| Ghandhara Nissan Diesel Limited |
|
|
|
|
|
|
|
|
| Annual
Report 1999 |
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|
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| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Chairman's
Review and Directors' Report |
|
| Auditors'
Report to the Members |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| Mr.
Raza Kuli Khan Khattak |
|
Chairman and Chief
Executive |
|
| Lt.
Gen. (Retd.) Ali Kuli Khan Khattak |
|
| (Alternate
of Begum Tehmina Habibullah Khan) |
|
| Mr.
Ahmed Kuli Khan Khattak |
|
| Mr.
M. Salman Siddique |
|
Chief Operating Officer |
|
| Mr.
Norio Abe |
|
| Mr.
Mitsuo Doi |
|
| Mr.
Mushtaq Ahmed Khan |
|
| Mr.
Nasim Beg |
|
| Mr.
Anis Wahab Zuberi |
|
| Ms.
Aaliya K. Dossa |
|
|
| SECRETARY |
|
| Mr.
Aqiel Amjad Ghani |
|
|
| REGISTERED
OFFICE |
|
| Ghandhara
House, |
|
| 109/2,
Clifton, |
|
| Karachi. |
|
|
| FACTORY |
|
| Port
Bin Qasim, |
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| Karachi. |
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|
| BANKERS
OF THE COMPANY |
|
| ABN
AMRO Bank |
|
| Allied
Bank of Pakistan Ltd. |
|
| American
Express Bank Ltd. |
|
| ANZ
Grindlays Bank Ltd. |
|
| The
Bank of Tokyo - Mitsubishi, Ltd. |
|
| Credit
Agricole Indosuez |
|
| Mashreq
Bank psc. |
|
| Emirates
Bank International PJSC. |
|
| Habib
Bank Limited |
|
| The
Hong Kong & Shanghai Banking Corporation |
|
| Muslim
Commercial Bank Ltd. |
|
| Societe
Generale Bank |
|
| United
Bank Ltd. |
|
| National
Bank of Pakistan Ltd. |
|
| Union
Bank Limited. |
|
| Indus
Bank Limited. |
|
| Askari
Commercial Bank Ltd. |
|
| Bolan
Bank Ltd. |
|
|
| AUDITORS |
|
| Taseer
Hadi Khalid & Co. |
|
| Chartered
Accountants, |
|
| First Floor, |
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| Shaikh
Sultan Trust Building No. 2 |
|
| Beaumont
Road, Karachi. |
|
|
| LEGAL
ADVISORS |
|
| Shaukat
Law Associates, |
|
| 217,
Central Hotel Annexe, |
|
| Abdullah
Haroon Road, |
|
| Karachi. |
|
|
| SHARE
REGISTRARS |
|
| T.H.K.
Associates (Pvt) Ltd. |
|
| Ground
Floor, |
|
| Shaikh
Sultan Trust Building No. 2 |
|
| Beaumont
Road, Karachi. |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 13th Annual General Meeting of Shareholders of
Ghandhara Nissan |
|
| Diesel
Limited will be held on Friday, the 31 st December, 1999 at 10.00 A.M., at
Hotel Avari Towers, |
|
| Fatima
Jinnah Road, Karachi, for the purpose oŁ transacting the following business: |
|
|
| 1.
To receive and consider the Audited Accounts of the Company for the year
ended 30th June, 1999. |
|
|
| 2.
To appoint Auditors for the year ending 30th June, 2000 and to fix their
remuneration. The retiring |
|
| Auditors,
Messrs: Taseer Hadi Khalid & Co., Chartered Accountants, being eligible,
offer them- |
|
| selves
for reappointment. |
|
|
| Special
Business |
|
|
| 3.
To consider, ratify and approve the remuneration of the Chief Executive and
full time working Director. |
|
|
| 4.
To transact any other business with the permission of the Chairman. |
|
|
By Order of the Board |
|
|
AQIEL AMJAD GHANI |
|
|
Company Secretary |
|
| Karachi
:7th December, 1999. |
|
|
| Statement
Under Section 160 (1) (b) of the Companies Ordinance, 1984 |
|
| pertaining
to the special business is annexed to this notice. |
|
|
| NOTES: |
|
|
| 1.
The Share Transfer Books of the Company will remain closed from 30th
December, 1999 to 5th |
|
| January,
2000, (both days inclusive). |
|
|
| 2.
