| GHANDHARA NISSAN DIESEL LIMITED |
|
|
|
|
|
|
|
| Annual
Report 1997 |
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|
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| CONTENTS |
|
| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Chairman's
and Directors' Report |
|
| Auditors'
Report to the Members |
|
| Balance
Sheet |
|
| Profit
and Loss Accounts |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholdings |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| Mr.
Raza Kuli Khan Khattak |
|
Chairman and Chief
Executive |
|
| Mr.
Ahmed Kuli Khan Khattak |
|
| Begum
Tehmina Habibullah Khan |
|
| Mr.
H. S. Mufti |
|
| Mr.
M. Salman Siddique |
|
Chief Operating Officer |
|
| Mr.
Norio Abe |
|
| Mr.
Mitsuo Doi |
|
| Mr.
Mohammad Nasim Khan |
|
| Mr.
Behram Hassan |
|
|
| SECRETARY |
|
| Mr.
Aqiel Amjad Ghani |
|
|
| REGISTERED
OFFICE |
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|
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| Ghandhara
House, |
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|
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| 109/2,
Clifton, |
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|
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| Karachi. |
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|
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| FACTORY |
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|
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| Port
Bin Qasim, |
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|
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| Karachi. |
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| BANKERS
OF THE COMPANY |
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|
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| ABN
AMRO Bank |
|
|
|
| Allied
Bank of Pakistan Ltd. |
|
|
|
| American
Express Bank Ltd. |
|
|
|
| ANZ
Grindlays Bank Ltd. |
|
|
|
| The
Bank of Tokyo - Mitsubishi, Ltd. |
|
|
|
| Credit
Agricole Indosuez |
|
|
|
| Mashreq
Bank psc. |
|
|
|
| Emirates
Bank International PJSC. |
|
|
|
| Habib
Bank Limited |
|
| The
Hong Kong & Shanghai Banking Corporation |
|
| Muslim
Commercial Bank Ltd. |
|
| Societe
Generale Bank |
|
| United
Bank Ltd. |
|
| National
Bank of Pakistan Ltd. |
|
| Union
Bank Limited. |
|
| Indus
Bank Limited. |
|
| Askari
Commercial Bank Ltd. |
|
| Bolan
Bank Ltd. |
|
|
| AUDITORS |
|
| Taseer
Hadi Khalid & Co. |
|
| Chartered
Accountants, |
|
| First
Floor, |
|
| Shaikh
Sultan Trust Building No. 2, |
|
| Beaumont
Road, Karachi. |
|
|
| LEGAL
ADVISORS |
|
| Shaukat
Law Associates, |
|
| 217,
Central Hotel Annexe, |
|
| Abdullah
Haroon Road, |
|
| Karachi. |
|
|
| SHARE
REGISTRARS |
|
| T.H.K.
Associates (Pvt) Ltd. |
|
| Ground
Floor, |
|
| Shaikh
Sultan Trust Building No. 2 |
|
| Beaumont
Road, Karachi. |
|
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 11th Annual General Meeting of Shareholders of
Ghandhara Nissan |
|
| Diesel
Limited will be held on Wednesday, the 31 st December, 1997 at 11.00 A.M. at
Hotel Avari |
|
| Towers,
Fatima Jinnah Road, Karachi for the purpose of transacting the following
business: |
|
|
| 1.
To receive and consider the Audited Accounts of the Company for the year
ended |
|
| 30th June, 1997. |
|
|
| 2.
To approve the final dividend @15% i.e. Rs l.50 per share for the year ended
30th |
|
| June,
1997, as recommended by the Board of Directors. |
|
|
| 3.
To appoint Auditors for the year ending 30th June, 1998 and to fix their
remuneration. The |
|
| retiring
Auditors, Messrs: Taseer Hadi Khalid & Co., Chartered Accountants, being
eligible |
|
| offer
themselves for reappointment. |
|
|
| 4.
To transact any other business with the permission of the Chairman. |
|
|
| NOTES: |
|
|
| 1.
The Share Transfer Books of the Company will remain closed from 29th
December, 1997 to |
|
| 5th
January, 1998, (both days inclusive). |
|
|
| 2.
