| Redco 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 9th Annual General Meeting |
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| Directors'
Report to the Shareholders |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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| Profit
and Loss Account |
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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 Shareholding |
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| Company
Information |
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| Board
Of Directors |
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| Mr.
Saif ur Rehman Khan (Chief Executive) |
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| Mr.
Mujeeb ur Rehman Khan |
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| Mr.
Amanullah Khan |
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| Mr.
Atiq Ur Rehman Khan |
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| Mrs.
Taufiqa Amanullah Khan |
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| Mrs.
Muneza Saif ur Rehman Khan |
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| Mrs.
Samina Asad Khan |
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| Company
Secretary |
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| Mr.
Bilal Ahmed Niazi |
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| Auditors |
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| Anjum
Asim Shahid & Co. |
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| Chartered
Accountants |
|
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| Bankers |
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| Prime
Commercial Bank Ltd. |
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| United
Bank Limited |
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| Muslim
Commercial Bank Limited |
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| Bank
Al Fallah Ltd |
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| Registered
Office |
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| 78-E,
Blue Area, Islamabad |
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| Tel: 2271361-5 |
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| Fax: 2274336 |
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| Mills |
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| 3,
K.M. on Kallar Syadan Road, |
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| District
Rawalpindi. |
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| Notice
of 9th Annual General Meeting |
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| Notice
is hereby given that the 9th Annual General Meeting of Shareholders of Redco |
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| Textiles
Limited will be held at its Registered Office 78-E Redco Plaza, Blue Area, |
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| Islamabad
on Thursday 31st day of May, 2001 at 3:00 p.m. to transact the following |
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| business: |
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| Ordinary
Business: |
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| 1.
To confirm the minutes of the Eighth Annual General Meeting |
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|
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| 2.
To receive, consider and adopt the Annual Audited Financial statements for
the |
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| year
ended 30th Sep. 2000 alongwith Directors and Auditors Reports thereon. |
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| 3.
To appoint, Auditors of the Company for the financial year ending 30th Sep.
2001 |
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| and
to fix their remuneration. |
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| The
Present Auditors, M/s. Anjum, Asim, Shahid & Co., Chartered Accountants, |
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| being
eligible offer themselves for reappointment. |
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| 4.
To consider any other business which may be placed before the meeting with
the |
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| permission
of the Chair. |
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By Order of the Board |
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|
(BILAL AHMED NIAZI) |
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| Islamabad
9th May 2001 |
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Company Secretary |
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| Notes: |
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| 1.
The Share Transfer Book of the Company will remain closed from 24th May |
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| 2001
to 31st May 2001 (both days inclusive). |
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| 2.
A member entitled to attend and vote at the meeting may appoint any other |
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| Member
as his/her proxy to attend and vote. |
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| 3.
The proxy to be valid must be in writing and received by the Company at least
48 |
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| hours
before the time of meeting and must be stamped, signed and witnessed. |
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| 4.
Members are requested to notify the Company regarding any change in their |
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| addresses,
if any. |
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| Directors'
Report to the Share Holders |
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| The
Directors of your company takes pleasure in presenting the 9th annual report
alongwith the audited |
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| financial
statements of the company and auditors' report thereon for the year ended
30th Sep. 2000. |
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| The
year under review witnessed an overall turnaround in the textile sector
mainly due to fall in cotton |
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| prices.
