| Singer Pakistan Limited |
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| Annual
Report 1998 |
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OVER 140 YEARS AGO |
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SINGER |
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CAPTURED THE |
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SPIRIT OF INNOVATION. |
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TODAY, |
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SINGER'S COMMITMENT TO R&D |
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BRINGS TO PAKISTAN |
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* A COMPLETE RANGE OF QUALITY PRODUCTS |
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* A NATION-WIDE SALES AND SERVICE |
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* EASY PAYMENT TERMS |
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* AFTER SALES SERVICE |
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SINGER* |
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YOUR FAMILY COMPANY |
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| Contents |
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| Board
of Directors |
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| Notice
of Meeting |
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| Statement
under Section 160 of Companies Ordinance 1984 |
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| Directors' Report |
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| Pattern
of Holding of Shares |
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| Auditors' Report |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Statement
of Changes in Financial Position |
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| Notes
to the Financial Statements |
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| Statistical
Summary |
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| Board
of Directors |
Kamal Shah |
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Rasheed Y. Chinoy |
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Bashir Ahmed |
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John Sutherland
(Alternate: Roshan Ali Hamirani) |
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Sinniah Ramanathan
(Alternate: Badaruddin F. Vellani) |
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Samir Ahmed |
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U R Usmani |
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| Secretary |
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Rizwan U1 Haq Khan |
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| Bankers |
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Allied Bank of Pakistan
Limited |
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American Express Bank
Limited |
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ANZ Grindlays Bank |
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Bank A1-Habib Limited |
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Emirates Bank
International PJSC |
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Habib Bank Limited |
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Hongkong & Shanghai
Banking Corporation |
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Muslim Commercial Bank
Limited |
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National Bank of Pakistan |
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Orix Investment Bank |
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Platinum Commercial Bank
Limited |
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Prime Commercial Bank
Limited |
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| Auditors |
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Khalid Majid Husain
Rahman |
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Chartered Accountants |
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| Registrar |
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Gangjees Investment &
Finance Consultants |
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513, Clifton Centre |
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Kehkashan, Block-5 |
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Clifton |
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Karachi. |
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| Registered
Office |
Plot No. 39, Sector 19 |
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Korangi Industrial Area |
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Karachi. |
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| Head Office |
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A1-Haroon Building |
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3rd Floor |
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10 - Garden Road |
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Karachi. |
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| Notice
of Meeting |
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| Notice
is hereby given that the Thirty-Eighth Annual General Meeting of Singer |
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| Pakistan
Limited will be held on Thursday, June 24, 1999, at 12.00 Noon at Beach
Luxury |
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| Hotel,
Karachi, to transact the following business: |
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| ORDINARY
BUSINESS: |
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| 1.
To receive and consider the audited accounts of the company for the period |
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| from
January 4, 1998 to January 2, 1999 and the Reports of Directors and Auditors |
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| thereon. |
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| 2.
To appoint auditors and to fix their remuneration. |
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| 3.
To elect seven Directors for a period of three years with effect from 24th
June, |
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| 1999
in place of the retiring Directors, namely: |
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| Mr. Kamal Shah |
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| Mr.
Rasheed Y Chinoy |
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| Mr.
Bashir Ahmed |
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| Mr. U R Usmani |
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| Mr.
Samir Ahmed |
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| Mr.
John Sutherland |
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| Mr.
Sinniah Ramanathan. |
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| SPECIAL
BUSINESS: |
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| 4.
To approve the holding of office of profit by the Chief Executive and other
whole |
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| time
working Directors of the Company and to approve their remuneration. |
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| 5.
To capitalize a sum of Rs 10,494,324 out of the reserves available for
appropriation |
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| for
the issuance of 1,049,432 bonus shares. |
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| Notes: |
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| 1.
The Share Transfer Books of the Company will be closed and no transfer of
shares will be accepted for |
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| registration
from Friday, June 11, 1999 to Thursday, June 24, 1999 (both days inclusive). |
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| 2.
