| Pakistan Services Ltd |
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|
(Audited Accounts 1995-96) |
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| C
0 N T E N T S |
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| Pakistan
Services Limited |
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| Corporate
Profile/Information |
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4 |
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| Notice
of Meeting |
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5 |
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| Chairman's
Review |
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7 |
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| Directors'
Report |
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10 |
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| Financial Highlights |
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11 |
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| Auditors'
Report to the Members |
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12 |
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| Balance
Sheet |
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14 |
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| Profit
and Loss Account |
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16 |
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| Statement
of Changes in Financial Position |
17 |
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| Notes
to the Accounts |
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18 |
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| Pattern
of Shareholdings |
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42 |
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| Pearl
Continental Hotels (Private) Limited |
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| Corporate
Profile/Information |
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46 |
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| Directors'
Report |
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47 |
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| Auditors'
Report to the Members |
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47 |
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| Balance Sheet |
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48 |
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| Profit
and Loss Account |
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49 |
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| Statement
of Changes in Financial Position |
50 |
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| Notes
to the Accounts |
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51 |
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| Pattern
of Shareholdings |
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53 |
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| Trans
Air Travels (Private) Limited |
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| Directors'
Report |
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55 |
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| Auditors'
Report to the Members |
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55 |
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| Balance
Sheet |
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56 |
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| Profit
and Loss Account |
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58 |
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| Statement
of Changes in Financial Position |
59 |
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| Notes
to the Accounts |
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60 |
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| Pattern
of Shareholdings |
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64 |
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| Pearl
Tours and Travels (Private) Limited |
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| Directors'
Report |
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67 |
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| Auditors'
Report to the Members |
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67 |
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| Balance
Sheet |
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68 |
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| Profit
and Loss Account |
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|
70 |
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| Statement
of Changes in Financial Position |
71 |
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| Notes
to the Accounts |
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72 |
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| Pattern
of Shareholdings |
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77 |
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| Bhurban
Resorts (Private) Limited |
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| Directors'
Report |
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79 |
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| Auditors'
Report to the Members |
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79 |
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| Balance
Sheet |
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80 |
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| Profit
and Loss Account |
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81 |
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| Statement
of Changes in Financial Position |
82 |
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| Notes
to the Accounts |
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83 |
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| Pattern
of Shareholdings |
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84 |
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| Pearl
Continental (Overseas) Limited |
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| Directors'
Report |
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7 |
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| Auditors'
Report to the Members |
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87 |
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| Balance
Sheet |
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|
88 |
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| Profit and Loss Account |
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89 |
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| Notes
to the Accounts |
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90 |
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| Pakistan
Services Limited |
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Corporate
Profile/Information |
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| Pearl
Continental Hotels, a chain owned and operated by |
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| Pakistan
Services Limited, sets the international standard for |
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| quality
hotel accommodation in South Asia. |
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| The
Company manages 5 luxury hotels in major cities of |
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| Pakistan
comprising 1350 rooms including expansion of Lahore |
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| property
and employing approximately 1800 persons with |
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| registered
office in Karachi, Pakistan. |
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| As
per the annexed accounts, PSL reports tangible fixed assets |
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| value
over Rs. 2080 million and gross revenues exceeded |
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| Rs.
1,846 million for the eighteen month period ended June 30, |
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| 1996. |
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| Board
of Directors |
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| Mr.
Sadruddin Hashwani |
Chairman |
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| Mr.
Murtaza Hashwani |
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| Ms.
Nadia Hashwani |
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| Mr.
Stephen Potter |
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| Mr.
M. Asadullah Sheikh |
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| Mr.
S. Faiq Hussain |
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| Mr.
Rajab All Panjwani |
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| Mr.
Maudood Ahmad Lodhi |
Chief Executive |
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| Company
Secretary |
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| Mr.
