| GRAYS OF CHAMBRIDGE (PAKISTAN) LIMITED |
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| ANNUAL
REPORT 1997 |
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In The Name of Allah |
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|
The Merciful |
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|
The Compassionate |
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| TOP
COMPANIES AWARD |
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|
| 1996
Announced |
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| 1995
Awarded |
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| 1994
Awarded |
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| 1993
Awarded |
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| 1992
Awarded |
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| 1991
Awarded |
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| 1990
Awarded |
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| 1989
Awarded |
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| Contents |
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| Corporate
Information |
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| Company
Profile |
|
| Directors'
Report |
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| Chief
Executive's Review |
|
| Statement
of Value Added and its Distribution |
|
| Decade
at a Glance |
|
| Pattern
of Shareholdings |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
| Statement
Pursuant to Section 237 of the Companies Ordinance, 1984 |
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| Notice
of the Meeting |
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| Dawn
Sports (Private) Limited |
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| Corporate
Information |
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| BOARD
OF DIRECTORS |
|
Mr. Harold John Gray
(Chairman |
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Mr. Khawar Anwar Khawaja
(Chief Executive) |
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Mr. William Gray |
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Mr. Khurram Anwar Khawaja |
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Mr. Neil Douglas James
Gray |
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Mr. Muhammad Tahir Butt |
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Mrs. Nuzhat Khawar
Khawaja |
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|
Mr. Sarfraz Mahmood
(Alternate to |
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|
Mr. William Gray) |
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| CORPORATE
SECRETARY |
|
Mr. Shakil Ahmed |
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| AUDITORS |
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|
Messrs. M.A. Tabussum
& Co. |
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Chartered Accountants |
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S-8 Ahmed Arcade |
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161 Ferozepur Road |
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Lahore |
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| MANAGEMENT
CONSULTANTS |
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Messrs. Sarfraz Mahmood
(Private) Ltd. |
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|
8-Mall Mansion, 30 -
Shahrah-e-Quaid-e-Azam, |
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Lahore - 54000 - Pakistan |
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Tel: (042) 7233324 -26 |
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Fax: (042) 7235762 |
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E-Mail: sarfrazm@paknet
1.ptc.pk |
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| REGISTERED
OFFICE |
|
Small Industries Estate, |
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| AND WORKS |
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|
Sialkot - 4 (Pakistan) |
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Phones: (0432) 555338,
563051, 563052 |
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Telefax: (0432) 551252,
553609 |
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| Company
Profile |
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| Industrial
Profile |
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|
| Grays
of Cambridge (Pakistan) Limited was incorporated in Pakistan on 02 June 1964
to incarnate a |
|
| strong
yearn of Late Mr. Anwar Khawaja, the first Managing Director of the company,
of making the |
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| WORLD'S
BEST hockey stick in collaboration with Messrs H.J.Gray & Sons of
Cambridge, England |
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| [presently
named as "Grays of Cambridge (International) Limited"] under an
agreement made and |
|
| signed
in 1963. |
|
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| The
formal inauguration of this Pak-British joint enterprise was held on 08 May
1965 although the |
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| unit
commenced its commercial production on 01 April 1965 under the elite
supervision of an |
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| English
technician, Mr. D. Fosket who had actually made Hockey Sticks with his own
hands for |
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| more
than half a century. This great expert gave training to Pakistani workers and
calved them into |
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| a
team of adroit and enchanting craftsmen by inculcating them with all his
expertise, elegance and |
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| excellence. |
|
|
| During
1983, while the company continued progressively making conventional hockey
sticks (around |
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| 90,000
sticks a year), the management acquired technical know-how from Mr. Toon
Coolen of |
|
| Netherlands
and started making a Novelty Stick with a U-Shaped head approved by the Rules |
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| Committee
of the International Hockey Federation. By virtue of this blending
mechanization with |
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| the
skills of the local craftsmen, the hockey sticks produced by this unit have
met with a global |
|
| acceptance
as the best ever-made and the venture proved to be an international success.
