| INDUS POLYESTER COMPANY LIMITED |
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| Annual
Reports 2002 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Meeting |
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| Directors Report |
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| Six Years At a Glance |
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| Auditors Report |
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| Balance Sheet |
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| Profit
& Loss Account |
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| Cash Flow Statements |
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| Statement
of Changes in Equity |
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| Notes to the Accounts |
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| Pattern
of Holding of the Shares |
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| COMPANY
INFORMATION |
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| CHAIRMAN |
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Mr. Shaikh Mohammad You |
isuf |
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| EXECUTIVE
DIRECTORS |
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Mr. Naeem Akhtar yousuf |
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Mr. Tariq Yousuf |
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| NON
EXECUTIVE DIRECTORS |
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Mrs. Zuhra Yousuf |
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Mrs. Kausar Naeem |
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Mrs. Nabila Tariq |
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Ms. Gul Naeem |
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| BOARD
OF AUDIT COMMITTEE |
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Mr. Tariq Yousuf |
Chairman |
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Mr. Naeem Akhtar Yousuf |
Member |
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Ms. Gul Naeem |
Member |
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| CHIEF
EXECUTIVE OFFICER |
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Mr. Naeem Akhtar Yousuf |
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| CHIEF
FINANCIAL OFFICER |
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Mr. Muhammad Hussain |
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| COMPANY
SECRETARY |
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Mr. Muhammad Hussain |
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HyderBhijmi&Co. |
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Chartered Accountants |
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| REGISTERED
& HEAD OFFICE |
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D-l 94, S.I.T.E., Karachi |
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Phon# 6653371 |
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| FACTORY |
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157-161 A, Phase-V, |
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Hattar Industrial Estate, |
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District - Haripur |
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Phone# 0995-617038 |
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| NOTICE
OF THE MEETING |
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| Notice
is hereby given that the Tenth Annual General Meeting of the Shareholders of
Indus Polyester Company |
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| Limited
will be held on Saturday 26th October 2002 at 09:00 a.m. at Registered Office
D-194, S.l.T.E., |
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| Karachi
to consider the following Business. |
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| 1. To confirm minutes of Ninth Annaul General
Meeting. |
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| 2. To receive and approve audited Statement
of Accounts & Balance Sheet of the company for the year |
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| ended
30th June 2002 together with reports of Directors and Auditors thereon. |
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| 3. To appoint Auditors of the Company and fix
their remuneration for the year ending 30th June 2003, |
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| M/s.
Hyder Bhimji & Co., who retire offer themselves for re-appointment. |
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| 4. To transact any other business with the
permission of Chair. |
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| By
order of the Board |
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| Karachi,
Dated 1st October, 2002 |
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| MOHAMMAD
HUSSAIN |
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| Company Secretary |
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| NOTES: |
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| 1. Share Transfer books of the Company will
be closed from 18th October to 27th October 2002, both |
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| days
inclusive. No transfers will be accepted for registration in the names of the
transferees during this |
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| period. |
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| 2. A member entitled to attend and vote at
the Annual General Meeting is entitled to appoint a Proxy and |
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| such
Proxy will have the right to attend instead of him/her, speak and vote in
place of the member. |
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| A
proxy must be a member of the company. Forms of proxy in order to be valid,
must be deposited at |
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| the
Companys Registered office D-194, S.l.T.E., Karachi - 75700, not less than 48
hours before the |
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| time
appointed for the meeting. |
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| 3. Shareholders are requested to promptly
notify the Company of any change in their address to ensure |
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| delivery of mail. |
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| 4. To facilitate identification, for right to
attend the Annual General Meeting, shareholder whose holdings |
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| are
on the Central Depository System (CDS) or his/her proxy should be
authenticate his/her identity by |
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| showing
his/her original National Identity Card (NIC) or original Passport at the
time of attending the |
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| .
meeting, alongwith the participants Identity Number and Shareholders account
number allocated by |
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| the
Central Depository Company.
