| Shezan International Limited |
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
| Contents |
|
|
| Company's
Profile |
|
| Notice
of Meeting |
|
| Directors'
Report to the Members |
|
| Five
Years Review at a Glance |
|
| Pattern
of Shareholdings |
|
| Auditors'
Report to the Members |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Statement
of Sources and Application of Funds |
|
| Notes
to the Accounts |
|
| Statement
u/s 237 of the Companies Ordinance, 1984 |
|
| Subsidiary
Company's Accounts |
|
| Consolidated
Accounts |
|
|
|
| Company's
Profile |
|
|
| Board
of Directors: |
|
| Mr.
Muneer Nawaz |
Chairman |
|
| Mr.
Saifi Chaudhary |
Chief Executive |
|
| Mrs.
Majeeda Begum |
|
|
| Mr.
Mahmood Nawaz |
|
|
| Mr. C. M. Khalid |
|
|
| Mr. M. Naeem |
|
|
| Mr.
Muhammad Khalid |
|
|
| Mr.
Fiyaz Ahmed Longi |
(Nominee N.I.T.) |
|
| Mr.
Adnan Meraj |
(Nominee N.I.T.) |
|
|
| Executive
Director & Company Secretary: |
|
| Mr.
Muhammad Khalid. |
|
|
|
|
|
| Registered
Office / Head Office: |
|
|
| 56-Bund
Road, Lahore - 54500. |
|
|
|
| Factories: |
|
|
|
| Bund
Road, Lahore. |
|
|
|
| Phone:
(042) 7466900-04, |
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|
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| Fax:
(042) 7466899-95, |
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|
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| E-mail:
shezan@brain.net.pk |
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|
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|
|
|
| Federal
"B", Industrial Area, Karachi. |
|
|
| Phone:
(021) 6344722-23, |
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|
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| Fax:
(021) 6313790, |
|
|
|
| E-mail:
shezan@cyber.net.pk |
|
|
|
|
|
|
| Auditors: |
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| Messrs.
Ford, Rhodes, Robson, Morrow, |
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| Chartered
Accountants, |
|
| 1st
Floor, The Syed, 11-Civic Centre, |
|
| New
Garden Town, Lahore. |
|
|
| Legal Advisors: |
|
| Messrs.
Cornelius, Lane & Mufti, |
|
| Nawa-e-Waqt
Building, |
|
| Shahrah-e-Fatima
Jinnah, Lahore. |
|
|
| Bankers: |
|
|
|
| United
Bank Limited. |
|
|
| Citibank N.A. |
|
|
|
| The
Hongkong and Shanghai |
|
|
| Banking
Corporation Limited. |
|
|
| The
Bank of Khyber. |
|
|
|
|
| Notice
of Meeting |
|
|
| Notice
is hereby given that the 36th Annual General Meeting of the Company will be
held on December |
|
| 31,
1999 at 10:30 hours at the Company's Registered Office: 56-Bund Road, Lahore,
to transact the following |
|
| business: |
|
|
| 1.
To confirm the minutes of Extra Ordinary General Meeting held on June 29,
1999. |
|
|
|
|
| 2.
To receive and adopt the Directors' and Auditors' Report and Audited Accounts
for the |
|
| year
ended June 30, 1999. |
|
|
|
|
|
|
| 3.
To approve dividend @ Rs. 5.00 per share (50%) as recommended by the Board of |
|
| Directors. |
|
|
|
|
|
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| 4.
To appoint Auditors for the year 1999-2000 and fix their remuneration. The
present |
|
| Auditors
Messrs. Ford, Rhodes, Robson, Morrow, Chartered Accountants being eligible, |
|
| offer
themselves for re-appointment. |
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|
|
|
|
| 5.
To transact any other business with the permission of the Chair. |
|
|
| Shares
transfer books of the company will be closed from December 29, 1999 to
January 08, 2000 (both |
|
| days
inclusive) for determining the entitlement of the dividend. |
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|
|
|
|
|
By order of the Board |
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|
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|
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| Lahore: |
|
|
|
|
|
| December
02, 1999 |
|
|
Executive Director |
|
|
| Notes: |
|
|
| 1.
A member entitled to attend and vote at the General Meeting is entitled and
vote on his/her behalf. |
|
| Form
of proxies, in order to be valid, must be received at the Registered Office
of the Company |
|
| not
less than 48 hours before the Meeting. |
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|
|
|
|
| 2.
