| Fecto Cement Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
| Corporate
Information |
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
& Loss Account |
|
| Cash
Flow Statement |
|
| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| CORPORATE
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
CHAIRMAN |
|
|
Mr. Mohammed Asad Fecto |
|
|
|
CHIEF EXECUTIVE |
|
|
Mr. Mohammed Yasin Fecto |
|
|
|
DIRECTORS |
|
|
Mr. Ghulam Mohammed A.
Fecto |
|
|
Mr. Mohammed Ilyas Khan |
|
|
Mr. Muhammad Nasim Khan |
|
|
Mr. Muhammad Umer Memon |
|
|
Mr. Safdar Abbas Morawala |
|
|
Mr. A. Rauf Chandio |
|
|
Mr. Afaq Jamal Hussain |
|
|
Mr. Abdul Jaleel Shaikh |
|
|
| SECRETARY |
|
Mr. Abdul Aleem, FCA |
|
|
| AUDITORS |
|
Taseer Hadi Khalid &
Co. |
|
|
|
Chartered Accountants |
|
|
|
Rahim Iqbal Rafiq &
Company |
|
|
Chartered Accountants |
|
| LEGAL
ADVISOR |
|
Nisar Law Associates |
|
|
51, Mozang Road |
|
|
Lahore |
|
|
| REGISTERED
OFFICE |
|
35-Darulaman Housing
Society |
|
|
Block 7/8,
Shahra-e-Faisal |
|
|
Karachi |
|
|
| FACTORY |
|
Sangjani, Islamabad |
|
| MARKETING
OFFICE |
|
2nd Floor, Majeed Plaza |
|
|
Bank Road, Saddar |
|
|
Rawalpindi |
|
|
| SHARE
REGISTRAR OFFICE |
Uni Corporate &
Financial Services |
|
|
|
Westland Trade Centre |
|
|
Opposite Flyover,
Shaheed-e-Millat Road |
|
|
Karachi |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 19th Annual General Meeting of the Members of the
Company will be held at |
|
| Registered
Office, 35-Darulaman Housing Society, Block 7/8, Shahra-e-Faisal, Karachi on
Friday, December |
|
| 22,
2000 at 10.00 a.m. to transact the following businesses: |
|
|
| ORDINARY
BUSINESSES |
|
| 1.
To confirm the Minutes of the 18th Annual General Meeting held on December
31, 1999. |
|
| 2.
To receive and adopt the Annual Audited Accounts for the year ended June 30,
2000 together with the |
|
| Directors'
and Auditors' Reports thereon. |
|
| 3.
To approve 10% cash dividend as recommended by the Board of Directors. |
|
| 4.
To appoint Auditors and fix their remuneration. The present Auditors Messrs
Taseer Hadi Khalid & Co., |
|
| Chartered
Accountants and Messrs Rahim Iqbal Rafiq & Company, Chartered Accountants
retire and |
|
| being
eligible, offer themselves for re-appointment. |
|
| 5.
To elect seven directors in accordance with the provisions of Section 178 of
the Companies Ordinance, |
|
| 1984
for a period of three years commencing January 01, 2001. |
|
|
| The
number of elected directors fixed by the Board of Directors under Section 178
of the Companies |
|
| Ordinance,
1984 is seven. |
|
|
| The
following retiring directors being eligible offer themselves for re-election: |
|
| Mr.
Ghulam Mohammed A. Fecto |
|
Mr. Mohammed Yasin Fecto |
|
| Mr.
Mohammed Asad Fecto |
|
Mr. Mohammed Ilyas Khan |
|
| Mr.
Muhammad Nasim Khan |
|
Mr. Muhammad Umer Memon |
|
| Mr.
Safdar Abbas Morawala |
|
|
| SPECIAL
BUSINESS |
|
| 6.
To consider and approve the remuneration payable to the Chief Executive and
one Working Director and |
|
| in
this respect to pass with or without modification, the following resolution
as an ORDINARY RESOLUTION: |
|
|
| "RESOLVED
THAT the monthly remuneration of Chief Executive and one Working Director be
fixed at |
|
| Rs.
