| Security Papers Limited |
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| Annual
Report 2001 |
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| Contents |
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| Board
of Directors |
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| Company
Information |
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| Notice
of Annual General Meeting |
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| Year at a Glance |
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| Directors'
Report |
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| Chairman's
Review |
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| Pattern
of Shareholding |
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| Performance
at a Glance |
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| Statement
of Value Added and its Distribution |
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| Auditors'
Report to 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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| Statement
of Changes in Equity |
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| Notes
to the Accounts |
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| Decade
at a Glance |
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| Board
of Directors |
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|
| Syed
Naseem Ahmad |
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| Chairman
& Chief Executive |
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| Sheikh
M. Rafiq Akhtar |
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| Mr.
Ahmad Hatami Yazd |
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| Mr.
Kurtcebe Gurkan |
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| Mr.
Mustapha A. Chinoy |
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| Mr.
Muhammad Latif |
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| Mrs.
Naiyer Muzafar Husain |
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| Mian
Mohammad Younis |
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| Company
Information |
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| PRINCIPAL
OFFICERS |
Abdul Rauf H. M. Wala |
Executive Director
(F&A) |
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|
Salaam Akbar |
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General Manager (Mills) |
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|
Muhammad Abdul Aleem |
Company Secretary |
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| BANKERS |
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National Bank of Pakistan |
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Standard Chartered
Grindlays Bank |
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ABN-AMRO Bank N.V. |
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| AUDITORS & |
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Rahman Sarfaraz & Co. |
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| TAX
CONSULTANTS |
Chartered Accountants |
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| LEGAL
ADVISORS |
Mohsin Tayebali & Co. |
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|
Advocates & Legal
Consultants |
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| REGISTERED
OFFICE |
108 (1st Floor), SIDCO
Avenue Centre, |
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Moulana Din Muhammad
Wafai Road, |
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Karachi - 74200 |
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Tel: 5671181 |
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Fax: 5686676 |
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| MILLS |
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Jinnah Avenue, Malir
Halt, |
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Karachi - 75100 |
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Tel: 9248536-7 |
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Fax: 9248616 |
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Email: spledf@sat.net.pk. |
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| Notice
of Annual General Meeting |
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| Notice
is hereby given that the Thirty-Sixth Annual General Meeting of Security
Papers Limited will be held on |
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| Thursday,
the 8th November, 2001 at 11:00 AM at Raffia Chaudhri Memorial Centre, SIDCO
Avenue Centre |
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| (Ground
Floor), Opp: Y.M.C.A., Moulana Din Muhammad Wafai Road, Karachi to transact
the following business: |
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| 1.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended 30th June, 2001 |
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| together
with the Reports of the Auditors and the Directors. |
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| 2.
To consider and approve payment of 40% Final Cash Dividend making a total of
60% for the year ended |
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| 30th
June, 2001 as recommended by the Board of Directors. |
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| 3.
To appoint Auditors for the year 2001-2002 and to fix their remuneration. |
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By Order of the Board |
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(MUHAMMAD ABDUL ALEEM) |
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|
Company Secretary |
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| NOTES |
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| 1.
The Share Transfer Books of the Company will remain closed from 24th October
to 8th November, 2001 |
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| (both
days inclusive). |
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| 2.
A member entitled to attend and vote at the Meeting may appoint any other
member as his/her proxy to |
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| attend
and vote on his/her behalf. The instrument appointing proxy must be received
at the Registered |
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| Office
of the Company duly stamped and signed not later than 48 hours before the
meeting. |
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| CDC
Account Holders will further have to follow the undermentioned guidelines as
laid down in |
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| Circular
No.1 dated January 26, 2000 issued by the Securities & Exchange
Commission of Pakistan. |
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|
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| A.
