| Dadex Eternit Limited |
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| Board
of Directors |
|
|
|
KASSIM DADA, S.K. (Pak.),
Off. L.II (Belgium) |
|
|
Chairman |
|
|
ABU TALIB H.K. DADA |
|
|
M. IRSHAD UDDIN |
|
|
MAQBOOL H. H. RAHIMTOOLA |
|
|
ZAHID ZAHEER |
|
|
DR. MAHMOOD AHMED |
|
|
PHILIPPE COENS |
|
|
RAY HEMSTOCK |
|
|
A. A. BHOJANI |
|
|
TARIQ ALI JAFRI |
|
|
Director Corporate
Affairs |
|
| Managing
Director |
|
| & Chief Executive |
|
|
SIKANDER DADA |
|
| Director |
|
| Technical
& Projects |
|
|
ZAIMUDDIN AHMED |
|
| Company
Secretary |
|
|
NAZIR AHMED |
|
|
FCMA |
|
| Auditors |
|
|
A. F. FERGUSON & CO. |
|
|
Chartered Accountants |
|
|
HYDER BHIMJI & CO. |
|
|
Chartered Accountants |
|
| Bankers |
|
|
AMERICAN EXPRESS BANK
LIMITED |
|
|
BANK AL-HABIB LIMITED |
|
|
HABIB BANK LIMITED |
|
|
MUSLIM COMMERCIAL BANK
LIMITED |
|
|
OMAN INTERNATIONAL BANK
S.A.O.G. |
|
|
STANDARD CHARTERED BANK |
|
|
STANDARD CHARTERED
GRINDLAYS BANK |
|
|
THE HONG KONG &
SHANGHAI BANKING |
|
|
CORPORATION LIMITED |
|
|
UNION BANK LIMITED |
|
| Registered Office |
|
|
KASSAM MANZIL, RANDAL
ROAD, |
|
|
P.O. BOX NO. 7429,
KARACHI, 74400. |
|
| Web Site |
|
|
|
|
www.dadex.com |
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|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the 41st Annual General Meeting of the shareholders will
be held on |
|
| Tuesday,
December 19, 2000 at 10:30 a.m. at the new Head Office building of the
Company at |
|
| Plot
no. 34-A-1, Block-6, P.E.C.H.S., Shahrah-e-Faisal, Karachi to transact the
following |
|
| business: |
|
|
| 1.
To receive and adopt the Report of Directors and Audited Accounts for the
financial year |
|
| ended
June 30, 2000. |
|
|
| 2.
To consider the dividend recommended by the Board of Directors. |
|
|
| 3.
To appoint Auditors for the year 2000-2001 and fix their remuneration. |
|
|
| Special Business: |
|
| To
consider and if considered fit to pass the following resolution as Special
Resolution: |
|
|
| "Resolved
that article no. 78, 79 and 80 of the Articles of Association of the Company
be and |
|
| are
hereby deleted and in place of the deleted article no. 78 and 80 the articles
mentioned in the |
|
| attachment
to this resolution be and are hereby substituted in lieu thereof and article
no. 79 |
|
| stands deleted. |
|
|
| Further
resolved that the Chief Executive and or the Company Secretary be and is
hereby |
|
| authorised
to take all such steps as may be necessary or incidental to give effect to
the above |
|
| resolution." |
|
|
|
By Order of the Board |
|
|
|
(NAZIR AHMED) |
|
| Karachi,
November 15, 2000 |
|
Company Secretary |
|
|
| NOTES: |
|
| 1.
The Share Transfer Books will remain closed from December 12, 2000 to
December 19, |
|
| 2000
(both days inclusive) in order to update the register of shareholders for the
purpose of |
|
| determining
the names of shareholders for the entitlement of cash dividend in respect of
the |
|
| year
ended June 30, 2000. Transfers received in order at the Registered Office of
the |
|
| Company
by the close of business hours on December 11,2000 will be treated in time
for |
|
| the
entitlement of the above. |
|
|
| 2.
