| Karam Ceramic Limited |
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| Annual
Report 2000 |
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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 |
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| Pattern
of Shareholding |
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| Company
Information |
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| BOARD
OF DIRECTORS |
|
|
| Shaban
Ali G. Kassim |
Chairman |
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| Irshad
Ali S. Kassim |
Chief Executive |
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| Munawar
Ali S. Kassim |
Vice Chairman |
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| Mariam
Shaban Ali |
Director |
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| Shaheen
A. Rehman. |
Director |
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| Sakin Noorallah |
|
Director |
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| H. Hatim Dayala |
|
Director |
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| COMPANY
SECRETARY |
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| Manzoor
Ali Natha |
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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 Limited |
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| ABN
Amro Bank Ltd. |
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| Standard
Chartered Grindlays Bank |
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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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| National
Tax Number: 28-11-0710857 |
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| Sales
Tax Registration No. : 02-02-6907-001-55 |
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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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| * Mairaj - set |
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| W.C. Cistern |
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| Wash Basin |
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| Pedestal |
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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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| * Angelo - Set |
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| W. C. Cistern |
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| Wash Basin |
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| Pedestal |
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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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| *
Coloured & Decorate / Effect |
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| Glazed
Wall Tiles |
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| 15cm x 15cm |
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| 20cm x 30 cm |
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| 30cm x 30cm |
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| 28cm x 40cm |
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| Notice
of Meeting |
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| Notice
is hereby given that the 21st Annual General Meeting of the Company will be
held at the registered |
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| office
of the company on Friday 22nd December, 2000 at 3:30 p.m. to transact the
following business:- |
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| 1.
To confirm the minutes of the 20th Annual General Meeting held on 24th
December, 1999. |
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|
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| 2.
To consider and adopt the audited account of the company for the year ended
30th June, 2000 along |
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| with
the Report of the Directors thereon. |
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|
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| 3.
To Declare a dividend. The Directors have recommended a cash dividend of 15%
i.e. Rs. 1.50 per |
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| share. |
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| 4.
To appoint Auditors for the year 2001 and fix their remuneration. |
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| 5.
SPECIAL BUSINESS: |
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| The
remuneration of full time Chief Executive and Vice Chairman of the company to
be re-fixed w.e.f. |
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| 01-01-2001. |
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| "Resolved
that the remuneration of full time Chief Executive and Vice Chairman of the
company be |
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| and
is hereby re-fixed w.e.f 01-01-2001 from Rs. 40,000/- p.m. to Rs. 60,000/-
p.m. each." |
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| 6.
To transact any other business with the permission of the Chair. |
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By Order of the Board |
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|
MANZOOR ALI NATHA |
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| KARACHI:
December 01, 2000 |
|
Company Secretary |
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| NOTES: |
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| 1.
The share transfer book of the company will remain closed from 15th December
to 22nd December |
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| 2000
(both days inclusive). |
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|
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| 2.
A member eligible to attend and vote at the meeting may appoint another
member on his/her proxy |
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| to
attend and vote on his/her behalf. Proxies to be effective must be received
by the company not less |
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| 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
company of any change |
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| in their address. |
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|
| Statement
u/s 160 of the companies ordinance 1984. |
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| This
statement setout the material facts concerning the special business to be
transacted at the 21st |
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| Annual
General Meeting to the Karam Ceramics Limited to be held on December 22,
2000, subject |
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| to
approval of share holders, remuneration payable to full time Chief Executive
and Vice Chairman |
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| in
accordance with their terms and condition of service be increased to Rs.
