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FRONTIER CERAMICS LIMITED
Annual Reports 2003
COMPANY INFORMATION
NOTIC OF MEETING
DIRECTOR'S REPORT.
REVIEW REPORT TO THE MEMBERS ON STATEMENT OF
COMPLIANCE WITH BEST PRACTICES OF CODE OF
CORPORATE GOVERNANCE
AUDITOR'S REPORT.
BALANCE SHEET
PROFIT & LOSS ACCOUNT
CASH FLOW STATEMENT
STATEMENT OF CHANGES IN EQUITY
NOTES TO THE ACCOUNTS
PATTERN OF SHAREHOLDING
COMPANY INFORMATION
BOARD OF DIRECTORS
Mr. S.U. Durrani                                 Chairman
Maj. Gen. (R) Jehanzeb Khan
Mr. Shamsul Hassan                            Chief Executive
Mr. M. Fayyaz Khan
Mr. Rab Nawaz
Mr. Muhammad Iqbal
Mr. Hukam Khan Badshah
Company Secretary & Chief Financial Officer
Mr. Rab Nawaz
BANKERS
National Bank of Pakistan
United Bank Limited
The Bank of Khyber
Bank AI-Habib
AUDITORS
Messrs Muqtadir Mushtaq & Co. Chartered Accountants.
LEGAL ADVISOR
Col. (Rtd) Nazirullah Qazi Advocate
REGISTRAR AND SHARE TRANSFER OFFICE
Saeed Methani Mushtaq & Co. Chartered Accountants, Suite # 23C,Block B,
2nd Floor, Cantonment Plaza, Fakhr-e-Alam Road, Peshawar Carrtt.
HEAD OFFICE / REGISTERED OFFICE
29, Industrial Estate, Jamrud Road, Peshawar, N.W.F.P.
Tel: 92-91 -812360, 812746 Fax: 92-91 -812757
ZONAL OFFICES
PESHAWAR 29-lndustrial Estate, Jamrud Road, Peshawar
Tel: 92-9 1-8 12360, 812746
RAWALPINDI 82-A, Satellite Town Rawalpindi.
Tel: 92-5 ! -44 1 0998 Fax: 92-5 1 -4425523
KARACHI 1* Floor, Kashif Centre,
Shahra-e-Faisal, Karachi.
Tel: 92-2 1-5673006
NOTICE OF THE ANNUAL GENERAL MEETING
Notice is hereby given that the Twenty First Annual General Meeting of Frontier Ceramics Limited will be
held at its registered office, 29-lndustrial Estate, Jamrud Road, Peshawar on Thursday .October 30, 2003, at
09:00 a.m. to transact the following business:
1.          To confirm  minutes  of the Twentieth Annual  General  Meeting of the  Company held  on
Octobers 1,2002.
2.          To receive, consider and approve the Audited Accounts together with the Directors' and Auditors'
Reports for the year endedjune 30,2003.
3.          To  appoint     Auditors   of the  Company for the year  ending     2003-200-4  and  fix their
remuneration. The present auditors Messrs Muqtadir Mushtaq & Co. Chartered Accountants are
retiring.
The Company has received notices from Shareholders under Section 253 of the Companies
Ordinance 1984, proposing the name of Messre Saeed Methani Mushtaq & Co., Chartered
Accountants,23-C,Block-B, 2nd Floor, Cantonment Plaza, Fakhr-e-Alam Road, Peshawar, for the
appointment as auditors of Frontier Ceramics Ltd for the year 2003-2004, which has
recommended by the Audit Committee in its meeting held on September 18,2003.
4.          To transact any other business with the permission of the Chair.
BY ORDER OF THE BOARD
September 30, 2003                                                                                     (Company Secretary)
NOTES:
1.          The Register of Members of the Company will remain closed from October 21,2003 to
October 31,2003 (both days inclusive).
2.         A member entitled to attend and vote at the General Meeting is entitled to appoint a
proxy to attend and vote on his/her behalf.    Proxy Forms must reach the Company's
Registered Office, at-least48 hours before the meeting.
3.         Shareholders who have deposited their shares into Central Depository Company of
Pakistan Limited, must bring their original National Identity Card (NIC) at the time of
attending the meeting.
4.         In case of Corporate entity, the Board of Directors' resolution/power of attorney with
specimen signature of the nominee shall be produced (unless it has been provided earlier) at
the time of the meeting.
5.         Members are requested to notify the Company or Registrar of the Company, Messrs
Saeed Methani Mushtaq & Co., Chartered Accountants, Suite No. 23-C, 2nd Floor,
Block-B,  Cantonment Plaza,  Fakhr-e-Alam  Road  Peshawar, for any change in their
mailing address.
DIRECTORS' REPORT
The Board of Directors is pleased to present the 21st Annual Report alongwith the
Audited Accounts for the year ended June 30, 2003.
Gross sales of the Company for the year under review, was Rs. 144.330 million.
The desired results could not be achieved due to interruption of gas supply to the
project in the months of December 2002, January, February and April 2003, which
seriously upset the production in these months. The capacity of the newly installed
Roller Kiln could not be utilized due to Gas supply problems. Additionally, revenue
from sales of Tiles was also reduce due to intense competition in the market and
dumping of under-invoiced imported tiles, which are available in the market at
exceptionally low rates. This has seriously affected your Company's ability to achieve
the desired production/sales targets.  These conditions forced the Company
to sell its products on a heavy discount and incentives given to distributors for
promoting the Company's sales.
FINANCIAL SUMMARY (Rs. In Million)
Sales 114.007
Gross Profit 26.57
Less: Admin and Selling Expenses 28.265
Operating Profit/(Loss) (1.694)
Add: Other Income 1.809
0.115
Less: Financial Expenses (6.440)
Provision for Taxation (0.982)
Loss after Taxation (7.308)
Prior year Adjustment 0.097
Accumulated Profit/(Loss) brought forward (71.689)
Adjustment of incremental
Depreciation out of Revaluation of Fixed Assets 79.253
Profit/(Loss) carried over to Balance Sheet 0.354
DIVIDEND
In view of the current financial position of your Company, the Directors are not
recommending a Dividend for the year under review.
FUTURE OUTLOOK
Under the prevailing market conditions, we foresee a tremendous pressure on the
selling prices of products viz-a-viz our profitability. To overcome this problem
efforts are being made to reduce the cost of production and improve the efficiency
of the plant, which has become inevitable due to continuous increases in the
energy and other input costs of production.
The steps announced by the Government of Pakistan to encourage investments in
the Housing Sector and new demands from Afghanistan should auger well for
your Company's sales efforts.
The Company will explore new avenues for enhancing the sales volume and to
make it a profitable venture in spite of immense pressure for reduction in Custom
Tariff on imported tiles under the WTO Regime, which will encourage dumping
of imported tiles in the local market.
