| GHANDHARA NISSAN LIMITED |
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|
(Annual Report 1996) |
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| CONTENTS |
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| Company
Profile |
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1 |
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| Notice
of Meeting |
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2 |
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| Chairman
and Directors Report |
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3 |
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| Auditors,,
Report to the Members |
6 |
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| Balance
Sheet |
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7 |
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| Profit
& Loss Account |
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8 |
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| Cash
flow Statement |
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9 |
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| Notes
of the Accounts |
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10 |
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| Pattern
of Shareholding |
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21 |
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| Proxy
Form |
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| COMPANY
PROFILE |
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| BOARD
OF DIRECTORS |
|
| Mr.
Raza Kuli Khan Khattak |
|
Chairman |
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| Mr.
Ahmed Kuli Khan Khattak |
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| Dr.
A. S. Mufti |
|
| Begum
Tehmina H. Khan |
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| Mr.
Mushtaq Ahmed Khan |
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| Mr.
Razi-ur-Rahman Khan |
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| Mr.
Irfan Siddique |
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| Mr.
H. S. Mufti |
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|
Chief Executive |
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| COMPANY
SECRETARY |
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| Mr.
Mohammad Saleem Baig |
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| REGISTERED
OFFICE |
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| Ghandhara
House, |
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| 109/2,
Clifton Karachi. |
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| BANKERS
OF THE COMPANY |
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| Allied
Bank of Pakistan Ltd. |
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| Societe
General Bank |
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| Mashreq
Bank psc |
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| United
Bank Ltd. |
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| American
Express Bank Ltd. |
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| The
Muslim Commercial Bank Ltd. |
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| The
Bank of Tokyo Ltd. |
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| Standard
Chartered Bank |
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| LEGAL
& TAX ADVISOR |
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| Shaukat
Law Associates |
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| 217-218,
Central Hotel Annexe |
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| Abdullah
Haroon Road, |
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| Karachi. |
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| AUDITORS |
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| M/s.
Taseer Hadi Khalid & Co. |
|
M/s. Nasim Akhtar &
Co., |
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| Chartered
Accountants |
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Chartered Accountants |
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| 1st
floor, Sheikh Sultan |
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348 A1-Noor Chambers |
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| Trust
Building No. 2 |
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Plaza Square, M.A. Jinnah
Road, |
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| Beaumount
Road, Karachi |
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Karachi. |
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| SHARE
REGISTRARS |
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| T.H.K.
Associates (Pvt) Ltd. |
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| Ground
floor, Sheikh Sultan |
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| Trust
Building No. 2 |
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| Beaumount
Road, Karachi. |
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|
NOTICE OF ANNUAL GENERAL
MEETING |
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| NOTICE
IS HEREBY GIVEN that 14th Annual General Meeting of the Company will be held
on |
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| Sunday,
29th December 1996, at 11.00 a.m at Avari Tower Hotel to transact the
following business :- |
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|
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| 1.
To receive consider and adopt the Audited Accounts together with the Chairman
and Directors' |
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| Report
for eighteen months ended 30th June, 1996. |
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| 2.
To appoint Auditors and fix their remuneration. The present Auditors Messrs.
Taseer Hadi |
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| Khalid & Co. Chartered Accountants and
M/s Nasim Akhtar & Co. Chartered Accountants retire |
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| and being eligible, offer themselves for
re-appointment. |
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| 3.
To transact any other business as may be placed before the meeting with the
permission of the |
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| Chairman. |
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By Order of the Board |
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| Karachi |
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|
MOHAMMAD SALEEM BAIG |
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| Dated:
8th December, 1996 |
Company Secretary |
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| NOTES: |
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| 1.
The Share Transfer Books of the company will remain closed form 24th December
1996 to 31st |
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| December,
1996 (both days inclusive). |
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| 2.
