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Century Paper & Board Mills Limited
Annual Report 2001
Quality Policy
Our Mission: Strive together for excellence
* Century excels in manufacturing and marketing quality Paper &
Board for packaging.
* Century a customer focused company, is always ready to accept
challenges for achieving its mission.
* Century's quality objectives are designed for enhancing customer
satisfaction and operational efficiencies.
* Century is committed to building Safe, Healthy and Environment
friendly atmosphere.
* Century, with its professional and dedicated team, ensures continual
improvement in quality & productivity through effective
implementation of Quality Management System.
* Century values the social & economic well being of its partners
and strives for a harmonious environment conducive to team
performance.
Contents
Corporate Information
Notice of Meeting
Year at a glance
Statement of Value Added
Directors' Review
Auditors' Report to the Members
Balance Sheet
Profit & Loss Account
Cashflow Statement
Statement of Changes in Equity
Notes to the Accounts
Performance of last five years
Statement under Section 237 (1) of the Companies
Ordinance, 1984
Pattern of Holding of Shares
Consolidated Financial Statements
Report and Financial Statements of Century Power
Generation Limited - subsidiary Company
Performance of last five years -
Century Power Generation Limited
Corporate Information
BOARD OF DIRECTORS
Iqbalali Lakhani - Chairman
M. Rafi Chawla - Chief Executive & Managing Director
Zulfiqar Ali Lakhani
Amin Mohammed Lakhani
Tasleemuddin Ahmed Batlay
Javed Omer Vohra
Syed Shabahat Hussain - Nominee Director (NIT)
ADVISOR
Sultanali Lakhani
COMPANY SECRETARY
Ramzan Ali Halani
EXECUTIVE COMMITTEE
M. Rafi Chawla
Aftab Ahmad
Zafar Iqbal Sobani
AUDITORS
Ford, Rhodes, Robson, Morrow
Chartered Accountants
BANKERS
ABN AMRO Bank N.V
American Express Bank Limited
Credit Agricole Indosuez
Citibank N.A.
Emirates Bank International PJSC
Habib Bank Limited
Mashreq Bank Psc
National Bank of Pakistan
Oman International Bank S.A.O.G.
Standard Chartered Bank
Standard Chartered Grindlays Bank Limited
Societe Generale
The Hong Kong & Shanghai Banking Corporation Limited
HEAD OFFICE, CORPORATE OFFICE &
REGIONAL SALES OFFICE (SOUTH)
Lakson Square, Building No. 2
Sarwar Shaheed Road, Karachi-74200, Pakistan
Phones: (021) 5689081- 89
Fax: (021) 5681163 & 5683410
E-Mail: cpbm@cyber.net.pk
REGISTERED OFFICE & REGIONAL SALES OFFICE (NORTH)
41-K, Model Town, Lahore, Pakistan
Phone: (042) 5886801 - 4
MILLS
Jamber Khurd, Bhai Pheru, Tehsil Chunian
Lahore-Multan Road, District Kasur, Pakistan
Phones: (04943) 510061 & 510062
Notice of Meeting
NOTICE IS HEREBY GIVEN that the 18th Annual General Meeting of CENTURY PAPER & BOARD MILLS LIMITED
will be held on Thursday September 27, 2001 at 10:30 a.m. at Avari Renaissance Towers Hotel, Fatima Jinnah
Road, Karachi to transact the following business:
1. To receive, consider and adopt the financial statements for the year ended June 30, 2001 and the Directors'
and Auditors' reports thereon.
2. To declare a final dividend @ 15% i.e. Rs. 1.50 per share of Rs. 10/- each. This is in addition to the interim
dividend @ 10% i.e. Re. 1.00 per share of Rs. 10/- each already paid.
3. To appoint Auditors and fix their remuneration.
By Order of the Board
RAMZAN ALI HALANI
DATED: August 27, 2001 Company Secretary
NOTES:
1. The share transfer books of the Company will remain closed from September 15, 2001 to September 27,
2001 both days inclusive. Transfers received in order by the Corporate Office of the Company situated at
Lakson Square, Building No. 2, Sarwar Shaheed Road, Karachi upto September 14, 2001 will be considered
in time for entitlement of the dividend.
2. A member who has deposited his/her shares into Central Depository Company of Pakistan Limited, must
bring his/her participant's [D number and account/sub-account number alongwith Original National Identity
Card (NIC) or Original Passport at the time of attending the meeting.
3. A member entitled to attend and vote at the general meeting may appoint another member as his proxy to
attend, speak and vote instead of him.
4. If a proxy is granted by a member who has deposited his/her shares in Central Depository Company of
Pakistan Limited, the proxy must be accompanied with participant's ID number and account/sub-account
number alongwith attested photocopies of NIC or the Passport of the beneficial owner. Representatives
of corporate members should bring the usual documents required for such purpose.
5. Forms of proxy to be valid must be received by the Company not later than forty eight hours before the time
of the meeting.
6. Members are requested to notify the Company promptly of any change in their addresses.
7. Form of proxy is enclosed herewith.
Year at a glance
June 30, June 30,
2001 2000
Sales volume Tonnes 64,145 60,120
Gross sales Rs/mn 2,466 2,006
Net sales Rs/mn 2,143 1,743
Profit before taxation Rs/ran 241 151
Taxation Rs/mn 96 56
Profit after taxation Rs/mn 145 95
Shareholders' fund Rs/mn 781 715
Total assets Rs/mn 1,403 1,361
Capital expenditure Rs/mn 171 87
Dividend- Cash % age 25 20
Earnings per share Rupees 4.60 3.04
Number of employees 889 874
Statement of Value Added
2001 % age 2000 % age
Rs. 000 Rs. 000
Wealth Generated
Total revenue, net of sales tax 2,156,891 1,781,957
Bought-in-material & services (1,501,888) (1,251,843)
------------------ ------------------
655,003 100 530,114 100
========== ==========
Wealth Distributed
To Employees
Salaries, benefits & related costs 112,849 17 102,275 19
To Government
Excise duty, income tax, import duty
(exclusive of capital items)and Worker's Fund 265,507 41 197,932 38
To providers of Capital
Dividend to shareholders 78,553 12 62,842 12
Mark-up/interest expenses on borrowed funds 54,352 8 55,298 10
Retained for reinvestment & future growth
Depreciation & retained profit 143,742 22 111,767 21
------------------ ------------------ ------------------ ------------------
655,003 100 530,114 100
========== ========== ========== ==========
Directors Review
The Directors have pleasure in presenting their annual report together with the
Company's audited accounts for the year ended June 30, 2001.
MARKETING AND BUSINESS SCENARIO
We are pleased to report that AL-HAMDOLILLAH the company has maintained
sustained growth as reflected in the financial results.
The company has shown a healthy progress in sales both in terms of value and
volume. The total net sales during the year under review is Rs 2.14 Billion which
is higher by 23% vis-a-vis last year's of Rs 1.74 Billion. The sales volume during
the year under review also registered 7% growth achieving optimum capacity
utilization and consistent quality of your company's products and services to our
customers in term of timely supplies and all round support in their businesses.
The selling prices of the company's products were revised following changes in
the international prices of paper and paperboard especially in Far East, enabling
us to get positive adjustment in price regime because of our superior quality, and
the Company was able to fully recover costs of raw materials, fuel, power rates
and impact of rupee devaluation.
The import of Coated board was restricted because of higher prices and effective
assessment procedures contributing increased revenues to Government and
providing level playing field to local producers.
MANUFACTURING
We are delighted to state that during the year all the production facilities performed
exceedingly well and achieved high efficiencies in terms of input per ton of
electricity and water which resulted in controlling the cost of production.
