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INSTITUTE OF BUSINESS MANAGEMENT

ANALYSES OF FINANCIAL STATEMNENTS

DAWOOD LAWRENCEPUR LTD.

BASED ON A 2009 STUDY

INSTITUTE OF BUSINESS MANAGEMENT

1
ANALYSES OF FINANCIAL STATEMENTS

DAWOOD LAERENCEPUR LTD.

BASED ON A 2009 STUDY

PRESENTED TO:
Sir Maqbool-ur-rehman
Course Instructor,
Analysis of financial statements

PRESENTED BY:
Wajiah Rahat (7211)
Student

DATE: 7TH December 2009

LETTER OF ACKNOWLEDGEMENT

Sir Maqbool-ur-rehman

2
Course Instructor
IoBM, Karachi

Dear Readers:

This report was authorized to us by our course instructor. This report was
assigned to analyze the financial statements of any one of the textile
composite company.

This report provides us an opportunity to analyze the financial statements


in a way we have lean-to

I thank Sir Maqbool who imparted us the necessary knowledge of


Portfolio Management so that we could reach correct conclusions. This
report has enabled me to apply most of what I studied in class and gave
me chance to enhance my knowledge.

Sincerely,
Wajiah Rahat,

DATE: 7TH December’2009

LETTER OF TRANSMITTAL

3
Sir Maqbool-ur-rehman
Course Instructor
IoBM, Karachi

Respected Sir:

I am pleased to inform you that the final report you assigned to us on start
of this fall semester has been completed and is ready for your
examination. The report as per your instruction has covered all areas to
analyze the financial statements of the company.

I hope that you will find this report comprehensive and interesting. For
any queries regarding the report you can reach me at
wajiahrahat@live.com

Sincerely,
Wajiah Rahat,

DATE: 7TH December 2009

TABLE OF CONTENTS

4
• Sectoral
Outlook………………………………………………………………………
………..8
- About the sector
- Porter Five Forces Analysis
- Pest Analysis
- Other Driving Forces Influencing the Industry
- Demand & Supply
- Pricing
- Government Policies
- Problems faced by the sector
- Financial Analysis of The Sector
- Forecasts & Future Outlook
- Conclusion

• Company
Introduction…………………………………………………………………
……..21
- About the company
- Mission & Vision
- Plant Location
- Capacity
- Product Line

• Analysis of Company
Outlook……………………………………………………………...24
- SWOT Analysis
- PEST Analysis
- demand & supply (also mention about exports)
- Contribution to Sectoral GDP
- Position among other Companies in the Sector
- Sales And Growth ( Both real & nominal)

• Analysis of Director’s Report (for each year)


………………………………………………34
- List of Important Findings

• Analysis and Comment on Auditor's


Report……………………………………………….35

• Vertical and Horizontal Common Sizing and


Analysis……………………………………36

• Ratio
Analysis………………………………………………………………………
…………40

• Analysis of Financial
Statements…………………………………………………………..42

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Income Statement
- Analysis of basic elements of income statement
- Analysis of special income statement item (if
present)
Balance Sheet
- Analysis and insight on Assets
- Analysis and insight on Liabilities and
Shareholder’s Equity
- Analysis and insight on Shareholder’s investment
Cash Flow Statement
Analysis of Statement of Changes in Equity

• Analysis of Capital Structure of The firm............


…………………………………………………………………………………
….60

• Analysis of bad debt estimation method used by the


company…………………………63

• Dawoods comparison with Industrial


Averages………………….……...……………….64

• Analysis of depreciation method employed by the


company…………………………….65

• Analysis of cost flow assumption employed by the


company…………………………...66

• Policy Analysis (Conservative, Moderate, or Aggressive)


……………………………….67

• Insight and Recommendation for Investors &


Creditors………………………………….68

• Forecast & Future


Outlook…………………………………………………………………..70

• Conclusion……………………………………………………………
……………………….70

• References…………………………………………………………
………………………….72

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7
Sectoral outlook

About the sector


The textile sector enjoys a pivotal position in the exports of Pakistan. In Asia,
Pakistan is the 8th largest exporter of textile products. The contribution of this
industry to the total GDP is 8.5%. It provides employment to about 15 million
people, 30% of the country work force of about 49 million. The annual volume
of total world textile trade is US$18 trillion which is growing at 2.5 per cent.
Out of it, Pakistan’s share is less than one per cent.

The development of the Manufacturing Sector has been given the highest
priority since Pakistan’s founding with major stress on Agro-Based Industries.
For Pakistan which was one of the leading producers of cotton in the world,
the development of a Textile Industry making full use of its abundant
resources of cotton has been a priority area towards industrialization. At

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present, there are 1,221 ginning units, 442 spinning units, 124 large spinning
units and 425 small units which produce textile products.

The industry consists of large-scale organized sector and a highly fragmented


cottage / small-scale sector. The various sectors that are a part of the textile
value chain are: Spinning, most of the spinning industry operates in an
organized manner with in-house weaving, dyeing and finishing facilities.
Weaving comprises of small and medium sized entities. The processing
sector, comprising dyeing, printing and finishing sub-sectors, only a part of
this sector is operating in an organized state, able to process large quantities
while the rest of the units operate as small and medium sized units. The
printing segment dominates the overall processing industry followed by textile
dyeing and fabric bleaching. The garments manufacturing segment generates
the highest employment within the textile value chain. Over 75% of the units
comprise small sized units. The knitwear industry mostly consists of factories
operating as integrated units (knitting + processing + making up facilities). The
clothing sectors both woven and knits are mainly clustering in Karachi–
Lahore and Faisalabad where sufficient ladies labor is available.

High value added products i.e. garments and textile made-ups have over the
years progressively increased their share in the textile export portfolio.
Currently these products constitute 57% of the total textile exports. During
early nineties the textile exports were dominated by yarn and greige fabric
which had a share of almost 56% in the total exports. As far as the markets
are concerned 60% -70% of the merchandise is exported to the USA and the
EU.

The Textile Industry in Pakistan Is Divided Into Six Major Sub-Categories

• Ginning Industry
• Spinning Industry
• Weaving Industry
• Knitting Industry

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• Garment Industry
• Polyester Fiber Industry

Established capacity

The textile industry of Pakistan has a total established spinning capacity of


1550 million kgs of yarn, weaving capacity of 4368 million square metres of
fabric and finishing capacity of 4000 million square metres. The industry has a
production capacity of 670 million units of garments, 400 million units of
knitwear and 53 million kgs of towels.

The industry has a total of 1221 units engaged in ginning and 442 units
engaged in spinning. There are around 124 large units that undertake
weaving and 425 small units. There are around 20600 power looms in
operation in the industry. The industry also houses around 10 large finishing
units and 625 small units.

Pakistan’s textile industry has about 50 large and 2500 small garment
manufacturing units. Moreover, it also houses around 600 knitwear-producing
units and 400 towel-producing units.

Contribution to exports

According to recent figures, the Pakistan textile industry contributes more than
60% to the country’s total exports, which amounts to around 5.2 billion US
dollars. The industry contributes around 46% to the total output produced in
the country.

In Asia, Pakistan is the 8th largest exporter of textile products.

Contribution to GDP and employment

The contribution of this industry to the total GDP is 8.5%. It provides


employment to 38% of the work force in the country, which amounts to a

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figure of 15 million. However, the proportion of skilled labor is very less as
compared to that of unskilled labor.

Organisations in the industry

All Pakistan Textile Mills Association is the chief organization that determines
the rules and regulations in the Pakistan textile industry.

Opportunities available

The world demand for textiles is rising at around 2.5%, due to which there is a
greater opportunity for rise in exports from Pakistan.

Porter's five model analyses

One of the worst hit sectors during the skyrocketing interest rate scenario in the late 90s and
early 2000s, the debt-laden Indian textile industry has spun many turn-around stories since
then. Aided by lower interest rates, restructuring packages from financial institutions and the
recent dismantle of quotas; the sector is today well poised to capture growth opportunities. In
2005, the sector contributed 20% to industrial production, 9% to excise collections, 18% of
employment in industrial sector, nearly 20% to the country's total export earnings and 4% to
the GDP. The textile sector employs nearly 35 m people and is the second highest employer
in the country. Infect, it is estimated that one out of every six households in the country
directly or indirectly depend on this sector. Here we analyze the sector's dynamics through
Porter's five-factor model.

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Bargaining power of customers (demand scenario)
Global textile & clothing industry is currently pegged at around US$ 440 bn. US and European
markets dominate the global textile trade accounting for 64% of clothing and 39% of textile
market. With the dismantling of quotas, global textile trade is expected to grow (as per Mc
Kinsey estimates) to US$ 650 bn by 2010 (5 year CAGR of 10%). Although China is likely to
become the 'supplier of choice', other low cost producers like India would also benefit as the
overseas importers would try to mitigate their risk of sourcing from only one country. The two-
fold increase in global textile trade is also likely to drive India's exports growth. India's textile
export (at US$ 15 bn in 2005) is expected to grow to US$ 40 bn, capturing a market share of
close to 8% by 2010. India, in particular, is likely to benefit from the rising demand in the
home textiles and apparels segment, wherein it has competitive edge against its neighbor.
Nonetheless, a rapid slowdown in the denim cycle poses risks to fabric players.

Bargaining power of suppliers (supply scenario)


India is the third largest producer of cotton in the world after China and US and has the
largest area under cultivation. Cotton, a key
raw material in the textile and garment
industry, accounts for about 30% of the
fabric cost and 13% of the garment cost.
India has an abundant supply of locally
grown long staple cotton, which lends it a
cost advantage in the home textile and
apparels segments. Other countries, like China and Pakistan, have relatively lower supply of
locally grown long staple cotton. Moreover, low cotton prices due to a bumper cotton crop
would enable India to lower its production cost and sustain pricing pressure. Further, efforts

12
on improving the yield per hectare would ensure higher productivity and production, thereby
providing the much-needed security of raw-material supply to textile producers.

