| Ibrahim Fibres Limited |
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| Contents |
|
|
| Company
Information |
|
| Chairman's
Review |
|
| Notice
of Meeting |
|
| Directors'
Report to the Shareholders |
|
| Ibrahim
Group Performance |
|
| Auditors'
Report to the Members |
|
| Balance Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| Company
Information |
|
|
| Board
of Directors |
|
| Sheikh
Mukhtar Ahmed |
|
| (Chairman
& Chief Executive) |
|
| Sheikh
Mohammad Yaseen |
|
| Mohammad
Naeem Mukhtar |
|
| Mohammad
Waseem Mukhtar |
|
| Asim Yaseen |
|
| Iqbal Begum |
|
| Ghazala Naeem |
|
|
| Secretary |
|
| Anwarul Haque |
|
| B. Com., F.C.A. |
|
|
| Auditors |
|
| M.
Yousuf Adil Saleem & Co., |
|
| Chartered
Accountants, |
|
| Faisalabad,
Pakistan. |
|
|
| Tax
Consultants |
|
| F.R.
Merchants & Co. |
|
| Chartered
Accountants, |
|
| Karachi,
Pakistan. |
|
|
| Information
Technology Consultants |
|
| KPMG
Peat Marwick Associates (Private) Limited Karachi, Pakistan. |
|
|
| Bankers |
|
| ABN-AMRO
Bank N.V. |
|
| Allied
Bank of Pakistan Limited |
|
| Citi Bank N.A. |
|
| DEG
- Deutsche Investitions - und |
|
| Entwicklungsgesellschaft
mbH, |
|
| Emirates
Bank International PJSC |
|
| Faysal
Bank Limited |
|
| Habib
Bank Limited |
|
| National
Bank of Pakistan |
|
| Standard
Chartered Bank |
|
| The
Hongkong and Shanghai |
|
| Banking
Corporation Limited |
|
|
| Registered
Office |
|
| Ibrahim Centre, |
|
| 1-A,
Ahmed Block, |
|
| New
Garden Town, |
|
| Lahore,
Pakistan. |
|
|
| Head Office |
|
| Ibrahim Centre, |
|
| 15-Club Road, |
|
| Faisalabad,
Pakistan. |
|
|
| Shares
Registration Office |
|
| Ibrahim Centre, |
|
| GK-7/59,
Bagh-e-Zehra Street, |
|
| Kharadar, |
|
| Karachi,
Pakistan. |
|
|
| Plant |
|
| 38-Kilometre, |
|
| Faisalabad-Sheikhupura
Road, |
|
| Faisalabad,
Pakistan. |
|
|
|
| Chairman's
Review |
|
|
| I
am pleased to report the performance of the company for the year |
|
| ended
September 30, 1999. |
|
|
| During
the first half of our financial year the selling price of Polyester |
|
| Staple
Fibre (PSF) remained depressed due to the dumping at |
|
| unrealistically
low prices by South East Asian countries, but with the |
|
| start
of the second half of the year there was a turn around in the |
|
| market
as the international economic recession started fading away. |
|
| The
PSF selling prices in the international market also showed a marked |
|
| improvement.
