| United Distributors Pakistan Limited |
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Report
of Directors |
|
| 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 |
|
|
| ARSHAD
ABDULLA |
Chief Executive |
|
| RASHID
ABDULLA |
|
| KHALID
MALIK |
|
| SHAHID
ABDULLA |
|
| SHARAF
IQBAL |
|
| ANJUM
BASHIR |
|
| ANIS
WAHAB ZUBERI |
N.I.T. Nominee |
|
|
|
| COMPANY
SECRETARY |
|
| ANJUM
BASHIR |
|
|
| AUDITORS |
|
| SIDAT
HYDER QAMAR & CO. |
|
| Chartered
Accountants |
|
|
| REGISTERED
OFFICE |
|
| 9th
Floor, N.I.C. Building, |
|
| Abbasi
Shaheed Road, Karachi. |
|
|
| REGISTRAR |
|
| Gangjees
Investment & Finance Consultants, |
|
| Room
No. 513, Clifton Centre, Kehkashan, |
|
| Block
5, Clifton, Karachi-75600 |
|
|
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| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| NOTICE
is hereby given that the 17th Annual General Meeting of UNITED DISTRIBUTORS
PAKISTAN |
|
| LIMITED
will be held at Hotel Regent Plaza Shahra-e-Faisal Karachi on Saturday,
January 15, 2000 at 11 a.m. |
|
| to
transact the following business: |
|
|
| ORDINARY
BUSINESS |
|
|
| 1.
To confirm the minutes of the last Annul General Meeting held on March 24,
1999. |
|
|
|
|
| 2.
To receive, consider and approve the audited accounts of the Company for the
year ended June 30, |
|
| 1999,
together with the Directors' and Auditors' reports thereon. |
|
|
|
|
| 3.
To approve the cash dividend at Re. 1/- (One) per ordinary share of Rs. 10/-
each (10%), as |
|
| recommended
by the Directors. |
|
|
| 4.
To appoint auditors and fix their remuneration for the current year. The
present auditors M/S. |
|
| SIDAT
HYDER QAMAR & CO. Chartered Accountants, retire and being eligible, offer
themselves |
|
| for
re-appointment. |
|
|
|
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| SPECIAL
BUSINESS |
|
|
| 5.
To fix the remuneration of the full time working Directors. |
|
|
| 6.
To approve the issue of bonus shares in the proportion of one share for every
ten shares held (10%) |
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| as
recommended by the Board of Directors and, if thought fit, to pass with or
without |
|
| modification(s)
the following resolution as an ordinary resolution. |
|
|
|
| "RESOLVED
that a sum of Rs. 6,000,000/- out of the un-appropriated profits of the
Company be |
|
| capitalized
and be applied towards the issue of 600,000 ordinary shares of Rs. 10/- each
and allotted |
|
| as
fully paid-up bonus shares to the members whose names appear in he register
of members at the |
|
| close
of business on January 12, 2000, in the proportion of one share for every ten
shares held and |
|
| that
such new shares shall rank pad passu with the existing ordinary shares except
that they will not |
|
| be.
eligible for cash dividend of this year." |
|
|
| "FURTHER
RESOLVED that in the event of any shareholder holding less than ten shares or |
|
| number
of shares which is not an exact multiple of ten, the Directors be and are
hereby authorized to |
|
| sell
in the stock market such fractional entitlement and to pay the proceeds of
sale when realized to |
|
| a
recognized charitable institution as may be selected by the Directors." |
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|
|
|
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|
By Order of the Board |
|
|
|
|
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| Karachi:
December 24, 1999. |
|
Company Secretary |
|
|
|
|
| NOTES: |
|
|
| 1.
The share transfer books of the Company will remain closed from January 13,
to January 20, 2000 (both |
|
| days
inclusive). Transfers received in order at the office of our Registrar M/S.
