| Buxly Paints
Limited |
|
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|
| Annual
Report 1999 |
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|
|
| CONTENTS |
|
|
| BOARD
OF DIRECTORS |
|
|
| NOTICE
OF MEETING |
|
|
| REPORT
OF THE DIRECTORS |
|
|
| AUDITORS
REPORT TO THE |
|
|
| BALANCE
SHEET |
|
|
| P
& L ACCOUNT |
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION (CASH FLOW STATEMENT) |
|
| NOTES
TO THE ACCOUNTS |
|
|
| PATTERN
OF SHAREHOLDINGS |
|
|
|
| BOARD
OF DIRECTORS |
|
|
| CHAIRMAN |
|
|
Nasim Alam Khan |
|
| DIRECTORS |
|
|
Mrs. Kaiser Sultana Khan |
|
|
|
|
Mrs. Amtul Rauf Khan |
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|
|
|
Abdul Qadir H. Moochhala |
|
|
|
|
Shahid Anwar |
|
| DIRECTOR
(ADMIN) |
|
Miss Ayla F. Khan |
|
| EXECUTIVE
DIRECTOR |
|
Yusuf Babar Khan |
|
| MANAGING
DIRECTOR & |
|
Wassim Alam Khan |
|
| CHIEF
EXECUTIVE |
|
|
|
|
|
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| COMPANY
SECRETARY |
|
Muhammad Khan |
|
| AUDITORS |
|
|
Ford, Rhodes, Robson,
Morrow |
|
|
|
|
Chartered Accountants |
|
| LEGAL
ADVISOR |
|
Abdus Samad |
|
| BANKERS |
|
|
The Muslim Commercial
Bank Ltd. |
|
|
|
Habib Bank Ltd. |
|
|
|
United Bank Ltd. |
|
|
|
National Bank of Pakistan |
|
|
|
Bank Al-Habib Ltd. |
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|
|
Bolan Bank Ltd. |
|
| REGISTERED
OFFICE |
|
E/20, S.I.T.E., |
|
|
|
|
Polytechnic Road,
Karachi-75700 |
|
|
|
|
|
| FACTORIES |
|
|
X-3, S.I.T.E., |
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|
|
Manghopir Road,
Karachi-75700 (Works 1) |
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|
|
E/20, S.I.T.E., |
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|
|
Polytechnic Road,
Karachi-75700 (Works 2) |
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|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the Forty-fifth Annual General Meeting of the
Shareholders of Messrs BUXLY PAINTS |
|
| LIMITED,
Karachi will be held at the Registered Office of the Company at E/20,
S.I.T.E. Polytechnic Road, Karachi- |
|
| 75700
on Wednesday the 29th December, 1999 at 10-00 a.m. to transact the following
business:- |
|
|
| 1.
To confirm the Minutes of the Forty-fourth Annual General Meeting held on
Monday the 28th |
|
| December, 1998. |
|
|
|
|
|
|
| 2.
To receive, consider and adopt the audited Balance Sheet and Profit &
Loss Account together with |
|
| the
Directors' and Auditors' Reports thereon for the year ended 30th June, 1999. |
|
|
|
|
| 3.
To appoint Auditors for the ensuing year and approve their remuneration. The
retiring Auditors M/s. |
|
| Ford,
Rhodes, Robson, Morrow have offered themselves for re-appointment at existing
remuneration. |
|
|
| 4.
To transact any other business which may legally be transacted at an Annual
General Meeting. |
|
|
|
|
By Order of the Board |
|
|
|
|
|
| Karachi: |
|
|
Muhammad Khan |
|
| Dated:
2nd December, 1999 |
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1)
The Share Transfer Books of the Company will be closed from Thursday the 23rd
December, |
|
| 1999
to Thursday the 6th January, 2000 both days inclusive. Transfers received in
order, at the |
|
| Registered
Office of the Company by the close of Business i.e. by 1-00 p.m. on Wednesday
the 22rid |
|
| December,
1999, will be treated in time for the purpose of eligibility to attend the
Annual General |
|
| Meeting. |
|
|
|
|
|
|
| 2)
Any member of the Company entitled to attend and vote may appoint another
member as his/her |
|
| proxy
to attend and vote on his/her behalf. PROXIES MUST BE RECEIVED AT THE REGIS- |
|
| TERED
OFFICE OF THE COMPANY NOT LATER THAN 48 HOURS BEFORE THE MEETING. |
|
|
| 3)
Shareholders are requested to notify the company of any change in their
address immediately. |
|
|
|
| REPORT
OF THE DIRECTORS |
|
|
| Dear
Shareholders: |
|
|
| Several
years of continuous uncertainty in the country's economic instability has
caused considerable disruption |
|
| in
the industrial sector where competition is bitter and the industry continues
to bleed under double system of taxation. |
|
|
| The
failure of Government agencies for some reasons in not implementing the
Budgetary provisions, non issue |
|
| of
SRO's related to stoppage of legalized evasion of taxes coupled with
increasing cost of living, falling value of rupee |
|
| have
all contributed to present state of affairs. |
|
|
| The
management has been able to cut down some expenses wherever possible, however
there are areas over |
|
| which
the management has no control such as the Workers Union Agreement, the
fluctuations in the forex values etc |
|