India also enjoys a significant lead in terms of labor cost per hour (US$ 0.6 in 2004), over
developed countries like US (US$ 15.1) and newly industrialized economies like Hong Kong
(US$ 5.1), Taiwan (US$ 7.1), South Korea (US$ 5.7) and China (US$ 0.9). Also, India is rich
in traditional workers adept at value-adding tasks, which could give Indian companies
significant margin advantage.

Threat of new entrants


In the quota free regime, capacity expansion is the name of the game in the textile sector.
Resultantly, smaller players who cannot venture into the global markets are flooding the
domestic markets with excess supply, thus weakening the pricing scenario. Be it denim
(Arvind Mills), home textiles (Welspun and Alok Industries) or branded apparels (Raymond),
new capex and consolidation with international players is also not likely to safeguard margins
for the larger players, unless they can tap a significant pie of the overseas markets.

Threat of substitutes
Low cost producing countries like Pakistan and Bangladesh (labor cost 50% cheaper) are
also posing a threat to India's exports demand. Infact, players like Arvind Mills have already
started feeling the pinch as overseas buyers have started shifting to 'alternative sources', thus
impacting their incremental volume off-takes.

Competitive rivalry
India's logistic disadvantage due to its geographical location can give it a major thumbs-down
in global trade. The country is distant from major markets as compared to its global
competitors like Mexico, Turkey and China, which are located in relatively close vicinity to
major global markets of US, Europe and Japan. As a result, high cost of shipments and
longer lead-time coupled with lack of infrastructure facility may prove to be major hindrances.

The fragmented structure of the industry has also stood in the way of achieving true
integration between the various links in the supply chain. The sector has one of the longest
and most complex supply chains in the world, which the larger players are trying to correct by
integrating their operations and improving efficiency levels.

Textiles being a fairly regulated sector till the recent past (quota regime), another
indispensable leg of the above analysis is government regulations. Technology Upgradation
Fund Scheme (TUFS) was launched in FY99 for a period of five years (later extended upto
FY07) to promote the upgradation of the textile and jute industry. The scheme aimed at
providing loans to the sector at internationally comparable rates of interest (5% lower than the
domestic interest rates), which enabled the players to upgrade their technology at lower cost

13
of capital. Establishment of 'Apparel Export Parks' and fiscal incentives in the recent budgets
also indicate the government's resolve to aid the sector's growth and international
competitiveness.

As one can comprehend from the above analysis, the potential for the sector's growth are
ample, but the trick lies in competing effectively against rivals. Consolidation of the industry
and delivery of better quality at effective rates and minimum lead time would certainly help the
players surmount all competitive pressures

PEST analyses

Political Analysis – Political stability, trade regulations, tax policies, industrial


safety and environmental regulations, employment laws, IP rights. The factors
negatively affect all businesses; including the political wars among the parties
etc. The monthly wages were increased. These steps did prove to be a
successful in motivating an already depressed and low paid labor force but at
the same time increased the threats from labor unions for meeting their
demands and cost of production for already suffering textile industry.

Economic Analysis – Economic growth, inflation rate, interest rates, exchange


rates, labor costs, government expenditure, consumer spending. The
inflationary pressures as noted in the year 2006 influences the company
sales. However the inflation rate is stabilizing and is at 10.26% and the SBP
has decreased interest and is expected to further cut the interest rates. The
rupee depreciation during the year has been beneficial for the exporters, as
unit prices in PKR have increased for the textile segment.

Social Analysis – Demographics, consumer behavior, leisure interests,


income distribution, living standards, health consciousness, fashion & lifestyle
changes In rural areas of Pakistan there are fewer opportunities to earn a
living, so many bread earners move out to find a better earning opportunities.
They mostly find jobs in different sectors including textiles and also prove to
be low cost labor. This benefits the companies in competing in terms of cost.

14
Technological Analysis – Technological developments, new inventions,
automation, information technology Pakistan is facing serious power crises in
terms of electricity shortage and gas shortage as well. Due to this many textile
units have completely shut down and many units have to cut down production.
Since decades many incentives were given to the local industry such as tax
rebates, R&D support in 2007. The domestic companies took advantage of
such policies but were not able to add value to the textile exports due to which
Pakistan exports are falling sharply.

Other Driving Forces Influencing the Industry


Security concerns (refrained international buyers to visit •
(Pakistan

Compliance with Social, Environment and Health standards •

Quality of products •

Focus on low value added products e. g. spinning than on •


.composites

Insufficient product diversification •

The wastage of material during production is among 16-18 •


% which is very high in relation to competitors where wastage is
.around 4-5%

Availability of machinery but shortage of skilled operators •

.Lack of Marketing efforts •

Duty imposed on the import of bed linen by EU 7.5% •

Demand and supply

Global textile & clothing industry is currently pegged at around US$ 440 bn.
US and European markets dominate the global textile trade accounting for
64% of clothing and 39% of textile market. With the dismantling of quotas,
global textile trade is expected to grow (as per Mc Kinsey estimates) to US$

15
650 bn by 2010 (5 year CAGR of 10%). Although China is likely to become
the 'supplier of choice', other low cost producers like India would also benefit
as the overseas importers would try to mitigate their risk of sourcing from only
one country. The two-fold increase in global textile trade is also likely to drive
India's exports growth. India's textile export (at US$ 15 bn in 2005) is
expected to grow to US$ 40 bn, capturing a market share of close to 8% by
2010. India, in particular, is likely to benefit from the rising demand in the
home textiles and apparels segment, wherein it has competitive edge against
its neighbour. Nonetheless, a rapid slowdown in the denim cycle poses risks
to fabric players.

India is the third largest producer of cotton in the world after China and US
and has the largest area under
cultivation. Cotton, a key raw
material in the textile and garment
industry, accounts for about 30% of
the fabric cost and 13% of the
garment cost. India has an abundant
supply of locally grown long staple cotton, which lends it a cost advantage in
the home textile and apparels segments. Other countries, like China and
Pakistan, have relatively lower supply of locally grown long staple cotton.
Moreover, low cotton prices due to a bumper cotton crop would enable India
to lower its production cost and sustain pricing pressure. Further, efforts on
improving the yield per hectare would ensure higher productivity and
production, thereby providing the much-needed security of raw-material
supply to textile producers.

Pricing

16
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Government policies

However, the government changed its policies and started making frequent
upward revision of power, gas tariffs, oil prices and other inputs cost, which
affected the local industries seriously and manufacturing costs have gone up
tremendously making locally products goods uncompetitive in international as
well as local market. This has resulted in decline of sale and closure of
industries converting them in warehouses.

He feared that government revenue collection would also suffer to a large


extent if the present trend remains continue and government failed to reduce
cost of doing business as well as overcome the smuggling. He urged the
government to take appropriate measures to stop export of yarn and its prices
should be kept at reasonable level.

Former Vice President KCCI, Abdullah Zaki said that the textile sector facing
serious problems owing to increase in price of yarn in local market, its non-
availability. He claimed that over 60 lakhs dollars' export orders of towel have
been cancelled due to high prices and non -availability of yarn. He said that
Bangladesh and China are supplying fabrics at very low price in international
market owing to huge export of yarn from Pakistan as well as low cost of
production in these countries.

Problems Faced By the textile Industry

1. Lost competitiveness in the global market


2. Lack of awareness of global trends and changing rules and
regulation.
3. The reinvestment and introduction of the latest technology
4. Sector did not focus on the emerging trend of the value
additions

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5. More dependence on cotton
6. Poor infrastructure
7. Unstable political situation
8. Obsolete technology machinery and equipment used for
manufacturing
9. Availability of raw material and inconsistent raw material prices
10. Unskilled labor (only 1% workers have certificate / diploma from
technical training institutions)
11. Absence of research and development culture
12. Lack of synergies between Govt. support institutions and
practical market.
13. Lack of standardization and quality control
14. Non-sophisticated marketing sense. (Branding & grading)
15. Unorganized vendor base
16. Limited access to information (availability of finance,
technological know-how & Govt. regulations)
17. Energy costs
18. 20% Interest on Bank Loans
19. Tariff hikes of Gas
20. Tariff hikes of Electricity
21. Frequent Interruption in supply of electricity and Gas
22. High Freight Cost
23. Demand Of drastic cut on textile products from their buyers from
US and EU

FINANCIAL ANALYSES

The fiscal year 2008-09 was a year of recession for most businesses
including textile sector worldwide. Deep recession in the US and European
markets led to lower sales at retail levels together with stiff competition for
suppliers. Pakistan's textile exports were hit hard due to intense competition

19
with regional countries in FY09. This, alongside rising interest rates and
prolonged power cuts proved to be a hindrance to earnings of the textile
industry in FY09, as depicted by a decline of 57% YoY. For textile sector in
Pakistan, the year was also one of the most volatile due to a number of
reasons.

Decelerated business volumes and electricity crisis have taken its toll and
many small and medium size production houses have shut down already or at
the verge of closure. A record increase in the prices of cotton and yarn in the
first quarter and steep rise in interest rates had impacted the sector on varying
degrees. Domestic textile units gained as well as lost in all these volatilities as
per their strengths and relative positioning in the market.

