| United Distributors Pakistan Limited |
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(Annual Report 1995-96) |
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| Contents |
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| Company
Information |
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2 |
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| Notice
of Annual General Meeting |
3 |
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| Report
of the Directors |
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4 |
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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
and Loss Account |
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3 |
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| Cash
Flow Statement |
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9 |
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| Notes
to the Accounts |
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10 |
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| Pattern
of Shareholding |
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25 |
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Company Information |
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| Board
of Directors |
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| Rashid
Abdulla |
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Chief Executive |
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| Khalid
Malik |
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| Tahir
Khaliq |
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| Nasir
Abdulla |
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| Arshad
Anis |
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| Jehanzeb
Khan |
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Executive Director |
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| Syed
Manzar Alam |
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N.I.T. Nominee |
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| Company
Secretary |
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| Anjum
Bashir |
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| Auditors |
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| Sidat
Hyder Qamar Maqbool & Co. |
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| Chartered
Accountants |
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| Registered
Office |
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| 9th
Floor, N.I.C. Building, |
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| Abbasi
Shaheed Road, Karachi. |
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| Registrar |
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| Gangjees
Investment & Finance Consultants, |
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| Room
No. 513, Clifton Centre, Kehkashan, Block 5, Clifton, Karachi-75600. |
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| Notice
of Annual General Meeting |
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| NOTICE
is hereby given that the 14th Annual General Meeting of UNITED DISTRIBUTORS
PAKISTAN LIMITED |
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| will
be held at Hotel Holiday-lnn Crowne Plaza, Karachi on Wednesday, October30,
1996 at 11 a.m. to |
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| transact
the following business: |
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| ORDINARY
BUSINESS |
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| 1.
To confirm the minutes of the Extraordinary General Meeting held on March 24,
1996. |
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| 2.
To receive, consider and approve the audited accounts of the Company for the
eighteen months period |
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| ended
June 30, 1996, together with the Directors' and Auditors' reports thereon. |
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| 3.
To appoint auditors and fix their remuneration for the current year. The
present auditors M/S. SIDAT |
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| HYDER
QAMAR MAQBOOL & CO. Chartered Accountants, retire and being eligible,
offer themselves for |
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| re-appointment. |
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| SPECIAL
BUSINESS |
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| 4.
To fix the remuneration of the full time working Director. |
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| 5.
To approve the issue of bonus shares in the proportion of one share for every
five shares held (20%) as |
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| recommended
by the Board of Directors and, if thought fit, to pass with or without
modification(s) the |
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| following
resolution as an ordinary resolution. |
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| "RESOLVED
that a sum of Rs. 10,000,000/- out of the unappropriated profits of the
Company be capitalized |
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| and
be applied towards the issue of 1,000,000 ordinary shares of Rs. 10 each and
allotted as fully paid-up |
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| bonus
shares to the members whose names appear in the register of members at the
close of business on |
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| October
22, 1996, in the proportion of one share for every five shares held and that
such new shares shall |
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| rank
pari-passu with the existing ordinary shares." |
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| "FURTHER
RESOLVED that in the event of any shareholder holding less than five shares
or number of |
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| shares
which is not an exact multiple of five, the Directors be and are hereby
authorised to sell in the stock |
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| market
such fractional entitlement and to pay the proceeds of sale when realized to
a recognized |
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| charitable
institution as may be selected by the Directors". |
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| 6.
To transact any other business with the permission of the Chair. |
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By order of the Board |
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| Karachi:
September 30, 1996. |
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ANJUM BASHIR |
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|
Company Secretary |
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| NOTES: |
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| 1.
The share transfer books of the Company will remain closed from October
23,1996 to October 30,1996 (both |
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| days
inclusive). Transfers received in order at the office of our Registrar
GANGJEES INVESTMENT & |
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| FINANCE
CONSULTANTS, ROOM NO. 513, CLIFTON CENTRE, KEHKASHAN, BLOCK 5, CLIFTON |
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| KARACHI-75600,
by the close of business on Tuesday October 22, 1996 will be treated in time
for the |
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| purpose
of determining entitlement to bonus shares. |
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| 2.
