| Habib Arkady Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 2001 |
|
|
|
|
| BOARD
OF DIRECTORS |
|
|
| Gaffar
A. Habib |
|
| John
R. Mahlich |
|
| Owais
G. Habib |
|
| Habibullah
A. Habib |
|
| Bashir
A. Habib |
|
| Tufail
Y. Habib |
|
| Miqdad
B. Habib |
|
|
|
| DIRECTORS
REPORT TO THE SHAREHOLDERS |
|
|
| Dear
Shareholders, |
|
| By
the Grace of Allah, rains in July 2001 finally ended the long drought.
However throughout the |
|
| period
under report, we had to operate the plant with water brought in by tankers.
Also during |
|
| the
second half of this period slow down in the USA resulted in a reduced demand
for our products. |
|
|
| We
bow our heads in gratitude to Allah the Beneficent the Merciful the Provider
for His Blessings |
|
| which
notwithstanding the adverse conditions are partly reflected in the profit for
the year; which |
|
| the
directors propose to appropriate as follows: |
|
|
| Profit
Before Taxation |
|
Rs. |
97,781,701 |
|
| Provision
for Taxation |
|
Rs. |
13,963,024 |
|
|
|
---------- |
|
| Profit
After Taxation |
|
Rs. |
83,818,677 |
|
| Unappropriated
Profit brought forward |
|
Rs. |
32,596,307 |
|
|
|
---------- |
|
| Profit
available for appropriation |
|
Rs. |
116,414,984 |
|
|
|
========== |
|
| Appropriations: |
|
|
|
| Interim
Dividend @ Rs. 0.75 per share (i.e. 15%) |
Rs. |
27,000,000 |
|
| Issued
Bonus Shares @ one share for every |
|
|
| nine
shares held (i.e. 11.11%) (2000 @ 20%) |
Rs. |
20,000,000 |
|
| Proposed
Final Dividend @ 15% i.e. Rs. 0.75 |
Rs. |
30,000,000 |
|
| per
share (2000 @ 40% i.e. Rs. 2 per share) |
|
|
| Transfer
to General Reserve |
|
Rs. |
5,000,000 |
|
| Unappropriated
Profit Carried Forward |
|
Rs. |
34,414,984 |
|
|
|
---------- |
|
|
Rs. |
116,414,984 |
|
|
========== |
|
| Other
points of interest: |
|
|
| Effect
of the slow down in the exports were partly off set by the eroding rupee
verses |
|
| the
dollar and partly by improved demand (v/s last year) in the domestic market. |
|
|
| The
Agglomeration plant has been successfully commissioned in Quetta -- we now
need |
|
| to
develop the market for our products. |
|
|
| Spray
dryer is now in the testing stages -- Inshallah hope to see trial production
some |
|
| time
in late October 2001. |
|
|
| Habib
Power -- in light of the reduced operations during the drought -- this
project has |
|
| been
put on hold. Our overall energy consumption would have to increase
substantially |
|
| to
justify this investment. |
|
|
| Sui
Gas -- while we have finally been connected with Sui Gas -- the billing is
grossly |
|
| excessive.
