| Pakistan Gum & Chemicals Limited |
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| Annual
Report 2000 |
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CORPORATE OBJECTIVES |
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Develop a strong organisation centred at Karachi, to run the |
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existing business and exploit new opportunities. |
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Develop relationships with agents and end-users for a |
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world-wide reach for our products and thus improve |
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profitability. |
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Develop a strategy on procurement of raw material to secure |
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long-term business and development opportunities. |
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Identify, establish and exploit new markets and technologies |
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through Research and Development and marketing skills. |
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Identify suitable acquisitions for real synergies to improve |
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our corporate position and profit potential. |
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In recognition of its responsibilities as a Corporate Body |
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the Company aims to: |
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Pursue personnel policies which recognise the aspirations |
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and performance of individuals and which are suited to the |
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diverse levels of skills required and the many career paths |
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available in the company. |
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Have full regard to the attitudes and expectations of its
client |
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base at large and contribute as appropriate, to the
formulation |
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of positive attitudes and opinions. |
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Act as a reputable, efficient and responsible organisation. |
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| CONTENTS |
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| TEN
YEAR SUMMARY OF STATISTICS |
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| COMPANY
INFORMATION |
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| NOTICE
OF MEETING |
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| DIRECTORS'
REPORT |
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| CHAIRMAN'S
REVIEW |
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| AUDITORS'
REPORT |
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| BALANCE
SHEET |
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| PROFIT
& LOSS ACCOUNT |
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| STATEMENT
OF CHANGES IN EQUITY |
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| CASH FLOW STATEMENT |
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| NOTES
TO THE ACCOUNTS |
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| PATTERN
OF SHAREHOLDINGS |
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| TEN
YEAR SUMMARY OF STATISTICS |
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| (Rupees
in Thousands) |
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|
1991 |
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
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| Operating assets |
28,870 |
24,907 |
23,676 |
21,688 |
36,133 |
32,206 |
28,663 |
24,410 |
20,862 |
20,151 |
| Capital
work-in-progress |
-- |
337 |
2,337 |
9,695 |
49 |
233 |
2,102 |
6,719 |
6,719 |
698 |
| Long-term
Loans & Deposits |
1,337 |
1,418 |
1,370 |
1,418 |
959 |
957 |
772 |
725 |
4,091 |
7,869 |
| Net
current and other assets |
62,719 |
58,224 |
62,327 |
62,636 |
70,686 |
74,137 |
28,818 |
(3,512) |
21,130 |
38,831 |
| Total
assets employed |
92,926 |
84,886 |
89,710 |
95,437 |
107,827 |
107,563 |
60,355 |
28,342 |
52,802 |
67,549 |
| Ordinary capital |
|
29,260 |
29,260 |
29,260 |
29,260 |
29,260 |
29,260 |
29,260 |
29,260 |
29,260 |
29,260 |
| Reserves |
|
57,687 |
53,208 |
58,301 |
65,357 |
78,567 |
78,303 |
31,095 |
(918) |
23,542 |
37,707 |
| Long
term and deferred liabilities |
5,979 |
2,418 |
2,149 |
820 |
-- |
-- |
-- |
-- |
-- |
582 |
| Total
funds employed |
92,926 |
84,886 |
89,710 |
95,437 |
107,827 |
107,563 |
60,355 |
28,342 |
52,802 |
67,549 |
| Net turnover |
|
223,873 |
239,761 |
279,178 |
275,453 |
317,114 |
387,703 |
169,967 |
174,474 |
242,705 |
302,651 |
| Profit
before taxation |
5,622 |
(4,603) |
15,528 |
10,229 |
23,343 |
2,553 |
(46,090) |
(30,401) |
31,620 |
27,556 |
| % of net sales |
|
2.51 |
(1.92) |
5.56 |
3.71 |
7.36 |
0.66 |
(27.12) |
(17.42) |
13.03 |
9.10 |
| %
of average assets employed |
6.05 |
(5.18) |
17.79 |
11.05 |
22.97 |
2.37 |
(54.90) |
(68.55) |
77.94 |
45.79 |
| Profit/(loss)
after taxation |
4,284 |
(2,284) |
8,457 |
11,444 |
20,525 |
(264) |
(47,208) |
(32,014) |
28,119 |
23,829 |
| Cash
dividend - amount |
2,926 |
2,195 |
3,365 |
4,389 |
7,315 |
-- |
-- |
-- |
3,658 |
9,656 |
| Cash
dividend - % |
10 |
7.5 |
11.50 |
15.00 |
25.00 |
-- |
-- |
-- |
12.50 |
33.00 |
| Earnings
per share Rs. |
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| (based
on profit before tax) |
1.92 |
(1.57) |
5.31 |
