| Century Paper & Board Mills Limited |
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| OUR
MISSION: STRIVE TOGETHER FOR EXCELLENCE |
|
|
| *
CENTURY excels in manufacturing & marketing quality |
|
| Paper
& Board for packaging. |
|
|
| *
Being a customer focused Company, CENTURY is always |
|
| ready
to accept challenges for achieving its mission. |
|
|
| *
Its professional & motivating management style ensures |
|
| customer
satisfaction through continuous improvement in |
|
| quality
& productivity. |
|
|
| *
CENTURY values the social & economic well being of |
|
| its
partners and strives for a harmonious environment |
|
| conducive
to team work. |
|
|
|
|
| Contents |
|
|
| Corporate
Information |
|
|
| Notice
of Meeting |
|
|
| Year at a Glance |
|
|
|
| Statement
of Value Added |
|
|
| Directors'
Review |
|
| Auditors'
Report to the Members |
|
|
| Balance Sheet |
|
|
|
| Profit
& Loss Account |
|
|
| Cash
flow Statement |
|
|
| Statement
of Changes in Equity |
|
|
| Notes
to the Accounts |
|
| Financial
Review |
|
|
| Statement
under Section 237 (1) of the Companies |
|
| Ordinance, 1984 |
|
|
|
| Pattern
of Holding of Shares |
|
|
| Consolidated
Financial Statements |
|
| Auditors'
Report to the Members |
|
|
| Consolidated
Balance Sheet |
|
|
| Consolidated
Profit & Loss Account |
|
| Consolidated
Cash flow Statement |
|
|
| Consolidated
Statement of Changes in Equity |
|
| Notes
to the Consolidated Financial Statements |
|
| Report
and Financial Statements of Century Power |
|
| Generation
Limited- subsidiary Company |
|
|
|
| Corporate
Information |
|
|
| BOARD
OF DIRECTORS |
|
| Iqbalali
Lakhani - Chairman |
|
| M.
Rafi Chawla - Chief Executive & Managing Director |
|
| Zulfiqarali
Lakhani |
|
| Amin
Mohammed Lakhani |
|
| Tasleemuddin
Ahmed Batlay |
|
| Javed
Omer Vohra |
|
| Shamim
Ahmad Khan- Nominee Director (NIT) |
|
|
| ADVISOR |
|
| Sultanali
Lakhani |
|
|
| COMPANY
SECRETARY |
|
| Ramzanali
Halani |
|
|
| EXECUTIVE
COMMITTEE |
|
| M. Rafi Chawla |
|
| Aftab Ahmad |
|
| Mir Nadir Ali |
|
| Zafar
Iqbal Sobani |
|
|
| AUDITORS |
|
| Ford,
Rhodes, Robson, Morrow |
|
| Chartered
Accountants |
|
|
| BANKERS |
|
| American
Express Bank Limited |
|
| ANZ
Grindlays Bank Limited |
|
| Credit
Agricole Indosuez |
|
| Citibank N.A. |
|
| Emirates
Bank International PJSC |
|
| Habib
Bank Limited |
|
| Mashreq
Bank Psc |
|
| National
Bank of Pakistan |
|
| Oman
International Bank S.A.O.G. |
|
| Standard
Chartered Bank |
|
| Societe
Generale, The French & International Bank |
|
| The
Hong Kong & Shanghai Banking Corporation Limited |
|
|
| HEAD
OFFICE, CORPORATE OFFICE & |
|
| REGIONAL
SALES OFFICE (SOUTH) |
|
| Lakson
Square, Building No. 2 |
|
| Sarwar
Shaheed Road, Karachi-74200, Pakistan |
|
| Phones:
(021) 5689081- 89 |
|
| Fax:
(021) 5681163 & 5683410 |
|
| E-Mail:
cpbm@cyber.net.pk |
|
|
| REGISTERED
OFFICE & REGIONAL SALES OFFICE (NORTH) |
|
| 41-K,
Model Town, Lahore, Pakistan |
|
| Phone:
(042) 5880697 |
|
|
| MILLS |
|
| Jamber
Khurd, Bhai Pheru, Tehsil Chunian |
|
| Lahore-Multan
Road, District Kasur, Pakistan |
|
| Phones:
(04951) 388151 & 388200 |
|
|
|
|
| Notice
of Meeting |
|
|
| NOTICE
IS HEREBY GIVEN that the 17th Annual General Meeting of CENTURY PAPER &
BOARD MILLS LIMITED |
|
| will
be held on Tuesday November 21, 2000 at 10:30 a.m. at Avari Renaissance
Towers Hotel, Fatima Jinnah Road, |
|
| Karachi
to transact the following business: |
|
|
| 1.