To meet the challanges of our times, the Company is planning to restart the
production of Sanitary-ware alongwith other activities in collaboration with
Foreign manufacturers. Further high value tiles will be produced on the Roller
Kiln, which is an energy saving equipment. Serious efforts are also being made to
induct energy saving machinery/equipment under BMR to enable the Company to
produce at competitive rates, by increasing efficiency levels and reducing our
energy costs.
CORPORATE GOVERNANCE
In compliance of the Code of Corporate Governance we give below a statement
in accordance with the Financial and Corporate Reporting framework:
a)      The financial statement, prepared by the management of the Company
present fairly its state of affairs, the results of operation, cash flow statement
and statement of changes in equity.
b)       Proper books of accounts have been maintained.
c)      Appropriate accounting policies have been consistently applied in preparation
of the financial statements and accounting estimates are based on reasonable
and prudent judgment.
d)       International Accounting Standards, as applicable in Pakistan, have been
followed in the preparation of financial statements and any departure
Therefrom has been adequately disclosed.
e)       The existing system of internal control and other procedures is being
continuously reviewed by the internal auditor. The process of review
will continue and any weakness in controls will have immediate attention
of the management.
f)      There is no significant doubt about the company's ability to continue as a
going concern.
g)      There has been no material departure from the best practice of corporate
governance, as detailed in the listing regulations.
h)      Key operating and financial data for the last six years in summarized form
is annexed.
AUDITORS
The present Auditors Messrs Muqtadir Mushtaq & Co. Chartered Accountants
retired and are not eligible for reappointment as per Circular No. 19 dated
27-12-2002 issued by the Securities & Exchange Commission of Pakistan.
In compliance of the Code of Corporate Governance, the Audit Committee
has on the request of the members, recommended the appointment of Messrs
Saeed Methani Mushtaq & Co., Chartered Accountants, 23-C, Block-B, 2nd
Floor, Cantonment Plaza, Fakhre Alam Road Peshawar, as Auditors of the
Company for the year 2003-04.
MEETING OF THE BOARD OF DIRECTORS
During the year five (5) meetings of the Board of Directors were held, which
were attended by the Directors as mentioned below:
Name of Directors No. Of Meetings attended
Mr. Shakirullah Durrani 4
Maj. Gen (R) Jehanzeb Khan 4
Mr. Muhammad Ayub 4
Mr. Shahid Mehboob 4
Mr. Shamsul Hassan 5
Mr. M. Fayyaz Khan 4
Mr. Azhar Amin 2
Mr. Rab Nawaz 2
PATTERN OF SHAREHOLDING
The Statement of Pattern of Shareholding as at June 30, 2003 is annexed with
the report.
ACKNOWLEDGMENT
We would like to appreciate the positive attitude and cooperation extended by
the employees of the Company during the year of difficulties. We also
acknowledge the dedication and hard work of the employees during this
period. We also express our thanks to our Bankers, Shareholders, Customers
and other stakeholders for their continued support.
On behalf of the Board of Directors.
(Shamsul Hassan)
Chief Executive.
KEY OPERTING AND FINACIAL DATA
FROM 1997-98 TO 2002-2003
1998 1999 2000 2001 2002 2003
PRODUCTION & SALES
TILES (SQ.M) Tiles (SQ.M) 512,652 470,909 533,308 478,129 504,774
S/WARE (TONS) S/WARE (TONS) 1,209 949 503 236 _
SALES (RUPEES) SALES (RUPEES) 229,645,457 1 85,3 1 0,26 1 222,823,397 148,348,157 144,330,728
OPERATING RESULTS
NET SALES 151,349,789 157,242,701 163,600,945 150,137,255 116,514,208 114,006,559
GROSS PROFIT 23,464,102 33.347,115 30,330,190 44,499,61 1 21,948,594 26,570,037
PRE-TAX PROFIT (LOSS) -17,773,415 -15,818,191 -19,908,408 4,996, 1 87 -10,914,811 -6,325,606
AFTER TAX PROFIT (LOSS) -18,919,972 8,437,295 -22,680,264 10,218,384 -11,497,382 -7,307,614
FINANCIAL RESULTS
CURRENT ASSETS 295,806,761 303,327,044 284,275,645 296,705,788 293,404,269 282,401,564
CURRENT LIABILITIES 206,417,494 188,571,625 180,736,441 172,550,016 186,565,461 207,423,160
OPERATING FIXED ASSETS 397,231,145 366,899,704 335,459,859 321,533,246 307,969,492 311,252,533
LONG TERM LIABILITIES 178,321,931 164,929,347 144,306,601 144,841,272 127,033,628 113,181,694
SHARE HOLDERS EQUITY 25,115,405 33,552,700 10,872,436 17,220,220 84,976,276 77,766,050
RATIOS
CURRENT RATIO 1.43 1.61 1.57 1.72 1.58 1.36
GROSS PROFIT (LOSS) TO SALES % 15.5 21.21 18.54 29-64 26.16 23.31
NET PROFIT (LOSS) TO SALES % -12.5 5.37 -13.86 6.81 -2.05 -5.5
REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE
WITH BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE
We have reviewed the Statement of Compliance with the best practices contained in the Code of
Corporate Governance prepared by the Board of Directors of M/S FRONTIER CERAMICS
LIMITED to comply with the Listing Regulation No. 37 (Chapter XI) of the Karachi Stock
Exchanges (Guarantee) Limited and Section 36 (Chapter XI) of the listing Regulation of the
Islamabad Stock Exchange (Guarantee) Limited where the company is listed.
The responsibility for compliance with the Code of Corporate Governance is that of the Board of
Directors of the Company. Our responsibility is to review, to the extent where such compliance
can be objectively verified, whether the Statement of Compliance reflects the status of the
Company's compliance with the provisions of the Code of Corporate Governance and report if it
does not. A review is limited primarily to inquiries of the Company personnel and review of
various documents prepared by the Company to comply with the Code.
As part of our audit of financial statements we are required to obtain an understanding of the
accounting and internal control systems sufficient to plan the audit and develop an effective audit
approach. We have not carried out any special review of the internal control system to enable us
to express an opinion as to whether the board's statement on internal control covers all controls and
the effectiveness of such internal controls.
Based on our review, nothing has come to our attention, which causes us to believe that the
Statement of Compliance does not appropriately reflect the compliance, in all material respects,
with the best practices contained in the Code of Corporate Governance.
PESHAWAR                                                                           MUQTADIR MUSHTAQ & CO.,
September 26,2003.                                                            Chartered Accountants
AUDITORS* REPORT OF THE MEMBERS
We have audited the annexed balance sheet of M/S FRONTIER CERAMICS LIMITED as at
June 30,2003 and the related profit and loss account, cash flow statement and statement of changes
in equity together with the notes forming part thereof, for the year then ended and we state that
we have obtained all the  information and explanation which, to  the best of our knowledge and
belief, were necessary for the purpose of our audit.
