| Latif Jute Mills Limited |
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| Annual Report 1999 |
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| CORPORATE
INFORMATION |
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| BOARD
OF DIRECTORS |
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| Chairman |
|
Mr. Yahya Ahmed Bawany |
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| Vice Chairman |
|
Mr. A. Karim M. Yahya |
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| Chief Executive Officer |
|
Mr. M. Tariq Bawany |
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| Directors |
|
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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|
Corn. (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 |
|
United Bank Limited |
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|
Crescent Investment Bank
Limited |
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|
Citibank N.A. |
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| REGISTERED OFFICE |
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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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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 22nd Annual General Meeting of LATIF JUTE MILLS
LIMITED will be held |
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| at
the Registered Office at Hub Chowki, Village Beirut, Tehsil Hub, Lashella
District, Balochistan on |
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| Wednesday,
December 22, 1999 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 21 st Annual General Meeting held on December
26, 1998. |
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|
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| 2.
To receive and adopt the Audited Accounts of the Company for the year ended
June 30, 1999 |
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| together
with Directors' and Auditors' Report thereon. |
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|
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| 3.
To declare bonus shares. The directors have recommended the issue of bonus
shares @ 10%. |
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| 4.
To elect 7 (seven) directors, as fixed by the board for a term of three years
with effect from |
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| December
26, 1999 in place of retiring directors namely: |
|
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| i)
Mr. Yahya Ahmed Bawany |
v) Mr. Arif S. Gazi |
|
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| ii)
Mr. A. Karim M. Yahya |
vi) Mr. Zakaria H. A.
Sattar Maniya |
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| iii) Mr. M. Tariq Bawany |
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vii) Com. (Retd.) M.
Idrees Khan |
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| iv)
Mr. Ghulam Muhammad M. Adamjee |
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| The
retiring directors being eligible, have offered themselves for re-election. |
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| 5. To appoint Auditors for the year
1999-2000 and fix their remuneration. |
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| SPECIAL BUSINESS |
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| 6.
To consider the capitalization of Rs. 3.234 million by way of issue of
323,400 bonus shares |
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| of Rs. 10/- each. |
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| OTHER BUSINESS |
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| 7.
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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| Resolutions
proposed to be moved at the General Meeting and the statement under section
160 of the |
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| Companies
Ordinance, 1984 relating to the Special Business are being despatched along
with Annual Report |
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| to the members. |
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|
By order of the board |
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|
| KARACHI |
|
Muhammad Suhail Hingora |
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| Dated:
November 19, 1999 |
Company Secretary |
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| NOTES: |
|
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| i.
The Share Transfer Books of the Company will remain closed from Wednesday,
December |
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| 15,
1999 to Wednesday, December 22, 1999 (both days inclusive). |
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|
| ii.
Transfer(s) received in order at City Office at Room No. 06, 3rd Floor, Nadir
House, I.I. Chundrigar |
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| Road,
Karachi by the close of business on Tuesday, December 14, 1999 will be
treated in time |
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| for
the purpose of entitlement of bonus shares. |
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| iii.
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
22, 1999. |
|
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| iv.
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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| v.
Any member who seeks to contest election to the office of director may file
with the Company |
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| not
later than fourteen days before the date of meeting, a notice of his
intention to offer himself |
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| for
election as director in terms of Section 178(3) of the Companies Ordinance,
1984. |
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| vi.
Shareholders whose shares are deposited with Central Depository System (CDS)
are requested |
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| to
bring National Identity Card (NIC) along with their account number in CDS for
verification. |
|
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| vii.
Shareholders are requested to promptly notify the Company of any change in
address. |
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|
| STATEMENT
UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984. |
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| ITEM # 6 |
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| As
your directors recommend to issue bonus shares @ 10% that is ten shares for
every hundred shares held, |
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| to
consider and pass the following ordinary resolution. |
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| RESOLVED THAT |
|
|
| i)
a sum of Rs. 3,234,000 be reserved for issue of 323,400 ordinary shares out
of the profit for the |
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| year
ended June 30, 1999 and be capitalized for issue of ordinary shares of Rs.
