| Packages Limited |
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| Annual
Report 1998 |
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| Recycling
Today For a Better World Tomorrow |
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| Wheat
Straw |
Channel Cleaner |
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| River
Grass |
Contra Shear Screen |
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| Waste
Paper Recycling |
Sedimentation Tank |
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| Krofta
Clarifiers, |
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| DMS Screen |
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Belt Press |
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| White
Water Sieve |
Chemical Recovery Plant |
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| Misra
Screen |
Final Effluent After
Treatment |
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| Microsorter |
Main Entrance |
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| Vickery
Screen |
Assorted Packaging
Materials |
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| The
Management of Packages Limited realises that we live in a world |
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| where
resources are finite and the eco-system has a limited capacity to absorb the
load |
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| mankind
is placing on it. That is why it is our belief that we must do everything
practically |
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| possible
to lessen the load we place on the environment and make every effort so that |
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| sustainable
development becomes a reality. |
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| CONTENTS |
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| INTRODUCTION |
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| COMPANY
INFORMATION |
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| HIGHLIGHTS |
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| NOTICE
OF MEETING |
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| DIRECTORS'
REPORT |
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| TO
THE SHAREHOLDERS |
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| AUDITORS'
REPORT |
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| TO
THE MEMBERS |
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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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| PATTERN
OF SHAREHOLDING |
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| STATEMENT
AND REPORT UNDER |
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| SUB-SECTION
(1)(e), (f) AND |
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| (g)
OF SECTION 237 |
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| RICEPAK
LIMITED |
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| PACKAGES
HATTAR |
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| (PVT)
LIMITED |
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| COATES
LORILLEUX |
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| PAKISTAN
LIMITED |
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| TEN-YEAR
SUMMARY |
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| INTRODUCTION |
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| Packages
Limited was established in |
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| 1957
as a joint venture between the Ali |
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| group
of Pakistan and Akerlund & Rausing |
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| of Sweden. |
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| Over
the years, the Company continued |
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| to
enhance its facilities to meet the |
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| growing
demand of packaging products. |
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| Additional
capital was raised from |
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| sponsors,
International Finance |
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| Corporation
and from the public in 1965. |
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| As
a first step, Packages commissioned its |
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| own
paper mill in 1968 having |
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| production
capacity of 24,000 tonnes of |
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| paper
& paper board based on waste |
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| paper
and agricultural by-products i.e. |
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| wheat
straw and river grass. As the |
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| demand
continued to grow, it led the |
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| Company
to expand and by the middle |
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| of
1996 its annual capacity was |
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| increased
to 65,000 tonnes of paper & |
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| paper
board and corresponding |
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| converting
ability. |
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| Since
1982, Packages Limited has a joint |
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| venture
in Tetra Pak Pakistan Limited with |
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| Tetra
Pak International to manufacture |
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| paper
for liquid food packaging and to |
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| sell
Tetra Pak packaging equipment. |
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| In
1993, a joint venture agreement was |
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| signed
with Mitsubishi Corporation of |
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| Japan
for the manufacture of |
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| polypropylene
films at the Industrial Estate |
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| in
Hattar, NWFP. This project, Tri-Pack |
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| Films
Limited, commenced production in |
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| June,
1995 with equity participation by |
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| Packages
Limited, Mitsubishi Corporation, |
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| Altawfeek
Company for Investment Funds, |
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| Saudi
Arabia and General Public. |
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| Packages
Limited owns 33% of |
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| Tri-Pack
Films Limited's equity. |
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| In
July, 1994, Coates Lorilleux Pakistan |
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| Limited,
in which Packages Limited has |
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| 55%
ownership, commenced production |
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| and
sale of printing inks. |
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| Packages
has completed the balancing, |
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| modernization,
replacement and |
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| expansion
program which began in |
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| 1994.
