| Searle Pakistan Limited |
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| Annual
Report 1999 |
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| Contents |
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| Searle
Pakistan Limited |
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| Company
Information |
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|
| Notice
of Meeting |
|
| Directors'
Report |
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|
| Financial
Highlights |
|
|
| Auditors'
Report to the Members |
|
|
| Balance Sheet |
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|
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| Profit
and Loss Account |
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|
| Cash
Flow Statement |
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| Notes
to the Accounts |
|
|
| Statement
Under Section 23 7(1) (e) |
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| of
the Companies Ordinance 1984 |
|
| Pattern
of Shareholding |
|
| Statistical
Summary |
|
|
|
| IBL
HealthCare (Pvt) Limited-Subsidiary Company |
|
| Company
Information |
|
|
| Directors'
Report |
|
|
| Auditors'
Report to the Members |
|
|
| Balance Sheet |
|
|
|
| Profit
and Loss Account |
|
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
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|
|
| Consolidated
Accounts of Searle and its Subsidiary: |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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|
|
| Profit
and Loss Account |
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|
| Cash
Flow Statement |
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|
| Notes
to the Accounts |
|
|
|
|
| Company
Information |
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|
| BOARD
OF DIRECTORS |
Rashid Abdulla |
|
Chairman |
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|
Tariq Ismail |
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Chief Executive |
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|
Khalid Malik |
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|
Imtiaz Agboatwala |
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|
Chishty Mujahid |
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|
Mushtaq Abdulla |
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|
A.W. Rahi |
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| COMPANY
SECRETARY |
Imtiaz Agboatwala |
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|
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| AUDITORS |
|
Khalid Majid Husain
Rehman |
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| BANKERS |
|
American Express Bank
Ltd. |
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|
Faysal Bank Ltd. |
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|
Habib Bank Ltd. |
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|
Muslim Commercial Bank
Ltd. |
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|
Societe Generale |
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Standard Chartered Bank |
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The Bank of
Tokyo-Mitsubishi Ltd. |
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| REGISTERED
OFFICE |
First Floor, N.I.C.,
Building, Abbasi Shaheed Road, |
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|
Off: Shahrah-e-Faisal,
Karachi. |
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| FACTORY |
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F-319, S.I.T.E., Karachi. |
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| REGISTRAR |
|
Gangjees Computer
Services |
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|
Room No. 513, 5th Floor,
Clifton Centre, Kehkashan, |
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|
Block-5, Clifton, |
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|
Karachi-75600 |
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| Notice
of Annual General Meeting |
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| Notice
is hereby given that the Thirty-fourth Annual General Meeting of the
shareholders of Searle Pakistan |
|
| Limited
will be held at 5.15 p.m. on Friday, December 31, 1999 at the Raffia Choudri
Memorial Centre, |
|
| Sidco
Avenue Centre, Ground Floor, 264 R.A. Lines, Karachi, to transact the
following business. |
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| ORDINARY
BUSINESS |
|
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| 1.
To confirm the minutes of the last Annual General Meeting held on February
27, 1999. |
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|
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| 2.
To receive, consider and adopt the Audited Accounts together with Directors'
and Auditors' |
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| Reports
thereon for the year ended June 30, 1999. |
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|
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| 3.
To approve the cash dividend of Rs. 1.00 per share of Rs. 10/- each as
recommended by the |
|
| Board
of Directors. |
|
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| 4.
To appoint Auditors and fix their remuneration. The present Auditors M/s.
Khalid Majid Husain |
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| Rehman,
Chartered Accountants, being eligible, offer themselves for re-appointment. |
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| SPECIAL
BUSINESS |
|
|
| 5.
To approve the issue of bonus shares in the ratio of 1-share for every
10-shares held (10%) |
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| as
recommended by the Board of Directors and, if thought fit, to pass with or
without modification |
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| (s)
the following resolution as an Ordinary Resolution. |
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|
| "RESOLVED
that a sum of Rs. 15,748,920/- out of the unappropriated
profits of the Company |
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| be
capitalised and applied towards the issue of 1,574,892 ordinary shares of Rs.