FUTURE OF TEXTILE INDUSTRY

Demand of textile products is increasing every year to almost 3%. So


Pakistan can also capture some share from this but the industrialists and the
government needs to focus on this sector. Textile industry just needs a good
leader in the government which can drive the industry in a right direction.
Textile Industry of Pakistan can kick its competitors far off and can contribute
up to 90% in the total GDP of Pakistan. In short Textile Industry of Pakistan
has a great potential, it is lacking in some natural resources like power and
some political instability of the country is also playing a vital role in the reverse
gear of Textile sector. But I am sure Textile industry of Pakistan will grow and
will keep its big share in the world textile.

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I. COMPANY INTRODUCTION

• About the company

Dawood Lawrencepur Limited, "The Company" is a duly incorporated


public limited company formed as a result of scheme of arrangement for
amalgamation in terms of provisions of section 284 to 287 of the

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Companies Ordinance, 1984 between Dawood Cotton Mills Limited,
Dilon Limited, Burewala Textile Mills Limited, Lawrencepur Woollen and
Textile Mills Limited and members of the said companies. The shares of
the Company are listed on the Karachi and Lahore Stock Exchanges.
The Company is principally engaged in the business of manufacture and
sale of yarns and fabrics made from natural and man-made fibers and
blends thereof. The registered office of the Company is situated at 35-A,
Shahrah-e-Abdul Hameed Bin Baadees (Empress Road), Lahore. During
the year the Company, due to continuous losses of its Dawoodabad unit
located at Burewala, District Vehari, has also suspended its operations
of the said unit effective March 2008. Accordingly in line with IFRS-5 Non
current assets held for sale and Discontinued Operations, the operations
relating to the closed down plant and machinery have been classified as
discontinued operations. The assets and liabilities related to
discontinued operations have been transferred to assets held for
disposal and liabilities directly associated with the assets classified as
held for sale. Based on the above, following operations of the Company
are now classified under discontinued operations:
- Landhi Mills - Karachi
- Dilon Mills - Karachi (Landhi Synthetic)
- Dawoodabad Mills - Burewala

• Mission And Vision

Vision:

To pursue sustained growth through a diversified business portfolio


For enhancing stakeholder value.

Mission:

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• To be a responsible corporate citizen with respect for the
society.
• To achieve safe & healthy business environment.
• To provide excellent working environment and growth potential
for the employees.
• To strive for excellence through commitment, integrity, honesty
and teamwork.
• To make honest and ethical behavior a way of life.
• To improve quality of life for the employees.

• Plant location

The mills of the Dawood Lawrencepur are located in the Landdhi Mills in
the Landhi Industrial Area, Karachi. The Landhi synthetic is also situated
in the Landhi Industrial Area.

The registered office of the Company is situated at 35-A, Shahrah-e-Abdul


Hameed Bin Baadees (Empress Road), Lahore. During the year the
Company, due to continuous losses of its Dawoodabad unit located at
Burewala, District Vehari, has also suspended its operations of the said
unit effective March 2008. Accordingly in line with IFRS-5 Non current
assets held for sale and Discontinued Operations, the operations relating
to the closed down plant and machinery have been classified as
discontinued operations. The assets and liabilities related to discontinued
operations have been transferred to assets held for disposal and liabilities
directly associated with the assets classified as held for sale. Based on the
above, following operations of the Company are now classified under
discontinued operations:
- Landhi Mills - Karachi
- Dilon Mills - Karachi (Landhi Synthetic)
- Dawoodabad Mills - Burewala

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• Capacity

The total production capacity uptil 2008 has includes the following:

Capacity 2008 2007 2006 2005 2004 200 200 2000


(KGS) 3 1
'000
Polyester 1400 1400 1400 1050 1400 -
Yarn
Yarn 25619 25619 25619 17135 22847 12355
Cloth 5060 5060 5060 6396 17179 8698

The Capacity production as we can see from the above table of Polyester was
same throughout the eight year except for in 2005. The Figure for 205 is
change as due to the change in the accounting year. Yarn has had the most
capacity among the three product lines. However that of the Cloth capacity
decreased drastically from the year 2004 and reach to 5060'000 Kgs.

• Product Line

The Company is principally engaged in the business of manufacture and


sale of yarns and fabrics made from natural and man-made fibers and
blends thereof

II. ANALYSES OF THE COMPANY OUTLOOK

• SWOT Analysis

The availability on economical, reliable and sustainable energy is the key


Issue that companies face globally today. Countries all over the world are
Grappling ways in which millions of households, industries and other
Businesses can be provided with energy that is dependable and does not tax

24
Our future generations.

STREGNTHS
Dawood Lawrencepur have decided that with technical and financial
capabilities within the company and the group, they can play an instrumental
role in an effort to the national objective of reliable, economical, sustainable
energy for sustainable economic development, creating an environment
where everyone can turn reach grow.

WEAKNESS
The weakness of the company includes the power shortages, due to the
increased cost of which the company re

THREATS
In Pakistan we face a slightly different challenge. While the world
Figures out a way to power the economic growth of the future, we at home
Are concerned with the issue of inadequate energy today. Demand has
Outgrown supply massively in the past, the resulting in prolonged power
Breakdowns and gas load shedding. Pakistan's energy scarcity is indeed
disconcerting. It is seen as the single biggest impediment to the
growth for our industrial sector. Frequent power outages render our
exports uncompetitive, as idle factories cannot deliver goods so
desperately needed to
Be produce on time. This is the issue of reliable energy.

OPPORTUNITIES
The company currently generates over 6500 MW from renewable hydel
energy, but have the capacity to generate 32000 MW more. According to
latest figures Dawood has the potential to generate up to 43,000 MW through
wind energy alone, a source already producing electricity at commercially
viable levels. The location in the tropics gives Dawood Lawrencepur an added
advantage to use the sun to power our homes, with technologies becoming
increasingly competitive with conventional methods of power generation.

25
Pakistan possesses over 180 billion tones of coal. We also have the lowest
drilling densities and highest success ratios suggesting tremendous potential
In hydrocarbon exploration. On top of that we are located in the region that
has provided much of the world with cheap energy and is forecasted to do so
for next few decades. All of these factors have coupled together for us to look
back and turn.

• PEST Analysis

Political
The factors negatively affect all businesses; including the political wars among
the parties etc. The monthly wages were increased. These steps did prove to
be a successful in motivating an already depressed and low paid labor force
but at the same time increased the threats from labor unions for meeting their
demands and cost of production for already suffering textile industry.

Economic
The inflationary pressures as noted in the year 2006 influences the company
sales. However the inflation rate is stabilizing and is at 10.26% and the SBP
has decreased interest and is expected to further cut the interest rates. The
rupee depreciation during the year has been beneficial for the exporters, as
unit prices in PKR have increased for the textile segment.

Social
In rural areas of Pakistan there are fewer opportunities to earn a living, so
many bread earners move out to find a better earning opportunities. They
mostly find jobs in different sectors including textiles and also prove to be low
cost labor. This benefits the companies in competing in terms of cost.

26
Technology
Pakistan is facing serious power crises in terms of electricity shortage and gas
shortage as well. Due to this many textile units have completely shut down
and many units have to cut down production. Since decades many incentives
were given to the local industry such as tax rebates, R&D support in 2007.
The domestic companies took advantage of such policies but were not able to
add value to the textile exports due to which Pakistan exports are falling
sharply.

• Demand & supply

The demand and supply of a Dawood textile industry depends upon few main
factors. Some of them are mentioned below.

1. Internal Conditions of the home country


2. Condition of the country where the end product is to be exported
3 Global financial conditions

If we take an example of current situation of textile sector we’ll come to know


that the demands are much more then supply. Reason for less supply from
industry is

1. Shortage of Cotton.
2. Unavailability of Skilled Labor
3. Problems of Electricity Shortage
4. Problems of Gas shortage
5. Improper law and order situations
6. Unrealistic hike in fuel prices

The textile industry can supply more then it is already supplying if the above
mentioned problems get solved.

27
Regarding past if we compare then the demands were high but the supply
was low because of hike in freight charges and also the raw material which
depends upon oil or we can say due to hike in the prices of all petrochemical
products which are necessary for a textile industry. For example:

1. Plastic Resin: Which is used for making plastic bags


2. Dyes: Used as colorants
3. Chemicals of all types used in dyeing and finishing processs
4. Lubricants.
5. Fuel ( which is some what stable now then before )
6. Transportation charges.

In future if our government can provide the better fuel including power and
natural gas then much of the problems of a textile industry will get solved in
this way.

• Contribution to Sectoral GDP & Position among other


Companies in the Sector

The Ranking of Dawood Lawrencepur according to its sector can be seen


from the below table which shows that the company has Rs. 245.6 million of
net worth and a net income of 289.7 million and net profit of 29.8 million
rupees. Due to the present changes in the company, that is selling off of the
plant and discontinued operations the companies earning has suffered a
major downfall as compared to the industry.

COMPANY NAME RS. IN RS. IN RS. IN


MILLI MILLI MILLI
ON ON ON
NET NET NET
WORT INCO PROF
H ME IT

A.A. TEXTILES LTD. 223.2 822.3 53.9

28
AHMAD HASSAN TEXTILE 209.8 659.4 101.8
MILLS LTD.

AL-ABID SILK MILLS LTD. 352.3 2033.1 80.8

AL-HAMAD TEXTILE MILLS 96.3 380.2 28.2

ALLAWASAYA TEXTILE 7 77.6 589.4 28.9


FINISHING MILLS
LTD.

APOLLO TEXTILE MILLS 213.3 968.8 18.8


LTD.

ARTISTIC DENIM MILLS 321.2 917.2 55.4


LTD

AYESHA TEXTILE MILLS 152.8 1211.6 118.2


LTD.

BENGAL FIBRE 91.8 389.5 19.3


INDUSTRIES LTD.

