| Pak Leather Crafts Limited |
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Pattern
of Shareholding |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
& Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
|
| Mohammad
Khurshid Ahmed |
|
Chairman |
|
| Mohammad
Saleem Ahmed |
|
Chief Executive |
|
| Dr.
Mohammad Shoaib Ahmed |
Director |
|
| Tariq
Mustafa Khan |
|
Director |
|
| Hussain
Aqa Naqvi |
|
Director (Nominee of NIT) |
|
| Mumtaz
Ali Memon |
|
Director (Nominee of IcP) |
|
| Mrs.
Rubina Jalali |
|
Director |
|
|
| COMPANY
SECRETARY |
|
|
| Ahmed
Saeed |
|
|
| BANKERS |
|
|
| Credit
Agricole Indosuez Bank |
|
| Prudential
Commercial Bank Limited |
|
| Albaraka
Islamic Investment Bank |
|
| Bank
AI-Falah Ltd. |
|
| United
Bank Ltd. |
|
|
| AUDITORS |
|
|
| S.M.
Rehan & Co. |
|
| Chartered
Accountants |
|
|
| LEGAL
ADVISOR |
|
|
| Shakiel
Z. Lari Advocate |
|
|
| REGISTERED
OFFICE |
|
|
| Plot
16 Sector 7A, |
|
| Korangi
Industrial Area, |
|
| Karachi. |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 12th Annual General Meeting of the members of Pak
Leather Crafts |
|
| Limited
will be held on Thursday, the 30th December, 1999 at 8.00 a.m. at the
registered office of the |
|
| Company
at Plot - 16, Sector 7/A, Korangi Industrial Area, Karachi to transact the
following business: |
|
|
| 1.
To confirm the minutes of the 11th Annual General Meeting held on 30th
December, 1998. |
|
|
| 2.
To receive, consider and adopt the audited accounts of the Company for the
year ended 30th |
|
| June,
1999 together with the Directors' and Auditors' Reports thereon. |
|
|
| 3.
To approve the payment of cash dividend at the rate of Rs. 0.75 per share
(7.5%) as recom- |
|
| mended
by the Board of Directors for the year ended June 30, 1999. |
|
|
| 4.
To appoint Auditors for the year ending June 30, 2000 and to fix their
remuneration. |
|
|
| 5.
To transact any other business with the permission of the Chair. |
|
|
|
By Order of the Board |
|
|
|
Ahmed Saeed |
|
| Karachi:
December 08, 1999 |
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
To determine the entitlement of dividend the Share Transfer Books of the
Company will |
|
| remain
closed from 23rd December, 1999 to 30th December, 1999 (both days inclusive). |
|
|
| 2.
A member entitled to attend and vote at this meeting may appoint another
member as his/ |
|
| her
proxy to attend the meeting and vote to him/her. No person shall act as a
proxy who is not |
|
| a
member of the Company. Proxies in order to be effective must be received by
the Company |
|
| not
less than 48 hours before the meeting. |
|
|
| 3.
Members are requested to immediately notify the Company of any change in
their address. |
|
|
|
| DIRECTORS'
REPORT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
| The
Director of your Company welcome you to the 12th Annual General Meeting and
place before |
|
| you
the Annual Report alongwith audited accounts for the year ended June 30,1999. |
|
|
| Financial
Results |
|
|
| The
financial results of the Company for the year under report are shown below. |
|
|
|
1999 |
1998 |
|
|
(Rupees) |
(Rupees) |
|
| Profit/(Loss)
from Operations |
|
9,877,048 |
(6,312,576) |
|
| Taxation |
|
(2,105,499) |
(2,634,481) |
|
|
---------- |
---------- |
|
| Profit/(Loss)
after tax |
|
7,771,549 |
(8,947,057) |
|
| Un-Appropriated
Profit/(Loss) B/F |
|
(7,773,787) |
1,173,270 |
|
|
---------- |
---------- |
|
|
(2,238) |
(7,773,787) |
|
| Transfer
from General reserve |
|
25,000,000 |
-- |
|
|
---------- |
---------- |
|
| Available
for Appropriation |
|
24,997,762 |
(7,773,787) |
|
| Proposed
Dividend @ 7.50% |
|
(2,550,000) |
-- |
|
|
---------- |
---------- |
|
| Un-Appropriated
Profit/(Loss) C/F |
|
22,447,762 |
(7,773,787) |
|
| Profit/(Loss)
per share after tax |
|
2.28 |
(2.63) |
|
|
| General
Review |
|
|
| Your
management feel pleasure in announcing that despite difficult market
conditions, persistent |
|
| recession
in the world markets and adverse world reaction to the Pakistan Nuclear
Blasts of May |
|
| 1998
we still succeeded in boosting our Sales by 15% during the year under review.