It is the responsibility of the Company's management to established and maintain a system of
internal control and prepare and present the above said statement in conformity with the approved
accounting standards and the requirements of the Companies Ordinance, 1984. Our responsibility
is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These
standards require that we plan and perform the audit to obtain reasonable assurance about
weather the above said statement are free of any material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the above said
statements. An audit also includes assessing the accounting policies and significant estimates made
by management, as well as, evaluating the overall presentation of the above said statements. We
believe that our audit provides a reasonable basis for our opinion and after due verification, 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;
I I. The expenditure incurred during the year was for the purpose of the
Company's business;
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, cash
flow statement and statement of changes in equity together with the notes forming
part thereof, conform with the approved accounting standards as
applicable in Pakistan, and give the information required by the companies
Ordinance, 1984 in the manner so required and, respectively give a true and fairview
of the state of the company's affairs as at June 30,2003 and of the loss, its cash flows
and changes in equity fortheyearthen ended, and
D)                   in our opinion no Zakat was deductible at source under the Zakat & Ushr
ordinance, I960.
PESHAWAR                                        MUQTADIR MUSHTAQ & CO,
September 26, 2003.                                      Chartered Accountants
BALANCE SHEET AS AT JUNE 30, 2003
2003 2002
Notes Rupees Rupees
PROPERTY AND ASSETS
Fixed Assets - at cost less depreciation 12 311,252,533 307,969,492
Capital Work in Progress 13 — 1,675,692
Long Term Deposits 14 1,202,250 198,250
312,454,783 309,843,434
CURRENT ASSETS
Stores, spares and loose tools - at cost 15 33,461,823 32,296,134
Stock in Trade - at cost 16 169,624,034 168,130,759
Trade Debtors 17 64,377,631 70,297,375
Advances, Deposits, Pre-payments &
Other Receivables 18 8,051,643 13,293,738
Cash and Bank Balances 19 6,886,433 9,386,263
282,401,564 293,404,269
CURRENT LIABILITIES
Finance under Markup Arrangements 8 96,825,808 94,825,808
Current Portion of Long Term Loan Liabilities 9 33,492,571 21,745,806
Creditors, Accrual and other Liabilities 10 77rl04r78l 69,993,847
207.423.160 186.565.461
Working Capital 74,978,404 106,838,808
Total Assets 387,433,187 416,682,242
Less: Long Term Loans 7 51,451,246 57,667,327
Long Term Loan BEL Consortium 6 25,256,095 33,094,870
Deferred Liabilities 5 36,474,353 36,271,431
Net Assets
274,251,493 289,648,614
REPRESENTED BY
Issued, Subscribed and Paid up Capital 3 77,412,000 77,412,000
Profit & Loss 354,050 75,64,726
Surplus on Revaluation of fixed assets 4 1 96,485,443 204.672,338
274,251,493 289,648,614
Contingencies and Commitments II
PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2003
Notes 2003 2002
Rupees Rupees
Sales - Net 20 114,006,559 1 16,514,208
Cost of Sales 21 87.436.522 86.037.600
Gross Profit/(l_oss) 26,570,037 30,476,608
OPERATING EXPENSES
Administrative Expenses 22 16,100,862 15,280,563
Selling & Distribution Expenses 23 12.163.913 28.264.775 11.812.776 27.093.339
Operating Profit / (Loss) -1,694,738 3,383.27
Profit/(Loss) on Sale of fixed Assets 26 1,753,662 238,564
Profit on PLS Saving Account 55,861 8,965
Other Income — 1 00,000
1.809.523 347.529
114,785 3,730,798
Financial Expenses 24 6,440,391 6, 1 1 7,595
Profit/(Loss) before taxation -6,325,606 -2,386,797
Taxation 25 982.008 582.571
Profit/(l_oss) after taxation -7,307,614 -2,969,368
Prior Year Adjustment -97,388
Accumulated Profit / (Loss) Brought Forward 7,564,276 -60,191,780
Amortization of incremental depreciation on revaluation
of fixed assets — 70,725,424
Accumulated Profit/(Loss) Carried to Balance Sheet 354,050 7,564,276
Earning per share 28
STATEMENT OF CHANGES IN FINANCIAL POSITION
(CASH FLOW STATEMENT) FOR THE YEAR ENDED JUNE 30, 2003
2003 2002
Rupees Rupees
CASH FLOW FROM OPERATING  ACTIVISTS
ProfiV(Loss) before taxation -6,325,606 -2,386,797
Adjustments to reconcile profit to net cash
provided by operating activities
Depreciation 4,972,,62 1 5,230,554
Less: ( gain)/Loss on sale of fixed assets -1,753,662 -238,564
Financial expenses 6,440,39 1 6,117,595
Prior Year Adjustment 97,388 -
Cash flows from  operating activates before
working capital changes. 3,431,132 8,722,755
CASH FLOWS FROM WORKING CAPITAL CHANGES
(INCREASE)/ DECREASE IN CURRENT ASSETS
Stores, Spares & loose tools -1,165,689 -2,437,819
Stock in trade -1,493,275 2,817,669
Advance, deposits, prepayments & other receivables 5,919,744 1,328,489
2,637,425 1,858,028
INCREASE/(DECREASE)IN CURRENT LIABILITIES
Creditors, accruals & other liabilities 3,738,676 9,049,792
CASH FLOWS FROM WORKING CAPITAL CHANGES 9,636,881 12,616,159
CASH FLOWS FROM OPERATING ACTIVITIES 13,068,013 21,338,947
Interest paid -2,852,673 -5,638,408
Income tax paid Dividend paid -390,076 -750,686
- -673,060
NET CASH FLOWS FROM OPERATING ACTIVITIES 9,825,264 14,276,793
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed capital expenditures  -13,351,003 -222,250
Sale proceeds of operating fixed assets Capital work in progress 2,338,000 266,000
Long term  security deposits -1,004,000 (1,675,692) 100,000
NET CASH FLOWS FROM INVESTING ACTIVITIES -12,017,003 -1,531,942
CASH FLOWS FROM FINANCING ACTIVITIES
Deferred liabilities . 202,951
Fiances under mark up arrangements 2,000,000 5,391,402
long term loan -47,844 -11,353,720
Long term loan (BEL Consortium) -2,260,247 -6,538,636
NET CASH FLOWS FROM FINANCING ACTIVITIES -308,091 -12,480,003
NET INCREASE/ (DECREASE)IN CASH AND CASH EQUIVALENTS -2,499,830 264,848
CASH AND CASH EQUIVALENT AT THE
BEGINNING OF THE YEAR 9,386,263 9,121,415
CASH AND CASH EQUIVALENT AT THE END
OF THE YEAR 6,886,433 9,386,263
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED JUNE 30, 2003
Share Capital Capital Reserve Accumulated Total
Rupees Rupees Profit / (Loss) Rupees
Balance as at 1 st July 200 1 77,412,000 283,925,776 (60, 1 9 1 ,780) 301,145,996
Issue of Shares Capital - - - -
Proposed Dividend - 0
Amortization of incremental
depreciation on revaluation
of Fixed Assets -70,725,424 - -70,725,424
Revaluation Adjustment for the year -8,528,014 - -8,528,014
Profit/(Loss)after taxation - - -2,969,368 -2,969,368
Retained Earning - - 70,725,424 70,725,424
Balance at 30th June 2002 77,412,000 204,672,338 7,564,276 289,648,614
Revaluation Adjustment for the year -8,186,895 - (8, 1 86,895)
Profit/(Loss)after taxation - - -7,210,226 -7,210,226
Balance at 30th June 2003 77,412,000 196,485,443 354,050 274,251,493
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED JUNE 30,2O03
1.        THE COMPANY AND ITS OPERATIONS
Frontier Ceramics Limited was incorporated in Pakistan in July 1982 as a Public Limited Company, and
was listed on the Karachi and Lahore Stock Exchange in April 1992.