Shareholders are requested to intimate any change in their address to our
Share Registrars, |
|
| Messrs:
THK Associates (Pvt) Ltd., Shares Department, Ground Floor, Sheikh Sultan
Trust |
|
| Building
No. 2, Beaumont Road, Karachi. |
|
|
| 3.
A Member entitled to attend and vote at the Annual General Meeting may
appoint another |
|
| member
as his/her Proxy to attend and vote instead of him/her. Form of Proxy is
enclosed with |
|
| the
Annual Report. Votes may be given personally or by Proxy or by Attorney or,
in case of a |
|
| Corporation,
by a representative The instrument of Proxy, duly stamped, signed and wit- |
|
| nessed,
should be lodged at the Registered Office of the Company at Ghandhara House,
109/2, |
|
| Clifton,
Karachi-6 not later than 48 hours before the time of the meeting. |
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|
|
| CHAIRMAN'S
& DIRECTORS' REPORT |
|
|
| It
is with immense pleasure that we present to you the Eleventh Annual Report of
your Company, |
|
| and
our heads bow down in gratitude before Almighty Allah at the results for the
year under review. |
|
| The
company has successfully wiped off all losses incurred in year 1994, and made
a substantial |
|
| profit. |
|
|
| OPERATING
RESULTS |
|
|
| The
pretax profit for the year is Rs. 101.28 million as against Rs. 45.29 million
for the eighteen |
|
| months
ended 30th June 1996, which is an increase of 123.62%. Likewise, the gross
profit for the |
|
| year
under review is Rs. 185.93 million as against Rs. 133.92 million for the
eighteen months ended |
|
| 30th
June 1996. In terms of percentage it works out to 15.82 as against 10.98
previously. |
|
|
| A
comparison of production and sales during the year with that of the preceding
eighteen months is |
|
| given
below :- |
|
|
| Year
ended 30th June, 1997 |
|
Eighteen Months ended
30th June, 1996 |
|
|
| Trucks & Buses (Units) |
|
Trucks & Buses (Units) |
|
|
|
|
|
|
|
|
| Production |
Sales |
|
Production |
|
Sales |
|
|
|
|
|
|
| 789 |
|
724 |
|
528 |
|
853 |
|
|
|
|
(Including |
|
|
|
|
241 CBU) |
|
|
| The
operating results are as follows :- |
|
|
|
|
|
|
|
Year
ended |
Eighteen months |
|
|
|
|
ended |
|
|
|
|
|
|
30th June, 1997 |
30th June, 1996 |
|
|
|
|
|
|
|
|
|
|
(Rupees in thousands) |
|
|
|
| Sales
and Services |
|
|
1,175,322 |
|
1,219,028 |
|
| Gross
Profit |
|
|
185,925 |
|
133,920 |
|
| Provision
for taxation (net) |
|
27,834 |
|
6,171 |
|
| Unappropriated
Loss B/F |
|
(3,323) |
|
(42,442) |
|
| Transfer
to General Reserve |
|
36,000 |
|
-- |
|
| Dividend |
|
| -
Interim @ 15% (1996 - Nil) |
|
|
11,652 |
|
-- |
|
| -
Proposed Final @ 15% (1996 - Nil) |
|
11,652 |
|
-- |
|
|
---------- |
|
---------- |
|
|
|
|
|
23,304 |
|
-- |
|
| Unappropriated
profit/(loss) carried forward |
10,819 |
|
(3,323) |
|
|
| DIVIDEND |
|
|
| Your
Directors are pleased to state that the losses suffered in 1994 having been
completely wiped |
|
| off
and .the financial health of company having been restored, an interim
dividend of 15% was |
|
| declared
in February 1997, and your directors now propose a final dividend of 15%
making a total |
|
| of
30% for the year under review. |
|
|
| APPOINTMENT
OF AUDITORS |
|
|
| The
retiring auditors M/s. Taseer Hadi Khalid & Co., Chartered Accountants,
being eligible, have |
|
| offered
themselves for re-appointment. |
|
|
| PATTERN
OF SHARE HOLDINGS |
|
| The
pattern of Share holdings of the Company as at 30th June, 1997 is given on
page 26. |
|
|
|
| BOARD OF DIRECTORS |
|
|
|
| The
