| Clariant Pakistan Limited |
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| Annual
Report 2000 |
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| Contents |
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| Company
Information |
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| Report
of the Board of Directors |
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| Notice
of Meeting |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Cash
Flow Statement |
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| Statement
of Changes in Equity |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| Company
Information |
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| Chairman |
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Dr U Cuntze |
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| Chief
Executive & |
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| Managing
Director |
Farhat A Mirza |
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| Directors |
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P Brandenberg |
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(Alternate: Dr S A 0
Shah) |
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Albert Hug |
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(Alternate: S K Mehdi) |
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Dr Herbert Wohlmann |
(Alternate: Dr S Mubarik
Ali) |
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Dr F Dennefeld |
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First Ali |
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| Secretary |
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S K Mehdi |
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| Bankers |
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ABN- Amro Bank |
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Credit Agricole Indosuez
- The Global French Bank |
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Citibank N.A. |
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Deutsche Bank |
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Habib Bank Limited |
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National Bank of Pakistan |
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Standard Chartered Bank |
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Standard Chartered
Grindlays Bank |
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Societe Generale - The
French and International Bank |
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The Hongkong &
Shanghai Banking Corporation Limited |
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| Auditors |
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A.F. Ferguson & Co.,
Chartered Accountants |
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| Registered
Office |
1-A/1, Sector 20, |
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Korangi Industrial Area, |
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Korangi, Karachi. |
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| Share
Registrars |
Ferguson Associates
(Pvt.) Ltd. |
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State Life Building 1-A |
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I.I. Chundrigar Road |
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Karachi. |
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| Factories |
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Petaro Road, Jamshoro |
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Korangi Industrial Area,
Karachi |
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Katarband Road, Thokar
Niaz Baig, Lahore |
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| Report
of the Board of Directors |
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| The
Directors of your company take pleasure in presenting the |
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| Annual
Accounts and Report for the operating year of the |
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| Company
ended on 31 December 2000. |
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| Board
of Directors |
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| Since
the last report Mr. Samir Ahmed, the nominee of National |
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| Investment
Trust Limited, was replaced by Mr. Firasat Ali. The |
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| Board
placed on record its appreciation for the valuable |
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| contribution
made by Mr. Samir Ahmed and welcomes Mr. |
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| Firasat
Ali on the Board. |
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| Business
Overview |
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| Difficult
business environment did not allow the shifting of |
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| increase
in cost to customers and in some cases, especially |
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| textile
dyes, necessitated reduction in selling prices. For these |
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| reasons,
the growth in turnover was only 4% in the accounts |
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| for
the year under review. However, synergies were obtained |
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| through
volume which is fully reflected in these accounts. |
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| The
textile industry showed signs of revival and significance of |
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| value
addition was apparent. However, the emphasis in the |
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| domestic
market remained on volumes and cost cutting leading |
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| the
way to imports of cheap products with below par |
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| performance. |
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| The
leather industry has suitably adjusted itself to conditions |
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| arising
from lower output resulting from depressed demand. The |
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| user
industry's emphasis on quality has played an important role |
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| in
your company's ability to widen the customer base. The |
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| acquisition
of BTP of U.K. by Clariant has provided synergies in |
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| leather
chemicals and pigments which will show their full impact |
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| in
the years to come. |
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| Sales
of Masterbatches increased substantially through emphasis |
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| on
quality, customer services and greater penetration into the |
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| niche
market for tailor-made products. Growth in plastic industry |
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| also
helped in achieving higher volumes. Sales of Cellulose, |
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| Ethers
and Polymerisates was satisfactory. |
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| The
improvement in yields and productivity and the emphasis on |
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| cost
control has enhanced the operating profit by 16% over the |
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| previous
year. Financial charges were 17% lower than the |
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| previous
year due to containment of working capital and |
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| effective
negotiations with the financial institutions on |
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| borrowing
terms. |
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| Finance
and Accounts |
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| Your
Directors are pleased to state that various measures |
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| described
earlier have resulted in a 134% increase in profit after |
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| tax
from Rs.48.12 Mio in 1999 to Rs112.47 Mio in the year |
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| under
review. This highly satisfying profit together with the |
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| unappropriated
profit of Rs 9.36 Mio brought forward from 1999 |
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| is
available for appropriation. The Directors are pleased to propose |
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| a
final cash dividend of 25% in addition to the interim dividend of |
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| 25%
already paid in the previous year. The total cash dividend of |
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| 50%