' |
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| In
case of corporate entity, the Board of Directors, Resolutions/Power of
Attorney with specimen signature of |
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| the
nominee shall be produced at the time of the meeting. |
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| DIRECTORS
REPORT TO THE MEMBERS |
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| We
are pleased to submit to you the 10th Annual Report alongwith the Audited
Accounts of the Company for |
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| the
year ended 30th June , 2002. |
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| REVIEW |
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| The
Year under review had been a difficult and challenging year for the world as
well as Pakistani economy. |
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| The
events of September 11 had a depressing effect on the local market. During
the year the rateofdutyon |
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| imported
yarn was reduced to 25% which encouraged the import of Polyester Filament
Yarn. The dumping |
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| of
Polyester Yarn from the Far East increased and unprecedented imports to the
extent of 32,000 tons during |
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year 2001-2002 is reported. |
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| The
market for the company's products remained subdued and the plant operated at
94 % of its capacity. |
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| Although
many adjustments in the product range has been made and we are trying our
best to develop a |
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| range
of products in order to improve the average selling price of our products. |
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| Another
adverse factor that the company had to face was increase in the cost of fuel
to the extent of approx |
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| 9.5
% which had a direct impact on the cost of production. |
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| OPERATION
AND FINANCIAL RESULTS |
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| The
financial results of the company for the year under review are given
hereunder: |
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2002 |
2001 |
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Rs. '000 |
Rs. '000 |
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| Operating
(Loss) / Profit |
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(4,150) |
18,743 |
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| Financial Charges |
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29,750 |
35,240 |
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(33,900) |
(16,497) |
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| (Loss)
/ Profit on Sale of Fixed Assets |
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(7) |
13 |
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| Loss before Taxation |
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(33,907) |
(16,484) |
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| Loss after Taxation |
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(33,907) |
(16,484) |
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| Financial Cost: |
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| The
company has been successful in getting the long term loan rescheduled at a
reduced mark-up rate of |
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| 12.50
percent per annum which has reduced the financial burden. |
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| Present Scenario |
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| Reduction
of Tariff on imported yarns and unprecedented imports of more than 32.000
tons of Polyester |
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| Filament
yarn has reduced the prices of yarn in the local market. |
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| The
prices of Flat yarn which were ranging between Rs 75 to Rs 80 per Ib in
December 2001 came down to |
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| Rs
58 per Ib. Same has been the fate of Texturised yarn the prices of which are
Rs 54.00 per Ib. This is a big |
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| |
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| setback
for the industry and unless and until proper measures are taken by the
government and fair playing |
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| field
is given to the local manufacturers it is very difficult for the industry to
come out of problems that it is |
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| facing. |
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| Future Strategy |
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| The
company is well ware of the dire situation in which it finds itself at the
moment. |
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| We
are also aware of need for diversifying and having a value added product
range so that the fluctuations |
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| in
the yarn prices do not have a negative effect on the financial performance of
the company. A modest |
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| beginning
in this regard has been made and we have entered into export market and goods
worth Rs. 1.224 |
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| million
were exported. |
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| More
efforts are being made to enter into export of polyester fabric and garments
are underway and we hope |
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| once
we are successful in our efforts the company will come on right track to the
benefit of all the stakeholders |
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| BOARD
OF DIRECTORS |
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| During
the year Mr. Atif Anis Barry resigned from the Board on 30.04.2002 due to his
preoccupation. |
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| The
wishes to place on record appreciation of the services rendered by him. |
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| Ms.
Gul Naeem was appointed as director by the Board for the remaining term which
expires on 01.06.2003. |
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| Pattern
of Shareholding |
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| Statement
showing pattern of holding as on June 30th 2002 is annexed to this report. |
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| EMPLOYEE
RELATIONS |
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| Company's
relation with Labour & Staff continued to remain cordial. We wish to
record our appreciation for |
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| the
devotion and hard work of the executive , staff members and workers of the
company. |
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| AUDITORS |
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| The
present auditors M/s Hyder Bhimji & Co,, Chartered Accountants, retire
and being eligible offer themselves |
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| for reappointment. |
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| As
required by the code of corporate governance, The Board Audit Committee has
recommended the |
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| re-appointment
of M/s Hyder Bhimji & Co. Chartered Accountants, as auditors of the
Company for the ensuing |
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| year. |
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| STATEMENT
ON CORPORATE AND FINANCIAL REPORTING FRAME WORK |
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| a. The financial statements, cash flow and
changes in equity, prepared by the management of the |
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| Company,
present fairly it's state of affairs and the result of it's operations. |
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| b. Company has maintained proper books of
accounts. |
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| c. In preparation of financial
statements, appropriate accounting policies have been consistently
applied |
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| and
accounting estimates are based on reasonable and prudent judgement. |
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| d. In preparation of financial statement
International Accounting Standards, as applicable in Pakistan, |
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| have
been followed and non-applicability, if any, has been adequately disclosed. |
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| e. The existing system of internal control
and other procedures is being continuously reviewed by |
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| internal
auditor. The process of review will continue and any weakness in controls
will have immediate |
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| attention
of the Management. |
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| f. There are no doubts upon the Company's
ability to continue as a going concern. |
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| g. The Corporate Governance regulations,
as detailed in the listing regulations, have been fully |
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| implemented. |
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| h. Key operating and financial data for
the last six years in summarized form is annexed. |
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| i. The following is the value of
investments based on respective audited accounts (as on 30th |
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| June, 2002): |
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| Provident
Fund Rs.