Shareholders are requested to notify the change of address, if any,
immediately. |
|
|
|
| Directors'
Report to the Members |
|
|
| It
gives us great pleasure to welcome you to the 36th Annual General Meeting of
the Company. |
|
|
| There
was a slight increase of sales during the year, from Rs. 591.166 million to
Rs. 607.856 million, but |
|
| a
healthy increase in profit of about 18%. The main reason for this increase in
profit is, as we have been |
|
| advising
our Share Holders from time to time, the desire of the company to get better
margin on our |
|
| products
and we were successful in this regard during the current year. Profit after
taxation increased from |
|
| Rs.
22.144 million to Rs. 26.249 million. |
|
|
| Overall,
the economic atmosphere in the country was strained during the period July
'98 to June '99, as a |
|
| result
of the International Sanctions on the country due to political reasons. The
effect of this economic |
|
| climate
was also felt by the company, but by the Grace of Allah, and better policies
of the management, |
|
| we
were able to come out of the difficult situation and produced a modest
increase in sales with a fair |
|
| increase
in profitability. |
|
|
| The
exports during the period decreased by about 13%, which is primarily due to
the fall in exports to |
|
| Bangla
Desh, as their local industry has come onstream, resulting in curtailment of
imports; in order to |
|
| counter
this, we have to find other export markets and now we are concentrating on
the U.S.A. |
|
|
| The
present budget adversely effected the company because of 3% Additional Sales
Tax and withdrawal |
|
| of
Chilling Charges exemption, resulting in higher incidence of Sales Tax. |
|
|
| The
results under the circumstances of our wholly owned subsidiary Hattar Fruit
Products Limited, were |
|
| on
the whole satisfactory. |
|
|
| During
the year under review, the election of Directors was held and a new board was
elected in June |
|
| 1999.
Mrs. Amtul Hai Khalid and Mr. Naseem Beg retired. We wish to place on record,
the valuable |
|
| contribution
made by them during their tenture on the Board. |
|
|
| Mr.
Fiyaz A. Longi and Mr. Adnan Meraj joined the board. We wish to extend a warm
welcome to Mr. |
|
| Longi
and Mr. Meraj on our Board and look forward to their valuable advice and
guidance. |
|
|
| Financial
Results: |
|
| As
you will observe from Balance Sheet and Profit |
|
| and
Loss Account, our financial results are as |
|
| under: |
|
|
|
|
|
(Rupees in thousands) |
|
|
|
|
|
|
| Profit
before taxation |
|
|
36,749 |
|
| Provision
for taxation |
|
|
10,500 |
|
|
|
|
------------------ |
|
| Profit
after taxation |
|
|
26,249 |
|
| Unappropriated
profit brought forward |
|
2,870 |
|
|
|
|
------------------ |
|
| Available
for appropriation |
|
|
99,119 |
|
| Appropriations: |
|
|
|
|
|
| Transfer
to General reserve |
|
|
-- |
|
| Proposed
dividend @ 50% (1998: 35%) |
|
25,000 |
|
|
|
|
------------------ |
|
| Unappropriated
profit carried forward |
|
4,119 |
|
|
========= |
|
|
|
| Dividend: |
|
| The
Company has always followed a policy of sharing profit, |
|
| with
the Share Holders, and the same policy is being repeated. |
|
|
| Future
Prospects: |
|
| The
Shezan brand is well known in Pakistan and our products |
|
| are
also a known name in the country. We feel that with better |
|
| marketing
efforts, the company will continue to make progress |
|
| in
its sphere and by the Grace of Allah, would maintain its |
|
| position
as one of the leading e0mpanies in food processing |
|
| seet0rs
of Pakistan. |
|
|
| We
continue to make our humble contribution to the national |
|
| exchequer,
by contributing Rs. 47,567,767 in the shape of |
|
| Excise
Duty and Rs. 99,368,785 as Sales Tax for the year |
|
| ended
June 30, 1999. |
|
|
| Since
we have taken necessary action, we do not foresee any |
|
| Y2K
problems at the beginning of the next century. |
|
|
| Auditors: |
|
| The
present Auditors Messrs. Ford, Rhodes, Robson, Morrow, Chartered Accountants
have conveyed their |
|
| willingness
to be appointed in the ensuing year. |
|
|
| Labour
Management Relations: |
|
| During
the year under review, the labour and management relations remained cordial.