A member entitled to attend and vote at this meeting may appoint a proxy to
attend and vote on his/her |
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| behalf
A proxy need not be a member of the Company. Proxies in order to be effective
must be received by |
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| the
Company's Registrar not less than 48 hours before the meeting. |
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| Statement
under section 160 of The Companies Ordinance, 1984 |
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| Item 4 |
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| Mr.
Jehanzeb Khan, a full time working Director, joined the Board on March
24,1996. Members approval will be |
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| sought
at the forthcoming Annual General Meeting for the holding of office of profit
and the payment of |
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| remuneration
to the said Director. Mr. Jehanzeb Khan is interested in this business only
to the extent of his |
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| remuneration. |
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| For
this purpose it is intended to propose that the following resolution be
passed as an ordinary resolution. |
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| "RESOLVED
that the Chief Executive of the Company be and is hereby authorised to fix
remuneration of |
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| Mr.
Jehanzeb Khan, a full time working Director, not exceeding rupees one million
five hundred thousand per |
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| annum
plus Company's maintained car and other benefits as per Company's policy. |
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| Item 5 |
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| In
the opinion of the Directors, the financial position of the Company justifies
a bonus issue in the ratio of 1: 5. |
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| The
Directors are interested in this business only to the extent of their
entitlement to bonus shares as |
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| shareholders. |
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|
Report of the Directors |
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| The
Directors take pleasure in submitting their report and audited accounts of
the Company for |
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| the
eighteen months period ended June 30, 1996. |
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| FINANCIAL
RESULTS |
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| The
net profit of the Company for the period before taxation |
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50,029,951 |
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| Provision
for taxation - current period |
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18,900,000 |
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- prior years' |
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11,200,000 |
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---------- |
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30,100,000 |
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| Profit
after taxation |
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|
19,929,951 |
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| Profit
brought forward from last year |
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170,936 |
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---------- |
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| Profit
available for appropriation |
|
20,100,887 |
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| Interim
dividend Rs. 1.50 per share |
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7,500,000 |
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| Reserve
for issue of bonus shares |
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10,000,000 |
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---------- |
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17,500,000 |
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---------- |
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| Accumulated
profit carried forward |
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Rupees |
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2,600,887 |
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========= |
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| REVIEW
OF OPERATIONS |
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| In
the eighteen month period ended June 30, 1996 the Company's turnover was Rs.
506.4 million |
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| compared
to Rs. 507.8 million in the twelve month's of calendar 1994. |
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| Your
Company had introduced a new pesticide during the year which was positioned
to |
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| capitalize
on the opportunity for that chemical. With the increased range of "UDPL
brand" |
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| crop
protection chemicals, the Company was able to establish a foothold into the
agrochemicals |
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| business.
Additionally, your Company successfully negotiated a one-year distribution
with |
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| DowElanco
for the year, which resulted in substantial incremental cross margins. |
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| The
cotton crop continues to be the main user of agrochemicals in Pakistan, and
last years' high |
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| cotton
production of over 10 million bales testifies to the fact that it was a good
crop which did |
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| not
suffer an unmanageable pest situation. While overall pest pressure was low
timely pesticide |
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| sprays
controlled the situation, which was also helped by favourable weather
conditions. |
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| With
the Company entering the distribution services business, an amount of Rs.