FINANCIAL RESULTS
The Directors are pleased to report that the overall profitability of the company
continued to be robust. In this year the company earned profit before tax of Rs
240.93 million as compared to Rs 151.15 million last year a substantial increase
of 59%. The profit after tax also increased to Rs 144.52 million during the year
compared to Rs 95.46 million last year showing a 51% increase. The improvement
of profit is also attributable to astute financial and working capital management.
Directors' Review
An interim dividend of 10% was paid out of current year's profit. The Directors
now recommend a final dividend of 15% making a total dividend of 25% for the year.
The appropriations approved by the Directors are therefore as follows:
(Rupees in thousands)
Profit for the year before taxation 240,934
Taxation 96,412
------------------
Profit after taxation 144,522
Unappropriated profit brought forward 59
------------------
Profit available for appropriation 144,581
Appropriation:
Interim Dividend Re 1.00 per share 31,421
Proposed final dividend at Rs 1.50 per share 47,132
Transfer to general reserve 66,000
------------------
144,553
------------------
Unappropriated profit carried forward 28
==========
Earnings per share 4.60
==========
CONTRIBUTION TO THE NATIONAL ECONOMY
We are pleased to state that inspite of prevailing economic pressures your
company's continued contributions to the national economy in terms of duties and
taxes during the year amounted to Rs 515 million showing an increase of 20%
over last year.
The company's products are substituting imports resulting in favorable impact on
country foreign exchange reserves, besides providing gainful employment.
ISO CERTIFICATION
After obtaining ISO 9002 certification for entire mills operations your company
has embarked on obtaining latest version of IS0-9001:2000. It is expected that
this certification will be received by last quarter of 2001. This certification would
further strengthen the confidence of our customers and will result in overall positive
impact in company's operation and quality control.
OUR SUBSIDIARY - CENTURY POWER GENERATION LTD.
Inspite of a volume growth of 3% and increase in the selling price in the year
under review profitability of the subsidiary eroded significantly primarily due to
increase in furnace oil prices. Hence operating profit went down from Rs 56.87
million last year to Rs 20.47 million in current year, a fall by 64%.
The profit after tax consequently also went down significantly to Rs 16.00 million
as compared to Rs 47.22 million last year. No dividend has been declared by the
subsidiary company due to the low EPS of Rs 1.39 as compared to last year EPS
of Rs 4.11.The future profitability of our subsidiary is dependent upon the furnace
oil prices which have softened slightly after reaching its peak which is expected
to improve profitability with corresponding stream of dividend income for your
Company.
INVESTMENTS
We continued our investment in Capital Expenditure of Rs 171 million during the
year to improve our productivity in the long run and to enable us to remain as one
of the key players in the Paper and Board Industry in Pakistan. Our investment
during the last five years has been almost half a billion, The major investment
during the year under review had been BMR of Coating Plants. This project was
completed according to plans both in terms of cost and time frame and has resulted
in improved and consistent quality of our Coated product to our customers. The
project of natural gas connection to Mills which was expected to be completed in
the second quarter of 2001 but was delayed due to non commissioning of
installations by the utility company. Now it is expected the installation will be
commissioned in the third quarter of year 2001.
The Company's production capacity has been fully stretched and it does not have
any further capacity to service its valued customers. We have decided to install a
Board Machine which will increase our installed capacity by around 40%. In addition
to this the Company will also diversify and move into manufacturing of value added
packaging by vertical integration. The detail planning has been completed and
it is expected that the project cost will be around Rs 700 - 800 million during
next 2 -3 years. The required plant and equipment to be imported have been
short listed by our team, This investment will contribute in a great way towards
sustainable and constant growth in future to maintain our market share and a
step forward towards diversification.
Your Company is also investing on waste water and effluent treatment plant to
reduce suspended solutions and initiate proper environment management.
FUTURE OUTLOOK
Your Company remains eager to both grow and diversify its business with a view
to increase Shareholders value and to play a positive role in the development of
the national economy.
We are optimistic of the government policy towards better governance at all levels.
The key initiatives include documentation of the economy through GST
implementation and widening of the tax net. We are optimistic that once these
fundamentals are in place it will stimulate local and foreign direct investment in
the country. Your Company is keeping itself well positioned to capitalize on growth
opportunities in the country besides, maintaining past performance.
BOARD OF DIRECTORS
Mr. Shamim Ahmad Khan representing National Investment Trust (NIT) resigned
with effect from 11 June, 2001 .The Board wishes to place on record its appreciation
for contribution of valuable services rendered by him. The Board is pleased to
welcome Mr. Syed Shabahat Hussain, representing NIT.
ACKNOWLEDGEMENTS
The Directors are grateful to the valued customers whose continuous support is a
great source of strength to your Company in the market place.
We also acknowledge and deeply appreciate the support and cooperation received
from the Company's bankers, institutions shareholders and other stakeholders for
their trust and confidence in the management of the Company.
The Directors also congratulate all the employees of the Company for their
unwavering commitment and hard work in Company's sound performance.
AUDITORS
The present Auditors M/s. Ford, Rhodes, Robson, Morrow, retire and being eligible,
offer themselves for re-appointment.
PATTERN OF SHAREHOLDING
A pattern of shareholding of the Company as at June 30, 2001 is included in this
respect.
On behalf of the Board of Directors
IQBALALI LAKHANI
Karachi: July 31, 2001 Chairman
Century Paper & Board Mills Limited
Financial Statements
for the year ended June 30, 2001
Auditors' Report to the Members
We have audited the annexed balance sheet of CENTURY PAPER & BOARD MILLS LIMITED as at June 30, 2001
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 accounting 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 accounts have been kept by the company as required by the Companies
Ordinance, 1984;
(b) in our opinion:
(i) the balance sheet and profit and loss account together with the notes thereon have been
drawn up in conformity with the Companies Ordinance, 1984, and are in agreement with the
books of account and are further in accordance with accounting policies consistently applied;
(ii) the expenditure incurred during the year was for the purpose of the company's business; and
(iii) the business conducted, investments made and the expenditure incurred during the year were
in accordance with the objects of the company;
(c) in our opinion and to the best of our information and according to the explanations given to us, the
balance sheet, profit and loss account, cash flow statement and statement of changes in equity together
with the notes forming part thereof conform with approved accounting standards 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 at June 30, 2001 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 (XVIII of 1980), was
deducted by the company and deposited in the Central Zakat Fund established under section 7 of that
Ordinance.
FORD, RHODES, ROBSON, MORROW
Karachi: July 31,2001 Chartered Accountants
Balance Sheet as at June 30, 2001
Note 2001 2000
(Rupees in thousands)
ASSETS
NON-CURFIEHT ASSETS
Fixed assets - Tangible
Operating assets 3 797,143 718,801
Capital work-in-progress 4 25,390 25,390
------------------ ------------------
836,873 744,191
Long-term investment 5 100,000 100,000
Long-term loans 6 495 424
Long-term deposits and prepayment 7 7,147 8,292
CURRENT ASSETS 944,515 852,907
Stores and spares 8 102,428 100,763
Stock-in-trade 9 159,357 198,346
Trade debts 10 153,775 128,756
Loans, advances and other receivables 11 2,161 14,140
Deposits and prepayments 12 6,830 2,454
Taxation - net 13 20,150 39,679
Cash and bank balances 14 13,707 23,628
------------------ ------------------
458,408 507,766
------------------ ------------------
TOTAL ASSETS 1,402,923 1,360,673
========== ==========
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Authorized capital
35,000,000 ordinary shares of Rs.10 each 350,000 350,000
========== ==========
Issued, subscribed and paid-up capital 15 314,213 314,213
Reserves 467,045 401,045
Unappropriated profit 28 59
------------------ ------------------
781,286 715,317
NON-CURRENT LIABILITIES
Redeemable capital 16 140,000 46,667
Liabilities against assets subject to finance lease 17 16,282 35,437
Deferred liabilities 18 148,167 94,004
------------------ ------------------
304,449 176,108
CURRENT LIABILITIES
Current portion of - redeemable capital 16 46,667 22,222
- liabilities against assets
subject to finance lease 17 19,155 16,833
Short-term finances 19 64,495 245,437
Creditors, accrued and other liabilities 20 139,739 121,914
Proposed final dividend 47,132 62,842
------------------ ------------------
317,188 469,248
CONTINGENCIES AND COMMITMENTS 21
------------------ ------------------
TOTAL EQUITY AND LIABILITIES 1,402,923 1,360,673
========== ==========
The annexed notes form an integral part of these accounts.