A member entitled to attend and vote at this meeting may appoint another
member as as his/her |
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| proxy to attend the meeting and vote for
him/her. No person shall act as a proxy who is not a |
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| member of the company. Proxies in order to
be effective must be received by the company not |
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| less than 48 hours before the meeting. |
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|
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| 3.
Shareholders are requested to immediately notify the company of any change in
their addresses. |
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|
CHAIRMAN AND DIRECTORS'
REPORT |
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| For
the eighteen months ended 30th June, 1996 |
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| The
directors present herewith the audited accounts and report of the Company for
18 months ended |
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| 30th
June, 1996. During the period, the management of your Company gave strategic
priority to the |
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| completion
of the Nissan car assembly plant. Modest trading in "built up
vehicles" continued. The |
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| competition,
Toyota and Honda, had the tremendous fiscal advantage of selling locally
assembled |
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| vehicles
at concessionary duty. |
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|
Summary of results |
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|
(Rs. in '000') |
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| Turnover |
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|
160,120 |
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| Gross
profit |
|
28,976 |
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| Profit
for the year before taxation |
8,963 |
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| Provision
for taxation |
|
1,242 |
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| Unappropriated
profit b/f |
|
21,933 |
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| Unappropriated
profit c/f |
|
29,654 |
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|
| 1.
AFFILIATED COMPANIES |
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| A.
GHANDHARA NISSAN DIESEL LTD. |
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| The company wiped out a major portion of
the previous losses carried from the preceding year. |
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|
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| B.
GHEMINI LEASING CO. LTD. |
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| GLC
had a 100% Right Issue. Your Company contributed Rs. 36 million as its
entitlement of the |
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| Right
Issue. |
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| The
company earned a profit of Rs. 23.6 million for the period ended 30th June,
1996 and paid |
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| a
cash dividend of 20% for the same period. |
|
|
| 2.
MARKETING |
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| Customer
Response: |
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| GNL
had an extremely favourable response to advance bookings. The confirmed
orders far |
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| exceeded
than anticipation. GNL has offered the following models: |
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| -
Sunny 1400cc manual and automatic transmission versions with gasoline engine. |
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| - Sunny 2000cc in diesel engine. |
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| The
Sunny being marketed by GNL is the latest model offered by Nissan Motor
Company, Japan. |
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| The
new Sunny is one of the best engineered vehicle in its class and offers
superior fuel economy |
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| and
best value for money. |
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| 3.
PROJECT |
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| By
the Grace of God, despite of devaluation, escalation of Japanese Yen,
inflation and strikes, the |
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| Project
has been completed at a modest capital cost. |
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| The
plant has the capacity to assemble 6,000 passenger cars and LCVs on single
shift basis. |
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| According
to automotive experts GNL assembly plant is the most compact, economical and |
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| efficient
facility in the country. |
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| It
is significant to highlight that your company is committed to excellence and
to producing |
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| vehicles
which are at par with Japanese quality. To this end at the key staff and
workers have |
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| been
trained in Nissan's plants in Japan. |
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| We
thanks our Principals, NISSAN MOTOR COMPANY, and the team of Japanese
engineers |
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| and
our project staff for working beyond the call of duty in commissioning the
plant. |
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| Last
but not the least, the Directors are grateful to the financial institutions
for reposing their |
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| confidence
by financing the project :- PAK - KUWAIT INVESTMENT COMPANY (PVT) |
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| LTD.,
NDLC, PAK-LIBYA HOLDING COMPANY (PVT) LTD., ORIX LEASING COMPANY |
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| PAKISTAN
LTD., FIRST UDL MODARABA, SECURITY LEASING and PAK-GULF |
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| LEASING
COMPANY LTD. |
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| 4.
