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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)
Sales 23 1,742,924 1,629,436
Cost of goods sold 24 (1,517,045) (1,451,149)
------------------ ------------------
Gross profit 225,879 178,287
Other income 25 14,068 10,790
Administrative and selling expenses 26 (47,135) (40,828)
Other charges 27 (11,328) (8,728)
------------------ ------------------
Operating profit 181,484 139,521
Financial charges 28 (55,333) (77,063)
Dividend income from subsidiary company 25,000 45,000
------------------ ------------------
Profit before taxation 151,151 107,458
Taxation 30 (55,692) (33,730)
------------------ ------------------
Profit after taxation 95,459 73,728
Unappropriated profit brought forward 442 846
------------------ ------------------
Profit available for appropriation 95,901 74,574
Appropriations:
Proposed dividend Rs. 2.00 (20%) per share
[1999: Rs. 1.50 (15%) per share] (62,842) (47,132)
Transfer to general reserve (33,000) (27,000)
------------------ ------------------
(95,842) (74,132)
------------------ ------------------
Unappropriated profit carried forward 59 442
========== ==========
Basic earnings per share 31 3.04 2.35
========== ==========
The annexed notes form an integral part of these accounts.
Iqbalali Lakhani M. Rafi Chawla
Chairman Chief Executive
Cash Flow Statement
for the year ended June 30, 2000
Note 2000 1999
(Rupees in thousands)
CASH FLOW FROM OPERATING ACTIVITIES
Cash generated from operations 32 233,403 170,315
Financial charges paid (67,440) (87,604)
Tax paid (29,141) (26,480)
Long-term loans 179 140
Long-term deposits and prepayment (289) (1,507)
------------------ ------------------
Net cash inflow from operating activities 136,712 54,864
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure (73,384) (67,666)
Dividend received 25,000 45,000
Proceeds from sale of fixed assets 2,276 3,978
Return on short-term investment and deposits received -- 206
------------------ ------------------
Net cash (outflow)from investing activities (46,108) (18,482)
CASH FLOW FROM FINANCING ACTIVITIES
Redeemable capital 20,000 50,000
Redemption of redeemable capital (76,042) (70,759)
Repayment of long-term loans -- (17,000)
Obligations under finance lease -- 16,045
Repayment of leasing finance (17,977) (17,404)
Dividend paid (47,010) (97)
------------------ ------------------
Net cash (outflow) from financing activities (121,029) (39,215)
------------------ ------------------
Net decrease in cash equivalents (30,425) (2,833)
Cash and cash equivalents at the beginning of the year (191,384) (188,551)
------------------ ------------------
Cash and cash equivalents at the end of the year (221,809) (191,384)
========== ==========
CASH AND CASH EQUIVALENTS COMPRISE:
Cash and bank balances 23,628 10,499
Short-tern finances (245,437) (201,883)
------------------ ------------------
(221,809) (191,384)
========== ==========
The annexed notes form an integral part of these accounts.
Iqbalali Lakhani M. Rafi Chawla
Chairman Chief Executive
Statement of Changes in Equity
for the year ended June 30, 2000
Issued, subscribed
and paid-up Reserves Unappropriated
capital Capital Revenue profit Total
(Rupees In thousands)
Balance as at July 1, 1998 285,648 113,610 256,000 846 656,104
Profit after taxation -- -- -- 73,728 73,728
Bonus shares issued during the year 28,565 (28,565) -- -- --
Proposed dividend -- -- -- (47,132) (47,132)
Transfer to general reserve during the year -- -- 27,000 (27,000) --
------------------ ------------------ ------------------ ------------------ ------------------
Balance as at June 30, 1999 314,213 85,045 283,000 442 682,700
Profit after taxation -- -- -- 95,459 95,459
Proposed dividend -- -- -- (62,842) (62,842)
Transfer to general reserve during the year -- -- 33,000 (33,000) --
------------------ ------------------ ------------------ ------------------ ------------------
Balance as at June 30, 2000 314,213 85,045 316,000 59 715,317
========== ========== ========== ========== ==========
The annexed notes form an integral part of these accounts.
Iqbalali Lakhani M. Rafi Chawla
Chairman Chief Executive
Notes to the Accounts
for the year ended June 30, 2000
1. THE COMPANY AND ITS OPERATIONS
The company is incorporated in Pakistan as a public limited company and is quoted on Stock Exchanges in
Pakistan. The company's principal business is production and sale of paper and board of several varieties.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting convention
These accounts have been prepared on the basis of the historical cost convention.
2.2 Taxation
Current
Provision for current taxation is based on taxable income at the current rates of taxation after taking into
account tax credits and rebates available, if any.
Deferred
The company accounts for deferred taxation on all major timing differences using the liability method,
except for tax effects of those timing differences which are not likely to reverse in the foreseeable future
(Refer to note 19.1).
2.3 Staff retirement benefits
The company contributes to a provident fund scheme established since July 1, 1986 which covers all
permanent employees. Equal contributions are made by the company and the employees.
Gratuity payable to staff prior to the introduction of the provident fund scheme is accounted for as and
when paid as it is not considered material.
2.4 Tangible fixed assets and depreciation
These are stated at cost less accumulated depreciation except freehold land and capital work-in-
progress which are stated at cost.
Depreciation on operating fixed assets is provided on a straight line basis.
Rates of depreciation, which are disclosed in note 3, are designed to write off the cost over the estimated
useful lives of the assets.
Normal repairs and maintenance costs are charged to the profit and loss account as and when incurred.
Major renewals and improvements are capitalised.
Gains and losses on disposal of fixed assets are taken to the profit and loss account.
2.5 Assets subject to finance lease
Assets held under finance leases are stated at cost less depreciation.
The outstanding obligations under the lease less finance charges allocated to future periods are shown
as a liability.
