Packages Limited Annual Report 2019 Contents 2 Company Information Directors’ Report on the Consolidated 4 Core Values 152 Financial Statements 5 Six Years at a Glance Directors’ Report on the Consolidated 6 Horizontal and Vertical Analysis 156 Financial Statements-Urdu 10 Value Added and its Distribution Auditors’ Report to the Members on the 11 Sources and Application of Funds 161 Consolidated Financial Statements 12 Corporate Social Responsibility 170 Consolidated Financial Statements 19 Notice of Annual General Meeting 273 Video Link Facility 25 Notice of Annual General Meeting- Urdu 274 Video Link Facility- Urdu 30 Chairman’s Review Report 275 Electronic Transmission Consent 31 Directors’ Report to the Shareholders 276 Electronic Transmission Consent-Urdu 42 Directors’ Report to the Shareholders-Urdu 277 Form of Proxy 52 Shareholders’ Information 278 Form of Proxy-Urdu Statement of Compliance with Listed 279 Electronic Credit Mandate Form 63 Companies Regulations, 2019 280 Electronic Credit Mandate Form-Urdu Review Report on Statement of Compliance Contained in Listed 66 Companies Regulations, 2019 67 Auditors’ Report to the Members 76 Financial Statements Packages Limited – Annual Report 2019 1 COMPANY INFORMATION Board of Directors Company Secretary Adi J. Cawasji Towfiq Habib Chinoy (Chairman) Rating Agency (Non-Executive Director) PACRA Syed Hyder Ali (Chief Executive & Managing Director) Company Credit Rating (Executive Director) Long-Term AA Short-Term A1+ Asghar Abbas (Executive Director) Auditors A.F. Ferguson & Co. Atif Aslam Bajwa Chartered Accountants (Independent Director) Legal Advisors Imran Khalid Niazi Hassan & Hassan - Lahore (Non-Executive Director) Orr, Dignam & Co. – Karachi Josef Meinrad Mueller (Non-Executive Director) Shares Registrar FAMCO Associates (Pvt.) Ltd Shamim Ahmad Khan 8-F, Next to Hotel Faran (Non-Executive Director) Nursery, Block 6, P.E.C.H.S. Shahrah-e-Faisal Syed Aslam Mehdi Karachi-75400 (Non-Executive Director) PABX : (021) 34380101-5 : (021 34384621-3 Syed Shahid Ali Fax : (021) 34380106 (Non-Executive Director) Email: [email protected] Tariq Iqbal Khan Bankers & Lenders (Non-Executive Director) Askari Bank Limited Bank Al-Habib Limited Advisor Deutsche Bank A.G. Syed Babar Ali Habib Bank Limited International Finance Corporation (IFC) Chief Financial Officer JS Bank Limited MCB Bank Limited Khurram Raza Bakhtayari Standard Chartered Bank (Pakistan) Limited Packages Limited – Annual Report 2019 2 Head Office & Works Web Presence Shahrah-e-Roomi www.packages.com.pk P.O. Amer Sidhu Lahore - 54760, Pakistan PABX : (042) 35811541-46 Fax : (042) 35811195 Offices Registered Office & Regional Sales office 4th Floor, The Forum Suite No. 416 - 422, G-20, Block 9 Khayaban-e-Jami, Clifton Karachi - 75600, Pakistan PABX : (021) 35874047-49 : (021) 35378650-51 : (021) 35831618, 35833011, 35831664 Fax : (021) 35860251 Regional Sales Office 2nd Floor, G.D. Arcade 73-E, Fazal-ul-Haq Road, Blue Area Islamabad - 44000, Pakistan PABX : (051) 2348307-9 : (051) 2806267 Fax : (051) 2348310 Zonal Sales Offices C-2, Hassan Arcade Nusrat Road Multan Cantt. - 60000, Pakistan Tel. & Fax: (061) 4504553 2nd Floor Sitara Tower Bilal chowk, Civil Lines Faisalabad - Pakistan Tel : (041) 2602415 Fax : (041) 2629415 Packages Limited – Annual Report 2019 3 Packages Limited – Annual Report 2019 4 SIX YEARS AT A GLANCE (Rupees in million) 2019 2018 2017 2016 2015 2014 Assets Employed: Fixed Assets at Cost 14,736 13,184 11,514 10,068 10,036 9,835 Accumulated Depreciation/Amortization 6,835 6,459 6,190 5,665 6,055 5,973 Net Fixed Assets 7,902 6,726 5,324 4,403 3,981 3,861 Other Non-Current Assets 47,722 51,334 60,185 50,104 45,037 47,445 Current Assets 11,203 10,116 8,380 7,641 7,918 8,548 Current Liabilities 9,811 9,492 4,863 5,025 4,904 5,130 Net Current and Other Non-Current Assets 49,114 51,958 63,702 52,719 48,051 50,864 Assets of disposal Group - - - - - - Net Assets Employed 57,015 58,683 69,026 57,122 52,031 54,725 Financed By: Paid up Capital 894 894 894 894 884 864 Reserves 51,422 54,934 64,166 51,284 45,593 47,567 Preference Shares/Convertible