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Fecto Cement Limited
Annual Report 2001
CONTENTS
Corporate Information
Notice of Meeting
Directors' Report
Pattern of Shareholding
Auditors' Report
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
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. Majeedullah Hussaini
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 20th 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 Monday, December 31,2001 at 5.30 p.m. to transact the following businesses:
1. To confirm the Minutes of the 19th Annual General Meeting held on December 22, 2000.
2. To receive and adopt the Annual Audited Accounts for the year ended June 30, 2001
together with the Directors' and Auditors' Reports thereon.
3. 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.
4. To transact any other business with the permission of the Chair.
By Order of the Board
(ABDUL ALEEM)
Karachi: November 24, 2001 Company Secretary
Notes:
1. The Share Transfer Books of the Company will remain closed from Tuesday, December 25,
2001 to Monday, December 31, 2001 (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 SECURITES & 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 of 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.
DIRECTORS' REPORT TO THE MEMBERS
Dear Members
Your Directors are pleased to present their report alongwith the audited accounts for the year
ended June 30, 2001.
The depressed market conditions, excess supply of cement, exorbitant increase in input costs and
inequitable taxation has greatly affected the results of your company.
OPERATING PERFORMANCE
The production and dispatches for the year under review are as follows:
2001 2000
Tonnes
Production:
Clinker 473,390 445,380
Cement 502,719 458,619
Dispatches 498,634 458,120
OPERATING RESULT
We have informed last year that the enormous increase in the prices of furnace oil and
inequitable imposition of sales tax on cement industry is leading the industry towards disaster. The
current years results of your company have shown that our apprehension were right as result of
which your company suffered heavy losses.
The company as compared to last year's gross profit of Rs. 237.285 million has suffered gross loss
of Rs. 3.336 million, which was mainly due to two reasons. Firstly the decrease in net selling prices
due to inequitable imposition of sales tax and secondly the massive increase in furnace oil prices.
The increase of 20% in operating expenses and 21% in financial expenses resulted in loss before
tax of Rs. 114.493 million as compared to last year profit of Rs. 131.232 million.
DEBT OBLIGATION
By the grace of God the company continues to meet its financial commitments and debt
obligations on time.
FUTURE PROSPECTS
The recent developments in the region and the economic slow down in the country has also
affecting the cement industry adversely. The demand for the cement in the country is almost
stagnant an as such chances of increasing the operating efficiency are very remote. However,
in line with the strategy adopted by the cement industry, your company is also planned to
change the fuel system from furnace oil to coal. In this respect machinery has already been
acquired and the erection and installation is in progress. The management is confident that with
use of coal as fuel the company shall be able to produce better results.
BOARD OF DIRECTORS
During the year under review National Development Finance Corporation changed its nominee
Director from the Board and as a result Mr. Majeedullah Hussaini replaced Mr. Afaq Jamal
Hussain. The Board places on record its appreciation for the valuable support and contribution
by the outgoing Director and welcomes the new Director.
