| Fecto Cement Limited |
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| Annual
Report 2001 |
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| CONTENTS |
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| Corporate
Information |
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| Notice
of Meeting |
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| Directors'
Report |
|
| Pattern
of Shareholding |
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| Auditors'
Report |
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| Balance Sheet |
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|
| Profit
& Loss Account |
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| Cash
Flow Statement |
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| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
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|
|
| CORPORATE
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
CHAIRMAN |
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|
Mr. Mohammed Asad Fecto |
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|
CHIEF EXECUTIVE |
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|
Mr. Mohammed Yasin Fecto |
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|
DIRECTORS |
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Mr. Ghulam Mohammed A.
Fecto |
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Mr. Mohammed Ilyas Khan |
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Mr. Muhammad Nasim Khan |
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|
Mr. Muhammad Umer Memon |
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Mr. Safdar Abbas Morawala |
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Mr. A. Rauf Chandio |
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Mr. Majeedullah Hussaini |
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|
Mr. Abdul Jaleel Shaikh |
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| SECRETARY |
|
Mr. Abdul Aleem, FCA |
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| AUDITORS |
|
Taseer Hadi Khalid &
Co. |
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|
Chartered Accountants |
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|
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|
Rahim Iqbal Rafiq &
Company |
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|
Chartered Accountants |
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| LEGAL
ADVISOR |
Nisar Law Associates |
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|
51, Mozang Road |
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|
Lahore |
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| REGISTERED
OFFICE |
35-Darulaman Housing
Society |
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|
Block 7/8,
Shahra-e-Faisal |
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|
Karachi |
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| FACTORY |
|
Sangjani, Islamabad |
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| MARKETING
OFFICE |
2nd Floor, Majeed Plaza |
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|
Bank Road, Saddar |
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|
Rawalpindi |
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| SHARE
REGISTRAR OFFICE |
Uni Corporate &
Financial Services |
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|
Westland Trade Centre |
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|
Opposite Flyover,
Shaheed-e-Millat Road |
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Karachi |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 20th Annual General Meeting of the Members of the
Company |
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| will
be held at Registered Office, 35-Darulaman Housing Society, Block 7/8,
Shahra-e-Faisal, |
|
| Karachi
on Monday, December 31,2001 at 5.30 p.m. to transact the following
businesses: |
|
|
| 1.
To confirm the Minutes of the 19th Annual General Meeting held on December
22, 2000. |
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|
|
|
| 2.
To receive and adopt the Annual Audited Accounts for the year ended June 30,
2001 |
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| together
with the Directors' and Auditors' Reports thereon. |
|
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| 3.
To appoint Auditors and fix their remuneration. The present Auditors Messrs
Taseer Hadi Khalid |
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| &
Co., Chartered Accountants and Messrs Rahim Iqbal Rafiq & Company,
Chartered |
|
| Accountants
retire and being eligible, offer themselves for re-appointment. |
|
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| 4.
To transact any other business with the permission of the Chair. |
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|
By Order of the Board |
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|
(ABDUL ALEEM) |
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| Karachi:
November 24, 2001 |
|
Company Secretary |
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| Notes: |
|
|
| 1.
The Share Transfer Books of the Company will remain closed from Tuesday,
December 25, |
|
| 2001
to Monday, December 31, 2001 (both days inclusive). |
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|
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| 2.
A member entitled to attend, speak and vote at this meeting may appoint
another member |
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| as
his/her proxy to attend, speak and vote on his/her behalf. |
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|
|
| 3.
An instrument appointing a proxy must be received at the Registered Office of
the |
|
| Company
not later than forty eight hours before the time appointed for the Meeting. A |
|
| member
shall not be entitled to appoint more than one proxy. If a member appoints
more |
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| than
one proxy and more than one instrument of proxy are deposited by a member
with the |
|
| Company,
all such instruments shall be rendered invalid. |
|
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| 4.
