| Clariant Pakistan Limited |
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|
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|
|
|
|
|
|
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| Clariant
Scientific Centre |
|
|
| The
establishment of Clariant Scientific Centre in Korangi, Karachi with total investment of Rs 120 |
|
| Million
in 1996 is a milestone in the history of Clariant Pakistan. It is a
manifestation of Clariant's |
|
| Commitment
to support the national economy by contributing to country's largest foreign
exchange |
|
| earning
textile and leather industries. |
|
|
| Clariant
Scientific Centre is one of the most modern Scientific Centres in the
Clariant world and is the |
|
| only
one of its kind in Pakistan. Spread over 4000 square metres, facilities for
Industrial Lines Textiles |
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| and
Leather represent state of the art technologies which play decisive role in
our customers' |
|
| manufacturing
processes and upgrade their end product. |
|
|
| Dedicated
textile laboratories with most modern equipment and high calibre motivated
staff provide |
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| service
and solve problems covering the whole spectrum of textile industry starting
from sizing to |
|
| finishing.
This centre's new addition, 'Eco Lab', equipped with advanced facilities for
effluent testing |
|
| is
yet another proof of Clariant's concern for environment. |
|
|
| Leather
Centre at the premises houses sophisticated and modern machinery for the
physical and |
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| chemical
testing. It also has expertise for treating leather to transform the raw
material into high |
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| quality
value added articles of clothing and upholstery in addition to traditional
products. Other |
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| facilities
include Foam Finishing and Roller Coating. |
|
|
| Ultra
modern Training Centre with an auditorium and audio-visual facilities is
providing training to the |
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| students
and technicians coming from universities and industrial units. |
|
|
|
| Contents |
|
|
| Company
Information |
|
| Report
of the Board of Directors |
|
| Notice
of Meeting |
|
| Auditors'
Report to the Members |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| Company
Information |
|
|
| Chairman |
|
U. Cuntze |
|
|
|
| Chief
Executive & |
|
| Managing
Director |
Farhat A. Mirza |
|
|
|
| Directors |
|
P. Brandenburg |
|
{Alternate: Dr. S.A.O
Shah) |
|
|
|
Albert Hug |
|
(Alternate: S. K. Mehdi) |
|
|
|
Herbert Wohlmann |
{Alternate: Dr. S.
Mubarik Ali) |
|
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|
F. Dennefeld |
|
|
|
Razi-ur-Rehman Khan |
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| Secretary |
|
S.K. Mehdi |
|
|
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| Bankers |
|
ABN- Amro Bank |
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|
Allied Bank of Pakistan
Limited |
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|
ANZ Grindlays Bank plc |
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|
Bank of Tokyo &
Mitsubishi Ltd. |
|
|
Credit Agricole Indosuez
- The Global French Bank |
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|
Citibank N.A. |
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|
Deutsche Bank |
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|
Emirates Bank
International PJSC |
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|
Habib Bank Limited |
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|
The Hongkong &
Shanghai Banking Corporation Limited |
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|
National Bank of Pakistan |
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|
Standard Chartered Bank |
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|
Societe Generale - The
French and International Bank |
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| Auditors |
|
A.F. Ferguson & Co.,
Chartered Accountants |
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|
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| Registered
Office |
5th Floor, Bahria Complex |
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|
24, M. T. Khan Road, |
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|
|
Karachi. |
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| Share
Registrars |
Ferguson Associates
(Pvt.) Ltd. |
|
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|
State Life Building 1-A |
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|
I.I. Chundrigar Road |
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|
Karachi. |
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| Factories |
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Petaro Road, Jamshoro |
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|
Korangi Industrial Area,
Karachi |
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|
Katarband Road, Thokar
Niaz Baig, Lahore |
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|
| Report
of the Board of Directors |
|
|
| The
Directors of your company take pleasure in presenting the |
|
| Annual
Accounts for the operating year of the Company ended |
|
| on
31 December 1998. |
|
|
| Board
of Directors |
|
|
| Dr
H Knopfel, Mr F E Fetzer and Mr J Mahler resigned from the |
|
| Board.
Mr U Cuntze, Mr P Brandenberg and Mr F Dennefeld |
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| joined
the Board as nominees of Clariant International Limited |
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| and
Mr U Cuntze was elected Chairman of the Board of |
|
| Directors.