BHANERO TEXTILE MILLS 325 1308.3 165.2


LTD.

BLESSED TEXTILE LTD. 215.8 693 116.4

BUREWALA TEXTILE 337.9 431.1 60.5


MILLS LTD.

CHANAB FIBER LTD. 108.6 478.6 47.8

COLONY TEXTILE MILLS 96.4 683.3 147.7


LTD

CRESCENT TEXTILE MILLS 1425.9 4632.5 246


LTD

DARES SALAAM TEXTILE 92.3 452.1 82.5


MILLS LTD

DEWAN KHALID TEXTILE 254.7 560.6 31.9

29
MILLS LTD

DEWAN MUSHTAQ 124.8 761.7 38.5


TEXTILE MILLS LTD

DEWAN SALMAN FIBRE 458.4 6723.7 514.2


LTD

DEWAN TEXTILE MILLS 685.4 2282 121.6


LTD

DILON LTD 100.7 186.6 18.5

FAISAL SPINNING MILLS 387.9 714.3 127.9


LTD

FATEH TEXTILE MILLS 585.2 3636.2 21.9


LIMITED

FAZAL CLOTH MILLS LTD 257.5 1553 107.2

GADOON TEXTILE MILLS 1332.5 3438.6 485.4


LTD

GATRON INDUSTRIES LTD 1709.6 4924.9 349.9

GUL AHMED TEXTILE 1322 4516 558


MILLS LTD

GULISTAN SPINNING 214.5 592.8 76.8


MILLS LTD

GULISTAN TEXTILE MILLS 875.8 2323.6 120.2


LTD

GULISTAN SPINNING 512.2 4373.4 99.8


MILLS LTD

HUSSEIN INDUSTRIES LTD 276.1 1188.6 35.7

IBRAHIM FIRES LTD 5138.1 6944.2 474.8

IBRAHIM TEXTILE MILLS 239.9 1161.6 52.8

30
LTD

ICC TEXTILES LTD 147 629 31.8

IDEAL SPINNING MILLS 137.2 536.5 22.8


LTD

INDUS DYEING & 281.2 2184.7 134.6


MANUFACTURING CO
LTD

ISHAQ TEXTILE MILLS 218.7 742.8 10.8


LTD

KHALID SIRAJ TEXTILE 144.6 367.4 46.5


MILLS LTD

KOHAT TEXTILE MILLS 96.2 532.3 27.7


LTD

KOHINOOR RAIWIND 525.4 1372.9 132.0


MILLS LTD

KOHINOOR TEXTILE 502.8 2251.8 97.7


MILLS LTD

KOHINOOR WEAVING 741.8 2140 308.7


MILLS LTD

LANDMARK SPINNING 121.2


INDUSTRIES LTD

LAWRENCEPUR 245.6 298.7 29.8


TEXTILE MILLS
LTD

LIBERTY MILLS LTD 193.3 1455.7 35.1

MAHMOOD TEXTILE 816.1 2936 421.3


MILLS LTD

MAQBOOL TEXTILE MILLS 146.7 640.7 34

31
LTD

MAIN TEXTILE 114.3 807.6 51.4


INDUSTRIES LTD

N.P. SPINNING MILLS LTD 155.8 922.3 61

NADEEM TEXTILE MILLS 188.5 406.7 54.4


LTD

NAKSHBANDI INDUSTRIES 262.6 1067.2 27.6


LTD

NAYAB SPINNING & 251.6 413.5 12.3


WEAVING MILLS LTD

NINA INDUSTRIES LTD 352.3 892.4 16.3

NISHAT CHUNIAN LTD 595.5 2367.0 357.5

NISHAT MILLS LTD 4569.6 10134 700.9

PARAMOUNT SPINNING 286.6 830.7 3


MILLS LTD

PROSPERITY WEAVING 244 1141.1 78.5


MILLS LTD

QUETTA TEXTILE MILLS 245.9 1792.9 110.4


LTD

RELIANCE COTTON 236.1 701.3 40.3


SPINNING MILLS LTD

RELIANCE WEAVING 313.4 1306.9 143.1


MILLS LTD

RUPALI POLYSTER 1374.1 2175.2 140.4


LIMITED

S.G. FIBRE LTD 417 808 66

SAIF TEXTILE MILLS LTD 506.1 1066 28

32
SAMIN TEXTILE MILLS 256.5 1012.9 32.1
LTD

SAPPHIRE FIBRES LTD 1305.7 2499.6 500.9

SAPPHIRE TEXTILE MILLS 1108.3 4128.1 650.2


LTD

SHAHPUR TEXTILE MILLS 161.2 416.6 24.6


LTD

SHAHTAJ TEXTILE MILLS 146.8 474 39.6


LTD

SUNRAYS TEXTILES 91.9 861.6 87


MILLS LTD

TATA TEXTILE MILLS LTD 223.5 793.3 120.7

THAL JUTE MILLS LTD 331.2 1406.4 68.6

TOWELLERS LTD 384.2 1766.4 43.3

YOUSAF WEAVING MILLS 225.9 1271.9 47.9


LTD

YUSUF TEXTILES MILLS 122 603 89.1


LTD

ZAINAB TEXTILES MILLS 261.1 991.5 61.1


LTD

ZAMAN TEXTILE MILLS 89.4 407.2 21.6


LTD

33
III. Analysis of Director’s Report
• The textile operations and the polyester staple fiber operations
at Landhi were closed down during the year 2006-07, the operations at
Burewala had to be closed down in March 2008. Accordingly, all closed
down operations are classified under 'discontinued operations', as
required under the International Financial Reporting Standard (IFRS) 5
“Non Current Assets held for sale and Discontinued Operations'.
• In January 2008 acquired 100% shareholding in Tenaga
Generasi Limited. This company holds an LOI from the Alternate
Energy Development Board and has a Generation License from
NEPRA for setting up a 50 MW Wind Energy Farm.
• DLL Group's turnover for the year was Rs. 689.84 million
(inclusive of turnover from 'discontinued operations' of Rs.323.88
million) as against the turnover of Rs. 1,629.60 million of the previous
year.
• Earnings per share of the Group were Rs. 31.36 as compared to
Rs. 1.81 per share of the similar period last year.
• During the year, with the acquisition of 100% share holding in
TGL, DLL became a holding company of TGL.
• The company has decided to re-measure its investment
in associate at Cost. This change has been applied
retrospectively.

34
• The Company's profitability during the year was significantly
impacted by the inflationary pressures, power tariff hike and by the
need to rationalize old inventories in 2006.
• The figures for the past three years (2001-2003) represent the
period when the Merger had not taken place and those of previous
year 2005 are of nine months because of the change in accounting
year from September to June.
• In May 2004, the Company name was changed ' Dawood
Lawrencepur Limited' to so as to take advantage of the goodwill
associated with the name of Lawrencepur. This report being the first
annual report of the merged entity, demonstrates the commitment to be
better prepared in the post WTO scenario.

IV. Analysis and Comment on Auditors’s Report


• The report has been conducted in accordance with the auditing
standards applicable in Pakistan.
• The books of account has been kept by the company in
accordance with the company ordinance
• The expenditures incurred were for the purpose of business
• The expenditures and investments made were also in
accordance with the business objectives
• The Zakat was deductable at source under the zakat and ushr
ordinance.

35
V. Vertical and Horizontal Common Sizing
Analysis

VERTICAL ANALYSES (2008-2003) In Percentage terms


BALANCE
SHEET
2008 2007 2006 2005 2004 2003
NON CURRENT
ASSETS
Fixed Assets
Property, plant and equipment 4.26 22.5
Operating Asset 11.44 9.75 10.88 8.44
Capital Work in
Progress 0.115 5.7
Intangible assets 0.11 0.0002
Long Term Investments 27.5 27.5 68.29 51.94 51.52 59.16
Long term loans and advances 9.78 0.015 0.014
Long Term Deposits 1.17 0.86 3.89 0.622 0.676 0.329
33.04 50.8602 83.735 77.792 63.091 67.943
CURRENT ASSETS
Stores and spares 2.5 3.9 1.48 1.91 1.7 2.019
Stock-in-trade 10.94 15.15 10.44 19.09 21.73 11.629
Trade debtors 2.619 7.63 4.71 5.91 6.57 6.01
Short term investments 0.24 0.21 0.075 0.115 0.32 2.156
Loans and advances 0.03 0.16
Deposits, prepayments and other
receivables 4.79 4.62 2.48 3.71 4.26 3.31
Cash and bank
balances 3.46 1.76 0.49 1.196 2.29 6.911
24.579 33.43 19.675 31.931 36.87 32.035
Assets of disposal group classified as
held for sale 42.34 15.61
Total Assets 100 100 100 100 100 100

SHARE CAPITAL AND RESERVES

36
Issued, subscribed & paid up 26.06 17.58 5.56 7.27 7.87 9.32
Reserves 62.3 65.43 8.69 12.48 13.51 15.99
Unappropriated profit 12.83 19.51 10.2 10.26
Fair value reserve on investment 60.23 38.27 44.89 51.15

88.36 83.01 87.31 77.53 76.47 86.72


NON CURRENT LIABILITIES
Liabilities against assets subject to
finance lease - 0.97 0.66 1.81 2.74 0.425
Deferred Liabilities 2.1 3.42 1.76 2.5 2.69 3.38
CURRENT LIABILITIES
Trade and other payable 7.63 5.16 2.47 2.94 3.92 4.35
Short term bank finances-secured 5.6 6.74 13.52 10.37 1.139
Current portion of lease liabilities 1.32 0.937 0.56 0.96 1.03 0.2
Interest / markup on short term bank
finances 0.246
Provision for taxation 0.56 0.621 0.2 0.27 0.316 0.72
dividend 0.3 0.43 2.41 3.03
Total 11.61 16.954 12.69 22.43 23.476 13.244
CONTINGENCIES AND
COMMITMENTS - 10.26 18.13
Total Liabilities and Equities 100 100 100 100 100 100

