| Pakistan Gum & Chemicals Limited |
|
|
|
|
|
|
|
|
|
|
|
|
| Annual
Report 2001 |
|
|
|
| CORPORATE |
|
| OBJECTIVES |
|
|
| Develop
a strong organisation centered at Karachi, to run the |
|
| existing
business and exploit new opportunities. |
|
|
| Develop
relationships with agents and end-users for a |
|
| world-wide
reach for our products and thus improve |
|
| profitability. |
|
|
| Develop
a strategy on procurement of raw material to secure |
|
| long-term
business and development opportunities. |
|
|
| Identify,
establish and exploit new markets and technologies |
|
| through
Research and Development and marketing skills. |
|
|
| Identify
suitable acquisitions for real synergies to improve |
|
| our
corporate position and profit potential. |
|
|
| In
recognition of its responsibilities as a Corporate Body |
|
| the
Company aims to: |
|
|
| Pursue
personnel policies which recognise the aspirations |
|
| and
performance of individuals and which are suited to the |
|
| diverse
levels of skills required and the many career paths |
|
| available
in the company. |
|
|
| Have
full regard to the attitudes and expectations of its client |
|
| base
at large and contribute as appropriate, to the formulation |
|
| of
positive attitudes and opinions. |
|
|
| Act
as a reputable, efficient and responsible organisation. |
|
|
|
| CONTENTS |
|
|
|
| Ten
Year Summary of Statistics |
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Chairman's
Review |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Changes in Equity |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of Share Holdings |
|
|
|
| TEN
YEAR SUMMARY OF STATISTICS |
|
|
|
|
(Rupees in Thousands) |
|
|
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
2001 |
|
|
|
| Operating
assets |
|
24,907 |
23,676 |
21,688 |
36,133 |
32,206 |
28,663 |
24,410 |
20,862 |
20,151 |
19,679 |
|
|
| Capital
work-in-progress |
|
337 |
2,337 |
9,695 |
49 |
263 |
2,102 |
6,719 |
6,719 |
698 |
698 |
|
| Long-term
Loans, Deposits |
|
|
|
|
| &
Retirement Benefits |
|
1,418 |
1,370 |
1,418 |
959 |
957 |
772 |
725 |
4,091 |
7,869 |
8,263 |
|
| Net
current and other assets |
|
58,224 |
62,327 |
62,636 |
70,686 |
74,137 |
28,818 |
(3,512) |
21,130 |
38,831 |
49,403 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| Total
assets employed |
|
84,886 |
89,710 |
95,437 |
107,827 |
107,563 |
60,355 |
28,342 |
52,802 |
67,549 |
78,043 |
|
| Ordinary
capital |
|
29,260 |
29,260 |
29,260 |
29,260 |
29,260 |
29,260 |
29,260 |
29,260 |
|
| Reserves |
|
53,208 |
58,301 |
65,357 |
78,567 |
78,303 |
31,095 |
(918) |
23,542 |
37,707 |
48,090 |
|
| Long
term and deferred liabilities |
|
2,418 |
2,149 |
820 |
-- |
-- |
-- |
-- |
-- |
582 |
693 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| Total
funds employed |
|
84,886 |
89,710 |
95,437 |
107,827 |
107,563 |
60,355 |
28,342 |
52,802 |
67,549 |
78,043 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
| Net turnover |
|
239,761 |
279,178 |
275,453 |
317,114 |
387,703 |
169,967 |
174,474 |
242,705 |
302,651 |
351,558 |
|
| Profit
before taxation |
|
(4,603) |
15,528 |
10,229 |
23,343 |
2,553 |
(46,090) |
(30,401) |
31,620 |
27,556 |
23,936 |
|
| %
of net sales |
|
(1.92) |
5.56 |
3.71 |
7.36 |
0.66 |