for the year 2000 thus shows a 100% improvement in the |
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| dividend
payout. |
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| The
proposed appropriation of profit of the Company is as under: |
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(Rs '000) |
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| Profit
for the year after taxation |
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112,468 |
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| Unappropriated
profit brought forward |
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9,362 |
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| Profit
available for appropriation |
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121,830 |
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| Proposed
cash dividend @ 50% |
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121,830 |
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| (25%
interim dividend plus 25% final dividend to be |
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| paid
after the Annual General Meeting) |
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77,984 |
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| Transferred
to Revenue Reserve |
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40,000 |
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| Unappropriated
profit carried forward |
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3,846 |
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| Pattern
of Shareholding |
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| A
statement of the pattern of shareholding is shown on Page 30. |
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| Holding
Company |
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| The
Company is a subsidiary of Clariant International Limited |
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| incorporated
in Switzerland. |
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| Auditors |
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| The
present auditors, Messrs A.F. Ferguson & Co., retiring on the |
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| date
of Annual General Meeting, being eligible, have offered |
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| themselves
for reappointment. |
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| Future Outlook |
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| Growth
in Company's sales and profitability is largely dependent |
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| upon
the level of activity in the textile and leather sectors. |
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| Difficulties
in managing the national economy and balancing the |
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| books
continue to exist. However, your company has taken |
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| appropriate
steps to ensure that the customer base is enlarged |
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| and
the existing bonds with the customers are further |
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| strengthened
through local depth and global reach. Company's |
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| emphasis
on optimising production capacities, manufacturing |
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| Eco-friendly
products and emphasis on supplying unmatched |
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| technical
back up and service to all customers has helped in |
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| maintaining
its edge over the competition. |
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| Synergies
from the acquisition of BTP of U.K. by Clariant should |
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| be
fully visible in Pakistan in the years to come. The already |
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| comprehensive
product range of Clariant, now supplemented |
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| and
supported by BTP's niche products, should help the Company |
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| in
the deeper penetration in leather sector. |
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| The
upward trend in the sales of Masterbatches is likely to |
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| continue
for sometime due to the innovative use of manufacturing |
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| facilities
and marketing skills available in the Company. These |
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| are
being further developed to maintain the leadership position. |
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| Sale
of products belonging to Division Cellulose, Ethers & |
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| Polymerisates
are likely to be satisfactory albeit with a growth |
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| rate
not easily matched with events achieved in the past. |
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| Your
Company is fully cognizant of the fact that the existing pressure |
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| on
selling prices is likely to continue and aggravate further. Its |
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| negative
impact on the business will be mitigated through yet more |
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| emphasis
on productivity, containment of costs, control on working |
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| capital
and obtaining synergies from volume. |
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| Acknowledgment |
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| The
Board fully appreciates that the excellent performance during |
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| the
year 2000 reflects the best all round input form every employee |
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| of
the company and looks forward to their continued dedication for |
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| achieving
greater heights. |
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On behalf of the Board |
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Farhat A Mirza |
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| Karachi:
26 March 2001 |
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|
Managing Director |
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| Notice
of Meeting |
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| NOTICE
is hereby given that the fifth Annual General |
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| Meeting
of Clariant Pakistan Limited will be held at the |
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| Company's
Registered Office at 1-A/l, Sector 20, Korangi |
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| Industrial
Area, Korangi, Karachi on Friday 25 May |
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| 2001
at 10:00 a.m. for the purpose of transacting the |
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| followin9
business: |
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| 1.
To receive and approve the Audited Accounts for |
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| the
year ended 31 December 2000 alongwith the |
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| Directors'
Report thereon. |
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| 2.
To approve 25% final cash dividend (Rs 2.50 per |
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| share),
as recommended by the directors. This will be |
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| in
addition to the interim cash dividend already paid |
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| @
25% (Rs 2.50 per share) thus making the total |
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| dividend
payment at 50% (Rs 5.00 per share) for |
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| the year. |
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| 3.
To appoint auditors for the year ending 31 December |
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| 2001
and to fix their remuneration. M/s. A.F. Ferguson |
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| &
Co., Chartered Accountants, the retiring auditors, |
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| offer
themselves for reappointment. |
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| 4.
To transact any other ordinary business with the |
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| permission
of the Chair. |
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By Order of the Board |
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S K Mehdi |
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| Karachi:
26 March 2001 |
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|
Secretary |
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| NOTES: |
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| 1.
