| GLOBE TEXTILE MILLS (OE) Ltd.) |
|
|
|
|
|
|
| ANNUAL
REPORT 1997 |
|
|
|
| BOARD
OF DIRECTORS |
|
| MR.
AHMED HAJI HABIB |
|
| MST.
GUL BANO HAJI HABIB |
|
| MR.
M. HANIF AHMED |
|
| MR.
ARSHAD ARIF |
|
| MR.
ZEESHAN ZAFAR |
|
| MISS
FARZEEN FAZL-E-UMER |
|
| MR.
ARIF HAJI HABIB - Chief Executive |
|
|
| COMPANY
SECRETARY |
|
| MR.
ABDUL RAUF MOHAMMED |
|
|
| BANKERS |
|
| HABIB
BANK LIMITED |
|
| MUSLIM
COMMERCIAL BANK LIMITED |
|
|
|
| AUDITORS |
|
| HYDER
BHIMJI & CO., |
|
| Chartered
Accountants |
|
|
|
| REGISTERED
OFFICE |
|
| KARACHI
DOCK LABOUR BOARD BUILDING, |
|
| 4TH
FLOOR, 58, WEST WHARF ROAD, |
|
| KARACHI. |
|
|
| MILLS |
|
| A/6,
S.I.T.E., |
|
| KOTRI. |
|
|
|
| Notice
of Meeting |
|
|
|
|
| NOTICE
is hereby given that the Seventeenth Annual General Meeting of the
Shareholders of Globe |
|
| Textile
Mills (OE) Limited will be held on Tuesday, the 31st March, 1998, at 5:00
p.m. at the Registered Office |
| of
the Company, at4th Floor, Karachi Dock Labour Board Building, 58, West Wharf
Road, Karachi, to transact |
|
| the
following business: |
|
|
| 1.
To confirm the minutes of the Sixteenth Annual General Meeting held on 31st
March, 1997. |
|
|
| 2.
To receive and adopt the Directors' Report and Audited Accounts for the year
ended 30th |
|
| September,
1997, together with the Auditors' Report thereon. |
|
|
|
|
| 3.
To approve the dividend @ Re.0.50 (5%) for the year ended 30th September,
1997 as recommended |
|
| by
the Board of Directors. |
|
|
| 4.
To appoint Auditors and to fix their remuneration. |
|
|
| SPECIAL
BUSINESS |
|
|
| 5.
To consider and pass, if though fit, the following Ordinary Resolutions for
the capitalization of profit |
|
| amounting
to Rs. 2,700,000. |
|
|
| RESOLVED
THAT |
|
|
| i)
A sum of Rs. 2,700,000 out of the reserve for bonus shares be capitalised and
applied to the |
|
| issue
of 270,000 ordinary shares of Rs. 10/- each and allotted fully paid bonus
shares to the |
|
| members
of the Company whose names appear on the members' register on March 26, 1998 |
|
| in
the proportion of fifteen new bonus shares for every hundred ordinary shares
held and that- |
|
| such
new shares shall rank pari passu in all respects with the existing ordinary
shares of the |
|
| Company. |
|
|
|
|
|
| ii)
The members entitled to fraction of shares, as a result of their holding,
shall be given the sale |
|
| proceeds
of their fractional entitlements for which purpose the fraction shall be
consolidated |
|
| into
whole shares and sold on the Karachi Stock Exchange. |
|
|
|
|
| iii)
For the purpose of giving effect to the foregoing, the Chief Executive be and
is hereby |
|
| authorised
to give such directions as may be necessary and as he deems fit to settle any |
|
| questions
or difficulties that may arise in the distribution of said bonus or in the
payment of |
|
| sales
proceeds to the fractions. |
|
|
| 6.
To transact any other business with the permission of the Chair. |
|
|
| A
Statement under Section 160 of the Companies Ordinance, 1984 pertaining to
the Special Business is |
|
| annexed
to this notice. |
|
|
| NOTES: |
|
|
| 1.
The Shares Transfer Book of the Company will remain closed from Friday 27th
March, 1998 to |
|
| Saturday
11th April, 1998 (both days inclusive). Transfer received in order at the
Registered Office |
|
| of
the Company upto the close of business on Thursday, 26th March, 1998 will be
considered in time |
|
| to
be eligible for issue of Bonus Shares to the transferees. |
|
|
| 2.
A member of the Company entitled to attend and to vote at this meeting may
appoint any other |
|
| member
as his/her proxy to attend and to vote instead of him/her. Proxies, in order
to be effective, |
|
| must
be received at the Registered Office of the Company at4th Floor, Karachi Dock
Labour Board |
|
| Building,
58-West Wharf Road, Karachi, duly stamped, signed and witnessed not less than
48 hours |
|
| before
the time of holding the meeting. |
|
|
| 3.