casual vacancy caused by the resignation of Mr. K. Nakamura was filled up by
the appointment |
|
| of
Mr. Norio Abe, nominee of Nissan Diesel Motor Co. Ltd., Japan, on 5th
December 1996. Your |
|
| directors
take this opportunity of expressing their appreciation for the services
rendered by Mr. |
|
| Nakamura
and welcome Mr. Abe on the Board of Directors. |
|
|
| ASSISTANCE
BY OUR PRINCIPALS |
|
|
| Your
Directors would like to express their deep appreciation to your Company's
Principals, M/s. |
|
| Nissan
Diesel Motor Company Limited, Japan, and M/s Tomen Corporation, for their
cooperation |
|
| and
particularly for help and assistance to make the company profitable during
the year. We look |
|
| forward
to furtherance of this most cordial relationship in years ahead. |
|
|
| LABOUR
- MANAGEMENT RELATIONS |
|
|
| Your
Directors are pleased to report a very satisfactory working relationship
between the |
|
| Management
and the Labour. |
|
|
| MANAGEMENT
/ STAFF / WORKERS / DEALERS / VENDORS |
|
|
| The
Management, Staff, Workers, CBA, Dealers and Vendors have all played a
commendable role |
|
| in
the progress of your company, and it is hoped that they will continue to put
in their best in future. |
|
|
| FUTURE
PROSPECTS |
|
|
| The
company is hopefully looking forward to an upturn in Pakistan's economy, so
that the |
|
| favourable
results of the year continue in the years ahead. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of GHANDHARA NISSAN DIESEL LIMITED as
at |
|
| 30
June 1997 and the related Profit and Loss Account and Statement of Changes in
Financial |
|
| Position,
together with the notes forming part thereof, for the year then ended and we
state that we |
|
| have
obtained all the information and explanations which to the best of our
knowledge and belief |
|
| were
necessary for the purposes of our audit and after due verification thereof,
we report that: |
|
|
| (a)
in our opinion, proper books of account have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| (b)
in our opinion: |
|
|
| i)
the balance sheet and profit and loss account together with the notes thereon
have |
|
| been
drawn up in conformity with the Companies Ordinance, 1984 and are in |
|
| agreement
with the books of account and are further in accordance with account- |
|
| ing
policies consistently applied; |
|
|
|
|
| ii)
the expenditure incurred during the period was for the purpose of the
Company's |
|
| business;
and |
|
|
|
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the |
|
| 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
explanations given to |
|
| us,
the balance sheet, profit and loss account and the statement of changes in
financial posi- |
|
| tion,
together with the notes forming part thereof, give the information required
by the |
|
| Companies
Ordinance, 1984 in the manner so required and give a true and fair view of
the |
|
| state
of the Company's affairs as at 30 June 1997 and of the profit and the changes
in finan- |
|
| cial
position for the year then ended; and |
|
|
| (d)
in our opinion, zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was |
|
| deducted
by the company and deposited in the Central Zakat Fund established under
section |
|
| 7
of that Ordinance. |
|
|
|
|
|
|
TASEER HADI KHALID &
CO. |
|
| KARACHI:
8th December, 1997. |
|
CHARTERED ACCOUNTANTS |
|
|
|
| BALANCE
SHEET |
|
| AS
AT 30 JUNE, 1997 |
|
|
|
1997 |
1996 |
|
|
|
|
NOTE |
Rs '000 |
Rs '000 |
|
|
| TANGIBLE
FIXED ASSETS |
|
|
3 |
110,853 |
112,227 |
