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BROOKE BOND PAKISTAN LIMITED |
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|
ANNUAL REPORT 1995 - 1996 |
|
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|
Page No. |
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|
|
| Notice
of Meeting |
|
3 |
|
|
|
|
| Directors'
Report |
|
5 |
|
|
|
| Pattern
of Shareholdings |
|
10 |
|
|
| Auditors'
Report |
|
11 |
|
|
| Balance
Sheet |
|
12 |
|
|
| Profit
and Loss Account |
|
14 |
|
|
| Cash
Flow Statement |
|
16 |
|
|
| Notes
to the Accounts |
|
17 |
|
|
|
| Five
Years at a Glance |
|
31 |
|
|
|
|
|
| Corporate
Information |
|
|
|
|
|
|
|
| Board
of Directors |
|
|
|
|
|
|
|
| MR.
KASSIM DADA, S.K. (Pak.), Off. L. II (Bel). |
|
|
CHAIRMAN |
|
|
|
|
|
| MR,
MASHKOOR AIAM |
|
MAN-AGING DIRECTOR &
CHIEF EXECUTIVE |
|
|
| MR.
PHILLIP A. GREEN |
|
DIRECTOR |
|
|
|
| MR.
SHAHID GHAFFAR |
|
DIRECTOR |
|
|
|
|
|
| MR.
IRTIZA HUSAIN |
|
DIRECTOR |
|
|
|
|
|
| MR.
OMAR H. KARIM |
|
DIRECTOR |
|
|
|
|
|
| MR.
A.K.M: SAYELD |
|
DIRECTOR |
|
|
|
| MR,
BADRUDDIN F. VELLANI |
|
DIRECTOR |
|
|
|
|
| MR.
S. GULREZ YAZDANI |
|
DIRECTOR |
|
|
|
|
|
| MR.
R.A.S. de MEL |
|
COMPANY SECRETARY |
|
|
|
| Auditors |
|
| A.F.
Ferguson & Co. |
|
| Chartered
Accountants |
|
|
|
|
|
Bankers |
|
|
|
| ABN-AMRO
Bank |
|
Habib Bank Limited |
|
| ANZ
Grindlays Bank |
|
The Hongkong a Shanghai |
|
| Allied
Bank of Pakistan Limited |
|
Banking Corporation |
|
| American
Express Bank Ltd. |
|
Muslim Commercial Bank
Ltd. |
|
| Bank
of America NT & SA |
|
National Bank of Pakistan |
|
| Banque
Indosuez |
|
Standard Chartered Bank |
|
| Citibank
N.A. |
|
The Bank of Tokyo Ltd |
|
| Deutsche
Bank |
|
United Bank Limited |
|
| Emirates
Bank International |
|
|
|
| Registered
and Head Office |
|
| X-7,
Sind Industrial Trading Estates, |
|
| Mauripur,
Karachi. (Postal address: SITE P.O. Box 2705, Karachi-75730) |
|
|
| Regional
Offices |
|
| Karachi
- Lahore - Rawalpindi |
|
|
| Blending
and Packing Factories |
|
| Karachi-
Khanewal |
|
|
| Share
Transfer Office |
|
| C/o.
M/s. Ferguson Associates (Pvt) Ltd., |
|
| Ground
Floor, State Life Building l-A, LL Chundrigar Road, P.O. Box 4716,
Karachi-74000. |
|
|
|
|
|
| Notice
is hereby given that the Forty Eighth Annual General Meeting of the
shareholders of Brooke Bond Pakistan Ltd., will be held al |
| the
Hotel Holiday Inn, Crown Plaza, Shahrah-e-Faisal Karachi, on 22nd October
1996 at 1500 hours, to transact the following business: |
|
|
|
| ORDINARY
BUSINESS |
|
|
| 1.
To receive and consider the Statement of Accounts of the Company for the
eighteen months ended 30th June 1996 |
|
| and
the Reports of Directors and Auditors thereon. |
|
|
| 2.
To declare a Dividend. |
|
|
| 3.
To appoint Auditors for the year ending 30th June 1997 and fix their
remuneration. |
|
| (Messrs
A.F. Ferguson & Co., Chartered Accountants, retire and being eligible,
have offered themselves for |
|
| re-appointment). |
|
|
| SPECIAL
BUSINESS |
|
|
| 4.