The financial charges are allocated to accounting periods in a manner so as to provide a constant
periodic rate of charge on the outstanding liability.
Depreciation is charged at the same rates as company owned assets.
2.6 Stores and spares
Stores and spares are stated at cost which is determined by the moving average method except those
in transit and in bond which are valued at actual cost. Provision is made for slow moving and obsolete
items.
2.7 Stock-in-trade
Raw material, work-in-process and finished goods are stated at the lower of cost and estimated net
realisable value. Cost is arrived at by using the moving average basis except for goods in transit and
in bond which are valued at actual cost. Cost of work-in-process and finished goods include an
appropriate portion of production overheads.
2.8 Trade debts
Debts considered irrecoverable are written off and provision is made for debts considered doubtful.
2.9 Foreign Currency translation
Transactions in foreign currencies are translated into rupees at the rates of exchange prevailing on the
date of transactions. Assets and liabilities in foreign currencies are translated into rupees at the rates
of exchange prevailing at the balance sheet date or at rates of exchange fixed under contractual
arrangements. Exchange gains and losses are included in income currently.
2.10 Long-term investments
These are stated at cost. However, provisions against diminution in value are made, if considered
permanent.
2.11 Revenue recognition
Sales are recorded on dispatch of goods to customers. Dividend income is recognised when the right
to the dividend is established.
3. OPERATING ASSETS
The following is a statement of operating assets:
Accumulated Accumulated
Disposals/ Depreciation Depreciation Disposals/ depreciation Book value
Cost as at adjustments*/ Cost as at as at July charge for the adjustments*/ as at June as at June Depreciation
Description July 1, 1999 Additions retirement** June 30, 2000 1, 1999 year retirement*' 30, 2000 30, 2000 rate %
(Rupees in thousands)
Freehold land (Note 3.1)  33,914 -- -- 33,914 -- -- -- -- 33,914 --
Buildings on freehold land  121,411 15,429 -- 136,840 18,693 3,601 -- 22,294 114,546 2.5
Plant and Machinery
(Note 3.2) 856,940 78,280 (68) 944,425 380,189 64,203 (68) 443,707 500,718 5 to 20
14,860* 4,660*
(5,587)** (5,277)**
Furniture and fixtures 5,895 504 (94) 6,305 3,430 596 (93) 3,933 2,372 10 to 20
Vehicles 4,431 302 (626) 4,107 3,106 635 (548) 3,193 914 20
Office equipment 9,978 2,565 (814) 11,729 7,013 1,671 (601) 8,083 3,646 10 to 33
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
1,032,569 97,080 7,671 1,137,320 412,431 70,706 (1,927) 481,210 656,110
Assets held under finance lease
Plant and machinery 95,128 2,405 (14,860)* 82,673 16,198 8,444 (4,660) 19,982 62,691 5 to 20
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
1,127,697 99,485 (7,189) 1,219,993 428,629 79,150 (6,587) 501,192 718,801
========== ========== ========== ========== ========== ========== ========== ========== ==========
1999 1,096,860 35,809 (4,972) 1,127,697 356,121 74,278 (1,770) 428,629 699,069
========== ========== ========== ========== ========== ========== ========== ========== ==========
3.1 Two acres of land have been leased for 20 years, extendable with mutual consent at the rate of Rs. 15,000
per month per acre subject to periodical increases to Century Power Generation Limited, a subsidiary
company.
3.2 Included in plant and machinery are some items with a cost of Rs. 11 million [W.D.V. Rs. 9.21 million (1999:
Rs. 9.76 million)] which have been installed at Century Power Generation Limited, a subsidiary company for
the full benefit of the company.
** This includes some items which have been retired and are to be disposed as scrap in the subsequent year.
These have therefore been transferred to other assets (note- 11.2) at net realisable value.
3.3 The depreciation charges for the year has been allocated as follows:
2000 1999
(Rupees in thousands)
Cost of goods sold 76,119 71,390
Administrative and selling expenses 3,031 2,888
------------------ ------------------
79,150 74,278
========== ==========
3.4 The following assets were disposed off during the year:
Accumulated Written Sale Mode of
Description Cost depreciation down value proceeds disposal Sold to
(Rupees in thousands)
Plant and machinery 68 68 -- 1,100 Negotiation M/s. Automation Aids -
Karachi.
Furniture and fixtures 94 93 1 -- Written off
Vehicle 19 19 285 Negotiation Mr. Mohammed Said.
Karachi.
Vehicle 28 28 -- 300 Negotiation Mr. Amities Malice-
Karachi.
Vehicle 7 7 -- 70 Negotiation Mr. Mbabane Ahmed Khan-
Karachi.
Vehicle 349 349 -- 306 Negotiation Mr. Amanullah Khan-
Karachi.
Vehicle 60 1 59 60 Insurance Century lnsurance Co. Ltd.
claim an associated company
Vehicles 103 100 3 34 Negotiation Company employees
Vehicle 60 44 16 19 Negotiation Mr. Saqlain-
an ex-employee
Office equipment 220 197 23 Written off
Office equipment 31 28 3 2 Negotiation Company employees
Office equipment 265 133 132 70 Negotiation Office Automation System
(Pvt) Ltd.- Karachi.
Office equipment 298 243 55 30 Negotiation Digital Communication
(Pvt) Ltd.- Karachi.
------------------ ------------------ ------------------ ------------------
1,602 1,310 292 2,276
========== ========== ========== ==========
1999 4,972 1,770 3,202 3,978
========== ========== ========== ==========
Note 2000 1999
(Rupees in thousands)
4. CAPITAL WORK-IN-PROGRESS
This consists of:
Civil works 321 7,495
Plant and machinery [including in transit
Rs. 5.09 million (1999 Rs. 17.47 million)] 9,430 25,115
Advance to suppliers 1,702 4,944
------------------ ------------------
11,453 37,554
========== ==========
5. LONG-TERM INVESTMENT
Unquoted
Century Power Generation Limited - a subsidiary company
10,000,000 fully paid ordinary shares of Rs. 10 each.
