Tri-Pak Films Limited - Annual Reports

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Tri-Pak Films Limited

Annual Report 2000

CONTENTS

Company :Information

Highlights

Notice of Meeting

Directors' Report to the Shareholders

Auditors' Report to the Members

Balance Sheet

Profit and Loss Account

Statement of Changes in Equity

Cash Flow Statement

Notes to the Accounts

Pattern of Shareholding

COMPANY IN FORMATION

Board of Directors

Akira Yamamura

Javed Aslam

Khalid Yacob

Minoru Shibata

Mujeeb Rashid (Managing Director)

Syed Babar All (Chairman)

Syed Hyder Ali

Yukio Imamura (Alternate to Minoru Shibata)

M. Saeed Iqbal (Alternate to Syed Babar Ali)

Company Secretary

Khalid Yacob

Auditors

A.F. Ferguson & Co.

Chartered Accountants

Legal advisors

Khan and Piracha

Bankers

ABN-Amro Bank N.V.

Albaraka Islamic Bank B.S.C. (E.C)

Al Tawfeek Investment Bank Limited

American Express Bank Limited'

ANZ Grindlays Bank Limited

Bank of Khyber

Credit Agricole Indosuez

Deutsche Bank A.G.

Emirates Bank International P.J.S.C.

Habib Bank A.G. Zurich

Muslim Commercial Bank Limited

National Bank of Pakistan

Registered Office

First Floor, Hilal-e-Ahmer House,

Khayaban-e-Tqbal, Main Clifton Road,

Karachi-75600, Pakistan

PABX: (021) 5863941-42, 5874047-49

Fax: (021) 5860251

Head Office &

First Floor, G.D. Arcade, Fazal-uI-Haq Road,

Sales Office

73-E, Blue Area, Islamabad

Tel: (051) 273135, 273907-8, Fax: (051) 273136

Regional Sales Offices

Karachi

201-202, Marine Pride, Block 7, Clifton,

Karachi-75600

Tel: (021) 5871801-2, Fax: (021) 5871803

Lahore

First Floor, 41-Commercial Area,

Main Boulevard,

Cavalary Ground, Lahore

Tel: (042) 6676848, 6676455, Fax: (042) 6675899

Works

Plot No.78/1, Phase

Hattar ]:industrial Estate, Hattar, N.W.F.P.

Tel' (0995) 617406~7, Fax: (0995) 617054

HIGHLIGHTS

Year to June 30,

2000

1999

Sales - million rupees

769.78

605.93

Net profit - million rupees

134.15

95.89

Cash dividend - as a %age of paid up capital

15.00

25.00

Earnings per share -rupees

4.47

3.20

Total assets - million rupees

505.27

494.24

Finished BOPP film production -tonnes

5,752

5,193

Number of employees

123

127

NOTICE OF MEETING

Notice is hereby given that the Eighth Annual General Meeting of Tri-Pack Films Limited

will be held at Beach Luxury Hotel, Moulvi Tamizuddin Khan Road, Karachi on Friday

September 29, 2000 at 10:00 a.m. to transact the following ordinary and special

business :-

A. Ordinary Business:

1. To confirm the minutes of the previous Annual General Meeting held on

December 7, 1999.

2. To receive, consider and adopt the Audited Accounts for the year ended

June 30, 2000, the Report of the Auditors thereon and the Report of the

Directors.

3. To approve dividend. The Directors have recommended a final dividend of

15% (Rs. 1.50 per share of Rs. 10) on the existing issued share capital of

the Company.

4. To appoint Auditors and to fix their remuneration.

5. To elect Directors in accordance with the provisions of Section 178 of the

Companies Ordinance, 1984 for a term of three years commencing from

October 3, 2000.

As decided by the Board of Directors, the number of Directors to be

elected would be seven as at present.

The present Directors of the Company will retire on October 2, 2000. The

retiring Directors namely, Messrs Akira Yamamura, .laved Aslam, Khalid

Yacob, Minoru Shibata, Mujeeb Rashid, Syed Babar Ali and Syed Hyder Ali

being eligible, have notified their intention to offer themselves for re-

election as Directors for a fresh term of three years commencing from

October 3, 2000.

B. Special Business:

6. To consider and if thought fit, to approve the remuneration payable to the

Chief Executive and working Director of the Company.

By Order of the Board

Karachi

Khalid Yacob

September 1, 2000

Director & Company Secretary

Notes:

1. The Share Transfer Books of the Company will remain closed from

September 14, 2000 to September 29, 2000 (both days inclusive) for the

purpose of entitlement of dividend and to attend the Annual General

Meeting.

2. Every candidate for election of Directors, whether he is a retiring Director

or otherwise, shall file with the Company, not later than fourteen days

before the date of the Annual General Meeting a notice of his intention to

offer himself for election as a Director of the Company.

3. A member of the Company entitled to attend and vote may appoint

another member as his/her proxy to attend and vote instead of him/her.

