| GULISTAN TEXTILE MILLS LIMITED |
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| 29th
Annual Report 1995 |
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| CONTENTS |
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| Board of Directors |
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| Notice of Meeting |
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| Directors'
Report |
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| Auditors'
Report |
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| Balance Sheet |
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| Profit & Loss Account |
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| Cash Flow Statement |
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| Notes
to the accounts |
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| Schedule
of Fixed Assets |
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| Pattern
of Share holding |
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| Form of
Proxy |
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| BOARD OF DIRECTORS |
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| GULISTAN
TEXTILE MILLS LIMITED |
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| CHIEF EXECUTIVE |
|
Abdul Shakoor |
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| DIRECTORS |
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Naseer Ahmed |
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|
Tanveer Ahmed |
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|
Mohammad Abdullah |
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|
Mohammad Younus |
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|
Riaz Ahmed |
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N.R. Siddiqui |
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| SECRETARY |
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Zamir Q. Siddiqui |
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| AUDITORS |
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Hameed Chaudhri & Co. |
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Chartered Accountants |
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| MANAGEMENT |
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M. Yousuf Adil & Co. |
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| CONSULTANTS |
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Chartered Accountants |
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| TAX Consultants |
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Mushtaq & Co. |
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Chartered Accountants |
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| BANKERS |
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United Bank Limited |
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| REGISTERED OFFICE |
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2nd Floor, Finlay House, |
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1. 1. Chundrigar Road, |
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Karachi. |
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| MILLS AT |
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Unit I |
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Samasatta |
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Unit II & III |
Tibba Sultanpur |
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Unit IV |
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Feroz Watwan |
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| 3 |
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| NOTICE
OF THE ANNUAL GENERAL MEETING |
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| NOTICE
IS HEREBY GIVEN THAT THE 29TH ANNUAL GENERAL MEETING OF THE SHARE |
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| HOLDERS
OF GULISTAN TEXTILE MILLS LIMITED WILL BE HELD ON 2nd May, 1996 at |
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| 11.00
A.M. AT FINLAY HOUSE. 1.1. CHUNDRIGAR ROAD, KARACHI TO TRANSACT THE |
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| FOLLOWING BUSINESS: |
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| (1)
to confirm the minutes of the preceding meeting of the share holders of the
Company. |
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| (2) to receive and adopt the audited accounts
and balance sheet for the year ended |
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| 30.9.1995
alongwith the Directors and Auditors Report thereon. |
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| (3)
to appoint the Auditors of the Company for the year ending 30.9.1996 and to
fix their |
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| remuneration.
The present auditors of the Company M/s. Hameed Choudhri & |
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| Company,
Chartered Accountants, being eligible for appointment offered themselves |
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| for reappointment. |
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| (4) Any
other matter with the permission of the Chairman. |
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By order of the Board |
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Company Secretary |
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| Karachi |
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| Dated:
11th April, 1996 |
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| NOTES: |
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| 1
) The share transfer book of the Company will remain closed from 1st May, to
5th May, |
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| 1996
(both days inclusive). |
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| 2)
Proxies in order to be effective must be received in the Company at the
Registered |
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| Office
not less than 48 hours before the time for holding the meeting. |
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| 4 |
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DIRECTORS' REPORT TO THE |
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|
SHARE HOLDERS |
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| Dear Share-holders, |
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| Assalam-o-Alaikum. |
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| It
is a matter of pleasure to welcome you on 29th Annual General Meeting of the
Company and to report |
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| the
performance of the Company alongwith Auditors Report thereon for the year
ended 30.9.1995. During |
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| the
year under review sales revenue of the Company amounted to Rs. 1,752,642,091
recording an |
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| increase
of about 31 %. |
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| It
is really disappointing that inspite of increased sales the profitability has
unfortunately decreased. The |
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| main
cause of low profitability is the failure of cotton crop, its price hike in
domestic and international |
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| markets,
coupled with increase in fuel tariff and the increase in production cost
adversely effected the |
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| cost
of production which could not be absorbed in the falling prices of yarn in
the home and foreign |
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| markets.
