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Gulistan Spinning Mills Limited
Annual Report 2000
CONTENTS
Board of Directors
Notice of Meeting
Directors' Report
Auditors' Report
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Statement of Changes in equity
Notes to the Account
Schedule of Fixed Assets
Pattern of Share Holding
BOARD OF DIRECTORS
CHAIRMAN Mr. Abdul Shakoor
CHIEF EXECUTIVE Mr. Tanveer Ahmed
DIRECTORS Mr. Naseer Ahmed
Mr. N. R. Siddiqui
Mr. Mohammad Abdullah
Mr. Riaz Ahmed
Mr. Muhammad Younus
SECRETARY Mr. Zamir Q. Siddiqui
AUDITORS M/ s. Hameed Chaudhri & Co.
Chartered Accountants
REGISTERED OFFICE 2nd Floor, Finlay House,
I.I. Chundrigar Road,
Karachi.
MILLS JUMBER KHURD
TEHSIL CHUNNIAN
DISTT. KASUR
NOTICE OF THE ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT THE ANNUAL GENERAL MEETING OF THE SHAREHOLDERS OF THE
COMPANY WILL BE HELD ON 28TH MARCH 2001 AT 3 P.M. AT THE ROOF TOP OF FINLAY HOUSE, I. I.
CHUNDRIGAR ROAD, KARACHI TO TRANSACT THE FOLLOWING BUSINESS:-
1. to confirm the minutes of the preceding meeting of the shareholders of the company.
2. to receive consider and adopt the Audited Accounts of the Company for the year ended 30.09.2000
together with the Directors and Auditors Reports thereon.
3. to approve the dividend, as recommended by the Directors of the company.
4. to appoint the Auditors of the Company for the year ending 30.9.2001 and to fix their remunera-
tion. The present Auditors Messrs Hameed Chaudhri and Company, Chartered Accountants being
eligible for appointment offered themselves for reappointment.
5. Special Business:
To amend Article (56) of the Article of Association of the company and to insert in its place the
following with or without any amendment:-
(56) The remuneration paid or to be paid to a Director for performing extra services, including of the
Office of Chairman and the remuneration paid or to be paid to any Director for attending the meeting
of the Directors or a Committee of Directors shall from time to time be determined and / or confirmed
by the Directors.
6. Any other matter with the permission of the Chairman.
By order of the Board
Karachi.: 6th March 2001 Company Secretary
Notes:-
1) Register of the Members of the company will remain closed from 27-03-2001 to 02-04-2001 (both
days inclusive). Dividend if approved will be paid to such members only whose name appear in
the register of the company as at the close of 26-03-2001.
2) Proxies in order to be effective must be received duly complete in all respects by the company at
the Registered office not less than 48 hours before the time for holding the meeting.
3) Shareholders are requested to notify us immediately for any change in their registered address
currently available with the company.
4) Any individual beneficial owner of CDC, entitled to vote at this meeting must bring his/her original
NIC with him/her to prove him/her to prove his/her identity, and in case of proxy, a copy of
shareholders attested NIC must be attached with proxy form. Representatives of corporate members
should bring the usual documents required for such purposes.
Statement under Section 160(1) B of the Companies Ordinance '84.
The amendments in the Article of Association of the Company is solicited to make it in conformity with
the article provided for the appointment of the Chief Executive of the Company. The Director have no
special interest in it.
DIRECTORS' REPORT TO THE SHAREHOLDERS
Dear Shareholders,
Assalam O Alaikum,
It is of pleasure to present before you the annual report alongwith audited Accounts of the Company for
the year ended 30.9.2000.
OVERVIEW:
As reported in our half yearly review the bumper cotton crop for the year 1999-2000 season enabled the
spinning industry to come out of the crises which it was facing due to shortage of cotton. Sufficient
production of cotton and Government's prudent policy of open market enabled the local spinning industry
to obtain cotton on competitive prices. This has resulted in the increase of sales and profitability to 592
Million and 82.7 Million in comparison to the last year's from 537 Million and 12.9 Million respectively.
Following are the key numbers. Rupees in
Million
Sales Net 592.75
Gross Profit 150.49
Profit for the year before taxation 82.74
Profit for the year after taxation 76.78
Unappropriated profit brought forward 45.25
Profit available for appropriation 122.04
UNAPPROPRIATION:
Cash dividend proposed @ 32.5% 32.50
Unappropriated profit carried forward 89.54
In the preceding year the Company had purchased property to meet its office requirement in a reputed
building in Karachi from one of its associated companies. The Securities and Exchange Commission of
Pakistan objected the transaction and with the .object to make compliance to their directives the
transaction has been reversed in consultation with the associated company.
FUTURE OUTLOOK:
As is evident from the results of the year under review, the success of textile industry is dependent
upon availability of raw cotton on reasonable rates. This year again the prices of cotton have increased
by about 60% as compared to the last year prices. Export refinance has been withdrawn. The rates of
borrowing by the financial institutions have also increased. Under these apparent adverse circumstances,
your Directors are try their best to control the cost escalation by increasing the production and sale.
BALANCING MODERNIZATION AND REPLACEMENT:
Being conscious of the fact that customers both in home and foreign markets demand quality yarn, your
Directors are continuously engage in balancing modernizating and wherever necessary replacement
to ensure that your Company produces such a product which suits to the requirement of the buyer. To
achieve this object the Company invested an amount of about Rs.33 Million on BMR in the year under
review.
BREAK-UP VALUE AND EARNING PER SHARE:
The earning per share for the current year is Rs.7.68 in comparison to Rs.0.86 of the preceding year.
This reflects the earning potential of your Company. The break-up value of the share of the Company has
risen from 17.02 to 21.45 of the last year,
PATTERN OF SHAREHOLDING:
Statement showing the pattern of shareholding as on 30-09-2000 is enclosed.
AUDITORS:
M/s. Hameed Chaudhri & Co. Chartered Accountant being the auditors of the Company retire and have
offered themselves for reappointment being eligible for it for the year 2000 - 2001.
THANKS:
Our thanks are due to the members of our staff for their dedicated services and to all of them who
extended cooperation & assistance.
BY ORDER OF THE BOARD
Karachi TANVEER AHMED
5th March, 2001 CHIEF EXECUTIVE
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of Gulistan Spinning Mills Limited as at September 30,
2000 and the related profit and loss account, the cash flow statement and the statement of changes in
equity, 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.