For Attending the Meeting: |
|
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| i)
In case of individuals, the account holder or sub-account holder and/or the
person whose securities |
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| are
in group account and their registration details are uploaded as per the
Regulations, shall |
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| authenticate
his/her identity by showing his/her original National Identity Card (NIC) or
original |
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| passport
at the time of attending the meeting. |
|
|
| ii)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen |
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| signature
of the nominee shall be produced (unless it has been provided earlier) at the
time of the |
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| meeting. |
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| B.
For Appointing Proxies: |
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| (i)
In case of individuals, the account holder or sub-account holder and/or the
person whose securities |
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| are
in group account and their registration details are uploaded as per the
Regulations, shall submit |
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| the
proxy form as per the above requirement. |
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|
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| (ii)
The proxy form shall be witnessed by two persons whose names, addresses and
NIC Numbers shall |
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| be
mentioned on the form. |
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|
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| (iii)
Attested copies of NIC or Passport of the beneficial owners and the proxy
shall be furnished with the |
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| proxy form. |
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|
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| (iv)
The proxy shall produce his/her original NIC or original Passport at the time
of the meeting. |
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| (v)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen |
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| signature
shall be submitted (unless it has been provided earlier) alongwith proxy form
to the |
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| Company. |
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|
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| 3.
Members who desire to stop deduction of Zakat from their dividends may submit
a declaration on non- |
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| judicial
stamp paper duly signed as required under the law. |
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|
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| 4.
Members are requested to notify any change in address immediately. |
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| Year
at a Glance |
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|
2001 |
2000 |
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|
(Rupees in
thousand) |
|
|
| Sales - Net |
|
559.637 |
519.379 |
|
| Other Income |
|
97.021 |
75.177 |
|
| Profit
before taxation |
|
375.905 |
331.881 |
|
|
------------------ |
------------------ |
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| Taxation |
|
41.993 |
38.391 |
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------------------ |
------------------ |
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| Dividend |
|
| Cash (%) |
|
60 |
67 |
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| Bonus
Shares (%) |
|
-- |
25 |
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| Earning
per Share (Rs.) |
|
15.19 |
13.35 |
|
| Paid up Capital |
|
219.818 |
175.855 |
|
| Shareholders'
Equity |
|
886.519 |
684.498 |
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| Total assets |
|
1.053.718 |
826.165 |
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| Working Capital |
|
450.182 |
254.573 |
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| Capital
Expenditure |
|
10.592 |
10.887 |
|
| Number
of Employees |
|
631 |
643 |
|
|
------------------ |
------------------ |
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| Production
(Tonnes) |
|
1.675 |
1.520 |
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------------------ |
------------------ |
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|
| Directors'
Report |
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| The
directors of the Company have pleasure in presenting Annual Report and the
Audited Financial Statements |
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| of
the Company for the year ended June 30, 2001. |
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| FINANCIAL
RESULTS |
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| A
brief summary of the financial results is as under: |
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2001 |
2000 |
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|
|
Rupees |
Rupees |
|
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| PROFIT
AFTER TAXATION |
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|
333,912,018 |
293,489,973 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
18,421 |
51,303 |
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|
------------------ |
------------------ |
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| PROFIT
AVAILABLE FOR APPROPRIATIONS |
|
333,930,439 |
293,541,276 |
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| APPROPRIATIONS |
|
| Transferred to: |
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| Plant
Replacement Reserve |
|
|
111,927,342 |
107,736,563 |
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| General Reserve |
|
|
|
90,000,000 |
24,000,000 |
|
| Reserve
for Bonus Shares |
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|
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| Final
@ NIL (2000: 25%) |
|
-- |
43,963,670 |
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| Proposed
Cash Dividend |
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|
|
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| Interim
@ 20% (2000: 20%) |
|
43,963,666 |
35,170,932 |
|
| Final
@ 40% (2000: 47%) |
|
87,927,332 |
82,651,690 |
|
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|
------------------ |
------------------ |
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|
131,890,998 |
117,822,622 |
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------------------ |
------------------ |
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333,818,340 |
293,522,855 |
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------------------ |
------------------ |
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| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
112,099 |
18,421 |
|
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|
========== |
========== |
|
| EARNING
PER SHARE |
|
|
15.19 |
13.35 |
|
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|
========== |
========== |
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| DIVIDEND |
|
| The
Board of Directors is pleased to recommend a Final Cash Dividend of 40%
(Rs.4/- per share) in addition to |
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| Interim
Cash Dividend of 20% (Rs.2/- per share) making a total of 60%. |
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|
| BOARD
OF DIRECTORS |
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| Since
the previous Report, the following changes have occurred: |
|
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| Incoming |
|
Outgoing |
|
| Mian
Muhammad Younis |
Mr. Muhammad Jamil |
|
| Mst.
