| Gul Ahmed Textile Mills Limited |
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| Annual
Report 2001 |
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| CONTENTS |
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| Company
Information |
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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
and 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 Accounts |
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| Pattern
of Shareholding |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
IQBAL ALIMOHAMMED - Chief
Executive |
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|
MUHAMMAD AYUB - (NIT) |
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|
BASHIR H. ALIMOHAMMED |
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|
GHULAM HAJI ALIMOHAMMED |
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|
JAWAID IQBAL |
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|
ZAIN BASHIR |
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|
ZIAD BASHIR |
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| COMPANY
SECRETARY |
MOHAMMED HUSSAIN, FCA |
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| BANKERS |
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ABN-AMRO BANK NV |
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AMERICAN EXPRESS BANK
LIMITED |
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BANK AL HABIB LIMITED |
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CITIBANK, N.A. |
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CREDIT AGRICOLE INDOSUEZ |
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DEUTSCHE BANK AG |
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HABIB BANK AG ZURICH |
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HABIB BANK LIMITED |
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SOCIETE GENERALE THE FIB |
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STANDARD CHARTERED BANK |
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STANDARD CHARTERED
GRINDLAYS BANK LIMITED |
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UNION BANK LIMITED |
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UNITED BANK LIMITED |
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| AUDITORS |
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HYDER BHIMJI & CO. |
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Chartered Accountants |
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| REGISTERED
OFFICE |
PLOT NO. 82 |
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MAIN NATIONAL HIGHWAY |
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LANDHI, KARACHI-75120 |
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| SHARES
DEPARTMENT |
PLOT NO. HT/3A |
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LANDHI INDUSTRIAL AREA |
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KARACHI-75120 |
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LANDHI INDUSTRIAL AREA |
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| MILLS |
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KARACHI-75120 |
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| E-MAIL |
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finance@gulahmed.com |
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| URL |
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www.gulahmed.com |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the 49th Annual General Meeting of Gul Ahmed Textile
Mills Limited will be held at Avari |
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| Towers,
242, Fatima Jinnah Road, Karachi, on Friday March 22, 2002 at 10:00 A.M. to
transact the following |
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| business: |
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| 1.
To receive, consider and adopt the Directors' Report and Audited Accounts for
the year ended |
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| September
30, 2001 and Auditors' Report thereon. |
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|
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| 2.
To approve the payment of cash dividend @ 50% as recommended by the Board. |
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| 3.
To appoint Auditors and fix their remuneration. |
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| 3.
To transact any other ordinary business as may be placed before the meeting
with the permission |
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| of
the Chairman. |
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By Order of the Board |
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| Karachi: |
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|
BASHIR H. ALIMOHAMMED |
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| February
20, 2002 |
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|
Director |
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| NOTES: |
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| 1.
Share Transfer Books of the Company will remain closed from March 16, 2002 to
March 30, 2002 |
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| (both
days inclusive). |
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| 2.
A member entitled to vote at the meeting may appoint a proxy. Proxies in
order to be effective, must |
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| be
received at the Registered Office of the Company duly stamped and signed not
later than 48 |
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| hours
before the meeting. |
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|
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| 3.
Shareholders who have deposited their shares into Central Depository Company
of Pakistan |
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| Limited,
must bring their original National Identity Card (NIC) or Original Passport
at the time of |
|
| attending
the meeting. If proxies are granted by such shareholders the same must be
accompanied |
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| with
attested copies of the NIC or the Passport of the beneficial owners.
Representatives of |
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| corporate
members should bring the usual documents required for such purpose. |
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| 4.
A proxy must be a member of the Company. |
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| 5.