To approve the remuneration of the Chief Executive |
|
| (Note
1 below refers). |
|
|
| By
the order of the Board |
|
| R.A.S.
de Mel |
|
| Commercial
Director & |
|
| Company
Secretary. |
|
|
|
|
| Karachi:
30th September 1996. |
|
|
| Notes. |
|
|
| 1.
The Share transfer books of the company will be closed from 15th October 1996
to 22nd October 1996 both days |
|
| inclusive.
No transfers will be accepted for registration in the names of the
transferees during this period. |
|
|
| 2.
A member entitled to attend and vote at the General Meeting is entitled to
appoint a proxy to attend instead of |
|
| him/he
and such proxy will have the right to attend, speak and vote in place of the
member. A Proxy must be a |
|
| member
of the Company. |
|
|
| 3.
Forms of proxy, in order to be valid, must be deposited at the Company's
Registrar M/s. FERGUSON ASSOCIATES |
|
| (PVT)
LTD. Ground Floor, State Life Building l-A, IJ. Chundrigar Road, P.O. Box
4716 Karachi 74000 not less than |
|
| 48
hours before the appointed time for the meeting. |
|
|
| STATEMENT
IN RESPECT OF SPECIAL BUSINESS |
|
|
| NOTE |
1 |
|
|
|
|
| Item
4 of Agendai Remuneration of the Chief Executive |
|
|
|
| According
to Government regulations, it is necessary to obtain Shareholders approval
for the holding of office of |
|
| profit
by any of the directors as well as their remuneration. It is therefore
proposed to pass the following as an |
|
| Ordinary
Resolution:- |
|
|
|
| The
approval is hereby given for the holding of office of profit with the Company
by the Chief Executive, namely |
|
| Mr.
Mashkoor Alam and payment of remuneration to him of Rs. 5.4 million for the
18 months ended 30th June 1996 |
|
| and
of Rs. 4.6 million estimated for the year ending 30th June 1997, in
accordance with his contract of service and |
|
| the
rules of the Company. |
|
| (The
Chief Executive as a Director is interested to the extent of the remuneration
payable to him). |
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| The
Directors have pleasure in presenting their Annual Report together with the
Company's audited accounts for the 18 month |
|
| period
ended June 30, 1996. |
|
|
|
Jan.
l, 1995 |
Jan. 1,1994-- |
|
|
June 30,1996 |
|
December
31, 1994 |
|
|
|
(Rupees '000) |
|
|
|
| Profit
after taxation |
|
523,249 |
|
184,134 |
|
| Unappropriated
profit carried forward |
|
360 |
|
679 |
|
|
|
--------- |
|
--------- |
|
|
523,609 |
|
184,813 |
|
| APPROPRIATIONS: |
|
|
|
|
| Transfer
to: |
|
|
|
| General
Reserve |
|
27,000 |
|
82,000 |
|
| Reserve
for issue of Bonus Shares |
|
34,151 |
|
| Interim
Dividend Rs. 12.50 per share |
|
|
|
| (1994:
Rs. 2.00/share) |
|
149,411 |
|
17,076 |
|
| Proposed
final Dividend at Rs. 29.00 per share |
|
|
| (1994:
share Rs. 6.00/share) |
|
346,633 |
|
51,226 |
|
|
--------- |
|
--------- |
|
| Unappropriated
profit carried forward |
|
523,044 |
|
184,453 |
|
|
--------- |
|
--------- |
|
|
|
565 |
|
360 |
|
|
|
========== |
|
========== |
|
|
|
|
|
| OPERATING
RESULTS |
|
|
|
|
|
|
|
|
| Net
Sales Revenue of Rs.6,137.6 million is a 15.7% improvement over Rs.5,305.6
million for the previous 18 months ended. |
|
| December
31, 1994 and reflects gains in market share and partial pass through of cost
increases. The Operating Profit at Rs.812.2 |
| million
is 90.7% better than the Rs.425.9 million for the previous eighteen months.
Pre-tax profit at Rs.835.5 million is 99.7% |
| improvement
over the Rs.418.3 million for the 18 months period ended December 31, 1994.
