PAKISTAN TELEPHONE CABLES LIMITED
ANNUAL REPORT 2004
Board of Directors
Raza Abdul Aziz Al- Raee				Chairman / Chief Executive
Aijaz Abdul Aziz Al- Raee				Director
Riyadh Abdul Aziz Al- Raee				Director
Rabia Barkat All				Director
Muhammad Kashif				Director
Sumiah Saeed-ur- Rehman Al- Raee				Director
Asma Hafeez				Director
Chief Financial Officer / Company Secretary Muhammad Ishaq Ahmed
Audit Committee
Aijaz Abdul Aziz Al- Raee				Chairmen
Riyadh Abdul Aziz Al- Raee				Member
Rabia Barkat Ali				Member
Muhammad Ishaq Ahmed				Secretary
Auditors
Khalid Majid Rehman Sarfraz
Rahim Iqbal Rafiq & Co
Chartered Accountants, Karachi.
Primary Bankers
PICIC Commercial Bank Limited
Bank Al- Falah Limited
Muslim Commercial Bank Limited
National Bank of Pakistan
Registered Office
18th Mile RCD Highway 27/3/2
Mouza Bairut, Tehsil Hub
District Lasbella
Baluchistan.
Liaison Office
E-3, Block - 1 7, AJ- Raee Avenue,
Behind National Stadium,
Gulshan-e- Iqbal,
Karachi.
Phones (Systek)
4802940-41,4815840-44
Fax				E-Mail
92-21-4802943				alraee@cyber.net.pk
Pakistan Telephone Cables is principally engaged in the manufacturing of TeJecommwiwcatiort
Cables of various specification and sale it to its consumer M/s. Pakistan Telecommunication
Company Limited (PTCL) Islamabad, Special Communication Organization (SCO) Rawalpindi,
National Telecommunication Corporation, Alpha Tech Corporation and Pakistan Ordinance
factories etc.
PTCL objectives and development strategy are aimed at achieving sustainable productivity and
profitability and highly standards of safety, occupational health and environmental eare. This
entails human resource re-engineering & development, and continuing growth through
upgradation of existing as well as addition of new facilities. In the changing global environment
and coming of WTO, corporate objective and development strategy has been defined to meet
the challenges of business.
Corporate Objectives
•    Contribute in meeting the consumer's demand of Telecommunication Cables.
•    Customer's satisfaction by providing best value and quality products.
•    Achieving and maintaining a high standard of Occupational Health, Safety and Environment
•    Maintain modern management system conforming to international standards needed for
an efficient organization.
Development Strategy
•    Human resource development by upgrading training facilities and exposure to modern
technologies / management techniques.
•    Expansion of Industry by establishing new imported machinery.
Notes:
1 .    Share Transfer Books of the Company will remain closed from 20-1 0-2004 to 30-1 0-2004 (both
days inclusive).
2.    All members are entitled to attend and vote at the meeting. A member may appoint a proxy who be a member of the Company.
3.    In terms of SECP Notification No: S.R.O. 49(1) 2003 dated 15th January 2003, Form "A" for filling
of Annual Return has been re-designed. In the new format, SECP has provided an additional column
for inserting the National Identity Card number of each shareholder. Therefore, to comply with the
SECP requirement, shareholders are requested to send us a photocopy of their new Computerized
National Identity Card (both side) alongwith Folio Number at the earliest.
4.    The instrument appointing the proxy and other authority under which it is signed, or a notarially
certified copy thereof, must be lodged at the company's Registered Office or Liaison Office duly
revenue stamped of Rs. 5/- and signed not later than 48 hours before the time of the meeting.
5.    Any change of address should be notified immediately to the company.
6.    CDC Account Holders will further have to follow the under mentioned guidelines as laid down
in Circular No. 1 Dated January 26, 2000 issued by the Securities & Exchange Commission of
Pakistan.
FOR ATTENDING THE MEETING
.(i)    In case of individuals, the account holder or sub-account holders and / or the persons whose
securities in group and their registration details are up-loaded as per the regulations, shall authenticate
his / her identity by showing his / her original Computerized National Identity Card (C.N.I.C) or
original passport at the time of attending the meeting.
meeting.
FOR APPOINTING PROXIES
(i)    In case of individuals, the account holders or sub-account holders and / or the persons whose
securities in Group account and their registration details are up-loaded as per the regulations, shall
submit the proxy form as per the above requirement.
(ii)   The proxy shall be witnessed by two persons whose names, addresses and CNIC numbers shall
be mentioned on the form.
Pakistan Telephone Cables Limited was incorporated as a Public Limited Company on June
08,1983. The Company is listed on the Karachi and Lahore Stock Exchanges. The Company
is engaged in the manufacturing of Telecommunication Cables and supply it to its largest
consumer M/s. Pakistan Telecommunication Company Limited, Islamabad. The company is
located at survey Nos. 27/3 Mouza Bairut, Tehsil, Hub, District Lasbella, Balochistan. The area
is prominently Lies on Main RCD Highway.
