| Wazir Ali Industries Limited |
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| Annual
Report 1999 |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
SYED YAWAR ALI |
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Chairman & Managing
Director |
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|
DR. ABDUL RAOUF M. MANNAA |
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|
DR. SAMI MOHSIN BAROUM |
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(Alternate KARAM ELLAHI
SHAIKH) |
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|
SYED TARIQ ALI |
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SYEDA FERIEL RIFFAT ALl |
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SYED SHAHID ALl |
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|
BEHRAM HASAN |
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| COMPANY
SECRETARY |
A. JABBAR GHORI |
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| AUDITORS |
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TASEER HADI KHALID &
CO. |
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CHARTERED ACCOUNTANTS |
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KARACHI |
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| BANKERS |
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HABIB BANK LIMITED |
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NATIONAL DEVELOPMENT
FINANCE CORPORATION |
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PRIME COMMERCIAL BANK
LIMITED |
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| REGISTERED
OFFICE |
KANDAWALA BUILDING |
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M.A. JINNAH ROAD |
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KARACHI |
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| FACTORY |
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HALI ROAD |
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HYDERABAD |
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| REGISTRAR
AND SHARE |
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| TRANSFER
OFFICE |
THK ASSOCIATES (PVT)
LIMITED |
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GROUND FLOOR |
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SHAIKH SULTAN TRUST
BUILDING NO.2 |
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BEAUMONT ROAD |
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KARACHI |
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| CONTENTS |
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| NOTICE
OF MEETING |
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| DIRECTORS'
REPORT TO THE MEMBERS |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| BALANCE
SHEET |
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| PROFIT
AND LOSS ACCOUNT |
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| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
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| NOTES
TO THE ACCOUNTS |
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| PATTERN
OF SHARE HOLDING |
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| NOTICE
OF MEETING |
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| NOTICE
IS HEREBY GIVEN that the 47th Annual General Meeting of the shareholders of |
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| Wazir
Ali Industries Limited will be held on 7th December 1999 at 02.00 p.m. at
Hotel Beach |
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| Luxury,
Karachi, to transact the following business: |
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| A.
ORDINARY BUSINESS |
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|
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| 1.
To confirm the minutes of the Annual General Meeting of the company held on
23rd December 1998. |
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| 2.
To receive and adopt the audited Balance Sheet and Profit and Loss Account of
the company for the |
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| year
ended 30th June 1999 together with the directors' and auditors' reports
thereon. |
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| 3.
To appoint auditors for the year ending 30th June 2000 and fix their
remuneration. |
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| 4.
To transact any other business with the permission of the Chair. |
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| B.
SPECIAL BUSINESS |
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| 5.
To ratify the remuneration of Managing Director and Chief Executive as drawn
by him earlier ill the |
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| capacity
of Executive Director who is also a director on Board. |
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| A
statement under section 160 of the Companies Ordinance 1984 pertaining to the
Special Business |
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| is
being sent to the members with this notice. |
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By Order of the Board |
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| Karachi:
2nd November 1999 |
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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 30th November
1999 to 7th |
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| December
1999 (both days inclusive). |
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| 2.
A member entitled to attend and vote at the annual general meeting is
entitled to appoint another |
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| member
as a proxy to attend and vote instead of him. The instrument appointing a
proxy must be |
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| received
at the registered office of the company not less than forty-eight hours
before the time of the |
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| meeting. |
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|
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| 3.
Members are requested not to bring children along with them, as they will not
be allowed in the |
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| meeting hall. |
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| 4.
Members are requested to notify the change in their addresses, if any,
immediately to the Registrar of |
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| the
Company, Messrs. THK Associates (Pvt.) Limited, Ground Floor, Shaikh Sultan
Trust Building |
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| No
2, Beaumont Road, Karachi. |
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| STATEMENT
IN REGARD TO SPECIAL BUSINESS |
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| Remuneration
of Managing Director and Chief Executive |
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| The
approval of the members is required for the payment of remuneration to Syed
Yawar All as the Managing |
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| Director
and the Chief Executive of the Company, being the same as drawn earlier by
him as the Executive |
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| Director
of the Company and to pass the following resolution with or without
modification(s): |
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| "Resolved
that Syed Yawar Ali as the Managing Director and Chief Executive of the
Company be and is |
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| hereby
entitled to be paid the same remuneration of Rs 720,000/- per annum and other
benefits, as drawn by |
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| him
earlier in his capacity as the Executive Director of the Company with effect
from 12th October 1998." |
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| Syed
Yawar All is interested in this business to the extent of indicated
remuneration. |
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| DIRECTORS'
REPORT TO THE MEMBERS |
|
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| The
members of the Board of Directors, feel pleasure in presenting to you the
Company's audited accounts for |
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| the
year ended on June 30, 1999, together with the Auditors report, thereon. |
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| Overview |
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| Not
only the year under review had been a difficult year for the country, but to
your Company as well. The |
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| reason
being the depressed economic conditions, which further worsened, consequent
upon Pakistan's Nuclear |
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| Test,
freezing of Dollar accounts, resulting into a general hike / escalation in
prices of all items. |
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| The
depressed economic conditions together with many other unforeseen factors /
changes, bearing huge |
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| adverse
financial implications, on the edible oil industry in Pakistan, could be
classified as the most affected |
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| industry
of Pakistan in the year 1998-1999. To mention a few, the year has seen the
most volatile world edible |
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| oil
market, forced reduction at Rs. 3,000 per M. Ton in the selling prices of
ghee and cooking oils, an upward |
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| revision
in the customs duty rates, together with a levy of regulatory duty, which
cumulatively increased from |
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| Rs.