Your company had also shown better results as compared with the corresponding
period of the last |
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| year,
despite the hardships faced by the company due to closer of its office by
Government authorities |
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| during
the period from 13th Oct 1999 to 31st Mar 2000. As far as the market of gray
fabrics is concerned it |
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| is
still in depression due to financial crises in South Asian Countries. As the
financial constraints did not |
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| allow
us to avail quota due to which we had left with no option except to depend on
local market. |
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| The
company earned a gross profit of Rs. 42.356 million and an operating profit
of Rs. 25.284 million |
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| which
are 7.6% & 4.54% of the sales respectively. The revenue from sales
decreased by 13.23% as |
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| compared
with the last year with the corresponding decrease of 18.52% in cost of
sales. Financial charges |
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| at
111.54 million are higher by 12.274 million over last year. The results for
the year could have been |
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| even
better if we were allowed to utilize the cash finance limits by the banks. |
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| The
earning per share was Rs. (4.24) as of 30th Sep. 2000. |
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| As
regards to para 'l' of the auditors' report, we inform that the company is
not relying on trade creditors |
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| for
its operations as it has sufficient cash and bank balances to payoff the
creditors. The main problem of |
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| the
company is non-availability of working capital limits due to its disputes
with U.B.L. The company is |
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| negotiating
with the bank and we hope that negotiations will reach a positive conclusion
which will result |
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| not
only in availability of working capital but also reduction in financial
burden, enabling the company to |
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| continue
as a going concern. |
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| As
regard to para '2' of Auditors' Report we inform that these companies have
restated their business |
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| activities
in the current year and we are hopeful that the referred amount will be
recovered by us during |
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| the
year and there is no need for any provision thereof. |
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| We
are optimistic about the future and as a result of settlement with U.B.L we
will be able to buy bulk |
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| cotton
at competitive rates and of better quality enabling us to achieve better
results. Market for yarns and |
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| Gray
fabrics will be diversified to increase the customer base and reduce
dependency on the Far East. |
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| Product
range will also be increased to cater to the differing needs of the buyers.
Fancy and special items |
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| like
Cavlry Twills, Bedford Cords and Stretch Fabrics will be developed which are
being sold at premium |
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| prices. |
|
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| The
auditors M/s Anjum Asim Shahid & Co. Chartered Accountants retired and
being eligible, offer |
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| themselves
for re-appointment. |
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| The
pattern of shareholding as on 30th Sep 2000 as annexed. |
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| The
relations between the management, staff members and workers remained cordial
throughout the year. |
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| The
Directors are pleased to place on record their appreciation for the zealous
efforts, dedication and |
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| valuable
services rendered by executives, staff members and workers of the Company. |
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| We
also take this opportunity to express our gratitude towards worthy
shareholders, our valued customers, |
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| bankers
and Government functionaries for their co-operation and continued support. |
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On behalf of the Board |
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| Place:
Islamabad |
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|
Amanullah Khan |
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| Date:
May 02, 2001 |
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|
Director |
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| Auditors'
Report to the Members |
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| We
have audited the annexed balance sheet of Redco Textiles Limited as at
September 30, |
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| 2000
and the related profit and loss account, cash flow statement and the
statement of |
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| changes
in equity together with the notes forming part thereof, for the year then
ended and |
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| we
state that we have obtained all the information and explanations which, to
the best of |
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| our
knowledge and belief, were necessary for the purposes of our audit. |
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| It
is the responsibility of the company's management to establish and maintain a
system of |
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| internal
control and prepare and present the above said statements in conformity with
the |
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| approved
accounting standards and the requirements of the Companies Ordinance, 1984. |
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| Our
responsibility is to express an opinion on these statements based on our
audit. |
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| We
conducted our audit in accordance with the auditing standards as applicable
in |
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| Pakistan.
These standards require that we plan and perform the audit to obtain
reasonable |
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| assurance
about whether the above said statements are free of any material
misstatement. |
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| An
audit includes examining on test basis, evidence supporting the amounts and |
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| disclosures
in the above said statements. An audit also includes assessing the accounting |
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| policies
and significant estimates made by the management, as well as, evaluating the |
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| overall
presentation of the above said statements. We believe that our audit provides
a |
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| reasonable
basis for our opinion and, after due verification, we report that:- |
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| 1.
The Company has recorded a loss for the year of Rs. 90.376 million leading to |
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| accumulated
loss of Rs. 1,010.705 million to date. This has eroded the entire equity of |
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| the
Company by Rs. 797.779 million. The Company's current liabilities, which |
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| presently
stand at Rs. 1,104.056 million are substantially in excess to the total
assets |
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| which
are at Rs. 910.303 million as at the balance sheet date. During the year, the |
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| Company
sustained its operations primarily through reliance on creditors' financing |
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| and
sponsors' loan. |
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| All
these factors raise substantial doubt regarding the ability of the Company to |
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| continue
as going concern. However, these financial statements have been prepared on |
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| going
concern basis, the validity of which is largely dependent on successful |
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| arrangements
relating to effective debt restructuring as well as additional working |
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| capital
requirements from the financial institutions with whom negotiations are |
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| underway.
