REPORT ON SUCCESS STORY OF

Table of Content:
 INTRODUCTION
 BACKGROUND AND SIGNIFICANCE
 RESEARCH DESIGN AND METHODOLOGY
 FINDINGS
 STORY OF FOUNDER
 GUL AHMED GROUP
 GUL AHMED TEXTILES MILL LTD.
 RECENT LAUNCH
 ASSOCIATIONS/TRADE BODY
 VISION,MISSION AND VALUES
 BUSINESS ACTIVITIES
 BOARD OF DIRECTORS
 GOALS AND STRATEGIES
 ANALYSIS FINANCIAL INFORMATION OF LAST 5 YEARS
 STATEMENT OF BUSINESS CONDUCT AND ETHICS CODE
 VARIOUS STAKEHOLDERS
 PRODUCTS
 SUSTAINABILITY REPORT
 HUMAN RESOURCE
 SWOT ANALYSES
 ENVIRONMENTAL OVERVIEW
 CONCLUSION
Acknowledgement:
We would like to express our sincere gratitude to sir Hasan zia who
gave us greatest prospect to make report on success story of Gul
Ahmed textile mills ltd.

We highly appreciate the contribution of Muhammad Humayun

Deputy General Manager, Sir Khuwaja Nasir Habib Head of
Administration and Manager of HR Mr.Nasir at Gul Ahmed Textile Mills
Ltd. who provided us discriminating and key knowledge of Gul Ahmed
Textile Mills Ltd.

We are highly grateful to the department of Public Administration and

Dr. Shabibul Hassan for guiding us and providing us with the every
possible assistance in the form of library, computer lab and respected
teachers who made this report indeed THE SUCCESS STORY OF
STUDENTS.

Regards,

Syeda Qurat Zehra,

Reyma Khan,
Samreen Rehan,
Shahzaib Malik,
Arsalan Khan,
Saad Yousuf,
Ukasha Mustafa
Introduction:

The story of textiles in the subcontinent is the story of Gul Ahmed. The group
began trading in textiles in the early 1900s. The group entered in the field of
manufacturing with the establishment of today’s iconic name of Gul Ahmed
Textile Mills Ltd in the year 1953. Since its listing on the Karachi Stock
Exchange in 1970, the company has been making rapid progress and
enjoying a leading position in the world of textiles.

Background and significance:

Gul Ahmed was started as the first textile mill in the sub-continent. They
became successful in maintaining their quality from the very beginning
despite having basic machinery. With the passage of time they captured the
market with their new versatile ideas and made customers satisfied.
With an installed capacity of more than 130,000 spindles, 300 state-of-the-
art weaving machines and most modern yarn dyeing, processing & stitching
units, Gul Ahmed is a composite unit – making everything from cotton yarn
to finished products. Gul Ahmed has its own captive power plant comprising
of gas engines, gas & steam turbines, and backup diesel engines. Believing in
playing its role in protecting the environment, Gul Ahmed has also set up a
waste water treatment plant to treat 100% of its effluent, bringing it to
NEQS levels.

Gul Ahmed is playing a vital role not only as a textile giant, but has its strong
presence in the retail business as well. The opening of its flagship store –
Ideas by Gul Ahmed– marked the group’s entry into the retail business.
Starting from Karachi, Gul Ahmed now has an extensive chain of more than
40 retail stores across the country, offering a diverse range of products from
home accessories to fashion clothing.More than 50 years since its inception,
the name Gul Ahmed is still globally synonymous the quality, innovation &
reliability.
Research design and methodology:
While writing our research report we came across the following research
design and methodology:
 We gathered information and data through their websites and
different fashion magazines and business journals.
 We gained informative experience meeting with esteemed Head of
Administration Mr.khuwaja, Deputy General Manager Mr. Humayun
khan and Human Resource Manager of unit no.2 of Gul Ahmed Textile
Mill Ltd.
 We visited the Human Resource Department of the organization too.
 We noticed their rapid progress by going through their Annual Report
2015.

Findings:

We gathered the findings given below:

 During the meeting we found them highly cooperative and obliged to
their organizational rules.

 Having visited their organization we found distinct culture reflecting

their core values.
 We gathered statistical information regarding their progress and
strategies they use in order to maintain gross profit by tackling risks.
 We experienced highly strict security system for entering into the
premises.
 We were provided chance of vising human resource, production and
administration department.
Story of founder:
Haji Ali Mohammad Pakolawala and Teli group

Late Haji Ali Mohammad was a memon philanthropist and entrepreneur

who introduced Pakistan’s first national branded drink Pakola which in no
time became famous and mass favorite. His family came to be known as
Pakolawala's, after the famous drink. He also founded Gul Ahmed-a major
business group of Pakistan.

Belonging to a family residing in Dhoraji he and his brothers had done

wonders in the business world and the younger ones of the family have
followed their footsteps. Haji Ali Mohammad's family in known in the
business circles as Teli group or more commonly Pakolawalas. This family
has contributed a lot in the economy of Pakistan. This family started its
business in 1890 in India. Seven brothers Haji Abdul Sattar, Haji Qassim,
Haji Abdul Lateef, Haji Habib and Haji Ali Muhammad, Haji Karim, Haji
Joosub started Dhabeji Salt Works, between Karachi and Thatta. In Dhoraji
they started schools and other social welfare organisations and during the
period 1940-41 they established a trust by the name of 'Haji Tahir
Muhammad Kassim Charitable Trust' which was transferred to Karachi in
1948.