60,000/- p.m. in each from |
|
| existing
Rs. 40,000/- p.m. each. For this purpose it is intended to propose that the
following resolution |
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| be
passed as ordinary resolution, namely: |
|
|
| "Resolved
that remuneration payable to Chief Executive and Vice Chairman for holding
their offices |
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| as
full time Directors @ Rs. 60,000/- p.m. w.e.f. 01-01-2001 be and hereby
approved." |
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| Directors'
Report |
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| The
Directors of your company have pleasure in submitting the report along with
audited |
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| accounts
for the year ended 30th June 2000. |
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|
| OPERATING
PERFORMANCE |
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| Year
under review was yet another year of economic turmoil and sign of improvement
is yet to be seen. |
|
| Presence
of low priced imported tiles forced your company to reduce the prices to
remain in market. As a |
|
| result
sate during the year remains marginally below the last year's sales by 2%. |
|
|
| Inspire
of adverse conditions, by grace of Allah, your company manages to improve the
profit after tax by |
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| 13%
to Rs. 15 million compare with Rs. 13 million of last years profit after tax
through economization in |
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| expenses
and by reducing cost of production and distribution. |
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|
| PROFIT
& DISTRIBUTION |
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| Details
of the appropriation recommended by the Directors are as under:- |
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|
|
|
Rupees |
|
|
|
|
|
|
| Profit
after Taxation |
|
15,023,152 |
|
| Un-appropriated
Profit brought forward |
|
23,805,743 |
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|
|
|
------------------ |
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| Profit
available for appropriation |
|
38,828,895 |
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|
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| APPROPRIATION: |
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| Cash
Dividend 15% (1999: 15%) on |
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| 10,911,780
shares of Rs. 10/- each |
|
16,367,670 |
|
|
|
|
------------------ |
|
| Un-appropriated
Profit carried forward |
|
22,461,225 |
|
|
|
|
========== |
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|
| BOARD
OF DIRECTORS |
|
| The
present monthly remuneration of the Chief Executive and Vice Chairman are as
under:- |
|
|
| -- Chief Executive |
|
Rs. 40,000/- |
|
| --
Vice Chairman |
|
Rs. 40,000/- |
|
|
| In
addition to above they are also provided with company maintained car. |
|
|
| FUTURE
PROSPECTS |
|
| Your
company is optimistic about the economic revival and hope that various
measures taken by the |
|
| government
will yield positive results. However in presence of WTO the price of the
product will remains under |
|
| pressure.
Your company is committed to cater the need of each segment of its customers
at competitive rates. |
|
| Therefore,
your company has incurred capital expenditure to improve quality, reduce cost
and increase |
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| volumes.
The new plant was successfully installed and has commenced production in June
2000, and hope |
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| the
benefit of this plant will accrue in years to come. |
|
|
| EMPLOYEES
RELATION |
|
| The
management would like to place on record its appreciation for the positive
attitude of the labour union |
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| during
the year under review and we look forward for its support in resolving all
issues mutually with the active |
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| cooperation
of the labour union. |
|
|
| AUDITORS |
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| Our
present auditors M/s. Taseer Hadi Khalid & Co., Chartered Accountants and
M/s. Qavi & Co., Chartered |
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| Accountants
retire and offer themselves for re-appointment. |
|
|
| SEGMENT
REPORTING |
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| Since
the raw material and other inputs of both the sanitary ware and tiles are
common, and also the production |
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| of
both is carried out at the Same factory premises, hence segment reporting of
financial is not possible. |
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| Moreover,
other companies of the same line of business do not report under segment
accounting. |
|
|
| PATTERN
OF SHARE HOLDING |
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| Pattern
of share holding as on June 30, 2000 are annexed. |
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| APPRECIATION |
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| The
Directors take this opportunity to thank the suppliers M/s. R.W. Watts
Limited, Fritta S.L., Cerdec A.G., |
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| sharesholders
and staff/employees etc. for their cooperation and contribution towards the
progress of the |
|
| company.
