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Ibrahim Textile Mills Limited
Annual Report 1998
Contents
Company Information
Notice of Meeting
Directors' Report
Pattern of Shareholding
Auditors' Report
Balance Sheet
Profit and Loss Account
Statement of Changes in Financial Position
Notes to the Accounts
Company Information
Board of Directors
Sheikh Mukhtar Ahmed
(Chairman)
Sheikh Mohammad Yaseen
(Chief Executive)
Mr. Mohammad Naeem Mukhtar
Mr. Mohammad Waseem Mukhtar
Mr. Asim Yaseen
Mrs. Ghazala Naeem
Mr. Nasim Beg
(NIT Nominee)
Mr. Aslam Hayat
(NIT Nominee)
Secretary
S.M. Hasnain Rizvi
Auditors & Tax Consultants
F. R. Merchant & Co.,
Chartered Accountants,
Karachi, Pakistan.
System Consultant
KPMG Peat Marwick Associates (Pvt) Limited
Karachi, Pakistan.
Bankers
Habib Bank Limited
Allied Bank of Pakistan Limited
Albaraka Islamic Investment Bank B.S.C. (EC)
Registered Office &
Share Department
Ibrahim Centre,
GK-7/59, Bagh-e-Zehra Street,
Kharadar,
Karachi, Pakistan.
Head Office
Ibrahim Centre,
15, Club Road,
Faisalabad, Pakistan.
Lahore Office
Ibrahim Centre,
l-A, Ahmed Block,
New Garden Town,
Lahore, Pakistan.
Mills
40-Kilometre,
Faisalabad - Sheikhupura Road,
Tehsil Jaranwala,
District Faisalabad, Pakistan.
Notice of Meeting
Notice is hereby given that the 24th Annual General Meeting of the shareholders of the company will be held on
25-03-1999 at 10:00 A.M., at F-352, S.I.T.E. Karachi to transact the following business:-
1. To confirm the minutes of the preceding meeting of the shareholders of the company.
2. To consider, approve and adopt the Annual Audited Accounts of the Company for the year ending
30-09-1998.
3. To approve Cash Dividend @ 20% as recommended by the Board of Directors.
4. To appoint Auditors for the next year 1998-99 and to fix their remuneration. The present auditors
M/S. F.R. Merchant & Co., Chartered Accountants, Karachi being eligible for appointment, offer themselves
for re-appointment.
To transact any other business with the permission of the chair.
				By order of the Board
Dated: 08 February, 1999				S. M. Husnain Rizvi
Karachi.				Company Secretary
Note:
i) The share transfer books of the Company shall remain closed from 19-03-1999 to 25-03-1999 (both days
inclusive) to determine the names of members entitled to Dividend payment and to attend the meeting.
Transfers received in order at the Shares Registration Office of the Company at the close of business on
18-03-1999 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.
The proxies, in order to be effective, must be received by the Company at least 48 hours before the meeting
at the registered office of the Company at GK, 7/59, Bagh-e-Zahra Street, Kharadar, Karachi.
Directors Report to the Shareholders
We are pleased to present before you the 24th Audited Financial results of the company for the year ended
September 30, 1998.
OPERATING RESULTS
The mills of the company has performed well during the year under review. The total production for the year
ended September 30, 1998 is 9,109,421 Kgs. of blended yarn of different counts as against production in the
previous year of 8,839,225 Kgs. of yarn.
The count manufactured during the year is from 24/S to 65/S of different types of blended yarn.
The figures of production during the year are summarized as under:
Type of Yarn Produced					Production
					Kgs.
Polyester Viscose Yarn					5,100,369
Acrylic Yarn					1,695,738
Acrylic Polyester Yarn					808,769
Polyester Acrylic Yarn					762,501
Polyester Yarn					742,044
					----------
					9,109,421
					==========
The production of different counts of blended of yarn is made to offer a good product mix to our customers as per
market demand and also to achieve a higher selling price as compare to other competitors.
FINANCIAL RESULTS
The company has achieved a net profit after tax of Rs. 31,624,427/- as against a net profit after tax of
Rs. 28,937,988/- in the previous year. The company has been able to reduce the financial charges during the year
as compared to previous year through better financial management of the revenue generated from sales.
