| Accord 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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| DIRECTOR'S REPORT TO THE
MEMBERS |
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| AUDITOR'S
REPORT TO THE MEMBERS |
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| BALANCE
SHEET |
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| PROFIT
AND LOSS ACCOUNT |
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| STATEMENT OF SOURCES
AND APPLICATION OF FUNDS |
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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 |
MR. HAIDER ALI |
|
(CHIEF EXECUTIVE) |
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|
MR. JAVAID AHMED KHAN |
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|
MRS. AZRA AHMED |
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|
MRS. TAHIRA JAVED |
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|
MR. EBRAHIM FAYEZ HUMAID |
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|
MRS. FARNAZ HAIDER |
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|
MOHAMMAD TAHIR |
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| CORPORATE
SECRETARY |
MR. IMRAN IFTIKHAR |
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| AUDITORS |
|
M. HUSSAIN CHAUDHURY
& CO. |
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|
CHARTERED ACCOUNTANTS |
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| BANKERS |
|
HABIB BANK LIMITED |
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|
EMIRATES BANK
INTERNATIONAL |
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|
NATIONAL DEVELOPMENT
FINANCE |
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|
CORPORATION |
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| LEGAL
ADVISORS |
CORNELIUS LANE &
MUFTI |
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|
4, FATIMA JINNAH ROAD,
LAHORE. |
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| REGISTERED
OFFICE |
47-A, MAIN GULBERG,
LAHORE. |
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| HEAD
OFFICE |
8 - SHERPAO BRIDGE
COLONY, LAHORE CANTT. |
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|
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| MILLS |
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20 KM, RAJANA PIR MAHAL
ROAD, TEHSIL KAMALIA |
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DISST. TOBA TEK SINGH |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 12th Annual General Meeting of the shareholders of
Accord |
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| Textiles
Limited will be held at its Head Office, at 8 - Sherpao Bridge Colony, Lahore
Cantt., on |
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| Saturday,
June 30, 2001 at 11:00 a.m. to transact the following business:- |
|
|
| 1
To confirm the minutes of the preceding meeting of the shareholders of the
company. |
|
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| 2
To receive, consider and adopt the audited accounts of the Company for the
year ended |
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| 30th
September, 2000 together with Directors and Auditor's reports thereon. |
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| 3
To appoint the Auditors for the year 2001 and to fix their remuneration. The
retiring auditors, |
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| M/s.
M. Hussain Chaudhury & Co. Chartered Accountants, being eligible offer
themselves |
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| for
re-appointment. |
|
|
| 4
To transact any other business with the permission of the Chair. |
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|
BY ORDER OF THE BOARD |
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| Lahore: |
|
HAIDER ALI |
|
| March
09,2001 |
|
(Chief Executive) |
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|
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| Notes: |
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| 1
The share transfer books of the Company shall remain closed from 23-06-2001
to |
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| 29-06-2001
(both days inclusive) |
|
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| 2
A member entitled to attend and vote at the above meeting may appoint another
member |
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| as
proxy, Proxies, in order to be effective, must be received at the Head Office
of the |
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| Company
not later than 48 hours before the time of meeting and must be duly stamped, |
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| signed
and witnessed. |
|
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| 3
Shareholders are requested to notify a change in their address, if any. |
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| DIRECTOR'S
REPORT TO THE MEMBERS |
|
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| The
Directors are pleased to present the 12thAnnual Report together with audited
accounts for the year |
|
| ended
September 30, 2000 and auditor's report thereon for your consideration and
approval. |
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|
| You
would be glad to know that the Company has earned, for the first time, a
gross profit of Rs. 11.476 (M) |
|
| as
compared to gross loss amounting to Rs. 31.837 (M) of last year. The year
under review was favourable |
|
| to
some extent as compared to previous years. Your Company made a profit after
taxation of Rs. 4.174 (M) |
|
| as
against loss of Rs. 71.743 (M) of the corresponding year after accounting all
the operational and financial |
|
| charges
including depreciation of Rs. 20.262 (M). This is mainly due to the
reasonable prices of raw cotton, |
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| improvement
in quality of yarn due to machinery up-gradation and improved rates of cotton
yarn, the |
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| Company
was not in a position to purchase cotton in bulk due to shortage of funds and
late release of |
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| working
capital limit by HBL. The result for the year could have been even better if
we were allowed the cash |
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| finance
limit at the start of cotton season. |
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| The
year under review witnessed over all turnaround in the textile sector mainly
due to fall in cotton prices |
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| which
enabled your company's turnaround and now the company is on the path to
recovery. Your Company |
|
| had
paid the amount of Rs. 70.841 (M) to banks/financial institutions during the
year under Report and is |
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| successfully
meeting its obligations towards payment of agreed installments of Long Term
and Short Term |
|
| Loans. |
|
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| The
cotton crop for the season 2000-2001 was good in terms of its size but due to
increase in demand at the |
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| beginning
of the season, the prices went up and thus created panic amongst the cotton
buyers. However, |
|
| the
management is consistently making efforts in the field of cotton procurement,
prudent marketing and |
|
| financial
management to achieve maximum possible profits. We have also improved our.
