| SHEZAN INTERNATIONAL LIMITED |
|
|
|
|
|
|
|
| ANNUAL
REPORT 1997 |
|
|
|
|
|
| CONTENTS |
|
| Company
s Profile |
|
|
|
| Notice
of Meeting |
|
|
|
|
| Consolidated
Financial Information |
|
|
|
| Consolidated
Balance Sheet |
|
|
|
| Consolidated
Profit and Loss Account |
|
|
| Director's
Report to the Shareholders |
|
|
| Five
Years Review at a Glance |
|
|
|
| Pattern
of Shareholding |
|
|
|
|
| Auditors'
Report to the Members |
|
|
|
| Balance
Sheet |
|
|
|
|
| Profit
and Loss Account |
|
|
|
|
| Statement
of Sources and Application of Funds |
|
|
| Notes
to the Accounts |
|
|
|
|
| Statement
U/S 237 of the Companies Ordinance, 1984 |
|
| Report
and Accounts of Hattar Fruit Products Limited |
|
|
|
| Company's
Profile |
|
|
| BOARD
OF DIRECTORS: |
|
|
|
|
| Mr.
Muneer Nawaz |
Chairman |
|
| Mr.
Saifi Chaudhary |
Chief Executive |
|
| Mrs.
Majeeda Begum |
|
| Mr.
Mahmood Nawaz |
|
| Mr.
C.M. Khalid |
|
| Mr.
M. Naeem |
|
| Mrs.
Amtul Hai Khalid |
|
| Mr.
Muhammad Khalid |
|
| Mr.
Sk. Jahangir (Nominee N.I.T) |
|
|
| EXECUTIVE
DIRECTOR & SECRETARY: |
|
| Mr.
Muhammad Khalid |
|
|
| REGISTERED
OFFICE / HEAD OFFICE: |
|
| 56-Bund
Road, Lahore-54500. |
|
|
| FACTORIES: |
|
|
| Lahore: |
|
| Bund
Road, Lahore. |
|
| Ph: |
(042) 7466900- 04 |
|
| Fax: |
(042) 7466899 |
|
| Telex: |
47275 SHEZN PK |
|
| Grams: |
SHEZJUICE |
|
| E-Mail: |
shezan@brain.net.pk |
|
|
| Karachi: |
|
| Federal
B. Industrial Area. |
|
| Ph: |
(021) 6344722-23 |
|
| Fax: |
(021) 6313790 |
|
| Telex: |
23160 SHZAN PK |
|
| E-Mail: |
shezan@cyber. net.pk |
|
|
| AUDITORS: |
|
|
| Messrs
Ford, Rhodes, Robson, Morrow |
|
| Chartered
Accountants |
|
| 1st
Floor, The Syed, 11-Civic Centre, |
|
| New
Garden Town, Lahore. |
|
|
| LEGAL
ADVISORS: |
|
|
| Messrs
Cornelius, Lane & Mufti |
|
| Nawa-i-Waqt
Building, |
|
| Shahtab-e-Fatima
Jinnah, Lahore. |
|
|
| BANKERS: |
|
| United
Bank Limited. |
|
| Citibank
N.A. |
|
| The
Bank of Khyber. |
|
|
|
|
|
| Notice
of Meeting |
|
|
| Notice
is hereby given that the 34th Annual General Meeting of the Company will be
held on Tuesday, 30th |
|
| December,
1997 at 10.30 hours at Hotel Avari, Shahrah-e-Quaid-e-Azam, Lahore to
transact the following |
|
| business:- |
|
|
|
| 1.
To confirm the Minutes of Annual General Meeting held on 30th December, 1996. |
|
|
|
|
| 2.
To receive and adopt the Directors' and Auditors' Reports and Audited
Accounts for the year ended |
|
| 30th
June, 1997. |
|
|
|
|
|
|
|
|
| 3.
To approve the dividend @ Rs. 3.00 per share as recommended by the Board of
Directors. |
|
|
|
|
| 4.
To appoint Auditors for the year 1997-98 and to fix their remuneration. The
present Auditors Messrs |
|
| FORD,
RHODES, ROBSON, MORROW, Chartered Accountants being eligible, offer
themselves |
|
| for
re-appointment. |
|
|
| 5.
