| Ghandhara Industries Limited |
|
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|
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|
| Annual
Report 1999 |
|
| (Formerly
National Motors Limited) |
|
| A
Bibojee Group Company |
|
|
|
|
| CONTENTS |
|
|
| BOARD
OF DIRECTORS |
|
| NOTICE
OF MEETING |
|
| ABOUT
THE COMPANY |
|
| CHAIRMAN'S
REVIEW |
|
| REPORT
OF THE DIRECTORS |
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| CASH
FLOW STATEMENT |
|
| NOTES
TO THE ACCOUNTS |
|
| PATTERN
OF SHAREHOLDINGS |
|
| SUBSIDIARY
COMPANY: |
|
| MARGHZAR
INDUSTRIES (PRIVATE) LIMITED |
|
|
| CONSOLIDATED
FINANCIAL STATEMENTS |
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| BALANCE
SHEET |
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| CASH
FLOW STATEMENT |
|
|
| NOTES
TO THE ACCOUNTS |
|
| FORM
OF PROXY |
|
|
|
|
| BOARD
OF DIRECTORS |
|
|
| Mr.
Raza Kuli Khan Khattak |
|
Chairman |
|
| Mr.
Ahmad Kuli Khan Khattak |
Chief Executive |
|
| Mr.
Mushtaq Ahmed Khan |
|
| Dr.
Adil Sultan Mufti |
|
| Dr.
Parvez Hassan |
|
| Ch.
Sher Mohammad |
|
| Mr.
Rashidullah Yakoob |
|
| Mr.
M. Sadiq Sheikh |
|
| Mr.
M. Asif Dar |
|
|
| SECRETARY |
|
| Mr.
M.R. Banka |
|
|
| AUDITORS |
|
| Hameed
Chaudhri & Co. |
|
| Chartered
Accountants |
|
|
| LEGAL
ADVISORS |
|
| Syed
Iqbal Ahmed Barrister at law |
|
| Jawaid
Law Associates (Tax) |
|
| Syed
Qamruddin Hassan |
|
|
| BANKERS |
|
| National
Bank of Pakistan |
|
| Habib
Bank Limited |
|
| United
Bank Ltd. |
|
| Allied
Bank of Pakistan Ltd. |
|
| Muslim
Commercial Bank Ltd. |
|
| Indus
Bank Ltd. |
|
|
| REGISTERED
OFFICE |
|
| Hub
Chowki Road |
|
| S.I.T.E. |
|
| Post
Box No. 2706 |
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| Karachi-75730 |
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|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the 36th Annual General Meeting of the Company will be
held |
|
| on
Wednesday the 29th December, 1999 at 09:00 A.M. at Ghandhara Industries
Limited |
|
| (Formerly
National Motors Limited), Hub Chauki Road, S.I.T.E., Karachi to transact the |
|
| following
business: |
|
|
| 1.
ORDINARY BUSINESS |
|
|
| i)
To confirm the minutes of the 35th Annual General Meeting held on 31 st
December, |
|
| 1998. |
|
|
| ii)
To receive and adopt the audited accounts of the Company for the year ended
June |
|
| 30,
1999 together with Directors' and Auditors' reports thereon. |
|
|
| iii)
To appoint auditors for the next financial year and fix their remuneration. |
|
|
| 2.
ANY OTHER BUSINESS |
|
| To
transact any other ordinary business of the Company with the permission of
the Chair. |
|
|
|
By order of the Board |
|
|
|
M. R. BANKA |
|
|
SECRETARY |
|
| KARACHI:
DECEMBER 06, 1999. |
|
|
| Note: |
|
| 1.
The Share Transfer Books of the Company will remain closed from December 21,
1999 |
|
| to
December 31, 1999, both days inclusive. |
|
| 2.
A member entitled to attend and vote at this meeting may appoint another
member as |
|
| his/her
proxy to attend the meeting arid vote for him/her. Proxies in order to be
effective |
|
| must
be received by the Company not less than 48 hours before the meeting. |
|
| 3.
Members are, requested to promptly notify the Company of any change in their
addresses. |
|
|
|
| THE
COMPANY |
|
|
| The
National Motors Limited is a public limited company quoted on the Stock
Exchanges and |
|
| registered
under the Companies Act, 1913 (now Companies Ordinance, 1984). It was
established |
|
| in
Karachi by General Motors Overseas Distribution Corporation of U.S.A. In 1963
Lt. Gen. |
|
| (Rtd.)