Consequently, these financial statements do not include any adjustment that |
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| might
be necessary to incorporate the effect of arrangements under which going |
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| concern
basis is held no more applicable. |
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| 2.
Amounts aggregating to Rs. 2.494 million (1999: Rs. 2.243 million) are
receivable |
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| from
associated undertakings namely Silver Dot (Private) Limited and ABC Network |
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| (Private)
Limited as appearing in note 15.1 to these financial statements. These |
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| associated
undertakings have suspended their operations. Further, we have not |
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| received
balance confirmation certificates from any of these associated undertakings. |
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| These
factors raise substantial doubt about the recoverability of such receivables. |
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| However,
the Company has not accounted for any provision for such doubtful |
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| advances.
Had the provision been made in these financial statements, the loss for the |
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| year
would have been higher by the similar amount. |
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| Except
for the matters stated above and the extent to which the same would effect
the |
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| financial
statements of the Company, we report that: |
|
|
| a.
in our opinion, proper books of accounts have been kept by the company as |
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| required
by the Companies 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 |
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| thereon
have been drawn up in conformity with the Companies Ordinance, |
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| 1984,
and are in agreement with the books of accounts and are further in |
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| 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 |
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| company's
business; and |
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|
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| iii.
the business conducted, investments made and the expenditure incurred |
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| during
the year were in accordance with the objects of the company: |
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|
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| c.
in our opinion and to the best of our information and according to the
explanations |
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| given
to us, the balance sheet, profit and loss account cash flow statement and |
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| statement
of changes in equity together with the notes forming part thereof |
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| conform
with approved accounting standards as applicable in Pakistan, and, give |
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| the
information required by the Companies Ordinance, 1984, in the manner so |
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| required
and respectively give a true and fair view of the state of the company's |
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| affairs
as at September 30, 2000 and of the loss, its cash flows and changes in |
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| equity
for 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 |
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| Ordinance,
1980 (XVIII of 1980). |
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| Place:
Islamabad |
|
Anjum Asim Shahid & Co. |
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| Date:
9th May 2001 |
|
Chartered Accountants |
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|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 2000 |
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|
2000 |
1999 |
|
| CAPITAL
& LIABILITIES |
|
Note |
(Rupees) |
(Rupees) |
|
|
|
| SHARE
CAPITAL |
|