GANGJEES |
|
| INVESTMENT
& FINANCE CONSULTANTS, ROOM No. 513, CLIFTON CENTRE, KEHKASHAN, |
|
| BLOCK
5, CLIFTON, KARACHI-75600, by the close of business on Wednesday January 12,
2000 will |
|
| be
treated in time for the purpose of determining entitlement to dividend as
well as bonus shares. |
|
|
| 2.
A member entitled to attend and vote at this meeting may appoint a proxy to
attend and vote on his/her |
|
| behalf.
A proxy need not be a member of the Company. Proxies in order to be effective
must be received |
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| by
the Company's Registrar not less than 48 hours before the meeting. |
|
|
| Statement
under Section 160 of the Companies Ordinance, 1984. |
|
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| Item 5 |
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| Members
approval will be sought at the forthcoming Annual General Meeting for the
holding of office of profit |
|
| and
the payment of remuneration to working directors named Mr. Sharaf Iqbal and
Mr. Anjum Bashir. Both the |
|
| directors
are interested in this business only to the extent of their remuneration. |
|
|
| For
this purpose it is intended to propose that the following resolution be
passed as an ordinary resolution. |
|
|
| "RESOLVED
that the chief executive of the Company be and is hereby authorized to fix
remuneration of two |
|
| full
time working directors (M/S Sharaf Iqbal and Anjum Bashir), not exceeding
rupees two million five |
|
| hundred
thousand per annum plus Company's maintained car and other benefits as per
Company's policy. |
|
|
| Item 6 |
|
| In
the opinion of the directors, the financial position of the Company justifies
a bonus issue in the ratio of 1:10. |
|
| The
directors are interested in this business only to the extent of their
entitlement to bonus shares as |
|
| shareholders. |
|
|
| REPORT
OF DIRECTORS |
|
| The
Directors take pleasure in submitting their report and audited accounts of
the Company for the year ending |
|
| June 30, 1999. |
|
|
| FINANCIAL
RESULTS: |
|
| Profit
for the year before taxation |
|
|
16,644,958 |
|
| Less:
Provision for taxation |
|
|
4,100,000 |
|
|
|
|
------------------ |
|
| Profit
after taxation |
|
|
12,544,958 |
|
| Un-appropriated
profit brought forward |
|
12,959,581 |
|
|
|
|
------------------ |
|
| Profit
available for appropriation |
|
|
25,504,539 |
|
| Less:
Appropriations |
|
|
| Dividend
@ 10% |
|
|
6,000,000 |
|
| Transfer
to Reserve for |
|
|
| Issue
of Bonus Shares |
|
|
6,000,000 |
|
|
|
|
------------------ |
|
|
|
|
12,000,000 |
|
|
|
|
------------------ |
|
| Un-appropriated
profit carried forward |
|
Rupees |
13,504,539 |
|
|
|
|
|
------------------ |
|
| Earning
per share |
|
|
2.09 |
|
|
------------------ |
|
|
|
| REVIEW
OF OPERATIONS |
|
| In
the year ending June 30, 1999, the Company's turnover was Rs. 126.5 million
as compared to Rs. 101.4 |
|
| million
during the same period last year. |
|
|
| The
major increase was possible due to the addition of a high priced pesticide
which was added to our existing |
|
| product
range. This product was effective on white fly (a major pest of cotton) and
required tremendous efforts |
|
| for
its introduction. |
|
|
| Our
distribution business, which remains the back bone of our business line has
shown substantial increase in |
|
| our
revenue. Though due to the handling of larger volumes our cost also went up
proportionately. |
|
|
| The
decrease in overall gross profit ratio has mainly been due to the obsolete
stock which we were carrying and |
|
| has
now been written off. This has been done in view of the limited shelf life of
the products. |
|
|
| The
power system business remained marginal as no significant tenders were issued
by the public sector. |
|
|
| COMPLIANCE
WITH YEAR 2000 |
|
| The
Directors do not see any problem viz-a-viz the Millennium Bug as we have
converted and tested our |
|
| computer