IQBALALI LAKHANI M. RAFI CHAWLA
Chairman Chief Executive
Profit and Loss Account
for the year ended June 30, 2001
Note 2001 2000
(Rupees in thousands)
Sales 22 2,143,462 1,742,924
Cost of goods sold 23 1,793,281 1,517,045
------------------ ------------------
Gross profit 350,181 225,879
Other income 24 13,429 14,033
Administrative and selling expenses 25 49,370 47,135
------------------ ------------------
Other charges 26 18,954 11,328
Operating profit 295,286 181,449
Financial charges 27 54,352 55,298
Dividend income from subsidiary company -- 25,000
------------------ ------------------
Profit before taxation 240,934 151,151
Taxation 29 96,412 55,692
------------------ ------------------
Profit after taxation 144,522 95,459
Unappropriated profit brought forward 59 442
------------------ ------------------
Profit available for appropriation 144,581 95,901
Appropriations:
Interim dividend Re 1.00 (10%) per share
(2000: Rs. Nil) 31,421 --
Proposed final dividend Rs. 1.50 (15%) per share
[2000: Rs. 2.00 (20%) per share] 47,132 62,842
Transfer to general reserve 66,000 33,000
------------------ ------------------
144,553 95,842
------------------ ------------------
Unappropriated profit carried forward 28 59
========== ==========
Basic earnings per share 30 Rs. 4.60 Rs. 3.04
========== ==========
The annexed notes form an integral part of these accounts.
IQBALALI LAKHANI M. RAFI CHAWLA
Chairman Chief Executive
Cash Flow Statement
for the year ended June 30, 2001
Note 2001 2000
(Rupees in thousands)
CASH FLOW FROM OPERATING ACTIVITIES
Cash generated from operations 31 404,680 247,305
Financial charges paid (58,959) (67,405)
Tax paid (22,720) (29,141)
Long-term loans (71) 179
Long-term deposits and prepayment 1,145 (289)
------------------ ------------------
Net cash inflow from operating activities 324,075 150,649
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure (171,218) (87,321)
Dividend received 10,000 25,000
Proceeds from sale of fixed assets 1,008 2,276
------------------ ------------------
Net cash (outflow)from investing activities (160,210) (60,045)
CASH FLOW FROM FINANCING ACTIVITIES
Redeemable capital 140,000 20,000
Redemption of redeemable capital (22,222) (76,042)
Repayment of leasing finance (16,833) (17,977)
Dividend paid (93,789) (47,010)
------------------ ------------------
Net cash inflow/(outflow)from financing activities 7,156 (121,029)
------------------ ------------------
Net increase/(decrease)in cash equivalents 171,021 (30,425
Cash and cash equivalents at the beginning of the year (221,809) (191,384)
------------------ ------------------
Cash and cash equivalents at the end of the year (50,788) (221,809)
========== ==========
CASH AND CASH EQUIVALENTS COMPRISE:
Cash and bank balances 13,707 23,628
Short-term finances (64,495) (245,437)
------------------ ------------------
(50,788) (221,809)
========== ==========
The annexed notes form an integral part of these accounts.
IQBALALI LAKHANI M. RAFI CHAWLA
Chairman Chief Executive
Statement of Changes in Equity
for the year ended June 30, 2001
Issued, subscribed
and paid-up Reserves Unappropriated
capital Capital Revenue Profit Total
(Rupees in thousands)
Balance as at July 1, 1999 314,213 85,045 283,000 442 682,700
Profit after taxation -- -- -- 95,459 95,459
Proposed final dividend -- -- -- (62,842) (62,842)
Transfer to general reserve during the year -- -- 33,000 (33,000) --
------------------ ------------------ ------------------ ------------------ ------------------
Balance as at June 30, 2000 314,213 85,045 316,000 59 715,317
Profit after taxation -- -- -- 144,522 144,522
Interim dividend -- -- -- (31,421) (31,421)
Proposed final dividend -- -- -- (47,132) (47,132)
Transfer to general reserve during the year -- -- 66,000 (66,000) --
------------------ ------------------ ------------------ ------------------ ------------------
Balance as at June 30, 2001 314,213 85,045 382,000 28 781,286
========== ========== ========== ========== ==========
The annexed notes form an integral part of these accounts.
IQBALALI LAKHANI M. RAFI CHAWLA
Chairman Chief Executive
Notes to the Accounts
for the year ended June 30, 2001
1. THE COMPANY AND ITS OPERATIONS
The company is incorporated in Pakistan as a public limited company and is quoted on Stock
Exchanges in Pakistan. The company's principal business is production and sale of paper and board
of several varieties.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting convention
These accounts have been prepared on the basis of the historical cost convention.
2.2 Taxation
Current
Provision for current taxation is based on taxable income at the current rates of taxation after
taking into account tax credits and rebates available, if any.
Deferred
Deferred tax is provided using the balance sheet liability method, providing for temporary
differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes.
2.3 Staff retirement benefits
The company contributes to a provident fund scheme established since July 1, 1986 which
covers all permanent employees. Equal contributions are made by the company and the
employees.
Gratuity payable to staff prior to the introduction of the provident fund scheme is accounted
for as and when paid as it is not considered material.
2.4 Tangible fixed assets and depreciation
These are stated at cost less accumulated depreciation except freehold land and capital work-
in-progress which are stated at cost.
Depreciation on operating fixed assets is provided on a straight line basis.
Rates of depreciation, which are disclosed in note 3, are designed to write off the cost over
the estimated useful lives of the assets.
Normal repairs and maintenance costs are charged to the profit and loss account as and
when incurred. Major renewals and improvements are capitalised.
Gains and losses on disposal of fixed assets are taken to the profit and loss account.
2.5 Assets subject to finance lease
Assets held under finance leases are stated at cost less depreciation.
The outstanding obligations under the lease less finance charges allocated to future periods
are shown as a liability.
The financial charges are allocated to accounting periods in a manner so as to provide a
constant periodic rate of charge on the outstanding liability.
Depreciation is charged at the same rates as company owned assets.
2.6 Stores and spares
Stores and spares are stated at cost which is determined by the moving average method except
those in transit and in bond which are Valued at actual cost. Provision is made for slow moving
and obsolete items.
2.7 Stock-in-trade
Raw material, work-in-process and finished goods are stated at the lower of cost and estimated
net realisable value. Cost is arrived at by using the moving average basis except for goods in
transit and in bond which are valued at actual cost. Cost of work-in-process and finished
goods include an appropriate portion of production overheads.
2.8 Trade debts
Debts considered irrecoverable are written off and provision is made for debts considered
doubtful.
2.9 Foreign currency translation
Transactions in foreign currencies are translated into rupees at the rates of exchange
prevailing on the date of transactions. Assets and liabilities in foreign currencies are
translated into rupees at the rates of exchange prevailing at the balance sheet date or at
rates of exchange fixed under contractual arrangements. Exchange gains and losses are
included in income currently.