This has enabled the Company to |
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| minimize
capacity constraints and |
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| improve
quality to meet local and foreign |
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| competition
as well as improve its |
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| environmental
protection facilities. |
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| In
1996, a joint venture agreement was |
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| signed
with Printcare (Ceylon) Limited for |
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| the
production of flexible packing |
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| materials
in Sri Lanka. This project- |
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| Packages
Lanka (Private) Limited- |
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| commenced
production in the middle of |
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| 1998
in which Packages has equity |
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| participation
of 30%. |
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| INFORMATION |
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| BOARD
OF DIRECTORS |
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| ASADULLAH
KHAWAJA |
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| KIRSTEN
RAUSING |
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| LARS
AKE HELGESSON |
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| RAFI
IQBAL AHMAD |
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| RAZI-UR-RAHMAN
KHAN |
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| SAYED
MUZAFAR ALl SHAH |
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| SYED
ASAD ALl |
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| SYED
HYDER ALl |
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| SYED
WAJID ALl |
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| (Chairman
& Chief Executive) |
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| TARIQ HAMID |
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| DR.
F. D. TOOR |
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| (Alternate
to Kirsten Rausing) |
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| SAULAT SAID |
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| Alternate
to Lars Ake Helgesson) |
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| ADVISOR |
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| SYED
BABAR ALI |
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| COMPANY
SECRETARY |
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| ADI
J. CAWASJI |
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| AUDITORS |
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| A.
F. FERGUSON & CO. |
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| CHARTERED
ACCOUNTANTS |
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| LEGAL
ADVISORS |
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| HASSAN
& HASSAN - Lahore |
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| ORR,
DIGNAM & CO.-Karachi |
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| BANKERS |
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| ABN
AMRO BANK |
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| AMERICAN
EXPRESS BANK LIMITED |
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| ANZ
GRINDLAYS BANK LIMITED |
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| BANK
OF AMERICA, N.T. & S.A. |
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| CITIBANK
N.A. |
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| DEUTSCHE
BANK A.G. |
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| EMIRATES
BANK INTERNATIONAL P.J.S.C. |
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| HABIB
BANK LIMITED |
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| MUSLIM
COMMERCIAL BANK LIMITED |
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| STANDARD
CHARTERED BANK |
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| THE
HONGKONG & SHANGHAI |
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| BANKING
CORPORATION LIMITED |
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| HEAD
OFFICE & WORKS |
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| Shahrah-e-Roomi |
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| P.O
Amer Sidhu |
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| Lahore-54760 |
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| Pakistan |
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| PABX:
5811541-46, 5811191-94 |
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| Cable:
PACKAGES LAHORE |
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| Telex:
44866 PKGS PK |
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| Fax:
(042) 5811195, 5820147 |
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| REGISTERED
OFFICE |
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| &
REGIONAL SALES OFFICE |
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| 1st
Floor, Hilal-e-Ahmer House |
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| Khayaban-e-lqbal |
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| Main
Clifton Road |
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| Karachi-75600 |
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| Pakistan |
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| PABX:
5863941-42, 5874047-49 |
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| Cable:
PACKAGES KARACHI |
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| Telex:
20315 PKGS PK |
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| Fax:
(021) 5860251 |
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| REGIONAL
SALES OFFICE |
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| 1st
Floor, Yasin Plaza |
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| 74
West Blue Area |
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| Islamabad-44000 |
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| Pakistan |
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| Paktel:
(0351) 7370694 |
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| PABX:
276765, 276768 |
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| Fax:
(051) 829411 |
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| ZONAL
SALES OFFICE |
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| 1st
Floor, 61 Khan Plaza |
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| Qasim Road |
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| Multan
Cantt, |
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| Pakistan |
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| Tel: 587370 |
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| HIGHLIGHTS |
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|
Year to June 30, |
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|
1998 |