Though, at the same time, the prices of the main raw |
|
| materials
i.e. PTA and MEG also started increasing, yet the net margins |
|
| showed
a reasonable improvement. |
|
|
| By
the grace of Almighty Allah, your company during this financial |
|
| year
has been able to earn optimum profits which were mainly due |
|
| to
effective cost controls adopted by your management. |
|
|
| During
the year under review there was a growth of around 11% in |
|
| the
demand of PSF in Pakistan. The fibre/cotton consumption ratio |
|
| was
increased to a level of 23:77 which is still far below the worldwide |
|
| fibre/cotton
consumption ratio of 56:44. This indicates that there is still |
|
| a
great potential in the growth of PSF demand in Pakistan. |
|
|
| Production
Operations |
|
| The
performance of the plant, once again, remained impressive. The |
|
| quality
of the product was excellent and process wastage was minimal. |
|
| The
plant achieved a capacity utilization level of 96% and produced |
|
| 67,209
tons of PSF during the year 1999 as against the capacity utilization |
|
| of
94% and a production level of 66,107 tons during the year 1998. |
|
|
| Your
management adhered to its policy of procuring the best quality |
|
| raw
materials i.e., PTA and MEG from the renowned suppliers of the world. |
|
|
| Marketing
and Sales Activity |
|
| I
am thankful to the blessings of Almighty Allah that, in 1999, we have |
|
| achieved
a sales level of 71,640 tons (as against 64,999 tons in 1998) |
|
| which
is even higher than the total installed production capacity of the |
|
| plant.
During the year under review the stress remained on the marketing |
|
| of
specialized premium products i.e., bright and trilobal, resulting in |
|
| higher
margins due to their improved share in the production and sales. |
|
|
| I
am hopeful that, by the grace of Almighty Allah, we can further |
|
| increase
our share in the market by continuously following the present |
|
| marketing
strategy, maintaining high product quality, providing specialized |
|
| customer
support and exploiting the location advantage of the plant. |
|
|
| Financial
Performance |
|
| During
the year under review your company has recorded a sales of |
|
| Rupees
3,461 million (net of sales tax) as against the sales of Rupees |
|
| 3,273
million attained during the year 1998, resulting in a gross profit |
|
| of
Rupees 785 million, being 22.68% of net sales as compared to the |
|
| gross
profit of Rupees 303 million, being 9.26% of net sales achieved |
|
| during
the year 1998. The improvement in gross margins was mainly |
|
| due
to the turnaround in the international. PSF market, the efficiently |
|
| run
operations of the plant and the implementation of effective cost |
|
| controls
by your management. This enabled your company to earn |
|
| after
tax profit of Rupees 556 million during the year under review |
|
| as
against Rupees 107 million during the previous year, thus improving |
|
| the
earning per share to Rupees 2.78 as against Rupees 0.53 during |
|
| the
previous year. |
|
|
| Your
Directors have recommended for the payment of 10% cash |
|
| dividend
out of the profit for the current year. |
|
|
| Future Outlook |
|
| In
my last year's review, I indicated that your management is fully |
|
| aware
of the large scale production and we are making all the |
|
| preparations
to meet the challenges of globalization of trade and |
|
| elimination
of trade barriers under the WTO agreement which is |
|
| expected
to be implemented by year 2005. Keeping in view the |
|
| continuous
growth in PSF demand over the years and the future |
|
| potential
in the PSF market, your management has decided to expand |
|
| the
production capacity of the plant. At present we are in the process |
|
| of
negotiating the contract with the plant suppliers and are finalizing |
|
| the
financial arrangements. The letter of credit for the import of plant |
|
| and
machinery for the expansion project will "INSHA-ALLAH" be |
|
| opened
in the very near future. We hope the new capacity would be |
|
| in
operation during the last quarter of year 2001. Lets pray to Almighty |
|
| Allah
to give us the guidance and strength to implement our plans. |
|
|
| Year
2000 Compliance |
|
| All
computer hardware and software applications of your company |
|
| are
Y2K complaint. |
|
|
| Acknowledgment |
|
| I
thank the members of the board of Directors of the company, |
|
| shareholders,
bankers, financial institutions, our valued customers and |
|
| suppliers.
I also thank executives and employees of the company for |
|
| their
dedication, support and assistance and hope to get the same co- |
|
| operation
in the future. |
|
|
| I
would like to thank the plant suppliers M/s. Lurgi Zimmer AG, |
|
| Germany
for their continuous technical support in the operation and |
|
| maintenance
of the plant. |
|
|
|
| Lahore: |
|
Sheikh Mukhtar Ahmed |
|
| December 17, 1999 |
|
Chairman |
|
|
|
| Notice
of Meeting |
|
|
| Notice
is hereby given that the 13th Annual General Meeting of the |
|
| shareholders
of the Company will be held on 29-01-2000 at 11.00 A.M. |
|
| at
Avari Hotel, Shahrah-e-Quaid-e-Azam, Lahore to transact the following |
|
| business: |
|
|
| 1.