Saira Akhtar (Alternate) |
Sheikh M. Rafiq Akhtar |
|
| Mr.
Aamir Akhtar (Alternate) |
Mst. Saira Akhtar |
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| Sheikh
M. Rafiq Akhtar |
Mr. Aamir Akhtar |
|
| Mr. Firasat Ali |
|
Mr. Istaqbal Mehdi |
|
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| The
Board welcome the new members and record its appreciation of the valuable
services rendered by the |
|
| outgoing
Directors while on the Board of the Company. |
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|
| AUDITORS |
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| The
present auditors M/s. Rahman Sarfaraz & Co., Chartered Accountants,
retire and being eligible, offer |
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| themselves
for reappointment. |
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|
| PATTERN
OF SHAREHOLDING |
|
| Pattern
of Shareholding is annexed herewith. |
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|
| CHAIRMAN'S
REVIEW |
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| The
contents of the Chairman's Review are endorsed by the Board of Directors of
the Company. |
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|
|
|
On behalf of the Board |
|
|
|
|
|
| Karachi |
|
SYED NASEEM AHMAD |
|
| Dated:
September 25, 2001 |
|
Chairman |
|
|
|
|
|
| Chairman's
Review |
|
|
| On
behalf of the Board of Directors and myself, I welcome you to the 36th Annual
General Meeting of the |
|
| Company.
I take the opportunity to present a review of the Company's affairs for the
year ended June 30, 2001. |
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|
| PRODUCTION |
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| The
Production of finished paper during the year increased by 10.20% at 1,675
tonnes as compared to 1,520 |
|
| tonnes
during 1999-2000. This increase was due to installation of some locally
manufactured plant components. |
|
|
| SALES |
|
| The
Company has achieved highest ever sales revenue of Rs.559.64 million showing
an increase of 7.75% as |
|
| compared
to previous year's Rs.519.38 million. |
|
|
| PROFIT
AFTER TAX |
|
| Despite
difficult economic conditions prevailing during the year under review, the
Company has managed to earn |
|
| highest
ever profits. This was made possible through strict financial discipline.
During the year, the Company |
|
| earned
a net profit after tax of Rs.333.91 million as compared to previous year net
profit after tax of Rs.293.49 |
|
| million,
showing an increase of 13.77%. |
|
|
| EXPANSION
PROGRAMME |
|
| Your
Company has entered into following material contracts: |
|
|
| (i)
Agreement for the supply of machinery, equipment and spares with M/s. Voith
Paper GmbH & Co. KG at a |
|
| contract
price of US$ 17.730 million; |
|
|
| (ii)
Agreement for the civil works and other services with M/s. Abroad Jaffer
& Company (Private Limited at a |
|
| contract
price of US$ 0.350 million. |
|
|
|
| While
awarding the contract, your Directors have ensured that the supplier of the
plant was providing original |
|
| state-of-the-art
and time tested technology and had vast international experience in this
field. |
|
|
| The
existing plant of the Company, when modified by the installation of the new
machinery and equipment shall |
|
| have
a production capacity of about 2,000 tonnes saleable paper as against the
existing capacity of 1,460 |
|
| tonnes. |
|
|
| The
Project is scheduled to be completed by January 2003 at a total estimated
project cost of Rs.1,832.00 |
|
| million.
