| ICC Textile Limited |
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| Annual
Report 2000 |
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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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| Company Profile |
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| Financial
Trend and Revenue Allocation |
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| Auditors''
Report |
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| Balance Sheet |
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| Profit and Loss |
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| Cash
Flow Statement |
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| Statement
of Changes in Equity |
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| Notes
to the Accounts |
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| Pattern
of Holding of the Shares |
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| Company
Information |
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|
| Board
of Directors |
|
| MR.
A. REHMAN |
CHAIRMAN |
|
| MR.
SHAFIQ A. SIDDIQI |
CHIEF EXECUTIVE |
|
| MR.
S.A. MANNAN |
|
| MR.
TM. SHEIKH |
|
| MR.
TARIQ REHMAN |
|
| MR:
JAVAID S. SIDDIQI |
|
| MR.
HARIS NOORANI |
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| MR.
SUHAIL MANNAN |
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| MR.
USMAN HAQ |
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| MR.
TAHIR REHMAN |
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| Company
Secretary |
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| MR.
USMAN HAQ |
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|
| Auditors |
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| M/S
ANJUM ASIM SHAHID & CO. |
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| CHARTERED
ACCOUNTANTS |
|
|
| Bankers |
|
| MUSLIM
COMMERCIAL BANK LTD. |
|
| ABN
AMRO BANK. |
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| CITIBANK N.A. |
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| FAYSAL
BANK LTD. |
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| SOCIETE
GENERALE, THE FRENCH & INTERNATIONAL BANK. |
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| Registered
Office |
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| 242-A,
ANAND ROAD, |
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| UPPER
MALL, LAHORE. |
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| Factory |
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| 32-K.M,
LAHORE-MULTAN ROAD, SUNDER |
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| DISTT.
LAHORE. |
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| Notice
of Annual General Meeting |
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| Notice
is hereby given that the Twelfth (12th) Annual General Meeting of ICC Textiles Limited will be held |
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| at
Company's Registered Office at 242-A, Anand Road, Upper Mall, Lahore on
Saturday 31st March 2001 at |
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| II
.00 A.M to transact the following business: |
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| ORDINARY |
|
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| 1.
To confirm the minutes of the 11th Annual General Meeting held on March 31,
2000. |
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| 2.
To receive, consider and adopt the audited accounts of the Company for the
year ended September |
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| 30,
2000 together with the Directors' and Auditors' Reports thereon. |
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| 3.
To approve the dividend @ Rs. 1.25 per share i.e 12.5% for the year September
30, 2000. |
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| 4.
To appoint auditors for the year ending 30th September 2001 and to fix their
remuneration. The |
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| retiring
auditors M/s Anjum Asim Shahid & Company, Chartered Accountants, have
offered |
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| themselves
for re-appointment. |
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| 5.
Any other business with the permission of the chair. |
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|
By Order of the Board |
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Sd/- |
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| LAHORE |
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|
USMAN HAQ |
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| March 08, 2001 |
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|
Director & Company Secretary |
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| NOTES: |
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| 1.
The Share Transfer Books of the Company will remain closed from 31-03-2001 to
06-04-2001 (both |
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| days
inclusive), for determination of entitlement of dividend. No transfer will be
accepted for registration |
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| during
this period. |
|
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| 2.
A member entitled to attend and vote at this meeting may appoint another
member as his/her proxy |
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| to
attend and vote. Proxies in order to be effective must be received by the
company not less than 48 |
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| hours
before the meeting. |
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| 3.
Shareholders are requested to notify the change in their postal addresses, if
any. |
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| On
behalf of the Board of Directors, I take pleasure to present the Twelfth
Annual Report alongwith |
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| the
Audited Accounts of the Company pertaining to the ninth full year of
commercial production |
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| ending
on September 30, 2000. |
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|
| Financial
Highlights |
|
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| The
Net profit of the company for the year under review increased by 16% to Rs.
