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Asia Board Industries Limited
Annual Reports 2002
CONTENTS
1. Company's Information
2. Notice of Meeting
3. Directors' Report
4. Statement of Compliance with Best Practices of Corporate Governance
5. Auditors' Reports to the Members
6. Balance Sheet
7. Profit and Loss Account
8. Statement of Changes in Equity
9. Cash Flow Statement
10. Notes to the Accounts
11. Pattern of Share Holdings
COMPANY'S INFORMATION
BOARD OF DIRECTORS
Haji Usman Ibrahim (Chairman)
Muhammad Sabir Usman (Managing Director/Chief Executive)
Ghulam Moinuddin Usman
Abdul Qadir Usman
Muhammad Imran Usman
Mrs. Khadija Usman
Mrs. Zarina Sabir
COMPANY SECRETARY
Noor Muhammad Lakhani
AUDITORS
M. YousufAdil Saleem & Company
Chartered Accountants
AUDIT COMMITTEE
Haji Usman Ibrahim (Chairman)
Abdul Qadir Haji Usman (Member)
Muhammad Imran Usman (Member)
BANKERS
Habib Bank Ltd.
Muslim Commercial Bank Ltd.
National Bank of Pakistan
FACTORY
A/9, S.l.T.E., Nooriabad,
District Dadu (Sindh)
NOTICE OF MEETING
NOTICE is hereby given that the Nineteenth Annual Genera! Meeting of Asia Board Industries Limited will be
held at Registered Office of the Company, Central Chambers, Ireland Road, Karachi on Monday, October
28, 2002 at 12:30 p.m. to transact the following business:
1) To confirm the Minutes of the Eighteenth Annual General Meeting held on December 22, 2001.
2) To receive, consider and adopt the audited accounts for the year ended June 30, 2002 together with the
Directors' and Auditors' Reports thereon.
3) To appoint Auditors of the Company for the year 2002-2003 and to fix their remuneration. The retiring
Auditors M/s. M. Yousuf Adil Saleem & Co., Chartered Accountants being eligible, have offered
themselves for re-appointment.
4) To transact any other business with the permission of the Chair.
By Order of the Board
				Noor Muhammad Lakhani
Karachi: September 19, 2002				Company Secretary
NOTES:
1. A member entitled to attend and vote at this meeting may appoint another member as his/her proxy to
attend the meeting and vote instead of him/her. A proxy must be a member of the Company.
Proxies in order to be effective must be received at the Registered Office of the Company not less than
48 hours before the meeting.
2. The share transfer book of the Company will be closed from October 20, 2002 to October 28,2002 (both
days inclusive).
3. Members are requested to notify any change in their addresses.
DIRECTOR'S REPORT
Your Directors present this 19th Annual Repot alongwith the Audited Accounts for the year ended June 30,
2002
SALES AND FINANCIAL RESULTS
The sales during the year under review amounted to Rs. 69.765 million as against Rs. 62.751 million in the
last year.
The gross profit during the year under review was Rs. 7.653 million as against Rs. 7.429 million in the last
year. The profit before taxation was Rs. 1.853 million as against Rs. 1.248 million in the previous year.
LIQUIDITY PROBLEM
It was mentioned in our last year's report that your Company came under heavy liquidity burden due to
repayment of the instalments of bank loan.
It was further mentioned that to bring the Company out of financial crisis, directors and associated person
provided interest-free loan amounting to Rs. 20 Million in the year 1997-98 which is still outstanding. To
overcome the liquidity problem your Company had to borrow short term loan amounting to Rs. 3 Million from
associated person in the year 1999-2000 and Rs. 4 Million from our director and an associated person in the
year 2000-2001. Moreover the Company had to arrange running finance facility from Habib Bank Ltd.
The last instalments of the long term banks loan have been repaid during the year. However, the borrowings
from directors and associated persons, and bank were outstanding as on June 30, 2002 as under:
Interest-free long term loan from directors and associated person Rs. 20,000,000
Interest bearing short term loan from of director and associated persons Rs. 7,000,000
Running Finance facility of Habib Bank Ltd.. Rs. 6,836,634
DIVIDEND
Due to accumulated loss brought forward and liquidity problem your Directors are not in a position to
recommend any dividend.
AUDITORS
The present auditors M/s. M. YousufAdil Saleem & Co., Chartered Accountants, retire and being eligible
offer themselves for re-appointment.
STATEMENT ON CORPORATE AND FINANCIAL REPORTING FRAMEWORK
(a) The financial statements prepared by the management of our company present fairly its state of
affairs, the result of its operations, cash flow and changes in equity.
(b) Proper books of account of our company have been maintained
(c) Appropriate account policies have been consistently applied in preparation of financial statements and
accounting estimates are based on reasonable and prudent judgment.
(d) International Accounting Standards, as applicable in Pakistan, have been followed in preparation of
financial statements and any departure therefrom has been adequately disclosed.
(e) The system of internal control, which was in place, is being continuously reviewed. The process of
review will continue with the objective to further improve the existing system.
(f) There are no significant doubts upon the company's ability to continue as a going concern.
(g) There has been no material departure from the best practices of corporate governance, as detailed in
the listing regulations.
(h) During the year under review four meetings of the Board of Directors were held which were attended
by all the Directors.
(i) Due to accumulated loss the Company is not in a position to declare any dividend.
0) No statutory payment on account of taxes, duties, levies and charges are outstanding.
(k) The pattern of shareholding is annexed.