To confirm the minutes of the preceding meeting of the shareholders |
|
| of the Company. |
|
|
| 2.
To consider and approve the Annual Audited Accounts of the |
|
| Company
for the year ending 30-09-1999. |
|
|
| 3.
To consider and approve the declaration of Cash Dividend @ 10% |
|
| as
recommended by the Board of Directors. |
|
|
| 4.
To elect 7 (seven) Directors in accordance with the Provisions of |
|
| Section
178 (5) of the Companies Ordinance, 1984 for a term of |
|
| 3
(three) years commencing from 30-01-2000. The number of |
|
| Directors
fixed by the Board of Directors in their meeting held on |
|
| 17-12-1999
pursuant to Section 178(1) of the Companies Ordinance, |
|
| 1984
is 7 (seven). |
|
|
| The
following directors shall retire on 29-01-2000 in accordance |
|
| with
the requirement of Section 180(1) of the Companies Ordinance, |
|
| 1984:- |
|
|
| 1.
Sheikh Mukhtar Ahmed |
|
| 2.
Sheikh Mohammad Yaseen |
|
5. Asim Yaseen |
|
| 3.
Mohammad Naeem Mukhtar |
|
6. Iqbal Begum |
|
| 4.
Mohammad Waseem Mukhtar |
|
67. Ghazala Naeem |
|
|
| The
retiring Directors are eligible for re-election. |
|
|
| 5.
To appoint Auditors for the year 1999-2000 and to fix their |
|
| remuneration.
The present auditors M/s. M. Yousuf Adil Saleem |
|
| &
Co., Chartered Accountants, being eligible for appointment, |
|
| offer
themselves for re-appointment. |
|
|
| 6.
Special Business |
|
|
| To
approve following special business. |
|
|
| To
fix the remuneration of Sheikh Mukhtar Ahmad, Chief Executive |
|
| of
the Company w.e.f. 01-01-2000. |
|
|
| "Resolved
that the remuneration of Sheikh Mukhtar Ahmed, |
|
| Chief
Executive of the company be and is hereby fixed w.e.f. |
|
| 01-01-2000 as follows: |
|
|
| 1. Basic Salary |
|
Rs. 200,000 per month |
|
| 2.
House Rent Allowance |
Rs. 90,000 per month |
|
| 3. Utilities |
|
Rs. 20,000 per month |
|
|
| To
revise the remuneration of Mr. Asim Yaseen working Director |
|
| of
the Company w.e.f. 01-01-2000. |
|
|
| "Further
resolved that keeping in view the inflationary condition, |
|
| the
remuneration of Mr. Asim Yaseen, Director of the Company |
|
| be
and is hereby revised w.e.f. 01-01-2000 as follows: |
|
|
| 1. Basic Salary |
|
Rs. 200,000 per month |
|
| 2.
House Rent Allowance |
Rs. 90,000 per month |
|
| 3. Utilities |
|
Rs. 20,000 per month |
|
|
| To
discontinue the remuneration of Mr. Mohammad Waseem |
|
| Mukhtar
Director the Company w.e.f. 01-01-2000. |
|
|
| "Further
resolved that the remuneration of Mr. Mohammad Waseem |
|
| Mukhtar
Director of the Company be and is hereby discontinued |
|
| w.e.f.
01-01-2000. |
|
|
| 7.