GOVERNMENT POLICIES, ECONOMIC ENVIRONMENT & FUTURE OUTLOOK |
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| Pakistan
is passing through the most difficult period in its history as far as
economic conditions |
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| are
concerned. There are severe problems of regressive taxation, cost push
inflation, government |
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| levies
and indirect taxation. These are further compounded by successive
devaluations and |
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| budget
deficits. |
|
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| Although
the projected official growth rate of the economy is 6.3 percent for the
fiscal year |
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| 1996-97,
it is unlikely that this target will be achieved. Despite these difficulties
your directors |
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| look
forward to the future with optimism as the demand for passenger cars is
showing a progressive |
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| trend.
By the Grace of God, Ghandhara expects to get adequate share of the existing
and |
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| expanding
market. |
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| Once
again we place on record our deep gratitude to Nissan Motor Company, Tomen |
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| Corporation,
our dedicated staff, the dealers and customers for their support, trust and
loyalty to |
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| our
products and Ghandhara. |
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|
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| 5.
PATTERN OF SHAREHOLDING |
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| A statement showing the pattern of holding
of shares as at 30th June, 1996 is attached. |
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| 6.
AUDITOR'S |
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| The
present Auditor's M/s. Taseer Hadi Khalid & Co. Chartered Accountants and
Nasim |
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| Akhtar
& Co. Chartered Accountants retire and being eligible, offer themselves
for |
|
| re-appointment. |
|
|
| For
and on behalf of the Board |
|
|
| Raza
Kuli Khan Khattak |
H.S. Mufti |
|
Ahmed Kuli Khan Khattak |
|
| Chairman |
|
Chief Executive |
Director |
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| Karachi: |
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| Dated:
8th December, 1996 |
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|
AUDITORS,, REPORT TO THE
MEMBERS |
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|
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| We
have audited the annexed balance sheet of GHANDHARA NISSAN LIMITED as at 30
June, |
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| 1996
and the related profit and loss account and cash flow statement, together
with the notes forming |
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| part
thereof, for the eighteen months period then ended and we state that we have
obtained all the |
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| information
and explanations which to the best of our knowledge and belief were necessary
for the |
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| purposes
of our audit and after due verification thereof, we report that: |
|
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| (a)
in our opinion proper books of account have been kept by the company as
required by the |
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| Companies
Ordinance, 1984; |
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|
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| (b)
in our opinion: |
|
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| i)
the balance sheet and profit and loss account together with the notes thereon
have been |
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| drawn up in conformity with the Companies