This will be financed by NB.P Term Finance (Rs.1,150.00 million) and surplus
funds of the Company |
|
| (Rs.682.00
million). The foreign exchange component is protected through exchange risk
cover. |
|
|
| ISO 9002 |
|
| Your
Company has achieved a new landmark when an ISO 9002 Certification was
awarded by M/s. Det Norske |
|
| Veritas.
This would enable the Company to be internationally competitive. The
management would ensure that |
|
| this
symbol of quality remains a hallmark of the Company. |
|
|
| CREDIT
RATING |
|
| In
order to obtain an independent opinion on the credit worthiness and financial
strength of the Company, a credit |
|
| rating
was arranged through Pakistan Credit Rating Agency (Pvt.) Limited (PACRA) -
an affiliate of Fitch, one of |
|
| the
largest international rating agencies. I am pleased to inform that PACRA has
assigned long-term rating of 'AA' |
|
| (Double
A) and short-term rating of 'AI+' (Single A one plus) to the Company. These
ratings denote a very low |
|
| expectation
of credit risk and a very strong capacity for timely payment of financial
commitments. |
|
|
| INFORMATION
TECHNOLOGY |
|
| The
Company is looking towards a computer-based Management Information System.
Computer Training |
|
| Programs
for the officers and staff are therefore, underway. The implementation of
this system will provide a |
|
| centralized
database, support integration between the manufacturing and financial
systems, and will assist the |
|
| Company
in providing meaningful data in time for better management decision making. |
|
|
| FUTURE
PROSPECTS |
|
| The
Company is presently engaged in pursuing a plant expansion programme. The new
plant would be capable |
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| of
producing banknote paper with latest security features comparable to the
acceptable international standards |
|
| in
vogue. The resultant increase in overall plant capacity would not only cater
to the demand of our major |
|
| customer
but also enable exportable surplus corresponding to the requirements of
international market. This |
|
| would
benefit the Company on many counts such as foreign exchange earnings etc.,
contributing its due share |
|
| to
the prosperity of the Company, shareholders and the national economy. |
|
|
| ACKNOWLEDGEMENT |
|
| I
wish to share with you my deep appreciation for the untiring efforts and
dedication of all the officers, staff and |
|
| workers
during the year. I would also like to thank our valued suppliers and
shareholders for their cooperation |
|
| and
the trust reposed in our Company. |
|
|
| Karachi: |
|
SYED NASEEM AHMAD |
|
| Dated:
September 25, 2001 |
|
Chairman |
|
|
|
|
|
| Pattern
of Shareholding as at June 30, 2001 |
|
|
| No. of |
*Shareholding |
Total Shares |
|
|
| Shareholders |
From |
To |
Held |
|
|
|
| 214 |
1 |
100 |
4,971 |
|
| 201 |
101 |
500 |
53,546 |
|
| 95 |
501 |
1000 |
73,160 |
|
| 196 |
1001 |
5000 |
433,362 |
|
| 39 |
5001 |
10000 |
261,009 |
|
| 11 |
10001 |
15000 |
133,638 |
|
| 6 |
15001 |
20000 |
103,672 |
|
| 1 |
20001 |
25000 |
20,015 |
|
| 2 |
25001 |
30000 |
51,918 |
|
| 1 |
30001 |
35000 |
32,277 |
|
| 1 |
40001 |
45000 |
43,948 |
|
| 1 |
65001 |
70000 |
68,781 |
|
| 2 |
80001 |
85000 |
163,512 |
|
| 1 |
95001 |
100000 |
99,378 |
|
| 1 |
110001 |
115000 |
111,152 |
|
| 1 |
120001 |
125000 |
120,400 |
|
| 1 |
125001 |