| Authorized |
|
| 25,000,000
(1999: 25,000,000) ordinary shares of Rs.10/- each |
250,000,000 |
250,000,000 |
|
|
|
========== |
========== |
|
|
| Issued,
subscribed and paid up capital |
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| 21,292,600
(1999: 21,292,600) ordinary shares of Rs. 10/- |
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| each
fully paid in cash |
|
|
212,926,000 |
212,926,000 |
|
| ACCUMULATED
LOSS |
|
|
(1,010,705,367) |
(920,329,831) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(797,779,367) |
(707,403,831) |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
3 |
365,366,230 |
365,366,230 |
|
| DEFERRED
LIABILITIES |
|
|
2,136,875 |
5,756,925 |
|
|
|
|
|
| LONG
TERM LIABILITIES |
|
|
|
| Long
term loans - secured |
|
4 |
83,065,362 |
133,061,340 |
|
| Loan
from associated undertakings- unsecured |
5 |
24,056,418 |
65,568,824 |
|
| Sponsors'
Loans - unsecured |
|
6 |
129,401,026 |
27,168,387 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
236,522,806 |
225,798,551 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of long term loans |
7 |
260,038,162 |
222,427,112 |
|
| Short
term finances - secured |
|
8 |
234,580,047 |
308,915,756 |
|
| Creditors,
accrued and other liabilities |
9 |
603,374,665 |
494,325,925 |
|
| Provision
for taxation |
|
23 |
6,063,706 |
3,954,005 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,104,056,580 |
1,029,622,798 |
|
| CONTINGENCIES
AND COMMITMENTS |
10 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
910,303,124 |
919,140,673 |
|
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|
========== |
========== |
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| The
annexed notes form an integral part of these financial statements. |
|
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|
DIRECTOR |
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|
DIRECTOR |
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|
| Statement
under section 241(2) of the Companies Ordinance, 1984 |
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| These
financial statements have been signed by two directors of the Company as the
Chief Executive |
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| of
the Company is not available. |
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|
|
|
|
2000 |
1999 |
|
| PROPERTY
& ASSETS |
|
Note |
(Rupees) |
(Rupees) |
|
|
|
| OPERATING
FIXED ASSETS - Tangible |
11 |
710,628,416 |
741,144,665 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
12 |
21,452,349 |
17,287,541 |
|
| Stock in trade |
|
13 |
63,174,103 |
83,196,587 |
|
| Trade debts |
|
14 |
47,396,167 |
28,512,362 |
|
| Advances,
deposits, prepayments and other |
|
|
| receivables |
|
15 |
29,486,350 |
43,581,909 |
|
| Cash
and bank balances |
|
16 |
38,165,739 |
5,417,609 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
199,674,708 |
177,996,008 |
|
|
|
|
------------------ |
------------------ |
|
|
|
910,303,124 |
919,140,673 |
|
|
========== |
========== |
|
|
|
DIRECTOR |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
(Rupees) |
(Rupees) |
|
|
|
|
| SALES - Net |
|
17 |
556,237,113 |
641,088,109 |
|
| COST
OF SALES |
|
18 |
513,880,229 |
630,739,716 |
|
|
|
|
------------------ |
------------------ |
|
| GROSS
PROFIT |
|
|
42,356,884 |
10,348,393 |
|
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
|
|
| Administrative
expenses |
|
19 |
12,084,643 |
15,141,381 |
|
| Selling
Expenses |
|
20 |
4,987,583 |
18,890,299 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
17,072,226 |
34,031,680 |
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT/LOSS |
|
|
25,284,658 |
(23,683,287) |
|
|
|
|
| Financial
charges |
|
21 |
111,540,491 |
99,265,891 |
|
| Other income |
|
22 |
943,998 |
894,328 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(110,596,493) |
(98,371,563) |
|
|
|
|
------------------ |
------------------ |
|
| LOSS
BEFORE TAXATION |
|
|
(85,311,835) |
(122,054,850) |
|
|
|
|
|
| TAXATION
- Current |
|
23 |
(2,780,268) |
(3,251,005) |
|
| - Prior |
|
|
(2,283,433) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(5,063,701) |
(3,251,005) |
|
|
|
|
------------------ |
------------------ |
|
| LOSS
AFTER TAXATION |
|
|
(90,375,536) |
(125,305,855) |
|
| ACCUMULATED
LOSS BROUGHT FORWARD |
|
(920,329,831) |
(795,023,976) |
|
|
|
|
|
------------------ |
------------------ |
|
| ACCUMULATED
LOSS CARRIED TO BALANCE SHEET |
(1,010,705,367) |
(920,329,831) |
|
|
|
|
