| Gul Ahmed Textile Mills Limited |
|
|
|
|
|
|
| Annual
Report 1998 |
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|
| CONTENTS |
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|
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
IQBAL ALI MOHAMMED -
Chief Executive |
|
|
|
|
RAZI-UR-RAHMAN KHAN -
(NIT) |
|
|
|
|
BASHIR H. ALl MOHAMMED |
|
|
|
|
GHULAM HAJI ALl MOHAMMED |
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|
JAVAID IQBAL |
|
|
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|
ZAIN BASHIR |
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|
|
|
ZIAD BASHIR |
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| COMPANY
SECRETARY |
|
MOHAMMED HUSSAIN, FCA |
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| BANKERS |
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ABN AMRO BANK NV |
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AMERICAN EXPRESS BANK
LIMITED |
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ANZ GRINDLAYS BANK |
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BANK AL-HABIB LIMITED |
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BANK OF AMERICA NT &
SA |
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CITIBANK, N.A. |
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DEUTSCHE BANK AG |
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HABIB BANK AG ZURICH |
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HABIB BANK LIMITED |
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SOCIETE GENERALE THE FIB |
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|
STANDARD CHARTERED BANK |
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| AUDITORS |
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|
HYDER BHIMJI & CO. |
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|
Chartered Accountants |
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| REGISTERED
OFFICE |
|
PLOT NO. 82, |
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|
MAIN NATIONAL HIGHWAY, |
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|
LANDHI, KARACHI-75120 |
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| SHARES
DEPARTMENT |
|
PLOT NO. HT/3A, |
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LANDHI INDUSTRIAL AREA, |
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KARACHI-75120 |
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| MILLS |
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LANDHI INDUSTRIAL AREA, |
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KARACHI-75120 |
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| NOTICE
OF MEETING |
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|
| NOTICE
is hereby given that the 46th Annual General Meeting of the Shareholders of
Gul Ahmed Textile Mills |
|
| Limited
will be held at Avari Towers, 242, Fatima Jinnah Road, Karachi, on Wednesday
March 31, 1999 at 10:00 |
| A.M.
to transact the following business: |
|
|
| 1.
To receive and adopt the Directors' Report and Audited Accounts for the year
ended |
|
| September
30, 1998 and Auditors' Report thereon. |
|
|
|
|
| 2.
To approve the payment of cash dividend @ 17.5% as recommended by the Board. |
|
|
|
|
| 3.
To elect seven Directors as fixed by the Board for a term of three years, in
accordance with the |
|
| provisions
of Section 178 of the Companies Ordinance, 1984, in the place of the
following retiring |
|
| Directors: |
|
|
|
|
|
| 1.
Mr. Iqbal Alimohammed |
2. Mr. Razi-ur-Rahman
Khan - (NIT) |
|
| 3.
Mr. Bashir H. Alimohammed |
4. Mr. Ghulam Haji
Alimohammed |
|
| 5.
Mr. Javaid Iqbal |
|
6. Mr. Zain Bashir |
|
| 7.
Mr. Ziad Bashir |
|
|
| 4.
To appoint Auditors and fix their remuneration. |
|
|
| 5.
To transact any other ordinary business as may be placed before the meeting
with the permission |
|
| of
the Chairman. |
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|
By Order of the Board |
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| Karachi: |
|
|
BASHIR H. ALl MOHAMMED |
|
| February
22, 1999 |
|
|
Director |
|
|
| NOTES: |
|
|
| 1.
Share Transfer Books of the Company will remain closed from March 24, 1999 to
March 31,1999 |
|
| (both
days inclusive). |
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|
|
|
|
| 2.
A member entitled to vote at the meeting may appoint a proxy. Proxies in
order to be effective, must |
|
| be
received at the Registered Office of the Company duly stamped and signed not
later than 48 |
|
| hours
before the meeting. |
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|
|
| 3.
A proxy must be a member of the Company. |
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| 4.
Shareholders are requested to immediately notify the change of address, if
any. |
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|
|
| DIRECTORS'
REPORT |
|
|
| Your
Directors are pleased to present the 46th Annual Report and the audited
accounts for the year ended |
|
| September
30, 1998. |
|
|
| OPERATING
RESULTS |
|
|
|
|
Rs. 000s |
|
| Operating
results of the Company are noted below: |
|
|
| Net
profit after providing depreciation |
|
| of
Rs. 135.081 million amounts to |
|
111,557 |
|
| Less:
Provision for taxation |
|
17,048 |
|
|
|
|
---------- |
|
| Profit
after tax |
|
|
94,509 |
|
| Add:
Unappropriated profit brought forward |
|
2,705 |
|
|
|
|
---------- |
|
| Amount
available for appropriation |
|
97,214 |
|
|
|
|
========== |
|
|
|
|
| Appropriations |
|
|
| Proposed
dividend |
|
|
50,095 |
|
| General
reserve |
|
|
45,000 |
|
| Amount
carried forward |
|
|
2,119 |
|
|
---------- |
|
|
|
97,214 |
|
|
|
========== |
|
|
| Your
Company has managed to achieve growth in sales of 10% and profit before tax
has increased to |
|
| Rs.