The fact |
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| that
the first mark of 17590 hockey sticks produced and exported during 1965 has
culminated to its |
|
| present
volume of 200,000 sticks a year, has evidently placed GRAYS PAKISTAN fairly
and squarely |
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| on
the World Hockey Map. |
|
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| Equally
important was the year 1973 which also witnessed expansion in Company's
Product Line. A |
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| Cricket
Ball manufacturing unit was established to produce balls with the World's
most famous |
|
| brand
names "DUKE & SONS" and "GRAY-NICOLLS". This unit has
also shown a tremendous |
|
| growth
as evidenced by rising production of completely hand sewn cricket balls from
a few thousand |
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| in
its first year of inception to around forty thousand a year at present. These
balls are being used in |
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| first
class as well as the Test Cricket in Pakistan and abroad. |
|
|
| The
company has a global net work of marketing agents as well as a full fledged
quality control wing |
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| consisting
of on-job trained supervisors headed by a professional, all working under a
regular control |
|
| of
the Company's Chief Executive/Technical Director Mr. Khawar A. Khawaja who
did his B .E. from |
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| the
University of Engineering and Technology, Lahore. |
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|
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| Corporate
Profile |
|
| The
company which was incorporated as a private limited company went public in
April 1986 and |
|
| was
listed on Karachi and Lahore Stock Exchanges in January 1987. The issue was
very well |
|
| received
by public and was over-subscribed by 200 times, a record response by public.
Since then, the |
|
| share
of the company has a very strong demand which it; well supported by the fact
that its 10 |
|
| rupees
share has touched a 450 rupees price and is being quoted at rupees 230 at
present. |
|
|
| In
the recent years, GRAYS PAKISTAN has also worked on expansion in its
corporate set up. |
|
| Consequently,
it acquired DAWN SPORTS (PRIVATE) LIMITED, a hockey manufacturing unit, as a |
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| wholly
owned subsidiary. At the same time, a plan for diversification in financial
and economic |
|
| activities
is also underway, and as a result thereof, the Company has co-sponsored a
leasing |
|
| company
named GRAYS LEASING LIMITED, recently listed on Karachi and Lahore Stock |
|
| Exchanges
with an equity capital of 100 million rupees which was also oversubscribed
even under |
|
| the
prevailing crunch in the investment market. |
|
|
| The
financial performance of the company is also revealed by a simple statistic
that the |
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| shareholders'
equity has grown from 225 thousand rupees in 1965 to 100,834 thousand in 1997 |
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| inspite
of high cash dividend pay outs like: |
|
|
|
| 1992 |
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|
..... |
|
200 percent |
|
| 1993 |
|
..... |
|
100 percent |
|
| 1994 |
|
..... |
|
100 percent |
|
| 1995 |
(half year) |
|
..... |
|
100 percent |
|
| 1996 |
|
..... |
|
150 percent |
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| 1997 |
|
..... |
|
200 percent |
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|
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| Surely,
it is due to this performance that the company was ranked as first for
"Corporate Excellence
~::;~ |
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| Award"
by the Management Association of Pakistan during 1995 and has been declared
as one of the ~: |
|
| Top
25 Companies by the Karachi Stock Exchange for the last eight consecutive
years. |
|
|
| GRAYS
PAKISTAN, under the chairmanship of Mr. John Gray and the Chief Executive
Officer Mr. |
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| Khawar
A. Khawaja, has pledged itself to a very strong commitment to realism and
honesty with its |
|
| principles
which legislates for the benefits of the public and not least of the Sports
and the |
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| sportsmen.