All our complaints to date have not resulted in positive corrective action. |
|
|
| Future: |
|
| In
our continuing quest for value added products -- we have undertaken trials on
shrimp farming |
|
| with
a view to raise these on our rice protein based feed. |
|
|
| I
pray to Allah the Beneficent the Merciful the Provider to Bless our efforts
and our operations |
|
| with
ever increasing Bounties as Befits His Glory -- Aameen. |
|
|
|
GAFFAR A. HABIB |
|
| KARACHI
DATED: 12th September, 2001 |
|
Chairman |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have examined the annexed consolidated financial statements comprising
consolidated balance |
|
| sheet
of HABIB ARKADY LIMITED (the holding company) and its subsidiary companies
HABIB |
|
| SORBITOL
(PRIVATE) LIMITED, HABIB AGGLOMERATION (PRIVATE) LIMITED, HABIB POWER |
|
| (PRIVATE)
LIMITED AND HABIB MICROFINE (PRIVATE) LIMITED as at June 30,2001 and the |
|
| related
consolidated profit and loss account, statement of changes in equity and the
consolidated |
|
| cash
flow statement together with the notes forming part thereof for the year then
ended. We have |
|
| also
expressed separate opinions on the financial statement of HABIB ARKADY
LIMITED, HABIB |
|
| SORBITOL
(PRIVATE) LIMITED, HABIB AGGLOMERATION (PRIVATE) LIMITED, HABIB POWER |
|
| (PRIVATE)
LIMITED AND HABIB MICROFINE (PRIVATE) LIMITED. The 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 the international standards on
auditing and accordingly |
|
| included
such tests of accounting records and such other auditing procedure as we
considered |
|
| necessary
in the circumstances. |
|
|
| In
our opinion the consolidated financial statements examined by us present
fairly the financial |
|
| position
of HABIB ARKADY LIMITED and its subsidiary companies HABIB SORBITOL (PRIVATE) |
|
| LIMITED,
HABIB AGGLOMERATION (PRIVATE) LIMITED, HABIB POWER (PRIVATE) LIMITED |
|
| AND
HABIB MICROFINE (PRIVATE) LIMITED as at June 30, 2001 and the results of
their |
|
| operations,
changes in equity and cash flows for the year then ended. |
|
|
|
HYDER BHIMJI & CO. |
|
| KARACHI
DATED: 12th September, 2001 |
|
Chartered Accountants |
|
|
|
| CONSOLIDATED
BALANCE SHEET AS AT JUNE 30, 2001 |
|
|
|
|
|
2001 |
2000 |
|
|
NOTE |
RUPEES |
RUPEES |
|
| AUTHORISED
CAPITAL |
|
| 40,000,000
Ordinary Shares of Rs. 5/= each |
|
200,000,000 |
200,000,000 |
|
|
| ISSUED
SUBSCRIBED AND PAID UP CAPITAL |
4 |
200,000,000 |
150,000,000 |
|
| RESERVE
AND SURPLUS: |
|
| CAPITAL
RESERVE |
|
5 |
10,000,000 |
10,000,000 |
|
| REVENUE
RESERVE |
|
6 |
50,000,000 |
750,000,000 |
|
| UNAPPROPRIATED
PROFIT |
|
34,414,984 |
32,596,307 |
|
|
---------- |
---------- |
|
|
94,414,984 |
117,596,307 |
|
|
---------- |
---------- |
|
|
294,414,984 |
267,596,307 |
|
|
|
|
| CURRENT
LIABILITIES: |
|
| Current
Maturity of Long Term Loans |
|
-- |
5,412,000 |
|
| Short
Term Running Financing (Secured) |
|
7 |
88,000,000 |
60,000,000 |
|
| Creditors
and Accrued Liabilities |
|
8 |
26,809,381 |
19,524,083 |
|
| Advances
and Deposits |
|
9 |
1,115,065 |
3,411,975 |
|
| Dividend
Payable |
|