Equity held - 86.96% (1999 86.96%)
Value of investment based on the net assets shown in the
audited accounts as at June 30, 2000
Rs. 155.57 million (1999: Rs. 139.51 million) 100,000 100,000
========== ==========
6. LONG-TERM LOANS
Unsecured, considered good
Due from executives 862 1,096
Other employees 29 11
------------------ ------------------
891 1,107
Less: Current portion 11 467 504
------------------ ------------------
424 603
========== ==========
Due after three years 22 39
========== ==========
Loans are granted principally for purchase of motor vehicles to employees of the company in accordance with their
terms of employment, excluding those who have been provided with company maintained cars. The maximum
amount due from executives at the end of any month during the year was Rs. 1.09 million (1999: Rs. 1.27 million).
The loans are repayable over a period of five years.
7. LONG-TERM DEPOSITS AND PREPAYMENT
Security deposits 8,272 7,963
Prepayment 20 40
------------------ ------------------
8,292 8,003
========== ==========
8. STORES AND SPARES
Stores 16,264 21,993
Spares
- In hand 87,990 86,101
- In transit 4,009 1,087
------------------ ------------------
91,999 87,188
------------------ ------------------
108,263 109,181
Less: Provision for slow moving and obsolete items 7,500 7,500
------------------ ------------------
100,763 101,681
========== ==========
9, STOCK-IN-TRADE
Raw materials
In hand [in bonded warehouse Rs. Nil
(1999: Rs. 14.76 million)] 143,818 133,995
In transit 35,819 51,025
------------------ ------------------
Work-in-process 179,637 185,020
7,539 11,958
Finished goods 11,170 9,971
------------------ ------------------
198,346 206,949
========== ==========
10. TRADE DEBTS- UNSECURED 128,756 109,535
========== ==========
Trade debts are considered good and have been arrived at after deducting a general provision for doubtful debts
of Rs. 2.70 million (1999: Rs. 1.50 million).
Net amount due from associated undertakings at the end of the year amounted to Rs. 9.92 million (1999: Rs. 6.17
million). The maximum amount due from associated undertakings at the end of any month during the year was
Rs. 9.92 million (1999 Rs. 15.25 million).
11, LOANS, ADVANCES AND OTHER RECEIVABLES
Loans
Current portion of long-term loans to executives
and other employees- 6 467 504
Advances-considered good
to employees 207 103
to suppliers 11.1 16,569 2,848
------------------ ------------------
Other receivables 16,776 2,951
Dividend receivable from subsidiary company 10,000 10,000
Others 11.2 834 4,673
------------------ ------------------
10,834 14,673
------------------ ------------------
28,077 18,128
========== ==========
11.1 This includes an amount of Rs. 13.94 million in respect of advance paid to Sui Northern Gas Pipelines Limited
for installation of pipeline for gas supply.
11.2 This includes Rs. 0.31 million being net realisable value of assets held for sale.
12. DEPOSITS AND PREPAYMENTS
Deposits 1,021 3,014
Prepayments 758 1,110
Current account balance with the
Central Excise Department 675 2,699
------------------ ------------------
2,454 6,823
========== ==========
13. TAXATION- NET
(a) This includes an amount of Rs. 29.99 million which has been determined refundable by the Deputy
Commissioner of Income Tax (DCIT). Out of the above amount a tax liability of Rs. 5.27 million has been
adjusted against the refundable amount.
Furthermore, this includes income tax deducted under section 50(4) amounting to Rs. 14.96 million for which
credit was not given by the DCIT while passing the assessment order. A rectification application has therefore
been filed by the company which is pending.
(b) The income tax assessments of the company have been finalized by the Income Tax Department upto
assessment year 1999-2000 (accounting year ended June 30, 1999) and adequate provisions have been
made.
14. CASH AND BANK BALANCES
At banks - on current accounts 17,718 2,955
Cheques in hand 4,789 6,423
Cash in hand 1,121 1,121
------------------ ------------------
23,628 10,499
========== ==========
Cash at banks on current accounts include US$ 15,160 (1999: US$ 17,000) held in foreign currency accounts.
15. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
Ordinary
Ordinary shares of
shares of Rs. 10 each
Rs. 10 each issued as Total
fully paid fully paid
in cash bonus shares 2000 1999
Number of shares 24,345,000 7,076,280 31,421,280 31,421,280
========== ========== ========== ==========
(Rupees in thousands)
Balance as at June 30 243,450 70,763 314,213 314,213
========== ========== ========== ==========
Note 2000 1999
(Rupees in thousands)
16. RESERVES
Movement in and composition of reserves is as follows:
Capital reserve
Share premium account 85,045 85,045
Reserve for issue of bonus shares
At the beginning of the year -- 28,565
Less: Amount utilized for issue of bonus shares -- 28,565
------------------ ------------------
-- --
------------------ ------------------
85,045 85,045
Revenue reserve
General reserve
At the beginning of the year 283,000 256,000
Transfer from profit and loss account 33,000 27,000
------------------ ------------------
316,000 283,000
Unappropriated profit 59 442
------------------ ------------------
401,104 368,487
========== ==========
17. REDEEMABLE CAPITAL
Term finance certificates -- 3,670
Long-term finances utilized under
mark-up arrangements 17.1 68,889 121,261
------------------ ------------------
68,889 124,931
Less: Current portion
Term finance certificates -- 3,670
Long-term finances utilized under
mark-up arrangements 22,222 59,039
------------------ ------------------
22,222 62,709
------------------ ------------------
46,667 62,222
========== ==========
Rate of
Sale Purchase Rate of mark-up Redemption
2000 1999 price price mark-up on default re-payment Equal
(Rupees in thousands) (Rupees in thousands) per annum per annum from installments
17.1 Long-term finances utilized
under mark-up arrangements
ANZ Grindlays Bank Limited
For plant and machinery 6,667 46,667 130,000 221,919 16% 20% and 11-04-19979 half yearly
waiver of
prompt
payment
rebate
Rs. 25.68
million
For plant and machinery 62,222 50,000 70,000 1261270 16% 25% and 30-06-20009 half yearly
waiver of
prompt
payment
rebate
Rs. 19.69
million
Industrial Development
Bank of Pakistan
Term loan facility -- 1,812
Habib Bank Limited
Assistance for locally
manufactured machinery -- 782
American Express Bank Limited
For plant and machinery -- 22,000
------------------ ------------------
68,889 121,261
========== ==========
All long term finances utilized under mark-up arrangements are secured by equitable mortgage on present and
future movable and immovable properties and a first pari-passu hypothecation charge over present and future
plant and machinery.