Shareholders are requested to immediately notify the change of address, if
any. |
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| DIRECTORS'
REPORT |
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| Your
Directors take pleasure in presenting 49th Annual Report and the audited
accounts for the year ended |
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| September
30, 2001. |
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| OPERATING
RESULTS |
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|
Rs. 000s |
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| Operating
results of the Company are noted below: |
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| Profit
after providing depreciation |
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| of
Rs. 229 million amounts to |
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|
518,774 |
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| Less:
Provision for taxation |
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|
46,000 |
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|
------------------ |
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| Profit
after taxation |
|
|
472,774 |
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| Add:
Unappropriated profit brought forward |
|
9,295 |
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|
------------------ |
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| Amount
available for appropriation |
|
482,069 |
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|
========== |
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| Appropriations |
|
|
|
| Proposed
dividend |
|
|
170,366 |
|
| General reserve |
|
|
300,000 |
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| Amount
carried forward |
|
|
11,703 |
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|
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|
------------------ |
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|
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|
482,069 |
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|
========== |
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| Sales
increased by 10.6% to Rs.4,996 million. However the sales increase could not
be translated in an |
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| increase
in the profit before tax which was Rs.519 million as compared to Rs.626
million in the previous year. |
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| The
drop in profit is mainly due to more than 50% increase in the cost of cotton. |
|
|
| Earnings
per share work out to Rs. 13.88. |
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| DIVIDEND |
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| Your
Directors are pleased to recommend cash dividend @ 50% that is Rs. 5/- per
share. |
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| FUTURE
PROSPECTS |
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| Major
expansion and balancing, modernization and replacement program was executed
at total cost of |
|
| Rs.1,054
million. This has not only enhanced the production capacity but will also
help achieve further value |
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| addition. |
|
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| Your
Company is now well placed to take advantage of the expected growth in
exports as a result of |
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| enhancement
of quota and removal of duties on textile items by the European Union and
expected liberalization |
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| of
trade barriers by the United States. |
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| Pakistan's
economy faces many challenges due to the turbulent events as well as economic
stagnation of the |
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| past
year. These, we expect, will be overcome with the determination and resolve
of the Government in |
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| implementing
its economic agenda, suspension of sanctions by the Western countries, debt
relief, rescheduling |
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| of
outstanding foreign debts and approval of new foreign loans by the World Bank
Group, Asian Development |
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| Bank
and other international lending agencies. The progress of your Company is
also linked to continuity of |
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| these
positive factors. |
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| BOARD
OF DIRECTORS |
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| During
the course of the year nominee of National Investment Trust Limited Dr. Amjad
Waheed resigned |
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| and
was replaced by Mr. Muhammed Ayub. |
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| The
Board wishes to place on record its deep appreciation for the valuable
contribution of Dr. Amjad |
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| Waheed
and also extends a warm welcome to Mr. Muhammed Ayub. |
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| PATTERN
OF SHAREHOLDING |
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| A
statement showing the pattern of shareholding in the Company as at September
30, 2001 is included in the report. |
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| AUDITORS |
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| The
present auditors Hyder Bhimji & Co., Chartered Accountants, retire and
offer themselves for re-appointment. |
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| EMPLOYEES'
RELATIONS |
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| Relationship
with the employees remained cordial and the Board is pleased to record its