M. Habibullah Khan Khattak acquired these facilities from General Motors and
renamed |
|
| it
Ghandhara Industries Limited. The Government of Pakistan nationalized
Ghandhara Industries |
|
| in
1972 and renamed it National Motors Limited. In 1992 M/s. Bibojee Services
(Pvt) Ltd. |
|
| acquired
it under the Privatization Policy of the Government, and adopted its original
name |
|
| Ghandhara
Industries Limited w.e.f 27.11.1999. |
|
|
| The
major business activities of the company comprise of progressive manufacture,
assembly |
|
| and
marketing of Isuzu truck and bus chassis and fabrication of Bus and Load
bodies. In order |
|
| to
utilize idle plant capacity the company has plans for the assembly of Cars,
Vans, Pick-ups |
|
| and
Light commercial vehicles in addition to standard Isuzu trucks and buses. To
accomplish |
|
| its
mission the company has a country-wide dealers net work for marketing its
products. In |
|
| addition
the company represents its principals in Pakistan for other built up
products. |
|
| The
company has provided impetus to the local manufacture of engineering goods.
With the |
|
| introduction
of new models that compliments the Isuzu products, additional opportunities
are |
|
| being
availed to provide work for the company's in house manufacturing facilities
as well as |
|
| for
the vendors producing Isuzu parts locally. |
|
|
| In-house
facilities also include two assembly lines, a machine shop and a press shop.
Equipped |
|
| with
these facilities the plant is capable of producing about 2400 truck & bus
chassis and 2400 |
|
| LCVs
per annum on a single shift basis, depending on the business requirements.
Other avenues |
|
| are
also being explored to utilize the idle capacity of the plant as far as
possible. |
|
|
| LONG
B TERM OBJECTIVES |
|
| Maximize
the value of shareholders equity. |
|
| Create
an environment that assures national self-sufficiency in automobile industry. |
|
| Create
an environment that furthers healthy competition in the Automobile sector. |
|
|
| MAJOR
PRODUCTS |
|
| Isuzu
Truck Model FTR |
|
| Isuzu
Truck Model FVR/FVM |
|
| Isuzu
Truck Model NPR |
|
| Isuzu
Bus Model MT |
|
| Isuzu
Light Commercial Vehicles - KB Series |
|
| Isuzu
Bus / Load Body Fabrication |
|
|
| MAJOR
CUSTOMERS |
|
| Owner
Operators |
|
| Fleet Owners |
|
| Pakistan
Armed Forces |
|
| Civilian
and Paramilitary Law Enforcement Agencies |
|
| Government
& Semi-Government Organizations |
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| Transport
Authorities |
|
| Educational
Institutions |
|
| Health
Organizations |
|
| Public
Sector Companies |
|
| Private
Sector Companies |
|
| General
Public |
|
|
|
| CHAIRMAN'S
REVIEW |
|
|
| I
have pleasure in presenting the 36th Annual Report of your company for the
year ended June |
|
| 30, 1999. |
|
|
| Industry
Prospects. |
|
|
| I
regret to inform you that low sales volume continued to dominate the affairs
of the company |
|
| during
the year under review. As you are aware that your company can produce 5,000
trucks/buses |
|
| &
other light commercial vehicles in its plant and can meet the total demand of
the country. |
|
| However
due to inconsistent government policies accompanied by economic recession in
the |
|
| country
specially in automobile sector, the total demand of the trucks/buses in the
country has |
|
| drastically
dropped. Despite this the government is allowing setting up more truck/bus
assembly |
|
| plants
in the country. Further more the government has allowed the import of
built-up buses during |
|
| the
year despite protest from local assemblers. |
|
|
| The
State Bank policies for liquidity starved sick industrial unit is making a
sick unit more sick. |
|
|
| I
am confident that if banks are allowed to extend credit facilities to the
sick units with proper |
|
| monitoring
system, these units not only can survive but will contribute towards national
economy |
|
| and
employment opportunities. |
|
|
| 1.
