| Gadoon Textile Mills Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| Company Information |
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| Notice of Meeting |
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| Auditors Report |
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| Directors
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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| Reconciliation
of Operating Profit to Net Cash Flow |
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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 |
A. Razzak A. Aziz Tabba |
(Chairman/Chief
Executive) |
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|
M. Yunus A. Aziz Tabba |
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M. Sohail M. Yunus Tabba |
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Muhammad Ali A. Razzak
Tabba |
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M. Javed M. Yunus Tabba |
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Ilyas Ismail Moton |
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Ms. Farzana Munaf |
(NIT Nominee) |
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| Company
Secretary |
A. Rauf Khanani |
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| Registered
Office |
Aptma House, |
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Tehkal Payan, Jamarud
Road, |
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Peshawar. |
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Phone No. : 841496 |
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Fax No. : 091-840273 |
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Telex No. : 52379 SAIF
PK. |
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| Factory |
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Gadoon Amazai Industrial
Estate, |
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Gadoon, Distt. Swabi. |
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E-mail Address:
gtml@psh.brain.net.pk |
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| Karachi Office |
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6-A, Muhammad Ali Housing
Society, |
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Abdul Aziz Haji Hashim
Tabba Street, |
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Karachi-75350. |
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Phone No. : 111-786-555 |
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Fax No. : 021-4534302 |
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Telex No. : 29520 LUCKY
PK |
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E-mail Address:
gad-tex@cyber.net.pk |
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| Auditors |
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Hameed Chaudhri & Co. |
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Chartered Accountants |
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Karachi Chambers, Hasrat
Mohani Road, |
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Karachi. |
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Phone No. : 2412754-
2411474 |
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Fax No. : 021-2424835 |
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| Shares
Registrar |
C & K Management
Associates (Private) Limited |
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404, Trade Tower, Opp.:
Hotel Metropole, |
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Abdullah Haroon Road, |
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Karachi-75530 |
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Phone No. : 568-5930,
568-7839 |
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Fax No. : 021-568-7839 |
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| Notice
of Meeting |
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| Notice
is hereby given that 12th Annual General Meeting of the Members of GADOON
TEXTILE |
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| MILLS
LIMITED will be held on 31st March 2000 at 10.00 a.m. at the Registered
office of the |
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| Company
APTMA House, Tehkal Payan, Jamarud Road, Peshawar to transact the following
agenda: |
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| Agenda |
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| *
To confirm the Minutes of 11th Annual General Meeting held on March 31, 1999. |
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| *
To receive, consider and adopt the Audited Accounts of the Company for the
year ended |
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| September
30, 1999 together with the Auditors and Directors Report thereon. |
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| *
To approve Cash dividend for the year ended September 30, 1999 as recommended
by the |
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| Board. |
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| *
To appoint Auditors for the year ending September 30, 2000 and to fix their |
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| remuneration. |
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| *
To transact any other business with the permission of the Chair. |
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| Notes: |
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| The
Share Transfer Book of the Company will remain closed from March 27, 2000 to
March 3 |
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| 2000,
(both days inclusive) |
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| A
member eligible to attend and vote at this meeting may appoint another member
as his/her proxy to |
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| attend
and vole instead of him/her. Proxies in order to be effective must be
received by the Company |
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| at
the Registered office not less than 48 hours before the time for holding the
meeting. |
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| A
Corporation which is a member of the Company may by resolution of its Board
of Directors or |
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| Governing
Body authorize a person to act as its representative at the meeting. |
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| Members
are requested to kindly contact for all matters pertaining to Shares
department including |
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| transfer
of shares, change of address etc. to our Registrar, M/s C & K Management
Associates (Pvt) |
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| Ltd.
