| UNITED DISTRIBUTORS PAKISTAN LIMITED |
|
|
|
|
|
|
|
|
| ANNUAL
REPORT 1996-97 |
|
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Report
of the Directors |
|
| Auditors'
Report to the Members |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
|
| Rashid Abdulla |
|
|
Chief Executive |
|
|
| Khalid Malik |
|
|
| Arshad
Abdulla |
|
|
| Shahid Abdulla |
|
|
| Arshad Anis |
|
|
| Tausif
Ahmad Hashmi |
|
|
| Razi-ur-Rehman |
|
N.I.T. Nominee |
|
|
| COMPANY
SECRETARY |
|
| Anjum Bashir |
|
|
| AUDITORS |
|
| Sidat
Hyder Qamar Maqbool & Co. |
|
| Chartered
Accountants |
|
|
| REGISTERED
OFFICE |
|
| 9th
Floor, N.I.C. Building, |
|
| Abbasi
Shaheed Road, Karachi. |
|
|
| REGISTRAR |
|
| Gangjees
Investment & Finance Consultants, |
|
| 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 15th Annual General Meeting OF UNITED DISTRIBUTORS |
|
| PAKISTAN
LIMITED will be held at Hotel Holiday-Inn Crowne Plaza, Karachi on Tuesday, |
|
| October
20, 1998 at 11 a.m. to transact the following business: |
|
|
| 1.
To confirm the minutes of the last Annual General Meeting held on October 30,
1996. |
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|
|
|
| 2.
To receive, consider and approve the audited accounts of the Company for the
year |
|
| ended
June 30, 1997, together with the Directors' and Auditors' reports thereon. |
|
|
| 3.
To appoint auditors and fix their remuneration for the year 1997-98. The
present auditors |
|
| M/S.
SIDAT HYDER QAMAR MAQBOOL & Co. Chartered Accountants, retire and being |
|
| eligible,
offer themselves for re-appointment. |
|
|
| 4.
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 17, 1998 |
|
Company Secretary |
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| NOTES: |
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|
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| 1.
The share transfer books of the Company will remain closed from October 14,
1998 to |
|
| October
20, 1998 (both days inclusive). Transfers (if any) should be received at the
office |
|
| of
our Registrar M/S. GANGJEES INVESTMENT & FINANCE CONSULTANTS, ROOM |
|
| NO.
513, CLIFTON CENTRE, KEHKASHAN, BLOCK 5, CLIFTON, KARACHI-75600, |
|
| latest
by the close of business on Tuesday October 13, 1998. |
|
|
| 2.
A member entitled to attend and vote at this meeting may appoint a proxy to
attend and |
|
| vote
on his/her behalf. A proxy need not be a member of the Company. Proxies in
order |
|
| to
be effective must be received by the Company's Registrar not less than 48
hours before |
|
| the meeting. |
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|
|
|
|
| REPORT
OF THE DIRECTORS |
|
|
| The
Directors take pleasure in submitting their report and audited accounts of
the Company for |
|
| the
year ending June 30, 1997. |
|
|
| FINANCIAL
RESULTS |
|
|
| The
net profit of the Company for the year before taxation |
|
7,539,236 |
|
|
|
|
| Provision
for taxation - current year |
|
3,000,000 |
|
|
|
|
--------------- |
|
| Profit
after taxation |
|
4,539,236 |
|
|
|
|
|
|
| Profit
brought forward from last year |
|
2,600,887 |
|
|
--------------- |
|
| Accumulated
profit carried forward |
|
Rupees |
7,140,123 |
|
|
========== |
|
| REVIEW
OF OPERATIONS |
|
|
| In
the year ending June 30, 1997 the Company's turnover was Rs. 201.9 million as
compared |
|
| to
the previous Rs. 506.4 million for the eighteen months period ending June 30,
1996. |
|
|
| The
reasons for decline in sales are as follows: |
|
|
| a)
DowElanco's sales and distribution contract was signed only for one year. The |
|
| company
started to sell the products itself from 1997, we however continue to |
|
| provide
them the physical distribution services. |
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|
|
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| b)
Two major products Arrivo and Furadan were also handed over to the JV company |
|
| FMC
United (Pvt) Ltd. |
|
|
| c)
Decrease in the overall cotton production which fell from 10.6 million bales
to 9.3 |
|
| million.