3.50 |
7.98 |
0.87 |
(15.75) |
(10.39) |
10.81 |
9.42 |
| Number
of permanent employees |
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| at year end |
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138 |
135 |
127 |
125 |
122 |
121 |
129 |
92 |
85 |
78 |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
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| Mohammad
Moonis |
Chairman |
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| Faiz N. Abdulali |
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Vice-Chairman |
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| Tariq
Mohammed Amin |
Director |
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| Anis
A. Hussain |
Director |
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| Zahid Zaheer |
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Director |
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| James Irwin |
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Director |
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| Munawar
F. Abdulali |
Director |
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| Zaeem
A. Hanafi |
Director |
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| Mohammad
Hassan Hanafi |
Managing Director |
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| COMPANY
SECRETARY |
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| Zaeem
A. Hanafi |
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| AUDITORS |
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| Sidat
Hyder Qamar & Co. |
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| Chartered
Accountants |
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| BANKERS |
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| Askari
Commercial Bank Limited |
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| Habib
Bank Limited |
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| Muslim
Commercial Bank Limited |
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| Standard
Chartered Grindlays |
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| Bank
Alfalah Limited |
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| REGISTERED
OFFICE |
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| B-19/A,
Irshad Qadri Road |
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| S.
I. T. E., Karachi-75700 |
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| NOTICE
OF MEETING |
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| NOTICE
IS HEREBY given that the 35th Annual General Meeting of Pakistan Gum &
Chemicals Limited, will be held on Thursday 31st May |
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| 2001,
at 03:00 p.m. in the Council Hall of The Overseas Investors Chamber of
Commerce & Industry, Talpur Road, Karachi, to transact the |
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| following
business: |
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| Ordinary
Business |
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| 1.
To receive, consider and adopt the audited accounts of the Company for the
year ended 31st December 2000, together with the |
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| Auditors'
and Directors' Reports thereon. |
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| 2.
To consider and, if thought fit, to approve payment of dividend at Rs.3.30
per share (33%) for the year ended 31st December 2000, |
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| as
recommended by the Board of Directors. |
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| 3.
To appoint auditors for the year ending 31st December 2001 and fix their
remuneration. Messrs. Sidat Hyder Qamar & Co., |
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| Chartered
Accountants, the present auditors retire and, being eligible, offer
themselves for re-appointment. |
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| Special
Business |
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| 4.
To approve remuneration payable to the Chairman, Vice-Chairman, Chief
Executive and an Executive Director. |
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| 5.
To transact any other business with the permission of the Chair. |
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By order of the Board |
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Zaeem A. Hanafi |
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| Karachi,
May 08, 2001 |
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Company Secretary |
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| Notes: |
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| 1.
The Share Transfer Books of the Company will remain closed from 21st May 2001
to 31st May 2001 (both days inclusive) |
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| 2.
A member entitled to attend, speak and vote at the Meeting shall be entitled
to appoint another person as his/her proxy to attend, |
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| speak
and vote instead of him/her, and a proxy so appointed shall have such right
with respect to attending, speaking and voting |
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| at
the Meeting as are available to a Member. Proxy forms must be deposited at
the Company's Registered Office not less that 48 |
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| hours
before the time for holding the Meeting. |
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| 3.
Members are requested to intimate any change in their addresses immediately. |
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| 4.