The sales have |
|
| increased
to Rs. 309 million as against 269 million for the last year. The economic
turmoil in South |
|
| Korea
and other Far Eastern countries still persists, which restricted our sale of
finished leather. |
|
|
| The
post nuclear era forced our government to restrict the foreign currency
transactions, and there- |
|
| after
devaluation took place which resulted in the high cost of imported material. |
|
|
| Despite
the above, your management not only restricted the adverse cost impact of
devaluation but |
|
| also
managed to secure sufficient orders which not only increased sales but also
improved gross |
|
| profit
ratio to 13.85% as against 12.43% of preceding year. |
|
|
|
| DIRECTORS' REPORT
FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
| For
economical and efficient operations your management has disposed off one
building and ac- |
|
| quired
plot No. 15 & 18 of Sector 7-A, Korangi Industrial Area to bring all the
operations under one |
|
| roof
during the period under review. |
|
|
| Dividend |
|
|
| In
view of better operating results for the year under review your directors are
pleased to recommend |
|
| dividend
@ 7.5% for the year under report. |
|
|
| Future
Prospects |
|
|
| The
management is making its best efforts to further increase its exports by
exploring new foreign |
|
| market
and hope to have better operating results in the forthcoming year. However
the improvement |
|
| is
subject to better global as well as national political and economical
condition coupled with appre- |
|
| ciable
law & order situation specially in Karachi. |
|
|
| Appointment
of Auditors |
|
|
| M/s.
S.M.Rehan & Co. Chartered Accountants have retired and being eligible,
have offered them- |
|
| selves
for re-appointment. |
|
|
| Worker
Management Relationship |
|
|
| Your
management would like to place on record valued contribution of all the
members of the staff |
|
| and
workers towards achieving management's goals. The worker management
relationship remained |
|
| cordial
throughout the year which resulted in the smooth operation of your company. |
|
|
| Pattern
of Share Holding |
|
|
| The
Pattern of Share holding is annexed with this report |
|
|
|
On behalf of the Board |
|
|
| November 30, 1999 |
|
Mohammad Saleem Ahmed |
|
|
Chief Executive |
|
|
|
| PATTERN
OF SHAREHOLDING AS AT JUNE 30, 1999 |
|
|
| NUMBER
OF |
SHARE HOLDINGS |
SHARES HELD |
|
| SHAREHOLDERS |
FROM |
|
TO |
OF RS. 10/- EACH |
|
|
| 220 |
1 |
|
100 |
22,000 |
|
| 352 |
101 |
-- |
500 |
148,000 |
|
| 128 |
501 |
-- |
1000 |
120,200 |
|
| 93 |
1001 |
-- |
5000 |
208,500 |
|
| 11 |
5001 |
-- |
10000 |
95,100 |
|
| 2 |
10001 |
-- |
15000 |
27,700 |
|
| 1 |
15001 |
-- |
20000 |
17,000 |
|
| 1 |
25001 |
-- |
30000 |
30,000 |
|
| 1 |
35001 |
-- |
40000 |
40,000 |
|
| 1 |
40001 |
-- |
45000 |
41,800 |
|
| 1 |
55001 |
-- |
60000 |
59,200 |
|
| 20 |
85001 |
-- |
90000 |
1,800,000 |
|
| 1 |
165001 |
-- |
170000 |
167,800 |
|
| 1 |
620001 |
-- |
625000 |
622,700 |
|
| ---------- |
|
---------- |
|
| 833 |
|
3,400,000 |
|
| ========== |
|
========== |
|
|
|
|
|
| CATEGORIES
OF SHAREHOLDERS |
|
|
| Particulars |
|
Number |
Shares held |
Percentage |
|
|
| Individuals |
|
828 |
2,519,300 |
74.10 |
|
| Investment
Companies |
2 |
681,900 |
20.05 |
|