The share transfer books of the Company will remain closed from 16 May to 25
May 2001 (both days inclusive). Transfers received |
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| in
order by the Share Registrars, Ferguson Associates (Private) Limited at State
Life Building No. l-A, I. I. Chundrigar Road, Karachi |
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| by
15 May 2001 will be in time to entitle the transferees for the dividend and
to attend and vote at the Annual General Meeting. |
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| 2.
A member entitled to attend and vote at the Annual General Meeting may
appoint a proxy to attend and vote instead of him/her. A |
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| proxy
need not be a member of the Company. Form of proxy, in order to be valid must
be received at the Registered Office of the |
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| Company
not later than 48 hours before the Meeting. |
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| 3.
Shareholders whose shares are deposited with Central Depository Company (CDC)
are requested to bring their Original National |
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| Identity
Card and account number in CDC for verification. |
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| Auditors'
Report to the Members |
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| We
have audited the annexed Balance Sheet of Clariant |
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| Pakistan
Limited as at December 31, 2000 and the related |
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| Profit
and Loss Account, Cash Flow Statement and the |
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| Statement
of Changes in Equity together with the notes |
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| forming
part thereof, for the veer then ended and we state |
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| that
we have obtained all the information and explanations |
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| which,
to the best of our knowledge and belief, were |
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| necessary
for the purposes of our audit. |
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| It
is the responsibility of the company's management to |
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| establish
and maintain a system of internal control, and |
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| prepare
and present the above said statements in conformity |
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| with
the approved accounting standards and the requirements |
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| of
the Companies Ordinance, 1984. Our responsibility is to |
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| express
an opinion on these statements based on our audit. |
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| We
conducted our audit in accordance with the auditing |
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| standards
as applicable in Pakistan. These standards require |
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| that
we plan and perform the audit to obtain reasonable |
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| assurance
about whether the above said statements are free |
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| of
any material misstatement. An audit includes examining, |
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| on
a test basis, evidence supporting the amounts and |
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| disclosures
in the above said statements. An audit also |
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| includes
assessing the accounting policies and significant |
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| estimates
made by management, as well as, evaluatin9 the |
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| overall
presentation of the above said statements. We believe |
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| that
our audit provides a reasonable basis for our opinion and, |
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| after
due verification, we report that: |
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| (a)
in our opinion, proper books of account have been |
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| kept
by the company as required by the Companies |
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| Ordinance,
1984; |
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| (b)
in our opinion: |
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| (i)
the Balance Sheet and Profit and Loss Account |
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| together
with the notes thereon have been drawn |
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| up
in conformity with the Companies Ordinance, 1984, |
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| and
are in agreement with the books of account |
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| and
are further in accordance with accounting |
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| policies
consistently applied; |
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| (ii)
the expenditure incurred during the year was |
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| for
the purpose of the company's business; and |
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| (iii)
the business conducted, investments made |
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| and
the expenditure incurred during the year |
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| were
in accordance with the objects of the |
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| company; |
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| (c)
in our opinion and to the best of our information |
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| and
according to the explanations given to us, the |
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| Balance
Sheet, Profit and Loss Account, Cash Flow |
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| Statement
and Statement of Changes in Equity |
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| together
with the notes forming part thereof |
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| conform
with approved accounting standards as |
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| applicable
in Pakistan, and, give the information |
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| required
by the Companies Ordinance, 1984, in the |
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| manner
so required, and respectively give a true and |
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| fair
view of the state of the company's affairs as |
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| at
December 31, 2000 and of the profit, its cash |
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| flows
and changes in equity for the year then ended; and |