VERTICAL ANALYSES (2008-2003) In Percentage terms


BALANCE SHEET
2008 2007 2006 2005 2004 2003
Sales -
net 100 100 100 100 100 100
Cost of goods sold -79.9 -95.01 -94.616 -89.568 -90.95 -90.78
Gross
profit 20.1 4.99 5.384 10.432 9.05 9.22
Operating expenses
Administrative and general -6.46 -4.47 -3.979 -4.14 -4.16 -4.768
Selling and
distribution -5.68 -3.71 -3.339 -4.3 -3.61 -2.23
Loss from discontinued
operations -81.68 -5.92
Operating (loss) -73.72 -9.11 -1.934 1.992 1.28 2.222
Finance cost -0.09 -2.875 -4.07 -2.49 -1.17 -1.32
Other income 23.059 13.643 6.506 41.45 10.01 16.15
Other charges -0.0026
Donation to Earthquake relief
fund -0.6679
(Loss) / Profit before
tax -50.751 1.658 -0.1685 40.952 10.12 17.052
Taxation
-
current -2.737 -1.228 -0.7 -1.06 -0.875 -2.01
- prior -0.0157 -0.236
-
Deffered 1.204 0.479 2.98
(Loss)/Profit for the year after tax -53.488 1.634 -0.8685 39.892 9.7083 17.786

37
HORIZONTAL ANALYSES (2008-2003) In Percentage
terms
BALANCE SHEET
2008 2007 2006 2005 2004 2003
NON CURRENT
ASSETS 100
Fixed Assets 100
Property, plant and equipment 76,286,430 543,766,550 100
Operating Asset 249.5597 148.0515 152.4301 100
Capital Work in
Progress 100
Intangible assets 1,987,421 6900 100
Long Term
Investments 22.13421 29.84008 212.6152 112.5519 103.0908 100
Long term loans and advances 0 0 0 84.18373 124.7119 100
Long Term Deposits 169.0466 168.1174 221.1545 242.3281 243.1303 100
100
CURRENT ASSETS 100
Stores and spares 59.16137 124.157 136.7135 121.3025 99.94338 100
Stock-in-trade 44.81101 83.59441 165.3697 210.5154 221.2335 100
Trade debtors 20.74004 81.40362 144.7853 126.1839 129.4685 100
Short term
investments 5.337458 6.474139 6.523559 6.869506 17.99244 100
Loans and advances 565,433 3,924,264 100
Deposits, prepayments and other
receivables 68.85479 89.39726 138.0375 143.5686 152.284 100
Cash and bank
balances 23.85453 16.36852 13.24372 22.1821 39.29559 100
36.55825 66.97681 113.3741 127.8206 136.322 100
Assets of disposal group classified as
held for sale 758,363,668 376,699,002 100
Total Assets 47.60145 64.13287 184.1495 128.1817 118.372 100
100
SHARE CAPITAL AND
RESERVES 100
Issued, subscribed & paid up 133.1 121 110 100 100 100

38
Reserves 185.3668 262.29 100 100 100 100
Unappropriated profit 0 0 230.1745 243.7881 117.7376 100
Fair value reserve on investment 216.7745 95.90944 103.8914 100
Captal and Reserves 118.2123 149.6286 140.1637 141.4704 105.1158 100
100
NON CURRENT LIABILITIES 100
Liabilities against assets subject to
finance lease 0 146.9327 285.791 546.1221 762.9798 100
Deferred Liabilities 29.67091 65.04591 96.28082 94.80581 94.35947 100
CURRENT
LIABILITIES 100
Trade and other
payable 83.42893 76.06013 104.1859 86.59669 106.7407 100
Short term bank finances-secured 0 315.5751 1089.193 1521.665 1078.238 100
Current portion of lease liabilities 312.6761 298.7532 511.6346 614.7002 607.1488 100
Interest / markup on short term bank
finances 5945176 100
Provision for taxation 37.64982 55.33764 52.61793 48.08809 51.99817 100
dividend 18.22472 18.44461 94.10717 100
Total 47.96072 85.32074 200.0177 245.9525 226.2396 100
CONTINGENCIES AND
COMMITMENTS 184.1495 100
Total Liabilities and Equities 47.60145 64.13287 128.1817 118.3727 100

HORIZONTAL ANALYSES (2008-2003) In Percentage


terms
INCOME
STATEMENT
2008 2007 2006 2005 2004 2003
Sales - net 27.26 90.41 137.79 90.38 119.23 100
Cost of goods sold 23.98 94.61 143.63 89.15 119.41 100
Gross profit 58.87 48.38 80.64 102.41 116.93 100
Operating expenses 100
Administrative and
general 36.95 84.76 114.99 78.54 104.09 100
Selling and
distribution 69.38 150.35 206.11 174.19 169.83 100
Loss from discontinued
operations 300825659 72349185 100
Operating (loss) 908.47 372.59 120.46 81.06 68.5 100
Finance cost 1.85 196.57 424.58 170.85 105.43 100
Other income 38.917 76.35 55.49 231.9 73.88 100
Other charges 50,000 100
Donation to Earthquake relief
fund 12432869 100
(Loss) / Profit before
tax 81.23 8.73 1.4 217.06 70.71 100
Taxation 100
-
current 37.19 55.33 52.61 48.085 51.99 100
- prior 0 0 0 0 7.92 100
- Deffered 0 36.5 0 0 19.16 100
(Loss)/Profit for the year after 82.05 8.24 7.28 202.6 65.01 100

39
tax

VI. Ratio Analysis

2008 2007 2006 2005 2004 2003


Liquidity
Ratios
Current
Ratio 2.584 2.661 1.922 1.762 2.043 2.083
Quick Ratio 1.171 1.145 0.7584 0.603 0.745 1.946
Cashflow
Ratio 1.945 1.179 0.320 0.170 (0.553) 0.786
Average
collection
period 46.49 55.033 64.225 83.335 66.368 61.125
Average
inventory per
day 298.86 144.72 171.50 338.228 260.125 152.855
Average
payable in
days 169.488 39.197 35.37 47.35 43.574 48.76

Turnovers
Recievable 3.187 3.51 3.95 2.82 3.909 3.32
Inventory 0.839 1.25 1.27 0.695 1.09 0.916
Payable 1.479 4.98 7.288 4.769 5.70 4.775
Fixed Asset 4.705 2.246 2.322 1.637 3.324 4.24
Total Asset 0.206 0.506 0.269 0.253 0.362 0.359
Leverage
Debt Ratio 0.116 0.1698 0.1269 0.224 0.235 0.133
Long term 0.0232 0.050 0.027 0.052 0.066 0.041
debt to

40
Capital
Debt to
equity 0.131 0.2036 0.145 0.289 0.307 0.1526
Profitability
Ratios
CashFlow
Margin 0.732 0.258 0.051 0.028 (0.394) 0.0489
Gross profit
margin (0..242) 0.0108 0.053 0.1043 0.090 0.0636
Operating
margin (o.381) (0.0656) (0.026) 0.0198 0.0127 0.0256
Net Profit
Margin (0.535) (0.01622) (0.00868) 0.3986 0.0969 0.17786
ROA (0.11) 0.008 0.047 0.1009 0.035 0.046
Roe 12.45 0.99 5.86 13.01 4.58 5.36
EPS (4.22) 0.42 5.90 13.88 4.45 3.43
P/E (33.56) 195.24 13.03 5.12 19.33 18.66
Dividend
Yield 0.71 1.22 1.30 1.41 2.91 11.72

VII. Analysis of Financial Statements


Income Statement

41
During 2008, the company achieved sales of Rs. 689.84 million (inclusive of
sales from 'discontinued operations' of Rs. 323.88 million) against the sales of
Rs. 1,629.60 million for the previous year. After taking into account the loss
from the closed down operations of Rs. 300.83 million (2007: Rs. 72.35
Million), the operating loss of the company stood at Rs. 271.64 million as
against Rs. 111.41 million for last year. The loss before taxation is Rs. 187.04
million as compared to profit of Rs. 20.11 million of the similar period last
year.

DLL Group's turnover for the year was Rs. 689.84 million (inclusive of
turnover from 'discontinued operations' of Rs. 323.88 million) as against the
turnover of Rs. 1,629.60 million of the previous year. The operating loss of the
company stood at Rs. 271.70 million as against loss of Rs. 111.41 million.
With the share of profit from associate of Rs. 1,873.60 million (2007: Rs.
223.46 million) the profit before tax was Rs. 1,646.24 million as against profit
of Rs. 136.22 million. Earnings per share of the Group were Rs. 31.36 as
compared to Rs. 1.81 per share of the similar period last year.

• Analysis of basic elements of income statement


NET SALES
Sales and Growth ( Both real & nominal)

During 2008, the company achieved sales of Rs. 689.84 million (inclusive
of sales from 'discontinued operations' of Rs. 323.88 million) against the
sales of Rs. 1,629.60 million for the previous year OF 2008.

42
2000

1500

1000
Sales Growth

500

0
2008 2007 2006 2005 2004 2003

The sales of the company as we can conclude from the horizontal and
vertical analyses show a very fluctuating trend. From the FY 2003 the
sales increased upto 119.23% in 2004 and declined to 90.38% in FY2005,
however in 2005 it consists of computation of 9 months due to the change
in Accounting year. In 2006 ithe sales reached upto 137.79% and den
took a drastic decline to 27.26%. This declined is explained by the
discontinued operation of the company. The textile operations and the
polyester staple fiber operations at Landhi were closed down during the
year 2006-07, the operations at Burewala had to be closed down in March
2008, so this explains the drastic fluctuation in the net sales.

