| Karam Ceramics Limited |
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| Annual
Report 1998 |
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| Contents |
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| Company
Information |
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| Business
Items |
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| Notice
of Meeting |
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| Directors
Report |
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| Financial
Highlights |
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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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| Notes
to the Accounts |
|
| Pattern
of Shareholding |
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| Company
Information |
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| BOARD
OF DIRECTORS |
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|
| Shaban
Ali G. Kassim |
|
Chairman |
|
| Irshad
Ali S. Kassim |
|
Chief Executive |
|
| Munawar
Ali S. Kassim |
|
Vice Chairman |
|
| Mariam
Shaban All |
|
Director |
|
| Shaheen
A. Rehman |
|
| Sakin
Noorallah |
|
| Amirali
H. Ghangji |
|
| S.
Faiq Hussain |
|
PLHC Nominee |
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| COMPANY
SECRETARY |
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| Ismail Rajan |
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| AUDITORS |
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| Taseer
Hadi Khalid & Co. |
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| Chartered
Accountants |
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| Qavi & Co. |
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| Chartered
Accountants |
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| BANKERS |
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| Soneri
Bank Limited |
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| Emirates
Bank International |
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| Askari
Commercial Bank Limited |
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| Bank
of America |
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| CitiBank
N.A. |
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| REGISTERED
OFFICE |
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| BC-6,
Block-5, Scheme-5, Kehkashan, Clifton, Karachi. |
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| REGISTRAR
AND SHARE TRANSFER OFFICE: |
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| T.H.K.
Associates (Private) Limited |
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| Ground
Floor, Sheikh Sultan Trust Building No. 2, |
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| Beaumont
Road, Karachi. |
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| Business
Items |
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| 1.
SANITARYWARE |
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| *
Simpact - set |
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| W.
C. Cistern |
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| Wash Basin |
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| Pedestal |
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| Bidet |
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| *
Royal - set |
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| W.C. Cistern |
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| Wash Basin |
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| Pedestal |
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| *
Mayfair - set |
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| W.C. Cistern |
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| Wash Basin |
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| Pedestal |
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| Bidet |
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|
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| *
Venus - set |
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| W.C. Cistern |
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| Wash Basin |
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| Pedestal |
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|
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| *
Angelo - Set |
|
|
| .W.C.
Cistern |
|
|
| Wash Basin |
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| Pedestal |
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|
|
|
|
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| *
Orissa Asian W.C. |
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| Sanitare
Asian W.C. |
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| Orient W.C. |
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| *
Kitchen Sink |
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| * Urinal |
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| *
Accessories |
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| Soap/Paper/Tooth
Brush Holder |
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| Mirror Plate |
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| Towel Rails |
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| Hooks |
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| *
Ceramic Traps |
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| S. Trap |
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| P. Trap |
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| 2.
Ceramic Glazed Tiles |
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| *
Coloured & Decorative/Effects |
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| Glazed
Wall Tiles |
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| 15cm x 15cm |
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| 20cm x 30cm |
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| 30cm x 30cm |
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| Notice
of the Meeting |
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| NOTICE
is hereby given that the 19th Annual General Meeting of the Company will be
held at |
|
| the
registered office of the company on Monday 28th December 1998, at 10:30 am to
transact |
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| the
following business. |
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|
| 1.
To confirm the minutes of the i 8th Annual General Meeting held on December
20, 1997. |
|
|
| 2.
To consider and adopt the audited accounts of the company for the year ended
June 30, |
|
| 1998
alongwith the Report of the Directors thereon. |
|
|
| 3.
To declare a dividend. The Directors have recommended a cash dividend of 15%
per |
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| share. |
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| 4.
To appoint Auditors for the year 1999 and fix their remuneration. |
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| SPECIAL
BUSINESS |
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| 5.
(A) To fixed the remuneration of the Chief Executive and two full time
working Direc- |
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| tors
of the company. |
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| (B)
The statement u/s 160 of the Companies Ordinance 1984, pertaining to special |
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| business
is being sent to the shareholders with a copy of the notice. |
|
|
| 6.
To transact any other business with the permission of the Chairman. |
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|
By Order of the Board |
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|
ISMAlL RAJAN |
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| KARACHI:
DECEMBER 9, 1998 |
|
Company Secretary |
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| NOTES: |
|
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| 1.
The share transfer Book of the Company will remain closed from December 21,
1998 to |
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| December
28, 1998 (both days inclusive). |
|
|
| 2.
A member eligible to attend and vote at the meeting may appoint another
member on |
|
| his/her
proxy to attend and vote on his/her behalf. Proxies to be effective must be |
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| received
by the company not less than 48 hours before the time of holding of the
meeting |
|
|
| 3.