| where
no legal flexibility is available. |
|
|
| During
the year under review all the above factors were very significant in our
reduced volumes which directly |
|
| affect
the overall position of the year's accounts. In the organized sector of the
Paint industry only the multinationals |
|
| were
able to show stability while two of the local paint companies are known to
have gone out of active production. |
|
| The
fact that your company has been fighting back against all above noted factors
augurs well for the future. |
|
|
| During
the year under review your company has successfully achieved the ISO 9002
Certification. |
|
|
| Tides
always change with time and we feel the tide must change for the better for
us after |
|
| nearly
three years of troubled waters. |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| TRADING
RESULTS: |
|
|
|
|
|
|
| The
net profit/(Loss) for the year after deducting all |
|
|
| Charges
and administration & selling expenses. |
|
(4,752,249) |
1,884,530 |
|
|
|
|
|
| Add/Less:
Provision for taxation. |
|
930,942 |
2,000,000 |
|
|
|
------------------ |
------------------ |
|
| Loss
after taxation |
|
(5,683,191) |
(115,470) |
|
| Less/Add:
Unappropriated profit |
|
|
|
| brought
forward. |
|
68,791 |
184,261 |
|
|
|
------------------ |
------------------ |
|
|
|
(5,614,400) |
68,791 |
|
|
|
|
| Appropriation: |
|
|
|
| Proposed
dividend |
|
|
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
Profit/(Loss) carried forward. |
|
|
(5,614,400) |
68,791 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| PATTERN
OF SHARE HOLDING: |
|
| The
Pattern of shareholding is annexed to the accounts and represents the total
paid up capital of Rs. 14.400 |
|
| Million. |
|
|
| BOARD
OF DIRECTORS: |
|
| In
early November '99 Mr. Mushir Alam Khan one of the founder Director of your
company passed away and |
|
| Miss
Ayla F Khan has been appointed to fill the vacancy so caused for the
remaining duration of the present |
|
| boards tenure. |
|
|
| AUDITORS: |
|
| The
retiring Auditors Messrs Ford,. Rhodes, Robson, Morrow, Chartered Accountants
being eligible, offer |
|
| themselves
for re-appointment at existing remuneration. |
|
|
| NO
OF EMPLOYEES: |
|
| The
company employed 249 (1998: 262) employees at the end of the year. |
|
|
| LABOUR
RELATIONS: |
|
| As usual. |
|
|
|
YUSUF BABAR KHAN |
|
WASSIM ALAM KHAN |
|
| Karachi |
|
Executive Director |
|
Managing Director/ |
|
| Dated:
2nd December, 1999 |
|
|
Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of BUXLY PAINTS LIMITED as at June 30,
1999 and the related profit |
|
| and
loss account and statement of changes in financial position (cash flow
statement), together with the notes forming |
|
| part
thereof, for the year then ended and we state that we have obtained all the
information and explanations which |
|
| to
the best of our knowledge and belief were necessary for the purposes of our
audit and, after due verification thereof, |
|
| we report that: |
|
|
| (a)
in our opinion, proper books of account have been kept by the company as
required by |
|
| the
Companies Ordinance, 1984; |
|
|
|
|
|
|
| (b)
in our opinion: |
|
|
|
|
| (i)
the balance sheet and profit and loss account together with the notes thereon
have been drawn |
|
| up
in conformity with the Companies Ordinance, 1984 and are in agreement with
the books of |
|
| account
and are further in accordance with accounting policies consistently applied; |
|
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's
business; and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the year were in |
|
| accordance
with the objects of the company; |
|
|
|
|
| (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 and the statement of changes in financial position
(cash flow Statement), |
|
| together
with the notes forming part thereof, give the information required by the
Companies Ordinance, |
|
| 1984
in the manner so required and respectively give a true and fair view of the
state of company's affairs |
|
| as
at June 30, 1999 and of the loss and the changes in financial position (cash
flows) for the year then |
|
| ended; and |
|
|
| (d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980, |
|
|
|
| Karachi- |
|
|
Ford, Rhodes, Robson, Morrow |
|
| Dated:
2nd December, 1999 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30TH JUNE, 1999 |
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised |
|
|
|
|
| 5,000,000
ordinary shares of Rs. 10 each |
|
|
50,000,000 |
50,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
|
3 |
14,400,000 |
14,400,000 |
|
| Revenue
reserve |
|
|
4 |
(2,048,775) |