The Board places on record its appreciation for the |
|
| valuable
contribution made by the outgoing directors and |
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| welcomes
the new members on the Board. |
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|
| Business
Overview |
|
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| The
Board is pleased to record that sales grew by 20% during |
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| the
year despite economic sanctions imposed on Pakistan after |
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| the
nuclear test in May 1998. Higher sales were also possible |
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| partly
due to greater emphasis on exports during the year which |
|
| were
highest ever at Rs §8 Mio. |
(Rs '000) |
|
|
| Low
activity in textile processing units as well as leather industry, |
|
| combined
with cheaper imports of dyes and chemicals, kept |
|
| selling
prices under severe pressure. Sales of Masterbatches and |
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| Cellulose,
Ethers & Polymerisates have shown good growth |
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| despite
cheaper imported substitutes and competition from |
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| indigenous
manufacturers. |
|
|
| Efforts
to keep working capital low showed positive results. Net |
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| current
assets, after deducting trade creditors and other current |
|
| liabilities,
have increased by only 5%. This is well below the rate |
|
| of
inflation, not mentioning the increase in sales. |
|
|
| Operating
profit increased in line with sales. However, profit after |
|
| taxation
has been wiped out entirely by two major factors. The |
|
| foremost
of these was the exchange loss suffered on repatriable |
|
| loan
of USD 10 Mio for financing the purchase of assets of |
|
| Hoechst
Specialty Chemicals Business. Restrictions imposed by |
|
| the
State Bank of Pakistan on remittances of foreign exchange |
|
| resulted
in a forced roll over of the loan at an exorbitant cost due |
|
| to
a major change in the exchange rate mechanism and high |
|
| forward
cover cost. Additionally, the substantial provision for bad |
|
| and
doubtful debts has increased tax liability out of proportion to |
|
| the
income. Efforts to recover long overdue outstanding continue |
|
| leading
to, in some cases, legal proceedings against major |
|
| defaulters
but regrettably the progress is slow. |
|
|
|
| Central
Depository Company of Pakistan Ltd. (CDC) |
|
|
| The
Board is pleased to state that shares of your Company have |
|
| become
eligible for book entry transactions in CDC with effect |
|
| from
10 February 1999. |
|
|
| Finance
and Accounts |
|
|
| For
reasons stated earlier, the profit after tax for the year is only |
|
| Rs
4.87 Mio. Together with the unappropriated profit brought |
|
| forward
from the previous year, a total of Rs 8.57 Mio is available |
|
| for
appropriation. |
|
|
| Considering
the continued need to conserve cash for business and |
|
| provide
some return to the shareholders, the Directors have |
|
| decided
to propose a stock dividend (bonus shares) of 15% out of |
|
| Reserves. |
|
|
| The
proposed appropriation of profit of the Company is as under: |
|
|
| Profit
for the year after taxation |
|
4,868 |
|
| Unappropriated
profit brought forward |
|
3,706 |
|
| Transfer
from General Reserve |
|
12,000 |
|
|
---------- |
|
| Profit
available for appropriation |
|
20,574 |
|
| Proposed
stock dividend @ 15% |
|
20,344 |
|
|
---------- |
|
| Unappropriated
profit carried forward |
|
230 |
|
|
---------- |
|
| Pattern
of Shareholding |
|
|
| A
statement of the pattern of shareholding is shown on Page 28. |
|
|
| Holding
Company |
|
|
| The
Company is a subsidiary of Clariant International Limited |
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| incorporated
in Switzerland. |
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|
| Auditors |
|
|
| The
present auditors, Messrs A.F. Ferguson & Co., retiring on the |
|
| date
of Annual General Meeting, being eligible, have offered |
|
| themselves
for reappointment. |
|
|
| Future
Outlook |
|
| The
need of the time is optimization of existing production |
|
| Capacity
and rationalization of manufacturing facilities. Your |
|
| Company
has accordingly embarked upon a programme of |
