67,627,100 |
|
|
|
|
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
13 |
1,972,070 |
2,025,772 |
|
|
|
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
|
| Stores,
spares and |
|
|
|
|
|
|
|
| loose tools |
|
14 |
10,701,500 |
9,785,670 |
|
|
|
|
| Stock in trade |
|
15 |
18,578,912 |
43,175,623 |
|
|
|
|
| Trade debtors |
|
|
16 |
23,303,604 |
1,361,205 |
|
|
|
|
|
|
|
|
|
| Loans,
advances, deposits and prepayment |
17 |
11,814,675 |
7,457,129 |
|
|
|
|
| Marketable
securities |
|
18 |
779,085 |
1,087,040 |
|
|
|
|
| Other
receivables |
|
19 |
-- |
749,753 |
|
|
|
|
| Cash
and bank balances |
|
20 |
1,561,771 |
2,183,929 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
66,739,547 |
65,800,349 |
|
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
130,678,095 |
135,453,221 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
|
M. TARIQ BAWANY |
|
|
ARIF S. GAZI |
|
|
Chief Executive Officer and Director |
|
|
Director |
|
|
| The
annexed notes from 1 to 33 form an integral part of these accounts. |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
Note |
Rupees |
Rupees |
|
|
| Sales |
|
|
|
240,192,332 |
245,900,978 |
|
| Sales
tax and other deductions |
|
21 |
(31,782,269) |
(32,076,706) |
|
|
|
|
------------------ |
------------------ |
|
| Net sales |
|
|
|
208,410,063 |
213,824,272 |
|
| Cost
of goods sold |
|
22 |
(193,140,913) |
(174,604,586) |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
|
15,269,150 |
39,219,686 |
|
| Operating
expenses |
|
|
|
|
| Administration |
|
|
23 |
14,478,768 |
14,789,514 |
|
| Selling |
|
24 |
3,301,477 |
5,648,141 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(17,780,245) |
(20,437,655) |
|
|
|
|
------------------ |
------------------ |
|
| Operating
(loss) / profit |
|
|
(2,511,095) |
18,782,031 |
|
| Other income |
|
|
25 |
506,586 |
912,453 |
|
|
------------------ |
------------------ |
|
|
|
(2,004,509) |
19,694,484 |
|
| Other charges |
|
| Financial |
|
26 |
15,772,775 |
9,806,449 |
|
| Workers'
profit participation fund |
|
|
-- |
497,420 |
|
| (Reversal)
/ Provision for diminution in |
|
|
| value
of marketable securities |
|
|
(109,655) |
109,655 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(15,663,120) |
(10,413,524) |
|
|
|
|
------------------ |
------------------ |
|
| (Loss)
/ Profit for the year before taxation |
|
(17,667,629) |
9,280,960 |
|
|
|
|
|
|
| Taxation |
|
| Current |
|
|
|
1,042,050 |
3,500,000 |
|
| Prior years' |
|
|
|
533,611 |
565,923 |
|
| Deferred |
|
|
|
1,000,000 |
1,000,000 |
|
|
------------------ |
------------------ |
|
|
|
|
|
(2,575,661) |
(5,065,923) |
|
|
|
|
|
------------------ |
------------------ |
|
| (Loss)
/ Profit after taxation |
|
|
(20,243,290) |
4,215,037 |
|
| Unappropriated
profit brought forward |
|
84,408 |
103,371 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(20,158,882) |
4,318,408 |
|
| Appropriations |
|
| Proposed
issue of bonus shares Nil (1999- @ 10%) |
|
-- |
3,234,000 |
|
| Transferred
(from) / to general reserve |
|
(11,000,000) |
1,000,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
11,000,000 |
(4,234,000) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
(loss) / profit carried forward |
|
(9,158,882) |
84,408 |
|
|
|
|
========== |
========== |
|
| Earning
per share |
|
27 |
(5.69) |
1.18 |
|
|
|
|
|
|
|
|
M. TARIQ BAWANY |
|
|
|
ARIF S. GAZl |
|
|
Chief Executive Officer and Director |
|
|
|
Director |
|
|
| The
annexed notes from 1 to 33 form an integral part of these accounts. |
|
|
|
| STATEMENTS
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
Issued, |
|
|
|
|
subscribed |
|
|
|
|
and paidup |
Capital |
General |
Accumulated |
|
|
|
|
Capital |
Reserve |
Reserve |
(Loss)/Profit |
Total |
|
|
|
|
|
Rupees |
|
|
|
| Balance
at June 30, 1998 |
29,400,000 |
2,940,000 |
10,000,000 |
103,371 |
42,443,371 |
|
|
| Issue
of bonus shares |
2,940,000 |
(2,940,000) |
-- |
-- |
-- |
|
| Profit
after taxation |
-- |
-- |
-- |
4,215,037 |
4,215,037 |
|
|
|
|
|
|
| Appropriations |
|
| Issue
of bonus shares |
-- |
3,234,000 |
-- |
(3,234,000) |
-- |
|
| Transfer
to general reserve |
-- |
-- |
1,000,000 |
(1,000,000) |
-- |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
at June 30, 1999 |
32,340,000 |
3,234,000 |
11,000,000 |
84,408 |
46,658,408 |
|
|
|
|
|
|
| Loss
after taxation |
-- |
-- |
-- |
(20,243,290) |
(20,243,290) |
|
| Transferred
from general reserve |
-- |
-- |
(11,000,000) |
11,000,000 |
-- |
|
| Issue
of bonus shares |
3,234,000 |
(3,234,000) |
-- |
-- |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
at June 30, 2000 |
35,574,000 |
-- |
-- |
(9,158,882) |
26,415,118 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
|
M. TARIQ BAWANY |
|
|
ARIF S. GAZI |
|
|
Chief Executive Officer and Director |
|
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| A.
