| Shabbir Tiles and Ceramics Limited |
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| Annual Reports 2002 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Meeting |
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| Directors'
Report |
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| Auditor's Report
on Statement of Compliance with |
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| Best
Practices of Code of Corporate Governance . |
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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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| Statement of Changes in Equity |
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| Notes to the Financial
Statements |
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| Performance of Last Six Years |
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| Pattern
of Shareholdings |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
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| RAFIQ M. HABIB |
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Chairman |
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| ALIREZA
M. ALLADIN |
Chief Executive |
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| ALI S. HABIB |
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| ABDULHAI
M. BHAIMIA |
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| KERSI D. KAPADIA |
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| MANSOOR G. HABIB |
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| NAZIM F. HAJI |
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| AUDIT COMMITTEE |
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| MANSOOR G. HABIB Chairman |
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| KERSI
D. KAPADIA |
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| NAZIM F. HAJI |
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| COMPANY
SECRETARY |
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| SHABBIR ABBAS |
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| AUDITORS |
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| Ford, Rhodes, Robson, Morrow |
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| Chartered Accountants |
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| BANKERS |
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| ABN AMRO Bank N.V. |
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| Bank AL Habib Limited |
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| Habib
Bank Limited |
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| Habib Bank A. G. Zurich |
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| Metropolitan Bank Limited |
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| Muslim Commercial Bank Limited |
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| National Bank of Pakistan |
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| Standard
Chartered Bank |
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| KARACHI DISPLAY CENTRE |
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| & SALES OFFICE |
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| Stile
House, 1st & 2nd Floor, Plot No. 15-C & 17-C, |
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| Zamzama
Commercial Lane, Phase V, |
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| Defence
Housing Authority, Karachi. |
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| Phones
: (021) 5866001-2, 5871753, 5872630, 5820962 |
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| LAHORE
SALES OFFICE |
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| FB-2,
Second Floor, Awami Complex, Usman Block, |
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| New
Garden Town, Lahore. |
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| Phones
: (042)5839982, 5864430 & 5864211 |
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| ISLAMABAD SALES OFFICE |
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| Plot No. H-226, Street No. 7, |
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| Industrial Area, Sector
1-9, Islamabad. |
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| Phones:
(051) 4432019 & 4432976 |
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| PESHAWAR
SALES OFFICE |
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| Hall No. 10, Fawwad Plaza, |
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| Jahangirabad, Jamrud Road,
Peshawar. |
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| Phone:(091)843750 |
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| MULTAN
SALES OFFICE |
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| Office No. 153, Mall Plaza, |
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| Multan
Cantt. |
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| Phone: (061)546439 |
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| REGISTRARS AND SHARE |
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| TRANSFER
OFFICE |
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| Noble Computer Services (Pvt.)
Ltd., |
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| 14, Banglore Town Housing
Society, |
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| Main Sharea Faisal, Karachi. |
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| Phones:
(021)4546978, 4520121 |
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| NOTICE OF MEETING |
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| NOTICE
is hereby given that the Twenty-Fourth Annual General Meeting of the Company
will be held |
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| at
the auditorium of Finance & Trade Centre, Shahrah-e-Faisal, Karachi on
Monday, the 28th |
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| October,
2002 at 2:30 p.m. to transact the following business : |
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| ORDINARY
BUSINESS |
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| 1. To confirm the minutes of the Twenty-Third
Annual General Meeting held on 26th December, |
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| 2001 |
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| 2. To receive, consider and adopt the audited
accounts of the Company for the year ended 30th |
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| June,
2002 alongwith the reports of the Directors and Auditors thereon. |
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| 3. To approve the payment of dividend to the
shareholders @ 25% as recommended by the |
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| Directors. |
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| 4. To appoint auditors for the year ending
30th June, 2003 and fix their remuneration. |
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| SPECIAL BUSINESS |
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| To
consider and pass the following resolution as a special Resolution: |
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| RESOLVED
that the Article 92 of The Articles of Association be deleted and substituted
as under: |
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| "The
remuneration of a Director, shall, from time to time be determined by the
Board of Directors and |
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| unless
otherwise determined shall not exceed Rs. 500/- per meeting at which the
Director shall be |
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| present.
