| Gulistan Textile Mills Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| Board.
of Directors |
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| Notice of Meeting |
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| Directors'
Report |
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| Auditors' Report |
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| Balance Sheet |
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| Profit
& Loss Account |
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| Cash
Flow Statement |
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| Statement
of Changes in Equity |
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| Notes to the Account |
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| Schedule
of Fixed Assets |
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| Pattern
of Share Holding |
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| BOARD
OF DIRECTORS |
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| CHAIRMAN |
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Mr. Abdul Shakoor |
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| CHIEF
EXECUTIVE |
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Mr. Naseer Ahmed |
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| DIRECTORS |
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Mr. Tanveer Ahmed |
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Mr. Mohammad Abdullah |
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Mr. Talib H. Rizvi |
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Mr. Riaz Ahmed |
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Mr. N. R. Siddiqui |
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| SECRETARY |
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Mr. Zamir Q. Siddiqui |
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| AUDITORS |
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M/ s. Hameed Chaudhri
& Co. |
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Chartered Accountants |
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| TAX
CONSULTANTS |
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Mushtaq & Co. |
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Chartered Accountants |
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| BANKERS |
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United Bank Limited |
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| REGISTERED
OFFICE |
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2nd Floor, Finlay House, |
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I.I. Chundrigar Road, |
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Karachi. |
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| MILLS |
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| UNIT I |
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Samasatta |
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| UNIT II & III |
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Tibba Sultanpur |
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| UNIT IV |
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Ferozwatwan |
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| Notice
of Meeting |
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| Notice
is hereby given that the Annual General Meeting of the Shareholders of
Gulistan Textile Mills |
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| Ltd.
will be held on 29th Mar' 2001 at 3 p.m. at top Floor of Finlay House, I. I.
Chundrigar Road, Karachi to |
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| transact
the following business :~ |
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| 1.
To confirm the minutes of the preceding meeting of the share holders. |
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| 2.
To receive consider and adopt the audited accounts of the Company for the
year ended 30.9.2000 |
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| together
with the Directors and Auditors report thereon. |
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| 3.
To approve the dividend as recommended by the Directors of the Company. |
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| 4.
To appoint the Auditors of the company for the year ending 30.9.2001 and to
fix their remuneration. |
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| The
present Auditors M/s. Hameed Chaudhry & Co. being eligible offered
themselves for |
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| reappointment. |
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| 5.
Special Business: |
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| To
amend Article (56) of the Article of Association of the Company and to insert
in its place the |
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| following
with or without any amendment :- |
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| "The
remuneration paid or to be paid to a Director for performing extra services,
including of the |
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| Office
of Chairman and the remuneration paid or to be paid to any Director for
attending the |
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| meeting
of the Directors or a Committee of Directors shall from time to time be
determined and / |
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| or
confirmed by the Directors". |
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| 7.
Any other matter with the permission of the Chairman. |
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| Karachi: |
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By order of the Board |
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| 6th
March ' 2001 |
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Company Secretary |
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| Notes: |
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| 1.
Register of the members of the company will remain closed from 28.3.2001 to
3.4.2001 (both days inclusive). |
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| dividend
if approved 'will be paid to such members only whose names appear in the
register of the Company |
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| at
the close of 27.3.2001. |
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| 2.
Proxies in order to be effective must be received duly completed in all
respects by the company at the |
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| registered
office not less than 48 hours before the time for holding the meeting. |
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| 3.