CASH FROM OPERATING ACTIVITIES |
|
| (Loss)
/ Profit before taxation |
|
|
9,280,960 |
(17,667,629) |
|
|
| Adjustment for |
|
|
|
| Depreciation |
|
|
6,783,610 |
7,565,162 |
|
| Financial
charges |
|
|
15,772,775 |
9,806,449 |
|
| Provision
for doubtful debts |
|
|
300,000 |
-- |
|
|
| Gain
on disposal of fixed assets |
|
|
(212,391) |
(623,253) |
|
|
|
------------------ |
------------------ |
|
|
4,976,365 |
26,029,318 |
|
|
| Operating
profit before changes in |
|
| operating
assets and liabilities |
|
| Changes
in operating assets and liabilities |
|
| (Increase)/decrease
in operating assets |
|
| Stores,
spares and loose tools |
|
(415,830) |
(886,251) |
|
| Stock in trade |
|
24,596,711 |
(23,042,458) |
|
| Trade debtors |
|
(21,742,399) |
1,533,003 |
|
| Loans,
advances, deposits and prepayments |
|
(1,641,014) |
5,856,852 |
|
| Other
receivables |
|
749,753 |
454 |
|
| Long
term deposits |
|
53,702 |
(1,824,325) |
|
| Increase
/ (decrease) in operating liabilities |
|
|
|
| Creditors,
accrued and other liabilities |
|
3,769,841 |
(1,832,468) |
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
10,347,129 |
5,834,125 |
|
| Financial
charges paid |
|
(11,436,284) |
(9,037,178) |
|
| Gratuity paid |
|
|
-- |
(99,762) |
|
| Tax paid |
|
|
(7,816,066) |
(3,600,303) |
|
|
|
------------------ |
------------------ |
|
| Net
cash used in operating activities |
|
(8,905,221) |
(6,903,118) |
|
|
|
------------------ |
------------------ |
|
|
| B.
CASH FROM INVESTING ACTIVITIES |
|
| Proceeds
from disposal of fixed assets |
|
707,000 |
1,377,000 |
|
| Fixed
capital expenditure |
|
|
(1,617,597) |
(19,530,932) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities |
|
(910,597) |
(18,153,932) |
|
|
------------------ |
------------------ |
|
|
| C.
CASH FROM FINANCING ACTIVITIES |
|
| Short
term borrowings |
|
|
18,326,010 |
18,580,929 |
|
| Repayment
of long term loans |
|
|
(2,587,500) |
(13,227,561) |
|
| Lease
finance obtained |
|
|
680,000 |
14,655,250 |
|
| Repayment
of lease liability |
|
|
(3,787,494) |
(1,435,389) |
|
|
------------------ |
------------------ |
|
| Net
cash from / (used in) financing activities |
|
12,631,016 |
18,573,229 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Net
increase / (decrease) in cash and cash equivalents |
2,815,198 |
(6,483,821) |
|
|
| Cash
and cash equivalents at the beginning of the year |
(8,028,519) |
(1,544,698) |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Cash
and cash equivalents at the end of the year |
|
(5,213,321) |
(8,028,519) |
|
|
|
========== |
========== |
|
| Cash
and cash equivalents |
|
| Cash
and bank balance |
|
|
1,561,771 |
2,183,929 |
|
| Short
term running finances |
|
|
(7,554,177) |
(11,299,488) |
|
| Marketable
securities |
|
|
779,085 |
1,087,040 |
|
|
|
|
------------------ |
------------------ |
|
|
|
(5,213,321) |
(8,028,519) |
|
|
========== |
========== |
|
|
|
M. TARIQ BAWANY |
|
|
ARIF S. GAZl |
|
|
Chief Executive Officer and Director |
|
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
| 1.
STATUS AND ACTIVITIES |
|
| It
is a Public Company Limited by shares incorporated in Pakistan on July 14,
1977 and quoted on |
|
| Karachi
Stock Exchange. The Company is engaged in the manufacture and sale of jute
products. The |
|
| Mills
is located near Hub Industrial Trading Estate in the Province of Baluchistan. |
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
| 2.1
Accounting convention |
|
|
| These
accounts have been prepared under 'historical cost convention' modified by
capitalisation |
|
| of
exchange differences referred in Note 2.11. |
|
|
| 2.2
Basis of preparation |
|
|
| These
accounts have been prepared in accordance with International Accounting
Standards as |
|
| applicable
in Pakistan. |
|
|
|
|
|
| 2.3 Taxation |
|
|
|
|
|
|
|
| Current |
|
|
|
| Provision
for current taxation is based on taxable income at current tax rates after
taking into |
|
| account
tax rebates and tax credits available, if any. |
|
|
| Deferred |
|
|
|
| The
Company accounts for deferred taxation on material timing differences using
the liability |
|
| method.
However, deferred tax is not provided if it can be established with
reasonable probabil- |
|
| ity
that these differences will not reverse in the foreseeable future. |
|