It is the responsibility of the company's management to establish and maintain a system of internal
control, and prepare and present the above said statements in conformity with the approved accounting
standards and the requirements of the Companies Ordinance, 1984. Our responsibility is to express an
opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
above said statements are free of any material misstatement. An audit includes examining on a test
basis, evidence supporting the amounts and disclosures in the above said statements. An audit also
includes assessing the accounting policies and significant estimates made by management, as well as,
evaluating the overall presentation of the above said statements. We believe that our audit provides a
reasonable basis for our opinion and, after due verification, we report that:
(a) in our opinion, proper books of accounts have been kept by the company as required by the Com-
panies 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 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, cash flow statement and statement of changes in eq-
uity together with the notes forming part thereof conform with approved accounting standards as
applicable in Pakistan, and give rhea 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, 2000 and of the profit, its cash flows and changes in equity for the
year then ended; and
(d) in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance, 1980, was de-
ducted by the company and deposited in the Central Zakat Fund established under section 7 0f
that Ordinance.
Without qualifying our opinion we report that direct expenses incurred on sales have been reclas-
sifted as explained in Note 2.11 and we also report that the ultimate outcome of the matter
explained in Note 8.3 cannot be determined.
KARACHI: HAMEED CHAUDHRI & COMPANY
5th March, 2001 CHARTERED ACCOUNTANTS
BALANCE SHEET AS AT 30 SEPTEMBER, 2000
2000 1999
Note Rupees Rupees
CAPITAL AND LIABILITIES
Authorised capital:
10,000,000 ordinary shares of
Rs. 10/- each 100,000,000 100,000,000
========== ==========
Issued, Subscribed and Paid-up Capital 3 100,000,000 100,000,000
Capital Reserve 4 25,000,000 25,000,000
Unappropriated profit 89,542,657 45,255,253
------------------ ------------------
Shareholder's equity 214,542,657 170,255,253
LONG TERM LOANS & FINANCES 5 25,954,798 70,858,532
OBLIGATION UNDER FINANCE LEASES 6 43,229,717 31,403,562
DEFERRED LIABILITY FOR GRATUITY 5,160,306 4,462,879
DEFERRED INCOME 1,921,063 2,881,593
CURRENT LIABILITIES
Current of Long term liabilities 7 21,156,106 13,947,019
Short term finances 8 248,091,445 357,684,048
Creditors, Accruals & other liabilities 9 39,425,278 83,548,853
Provision for taxation 10 10,373,661 4,412,986
Proposed Dividend 32,500,000 10,000,000
------------------ ------------------
351,546,490 469,592,906
CONTINGENCIES AND COMMITMENTS 11 -- --
------------------ ------------------
642,355,031 749,454,725
========== ==========
The annexed notes form an integral part of these accounts.
TANGIBLE FIXED ASSETS
Operating fixed assets 12 209,342,363 193,056,903
CAPITAL WORK-IN-PROGRESS 13 4,464,085 3,719,270
------------------ ------------------
213,806,448 196,776,173
INVESTMENT IN IMMOVEABLE PROPERTY  14 -- 60,000,000
LONG TERM INVESTMENTS 15 8,959,070 8,896,142
LONG TERM DEPOSITS 16 9,138,241 6,012,794
CURRENT ASSETS
Stores, Spares and loose Tools 17 8,457,813 4,592,053
Stock in Trade 90,502,552 122,844,684
Trade debtors 18 51,456,645 114,232,335
Advances, deposits & prepayments
and other receivables 19 145,113,523 79,574,605
Sales tax refundable 20 2,697,206 11,619,510
Short term investments 21 5,663,684 44,018,598
Cash and bank balances 22 106,559,849 100,887,831
------------------ ------------------
410,451,272 477,769,616
------------------ ------------------
642,355,031 749,454,725
========== ==========
TANVEER AHMED NASEER AHMED
CHIEF EXECUTIVE DIRECTOR
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER, 2000
2000 1999
Note Rupees Rupees
SALES - Net 23 592,757,100 537,699,905
COST OF SALES 24 442,260,332 466,141,289
------------------ ------------------
GROSS PROFIT 150,496,768 71,558,616
ADMINISTRATIVE AND SELLING EXPENSES 25 13,657,133 12,605,110
------------------ ------------------
OPERATING PROFIT 136,839,635 58,953,506
OTHER INCOME 26 541,139 1,290,587
------------------ ------------------
137,380,774 60,244,093
OTHER CHARGES
Financial Net 27 49,217,486 45,420,407
Miscellaneous 28 1,058,210 1,147,193
Workers' Profit Participation Fund 4,356,999 683,824
------------------ ------------------
54,632,695 47,251,424
------------------ ------------------
PROFIT BEFORE TAXATION 82,748,079 12,992,669
PROVISION FOR TAXATION
Current 10 5,960,675 4,412,986
------------------ ------------------
PROFIT / (LOSS) AFTER TAXATION 76,787,404 8,579,683
UNAPPROPRIATED PROFIT - BROUGHT FORWARD 45,255,253 46,675,570
------------------ ------------------
PROFIT AVAILABLE FOR APPROPRIATION 122,042,657 55,255,253
APPROPRIATION:
Proposed dividend @32.5% {1999: 10%) 32,500,000 10,000,000
------------------ ------------------
UNAPPROPRIATED PROFIT CARRIED FORWARD 89,542,657 45,255,253
========== ==========
Basic Earning per share 31 7.68 0.86
========== ==========
The annexed notes form an integral part of these accounts.
TANVEER AHMED NASEER AHMED
CHIEF EXECUTIVE DIRECTOR
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER, 2000
2000 1999
Note Rupees Rupees
CASH INFLOW FROM OPERATING
ACTIVITIES (note 'A') 121,965,550 41,287,081
CASH FLOW FROM INVESTING ACTIVITIES
Tangible fixed assets acquired including
leased assets (39,197,975) (38,007,850)
Investment in immovable property 60,000,000 (60,000,000)
Sale proceeds of fixed assets -- 5,571,000
Dividend received 226,915 116,390
Interest received 41,565,360 20,267,221
NET CASH INFLOW / (OUTFLOW) FROM ------------------ ------------------
INVESTING ACTIVITIES 62,594,300 (72,053,239)
CASH FLOW FROM FINANCING ACTIVITIES
Demand finances repaid (44,903,734) (5,767,734)
Finances under mark-up arrangements -- 39,136,000
Lease finances repaid (11,332,496) (5,983,905)
Lease finances obtained 30,367,738 33,481,793
Short term finances - net (109,592,603) 91,204,071
Dividend paid (10,000,000) --
Customs duty/debentures paid -- (2,702,725)
Financial charges paid (71,781,651) (69,592,023)
------------------ ------------------
NET CASH (OUTFLOW)/INFLOW FROM FINANCING
ACTIVITIES (217,242,746) 79,775,477
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (32,682,896) 49,009,319
CASH AND CASH EQUIVALENTS
- At the beginning of the year 144,906,429 95,897,110
------------------ ------------------
CASH AND CASH EQUIVALENTS
- At the end of the year 112,223,533 144,906,429
========== ==========
The annexed note 'A' forms an integral part of this statement.
