| BUXLY PAINTS LIMITED |
|
|
|
|
|
|
|
|
|
|
|
| ANNUAL
REPORT 1997 |
|
|
|
|
| CONTENTS |
|
| BOARD
OF DIRECTORS |
|
|
| NOTICE
OF MEETING |
|
|
| REPORT
OF THE DIRECTORS |
|
|
| AUDITORS REPORT TO THE |
MEMBERS |
|
|
| BALANCE
SHEET |
|
|
| P
& L ACCOUNT |
|
|
| STATEMENT OF CHANGES IN FINANCIAL POSITION (CASH |
FLOW STATEMENT) |
|
| NOTES
TO THE ACCOUNTS |
|
|
| PATTERN
OF SHAREHOLDINGS |
|
|
|
| BOARD
OF DIRECTORS |
|
|
| CHAIRMAN: |
|
|
Nasim Alam Khan |
|
| DIRECTORS: |
|
|
Mrs. Kaiser Sultana Khan |
|
|
|
Mrs. Amtul Rauf Khan |
|
|
|
Abdul Qadir H. Moochhala |
|
|
|
Salim M. Khan |
|
|
|
Shahid Ghaffar |
|
| DIRECTOR
(ADMIN): |
|
Mushir Alam Khan |
|
| EXECUTIVE
DIRECTOR: |
|
Yusuf Babar Khan |
|
| MANAGING
DIRECTOR &: |
|
Wassim Alam Khan |
|
| CHIEF
EXECUTIVE |
|
|
| COMPANY
SECRETARY: |
|
Muhammad Khan |
|
| AUDITORS: |
|
|
Ford, Rhodes, Robson,
Morrow |
|
|
|
Chartered Accountants |
|
| LEGAL
ADVISOR: |
|
Abdus Samad |
|
| BANKERS: |
|
|
The Muslim Commercial
Bank Ltd. |
|
|
|
Habib Bank Ltd. |
|
|
|
United Bank Ltd. |
|
|
|
National Bank of Pakistan |
|
|
|
Bank AI-Habib Ltd. |
|
|
|
Bolan Bank Ltd. |
|
| REGISTERED
OFFICE: |
|
E/20, S.I.T.E., |
|
|
|
Polytechnic Road,
Karachi-75700 |
|
|
| FACTORIES: |
|
|
X-3, S.I.T.E., |
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|
Manghopir Road,
Karachi-75700 (Works 1) |
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|
E/20, S.I.T.E., |
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|
|
Polytechnic Road,
Karachi-75700 (Works 2) |
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the Forty-third Annual General Meeting of the
Shareholders of Messrs BUXLY PAINTS |
|
| LIMITED,
Karachi will be held at the Registered Office of the Company at E/20,
S.I.T.E. Polytechnic Road, Karachi- |
|
| 75700
on Wednesday the 24th December, 1997 at 9-30 a.m. to transact the following
business :- |
|
|
| 1.
To confirm the Minutes of the Forty-second Annual General Meeting held on
Monday the 30th |
|
| December,
1996. |
|
|
|
|
| 2.
To receive, consider and adopt the audited Balance Sheet and Profit &
Loss Account together with |
|
| the
Directors' and Auditors' Reports thereon for the year ended 30th June, 1997. |
|
|
|
|
| 3.
To approve and declare payment of Annual Dividend @ 12.5% (Rs. 1.25 per
ordinary share of Rs. |
|
| 10/=
each) for the year ended 30th June, 1997 as recommended by the Directors. |
|
|
|
|
| 4.
To appoint Auditors for the ensuing year and approve their remuneration. The
retiring Auditors M/s. |
|
| Ford,
Rhodes, Robson, Morrow have offered themselves for re-appointment at revised
remuneration. |
|
|
|
|
| 5.