Shareholders are requested to notify us immediately for any change in their
registered address currently |
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| available
with the company. |
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| Statement
under Section 160(1] (B) of the Companies Ordinance '84: |
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| The
amendments in the Article of Association of the Company is solicited to make
it in conformity with the Article |
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| provided
for the appointment of the Chief Executive of the Company. The Directors have
no special interest in it. |
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| Directors
Report to the Share-Holders |
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| Dear
Shareholders, |
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| Assalam
-o-Alaikum, |
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| Your
Directors present the 34th Annual Report of Accounts of the Company for the
year ending |
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| 30-09-2000
for your consideration and approval. |
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| OVERVIEW: |
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| The
year under review (1999-2000) was a promising year for the whole spinning
industry as the raw |
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| cotton
was available on reasonable rates. Cotton crop, after a couple of years, was
enough to meet |
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| the
requirement of local spinning industry. The Government had adopted open
market policy. Con- |
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| sequently
cotton was available in the domestic market at the international rates. Your
Company |
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| therefore,
had succeeded to increase its sales both in home and foreign markets from
Rs.863 Million |
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| to
Rs.966 Million and from Rs. 1,091Million to Rs. 1,459 Million respectively. |
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| Following
are the key financial points:- |
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Rupees in |
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|
Million |
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| Sales Net |
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2,324.57 |
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| Gross Profit |
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496.41 |
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| Profit
before diminution in value of share and other charges |
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253.46 |
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| Diminution
in value of shares |
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78.53 |
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| Other
charges |
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41.07 |
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| Profit
after Tax |
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120.24 |
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| Un-appropriated
profit brought forward. |
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109.41 |
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| APPROPRIATION: |
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| Cash
dividend of 50% for the year ending 30-09-2000 |
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63.18 |
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| Un-appropriated
profit carried forward. |
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166.48 |
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| FUTURE
OUTLOOK: |
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| Textile
industry, the basic industry of the country, depend upon the availability of
domestic cotton on |
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| competitive
rates. During the year under review we could procure cotton on the
international rates |
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| which
resulted in better output. In the current year the prices of cotton have
increased by about 60% |
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| in
comparison to the last year's prices. The international market is floaded
with yarn from other |
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| countries.
Hence the prices of yarn have not increased to absorb the increase in the
price of cotton. |
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| Export
Refinance which reduced the cost of finance has also been withdrawn. These
are the adverse |
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| circumstances
which we are facing and on which we have to overcome. Your Directors assure
you |
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| that
by keeping a close watch on the cost of production and possible increase in
sales they may God |
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| Willing
meet the present challenges satisfactorily. |
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| Your
Directors in the past did not provide diminution in the value of investment
(both on short and |
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| long
term) in the hope that the stock market may improve as a result of the
Government's efforts for |
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| economic
revival. Signs of any improvement, as evident, are quite bleak and therefore,
we have, as |
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| a
policy decided to provide diminution in future. If the Stock Market improves,
the amount of dimi- |
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| nution
will be reduced in subsequent years. It is quite satisfying that inspite of
this provision your |
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| Directors
