| National Tanneries of Pakistan Limited |
|
|
|
|
|
| Annual Report 1999 |
|
|
|
|
| CONTENTS |
|
| BOARD OF DIRECTORS |
|
|
| NOTICE OF MEETING |
|
|
| DIRECTORS' REPORT |
|
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT & LOSS ACCOUNT |
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION (CASH FLOW STATEMENT) |
|
| NOTES
TO THE ACCOUNTS |
|
| PATTERN
OF SHARES HOLDING |
|
|
|
|
|
| BOARD
OF DIRECTORS |
|
| SH. ANWER IQBAL - Chief
Executive |
|
| SH. ARSHAD IQBAL |
|
| SH. GHALIB JAVED |
|
| MRS. RAFIA KHANAM |
|
| MRS.
TAHERA ARSHAD |
|
| MRS. NOOR US SABA |
|
|
| MRS. SAIMA ASIM |
|
|
| AUDITORS: |
|
| M/S. FAZAL MAHMOOD &
COMPANY |
|
| Chartered Accountants |
|
| 147-Shadman
Colony-I, Lahore. |
|
|
| BANKERS: |
|
| ALBARAKA
ISLAMIC BANK B.S.C. (E.C.) |
|
| HABIB
BANK A. G. ZURICH |
|
| MUSLIM
COMMERCIAL BANK LIMITED |
|
| UNITED
BANK LIMITED |
|
|
| REGISTERED
OFFICE & |
|
| SHARES
DEPARTMENT' |
|
| 237-S
Industrial Area, Kot Lakhpat |
|
| Township
Scheme - Lahore. |
|
|
| FACTORIES |
|
| G.
T. Road, Muridke/Khori |
|
| (District Sheikhupura) |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 39th Annual General Meeting of the Shareholders of
NATIONAL |
|
| TANNERIES
OF PAKISTAN LIMITED will be held at the Registered Office of the Company |
|
| 237-S
Industrial Area, Kot Lakhpat, Township Scheme, Lahore on Friday, 31st
December, 1999 at |
|
| 10.00 a.m. |
|
|
| AGENDA |
|
| 1.
To confirm the minutes of Annual General Meeting held on 31-12-1998, and
extra-ordinary |
|
| general
meeting held on 7-6-1999. |
|
|
| 2.
To receive consider and adopt the Directors' and Auditors' reports and
Audited Accounts for |
|
| the
year ended 30th June, 1999. |
|
|
| 3.
To approve payment of cash dividend @ Re. 1.00 per share i.e. 10% as
recommended by the |
|
| Directors. |
|
|
|
| 4.
To appoint Auditors for the financial year 1999-2000 and fix their
remuneration. |
|
|
| 5.
To transact any other business with the prior permission of the Chairman. |
|
|
| The
Share Transfer Books of the Company will remain closed from 25th December,
1999 to |
|
| 31st
December, 1999 (both days inclusive) for the purpose of determination for
entitlement of |
|
| Dividend. |
|
|
By Order of the Board |
|
|
|
| Lahore : |
|
ANWAR-UL-HAQ |
|
| 27th November, 1999. |
|
|
Company Secretary |
|
|
|
| NOTES : |
|
| 1.
A member entitled to attend and vote at this meeting may appoint another
member as a proxy |
|
| to
attend and vote instead of him. Proxies in order to be valid must be received
at Registered |
|
| Office
of the Company not less than 48 hours before the meeting. |
|
|
|
|
| 2.
Shareholders are requested to notify the Company of change in their addresses
immediately, if |
|
| any. |
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|
|
|
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| The
Directors of your company are pleased to present the 39th Annual Report
alongwith audited |
|
| accounts
for the year ended 30th June, 1999. |
|
|
| The
Directors of your company are pleased to report that export sales during the
year under report |
|
| increased
to Rs. 170,516,323 as compared with previous year's export sales of Rs.