31.8 Million as |
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| against
Rs. 27.4 Million in the preceding year. Due to substantial decrease in
International price of |
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| Cotton
& Fabrics, the total Sales was decreased to Rs. 629 Million.
Simultaneously, there was a |
|
| corresponding
decrease in the Cost of Sales to Rs. 506 Million. |
|
|
| Total
Sales quantity |
11,439,284 |
Lin meters |
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| Total
Export quantity (88%) |
10,046,853 |
Lin meters |
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| Total Sales |
|
629,300,548 |
Rupees |
|
| Gross Profit |
|
122,439,301 |
Rupees |
|
| Gross Profit % |
|
19.5% |
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|
| Operating Profit |
|
76,003,406 |
Rupees |
|
| Net
Profit after Tax |
31,822,003 |
Rupees |
|
| Proposed
Dividend |
12.5% |
|
|
|
| The
Year under Review |
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| The
highlights for the year are as follows: |
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| The
year started with a sharp decline in International Cotton price, which
dropped to an all |
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| time
low, resulting in further reduction of already depressed fabric prices. |
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| The
arrival of a bumper cotton crop coupled with the non-interference policy
adopted by |
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| the
present regime led to a crash in local cotton price. Unfortunately, only some
portion of |
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| the
cotton benefit was passed on to the weaving sector. |
|
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| The
yarn rates declined gradually from October 1999 to December 2000, but due to
the |
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| excessive
export demand, the prices again shot up in the domestic market. |
|
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| In
June 2000, the Govt. took a decision to withdraw the export refinance
facility available at |
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| a
reduced mark up rate of 8% on fabric exports. However, subsequently, the
facility was |
|
| restored
at a higher mark up rate of 10% . |
|
|
| The
sluggish trend of exports from Pakistan was also attributable to a static
overvalued |
|
| rupee,
until June 2000. |
|
|
| Despite,
the aforementioned adverse circumstances, the Profit for the year was
enhanced |
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| due
to Sales of certain special fabrics with higher margins. |
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|
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| The
leverage of the company has significantly improved as the Debt Equity ratio,
including |
|
| current
maturity has decreased from 76% in 1997 to 38% in 2000. Similarly, the
Gearing |
|
| ratio
has shown a consistent decline over the recent years, indicating better
financial health |
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| of the company. |
|
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| Once
again, Pakistan was blessed with a good cotton crop of over 10 million bales
in the current |
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| year
2000-2001. However, due to high international prices, and revival of the
spinning sector last |
|
| year,
the domestic cotton prices once again touched an all time high in the current
year. Thus the |
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| yarn
prices have remained high in the initial months, however, we have seen a
downturn in the |
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| recent past. |
|
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| The
fabric prices in the international markets are maintaining their downward
trend. |
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| We
continue to explore new markets and presently, the diversity of our special
products is the |
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| key
to our success. The present export market distribution is as follows: |
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| - Far East Countries |
44% |
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| - Europe |
|
32% |
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| -
North America |
|
24% |
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| Dividend |
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| The
board members are pleased to propose a cash dividend of 12.50% i.e. Rs. 1.25
per ordinary |
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| share
of Rs. 10 each. |
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|
| Acknowledgement |
|
| This
opportunity is also being availed to convey appreciation for the continued
hard work and |
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| devotion
of the employees of the company. |
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|
For & on Behalf of the Board of Directors |
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Sd/- |
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| LAHORE |
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|
SHAFIQ A. SIDDIQI |