Statements Under Section 100 of the Companies Ordinance 1984 and draft
Resolution pertaining to the Special Business |
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| referred
to above are annexed. |
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| STATEMENT
UNDER SECTION 160(1)(B) OF THE COMPANIES ORDINANCE, 1984 AND DRAFT RESOLUTION
PERTAINING TO |
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| THE
SPECIAL BUSINESS REFERRED ABOVE, IS AS UNDER: |
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| An
amount of Rs. 3,330,000.00 (Rupees three million three hundred thirty
thousand only) will be proposed as the aggregate remuneration |
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| of
the Chairman, Vice Chairman, Chief Executive and an Executive Director for
the period October 1,2000 to September 30, 2001, in the |
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| form
of the following Resolution: |
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| "Resolved
that the consent of the Company be and is hereby accorded to the aggregate
remuneration of Rs. 3,330,000.00 |
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| (Rupees
three million three hundred thirty thousand only) of the following persons
acting as Chief Executive and Directors of the |
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| Company,
for the period October 1, 2000 to September 30, 2001, in addition to their
entitlement in respect of housing, transport, |
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| medical,
leave facilities, retirement and other benefits, incidental to or relating to
their office in accordance with the rules and policy |
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| of
the Company". |
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Rupees |
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| Mr.
Mohammad Moonis, Chairman |
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200,000.00 |
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| Mr.
Faiz N. Abdulali, Vice Chairman |
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680,000.00 |
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| Mr.
Mohammad Hassan Hanafi, Chief Executive |
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1,310,000.00 |
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| Mr.
Zaeem A. Hanafi, Executive Director |
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1,140,000.00 |
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------------------ |
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3,330,000.00 |
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========== |
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| Mr.
Mohammad Hassan Hanafi, Chief Executive and Mr. Zaeem Ahmad Hanafi, Director
Finance/Company Secretary of the company are |
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| brothers
of the Chairman and to that extent are directly interested in the same. |
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| Mr.
Munawar F. Abdulali who is one of the Director of the company is the son of
the Vice-Chairman and to that extent is directly |
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| interested
in the same. |
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| Mr.
Mohammad Moonis, Chairman and Mr. Zaeem Ahmad Hanafi, Director
Finance/Company Secretary of the company are brothers of |
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| the
Chief Executive and to that extent are interested in the same. |
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| Mr.
Mohammad Moonis, Chairman and Mr. Mohammad Hassan Hanafi, Chief Executive of
the company are brothers of the Director |
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| Finance/Company
Secretary and to that extent are interested in the same. |
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| DIRECTORS'
REPORT |
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| For
presentation at the 38th Annual General Meeting of the Company to be held on
Thursday the 31st of May, 2001. |
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| 1.
Your Directors hereby submit their Report and Audited Accounts of the Company
together with the Auditors' Report thereon for the |
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| year
ended December 31, 2000. The Company's financial results are as follows: |
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Rupees |
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| Net
profit for the year before taxation |
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27,556,014 |
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| Provision
for taxation: |
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| Current year |
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4,300,000 |
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| Prior years |
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(563,768) |
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------------------ |
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(3,736,232) |
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------------------ |
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| Net
profit for the year after taxation |
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23,819,782 |
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| Unappropriated
profit brought forward |
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10,000 |
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------------------ |
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23,829,782 |
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| Transfer
to General Reserve |
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-- |
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------------------ |
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23,829,782 |
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| Appropriations |
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| Proposed
Dividend @ 33% (1999: 12.5%) |
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9,655,800 |
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| Amount
carried to Balance Sheet |
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14,173,982 |
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========== |
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| Earning
per share |
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8.14 |
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========== |
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| 2.
There have been no material changes or commitments affecting the financial
position of the Company between end of the financial |
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| year
December 31, 2000 and the date of this Report. |
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| 3.
There have been no changes during the financial year, in the nature of the
business of the Company or in the classes of business |
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| in
which the Company is interested. |
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| 4.
There is no reservations, observations or adverse remarks contained in the
Auditor's Report. |
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| 5.
The pattern of shareholding is provided on page 31 of this Annual Report. |
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| 6.
East West Group Holdings Inc., a company incorporated in British Virgin
Islands, is the holding company by virtue of its 60% |
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| shareholding
in the company. |
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| 7.