(27.12) |
(17.42) |
13.03 |
9.10 |
6.81 |
|
| %
of average assets employed |
|
(5.18) |
17.79 |
1 ! .05 |
22.97 |
2.37 |
(54.90) |
(68.55) |
77.94 |
45.79 |
32.88 |
|
| Profit
/ (loss) after taxation |
|
(2,284) |
8,457 |
11,444 |
20,525 |
(264) |
(47,208) |
(32,014) |
28,119 |
23,820 |
19,162 |
|
| Cash
dividend - amount |
|
2,195 |
3,365 |
4,389 |
7,315 |
-- |
-- |
-- |
3,658 |
9,656 |
8,778 |
|
| Cash
dividend - % |
|
7.5 |
11.50 |
15.00 |
25.00 |
-- |
-- |
-- |
12.50 |
33.00 |
30.00 |
|
|
|
|
|
|
|
|
|
| Earnings
per share Rs. (based on |
|
|
| profit
before tax) |
|
(1.57) |
5.31 |
3.50 |
7.98 |
0.87 |
(15.75) |
(10.39) |
10.81 |
9.42 |
8.18 |
|
| Number
of permanent employees at |
|
|
|
| year end |
|
135 |
127 |
125 |
122 |
121 |
129 |
92 |
85 |
78 |
81 |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| Mohammad
Moonis |
|
Chairman |
|
| Faiz
N. Abdulali |
|
Vice-Chairman |
|
| Tariq
Mohamed Amin |
|
Director |
|
| Anis
A. Hussain |
|
Director |
|
| Zahid Zaheer |
|
Director |
|
| Shuaib
Ahmad |
|
Director |
|
| Munawar
F. Abdulali |
|
Director |
|
| Zaeem
Ahmad Hanafi |
|
Director |
|
| Mohammad
Hassan Hanafi |
|
Managing Director |
|
|
|
| COMPANY
SECRETARY |
|
| Zaeem
Ahmad Hanafi |
|
|
| AUDITORS |
|
| Sidat
Hyder Qamar & Co. |
|
| Chartered
Accountants |
|
|
| BANKERS |
|
| Askari
Commercial Bank Limited |
|
| Habib
Bank Limited |
|
| Muslim
Commercial Bank Limited |
|
| CITIBANK
N.A. |
|
| ABN Amro |
|
| Bank Alfalah |
|
|
| REGISTERED
OFFICE |
|
| B-19/A,
Irshad Qadri Road |
|
| S.
I. T. E., Karachi-75700 |
|
|
|
| NOTICE
OF MEETING |
|
|
| NOTICE
IS HEREBY given that the 39th Annual General Meeting of Pakistan Gum &
Chemicals Limited, |
|
| will
be held on Friday May 31, 2002, at the premises of The Overseas Investors
Chamber of Commerce & |
|
| Industry
at 3:30 p.m. to transact the following:- |
|
|
| Ordinary
Business |
|
| 1.
To consider and adopt the Company's Accounts and Reports of the Directors and
Auditors for the |
|
| year
ended 31st December 2001. |
|
|
| 2.
To consider and, if thought fit, to approve payment of dividend at Rs..3.00
per share (30%) for the |
|
| year
ended 31st December 2001, as recommended by the Board of Directors. |
|
|
| 3.
To appoint auditors for the year ending 31st December 2002 and to fix their
remuneration. |
|
|
| 4.
To elect eight (8) Directors in accordance with the provisions of the
Companies' Ordinance, 1984 for |
|
| a
period of three years to commence from 1st July 2002. |
|
|
| The
retiring Directors, namely, Messrs. Mohammad Moonis, Faiz N. Abdulali, Tariq
Mohamed Amin, |
|
| Anis
A. Hussain, Zahid Zaheer, Shuaib Ahmed, Munawar F. Abdulali and Zaeem A.
Hanafi, being |
|
| eligible,
have notified their intention to offer themselves for re-election as
Directors. |
|
|
| Special
Business |
|
|
| 5.
To approve remuneration payable to the Chairman, Vice-Chairman, Chief
Executive and an |
|
| Executive
Director. |
|
|
| 6. To consider and approve the amendment in
clause 51 of the Article of Association of the Company. |
|
| 7.
To transact any other business with the permission of the Chair. |
|
|
| By
Order of the Board |
|
| Zaeem
A. Hanafi |
|
| Company
Secretary |
|
|
| Karachi,
March 21, 2002 |
|
|
| Notes:- |
|
|
| 1.