3,603,907/- |
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| j. During the year (6) meetings of the
Board of Directors were held. Attendance by each Director is as |
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| follows:- |
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| Name of Director |
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No. of Meeting Attended |
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| Mr.
Shaikh Mohammad Yousuf |
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6 |
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| Mr.
Naeem Akhtar Yousuf |
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6 |
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| Mr. Tariq Yousuf |
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6 |
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| Mr. Atif Anis Barry |
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5 |
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| Mrs. Zuhra Yousuf |
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5 |
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| Mrs. Kauser Naeem |
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6 |
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| Mrs. Nabila Tariq |
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6 |
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| Ms. GulNaeem |
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1 |
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| In
closing, please join me in my prayers to Allah The Beneficent, The Merciful,
The Provider to Bless our |
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| efforts
and operation with ever increasing Bounties as Befits His Glory - Aameen. |
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| On
Behalf of the Board |
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| NAEEM
AKHTAR YOUSI |
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| Chief Executive |
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| Karachi:
27th September 2002 |
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| SIX
YEARS AT A GLANCE |
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| PARTICULARS |
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2001-2002 |
2000-2001 |
1999-2000 |
1998-1999 |
1997-1998 |
1996-1997 |
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| Paid-up Capital |
|
123,602,000 |
123,602,000 |
123,602,000 |
123,602,000 |
123,602,000 |
123,602,000 |
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| Surplus
on Revalution of Fixed Assets |
95,732,136 |
95,732,136 |
- |
- |
- |
- |
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| Fixed Assets at Cost |
|
470,155,848 |
468,575,520 |
358,233,735 |
357,303,553 |
356,108,642 |
53,204,233 |
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| Long
Term Investment |
- |
- |
- |
- |
- |
- |
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| Current Assets |
|
59,318,275 |
47,033,149 |
53,022,628 |
70,329,653 |
72,669,739 |
67,806,914 |
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| Current Liabilities |
|
26,554,917 |
105,871,688 |
96,441,091 |
60,421,652 |
54,617,364 |
46,790,015 |
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| |
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| INCOME |
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| Sales |
|
193,419,274 |
231,845,974 |
218,332,173 |
289,167,382 |
315,641,545 |
252,851,930 |
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| Other
(Loss) / Income |
(6,500) |
13,360 |
113,035 |
6,591 |
- |
81,068 |
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| |
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| TOTAL |
|
193,412,774 |
231,859,334 |
218,445,208 |
289,173,973 |
315,641,545 |
252,932,998 |
|
| Pre Tax(Loss) |
|
(33,907,343) |
(16,483,150) |
(34,539,222) |
2,749,563 |
3,035,416 |
(557,913) |
|
| Taxation |
|
- |
- |
- |
- |
- |
1,595,248 |
|
| (Loss)
/ Profit after Taxation |
(33,907,343) |
(16,483,150) |
(34,539,222) |
(2,749,563 |
3,035,416 |
1,037,335 |
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| |
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| STATISTICS
AND RATIOS |
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| Pre-Tax
Profit to Sales |
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- |
- |
- |
- |
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| Pre-Tax
Profit to Capital |
- |
- |
- |
- |
- |
- |
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| Current Ratio |
|
2.24 |
0.44 |
0.55 |
1.16 |
1.33 |
1.45 |
|
| Paid-up
Value per share (Rs) |
10.00 |
10.00 |
10.00 |
10.00 |
10.00 |
10.00 |
|
| Earning
After Tax Per Share (Rs) |
(2.74) |
(1.33) |
(0.28) |
0.22 |
0.24 |
0.05 |
|
| Retained
Earning per share (Rs) |
(9.40) |
(6.66) |
(5.32) |
(2.53) |
(2.75) |
(2.99) |
|
| Break-up
Value per Share (Rs) |
0.60 |
3.34 |
4.67 |
7.47 |
7.25 |
7.00 |
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| Statement
of Compliance with best practices of Corporate Governance |
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| |
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| The
Company is in process of implementing all facets of the Code of Corporate
Governance issued by the |
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| Karachi
Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange and the
Board feel pleasure |
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| in
stating that provisions of the code, relevant for the year ended June 30,
2002 have been duly compiled |
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| with. |
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| |
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| Review
Report to the Members on Statement of Compliance with Best Practices of Code
of Corporate |
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| Governance |
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| |
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| We
have reviewed the Statement of Compliance with the best practices contained
in the Code of Corporate |
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| Governance
as applicable to the company for the year ended June 30, 2002 prepared by the
Board of |
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| Directors
of Indus Polyster Company Limited, to comply with the Listing Regulation No.