The vast disparity between the cost and sale prices left no margin for the
local spinners and |
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| hence
inspite of increased turn over the profitability has deteriorated. Still the
company had repaid Rs. |
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| 173.92
millions (Rs. 109.24 millions as principal with Rs. 64.68 millions as
mark-up) towards long |
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| term liabilities. |
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| The
Directors recommend to make the following appropriation of accounts: |
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RUPEES |
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| 1.Profit
for the year before taxation |
15,851,250 |
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| 2.Provision
for taxation (Prior Years) |
1,367,838 |
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| 3.Profit
after taxation |
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15,714,462 |
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| 4.Unappropriated
Profit brought forward |
64,862,271 |
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| 5.Unappropriated
Profit Retained |
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80,576,733 |
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| Your
Company paid the exchange risk fee to avoid exchange losses as our currency
is fluctuating very |
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| rapidly.
Exchange loss is an allowable capital expenditure hence any expenditure
incurred to avoid this |
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| loss
should also be treated accordingly. Without the exchange booking the loss of
exchange fluctuation |
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| would
have been much more hence we have capitalized exchange risk fee in the
respective assets |
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| accounts
according to our past accounting policy. |
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| DIVIDEND: |
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| In
view of the present circumstances your Directors do not propose payment of
any dividend for the year |
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| under
review as they are of the firm view that only a financially stable company
can assure a promising |
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| future
for its investors. |
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| 5 |
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| FUTURE
OUTLOOK/EXPANSION/DEVELOPMENT: |
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| The
cotton crop size this year is safely expected to meet the demand of local
industry. Since your company |
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| have
purchased the cotton of its requirements and the prices of yarn are also
presently stable therefore, |
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| we
are optimistic of better results in the current year. The Government's
present policy to allow unlimited |
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| export
of cotton need revision. We suggest that only as much cotton be allowed for
export as is realistically |
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| in
excess of the requirements of local industry. |
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| POWER GENERATION: |
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| Your
Directors have the pleasure to announce that your associated Co. Gulistan
Power Generations Ltd. |
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| had
installed power generation sets which are regularly supplying the power to
your Unit No. IV in |
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| Ferozewatwan.
We are no more dependent for this Unit on the supply of power by WAPDA.
Action is being |
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| taken
to ensure that we have our own power supply arrangements for the remaining
units in Samasatta |
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| and Tibba Sultanpur. |
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| BALANCING
MODERNIZATION & REPLACEMENT: |
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| The
Company has established L/C for the import of 14880 spindles from China for
the replacement of |
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| the
old machinery to ensure better production results. We assure you that your
Directors are fully alive |
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| to
equip your Units with the latest technology in the textile world. It is
apparent from our increasing |
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| production and sales. |
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| PRODUCTION CAPACITY: |
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| The
present installed capacity of all the 4 operative Units is 77,336 spindles
and 1696 Rotors. On |
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| achieving