Members are requested to communicate to the Company or the Registrar to the
Com- |
|
| pany
of any change in their address: |
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|
| Director's
Report |
|
|
| The
Directors of your company have pleasure in submitting the report alongwith
audited accounts |
|
| for
the year ended 30th June, 1998. |
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|
| OPERATING
PERFORMANCE |
|
| During
the year under review the company net sales registered an increase of 17.80%
in compari- |
|
| son
to immediate preceding year on account of aggressive marketing. Your
management being |
|
| aware
that increase in revenue by itself could not be sufficient introduced skills
of economy in |
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| production,
and improved the viability of operations. As a result before tax improve by |
|
| 19.57%
in comparison to previous year. |
|
|
| FINANCIAL
RESULTS |
|
| Profit
after taxes for the year under review amounted to Rs. 12.988 million as
against |
|
| Rs.
6.187 million for the previous year. |
|
|
| Details
of the appropriation recommended by the Directors are as under: |
|
|
|
Rupees |
|
|
| Profit
after taxation |
|
12,988,324 |
|
| Unappropriated
profit brought forward |
|
30,251,749 |
|
|
|
---------- |
|
| Profit
available for appropriation |
|
43,240,073 |
|
|
|
|
| APPROPRIATION |
|
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|
| Cash
Dividend 15% (1997-nil) |
|
|
|
| on
10,911,780 share of Rs. 10/- each |
|
16,367,670 |
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|
---------- |
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|
26,872,403 |
|
|
========== |
|
|
| EARNING
PER SHARE |
|
| The
earning per share after tax amounted to Rs. 1.19 (1997 Rs. 0.57) |
|
|
| BOARD
OF DIRECTORS |
|
| The
present monthly remuneration of the Chief Executive and two working directors
are as |
|
| under: |
|
|
| *
Chief Executive |
Rs. 50,000/- |
Per month |
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| * Director |
|
Rs. 40,000/- |
Per month |
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| * Director |
|
Rs. 40,000/- |
Per month |
|
|
|
| In
addition to the above they are also provided company maintained car. |
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|
| FUTURE
PROSPECTS |
|
| Due
to uncertain economic condition, the pressure on profitability of the
Industry will be severe, |
|
| however
introduction of import trade price on imported tiles, and the government
policy to provide |
|
| housing
to low income people will benefit the company. Further the Management will
also take |
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| appropriate
and timely measures to ensure better results. The Company & liquidity
position has |
|
| also
been adversely affected due to levy of 30% cash margin on letter of credit
for import of raw |
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| material. |
|
|
| EMPLOYEES
RELATION |
|
| The
Management would like to place on record the positive attitude of the Labour
Union during |
|
| the
year under review and we look forward to resolving all issues mutually and
with the active |
|
| cooperation
of the Labour Union. |
|
|
| AUDITORS |
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| Our
present auditors M/s. Taseer Hadi Khalid & Co. Chartered Accountants and
M/s. Zavi |
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| &
Co. Chartered Accountants retire and offer themselves for reappointment. |
|
|
| APPRECIATION |
|
| The
Director take this opportunity to thank the suppliers M/s. R.W. Watts
Limited, |
|
| Fritta
S.L., Cerdec AG, shareholders, staff/employees etc., for their co-operation
and contri- |
|
| bution
towards the progress of the company. We would also like to thank the
financial institution |
|
| and
Banks namely Askari Leasing Co. Ltd. and Soneri Bank Limited, for the
confidence |
|
| reposed
on the company. |
|
|
|
IRSHAD ALI KASSIM |
|
|
Chief Executive |
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|
| Financial
Highlights |
|
|
|
|
12 Months |
12 Months |
|
|
|
June 30, |
June, 1997 |
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|
1998 |
|
|
| Net Sales |
|
Rs. in Million |
312.000 |
265.000 |
|
| Profit/(Loss)