The consent of loan giving agency in respect of long-term finances utilized under mark-up arrangements is
required prior to declaration and payment of dividend or issue of bonus shares by the company.
18. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE
Future minimum lease payment under finance leases together with the present value of the net minimum lease
payments are as follows:
2000 1999
Minimum Minimum
lease Present lease Present
payments value payments value
(Rupees in thousands)
Within one year 26,376 16,833 31,246 17,977
After one year but not more than five years 43,750 35,437 70,128 52,270
------------------ ------------------ ------------------ ------------------
Total minimum lease payments 70,126 52,270 101,374 70,247
Less: Amounts representing finance charges 17,856 -- 31,127 --
------------------ ------------------ ------------------ ------------------
Present value of minimum lease payments 52,270 52,270 70,247 70,247
Less: Current portion 16,833 16,833 17,977 17,977
------------------ ------------------ ------------------ ------------------
35,437 35,437 52,270 52,270
========== ========== ========== ==========
These represent finance leases entered into with leasing companies for plant and machinery. Rates of financial
charges ranging from 19.50% to 22% per annum are used as discounting factors.
The company intends to exercise its option to purchase the leased plant and machinery for Rs. 5.99 million (1999:
Rs. 6.88 million) upon completion of the lease period.
These are secured by demand promissory notes and security deposits.
Note 2000 1999
(Rupees in thousands)
19. DEFERRED LIABILITIES
Deferred taxation 19.1 80,000 56,000
Deferred liabilities - other 19.2 14,004 14,004
------------------ ------------------
94,004 70,004
========== ==========
19.1 Deferred taxation arising due to timing differences computed under the liability method is estimated at
Rs. 90.86 million of which Rs. 7.89 million is credit for the current year (1999: Rs. 82.97 million of which
Rs. 2.74 million was credit for the year). The timing differences arising due to accelerated depreciation
allowance are not likely to reverse in the foreseeable future. However, in order to comply with the
requirements of revised International Accounting Standard 12 which is applicable for accounting periods
beginning on or after January 01, 2002, the management as a prudence has provided for deferred taxation
amounting to Rs. 24 million during the year (1999: Rs. 15 million).
19.2 This is in respect of fixed capacity of sales tax and excise duty referred to in note 22.1 (b).
20. SHORT-TERM FINANCES
Utilized under mark-up arrangements
Running finance 20.1 90,437 81,883
Term finance 20.2 155,000 120,000
------------------ ------------------
245,437 201,883
========== ==========
20.1 The company has aggregate short-term running finance facilities amounting to Rs. 483 million (1999: Rs. 428
million) from commercial banks on mark-up basis. Rates net of the prompt payment rebate, range from
Re 0.315 to Re. 0.450 per thousand rupees on daily product basis. The purchase prices and mark-up amounts
are payable by June 30, 2001.
20.2 Term finances available from commercial banks under mark-up arrangements amounting to Rs. 155 million
(1999: Rs. 120 million) are repayable by September 2000. The rates of mark-up range from Re. 0.274 to
Re. 0.288 per thousand rupees on daily product basis.
These arrangements are secured by way of pari-passu hypothecation charge created on stock-in-trade and book
debts of the company.
The facilities for opening of letters of credit and guarantees as at June 30, 2000 amounted to Rs. 651 million
(1999: Rs. 551 million) out of which the amount remaining unutilized at the end of the year was Rs. 455.17 million
(1999: Rs. 494.94 million).
21. CREDITORS, ACCRUED AND OTHER LIABILITIES
Creditors 21.1 62,183 64,675
Accrued liabilities 16,572 8,001
Sales tax payable (net) 6,032 12,815
Advances from customers 14,329 20,808
Mark-up accrued on secured:
redeemable capital 260 6,439
short-term finances 4,597 9,632
------------------ ------------------
4,857 16,071
Mark-up accrued on finance leases 3,038 4,141
Central excise duty payable 97 106
Other financial charges payable 806 812
Workers' profit participation fund 21.2 8,537 5,989
Workers' welfare fund 2,482 2,899
Unclaimed dividend 204 82
Other liabilities 2,777 10,666
------------------ ------------------
121,914 147,065
========== ==========
21.1 Net amount due to associated undertakings at the end of the year aggregated to Rs. 17 million
(1999: Rs. 15.46 million).
21.2 Workers' profit participation fund
Balance at the beginning of the year 5,989 4,229
Interest on fund utilized in company's business 452 227
Allocation for the year 8,085 5,759
------------------ ------------------
14,526 10,215
Less: Amount paid during the year 5,989 4,226
------------------ ------------------
Balance at the end of the year 8,537 5,989
========== ==========
22. CONTINGENCIES AND COMMITMENTS
22.1 Contingencies
(a) The company has taken a stay from the Honourable Lahore High Court against the demands raised by
the Sales Tax Authority for recovery of Rs. 11.69 million for alleged incorrect adjustment of input tax.
The company strongly considers that on the merits of the case, it would get a favourable decision and
accordingly no provision has been made in these accounts.
