| Century Paper & Board Mills Limited |
|
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| CONTENTS |
|
|
| Corporate
Information |
|
| Notice
of Meeting |
|
| Quality Policy |
|
|
| ISO Certificate |
|
|
| Highlights |
|
|
| Statement
of Value Added |
|
| Financial
Review of Five Years |
|
| Directors'
Review |
|
| Auditors'
Report to the Members |
|
| Balance Sheet |
|
|
| Profit
& Loss Account |
|
| Cashflow
Statement |
|
| Notes
to the Accounts |
|
| Statement
under Section 237 (1) of the Companies Ordinance, 1984 |
|
| Pattern
of Holding of Shares |
|
| Consolidated
Financial Statements |
|
| Auditors'
Report to the Members |
|
| Consolidated
Balance Sheet |
|
| Consolidated
Profit & Loss Account |
|
| Consolidated
Cashflow Statement |
|
| Notes
to the Consolidated Financial Statements |
|
| Report
and Financial Statements of Century Power |
|
| Generation
Limited - subsidiary Company |
|
|
|
| CORPORATE
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| Iqbalali
Lakhani- Chairman |
|
| M.
Rafi Chawla - Chief Executive & Managing Director |
|
| Zulfiqarali
Lakhani |
|
| Amin
Mohammed Lakhani |
|
| Tasleemuddin
Ahmed Batlay |
|
| Aziz Ebrahim |
|
| Syed
Shabahat Hussain- Nominee Director (NIT) |
|
|
| ADVISOR |
|
| Sultanali
Lakhani |
|
|
| COMPANY
SECRETARY |
|
| Ramzanali
Halani |
|
|
| EXECUTIVE
COMMITTEE |
|
| M. Rafi Chawla |
|
| Aftab Ahmad |
|
| Mir Nadir Ali |
|
| Zafar
Iqbal Sobani |
|
|
| AUDITORS |
|
| Ford,
Rhodes, Robson, Morrow |
|
| Chartered
Accountants |
|
|
| BANKERS |
|
| American
Express Bank Limited |
|
| ANZ
Grindlays 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 |
|
| 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 & (021) 5683410 |
|
| E-Mail:
cpbm@cyber.net.pk |
|
|
| REGISTERED
OFFICE & REGIONAL SALES OFFICE (NORTH) |
|
| 41-K,
Model Town, Lahore, Pakistan |
|
| Phone:
(042) 5880697 |
|
|
| MILLS |
|
| Jamber
Khurd, Bhai Pheru, Tehsil Chunian |
|
| Lahore-Multan
Road, District Kasur, Pakistan |
|
| Phones:
(04951) 3881 51 & 388200 |
|
|
|
| NOTICE
OF MEETING |
|
|
| NOTICE
IS HEREBY GIVEN that the 16th Annual General Meeting of CENTURY PAPER &
BOARD MILLS LIMITED |
|
| will
be held on Tuesday December 21, 1999 at 10:00 a.m. at Avari Renaissance
Towers Hotel, Fatima Jinnah |
|
| Road,
Karachi to transact the following business: |
|
|
| 1.
To receive, consider and adopt the audited Balance Sheet and Profit and Loss
account for the year ended |
|
| June
30, 1999 and the Directors' and Auditors' Reports thereon. |
|
|
|
| 2.
To declare a dividend @ 15% i.e. Rs. 1.50 per share of Rs. 10/- each. |
|
|
| 3.
To appoint Auditors and to fix their remuneration. |
|
|
|
|
By Order of the Board |
|
|
|
|
|
|
|
|
|
RAMZANALI HALANI |
|
| DATED:
October 23, 1999 |
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The share transfer books of the Company will remain closed from December 08,
1999 to December 21, |
|
| 1999
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 December 07, 1999
will be considered |
|
| in
time for entitlement of dividend. |
|
|
|
|
| 2.
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. |
|
|
|
|
| 3.
Forms of proxy to be valid must be received by the Company not later than 48
hours before the time of the |
|
| meeting. |
|
|
|
| 4.