A member entitled to attend and vote at the Annual General Meeting is
entitled to appoint |
|
| another
member as a proxy to attend and vote in his absence. |
|
|
| 3.
The instrument appointing a proxy must be received at the Registered Office
of the |
|
| Company,
not later than forty-eight hours before the time of the meeting. |
|
|
| 4.
Account holders and sub-account holders holding book entry securities of the
Company in |
|
| Central
Depository Company of Pakistan Limited, who wish to attend the Annual General |
|
| Meeting
are requested to bring original National Identity Card with copy thereof duly
attested |
|
| by
their Bankers for identification purpose. |
|
|
| 5.
A transport will be available for members at 9:30 a.m. sharp outside the
premises of the |
|
| Karachi
Stock Exchange Building to take them to the venue of the meeting. Location
map is |
|
| enclosed
for convenience. |
|
|
| ATTACHMENT
TO THE SPECIAL RESOLUTION |
|
| Existing
article no. 78 be and is hereby substituted by the following article 78: |
|
|
| A
Director must be a member of the Company, provided that: |
|
|
| A Director representing the Government or an
institution or authority which is a member, or |
|
|
| I.
a whole time Director who is an employee of the Company, or |
|
| II.
a Chief Executive, or |
|
| IV.
a person representing a creditor, |
|
|
| need
not be a member." |
|
|
| Existing
article no. 80 be and is hereby substituted by the following article 80: |
|
|
| "Remuneration
of a Director for attending the Board meeting shall be fixed by the Board of |
|
| Directors
of the Company." |
|
|
| STATEMENT
OF MATERIAL FACTS UNDER SECTION 160 (1) (b) |
|
| OF
THE COMPANIES ORDINANCE, 1984. |
|
|
| The
restrictions imposed by the Controller of Capital Issues and as stated in the
Articles of |
|
| Association
of the Company in respect of the remuneration to be paid to the Directors and |
|
| qualification
of shares, are now no longer required due to the fact that the Controller of
Capital |
|
| Issues
(Continuance of Control) Act, 1947 stands repealed. |
|
|
| In
view of the above and in order to bring the Articles of the Company in
conformity with the |
|
| provisions
contained in the Companies Ordinance, 1984, the approval of the General Body
of the |
|
| shareholders
is required to delete the above mentioned articles and to adopt the articles |
|
| substituted
in lieu thereof. |
|
|
| The
interest of the Directors is to the extent mentioned herein above. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| The Shareholders |
|
| Dadex Eternit Ltd. |
|
|
| Gentlemen |
|
|
| Your
directors have pleasure in placing before you the 41StAnnual Report with
audited accounts |
|
| for
the financial year ended June 30, 2000 as follows: |
|
|
|
(Rupees in '000) |
|
| Net
profit before taxation |
|
78,084 |
|
| Less:
Provision for taxation |
|
12,013 |
|
|
------------ |
|
| Net
profit after taxation |
|
66,071 |
|
| Add:
Unappropriated profit brought forward |
|
1,919 |
|
|
------------ |
|
| Profit
available for appropriation |
|
67,990 |
|
| Your
directors have decided to appropriate as under: |
|
| Transfer
to General Reserve |
|
14,000 |
|
| Transfer
to Fixed Assets Replacement Reserve |
|
10,000 |
|
| Proposed
final dividend Rs 4.00 per share (40%) |
43,056 |
|
|
------------ |
|
|
67,056 |
|
|
------------ |
|
| Unappropriated
profit carried forward |
|
934 |
|
|
========== |
|
| Estimated
break-up value per share is Rs 39.26 |
|
| The
pattern of shareholding is shown on page 34 of this report. |
|
| M/s.
