| Otsuka Pakistan Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| COMPANY
INFORMATION |
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| NOTICE
OF MEETING |
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| FIVE YEARS AT A GLANCE |
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| DIRECTORS'
REPORT |
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| AUDITORS' REPORT TO THE MEMBERS |
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| BALANCE SHEET |
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| PROFIT
AND LOSS ACCOUNT |
|
| STATEMENT
OF CHANGES IN EQUITY |
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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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| COMPARISON OF RESULTS |
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| COMPANY
INFORMATION |
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|
| BOARD
OF DIRECTORS |
Yoshio Tanabe (Chairman) |
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|
Abid Hussain (Chief
Executive) |
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|
Hiroshi Adachi |
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|
Mehtabuddin Feroz |
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|
Kiyoshi Fukai (Alternate:
Hanif Sattar) |
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|
Mohammad Abdullah Feroz |
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|
Junichiro Otsubo |
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|
Nazimuddin Feroz |
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| COMPANY SECRETARY |
Hanif Sattar |
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| AUDITORS |
|
A.F. Ferguson & Co. |
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|
Chartered Accountants |
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| LEGAL
ADVISORS |
Hassan & Humayun
Associates |
|
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| BANKERS |
|
ANZ Grindlays Bank
Limited |
|
|
The Bank of Tokyo -
Mitsubishi Limited |
|
|
Habib Bank Limited |
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|
Allied Bank of Pakistan
Limited |
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| REGISTERED
OFFICE |
30 - B, Sindhi Muslim
Co-Operative Housing |
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|
Society, Karachi- 75400 |
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Tel: 4528651 - 4 Fax:
4549857 |
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E-mail:
otsuka@khi.compol.com |
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| FACTORY |
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No. F/4 - 9, Hub
Industrial |
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|
Trading Estate, Distt.
Lasbela, |
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|
Balochistan |
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| Telephone
No. |
(0202) 32363 |
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|
(0202) 33218 |
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| Fax No. |
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(0202) 33219 |
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| SHARE
REGISTRAR |
Noble Computer Services
(Pvt) Ltd. |
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|
14, Banglore Town Housing
Society |
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|
Shahrah-e-Faisal Karachi |
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Tel: 4546978 - 4520121 |
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Fax: 4314962 |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the Twelfth Annual General Meeting of Otsuka Pakistan
Limited will be held on Friday, |
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| October
20, 2000 at 10:00 a.m. at Beach Luxury Hotel, Karachi to transact the
following business:- |
|
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| 1.
To receive and adopt the Audited Accounts for the year ended June 30, 2000,
together with the Directors' and |
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| Auditors'
reports thereon. |
|
|
| 2.
To declare a cash dividend @ 15% for the year ended June 30, 2000, as
recommended by the Directors. |
|
|
| 3.
To appoint auditors and fix their remuneration. |
|
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| 4.
To elect seven directors in accordance with the provisions of section 178 of
the Companies Ordinance, I984 for |
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| a
period of three years commencing from February 25, 200I, in place of present
directors, namely Mr. Hiroshi |
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| Adachi,
Mr. Yoshio Tanabe, Mr. Kiyoshi Fukai, Mr. Junichiro Otsubo, Mr. Mehtabuddin
Feroz, Mr. Nazimuddin |
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| Feroz
and Mr. M. Abdullah Feroz who will retire on February 24, 2001. The directors
have fixed the number of |
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| elected
directors at seven. |
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|
| 5.
To transact the following special business: |
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| To
consider and approve the remuneration of Chief Executive of the Company. |
|
|
| Statement
under section 160 of the Companies Ordinance, 1984, and draft resolution as
required under Section 164 |
|
| (1)
of the Companies Ordinance, 1984 pertaining to special business is given
below. |
|
|
| 6.
