| PAKISTAN HOTELS DEVELOPERS LTD. |
|
|
|
|
|
|
|
|
| (OWNERS
AND OPERATORS OF HOLIDAY INN) |
|
| ANNUAL
REPORT 1997 |
|
|
| CONTENTS |
|
| COMPANY
INFORMATION |
|
| NOTICE
OF MEETING |
|
|
| CHAIRMAN'S
REVIEW |
|
| REPORT
OF DIRECTORS |
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
& LOSS ACCOUNT |
|
|
| CASH
FLOW STATEMENT |
|
| NOTES
TO THE ACCOUNTS |
|
| PATTERN
OF SHARES HOLDING |
|
|
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| S.
FEROZUDDIN BAWEJA - CHAIRMAN |
|
| MUZAFFAR
F. BAWEJA - CHIEF EXECUTIVE |
|
| MASROOR
F. BAWEJA |
|
| ZAHEER
F. BAWEJA |
|
| ZUBAIR
F. BAWEJA |
|
| SHAHIDA
BEGUM |
|
| AAMIR
F. BAWEJA |
|
| NAVEED
F. BAWEJA |
|
|
| BANKERS: |
|
| UNITED
BANK LIMITED |
|
| MUSLIM
COMMERCIAL BANK LIMITED |
|
| PRUDENTIAL
COMMERCIAL BANK LIMITED |
|
|
| SECRETARY |
|
| S.
N. RAHMAN |
|
|
| LEGAL
ADVISORS |
|
| RAHMAT
ELAHI & CO. |
|
| 3rd
FLOOR, NIAZI MANZIL, |
|
| M.R.-1/140,
MURAD KHAN ROAD, |
|
| OFF
MARRIOT ROAD, |
|
| KARACHI. |
|
|
| AUDITORS |
|
| HAMID
SHERWANI & ASSOCIATES |
|
| CHARTERED
ACCOUNTANTS |
|
| 0406-KASHIF
CENTRE, |
|
| DAUD
POTA ROAD, |
|
| KARACHI. |
|
|
| REGISTERED
OFFICE |
|
| MEZZANINE
FLOOR, |
|
| HOLIDAY
INN CROWNE PLAZA |
|
| 195/1
SHAHRAH-E-FAISAL, |
|
| KARACHI. |
|
|
| ABOUT
THE COMPANY |
|
| The
Pakistan Hotels Developers Ltd. is a Public Limited Company quoted on the
Karachi and Lahore |
|
| Stock
Exchanges. The company was initially registered at Karachi in the name of Taj
Mahal Hotels |
|
| Limited
under the Companies Act 1913 (now Companies Ordinance, 1984) as a private
company. |
|
| It
was converted into a public company in the year 1981. Later, on 12th June
1994, the name |
|
| of
the company was changed from Taj Mahal Hotels Limited to Pakistan Hotels
Developers Limited |
|
| due
to upgrading of its Hotel into a Five Star Deluxe Hotel, and its linkage with
the world's largest |
|
| chain
of Hotels-Holiday Inn. |
|
|
| The
company owns and operates a Five Star Hotel at Karachi in the name of Holiday
Inn Crowne |
|
| Plaza,
which is located in the heart of the city and is connected to the main
business centres and |
|
| entertainment
venues of the city. |
|
|
| The
Hotel offers 411 rooms with 23 executive suites, 4 deluxe theme suites, one
Presidential suit |
|
| and
a Crowne Plaza club floor with executive lounge. Every room has individual
air conditioning |
|
| controls,
Multi channel satellite T.V., Stereo Music system, Mini Bar and direct
telephone facility. |
|
| The
rates are competitive. |
|
|
| In
house facilities include beautifully decorated restaurants that have more
than exquisite food to |
|
| offer.