10/- each and allotted |
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| as
fully paid bonus shares to the members who are registered in the books of the
Company |
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| as
at December 23,1999, in the proportion of 1-share for every 10-shares held
and that such new |
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| shares
shall rank pari passu with the existing ordinary shares but shall not be
eligible for |
|
| the
dividend declared for the year ended June 30, 1999. |
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| FURTHER
RESOLVED that in the event of any shareholder holding less
than 10-shares or a number |
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| of
shares which is not an exact multiple of 10, the Directors be and are hereby
authorised |
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| to
consolidate such fractional entitlements into whole shares and sell such
shares in the Stock |
|
| Market
and to pay the proceeds of the sale when realised to a recognised charitable
institution as may |
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| be
selected by the Directors of the Company. |
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|
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|
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| FURTHER
RESOLVED that the Chief Executive and/or the Company
Secretary be and |
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| are
hereby authorised to take all necessary steps on behalf of the Company." |
|
|
| 6.
To transact any other business with the permission of the Chair. |
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|
By order of the Board |
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|
IMTIAZ AGBOATWALA |
|
| Karachi:
December 10, 1999 |
|
Company Secretary |
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|
| NOTES: |
|
|
| 1.
The Share Transfer Books of the Company will remain closed from December 24,
1999 to December 31, 1999 (both days inclusive). |
|
|
| 2.
A member entitled to attend, speak and vote at the Annual General Meeting may
appoint a proxy to attend, speak and vote on |
|
| his/her
behalf. A proxy need not be a member of the Company. |
|
|
| 3.
Proxies must be received by the Company not less than 48 hours before the
Annual General Meeting. |
|
|
| 4.
Shareholders are requested to intimate any changes in address immediately to
our Registrar, Gangjees Computer Services, Room No. 513, |
|
| 5th
floor, Clifton Centre, Kehkashan, Block-5, Clifton, Karachi-75600. |
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|
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| 5.
CDC shareholders desiring to attend the meeting are requested to bring their
original National Identity Cards, Account and Participant's ID |
|
| number,
for identification purpose, and in case of proxy, to enclose an attested copy
of his/her National Identity Card. |
|
|
| STATEMENT
U/S 160 OF THE COMPANIES ORDINANCE, 1984 |
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| Item 5 |
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| In
the opinion of the Directors' the financial position of the Company justifies
a bonus issue in the ratio of l-share for every 10-shares held i.e. 10%. |
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| The
Directors are interested in this business only to the extent of their
entitlement to bonus shares as shareholders. |
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|
|
| Directors'
Report |
|
|
| It
gives me great pleasure to welcome you to the 34th Annual General Meeting. |
|
|
| The
Directors have pleasure in submitting their report together with the audited
accounts of the Company |
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| for
the year ended June 30, 1999. |
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|
| FINANCIAL
RESULTS |
|
Rs. (000) |
|
|
| Net
profit for the year before taxation |
|
25,819 |
|
| Taxation |
|
|
|
18,427 |
|
|
|
|
------------------ |
|
| Profit
after taxation |
|
|
7,392 |
|
| Unappropriated
profit brought forward |
|
9,951 |
|
|
|
|
------------------ |
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| Profit
available for appropriation |
|
|
17,343 |
|
|
|
|
|
|
| Appropriations: |
|
|
|
|
|
| -
Transfer from general reserve |
|
|
(15,749) |
|
| -
Cash dividend @ 10% |
|
|
15,749 |
|
| -
Bonus shares @ 10% |
|
|
15,749 |
|
|
|
|
------------------ |
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|
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|
15,749 |
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|
|
|
------------------ |
|
| Unappropriated
profit carried forward |
|
1,594 |
|
|
|
|
========== |
|
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| REVIEW
OF OPERATIONS |
|
| The
net sales of your Company were Rs. 845.8 million for the year under review
registering a modest increase |
|
| over
the previous year. This was essentially due to the fact that operating
conditions during the year were |
|
| considerably
more difficult then they were in the years gone by, leading to the present
position. Nevertheless, |
|
| your
Company continued to plan actively for the future and inspite of adverse
economic conditions has |
|
| launched
some new products which we know have real growth potential in the future.
Some of the most |
|
| prominent
products being: |
|
|
| 1)
Hydryllin Anti Flu Tablets |
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| 2) Fraxiparine |
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| 3) Tramal SR |
|
| 4) Respro SR |
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| 5) Norflex |
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| 6) Neulin SR |
|
|
| Profit
before tax was Rs. 25.819 million which was expected in the absence of a
price increase from the |
|
| Ministry
of Health and which is now having a very significant negative impact on the
profitability of the |
|
| company.
As all of you are aware, no price increase has been granted for practically
three years and the results |
|
| of
this are obviously visible. Nonetheless, we continue to be optimistic and
hope that the Government |
|
| will
once again urgently look at the price increase issue and assist the industry
in getting out of its present |
|
| turmoil.