system for year 2000 compliance. |
|
|
| FUTURE
OUTLOOK |
|
| Over
the past couple of years your Company has been going through a regular
restructuring process and we are |
|
| prepared
to face the forth coming challenges in a better way. |
|
|
| Due
to the liberal policy of the government in allowing imports of generic
products there has been a heavy |
|
| influx
of local mushroom companies which has resulted in a price war. Speculations
are that the profit margins |
|
| would
slide down gradually in the times to come. Your Company is fully aware of
such a situation and we are |
|
| trying
our best to maintain a lean and highly productive organization. |
|
|
| We
also have plans to bring in more products, specially the ones that have been
recently off patent. Our plans · |
|
| are
to enter into the bulk sales area either through our joint venture partners
or other reliable companies. |
|
|
| The
distribution business set up is being further tuned and organized to provide
complete customer satisfaction |
|
| to
our existing joint venture clients. We are also on the look out for
increasing our client base in this business |
|
| area. |
|
|
| Your
Company is also trying to enter the seeds business by finding suitable
partners who have strong research |
|
| back
up and are interested on a long term business relationship. This we believe
is a business area which needs |
|
| to
be tapped as it could bring in new technology and generate more profits to
your Company in future. |
|
|
| HOLDING
OF SHARES |
|
| The
pattern of holding of shares is shown on Page No. 25. |
|
|
| AUDITORS |
|
| The
retiring auditors M/S. Sidat Hyder Qamar & Co., being eligible, offer
themselves for re-appointment |
|
|
| ACKNOWLEDGMENT |
|
| The
Directors of your Company take great pleasure in recording their appreciation
of the fine work put in by all |
|
| Company
staff during the last year. |
|
|
|
Chief Executive |
|
Director |
|
|
| KARACHI:
December 24, 1999. |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of UNITED DISTRIBUTORS PAKISTAN
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
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 statement of changes in financial
position, 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 30 June 1999 and of the profit and the changes in financial position
for the year then |
|
| ended; and |
|
|
| d)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
|
|
SIDAT HYDER QAMAR & CO. |
|
| KARACHI:
December 24, 1999 |
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30 JUNE 1999 |
|
|
|
|
|
|
|
Note |
1999 |
1998 |
|
| CAPITAL
AND RESERVES |
|
|
|
|
|
| Authorised |
|
|
|
|
| 10,000,000
(1998: 10,000,000) Ordinary shares |
|
|
| of Rs. 10/- each |
|
|
|
100,000,000 |
100,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
3 |
60,000,000 |
60,000,000 |
|
| Reserve
for issue of bonus shares |
|
4 |
6,000,000 |
-- |
|
| General
reserves |
|
|
20,000,000 |
20,000,000 |
|
| Accumulated
profit |
|
|
13,504,539 |
12,959,581 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
99,504,539 |
92,959,581 |
|
|
|
|
|
|
| Deferred
Liabilities |
|
5 |
2,561,000 |
-- |
|
| Liabilities
against assets subject to .finance lease |
|
6 |
2,833,650 |
5,872,890 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of liabilities against assets subject to |
|
| finance lease |
|
|
3,039,240 |
3,817,976 |
|
| Short-term
loan and running finances |
|
7 |
166,684,691 |
136,663,078 |
|
| Creditors,
accrued and other liabilities |
|
8 |
119,127,755 |
124,719,218 |
|
| Proposed
dividend |
|
|
6,000,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
294,851,686 |
265,200,272 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
9 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
399,750,875 |
364,032,743 |
|
|
|
|
========== |
========== |
|
|
|
|
| FIXED
ASSETS -- TANGIBLE |
|
|
|
| Operating
fixed assets -- at book value |
|
10 |
2,067,126 |
2,459,514 |