Shareholders are requested to communicate immediately to the Company any
change in their |
|
| addresses. |
|
|
|
| STATEMENT
UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984 |
|
|
| This
statement is annexed to the notice of the Seventeenth Annual General Meeting
of the |
|
| Shareholders
of Globe Textile Mills (OE) Limited to be held on 31st March, 1998 and sets
out the |
|
| material
facts concerning the Special Business to be transacted at the Meeting. |
|
|
| The
Directors have recommended the issue of bonus shares in the proportion of
fifteen new share |
|
| for
every hundred existing ordinary shares held at the close of business on 26th
March, 1998. |
|
|
| The
Directors are interested in this business to the extent of their entitlement
to bonus shares as |
|
| shareholders. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
|
|
| We
have audited the Annexed Balance Sheet of GLOBE TEXTILE MILLS (0E) LIMITED,
as at September |
|
| 30,1997,
and the related Profit and Loss Account and the Statement of Changes in
Financial Position (Cash Flow |
| Statement),
together with the notes forming part thereof, for the year then ended and we
state that we have |
|
| obtained
all the information and explanations which to the best of our knowledge and
belief were necessary |
|
| for
the purpose 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 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 & Loss Account and the Statement of Changes in
Financial |
|
| Position
(Cash Flow Statement), together with the notes forming part thereof, give the |
|
| information
required by the Companies Ordinance, 1984, in the manner so required and |
|
| respectively
give a true and fair view of the state of the Company's affairs as at
September |
|
| 30,1997,
and of the Profit and the Changes in Financial Position (Cash Flow
Statement)for the |
|
| year
then ended; and |
|
|
| (d)
in our opinion, Zakat deductible at source,
undertheZakat&UshrOrdinance,1980, has been |
|
| deducted
and deposited in the Central Zakat Fund established under section 7 of that |
|
| Ordinance. |
|
|
HYDER BHIMJI & CO. |
|
| Karachi:
Feb 27, 1998 |
|
Chartered Accountants |
|
|
|
| Directors'
Report |
|
|
| Your
Directors are pleased to present the Seventeenth Annual Report alongwith the
Audited Accounts |
|
| of
the Company for the year ended 30th September, 1997. |
|
|
| OPERATING
RESULTS: |
|
| Your
Company earned a net profit before taxation of Rs. 5,574,367 during the year
under review as against |
|
| the
net profit before taxation of Rs. 4,908,120 in the preceding year. |
|
|
| The
company produced 5,163,329 kgs of different counts of yarn during the year as
against 3,935,351 kgs |
|
| in
the last year. The Company was able to enhance its profitability on account
of increase in the production |
|
| of
yarn during the year under review. |
|
| Your
Directors are pleased to recommend payment of cash dividend @ Re. 0.50 (5%)
per share and issue |
|
| of
Bonus Shares in proportion of fifteen new shares for every one hundred shares
held as at the close of |
|
| business
on 26th March, 1998. |
|
|
| Accordingly,
following appropriations have been proposed:- |
|
|
|
|
Rupees |
|
|
|
|
|
| Profit
after Taxation |
|
3,176,091 |
|
|
| Add:
Unappropriated Profit |
|
521,877 |
|
|
|
|
|
---------- |
|
|
| Amount
available for appropriation |
|
3,697,968 |
|
|
| Appropriations:- |
|
|
|
| Proposed
Cash Dividend |
|
900,000 |
|
|
| Reserve
for issue of Bonus Shares |
|
2,700,000 |
|
|
|
|
|
---------- |
|
|
|
|
|
3,600,000 |
|
|
|
|
|
---------- |
|
|
| Amount
to be carried forward |
|
97,968 |
|
|
|
|
|
========== |
|
|
|
| BOARD
OF DIRECTORS |
|
| The
term of office of the Directors expired on 31 st March, 1997 and the
following persons were elected |
|
| as
Directors in the last Annual General Meeting:- |
|
|
| 1.
MR. AHMED HAJI HABIB |
|
| 2.
MST. GULBAN0 HAJI HABIB |
|
| 3.
MR. M. HANIF AHMED |
|
| 4.
MISS HUNEZAZAFAR |
|
| 5.
MISS MAHEEN ARIF |
|
| 6.
MISS FARZEEN FAZAL-E-UMER |
|
| 7.
MR. ARIF HAJI HABIB |
|
|
| Mr.