| Insurance
Companies |
2 |
197,800 |
5.82 |
|
| Private
Limited Companies |
1 |
1,000 |
0.03 |
|
|
---------- |
---------- |
---------- |
|
|
833 |
3,400,000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of PAK LEATHER CRAFTS LIMITED, as at
June 30, |
|
| 1999
and the related profit and loss account and cash flow statement together with
the notes forming |
|
| part
thereof, for the year ended on that date 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 conformity with the Companies Ordinance, 1984 and are in agree- |
|
| ment
with the books of account and are further in accordance with accounting |
|
| policies
consistently applied; |
|
|
| ii)
the expenditure incurred during the year was for the purpose of the company's
busi- |
|
| ness; and |
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the |
|
| year
were in accordance with the objects of the company. |
|
|
| c)
In our opinion and to the best of our information and according to the
explanations given |
|
| to
us, the balance sheet, profit and loss account and 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 Company's affairs as at June 30, 1999 and of the profit and the changes
in financial |
|
| position
for the year then ended; and |
|
|
| d)
In our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance |
|
| 1980 |
|
|
|
S.M. REHAN & CO. |
|
| KARACHI:
December 1, 1999 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1 999 |
|
|
|
|
1999 |
1998 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
| CAPITAL
& RESERVES |
|
| Authorised
share capital |
|
| 5,000,000
Ordinary Shares |
|
| of
Rs. 10/- each |
|
50,000,000 |
50,000,000 |
|
|
| Issued,
subscribed and paid up capital |
|
3 |
34,000,000 |
34,000,000 |
|
| General
reserve |
|
4 |
-- |
25,000,000 |
|
| Unappropriated
profit/(Ioss) |
|
|
22,447,762 |
(7,773,787) |
|
|
|
---------- |
---------- |
|
|
56,447,762 |
51,226,213 |
|
| LIABILITIES
AGAINST ASSETS |
|
| SUBJECT
TO FINANCE LEASE |
|
5 |
160,337 |
176,669 |
|
|
| RETIREMENT
BENEFITS |
|
6 |
2,083,770 |
2,358,431 |
|
|
|
| CURRENT
LIABILITIES |
|
| Short
term finances |
|
7 |
125,000,000 |
135,000,000 |
|
| Current
maturity of long term liabilities |
|
5 |
245,287 |
354,336 |
|
| Creditors
and accured expenses |
|
8 |
66,418,177 |
115,208,064 |
|
| Workers'
profit participation fund |
|
9 |
521,160 |
66,752 |
|
| Worker's
welfare fund |
|
25,000 |
-- |
|
| Proposed
dividend |
|
2,550,000 |
-- |
|
|
194,759,624 |
250,629,152 |
|
| CONTINGENCIES
AND |
|
| COMMITMENTS |
|
10 |
-- |
-- |
|
|
|
|
---------- |
---------- |
|
|
253,451,493 |
304,390,465 |
|
|
========== |
========== |
|
| PROPERTY
& ASSETS |
|
| FIXED
CAPITAL EXPENDITURE |
|
| Operating
assets |
|
11 |
30,433,706 |
33,745,754 |
|
|
|
|
| INVESTMENTS |
|
12 |
300,000 |
2,548,020 |
|
|
| CURRENT
ASSETS |
|
| Stores
and spares |
|
13 |
16,543,988 |
16,512,567 |
|
| Stock
in trade |
|
14 |
170,953,551 |
211,448,209 |
|
| Trade debts |
|
15 |
4,927,873 |
5,813,401 |
|
| Advances,
deposits and prepayments |
|
16 |
9,091,837 |
5,178,558 |
|
| Other
receivables |
|
17 |
19,336,326 |
23,571,932 |
|
| Cash
and bank balances |
|
18 |
1,864,212 |
5,572,024 |
|
|
|
---------- |
---------- |
|
|
|
222,717,787 |
268,096,691 |
|
|
---------- |
---------- |
|
|
253,451,493 |