Mansoor Akbar All |
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| Owners
and Operators of |
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| Pearl-Continental
Hotels, |
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| Karachi,
Lahore, Rawalpindi, |
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| Peshawar
and Bhurban |
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| Bankers |
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| American
express Bank Limited |
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| Bank
of America |
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| Crescent
Investment Bank Limited |
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| Habib
Bank Limited |
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| Habib
Credit & Exchange Bank Limited |
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| Muslim
Commercial Bank |
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| National
Development Finance Corporation |
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| Schon
Bank Limited |
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| United
Bank Limited |
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| Registered
Office |
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| Pearl-Continental
Hotel |
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| Club Road, |
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| Karachi-75530 |
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| Pakistan |
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| Tel
: 021-5685526 |
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| TIx
: 21259 HOTEL PK |
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| Fax
: 021-5683419/5683116 |
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| Auditors |
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| Taseer
Hadi Khalid & Company |
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| Chartered
Accountants |
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| First
Floor, Sheikh Sultan Trust Building No.2 |
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| Beaumont
Road |
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| Karachi-75530 |
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| Pakistan |
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|
Notice of Meeting |
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| NOTICE
IS HEREBY GIVEN that the 37th Annual General |
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| Meeting
of PAKISTAN SERVICES LIMITED will be held on |
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| Tuesday
December, 03 1996 at 12:30 p.m. at Pearl Continental |
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| Hotel,
Club Road, Karachi to transact the following business:- |
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| 1.
To confirm the Minutes of the Extra Ordinary General |
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| Meeting
held on 25th March, 1996. |
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|
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| 2.
To receive and adopt the audited accounts together with |
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| Directors'
and Auditors' Report thereon, for the 18 months |
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| period
ended 30th June, 1996. |
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| 3.
To appoint auditors for the year 1996-97 and fix their |
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| remuneration. |
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| 4.
Any other business with the permission of the Chairman. |
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| i)
A member entitled to attend and vote at the Annual |
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| General
Meeting is entitled to appoint another |
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| member
as a proxy to attend and vote on the |
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| member's
behalf. Proxies must be deposited with the |
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| Company
note less than 48 hours before the time |
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| appointed
for holding the meeting. |
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| ii)
The Share Transfer Books of the Company will |
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| remain
closed from Tuesday 26th November, 1996 to |
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| Tuesday
3rd December, 1996 (both days inclusive). |
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| iii)
Shareholders are requested to notify the Company of |
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| any
change in their address. |
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|
Chairman's Review |
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| I
feel privileged to welcome you all to the 37th Annual General |
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| Meeting
and to present to you a review of the performance of |
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| your
Company during the 18 months period ended June 30, |
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| 1996.
This time we are meeting with a longer gap due to the |
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| change
in accounting year which was made mandatory by the |
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| Finance
Act 1995-96. |
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| It
gives me pleasure to report that period under review remained |
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| as
successful as before. Although the Government continued its |
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| policy
to encourage tourism but due to over all slump in the |
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| economy,
time to time devaluation of Pak Rupee and |
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| unsatisfactory
law and order situation, particularly in Karachi and |
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| in
the whole of Punjab province, have adversely affected the |
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| performance
of your company. However, the commercial |
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| expediency
of the management and combined efforts of the Pearl |
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| family
to a large extent overcame the negative impact on the |
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| Company's
performance. |
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| I
am confident that the members will be glad to note the |
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| achievements
of targets. The turnover went upto Rs. 1,846 |
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| million
during the period under review as compared to |
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| Rs.
1,033 million in 1994 by registering an average growth of 19 |
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| percent
per annum. Inspire of high turnover, the profitability |
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| could
not keep pace with the turnover due to higher financial |
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| cost
which included proportionate financial cost relating to |
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| Lahore
expansion project which was partially made operational |
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| during
the period. Profit before tax declined to Rs. 66 million for |
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| the
period as compared to Rs. 94 million for 1994. |
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| SALES
- ROOMS |
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| Rooms