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, 2001 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 ASAD FECTO)
Karachi: November 24, 2001 Chairman
PATTERN OF SHAREHOLDING
AS AT JUNE 30, 2001
Number of Shareholding Total
Share Holders From To Shares Held
365 1 100 36,500
2051 101 500 948,400
349 501 1000 340,800
304 1001 5000 730,500
50 5001 10000 380,100
7 10001 15000 82,900
6 15001 20000 105,300
3 20001 25000 67,500
5 25001 30000 134,700
1 30001 35000 31,000
2 35001 40000 74,600
1 40001 45000 40,500
1 45001 50000 45,400
1 55001 60000 59,900
1 80001 85000 83,000
1 85001 90000 88,000
1 90001 95000 93,800
1 95001 100000 100,000
1 110001 115000 112,000
2 130001 135000 263,500
2 135001 140000 276,000
1 140001 145000 141,000
1 155001 160000 156,000
1 180001 185000 182,200
2 225001 230000 458,000
1 240001 245000 243,900
1 250001 255000 254,800
1 265001 280000 270,000
1 275001 270000 280,000
1 280001 285000 285,000
1 290001 295000 295,000
1 295001 300000 300,000
1 305001 310000 309,500
2 320001 325000 650,000
1 325001 330000 330,000
2 330001 335000 670,000
2 335001 340000 679,800
2 340001 345000 690,000
1 345001 350000 350,000
1 360001 365000 365,000
1 370001 375000 375,000
1 395001 400000 398,200
1 415001 420000 420,000
1 480001 490000 488,000
2 810001 815000 1,625,000
1 995001 1000000 999,300
2 1495001 1500000 2,999,600
2 1895001 1900000 3,790,834
1 1940001 1945000 1,945,000
1 3155001 3160000 3,156,600
1 3170001 3175000 3,172,200
1 4780001 4785000 4,782,700
2 5220001 5225000 10,442,966
------------------ ------------------
3196 45,600,000
========== ==========
Categories of Shareholders Number of Shares Held Percentage
Shareholders
Individuals 3,131 31,284,400 68.61
Investment Companies 35 4,221,900 9.26
Insurance Companies 2 14,900 0.03
Joint Stock Companies 14 78,500 0.17
Financial Institutions 7 8,003,100 1,755
Modaraba Companies 3 46,700 0.10
Foreign Investors 2 1,949,000 428
Others 2 1,500 0
------------------ ------------------ ------------------
Total 3,196 45,600,000 100.00
========== ========== ==========
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of Fecto Cement Limited as at 30 June 2001 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 2001 and of the loss, 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 was
deducted by the Company and deposited into the Central Zakat Fund established under
Section 7 of that Ordinance.
TASEER HADI KHALID & CO. RAHIM IQBAL RAFIQ & COMPANY
Chartered Accountants Chartered Accountants
Karachi: November 26, 2001
BALANCE SHEET
(Rupees in Thousands)
NOTE 2001 2000
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
GENERAL RESERVES 150,000 150,000
ACCUMULATED (LOSS)/PROFIT (40,314) 39,633
------------------ ------------------
565,686 645,633
LONG TERM LOANS 4 42,680 71,133
DEFERRED LIABILITIES 5 186,557 241,217
LONG TERM DEPOSITS 6 15,637 17,737
CURRENT LIABILITIES:
Short Term Running Finance 7 159,341 --
Current Maturity of Long Term Liabilities 4 28,453 28,453
Creditors, Accrued & Other Liabilities 8 208,299 211,306
Provision for Taxation 5,901 63,130
Proposed Dividend -- 45,600
------------------ ------------------
401,994 348,489
CAPITAL COMMITMENTS 9
------------------ ------------------
1,212,554 1,324,209
========== ==========
These accounts should be read in conjunction with the attached notes.
OPERATING FIXED ASSETS 10 736,004 811,034
CAPITAL WORK IN PROGRESS 11 2,456 --
LONG TERM DEPOSITS 4,503 4,505
CURRENT ASSETS:
Stores and Spares 12 314,037 311,862
Stock-in-Trade 13 38,502 35,158
Trade Debtors-Unsecured Considered Good 13,531 4,087
Advances and Prepayments 14 60,737 77,337
Cash and Bank Balances 15 42,784 80,226
------------------ ------------------
469,591 508,670
------------------ ------------------
1,212,554 1,324,209
========== ==========
(MOHAMMED YASIN FECTO) (ABDUL JALEEL SHAIKH)
Chief Executive Director
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2001
(Rupees in Thousands)
NOTE 2001 2000
SALES-NET 16 1,173,676 1,208,111
COST OF SALES 17 1,177,012 970,826
------------------ ------------------
GROSS (LOSS)/PROFIT (3,336) 237,285
OPERATING EXPENSES
General & Administrative 18 50,968 40,022
Selling & Distribution 19 25,993 24,113
------------------ ------------------