A Member, entitled to attend, speak and vote at the General Meeting is
entitled to appoint another |
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| person
as his/her proxy to attend, speak and vote instead of him/her and a proxy so
appointed shall |
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| have
such rights, as respects attending, speaking and voting at the General
Meeting as are available to |
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| the
Member. Proxies, in order to be effective, must be received at the Registered
Office of the Company |
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| not
less than 48 hours before the Meeting. The proxy need not be a member of the
Company. |
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| 3.
Election of Directors shah take place in accordance with the provision of the
Companies Ordinance |
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| 1984.
The Directors have fixed the number of elected Directors at seven Directors. |
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| 4.
Any person who seeks to contest election as a Director of the Company must
file with the |
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| Company
at its Registered Office a notice of his intention to offer himself for
election. Such notice |
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| must
be filed with the Company not later than fourteen (14) days before the date
of the Annual |
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| General
Meeting. |
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| 5.
Members are requested to notify us immediately of any change in their
Registered Address currently |
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| available
with us. |
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| 6.
A statement under Section 160 (1) (b) of the Companies Ordinance 1984
relating to special |
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| business
is being sent to the members along with a copy of the notice. |
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| 7.
The Registered Office of the Company is located at Plot No.39, Sector 19,
Korangi Industrial Area, |
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| Korangi,
Karachi. |
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By Order of the Board |
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| Karachi |
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Rizwan UI Haq Khan |
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| Dated:
May 17,1999 |
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Company Secretary |
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| Statement
under Section 160 of the |
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| Companies
Ordinance, 1984 |
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| This
statement sets out the material facts concerning the Special Business to be
transacted at the |
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| Thirty-eighth
Annual General Meeting of Singer Pakistan Limited to be held on Thursday,
June 24, |
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| 1999. |
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| ITEM
NO. 4 - REMUNERATION OF CHIEF |
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| EXECUTIVE
AND WORKING DIRECTORS |
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| The
approval of the Shareholders of the Company will be sought for the
remuneration payable to the Chief |
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| Executive
and other Working Directors (including Alternate Directors) of the Company in
accordance |
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| with
their terms & conditions of service and for the holding of their
respective office of profit in the |
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| Company.
For this purpose, it is proposed that the following Resolution be passed as
an Ordinary |
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| Resolution,
namely: |
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| RESOLVED
THAT: |
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| The
Chief Executive and other working Directors (including Alternate Directors)
of the |
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| Company
be and are hereby authorised to hold their respective offices of profit as
executives of |
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| the
Company under their respective contracts of service and that they be allowed
benefits |
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| arising
under their respective contracts of service and the applicable service rules
of the |
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| Company
and that they be paid by way of remuneration, exclusive of allowances, |
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| perquisites
and retirement benefits to which they are entitled under their respective |
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| contracts
of service and applicable service rules, such sums as the Directors may |
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| determine
not exceeding in the aggregate the sum of Rupees 8.5 million during the year |
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| ending
December 31, 1999 and for the remainder of their term aggregate sums per |
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| annum
not exceeding the said amount as increased by twenty-five percent |
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| per annum. |
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| FURTHER
RESOLVED THAT: |
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| In
the event of any of the aforesaid offices of profit falling vacant, the
approval hereby given |
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| shall
be equally applicable to any other person appointed to fill such vacancy. |
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| ITEM
NO. 5 - CAPITALIZATION FOR ISSUE OF BONUS SHARES |
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| In
order to meet increased Working Capital requirements of the company, the
Directors consider it |
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| advisable
to capitalize a sum of Rs 10,494,324 out of the reserves available for
appropriation for the period |
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| from
January 4, 1998 to January 2, 1999 for the issue of Bonus Shares. |
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| The
Bonus Shares to be issued will be in the proportion of one ordinary share for
every five |
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| Ordinary
Shares held by Members registered with the Company as at June 24, 1999.
Accordingly, it is |
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| proposed
to pass the following Resolution as an Ordinary Resolution: |
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| RESOLVED
THAT: |
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| 1.
A sum of Rs 10,494,324 out of the reserves available for appropriation for
the period from |
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| January
4, 1998 to January 2, 1999 be capitalized and applied for making payment in |
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| full
of 1,049,432 Ordinary Shares of Rs 10/- each and that the said shares be
allotted as |
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| fully
paid Ordinary Shares to the Members of the Company whose names appear on the |
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| Register
of Members as at the close of business on June 24, 1999, in the proportion of
one |
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| Bonus
Share for every five shares than held and that such Bonus Shares shall rank
pari |
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| passu
as regards future dividends and in all other respects with the existing
Ordinary |
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| Shares
of the Company. |
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| 2.