150,000 each plus all other benefits available to executives in accordance
with the C0mpany's Rules, |
|
| commencing
January 01, 2001" |
|
|
| 7.
To transact any other business with the permission of the Chair. |
|
|
|
By Order of the Board |
|
|
|
(ABDUL ALEEM) |
|
| Karachi:
November 20, 2000 |
|
Company Secretary |
|
|
| Notes: |
|
| 1.
The Share Transfer Books of the Company will remain closed from Wednesday,
December 13, 2000 to |
|
| Friday,
December 22, 2000 (both days inclusive). |
|
|
| 2.
A Member entitled to attend, speak and vote at this meeting may appoint
another Member as his/her |
|
| proxy
to attend, speak and vote on his/her behalf. |
|
|
| 3.
An instrument appointing a proxy must be received at the Registered Office of
the Company not later than |
|
| forty
eight hours before the time appointed for the Meeting. A Member shall not be
entitled to appoint more |
|
| than
one proxy. If a Member appoints more than one proxy and more than one
instrument of proxy are |
|
| deposited
by a Member with the Company, all such instruments shall be rendered invalid. |
|
|
| 4.
GUIDELINES FOR CDC ACCOUNT HOLDERS ISSUED BY SECURITIES & EXCHANGE
COMMISSION OF |
|
| PAKISTAN |
|
| For
personal attendance: - |
|
| (i)
In case of individuals, the account holder or sub-account holder and/or the
person whose securities |
|
| are
in group account and their registration details are uploaded as per the
Regulations, shall |
|
| authenticate
his/her identity by showing his/her original National Identity Card (NIC) at
the time of |
|
| attending
the meeting. |
|
|
| (ii)
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. |
|
|
| For
appointing proxy |
|
| (i)
In case of individuals, the account holder or sub-account holder and/or the
person whose securities |
|
| are
in group account and their registration details are uploaded as per the
Regulations, shall submit |
|
| the
proxy form as per the above requirement. |
|
| (ii)
Attested copies of NIC of the beneficial owners and the proxy shall be
furnished with the proxy form. |
|
| (iii)
The proxy shall produce his/her original NIC at the time of the meeting. |
|
|
| 5.
Members are requested to notify any change in their address immediately. |
|
| 6.
Members should quote their Folio Number in all correspondence and at the time
of attending the Meeting. |
|
| 7.
Any person who seeks to contest the election to the office of Directors
shall, file with the Company, not later |
|
| than
Fourteen (14) days before the date of the meeting, a notice of his intention
to offer himself for election |
|
| as
Director in terms of Section 178 of the Companies Ordinance, 1984. |
|
|
| STATEMENT
UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984 |
|
| The
Chief Executive and full time Working Director will be interested in the
business of fixing their |
|
| remuneration
to the extent the remuneration will be payable to them. |
|
|
|
| DIRECTORS'
REPORT TO THE MEMBERS |
|
|
| Dear
Members |
|
| Your
Directors are pleased to present their report along with the audited accounts
for the year ended June 30, |
|
| 2000. |
|
|
| The
cement industry continues to suffer due to depressed market conditions and
excess supply. These factors |
|
| have
adversely affected the operating efficiency of almost all the cement units
including your company. However, |
|
| due
to adoption of effective marketing strategy by the management, the financial
results of the company have |
|
| shown
improvement during the year. |
|
|
| OPERATING
PERFORMANCE |
|
|
|
| The
