| International Floor Coverings Limited |
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
| BOARD
OF DIRECTORS |
|
| NOTICE
OF MEETING |
|
| DIRECTORS'
REPORT |
|
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
& LOSS ACCOUNT |
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| CASH
FLOW STATEMENT |
|
|
| NOTES
TO THE ACCOUNTS |
|
| PATTERN OF SHARE HOLDING |
|
|
|
| BOARD
OF DIRECTORS |
|
|
| Mian
Muhammad Said Khan |
|
| (Chairman/Chief
Executive) |
|
|
| Mrs.
Fauzia Said Khan |
|
| Mr.
Shahid Said Khan |
|
| Miss
Shaiza Said Khan |
|
| Miss
Sharmeen Said Khan |
|
| Ms.
Ayesha Said Khan |
|
| Mr.
Masood Ahmed |
|
|
| COMPANY
SECRETARY :- |
|
| Mr. Abdul Hameed, FCA |
|
|
| BANKERS
:- |
|
| National
Bank of Pakistan |
|
| Standard
Chartered Bank |
|
| United
Bank Limited |
|
|
| AUDITORS
:- |
|
| Messrs.
Sarwars |
|
| Chartered
Accountants |
|
|
| REGISTERED
OFFICE :- |
|
| First Floor, |
|
| Standard
Chartered Bank Chambers, |
|
| I.
I. Chundrigar Road, |
|
| Karachi-74000. |
|
|
| FACTORY
:- |
|
| F/202-A,
S.I.T.E., |
|
| Karachi-75700. |
|
|
|
| NOTICE
OF MEETING |
|
|
| NOTICE
IS HEREBY given that the 17th Annual General Meeting of the Shareholders of |
|
| the
Company will be held at Room No. 11, 1st Floor, Standard Chartered Bank
Chambers, |
|
| I.
I. Chundrigar Road, Karachi, on Tuesday the 26th December, 2000, at 9.00 a.m.
to transact |
|
| the
following business: |
|
|
| 1.
Recitation from the Holy Quran. |
|
|
| 2.
To confirm the minutes of Annual General Meeting held on 28th December, 1999. |
|
|
| 3.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended |
|
| 30th
June, 2000 together with' the Directors' and Auditors' Report thereon. |
|
|
| 4.
To appoint Auditors for the year 2000-2001 and to fix their remuneration. |
|
|
| 5.
To transact any other business as may be placed before the meeting with the
permission |
|
| of the Chair. |
|
|
| By
Order of the Board |
|
|
| KARACHI. |
|
ABDUL HAMEED |
|
| 4th
December, 2000 |
|
Company Secretary |
|
|
| NOTE : |
|
| 1.
The Share Transfer Books of the Company will remain closed from 22-12-2000 |
|
| to
2-1-2001 (both days inclusive). |
|
|
| 2.
A member entitled to vote at this meeting may appoint a proxy. A proxy must |
|
| be
a member. Proxies in order to be effective must be received at the Registered |
|
| Office
of the Company duly stamped, signed and witnessed not later than 48 |
|
| hours
before the meeting. |
|
|
| 3.