appreciation for the |
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| hard
work and dedication shown by them. |
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|
For and on behalf of the Board |
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| Karachi: |
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|
IQBAL ALIMOHAMMED |
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| February
20, 2002 |
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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 GUL AHMED TEXTILE
MILLS LIMITED as at September 30, |
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| 2001
and the related Profit and Loss Account, Cash Flow Statement and 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 all the |
|
| information
and explanations which, to the best of our knowledge and belief, were
necessary for the purposes |
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| of our audit. |
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| It
is the responsibility of the Company's management to establish and maintain a
system of internal control, and |
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| 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 |
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| statements
based on our audit. |
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| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These standards |
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| require
that we plan and perform the audit to obtain reasonable assurance about
whether the above said |
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| statements
are free of any material misstatement. An audit includes examining, on a test
basis, evidence |
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| supporting
the amounts and disclosures in the above said statements. An audit also
includes assessing the |
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| 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 |
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| 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 |
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| Companies
Ordinance, 1984; |
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|
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| (b)
in our opinion: |
|
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|
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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 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 |
|
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| iii)
the business conducted, investments made and the expenditure incurred during
the year were |
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| 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 |
|
| together
with the notes forming part thereof conform with approved accounting
standards as |
|
| applicable
in Pakistan and give the information required by the Companies Ordinance,
1984, in the |
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| manner
so required and respectively, give a true and fair view of the state of the
Company's affairs |
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| as
at September 30, 2001 and of the profit, its cash flow 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 (XVIII of 1980), |
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| was
deducted by the Company and deposited in the Central Zakat Fund established
under Section |
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| 7
of that Ordinance. |
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| Karachi: |
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|
HYDER BHIMJI & CO. |
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| February
20, 2002 |
|
Chartered Accountants |
|
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 2001 |
|
|
|
Note |
2001 |
2000 |
|
|
|
Rs. 000s |
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorised
capital |
|
|
500,000 |
500,000 |
|
| 50,000,000
ordinary shares of Rs.10 each |
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid-up capital |
3 |
340,733 |
286,260 |
|
| Share
capital under issue |
|
4 |
-- |
54,473 |
|
| Reserves |
|
5 |
1,272,645 |
972,645 |
|
| Unappropriated
profit |
|
|
11,703 |
9,295 |
|
|
------------------ |
------------------ |
|
|
|
1,625,081 |
1,322,673 |
|
|
|
|
| REDEEMABLE
CAPITAL |
|
6 |
-- |
-- |
|
|
|
|
|
|
| LONG
TERM LOANS |
|
7 |
998,885 |
363,934 |
|
|
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
|
| Taxation |
|
8 |
70,670 |
49,670 |
|
| Gratuity |
|
9 |
27,393 |
21,176 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
98,063 |
70,846 |
|
|
|
| CURRENT
LIABILITIES AND PROVISIONS |
|
|
| Short
term running finance |
|
10 |
2,332,137 |
1,537,221 |
|
| Short
term loans |
|
11 |
-- |
210,217 |
|
| Current
maturity of redeemable capital |
|
|
|
| and
long term loans |
|
12 |
177,299 |
199,789 |
|
| Creditors
and accrued liabilities |
|
13 |
596,163 |
459,560 |
|
| Other liabilities |
|
14 |
6,178 |
3,236 |
|
| Provision
for taxation - net |
|
|
-- |
18,494 |
|
| Proposed
dividend |
|
|
170,366 |
238,513 |
|
|
------------------ |
------------------ |
|
|
|
3,282,143 |
2,667,030 |
|
| CONTINGENT LIABILITIES AND
COMMITMENTS |
15 |
|
|
------------------ |
------------------ |
|
|
|
6,004,172 |
4,424,483 |
|
|
|
|
========== |
========== |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
assets |
|
16 |
2,575,614 |
1,732,613 |
|
| Capital
work-in-progress |
|
17 |
42,699 |
82,971 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,618,313 |
1,815,584 |
|
|
|
|
| LONG
TERM LOANS AND ADVANCES |
18 |
8,901 |
7,975 |
|
| LONG
TERM DEPOSITS |
|
|
3,421 |
3,201 |
|
|
|
|
|
| CURRENT
ASSETS |
|
| Stores
and spares |
|
19 |
146,043 |
106,167 |
|