24.3 million has |
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| been
added to income as distribution fees during the year being reported. While
most of this |
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| goes
towards setting off actual distribution expenses, it also has an element of
profit for your |
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| Company. |
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| The
past fiscal year of eighteen months included one and a half seeds selling
seasons, which |
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| added
to profitability. While the seeds business carries with it the uncertainties
of any business |
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| dependent
upon the vagaries of nature, it has developed into a very important portion
of your |
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| Company's
overall business, in terms to top line as well as bottom line. |
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| The
Solar business has been renamed Power Systems, to more accurately describe
its revised |
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| remit
of expanding into affiliated areas such as industrial batteries. During the
year the industrial |
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| batteries
business made a successful beginning by recording excellent sales. The Power
Systems |
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| business
continues to remain heavily dependent on government tenders, and as is the
case in |
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| this
industry, margins remain low due to competitive pressures. |
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| FUTURE
OUTLOOK |
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| With
the agrochemicals business dominating your Company's portfolio, it will
continue to |
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| remain
in prime focus, and efforts will be made to strengthen it. This will be done
by widening |
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| the
sales range by adding crop protection products that fit in well with Company
strengths and |
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| which
update the range to replace products facing obsolescence. With price
competition from |
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| generic
companies becoming a major factor in selling viable volumes, alternate
strategies are |
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| being
evaluated to create usable opportunities. The forecast for the cotton crop is
favourable, and |
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| individual
product performance will be dependent on pest pressure, timing and
composition. |
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| The
Company has reinforced its distribution function to provide a high level of
service to |
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| partners
who utilize it. This has allowed distribution costs to be spread over a high
volume, and |
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| these
costs to be shared. Improvements in this function are planned over the next
few years. |
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| The
seeds business is progressing very well with your Company becoming a dominant
player in |
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| the
single cross corn market segment with superior hybrid varieties from Pioneer.
Your |
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| Company
is studying options to increase its seeds business by adding complimentary
lines to its |
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| existing
business. |
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| Power
Systems will continue to be based on solar system sales, but will also
compete in the |
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| industrial
batteries market. Sales are expected to be generated largely from government
tenders, |
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| and
as such subject to some degree of uncertainty. |
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| The
Company now has a Mission Statement defining its Mission and Values. It will
be around |
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| this
that it will evolve its strategic and organizational plans. |
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| HOLDING
OF SHARES |
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| The
pattern of holding of shares is also shown in the report. |
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| AUDITORS |
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| The
retiring auditors, Messrs. Sidat Hyder Qamar Maqbool & Co., being
eligible, offer themselves |
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| for
reappointment. |
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| ACKNOWLEDGMENT |
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| The
Directors of your Company take great pleasure in recording their appreciation
of the fine |
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| work
put in by all Company staff during the last eighteen months. |
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|
| RASHID
ABDULLA |
|
JEHANZEB KHAN |
|
| Chief
Executive |
|
Director |
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| Karachi:
September 30, 1996 |
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|
|
| Auditors'
Report to the Members |
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| We
