| Pakistan Telephone Cables Limited |
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| Contents |
|
|
| BOARD
OF DIRECTORS |
|
| NOTICE
OF MEETINGS |
|
| REPORT
OF DIRECTORS |
|
| PATTERN
OF CATEGORIES OF SHAREHOLDERS |
|
| AUDITOR'S
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| CASH
FLOW STATEMENT |
|
| NOTES
TO THE ACCOUNTS |
|
|
|
| BOARD
OF DIRECTORS |
|
MR. ABDUL AZIZ AL-RAEE
(Chairman) |
|
|
MR. RAZA ABDUL AZIZ
AL-RAEE (Chief Executive) |
|
|
MR. NISAR ABDUL AZIZ
AL-RAEE |
|
|
MR. RIYADH ABDUL AZIZ
AL-RAEE |
|
|
MR. EIJAZ ABDUL AZIZ
AL-RAEE |
|
|
MR. AQEEL AHMED |
|
|
MRS. RABIA BARKET ALl |
|
|
| SECRETARY |
|
MR. REYAZUL HODA |
|
|
| AUDITORS |
|
RAHIM IQBAL RAFIQ AND
COMPANY |
|
|
(Chartered Accountants) |
|
|
| REGISTERED
OFFICE |
|
18th Mile RCD Highway, |
|
|
27/3/2, Mouza Bairut,
Tehsil Hub, |
|
|
District Lasbella |
|
|
Balochistan. |
|
|
| LIAISON-OFFICE |
|
Room No. 107, 2nd Floor, |
|
|
Elahi Centre, Preedy
Street, Saddar, |
|
|
Karachi - 74400. |
|
|
| ADVISOR |
|
MUSLIM SHAMIM & CO. |
|
|
10, Noorani Building, |
|
|
Campbell Street Chamber, |
|
|
Karachi. |
|
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the 16th Annual General Meeting of the Shareholders of
Pakistan Telephone Cables |
|
| Limited,
will be held at the Registered Office, at 18th Mile RCD Highway, 27/3/3, at
Mouza Bairuit, Tehsil Hub, |
|
| District
Lasbella, Balochistan on Friday the 31st December '1999, at 02:30 Hours to
transact the following |
|
| business: |
|
|
| 1.
To read & confirm the minutes of the 15th Annual General Meeting held on
Saturday the |
|
| 27th
February, 1999. |
|
|
| 2.
To receive, consider and adopt the statement of accounts for the year ended
30th June 1999, together with |
|
| the
report of Directors and Auditors thereon. |
|
|
| 3.
To appoint auditors for the year 1999-2000 and to fix. their remuneration.
The present Auditors |
|
| M/s
Rahim Iqbal Rafiq & Company Chartered Accountants' retire and being
eligible have offered ' |
|
| themselves
for re-appointment. |
|
|
| 4.
To appoint and elect an additional Director Mr. Mian Ghulam Abbas in the
company who will also work |
|
| as
Finance Director and whose consent has been taken as required U/S 184 of
company ordinance |
|
|
| 5.
To transact any other business which may legally be transacted at an Annual
General Meeting. |
|
|
|
sd/- |
|
|
REYAZUL HODA |
|
| Karachi
8th December, 1999. |
|
COMPANY SECRETARY |
|
|
| NOTICE: |
|
|
| 1.
Share Transfer Books of the Company will remain closed from 23/12/99 to
31/12/999. |
|
| (Both
days inclusive). |
|
|
| 2.
Shareholders are requested to communicate to the Company change, if any, in
their address. |
|
|
| 3.
The instrument of Proxy duly executed in accordance with Articles of
Association of the Company |
|
| should
be lodged with the Company, at lease 48 hours before the time of the meeting.
The Proxy |
|
| must
be a member of the company. |
|
|
|
| REPORT
OF DIRECTORS |
|
|
| Directors
are pleased to present their Annual Report together with the Company's
audited accounts for |
|
| the
year ended 30th June '1999. |
|
|
| Financial
Results are drawn as follows: |
|
|
| FINANCIAL
RESULTS: |
|
|
| Net
loss for the period ended 30th June '1999 |
|
Rs. 40,276,142.00 |
|
| Accumulated
Loss for the year ended 30th June '1998 |
|
Rs. 163,033,602.00 |
|
| Accumulated
Loss carried forwarded |
|
Rs. 203,309,744.00 |
|
|
| The
Company after adjustment of Turn-over-tax has sustained a Net Loss of Rs.
40,276,142. The net sale |
|
| of
Rs. 83.910 Million comprised of 65% in contractual sales made to M/s.