404, Trade Tower, Near Metropole Hotel, Abdullah Haroon Road, Karachi. |
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By order of the Board |
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| Karachi: |
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|
A. Rauf Khanani |
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| 6th
March, 2000. |
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Company Secretary |
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| Auditors'
Report to the Members |
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| We
have audited the annexed balance sheet of GADOON TEXTILE MILLS LIMITED as at
30 |
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| September,
1999 and the related profit and loss account and cash flow statement,
together with the |
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| notes
forming part thereof, for the year then ended and we state that we have
obtained all the |
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| information
and explanations which to the best of our knowledge and belief were necessary
for the |
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| purposes
of our audit and, after due verification thereof, we report that: |
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| (a)
in our opinion, proper books of account have been kept by the company as
required |
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| by
the Companies 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 |
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| have
been drawn up in conformity with the Companies Ordinance, 1984 and |
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| are
in agreement with the books of account and are further in accordance |
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| with
accounting policies consistently applied. |
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| (ii)
the expenditure incurred during the year was for the purpose of Company's |
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| business; and |
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| (iii)
the business conducted, investments made and expenditure incurred during |
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| the
year 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 |
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| explanations
given to us, the balance sheet, profit and loss account and the cash flow |
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| statement,
together with the notes forming part thereof, give the information required |
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| by
the Companies Ordinance, 1984 in the manner so required, respectively give a
true |
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| and
fair view of the state of the company's affairs as at 30 September, 1999 and
of |
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| the
profit and cash flows for the year then ended; and |
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| (d)
in our opinion, zakat deductible at source under Zakat and Ushr Ordinance,
1980 |
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| was
deducted by the Company and deposited in the Central Zakat Fund |
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| established
under section 7 of that Ordinance. |
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| Karachi: |
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|
Hameed Chaudhri & Co |
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| 6th March, 2000 |
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|
Chartered Accountants |
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| Directors
Report to the Members |
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| We
are pleased to submit before you the following report on the performance of
the company for the |
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| year
ended 30th September, 1999. |
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| An Overview: |
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| The
speedy socio-economic, political and technological changes taking place,
locally and |
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| globally,
are effecting the entire Pakistan's industries and particularly the textile
industry dramatically. |
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| Business
leaders are creating a strategic focus to assess reality to put the
institutions into the future. |
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| Along
with the quiet rise of knowledge, the new century will witness revolutionary
changes in the |
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| mode
of production and globalization. Looking at the new millennium needs
necessary advancement |
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| in
the machinery has already been made at your plant and further steps are being
under way to |
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| make
the unit as one of the most modern textile spinning unit. |
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| The
company has maintained its track record. The impressive growth in Sale and
profit speaks of |
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| our
efforts. These achievements have been made possible by the dedicated and
untiring efforts of |
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| the
management and the staff of the company. Our main focus is again to increase
our volume in export |
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| sales.
By the grace of the Almighty your management has been extremely successful in |
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| increasing
the ratio of export sales to the local sales from 4% to 31%. The Net Sales
figures also jumped |
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| to
cross the Three Billion mark registering over all growth of over 38% as
compared to previous year. |
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| The
second half of the year under review has been much difficult for the textile
industry in Pakistan. |
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| The
subdued economic activity, reduced trade volumes, decline in the value added
textile export |
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| all
had a negative impact on the spinning sector. |
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| With
the blessing of Almighty Allah your company earned a pre tax profit of Rs.
175 Million during |
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| the
year under consideration. The considerable rise in business volume enabled
the company to post |
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| this
growth while absorbing the adverse impact of increase in the cost of
production and stepped rise |
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| in
financial expenses. |
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| Operational
Results: |
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| The
following are the operational results of the Company for the period ended
30th September |
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| 1999. |
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|
(Rs. 000) |
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| Net
pre-tax profit for the year |
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175,217 |
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| Provision
for taxation |
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|
16,141 |
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------------------ |
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| Profit after tax |
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|
159,076 |
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| Unappropriated
profit |
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629,717 |
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------------------ |
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| Profit
available for appropriation |
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788,793 |
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| Appropriation: |
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| Additional
Cash dividend already |
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| paid
@ 6.1% out of profit for the |
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| year
ended 30th Sept-98 in |
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| compliance
with Section |
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| of
Income Tax Ord., 1979 |
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14,297 |
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| Cash
dividend @ 30% |
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70,312 |
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------------------ |
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| Total
appropriation |
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84,609 |
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------------------ |
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| Un-appropriated
profit |
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| carried forward |
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|
704,184 |
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========== |
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| Looking
at the Income statement you will see that the main financial parameters
showed an |
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| improvement
over the previous year and there is a growth of about 38% in the sales
figures. The rate |
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| of
GP also improved by about 2%. Increase in selling expenses is due to the
increase in export. |
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| The
Net Pretax profit of the company after meeting all the operational,
administrative, financial and |
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| other
expenses also increased. The increase in financial expenses however been
adverse effect |
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| on
the bottom line. The main reason of this increase as already informed to you,
massive expansion, |
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| and
blocked of substantial money in purchase of Raw Cotton and the export of yarn
against usance |
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| L/C's.