To transact any other business with the permission of the Chair. |
|
|
|
By Order of the Board |
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|
|
Hanif Sattar |
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| Karachi:
September 7th, 2000 |
|
Company Secretary |
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|
| Notes:- |
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| The
Share Transfer Books of the Company will remain closed from October 14, 2000
to October 20, 2000, |
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| (both
days inclusive) |
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| A
member entitled to attend and vote at the Annual General Meeting may appoint
a proxy to attend and vote on |
|
| his
/ her behalf. A proxy need not be a member of the Company. |
|
| 3.
Instrument of appointing proxy and the power of attorney or other authority
under which it is signed or a |
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| notarially
certified copy of the power of authority must be deposited at the Registered
Office of the Company at |
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| least
48 hours before the time of the Meeting. Form of proxy is enclosed. |
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| 4.
Nominations from members for the office of Directors must be received at
least 14 days before the time of the |
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| meeting
at the Registered Office of the Company. |
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| 5.
Shareholders are requested to promptly notify Company's share registrar of
any change in their addresses. |
|
|
| Statement
in regard to special Business: |
|
|
| Remuneration
of Chief Executive |
|
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| The
members' approval will be sought for payment of remuneration and the
provision of certain facilities to Chief |
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| Executive
will be moved at the Meeting. |
|
|
| "RESOLVED
that effective 1-1-2001 the aggregate sum not exceeding Rs. 3.5 million per
annum be and is hereby |
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| approved
as the remuneration of Chief Executive apart from the provision of his / her
transport, profit bonus and |
|
| other
benefits incidental or relating to his/her office in accordance with the
Company's rules from time to time in |
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| force." |
|
|
|
| DIRECTORS'
REPORT |
|
|
| The
Directors are pleased to present the Annual Report of the Company for the
year ended June 30, |
|
| 2000. |
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|
| Business
Review |
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| The
year under review saw consolidation of improvements witnessed 'in the
previous year. These |
|
| were
achieved inspite of the ongoing issues relating to denial of price increases,
cost escalations, |
|
| imposition
of sales tax on packing materials and water shortage at Hub. The price
increase granted |
|
| by
the Government on June 20, 2000 had no impact on the year under review as by
that time all |
|
| orders
had been received and sales closed. |
|
|
| Net
sales for the year increased by 12.8% to Rs.301.4 million. As there was no
impact of price |
|
| increase
announced on June 20, 2000, the growth is on account of volumes. Keeping in
view, the |
|
| state
of economy and others factors impacting growth, this increase we believe is
satisfactory. |
|
|
| Pre-tax
profit increased from Rs.14.9 million last year to Rs. 38.9 million during
the current year. A |
|
| large
part of this increase was attributable to lower depreciation expenses and
savings on octroi and |
|
| technical
assistance fees. Nevertheless, it goes to the credit of all staff members for
achieving this |
|
| remarkable
improvement in very difficult conditions. |
|
|
| Financial
Results |
|
(Rs. 000) |
|
|
|
|
| Profit
before taxation |
|
38,906 |
|
| Provision
for taxation |
|
14,469 |
|
|
------------ |