Shareholders are requested to kindly communicate change in their addresses, |
|
| immediately. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| Assalam-o-Alaikum |
|
| The
Directors are pleased to present their 17th Annual Report along with Audited
Accounts together with Auditors' |
|
| Report
thereon for the year ended June 30, 2000, |
|
|
| FINANCIAL
RESULTS |
|
| During
1999-2000, the Company suffered a net loss before tax of Rs. 24.5 million as
against Rs. 17.6 million |
|
| for
the year 1998-99, mainly due to lower sales and production. |
|
|
| REVIEW |
|
| The
Company has unfortunately witnessed a bad year of operation. During the year,
turnover has gone down |
|
| to
Rs. 18.1 million as against, Rs. 25.4 million in the preceeding financial
year. |
|
|
| In
addition to this, production level come down considerably to 135,926 square
meters as against 263,474 |
|
| square
meters during 1999. This dismal performance can be attributed mainly to the
uncertain political and |
|
| economic
conditions in the country. The consequent chaos and inflationary trend in
prices of items of basic |
|
| needs,
discouraged liberal buying. Thus, market did not take an upturn. Besides,
acute competition with cheap |
|
| imported
smuggled floor coverings did not allow us to increase prices of our products
and forced us to bear |
|
| all
the inflationary cost pressures. |
|
|
| FUTURE
OUTLOOK |
|
| The
weakened financial position and unsatisfactory economic conditions of the
country continued to deteriorate. |
|
| It
must be frankly admitted that our profitability depends on easing economic,
fiscal and political difficulties |
|
| faced
by the country as much as on the stability of Pakistan rupee. Your Directors
are hopeful that as soon |
|
| as
they are able to surmount these difficulties and overcome the adverse factors
adumbrated above, the financial |
|
| health
of the Company will improve. In this behalf, no stone will be left unturned
and every nerve will be |
|
| strained
to achieve fiscal self sufficiency and economic buoyancy. |
|
|
| DELISTING |
|
| Owing
to continuously heavy losses suffered by the Company during the last six
years, the Directors could |
|
| not
declare any dividend/bonus to the shareholders for these years. The
Management feels very strongly that |
|
| minority
shareholders should not suffer any more. Therefore, it advised the sponsors
to buy back all shares |
|
| of
the minority shareholders from the market. The sponsors have given their
consent and agreed to buy back |
|
| such
shares @ Rs. 10/- per share. Hence, the Karachi Stock Exchange has been
approached to de-list the |
|
| Company. |
|
|
| AUDITORS |
|
| The
auditors of the Company M/s Sarwar Chartered Accountants retire and being
eligible, offer themselves |
|
| for
re-appointment for the year 2000-2001. |
|
|
| ACKNOWLEDGMENT |
|
| The
Directors avail themselves of this opportunity to express their thanks to all
the staff members and workers |
|
| for
their loyalty, sincere efforts and hard work done during the year under
review. The Directors also wish |
|
| to
put on record their thanks to the shareholders, the Company's Bankers,
customers and suppliers for their |
|
| continued
cooperation and support |
|
|
|
For and on behalf of the Board of Directors |
|
|
|
|
| Karachi:
4th December, 2000 |
|
Muhammad Said Khan |
|
|
Chairman |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of M/s. International Floor Coverings
Limited, as at June |
|
| 30,
2000 and the related Profit & Loss account, cash flow statement and the
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 purpose 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 the conformity with the
approved accounting |
|
| standards
and the requirements of the Companies Ordinance, 1984. Our responsibility is
to express on |
|
| 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 responsible assurance
about whether |
|
| the
above statements are free of any material miss statements. 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 significance estimates made by the
management, as well |
|
| as,
evaluating the overall presentation of the above said statements. We believe
that our audit provides |
|
| a
responsible 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 & 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 accounts 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, investment made and the expenditure incurred during