In the event of any member becoming entitled to a fraction of a share, the
Directors be and are |
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| hereby
authorized to consolidate all such fractions and sell the shares so
constituted in |
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| the
Stock Market and to pay the proceeds thereof to the members entitled to the
fraction |
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| in
proportion to their respective entitlements. |
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| 3.
For the purpose of giving effect to this Resolution, the Directors be and
they are |
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| hereby
authorized to do and cuased to be done all acts, deeds and things that may be |
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| necessary
and to settle any question or difficulties that may arise in regard to the |
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| allotment
and the distribution of the said Bonus Shares as they think fit. |
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| Report
of the Directors |
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| for
the period from January 4, 1998 to |
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| January
2, 1999 |
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| The
Board of Directors have pleasure in presenting the Annual. Report with
Audited Accounts for the |
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| period
from January 4, 1998 to January 2, 1999. |
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| FINANCIAL
REVIEW |
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| Market
conditions during 1998 were very difficult amid recessionary conditions and
shrinking |
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| consumer
purchasing power. The devaluation of Pakistan Rupee and irregular import of
appliances |
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| further
affected our sales adversely. The requirement of margins to be deposited with
Banks to open letter |
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| of
credit resulted in an increase in the working capital needs of the Company
which placed |
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| additional
pressure on cash flow. |
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| Sales
for the year under review decreased from Rs. 605.6 million to Rs. 561.4
million, a decrease of |
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| 7.3%.
The reduction in Sales was both in sewing machine and Appliances, other than
colour |
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| television.
Despite decreased sales, the operating profit for the year under review is
higher by 4.5% as |
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| compared
to the previous year mainly due to strict controls on administrative and
selling expenses and |
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| the
implementation of additional and on going cost reduction programmes. |
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| Profit
after Taxation remained at the same level as last year after absorbing
financial cost and charge for |
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| taxation.
The financial cost shows a decrease due to prudent utilization of borrowed
funds. |
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| SEWING
MACHINES |
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| Due
to tough competition from the unorganized sector and irregular imports the
sewing machine |
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| market
remained under pressure throughout 1998. The Straight Stitch sewing machine
business showed |
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| marginal
improvement due to some bulk orders. Sales of high value Zig Zag sewing
machines showed |
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| a
decline of 11% in the year 1998 due to shrinking purchasing power. Sale of
sewing machines in 1998 |
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| was
Rs 104.5 million as against Rs 112.3 million in the previous year, a decline
of 6.9% which is due to |
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| recessionary
trend. |
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| APPLIANCES |
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| Sales
of appliances during the year reduced by 6% from Rs. 414.7 million to Rs.
389.8 million. This is |
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| mainly
due to reduction in sales of locally produced Refrigerators and Gas
Appliances. However sales of |
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| Colour
Television increased during 1998. The overall market for appliances remained
depressed during the |
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| year. |
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| GOODS
PURCHASED FOR RE-SALE |
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| Overall
sales of goods purchased for resale declined from Rs 78.6 million to Rs 67.1
million, a reduction of |
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| 14.63%.
This is mainly due to reduction in sales of Knitting Machines, Industrial
Sewing Machines and |
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| other
appliances. However, sales of imported Refrigerators increased over last year
due to |
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| reduction
in import duties. |
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| DIRECTORS |
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| During
the period since the last Report of the Directors Mr. Mark McGuiness, Mr.
James Yuan, Mr. |
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| Glenn
William Gibson and Mr. Razi Ur Rehman Khan resigned and Mr. Sinniah
Ramanathan, Mr. John |
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| Sutherland
and Mr. Samir Ahmed were appointed as Directors of the Company. |
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| Mr.
Kamal Shah, Mr. Rasheed Y Chinoy, Mr. Bashir Ahmed, Mr. U R Usmani, Mr. Samir
Ahmed, Mr. John |
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| Sutherland,
Mr. Sinniah Ramanathan, being all the present Directors of the company retire
on June 6th, |
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| 1999.