have audited the annexed balance sheet of UNITED DISTRIBUTORS PAKISTAN |
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| LIMITED
as at 30 June 1996 and the related profit and loss account and statement of |
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| changes
in financial position, together with the notes thereon, for the period then
ended |
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| 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, |
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| 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: |
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| (i)
the balance sheet and profit and loss account, together with the notes there |
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| on,
have been drawn up in conformity with the Companies Ordinance, 1984 |
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| and
are in agreement with the books of account and are further in accordance |
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| with
accounting policies consistently applied; |
|
|
|
| (ii)
the expenditure incurred during the period was for the purpose of the |
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| Company's
business; and |
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|
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| (iii)
the business conducted, investments made and the expenditure incurred dur |
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| ing
the period 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
explana |
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| tions
given to us, the balance sheet, profit and loss account and the statement of |
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| changes
in financial position, together with the notes forming part thereof, give |
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| 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 |
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| affairs
as at 30 June 1996 and of the profit and the changes in financial position
for |
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| the
period then ended; and |
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|
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| (d)
in our opinion, zakat deductible at source under the Zakat and Ushr
Ordinance, |
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| 1980
was deducted by the Company and deposited in the Central Zakat Fund |
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| established
under Section 7 of that Ordinance. |
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|
SIDAT HYDER QAMAR MAQBOOL
& CO. |
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| KARACHI:
October 02. 1996 |
Chartered Accountants |
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|
Balance Sheet |
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As at 30 June 1996 |
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30 June |
31 December |
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|
Note |
1996 |
1994 |
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| CAPITAL
AND RESERVES |
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| Authorised |
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| 10,000,000
(1994: 10,000,000) ordinary |
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| shares
of Rs. 10/- each |
|
100,000,000 |
100,000,000 |
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|
========== |
========== |
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| Issued,
subscribed and paid-up |
|
3 |
50,000,000 |
50,000,000 |
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| Reserves |
|
4 |
32,600,887 |
20,170,936 |
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|
---------- |
---------- |
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|
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|
82,600,887 |
70,170,936 |
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| LONG-TERM
LIABILITIES |
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| Liabilities
against assets subject to |
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|
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| finance
lease |
|
5 |
5,640,158 |
4,928,544 |
|
| CURRENT
LIABILITIES |
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|
| Short-term
loan and running finance |
|
6 |
92,268,315 |
85,059,580 |
|
| Creditors,
accrued and other liabilities |
7 |
192,660,275 |
113,515,884 |
|
| Current
portion of finance lease |
|
5 |
3,201,538 |
3,501,772 |
|
| Taxation
- net |
|
1,680,784 |
- |
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| Proposed
dividend |
|
- |
10,000,000 |
|
|
---------- |
---------- |
|
|
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|
289,810,912 |
212,077,236 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
8 |
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|
---------- |
---------- |
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|
Rupees |
378,051,957 |
287,176,716 |
|
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|
========== |
========== |
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| FIXED
ASSETS - TANGIBLE |
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| Operating
fixed assets |
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|
9 |
5,102,138 |
3,937,512 |
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| Assets
subject to finance lease |
|
10 |
8,333,390 |
10,165,809 |
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|
---------- |
---------- |
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|
|
|
|
|
13,435,528 |
14,103,321 |
|