2.10 Long-term investments
These are stated at cost. However, provisions against diminution in value are made, if
considered permanent.
Revenue recognition
Sales are recorded on despatch of goods to customers. Dividend income is recognised when
the right to the dividend is established.
3. OPERATING ASSETS
The following is a statement of operating assets:
Accumulated Accumulated
Disposals/ depreciation Depreciation Disposals/ depreciation Book value
Description Cost as at adjustments*/ Cost as at as at July charge for the adjustments*/ as at June as at June Depreciation
July 1, 2000 Additions retirements** June 30, 2001 1, 2000 year retirements** 30, 2001 30, 2001 rate %
(Rupees in thousands)
Freehold land (Note 3.1) 33,914 -- -- 33,914 -- -- -- -- 33,914 --
Buildings on freehold land 136,840 3,597 -- 140,437 22,294 3,917 -- 26,211 114,226 2.50
Plant and machinery 944,425 148,553 (1,650) 1,102,335 443,707 63,527 (1,077) 506,601 595,734 5 to 20
(Note 3.2) 13,000 * 2,406*
(1,993) ** (1,962) **
Furniture and fixtures 6,305 750 (28) ** 7,027 3,933 538 (28) ** 4,443 2,584 10 to 20
Vehicles 4,107 349 (313) 4,143 3,193 379 (306) 3,266 877 20
Office equipment 11,729 3,629 (244) 13,364 8,083 1,990 (221) 8,231 5,133 10 to 33
(1,750)** (1,621)**
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
1,137,320 156,878 (2,207) 1,301,220 481,210 70,351 (1,604) 548,752 752,468
13,000 * 2,406 *
(3,771) ** (3,611) **
Assets held under
finance lease
Plant and machinery 82,673 -- (13,000)* 69,673 19,982 7,422 (2,406)* 24,998 44,675 5 to 20
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
1,219,993 156,878 (2,207) 1,370,893 501,192 77,773 (1,604) 573,750 797,143
(3,771)** (3,611)**
========== ========== ========== ========== ========== ========== ========== ========== ==========
2000 1,127,697 99,485 (7,189) 1,219,993 428,629 79,150 (6,587) 501,192 718,801
========== ========== ========== ========== ========== ========== ========== ========== ==========
** These represent items retired during the year and sold as bulk scrap. Consequently it is not practicable to
assign sale proceeds to these individual assets retired (see note 24.1).
3.1 Two acres of land have been leased for 20 years, extendable with mutual consent at the rate
of Rs. 15,000 per month per acre subject to periodical increases to Century Power Generation
Limited, a subsidiary company.
3.2 Included in plant and machinery are some items with a cost of Rs. 11 million {W.D.V. Rs. 8.66
million (2000: Rs. 9.21 million) } which have been installed at Century Power Generation Limited,
a subsidiary company for the full benefit of the company.
3.3 The depreciation charge for the year has been allocated as follows:
2001 2000
(Rupees in thousands)
Cost of goods sold 74,690 76,119
Administrative and selling expenses 3,083 3,031
------------------ ------------------
77,773 79,150
========== ==========
3.4 The following assets were disposed off during the year:
Accumulated Written Sale Mode of
Description Cost Depreciation down value proceeds disposal Sold to
(Rupees in thousands)
Plant and machinery 796 373 423 404 Negotiation M/s. Arden Engineering Automation -
Lahore
Plant and machinery 12 12 -- 150 Negotiation Mr. Shahid Khalid - Karachi
Plant and machinery 491 341 150 107 Negotiation Mr. Ajmal - Lahore
Plant and machinery 351 351 -- 175 Negotiation Mr. Sher Mohammed- Lahore
Vehicle 254 254 -- 83 Negotiation Mr. Rao Sajid Hussain - an employee
Vehicle 59 52 7 49 Insurance Century Insurance Company Ltd-
claim an associated company
Office equipment 169 169 -- 7 Negotiation M/s. Fast Tech Computer System -
Karachi
Office equipment 34 11 23 10 Negotiation Jaffer Brothers (Pvt) Ltd- Karachi
Office equipment 41 41 -- 23 Insurance Century Insurance Company Ltd-
claim an associated company
------------------ ------------------ ------------------ ------------------
2,207 1,604 603 1,008
========== ========== ========== ==========
2000 1,602 1,310 292 2,276
========== ========== ========== ==========
Note 2001 2000
(Rupees in thousands)
4. CAPITAL WORK-IN-PROGRESS
This consists of:
Civil works 1,447 321
Plant and machinery [including in transit
Rs. 7.78 million (2000: Rs. 5.09 million)] 4.1 37,664 9,430
Advance to suppliers 619 15,639
------------------ ------------------
39,730 25,390
========== ==========
4.1 Included in plant and machinery are expenditures relating to installation of pipeline for gas supply to the
company amounting to Rs. 16.87 million.
5. LONG-TERM INVESTMENT
Unquoted
Century Power Generation Limited- a subsidiary company
10,000,000 fully paid ordinary shares of Rs. 10 each.
Equity held- 86.96% (2000: 86.96%).
Value of investment based on the net assets shown in the
audited accounts as at June 30, 2001
Rs. 169.49 million (2000: Rs. 155.57 million). 100,000 100,000
========== ==========
6. LONG-TERM LOANS
Unsecured, considered good
Due from executives 832 862
Other employees 30 29
------------------ ------------------
862 891
Less: Current portion 11 367 467
------------------ ------------------
495 424
========== ==========
Due after three years 32 22
========== ==========
Loans are granted principally for purchase of motor vehicles to employees of the company in accordance
with their terms of employment, excluding those who have been provided with company maintained
cars. The maximum amount due from executives at the end of any month during the year was Rs. 0.94
million (2000: Rs. 1.09 million). The loans are repayable over a period of five years.
7. LONG-TERM DEPOSITS AND PREPAYMENT
Security deposits 7,147 8,272
Prepayment -- 20
------------------ ------------------
7,147 8,292
========== ==========
8. STORES AND SPARES
Stores 19,819 16,264
Spares
- In hand 89,811 87,990
- In transit 298 4,009
------------------ ------------------
90,109 91,999
------------------ ------------------
109,928 108,263
Less: Provision for slow moving and obsolete items 7,500 7,500
------------------ ------------------
102,428 100,763
========== ==========
9. STOCK-IN-TRADE
Raw materials
In hand 131,302 143,818
In transit 9,690 35,819
------------------ ------------------
140,992 179,637
Work-in-process 11,054 7,539
Finished goods 7,311 11,170
------------------ ------------------
159,357 198,346
========== ==========
10. TRADE DEBTS - UNSECURED 153,775 128,756
========== ==========
Trade debts are considered good and have been arrived at after deducting a general provision for
doubtful debts of Rs. 3.00 million (2000: Rs. 2.70 million).
Net amount due from associated undertakings at the end of the year amounted to Rs. 8.50 million
(2000: Rs. 9.92 million). The maximum amount due from associated undertakings at the end of any
month during the year was Rs. 18.35 million (2000: Rs. 9.92 million).
11. LOANS, ADVANCES AND OTHER RECEIVABLES
Loans
Current portion of long-term loans to executives
and other employees 6 367 467
Advances- considered good
to employees 330 207
to suppliers 1,378 2,632
------------------ ------------------
1,706 2,839
Other receivables
Dividend receivable from subsidiary company -- 10,000
Others 88 834
------------------ ------------------
88 10,834
------------------ ------------------
2,161 14,140
========== ==========
12. DEPOSITS AND PREPAYMENTS
Deposits 1,489 1,021
Prepayments 608 758
Current account balance with the
Central Excise Department 4,733 675
------------------ ------------------
6,830 2,454
========== ==========
13. TAXATION - NET
The income tax assessments of the company have been finalised by the Income Tax Department upto
assessment year 1999-2000 (accounting year ended June 30, 1999).
