| GHAZI FABRICS INTERNATIONAL LTD. |
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| In
The Name of Allah |
|
| The
Merciful |
|
| The
Compassionate |
|
|
| ANNUAL
REPORT 1997 |
|
|
|
| CONTENTS |
|
|
|
| COMPANY INFORMATION |
|
| NOTICE OF ANNUAL GENERAL
MEETING |
|
| DIRECTORS'
REPORT |
|
| CHAIRMAN'S REVIEW |
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| BALANCE SHEET |
|
| PROFIT AND LOSS ACCOUNT |
|
| CASH FLOW STATEMENT |
|
| NOTES TO THE ACCOUNTS |
|
| PATTERN
OF SHAREHOLDING |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
|
| CHAIRMAN/CHIEF
EXECUTIVE |
|
| MR.
MUHAMMAD ARSHAD CHAUDHRY |
|
|
| DIRECTORS |
|
|
| MRS.
AZRA YASMIN |
|
|
| W/O
MR. MUHAMMAD ARSHAD CHAUDHRY |
|
| MR.
ABDUL HAMEED |
|
|
| MR.
MUHAMMAD KAMRAN ARSHAD |
|
| MR.
MUHAMMAD TARIQ |
|
|
| MISS
FARIHA ARSHAD |
|
|
| MR.
ABDUL KHALIQ BALUCH |
|
|
| SECRETARY |
|
|
| MR.
MANSOOR AHMAD KHAN |
|
|
|
| AUDITORS |
|
|
| M/S.
QADEER & COMPANY, |
|
| CHARTERED
ACCOUNTANTS, |
|
| LAHORE. |
|
|
| LEGAL
ADVISOR |
|
| MR.
TARIQ JAVAID |
|
| BARRISTER-AT-LAW |
|
|
| BANKERS |
|
|
| HABIB
BANK LIMITED |
|
|
| REGISTERED
OFFICE |
|
| 8-C,
BLOCK E-Ill, |
|
| GULBERG
-III, LAHORE - 54660 |
|
| PH:
(042) 5764026-28 |
|
| FAX:
(042) 5764032 |
|
| EMAIL:
ghazii@brain. net. pk |
|
| TELEX:
47291 GHAZI PK |
|
|
| MILLS |
|
|
| 46-K.M.
MULTAN ROAD, |
|
| BHAIPHERU, |
|
| DISTT:
KASUR. |
|
|
|
| NOTICE
OF 8TH ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 8th Annual General Meeting of the Shareholders of
GHAZI FABRICS |
|
| INTERNATIONAL
LIMITED will be held on Monday the March 30, 1998 at 10.00 a.m. at the
Qasar-e- |
|
| Noor,
9-E-2, Gulberg-III Lahore to transact the following business · |
|
|
| 1.
To confirm the minutes of last Annual General Meeting of the Shareholders
held on March 24, |
|
| 1997. |
|
|
|
| 2.
To receive, consider and adopt the audited accounts of the Company together
with the Directors' |
|
| and
Auditors' Reports thereon for the year ended September 30, 1997. |
|
|
| 3.
To appoint auditors and fix their remuneration for the year 1997-98. The
retiring auditors |
|
| M/s.
Qadeer & Company, Chartered Accountants, being eligible offer themselves
for |
|
| re-appointment. |
|
|
| 4.
To transact any other ordinary business as may be placed before the meeting
with the permission |
|
| of
the Chair. |
|
|
| NOTES: |
|
|
| I.
The Share Transfer Book of the Company will remain closed from March 20, 1998
to March 30, |
|
| 1998
(both days inclusive). |
|
|
|
| II.
A member entitled to attend and vote at the meeting may appoint another
member of the |
|
| Company
as a proxy to attend and vote instead of him/her. Proxy Form duly signed and
affixed |
|
| revenue
stamp of Rs. 2/- must be deposited at the Registered Office of the Company
not less |
|
| than
48 hours before the time fixed for holding the meeting. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| Your
Directors take pleasure in submitting herewith their report and audited
accounts of the Company for |
|
| the
year ended September 30, 1997 together with the auditors' report thereon. |
|
|
| OPERATING AND FINANCIAL
RESULTS |
|
1997 |
1996 |
|
|
|
(Rupees in thousand) |
|
|
| OPERATING
PROFIT |
|
|
135,044 |
117,986 |
|
| OTHER
INCOME |
|
|
7,897 |
3,093 |
|
|
---------- |
---------- |
|
|
|
|
142,941 |
121,079 |
|
|
| FINANCIAL
CHARGES |
|
|
157,867 |
120,394 |
|
| WORKERS'
PROFIT PARTICIPATION FUND |
|
0 |
34 |
|
|
---------- |
---------- |
|
|
|
|
|
|
157,867 |
120,428 |
|
|
---------- |
---------- |
|
| TAXATION |
|
|
|
(14,926) |
651 |
|
| FOR
THE YEAR |
|
|
(10,049) |
0 |
|
| PRIOR
YEAR |
|
|
(19,687) |
0 |
|
|
|
|
---------- |
---------- |
|
|
|
|
(29,736) |
0 |
|
|
---------- |
---------- |
|
| PROFIT/(LOSS)
AFTER TAXATION |
|
|
(44,662) |
651 |
|
| LOSS
BROUGHT FORWARD |
|
|
(165,409) |
(166,060 |
|
|
|
|
---------- |
---------- |
|
| ACCUMULATED
(LOSS) CARRIED FORWARD |
|
(210,071) |
(165,409 |
|
|
|
|
========== |
========== |
|
|
| Mr.