To transact any other business with the permission of the Chair. |
|
|
| Shares
Tansfer Book of the Company will be closed from 29th December, 1997 to 08th
January, 1998 (both |
|
| days
inclusive) for determining entitlement of the dividend. |
|
|
| NOTES: |
|
|
|
|
| 1.
A member entitled to attend and vote at the General Meeting is entitled to
appoint a proxy to attend |
|
| and
vote on his/her behalf. Form of Proxies, in order to be valid, must be
received at the Registered |
|
| Office
of the Company not less than 48-hours before the Meeting. |
|
|
|
|
| 2.
Shareholders are requested to notify the change of address if any,
immediately. |
|
|
|
| Consolidated
Financial Information |
|
|
| Shezan
International Limited and its subsidiary, |
|
| Hattar
Fruit Products Limited |
|
|
| GENERAL
INFORMATION SUBSIDIARIES |
|
|
|
|
| Name |
|
|
Hattar Fruit Products
Limited |
|
|
|
|
| Accounting
year end |
|
June 30 |
|
| Percentage
of holding |
|
100% |
|
| Nature
of business |
|
Manufacture and sale of
juices, beverages, |
|
|
pickles, preserves and
flavourings based upon or |
|
|
derived from fresh fruits
and vegetables. |
|
|
| Reserves
attributable to member of the parent dealt with |
|
| in
the financial statements of the parent: |
|
|
|
|
| -
In the current year |
|
NIL |
|
| -
In the previous years |
|
NIL |
|
|
|
|
| Reserves
attributable to members of the parent not |
|
| dealt
within the financial statement of the parent: |
|
|
| In
the current year |
|
NIL |
|
| In
the previous years |
|
NIL |
|
|
| ASSOCIATE |
|
|
|
| Name
of the Associated Company |
Basis of Association |
|
| NOT
APPLICABLE |
|
|
|
| TRANSACTIONS
WITH SUBSIDIARIES/ASSOCIATED COMPANIES |
|
|
| Type
of Transaction |
|
Value during the period |
|
Basis of determination of
the transaction value |
|
|
|
|
(Rupees in thousands) |
|
|
|
| Purchases |
|
99,651 |
|
Standard sales policy. |
|
| Sales |
|
16,218 |
|
Cost to Shezan
International Limited. |
|
| Interest
earned |
|
Nil |
|
- |
|
|
| Subsidiaries/Associated
Companies Balances |
|
|
Year end |
Nature of |
Maximum balance at the
end of |
|
|
Balance |
Balance |
any month during the year |
|
|
|
|
(Rupees in thousands) |
|
|
|
| Hattar
Fruit Products Limited |
Nil |
Advance |
Nil |
|
|
|
| Details
of Group Banking Arrangements |
|
| (e.g.
Cross guarantee's charge on group assets to secure the debts) |
|
| NOT
APPLICABLE |
|
|
|
| Consolidated
Balance Sheet as at June 30, 1997 |
|
| Shezan
International Limited and its subsidiary, |
|
| Hattar
Fruit Products Limited |
|
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
(Rupees in thousands) |
|
| TANGIBLE
FIXED ASSETS |
|
|
|
|
|
| Operating
fixed assets |
|
|
90,342 |
99,749 |
|
| Capital
work-in-progress |
|
|
- |
716 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
90,342 |
100,465 |
|
|
|
|
|
|
|
| LONG
TERM INVESTMENT |
|
|
1,250 |
1,250 |
|
| LONG
TERM DEPOSITS |
|
|
1,074 |
1,126 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
92,666 |
102,841 |
|
| CURRENT
ASSETS |
|
|
|
|
|
---------- |
---------- |
|
| Stores
and spares |
|
|
24,287 |
38,236 |
|
| Stock
in trade |
|
|
214,443 |
221,738 |
|
| Trade debts |
|
|
|
35,394 |
28,336 |
|
| Loans
and advances |
|
|
3,967 |
3,134 |
|
| Advances,
deposits and prepayments |
|
|
| and
other receivables |
|
|
11,297 |
4,727 |
|
| Cash
and bank balances |
|
|
17,675 |
12,198 |
|
|
|
|
|
