|
|
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|
|
|
|
|
|
|
|
|
| Annual
Report 1996 |
|
| Ibrahim
Fibres Limited |
|
|
| Company
Information |
|
|
| Chief
Executive |
|
| Sheikh
Mukhtar Ahmed |
|
|
| Directors |
|
| Sheikh
Mohammed Yaseen |
|
| Mr.
Mohammed Naeem Mukhtar |
|
| Mr.
Mohammad Waseem Mukhtar |
|
| Mr.
Asim Yaseen |
|
| Mrs.
Iqbal Begum |
|
| Mrs.
Ghazala Naeem |
|
|
| Secretary |
|
| S.M.
Hasnain Rizvi |
|
|
| Auditors |
|
| M.
Yousuf Adil & Co., |
|
| Chartered
Accountants, Karachi. |
|
|
| Tax
consultants |
|
| F.R.
Merchant & Co., |
|
| Chartered
Accountants, |
|
| Karachi. |
|
|
| System
consultants |
|
| KPMG
Peat Marwick |
|
| Associates
(Pvt) Limited |
|
| Karachi |
|
|
| Bankers |
|
| DEG-Deutsche
Investitions- und |
|
| Entwicklungsgesellschaft
mbH, |
|
| Faysal
Bank Limited |
|
| National
Bank of Pakistan |
|
|
| Registered
office |
|
| Ibrahim
Centre |
|
|
| 1-A,
Ahmad Block, |
|
| New
Garden Town, Lahore. |
|
|
| Head
office |
|
| Ibrahim
Centre |
|
|
| 15,
Club Road, Faisalabad. |
|
|
| Shares
registration office |
|
| Ibrahim
Centre |
|
|
| GK-7/59,
Bagh-e-Zehra Street, |
|
| Kharadar,
Karachi. |
|
|
| Location
of plant |
|
| 38,
Kilometer, Faisalabad |
|
| Shaikhupura
Road, |
|
| Tehsil
Jaranwala, District |
|
| Faisalabad. |
|
|
|
| Notice
of Meeting |
|
| Notice
is hereby given that the 10th Annual General Meeting of the shareholders of
the Company will be |
|
| held
on 30-12-1996 at 10.30 A.M., at Avari Hotel, Lahore to transact the following
business:- |
|
|
| 1.
To confirm the minutes of the preceding meeting of the shareholders of the
Company. |
|
|
|
|
| 2.
To consider and approve the Annual Audited Accounts of the Company for the
year ended |
|
| September
30, 1996 together with Directors' and Auditors' Reports thereon, |
|
|
|
|
| 3.
To elect 7 (seven) Directors in accordance with the Provisions of Section 178
(5) of the |
|
| Companies
Ordinance, 1984 for a term of 3 (three) years commencing from 30-01-1997. The |
|
| number
of Directors fixed by the Board of Directors in their meeting held on
14-11-1996 |
|
| pursuant
to Section 178 (1) of the Companies Ordinance 1984 is 7 (seven). |
|
|
| The
following Directors shall retire on 30-01-1997 in accordance with the
requirements of Section |
|
| 180
(1) of the Companies Ordinance, 1984:- |
|
|
| 1.
Sheikh Mukhtar Ahmed |
|
| 2.
Sheikh Mohammad Yaseen |
|
| 3.
Mr. Mohammad Naeem Mukhtar |
|
| 4.
Mr. Mohammad Waseem Mukhtar |
|
| 5.
Mr. Asim Yaseen |
|
| 6.
Mrs. Iqbal Begum |
|
| 7.
Mrs. Ghazala Naeem |
|
|
| The
retiring Directors are eligible for re-election. |
|
|
| 4.
To appoint Auditors for the year 1996/97 and to fix their remuneration. The
present auditors |
|
| M/s. M. Yousaf Adil & Co., Chartered
Accountants, Karachi being eligible for appointment, offer |
|
| themselves for re-appointment. |
|
|
| 5.
To transact any other business with the permission of the chair. |
|
|
| By
Order of the Board |
|
|
| (S.M.