|
| concentrating
production to obtain maximum synergies. In line |
|
| with
the Government's anticipation to bring the economy |
|
| back
on rail your company is hopeful of better business |
|
| opportunities
in the coming year. |
|
|
| Your
company is, therefore, aware of the rapid changes in |
|
| economic
scene and is taking every possible step to maintain |
|
| growth
in operations. Emphasis on enhancing company's |
|
| competitive
edge in the market by providing unmatched |
|
| quality
of service to customers will continue. |
|
|
| Sale
of products belonging to Division Cellulose Ethers & |
|
| Polymerisates,
major component of Specialty Chemicals |
|
| Business
acquired from Hoechst, has shown encouraging |
|
| results
and your company has regained the market lost to |
|
| competitors
in the past. |
|
|
| Acknowledgement |
|
| 1998
was the first full year of operations after the integration |
|
| of
Hoechst's Specialty Chemicals into Clariant. The Board is |
|
| pleased
to record its recognition for the excellent effort put in |
|
| by
all members of the staff and workers and looks forward to |
|
| their
continued dedication and interest for maintaining the |
|
| growth
and increasing productivity. |
|
|
|
On behalf of the Board |
|
|
|
Farhat A Mirza |
|
| Karachi:
23 April 1999 |
|
Managing Director |
|
|
|
| Notice
of Meeting |
|
|
|
| NOTICE
is hereby given that the Third Annual General |
|
| Meeting
of Clariant Pakistan Limited will be held at the |
|
| Overseas
Investors Chamber of Commerce & Industry, |
|
| Chamber
of Commerce Building, Talpur Road, Karachi |
|
| on
Monday, 7 June 1999 at 10:00 a.m. for the purpose |
|
| of
transacting the following business: |
|
|
| Ordinary
Business: |
|
|
| 1.
To receive and approve the Audited Accounts for |
|
| the
year ended 31 December 1998 alongwith the |
|
| Directors'
Report thereon. |
|
|
| 2.
To appoint auditors for the year ending 31 December |
|
| 1999
and to fix their remuneration. M/s. A.F. Ferguson |
|
| &
Company, Chartered Accountants, the retiring |
|
| auditors
offer themselves for reappointment. |
|
|
| Special
Business: |
|
|
| 3.
To approve 15% stock dividend (bonus shares) |
|
| out
of the Company's profit and reserves as |
|
| recommended
by the directors and to adopt the |
|
| following
ordinary resolution. |
|
|
| "RESOLVED
that in pursuance of Article 109 of the |
|
| Articles
of Association of the Company a sum of |
|
| Rs
20,343,580 out of the Company's profit and |
|
| reserves
be and is hereby capitalized by issue of |
|
| 2,034,358
bonus shares of Rs 10 each fully paid and |
|
| for
this purpose the directors be and are hereby |
|
| authorized
to apply the said sum of Rs 20,343,580 |
|
| for
issuance of 2,034,358 bonus shares as fully paid |
|
| ordinary
shares to such members who are registered |
|
| in
the books of the Company on 7 June 1999 in the |
|
| proportion
of 15 shares for every 100 shares held by |
|
| them
and that such new shares shall rank peri passu |
|
| in
all respect with the existing ordinary shares. |
|
|
| FURTHER
RESOLVED that the fractional bonus |
|
| entitlements
will be consolidated into whole shares |
|
| and
issued in the name of any one of the directors |
|
| to
be disposed off by him in the market and proceeds |
|
| thereof
shall be paid out to the respective shareholders |
|
| according
to their entitlements. For this purpose Messrs |
|
| Farhat
A Mirza, S K Mehdi and M V Arif be and are |
|
| hereby
authorized to execute all necessary documents |
|
| and
to complete all necessary formalities with joint |
|
| signatures
by any two of them to settle any dispute |
|
| that
may arise with regard to the distribution of the |
|
| said
bonus shares or in the payment of sale proceeds |
|
| of
the fractional entitlements as they think fit." |
|
|
| 4.
To transact any other ordinary business with the |
|
| permission
of the Chair. |
|
|
| By
Order of the Board |
|
|
| S K Mehdi |
|
| Secretary |
|
|
| Karachi:
23 April 1999 |
|
|
| NOTES: |
|
|
| 1
The share transfer books of the Company will remain closed from 27 May to 7
June 1999 (both days inclusive). Transfers received |
|
| in
order by the Share Registrars, Ferguson Associates (Private) Limited at State
Life Building No. l-A, I.I. Chundrigar Road, Karachi |
|
| by
26 May 1999 will be in time to entitle the transferees for the bonus issue
and to attend and vote at the Annual General Meeting. |
|
|
| 2.