1997 |
|
| Sales
- million rupees |
|
3,512.27 |
3,154.01 |
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| Profit
before tax- million rupees |
|
162.75 |
110.68 |
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| Profit
after tax- million rupees |
|
220.08 |
90.39 |
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| Cash
dividend - percentage of paid up capital |
|
10.00 |
- |
|
| Stock
dividend - percentage of paid up capital |
|
15.00 |
12.50 |
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| Earnings
per share - rupees |
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|
6.15 |
2.84 |
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| Shareholders'
equity - million rupees |
|
1,090.01 |
1,512.32 |
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| Total
assets - million rupees |
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|
252.70 |
6,210.12 |
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| Paper
and board produced-tonnes |
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|
50,370 |
54,301 |
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| Paper
and board converted - tonnes |
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|
51,943 |
46,182 |
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| Number
of shareholders |
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|
2,024 |
2,671 |
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| Number
of shares |
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|
35,789,258 |
31,812,674 |
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| Number
of employees |
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|
2,074 |
2,720 |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the Forty Third |
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| Annual
General Meeting of Packages |
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|
|
| Limited
will be held at the Auditorium of |
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|
| the
Institute of Chartered Accountants of |
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| Pakistan,
G -31/8, Kehkashan, Clifton, |
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| Karachi
on Wednesday, December 16, |
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|
|
| 1998
at 11.30 a. m. to transact the |
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| following
business:- |
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| A.
Ordinary Business |
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| 1.
To receive and consider the Accounts |
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| for
the year ended June 30, 1998, |
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| the
Report of the Auditors thereon and |
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| the
Report of the Directors. |
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| 2.
To declare a dividend. |
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| 3.
To appoint Auditors and to fix their |
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| remuneration. |
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| B.
Special Business |
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| 4.
To increase the Authorised Capital of |
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| the
Company from Rs. 400 million to |
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| Rs.
500 million. |
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| 5.
To approve the issue of bonus shares |
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| in
the ratio of fifteen new shares for |
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| every
one hundred existing ordinary |
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|
| shares
held i.e. 15%. |
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|
|
| Notes: |
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|
| 1.
The Share Transfer Books of the |
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| Company
for the entitlement of |
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| dividend
and bonus shares will be |
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| closed
from December 3, 1998 to |
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| December
16, 1998 both days |
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| inclusive. |
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|
|
|
| 2.
A member entitled to attend and vote |
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| at
the General Meeting is entitled to |
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| appoint
another member as a proxy |
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| to
attend and vote instead of him. |
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|
|
|
| 3.
The instrument appointing a proxy |
|
| must
be received at the Registered |
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| Office
of the Company (First floor, |
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| Hilal-e-Ahmer
House, Khayaban-e- |
|
| Iqbal
Main Clifton Road, Karachi- |
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| 75600),
not later than forty-eight |
|
| hours
before the time appointed for |
|
| the
Meeting. A member shall not be |
|
| entitled
to appoint more than one |
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| proxy.
If a member appoints more |
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| than
one proxy and more than one |
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| instrument
of proxy are deposited by |
|
| a
member with the Company, all such |
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| instruments
of proxy shall be rendered |
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| invalid. |
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|
By Order of the Board |
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| Karachi |
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|
Adi J. Cawasji |
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| November
24, 1998 |
|
Company Secretary |
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|
|
| STATEMENT
UNDER SECTION 160 |
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| OF
THE COMPANIES ORDINANCE, |
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|
| 1984
REGARDING SPECIAL |
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|
| BUSINESS: |
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| Item
4 of the Notice |
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| It
is proposed to increase the Authorised |
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|
| Capital
of the Company from Rs. 400 |
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|
| million
to Rs.500 million divided into |
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| 10,000,000
new ordinary shares of |
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|
| Rs.