76,961 64,135
------------------ ------------------
(80,297) 173,150
FINANCIAL CHARGES 20 40,680 33,716
OTHER INCOME 21 (6,529) (3,634)
WORKERS' FUNDS 22 45 11,836
------------------ ------------------
34,196 41,918
------------------ ------------------
(LOSS)/PROFIT BEFORE TAXATION (114,493) 131,232
PROVISION FOR TAXATION
Current Year 23 5,901 63,130
Prior Year 2,028 2,376
Deferred (42,475) (17,658)
------------------ ------------------
(34,546) 47,848
------------------ ------------------
(LOSS)/PROFIT AFTER TAXATION (79,947) 83,384
========== ==========
(Rupees)
(Loss)/Earning per share - basic 24 (1.75) 1.83
========== ==========
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, 2001
(Rupees in Thousands)
2001 2000
Cash Flows from Operating Activities
(Loss)/Profit before Taxation (114,493) 131,232
Adjustments for:
Depreciation 81,003 89,800
Gain on Disposal of Fixed Assets (658) (1,002)
Loss on Retirement/Scrapping of Fixed Assets -- 3,670
Financial Charges 40,680 33,716
------------------ ------------------
Operating Profit before Working Capital Changes 6,532 257,416
Increase in Stores and Spares (2,175) (26,235)
Increase in Stock-in-Trade (3,344) (17,691)
Increase in Trade Debtors (9,444) (1,278)
Increase in Advances and Prepayments (6,461) (4,105)
Increase/(Decrease) in Short Term Running Finance 159,341 (30,834)
Decrease in Creditors, Accrued and Other Liabilities (9,812) (2,707)
------------------ ------------------
Cash Generated from Operations 134,637 174,566
Financial Charges Paid (46,431) (95,822)
Income Tax Paid/Deducted at Source (42,098) (9,173)
Long Term Deposits Received (2,100) (2,105)
Long Term Deposits Given 2 (79)
------------------ ------------------
Net Cash Flow from Operating Activities 44,010 67,387
Cash Flows from Investing Activities
Fixed Capital Expenditure (6,925) (9,063)
Capital Work-in-progress (2,456)
Sale Proceeds of Flexed Assets 1,610 1,918
------------------ ------------------
Net Cash used in Investing Activities (7,771) (7,145)
Cash Flows from Financing Activities
Repayment of Long Term Loans (28,453) (28,453)
Dividend Paid (45,228) (2)
------------------ ------------------
Net Cash used in Financing Activities (73,681) (28,455)
------------------ ------------------
Net (Decrease)/Increase in Cash & Bank Balances (37,442) 31,787
Cash and Bank Balances as at July 1 80,226 48,439
------------------ ------------------
Cash and Bank Balances as at June 30 42,784 80,226
========== ==========
(MOHAMMED YASIN FECTO) (ABDUL JALEEL SHAIKH)
Chief Executive Director
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED JUNE 30, 2001
(Rupees in Thousands)
Share Capital General Accumulated Total
Reserve Profit/(Loss)
Balance as at June 30, 1999 456,000 250,000 (98,151) 607,849
Profit after taxation -- -- 83,384 83,384
Appropriation:
Transfer from General Reserve -- (100,000) 100,000 --
Final Dividend (10%) -- -- (45,600) (45,600)
------------------ ------------------ ------------------ ------------------
Balance as at June 30, 2000 456,000 150,000 39,633 645,633
(Loss) after taxation -- -- (79,947) (79,947)
------------------ ------------------ ------------------ ------------------
Balance as at June 30, 2001 456,000 150,000 (40,314) 565,686
========== ========== ========== ==========
(MOHAMMED YASIN FECTO) (ABDUL JALEEL SHAIKH)
Chief Executive Director
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 2001
1. STATUS AND NATURE OF BUSINESS
The Company was incorporated in Pakistan on February 28, 1981 as a public limited
company and its shares are quoted on Karachi, Lahore and Islamabad Stock Exchanges. It
is principally engaged in production and sale of cement.
2. STATEMENT OF COMPLIANCE
These accounts have been prepared in accordance with accounting standards issued by
the International Accounting Standards Committee (IASC) and interpretations issued by
Standing Interpretations Committee of IASC, as adopted in Pakistan and the requirements of
the Companies Ordinance, 1984.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1 Accounting Convention
These accounts are prepared under the historical cost convention as modified by
capitalisation of certain borrowing cost and exchange differences.