Members are requested to notify the Company promptly of any change in their
addresses. |
|
|
| 5.
Form of proxy is enclosed herewith. |
|
|
|
| QUALITY
POLICY |
|
|
| OUR
MISSION-STRIVE TOGETHER FOR EXCELLENCE |
|
|
| *
CENTURY excels in manufacturing & marketing |
|
| quality
Paper & Board for packaging. |
|
|
| *
Being a customer focused Company, CENTURY |
|
| is
always ready to accept challenges for achieving |
|
| its mission. |
|
|
| *
Its professional & motivating management style |
|
| ensures
customer satisfaction through continuous |
|
| improvement
in quality & productivity. |
|
|
| *
CENTURY values the social & economic well |
|
| being
of its partners and strives for a harmonious |
|
| environment
conducive to team work. |
|
|
|
| HIGHLIGHTS |
|
|
|
|
Rs. in '000 |
|
|
|
|
Year to June
30, |
|
|
1999 |
1998 |
|
|
| Sales - Net |
|
1,629,436 |
1,421,566 |
|
| Profit
before taxation |
|
107,458 |
76,819 |
|
| Taxation |
|
33,730 |
10,859 |
|
| Profit
after taxation |
|
73,728 |
65,960 |
|
| Shareholders'
equity |
|
682,700 |
656,104 |
|
| Total assets |
|
1,343,962 |
1,369,981 |
|
|
| Dividend |
|
| Cash-percentage
of paid up capital |
|
15 |
-- |
|
| Stock-percentage
of paid up capital |
|
-- |
10 |
|
| Earnings
per share-Rupees |
|
2.35 |
2.10 |
|
| Paper
and Board Produced-tonnes |
|
58,545 |
51,145 |
|
| Number
of employees |
|
857 |
836 |
|
|
|
| STATEMENT
OF VALUE ADDED |
|
|
|
|
1999 |
% age |
1998 |
% age |
|
|
|
Rs. 000 |
|
Rs. 000 |
|
|
| Wealth
Generated |
|
|
| Total
revenue, net of sales tax |
|
1,685,226 |
|
1,457,428 |
|
|
| Bought-in-material
& services |
|
(1,201,812) |
|
(1,020,798) |
|
|
|
|
------------------ |
|
------------------ |
|
|
|
|
483,414 |
100 |
436,630 |
100 |
|
|
|
|
========== |
|
========== |
|
|
|
|
|
|
| Wealth
Distributed |
|
|
|
|
|
|
| To Employees |
|
|
|
| Salaries,
benefits & related costs |
|
94,899 |
20 |
85,658 |
20 |
|
|
|
|
| To Government |
|
|
|
| Excise
duty, income tax, import duty |
|
| (exclusive
of capital items) and Workers' Fund |
163,446 |
33 |
141,276 |
32 |
|
|
|
|
| To
providers of capital |
|
|
|
|
| Dividend
to shareholders |
|
47,132 |
10 |
-- |
-- |
|
|
|
|
| Mark-up/interest
expenses on borrowed funds |
77,063 |
16 |
74,604 |
17 |
|
|
|
|
| Retained
for reinvestment & future growth |
|
| Depreciation
& retained profit |
|
100,874 |
21 |
135,092 |
31 |
|
|
|
------------------ |
|
------------------ |
|
|
|
483,414 |
100 |
436,630 |
100 |
|
|
|
========== |
|
========== |
|
|
|
|
| FINANCIAL
REVIEW OF FIVE YEARS |
|
|
|
|
(Rs. '000) |
|
|
1999 |
1998 |
1997 |
1996 |
1995 |
|
|
|
(Six months) |
|
|
|
(Jan - Jun) |
|
|
|
|
| ASSETS
EMPLOYED |
|
|
| Fixed Assets |
|
|
736,623 |
746,437 |
778,872 |
711,138 |
546,017 |
|
| Long-term
investments |
|
100,000 |
100,000 |
100,000 |
100,000 |
75,000 |
|
| Long-term
Loans, deposits and prepayments |
8,606 |
7,239 |
5,807 |
4,647 |
6,050 |
|
| Working
capital (excluding current portion) |
102,653 |
93,665 |
55,479 |
72,053 |
154,682 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Total
assets employed |
|
947,882 |
947,341 |
940,158 |
887,838 |
781,749 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
| FINANCED BY |
|
|
|
|
|
|
| Paid-up capital |
|
|
314,213 |
285,648 |
285,648 |
259,680 |
259,680 |
|
| Reserves |
|
|
368,487 |
370,456 |
304,496 |
303,362 |
264,507 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Shareholders'
fund |
|
682,700 |
656,104 |
590,144 |
563,042 |
524,187 |
|
| Redeemable
capital |
|
124,931 |
147,627 |
218,603 |
221,529 |
159,568 |
|
| Long-term loans |
|
|
-- |
1 7,000 |
21,906 |
24,380 |
53,142 |
|
| Liability
against assets subject to |
|
|
|
| finance lease |
|
70,247 |