Shareholders are requested to intimate any change in their address to our
Share Registrars, Messrs: |
|
| THK
Associates (Pvt) Ltd., Shares Department, Ground Floor, Sheikh Sultan Trust
Building No. 2, |
|
| Beaumont
Road, Karachi. |
|
|
| 3.
A Member entitled to attend and vote at the Annual General Meeting may
appoint another mem- |
|
| ber
as his/her Proxy to attend and vote instead of him/her. Form of Proxy is
enclosed with the |
|
| Annual
Report. Votes may be given personally or by Proxy or by Attorney or, in case
of a |
|
| Corporation,
by a representative. The instrument of Proxy, duly stamped, signed and
witnessed, |
|
| should
be lodged at the Registered Office of the Company at Ghandhara House, 109/2,
Clifton, |
|
| Karachi-6,
not later than 48 hours before the time of the meeting. |
|
|
| STATEMENT
UNDER SECTION 160 (1) (b) OF THE COMPANIES ORDINANCE, 1984. |
|
|
| The
approval of the shareholders is sought for the remuneration alongwith other
benefits as per ser- |
|
| vice
rules, of the Chief Executive and one full time working Director, as
recommended by the |
|
| Board
of Directors. |
|
|
| For
this purpose, it is proposed that the following resolution be passed as an
ordinary resolution. |
|
|
| "Resolved
that an aggregate sum not exceeding Rs.2.777 million be and is hereby
approved for |
|
| payment
as remuneration alongwith other benefit as per service rules to Mr. Raza Kuli
Khan |
|
| Khattak,.
Chief Executive, and Mr. M. Salman Siddique, full time working
Director." |
|
|
|
| CHAIRMAN'S
REVIEW & DIRECTORS' REPORT |
|
|
| I
welcome you on behalf of the Board of Directors to the Thirteenth Annual
General meeting of |
|
| your
Company to present the Annual Report for the year ended 30th June, 1999. |
|
|
| RESULTS |
|
|
| The
effects of the slow down in economy of the last year persisted in the year
under report. The |
|
| truck
and bus market, which was already depressed, aggravated further. The total
market which was |
|
| 1397
units in the financial year 1997/98 dropped to 1141 trucks and buses in
1998/99, a decrease of |
|
| 18.32%. |
|
|
| Nevertheless,
your company managed to maintain its market leadership with 45% of the market |
|
| share
through vigorous sales/after sales efforts to achieve optimum volume in
depressed conditions. |
|
|
| OPERATING
RESULTS |
|
|
|
Year ended |
Year ended |
|
|
30th June, 1999 |
30th June, 1998 |
|
|
(Rupees in Thousands) |
|
|
| Sales
and Services |
|
733,248 |
995,798 |
|
| Gross Profit |
|
47,107 |
128,351 |
|
| Provision
for taxation |
|
3,711 |
20,515 |
|
| Unappropriated
Profit brought forward |
|
25,867 |
10,819 |
|
| Accumulated
(Loss)/unappropriated profit |
|
| carried
forward |
|
(31,671) |
25,867 |
|
|
| A
comparison of production and sales for the year with 1997/98 is given below
:- |
|
|
| Year
ended 30th June, 1999 |
|
Year ended 30th June,
1998 |
|
| Trucks
& Buses (Units) |
|
Trucks & Buses
(Units) |
|
| Production |
Sales |
|
Production |
Sales |
|
| 528 |
512 |
|
591 |
643 |
|
|
|
|
|
| Unit
sales declined by 20%. |
|
| LOSS
PER SHARE |
|
|
| The
loss per share for the year under review amounted to Rs. 7.41. |
|
|
| REVALUATION
OF FIXED ASSETS |
|
|
| The
fixed assets of the company were revalued for the first time in 1994. The
policy is to revalue |
|
| assets.