3.2 Tangible Fixed Assets
i) Operating fixed assets are stated at cost (including where relevant related borrowing
cost and exchange difference) less accumulated depreciation, except free hold
land which is stated at cost.
ii) Capital work in progress is stated at cost including where relevant, related financing
costs. These costs are transferred to fixed assets as and when assets are available for use.
iii) Depreciation is charged to income applying the reducing balance method at the
rates specified in Note 10. Full year's depreciation is charged on additions, while no
depreciation is charged on assets disposed off.
iv) Maintenance and repairs are charged to income as and when incurred, Major
renewals and improvements are capitalized. Gains and losses on disposal of assets, if
any, are included in income currently.
3.3 Assets Subject to Finance Lease
i) These are stated at lower of present value of minimum lease payments under the
lease agreements and fair value of assets acquired on lease. The related obligations
of the lease are accounted for as liabilities. Assets acquired under the finance lease
are depreciated over the useful life of the assets in the same manner as the owned
assets.
ii) Finance charge under the lease agreements is allocated over the periods during
lease term so as to produce a constant periodic rate of financial cost on the
remaining balance of principal liability of each period.
3.4 Staff Retirement Benefits
The Company operates a defined contribution scheme, Provident Fund, for all its
regular permanent employees. Contributions are made equally by the Company
and the employees as per the rules of the Fund.
3.5 Stores, Spares and Loose Tools
These are valued at moving average cost other than stores and spares in transit which
are valued at cost comprising invoice value plus other charges paid thereon.
3.6 Stock-in-trade
Stock-in-trade is valued at lower of cost and net realisable value. Cost signifies in
relation to:
Raw Material produced by the Company At average cost comprising of excavation
cost, labour and appropriate overheads.
Other Raw Material and Packing Material     At cost determined on first-in-first-out basis.
Work-in process and Finished Goods At average cost comprising direct material,
labour and appropriate manufacturing overheads.
Net realizable value signifies the selling price less cost necessary to be incurred in
order to make the sale.
3.7 Foreign Currency Translation
Assets and liabilities in foreign currencies are translated into Rupees at the rates of
exchange ruling at the balance sheet date. Transactions in foreign currencies are
converted into Rupees at the rate of exchange ruling on the date of transaction. All
exchange differences are included in income currently.
3.8 Taxation
Current:
Provision for current taxation is based on taxable income at the current rates of
taxation after taking into account admissible tax credits and rebates, if any.
Deferred:
The Company accounts for deferred taxation on all significant temporary differences
using the liability method. However, net deferred tax debits, if any, are not
recognized.
3.9 Revenue Recognition
Sales are recorded on despatch of goods to customers.
(Rupees in Thousands)
2001 2000
4. LONG TERM LOANS-SECURED
Local Currency Loans:
National Development Finance Corporation:
-Term Loan No. 1 (Note 4.1) 52,800 73,920
-Term Loan No. 4 (Note 4.2) 18,333 25,666
------------------ ------------------
71,133 99,586
Less: Current Maturity 28,453 28,453
------------------ ------------------
42,680 71,133
========== ==========
4.1 This represents the outstanding balance as on June 30, 1989 of foreign currency
loan of US Dollar 28.550 million obtained from National Development Finance
Corporation, converted into local currency term loan of Rupees 446.078 million at
the exchange rate prevailing on June 30, 1989. The balance due as on May 01,
1999 has been staggered by National Development Finance Corporation and is
payable in 10 semi annual installments commencing from June 30, 1999. Markup @
18% per annum will be charged and in case of delay in payment additional markup
@ 4% per annum will be charged on the amount remaining unpaid after the due
date. The loan is secured by way of a first charge on all movable and immovable
properties of the Company and personal guarantees of sponsoring directors.
4.2 This represents the unpaid interest amounting to Rs. 195.550 million on the above
foreign currency loan capitalized by National Development Finance Corporation
as local currency term loan. The balance due as on May 01, 1999 has been
staggered by National Development Finance Corporation and is payable in 10 semi
annual installments commencing from June 30, 1999. Markup @ 18% per annum will
be charged and in case of delay in payment additional markup @ 4% per annum
will be charged on the amount remaining unpaid after the due date. The loan is
secured by way of a first charge on all movable and immovable properties of the
Company and personal guarantees of sponsoring directors.