The company is engaged in the manufacturing and sale of sanitary ware and ceramics tiles.
2.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1               Basis of Preparation of Financial Statements
These financial statements have been prepared in accordance with International Accounting
standards as applicable in Pakistan, and under the historical cost convention as modified by
capitalization of certain exchange difference in the cost of relevant assets without any
adjustments for the effects of inflation, except plant and machinery which has been re-
valued (Note No. -4).
2.2                 Staff Retirement Benefits
The Company operates a provident fund scheme for all its employees, contributions in
respect thereof are made in accordance with the terms of the scheme.
2.3               Taxation
Charge for current taxation in the accounts is based on taxable income of the Company after
taking into account rebate, if any allowable to the company. The company accounts for
deferred taxation using liability method arising on all major timing differences.
2.4               Fixed Assets
Fixed assets are stated at cost less accumulated depreciation, except leasehold land and
capital work in progress, which are stated at cost.Depreciation is charged on reducing
balance method at the rates specified in Note No. 12. Full year depreciation is charged
on fixed assets acquired during the first half of the accounting year, but no depreciation is
charged on fixed assets acquired during the second half of the accounting year. No
depreciation is charged if the assets are disposed off/deleted in the first half of the
accounting year but charged if disposal/deletion is made in the second half of the
accounting year.
Normal repairs and maintenance are charged to expenses, as and when
incurred, while major renewals and replacements are capitalized. Gains
and losses on disposal of fixed assets are taken to Profit and Loss Account currently.
The company's management decided to reduce the rate of depreciation of Plant &
Machinery and Building on lease hold land in 2001. The depreciation was charged on
the said assets previously & 6.6% and 10% respectively.
The depreciation is charged on imported Plant & Machinery @ 4% and on Building
@ 5% since 2001. The basic motive of reduction in depreciation rates is to
minimize the cost of production and improve the profitability ofthe company.
2.5                    Stock in Trade, Stores, Spares and Loose Tools
These are stated as follows:
Stores, Spares and Loose Tools                       At average cost
Raw & Packing Material                                   At average cost,  except in transit,
wh ich are stated at actual cost.
Work in process                                             At cost
Finished Goods                                              At lower of cost or market value.
2.6                    Rate of Exchange
Foreign currency loans and other foreign currency transactions are recorded at the
rate prevailing on the date of transaction. Repayment of foreign currency loans are
made at the rate at which the same were disbursed because of exchange risk having
been covered.
2.7                    Revenue Recognition
Sales are recorded on dispatch of goods to customers.
Notes 2003 2002
Rupees Rupees
SHARE CAPITAL
AUTHORISED
8,000,000 Ordinary Shares of Rs. IO/- each 3 80,000,000 80,000,000
Issued, Subscribed and Paidup Capital 7,741,200
Ordinary shares of Rs. 1 0/- each issued for cash 77,412,000 77,412,000
SURPLUS ON REVALUATION
OF FIXED ASSETS 4 204,672,338 283,925,776
Less: Amortization of Incremental depreciation arising
out of revaluation of fixed assets -8,186,895 -79,253,438
196,485,443 204,672,338
i) Revaluation of plant & machinery has been carried out as on June 30, 1996 by an independent valuer,
M/s Global Engineer (Pvt) Ltd. Faisalabad, and duly certified by R.H. & Co. Chartered Accountants, a firm
approved by the State Bank of Pakistan for the purpose of revaluation of fixed assets. Revaluation
has been carried out on the basis of depreciated replacement value (Refer to note No. 12).
ii) Incremental depreciation arising out of revaluation of fixed assets is being charged as per Clause 35 of
Ordinance No. C of 2002. (F.No. 2(l)/2002-Pub) dated 26th October 2002.
iii)    DEFERRED LIABILITIES 5
a.      Remission/Waiver of PICIC Markup
loan restructured 20,678,992 24,814,791
Less: Remission / Waiver adjusted 4,135,799 4,135,799
16,543,193 20,678,992
b.    Add: Deferred Markup PICIC 11,322,467 8,406,100
Deferred Markup BEL Consortium 8,608,693 7,186,339
19,931,160 15,592,439
36,474,353 36,271,431
The restructured loan liabilities entails remission/waiver which would be'aJlowed and in proportion to the actual
payment made by the company over the period.
Future markup of the restructured loan @ 10% p.a. on the principal amount on reducing balance over a period of
84 months shall be payable on any of the first available options as noted below:
i.     If the company receive refund of Sales Tax for Rs. 150 million then the full amount shall be paid by the company.
ii. In case the Sales Tax is not refunded to the company within the year ending 30-06-2001 then the company shall
sell/dispose their office at Kashif Centre, Karachi and full amount shall be paid by the company out of the sales
proceed of the office by 30-06-2001.
iii. In case either of the above two options not materialise then the amount shall be paid by the company from the
month following immediately after payment of restructured loan.
iv.    BEL, HBL, UBL, MCB, ABL has approved loan restructuring while NBP has not yet issued approval
letter. However, markup has been provided on the basis of other consortium members.