|
| Assets
subject to finance lease |
|
11 |
2,923,285 |
9,742,645 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
4,990,411 |
12,202,159 |
|
|
|
|
|
| LONG-TERM
INVESTMENTS - AT COST |
|
12 |
22,515,930 |
22,515,930 |
|
| LONG-TERM
LOANS AND DEPOSITS |
|
13 |
1,443,557 |
1,741,680 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stock-in-trade |
|
14 |
51,715,019 |
43,523,403 |
|
| Trade debts. |
|
15 |
3,460,584 |
3,872,344 |
|
| Advances,
deposits, prepayments and other receivables |
16 |
62,961,165 |
30,497,334 |
|
| Short
term investment |
|
17 |
232,206,663 |
248,703,877 |
|
| Cash
and bank balances |
|
18 |
20,457,546 |
976,016 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
370,800,977 |
327,572,974 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
399,750,875 |
364,032,743 |
|
|
|
|
========== |
========== |
|
|
|
|
| AUDITORS'
REPORT ANNEXED |
|
| These
accounts should be read with the annexed notes. |
|
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 1999 |
|
|
|
Note |
1999 |
1998 |
|
|
|
|
| Sales -- net |
|
19 |
126,525,180 |
101,421,217 |
|
| Cost
of goods sold |
|
20 |
107,022,785 |
75,442,805 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
|
|
19,502,395 |
25,978,412 |
|
|
|
|
|
|
| Distribution
fee for handling of products recovered from |
|
| related parties |
|
|
|
|
28,961,089 |
24,470,513 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
48,463,484 |
50,448,925 |
|
|
|
|
|
| General
and administration expenses |
|
21 |
11,995,097 |
8,776,579 |
|
| Selling
and distribution expenses |
|
22 |
40,894,760 |
37,117,036 |
|
|
|
------------------ |
------------------ |
|
|
|
52,889,857 |
45,893,615 |
|
|
|
------------------ |
------------------ |
|
| Operating
(Loss)/profit |
|
|
(4,426,373) |
4,555,310 |
|
|
|
|
|
|
| Financial
charges |
|
23 |
25,644,927 |
37,438,032 |
|
| Other income |
|
24 |
(46,716,258) |
(42,902,180) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(21,071,331) |
(5,464,148) |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
16,644,958 |
10,019,458 |
|
| Provision
for taxation -- current year |
|
25 |
4,100,000 |
4,200,000 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
12,544,958 |
5,819,458 |
|
| Accumulated
profit brought forward |
|
|
12,959,581 |
7,140,123 |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
profit available for appropriation |
|
|
25,504,539 |
12,959,581 |
|
|
|
|
| Appropriations: |
|
|
|
| Proposed
final dividend Re. 1/- per share (1998: Nil) |
|
6,000,000 |
-- |
|
| Transfer
to reserve for issue of bonus share |
|
|
6,000,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
12,000,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
profit carried forward |
|
Rupees |
13,504,539 |
12,959,581 |
|
|
|
|
========== |
========== |
|
| Earning
per share -- Basic and diluted |
|
29 |
2.09 |
0.97 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| These
accounts should be read with the annexed notes. |
|
|
|
Chief Executive |
|
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE YEAR ENDED 30 JUNE 1999 |
|
|
|
|
1999 |
1998 |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Profit
after taxation |
|
12,544,958 |
5,819,458 |
|
| Adjustment
to reconcile profit to net cash provided |
|
| by
operating activities |
|
|
| Depreciation |
|
3,974,460 |
5,176,621 |
|
| Provision
for diminution in value of leased assets |
|
3,500,000 |
-- |
|
| Profit
on deposit account |
|
(41,601,352) |
(40,362,093) |
|
| Financial
charges |
|
30,866,894 |
-- |
|
| Bad debts |
|
395,439 |
-- |
|
| Stock
written off |
|
8,692,510 |
-- |
|
| Gain
on sale of fixed assets |
|
(539,554) |
(2,540,087) |
|
|
|
|
------------------ |
------------------ |
|
|
|
5,288,397 |
(37,725,559) |
|
|
|
------------------ |
------------------ |
|
| Cash
used in operating activities |
|
17,833,355 |
(31,906,101) |
|
| (Increase)
/ decrease in current assets |
|
|
(23,746,473) |
(1,457,912) |
