| Cherat Papersack Limited |
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors'
Report to the Members |
|
| Auditors'
Report to the Members |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Statement
of Changes in Equity |
|
| Notes
to the Financial Statements |
|
| Pattern
of Shareholding |
|
|
|
| COMPANY
INFORMATION |
|
|
|
| Board
of Directors |
|
| Mr.
Mohammed Faruque |
|
Chairman |
|
| Mr.
Zahid Faruque |
|
Chief Executive |
|
| Mr.
Iqbal Faruque |
|
Director |
|
| Mr.
Ahmad Faruque |
|
Director |
|
| Mr.
Mahmood Faruque |
|
Director |
|
| Mr.
Akbarali Pesnani |
|
Director |
|
| Mr.
Shehryar Faruque |
|
Director |
|
| Mr.
Akhtar Mahmood (NIT) |
|
Director |
|
|
| Company
Secretary |
|
| Mr. R. Jafrani |
|
|
| Auditors |
|
| Sidat
Hyder Qamar & Co. |
|
|
| Bankers |
|
| ABN
Amro Bank |
|
| Allied
Bank Ltd. |
|
| Credit
Agricole Indosuez |
|
| Gulf
Commercial Bank Ltd. |
|
| Habib
Bank Ltd. |
|
| Metropolitan
Bank Ltd. |
|
| Muslim
Commercial Bank Ltd. |
|
| National
Bank of Pakistan |
|
| Soneri
Bank Ltd. |
|
| Standard
Chartered Grindlays Bank Ltd. |
|
| United
Bank Ltd. |
|
|
| Registered
office |
|
| Modern
Motors House, |
|
| Beaumont
Road, |
|
| Karachi-75530 |
|
|
| Factory |
|
| Plot No. 26, |
|
| Gadoon
Amazai Industrial Estate, |
|
| Distt. Swabi, |
|
| N.W.F.P. |
|
|
| Sales Office |
|
| 1st
Floor, Betani Arcade, |
|
| Jamrud Road, |
|
| Peshawar. |
|
|
| Regional
Office |
|
| 3,
Sunderdas Road, |
|
| Lahore. |
|
|
| Islamabad
Office |
|
| No.
7, Mezzanine Level, |
|
| Razia
Sharif Plaza, 92, Blue Area, |
|
| Islamabad |
|
|
|
| NOTICE
OF MEETING |
|
|
| NOTICE
IS HEREBY GIVEN that the Eleventh Annual General Meeting of this Company will
be held |
|
| on
Tuesday, December 19, 2000, at 12.30 p.m. at the registered Office of the
Company at Modern |
|
| Motors
House, Beaumont Road, Karachi, to transact the following business: |
|
|
| 1.
To receive and consider the Audited Accounts for the year ended June 30,
2000, with the |
|
| Directors'
and Auditors' Reports thereon. |
|
|
| 2.
To declare final dividend of Rs. 10.00 per share (100%) recommended by
Directors in addition |
|
| to
an interim dividend of Rs. 4.50 (45%) already paid aggregating to Rs. 14.50
per share |
|
| (145%). |
|
|
| 3.
To appoint auditors for the ensuing year and to fix their remuneration. |
|
|
|
By Order of the Board |
|
|
|
R. JAFRANI |
|
| Karachi:
November 07, 2000 |
|
Company Secretary |
|
|
| Notes: |
|
| 1.
The register of members will be closed from Tuesday, December 12 to Tuesday,
December 19, |
|
| 2000
inclusive and no transfers will be registered during that time. Shares
received in order at |
|
| the
Registered Office of the Company at the close of business on Monday, December
11, |
|
| 2000
will be treated in time for the purpose of the above Dividend. |
|
|
| 2.
A member eligible to attend and vote at the Annual General Meeting is
entitled to appoint |
|
| another
member as his/her proxy to attend and vote in his/her stead. Proxies to be
effective |
|
| must
be in writing and must be received by the Company 48 hours before the
Meeting. |
|
|
| 3.