This fact is evident from the figures of Inventories and the Trade debt. |
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| Looking
at the improvement in the stock market the management decided to revise the
value of |
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| investment
held by the Company accordingly. |
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| Profit
Distribution: |
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| Taking
into consideration the liquidity and the future expansion, the Board of
directors of the Company, |
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| have
recommend a payment of Cash dividend @ 30% for the year under review. |
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| Our
Contribution to the National Exchequer: |
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| By
the Grace of God, we are proud to inform you that your company had
contributed Rs.340.93 |
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| Million
to the national exchequer during the year under review in the form of sales
tax, income tax, |
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| import
duties and other statutory levies as its share in the building a strong
Pakistan. |
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| Expansion
of the Project: |
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| By
the grace of Almighty Allah the installation of the captive power generation
plant has already |
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| been
completed on the reporting date and we are now producing power at about 85%
of the installed |
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| capacity
as recommended by the suppliers. |
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| As
its evident from the enclosed accounts that your company's export sales
reaches at about Rs.1 |
|
| Billion
mark. Looking at the demand of Superb quality Yarn abroad, management of your
company |
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| plans
to introduce "The Compact spinning" first time in Pakistan with the
addition of another 15,840 |
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| spindles
this year. |
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|
| Future
Out-Look: |
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| After
long waiting, cotton crop of the country this year matched the official
figures, and with |
|
| availability
of cotton at reasonable price on one hand and the availability of refinance
facility on |
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| the
other hand we sincerely hope the ailing spinning industry in the country will
be survived. |
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| At
Gadoon Textile we believe that the new millennium will herald yet another
leap forward in |
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| textile
excellence. We are geared to lead the Nation's spinning industry into this
new era of hope |
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| and
opportunities, giving us and our customers, the edge to stay ahead of
everyone else Insha |
|
| Allah. |
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| We
earnestly hope that textile industry of the country not only revive but
earned hand some profit in years |
|
| to come. |
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|
| Earning
per Share: |
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| The
earning per share during the year under report was Rs.6.79 (1998- Rs.5.27) |
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| Auditors: |
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| The
retiring auditors M/s. Hameed Chaudhri & Company Chartered Accountants
being eligible, |
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| offer
themselves for re appointment. |
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| Pattern
of Shareholding: |
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| A
statement reflecting the pattern of shareholding is annexed to this report. |
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| Disclosure
for the year 2000 compliance of
Computer Systems: |
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| By
the Grace of Almighty Allah there was no any problem to deal with the year 2K
problem as all |
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| the
financial applications were modified to make them compliant with year 2000
well in time. |
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| Acknowledgment: |
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| We
acknowledge with thanks: |
|
|
| --
for the support and cooperation extended by our bankers, financial
institutions, and the |
|
| Government
agencies for the smooth running of the company during the year and sincerely
hope |
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| for
the same in years to come. |
|
|
| --
to all our valued customers for their patronage, trust and confidence in our
quality products. |
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| --
The Effective Human Resource Management, and good organization culture are
the corner stones |
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| for
the ensuring success in the next millennium, along with the effective use of
modern technology. |
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| We
are also thankful to all Workers, Staff and Executives of the company for
their dedicated hard |
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| Work. |
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| May
Almighty Allah reward us with his bounties as he did in the past. |
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|
for and on behalf of the Board |
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| Karachi: |
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|
A. Razzak A. Aziz Tabba |
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| 6th
March, 2000 |
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|
Chairman/Chief Executive |
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| BALANCE
SHEET AS AT 30 SEPTEMBER 1999 |
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1999 |