The summary of financial results are as follows:
					Rupees
Gross Profit					125,845,150
Other Income					3,383,619
					----------
					129,228,769
Operating Expenses					40,965,446
					----------
Operating Profit					88,263,323
Financial & Other Charges					46,838,896
					----------
Profit before Taxation					41,424,427
Provision for Taxation					9,800,000
					----------
Profit after Taxation					31,624,427
Unappropriated Profit Brought Forward					13,316
					----------
Surplus Available for Appropriation					31,637,743
					==========
CASH DIVIDEND
The Board of Directors have recommended payment of Cash Dividend @ 20%
APPROPRIATIONS
					Rupees
Proposed Dividend @ 20% (1997 @ 20%)					27,200,000
Transfer to general reserve					4,425,000
					----------
					31,625,000
					----------
Unappropriated Profit Carried Forward					12,743
					==========
GENERAL REVIEW
The continuous stagnant position in the industrial activities for the last many years is still persistent with particular
reference to textile industry in general and spinning industry in particular. This position has further aggravated
with the financial crises in South East Asian Countries which has almost haulted the exports of yarn to these
countries with the result that the overall position of textile spinning industry has gone from bad to worse. This
has kept the domestic yarn market under great pressure throughout the year.
We hope that when the after effect of this crises are over there may be some improvement in the export business
which will ultimately result in improving the sales activity in the local market.
YEAR 2000 COMPLIANCE OF COMPUTER SYSTEM
The company has assigned the work of year 2000 compliance of the existing computer system to its consultants
and they have confirmed that the work will be completed by September 1999 and all our applications will be
made year 2k compliant.
AUDITORS
The present auditors M/S F. R. Merchant & Co., Chartered Accountants, Karachi retire and are being eligible,
consented for re-appointment for the next financial year 1998-99.
PATTERN OF SHAREHOLDING
Pattern of shareholding of the company is annexed.
ACKNOWLEDGMENT
The management is happy and wishes to place on record its deep appreciation for the hardwork and positive
efforts made by the workers and staff. The management would also like to thank its valued Customers, Bankers,
Financial Institutions and shareholders for their whole hearted support and hopes to get the same cooperation in
the future.
				On behalf of the Board
Dated: 08 February, 1999				(SHEIKH MOHAMMAD YASEEN)
Karachi.				Chief Executive
Pattern of Shareholding
as at 30 September, 1998
No. of	Having Shares		Shares	Percentage
Shareholders	From	To	Held
237	1	100	23,700	0.17
270	101	500	73,400	0.54
94	501	1000	88,700	0.65
108	1001	5000	305,700	2.25
32	5001	1000	253,600	1.86
6	10001	15000	74,900	0.55
13	15001	20000	241,800	1.78
1	20001	25000	20,300	0.15
1	25001	30000	30,000	0.22
1	35001	40000	40,000	0.30
1	40001	45000	41,000	0.30
1	60001	65000	65,000	0.48
1	70001	75000	75,000	0.55
5	75001	80000	400,000	2.94
2	95001	100000	200,000	1.47
1	115001	120000	120,000	0.88
3	135001	140000	412,000	3.03
1	175001	180000	179,500	1.32
1	215001	220000	220,000	1.62
4	270001	275000	1,088,000	8.00
1	275001	280000	280,000	2.06
1	395001	400000	400,000	2.94
1	455001	460000	460,000	3.38
2	540001	545000	1,088,000	8.00
1	665001	670000	669,000	4.92
1	1315001	1320000	1,316,000	9.68
1	1495001	1500000	1,496,000	11.00
1	1645001	1650000	1,649,200	12.13
1	2285001	2290000	2,289,200	16.83
----------			----------	----------
793			13,600,000	100.00
==========			==========	==========
Categories of Shareholders
Particulars			Shareholders	Shareholding	Percentage
Individuals			775	7,834,200	57.60
Investment companies			10	1,597,000	11.75
Joint stock companies			4	2,334,300	17.16
Financial institutions			1	1,649,200	12.13
Modaraba companies			3	185,300	1.36
			----------	----------	----------
			793	13,600,000	100.00
			==========	==========	==========
Auditors' Report to the Members
We have audited the annexed Balance Sheet of M/S. IBRAHIM TEXTILE MILLS LIMITED, as at September
30, 1998 and the related Profit and Loss Account and Statement of Changes in Financial Position, 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 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, investment 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 statement of changes in the financial position, 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 the Profit and changes in financial position 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.