37, of the Karachi |
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| Stock
Exchange, Listing Regulation No. XIII of the Lahore Stock Exchange and
Listing Regulation No. 36 of |
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| the
Islamabad Stock Exchange where the company is listed. |
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| |
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| The
responsibility for compliance with the Code of Corporate Governance is that
of the Board of Directors of |
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| the
company. Our responsibility is to review, to the extent where such compliance
can be objectively verified, |
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| whether
the Statement of Compliance reflects the status of the companys compliance
with the provision of |
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| the
Code of Corporate Governance and report if it does not. A review is limited
primarily to inquires of the |
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| Company
personnel and review of various documents prepared by the Company to comply
with the Code. |
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| |
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| As
part of the audit of financial statements we are required to obtain an
understanding of the accounting and |
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| internal
control system sufficient to plan the audit and develop and effective audit
approach. We have not |
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| carried
out any special review of the internal control system to enable us to express
an opinion as to whether |
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| the
Boards statement on internal control covers all controls and fhe
effectiveness of such internal controls. |
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| |
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| Based
on our review nothing has come to our attention, which causes us to believe
that the statement of |
|
| compliance
does not appropriately reflect the companys compliance, in all material
respects, with the best |
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| practices
contained in the code of corporate governance. |
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| |
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| Karachi:
September 27, 2002 |
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| |
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| HYDER
BH1MJI & CO. |
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| |
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| Chartered
Accountants |
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| |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| |
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| We
have audited the annexed Balance Sheet of INDUS POLYESTER COMPANY LIMITED as
at June 30, |
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| 2002
and the related profit and loss account, cash flow statement, and statement
of changes in equity, |
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| together
with the notes forming part thereof, for the year then ended and we state
that we have obtained all |
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| the
information and explanations which to the best of our knowledge and belief,
were necessary for the |
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| purposes
of our audit. |
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| |
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| It
is the responsibility of the company's management to establish and maintain a
system of internal control, |
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| and
prepare and present the above said statements in conformity with the approved
accounting standards |
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| and
the requirements of the Companies Ordinance, 1984. Our responsibility is to
express an opinion on |
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| these
statements based on our audit. |
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| |
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| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These stan |
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| dards
require that we plan and perform the audit to obtain reasonable assurance
about whether the above |
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| said
statements are free of any material misstatement. An audit includes
examining, on a test basis, evi |
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| dence
supporting the amounts and disclosures in the above said statements. An audit
also includes assess |
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| ing
the accounting policies and significant estimates made by management, as well
as, evaluating the overall |
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| presentation
of the above said statements. We believe that our audit provides a reasonable
basis for our |
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| opinion
and, after due verification, |
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| |
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| (i) As more fully explained in Note 8.1 the
company has changed the rates of depreciation from |
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| June
30 '2000, Which is inconsistent with the International Accounting Standards.
Had the |
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| depreciation
been charged at the same rates as prior to June 30' 2000 the depreciation for
the |
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| year
would have been higher by Rs. 16,649,431 /- |
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| |
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| Subject
to the above, we report that; |
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| |
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| a) in our opinion, proper books of account
have been kept by the Company as required by the Compa |
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| nies
Ordinance, 1984; |
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| |
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| b) in our opinion: |
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| |
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| (i) the balance sheet and profit and loss
account together with the notes thereon have been drawn |
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| up
in conformity with the Companies Ordinance, 1984, and are in agreement with
the books of |
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| account
and are further in accordance with accounting policies consistently applied; |
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| |
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| (ii) the expenditure incurred during the year
was for the purpose of the Company's business; and |
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| |
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| (iii) the business conducted, investments made
and the expenditure incurred during the year were |
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| in
accordance with the objects of the Company; |
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| |
|
| c) In our opinion except for the effects of
above and to the best of our information and according to the |
|
| explanations
given to us, the balance sheet, profit and loss account, cash flow statement
and state |
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| ment
of changes in equity together with the notes forming part thereof conform
with approved ac |
|
| counting
standards as applicable in Pakistan, and, 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 June 30, 2002 and of the Loss, its cash flows and
changes in equity for |
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| the
year then ended; and |
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| |
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| d) In our opinion, "No Zakat was
deductible at source under the Zakat and Ushr Ordinance, 1980." |
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| |
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| HYDER
BHIMJI & CO. |
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| |
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| Chartered
Accountants |
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| |
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| Karachi:
September 27, 2002 |
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