4,800 to Rs. 10,800 and from Rs 3,800 to Rs. 9,050 per M. Ton, on RBD Palm
oil and crude Soya |
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| Bean
oil respectively. The Sales Tax at 12.5% revised to 15% and the Income Tax at
2.0% of the duty paid |
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| value
and the duty plus Sales Tax paid value respectively, were also levied on the
edible oils. |
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| Operating
Results |
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| The
impact of the high priced oils, the upward revision in the Government levies
and other changes dealt above, |
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| mostly
appeared / implemented in the second half of the year. Further, these coupled
with the growing |
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| competition
in the Non Premium Segment, bearing huge adverse financial implications,
in-fact have distorted |
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| the
Operating Results for the year under review. |
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| Tile
Gross Profit at 10% remained at the same level of last year. The Net Before
Tax Profit of Rs. 11.12 Million |
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| posted
for the first half of the year ended on December 31, 1998, converted into a
Net Before Tax Loss of Rs. |
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| 16.87
Million, due to the reasons stated above. |
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| To
minimize the adverse financial impact, your Company this year, had carried
out intensive marketing |
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| activities
against the most volatile and aggressive competition, to maintaining and
further strengthening the |
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| premium
image of your brand "TULLO" and as such the marketing, selling and
distribution expenses have |
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| recorded
an increase of Rs. 13.4 million. Further, the utilization of the local credit
at a comparatively much |
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| higher
Markup, caused an increase of Rs. 11.63 million in the financial expenses. |
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| Future
Prospects |
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| In-order
to overcome the above situation, the management of your Company has taken
several corrective |
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| measures.
These include the removal of organization fatigue through restructuring,
induction of the most |
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| professionally
qualified, dynamic and aggressive personnel, adjustment in the distribution
net work and a total |
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| change
in working environment "Ownership and Team Working ". |
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| At
this stage, it is also highly gratifying to me to report to you, that the
Company has signed a Joint Venture |
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| Agreement
with one of the most professionally organized and a leading multinational
group of companies, |
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| Savola
Edible Oil Company Limited, Jeddah, Kingdom of Saudi Arabia. Under the terms
of Joint Venture |
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| Agreement,
they have already acquired 12.2% shareholding in the Company. |
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| Further,
the management of your Company, with the blessing of Allah the Almighty, who
is the most gracious |
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| and
merciful, has successfully set its corporate objectives, the Vision and
Mission "To turn around the |
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| Company
and to regain the lost market share" through well planned sales and
marketing strategy. Let me assure |
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| you,
that the management of your company has full trust and confidence, about the
bright future of your |
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| Company. |
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| Development
and Diversification |
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| The
improvement in the existing products and the development of the new products
remained apace. |
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| A
new Oil, based on a comprehensive study of potential market requirement of an
Ideal Blended Oil, that takes |
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| care
of health and provides best taste and nourishment to food, has been developed
and is being launched. |
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| Further,
the management of your Company has also considered it advisable to diversify
in some related food |
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| products
business, with the consent and cooperation of its Joint Venture partner. |
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| IS0-9000 |
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| Another
encouraging news is that your Company has been awarded the ISO 9002