The Directors shall be paid such travelling, boarding lodging and other
expenses properly |
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| incurred
by them in or about the performance of their duties or business if any of
them has to come |
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| to
attend the Board meeting of the Company from outstation. |
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| By Order of the Board |
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| SHABBIR ABBAS |
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| Company Secretary |
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| Karachi
: 25th September, 2002. |
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| NOTES: |
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| 1. The share transfer books of the Company
will be closed from 17th October, 2002 to 28th |
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| October,
2002 (both days inclusive). Transfers received in order at the office of the
Company's |
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| Share
Registrars, M/s. Noble Computer Services (Pvt.) Ltd., 14, Banglore Town
Housing |
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| Society,
Sharea Faisal, Karachi, at the close of business on 16th October, 2002 will
be treated |
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| in
time for the purpose of payment of cash dividend to transferees. |
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| 2. A member eligible to attend and vote at
the meeting may appoint another member as his/her |
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| proxy
to attend and vote on his/her behalf. Proxies to be effective must be
received by the |
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| Company
not less than 48 hours before the time for holding of the meeting. |
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| 3. FOR CDC ACCOUNT HOLDERS |
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| (i)
Account holders and sub-account holders and/or the person whose securities
are in group |
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| account
and their registration details are uploaded as per the regulations who wish
to attend |
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| the
Annual General Meeting shall authenticate his/her identity by showing his/her
original |
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| National
Identity Card (NIC) or original passport in case of non-resident and in case
of proxy |
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| must
also enclose attested copy of his/her NIC or passport. |
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| (ii)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen |
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| signature
of the nominee shall be produced at the time of the meeting and in case of
proxy the |
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| said
document shall be submitted (unless it has been provided earlier) alongwith
proxy form. |
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| 4. Members are requested to communicate to
the Company or the Share Registrars to the |
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| Company
of any change in their address. |
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| Statement
under section 160 of the Company Ordinance, 1984. |
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| Substitution
of Article 92 of the Articles of Association is necessitated as due to the
abolition of |
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| Controller
of Capital Issue Act, the approval in AGM is not required. The Board can
perform this |
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| function
under the Companies Ordinance, 1984. |
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| TWENTY-FOURTH REPORT OF THE
DIRECTORS |
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| FOR
THE YEAR ENDED 30TH JUNE, 2002 |
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| The
Directors have pleasure in presenting their report alongwith the audited
accounts of the |
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| Company
for the year ended 30th June, 2002. |
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| Turnover
of the Company for the year under review was Rs. 578.012 million. This
reflects a growth |
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| of
11.21% over the same period last year. The contributory factor being the
volume and not the |
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| selling
price, which remained under enormous pressure due to keen competition. Gross
profit |
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| declined
due to sharp rise in utilities cost etc. and lower average selling price. |
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| FINANCIAL
RESULTS |
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| Profit
after taxation for the year under review amounted to Rs. 43.281 million as
against Rs. 49.595 |
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| million
for the previous year. Details of the appropriations recommended by the
Directors are as |
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| under: |
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2002 |
2001 |
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(Rs. In 000's) |
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| Profit before taxation |
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66,840 |
76,062 |
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| Less
: Taxation - Current |
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23,000 |
25,000 |
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| - Prior |
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(1,249) |
(1,544) |
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| - Deferred |
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1,808 |
3,011 |
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| Profit after taxation |
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43,281 |
49,595 |
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| Unappropriated
profit brought forward |
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718 |
683 |
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| Available
for appropriation |
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43,999 |
50,278 |
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| APPROPRIATIONS |
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| Proposed
dividend @ 25% (2001 : 25%) |
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21,560 |
21,560 |
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| Transfer
to general reserve |
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22,000 |
28,000 |
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43,560 |
49,560 |
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| Unappropriated
profit carried forward |
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439 |
718 |
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| Earning
per Share: Earning per share for the year ended June 30, 2002 comes to Rs.
2.51 as |
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| compared
to Rs. 2.88 in the preceding year. |
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| CORPORATE
GOVERNANCE |
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| We
are pleased to report that the Company has taken necessary measures to comply
with the |
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| provisions
of the Code of Corporate Governance as incorporated in the Listing Rules of
the Stock |
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| Exchanges. |
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| We
give below a statement in accordance with the corporate and financial
reporting frame work: |
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| a.
The financial statements, prepared by the management of the company, present
fairly its state |
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| of
affairs, the result of its operations, cash flow statement and statement of
changes in equity. |
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| b.
Proper books of account of the Company have been maintained. |
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| c.
Appropriate accounting policies have been consistently applied in preparation
of financial |
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| statements
and accounting estimates are based on reasonable and prudent judgement. |
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| d.
International Accounting Standard, as applicable in Pakistan, have been
followed in preparation |
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| of financial statements. |
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| e.