Pakistan Telecommunication |
|
| Company
Limited (PTCL), Islamabad, which was awarded against Contract No. 1074 &
1075 dated |
|
| 08~01-98
& 13-03-98 for Rs. 54.459 Million & Rs. 19.208 Million respectively.
The exchange rate was Fixed |
|
| in
the sales contract at Rs. 44.3144 for the then prevailing equivalent rate for
US Currency. |
|
|
| Unfortunately
the performance for both the Contract was delayed till last delivery made in
May 99, after |
|
| devaluation
of Pak Rs. by 15 to 16% (composite Exchange Rate) and price hike of Raw
Materials in the |
|
| International
Market. All these factors contributed to the loss suffered by the company
during the year. |
|
|
| It
is pertinent to state here that during the year there was a change in
specification of Cable made by our |
|
| Key
buyer PTCL, which would have rendered a substantial portion of our stock in
odd length and full length |
|
| as
obsolete, and in order to save total loss the Company decided to make force
sale at lower than cost |
|
| price.
This was also necessary to keep the plant and worker in operation. |
|
|
| However,
the overall sales has increased during the current year by 96.30% against the
preceding year |
|
| and
there is expected to be tremendous increase in the ensuing year. |
|
|
| COMPANY'S
OPERATION & PROSPECTS: |
|
|
| Marketing |
|
|
| The
Company has been awarded a contract from M/s. Pakistan Telecommunication
Company Limited, |
|
| Islamabad,
for Rs. 450.50 Million for which the production and supplies are going on.
Out of this |
|
| turnover
the management is expecting a good margin of profit for the company. |
|
|
| Further
orders to the tune of Rs. 150.00 Million are also under process of issue from
M/s. Pakistan |
|
| Telecommunication
Company Limited, Islamabad. |
|
|
| All
these achievements will enable the management to earn profit and hopeful
declare dividend |
|
| Inshallah
in the ensuing year. |
|
|
| Settlement
with Financial Institutions: |
|
|
| All
the debts of PICIC, BEL's consortium & Habib Bank, have been paid,
settled and restructured |
|
| as
per government instruction for the remaining amount of Rs. 18,537,612/-, well
disclosed in this |
|
| report
under Note No. 7.1. |
|
|
| Funds
Injection: |
|
|
| Though
the company is running in loss till this year, the sponsors are fully
co-operating with day |
|
| to
day 'working of the project and also injecting cash whenever, required to the
unit. |
|
|
| This
year also the sponsor have financed the .project from their own resources for
Rs 7.736/- Million |
|
| as
evidence with cash flow in the Annual Report. |
|
|
| Funds
injected by the management on interest free basis shall be saving the company
from high mark- |
|
| up
rate in future as against that paid in the previous years which had been
primarily responsible |
|
| for
the losses suffered in those periods. |
|
|
| General |
|
|
| The
work in ISO '9002 Certification is going on and approximately 75% have been
done. |
|
|
| Compliance
in respect of year 2000 is not applicable to the Project as neither the
operation |
|
| of
Plant is integrated to the Computer .nor the accounts are Computerised in the
office |
|
|
| Authorise
Capital of the company has increased to Rs. 220.00 Million from Rs. 40.00 of |
|
| preceding year. |
|
|
| Issue
of Right Share has also been finalized and will be reported in ensuing half
yearly Un- |
|
| Audited
Account ending December 31, 1999. |
|
|
| Liquidity
Ratio between Current Liabilities to Current Assets have been achieved as
1:0.9 as |
|
| required
for Financing Institution to meet the SBP's requirement. |
|
|
| All
these achievement will lead the company to its betterment in all respect. |
|
|
| Comments
On Auditor's Report: |
|
|
| Auditors
have qualified in their report that the goods were sold at price at below its
cost. our |
|
| satisfactory
explanation appear under Para 3 of the financial results. |
|
|
| This
year also the Auditors have qualified in their report that disclosed Stock of
Rs. 3.00 Million |
|
| could
not be physical verified. In fact, the Stock of short length and pieces
length cables |
|
| available
in 100's of Drum (wooden Reels) laying in open yard out side the shop floor
could |
|
| not
be properly listed out. In this connection it may be noted that in the
previous year the |
|
| amount
of such stock qualified by the Auditors was Rs. 8.0 Million, which has
substantially |
|
| been
reduced to Rs. 3.0 Million. The management is trying its based to solved
these problem |
|
| in
best possible manner. |
|
|
| As
usual this year also the Auditors have commented that the account's have been
prepared |
|
| on
going concern basis. In this respect the management have well highlighted the
prospects |
|
| of
the project in foregoing report in the General Section. |
|
|
| As
the project has now achieved in manifold way in obtaining orders, with future
commitment |
|
| of
the same, reduction in debt Liabilities, re-structuring of Banks Loan for
remaining small |
|
| amount
of Rs. 18.5 Million, and adjustment of borrowing for Rs. 180.00/- Million, in
the Right |
|
| Share
will, definitely bring the project in profit from next year. |
|
|
| It
is commendable that the company for the first time in its history has secured
huge order |
|
| of
Rs. 450.0 Million, which will hopefully contribute good margin and shall
improve over all |
|
| performance. |
|
|
| F.