BEL CONSORTIUM NOTE (in rupees)
LOANS 6
BEL NBP HBL UBL MCB ABL 2003 2002
Redeemable Capital Restructured/
Rescheduled into loan (Secured) 20,589,498 7,340,059 5,138,512 3,874,191 2,869,739 2,214,000 42,025,999 48,564,635
Paid during the year 1,123,065 - 380,632 286,976 305,574 1 64,000 2,260,247 8,018,020
Add: Prior year adjustment - - - - - - 0 1,479,384
19,466,433 7,340,059 4,757,880 3,587,215 2,564,165 2,050,000 39,765,752 42,025,999
Current Portion of Long term Loan
Current Maturity and Over
dues installment 7,861,455 1,048,572 1,903,160 1,434,880 1,441,590 820,000 14,509,657 8,931,129
11,604,978 6,291,487 2,854,720 2,152,335 1,122,575 1,230,000 25,256,095 33,094,870
All the BEL led consortium members approved restructuring proposal from 1st Jan - 2000 on the basis mentioned here under:
1.          Outstanding principal amount and 20% of the outstanding mark-up be restructured and merged into single loan and will be payable in 84 equal monthly installments
commencing from January 2000.
2.            Future mark-up to be accrued @ 10% p.a. on the outstanding principal loan amount on a reducing balances over a period of 84 months shall be payable on any of the
first available options as noted below:
i)             From the refund of sales tax of Rs. 150 million or from the sale of Kashif Centre premises or on completion of the 84 monthly installments, the same installments to be
continued to pay off the said interest.
ii)            In case the Sales Tax is not refunded to the company within the year ending 30-06-2001 then the company shall sell/dispose their office at Kashif Centre, Karachi
and full amount shall be paid by the company out of the sales proceed of the office by 30-06-2001.
iii)            In case either of the above two options not materialise then the amount shall be paid by the company from the month following immediately after payment of
restructured loan.
3.             The restructured / rescheduled loans are secured by way of first charge already created on the fixed assets of the company both moveable and immovable floating
charge and hypothecation of all other assets i.e. book debt and other current assets present and future ranking pari pasu with NDFC, PICIC.
4.               BEL, HBL, UBL, MCB and ABL approved restructuring / rescheduling whereas NBP rescheduling has not yet been finalised. The amount of NBP as stated above
determined on the basis of other consortium members.
2003 2002
Notes Rupees Rupees
LONG TERM LOANS
(SECURED)
7
Foreign Currency
Pakistan Industrial Credit & Investment
Coporation 7.1 43,258,910 54,794,630
Less:  Paid during the year 7,690,490 11,535,720
35,568,420 43,258,910
National Development Finance Corporation 7.2 25,944, 1 37 25,944,137
ORIX Investment Bank Pakistan Limited 7.3 9,500,000 -
Less:Paid during the year 578,397 -
8,921,603 0
70,434,160 69,203,047
Less: Transfer to current maturity & Over Dues
PICIC 15,380,960 11,535,720
NDFC - -
ORIX 3,601,954 -
18,982,914 11,535,720
51,451,246 57,667,327
PICIC Loan                                                                     7.1
PICIC has extended a restructuring/rescheduling facility to the company through consent decree in
the Sindh High Court on June 8, 1999 on the basis of following terms and conditions.
Part-l
Principal amount of Rs. 64.907 million together with foreign exchange risk fee and partial accrued
interest thereon of Rs. 15.843 million totalling Rs. 80.750 million.
Part-l I (Future Interest)
Interest Accrued on Principal @ 10% p.a. on the original principal loan amount of Rs. 64.907 million
on reducing balance over a period of 84 months amounting to Rs. 22.988 million. The total
restructured loan liability of Rs. 103.738 million entails remission/waiver of Rs. 68.435 million according
to PICIC original claims of Rs. 172.173 million as on 31-12-1998. The remission/waiver will be
allowed over the period and in proportion of the actual payment made by the company.
REPAYMENTS
Part I
Rs. 80.750 million shall be repaid in 84 equal monthly installments of Rs. 961,310/- each commencing from
15-04-1999.
Part II
Future interest shall be paid onthe following alternatives:
(a)       If the company receives refund of Sales Tax of Rs. 150 million then the full amount of Rs. 22.988
million shall be paid/adjusted by the company to PICIC immediately henceforth.
(b)       In case the aforesaid sales tax of Rs. 150 million is not refunded to the company within the year
ending 30-06-2001 then the company shall sell/dispose their office at Kashif Centre Karachi at
any price (which the company have assured to PICIC shall be in the region of Rs. 25 million) and
the full amount of Rs. 22.988 million shall be paid by the company to PICIC out of the aforesaid
sale proceeds of the office by 30-06-2001.
(c)       In case either of the above two options does not materialize then this amount of Rs. 22.988 million
shall be paid by the company through their own sources in monthly installments of Rs. 961,310/-
from the month following immediately after payment of Rs. 80.750 million.
(d)       The restructured/rescheduled loans are secured by a first charge already created on the fixed assets
of the company both moveable and immoveable floating charge and hypothecation of all other
assets i.e. book debts and other current assets, present and future ranking pari pasu with NDFC &
BEL Syndicate.
NDFC Loan                                                             7.2
The rate of interest is I I % and foreign exchange risk is 3% per annum payable on the 15th day of March and
15* day of September each year. Total amount of foreign currency disbursed has since been fixed in Pak
Rupee. The above loan is repayable in sixteen half yearly installments, commencing from I" March 1993.
Against this loan, the Company has regularly paid Rs. 0.5 million p.m. till March 1997, which NDFC has set-
off against their markup dues and Rs. 3.91 6 million paid during the year commencingjuly I, 1999 to June 30,
2000 on the basis of liabilities settled with PICIC. Insp'rte of this no positive response from NDFC has yet
been received. The company also made several attempts to settle the loan under the S.B.P loans scheme,
circular No. 19 dated 05-06-1997 under which the company claims remission in markup, etc. The
company expected as amicable settlement. However, afterthe failure of the negotiations, it has filed a suit
in Court of law. Markup on markup has been deferred by the company till the final decision of the courts.
The loan are secured by first pari pasu charge with PICIC & BEL Syndicate on the fixed assets of the
company both moveable & immoveable floating charge and hypothecation of all other assets i.e. book
debts and another current assets, present and future. This case is subjudice with Honourable
Peshawar High Court.
ORIX Investment Bank Pakistan Limited?.3
The company has arranged a long term finance from Orix Investment Bank Pakistan Ltd. for Rs. 9.5 million
Under markup arrangement. Markup is computed at the rate of 43.84 paisas/l 000/day.
The facility is valid & repayable in a period of 3 years. Repayment of principal would be effected in 34
Monthly installments, commencing three months from the date of agreement and markup would be
Effected, monthly from the date of agreement i.e. July 27, 2002.
Securities:-
The above facility is secured by way of:
1.         Hypothecation charge over fixed assets of the company amounting to Rs. 12.667.000/- inclusive
of 25% margin, which is to be maintained at all times.