Almas is our Signature restaurant, Jharoka for all day dinning, Heer coffee
lounge, Splash- |
|
| Pool
side restaurant and Mexican speciality restaurant under construction. Health
club is another |
|
| hall
mark for the fitness freaks of Karachi offering Sauna, Jacuzzi, fitness
centre, a swimming pool |
|
| and
squash courts. Service facilities include free Airport service, In-house
laundry/valet and 24 hour |
|
| business
centre. |
|
|
| The
new Shopping Arcade consists of Travel Agencies, gift shops, jewellers,
drugstore, car rental, |
|
| carpet
and antique shop. Meetings and Banquet facilities are also made available for
upto 3000 |
|
| persons. |
|
|
| NOTICE
OF 18TH ANNUAL GENERAL MEETING |
|
| Notice
is hereby given that the 18th Annual General Meeting of PAKISTAN HOTELS |
|
| DEVELOPERS
LIMITED will be held on Tuesday 30th of December, 1997 at 3.00 p.m. |
|
| at
Registered Office of the company 195/1, Shahrah-e-Faisal, Karachi to transact
the |
|
| following
business: |
|
|
| 1.
To confirm the minutes of 17th Annual General Meeting held on 30th December, |
|
| 1996
and Extra-Ordinary General Meeting held on 6th August 1997. |
|
|
| 2.
To receive, consider and adopt the Audited Accounts for the year ended 30th
June, |
|
| 1997,
together with the Directors' & Auditors' reports thereon. |
|
|
| 3.
To elect directors in place of the following Directors who retired on
completing their |
|
| term
of office. |
|
|
| 1.
Mr. S. Ferozuddin Baweja |
|
5. Mr. Zubair F. Baweja |
|
| 2.
Mr. Muzaffar F. Baweja |
|
6. Mst. Shahida Begum |
|
| 3.
Mr. Masroor F. Baweja |
|
7. Mr. Aamir F. Baweja |
|
| 4.
Mr. Zaheer F. Baweja |
|
8. Mr. Naveed F. Baweja |
|
|
| 4.
To appoint Auditors for the year 1997-98 and to fix their remuneration. |
|
| 5.
Any other business with the permission of the Chair. |
|
|
|
By the order of the
Board. |
|
|
|
(S. N. RAHMAN) |
|
| KARACHI:
8th December, 1997 |
|
Company Secretary |
|
|
| NOTE: |
|
|
| 1.
A member entitled to attend and vote at the Annual General Meeting is
entitled to |
|
| appoint
another member as a proxy to attend and vote on the member's behalf. Proxies |
|
| must
be deposited with the Secretary of the Company not less than 48 hours before |
|
| the
meeting. |
|
|
| 2.
The share transfer books of the Company shall remain closed from 24th
December, |
|
| 1997
to 30th December, 1997 (Both days inclusive). Transfers, complete in all |
|
| respects,
received at the Registered Office of the Company by 23rd December, 1997 |
|
| will
be entitled to attend the meeting. |
|
|
| 3.
Share holders are requested to notify the Company of any change in their
address. |
|
|
|
| CHAIRMAN'S
REVIEW |
|
| Dear
Members, |
|
|
| Assalamu-Alaikum |
|
|
| It
gives me great pleasure to present the 18th Annual Report and audited
accounts of the company |
|
| for
the financial year ended 30th June 1997 together with the Directors &
Auditors reports thereon. |
|
|
| I
am pleased to report that during the year, your Company was able to maintain
its overall growth |
|
| inspite
of adverse Law and order situation, economic and political conditions,
coupled with higher |
|
| labour
and financial costs, increase in taxes, duties and other factors affecting
business. |
|
|
| The
total turnover for the year increased by 20.25%. Pretax profit increased from
Rs. 0.55 million |
|
| to
Rs. 15.61 million. |
|
|
| Keeping
in view the above results, the Board of Directors declared an interim cash
dividend of 5% |
|
| to
the shareholders and proposed the issue of 50% Right Shares to the existing
members at par |
|
| i.e.
