| United Distributors Pakistan Limited |
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| Annual
Report 1998 |
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| 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, |
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| Abbasi
Shaheed Road, Karachi. |
|
|
| REGISTRAR |
|
| Gangjees
Investment & Finance Consultants, |
|
| Room
No. 513, Clifton Centre, Kehkashan, |
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| Block
5, Clifton, Karachi-75600. |
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| NOTICE
OF ANNUAL GENERAL MEETING |
|
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| NOTICE
is hereby given that the 16th Annual General Meeting of UNITED DISTRIBUTORS
PAKISTAN |
|
| LIMITED
will be held at Hotel Metropole, Karachi on Wednesday, March 24, 1999 at 7.00
pm to transact the |
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| following
business: |
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|
| 1.
To confirm the minutes of the last Annual General Meeting held on October 20,
1998. |
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|
|
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| 2.
To receive, consider and approve the audited accounts of the Company for the
year ended June 30, 1998, |
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| together
with the Directors' and Auditors' reports thereon. |
|
|
| 3.
To elect Directors of the Company in accordance with the provisions of the
Companies Ordinance, 1984. |
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| The
number of elected Directors of the Company fixed by the Board of Directors in
their meeting held on |
|
| March
01, 1999 is Seven (7). The retiring Directors are Mr. Rashid Abdulla, Mr.
Khalid Malik, Mr. Arshad |
|
| Abdulla,
Mr. Shahid Abdulla, Mr. Arshad Anis, Mr. Tausif Ahmed Hashmi and Mr.
Razi-ur-Rehman |
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| (N.I.T.
Nominee). |
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|
| 4.
To appoint auditors and fix their remuneration for the year 1998-99. The
present auditors M/S SIDAT |
|
| HYDER
QAMAR MAQBOOL & Co. Chartered Accountants, retire and being eligible,
offer themselves |
|
| for
re-appointment. |
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|
|
|
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|
By Order of the Board |
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|
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| Karachi:
March 01, 1999 |
|
Company Secretary |
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|
| NOTES: |
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|
| 1.
The share transfer books of the Company will remain closed from March 22,
1999 to March 28, 1999 (both |
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| 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, |
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| BLOCK
5, CLIFTON, KARACHI-75600, latest by the close of business on Saturday, March
20, 1999. |
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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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|
|
| REPORT
OF DIRECTORS |
|
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| The
Directors take pleasure in submitting their report and audited accounts of
the Company for the year ending |
|
| June
30, 1998. |
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|
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|
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| FINANCIAL
RESULTS: |
|
|
|
|
|
|
| The
net profit of the Company for the year before taxation |
10,019,458 |
|
| Provision
for taxation - current year |
|
4,200,000 |
|
|
|
|
|
---------- |
|
| Profit
after taxation |
|
|
|
5,819,458 |
|
|
|
|
|
|
| Profit
brought forward from last year |
|
7,140,123 |
|
|
|
|
|
---------- |
|
| Accumulated
profit carried forward |
|
Rupees |
12,959,581 |
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|
========== |
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|
|
| REVIEW
OF OPERATIONS: |
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|
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| In
the year ending June 30, 1998 the Company's turnover was Rs. 101.4 million as
compared to the previous |
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| Rs.