sales during the period under discussion registered an |
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| average
increase of 13% per annum by recording it at Rs.845 |
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| million
as compared to Rs.498 million in 1994. You would be |
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| pleased
to know that at the event of World Cup 1996, Expansion |
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| Block
of your Pearl Continental Hotel Lahore was made available |
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| to
the guests from abroad. Although, the expansion project was |
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| not
complete at that stage but it was partially opened with 181 |
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| new
rooms. The response of the Customers is encouraging and |
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| the
perception regarding the product has been extremely |
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| positive. |
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| SALES
- FOOD & BEVERAGE |
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| There
is tremendous increase of 29% in food and beverage sale |
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| for
18 months. It is also Rs.845 million for 18 months while in |
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| 1994
it stood at Rs. 437 million. Credit goes to our quality food |
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| and
tasteful menus. Bukhara restaurant is the new addition at |
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| Pearl
Continental Hotel Rawalpindi after its successful operation |
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| at
Pearl Continental Hotel Lahore. Due to delicacies of food, |
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| repeat
customer has become our customary. |
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| COST
OF SALES |
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| Cost
of sales during the period works out at Rs. 1,284 million as |
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| compared
to Rs. 700 million in the year 1994. It registered an |
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| average
increase of 22% per annum. High inflationary pressure, |
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| recurring
devaluation of Pak Rupee and numerous revision in |
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| the
Gas & Electricity tariffs chewed off all our efforts of |
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| improvement
in sales and services. Moreover, depreciation and |
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| financial
charges of Lahore expansion project which was |
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| partially
made operational during the period under review |
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| further
added to the cost of sales and reduction in the before tax |
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| profit. |
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| EXPANSION/RENOVATION/REPLACEMENT |
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| Pearl
Continental Hotel Lahore - Expansion: |
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| Expansion
of your Lahore property was made partially |
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| operational
in March 1996 which greatly helped in |
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| accommodating
cricket loving guests, who had come to Lahore |
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| to
witness the World Cup events. The hotel now features the |
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| unparalleled
conference and convention facilities alongwith |
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| latest
hotel equipment. The rooms are larger and most |
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| comfortable
with top of the line fixtures and equipments. |
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| Electronic
locks are an added security feature. The hotel is |
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| expected
to be fully operational before the end of next financial |
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| year. |
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| Existing
Properties |
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| At
Pearl Continental Hotel Peshawar a pillar obstruction free hall |
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| of
6,720 sq.ft. has been added. This is the largest hall in NWFP |
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| and
ideal for conferences, weddings and exhibitions. This huge |
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| hall
which was the demand of city, became operational during |
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| the
current year. |
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| At
Pearl Continental Hotel Karachi, in order to reduce the load on |
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| the
existing elevators. another modern speedy elevator is being |
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| installed
and in advance stage of completion. |
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| In
order to improve the guest services at Pearl Continental Hotel |
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| Bhurban,
staff quarters have been built and provided to |
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| essential
employees adjacent to the hotel building. Helipad has |
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| been
added to make convenient landing of helicopter at the hotel |
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| premises
for the elite and high dignitaries. Copter service is |
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| available
to safari trips as well. |
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|
| At
Pearl Continental Hotel Rawalpindi, rooms have been |
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| refurbished
and executive floors have been added for the better |
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| comforts
of the guests. Bukhara restaurants which has highly |
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| been
appreciated at Pearl Continental Hotel Lahore has been |
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| added
by replacing Tandoori restaurant. New Chiller and Cooling |
|
| Tower
have been installed and commissioned to improve the |
|
| air-conditioning.
Due to these upgradings, Pearl Continental |
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| Hotel
Rawalpindi has shown great improvement in its |
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| occupancy
and guest satisfaction. Now plans are underway for |
|
| the
upgrading/replacing over 28 years old Elevators. |
|
|
| RIGHT
SHARES |
|
|
| During
the period, 13,439,740 right shares were issued at |
|
| Rs.25/-
per share including premium of Rs.15/- per share which |
|
| were
fully paid. The equity was raised to meet the requirement |
|
| of
Lahore expansion and improve the balance sheet structure. |
|
|
| FINANCE |
|
|
| The
company thankfully acknowledges the financial assistance |
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| provided
by IFC, CDC and DEG without which smooth progress |
|
| of
Lahore expansion project would not have been possible. The |
|
| company
is also grateful to Pak Libya Holding company, Pak |
|
| Saudi
Industrial & Agricultural Investment Company Ltd., |
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| Crescent
Investment Bank, National Bank of Pakistan Ltd., |
|
| Habib
Bank Ltd., United Bank Ltd., Muslim commercial Bank |
|
| Ltd.