every five years. This year however, these were revalued after four & a
half years, effective |
|
| 30th
June, 1999. The revaluation was conducted by independent valuers M/s Hamid
Mukhtar & Co., |
|
| and
examined by Muniff Ziauddin & Co., Chartered Accountants. |
|
|
| The
revaluation has been accordingly reflected in the Balance Sheet. |
|
|
|
(Rupees in Thousands) |
|
|
| Land |
|
32,025 |
|
| Building |
|
50,962 |
|
| Plant,
Machinery and equipment fabrication |
|
78,868 |
|
| Electrical
equipment |
|
4,244 |
|
| Computers |
|
2,673 |
|
| Furniture
& Fixture |
|
1,100 |
|
| Office
equipment, telephone system |
|
| and
fire fighting equipment |
|
790 |
|
|
---------- |
|
|
170,662 |
|
|
=========== |
|
| BOARD
OF DIRECTORS |
|
|
| During
the year under review, Mr. H. S. Mufti and Mr. Razi-ur-Rehman Khan resigned
from the |
|
| Board
of Directors. The casual vacancies caused by their resignation were filled by
the appointment |
|
| of
Mr. Ahmed Kuli Khan Khattak and Mr. Anis Wahab Zuberi respectively, on 7th
December, 1999. |
|
|
| Begum
Tehmina Habibullah Khan nominated Lt. Gen. (Retd) Ali Kuli Khan Khattak to be
her alter- |
|
| nate
on the Board of Directors. Lt. Gen. (Retd) Ali Kuli Khan Khattak was
appointed alternate |
|
| Director
of Begum Tehmina Habibullah Khan on 7th December, 1999. |
|
|
| The
Directors appreciate the services rendered by the outgoing Directors and
welcome the incom- |
|
| ing
Directors. |
|
|
| APPOINTMENT
OF AUDITORS |
|
|
| The
retiring auditors M/s. Taseer Hadi Khalid & Co., Chartered Accountants,
being eligible have |
|
| offered
themselves for re-appointment. |
|
|
| COMPUTER
SYSTEM |
|
|
| The
Company has improved and upgraded its Computer System to make it Year 2000
Compliant. |
|
|
| PATTERN
OF SHAREHOLDING |
|
|
| The
pattern of shareholding of the Company as at 30th June, 1999 is given on page
26. |
|
|
| ASSISTANCE
BY OUR PRINCIPALS |
|
|
| The
Management and your Directors would like to express their appreciation for
the continuous |
|
| support
by your company's Principals and Partners, M/s. Nissan Diesel Motor Co. Ltd.
and M/s. |
|
| Tomen
Corporation, Japan. |
|
|
| LABOUR
- MANAGEMENT RELATIONS |
|
|
| Your
directors are pleased to report a very congenial and satisfactory
relationship between the man- |
|
| agement
and the dedicated workers of your company. |
|
|
| MANAGEMENT/STAFF/WORKERS/DEALERS/VENDORS |
|
|
| Your
Directors wish to record their appreciation for the efforts of the
management, staff, workers, |
|
| dealers
and vendors and look forward to their continued dedicated efforts in future. |
|
|
| FUTURE
PROSPECTS |
|
|
| The
decline in the market for heavy duty Commercial Vehicles caused by the
stagnation in eco- |
|
| nomic
activity, the duty free import of Dump Trucks amounting to inflow of about
30-40 units per |
|
| month
will have an adverse effect on the current year's performance. In addition,
the steep decline |
|
| in
Pak Rupee against Japanese Yen, will push up the cost of imports with little
chances of substan- |
|
| tial
price increase in view of depressed market conditions and the effect of free
import of Dump |
|
| Trucks,
the position is likely to aggravate further. |
|
|
| Unless
viable long term economic policies are introduced and adhered to, another
difficult year |
|
| seems
ahead. |
|
|
|
For and on behalf of the
Board of Directors |
|
|
|
RAZA KULI KHAN KHATTAK |
|
| KARACHI:
7th December, 1999 |
|
CHAIRMAN/DIRECTOR |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of GHANDHARA NISSAN DIESEL LIMITED as
at |
|
| 30
June 1999 and the related Profit and Loss Account and Statement of Changes in
Financial |
|
| Position,