========== |
========== |
|
| Earnings
per share |
|
26 |
(4.24) |
(5.88) |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
DIRECTOR |
|
|
DIRECTOR |
|
|
| Statement
under section 241(2) of the Companies Ordinance, 1984 |
|
| These
financial statements have been signed by two directors of the Company as the
Chief Executive of the Company is not available. |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
|
(Rupees) |
(Rupees) |
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Loss
before taxation |
|
|
(85,311,836) |
(122,054,850) |
|
| Adjustment
for non cash charges and other items |
|
|
|
| Depreciation |
|
|
36,036,912 |
37,568,480 |
|
| Provision
for bad debts |
|
1,563,807 |
4,711,755 |
|
| Provision
for doubtful advances to staff |
|
729,839 |
199,612 |
|
| Prior
year adjustment |
|
-- |
141,336,895 |
|
| Financial
charges |
|
111,540,491 |
99,265,891 |
|
| Provision
for staff retirement benefits |
|
1,684,874 |
3,122,866 |
|
|
|
------------------ |
------------------ |
|
|
|
151,555,923 |
286,205,499 |
|
|
|
------------------ |
------------------ |
|
| Cash
flow from operating activities before working capital changes |
66,244,087 |
164,150,649 |
|
|
| (Increase)
/ decrease in current assets |
|
|
|
| Stores,
spares and loose tools |
|
(4,164,808) |
(2,249,079) |
|
| Stock in trade |
|
|
20,022,484 |
(26,351,821) |
|
| Trade debts |
|
|
(20,447,011) |
5,491,965 |
|
| Advances
deposits, prepayments and other receivable |
13,478,012 |
9,811,184 |
|
|
|
------------------ |
------------------ |
|
|
|
8,888,677 |
(13,297,751) |
|
|
|
|
|
|
|
| Increase
/ (decrease) in current liabilities |
|
|
|
| Creditors,
accrued and other liabilities |
|
80,886 |
(5,589,601) |
|
|
|
------------------ |
------------------ |
|
| Working
capital changes |
|
8,969,563 |
(18,887,352) |
|
|
|
|
|
| Staff
retirement benefits paid |
|
(5,417,818) |
(689,671) |
|
| Taxes paid |
|
(2,954,000) |
-- |
|
| Financial
charges paid |
|
|
(1,951,176) |
(108,667,890) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(10,322,994) |
(109,357,561) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
(A) |
64,890,657 |
35,905,735 |
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Long
term loans - secured |
|
|
-- |
(46,463,418) |
|
| Loan
from associated undertakings - unsecured |
|
(41,512,406) |
(39,215,279) |
|
| Loan
from directors |
|
102,232,639 |
11,635,367 |
|
| Short
term finance - secured |
|
(87,342,097) |
45,441,361 |
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow) from financing activities |
(B) |
(26,621,864) |
(28,601,969) |
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Fixed
capital expenditure |
|
|
(5,520,663) |
(5,566,526) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow) from investing activities |
(C) |
(5,520,663) |
(5,566,526) |
|
| Net
cash inflow during the year (A+B+C) |
|
32,748,130 |
1,737,240 |
|
| Cash
and cash equivalents at the beginning of the year |
5,417,609 |
3,680,369 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the close of the year |
|
38,165,739 |
5,417,609 |
|
|
|
|
========== |
========== |
|
|
|
|
|
DIRECTOR |
|
DIRECTOR |
|
|
| Statement
under section 241(2) of the Companies Ordinance, 1984 |
|
| These
financial statements have been signed by two directors of the Company as the
Chief Executive of the Company is not available. |
|
|
|
| STATEMENTS
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
| Particulars |
|
|
Paid-up capital |
Accumulated |
Total |
|
|
|
loss |
|
|
|
|
(Rupees) |
(Rupees) |
(Rupees) |
|
|
| Balance
as at September 30, 1998 |
|
212,926,000 |
(795,023,976) |
(582,097,976) |
|
| Loss
for the year ended September 30, 1999 |
-- |
(125,305,855) |
(125,305,855) |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at September 30, 1999 |
|
212,926,000 |
(920,329,831) |
(707,403,831) |
|
| Loss
for the year ended September 30, 2000 |
-- |
(90,375,536) |
(90,375,536) |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at September 30, 2000 |
|
212,926,000 |
(1,010,705,367) |
(797,779,367) |
|
|
|
|
========== |
========== |
========== |
|
|
|
DIRECTOR |
|
|
DIRECTOR |
|
|
|
| Statement
under section 241(2) of the Companies Ordinance, 1984 |
|
| These
financial statements have been signed by two directors of the Company as the
Chief Executive of the Company is not available. |
|
|
|
| NOTES
TO THE FINANCIAL STATEMENTS |
|
|
| 1.
STATUS AND OPERATIONS |
|
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