| Globe Textile Mills Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 1998 |
|
|
|
| BOARD
OF DIRECTORS |
|
|
| MR.
AHMED HAJI HABIB - Chief Executive |
|
| MR.
ARIF HAJI HABIB |
|
| MST.
GUL BANO HAJI HABIB |
|
| MR.
M. HANIF AHMED |
|
| MR.
ARSHAD ARIF |
|
| MISS
FARZEEN FAZL-E-UMER |
|
| MR.
ZEESHAN ZAFAR |
|
|
| COMPANY
SECRETARY |
|
| 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 |
|
| HX/2,
SCHEME NO. 4., |
|
| LANDHI,
KARACHI. |
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|
|
|
| Notice
of Meeting |
|
|
| NOTICE
is hereby given that the Thirty-first Annual General Meeting of the
Shareholders of Globe Textile |
|
| Mills
Limited will be held on Friday, the 19th March, 1999 at 4:00 p.m., at the
Registered Office of the |
|
| Company
at 4th Floor, Karachi Dock Labour Board Building, 58, West Wharf Road,
Karachi, to transact the |
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| following
business: |
|
|
| 1.
To confirm the minutes of the Thirtieth Annual General Meeting held on 31st
March, 1998. |
|
|
|
|
| 2.
To receive and adopt the Directors' Report and Audited Accounts for the year
ended 30th |
|
| September,
1998 together with the Auditors' Report thereon. |
|
|
|
|
|
| 3.
To elect seven Directors, as fixed by the Board of Directors under Section
178(1) of the Companies |
|
| Ordinance,
1984 for a period of three years in place of the following directors:- |
|
|
| 1.
Mr. Ahmed Haji Habib |
|
2. Mr. Arif Haji Habib |
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| 3.
Mst. Gul Bano Haji Habib |
|
4. Mr. M. Hanif Ahmed |
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| 5.
Mr. Arshad Arif |
|
6. Miss Farzeen
Fazl-e-Umer |
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| 7.
Mr. Zeeshan Zafar |
|
|
| 4.
To approve payment of Dividend @ Re 0.50 (5%) for the year ended 30th
September 1998, as |
|
| recommended
by the Board of Directors. |
|
|
| 5.
To Appoint Auditors and fix their remuneration. |
|
|
| SPECIAL
BUSINESS |
|
|
| 6.
To consider and pass, if thought fit, the following Ordinary Resolutions for
the capitalization |
|
| of
Rs. 6,642,598. |
|
|
|
|
| Resolved that |
|
|
| i)
a sum of Rs. 6,642,598 out of the capital reserve be capitalised and applied
to the issue of 664,260 |
|
| 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 11, 1999 in the
proportion of |
|
| ten
new bonus shares for every one 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 holdings,
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 difficulty |
|
| 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. |
|
|
|
|
|
|
|
By order of the Board |
|
|
|
|
|
|
|
|
|
ABDUL RAUF MOHAMMED |
|
| Karachi:
February 19, 1999 |
|
|
COMPANY SECRETARY |
|
|
|
| NOTES: |
|
|
|
| 1.
The Share Transfer Book of the Company will remain closed from Friday, 12th
March, 1999 to |
|
| Thursday,
25th March, 1999 (both days inclusive). Transfers received in order at the
Registered |
|
| Office
of the Company upto the close of business on Thursday, 11th March, 1999 will
be considered |
|
| in
time to be eligible for the payment of dividend and 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 at 4th 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 Thirty-first Annual General Meeting
of the |
|
| Shareholders
of Globe Textile Mills Limited to be held on 19th March, 1999 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 ten
new shares |
|
| for
every hundred existing ordinary shares held at the close of business on 11th
March, 1999. |
|
|
| The
Directors are interested in this business to the extent of their entitlements
to bonus shares as |
|
| shareholders. |
|
|
|
|
|
| Directors'
Report |
|
|
| Your
Directors are pleased to present the Thirty-first Annual Report alongwith
with the Audited Accounts of the |
|
| Company
for the year ended 30th September,1998. |
|
|
| FINANCIAL
RESULT |
|
| The
Company has earned an operating profit of Rs. 33.764 million in the year
under review as against profit of Rs. |
|
| 38.160
million in the last year. The net profit, after taking into account other
income/charges, amounted to Rs.33.509 |
|
| million
as against Rs. 39.701 million in the preceding year. |