To transact any other business which may legally be transacted at an Annual
General Meeting. |
|
|
| NOTES: |
|
|
| 1)
The Share Transfer Books of the Company will be closed from Thursday the 18th
December, |
|
| 1997
to Thursday the 1st January, 1998, both days inclusive. Transfers received in
order, at the |
|
| Registered
Office of the Company by the close of Business i.e. by 1-00 p.m. on Wednesday
the |
|
| 17th
December, 1997 will be treated in time for the purpose of eligibility to
attend the Annual |
|
| General
Meeting. |
|
|
|
|
| 2)
Any member of the Company entitled to attend and vote may appoint another
member as his/her |
|
| proxy
to attend and vote on his/her behalf. PROXIES MUST BE RECEIVED AT THE REGIS- |
|
| TERED
OFFICE OF THE COMPANY NOT LATER THAN 48 HOURS BEFORE THE MEETING. |
|
|
|
|
| 3)
Shareholders are requested to notify the company of any change in their
address immediately. |
|
|
| REPORT
OF THE DIRECTORS |
|
|
| Dear
Shareholders: |
|
|
| Inspire
of the uncertainty prevailing generally and where more than 80% of the
decorative market is in the |
|
| hands
of fixed tax people, very unfair competition has been prevailing and is
likely to continue to prevail until the |
|
| fixed
tax is withdrawn by the Government. Furthermore large sums of company's money
are held up with some |
|
| dealers
whose reasons for slow payment is due to a very slack market. Large sums are
involved in Government |
|
| business,
such reasons have caused liquidity problems for the company. Nevertheless the
efforts of your Directors |
|
| have
been concentrated as usual on trying to establish a tradition of improved
results. |
|
|
| This
time again the volume is down by 4.18% in litres and value has increase by
10.7% thus increased prof- |
|
| itability.
This has been achieved by concentrating on the sale of HITECH products and
thanks to ongoing projects. |
|
|
| With
the-cash liquidity-problems normally one would want to pass the dividend
altogether, but your Directors |
|
| are
determined to continue their efforts to win back some of the decorative
market and increase their sale of the |
|
| HITECH
products and ensure that their shareholders are not disappointed. |
|
|
| Meanwhile
our negotiations with a party in UAE have borne fruit as they have agreed to
pay 3% royalty on net |
|
| profits
starting two years after commencement of commercial production. |
|
|
| We,
your Directors while maintaining the highest traditions of the company's
principles, continue to devote |
|
| their
energies to the company's benefit to ensure that the company enters its 50th
year in Pakistan with confidence |
|
| and
that confidence we hope to pass onto the generations to come to continue the
growth of the country as a solid |
|
| pillar
of Pakistan. |
|
|
| May
God help us all "Ameen", |
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
|
Rupees |
Rupees |
|
| TRADING
RESULTS: |
|
|
|
|
|
|
| The
net profit for the year after deducting all |
|
| charges
and administration & selling expenses. |
|
3,920,511 |
9,885 |
|
|
|
|
|
|
|
| Less:
Provision for taxation. |
|
|
2,000,000 |
1,474,368 |
|
|
|
|
|
---------- |
---------- |
|
| Profit
/ (Loss) after taxation |
|
|
1,920,511 |
(1,464,483) |
|
| Add:
Unappropriated profit |
|
|
|
| brought
forward. |
|
|
|
63,750 |
2,608,233 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
1,984,261 |
1,143,750 |
|
| Appropriation: |
|
|
|
|
| Proposed
dividend |
|
|
|
1,800,000 |
1,080,000 |
|
|
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward. |
|
184,261 |
63,750 |
|
|
|
========== |
========== |
|
|
| DIVIDEND: |
|
|
| Your
Directors recommended the payment of cash dividend to Shareholders @ 12.5%
i.e. Rs. 1.25 per share. |
|
|
| PATTERN
OF SHARE-HOLDING: |
|
| The
pattern of shareholding is annexed to the accounts and represents the total
paid up capital of Rs. 14.400 |