Shareholders whose shares are registered in their account/sub-account/group
account with |
|
| Central
Depository System (CDS) are requested to bring original NIC along with their
account |
|
| number
in CDS and participant's ID number for verification. In case of appointment
of proxy |
|
| by
such account holders and sub-account holders the guidelines as contained in
SECP's |
|
| circular
of January 26, 2000 to be followed. |
|
|
| 4.
The shareholders are requested to notify the Company if there is any change
in their address. |
|
|
|
| DIRECTORS'
REPORT TO THE MEMBERS |
|
| FOR
THE YEAR ENDED 30 JUNE, 2000 |
|
|
| DEAR
SHAREHOLDERS, |
|
| Your
Directors are pleased to present you the Company's Annual Report together
with Audited |
|
| Accounts
and Auditors' Report for the year ended June 30, 2000. |
|
|
| PRODUCTION
AND DISPATCHES |
|
| The
Comparative figures for production and dispatch of bags are as under: |
|
|
|
1999-2000 |
1998-1999 |
Change |
|
|
(Units in Mil.) |
(Units in Mil.) |
( % ) |
|
| Production |
|
59.87 |
54.42 |
10.01 |
|
| Dispatches |
|
60.02 |
54.28 |
10.57 |
|
|
| MARKETING |
|
| As
in previous years maintaining quality of the bags remained our prime
consideration, this together |
|
| with
constant follow up with our customers helped us in keeping our share of the
market. In fact in |
|
| terms
of quantity the dispatches for this year as shown above were higher than last
year by 5.74 |
|
| million bags. |
|
|
| To
maintain our share of market and keeping in view the liquidity position of
cement manufacturers |
|
| we
had to extend substantial credit to our customers. Our receivables as of June
30, 2000 stood at |
|
| Rs.
149.028 million, which is equivalent to approximately 88 days of sales. |
|
|
| OPERATIONAL
RESULTS |
|
| The
summarized operating results are as follows: |
|
|
|
1999-2000 |
1998-1999 |
Change |
|
|
(Units in Mil.) |
(Units in Mil.) |
( % ) |
|
| Net Sales |
|
615.50 |
590.20 |
4.30 |
|
| Cost of Sales |
|
519.40 |
478.40 |
8.60 |
|
|
----------- |
----------- |
----------- |
|
| Gross Profit |
|
96.10 |
111.80 |
(14.0) |
|
| Expenses
& Taxes |
25.00 |
29.30 |
(14.7) |
|
|
----------- |
----------- |
----------- |
|
| Net Profit |
|
71.10 |
82.50 |
(13.8) |
|
|
========== |
========== |
========== |
|
| Other
comparative figures are reflected in the Financial Statements. |
|
|
| APPROPRIATION
OF PROFIT |
|
|
| The
profit after tax for current year amounts to Rs. 71.10 million which together
with unappropriated |
|
| profit
of Rs. 43.41 million from last year gives us Rs. 114.51 million to be
appropriated. |
|
|
| Your
Directors propose following appropriation of profit: |
|
|
|
Rupees in Million |
|
|
| Net
Profit for the year |
|
71.10 |
|
| Add:
Unappropriated profit brought forward |
|
43.41 |
|
|
------------ |
|
| Total
available for appropriation |
|
114.51 |
|
|
========== |
|
| Appropriation: |
|
| Interim
dividend @ 45% |
|
18.36 |
|
| Proposed
final dividend @ 100% |
|
40.80 |
|
| Transfer
to General Reserve |
|
15.00 |
|
| Balance
to be carried forward |
|
40.35 |
|
|
------------ |
|
|
114.51 |
|
|
========== |
|
|
| FINANCIAL
COMMITMENTS / DEBT OBLIGATIONS |
|
| There
are no long-term loans against the company and the commitments under the
lease financing |
|
| are
being met as per schedule. |
|
|
| FUTURE
OUTLOOK |
|
| The
performance of our Company is largely dependent on the cement industry and
the price for |
|
| imported
kraft paper. While there has been an improvement in the cement sector, the