All the brothers were very service-minded persons. They became one of the
leading groups of industrialists of the country. They were in the forefront of
social service and established several institutions to which they contributed
fabulously large sums of money. Their charity extended beyond the borders
of Pakistan and was well-known internationally. They contributed a large
amount towards the construction of Masjid-e-Ghafooria. They are looking
after and managing Jamal Noor Hospital which is providing low cost and
even free treatment to the people of Karachi irrespective of caste, creed and
community. They also played a leading part in the field of rehabilitation in
Karachi, Hyderabad and Sukkur and outside Pakistan.
Haji Ali Muhammad became the President of the Pakistan Memon
Educational and Welfare Society. Haji Ibrahim, eldest nephew is the head of
the Memon Educational Board which runs and manages many schools in
Karachi. They also established a girls school in Dhoraji Colony, Karachi.

The entire family is active in industrial and charitable activities, donating

large amounts in the field of education, health, and running of Madarassas
all over Pakistan. Some of the family business interests, such as Gul Ahmed
Textile Mills Limited, are now managed by his son, Bashir Ali Mohammad.

Gul Ahmed Group:

The Gul Ahmed Group is a Pakistani company that includes Gul Ahmed
Textile Mills, Gul Ahmed Energy and Habib Metropolitan Bank. More
recently, a chain of retail outlets has been operating under the name "Ideas
by Gul Ahmed". The group's other concerns go by the name of Swisstex
Chemicals (Private) Limited, which is a large chemical distribution company
that has the sole rights for supplying Ciba Specialty Chemicals in Pakistan.
The group has invested in outsourcing information technology with Arwen
Technologies.
Group companies:
 Gul Ahmed International Limited
 GTM Europe Limited
 Gul Ahmed Textile Mills Limited
 Gul Ahmed Energy
 Habib Metropolitan Bank
 Gul Ahmed Textile Mill

With an installed capacity of more than 130,000 spindles, 300 state-of-the-

art weaving machines and most modern yarn dyeing, processing & stitching
units, Gul Ahmed is a composite unit – making everything from cotton yarn
to finished products. Gul Ahmed has its own captive power plant comprising
of gas engines, gas & steam turbines, and backup diesel engines. Believing in
playing its role in protecting the environment.

Gul Ahmed is playing a vital role not only as a textile giant, but has its strong
presence in the retail business as well. The opening of its flagship store –
Ideas by Gul Ahmed– marked the group’s entry into the retail business.
Starting from Karachi, Gul Ahmed now has an extensive chain of more than
40 retail stores across the country, offering a diverse range of products from
home accessories to fashion clothing.More than 50 years since its inception,
the name Gul Ahmed is still globally synonymous the quality, innovation &
reliability.
Recent launch:

Ideas by Gul Ahmed

History
Gul Ahmed has been an exporter of textiles for the past many years and
with its vast experience, reach and nationwide goodwill the company has
developed an extensive chain of stores across the country, aiming to
bring its customers an unbeatable shopping experience now having more
than 40 nationwide outlets Ideas is looking for new destinations to serve
its awaiting customers.

Ideas® by Gul Ahmed is the retail venture of Gul Ahmed Textile Mills Ltd.
Envisioning the needs of customers and the growing trend towards the retail
industry, the company decided to diversify into the retail sector in 2003.

Franchising

Ideas by Gul Ahmed is an Iconic name in the Fashion Retail Industry of

Pakistan and is owned by one of the biggest textile houses in the country.
Ideas by Gul Ahmed is synonymous with the finest quality in Fabric, Apparel,
Home Textile, Accessories, Shoes & Bags.
We are looking for entrepreneurs who can become our business partners in
the cities where currently we don't have our presence.
 Association / Trade body

 All Pakistan Textile Mills Association

 Karachi Chamber of Commerce & Industry
 The Karachi Cotton Association
 Pakistan Business Council
 Employers’ Federation of Pakistan
 Pakistan Textile Exporters Association
 All Pakistan Textile Processing Mills Association
 Pakistan Bed wear Exporters Association
 Pakistan Hosiery Manufacturers & Exporters Association
 Karachi Centre for Dispute Resolution
 International Textile Manufacturers Federation
 Fellowship Fund for Pakistan

Company Registration Number

New registration number: CUIN 000586

Company National Tax Number

0698283-
Registerd Office Address:
Plot No.82, Main National Highway, Landhi, Karachi-75120.
Vision, mission and values:

Vision
Setting trends globally in the textile industry. Delivering the best
products and services to our customers

Mission
To deliver value to our stakeholders through innovative technology,
teamwork and by fulfilling our social and environmental
responsibilities.

Values
In achieving its vision and fulfilling its mission, the Company shall
operate on the following core values:
Integrity
Passion
Creativity
Teamwork
Business activities:

Excellence in quality and service is the hallmark of all operations performed

at Gul Ahmed. Firmly standing by its business values, Gul Ahmed is active in
manufacture and sale of textile products.

The manufacturing wing is an essential component in Gul Ahmed’s

operations. The manufacturing cycle, which includes spinning, weaving,
processing, designing and stitching, results in an end product that is tailored
to the most stringent customer requirements.

On the retail front, Ideas by Gul Ahmed offers fabrics and made-ups, ranging
from home accessories to clothing. It not only provides fashion at great
value, but also caters to various customer needs by offering a diverse
product mix. This leads to a complete and enjoyable retail experience. As a
result of this, the chain has expanded to 40 stores across Pakistan since its
inception in 2003.

Permissible Business
The principal business activity of the Company is manufacture and sale of
textile products. Details of other permissible business activities of the
Company are as contained in the objects clause of the Memorandum of
Association of the Company.
Board of directors:
Mr. Bashir Ali Muhammad
Chairman

Mr. Bashir Ali Muhammad joined the Board of Gul Ahmed Textile Mills
Limited in 1982. He is a fellow member of Chartered Institute of
Management Accountants (CIMA), United Kingdom.