| Stock-in-trade |
|
20 |
1,114,263 |
759,339 |
|
| Trade debts |
|
21 |
1,219,831 |
959,909 |
|
| Loans,
advances, prepayments and |
|
|
| other
receivables |
|
22 |
239,750 |
127,025 |
|
| Short
term investment |
|
23 |
589,569 |
537,821 |
|
| Cash
and bank balances |
|
24 |
64,081 |
107,462 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
3,373,537 |
2,597,723 |
|
|
------------------ |
------------------ |
|
|
|
6,004,172 |
4,424,483 |
|
|
|
|
========== |
========== |
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
IQBAL ALIMOHAMMED |
|
|
BASHIR H. ALIMOHAMMED |
|
|
Chief Executive |
|
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2001 |
|
|
|
|
|
|
Note |
2001 |
2000 |
|
|
|
Rs. 000s |
|
|
| Sales |
|
25 |
4,996,023 |
4,516,744 |
|
| Cost of sales |
|
26 |
3,781,787 |
3,369,319 |
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
1,214,236 |
1,147,425 |
|
|
| Administrative
expenses |
|
27 |
208,815 |
159,946 |
|
| Selling
expenses |
|
28 |
162,438 |
128,024 |
|
|
|
------------------ |
------------------ |
|
|
|
371,253 |
287,970 |
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
842,983 |
859,455 |
|
| Other income |
|
29 |
9,028 |
4,942 |
|
|
|
------------------ |
------------------ |
|
|
|
852,011 |
864,397 |
|
|
|
|
| Financial
charges |
|
30 |
300,817 |
202,560 |
|
| Workers'
profit participation fund |
|
27,560 |
33,092 |
|
| Workers'
welfare fund |
|
4,860 |
2,944 |
|
|
------------------ |
------------------ |
|
|
333,237 |
238,596 |
|
|
------------------ |
------------------ |
|
| Profit
for the year before taxation |
|
|
518,774 |
625,801 |
|
| Provision
for taxation |
|
31 |
46,000 |
67,650 |
|
|
|
|
|
------------------ |
------------------ |
|
| Profit
for the year after taxation |
|
|
472,774 |
558,151 |
|
| Unappropriated
profit brought forward |
32 |
9,295 |
89,657 |
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
482,069 |
647,808 |
|
|
|
|
| Appropriations |
|
| Proposed
dividend @ Rs. 5/- |
|
|
170,366 |
238,513 |
|
| (2000:
Rs. 7/-) per share |
|
|
|
| General reserve |
|
|
|
300,000 |
400,000 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
470,366 |
638,513 |
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
11,703 |
9,295 |
|
|
|
========== |
========== |
|
| Earnings
per share (Rs.) |
|
33 |
13.88 |
16.38 |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
IQBAL ALIMOHAMMED |
|
|
BASHIR H. ALIMOHAMMED |
|
|
Chief Executive |
|
|
Director |
|
|
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
|
Rs. 000s |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Profit
before taxation |
|
518,774 |
625,801 |
|
| Adjustments
for: |
|
|
| Depreciation |
|
229,036 |
179,515 |
|
| Gratuity |
|
9,902 |
6,255 |
|
| Financial
charges |
|
385,218 |
258,672 |
|
| Provision
for slow moving/obsolete stores and spares |
3,499 |
4,647 |
|
| Provision
for doubtful debts |
|
4,673 |
5,634 |
|
| Long
term investment written off |
|
-- |
50 |
|
| Profit
on sales of operating assets |
|
(5,613) |
(1,891) |
|
| Interest
income/exchange differences |
|
(84,401) |
(56,112) |
|
|
|
------------------ |
------------------ |
|
|
|
1,061,088 |
1,022,571 |
|
|
|
|
| Changes
in working capital: |
|
| (Increase)/Decrease
in current assets |
|
| Stores
and spares |
|
(43,375) |
9,871 |
|
| Stock-in-trade |
|
(354,924) |
123,268 |
|
| Trade debts |
|
(264,595) |
(63,654) |
|
| Loans,
advances, prepayments and other receivables |
(90,934) |
(1,447) |
|
|
|
------------------ |
------------------ |
|
|
|
|
(753,828) |
68,038 |
|
| Increase
in current liabilities |
|
|
|
|
| Creditors,
accrued and other liabilities |
|
115,834 |
120,049 |
|
|
------------------ |
------------------ |
|
|
|
(637,994) |
188,087 |
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
423,094 |
1,210,658 |
|
|
|
|
| Payments for: |
|
| Gratuity |
|
(3,685) |
(5,934) |
|
| Financial
charges |
|
(361,507) |
(284,314) |
|
| Income tax |
|
(63,058) |
(29,126) |
|
| Long
term loans and advances |
|
(926) |
(5,080) |
|
|
|
------------------ |
------------------ |
|
| Net
cash (used)/generated from operating activities |
(6,082) |
886,204 |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Capital
expenditure |
|
|
(1,054,337) |
(372,002) |
|
| Sale
proceeds of operating assets |
|
28,185 |
18,616 |
|
| Interest
income/exchange differences |
|
82,174 |
49,558 |
|
| Long
term deposits |
|
|
(220) |
(436) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities |
|
(944,198) |
(304,264) |
|
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Short
term loans |
|
|
(210,217) |
125,629 |
|
| Redemption
of redeemable capital |
|
(32,445) |
(31,190) |
|
| Long
term borrowings |
|
|
790,000 |
200,000 |
|
| Long
term borrowings - repayments |
|
(145,094) |
(280,551) |
|
| Dividend paid |
|
|
(238,513) |
(75,367) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated/(used) in financing activities |
|
163,731 |
(61,479) |
|
|
|
|
------------------ |
------------------ |
|
| Net
(decrease)/increase in cash and cash equivalents |
(786,549) |
520,461 |
|
|
|
|
|
|
| Cash
and cash equivalents - at the beginning of the year |
(891,938) |
(1,113,208) |
|
|
- transferred on merger |
-- |
(299,191) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(89,1,938) |
(1,412,399) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents - at the end of the year |
|
(1,678,487) |
(891,938) |
|
|
|
|
========== |
========== |
|
|
| CASH
AND CASH EQUIVALENTS |
|
| Cash
and cash equivalents include: |
|
| Short
term investment |
|
|
589,569 |
537,821 |
|
| Cash
and bank balances |
|
|
64,081 |
107,462 |
|
| Short
term running finance |
|
|
(2,332,137) |
(1,537,221) |
|
|
|
|
------------------ |
------------------ |
|
|
|
(1,678,487) |
(891,938) |
|
|
========== |
========== |
|
|
|
|
|
IQBAL ALIMOHAMMED |
|
BASHIR H. ALIMOHAMMED |
|
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2001</ |
