| PIONEER CABLES LTD |
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| Annual
Reports 2002 |
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| CONTENTS |
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| Company
Profile |
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| Notice
of Meeting |
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| Chairman's Review |
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| Directors'
Report |
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| 10
Years at a Glance |
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| Statement of
Compliance & Auditors' Review |
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| Auditors'
Report |
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| Balance
Sheet |
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| Profit and Loss Account |
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| Cash Flow Statement |
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| Statement of Changes in Equity |
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| Notes to the Accounts |
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| Pattern of Shareholdings |
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| VISION
STATEMENT |
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| To be an
internationally recognised and preferred |
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| supplier
of Wires, Cables and Conductors. |
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| MISSION
STATEMENT |
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| PIONEER'S
mission is to produce and supply quality |
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| Wires,
Cables and Conductors and to remain oriented |
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| towards
total satisfaction of its customers in a cost |
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| effective
manner so as to maintain its position as a |
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| preferred
supplier of its quality products with a focused |
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| strategy
towards timely delivery and best service to |
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| its
valued customers, |
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| COMPANY
PROFILE |
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| Board of Directors |
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| Mr. Zakaria A. Bawany |
(Chairman) |
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| Mr. Rashid Zakaria Bawany |
(Chief Executive) |
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| Mrs.
Mobina A. Dada |
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| Mr. Zahid Zaheer |
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| Mr.
Vali Muhammad A. Rehman |
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| Mr. Muhammad Ayub |
(Nominee of N.l.T.) |
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| Sayed
MuzafarAli Shah |
(Nominee of N.l.T.) |
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| Audit Committee |
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| Mr. Zakaria A. Bawany
(Chairman) |
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| Mrs. Mobina A. Dada |
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| Mr. Vali Muhammad A. Rehman |
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| Sayed
Muzafar Ali Shah |
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| Company Secretary |
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| Mr.AsifA.Sattar |
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| Legal Adviser |
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| Mr. Rao M. Shakir Naqshbandi |
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| Advocate |
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| Bankers |
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| Bank
AI-Habib Ltd. |
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| Muslim
Commercial Bank Ltd. |
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| BankAI-Falah Ltd. |
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| Albaraka
Islamic Bank B.S.C. (E.G.) |
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| Auditors |
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| Khalid Majid Rahman
Sarfaraz Rahim Iqbal Rafiq |
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| Chartered
Accountants |
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| Registered Office |
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| 27/3/1, Mauza Bairut, |
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| Main RCD Highway, Hub Chowki, |
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| Distt: Lasbela, Balochistan. |
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| Phones: 0202 - 32360, 0202 -
33679 |
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| Fax: 0202 - 32369 |
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| Head
/ Sales Office |
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| 1001-Uni Towers, |
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| I.I.Chundrigar
Road, P.O.Box 6643, |
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| Karachi
- 74000, Pakistan. |
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| Phones:2416511-14,
2410553, 2413528 |
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| Fax:
(92-21) 2415815, (92-21) 2411804 |
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| E-Mail:
pioneer@bawany.com |
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| WEBSITE:
http://www.bawany.com |
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| Lahore Office |
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| 24/25 Associated
Chambers, Patiala Ground, |
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| Link Mcleod Road, Lahore. |
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| Phones: (042) 7235741 - 43 |
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| Fax: (042)7235712 |
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| Islamabad Office |
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| Abbas
Centre, Room No.12, |
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| 3rd
Floor, 87 West Blue Area, Islamabad. |
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| Tel/Fax:
(92-51) 2822915 |
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| Mobile:
0303-7775553, 0303-7356342 |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the 22"° Annual General Meeting of the Shareholders
of Pioneer Cables |
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| Limited
will be held on Thursday the 24th October, 2002 at 4.30 p.m. at the Liaison
Office of the |
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| Company
at Uni Towers, 10th Floor, Room No. 1001, I.I.Chundrigar Road, Karachi to
transact the |
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| following
business: |
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| 1.
To confirm the minutes of 21st Annual General Meeting held on Thursday the
20th December, |
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| 2001 |
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| |
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| 2.
To receive, consider and adopt the Statement of Accounts for the year ended
June 30, 2002 |
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| together
with the Reports of the Directors and Auditors thereon. |
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| 3.
To appoint Auditors for the ensuing year and to fix their remuneration.
Messrs. Khalid Majid |
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| Rahman
Sarfaraz Rahim Iqbal Rafiq, Chartered Accountants, retire and being eligible,
have |
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| offered
themselves for re-appointment. |
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| |
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| 4.
