| NOON PAKISTAN LIMITED |
|
|
|
|
|
|
|
| ANNUAL
REPORT 2004 |
|
|
| Role
of shareholders |
|
| The
Board aims to ensure that the Company's shareholders are timely informed
about the major |
|
| developments
affecting the Company's state of affairs. To achieve this objective,
information is |
|
| communicated
to the shareholders through quarterly, half-yearly and annual reports. The
Board |
|
| encourages
the shareholders' participation at the annual general meeting to ensure a
high level of |
|
| accountability. |
|
|
| Auditors'
qualification |
|
| The
Auditors have qualified their opinion due to non-charging of depreciation on
UHT plant additions |
|
| during
the Trial Run Operations and capitalization of Trial Run Loss amounting Rs.
13.706 million. |
|
|
| The
management is of the view that as the newly installed UHT plant operated only
for 95 days during |
|
| the
current financial year, far below its planned capacity, and was not ready for
production of intended |
|
| products
in commercially feasible quantities, therefore its decision to carry-out
Trial Run Operations |
|
| was
in the best interest of the Company. |
|
|
| Appointment
of auditors |
|
| The
Company's Auditors' M/s Hameed Chaudhri & Co., Chartered Accountants
retire and offer |
|
| themselves
for reappointment. The board of directors of the Company, as recommended by
the Audit |
|
| Committee,
has decided that the retiring Auditors be reappointed. However, in accordance
with the |
|
| provisions
of clause (xli) of the Code of Corporate Governance as contained in listing
regulations of |
|
| the
respective Stock Exchange where the Company is listed, Partner Incharge of
the audit |
|
| engagement
will be rotated and for this purpose approval of Securities & Exchange
Commission of |
|
| Pakistan
will be obtained by the Company. |
|
|
| Compliance
with the Code of Corporate Governance |
|
| The
requirements of the Code of Corporate Governance set-out by the Karachi and
Lahore Stock |
|
| Exchanges
in their Listing Rules, relevant for-the year ended 30 June, 2004, have been
duly complied |
|
| with.
A statement to this effect is annexed with the report. |
|
|
| Acknowledgment |
|
| The
Board places on record its appreciation of the.commendable services of the
Company's staff |
|
| whose
hard work and untiring commitment made it possible to achieve the desired
goals. We are |
|
| confident
that with the continued zeal and hard work, the Company has a very bright
future. |
|
|
| Finally,
I wish to thank our valued shareholders for their patronage and confidence
reposed in the |
|
| Company
and their support in the present challenging scenario. |
|
|
| STATEMENT
UNDER SECTION 160(1)(B) OF THE COMPANIES |
|
| ORDINANCE,
1984 WITH RESPECT TO SPECIAL BUSINESS |
|
|
| PLACEMENT
OF QUARTERLY ACCOUNTS ON WEBSITE |
|
| The
Securities & Exchange Commission of Pakistan (SECP) vide Circular No. 19
of 2004 has |
|
| allowed
the listed companies to place the accounts on their website instead of
sending the same |
|
| to
each shareholder by post. We appreciate this decision which is a step towards
modernization |
|
| as
well as cost saving. |
|
|
| The
Company however will supply the copies of the accounts to the shareholders on
demand at |
|
| their
registered addresses free of cost within one week of such demand. |
|
|
| The
address of the Company's website is "http://www.noonpak.com" and
all quarterly accounts |
|
| will
be available there. (The members are welcome to make suggestions for
improvement of the |
|
| website.) |
|
|
| The
Company will apply to SECP for permission after this resolution has been
passed and the |
|
| necessary
clearance obtained from the stock exchanges. |
|
|
| The
directors of the Company do not have any interest in this resolution that
would need a |
|
| disclosure. |
|
|
| An
orientation course for directors has been conducted during the year to
apprise |
|
| them
of their duties and responsibilities. |
|
|
| There
were no new appointments of the Company Secretary or head of Internal Audit |
|
| Department
during the current year except that Mr. Ahsan Iqbal was appointed as new |
|
| CFO
of the Company in place of Mr. Asim Zaheer Malik. |
|
|
| The
Directors' Report for this year has been prepared in compliance with the |
|
| requirements
of the Code and it fully describes the salient matters required to be |