recommend for you a cash dividend of 50% for the year 30-09-2000. |
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| In
the preceding year, your Directors, finding, that office accommodation in
Lakson Square Karachi, is |
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| in
excess to the Company's requirement sold it after its valuation and by
observing all the corporate |
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| formalities
to Gulistan Spinning Mills Limited. Security and Exchange Commission of
Pakistan issued |
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| notice
for reversal of the transaction. In compliance to the SECP's direction we
reversed the transac- |
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| tion
as is evident from the accounts of the Company. |
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| Your
Company' paid the exchange risk fee to avoid exchange losses as our currency
is fluctuating very |
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| rapidly.
Loss is an allowable capital expenditure hence any expenditure incurred to
avoid this loss |
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| should
be treated accordingly. Without the exchange booking the loss of fluctuation
would have been |
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| much
more hence we have capitalized exchange risk fee in the respective asset
accounts according to |
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| our
past accounting policy. |
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| POWER
GENERATION: |
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| Permission
for Gas connection for the operation of Captive Power Plants has been
delayed. We have |
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| now
abandoned the idea as WAPDA on reasonable rates have enough power to supply
without frequent |
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| load
shedding like in the past. |
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| BALANCING
MODERNIZATION AND REPLACEMENT: |
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| In
the international markets the competition is mounting. The quality of product
should necessarily be |
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| fully
maintained to withstand the requirement of the buyers . To achieve these
objectives we have to |
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| assure
that your units are equipped with the latest Plants and Machinery. Your
Company therefore, |
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| during
the year under review invested substantial amount to the tune of Rs. 120
Million on Balancing |
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| Modernization
and wherever needed replacement and hope that this investment would yield
better |
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| results
in future. |
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| BREAK-UP
VALUE AND EARNING PER SHARE: |
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| The
break-up value of your share as on 30-09-2000 was Rs. 69.31 as compared to
Rs.64.80 of last year. |
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| The
earning per share for 30-09-2000 was Rs. 9.52(Rs. 15.73 before diminution in
value of shares} as |
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| against
Rs.3.95 of the last year. |
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| PATTERN
OF SHAREHOLDING: |
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| Statement
showing pattern of shareholding as on 30-09-2000 is enclosed. |
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| APPOINTMENT
OF AUDITORS: |
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| The
Auditors of the Company M/s. Hameed Chaudhri & Company Chartered
Accountants retire and re- |
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| offer
their services for the year 2000-2001 being eligible for such appointment. |
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| THANKS: |
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| On
behalf of the Board appreciation and thanks are placed on record for
dedicated services by the em- |
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| ployees
and assistance and co-operation timely extended by the financial
institutions. |
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BY ORDER OF THE BOARD |
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| Karachi |
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NASEER AHMED |
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| 5th
March, 2001 |
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CHIEF EXECUTIVE |
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| AUDITORS
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of Gulistan Textile Mills Limited as
at September 30, 2000 |
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| and
the related profit and loss account, the cash flow statement and the
statement of changes in equity, |
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| together
with the notes forming part thereof, for the year then ended and we state
that we have obtained |
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| all
the information and explanations which, to the best of our knowledge and
belief, were necessary for |
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| the
purposes of our audit. |
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| It
is the responsibility of the company's management to establish and maintain a
system of internal |
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| control,
and prepare and present the above said statements in conformity with the
approved accounting |
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| standards
and the requirements of the Companies Ordinance, 1984. Our responsibility is
to express an |
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| opinion