To receive, consider and adopt the audited Balance Sheet and Profit and Loss
account for the year ended |
|
| June
30, 2000 and the Directors' and Auditors' Reports thereon. |
|
|
| 2.
To declare a dividend @ 20% i.e. Rs. 2.00 per share of Rs. 10/- each. |
|
|
| 3.
To appoint Auditors and to fix their remuneration. |
|
|
|
|
By Order of the Board |
|
|
|
|
|
|
|
|
|
Ramzanali Halani |
|
| DATED:
October 05, 2000 |
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The share transfer books of the Company will remain closed from November 08,
2000 to November 21, 2000 |
|
| both
days inclusive. Transfers received in order by the Corporate Office of the
Company situated at Lakson |
|
| Square,
Building No. 2, Sarwar Shaheed Road, Karachi upto November 07, 2000 will be
considered in time for |
|
| entitlement
of dividend. |
|
|
|
|
|
|
| 2.
A member who has deposited his/her shares into Central Depository Company of
Pakistan Limited, must bring |
|
| his/her
participant's ID number and account/sub-account number alongwith original
National Identity Card (NIC) |
|
| or
original Passport at the time of attending the meeting. |
|
|
| 3.
A member entitled to attend and vote at the general meeting may appoint
another member as his proxy to attend, |
|
| speak
and vote instead of him/her. |
|
|
|
|
|
| 4.
If a proxy is granted by a member who has deposited his/her shares in Central
Depository Company of Pakistan |
|
| Limited,
the proxy must be accompanied with participant's ID number and
account/sub-account number |
|
| alongwith
attested photocopies of NIC or the Passport of the beneficial owner.
Representatives of corporate |
|
| members
should bring the usual documents required for such purpose. |
|
|
|
|
| 5.
Forms of proxy to be valid must be received by the Company not later than 48
hours before the time of the |
|
| meeting. |
|
|
|
|
| 6.
Members are requested to notify the Company promptly of any change in their
addresses. |
|
|
| 7.
Form of proxy is enclosed herewith. |
|
|
|
| Year
at a glance |
|
|
|
|
June 30, |
June 30, |
|
|
|
2000 |
1999 |
|
|
| Sales Volume |
|
Tonnes |
60,120 |
58,014 |
|
| Gross Sales |
|
Rs. Million |
2,006 |
1,858 |
|
| Net Sales |
|
Rs. Million |
1,743 |
1,629 |
|
| Profit
before taxation |
|
Rs. Million |
151 |
107 |
|
| Taxation |
|
Rs. Million |
56 |
34 |
|
| Profit
after taxation |
|
Rs. Million |
96 |
74 |
|
| Shareholders'
fund |
|
Rs. Million |
715 |
683 |
|
| Total assets |
|
Rs. Million |
1,361 |
1,344 |
|
| Dividend- Cash |
|
%age |
20 |
15 |
|
| Earnings
per share |
|
Rupees |
3.04 |
2.35 |
|
| Number
of employees |
|
|
874 |
857 |
|
|
|
|
2000 |
%age |
1999 |
%age |
|
|
|
Rs. 000 |
|
Rs. 000 |
|
|
|
| Wealth
Generated |
|
| Total
revenue, net of sales tax |
1,781,992 |
|
1,685,226 |
|
|
| Bought-immaterial
& services |
(1,251,843) |
|
(1,207,195) |
|
|
|
|
------------------ |
|
------------------ |
|
|
|
|
530,149 |
100 |
478,031 |
100 |
|
|
|
========== |
|
========== |
|
| Wealth
Distributed |
|
|
|
| To Employees |
|
| Salaries,
benefits & related costs |
102,275 |
19 |
89,516 |
20 |
|
|
|
|
| To Government |
|
| Excise
duty, income tax, import duty (exclusive of |
|
| capital
items) and Worker's Fund |
197,932 |
38 |
163,446 |
33 |
|
|
|
|
| To
providers of Capital |
|
| Dividend
to shareholders |
62,842 |
12 |
47,132 |
10 |
|
|
|
|
| Mark-up/interest
expenses on borrowed funds |
55,333 |
10 |
77,063 |
16 |
|
|
| Retained
for reinvestment & future growth |
|
| Depreciation
& retained profit |
111,767 |
21 |
100,874 |
21 |
|
|
|
------------------ |
|
------------------ |
|
|
|
530,149 |
100 |
478,031 |
100 |
|
|
========== |
|
========== |
|
|
|
| Directors'
Review |
|
|
| The
Directors have pleasure in presenting their annual report together with the
Company's audited accounts |
|
| for
the year ended June 30, 2000. |
|
|
| MARKETING
AND BUSINESS SCENARIO |
|
| We
are pleased to report that your Company Al-Hamdolillah has achieved two
milestones in the year under |
|
| review.