201.9 million for the same period ending June 30, 1997. |
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|
|
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| The
major reason for the short fall in sales was due to the handing over of Seeds
business to the Parent |
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| Company,
which accounted for Rs. 90 million worth of sales. |
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|
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| Despite
the fact that our business decreased by 50% we have been able to show a
healthier bottom line this year. |
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| This
has been as a consequence of our ability to sustain our Pesticide business
and go through a major exercise |
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| of
re-structuring. Our previous focus for pesticides was mainly linked to Cotton
crop but this year we strategised |
|
| ourselves
to engulf other areas like Orchards and Vegetables as we had acquired the
range of Fungicide and |
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| Miticide
products through Nichimen Corporation. |
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|
|
|
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| Our
Distribution Business unit which represents a much stable business area has
shown a positive increase in |
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| terms
of profit. This area would further strengthen as we are providing services to
our JV Partners whose |
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| business
volumes are on a steady increase. |
|
|
|
|
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| The
Power System Business which mainly covers the Solar System and Batteries,
still remains to be a tender |
|
| oriented
business. Since there were hardly any tenders called upon by the public
sector in 1998 due to the |
|
| financial
crunch, this business remained very lean. |
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|
|
|
|
| FUTURE
OUTLOOK: |
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|
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| Your
Company after going through a major re-structuring has been able to regain
its footing in the Pesticides |
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| business
and we have already started selling Nichimen's products in Pakistan. This has
not only helped to build |
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| our
image in the market but also to expand our business coverage with the type of
product line we carry. |
|
|
|
|
| Your
Company's Distribution wing which is playing a vital role in maintaining the
contour of the business is |
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| being
further streamlined to make it more efficient and cost effective. Our
endeavor is to strengthen this core |
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| business
area which will be a source of attracting business from multinational
companies in future. |
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|
|
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| Your
Company is in the process of re-entering the Seeds business through partners
having a strong research base |
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| and
Who have a long term vision of staying in the Pakistan market. We believe
this would be a business area |
|
| which
could add to the overall business and increase the profits of your Company. |
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|
|
|
| HOLDING
OF SHARES: |
|
|
|
| The
pattern of holding of shares is shown on page 22. |
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| AUDITORS: |
|
|
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| The
retiring auditors, M/S. Sidat Hyder Qamar Maqbool & Co., being eligible,
offer themselves for |
|
| re-appointment. |
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|
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|
|
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| 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 |
|
KHALID MALIK |
|
|
|
Chief Executive |
|
Director |
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|
|
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| KARACHI:
March 01, 1999. |
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| AUDITORS'
REPORT TO THE MEMBERS |
|
|
|
|
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| We
have audited the annexed balance sheet of UNITED DISTRIBUTORS PAKISTAN
LIMITED as at |
|
| 30
June 1998 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 explana- |
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| tions