certification. It represents the |
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| hard
working and determination of your management in modifying and developing the
Production Processes |
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| and
Factories to classify Wazir Ali Industries Limited, as one of the best
quality manufacturer of edible ghee and |
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| oils
under the "Most Clean and Hygenic Environment" |
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| Membership
to Central Depository Company (CDC) |
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| As
per the requirements of the Central Depository Act 1997, your Company has
taken the membership of the |
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| "Central
Depository Company of Pakistan Limited (CDC)" and has also appointed THK
Associates (Pvt.) |
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| Limited
as Registrar of the Company. |
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| Y2K
Compliance |
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| The
Company has made all necessary arrangements for the compliance of Y2K, at all
operational levels and |
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| there
would be no problem while entering to the New Millennium. |
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| Change
in the Board of Directors |
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| On
the sad demise of Syed Asad Ali, the Chairman of the Board of Directors, who
served the Company for more |
|
| than
35 years and expired after a long protracted illness on February 13, 1999,
may Allah the Almighty, rest his |
|
| soul
in peace, the Board of Directors, recorded their appreciation for his
valuable contribution, and co-opted |
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| Syeda
Feriel Riffat Ali as director on Board in his place. |
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| Auditors |
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| The
present Auditors, Taseer Hadi Khalid & Company, Chartered Accountants,
due to retirement and being |
|
| eligible,
offer themselves for reappointment for the next financial year ending on June
30, 2000. |
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| Pattern
of Shareholding |
|
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| The
statement of the Pattern of Shareholding is given on page 30. |
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| Acknowledgment |
|
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| The
directors place on record their recognition and appreciation for the valuable
contribution made by all |
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| employees
in the progress and development of the Company. Further the relationship
between the workers and |
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| the
staff remained cordial. |
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|
Syed Yawar Ali |
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| Karachi:
2nd November 1999, |
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Chairman & Managing Director |
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|
|
| Auditors'
Report to the Members |
|
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| We
have audited the annexed balance sheet of Wazir Ali Industries 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 the 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 loss and the changes in financial
position 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. |
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|
|
|
|
Taseer Hadi Khalid & Co. |
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| Karachi:
2nd November 1999 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30 JUNE 1999 |
|
|
|
|
Note |
1999 |
1998 |
|
|
|
|
|
(Rupees in
'000) |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
|
| Share Capital |
|
|
|
| Authorised |
|
|
|
| 8,000,000
ordinary shares of Rs. 10/= |
|
|
80,000 |
80,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
3 |
51,975 |
51,975 |
|
|
|
|
|
| RESERVES |
|
|
|
|
| Revenue
reserves |
|
|
66,067 |
66,067 |
|
| Accumulated
loss |
|
|
(144,169) |
(122,461) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(78,102) |
(56,394) |
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|
|
|
------------------ |
------------------ |
|
|
|
4 |
(26,127) |
(4,419) |
|
|
|
|
| SURPLUS
ON REVALUATION |
|
|
|
| OF
FIXED ASSETS |
|
5 |
46,800 |
46,800 |
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
1,260 |
1,284 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term bank financing - secured |
|
6 |
190,428 |
135,498 |
|
| Creditors,
accrued expenses and other liabilities |
|
7 |
60,792 |
151,253 |
|
| Provision
for taxation |
|
8 |
5,142 |
5,530 |
|
| Proposed
dividend |
|
|
-- |
2,599 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
256,362 |
294,880 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
9 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
278,295 |
338,545 |
|
|
|
|
========== |
========== |
|
|
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
|
|
|
|
| Operating
fixed assets - at cost/valuation |
|
|
| less
accumulated depreciation |
|
10 |
53,058 |
53,119 |
|
|