304,390,465 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| MOHAMMAD
KHURSHID AHMED |
|
MOHAMMAD SALEEM AHMED |
|
| CHAIRMAN |
|
CHIEF EXECUTIVE |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
| Sales |
|
19 |
309,129,803 |
269,124,196 |
|
| Cost of sales |
|
20 |
266,313,435 |
235,665,599 |
|
|
|
---------- |
---------- |
|
| Gross
profit/(Ioss) |
|
42,816,368 |
33,458,597 |
|
|
| OPERATING
EXPENSES |
|
| Administration |
|
21 |
9,504,955 |
9,493,105 |
|
| Selling |
|
22 |
15,648,857 |
13,929,087 |
|
|
|
---------- |
---------- |
|
|
25,153,812 |
23,422,192 |
|
|
---------- |
---------- |
|
| Operating
profit/(Ioss) |
|
17,662,556 |
10,036,405 |
|
| Financial
charges |
|
23 |
12,041,364 |
17,033,609 |
|
|
|
---------- |
---------- |
|
|
|
5,621,192 |
(6,997,204) |
|
| Other
income |
|
24 |
4,802,016 |
376,540 |
|
|
|
---------- |
---------- |
|
| Profit/(Ioss)
for the year |
|
10,423,208 |
(6,620,664) |
|
| Provision
no longer required written back |
|
-- |
308,088 |
|
|
10,423,208 |
(6,312,576) |
|
| Workers'
profit participation fund |
|
521,160 |
-- |
|
| Workers'
welfare fund |
|
25,000 |
-- |
|
|
---------- |
---------- |
|
|
546,160 |
-- |
|
|
---------- |
---------- |
|
| Profit/(Ioss)
before taxation |
|
9,877,048 |
(6,312,576) |
|
| Taxation |
|
| -Current year |
|
2,000,000 |
1,600,000 |
|
| -Prior year |
|
105,499 |
1,034,481 |
|
|
---------- |
---------- |
|
|
2,105,499 |
2,634,481 |
|
|
---------- |
---------- |
|
| Profit/(Ioss)
after taxation |
|
7,771,549 |
(8,947,057) |
|
| Unappropriated
profit/(Ioss) b/f |
|
(7,773,787) |
1,173,270 |
|
|
---------- |
---------- |
|
|
(2,238) |
(7,773,787) |
|
| Transfer
from general reserve |
|
25,000,000 |
-- |
|
| Proposed
dividend @ 7.5% |
|
2,550,000 |
-- |
|
|
---------- |
---------- |
|
| Unappropriated
profit/(Ioss) c/f |
|
22,447,762 |
(7,773,787) |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts |
|
|
| MOHAMMAD
KHURSHID AHMED |
|
MOHAMMAD SALEEM AHMED |
|
| CHAIRMAN |
|
CHIEF EXECUTIVE |
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
RUPEES |
RUPEES |
|
| A.
CASH FLOW FROM OPERATING ACTIVITIES. |
|
|
| Net
profit/(Ioss) before taxation |
|
9,877,048 |
(6,312,576) |
|
|
| ADJUSTMENT
FOR NON CASH CHARGES |
|
| AND
OTHER ITEMS |
|
| Depreciation |
|
12,476,583 |
12,730,550 |
|
| Gain
on sale of fixed assets |
|
(4,602,500) |
(92,100) |
|
| Provision
for gratuity |
|
350,000 |
997,633 |
|
| Gratuity paid |
|
(624,661) |
(321,025) |
|
|
---------- |
---------- |
|
|
7,599,422 |
13,315,058 |
|
|
---------- |
---------- |
|
|
17,476,470 |
7,002,482 |
|
| (INCREASE)/DECREASE
IN CURRENT ASSETS |
|
|
|
| Store
and spares |
|
(31,421) |
627,610 |
|
| Stock
in trade |
|
40,494,658 |
24,405,421 |
|
| Trade
debtors |
|
885,528 |
2,646,554 |
|
| Advances,
deposits and prepayments |
|
(3,467,062) |
1,878,853 |
|
| Other
creditors |
|
4,235,606 |
10,819,737 |
|
|
---------- |
---------- |
|
|
42,117,309 |
40,378,175 |
|
| INCREASE/(DECREASE)
IN CURRENT LIABILITIES |
|
|
|
| Short
term finances |
|
(10,000,000) |
27,500,000 |
|
| Creditors
and accrued expenses |
|
(48,789,887) |
(73,030,296) |
|
| Other
creditors |
|
479,408 |
(1,011,558) |
|
|
---------- |
---------- |
|
|
(58,310,479) |
(46,541,854) |
|
| Net
cash flow from operating activities |
|
1,283,300 |
838,803 |
|
|
| B.