Bank of America and Schon Bank for their continued help |
|
| to
meet the financial needs of the company. |
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|
| PROSPECTS |
|
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| In
the recent budget 1996-97 the excise duty on room has been |
|
| enhanced
from 10% to 12.5% in line with food & beverage. The |
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| other
services, which were other-wise exempt have been |
|
| subjected
to 12.5% excise duty. Sindh and Punjab Governments |
|
| have
imposed additional tax on hotel services. All these |
|
| measures
will adversely affect the sales. |
|
|
| The
concession of duty free import available under SRO |
|
| 212(I)/91
of March 14, 1991 has since been withdrawn. |
|
| Although
the duties have been slashed to encourage the tourism |
|
| industry,
but the SRO has not yet reached our hands. |
|
|
| The
electricity company continues to treat hotels as commercial |
|
| units
rather industry regarding application of electricity tariff. |
|
|
| High
inflationary trend and weaker rupee value coupled with the |
|
| aforesaid
discriminations with the hotel industry is having |
|
| adverse
effect on the cost of sales. Global economic recession is |
|
| forcing
the companies to review their spending. The limitation on |
|
| purchase
power and change of purchase behavior of our local |
|
| customers
is another challenge to be faced by your company. |
|
|
| As
part of long term plans, the Company is trying its best to |
|
| complete
the Lahore expansion project as early as possible. The |
|
| company
will reap its benefit in the years to come. After |
|
| consolidation
period, your Board have the plans to expand the |
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| Peshawar
property and develop new properties in Gilgit and |
|
| Chitral.
It will also be pleasant to hear that Government of Azad |
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| Kashmir
has given land to build a hotel in Muzaffarabad. |
|
|
| BOARD
OF DIRECTORS |
|
|
| The
following members were elected for a period of three years |
|
| w.e.f.
March 29, 1996 in the Extra Ordinary General meeting |
|
| held
on March 25, 1996. |
|
|
| -
Mr. Sadruddin Hashwani |
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| -
Mr. Murtaza Hashwani |
|
| -
Ms. Nadia Hashwani |
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| -
Mr. M. Asadullah Sheikh |
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| -
Mr. Stephen Potter |
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| -
Mr. Rajab All Panjwani |
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| -
Mr. Maudood Ahmad Lodhi |
|
|
| Mr.
S. Faiq Hussain, being lender director, needs no election, |
|
| hence
continues as director. The Board members place on |
|
| record
their appreciation for the valuable services rendered by |
|
| the
outgoing members namely Mr. M. Saleem and Mr. A. Latif E. |
|
| Galadari
and welcome the new directors on the Board. |
|
|
| SUBSIDIARIES |
|
|
| Pearl
Tours & Travels (Pvt) Ltd. has shown good progress |
|
| during
the period under review. Its revenue and the after tax |
|
| profit
has increased to more than 80% on the average. Trans Air |
|
| Travels
(Pvt) Ltd. has turned around as during this period it |
|
| earned
after tax profit 0.544 million. A branch of Trans Air at |
|
| Islamabad
has been added during the period, which has |
|
| contributed
additional margin. I am pleased to state that, all the |
|
| subsidiaries
are providing the service and assistance to the |
|
| hotel
business of the PSL. Audited accounts and the Directors' |
|
| report
of all the subsidiary companies are annexed to the |
|
| audited
accounts of your company. Pearl Continental (Overseas) |
|
| Ltd.
was facing the recurring losses in Pearl Partnership |
|
| venture.
Your directors reviewed it very seriously and finally |
|
| have
withdrawn from the Pearl Partnership and the joint |
|
| venture
in Embassy Suites Hotel at Boca Raton, USA has been |
|
| sold.
Your directors are confident that the share holding in Pearl |