The Share Transfer Books of the Company will remain closed from May 24, 2002
to May 31, 2002 |
|
| (both
days inclusive) |
|
|
| 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, speak and vote instead of him/her, and a proxy so
appointed shall have such |
|
| right
with respect to attending, speaking and voting at the Meeting as are
available to a Member. |
|
| Proxy
forms must be deposited at the Company's Registered Office not less that 48
hours before the |
|
| time
for holding the Meeting. |
|
|
| 3.
Any member who seeks to contest in election of directors, shall file his
Nomination/Notice of |
|
| intention
to offer himself as a director Under Section 178(3) of the Companies
Ordinance, 1984, with |
|
| the
Company not later than fourteen (14) days before the date of the meeting on
which elections are to |
|
| be held. |
|
|
| 4.
Shareholders are requested to intimate any change in address immediately. |
|
|
| 5.
Statements Under Section 160(1)(b) of the Companies Ordinance 1984 and draft
Resolution |
|
| pertaining
to the Special Business referred above are annexed. |
|
|
| STATEMENT
UNDER SECTION 160(1)(b) OF THE COMPANIES ORDINANCE, |
|
| 1984
AND DRAFT RESOLUTION PERTAINING TO THE SPECIAL BUSINESS |
|
| REFERRED
ABOVE, IS AS UNDER: |
|
|
| Item
No.5 of the Special Business of the Notice: |
|
| An
amount of Rs.3,330,000.00 (Rupees three million three hundred thirty thousand
only) will be |
|
| proposed
as the aggregate remuneration of the Chairman, Vice' Chairman, Chief
Executive and an |
|
| Executive
Director for the period October 1, 2001 to September 30, 2002, which remains |
|
| unchanged
from last year, in the form of the following Resolution: |
|
|
| "Resolved
that the consent of the Company be and is hereby accorded to the aggregate |
|
| remuneration
of Rs.3,330,000.00 (Rupees three million three hundred thirty thousand only)
of |
|
| the
persons acting as Chief Executive and Directors of the Company, for the
period October 1, |
|
| 2001
to September 30, 2002, in addition to their entitlement in respect of
housing, transport, |
|
| medical,
leave facilities, retirement and other benefits, incidental to or relating to
their office |
|
| in
accordance with the rules and policy of the Company". |
|
|
| Mr.
Mohammad Hassan Hanafi, Chief Executive and Mr. Zaeem Ahmad Hanafi, Director |
|
| Finance/Company
Secretary of the Company are brothers of the Chairman and to that extent are |
|
| directly
interested in the same. |
|
|
| 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 interested in the same. |
|
|
| Mr.
Mohammad Moonis, Chairman and Mr. Zaeem Ahmad Hanafi, Director
Finance/Company |
|
| Secretary
of the company are brothers of the Chief Executive and to that extent are
interested in |
|
| the same. |
|
|
| Mr.
Mohammad Moonis, Chairman and Mr. Mohammad Hassan Hanafi, Chief Executive of
the |
|
| company
are brothers of the Director Finance/Company Secretary and to that extent are
interested |
|
| in the same. |
|
|
| Item
No.6 of the Special Business of the Notice: |
|
| The
Article of Association of the company had fixed maximum amount of Rs.500.00
(Rupees five |
|
| hundred
only) for Director attending each meeting of the Board or a Committee
appointed by the |
|
| Directors.
Now Board of Directors has proposed to change the relevant clause of the
Article. So it |
|
| will
be considered and if thought fit, will be passed with or without
modification, the following |
|
| Resolution
as Special Resolution approving the amendment in clause 51 of the Article of
the |
|
| company" |
|
|
| "Resolved
that the clause 51 of the Article of Association be amended as follows: |
|
|
| The
Remuneration of a Director shall not exceed the sum of Rs.5,000.00 (Rupees
five |
|
| thousand
only) for each meeting of the Board or a Committee appointed by the
Directors, |
|
| attended
by him, plus such travelling and other allowances for a Director coming to
attend the |
|
| meeting
from outside Karachi, as the Directors may deem proper. Provided that no |
|
| remuneration
for attending such meeting shall be payable to the regularly paid Chief |
|
| Executive
and full time working Directors". |
|
|
|
| DIRECTORS'
REPORT |
|
|
| For
presentation at the 39th Annual General Meeting of the Company to be held on
Friday the 31st of May |
|
| 2002. |
|
|
| 1.