Arif Haji Habib was unanimously re-appointed as the Chief Executive of the
Company for a further period |
|
| of
three years. Ms. Maheen Arif and Ms. Huneza Zafar resigned from the
Directorship of the Company and in |
|
| their
place Mr. Arshad Arif and Mr. Zeeshan Zafar were co-opted to fill the casual
vacancies. |
|
|
| The
Board of Directors welcomes Mr. Arshad Arif and Mr. Zeeshan Zafar and hopes
that the Company would |
|
| be
benefited by their active participation in the management of the Company. |
|
|
| FUTURE
OUTLOOK |
|
| During
the current year, the cotton crop is around 9.00 million bales. The prices of
good quality of |
|
| cotton
for open-end mills range between Rs. 2,000 to Rs. 2,200 per md. The selling
prices of yarn improved in |
|
| the
first four months of the current year. However, the prices of yarn are at
present under pressure. The costs |
| of
other inputs are increasing due to price escalation. However, your Directors
are taking appropriate steps |
|
| to
improve the financial results of the Company for the current year. |
|
|
| AUDITORS: |
|
| The
present auditors, Messrs. Hyder Bhimji & Co., Chartered Accountants,
retire and being eligible, |
|
| offer
themselves for re-appointment. |
|
|
| PATTERN
OF SHAREHOLDINGS: |
|
| A
Statement showing pattern of shareholdings in the Company as on 30th
September, 1997 is given |
|
| at
page no.7 |
|
|
| MANAGEMENT
AND LABOR RELATIONS: |
|
| The
Management-employees relations remained cordial throughout the year. The
Management |
|
| places
on record their appreciation for the dedication and hard work of the
employees ~d workers. |
|
|
|
| PATTERN
OF SHARE - HOLDING |
|
| FORM
- 34 |
|
| PATTERN
OF HOLDING OF THE SHARES HELD BY THE SHAREHOLDERS OF |
|
| GLOBE
TEXTILE MILLS (OE) LIMITED |
|
| AS
AT SEPTEMBER 30, 1997. |
|
|
| No.
of Shareholders |
|
Shareholding |
|
Total shares held |
|
|
| 1 |
From |
1 |
to |
100 |
Shares |
60 |
|
| 20 |
From |
101 |
to |
500 |
Shares |
3,660 |
|
| 1 |
From |
501 |
to |
1000 |
Shares |
720 |
|
| 143 |
From |
1001 |
to |
5000 |
Shares |
243,540 |
|
| 5 |
From |
5001 |
to |
10000 |
Shares |
39,120 |
|
| 14 |
From |
10001 |
to |
15000 |
Shares |
203,760 |
|
| 44 |
From |
15001 |
to |
20000 |
Shares |
741,240 |
|
| 1 |
From |
20001 |
to |
25000 |
Shares |
22,980 |
|
| 2 |
From |
25001 |
to |
30000 |
Shares |
51,360 |
|
| 3 |
From |
30001 |
to |
35000 |
Shares |
97,560 |
|
| 3 |
From |
35001 |
to |
40000 |
Shares |
107,280 |
|
| 1 |
From |
40001 |
to |
45000 |
Shares |
40,500 |
|
| 1 |
From |
65001 |
to |
70000 |
Shares |
65,580 |
|
| 1 |
From |
70001 |
to |
75000 |
Shares |
70,980 |
|
| 1 |
From |
110001 |
to |
115000 |
Shares |
111,660 |
|
| ---------- |
|
---------- |
|
| 241 |
|
|
|
1,800,000 |
|
| ========== |
|
|
|
|
========== |
|
|
|
|
|
|
| Categories
of Shareholders |
Number |
Shares held |
Percentage |
|
|
| Individuals |
|
241 |
1,800,000 |
100.00 |
|
| Investments
companies |
|
- |
- |
- |
|
| Insurance
companies |
|
- |
- |
- |
|
| Joint
Stock companies |
|
- |
- |
- |
|
| Financial
institutions |
- |
- |
- |
|
| Modaraba
companies |
|
- |
- |
- |
|
| Others |
|
- |
- |
- |
|
|
---------- |
---------- |
---------- |
|
|
241 |
1,800,000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
| Balance
Sheet as at September 30, 1997 |
|
|
|
|
|
1997 |
1996 |
|
| CAPITAL
AND LIABILITIES |
|
Note |
Rupees |
Rupees |
|
|
|
|
| CAPITAL
AND RESERVES |
|
|
|
|
|
|
| Share
Capital |
|
|
|
|
Authorised |
|
|
|
| 5,000,000 |
ordinary shares of Rs.10
each |
|
50,000,000 |
50,000,000 |
|
|
Issued, subscribed and
paid-up: |
|
========== |
========== |
|
| 1,000,000 |
ordinary shares of Rs.10
each |
|
|
|
fully paid up issued for
cash |
|
10,000,000 |