14. CASH AND BANK BALANCES
At banks-on current accounts 7,521 17,718
Cheques in hand 5,055 4,789
Cash in hand 1,131 1,121
------------------ ------------------
13,707 23,628
========== ==========
Cash at banks on current account includes US$ 6,058 (2000: US$ 15,160) held in foreign currency accounts.
15. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
Ordinary
Ordinary shares of
shares of Rs. 10 each
Rs. 10 each issued as
fully paid fully paid Total
in cash bonus shams 2001 2000
Number of shares 24,345,000 7,076,280 31,421,280 31,421,280
========== ========== ========== ==========
(Rupees in thousands)
Balance as at June 30 243,450 70,763 314,213 314,213
========== ========== ========== ==========
Note 2001 2000
(Rupees in thousands)
16. REDEEMABLE CAPITAL
Long-term finances utilised under
mark-up arrangements 16.1 186,667 68,889
Less: Current portion shown under current liabilities 46,667 22,222
------------------ ------------------
140,000 46,667
========== ==========
Rate of
Rate of mark-up
Sale Purchase mark-up on default Redemption/
2001 2000 price price per annum per Re-payment Equal
(Rupees in thousands) (Rupees in thousands) annum from installments
16.1 Long-term finances utilised
under mark-up arrangements
Standard Chartered
Grindlays Bank Limited
For Plant and machinery 46,667 62,222 70,000 126,380 14.75% 25% and 30-06-2000 9 half yearly
waiver of
prompt
payment
rebate
Rs. 19.69
million
For Plant and machinery 140,000 -- 140,000 265,212 The rate of 25% 31-12-2001 9 half yearly
mark-up is 3%
over cut off
yield of the
last auction of
6 months
T- Bills
For Plant and machinery -- 6,667 -- -- -- --
------------------ ------------------
186,667 68,889
========== ==========
All long-term finances utilised under mark-up arrangements are secured by equitable mortgage on
present and future movable and immovable properties and a first pari-passu hypothecation charge
over present and future plant and machinery.
17. LIABILITIES AGAINST ASSETS SUBJECTTO FINANCE LEASE
Future minimum lease payments under finance leases together with the present value of the net minimum
lease payments are as follows:
2001 2000
Minimum Minimum
lease Present lease Present
payments value payments value
(Rupees in thousands)
Within one year 25,110 19,155 26,376 16,833
After one year but not more than five years 18,640 16,282 43,750 35,437
------------------ ------------------ ------------------ ------------------
Total minimum lease payments 43,750 35,437 70,126 52,270
Less: Amounts representing finance charges 8,313 -- 17,856 --
------------------ ------------------ ------------------ ------------------
Present value of minimum lease payments 35,437 35,437 52,270 52,270
Less: Current portion shown under current liabilities 19,155 19,155 16,833 16,833
------------------ ------------------ ------------------ ------------------
16,282 16,282 35,437 35,437
========== ========== ========== ==========
These represent finance leases entered into with leasing companies for plant and machinery. Rates
of financial charges ranging from 19.50% to 22% per annum are used as discounting factors.
The company intends to exercise its option to purchase the leased plant and machinery for Rs. 5.79
million (2000: Rs. 5.99 million) upon completion of the lease period.
These are secured by demand promissory notes and security deposits.
Note 2001 2000
(Rupees in thousands)
18. DEFERRED LIABILITIES
Deferred taxation 18.1 134,163 80,000
Deferred liabilities - other 18.2 14,004 14,004
------------------ ------------------
148,167 94,004
========== ==========
18.1 Net deferred tax liability is composed of differences in accelerated depreciation allowances
amounting to Rs. 134.6 million and differences on leased assets amounting to Rs. 3.2 million
offset by gross deferred tax assets comprising of provisions for obsolete stores and spares
and doubtful debts amounting to Rs. 2.6 million and 1.04 million respectively.
18.2 This is in respect of fixed capacity of sale tax and excise duty referred to in note 21.1(a).
19. SHORT-TERM FINANCES
Utilised under mark-up arrangements
Running finance 19.1 64,495 90,437
Term finance -- 155,000
------------------ ------------------
64,495 245,437
========== ==========
19.1 The company has aggregate short-term running finance facilities amounting to Rs. 713 million
(2000: Rs. 638 million) from commercial banks on mark-up basis. Rates, net of the prompt
payment rebate, range from Re. 0.370 to Re. 0.438 per thousand rupees on daily product
basis. The purchase prices and mark-up amounts are payable by June 30, 2002.
These arrangements are secured by way of pari-passu hypothecation charge created on stock-
in-trade, stores and spares and book debts of the company.
The facilities for opening of letters of credit and guarantees as at June 30, 2001 amounted to
Rs. 644 million (2000: Rs. 651 million) out of which the amount remaining unutilised at the
end of the year was Rs. 517.59 million (2000: Rs. 455.17 million).
20. CREDITORS, ACCRUED AND OTHER LIABILITIES
Creditors 20.1 61,470 62,183
Accrued liabilities 18,287 16,572
Sales tax payable (net) 11,714 6,032
Advances from customers 21,503 14,329
Mark-up accrued on secured:
redeemable capital -- 260
short-term finances 2,733 4,597
------------------ ------------------
2,733 4,857
Mark-up accrued on finance leases 1,905 3,038
Central excise duty payable -- 97
Other financial charges payable 5 806
Workers' profit participation fund 20.2 12,854 8,537
Workers' welfare fund 5,781 2,482
Unclaimed dividend 678 204
Other liabilities 2,809 2,777
------------------ ------------------
139,739 121,914
========== ==========
20.1 Net amount due to associated undertakings at the end of the year aggregated to Rs. 22.52
million (2000: Rs.17 million).
20.2 Workers' profit participation fund
Balance at the beginning of the year 8,537 5,989
Interest on fund utilised in company's business -- 452
Allocation for the year 12,854 8,085
------------------ ------------------
21,391 14,526
Less: Amount paid during the year 8,537 5,989
------------------ ------------------
Balance at the end of the year 12,854 8,537
========== ==========
21. CONTINGENCIES AND COMMITMENTS
22.1 Contingencies
(a) The company came under the purview of fixed capacity for payment of sales tax and
central excise duty in May 1992 and complied fully as per rules and instructions provided.
The company paid these levies on fixed capacity till it was withdrawn in June 1994. The
company was served with a show cause notice in May 1998 for non-payment of sales tax
and central excise duty on clearance over and above the fixed capacity which was
subsequently vacated by the Additional Collector (Adjudication), Lahore. The
Directorate of Inspection and Internal Audit, Custom, Central Excise and Sales Tax,
Lahore has filed an appeal in the Appellate Tribunal, against the order of Additional
Collector (Adjudication), Lahore, for recovery of central excise duty of Rs. 4.92 million
and sales tax of Rs. 3.45 million (plus additional tax and penalties). The appeal is
pending before the Appellate Tribunal, Customs, Central Excise and Sales Tax, Lahore.
However, the company is confident that the appeal will be dismissed on merit.
The company was also served with a show cause notice from the sales tax department
for alleged wrong adjustment of input tax amounting to Rs. 7.37 million during the
applicability of fixed capacity scheme. This show cause notice came for hearing during
the year by the Collectorate of Customs, Sales Tax and Central Excise (Adjudication)
who upheld the view of the department. The company has filed an appeal in the
Appellate Tribunal, Customs, Central Excise and Sales Tax, Lahore who has stayed
the recovery of demand. The company is confident that the appeal will be decided in
its favour.