|
| Continental
(Overseas) Ltd. will also be sold in near future at |
|
| an
appropriate margin. |
|
|
| PERSONNEL |
|
|
| Our
employees who may be rightly termed as the "Pearl Family" |
|
| have
continued to work with highest zeal and devotion. I feel, it |
|
| is
the right forum to acknowledge and appreciate their services. |
|
|
|
|
Directors' Report |
|
|
| Your
directors feel pleasure to present their 37th Annual Report |
|
| alongwith
the audited accounts for the eighteen months period |
|
| ended
June 30, 1996. |
|
|
| Your
Company during the period under review earned a net |
|
| profit
of Rs.66.02 million before providing for taxation. After |
|
| providing
a sum of Rs.36.23 million for taxation, the net profit |
|
| amounts
to Rs. 29.79 million. The unappropriated profit now |
|
| stands
at Rs.66.63 million as tabulated hereunder: |
|
|
| Profit
and Appropriation |
|
(Rs. '000) |
|
|
| Pre-tax
Net profit |
|
66,024 |
|
| Less:
Taxation |
|
|
|
| - Current |
|
13,400 |
|
| -
Prior years |
|
22,834 |
|
|
--------- |
|
|
|
36,234 |
|
|
|
--------- |
|
| Profit
after taxation |
|
29,79O |
|
|
|
|
| Add:
Unappropriated profit brought forward |
36,840 |
|
|
|
--------- |
|
| Available
for appropriation |
|
66,630 |
|
|
|
|
|
| Transfer
to general reserve |
|
- |
|
|
|
--------- |
|
| Unappropriated
profit carried forward |
66,630 |
|
|
|
========= |
|
|
|
| In
view of requirement of funds for the expansion of Pearl |
|
| Continental
Hotel Lahore, your directors have not |
|
| recommended
any dividend for the period ended June 30, 1996. |
|
|
| The
statement of pattern of Shareholdings of your Company as |
|
| on
June 30, 1996 is annexed to the audited accounts. |
|
|
| The
financial conditions, and future outlook; besides, other |
|
| matters
of concern of the Company are discussed in detail in |
|
| Chairman's
Review which forms part of this Report. |
|
|
| The
present auditors M/s. Taseer Hadi Khalid & Company, |
|
| Chartered
Accountants, retire and offer themselves for |
|
| re-appointment. |
|
|
|
|
Financial Highlights |
|
|
|
|
1996* |
1994 |
1993 |
1992 |
1991 |
1990 |
1989 |
1988 |
1987 |
1986 |
|
|
(Rupees'000) |
|
|
|
| Sales
and Services |
1,846,331 |
1,033,273 |
892,008 |
738,390 |
539,056 |
490,060 |
455,462 |
338,275 |
281,947 |
253,032 |
|
|
| Profit
before taxation |
66,024 |
93,959 |
76,147 |
58,262 |
55,904 |
67,200 |
54,190 |
39,633 |
33,345 |
29,080 |
|
|
|
|
| Taxation |
|
36,234 |
30,000 |
21,200 |
19,419 |
20,300 |
24,213 |
19,231 |
14,939 |
14,732 |
10,276 |
|
|
|
|
| Profit
after taxation |
29,790 |
63,959 |
54,947 |
38,843 |
35,604 |
42,986 |
34,959 |
24,694 |
18,613 |
18,804 |
|
|
| %
of profit before |
|
|
| taxation to sales |
3.58 |
9.09 |
8.54 |
7.89 |
10.37 |
13.71 |
11.89 |
11.71 |
11.83 |
11.49 |
|
|
| %
of profit after |
|
|
|
| taxation to sales |
1.61 |
6.19 |
6.16 |
5.26 |
6.60 |
8.77 |
7.67 |
7.29 |
6.60 |
7.43 |
|
|
|
|
|
| Earnings
per share (Rs.) |
1.11 |
4.76 |
7.11 |
5.02 |
6.90 |
8.34 |
6.78 |
4.79 |
3.61 |
3.65 |
|
|
|
|
|
|
| Dividend
- cash(%) |
- |
- |
15.00 |
- |
- |
10.00 |
- |
- |
- |
20.00 |
|
|
|
| Shareholders'
equity |
961,296 |
595,512 |
388,863 |
345,514 |
242,238 |
206,634 |
168,802 |
133,843 |
109,149 |
90,536 |
|
|
|
|
| Long
term debts |
1,022,841 |
614,220 |
320,687 |
224,296 |
178,081 |
101,345 |
30,974 |
39,235 |
33,059 |
33,403 |
|
|
|
|
| Current
liabilities |
1,239,367 |
372,148 |
352,762 |
449,947 |
462,852 |
413,355 |
325,175 |
180,808 |
146,403 |
81,410 |
|
|
| Average
capital |
|
| employed |
|
1,822,342 |
1,211,431 |
784,792 |
610,853 |
466,357 |
314,691 |
222,283 |
178,237 |
150,870 |
137,835 |
|
|
| Operating
assets |
|
|
| (at cost) |
|
1,985,243 |
1,077,243 |
971,264 |
869,129 |
705,141 |
399,020 |
375,326 |
358,271 |
316,515 |
295,196 |
|
|
|
|
| Current
assets |
1,243,369 |
895,205 |
401,015 |
337,104 |
306,127 |
330,216 |
283,360 |
146,644 |
112,169 |
72,678 |
|
|
|
|
| Break-up
value per |
|
|
| share (Rs.) |
35.76 |
44.31 |
50.29 |
44.69 |
46.99 |
40.08 |
32.74 |
25.96 |
21.17 |
17.56 |
|
|
|
|
|
| Market
|