To transact any other business which may legally be transacted at an Annual
General Meeting |
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| with
the permission of the chair. |
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| By
Order of the Board |
|
ASIF A. SATTAR |
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| Karachi: September 19, 2002 |
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Company Secretary |
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| Notes: |
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| 1.
The Share Transfer Books of the Company will be closed from 24th October,
2002 to 31st |
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| October,
2002 (both days inclusive). Transfers received in order at the Shares
Department of |
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| the
Company at Uni Towers, 10th Floor, Room No. 1001, I.I.Chundrigar Road,
Karachi by close |
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| of
business on 23rd October, 2002 will be treated in time. |
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| 2.
A member entitled to attend and vote at the General Meeting is entitled to
appoint another |
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| member
as his/her proxy to attend and vote on his/her behalf. |
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| 3.
The instrument appointing a proxy, together with the power of attorney under
which it is signed |
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| or
a notarially certified copy thereof, should be deposited at the Liaison
Office / Shares |
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| Department
of the Company not less than 48 hours before the time of holding of the
meeting. |
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| 4.
The members are requested to advise the change in address, if any. |
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| CHAIRMAN'S
REVIEW |
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| Dear Shareholders |
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| On
behalf of the Board, it gives me great pleasure to welcome you to the 22nd
Annual General |
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| Meeting
of the Company and to present Annual Report for the year ended June 30, 2002. |
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| Company's
Performance: |
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| The
industrial recession continued during the year. The cable industry as a whole
is passing |
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| through
difficult times due to numerous reasons. The two major clients of cable
industry namely |
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| KESC
and WAPDA are facing paucity of funds and the persistent sluggish activity in
construction |
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| resulted
in stiff competition and consequently, your Company could not fetch better
prices of the |
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| products. |
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| The
results of your Company are highly unsatisfactory though sales of your
Company registered |
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| an
increase of 10%. The gross profit has declined to 1.53% as against 5.86% of
last year. |
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| Administration
expenses, selling expenses and financial charges have been contained. The
Board |
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| of
Directors has decided to make a provision for doubtful debts of Rs.7.15
million which have been |
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| outstanding
since considerably long period. This year your Company has registered a
pre-tax loss |
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| of
Rs.17.7 million as against profit of Rs.0.23 million of last year. Despite
these huge losses your |
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| Company
has to pay minimum turnover tax and as a result your Company ended at a post
tax |
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| loss
of Rs.19.81 million as against loss of Rs.1.58 million of last year. |
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| Dividends: |
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| Due
to the accumulate losses, the Board of Directors has decided not to recommend
any dividend |
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| this year. |
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| Board
of Directors: |
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| Mr.
Imran Hussain, the nominee of NIT resigned and Sayed Muzafar Ali Shah the
second nominee |
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| of
NIT has been co-opted in his place. |
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| The
Board wishes to place on record its appreciation for the valuable services
rendered by the |
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| outgoing
director and welcome the new director on the Board. |
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| Future Prospects: |
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| In
my review of last year, I had mentioned that the cable industry is the only
capital goods |
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| engineering
industry, which is paying both sales tax and excise duty. There was
expectation that |
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| the
Government will withdraw the excise duty on cable industry in the recent
budget, but unfortunately |
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| this
did not happen. |
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| The
future of the cable industry remain uncertain. Your Company is facing losses
since 1997 and |
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| has
been continuously supported financially for its operations by an extended
credit facility to the |
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| tune
of Rs. 100 million from an associated undertaking and also by an interest
free loan of more |
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| than
Rs. 60 million from another associated company. |
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| Owing
to the insurmountable difficulties being faced by the Company, the management
has sent |
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| a
letter to the Karachi Stock Exchange expressing its desire for the delisting.
Shareholders consent |
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| will
be obtained before final decision in the matter. |
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| Corporate
Governance: |
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| The
Securities & Exchange Commission has spearheaded the Code of Corporate
Governance |
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| to
enhance transparency, visibility and credibility in the corporate sector. The
code is being enforced |
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| through
listing regulations of Karachi Stock Exchange (Guarantee) Limited.