(b) The company came under the purview of fixed capacity for payment of sales tax and excise duty in May
1992. The company complied fully as per rules and instructions provided and paid sales tax and excise
duty on fixed capacity till it was withdrawn in 1994. The company received a show cause notice
amounting to Rs. 34.32 million in May 1998 plus additional tax and surcharge for non payment of sales
tax and excise duty on clearance over and above the fixed capacity during that period. The company
defended the show cause successfully and it was vacated by Additional Collector Central Excise
Lahore. However, the Department has preferred to appeal. The company is confident and expects to
get a favourable decision. However, a provision of Rs. 14 million has been made against this as referred
in note 19.2.
22.2 Commitments
(a) Commitments under letters of credit, contracts and guarantees at the end of the year amounted to
Rs. 54.45 million (1999: Rs. 52.85 million).
(b) Commitments for capital expenditure including letters of credit amounted to Rs. 104.14 million (1999:
Rs. 29.05 million).
(c) Commitments in respect of forward exchange contracts amounted to Rs. 141.38 million (1999: Rs. 3.21
million).
(d) Commitments for rentals under lease agreements in respect of vehicles are as follows:
Within one year 5,162 4,770
After one year but not more than five years 10,252 10,001
------------------ ------------------
15,414 14,771
========== ==========
23. SALES
Gross sales 2,005,782 1,857,924
Less: Sales tax 262,858 228,488
------------------ ------------------
1,742,924 1,629,436
========== ==========
24. COST OF GOODS SOLD
Materials consumed 831,312 811,202
Salaries, wages and other benefits 78,266 70,073
Fuel and power 301,970 280,779
Stores and spares consumed 90,034 84,614
Provision for slow moving and
obsolete stores and spares -- 2,500
Excise duty 83,022 77,740
Insurance 9,475 7,063
Repairs and maintenance 17,056 11,331
Technical fee 665 --
Lease rentals 2,452 1,686
Packing expenses 18,270 20,044
Depreciation 76,119 71,390
Security services charges 1,767 1,465
Printing, stationery and periodicals 1,067 820
Postage and telephone 1,423 1,120
Travelling and conveyance 927 291
------------------ ------------------
1,513,825 1,442,118
------------------ ------------------
Opening work-in-process 11,958 17,707
Closing work-in-process (7,539) (11,958)
------------------ ------------------
4,419 5,749
------------------ ------------------
Cost of goods manufactured 1,518,244 1,447,867
------------------ ------------------
Opening stock of finished goods 9,971 13,253
Closing stock of finished goods (11,170) (9,971)
------------------ ------------------
(1,199) 3,282
------------------ ------------------
1,517,045 1,451,149
========== ==========
24.1 Salaries, wages and other benefits include Rs. 2.21 million (1999: Rs. 2.05 million) in respect of staff
retirement benefits.
25. OTHER INCOME
Sale of scrap 6,976 6,779
Insurance agency commission 2,606 2,137
Profit on sale of fixed assets (net) 1,984 776
Insurance claim 806 --
Unclaimed liabilities written back 203 --
Management fee from subsidiary company 480 480
Return on short-term investment and deposits -- 66
Rent 368 368
Miscellaneous 645 184
------------------ ------------------
14,068 10,790
========== ==========
26, ADMINISTRATIVE AND SELLING EXPENSES
Salaries and other benefits 26.1 27,846 22,981
Insurance 1,883 1,991
Repairs and maintenance 1,796 1,432
Lease rentals 2,750 1,968
Electricity charges 886 757
Provision for doubtful debts 1,200 1,000
Bad debts written off 51 --
Depreciation 3,031 2,888
Fees and subscription 496 442
Advertisement 206 549
Travelling and conveyance 1,343 1,211
Rent, rates and taxes 2,462 2,428
Security services charges 77 100
Printing, stationery and periodicals 930 734
Postage and telephone 1,644 2,061
Entertainment expenses 328 280
Other expenses 7 6
------------------ ------------------
47,135 40,828
========== ==========
26.1 Salaries and other benefits include Rs. 1 million (1999: Rs. 0.87 million) in respect of staff retirement benefits.
27. OTHER CHARGES
Legal and professional charges 479 849
Auditors' remuneration
Audit fee 175 12.50
Taxation services 15 --
Other services 81 14
Out of pocket expenses 23 11
------------------ ------------------
294 150
Workers' profit participation fund 8,085 5,759
Workers' welfare fund 2,470 1,965
Donations -- 5
------------------ ------------------
11,328 8,728
========== ==========
28. FINANCIAL CHARGES
Mark-up on redeemable capital 15,566 20,081
Mark-up/Interest on:
Loan from subsidiary company -- 2,282
Short-term finances 26,365 37,944
Finance lease obligations 12,282 12,795
Workers' profit participation fund 452 227
Suppliers' credit -- 167
------------------ ------------------
39,099 53,415
Central excise duty 35 30
Other loan receiving charges 37 641
Bank charges and commission 561 693
Loss on exchange (net) 35 2,203
------------------ ------------------
55,333 77,063
========== ==========
29, GRATUITY
The liability for gratuity not provided in these accounts amounts to Rs. 0.93 million (1999: Rs. 0.77 million)
(note 2.3).