5. DEFERRED LIABILITIES
Deferred Taxation (Note 5.1) 153,507 195,982
Deferred Markup 45,236 50,987
Less: Transferred to Current Liabilities 12,186 5,752
------------------ ------------------
33,050 45,235
------------------ ------------------
186,557 241,217
========== ==========
5.1 Deferred credits arising in respect of:
Accelerated Tax Depreciation 176,001 195,982
Deferred debits arising in respect of:
Assessed Tax Losses (22,494) --
------------------ ------------------
153,507 195,982
========== ==========
6. LONG TERM DEPOSITS-UNSECURED
Dealers (Note 6.1) 12,462 14,562
Suppliers and Contractors (Note 6.2) 3,175 3,175
------------------ ------------------
15,637 17,737
========== ==========
6.1 This represents interest free security deposits, received from cement agency holders
and is repayable on cancellation or withdrawal of agency. The Company in
terms of written contract with the agency holders is entitled to utilise the deposits,
as provided in Section 226 of the Companies Ordinance, 1984.
6.2 This represents interest free security deposits received from suppliers and
contractors and is repayable after the satisfactory execution or the cancellation
of agreements. The Company is entitled in terms of written contract with the
contractors and suppliers to utilise the deposits, as provided in Section 226
of the Companies Ordinance, 1984.
7. SHORT TERM RUNNING FINANCE-SECURED
The Company has aggregate running finance facilities of Rs. 170.0 million (2000: Rs. 120.0
million) available from a financial institution and a commercial bank. These arrangements
are secured by way of first charge over all the company's movable and immovable
properties and hypothecation of company's stock in trade, stores & spares, book debts,
machinery and personal guarantees of sponsoring directors of the company. The Rate of
markup ranges from 45-55 paisas (2000:50-57 paisas) per Rs. 1,000 per day.
8. CREDITORS, ACCRUED AND OTHER LIABILITIES
Creditors for Goods 8,080 7,147
Accrued Expenses 25,040 20,400
Workers' Profit Participation Fund (Note 8.1) -- 7,153
Markup on Long Term Finance Utilised
Under Markup Arrangements - Secured 12,186 5,752
Advances from Customers 83,915 82,853
Due to Associated Companies 53,161 71,099
Royalty Payable 270 239
Excise Duty Payable 1,381 1,392
Sales Tax Payable 12,309 150
Taxes Withheld 388 233
Unclaimed Dividend 9,944 9,587
Unpaid Dividend 262 248
Other Liabilities 1,363 5,053
------------------ ------------------
208,299 211,306
========== ==========
8.1 WORKERS' PROFIT PARTICIPATION FUND
Opening Balance 7,153 256
Add: Contribution for the year -- 7,153
Interest accrued 671 18
------------------ ------------------
7,824 7,427
Less: Payment during the year 7,824 274
------------------ ------------------
-- 7,153
========== ==========
9. CAPITAL COMMITMENTS
Capital commitments for acquisition of
machinery and consultancy. 22,500 --
========== ==========
10. OPERATING FIXED ASSETS
(Rupees in Thousands)
Cost Depreciation Written
Rate Down Value
Items As At As At Percent As At During Adjust- As At As At June
July 01 Additions Sale/ June 30 July 01 the ment June 30 30, 2001
2000 Disposals 2001 2000 Year 2001
Freehold Land 18,084 -- -- 18,084 -- -- -- -- -- 18,084
Factory Building
on Freehold Land 248,673 -- -- 248,673 10% 145,546 10,313 -- 155,859 92,814
Non-Factory
Building on Freehold Land 111,180 -- -- 111,180 5% 41,649 3,477 -- 45,126 66,054
Office Premises 2,415 -- -- 2,415 5% 914 75 -- 989 1,426
Plant, Machinery
and Equipments 1,438,035 -- -- 1,438,005 10% 875,329 56,271 -- 931,600 506,435
Quarry Transport
Equipments 240,162 -- -- 240,162 20% 208,689 6,295 -- 214,984 25,178
Furniture, Fixtures and