on these statements based on our audit. |
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| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These |
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| standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the |
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| above
said statements are free of any material misstatement. An audit includes
examining, on a test |
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| basis,
evidence supporting the amounts and disclosures in the above said statements.
An audit also |
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| includes
assessing the accounting policies and significant estimates made by
management, as well as, |
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| evaluating
the overall presentation of the above said statements. We believe that our
audit provides a |
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| reasonable
basis for our opinion and, after due verification, we report that: |
|
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| (a)
in our opinion, proper books of accounts have been kept by the company as
required by the Compa- |
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| nies
Ordinance, 1984. |
|
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| (b)
in our opinion: |
|
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| (i)
the balance sheet and profit and loss account together with the notes thereon
have been |
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| drawn
up in conformity with the Companies Ordinance, 1984, and are in agreement
with |
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| the
books of account and are further in accordance with accounting policies
consistently |
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| applied; |
|
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| (ii)
the expenditure incurred during the year was for the purpose of the company's
business; |
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| and |
|
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| (iii)
the business conducted, investments made and the expenditure incurred during
the year |
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| 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 |
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| balance
sheet, profit and loss account, cash flow statement and statement of changes
in equity |
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| together
with the notes forming part thereof, conform with approved accounting
standards as ap- |
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| plicable
in Pakistan, and, give the information required by the companies Ordinance,
1984, in |
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| the
manner so required and except for compliance with the requirements of
International Ac- |
|
| counting
Standard {IAS} as explained in note 15.1 and to the extent to which these may
affect the |
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| annexed
accounts, respectively give a true and fair view of the state of the
Company's affairs as at |
|
| 30
September 2000 and of the profit, its cash flows and changes in equity for
the year then ended; |
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| and |
|
|
| (d)
in our opinion Zakat deductible at source under the Zakat and Usher
Ordinance, 1980 was de- |
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| ducted
by the company and deposited in the Central Zakat Fund established under
section 7 of |
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| that
Ordinance. |
|
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| Without
qualifying our opinion we report that direct expenses incurred on sales have
been |
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| reclassified
as explained in Note 2.12. |
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|
HAMEED CH. & COMPANY |
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| KARACHI:
5-3-2001 |
|
CHARTERED ACCOUNTANTS |
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| BALANCE
SHEET AS AT 30 SEPTEMBER, 2000 |
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|
2000 |
1999 |
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|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVES |
|
| SHARE
CAPITAL |
|
| Authorised
capital |
|
| 15,000,000
ordinary shares of |
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| Rs. 10 each |
|
150,000,000 |
150,000,000 |
|
|
========== |
========== |
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| Issued,
subscribed and paid-up |
|
3 |
126,360,000 |
126,360,000 |
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| RESERVES |
|
|
|
|
| Share
Premium |
|
4 |
379,080,000 |
379,080,000 |
|
| General
reserve |
|
|
203,921,394 |
203,921,394 |
|
| Unappropriated
profit |
|
|
166,485,265 |
109,418,145 |
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|
------------ |
------------ |
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|
749,486,659 |
692,419,539 |
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------------ |
------------ |
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| SHAREHOLDER'S
EQUITY |
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|
875,846,659 |
818,779,539 |
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| REDEEMABLE
CAPITAL |
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5 |
183,771,100 |
112,680,650 |
|
| LONG
TERM LOANS |
|
6 |
34,701,287 |
136,353,226 |
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| OBLIGATIONS
UNDER FINANCE LEASE |
|
7 |
105,723,494 |
133,646,600 |
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| DEFERRED
LIABILITY |
|
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|
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| Provision
for Gratuity |
|
8 |
19,491,341 |
17,146,040 |
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| Custom
Duty payable |
|
-- |