one share for every two shares held. |
|
|
| Although
the Company's profitability justified a better return to the shareholders but
due to acute |
|
| financial
problems faced, it was not possible to do so. In the interest of the Company
and to |
|
| circumvent
its financial problems the Baweja group of Directors on the Board and their
family |
|
| members
voluntarily surrendered their right to this effect. The necessity to raise
capital by issuing |
|
| Right
Shares had arisen for improving the Company's liquidity including additional
gearing which |
|
| would
augment operations and profitability. |
|
|
| The
Company is presently operating with 50% of the Rooms capacity and the
remaining 50% is |
|
| lying
idle pending renovation of 200 rooms. |
|
|
| The
sales from Banquet and other supporting services have dropped considerably
due to imposition |
|
| of
Ban on marriage functions and all other functions connected with marriage. We
are therefore |
|
| left
with the only option to bring the 50% idle capacity into operation and to
concentrate on achieving |
|
| 100%
room occupancy. Besides Holiday Inn Worldwide have also been insisting for
quite some |
|
| time
to bring the property upto their standards by completing the pending work. |
|
|
| In
order to achieve optimum room occupancy and to resist stiff competition, it
is necessary to open |
|
| two
more outlets namely Chinese Restaurant and Mexican Restaurant which is also
the demand |
|
| from
customers. |
|
|
| Furthermore
to overcome frequent interruptions and break downs in the supply of
electricity by KESC |
|
| due
to power shortage and inadequate load capacity of our existing generators,
one generator of |
|
| 1.25
Mgw and a digital telephone system have to be installed on a priority basis,
to gain customers |
|
| confidence
and to improve conditions conducive to room occupancy. |
|
|
| Besides
replacement of the existing cutlery and crockery is also necessary to
obliviate customers |
|
| complaints
and thus improve sales and profitability. Unless the aforesaid jobs are
speedily undertaken |
|
| and
completed on a top priority basis our survival and stay in market will be
endangered ultimately |
|
| leading
to closure of business. |
|
|
| The
funds generated through the issue of Right Shares will be utilised towards
the above mentioned |
|
| capital
works. |
|
|
| In
view of the above mentioned priorities and commitments including the payment
of various Govt. |
|
| dues
by 30-06-97, your Board of Directors are constrained from recommending any
final dividend |
|
| for
the year under review. However every endeavor shall be made to rectify this
grievance during |
|
| the
next financial year. |
|
|
| It
is a matter of great relief for the Company that the State Bank of Pakistan
on 5th June I997 |
|
| announced
an incentive scheme to the advantage of the borrowers for the settlement of
their stuck |
|
| up
loans with the Banks. The scheme provided the Company with an opportunity to
settle its basic |
|
| dispute
with the United Bank Limited to the effect that the penal interest and its
compound impact |
|
| should
be deleted from the loans which despite assurances given was not fulfilled
for more than |
|
| a
decade due to the unflexible and unethical attitude of some officers of the
Bank which was also |
|
| to
their disadvantage. |
|
|
| Insha-Allah
the Company as required under the SBP incentive scheme shall clear all its
balance |
|
| outstanding
dues with UBL with uptodate mark up on or before the due date mentioned in
the said |
|
| scheme. |
|
|
| There
have been some changes in the composition of your Board of Directors.
Directors Mansoor |
|
| Baweja
and Mahmood Baweja resigned with effect from 30th June 1997 and in their
place Mst. |
|
| Shahida
Begum and Mr. Zubair Baweja were coopted as directors for the remaining term.
Directors |
|
| Ferozuddin
Riaz and Nadeem Riaz ceased to hold office pursuant to section 188(b) of the
Companies |
|
| ordinance
and in their place Mr. Aamir F. Baweja and Mr. Naveed F. Baweja were coopted
as |
|
| Directors
with effect form 2nd December 1997. All the Directors on the Board will
retire on |
|
| completing
their term of office and being eligible seek re-election at the forthcoming
Annual General |
|
| Meeting
of the Company. |
|
|
| The
years ahead are challenging for the Company as Hotel Industry in particular
is passing through |
|
| difficult
times, owing to gradual decrease in business. The management is fully aware
of the decline |
|
| and
has already planned to take immediate steps to eliminate all bottlenecks.
