| BERGER PAINTS PAKISTAN LIMITED |
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| 1996-97
REPORT & ACCOUNTS |
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| Contents |
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| Berger
Paints Pakistan Ltd. |
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| Notice
of Meeting |
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| Chairman's
Review |
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| Directors'
Report |
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| Auditors'
Report |
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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 |
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| Statement
Under Section 237(1)(e) of the |
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| Companies
Ordinance 1984 |
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| Pattern
of Shareholdings |
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| Ten
Years at a Glance |
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| J & N
Pakistan Limited - Subsidiary Company |
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| Directors'
Report |
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| Auditors'
Report |
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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 |
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| BOARD
OF DIRECTORS |
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| KASSIM
DADA, Chairman |
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| DR.
MAHMOOD AHMAD, Managing Director |
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| SIKANDER
DADA |
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| SHEIKH
AZHAR-UL-HAQ (N.I.T. Nominee) |
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| V.
K. CHADDA |
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| C.H.
CLOVER |
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| MUHAMMAD
ILYAS (Alternate Syed Mohammad) |
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| SECRETARY |
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| Syed
Mohammad |
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| BANKERS |
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| American
Express Bank Ltd. |
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| Credit
Agricole Indosuez |
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| Faysal
Bank Limited |
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| Habib
Bank Limited |
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| Habib
Credit & Exchange Bank Ltd. |
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| Hong
Kong and Shanghai Banking Corporation Ltd. |
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| National
Development Finance Corporation |
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| Oman
International Bank S.A.O.G. |
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| Schon
Bank Limited |
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| AUDITORS |
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| A.F.
Ferguson & Co. |
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| SOLICITORS |
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| Surridge
& Beecheno |
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| REGISTERED
OFFICE |
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| D-31,
South Avenue, |
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| S.I.T.E., |
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| Karachi., |
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| Telephone:
2573711-22 (12 Lines) |
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| 2560896-8 |
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| Telex:
29009 VITON PK |
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| Telefax:
(9221) 2561069, 2562090 |
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| Notice
of Meeting |
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| NOTICE
IS HEREBY GIVEN that the forty-seventh Annual General Meeting of Berger
Paints |
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| Pakistan
Limited will be held on Wednesday, November 12, 1997 at 10:00 a.m. at the
Overseas |
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| Investors
Chamber of Commerce & Industry, Chamber of Commerce Building, Talpur
Road, |
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| Karachi
to transact the following business. |
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| ORDINARY
BUSINESS |
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| 1.
To receive and consider the Audited Accounts of the Company for the year
ended June 30, |
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| 1997
and the Directors' and Auditors' Reports thereon. |
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| 2.
To approve dividend at Re. 1/- per share (10%) for the year ended June 30,
1997. |
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| 3.
To appoint Auditors and fix their remuneration. |
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| SPECIAL
BUSINESS: |
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| 1.
To approve the remuneration of the Chief Executive. |
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| 2.
To consider .making investment in the share capital of a Private Limited
Company to be |
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| formed. |
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| 3.
To approve the issue of bonus shares in the ratio of 1:10. |
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| Statement
under Section 160 of the Companies Ordinance, 1984, and Resolutions as |
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| required
under Section 164(1) of the Companies Ordinance, 1984, pertaining to the
Special |
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| Business
referred to above are annexed. |
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|
BY ORDER OF THE BOARD |
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| September
30, 1997 |
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SYED MOHAMMAD |
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|
Secretary |
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| Registered
Office: |
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| D-31,
South Avenue |
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| S.I.T.E., |
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| Karachi |
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| NOTES: |
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| 1.
The Share Transfer Books of the Company will remain closed from November 04,
1997 to |
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| November
12, 1997 (both days inclusive). |
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| 2.
A member of the Company entitled to attend, speak and vote at the meeting may
appoint |
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| another
member as his/her proxy to attend, speak and vote on his/her behalf. The com- |
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| pleted
proxy form must be received at the Registered Office of the Company not less
than |
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| 48
hours before the meeting. |
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| Statement
Under Section 160 of |
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| The
Companies Ordinance, 1984 |
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| 1.
Remuneration of Chief Executive |
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| The
Board of Directors in their meeting held on April 02, 1996, appointed |
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| Dr.
Mahmood Ahmad as the Chief Executive of the Company on the terms and |
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| conditions
as specified in the Company's letter dated April 03, 1996 issued to the |
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| members
in accordance with section 218 of the Companies Ordinance 1984. |
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| The
Board has at its meeting held on September 30, 1997 resolved to revise the |
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| annual
remuneration of Dr. Mahmood Ahmad effective from April 27, 1997 from |
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| Rs.