10/- each as |
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| bonus
shares to be allotted to those shareholders whose names stand in the register
of mem- |
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| bers
on December 14, 1999 in proportion of 10 bonus shares for every 1 O0 shares
held that is |
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| @
10% and that such new shares shall rank pari passu in all respects with the
existing shares |
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| of the Company. |
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|
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| ii)
fractional entitlements be consolidated into whole shares and sold in the
stock exchange and |
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| proceeds be distributed among shareholders
in accordance with their entitlements. |
|
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| iii)
for the purpose of giving effect to the above matter, the directors be and
are hereby authorized |
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| to
give such directions as may be necessary and to settle any question or
difficulties that may |
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| arise
in regard to the distribution of the said shares as they think fit. |
|
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| The
directors are interested in this business to the extent of their entitlement
of bonus shares as |
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| shareholders. |
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| CHAIRMAN/DIRECTORS'
REPORT TO THE SHAREHOLDERS |
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| Assalam-O-Alaikum |
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| PREAMBLE |
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| With
profound gratitude to the Almighty Allah, the directors of your Company
welcome you to the 22nd |
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| Annual
General Meeting and have the pleasure to present before you the brief
analysis of financial results |
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| alongwith
the audited accounts of the Company for the year ended June 30, 1999. |
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| FINANCIAL RESULTS |
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| Your
directors are pleased to share the results with the members as follows: |
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|
Rupees |
|
|
|
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| Profit after taxation |
|
9,280,960 |
|
| Provision for taxation |
|
(5,065,923) |
|
| Profit after taxation |
|
4,215,037 |
|
| Unappropriated
profit brought forward |
|
103,371 |
|
|
|
|
|
| Profit
available for appropriation |
|
4,318,408 |
|
| Appropriations |
|
| Proposed
bonus shares @ 10% |
3,234,000 |
|
| Transfer
to general reserve |
1,000,000 |
(4,234,000) |
|
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|
---------------------- |
---------------------- |
|
| Unappropriated
profit carried forward |
|
84,408 |
|
|
|
|
============ |
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| Earning per share |
|
1.30 |
|
|
| The
recession in the country continued which adversely affected all sods of life.
This year the sales has |
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| decreased
from Rs. 298.270 million to Rs. 245.901 million (i.e. about 17.55%),on the
other hand the cost |
|
| of
goods sold has decreased only by 8.73% i.e. from Rs. 191.299 million to Rs.
174.605 million. Produc- |
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| tion
has also gone down slightly from 7,394 tons to 6,737 tons (i.e. about 8.88%)
due to lack of demand. |
|
| These
all have resulted in a remarkable shrink in gross profit. The reduction in
sales and cost of sales is |
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| mainly
attributed to the following factors: |
|
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| decrease
in finished goods prices |
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| increase
in sales tax rate from 12.5% to 15% |
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| increase
in raw jute prices. |
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| increase
in cash margin for opening of letter of credit |
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| continuous
devaluation of Pak rupee |
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| Despite
the unfavorable economical environment, your Company made profit by taking
the strict cost |
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| measures
and having maintained fixed casts at the last year's level. |
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| FUTURE PROSPECTS |
|
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| New
government's 7-points agenda of purposeful national reconstruction has given
the hope that the |
|
| country
will be leading towards improving its economic viability and reducing its
vulnerability to exter- |
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| nal
shocks; establishing a policy framework which encourages private enterprise. |
|
|
| Your
directors are hopeful about the future in view of various positive steps
taken by the present government |
|
| and
anticipate some relief measures which are expected to revive the economy in
general. The recessionary |
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| trend
is not expected to last longer and expectations are high for positive
developments in political and social |
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| life,
however, it will take some time before the market reverts to normality. |
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| BONUS SHARE |
|
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| Your
directors have decided to recommend bonus issue and to capitalize a sum of
Rs. 3.234 million out of the |
|
| profit
of the Company by issuing 323,400 ordinary shares of Rs. 10/- each as fully
paid up shares in the ratio |
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| of
one bonus share for very ten ordinary shares held by the members on December
15, 1999 that is 10%. |
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| AUDITORS |
|
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| The
present auditors M/s. M. YOUSUF ADIL SALEEM & CO. Chartered Accountants
have retired and are |
|
| eligible
to offer themselves for re-appointment for the year 1999 - 2000 on the
remuneration to be fixed by the |
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| directors. |
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| PATTERN
OF SHARE HOLDING |
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| Pattern
of shareholding is attached with the report, as required by the section 236
of the Companies Ordi- |
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| nance, 1984. |
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| EARNING PER SHARE |
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| The
earning per share after taxation is Rs. 1.30 against Rs. 11.11 last year. |
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|
| MILLENNIUM BUG |
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| Your
directors are fully aware of the enormity of the problem arising from date
related issues in the 21 st |
|
| century.