111.557 million from Rs. 81.423 million. |
|
|
| Net
earning per share works out to Rs. 3.30. |
|
|
| DIVIDEND |
|
| Your
Directors are pleased to recommend cash dividend @ 17.5% that is Rs. 1.75 per
share. |
|
|
| FUTURE
PROSPECTS |
|
| Balancing,
modernisation and replacement programme which was started last year has, at
the time of writing |
|
| this
report, been completed. |
|
|
| In
today's world, technology is fast changing and it is very important to
keep-up with the changes. Management |
| is
alert to these technological advances. Upgrading of the plant and equipment
is now a continuous process |
|
| and
no longer a one time affair to be taken up after every few years. |
|
|
| Current
world economic scenario is not very encouraging and Pakistan's economy cannot
remain isolated from |
|
| any
unfavourable economic changes in the world economy. It is however expected
that the economy will move |
|
| forward
after the conclusion of the agreements with the IMF, World Bank and other
multilateral agencies and |
|
| consequent
easing of pressure on the foreign exchange reserves. |
|
|
| At
the same time implications of the globalisation, a process which is
irreversible, have to be managed |
|
| successfully. |
|
|
| We
on our part are continuing with efforts to reduce any adverse impacts of
these factors and have a positive |
| outlook
for the future. |
|
|
| Your
Company is aware of the Year 2000 problem relating to its computer based
systems. All hardware, |
|
| software
and applications have been investigated and work needed is in progress. By
September 1999, the end |
|
| of
current fiscal year, we expect all systems would be Year 2000 compliant. |
|
|
| BOARD
OF DIRECTORS |
|
| In
accordance with the provisions of Section 178 of the Companies Ordinance,
1984, election of the Directors |
| will
be held at the forthcoming Annual General Meeting. The number of Directors
remains unchanged at seven. |
|
|
| During
the course of the year Mr. A. Latif Valimohammed resigned from the Board and
was replaced |
|
| by
Mr. Ziad Bashir. |
|
|
| The
Board while welcoming Mr. Ziad Bashir wishes to place on record its thanks to
Mr. A. Latif Valimohammed. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| A
statement showing the pattern of shareholding in the Company as at September
30, 1998 is included in this |
|
| report. |
|
|
| AUDITORS |
|
| The
present auditors Hyder Bhimji & Co., Chartered Accountants, retire and
offer themselves for re-appointment. |
|
| EMPLOYEES'
RELATIONS |
|
| The
Board is pleased to report that the workers and the staff management
relations remained cordial and |
|
| wishes
to express its deep appreciation for the commitment and hard work put in by
the employees at all levels. |
|
|
|
For and on behalf of the Board |
|
|
|
|
|
|
|
|
| Karachi: |
|
|
IQBAL ALlMOHAMMED |
|
|
| February
22, 1999 |
|
Chief Executive |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of GUL AHMED TEXTILE MILLS LIMITED as
at September 30, |
|
| 1998
and the related Profit and Loss Account and 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 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; |
|
|
|
| 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, 1998 and of the profit and the cash flows for the year then ended; and |
|
|
|
|
| (d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was deducted |
|
| by
the Company and deposited in the Central Zakat Fund established under Section
7 of that |
|
| Ordinance. |
|
|
|
|
|
|
|
HYDER BHIMJI & CO. |
|
| Karachi: |
|
|
Chartered Accountants |
|
| February
22, 1999 |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 1999 |
|
|
|
|
1998 |
1997 |
|
|
Note |
Rs. 000s |
|
|
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
capital |
|
500,000 |
500,000 |
|
| 50,000,000
ordinary shares of Rs.10 each |
|
|
|
|
| Issued,
subscribed and paid-up capital |
3 |
286,260 |
286,260 |
|
| Reserves |
|
|
4 |
471,086 |
426,086 |
|
| Unappropriated
profit |
|
|
2,119 |
2,705 |
|
|
|
|
---------- |
---------- |
|
|
|
|
759,465 |
715,051 |
|
|
|
|