Mr. Bashir Ali Muhammad has a very rich and extensive experience in the
commerce and industry. He is currently the Chairman of the Board of
Directors of Gul Ahmed Textile Mills Limited. He is also serving on the
Boards of the following companies;

 Pakistan Business Council

 Gul Ahmed Energy Limited
 Habib Metropolitan Bank Limited
 GTM (Europe) Limited – UK
 Gul Ahmed International Limited (FZC) – UAE
 GTM USA Corp–USA
 Habib University Foundation
 Education Fund of Sindh
 Gul Ahmed Holdings (Private) Limited

Presently his honorary Government, Trade & Industry and Consular

positions include;

 Chairman, Committee to Improve Pakistan’s rating on Ease of Business Index

 Honorary Consul General of Sweden – Karachi
 Member, Advisory Board of CPLC, Government of Sindh (2010)
 Member, Pakistan France Business Council
 Member, Pakistan German Business Council
 Member, Tax Reform Commission, Ministry of Finance
 Member, Tax Advisory Council, FBR
Previously, he has also held the following honorary Government and Trade &
Industry positions;
  Chairman, Pakistan Business Council – 2014 – 2015
 Vice Chairman, Pakistan Business Council – 2013 – 2014
 President, International Textile Manufacturers Federation (ITMF) (2010 – 2012)
 Vice President, International Textile Manufacturers Federation (2008 – 2010)
 Founder, Trustee, Fellowship Fund For Pakistan till 2013
 Member, Advisory Committee, Federal Tax Ombudsman, Government of Pakistan
(2011 – 2014)
 Member, Economic Advisory Council, Government of Pakistan (2001-2003 /
2008-2013)
 Member, Export Promotion Board, Government of Pakistan (2002 – 2007, 1995 –
1997)
 Member, National Strategy on Textiles (2006 – 2007)
 Chairman, Pakistan Britain Advisory Council (2002 – 2005)
 Chairman, All Pakistan Textile, Mills Association (1989 – 1990)
 Vice Chairman, All Pakistan Textile Mills Association (1982 – 1985)
 Chairman, Pakistan Swiss Trade and Industry Committee (1981– 2000)
 Governing Board, Pakistan Design Institute (1981 – 2000)
 In recognition of his services he was awarded Sitara‐e‐Imtiaz by the President of
Pakistan in 2006 and has also been conferred as Justice of Peace.

Mr. Zain Bashir

Vice Chairman

Mr. Zain Bashir joined the Board in May 1997. He is also the Vice Chairman
of the Company and is a certified director from the Pakistan Institute of
Corporate Governance (PICG). He is on the Board of Landhi Infrastructure
Development and Management Company, which is responsible for
enhancing the infrastructure of Landhi Industrial Area. In 2009-2010, he
remained the Chairman of the Landhi Association of Trade & Industry. In
2012- 2013, he remained the Chairman of the Pakistan Bedwear Exporters
Association. He is presently the President of the Landhi Association of Trade
& Industry for the year 2015- 2016.

His extensive association with the textile sector has provided him with an in-
depth knowledge of the industry.
Mr. Mohammad Zaki Bashir
Chief Executive Officer

Mr. Mohammed Zaki Bashir joined the Board in March 2008. He is currently
the Chief Executive Officer of Gul Ahmed Textile Mills Limited. He holds a
graduate degree from Regent’s Business School, UK, in the subject of
International Business and is also a certified director from Pakistan Institute
of Corporate Governance (PICG).

Through his thorough knowledge of the Company, he has contributed to the

overall growth of the Company.

Mr. Ziad Bashir

Mr. Ziad Bashir has been on the Board since February 1999. A graduate
from Babson College, USA, with a bachelor degree in Entrepreneurial
Studies, he has a comprehensive experience of the textile sector and is
involved in various developmental and operational activities of the
Company.

He is also associated with the Information Technology (IT) industry and has
played a key role in the transformation of the Company’s IT infrastructure.
He is a certified director from Pakistan Institute of Corporate Governance
(PICG).

Over the years, he has served as Chairman of Landhi Association of Trade

and Industry and on the Board of Central Managing Committee of All
Pakistan Textile Mills Association (APTMA). He has also served as a
President of Young Presidents Organization (YPO), Pakistan and Executive
Committee of the Pakistan Board of Investment. He is currently serving on
the Punjab Board of Investment
Mr. S.M. NadimShafiqullah

As an independent non-executive director, Mr. S.M. NadimShafiqullah’s

association with the board dates back to March 2008. He is also the
Chairman of the Audit Committee of the Company and a certified director
from the Pakistan Institute of Corporate Governance (PICG).

He had served as Director and Vice-Chairman on the Board of Security

leasing Corporation Limited in the past.

Dr. AmjadWaheed

Dr. AmjadWaheed joined the Board as an independent non – executive

director on March 31, 2011. He holds a Doctorate in Business Administration
with a major in Investments and Finance from Southern Illinois University,
USA and is also a Chartered Financial Analyst (CFA). Since its inception, he is
the CEO of NBP Fullerton Asset Management Limited (NAFA), which is a
subsidiary of National Bank of Pakistan, with Fullerton Fund Management
Company of Singapore as the other joint venture partner. NAFA is presently
managing 21 mutual funds, two pension funds and several Advisory
portfolios with around Rs. 63 Billion (as of 31st August 2016) invested in
these funds.

Dr. AmjadWaheed has served on the Board of various companies including

Siemens (Pakistan) Engineering Co.Limited, Nishat Mills Limited, PICIC,
Askari Bank Limited, Millat Tractors Limited, Fauji Fertilizer Company
Limited, Pakistan Tobacco Company Limited, Parke–Davis & Company
Limited, Treet Corporation Limited, Atlas Investment Bank Limited, Bata
Pakistan Limited and Mehran Sugar Mills Limited.

Dr. Amjad Waheed has been elected as the Chairman of the Board of
Directors of Mutual Fund Association of Pakistan (MUFAP) for the year 2013
– 2014.