To transact any other business with the permission of the chair. |
|
|
|
|
By Order of the Board |
|
|
|
|
|
|
|
|
|
| Lahore: |
|
Anwarul Haque |
|
| December 17, 1999 |
|
Company Secretary |
|
|
|
| Note: |
|
|
| i)
The share transfer books of the Company shall remain closed from |
|
| 20-1-2000
to 29-01-2000 (both days inclusive) to determine the |
|
| names
of members entitled to receive dividend and to attend the |
|
| meeting.
Transfers received in order at the Shares Registration |
|
| office
of the Company at the close of business on 19-01-2000 will |
|
| be
treated in time. |
|
|
| ii)
A member entitled to attend and vote at the meeting may appoint |
|
| another
member as his/her proxy to attend and vote on his/her behalf. |
|
|
| iii)
The proxies, in order to be effective, must be received by the |
|
| Company
at least 48 hours before the time of holding the meeting. |
|
|
| iv)
Any person who seeks to contest election to the office of Director |
|
| shall,
whether he is retiring or otherwise, file with the Company |
|
| not
later than 14 (fourteen) days before the date of the meeting, |
|
| notice
of his/her intention to offer himself/herself as a Director |
|
| together
with his/her consent. |
|
|
|
| Directors'
Report to the Shareholders |
|
|
|
| We
feel pleasure in presenting the annual audited report for the year |
|
| ended
3-0-09-1999. |
|
|
| Financial
Results |
|
| The
company has generated a gross sales revenue of Rs. 3,967,667,526/= |
|
| as
compared to gross sales revenue of Rs. 3,682,757,144/= in the previous |
|
| year.
The summarized position of financial results is being furnished |
|
| hereunder: |
|
|
|
|
|
Year ended |
Year ended |
|
|
|
|
September 30 |
September 30 |
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Gross profit |
|
|
|
785,027,361 |
303,236,051 |
|
| Miscellaneous
income |
|
|
|
7,026,022 |
6,396,220 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
792,053,383 |
309,632,271 |
|
| Operating
expenses |
|
|
|
41,181,963 |
35,252,396 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
|
750,871,420 |
274,379,875 |
|
| Financial
and other charges |
|
|
|
177,801,111 |
151,432,018 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
|
573,070,309 |
122,947,857 |
|
| Provision
for taxation |
|
|
|
17,340,746 |
16,399,035 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
|
555,729,563 |
106,548,822 |
|
| Unappropriated
profit brought forward |
|
|
60,123,531 |
153,574,709 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
|
615,853,094 |
260,123,531 |
|
|
|
|
========== |
========== |
|
|
|
|
| Dividend |
|
|
|
| Your
directors are pleased to recommend 10% cash Dividend i.e. |
|
| Re.
1.00 per share out of profits earned during the year and the profit |
|
| has
been appropriated as under: |
|
|
|
|
|
|
| Appropriations |
|
|
|
| Proposed
dividend @ 10% (1998 @ 10%) |
|
|
200,000,000 |
200,000,000 |
|
| Transfer
to general reserve |
|
|
|
415,800,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
615,800,000 |
200,000,000 |
|
| Unappropriated
profit carried forward |
|
|
53,094 |
60,123,531 |
|
|
|
|
------------------ |
------------------ |
|
| Earning
per share |
|
|
|
2.78 |
0.53 |
|
|
|
|
========== |
========== |
|
|
| Chairman's
Review |
|
| Directors
of the Company fully endorse the Chairman's review on the |
|
| performance
of the Company during the year ended September 30, 1999. |
|
|
| Auditors |
|
| The
present auditors M/s M. Yousuf Adil Saleem & Co., Chartered |
|
| Accountants
retire and being eligible, consented for re-appointment |
|
| for
the next financial year 1999-2000. |
|
|
| Pattern
of shareholding |
|
| Pattern
of shareholding of the company is annexed. |
|
|
| Acknowledgment |
|
| The
management wishes to place on record its deep appreciation for |
|
| the
hard work and positive efforts made by the executives and |
|
| employees.