30. TAXATION
Current  - for the year 33,366 18,885
- for prior years (1,674) (155)
------------------ ------------------
31,692 18,730
Deferred (Note 19.1) 24,000 15,000
------------------ ------------------
55,692 33,730
========== ==========
31. BASIC EARNINGS PER SHARE
There is no dilutive effect on the basic earnings per share of the company, which is based on:
Profit after taxation 95,459 73,728
========== ==========
Weighted average number of ordinary shares (in thousands) 31,421 31,421
========== ==========
Basic earnings per share (Rupees) 3.04 2.35
========== ==========
32. CASH GENERATED FROM OPERATIONS
Profit before taxation 151,151 107,458
Adjustment for non-cash charges and other items:
Depreciation 79,150 74,278
Profit on sale of fixed assets (1,984) (776)
Dividend income (25,000) (45,000)
Provision for doubtful debts 1,200 1,000
Bad debts written off 51 --
Provision for slow moving and obsolete
stores and spares -- 2,500
Return on short-term investment and deposits -- (66)
Financial charges 55,333 77,063
Working capital changes 32.1 (26,498) (46,142)
------------------ ------------------
233,403 170,315
========== ==========
32.1 Working capital changes
(Increase)/decrease in current assets:
Stores and spares 918 (1,622)
Stock-in-trade 8,603 31,177
Trade debts (20,472) (14,917)
Loans, advances and other receivables (excluding
dividend receivable) (9,639) (97)
Deposits and prepayments 4,369 (863)
------------------ ------------------
(16,221) 13,678
(Decrease)/increase in current liabilities:
Creditors, accrued and other liabilities
(excluding unclaimed dividend) (10,277) (59,820)
------------------ ------------------
(26,498) (46,142)
========== ==========
33. REMUNERATION OF CHIEF EXECUTIVE AND EXECUTIVES
The aggregate amount charged in the accounts for remuneration including all benefits to chief executive and
executives of the company is as follows:
2000 1999
Chief Chief
Executive Executives Total Executive Executives Total
(Rupees in thousands)
Managerial remuneration 881 14,608 15,489 714 11,441 12,155
House rent 0.28 5,327 5,607 291 4,648 4,939
Bonus 133 2,161 2,294 108 1,718 1,826
Provident fund 72 1,166 1,238 58 934 992
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Total 1,366 23,262 24,628 1,171 18,741 19,912
========== ========== ========== ========== ========== ==========
Number of persons 1 68 69 1 56 57
========== ========== ========== ========== ========== ==========
Aggregate amount charged in these accounts in respect of directors' fee is Rs. 500 (1999: Rs. 1,000).
The chief executive and some executives are also provided with free use of company maintained cars.
2000 1999
(Rupees in thousands)
34. TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS
Sales of goods and services 119,800 134,555
Purchases of fixed assets, goods and services 222,327 199,218
Rent and other allied charges 2,235 2,406
Interest on loan from subsidiary company -- 2,282
Insurance agency commission 2,564 2,137
Dividend income 25,000 45,000
Repayment of loan from subsidiary company -- 17,000
The transactions with the associated undertakings are in the normal course of business at contracted rates and
terms determined in accordance with market rates.
35. CAPACITY AND PRODUCTION - TONNES
2000 1999
Annual Annual
capacity capacity
on three Actual on three Actual
shift production shift production
Paper and board 60,000 60,726 60,000 58,545
========== ========== ========== ==========
36. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
Concentration of credit risk
Credit risk represents the accounting loss that would be recognised at the reporting date if counterparts failed
completely to perform as contracted. The company does not have significant exposure to any individual customer.
To reduce exposure to credit risk the company applies credit limits to its customers.
Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will affect the value of financial
instruments. The company is not materially exposed to interest rate risk except in respect of redeemable capital
and liabilities against assets subject to finance lease which are at fixed interest rates. The interest rates and
maturities of these items are disclosed in notes 17 and 18 respectively.
Foreign exchange risk management
Foreign currency risk arises mainly where receivables and payables exist due to transactions with foreign
undertakings. in appropriate cases, the management takes out forward contracts to mitigate the risk.
Fair values of financial instruments
The carrying value of all the financial instruments reported in the financial statements approximate their fair value.
37. NUMBER OF EMPLOYEES
The total number of permanent employees as at year end was 874 (1999: 857)
38. GENERAL
38.1 Corresponding figures have been rearranged, wherever necessary, for the purposes of comparison.
38.2 Amounts have been rounded off to the nearest thousand of rupees.
Iqbalali Lakhani M. Rafi Chawla
Chairman Chief Executive
Financial Review of five years
(Rs. '000)
2000 1999 1998 1997 1996
ASSETS EMPLOYED
Fixed Assets     730,254 736,623 746,437 778,872 711,138
Long-term investments 100,000 100,000 100,000 100,000 100,000
Long-term loans, deposits and prepayment 8,716 8,606 7,239 5,807 4,647
Working capital (excluding current portion) 91,510 102,653 93,665 55,479 72,053
------------------ ------------------ ------------------ ------------------ ------------------
Total assets employed 930,480 947,882 947,341 940,158 887,838
========== ========== ========== ========== ==========
FINANCED BY
Paid-up capital 314,213 314,213 285,648 285,648 259,680
Reserves 401,104 368,487 370,456 304,496 303,362
------------------ ------------------ ------------------ ------------------ ------------------
715,317 682,700 656,104 590,144 563,042
Redeemable capital and long-term loan 68,889 124,931 164,627 240,509 245,909
Liabilities against assets subject to finance lease 52,270 70,247 71,606 54,501 23,883
Deferred liabilities 94,004 70,004 55,004 55,004 55,004
------------------ ------------------ ------------------ ------------------ ------------------
Total capital employed 930,480 947,882 947,341 940,158 887,838
========== ========== ========== ========== ==========
TURNOVER & PROFIT
Gross sales 2,005,782 1,857,924 1,599,397 1,182,429 1,269,651
Net sales 1,742,924 1,629,436 1,421,566 1,014,709 1,104,015
Gross profit 225,879 178,287 157,328 139,335 281,398
% of Net sales 13 11 11 14 25
Profit before Taxation 151,151 107,458 76,819 61,339 195,132
% of Net sales 9 7 5 6 18
Profit after Taxation 95,459 73,728 65,960 55,667 106,372
DIVIDEND
Cash - percentage of paid-up capital 20 15 -- 10 25
Stock - percentage of paid-up capital -- -- 10 -- 10
OTHERS
Capital expenditure 73,384 67,666 39,391 123,358 221,128
Earnings per share (Rs.) Note 3.04 2.35 2.10 1.77 3.39
No. of employees 874 857 836 822 798
Note: Figures restated based on bonus issues
Statement Under Section 237 (1) of the
Companies Ordinance, 1984
2000
a) Extent of the interest of Century Paper & Board Mills Limited (the holding
company) in the equity of Century Power Generation Limited
(the subsidiary company) at the end of the financial year of
the subsidiary 86.96%
b) The net aggregate amount of profits after deducting losses if any,
of the subsidiary company so far as these concern members of the
holding company and have not been dealt with in the accounts of
the holding company for the year ended June 30, 2000.