|
| Profit
after taxation |
|
24,437 |
|
| Un-appropriated
profit brought forward |
7,733 |
|
|
------------ |
|
|
32,170 |
|
| Appropriation: |
|
|
|
|
|
|
| Proposed
dividend |
|
15,000 |
|
| Transfer
to general reserve |
|
15,000 |
|
|
------------ |
|
|
30,000 |
|
|
------------ |
|
| Un-appropriated
profit carried forward |
2,170 |
|
|
========== |
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|
|
|
| Earning
Per Share |
|
|
|
| The
earning per share for the year ended June 30, 2000 works to Rs.2.44 per share |
|
|
| Directors |
|
| On
December 1, 1999, Mr. Kiyoshi Fukai, Chairman of your Company since 1991
resigned from his |
|
| position
due to other business priorities. Mr. Yoshio Tanabe, Director of Corporate
Planning, Otsuka |
|
| Pharmaceutical
Company Ltd., Japan, with Board of Director Status and Director of your
company |
|
| was
appointed as Chairman in his place. Mr. Kiyoshi Fukai will continue as
Director of your company. |
|
|
| The
Board places on record its appreciation and gratitude to Mr. Kiyoshi Fukai
for his role in establish- |
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| ment
of your company in Pakistan and bringing it to its present stage. |
|
|
| Future
Outlook |
|
| The
company has embarked on development of a glass line at its factory for
production of Aminovel, |
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| an
Amino Acid product. Besides, the company is also rationalizing its production
capacities with an |
|
| aim
to increase efficiencies. The recent price increase and steps being taken by
the Government to |
|
| stimulate
economy will further help in improving the performance of your company. |
|
|
| The
Board therefore, sees a good future for your company, provided the Government
allows reason- |
|
| able
price increases to the pharma industry based on cost increases. |
|
|
| Pattern
of Shareholding |
|
| The
Pattern of shareholding of the Company as at June 30, 2000, is annexed with
this annual report. |
|
|
| Holding
Company |
|
| The
Company is an indirect subsidiary of Messrs. Otsuka Pharmaceutical Company
Ltd., which is |
|
| incorporated
in Japan. |
|
|
| Auditors |
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| The
present Auditors Messrs. A.F. Ferguson & Co., Chartered Accountants
retire at the conclusion of |
|
| the
12th Annual General Meeting and, being eligible, offer themselves for
reappointment. |
|
|
| Acknowledgment |
|
| The
Board wishes to place on record its appreciation for the hard work and
dedication of all the |
|
| employees
of the Company. |
|
|
|
On behalf of the Board |
|
|
| Karachi. |
|
Abid Hussain |
|
| Dated:
5th September, 2000 |
|
Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of Otsuka Pakistan Limited as at June
30, 2000 and |
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| the
related Profit and Loss Account, Statement of Changes in Equity and Cash Flow
Statement |
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| together
with the notes forming part thereof, for the Fear 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 agree- |
|
| ment
with the books of account and are further in accordance with accounting
policies |
|
| consistently
applied except for the change as explained in note 2.3 (c) with which we |
|
| concur; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's
busi- |
|
| ness; 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, Statement of Changes in Equity
and 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 sire
a true |
|
| and
fair view of the state of the company's affairs as at June 30, 2000 and of
the profit, |
|
| changes
in equity 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. |
|
|
|
A. F. Ferguson & Co. |
|
| Karachi:
September 7, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| SHARE
CAPITAL & RESERVES |
|
|
| Authorised
capital |
|
| 10,000,000
ordinary shares of Rs. 10 each |
|
100,000,000 |
100,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
3 |
100,000,000 |
100,000,000 |
|
| General
Reserve |
|
15,000,000 |
-- |
|