|
| disclosed. |
|
|
| The
financial statements of the Company were duly endorsed by the CEO and the |
|
| CFO
before approval by the Board. |
|
|
| The
directors, CEO and executives do not hold any interest in the shares of the |
|
| Company
other than that disclosed in the pattern of shareholding. |
|
|
| The
Company has complied with all the corporate and financial reporting
requirements |
|
| of the Code. |
|
|
| The
Board has formed an Audit Committee, which comprises of three members, of |
|
| whom
one is non-executive director. |
|
|
| The
meetings of the Audit Committee were held at least once every quarter prior
to |
|
| approval
of interim and final results of the Company and as required by the Code. The |
|
| terms
of reference of the Committee have been formulated and advised to the |
|
| Committee
for compliance. |
|
|
| The
Board has set-up an effective internal audit function. |
|
|
| The
statutory Auditors of the Company have confirmed that they have been given a |
|
| satisfactory
rating under the quality control review programme of the Institute of |
|
| Chartered
Accountants of Pakistan (ICAP), that they or any of the partners of the firm, |
|
| their
spouses and minor children do not hold shares of the Company and that the
firm |
|
| and
all its partners are in compliance with International Federation of
Accountants |
|
| (IFAC)
guidelines on code of ethics as adopted by ICAP. |
|
|
| The
statutory Auditors or the persons associated with them have not been
appointed |
|
| to
provide other services except in accordance with the Listing Regulations and
the |
|
| auditors
have confirmed that they have observed IFAC guidelines in this regard. |
|
|
| We
confirm that all other material principles contained in the Code have been |
|
| complied with. |
|
|
| Future
prospectus |
|
| In
line with the vision of the Company, we have initiated a program to achieve
optimum efficiency in all |
|
| departments
especially the milk procurement department, where intake of raw milk is
projected to |
|
| increase
many folds in the coming years due to increased sales volume of Nurpur
products especially |
|
| UHT
Milk, inspite of new dairies commencing production in the ensuing period. |
|
|
| A
UHT Milk Plant from Tetra Pak, to be commissioned during the financial year
2004-05, will improve |
|
| the
viability of the Company. Insha Allah the benefits of this addition will be
enjoyed by the |
|
| shareholders
in the years to come. |
|
|
| Corporate
and financial reporting framework |
|
| - The financial statements, prepared by
the management of Noon Pakistan Limited, present fairly |
|
| its
state of affairs, the result of its operations, cash flows and changes in
equity. |
|
|
| Proper
books of account of Noon Pakistan Limited have been maintained. |
|
|
| Appropriate
accounting policies have been consistently applied in preparation of the
financial |
|
| statements
and accounting estimates are based on reasonable and prudent judgment. |
|
|
| International Accounting
Standards, as applicable
in Pakistan, have
been followed in |
|
| preparation
of the financial statements. |
|
|
| - The system of internal controls is
sound in design and has been effectively implemented and |
|
| monitored. |
|
|
| - There are no doubts upon Noon
Pakistan Limited's ability to continue as a 'going concern'. |
|
|
| - There has been no material departure
from the best practices of corporate governance, as |
|
| detailed
in the listing regulations. |
|
|
| Key
operating and financial data for the last six years in summarised form is
annexed. |
|
|
| There
are no statutory payments on account of taxes, duties, levies and charges
which are |
|
| outstanding
as at 30 June, 2004, except for those disclosed in the financial statements. |
|
|
| - The value of investments of staff
provident fund, based on audited accounts, was Rs.14.378 |
|
| million
as at 30 June, 2004. |
|
|
| During
the year, seven meetings of the Board of Directors were held. Attendance by
each |
|
| director
was as follows: |
|
|
| Names
of Directors |
|
No. of meetings attended |
|
| Mr.
Manzoor Hayat Noon |
|
5 |
|
| Mr. M. Anwar Mir |
|
5 |
|
| Mr. K. Iqbal Talib |
|
7 |
|
| Mr.
Javed All Khan |
|
1 |
|
| Mr. Ahmed Ali |
|
1 |
|
| Mr.
Salman Hayat Noon |
|
7 |
|
| Raja
Asghar Mehmood |
|
3 |
|
| Mr.