|
|
| The
production of yarn of various counts increased from 21.039 million lbs in the
last year to 23.160 million lbs in |
|
| the
year under consideration. |
|
|
| The
Directors are pleased to report that during the year under review, export of
yarn increased to Rs. 504.237 million |
|
| as
against Rs. 354.927 million in the preceding year. |
|
|
| The
prices of good quality of cotton enhanced during the year under review. The
cost of other inputs also increased. |
|
| However,
the prices of yarn increased marginally. |
|
|
| DIVIDEND |
|
| Your
Directors are pleased to recommend payment of cash dividend @ Re. 0.50 (5%)
per share and issue of Bonus |
|
| Shares
in proportion of ten new shares for every hundred shares held at the close of
business on 11th March, 1999. |
|
| The
bonus shares shall be issued out of the capital reserve. |
|
|
| Accordingly,
following appropriations have been proposed:- |
|
|
|
|
|
(Rupees) |
|
|
|
|
|
|
| Profit
after Taxation |
|
6,138,303 |
|
| Add:
Accumulated Profit |
|
29,206 |
|
|
|
|
---------- |
|
| Amount
available for appropriations |
|
6,167,509 |
|
|
|
|
|
|
| Appropriations:- |
|
| Proposed
Cash Dividend |
|
3,321,299 |
|
| Transfer
to Revenue Reserve |
|
2,500,000 |
|
|
|
|
---------- |
|
|
|
|
5,821,299 |
|
|
|
|
---------- |
|
| Unappropriated
amount to be carried forward |
|
346,210 |
|
|
|
|
========== |
|
|
| CERTIFICATE
UNDER ISO-9002 |
|
| Your
management is pleased to report that the Company was granted ISO-9002
certificate during the year under |
|
| review.
The management is striving its best to improve the quality of yarn to enhance
the exports over 50% of the |
|
| total
production. |
|
|
| BOARD
OF DIRECTORS |
|
| The
term of present Directors ceases on 31st march, 1999. The Board of Directors
has fixed the number of Directors |
|
| to
be elected at seven, as required under section 178(1) of the Companies
Ordinance, 1984. The present Directors |
|
| retire
but are eligible for re-election. |
|
|
| FUTURE
OUT-LOOK |
|
| Initially,
the government's forecast for current year's cotton crop was over 11.10
million bales which was |
|
| subsequently
revised at 9.00 million bales. The Government allowed export of cotton on the
basis of initial estimation. |
|
| The
cotton is also of inferior quality and some of the mills have started
importing cotton for their day to day cotton |
|
| requirement.
The prices of cotton range from Rs. 2,200 to Rs. 2,400 per md. |
|
|
| It
would not be out of place to mention that for the export of value-added
textile products, good quality of cotton free |
|
| from
contamination and superb ginning is very essential and therefore it is high
time that the Government should |
|
| concentrate
not only on enhancing the cotton crop but also to improve the quality of
cotton. There is a dire need to |
|
| take
immediate appropriate steps to improve the quality of cotton as our cotton is
of inferior quality as compared |
|
| to
other cotton growing countries, which results in lower yield and higher cost
of input. |
|
|
| The
cost of other inputs have also increased due to the prevailing inflationary
trend in the country. |
|
|
| The
Government's cherished goal of enhancing the exports can only be achieved if
necessary facilities are extended |
|
| to
the exporters including reduction in the rate of mark-up to 8%. The present
exorbitant rate of mark-up is prohibitive |
|
| and
renders the local textile industry incompatible vis-a-vis other textile
exporting countries. |
|
|
| A
huge amount of costly working capital of most of the textile units is blocked
in the sales tax refund for which there |
|
| is
an urgent need to evolve a mechanism for its prompt refund. |
|
|
| YEAR
2000 COMPLIANCE OF COMPUTER SYSTEM |
|
| The
Company has taken appropriate measures to comply with the year 2000 problem
and the Directors are pleased |
|
| to
report that the Company would be geared well in time for Y2K. |
|
|
| EARNING
PER SHARE |
|
| The
net earning per share after providing for taxation was Re. 0.92 for the year
under review as against Rs. 3.03 in |
|
| the
last 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, 1998 is at page no 24. |
|
|