10 each to facilitate further issue of |
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|
| capital
from time to time according to the |
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|
| requirements
of the Company. In this |
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|
| connection,
it is intended to propose that |
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|
| the
following Resolutions be passed as |
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|
| Special
Resolutions, with or without |
|
|
| modification:- |
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|
|
| a)
RESOLVED that the Authorised Share |
|
|
| Capital
of the Company be |
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|
|
| increased
from Rs. 400,000,000 to |
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| Rs.
500,000,000 by the creation of |
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|
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| l
O,000,000 new ordinary shares of |
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|
|
| Rs.
10 each. |
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|
|
|
|
| b)
RESOLVED that the Memorandum of |
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|
|
| Association
of the Company be |
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|
|
| altered
by substituting for the figures |
|
|
| "40,000,000"
and "400,000,000" |
|
|
|
| appearing
in Clause V, the figures |
|
|
|
| "50,000,000"
and "500,000,000" |
|
|
|
| respectively. |
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|
|
|
|
| c)
RESOLVED that the Articles of |
|
|
|
| Association
of the Company be |
|
|
|
| altered
by substituting for the figures |
|
|
| "40,000,000"
and "400,000,000" |
|
|
|
| appearing
in Article 4, the figures |
|
|
| "50,000,000"
and "500,000,000" |
|
|
|
| respectively. |
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|
|
|
| Item
5 of the Notice |
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|
|
| The
Directors have recommended the |
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|
|
| issue
of 5,368,388 bonus shares by |
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|
|
| capitalisation
of a part of the Free |
|
|
| Reserves
of the Company. After the issue, |
|
|
| the
total paid up capital will increase to |
|
|
| Rs.
411,576,460. None of the Directors |
|
|
| are
interested in this business except to the |
|
|
| extent
of their entitlement to bonus shares |
|
|
| as
shareholders. The Directors recommend |
|
|
| to
consider and, if thought fit, pass with or |
|
|
| without
modification the following |
|
|
|
| Resolutions
as Ordinary Resolutions:- |
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|
|
|
|
|
| a)
RESOLVED that a sum of |
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|
|
| Rs.
53,683,880 out of the Free |
|
|
|
| Reserves
of the Company be |
|
|
|
| capitalised
and applied to the issue of |
|
|
| 5,368,388
ordinary shares of |
|
|
|
| Rs.
10 each and allotted as fully paid |
|
|
| up
bonus shares to the members of the |
|
|
|
|
|
| Company
who are registered in the |
|
|
|
| books
of the Company on December |
|
|
|
| 16,
1998 in the proportion of fifteen |
|
|
| such
new shares for every one |
|
|
|
| hundred
existing ordinary shares held |
|
|
| and
that such new shares shall rank |
|
|
| pari
passu with the existing ordinary |
|
|
| shares
of the Company but shall not |
|
|
| be
eligible for dividend for the year |
|
|
| ended
June 30, 1998. |
|
|
| b)
RESOLVED that in the event of any |
|
| member
holding shares which are not |
|
| an
exact multiple of 15, the Directors |
|
| be
and are hereby authorised to sell in |
|
| the
stock market such fractional |
|
| entitlement
and to pay the proceeds of |
|
| sale
when realised to a charitable |
|
| institution
approved under section |
|
| 47
(1) of the Income Tax Ordinance, 1979. |
|
|
| c)
RESOLVED that for the purpose of |
|
| giving
effect to the foregoing, the |
|
| Directors
be and are hereby authorised |
|
| to
give such directions as may be |
|
| necessary
and as they deem fit to |
|
| settle
any question or any difficulties |
|
| that
may arise in the distribution of the |
|
| said
new shares or in the payment of |
|
| the
sale proceeds of the fractions. |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| The
Directors have pleasure in presenting |
|
|
| their
annual report together with the |
|
|
| Company's
audited accounts for the year |
|
|
| ended
June 30, 1998. |
|
|
|
|
|
|
|
|
| Operating
Results |
|
|
|
| The
year under review has been better |
|
|
| than
the last year. The Company's sales |
|
|
| were
more than Rs. 3.5 billion showing a |
|
|
| growth
of eleven percent over previous |
|
|
| year.