We would like to thank the Banks and financial institutions and customers,
for the confidence |
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| reposed
on the company. |
|
|
|
|
IRSHAD ALl S. KASSIM |
|
|
|
Chief Executive |
|
|
|
| Financial
Highlights |
|
|
|
|
Year ended |
Year ended |
|
|
|
June 30, 2000 |
June 30, 1999 |
|
|
| Net Sales |
|
Rs. in Million |
330.97 |
339.49 |
|
| Profit
/ (Loss) before Tax |
|
Rs. in Million |
20.35 |
18.81 |
|
| Income Tax |
|
Rs. in Million |
5.33 |
5.51 |
|
| Profit
/ (Loss) after Tax |
|
Rs. in Million |
15.02 |
13.30 |
|
| Earning
per Share |
|
Rs. Share |
1.38 |
1.21 |
|
| Cash
dividend per Share |
|
Rs. Share |
1.50 |
1.50 |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Karam Ceramics 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, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 (XVIII |
|
| of
1980) was deducted by the company and deposited in the Central Zakat Fund,
established |
|
| under
Section 7 of that Ordinance. |
|
|
| (e)
without qualifying our opinion, we would like to draw attention to the fact
that the financial |
|
| statements
do not disclose the information regarding "Segment reporting"
required by |
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| International
Accounting Standard 14. |
|
|
|
QAVI & CO. |
|
TASEER HADI KHALID & CO. |
|
|
CHARTERED ACCOUNTANTS |
|
CHARTERED ACCOUNTANTS |
|
|
| KARACHI:
NOVEMBER 22, 2000 |
|
|
|
| Balance
Sheet as at 30 June 2000 |
|
|
|
|
NOTE |
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Share Capital |
|
3 |
109,117,800 |
109,117,800 |
|
| Un-appropriated
profit |
|
|
22,461,225 |
23,805,743 |
|
|
------------------ |
------------------ |
|
|
|
|
131,579,025 |
132,923,543 |
|
| DEFERRED
LIABILITY - Staff gratuity |
|
20,559,645 |
16,501,669 |
|
| LONG
TERM LIABILITIES |
|
4 |
83,341,686 |
76,984,994 |
|
| DEFERRED
INCOME |
|
5 |
5,495,692 |
6,265,413 |
|
| DEFERRED
TAXATION |
|
22 |
6,600,000 |
3,000,000 |
|
|
|
| CURRENT
LIABILITIES |
|
| Current/overdue
portion of long-term and |
|
| deferred
liabilities |
|
6 |
67,561,782 |
62,268,041 |
|
|
|
|
|
| Short
term finance |
|
7 |
21,863,494 |
37,204,655 |
|
| Creditors,
accrued expenses and other liabilities |
8 |
113,788,646 |
61,962,397 |
|
| Provision
for taxation |
|
22 |
2,566,883 |
7,333,801 |
|
| Unclaimed
dividend |
|
|
108,141 |
96,581 |
|
| Proposed
dividend |
|
|
16,367,670 |
16,367,670 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
222,256,616 |
185,233,145 |
|
| COMMITMENTS
AND CONTINGENCIES |
9 |
|
|
------------------ |
------------------ |
|
|
|
469,832,664 |
420,908,764 |
|
|
========== |
========== |
|
|
|
| TANGIBLE
FIXED ASSETS |
|
| Operating
Assets - At cost less |
|
| accumulated
depreciation |
|
10 |
281,344,713 |
257,956,023 |
|
|
|
|
|
|
| Capital
work in progress |
|
11 |
4,160,962 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
285,505,675 |
257,956,023 |
|
| LONG
TERM DEPOSITS AND PREPAYMENTS |
12 |
12,105,015 |
11,072,433 |
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
13 |
802,616 |
596,113 |
|
| Stock in trade |
|
14 |
87,738,798 |
69,000,365 |
|
| Trade
debts - Unsecured considered good |
|
19,239,257 |
19,894,027 |
|
| Loans,
advances, deposits, prepayments |
|
|
| and
other receivables |
|
15 |
17,120,413 |
16,478,755 |
|
| Cash
and bank balances |
|
16 |
47,320,890 |
45,911,048 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
172,221,974 |
151,880,308 |
|
|
------------------ |
------------------ |
|
|
|
469,832,664 |
420,908,764 |
|
|
|
========== |
========== |
|
|
|
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
IRSHAD ALI S. KASSIM |
|
MUNAWAR ALI S. KASSIM |
|
|
Chief Executive |