CASH FLOW FROM INVESTING ACTIVITIES |
|
|
| Capital
expenditure |
|
(11,555,034) |
(4,869,276) |
|
| Sale
proceeds of fixed assets |
|
6,993,000 |
2,075,000 |
|
| Tax paid |
|
(2,551,717) |
(2,634,481) |
|
| Investment |
|
2,248,020 |
3,146,980 |
|
|
---------- |
---------- |
|
|
(4,865,731) |
(2,281,777) |
|
| C.
CASH FLOW FROM FINANCING ACTIVITIES |
|
|
|
| Lease
liabilities |
|
(125,381) |
(354,336) |
|
| Dividend |
|
-- |
(4,157,877) |
|
|
---------- |
---------- |
|
| Net cash
outflow from financing activities |
|
(125,381) |
(4,512,213) |
|
|
---------- |
---------- |
|
| Net
increase/(decrease) in cash & cash equivalent (A+B+C) |
(3,707,812) |
(5,955,187) |
|
| Cash
& cash equivalent at the beginning of the year |
|
5,572,024 |
11,527,211 |
|
|
---------- |
---------- |
|
| Cash
& cash equivalent at the end of the year |
|
1,864,212 |
5,572,024 |
|
|
========== |
========== |
|
|
|
|
| MOHAMMAD
KHURSHID AHMED |
|
MOHAMMAD SALEEM AHMED |
|
| CHAIRMAN |
|
CHIEF EXECUTIVE |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
| 1.
STATUS AND ACTIVITIES |
|
|
| The
Company is a public limited company incorporated in Pakistan under the
Companies |
|
| Ordinance,
1984 and quoted on the Islamabad, Karachi and Lahore Stock Exchanges. The |
|
| principal
activity of the Company is Leather tanning, Manufacturing of Leather Garments |
|
| and
export of Leather and Leather Garments. |
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| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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| 2.1
Accounting convention |
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| These
accounts have been prepared under the historical cost convention. |
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| 2.2 Taxation |
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| Current |
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| Provision
for current taxation is based on taxable income at current tax rates |
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| after
taking into account tax rebates and tax credits available, if any. |
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| Deferred. |
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| The
Company account for deferred taxation arising on all material timing differ- |
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| ence
using the liability method. |
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| 2.3
Fixed capital expenditure |
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| Operating
assets except leasehold land and capital work in progress are stated at |
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| cost
less accumulated depreciation. Leasehold land and capital work in progress |
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| are
stated at cost. |
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| Depreciation
is charged on straight line method. Full year's depreciation is charged |
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| on
all assets in the year of acquisition. No depreciation is charged in the year
of |
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| disposal. |
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| Maintenance
and normal repairs are charged to income as and when incurred. Major |
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| renewals
and improvements are capitalized. Gain and losses on disposal of assets |
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| are
included in income currently. |
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| 2.4
Store and spares |
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| These
are valued at moving average cost. Items in transit are valued at cost com- |
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| prising
invoice value and other charges thereon. |
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| 2.5
Stock in trade |
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| These
are valued at the lower of average cost and net realisable value except goods |
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| in
transit which are stated at invoice value plus other charges thereon. Cost of
work |
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| in
process and finished goods comprises direct material and labour together with |
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| production
overheads. |
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| Net
realisable value is calculated on the estimated selling price in the ordinary
course |
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| of
business less costs of completion and costs necessarily to be incurred in
order to |
