| Clover Pakistan Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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|
| Company
Information |
|
|
| Notice
of Meeting |
|
| Directors' Report |
|
|
| Auditors' Report |
|
|
| Balance Sheet |
|
| Profit
& Loss Account |
|
| Statement
of Changes in Financial Position (Cash Flow Statement) |
|
| Notes
to the Accounts |
|
| Pattern
of Holding of Shares |
|
|
|
| Company
Information |
|
|
| BOARD
OF DIRECTORS |
|
|
| IQBALALI
LAKHANI |
|
Chairman |
|
| ZULFIQARALI
LAKHANI |
|
Chief Executive |
|
| AMIN
MOHAMMED LAKHANI |
|
| TASLEEMUDDIN
AHMED BATLAY |
|
| A.
AZIZ EBRAHIM |
|
| RAMZANALI
HALANI |
|
| M.A. QADIR |
|
|
| ADVISOR |
|
| SULTANALl
LAKHANI |
|
|
| COMPANY
SECRETARY |
|
| RAMZANALI
HALANI |
|
|
| AUDITORS |
|
| EBRAHIM
& CO. |
|
| Chartered
Accountants |
|
|
| REGISTERED
OFFICE |
|
| LAKSON
SQUARE, BUILDING NO. 2 |
|
| SARWAR
SHAHEED ROAD |
|
| KARACHI-74200 |
|
|
| FACTORY |
|
| B-182,
HUB INDUSTRIAL TRADING ESTATE |
|
| HUB,
DISTRICT LASBELLA |
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| BALUCHISTAN |
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|
|
|
| Notice
of Meeting |
|
|
| NOTICE
IS HEREBY GIVEN that the 13th Annual General Meeting of CLOVER PAKISTAN
LIMITED |
|
| will
be held at Avari Renaissance Towers Hotel, Fatima Jinnah Road, Karachi on
Friday, November |
|
| 19,1999
at 10.00 a.m. to transact the following business' |
|
|
| 1.
To receive, consider and adopt the audited Balance Sheet and Profit and Loss
Account of the |
|
| Company
for the year ended June 30, 1999 together with the reports of the Directors
and |
|
| Auditors
thereon. |
|
|
| 2.
To declare a dividend. |
|
|
| 3.
To appoint Auditors and fix their remuneration. |
|
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| 4.
To transact any other business of the Company with the permission of the
Chair. |
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|
|
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|
By order of the Board |
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|
RAMZANALI HALANI |
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| Karachi:
October 15,1999 |
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|
Director/Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The share transfer books of the Company will remain closed from November
06,1999 to |
|
| November
19,1999, both days inclusive. Transfers received in order at the Company's |
|
| registered
office situated at Lakson Square, Building No. 2, Sarwar Shaheed Road,
Karachi |
|
| upto
November 05, 1999 will be considered in time for entitlement of the dividend
to the |
|
| transferees. |
|
|
|
|
|
| 2.
A member entitled to attend and vote at the general meeting is entitled to
appoint a proxy to |
|
| attend
instead of him and such proxy will have the right to attend, speak and vote
in place of |
|
| the
member. The proxy must be a member of the Company. |
|
|
|
|
| 3.
Forms of proxy to be valid must be received at the Company's registered
office 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. |
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|
|
| Directors
Report |
|
|
| The
directors of your Company present the annual audited accounts for the year
ended June 30, 1999 |
|
| together
with their report on the operation of the Company during the year. |
|
|
| OPERATING
RESULTS |
|
| The
Company has achieved gross sales of Rs. 54.929 million during the period
under review as compared |
|
| to
Rs. 46.727 million in the previous year, showing an increase by 17.55%
compared to the last year. The |
|
| net
revenue comprises of Rs. 41.565 million for sales of food products and Rs.