---------- |
---------- |
|
|
|
307,063 |
308,369 |
|
| LESS:
CURRENT LIABILITIES |
|
|
|
|
|
---------- |
---------- |
|
| Short-term
running finances |
|
28,388 |
26,651 |
|
| Current
maturity of long term loans |
|
3,750 |
6,625 |
|
| Current
maturity of obligations under finance lease |
1,825 |
864 |
|
| Creditors,
accrued and other liabilities |
|
68,000 |
76,913 |
|
| Provision
for taxation |
|
|
754 |
9,257 |
|
| Dividends |
|
|
15,096 |
21,950 |
|
|
|
---------- |
---------- |
|
|
|
117,813 |
142,260 |
|
|
|
---------- |
---------- |
|
| WORKING
CAPITAL |
|
|
189,250 |
166,109 |
|
|
|
---------- |
---------- |
|
| CAPITAL
EMPLOYED |
|
|
281,916 |
268,950 |
|
| LESS:
LONG TERM AND DEFERRED LIABILITIES |
|
|
|
| Long-term
loans |
|
|
3,750 |
7,500 |
|
| Deferred
taxation |
|
|
3,000 |
4,000 |
|
| Obligations
under finance lease |
|
1,773 |
3,598 |
|
|
|
---------- |
---------- |
|
|
|
8,523 |
15,098 |
|
|
|
---------- |
---------- |
|
|
|
273,393 |
253,852 |
|
|
|
========== |
========== |
|
| REPRESENTED
BY: |
|
|
|
| Issued,
subscribed and paid up capital |
|
50,000 |
50,000 |
|
| Reserves
attributable to Parent Company |
|
|
|
| Revenue
reserves |
|
200,000 |
145,000 |
|
| Retained
earnings |
|
18,412 |
53,852 |
|
| Bonus
shares received |
|
|
|
5,000 |
5,000 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
223,412 |
203,852 |
|
| Minority
interest |
|
|
- |
- |
|
|
|
---------- |
---------- |
|
|
|
273,412 |
253,852 |
|
|
|
========== |
========== |
|
|
|
| Consolidated
Profit and Loss Account for the year ended June 30,1997 |
|
| Shezan
International Limited and its subsidiary, |
|
| Hattar
Fruit Products Limited |
|
|
|
1997 |
1996 |
|
|
|
|
|
(Rupees in thousands) |
|
|
|
|
|
|
|
|
|
|
|
| Consolidated
sales |
|
590,909 |
724,795 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
| Net
Profit for the year |
|
|
|
|
|
|
| Shezan
International Limited |
|
22,690 |
40,547 |
|
| Hattar
Fruit Products Limited |
|
13,079 |
31,992 |
|
|
|
---------- |
---------- |
|
|
|
35,769 |
72,539 |
|
| Less:
Adjustment for unrealised profits and |
|
|
|
| inter
group dividends |
|
- |
- |
|
|
|
---------- |
---------- |
|
| Consolidated
profit before taxation |
|
35,769 |
72,539 |
|
| Provision
for taxation |
|
1,209 |
16,658 |
|
|
|
---------- |
---------- |
|
| Consolidated
profit after taxation |
|
34,560 |
55,881 |
|
| Less:
Minority interest |
|
- |
- |
|
|
|
---------- |
---------- |
|
| Net
profit attributed to Parent Company |
|
34,560 |
55,881 |
|
|
|
========== |
========== |
|
| STATEMENT
OF RETAINED EARNINGS |
|
|
|
|
|
|
| Retained
earnings brought forward |
|
|
53,852 |
80,721 |
|
| Net
profit for the year |
|
|
|
34,560 |
55,881 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
88,412 |
136,602 |
|
|
|
|
| Appropriations: |
|
|
---------- |
---------- |
|
| Transfer
to General Reserve |
|
|
55,000 |
56,500 |
|
| Proposed
dividend @ 30% (1996: 42.50%) |
|
15,000 |
21,250 |
|
| Bonus
shares |
|
|
|
- |
5,000 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
70,000 |
82,750 |
|
|
|
|
|
---------- |
---------- |
|
| Retained
earnings carried forward |
|
|
18,412 |
53,852 |
|
|
|
========== |
========== |
|
|
|
|
|
| Director's
Report to the Shareholders |
|
|
|
| It
gives us great pleasure to welcome you to the 34th Annual General |
|
| Meeting
of the Company. Sales during the year under review were |
|
| Rs.