Profit after taxes at Rs.523.2 million is. |
| an
104.3% improvement compared to Rs.256.1 million for the previous eighteen
months. These results primarily reflect the impact |
| of
the intense efforts of your company to improve the efficiencies and overall
cost position. |
|
|
|
| The
packeted tea business continues to suffer major setback as an estimated 25
million kilogram of tea intended for Afghanistan, |
| which
is exempt from duties and taxes (nearly 103% of C&F value) was smuggled
into Pakistan by unethical traders during 1995. |
| This
smuggling of tea has continued unabated during 1995-1996 through Dubai-Iran
route. Very little tea is being bought at the major |
| world
auctions by legitimate traders from Pakistan except those who are involved in
the packeted tea sector. It is estimated by the |
| Pakistan
Tea Association that approximately 40 million Kgs of tea will be smuggled
into Pakistan during calendar year 1996. We |
| continue
to beof the firm view that unless duties and taxes levied on import of tea
are brought down to more reasonable levels, the |
| unethical
traders will continue to find ways to smuggle tea into the country, disrupt
the legitimate trade and deprive the Government |
| of
receipt of duties and taxes. The Government imposed Sales Tax at 18% on
packeted tea beginning July 1, 1996. |
|
|
|
|
| DIVIDEND |
|
|
|
|
|
| Earnings
per share on the enhanced capital of Rs.119.5 million rose to Rs.43.78 for
the eighteen months period January 1, 1995 - |
| June
30, 1996 from Rs. 30.00 for the same period during 1993-94. Your Directors
propose a final dividend of Rs. 29.00 per share |
| which
together with the Rs.12.50 per share interim already paid amounts to Rs.
41.50 for the eighteen months period. |
|
|
|
| PROSPECTS |
|
|
|
| The
Management of your Company is making every effort to strengthen the business,
increase sales and improve profitability. |
|
| Outside
the gains in the cost structure which have reflected in the profitability for
the years 1995-96, Management's efforts of |
| emphasizing
and rewarding personal leadership and results, and not mere activity has
begun to pay off. This effort will continue |
| along
with right sizing the Company during 1996-97. |
|
|
|
| The
possibility of Pakistani Rupee devaluation against major foreign currencies,
increases in the prices of tea, and smuggling of non |
| duty
paid tea are expected to create pressures and impact the business
unfavourably. However, the Management of your Company |
|
| is
determined to do its utmost to improve its market share and financial
performance. |
|
|
|
| AMALGAMATION |
|
|
|
| The
proposed amalgamation of Brooke Bond Pakistan Ltd. with Lever Brothers
Pakistan Ltd. is still under consideration of the |
|
| Monopoly
Control Authority. |
|
|
|
| STAFF
RELATIONS |
|
|
|
| A
two year agreement was satisfactorily concluded with the Karachi Factory
Workers' Union in a cordial atmosphere and |
|
| negotiations
with the Khanewal Factory are presently underway. |
|
|
| The
Board of Directors appreciates the dedicated efforts and contributions made
by the individual employees towards the |
|
| performance
of your Company during 1995-96. The performance suggests that we have an
unmatched base of talent in our |
|
| employees. |
|
|
|
| AUDITORS |
|
|
|
| Messrs
A.F. Fergusons & Co. retire and offer themselves for re-election as
auditors for the ensuing year at a fee of Rs. 175,000. |
|
|
| We
wish to thank our valued customers, shareholders, vendors and bankers for
their confidence and support. |
|
|
|
| On
behalf of the Board |
|
|
|
|
| KASSIM
DADA |
|
| Chairman |
|
|
| MASHKOOR
ALAM |
|
| Chief
Executive |
|
|
|
|
| No.