With every passing day, this issue assumes greater importance and we on our
part hope fervently |
|
| that
the price increase comes through at the earliest as our ability to continue
operating profitably will |
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| become
more and more difficult if this does not happen soon. |
|
|
| Nonetheless
through focused effort and high quality work by all employees of your
company, we have |
|
| managed
to show progress and continue to be in the 10 top companies in the
Pharmaceutical Industry. We |
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| assure
you, we will perform in a manner, which we hope will lead to even better
results in future. |
|
|
| YEAR
2000 COMPLIANCE: |
|
| The
Company has examined all hardware and software in use and ensured that none
of these will be affected |
|
| by
the millennium bug. Your company is not dependent on any single major
supplier. However, suppliers |
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| have
been asked to ensure that their systems will continue to work smoothly in the
year 2000. |
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|
| DIRECTORS |
|
| We
welcome Mr. Mushtaq Abdulla and Mr. A. W. Rahi as Directors, elected in place
of retiring Directors, |
|
| Mr.
Arshad Abdulla and Mr. Shahid Abdulla. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| The
pattern of holding of shares is shown on page 37. |
|
|
| AUDITORS |
|
| The
retiring auditors, Messrs. Khalid Majid Husain Rehman, Chartered Accountants
being eligible, offer |
|
| themselves
for re-appointment. |
|
|
| On
behalf of the Board of Directors, I would like to take this opportunity of
placing on record my deep |
|
| appreciation
to the staff and management of your Company for their efforts, dedication and
loyalty which |
|
| made
these results possible. |
|
|
| Karachi: |
|
|
TARIQ ISMAIL |
|
| December
2, 1999 |
|
Chief Executive |
|
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Searle Pakistan 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 purposes 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 the company's affairs as at June 30, 1999 and of the profit
and the cash flows |
|
| 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. |
|
|
| December
3, 1999 |
|
|
Khalid Majid Husain Rehman |
|
| Karachi. |
|
|
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at June 30, 1999 |
|
|
|
Note |
1999 |
1998 |
|
|
|
Rs. '000 |
Rs. '000 |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
capital |
|
|
|
| 20,000,000
(1998: 20,000,000) |
|
|
|
| ordinary
shares of Rs. 10 each |
|
|
200,000 |
200,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Issued,
subscribed and paid-up capital |
|
3 & 4 |
157,490 |
139,991 |
|
|
|
|
|
| General reserve |
|
4 |
144,251 |
160,000 |
|
| Reserve
for issue of bonus shares |
|
4 |
15,749 |
17,499 |
|
| Unappropriated
profit |
|
|
1,594 |
9,951 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
319,084 |
327,441 |
|
|
|
|
| DEFERRED
INCOME |
|
5 |
3,332 |
3,703 |
|
| LONG-TERM
FINANCE. |
|
6 |
271,253 |
195,000 |
|
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
|
| TO
FINANCE LEASES |
|
7 |
39,615 |
48,168 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
| Deferred
taxation |
|
8 |
12,132 |
317 |
|
| Staff
retirement gratuity |
|
9 |
3,996 |
3,002 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
16,128 |
3,319 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
maturity of long-term finance |
|
6 |
17,438 |
65,000 |
|
| Current
maturity of liabilities against |
|
|
|
| assets
subject to finance leases |
|
7 |
19,467 |
20,829 |
|
| Short-term
finances |
|
10 |
60,000 |
108,058 |
|
| Running
finances under mark-up arrangements |
|
11 |
196,487 |
171,180 |
|
| Creditors,
accrued expenses and other liabilities |
|
12 |
243,554 |
202,065 |
|
| Proposed
dividend |
|
|
15,749 |
17,499 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
552,695 |
584,631 |
|
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
13 |
------------------ |
------------------ |
|
|
|
1,202,107 |
1,162,262 |
|
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
assets |
|
14 |
185,915 |
193,500 |
|
| Capital
work-in-progress |
|
15 |
38,002 |
41,674 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