However, a provision of Rs. 14 million has been made against this as referred in note
18.2.
(b) In May 2001, the Honourable Lahore High Court has decided in favour of the company in
respect of a writ petition filed by the company against the demands raised by the Sales
Tax Authority for the recovery of Rs. 4.32 million for alleged incorrect adjustment of input
tax on some items of stores and spares.
(c) The company filed a writ petition in the Honourable Lahore High Court in the year 1994
against a show cause notice received from the Department for recovery of Rs. 33.89
million for alleged levy of fixed sales tax on industrial customers. The Honourable Lahore
High Court in February 2001 decided the case in favour of the company. The Collector of
Central Excise and Sales Tax filed an appeal in the Honourable Supreme Court of Pakistan
against the above judgement in April 2001. The Division Bench of the Supreme Court
has remanded the case back to the Lahore High Court for fresh hearing. The company is
confident of a favourable decision. Hence, no provision has been made in this respect.
21.2 Commitments
(a) Commitments under letters of credit, contract and guarantees at the end of the year amounted
to Rs. 65.36 million (2000: Rs. 54.45 million).
(b) Commitments for capital expenditure including letters of credit amounted to Rs. 11.28 million
(2000: Rs. 104.14 million).
(c) Commitments in respect of forward exchange contracts amounted to Rs. 61.04 million (2000:
Rs. 141,38 million).
(d) Commitments for rentals under lease agreements in respect of vehicles are as follows:
2001 2000
(Rupees in thousands)
Within one year 5,212 5,162
After one year but not more than five years 9,689 10,252
------------------ ------------------
14,901 15,414
========== ==========
22. SALES
Gross sales 2,466,094 2,005,782
Less: Sales tax 322,632 262,858
------------------ ------------------
2,143,462 1,742,924
========== ==========
23. COST OF GOODS SOLD
Materials consumed 975,686 831,312
Salaries, wages and other benefits 23.1 85,505 78,266
Fuel and power 395,950 301,970
Stores and spares consumed 94,559 90,034
Excise duty 102,018 83,022
Insurance 9,374 9,475
Repairs and maintenance 20,517 17,056
Technical fee -- 665
Lease rentals 2,407 2,452
Packing expenses 26,891 18,270
Depreciation 74,690 76,119
Security services charges 1,934 1,767
Printing, stationery and periodicals 1,131 1,067
Postage and telephone 1,517 1,423
Travelling and conveyance 758 927
------------------ ------------------
1,792,937 1,513,825
Opening work-in-process 7,539 11,958
Closing work-in-process (11,054) (7,539)
------------------ ------------------
(3,515) 4,419
------------------ ------------------
Cost of goods manufactured 1,789,422 1,518,244
========== ==========
Opening stock of finished goods 11,170 9,971
Closing stock of finished goods (7,311) (11,170)
------------------ ------------------
3,859 (1,199)
------------------ ------------------
1,793,281 1,517,045
========== ==========
23.1 Salaries, wages and other benefits include Rs. 2.47 million (2000: Rs. 2.21 million) in respect
of staff retirement benefits.
24. OTHER INCOME
Sale of scrap (net of sales tax) 24.1 7,249 6,976
Profit on sale of fixed assets (net) 405 1,984
Insurance agency commission 2,799 2,606
Insurance claim -- 806
Unclaimed liabilities written back 798 203
Management fee from subsidiary company 480 480
Rent 370 368
Net exchange gain/(loss) 706 (35)
Miscellaneous 622 645
------------------ ------------------
13,429 14,033
========== ==========
24.1 This is stated net of Rs. 0.16 million being the written down value of fixed assets sold as bulk
scrap during the year (see note 3).
25. ADMINISTRATIVE AND SELLING EXPENSES
Salaries, and other benefits 25.1 30,550 27,846
Insurance 1,860 1,883
Repairs and maintenance 1,424 1,796
Lease rentals 2,369 2,750
Electricity charges 1,004 886
Provision for doubtful debts 300 1,200
Bad debts written off -- 51
Depreciation 3,083 3,031
Fees and subscription 483 496
Advertisement and publicity 393 205
Travelling and conveyance 1,919 1,343
Rent, rates and taxes 2,716 2,462
Security services charges 88 77
Printing, stationery and periodicals 725 930
Postage and telephone 2,037 1,844
Entertainment expenses 412 328
Other expenses 7 7
------------------ ------------------
49,370 47,135
========== ==========
25.1 Salaries and other benefits include Rs. 1.19 million (2000: Rs. 1 million) in respect of staff
retirement benefits.
26. OTHER CHARGES
Legal and professional charges 2,403 479
Auditors' remuneration
Audit fee 175 175
Taxation services 153 15
Other services 16 81
Out of pocket expenses 54 23
------------------ ------------------
398 294
Workers' profit participation fund 12,854 8,085
Workers' welfare fund 3,299 2,470
------------------ ------------------
18,954 11,328
========== ==========
27. FINANCIAL CHARGES
Mark-up on redeemable capital 21,130 15,566
Mark-up/Interest on:
Short-term finances 23,483 26,365
Finance lease obligations 8,530 12,282
Workers' profit participation fund -- 452
------------------ ------------------
32,013 39,099
Central excise duty -- 35
Other loan receiving charges -- 37
Bank charges and commission 1,209 561
------------------ ------------------
54,352 55,298
========== ==========
28. GRATUITY
The liability for gratuity not provided in these accounts amounts to Rs. 1.14 million (2000: Rs. 0.93
million) (note 2.3).
29. TAXATION
Current - for the year 42,199 33,366
              - for the prior years 50 (1,674)
------------------ ------------------
42,249 31,692
Deferred 54,163 24,000
------------------ ------------------
96,412 55,692
========== ==========
30. BASIC EARNINGS PER SHARE
There is no dilutive effect on the basic earnings per share of the company, which is based on:
Profit after taxation 144,522 95,459
========== ==========
Weighted average number of ordinary shares (in thousands) 31,421 31,421
========== ==========
Basic earnings per share (Rupees) 4.60 3.04
========== ==========
31. CASH GENERATED FROM OPERATIONS
Profit before taxation 240,934 151,151
Adjustment for non-cash charges and other items:
Depreciation 77,773 79,150
Profit on sale of fixed assets (405) (1,984)
Fixed assets retired (net book value) 160 --
Dividend income -- (25,000)
Provision for doubtful debts 300 1,200
Bad debts written off -- 51
Financial charges 54,352 55,298
Working capital changes 31.1 31,566 (12,561)
------------------ ------------------
404,680 247,305
========== ==========
31.1 Working capital changes
Decrease/(Increase) in current assets:
Stores and spares (1,665) 918
Stock-in-trade 38,989 8,603
Trade debts (25,319) (20,472)
Loans, advances and other receivables (excluding
dividend receivable) 1.,979 4,298
Deposits and prepayments (4,376) 4,369
------------------ ------------------
9,608 (2,284)
(Decrease)/Increase in current liabilities:
Creditors, accrued and other liabilities
(excluding unclaimed dividend) 21,958 (10,277)
------------------ ------------------
31,566 (12,561)
========== ==========
32. REMUNERATION OF CHIEF EXECUTIVE AND EXECUTIVES
The aggregate amount charged in the accounts for remuneration, including all benefits to chief
executive and executives of the company is as follows:
2001 2000
Chief Chief
Executive Executives Total Executive Executives Total
(Rupees in thousands)
Managerial remuneration 1,111 17,832 18,943 881 14,608 15,489
House rent 351 8,206 8,557 280 5,327 5,607
Bonus 167 2,532 2,699 133 2,161 2,294
Provident fund 91 1,417 1,508 72 1,166 1,238
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Total 1,720 29,987 31,707 1,366 23,262 24,628
========== ========== ========== ========== ========== ==========
Number of persons 1 76 77 1 68 69
========== ========== ========== ========== ========== ==========
a) Aggregate amount charged in these accounts in respect of director's fee is Rs. 1,500 (2000: Rs. 500)
b) The chief executive and some executives are also provided with free use of company maintained cars.