The present auditors Messrs. Sidat Hyder Qamar & Co., Chartered
Accountants, Karachi, retire and being eligible, offer themselves |
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| for
re-appointment. |
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By Order of
the Board |
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|
Mohammad Hassan Hanafi |
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Faiz N. Abdulali |
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| Karachi:
April 30, 2001 |
Chief Executive |
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Director |
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| CHAIRMAN'S
REVIEW |
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| I
feel privileged to present the results of your company for the year ended
31st December 2000. This is the 38th Annual General Meeting |
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| of
the Company since its inception and the second under the new management. |
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| I
am very pleased to advise you that the turn-around which was made by the
company last year continues, and, we have been able to post |
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| an
operating profit of Rs. 28,876,506 for the year 2000. |
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| As
already stated by me last year, the Pakistani Guar business is relentlessly
challenged by fierce competition from across the border. |
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| Also
our escalating energy costs do not help. Another serious handicap is a
tendency on the part of guar seed stockists to withhold sales |
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| of
seed in anticipation of pushing prices higher, and, not adhering to the
prevailing international market realities. A change in this attitude |
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| is
necessary, as almost all our production is exported, and local vagaries are
not conducive to our marketing efforts. It may interest you to |
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| know
that for this very reason we had to import seeds from abroad to meet export
commitments because local stockists holding on to |
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| stocks
were adamant to reason. |
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| Last
year's Guar crop was not sufficient to meet the industries' total
requirement, however, the harvest was better this year, and, it is |
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| hoped
that there will be adequate supplies to meet the needs of all the
manufacturers. PakChem's share in the world market, in recent |
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| years
had dropped gradually, but with better crop prospects and sustained marketing
efforts we expect to retrieve much of the lost ground. |
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| Against
this background the Board is happy to recommend a dividend of 33%. |
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| I
would like to avail this opportunity to thank my colleagues on the Board
without whose wise counsel, and, abiding support my |
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| responsibilities
would have been considerably harder. I would like to acknowledge the
contributions made by the staff at all levels, whose |
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| efforts
have also contributed materially to the company's satisfactory performance. |
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| I
would also like to take this opportunity to express our deep appreciation
once again to Meyhall A. G. of Switzerland, for their continued |
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| support,
and, to Rhodia, their parent company, for their growing co-operation. |
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M. Moonis |
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| Karachi:
April 30, 2001 |
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Chairman |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of PAKISTAN GUM & CHEMICALS
LIMITED as at 31st December, 2000 and the related |
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| profit
and loss account, cash flow statement and statement of changes in equity
together with the notes forming part thereof, for the year |
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| then
ended and we state that we have obtained all the information and explanations
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 establish and maintain a
system of internal control, and prepare and present the |
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| above
said statements in conformity with the approved accounting standards and the
requirements of the Companies Ordinance, 1984. |
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| Our
responsibility is to express an opinion on these statements based on our
audit. |
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| We
conducted our audit in accordance with auditing standards as applicable in
Pakistan. These standards require that we plan and |
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| perform
the audit to obtain reasonable assurance about whether the above said
statements are free of any material misstatement. An |
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| audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the above said statements. An audit also |
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| includes
assessing the accounting policies and significant estimates made by
management, as well as, evaluating the overall presenta- |
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| tion
of the above said statements. We believe that our audit provides a reasonable
basis for our opinion and, after due verification, we |
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| report that: |
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| a)
in our opinion, proper books of account have been kept by the Company as
required by the Companies Ordinance, 1984. |
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| b)
in our opinion: |
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| i)