2008 2007 2006 2005 2004 2003


Sales - net 27.26 90.41 137.79 90.38 119.23 100

43
.
We can see from the above graph of 2006 that 70% of the sales value was
dues to the yarn. And the Below chart of 2004 shows that cotton yarn
consisted around 80% of the total yarn value in the sales value.

44
The sales also have a direct impact n the company's Gross profit margin
which declined to a negative 24.2%. In FY 2003 the gross profit margin
was 6.36% which increased to 9% in FY2004. In 2005 due to the change
in accounting policy the GPM was estimated to 10%, it takes into account
only nine months data. In 2006 The GPM Declined to 5.3% and further it
declined to 1.08% in FY2007 due to the discontinued operation and in
2008 it reached to negative 24.2%. The sales had a direct impact on the
Gross Profit Margin of the company. The gross profit of the company
declined to 58.88% at the year end 2008.

The operating margin of the company is the lowest in 2008 .i.e. 38.1%. As
well as the Net profit margin. The behavior of continuous decline explains
that the companies discontinued operations were a part of major sales and
growth of the company.

The Company's profitability during the year was significantly impacted by


the inflationary pressures, power tariff hike and by the need to rationalize
old inventories in 2006.

The company hence must increase its sales of the continuing operations
so as to secure its previous profitable position

45
COST OF GOODS SOLD
the cost of goods sold of the company throughout 2003 to 2007 remained
around 90% of the sales, however in 2008, it was 79.9% of the sales. This
can again be justified by the affect of discontinued operations. As
compared to 2003 the cost of goods sold declined to 23.98%. The textile
operations and the polyester staple fiber operations at Landhi were closed
down during the year 2006-07, the operations at Burewala had to be
closed down in March 2008. This explains the lower cost of goods sold in
the year 2008. The main components influencing the decreasing Cost of
Goods sold are stocks and spared in part, which has declined to 59.16%
and 44.14% since the year 2003.

Also the company Average inventory per day increased to 298.86 as


compared to 152.855 in 2003. Which can be explained by the increasing
cost of goods sold as compared to the change in the increase in the
inventory.

OTHER OPERATING REVENUE


The income from other sources has been fluctuating through out the 6
years which increased to 231.9% in the year 2004 and declined 55.48% in
2005 then reached to 76.35% and eventually fell to 38.45% in the year
2008. It comprises of 23.39% of the sales and is an important reason of
the income to not falls as much as it could have due to the discontinued
operations.

OPERATING EXPENSES
The operating expenses of the company reached to a12.36% of the sales
in 2008, which can be referred to as the highest the company reached in
the last six years. As compared to the company initial year 2003 the
operating expense only comprised of 6.99% of the companies sales which
gradually incread throughout the years and reached to 10%.

46
This has impact on the operating loss or gain of the company. In 2008 the
Operating profit margin is (38.1%) as compared to the operating profit of
2003 which is 2.56% which is the highest the company achieved in this six
year. The operating expenses had a major impact on reducing the
operating profit margin through out the year.

OTHER EXPENSES
Other charges is minor as in the year 2006 which also includes donation to
the earthquake relief fund. Other charges are only 0.0026% and the
donation comprises of 0.66% of the total sales in the year 2006.

Analysis of special income statement item


• Discontinued operations in 2008 and 2007 are the major
reasons of a loss in the profits of the company. The textile operations
and the polyester staple fiber operations at Landhi were closed down
during the year 2006-07, the operations at Burewala had to be closed
down in March 2008, so this explains the drastic fluctuation in the net
sales.

• The figures for the past three years (2001-2003) represent the
period when the Merger had not taken place

• In May 2004, the Company name was changed ' Dawood


Lawrencepur Limited' to so as to take advantage of the goodwill
associated with the name of Lawrencepur. This report being the first
annual report of the merged entity, demonstrates the commitment to be
better prepared in the post WTO scenario.
• Of previous year 2005 are of nine months because of the
change in accounting year from September to June.
• The sale of the disposal held for sale in the year 2007 and 2008.

PROFITABLITY

47
The Company's profitability during the year was significantly impacted by the
inflationary pressures, power tariff hike and by the need to rationalize old
inventories in 2006.

The figures for the past three years (2001-2003) represent the period when
the Merger had not taken place and those of previous year 2005 are of nine
months because of the change in accounting year from September to June.

0.8

0.6

0.4

CashFlow
0.2 Margin
Gross profit
margin
Operating
0 margin
2008 2007 2006 2005 2004 2003 Net Profit Margin

-0.2

-0.4

-0.6

The Companies Profitability margins can be assessed from the graph above.
In the year 2003 that is the initial year the companies margins were all
positive, with the net profit margin as 11.8% however in the year 2005
Dawood Lawrencepurs NPM increased to 39.9%, this is due to the merger as
well as due to the change is accounting period. The Net profit margin declined
to a negative 28.5% in the year 2008 due to abandonment of the companies
few operations. The Major reasons for the decline in the Net profit are
mentioned above.

48
The Company Cashflow margin peaked to 73.2% in the last 6 years. In 2004
the company's cash flow margin declined to a negative 39.4% due to the
substantial selling of the shares.

The operating margin of dawood Lawrencepur remained weak through out the
six years of the analyses. The margin reached its negative value in 2008 to
38.1% . The operating margin remained positive for the first 3 initial years.
Which lead to the conclusion that the discontinued operations had a major
impact on the operating profit margin of the company, the operating loss
reached to 908% in 2008 and 372% in 2007 as compared to a positive
operating margin of the year 2003. The discontinued operations were the
major reason. The company needs to utilize its current operations to a
maximum.

The sales also have a direct impact n the company's Gross profit margin
which declined to a negative 24.2%. In FY 2003 the gross profit margin was
6.36% which increased to 9% in FY2004. In 2005 due to the change in
accounting policy the GPM was estimated to 10%, it takes into account only
nine months data. In 2006 The GPM Declined to 5.3% and further it declined
to 1.08% in FY2007 due to the discontinued operation and in 2008 it reached
to negative 24.2%. The sales had a direct impact on the Gross Profit Margin
of the company. The gross profit of the company declined to 58.88% at the
year end 2008.

49
14
12
10
8
6 ROA
4 Roe
2
0
-2
2008 2007 2006 2005 2004 2003

The Chart above shows that the company ROA is weak throughout the years
of our analyses and goes negative in the year 2008 of 11%. The Net income
over the total assets ratio. Which indicates that the companies net income is
not increase in pace with the increase in the total asset. Dawood Lawrencepur
needs to increase in total income. However from the analyses done, the
company's nets income suffered a major decline due to the discontinued
operations. The net income increased to 202% in the year 2005 and then
declined to 7.28% in 2006 and eventually declined to 82.05% in the year
2008. This again shows the impact of discontinued operations.

50
16
14
12
10
8
6
EPS
4
2
0
-2 2008 2007 2006 2005 2004 2003
-4
-6

The Chart above shows the EPS which confides with the earning patterns of
the company analyzed throughout. EPS in the year 2005 reached its peak
to13.88% however after that (due to the discontinued operations and the
inflationary pressure, the merger that took place) the EPS of the company
declined drastically to 5.96% in 2006 and further to a negative (4.22%) in the
year 2008. The company needs to concentrate on improving its earnings.

200
100
0 P/E

-100 P/E
2008 2007 2006 2005 2004 2003

Dawood Lawrencepur P/E shows a stable and a positive pace throughout the
6 years of analyses and peaked in the year 2007 to 195.24% and then went
negative in the year 2008 that is -33.56%. This is due to a good market share
of the company. The EPS since showed no improvements eventually the
market share of the company also declined. The earning made the investors

51
loose faith in their investment due to the declining trend of the company's
EPS.

Dividend
Yield % 0.71 1.22 1.30 1.41 2.91 11.72

12

10

6
Dividend Yield
4

0
2008 2007 2006 2005 2004 2003

The company had a dividend yield of 11.72% and then it declined


substantially in 2004 to 2.91% in 2004 and kept declining to 0.71 % in the
year 2008. This is due to the DPS given and declining EPS.

Balance Sheet
• Analysis and insight on Assets
The companies Assets as we can see from the below graph were the
Highest in the year 2006. The assets in 2003 were 3762 million which
increased gradually till the year 2006, But after discontinuing certain
operation in the year 2007 and 2008 the company assets declined
drastically to 1791 million. Also the increased trend in the assets from
2004 can be explained by the company merger which resulted in the
increased assets. We can see from the analytical analyses that the
company's non current assets have been more as compared to the current
assets of the company. However in 2008 the major part of the asset of the
company were the assets of disposal held for sale .i.e. 42.34%. In 2007

52
the Non current assets ratio reached 50.23% of the total assets of the
company.

7000
6000
5000
4000
3000 Assets

2000
1000
0
2008 2007 2006 2005 2004 2003

From the Horizontal analysis of the company, the company's assets have
increased at a substantial rate till 2006 and then declined from there onwards
to 47.60% in the year 2008. The assets increased to 184.89% in the year
2006.

In the NON CURRENT ASSETS, the operating assets reached to 249.597%


as compared to 2003. And the long term deposit were 222.34% No long term
loan and advances were taken in the year 2007, 2009 and 2006. IN 2008 long
term deposits were reached upto169.04%. Intangible assets were acquired by
the company in 2007 and 2008. As compared to the increasing long term
investments in the previous year, in 2008 and 2007 its acquisition declined to
22 and 29%.