GUIDELINES FOR CDC ACCOUNT HOLDERS ISSUED BY SECURITES & EXCHANGE
COMMISSION |
|
| OF PAKISTAN |
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|
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| For
personal attendance: |
|
|
| (i)
In case of individuals, the account holder or sub-account holder and/or the
person |
|
| whose
securities are in group account and their registration details are uploaded
as per |
|
| the
Regulations, shall authenticate his/her identity by showing his/her original
National |
|
| Identity
Card (NIC) at the time of attending the meeting. |
|
|
| (ii)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with |
|
| specimen
signature of the nominee shall be produced (unless it has been provided |
|
| earlier)
at the time of the meeting. |
|
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|
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| For
appointing proxy |
|
|
| (i)
In case of individuals, the account holder or sub-account holder and/or the
person |
|
| whose
securities are in group account and their registration details are uploaded
as |
|
| per
the Regulations, shall submit the proxy form as per the above requirement. |
|
|
| (ii)
Attested copies of NIC of the beneficial owners and of the proxy shall be
furnished |
|
| with
the proxy form. |
|
|
| (iii)
The proxy shall produce his/her original NIC at the time of the meeting. |
|
|
| 5.
Members are requested to notify any change in their address immediately. |
|
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| 6.
Members should quote their Folio Number in all correspondence and at the time
of |
|
| attending
the Meeting. |
|
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|
|
|
| DIRECTORS'
REPORT TO THE MEMBERS |
|
|
| Dear Members |
|
|
| Your
Directors are pleased to present their report alongwith the audited accounts
for the year |
|
| ended
June 30, 2001. |
|
|
| The
depressed market conditions, excess supply of cement, exorbitant increase in
input costs and |
|
| inequitable
taxation has greatly affected the results of your company. |
|
|
| OPERATING
PERFORMANCE |
|
| The
production and dispatches for the year under review are as follows: |
|
|
|
|
2001 |
2000 |
|
|
|
|
Tonnes |
|
| Production: |
|
| Clinker |
|
473,390 |
445,380 |
|
| Cement |
|
502,719 |
458,619 |
|
|
|
|
| Dispatches |
|
|
498,634 |
458,120 |
|
|
|
|
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| OPERATING
RESULT |
|
| We
have informed last year that the enormous increase in the prices of furnace
oil and |
|
| inequitable
imposition of sales tax on cement industry is leading the industry towards
disaster. The |
|
| current
years results of your company have shown that our apprehension were right as
result of |
|
| which
your company suffered heavy losses. |
|
|
| The
company as compared to last year's gross profit of Rs. 237.285 million has
suffered gross loss |
|
| of
Rs. 3.336 million, which was mainly due to two reasons. Firstly the decrease
in net selling prices |
|
| due
to inequitable imposition of sales tax and secondly the massive increase in
furnace oil prices. |
|
| The
increase of 20% in operating expenses and 21% in financial expenses resulted
in loss before |
|
| tax
of Rs. 114.493 million as compared to last year profit of Rs. 131.232
million. |
|
|
| DEBT
OBLIGATION |
|
| By
the grace of God the company continues to meet its financial commitments and
debt |
|
| obligations
on time. |
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|
| FUTURE
PROSPECTS |
|
| The
recent developments in the region and the economic slow down in the country
has also |
|
| affecting
the cement industry adversely. The demand for the cement in the country is
almost |
|
| stagnant
an as such chances of increasing the operating efficiency are very remote.
However, |
|
| in
line with the strategy adopted by the cement industry, your company is also
planned to |
|
| change
the fuel system from furnace oil to coal. In this respect machinery has
already been |
|
| acquired
and the erection and installation is in progress. The management is confident
that with |
|
| use
of coal as fuel the company shall be able to produce better results. |
|
|
| BOARD
OF DIRECTORS |
|
| During
the year under review National Development Finance Corporation changed its
nominee |
|
| Director
from the Board and as a result Mr. Majeedullah Hussaini replaced Mr. Afaq
Jamal |
|
| Hussain.