the year were |
|
| in
accordance with the objects of the company; |
|
|
| (c)
In our opinion and the best of our information and according to the
explanations given to us, the |
|
| balance
sheet, profit & loss account, cash flow statement and statement of
changes in equity together |
|
| with
the notes forming part thereof, confirm 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
June 30, 2000 and of the profit/loss, its cash flow and changes in equity for
the year then ended; |
|
| and |
|
|
| (d)
No Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980. |
|
|
| LAHORE |
|
SARWARS |
|
| 4th
December, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30TH JUNE, 2000 |
|
|
|
|
30.06.2000 |
30.06.1999 |
|
|
NOTE |
RUPEES |
RUPEES |
|
| CAPITAL
AND LIABILITIES |
|
| AUTHORISED
CAPITAL |
|
| 3,000,000
Ordinary Shares of Rs. 10 each |
|
30,000,000 |
30,000,000 |
|
|
========== |
========== |
|
| ISSUED,
SUBSCRIBED & PAID UP CAPITAL |
|
| 3,000,000
Ordinary Shares of Rs. 10 each |
|
30,000,000 |
30,000,000 |
|
|
|
|
| GENERAL
RESERVE |
|
7,250,000 |
7,250,000 |
|
| ACCUMULATED
LOSSES |
|
(104,131,844) |
(79,486,927) |
|
|
----------- |
----------- |
|
|
(66,881,844) |
(42,236,927) |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
2 |
117,016,327 |
117,016,327 |
|
| LONG
TERM LOANS |
|
3 |
42,443,252 |
46,612,535 |
|
| CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
| Current
maturity of long term loans |
|
4 |
8,800,000 |
6,600,000 |
|
| Borrowing
from Banks |
|
5 |
33,398,237 |
37,098,339 |
|
| Creditors,
Accrued & Other Liabilities |
|
6 |
53,899,897 |
33,054,856 |
|
| Provision
for Taxation |
|
831,961 |
741,291 |
|
|
----------- |
----------- |
|
|
96,930,095 |
77,494,486 |
|
|
----------- |
----------- |
|
| COMMITMENTS
AND CONTINGENCIES |
|
7 |
-- |
-- |
|
|
|
----------- |
----------- |
|
|
189,507,830 |
198,886,421 |
|
|
========== |
========== |
|
| PROPERTY AND ASSETS |
NOTE |
|
| FIXED
ASSETS |
|
8 |
143,800,118 |
150,872,507 |
|
| INVESTMENT
(AT COST) |
|
9 |
-- |
300,000 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stock
And Stores |
|
10 |
36,932,212 |
38,450,966 |
|
| Sundry
Debtors |
|
11 |
1,677,140 |
5,173,249 |
|
| Advances,
Deposits & Pre-Payments |
|
12 |
4,440,624 |
4,004,671 |
|
| Cash
and Bank Balances |
|
13 |
2,657,736 |
85,028 |
|
|
----------- |
----------- |
|
|
45,707,712 |
47,713,914 |
|
|
----------- |
----------- |
|
|
189,507,830 |
198,886,421 |
|
|
========== |
========== |
|
| Note:
The annexed Notes form an integral part of these accounts. |
|
|
| KARACHI |
|
Muhammad Said Khan |
|
MASOOD AHMED |
|
| 4th
December, 2000 |
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30TH JUNE, 2000 |
|
|
|
|
30.06.2000 |
30.06.1999 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
| SALES |
|
14 |
18,133,926 |
25,352,780 |
|
| LESS:
COST OF SALES |
|
15 |
21,074,478 |
25,256,665 |
|
|
|
------------ |
------------ |
|
| GROSS
(LOSS)/PROFIT |
|
(2,940,552) |
96,115 |
|
| LESS:
OPERATING EXPENSES |
|
| Administrative
& General |
|
16 |
4,114,586 |
3,460,952 |
|
| Selling
& Distribution |
|
17 |
1,107,036 |
1,404,540 |
|
|
|
------------ |
------------ |
|
|
5,221,622 |
4,865,492 |
|
|
------------ |
------------ |
|
| OPERATING
LOSS |
|
(8,162,174) |
(4,769,377) |
|
| OTHER
INCOME |
|
270,148 |
-- |
|
|
------------ |
------------ |
|
|
(7,892,026) |
(4,769,377) |
|
| Financial
Expenses |
|
18 |
16,662,221 |
12,808,955 |
|
|
|
------------ |
------------ |
|
| (LOSS)
BEFORE TAXATION |
|
(24,554,247) |
(17,578,332) |
|
|
|
|
| TAXATION |
|
|
|
| Current |
|
90,670 |
126,567 |
|
|
------------ |
------------ |
|
| Loss
After Taxation |
|
(24,644,917) |
(17,704,899) |
|
| Prior
Year Adjustment |
|
-- |
(2,038,186) |
|
|
------------ |
------------ |
|
|
(24,644,917) |
(19,743,085) |
|
| ACCUMULATED
(LOSSES) BROUGHT FORWARD |
|
(79,486,927) |
(59,743,842) |
|
|
------------ |
------------ |
|
| BALANCE
CARRIED OVER TO BALANCE SHEET |
|
(104,131,844) |
(79,486,927) |
|
|
========== |
========== |
|
| Earning
Per Share |
|
19 |
(8.21) |
(5.90) |
|
|
| Note:
The annexed notes form an integral part of these accounts. |
|
|
| KARACHI |
|
Muhammad Said Khan |
|
MASOOD AHMED |
|
| 4th
December, 2000 |
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED 30TH JUNE, 2000 |
|
|
|
Share |
Share |
General |
Accumulated |
|
|
|
Capital |
Premium |
Reserve |
Loss |
Total |
|
| Balance
as on 1 st July 1998 |
|