| Unappropriated
profit |
|
2,170,442 |
7,733,555 |
|
|
---------- |
---------- |
|
|
117,170,442 |
107,733,555 |
|
|
| CURRENT
LIABILITIES AND PROVISIONS |
|
| Short-term
running finances utilised |
|
| under
mark-up arrangements |
|
4 |
-- |
34,759,118 |
|
|
|
|
|
| Creditors,
accrued and other liabilities |
|
5 |
82,170,141 |
45,348,913 |
|
| Taxation |
|
|
1,361,870 |
-- |
|
|
|
---------- |
---------- |
|
|
|
83,532,011 |
80,108,031 |
|
| COMMITMENTS |
|
6 |
|
|
---------- |
---------- |
|
|
200,702,453 |
187,841,586 |
|
|
========== |
========== |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
| Operating
fixed assets |
|
7 |
47,023,767 |
48,228,777 |
|
| Capital
work-in-progress |
|
8 |
6,821,751 |
385,000 |
|
|
|
---------- |
---------- |
|
|
|
53,845,518 |
48,613,777 |
|
|
|
|
|
| DEFERRED
TAXATION |
|
9 |
1,373,496 |
48,265 |
|
|
|
|
|
|
| LONG-TERM
LOANS |
|
10 |
1,379,750 |
1,569,950 |
|
|
|
|
|
| LONG-TERM
DEPOSITS |
|
361,750 |
752,750 |
|
|
|
| CURRENT
ASSETS |
|
|
| Stores
and spares |
|
11 |
9,934,784 |
9,965,086 |
|
| Stock-in-trade |
|
12 |
44,467,862 |
37,650,706 |
|
| Trade debts |
|
13 |
72,456,583 |
75,564,266 |
|
| Loans
and advances |
|
14 |
2,221,903 |
4,637,561 |
|
| Trade
deposits and short-term prepayments |
15 |
5,593,456 |
6,507,904 |
|
| Other
receivables |
|
16 |
1,815,038 |
607,165 |
|
| Taxation
recoverable |
|
|
-- |
1,433,953 |
|
| Cash
and bank balances |
|
17 |
7,252,313 |
490,203 |
|
|
----------- |
----------- |
|
|
143,741,939 |
136,856,844 |
|
|
----------- |
----------- |
|
|
200,702,453 |
187,841,586 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Abid Hussain |
|
Mehtabuddin Feroz |
|
|
Chief Executive |
|
Director |
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| Net sales |
|
18 |
301,381,473 |
267,118,855 |
|
| Cost
of goods sold |
|
19 |
200,051,730 |
191,058,011 |
|
|
|
----------- |
----------- |
|
| Gross profit |
|
|
101,329,743 |
76,060,844 |
|
| Administration
and marketing expenses |
|
20 |
58,399,335 |
56,144,100 |
|
|
|
----------- |
----------- |
|
| Operating
profit |
|
|
42,930,408 |
19,916,744 |
|
| Other
income |
|
21 |
2,305,969 |
1,784,795 |
|
|
|
----------- |
----------- |
|
|
|
45,236,377 |
21,701,539 |
|
| Financial
charges |
|
22 |
2,460,251 |
4,989,645 |
|
| Other
charges |
|
23 |
3,870,619 |
1,771,084 |
|
|
|
----------- |
----------- |
|
|
|
6,330,870 |
6,760,729 |
|
|
|
----------- |
----------- |
|
| Profit
before taxation |
|
|
38,905,507 |
14,940,810 |
|
| Taxation |
|
24 |
14,468,620 |
5,240,299 |
|
|
|
----------- |
----------- |
|
| Profit
after taxation |
|
24,436,887 |
9,700,511 |
|
| Unappropriated
profit brought forward |
|
7,733,555 |
8,033,044 |
|
|
----------- |
----------- |
|
| Profit
available for appropriation |
|
32,170,442 |
17,733,555 |
|
|
| Appropriation: |
|
| Interim
dividend Re Nil per share |
|
| (1999:
Re 1 per share) |
|
-- |
10,000,000 |
|
| Proposed
dividend Rs. 1.50 per share |
|
| (1999:
Re Nil per share) |
|
15,000,000 |
-- |
|
| Transfer
to General Reserve |
|
15,000,000 |
-- |
|
|
----------- |
----------- |
|
|
30,000,000 |
10,000,000 |
|
|
----------- |
----------- |
|
| Unappropriated
profit carried forward |
|
2,170,442 |
7,733,555 |
|
|
========== |
========== |
|
| Earnings
per share |
|
25 |
2.44 |
0.97 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Abid Hussain |
|
Mehtabuddin Feroz |
|
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
Share |
General |
Unappropriated |
Total |
|
|
Capital |
Reserve |
Profit |
|
|
|
................ Rupees
................ |
|
| Balance as |
|
| at
June 30, 1998 |
100,000,000 |
-- |
8,033,044 |
108,033,044 |
|
|
|
|
| Profit
after taxation |
|
|
| for the year |
|
|
|
| ended
June 30, 1999 |
-- |
-- |
9,700,511 |
9,700,511 |
|
|
|
|
| Dividend
paid |
-- |
-- |
(10,000,000) |
(10,000,000) |
|
|
----------- |
----------- |
----------- |
----------- |
|
| Balance as |
|
|
|
| at
June 30, 1999 |
100,000,000 |
-- |
7,733,555 |
107,733,555 |
|
|
|
|
| Profit
after taxation |
|
|
| for the year |
|
|
|
| ended
June 30, 2000 |
-- |
-- |