|
26,600,000 |
-- |
|
| Proposed
Dividend |
|
|
30,000,000 |
60,000,000 |
|
|
|
---------- |
---------- |
|
|
|
172,524,446 |
148,348,058 |
|
| CONTINGENCIES
& COMMITMENTS |
|
10 |
|
|
---------- |
---------- |
|
|
466,939,430 |
415,348,058 |
|
|
========== |
========== |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
11 |
176,710,394 |
174,630,044 |
|
| CAPITAL
WORK IN PROGRESS |
|
4,950,352 |
-- |
|
|
| LONG
TERM: |
|
| Deposits
and Advances |
|
12 |
6,735,730 |
1,079,835 |
|
| Deferred
Cost |
|
|
98,100 |
|
|
| Investment
in Securities |
|
13 |
-- |
10,000,000 |
|
|
|
---------- |
---------- |
|
|
6,833,830 |
11,079.84 |
|
|
| CURRENT
ASSETS: |
|
| Stores,
Spares and Loose Tools |
|
14 |
24,606,461 |
26,061,921 |
|
| Stock
in Trade |
|
15 |
102,755,407 |
114616825 |
|
| Trade Debts |
|
16 |
113,817,706 |
58,805,125 |
|
| Advances,
Deposits, Pre-Payments and |
|
|
|
| Other
Receivables |
|
17 |
21,165,773 |
19,762,062 |
|
|
|
|
| Cash
and Bank Balances |
|
18 |
16,099,507 |
10,988.55 |
|
|
|
---------- |
---------- |
|
|
278,444,854 |
230,234,486 |
|
|
---------- |
---------- |
|
|
466,939,430 |
415,944,365 |
|
|
========== |
========== |
|
| Note: The annexed notes form an integral part of
these accounts. |
|
|
|
|
|
|
OWAIS G, HABIB |
|
GAFFAR A. HABIB |
|
| KARACHI
DATED: 12th September, 2001 |
Chief Executive |
|
Chairman |
|
|
|
| CONSOLIDATED
PROFIT & LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
NOTE |
RUPEES |
RUPEES |
|
| SALES: |
|
| Local |
|
347,192,791 |
220,475,323 |
|
| Export |
|
253,805,223 |
318,306,869 |
|
|
----------- |
----------- |
|
|
20 |
600,998,014 |
538,782,192 |
|
| Cost
of Goods Sold |
|
21 |
377,749,981 |
327,296,150 |
|
|
|
----------- |
----------- |
|
| Gross Profit |
|
|
223,248,033 |
211,486,042 |
|
| Less: |
|
|
|
| Administrative
Expenses |
|
22 |
35,201,820 |
31,020,527 |
|
| Selling
Expenses |
|
23 |
78,910,496 |
69,616,403 |
|
| Financial
Expenses |
|
24 |
9,526,463 |
6,583,175 |
|
|
----------- |
----------- |
|
|
123,638,779 |
107,220,105 |
|
|
----------- |
----------- |
|
| Operating
Profit |
|
19 |
99,609,254 |
104,265,937 |
|
| Add:
Other Income |
|
25 |
4,881,516 |
5,018,935 |
|
|
----------- |
----------- |
|
|
104,490,770 |
109,284,872 |
|
| Less:
Other Charges |
|
26 |
5,668,048 |
6,327,268 |
|
|
----------- |
----------- |
|
| Profit
before Taxation |
|
98,822,722 |
102,957,604 |
|
| Provision
for Taxation |
|
27 |
15,004,045 |
12,674.26 |
|
|
----------- |
----------- |
|
| Profit
after Taxation |
|
83,818,677 |
90,283.35 |
|
| Unappropriated
Profit Brought Forward |
|
32,596,307 |
39,812,960 |
|
|
----------- |
----------- |
|
| Available
for Appropriations |
|
116,414,984 |
130,096,307 |
|
| APPROPRIATIONS: |
|
| Interim
Dividend @ 15% i.e Rs. 0.75 per share |
|
27,000,000 |
-- |
|
| Issued
Bonus Shares @ one share for every |
|
|
|
| nine
shares held (i.e 11.11%) (2000 @ 20%) |
|
20,000,000 |
30,000,300 |
|
| Proposed
Final Dividend @ 15% i.e. Rs.0.75 |
|
|
|
| per
share (2000 @ 40% i.e. Rs. 2 per share) |
|
30,000,000 |
60,000,000 |
|
| Transfer
to General Reserve |
|
5,000,000 |