Operating Results: |
|
|
| During
the year under review your company suffered after tax loss of Rs. 53.487
million mainly |
|
| due
to heavy financial charges and under utilization of the plant capacity. Our
sales at Rs. 223.362 |
|
| million
were higher by Rs. 39.942 million compared to last year. The company's
operating loss |
|
| reduced
to Rs. 12.379 million compared to loss of Rs. 17.693 million last year. |
|
|
| 2. Sales. |
|
|
| Inspire
of depressed market and unfavourable situation, the company managed to sell
vehicles |
|
| amounting
to Rs. 223.362 million during the year under review as compared to sales
amounting |
|
| to
Rs., 183.420 million last year. It sold trucks amounting to Rs. 83.762
million and buses |
|
| amounting
to Rs. 131.643 million. Auto spares and other sales amounted to Rs. 7.957
million. The |
|
| sales
of buses in total units was higher than trucks. |
|
|
| The
company continued to face liquidity problem and inadequate L/c. facilities.
Had the banks |
|
| provided
enhanced L/c. facilities' the company would have produced more units. |
|
|
| 3.
Production. |
|
|
| The
production of trucks & bus chassis remained restricted to non
availability of L/c. facilities |
|
| and
actual sales. We could have done better if banks had extended L/c.
facilities. |
|
|
| 4.
Labour Management Relations. |
|
|
| The
workers have extended as usual their cooperation and understanding to the
management. The |
|
| workers
& management relations have been very good and cordial. |
|
|
| 5.
Year 2000 Compliance of Computer System. |
|
|
| The
company is using P.C. based software system. We do not anticipate any problem
in compliance |
|
| of
Y2K requirements. |
|
|
| 6.
Future Outlook. |
|
|
| As
explained in the directors' report the implementation of the agreed financial
restructuring plan |
|
| requires
submission of property documents to the lead bank. Due to litigation on one
of our |
|
| properties,
the company is facing difficulty in completing this process. |
|
|
| The
depreciation of the Pak Rupees viz a viz Japanese Yen is causing increased
cost of production. |
|
|
| The
financial restructuring agreed by the banks provide a good opportunity to the
company to |
|
| improve
operating results. Further the government's economic policies will determine
the future |
|
| trend
in production/sales in automobile sector. |
|
|
| 7.
Acknowledgement. |
|
|
| I
am thankful for the efforts of the management, staff and workers who are
constantly working |
|
| hard
to turn-around the company in the difficult times. I am grateful to cur
vendors and suppliers |
|
| who
continued cooperating with us during all this difficult period. I would also
like to thank Isuzu |
|
| Motors
Limited and Itochu Corporation for their support and assistance. |
|
|
| One
again I thank you for reposing your confidence in the management. I pray to
Allah for guidance. |
|
|
|
RAZA KULI KHAN KHATTAK |
|
|
CHAIRMAN |
|
|
|
| REPORT
OF THE DIRECTORS |
|
|
| The
Directors of your Company take pleasure in presenting their 36th Annual
Report with audited |
|
| accounts
of the Company together with auditors' report thereon for the year ended June
30, 1999. |
|
|
| FINANCIAL
RESULTS |
|
|
| The
financial results for the year ended June 30, 1999 are summarized below: |
|
|
| (Rs.