2001 2000
(Rupees in thousands)
33. TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS
Sales of goods and services 169,562 119,800
Purchases of goods, fixed assets and services 254,684 222,327
Rent and other allied charges 2,989 2,235
Insurance agency commission 2,799 2,564
Dividend income -- 25,000
The transactions with the associated undertakings are in the normal course of business at contracted
rates and terms determined in accordance with market rates.
34. CAPACITY AND PRODUCTION -TONNES
2001 2000
Annual Capacity Annual Capacity
on three Actual on three Actual
shifts Production shifts Production
Paper and board 60,000 64,394 60,000 60,726
========== ========== ========== ==========
35. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
Concentration of credit risks
Credit risk represents the accounting loss that would be recognised at the reporting date if counterparts
failed completely to perform as contracted. The company does not have significant exposure to any
individual customer. To reduce exposure to credit risk the company applies credit limits to its
customers.
Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will affect the value of
financial instruments. The company is not materially exposed to interest rate risk except in respect
of redeemable capital and liabilities against assets subject to finance lease which are at fixed interest
rates. The interest rates and maturities of these items are disclosed in notes 16 and 17 respectively.
Foreign exchange risk management
Foreign currency risk arises mainly where receivables and payables exist due to transactions with
foreign undertakings. In appropriate cases, the management takes out forward contracts to mitigate
the risk.
Fair values of financial instruments
The carrying values of all the financial instruments reported in the financial statements approximate
their fair value.
36. NUMBER OF EMPLOYEES
The total number of permanent employees as at year end was 889 (2000: 874)
37. GENERAL
37.1 Corresponding figures have been rearranged, wherever necessary, for the purposes of
comparison.
37.2 Amounts have been rounded off to the nearest thousand of rupees.
IQBALALI LAKHANI M. RAFI CHAWLA
Chairman Chief Executive
Performance of last five years
(Rs. in million)
CAGR 2001 % 2000 % 1999 % 1998 % 1997
INCOME STATEMENT % * * * *
Sales volume- (M.Ton) 13 64,145 7 60,120 4 58,014 16 50,192 42 35,325
Sales value-Gross 16 2,466 23 2,006 8 1,858 16 1,599 35 1,182
Sales value- Net 16 2,143 23 1,743 7 1,629 15 1,422 40 1,015
Gross profit 20 350 55 226 27 178 13 157 13 139
Gross profit % -- 16% 13% 11% 11% 14%
Operating profit 22 295 63 181 29 140 15 126 14 120
Profit from operation 36 241 91 126 103 62 19 52 2 51
Dividend income from subsidiary -- -- -- 25 (44) 45 80 25 150 10
Profit before taxation 32 241 60 151 41 107 39 77 26 61
Profit before taxation % -- 11% 9% 7% 5% 6%
Profit after taxation 21 145 53 95 28 74 12 66 18 56
Profit after taxation % 7% 5% 5% 5% 5%
DIVIDEND
Cash dividend % 25 20 15 -- 10
Stock dividend % -- -- -- 10 --
Dividend payout ratio 54% 66% 64% -- 51%
BALANCE SHEET
Total assets employed 1,152 930 946 947 940
Paid-up capital 314 314 314 286 286
Shareholders' fund 781 715 683 656 590
Long-term loans 187 69 125 165 241
Finance lease 35 52 70 72 55
RATIO ANALYSIS
Earnings per share (Rs.) Note 4.60 3.04 2.35 2.10 1.77
Current ratio 1.44:1 1.08:1 1.04:1 1.02:1 0.92:1
Debt / Equity ratio 22:78 14:86 22:78 27:73 33:67
Assets coverage ratio 6.32 11.23 6.89 5.80 3.89
Total assets turnover 1.53:1 1.28:1 1.21:1 1.04:1 0.88:1
Net worth turnover 2.74:1 2.43:1 2.38:1 2.17:1 1.72:1
Return on assets 10% 7% 6% 5% 5%
Return on equity 18% 13% 11% 10% 9%
Break-up value per share (Rs.) Note 24.87 22.77 21.73 20.88 18.78
OTHERS
Employees (Nos.) 889 874 857 836 822
Contribution to exchequer 515 431 387 338 382
Capital expenditure 171 87 68 39 123
* Growth % over previous year
Note: Figures restated based on bonus issues
Statement Under Section 237(1) of the
Companies Ordinance, 1984
2001
a) Extent of the interest of Century Paper & Board Mills Limited (the holding
company) in the equity of Century Power Generation Limited (the subsidiary
company) at the end of the financial year of the subsidiary: 86.96%
(b) The net aggregate amount of profits after deducting losses if any, of the
subsidiary company so far as these concern members of the holding company
and have not been dealt with in the accounts of the holding company for the
year ended June 30, 2001.
i) for the financial year of the subsidiary; Rs. 13.91 million
ii) for the previous years of the subsidiary since it became the holding
company's subsidiary; Rs. 55.57 million
(c) The net aggregate amount of profits after deducting losses, if any, of the
subsidiary company so far as these have been dealt with or provision made
for losses in the accounts of the holding company for the year ended June
30, 2001.
i) for the financial year of the subsidiary;
ii) for the previous years of the subsidiary since it became the holding
company's subsidiary. Rs. 105.00 million
IQBALALI LAKHANI M. RAFI CHAWLA
Chairman Chief Executive
Pattern of Holding of Shares
held by the shareholders as at June 30, 2001
NO. OF SHAREHOLDING
SHARE FROM TO TOTAL
HOLDERS SHARES HELD
105 1 100 Shares 5,005
157 101 500 Shares 39,509
161 501 1,000 Shares 130,925
219 1,001 5,000 Shares 509,448
39 5,001 10,000 Shares 294,481
22 10,001 15,000 Shares 271,028
9 15,001 20,000 Shares 160,728
10 20,001 25,000 Shares 239,650
4 25,001 30,000 Shares 105,592
2 35,001 40,000 Shares 73,100
1 40,001 45,000 Shares 45,000
3 45,001 50,000 Shares 148,182
1 50,001 55,000 Shares 50,500
3 55,001 60,000 Shares 172,567
2 60,001 65,000 Shares 123,045
1 65,001 70,000 Shares 68,000
1 75,001 80,000 Shares 77,704
2 85,001 90,000 Shares 171,762
1 95,001 100,000 Shares 100,000
1 115,001 120,000 Shares 119,987
1 120,001 125,000 Shares 121,000
1 130,001 135,000 Shares 133,100
1 140,001 145,000 Shares 143,100
1 145,001 150,000 Shares 148,500
1 185,001 190,000 Shares 185,420
1 190,001 195,000 Shares 193,600
1 220,001 225,000 Shares 220,723
1 235,001 240,000 Shares 235,450
1 330,001 335,000 Shares 333,630
1 350,001 355,000 Shares 355,000
1 540,001 545,000 Shares 541,065
1 1,030,001 1,035,000 Shares 1,032,350
1 1,060,001 1,065,000 Shares 1,060,153
1 1,220,001 1,225,000 Shares 1,221,440
1 1,315,001 1,320,000 Shares 1,320,000
1 1,700,001 1,705,000 Shares 1,703,837
1 2,215,001 2,220,000 Shares 2,219,325
1 2,545,001 2,550,000 Shares 2,548,917
1 3,850,001 3,855,000 Shares 3,851,768
1 4,645,001 4,650,000 Shares 4,646,969
1 6,295,001 6,300,000 Shares 6,299,720
------------------ ------------------
765 TOTAL 31,421,280
========== ==========
CATEGORIES OF
SHAREHOLDERS NUMBER SHARES HELD PERCENTAGE
Individuals 714 3,227,488 10.27
Investment companies 9 3,911,602 12.45
insurance companies 2 1,108,335 3.53
Joint stock companies 26 15,557,340 49.51
Financial institutions 10 7,560,804 24.06
Modaraba companies 3 28,671 0.09
Leasing Company 1 27,040 0.09
------------------ ------------------ ------------------
765 31,421,280 100.00
========== ========== ==========
IQBALALI LAKHANI M. RAFI CHAWLA
Chairman Chief Executive
Century Paper & Board Mills Limited
and Century Power Generation Limited -
Subsidiary Company
Consolidated Financial Statements
For the year ended June 30, 2001
Auditors' Report to the Members
We have examined the annexed consolidated financial statements comprising the consolidated
balance sheet of Century Paper & Board Mills Limited and its subsidiary company as at June 30,
2001 and the related consolidated profit and loss account, consolidated cash flow statement and
consolidated statement of changes in equity together with the notes forming part thereof, for the
year ended June 30, 2001. We have also expressed a separate opinion on the financial statements
of Century Paper & Board Mills Limited. The financial statements of the subsidiary company were
audited by another firm of Chartered Accountants, whose report has been furnished to us and our
opinion in so far as it relates to the amounts included for the subsidiary company, is based solely on
the report of such other auditor. These financial statements are the responsibility of the holding
company's management. Our responsibility is to express an opinion on these financial statements
based on our examination.