production and despatches for the year under review are as follows: |
|
|
|
2000 |
1999 |
|
|
Tonnes |
|
| Production |
|
| Clinker |
|
445,380 |
467,000 |
|
| Cement |
|
458,619 |
496,210 |
|
| Despatches |
|
458,120 |
497,969 |
|
|
|
|
| OPERATING
RESULT |
|
| The
excess production capacity in the country, which has created glut of cement
and the adverse economic |
|
| conditions
prevalent in the country, compelled the management to continue the marketing
strategy adopted last |
|
| year
in order to get rationale prices for its products. This has resulted in
improvement in the operating results. |
|
|
| The
increase in gross profit rate from 11.525% to 19.64% was achieved mainly due
to enhanced selling prices. |
|
| The
increase of 5.39% in operating expenses and substantial decrease in financial
expenses by 38.32% resulted |
|
| in
profit before tax of Rs. 131.232 million as compared to last year profit of
Rs. 4.855 million. |
|
|
| APPROPRIATION |
|
|
(Rupees in Thousands) |
|
| Your
directors have recommended the following appropriation of Profit: |
|
|
| Profit
for the year |
|
83,384 |
|
| Accumulated
loss brought forward |
|
(98,151) |
|
| Transfer
from General Reserve |
|
100,000 |
|
|
----------- |
|
| Available
for appropriation |
|
85,233 |
|
|
|
|
| Proposed
Dividend @ 10% |
|
45,600 |
|
|
----------- |
|
| Accumulated
profit carried forward |
|
39,633 |
|
|
========== |
|
|
| DEBT
OBLIGATIONS |
|
| By
the grace of God the company continues to meet its financial commitments and
debt obligations on time. |
|
|
| FUTURE
PROSPECTS |
|
| Increase
in international oil prices and exclusion from the freight pool has resulted
in significant increase of 37 |
|
| percent
in furnace oil prices since July 2000 and thus increased one of our major
input cost. To make the situation |
|
| worst
for the industry Government took the irrational decision of imposing sales
tax on cement industry and |
|
| allowing
exemption to four cement units in NWFP. This has created inequity among the
costs of cements units |
|
| resulting
in chaotic situation, which is again taking the industry towards the major
crises. |
|
|
| AUDITORS |
|
| Present
auditors M/s. Taseer Hadi Khalid & Co., Chartered Accountants and M/s.
Rahim Iqbal Rafiq & |
|
| Company,
Chartered Accountants, retire and being eligible, have offered themselves for
re-appointment. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| A
statement showing the pattern of shareholding as at June 30, 2000 is annexed. |
|
|
| ACKNOWLEDGMENT |
|
| The
Directors would like to place on record their appreciation for the strenuous
efforts and dedicated work of |
|
| the
staff and workers and for the efforts made by the dealers in giving full
support to our marketing policies. |
|
| We
would also like to express our sincere thanks to all the financial
institutions and banks for their continued |
|
| support
and co-operation. |
|
|
|
On behalf of the Board |
|
|
|
(MOHAMMED YASIN FECTO) |
|
| Karachi:
November 20, 2000 |
|
Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
|
| We
have audited the annexed balance sheet of Fecto Cement Limited as at 30 June
2000 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 explanations which, |
|
| to
the best of our knowledge and belief, were necessary for the purposes of our
audit. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of internal control, and |
|
| prepare
and present the above said statements 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
whether the above said |
|
| statements
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; |