the optimum production on this capacity the production of yarn (converted in
to 20s) during |
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| the
year is 26,278,175 kgs. as against 23,376,369 kgs. in the preceding year an
increase of 12.50% |
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| approximately. |
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| PATTERN
OF SHAREHOLDING: |
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| Statement
showing pattern of shareholding as on 30.9.95 is enclosed to this report. |
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| APPOINTMENT
OF AUDITORS: |
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| The
Auditors of the Company M/s. Hameed Choudhri and Company Chartered
Accountants, retire and re |
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| offer
their services for the year to come being eligible for such appointment. |
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| THANKS: |
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| On
behalf of the Board of Directors profound appreciation and thanks are placed
on record for dedicated |
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| services
rendered by the employees, assistance/cooperation extended by the Banks and
financial |
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| institutions. |
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| Karachi: |
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| I 0th April, 1996. |
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FOR & ON BEHALF OF
THE BOARD |
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|
(ABDUL SHAKOOR) |
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|
CHIEF EXECUTIVE |
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| 6 |
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|
AUDITORS' REPORT TO THE
MEMBERS |
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| We
have audited the annexed ,balance sheet of GULISTAN TEXTILE MILLS LIMITED as
at 30 |
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| September,
1995 and the related profit and loss account and cash flow statement,
together with |
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| the
notes forming part thereof, for the year then ended and we state that we have
obtained all, |
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| the
information and explanations which to the best of our knowledge and belief
were necessary |
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| for
the purposes of our audit and, after due verification thereof, we report
that: |
|
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| (a)
in our opinion, proper books of account have been kept by the company as
required by |
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| the
Companies Ordinance 1984; |
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| (b) in our opinion: |
|
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| (1)
the balance sheet and profit and loss account together with the notes thereon
have |
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| been
drawn up in conformity with the Companies Ordinance, 1984 and are in
agreement |
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| with
the books of account and are further in accordance with accounting policies |
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| consistently applied. |
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|
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| (ii)
the expenditure incurred during the year was for the purpose of Company's
business, |
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| and |
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| (iii)
the business conducted, investments made and expenditure incurred during the
year |
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| were
in accordance with the objects of the Company; |
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| (c)
in our opinion and to the best of our information and according to the
explanations given |
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| to
us, the balance sheet, profit and loss account and the cash flow statement,
together |
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| with
the notes forming part thereof, give the information required by the
Companies |
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| Ordinance,
1984 in the manner so required and except for the fact that Exchange risk Fee |
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| amounting
to Rs. 5,015,505 has been capitalised (notes 15.4 and 16.1) and to the extent |
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| which
this may affect the annexed accounts, respectively give a true and fair view
of the |
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| state
of the Company's affairs as at 30 September, 1995 and the profit and the cash
flows |
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| for
the year then ended, and |
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| (d)