6.569 million for plastic |
|
| products. |
|
|
| The
Company imported Lacnor Juices
during the year under review. This provided some improvement in |
|
| the
sales of the Company as well as profitability. The net profit before tax
stood at Rs. 5.456 million during |
|
| the
period under review as compared to Rs. 2.867 million earned in the
corresponding period of the preceding |
|
| year. |
|
|
| FUTURE
PLANS |
|
|
| Besides
improving the business of TANG through greater market penetration, the
Company is actively |
|
| pursuing
plans to promote the existing imported Food Products range like Juices,
Flavored milk etc. The |
|
| Company
is still confronted with the menace of the availability of the smuggled
version of Tang, which is |
|
| impacting
our business very considerably. Efforts are being made to still widen the
distribution coverage to |
|
| offset
trade resistance in the face of the smuggled competing products. Customer
psyche continued to be |
|
| in
favour of imported products, which were also available at lower prices due to
underpricing as a result of |
|
| smuggling. |
|
|
| PROSPECTS |
|
|
| In
addition to consolidation of food product items through an extended
distribution network and introduction |
|
| of
imported items, the Company is planning to expand its plastic business. |
|
|
| YEAR
2000 COMPLIANCE |
|
|
| We
are pleased to Confirm that all the Computer Hardware, systems and programmes
have been updated |
|
| to
comply with Y2K requirements. Third parties' confirmations have also been
obtained and where necessary |
|
| alternate
sources have been lined up. |
|
|
| AUDI TO R S |
|
|
| Messrs
Ebrahim & Co, Chartered Accountants, retire and being eligible have
offered themselves for re- |
|
| appointment. |
|
|
| INDUSTRIAL
RELATIONS |
|
|
| The
Directors wish to place on record their appreciation of the loyal and devoted
services rendered by the |
|
| employees
of the Company. |
|
|
| PATTERN
OF SHAREHOLDING |
|
|
| The
pattern of shareholding in the prescribed form appears on page No. 24 |
|
|
|
|
On behalf of the Board of Directors |
|
|
|
|
|
|
|
|
|
IQBALALI LAKHANI |
|
| Karachi:
October 15, 1999 |
|
Chairman |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of CLOVER PAKISTAN
LIMITED as at June 30, 1999 |
|
| and
the related profit and loss account and statement of changes in financial
position, 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 accounts 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 accounts and are further in accordance with the 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
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 the |
|
| changes
in financial position for the year then ended; and |
|
|
| d)
in our opinion, zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was |
|
| deducted
by the Company and deposited in the Central Zakat Fund established under
section |
|
| 7
of that Ordinance. |
|
|
|
|
|
EBRAHIM & CO. |
|
| Karachi:
October 15, 1999 |
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at June 30, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
Notes |
Rupees |
Rupees |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
3 |
18,835,881 |
19,632,954 |
|
| LONG
TERM LOANS AND ADVANCES |
|
4 |
451,211 |
451,606 |
|
| LONG
TERM DEPOSITS |
|
|
|
| Security
deposits |
|
|
193,000 |
93,000 |
|
|
|
|
|
| LONG
TERM PREPAYMENT |
|
|
-- |
720,056 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores |
|
|
57,718 |
67,637 |
|
| Stock
in trade |
|
5 |
15,695,383 |
12,926,299 |
|
| Trade
debts |
|
6 |
13,522,957 |
12,877,468 |
|
| Loans and advances |
|
7 |
2,504,258 |
2,835,264 |
|
| Deposit and prepayments |
|
8 |
124,761 |
1,830,880 |
|
| Other
receivables |
|
9 |
1,238,056 |
1,333,122 |
|
| Cash
and bank balances |
|
10 |
1,299,906 |
1,185,184 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
34,443,039 |
33,055,854 |
|
| CURRENT
LIABILITIES |
|
|
|
|
| Short term loan |
|
|
-- |
12,121,909 |
|
| Short
term running finance |
|
11 |
6,500,266 |
377,399 |
|
| Creditors,
accrued and other liabilities |
|
12 |
8,198,472 |
6,949,839 |
|
| Dividend |
|
13 |
4,009,611 |
616,196 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
18,708,349 |
20,065,343 |
|
|
|
|
------------------ |
------------------ |
|
| Net
Current Assets |
|
15,734,690 |
12,990,511 |
|
|
|
------------------ |
------------------ |
|
|
|
35,214,782 |
33,888,127 |
|
|
|
|
========== |
========== |
|
|
| Financed by: |
|
|
|
| CAPITAL
AND RESERVE |
|
|
|
|
| Share Capital |
|
14 |
39,000,000 |
39,000,000 |
|
|
|
|
|
| Profit
and Loss Account |
|
|
|
|
|
| (Adverse
balance) |
|
|
(20,212,718) |
(21,521,873) |
|
|
|
|
------------------ |
------------------ |
|
| Shareholders'
equity |
|
|
|
18,787,282 |
17,478,127 |
|
|
|
|
|
| LONG
TERM LOANS |
|
15 |
16,025,000 |
16,025,000 |
|