Ordinance, 1984 and are in agreement with |
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| the books of accounts and are further in
accordance with accounting policies. consistently |
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| applied, except for the change as indicated
in note 2.10 (c) with which we concur; |
|
|
| ii)
the expenditure incurred during the period was for the purpose of the
Company's business; |
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| and |
|
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| (iii)
the business conducted, investments made and the expenditure incurred during
the period |
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| were
in accordance with the objects of the company; |
|
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| (c)
in our opinion and to the best of our information and according to the
explanations given to us, |
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| the balance sheet, profit and loss account
and the cash flow statement, together with the notes |
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| forming part thereof, give the information
required by the Companies Ordinance, 1984 in the |
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| manner so required and respectively give a
true and fair view of the state of the company's |
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| affairs as at 30 June, 1996 and of the
profit and the changes in financial position for the' eigh- |
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| teen months period then ended; and |
|
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| (d)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
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| NASIM
AKHTAR & CO. |
|
TASEER HADI KHALID &
CO. |
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| CHARTERED
ACCOUNTANTS |
CHARTERED ACCOUNTANTS |
|
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| Karachi: |
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| Dated:
5th December, 1996 |
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|
|
BALANCE SHEET |
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|
As at 30th June 1996 |
|
|
|
|
|
Note |
30 June |
31 December |
|
|
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|
1996 |
1994 |
|
|
|
|
|
Rs. 000 |
Rs. 000 |
|
|
|
|
| TANGIBLE
FIXED AS SETS |
|
3 |
18,157 |
19,126 |
|
| CAPITAL
WORK-IN-PROGRESS |
|
4 |
352,031 |
31,369 |
|
| LONG
TERM INVESTMENT-AT COST |
|
5 |
120,385 |
65,266 |
|
| ADVANCE
AGAINST INVESTMENT |
|
|
-- |
18,869 |
|
| DEFERRED
COST |
|
6 |
1,755 |
3,070 |
|
| DEPOSIT
AGAINST LEASE FACILITY |
|
|
1,759 |
239 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
| Stock
in trade |
|
7 |
30,074 |
93,520 |
|
| Trade
debts - unsecured considered good |
|
|
6,835 |
169 |
|
| Advances, deposits, prepayments
and |
|
|
| other
receivables |
|
8 |
36,364 |
9,508 |
|
| Cash
and bank balances |
|
9 |
20,435 |
93,468 |
|
|
|
|
-------- |
-------- |
|
|
|
|
93,708 |
196,665 |
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of lease facilities |
|
16 & 17 |
11,155 |
619 |
|
| Short
term loan-secured |
|
|
-- |
62,384 |
|
| Finance
under mark-up arrangements - secured |
10 |
897 |
9,784 |
|
| Creditors,
accrued expenses and other liabilities |
11 |
60,612 |
73,781 |
|
| Taxation |
|
12 |
1,781 |
539 |
|
|
|
|
-------- |
-------- |
|
|
|
|
74,445 |
147,107 |
|
|
|
-------- |
-------- |
|
| NET
CURRENT ASSETS |
|
19,263 |
49,558 |
|
|
|
|
|
|
-------- |
-------- |
|
|
|
|
513,350 |
187,497 |
|
|
|
|
======== |
======== |
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
| Share
capital |
|
|
13 |
100,000 |
100,000 |
|
| Share
premium |
|
|
40,000 |
40,000 |
|
| Unappropriated
profit |
|
|
29,654 |
21,933 |
|
|
-------- |
-------- |
|
|
|
|
169,654 |
161,933 |
|
|
| ADVANCE
AGAINST EQUITY |
|
|
14 |
39,040 |
-- |
|
| LONG
TERM DEPOSITS |
|
|
15 |
10,611 |
6,111 |
|
| LOANS
FROM DIRECTORS |
|
|
|
-- |
18,869 |
|