3,634,416 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
12,351,225 |
18,034,416 |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
5 |
25,060,268 |
25,060,268 |
|
| LONG
TERM DEPOSITS |
|
|
6 |
528,000 |
528,000 |
|
| DEFERRED
LIABILITIES |
|
|
|
|
| Staff gratuity |
|
|
|
5,643,485 |
5,347,506 |
|
| Directors'
retirement benefits |
|
|
300,000 |
300,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
5,943,185 |
5,647,506 |
|
| OBLIGATION
UNDER FINANCE LEASES |
|
7 |
855,608 |
1,170,250 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of obligation under finance leases |
|
7 |
787,763 |
1,105,261 |
|
| Short
term running finances-secured |
|
8 |
24,930,625 |
25,260,402 |
|
| Short term loan |
|
|
9 |
3,837,055 |
5,000,000 |
|
| Creditors,
accrued and other liabilities |
|
10 |
43,869,635 |
33,627,572 |
|
| Unclaimed
dividend |
|
|
105,690 |
122,584 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
73,530,768 |
65,115,819 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
11 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
118,269,354 |
115,556,259 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
assets at cost less |
|
|
|
| accumulated
depreciation |
|
12 |
24,423,587 |
25,147,622 |
|
|
|
|
|
| Capital
Work-in-progress |
|
13 |
579,049 |
556,660 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
25,002,636 |
25,704,282 |
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
14 |
1,486,894 |
1,235,067 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stock-in-trade |
|
15 |
30,510,918 |
35,113,030 |
|
| Trade debtors |
|
16 |
46,805,529 |
38,952,597 |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables |
|
17 |
11,686,444 |
12,914,403 |
|
|
|
|
|
| Cash
and bank balances |
|
18 |
2,776,933 |
1,636,880 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
91,779,824 |
88,616,910 |
|
|
|
|
------------------ |
------------------ |
|
|
|
118,269,354 |
115,556,259 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| The
auditors' report is annexed hereto. |
|
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED 30TH JUNE, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
| Sales |
|
19 |
186,188,376 |
190,877,697 |
|
| Cost of sales |
|
20 |
153,294,307 |
152,649,075 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
32,894,069 |
38,228,622 |
|
|
|
|
|
| Administrative
expenses |
|
21 |
21,871,214 |
22,757,802 |
|
| Selling expenses |
|
22 |
13,107,352 |
13,385,107 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
34,978,566 |
36,142,609 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
(Loss)/Profit |
|
|
(2,084,497) |
2,086,013 |
|
| Other income |
|
23 |
544,394 |
1,432,202 |
|
| Claim
for refund of excise duty |
|
24 |
3,428,095 |
4,437,133 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,887,992 |
7,955,348 |
|
|
|
|
| Financial
charges |
|
25 |
6,640,241 |
5,931,957 |
|
| Workers'
profit participation fund |
|
|
-- |
101,170 |
|
| Workers'
welfare fund |
|
|
-- |
37,691 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
6,640,241 |
6,070,818 |
|
|
|
|
------------------ |
------------------ |
|
| (Loss)/Profit
before taxation |
|
|
(4,752,249) |
1,884,530 |
|
|
|
|
|
|
|
| Taxation |
|
|
|
|
| Current |
|
|
930,942 |
1,400,000 |
|
| Prior years |
|
|
-- |
600,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
930,942 |
2,000,000 |
|
|
|
|
------------------ |
------------------ |
|
| (loss)
after taxation |
|
|
(5,683,191) |
(115,470) |
|
| Unappropriated
profit brought forward |
|
|
68,791 |
184,261 |
|
|
|
|
------------------ |
------------------ |
|
| (Loss)/Profit
available for appropriation |
|
|
(5,614,400) |
68,791 |
|
|
|
|
|
|
|
| Appropriation |
|
|
|
|
| Unappropriated
(Loss)/Profit carried forward |
|
|
(5,614,400) |
68,791 |
|
|
|
|
------------------ |
------------------ |
|
| BASIC
EARNINGS PER SHARE |
|
30 |
(3.95) |
(0.08) |
|
|
|
|
========== |
========== |
|
|
|
Chief Executive |
|
|
|
Director |
|
|
|
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION (CASH FLOW |
|
| STATEMENT)
FOR THE YEAR ENDED 30TH JUNE, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Loss/Profit
before taxation |
|
|
(4,752,249) |
1,884,530 |
|
|
|
|
| Adjustments for |
|
|
|
| Depreciation |
|
|
1,873,460 |
2,033,587 |
|
| Profit
on sale of fixed assets |
|
|
-- |
(101,053) |
|
| Provision
for retirement gratuity - net of payment |
|
|
295,979 |
606,555 |
|
| Financial
charges on borrowings |
|
|
6,185,063 |
5,515,541 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
8,354,502 |
8,054,630 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
|
3,602,253 |