7,500,000 |
|
|
----------- |
----------- |
|
|
82,000,000 |
97,500,000 |
|
|
----------- |
----------- |
|
| Unappropriated
Profit Carried Forward |
|
34,414,984 |
32,596,307 |
|
|
========== |
========== |
|
| Note
· The annexed notes form an integral part of these accounts. |
|
|
|
OWAIS G, HABIB |
|
GAFFAR A. HABIB |
|
| KARACHI
DATED: 12th September, 2001 |
Chief Executive |
|
Chairman |
|
|
|
| CONSOLIDATED
STATEMENT OF CHANGES IN FINANCIAL POSITION (CASH FLOW STATEMENT) |
|
| AS
AT JUNE 30, 2001 |
|
|
|
2001 |
2000 |
|
|
RUPEES |
RUPEES |
|
| NET
CASH (OUTFLOW)/INFLOW FROM |
|
| OPERATING
ACTIVITIES |
|
| Cash
Generated From Operations |
|
| Profit
before Taxation |
|
98,822,722 |
102,957,604 |
|
| Adjustments
for non cash charges and other items: |
|
| Depreciation |
|
18,133,782 |
17,892,812 |
|
| (Gain)
/ Loss on Disposal of Fixed Assets |
|
(2,242,383) |
(3,017,462) |
|
| Financial
Charges |
|
9,526,463 |
6,583,175 |
|
|
----------- |
----------- |
|
|
25,417,862 |
21,458,525 |
|
| Cash
Flow from operating activities before working |
|
----------- |
----------- |
|
| capital
changes |
|
124,240,584 |
124,416,129 |
|
|
| (Increase)
/ Decrease in Current Assets |
|
| Stores,
Spares & Loose Tools |
|
1,455,460 |
(3,667,416) |
|
| Stock
in Trade |
|
11,861,418 |
(78,640,602) |
|
| Trade Debts |
|
(55,012,581 |
(40,470,651) |
|
| Advances,
Deposits, Prepayments & Other Receivables |
(1,403,709 |
(7,718,190 |
|
|
----------- |
----------- |
|
|
(43,099,412) |
(130,496,859) |
|
| Increase
/ (Decrease) in Current Liabilities |
|
|
|
| Short
Term Running Financing (Secured) |
|
28,000,000 |
15,600,000 |
|
| Trade
Creditors & Accrued Expenses |
|
(7,718,746 |
12,906,688 |
|
| Advances
& Deposits |
|
(2,296,910 |
1,519,366 |
|
|
----------- |
----------- |
|
|
17,984,344 |
30,026,054 |
|
|
----------- |
----------- |
|
| Effects
of Cash Flow due to Working Capital |
|
|
|
| changes |
|
(25,115,068) |
(100,470,805) |
|
|
----------- |
----------- |
|
| Cash
Flow from operating activities |
|
99,125,516 |
23,945,324 |
|
| Financial
Charges paid |
|
(9,526,463) |
(6,583,175) |
|
|
----------- |
----------- |
|
|
89,599,053 |
17,362,149 |
|
|
| Net
Cash (Outflow) / Inflow from Investing Activities |
|
| Capital
Expenditure |
|
(25,675,623)1 |
(5,087,407) |
|
| Sale
Proceeds from disposal of fixed assets |
|
2,753,519 |
7,425,025l |
|
| Deferred
Cost |
|
(98,100) |
-- |
|
| Investment
in Securities |
|
10,000,000 |
-- |
|
| Long
Term Deposits |
|
(5,655,895) |
-- |
|
|
----------- |
----------- |
|
|
(18,676,099) |
2,337,617 |
|
|
----------- |
----------- |
|
|
70,922,954 |
19,699,766 |
|
| Net
Cash (Outflow) / Inflow from Financing Activities |
|
| Repayment
of Long Term Loans |
|
(5,412,000) |
(8,634,000) |
|
| Dividend
Paid |
|
(60,400,000) |
(22,500,000) |
|
|
----------- |
----------- |
|
| Net
Increase / (Decrease) in Cash and Cash equivalent |
|
(65,812,000) |
(31,134,000) |
|
|
----------- |
----------- |
|
|
5,110,954 |
(11,434,234) |
|
| Cash
and Cash equivalent at beginning of the year |
|
10,988,553 |
22,422,787 |
|
|
----------- |