NOTE 'A'
CASH FLOW FROM OPERATING ACTIVITIES
Profit for the year - Before taxation 82,748,079 12,992,669
Adjustments for:
Depreciation 21,521,393 19,340,392
Provision for gratuity - net 697,427 85,114
Provision for diminution in value of investments (62,928) 275,45'3
Amortisation of deferred income (314,224) (319,739)
Gain on sale of fixed assets -- (854,458)
Financial charges 82,273,206 67,333,881
Interest/profit on deposits and advances (35,378,078) (25,674,741)
Dividend income (226,915) (115.,390)
------------------ ------------------
CASH INFLOW FROM OPERATING ACTIVITIES
- Before working capital changes 151,257,960 73,063,181
(Increase) / decrease in current assets
Stores, spares and loose tools (3,865,760) 535,008
Stock-in-trade 32,342,132 (83,157,066)
Trade debtors 62,775,690 (2,740,656)
Advances, deposits, prepayments and
other receivables (excluding income tax
and accrued interest) (64,415,351) 29,715,870
Sales tax refundable 8,922,304 (6,295,949)
(Decrease) / Increase in creditors, accruals
and other liabilities (excluding accrued
financial charges) (54,615,129) 42,167,874
------------------ ------------------
(18,856,114) (19,774,919)
------------------ ------------------
CASH INFLOW FROM OPERATING
ACTIVITIES - Before taxation 132,401,847 53,288,262
Income tax paid (7,310,850) (9,369,176)
------------------ ------------------
CASH INFLOW FROM OPERATING
ACTIVITIES - After taxation 125,090,997 43,919,085
Long term deposits with leasing companies (3,125,447) (2,632,005)
------------------ ------------------
NET CASH INFLOW FROM OPERATING ACTIVITIES 121,965,550 41,287,081
========== ==========
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30TH SEPTEMBER, 2000
Share Capital Unapprop-
Particulars Capital Reserves riated TOTAL
Rupees
Balance as at 01 October, 1998 100,000,000 25,000,000 46,675,570 171,675,570
Profit for the year -- -- 8,579,683 8,579,683
Dividend Proposed -- -- 10,000,000 10,000,000
------------------ ------------------ ------------------ ------------------
Balance as on September 1999 100,000,000 25,000,000 45,255,253 170,255,253
Profit for year -- -- 76,787,404 76,787,404
Dividend Proposed -- -- 32,500,000 32,500,000
------------------ ------------------ ------------------ ------------------
Balance as on September, 2000 100,000,000 25,000,000 89,542,657 214,542,657
========== ========== ========== ==========
TANVEER AHMED NASEER AHMED
CHIEF EXECUTIVE DIRECTOR
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 30 SEPTEMBER, 2000
1. STATUS AND NATURE OF BUSINESS
The Company was incorporated in Pakistan on 25th February, 1987 as a Public Company and it is
principally engaged in manufacture and sale of yarn. The Company's shares are listed on Lahore
and Karachi Stock Exchanges.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting convention:
These accounts have been prepared under the historical cost convention modified by exchange
rate adjustments as stated in notes 2.3 and 2.5.
2.2 Staff retirement benefits:
The Company operates an un-funded gratuity scheme for its eligible employees. Provision is
made annually to cover obligation under the scheme.
2.3 Foreign currency translation:
Assets and liabilities in foreign currencies are converted into Pak Rupees at exchange tales
ruling on the balance sheet date except where exchange rates have been booked which are
translated at the contracted rates. Exchange fluctuations and exchange risk coverage fee on
principal loans are transferred to cost of assets acquired out of the proceeds of such loans. All
other exchange gains / losses are taken to profit and loss Account.
2.4 Taxation:
Current
Provision for taxation is made at the current rates of taxation.
Deferred
The Company does not account for deferred taxation due to reason stated in note 10.2
2.5 Tangible fixed assets and depreciation thereon:
Operating fixed assets are stated at cost less accumulated depreciation except freehold land
and capital work in progress which are stated at cost. Cost of plant and machinery includes
historical cost, exchange rate fluctuation and exchange risk coverage fee on foreign currency
loans utilized for acquisition thereof.
Depreciation is charged to income applying reducing balance method to write-off the cost,
capitalised exchange fluctuations and exchange risk coverage fee over estimated remaining
useful life of assets. Rates of depreciation are stated in note 12. No depreciation is provided on
assets in the year of disposal where as full year's depreciation is charged in the year of purchase.
However, major additions or extensions to production facilities, effected by capitalization out of
capital work in progress, are depreciated on a pro-rata basis.
Normal repairs and maintenance are taken to profit & loss account. Major improvements and
modifications are capitalized and assets replaced are retired.
Gain on disposal of fixed assets is taken to profit and loss account.
2.6 Assets subject to Finance Lease:
These are stated at cost less accumulated depreciation. Depreciation is charged to income at
the same basis and rates as applicable to the Company's owned assets.
Outstanding obligation under the lease less financial charges allocated to future periods are
shown as liability.
Financial charges are calculated at the interest rate implicit in the lease and are taken to
profit and loss account. However, during construction period of the assets, related financial
charges are capitalised alongwith the cost of assets.
Major gain on sale and lease back transactions are amortised over the lease period and losses,
if any, are charged to profit and loss account.
2.7 Stores and spares:
These are valued at moving average cost. Stores in transit are valued at cost accumulated to
the balance sheet date.
2.8 Stocks-in-trade:
Stocks are valued at lower of cost and net realisable value other than waste stock which is
valued at net realisable value.
Cost in relation to raw materials represents annual average cost whereas cost in relation to
finished goods and work in process represents prime cost and appropriate manufacturing over-
heads. Net realisable value signifies the selling price in the ordinary course of business less
cost of completion and cost necessary to be incurred to effect such sales.
2.9 Long term investments:
These are stated at cost Bonus shares are accounted for by increase in number of shares
without any change in value. Provision is made on permanent devaluation on individual
investment basis.
2.10 Revenue recognition:
- Sales are recorded on despatch of goods to customers.
- Dividend is accounted for an accrual basis.
2.11 Presentation:
The management has reclassified the direct expenses incurred on sales and have deducted
these from sales for presentation in the Profit and Loss Account (Note 23). It has no effect on
profit for the year before taxation.