The management would also like to thank for the whole |
|
| hearted
support and co-operation extended by our valued customers, |
|
| bankers,
financial institutions and shareholder and hope to get the same |
|
| cooperation
in future. |
|
|
|
On behalf of the Board |
|
|
|
|
|
|
|
| Lahore: |
|
Sheikh Mukhtar Ahmed |
|
| December 17, 1999 |
|
Chief Executive |
|
|
|
| Group
Performance |
|
|
| Sales |
|
6,338,041,149 |
|
| Net
profit after tax |
|
762,674,074 |
|
| Total assets |
|
7,165,295,568 |
|
| Equity |
|
4,759,496,909 |
|
| Contribution
to National Exchequer |
|
1,139,424,828 |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Ibrahim Fibres Limited |
|
| as
at September 30, 1999 and the related profit and loss account and |
|
| statement
of changes in financial position (cash flow statement) 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 and, after due verification thereof, we report that: |
|
|
| (a)
in our opinion, proper books of account have been kept by the |
|
| Company
as required by the Companies 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 and profit and |
|
| loss
account and the statement of changes in financial position |
|
| (cash
flow statement) together with the notes forming part thereof, |
|
| give
the 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, |
|
| 1999
and of the profit and the changes in financial position for |
|
| the
year then ended; and |
|
|
| (d)
in our opinion, no Zakat was deductible at source under the |
|
|
| Zakat
and Ushr Ordinance, 1980. |
|
|
|
|
|
| Faisalabad, |
|
|
M. Yousaf Adil Saleem & Co., |
|
| December
17, 1999. |
|
Chartered Accountants |
|
|
|
|
| Balance
Sheet as at September 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
| Operating
assets |
|
3 |
2,645,420,546 |
2,960,764,676 |
|
| Capital
work in progress |
|
4 |
47,660,845 |
24,999,383 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,693,081,391 |
2,985,764,059 |
|
| LONG
TERM DEPOSITS AND DEFERRED COSTS |
5 |
917,750 |
18,771,375 |
|
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
6 |
38,589,583 |
23,850,588 |
|
| Stock in trade |
|
|
7 |
746,437,872 |
645,645,397 |
|
| Trade debts |
|
|
8 |
102,758,614 |
141,018,369 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
9 |
59,735,941 |
66,206,083 |
|
| Cash
and bank balances |
|
10 |
639,362,464 |
426,441,010 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,586,884,474 |
1,303,161,447 |
|
| CURRENT
LIABILITIES |
|
|
|
|
|
| Current
portion of long term liabilities |
|
11 |
211,789,884 |
209,048,931 |
|
| Creditors,
accrued and other liabilities |
|
12 |
96,567,215 |
454,627,308 |
|
| Taxation |
|
|
|
33,739,781 |
26,072,402 |
|
| Dividend |
|
|
|
210,688,604 |
22,483,733 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
552,785,484 |
712,232,374 |
|
|
|
|
------------------ |
------------------ |
|
| WORKING
CAPITAL |
|
|
1,034,098,990 |
590,929,073 |
|
|
|
|
|
|
|
| TOTAL
CAPITAL EMPLOYED |
|
|
3,728,098,131 |
3,595,464,507 |
|
| LONG
TERM AND DEFERRED LIABILITIES |
|
|
|
|
| Long term loans |
|
|
13 |
294,211,993 |
527,761,147 |
|
| Liabilities
against assets subject to finance lease |
|
14 |
152,939 |
304,919 |
|
| Staff gratuity |
|
|
|
17,880,105 |
7,274,910 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
312,245,037 |
535,340,976 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
15 |
-- |
-- |
|
|
|
|
|
------------------ |
------------------ |
|
| NET WORTH |
|
|
|
3,415,853,094 |
3,060,123,531 |
|
|
|
|
|
------------------ |
------------------ |
|
| REPRESENTED
BY: |
|
|
|