536.428 million as compared to Rs. 645.893 million last year. |
|
| As
you will observe there has been a substantial fall in sales and
~,¢ |
|
| our
sales are about 17% less than last year. Our after tax profit was |
|
| Rs.
18.690 million this year as compared with Rs. 26.097 million |
|
| last
year. We had been informing our shareholders from time to time |
|
| since
last year that the prospects are not' that good keeping in view the |
|
| general
economic conditions of the country and the effects of inflation on our input
cost. |
|
| Keeping
in view consumers resistance due to general decline in disposable income, it
is not possible to pass |
|
| on
all the cost of production increase to the customer. As a result we had to
absorb the increase without |
|
| getting
an increase in price. Our products are not essentials and whenever there is
an economic slow down, |
|
| people
tend to decrease the consumption of our products. The fall in sales has been
about 17% and the fall in |
|
| after
tax profit is 28%; the fall in after tax profit is a direct consequence of
the decrease in sales and increase |
|
| in
input cost of which our shareholders are well aware. As an example, just in
case of utilities the increase has |
|
| been
about 30% as compared to the previous year. The tariff on imported |
|
| products
has also been reduced and because of this there is an increasing |
|
| competition
due to the availability of large quantities of imported consumer |
|
| products
in the market which, in turn, effects our margins. |
|
|
| I
am pleased to inform the shareholders that or exports showed a healthy |
|
| growth
this year and we were able to increase our exports from Rs. 53.288 |
|
| million
to Rs. 71.069 million. |
|
|
| The
continued slow down in the economic activity of the country due to political
uncertainty is a cause of |
|
| concern
for all of us and we pray and hope that the situation would improve in the
coming months. |
|
|
| FINANCIAL
RESULTS |
|
| As
you will observe from Balance Sheet and Profit and Loss Account our financial
results are as under: |
|
|
|
|
|
(Rupees in thousands) |
|
| Profit
Before Taxation |
|
|
22,690 |
|
| Provision
for Taxation |
|
|
4,000 |
|
|
|
|
---------- |
|
| Profit
after Taxation |
|
|
18,690 |
|
| Unappropriated
Profit Brought Forward |
|
3,536 |
|
|
|
|
---------- |
|
| Available
for Appropriation |
|
22,226 |
|
| Appropriations: |
|
|
|
|
| Proposed
dividends @ 30% (1996: 42.50%) |
|
15,000 |
|
| Transfer
to General Reserve |
|
5,000 |
|
|
|
|
---------- |
|
| Unappropriated
profit carried forward |
|
20,000 |
|
|
|
|
2,226 |
|
|
|
| DIVIDEND |
|
|
| You
are aware that it has always been the policy of the |
|
| company
to share the profit with the shareholders and we |
|
| have
been quite generous in this regard in the past. |
|
| However,
due to slow down in profits this year, the |
|
| dividend
policy has to be conservative and prudent. |
|
|
| FUTURE
PROSPECTS |
|
| Your
Directors feel that the fruit and vegetable industry |
|
| is
going through a crisis and the Government should come out with a package of
incentives for this industry. |
|
|
|
|
| This
industry has a direct positive affect on the rural economy as we buy in large
quantity the produce from |
|
| the
farmers. |
|
|
| Shezan
brand is still, by the Grace of Allah, a very strong brand in the mind of the
consumer and we are |
|
| confident
that with the improvement in the economy we would be able to come up to our
previous level of |
|
| performance. |
|
|
| We
plan to concentrate more on the exports as our products are becoming popular
in the export market. We |
|
| also