|
Vice Chairman |
|
|
|
|
|
| Profit
and Loss Account |
|
| For
the year ended 30 June 2000 |
|
|
|
|
NOTE |
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| SALES - Net |
|
17 |
330,970,491 |
339,488,753 |
|
| COST
OF SALES |
|
18 |
270,798,481 |
276,642,683 |
|
| GROSS
PROFIT |
|
|
60,172,010 |
62,846,070 |
|
| OTHER
INCOME |
|
19 |
6,322,708 |
7,036,353 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
66,494,718 |
69,882,423 |
|
|
|
| ADMINISTRATIVE,
SELLING AND |
|
| GENERAL |
|
20 |
27,889,957 |
34,753,359 |
|
|
|
|
|
| FINANCIAL
CHARGES |
|
21 |
16,860,701 |
15,078,465 |
|
| WORKERS'
PROFIT PARTICIPATION FUND |
|
1,079,453 |
990,140 |
|
| WORKERS'
WELFARE FUND |
|
|
310,911 |
247,799 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
46,141,022 |
51,069,763 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
|
20,353,696 |
18,812,660 |
|
|
|
|
|
|
| PROVISION
FOR TAXATION |
|
22 |
|
| Current year |
|
|
2,566,883 |
4,011,650 |
|
| Prior year |
|
|
(836,339) |
-- |
|
| Deferred |
|
|
3,600,000 |
1,500,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
5,330,544 |
5,511,650 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
AFTER TAXATION |
|
15,023,152 |
13,301,010 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
23,805,743 |
26,872,403 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
38,828,895 |
40,173,413 |
|
|
|
========== |
========== |
|
| APPROPRIATION: |
|
| Proposed
dividend 15% (1999: 15%) |
|
16,367,670 |
16,367,670 |
|
|
|
|
------------------ |
------------------ |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
22,461,225 |
23,805,743 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| EARNING
PER SHARE - BASIC AND DILUTED |
23 |
1.38 |
1.22 |
|
|
|
|
|
|
|
|
|
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
IRSHAD ALI S. KASSIM |
|
|
|
MUNAWAR ALI S. KASSIM |
|
|
Chief Executive |
|
|
Vice Chairman |
|
|
|
| Cash
Flow Statement |
|
| For
the year ended 30 June 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
|
20,353,696 |
18,812,660 |
|
|
|
|
| Adjustments
for: |
|
| Depreciation |
|
|
32,065,531 |
28,813,561 |
|
| Provision
for staff gratuity |
|
|
5,191,383 |
3,975,433 |
|
| Charge
for Workers' profit participation fund |
|
1,079,453 |
990,140 |
|
| Charge
for Workers' Welfare Fund |
|
310,911 |
247,799 |
|
| Interest
and markup expense |
|
|
16,622,438 |
14,951,269 |
|
| Profit
on sale of fixed assets |
|
|
(283,650) |
(800) |
|
| Return
on deposits |
|
|
(2,028,352) |
(1,865,228) |
|
| Gain
on sale and lease back of fixed asset |
|
(2,430,426) |
(2,005,922) |
|
| Movement
in long term prepayments |
|
540,000 |
540,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
71,420,984 |
64,458,912 |
|
|
| (Increase)
/ Decrease in operating assets |
|
| Stores
and spares |
|
|
(206,503) |
271,887 |
|
| Stock in trade |
|
|
(18,738,433) |
1,258,704 |
|
| Trade debtors |
|
|
654,770 |
2,648,293 |
|
| Loans.
advances, deposits, prepayments and |
|
|
|
| other
receivables |
|
|
(1,493,678) |
(2,212,582) |
|
|
| Increase
/ (Decrease) in operating liabilities |
|
| Short
term finance under mark-up arrangements |
|
-- |
(17,500,000) |
|
| Short
term running finance |
|
|
15,341,161 |
29,540,881 |
|
| Creditors,
accrued expenses , other liabilities and bills payable |
51,133,824 |
(36,344,092) |
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
118,112,125 |
42,122,003 |
|
|
| Interest
and markup paid |
|
|
(16,622,438) |
(14,904,802) |
|
| Income tax paid |
|
|
(5,645,442) |
(5,726,930) |
|
| Gratuity paid |
|
|
(1,133,407) |
(719,934) |
|
| WPPF paid |
|
|
(990,140) |
(891,307) |
|
| WWF paid |
|
|
(247,799) |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flow |