The decline was mainly attributed to the severe attack of Whitefly, and the |
|
| dry
weather conditions in the cotton growing areas of the Punjab. Since we did
not |
|
| have
a Whitefly specialty product, we were unable to make any significant sales. |
|
|
| d)
The past fiscal year comprised of eighteen months and included 3 seasons of
seeds |
|
| business
versus the 2 seasons of this year. Pioneer Seeds have decided to go for a |
|
| self
distribution and marketing. |
|
|
| Despite
the factors mentioned above the Company is striving to establish itself in
the Agrochem |
|
| market
by bringing in more products both registered in our own brand name as well as |
|
| international
brands to regain the business volume. |
|
|
| The
physical distribution arm of the Company has now turned into a business unit
and is being |
|
| developed
independently to generate profits. |
|
|
| The
Solar business continues to work under the new name of Power Systems and
remains |
|
| tender
based, primarily in the public sector. In 1997 there were fewer enquiries
from the |
|
| traditional
consumers of solar energy as such it was a lean year for Solar business also. |
|
|
| FUTURE
OUTLOOK |
|
|
| We
have now restructured the Company and are hopeful of regaining our position
with the |
|
| marketing
of our own brands and also by expanding our physical distribution services. |
|
|
| Your
Company has been approached by a leading International company for
distributing / |
|
| marketing
their range of products which mainly include Fungicides, Miticides and
Insecticides. |
|
|
| Your
Company is in the process of finding new seed business partners who have a
long term |
|
| vision
of staying in the Pakistan market. This would help to regenerate the seeds
business and |
|
| thereby
increase our sales volumes and profitability. |
|
|
| HOLDING
OF SHARES |
|
| The
pattern of holding of shares is shown on page 23. |
|
|
| AUDITORS |
|
| The
retiring auditors, M/S. Sidat Hyder Qamar Maqbool & Co., being eligible,
offer |
|
| themselves
for re-appointment. |
|
|
| ACKNOWLEDGMENT |
|
| The
Directors of your Company take great pleasure in recording their appreciation
of the fine |
|
| work
put in by all Company staff during the last year. |
|
|
| RASHID
ABDULLA |
|
ARSHAD ANIS |
|
| Chief
Executive |
|
Director |
|
|
| KARACHI:
September 17, 1998 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of UNITED DISTRIBUTORS PAKISTAN |
|
| LIMITED
as at 30 June 1997 and the related profit and loss account and statement of
changes |
|
| in
financial position, together with the notes thereon, 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 |
|
| 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
explanations |
|
| given
to us, the balance sheet, profit and loss account and statement of changes in |
|
| financial
position, 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 30 |
|
| June
1997 and of the profit and the changes in financial 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. |
|
|
|
| BALANCE
SHEET AS AT 30 JUNE 1997 |
|
|
|
|
|
Note |
1997 |
1996 |
|
|
|
|
| CAPITAL
AND RESERVES |
|
|
|
| Authorised |
|
|
|
|
| 10,000,000
(1996: 10,000,000) Ordinary |
|
|
| shares