A member entitled to attend and vote at the Annual General Meeting may
appoint a proxy to attend and vote instead of him/her. A |
|
| proxy
need not be a member of the Company. Proxies, in order to be valid must be
received at the Registered Office of the Company |
|
| not
later than 48 hours before the Meeting. |
|
|
| Statement
under Section 160 of the Companies Ordinance 1984: |
|
|
| 1.
In the opinion of the Directors the financial position of the Company
justifies a bonus issue of 15%. |
|
| 2.
The Directors are interested in the special business only to the extent of
their shareholdings in the Company. |
|
|
|
| Auditor's
Report to the Members |
|
|
| We
have audited the annexed Balance Sheet of Clariant |
|
| Pakistan
Limited as at December 31, 1998 and the related |
|
| Profit
and Loss Account and the Cash Flow Statement, |
|
| together
with the notes forming part thereof, for the year |
|
| then
ended and we state that we have obtained all the |
|
| information
and explanations which to the best of our |
|
| knowledge
and belief were necessary for the purposes of |
|
| our
audit and, after due verification thereof, we report |
|
| that: |
|
|
| (a)
in our opinion, proper books of account have been |
|
| kept
by the company as required by the |
|
| Companies
Ordinance, 1984; |
|
|
| (b) in our opinion: |
|
|
| (i)
the Balance Sheet and Profit and Loss |
|
| Account
together with the notes thereon |
|
| have
been drawn up in conformity with the |
|
| Companies
Ordinance, 1984 and are in |
|
| agreement
with the books of account and |
|
| are
further in accordance with accounting |
|
| policies
consistently applied; |
|
| |
|
| (ii)
the expenditure incurred during the year |
|
| was
for the 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 the explanations given to us, the |
|
| Balance
Sheet, Profit and Loss Account and the |
|
| Cash
Flow Statement, together with the notes |
|
| forming
part thereof, give the information required |
|
| by
the Companies Ordinance, 1984 in the manner |
|
| so
required and respectively give a true and fair |
|
| view
of the state of the company's affairs as at |
|
| December
31, 1998 and of the profit and cash |
|
| flows
for the year then ended; and |
|
|
| (d)
in our opinion no Zakat was deductible at source |
|
| under
the Zakat and Ushr Ordinance, 1980. |
|
|
|
| Karachi: 23 April 1999 |
|
A. F. FERGUSON & Co. |
|
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at December 31, 1998 |
|
|
Note |
1998 |
1997 |
|
|
|
(Rupees '000) |
|
| Share
Capital and Reserves |
|
|
| Authorised
capital |
|
| 50,000,000
(1997:20,000,000) ordinary shares of Rs 10 each |
|
500,000 |
200,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
3 |
135,624 |
100,462 |
|
| Capital
reserves |
|
4 |
20,344 |
35,162 |
|
| Revenue
reserve |
|
5 |
150,000 |
162,000 |
|
| Unappropriated
profit |
|
|
230 |
3,706 |
|
|
|
---------- |
---------- |
|
|
|
306,198 |
301,330 |
|
| Redeemable
Capital |
|
6 |
441,602 |
162,600 |
|
|
| Current
Liabilities |
|
| Current
portion of redeemable capital |
|
6 |
-- |
218,225 |
|
| Short-term
loans |
|
7 |
846,250 |
841,400 |
|
| Short-term
running finances utilised under |
|
| mark-up
arrangements |
|
8 |
498,228 |
502,857 |
|
|
|
|
| Creditors,
accrued and other liabilities |
|
9 |
444,977 |
371,527 |
|
|
|
---------- |
---------- |
|
|
|
1,789,455 |
1,934,009 |
|
|
|
|
| Contingent
Liabilities and Commitments |
|
10 |