i) for the financial year of the subsidiary; Rs. 16.07 million
ii) for the previous years of the subsidiary since it became the
holding company's subsidiary Rs. 39.51 million
c) The net aggregate amount of profits after deducting losses, if any,
of the subsidiary company so far as these have been dealt with or
provision made for losses in the accounts of the holding company
for the year ended June 30, 2000.
i) for the financial year of the subsidiary; Rs. 25.00 million
ii) for the previous years of the subsidiary since it became the
holding company's subsidiary. Rs. 80.00 million
Iqbalali Lakhani M. Rafi Chawla
Chairman Chief Executive
Pattern of Holding of Shares
held by the shareholders as at June 30, 2000
NO. OF SHAREHOLDING TOTAL
SHARE FROM TO SHARES HELD
HOLDERS
91 1 100 Shares 4,392
160 101 500 Shares 42,446
176 501 1,000 Shares 143,068
244 1,001 5,000 Shares 580,869
40 5,001 10,000 Shares 303,786
28 10,001 15,000 Shares 344,445
23 15,001 20,000 Shares 411,261
5 20,001 25,000 Shares 118,887
2 25,001 30,000 Shares 54,252
5 30,001 35,000 Shares 160,679
2 40,001 45,000 Shares 86,182
1 45,001 50,000 Shares 45,496
2 55,001 60,000 Shares 114,567
1 60,001 65,000 Shares 60,500
1 65,001 70,000 Shares 68,065
1 85,001 90,000 Shares 85,849
1 90,001 95,000 Shares 92,610
2 95,001 100,000 Shares 192,877
1 120,001 125,000 Shares 121,000
1 130,001 135,000 Shares 133,100
1 145,001 150,000 Shares 148500
2 190,001 195000 Shares 386700
1 200,001 205000 Shares 200420
1 215,001 220000 Shares 219465
1 240,001 245,000 Shares 241,450
1 410,001 415,000 Shares 414,030
1 475,001 480000 Shares 479,136
1 1,030,001 1,035,000 Shares 1,032,350
1 1,060,001 1,065,000 Shares 1,060,153
1 1,220,001 1,225,000 Shares 1,221,440
1 1,315,001 1,320,000 Shares 1,320,000
1 1,445,001 1,450,000 Shares 1,449,630
1 1,510,001 1,515,000 Shares 1,511,000
1 1,700,001 1,705,000 Shares 1,703,837
1 2,545,001 2,550,000 Shares 2,548,917
1 3,850,001 3,855,000 Shares 3,851,768
1 4,165,001 4,170,000 Shares 4,168,433
1 6,295,001 6,300,000 Shares 6,299,720
------------------ ------------------
806 TOTALS 31,421,280
========== ==========
CATEGORIES OF SHAREHOLDERS NUMBER SHARES HELD PERCENTAGE
Individuals 756 3,271,208 10.41
Investment companies 10 3,866,419 12.30
Insurance companies 2 1,101,335 3.51
Joint stock companies 24 15,565,764 49.54
Financial institutions 10 7,558,843 24.06
Modaraba companies 3 28,671 0.09
Leasing Company 1 29,040 0.09
------------------ ------------------ ------------------
806 31,421,280 100.00
========== ========== ==========
Iqbalali Lakhani M. Rafi Chawla
Chairman Chief Executive
Century Paper & Board Mills Limited and Subsidiary Company
Consolidated Financial Statements
for the year ended June 30, 2000
Auditors' Report to the Members
We have examined the annexed consolidated financial statements comprising the consolidated balance sheet
of Century Paper & Board Mills Limited and its subsidiary company as at June 30, 2000 and the related
consolidated profit and loss account, consolidated cash flow statement and consolidated statement of
changes in equity together with the notes forming part thereof, for the year ended June 30, 2000. We have also
expressed a separate opinion on the financial statements of Century Paper & Board Mills Limited. The financial
statements of the subsidiary company were audited by another firm of Chartered Accountants, whose report
has been furnished to us and our opinion in so far as it relates to the amounts included for the subsidiary
company, is based solely on the report of such other auditor. These financial statements are the responsibility
of the holding company's management. Our responsibility is to express an opinion on these financial
statements based on our examination.
Our examination was made in accordance with International Standards on Auditing and accordingly included
such tests of accounting records and such other auditing procedures as we considered necessary in the
circumstances.
In our opinion the consolidated financial statements examined by us present fairly the financial position of
Century Paper & Board Mills Limited and its subsidiary company as at June 30, 2000 and the results of their
operations for the year then ended.