| MANAGEMENT
AND LABOUR 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 and
workers. |
|
|
|
|
|
On behalf of the Board |
|
|
|
|
AHMED HAJI HABIB |
|
| Karachi:
February 19, 1999 |
|
|
Chief Executive |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the Annexed Balance Sheet of GLOBE TEXTILE MILLS LIMITED, as at
September 30, 1998 |
|
| and
the related Profit and Loss Account and the Statement of Changes in Financial
Position (Cash Flow Statement), |
|
| together
with 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 30th September, 1998, 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, under the Zakat 8 Ushr Ordinance,
1980 has been deducted |
|
| and
deposited in the Central Zakat Fund established under section 7 of that
Ordinance. |
|
|
|
|
|
HYDER BHIMJI & CO., |
|
| Karachi:
February 19, 1999 |
|
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at September 30, 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
|
Note |
Rupees |
Rupees |
|
| CAPITAL
AND LIABILITIES |
|
|
|
|
|
|
| CAPITAL
AND RESERVES |
|
|
|
|
|
|
| Share Capital |
|
|
|
| Authorised |
|
|
|
| 10,000,000
ordinary shares of Rs.10 each |
|
100,000,000 |
100,000,000 |
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up: |
|
3 |
66,425,988 |
57,761,724 |
|
|
|
|
| Capital
Reserve |
|
4 |
12,173,722 |
18,816,320 |
|
| Revenue
Reserves- General |
|
5 |
65,500,000 |
63,000,000 |
|
| Reserve
for Issue of Bonus Shares |
|
|
6,642,598 |
8,664,259 |
|
| Unappropriated
Profit |
|
|
346,210 |
29,206 |
|
|
|
|
---------- |
---------- |
|
| SHAREHOLDERS'
EQUITY |
|
|
151,088,518 |
148,271,509 |
|
|
|
|
|
| REDEEMABLE
CAPITAL |
|
6 |
245,133,299 |
247,150,234 |
|
|
|
|
| LONG
TERM LOANS |
|
7 |
- |
14,316,438 |
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
| SUBJECT
TO FINANCE LEASE |
|
8 |
31,555,609 |
58,520,512 |
|
|
|
|
|
| DEFERRED
LIABILITY |
|
|
|
| Deferred
taxation |
|
|
58,400,000 |
36,900,000 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term running finance- Secured |
|
9 |
164,804,244 |
93,165,918 |
|
| Current
maturity of redeemable capital |
|
|
|
| and
long term loans |
|
6-7 |
79,215,826 |
37,711,649 |
|
| Current
obligation under finance leases |
|
8 |
40,831,373 |
40,214,687 |
|
| Creditors,
accrued and other liabilities |
|
10 |
102,694,727 |
137,227,652 |
|
| Provision
for taxation |
|
|
3,535,326 |
4,991,386 |
|
| Proposed
dividend |
|
|
3,321,299 |
2,888,086 |
|
|
|
|
---------- |
---------- |
|
|
|
|
394,402,795 |
316,199,378 |
|
| COMMITMENT |
|
11 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
880,580,221 |
821,358,071 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
1998 |
1997 |
|
|
|
Note |
Rupees |
Rupees |
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
|
| FIXED ASSETS |
|
|
|
| Operating
assets |
|
12 |
472,414,508 |
504,623,248 |
|
| Work-in-progress |
|
|
5,894,406 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
478,308,914 |
504,623,248 |
|
| LONG
TERM DEPOSITS |
|
|
13,338,684 |
18,349,904 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
13 |
49,257,705 |
48,729,129 |
|
| Stock-in-trade |
|
14 |
199,761,884 |
157,693,938 |
|
| Trade debts |
|
15 |
116,679,460 |
51,472,555 |
|
| Deposits,
advances & prepayments |
|
16 |
17,927,059 |
32,570,206 |
|
| Cash
and bank balances |
|
17 |
5,306,515 |
7,919,091 |
|
|
|
|
---------- |
---------- |
|
|
|
|
388,932,623 |
298,384,919 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
880,580,221 |
821,358,071 |
|
|
|
|
|
========== |
========== |
|
|
| Note:
The annexed notes form an integral part of these accounts. |
|
|
| Karachi: |
|
AHMED HAJI HABIB |
|
Chief Executive |
|
| February 19, 1999 |
|
ARIF HAJI HABIB |
|
Director |
|
|
|
| Profit
and Loss Account |
|
| for
the year ended September 30, 1998 |
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| SALES
& SERVICES |
|
18 |
1,174,211,098 |
1,076,890,178 |
|
| Cost
of sales G services |
|
19 |
1,001,381,141 |
907,891,791 |
|
|
|
|
---------- |
---------- |
|
| GROSS PROFIT |
|
|
|
172,829,957 |
168,998,387 |
|
| OPERATING
EXPENSES |
|
|
| Administrative |
|
20 |
14,544,597 |
12,213,277 |
|
| Selling |
|
21 |
17,001,574 |
11,956,013 |
|
| Financial |