10,000,000 |
|
| 800,000 |
ordinary shares of
Rs.10each |
|
|
|
fully paid issued as
bonus shares |
|
8,000,000 |
5,000,000 |
|
|
|
---------- |
---------- |
|
|
|
18,000,000 |
15,000,000 |
|
| Revenue
Reserves |
|
|
22,300,000 |
22,300,000 |
|
| Reserve
for Issue of Bonus Shares |
|
2,700,000 |
3,000,000 |
|
| Unappropriated
profit |
|
|
97,968 |
521,877 |
|
|
|
---------- |
---------- |
|
| Shareholders'
equity |
|
|
43,097,968 |
40,821,877 |
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
|
| SUBJECT
TO FINANCE LEASE |
|
3 |
4,273,990 |
- |
|
|
|
|
| DEFERRED
LIABILITY |
|
|
|
| Deferred
Taxation |
|
|
6,000,000 |
5,700,000 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
---------- |
---------- |
|
| Short
term running finance - Secured |
4 |
46,145,896 |
60,062,064 |
|
| Current
portion of liabilities |
|
|
| against
assets subject to finance lease |
3 |
4,138,798 |
- |
|
| Creditors,
accrued and other liabilities |
5 |
29,248,135 |
26,987,549 |
|
| Provision
for Taxation |
|
|
821,127 |
1,926,338 |
|
| Proposed
Dividend |
|
|
900,000 |
1,500,000 |
|
|
|
|
---------- |
---------- |
|
|
|
|
81,253,956 |
90,475,951 |
|
| CONTINGENCIES |
|
6 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
134,625,914 |
136,997,828 |
|
|
|
|
========== |
========== |
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
|
| FIXED
ASSETS |
|
|
|
|
|
|
| Operating
assets |
|
7 |
46,562,895 |
38,572,063 |
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
2,179,612 |
2,472,804 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
---------- |
---------- |
|
| Stores
and spares |
|
8 |
7,395,692 |
8,230,193 |
|
| Stock-in-trade |
|
9 |
45,226,517 |
58,687,227 |
|
| Trade
debts |
|
10 |
23,091,975 |
5,806,346 |
|
| Advances,
Deposits and prepayments |
11 |
5,848,929 |
22,748,612 |
|
| Cash
and bank balances |
|
12 |
4,320,294 |
480,583 |
|
|
|
|
---------- |
---------- |
|
|
|
|
85,883,407 |
95,952,961 |
|
|
|
|
---------- |
---------- |
|
|
|
|
134,625,914 |
136,997,828 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Note:
The annexed notes form an integral part of these accounts. |
|
|
|
| Profit
and Loss Account |
|
| for
the year ended September 30, 1997 |
|
|
|
|
|
1997 |
1996 |
|
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| SALES
& SERVICES |
|
13 |
419,655,183 |
303,114,279 |
|
| Cost
of sales & services |
|
14 |
381,346,390 |
277,450,218 |
|
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT |
|
|
38,308,793 |
25,664,061 |
|
|
|
|
| OPERATING
EXPENSES |
|
|
---------- |
---------- |
|
| Administrative |
|
15 |
5,884,843 |
4,946,538 |
|
| Selling |
|
16 |
1,818,266 |
1,317,946 |
|
| Financial |
|
17 |
24,737,929 |
14,376,566 |
|
|
|
|
---------- |
---------- |
|
|
|
|
32,441,038 |
20,641,050 |
|
|
|
|
---------- |
---------- |
|
| OPERATING
PROFIT |
|
|
5,867,755 |
5,023,011 |
|
| Add: Other income |
18 |
- |
143,431 |
|
|
|
|
---------- |
---------- |
|
|
|
|
5,867,755 |
5,166,442 |
|
| Less:
Workers' Profit Participation Fund |
|
293,388 |
258,322 |
|
|
|
|
|
|
|
---------- |
---------- |
|
| NET
PROFIT BEFORE TAXATION |
|
|
5,574,367 |
4,908,120 |
|
| Less:
Provision for Taxation |
|
19 |
2,398,276 |
2,115,571 |
|
|
|
|
---------- |
---------- |
|
| NET
PROFIT AFTER TAXATION |
|
|
3,176,091 |
2,792,549 |
|
| Unappropriated
profit brought forward |
|
521,877 |
2,229,328 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
3,697,968 |
5,021,877 |
|
|
|
|
| APPROPRIATIONS |
|
|
|
---------- |
---------- |
|
| Reserve
for Issue of Bonus Shares (15%) (1996: 20%) |
2,700,000 |
3,000,000 |
|
| Proposed
Dividend Re. 0.50 (1996: Re. 1.00) per share |
900,000 |
1,500,000 |
|
|
|
|
|
---------- |
---------- |
|
|
|
3,600,000 |