|
|
| 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, cash flow statement and statement of changes
in equity together |
|
| with
the notes forming part thereof conform with 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 fair view of the state of the company's affairs as at 30 June
2000 and of the |
|
| profit,
its cash flows and changes in equity for the year then ended; and |
|
|
| d)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
|
TASEER HADI KHALID & CO. |
|
RAHIM IQBAL RAFIQ & COMPANY |
|
| Karachi:
November 20, 2000 |
Chartered Accountants |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET |
|
| AS
AT JUNE 30, 2000 |
|
|
|
NOTE |
(Rupees in
Thousands) |
|
|
2000 |
1999 |
|
| SHARE
CAPITAL |
|
| Authorised: |
|
| 50,000,000
Ordinary Shares of Rs. 10/- each |
|
500,000 |
500,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up: |
|
| 45,600,000
Ordinary Shares of Rs. 10/- each |
|
| Issued
for Cash |
|
456,000 |
456,000 |
|
|
| RESERVES |
|
189,633 |
151,849 |
|
|
|
----------- |
----------- |
|
|
645,633 |
607,849 |
|
|
| LONG
TERM LOANS |
|
5 |
71,133 |
99,586 |
|
| DEFERRED
LIABILITIES |
|
6 |
241,217 |
264,615 |
|
| LONG
TERM DEPOSITS |
|
7 |
17,737 |
19,842 |
|
| CURRENT
LIABILITIES: |
|
|
|
|
| Short
Term Running Finance |
|
8 |
|
30,834 |
|
| Current
Maturity of Long Term Liabilities |
|
5 |
28,453 |
28,453 |
|
| Creditors,
Accrued & Other Liabilities |
|
9 |
211,306 |
270,381 |
|
| Provision
for Taxation |
|
63,130 |
15,729 |
|
| Proposed
Dividend |
|
45,600 |
-- |
|
|
----------- |
----------- |
|
|
1,324,209 |
1,337,289 |
|
|
========== |
========== |
|
|
2000 |
1999 |
|
|
|
|
| OPERATING
FIXED ASSETS |
|
10 |
811,034 |
896,357 |
|
| LONG
TERM DEPOSITS |
|
4,505 |
4,426 |
|
| CURRENT
ASSETS: |
|
| Stores
and Spares |
|
11 |
311,862 |
285,627 |
|
| Stock-in-Trade |
|
12 |
35,158 |
17,467 |
|
| Trade
Debtors-Unsecured Considered Good |
|
4,087 |
2,809 |
|
| Advances
and Pre-payments |
|
13 |
77,337 |
82,164 |
|
| Cash
and Bank Balances |
|
14 |
80,226 |
48,439 |
|
|
|
----------- |
----------- |
|
|
508,670 |
436,506 |
|
|
|
----------- |
----------- |
|
|
|
1,324,209 |
1,337,289 |
|
|
|
========== |
========== |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
(MOHAMMED YASIN FECTO) |
|
(ABDUL JALEEL SHAIKH) |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
NOTE |
(Rupees in
Thousands) |
|
|
|
2000 |
1999 |
|
| SALES-NET |
|
15 |
1,208,111 |
1,030,202 |
|
| COST
OF SALES |
|
16 |
970,826 |
911,572 |
|
|
|
|
----------- |
----------- |
|
| GROSS
PROFIT |
|
237,285 |
118,630 |
|
| OPERATING
EXPENSES |
|
| general
& Administrative |
|
17 |
40,022 |
36,652 |
|
| Selling
& Distribution |
|
18 |
24,113 |
24,201 |
|
|
----------- |
----------- |
|
|
64,135 |
60,853 |
|
|
----------- |
----------- |
|
|
173,150 |
57,777 |
|
| FINANCIAL
CHARGES |
|
19 |
33,716 |
54,667 |
|
| OTHER
INCOME |
|
20 |
(3,634) |
(2,001) |
|
| WORKERS'
FUNDS |
|
21 |
11,836 |
256 |
|
|
|
|
----------- |
----------- |
|
|
41,918 |
52,922 |
|
|
----------- |
----------- |
|
| PROFIT
BEFORE TAXATION |
|
131,232 |
4,855 |
|
| PROVISION
FOR TAXATION |
|
| Current Year |
|
22 |
631,301 |
15,729 |
|
| Prior Year |
|
2,376 |
-- |
|
| Deferred |
|
(17,658) |
( 13,070 |
|
|
----------- |
----------- |
|
|
47,848 |
2,659 |
|
|
----------- |
----------- |
|
| PROFIT
AFTER TAXATION |
|
83,384 |
2,196 |
|
| ACCUMULATED
(LOSS) BROUGHT FORWARD |
|
(98,151) |
(100,347) |
|
|
----------- |
----------- |
|
|
(14,767) |
(98,151) |
|
| APPROPRIATION: |
|
| Transfer
from General Reserve |
|