Your Directors hereby submit their Report and Audited Accounts of the Company
together with the |
|
| Auditors'
Report thereon for the year ended December 31, 2001. The Company's financial
results are |
|
| as follows: |
|
|
|
Rupees |
|
| Net
profit for the year before taxation |
|
23,936,589 |
|
| Provision
for taxation: |
|
|
|
| Current year |
|
4,800,000 |
|
| Prior years |
|
(25,112) |
|
|
---------- |
|
|
4,774,888 |
|
|
---------- |
|
| Net
profit for the year after taxation |
|
19,161,701 |
|
| Unappropriated
profit brought forward |
|
14,173,982 |
|
|
---------- |
|
|
33,335,683 |
|
| Appropriations |
|
|
|
| Transfer
to General Reserve |
|
14,173,982 |
|
| Proposed
Dividend @ 30% (2000: 33%) |
|
8,778,000 |
|
|
---------- |
|
|
22,951,982 |
|
|
---------- |
|
| Accumulated
profit carried forward to Balance Sheet |
|
10,383,701 |
|
|
========== |
|
| Earning
per share |
|
6.55 |
|
|
========== |
|
|
|
|
| 2.
There have been no material changes or commitments affecting the financial
position of the Company |
|
| between
end of the financial year December 31,2001 and the date of this Report. |
|
|
| 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 in which the Company is interested. |
|
|
| 4.
There are no reservations, observations or adverse remarks contained in the
Auditor's Report. |
|
|
| 5.
The pattern of shareholding is provided on page 30 of this Annual Report. |
|
|
| 6.
East West Group Holdings Inc., a company incorporated in British Virgin
Islands, is the holding |
|
| company
by virtue of its 60% shareholding in the company. |
|
|
| 7.
The present auditors Messrs. Sidat Hyder Qamar & Co., Chartered
Accountants, Karachi, retire and |
|
| being
eligible, offer themselves for re-appointment. |
|
|
|
By order of the Board |
|
|
|
Mohammad Hassan Hanafi |
|
Faiz N. Abdulali- |
|
| Karachi:
March 21, 2002 |
|
Managing Director |
|
Director |
|
|
|
| CHAIRMAN'S
REVIEW |
|
|
| It
is my privilege to present the result of your company for the year ended 31st
December |
|
| 2001. |
|
|
| This
is the 39th Annual General Meeting and, I am happy to report that the turn
around made |
|
| two
years ago, in spite of fierce competition from across the border remains on
track. |
|
|
| The
International crisis following the events of September 11, 2001 and the
ensuing U.S. |
|
| action
in Afghanistan caught Pakistan in the crossfire, with serious economic fall
out which |
|
| also
impacted our business. The stand off with India further aggravated the
problem and |
|
| seriously
affected our 4th quarter sales. |
|
|
| However,
for the first time in several years, the Guar crop in the year under review
was |
|
| sufficient
to meet the needs of all the Pakistani manufacturers, and, it indeed, helped
us |
|
| improve
our market share. |
|
|
| Intensified
efforts were made by us to push export sales which grew by 57%, but the price
of |
|
| Guar
Gum and Splits in the International markets, because of the global economic
slow down |
|
| and
plentiful supply of finished products, dropped by 42%. Against this
background it gives |
|
| me
much satisfaction to report that we have been able to achieve a post-tax
profit of |
|
| Rs.19,161,701
for the year 2001. |
|
|
| The
Board is happy to recommend a dividend of Rs.3.00 @ 30% per ordinary share of
Rs. 10 |
|
| each. |
|
|
| According
to the surveys made by our teams, it appears that we will have a normal crop
of |
|
| guar
seed during the year 2002. This should enable us to meet our normal raw
material |
|
| requirements.