|
| Increase
/ (decrease) in current liabilities |
|
|
24,430,150 |
8,000,319 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in operating activities before income tax |
|
18,517,032 |
(25,363,694) |
|
|
|
|
|
|
| Financial
charges paid |
|
|
(25,331,178) |
-- |
|
| Income tax paid |
|
|
(3,412,550) |
(7,685,910) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in operating activities |
|
|
(10,226,696) |
(33,049,604) |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Capital
expenditure |
|
(463,159) |
(432,842) |
|
| Increase
in long-term advances and deposits |
|
289,123 |
192,424 |
|
| Profit
received on deposit account |
|
32,960,238 |
35,226,130 |
|
| Proceeds
from sale of fixed assets |
|
740,000 |
2,718,000 |
|
|
|
------------------ |
------------------ |
|
| Net
cash from investing activities |
|
33,526,202 |
37,703,712 |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Payments
for assets subject to finance lease |
|
|
(3,817,976) |
(4,725,994) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in financing activities |
|
|
(3,817,976) |
(4,725,994) |
|
|
|
|
------------------ |
------------------ |
|
| Net
increase in cash and bank balances |
|
|
19,481,530 |
(71,886) |
|
| Cash
and bank balances at the beginning of the year |
|
976,016 |
1,047,902 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and bank balances at the end of the year |
|
Rupees |
20,457,546 |
976,016 |
|
|
|
|
========== |
========== |
|
|
|
Chief Executive |
|
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 1999 |
|
|
| 1.
NATURE OF BUSINESS |
|
| The
Company was incorporated in Pakistan as a public company limited by shares
and quoted on |
|
| Karachi,
Lahore and Islamabad Stock Exchanges. Its main business activities are
marketing and |
|
| distribution
of pesticides and other products. |
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Overall valuation policy |
|
| These
accounts have been prepared on the basis of historical cost convention. |
|
|
|
| 2.2
Basis of preparation |
|
| These
financial statements have been prepared in accordance with International
Accounting |
|
| Standards
as applicable in Pakistan. |
|
|
|
| 2.3
Fixed assets and depreciation |
|
|
|
|
|
| Fixed
assets are stated at cost less accumulated depreciation. Depreciation is
charged to income |
|
| applying
the straight-line method based on the estimated useful life of the assets.
Full year's |
|
| depreciation
is charged on additions during the year and no depreciation is charged on
deletions. |
|
|
|
|
| Maintenance
and normal repairs are charged-off as they are incurred. |
|
|
|
|
| Gains
and losses on disposal of assets are included in income currently. |
|
|
| Assets
subject to finance lease are stated at the lower of the present value of
minimum lease |
|
| payment
under the lease agreement and the fair value of the assets less depreciation
which is |
|
| charged
to income at the rates and basis applicable to Company's owned assets. The
related |
|
| obligations
under the lease are accounted for as liabilities. |
|
|
|
| 2.4
Staff retirement benefits |
|
|
|
| A
recognized Provident Fund Scheme is operative for all employees and
contributions thereto are |
|
| expensed. |
|
|
|
|
|
|
| 2.5 Taxation |
|
|
|
| Provision
for taxation is based on "presumptive tax" under section 80C of the
Income Tax |
|
| Ordinance,
1979. However, provision for taxation on other income is based on current
rate of |
|
| taxation. |
|
|
|
|
| 2.6 Investments |
|
|
|
| Long
term investments are stated at cost. Provision for diminution other than
temporary, if any, in |
|
| the
value of investments are taken to profit and loss account. |
|
|
|
|
|
| Short
term investments are stated at lower of cost and market value. |
|
|
|
| 2.7
Stock-in-trade |
|
|
|
| Stock-in-trade
is valued at the lower of cost [determined on a first-in first-out (FIFO)
basis] and net |
|
| realisable value. |
|
|
|
|