Firstly, it has joined the club of "Rupees two billion turnover"
company and secondly it has sold over |
|
| 60,000
Metric tons achieving good level of efficiency. |
|
|
| The
packaging industry is directly dependent upon the economic activities. The
current economic scenario |
|
| has
affected almost all sectors of the commercial activity and as such had a
bearing on the paper industry |
|
| as
well. In spite of this your Company has AI-Hamdolillah achieved a volume
growth of 4% this year as |
|
| compared
to last year and in terms of value a positive growth of 8%. This growth has
been achieved only |
|
| because
of consistent quality of products and as a result of customer focus approach
and the availability of |
|
| a
product portfolio catering to the requirement of our customers. |
|
|
| The
selling prices of your Company's products are dependent on the prevailing
international prices |
|
| particularly
from the Far Eastern Countries. Due to favourable market conditions we were
able to obtain |
|
| reasonably
favourable price increases in the second half of the year, which were much
awaited. This increase |
|
| in
the prices have helped considerably in improving Company's gross profit
during this period. |
|
|
| MANUFACTURING |
|
| We
are happy to report that during the year all the production facilities at the
Mills performed well and in |
|
| accordance
with its actual attainable practical capacity and there were no major
outages. Certain machines |
|
| integrated
with computer systems also functioned successfully as they were Y2K
compliant. |
|
|
| Our
production team was able to achieve positive savings in utilisation of
electricity, steam and rationalization |
|
| of
fibre inputs visa vis last year which further helped us to improve bottom
line. |
|
|
| FINANCIAL
RESULTS |
|
| In
year 1999/2000 the Company earned a pre-tax profit of Rs. 151.15 million
compared to Rs. 107.46 million |
|
| last
year, an increase of 41%. The profit after tax also increased to Rs. 95.46
million during the year compared |
|
| to
Rs. 73.73 million of last year. This was achieved due to increase in volume,
improvement in sales prices |
|
| and
running the plant with improved efficiency compared to last year coupled with
lower financial charges. |
|
|
| Your
Board recommends that the net profit of Rs. 95.46 Million earned during the
year together with the |
|
| balance
of unappropriated profit of Rs. 0.44 million brought forward from the prior
year be appropriated as |
|
| follows: |
|
|
|
|
(Rupees 000) |
|
|
| Profit
before taxation |
|
151,151 |
|
| Taxation |
|
|
(55,692) |
|
|
|
|
------------------ |
|
| Profit
after taxation |
|
95,459 |
|
| Unappropriated
profit brought forward |
|
442 |
|
|
|
|
------------------ |
|
|
|
95,901 |
|
| Appropriation: |
|
|
|
|
| Proposed
Dividend at Rs. 2/- per share |
|
(62,842) |
|
| Transfer
to general reserve |
|
(33,000) |
|
|
|
|
------------------ |
|
|
|
|
(95,842) |
|
|
|
|
------------------ |
|
| Unappropriated
Profit carried forward |
|
59 |
|
|
|
|
========== |
|
| Earnings
per Share |
|
Rs. 3.04 |
|
|
|
|
========== |
|
|
| CONTRIBUTION
TO THE NATIONAL ECONOMY |
|
| Your
Company is showing constant growth in its contribution to the national
economy. For the year |
|
| 1999/2000,
it has contributed Rs. 431 million as compared to Rs. 387 million last year
i.e. an increase of 11%. |
|
| In
addition to the direct contribution in government revenue, your Company is
constantly providing new job |
|
| opportunities
to technically skilled people. The company is also proud of making available
products which |
|
| are
substituting imports resulting in favourable impact on country's foreign
exchange reserve. |
|
|
| ISO
CERTIFICATION |
|
| As
reported in our last half yearly report your Company received certification
under ISO 9002 covering the |
|
| entire
operation of the Mills in the beginning of the year 2000. The benefits
associated with this Quality |
|
| Management
System has started to show results and it is hoped that the strong base laid
down will result |
|
| in
more benefits in the future. |
|
|
| SUBSIDIARY
COMPANY'S OPERATIONS |
|
| The
upsurge in prices of furnace oil has affected the profitability of Century
Power Generation Ltd, our |
|
| subsidiary
and its operating profit decreased from Rs. 78.61 million last year to Rs.