24,436,887 |
24,436,887 |
|
|
|
|
| Transfer
from profit |
|
|
| and
loss account |
-- |
15,000,000 |
(15,000,000) |
-- |
|
|
|
|
| Proposed
dividend |
-- |
-- |
(15,000,000) |
(15,000,000) |
|
|
| Balance |
|
----------- |
----------- |
----------- |
----------- |
|
| as
at June 30, 2000 |
100,000,000 |
15,000,000 |
2,170,442 |
117,170,442 |
|
|
========== |
========== |
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Abid Hussain |
|
Mehtabuddin Feroz |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| Cash
flow from operating activities |
|
| Cash
generated from operations |
|
29 |
76,000,481 |
18,038,476 |
|
| Mark-up/interest
paid |
|
(3,634,718) |
(5,411,088) |
|
| Mark-up
received |
|
157,178 |
604,768 |
|
| Taxes paid |
|
(12,998,028) |
(9,526,203) |
|
| Long-term
loans |
|
190,200 |
(394,264) |
|
| Long-term
deposits and prepayments |
|
391,000 |
(6,500) |
|
|
---------- |
---------- |
|
| Net
cash inflow from operating activities |
|
60,106,113 |
3,305,189 |
|
|
|
|
| Cash
flow from investing activities |
|
|
|
| Fixed
capital expenditure |
|
(14,909,340) |
(5,983,257) |
|
| Proceeds
from disposal of fixed assets |
|
1,005,632 |
813,860 |
|
|
---------- |
---------- |
|
| Net
cash outflow from investing activities |
|
(13,903,708) |
(5,169,397) |
|
|
|
|
| Cash
flow from financing activities |
|
|
|
| Dividends
paid |
|
(4,681,177) |
(5,253,990) |
|
|
---------- |
---------- |
|
| Net
cash outflow from financing activities |
|
(4,681,177) |
(5,253,990) |
|
|
---------- |
---------- |
|
| Net
increase/(decrease)in cash and cash equivalents . |
|
41,521,228 |
(7,118,198) |
|
| Cash
and cash equivalents at beginning of the year |
|
(34,268,915) |
(27,150,717) |
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at end of the year |
30 |
7,252,313 |
(34,268,915) |
|
|
========== |
========== |
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| The
annexed notes form an integral part of these accounts. |
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|
Abid Hussain |
|
Mehtabuddin Feroz |
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|
Chief Executive |
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Director |
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| NOTES
TO THE ACCOUNTS |
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| FOR
THE YEAR ENDED JUNE 30, 2000 |
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|
| 1.
STATUS AND NATURE OF BUSINESS |
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| The
Company is incorporated in Pakistan as a public limited company and is listed |
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| on
the Karachi and Lahore Stock Exchanges. It is engaged in the manufacturing, |
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| on
the Karachi and Lahore Stock Exchanges. It is engaged in the manufacturing, |
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| products. |
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| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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| 2.1
Basis of preparation |
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| These
accounts have been prepared in accordance with the requirements of the Com- |
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| panies
Ordinance, 1984 and International Accounting Standards as applicable in
Pakistan. |
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| 2.2
Accounting convention |
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| These
accounts have been prepared under the historical cost convention except for |
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| certain
exchange elements referred to in notes 2.5 and 2.8 which have been incor- |
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| porated
in the cost of the relevant assets. |
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| 2.3
Staff retirement benefits |
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| The
Company operates: |
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