Your Directors |
|
| place
on record, their appreciation for the loyalty and devotion to duty of the
officers and workers of all |
|
| categories. |
|
|
|
|
On behalf of the Board |
|
|
|
|
|
|
| Lahore: |
|
|
|
|
| December
02, 1999 |
|
Chief Executive |
|
|
|
|
| Five
Years Review at a Glance |
|
|
|
|
|
(Rupees in thousands) |
|
|
|
Year |
Year |
Year |
Year |
Year |
|
|
1995 |
1996 |
1997 |
1998 |
1999 |
|
|
(Six months) |
|
|
|
|
| Income |
|
|
| Sales |
|
397,417 |
682,248 |
536,428 |
607,856 |
591,166 |
|
| Others |
|
1,336 |
3,911 |
2,154 |
7,543 |
14,144 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
398,753 |
686,159 |
538,582 |
605,310 |
615,399 |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
|
|
|
|
| Expenditure |
|
|
|
|
| Cost of sales |
|
288,154 |
524,704 |
415,481 |
468,348 |
469,909 |
|
|
| Administrative, |
|
|
|
|
| selling
and general |
53,516 |
99,956 |
82,819 |
92,362 |
93,553 |
|
|
| Financial |
|
1,860 |
3,452 |
1,986 |
953 |
898 |
|
|
| Others |
|
10,575 |
17,500 |
15,606 |
15,003 |
14,290 |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
|
354,105 |
645,612 |
515,892 |
576,666 |
578,650 |
|
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
|
| Profit
before taxation |
44,648 |
40,547 |
22,690 |
28,644 |
36,749 |
|
| Provision
for taxation |
16,500 |
14,450 |
4,000 |
6,500 |
10,500 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Profit
after taxation |
28,148 |
26,097 |
18,690 |
22,144 |
26,249 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
|
| Paid-up capital |
|
50,000 |
50,000 |
50,000 |
50,000 |
50,000 |
|
| Reserves
& unappropriated profits |
93,689 |
98,536 |
102,226 |
106,870 |
108,119 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Shareholders
equity |
143,689 |
148,536 |
152,226 |
156,870 |
158,119 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
| Break
up value per share (Rs.) |
28.74 |
29.71 |
30.44 |
31.38 |
31.62 |
|
| Earnings
per share (Rs.) |
5.63 |
5.22 |
3.74 |
4.43 |
5.25 |
|
| Cash
distribution per share (Rs.) |
3.50 |
4.25 |
3.00 |
3.50 |
5.00 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
| Pattern
of Shareholdings as at June 30, 1999 |
|
|
| Number of |
Shareholdings |
Total Shares |
|
| Shareholders |
From |
To |
Held |
|
|
| 68 |
1 |
100 |
6,800 |
|
| 149 |
101 |
500 |
61,500 |
|
| 38 |
501 |
1,000 |
34,000 |
|
| 46 |
1,001 |
5,000 |
113,700 |
|
| 4 |
5,001 |
10,000 |
25,949 |
|
| 3 |
10,001 |
15,000 |
37,450 |
|
| 2 |
20,001 |
25,000 |
43,125 |
|
| 3 |
25,001 |
30,000 |
84,500 |
|
| 2 |
35,001 |
40,000 |
76,000 |
|
| 1 |
40,001 |
45,000 |
43,200 |
|
| 1 |
45,001 |
50,000 |
49,905 |
|
| 1 |
50,001 |
55,000 |
54,925 |
|
| 1 |
55,001 |
60,000 |
55,530 |
|
| 1 |
60,001 |
65,000 |
65,500 |
|
| 1 |
65,001 |
70,000 |
66,980 |
|
| 1 |
70,001 |
75,000 |
72,300 |
|
| 2 |
75,001 |
80,000 |
153,400 |
|
| 2 |
95,001 |
100,000 |
199,600 |
|
| 1 |
100,001 |
105,000 |
102,200 |
|
| 1 |
105,001 |
110,000 |
109,625 |
|
| 1 |
165,001 |
170,000 |
165,811 |
|
| 3 |
210,001 |
215,000 |
636,906 |
|
| 1 |
355,001 |
360,000 |
356,117 |
|
| 1 |
465,001 |
470,000 |
467,107 |
|
| 1 |
1,915,001 |
1,920,000 |
1,917,870 |
|
| ------------------ |
|
------------------ |
|
| 335 |
|
|
5,000,000 |
|
| ========== |
|
|
========== |
|
|
|
|
|
|
| The
slabs representing Nil holding have been omitted. |
|
|
| Categories
of Shareholders |
|
|
|
|
Number of |
Shares |
|
|
| Particulars |
|
Shareholders |
Held |
Percentage |
|
|
| Individuals |
|
324 |
2,832,305 |
56.65 |
|
| Joint
Stock Companies |
|
2 |
21,725 |
0.43 |
|
| Investment
Companies |
|
3 |
82,800 |
1.66 |
|
| Insurance
Companies |
|
3 |
45,200 |
0.90 |
|
| Financial
Institutions |
|
2 |
2,017,870 |
40.36 |
|
|
| Others |
|
|
| National
Industrial Finance |
|
| Corporation
of Pakistan |
|
1 |
100 |