|
| CAPITAL
WORK-IN-PROGRESS |
|
|
-- |
1,060 |
|
| DEPOSIT
AGAINST LEASE FACILITY |
|
487 |
106 |
|
|
| CURRENT
ASSETS |
|
|
| Stores,
spares and loose tools |
|
4 |
4,172 |
3,445 |
|
| Stock
in trade |
|
5 |
289,861 |
296,699 |
|
| Trade
debtors - unsecured |
|
|
|
|
| considered
good |
|
6 |
27,569 |
4,518 |
|
| Advances,
deposits, prepayments |
|
|
|
|
| and
other receivables |
|
7 |
166,329 |
155,887 |
|
| Cash
and bank balances |
|
8 |
3,062 |
37,643 |
|
|
|
|
|
|
|
|
|
490,993 |
498,192 |
|
| LESS:
CURRENT LIABILITIES |
|
|
|
|
| Current
maturity of lease facility |
|
|
1,336 |
174 |
|
| Finance
under mark-up |
|
| arrangements
- secured |
|
9 |
120,303 |
55,519 |
|
| Bills
payable |
|
|
57,694 |
187,397 |
|
| Creditors,
accrued expenses |
|
|
|
|
| and
other liabilities |
|
10 |
140,476 |
180,035 |
|
| Unclaimed
dividends |
|
|
301 |
42 |
|
| Proposed
dividend |
|
|
11,652 |
-- |
|
| Taxation |
|
11 |
89,579 |
59,103 |
|
|
|
|
--------- |
--------- |
|
|
|
|
421,341 |
482,270 |
|
|
| NET
CURRENT ASSETS |
|
69,652 |
15,922 |
|
|
|
|
--------- |
--------- |
|
|
180,992 |
129,315 |
|
|
|
|
========== |
========== |
|
|
|
|
1997 |
1996 |
|
|
|
NOTE |
Rs '000 |
Rs '000 |
|
|
|
|
| SHARE
CAPITAL |
|
|
12 |
77,679 |
77,679 |
|
| GENERAL
RESERVE |
|
|
36,000 |
-- |
|
| UNAPPROPRIATED
PROFIT/ |
|
|
|
|
| (ACCUMULATED
LOSS) |
|
|
10,819 |
(3,323) |
|
|
|
|
--------- |
--------- |
|
|
|
|
124,498 |
74,356 |
|
|
| SURPLUS
ON REVALUATION |
|
| OF
FIXED ASSETS |
|
13 |
51,561 |
52,317 |
|
| LIABILITY
AGAINST ASSETS SUBJECT |
|
|
|
| TO
FINANCE LEASE |
|
14 |
2,660 |
-- |
|
| DEFERRED
LIABILITIES |
|
15 |
2,273 |
2,642 |
|
|
|
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
16 |
|
|
|
|
|
--------- |
--------- |
|
|
|
|
180,992 |
129,315 |
|
|
========== |
========== |
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30 JUNE, 1997 |
|
|
|
|
|
|
Year |
Eighteen months |
|
|
|
|
|
ended |
period ended |
|
|
|
|
|
30 June |
30 June |
|
|
|
|
1997 |
1996 |
|
|
|
|
Note |
Rs '000 |
Rs '000 |
|
|
| Sales
and service - Net |
|
|
17 |
1,175,322 |
1,219,028 |
|
| Cost
of goods sold |
|
|
18 |
989,397 |
1,085,108 |
|
|
|
|
|
--------- |
--------- |
|
| Gross
profit |
|
|
|
185,925 |
133,920 |
|
| Administration
and selling expenses |
|
19 |
58,875 |
62,244 |
|
|
|
|
|
--------- |
--------- |
|
| Operating
Profit |
|
|
|
127,050 |
71,676 |
|
| Other
income |
|
|
20 |
5,284 |
7,927 |
|
|
|
|
|
--------- |
--------- |
|
|
|
|
|
132,334 |
79,603 |
|
|
|
|
|
|
|
| Financial
charges |
|
|
21 |
23,592 |
31,929 |
|
| Workers'
profit participation fund |
|
5,437 |
2,384 |
|
| Workers'
welfare fund |
|
|
2,025 |
-- |
|
|
|
|
--------- |
--------- |
|
|
|
|
31,054 |
34,313 |
|
|
|
|
--------- |
--------- |
|
| Profit
before taxation |
|
|
101,280 |
45,290 |
|
| Provision
for taxation |
|
|
|
|
| Current
year |
|
|
30,476 |
6,094 |
|
| Deferred |
|
|
(2,642) |
77 |
|
|
|
|
--------- |
--------- |
|
|
|
|
27,834 |
6,171 |
|
|
| Profit after taxation |
|
73,446 |
39,119 |
|
|
|
| (Accumulated
Loss) brought forward |
|
(3,323) |
(42,442) |
|
|
--------- |
--------- |
|
|
|
|
70,123 |
(3,323) |
|
| APPROPRIATION: |
|
| Transferred
to general reserve |
|
36,000 |
-- |
|
| Interim
dividend @ 15% (1996: Nil) |
|
11,652 |
-- |
|
| Proposed
Final dividend @ 15% (1996: Nil) |
|
11,652 |
-- |
|
|
--------- |
--------- |
|
|
|
|
59,304 |
|
|
|
|
--------- |
--------- |
|
| Unappropriated
profit/(accumulated loss) carried forward |
10,819 |
(3,323) |
|
|
========= |