HASNAIN RIZ¥I) |
|
| Company
Secretary |
|
|
| Notes: |
|
| i)
The share transfer books of the Company shall remain closed from 24-12-1996
to 30-12-1996 |
|
| (both
days inclusive) to determine the names of members entitled to attend the
meeting. Transfers |
|
| received
in order at the Registered Office of the Company at the close of business on
23-12-1996 |
|
| will
be treated in time. |
|
|
| ii)
A member entitled to attend and vote at the meeting may appoint another
member as his/her proxy |
|
| to
attend and vote on his/her behalf. |
|
|
| iii)
The proxies, in order to be effective, must be received by the Company at
least 48 hours before the |
|
| time
for holding the meeting. |
|
|
| iv)
Any person who seeks to contest election to the office of Director shall,
whether he is retiring or |
|
| otherwise,
file with the Company not later than 14 (fourteen) days before the date of
the meeting, |
|
| notice
of his intention to offer himself as a Director together with his/her
consent. |
|
|
|
|
| Directors'
Report |
|
| The
directors of your company take pleasure in presenting their report with
audited financial statements, |
|
| together
with auditors' report thereon, for the year ended September 30, 1996. |
|
|
| THE
PROJECT |
|
| Ibrahim
Fibres Limited was incorporated with the main object to setup and operate a
Polyester Staple |
|
| Fibre
Plant having a capacity to produce 200 Tons per day of Polyester Staple Fibre
on two lines having |
|
| a
capacity of 100 tons each per day. |
|
|
| The
Plant and machinery has been supplied by M/s. Zimmer AG., Germany which is
reckoned as one of |
|
| the
worlds leading Engineering Companies of the Polyester Staple Fibres Plant. |
|
|
| PROJECT
IMPLEMENTATION |
|
| We
are pleased to inform you that the civil work of the plant has been
completed, and after completion |
|
| of
mechanical erection and installation of the plant, by the Grace of Almighty
Allah, we have also |
|
| completed
the pre commissioning activity of the plant and utilities have already been
put into operation. |
|
| At
present the heating up of the plant has been started and after hot dummy
testing the plant will start its |
| operation
by mid December, 1996. |
|
|
| ENGINEERING
TECHNICAL KNOW HOW: |
|
| The
Engineering Technical Know How has been provided by M/s. Zimmer AG., Germany.
The erection |
|
| and
installation has been carried out under their direct supervision. The
Technical personnel have been |
|
| trained
by M/s. Zimmer AG., Germany under the provisions of the contract. They will
keep us abreast |
|
| of
future development in the field of Polyester Fibre technology and provide
technical assistance and |
|
| support
for a period of 5 years from the date of startup of the plant. |
|
|
| The
supplier of the plant, through a performance bond issued by American Express
Bank, Frankfurt, has |
|
| guaranteed
the plant performance, the production capacity, utilities consumption of the
entire plant, raw |
|
| material
consumption and the quality of the finished product. The production and plant
operations will |
|
| be
supervised by them till the issuance of plant acceptance certificate by us. |
|
|
| RAW
MATERIALS |
|
| The
major raw materials for the manufacturing of Polyester Staple Fibre are being
purchased from top |
|
| of
the line suppliers, PTA is being imported from I.C.I., Amoco, Mitsui &
MEG is being imported from |
|
| Mobil
& Sabic. The first consignment of PTA has arrived at Karachi Port and
"Inshall Allah" all the |
|
| materials
required for the production will reach the plant by the start of 2nd week of
December, 1996. |
|
|
| The
long term purchase contracts are also being singed with the sole
consideration of providing uniform |
|
| product
quality of PSF at all times to our customers, which will in turn enable them
to maintain |
|
| consistency
in quality and instances of variation in yarn properties like strength and
Dyeablitiy are |
|
| avoided. |
|
|
|
| PLANT
MANAGEMENT |
|
| The
Plant will be managed by highly qualified team of professionals with vast
experience in their |
|
| respective
fields. Every department will be headed by a professional, qualified and
experienced |
|
| executive
in the concerned field. |
|
|
| AUDITORS |
|
| The
present auditors M/s. M. Yousaf Adil & Co. Chartered Accountants retire
and offer themselves for |
|
| re-appointment
as the auditors of the company for the year 1996-97. |
|
|
| PATTERN
OF SHARE HOLDING |
|
| The
Pattern of share holding is annexed. |
|
|
| ACKNOWLEDGEMENT |
|
| The
Management would like to avail this opportunity to record their special
thanks to Zimmer AG, |
|
| their
Erection Team involved in the erection and installation of the project. |
|
|
| The
management would also like to place on record its deep appreciation for banks
and financial |
|
| institutions,
the Executives and Employees of the company involved in the implementation of
the |
|
| project. |
|
|
| On
behalf of the Board |
|
| (SHEIKH
MUKHTAR AHMED) |
|
| Chief
Executive |
|
|
|
|
| Auditors'
Report to the Members |
|
| We
have audited the annexed balance sheet of Ibrahim Fibres Limited as at
September 30,1996 and |
|
| related
statement of source and application of funds, together with the notes forming
part thereof, for |
|
| the
year then ended and we state that we have obtained all the information and
explanations which to |
|
| the
best of our knowledge and belief were necessary for the purposes of our audit
and, after due |
|
| verification
thereof, we report that: |
|
|
| (a)
In our opinion, proper books of account have been kept by the company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| (b)
In our opinion: |
|
|
| (i)
the balance sheet together with the notes thereon has been drawn up in
conformity with the |
|
| Companies
Ordinance, 1984, and is in agreement with the books of account and is further |
|
| in
accordance with accounting policies consistently applied; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's
business; |
|
| and |
|
|
| (iii)
the investments made and the expenditure incurred during the year were in
accordance with |
|
| the
objects of the Company; |
|
|
|
|
| (c)
In our opinion and to the best of our information and according to the
explanations given to us, the |
|
| balance sheet and statement of source and application of funds, together
with the notes forming |
|
| part thereof, give the information required
by the Companies Ordinance, 1984, in the manner so |
|
| required and respectively give a true and
fair view of the state of the Company's affairs as at |
|
| September 30, 1996 and the changes in
source and application of funds for the year then ended; |
|
| and |
|
|
| (d)
In our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| M.