|
| REDEEMABLE CAPITAL |
|
5 |
63,147 |
90,881 |
|
|
|
|
|
|
| DEBENTURES
AND LONG TERM LOANS |
|
|
|
|
|
|
|
| For
operations |
|
6 |
447,243 |
487,767 |
|
| For hedging |
|
7 |
83,209 |
272,774 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
530,452 |
760,541 |
|
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
|
| Taxation |
|
8 |
46,470 |
46,470 |
|
| Gratuity |
|
|
15,650 |
12,937 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
62,120 |
59,407 |
|
| CURRENT
LIABILITIES AND PROVISIONS |
|
|
|
|
|
|
|
|
| Short
term running finance |
|
9 |
1,312,241 |
1,271,285 |
|
| Current
maturity of redeemable capital, |
|
|
|
| debentures
and long term loans |
|
10 |
228,398 |
149,658 |
|
| Creditors
and accrued liabilities |
|
11 |
286,955 |
268,976 |
|
| Other
liabilities |
|
12 |
1,910 |
1,078 |
|
| Provision
for taxation - net |
|
|
- |
2,459 |
|
| Proposed
dividend |
|
|
50,095 |
35,782 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,879,599 |
1,729,238 |
|
| CONTINGENT
LIABILITIES AND COMMITMENTS |
13 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
3,294,783 |
3,355,118 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Note |
Rs.000s |
|
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
|
|
|
|
|
| Operating
assets |
|
14 |
1,298,560 |
1,125,225 |
|
| Capital
work-in-progress |
|
15 |
11,929 |
142,782 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,310,489 |
1,268,007 |
|
|
|
|
|
| LONG
TERM INVESTMENT |
|
16 |
50 |
50 |
|
| LONG
TERM LOANS AND ADVANCES |
|
17 |
2,221 |
177 |
|
| LONG
TERM DEPOSITS |
|
18 |
93,560 |
312,504 |
|
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
19 |
79,967 |
75,080 |
|
| Stock-in-trade |
|
20 |
835,019 |
1,160,498 |
|
| Trade debts |
|
21 |
573,347 |
436,721 |
|
| Loans,
advances, prepayments and |
|
|
|
| other
receivables |
|
22 |
107,860 |
94,416 |
|
| Cash
and bank balances |
|
23 |
292,270 |
7,665 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,888,463 |
1,774,380 |
|
|
|
|
---------- |
---------- |
|
|
|
|
3,294,783 |
3,355,118 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
IQBAL ALI MOHAMMED |
|
|
BASHIR H. ALI MOHAMMED |
|
|
Chief Executive |
|
Director |
|
|
|
|
|
|
|
|
| PROFIT
AND Loss ACCOUNT |
|
|
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1998 |
|
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Note |
Rs. 000s |
|
|
|
|
|
| Sales |
|
24 |
3,403,185 |
3,091,856 |
|
| Cost
of sales |
|
25 |
2,815,424 |
2,548,596 |
|
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT |
|
|
587,761 |
543,260 |
|
|
|
|
---------- |
---------- |
|
| Administrative
expenses |
|
26 |
121,679 |
107,687 |
|
| Selling
expenses |
|
27 |
67,404 |
55,325 |
|
|
|
|
---------- |
---------- |
|
|
|
|
189,083 |
163,012 |
|
|
|
|
---------- |
---------- |
|
| OPERATING
PROFIT |
|
|
398,678 |
380,248 |
|
| Other
income |
|
28 |
6,851 |
3,820 |
|
|
|
|
---------- |
---------- |
|
|
|
|
405,529 |
384,068 |
|
|
|
|
|
| Financial
charges |
|
29 |
287,182 |
297,747 |
|
| Workers'
profit participation fund |
|
|
5,917 |
4,316 |
|
| Workers'
welfare fund |
|
|
873 |
582 |
|
|
|
|
---------- |
---------- |
|
|
|
|
293,972 |
302,645 |
|
|
|
|
---------- |
---------- |
|
| Net
profit for the year before taxation |
|
111,557 |
81,423 |
|
| Provision
for taxation for the year |
|
|
17,048 |
15,900 |
|
|
|
|
---------- |
---------- |
|
| Net
profit for the year after taxation |
|
94,509 |
65,523 |
|
| Provision
for taxation- prior years |
|
|
- |
(29,221) |
|
| Unappropriated
profit brought forward |
|
2,705 |
2,185 |
|
|
|
|
---------- |
---------- |
|
| Net
profit available for appropriation |
|
97,214 |
38,487 |
|
|
|
|
|
| APPROPRIATIONS |
|
|
|
|
|
|
|
|
| Proposed
dividend @ Rs. 1.75 |
|
|
50,095 |
35,782 |
|
| (1997:
Rs. 1.25) per share |
|
|
|
|
| General
reserve |
|
|
45,000 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
95,095 |
35,782 |
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
2,119 |
2,705 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
IQBAL ALI MOHAMMED |
|
|
BASHIR H. ALI MOHAMMED |