========= |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE YEAR ENDED 30 JUNE, 1997 |
|
|
|
|
|
Year |
Eighteen months |
|
|
|
|
ended |
period ended |
|
|
|
|
30 June |
30 June |
|
|
|
|
1997 |
1996 |
|
|
|
|
Rs '000 |
Rs '000 |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
| Profit
before taxation |
|
101,280 |
45,290 |
|
|
| Adjustments
for : |
|
| Depreciation |
|
|
10,603 |
13,756 |
|
| Provision
for staff gratuity |
|
2,273 |
-- |
|
| Mark-
up and lease finance charges |
|
15,953 |
38,355 |
|
| Gain on sale of fixed assets |
|
(664) |
(615) |
|
| Return
on investment |
|
(1,671) |
-- |
|
|
---------- |
---------- |
|
|
|
127,774 |
96,786 |
|
|
| Changes
in operating assets and liabilities |
|
|
| (Increase)/Decrease
in stores, spares & loose tools |
|
(727) |
(704) |
|
| Decrease
in stock in trade |
|
6,838 |
163,881 |
|
| Decrease/
(Increase) in Trade debtors |
|
(23,051) |
32,985 |
|
| Decrease/
(Increase) in Advances, deposits & prepayments |
25,701 |
(43,931) |
|
| Increase/
(Decrease) in Bills payable |
|
(129,703) |
140,339 |
|
| (Decrease)/
Increase in Trade creditors |
|
(39,326) |
(21,630) |
|
|
---------- |
---------- |
|
|
|
|
(160,268) |
270,940 |
|
|
|
|
---------- |
---------- |
|
|
|
|
(32,494) |
367,726 |
|
| Interest
paid |
|
|
(13,888) |
(48,447) |
|
| Income
tax paid |
|
|
(38,442) |
(16,729) |
|
|
---------- |
---------- |
|
|
|
|
(52,330) |
(65,176) |
|
|
|
|
---------- |
---------- |
|
|
|
|
(84,824) |
302,550 |
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Capital
expenditure |
|
|
(4,685) |
(5,878) |
|
| Payment
of dividend |
|
|
(11,393) |
-- |
|
| Return
on investment |
|
|
1,671 |
-- |
|
| Sales
proceed of fixed assets sold |
|
|
1,396 |
628 |
|
|
---------- |
---------- |
|
| Net
cash flows from investing activities |
|
(13,011) |
(5,250) |
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
|
| Finance
lease liability |
|
|
(1,531) |
(5,753) |
|
| Net
cash flow from financing activities |
|
(1,531) |
(5,753) |
|
| Net
increase in cash and bank balances and finance |
|
---------- |
---------- |
|
| under
mark-up arrangements |
|
|
(99,366) |
291,547 |
|
|
| Cash
and bank balances and finance under mark-up |
|
| arrangements
at beginning of the year |
|
(17,876) |
(309,423) |
|
| Cash
and bank balances and finance under |
|
---------- |
---------- |
|
| mark-up
arrangements at end of the year |
|
(117,242) |
(17,876) |
|
|
========== |
========== |
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED 30 JUNE, 1997 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
|
| GHANDHARA
NISSAN DIESEL LIMITED was incorporated in 1985 as a public |
|
| company
in Pakistan under the terms of a joint venture agreement concluded among |
|
| Ghandhara
Nissan Limited, Nissan Diesel Motor Company Limited of Japan and Tomen |
|
| Corporation
of Japan who are also shareholders of the Company. It is quoted on the
Karachi |
|
| and
Lahore Stock Exchanges. The principal activity of the Company is the assembly
and |
|
| progressive
manufacturing of Nissan trucks and buses in Pakistan. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting convention |
|
|
|
|
| These
accounts have been prepared on the basis of the historical cost convention as |
|
| modified
by revaluation of fixed assets. |
|
|
|
|
| 2.2
Fixed capital expenditure |
|
| - Owned |
|
|
| (i)
Fixed assets are stated at valuation less accumulated depreciation (except |
|
| freehold
land which is stated at valuation). On disposal, the value of the assets |
|
