Tariq Glass Industries Limited - Annual Reports 2002-03- PakSearch.com

TARIQ GLASS INDUSTRIES LIMITED

ANNUAL REPORT 2003

CONTENTS

Company Information

Notice of Annual General Meeting

Directors' Report

Statement of Compliance

Auditors' Report to the Members

Auditors' Review Report to the Members on

Statement of Compliance

Balance Sheet

Profit And Loss Account

Cash Flow Statement

Statement of Changes in Equity

Notes to the Accounts

Pattern of Shareholdings

Categories of Shareholders

COMPANY'S INFORMATION

BOARD OF DIRECTORS

CHAIRMAN &

MANAGING DIRECTOR

MR TARIQ BAIG

DIRECTORS:

MR OMER BAIG

MRS NAIMA TARIQ

MR MANSOOR IRFANI

MR EHSAN UL HAQ

MR DAVID JULIAN

MR SYEDTUFAILHUSSAIN

NOMINEE DIRECTOR IPI

MR MUJAHID ESHAI

SECRETARY

MR WAQAR ULLAH, FCA

AUDIT COMMITTEE

MR OMER BAIG CHAIRMAN

MR EHSAN UL HAQ MEMBER

MR DAVID JULIAN MEMBER

AUDITORS

IJAZTABUSSUM&CO

CHARTERED ACCOUNTANTS

ISLAMABAD

REGISTERED OFFICE

49 - BRIDGE COLONY LAHORE CANTT

UAN 042-111-34-34-34

FAX 042- 6672933 & 6686477

E MAIL teeqlas(2>brain net pk

LEGAL ADVISOR

MUBASHAR LATIF AHMAD

LAHORE

TAX CONSULTANTS

YOUSAF ISLAM ASSOCIATES "

LAHORE

INFORMATION TECHNOLOGY

CHARTAC BUSINESS SERVICES (PVT) LTD

CONSULTANTS

LAHORE

BANKERS

NATIONAL BANK OF PAKISTAN

HABIB BANK LTD

PICIC COMMERCIAL BANK LTD

MUSLIM COMMERCIAL BANK LTD

WORKS

33-KM LAHORE/SHEIKHUPURA ROAD,

TEL (042) 7925652, (04931 ) 55441 - 3

FAX (04931)53912

NOTICE OF MEETING

Notice is hereby given that the 25 Annual General Meeting of the members of the Company will be held

on Thursday the October 30, 2003 at 04:30 PM at the Defense Services Officers' Mess, 71 - Tufail Road.

Lahore Cantt to transact the following business:

1. To confirm the minutes of the 24^th Annual General Meeting of the members held on October 26,

2002

2. To receive and adopt the audited accounts of the Company for the year ended June 30, 2003,

comprising Balance Sheet, Profit and Loss Account and Reports of the Auditors and Directors

thereon.

3. To declare final cash dividend. The Directors have recommended 10% dividend for the year

ended June 30, 2003.

4. To appoint Auditors of the company for the year ending June 30, 2004 and fix their remuneration.

5. To transact any other business with the permission of the chairman.

BY ORDER OF THE BOARD

October 06, 2003 (WAQAR ULLAH)

Lahore CORPORATE SECRETARY

NOTES

a. The share transfer books of the Company will remain closed from October 24, 2003 to

October 30, 2003 (both days inclusive). Transfer received in order upto the close of business

on October 23, 2003 at registered office of the company at 49-Bridge Colony Lahore Cantt

will be entitled to dividend and to affect the voting rights at the Annual Geneni Meeting

b. A member entitled to attend and vote at the meeting may appoint another member as his/her

proxy to attend and vote. Votes may be given personally or by proxy or by attorney or in case

of corporation by representative. The instrument of proxy duly executed should be lodged at

the Registered Office of the Company not later than 48 hours before the time of meeting

c. Shareholders whose shares are registered in their account / sub-account / group account

with Central Depository System (CDS) are requested to bring original NIC along with their

account number in CDS and participants ID number for verification. In case of appointment of

proxy by such account holders it must be accompanied with participants, ID No. and Account

/ Sub-account No. along with the attested photocopies of NIC or the Passport of the

beneficial owner. Representatives of Corporate Members should bring the usual documents

required for such purposes.

d. The shareholders are requested to notify the Company of the change in their address, if any.

DIRECTORS' REPORT

The directors are pleased to present the 25 Annual Report along with the audited Financial Statement

of the company for the year ended June 30, 2003 Your company has completed its life of 25 years an<

also present management completed its 1^st decade in the year.