Muhammad Kamran Arshad and Miss Fariha Arshad have joined the Board on
November 1, 1997 in |
|
| place
of resigning Directors, Mrs. Azra Yasmin W/o Muhammad Tariq and Mst. Rehmat
Bibi, for the |
|
| remaining
term expiring on October 27, 1999. |
|
|
| The
present auditors M/s. Qadeer and Company, Chartered Accountants, retire and
being eligible offer |
|
| themselves
for reappointment. |
|
|
| The
statement of pattern of the Shareholding of the company as at September 30,
1997 is shown on |
|
| page 23. |
|
|
|
| CHAIRMAN'S
REVIEW |
|
|
| It
gives me pleasure to welcome you all at eighth annual general meeting of
GHAZI FABRICS |
|
| INTERNATIONAL
LIMITED. |
|
|
| Since
inception company faced many challenges associated with domestic as well as
international |
|
| economic
crisis. The fiscal year under review has left bleak impression and it is
inevitable to acknowledge |
|
| an
increase in the company's accumulated loss. However, the obstacles and
impediments, that the |
|
| company
has constantly facing need to be understood. Even though the management
continued to |
|
| devote
tireless dedication and commitment, the company faced adverse circumstances,
that were simply |
|
| beyond
the management's control. The prices of the most basic factors of production,
like raw materials |
|
| and
fuel continued to rise drastically and contrarily sale prices of the output
remained low and |
|
| disappointing.
Inspite of the unfortunate plight of the textile industry, the government did
not provide any |
|
| relief
to alleviate any of our problems. Tax rates and financial charges remained
unbearably high and |
|
| further
worsened the situation. The crash of the Far Eastern market was another
setback, the company |
|
| had
to face, since the bulk of our output is exported to Far East. Their
unexpected crash had a dramatic |
|
| affect
on sale prices and volume as well. All these factors combined have further
contributed towards the |
|
| company's
losses. |
|
|
| Inspite
of all these adverse conditions, there is much to be proud of, "Ghazi
Fabrics", it continued to |
|
| operate
at optimum efficiency and productivity levels and set standards in the
textile industry. One of our |
|
| greatest
achievement is that, inspite of such adverse circumstances, Ghazi Fabrics is
one of the few |
|
| companies
in the Textile Industry which are not defaulters of any bank and financial
institution. Inspite of |
|
| heavy
losses, we have continued to maintain our financial credibility which is not
a minor achievement. |
|
| We
pride ourselves on having a very capable and committed management team that
continued to work |
|
| hard
to achieve the best possible results under these circumstances. |
|
|
| The
future can not be predicted, but I being the Chairman of Ghazi Fabrics
International can give you the |
|
| assurance
that we, as the management, will continue to work with commitment and
dedication in the best |
|
| interest
of the company and to ensure that there will be no lack on our part and we
will continue to |
|
| operate
at highest possible efficiency levels. As far as the factors those are beyond
our control, we do |
|
| hope
that they will take a favourable turn and we will get rewarding results in
the future. |
|
|
| I
would like to take this opportunity to thank my management for all their
hardwork and commitment. I |
|
| would
also like to thank you all for your continued confidence, understanding and
faith in Ghazi Fabrics |
|
| International
Limited. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of GHAZI FABRICS INTERNATIONAL LIMITED
as at |
|
| September
30, 1997 and the related profit and loss account and the cash flow statement,
together with |
|
| the
notes forming part thereof, for the year then ended and state that we have
obtained all the information |
|
| and