9,939,160 |
|
|
|
|
|
|
| Changes
in working capital |
|
|
|
| (Increase)/decrease
in current assets |
|
|
|
|
|
| Stock-in-trade |
|
|
4,602,112 |
(1,102,139) |
|
| Trade debtors |
|
|
(7,852,932) |
6,895,092 |
|
| Advances,
deposits, prepayments |
|
|
|
|
| and
other receivables |
|
|
696,100 |
(6,262,377) |
|
| Increase
in current liabilities |
|
|
|
| Creditors,
accrued and other liabilities |
|
10,331,278 |
(666,051) |
|
|
|
------------------ |
------------------ |
|
|
|
7,776,558 |
(1,135,475) |
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
11,378,811 |
8,803,685 |
|
| Taxes paid |
|
|
|
|
(399,083) |
(2,784,390) |
|
| Financial
charges paid |
|
|
(6,274,278) |
(6,568,375) |
|
| Directors
retirement benefits |
|
|
|
-- |
(500,000) |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from/(used in) operating activities (A) |
|
4,705,450 |
(1,049,080) |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Sale
of fixed assets |
|
|
|
-- |
463,525 |
|
| Acquisition
of fixed assets |
|
|
|
(1,171,814) |
(1,809,945) |
|
| Long
term deposits |
|
|
|
(251,827) |
33,260 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities (B) |
|
(1,423,641) |
(1,313,160) |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Long
term deposits |
|
|
-- |
-- |
|
| Short
term finances |
|
|
(1,492,722) |
3,629,679 |
|
| Finance
lease - net |
|
|
(632,140) |
(312,576) |
|
| Dividend paid |
|
|
(16,894) |
(1,777,234) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) from financing activities (c) |
|
|
(2,141,756) |
1,539,869 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| NET
INCREASE/(DECREASE) IN CASH AND CASH |
|
| EQUIVALENTS
(A+B+C) |
|
|
1,140,053 |
(822,371) |
|
|
|
|
|
|
| CASH
AND CASH EQUIVALENTS AT THE |
|
|
|
|
| BEGINNING
OF THE YEAR |
|
|
1,636,880 |
2,459,251 |
|
|
|
|
------------------ |
------------------ |
|
| CASH
AND CASH EQUIVALENTS AT THE END OF THE YEAR |
|
2,776,933 |
1,636,880 |
|
|
|
|
========== |
========== |
|
|
|
Chief Executive |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED 30TH JUNE, 1999 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| Buxly
Paints Limited was incorporated on April 08, 1954 and is quoted on the Stock
Exchanges in Pakistan. |
|
| The
company is a manufacturer of paints, pigments, protective surface coatings,
varnishes and other |
|
| related
products. |
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| (a)
Accounting convention |
|
|
| These
accounts have been prepared under the historical cost convention modified by
the revaluation of |
|
| certain
flexed assets, |
|
|
|
|
|
| (b) Fixed assets |
|
|
|
|
|
|
|
| Owned |
|
|
|
| These
are stated at cost or applicable valuation less accumulated depreciation.
Depreciation is charged |
|
| to
income applying the reducing balance method and the rates used are stated in
note 12 to the accounts. |
|
| Leasehold
land is amortized over the remaining period of the lease. In respect of
additions during the |
|
| year,
depreciation is charged for full year, however, no depreciation is charged in
the year of disposal. |
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. Major renewals
and |
|
| improvements
are capitalised. Profit or loss on disposal of assets is included in income
currently. |
|
|
| Leased |
|
|
|
| Assets
subject to finance leases are included as tangible fixed assets at cost less
accumulated depreciation. |
|
|
|
|
| The
outstanding obligations under the leases less financial charges allocated to
future periods are shown |
|
| as liability. |
|
|
|
|
|
|
| Depreciation
is charged at the same rates as company owned assets. |
|
|
|
| (c)
Stock-in-trade |
|
| These
are valued at the lower of cost, determined on first-in-first-out method or
net realizable value, |
|
| except
for those in transit which are valued at cost. |
|
|
| (d)
Retirement benefits |
|
|
| i) Staff gratuity |
|
|
|
| The
company operates an approved gratuity fund scheme and provision in respect
thereto are made in |
|
| accordance
with the recommendations of the actuary. |
|
|
| ii)
Provident fund |
|
| The
company also operates an approved provident fund scheme and contributions
thereto are made |
|
| in
accordance with the terms of the scheme. |
|
|
| (e) Taxation |
|
|
|
| Provision
for current taxation is based on taxable income at the current rates of
taxation after taking |
|
| into
account tax credits available or 0.5% of turnover u/s 80(d) of Income tax
Ordinance 1979, whichever is |
|
| higher.
The company accounts for deferred taxation on all significant timing
differences using the liability |
|
| method.
As a measure of pru |