of Rs. 10/- each |
|
|
100,000,000 |
100,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
3 |
60,000,000 |
50,000,000 |
|
| Reserves |
|
4 |
27,140,123 |
32,600,887 |
|
|
|
--------------- |
--------------- |
|
|
|
|
87,140,123 |
82,600,887 |
|
|
|
|
| LONG-TERM
LIABILITIES |
|
|
| Liabilities
against assets subject to |
|
|
| finance lease |
|
|
5 |
9,885,507 |
5,640,158 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of finance lease |
|
|
5 |
4,531,353 |
3,201,538 |
|
| Short-term
loan and running finance |
|
6 |
79,663,593 |
92,268,315 |
|
| Creditors,
accrued and other liabilities |
|
7 |
173,718,384 |
192,660,275 |
|
| Taxation - net |
|
|
|
|
-- |
1,680,784 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
257,913,330 |
289,810,912 |
|
| CONTINGENCIES
AND COMMITMENTS |
8 |
-- |
-- |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
Rupees |
354,938,960 |
378,051,957 |
|
|
|
|
========== |
========== |
|
| FIXED
ASSETS -- TANGIBLE |
|
| Operating
fixed assets -- at book value |
|
9 |
2,964,834 |
5,102,138 |
|
| Assets
subject to finance lease |
|
|
10 |
14,159,014 |
8,333,390 |
|
|
|
|
|
|
--------------- |
--------------- |
|
|
|
|
17,123,848 |
13,435,528 |
|
|
|
|
| LONG-TERM
INVESTMENTS-AT COST |
|
11 |
22,515,930 |
22,515,930 |
|
| LONG-TERM
LOANS AND DEPOSITS |
|
12 |
1,934,107 |
1,462,636 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
| Stock-in-trade |
|
|
|
13 |
62,196,624 |
79,792,818 |
|
| Trade debts |
|
|
|
14 |
2,045,045 |
20,318,523 |
|
| Advances,
deposits, prepayments and |
|
|
| other
receivables |
|
15 |
26,574,607 |
37,408,125 |
|
| Cash
and bank balances |
|
|
16 |
222,548,799 |
203,118,397 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
313,365,075 |
340,637,863 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
Rupees |
354,938,960 |
378,051,957 |
|
|
|
|
========== |
========== |
|
| AUDITORS'
REPORT ANNEXED |
|
| These
accounts should be read with the annexed notes. |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 1997 |
|
|
|
|
|
For twelve |
For eighteen |
|
|
|
|
months ended |
months ended |
|
|
Note |
30 June 1997 |
30 June 1996 |
|
|
|
|
| Sales-net |
|
17 |
201,911,282 |
506,429,761 |
|
| Cost
of goods sold |
|
18 |
159,667,207 |
408,246,281 |
|
|
|
|
--------------- |
--------------- |
|
| Gross profit |
|
42,244,075 |
98,183,480 |
|
|
|
|
| General
and administration expenses |
|
19 |
14,369,660 |
22,819,453 |
|
| Selling
and distribution expenses |
|
20 |
39,547,169 |
66,086,942 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
53,916,829 |
88,906,395 |
|
|
|
|
| Operating
(loss) / profit |
|
|
(11,672,754) |
9,277,085 |
|
|
|
21 |
60,962,612 |
75,357,443 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
49,289,858 |
84,634,528 |
|
|
|
22 |
41,750,622 |
34,604,577 |
|
|
|
|
--------------- |
--------------- |
|
| Profit
before taxation |
|
|
7,539,236 |
50,029,951 |
|
|
|
|
--------------- |
--------------- |
|
| Provision
for taxation - current year |
|
23 |
3,000,000 |
18,900,000 |
|
| - prior years' |
|
|
|
-- |
11,200,000 |
|
|
|
--------------- |
--------------- |
|
|
|
3,000,000 |
30,100,000 |
|
|
|
--------------- |
--------------- |
|
| Profit
after taxation |
|