4,500,000 |
|
|
|
---------- |
---------- |
|
| Unappropriated
Profit carried forward |
|
97,968 |
521,877 |
|
|
|
========== |
========== |
|
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
| Cash
Flow Statement |
|
| for
the year ended September 30, 1997 |
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Profit
before taxation |
|
|
5,574,367 |
4,908,120 |
|
| Adjustments
for |
|
|
|
---------- |
---------- |
|
| Depreciation |
|
|
|
5,364,308 |
4,529,667 |
|
| (Gain)
on sale of fixed assets |
|
- |
(143,431) |
|
| Interest
Income |
|
(3,433,984) |
(4,550,386) |
|
| Interest
expenses |
|
|
27,903,300 |
18,702,462 |
|
|
|
---------- |
---------- |
|
|
|
29,833,624 |
18,538,312 |
|
|
|
---------- |
---------- |
|
|
|
35,407,991 |
23,446,432 |
|
| MOVEMENT
IN: |
|
|
|
|
| Working
capital (see note No. 23) |
|
29,339,558 |
29,253,571 |
|
| Long
term deposit |
|
293,192 |
1,729,500 |
|
|
|
---------- |
---------- |
|
| Cash
Generated From Operations |
|
65,040,741 |
54,429,503 |
|
| Payment
for: |
|
|
|
|
| Interest |
|
|
(41,073,013) |
(11,605,751) |
|
| Tax |
|
|
(3,203,487) |
(626,601) |
|
|
|
---------- |
---------- |
|
| Net
cash from operating activities |
|
20,764,241 |
42,197,151 |
|
|
|
---------- |
---------- |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Capital
expenditure |
|
(855,135) |
(2,428,092) |
|
| Proceeds
from disposal of fixed assets |
|
- |
167,000 |
|
| Interest
received |
|
3,433,984 |
4,550,386 |
|
|
|
---------- |
---------- |
|
| Net
cash from financing activities |
|
2,578,849 |
2,289,294 |
|
|
|
|
| CASH
FROM FINANCING ACTIVITIES |
|
|
---------- |
---------- |
|
| Repayment
of instalments of lease finance |
|
(4,087,212) |
- |
|
| Dividend |
|
|
(1,500,000) |
- |
|
|
|
---------- |
---------- |
|
| Net
cash (used in)/from financing activities |
|
(5,587,212) |
- |
|
| Net
Increase in: |
|
---------- |
---------- |
|
| Cash
and Cash Equivalents |
|
17,755,878 |
44,486,445 |
|
| Cash
and Cash Equivalents at start |
|
(59,581,481) |
(104,067,926) |
|
|
|
---------- |
---------- |
|
| Cash
and Cash Equivalents at end (see note No. 24) |
(41,825,603) |
(59,581,481) |
|
|
|
========== |
========== |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1997 |
|
|
| 1.STATUS
AND NATURE OF BUSINESS |
|
|
| The
Company was incorporated on 29th December, 1980 as a private limited company
and subsequently |
|
| converted
into a public limited company on 14th July, 1981. Its shares are quoted in
Stock Exchanges in Pakistan. |
| The
principal activity of the Company is manufacturing and selling of yarn. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.01
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention.
Modifications, if any, are |
|
| specifically
stated. |
|
|
| 2.02
Retirement benefits |
|
| The
Company operates a funded provident fund scheme for all the workers and staff
members eligible to |
|
| the
benefit. |
|
|
| 2.03
Taxation |
|
| Provision
for current taxation is calculated in accordance with the provisions of the
Income Tax Ordinance |
|
| 1979. |
|
|
| The
Company accounts for deferred taxation on all material timing differences
using liability method, |
|
| except
where the timing differences are not likely to reverse in the foreseeable
future. |
|
|
| 2.04
Fixed Assets |
|
| Fixed
assets are stated at cost less accumulated depreciation except lease-hold
land, and capital work- |
|
| in-progress
which are stated at cost. |
|
|
| Depreciation
is calculated on diminishing balance method at the rate specified in the
fixed assets note |
|
| whereby
the cost of asset will be written off over its estimated useful life. |
|
|
| Depreciation
on additions is charged for full year irrespe |