71,606 |
54,501 |
23,883 |
28,852 |
|
| Deferred
liabilities |
|
70,004 |
55,004 |
55,004 |
55,004 |
16,000 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Total
capital employed |
|
947,882 |
947,341 |
940,158 |
887,838 |
781,749 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
|
| TURNOVER
& PROFIT |
|
|
| Gross sales |
|
|
1,857,924 |
1,599,397 |
1,182,429 |
1,269,651 |
550,731 |
|
| Net sales |
|
|
1,629,436 |
1,421,566 |
1,014,709 |
1,104,015 |
478,905 |
|
| Gross profit |
|
|
179,734 |
157,328 |
139,335 |
281,398 |
131,909 |
|
| % of net sales |
|
11 |
11 |
14 |
25 |
28 |
|
| Profit
before Taxation |
|
107,458 |
76,819 |
61,339 |
195,132 |
93,993 |
|
| % of net sales |
|
7 |
5 |
6 |
18 |
20 |
|
| Profit
after Taxation |
|
73,728 |
65,960 |
55,667 |
106,372 |
67,582 |
|
| Cash
dividend % |
|
15 |
-- |
10 |
25 |
-- |
|
| Bonus issue % |
|
|
-- |
10 |
-- |
10 |
-- |
|
|
|
|
|
|
|
|
|
| OTHERS |
|
|
|
|
| Capital
expenditure |
|
67,666 |
39,391 |
123,358 |
221,128 |
34,799 |
|
| Earnings per share (Rs.)
(Note) |
|
2.35 |
2.10 |
1.77 |
3.39 |
2.15 |
|
| No.
of employees |
|
857 |
836 |
822 |
798 |
771 |
|
|
| Note:
Figures restated based on bonus issues. |
|
|
|
| DIRECTORS'
REVIEW |
|
|
| The
Directors have pleasure in presenting their annual report together with the
Company's audited accounts for the |
|
| year
ended June 30, t999. |
|
|
| MARKETING
AND BUSINESS SCENARIO |
|
|
| This
year has been an exceedingly challenging period. General economic
recessionary conditions have continued |
|
| which
has severely affected the business environment. This has a direct bearing on
our paper industry. The Company |
|
| inspite
of above, achieved volume increase of around 15%, from 50,1 92 M.Tons to
58,014 M.Tons. |
|
|
| The
first half of the financial year was in the grip of economic sanctions
causing stagnation. In addition to this the |
|
| cheaper
and liberal imports in the Country, primarily due to massive devaluation of
currency in Far Eastern countries, |
|
| the
selling prices of your Company's products were under pressure and although
the desired volumes were achieved |
|
| the
profitability remained below. |
|
|
| The
second half witnessed some improvements in selling price of Company's
products to cover increases in our input |
|
| cost
especially raw material. During the year the Company had taken certain
initiatives and had introduced some |
|
| new
products which provided customers various choice of packaging board. These
products were accepted well by |
|
| the
customers and regular orders are received from our customers. These new
products have helped the Company |
|
| to
maintain its market share in the current business scenario. |
|
|
| We
have been emphasising in our previous year's Directors' Report and would once
again reiterate need for even |
|
| playing
field to the local manufacturers visa vis imported products. The Company
through platform of its Association |
|
| has
called upon the Tariff Anomaly Commission of Government of Pakistan to levy
Anti Dumping duties for combating |
|
| cheaper
imports from Far Eastern Countries. |
|
|
| The
industry also suffers from multiple taxes of Excise Duty and Sales Tax and
once again we reiterate that in order |
|
| to
save the industry from collapse, 5% Excise Duty should be withdrawn on
locally produced Paper and Board. |
|
|
| MANUFACTURING |
|
|
| During
the year under review the production facilities including paper and board
machines, coating machines, |
|
| indigenous
pulp mill alongwith supporting ancillary facilities performed well. Normal
routine repair and maintenance |
|
| were
carried out, in order to achieve the desired results consistently.