2.         Pledge of certificate of investment amounting to Rs. 1,000,000
Notes 2003 2002
FINANCE UNDER MARKUP Rupees Rupees
ARRANGEMENTS - (SECURED) 8
Cash Finance - Hypothecation 8.1 60,000,000 60,000,000
cash finance - pledge 8.2 9,761,000 9,761,000
Running Finance 8.3 25,064,808 25,064,808
Working Capital 8.4 2,000,000 —
96,825,808 94,825,808
8.1       National Bank of Pakistan has sanctioned a credit facility of Rs. 60.00 million for cash finance The above finance
is secured by first charge against hypothecation of stock in trade, spares, book debts, current assets and risk
sharing guarantee of BEL and NCB's. The validity of the facility has expired on 30-06-98.
The rate of markup is Rs. 0.43836 (2000 Rs. 0.54) per 1000 per day on daily product basis payable
half yearly.
8.2      National Bank of Pakistan has granted cash finance facility of Rs. 10 million against pledge of stock of finished
goods. Rs. 20 m for import of L/C limit, Rs. 5.00 million for Inland L/C limit and Rs. 5.00 million for guarantee limit
The above finance is secured against pledge of stocks of finished goods at 100% margin.
The rate of markup is 0.43836 paisa per Rs. 1000 per day on daily product basis payable half yearly. The
validity of this facility has been renewed uptil June 30, 2001.
8.3      The Bank of Khyber has sanctioned credit facility of Rs. 25 million for cash finance, and Rs. One million for
guarantee limit.The above finance is secured by hypothecation of stocks, stores and spares of the company.
The rate of markup is Rs. 0.43 (2001 Rs. 0.46) per 1000 per day on daily product basis, payable quaterely.
The validity of the facility has been renewed for a full period of one year ending 30-04-2002.
8.4       First Crescent Modarba has sanctioned credit facility under Musharaka Agreement of Rs. 0.3 million for
working capital at a markup rate of 18% per annum for a short term period.
The above finance is secured by hypothecation of debts and Assets of the company.
Notes 2003 2002
Rupees Rupees
CURRENT PORTION OF
LONG TERM LIABILITIES 9
Redeemable Capital/Restructured Loan  7,838,775 8,931,129
Long Term Loans 14,883,919 11,535,720
Over due installments 10,769,877 1,278,957
33,492,571 21,745,806
CREDITORS, ACCRUALS AND
OTHER LIABILITIES 10
Creditors 6,949,960 2,436,547
Accrued Liabilities 6,520,340 1,830,082
Other Liabilities 20,954,727 26,419,722
Interest Accrued on Secured Loans 41,402,219 38,017,423
Workers Profit Participation Funds 707,502 707,502
Taxation 570,033 582,571
77.104.781 69.993.847
CONTINGENCIES AND COMMITMENTS
Bank Guarantee to Sui Northern Gas
security against bill II 2,815,000 4,097,000
SALES TAX 7,269,099 7,269,099
Since March 1995 till November 1995 company stopped payment of Sales Tax after finding and decision
of Honorable Wafaqi Mohtasib in favour of the company against our Sales Tax appeal. The department
imposed complete embargo on the clearance of goods from the factory till payment of Rs. 14.772.024/-
in respect of principal amount of Sales Tax and Additional Sales Tax. The company paid Rs. 7,502,925/-
the principal amount of Sales Tax and appealed under Sales Tax Act 1990 for the waiver of Additional
Sales Tax amounting to Rs. 7.269.099/-. The appeal is lying pending before the Peshawar High Court.
FIXED CAPITAL EXPENDITURE AS ON 30-06-2003
Note No. 12
Cost or Addition Cost or Rate of Accumulated Depreciation Accumulated Written Down
Revaluation Deletion Revaluation Depreciation Depreciation for the Depreciation Value
PARTICULARS as at 30-0 6-02 Adjustments as at 30-06-03 % as at 30-06-02 Year as at 30-06-03 as at 30-06-03
Leasehold Land 3,518,245 - 3,518,245 - - - - 3,518,245
Buildings
Factory on Leasehold Land 62,653,320 - 62,653,320 5 45,599,444 852,694 46,452,138 16,201,182
Office on Freehold Land - 2,648,885 2,648,885 5 1,056,796 79,604 1,136,400 1,512,485
Plant & Machinery Imported 399,160,725 15,963,020 415,123,745 4 128,410,965 10,829,990 139,240,950 275,882,795
Plant & Machinery Local 6,036,532 159,000 6,195,532 10 2,031,600 407,393 2,438,993 3,756,539
Electrification 12,055,064 - 12,055,064 5 6,035,601 300,973 6,336,574 5,718,490
Casting Benches 1,796,000 - 1,796,000 10 1,385,132 41,089 1,426,221 369,779
Furniture & Fixture 2,382,907 -20,740 2,362,167 10 1,602,324 75,984 1,678,308 683,859
Vehicles 5,410,875 131,690 3,371,541 20 4,010,286 214,405 4,224,691 849,624
-2,171,024 -1,702,774
Air-Conditioners & Coolers 1,142,037 -55,648 1,086,389 10 663,245 42,314 705,559 380,830
Office Equipments 2,974,020 89,985 3,064,005 10 1,641,844 136,722 1,778,566 1,285,439
Generators - 460,000 460,000 10 289,063 17,094 306,157 1 53,843
Laboratory Ware 30,130 _ 30,130 20 27,090 609 27,699 2,431
Other Assets 1,097,304 87,200 1,144,804 10 643,162 41,444 684,606 460,198
-39,700
Assets subject to finance lease (Vehicles) - 596,000 596,000 20 0 119.2 119.2 476,801)
17,026,895
Rupees    501,366,0/14 -2,287,112 516,105,827 193,396,552 13,159,516 204,853,294 311,252,533