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 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 thereof
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 account- |
|
| ing
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; |
|
|
| ©
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 posi- |
|
| tion,
together with the notes forming part thereof, give the information required
by the |
|
| Companies
Ordinance, 1984 in the manner so required and give a true and fair view of
the |
|
| state
of the company's affairs as at 30 June 1999 and of the loss and the changes
in finan- |
|
| cial
position for the year then ended; |
|
|
| (d)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, |
|
| 1980; and |
|
|
| (e)
without qualifying our opinion we draw attention to note 3.2. The company's
fixed assets at |
|
| 30
June 1999 have been revalued by Hamid Mukhtar & Co. The revaluation has
been exam- |
|
| ined
by Muniff Ziauddin & Co. Chartered Accountants. |
|
|
|
TASEER HADI KHALID &
CO. |
|
| KARACHI:
7th December, 1999 |
|
CHARTERED ACCOUNTANTS |
|
|
|
| BALANCE
SHEET |
|
| AS
AT 30 JUNE, 1999 |
|
|
|
NOTE |
1999 |
1998 |
|
|
|
Rs '000 |
Rs '000 |
|
|
| FIXED
ASSETS |
|
3 |
190,717 |
116,672 |
|
| LONG
TERM INVESTMENT |
|
4 |
1,500 |
-- |
|
| DEPOSIT
AGAINST LEASE FACILITY |
|
|
1,785 |
1,481 |
|
| DEFERRED
DEVELOPMENT EXPENDITURE |
5 |
3,567 |
-- |
|
|
| CURRENT
ASSETS |
|
|
| Stores,
spares and loose tools |
|
6 |
1,549 |
3,729 |
|
| Stock
in trade |
|
7 |
167,478 |
298,061 |
|
| Trade
debtors - unsecured |
|
|
|
|
| considered
good |
|
8 |
30,553 |
102,565 |
|
| Advances,
deposits, prepayments |
|
|
|
|
| and
other receivables |
|
9 |
150,192 |
177,954 |
|
| Cash
and bank balances |
|
10 |
710 |
3,065 |
|
|
---------- |
---------- |
|
|
350,482 |
585,374 |
|
| LESS:
CURRENT LIABILITIES |
|
|
| Current
maturity of lease facility |
|
6,637 |
5,935 |
|
| Finance
under mark-up |
|
| arrangements
- secured |
|
11 |
199,620 |
172,368 |
|
| Bills payable |
|
|
4,567 |
69,049 |
|
| Creditors,
accrued expenses |
|
|
|
| and
other liabilities |
|
12 |
100,327 |
200,844 |
|
| Unclaimed
dividends |
|
|
301 |
324 |
|
| Taxation |
|
13 |
22,134 |
49,686 |
|
|
---------- |
---------- |
|
|
333,586 |
498,206 |
|
|
---------- |
---------- |
|
| NET
CURRENT ASSETS |
|
16,896 |
87,168 |
|
|
---------- |
---------- |
|
|
214,465 |
205,321 |
|
|
========== |
========== |
|
| SHARE
CAPITAL |
|
14 |
77,679 |
77,679 |
|
| GENERAL
RESERVE |
|
|
36,000 |
36,000 |
|
| ACCUMULATED
(LOSS)/UNAPPROPRIATED PROFIT |
|
(31,671) |
259867 |
|
|
|
---------- |
---------- |
|
|
15 |
82,008 |
139,546 |
|
|
| SURPLUS
ON REVALUATION |
|
| OF
FIXED ASSETS |
|
16 |
121,094 |
51,111 |
|
| LIABILITY
AGAINST ASSETS SUBJECT |
|
|
|
| TO
FINANCE LEASE |
|
17 |
4,187 |
8,513 |
|
| DEFERRED
LIABILITIES - Staff gratuity |
|
|
7,176 |
6,151 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
18 |
|
|
---------- |
---------- |
|
|
214,465 |
205,321 |
|
|
========== |
========== |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
| RAZA
KULI KHAN KHATTAK |
|
M. SALMAN SIDDIQUE |
|
| Chief
Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30 JUNE, 1999 |
|
|
NOTE |
1999 |
1998 |
|
|
|
Rs '000 |
Rs '000 |
|
|
| Sales
and services - Net |
|
19 |
733,248 |
995,798 |
|
| Cost
of goods sold |
|
20 |
686,141 |
867,447 |
|
|
|
---------- |
---------- |
|
| Gross profit |
|
|
47,107 |
128,351 |
|
| Administration
and selling expenses |
|
21 |
53,696 |
59,085 |
|
|
---------- |
---------- |
|
| Operating
(loss)/profit |
|
(6,589) |
69,266 |
|
| Other
income |
|
22 |
2,329 |
2,207 |
|
|
---------- |
---------- |
|
|
(4,260) |
71,473 |
|
|
| Financial
charges |
|
23 |
49,567 |
33,290 |
|
| Workers'