Efficiencies were achieved in products inputs |
|
| and
lower per ton figures were achieved in comparison to last year in fibre
inputs, electricity, steam and water. |
|
|
| FINANCIAL
RESULTS |
|
|
| In
year 1998/99 the Company earned a profit before tax of Rs. 107.46 million
compared to Rs. 76.82 million last year, |
|
| an
increase of 40%. The profit after tax increased to Rs. 73.73 million in year
1998/99 compared to Rs. 65.96 million |
|
| last
year. This was achieved largely due to volume increase and improvement in
operating efficiencies. |
|
|
| Your
Board recommends that the net profit of Rs. 73.73 million earned during the
year together with the balance of |
|
| unappropriated
profit of Rs. 0.85 million brought forward from the prior year be
appropriated as follows: |
|
|
|
|
(Rupees '000) |
|
|
| Profit
before taxation |
|
|
107,458 |
|
| Taxation |
|
|
|
(33,730) |
|
|
|
|
------------------ |
|
| Profit
after taxation |
|
|
73,728 |
|
| Unappropriated
profit brought forward |
|
846 |
|
|
|
|
------------------ |
|
| Profit
available for appropriation |
|
|
74,574 |
|
| Appropriation: |
|
|
|
|
|
| Proposed
dividend on 31.42 million |
|
|
|
| shares
of Rs. 10 each at Rs. 1.50 per share |
|
(47,132) |
|
| Transfer
to General Reserve |
|
|
(27,000) |
|
|
|
|
------------------ |
|
| Unappropriated
profit carried forward |
|
442 |
|
|
|
|
========== |
|
| Earnings
per share |
|
|
Rs. 2.35 |
|
|
|
|
|
|
| CONTRIBUTION
TO NATIONAL EXCHEQUER |
|
|
| Company's
contribution in terms of duties and taxes to the National Exchequer during
the year was Rs. 387 million |
|
| compared
to Rs. 338 million in the preceding year an increase of 14%. |
|
|
| ISO
9002 CERTIFICATION & OTHER MILESTONES |
|
|
| We
are in process of increasing the scope of ISO 9002 certification and Insha
Allah very soon all the remaining |
|
| manufacturing
areas at Mills will be certified and we hope that will provide tangible
result in shape of enhanced |
|
| operational
efficiencies. |
|
|
| Your
Company has also been selected and awarded for pollution control, in the Pulp
and Paper Sector by the ETPI |
|
| (FPCCI). |
|
|
| YEAR
2000 COMPLIANCE |
|
|
| The
Company has satisfactorily addressed the issues and risk related to the
potential impact of "Year 2000" on |
|
| computer
systems and infrastructure. |
|
|
| CONSOLIDATED
FINANCIAL STATEMENTS |
|
|
| In
this annual report we have included audited consolidated financial statements
for the year ended June 30, 1999 |
|
| to
provide the combined results of your Company and its subsidiary, Century
Power Generation Limited, in view of |
|
| applicability
of IAS-27 "Consolidated Financial Statements and Accounting for
Investment in Subsidiaries" in Pakistan |
|
| from
accounting period starting from July 01, 1998. |
|
|
| SUBSIDIARY
COMPANY'S OPERATIONS |
|
|
| Century
Power Generation Limited, our subsidiary, in which your Company has 87% stake
showed good progress |
|
| during
the year. Its operating profit increased from Rs. 69.81 million in 1997/98 to
Rs. 78.22 million in year 1998/99. |
|
| The
net profit for the year 1998/99 increased to Rs. 60.50 million showing 24%
increase over the previous year. |
|
| Dividend
income of Rs. 45 million from subsidiary company has been reflected in your
Company. |
|
|
| ACKNOWLEDGMENTS |
|
|
| The
customers are the central point for our business dealings and we highly