:~4 |
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| Directors'
Report |
|
|
| The
Directors are pleased to present to you their report alongwith the Audited
Accounts for the year |
|
| ended
June 30, 1997 and the Auditors Report thereon. |
|
|
| Financial
Results |
|
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| The
operating results and Directors' recommendations regarding appropriation
thereof are as under: |
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|
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|
Rupees |
|
| Profit
for the year ended June 30, 1997 after providing |
|
| for
administration, marketing and financial charges |
|
29 187 140 |
|
|
---------- |
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| Less: |
Workers' Profit
Participation Fund |
|
1 412 370 |
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|
Workers' Welfare Fund |
|
115 131 |
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|
Donations |
|
|
939 850 |
|
|
|
|
---------- |
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|
2 467 351 |
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|
|
|
---------- |
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| Profit
before taxation |
|
|
26 719 789 |
|
| Less
· Provision for taxation |
|
632 697 |
|
|
---------- |
|
| Profit
after taxation |
|
26 087 092 |
|
| Prior
years adjustment |
|
1 203 550 |
|
| Unappropriated
profit brought forward |
|
9 935 |
|
|
|
|
---------- |
|
| Profit
available for appropriations |
|
27 300 577 |
|
|
---------- |
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| Appropriations: |
|
| Proposed
final dividend @ 200 Percent (1996 : @ 150%) |
|
14 932 000 |
|
| Transfer
to General Reserve |
|
12 000 000 |
|
|
---------- |
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|
26 932 000 |
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|
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|
---------- |
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| Unappropriated
profit carried forward |
|
368 577 |
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========== |
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| Chief
Executive's Review |
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| The
Directors endorse the Chief Executive's Review dealing with performance,
activities and |
|
| prospects
of the Company, which is included in this report. |
|
|
| Auditors |
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| The
present auditors Messrs. M.A. Tabussum & Co., Chartered Accountants,
retire, and being |
|
| eligible,
have offered themselves for re-appointment. |
|
|
| Pattern
of Shareholdings |
|
| The
pattern of share holdings at June 30, 1997 is given on page 14. |
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| on
behalf of the board |
|
|
|
| Chief
Executive's Review |
|
|
| I
am pleased to welcome you to the 34th annual general meeting with heartiest
congratulations on |
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| winning
the "TOP COMPANIES AWARD 1996" of the Karachi Stock Exchange
(Guarantee) Limited |
|
| by
your company for the 8th consecutive year. This is indeed a remarkable
achievement as well as a |
|
| landmark
in the corporate history of country. |
|
|
| Dear
shareholders, the success of Grays and its consistent growth in all spheres
of business life are |
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| hardly
a coincidence. Surely, it is Grace of the Almighty, but also an outcome of
serving our |
|
| customers
diligently, blend of a technologically advanced range of products and the
innovative |
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| marketing
concepts developed with sheer and hard work at all levels of the management. |
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|
| OPERATING
PERFORMANCE |
|
| The
global economic recession has resulted in a sluggish market for all
commodities including our |
|
| product
range. Consequently, we could not pass on the entire effects of increase in
cost of inputs |
|
| which
caused 3.31 percent decline in the gross margins although, in absolute terms,
the gross profit |
|
| increased
from rupees 39.327 million in 1996 to rupees 40.477 million during the fiscal
year under |
|
| review.
However, the 10.13 percent increase in sales revenue (rupees 85.716 million
in 1996-97 as |
|
| compared
to rupees 77.833 million in 1995-96) has enabled us to maintain and manage a
small |
|
| increase
of 3.95 percent in pre-tax net profits which rose from rupees 25.704 million
in 1996 to rupees |
|
| 26.720
million in 1997. |
|
|
| FUTURE
OUTLOOK |
|
| In
my previous reviews, I mentioned about the composite hockey stick of which