0.00 |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
335 |
5,000,000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Shezan
International Limited as at June 30, 1999 and the |
|
| related
profit and loss account and statement of sources and application of funds,
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 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 and the statement of sources and
application of funds, |
|
| 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 June 30, 1999 and of the profit and the changes
in sources and |
|
| application
of funds 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. |
|
|
|
|
|
| Lahore: |
|
| December
02, 1999 |
|
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at June 30, 1999 |
|
|
|
Notes |
1999 |
1998 |
|
|
(Rupees in
thousands) |
|
|
|
|
| Tangible
fixed assets |
|
|
|
| Operating
fixed assets |
|
3 |
34,763 |
34,987 |
|
|
|
|
|
| Long
term investments |
|
4 |
21,250 |
21,250 |
|
| Long
term deposits |
|
5 |
1,685 |
1,394 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
57,698 |
57,631 |
|
|
|
|
|
| Current assets |
|
|
|
| Stores
and spares |
|
6 |
870 |
957 |
|
| Stock in trade |
|
|
7 |
167,000 |
136,276 |
|
| Trade debts |
|
|
8 |
46,308 |
32,705 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
9 |
10,749 |
22,565 |
|
| Cash
and bank balances |
|
10 |
19,299 |
25,236 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
244,226 |
217,739 |
|
|
|
|
|
| Less:
Current liabilities |
|
|
|
| Short-term
running finances |
|
11 |
18,665 |
9,076 |
|
| Current
maturity of obligations |
|
|
|
| under
finance lease |
|
16 |
734 |
1,773 |
|
| Creditors,
accrued and other |
|
|
|
| liabilities |
|
|
12 |
94,796 |
87,543 |
|
| Dividends |
|
|
13 |
25,143 |
17,608 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
139,338 |
116,000 |
|
|
|
|
------------------ |
------------------ |
|
| Working
capital |
|
|
|
104,888 |
101,739 |
|
|
|
|
|
------------------ |
------------------ |
|
| Capital
employed |
|
|
|
162,586 |
159,370 |
|
|
|
|
|
========== |
========== |
|
| Represented by |
|
|
|
| Share capital |
|
|
14 |
50,000 |
50,000 |
|
| General reserve |
|
|
|
15 |
104,000 |
104,000 |
|
| Unappropriated
profits |
|
|
|
4,119 |
2,870 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
158,119 |
156,870 |
|
|
|
|
| Deferred
taxation |
|
|
2,500 |
2,500 |
|
| Obligations
under finance lease |
|
16 |
1,967 |
-- |
|
|
|
|
|
|
| Contingencies
and commitments |
|
17 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
162,586 |
159,370 |
|
|
|
========== |
========== |
|
|
|
|
| The
attached notes form an integral part of these accounts. |
|
|
|
|
Chief Executive |
|
Director |
|
|
|
|
|
| Profit
and Loss Account |
|
| for
the year ended June 30, 1999 |
|
|
|
|
Notes |
1999 |
1998 |
|
|
|
(Rupees in
thousands) |
|
|
|
|
| Sales |
|
|
18 |
607,856 |
591,166 |
|
| Cost of sales |
|
|
19 |
469,909 |
468,348 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
137,947 |
122,818 |
|
|
|
|
|
| Less: |
Administrative and
general expenses |
20 |
23,996 |
20,867 |
|
|
Selling and distribution
expenses |
|
21 |
69,557 |
71,495 |
|
|
Financial charges |
|
22 |
898 |
953 |
|
|
Other expenses and
provisions |
|
23 |
14,290 |
15,003 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
108,741 |
108,318 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
|
29,206 |
14,500 |
|
| Other income |
|
|
|
24 |
7,543 |
14,144 |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
|
36,749 |
28,644 |
|
| Provision
for taxation |
|
|
25 |
10,500 |
6,500 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
|
26,249 |
22,144 |
|
| Unappropriated
profit brought forward |
|
|
2,870 |
2,226 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
29,119 |
24,370 |
|
| Appropriations: |
|
|
|
|
|