profit participation fund |
|
-- |
1,909 |
|
| Workers'
welfare fund |
|
-- |
711 |
|
|
---------- |
---------- |
|
|
49,567 |
35,910 |
|
|
---------- |
---------- |
|
| (Loss)/Profit
before taxation |
|
(53,827) |
35,563 |
|
| Provision
for taxation |
|
| -
Current year |
|
3,711 |
15,402 |
|
| - Prior year |
|
-- |
5,113 |
|
|
---------- |
---------- |
|
|
3,711 |
20,515 |
|
|
---------- |
---------- |
|
| (Loss)/Profit
after taxation |
|
(57,538) |
15,048 |
|
| Unappropriated
profit brought forward |
|
25,867 |
10,819 |
|
|
---------- |
---------- |
|
| Accumulated
(Loss)/Unappropriated profit carded forward |
|
(31,671) |
25,867 |
|
|
========== |
========== |
|
| (LOSS)/PROFIT
PER SHARE- BASIC AND DILUTED 30 |
|
(7.41) |
1.94 |
|
|
========== |
========== |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
| RAZA
KULI KHAN KHATTAK |
|
M. SALMAN SIDDIQUE |
|
| Chief
Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE YEAR ENDED 30 JUNE, 1999 |
|
|
NOTE |
1999 |
1998 |
|
|
|
Rs '000 |
Rs '000 |
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| (Loss)/profit
before taxation |
|
(53,827) |
35,563 |
|
|
| Adjustments
for: |
|
| Depreciation |
|
16,533 |
13,277 |
|
| Provision
for staff gratuity |
|
1,025 |
3,878 |
|
| Mark-up
and lease finance charges |
|
40,658 |
29,043 |
|
| Gain
on sale of fixed assets |
|
(464) |
(478) |
|
| Loss
on revaluation |
|
108 |
-- |
|
| Amortisation
of development expenditure |
|
891 |
-- |
|
| Return
on investment |
|
-- |
(110) |
|
|
---------- |
---------- |
|
|
4,924 |
81,173 |
|
| Changes
in operating assets and liabilities |
|
| Decrease/(Increase)
in stores, spares & loose tools |
|
2,180 |
445 |
|
| (Increase)/Decrease
in Stock in trade |
|
130,583 |
(8,200) |
|
| (Increase)/Decrease
in Trade debtors |
|
72,012 |
(102,980) |
|
| (Increase)/Decrease
in Advances, deposits & prepayments |
|
20,944 |
(10,975) |
|
| Increase/(Decrease)
in Bills payable |
|
(64,482) |
11,354 |
|
| Increase/(Decrease)
in Trade creditors |
|
(100,821) |
57,817 |
|
|
---------- |
---------- |
|
|
60,416 |
(52,539) |
|
|
---------- |
---------- |
|
|
65,340 |
28,634 |
|
| Interest paid |
|
(40,356) |
(26,492) |
|
| Income
tax paid |
|
(24,445) |
(33,074) |
|
|
---------- |
---------- |
|
|
(64,801) |
(59,566) |
|
|
---------- |
---------- |
|
| Net
cash in flow/(out flow) from operating activities |
|
539 |
(30,932) |
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Capital
expenditure |
|
(21,961) |
(4,586) |
|
| Long
term investment |
|
(1,500) |
-- |
|
| Payment
of dividend |
|
(23) |
(11,629) |
|
| Return
on investment |
|
-- |
110 |
|
| Sales
proceeds of fixed assets sold |
|
310 |
253 |
|
|
|
|
| Net
cash out flows from investing activities |
|
(23,174) |
(15,852) |
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
|
| Finance
lease liability |
|
(6,972) |
(5,278) |
|
|
---------- |
---------- |
|
| Net
cash out flows from financing activities |
|
(6,972) |
(5,278) |
|
|
---------- |
---------- |
|
| Net
decrease in cash and cash equivalents |
|
(29,607) |
(52,062) |
|
| Cash
and cash equivalents at beginning of the year |
|
(169,303) |
(117,241) |
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at end of the year |
27 |
(198,910) |
(169,303) |
|
|
========== |
========== |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED 30 JUNE, 1999 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
|
| GHANDHARA
NISSAN DIESEL LIMITED was incorporated in 1985 as a public |
|
| company
in Pakistan under the terms of a joint venture agreement concluded among |
|
| Ghandhara
Nissan Limited, Nissan Diesel Motor Company Limited of Japan and Tomen |
|
| Corporation
of Japan who are also shareholders of the Company. I |