prices of |
|
| imported
kraft paper have been fluctuating. The depreciation in the value of Pak Rupee
also remains |
|
| a
concern as it directly impacts our cost of production. We hope that the
economic situation improves |
|
| in
the coming months, which should in turn help us maintain our performance. |
|
|
| AUDITORS |
|
| The
present auditors M/s. Sidat Hyder Qamar & Company, Chartered Accountants,
retire and being |
|
| eligible
offer themselves for reappointment. |
|
|
| ACKNOWLEDGEMENT |
|
| In
the end we wish to thank all the financial institutions, which have been
associated with us, for their |
|
| support,
understanding and cooperation. We would also like to thank all our customers
for their |
|
| continued
association. Our special thanks are due to our team of dedicated managers and
other |
|
| executives,
supervisors and hard working employees, who continue to put in their best
efforts to |
|
| ensure
optimum performance. |
|
|
| Thank you, |
|
|
For and on behalf of |
|
|
CHERAT PAPERSACK LIMITED |
|
|
|
MOHAMMED FARUQUE |
|
| Karachi:
November 07, 2000. |
|
Chairman |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of CHERAT PAPERSACK LIMITED as at 30
June 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. |
|
|
| It
is the responsibility of the Company's management to establish and maintain a
system of internal |
|
| control,
and prepare and present the above said statements in conformity with the
approved account- |
|
| ing
standards and the requirements of the Companies Ordinance, 1984. Our
responsibility is to |
|
| express
an opinion on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These |
|
| standards
require that we plan and perform the audit to obtain reasonable assurance
about whether |
|
| the
above said statements are free of any material misstatement. An audit
includes examining on a |
|
| test
basis, evidence supporting the amounts and disclosures in the above said
statements. An audit |
|
| also
includes assessing the accounting policies and significant estimates made by
management, as |
|
| well
as, evaluating the overall presentation of the above said statements. We
believe that our audit |
|
| provides
a reasonable basis for our opinion and, after due verification, 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 the 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, the profit and loss account, cash flow statement and statement
of changes |
|
| in
equity together with the notes forming part thereof conform with approved
accounting stand- |
|
| ards
as applicable in Pakistan, and, 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 at30 June 2000 and of the profit, its 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. |
|
|
| KARACHI:
November 07, 2000 |
|
SIDAT HYDER QAMAR &
CO. |
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30 JUNE 2000 |
|
|
|
NOTE |
2000 |
1999 |
|
|
(Rupees) |
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorised |
|
| 5,000,000
Ordinary |
|
| shares
of Rs. 10/- each |
|
50,000,000 |
50,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
3 |
40,800,000 |
40,800,000 |
|
| Share
premium reserve |
|
6,800,000 |
6,800,000 |
|
| General
reserve |
|
140,000,000 |
125,000,000 |
|
| Unappropriated
profit |
|
40,354,689 |
43,413,851 |
|
|
227,954,689 |
216,013,851 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
| TO
FINANCE LEASE |
|
4 |
1,830,001 |
10,050,449 |
|
|
| Deferred
liability- Gratuity |
|
1,804,742 |