It is a matter of great comfort and satisfaction that the management had
foreseen the impor- |
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| tance
and sensitivity of Y2K problem well before time and have had upgraded all
hardware and soft- |
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| ware
packages accordingly. |
|
|
| ACKNOWLEDGMENT |
|
|
| The
directors of your Company would like to place on record the excellent human
relation that they |
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| enjoy
with the staff and worker, who continue to perform their duties with zeal and
devotion and without |
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| whose
efforts these results would have not been possible. |
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|
|
|
On behalf of the board |
|
|
|
|
|
YAHYA AHMAD BAWANY |
|
| Dated:
November 19, 1999 |
|
Chairman |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of LATIF JUTE MILLS LIMITED as at June
30, 1999 and the |
|
| related
profit and loss account and the statement of changes in financial, position
(Cash flow statement), |
|
| together
with the notes forming part thereof, for the year then ended and we state
that we have obtained |
|
| all
the information and explanations which to the best of our knowledge and
belief were necessary for |
|
| the
purposes of our audit and, after due verification there of, we report that: |
|
|
| (a)
in our opinion, proper books of account have been kept by the company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| (b) in our opinion: |
|
|
|
| i)
the balance sheet and profit and loss account together with the notes thereon
have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984, and are in agreement
with |
|
| the
books of account and are further in accordance with accounting policies
consis- |
|
| tently 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 |
|
| 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 statement of changes in financial |
|
| position (Cash flow statement) together
with the notes forming part thereof, give the infor- |
|
| mation required by the Companies Ordinance,
1984 in the manner so required and re- |
|
| spectively give a true and fair view of the
state of the 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. |
|
|
|
|
|
M. YOUSUF ADIL SALEEM
& CO., |
|
| Karachi:
November 19, 1999. |
Chartered Accountants. |
|
|
|
| BALANCE SHEET |
|
| AS AT JUNE 30, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
| SHARE CAPITAL |
|
|
|
|
|
|
|
| Authorised |
|
|
|
|
|
|
|
|
| 5,000,000 (1998 3,000,000) |
|
|
|
|
| Ordinary shares of Rs. 10/=
each |
|
|
50,000,000 |
30,000,000 |
|
|
|
|
|
|
|
|
|
|
| Issued, subscribed and paid up |
|
3 |
32,340,000 |
29,400,000 |
|
|
| Capital reserve |
|
4 |
3,234,000 |
2,940,000 |
|
|
| General reserve |
|
5 |
11,000,000 |
10,000,000 |
|
|
| Unappropriated profit |
|
|
|
84,408 |
103,371 |
|
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
|
46,658,408 |
42,443,371 |
|
|
|
|
|
|
| LONG TERM LOANS |
|
6 |
-- |
9,922,815 |
|
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
|
| SUBJECT TO FINANCE LEASE |
|
7 |
9,923,325 |
466,767 |
|
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