FORD, RHODES, ROBSON, MORROW
Karachi: September 22, 2000 Chartered Accountants
Consolidated Balance Sheet as at June 30, 2000
Note 2000 1999
(Rupees in thousands)
ASSETS
NON-CURRENT ASSETS
Fixed assets - Tangible
Operating assets 3 895,944 890,233
Capital work-in-progress 4 11,589 37,554
------------------ ------------------
907,533 927,787
Long-term loans 5 424 603
Long-term deposits, prepayment and deferred costs 6 14,088 13,440
------------------ ------------------
922,045 941,830
CURRENT ASSETS
Stores and spares 7 120,250 118,133
Stock-in-trade 8 207,850 211,588
Trade debts 9 134,159 113,789
Loans, advances and other receivables 10 21,295 12,666
Deposits and prepayments 11 2,454 6,852
Taxation - net 12 39,567 45,204
Short-term investment - certificates of investment -- 7,000
Cash and bank balances 13 27,452 12,111
------------------ ------------------
553,027 527,343
------------------ ------------------
TOTAL ASSETS 1,475,072 1,469,173
========== ==========
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 14 314,213 314,213
Reserves 15 456,679 407,997
------------------ ------------------
770,892 722,210
MINORITY INTERESTS 24,830 22,421
NON-CURRENT LIABILITIES
Redeemable capital 16 46,667 87,222
Liabilities against assets subject to finance lease 17 35,958 59,984
Deferred liabilities 18 94,004 70,004
------------------ ------------------
176,629 217,210
CURRENT LIABILITIES
Current portion of - redeemable capital 16 47,222 87,709
- liabilities against assets subject
to finance lease 17 24,026 30,632
Short-term finances 19 256,941 201,883
Creditors, accrued and other liabilities 20 111,690 139,976
Proposed dividend 62,842 47,132
------------------ ------------------
502,721 507,332
CONTINGENCIES AND COMMITMENTS 21
------------------ ------------------
TOTAL EQUITY AND LIABILITIES 1,475,072 1,469,173
========== ==========
The annexed notes form an integral part of these accounts.
Iqbalali Lakhani M. Rafi Chawla
Chairman Chief Executive
Consolidated Profit and Loss Account
for the year ended June 30, 2000
Note 2000 1999
(Rupees in thousands)
Sales 22 1,774,618 1,672,642
Cost of goods sold 23 (1,487,419) (1,414,027)
------------------ ------------------
Gross profit 287,199 258,615
Other income 24 14,656 11,013
Administrative and selling expenses 25 (49,278) (41,708)
Other charges 26 (14,220) (12,137)
------------------ ------------------
Operating profit 238,357 215,783
Financial charges 27 (63,649) (91,139)
------------------ ------------------
Profit before taxation 174,708 124,644
Taxation 29 (57,026) (35,419)
------------------ ------------------
Profit after taxation 117,682 89,225
Minority interests (6,158) (7,889)
------------------ ------------------
Net profit for the year 111,524 81,336
Unappropriated profit brought forward 820 6,660
------------------ ------------------
Profit available for appropriation 112,344 87,996
Appropriations:
Proposed dividend Rs. 2.00 (20%) per share
[1999: Rs. 1.50 (15%) per share] (62,842) (47,132)
Transfer to general reserve (48,653) (40,044)
------------------ ------------------
(111,495) (87,176)
------------------ ------------------
Unappropriated profit carried forward 849 820
========== ==========
Basic earnings per share 30 3.75 2.84
========== ==========
The annexed notes form an integral part of these accounts.
Iqbalali Lakhani M. Rafi Chawla
Chairman Chief Executive
Consolidated Cash flow Statement
for the year ended June 30, 2000
Note 2000 1999
(Rupees in thousands)
CASH FLOW FROM OPERATING ACTIVITIES
Cash generated from operations 31 297,879 260,429
Financial charges paid (77,206) (102,268)
Tax paid (30,277) (28,195)
Long-term loans 179 140
Long-term deposits, prepayment and deferred costs (745) (1,996)
------------------ ------------------
Net cash inflow from operating activities 189,830 128,110
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure (77,356) (68,702)
Proceeds from sale of fixed assets 2,760 3,978
Return on short-term investment and deposits received 482 206
------------------ ------------------
Net cash (outflow) from investing activities (74,114) (64,518)
CASH FLOW FROM FINANCING ACTIVITIES
Redeemable capital 20,000 50,000
Redemption of redeemable capital (101,042) (95,759)
Obligations under finance lease -- 16,045
Repayment of leasing finance (30,632) (28,266)
Dividend paid (50,759) (6,847)
------------------ ------------------
Net cash (outflow) from financing activities (162,433) (64,827)
------------------ ------------------
Net decrease in cash equivalents (46,717) (1,235)
Cash and cash equivalents at the beginning of the year (182,772) (181,537)
------------------ ------------------
Cash and cash equivalents at the end of the year (229,489) (182,772)
========== ==========
CASH AND CASH EQUIVALENTS COMPRISE:
Short-term investment -- 7,000
Cash and bank balances 27,452 12,111
Short-term finances (256,941) (201,883)
------------------ ------------------
(229,489) (182,772)
========== ==========
The annexed notes form an integral part of these accounts.
Iqbalali Lakhani M. Rafi Chawla
Chairman Chief Executive
Consolidated Statement of Changes in Equity
for the year ended June 30, 2000
Issued, subscribed
and paid-up Reserves Unappropriated
capital Capital  Revenue profit Total
(Rupees in thousands)
Balance as at July 1, 1998 285,648 113,610 282,088 6,660 688,006
Net profit for the year -- -- -- 81,336 81,336
Bonus shares issued during the year 28,565 (28,565) -- -- --
Proposed dividend -- -- -- (47,132) (47,132)
Transfer to general reserve during the year -- -- 40,044 (40,044) --
------------------ ------------------ ------------------ ------------------ ------------------
Balance as at June 30, 1999 314,213 85,045 322,132 820 722,210
Net profit for the year -- -- -- 111,524 111,524
Proposed dividend -- -- -- (62,842) (62,842)
Transfer to general reserve during the year -- -- 48,653 (48,653) --
------------------ ------------------ ------------------ ------------------ ------------------
Balance as at June 30, 2000 314,213 85,045 370,785 849 770,892
========== ========== ========== ========== ==========
The annexed notes form an integral part of these accounts.
Iqbalali Lakhani