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
16 |
402,500 |
385,000 |
|
|
|
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
17 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
35,214,782 |
33,888,127 |
|
|
|
|
|
========== |
========== |
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
ZULFIQARALI LAKHANI |
|
|
TASLEEMUDDIN A. BATLAY |
|
|
Chief Executive |
|
|
Director |
|
|
|
|
| Karachi:
October 15, 1999 |
|
|
|
|
|
|
|
|
| Profit
& Loss Account |
|
|
|
| FOR
THE YEAR ENDED JUNE 30,1999 |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
Notes |
Rupees |
Rupees |
|
|
|
|
| Sales
and services |
|
18 |
48,134,785 |
44,073,535 |
|
| Cost
of sales and services |
|
19 |
37,985,228 |
36,163,931 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
|
10,149,557 |
7,909,604 |
|
| Administrative
and selling expenses |
|
20 |
2,306,175 |
2,169,459 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
7,843,382 |
5,740,145 |
|
| Other income |
|
21 |
337,375 |
396,991 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
8,180,757 |
6,137,136 |
|
|
|
|
|
| Financial
charges |
|
22 |
2,437,746 |
3,119,415 |
|
| Workers'
profit participation fund |
|
|
287,151 |
150,886 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,724,897 |
3,270,301 |
|
|
|
|
------------------ |
------------------ |
|
| Net
profit for the year |
|
|
5,455,860 |
2,866,835 |
|
| Taxation |
|
23 |
246,705 |
263,903 |
|
|
|
|
------------------ |
------------------ |
|
| Net
profit after taxation |
|
|
5,209,155 |
2,602,932 |
|
| Appropriation |
|
|
|
| Proposed
final dividend @ 10% (1998 : 10%) |
|
|
3,900,000 |
489,300 |
|
|
|
|
------------------ |
------------------ |
|
| Net
profit after appropriation |
|
1,309,155 |
2,113,632 |
|
| Accumulated
(losses) brought forward |
|
(21,521,873) |
(23,635,505) |
|
|
|
------------------ |
------------------ |
|
| Accumulated
(losses) carried forward |
|
(20,212,718) |
(21,521,873) |
|
|
|
|
========== |
========== |
|
| Earnings
per share |
|
|
24 |
Rs. 1.34 |
Rs. 0.67 |
|
|
|
|
========== |
========== |
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
|
ZULFIQARALI LAKHANI |
|
|
TASLEEMUDDIN A. BATLAY |
|
|
Chief Executive |
|
|
Director |
|
|
| Karachi:
October 15, 1999 |
|
|
|
| Statement
of Changes in Financial Position (Cash Flow Statement) |
|
| FOR
THE YEAR ENDED JUNE 30,1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Net
profit for the year |
|
|
5,455,860 |
2,866,835 |
|
| Adjustment
for items not involving movement of funds: |
|
|
| Depreciation |
|
|
1,767,527 |
1,853,233 |
|
| Amortization
of long term prepayments and deferred cost |
|
720,056 |
1,067,272 |
|
|
|
------------------ |
------------------ |
|
|
|
7,943,443 |
5,787,340 |
|
|
|
|
|
| (Increase)/Decrease
in current assets |
|
|
| Stores |
|
9,919 |
2,852 |
|
| Stock in trade |
|
(2,769,084) |
621,709 |
|
| Trade debts |
|
(768,056) |
2,233,192 |
|
| Loans
and advances |
|
177,187 |
910,442 |
|
| Deposits
and prepayments |
|
1,706,119 |
79,612 |
|
| Other
receivables |
|
95,066 |
(89,857) |
|
|
|
------------------ |
------------------ |
|
|
|
(1,548,849) |
3,757,950 |
|
| Increase/(Decrease)
in current liabilities |
|
|
| Creditors,
accrued and other liabilities |
|
|
1,371,200 |
(4,678,304) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from operating activities before tax |
|
7,765,794 |
4,866,986 |
|
| Tax paid |
|
|
102,186 |
505,270 |
|
|
|
------------------ |
------------------ |
|
| Net
cash from operating activities |
|
7,663,608 |
4,361,716 |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Addition
to fixed assets |
|
|
(970,454) |
(25,000) |
|
| Long
term loans and advances |
|
|
9,695 |
(72,430) |
|
| Payment
of long term deposit |
|
|
(100,000) |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from investing activities |
|
|
|
(1,060,759) |
(97,430) |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Receipt
of long term security deposit |
|
|
17,500 |
7,500 |
|
| Repayment
of long term loans |
|
|
|
-- |
(1,083,000) |
|
| Payment
of short term loan |
|
|
(12,121,909) |
-- |
|
| Dividend. paid |
|
|
|
(506,585) |
(504,931) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from financing activities |
|
|
(12,610,994) |
(1,580,431) |
|
|
|
|
------------------ |
------------------ |
|
| Net
increase in cash and cash equivalents |
|
|
(6,008,145) |
2,683,855 |
|
| Cash
and cash equivalents at beginning of the year |
|
|
807,785 |
(1,876,070) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at end of the year |
|
25 |
(5,200,360) |
807,785 |
|
|
|
|
|
|
========== |
========== |
|
|
|
ZULFIQARALI LAKHANI |
|
|
TASLEEMUDDIN A. BATLAY |
|
|
Chief Executive |
|
|
Director |
|
|
| Karachi:
October 15, 1999 |
|
|
|
| Notes
to the Accounts |
|
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
| 1.