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| March 03, 2001 |
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|
Chief Executive |
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| Company
Profile |
|
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| ICC
Textiles limited, belongs to a leading and well established business group of
Pakistan, engaged in |
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| Manufacturing,
Heavy Electrical, Mechanical and Civil construction, Engineering and
Indenting fields. |
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| Over
the past four decades the group has played a vital role in the country's
economy. It is proud of |
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| the
reputation earned in this period which is reflected through a dynamic list of
achievements in various |
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| fields. |
|
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| The
textile project was set up in the vicinity of Lahore in 1990 as a
diversification strategy, and to |
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| exploit
the growing export potential from Pakistan. The project is equipped to
produce highest quality |
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| of
Grey Cloth according to international standards. The product range includes
Twills, Drills, Satins, |
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| Poplins,
oxfords, Percales, Cords, Dobby Designs and Sheetings of different
constructions and |
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| widths,
in I00% cotton and polyester/cotton blends. |
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| Plant
Summary: |
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|
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| Warping
Machine: |
|
| Benninger
Zell (Switzerland) |
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| Sizing
Machine: |
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| Benninger
Zell (Germany) |
|
|
| Weaving: |
|
| Sulzer
(Switzerland) |
|
| Sulzer
P7100 390 cm |
48 Nos |
|
| Sulzer
P7100 430 cm |
12 Nos |
|
| Sulzer
P7100 390 cm |
30 Nos |
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| (4
Color Dobby with Batching) |
|
|
| Sulzer
P7100 390 cm |
10 Nos |
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| (4 Color Dobby) |
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|
------------------ |
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| Total |
|
100 Nos |
|
|
========== |
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| Shearing
Machine: |
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| Vollenweider
(Switzerland) |
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| Air
Conditioning: |
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| Sulzer
(Switzerland) |
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| Loom
Data Control: |
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| Banninger
& Hubscher (Switzerland) |
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| The
project has been in operation for the last 9 years and we have succeeded in
establishing good |
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| reputation
in the fabric markets of Far East, Europe and North America. We have been
exporting our |
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| grey
fabric to various countries including Japan, Korea, Hong Kong, Taiwan, UK,
Germany, Switzerland, |
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| Spain,
Belgium, Canada and USA. |
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| FINANCIAL
TREND |
|
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|
|
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
|
|
|
|
| Gross
Profit |
|
10.4% |
14.1% |
21.0% |
21.0% |
17.4% |
19.5% |
|
| Operating Profit |
|
5.0% |
8.8% |
16.2% |
15.5% |
11.2% |
12.1% |
|
| Profit
Before Tax |
4.8% |
1.5% |
8.0% |
8.4% |
4.5% |
5.8% |
|
| Profit After Tax |
|
3.8% |
1.5% |
5.3% |
7.7% |
3.8% |
5.1% |
|
| Debt
Equity Ratio |
85:15 |
81:19 |
76:24 |
52:48 |
45:55 |
38:62 |
|
| Current Ratio |
|
1.02:1 |
1.13:1 |
1.17:1 |
1.02:1 |
0.99:1 |
1.06:1 |
|
| Share
Break Up Value (Rs.) |
2.99 |
3.62 |
6.15 |
11.32 |
12.81 |
14.74 |
|
| Earning
per Share (Rs.) |
-1.35 |
0.62 |
2.53 |
5.17 |
2.74 |
3.18 |
|
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|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of ICC Textiles
Limited as at September 30, 2000 and |
|
| the
related profit and loss account, cash flow statement and statement of changes
in equity 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. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of internal |
|
| control,
and prepare and present the above said statements in conformity with the
approved accounting |
|
| standards
and the requirements of the Companies Ordinance, 1984. Our responsibility is
to express an |
|
| opinion
on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These |
|
| standards
require that we plan and perform the audit to obtain reasonable assurance
about whether |
|
| the
above said statements are free of any material misstatement. An audit
includes examining, on a test |
|
| basis,
evidence supporting the amounts and disclosures in the above said statements.