This will be achieved |
|
| by
utilising the funds generated through the Right Issue. The menace of load
shedding will come |
|
| to
an end with the installation of power generators for which order has already
been placed. There |
|
| will
be net saving of approximately Rs. 800,000/- per month which the Company is
presently paying |
|
| to
K.E.S.C. The Company has also entered into an agreement for the installation
of a latest digital |
|
| automatic
telephone system for which 50% advance has been made. The system will play an |
|
| important
and vital role in fetching extremely good results. |
|
|
| In
addition, with a view to further increase profitability, the Company has
already started work on |
|
| a
modular office block covering an area of approximately 12000 sq. ft. in the
basement. The block |
|
| is
being constructed on a most modern pattern at an estimated investment of Rs.
12.50 million |
|
| and
the income from this project is expected to be very good. |
|
|
| All
the above steps including the settlement of Company's liabilities with
Financial Institutions/Banks |
|
| will
bring the Company on a sound financial footing, to diversify its activities
by identifying new |
|
| areas
of profitability. |
|
|
| During
the year the management and staff relations remained very cordial. I take
this opportunity |
|
| to
thank all the employees for their loyal and dedicated services to the
Company. |
|
|
| I
would also like to extend my thanks to the shareholders for their continued
support and faith. |
|
|
| My
thanks are also due to M/s. Holiday Inn worldwide for their cooperation. I
also gratefully |
|
| acknowledge
the support received from Government Department. |
|
|
| KARACHI: |
|
S. FEROZUDDIN BEWEJA |
|
| 2nd
December, 1997 |
|
( CHAIRMAN ) |
|
|
|
| REPORT
OF DIRECTORS |
|
| The
Directors of PAKISTAN HOTELS DEVELOPERS LIMITED are pleased to submit their |
|
| report
together with Audited Accounts of the Company for the year ended 30th June,
1997. |
|
|
|
(Rs. '000) |
(Rs. '000) |
|
| ACCOUNTS |
|
| Total
Revenue |
|
139,742 |
|
| Less:
Direct Cost |
|
71,915 |
|
|
|
Other Managerial and |
|
|
Financial Expenses |
|
36,595 |
|
|
---------- |
|
|
108,510 |
|
|
---------- |
|
|
31,232 |
|
| Less:
Statutory Depreciation |
|
15,618 |
|
|
---------- |
|
|
Net operating profit
before taxation |
|
15,614 |
|
| Less: |
Taxation |
|
5,453 |
|
|
---------- |
|
|
Profit after taxation |
|
10,I61 |
|
|
========== |
|
|
|
|
| The foreign exchange earning during the
year was 0.316 million U.S. Dollars. |
|
|
| APPOINTMENT
OF AUDITORS: |
|
| The
retiring Auditors Messrs. Hamid Sherwani & Associates, Chartered
Accountants, being |
|
| eligible,
offer themselves for reappointment. |
|
|
| CHAIRMAN'S
REVIEW |
|
| The
contents of chairman's review form an integral part of the report. |
|
|
| PATTERN
OF SHAREHOLDING: |
|
| The
pattern of shareholding as at 30th June, 1997 is annexed. |
|
|
|
For & on behalf of
Board of Directors |
|
|
|
MUZAFFAR F. BAWEJA |
|
| KARACHI:
2nd December, 1997 |
|
(CHIEF EXECUTIVE) |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| We
have audited the annexed Balance Sheet of M/s. PAKISTAN HOTELS DEVELOPERS |
|
| LIMITED
as at 30th June, 1997 and the related Profit & Loss Account and Cash Flow
Statement |
|
| together
with the notes forming part thereof. for the year then ended and we state
that we have |
|
| obtained
all the informations and explanations which to the best of our knowledge and
belief were |
|
| necessary
for the purposes of our audit and, after due verification thereof, we report
that: |
|
|
| (a)
In our opinion, proper books of account have been kept by the company as
required by |
|
| Companies
Ordinance, 1984; |
|
|
| (b)
In our opinion:- |
|
|
| i.