1,482,134 |
|
| CURRENT
LIABILITIES |
|
| Current
maturity of liabilities against assets |
|
| subject
to finance lease |
|
4 |
8,220,448 |
6,730,878 |
|
|
|
|
| Creditors,
accrued and other liabilities |
|
5 |
59,786,772 |
58,397,403 |
|
| Proposed
dividend |
|
|
40,800,000 |
40,800,000 |
|
|
|
----------- |
----------- |
|
|
|
108,807,220 |
105,928,281 |
|
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
7 |
|
|
----------- |
----------- |
|
|
340,396,652 |
333,474,715 |
|
|
========== |
========== |
|
| FIXED
ASSETS-TANGIBLE |
|
| Operating
assets |
|
8 |
31,654,875 |
34,797,382 |
|
| Assets
subject to finance lease |
|
9 |
18,009,945 |
20,011,050 |
|
| Capital
work-in-progress |
|
|
-- |
241,294 |
|
|
|
----------- |
----------- |
|
|
|
49,664,820 |
55,049,726 |
|
| INVESTMENTS |
|
10 |
17,677,912 |
6,237,350 |
|
|
|
|
|
| LONG-TERM
ADVANCES AND DEPOSITS |
|
11 |
802,144 |
1,386,384 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores,
spares and loose tools |
|
|
9,163,182 |
9,213,329 |
|
| Stock-in-trade |
|
12 |
70,523,707 |
82,220,632 |
|
| Trade debts |
|
13 |
149,027,790 |
102,104,499 |
|
| Advances,
deposits, prepayments |
|
|
|
|
| and
other receivables |
|
14 |
20,868,167 |
10,660,362 |
|
|
|
|
|
| Cash
and bank balances |
|
15 |
22,668,930 |
66,602,433 |
|
|
|
----------- |
----------- |
|
|
|
272,251,776 |
270,801,255 |
|
|
|
----------- |
----------- |
|
|
340,396,652 |
333,474,715 |
|
|
========== |
========== |
|
| These
financial statements should be read with the annexed notes. |
|
|
|
ZAHID FARUQUE |
|
AKBARALI PESNANI |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30 JUNE 2000 |
|
|
|
NOTE |
2000 |
1999 |
|
|
(Rupees) |
|
|
| Sales - net |
|
16 |
615,559,267 |
590,173,146 |
|
| Cost
of goods sold |
|
17 |
519,432,209 |
478,415,048 |
|
|
|
----------- |
----------- |
|
| Gross profit |
|
|
96,127,058 |
111,758,098 |
|
| Administration
expenses |
|
18 |
5,716,658 |
4,936,445 |
|
| Selling
expenses |
|
19 |
14,543,427 |
15,411,320 |
|
|
|
----------- |
----------- |
|
|
|
20,260,085 |
20,347,765 |
|
|
|
----------- |
----------- |
|
| Operating
profit |
|
|
75,866,973 |
91,410,333 |
|
| Financial
charges |
|
|
8,575,597 |
8,486,072 |
|
| Other charges |
|
|
433,000 |
333,900 |
|
| Other income |
|
|
(11,224,397) |
(7,198,867) |
|
| Workers'
profit participation fund |
|
|
3,904,139 |
4,489,461 |
|
|
|
----------- |
----------- |
|
|
|
1,688,339 |
6,110,566 |
|
|
|
----------- |
----------- |
|
| Net
profit for the year |
|
|
74,178,634 |
85,299,767 |
|
| Taxation
- current |
|
23 |
3,077,796 |
2,950,866 |
|
| - prior |
|
|
-- |
(166,320) |
|
|
|
----------- |
----------- |
|
|
|
3,077,796 |
2,784,546 |
|
|
|
----------- |
----------- |
|
| Profit
after taxation |
|
|
71,100,838 |
82,515,221 |
|
| Accumulated
profit brought forward |
|
|
43,413,851 |
40,978,630 |
|
|
|
----------- |
----------- |
|
| Profit
available for appropriation |
|
|
114,514,689 |
123,493,851 |
|
| Appropriations: |
|
|
|
| Proposed
final dividend @ 100% (1999: @ 100%) |
|
40,800,000 |
40,800,000 |
|
| Interim
dividend @ 45% (1999: 35%) |
|
|
18,360,000 |
14,280,000 |
|
| Transfer
to general reserve |
|
|
15,000,000 |
25,000,000 |
|
|
|
----------- |
----------- |
|
|
|
74,160,000 |
80,080,000 |
|
|
|
|
|
| Accumulated
profit carried forward |
|
|
40,354,689 |
43,413,851 |
|
|
|
========== |
========== |
|
| Earning
per share - basic and diluted |
|
24 |
17.43 |
20.22 |
|
|
========== |
========== |
|
| These