4,539,236 |
19,929,951 |
|
| Accumulated
profit available for appropriation |
|
2,600,887 |
170,936 |
|
|
|
|
--------------- |
--------------- |
|
| Accumulated
profit available for appropriation |
|
7,140,123 |
20,100,887 |
|
|
|
|
| Appropriations: |
|
|
|
| Interim
dividend - Nil (1996:15%) |
|
|
-- |
7,500,000 |
|
| Transfer
to reserve for issue of bonus shares |
|
|
-- |
10,000,000 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
-- |
17,500,000 |
|
|
|
|
--------------- |
--------------- |
|
| Accumulated
profit carried forward |
|
Rupees |
7,140,123 |
2,600,887 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| These
accounts should be read with the annexed notes. |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE YEAR ENDED 30 JUNE 1997 |
|
|
|
|
|
|
For twelve |
For eighteen |
|
|
|
|
|
months ended |
months ended |
|
|
|
|
|
30 June 1997 |
30 June1996 |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
after taxation |
|
|
|
4,539,236 |
19,929,951 |
|
| Adjustment
to reconcile profit to net cash provided |
|
| by
operating activities |
|
|
| Depreciation |
|
|
6,036,536 |
8,141,391 |
|
| Profit
on deposit account |
|
|
(37,488,968) |
(46,659,080) |
|
| Provision
for taxation |
|
|
-- |
30,100,000 |
|
| Gain
on sale of fixed assets |
|
|
(2,387,084) |
(4,685,198) |
|
|
|
|
--------------- |
--------------- |
|
| Cash
used in operating activities |
|
|
(29,300,280) |
6,827,064 |
|
| (Increase)
/ decrease in current assets |
|
|
41,584,518 |
(29,180,115) |
|
| Increase
/ (decrease) in current liabilities |
|
|
(31,517,244) |
86,137,131 |
|
|
|
|
|
|
--------------- |
--------------- |
|
| Net
cash used in operating activities before income tax |
|
(19,233,006) |
63,784,080 |
|
| Income
tax paid |
|
|
|
(11,469,419) |
(25,509,667) |
|
|
|
|
|
|
--------------- |
--------------- |
|
| Net
cash used in operating activities |
|
|
(30,702,425) |
38,274,413 |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Capital
expenditure |
|
|
(200,025) |
(2,281,061 ) |
|
| Cash
paid under self financing scheme |
|
|
-- |
(491,150) |
|
| Cash
received against return of assets |
|
|
-- |
7,997 |
|
| Increase
in long-term advances and deposits |
|
|
(471,471) |
(530,117) |
|
| Profit
received on deposit account |
|
|
52,396,278 |
46,659,080 |
|
| Proceeds
from sale of fixed assets |
|
|
2,916,250 |
6,684,800 |
|
|
|
|
--------------- |
--------------- |
|
| Net
cash from investing activities |
|
|
54,641,032 |
50,049,549 |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Payments
for assets subject to finance lease |
|
(4,478,836) |
(6,297,606) |
|
| Payment
of dividend |
|
(29,369) |
17,284,005) |
|
|
|
--------------- |
--------------- |
|
| Net
cash used in financing activities |
|
(4,508,205) |
(23,581,611) |
|
|
|
--------------- |
--------------- |
|
| Net
increase in cash and bank balances |
|
|
19,430,402 |
64,742,351 |
|
| Cash
and bank balances at the beginning of the year |
|
203,118,397 |
138,376,046 |
|
|
|
|
--------------- |
--------------- |
|
| Cash
and bank balances at the end of the year |
|
Rupees |
222,548,799 |
203,118,397 |
|
|
|
|
========== |
========== |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 1997 |
|
|
| 1.