stock reserve 606 606 606 606 1,310 1,572 Shareholder's Equity 52,922 56,434 65,666 52,784 47,786 50,003 Deferred Liabilities 1,261 1,229 1,027 736 488 467 Lease liabilities 41 - - - - - Long Term Finances 2,733 933 2,267 3,602 3,757 4,255 Long term advances 59 87 66 Total Non-Current Liabilities 4,093 2,249 3,360 4,338 4,245 4,722 Liabilities of disposal Group - - - - - - Total Funds Invested 57,015 58,683 69,026 57,122 52,031 54,725 Invoiced Sales-Gross 27,548 24,822 21,389 19,794 18,711 17,627 Materials Consumed 13,899 12,913 10,226 9,313 9,005 9,131 Cost of Goods Sold 18,543 17,419 14,370 13,221 12,664 12,873 Gross Profit 4,373 3,280 3,524 3,618 3,361 2,215 Employees Remuneration 2,699 2,520 2,331 2,209 1,732 1,521 Profit/(loss) from Operations 1,287 941 1,328 1,797 1,828 947 Profit before Tax 2,166 3,445 7,156 6,961 3,803 2,750 Profit/(loss) After Tax 1,346 2,736 6,216 5,596 3,295 2,536 EBITDA (from operations) 2,720 1,769 2,277 2,427 2,497 1,383 Key Ratios: (Rupees in million) 2019 2018 2017 2016 2015 2014 Profitability Gross Profit Ratio (%) 19.08 15.85 19.70 21.49 20.98 14.68 Profit before Tax (%) 9.45 16.64 39.99 41.34 23.73 18.22 EBITDA Margin to Sales (%) 11.87 8.55 12.72 14.41 15.58 9.16 Total Assets Turnover Ratio 0.34 0.30 0.24 0.27 0.28 0.25 Fixed Assets Turnover Ratio 3.33 3.67 4.07 3.92 4.27 4.18 Liquidity Current Ratio 1.14 1.07 1.71 1.52 1.61 1.67 Quick Ratio 0.72 0.67 1.20 1.07 1.15 1.13 Gearing Debt : Equity Ratio 5:95 4:96 5:95 7:93 8:92 8:92 Return on Equity (%) 2.54 4.85 9.47 10.60 6.90 5.07 Investment Basic EPS (Rs.) 15.06 29.69 69.05 62.61 37.42 29.89 Diluted EPS (Rs.) 14.93 29.18 65.02 58.45 33.62 26.59 Price - Earning Ratio 23.64 13.03 7.38 13.58 15.56 22.70 Interest Cover Ratio 3.08 7.87 17.96 6.43 7.08 4.67 Dividend Yield (%) 3.37 3.88 5.88 2.94 2.58 1.33 Dividend Cover Ratio 1.26 2.04 2.32 2.50 2.46 3.23 Cash dividend % 120.00 150.00 300.00 250.00 151.70 90.00 Break-up value per Ordinary share (Rs.) 585.32 624.62 727.90 583.78 519.99 554.26 Market Value per Ordinary Share - Year End (Rs.) 356.00 386.82 509.83 850.05 582.11 678.29 Cash Dividend per share 12.00 15.00 30.00 25.00 15.00 9.00 * Represents Continuing operation. ** Excluding effect of capital gain and reversal of impairment/(impairement loss) on available for sale financial assets, if any. Packages Limited – Annual Report 2019 5 HORIZONTAL & BalanceVERTICAL Sheet ANALYSIS Horizontal Analysis (Rupees in Million) 2019 19 vs 18 2018 18 vs 17 2017 17 vs 16 2016 16 vs 15 2015 15 vs 14 2014 Equity & Liabilities Rs. % Rs. % Rs. % Rs. % Rs. % Rs. SHARE CAPITAL & RESERVES Issued, subscribed and paid up capital 894 - 894 - 894 - 894 1.11 884 2.34 864 Preference shares /convertible stock of Rs 190 each 606 - 606 - 606 - 606 (53.72) 1,310 (16.65) 1,572 Reserves 49,084 (4.79) 51,550 (10.62) 57,673 16.39 49,550 18.32 41,878 (6.45) 44,766 Un-appropriated profit / (loss) 2,338 (30.90) 3,384 (47.88) 6,492 274.40 1,734 (53.32) 3,715 32.64 2,801 NON-CURRENT LIABILITIES Long term finances 2,733 193.00 933 (58.62) 2,254 (36.96) 3,576 (4.12) 3,729 (11.81) 4,229 Liabilities against assets subject to finance lease - - - (100.00) 13 (49.36) 26 (5.77) 28 7.66 26 Lease liabilities 41 - - - - - - - - - - Long term advances 59 (32.51) 87 32.68 66 - - - - - - Deferred taxation 462 27.76 362 5.22 344 (0.12) 344 39.80 246 (15.95) 293 Retirement benefits 621 21.30 512 42.80 358 310.36 87 115.97 40 - - Deferred liabilities 178 (49.89) 356 9.50 325 6.62 305 51.31 202 15.46 175 CURRENT LIABILITIES Current portion of long-term finances 221 (83.34) 1,329 (1.02) 1,342 131.94 579 47.53 392 91.64 205 Finances under mark up arrangements - secured 5,713 29.43 4,414 1,373.32 300 (78.24) 1,377 55.69 884 (29.95) 1,263 Trade and other payables 3,486 1.39 3,438 14.92 2,992 5.06 2,848 (13.12) 3,278 4.24 3,145 Unclaimed dividend 55 (11.01) 62 57.81 39 - - - - - - Accrued Finance Cost 335 34.43 249 31.40 190 (14.42) 222 (36.52) 349 (32.52) 518 TOTAL 66,827 (1.98) 68,176 (7.73) 73,889 18.89 62,148 9.15 56,936 (4.88) 59,854 Vertical Analysis (Rupees in Million) 2019 2018 2017 2016 2015 2014 Equity & Liabilities Rs.