Equipments 26,502 1,461 -- 27,963 10% 12,519 1,544 -- 14,063 13,900
Motor Vehicles 27,770 5,464 2,899 30,335 20% 17,141 3,028 1,947 18,222 12,113
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
2001 2,112,821 6,925 2,899 2,116,847 1,301,787 81,003 1,947 1,380,843 736,004
========== ========== ========== ========== ========== ========== ========== ========== ==========
2000 2,114,098 9,063 10,340 2,112,821 1,217,741 89,800 5,754 1,301,787 811,034
========== ========== ========== ========== ========== ========== ========== ========== ==========
2001 2000
ALLOCATION:
Excavation Cost 17,975 20,803
Manufacturing Cost 59,396 65,596
Administrative and General 2,795 2,637
Selling and Distribution 837 764
------------------ ------------------
81,003 89,800
========== ==========
10.1 Details of Operating Fixed Assets disposed off during the year is as follows:
(Rupees in Thousands)
Accumulated Book Sale Mode of Particulars of
Description Cost Depreciation Value Proceeds Disposal Purchaser
VEHICLES:
Lancer 357 313 44 80 Negotiation Sheikh Mohsin Sadiq
House #129, Market Road
Rawalpindi
Subaro Car 226 194 32 65 Negotiation Mr. Amjad Ali
House # 1, Street # 1,
Phase 1, Birtish Homes,
Peshawar Road,
Rawalpindi
Toyota Sprinter 261 212 49 160 Negotiation Mr. Shahid Mahmood Butt
House # 4, Street 3,
Muslim Colony,
Samanabad, Lahore
Suzuki Khyber 270 219 51 120 Negotiation Mr. Nizamullah Khan
House # 183, PIB Colony,
Karachi
Toyota Corona 700 494 206 325 Negotiation Mr. Mohammed Usman Saeed
House # 19, Officers Colony,
Hayat Town, Wah
Toyota Corolla 631 424 207 430 Negotiation Mr. Wahid Hashim
B-212, Black-18,
Gulshan-e-Iqbal, Karachi
Suzuki Khyber 454 91 363 430 Insurance Adamjee Insurance
Claim Co. Ltd, & EFU General
------------------ ------------------ ------------------ ------------------ Insurance Co. Ltd. Karachi
2001 2,899 1,947 952 1,610
========== ========== ========== ==========
2000 10,340 5,754 4,586 1,918
========== ========== ========== ==========
11. CAPITAL WORK IN PROGRESS
This represents the advances given for the procurement of machinery for the modification
of existing firing system of the plant to make provision of coal firing and project examination
and processing fee paid for availing facility from a financial institution. The total cost is
estimated at Rs, 130 million which shall be financed partly by the company from its own
resources and partly by loans from financial institutions, banks and leasing Companies.
Messrs Saudi Pak Industrial and Agricultural Investment Company (Private) Limited has
already committed a loan of Rs. 50 million in this respect. The financial assistance from other
sources is at advance stage. The management is of the opinion that with the modification
of firing system the benefit of lower fuel cost shall accrue to the Company,
(Rupees in Thousands)
2001 2000
12. STORES AND SPARES
Stores 34,598 26,563
Spares 279,439 279,301
Store in transit -- 5,998
------------------ ------------------
314,037 311,862
========== ==========
13. STOCK IN TRADE
Finished Goods 15,315 5,833
Work-in-Process 15,904 19,573
Raw Material 2,966 4,231
Packing Material 4,317 5,521
------------------ ------------------
38,502 35,158
========== ==========
14. ADVANCES AND PREPAYMENTS
Advances-unsecured considered good:
Employees 1,987 1,991
Executives (Note 14.1) 4,732 2,868
Suppliers and Contractors 19,851 15,424
Advance Income Tax 18,845 41,906
Advance Excise Duty 1,491 9,877
Prepayments 13,831 5,271
------------------ ------------------
60,737 77,337
========== ==========
14.1 The maximum aggregate amount due from executives of the Company at the end
of any month during the year was Rs. 5.162 million (2000-Rs. 3.115 million).