2000 1999
Note Rupees Rupees
3. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
6,838,330 Ordinary shares of Rs. 10 each
fully paid in cash 68,383,300 68,383,300
3,161,670 Ordinary shares of Rs. 10 each issued
as fully paid bonus shares 31,616,700 31,616,700
------------------ ------------------ ------------------
10,000,000 100,000,000 100,000,000
========== ========== ==========
4. CAPITAL RESERVE
This represents share premium received on 5,000,000 ordinary shares of Rs. 10 each issued
during 1994 at a premium of Rs.5 per share.
5. LONG TERM LOANS AND FINANCES - Secured.
Demand finance -HBL 5.1 25,954,798 31,722,532
Term finance - CITI BANK 5.2 -- 39,136,000
------------------ ------------------
25,954,798 70,858,532
========== ==========
5.1 Habib Bank Limited (HBL):
Demand finances
Principal 37,490,266 43,258,000
Grace period mark-up -- --
------------------ ------------------
37,490,266 43,258,000
Less: Paid during the year 5,767,734 5,767,734
------------------ ------------------
31,722,532 37,490,266
Less: Current portion of demand finances
under current liabilities 5,767,734 5,767,734
------------------ ------------------
25,954,798 31,722,532
========== ==========
5.1.1 Demand finances:
a) These Finances have been created for adjustment of all overdues and future dues of
HBL long term loan of Pak rupees against the credit line is US $ 5.525 million con-
verted into Pak rupees at-the exchange rates prevailing on disbursements dates, which
fell due for payment till 15 January, 1998.
b) These finances carry mark-up @ 13% per annum. Such computed mark-up till 15 Janu-
ary, 1998 was capitalised towards the principal amount of the finances. These finances
are repayable in 17 equal half-yearly installments commencing 15 January, 1998.
c) These finances are secured by first charge on fixed assets of the Company, pledge of
Company's share owned by the sponsoring directors and personal guarantees of all the
directors.
d) In case of default in repayment of any two consecutive installments, the agreement for
adjustment of overdue liabilities shall automatically stand cancelled and HBL Will have
the right to claim all long term loan's dues in lump sum in accordance with the original
agreement terms.
2000 1999
Rupees Rupees
5.2 Term Finance - Citi Bank:
Balance as on 1st October 39,136,000 --
Received during the year -- 39,136,000
------------------ ------------------
39,136,000 39,136,000
Less: Repaid during the year (39,136,000) --
------------------ ------------------
-- 39,136,000
========== ==========
The loan has been fully paid during the year before the maturity date.
6. OBLIGATION UNDER FINANCE LEASE - Secured
Balance amounts of future lease payments and the periods during which they will fall due are:
Accounting year ending:
1999 - 2000 -- 15,094,723
2000 - 2001 24,842,027 15,060,517
2001 - 2002 23,287,526 14,251,446
2002 - 2003 20,858,384 11,522,304
2003 - 2004 9,137,496 --
------------------ ------------------
78,125,433 55,928,990
Less: Finance charges:
Allocated to future periods 19,507,344 16,346,143
------------------ ------------------
Principal out standing as at 30th September, 2000 58,618,089 39,582,847
========== ==========
Classified as under:
Long term portion 43,229,717 31,403,562
Current portion 15,388,372 8,179,285
------------------ ------------------
58,618,089 39,582,847
========== ==========
6.1 The company has executed lease agreements with First Habib Modaraba, A1-Zamin Modaraba,
First Professional Modaraba, Net Work Leasing, Orix Leasing Corp, Trust Leasing Corpora-
tion Ltd, Paramount Leasing, Crescent Leasing and Dawood Leasing, to acquire plant &
machinery and vehicles. The liability under the lease agreements is payable by September,
2004 and is subject to finance charges at the rates ranging from 13.39% to 21.60% per annum
Fine, in case of default on overdue installments, is payable at the rate of Rs. 500 per day and
at the rate of 0.1%. The Company intends to exercise its option to purchase the leased plant
& machinery and vehicles upon completion of respective lease periods. The lease liability is
secured against personal guarantees of company's directors and promissory notes.
7. CURRENT PORTION OF LONG TERM LIABILITIES
Demand Finances 5.1 5,767,734 5,767,734
Liabilities against assets subject to finance lease 6 15,388,372 8,179,285
------------------ ------------------
21,156,106 13,947,019
========== ==========
8. SHORT TERM FINANCES -Secured
Financial Institutions and Modarabas 8.1 71,000,000 87,220,825
Commercial Banks. 8.2 177,091,445 270,463,222
------------------ ------------------
248,091,445 357,684,048
========== ==========
8.1 Short term finance facilities under mark - up arrangements aggregating to Rs. 141.329 M
(1999: Rs. 101.890 M) were availed during the year of which facilities aggregating to
Rs. 168.94 M (1999: Rs. 102 million) were available as at 30th September, 2000. Under these
arrangements goods owned by the Company are sold to these Institutions and are deemed to
be immediately repurchased by the Company at mark-up price computed at rates ranging
from Re. 0.22 to Re. 0.60 per Rs. 1,000 per day.
The aggregate facilities are secured by an equitable mortgage of fixed assets, hypothecation
/ pledge of Company's stock - in - trade, charge on book debts, bank guarantees, personal
guarantees of the sponsoring directors, pledge over quoted Shares and demand promissory
notes. The societies are expiring on various dates by 16, June, 2000.
8.2 Short Tern Finance facilities available from Commercial Banks under mark-up arrangements
aggregate Rs. 599.2 million (1999: Rs. 409.800 million). These facility carry mark-up rate
range from Re. 0.22 to Re. 0.60 (1999: Re. 0.47 to Re. 0.55) per Rs. 1,000 per day. Facilities
available for opening letters of credit and for issuance of bank guarantees aggregate
Rs. 45.996 million. (1999: Rs. 49.240 million}
The aggregate facilities are secured by an equitable mortgage of fixed assets, pledge /
hypothecation of stock-in-trade, charge over book debts, personal guarantees of some of the
directors, pledge of term deposit receipts / foreign exchange Bearer Certificates and lien on
import and export documents. These facilities are expiring on various date by 17, November,
2000.
8.3 The company had filed constitutional petitions in the High Courts of Sindh and Lahore against
levy of Central Excise Duty on loans from banks / financial institutions. The total excise duty
not provided in the accounts up to 30 September 2000 amounting to Rs. 5.10 million (1999:
Rs. 5.077 million) is included in Advances, Deposits, Pre-payments and other receivables.
(Note 20) The High Court of Sindh has decided the case in favour of the company whereas the
petition in the Lahore High Court is pending for adjudication.