Dr. Amjad Waheed is a certified director from Pakistan Institute of

Corporate Governance (PICG).
Mr. Ehsan A. Malik

Mr. Ehsan A. Malik joined the Board of Directors of the Company as an

independent non-executive director in June 2016. He is a certified director
from the Pakistan Institute of Corporate Governance (PICG). Mr. Ehsan A.
Malik is currently serving as the Chief Executive Officer of Pakistan Business
Council. From 1st September 2006 to 31 October 2014 Mr. Malik was the
Chief Executive Officer of Unilever Pakistan Limited and a director of
Unilever Pakistan Foods Limited. Prior to this he was Chairman and CEO,
Unilever Sri Lanka Limited. His earlier international appointments covered
Unilever’s regional business in Egypt, Lebanon, Jordan, Syria and Sudan as
well as Unilever’s Head Office in UK. These preceded senior commercial and
financial roles at Unilever Pakistan. He is also a Member of the Board of
Directors of Abbott Laboratories Pakistan Limited, IGI Life Insurance
Limited and National Foods Limited.

Mr. Malik is a Fellow of the Institute of Chartered Accountants of England

and Wales and alumni of the Wharton and Harvard Business Schools.
Goals and strategies:

Goals:

 Lead textile industry

 Manufacture prime quality products
 Create new opportunities for business growth and diversification
 Be an environment-friendly and socially responsible Company
 Maintain operational, technological and managerial excellence

Strategies:

 Investing in state-of-the-art machinery to ensure quality

 Investing in technology to fulfill the manufacturing requirements of the
diversified portfolio
 Implementation of the Enterprise Resource Planning software to
integrate all the operations of the Company
 Strong quality management system to ensure that products not only
meet the customers’ requirements but are also safe for use both by
adults and children
 Outsourcing
 Retaining and hiring competent and experienced staff/workers at
competitive remuneration and benefits
 Paying benefits to the employees competitive to the labor market,
considering the welfare of employees as well
 Nurturing of creative talent and skills in relevant human resource who
can visualise and create new fashion trends
 Ensure that the workforce is fully aware of the safety measures which
they have to take while performing daily assigned jobs and/or in case
of any emergency
 Encouraging the employment of females and special persons
 Zero tolerance against child labor
 Effective marketing to secure highest growth rates in terms of sales
and earnings per share
 Diversification of products is the core strategy. Depending on the latest
fashion trends the Company must be able to fulfill the requirements of
different customers

 Retain and develop a green environment

 Maximum possible recycling of waste
 Save energy, water and ensure minimum possible carbon emissions
 Employee stock option scheme
Financial information of last 5 years:
Profit & Loss 2015 2014 2013 2012 2011 2010
Sales 33,355 33,013 30,243 24,945 25,464 19,689
Gross profit 6,094 5,976 4,751 3,512 4,655 3,173
Operating profit 2,118 2,659 2,120 1,400 2,664 1,653
Profit / (loss) before tax 783 1,496 852 (1) 1,537 708
Profit / (loss) after tax 605 1,235 711 (240) 1,196 478
Cash dividend 343 *81 – – – 79
Bonus share – 457 305 – 635 -

Balance Sheet
Property, plant and equipment 9,039 8,210 7,132 6,829 6,654 6,140
Intangible 11 20 23 27 39 16
Long term investment, loans, 165 151 112 109 96 93
advances and deposits
Net current assets 756 890 666 (98) 422 (224)
Total assets employed 9,971 9,271 7,933 6,867 7,211 6,025
Represented by :
Share capital 2,285 1,828 1,523 1,270 635 635
Reserves 4,884 4,832 3,905 3,203 4,078 2,961
Shareholders’ equity 7,196 6,660 5,428 4,473 4,713 3,596
Long term loans 2,408 2,239 2,155 2,096 2,199 2,223
Deferred liabilities 394 372 350 298 299 207
Total capital employed 9,971 9,271 7,933 6,867 7,211 6,025

Cash Flow Statement

Operating activities 670 2,090 (161) 3,497 (2,617) 454
Investing activities (1,783) (1,833) (1,068) (920) (1,250) (711)
Financing activities 108 217 210 (70) (148) (170)
Cash and cash equivalents 8,721 (7,715) (8,188) (7,169) (9,676) (5,660)
at the end of the year
*Represents actual dividend amount excluding amount payable to Holding
Company and an Associated Company who have foregone their right to the
dividend.

Financial Ratios
Profitability ratios
Gross profit ratio ( %) 18.27 18.10 15.71 14.08 18.28 16.12
Operating leverage (19.65) 2.77 2.56 23.48 2.03 0.88
ratio(Times)
EBITDA margin to sales (%) 9.28 10.66 9.59 8.53 13.19 11.92
Net profit to sales (%) 1.18 3.74 2.35 (0.96) 4.70 2.43
Return on equity (%) 8.75 20.43 14.36 (5.23) 28.80 14.22
Return on capital employed 22.01 30.91 28.65 19.90 40.25 27.87
(%)
Liquidity ratios
Current ratio 1.05 1.06 1.05 0.99 1.03 0.97
Quick/acid test ratio 0.24 0.20 0.27 0.24 0.19 0.34
Cash to current liabilities 0.01 0.01 0.01 0.01 0.01 0.01
Cash flow from operations to 0.02 0.06 (0.01) 0.14 (0.10) 0.02
sales
Capital structure ratios
Financial leverage ratio 1.67 1.62 2.03 2.25 2.67 2.40
Weighted average cost of 0.09 0.10 0.11 0.11 0.10 0.11
debt
Debt to equity ratio 0.34 0.34 0.40 0.47 0.47 0.62
Interest cover ratio 1.59 2.29 1.67 0.98 2.34 1.75
Turnover ratios
Inventory turnover (Days) 155 145 121 151 134 98
Inventory turnover ratio 2.35 2.52 3.00 2.41 2.72 3.74
Debtor turnover (Days) 18 22 28 30 31 45
Debtor turnover ratio 20.33 16.76 13.01 12.15 11.60 8.05
Creditor turnover (Days) 118 126 100 86 82 73
Creditor turnover ratio 3.10 2.91 3.64 4.23 4.43 4.98
Fixed assets turnover ratio 3.69 4.02 4.24 3.65 3.83 3.21
Total assets turnover ratio 1.34 1.36 1.43 1.41 1.25 1.35
Operating cycle (Days) 55 41 49 95 83 70