501,442,144 222,250 501,366,044 179,908,898 13,758,568 193,396,552 307,969,492
Total 2002 Rupees -298,350
12.1                 Depreciation has ht'.i'.n allocated us under:
2003 2002
Charged to Cost of Sales A/C. 3,978,097 4,566,002
Charged to Admin Expenses 497,262 422,348
Charged to Selling Expenses 497,262 242,204
Charged to Surplus on Revaluation
of Fixed Assets 8,186,895 8,528,014
Total 13,159,516 13,758,568
Notes 2003 2002
Rupees Rupees
CAPITAL WORK IN PROGRESS 13
Capital work in Progress - 1,675,692
LONG TERM DEPOSITS 14
Security Deposits 1,202,250 198,250
STORES, SPARES AND LOOSE 15
TOOLS- AT COST Qff\i«pc 14,930,300 13,906,936
OlWl Cj Spares 18,531,523 18,389,198
33,461,823 32,296,134
STOCK IN TRADE - AT COST 16
Raw Material 35,415,313 31,881,285
Packing Material 3,884,725 4,439,731
Fitting & Accessories 6,102,778 6,088,474
Work in Process 43,719,656 43,864,154
Finished Goods 80,501,562 81,857,115
169,624,034 168,130,759
TRADE DEBTORS 17
Considered Good 72,068,007 77,037,251
Considered Doubtful - -
72,068,007 77,037,25 1
Less: Provision for Doubtful Debts 7,690,376 6,739,876
64,377,631 70,297.38
ADVANCES, DEPOSITS, PREPAYMENTS 18
AND OTHER RECEIVABLES
Supplies 2,391,434 2,367,400
Contractors & Consultants 379,250 375,750
Due from Employees for Expenses 416,745 602,644
Advance against Salaries 398,915 775,952
Sales Tax paid in Advance 383,990 4,083,990
Excise Duty paid in Advance 75,114 75,114
Duty & Taxes Refundable 627,869 627,869
Deposits & Advances 1,570,000 2,472,223
L/G Margin Deposits 1,518,250 1,018,250
Tax Deduction u/s 1 53 290,076 894,546
8,051,643 13,293,738
2003 2002
Notes Rupees Rupees
CASH AND BANK BALANCES 19
Cash in Hand 3,493,510 46,968
Cash in Transit 19.1 2,999,461 8,452,242
Cash at Bank in Current Account 393,462 887,053
6,886,433 9,386,263
19.1             Most of this amount is in the shape of cheques received, of which about half have still to be encashed.
SALES 20
Tiles 135,441,781 134,307,328
Sanitary 8,372,869 14,040,830
Export Sales 516,078 -
1 44,330,728 148,348,158
Less: Sales Tax 17,552,835 19,563,862
Discount 12,771,334 12,270,088
1 14,006,559 116,514.21
Note: Net Sales include sales to the tune of Rs. 24,629,625/- on which sales tax have been paid in advanced
COST OF SALES 21
Raw Material Consumed 21.1 29,607,733 29,366,064
Mould Dyes & Consumable store - 213,000
Gas & Electricity 24,906,072 26,125,893
Oil & Lubricants Consumed 713,765 429,246
Wages,Salaries & other benefits 1 8,307,305 14,072,937
Insurance 352,106 834,387
Repair & Maintenance 4,653,142 4,598,957
Research & Development 72,769 16,025
Other Production expenses 460,909 454,275
Packing Material Consumed 21.2 2,695,157 3,548,172
Depreciation 12.1 3,978,097 4,566,002
85,747,055 84,224,958
Beginning Stock W.I. P. July 1st 43,864,154 38,303,205
129,611,209 122,528,163
Less: Closing Stock W.I. P. June 30th 43,719,656 43,864,154
85,891,553 78,664,009
Add: Stock of Finished Goods July 1st 81,857,115 88,634,968
Consumption of fittings and accessories 189,416 595,738
167,938,084 167,894,715
Less: Stock of Finished Goods June 30th 80,501,562 81,857,115
87,436,522 86,037,600
2003 2002
Notes Rupees Rupees
RAW MATERIAL CONSUMED 21.1
Opening 31,881,285 32,358,010
Purchases 33,141,761 28,889,339
65,023,046 61,247,349
Closing Stock 35,415,313 31,881,285
Raw Material Consumed 29,607,733 29,366.06
Packing Material 21.2
Opening 4,439,731 4,918,812
Purchases 2,140,151 3,069,091
6,579,882 7,987,903
Closing Stock 3,884,725 4,439,73 1
Packing Material Consumed 2.695,157 3,548,172
ADMINISTRATION EXPENSES 22
Salaries, Allowances & Benefits 7,427,845 7,493,607
Rent, Rates and Taxes 182,520 113,735
Printing and Stationery 337,304 240,783
Postage, Telegram, Telephone & Telex 1,441,555 1 ,690,444
Fee and Subscription 217,969 216,249
Travelling and Conveyance 843,269 671,550
Legal and Professional Charges 779,503 870,574
Electricity, Gas and Water Charges 674,174 638,132
Lease Rentals - 15,000
Repair & Maintenance 112,809 80,337
Motor Vehicle Expenses 1,621,677 1 ,646,504
General Expenses 877,275 1,054,140
Bad Debts 950,500 -
Auditors' Remuneration 22. 1 125,000 75,000
Charity & Donation 22.2 12,200 52,160
Depreciation I2.I 497,262 422,348
22. 1     Auditors' Remuneration 16,100,862 1 5,280,563
Statutory Audit 1 20,000 70,000
Out of pocket expenses 5,000 5,000
125,000 75,000
SELLING & DISTRIBUTION EXPENSES 23
Salaries, Allowances & Benefits 3,998,259 3,729,990
Advertisements and Promotion 786,540 408,025
Travelling and Conveyance 340,732 298,196
Postage Telephones, Telegrams & Telex 825,194 728,653
Motor Vehicle Expenses 1,871,828 1,737,671
Entertainment 164,408 255,664
Printing & Stationery 50,633 237,605
Rent, Rates & Taxes 606,112 979,478
Freight Cartage etc. 2,339,682 2,216,004
Other Expenses 683,263 979,286
Depreciation 12.1 497,262 242,204
12,163,913 11,812,776
FINANCIAL CHARGES 24
Interest on Long Term Loans 371,152 982,300
Markup on Short Term Running Finance 5,796,302 4,864,743
Bank Charges 272,937 270,552
6,440,391 6,117,595
TAXATION 25
Current year provision. 570,033 582,571
Prior Year 411,975 -
982,008 582,571
The income tax assessment, of the company has been finalized upto and including assessment year
2002-2003 provision for taxation for the year has been made on the basis of the Turn Over Tax U/S 113
of the Income Tax Ordinance 2001.
DISPOSAL OF FIXED ASSETSNOTE
Mode of Particular                                          Original          Accumulated Sales                     2003              2002
DESCRIPTION Disposal of buyer                                              Cost             Depreciation              W.D.V. Proceed            ProfiV(Loss) ProfitALoss)
HINO Truck (1989) By Negotiation Forte Mktg. Services                          323,870               306,053                   17,817 431,750                413,933
186- A/1,
Township Lahore.
HINO Truck (1989) By Negotiation Mr.Hassan Faraz                                 308,000               294,452                   13,548 610,000                596,452
JT 1090 S/o Syed Umer Khan
Akora Khattak.
Mazda Truck By Negotiation Forte Mktg. Services                        500,000              180,000               320,000 350,000                  30,000
JT1089 Karachi
Suzuki Swift (1989) By Negotiation Forte Mktg. Services                          160,000               151,203                   8,797 105,875                  97,078
186- A/1,
Township Lahore.
Suzuki Pickup (1989) By Negotiation Forte Mktg. Services                         90,000                 85,059                  4,941 105,875                 100,934
186 -A/1,
Township Lahore.
Toyota Corolla (1981) By Negotiation Mehmood Ali Bangash(Employee)   178,750              176,688                  2,062 200,000                 197,938
H.No. 3, St. No. 3,
Warsak Road, Peshawar.