Our examination was made in accordance with International Standards on Auditing and accordingly
included such tests of accounting records and such other auditing procedures as we considered
necessary in the circumstances.
In our opinion the consolidated financial statements examined by us present fairly the financial
position of Century Paper & Board Mills Limited and its subsidiary company as at June 30, 2001 and
the results of their operations for the year then ended.
FORD, RHODES, ROBSON, MORROW
Karachi:- July 31, 2001 Chartered Accountants
Consolidated. Balance Sheet
as at June 30, 2001
Note 2000 2001
ASSETS (Rupees in thousands)
NON-CURRENT ASSETS
Fixed assets - Tangible
Operating assets 3 957,738 895,944
Capital work-in-progress 4 39,730 25,526
------------------ ------------------
997,468 921,470
Long-term loans 5 495 424
Long-term deposits, prepayment and deferred costs 6 7,270 14,088
------------------ ------------------
1,005,233 935,982
CURRENT ASSETS
Stores and spares 7 123,844 120,250
Stock-in-trade 8 172,139 207,850
Trade debts 9 159,265 133,542
Loans, advances and other receivables 10 3,642 7,358
Deposits and prepayments 11 6,830 2,454
Taxation - net 12 20,216 39,567
Cash and bank balances 13 14,473 27,452
------------------ ------------------
500,409 538,473
------------------ ------------------
TOTAL ASSETS 1,505,642 1,474,455
========== ==========
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Authorized capital
35,000,000 ordinary shares of Rs.10 each 350,000 350,000
========== ==========
Issued, subscribed and paid-up capital 314,213 314,213
Reserves 535,744 455,830
Unappropriated profit 813 849
------------------ ------------------
850,770 770,892
25,416 24,830
NON-CURRENT LIABILITIES
Redeemable capital 15 140,000 46,667
Liabilities against assets subject to finance lease 16 16,551 35,958
Deferred liabilities 17 148,167 94,004
------------------ ------------------
304,718 176,629
CURRENT LIABILITIES
Current portion of - redeemable capital 15 46,667 47,222
- liabilities against assets
subject to finance lease 16 19,406 24,026
Short-term finances 18 89,499 256,941
Creditors, accrued and other liabilities 19 122,034 111,073
Proposed final dividend 47,132 62,842
------------------ ------------------
324,738 502,104
CONTINGENCIES AND COMMITMENTS 20
------------------ ------------------
TOTAL EQUITY AND LIABILITIES 1,505,642 1,474,455
========== ==========
The annexed notes form an integral part of these accounts.
IQBALALI LAKHANI M. RAFI CHAWLA
Chairman Chief Executive
Consolidated Profit and Loss Account
for the year ended June 30, 2001
Note 2001 2000
(Rupees in thousands)
Sales 21 2,210,872 1,788,697
Cost of goods sold 22 1,837,945 1,501,498
------------------ ------------------
Gross profit 372,927 287,199
Other income 23 13,454 14,621
Administrative and selling expenses 24 50,616 49,278
Other charges 25 20,008 14,220
------------------ ------------------
Operating profit 315,757 238,322
Financial charges 26 58,812 63,614
------------------ ------------------
Profit before taxation 256,945 174,708
Taxation 28 96,428 57,026
------------------ ------------------
Profit after taxation 160,517 117,682
Minority interest 2,086 6,158
------------------ ------------------
Net profit for the year 158,431 111,524
Unappropriated profit brought forward 849 820
------------------ ------------------
Profit available for appropriation 159,280 112,344
Appropriations:
interim dividend Re. 1.00 (10%) per share
(2000: Rs. Nil) 31,421 --
Proposed dividend Rs. 1.50 (15%) per share
[2000: Rs. 2.00 (20%) per share] 47,132 62,842
Transfer to general reserve 79,914 48,653
------------------ ------------------
158,467 111,495
------------------ ------------------
Unappropriated profit carried forward 813 849
========== ==========
Basic earnings per share 29 5.04 3.55
========== ==========
The annexed notes form an integral part of these accounts.
IQBALALI LAKHANI M. RAFI CHAWLA
Chairman Chief Executive
Consolidated Cash Flow Statement
for the year ended June 30, 2001
Note 2001 2000
(Rupees in thousands)
CASH FLOW FROM OPERATING ACTIVITIES
Cash generated from operations 30 432,443 311,781
Financial charges paid (63,596) (77,171)
Tax paid (22,914) (30,277)
Long-term loans (71) 179
Long-term deposits, prepayment and deferred costs 6,746 (745)
------------------ ------------------
Net cash inflow from operating activities 352,608 203,767
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure (172,628) (91,293)
Proceeds from sale of fixed assets 1,008 2,760
Return on short-term investment and deposits received 13 482
------------------ ------------------
Net cash (outflow)from investing activities (171,607) (88,051)
CASH FLOW FROM FINANCING ACTIVITIES
Redeemable capital 140,000 20,000
Redemption of redeemable capital (47,222) (101,042)
Repayment of leasing finance (24,027) (30,632)
Dividend paid (95,289) (50,759)
------------------ ------------------
Net cash (outflow)from financing activities (26,538) (162,433)
------------------ ------------------
Net increase/(decrease) in cash equivalents 154,463 (46,717)
Cash and cash equivalents at the beginning of the year (229,489) (182,772)
------------------ ------------------
Cash and cash equivalents at the end of the year (75,026) (229,489
========== ==========
CASH AND CASH EQUIVALENTS COMPRISE:
Cash and bank balances 14,473 27,452
Short-term finances (89,499) (256,941)
------------------ ------------------
(75,026) (229,489)
========== ==========
The annexed notes form an integral part of these accounts.
IQBALALI LAKHANI M. RAFI CHAWLA
Chairman Chief Executive
Consolidated Statement of Changes in Equity
for the year ended June 30, 2001
Issued, subscribed
and paid-up Reserves Unappropriated
capital Capital Revenue Profit Total
(Rupees in thousands)
Balance as at July 1, 1999 314,213 85,045 322,132 820 722,210
Net profit for the year -- -- -- 111,524 111,524