|
|
---------- |
---------- |
|
|
2,537,255 |
2,397,939 |
|
|
========== |
========== |
|
| Tangible
Fixed Assets |
|
| Operating
assets |
|
11 |
564,852 |
608,408 |
|
| Capital
work-in-progress |
|
12 |
26,975 |
6,727 |
|
|
|
---------- |
---------- |
|
|
|
591,827 |
615,135 |
|
|
|
|
| Long-term
Loans and Advances |
|
13 |
4,772 |
2,947 |
|
| Long-term
Deposits and Prepayments |
|
14 |
2,042 |
5,261 |
|
|
|
|
| Current
Assets |
|
|
|
| Stores
and spares |
|
15 |
36,783 |
34,390 |
|
| Stock-in-trade |
|
16 |
749,568 |
755,391 |
|
| Trade debts |
|
17 |
763,026 |
747,579 |
|
| Loans
and advances |
|
18 |
9,260 |
6,870 |
|
| Deposits
and short-term prepayments |
|
19 |
83,923 |
19,162 |
|
| Taxation
recoverable |
|
|
186,104 |
99,275 |
|
| Other
receivables |
|
20 |
35,605 |
65,247 |
|
| Cash
and bank balances |
|
21 |
74,345 |
46,682 |
|
|
|
---------- |
---------- |
|
|
1,938,614 |
1,774,596 |
|
|
|
|
|
---------- |
---------- |
|
|
2,537,255 |
2,397,939 |
|
| The
annexed-notes form an integral part of these accounts. |
|
========== |
========== |
|
|
| Farhat
A Mirza |
|
S K Mehdi |
|
| Chief
Executive |
|
Director |
|
|
|
|
| Profit
and Loss Account |
|
| for
the year ended December 31, 1998 |
|
|
Note |
1998 |
1997 |
|
|
|
(Rupees '000) |
|
|
| Turnover |
|
22 |
2,578,754 |
2,138,495 |
|
|
| Discount
and commission |
|
173,978 |
107,659 |
|
| Excise
duty and sales tax |
|
290,206 |
243,468 |
|
|
---------- |
---------- |
|
|
464,184 |
351,127 |
|
|
---------- |
---------- |
|
| Net Sales: |
|
2,114,570 |
1,787,368 |
|
| Cost
of Sales: |
|
|
| Cost
of goods sold |
|
23 |
14,938,991 |
1,345,661 |
|
| Administration
and marketing expenses |
|
24 |
2,901,621 |
223,981 |
|
|
|
---------- |
---------- |
|
|
1,784,061 |
1,569,642 |
|
|
---------- |
---------- |
|
|
330,509 |
217,726 |
|
| Indent
commission- |
|
| net
of payment of Rs 5.361 million (1997: Rs 1.550 million) |
|
14,301 |
7,925 |
|
|
---------- |
---------- |
|
| Operation
profit |
|
344,810 |
225,651 |
|
| Other
income |
|
25 |
6,601 |
70,173 |
|
|
|
---------- |
---------- |
|
|
351,411 |
295,824 |
|
|
| Financial
charges |
|
26 |
3,100,461 |
223,937 |
|
| Other
charges |
|
27 |
5,497 |
6,622 |
|
|
|
---------- |
---------- |
|
|
315,543 |
230,559 |
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
35,868 |
65,265 |
|
| Taxation-
current |
|
31,000 |
29,000 |
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
4,868 |
36,265 |
|
| Unappropriated
profit brought forward |
|
3,706 |
2,603 |
|
| Transferred
from revenue reserves |
|
12,000 |
-- |
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
20,574 |
38,868 |
|
| Appropriations: |
|
| Transfer
to capital reserve for issue of bonus shares |
|
20,344 |
35,162 |
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
230 |
3,706 |
|
|
========== |
========== |
|
|
(Rupees) |
|
| Earning per share |
|
29 |
0.36 |
3.60 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Farhat
A Mirza |
|
S K Mehdi |
|
| Chief
Executive |
|
Director |
|
|
|
| Cash
Flow Statement |
|
| for
the year ended December 31, 1998 |
|
|
Note |
1998 |
1997 |
|
|
|
|
|
(Rupees '000) |
|
| Cash
flow from operating activities |
|
| Cash
generated from operations |
|
33 |
340,744 |
234,220 |
|
|
| Staff
gratuity paid |
|
(9,140) |
(3,873) |
|
| Interest/mark-up
paid |
|
(193,401) |
(185,071) |
|
| Taxes paid |
|
(117,829) |
{98,892) |
|
| Long-term
loans and advances (net) |
|
{1,825) |
205 |