100,000 |
-- |
|
| Final
Dividend 10% (1999: Nil) |
|
(45,600) |
-- |
|
|
----------- |
----------- |
|
|
|
54,400 |
-- |
|
|
|
----------- |
----------- |
|
| ACCUMULATED
PROFIT/(LOSS) CARRIED FORWARD |
39,633 |
(98,151) |
|
|
|
========== |
========== |
|
| Earning
per share - basic (Rupees) |
|
23 |
1.83 |
0.05 |
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
(MOHAMMED YASIN FECTO) |
|
(ABDUL JALEEL SHAIKH) |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
(Rupees in
Thousands) |
|
|
2000 |
1999 |
|
| Cash
Flows from Operating Activities |
|
| Net
Profit before Taxation |
|
131,232 |
4,855 |
|
| Adjustments
for: |
|
|
|
| Depreciation |
|
89,800 |
99,904 |
|
| (Gain)
on Disposal of Fixed Assets |
|
(1,002) |
(469) |
|
| Loss
on Retirement/Scrapping of Fixed Assets |
|
3,670 |
896 |
|
| Foreign
Exchange Loss |
|
-- |
8,222 |
|
| Financial
Charges |
|
33,716 |
46,445 |
|
|
----------- |
----------- |
|
| Operating
Profit before Working Capital .Changes |
|
257,416 |
159,853 |
|
| (Increase)/Decrease
in Stores and Spares |
|
(26,235) |
12,846 |
|
| (Increase)/Decrease
in Stock-in-Trade |
|
(17,691) |
6,198 |
|
| (Increase)/Decrease
in Trade Debtors |
|
(1,27'8) |
16,483 |
|
| (Increase)
in Advances and Prepayments |
|
(4,105) |
(327) |
|
| (Decrease)/Increase
in Short Term Running Finance |
|
(30,834) |
30,834 |
|
| (Decrease)
in Creditors, Accrued and |
|
|
|
| Other
Liabilities |
|
(2,707) |
(31,723) |
|
|
----------- |
----------- |
|
| Cash
Generated from Operations |
|
174,566 |
194,164 |
|
| Financial
Charges Paid |
|
(95,822) |
(112,627) |
|
| Income
Tax Paid/Deducted at Source |
|
(9,173) |
(8,480) |
|
| Long
Term Deposits Received |
|
(2,105) |
(1,968) |
|
| Long
Term Deposits Given |
|
(79) |
(173) |
|
|
----------- |
----------- |
|
| Net
Cash from Operating Activities |
|
67,387 |
70,916 |
|
|
| Cash
Flows from Investing Activities |
|
| Fixed
Capital Expenditure |
|
(9,063) |
(1,913) |
|
| Sale
Proceeds of Fixed Assets |
|
1,918 |
1,383 |
|
| Advances
to Associated Companies |
|
-- |
9,675 |
|
|
----------- |
----------- |
|
| Net
Cash from Investing Activities |
|
(7,145) |
9,145 |
|
| Cash
Flows from Financing Activities |
|
| Repayment
of Long Term Loans |
|
(28,453) |
(72,070) |
|
| Repayment
of Redeemable Capital |
|
-- |
(15,756) |
|
| Dividend
Paid |
|
(2) |
(1,438) |
|
|
----------- |
----------- |
|
| Net
Cash used in Financing Activities |
|
(28,455) |
(89,264) |
|
|
----------- |
----------- |
|
| Net
Increase/(Decrease) in Cash & Bank Balances |
|
31,787 |
(9,203) |
|
| Cash
and Bank Balances as at July 1 |
|
48,439 |
57,642 |
|
|
----------- |
----------- |
|
| Cash
and Bank Balances as at June 30 |
|
80,226 |
48,439 |
|
|
========== |
========== |
|
|
|
|
|
(MOHAMMED YASIN FECTO) |
|
(ABDUL JALEEL SHAIKH) |
|
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
(Rupees in Thousands) |
|
|
Share Capital |
General |
Accumulated |
Total |
|
|
|
Reserve |
Profit/(Loss) |
|
|
|
| Balance
as at June 30, 1998 |
|
456,000 |
250,000 |
(100,347) |
605,653 |
|
| Profit
for the year |
|
-- |
-- |
2,196 |
2,196 |
|
|
----------- |
----------- |
----------- |
----------- |
|
| Balance
as at June 30, 1999 |
|
456,000 |
250,000 |
(98,151 ) |
607,849 |
|
| Profit
for the year |
|
|
83,384 |
83,384 |
|
|
----------- |
----------- |
----------- |
----------- |
|
|
456,000 |
250,000 |
(14,767) |
691,233 |
|
| Appropriation: |
|
|
|
| Transfer
from General Reserve |
-- |
(100,000) |
100,000 |
-- |
|
| Final
Dividend |
|
-- |
-- |
(45,600) |
(45,600) |
|
|
----------- |
----------- |