quality of yarn and |
|
| have
acquired holding power so we are not forced to make distress sale of yarn to
make important |
|
| payments. |
|
|
| Keeping
in view the cash flow, the directors/sponsors voluntarily forego the right to
receive interim dividend |
|
| from
the company till the availability of sufficient funds. |
|
|
| The
retiring Auditors M/s M. Hussain Chaudhary & Company, Chartered
Accountants, being eligible offered |
|
| themselves
for reappointment for the next year. |
|
|
| Based
on not profit for current year the earning/(loss) per share is Rs. 0.4,5 and
in 1000 Rs. (7.71). |
|
|
| The
pattern of share holding in the prescribed form is annexed. |
|
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| Your
Directors wish to thank all of the share holders who have stood by us in
times of trouble. The past 3-4 |
|
| years
have been really testing for the company due to extremely adverse market
conditions. The company |
|
| was
in very bad financial shape and was forced to run without any working
capital. In all this time we |
|
| survived
due to the continuous support of the bankers, our vendors and most of all our
share holders. By the |
|
| grace
of God the company is on its feet now and we expect that within the next five
years we will see a |
|
| complete
turnaround. The company is also planning to install new machines to increase
productivity. |
|
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| Your
Directors are pleased to record their appreciation of the services rendered
by the Executive and |
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| Workers
of the Company and hope that the same spirit will continue in the future. |
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|
For and on behalf of the Board of Directors |
|
|
| Lahore |
|
Haider All |
|
| Dated:
June 02, 2001. |
|
Chief Executive |
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| AUDITOR'S
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of ACCORD TEXTILES LIMITED as at
September 30, |
|
| 2000
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 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 |
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| 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 |
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| 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 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 |
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| state
of the company's affairs as at September 30, 2000 and of the profit, its cash
flows and |
|
| changes
in equity for the year then ended; and |
|
|
| (d) in our opinion, no zakat was deductible at
source under the Zakat and Ushr Ordinance, 1980. |
|
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| Without
qualifying our opinion, we state that the company has improved its
operational results for the |
|
| year
by attaining after tax profit of Rs. 4.173 million during the year ended
September 30, 2000, |
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| however
accumulated losses of Rs.577.644 million stand as at the balance sheet date.