----------- |
|
| Cash
and Cash equivalent at the end of the year |
|
16,099,507 |
10,988,553 |
|
|
========== |
========== |
|
|
|
|
|
|
OWAIS G, HABIB |
|
GAFFAR A. HABIB |
|
| KARACHI
DATED: 12th September, 2001 |
Chief Executive |
|
Chairman |
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
|
RESERVE |
|
|
|
|
FOR ISSUE |
UN APP- |
|
|
|
SHARE |
CAPITAL |
GENERAL |
OF BONUS |
ROPRIATED |
|
|
|
CAPITAL |
RESERVE |
RESERVE |
SHARES |
PROFIT |
TOTAL |
|
| Balance
as at June |
|
|
|
| 30, 1999 |
|
150,000,000 |
10,000,000 |
37,500,000 |
-- |
40,352,866 |
237,312,960 |
|
| Net
Profit for the year |
|
| ended
June 30, 2000 |
-- |
-- |
-- |
-- |
90,283,347 |
90,283,347 |
|
| Appropriations: |
|
| Reserve
for issue of |
|
| Bonus
Shares |
-- |
-- |
-- |
30,000,000 |
(30,000,000) |
-- |
|
|
| Transfer to |
|
| General
Reserve |
-- |
-- |
7,500,000 |
-- |
(7,500,000) |
-- |
|
|
| Dividend |
|
-- |
-- |
-- |
|
(60,000,000 |
(60,000,000) |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| Balance
as at June |
|
| 30, 2000 |
|
150,000,000 |
10,000,000 |
45,000,000 |
30,000,000 |
32,596,307 |
267,596,307 |
|
|
| Net
Profit for the year |
|
| ended
June 30, 2001 |
-- |
-- |
-- |
-- |
83,818,677 |
83,818,677 |
|
| Appropriations: |
|
| Reserve
for issue of |
|
| Bonus
Shares |
50,000,000 |
-- |
-- |
(30,000,000) |
(20,000,000 |
-- |
|
| Transfer
to General |
|
| Reserve |
|
-- |
-- |
5,000,000 |
-- |
(5,000,000) |
-- |
|
| Dividend |
|
-- |
-- |
-- |
-- |
(57,000,000 |
(57,000,000) |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
200,000,000 |
10,000,000 |
50,000,000 |
-- |
34,414,984 |
294,414,984 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
| CONSOLIDATED
NOTES TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
| 1.00
THE GROUP AND ITS OPERATIONS |
|
| The
Group consists of: |
|
| Habib
Arkady Limited |
|
| Habib
Sorbitol (Pvt.) Limited |
|
| Habib
Agglomeration (Pvt.) Limited |
|
| Habib
Microfine (Pvt.) Limited |
|
| Habib
Power (Pvt.) Limited |
|
|
| Habib
Sorbitol (Pvt.) Limited, Habib Agglomeration (Pvt.) Limited, Habib Microfine
(Pvt.) Limited |
|
| and
Habib Power (Pvt.) Limited are wholly owned subsidiaries of Habib Arkady
Limited. |
|
|
| Habib
Arkady Limited incorporated in Pakistan and quoted on Karachi & Lahore
Stock |
|
| Exchanges.
The principal activity of the company is the manufacture of starch based
sugar. |
|
|
| Habib
Arkady Limited has acquired the entire fixed assets of its wholly owned
subsidiary |
|
| companies
namely Habib Sorbitol (Pvt.) Limited and Habib Agglomeration (Pvt.) Limited
with |
|
| effect
from 1st August 1999 and 1st June 2000 respectively. Accordingly Habib Arkady |
|
| Limited
has started manufacture, sale and export of the products of both the
companies. |
|
|
| The
principal activity of Habib Microfine (Pvt.) Limited is the manufacture of
microfine |
|
| processed
products. |
|
|
| 2.00
BASIS OF PRESENTATION |
|
| The
consolidated financial statements include the accounts of Habib Arkady
Limited, Habib |
|
| Sorbitol
(Pvt.) Limited, Habib Agglomeration (Pvt.) Limited, Habib Microfine (Pvt.)