explanations which to the best of our knowledge and belief were necessary for
the purposes of our |
|
| audit
and, after due verification thereof, we report that; |
|
|
| a)
in our opinion, proper books of account have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| b)
in our opinion: |
|
|
| i)
the balance sheet and profit and loss account together with the notes thereon
have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984 and are in agreement with |
|
| the
books of account and are further in accordance with accounting policies
consistently |
|
| applied; |
|
|
|
| ii)
the expenditure incurred during the year was for the purpose of the Company's
business; |
|
| and |
|
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the year |
|
| were
in accordance with the objects of the Company; |
|
|
| c)
in our opinion and to the best of our information and according to the
explanations given to us, |
|
| the
balance sheet, profit and loss account and the cash flow statement, together
with the notes |
|
| forming
part thereof, give the information required by the Companies Ordinance, 1984
in the |
|
| manner
so required and respectively give a true and fair view of the state of the
Company's |
|
| affairs
as at September 30, 1997 and of the loss and the changes in cash flow for the
year then |
|
| ended;
and |
|
|
| d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| L
A H O R E |
|
QADEER & COMPANY |
|
| Dated:
March 05, 1998 |
CHARTERED ACCOUNTANTS |
|
|
|
|
|
| BALANCE
SHEET |
|
| AS
AT SEPTEMBER 30,1997 |
|
|
|
Note |
1997 |
1996 |
|
|
|
|
(Rupees in thousand) |
|
|
| CAPITAL AND LIABILITIES |
|
|
|
|
|
|
|
|
|
|
| SHARE
CAPITAL |
|
|
|
|
|
|
|
|
|
|
|
|
| Authorised |
|
|
|
|
|
| 40,000,000
ordinary shares |
|
|
| of
Rs.10/- each |
|
|
|
400,000 |
400,000 |
|
|
|
|
========== |
========== |
|
|
| Issued,
subscribed and paid up |
|
3 |
326,356 |
326,356 |
|
|
| ACCUMULATED
LOSS |
|
|
|
(210,071) |
(165,409) |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
116,285 |
160,947 |
|
|
| CUSTOM
DEBENTURES - SECURED |
|
|
4 |
9,257 |
12,342 |
|
|
| LONG-TERM
LOANS-SECURED |
|
|
5 |
427,085 |
465,024 |
|
|
| CURRENT
LIABILITIES |
|
|
|
|
|
|
|
| Short-term
finances-secured |
|
|
6 |
132,958 |
98,948 |
|
|
| Current
maturity |
|
|
|
|
|
|
|
| Custom
debentures |
|
|
|
|
3,085 |
3,085 |
|
|
| Long-term
loans |
|
|
|
7 |
97,939 |
87,499 |
|
|
| Creditors,
accrued and other liabilities |
|
8 |
85,954 |
73,080 |
|
|
| Workers'
profit participation fund |
|
9 |
6,893 |
6,127 |
|
|
|
|
|
|
|
|
10,049 |
0 |
|
|
| Taxation |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
|
336,878 |
268,739 |
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
10 |
- |
- |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
889,505 |
907,052 |
|
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
|
|
|
| PROPERTY AND ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| OPERATING
FIXED ASSETS |
|
|
|
|
|
|
|
|
|
|
| At
cost less accumulated depreciation |
|
11 |
679,819 |
736,152 |
|
|
|
|
| DEFERRED
COST |
|
|
12 |
0 |
20 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
|
13 |
16,374 |
15,820 |
|
| Stocks |
|
|
14 |
138,134 |
59,074 |
|
| Trade
debts |
|
|
15 |
18,765 |
22,406 |
|
| Advances,
deposits and prepayments 16 |
|
|
26,405 |
29,413 |
|
| Other
receivables |
|
|
17 |
5,000 |
36,720 |
|
| Cash
and bank balances |
|
|
18 |
5,008 |
7,447 |
|
|
|
|
--------- |
--------- |
|
|
|
|
|
209,686 |
170,880 |
|
|
--------- |
--------- |
|
|
|
889,505 |
907,052 |
|
|
|
========== |
========== |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30,1997 |
|
|
|
|
Note |
1997 |
1996 |
|
|
|
|
(Rupees in thousand) |
|
|
|
|
| Sales
- net |
|
|
19 |
1,503,018 |
1,397,303 |
|
| Cost
of sales |
|
|
20 |
1,307,007 |
1,209,639 |
|
|
|
|
|
--------- |
--------- |
|
| Gross
profit |
|
|
196,011 |
187,664 |
|
| Operating
expenses |