Dated: 08 February, 1999				(F.R. MERCHANT & CO.,)
Karachi.				Chartered Accountants
Balance Sheet
as at 30 September, 1998
					1998	1997
				Note	Rupees	Rupees
CAPITAL AND RESERVES
Authorized
20,000,000 ordinary shares
of Rs. 10/- each					200,000,000	200,000,000
					==========	==========
Issued, subscribed and paid-up				3	136,000,000	136,000,000
General reserve				4	50,025,000	45,600,000
Unappropriated profit					12,743	13,316
					----------	----------
					186,037,743	181,613,316
LONG TERM LOANS				5	56,000,000	126,350,412
LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE				6	7,830,885	-
DEFERRED LIABILITY				7
Customs debenture					1,691,290	2,563,580
Provision for gratuity					9,965,219	7,561,172
					----------	----------
					11,656,509	10,124,752
CURRENT LIABILITIES
Short term borrowings				8	150,050,133	99,401,516
Current portion of long term liabilities				9	49,756,744	59,600,040
Creditors, provisions and accrued liabilities				10	59,031,497	46,460,881
Provision for taxation					15,387,475	5,587,475
Proposed dividend					27,200,000	27,200,000
					----------	----------
					301,425,849	238,249,912
CONTINGENT LIABILITIES/COMMITMENTS				11	-	-
					----------	----------
					562,950,986	556,338,392
					==========	==========
FIXED CAPITAL EXPENDITURE
Operating assets				12	292,743,804	309,255,991
LONG TERM INVESTMENTS				13	5,000,000	5,000,000
CURRENT ASSETS
Stores, spares and loose tools				14	11,917,767	7,827,769
Stocks in trade				15	122,319,198	91,884,524
Trade debtors				16	-	251,038
Advances, deposits and other receivables				17	96,080,177	63,831,400
Cash and bank balances				18	34,890,040	78,287,670
					----------	----------
					265,207,182	242,082,401
					----------	----------
					562,950,986	556,338,392
					==========	==========
The annexed notes form an integral part of these accounts.
Profit and Loss Account
for the year ended 30 September, 1998
					1998	1997
				Note	Rupees	Rupees
SALES				19	917,752,995	943,094,929
COST OF SALES				20	791,907,845	807,235,293
					----------	----------
GROSS PROFIT					125,845,150	135,859,636
OPERATING EXPENSES
Administrative				21	33,944,635	29,100,730
Selling				22	7,020,811	6,340,371
					----------	----------
					40,965,446	35,441,101
					----------	----------
OPERATING PROFIT					84,879,704	100,418,535
					----------	----------
MISCELLANEOUS REVENUE				23	2,254,096	2,337,281
PROFIT/(LOSS) ON TRADING				24	1,129,523	(243,287)
					----------	----------
					3,383,619	2,093,994
					----------	----------
					88,263,323	102,512,529
OTHER CHARGES
Financial				25	44,628,860	66,160,231
Zakat					29,803	9,705
Workers' profit participation fund					2,180,233	1,817,130
					----------	----------
					46,838,896	67,987,066
					----------	----------
PROFIT FOR THE YEAR BEFORE TAXATION					41,424,427	34,525,463
PROVISION FOR TAXATION					9,800,000	5,587,475
					----------	----------
PROFIT FOR THE YEAR AFTER TAXATION					31,624,427	28,937,988
UNAPPROPRIATED PROFIT BROUGHT FORWARD					13,316	75,328
					----------	----------
SURPLUS AVAILABLE FOR APPROPRIATION					31,637,743	29,013,316
APPROPRIATION
Proposed dividend @ 20% (1997 - @ 20%)					27,200,000	27,200,000
Transferred to general reserve					4,425,000	1,800,000
					----------	----------
					31,625,000	29,000,000
					----------	----------
UNAPPROPRIATED PROFIT CARRIED FORWARD					12,743	13,136
					==========	==========
The annexed notes form an integral part of these accounts
	Chief Executive			Director
Statement of Changes in Financial Position
(Cash Flow Statement) for the year ended 30 September, 1998
					1998	1997
					Rupees	Rupees
a) CASH FLOW FROM OPERATING ACTIVITIES
Profit for the year before taxation					41,424,427	34,525,463
Adjustments for
Depreciation					33,546,743	35,084,371
Profit on disposal of fixed assets					(73,987)	(52,737)
Provision for gratuity					3,153,709	3,483,628
Gratuity paid					(749,662)	(1,746,814)
Exchange loss on long term loans					-	1,057,000