9. CREDITORS, ACCRUALS AND OTHER LIABILITIES
Creditors 9.1 14,532,784 19,910,422
Accrued expenses 9.2 4,177,962 14,765,002
Foreign bills payable -- 37,386,771
Advance Payments 5,371,912 1,578,467
Interest accrued on Associated Undertakings' balances 1,045,271 --
Mark-up on secured:
Long term finances 771,201 1,049,018
Short term finances 8,234,326 7,137,297
Tax deducted at source 1,003 209,672
Worker's (Profit) Participation Fund 9.3 4,356,999 683,824
Unclaimed Dividend 466,251 360,812
Sales tax payable 467,569 467,568
------------------ ------------------
39,425,278 83,548,853
========== ==========
9.1 This include Rs. 7,018,042 (1999: Rs. Nil) relates to associated undertaking.
9.2 These include Rs. Nil (1999: Rs. 10.462 Million) due to Gulistan Power Generation Limited
(an Associated Undertaking) against supply of electricity to the Company. Mark-up is charged
@ 0.55 paisa per thousand per day after expiry of normal credit period.
9.3 Worker's Profit Participation Fund:
Opening balance 683,824 105,224
Interest for the year 45,797 7,063
------------------ ------------------
729,621 112,287
Less: Payments made during the year 729,621 112,287
------------------ ------------------
-- --
Contribution for the year 4,356,999 683,824
------------------ ------------------
Balance as on September 30, 2000 4,356,999 683,824
========== ==========
10. PROVISION FOR TAXATION - Net
Opening balance 4,412,986 6,075,094
Provision made during the year
Current year 5,960,675 4,412,986
Less: Adjusted during the year           -- 6,075,094
------------------ ------------------
10,373,661 4,412,986
========== ==========
10.1 Income tax assessment of the Company have been finalised upto the income year ended
September 30, 1998 (assessment year 1999-2000).
10.2 In view of the fact that major portion of Company's Tax liability attracts the provisions of
section 80--CC of the Income Tax Ordinance, 1979 and a reasonable estimate of Company's
Income for future years which will attract normal provisions of Income Tax Ordinance, 1979
is not practicable to estimate as at 30 September, 2000, no provision for deferred taxation
has been made in these accounts.
11. CONTINGENCIES AND COMMITMENTS:
11.1 Counter guarantees given by the Company to its bankers as at 30 September, 2000 were
outstanding for Rs. 0.686 million (1999: Rs. 13.021 million).
11.2 Refer contents of notes 5.1 and 8.3.
11.3 Commitments for irrevocable letters of credit outstanding as at 30 September, 2000 were as
follows:-
Capital expenditure 0.347 3.908
Others 2.112 28.559
------------------ ------------------
2.459 32.467
========== ==========
12. OPERATING FIXED ASSETS - TANGIBLE
AS AT SEPTEMBER, 2000
COST DEPRECIATION Net Book Value
PARTICULARS AS AT ADDITIONS DISPOSALS AS AT RATE AS AT FOR AS AT AS AT
30 SEPT. 30 SEPT. % 30 SEPT. THE ON 30, SEPT. 30 SEPT.
1999 2000 1999 YEAR DISPOSALS 2000 2000
(A) OWNED
Land-Freehold 3,180,032 -- -- 3,180,032 -- -- -- -- -- 3,180,032
Building on Free Hold Land 67,965,503 3,041,005 -- 71,006,508 10 35,759,052 3,524,746 -- 39,283,798 31,722,710
Plant & Machinery 241,604,158 3,098,844 -- 244,703,002 10 141,776,152 10,292,685 -- 152,068,837 92,634,165
Electric Installations 15,920,918 -- -- 15,920,918 10 9,114,556 680,636 -- 9,795,192 6,125,725
Mills Equipment 7,183,349 372,825 -- 7,556,174 10 3,309,445 424,673 -- 3,734,118 3,822,056
Air Conditioning Plant 7,560,657 -- -- 7,560,657 10 4,991,048 256,961 -- 5,248,009 2,312,648
Telephone Installations 160,000 -- -- 160,000 10 105759 5,424 -- 111,183 48,817
Office Equipment 45,915 65,600 -- 111,515 10 13,774 9,794 -- 23,271 88,244
Furniture & Fixture 2,027,380 56,000 -- 2,083,380 10 1,133,663 94,972 -- 1,228,635 854,745
Vehicles 1,338,643 804,740 -- 2,143.38 20 868,607 254,955 -- 1,123,562 1,019,821
Arms 6,230 -- -- 6,230 10 3,251 298 -- 3,549 2,681
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
346,992,785 7,439,014 -- 354,431,799 197,075,010 15,545,144 -- 212,620,154 141,811,646
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
(B) LEASED
Plant & Machinery 46,521,950 30,048,738 -- 76,570,686 10 3,654,722 5,858,049 -- 9,512,771 67,057,917
Vehicles 425,000 319,000 -- 744,000 20 153,000 118,200 -- 271,200 472,800
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
46,946,950 30,367,738 -- 77,314,688 -- 3,807,722 5,976,249 -- 9,783,971 67,530,717
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
2000 Rupees 393,939,735 37,806,752 -- 431,746,487 200,882,732 21,521,393 -- 222,404,125 209,342,363
========== ========== ========== ========== ========== ========== ========== ========== ========== ==========
1999 Rupees 364,488,705 70,030,623 40,579,593 393,939,735 187,125,030 19,340,392 5,582,590 200,882,832 193,056,903
========== ========== ========== ========== ========== ========== ========== ========== ========== ==========
12.1Exchange risk coverage fee, till 30 September, 1996, was being capitalised as plant and machinery
additions. Had exchange risk coverage fee capitalised in prior years been properly taken to Profit and Loss Account, 
unappropriated profit as at 30 September, 2000 would have been lower by Rs. 1,045,936 (1999: Rs. 1,162,151).
12.2 Depreciation for the year has been allocated as follows:-
2000 1999
Rupees Rupees
Cost of Sales 21,043,174 19,051,657
Administrative and selling expenses 478,219 288,735
------------------ ------------------
21,521,393 19,340,392
========== ==========
13. CAPITAL WORK IN PROGRESS
Plant & Machinery
Owned -- 3,719,270
Leased in Transit 4,117,539 --
Letters of credit 346,546 --
------------------ ------------------
4,464,085 3,719,270
========== ==========
14. INVESTMENTS IN IMMOVABLE PROPERTY
During the year, the transaction of purchase of immovable property was reversed by an order of
Securities & Exchange Commission of Pakistan (SECP) No. 19 (792) CF/ISS/94 dated 29 August
2000. The company would recover the amount of Rs. 60.0 million before 30 September 2001
alongwith markup at rate not lower than its borrowing cost as directed by SECP.
15. LONG TERM INVESTMENTS - At cost
Associated Companies
Listed:
Gulistan Textile Mills Ltd.