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|
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| LONG-TERM
INVESTMENT-AT COST |
|
11 |
22,515,930 |
22,515,930 |
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| LONG-TERM
ADVANCES AND DEPOSITS |
|
12 |
1,462,636 |
932,519 |
|
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|
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| CURRENT
ASSETS |
|
|
|
|
| Stock-in-trade |
|
13 |
79,792,818 |
37,674,506 |
|
| Trade
debts |
|
14 |
20,318,523 |
30,900,319 |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables |
|
15 |
37,408,125 |
42,674,075 |
|
| Cash
and bank balances |
|
16 |
203,118,397 |
138,376,046 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
340,637,863 |
249,624,946 |
|
|
|
|
|
---------- |
---------- |
|
|
Rupees |
378,051,957 |
287,176,716 |
|
|
|
========== |
========== |
|
| AUDITORS'
REPORT ANNEXED |
|
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| These
accounts should be read with the annexed notes. |
|
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|
|
|
|
|
|
Profit and Loss Account |
|
|
|
|
For the period ended 30
June 1996 |
|
|
|
|
|
|
|
|
|
|
|
For Eighteen |
For Twelve |
|
|
|
|
|
months ended |
months ended |
|
|
|
|
Note |
30 June 1996 |
31 December 1994 |
|
|
|
|
|
|
| Sales |
|
|
17 |
|
506,429,761 |
507,786,719 |
|
|
| Cost
of goods sold |
|
18 |
|
408,246,281 |
427,227,433 |
|
|
|
|
|
|
|
---------- |
---------- |
|
| Gross
profit |
|
|
|
98,183,480 |
80,559,286 |
|
|
|
|
|
|
| General
and administration expenses |
19 |
|
22,819,453 |
11,961,376 |
|
| Selling
and distribution expenses |
20 |
|
66,086,942 |
43,629,702 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
88,906,395 |
55,591,078 |
|
|
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
9,277,085 |
24,968,208 |
|
| Other
income / (charges) |
|
21 |
|
75,357,443 |
24,376,027 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
84,634,528 |
49,344,235 |
|
|
|
|
|
|
|
| Financial
charges |
|
22 |
|
34,604,577 |
22,958,161 |
|
| Provision
for diminution in value of investment |
|
- |
3,878,250 |
|
|
|
|
---------- |
---------- |
|
|
|
34,604,577 |
26,836,411 |
|
|
|
|
|
---------- |
---------- |
|
|
|
| Profit
for the period before taxation |
|
50,029,951 |
22,836,411 |
|
|
|
|
|
|
|
|
|
| Provision
for taxation - current period 23 |
|
18,900,000 |
8,700,000 |
|
| -
prior years' |
|
|
|
|
11,200,000 |
- |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
|
30,100,000 |
8,700,000 |
|
|
|
|
---------- |
---------- |
|
|
| Profit
after taxation |
|
19,929,951 |
13,807,824 |
|
|
| Accumulated
profit brought forward |
|
|
170,936 |
363,112 |
|
|
|
|
---------- |
---------- |
|
|
| Accumulated
profit available for appropriation |
|
20,100,887 |
14,170,936 |
|
|
| Appropriations: |
|
|
|
|
| Interim
dividend Rs. 1.50 (1994: Nil) per share |
|
7,500,000 |
- |
|
| Proposed
final dividend Nil (1994: Rs. 2/-) per share |
- |
10,000,000 |
|
|
| Transfer
to reserve for issue of bonus shares |
|
10,000,000 |
- |
|
| Transfer
to general reserve |
|
- |
4,000,000 |
|
|
|
---------- |
---------- |
|
|
|
17,500,000 |
14,000,000 |
|
|
---------- |
---------- |
|
|
| Accumulated profit carried
forward |
|
Rupees |
2,600,887 |
170,936 |
|
|
========== |
========== |
|
| These
accounts should be read with the annexed notes. |
|
|
|
|
|
|
Cash flow Statement |
|
|
|
For the period ended 30
June 1996 |
|
|
|
|
|
30 June |
31 December |
|
|
|
|
1996 |
1994 |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
| Profit
after taxation |
|
19,929,951 |
13,807,824 |
|
| Adjustment
to reconcile profit to net cash provided |
|
|
|
| by
operating activities |
|
|
|
| Depreciation |
|
8,141,391 |
5,821,452 |
|
|
| Provision
for diminution of investment |
|
- |
3,878,250 |
|
| Profit
on deposit account |
|
(46,659,080) |
(22,326,616) |
|
| Provision
for taxation |
|
30,100,000 |
8,700,000 |
|
| Gain
on sale of fixed assets |
|
(4,685,198) |
(1,879,819) |
|
|
|
---------- |
---------- |
|
| Net
cash provided by operating activities |
|
6,827,064 |
8,001,091 |
|
| (Increase)
/ decrease in current assets |
|
(29,180,115) |
87,103,679 |
|
| Increase
/ (decrease) in current liabilities |
|
86,137,131 |
(87,785,518) |
|
|
|
|
---------- |
---------- |
|
|
| Net
cash from operating activities before income tax |
63,784,080 |
7,319,252 |
|
|
| Income
tax paid |
|
(25,509,667) |
(19,011,434) |
|
|
|
|
|
---------- |
---------- |
|
|
| Net
cash used in operating activities |
|
38,274,413 |
(11,692,182) |
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Capital
expenditure |
|
(2,281,061) |
(921,510) |
|
|
|
| Cash
paid under self financing scheme |
|
(491,150) |
(417,151) |
|
| Cash
received under sales and lease back arrangement |
- |
882,051 |
|
|
| Cash
received against return of assets |
|
7,997 |
- |
|
| Long-term
investment |
|
- |
(3,143,480) |
|
|
| Long-term
advances and deposits - net |
|
(530,117) |
17,186 |
|
| Profit
on deposit account |
|
|
46,659,080 |
22,326,616 |
|
| Proceeds
from sale of fixed assets |
|
|
6,684,800 |
2,730,500 |
|
| insurance
claim received |
|
|
- |
52,809 |
|
|
|
|
|
| Net
cash from investing activities |
|
|
50,049,549 |
21,527,021 |
|
|
|
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
|
|
| Proceeds
from issue of share capital |
|
|
- |
6,417,610 |
|
|
| Payments
for assets subject to finance lease |
|
(6,297,606) |
(4,284,722) |
|
|
| Payment
of dividend |
|
|
|
(17,284,005) |
(8,657,684) |
|
|
|
|
|
|
|
|
| Net
cash used in financing activities |
|
|
(23,581,611) |
(6,524,796) |
|
|
|
|
|
---------- |
---------- |
|
|
| Net
increase / (decrease) in cash activities |
|
64,742,351 |
3,310,043 |
|
| C |