of Shareholders |
Size of Holding |
|
No. of Shares Held |
|
|
|
|
|
|
|
|
|
|
| 844 |
From |
1 |
To |
100 Shares |
|
30,479 |
|
| 1089 |
From |
101 |
To |
500 Shares |
|
277,489 |
|
| 325 |
From |
501 |
To |
1000 Shares |
236,362 |
|
| 518 |
From |
1001 |
To |
5000 Shares |
1,504,393 |
|
| 61 |
From |
5001 |
To |
10000 Shares |
439,333 |
|
| 17 |
From |
10001 |
To |
15000 Shares |
203,146 |
|
| 6 |
From |
15001 |
To |
20000 Shares |
111,088 |
|
| 1 |
From |
20001 |
To |
25000 Shares |
23,034 |
|
| 1 |
From |
25001 |
To |
30000 Shares |
27,993 |
|
| - |
From |
30001 |
To |
40000 Shares |
-- |
|
| 3 |
From |
40001 |
To |
45000 Shares |
127.85 |
|
| 1 |
From |
45001 |
To |
50000 Shares |
45,201 |
|
| 1 |
From |
50001 |
To |
60000 Shares |
59.72 |
|
| 1 |
From |
60001 |
To |
70000 Shares |
68,376 |
|
| 1 |
From |
70001 |
To |
90000 Shares |
85,356 |
|
| 1 |
From |
90001 |
To |
155000 Shares |
152,370 |
|
| 1 |
From |
155001 |
To |
165000 Shares |
161,280 |
|
| 1 |
From |
165001 |
To |
215000 Shares |
213,287 |
|
| 1 |
From |
215001 |
To |
915000 Shares |
911,833 |
|
| 1 |
From |
915001 |
To |
2495000 Shares |
2,493,152 |
|
| 1 |
From |
2495001 |
To |
4785000 Shares |
4,781,132 |
|
| -------- |
|
-------- |
|
| 2,875 |
|
|
11,952,864 |
|
| ========= |
|
|
========== |
|
|
|
|
|
|
|
| Categories
of Shareholders |
Number of |
|
Number of |
|
Percentage of |
|
|
|
Shareholders |
Shares Held |
|
Issued Capital |
|
|
|
|
|
|
|
|
| Individuals |
|
2827 |
|
2,833,553 |
|
23.70% |
|
| Invesment
Companies |
11 |
|
321,386 |
|
2.69% |
|
| Insurance
Companies |
7 |
|
1,208,255 |
|
10.11% |
|
| Joint
Stock Companies |
10 |
|
44,117 |
|
0.37% |
|
| Financial
Institutions |
9 |
|
2,740,820 |
|
22.93% |
|
| Associated
Companies* |
4 |
|
4,781,145 |
|
40.00% |
|
| Government
Organizations |
2 |
|
9,444 |
|
0.08% |
|
| Modaraba
Companies |
|
1 |
|
184 |
|
0.00% |
|
| Others
- See below |
|
4 |
|
13,960 |
|
0.12% |
|
|
|
--------- |
|
--------- |
|
--------- |
|
|
|
2875 |
|
11,952,864 |
|
100.00% |
|
|
|
========= |
|
========= |
|
========= |
|
|
| Others: |
|
|
| 1.
Aminia Muslim Girls School Trust |
2,672 |
|
0.02% |
|
| 2.
Pakistan Masonic Institutions |
9,844 |
|
0.08% |
|
| 3.
Pak Shareholders Association |
|
42 |
|
0.00% |
|
| 4.
Punjabi Saudagar Multipurpose |
|
|
|
| Co-operative
Society Ltd. |
|
1,402 |
|
0.02% |
|
|
--------- |
|
--------- |
|
|
|
13,960 |
|
0.12% |
|
|
|
========= |
|
========= |
|
|
|
|
|
|
|
| *
Note: Category includes the 40% shareholding of Brooke Bored Group
Investments Ltd. London and also the group's |
|
| nominee shareholders. |
|
|
| AUDITORS
REPORT TO THE MEMBERS |
|
|
|
| We
have audited the annexed balance sheet of Brooke Bond Pakistan Limited as at
June 30, 1996 and the related profit and loss |
| account
and cash flow statement, together with the notes forming part thereof, for
the eighteen months 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 and, after due verification thereof, 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 period was for the purpose of the Company's business; and |
|
|
|
| (iii) |
the business conducted,
investments made and the expenditure incurred during the period 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 and
cash flow statement, together with the notes forming part thereof, 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, 1996 and of the profit and cash flows for the eighteen months then
ended; and |
|
|
|
| (d) |
in our opinion Zakat
deductible at source under the Zakat and Ushr Ordinance, 1980 was deducted by
the Company and |
|
|
deposited in the Central
Zakat Fund established under section 7 of that Ordinance. |
|
|
|
| A.F.
Ferguson & Co. |
|
Karachi |
|
| Chartered
Accountants |
|
Dated: 12 September, 1996 |
|
|
|
| BALANCE
SHEET |
|
|
|
|
|
|
June |
December |
|
|
|
|
30, 1996 |
31, 1994 |
|
|
|
|
|
|
|
|
|
NOTE |
(Rupees'000) |
|
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
|
|
|
| Share
capital |
|
|
|
|
|
|
|
| Authorised |
|
|
|
|
|
|
| 20,0004000
ordinary shares of |
|
|
|
| Rs.