30,000,000 |
-- |
7,250,000 |
(59,743,842) |
(22,493,842) |
|
| Profit/(Loss)
for the year |
|
|
(19,743,085) |
(19,743,085) |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
|
| Balance
as on 30th June 1999 |
|
30,000,000 |
-- |
7,250,000 |
(79,486,927) |
(42,236,927) |
|
| Profit/(Loss)
for the year |
|
|
(24,644,917) |
(24,644,917) |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
|
| Balance
as on 30th June 2000 |
|
30,000,000 |
-- |
7,250,000 |
(104,131,844). |
(66,881,844) |
|
|
========== |
========== |
========== |
========== |
========== |
|
| Note:
The annexed notes form an integral part of these accounts. |
|
|
|
| KARACHI |
|
Muhammad Said Khan |
|
MASOOD AHMED |
|
| 4th
December, 2000 |
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| CASH
FLOW STATEMENT |
|
| AS
AT 30TH JUNE, 2000 |
|
|
|
|
30.06.2000 |
30.06.1999 |
|
|
NOTE |
RUPEES |
RUPEES |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Cash
generated from operation |
|
23 |
18,650,621 |
9,353,484 |
|
| Financial
Expenses paid |
|
(10,285,694) |
(18,149,251) |
|
| Taxes paid |
|
-- |
-- |
|
| Prior
year adjustment |
|
-- |
(2,038,186) |
|
|
----------- |
----------- |
|
| Net
Cash in flow / (out flow) from Operating Activities |
|
8,364,927 |
(10,833,953) |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Fixed
Capital Expenditure |
|
(422,834) |
(120,907) |
|
| Investment |
|
300,000 |
-- |
|
|
----------- |
----------- |
|
| Net
Cash (out flow) from Investing Activities |
|
(122,834) |
(120,907) |
|
|
----------- |
----------- |
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Long
Term Loan (Net) |
|
(1,969,283) |
3,919,440 |
|
|
----------- |
----------- |
|
| Net
Cash In Flow / (Out Flow) from |
|
(1,969,283) |
3,919,440 |
|
| Financing
Activities |
|
----------- |
----------- |
|
|
|
|
| Net
Increase/(Decrease) in Cash & |
|
| Cash
Equivalent |
|
6,272,810 |
(7,035,420) |
|
| Cash
& Cash Equivalent at Beginning |
|
(37,013,311) |
(29,977,891) |
|
|
----------- |
----------- |
|
| Cash
& Cash Equivalent at Ending |
|
24 |
(30,740,501) |
(37,013,311 ) |
|
|
========== |
========== |
|
|
| KARACHI |
|
Muhammad Said Khan |
|
MASOOD AHMED |
|
| 4th
December, 2000 |
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED 30TH JUNE, 2000 |
|
|
| STATUS
AND NATURE OF BUSINESS: |
|
| International
Floor Coverings Limited was incorporated on 27th day of February, 1983 as a
Public |
|
| Limited
Company. Its shares are quoted on Stock Exchanges in Pakistan and its main
area of activity |
|
| is
manufacture and sale of Floor Coverings. |
|
|
| 1.
SIGNIFICANT ACCOUNTANT POLICIES: |
|
| 1.1
Accounting Convention |
|
| These
accounts are prepared on historical cost convention without any adjustment
for the |
|
| effect
of inflation or current values. |
|
|
| 1.2
Exchange Gain/Losses |
|
| Exchange
gain/losses are included in the cost of fixed assets acquired from the
proceeds of |
|
| such
foreign currency loan. |
|
|
| 1.3
Foreign Currency Loan |
|
| Foreign
Currency Loan is converted into Pak Rupee at the rate of exchange on the
Balance |
|
| Sheet
date, except where exchange risk cover is available. |
|
|
| 1.4 Taxation |
|
| Provision
for current taxation is made on taxable income, if any. The Company does not
ac- |
|
| count
for deferred taxation arising due to timing differences. |
|
|
| 1.5
Employees Gratuity |
|
| The
Company does not made provision for gratuity as the Company follows the
policy of as |
|
| and
when paid. |
|
|
| 1.6
Fixed Assets |
|
| a)
Fixed assets are stated at cost less accumulated depreciation except
leasehold land, Building |
|
| and
plant and machinery which are stated at revalued amount |
|
|
| b)
Depreciation is changed to income applying the reducing balance method
without consid- |
|
| ering
the extra shift worked. |
|
|
| c)
Minor renewals or replacement and maintenance and repairs are expensed. Major
renew- |
|
| als
and betterments are capitalized. |
|
|
| d)
Gain or loss disposal of fixed assets, if any, is included in current income. |
|
|
| e)
Full year's depreciation is charged on addition during the year whereas no
depreciation is |
|
| charged
in the year of disposal. |
|
|
| 1.7
Stock-in-Trade |
|
| These
are valued as under: |
|
| a)
Raw Material |
|
At average cost. |
|
| b)
Work in Process |
|
At average cost. |
|
| c)
Stores and Spares |
|
At average cost. |
|
| d)
Finished Goods |
|
At lower of cost or net
realizable value. |
|
|
| 1.