the balance sheet and profit and loss account together with the notes thereon
have been drawn up in conformity with the |
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| Companies
Ordinance, 1984, and are in agreement with the books of account and are
further in accordance with accounting |
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| policies
consistently applied except for the changes as stated in note 2.3 with which
we concur; |
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| ii)
the expenditure incurred during the year was for the purpose of the Company's
business; and |
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| iii)
the business conducted, investments made and the expenditure incurred during
the year were in accordance with the objects |
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| of
the Company; |
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| 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 |
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| account,
cash flow statement and statement of changes in equity together with the
notes forming part thereof conform with |
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| approved
accounting standards as applicable in Pakistan and give the information
required by the Companies Ordinance, 1984, in |
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| the
manner so required and respectively give a true and fair view of the state of
the company's affairs as at 31st December, 2000 and |
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| of
the profit, its cash flows and changes in equity for the year then ended; and |
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|
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| d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 (XVIII of 1980) was deducted by the Company |
|
| and
deposited in the Central Zakat Fund established under Section 7 of that
Ordinance. |
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|
SIDAT HYDER QAMAR & CO. |
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| KARACHI:
April 30, 2001 |
|
Chartered Accountants |
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| BALANCE
SHEET AS AT DECEMBER 31, 2000 |
|
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|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Share
capital authorised |
|
| 5,000,000
ordinary shares of Rs. 10 each |
|
50,000,000 |
50,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
3 |
29,260,000 |
29,260,000 |
|
| General reserves |
|
|
23,532,352 |
23,532,352 |
|
| Accumulated
profit |
|
|
14,173,982 |
10,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
66,966,334 |
52,802,352 |
|
|
|
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|
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| DEFERRED
LIABILITY- Compensated absences |
2.3.4 |
582,322 |
-- |
|
| Current
Liabilities |
|
|
|
| Shod
term finances under mark-up arrangement |
4 |
80,000,000 |
-- |
|
| Creditors,
accrued expenses and other liabilities |
5 |
16,820,882 |
7,875,291 |
|
| Taxation-net |
|
6 |
1,179,379 |
-- |
|
| Proposed
Dividend |
|
|
9,655,800 |
3,657,500 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
107,656,061 |
11,532,791 |
|
| Contingencies
and commitments |
|
7 |
-- |
-- |
|
|
------------------ |
------------------ |
|
|
|
|
175,204,717 |
64,335,143 |
|
|
========== |
========== |
|
|
|
|
Mohammad Hassan Hanafi |
|
|
|
Chief Executive |
|
|
|
| Fixed
Assets- Tangible |
|
|
|
| Operating
assets |
|
8 |
20,150,630 |
20,861,751 |
|
|
|
|
|
| Assets
held for disposal- Capital work-in-progress |
9 |
698,355 |
6,718,926 |
|
| Long-term loan |
|
10 |
41,626 |
45,626 |
|
| Long-term
deposits |
|
11 |
780,005 |
4,045,366 |
|
| Retirement
and other benefits |
|
12 |
7,047,000 |
-- |
|
|
|
| Current Assets |
|
| Stores
and spares |
|
13 |
2,607,215 |
2,781,026 |
|
| Stock-in-trade |
|
14 |
74,076,967 |
14,842,962 |
|
| Trade Debts |
|
15 |
32,041,874 |
8,891,724 |
|
| Loans
and advances |
|
16 |
1,609,247 |
204,352 |
|
| Short-term
deposits and prepayments |
17 |
867,655 |
655,149 |
|
| Other
receivables |
|
18 |
4,491,174 |
350,761 |
|
| Taxation- net |
|
6 |
-- |
121,398 |
|
| Cash
and bank balances |
|
19 |
30,792,969 |
4,816,102 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
146,487,101 |
32,663,474 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
175,204,717 |
64,335,143 |
|
|
========== |
========== |
|
|
|
| Auditors'
Report Annexed |
|
| These
financial statements should be read with the annexed notes. |
|
|
|
|
Faiz N. Abdulali |
|
|
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31,2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
Note |
Rupees |
Rupees |
|
|
| Sales - net |
|
20 |
302,651,301 |
242,704,826 |
|
| Cost
of goods sold |
|
21 |
254,764,758 |
197,912,435 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
47,886,543 |
44,792,391 |
|
| Operating
expenses |
|
|
|
| Administration
and selling expenses |
22 |
14,423,738 |
7,992,604 |
|
| Shipping
expenses |
|
23 |
4,586,299 |
2,022,925 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
19,010,037 |
10,015,529 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
28,876,506 |
34,776,862 |
|
| Other income |
|
24 |
6,908,963 |
282,854 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
35,785,469 |
35,059,716 |
|
| Financial
and other charges |
|
25 |
8,229,455 |
3,440,005 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
27,556,014 |
31,619,711 |
|
|
|
|
|
|
| Provision
for taxation |
|
| - current year |
|
|
4,300,000 |
2,940,261 |
|
| - prior years |
|
|
(563,768) |
560,758 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
3,736,232 |
3,501,019 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
23,819,782 |
28,118,692 |
|
| Accumulated
profit/(loss) brought forward |
|
10,000 |
(79,418,840) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
profit / (loss) available for appropriation |
23,829,782 |
(51,300,148) |
|
|
|
|
|
|
|
| Appropriations |
|
|
|
|
| Transfer
from General Reserve |
|
|
-- |
54,967,648 |
|
| Proposed
Cash Dividend @33% (1999: 12.5%) |
|
(9,655,800) |
(3,657,500) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(9,655,800) |
51,310,148 |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
profit carried forward |
|
14,173,982 |
10,000 |
|
|
|
|
========== |
========== |
|