Some Significant Achievements

It is apparent from the financial data that the earning per share EPS has narrowed down to Re. 0.35 fron

Rs 3.58 yet with the blessings of Almighty Allah the year under review was another milestone in thi

history of your company. We would like to share with you some of the achievements attained during thi

year.

• One of the two glass furnaces was rebuilt and successfully put into operations from December 2002.

• Launched new light weight products under the brand name "NOVA" in the market.

• Second time in the history of the company green container was manufactured and this wa

acknowledged with appreciation in the beverage industry.

Financial Results

The financial results for the year under review are not healthy because of some of the following reasons.

• One of the two furnaces was closed down for rebuild purposes and no manufacturing activity from

could be carried out for a period of four months.

• Natural gas supply was interrupted due to sabotage in the main gas supply line of the Sui Norther

Gas Pipelines Company Limited and supply was resumed after a lapse of little less than a montr

where production from both the furnaces was stopped.

• The minimum required temperature of the furnaces was maintained during the gas supply stoppag

period with furnace oil which entailed an additional cost with no production.

• The desired efficiencies of light weight glass manufacturing machine could not be achieved due t

non availability of experts and technical data of this kind of machine in Pakistan

• The selling prices of containers remained under pressure resulting in squeezing of profit margins

Despite the above mentioned factors the management of your company maintained the momentum of

profit earnings but the earning per share has been reduced.

A brief summary of the financial results for the year under review is stated as under:

Rupees

Profit for the year before taxation:

9,180,030

Taxation

5,686,319

3,493,711

Un-Appropriated Profit Brought Forward

46,297,481

Profit available for appropriation

49,791,192

Proposed Dividend

-10,000,000

Un-Appropriated profit C/F

39,791,192

Earning Per Share

0.35

Corporate and Financial Reporting Framework

The directors also confirm compliance with the Corporate and Financial Reporting Framework of the

SECP's Code of Corporate Governance for the following:

• The financial statements present fairly its state of affairs, the results of its operations, cash flows and

changes in equity.

• Proper books of accounts of the company have been maintained.

• Appropriate accounting policies have been consistently applied in preparation of financial statements

and accounting estimates are based on reasonable and prudent judgment.

• International Accounting Standards, as applicable in Pakistan, have been followed in preparation of

financial statements and departures there from, if any, has been adequately disclosed.

• The system of internal control is sound in design and has been effectively implemented and

monitored.

• There are no significant doubts upon the company's ability to continue as a going concern.

• There has been no material departure from the best practices of Corporate Governance as detailed in

the Listing Regulations.

• Key financial data in given in note no. 37

Board of Directors

During the year two of the board members resigned due to their other preoccupations. Casual vacancy

was filled by Mr. David Julian and Mr. Syed Tufail Hussain. The board appreciates the hard work and

devotion put in by the out going directors.

During the year 16 board meetings were held and the number of meetings attended by each Director is

given hereunder:

1. Mr. Tariq Baig

16

2 Mr. Omer Baig

16

3 Mrs. Naima Tariq

14

4. Mr. Mansoor Irfani

16

5. Mr. Khuram Baig

11

6. Mr. Ehsan Ul Haq

16

7. Mr. Zulfiqar Jaffer

7

8. David Julian

4

9. Mr. Syed Tufail Hussain

4

Audit Committee

The Board constituted an audit committee comprising the following:

1. Mr. Omer Baig

Chairman

2. Mr. Ehsan Ul Haq

Member

3. Mr. David Julian (Co-opted vice Zulfiqar Jaffar)

Member

Dividend

Your company has maintained its policy of paying returns to the stakeholders and your directors

recommend the payment of cash dividend at the rate of 10% (2002: 12%) for the year ended June 30

2003

Future Outlook

Due to excessive supply of glass bottles the selling prices remained under pressure and severe

competition is foreseen both with the locally manufactured and imported containers after reduction in the

import duties. The management of your company is well aware of this and various strategies have been

devised to face the challenging situation. More emphasis is placed on tableware products by improving its

efficiencies, quality and value addition.

The negotiations with the suppliers for the import of another light weight glass making machine and a

double gob press machine have been finalized. It is expected that production from these machines will be

available for sale by the end of the current financial year.

In order to explore the export markets of tableware the marketing team has visited various countries, so

far response is very encouraging.

Auditors

The external auditors M/s Shahid Sami & Co. Chartered Accountants appointed by the members in the

annual general meeting held on October 26, 2002 resigned during the year. The board of directors in their

meeting held on June 25, 2003 filled the casual vacancy by appointing M/s Ijaz Tabussum & Company

Chartered Accountants, as auditors of the company for the year ended June 30, 2003.