700 ordinary shares of Rs. 10/- each
Market Value Rs. 25,025 (1999: Rs. 25,375) 118,140 118,140
Gulshan Spinning Mills Ltd.
5,865 ordinary shares of Rs. 10/- each
Market value Rs. 143,693 (1999: Rs. 79,177} 262,925 262,925
Un-listed:
Gulshan Weaving Mills Ltd.
778,900 ordinary shares of Rs. 10/- each
Equity held 13.09%
Net worth based on audited accounts for the year
ended 30 September 1999, Rs. 11,720,560 7,789,000 7,789,000
Gulistan Power Generation Ltd.
110,000 ordinary shares of Rs. 10/- each
including 10,000 bonus shares
Net worth based on audited accounts for the year
ended 30 June 2000, Rs. 4,048,213/- 1,000,000 1,000,000
(1999: Rs. 3,574,612/-
Others Listed:
Pakistan International Airlines Corporation
208 (A) ordinary shares of Rs. 10/- each
Market value Rs. 1,352 (1999: Rs. 2,590) 1,530 1,530
------------------ ------------------
9,171,595 9,171,595
Less: Provision for diminution in value of investment 212,525 275,453
------------------ ------------------
8,959,070 8,896,142
========== ==========
16. LONG TERM DEPOSITS
Deposits with leasing companies 7,833,477 4,871,703
Security deposits 1,304,764 1,141,091
------------------ ------------------
9,138,241 6,012,794
========== ==========
17. STORES, SPARES AND LOOSE TOOLS
Stores 3,660,659 3,116,099
Spares 2,113,812 1,050,086
Loose tools 571,142 405,654
Stores - in - transit 2,112,200 20,214
------------------ ------------------
8,457,813 4,592,053
========== ==========
17.1 The company does not hold any stores for specific capitalisation.
15. STOCK - IN - TRADE
Raw materials:
Including in transit Rs. Nil (1999: Rs. 58,652,299) 53,181,058 76,224,932
Work - in - process 4,622,410 12,724,191
Finished goods
Yarn:
- At mills 11,302,384 29,405,743
- In transit 13,823,530 4,320,870
- With Associated Undertaking 6,021,349 123,456
Waste 1,551,821 45,492
------------------ ------------------
32,699,084 33,895,561
------------------ ------------------
90,502,552 122,844,684
========== ==========
19. TRADE DEBTORS
Unsecured - Considered good:
Local 35,647,093 13,446,181
An Associated undertaking 19.2 11,247,100 40,658,963
------------------ ------------------
46,894,193 54,105,144
Secured:
Foreign bills 4,562,452 60,127,191
------------------ ------------------
51,456,645 114,232,335
========== ==========
19.1 Maximum amount due from Associated Undertakings at the end of any month during the
year was Rs. 46.170 million (1999: Rs. 40.659 million}.
19.2 Reliability of amounts due from Associated Undertaking has been accepted by the Auditors
on Management's certification.
20. ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
Advance payments - Considered good 14,822,789 14,451,507
Advances to staff - Considered good 20.1 1,366,623 297,301
Due from Associated Undertakings 20.2 & 20.4 28,185,055 24,771,876
Deposits -- 2,865,386
Prepayments -- 195,209
Advance against electricity supply - GPG 20.3 1,202,683 --
Interest accrued on advances to Associated Undertakings 9,410,133 11,834,685
Short Term Loan 2,629,704 2,176,817
Tax deducted at source 16,680,026 9,369,176
Interest accrued on short term loan 548,609 452,887
Interest accrued - others 2,421,312 6,279,765
Central excise duty deducted by commercial
banks and financial institutions - Refundable 8.3 5,099,753 5,077,455
Other 2,746,836 1,802,541
Receivable from associated undertaking - GTM 60,000,000 --
------------------ ------------------
145,113,523 79,574,605
========== ==========
20.1 Maximum aggregate amount due from the Executives at any month end during the year was
Rs. Nil (1999: Rs. Nil).
20.2 Associated Undertakings
(a) Mark-up @ Rs. 0.55 per Rs. 1,000 per day has been charged on balances due from Asso-
ciated Undertakings.
(b) Maximum aggregate amount due from the Associated Undertakings at any month end
during the year was Rs. 28.822 (1999: Rs. 25,852 million)
20.3 The company has given advance against electricity to its associated undertaking Gulistan
Power Generations Limited.
20.4 Aggregate transactions made during the year with the Associated undertakings were as
follows:
Purchases from Associated undertakings:
-- Electricity 60,463,777 53,950,823
-- Cotton 1,726,278 1,062,230
-- Yarn 8,259,483 12,919,120
-- Store 439,000 --
-- Others 3,730,267 465,138
Sales to Associated Undertakings:
-- Yarn 11,177,178 12,299,395
-- Cotton 2,976,968 27,299,395
-- Waste -- 5,793,066
Mark-up earned 14,211,044 13,168,946
Mark-up allowed 1,045,271 993,189
Dividend received 226,915 116,390
Property purchased -- 60,000,000
Property reversed 60,000,000 --
21. SHORT TERM INVESTMENTS
Crescent Bank deposit certificates 21.1 181,874 2,391,948
Investment in FEBC -- 106,650
HBL Crore Pati Investment -- 400,000
US $ bonds 21.1 -- 41,120,000
Askari Commercial Bank Ltd. 5,000,000 --
NDFC SCD 481,810 --
------------------ ------------------
5,663,684 44,018,598
========== ==========
21.1 These are pledged with various commercial banks against financial facilities provided to and
guarantees issued by them on behalf of the Company.
22. CASH AND BANK BALANCES
Cash-in-hand 746,564 748,014
Cash at banks on:
Current accounts - including foreign currency
accounts US$ 1140 (1999: $ 14,750) 31,939,604 21,273,508
PLS term deposit accounts - including foreign
currency account US$ 137 (1999: $ Nil) 22.1 73,873,681 78,866,309
------------------ ------------------
106,559,849 100,887,831
========== ==========
22.1 These include Rs. NIL (1999: Rs. 0.825 million) held by banks against guarantees issued by
them on behalf of the Company.
22.2 Foreign currency balances have been converted into Pak Rupees at the exchange rate
prevailing in balance sheet date.