In CURRENT ASSETS, it shows a declining trend from 2004 which increased


to 136.322% in 2004, after the merger the rate declined to 127% in 2005,
113% in 2006, and then 66% and 36% in the year 2007 and 2008. IN the first
3 initial years the current assets composed around 30% part of the total asset,
in 2006 the currents assets were only 19.6% of the total assets which

53
increased in 2007 to 33.34% and in 2008 declined to the rate of 24.579 of the
total assets.

The stocks and spares held a major portion of the current assets throughout
the 6 years amounting to 13.94% of the current assets in the year 2008. The
second major portion of the current assets is the trade debtors. The dash and
bank balances show a decreasing trend from 39.29559% in 2004 gradually
decreasing to 13.24% in 2006 and increasing to 23.85% in the year 2008.

• Analysis and insight on Liabilities and Shareholder’s Equity

The companies Liabilities and stockholders Equity has the same trend to that
of the assets of the company. From the Vertical and common size analyses
of the company it is noted that the company contains more then 70% of the
liabilities in the total liabilities and the stock holders equity sections of the
company. The Major portion of stockholders Equity is the fair value reserve on
the investment amounting to 60.23% of the total liabilities and SHE in the year
2006. In 2008 and 2007 there was no fair value of reserve on the investment..

In the total Liabilities section the company's current liability has heavy weight
as to the weight of the non current liabilities. Shows a bell shape pattern
referring to 13.244% of the total liabilities and stockholders equity in 2003,
increasing to 22.43% in the year 2005 and then declining substantially to
11.61 percent of the total liabilities and the stock holder's equity. The total
liabilities increased to 226.65% in 2004, declined to 2005 in 2006 and
eventually reached to 47% liabilities as in the year 2008 as compared to the
year 2003. The Major portion that is the trade and other payable in 2006 was
the highest 108.56% and then declined to 83.428% in the year 2008.

54
7000
6000
5000
4000 Liabilties and
3000 stockholders
Equity
2000
1000
0
2008 2006 2004

LIQUIDITY
The trend of the Dawood Lawrencepurs current and Quick ratio shows a
fluctuating or a cyclical type pattern. The company at the year end shows
that its liquidity position has increased as compared to the 1.802 and
0.508 of current and quick ratio of the year 2001 to 2.584 and 1.171 in the
year 2008. In the year 2005 and 2004 the company's liquidity position
went down to 1.762 in 2005 and following the pattern in 2006. This is due
to the change in the accounting period in the year 2005 and due to the
merger of the company. This low ratio can be understood by analyzing the
current assets and current liabilities position. The current assets during the
year 2006, 2004 and 2005 amounted to 19.36%, 39.89% and 36.99% of
the total assets whereas the current liabilities amounted to 12.69% in
2006, 22.43% and 23.47% in the year 2005 and 2004. The Company's
profitability during the year was significantly impacted by the inflationary
pressures, power tariff hike and by the need to rationalize old inventories
in 2006. The quick ratio for is showing a weak trend, it means that the
company is holding large amount of inventory and not utilizing it efficiently
to pay off its current liabilities.

55
3
2.5
2
1.5
1 Current ratio
0.5 Quick Ratio

0
2008
2007

Current ratio
2006
2005

2004

2003

2002

2001

350

300

250

200
Average collection period
Average inventory per day
150
Average payable in days
100

50

0
2008 2007 2006 2005 2004 2003

From the above chart, it can be analyzed that the companies Average
collection period has maintained a steady pace fluctuating now and then.
The company is collecting its receivables in 61.25 days in the year 2003,
which increased to 83.335% in the year 2005 and thereon declined to
46.49% in the year 2008. The receivables declined to 20.38% in this year
due to the reduced sales in the year of 27.26% which showed progress in
collecting the receivables.

56
The company's inventory per day shows a progressive impact as the
companies cost of goods sold is increasing steadily with the increase or
more to the increase in the inventory made per day which in 2003 was
152.23% and reached to 338% in the year 2005 and declined over the
next 3 years but reached 298.86% in the year 2008. The stores and
spares were the major portion of out inventory which reached to 55% and
44.81% in the year 2008.

The company is making its payable slow throughout the year in 40-50
days but in the year 2008 the payable per day increased to 169.488%

TURNOVERS

8
7
6
5
Recievable
4
Inventory
3
Payable
2
1
0
2008 2007 2006 2005 2004 2003

Dawood Lawrencepur receivable turnover shows a fluctuating rate


throughout the six year. In 2003 the company is collecting 3.32 receivables
times in a year which is increasing every alternate year and reaches 3.187
times in the year 2008. The turnover is however weak which we have
discussed above.

The firm inventory turnover is less. The firm has an efficiency of selling
0.916 times inventory in the year 2003, which remains stable through out
the coming year. The Cogs of the inventory are less as compared to the
sales made.

57
The firms payable turn over shows sensitivity over the years. It reaches
7.288 times in the year 2006 and declines to 1.479 times in 2008.

5
4.5
4
3.5
3
2.5 Fixed Asset
2 Total Asset
1.5
1
0.5
0
2008 2007 2006 2005 2004 2003

The fixed assets as noted above had a more then 75% ratio in the totals
assets, hence the fixed asset turnover is much higher and covers up to 4.7
times of the sales in the year 2008 The company needs to reduce its fixed
assets.

The total asset turnover is less. In the year 2007 it reached 0.506 times
the sales. The firm is utilizing less resources, this is due to the result of
three major things; mergers, change in the accounting period,
discontinuing operations.

Cash Flow Statement


Dawood Lawrencepur only generated positive cash flow in two years in the
last six year. As we can see from the table given below, it shows the cash
flow generated in the year 2003 and the year 2008 amounted to 217 and
62 million. The cash suffered a drastic decline in 2004 amounting to a
negative 359 million and then in 2005 it peaked to 594 million. In the yea

58
2004, the company suffered loss in its cash flows due to the merger with
the other company. Also in 2005 due to the change in accounting period.
In 2006, due to the inflationary pressures the company suffered losses and
the cash generated was recovered in the year 2007 and 2008 as the
company discontinued some of its operations which generated cash of
about 62 million rupees.

2003

2004

2005
Net cash flow
2006

2007

2008

-800 -600 -400 -200 0 200 400

On the further analyses of the cash flow statement, the companies cash
generated from the financing actives are negative through out. The
dividend is paid less in the year 2008 and 2007 where as the finance lease
payment increased as compared to the preceding years.
The cash generated from investing activities is the only source which gave
positive cash flows in all years except in the year 2005. Purchasing of
shares and fixed capital expenditure was the major reason for the negative
generation of cash from the investing activities in the year 2005. In 2004
the sale of shares for the merger resulted in generating huge cash flows
for the company. Where in the year 2008 and 2007 the most cash is
generated for operation as a result of the sales of disposals and
discontinued operations which brought positive cash flows for the

59
company.

300

200

100

-100 Casg flow


from
-200 operations

-300 Cash from


Investing
-400

-500
Cashflow
from
-600 Financing

-700
2008 2007 2006 2005 2004 2003

Analysis of Statement of Changes in Equity


In the year 2008 the statement of equity has changed to 1528 million rupees.
The portions considered here include the mergers, the capital reserve the
share right etc. from 6049 million in the year 2006. The capital reserves were
the major portion of the change (Mergers and disposition) accounting for the
most part of the changes. The changes resulted in 3204 million rupees in the
year 2004.

60
VIII. Analysis of Capital Structure of The firm
The Graph above shows the capital structure of the firm, which shows that
throughout the six years the firm's capital structure consists of 75 – 89% of the
contribution to it by the equity sector and the rest percentage is financed by
the current and noncurrent liabilities of the firm. The contribution by the
liabilities reached 22% in 2005 which was the highest in the considered
analyses. The amount relates to the 9 month data due to the chance in the
accounting period.

120

100
80
Equity
60
Liabilities
40

20
0
2008 2007 2006 2005 2004 2003

We can see from the graph below that in the year 2005 and 2004 12.69%
and22.4% of the total assets are being financed by the debts of the company.
The total debt of the company increases to 245% and 226% as to change
from 2003. Where as the Liability . The firm's total liabilities and equities
decreased to 47.60% in the year 2008, after peaking to 184% in the year
2006.

61
0.25

0.2

0.15
Debt Ratio
0.1

0.05

0
2008 2007 2006 2005 2004 2003

0.07
0.06
0.05
0.04
Long term debt to
0.03 Capital
0.02
0.01
0
2008 2007 2006 2005 2004 2003

The graph above is the analyses of the company's long-term debt to


capitalization ratio which shows that the long term debt is the major part of
financing the business. Which reaches to 6.6% in the year 2004 due to the
merger of the firm. The deferred liabilities are the major portion of the long
term debt in the permanent financing of the debt. Although the ratio
throughout is less the major portion of financing is done by the current
liabilities amounting to 9.6% in the 2008. But the major financing of the

62
business is through equity hence the company's liabilities i.e. current and non
current ratios are less.

The graph below shows the capital structure of the firm. The ratio increased to
30.7% in the year 2004 and declined gradually to 13.1% in the year 2008, as
the result of discontinued operations and mergers.

0.35
0.3
0.25
0.2
0.15 Debt to equity

0.1
0.05
0
2008 2007 2006 2005 2004 2003

IX. Analysis of Bad Debt method used by the


company
Trade debts are carried at original invoice amount less provision for
impairment. Known bad debts are written off, while provisions are made
against debts considered doubtful based on review of outstanding amount at
the end of the year.