The present auditors M/s Ijaz Tabasumm & Co. Chartered Accountants have completed their assignment

for the year 2003 and retire at the conclusion of the 25^th Annual General Meeting Being eligible have

offered themselves for re appointment. However, the company has received a notice from a shareholder

to appoint M/s Taseer Hadi Khalid & Co., Chartered Accountants as Auditors of the Company for the

financial year ending June 30, 2004.

Pattern of Shareholdings

The pattern of shareholding and categories of shareholders are annexed.

Acknowledgement

We wish to place on record our gratitude to the valued clients, regulatory authorities, banks and financial

institutions and also the shareholders for their continued support We also appreciate the efforts and

dedication shown by the staff for managing the company's affairs successfully

Statement of Compliance with the Best Practices Of

Corporate Governance to the Members

The Board of Directors of the company are pleased to confirm that all the requirements of the Code of

Corporate Governance, issued by the Securities and Exchange Commission of Pakistan and adopted by

the Stock Exchanges have been duly complied with and implemented by the company.

AUDITOR'S REPORT TO THE MEMBERS

We have audited the accompanying balance sheet of TARIQ GLASS INDUSTRIES LIMITED (the

Company) as of June 30, 2003, and the related profit and loss account, the statement of cash flows, and

the 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

controls, 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 International Standards on Auditing, as applicable in

Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free of any material misstatement. An audit includes

examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.

An audit also includes assessing the accounting policies and significant estimates made by the

management, as well as evaluating the overall financial statements' presentation. We believe that our

audit provides a reasonable basis for our opinion and, after due verification, we report as under:

(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, except for the change as stated in the

note 2.6 to the financial statements with which we concur;

ii. The expenditure incurred during the year was for the purpose of the Company's

business; and

iii. The business conducted, investments made and 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, the profit and loss account, the statement of cash flows, and the

statement of changes in equity, together with the notes forming part thereof conform with

approved International Accounting Standards, as applicable in Pakistan, and, give the

information required by the Companies Ordinance, 1984, in the manner so required and,

respectively, give true and fair view of the state of the Company's affairs as at June 30, 2003,

and of the profits, its cash flows and changes in equity for the year then-ended;

d) In our opinion, Zakat deductible at source, if any, under the Zakat and Ushr Ordinance, 1980

(XVIII of 1980) was deducted by the Company and deposited in the Central Zakat Fund

established under section 7 of that Ordinance.

ISLAMABAD IJAZ TABUSSUM & CO.,

Date: 6-10-2003 Chartered Accountants

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 M/s Tariq Glass Industries Limited comply

with the Listing Regulations of the Karachi and Lahore Stock Exchanges where the Company 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 not 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 effective as at June 30, 2003.

DATE: 6-10-2003 , IJAZ TABUSSUM & CO.

ISLAMABAD CHARTERED ACCOUNTANTS

BALANCE SHEET

NOTE

2003

2002

RUPEES

SHARE CAPITAL AND RESERVES

Share Capital

3

100,000,000

Accumulated Profit

39,791,190

46,297,481

139,791,190

146,297^481

DEBENTURES AND LONG TERM LOANS

Secured

4

234,999,831

17,538,299

Un Secured

5

130,150,000

100,000,000

153,649,983

117,538,299

LIABILITIES AGAINST ASSETS SUBJECT TO

FINANCE LEASE

6

13,718,320

18,503,813

DEFERRED LIABILITIES

7

18,650,332

16,557,820

CURRENT LIABILITIES

Short term borrowings

8

56,946,869

..... 29^503J355

Current maturity of long term loans & debentures

9

34,774,563

44,109,058

Creditors, accruals & other liabilities

10

103,390,702

145,497,856

Provision for taxation

2,595,257}

6,177,807

Dividends

28

11,027,140

4,993,004

208,734,531

230,280,780

CONTINGENCIES & COMMITMENTS

11

534,544,356

529,178,193

These accounts should be read in conjunction with the annexed notes which form an integral part thereof.

Auditors' report to the members is annexed

October 4, 2003 TARIQ BAIG

Lahore CHAIRMAN & MANAGING DIRECTOR

AS AT JUNE 30, 2003

NOTE

2003

2002

RUPEES

PROPERTY AND ASSETS

FIXED ASSETS - Tangible

OWNED ASSETS

12

301,570,203

241,720,516

LEASED ASSETS

13

22,988,336

42,165,495

CAPITAL WORK IN PROGRESS

14

-

3,766,705

LONG TERM SECURITY DEPOSITS

15

5,700,475

7,253,050

DEFERRED COSTS

16

-

964,900

CURRENT ASSETS

Stores and spares

17

114,397,484

132,085,815

Stock in trade

18

50,924,809

43,401,638