720,000 to Rs. 840,000 and thereafter 15% increase for next year. This was |
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| advised
to the members through Company's letter dated October 06, 1997 as |
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| required
by section 218 of the Companies Ordinance, 1984. |
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| Other
benefits as set out in the Company's letter dated October 06, 1997 referred
to |
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| above
will remain unchanged. |
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| Approval
of above is sought from the General body of the Shareholders. |
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| Resolution
as per Section 164(1) |
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| of
the Companies Ordinance 1984 |
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| "Resolved
that the revision in annual remuneration of Dr. Mahmood Ahmad, Chief |
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| Executive
as specified in the Company's letter dated October 06, 1997 issued to the |
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| members
in accordance with section 218 of the Companies Ordinance, 1984 be and |
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| is
hereby approved". |
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| 2.
Investment in Associated Company |
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| Berger
Paints Pakistan Limited in order to acquire latest technology for production |
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| and
application of road marking paints and allied products signed a Memorandum of |
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| Understanding
with DPI Sendirian Berhad of Malaysia to form a Private Limited |
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| Company
to undertake manufacturing, selling and contracts for application of road |
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| marking
paints, traffic signs and traffic safety products. |
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| The
initial capital of the Company will be Rs. 10 million in the following ratio: |
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| Berger
: 51% |
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| DPI : 49% |
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| According
to SRO No. 634(I)/96 dated July 30, 1996 the following information is |
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| required
to be annexed with the resolution for approval of the investment for the |
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| purpose
of Section 208 of the Companies Ordinance, 1984. |
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| a)
In Case of Equity Investment: |
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| i)
Name of Investee Company: |
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Berger- DPI (Private)
Limited |
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(Proposed Name) |
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| ii)
Nature, amount and extent of investment: |
Equity participation as |
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long-term investment of
upto |
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|
Rs. 5.10 million or 51%
of the |
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|
equity |
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| iii)
Price at which shares to be purchased: |
At par value of Rs. 10
per share |
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| iv)
Source of Funds from where: |
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From own funds |
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| shares
will be purchased |
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| v)
Period for which investment: |
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Long-term investment |
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| will
be made |
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| vi)
Purpose of Investment |
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Expansion of business |
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| vii)
Benefits likely to accrue to company and: |
Dividend on profitability
and |
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| the
shareholders from the proposed |
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the gain on market
capitalization |
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| investment |
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|
of its shares,
acquisition of |
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|
technology. |
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| RESOLUTIONS
AS PER SECTION 164(1) |
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| OF
THE COMPANIES ORDINANCE 1984 |
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| "RESOLVED
that this body approves the action taken by the Board of Directors of |
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| BERGER
for obtaining technology in road marking paints and in allied products, |
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| formation
and incorporation of a Private Limited Company". |
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| "FURTHER
RESOLVED that the Board of Directors be and are hereby authorised to |
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| make
investment in the said Company not exceeding Rs. 5.1 million". |
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| "FURTHER
RESOLVED that the Directors be and are hereby authorised to take all |
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| steps
necessary for implementing these RESOLUTIONS". |
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| 3.
Issuance of Bonus Shares |
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| The
Board of Directors in their meeting held on September 30, 1997 has
recommended |
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| issuance
of bonus shares in the ratio of 1:10 which is required to be approved by the |
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| general
body of shareholders. |
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| Resolution
as per Section 164(1) |
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| of
the Companies Ordinance 1984 |
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| "RESOLVED
that a sum of Rs. 2,803,086 out of the profits available for appropriation be |
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| capitalised
for issuing fully paid shares of Rs. 10 each as bonus shares to be allotted
to |
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| those
share-holders whose names appear in the register on November 03, 1997 in the |
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| proportion
of one share for every ten shares held. The said bonus shares shall rank |
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| pari-passu
with the existing shares of the Company". |
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| "FURTHER,
RESOLVED that bonus shares entitlement in fractions be sold by the |
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| Directors
on the Karachi Stock Exchange and the proceeds be distributed to |
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| Shareholders
in accordance with their entitlements". |
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| "FURTHER,
RESOLVED that for the purpose of giving effect to the foregoing, the |
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| Directors
be and are hereby authorised to give such directions as they deem fit to |
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| settle
any question or any difficulty that may arise in the distribution of the said |
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| bonus
shares or in payment of the sale proceeds of fractions". |
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| Chairman's
Review |
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| I
am pleased in presenting my report on the Company's performance for the year
ended |
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| June
30, 1997. |
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| Trading
Results: |
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| The
market remained uncertain and static during the year 1996-97 because of the |
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| changes
in the Government and the general election held in February, 1997. The |
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| economic
reform policies and incentives to stimulate the economy by the new |
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| Government
were announced towards the last quarter. We hopefully look forward to |
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| the
upturn in the market in the coming years. However, despite the adverse market |
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| conditions
your Company has achieved a growth of 7% in turnover compared to last |
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| year,
primarily by improving the product mix and concentrating on profitable
segments |
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| of
the trade. The profit after tax for the year was Rs. 22.41 million and your
Board |
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| is
pleased to recommend a dividend of Re. 1/- per share in cash and bonus shares |
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| in
the ratio of one share for every ten shares (10%). |
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|
| J&N
Pakistan Limited, wholly owned subsidiary company at Mirpur, performed
satisfactorily |
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| and
contributed in the profit by way of dividend to the Company. |
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| Excise
Duty: |
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| In
view of delay in the refund of Rs. 18 million from Excise Department on
account of |
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| excise
duty paid on thinners, the Company has filed during the year an execution |
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| application
with the High Court of Sindh. |
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| General: |
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| Re-instatement
of fixed capacity tax system on unorganised sector for levy of Excise duty |
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| and
Sales tax has again adversely affected the organised sector as they are
paying these |
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| taxes
on actual basis. We expect the Government will take action to ensure
uniformity in |
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| this
sector. |
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| Industrial
relations remained satisfactory during the year. |
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| Future
Outlook: |
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| The
construction of highways and road development programmes undertaken by the |
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| Government
have created an opportunity for developing road marking paints and their |
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| application.