58.34 million in year |
|
| 1999/2000,
this has consequently resulted in a decrease of net profit to Rs. 47.22
million as compared to |
|
| Rs.
60.50 million last year. The dividend distribution of Rs. 25 million by
Century Power Generation Limited |
|
| has
been reflected in the current year as compared to Rs. 45 million last year.
The future profitability of our |
|
| subsidiary
is dependent upon the furnace oil prices and on upward revision of power
tariff by WAPDA. |
|
|
| INVESTMENTS |
|
| During
the year under review, Company has incurred capital expenditure of Rs. 73
million. In addition to |
|
| replacement
and balancing of existing assets the capex also included allocation of funds
on programmes |
|
| relating
to improvement in quality and plant efficiencies to meet the challenges of
future for satisfying the |
|
| need
of the customers for packaging boards. |
|
|
| In
this regard a major BMR on our existing coating plants is being carried out
at a cost of over Rs. 120 million |
|
| which
will substantially enhance the quality of our coated product, this project is
expected to be completed |
|
| in
the first quarter of year 2001. The Company has also moved ahead in getting
supply of natural gas for its |
|
| production
facilities to substitute costly furnace oil which is in line with the
Government policy of substituting |
|
| energy
resources which drain country's foreign exchange reserves. Necessary
approvals have been |
|
| received
and upfront payment for gas pipeline and ancillary equipment has already been
made. We hope that |
|
| before
the 1st quarter of 2001, gas supply will be available at our production
facilities. |
|
|
| BOARD
OF DIRECTORS |
|
| Since
the last review, elections for the Board of Directors took place on June 22,
2000. We are pleased to |
|
| welcome
Mr. Shamim Ahmad Khan representing National Investment Trust (NIT) and Mr.
Javed Omer Vohra |
|
| as
Directors on our Board. The Board also wishes to place on record its
appreciation of the valuable services |
|
| rendered
by the outgoing Directors, Mr. Syed Shahabat Hussain and Mr. Aziz Ebrahim. |
|
|
| ACKNOWLEDGEMENTS |
|
| Our
customers have supported us fully and we highly appreciate this valuable
support and we will strive our |
|
| best
to continue this partnership by providing them quality products and services. |
|
|
| We
would also like to thank Company's bankers, leasing, insurance companies and
shareholders for their |
|
| continued
support and encouragement. |
|
|
| The
employees and management staff are continuously playing their role in the
growth of your Company |
|
| which
is very much appreciated and commendable. |
|
|
| AUDITORS |
|
| The
present Auditors, M/s Ford, Rhodes, Robson, Morrow, retire and being
eligible, offer themselves for re- |
|
| appointment. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| A
pattern of shareholding of the company as at June 30, 2000 is included in
this report. |
|
|
| FUTURE
OUTLOOK |
|
| The
Company is optimistic that the Country will be out of the current economic
recession soon. The new set |
|
| up
in the Country is laying great emphasis on the documentation of the economy
and is making all out efforts |
|
| in
bringing out a cultural change in making people contribute to the National
Exchequer by paying taxes on |
|
| their
income which is to be backed up by prudent use of government revenues. Your
Company will be a |
|
| beneficiary
as this will lead to a level playing field to all the players of this
industry. |
|
|
| The
Company's Management is studying the expansion and diversification plans for
future growth of the |
|
| business
with possible foreign collaboration. |
|
|
| Al-Hamdolillah,
we have shown gradual and consistent improvement in our market share during
the last |
|
| decade
and we hope to maintain and improve Century's share in paper and board
industry by giving even |
|
| greater
performance in the area of quality of product and providing customers
tailored solutions to their |