in our opinion, no Zakat was deductible a source under the Zakat and Ushr
Ordinance l 980 |
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|
HAMEED CHAUDHRI & CO. |
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|
Chartered Accountants |
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| Karachi. |
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| 10th April, 1996 |
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| 7 |
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|
BALANCE SHEET |
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NOTE |
1995 |
|
1994 |
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|
RUPEES |
|
RUPEES |
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| SHARE
CAPITAL & RESERVES |
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| SHARE CAPITAL |
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| Authorised |
|
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|
| 15,000,000
Ordinary shares of Rs. 10 each |
|
150,000,000 |
|
150,000,000 |
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|
---------------------- |
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---------------------- |
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| Issued,
subscribed 8t paid up |
|
3 |
126,360,000 |
|
84,240,000 |
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| Right
Shares Subscribed |
|
3.2 |
— |
|
36,573,080 |
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|
|
|
|
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| RESERVES |
|
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|
| Share Premium |
|
3.3 |
379,080,000 |
|
329,157,720 |
|
| General Reserves |
|
4 |
203,921,394 |
|
203,921,394 |
|
| Unappropriated Profit |
|
|
|
80,576,733 |
|
64,862,271 |
|
|
663,578,127 |
|
597,941,385 |
|
|
|
|
|
---------------------- |
|
---------------------- |
|
|
789,938,127 |
|
718,754,465 |
|
|
|
|
|
| REDEEMABLE CAPITAL |
|
5 |
90,901,030 |
|
115,060,120 |
|
| LONG TERM LOANS |
|
6 |
102,398,541 |
|
145,032,394 |
|
| DEBENTURES
& DEFERRED CUSTOM DUTY |
|
— |
|
311,728 |
|
|
|
|
|
| OBLIGATION
UNDER FINANCE LEASES |
|
8 |
61,534,246 |
|
104,714,993 |
|
| DEFERRED LIABILITY |
|
|
|
|
|
| Provision for gratuity |
|
|
|
13,616,631 |
|
11,768,129 |
|
| Custom Duties Payable |
|
6,710,227 |
|
6,710,227 |
|
|
|
|
|
|
| CURRENT LlABILITIES |
|
|
|
|
|
| Short term loans |
|
|
9 |
523,137,686 |
|
426,930,448 |
|
| Current
maturity of long term liabilities |
10 |
107,845,089 |
|
94,812,516 |
|
| Creditors,
Provisions, accrued charges |
|
|
|
|
| & other liabilities |
|
|
11 |
339,806,387 |
|
221,192,687 |
|
| Workers
profit participation fund |
|
12 |
1,263,511 |
|
3,620,645 |
|
| Workers welfare fund |
|
|
|
1,892,899 |
|
1,892,899 |
|
| Provision for taxation |
|
|
1,349,124 |
|
1,349,124 |
|
| DIVIDEND |
|
|
13 |
51,759 |
|
290,515 |
|
|
|
|
|
975,346,455 |
|
750,088,874 |
|
| CONTINGENT
LIABILITIES/COMMITMENTS |
|
14 |
— |
|
— |
|
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|
---------------------- |
|
---------------------- |
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|
2,040,445,257 |
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1,852,440,930 |
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|
---------------------- |
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---------------------- |
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| The
annexed notes form an integral Dart of these accounts. |
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| 8 |
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| AS
AT 30 SEPTEMBER, 1995 |
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|
NOTE |
1995 |
|
1994 |
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|
RUPEES |
|
RUPEES |
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| FIXED ASSETS |
|
|
|
|
|
| At
cost less depreciation |
|
15 |
638,458,340 |
|
591,097,220 |
|
|
|
|
|
| CAPITAL
WORK IN PROGRESS |
|
16 |
54,410,899 |
|
138,192,563 |
|
|
|
|
|
| INVESTMENTS — SHARES |
|
17 |
353,778,202 |
|
369,799,125 |
|
|
|
|
|
| INVESTMENTS—IMMOVABLE
PROPERTY |
|
18 |
33,155,359 |
|
— |
|
|
|
|
| DEFERRED COST |
|
19 |
4,388,393 |
|
2,226,426 |
|
|
|
|
| CURRENT ASSETS |
|
20 |
|
|
| Stores & stocks |
|
21 |
234,388,486 |
|
203,395,982 |
|
| Trade
debts/bills receivables |
|
|
|
| Unsecured
considered good |
|
202,141,364 |
|
141,389,906 |
|
| Rebate receivable |
|
11,335,562 |
|
12,887,931 |
|
| Advances,
deposits, prepayments |
|
|
|
| & Other receivables |
|
22 |
345,497,864 |
|
288,620,165 |
|
| Short Term Investments |
|
|
23 |
96,009,941 |
|
60,451,257 |
|
| Margin
deposits with banks |
|
12,009,185 |
|
1,148,852 |
|
| Cash & bank balances |
|
|
24 |
54,871,662 |
|
43,231,503 |
|
|
|
---------------------- |
|
---------------------- |
|
|
|
956,254,064 |
|
751,125,596 |
|
|
|
|
|
|
|
---------------------- |
|
---------------------- |
|
|
|
2,040,445,257 |
|
1,852,440,930 |
|
|
|
|
============ |
|
============ |
|
|
| ABDUL SHAKOOR |
|
NASEER AHMED |
|
|
|
| CHIEF EXECUTIVE. |
|
DIRECTOR |
|
|
|
|
| 9 |
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|
|