before Tax |
|
Rs. in Million |
16.052 |
14.009 |
|
| Income Tax |
|
Rs. in Million |
3.064 |
7.810 |
|
| Profit/(Loss)
after Tax |
|
Rs. in Million |
12.988 |
6.187 |
|
| Earnings
per Share |
|
Rs./ Share |
1.19 |
0.57 |
|
| Cash
dividend per Share |
|
Rs./ Share |
1.50 |
Nil |
|
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|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Karam Ceramics Limited as at 30
June 1998 |
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| and
the related profit and loss account and cash flow statement, 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 account- |
|
| ing
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 cash flow
statement, |
|
| together
with the notes forming part thereof, give the information required by the
Com- |
|
| panies
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 1998 and of the profit
and the |
|
| cash
flows for the year then ended; and |
|
|
| (d)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, |
|
| 1980
by the Company. |
|
|
|
| Karachi |
|
QAVI & CO. |
|
TASEER HADI KHALID & CO. |
|
| December 4, 1998 |
|
CHARTERED ACCOUNTANTS |
|
CHARTERED ACCOUNTANTS |
|
|
|
|
|
| Balance
Sheet |
|
|
|
| As
at 30 June, 1998 |
|
|
|
|
|
|
|
Note |
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised |
|
|
|
|
| 15,000,000
ordinary shares of Rs. 10 each |
|
150,000,000 |
150,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
3 |
109,117,800 |
109,117,800 |
|
| Unappropriated
profit |
|
|
26,872,403 |
30,251,749 |
|
|
|
|
---------- |
---------- |
|
|
|
|
135,990,203 |
139,369.55 |
|
| LONG
TERM AND DEFERRED LIABILITIES |
|
4 |
83,062,745 |
103,457,447 |
|
| DEFERRED
INCOME |
|
5 |
4,876,497 |
6,458,064 |
|
| DEFERRED
TAXATION |
|
|
1,500,000 |
- |
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term finance under mark-up |
|
|
|
| arrangements
- Secured |
|
6 |
17,500,000 |
10,000,000 |
|
| Short
term running finance |
|
7 |
7,663,774 |
10,935,729 |
|
| Current/overdue
portion of redeemable |
|
| capital,
long-term and deferred liabilities |
8 |
51,767,589 |
45,488,622 |
|
| Bills
Payable |
|
|
45,656,093 |
15,507,485 |
|
| Creditors,
accrued expenses and |
|
|
| other
liabilities |
|
9 |
52,650,396 |
53,777,060 |
|
|
|
|
| Provision
for taxation |
|
5,611,440 |
11,500,000 |
|
| Unclaimed
dividend |
|
77,501 |
3,670,485 |
|
| Proposed
dividend |
|
16,367,690 |
- |
|
|
|
---------- |
---------- |
|
|
|
197,294,463 |
150,879,381 |
|
| COMMITMENTS
& CONTINGENCIES |
|
10 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
422,723,908 |
400,164,441 |
|
|
|
|
========== |
========== |
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
assets - at cost |
|
|
| less
accumulated depreciation |
|
11 |
265,155,700 |
247,817,394 |
|
|
|
|
|
| Capital
work in progress |
|
12 |
2,709,993 |
- |
|
|
|
|
|
| LONG
TERM DEPOSITS AND |
|
|
|
| PREPAYMENTS |
|
13 |
7,680,614 |
7,860,614 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
14 |
868,000 |
134,862 |
|
| Stock
in trade |
|
15 |
70,259,069 |
68,932,448 |
|
| Trade
debts - Unsecured considered good |
|
22,542,320 |
27,703,478 |
|
| Loans,
advances, deposits, |
|
|
| prepayments
and other receivables |
|
16 |
12,484,504 |
14,207,493 |
|
|
|
|
| Cash
and bank balances |
|
17 |
41,023,708 |
33,508,152 |
|
|
|
|
---------- |
---------- |
|
|
|
|
147,177,601 |
144,486,433 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
422,723,908 |
400,164,441 |
|
|
|
|
========== |
========== |
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
IRSHAD ALl S. KASSIM |
|
|
MUNAWAR ALl S. KASSIM |
|
|
|
Chief Executive |
|
|
Vice Chairman |
|
|
|
|
| Profit
and Loss Account |
|
| As
at 30 June, 1998 |
|
|
|
|
|
|
|
Note |
1998 |
1997 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| SALES - Net |
|
18 |
312,709,783 |
265,447,999 |
|
| COST
OF SALES |
|
19 |
255,147,136 |
218,958,815 |
|
|
|
|
---------- |
---------- |
|
| GROSS PROFIT |
|
|
57,562,647 |
46,489,184 |
|
| OTHER INCOME |
|
20 |
5,690,739 |
3,871,852 |
|
|
|
|
---------- |
---------- |
|
|
|
|
63,253,386 |
50,361,036 |
|
|
|
|
| ADMINISTRATIVE,
SELLING AND GENERAL |
|
21 |
29,644,656 |
22,811,835 |
|
| FINANCIAL
CHARGES |
|
22 |
16,712,017 |
12,803,302 |
|
| WORKERS'
PROFIT PARTICIPATION FUND |
|
|
844,840 |
737,305 |
|
|
|