Adnan Hayat Noon |
|
2 |
|
|
| SIX
YEARS REVIEW AT A GLANCE |
|
|
|
YEAR |
|
|
| PARTICUALRS |
|
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
|
| Raw
Material Processed |
|
|
| Fresh Milk |
Kg. |
13,122,887 |
17,963,301 |
15,320,275 |
16,401,828 |
16,939,865 |
18,906,499 |
|
| Skimmed
milk |
|
342,379 |
433,125 |
— |
641 |
— |
— |
|
| Production |
|
|
|
| Butter |
633,473 |
615,442 |
640,185 |
746,282 |
682,813 |
580,284 |
|
| Milk powder |
Kg. |
889,625 |
1,246,629 |
1,039,084 |
996,709 |
968,350 |
869,636 |
|
| Cheese |
Kg. |
107,981 |
395,826 |
109,421 |
125,147 |
140,402 |
506,563 |
|
| Ghee |
Kg. |
7,824 |
27,535 |
40,055 |
74,952 |
82,086 |
133,819 |
|
| Cream |
Kg. |
54,920 |
550,298 |
135,568 |
1,493 |
43,562 |
5,006 |
|
| Pasteurised
milk |
Kg. |
652,627 |
1,795,364 |
2,019,552 |
2,926,625 |
2,982,220 |
3,024,694 |
|
| Jam |
— |
— |
— |
— |
— |
8,155 |
|
|
|
|
| Paid up capital |
|
6,000 |
6,000 |
6,000 |
6,000 |
6,000 |
79,200 |
|
| Reserves
and surplus |
31,869 |
26,776 |
25,751 |
29,916 |
30,957 |
32,942 |
|
| Shareholders
equity |
37,869 |
32,776 |
31,751 |
35,316 |
36,957 |
112,142 |
|
| Fixed Assets - |
|
|
|
| Cost
less depreciation |
37,098 |
77,541 |
81,244 |
87,092 |
87,910 |
260,092 |
|
| Sales - Net |
|
209,510 |
268,428 |
259,410 |
278,711 |
303,596 |
311,265 |
|
| Cost of sales |
|
184,056 |
238,113 |
224,091 |
235,443 |
256,041 |
269,979 |
|
| Gross profit |
|
25,454 |
30,314 |
35,319 |
43,268 |
47,554 |
41,286 |
|
| Profit/(Loss)
before tax |
1,249 |
-1,785 |
1,549 |
7,930 |
7,862 |
7,870 |
|
| Profit/(Loss)
after tax |
-1,062 |
-4,193 |
-0.124 |
6,565 |
4,446 |
3,370 |
|
| Cash dividend |
|
20% |
15% |
15% |
50% |
— |
— |
|
| Bonus shares |
|
— |
— |
— |
— |
20% |
— |
|
| Preference
Dividend on |
|
|
| Prorata basis |
|
— |
— |
— |
— |
— |
12% |
|
|
| Statement
of Compliance with the Code of Corporate Governance and Best |
|
| Practices
on Transfer Pricing |
|
|
| A. Statement of Compliance with the Code of
Corporate Governance |
|
| This
statement is being presented to comply with the Code of Corporate Governance |
|
| contained
in Listing Regulation No.37 of the Karachi Stock Exchange and Chapter XIII of |
|
| the
listing regulations of the Lahore Stock Exchange for the purpose of
establishing a |
|
| framework
of good governance, whereby a listed company is managed in compliance with |
|
| the
best practices of corporate governance. |
|
|
| The
Company has applied the principles contained in the Code in the following
manner: |
|
| 1. The Company encourages representation
of independent non-executive directors; at |
|
| present
the Board includes four independent non-executive directors. |
|
|
| 2. The directors have confirmed that none
of them is serving as a director in more than |
|
| ten
listed Companies including this Company. |
|
|
| 3. All the resident directors of the
Company are registered as taxpayers and none of |
|
| them
has defaulted in payment of any loan to a banking company, a DPI or an NBFI |
|
| or,
being a member of a stock exchange, has been declared as a defaulter by that |
|
| stock exchange. |
|
|
| 4. During the year, Raja Asghar Mehmood
resigned on 20.04.2004 and Mr. Adnan Hayat |
|
| Noon
was appointed as Director on the same date. |
|
|