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: |
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|
|
|
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| a)
in our opinion, proper books of account have been kept by the Company as
required by the |
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| Companies
Ordinance, 1984; |
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|
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|
|
|
|
| b)
in our opinion: |
|
|
|
|
|
|
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| i)
the balance sheet and profit and loss account, together with the notes
thereon, have been drawn |
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| up
in conformity with the Companies Ordinance, 1984 and are in agreement with
the books of |
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| 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 |
|
|
|
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| 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 1998 and of the profit and the changes in financial position for the
year then ended; and |
|
|
|
|
| d)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
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|
|
|
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|
SIDAT HYDER QAMAR MAQBOOL & CO. |
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| KARACHI:
March 1, 1999 |
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|
Chartered Accountants |
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|
|
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|
|
| BALANCE
SHEET AS AT 30 JUNE 1998 |
|
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|
|
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|
Note |
1998 |
1997 |
|
|
| CAPITAL
AND RESERVES |
|
|
|
|
| Authorised |
|
|
|
|
| 10,000,000
(1997:10,000,000) Ordinary shares |
|
|
| of
Rs. 10/- each |
|
|
10,000,000 |
10,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
3 |
60,000,000 |
60,000,000 |
|
| Reserves |
|
4 |
32,959,581 |
27,140,123 |
|
|
|
|
---------- |
---------- |
|
|
|
|
92,959,581 |
87,140,123 |
|
| LONG-TERM
LIABILITIES |
|
|
|
|
| Liabilities
against assets subject to finance lease |
5 |
5,872,890 |
9,885,507 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of finance lease |
|
5 |
3,817,976 |
4,531,353 |
|
| Short-term
loan and running finance |
6 |
128,130,300 |
79,663,593 |
|
| Creditors,
accrued and other liabilities |
7 |
133,251,996 |
173,718,384 |
|
|
|
|
---------- |
---------- |
|
|
|
|
265,200,272 |
257,913,330 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
8 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
Rupees |
364,032,743 |
354,938,960 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| FIXED
ASSETS - TANGIBLE |
|
|
|
| Operating
fixed assets -- at book value |
9 |
2,459,514 |
2,964,834 |
|
| Assets
subject to finance lease |
|
10 |
9,742,645 |
14,159,014 |
|
|
|
|
---------- |
---------- |
|
|
|
|
12,202,159 |
17,123,848 |
|
|
|
|
|
| LONG-TERM
INVESTMENTS-AT COST |
|
11 |
22,515,930 |
22,515,930 |
|
| LONG-TERM
LOANS AND DEPOSITS |
|
12 |
1,741,680 |
1,934,107 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stock-in-trade |
|
13 |
43,523,403 |
62,196,624 |
|
| Trade debts |
|
14 |
3,872,344 |
2,045,045 |
|
| Advances,
deposits, prepayments and |
|
|
| other
receivables |
|
15 |
30,497,334 |
26,574,607 |
|
| Short-term
investment |
|
16 |
248,703,877 |
221,500,897 |
|
| Cash
and bank balances |
|
17 |
976,016 |
1,047,902 |
|
|
|
|
---------- |
---------- |
|
|
|
|
327,572,974 |
313,365,075 |
|
|
|
|
---------- |
---------- |
|
|
|
|
Rupees |
364,032,743 |
354,938,960 |
|
|
|
|
========== |
========== |
|
|
|
|
| AUDITORS'
REPORT ANNEXED |
|
|
|
| These
accounts should be read with the annexed notes. |
|
|
|
|
|
RASHID ABDULLA |
|
KHALID MALIK |
|
|
|
Chief Executive |
|
Director |
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 1998 |
|
|
|
|
|
Note |
1998 |
1997 |
|
|
|
|
|
| Sales- net |
|
|
18 |
101,421,217 |
201,911,282 |
|
| Cost
of goods sold |
|
19 |
75,442,805 |
159,667,207 |
|
|
|
|
---------- |
---------- |
|
| Gross
profit |
|
|
25,978,412 |
42,244,075 |
|
| Distribution
fee for handling of products recovered from a |
|
| related
party/associated undertaking |
|
24,470,513 |
21,086,560 |
|
|
|
|
---------- |
---------- |
|
|
|
|
50,448,925 |
63,330,635 |
|
|
|
|
---------- |
---------- |
|
| General
and administration expenses |
20 |
18,776,579I |
14,369,660 |
|
| Selling
and distribution expenses |
|
21 |
37,117,036 |
39,547,169 |
|
|
|
|
---------- |
---------- |
|
|
|
|
45,893,615 |
53,916,829 |
|
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
4,555,310 |
9,413,806 |
|
|
|
|
---------- |
---------- |
|
| Financial
charges |
|