Suzuki Jeep By Negotiation Mehmood Ali Bangash(Employee)        97,000                95,875                  1,125 110,000                 108,875
H.No. 3, St. No. 3,
Warsak Road, Peshawar.
Suzuki Pickup (1995) By Negotiation ZahirUllah                                            222,000               163,803                 58,197 180,000                 121,803
Gul Abad, Bazit Khail,
Bada Bair Peshawar.
Suzuki Pickup By Negotiation Forte Mktg. Services                           195,000                 70,200              124,800 110,000                (14,800)
Karachi
Motor Cycle (1986) By Negotiation Forte Mktg. Services                             14,700                 14,287                       413 19,000                    18,587
186- A/1,
Township Lahore.
Motor Cycle (1990) By Negotiation Forte Mktg. Services                             26,084                 24,291                   1,793 24,000                   22,207
186- A/1,
Township Lahore.
Motor Cycle (1991) By Negotiation Forte Mktg. Services                             27,350                  25,001                   2,349 25,000                    22,651
186 -A/1,
Township Lahore.
Motor Cycle By Negotiation Forte Mktg. Services                             28,270                 26,328                   1,942 20,000                   18,058
Karachi
Furniture & Fixture By Negotiation Forte Mktg. Services                           20,740                1 5,997                 4,743 10,000                      5,257
186- A/1,
Township Lahore.
Air Conditioners By Negotiation Forte Mktg. Services                             55,648                 42,919                 12,729 25,000                    12,271
186- A/1,
Township Lahore.
Other Assets By Negotiation Forte Mktg. Services                             39,700                 30,618                   9,082 11,500                   2,418
186- A/1,
Township Lahore.
2002-2003                                2,287,112       1,702,774         584,338 2,338,000         1,753,662
2001-2002                                 298,350           270,914            27,436 266,000                   -           238,564
REMUNERATION OF DIRECTORS AND EXECUTIVES
Chief Other
Managerial Executive Directors Executives 2003 2002
Remuneration 400,000 1,222,832 1,858,036 3,480,868 3,105,747
House Rent 1 60,000 489,133 743,214 1,392,347 1,242,299
Utilities 40,000 122,283 185,804 348,087 310,575
Total 2003 600,000 1,834,248 2,787,054 5,221,302 •
Total 2002 600,000 2,067,000 2,284,947 - 4,951,947
No. of Persons
2003 1 3 11 15 -
2002 1 3 12 _ 16
In addition to the above, all the directors and executives are provided free use of company cars as per
their entitlement for office use. aggregate amount charged in the accounts for fee to directors
was Nil, (2002 Rs. Nil).
BASIC EARNING PER SHARE                      28
Prof it/(Loss) for the year after taxation -7,307,614 -2,969,368
Average issued ordinary shares 7,741,200 7,741,200
Earning per share -0.94 -0.38
29.          CAPACITY
The Installed production capacity of the plant is 3,000 tons for Sanitaryware
and 620,000 sqm. for Tiles. Actual capacity attained during the year in
respect of Tiles were 504,774 Sqm. Respectively (2002 Sanitary 236 tons
and Tiles 478,129 Sqm.)
FINANCIAL ASSETS AND LIABILITIES
Interest/Markup bearinq Non - Interest Markup bearinq
Maturity Maturity Sub Maturity Maturity Sub Total
upto one After one Total upto one after one Total 2003 2002
year year year year
Financial Assets
Advances, Deposits,
Prepayments and other
Receivables - - 0 8,051,643 - 8,051,643 8,051,643 13,293,738
Trade Debtors - - 0 64,377,631 - 64,377,631 64,377,631 70,297,375
Long Term Deposits - - 0 - 1,202,250 1,202,250 1,202,250 198,250
Cash and Bank Balance - - 0 6,886,433 - 6,886,433 6,886,433 9,386,263
June 30, 2003 - - 0 79,315,707 1,202,250 80,517,957 80,517,957 93,175,626
June 30, 2002 - - 0 92,977,376 198,250 93,175,626 93,175,626 -
Financial Liabilities
Redeemable capital 0 0 0 - - 0 0 42,025,999
Long-term loans 18,982,914 51,451,246 70,434,160 _ - 0 70,434,160 69,203,047
Short-term finances - 96,825,808 96,825,808 - 0 96,825,808 94,825,808
Creditors, accrual
and other liabilities - - 0 77,104,781 - 77,104,781 77,104,781 70,581,560
June 30, 2003 115,808,722 51,451,246 167,259,968 77,104,781 - 77,104,781 244,364,749 ; 276,636,414
June 30, 2002 115,292,657 90,762,197 206,054,854 73,779,100 - 73,779,100 279,833,954 -
30.1    Concentration of credit risk
Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties fail completely
to perform as contracted. Out of the total financial assets of Rs. 80,517,957/-(2002 Rs. 93,175,626) the financial assets
which are subject to credit risk amounted to Rs. 74,631,624/- (2002 Rs. 83,789,636). The Company believes that it is not
exposed to major concentration of credit risk.
30.2    Foreign Exchange Risk Management
Foreign currency risk arises mainly where receivables and payables exists due to transaction with foreign undertakings.
30.3     Fair Value of Financial Assets and Liabilities
The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values.
31.    NUMBER OF EMPLOYEES
Total number of employees as at June 30, 2003 were 365 (2002:360)
32.    CORRESPONDING FIGURES
Corresponding figures have been rearranged and reclassified, wherever necessary, for the purpose of comparison.
PATTERN OF SHAREHOLDING AT 30 JUNE, 2003
Number of
Share Holders Shareholding Total Share Held
116 1 100 11,600
2,476 101 500 1,175,600
85 501 1,000 83,300
92 1,001 5,000 231,700
11 5,001 10,000 88,000
2 10,001 15,000 26,600
2 15,001 20,000 35,500
1 20,001 25,000 20,800
2 25,001 45,000 90,000
1 45,001 50,000 47,500
1 50,001 70,000 67,000
2 70,001 100,000 200,000
1 100,001 125,000 122,900
1 125,001 150,000 147,500
1 150,001 500,000 464,000
1 500,001 600,000 516,805
1 600,001 1,000,000 716,600
1 1,000,001 1,100,000 1,040,000
1 1,100,001 1,300,000 1,208,195
1 1,300,001 1,500,000 1,447,600
2.799 7,741,200
Categories of Number of
Share Holders Share Holders      Share Held Percentage
1.     Individuals 2,792 5,172,600 66.82
2.    Investment Companies 1 122,900 1.59
3.    Insurance Companies 2 200,000 2.58
4.    Financial Institutions 3 2,231,200 28.82
5.    Modaraba 1 14,500 0.19
6.    Joint Stock Companies
7.    Foreign Investors
8.    Co-operative Societies
9.    Charitable Trusts
1 0.   Others
2,799 7,741,200 100
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