|
| million. |
|
|
| BOARD
OF DIRECTORS: |
|
|
| There
is no change in the Board of Directors. |
|
|
| AUDITORS: |
|
| The
retiring Auditors Messrs Ford, Rhodes, Robson, Morrow, Chartered Accountants
being eligible, offer |
|
| themselves
for re-appointment at revised remuneration. |
|
|
| LABOUR
RELATIONS: |
|
| The
relations between the workers and the management have remained cordial as
usual. |
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of BUXLY PAINTS LIMITED as at 30th
June, 1997 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 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 accor- |
|
| dance
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, 1997 and of the profit and the
changes in the 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. |
|
|
| BALANCE
SHEET AS |
|
|
|
|
|
1996 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorised |
|
|
| 5,000,000
ordinary shares of Rs.10 each |
50,000,000 |
50,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
3 |
14,400,000 |
14,400,000 |
|
| Revenue
reserve |
|
4 |
3,749,886 |
3,629,375 |
|
|
|
|
---------- |
---------- |
|
|
|
|
18,149,886 |
18,029,375 |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
5 |
25,060,268 |
25,060,268 |
|
| LONG
TERM DEPOSITS |
|
6 |
328,000 |
213,000 |
|
| DEFERRED
LIABILITIES |
|
| Staff
gratuity |
|
|
4,740,951 |
3,961,220 |
|
| Directors'
retirement benefits |
|
800,000 |
800,000 |
|
|
|
|
---------- |
---------- |
|
|
|
|
5,540,951 |
4,761,220 |
|
| OBLIGATION
UNDER FINANCE LEASES |
7 |
1,478,910 |
961,477 |
|
| CURRENT
LIABILITIES ' |
|
|
---------- |
---------- |
|
| Current
portion of obligation under finance leases |
7 |
1,109,177 |
857,408 |
|
| Short
term running finances |
8 |
26,630,723 |
24,198,189 |
|
| Short
term loan |
|
|
- |
1,500,000 |
|
| Creditors,
accrued and other liabilities |
9 |
35,546,458 |
32,489,689 |
|
| Unclaimed
dividend |
|
|
99,817 |
78,188 |
|
| Proposed
dividend |
|
|
1,800,000 |
1,080,000 |
|
|
|
---------- |
---------- |
|
|
|
65,186,175 |
60,203,474 |
|
| CONTINGENCIES
AND COMMITMENTS |
10 |
|
|
---------- |
---------- |
|
|
|
|
115,744,190 |
109,228,814 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
| The
auditors' report is annexed hereto. |
|
|
| AT
30TH JUNE, 1997 |
|
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
|
|
|
| Operating
assets at cost less |
|
|
| accumulated
depreciation |
|
11 |
25,706,717 |
25,944,751 |
|
|
|
|
| Capital
Work-in-progress |
|
12 |
583,679 |
319,532 |
|
|
|
|
---------- |
---------- |
|
|
|
|
26,290,396 |
26,264,283 |
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
13 |
426,814 |
328,589 |
|
| CURRENT
ASSETS |
|
|
|
---------- |
---------- |
|
| Stock-in-trade |
|
|
14 |
34,010,442 |
28,702,750 |
|
| Trade
debtors |
|
|
15 |
45,847,689 |
37,774,960 |
|
| Advances,
deposits, prepayments and |
|
|
| other
receivables |
|
|
16 |
6,709,598 |
11,024,786 |
|
|
|
|
| Cash
and bank balances |
|
|
17 |
2,459,251 |
5,133,446 |
|
|
|
|
---------- |
---------- |
|
|
|
|
89, 026,980 |
82,635,942 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
115,744,190 |
109,228,814 |
|
|
|
|
========== |
========== |
|
|
| BUXLY
PAINTS LIMITED |
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED 30TH JUNE, 1997 |
|
|
|
|
|
1997 |
1996 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Sales |
|
18 |
204,706,172 |
184,873,521 |
|
| Cost
of sales |
|
19 |
167,539,604 |
158,148,875 |
|
|
|
|
---------- |
---------- |
|
| Gross
profit |
|
|
37,166,568 |
26,724,646 |
|
|
|
|
---------- |
---------- |
|
| Administrative
expenses |
|
|
20 |
19,309,408 |
17,145,110 |
|
| Selling
expenses |
|
|
21 |
9,159,445 |
7,392,451 |
|
|
|
|
---------- |
---------- |
|
|
|
|
28,468,853 |
24,537,561 |
|
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
8,697,715 |
2,187,085 |
|
| Other income |
i |
|
22 |