Staff Relation: |
|
|
| Relation
with staff remain co-ordial and the directors recognize the valuable
contribution made by |
|
| employees
at all level in the business. |
|
|
| G.
Pattern Of Shareholders: |
|
|
| The
pattern of shareholding and categories of share in terms of number and
percent are included |
|
| in
the Annual Report. |
|
|
| H. Directors: |
|
|
| There
is one change in the Board of Directors to appoint and elect an additional
Director as notified |
|
| in
notice of AGM during the current year under the report |
|
|
| I. Auditors |
|
|
| The
present auditors M/s. Rahim Iqbal Rafiq & Company, Chartered Accountants,
retired and offers |
|
| themselves
for re-appointment. |
|
|
|
On behalf of the Board |
|
|
|
RAZA ABDUL AZIZ AL-RAEE |
|
| Dated:
December 08, 1999 |
|
Chief Executive |
|
|
|
| PATTERN
OF SHAREHOLDINGS AS AT 30TH JUNE, 1999 |
|
|
| NUMBER OF |
|
SHARE HOLDING |
|
TOTAL |
|
| SHAREHOLDERS |
FROM |
|
TO |
SHARES HELD |
|
|
| 5500 |
1 |
-- |
100 |
550,000 |
|
| 87 |
101 |
-- |
500 |
30,600 |
|
| 81 |
501 |
-- |
1000 |
65,500 |
|
| 126 |
1001 |
-- |
5000 |
254,300 |
|
| 7 |
5001 |
-- |
10000 |
52,800 |
|
| 1 |
10001 |
-- |
15000 |
15,000 |
|
| 1 |
15001 |
-- |
20000 |
20,000 |
|
| 1 |
20001 |
-- |
25000 |
25,000 |
|
| 1 |
25001 |
-- |
30000 |
27,500 |
|
| 2 |
30001 |
-- |
35000 |
68,000 |
|
| 1 |
40001 |
-- |
45000 |
40,700 |
|
| 1 |
45001 |
-- |
50000 |
50,000 |
|
| 1 |
50001 |
-- |
55000 |
55,000 |
|
| 1 |
55001 |
-- |
60000 |
60,000 |
|
| 1 |
65001 |
-- |
70000 |
69,000 |
|
| 1 |
85001 |
-- |
90000 |
87,300 |
|
| 1 |
90001 |
-- |
95000 |
90,500 |
|
| 1 |
95001 |
-- |
100000 |
99,000 |
|
| 4 |
115001 |
-- |
120000 |
477,000 |
|
| 1 |
125001 |
-- |
130000 |
128,300 |
|
| 1 |
190001 |
-- |
195000 |
190,600 |
|
| 1 |
250001 |
-- |
255000 |
251,000 |
|
| 1 |
290001 |
-- |
295000 |
292,900 |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
|
| 5823 |
|
3,000,000 |
|
| ========== |
========== |
========== |
========== |
========== |
|
|
|
| CATEGORIES
OF SHARE HOLDERS |
|
| AS
AT' 30TH JUNE, 1999 |
|
|
| CATEGORIES
OF |
NUMBER OF |
TOTAL SHARES |
PERCENTAGE |
|
| SHAREHOLDERS |
SHAREHOLDERS |
HELD |
(%) |
|
|
| Individuals |
|
5810 |
1,731,800 |
57.72 |
|
| Investment
Companies |
5 |
672,500 |
22.42 |
|
| Joint
Stock Companies |
6 |
371,100 |
12.37 |
|
| Financial
Institutions |
2 |
224,600 |
7.49 |
|
|
---------- |
---------- |
---------- |
|
|
5823 |
3,000,000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
|
| AUDITOR'S
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Pakistan Telephone Cables Limited
as at June 30, 1999 |
|
| and
the related profit and loss account and statement of changes in financial
position, together with the |
|
| notes
forming part thereof, for the year then ended and we state that we have
obtained all the information |
|
| and
explanation which to the best of our knowledge and belief were necessary for
the purposes of our |
|
| audit
and, after due verification thereof, we report that; |
|
|
| 1.