A. F. Ferguson & Co., and M/s. Hyder Bhimji & Co., auditors of the
company retire and offer |
|
| their
services for the ensuing year. |
|
|
|
On behalf of the Board |
|
|
|
Kassim DADA |
|
| Karachi,
November 08, 2000 |
|
Chairman |
|
|
|
| CHAIRMAN'S
REVIEW |
|
|
| I
am delighted to place before you the report for 1999-2000, the 41st year of
the company. |
|
|
| The
new millennium has brought with it new challenges. At the end of 1999 there
were significant |
|
| changes
on the political front and the country is still passing through a serious
economic crisis. |
|
| Many
industries have already suffered due to the unfavourable business environment
and it |
|
| appears
that the ongoing economic recession, ever increasing cost of inputs and
substantial inflow |
|
| of
imported finished goods will continue in the foreseeable future. |
|
|
| Planning
in these unpredictable and extremely difficult conditions has not been an
easy task. The |
|
| management
has made untiring efforts and as a result of prudent corporate policy and by
the Grace |
|
| of
Allah, has once again succeeded in presenting before you healthy results for
the year under |
|
| review.
The turnover increased by 6% as compared to previous year resulting in higher
profit. |
|
|
| There
were significant increases in costs of various inputs such as cement, petrol,
spare parts, gas, |
|
| electricity,
wages and rupee devaluation during the year. The market conditions did not
allow the |
|
| company
to recover these by increasing the prices and, therefore, the increased costs
were |
|
| absorbed.
However, the company took measures to control costs and wastages through
continuous |
|
| training
of the employees and optimal utilisation of available resources. |
|
|
| The
entrepreneurial skills of the management have always guided it to look at
highly specialised |
|
| lines
of businesses in the field of building products. I am happy to inform you
that the company has |
|
| recently
entered in the business of construction chemicals by acquiring shareholding
of a company |
|
| engaged
in this business and finalising an agreement with the world's largest
construction chemical |
|
| company.
The management is confident that over a period of time this line of business
will prove |
|
| profitable
for your company. |
|
|
| During
the year the company also managed to export its products. This achievement
became |
|
| possible
due to the fact that the quality of our products is comparable with other
world class |
|
| manufacturers.
The company is also trying to expand this activity and I am confident that
very soon |
|
| our
international business will grow. |
|
|
| Dadex
still faces strong and unfair competition in its products in the local
market. The substandard |
|
| substitute
products available at low prices have created many hurdles. The market share
of the |
|
| products
has shrunk but we have implemented marketing oriented strategies to overcome
these |
|
| obstacles.
Our Customer Service Department is fully active and we are providing highly
personalised |
|
| and
focused services. The company's first priority is quality - both the quality
of its products as well |
|
| as
the quality of customer service. |
|
|
| The
construction activity has not shown any improvement and many projects have
been shelved |
|
| by
both the Government and the private sector. However, the company is hopeful
that its efforts |
|
| to
increase the international business will result in having comparable figures
for the current year. |
|
|
| The
company has hosted its newly developed web site on the worldwide web and it
is gearing |
|
| towards
e-commerce to facilitate the customers. |
|
|
| In
the end I would like to thank all the employees for their commendable efforts
and our customers |
|
| and
suppliers for their understanding and co-operation. |
|
|
|
Kassim DADA |
|
| Karachi,
November 08, 2000 |
|
Chairman |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Dadex Eternit Limited as at June
30, 2000 |
|
| and
the related profit and loss account, cash flow statement and statement of
changes in equity |
|
| 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. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of |
|
| internal
control, and prepare and present the above said statements in conformity with
the |
|
| approved
accounting standards and the requirements of the Companies Ordinance, 1984.