|
| Administrative,
selling and general |
|
21 |
60,967 |
69,678 |
|
|
--------- |
--------- |
|
| Operating
profit |
|
|
|
|
135,044 |
117,986 |
|
| Other
income |
|
|
|
22 |
7,897 |
3,093 |
|
|
|
|
|
|
|
142,941 |
121,079 |
|
|
| Financial
charges |
|
|
|
23 |
157,867 |
120,394 |
|
| Workers'
profit participation fund |
|
|
0 |
34 |
|
|
--------- |
--------- |
|
|
|
|
|
|
157,867 |
120,428 |
|
|
|
|
|
|
--------- |
--------- |
|
| Profit/(Loss)
before taxation |
|
|
|
(14,926) |
651 |
|
| Taxation |
|
| For the year |
I |
|
|
10,049 |
0 |
|
| Prior
year |
|
|
19,687 |
0 |
|
|
--------- |
--------- |
|
|
|
|
|
|
29,736 |
0 |
|
|
--------- |
--------- |
|
| Profit/(Loss)
after taxation |
|
|
(44,662 |
651 |
|
| Loss
brought forward |
|
(165,409 |
(166,060) |
|
|
--------- |
--------- |
|
| Accumulated
loss carried to balance sheet |
|
(210,071 |
(165,409) |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30,1997 |
|
|
| |
|
NOTE |
1997 |
1996 |
|
|
|
(Rupees in thousand) |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Cash
generated from operations |
|
A |
172,515 |
246,596 |
|
| Financial
charges paid |
|
|
|
(153,904) |
(130,519) |
|
| Taxes
paid |
|
|
(16,192) |
0 |
|
| Decrease
in deferred revenue expenditure |
|
|
20 |
1,929 |
|
|
---------- |
---------- |
|
| Net
cash inflow from operating activities |
|
2,439 |
118,006 |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Fixed
capital expenditure |
|
(13,774) |
(36,634) |
|
| Sale
proceeds of fixed assets |
|
|
5,470 |
436 |
|
|
|
---------- |
---------- |
|
| Net
cash outflow from investing activities |
|
(8,304) |
(36,198) |
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Proceeds
from long term loans |
|
365,000 |
1,804,271 |
|
| Payments
of long term loans |
|
(396,584) |
(98,431) |
|
|
|
|
---------- |
---------- |
|
| Net
cash (outflow)/inflow from financing activities |
|
(30,584) |
81,996 |
|
|
---------- |
---------- |
|
| Net
(decrease)/Increase in cash and cash equivalents |
|
(36,449) |
163,804 |
|
| Cash
and cash equivalents at the beginning of the year |
(91,501) |
(255,305) |
|
|
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at the end of the |
B |
(127,950) |
(91,501) |
|
| year |
|
========== |
========== |
|
|
|
|
|
|
| NOTES
TO THE CASH FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30,1997 |
|
|
|
|
|
1997' |
1996 |
|
|
|
(Rupees in thousand) |
|
| A-
CASH FLOW FROM OPERATING ACTIVITIES |
|
|
| Profit/(Loss)
before taxation |
|
(14,926) |
651 |
|
| Add/(Less)
adjustment for non cash charges |
|
| and
other items |
|
| Depreciation |
|
|
69,569 |
75,758 |
|
| (Profit)/Loss
on sale of fixed assets |
|
(4,932) |
(227) |
|
| Financial
charges |
|
|
157,867 |
120,394 |
|
|
|
|
222,504 |
195,925 |
|
|
---------- |
---------- |
|
| Profit
before working capital changes |
|
207,578 |
196,576 |
|
| Effect
on cash flow due to working capital changes |
|
| (Increase)/Decrease
in current assets |
|
| Stores
and spares |
|
|
|
(554) |
(238) |
|
| Stocks |
|
|
|
(79,060) |
63,838 |
|
| Trade
debts |
|
|
|
3,641 |
4,394 |
|
| Advances,
deposits and prepayments |
|
|
(487) |
7,994 |
|
| Other
receivables |
|
|
|
31,720 |
(32,474) |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
(44,740) |
43,514 |
|
| Increase/(Decrease)
in current liabilities |
|
| Creditors,
accrued and other liabilities |
|
8,911 |
5,795 |
|
| Workers'
profit participation fund |
|
766 |
711 |
|
|
---------- |
---------- |
|
|
|
9,677 |
6,5O6 |
|
|
|
(35,063) |
50,020 |
|
|
---------- |
---------- |
|
| Cash
generated from operations |
|
172,515 |
246,596 |
|
|
========== |
========== |
|
| B-
CASH AND CASH EQUIVALENTS |
|
|
| Cash
and bank balances |
|
5,008 |
7,447 |
|
| Short-term
finances |
|
|
(132,958) |
(98,948) |
|
|
|
---------- |
---------- |
|
|
|
|
(127,950) |
(91,501) |
|
|
|
========== |
========== |
|
|
|
|
|