| LONG
TERM LOANS - SECURED |
|
|
16 |
96,000 |
-- |
|
| LIABILITY
AGAINST ASSETS SUBJECT TO |
|
|
|
|
| FINANCE
LEASE |
|
|
17 |
198,045 |
584 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
|
18 |
-- |
-- |
|
|
-------- |
-------- |
|
|
|
|
513,350 |
187,497 |
|
|
|
|
======== |
======== |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
PROFIT AND LOSS ACCOUNT |
|
|
Eighteen months period
ended 30th June, 1996 |
|
|
|
|
|
|
Eighteen months |
|
|
|
period ended |
Year ended |
|
|
|
30 June |
31 December |
|
|
|
|
1996 |
1994 |
|
|
|
Note |
Rs. 000 |
Rs. 000 |
|
|
|
|
|
| Sales
and services |
|
19 |
160,120 |
107,648 |
|
| Less:
Commission |
|
|
(132) |
(490) |
|
|
|
|
|
-------- |
-------- |
|
|
|
159,988 |
107,158 |
|
| Cost
of sales |
|
20 |
131,012 |
89,316 |
|
|
|
|
-------- |
-------- |
|
| GROSS
PROFIT |
|
|
28,976 |
17,842 |
|
|
|
|
|
|
| OTHER
INCOME |
|
21 |
22,005 |
7,087 |
|
|
|
-------- |
-------- |
|
|
|
|
50,981 |
24,929 |
|
| OPERATING
EXPENSES |
|
|
|
| Selling,
administration and general |
22 |
22,106 |
10,983 |
|
| Financial |
|
23 |
18,597 |
l2,473 |
|
| Amortisation
of shares issue expenses |
|
1,315 |
877 |
|
|
|
-------- |
-------- |
|
|
|
|
|
42,018 |
24,333 |
|
|
|
|
-------- |
-------- |
|
| PROFIT
BEFORE TAXATION |
|
8,963 |
596 |
|
| PROVISION
FOR TAXATION |
|
12 |
(1,242) |
(539) |
|
|
|
|
-------- |
-------- |
|
| PROFIT
AFTER TAXATION |
|
|
7,721 |
57 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
21,933 |
21,876 |
|
|
|
-------- |
-------- |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
|
29,654 |
21,933 |
|
|
======== |
======== |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
CASH FLOW STATEMENT |
|
|
Eighteen months period
ended 30th June, 1996 |
|
|
|
|
Eighteen months |
|
|
|
period ended |
Year ended |
|
|
|
|
30 June |
31 December |
|
|
|
|
1996 |
1994 |
|
|
Note |
Rs. 000 |
Rs. 000 |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
|
8,963 |
596 |
|
| Adjustments
for |
|
|
|
|
| Depreciation |
|
|
2,769 |
1,528 |
|
| Amortisation
of shares issue expenses |
|
1,315 |
877 |
|
| Interest,
mark-up and lease finance charges |
17,229 |
11,895 |
|
| Profit
on term deposit |
|
|
(3,180) |
(4,774) |
|
| Dividend
income |
|
|
(8,700) |
-- |
|
| Profit
on disposal of fixed assets |
|
(290) |
(173) |
|
|
-------- |
-------- |
|
|
|
18,106 |
9,949 |
|
| (Increase)/decrease
in current assets |
|
|
| Stock
in trade |
|
|
63,446 |
67,467 |
|
|
| Trade
debts |
|
|
(6,666) |
1,968 |
|
|
| Advances, deposits, prepayments
and |
|
(15,200) |
3,383 |
|
|
| other
receivable |
|
| (Decrease)
in current liabilities |
|
| Creditors,
accrued expenses and other liabilities |
(12,812) |
(48,237) |
|
|
|
-------- |
-------- |
|
|
|
|
28,768 |
24,581 |
|
| Interest,
mark-up and lease finance charges paid |
(17,420) |
(8,952) |
|
| Income
tax paid |
|
(11,656) |
(3,297) |
|
|
|
-------- |
-------- |
|
| Net
cash flows from operating activities |
|
17,798 |
22,281 |
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Capital
expenditure |
|
|
(322,462) |
(24,549) |
|
| Lease
deposits paid |
|
|
(1,520) |
-- |
|
| Proceeds
from disposal of fixed assets |
|
290 |
403 |
|
| Dividend
income |
|
|
8,700 |
-- |
|
| Payment
for investments |
|
|
(36,250) |
(18,869) |
|
| Interest
received on term deposit |
|
3,180 |
4,479 |
|
|
-------- |
-------- |
|
| Net
cash flows from investing activities |
|
(348,062) |
(38,536) |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Short
term loans |
|
|
(62,384) |
6,401 |
|
|
| Long
term loan |
|
|
106,877 |
-- |
|
|
| Loans
from directors |
|
|
(18,869) |
18,869 |
|
|
| Advance
against equity |
|
|
39,040 |
-- |
|
|
| Long
term deposits |
|
|
4,500 |
(44) |
|
|
| Finance
lease obtained (Net) |
|
|
196,954 |
(759) |
|
|
|
-------- |
-------- |
|
| Net
cash flows from financing activities |
|
266,118 |
24,467 |
|
|
|
|
|
-------- |
-------- |
|
|
| (DECREASE)/INCREASE
IN CASH AND CASH EQUIVALENTS |
(64,146) |
8,212 |
|
| CASH
& CASH EQUIVALENTS AT BEGINNING OF THE PERIOD |
83,684 |
75,472 |
|
|
|
|
|
-------- |
-------- |
|
|