Investor information
Earnings per share (Rupees) 2.65 6.75 4.09 (1.73) 9.42 3.76
Price earnings ratio 18.51 9.48 5.81 (12.18) 5.49 4.93
Price to book ratio 0.45 0.48 0.17 0.15 0.16 0.08
Dividend yield ratio 0.03 *0.02 – – – 0.07
Cash dividend per 1.50 *1.50 – – – 1.25
share(Rupees)
Bonus shares issued (%) – 25 20 – 100 –
Dividend payout ratio (%) 56.60 *22.21 – – – 16.60
Dividend cover ratio (Times) 1.77 *4.50 – – – 6.02
Break-up value per 31.37 36.43 35.63 35.23 37.12 28.32
share(Rupees)
Market value per share
at the end of the year 49.05 64.01 23.74 21.11 51.73
(Rupees) 73.25 72.35 27.64 64.29 53.65
high during the year 44.65 20.50 19.16 16.05 18.53
(Rupees)
low during the year
(Rupees)
EBITDA (Million) 3,094 3,519 2,900 2,129 3,359 2,347
*Represents cash dividend proposed @ Rs. 1.50
per share. However Holding
Company and an Associated Company have foregone their right to the dividend.
STATEMENT OF BUSINESS CONDUCT AND
ETHICS CODE:
Our dealings with business partners, colleagues, shareholders and general
public is based on good corporate conduct. The statement of business
conduct and ethics, as given below, is the foundation of our business
principles:

ETHICAL DECISION MAKING

 General guidelines may include using good judgment and avoiding

even the appearance of improper behavior. If ever in doubt about an
action whether it is compliant with/is consistent with the guidelines of
the Code, ask yourself:
 Is it consistent with the Code?
 Is it ethical?
 Is it legal?
 If it were made public, would I be comfortable?
 If the answer is “No” to any of these questions, don’t do it.
 If you are still uncertain, ask for guidance. You can seek help from any
of the following:
 The Management
 Legal Department
 Human Resource Department
 Company Secretary

COMPLIANCE WITH LAWS, POLICIES AND PROCEDURES

 Directors/employees shall not make, recommend or cause to be taken
any action known or believed to be in violation of any law, regulation
or corporate policy.
 Directors/employees shall not make, recommend or cause to be made
any expenditure of funds known or believed to be in violation of any
law, regulation or corporate policy.
INTEGRITY AND RESPECT FOR OTHERS

 Directors/employees shall conduct their activities with the highest

principles of integrity, truthfulness, objectivity and honor.
 Directors/employees shall neither use their position to engage in
unfair, deceptive or misleading practices nor shall they offer, promise
or provide anything to a customer or supplier in exchange for an
inappropriate advantage for himself/herself or even for the Company.
 Any person representing the Company to the third parties shall not
allow himself/herself to be placed in a position in which an actual or
apparent conflict of interest exists.

CONFIDENTIALITY
 Directors/employees shall not use or disclose the Company’s trade
secrets, proprietary information, or any other confidential information
gained in the performance of duty.
 Every employee must be cautious and discreet when using information
categorized as “classified” or “confidential-restricted access.” Such
information should be shared only with the Company’s employees who
have a legitimate “need to know.” Outside parties should have access to
such information only if they are under binding confidentiality
agreements and have a “need to know.”
 Similarly, when handling sensitive information that has been entrusted
to our Company by others, we must always treat it with the maximum
care. Doing so, it can protect the Company from potential liability.
 We must also comply with all laws, regulations and contractual
commitments regarding the valid and enforceable intellectual
property rights of third parties, including patents, copyrights, trade
secrets and other proprietary information.
 If anyone has a question about the use of patented or proprietary
information, including computer software of third parties, he/she
should contact Legal Department. In order to use copyright material
such as articles, charts, maps, films and music, permission must be
obtained from the copyright owner.
AVOIDING CONFLICT OF INTEREST
It is always expected from every director/employee to act in the best
interests of the Company. This means that business decisions should be
made free from any conflict of interest. They should also appear impartial.
Decisions must be made on sound business reasoning.

1. Directors and employees — and their close relatives – must never:

a. Compete against the Company.

b. Use their position or influence to secure an improper benefit for
themselves or others.
c. Use Company information, assets or resources for their personal gain
or for the unauthorized benefit of others.
d. Take advantage of inside information.

2. It is also a conflict of interest for a director or employee to give or

receive gifts or cash in any amount to or from people or companies doing
or seeking to do business with the Company. Therefore, we must not:

a. Accept fees or honoraria in exchange for services provided on behalf

of the Company.
b. Provide or accept gifts or entertainment from anyone doing or
seeking business with the Company or any of its affiliates. Generally,
modest forms of gifts and entertainment (like souvenirs of the company or
magazines and lunch/dinner in connection with their duties to the
Company) received from vendors are acceptable and do not create conflict
of interest. Consult with Legal Department to learn about the guidelines.
INSIDER TRADING

1. It is illegal to purchase or sell securities of the Company if you have

“material non-public information” concerning the Company.

