| Gulistan Spinning 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 |
Mr. Tanveer Ahmed |
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| DIRECTORS |
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Mr. Naseer Ahmed |
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Mr. N. R. Siddiqui |
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Mr. Mohammad Abdullah |
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Mr. Riaz Ahmed |
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Mr. Muhammad Younus |
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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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| REGISTERED
OFFICE |
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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JUMBER KHURD |
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TEHSIL CHUNNIAN |
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DISTT. KASUR |
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| NOTICE
OF THE ANNUAL GENERAL MEETING |
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| NOTICE
IS HEREBY GIVEN THAT THE ANNUAL GENERAL MEETING OF THE SHAREHOLDERS OF THE |
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| COMPANY
WILL BE HELD ON 28TH MARCH 2001 AT 3 P.M. AT THE ROOF TOP OF FINLAY HOUSE, I.
I. |
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| CHUNDRIGAR
ROAD, KARACHI TO TRANSACT THE FOLLOWING BUSINESS:- |
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| 1.
to confirm the minutes of the preceding meeting of the shareholders of the
company. |
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| 2.
to receive consider and adopt the Audited Accounts of the Company for the
year ended 30.09.2000 |
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| together
with the Directors and Auditors Reports 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 remunera- |
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| tion.
The present Auditors Messrs Hameed Chaudhri and Company, Chartered
Accountants being |
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| eligible
for appointment offered themselves for 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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| (56)
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 meeting |
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| of
the Directors or a Committee of Directors shall from time to time be
determined and / or confirmed |
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| by
the Directors. |
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| 6.
Any other matter with the permission of the Chairman. |
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By order of the Board |
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| Karachi.:
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 27-03-2001 to
02-04-2001 (both |
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| days
inclusive). Dividend if approved will be paid to such members only whose name
appear in |
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| the
register of the company as at the close of 26-03-2001. |
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| 2)
Proxies in order to be effective must be received duly complete in all
respects by the company at |
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| the
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 |
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| currently
available with the company. |
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| 4)
Any individual beneficial owner of CDC, entitled to vote at this meeting must
bring his/her original |
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| NIC
with him/her to prove him/her to prove his/her identity, and in case of
proxy, a copy of |
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| shareholders
attested NIC must be attached with proxy form. Representatives of corporate
members |
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| should
bring the usual documents required for such purposes. |
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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 |
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| the
article provided for the appointment of the Chief Executive of the Company.
The Director have no |
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| special
interest in it. |
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| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
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| Dear
Shareholders, |
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| Assalam
O Alaikum, |
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| It
is of pleasure to present before you the annual report alongwith audited
Accounts of the Company for |
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| the
year ended 30.9.2000. |
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| OVERVIEW: |
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| As
reported in our half yearly review the bumper cotton crop for the year
1999-2000 season enabled the |
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| spinning
industry to come out of the crises which it was facing due to shortage of
cotton. Sufficient |
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| production
of cotton and Government's prudent policy of open market enabled the local
spinning industry |
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| to
obtain cotton on competitive prices. This has resulted in the increase of
sales and profitability to 592 |
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| Million
and 82.7 Million in comparison to the last year's from 537 Million and 12.9
Million respectively. |
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| Following
are the key numbers. |
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Rupees in |
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Million |
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| Sales Net |
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|
592.75 |
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| Gross Profit |
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|
150.49 |
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| Profit
for the year before taxation |
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82.74 |
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| Profit
for the year after taxation |
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76.78 |
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| Unappropriated
profit brought forward |
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45.25 |
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| Profit
available for appropriation |
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122.04 |
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| UNAPPROPRIATION: |
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| Cash
dividend proposed @ 32.5% |
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32.50 |
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| Unappropriated
profit carried forward |
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89.54 |
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| In
the preceding year the Company had purchased property to meet its office
requirement in a reputed |
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| building
in Karachi from one of its associated companies. The Securities and Exchange
Commission of |
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| Pakistan
objected the transaction and with the .object to make compliance to their
directives the |
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| transaction
has been reversed in consultation with the associated company. |
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| FUTURE
OUTLOOK: |
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| As
is evident from the results of the year under review, the success of textile
industry is dependent |
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| upon
availability of raw cotton on reasonable rates. This year again the prices of
cotton have increased |
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| by
about 60% as compared to the last year prices. Export refinance has been
withdrawn. The rates of |
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| borrowing
by the financial institutions have also increased. Under these apparent
adverse circumstances, |
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| your
Directors are try their best to control the cost escalation by increasing the
production and sale. |
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| BALANCING
MODERNIZATION AND REPLACEMENT: |
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| Being
conscious of the fact that customers both in home and foreign markets demand
quality yarn, your |
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| Directors
are continuously engage in balancing modernizating and wherever necessary
replacement |
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| to
ensure that your Company produces such a product which suits to the
requirement of the buyer. To |
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| achieve
this object the Company invested an amount of about Rs.33 Million on BMR in
the year under |
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| review. |
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| BREAK-UP
VALUE AND EARNING PER SHARE: |
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| The
earning per share for the current year is Rs.7.68 in comparison to Rs.0.86 of
the preceding year. |
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| This
reflects the earning potential of your Company. The break-up value of the
share of the Company has |
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| risen
from 17.02 to 21.45 of the last year, |
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| PATTERN
OF SHAREHOLDING: |
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| Statement
showing the pattern of shareholding as on 30-09-2000 is enclosed. |
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| AUDITORS: |
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| M/s.