Accordingly, the |
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| Company
has taken necessary steps to implement and follow these rules in its true
essence. |
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| In
compliance with the listing regulations of the Stock Exchange (Code of
Corporate Governance), |
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| the
Board of Directors hereby declares that: |
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| The
financial statements for the year ended June 30, 2002, present fairly its
state of affairs, |
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| the
result of its operations, cash flow and changes in equity. |
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| Proper
books of accounts have been maintained. |
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| Appropriate
accounting policies have been consistently applied in preparation of
financial |
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| statements
for the year ended June 30, 2002 and accounting estimates are based on |
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| reasonable
and prudent judgement. |
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| International
Accounting Standards (IAS), as applicable in Pakistan, have been
followed |
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| in
preparation of financial statements and any departure there from has been
adequately |
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| disclosed. |
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| The
system of internal control is sound and has been effectively implemented and
monitored. |
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| The
process of review will continue, and any weaknesses in controls will be
removed. |
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| There
are no doubts upon the Company's ability to continue as a going concern.
However, |
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| in
view of the cumulative losses having exceeded the subscribed capital of the
Company |
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| and
diluted the reserves, the Company is facing some predicaments, which have
been |
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| narrated
in this report. |
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| There
has been no material departure from the best practices of corporate
governance |
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| as
detailed in the listing regulations. |
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| |
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| The
share holdings of the sponsor directors have been shown on a cumulative
basis |
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| instead
of individual basis. |
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| Key
operating and financial data for last ten years in summarized form is
annexed. |
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| Outstanding
taxes and levies: |
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| |
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| There
are not outstanding taxes and levies other than those disclosed in note no.
20. |
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| The
value of Provident Fund investments based on unaudited accounts is Rs.
11,331,9457- |
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| (2001:audited
Rs.9,421,537/-) |
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| During
the year three (3) meetings of the Board of Directors were held. Attendance
by |
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| each
Director is as follows:- |
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| Name of Directors |
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No. of meetings |
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| |
Attended |
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| Mr.
Zakaria A. Bawany (Chairman) |
|
1 |
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| Mr.
Rashid Zakaria Bawany (Chief Executive) |
3 |
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| Mrs.
Mobina A. Dada |
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3 |
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| Mr. Zahid Zaheer |
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3 |
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| Mr.
Vali Muhammad A. Rehman |
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3 |
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| Mr.
Imran Hussain (Nominee ofN.l.T.) |
1 |
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| Mr. Muhammad
Ayub (Nominee of N.l.T.) |
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- |
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| Karachi:
September 19, 2002 |
|
ZAKARIA A. BAWANY |
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|
Chairman |
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| DIRECTORS'
REPORT |
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| Your
Directors present 22nd Annual Report and 19th since the Company was listed on
Stock |
|
| Exchange
of Pakistan, alongwith audited acounts for the year ended June 30, 2002 and
the |
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| Auditors
Report thereon: |
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| |
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| The
operating results of your Company are summarised below: |
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| |
| |
June 30 2002 |
June 30 2001 |
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| |
Rupees |
Rupees |
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| |