|
|
|
| Capital
work in progress |
|
11 |
737 |
260 |
|
| Intangible
assets - trade marks |
|
|
1 |
1 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
53,796 |
53,380 |
|
|
|
|
| LONG
TERM LOANS - |
|
|
|
| secured,
considered good |
|
12 |
139 |
256 |
|
|
|
|
| LONG
TERM SECURITY DEPOSITS |
|
|
35 |
45 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stock in trade |
|
13 |
151,373 |
115,301 |
|
| Goods in transit |
|
|
14,395 |
95,179 |
|
| Stores
and spares |
|
14 |
5,952 |
5,777 |
|
| Trade
debts - unsecured, |
|
|
|
| considered good |
|
|
21,343 |
39,385 |
|
|
|
|
|
| Loans
and advances - |
|
|
|
| considered good |
|
15 |
10,200 |
13,171 |
|
|
|
|
|
| Deposits,
prepayments and |
|
|
|
| other
receivables |
|
16 |
8,664 |
11,234 |
|
|
|
|
| Cash
and bank balances |
|
17 |
12,398 |
4,817 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
224,325 |
284,864 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
278,295 |
338,545 |
|
|
|
|
========== |
========== |
|
| Annexed
notes form an integral part of these accounts. |
|
|
Syed Yawar Ali |
|
Behram Hasan |
|
|
Chief Executive |
|
|
Director |
|
|
| Karachi:
2nd November 1999 |
|
|
|
| Profit
and Loss Account |
|
| For
the year ended 30 June 1999 |
|
|
|
|
Note |
1999 |
1998 |
|
|
|
|
|
|
(Rupees in
'000) |
|
|
|
|
|
| INCOME |
|
|
|
|
| Sales - net |
|
18 |
1,028,102 |
1,105,648 |
|
| Cost
of goods sold |
|
19 |
926,487 |
994,941 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
101,615 |
110,707 |
|
|
|
|
|
|
|
|
| EXPENSES |
|
|
|
| Administrative |
|
20 |
28,713 |
28,121 |
|
| Selling
and distribution |
|
21 |
65,008 |
51,597 |
|
| Financial |
|
22 |
27,136 |
15,506 |
|
| Workers'
profit participation |
|
|
-- |
862 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
120,857 |
96,086 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(19,242) |
14,621 |
|
|
|
|
|
|
| Other income |
|
23 |
2,376 |
1,748 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
|
(16,866) |
16,369 |
|
|
|
|
|
|
|
| Provision
for taxation - Current |
|
8 |
(5,142) |
(5,530) |
|
|
- Prior year |
|
|
300 |
-- |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(4,842) |
(5,530) |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
AFTER TAXATION |
|
|
(21,708) |
10,839 |
|
|
|
|
|
|
| APPROPRIATION |
|
|
|
| Proposed
dividend: Nil (1998: @ 5%) |
|
|
-- |
2,599 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(21,708) |
8,240 |
|
|
|
|
|
| Accumulated
loss brought forward |
|
|
(122,461) |
( 130,701 ) |
|
|
|
|
------------------ |
------------------ |
|
| ACCUMULATED
LOSS CARRIED FORWARD |
|
|
( 144,169) |
( 122,461 ) |
|
|
|
|
========== |
========== |
|
| (Loss)
/ earning per share - basic and diluted |
|
24 |
(4.18) |
3.49 |
|
|
|
|
|
|
|
|
|
|
|
| Annexed
notes form an integral part of these accounts. |
|
|
|
Syed Yawar Ali |
|
Behram Hasan |
|
|
Chief Executive |
|
Director |
|
|
| Karachi:
2nd November 1999 |
|
|
|
| Statement
of Changes in Financial Position |
|
| For
the year ended 30 June 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
|
(Rupees in
'000) |
|
|
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
| (Loss)/Profit
before taxation |
|
|
(16,866) |
16,369 |
|
|
|
|
|
|
| Adjustments for: |
|
|
|
|
| Depreciation |
|
|
6,327 |
5,739 |
|
| Gain
on disposal of fixed assets |
|
|
(509) |
(184) |
|
| Financial
charges |
|
|
27,136 |
15,506 |
|
| Doubtful
receivables written off |
|
|
-- |
1,427 |
|
| Workers'
profit participation fund |
|
|
-- |
862 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
16,088 |
39,719 |
|
|
|
|
|
| Changes
in operating assets/liabilities |
|
|
|
|
|
| (Increase)
in stores and spares |
|
|
(175) |
(187) |
|
| (Increase)
in stock in trade |
|
|
(36,072) |
(58,630) |
|
| Decrease/(Increase)
in goods in transit |
|
|
80,784 |
(14,018) |
|
| Decrease
in trade debts - unsecured |
|
|
18,042 |
11,132 |
|
| Decrease/(Increase)
in deposits, prepayments and other receivables |
|
2,570 |
(4,854) |
|
| (Decrease)
in creditors accrued expenses and other liabilities |
|
(93,467) |
(22,194) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(28,318) |
(88,751) |
|
|
|
|
| Payments
to Workers Profit Participation fund |
|
|
(862) |
(8) |
|
| Financial
charges paid |
|
|
(23,369) |
(13,876) |
|
| Long
term deposits (paid)/received |
|
|
(14) |
142 |
|
| Income Tax paid |
|
|
(2,860) |
(3,068) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in operating activities |
|
|
(39,335) |
(65,842) |
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
| Fixed
capital expenditure |
|
|
(7,764) |
(4,891) |
|
| Decrease/(Increase)
in loans & advances |
|
|
718 |
618 |
|
| Proceeds
from sale of fixed assets |
|
|
335 |
-- |
|
| Insurance
claim receipts on fixed assets |
|
|
1,195 |
225 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities |
|
|
(5,516) |
(4,048) |
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
| Payment
of dividend |
|
|
(2,498) |
(3) |
|
| Increase
in short term borrowings |
|
|
54,930 |
47,214 |
|
| Issue
of share capital |
|
|
-- |
17,017 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated from financing activities |
|
|
52,432 |
64,228 |
|
|
|
|
|
|
| Net
increase/(decrease) in cash and bank balances |
|
|
7,581 |
(5,662) |
|
| Cash
and bank balances at beginning of the year |
|
|
4,817 |
10,479 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
a |