1,448,252 |
3,643,581 |
|
|
|
|
---------- |
---------- |
|
|
|
|
10,145,967 |
5,830,666 |
|
|
|
|
---------- |
---------- |
|
| Financial
charges |
|
23 |
5,936,576 |
5,820,052 |
|
| Workers'
profit participation fund |
|
|
210,470 |
531 |
|
| Workers'
welfare fund |
|
|
78,410 |
198 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
6,225,456 |
5,820,781 |
|
|
|
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
|
3,920,511 |
9,885 |
|
| Taxation |
|
|
|
| Current |
|
|
|
1,800,000 |
924,368 |
|
| Prior years |
|
|
|
200,000 |
550,000 |
|
|
|
|
|
---------- |
---------- |
|
|
|
2,000,000 |
1,474,368 |
|
|
|
---------- |
---------- |
|
| Profit
/ (loss) after taxation |
|
1,920,511 |
(1,464,483) |
|
| Unappropriated
profit brought forward |
|
63,750 |
2,608,233 |
|
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
1,984,261 |
1,143,750 |
|
| Appropriation |
|
|
|
| Proposed
dividend @ 12.5% (1996: @ 7.5%) |
|
1,800,000 |
1,080,000 |
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
184,261 |
63,750 |
|
|
|
|
========== |
========== |
|
|
|
| BUXLY
PAINTS LIMITED |
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION (CASH FLOW |
|
| STATEMENT)
FOR THE YEAR ENDED 30TH JUNE, 1997 |
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
| Profit
before taxation |
|
|
|
3,920,511 |
9,885 |
|
|
|
|
| Adjustments
for |
|
|
|
| Depreciation |
|
2,123,682 |
2,018,494 |
|
| Profit
on sale of fixed assets |
|
(378,356) |
(840,638) |
|
| Provision
for retirement gratuities - net of payment |
779,731 |
299,306 |
|
| Financial
charges on borrowings |
|
5,648,777 |
5,465,423 |
|
|
|
---------- |
---------- |
|
|
|
8,173,834 |
6,942,585 |
|
|
|
---------- |
---------- |
|
| Operating
profit before working capital changes |
12,094,345 |
6,952,470 |
|
|
|
|
| Changes
in working capital |
|
|
|
| (Increase)/decrease
in current assets |
|
|
|
|
|
|
|
(5,307,692) |
1,260,231 |
|
| Stock-in-trade |
|
|
|
| Trade
debtors |
|
|
|
(8,072,729) |
(7,155,714) |
|
| Advances,
deposits, prepayments |
|
|
|
|
| and
other receivables |
|
|
|
3,952,579 |
(2,776,727 |
|
|
|
|
| Increase
in current liabilities |
|
|
|
|
|
|
| Creditors,
accrued and other liabilities |
|
3,129,039 |
7,292,127 |
|
|
|
---------- |
---------- |
|
|
|
(6,298,803) |
(1,380,083 |
|
|
|
---------- |
---------- |
|
| Cash
generated from operation |
|
5,795,542 |
5,572,387 |
|
| Taxes paid |
|
(1,637,391) |
(3,423,400) |
|
| Financial
charges paid |
|
(5,721,047) |
(4,891,630) |
|
|
|
---------- |
---------- |
|
| Net
cash used in operating activities (A) |
|
(1,562,896) |
(2,742,643) |
|
|
|
========== |
========== |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Sale
of fixed assets |
|
652,900 |
4,150,000 |
|
| Acquisition
of fixed assets |
|
(2,424,339) |
(2,194,142) |
|
| Long
term deposits |
|
(98,225) |
98,935 |
|
|
|
---------- |
---------- |
|
| Net
cash (used in) / from investing activities (B) |
(1,869,664) |
2,054,793 |
|
|
|
========== |
========== |
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
| Long
term deposits |
|
|
|
115,000 |
163,000 |
|
| Short
term finances |
|
|
|
932,534 |
3,391,987 |
|
| Finance
lease - net |
|
|
|
769,202 |
(230,066) |
|
| Dividend
paid |
|
|
|
(1,058,371) |
(3,705) |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash from financing activities (c) |
|
758,365 |
3,321,216 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| NET
INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) |
(2,674,195) |
2,633,366 |
|
|
|
|
|
|
|
| CASH
AND CASH EQUIVALENTS AT THE BEGINNING |
|
|
|
| OF THE YEAR |
|
|
|
5,133,446 |
2,500,080 |
|
|
|
---------- |
---------- |
|
| CASH
AND CASH EQUIVALENTS AT THE END OF THE YEAR |
2,459,251 |
5,133,446 |
|
|
|
========== |
========== |
|
|
| BUXLY
PAINTS LIMITED |
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED 30TH JUNE, 1997 |
|
|
| 1.