Your Company has signed a Memorandum of Understanding with DPI |
|
| Sendirian
Berhad of Malaysia for acquiring the technology and technique of its
application. |
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| For
this purpose a Joint Venture Company is being established in which your
Company |
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| will
be holding 51% shares. This is in keeping with our objectives of improving
and |
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| acquiring
latest technology to enhance our share in the market. |
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| I
take this opportunity to record my deep sense of appreciation for the efforts
put in by |
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| the
staff at all levels during the year. |
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|
| Directors'
Report |
|
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| The
Directors have pleasure in submitting their Report and Audited Accounts of
the Company |
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| for
the year ended June 30, 1997. |
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|
|
Rupees |
Rupees |
|
|
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|
(in thousands) |
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| Net
Profit for the period before |
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|
|
| providing
for taxation but after |
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|
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| provision
has been made for |
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|
|
| depreciation,
is |
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|
29,330 |
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| Less:
Taxation |
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|
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| Current |
|
|
|
3,531 |
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| Deferred |
|
|
|
3,389 |
6,920 |
|
|
|
|
|
---------- |
---------- |
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| Profit
After Tax |
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|
|
|
22,410 |
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| Add:
Unappropriated Profit Brought Forward |
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|
2,113 |
|
|
|
|
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|
---------- |
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| Amount
available for appropriation |
|
|
|
24,523 |
|
|
|
|
| Proposed
Dividend @ Re. 1/- per share (10%) |
|
2,803 |
|
| Transfer
to Reserve for issue of Bonus Shares |
|
2,803 |
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| Transfer
to General Reserve |
|
15,000 |
20,606 |
|
|
|
|
|
---------- |
---------- |
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| Unappropriated
Profit Carried Forward |
|
|
|
3,917 |
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|
========== |
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|
|
| A
statement showing the pattern of holding of the shares held by the
Shareholders of Berger |
|
| Paints
Pakistan Limited as at June 30, 1997 appears on page No. 33. |
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|
| The
audited accounts of the wholly-owned subsidiary, J&N Pakistan Limited for
the year ended |
|
| June
30, 1997 are attached. |
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|
| The
earning per share is Rs. 7.99 for the year (1996: Rs. 6.83 for eighteen
months). |
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| The
Company's holding company is Slotrapid Limited which is incorporated in the
United |
|
| Kingdom. |
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| The
present auditors, A.F. Fergdson & Co., Chartered Accountants, retire and
being eligible, |
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| offer
themselves for reappointment. |
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|
| Auditors'
Report to the Members |
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| We
have audited the annexed balance sheet of Berger Paints Pakistan Limited as
at June 30, |
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| 1997
and the related profit and loss account and 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; |
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|
|
|
| (b)
in our opinion: |
|
|
| (i)
the balance sheet and profit and loss account together with the notes thereon
have |
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| 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 cash flow statement
together |