22 |
37,438,032 |
41,750,622 |
|
| Other
income |
|
23 |
(42,902,180) |
(39,876,052) |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
(5,464,148) |
1,874,570 |
|
| Profit
before taxation |
|
|
10,019,458 |
7,539,236 |
|
| Provision
for taxation - current year |
24 |
4,200,000 |
3,000,000 |
|
|
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
|
5,819,458 |
4,539,236 |
|
| Accumulated
profit brought forward |
|
|
7,140,123 |
2,600,887 |
|
|
|
|
---------- |
---------- |
|
| Accumulated
profit carried forward |
|
Rupees |
12,959,581 |
7,140,123 |
|
|
|
|
========== |
========== |
|
|
|
|
| These
accounts should be read with the annexed notes. |
|
|
|
|
|
RASHID ABDULLA |
|
KHALID MALIK |
|
|
Chief Executive |
|
Director |
|
|
|
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE YEAR ENDED 30 JUNE 1998 |
|
|
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Profit
after taxation |
|
|
5,819,458 |
4,539,236 |
|
| Adjustment
to reconcile profit to net cash provided |
|
|
|
| by
operating activities |
|
|
|
|
| Depreciation |
|
|
5,176,621 |
6,036,536 |
|
| Profit
on deposit account |
|
|
(40,362,093) |
(37,488,968) |
|
| Provision
for taxation |
|
|
- |
- |
|
| Gain
on sale of fixed assets |
|
|
(2,540,087) |
(2,387,084) |
|
|
|
|
---------- |
---------- |
|
| Cash
used in operating activities |
|
|
(31,906,101) |
(29,300,280) |
|
| (Increase)/decrease
in current assets |
|
(1,457,912) |
21,083,621 |
|
| Increase/(decrease)
in current liabilities |
|
8,000,319 |
(31,517,244) |
|
|
|
|
---------- |
---------- |
|
| Net
cash used in operating activities before income tax |
(25,363,694) |
(39,733,903) |
|
| Income
tax paid |
|
|
(7,685,910) |
(11,469,419) |
|
|
|
|
---------- |
---------- |
|
| Net
cash used in operating activities |
|
(33,049,604) |
(51,203,322) |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Capital
expenditure |
|
|
(432,842) |
(200,025) |
|
| Cash
paid under self financing scheme |
|
- |
- |
|
| Cash
received against return of assets |
|
- |
- |
|
| Increase
in long-term advances and deposits |
|
192,424 |
(471,471) |
|
| Profit
received on deposit account |
|
|
35,226,130 |
52,396,278 |
|
| Proceeds
from sale of fixed assets |
|
|
2,718,000 |
2,916,250 |
|
|
|
|
---------- |
---------- |
|
| Net
cash from investing activities |
|
|
37,703,712 |
54,641,032 |
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Payments
for assets subject to finance lease |
|
(4,725,994) |
(4,478,836) |
|
| Payment
of dividend |
|
|
|
- |
(29,369) |
|
|
|
|
---------- |
---------- |
|
| Net
cash used in financing activities |
|
(4,725,994) |
(4,508,205) |
|
|
|
|
---------- |
---------- |
|
| Net
increase in cash and bank balances |
|
(71,886) |
(1,070,495) |
|
| Cash
and bank balances at the beginning of the year |
|
1,047,902 |
2,118,397 |
|
|
|
|
---------- |
---------- |
|
| Cash
and bank balances at the end of the year |
Rupees |
976,016 |
1,047,902 |
|
|
|
|
========== |
========== |
|
|
|
RASHID ABDULLA |
|
KHALID MALIK |
|
|
Chief Executive |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 1998 |
|
|
| 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 |
|
| and
other products. |
|
|
| 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 payment |
|
| 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. Provision for diminution other than temporary, 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. |
|
|
|
|
|
|
Note |
1998 |
1997 |
|
| 3.
ISSUED, SUBSCRIBED AND PAID-UP CAPITAL |
|
| Fully
paid Ordinary shares of Rs. 10/- each |
|
|
|
|
| Number of shares |
|
|
|
| 1998 |
1997 |
|
|
|
|
|
|
| Issued for cash |
|
|
|
|
|
|
| 5,000,000 |
5,000,000 |
|
|
50,000,000 |
50,000,000 |
|
|
|
|
| Issued
as bonus shares |
|
|
|
|
|
|
| 1,000,000 |
1,000,000 |
|
|
10,000,000 |
10,000,000 |
|
| ---------- |
---------- |
|
|
|
---------- |
---------- |
|
| 6,000,000 |
6,000,000 |
|
|
Rupees |
60,000,000 |
60,000,000 |
|
| ========== |
========== |
|
|
|
========== |
========== |
|
|
|
|
|
|
| 4. RESERVES |
|
|
|
|
|
| Revenue
reserve |
|
|
20,000,000 |
20,000,000 |
|
| Accumulated
profit |
|
|
12,959,581 |
7,140,123 |
|
|
|
|
---------- |
---------- |
|
|
|
Rupees |
32,959,581 |
27,140,123 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
Note |
1998 |
1997 |
|
| 5.
LIABILITIES AGAINST ASSETS SUBJECT |
|
| TO
FINANCE LEASE |
|
|
| Balance
as on 1 July |
|
|
14,416,860 |
8,841,696 |
|
| Assets
acquired during the year |
|
|
- |
10,054,000 |
|
|
|
|
---------- |
---------- |
|
|
|
|
14,416,860 |
18,895,696 |
|
| Less:
Payments made |
|
|
4,725,994 |
4,478,836 |
|
|
|
|
---------- |
---------- |
|
|
|
|
9,690,866 |
14,416,860 |
|
| Less:
Current portion of liability |
|
|
3,817,976 |
4,531,353 |
|
|
|
|
---------- |
---------- |
|
|
|
|
Rupees |
5,872,890 |