23. SALES- net
Export Sales 23.1 481,943,140 399,419,883
Local Sales 23.2 110,813,960 138,280,022
------------------ ------------------
592,757,100 537,699,905
========== ==========
23.1 Export Sales
Yarn 511,783,508 426,359,785
Less: Direct Expenses
Commission 7,795,993 6,489,825
Freight and handling 20,766,707 19,470,899
Export Development Surcharge 1,277,668 979,178
------------------ ------------------
29,840,368 26,939,902
------------------ ------------------
481,943,140 399,419,883
========== ==========
23.2 Local Sales:
Yarn 112,575,024 139,166,621
Less: Direct Expenses:
Commission 998,940 716,347
Freight and Octroi 762,124 170,252
------------------ ------------------
1,761,064 886,599
------------------ ------------------
110,813,960 138,280,022
========== ==========
23.2 (a) Yarn local sales have been shown after deduction of sales tax for the year aggregating
to Rs. 19,725,436 (1999: Rs. 22,791,171).
24. COST OF SALES
Raw materials consumed 24.1 286,147,359 342,838,590
Yarn Purchase 8,259,483 12,919,120
Yarn Processed 3,730,267 --
Salaries, Wages and Benefits 25,071,788 24,632,871
Stores consumed 11,861,150 8,031,330
Packing materials 11,627,402 11,570,625
Fuel and power 60,460,242 53,936,145
Insurance 1,838,639 1,981,847
Repair and maintenance 1,588,830 1,461,680
Depreciation 21,043,174 19,051,657
Other manufacturing expenses 1,333,740 1,219,210
------------------ ------------------
432,962,074 477,643,075
========== ==========
Adjustment of work - in - process:
Opening 12,724,191 11,477,278
Closing (4,622,410) (12,724,191)
------------------ ------------------
8,101,781 (1,246,913)
------------------ ------------------
Cost of goods manufactured 441,063,855 476,396,162
Adjustment of finished goods:
Opening Stock 33,895,561 23,640,688
Closing Stock (32,699,084) (33,895,561)
------------------ ------------------
1,196,477 (10,254,873)
------------------ ------------------
442,260,332 466,141,289
========== ==========
24.1 Raw materials consumed:
Opening stock 17,572,633 4,569,652
Purchases (net of waste sales Rs. 16,795,186
(1999: Rs. 17,989,927) 321,755,784 355,841,571
------------------ ------------------
339,328,417 360,411,223
Less: Closing stock 53,181,058 17,572,633
------------------ ------------------
286,147,359 342,838,590
========== ==========
25. ADMINISTRATIVE AND SELLING EXPENSES
Administrative:
Salaries and benefits 5,102,229 4,264,420
Communication 893,368 782,553
Printing and stationery 225,745 251,053
Electricity 304,242 226,860
Travelling and conveyance - including
directors Rs. 194,409 (1999: Rs. 141,576) 1,359,188 838,990
Vehicles running and maintenance 208,089 173,270
Repair and maintenance 293,054 132,078
Fees and subscription 118,766 267,741
Rent, rates and taxes 36,383 47,603
Depreciation 478,219 288,735
Advertisement 61,830 27,943
Insurance 296,616 74,432
Other Expenses 776,104 864,027
------------------ ------------------
10,153,833 8,239,705
Selling:
Salaries 569,472 335,846
Communication 332,301 291,457
Others 2,601,527 3,738,102
------------------ ------------------
3,503,300 4,365,405
------------------ ------------------
13,657,133 12,605,110
========== ==========
25.1 Above expenses include expenses aggregating to Rs. 9.60 million (1999: Rs. 7.627 million} on
account of combined office expenses shares with Associated Undertaking. These expenses
have been booked in the respective head of account.
26. OTHER INCOME
Dividend Income (Associated undertaking) 226,915 116,390
Profit on sale of Fixed Assets -- 854,458
Amortisation of deferred income net 314,224 319,739
------------------ ------------------
541,139 1,290,587
========== ==========
27. FINANCIAL CHARGES - Net
Mark-up/Interest on:
Long term finances 7,647,060 5,357,579
Short term finances 64,118,360 55,607,180
Associated Undertakings' balances 1,045,271 993,189
Worker's (profit) Participation Fund 45,797 7,063
Lease Finance charges 9,462,515 5,375,933
Bank charges 1,992,191 3,057,345
Commission on bank guarantees 275,053 649,394
Zakat 9,316 47,465
------------------ ------------------
84,595,563 71,095,148
Less return profit on:
PLS deposits with banks 7,157,503 369,825
Associated Undertakings' 14,211,044 13,168,946
Cres Bank Deposit Certificates 322,821 349,214
Foreign Exchange Bearer Certificates 29,801 73,289
Profit on US Bound 3,554,276 62,883
Short term loan 548,609 452,887
Profit on ABL Deposits 5,665,947 11,472,096
Exchange gain on investments 3,888,076 (274,399)
------------------ ------------------
35,378,077 25,674,741
------------------ ------------------
49,217,486 45,420,407
========== ==========
28. MISCELLANEOUS
Auditor's remuneration
Audit fee 75,000 60,000
Other services 20,000 20,000
Out-of-pocket expenses 21,393 12,666
Legal and professional (other than Auditors) 603,745 254,574
Donations 28.1 401,000 524,500
Provision for diminution in value of investment (62,928) 275,453
------------------ ------------------
1,058,210 1,147,193
========== ==========
28.1 This includes amount of Rs. 335,000 (1999- Rs. 513,000) donated to Haji Jamal-ud-Din
Charitable Trust. Following Directors of the Company are also Trustees of this Trust.