Our |
|
| responsibility
is to express an opinion on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standard as applicable in
Pakistan. |
|
| These
standards require that we plan and perform the audit to obtain reasonable
assurance |
|
| about
whether the above said statements are free of any material misstatement. An
audit includes |
|
| examining,
on a test basis, evidence supporting the amounts and disclosures in the above |
|
| said
statements. An audit also includes assessing the accounting policies and
significant |
|
| estimates
made by management, as well as, evaluating the overall presentation of the
above |
|
| said
statements. We believe that our audit provides a reasonable basis for our
opinion and, |
|
| after
due verification, 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, cash flow statement and
statement |
|
| of
changes in equity together with the notes forming part thereof conform with
approved |
|
| accounting
standards as applicable in Pakistan, and, 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 June 30, 2000 and of
the profit, |
|
| its
cash flows and changes in equity for the year then ended; and |
|
|
| (d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980, |
|
| was
deducted by the company and deposited in the Central Zakat Fund established
under |
|
| section
7 of that Ordinance. |
|
|
|
A. F. FERGUSON & CO. |
|
HYDER BHIMJI & CO. |
|
| Karachi,
November 15, 2000 |
|
Chartered Accountants |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET |
|
| AS
AT JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees
'000) |
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorised capital |
|
3 |
200,000 |
200,000 |
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
4 |
107,640 |
107,640 |
|
| Reserves |
|
|
|
| Capital |
|
5 |
110,000 |
100,000 |
|
| Revenue |
|
5 |
204,000 |
190,000 |
|
| Unappropriated
profit |
|
934 |
1,919 |
|
|
------------ |
------------ |
|
|
314,934 |
291,919 |
|
|
------------ |
------------ |
|
|
422,574 |
399,559 |
|
| CURRENT
LIABILITIES AND PROVISIONS |
|
| Shod-term
finances |
|
6 |
174,211 |
83,555 |
|
| Creditors,
accrued and other liabilities |
|
7 |
130,480 |
102,077 |
|
| Taxation payable |
|
|
-- |
10,726 |
|
| Proposed dividend |
|
|
43,056 |
43,056 |
|
|
|
------------ |
------------ |
|
|
347,747 |
239,414 |
|
| COMMITMENTS |
|
8 |
|
|
------------ |
------------ |
|
|
770,321 |
638,973 |
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
| Operating assets |
|
9 |
134,584 |
55,006 |
|
| Capital
work-in-progress |
|
10 |
75 |
40,726 |
|
|
|
134,659 |
95,732 |
|
| LONG-TERM
INVESTMENT |
|
11 |
5,000 |
-- |
|
| LONG-TERM
LOANS AND ADVANCES |
|
12 |
793 |
766 |
|
| LONG-TERM
DEPOSITS |
|
13 |
4,440 |
5,299 |
|
| DEFERRED
TAXATION |
|
14 |
2,058 |
5,151 |
|
| CURRENT
ASSETS |
|
|
|
|
| Stores and spares |
|
15 |
58,963 |
66,708 |
|
| Stock-in-trade |
|
16 |
305,310 |
303,693 |
|
| Trade debts |
|
17 |
113,689 |
57,065 |
|
| Loans
and advances |
|
18 |
13,394 |
14,124 |
|
| Trade
deposits and short-term prepayments |
|
19 |
15,081 |
11,640 |
|
| Other receivables |
|
20 |
2,211 |
2,644 |
|
| Investments |
|
21 |
57,965 |
67,786 |
|
| Taxation
recoverable |
|
|
13,903 |
-- |
|
| Cash
and bank balances |
|
22 |
42,855 |
8,365 |
|
|
|
------------ |
------------ |
|
|
|
623,371 |
532,025 |
|
|
|
------------ |
------------ |
|
|
|
770,321 |
638,973 |
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
S1KANDER DADA |
|
M. IRSHAD UDDIN |
|
|
Chief Executive |
|
Director |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE, YEAR ENDED JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees
'000) |
|
| Turnover |
|
23 |
615,904 |
581,743 |
|
| Cost
of goods sold |
|
24 |
434,413 |
413,499 |
|
|