An audit also |
|
| includes
assessing the accounting policies and significant estimates made by
management, as well as, |
|
| evaluating
the overall presentation of the above said statements. We believe that our
audit provides a |
|
| reasonable
basis for our opinion and, after due verification, 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, profit and loss account, cash flow statement and statement of
changes in |
|
| equity
together with the notes forming part thereof, conform with approved
accounting standards |
|
| as
applicable in Pakistan, and, give the information required by the Companies
Ordinance, 1984, |
|
| in
the manner so required and respectively give a true and fair view of the
state of the company's |
|
| affairs
as at September 30, 2000 and of the profit, its cash flow and changes in
equity for the year |
|
| then ended; and |
|
|
| (d)
in our opinion zakat deductible at source under the Zakat and Ushr Ordinance,
1980 (XVIII of |
|
| 1980)
was deducted by the company and deposited in the Central Zakat Fund
established under |
|
| section
7 of that Ordinance. |
|
|
|
|
|
| LAHORE: |
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|
ANJUM ASIM SHAHID & CO. |
|
| March 03, 2001 |
|
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at September 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
Note |
Rupees |
Rupees |
|
| Capital
and Liabilities |
|
|
| SHARE
CAPITAL |
|
|
| Authorised |
|
| 12,000,000
ordinary shares |
|
| (1999:
12,000,000) of Rs. 10 each |
|
120,000,000 |
20,000,000 |
|
|
|
========== |
========== |
|
|
|
|
| Issued,
Subscribed & Paid up |
|
|
|
| 10,000,800
ordinary shares (I 999: 10,000,800) |
|
|
| of
Rs. 10 each fully paid in cash |
|
3 |
100,008,000 |
100,008,000 |
|
| ACCUMULATED
PROFIT |
|
|
47,433,897 |
28,112,894 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
147,441,897 |
28,120,894 |
|
|
|
|
|
| LONG
TERM LOANS |
|
4 |
68,662,830 |
88,824,830 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
| Staff gratuity |
|
|
7,979,178 |
6,404,201 |
|
|
| CURRENT
LIABILITIES |
|
| Short
term finances |
|
5 |
313,865,221 |
306,835,000 |
|
| Current
portion of long term liabilities |
4 |
20,162,000 |
16,630,291 |
|
| Creditors,
accrued & other liabilities |
6 |
18,417,517 |
21,712,778 |
|
| Dividend |
|
7 |
13,179,530 |
7,854,994 |
|
| Taxation |
|
|
332,384 |
844,510 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
365,956,652 |
353,877,573 |
|
| CONTINGENCIES
AND COMMITMENTS |
8 |
-- |
-- |
|
|
------------------ |
------------------ |
|
|
|
590,040,557 |
577,227,498 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| LAHORE: |
|
| March 03, 2001 |
|
|
|
|
|
| Property and Assets |
Note |
|
| FIXED
CAPITAL EXPENDITURE |
|
|
| Operating
fixed assets - tangible |
|
9 |
217,706,770 |
235,973,937 |
|
|
|
|
|
| LONG
TERM DEPOSITS AND |
|
|
|
| DEFERRED
COSTS |
|
10 |
7,378,134 |
6,693,205 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares & loose tools |
|
11 |
10,840,412 |
8,352,079 |
|
| Stock in trade |
|
12 |
85,380,977 |
59,492,626 |
|
| Trade debts |
|
13 |
135,741,668 |
199,541,060 |
|
| Advances,
deposits, prepayments & other receivables |
14 |
39,203,622 |
31,401,300 |
|
| Cash
and bank balances |
|
15 |
93,788,974 |
35,773,291 |
|
|
|
|
------------------ |
------------------ |
|
|
|
364,955,653 |
334,560,356 |
|
|
|
|
------------------ |
------------------ |
|
|
|
590,040,557 |
577,227,498 |
|
|
|
|
========== |
========== |
|
|
|
Sd/- |
|
Sd/- |
|
|
A. Rehman |
|
Shafiq A. Siddiqi |
|
|
Chairman |
|
Chief Executive |
|
|
|
| Profit
and Loss Account for the year ended September 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
Note |
Rupees |
Rupees |
|
|
| SALES |
|
16 |