|
22 |
107,518,847 |
106,669,064 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
139,065,018 |
130,838,354 |
|
|
|
|
---------- |
---------- |
|
| OPERATING
PROFIT |
|
|
33,764,939 |
38,160,033 |
|
|
|
|
| Other income |
|
23 |
1,508,070 |
3,630,248 |
|
|
|
|
---------- |
---------- |
|
|
|
|
35,273,009 |
41,790,281 |
|
| Other Charges |
|
24 |
1,763,651 |
2,089,514 |
|
|
|
|
---------- |
---------- |
|
| NET
PROFIT BEFORE TAXATION |
|
|
33,509,358 |
39,700,767 |
|
| Taxation |
|
25 |
27,371,055 |
22,202,028 |
|
|
|
|
---------- |
---------- |
|
| NET
PROFIT AFTER TAXATION |
|
6,138,303 |
17,498,739 |
|
| Unappropriated
profit brought forward |
|
29,206 |
82,812 |
|
|
|
---------- |
---------- |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
6,167,509 |
17,581,551 |
|
|
|
|
| Appropriations |
|
|
|
| Transfer
to Revenue Reserve |
|
2,500,000 |
6,000,000 |
|
| Reserve
for Bonus Issue |
|
- |
8,664,259 |
|
| Proposed
Dividend @ Re. 0.50 |
|
|
|
| (1997:
Rs. 0.50) per share |
|
3,321,299 |
2,888,086 |
|
|
|
---------- |
---------- |
|
|
|
5,821,299 |
17,552,345 |
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
346,210 |
29,206 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
| Karachi: |
|
AHMED HAJI HABIB |
|
Chief Executive |
|
| February 19, 1999 |
|
ARIF HAJI HABIB |
|
Director |
|
|
|
|
|
|
| Statement
of Changes in Financial Position |
|
| (Cash
Flow Statement) |
|
| for
the year ended September 30, 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
Note |
Rupees |
Rupees |
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
| Profit
before taxation |
|
|
|
33,509,358 |
39,700,767 |
|
|
|
| Adjustments
for |
|
|
|
|
|
|
| Depreciation |
|
|
|
53,070,110 |
56,744,724 |
|
|
|
| (Profit)
on disposal of fixed assets |
|
|
(849,184) |
(84,417) |
|
|
|
| Interest
Income |
|
|
- |
(364,118) |
|
|
| Interest
Expenses |
|
|
106,601,307 |
105,471,573 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
|
|
158,822,233 |
161,767,762 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
192,331,591 |
201,468,529 |
|
| Movement in: |
|
|
|
|
|
| Working
Capital |
|
29 |
(123,586,028) |
(74,299,008) |
|
| Long
term deposit |
|
|
5,011,220 |
(8,132,015) |
|
|
|
|
---------- |
---------- |
|
| Cash
Generated From Operations |
|
|
73,756,783 |
119,037,506 |
|
|
|
|
|
|
| Payment for: |
|
|
|
| Interest |
|
|
|
(110,896,333) |
(118,444,365) |
|
| Tax paid |
|
|
|
(7,327,115) |
(11,086,591) |
|
|
|
|
---------- |
---------- |
|
| Net
cash (used in)operating activity |
|
|
(44,466,665) |
(10,493,450) |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Capital
expenditures |
|
|
(14,193,422) |
(19,915,999) |
|
| Proceeds
from disposal of fixed assets |
|
|
2,545,500 |
90,000 |
|
|
|
| Interest
received |
|
|
- |
364,118 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
| Net
cash used towards investing activities |
|
(11,647,922) |
(19,461,881) |
|
|
|
|
|
|
|
|
|
|
| CASH
FROM FINANCING ACTIVITIES |
|
|
|
|
| Repayment
of long term loans |
|
|
(37,732,262) |
(94,279,123) |
|
|
|
| Repayment
of installment of finance lease |
|
|
(40,419,033) |
(24,520,884) |
|
|
|
| Increase
in long term finances |
|
|
62,903,066 |
168,304,473 |
|
|
|
| Dividend |
|
|
|
(2,888,086) |
(4,813,477) |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
| Net
cash used towards financing activities |
|
(18,136,315) |
44,690,989 |
|
|
|
| Net
Increase in: |
|
|
|
|
|
| Cash
and Cash Equivalents |
|
|
(74,250,902) |
14,735,658 |
|
|
|
| Cash
and Cash Equivalents at start |
|
|
(85,246,827) |
(99,982,485) |
|
|
|
|
|
|
---------- |
---------- |
|
| Cash
and Cash Equivalents at end |
|
30 |
(159,497,729) |
(85,246,827) |
|
|
|
|
========== |
========== |
|
|
| Karachi: |
|
|
AHMED HAJI HABIB |
|
Chief Executive |
|
| February 19, 1999 |
|
ARIF HAJI HABIB |
|
Director |
|
|
|
|
|
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED |
|
| SEPTEMBER
30, 1998 |
|
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| The
Company was incorporated on 17th November, 1967 as a Public Limited Company.
Its shares are quoted in |
|
| Karachi
and Lahore Stock Exchanges. 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 |
|