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| Profit / ( loss ) Before
Taxation |
|
10,539,146 |
227,497 |
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| Provision
for doubtful debts |
|
7,148,373 |
- |
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| |
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| Taxation |
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| Current |
|
1,989,514 |
1,812,269 |
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| Prior |
|
129,974 |
- |
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| |
211,488 |
1,812,269 |
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| |
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| Loss
After Taxation |
|
19,807,007 |
1,584,772 |
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| Balance
brought forward from last year |
|
33,035,792 |
31,451,020 |
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| |
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| Unappropriated
balance carried forward |
|
52,842,799 |
33,035,792 |
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| |
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| The
present Auditors Khalid Majid Rahman Sarfaraz Rahim Iqbal Rafiq, Chartered
Accountants |
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| retire
and offer themselves for re-appointment. |
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| |
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| The
Chairman's Review covering the significant activities of the Company is
provided with this |
|
| Annual Report. |
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| |
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| The
pattern of shareholdings is annexed. |
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| On
behalf of the Board |
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| |
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| Karachi:
September 19, 2002 |
|
RASHID ZAKARIA BAWANY |
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|
Chief Executive |
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| 10
YEARS AT A GLANCE |
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| |
|
2001-2002 |
2000-2001 |
1999-2000 |
1998-99 |
1997-98 |
1996-97 |
1995.96* |
1994 |
1993 |
1992 |
| |
| Sales |
|
394,735 |
359,071 |
306,027 |
238,952 |
189,532 |
330,166 |
772,297 |
358,729 |
300,157 |
247,878 |
| Profit/floss)
after tax |
19,807 |
1,585 |
1,602 |
1,290 |
18,497 |
12,332 |
15,269 |
10,709 |
6,026 |
2,737 |
| Tangible
fixed assets |
55,614 |
61,040 |
67,792 |
71,246 |
75,880 |
81,917 |
65,962 |
63,891 |
65,750 |
69,861 |
| Long
term Investments / Deposits |
485 |
470 |
444 |
444 |
11,324 |
11,324 |
11,314 |
11,304 |
11,233 |
11,219 |
| Working capital |
|
9,530 |
23,931 |
20,413 |
15,358 |
2,925 |
17,199 |
47,132 |
42,824 |
35,886 |
35,791 |
| Net
assets employed |
65,629 |
85,441 |
88,649 |
87,048 |
90,129 |
110,440 |
124,408 |
118,019 |
112,869 |
116,871 |
| Issued capital |
|
35,475 |
35,475 |
35,475 |
35,475 |
35,475 |
35,475 |
35,475 |
33,000 |
33,000 |
33,000 |
| Reserve
and retained |
|
| earnings |
|
21,382 |
41,189 |
44,370 |
42,768 |
45,832 |
64,329 |
76,661 |
71,849 |
64,440 |
64,189 |
| Shareholders'
equity |
56,857 |
76,664 |
79,845 |
78,243 |
81,307 |
99,804 |
112,136 |
104,849 |
97,440 |
97,189 |
| Long term loans |
|
- |
- |
- |
- |
- |
1,768 |
3,310 |
8,174 |
10,910 |
15,102 |
| Deferred liabilities |
|
8,772 |
8,777 |
8,804 |
8,805 |
8,822 |
8,868 |
8,962 |
4,996 |
4,519 |
4,580 |
| Capital employed |
|
65,629 |
85,441 |
88,649 |
87,048 |
90,129 |
110,440 |
124,408 |
118,019 |
112,869 |
116,871 |
| |
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| Financial ratios: |
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| |
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| Current assets: |
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|
| Current liabilities |
|
1.04:1 |
1.11:1 |
1.10:1 |
1.09:1 |
1.02:1 |
1.07:1 |
1.19:1 |
1.37:1 |
1.37:1 |
1.49:1 |
| Turnover:
Total asets |
1.41:1 |
1.15:1 |
1.05:1 |
0.96:1 |
0.75:1 |
0.96:1 |
2.08:1 |
1.53:1 |
1.42:1 |
1.31:1 |
| Long
term loans; Equity |
N.A |
N.A |
N.A |
N.A |
N.A |
0.02:1 |
0.03:1 |
0.08:1 |
0.11:1 |
0.16:1 |
| Earning/Share
after tax |
-5.58 |
-0.45 |
0.45 |
-0.36 |
-5.21 |
-3.48 |
4.3 |
3.25 |
1.83 |
0.83 |
| Net
earning / Rupee of sales |
N.A |
N.A |
0.01 |
N.A |
N.A |
N.A |
0.02 |
0.03 |
0.02 |
0.01 |
| Break
up value/share I |
16.03 |
21.61 |
22.51 |
22.06 |
22.9 |
28.13 |
31.61 |
31.77 |
29.53 |
29.45 |
| Net
return on equity |
N.A |
N.A |
2.01 |
N.A |
N.A |
N.A |
13.62 |
10.21 |
6.18 |
2.82 |
| Net
return on capital employed |
N.A |
N.A |
1.81 |
N.A |
N.A |
N.A |
12.27 |
9.07 |
5.34 |
2.34 |
| Net
return on total assets |
N.A |
N.A |
0.55 |
N.A |
N.A |
N.A |
4.11 |
4.56 |
2.86 |
1.44 |
| Cash dividend |
|
- |
- |
- |
5 |
- |
- |
22.5 |
10 |
17.5 |
- |
| Bonus issue |
|
- |
- |
- |
- |
- |
- |
- |
7.5 |
- |
- |
| |
|
|
| *
Figures are for eighteen months ended june 30 1996 |
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| |
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| Statement
of Compliance with Best Practices of Corporate Governance |
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| |
|
| The
Company is in process of implementing all facets of the Code of Corporate
Governance issued |
|
| by
the Karachi Stock Exchange and Lahore Stock Exchange and the Board feels
pleasure in |
|
| stating
that provisions of the code, relevant for the year ended June 30, 2002, have
been duly |
|
| complied with. |
|
| |
|
| Review
Report to the Members on Statement of Compliance with best |
|
| practices
of Code of Corporate Governance |
|