167,151,954 and |
|
| profit
before tax for the year increased to Rs. 3,719,175 as compared with previous
year profit before |
|
| taxation
Rs. 3,453,374 and the Directors of the Company hope further increase in sales
and profit in |
|
| next
year, Earning per share is Rs. 0.67 for the year under report. |
|
|
| The
work for the millennium bug has been completed and the Company is year 2000
compliant. |
|
|
|
| The
present Directors of the Company were elected for three years w.e.f. 9th
June, 1999 at the |
|
| Extra-ordinary
General Meeting held on 7th June, 1999. |
|
|
| The
Directors are pleased to recommend a cash dividend of Re. 1.00 per share
(10%). |
|
|
| The
current profit has been appropriated as under :- |
|
|
|
|
Rupees |
|
| Profit before taxation |
|
|
3,719,175 |
|
| Taxation |
|
|
2,550,530 |
|
|
|
------------------- |
|
| Profit/(Ioss) after taxation |
|
1,168,639 |
|
| Unappropriated
profit brought forward |
|
7,535,426 |
|
|
|
------------------- |
|
| Total
profit available for appropriation |
|
8,704,065 |
|
|
| APPROPRIATED TO: |
|
| Proposed dividend |
|
1,749,600 |
|
|
|
------------------- |
|
| Balance carried forward |
|
6,954,465 |
|
|
|
=========== |
|
|
| The
management continued cordial and co-operative relations with the employees of
the Company. |
|
| Pattern
of shareholding is annexed. |
|
|
| By order of the Board |
|
|
| Lahore: |
|
|
SH. ANWER IQBAL |
|
| 27th November, 1999. |
|
|
Chief Executive |
|
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of NATIONAL TANNERIES OF PAKISTAN
LIMITED as |
|
| at
June 30, 1999 and the related profit and loss account and 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 |
|
| thereof, 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 & loss account together with the notes
thereon have been |
|
| drawn up in conformity with the Companies
Ordinance, 1904, and are in agreement 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
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
information |
|
| required
by the Companies Ordinance, 1984, in the manner so required and respectively
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 (cash flows), for the year then ended; and |
|
|
| d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980 was |
|
| deducted
by the Company and deposited in the Central Zakat Fund established under
section |
|
| 7 of that ordinance. |
|
|
|
| Lahore
· November 27, 1999. |
|
FAZAL MAHMOOD &
COMPANY |
|
|
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
NOTE |
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
| CAPITAL
AND LIABILITIES |
|
| SHARE CAPITAL |
|
|
| Authorised · |
|
| 2,000,000
Ordinary shares of |
|
| Rs. 10/- each |
|
20,000,000 |
20,000,000 |
|
|
=========== |
=========== |
|
| Issued;
Subscribed and Paid up: |
2 |
17,496,000 |
17,496,000 |
|
|
|
|
|
| RESERVES |
|
|
|
| Share premium account |
|
3 |
8,748,000 |
8,748,000 |
|
| Revenue reserve |
|
4 |
24,000,000 |
24,000,000 |
|
| Assets
replacement reserve |
|
5,000,000 |
5,000,000 |
|
| Unappropriated profit |
|
|
6,954,465 |
7,535,426 |
|
|
------------------- |
------------------- |
|
|
44,702,465 |
45,283,426 |
|
| DEFERRED
LIABILITIES |
|
| Deferred Taxation |
|
5 |
1,045,500 |
1,045,500 |
|
|
|