the Balance Sheet and Profit & Loss Account together with the notes
thereon have |
|
| been
drawn up in conformity with the Companies Ordinance, 1984, and are in |
|
| agreement
with the books of account and are further in accordance with accounting |
|
| policies
consistently applied; |
|
|
| ii.
the expenditure incurred during the year was for the purpose of the company's |
|
| business;
and |
|
|
| iii.
the business conducted, investments made and the expenditure incurred during
the |
|
| year
were in accordance with the objects of the company; |
|
|
| (c)
In our opinion and to the best of our information and according to the
explanation given to |
|
| us,
the Balance Sheet, Profit & Loss Account and Cash Flow Statement together
with the |
|
| notes
forming part thereof, give the information required by the Companies
Ordinance, |
|
| 1984,
in the manner so required and respectively give a true and fair view of the
state of the |
|
| company's
affairs as at 30th June, 1997 and of the profit for the year then ended. |
|
|
| (d)
In our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
|
HAMID SHERWANI &
ASSOCIATES |
|
| KARACHI:
2nd December, 1997 |
|
Chartered Accountants. |
|
|
|
| BALANCE
SHEET AS ON 30TH JUNE, 1997 |
|
|
|
| CAPITAL
& LIABILITIES |
|
Note |
1997 |
1996 |
|
|
|
(Rs. '000) |
(Rs. '000) |
|
|
| SHARE
CAPITAL |
|
|
| AUTHORIZED: |
|
| 30,000,000
Ordinary shares of Rs. 10/- each |
|
300,000 |
300,000 |
|
|
========= |
========= |
|
|
|
|
| ISSUED,
SUBSCRIBED & PAID-UP: |
|
| 18,000,000
Ordinary shares of Rs.10/- each |
3 |
180,000 |
180,000 |
|
|
| Un-appropriated
Profit |
|
21,005 |
13,786 |
|
|
---------- |
---------- |
|
|
201,005 |
193,786 |
|
|
|
|
| DEFERRED
LIABILITIES |
|
| Deferred
taxation |
|
5,121 |
5,163 |
|
| Provision
for gratuity |
|
6,119 |
4,493 |
|
|
| LONG
TERM ADVANCES & |
|
| DEPOSITS
- UNSECURED |
|
4 |
27,831 |
25,437 |
|
|
|
|
| CURRENT
LIABILITIES: |
|
|
|
| Short
term borrowings |
|
5 |
19,034 |
26,783 |
|
| Current
maturity of long term loans |
|
6 |
4,521 |
4,521 |
|
| Creditors,
accrued charges & other liabilities |
7 |
43,248 |
31,199 |
|
| Provision
for taxation |
|
|
8,175 |
3,605 |
|
| Dividend
payable |
|
|
2,942 |
- |
|
|
---------- |
---------- |
|
|
77,920 |
66,108 |
|
|
| CONTINGENCIES
& CAPITAL COMMITMENTS: |
|
- |
- |
|
|
---------- |
---------- |
|
|
317,996 |
294,987 |
|
|
========== |
========== |
|
|
|
|
|
|
| AUDITORS'
REPORT: As per report of even date annexed. |
|
| KARACHI:
2nd December, 1997 |
|
|
|
| PROPERTY
& ASSETS: |
|
|
|
|
|
| FIXED
CAPITAL EXPENDITURE |
|
| Operating
fixed assets |
|
9 |
262,797 |
234,920 |
|
| Capital
work-in-progress |
|
10 |
1,705 |
17,729 |
|
|
|
---------- |
---------- |
|
|
|
264,502 |
252,649 |
|
|
|
|
| LONG
TERM DEPOSITS AND |
|
|
|
| DEFERRED
COST |
|
11 |
1,681 |
2,164 |
|
|
|
|
| CURRENT
ASSETS: |
|
|
|
| Stores
& Spares |
|
12 |
1,635 |
1,695 |
|
| Stock
in Trade |
|
13 |
252 |
388 |
|
| Trade
debtors |
|
14 |
11,002 |