financial statements should be read with the annexed notes. |
|
|
|
ZAHID FARUQUE |
|
AKBARALI PESNANI |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30 JUNE 2000 |
|
|
|
|
2000 |
1999 |
|
|
(Rupees) |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Net
profit before taxation |
|
74,178,634 |
85,299,767 |
|
| Adjustment
for: |
|
|
|
| Depreciation |
|
5,773,020 |
6,359,339 |
|
| Amortization
of deferred cost |
|
305,000 |
305,000 |
|
| Provision
for gratuity |
|
322,608 |
463,868 |
|
| Loss
on disposal of fixed assets |
|
12,320 |
(17,822) |
|
| Financial
charges |
|
8,575,597 |
8,486,072 |
|
| Reversal
of provision for diminution in investment |
|
(1,440,562) |
-- |
|
| Return
on investment |
|
(2,136,755) |
(4,457,710) |
|
|
------------ |
------------ |
|
| Operating
profit before working capital changes |
|
85,589,862 |
96,438,514 |
|
|
| (Increase)
/ decrease in: |
|
| Stores,
spares and loose tools |
|
50,147 |
(4,679,521) |
|
| Stock-in-trade |
|
11,696,925 |
19,560,780 |
|
| Trade debts |
|
(46,923,292) |
(6,296,745) |
|
| Advances,
deposits, prepayments and |
|
| other
receivables |
|
(4,782,531) |
2,066,455 |
|
|
| Increase
/ (decrease) in: |
|
| Creditors,
accrued and other liabilities |
|
(794,558) |
(38,112,328) |
|
|
------------ |
------------ |
|
|
(40,753,309 |
(27,461,359 |
|
|
------------ |
------------ |
|
| Cash
generated from operations |
|
44,836,553 |
68,977,155 |
|
| Income
tax paid |
|
(6,366,314) |
(3,621,816) |
|
|
(60,376,982) |
(41,758,410) |
|
| Dividend paid |
|
(2,605,576) |
(4,791,574) |
|
| Interest paid |
|
------------ |
------------ |
|
|
(69,348,872) |
(50,171,800) |
|
|
------------ |
------------ |
|
| Net
cash (used in) / from operating activities |
|
(24,512,319) |
18,805,355 |
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Additions
to assets |
|
(1,228,720) |
(2,674,789) |
|
| Sale
proceed of fixed assets |
|
870,000 |
62,150 |
|
| Capital
work-in-progress |
|
-- |
(20,502) |
|
| Long-term
advances, deposits and prepayments |
|
237,527 |
83,801 |
|
| Investments |
|
(10,000,000 |
3,225,000 |
|
| Short-term
investment |
|
-- |
10,000,000 |
|
| Interest
received |
|
-- |
7,098,350 |
|
|
------------ |
------------ |
|
| Net
cash (used in)/from investing activities |
|
(10,121,1 93 |
17,774,010 |
|
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
| Lease
rentals paid against finance lease |
|
(9,299,991) |
(9,299,992) |
|
|
------------ |
------------ |
|
| Net
(decrease) /increase in cash and bank balances |
|
(43,933,503) |
27,279,373 |
|
| Cash
and cash equivalents at beginning of the year |
|
66,602,433 |
39,323,060 |
|
|
------------ |
------------ |
|
| Cash
and cash equivalents at end of the year |
|
22,668,930 |
66,602,433 |
|
|
========== |
========== |
|
|
|
|
|
ZAHID FARUQUE |
|
AKBARALI PESNANI |
|
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED 30 JUNE 2000 |
|
|
|
Share |
Capital |
General |
Unappro- |
Total |
|
|
Capital |
Reserve |
Reserve |
priated |
|
|
|
(Share Premium) |
|
Profit |
|
|
(Rupees) |
|
| Balance
at 01 July, 1998 |
40,800,000 |
6,800,000 |
100,000,000 |
40,978,630 |
188,578,630 |
|
| Net profit for |
|
|
|
|
|
| the
year 1998-1999 |
-- |
-- |
-- |
82,515,221 |
82,515,221 |
|
|
----------- |
----------- |
----------- |
----------- |
----------- |
|
|
40,800,000 |
6,800,000 |
100,000,000 |
123,493,851 |
271,093,851 |
|
| Appropriation: |
|
| Transferred
during |
|
| the year |
|
-- |
-- |
25,000,000 |
25,000,000 |
-- |
|
| Proposed
final |
|
|