YOUSUF ADIL & Co. |
|
| Chartered
Accountants |
|
|
| Balance
Sheet as at September 30, 1996 |
|
|
|
|
|
1996 |
1995 |
|
|
|
|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVE |
|
| Authorised
capital |
|
| 500,000,000 |
|
|
|
|
| Ordinary
shares of |
|
|
|
| Rs.
10/-each |
|
5,000,000,000 |
5,000,000,000 |
|
|
|
|
|
============== |
============== |
|
|
| Issued
subscribed and |
|
| paid
up capital |
|
| 200,000,000
Ordinary |
|
| shares
of Rs. 10/= each |
|
| fully
paid in cash |
|
|
2,000,000,000 |
2,000,000,000 |
|
|
|
|
|
|
| Capital
reserve- |
|
| share
premium |
|
|
1,000,000,000 |
1,000,000,000 |
|
|
|
|
-------------- |
-------------- |
|
|
|
|
3,000,000,000 |
3,000,000,000 |
|
|
|
|
|
|
| LONG
TERM LOANS |
|
|
3 |
747,934,101 |
-- |
|
|
|
|
|
|
|
|
| LIABILITIES
AGAINST AS SETS |
|
|
|
|
| SUBJECT
TO FINANCE LEASE |
|
|
4 |
1,210,223 |
-- |
|
|
| DEFERED
LIABILITY |
|
| Staff
retirement |
|
| gratuity |
|
|
501,989 |
-- |
|
|
| CURRENT
LIABILITIES |
|
| Current
portion of long |
|
| term
liabilities |
|
|
5 |
41,643,921 |
-- |
|
| Creditors,
accrued and |
|
|
| other
liabilities |
|
|
6 |
43,712,182 |
21,607,694 |
|
|
-------------- |
-------------- |
|
|
|
|
85,356,103 |
21,607,694 |
|
|
|
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
|
7 |
-- |
-- |
|
|
-------------- |
-------------- |
|
|
|
3,835,002,416 |
3,021,607,694 |
|
|
|
============== |
============== |
|
|
| The
annexed notes from 1 to 15 form |
|
| an
integral part of these accounts. |
|
|
|
|
|
|
|
1996 |
1995 |
|
|
|
Note |
Rupees |
Rupees |
|
|
| FIXED
CAPITAL EXPENDITURE |
|
| Land
- at cost |
|
| Freehold |
|
|
9,979,484 |
9,547,514 |
|
| Lease
hold |
|
|
732,139 |
732,139 |
|
| Operating
assets |
|
|
8 |
8,962,250 |
439,038 |
|
| Capital
work in |
|
|
| progress |
|
|
9 |
3,063,317,520 |
903,575,706 |
|
|
-------------- |
-------------- |
|
|
|
3,082,991,393 |
914,294,397 |
|
|
| LONG
TERM DEPOSITS |
|
| AND
DEFERRED COSTS |
|
|
10 |
26,342,741 |
25,909,953 |
|
|
| CURRENT
ASSETS |
|
|
| Advances,
deposits, |
|
| prepayments
and |
|
| other
receivables |
|
|
11 |
5,056,105 |
960,127 |
|
|
|
|
| Cash
& bank balances |
|
|
12 |
720,612,177 |
2,080,443,217 |
|
|
-------------- |
-------------- |
|
|
|
725,668,282 |
2,081,403,344 |
|
|
|
|
-------------- |
-------------- |
|
|
|
3,835,002,416 |
3,021,607,694 |
|
|
|
============== |
============== |
|
|
| Statement
of Sources and Application of Funds for the year Ended September 30, 1996 |
|
|
|
|
|
1996 |
1995 |
|
|
|
Rupees |
Rupees |
|
|
| SOURCES
OF FUNDS |
|
| Share
capital/share |
|
| deposit
money |
|
|
-- |
1,276,000,000 |
|
|
|
|
| Share
premium |
|
|
-- |
1,000,000,000 |
|
|
| Long
term loans |
|
789,124,000 |
-- |
|
|
|
|
| Lease
finances |
|
|
1,975,350 |
-- |
|
|
|
|
| Staff
retirement |
|
| gratuity |
|
|
501,989 |
-- |
|
|
|
|
| Increase
in current |
|
| liabilities |
|
|
22,104,488 |
21,595,158 |
|
|
|
|
|
|
|
813,705,827 |
2,297,595,158 |
|
| APPLICATION
OF FUNDS |
|
| Fixed
capital expenditure |
|
2,168,696,996 |
896,026,482 |
|
|
|
|
| Long
term deposits and |
|
| deferred
costs |
|
|
432,788 |
23,708,353 |
|
|
|
|
| Lease
finances |
|
|
311,105 |
-- |
|
|
|
|
| (Decrease)
/ Increase in |
|
| current
assets |
|
|
(1,355,735,062) |
1,377,860,323 |
|
|
-------------- |
-------------- |
|
|
|
813,705,827 |
2,297,595,158 |
|
|
|
============== |
============== |
|
|
| Notes
to the Accounts - September 30, 1996 |
|
|
|
| 1.
STATUS AND ACTIVITIES |
|
| 1.1