Consequently, a new Board of Directors is required to be elected at the
thirty-eighth Annual |
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| General
Meeting for a term of three years. |
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| In
compliance with Section 178(1) of the Companies Ordinance 1984, the number of
Directors to be |
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| elected,
has been fixed by your Board at seven Directors. |
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| YEAR 2000 |
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| All
necessary arrangements have been made to face any
potential threat that may arise due to Y2K |
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| problem.
All core software that were not Year 2000 compliant are being modified and
steps are being |
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| taken
to ensure that all software are Year 2000 compliant before year end. |
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| FUTURE
OUTLOOK |
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| We
plan to focus around our key objectives of building up a strong demand for
our core products, |
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| i.e.,
Sewing Machines and Appliances, through effective marketing and widening of
our distribution |
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| channels.
We expect increased sales of Colour Television with improved utilization of
our television |
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| plant capacity. |
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| PROFITABILITY
AND APPROPRIATION |
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| The
profit and proposed appropriation for the year |
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| is as follows: |
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|
(Rs. in
Million) |
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|
1998 |
1997 |
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| Profit after Tax |
|
7.125 |
7.862 |
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| Unappropriated
Profit brought |
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| forward |
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1.097 |
1.981 |
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| Profit
available for |
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| appropriation |
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8.222 |
9.843 |
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| Appropriation: |
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| Transfer
from General Reserve |
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2.500 |
- |
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| Transfer
to Reserve for issue of |
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| bonus shares |
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(10.494) |
(8.746) |
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| Unappropriated
profit carried |
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| forward |
|
228 |
1.097 |
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========== |
========== |
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| DIVIDENDS/BONUS
ISSUE |
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| The
Board has recommended that no cash dividend be paid for the period ended
January 2, 1999. The |
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| Board
has however proposed that a Bonus issue in the proportion of one share for
every five shares of |
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| Rs
10/- each be made to all Members whose names appear on the Register of
Members on June 24, |
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| 1999,out
of the reserves available for appropriation for the period under review. |
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|
| HUMAN
RESOURCES |
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| Management
and employees relations continued to remain cordial. The two years agreement
with workers |
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| expired
on 31st December 1998. The management has commenced negotiations with the
Collective |
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| Bargaining
Agent. These negotiations are being held in a cordial atmosphere. |
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| Management
Development programmes to improve employees professional skills and knowledge |
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| continued
during the year for all levels of management. |
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| The
Board of Directors would like to take this opportunity to express their
appreciation for the hard |
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| work
and dedication of the employees of the Company. |
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| SOCIAL
RESPONSIBILITIES |
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| The
Company continues to fulfill its social responsibilities largely by
supporting training classes in |
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| sewing,
designing and knitting to enable average income groups to earn extra income. |
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| AUDITORS |
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| The
Auditors, Messrs Khalid Majid Husain Rahman retire and offer themselves for
reappointment for the |
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| year 1999. |
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| PATTERN
OF SHARE HOLDING |
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| A
statement showing the pattern of holding of shares by the shareholders of
Singer Pakistan |
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| Limited
as at January 2, 1999 is annexed to this report. |
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| HOLDING
COMPANY |
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| Singer
VIII BV Netherland holds 70% issued share capital of Singer Pakistan Limited. |
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| GENERAL |
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| During
the period from end of the financial year of the Company to which the Balance
Sheet relates and |
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| the
date of this report, there have been no material commitments made and no
changes have occurred |
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| which
materially affect the financial position of the Company. |
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|
On behalf of the Board |
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| Karachi |
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KAMAL SHAH |
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| Dated:
May 17, 1999. |
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Chairman |
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| Pattern
of holding of shares held |
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| by
the Shareholders of Singer Pakistan Limited |
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| as
at January 2, 1999 |
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|
Shareholding |
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| Number of |
From |
To |
Total Shares |
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| Shareholders |
|
held |
|
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| 213 |
1 |
100 |
9,331 |
|
| 301 |
101 |
500 |
78,674 |
|
| 38 |
501 |
1000 |
26,013 |
|
| 43 |
1001 |
5000 |
83,373 |
|
| 5 |
5001 |
10000 |
32,934 |
|
| 1 |
10001 |
15000 |
12,524 |
|
| 1 |
70001 |
75000 |
74,100 |
|
| 1 |
145001 |
150000 |
150,000 |
|
| 1 |
170001 |
175000 |
173,268 |
|
| 1 |
180001 |
185000 |
181,868 |
|
| 1 |
745001 |
750000 |
748,543 |
|
| 1 |
3675001 |
3680000 |
3,676,534 |
|
| ---------- |
|
---------- |
|
| 607 |
|
5,247,162 |
|
| ========== |
|
========== |
|
|
| Categories
of Shareholders |
|
| as
at January 2, 1999 |
|
|
| Categories of |
|
Number |
Shares held |
Percentage |
|
| Shareholders |
|
|
| 1. Individuals |
|
593 |
587,618 |
11.20 |
|
| 2.