plan to cut down our cost to the maximum extent wherever ~ |
|
| possible
so that the financial position of the company is |
|
| strengthened. |
|
|
|
| In
order to make up the lost sales, we plan to somewhat diversify |
|
| our
product range to capture the new segments of the market. |
|
|
|
|
|
|
|
| We
can say nothing about the performance of the company in |
|
| the
coming months but we can assure our shareholders that |
|
| since
we are a strong brand name in the mind of the consumer, |
|
| we
are confident that with the upturn in the economy, we would be able to get
our due market share and |
|
| improve
our performance. We continue to make our humble contribution to the National
Exchequer by |
|
| contributing
Rs. 29,035,987 in the shape of Excise Duty and Rs. 67,377,028 in Sales Tax
for the year ended |
|
| 30th
June, 1997. |
|
|
| AUDITORS |
|
| The
present Auditors Messrs. Ford, Rhodes, Robson, Morrow, Chartered Accountants
have conveyed their |
|
| willingness
to be appointed in the ensuing year. |
|
|
| LABOUR
& MANAGEMENT RELATIONS |
|
| During
the year under review, the labour and management relations remained cordial. |
|
| Your
Directors place on record their appreciation for the loyalty and devotion to |
|
| duty
of the officers and workers of all categories. |
|
|
|
| Five
Years Review At a Glance |
|
|
|
|
(Rupees in thousands) |
|
|
Year |
Year |
Year |
Year |
Year |
|
|
|
1993 |
1994 |
1995 |
1996 |
1997 |
|
|
|
|
|
|
|
(Six months) |
|
|
|
|
|
|
|
| Income |
|
|
|
|
|
| Sales |
|
466,798 |
548,163 |
397,417 |
682,248 |
536,428 |
|
| Others |
|
9,523 |
4,308 |
1,336 |
3,911 |
2,154 |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
476,321 |
552,471 |
398,753 |
686,159 |
538,582 |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
| Expenditure |
|
|
| Cost
of Sales |
|
329,490 |
400,925 |
288,154 |
524,704 |
415,481 |
|
| Administrative, |
|
|
| Selling
and General |
|
73,709 |
79,487 |
53,516 |
99,956 |
82,819 |
|
| Financial |
|
6,312 |
4,887 |
1,860 |
3,452 |
1,986 |
|
| Others |
|
17,787 |
16,509 |
10,575 |
17,500 |
15,606 |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
427,298 |
501,808 |
354,105 |
645,612 |
515,892 |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
|
|
| Profit
before taxation |
|
49,023 |
50,663 |
44,648 |
40,547 |
22,690 |
|
| Taxation |
|
19,500 |
17,707 |
16,500 |
14,450 |
4,000 |
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
|
| Profit
after taxation |
|
29,523 |
32,956 |
28,148 |
26,097 |
18,690 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
| Paid
up Capital |
|
|
| Ordinary
Shares of Rs. 10 |
|
| each
(thousands shares) |
|
5,000 |
5,000 |
5,000 |
5,000 |
5,000 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
| Reserves
& Unappropriated |
|
| Profits |
|
75,083 |
83,039 |
93,689 |
98,536 |
102,226 |
|
| Shareholders
Equity |
|
125,083 |
133,039 |
143,689 |
148,536 |
152,226 |
|
| Break
Up value per share (Rs.) |
25.92 |
27.51 |
29.64 |
30.51 |
31.04 |
|
| Earnings
Per Share (Rs.) |
5.90 |
6.60 |
5.63 |
5.22 |
3.74 |
|
| Cash
Distribution per share (Rs.) |
5.00 |
5.00 |
3.50 |
4.25 |
3.00 |
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| Pattern
of Shareholders as on June 30, 1997 |
|
|
|
|
|
| No. of |
Shareholding |
Total |
|
|
| Shareholders |
From |
To |
Shares Held |
|
|
| 62 |
1 |
100 |
6,200 |
|
|
| 151 |
101 |
500 |
62,900 |
|
|
| 41 |
501 |
1,000 |
37,000 |
|
|
| 46 |
1,001 |
5,000 |
109,500 |
|
|
| 5 |
5,001 |
10,000 |
32,100 |
|
|
| 2 |
10,001 |
15,000 |
26,450 |
|
|
| 1 |
15,001 |
20,000 |
15,500 |
|
|
| 4 |
20,001 |
25,000 |
87,330 |
|
|
| 3 |
25,001 |
30,000 |
84,575 |
|
|
| 2 |
30,001 |
35,000 |
69,405 |
|