| CURRENT LIABILITIES |
|
| Short term finances |
|
6 |
119,047,815 |
114,940,054 |
|
| Loan from directors and |
|
|
|
| their relatives |
|
7 |
32,425,562 |
36,243,898 |
|
| Creditors,
Accruals and other |
|
|
| Liabilities |
|
8 |
22,954,356 |
24,207,844 |
|
| Provision for taxation |
|
9 |
1,155,000 |
1,060,000 |
|
| Proposed dividend |
|
10 |
1,749,600 |
2,624,400 |
|
|
|
|
------------------- |
------------------- |
|
|
|
|
177,332,333 |
179,076,196 |
|
|
| CONTINGENCIES
AND COMMITMENTS |
11 |
-- |
-- |
|
|
|
|
------------------- |
------------------- |
|
|
|
240,576,298 |
242,901,122 |
|
|
=========== |
=========== |
|
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
| Operating assets |
|
12 |
32,448,067 |
31,369,418 |
|
|
| LONG
TERM DEPOSITS |
|
64,980 |
64,980 |
|
|
|
| CURRENT ASSETS |
|
| Stores and spares |
|
13 |
30,694,379 |
26,314,511 |
|
| Stocks |
|
14 |
158,196,190 |
161,903,887 |
|
| Trade debtors |
|
15 |
928,099 |
1,528,979 |
|
| Advances, Deposits and |
|
|
|
| other receivables |
|
16 |
17,653,367 |
14,516,308 |
|
| Cash and bank balances |
|
17 |
591,216 |
7,203,039 |
|
|
------------------- |
------------------- |
|
|
|
|
208,063,251 |
211,466,724 |
|
|
------------------- |
------------------- |
|
|
|
240,576,298 |
242,901,122 |
|
|
|
=========== |
=========== |
|
|
|
|
|
| The
above accounts should be read in conjunction with the annexed notes. |
|
|
|
|
| Lahore - |
|
SH. ANWER IQBAL |
SH. ARSHAD IQBAL |
|
|
| 27th November, 1999. |
|
CHIEF EXECUTIVE |
DIRECTOR |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
| Sales - Net |
|
18 |
165,214,043 |
165,918,221 |
|
| Cost of Sales |
|
19 |
120,927,693 |
130,460,312 |
|
|
|
------------------- |
------------------- |
|
| GROSS PROFIT |
|
|
36,286,350 |
35,457,909 |
|
| Other income |
|
20 |
64,507 |
106,599 |
|
|
|
------------------- |
------------------- |
|
|
|
36,350,857 |
35,564,508 |
|
| Operating expenses |
|
|
|
| Administrative |
|
21 |
10,926,448 |
11,747,065 |
|
| Auditors' remuneration |
|
22 |
88,000 |
88,000 |
|
| Selling and distribution |
|
23 |
9,370,071 |
8,385,085 |
|
| Financial |
|
24 |
11,970,855 |
11,635,041 |
|
|
------------------- |
------------------- |
|
|
32,355,374 |
31,855,191 |
|
|
|
------------------- |
------------------- |
|
|
| OPERATING PROFIT |
|
3,995,483 |
3,709,317 |
|
| Deduction
for other charges : |
|
| Workers'
profit participation fund |
|
200,406 |
185,466 |
|
| Workers' welfare fund |
|
75,902 |
70,477 |
|
|
------------------- |
------------------- |
|
|
|
276,308 |
255,943 |
|
|
|
------------------- |
------------------- |
|
| PROFIT FOR THE YEAR |
|
|
3,719,175 |
3,453,374 |
|
|
| TAXATION |
|
| Current |
|
9 |
1,155,000 |
1,060,000 |
|
| Prior |
|
|
1,395,536 |
42,725 |
|
|
------------------- |
------------------- |
|
|
2,550,536 |
1,102,725 |
|
|
------------------- |
------------------- |
|
| PROFIT
AFTER TAXATION |
|
1,168,639 |
2,350,649 |
|
| Previous
year's balance brought forward |
|
7,535,426 |
7,809,177 |
|
|
------------------- |
------------------- |
|
| Profit
available for appropriation |
|
8,704,065 |
10,159,826 |
|
|
| Appropriated to: |
|
| Proposed dividend |
|
10 |
1,749,600 |
2,624,400 |
|
|
------------------- |
------------------- |
|
| Balance