|
| Staff gratuity |
|
|
5,510,913 |
5,610,675 |
|
|
| Taxation |
|
|
8 |
2,500,000 |
1,500,000 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
8,010,913 |
7,110,675 |
|
|
|
|
|
|
| CURRENT LIABILITIES |
|
|
|
|
| Short
term bank borrowings |
|
9 |
48,650,425 |
21,278,353 |
|
|
| Current portion of long |
|
|
|
|
| term loans |
|
|
|
2,587,500 |
5,892,246 |
|
|
| Current
portion of lease liabilities |
|
|
3,923,924 |
160,621 |
|
|
| Creditors,
accrued and other |
|
|
|
|
|
| liabilities |
|
|
|
11,632,803 |
12,696,000 |
|
|
| Taxation |
|
|
|
4,065,923 |
1,321,900 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
|
70,860,575 |
41,349,120 |
|
|
| CONTINGENCIES AND |
|
|
|
|
| COMMITMENTS |
|
|
11 |
|
|
|
--------------------- |
--------------------- |
|
|
|
|
135,453,221 |
101,292,748 |
|
|
|
|
============ |
============ |
|
|
|
|
|
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
| Operating assets |
|
|
67,627,100 |
56,154,076 |
|
| Capital work in progress |
|
| Civil work |
|
|
-- |
261,000 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
67,627,100 |
56,415,076 |
|
|
| LONG TERM DEPOSITS |
|
13 |
2,025,772 |
201,445 |
|
|
|
|
| CURRENT ASSETS |
|
|
|
| Stores, spares and |
|
|
|
| loose tools |
|
14 |
9,785,670 |
8,899,419 |
|
| Stock in trade |
|
1 5 |
43,175,623 |
20,133,165 |
|
| Trade
debtors-unsecured- |
|
|
|
|
|
| considered good |
|
|
|
1,361,205 |
2,894,208 |
|
| Loans and advances |
|
16 |
7,303,383 |
6,219,836 |
|
| Deposits |
|
1 7 |
153,746 |
4,815,745 |
|
| Marketable securities |
|
1 8 |
1,087,040 |
-- |
|
| Other receivables |
|
|
19 |
749,753 |
750,207 |
|
|
| Cash and bank balances |
|
|
20 |
2,183,929 |
963,647 |
|
|
--------------------- |
--------------------- |
|
|
|
|
|
65,800,349 |
44,676,227 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
135,453,221 |
101,292,748 |
|
|
|
|
|
============ |
============ |
|
|
|
|
| M. TARIQ BAWANY |
|
|
ARIF S. GAZI |
|
|
| Chief
Executive Officer and Director |
|
|
Director |
|
|
|
| The
annexed notes from 1 to 34 form an integral part of these accounts. |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Sales |
|
|
|
245,900,978 |
298,270,415 |
|
| Sales
tax and other deductions |
|
21 |
(32,076,706) |
(33,890,521) |
|
|
|
|
--------------------- |
--------------------- |
|
| Net sales |
|
|
|
213,824,272 |
264,379,894 |
|
| Cost of goods sold |
|
|
22 |
(174,604,586) |
(191,298,934) |
|
|
|
|
--------------------- |
--------------------- |
|
| G ross profit |
|
|
|
39,219,686 |
73,080,960 |
|
| Operating expenses |
|
|
|
|
|
| Administration |
|
23 |
14,789,514 |
15,662,576 |
|
| Selling |
|
24 |
5,648,141 |
7,840,370 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
(20,437,655) |
(23,502,946) |
|
|
|
|
--------------------- |
--------------------- |
|
| Operating profit |
|
|
|
18,782,031 |
49,578,014 |
|
| Other income |
|
|
25 |
912,453 |
1,260,706 |
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
19,694,484 |
50,838,720 |
|
| Other charges |
|
|
|
| Financial |
|
26 |
9,806,449 |
10,033,919 |
|
| Workers'
profit participation fund |
|
|
497,420 |
2,040,240 |
|
| Provision
for diminution in value of investment |
|
109,655 |
-- |
|
|
|
|
|
--------------------- |
--------------------- |