63
X. POSITION OF DAWOOD COMPARED WITH THE
INDUSTRIAL AVERAGE

PROFITABILITY
The gross profit margin is less as compared to the industrial average only in
the year 2004 does the companies gross profit margin reaches close to the
industrial average. The operating profit margin of the company is minimum as
compared to the industry. Not in 8 years does it reach close to the industry.
The Net profit margin of the company although shows an upward trend
through out the eight years of analyses. The return on equity shows an above
average rate of growth specifically in the year 2008 to 12.46%. The return on
assets has remained negative through out the years as compared to the
industry. The cash flow margin has also shown an upward trend mainly due to
the sale of discontinued operations. The EPS of the company has also shown
a below average trend as compared to the industry.

LIQUIDITY
The above chart shows that Dawood Lawrencepur is not competing very well
to the industrial average of the textile sector. The current ratio shows a below
average trend constantly throughout the 8 years of analyses. However the
company's quick ratio shows an upward trend as compared to the industry.
The cash flow liquidity ratio is also showing a downward trend as compared to
the industrial average of the textile sector.

64
3
2.5
2
1.5 INDUSTRY AVERAGE
1 DAWOOD

0.5
0
2008 2007 2006 2005 2004 2003 2002

The average collection period of the company is greater which means its
collecting its receivables in much more delaying period as compared to the
industrial average of the companies. The payables of the company are made
in more then hundred days which mean that the company is slow is collecting
as well as making payments as compared to the industrial average.

EFFICIENCY
The receivable turnover is below the industrial average of relievable
turnovers, much below, which means mean that the company is collecting its
receivable fewer times in a year as compared to the industry. The company's
inventory turnover also shows a below-average trend. The payable turnover of
the company is also below average although the companies fixed asset
turnover shows an above average trend. The total asset turnover also shows
a below average trend.

SOLVENCY
The company's solvency position is below average to the industrial computed
rates which shows that the company's debt financing is less and much
dependence is on the equity financing as compared to the industrial average

INVESTORS ANALYSES
Dawood lawrencepur's Earning per share has remained positive through out
the year but less then the industrial average, this is the result of the losses the
company suffered in the few years of analyses, the change in accounting
policy, closing down of some operations and discontinued operations, but the
company offers good perspective in the future.

65
XI. Analysis of Depreciation method used by the
company
The Company reviews appropriateness of the rate of depreciation on plant
and equipment, useful life and residual value used in the calculation of
depreciation. Further where applicable, an estimate of recoverable amount of
assets is made for possible impairment on an annual basis.

Depreciation is provided on a diminishing balance method at the rate


mentioned in the relevant note except for lease hold land which is amortized
on straight line method. Depreciation is charged from the date the asset is put
into operation and discontinued from the date the asset is retired.

Depreciation of leased assets is charged to income. The related obligations of


leased assets are accounted for as liabilities.

XII. Analysis of cost flow assumption employed


by the company
• Stores, spares and loose tools are valued at average cost
except for items in transit which are stated at cost incurred upto the
balance sheet date. For items which are slow moving and /or identified
as surplus to the Company's requirements, adequate provision is made

66
for any excess book value over estimated realizable value. The
Company reviews the carrying amount of stores and spares on a
regular basis and provision is made for obsolescence.
• Stock in trade is valued at the lower of cost and net realizable
value Cost incurred in bringing each product to its present location and
condition are accounted for as follows.
(a) Items in transit/bond are valued at cost comprising invoice values
plus other charges incurred thereon upto the balance sheet date.
(b)Net realizable value signifies the estimated selling price in the
ordinary course of business less cost necessary to be incurred to make
the sale
(c)Trading goods are accounted for on cost which is the invoice value
plus other expenses incurred to bring them to the point of sale.
• Plant and equipment: The costs of replacing part of an
item of property, plant and equipment is recognized in the
carrying amount of the item if it is probable that the future
economic benefits embodied within the part will flow to the
company and its cost can be measured reliably. The carrying
amount of the replaced part is derecognized. The costs of the
day to day servicing of property, plant and equipment are
recognized in profit or loss as they are incurred.

XIII. Policy Analysis


During the year 2008, with the acquisition of 100% share holding in TGL, DLL
became a holding company of TGL. In line with paragraph 35 of IAS 28, in the
separate financial statements of the Holding Company, the investments in
associates where significant influence exist are required to be measured
under cost or fair value as envisaged in IAS 27. Previously the investments in
associates where significant influence exist were measured under equity
method of accounting as required under IAS 28. Accordingly, the company

67
has decided to re-measure its investment in associate at Cost. This change
has been applied retrospectively.

Had this policy been not changed the investments in associate


would be higher by Rs. 3,125.59 million and reserves would be
higher by the same amount.

XIV. Insight and Recommendation for Investors


& Creditors
• In order to improve liquidity position, company has to utilize its
inventories to an optimum level to reduce its holding cost.

• Company needs to improve its asset utilization to improve its liquidity


position to pay off their current liabilities.

• Dawood lawrencepur should increase current assets to improve its


liquidity position because it acts as a guarantee to the creditors for
meeting its current liabilities.

• The company should try to reduce its equity and go for debt finance
because with high equity comes high losses and that is one reason the
company is suffering from losses

• Dawood Lawrencepur should either reduce its expenses, but also to


increase its sales so as to cover from the losses suffered from the
discontinued operations as that are one reason they are increasing
their debt and seem incapable to bear the rising inflation.

• They should negotiate with government regulatory authorities to


remove price freeze

68
• They should come up with finance mix that shifts towards debt
financing

• Company’s sales are decreasing and so are the average collection


period is not improving with this decrease, company should employ
more efficient people who can get these receivables back on time, but
mostly it should increase its sales.

• In 2008, company’s selling and distribution expenses have decreased


to 36.95 and 69.38% at the same time sales decreased to 27.26%.

• Looking at the profitability ratios we can say that company is getting


itself into serious problems. Main issues are the discontinued
operations which have dented the company’s profits. This can damage
the confidence of the investors and also puts a question mark on
company’s management abilities. To attract more investors the
management should think of strategic solutions to bring its costs down
and manage its operations well because with improvements in profits
the company will be able to get improvements in its market price
because profitability is one the major aspect on which investors keep a
close look because it also reflects the ability of company’s
management.

• To improve sales growth management will have to come up with some


strategic solutions to increase the sales growth to attract more
investors for the company and to have attractive gross and net profits
in the coming years.

• From management point of view profitability is also a major aspect


because higher profitability will eventually help the managers in getting
more benefits and higher salaries. Top management must also think of
downsizing to bring its administrative costs down to an acceptable
level.

• Agency costs must also be taken care of so that management should


work in best interest for the company rather than looking for their own
personal benefits. The solutions for this can be to give executive stock
options to the management which will motivate them to work for
company’s own benefits which will benefit the management as well.

• The earnings per share have declined sharply because of low


earnings. This is reducing the attractiveness for investors in Dawood

69
Lawrencepur LTD.. So, earnings per share should be improved by
focusing on the earnings growth.

• After analyzing the market ratios for Dawood lawrencepur, we observe


that the major market value indicators have been declining. This is
because the earnings are declining. So, there is a major problem with
earnings which should be improved and the Sales which should
increase.

• In view of the escalating gas and oil prices, we need to employ


alternative sources of energy. We are actively pursuing this option.

XV. Forecast & Future Outlook


With a very difficult year behind the company, the management has recently
taken the necessary steps to bring about material improvement in the
company's operations. The increased focus on line efficiencies improvement
and product rationalization, should lead to improved results in future.

Having understood the issues that the nation faces, the Dawood Lawrencepur
conceptualized on what role a traditionally textile driven company can play in
the energy sector. The more Dawood lawrencepur studied the clearer it
became that exploring opportunities in the renewable energy sector was
indeed not only possible but desirable. Therefore DAWOOD LAWRENCEPUR
focused on wind power, a global competitive and commercially viable solution
to generate power within everyone's reach.

XVI. Conclusion

The cotton textiles operations having become unsustainable on account of the


continuing losses and to arrest the decline in shareholders value, your

70
company has taken steps over the last 18 months to close down these
operations in stages. Whereas the textile operations and the polyester staple
fiber operations at Landhi were closed down during the year 2006-07, the
operations at Burewala had to be closed down in March 2008. Accordingly, all
closed down operations are classified under 'discontinued operations', as
required under the International Financial Reporting Standard (IFRS) 5 – “Non
Current Assets held for sale and Discontinued Operations'.
Due to this the companies sales will increase as the discontinued operations
was the major reason of the difficult year the company faced. The inflationary
pressures was also one of the reason for the losses the company suffered

Having understood the issues that the nation faces, at Dawood Lawrencepur
management conceptualized on what role a traditionally textile driven
company can play in the energy sector. The more we studied the clearer it
became that exploring opportunities in the renewable energy sector was
indeed not only possible but desirable. We therefore focused on wind power,
a global competitive and commercially viable solution to generate
power within everyone's reaches.

71
REFERENCES
The Annual statements of the Dawood Lawrencepur Ltd.
http://www.dawoodlawrencepur.com/dll%20report%202008.pdf
http://www.dawoodlawrencepur.com/Annual_2006_DLL.pdf
http://www.dawoodlawrencepur.com/Annual%20Report%202004%20DLL.pdf
http://www.dawoodlawrencepur.com/
http://www.equitymaster.com/detail.asp?date=3/31/2006&story=1
http://docs.google.com/viewer?a=v&q=cache:7fWq-
78polEJ:prr.hec.gov.pk/Chapters/187-
2.pdf+demand+and+supply+textile+industry&hl=en&gl=pk&sig=AHIEtbS2wtY
vtnIgcNQ-oebVa8eKHIcXbw

72