THE COMPANY AND ITS OPERATION |
|
|
|
|
| Buxly
Paints Limited is a public limited company quoted on the Stock Exchanges in
Pakistan. The company is |
|
| a
leading manufacturer of quality paints, pigments, protective sudace coatings,
varnishes and other related |
|
| products. |
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| (a)
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention modified by
the revaluation of |
|
| certain
fixed assets. |
|
|
| (b)
Fixed assets |
|
|
| Owned |
|
|
| These
are stated at cost or applicable valuation less accumulated depreciation.
Depreciation is charged |
|
| to
income applying the reducing balance method and the rates used are stated in
note 11 to the accounts. |
|
| Leasehold
land is amortized over the remaining period of the lease. In respect of
additions during the |
|
| year,
depreciation is charged for full year, however, no depreciation is charged in
the year of disposal. |
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. Major renewals
and |
|
| improvements
are capitalised. Profit or loss on disposal of assets is included in income
currently. |
|
|
| Leased |
|
|
| Assets
subject to finance leases are included as tangible fixed assets at cost less
accumulated depreciation. |
|
|
| The
outstanding obligations under the leases less finance charges allocated to
future periods are shown |
|
| as
liability. |
|
|
| Depreciation
is charged at the same rates as company owned assets. |
|
|
| (c)
Stock-in-trade |
|
|
| These
are valued at the lower of cost, determined on first-in-first-out method and
net realizable value, |
|
| except
for those in transit which are valued at cost. |
|
|
| (d)
Retirement benefits |
|
|
| i)
Staff gratuity |
|
|
| The
company operates an approved gratuity fund scheme and provision in respect
thereto are made in |
|
| accordance
with the recommendations of the actuary. |
|
|
| ii)
Provident fund |
|
|
| The
company also operates an approved provident fund scheme and contributions
thereto are made |
|
| in
accordance with the terms of the scheme. |
|
|
| (e)
Taxation |
|
|
| Provision
for current taxation is based on taxable income at the current rates of
taxation after taking |
|
| into
account tax credits available. The company accounts for deferred taxation on
all significant timing |
|
| differences
using the liability method. As a measure of prudence deferred tax debits are
not accounted |
|
| for. |
|
|
|
| (f)
Foreign currency |
|
|
| Assets
and liabilities in foreign currency are stated in rupees at the rates of
exchange ruling on the |
|
| balance
sheet date or rates of exchange fixed under contractual agreements. All
exchange differences |
|
| are
included in the profit and loss account. |
|
|
| (g)
Revenue recognition |
|
|
| Sales
are recorded on despatch of goods to customers. |
|
|
|
|
1997 |
1996 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| 3.
ISSUED, SUBSCRIBED AND PAID-UP CAPITAL |
|
|
| Ordinary
shares of Rs. 10 each |
|
|
|
|
|
|
|
|
| 1,257,288 |
shares fully paid in cash |
|
12,572,880 |
12,572,880 |
|
| 82,712 |
shares issued as fully
paid for |
|
|
|
consideration other than
cash |
|
827,120 |
827,120 |
|
| 100,000 |
shares issued as fully
paid bonus shares |
1,000,000 |
1,000,000 |
|
| ---------- |
|
|
---------- |
---------- |
|
| 1,440,000 |
|
|
14,400,000 |
14,400,000 |
|
| ========== |
|
|
========== |
========== |
|
|
| 4.
REVENUE RESERVE |
|
| General
Reserve |
|
3,565,625 |
3,565,625 |
|
| Unappropriated
profit |