The Company sold goods to registered parties at a price below its cost price.
These transactions |
|
| have
contributed Rs. 8.157 million into the gross loss suffered by the company. |
|
|
| 2.
Included in work-in-progress (stock-in-trade) are semi processed short length
cables valuing approximately |
|
| Rs.
3.00 million, whose physical verification and valuation was not practically
possible and is based |
|
| on
management representation. |
|
|
| a)
in our opinion, proper books of accounts 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 accounts and are further in accordance with accounting policies
consistently |
|
| applied
except for the changes stated in note 2.7 which we concur; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's
business; |
|
| and |
|
|
| (iii)
the business conducted, investment made and the expenditure incurred during
the year |
|
| were
in accordance with object of the company; |
|
|
| c) Except for the matter in para 1 and 2
above, in our opinion and to the best of our information |
|
| and
according to the explanation given to us, the balance sheet, profit and loss
account and |
|
| the
statement of changes in financial position, together with the notes forming
part thereof, |
|
| 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 June 30, 1999 |
|
| and
of the profit and the changes in financial position for the year then ended;
and |
|
|
| d)
in our opinion "No Zakat was deductible at source under the Zakat and
Ushr Ordinance, |
|
| 1980". |
|
|
| Without
qualifying our opinion we draw attention to the fact that the Company
continue to incur operating |
|
| losses
and as at June 30, 1999, its accumulated loss amounted to Rs. 203.309 million
(1998: Rs. 163.033 million) |
|
| which
has resulted in net capital deficiency. The current liabilities have exceeded
the current assets by |
|
| Rs.
9.007 million'(1998: Rs. 109.01 million). Further due to liquidity
constraints, the capacity remained |
|
| under
utilized and delayed supplies attracted penalties (Note 21 ). The financial
statements of the Company |
|
| have
been prepared on a going concern basis, the validity of which is dependent on
the arrangement of |
|
| working
capital for the contract secured and successful outcome of the matters stated
in (Note 33) through |
|
| optimum
capacity utilization and execution of the said contract in time. |
|
|
|
RAHIM IQBAL RAFIQ &
COMPANY |
|
| Karachi,
Dated: 8th December, 1999 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS ON JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
NOTE |
Rupees |
Rupees |
|
|
| SHARE
CAPITAL |
|
| CAPITAL
AND RESERVES |
|
|
| Authorised |
|
3 |
220,000,000 |
40,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
|
|
| 3,000,000
ordinary shares of Rs. 10/- each |
|
30,000,000 |
30,000,000 |
|
| Accumulated
loss |
|
(203,309,744) |
(163,033,602) |
|
|
---------- |
---------- |
|
|
(173,309,744) |
(133,033,602) |
|
| ADVANCE
FROM SPONSORING DIRECTORS |
|
4 |
146,274,872 |
12,012,691 |
|
| SURPLUS
ON REVALUATION OF |
|
| FIXED ASSETS |
|
6 |
34,581,267 |
34,581,267 |
|
|
| REDEEMABLE
CAPITAL |
|
7 |
-- |
-- |
|
| LONG
TERM LOANS |
|
8 |
47,174,862 |
47,174,862 |
|
| DEFERRED
LIABILITIES |
|
|
|
| Staff gratuity |
|
1,364,222 |
971,653 |
|
|
| CURRENT
LIABILITIES |
|
|
| Short
term finances |
|
9 |
24,035,258 |
122,111,403 |
|
| Current
portion of long term liabilities |
|
10 |
6,439,500 |
6,439,500 |
|
| Creditors,
accrued and other liabilities |
|
11 |
55,621,807 |
54,450,675 |
|
| Book overdraft |
|
-- |
9,000,000 |
|
| Taxation |
|
656,410 |
739,323 |
|
|
---------- |
---------- |
|
|
86,752,975 |
192,740,901 |
|
| CONTINGENCIES
& COMMITMENTS |
|
12 |
|
|
|
---------- |
---------- |
|
|
142,838,454 |
154,447,772 |
|
|
========== |
========== |
|
|
| OPERATING