10 each (1994: 10,000,000) |
|
|
200,000 |
100.00 |
|
|
|
===================== |
|
| Issued,
subscribed and paid-up |
|
2 |
119,529 |
85,378 |
|
|
|
|
|
| Reserves |
|
3 |
228,700 |
235,851 |
|
|
|
|
|
| Unappropriated
profit |
|
565 |
36O |
|
|
|
---------- |
---------- |
|
|
|
|
348,794 |
321,58 |
|
|
|
|
|
|
|
| DEFERRED
TAXATION |
|
|
2,170 |
- |
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Running
finance under mark-up arrangements 4 |
48,318 |
52,605 |
|
|
|
|
|
| Creditors,
accrued and other liabilities 5 |
525,526 |
363,687 |
|
|
|
|
| Taxation |
|
60,928 |
55,289 |
|
|
|
|
| Dividends |
|
6 |
|
|
|
----------- |
----------- |
|
|
989,727 |
555,268 |
|
|
|
|
| COMMITMENTS |
|
7 |
|
|
|
----------- |
----------- |
|
|
|
1,340,691 |
876,857 |
|
|
|
==================== |
|
|
|
|
|
June |
December |
|
|
|
|
30, 1996 |
31, 1994 |
|
|
|
|
|
|
|
|
NOTE |
(Rupees'000) |
|
|
|
| TANGIBLE
FIXED ASSETS |
|
8 |
56,365 |
48,145 |
|
|
|
| Operating
fixed assets |
|
9 |
4,633 |
5,361 |
|
|
-------------------- |
|
| Capital
Work-in-progress - at cost |
|
60,998 |
53,506 |
|
|
| LONG-TERM
LOANS |
|
10 |
2,700 |
2,345 |
|
|
| LONG-TERM
DEPOSITS AND PREPAYMENTS |
|
11 |
4,195 |
1,895 |
|
|
| DEFERRED
TAXATION |
|
- |
862 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores
and spares |
|
12 |
2,907 |
3,898 |
|
|
| Stock-in-trade |
|
13 |
700,418 |
567,869 |
|
|
|
|
|
| Trade
'debts |
|
14 |
88,557 |
36,267 |
|
|
|
|
| Loans
and advances |
|
15 |
42,053 |
1,367 |
|
|
|
|
| Trade
deposits and short-term prepayments |
16 |
11,989 |
2,626 |
|
|
|
|
| Other
receivables |
|
17 |
14,206 |
5,416 |
|
|
| Short-term
investments |
|
18 |
200,000 |
100,000 |
|
|
|
| Cash
and bank balances |
|
19 |
212,668 |
100,806 |
|
|
|
|
----------- |
--------- |
|
|
|
1,272,798 |
818,249 |
|
|
|
----------- |
--------- |
|
|
|
1,340,691 |
876,857 |
|
|
|
==================== |
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| KASSIM
DADA |
|
MASHKOOR ALAM |
|
| Chairman |
|
Chief Executive |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE EIGHTEEN
MONTHS ENDED JUNE 30,1996 |
|
|
|
|
|
|
Forthe year ended |
|
|
|
|
|
Jun 30,1996 |
December 31,1994 |
|
|
|
|
|
|
|
|
Note |
(Rupees'000) |
|
|
|
|
|
| Sales |
|
|
20 |
6,137,618 |
3,730,806 |
|
| Cost
of goods sold |
|
|
21 |
4,898,312 |
3,224,492 |
|
|
|
|
----------- |
--------- |
|
| Trading
profit |
|
|
1,239,306 |
506,314 |
|
| Establishment
and selling expenses |
|
22 |
427,102 |
203,166 |
|
|
|
|
----------- |
--------- |
|
|
|
|
|
812,204 |
303,148 |
|
| Other
income |
|
|
23 |
100,904 |
29,611 |
|
|
|
|
|
----------- |
--------- |
|
|
|
|
|
913,108 |
332,759 |
|
| Financial
charges |
|
|
24 |
16,175 |
10,252 |
|
| Other
charges |
|
|
25 |
61,472 |
23,027 |
|
|
|
|
----------- |
--------- |
|
|
|
77,647 |
33,279 |
|
|
|
|
|
----------- |
--------- |
|
| Profit
before taxation |
|
|
835,461 |
299,480 |
|
| Taxation |