1,260,260 |
|
|
| CURRENT
LIABILITIES |
|
| Short
term Loans |
|
9 |
971,091,779 |
1,122,477,715 |
|
| Current
Maturity of Long term liabilities |
|
10 |
95,219,573 |
78,414,323 |
|
| Creditors,
Provisions, Accrued charges |
|
|
|
| and
Other Liabilities |
|
11 |
201,029,564 |
264,367,440 |
|
| Workers'
Profit Participation Fund |
|
12 |
6,088,638 |
3,274,294 |
|
| Provision
for taxation |
|
|
24,163,868 |
10,560,194 |
|
| Dividend |
|
13 |
63,214,587 |
20,563,337 |
|
|
|
------------ |
------------ |
|
|
1,360,808,009 |
1,499,657,303 |
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
14 |
-- |
-- |
|
|
|
|
------------ |
------------ |
|
|
2,580,341,890 |
2,719,523,618 |
|
|
========== |
========== |
|
| TANGIBLE
FIXED ASSETS |
|
|
| At
cost less depreciation |
|
15 |
938,722,522 |
899,307,951 |
|
|
|
|
| CAPITAL
WORK-IN-PROGRESS |
|
16 |
30,824,860 |
31,825,935 |
|
|
|
|
------------ |
------------ |
|
|
969,547,382 |
931,133,886 |
|
| LONG
TERM INVESTMENTS |
|
| SHARES |
|
17 |
259,395,759 |
337,188,202 |
|
|
|
|
| IMMOVABLE
PROPERTY |
|
18 |
33,795,075 |
-- |
|
|
| CURRENT
ASSETS |
|
| Stores,
spares and loose tools |
|
19 |
64,436,712 |
44,176,922 |
|
| Stock-in-trade |
|
20 |
323,598,931 |
440,640,827 |
|
| Trade
debtors |
|
21 |
324,220,361 |
319,182,209 |
|
| Advances,
deposits, prepayments |
|
|
|
|
| and
other receivables |
|
22 |
258,104,122 |
284,864,321 |
|
| Short
term investments |
|
23 |
280,085,082 |
265,545,465 |
|
| Sales
Tax refundable |
|
|
791,545 |
25,183,860 |
|
| Rebate
receivable |
|
|
2,761,475 |
3,870,766 |
|
| Margin
Deposit with bank |
|
|
7,131,608 |
11,181,421 |
|
| Cash
and bank balances |
|
24 |
56,473,838 |
56,555,739 |
|
|
|
------------ |
------------ |
|
|
1,317,603,674 |
1,451,201,530 |
|
|
------------ |
------------ |
|
|
2,580,341,890 |
2,719,523,618 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
NASEER AHMED |
|
ABDUL SHAKOOR |
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
| SALES - Net |
|
25 |
2,324,576,626 |
2,010,341,445 |
|
| COST
OF SALES |
|
26 |
1,828,158,983 |
1,742,101,931 |
|
|
|
|
------------ |
------------ |
|
| GROSS
PROFIT |
|
496,417,643 |
268,239,514 |
|
|
| OPERATING
EXPENSES |
|
| ADMINISTRATIVE |
|
27 |
31,546,196 |
24,840,012 |
|
| SELLING |
|
28 |
10,518,953 |
7,048,848 |
|
|
------------ |
------------ |
|
|
42,065,149 |
31,888,860 |
|
|
------------ |
------------ |
|
| OPERATING
PROFIT |
|
454,352,494 |
236,350,654 |
|
| MISCELLANEOUS
REVENUE |
|
29 |
17,188,220 |
37,230,592 |
|
|
|
|
------------ |
------------ |
|
|
|
471,540,714 |
273,581,246 |
|
| FINANCIAL
EXPENSES |
|
30 |
218,077,836 |
203,899,878 |
|
|
|
------------ |
------------ |
|
| PROFIT
FOR THE YEAR BEFORE OTHER CHARGES |
|
253,462,878 |
69,681,368 |
|
|
| OTHER
CHARGES |
|
| Diminution
in value of shares |
|
78,532,722 |
-- |
|
| Others |
|
31 |
41,079,362 |
7,956,975 |
|
|
|
------------ |
------------ |
|
|
119,612,084 |
7,956,975 |
|
|
------------ |
------------ |
|
| PROFIT
FOR THE YEAR BEFORE TAXATION |
|
133,850,794 |
61,724,393 |
|
| PROVISION
FOR TAXATION |
|
| CURRENT
YEAR |
|
13,603,674 |
10,400,000 |
|
| PRIOR
YEAR |
|
-- |
1,388,320 |
|
|
|
------------ |
------------ |
|
|
13,603,674 |
11,788,320 |
|
|
------------ |
------------ |
|
| PROFIT
FOR THE YEAR AFTER TAXATION |
|
120,247,120 |
49,936,073 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
109,418,145 |
87,913,072 |
|
|
|
------------ |
------------ |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
229,665,265 |
137,849,145 |
|
| APPROPRIATION: |
|
| Dividend
for Prior Year - 7.5% u/s |
|
| 12
(9-A) of Income Tax Ordinance, 1979 |
|
-- |
9,477,000 |
|
| FINAL
DIVIDEND @ 50% (1999 - 15%) |
|
63,180,000 |
18,954,000 |
|
|
------------ |
------------ |
|
|
63,180,000 |
28,431,000 |
|
|
------------ |
------------ |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
|
166,485,265 |
109,418,145 |
|
|
========== |
========== |
|
| BASIC
EARNINGS PER SHARE |
|
35 |
9.52 |
3.95 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
NASEER AHMED |
|
ABDUL SHAKOOR |
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
| Net
cash inflow from operating activities |
|
A |
508,078,308 |
354,464,523 |
|
| Returns
on investments and servicing of finance |
|
| Mark-up
/ Interest paid |
|
(232,271,132) |
(219,647,443) |
|
| Finance
charges on leased assets |
|
(29,126,863) |
(29,276,586) |
|
| Zakat paid |
|
(2,921) |
(36,091) |
|
| Dividend
paid |
|
(20,528,750} |
(8,120,555) |
|
| Interest
received on advance to associated undertakings |
|
(2,398,212) |
19,630,678 |
|
| Interest
paid on advances from associated undertakings |
|
15,031,178 |
(10,340,623) |
|
| Interest
Income others |
|
2,259,863 |
13,056,805 |
|
| Dividend
received |
|
17,183,159 |
11,083,418 |
|
| Profit
/ Return on deposits & investments |
|
55,278,221 |
26,531,282 |
|
|
------------ |
------------ |
|
| Net
cash outflow from investments & servicing of finance |
|
{194,575,457) |
(197,119,115) |
|
| Taxation |
|
| Taxes
refunded / (paid) (including deducted at source) |
|
10,890,802 |
(14,263,046) |
|
| INVESTING
ACTIVITIES |
|
| Fixed
capital expenditure |
|
(81,602,003) |
(84,178,325) |
|
| Sale
proceeds of fixed assets |
|
2,935,000 |
1,038,690 |
|
| Immovable
Property |
|
-- |
(331,828) |
|
| Sale
proceeds of Investment in immovable property |
|
-- |
60,000,000 |
|
|
------------ |
------------ |
|
| Net
cash outflow from investing activities |
|
(78,667,003) |
(23,471,463) |
|
| Net
cash inflow before financing activities |
|
245,726,650 |
119,610,899 |
|
| FINANCING
ACTIVITIES |
|
| Decrease
in Short term finances |
|
{151,385,936) |
(70,133,320} |
|
| Custom
duty payable |
|
(1,260,260) |
-- |
|
| Redeemable
capital received |
|
71,090,450 |
112,680,650 |
|
| Long
term loans received |
|
-- |
133,419,000 |
|
| Repayment
of redeemable capital & loans |
|
(100,682,512) |
(200,440,494 |
|
| Repayment
of obligation under finance leases |
|
(57,824,086) |
(51,437,778 |
|
|
------------ |
------------ |
|
| Net
cash outflow from financing activities |
|