2. If anybody engages in insider trading then he/she will face

disciplinary actions including significant civil and criminal penalties.

COMPANY RECORDS AND INTERNAL CONTROLS

1. The Company’s books and records must be prepared accurately and

honestly, both by our accountants who prepare records of transactions and
by any of us who contribute to the creation of business records.

2. The Company shall maintain accounting records and issue financial

statements as required by the local laws to ensure transparency of
information on the Company’s financial performance.

3. Reliable internal controls are critical for security of Company’s assets,

proper, complete and accurate accounting and financial reporting. Everyone
must understand the internal controls relevant to his/her position and
follow the policies and procedures related to those controls. Everyone is
encouraged to talk to their managers or supervisors immediately if ever in a
doubt that a control is not adequately detecting or preventing inaccuracy,
waste or fraud.

4. Audits performed by internal and external auditors help ensure

compliance with established policies, procedures and controls. Audits also
help identify potential weaknesses so these may be fixed promptly. Everyone
is required to cooperate fully with internal and external auditors. This
means always providing clear and truthful information and cooperating
fully during the audit process.
5. Engaging in any scheme to defraud anyone — of money, property or
honest services — Violates Company’s policy and carries severe penalties.
These consequences apply to all dishonest or fraudulent activities, including
misusing or stealing assets. The Company relies on its internal controls and
the personal integrity of all of its directors, employees and contractors to
protect assets against damage, theft and other unauthorized use

DEALING WITH VARIOUS STAKEHOLDERS:

Every business unit or section of the Company shall follow policies and
procedures which are consistent with the Code while dealing with
different stakeholders.

1. Customers

a) Treat customers fairly and honestly.

b) Provide high standards of service and quality products

c) Operate effective complaint processes to deal with situations where

these standards are challenged.

d) Aim to provide and promote a range of products and services that

meet customer requirements and needs

e) Maintain the confidentiality of customer information, except where

the law requires/permits disclosure, or the customer has given prior
written consent.
2. Employees

a) The Company has maintained a suitable working environment that

provides appropriate training, transparent career growth opportunities
and competitive remuneration packages including benefits which are also
in compliance with the employment related laws and regulations of
Pakistan as well as other relevant countries.

b) It is ensured that all the values and standards required by our

business practices are communicated to each employee.

c) Provide a clean, healthy and safe work environment, stressing the

obligation on all employees to take every reasonable precaution to avoid
injury to themselves, colleagues and members of the public.

d) Provide appropriate facilities to fulfill the needs of special employees

e) The Company follows the laws that prohibit discrimination in

employment practices. It is Company’s policy to provide equal
employment opportunities and to treat applicants and employees without
bias. It is our policy that no one is ever subject to discrimination on the
basis of:

• Race
• Religion
• Color
• National origin
• Age
• Sex
• Disability
• Personal/Political preference
3. Suppliers of Goods and Services

f) Encourage dealing with those suppliers/vendors who operate with

values and standards similar to those of the Company.

g) Work together with suppliers/vendors following the laws and

policies to improve all aspects of performance.

h) Agree terms of payment when orders for goods and services are
placed and pay in accordance with those terms.

i) No one shall engage in unfair, deceptive or misleading practices

including receiving or demanding of any favors or benefits from a supplier
as an advantage for him to win a bid or contract.

4. Communities

j) Contribute to the social and economic well-being of communities

connected to the places of business of the Company.

k) Encourage employees to participate in projects and initiatives for the

welfare of these communities.

l) Work and plan operations of business to minimize adverse

environmental impact.

5. Competitors

m) Conduct business in accordance with the Code and compete

vigorously but honestly.

n) Avoid disclosing any confidential information except as required by

the law.
o) The Company competes fairly and complies with all applicable
competition laws wherever the Company operates. These laws often are
complex, and vary considerably from country to country. Penalties for
violation can be severe. Therefore, directors/employees should seek legal
advice.

6. Governments and Regulators

p) Comply with all applicable laws, rules and regulations under which
the Company operates.

q) Maintain a constructive and open relationship with regulators to

foster mutual trust, respect and understanding.

PRODUCT:

Product Stewardship
At Gul Ahmed, we focus on delivering high-quality products to our
customers. Customers’ satisfaction is our key objective. We have taken the
following measures regarding product quality and consumer protection:

• Quality control checks at different stages of the process of

production and final quality check at the time of packing;
• Damaged or broken products are replaced;
• Environment friendly and quality packing;
• Free product exchange service;
• Customer friendly and hygienic environment;
• Product safety guidelines for washable products to enhance their life.
Product Portfolio
The production of textile is a mix of technical expertise and the creative
art required to make products acceptable to valued customers. At Gul
Ahmed, efforts are made to strive and grow through learning, continuous
improvement and innovation. Gul Ahmed is also equipped with the most
advanced technology that enables it to cater to a vast spectrum of product
varieties.

 Yarn

Yarn produced by Gul Ahmed is exported to a host of countries around the

globe. Gul Ahmed exports its yarn to different regions including China,
other Asian, Middle East countries and Europe.

Gul Ahmed manufactures different qualities of yarn which include carded,

combed, compact siro, fancy, plied, core spun, slub, package dyed/cone
dyed, gassed mercerized/dyed yarn.

 Fabric

Gul Ahmed has the facility to dye and print the whole range of home
textile and apparel fabrics. In addition, we also have the set-up for back
coating and flock printing which gives us an added opportunity to serve
the needs of our customers. Our products under the fabric category are
plain fabric, sheeting fabric, poplin, canvas, oxford, duck, Bedford cord,
herringbone, ottoman, twill, sateen, rib stops, slub fabric, stretch fabric
and mélange fabric.