|
|
Chief Executive |
|
|
Director |
|
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1998 |
|
|
|
1998 |
1997 |
|
|
|
|
Rs. 000s |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
| Profit
before taxation |
|
111,557 |
81,423 |
|
| Adjustments
for: |
|
|
|
| Depreciation |
|
135,081 |
119,783 |
|
| Staff
gratuity |
|
4,556 |
2,810 |
|
| Financial
charges |
|
298,014 |
298,261 |
|
| Profit
on sale of operating assets |
|
(4,681) |
(1,705) |
|
| Interest
income |
|
(10,832) |
(514) |
|
|
|
---------- |
---------- |
|
|
|
533,695 |
500,058 |
|
| Changes
in working capital: |
|
|
| (Increase)/Decrease
in current assets |
|
| Stores
and spares |
|
(4,887) |
(16,654) |
|
| Stock-in-trade |
|
325,479 |
(439,972) |
|
| Trade debts |
|
(136,626) |
(175,360) |
|
| Loans,
advances, prepayments and other receivables |
(11,031) |
12,369 |
|
|
|
|
---------- |
---------- |
|
|
|
|
172,935 |
(619,617) |
|
| Increase
in current liabilities |
|
|
| Creditors,
accrued and other liabilities |
|
21,530 |
63,614 |
|
|
|
---------- |
---------- |
|
|
|
194,465 |
(556,003) |
|
|
|
---------- |
---------- |
|
| Cash
generated from/(used in) operations |
|
728,160 |
(55,945) |
|
| Payments
for: |
|
|
|
| Staff
gratuity |
|
(1,843) |
(1,204) |
|
| Financial
charges |
|
(300,732) |
(285,530) |
|
| Income tax |
|
(21,920) |
(21,301) |
|
| Long
term loans and advances |
|
(2,044) |
(177) |
|
|
|
|
---------- |
---------- |
|
| Net
cash generated from/(used in) operating activities |
401,621 |
(364,157) |
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Capital
expenditure |
|
(180,379) |
(298,628) |
|
| Sale
proceeds of operating assets |
|
7,496 |
3,636 |
|
| Interest
received |
|
10,832 |
- |
|
| Long
term deposits |
|
218,944 |
(310,208) |
|
|
|
|
---------- |
---------- |
|
| Net
cash generated from/(used in) investing activities |
56,893 |
(605,200) |
|
|
|
|
|
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
Rs. 000s |
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
|
|
| Proceeds
from issue of right shares with premium |
- |
84,818 |
|
| Long
term borrowings |
|
|
134,094 |
641,437 |
|
| Long
term borrowings-repayment |
|
|
(288,846) |
(96,049) |
|
| Redemption
of redeemable capital |
|
|
(24,331) |
(21,415) |
|
| Increase
in short terms borrowings |
|
|
40,956 |
382,378 |
|
| Dividends
paid |
|
|
(35,782) |
(15,903) |
|
|
|
|
---------- |
---------- |
|
| Net
cash (used in)/generated from financing activities |
(173,909) |
975,266 |
|
|
|
|
---------- |
---------- |
|
| Net
increase in cash and cash equivalents |
|
284,605 |
5,909 |
|
| Cash
and cash equivalents at October 1 |
|
7,665 |
1,756 |
|
|
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at September 30 |
|
292,270 |
7,665 |
|
|
|
|
========== |
========== |
|
|
|
IQBAL ALI MOHAMMED |
|
|
BASHIR H. ALI MOHAMMED |
|
|
Chief Executive |
|
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1998 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| Gul
Ahmed Textile Mills Limited is a public limited company incorporated in
Pakistan and is listed on the |
|
| Karachi
and Lahore Stock Exchanges. It is engaged in the manufacture and sale of
textile products. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
|
|
| 2.1
Accounting convention |
|
|
|
| Accounts
of the Company have been prepared on historical cost convention. |
|
|
|
|
| 2.2
Foreign currency translation |
|
|
|
| Assets
and liabilities in foreign currencies are translated in Pak Rupees at the
rates ruling on the |
|
| balance
sheet date or as fixed under contractual arrangements. |
|
|
| Exchange
differences on loans and deposits created to hedge these loans are adjusted
to assets |
|
| acquired
under the loans. Other exchange differences are included in current year's
income. |
|
|
| 2.3
Retirement gratuity |
|
|
|
| The
Company provides for the liability of gratuity payable to its employees under
the law. |
|
|
| 2.4
Taxation |
|
|
|
| Provision
for current taxation is based on taxable income at the current rates of
taxation after |
|
| considering
tax credits a |