However, due to a good crop in India too, world wide prices are under
pressure |
|
| and
we are facing strong competition. |
|
|
| Our
near term objective is to increase our export sales and enhance the
efficiency of the plant. |
|
| Concurrently
with this the company will continue to explore other profitable opportunities
in |
|
| areas
of its interest |
|
|
| I
take this opportunity to thank my colleagues on the Board without whose wise
counsel and |
|
| support
the discharge of my responsibilities would have been rather hard. |
|
|
| I
also wish to commend the management and all the Employees of the company for
a good |
|
| performance
in the year 2001. |
|
|
| M. MOONIS |
|
| Chairman |
|
|
| Karachi:
March 21, 2002 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of PAKISTAN GUM AND CHEMICALS LIMITED
as at 31 |
|
| December
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 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; |
|
|
| 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 31 December 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. |
|
|
| Karachi:
March 21, 2002 |
|
Sidat Hyder Qamar & Co. |
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 31 DECEMBER 2001 |
|
|
|
NOTE |
2001 |
2000 |
|
| Share
Capital and Reserves |
|
|
Rupees |
Rupees |
|
| Authorised
capital |
|
| 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
reserve |
|
37,706,334 |
23,532,352 |
|
| Accumulated
profit |
|
10,383,701 |
14,173,982 |
|
|
---------- |
---------- |
|
|
77,350,035 |
66,966,334 |
|
|
| Deferred
liability - compensated absences |
|
2.3.4 |
693,394 |
582,322 |
|
| Current
Liabilities |
|
| Short-term
finance under mark-up arrangement |
|
4 |
25,000,000 |
80,000,000 |
|
| Creditors,
accrued and other liabilities |
|
5 |
133,845,151 |
16,820,882 |
|
| Taxation-net |
|
6 |
1,994,021 |
1,179,379 |
|
| Proposed
dividend |
|
|
8,778,000 |
9,655,800 |
|
|
|
---------- |
---------- |
|
|
|
49,156,536 |
107,656,061 |
|
| Contingencies
and commitments |
|
7 |
-- |
-- |
|
|
---------- |
---------- |
|
|
127,199,965 |
175,204,717 |
|
|
========== |
========== |
|
| Fixed
Assets - tangible |
|
| Operating
assets |
|
8 |
19,679,386 |
20,150,630 |
|
|
|
|
| Long-term
loan |
|
9 |
37,040 |
41,626 |
|
| Long-term
deposits |
|
10 |
780,005 |
780,005 |
|
| Retirement
and other benefits |
|
11 |
7,446,000 |
7,047,000 |
|
| Current
Assets |
|
|
|
| Stores
and spares |
|
12 |
4,309,657 |
2,607,215 |
|
| Stock-in-trade |
|
13 |
56,827,321 |
74,076,967 |
|
| Assets
held for disposal- capital work-in-progress |
14 |
698,355 |
698,355 |
|
| Trade debts |
|
15 |
10,386,567 |
32,041,874 |
|
| Loans
and advances |
|
16 |
447,886 |
1,609,247 |
|
| Shod-term
deposit and prepayments |
|
17 |
165,414 |
867,655 |
|
| Other
receivables |
|
18 |
8,119,409 |
4,491,174 |
|
| Cash
and bank balances |
|
19 |
18,302,925 |
30,792,969 |
|
|
|
---------- |
---------- |
|
|
99,257,534 |
147,185,456 |
|
|
---------- |
---------- |
|
|
127,199,965 |
175,204,717 |
|
|
========== |
========== |
|
| Auditors'
Report Annexed |
|
| These
financial statements should be read with the annexed notes. |
|
|
|
Mohammad Hassan Hanafi |
|
Faiz N. Abdulali |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2001 |
|
|
|
NOTE |
2001 |
2000 |
|
|
|
Rupees |
Rupees |
|
| Sales - net |
|
20 |
351,557,771 |
302,651,301 |
|
| Cost
of goods sold |
|
21 |
284,775,245 |
254,764,758 |
|
|
|
---------- |
---------- |
|
| Gross profit |
|
66,782,526 |
47,886,543 |
|
|
| Operating
expenses |
|
| Administration
and selling expenses |
|
22 |
14,897,974 |
14,423,738 |
|
| Shipping
expenses |
|
23 |
22,338,668 |
4,586,299 |
|
|
|
---------- |
---------- |
|
|
37,236,642 |
19,010,037 |
|
|
---------- |
---------- |
|
| Operating
profit |
|
29,545,884 |
28,876,506 |
|
|
| Other income |
|
24 |
2,686,599 |