appreciate their cooperation. We will |
|
| continuously
strive to give improved services to our valued customers. |
|
|
| We
also acknowledge the valuable services of our employees and management who
have shown keen commitment |
|
| in
achieving the company's objectives during the year. |
|
|
| We
would also like to thank Company's bankers, leasing, insurance companies and
shareholders for their continued |
|
| support. |
|
|
| AUDITORS |
|
|
| The
present Auditors, Ford, Rhodes, Robson, Morrow, retire and being eligible,
offer themselves for reappointment. |
|
|
| PATTERN
OF SHAREHOLDING |
|
|
| A
pattern of shareholding of the Company as at June 30, 1999, is included in
this report. |
|
|
| FUTURE
OUTLOOK |
|
|
| We
are confident that we would be able to maintain Company's share in paper and
board industry by extending to |
|
| our
customers quality service and providing them various product alternatives
enabling them to compete in a difficult |
|
| economic
era we all are passing. Further, we have plans in hand to cater for the
changes in the packaging preferences |
|
| of
our valued customers and we will Insha Allah meet their requirements. |
|
|
| Under
changing economic scenario of the country, the Company would therefore
greatly emphasize on its internal |
|
| efficiencies
by rationalization of its processes for improving quality, controlling cost
and better management of |
|
| working
capital. We have to achieve sustainable performance in future. |
|
|
|
|
On behalf of the Board of Directors |
|
|
|
|
|
|
|
|
|
IQBALALI LAKHANI |
|
| Karachi:
October 11, 1999 |
|
Chairman |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of CENTURY PAPER
& BOARD MILLS LIMITED as at June 30, |
|
| 1999
and the related profit and loss account and the 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 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 the
Company's affairs |
|
| as
at June 30, 1999 and of the profit and 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. |
|
|
|
|
|
FORD, RHODES, ROBSON, MORROW |
|
| Karachi:
October 11, 1999 |
|
Chartered Accountants |
|
|
|
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
|
|
|
Note |
1999 |
1998 |
|
|
|
(Rupees in
Thousands) |
|
| ASSETS |
|
|
|
| NON-CURRENT
ASSETS |
|
|
|
| Fixed
assets - Tangible |
|
|
|
|
| Operating
assets |
|
|
3 |
699,069 |
740,739 |
|
| Capital
work-in-progress |
|
4 |
37,554 |
5,698 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
736,623 |
746,437 |
|
| Long-term
investment |
|
|
5 |
100,000 |
100,000 |
|
| Long-term loans |
|
|
|
6 |
603 |
743 |
|
| Long-term
deposits and prepayment |
|
7 |
8,003 |
6,496 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
845,229 |
853,676 |
|
| CURRENT
ASSETS |
|
|
|
|
| Stores
and spares |
|
|
8 |
101,681 |
102,559 |
|
| Stock-in-trade |
|
|
|
9 |
206,949 |
238,126 |
|
| Trade debts |
|
|
|
10 |
109,535 |
95,618 |
|
| Loans,
advances and other receivables |
|
11 |
18,128 |
18,171 |
|
| Deposits
and prepayments |
|
|
12 |
6,823 |
5,960 |
|
| Taxation - net |
|
|
|
13 |
45,118 |
37,368 |
|
| Cash
and bank balances |
|
|
14 |
10,499 |
18,503 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
498,733 |
516,305 |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
ASSETS |
|
|
|
1,343,962 |
1,369,981 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| EQUITY
AND LIABILITIES |
|
|
|