Mr. Abdul Shakoor
Mr. Naseer Ahmed
Mr. Tanveer Ahmed
Mr. N. R. Siddiqui
29. FINANCIAL INSTRUMENT AND RELATED DISCLOSURE
29.1 Interest Rate Risk Exposure:
The company's exposure to interest rate on its financial assets and liabilities as at
30 September, 2000 are summarized as follows:
2000 1999
RUPEES
INTEREST BEARING NON-INTEREST BEARING
Upto one More than Sub Upto one More than Sub Total
Year One Year Total Year One Year Total TOTAL TOTAL
FINANCIAL ASSETS
Investments at Cost -- -- -- -- 9,171,595 9,171,595 9,171,595 9,171,595
Long term loans and
deposits -- -- -- -- 1,304,764 1,304,764 1,304,764 1,141,091
Trade debtors -- -- -- 51,456,645 -- 51,456,645 51,456,645 114,232,334
Loans, advances, deposits -- -- -- 122,131,061 -- 122,131,061 122,131,061 62,832,923
Short term investment 5,663,684 -- 5,663,684 -- -- -- 5,663,684 44,018,598
Cash and bank balances  73,873,681 -- 73,873,681 32,686,168 -- 32,686,168 106,559,849 100,887,831
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
79,537,365 -- 79,537,365 206,273,875 10,476,359 216,750,234 296,287,599 332,284,372
========== ========== ========== ========== ========== ========== ========== ==========
FINANCIAL LIABILITIES
Long term loans 5,767,734 25,954,798 31,722,532 -- -- -- 31,722,532 76,626,266
Obligation under finance
leases 15,388,372 43,229,717 58,618,089 -- -- -- 58,618,089 39,582,847
Gratuity -- -- -- -- 5,160,306 5,160,306 5,160,306 4,462,879
Short term finances 248,091,445 -- 248,091,445 -- -- -- 248,091,445 357,684,048
Creditors, provisions &
Accruals -- -- -- 38,490,455 -- 38,490,455 38,490,455 80,248,509
Dividend -- -- -- 466,251 -- 466,251 466,251 360,812
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
269,247,551 69,184,515 338,432,066 38,956,706 5,160,306 44,117,012 382,549,079 558,965,361
========== ========== ========== ========== ========== ========== ========== ==========
On Balance Sheet gap (189,710,186) (69,184,515) (258,894,70l) 167,317,168 5,316,053 172,633,221 (86,261,480) (226,680,989)
========== ========== ========== ========== ========== ========== ========== ==========
29.2 Effective Interest Rates:
2000 1999
Financial Assets: % %
Short term investment 6.71% to 15.50% 6.71% to 15.50%
Cash and bank balances 5.00% to 7.90% 5.00% to 7.90%
Financial Liabilities:
Long term loans 12.00% to 13.00% 12.00% to 13.00%
Obligation under finance leases 17.46% to 24.00% 17.46% to 24.00%
Short term finances 8.00% to 22.00% 8.00% to 22.00%
29.3 Concentration of Credit Risks:
The credit risk represents the accounting loss that would be recognized at the reporting date if
counter parties failed to perform as contracted. Out of the total financial assets of Rs. 296.288
million (1999: 332.284 million) the financial assets which are subject to credit risk amounted to
Rs. 295.514 million (1999- Rs. 331.536 million).
The company believes that it is not exposed to major concentration of credit risk. To manage
exposure to credit risk, the company applies credit limits to its customers.
29.4 Fair Value of Financial Instruments:
The carrying value of all the financial instruments reflected in the financial statements
approximates their fair values.
30. REMUNERATION OF A DIRECTOR AND EXECUTIVES
PARTICULARS DIRECTOR EXECUTIVE
2000 1999 2000 1999
Managerial remuneration -- 303,333 1,250,500 1,112,064
Retirement benefits -- -- -- --
House rent and utilities -- 151,667 500,200 444,828
Medical & other allowance -- -- 75,030 177,888
------------------ ------------------ ------------------ ------------------
Rupees -- 455,000 1,825,730 1,734,780
------------------ ------------------ ------------------ ------------------
No. of person -- 1 8 8
========== ========== ========== ==========
30.1 No remuneration or meeting fee was paid to the Chief Executive and Directors excluding
the director's remuneration disclosed above. The Director and two executives are also
provided with company maintained car.
2000 1999
31. EARNING / (LOSS) PER SHARE
Net Profit / (Loss) after taxation for the year attributable
to Ordinary Shareholders 76,787,404 8,579,683
========== ==========
No. of Shares outstanding 10,000,000 10,000,000
========== ==========
Basic Earning per Share 7.68 0.86
========== ==========
2000 1999
Note Rupees Rupees
32. NUMBER OF EMPLOYEES
Average number of person employed during the year. 486 471
========== ==========
33. CAPACITY AND PRODUCTION
No. of Spindles installed Nos. 19,200 19,200
No. of Spindles shifts worked Nos. 21,011,160 20,834,920
Installed capacity - 20's count
based on 1,092 (1999: 1,092) shifts Kgs. 6,730,165 6,730,165
All counts production Kgs. 4,932,334 4,371,901
Production converted into 20's count Kgs. 6,969,190 6,737,889
No. of Shifts worked Nos. 1,092 1,092
It is difficult to describe precisely the production capacity in textile industry since sit fluctuates
widely depending upon various factors such as count of yarn spun, spindles speed, twist per inch
and raw materials used, etc.
34. PRESENTATION
- Figures in these accounts have been rounded - off to the nearest rupee:
- Corresponding figures have been re-arranged wherever necessary for the purpose of
comparison.
TANVEER AHMED NASEER AHMED
CHIEF EXECUTIVE DIRECTOR
PATTERN OF SHARE HOLDING
AS AT 30TH SEPTEMBER, 2000
NO. OF SHARE TOTAL
HOLDER SHARES HOLDING SHARE HELD
193 1 To 100 19,300
775 101 To 500 368,600
71 501 To 1000 70,200
91 1001 To 5000 252,516
23 5001 To 10000 211,751
13 10001 To 15000 160,100
8 15001 To 20000 146,675
1 20001 To 25000 22,000
5 25001 To 30000 139,549
2 30001 To 35000 67,000
0 35001 To 40000 --
1 40001 To 45000 42,375
0 45001 To 55000 --
1 55001 To 60000 59,006
0 60001 To 65000 --
1 65001 To 70000 67,618
1 70001 To 75000 70,500
1 75001 To 80000 76,859
1 80001 To 85000 81,625
2 85001 To 90000 174,495
1 90001 To 95000 92,082
0 95001 To 100000 --
1 100001 To 105000 100,506
1 105001 To 110000 108,000
0 110001 To 115000 --
1 115001 To 120000 120,006
0 120001 To 135000 --
2 135001 To 140000 274,492
1 140001 To 145000 141,500
0 145001 To 205000 --
1 205001 To 210000 208,829
0 210001 To 235000 --
1 235001 To 240000 235,959
1 240001 To 245000 243,199
0 245001 To 385000 --
1 385001 To 390000 386,238
1 390001 To 395000 392,000
0 395001 To 440000 --
1 440001 To 445000 443,000
0 445001 To 475000 --
1 475001 To 480000 479,429
0 480001 To 595000 --
1 595001 To 600000 595,079
1 600001 To 610000 606,658
0 610001 To 695000 --
1 695001 To 700000 700,000
0 700001 To 2450000 --
0 2450001 To 2455000 --
0 2455001 To 2840000 --
1 2840001 To 2845000 2,842,875
------------------ ------------------
1,208 10,000,000
========== ==========
Ctgr. Number of Share Percentage
Code Description Shareholders Held
1. Individuals 1,174 5,688,226 56.88
2. Insurance Companies 3 50,000 0.50
3. Joint Stock Companies 20 3,497,474 34.97
4. Financial Institutions 4 598,000 5.98
5. Modaraba Companies 1 27,500 0.28
6. Foreign Investors 3 12,000 0.12
7. Leasing Companies 1 8,000 0.08
8. Investment Companies 1 18,300 0.18
9. Others 1 100,500 1.01
------------------ ------------------ ------------------
1,208 10,000,000 100.00
========== ========== ==========
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