Hameed Chaudhri & Co. Chartered Accountant being the auditors of the
Company retire and have |
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| offered
themselves for reappointment being eligible for it for the year 2000 - 2001. |
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| THANKS: |
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| Our
thanks are due to the members of our staff for their dedicated services and
to all of them who |
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| extended
cooperation & assistance. |
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BY ORDER OF THE BOARD |
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| Karachi |
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|
TANVEER 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 Spinning Mills Limited as
at September 30, |
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| 2000
and the related profit and loss account, the cash flow statement and the
statement of changes in |
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| equity,
together with the notes forming part thereof, for the year then ended and we
state that we have |
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| obtained
all the information and explanations which to the best of our knowledge and
belief, were |
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| necessary
for 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 Com- |
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| panies
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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|
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| (ii)
the expenditure incurred during the year was for the purpose of the company's
business; 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. |
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| (c)
in our opinion and to the best of our information and according to the
explanations given to us, |
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| the
balance sheet, profit and loss account, cash flow statement and statement of
changes in eq- |
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| uity
together with the notes forming part thereof conform with approved accounting
standards as |
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| applicable
in Pakistan, and give rhea information required by the Companies Ordinance,
1984, |
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| in
the manner so required and respectively give a true and fair view of the
state of the company's |
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| affairs
as at September 30, 2000 and of the profit, its cash flows and changes in
equity for the |
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| year
then ended; and |
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| (d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980, was de- |
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| ducted
by the company and deposited in the Central Zakat Fund established under
section 7 0f |
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| that Ordinance. |
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| Without
qualifying our opinion we report that direct expenses incurred on sales have
been reclas- |
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| sifted
as explained in Note 2.11 and we also report that the ultimate outcome of the
matter |
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| explained
in Note 8.3 cannot be determined. |
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| KARACHI: |
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|
HAMEED CHAUDHRI & COMPANY |
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| 5th
March, 2001 |
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|
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 |
|
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| CAPITAL
AND LIABILITIES |
|
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| Authorised
capital: |
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| 10,000,000
ordinary shares of |
|
|
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| Rs. 10/- each |
|
|
100,000,000 |
100,000,000 |
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|
|
========== |
========== |
|
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|
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| Issued,
Subscribed and Paid-up Capital |
3 |
100,000,000 |
100,000,000 |
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| Capital Reserve |
|
4 |
25,000,000 |
25,000,000 |
|
|
| Unappropriated
profit |
|
|
89,542,657 |
45,255,253 |
|
|
|
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|
------------------ |
------------------ |
|
|
| 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 |
|
|
|
|
|
|
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| DEFERRED
LIABILITY FOR GRATUITY |
|
5,160,306 |
4,462,879 |
|
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| DEFERRED
INCOME |
|
|
1,921,063 |
2,881,593 |
|
|
|
|
|
|
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| CURRENT
LIABILITIES |
|
|
|
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|
| Current
of Long term liabilities |
|
7 |
21,156,106 |
13,947,019 |
|
|
| Short
term finances |
|
8 |
248,091,445 |
357,684,048 |
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|
| Creditors,
Accruals & other liabilities |
9 |
39,425,278 |
83,548,853 |
|
|
| Provision
for taxation |
|
10 |
10,373,661 |
4,412,986 |
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| Proposed
Dividend |
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|
32,500,000 |
10,000,000 |
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|
------------------ |
------------------ |
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|
351,546,490 |
469,592,906 |
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| CONTINGENCIES
AND COMMITMENTS |
11 |
-- |
-- |
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|
------------------ |
------------------ |
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|
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|
642,355,031 |
749,454,725 |
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|
========== |
========== |
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| The
annexed notes form an integral part of these accounts. |
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| TANGIBLE
FIXED ASSETS |
|
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| Operating
fixed assets |
|
12 |
209,342,363 |
193,056,903 |
|
|
| CAPITAL
WORK-IN-PROGRESS |
13 |
4,464,085 |
3,719,270 |
|
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|
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|
------------------ |
------------------ |
|
|
|
|
|
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 |
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|
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| PROFIT
AND LOSS ACCOUNT |
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|
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| 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) |
|