Proxies must be received at the Registered Office of the Company not less

than 48 hours before the time of holding the meeting.

CDC Account Holders will further have to follow the undermentiond

guidelines as laid down in Circular 1 dated January 26, 2000 issued by the

Securities and Exchange Commission of Pakistan:

A. For Attending the Meeting:

i) In case of individuals, the account holder or sub-account holder and/or

the person whose securities are in group account and their registration

details are uploaded as per the Regulations, shall authenticate his identity

by showing his original National Identity Card (NIC) or original passport at

the time of attending the meeting.

ii) In case of corporate entity, the Board of Directors' resolution/power of

attorney with specimen signature of the nominee shall be produced

(unless it has been provided earlier) at the time of the meeting.

B. For Appointing Proxies:

i) In case of individuals, the account holder or sub-account holder and/or

the person whose securities are in group account and their registration

details are uploaded as per the Regulations, shall submit the proxy form

as per the above requirement.

ii) The proxy form shall be witnessed by two persons whose names,

addresses and NIC numbers shall be mentioned on the form.

iii) Attested copies of NIC or the passport of the beneficial owners and the

proxy shall be furnished with the proxy form.

iv) The proxy shall produce his original NIC or original passport at the time of

the meeting.

v) In case of corporate entity, the Board of Directors'' resolution/power of

attorney with specimen signature shall be submitted (unless it has been

provided earlier) alongwith proxy form to the Company.

Statement in regard to special business:

Remuneration to Chief Executive and working Director:

The shareholders' approval will be sought for the payment of remuneration and

the provision of certain facilities to the Chief Executive / Managing Director and

working Director in accordance with their terms and conditions of service with

the Company.

For the purpose, the following ordinary resolutions which set out the terms of

appointment of the Chief Executive / Managing Director and working Director will

be moved at the meeting.

RESOLVED that consent be and is hereby given for the payment as

remuneration to Mr. Mujeeb Rashid, Chief Executive / Managing Director of the

sums not exceeding Rs. 2.6 million per year effective October 1, 2000 and for

the provision to him of housing, transport, medical and leave fare facilities and

other benefits incidental or relating to his office in accordance with the

Company's rules from time to time in force.

RESOLVED that consent be and is hereby given for the payment as

remuneration to Mr. Javed Aslam, working Director of the sums not exceeding

Rs. 0.9 million per year effective October 1, 2000 and for the provision to him of

transport and other benefits incidental or relating to his office in accordance with

the Company's rules from time to time in force.

FURTHER RESOLVED that in the event of any of the aforesaid offices falling

vacant, the approval hereby given shall be equally applicable to any other person

appointed to fill such vacancy.

Mr. Mujeeb Rashid and Mr. Javed Aslam are interested in this business to the

extent of their respective remuneration.

DIRECTORS' REPORT

TO THE SHAREHOLDERS

The Directors are pleased to present their annual report, together with the Company's

audited accounts for the year ended June 30, 2000.

Although our country's business environment had to encounter many changes and

uncertainties during the year under review, your Company maintained its growth tempo

to further consolidate its market standing. Sales increased by 15% to Rs. 696 million

from last year's Rs. 606 million.

With the help of planned longer runs and reduced wastage, the Company was able to

increase plant capacity utilization from 96% during the previous years to 107% during

the year under review by producing 5,752 tonnes against 5,193 tonnes last year.

As a result of higher capacity utilization, increased operational efficiency and lower

financial costs, your Company was able to register a 40% growth in its net profit over

the previous year from Rs. 96 million to Rs. 134 million.

Your Company completed its five years sales tax exemption period on January 17th,

2000. We are pleased to inform you that we have made a successful transition to the

sales tax regime, with full support of our customers.

Earnings Per Share

Based on the net profit for the current year the earnings per share were Rs. 4.47

(1999: Rs. 3.20).

Credit Rating

The Pakistan Credit Agency (Pvt.) Limited (PACRA), an affiliate of IBCA Limited UK has

assigned your Company a long term rating of "A+" (single A plus) and a short term

rating of "A1" (single A one ). This confirms a strong capacity of the Company for timely

payment of its financial commitments.

Expansion Program

The work on setting up of a second line with a production capacity of 5800 tonnes

finished BOPP film is in full swing. Construction work has started and agreements with

major suppliers of Plant & Machinery have been finalised. Total cost of the project is

expected to be Rs. 800 million, which will be financed through a long term loan of

Rs. 650 million from local financial institutions and Rs. 150 million from internal cash

generation. This mode of financing which does not ask for an increase in current share

capital will go a long way in considerably increasing the long term return to our

Shareholders.

While selecting plant and equipment, due care was taken to ensure that the new

production line would be based on the latest technology available today. The enhanced

features in our new line will further improve our operational efficiency, and will provide

us with the technical capabilities to fully respond to the rising expectations of our

customers in the years to come.