The management of the company has taken over by AL- RAEE GROUP since July 1988, and
manufacture the Telecommunication Cables very successfully.
CAPITAL
The company has a paid up capital of Rs. 210.00 Million. CAPACITY
The annual production capacity of plant is 502,000 CCKM approved by IBP. PROJECT & DEVELOPMENT
Another plant, imported from China is in a final stage of completion. The project trial run is
expected in October 2004. The total capacity will be enhanced by 500,000 CCKM.
project is Rs. 90.00 Million. STAFF The company's Registered office is located in Hub, Baluchistan. The company's total manpower
strength is 133 persons. The majority staff are technical because the project is Hi-tech. ENVIRONMENT
The company has a well-defined Environment Policy which pays a key role in its decision
making process to ensure compliance with relevant laws and to achieve continues improvement.
a guideline to our business mechanics and decision-making processes. INFORMATION TECHOLOGY
The Company manages its financial activities with the help of existing software package
developed by System Development Services. The management has planned to modify its existing
Computer Package in order to meet the requirement of Corporate, Financial and Management
information. It is aimed to train the employees to maintain, modify and enhance the existing
computer based applications and also- develop new application as per its requirements.
DIRECTOR'S REPORTS
The Board of Directors of the company have pleasure in presenting 21st Annual Report
on the performance and the audited financial statement of the Company for the year ended
June 30, 2004.
FINANCIAL RESULTS
				(Rupees in 000)
The profit of the company for the year ended
June 30, 2004 after providing for administrative,
selling & distribution, financial and other charges
amount to				10,359
Less: Provision for Workers Profit Participation Fund				518
				9,841
Add: Taxation				-3,853
Current				5,907
Deferred				2,053
Profit after taxation				11,894
Accumulated Loss Brought Forward Accumulated Loss Carried Forward				-120,009
				-108,115
The earning per share is Rs.0.566 (2003: Loss 0.911)
The Board of Director has decided that the company has made minimum profit and the
second unit of cable manufacturing, imported from China, is in stage of completion whose
trial run commences in coming month. Therefore, the outflow of FUNDS is not feasible
at this time. Because we are managing the resources to meet the supply of awarded Contracts.
OPERATING & FINANCIAL DATA
Key operating and financial data of last six years (1999 - 2004 ) is shown on page 13.
ACCOUNTING AND COMPANY POLICIES
The accounting policies followed in preparation of these financial statements are the same
as those of the published annual financial statements for the same period last year. The
stock in trade cost is computed at moving average instead of average cost. Subsequent to
the balance sheet date, the company has decided to appoint its entire existing staff on
contract basis and Gratuity is to be paid accordingly SCHDULE. While in past the Company
operated unfunded gratuity scheme covering all its permanent Employees who have
completed prescribed period of service and provision was made to cover the Liability.
The company complies with the requirement of the Code of Corporate Governance for
adaptation of significant policies. During the year under review, the Board has approved
several policies including Corporate Social Responsibility, Procurement, Employees Leave
and Service Rules etc.
Appropriate accounting policies have been consistently applied in preparation of financial
statements and accounting estimates are based on reasonable & prudent judgment.
International Accounting Standards have been followed in preparation of financial statements
without any material departure.
The system of internal control is sound in design and has been effectively implemented
and monitored.
The Board of Directors considered that the Company is a going concern.
There has been no material departure from the best practice of the corporate governance
as detailed in the listing regulations.
				(Rupees)
Outstanding taxes and levies:
Income Tax Provision (Current)				3.853 Million
Workers' Profit Participation Fund				14.853 Million
Sales Tax				0.318 Million
Name of Director				No. of Meetings Attended 06
Mr. Raza Abdul Aziz Al- Raee
Mr. Ejaz Abdul Aziz Al- Raee				6
Mr. Riyadh Abdul Aziz Al- Raee				6
Mr. Muhammad Kashif				5
Mrs. Rabia Barkat Ali				6
Mrs. Asma Hafeez				6
Mrs. Sumiah Saeed -DR Rehman Al- Raee				6
MANAGEMENT COMMITMENTS
5.1 Our auditors have reported that the company has provided corporate guarantee on
behalf of its associated company M/s The Plaza Companies (Pvt) Limited to Askari
Leasing Limited amounting to Rs. 35.679 Million and explain that it is in a contravention
of the provision of the Companies Ordinance 1984. As this is indicated, the management
has thoroughly analyses the legal matter and noted that this is Lease finance on
equipment and machinery of the Plaza Companies (Pvt) Limited, Karachi. The assets
of the company and the Director's personal Guarantees are provided to Askari Leasing
Limited in security support. We have approached towards Askari Leasing Limited for
withdrawal of this guarantee. The management of Askari Leasing is agreed to revoke
it by following the leasing rules and regulations. We also assure that there will be no
legal consequences and financial burden on our Company because a sufficient security
support is already provided to Askari Leasing Limited and we hope that we resolve this
matter at our earliest and provide and ease to Company from the future commitment
and burdens.