The |
|
| company's
current liabilities exceeded its current assets by Rs.186.691 million
(1999:Rs.236.278 |
|
| million),
and total liabilities exceed its total assets by Rs. 300.342 million
(1999:Rs.302.191 million). |
|
| These
factors still raise doubt about the company being a going concern and this
concept shall only |
|
| be
valid if the lenders support remains available and the management makes
improvement in the |
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| market
for the company's product in the foreseeable future, adequate enough to
generate funds for |
|
| repayment
of debts. |
|
|
| LAHORE |
|
(M. HUSSAIN CHAUDHURY & co.) |
|
| Dated:
June 02, 2001. |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER :30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| CAPITAL
AND LIABILITIES |
|
| Share
Capital and Reserves |
|
| Authorised
capital |
|
| 15,000,000
(1999: 15,000,000) ordinary shares |
|
| of
Rs. 10 each |
|
150,000,000 |
150,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
|
| 9,300,000
(1999: 9,300,000) ordinary shams |
|
93,000,000 |
93,000,000 |
|
| of
Rs. 10 each fully paid in cash |
|
|
|
| Accumulated
loss |
|
(577,644,232) |
(579,493,210) |
|
|
---------- |
---------- |
|
|
(484,644,232) |
(486,493,210) |
|
|
| Surplus
on Revaluation of Fixed Assets |
|
3 |
184,302,435 |
184,302,435 |
|
|
|
|
---------- |
---------- |
|
|
(300,341,797) |
(302,190,775) |
|
|
| Long
Term Loans I Finances |
|
|
| Custom
duty payable |
|
4 |
-- |
783,289 |
|
| Finances
under mark-up arrangements |
|
5 |
68,956,026 |
3,631,633 |
|
| Demand
finance |
|
6 |
388,971,000 |
424,971,000 |
|
|
|
---------- |
---------- |
|
|
457,927,026 |
429,385,922 |
|
|
| Deferred
Liabilities |
|
7 |
32,139,439 |
33,319,960 |
|
| Current
Liabilities |
|
|
|
|
| Current
maturity of long term loans/finances |
8 |
42,345,454 |
90,368,328 |
|
| Short
term borrowings |
|
9 |
1,033,000 |
-- |
|
| Over
due portion of long term bridge finance |
10 |
-- |
29,204,558 |
|
| Creditors,
accrued and other liabilities |
|
11 |
174,399,449 |
145,802,601 |
|
| Dividend
payable |
|
12 |
2,325,000 |
-- |
|
| Provision
for taxation |
|
6,497,621 |
5,400,653 |
|
|
---------- |
---------- |
|
|
226,600,524 |
270,776,140 |
|
|
| Contingencies
and Commitments |
|
13 |
-- |
-- |
|
|
---------- |
---------- |
|
|
416,325,192 |
431,291,247 |
|
|
========== |
========== |
|
|
| PROPERTY
AND ASSETS |
|
|
|
| Operating
Fixed Assets |
|
14 |
376,206,808 |
395,800,972 |
|
| Long
Term Security Deposits |
|
15 |
209,180 |
209,180 |
|
| Current
Assets |
|
|
|
|
| Stores
and spares |
|
16 |
686,460 |
517,152 |
|
| Stock
in trade |
|
17 |
19,322,495 |
20,511,665 |
|
| Trade debts |
|
18 |
923,370 |
700,425 |
|
| Advances,
deposits, prepayments and other receivables |
19 |
16,779,464 |
12,161,596 |
|
| Cash
and bank balances |
|
20 |
2,197,415 |
1,390,257 |
|
|
|
|
---------- |
---------- |
|
|
39,909,204 |
35,281,095 |
|
|
---------- |
---------- |
|
|
416,325,192 |
43112911247 |
|
|
========== |
========== |
|
| Notes: |
|
|
|
| -
The annexed notes from 1 to 31 form an integral part of these accounts. |
|
| -
Auditors' Report annexed. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| Sales - net |
|
21 |
219,393,630 |
226,620,696 |
|
| Cost of sales |
|
22 |
207,917,179 |
258,457,773 |
|
|
|
---------- |
---------- |
|
| Gross
Profit / (Loss) |
|
|
11,476,451 |
(31,837,077) |
|
| Administrative,
Selling and General Expenses |
23 |
6,373,421 |
5,980,152 |
|
|
|
---------- |
---------- |
|
| Operating