Investment Companies |
|
4 |
907,411 |
17.29 |
|
| 3.
Joint Stock Companies |
|
5 |
75,335 |
1.44 |
|
| 4.
Modaraba Companies |
|
1 |
150 |
0.00 |
|
| 5.
Associated Companies |
|
3 |
114 |
0.00 |
|
| 6.
Holding Companies |
|
1 |
3,676,534 |
70.07 |
|
|
---------- |
---------- |
---------- |
|
|
607 |
5,247,162 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
| Auditors
Report To The Members |
|
|
| We
have audited the annexed balance sheet of SINGER PAKISTAN LIMITED as at |
|
| January
2, 1999 and the related profit and loss account and the statement of changes
in financial |
|
| position
(cash flow statement), together with the notes forming part thereof, for the
period 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 period was for the purpose of the
Company's |
|
| business; and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the |
|
| period
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 statement of
changes in |
|
| financial
position (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 January 2, 1999 and of the profit and the changes in financial position
for the |
|
| period
then ended; and |
|
|
| (d)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, |
|
| 1980. |
|
|
| Karachi |
|
KHALID MAJID HUSAIN RAHMAN |
|
| Dated:
May 17, 1999 |
|
CHARTERED ACCOUNTANTS |
|
|
|
| Balance
Sheet as at January 2, 1999 |
|
|
|
(Rs. in
'000) |
|
|
Note |
1998 |
1997 |
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
|
| Share Capital |
|
|
|
|
|
|
| Authorised |
|
|
|
|
|
|
| 15,000,000
(1997: 15,000,000) ordinary shares |
|
|
150,000 |
150,000 |
|
| of Rs. 10 each |
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid-up |
|
4 |
52,472 |
43,726 |
|
| Reserves |
|
5 |
138,248 |
139,869 |
|
|
|
|
------------------ |
------------------ |
|
|
|
190,720 |
183,595 |
|
|
|
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
6 |
29,153 |
29,153 |
|
|
|
|
|
| LONG
TERM LOANS AND OBLIGATIONS UNDER |
|
|
| FINANCE
LEASE |
|
7 |
11,801 |
15,874 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
8 |
1,890 |
8,248 |
|
| LONG
TERM DEPOSITS |
|
9 |
5,809 |
5,387 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of long-term |
|
|
|
| loans
and obligations under finance lease |
|
7.1 & 7.2 |
4,663 |
12,297 |
|
|
|
|
| Short-term
loans - secured |
|
10 |
- |
74,260 |
|
| Finance
under mark-up arrangements - secured |
|
11 |
265,450 |
210,848 |
|
| Creditors,
accrued and other liabilities |
|
12 |
74,587 |
98,752 |
|
| Unclaimed
Dividend |
|
|
626 |
637 |
|
| Taxation |
|
13 |
2,445 |
2,594 |
|
|
|
------------------ |
------------------ |
|
|
|
347,771 |
399,388 |
|
| CONTINGENT
LIABILITIES AND COMMITMENTS |
14 |
|
|
|
|
|
------------------ |
------------------ |
|
|
587,144 |
641,645 |
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these financial |
|
| statements. |
|
|
|
|
|
|
(Rs. in
'000) |
|
|
Note |
1998 |
1997 |
|
|