The company is limited by shares incorporated in Pakistan on July 30, 1986
under the |
|
| Companies Ordinance, 1984, and its shares
are quoted on stock exchanges in Pakistan. The |
|
| principal object of the company is setting
up and operation of polyester fibre plant. The project |
|
| is being set up at Tehsil Jaranwala,
District Faisalabad in the Province of Punjab. |
|
|
| 1.2
No profit and loss account has been prepared as the Company has not carried
out any |
|
| commercial activity during the year.
Project of the Company is under implementation and |
|
| expected to commence operations from
December 1996. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under "historical cost convention"
modified by certain |
|
| exchange
differences mentioned in note 2.8. |
|
|
| 2.2
Staff retirement benefits |
|
| The
company operates an unfunded gratuity scheme covering all its employees.
Provision is |
|
| made
annually to cover the liability under the scheme. |
|
|
|
| 2.3
Operating assets |
|
| These
are stated at cost less accumulated depreciation. |
|
|
| Depreciation
is charged applying the reducing balance method at the rates specified in the |
|
| operating
assets note. |
|
|
| Depreciation
on additions during the year is charged on the basis of a whole year, however |
|
| depreciation
for proportionate period of use is charged on major project cost capitalised
during |
|
| the
year, No depreciation is charged on deletions during the year. |
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. Major renewals |
|
| and
improvements are capitalised. |
|
|
| Gains
and losses on disposal of assets are included in current income. |
|
|
| 2.4
Capital work in progress |
|
| All
costs/expenditure connected with specific assets incurred during the project
implementation |
|
| period
are collected under this heading. These are transferred to specific assets as
and when |
|
| assets
are available for use. |
|
|
| 2.5
Unallocated capital expenditure |
|
| All
costs/expenditure not directly related to specific assets, incurred during
the project |
|
| implementation
period are collected under this heading. These are allocated to plant and |
|
| machinery
and building at the time when assets are available for use on completion of
the |
|
| project. |
|
|
|
| 2.6
Accounting for leases |
|
| The
Company accounts for the assets acquired under finance lease by recording the
assets and |
|
| related
liability. Financial charges are allocated to accounting period in a manner
so as to |
|
| provide
a constant periodic rate of charge on the outstanding liability. Depreciation
is charged |
|
| at
the rate specified in the related note, to write off the asset over its
estimated useful life in |
|
| view
of certainty of ownership of the asset at the end of the lease period. |
|
|
| 2.7
Deferred costs |
|
| These
are amortised in maximum period of five years from the year of deferment. |
|
|
|
| 2.8
Rates of Exchange |
|
| Assets
and liabilities in foreign currencies are translated into Pak Rupee at the
rate of exchange |
|
| prevailing
at the balance sheet date, except those covered under forward exchange
contract |
|
| which
are translated at the cover rate or which are kept in foreign currency
account to be utilised |
|
| for
payment abroad. Exchange differences in respect of foreign currency
transactions relating to |
|
| fixed
assets are incorporated in the cost of relevant assets, other exchange
differences are |
|
| included
in current income. |
|
|
| 3.