in '000') |
|
| Loss
for the year |
|
(52,373) |
|
| Taxation |
|
(1,114) |
|
|
----------- |
|
| Loss
for the year after taxation |
|
(53,487) |
|
| Accumulated
loss brought forward |
|
(893,180) |
|
|
----------- |
|
| Accumulated
loss carried forward |
|
(946,667) |
|
|
========== |
|
| BASIS
OF ACCOUNTS |
|
|
| The
company has incurred a loss of Rs.53.487 million during the year and its
current liabilities |
|
| at
that date exceed its current assets by Rs.808.423 million. The losses are
mainly due to financial |
|
| expenses
and under utilization of plant capacity. |
|
|
| The
Bankers Committee for revival of sick units considered the case of the
company on 3rd July, |
|
| 1999
and has decided as under:- |
|
|
Rupees |
|
|
millions . |
|
| Relief
against outstanding |
|
| liabilities
(approximately) |
|
228 |
|
|
========== |
|
| Adjustment
of amount already paid |
|
30 |
|
| To'
be paid through sale of properties |
|
390 |
|
| To
be .paid in 20 quarterly installments with effect from |
|
| 1st
July, 2000 with mark up @ 39 paisas per Rs.l,000 per day |
|
100 |
|
|
---------- |
|
|
520 |
|
|
========== |
|
| The
company will create a charge on all project assets including investment
properties. The above |
|
| package
will be implemented through a court. decree. The package is at implementation
stage and |
|
| once
the package is implemented, the company will get substantial relief in the
interest cost. |
|
| The
company is considering to diversify its line to include Isuzu Light
Commercial Vehicles. The |
|
| additional
product line will help in utilization of idle capacity of the plant. |
|
|
| Keeping
in view the above facts, it is hoped that the company will continue as a
going concern. |
|
|
| FUTURE
OUTLOOK |
|
|
| The
Company is facing difficulties in implementing of restructuring plan approved
by the banks |
|
| this
year in July. The court case of properties are a big hindrance in submitting
certain documents |
|
| to
HBL the lead bank as required under the restructuring plan and to clear our
name from CIB. |
|
|
| The
Company can do much better if required banking facilities are available for
import of CKD. |
|
|
| YEAR
2000 COMPLIANCE OF COMPUTER SYSTEM |
|
| The
Company is using' PC based software system. We do not anticipate any problem
in |
|
| compliance
of Y2K requirement. |
|
|
| AUDITORS |
|
|
| The
present auditors M/s. Hameed Chaudhri & Co. retire and being eligible
have offered |
|
| themselves
for appointment as auditors for the year 1999-2000. |
|
|
| PATTERN
OF SHARE HOLDING |
|
|
| The
pattern of Shareholding as at June 30, 1999 is annexed. |
|
|
|
On behalf of the Board |
|
|
|
AHMAD KULI KHAN KHATTAK |
|
| December
06, 1999 |
|
Chief Executive |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of NATIONAL MOTORS LIMITED as at 30th |
|
| June,
1999, and the related Profit and Loss Account, 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 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, 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 30th |
|
| June,
1999 and of the Profit for the year then ended; and |
|
|
| (d)
in our opinion, no Zakat was deductible at source under Zakat and Ushr
Ordinance, 1980 |
|
|
| Without
qualifying our opinion, we draw attention to note 1 to the accounts. The
continuity of |
|
| the
company as a going concern is dependent upon successful implementation of
management's |
|
| plans. |
|
|
|
HAMEED CHAUDHRI & CO. |
|
| December
06, 1999 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30 JUNE 1999 |
|
|
|
Note |
1999 |
1998 |
|
|
|
( Rupees '000 ) |
|
| SHARE
CAPITAL & RESERVES |
|
|
| Authorised
Capital |
|
| 10,000,000
ordinary shares of Rs. 10/- each |
|
100,000 |
100,000 |
|
|
========== |
========== |
|
| Issued,
subscribed & paid up capital |
|
3 |
65,553 |
65,553 |
|
| Reserves |
|
|
|
|
| Capital
reserves |
|
4 |
40,800 |
40,800 |
|
| Revenue
reserve |
|
2,400 |
2,400 |
|
| Accumulated
loss |
|
(946,667) |
(893,180) |
|