NATURE OF BUSINESS |
|
|
| The
Company was incorporated in Pakistan as a public company limited by shares
and |
|
| quoted
on Karachi, Lahore and Islamabad Stock Exchanges. Its main business
activities are |
|
| marketing
and distribution of pesticides, seeds and others. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Overall valuation policy |
|
| These
accounts have been prepared on the basis of historical cost 'convention'. |
|
|
| 2.2
Fixed assets and depreciation |
|
| Fixed
assets are stated at cost less accumulated depreciation. Depreciation is |
|
| charged
to income applying the straight-line method based on the estimated useful |
|
| life
of the assets. Full year's depreciation is charged on additions during the
year |
|
| and
no depreciation is charged on deletions. |
|
|
| Maintenance
and normal repairs are charged-off as they are incurred. |
|
|
|
|
| Gains
and losses on disposal of assets are included in income currently. |
|
|
| Assets
subject to finance lease are stated at the lower of the present value of |
|
| minimum
lease payments under the lease agreement and the fair value of the assets |
|
| less
depreciation which is charged to income at the rates and basis applicable to |
|
| Company's
owned assets. The related obligations under the lease are accounted for |
|
| as liabilities. |
|
|
| 2.3
Staff retirement benefits |
|
| A
recognised Provident Fund Scheme is operative for all employees and |
|
| contributions
thereto are expensed. |
|
|
| 2.4 Taxation |
|
|
| The
charge for current taxation is based on "presumptive tax" under
section 80C of |
|
| the
Income Tax Ordinance, 1979. However, provision for taxation on other income |
|
| is
based on current rate of taxation. |
|
|
| 2.5
Long-term investments |
|
| These
are stated at cost. The effect of permanent diminution, if any, in the value
of |
|
| investments
are taken to profit and loss account. |
|
|
|
|
| 2.6
Stock-in-trade |
|
| Stock-in-trade
is valued at the lower of cost [determined on a first-in first-out (FIFO) |
|
| basis]
and net realisable value. |
|
|
| 2.7
Trade debts |
|
| Known
bad debts, if any, are written off and provision is made against debts |
|
| considered
doubtful. |
|
|
| 2.8
Foreign currencies |
|
| Transactions
in foreign currencies are accounted for in rupees at the rates prevailing |
|
| on
the date of transaction. Assets and liabilities in foreign currencies are
translated |
|
| into
rupees at the rate of exchange prevailing at the balance sheet date. Bills |
|
| payable
against imports covered by forward exchange contracts are converted at |
|
| the
contracted rates. Other exchange gains/losses are included in income
currently. |
|
|
| 2.9
Revenue recognition |
|
| Revenue
from sale of products is recognised upon passage of title to the customers |
|
| which
generally coincides with physical delivery and acceptance. |
|
|
| Profit
on deposit accounts is recognised on accrual basis. |
|
|
| Distribution
fee is recognised when it becomes receivable under the provisions of |
|
| relevant
agreement/contract. |
|
|
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
|
| 3.
ISSUED, SUBSCRIBED AND PAID-UP CAPITAL |
|
|
|
|
| Number of Shares |
|
|
|
| 1997 |
1996 |
|
|
|
| Issued for cash |
|
|
|
|
|
|
| 5,000,000 |
5,000,000 |
|
50,000,000 |
50,000,000 |
|
|
|
|
| Issued
as bonus shares during the year |
|
|
|
|
|
| 1,000,000 |
-- |
|
10,000,000 |
-- |
|
| --------------- |
--------------- |
|
--------------- |
--------------- |
|
| 6,000,000 |
5,000,000 |
|
Rupees |
60,000,000 |
50,000,000 |
|
| ========== |
========== |
|
|
========== |
========== |
|
|
|
|
|
Note |
1997 |
1996 |
|
| 4.
RESERVES |
|
|
|
| Revenue
reserve |
|
|
20,000,000 |
20,000,000 |
|
| Reserve
for issue of bonus shares |
|
|
-- |
10,000,000 |
|
| Accumulated
profit |
|
|
7,140,123 |
2,600,887 |
|
|
|
|
--------------- |
--------------- |
|
|
Rupees |
27,140,123 |
32,600,887 |
|
|
|
========== |
========== |
|
|
| 5.
LIABILITIES AGAINST ASSETS SUBJECT |
|
| TO
FINANCE LEASE |
|
|
| Balance
as on 1 July |
|
|
8,841,696 |
8,430,316 |
|
| Assets
acquired during the year |
|
|
10,054,000 |
6,708,986 |
|
|
|
|
--------------- |
--------------- |
|
|
|
|
18,895,696 |
15,139,302 |
|
| Less:
Payments made |
|
|
4,478,836 |
6,297,606 |
|
|
|
|
--------------- |
--------------- |
|
|
|
5.2 |
14,416,860 |
8,841,696 |
|
| Less:
Current portion of liability |
|
|
4,531,353 |
3,201,538 |
|
|
|
|
--------------- |
--------------- |
|
|
Rupees |
9,885,507 |
5,640,158 |
|
|
|
========== |
========== |
|