130000 |
126,395 |
|
| 1 |
145001 |
150000 |
149,397 |
|
| 1 |
285001 |
290000 |
285,163 |
|
| 1 |
490001 |
495000 |
490,615 |
|
| 1 |
580001 |
585000 |
582,597 |
|
| 1 |
1575001 |
1580000 |
1,578,186 |
|
| 1 |
1810001 |
1815000 |
1,811,031 |
|
| 1 |
1985001 |
1990000 |
1,987,456 |
|
| 2 |
2195001 |
2200000 |
4,396,344 |
|
| 1 |
8795001 |
8800000 |
8,799,910 |
|
| ------------------ |
|
------------------ |
|
| 784 |
|
Total |
21,981,833 |
|
| ========== |
|
========== |
|
|
|
| *
Note: There is no shareholding in the slabs not mentioned. |
|
|
|
| Categories
of Shareholders |
|
No. of |
|
|
|
|
Shareholders |
Shares held |
Percentage |
|
|
| Individuals |
|
750 |
1,367,549 |
6.22 |
|
| Investment
Companies |
|
3 |
2,290,873 |
10.42 |
|
| Insurance
Companies |
|
6 |
3,068,539 |
13.96 |
|
| Joint
Stock Companies |
|
17 |
13,382,289 |
60.88 |
|
| Financial
Institutions |
|
5 |
1,593,311 |
7.25 |
|
| Modaraba
Companies |
|
1 |
9,475 |
0.04 |
|
| Others: |
|
|
| Dawood
Foundation |
|
1 |
120,400 |
0.55 |
|
| Administrator
Abandoned Properties |
1 |
149,397 |
0.68 |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Total |
|
|
784 |
21,981,833 |
100.00 |
|
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
|
| Statement
of Value Added and Its Distribution |
|
|
|
|
|
2001 |
2000 |
|
|
|
|
Rs. in '000 |
Rs. in '000 |
|
| VALUE ADDED |
|
| Net Sales |
|
|
559,637 |
519,379 |
|
| Materials
and Services |
|
|
(165,880) |
(184,416) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
393,757 |
334,963 |
|
| Other Income |
|
|
97,021 |
101,021 |
|
|
------------------ |
------------------ |
|
|
|
490,778 |
435,984 |
|
|
|
|
|
========== |
========== |
|
| DISTRIBUTION |
|
| Salaries
and Wages |
89,918 |
18.32% |
80,868 |
18.55% |
|
| Workers'
Profit Participation Fund |
19,872 |
4.05% |
17,534 |
4.02% |
|
| Interest
on WPPF |
185 |
0.04% |
1,570 |
0.36% |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
109,975 |
22.41% |
99,972 |
22.93% |
|
|
| To Government |
|
| Tax |
|
41,993 |
8.56% |
38,391 |
8.81% |
|
| WWF |
|
1,659 |
0.34% |
1,273 |
0.29% |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
43,652 |
8.90% |
39,664 |
9.10% |
|
|
| To Shareholders |
|
|
|
| Bonus |
|
-- |
-- |
43,964 |
10.08% |
|
| Cash Dividend |
|
131,891 |
26.87% |
117,823 |
27.02% |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
131,891 |
26.87% |
161,787 |
37.10% |
|
|
| Retained
in Business |
|
| Depreciation |
|
3,239 |
0.66% |
2,857 |
0.66% |
|
| Retained Profit |
|
202,021 |
41.16% |
131,704 |
30.21% |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
205,260 |
41.82% |
134,561 |
30.87% |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
|
490,778 |
100.00% |
435,984 |
100.00% |
|
|
========== |
========== |
========== |
========== |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Security Papers
Limited as at 30th June. 2001 and the related |
|
| profit
and loss account, cash flow statement and statement of changes n 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 standards 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 30th
June, 2001 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 (XVIII of 1980) was |
|
| deducted
by the Company and deposited in the Central Zakat Fund established under
section 7 of that |
|
| Ordinance. |
|
|
|
|
|
| Balance
Sheet as at June 30, 2001 |
|
|
|
|
|
|
|
|
|
2001 |
2000 |