Profit / (Loss) |
|
|
5,103,030 |
(37,817,229) |
|
| Other
income |
|
24 |
6,276,395 |
2,435,109 |
|
| Financial
charges |
|
25 |
4,954,816 |
34,777,694 |
|
| Workers'
profit participation fund |
|
|
18,583 |
-- |
|
|
|
---------- |
---------- |
|
| Profit
/ (Loss) before Taxation |
|
|
6,406,026 |
(70,159,814) |
|
| Taxation |
|
26 |
2,232,048 |
1,583,103 |
|
|
|
---------- |
---------- |
|
| Profit
/ (Loss) after Taxation |
|
4,173,978 |
(71,742,917) |
|
|
| Accumulated
Loss Brought Forward |
|
(579,493,210) |
(507,750,293) |
|
|
---------- |
---------- |
|
| APPROPRIATION |
|
(575,319,232) |
(579,493,210) |
|
| Interim
dividend |
|
2,325,000 |
-- |
|
|
---------- |
---------- |
|
| Accumulated
Loss carried to Balance Sheet |
|
(577,644,232) |
(579,493,210) |
|
|
|
========== |
========== |
|
| Earning
Per Share |
|
27 |
0.45 |
(7.71) |
|
|
========== |
========== |
|
| Notes: |
|
| The
annexed notes from 1 to 31 form an integral part of these accounts. |
|
| Auditors'
Report annexed. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| Cash
Flow from Operating Activities |
|
| Gain/(Loss)
before taxation |
|
6,406,026 |
(70,159,814) |
|
|
| Adjustment
for: |
|
| Depreciation |
|
20,261,720 |
21,300,586 |
|
| Bad debts |
|
700,425 |
141,497 |
|
| Provision
for gratuity |
|
687,517 |
462,440 |
|
| Financial
charges |
|
4,954,816 |
34,777,694 |
|
| Gain
on Sale of Fixed Assets |
|
(193,676) |
-- |
|
|
---------- |
---------- |
|
|
26,410,802 |
56,682,217 |
|
|
---------- |
---------- |
|
| Operating
Gain/(loss) before working capital changes |
|
32,816,828 |
(13,477,597) |
|
| Decrease/(increase)
in current assets |
|
|
|
| Stores
and spares |
|
(169,308) |
41,513 |
|
| Stock
in trade |
|
1,189,170 |
(14,202,523 |
|
| Trade Debts |
|
(923,370) |
-- |
|
| Advances
and other receivables |
|
(2,771,378) |
(2,503,098) |
|
|
| Increase/(decrease)
in current liabilities |
|
| Creditors,
accrued and other liabilities |
|
49,568,066 |
43,384,228 |
|
|
---------- |
---------- |
|
|
46,893,180 |
26,720,120 |
|
|
| Gratuity paid |
|
(92,751) |
(64,011) |
|
| Income
tax paid |
|
(3,209,967) |
(1,153,774) |
|
| Financial
charges paid |
|
(2,578,988) |
(470,443) |
|
|
---------- |
---------- |
|
| Net
cash form/(used in) operating activities |
|
73,828,302 |
11,554,295 |
|
| Cash
Flow from Investing Activities |
|
|
|
| Fixed
capital expenditure |
|
(1,073,880) |
(84,875) |
|
| Proceeds
from sale of Fixed Assets |
|
600,000 |
|
|
|
---------- |
---------- |
|
| Net
cash used in investing activities |
|
(473,880) |
(84,875) |
|
| Cash
Flow from Financing Activities |
|
|
(71,804,977) |
(7,517,000) |
|
|
(1,775,287) |
(2,887,432) |
|
| Short
term finances |
|
1,033,000 |
-- |
|
|
---------- |
---------- |
|
| Net
cash (used in)/from financing activities |
|
(72,547,264) |
(10,404,432) |
|
|
---------- |
---------- |
|
| Net
increase/(decrease) in cash and cash equivalents |
|
807,158 |
1,064,988 |
|
| Cash
and cash equivalents at the beginning of year |
|
1,390,257 |
325,269 |
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at the end of year |
|
2,197,415 |
1,390,257 |
|
|
========== |
========== |
|
|
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
| 1.
Status and Nature of Business |
|
| Accord
Textiles Limited was incorporated in Pakistan on July 30, 1989 as a public
limited company under the |
|
| Companies
Ordinance, 1984 and is listed on Lahore and Karachi Stock Exchanges. The
principal activity of |
|
| the
company is the manufacture and sale of yarn. |
|
|
| 2.