8 Book Debts |
|
| Debts
considered bad by the management were written off, but no general provision
is made |
|
| for
doubtful debts. |
|
|
| 1.9
Revenue Recognition |
|
| Revenue
is recognized on despatch of goods to customers. |
|
|
|
30.06.2000 |
30.06.1999 |
|
|
RUPEES |
RUPEES |
|
| 2. SURPLUS ON REVALUATION OF |
|
| FIXED
ASSETS |
|
117,016,327 |
117,016,327 |
|
|
========== |
========== |
|
| The
Company carried out revaluation of its Leasehold land, building on leasehold
and plant |
|
| and
machinery on 10th December 1995 valued by M/S Asiatic Surveyors, in
accordance with |
|
| the
requirements of Corporate Law and State Bank of Pakistan. |
|
|
| 3.
LONG TERM LOANS (secured) |
|
| Pakistan
Industrial Credit & Investment Corp. Ltd. |
|
| Balance
on 1st July |
|
53,212,535 |
49,293,095 |
|
|
| Add:
Interest Charged for the year & freezed |
|
| as
per P.I.C.I.C. Agreement |
|
4,630,717 |
6,782,601 |
|
|
------------ |
------------ |
|
|
57,843,252 |
56,075,696 |
|
| Less:
Paid during the year |
|
6,600,000 |
2,863,161 |
|
|
------------ |
------------ |
|
| Balance
on 30th June |
|
51,243,252 |
53,212,535 |
|
| Less:
Current maturity and overdues (Note 5) |
|
8,800,000 |
6,600,000 |
|
|
------------ |
------------ |
|
|
42,443,252 |
46,612,535 |
|
|
========== |
========== |
|
|
|
|
| 3.1
PICIC has sanctioned foreign currency loan amounting to Netherland Guilders
3,159,589.90 |
|
| for
import of extrusion plant. The loan has been converted into Pak Rupee at the
exchange rate |
|
| prevailing
at the date of disbursement i.e. 5th March, 1991. The Principal and interest
thereon |
|
| all
re-payable in Pak Rupee. |
|
|
| PICIC
has rescheduled loans No. 11452 & 18226 a total amount of Rs. 53,212,535
which |
|
| include
frozen mark-up of Rs. 16,835,984/- Re-Payment would be made in 28 quarterly
install- |
|
| ments
(8 installments of Rs. 2.20 million and 20 installments of Rs. 2.48 million)
each including |
|
| frozen
mark-up. Installments of principal and frozen mark-up commencing from
01-10-99 & |
|
| 01-04-2000
respectively. The loan is secured by way of mortgage on the Company's present |
|
| and
future immovable properties wherever situated including all building, plant
and machinery, |
|
| fixtures
and shall rank-pari-passu with the charges already created in favour of
PICIC. Hypoth- |
|
| ecation
of all machinery of the Company both present and future shall rank pari-passu
with the |
|
| charge
already created in favour of PICIC. |
|
|
| First
floating charge on all other assets of the Company both present and future
(subject to the |
|
| hypothecation
or charge in favour of Company's Bankers) shall rank pari-passu with charges |
|
| already
created and existing in favour if PICIC and a demand promissory note in
favour of |
|
| PICIC
for the amount of loan. |
|
|
|
30.06.2000 |
30.06.1999 |
|
|
RUPEES |
RUPEES |
|
| 4.
CURRENT MATURITY |
|
| Pakistan
Industrial Credit & Investment |
|
| Corporation
Ltd. |
|
| Loan
No. 11452 |
|
8,800,000 |
6,600,000 |
|
|
------------ |
------------ |
|
|
8,800,000 |
6,600,000 |
|
|
========== |
========== |
|
|
|
|
|
|
Sanction Limit |
|
| 5.
Borrowing From Bank |
|
In Million |
|
| National
Bank of Pakistan (Hyp) |
|
20.00 |
23,261,672 |
24,667,690 |
|
| National
Bank of Pakistan (Pledge) |
|
10.00 |
10,136,565 |
12,430,649 |
|
|
------------ |
------------ |
|
|
33,398,237 |
37,098,339 |
|