5.2 The liabilities of Workers Participation Fund amounts Rs. 14.536 Million is still
outstanding. The proposed methodology advised by our legal counsels is not suitable
for our Company. Therefore, the management has regretted to establish the trade union
which was already abolished since 1998 because of continuous lock down and
disturbances in industry. The management is committed to provide funds in a separate
account against Workers Profit Participation Fund and seeking legal opinion through
its advisors and lawyers to distribute the funds according to the provision of Workers
Participation Act 1 968. The Board of Director has declared that the contract scheme
is executed for all staff members inspiring corporate culture, efficiency in works and
to activate strength, find out weakness and face all threats. There is no abstinence's of
"Benefits" The service benefits will be rendered in every current year. Therefore, its
is concluded that this matter is solved during the current financial year.
5.3 The claim of liquidity damages amounting Rs. 3.9 Million as due from M/s. Pakistan
Telecommunication Company Ltd. are in process for which we have made various
correspondence. The management has already pursued to the higher management of
M/s. Pakistan Telecommunication Company Ltd., on certain SOLID GROUNDS with
proofs and evidences. It is fact that M/s. Pakistan Telecommunication Company Ltd,
had previously decided matter of refunds on the similar grounds.
CORPORATE GOVERNANCE
The company is committed to high standards of corporate governance. The Board of
Directors is accountable to the shareholders for good corporate governance. We have and
shall continue to comply with the provisions of best practices set out in the code of corporate
governance. The Company has been and shall remain committed to the conducting of its
business in line with listing regulations of the Stock Exchange, which clearly defines the
role and responsibilities of the Board of Directors and management.
STATEMENT BY BOARD OF DIRECTORS IN COMPLIANCE WITH CODE OF CORPORATE
GOVERNANCE
The financial statements prepared by the management of the Company present fairly its
state of affairs, the result off its operation, cash flows and change in equity.
The Board of Directors of the Company believes that proper books of account have been
maintained.
INFRASTRUCTURE DEVELOPMENT
Your company is continuously working for best maintenance of assets, and best efforts are
being engaged to increase plant integrity and reliability. CORPORATE SOCIAL RESPONSIBILITY
In following our mission statement and in recognition to the fact that each corporate entity has
a social responsibility to discharge, your company has decided to take up relevant, pertinent
activities.
FUTURE PROSPECTS
The Company has made the contracts having a worth Rs. 318.92 Million. The Company is
engaged with Askari Commercial Bank Limited to provide performance bond for the contracts
Rs. 1,106.71 Million for which the Letter of Indent is already issued. The Company would focus
on cost-effective techniques for the management of RESOURCES. The Company shall, by the
completion of its plants, be able to execute orders for higher quantities as per schedule and
expects to improve its competitiveness against foreign competition to end up with higher sale
and higher profit.
The board is confident for better results in the year ahead and will deemed the reasonable profit
in future.
ACKNOWLEDGEMENT
I wish to endorse my appreciation for the efforts and dedication of the management team, all
staff, workers and directors on the Board. The performance of the company has been the
outcome of teamwork. This performance would greatly assist in moving towards our vision of
attaining a distinctive leadership in the corporate success. I also take this opportunity to express
my thanks to customers, banks, financial institutions and contractors for their cooperation and
partnership in our continuing success.
I conclude with a word about you, our esteemed shareholders. It is heartening to know that
we continue to receive your support, confidence and trust, which I am confident, will be with
us in future as well.
STAKEHOLDERS INFORMATION
Particulars		2004	2003	2002	2001	2000	1999
FINANCIAL POSITION
Paid up Capital		210,000,000	210,000,000	210,000,000	210,000,000	210,000,000	30,000,000
Surplus of Revaluation
of Fixed Assets		47,096,817	51,464,083	110,937,858	110,937,858	34,581,267	34,581,267
Long term Loans		-	•  -	-	4,500,000	36,673,750	193,449,734
Assets Subject to Finance Lease		13,082,680	30,773,357	1,482,316	258,465	-	-
Fixed Assets at'Cost
and revaluation		182,914,573	179,921,986	168,040,866	157,606,339	86,978,286	75,361,556
Accumulated Depreciation		499,410,665	35,412,943	22,324,676	5,741,482	10,405,524	3,454,069
Current Assets		173,293,542	123,820,471	132,567,580	95,957,764	78,684,484	77,745,122
Current Liabilities		137,827,820	92,475,662	95,287,760	98,434,882	68,335,254	86,752,975
INCOME
Sales		440,821,816	372,952,346	422,968,936	326,962,004	527,776,762	83,910,552
Other lncome/(loss)		40,867	-2,773,519	-238,275	93,198	332,928	136,809
Reversal of Liabilities		-	-	3,054,226	.		1,298,059
Workers' profit
participation fund		-517,951	-197,744	-4,988,288	-3,016,014	-	-
Pre-Tax Profit		9,841,078	3,757,142	94,777,466	57,056,418	39,656,082	-39,856,230
Taxation/Deferred tax income		2,053,376	-22,878,165	-15,624,810	-1,634,810	-2,641,393	-419,912