 Made-ups

Gul Ahmed's fine textile products represent a unique fusion of the

centuries-old traditions of the east and the latest textile technology of the
west. The made-ups can be in white, dyed, printed or yarn-dyed form and
in different styles of confectioning. Our made-ups section comprises:
 Home Textiles

Home textile products furnish all home and office decoration needs and
are designed to set new trends and fashion vibes. This section includes:

 Sheets and Pillowcases

 Comforters
 Quilt/Duvet covers
 Bed-in-a-Bag
 Decorative pillows
 Curtains
 Upholstery fabrics
 Apparel and Garments

We have always kept alive the passion of creative designers and invited
young talent to express their talent in various forms of design. This is how
the Company encourages them and also benefits from their ideas. Our
value creation process and our human resource have never let us down.
The passion of our customers to rush to the stores on every new launch is
a testament to our success in creating appealing designs and new fashion
trends.

Getting impressive response from the local market, we have now gone for
the export of garments. Designing products according to the fashion flow
of the target countries and the GSP Plus status have helped us increase our
exports.
SUSTAINABILITY REPORT:
We own this world and we acknowledge our social and ethical
responsibility to carry out our business in order to keep it safe and protect
it for the generations to come. Sustainability Policy is considered to be
essential for continuity of the business at Gul Ahmed Textiles Mills
Limited (the Company). This report is an effort to inform the stakeholders
about the measures and initiatives taken to ensure sustainability. This
report is divided under three performance measures – Economic, Social
and Environmental.

ECONOMIC MEASURES

Better Cotton Initiative (BCI)

Better Cotton Initiative (BCI) is a program promoting the growth of

Organic cotton which is processed without the use of pesticides,
insecticides, defoliants, or artificial fertilizers, or dioxin-producing bleach.
The general idea is to grow and harvest and process crops without
damaging the ecosystem.

This is achieved by following the guidelines of BCI to achieve the

objectives like reducing the hazardous environmental impact, improving
livelihood and economic development of farmers and improving the flow
of better cotton throughout the supply chain.

Gul Ahmed is a member of BCI and strongly pursues the objective of

organization and therefore strongly promotes its objectives by purchasing
the cotton which is produced according to BCI guidelines. At Gul Ahmed
purchasing of BCI cotton increased by 3,650 tons to 14,701 tons in FY
2015 as compared to 11,051 tons in the corresponding FY.
Education

We are regular contributor to the activities of “Fellowship Fund for

Pakistan” to showcase the problems of public interest in media and
nurture the think tanks for the country.
During the year, the Company also contributed Rs. 6 million to the
scholarship fund of Habib University Foundation.

Health

Aga Khan Hospital and Medical College Foundation is in the process of

developing “Pediatrics Intensive Care Unit” which shall be equipped with
world class technology along with strengthening child healthcare
programs in the country.
The company has pledged to contribute Rs. 20 million towards this
project. During the year, the Company has paid Rs. 6.67 million and the
balance amount shall be paid subsequently as committed to the
Foundation.

Contribution to National Exchequer

The Company is contributing to the National growth by sharing its

revenues with the nation in the form of taxes, rates and duties. Not only
this, the Company is also helping the Country to improve foreign reserves
by earning foreign currency through exports. The Company contributed a
total of Rs. 1,000.72 million in FY 2015 (FY 2014: 988.02 million) in
various federal, provincial and local taxes, rates and duties.

SOCIAL MEASURES

The Company’s efforts have primarily been focused on improving the

social conditions of the communities and employees related to the
Company. For example establishing fair working conditions, setting social
standards, establishing minimum wages, ensuring occupational safety,
zero tolerance on child and forced labor, etc. The Company believes that
linking business to social projects enables to build a strong connection
with consumers by involving them in sustainability initiatives.

Health, Safety and Environment (HSE)

The Company follows strict adherence of the HSE policy. Safe operations
have been long-standing part of the Company’s culture, reflecting the key
beliefs that:

 Nothing is more important than protecting human health, safety and

the environment.

 Management is accountable for HSE performance

 Working safely and in an environmentally responsible manner are

conditions of employment

 Preventing incidents and managing environmental impacts are

fundamental to good business

 Our goal is to protect our people, the public, our property and the
environment in which they work and live. It is a commitment that is in
the best interests of our employees and other stakeholders.

 The Company has established HSE Management System which is run

with strong commitment of top leadership to address HSE concerns.

 Policies and objectives are well defined. All the divisions are
responsible to evaluate the HSE risks and their mitigation while
planning various operational activities which are reviewed and audited
by the HSE and internal audit departments of the Company.
HUMAN RESOURCE:
Companies and brands are established by employees and their success is
entirely dependent on the effort and hard work of itsemployees. Our
employees are the greatest custodians of the Company’s goodwill, brands
and success. We attract, develop and retain talented people who possess
all the characteristics necessary to drive the Company forward _ helping it
to achieve its current and future objectives.

Succession Planning

The Company has formulated a proper succession plan which includes

performance evaluation and appropriate training requirements for
development of potential future leaders.
The Company ensures availability of competent personnel in each
department through a comprehensive Succession Planning Policy, carried
out in terms of an individual’s potential, qualification, period of service
and professional attitude amongst other criteria.

Employee Benefits

The Company treats all employees fairly and compensates them according
to industry standards. The Company provides the benefits as detailed
below along with the perks and benefits like annual leaves, pick and drop,
facility of a mess, safe and healthy working environment, etc.

Retirement benefits consisting of Provident Fund and Gratuity where the

Company has contributed Rs. 123 million (2014: Rs. 98 million) during the
year towards retirement benefits. The total retirement funds are
amounted to Rs. 774 million (2014: Rs. 642 million). During the year Rs.
111 million (2013: Rs. 75 million) were paid to outgoing employees.