the practical tests |
|
| could
not succeed to the extent we were anticipating. At present we do not foresee
any serious |
|
| problem
on this front and your company would surely strive to maintain a steady
growth and its |
|
| future
profitability. |
|
|
| Moreover,
our key objectives continue to remain ' |
|
|
|
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| -
To vow for harmonized economic and social activities for NATIONAL STRENGTH |
|
| AND
STABILITY. |
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|
|
| -
To develop a top quality "GRAYS" Branded portfolio, manufactured
and marketed in a |
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| professional
manner to cater with the demands of our global marketing network. |
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|
|
|
| -
To trigger all or efforts towards CUSTOMERS' SATISFACTION through
professional |
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| expertise,
elegance and excellence. |
|
|
| -
To improve SKILLS of employees by imparting training and inculcating in them
a sense |
|
| of
PARTICIPATION; and |
|
|
|
| -
To EXPAND and DIVERSIFY our corporate set-up for a multi-dimensional growth
and |
|
| expansion
in business activity for higher profitability and payouts to the
shareholders. |
|
|
| GRAYS
LEASING LIMITED |
|
| Dear
members, we have co-sponsored a leasing company, Grays Leasing Limited by
subscribing |
|
| rupees
2 million out of, its total equity of rupees 100 million. The company was
incorporated in |
|
| Pakistan
on 31 August 1995, shares were offered to general public on 19 January 1997
and was |
|
| listed
on Karachi and Lahore Stock Exchanges on 26 March 1997. |
|
|
| I
am delighted to convey my profound satisfaction over its achievements that in
a short span of about |
|
| eight
months since commencement of its business on 26 February 1997, the company
has so far |
|
| generated
a respectable lease portfolio of rupees 160 million. |
|
|
| DAWN
SPORTS (PRIVATE) LIMITED |
|
| Dawn
Sports (Private) Limited is a wholly subsidiary of Grays of Cambridge
(Pakistan) Limited |
|
| acquired
during 1994. Its financials are also being published herewith so as to enable
you to evaluate |
|
| and
apprehend the actual performance of the company. |
|
|
| PERSONNEL
& WORKING ENVIRONMENTS |
|
| The
strength of an organization is judged by the competence of its staff and
workers. Continuous |
|
| efforts
are made to develop further skills amongst our employees who attend m-house
training |
|
| programs
designed for this very purpose. Fresh apprentices are also trained through
on-job practical |
|
| working
methods. At the same time, the company is undertaking a lot of initiative in
the key areas of |
|
| health,
safety and environment, human resources and information technology which will
surely have |
|
| a
great contribution to the development of the company growing from strength to
strength in the |
|
| years
to come. |
|
|
| The
company has made significant progress in acquiring new Computer technology
with a |
|
| professionally
developed Management Information System. We have also made progress in the |
|
| development
of in-house programs and implementation of new software and its applications
which |
|
| provides
a centralized database, supports integration between the manufacturing and
financial |
|
| systems
and is assisting the company in providing meaningful data in time for
management decision |
|
| making. |
|
|
| Massive
renovations and re-constructions have also been carried out by spending over
2 million |
|
| rupees
to provide better and improved working conditions to all cadres of employees. |
|
|
| DIVIDENDS |
|
| In
accordance with our key objectives and corporate policy, the board of
directors have proposed 200 |
|
| percent
cash dividend out of the profit for the year ended 30 June 1997. Thus a
considerable part |
|
| (about
43%) of the current year's net earnings has been ploughed back into
shareholders equity |
|
| which
evidently shows a consistent growth over the period. |
|
|
|
|
| BOARD
OF DIRECTORS |
|
| Mr.
William Gray who had been the Chairman of the company since June 1964,
resigned on 20 |
|
| February
1997 and Mr. Harold John Gray was appointed as chairman of the company
forthwith. |
|
|
| I
wish to place on record my colleagues' and my appreciation for the
commendable role of Mr. |
|
| William
Gray during the entire corporate life of the entity since its incorporation.
His presence has |
|
| all
along been a source of strength and support for us. We also express our
earnest desire that Mr. |
|
| William
Gray will continue his inspiring guidance as a senior-most member of the
board. |
|
|
| Mr.