Carried to Balance Sheet |
|
6,954,465 |
7,535,426 |
|
|
=========== |
=========== |
|
|
| The
above accounts should be read in conjunction with the annexed notes. |
|
|
| Lahore : |
SH. ANWER IQBAL |
|
SH. ARSHAD IQBAL |
|
| 27th November, 1999. |
Chief Executive |
|
|
Director |
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
| Profit before taxation |
|
3,719,175 |
3,453,374 |
|
| Adjustment for: |
|
|
| Depreciation |
|
3,603,697 |
3,358,297 |
|
| Financial Charges |
|
11,540,862 |
11,414,802 |
|
| Loss/(Gain)
on disposal of fixed assets |
|
6,294 |
(94,692) |
|
|
|
------------------- |
------------------- |
|
| Profit
before working capital changes |
|
18,870,028 |
18,131,781 |
|
| Adjustments
for working capital changes ' |
|
| (Increase)/Decrease
in Current Assets |
|
| Stores and spares |
|
(4,379,868) |
2,860,027 |
|
| Stocks |
|
3,707,697 |
(23,186,362) |
|
| Trade debtors |
|
600,880 |
1,564,713 |
|
| Advances,
Deposits and Other receivables |
|
(3,137,059) |
(1,792,841) |
|
|
------------------- |
------------------- |
|
|
|
(3,208,350) |
(20,554,463) |
|
|
|
|
|
| (Decrease)/Increase
in Current Liabilities |
|
| Short Term Finances |
|
4,107,761 |
16,630,506 |
|
| Loan
from directors and their relatives |
|
(3,818,336) |
4,171,662 |
|
| Creditors,
Accrued and other liabilities |
|
(1,776,189) |
4,706,898 |
|
|
------------------- |
------------------- |
|
|
|
(1,486,764) |
25,509,066 |
|
|
|
------------------- |
------------------- |
|
| Cash
Generated from Operations |
|
14,174,914 |
23,086,384 |
|
| Financial charges paid |
|
(11,070,104) |
(10,866,998) |
|
| Income Tax Paid |
|
(2,455,536) |
(1,342,725) |
|
|
|
------------------- |
------------------- |
|
|
|
(13,525,640) |
(12,209,723) |
|
|
|
------------------- |
------------------- |
|
| Net
Cash in flow from Operating Activities |
|
649,274 |
10,876,661 |
|
|
|
=========== |
=========== |
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Sales
proceeds of fixed asset |
|
125,000 |
105,000 |
|
| Fixed capital expenditure |
|
(4,813,640) |
(3,351.230) |
|
|
|
------------------- |
------------------- |
|
| Net
Cash (out flow) for Investing Activities |
(4,688,640) |
(3,246,230) |
|
|
|
=========== |
=========== |
|
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
| Dividend paid |
|
(2,572,457) |
(2,617,915) |
|
|
|
------------------- |
------------------- |
|
| Net Cash (out flow) for |
|
|
|
| financing activities |
|
(2,572,457) |
(2,617,915) |
|
|
|
------------------- |
------------------- |
|
| NET
(OUT FLOW)/IN FLOW OF CASH |
|
(6,611,823) |
5,012,516 |
|
| CASH
AT BEGINNING OF THE YEAR |
|
7,203,039 |
2,190,523 |
|
|
|
------------------- |
------------------- |
|
| CASH
AT END OF THE YEAR |
|
591,216 |
7,203,039 |
|
|
=========== |
=========== |
|
|
|
|
| Lahore : |
|
SH. ANWER IQBAL |
SH. ARSHAD IQBAL |
|
| 27th November, 1999. |
|
Chief Executive |
|
Director |
|
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
| THE
COMPANY AND ITS OPERATIONS |
|
|
| The
Company is incorporated as a public limited company in Pakistan and is quoted
on |
|
| Lahore
and Karachi Stock Exchanges in Pakistan and engaged principally in the
business of |
|
| manufacture
of leather and leather garments. |
|
|
| NOTE |
|
|
| 1.