| CANS
AND CASH EQUIVALENTS AT END OF THE PERIOD 26 |
19,538 |
83,684 |
|
|
|
|
======== |
======== |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
|
NOTES TO THE ACCOUNTS |
|
| Eighteen
months period ended 30th June, 1996 |
|
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| Ghandhara
Nissan Limited was incorporated on 08 August 1981 as a private limited
company |
|
| and
subsequently converted as a public limited company on 24 May 1992. The
company's |
|
| shares
are listed on Karachi Stock Exchange. The principal activity of the company
is to import |
|
| and
marketing of Nissan vehicles and marketing of Nissan Diesel Trucks assembled
in Pakistan |
|
| by
Ghandhara Nissan Diesel Limited, an associated company. The company has
entered into an |
|
| agreement
with Nissan Motor Company Limited, Japan for the purchase and installation of
plant |
|
| to
assemble Nissan passenger cars and light commercial vehicles in Pakistan. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared on the basis historical cost convention. |
|
|
| 2.2
Fixed capital expenditure |
|
|
| Owned |
|
|
| (a)
Fixed assets are stated at cost less accumulated depreciation. On disposal,
the cost of |
|
| the
assets and the depreciation is adjusted from both the accounts and the
resultant |
|
| gain
or loss is dealt with through profit and loss account. |
|
|
|
|
| (b)
Leasehold land is not depreciated. Depreciation on other assets is charged to
income |
|
| applying
the straight line method at the rates indicated in note 3. |
|
|
| (c)
A full year's depreciation is charged on the assets acquired during the year,
whereas, |
|
| no
depreciation is charged in the year of disposal. |
|
|
| (d)
Normal repairs and maintenance are charged to expenses as and when incurred. |
|
|
|
|
| Leased |
|
| The
company accounts for fixed assets acquired under finance lease by recording
the assets |
|
| and
related liability. The amounts are determined on the basis of discounted
value of mini- |
|
| mum
lease payments and the financial charges are allocated to accounting period
in man- |
|
| ner
so as to provide a constant periodic rate of charge on outstanding liability.
Depreciation |
|
| is
charged to income applying the straight line method at the rates indicated in
note 3. |
|
|
|
|
| 2.3
Capital work-in-progress |
|
| Capital
work in progress is stated at cost. |
|
|
|
|
| 2.4
Deferred cost |
|
| Deferred
cost comprises shares issue expenses and are amortised over five years from
the date |
|
| these
were incurred. |
|
|
| 2.5
Long-term investments |
|
| Long-term
investments are stated at cost except where there 'is a decline other than
temporary |
|
| in
the value of these investments. In such instances, these are stated at
reduced values after |
|
| providing
for diminution in the value of investments. |
|
|
|
|
| 2.6
Stock-in-trade |
|
| Stocks
except stock-in-transit are valued at the lower of cost and net realisable
value. Cost is |
|
| determined
on weighted average basis. Net realisable value signifies selling price in
the ordi- |
|
| nary
course of business less expenses incurred necessarily to make the sale.
Stock-in-transit is |
|
| valued
at invoice price plus all charges paid thereon to the balance sheet date. |
|
|
|
|
| 2.7
Retirement benefits |
|
|
| The
company operates a recognised provident fund scheme for the benefit of its
employees |
|
| and
contributions are made as per the rules of the fund. |
|
|
| 2.8
Taxation |
|
|
| Taxation
charge in the accounts is based on taxable income. The company accounts for |
|
| deferred
taxation arising on major timing differences using the liability method but
does not |
|
| account
for net deferred tax debit balance. |
|
|
| 2.9
Foreign currencies |
|
|
| Foreign
currency transactions are translated into Pak rupees at exchange rates
prevailing on the |
|
| date
of transaction. Assets and liabilities in foreign currencies are translated
at the rates of |
|
| exchange
prevailing at the balance sheet date. Exchange gains and losses are included
in the |
|
| income
currently. |
|