15. CASH AND BANK BALANCES
In Hand 574 481
With Banks 42,210 79,745
------------------ ------------------
42,784 80,226
========== ==========
16. SALES-NET
Sales 1,971,100 1,849,478
Less: Excise Duty 527,367 641,367
          Sales Tax 227,391 --
          Commission 42,666 --
------------------ ------------------
797,424 641,367
------------------ ------------------
1,173,676 1,208,111
========== ==========
17. COST OF SALES
Raw and Packing Material Consumed:
Opening Stock 9,752 9,784
Purchases 112,517 118,122
Excavation Cost 72,988 73,129
------------------ ------------------
195,257 201,035
Closing Stock (7,283) (9,752)
------------------ ------------------
187,974 191,283
Fuel and Power 751,245 562,111
Stores and Spares Consumed 76,315 64,811
Salaries, Wages and Benefits 69,982 68,407
Insurance 16,542 16,521
Repairs and Maintenance 3,269 3,387
Rent, Rates and Taxes 60 61
Depreciation 59,395 65,596
Other Manufacturing Overheads 18,043 16,372
------------------ ------------------
1,182,825 988,549
Add: Opening Work-in-Process 19,573 3,294
Less: Closing Work-in-Process (15,904) (19,573)
------------------ ------------------
Cost of Goods Manufactured 1,186,494 972,270
Add: Opening Finished Goods 5,833 4,389
Less: Closing Finished Goods (15,315) (5,833)
------------------ ------------------
Cost of Sales 1,177,012 970,826
========== ==========
18. GENERAL & ADMINISTRATIVE EXPENSES
Salaries, Wages and Benefits 22,603 19,549
Traveling and Conveyance 6,097 856
Vehicles Running Expenses 2,870 2,694
Communications 1,926 2,040
Printing and Stationery 818 584
Rent, Rates and Taxes 2,634 2,764
Utilities 2,655 2,099
Repairs and Maintenance 1,372 755
Legal and Professional Charges 2,969 3,198
Auditors' Remuneration (Note 18.1) 283 275
Donations (Note 18.2) 752 316
Depreciation 2,795 2,637
Miscellaneous 3,194 2,255
------------------ ------------------
50,968 40,022
========== ==========
18.1 AUDITORS' REMUNERATION
2001 2000
Rahim Iqbal Taseer Hadi Rahim Iqbal Taseer Hadi
Rafiq & Co. Khalid & Co. Rafiq & Co. Khalid & Co.
Audit Fee 112 112 112 112
Out of Pocket Expenses 27 32 26 25
------------------ ------------------ ------------------ ------------------
139 144 138 137
========== ========== ========== ==========
283 275
========== ==========
18.2 None of the Directors or their spouses have any interest in the above donee Funds.
19. SELLING & DISTRIBUTION EXPENSES
Salaries, Wages and Benefits 10,141 10,120
Traveling and Conveyance 795 564
Vehicles Running Expenses 1,497 1,450
Communications 1,600 1,461
Rent, Rates and Taxes 950 916
Repairs and Maintenance 381 358
Advertisement 4,339 3,970
Marking Fee 1,866 1,947
Depreciation 837 764
Miscellaneous 3,587 2,563
------------------ ------------------
25,993 24,113
========== ==========
20. FINANCIAL CHARGES
Markup on:
Long Term Loans 25,630 31,046
Running Finance 11,077 1,894
Interest on Workers' Profit Participation Fund 671 18
Legal Documentation Fee 2,057 --
Bank Commission and Charges 1,245 758
------------------ ------------------
40,680 33,716
========== ==========
21. OTHER INCOME
Markup on Bank Deposits 5,178 5,198
Gain on Sale of Fixed Assets 658 1,002
(Loss) on Retirement/Scrapping of Fixed Assets -- (3,670)
Scrap Sales 676 1,069
Miscellaneous 17 35
------------------ ------------------
6,529 3,634
========== ==========
22. WORKERS' FUNDS
Workers' Profit Participation Fund -- 7,153
Workers' Welfare Fund 45 4,683
------------------ ------------------
45 11,836
========== ==========
23. TAXATION
The Income Tax Assessments of the Company have been finalised upto and including
Assessment year 2000-2001.