| 5. The Company has prepared a
"Statement of Ethics and Business Practices", which |
|
| has
been signed by all the directors and employees of the Company. |
|
|
| 6. The Board has developed a
vision/mission statement, overall corporate strategy and |
|
| significant
policies of the Company. A complete record of particulars of significant |
|
| policies
along with the dates on which they were approved or amended has been |
|
| maintained. |
|
|
| 7. All the powers of the Board have been
duly exercised and decisions on material |
|
| transactions,
including appointment and determination of remuneration and terms and |
|
| conditions
of employment of the CEO and other executive directors, have been taken |
|
| by the Board. |
|
|
| 8. The meetings of the Board were presided
over by the Chairman when he was present, |
|
| and
the Board met at least once in every quarter. Written notices of the Board |
|
| meetings,
along with agenda, were circulated at least seven days before the meetings. |
|
| The
minutes of the meetings were appropriately recorded and circulated. |
|
|
| THE
COMPANIES ORDINANCE 1984 |
|
| PATTERN
OF SHAREHOLDING - PREFERENCE SHARE.S |
|
|
| Number of |
Shareholding |
|
Total Shares |
|
| Shareholders |
From |
To |
|
|
|
|
| 10 |
1 |
100 |
800 |
|
| 11 |
101 |
500 |
3,380 |
|
| 53 |
501 |
1,000 |
38,200 |
|
| 23 |
1,001 |
5,000 |
47,300 |
|
| 3 |
5,001 |
10,000 |
19,440 |
|
| 5 |
10,001 |
15,000 |
57,580 |
|
| 3 |
15,001 |
20,000 |
48,460 |
|
| 2 |
25,001 |
30,000 |
58,380 |
|
| 1 |
35,001 |
40,000 |
36,000 |
|
| 1 |
70,001 |
75,000 |
74,890 |
|
| 1 |
80,001 |
85,000 |
80,980 |
|
| 1 |
100,001 |
105,000 |
104,630 |
|
| 2 |
120,001 |
125,000 |
244,000 |
|
| 1 |
390,001 |
395,000 |
395,000 |
|
| 1 |
655,001 |
660,000 |
660,000 |
|
| 1 |
695,001 |
700,000 |
700,000 |
|
| 1 |
1,135,001 |
1,140,000 |
1,140,000 |
|
| 1 |
1,490,001 |
1,495,000 |
1,490,960 |
|
| 1 |
1,995,001 |
2,000,000 |
2,000,000 |
|
| 122| |
|
7,200,000 |
|
|
|
| REVIEW
REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE |
|
| WITH
BEST PRACTICES OF THE CODE OF CORPORATE GOVERNANCE |
|
| We
have reviewed the Statement of Compliance with the best practices contained
in the Code of |
|
| Corporate
Governance prepared by the Board of Directors of Noon Pakistan Limited to
comply |
|
| with
the Listing Regulation No. 37 of the Karachi Stock Exchange (Guarantee)
Limited and |
|
| Chapter
XIII of Lahore Stock Exchange (Guarantee) Limited where the Company is
listed. |
|
|
| The
responsibility for compliance with the Code of Corporate Governance is that
of the Board of |
|
| Directors
of the Company. Our responsibility is to review, to the extent where such
compliance |
|
| can
be objectively verified, whether the Statement of Compliance reflects the
status of the |
|
| Company's
compliance with the provisions of the Code of Corporate Governance and report
if it |
|
| does
not. A review is limited primarily to inquiries of the Company personnel and
review of |
|
| various
documents prepared by the Company to comply with the Code. |
|
|
| As
part of our audit of the financial statements we are required to obtain an
understanding of the |
|
| accounting
and internal control systems sufficient to plan the audit and develop an
effective audit |
|
| approach.