7,861 |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables |
|
15 |
20,410 |
16,950 |
|
|
|
|
| Investments |
|
16 |
13,294 |
7,437 |
|
| Cash
& bank balances |
|
17 |
5,220 |
5,843 |
|
|
|
---------- |
---------- |
|
|
51,813 |
40,174 |
|
|
---------- |
---------- |
|
|
317,996 |
294,987 |
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30TH JUNE, 1997 |
|
|
| PARTICULARS |
|
Note |
1997 |
1996 |
|
|
|
(Rs. '000) |
(Rs. '000) |
|
|
| Sales
and services |
|
18 |
137,672 |
114,484 |
|
| Less:
Cost of sales and services |
|
19 |
71,915 |
67,266 |
|
|
|
---------- |
---------- |
|
| Gross
profit |
|
|
65,757 |
47,218 |
|
| Administrative,
selling and general expenses |
20 |
47,098 |
43.03 |
|
|
|
---------- |
---------- |
|
| Operating
profit / (loss) |
|
|
18,659 |
4.19 |
|
| Other
income |
|
21 |
2,070 |
769 |
|
|
|
---------- |
---------- |
|
|
|
20,729 |
4,955 |
|
| OTHER
EXPENSES: |
|
|
|
| Financial
charges |
|
22 |
5,053 |
5,406 |
|
|
|
---------- |
---------- |
|
|
15,676 |
(451) |
|
| Prior
year adjustments |
|
62 |
1,006 |
|
|
---------- |
---------- |
|
| Net
operating profit / (loss) before taxation |
|
15,614 |
555 |
|
|
|
|
|
| TAXATION: |
|
|
|
| Current |
|
5,495 |
(576) |
|
| Previous |
|
- |
(697) |
|
| Deferred |
|
(42) |
351 |
|
|
---------- |
---------- |
|
|
5,453 |
(922) |
|
|
---------- |
---------- |
|
| Profit
/ (Loss) after taxation |
|
10,161 |
(367) |
|
| Unappropriated
profit b/f |
|
13,786 |
14,153 |
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
23,947 |
13,786 |
|
| 5%
Interim Dividend to be paid |
|
2,942 |
- |
|
|
---------- |
---------- |
|
| Unappropriated
profit c/o. |
|
21,005 |
13,786 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
|
|
|
|
| CASH
FLOW STATEMENT |
|
|
|
| FOR
THE YEAR ENDED 30TH JUNE, 1997 |
|
|
|
| PARTICULARS |
|
1997 |
1996 |
|
|
(Rs. '000) |
(Rs. '000) |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Net
profit for the year |
|
15,614 |
555 |
|
|
| Add
Adjustments: |
|
|
|
| Depreciation |
|
15,618 |
13,847 |
|
| Gain/Loss
on disposal of fixed assets |
|
(61) |
99 |
|
| Provision
for gratuity |
|
1,626 |
1,733 |
|
| Amortization
of deferred cost |
|
483 |
483 |
|
|
---------- |
---------- |
|
|
17,666 |
16,162 |
|
|
---------- |
---------- |
|
| Operating
profit before working capital charges |
|
33,280 |
16,717 |
|
|
| (Increase)/Decrease
in current assets |
|
| Stock
and stores |
|
60 |
232 |
|
| Stock
in Trade |
|
136 |
90 |
|
| Trade
debtors |
|
(3,141) |
(1,841) |
|
| Advances,
deposit, repayments & other receivable |
|
(3,460) |
3,044 |
|
|
---------- |
---------- |
|
|
(6,405) |
1,525 |
|
|
---------- |
---------- |
|
|
26,875 |
18,242 |
|
| Increase/(Decrease)
in current liabilities |
|
| Short
term borrowing |
|
(7,749) |
9,497 |
|
| Creditors
accrued charges & other liabilities |
|
12,049 |
(1,960) |
|
|
---------- |
---------- |
|
|
4,300 |
7,537 |
|
|
---------- |
---------- |
|
| Cash
generated from operations |
|
31,175 |
25,779 |
|
| Taxes paid |
|
(925) |
(697) |