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| 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, 1997 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 |
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| deducted
by the company and deposited in the Central Zakat Fund established under |
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| section
7 of that Ordinance. |
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|
A.F. Ferguson & Co. |
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| Karachi:
October 14, 1997 |
|
Chartered Accountants |
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|
|
| Balance
Sheet as at June 30, 1997 |
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|
June 30, |
June 30, |
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|
|
Note |
1997 |
1996 |
|
|
|
|
|
(Rupees in thousand) |
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| SHARE
CAPITAL AND RESERVES |
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|
|
|
|
|
| Share
capital |
|
|
|
| Authorised |
|
|
|
| 5,000,000
ordinary shares of Rs. 10 each |
|
|
50,000 |
50,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
3 |
28,031 |
25,483 |
|
| Reserves |
|
4 |
88,058 |
72,803 |
|
| Unappropriated
profit |
|
|
3,917 |
2,113 |
|
|
|
|
---------- |
---------- |
|
|
|
|
120,006 |
100,399 |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
|
5 |
43,779 |
43,779 |
|
| LONG-TERM
FINANCE |
|
6 |
37,500 |
9,700 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT TO |
|
|
|
| FINANCE
LEASES |
|
7 |
16,021 |
8,953 |
|
|
|
|
|
| DEFERRED
TAXATION |
|
8 |
282 |
- |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
|
|
| Current
maturity of long-term finance |
|
6 |
3,200 |
2,900 |
|
| Current
maturity of liabilities against |
|
|
| assets
subject to finance leases |
|
7 |
6,836 |
5,499 |
|
| Short-term
finances |
|
9 |
35,000 |
43,670 |
|
| Running
finance under mark-up arrangements |
10 |
48,801 |
32,065 |
|
| Creditors,
accrued expenses and other liabilities |
11 |
280,498 |
271,721 |
|
| Unclaimed
dividends |
|
|
206 |
166 |
|
| Proposed
dividend |
|
|
2,803 |
6,371 |
|
|
|
|
---------- |
---------- |
|
|
|
|
377,344 |
362,392 |
|
|
|
|
---------- |
---------- |
|
| CONTINGENCIES
AND COMMITMENTS |
|
12 |
|
|
|
|
|
594,932 |
525,223 |
|
|
|
|
========== |
========== |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
|
|
|
| Operating
fixed assets |
|
13 |
81,337 |
69,250 |
|
| Capital
work-in-progress |
|
14 |
2,111 |
1,338 |
|
|
|
|
---------- |
---------- |
|
|
|
|
83,448 |
70,588 |
|
| LONG-TERM
INVESTMENTS |
|
15 |
950 |
950 |
|
| LONG-TERM
LOANS AND ADVANCES |
|
16 |
4,140 |
3,097 |
|
| LONG-TERM
DEPOSITS |
|
|
1,875 |
1,938 |
|
| DEFERRED
TAXATION |
|
6 |
- |
3,107 |
|
| CURRENT
ASSETS |
|
|
|
| Stores |
|
|
2,581 |
3,614 |
|
| Stocks |
|
17 |
161,861 |
147,516 |
|
| Trade
debts |
|
18 |
174,891 |
165,004 |
|
| Loans
and advances |
|
19 |
4,135 |
5,510 |
|
| Trade
deposits and short-term prepayments |
20 |
5,374 |
3,202 |
|
| Other
receivables |
|
21 |
96,323 |
68,855 |
|
| Short-term
investments |
|
22 |
5,000 |
5,000 |
|
| Income
tax refundable |
|
|
31,308 |
17,310 |
|
| Cash
and bank balances |
|
23 |
23,046 |
29,532 |
|
|
|
|
---------- |
---------- |
|
|
|
|
504,519 |
445,543 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
594,932 |
525,223 |
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
| Profit
and Loss Account |
|
| for
the year ended June 30, 1997 |
|
|
|
|
|
|
|
|
Year |
Eighteen |
|
|
|
|
|
ended |
months |
|
|
|
|
|
June 30, |
ended June |
|
|
|
|
|
1997 |
3O, 1996 |
|
|
|
|
Note |
|
|
|
|
|
(Rupees in thousand) |
|
|
|
|
| Sales |
|
|
|
24 |
715,862 |
944,244 |
|
| Cost
of goods sold |
|
|
25 |
598,120 |
823,318 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
117,742 |
120,926 |
|
| Selling
and administration expenses |
|
26 |
105,702 |
117,454 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
12,040 |
3,472 |
|
| Other
income |
|
|
27 |
56,596 |
86,996 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
68,636 |
90.47 |
|
|
|
|
|
|
---------- |
---------- |
|
| Financial
charges |
|
|
28 |
37,431 |
48,554 |
|
| Other
charges |
|
|
29 |
1,875 |
22,167 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
39,306 |
70,721 |
|
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
29,330 |
19,747 |
|
|
|
|
|
---------- |
---------- |
|
| Taxation |
|
|
|
|
|
| Current
- for the year |
|
3,531 |
4,622 |
|
| -
for prior year |
|
- |
(172) |
|
| Deferred
- for the year |
|
2,275 |
(2,112) |
|
| -
for prior years |
|
1,114 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
6,920 |
2,338 |
|
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
22,410 |
17,409 |
|
| Unappropriated
profit brought forward |
|
2,113 |
5,878 |
|
|
|
---------- |
---------- |
|
|
|
24,523 |
23,287 |