|
------------ |
------------ |
|
|
|
181,491 |
168,244 |
|
| Administration,
selling and distribution expenses |
25 |
94,163 |
84,588 |
|
|
|
------------ |
------------ |
|
| Operating profit |
|
|
87,328 |
83,656 |
|
| Other income |
|
26 |
20,781 |
11,371 |
|
|
|
------------ |
------------ |
|
|
|
108,109 |
95,027 |
|
| Financial charges |
|
27 |
24,076 |
22,270 |
|
| Other charges |
|
28 |
5,949 |
5,589 |
|
|
|
------------ |
------------ |
|
|
|
30,025 |
27,859 |
|
|
|
------------ |
------------ |
|
| Profit
before taxation |
|
78,084 |
67,168 |
|
| Taxation |
|
29 |
12,013 |
7,394 |
|
|
------------ |
------------ |
|
| Profit after taxation |
|
66,071 |
59,774 |
|
| Unappropriated
profit brought forward |
|
1,919 |
201 |
|
|
------------ |
------------ |
|
| Profit
available for appropriation |
|
67,990 |
59,975 |
|
| Appropriations: |
|
| Transfer
to Revenue Reserves - General |
|
14,000 |
10,000 |
|
| -
Dividend Equalisation |
|
-- |
2,000 |
|
|
| Transfer
to Capital Reserves - Fixed Assets Replacement |
|
10,000 |
3,000 |
|
| Proposed
final dividend Rs 4.00 (1999: Rs 4.00) per share |
|
43,056 |
43,056 |
|
|
------------ |
------------ |
|
|
67,056 |
58,056 |
|
|
------------ |
------------ |
|
| Unappropriated
profit carried forward |
|
934 |
1,919 |
|
|
========== |
========== |
|
|
Rupees |
Rupees |
|
| Earnings per share |
|
30 |
6.14 |
5.55 |
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
SIKANDER DADA |
|
M. IRSHAD UDDIN |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
Note |
2000 |
1999 |
|
|
|
|
(Rupees
'000) |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Cash
generated from operations |
|
35 |
64,659 |
100,176 |
|
| Interest/mark-up
paid |
|
|
(22,166) |
(20,801) |
|
| Taxes paid |
|
|
(33,549) |
(33,424) |
|
| Long-term
loans and advances (net) |
|
|
(27) |
13 |
|
| Long-term
deposits (net) |
|
|
859 |
(1,469) |
|
|
|
------------ |
------------ |
|
| Net
cash inflow from operating activities |
|
|
9,776 |
44,495 |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Fixed
capital expenditure |
|
|
(41,107) |
(33,911) |
|
| Investments |
|
|
4,821 |
(19,822) |
|
| Proceeds
from disposal of fixed assets |
|
|
3,705 |
1,094 |
|
| Interest received |
|
|
9,252 |
8,735 |
|
|
|
------------ |
------------ |
|
| Net
cash outflow from investing activities |
|
|
(23,329) |
(43,904) |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Finance
lease repayments |
|
|
-- |
(5,247) |
|
| Short-term
borrowings |
|
|
112,011 |
60,600 |
|
| Dividends paid |
|
|
(42,613) |
(39,921) |
|
|
|
------------ |
------------ |
|
| Net
cash inflow from financing activities |
|
|
69,398 |
15,432 |
|
|
|
------------ |
------------ |
|
| Net
increase in cash and cash equivalents |
|
|
55,845 |
16,023 |
|
| Cash
and cash equivalents at beginning of the year |
|
(14,590) |
(30,613) |
|
|
|
------------ |
------------ |
|
| Cash
and cash equivalents at end of the year |
|
36 |
41,255 |
(14,590) |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
SIKANDER DADA |
|
M. IRSHAD UDDIN |
|
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
CAPITAL
RESERVE |
REVENUE
RESERVE |
TOTAL |
|
|
|
Fixed Assets |
|
Dividend |
|
Unappro- |
|
|
Share |
Repla- |
Share |
Equal- |
|
priated |
|
|
Capital |
cement |
Premium |
isation |
General |
Profit |
|
|
--------------------------------------------------------(Rupees
'000)-------------------------------------------------------- |
|
| Balance as at |
|
| June 30, 1998 |
|
107,640 |
91,345 |
5,655 |
20,000 |
158,000 |
201 |
382,841 |
|
|
|
|
| Profit after taxation |
|
|
|
| for the year ended |
|
|
|
| June
30, 1999 |
|
-- |
-- |
-- |
-- |
-- |
59,774 |
59,774 |
|
| Transferred
to reserves |
-- |
3,000 |
-- |
|
2,000 10,000 |
(15,000) |