Harold John Gray has also been on the board since June 1964 and, with our all
confidence on his |
|
| leadership,
we welcome him as a chairman of the company. |
|
|
| APPRECIATION |
|
| I
would like to place on record my very special thanks to all at various levels
of management, |
|
| administration
and workers of the company as well as of all associated concerns for their
tireless and |
|
| dedicated
efforts, positive attitude towards corporate goals, and their support to
manage all these |
|
| splendid
achievements. |
|
|
|
| STATEMENT
OF VALUE ADDED AND ITS DISTRIBUTION |
|
|
|
|
June 30, 1997 |
|
June 30, 1996 |
|
|
|
% (Rupees in 000) |
|
% (Rupees in 000) |
% |
|
|
|
|
| Net Sales |
|
85 716 |
|
|
77 833 |
|
| Less:
Materials and services |
44 038 |
|
|
38 861 |
|
|
|
---------- |
|
|
---------- |
|
|
|
41 678 |
|
38 972 |
|
| Other
Income |
|
2 149 |
|
2 420 |
|
|
|
---------- |
|
---------- |
---------- |
---------- |
|
|
|
43 827 |
|
100.00 |
41 392 |
100.00 |
|
|
|
========== |
|
========== |
========== |
========== |
|
| DISTRIBUTION |
|
| To
employees |
|
| Salaries,
wages and benefits |
12 126 |
|
27.67 |
11 353 |
27.43 |
|
| Workers'
profit participation |
1 412 |
|
3.22 |
1 360 |
3.28 |
|
| Interest on Workers' |
|
|
| profit
participation |
|
25 |
|
0.06 |
40 |
0.10 |
|
|
|
---------- |
|
---------- |
---------- |
---------- |
|
|
|
13 563 |
|
30.95 |
12 753 |
30.81 |
|
| The
Government |
|
|
|
|
|
|
| Taxes
on income |
|
748 |
|
1.71 |
1 047 |
2.53 |
|
|
|
|
| To Banks |
|
|
|
|
|
| Interest, Commission
etc. |
1 067 |
|
2.43 |
416 |
1.00 |
|
|
|
|
|
|
| To
Shareholders |
|
|
|
|
|
| Dividend |
14 932 |
|
34.07 |
11 199 |
27.06 |
|
|
|
|
| To
Service to community |
|
|
|
| Donations |
|
940 |
|
2.14 |
927 |
2.24 |
|
|
|
|
| Retained
in business |
|
|
|
| Depreciation |
|
1,422 |
|
3.25 |
1 497 |
3.62 |
|
| Retained
profits |
|
11 155 |
|
25.45 |
13 553 |
32.74 |
|
|
---------- |
|
---------- |
---------- |
---------- |
|
|
|
12 577 |
|
28.70 |
15 050 |
36.36 |
|
|
|
---------- |
|
---------- |
---------- |
---------- |
|
|
|
43 827 |
|
100.00 |
41 392 |
100.00 |
|
|
========== |
|
========== |
========== |
========== |
|
|
|
| Decade
at a Glance |
|
|
| (Rupees
in '000) |
|
|
|
|
Jun 30 |
Jun 30 |
Jun 30 |
Dec 31 |
Dec 31 |
Dec 31 |
Dec 31 |
Dec 31 |
Dec 31 |
Dec 31 |
|
|
1997 |
1996 |
1995 |
1994 |
1993 |
1992 |
1991 |
1990 |
1989 |
1988 |
|
| INCOME |
|
|
| Sales
and Revenues |
|
87 865 |
80 253 |
38 452 |
66 651 |
66 224 |
61 736 |
47 459 |
41 782 |
25 409 |
26 584 |
| Cost
of Sales |
|
45 238 |
38 505 |
19 299 |
232 427 |
27 411 |
25 096 |
23 441 |
20 453 |
12 896 |
14 051 |
| Operating
& Other Costs |
|
15 907 |
16 044 |
7057 |
14 768 |
12 944 |
9 785 |
7 984 |
6 695 |
5 788 |
5 478 |
| Taxes
on Income |
|
633 |
952 |
469 |
767 |
79 |
894 |
2 657 |
2 600 |
1 600 |
1 667 |
| Profit
after Taxation |
|
26 087 |
24 752 |
11 627 |
18 689 |
25 790 |
25 961 |
13377 |
12 034 |
5 125 |
5 381 |
|
| FINANCIAL
POSITION |
|
|
| Current
Assets |
|
96 147 |
61 835 |
66 584 |
78 105 |
73 496 |
61 020 |
39 716 |
38 295 |
21 493 |
18 689 |
| Less:
Current liabilities |
48 353 |
26 491 |
23 403 |
18 433 |
19 035 |
23 119 |
13 030 |
19 064 |
9 946 |
9 015 |
| Net
Working Capital |
|
47 794 |
35 344 |
43 181 |
59 672 |
54 461 |
37 901 |
26 686 |
19 231 |
11 547 |