FIXED ASSETS |
|
13 |
64,956,032 |
70,597,853 |
|
|
| LONG
TERM SECURITY DEPOSITS |
|
137,300 |
128,300 |
|
|
| CURRENT
ASSETS |
|
| Stores
and spares |
|
14 |
797,887 |
527,603 |
|
| Stock in trade |
|
15 |
38,231,699 |
70,396,569 |
|
| Trade
debts - secured |
|
| considered
good |
|
14,986,481 |
209,004 |
|
|
| Short
term investment |
|
-- |
2,000,000 |
|
|
| Advances,
deposits, prepayments and |
|
| other
receivables |
|
16 |
23,475,220 |
10,395,495 |
|
|
|
|
| Cash
and bank balances |
|
17 |
253,835 |
192,948 |
|
|
---------- |
---------- |
|
|
77,745,122 |
83,721,619 |
|
|
---------- |
---------- |
|
|
142,838,454 |
154,447,772 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these financial statements. |
|
|
| RAZA
ABDUL AZIZ AL-RAEE |
|
AQEEL AHMED |
|
| CHIEF
EXECUTIVE |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOE
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
NOTE |
Rupees |
Rupees |
|
|
| Sales |
|
83,910,552 |
42,745,523 |
|
| Cost of sales |
|
(93,691,537) |
(41,040,005) |
|
|
---------- |
---------- |
|
| Gross
profit / (Loss) |
|
(9,780,985) |
1,705,518 |
|
|
| Operating
Expenses: |
|
|
|
| Administration |
|
20 |
5,705,329 |
4,905,940 |
|
| Selling
and distribution |
|
21 |
8,514,264 |
1,496,618 |
|
|
----------- |
----------- |
|
|
(14,219,593) |
(6,402,558) |
|
|
----------- |
----------- |
|
| Operating
(Loss) / profit |
|
(24,000,578) |
(4,697,040) |
|
| Finance
charges |
|
22 |
(17,290,520) |
(15,717,089) |
|
|
----------- |
----------- |
|
|
(41,291,098) |
(20,414,129) |
|
| Other income |
|
23 |
136,809 |
1,545,570 |
|
|
|
----------- |
----------- |
|
|
|
(41,1 54,289) |
(18,868,559) |
|
| Reversal
of liabilities |
|
24 |
1,298,059 |
95,747,777 |
|
|
|
|
|
| Profit
/ (Loss) before taxation |
|
(39,856,230) |
76,879,218 |
|
| Provision
for taxation - minimum tax |
|
|
|
| - Current |
|
(419,912) |
(739,000) |
|
| - Prior |
|
-- |
(323) |
|
|
----------- |
----------- |
|
|
(419,912) |
(739,323) |
|
|
----------- |
----------- |
|
| Profit
/ (loss) after taxation |
|
(40,276,142) |
76,139,895 |
|
| Accumulated
loss brought forward |
|
(163,033,602) |
(239,173,497) |
|
|
----------- |
----------- |
|
| Accumulated
loss carried forward |
|
(203,309,744) |
(163,033,602) |
|
| Earning
per share |
|
30 |
(13.425) |
25.380 |
|
|
| RAZA
ABDUL AZIZ AL-RAEE |
|
AQEEL AHMED |
|
| CHIEF
EXECUTIVE |
|
DIRECTOR |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION (CASH FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
NOTE |
Rupees |
Rupees |
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Profit
/ (logs} before taxation |
|
(39,856,230) |
76,879,218 |
|
| Adjustment for: |
|
|
|
| Depreciation |
|
6,991,386 |
3,924,111 |
|
| Financial
charges |
|
17,290,$20 |
15,717,089 |
|
| Provision
for gratuity |
|
460,780 |
413,492 |
|
| Reversal
of loan and liabilities |
|
(1,298,0.59) |
(9.5,747,77) |
|
| (Grain)/Loss
on sale of fixed assets |
|
8,569 |
(42,076) |
|
|
---------- |
---------- |
|
|
|
|
23,453,196 |
(75,735,161) |
|
|
|
---------- |
---------- |
|
| Operating
(Loss)/profit before working capital changes |
|
(16,403,034) |
1,144,057 |
|
| Changes
in working capital |
|
| Decrease/(Increase)
in current assets |
|
| Store
and spares |
|
(270,204) |
(144,12.5) |
|
| Stock-in-trade |
|
32,164,870 |
(2,647,353) |
|
| Trade debts |
|
(14,777,477) |
11,473,331 |
|
| Advances,
deposits, prepayments and other receivables |
|
(13,079,725) |
(5,709,034) |
|
|
| Increase/(decrease)
in current liabilities |
|
| Creditors,
accrued and other liabilities |
|
20,084,757 |
(5,720,632) |
|
|
---------- |
---------- |
|
|
24,122,141 |
(2,747,813) |
|
|
---------- |
---------- |
|
| Cash
generated from / (used in) operations |
|
7,719,107 |
(1,603,756) |
|
| Payment of tax |
|
502,825 |
(288,050) |
|