NATURE AND STATUS OF BUSINESS |
|
| The
Company was incorporated in Pakistan on September 30, 1986 as a public
limited |
|
| company
under the Companies Ordinance, 1984 and is quoted on the Karachi and Lahore |
|
| Stock
Exchanges. The principal business of the Company is production and marketing
of |
|
| foods,
plastic and other products. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
| 2.1
Cost convention |
|
|
| These
accounts have been prepared under the historical cost convention without any |
|
| adjustments
for the effect of inflation or current values. |
|
|
| 2.2
Staff retirement benefits |
|
|
|
|
| A
recognised provident fund scheme is in operation which covers all permanent |
|
| employees.
Equal contributions are made by the Company and the employees. |
|
|
|
|
| 2.3 Taxation |
|
|
|
|
|
| Provision
for current taxation is the higher of the amount computed on taxable income |
|
| at
the current tax rates after taking into account tax rebates, if any, and
minimum tax |
|
| computed
at the prescribed rates on net sales and services. |
|
|
| The
Company accounts for deferred taxation for all material timing differences to
the |
|
| extent
that liabilities can be estimated for foreseeable future. The amount is
computed |
|
| using
the liability method. Debit balances on account of deferred taxation are
recognized |
|
| only
if there is reasonable certainty of realisation. |
|
|
| 2.4 Tangible fixed assets |
|
|
| These
are stated at cost less accumulated depreciation except freehold and
leasehold |
|
| land
which are stated at cost. |
|
|
|
|
| Depreciation
is charged using the reducing balance method by applying rates specified |
|
| in
the relevant note. |
|
|
|
|
| Maintenance
and normal repairs are charged to income as and when incurred while |
|
| cost
of major replacements and improvements, if any, are capitalised. |
|
|
|
|
| Gains/losses
on disposal of fixed as sets are included in current income. |
|
|
| 2.5 Stores |
|
| Stores
are valued at moving average cost. |
|
|
| 2.6
Stock in trade |
|
| These
are valued at lower of cost and net realisable value. |
|
| Cost
is determined as follows: |
|
|
| Raw
and packing material |
|
-- Moving average cost |
|
|
|
|
| Raw
and packing material |
|
-- Invoice value plus other
charges paid |
|
| in
bonded warehouse |
|
thereon |
|
|
|
|
| Work
in process and |
|
-- Material as above plus
proportionate |
|
| finished goods |
|
|
overheads. |
|
|
|
|
| Trading goods |
|
|
-- First in first out basis |
|
|
|
|
| Net
realisable value represents estimated selling prices in the ordinary course
of |
|
| business
less cost necessarily to be incurred to make the sale. |
|
|
| 2.7 Trade debts |
|
|
| Debts
considered irrecoverable are written off and provisions are made against
those |
|
| having
no activity during the current financial year and which are considered
doubtful. |
|
|
| 2.8
Rate of exchange |
|
|
| Assets
and liabilities in foreign currency, if any, are translated into rupees at
the exchange |
|
| rate
prevailing on the balance sheet date except those covered by forward exchange |
|
| contracts
or where exchange risk cover has been obtained. Exchange differences on |
|
| transactions
during the year are recognised in income currently. |
|
|
|
|
| 2.9
Revenue recognition |
|
|
|
|
| Sales
are recorded on despatch of goods to customers. Income on investments is |
|
| recognised
on receipt basis. |
|
|
| 3.
TANGIBLE FIXED ASSETS |
|
|
|
|
|
COST |
|
DEPRECIATION |
|
|
|
Written down |
|
| PARTICULARS |
|
as at |
|
as at |
Rate |
as at |
for the |
as at |
value as at |
|
|
|
July 01, |
Additions |
June 30, 1999 |
% |
July 01, |
year |
June 30, 1999 |
June 30, |
|
|
|
1998 |
|
|
|
1998 |
|
|
1999 |
|
|
| Freehold land |
|
1,636,307 |
-- |
1,636,307 |
-- |
-- |
-- |
-- |
1,636,307 |
|
| Leasehold land |
|
1,512,016 |
-- |
1,512,016 |
-- |
-- |
-- |
-- |
1,512,016 |
|
| Building
on leasehold land |
10,540,551 |
-- |
10,540,551 |
10 |
6,113,607 |
442,694 |
6,556,301 |
3,984,250 |
|
| Plant
and machinery |
24,951,064 |
857,554 |
25,808,618 |
10 |
14,211,786 |
1,159,683 |
15,371,469 |
10,437,149 |
|
| Electric
fittings and installation |
2,372,151 |
-- |
2,372,151 |
10 |
1,365,666 |
100,649 |
1,466,315 |
905,836 |
|
| Office
and electric equipments |
118,409 |
14,400 |
132,809 |
15 |
51,540 |
12,190 |
63,730 |
69,079 |
|
| Tools
and equipments |
701,186 |
98,500 |
799,686 |
15 |
499,387 |
45,045 |
544,432 |