|
|
|
|
(10,413,524) |
(12,074,159) |
|
|
|
|
--------------------- |
--------------------- |
|
| Profit
for the year before taxation |
|
|
9,280,960 |
38,764,561 |
|
| Taxation |
|
|
|
| Current |
|
|
|
3,500,000 |
1,321,900 |
|
| Prior year's |
|
|
|
565,923 |
-- |
|
| Deferred |
|
|
|
1,000,000 |
1,500,000 |
|
|
|
--------------------- |
--------------------- |
|
|
|
(5,065,923) |
(2,821,900) |
|
|
|
--------------------- |
--------------------- |
|
| Profit after taxation |
|
|
4,215,037 |
35,942,661 |
|
| Unappropriated
profit/(Loss) brought forward |
|
|
103,371 |
(22,899,290) |
|
|
|
--------------------- |
--------------------- |
|
| Profit
available for appropriation |
|
|
4,318,408 |
13,043,371 |
|
|
|
|
| Appropriations |
|
|
|
| Proposed
issue of bonus shares (1998-@ 10%) |
|
3,234,000 |
2,940,000 |
|
| Transferred
to general reserve |
|
|
1,000,000 |
10,000,000 |
|
|
|
--------------------- |
--------------------- |
|
|
|
(4,234,000) |
(12,940,000) |
|
|
|
--------------------- |
--------------------- |
|
| Unappropriated
profit carried forward |
|
|
84,408 |
103,371 |
|
|
|
============ |
============ |
|
| Earning per share |
|
|
1.30 |
11.11 |
|
|
|
|
|
| The
annexed notes from 1 to 34 form an integral part of these accounts. |
|
|
|
|
| M.TARIQ
BAWANY |
|
ARIF S. GAZI |
|
| Chief Executive Officer and
Director |
|
Director |
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
| A. CASH FROM OPERATING ACTIVITIES |
|
|
| Profit before taxation |
|
|
9,280,960 |
38,764,561 |
|
|
| Adjustment for |
|
| Depreciation |
|
7,565,162 |
5,733,880 |
|
| Provision for gratuity |
|
-- |
473,554 |
|
| Payment for gratuity |
|
(99,762) |
(736,260) |
|
| Financial charges |
|
9,806,449 |
10,033,919 |
|
| Gain
on disposal of fixed assets |
|
(623,253) |
(210,706) |
|
|
--------------------- |
--------------------- |
|
| Operating
profit before working capital changes |
|
25,929,556 |
54,058,948 |
|
|
| Changes
in working capital |
|
| (Increase)/decrease
in current assets |
|
| Stores,
spares and loose tools |
|
(886,251) |
(624,268) |
|
| Stock in trade |
|
(23,042,458) |
7,317,775 |
|
| Trade debtors |
|
1,533,003 |
4,186,943 |
|
| Loans and Advances |
|
1,194,853 |
(2,464,818) |
|
| Deposits |
|
4,661,999 |
353,409 |
|
| Other receivables |
|
454 |
293,172 |
|
|
| Increase
/ (decrease) in current liabilities |
|
| Creditors,
accrued and other liabilities |
|
(1,832,468) |
(14,918,727) |
|
|
--------------------- |
--------------------- |
|
| Cash from operations |
|
|
|
7,558,688 |
48,202,434 |
|
|
| Financial charges paid |
|
|
(9,037,178) |
(12,517,323) |
|
| Tax paid |
|
|
(3,600,303) |
(608,563) |
|
|
--------------------- |
--------------------- |
|
| Net
cash (used in) / from operating activities |
|
(5,078,793) |
35,076,548 |
|
|
--------------------- |
--------------------- |
|
|
| B.
CASH FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
| Long term deposit paid |
|
(1,824,325) |
-- |
|
| Proceeds
from disposal of fixed assets |
|
1,377,000 |
230,000 |
|
| Fixed capital expenditure |
|
|
(19,530,932) |
(20,455,610) |
|
|
--------------------- |
--------------------- |
|
| Net cash used in investing
activities |
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