1998 |
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|
Note |
Rupees |
Rupees |
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| SHARE
CAPITAL & RESERVES |
|
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| Authorised
capital |
|
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| 30,000,000
ordinary shares of Rs. 10 each |
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|
300,000,000 |
300,000,000 |
|
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|
|
========== |
========== |
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| Issued,
subscribed & paid up capital |
|
3 |
234,375,000 |
234,375,000 |
|
| Share premium |
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|
103,125,000 |
103,125,000 |
|
| Unappropriated
profit |
|
|
704,183,338 |
629,716,966 |
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|
------------------ |
------------------ |
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| Shareholder's
Equity |
|
3.1 |
1,041,683,338 |
967,216,966 |
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| LONG
TERM LOANS |
|
4 |
129,061,795 |
254,537,913 |
|
| OBLIGATION
UNDER FINANCE LEASE |
|
5 |
115,795,221 |
-- |
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| ADVANCE
AGAINST ASSETS |
|
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| SUBJECT
TO FINANCE LEASE |
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|
-- |
110,701,599 |
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| DEFERRED
LIABILITIES |
|
|
|
| Provision
for gratuity |
|
6 |
15,022,345 |
10,524,535 |
|
| Deferred income |
|
7 |
879,441 |
1,199,232 |
|
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|
------------------ |
------------------ |
|
|
|
|
15,901,786 |
11,723,767 |
|
|
|
|
| Current
maturity of long term liabilities |
|
8 |
105,646,703 |
-- |
|
| Short
term finances |
|
9 |
807,740,422 |
114,316,089 |
|
| Creditors,
accruals & other liabilities |
|
10 |
416,093,561 |
467,680,718 |
|
| Provision
for taxation |
|
|
61,967,614 |
45,826,455 |
|
| Dividend |
|
11 |
86,178,718 |
36,986,707 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,477,627,018 |
664,809,969 |
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| CONTINGENT
LIABILITIES & COMMITMENTS |
|
12 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
2,780,069,158 |
2,008,990,214 |
|
|
|
|
========== |
========== |
|
|
| FIXED ASSETS |
|
|
|
| Operating
fixed assets |
|
13 |
1,505,877,884 |
1,092,007,423 |
|
| Capital
work in progress |
|
14 |
58,009,345 |
479,541,706 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,563,887,229 |
1,564,549,129 |
|
|
|
|
| LONG
TERMS LOANS, DEPOSITS |
|
|
| &
DEFERRED COSTS |
|
15 |
2,571,440 |
2,302,440 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores & spares |
|
16 |
29,503,509 |
18,573,745 |
|
| Stock-in-trade |
|
17 |
677,093,290 |
217,168,589 |
|
| Trade debtors |
|
18 |
331,219,342 |
58,405,764 |
|
| Advances,
deposits, prepayments & other receivable |
19 |
126,844,929 |
71,245,623 |
|
| Short
term investment |
|
20 |
43,039,200 |
38,429,600 |
|
| Cash
& bank balances |
|
21 |
5,910,219 |
38,315,324 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,213,610,409 |
442,130,645 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,780,069,158 |
2,008,990,214 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts |
|
|
|
A. Razzak A. Aziz Tabba |
|
M. Yunus A. Aziz Tabba |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Sales-Net |
|
22 |
3,014,228,908 |
2,178,783,334 |
|
| Cost of sales |
|
23 |
2,655,610,831 |
1,966,676,417 |
|
|
|
|
------------------ |
------------------ |
|
| Gross Profit |
|
|
358,618,077 |
212,106,917 |
|
|
|
|
| Operating
Expenses |
|
|
|
|
| Administrative |
|
24 |
10,531,766 |
9,221,932 |
|
| Selling |
|
25 |
48,010,851 |
5,880,254 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
58,542,617 |
15,102,186 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
300,075,460 |
197,004,731 |
|
| Other income |
|
|
26 |
4,086,591 |
3,170,133 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
304,162,051 |
200,174,864 |
|
| Other charges |
|
|
|
| Financial |
|
27 |
126,182,921 |
34,118,994 |
|
| Others |
|
28 |
2,657,882 |
1,376,477 |
|
| Diminution
in value of investment |
|
|
(9,117,600) |
23,265,600 |
|
| Workers'
Profit Participation Fund |
|
|
9,221,942 |
7,070,690 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
128,945,145 |
65,831,761 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
for the year before taxation |
|
|
175,216,906 |
134,343,103 |
|
| Provision
for taxation |
|
29 |
16,141,159 |
10,918,327 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
for the year after taxation |
|
|
159,075,747 |
123,424,776 |
|
| Unappropriated
profit brought forward |
|
|
629,716,966 |
541,448,440 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
788,792,713 |
664,873,216 |
|
|
|
|
|
|
|
| Appropriation |
|
|
|
| Dividend
- Prior Year @ 6.10% paid out of the profit |
|
| for
the year ended 30 Sept. 98, in compliance |
|
|
| with
Sec. 12 (9-A) of Income Tax Ord., 1979. |
|
|
14,296,875 |
-- |
|
| Proposed
dividend @30% (1998:27.5%) |
|
|
70,312,500 |
35,156,250 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
84,609,375 |
35,156,250 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried Forward to balance Sheet |
|
704,183,338 |
629,716,966 |
|
|
|
|
========== |
========== |
|
| Earning
per Share |
|
30 |
6.79 |
5.27 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts |
|
|
|
A. Razzak A. Aziz Tabba |
|
M. Yunus A. Aziz Tabba |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| NET
CASH (OUTFLOW)/ INFLOW FROM |
|
|
| OPERATING
ACTIVITIES |
|
A |
(399,810,853) |
209,471,059 |
|
|
|
|
| RETURN
ON INVESTMENTS & |
|
|
|
| SERVICING
OF FINANCE |
|
|
|
|
|
|
| Mark
up/interest paid |
|
(92,489,363) |
(19,916,397) |
|
| Profit
received on deposits |
|
793,119 |
530,804 |
|
| Dividend paid |
|
(35,417,364) |
(46,669,845) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash outflow from return on investments |
|
|
| and
servicing of finance |
|
|
(127,113,608) |
(66,055,438) |
|
|
|
|
| TAXATION |
|
|
|
| Taxes
paid (including tax deducted at source) |
|
|
(17,810,226) |
(15,437,860) |
|
|
|
|