223,917 |
235,174 |
|
|
|
|
|
| INTANGIBLE
FRED ASSETS |
|
|
|
|
|
16 |
95,749 |
40,699 |
|
| LONG-TERM
INVESTMENT |
|
|
|
|
|
|
17 |
200,000 |
200,000 |
|
| LONG-TERM
LOANS |
|
|
|
|
|
18 |
1,494 |
1,946 |
|
| LONG-TERM
DEPOSITS |
|
|
|
|
|
|
8,224 |
8,251 |
|
| CURRENT
ASSETS |
|
|
|
| Stocks |
|
19 |
136,526 |
113,206 |
|
| Stores
and spares |
|
|
7,180 |
8,427 |
|
| Trade debts |
|
20 |
388,951 |
306,707 |
|
| Short-term
loans and advances |
|
21 |
6,505 |
47,631 |
|
| Deposits,
prepayments and other receivables |
|
22 |
47,219 |
72,778 |
|
| Taxation |
|
|
79,476 |
37,564 |
|
| Cash
and bank balances |
|
23 |
6,866 |
89,879 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
672,723 |
676,192 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
1,202,107 |
1,162,262 |
|
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
TARIQ ISMAIL |
|
RASHID ABDULLA |
|
|
Chief Executive |
|
Director |
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
Note |
1999 |
1998 |
|
|
|
Rs.'000 |
Rs.'000 |
|
|
|
|
|
| Net sales |
|
|
24 |
845,867 |
823,590 |
|
| Cost of goods sold |
, |
|
25 |
546,797 |
522,837 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
|
299,070 |
300,753 |
|
|
|
|
|
| Marketing
expenses |
|
27 |
174,412 |
141,717 |
|
| Administration
expenses |
|
28 |
25,592 |
21,072 |
|
| Amortisation
of intangible fixed assets |
|
|
9,950 |
11,898 |
|
| Research
and development expenditure |
|
|
82 |
280 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
210,036 |
174,967 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
|
89,034 |
125,786 |
|
|
|
|
| Other income |
|
29 |
48,302 |
55,702 |
|
|
|
|
------------------ |
------------------ |
|
|
|
137,336 |
181,488 |
|
|
|
|
| Financial
charges |
|
30 |
105,850 |
96,913 |
|
| Other charges |
|
|
31 |
5,667 |
10,200 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
111,517 |
107,113 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
25,819 |
74,375 |
|
| Taxation |
|
32 |
18,427 |
33,520 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
7,392 |
40,855 |
|
| Unappropriated
profit brought forward |
|
|
9,951 |
14,094 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
17,343 |
54,949 |
|
|
|
|
| Appropriations: |
|
|
|
| Transfer
(from)/to general reserve |
|
|
(15,749) |
10,000 |
|
| Proposed
dividend @ 10% (1998: @ 12.5%) |
|
15,749 |
17,499 |
|
| Transfer
to reserve for issue of bonus shares |
|
15,749 |
17,499 |
|
|
|
------------------ |
------------------ |
|
|
|
15,749 |
44,998 |
|
|
|
------------------ |
------------------ |
|
| Unappropriated.
profit carried forward |
|
1,594 |
9,951 |
|
|
|
========== |
========== |
|
| Earnings
per share |
|
|
33 |
0.47 |
2.59 |
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
TARIQ ISMAIL |
|
|
RASHID ABDULLA |
|
|
Chief Executive |
|
|
Director |
|
|
|
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION (CASH FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
Note |
1999 |
1998 |
|
|
|
Rs.'000 |
Rs.'000 |
|
|
|
|
| Cash
flow from operating activities |
|
|
|
|
|
| Cash
generated from operations |
|
34 |
93,380 |
197,137 |
|
| Gratuity paid |
|
|
(7) |
(275) |
|
| Taxes paid |
|
|
(48,524) |
(42,788) |
|
| Net
recovery of long-term loans |
|
|
452 |
(123) |
|
| Net
receipts of long-term deposits |
|
|
27 |
1,090 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
|
45,328 |
155,041 |
|
|
|
|
| Cash
flow from investing activities |
|
|
| Fixed
capital expenditure |
|
(8,021) |
(7,202) |
|
| Acquisition
of intangible fixed assets |
|
(65,000) |
-- |
|
| Investment
in a wholly owned subsidiary |
|
-- |
(200,000) |
|
| Sale
proceeds on disposal of fixed assets |
|
473 |
1,044 |
|
| Financial
income received |
|
77,071 |
18,877 |
|
| Exchange gain |
|
|
1,130 |
4,204 |
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow / (outflow) from investing activities |
|
5,653 |
(183,077) |
|
|
|
|
|
| Cash
flow from financing activities |
|
|
| Liabilities
against assets subject to finance leases |
|
|
(13,977) |
(16,702) |
|
| Dividend paid |
|
|
(18,408) |
(16,754) |
|
| Long-term
finance obtained |
|
|
28,691 |
100,000 |
|
| Financial
charges paid |
|
|
(107,549) |
(68,709) |
|
| Short-term
finances repaid |
|
|
(48,058) |
28,051 |
|
|
|
|
------------------ |
------------------ |
|