ACCOUNTING POLICIES |
|
|
| The
principal accounting policies adopted in the preparation of the Company's
accounts are |
|
| consistent
with those of the previous year except where otherwise stated, and are as
follows ' |
|
|
| 1.1
Provision for staff gratuity : |
|
| Provision
for staff gratuity is not made as provident fund trust has been established
since |
|
| January,
1966. The provident fund scheme covers all the employees of the Company. |
|
|
|
|
| 1.2 Taxation : |
|
| Provision
for current taxation for the year is based on taxable income at the current
rates of |
|
| taxation
after taking into account tax credits available on account of exports. The
Company |
|
| accounts
for the deferred taxation on all material timing differences using the
liability method, |
|
| However,
deferred tax is not provided if it can be established with reasonable
probability that |
|
| these
timing differences will not reverse in the foreseeable future. |
|
|
|
|
| 1.3
Foreign Currency Translation - |
|
| Assets
and liabilities in foreign currencies are translated in Pak rupees at rates
of exchange |
|
| ruling
on balance sheet date. Gains/Losses due to exchange fluctuations on principal |
|
| loans/credits
were previously transferred to the cost of plant and machinery acquired out
of |
|
| proceeds
of such loans/credits. Exchange differences are charged/credited to income |
|
| currently. |
|
|
|
|
|
| 1.4 Fixed Assets : |
|
|
|
|
|
| i)
Freehold land is stated at cost. |
|
|
| ii)
All other assets are stated at historical cost less accumulated depreciation,
except plant |
|
| and
machinery which also includes the exchange difference in respect of foreign |
|
| currency
loan previously utilised for the acquisition of plant and machinery. |
|
|
|
|
| iii)
Depreciation is charged applying the reducing balance method. |
|
|
|
|
| iv)
Full year depreciation is charged in the year of purchase and no depreciation
is charged |
|
| in the year of disposal. |
|
|
|
| v)
Maintenance and normal repairs are charged to income as and when incurred. |
|
|
| vi)
Gains/losses on disposal of assets are included in the current income. |
|
|
| 1.5 Stocks and stores: |
|
| The
basis of valuation are as under :- |
|
| i) Stocks |
|
|
|
|
|
| Raw material |
at cost (FIFO) |
|
| Work in process |
at estimated cost |
|
|
| Finished goods |
at lower of cost |
|
|
|
(FIFO) and net |
|
|
|
realisable value. |
|
|
|
|
|
| ii) Stores |
|
| Tanning material |
at cost (FIFO) |
|
|
| Spares |
at cost (FIFO) |
|
|
|
|
| 1.6
Revenue Recognition : |
|
|
| Local
sales are recognised as and when delivered. Export sales and rebates are
recorded on |
|
| actual realisation. |
|
|
|
|
| 1.7 Cost : |
|
|
| These
accounts have been prepared on the historical cost convention without any
adjustment |
|
| for
effects of inflation or current value except the exchange loss due to
variation in the |
|
| conversion
rate of foreign currency as referred in Note no. 1.3 and is included in the
cost of |
|
| assets
acquired from the proceeds of the foreign currency loan in past. |
|
|
|
|
| 1.8
Net Realisable Value : |
|
| It
is determined on the basis of selling prices prevailing in the market less
selling expenses |
|
| incidental to sales. |
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
| 2.
ISSUED, SUBSCRIBED AND PAID UP CAPITAL |
|
|
|
|
| 958,450
Ordinary shares of |
|
| Rs.
10/- each fully paid in cash |
|
9,584,500 |
9,584,500 |
|
|
|
|
| 791,150
Ordinary shares of Rs. 10 |
|
| each
issued as fully paid bonus shares |
|
7,911,500 |
7,911,500 |
|
|
|
------------------- |
------------------- |
|
|
|
17,496,000 |
17,496,000 |
|
|
|
=========== |
=========== |
|
| 3.
SHARE PREMIUM ACCOUNT |
|
| Premium
@ Rs. 15 per share on 583,200 |
|
| ordinary
shares (right) fully paid in cash |
|
8,748,000 |
8,748,000 |
|
|
=========== |
=========== |
|
|
|
|
| 4. REVENUE RESERVE |
|
| General Reserve |
|
23,875,000 |
23,875,000 |
|
| Dividend
equalisation reserve |
|
125,000 |
125,000 |
|
|
|
------------------- |
------------------- |
|
|
|
24,000,000 |
24,000,000 |
|
|
=========== |
=========== |
|
|
|
| 4.a
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
|
Paid up |
Share |
Revenue |
Assets |
Un |
Total |
|
|
ordinary |
premium |
reserve |
replacement |
appropriated |
|
|
|
share |
|
reserve |
profit |
|
|
|
capital |
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
Rupees |
|
|
| Balance at |
|
| June 30, 1997 |
17,496,000 |
8,748,000 |
24,000,000 |
5,000,000 |
7,809,177 |
63,053,177 |
|
|
| After tax profit for the |
|
| year ended June 30, 1998 |
-- |
-- |
-- |
-- |
2,350,649 |
2,350,649 |
|
|
------------------- |
------------------- |
------------------- |
------------------- |
------------------- |