629,300,548 |
722,100,124 |
|
| COST
OF SALES |
|
17 |
506,861,247 |
596,642,640 |
|
|
|
|
------------------ |
------------------ |
|
| GROSS
PROFIT |
|
|
122,439,301 |
125,457,484 |
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| Administrative |
|
|
18 |
19,931,803 |
18,720,824 |
|
| Selling |
|
|
19 |
26,504,092 |
26,175,766 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
46,435,895 |
44,896,590 |
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT |
|
|
76,003,406 |
80,560,894 |
|
|
|
|
|
| OTHER
INCOME |
|
20 |
4,472,002 |
972,520 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
80,475,408 |
81,533,414 |
|
| OTHER
CHARGES |
|
21 |
43,964,530 |
49,074,937 |
|
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
FOR THE YEAR BEFORE TAXATION |
|
36,510,878 |
32,458,477 |
|
| TAXATION |
|
|
22 |
4,688,875 |
5,039,169 |
|
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
FOR THE YEAR AFTER TAXATION |
|
31,822,003 |
27,419,308 |
|
| ACCUMULATED
PROFIT BROUGHT FORWARD |
28,112,894 |
13,194,588 |
|
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
59,934,897 |
40,613,896 |
|
|
|
| APPROPRIATION: |
|
| Interim
dividend @ Nil (1999: 5%) |
|
|
-- |
5,000,402 |
|
| Proposed
final dividend @ 12.5% (1999: 7.5%) |
|
12,501,000 |
7,500,600 |
|
|
------------------ |
------------------ |
|
| ACCUMULATED
PROFIT CARRIED TO BALANCE SHEET |
47,433,897 |
28,112,894 |
|
|
========== |
========== |
|
| BASIC
EARNING PER SHARE |
|
23 |
3.18 |
2.74 |
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
Sd/- |
|
|
Sd/- |
|
| LAHORE: |
|
A. Rehman |
|
|
Shafiq A. Siddiqi |
|
| March 03, 2001 |
|
Chairman |
|
|
Chief Executive |
|
|
|
| Cash
Flow Statement |
|
| for
the year ended September 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
| Profit
for the year before taxation |
|
|
36,510,878 |
32,458,477 |
|
| Adjustments
for: |
|
|
|
|
| Depreciation |
|
|
23,632,166 |
25,731,298 |
|
| Profit
on sale of fixed assets |
|
|
(422,177) |
(336,724) |
|
| Amortization
of deferred costs |
|
|
2,115,525 |
1,579,200 |
|
| Staff gratuity |
|
|
2,535,398 |
2,776,146 |
|
| Financial
charges |
|
|
41,959,550 |
47,366,596 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
69,820,462 |
77,116,516 |
|
|
|
|
------------------ |
------------------ |
|
|
|
106,331,340 |
9,574,993 |
|
|
| (Increase)
/ Decrease in current assets |
|
| Stores,
spares and loose tools |
|
|
(2,488,333) |
(2,620,679) |
|
| Stock in trade |
|
|
(25,888,351) |
1,097,171 |
|
| Trade debts |
|
|
63,799,392 |
(41,428,708) |
|
| Advances,
deposits, prepayments & other receivables |
(7,802,322) |
(1,893,005) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
27,620,386 |
(44,845,221) |
|
|
|
|
| Increase
/ (Decrease) in current liabilities |
|
| Creditors,
accrued and other liabilities |
|
652,402 |
(222,401) |
|
|
|
|
------------------ |
------------------ |
|
|
|
134,604,128 |
64,507,371 |
|
| Cash
flow from operations |
|
| Financial
charges paid |
|
|
(45,907,213) |
(47,813,028) |
|
| Taxes paid |
|
|
(5,201,001) |
(4,644,847) |
|
| Gratuity paid |
|
|
(960,421) |
(671,182) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(52,068,635) |
(53,129,057) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flow from operating activities |
(A) |
82,535,493 |
11,378,314 |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Long
term advances, deposits and deferred costs |
|
(2,800,454) |
(8,135,155) |
|
| Sale
proceeds of fixed assets |
|
|
790,000 |
846,500 |
|
| Short
term investments |
|
|
-- |
202,600 |
|
| Fixed
capital expenditure |
|
|
(5,732,822) |
(28,821,925) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flow from investing activities |
(B) |
(7,743,276) |
(35,907,980) |
|
|