FUTURE PLANS & PROSPECTS
Your Directors are trying to make the project viable but major repairs and replacement of machinery
can not be carried out in the given circumstances. A formal letter has recently been sent to the Karachi
Stock Exchange that the directors intend to buy back the shares of minority shareholders and apply for
DE-LISTING from the Karachi Stock Exchange.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation of the enthusiasm, loyalty and devotion of duty shown by
the workers and staff at all levels.
Directors also acknowledge the cooperation of the bankers
On behalf of the Board of Directors
Karachi : September 19, 2002			MUHAMMAD SABIR USMAN
			Managing Director / Chief Executive
Statement of Compliance with
Best Practices of Corporate Governance
The Company is in process of implementing of all facets of the Code of Corporate Governance issued by the
Karachi Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange and the Board of
Directors feels pleasure in stating that provisions of the Code, relevant for the year ended June 30, 2002,
have been duly complied with.
Review Report to the Members on Statement of Compliance
with Best Practices of Code of Corporate Governance
We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate
Governance prepared by the Board of Directors of ASIA BOARD INDUSTRIES LIMITED to comply with the
relevant Listing Regulations of the Karachi, Lahore and Islamabad Stock Exchanges where the Company is
listed.
The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of
the Company. Our responsibility is to review, to the extent where such compliance can be objectively
verified, whether the Statement of Compliance reflects the status of the Company's compliance with the
provisions of the Code of Corporate Governance and report if it does not. A review is limited primarily to
inquiries of the company personnel and review of various documents prepared by the Company to comply
with the Code.
As part of our audit of financial statements we are required to obtain an understanding of the accounting and
internal control systems sufficient to plan the audit and develop an effective audit approach. We have n A
carried out any special review of the internal control system to enable us to express an opinion as to whether
the Board's statement on internal control covers all controls and the effectiveness of such internal controls.
Based on our review, nothing has come to our attention, which causes us to believe that the Statement of
Compliance does not appropriately reflect the Company's compliance, in all material respects, with the best
practices contained in the Code of Corporate Governance as applicable to the Company for the year ended
June 30, 2002.
Karachi.				M. Yousuf Adil Saleem & Co.
Date : September 19, 2002				Chartered Accountants
We have audited the annexed balance sheet of ASIA BOARD INDUSTRIES LIMITED as at June 30, 2002
and the related profit and loss account, statement of changes in equity and cash flow statement 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, statement of changes in equity and cash flow statement
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 June 30, 2002 and of the profit, its cash flows and changes in equity for the year then
ended;and
d. in our opinion, no zakat was deductible at source under the Zakat and Ushr Ordinance, 1980
(XVI 11 of 1980).
Karachi.			M. YousufAdil Saleem & Co.
Date : September 19, 2002			Chartered Accountants
BALANCE SHEET
			Note	2002	2001
				Rupees	Rupees
SHARE CAPITAL
Authorised
4,000,000 Ordinary shares  of Rs. 10/=each				40,000,000	40,000,000
Issued, subscribed and paid up
1,852,800 Ordinary Shares of
Rs. 10/= each fully paid in cash				18,528,000	18,528,000
Accumulated loss				18,269,718	18,129,027
LONG TERM LOANS			3	20,000,000	20,000,000
DEFERRED LIABILITY
Staff gratuity			4	1,054,122	1,005,475
CURRENT LIABILITIES
Short term borrowings			5	13,836,634	11,260,042
Current portion of long term loans				-	4,406,250
Creditors, accrued and other liabilities			6	5,078,826	3,928,123
Taxation				720,584	504,408
COMMITMENTS			7
				41,948,448	41,503,271
The annexed notes from 1 to 27 form an integral part of these accounts.
				Haji Usman Ibrahim
				Chairman
			Note	2002	2001
				Rupees	Rupees
OPERATING ASSETS				28,331,424	29,960,990
LONG TERM DEPOSITS				197,870	57,670
CURRENT ASSETS
Stores, spares and loose tools			9	5,967,756	5,034,739
Stock in trade			10	4,135,912	3,855,351
Loans and advances			11	1,168,571	1,389,755
Short term deposits				159,000	117,200
Short term prepayments				322,953	256,625
Other receivables			12	348,895	465,444
Cash and bank balances			13	1,316,067	365,497
				41,948,448	41,503,271
Muhammad Sabir Usman			Muhammad Imran Usman
Chief Executive			Director
			Note	2002	2001
				Rupees	Rupees
Sales			14	69,764,664	62,751,302
Cost of goods sold			15	62,111,826	55,322,788
Gross Profit				7,652,838	7,428,514
Operating expensis
Administration			16	3,730,144	487,319
Selling			17	278,517	542,920
				4,008,661	4,030
Operating Profit				3,644,177	3,398,275
Other Income			18	145,178	-
				3,789,355	3,398,275
Financial Charges			19	1,838,516	2,084,515
Worker's Profit Participation Fund				97,766	65,853
				1,936,282	2,150,368
Profit Before Taxation				1,853,073	1,247,907
Taxation
Current				648,576	432,400
Prior Year's				345,188	514,671
				993,764	947,071
Profit After Taxation				859,309	300,836
Accumulated Loss Brought Forward				18,129,027	18,429,863
Accumulated Loss Carried Forward				17,269,718	18,129,027
Earning Per Share			20	0.46	0.16
The annexed notes from 1 to 27 form an integral part of these accounts.
Haji Usman Ibrahim		Muhammad Sabir Usman		Muhammad Imran Usman
Chairman		Chief Executive		Director
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED JUNE 30, 2002
			ISSUED,
			SUBSCRIBED	ACCUMULATED	TOTAL
			AND	LOSS
			PAIDUP CAPITAL
Balance at July 01, 2000			18,528,000	18,429,863	98,137
Profit for the year			-	300,836	300,836