We have not carried out any special review of the internal control system to
enable us |
|
| to
express an opinion as to whether the Board's statement on internal control
covers all controls |
|
| and
the effectiveness of such internal controls. |
|
|
| Based
on our review, nothing has come to our attention which causes us to believe
that the |
|
| Statement
of Compliance does not appropriately reflect the Company's compliance, in all
material |
|
| respects,
with the best practices contained in the Code of Corporate Governance as
applicable to |
|
| the
Company for the year ended 30 June, 2004. |
|
|
| BALANCE
SHEET AS AT |
|
|
|
|
Note |
2004 |
2003 |
|
|
|
|
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
| Authorised capital |
|
3.1 |
100,000,000 |
10,000,000 |
|
| Issued,
subscribed and paid-up capital |
3.2 |
79,200,000 |
6,000,000 |
|
| Reserve
for issue of bonus shares |
|
|
— |
1 ,200,000 |
|
| Unappropriated
profit |
|
|
32,941,779 |
29,756,607 |
|
|
|
112,141,779 |
36,956,607 |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
4 |
24,636,358 |
25,339,311 |
|
| LONG
TERM FINANCES |
|
5 |
97,170,259 |
- |
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
| SUBJECT
TO FINANCE LEASE |
|
6 |
10,209,638 |
7,665,513 |
|
| DEFERRED
TAXATION |
|
7 |
15,786,799 |
12,807,294 |
|
| CURRENT
LIABILITIES |
|
|
|
| Current portion of |
|
|
|
| long
term liabilities |
|
8 |
14,792,688 |
4,868,107 |
|
| Short
term finances |
|
9 |
33,841,048 |
29,289,076 |
|
| Creditors,
accruals and other liabilities |
10 |
70,764,285 |
29,890,525 |
|
| Taxation |
|
11 |
2,094,200 |
2,873,000 |
|
| Dividends |
|
12 |
1,509,731 |
630,219 |
|
|
|
123,001,952 |
67,550,927 |
|
| CONTINGENCIES
AND COMMITMENTS |
13 |
|
|
|
|
|
382,946,785 |
150,319,652 |
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30 JUNE, 2004 |
|
|
|
Note |
2004 |
2003 |
|
|
|
Rupees |
Rupees |
|
| SALES - Net |
|
23 |
311,264,727 |
303,595,643 |
|
| COST OF SALES |
|
24 |
269,978,520 |
256,041,229 |
|
| GROSS PROFIT |
|
|
41,286,207 |
47,554,414 |
|
| ADMINISTRATIVE
AND SELLING EXPENSES |
25 |
30,385,715 |
32,400,450 |
|
| OPERATING
PROFIT |
|
|
10,900,492 |
15,153,964 |
|
| OTHER INCOME |
|
26 |
1,651,318 |
821,472 |
|
|
|
12,551,810 |
15,975,436 |
|
| FINANCIAL
CHARGES |
|
27 |
4,154,250 |
7,459,708 |
|
| MISCELLANEOUS
CHARGES |
|
28 |
108,347 |
51,100 |
|
| WORKERS'
WELFARE FUND |
|
|
4,681 |
179,526 |
|
| WORKERS'
(PROFIT) PARTICIPATION FUND |
10.1 |
414,461 |
423,300 |
|
|
|
4,681,739 |
8,113,634 |
|
| PROFIT
BEFORE TAXATION |
|
|
7,870,071 |
7,861,802 |
|
| TAXATION |
|
|
|
| Current |
|
11 |
1,520,643 |
2,868,313 |
|
| Deferred |
|
7 |
2,979,505 |
547,594 |
|
|
|
4,500,148 |
3,415,907 |
|
| PROFIT
AFTER TAXATION |
|
|
3,369,923 |
4,445,895 |
|
| UNAPPROPRIATED
PROFIT - Brought forward |
|
29,756,607 |
21,262,693 |
|
| TRANSFER
FROM SURPLUS ON REVALUATION |
|
|
| OF
FIXED ASSETS ON ACCOUNT OF |
|
|
| INCREMENTAL
DEPRECIATION FOR : |
|
|
| Prior years' |
|
|
— |
4,466,961 |
|
| Current
year-net of deferred taxation |
|
|
702,953 |
781,058 |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
33,829,483 |
30,956,607 |
|
| APPROPRIATIONS
: |
|
|
|
| Transfer
to reserve for issue of bonus shares |
|
— |
1,200,000 |
|
| Proposed
preference dividend |
|
|
887,704 |
- |
|
|
|
887,704 |
1,200,000 |
|
| UNAPPROPRIATED
PROFIT - Carried to Balance Sheet |
32,941,779 |
29,756,607 |
|
| EARNING
PER SHARE |
|
29 |
|
|
| - Basic |
|
|
3.45 |
6.17 |
|
| - Diluted |
|
|
2.31 |
0 |
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| We
have audited the annexed balance sheet of NOON PAKISTAN LIMITED as at 30
June, 2004 |
|
| 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 |
|