Limited and |
|
| Habib
Power (Pvt.) Limited. The financial statement of subsidiary companies have
been |
|
| consolidated
on a line by line basis. |
|
|
| All
inter company balances and transactions have been eliminated. |
|
|
| 3.00 SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES |
|
| 3.01
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 3.02
Foreign Currency Translations |
|
| Foreign
Currency Transactions and receivables are recorded at the rate prevailing on
the |
|
| date
of transactions and foreign currency deposits are translated into Pak Rupees
at the |
|
| rate
of Exchange ruling at the Balance Sheet date. |
|
|
| 3.03 Staff Retirement Benefits |
|
| The
Group Companies operate Provident Fund Schemes for all its employees eligible
for |
|
| the benefits. |
|
|
| 3.04 Taxation |
|
| Provision
for Current Taxation is computed in accordance with the provision of income
tax |
|
| ordinance
1979. |
|
|
| The
Group Companies accounts for deferred taxation on all material timing
differences by |
|
| using
liability method. |
|
|
| 3.05
Fixed Assets |
|
| These
are stated at cost less accumulated depreciation except free-hold land and
capital |
|
| work-in-progress,
if any, which are stated at cost. |
|
|
| Depreciation
is charged to income applying reducing balance method, whereby the cost of |
|
| assets
will be written off over the estimated useful lives of respective assets. A
full year's |
|
| depreciation
is charged on additions irrespective of the date of purchase whereas no |
|
| depreciation
is charged on the assets disposed off during the year. |
|
|
| Maintenance
and normal repairs are Charged to income as and when incurred. |
|
|
| 3.06
Stores, Spares and Loose Tools |
|
| Stores
and Spares |
|
Valued at average cost |
|
| Loose Tools |
|
Stated at actuals |
|
|
| 3.07
Stock in Trade |
|
| Raw
& Packing Material |
|
Valued at average cost |
|
|
Valued at average cost of
raw material plus a |
|
| Work-in-Process |
|
portion of the
manufacturing expenses. |
|
|
Valued at lower of
average cost and net realisable |
|
| Finished
Goods |
|
value. |
|
|
| Raw
Material in Transit |
|
Stated at actuals |
|
|
| 3.08
Trade Debts |
|
| Debts
considered irrecoverable are written off and provision is made for debts
considered |
|
| doubtful. |
|
|
| 3.09
Revenue Recognition |
|
| Sales
are recorded on despatch of goods to customers. Income on Investment is
recorded |
|
| when
the right to receive is established. |
|
|
| 3.10.
Accounting for Lease |
|
| Lease
expenses represent lease rental for assets being used under operating lease |
|
| agreements
with various leasing companies. It also includes lease rental for solvent |
|
| extraction
plant leased from associated undertakings. |
|
|
|
2001 |
2000 |
|
|
RUPEES |
RUPEES |
|
|
|
|
| 4.00
ISSUED SUBSCRIBED AND PAID UP CAPITAL |
|
| 15,000,000
Ordinary Shares of Rs.5/- each |
|
75,000,000 |
75,000,000 |
|
| fully
paid issued for Cash. |
|
| 25,000,000
Ordinary Shares of Rs.5/- each |
|
125,000,000 |
75,000,000 |
|
| issued
as Fully Paid Bonus Shares. |
|
----------- |
----------- |
|
|
200,000,000 |
150,000,000 |
|
|
========== |
========== |
|
|
|
|
| 5.00
CAPITAL RESERVE |
|
| Premium
on 5,000,000 Right Shares |
|
| @
Rs.2/- per share |
|
10,000,000 |
10,000,000 |
|
|
========== |
========== |
|
|
|
|
| 6.00
REVENUE RESERVE |
|
|
GENERAL |
RESERVE FOR |
TOTAL |
TOTAL |
|
|
|
ISSUE OF BONUS |
2001 |
2000 |
|
|
|
SHARE |
RUPEES |
RUPEES |
|
|
| Balance
as per last |
|
| Balance
Sheet |
45,000,000 |
30,000,000 |