Significant Accounting Policies |
|
| 2.1
Accounting convention: |
|
| These
accounts have been prepared under the historical cost convention, without any
adjustment |
|
| for
the effect of inflation or reference to current values, except to the extent
of revaluation of certain |
|
| operating
fixed assets as detailed in Note.3. |
|
|
| 2.2
Staff retirement benefits: |
|
| The
company operates an unfunded gratuity scheme for all of its employees, whose
period of service is |
|
| six
months or more. Annual provision is made to cover the obligations under the
scheme. The liability |
|
| is
calculated with reference to last drawn salary and the length of service. |
|
|
| 2.3
Taxation: |
|
| Current: |
|
| The
charge for current taxation for the year is based on taxable income at the
current rates of taxation |
|
| after
considering the applicable rebates, tax credits and exemptions available, if
any. |
|
|
| Deferred: |
|
| The
company accounts for deferred taxation on all material timing differences
using the liability |
|
| method.
Deferred tax, however, is not provided, if it can be established with
reasonable probability that |
|
| the
timing differences involved will not reverse in the foreseeable future. |
|
|
| 2.4
Tangible fixed assets: |
|
| All
fixed assets are stated at cost less accumulated depreciation except freehold
land which is |
|
| stated
at revalued amount. Buildings on freehold land and plant and machinery are
stated at revalued |
|
| amounts
less accumulated depreciation and capital work-in- progress is stated at
cost. The cost of |
|
| fixed
asset includes incidental charges of acquisition of fixed assets including
differences arising due |
|
| to
exchange rate fluctuations on foreign currency principal loans acquired for
acquisition of certain |
|
| plant
and machinery. |
|
|
| Depreciation
on operating fixed assets is charged on reducing balance method to write off
the |
|
| cost/revalued
amounts over their expected useful life at the rates stated in Note. 14. Full
year |
|
| depreciation
is charged on additions while no depreciation is charged on assets disposed
off during |
|
| the year. |
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. Major renewals
and |
|
| replacement
are capitalized and assets retired, if any, are kept as standby. |
|
|
| Gain
or loss on disposal of operating fixed assets, if any, is included in current
income. |
|
|
| 2.5
Stores and spares: |
|
| These
are valued at moving average cost. |
|
|
| 2.6
Stock in trade: |
|
| These
are valued as under: |
|
| Raw
materials |
at first in first out
cost |
|
| Packing
materials |
at moving average cost |
|
| Work
in process |
at estimated cost |
|
| Finished
goods |
at cost and net
realisable value whichever is lower |
|
| Wastes |
|
at net realisable value |
|
|
| Net
realisable value: |
|
| It
is determined on the basis of selling prices prevailing in the market 1833
3811ing expen3e3 incidental |
|
| to sales. |
|
|
| 2.7
Deferred costs: |
|
| These
are amortized over a period of five years commencing from the year of their
incurrence. |
|
|
| 2.8
Foreign currency translations: |
|
| Assets
and liabilities in foreign currency are stated in Pak rupees at the rates of
exchange ruling on |
|
| the
balance sheet date or rate of exchange fixed under contractual agreements.
All exchange |
|
| differences
are included in the profit and loss account. |
|
|
| 2.9
Borrowing costs: |
|
| Borrowing
costs during construction/installation/erection period on loans obtained for
the specific |
|
| project,
is capitalized as part of fixed assets additions. |
|
|
| 2.10
Receivables: |
|
| All
known doubtful debts are provided for. |
|
|
| 2.11
Revenue recognition: |
|
| Sales
are recorded on despatch of goods to the customers. Interest income is
recognised on accrual |
|
| basis. |
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| 3.
Surplus on Revaluation of Fixed Assets |
|
| Land
- freehold |
|
1,735,000 |
1,735,000 |
|
| Buildings
on freehold land |
|
20,690,909 |
20,690,909 |
|
| Plant
and machinery |
|
161,876,526 |
161,876,526 |
|
|
---------- |
---------- |
|
|
184,302,435 |
184,302,435 |
|
|
========== |
========== |
|
| Revaluation
was carried out by Messrs. Indus Surveyors, Valuers and Surveyors as at
September 30, 1997 and |
|
| certified
by an independent firm of Chartered Accountants. |
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| 4.
Custom Duty Payable |
|
| Opening
balance |
|
2,147,457 |
2,464,457 |
|
| Less:
Paid during the year |
|
2,147,457 |
317,000 |
|
|
---------- |
---------- |
|
|
-- |
2,147,457 |
|
| Less:
Current maturity |
|