LONG TERM LOANS - Secured |
|
|
| Description |
|
Foreign |
|
Local |
|
1996 |
1995 |
|
|
|
currency |
|
currency- |
|
Rupees |
Rupees |
|
|
|
|
Demand finance |
|
|
| Obtained
during |
|
| the
year |
|
489,124,000 |
300,000,000 |
789,124,000 |
-- |
|
|
| Payable
within one |
|
| year
shown under |
|
| current
liabilities |
-- |
|
41,189,899 |
|
41,189,899 |
-- |
|
|
------------ |
------------ |
------------ |
------------ |
|
|
|
489,124,000 |
258,810,101 |
747,934,101 |
-- |
|
|
|
=========== |
=========== |
=========== |
=========== |
|
|
|
|
|
|
|
|
|
|
| Foreign
currency |
Deutsche Mark |
|
|
|
|
| Foreign
currency |
|
| amount |
|
|
20,000,000 |
|
|
| Repayment: |
|
|
| Date
of first |
|
| instalment |
|
15-05-98 |
|
30-12-96 |
|
|
| No.
of half yearly |
|
| instalments |
|
8 |
|
10 |
|
|
| Obtained
from |
|
Financial |
Banking |
|
|
|
Institution |
company |
|
|
| Sub
Note |
|
3.1 |
|
3.2 |
|
|
| 3.1
Foreign exchange value of the loan has been converted into Pak Rupee at the
exchange rate |
|
| ruling on the date of Balance Sheet. |
|
|
| The
loan is secured against first equitable mortgage on present and future
immovable |
|
| properties
and hypothecation of all 1he present and future movable fixed assets of the |
|
| Company
ranking pari passu with the charge created in respect of demand finance
(Refer |
|
| Note
3.2) accompanied by an irrevocable power of attorney authorising the lender
to create |
|
| and
register an English mortgage in case of any default in repayment of loan. |
|
|
| It
is subject to interest at net DM LIBOR rate determined semi-annually on
interest |
|
| payment
dates i.e. 15 May and 15 November each year plus 3.25% per annum. |
|
|
| 3.2
Demand finance is secured against first equitable mortgage on fixed assets of
the Company |
|
| ranking
pari passu with the charge created in respect of Foreign Currency loan (Refer
Note 3.1). |
|
| It
is further secured by personal guarantee of directors of the Company. |
|
|
| It
is subject to mark up @ 18% per annum. |
|
|
1996 |
1995 |
|
|
|
Rupees |
Rupees |
|
| 4.
LIABILITIES AGAINST ASSETS |
|
| SUBJECT
TO FINANCE LEASE |
|
|
| Obtained
during the year |
|
1,975,350 |
-- |
|
| Instalments
paid |
|
|
(311,105) |
-- |
|
|
-------------- |
-------------- |
|
|
|
1,664,245 |
-- |
|
|
| Instalments
due within |
|
| one
year shown under |
|
| Current
liabilities |
|
(454,022) |
-- |
|
|
-------------- |
-------------- |
|
|
|
1,210,223 |
-- |
|
|
| These
represent vehicles acquired under two separate lease agreements. |
|
|
| The
cost plus financial charges are payable in 36 and 60 monthly instalments of
Rs. 44,755/- and |
|
| Rs.
16,355/- respectively. |
|
|
| The
liability represents total minimum lease payments discounted @ 21.50% per
annum, being |
|
| the
company's effective rate of borrowing. The Company is liable to pay
additional rental @ 0.1% |
|
| per
day in case of default in payment of lease rentals on due dates. |
|
|
| The
future minimum lease payments to which the company is committed are as under: |
|
|
| Year
ending September 30, |
|
Rupees |
|
|
|
|
|
|
1997 |
|
733,320 |
|
|
|
1998 |
|
733,320 |
|
|
|
1999 |
|
285,770 |
|
|
|
2000 |
|
196,260 |
|
|
|
2001 |
|
130,840 |
|
|
|
|
-------------- |
|
|
|
|
2,079,510 |
|
| Financial
Charges allocated |
|
| to
future periods |
|
415,265 |
|
|
-------------- |
|
|
|
1,664,245 |
|
|
|
============== |
|
|
|
|
1996 |
1995 |
|
|