Healthcare insurance where the Company incurs Rs. 15.74 million

annually. Expenditures incurred for Employees old Age Benefit
Institution, Workers Welfare Fund and Workers Profit Participation Fund
related.
Training and Development

The Company believes that the quality of training significantly impacts the
performance of employees. Our thorough and timely training and
development programs ensure our employees gain all the skills to
perform optimally.

The Company conducts various training sessions and workshops in the

areas including operational skills, management skills, technological shifts,
ethical and HSE related practices, etc.

Managing Employee Grievances

Employees have the right to be treated fairly and raise their concerns
without fear of judgment. Employees can raise their concerns directly
with their supervisors, senior management or the human resource
department.

The matters raised are dealt by professionals and trained staff to resolve
fairly with prudent justifications.

Employee Privacy

The Company is committed to maintaining the principles of integrity and

trust with respect to our employees’ privacy. Personal information about
employees is collected only where it is necessary to carry out legitimate
business. Access to such data is limited to those who have legitimate
business needs.
Harassment Policy

The Company provides a harassment-free work environment to its

employees. It enables our diverse workforce to contribute to its highest
potential. The Company operates zero tolerance policy against
harassment which is crystal clear in the Code of Conduct. Every employee
is expected to follow the Code ensuring that the work environment is free
from harassment of any kind.

Diversity

We welcome diversity in terms of gender, ethnicity, thought and skill as

this mix is a great help to achieve our goals. Multiple perspectives and
experiences at the workplace allow us to understand the mindset of our
customers, suppliers and communities.

One of our key challenges is to balance gender diversification in our

Company. We had 1,065 female staff members and workers at the year
end.

Recognizing the benefits of a diverse workforce, the Company encourages

a culture of respect and tolerance among its employees.

Special Persons

We recognize the right of special persons to earn a respectable living with

dignity. We always provide and reserve opportunity to hire special
persons and train them to be valuable assets for the Company, their
families and society. We had 36 numbers of special persons as a part of
human resource at this year-end.
SWOT ANALYSES:

Strength
s
 Image and branding
 Pioneers in apparel fabric for both ladies and gents
 In-depth relationship with export customers
 Competent, vastly experienced and loyal staff and workers
 Global presence – wholly owned set-ups in UAE, Europe and USA to
market the products
 Edge in technology – state-of-the-art plant and machinery
 In-house power generation
 Composite mill from cotton to made-ups
 Cordial relationship with the workforce
 Strong raw material base as Pakistan is the fourth largest producer
of cotton

Weaknesses
 Export dependent on limited customers
 Highly labor intensive industry
 Labor productivity is very low
 Leverage is somewhat higher than the desired levels
Opportunities

 Growing retail market including expansion of women’s and men’s

apparel
 Growth in exports as a result of GSP Plus status from European
Union
 Less explored USA, Canada and Australian markets
 Expand web-based sales
 E-marketing

Threats

 Internal security situation and the looming war in the region

 Deteriorating economic conditions in the country compounded by
increasing debt burden and circular debt
 Irrational taxation policies
 Continuous increase in energy prices and gas shortage affecting
production and its cost
 Worsening of the economic conditions in Europe and America
 Textile industry is comprised of a large and unorganized sector, and
the large number of competitors mostly in this sector especially in
the ladies fashion fabric fray
 Key employees lured by competitors
 Shortage of raw material (cotton) due to natural disasters like heavy
rain, floods, etc.
 Worldwide surplus production capacity resulting in price-cutting
war between the competitors.
ENVIRONMENTAL OVERVIEW (PESTEL)
Political Factors:

Political situation has stabilized to a large extent

Internal security has improved however, there are concerns about the
situation on the borders with India

Economic Factors:

Reduction in discount rates has favorable impact on the financial cost

Rise in energy cost
Reduction in oil prices
Unfavorable PKR/USD parity has resulted in loss of export
competitiveness
Existence of facilities to exporters like Export Refinance Facility and Long
Term Financing Facilities
Business shrinkages/shutdown due to energy crisis
Delayed payments of tax refunds due from the Government

Social Factors:

The customers are very much fashion-oriented. This situation requires

introducing products while setting new fashion trends.
The customers are very particular towards their safety while using the
products and therefore require proper compliance with regards to
consumer protection measures.
Growth in population is out-spacing the annual growth, resulting in
unfavorable impact on the economy.
Technological Factors:

Technological changes define how fast technology advances. The Company

is continuously monitoring technological advancement in production and
is adopting the changes. It has state-of-the-art production facilities.
In view of increasing trends of online shopping, the Company is working
to benefit from this opportunity

Environmental Factors:

Environmental factors especially recent heavy rains and flooding has

affected overall economy
Pollution prevention and control needs extra investment in the
manufacturing facilities

Legal Factors:

Increasing indirect taxes, duties and charges specially GIDC

Trade and textile policies announced by the Government not being fully
implemented
 Conclusion
The report is a story of the success of a local brand GUL AHMED. It story tells
us that how a small textile mill gains name and fame through its strategies,
ethical values and fabulous planning. The story of Gul Ahmed is so unique in
a sense that the company follows its core values, latest fashion and designs
and always keeps tradition as its first priority. By going through its Annual
financial report we came to know that how a company manages its working
capital and a good will of a company plays a significant role. It’s HR
planning keeps us informed that why their employees are highly motivated.
Their fulfillment of social and ethical responsibilities let us know that why
number of customers and employees choose Gul Ahmed. Gul Ahmed is now
an icon of Pakistan of textile mill and through it we have learnt tackling
hurdles and difficulties that in our way of achieving standards. This project
taught us:
 We need to believe in ourselves as nothing is impossible.
 In order to gain success, we need to plan properly and design our
systems.
 Our goals should be SMART and ATTAINABLE.
 To have the taste of success we should know how failures taste like.
 Be fearless as fear always weakens us.
 Consider your problems as your opportunities.
 Take actions and calculated risk.