The system of internal control, which was in place, is being continuously
reviewed by internal |
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| audit
and other such procedures. The process of review will continue with the
objective to further |
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| improve. |
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| f.
There are no significant doubts about the Company's ability to continue as a
going concern. |
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| g.
There has been no material departure from the best practices of corporate
governance as |
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| detailed
in the listing regulations. |
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| h.
Key operating and financial data of the Company in summarized form is annexed
hereto. |
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| i.
Outstanding taxes and levies have been detailed in Note 19 and 20.1.2 to the
annexed financial |
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| statements. |
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| j.
The value of investments of Provident Fund stood at Rs. 19.020 million as on
June 30, 2002 |
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| (unaudited)
and Rs. 19.430 million as on June 30, 2001 (audited) |
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| k.
During the year three meetings of the Board of Directors were held which were
attended by the |
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| Directors
as indicated below: |
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Number of Meetings
attended |
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| Mr. Rafiq M. Habib |
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3 |
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| Mr.
Ali S. Habib/Mr.AQ. Mogri (Alternate) |
3 |
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| Mr. Alireza M. Alladin |
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3 |
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| Mr.
Abdul Hai M. Bhaimia |
2 |
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| Mr. Kersi D. Kapadia |
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3 |
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| Mr. Mansoor G. Habib |
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3 |
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| Mr. Nazim F. Haji |
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3 |
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| Leave
of absence was granted to a director who could not attend a meeting. |
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| FUTURE PROSPECTS |
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| Initiative
of the Government to improve the tax collection system based on the
principles of equity |
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| and
reasonableness is bound to restore investors' confidence |
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| The
Company will continue to pursue its strategy of exploring new avenues for its
products and |
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| seeking
profitable opportunities despite impending pressure of slashing of duties on
imported tiles |
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| under the WTO regime. |
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| EMPLOYEE
RELATIONS |
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| The
industrial relations climate remained cordial and satisfactory. The agreement
with collective |
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| bargaining
agents was negotiated and signed for a period of two years to end December
31, 2003. |
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| ACKNOWLEDGEMENT |
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| In
the end, we wish to express our thanks to all our customers for their
patronage and goodwill. We |
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| appreciate
the support received from the bankers, shareholders and other stakeholders
who continue |
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| to
repose trust in the Company. We thank our team of dedicated executives,
managers, supervisors |
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| and
workers for their hard work in achieving optimum results. |
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| On behalf of the Board |
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| ALIREZA
M. ALLADIN |
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| Chief Executive |
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| Karachi
: 16th September, 2002. |
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| REVIEW
REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE WITH |
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| BEST
PRACTICES OF CODE OF CORPORATE GOVERNANCE |
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| We
have reviewed the Statement of Compliance with the best practices contained
in the |
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| Code
of Corporate Governance prepared by the Board of Directors of Shabbir Tiles
and |
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| Ceramics
Limited to comply with the Listing Regulation No. 37 of the Karachi
Stock |
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| Exchange
(Guarantee) Limited. Chapter XIII of the Lahore Stock Exchange
(Guarantee) |
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| Limited
and Chapter XI of the Islamabad Stock Exchange (Guarantee) Limited where
the |
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| company is listed. |
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| The
responsibility for compliance with the Code of Corporate Governance is that
of the |
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| Board
of Directors of the Company. Our responsibility is to review, to the extent
where such |
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| compliance
can be objectively verified, whether the Statement of Compliance reflects
the |
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| status
of the Company's compliance with the provisions of the Code of Corporate
Governance |
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| and
report if it does not. A review is limited primarily to inquiries of the
Company personnel |
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| and
review of various documents prepared by the Company to comply with the Code. |
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| As
part of our audit of financial statements we are required to obtain an
understanding of |
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| the
accounting and internal control systems sufficient to plan the audit and
develop an |
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| effective
audit approach. We have not carried out any special review of the internal
control |
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| system
to enable us to express an opinion as to whether the Board's statement on
internal |
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| control
covers all controls and the effectiveness of such internal controls. |
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| Based
on our review, nothing has come to our attention which causes us to believe
that the |
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| Statement
of Compliance does not appropriately reflect the Company's compliance, in
all |
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| material
respects, with the best practices contained in the Code of Corporate
Governance |
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| as
applicable for the period from May 2, 2002 to June 30, 2002. |
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| Karachi : 16th September, 2002 |
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| FORD,RHODES,
ROBSON,MORROW |
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| Chartered Accountants |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of SHABBIR TILES AND CERAMICS LIMITED
as at |
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