|
---------- |
---------- |
|
|
|
47,201,513 |
36,352,442 |
|
|
|
---------- |
---------- |
|
| PROFIT
BEFORE TAXATION |
|
16,051,873 |
14,008,594 |
|
| PROVISION
FOR TAXATION |
|
|
|
| Current year |
|
1,563,549 |
10,700,000 |
|
| Prior years |
|
|
- |
(2,878,840) |
|
| Deferred |
|
1,500,000 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
3,063,549 |
7,821,160 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
AFTER TAXATION |
|
|
12,988,324 |
6,187,434 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
30,251,749 |
24,064,315 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
|
43,240,073 |
30,251,749 |
|
| Proposed
dividend 15% (1997 - Nil) |
|
|
16,367,670 |
- |
|
|
|
|
---------- |
---------- |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
|
26,872,403 |
30,251,749 |
|
|
|
|
========== |
========== |
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
IRSHAD ALl S. KASSIM |
|
MUNAWAR ALl S. KASSIM |
|
|
Chief Executive |
|
Vice Chairman |
|
|
|
| Cash
Flow Statement |
|
| For
the year ended 30 June, 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Profit
before taxation |
|
|
|
16,051,873 |
14,008,594 |
|
| Adjustments
for: |
|
|
|
|
|
| Depreciation |
|
|
|
29,335,647 |
29,079,436 |
|
| Provision
for staff gratuity |
|
|
3,536,052 |
2,233,022 |
|
| Charge
for Workers' Profit Participation Fund |
|
844,840 |
737,305 |
|
| Interest
and markup expense |
|
|
16,507,483 |
12,443,392 |
|
| Profit
on sale of fixed assets |
|
|
(157,511) |
(61,702) |
|
| Return
on deposits |
|
|
|
(2,341,545) |
(1,114,541) |
|
| Gain
on sale and lease back of fixed asset |
|
(1,581,567) |
(1,449,770) |
|
| Movement
in long term prepayments |
|
|
540,000 |
360,000 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
46,683,399 |
42,227,142 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
62,735,272 |
56,235,736 |
|
|
|
|
| (Increase)/Decrease
in operating assets |
|
|
| Stores
and spares |
|
|
|
(733,138) |
939,679 |
|
| Stock
in trade |
|
|
|
(1,326,621) |
(20,354,221) |
|
| Trade
debtors |
|
|
|
5,161,158 |
(9,172,958) |
|
| Loans,
advances, deposits, prepayments and other |
|
|
|
| receivables |
|
|
|
(1,123,841) |
(1,608,836) |
|
|
|
|
|
|
|
| Increase/(Decrease)
in operating liabilities |
|
|
|
| Short
term finance under mark-up arrangements |
|
7,500,000 |
(12,500,000) |
|
| Short
term running finance |
|
|
(3,271,955) |
10,935,729 |
|
| Creditors,
accrued expenses, other liabilities |
|
|
|
| and
bills payable |
|
|
|
28,914,409 |
9,226,958 |
|
|
|
|
|
---------- |
---------- |
|
| Cash
generated from operation |
|
|
97,855,284 |
33,702,087 |
|
|
|
|
| Interest
and mark paid |
|
(16,467,284) |
(12,380,239) |
|
| Income
tax paid |
|
(5,339,638) |
(9,016,013) |
|
| Gratuity
paid |
|
(816,469) |
(909,574) |
|
| WPPF paid |
|
|
(777,504) |
(1,116,190) |
|
|
|
---------- |
---------- |
|
| Net
cash flows from operating activities |
|
74,454,389 |
10,280,071 |
|
|
|
========== |
========== |
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Net
cash flows from operating activities |
|
74,454,389 |
10,280,071 |
|
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
|
| Capital
expenditure incurred |
|
|
(54,916,598) |
(15,510,903) |
|
| Return
on investment |
|
|
|
3,075,904 |
642,337 |
|
| Sale
Proceeds of fixed assets disposed during the year |
420,000 |
71,000 |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash flows from investing activities |
|
(51,420,694) |
(14,797,566) |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
| Long
term and deferred liabilities |
|
|
- |
48,320,042 |
|
| Prepayment
of redeemable capital, debentures, |
|
|
|
| long
term and Deferred liabilities |
|
|
(14,339,133) |
(15,328,056) |
|
| Long
term deposits and prepayments |
|
|
(360,000) |
(6,645,614) |
|
| Dividend
paid |
|
|
|
(3,592,984) |
(18,234,020) |
|
| Suppliers
credit |
|
|
|
2,773,978 |
1,447,180 |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash flows from financing activities |
|
(15,518,139) |
9,559,532 |
|
|
|
|
|
---------- |
---------- |
|
| Net
Increase/(Decrease) in cash and bank balances |
7,515,556 |
5,042,037 |
|
| Cash
and bank balances at beginning of the year |
|
33,508,152 |
28,466,115 |
|
|
|
|
|
---------- |
---------- |
|
| Cash
and bank balances at end of the year |
|