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| (d)
in our opinion Zakat deductible at source under the |
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| Zakat
and Ushr Ordinance, 1980 (XVIII of 1980), was |
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| deducted
by the company and deposited in the Central |
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| Zakat
Fund established under Section 7 of that |
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| Ordinance. |
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|
A.F. FERGUSON & Co. |
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| Karachi:
26 March 2001 |
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|
Chartered Accountants |
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| Balance
Sheet as at December 31, 2000 |
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Note |
2000 |
1999 |
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|
(Rupees
'000) |
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| Share
Capital and Reserves |
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| Authorised
capital |
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| 50,000,000
(1999: 50,000,000) ordinary shares of Rs 10 each |
500,000 |
500,000 |
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------------------ |
------------------ |
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| Issued,
subscribed and paid-up capital |
3 |
155,968 |
155,968 |
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| Revenue
reserves |
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|
190,000 |
150,000 |
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| Unappropriated
profit |
|
|
3,846 |
9,362 |
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------------------ |
------------------ |
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|
349,814 |
315,330 |
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| Redeemable
Capital |
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4 |
298,994 |
574,935 |
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| Current
Liabilities |
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| Current
portion of redeemable capital |
4 |
624,432 |
434,667 |
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| Short-term loans |
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5 |
500,000 |
590,000 |
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| Short-term
running finances utilised under |
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| mark-up
arrangements |
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6 |
186,655 |
191,667 |
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| Creditors,
accrued and other liabilities |
7 |
395,897 |
362,203 |
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------------------ |
------------------ |
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|
1,706,984 |
1,578,537 |
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| Contingent
Liabilities and Commitments |
8 |
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|
------------------ |
------------------ |
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|
2,355,792 |
2,468,802 |
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|
========== |
========== |
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| The
annexed notes form an integral part of these accounts. |
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| Exactly
your chemistry. |
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| Tangible
Fixed Assets |
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|
|
| Operating
assets |
|
9 |
538,355 |
521,002 |
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| Capital
work-in-progress |
|
10 |
41,059 |
72,845 |
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|
------------------ |
------------------ |
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|
|
579,414 |
593,847 |
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|
|
|
| Long-term
Loans and Advances |
|
11 |
5,812 |
4,970 |
|
| Long-term
Deposits |
|
|
2,154 |
2,604 |
|
|
|
|
|
| Current Assets |
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|
|
| Stores
and spares |
|
12 |
34,668 |
31,919 |
|
| Stock-in-trade |
|
13 |
672,915 |
641,411 |
|
| Trade debts |
|
14 |
773,600 |
772,249 |
|
| Loans
and advances |
|
15 |
6,160 |
7,185 |
|
| Deposits
and short-term prepayments |
16 |
12,204 |
20,976 |
|
| Taxation
recoverable |
|
|
206,272 |
255,386 |
|
| Other
receivables |
|
17 |
15,323 |
45,886 |
|
| Cash
and bank balances |
|
18 |
47,270 |
92,369 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,768,412 |
1,867,381 |
|
|
|
|
------------------ |
------------------ |
|
|
2,355,792 |
2,468,802 |
|
|
========== |
========== |
|
|
|
Farhat A Mirza |
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|
S K Mehdi |
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|
Chief Executive |
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|
Director |
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|
|
| Profit
and Loss Account |
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| for
the year ended December 31, 2000 |
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|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees
'000) |
|
|
| Turnover |
|
19 |
2,968,139 |
2,842,517 |
|
|
|
|
| Discount
and commission |
|
|
207,256 |
216,191 |
|
| Excise
duty and sales tax |
|
|
386,465 |
370,260 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
593,721 |
586,451 |
|
|
|
|
------------------ |
------------------ |
|
| Net Sales |
|
|
2,374,418 |
2,256,066 |
|
|
| Cost of Sales: |
|
| Cost
of goods sold |
|
20 |
16,453,431 |
1,607,599 |
|
| Administration
and marketing expenses |
21 |
295,017 |
277,011 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,940,360 |
1,884,610 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
434,058 |
371,456 |
|
|
| Indent
commission - |
|
| net
of payment of Rs 9.494 million (1999: Rs 5.222 million) |
16,136 |
17,383 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
450,194 |
388,839 |
|
| Other income |
|
22 |
7,381 |
9,336 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
457,575 |
398,175 |
|
|
|
|
| Financial
charges |
|
23 |
241,879 |
292,005 |
|
| Other charges |
|
24 |
16,228 |
8,046 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
258,107 |
300,051 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
199,468 |
98,124 |
|
| Taxation-
current |
|
87,000 |
50,000 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
112,468 |
48,124 |
|
| Unappropriated
profit brought forward |
|
9,362 |
230 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
121,830 |
48,354 |
|
|
|
| Appropriations: |
|
| Interim
dividend at Rs. 2.50 (1999: Rs. Nil) per share |
|
38,992 |
-- |
|
| Proposed
dividend at Rs 2.50 (1999: Rs 2.50) per share |
38,992 |
38,992 |
|
| Transfer
to revenue reserves |
|
40,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
117,984 |
38,992 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
3,846 |
9,362 |
|
|
========== |
========== |
|