|
---------- |
---------- |
|
|
(903,467) |
(849,980) |
|
|
---------- |
---------- |
|
|
(837,914) |
(784,427) |
|
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
|
723,364 |
723,364 |
|
|
|
| LONG
TERM LOANS & DEFERRED LIABILITY |
|
|
| Long
term loans - unsecured |
|
5 |
9,197 |
30,761 |
|
| Provision
for staff retirement gratuity |
|
|
8,755 |
8,788 |
|
|
|
---------- |
---------- |
|
|
|
17,952 |
39,549 |
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of long term loans |
|
|
22,081 |
2,000 |
|
| Short
term loan/running finances and borrowings |
6 |
558,910 |
497,550 |
|
| Creditors,
accrued & other liabilities |
|
7 |
447,206 |
441,418 |
|
|
---------- |
---------- |
|
|
1,028,197 |
940,968 |
|
| CONTINGENT LIABILITIES |
|
8 |
|
|
---------- |
---------- |
|
|
931,599 |
919,454 |
|
|
========== |
========== |
|
| TANGIBLE
FIXED ASSETS |
|
|
| Operating
fixed assets |
|
9 |
315,989 |
323,959 |
|
| Capital
work in progress |
|
320 |
54 |
|
|
| LONG
TERM INVESTMENTS |
|
|
| Investments
in subsidiary & other companies |
10 |
1,401 |
1,401 |
|
| Investment
in immovable properties |
|
11 |
389,567 |
390,803 |
|
|
---------- |
---------- |
|
|
390,968 |
392,204 |
|
|
| LONG
TERM LOANS AND ADVANCES |
|
12 |
13 |
15 |
|
|
|
| LONG
TERM DEPOSITS & DEFERRED COSTS |
|
|
| Deposits |
|
490 |
493 |
|
| Deferred
costs |
|
13 |
4,045 |
6,066 |
|
|
|
---------- |
---------- |
|
|
|
4,535 |
6,559 |
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares & tools |
|
14 |
1,586 |
1,802 |
|
| Stock
in trade |
|
15 |
116,331 |
160,351 |
|
| Trade debts |
|
16 |
17,677 |
3,297 |
|
| Loans,
advances, deposits & prepayments |
|
17 |
21,378 |
14,560 |
|
| Other
receivables |
|
18 |
10,046 |
9,099 |
|
| Cash
and bank balances |
|
19 |
52,756 |
7,554 |
|
|
---------- |
---------- |
|
|
219,774 |
196,663 |
|
|
---------- |
---------- |
|
|
931,599 |
919,454 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts |
|
|
| M.
ASIF DAR |
|
AHMAD KULI KHAN KHATTAK |
|
| Director |
|
Chief Executive |
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30 JUNE 1999 |
|
|
Note |
1999 |
1998 |
|
|
|
|
( Rupees '000 ) |
|
|
| Net sales |
|
20 |
223,362 |
183,420 |
|
| Cost of sales |
|
21 |
217,888 |
179,841 |
|
|
|
---------- |
---------- |
|
| Gross profit |
|
|
5,474 |
3,579 |
|
| Administration
and selling expenses |
|
22 |
(17,853) |
(21,272) |
|
|
|
---------- |
---------- |
|
| Operating
loss |
|
(12,379) |
(17,693) |
|
| Other
income |
|
23 |
1,946 |
3,471 |
|
|
|
---------- |
---------- |
|
|
|
(10,433) |
(14,222) |
|
| Other
expenses |
|
24 |
(8,090) |
0 |
|
| Financial
and other charges |
|
25 |
(33,850) |
(49,930) |
|
|
---------- |
---------- |
|
|
(41,940) |
(49,930) |
|
|
| Loss
before taxation |
|
(52,373) |
(64,152) |
|
| Taxation |
|
26 |
(1,114) |
(934) |
|
|
---------- |
---------- |
|
| Loss
after taxation |
|
(53,487) |
(65,086) |
|
| Accumulated
loss brought forward |
|
(893,180) |
(828,094) |
|
|
---------- |
---------- |
|
| Accumulated
loss carried forward |
|
(946,667) |
(893,180) |
|
|
========== |
========== |
|
| The
annexed notes from an integral part of these accounts. |
|
|
| M.
ASIF DAR |
|
AHMAD KULI KHAN KHATTAK |
|
| Director |
|
Chief Executive |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30 JUNE 1999 |
|
|
Note |
1999 |
1998 |
|
|
|
|
( Rupees '000 ) |
|
| Cash
flow from operating activities |
|
|
| Cash
generated from/used, in operations |
|
27 |
16,369 |
(19,719) |
|
| Staff gratuity |
|
(591) |
(53) |
|
| Interest paid |
|
(24,655) |
22,804 |
|
| Taxes paid |
|
(229) |
(400) |
|
| Long-term
loans and advances |
|
2 |
(3) |
|
|
----------- |
----------- |
|
| Net
Cash (outflow)/inflow from operating activities |
|
(9,104) |
2,629 |
|
| Cash
flow from investing activities |
|
| Fixed
capital expenditure |
|
(905) |
(260) |
|
| Capital
work in progress |
|
(266) |
(271) |
|
| Sale
proceeds of fixed assets |
|
1,627 |
626 |
|
| Interest
received |
|
577 |
249 |
|
| Deposits |