24. (LOSS)/EARNING PER SHARE - Basic
(Loss)/Profit after taxation Rupees (79,946,118) 83,383,719
========== ==========
Number of ordinary shares 45,600,000 45,600,000
========== ==========
(Loss)/Earning per share Rupees (1.75) 1.83
========== ==========
25. REMUNERATION OF DIRECTORS AND EXECUTIVES
    (Rupees in Thousands)
2001 2000
Chief Director Executives Chief Director Executives
Executive Executive
Managerial Remuneration 1,681 1,681 35,189 1,537 1,537 29,973
Retirement Benefits 91 91 1,954 73 73 1,590
Reimbursable Perquisites 180 180 2,001 145 145 1,664
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
1,952 1,952 39,144 1,755 1,755 33,227
========== ========== ========== ========== ========== ==========
Number 1 1 73 1 1 64
========== ========== ========== ========== ========== ==========
Meeting Fee -- 33 -- -- 28 --
========== ========== ========== ========== ========== ==========
Number -- 5 -- -- 5 --
========== ========== ========== ========== ========== ==========
Certain Executives are provided with the free use of Company cars and the operating
expenses are reimbursed at actual to the extent of their entitlement.
(Rupees in Thousands)
2001 2000
26. TRANSACTIONS WITH ASSOCIATED COMPANIES
Purchases & other transactions 117,330 108,977
27. CAPACITY AND PRODUCTION Tonnes
Rated Capacity 600,000 600,000
Actual Production 473,390 445,380
The shortfall in production is due to depressed market conditions which resulted in low
capacity utilisation.
28. FAIR VALUE OF FINANCIAL INSTRUMENTS
Carrying amounts of all financial assets and financial liabilities approximate their respective
fair values.
29. INTEREST/MARKUP RATE RISK EXPOSURE
(Rupees in thousands)
2001
Less than One month One year Non-Interest/ Total
one month one year and onward markup
bearing
Financial Assets
Long Term Deposits -- -- -- 4,503 4,503
Trade Debtors -- -- -- 13,531 13,531
Advances -- -- -- 26,570 26,570
Cash and Bank Balances -- -- -- 42,784 42,784
------------------ ------------------ ------------------ ------------------ ------------------
-- -- -- 87,388 87,388
========== ========== ========== ========== ==========
Financial Liabilities
Long Term Loans -- 28,453 42,680 -- 71,133
Deferred Markup -- -- 33,050 -- 33,050
Long Term Deposits -- -- -- 15,637 15,637
Short Term Running Finance -- 159,341 -- -- 159,341
Creditors, Accrued & Other Liabilities -- 12,186 -- 112,198 124,384
------------------ ------------------ ------------------ ------------------ ------------------
-- 199,980 75,730 127,835 403,545
========== ========== ========== ========== ==========
2001
Less than One month One year Non-Interest/ Total
one month one year and onward markup
bearing
Financial Assets
Long Term Deposits -- -- -- 4,505 4,505
Trade Debtors -- -- -- 4,087 4,087
Advances -- -- -- 20,283 20,283
Cash and Bank Balances -- -- -- 80,226 80,226
------------------ ------------------ ------------------ ------------------ ------------------
-- -- -- 87,388 87,388
========== ========== ========== ========== ==========
Financial Liabilities
Long Term Loans -- 28,453 71,133 -- 99,586
Deferred Markup -- -- 45,235 -- 45,235
Long Term Deposits -- -- -- 17,737 17,737
Creditors, Accrued & Other Liabilities -- 5,752 -- 122,701 128,453
------------------ ------------------ ------------------ ------------------ ------------------
-- 34,205 116,368 140,438 291,011
========== ========== ========== ========== ==========
2001 2000
Effective rates of interest/markup for financial liabilities are as follows:
Long Term Loan 18% 18%
Short Term Running Finance 16% - 20% 18% - 21%
(Rupees in Thousands)
30. CREDIT RISK
The following financial assets of the Company are exposed to
credit risk:
Long Term Deposits 4,503 4,505
========== ==========
Trade Debtors 13,531 4,087
========== ==========
The Company controls credit risks by monitoring credit exposures and continuing assessment
of credit worthiness of customers,
31. GENERAL
31.1 Total number of employees including contractors' employees as at June 30, 2001 was
594 (2000: 612)
31.2 Prior year's figures have been re-arranged, wherever necessary, to conform
to current year's presentation.
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