Our Vision for the Future

Our vision for the future is to develop your Company into becoming a regional leader in

the business of stretched films for which focused efforts will be made in the coming

years to develop and acquire the required competencies and know how.

Human Resources

Your Company's motivated employees have contributed immeasurably to the

achievements of last year's financial results. The Directors would like to thank them for

all of their dedicated efforts.

The realization of our future vision will depend mainly on their efforts. Your Company

will allocate sufficient funds in the future for their training and development.

Our Business Partners

Our Company's operational efficiency depends as much on the support of our

customers, suppliers, service providers and consultants as on our own internal efforts.

We would like to thank them for their valuable support during last year.

Appropriation

The Directors recommend payment of cash dividend of 15% (Rs. 1.50 per share) on the

paid up capital of the Company. Accordingly the following appropriations have been

made:-

(Rupees in thousand)

The Company made a net Profit of

134,152

Adding thereto unappropriated profit at June 30,1999

816

Makes available for appropriation a sum of

134,968

From that sum the Directors recommend payment of a

cash dividend of Rs. 1.50 per share

45,000

Transfer to general reserve

89,000

And propose to carry forward to 2000-2001, the balance of

968

Appointment of Auditors

The present Auditors Messrs A. F. Ferguson & Co., Chartered Accountants retire and

offer themselves for re-appointment.

You are requested to appoint the Auditors and fix their remuneration for the year 2001.

Directors

Since the holding of the last Annual General Meeting on December 7, 1999, following

changes have taken place in the Board of Directors:-

Mr. Tariq Hamid resigned from the Company's Board and Mr. Mujeeb Rashid filled in the

vacancy.

Mr. Kiyohide Inoue representing Mitsubishi Corporation of Japan resigned from the

Company's Board and was replaced by Mr. Minoru Shibata.

The Board of Directors wishes to record its appreciation for the valuable services

rendered by the retiring Directors and extends its warm welcome to the incoming

Directors.

Mr. Javed Aslam resigned as Managing Director of the Company and Mr.. Mujeeb Rashid

was appointed in his place.

The Board of Directors wishes to record its appreciation of the valuable services

rendered by Mr. Javed Aslam during his tenure as Managing Director.

Pattern of shareholding

A statement reflecting the pattern of shareholding as on .June 30, 2000 is attached to

the Annual Report.

For and on behalf of the Board.

Mujeeb Rashid

August 22,2000

(Managing Director)

AUDITORS' REPORT

TO THE MEMBERS

We have audited the annexed balance sheet of Tri-Pack Films Limited as at June 30,

2000 and the related profit and loss account, statement of changes in equity and cash

flow statement, 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;

explanations given to us, the balance sheet, profit and loss account, statement of

changes in equity and cash flow statement 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, changes in equity and

cash flows 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.

A.F. Ferguson & Co.

Chartered Accountants

Islamabad.

August 23, 2000

BALANCE SHEET

AS AT JUNE 30, 2000

2000

1999

Note

(Rupees in thousand)

SHARE CAPITAL

Authorised

300,000

==========

Issued, subscribed and paid up

300,000

GENERAL RESERVE

119,000

30,000

UNAPPROPRIATED PROFIT

968

816

----------

419,968

330,816

REDEEMABLE CAPITAL

6,667

CURRENT LIABILITIES

Current portion of redeemable capital

13,333

Current portion of liabilities against

assets subject to finance lease

45,741

Creditors, accrued and other liabilities

40,302

22,684

Proposed dividend

45,000

75,000

----------

85,302

156,758

CONTINGENCIES AND COMMITMENTS

----------

505,270

494,241

FIXED CAPITAL EXPENDITURE

Operating fixed assets

288,422

333,288

Capital work-in-progress

7,095

----------

295,517

333,288

LONG-TERM DEPOSITS

888

CURRENT ASSETS

Stores and spares

28,786

26,866

Stock-in-trade

52,570

61,162

Trade debts

68,423

47,937

Advances, deposits, prepayments and

other receivables

8,206

12,506

Cash and bank balances

50,880

11,594

----------

208,865

160,065

----------

505,270

494,241

==========

The annexed notes form an integral part of these accounts.

Mujeeb Rashid

Akira Yamamura

Chief Executive

Director

PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED JUNE 30, 2000

2000

1999

Note

(Rupees in thousand)

Sales

769,777

605,932

Less: Sales tax

73,569

----------

Net sales

696,208

605,932

Cost of sales

504,457

439,434

----------

Gross profit

191,751

166,498

Operating expenses

Administrative and general

315,471

21,469

Selling and distribution

18,984

17,832

----------

50,531

39t301

141,220

127,197

----------

Financial charges

3,094

28,930

Other income

(3,087)

(2,669)

----------

26,261

----------

141,213

100,936

Workers' profit participation fund

7,061

5,047

----------

Profit for the year

134,152

95,889

Accumulated profit brought forward

816

9,927

----------

Available for appropriation

134,968

105,816