This is partly due to Government's |
|
|
| rationalizing
the tariff on imported |
|
|
| commodities
whose market share was |
|
|
|
| being
eroded in competition with |
|
|
|
| smuggled
goods. However, with the |
|
|
|
| uncertain
economic conditions in the |
|
|
| country,
your Company is viewing the |
|
|
| future
with caution. |
|
|
|
|
|
|
|
|
| Your
Company has posted a pretax profit |
|
|
| of
Rs. 163 million as against Rs. 111 |
|
|
| million
last year. Improvement in profit is |
|
|
| mainly
due to increase in sales, better |
|
|
| gross
profit margin and keeping a tighter |
|
|
| control
on financial charges. |
|
|
|
| The
Company's actual paper & board |
|
|
|
| production
and conversion were 56,370 |
|
|
| tonnes
against 54,301 tonnes and |
|
|
|
| 51,943
tonnes against 46, 182 tonnes |
|
|
| respectively
last year. |
|
|
|
|
|
|
|
| Completion
of Expansion Program |
|
|
|
| The
expansion program started in 1994 |
|
|
| has
since been fully completed and has |
|
|
| started
showing results in the shape of |
|
|
| enhanced
production capacity, better |
|
|
| quality
packaging materials and |
|
|
|
| environmental
friendly production process. |
|
|
| Some
of the highlights of investment were |
|
|
| modification
of paper machine, |
|
|
|
| installation
of two power generators of |
|
|
| 5
MW each, expansion of flexible and |
|
|
| corrugator
lines and the chemical |
|
|
|
| recovery
plant. As a result of this |
|
|
| expansion
the Company's annual paper & |
|
|
| board
manufacturing capacity stands at |
|
|
| 65,000
tonnes and its conversion |
|
|
|
| capacity
has been increased to 58,000 |
|
| tonnes. |
|
|
|
|
|
| Improved
Production Process |
|
| Realizing
its corporate responsibility to |
|
| reduce
the burden of imports on the |
|
| Country
in a post nuclear era, your |
|
| Company
has successfully started |
|
| experimenting
the substitution of wood |
|
| pulp
with cotton linter pulp in its tissue |
|
| manufacturing.
Your Company has also |
|
| acquired
software for printing processes, |
|
| which
have helped in reducing the |
|
| printing
time and improving the quality of |
|
| printing. |
|
|
|
|
|
| ISO
Certification |
|
| The
process of getting each production |
|
| unit
of the Company ISO 9000 certified |
|
| is
successfully continuing. All preparatory |
|
| work
for its tissue and corrugator lines has |
|
| been
completed and both the lines would |
|
| be
certified during this year. |
|
|
|
|
| Y2K Problem |
|
|
| The
arrival of year 2000 will pose a |
|
| serious
challenge to many companies |
|
| around
the world. Your Company has |
|
| already
started the exercise to address this |
|
| particular
issue. The aim is to ensure that |
|
| not
only the Company's systems are |
|
| millennium
compliant but also those of its |
|
| counterparts.
For this purpose your |
|
| Company
has set a deadline of |
|
| December
31, 1998 and hopes to |
|
| become
fully year 2000 compliant by that date. |
|
|
|
|
| Packages
Lanka (Pvt) Lid - Sri Lanka |
|
| We
feel pleasure in informing you that the |
|
| joint
venture started with Printcare Ceylon |
|
| has
commenced commercial production |
|
| from
middle of 1998. |
|
|
|
|
| Appropriation |
|
| The
Directors recommend payment of |
|
| cash
dividend of 10 percent (Re. 1.00 |
|
| per
share) on the paid up capital of the |
|
| Company.
They further propose to issue |
|
| 15
bonus shares for every 100 existing |
|
| ordinary
shares held by the shareholders. |