|
| problems. |
|
|
| The
Company continues to lay focus on operational efficiencies by resorting to
automation, application of |
|
| new
developments in narrowing the wastages resulting in controlled costs and
better management of working |
|
| capital
through which we hope to achieve sustainable performance in future as well. |
|
|
|
|
On behalf of the Board of Directors |
|
|
|
|
|
|
|
|
|
Iqbalali Lakhani |
|
| Karachi:
September 22, 2000 |
|
Chairman |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Century
Paper & Board Mills Limited |
|
|
|
| Accounts
for the year ended June 30, 2000 |
|
|
|
|
|
|
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of CENTURY PAPER & BOARD MILLS
LIMITED as at June 30, 2000 and |
|
| the
related profit and loss account, cash flow statement and statement of changes
in equity, 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 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, cash flow statement and statement of changes in equity,
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 June
30, 2000 and of the profit, |
|
| cash
flows and changes in equity 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. |
|
|
|
|
|
FORD, RHODES, ROBSON, MORROW |
|
| Karachi:
September 22, 2000 |
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at June 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees in
thousands) |
|
|
| ASSETS |
|
|
|
| NON-CURRENT
ASSETS |
|
| Fixed
assets - Tangible |
|
| Operating
assets |
|
3 |
718,801 |
699,069 |
|
| Capital
work-in-progress |
|
4 |
11,453 |
37,554 |
|
|
------------------ |
------------------ |
|
|
730,254 |
736,623 |
|
|
| Long-term
investment |
|
5 |
100,000 |
100,000 |
|
|
| Long-term loans |
|
|
6 |
424 |
603 |
|
|
| Long-term
deposits and prepayment |
7 |
6,292 |
8,003 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
838,970 |
845,229 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
8 |
100,763 |
101,681 |
|
|
| Stock-in-trade |
|
|
9 |
198,346 |
206,949 |
|
|
| Trade debts |
|
|
10 |
128,756 |
109,535 |
|
|
| Loans,
advances and other receivables |
11 |
28,077 |
18,128 |
|
|
| Deposits
and prepayments |
|
12 |
2,454 |
6,823 |
|
|
| Taxation - net |
|
|
13 |
39,679 |
45,118 |
|
|
| Cash
and bank balances |
|
14 |
23,628 |
10,499 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
521,703 |
498,733 |
|
|
|
|
------------------ |
------------------ |
|
|
| TOTAL
ASSETS |
|
1,360,673 |
1,343,962 |
|
|
|
|
========== |
========== |
|
|
| EQUITY
AND LIABILITIES |
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorized
capital |
|
| 35,000,000
ordinary shares of Rs, 10 each |
|
350,000 |
350,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
15 |
314,213 |
314,213 |
|
| Reserves |
|
16 |
401,104 |
368,487 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
715,317 |
682,700 |
|
|
| NON-CURRENT
LIABILITIES |
|
| Redeemable
capital |
|
17 |
46,667 |
62,222 |
|
|
| Liabilities
against assets subject to finance lease |
18 |
35,437 |
52,270 |
|
|
| Deferred
liabilities |
|
19 |
94,004 |
70,004 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
176,108 |
184,496 |
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of - redeemable capital |
17 |
22,222 |
62,709 |
|
|
|
- liabilities against
assets |
|
|
|
|
|
subject to finance lease |
18 |
16,833 |
17,977 |
|
|
| Short-term
finances |
|
20 |
245,437 |
201,883 |
|
|
| Creditors,
accrued and other liabilities |
21 |
121,914 |
147,065 |
|
|
| Proposed
dividend |
|
|
62,842 |
47,132 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
469,248 |
476,766 |
|
|
| CONTINGENCIES
AND COMMITMENTS |
22 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
| TOTAL
EQUITY AND LIABILITIES |
|
1,360,673 |
1,343,962 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Iqbalali Lakhani |
|
M. Rafi Chawla |
|
|
Chairman |
|
Chief Executive |
|
|
|
|
|
|
|
| Profit
and Loss Account |
|
| for
the, year ended June 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees in
thousands) |