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|
|
PROFIT AND LOSS ACCOUNT |
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|
FOR THE YEAR ENDED 30
SEPTEMBER,1995 |
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|
|
|
NOTE |
1995 |
|
1994 |
|
|
|
|
RUPEES |
|
RUPEES |
|
|
| SALES (Net) |
|
|
25 |
1,752,642,091 |
|
1,340,072,418 |
|
| COST OF SALES |
|
26 |
1,560,242,621 |
|
1,052,620,423 |
|
|
----------- |
|
----------- |
|
| GROSS PROFIT |
|
192,399,470 |
|
287,451,995 |
|
|
|
|
|
| OPERATING EXPENSES |
|
|
|
| Administrative |
|
27 |
20,857,856 |
|
16,731,887 |
|
| Selling |
|
28 |
37,086,859 |
|
44,420,203 |
|
|
|
57,944,715 |
|
61,152,090 |
|
|
|
|
----------- |
|
----------- |
|
| OPERATING PROFIT |
|
|
134,454,755 |
|
226,299,905 |
|
| MlSCELLANEOUS REVENUE. |
|
29 |
33,819,868 |
|
15,336,190 |
|
|
|
----------- |
|
----------- |
|
| FINANCIAL
& OTHER CHARGES |
|
|
|
|
|
| Financial |
|
30 |
148,119,345 |
|
170,484,358 |
|
| Other Charges |
|
31 |
4,304,028 |
|
5,973,441 |
|
|
|
----------- |
|
----------- |
|
|
|
|
152,423,373 |
|
176,457,799 |
|
|
----------- |
|
----------- |
|
| PROFIT
FOR THE YEAR BEFORE TAXATION |
|
15,851,250 |
|
65,178,296 |
|
| PROVISION
FOR TAXATION-PRIOR YEAR |
|
136,788 |
|
316,025 |
|
|
----------- |
|
----------- |
|
| PROFIT
FOR THE YEAR AFTER TAXATION |
|
15,714,462 |
|
64,862,271 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
64,862,271 |
|
- |
|
|
----------- |
|
----------- |
|
| UNAPPROPRIATED
PROFIT CARRIED TO BALANCE SHEET |
|
80,576,733 |
|
64,862,271 |
|
|
============ |
|
============ |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| ABDUL SHAKOOR |
|
NASEER AHMED |
|
|
| CHIEF EXECUTIVE |
|
|
DIRECTOR |
|
|
| 10 |
|
|
|
|
|
CASH FLOW STATEMENT |
|
|
|
|
FOR THE YEAR ENDED 30
SEPTEMBER,1995 |
|
|
|
|
NOTE |
1995 |
|
1994 |
|
|
|
|
RUPEES |
|
RUPEES |
|
|
| Net
cash inflow from operating activities |
A |
194,676,269 |
|
295,321,881 |
|
|
|
|
|
| Returns
on investments and servicing of finance |
|
|
|
|
|
|
|
|
|
| Markup/interest paid |
|
|
|
161,796,205 |
|
175,143,840 |
|
| Finance
charges on leased assets |
|
25,137,134 |
|
30,082,123 |
|
| Zakat paid |
|
|
42,883 |
|
15,914 |
|
| Dividend paid |
|
|
238,756 |
|
3,992,844 |
|
| Interest
received on advances to associated |
|
|
|
| undertakings |
|
|
33,217,363 |
|
55,226,203 |
|
| Interest
paid on advances to associated undertakings |
27,118,763 |
|
28,437,075 |
|
| Interest income others |
|
|
2,219,659 |
|
|
|
| Dividend received |
|
|
988,884 |
|
3,859,106 |
|
| Profit/return
on deposits & investments |
|
2,615,779 |
|
2,623,519 |
|
|
|
|
|
|
|
|
| Net
cash out flow from investments and |
|
|
|
|
|
| servicing of finance |
|
|
175,292,056 |
|
175,962,968 |
|
|
|
|
|
| Taxation: |
|
|
|
| Taxes
paid (including deducted at source) |
|
27,245,849 |
|
9,185,787 |
|
|
|
|
|
| Investing activities: |
|
|
|
|
| Fixed
capital expenditure |
|
8,407,137 |
|
49,961,298 |
|
| Sale
proceeds of fixed assets |
|
1,846,200 |
|
136,000 |
|
| Investments |
|
|
31,151,545 |
|
299,438,358 |
|
| Sale
proceeds of investments |
|
46,130,165 |
|
12,850,100 |
|
|
|
|
------------------------ |
|
------------------------ |
|
| Net
cash inflow / (outflow) from investing activities |
8,417,683 |
|
336,413,556 |
|
|
|
------------------------ |
|
------------------------ |
|
| Net
cash inflow/(outflow) before financing activities |
556,047 |
|
226,240,430 |
|
|
|
|
|
|
|
| Financing activities: |
|
|
|
|
| Issue
of right shares including share premium |
|
55,469,200 |
|
365,730,800 |
|
| Share issue expenses |
|
|
939,632 |
|
2,783,033 |
|
| Increase/(decrease)
in short term finances |
|
96,532,797 |
|
35,137,094 |
|
| Redeemable
capital & loans received |
|
- |
|
34,635,000 |
|
| Repayment
of redeemable capital 8` loans |
|
49,596,526 |
|
37,322,088 |
|
| Repayment
of obligation under finance leases |
|
59,652,105 |
|
62,686,401 |
|
|
------------------------ |
|
------------------------ |
|
| Net
cash inflow from financing activities |
|
41,813,734 |
|
262,437,184 |
|
| Increase
in cash &r cash equivalents |
|
------------------------ |
|
------------------------ |
|
|
|
42,369,781 |
|
36,196,754 |
|
|
============== |
|
============== |
|
| ABDUL SHAKOOR |
|
NASEER AHMED |
|
|
|
|
| CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
|
|
|
|
|
|
|
|
| 11 |
|
|
|
|
|
|
|
| A.
NET cash inflow from operating activities |
|
| Operating
profit before taxation |
|
15,851,250 |
|
65,178,296 |
|
| Depreciation |
|
61,543,980 |
|
66,282,656 |
|
| Profit
on sale of investments |
|
|
31,030,165 |
|
12,850,100 |
|
| Dividend income |
|
988,884 |
|
2,121,947 |
|
| Profit
on sale of fixed assets |
|
888,956 |
|
37,632 |
|
| Profit
/ (Loss) on sale & lease back of assets) |
|
662,251 |
|
197,021 |
|
| Exchange (gain) / loss |
|
196,261 |
|
362,137 |
|
| Provision
for gratuity (net) |
|
1,848,502 |
|
1,158,739 |
|
| Provision
for diminution in value of investments |
|
- |
|
24,310 |
|
| Deferred
cost amortised |
|
961,065 |
|
556,607 |
|
| Financial expenses |
|
122,939,328 |
|
142,462,717 |
|
| Finance
charges on leased assets |
|
25,137,134 |
|
28,005,727 |