9 674 |
| Fixed
Assets and long |
|
| Term
deposits |
|
53 040 |
53 132 |
31 742 |
11 090 |
5 078 |
3 673 |
3 772 |
2 985 |
3 114 |
3 409 |
| Net
capital employed |
|
100834 |
88 476 |
74 923 |
70 762 |
59 539 |
41 574 |
30 458 |
22 216 |
14 661 |
13 083 |
| Other
liabilities |
|
- |
- |
- |
- |
- |
360 |
272 |
272 |
272 |
272 |
| Shareholders'
equity |
|
100 834 |
88 476 |
74 923 |
70 762 |
59 539 |
41 214 |
30 186 |
21 944 |
14 389 |
12 811 |
|
| STATISTICS
AND RATIOS |
|
|
| Dividend
(Percentage) |
|
200.00 |
150.00 |
lO0.00 |
100.00 |
100.00 |
200.00 |
70.00 |
60.00 |
47.50 |
45.00 |
| Profit
on shareholders' |
|
|
|
|
|
| Equity
(Percentage) |
|
27.94 |
29.05 |
16.14 |
27.49 |
43.45 |
65.16 |
53.42 |
66.68 |
46.74 |
55.07 |
| Profit
before tax to |
|
|
|
| Sales
(Percentage) |
|
31.17 |
33.02 |
32.63 |
30.51 |
40.22 |
44.71 |
35.03 |
35.52 |
27.04 |
27.08 |
| Current
Assets to |
|
|
| Current
Liabilities |
|
1.99:1 |
2.33:1 |
2.85:1 |
4.24:1 |
3.86:1 |
2.64:1 |
3.05:1 |
2.00:1 |
2.16 |
2.07:1 |
|
|
| Pattern
of shareholdings |
|
| As
at June 30, 1997 |
|
|
| Number of |
|
Shareholdings |
|
Total |
|
| shareholders |
From |
To |
|
shares held |
|
|
| 153 |
|
1 |
100 |
|
9 633 |
|
| 58 |
|
101 |
500 |
|
20 516 |
|
| 17 |
|
501 |
1000 |
|
14 728 |
|
| 13 |
|
1001 |
5000 |
|
27 691 |
|
| 4 |
|
5001 |
10000 |
|
25 012 |
|
| 1 |
|
10001 |
15000 |
|
12 432 |
|
| - |
|
15001 |
20000 |
|
- |
|
| 1 |
|
20001 |
25000 |
|
22 865 |
|
| - |
|
25001 |
30000 |
|
- |
|
| 2 |
|
30001 |
35000 |
|
62 342 |
|
| 1 |
|
35001 |
40000 |
|
37 333 |
|
| - |
|
40001 |
65000 |
|
- |
|
| 1 |
|
65001 |
70000 |
|
65 151 |
|
| 2 |
|
70001 |
80000 |
|
152 730 |
|
| - |
|
80001 |
295000 |
|
- |
|
| 1 |
|
295001 |
300000 |
|
296 167 |
|
| ---------- |
|
|
---------- |
|
| 254 |
|
|
746 600 |
|
| ========== |
|
|
========== |
|
|
| Categories
of |
|
Number of |
|
Shares |
Percentage |
|
| share
holders |
|
share holders |
|
held |
|
|
|
|
|
| Individuals |
|
250 |
|
347 449 |
46.54 |
|
| Investment
Companies |
|
2 |
|
65 651 |
8.79 |
|
| Associated
Companies |
|
2 |
|
333 500 |
44.67 |
|
|
|
---------- |
|
---------- |
---------- |
|
| TOTAL' |
|
254 |
|
746 600 |
100.00 |
|
|
========== |
|
========== |
========== |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed Balance Sheet of Grays of Cambridge (Pakistan)
Limited as at |
|
| June
30, 1997 and related Profit and Loss account and statement of changes in
financial position, |
|
| together
with the notes forming part thereof, for the year then ended and we state
that we have |
|
| obtained
all the information and explanations which to the best of our knowledge and
belief were |
|
| necessary
for the purposes of our audit and, after due verification thereof, we report
that: |
|
|
| (a)
in our opinion, proper books of accounts have been kept by the company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
|
|
| (b)
in our opinion; |
|
|
|
|
| (i)
the balance sheet and profit and loss account together with the notes thereon
have |
|
| been
drawn up in confirmity 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
explanations given to us, |
|
| the
balance sheet, profit and loss account and the statement of changes in
financial position, |
|
| together
with the notes forming part thereof, give the information required by the |
|