The Board places on record its appreciation for the valuable support and
contribution |
|
| by
the outgoing Director and welcomes the new Director. |
|
|
| AUDITORS |
|
| Present
auditors M/s. Taseer Hadi Khalid & Co., Chartered Accountants and M/s.
Rahim Iqbal |
|
| Rafiq
& Company, Chartered Accountants, retire and being eligible, have offered
themselves for |
|
| re-appointment. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| A
statement showing the pattern of shareholding as at June 30, 2001 is annexed. |
|
|
| ACKNOWLEDGMENT |
|
| The
Directors would like to place on record their appreciation for the strenuous
efforts and |
|
| dedicated
work of the staff and workers and for the efforts made by the dealers in
giving full |
|
| support
to our marketing policies. We would also like to express our sincere thanks
to all the |
|
| financial
institutions and banks for their continued support and co-operation. |
|
|
|
|
On behalf of the Board |
|
|
|
|
|
|
|
|
(MOHAMMED ASAD FECTO) |
|
| Karachi:
November 24, 2001 |
|
Chairman |
|
|
|
| PATTERN
OF SHAREHOLDING |
|
| AS
AT JUNE 30, 2001 |
|
|
| Number of |
Shareholding |
Total |
|
| Share Holders |
From |
To |
Shares Held |
|
|
| 365 |
1 |
100 |
36,500 |
|
| 2051 |
101 |
500 |
948,400 |
|
| 349 |
501 |
1000 |
340,800 |
|
| 304 |
1001 |
5000 |
730,500 |
|
| 50 |
5001 |
10000 |
380,100 |
|
| 7 |
10001 |
15000 |
82,900 |
|
| 6 |
15001 |
20000 |
105,300 |
|
| 3 |
20001 |
25000 |
67,500 |
|
| 5 |
25001 |
30000 |
134,700 |
|
| 1 |
30001 |
35000 |
31,000 |
|
| 2 |
35001 |
40000 |
74,600 |
|
| 1 |
40001 |
45000 |
40,500 |
|
| 1 |
45001 |
50000 |
45,400 |
|
| 1 |
55001 |
60000 |
59,900 |
|
| 1 |
80001 |
85000 |
83,000 |
|
| 1 |
85001 |
90000 |
88,000 |
|
| 1 |
90001 |
95000 |
93,800 |
|
| 1 |
95001 |
100000 |
100,000 |
|
| 1 |
110001 |
115000 |
112,000 |
|
| 2 |
130001 |
135000 |
263,500 |
|
| 2 |
135001 |
140000 |
276,000 |
|
| 1 |
140001 |
145000 |
141,000 |
|
| 1 |
155001 |
160000 |
156,000 |
|
| 1 |
180001 |
185000 |
182,200 |
|
| 2 |
225001 |
230000 |
458,000 |
|
| 1 |
240001 |
245000 |
243,900 |
|
| 1 |
250001 |
255000 |
254,800 |
|
| 1 |
265001 |
280000 |
270,000 |
|
| 1 |
275001 |
270000 |
280,000 |
|
| 1 |
280001 |
285000 |
285,000 |
|
| 1 |
290001 |
295000 |
295,000 |
|
| 1 |
295001 |
300000 |
300,000 |
|
| 1 |
305001 |
310000 |
309,500 |
|
| 2 |
320001 |
325000 |
650,000 |
|
| 1 |
325001 |
330000 |
330,000 |
|
| 2 |
330001 |
335000 |
670,000 |
|
| 2 |
335001 |
340000 |
679,800 |
|
| 2 |
340001 |
345000 |
690,000 |
|
| 1 |
345001 |
350000 |
350,000 |
|
| 1 |
360001 |
365000 |
365,000 |
|
| 1 |
370001 |
375000 |
375,000 |
|
| 1 |
395001 |
400000 |
398,200 |
|
| 1 |
415001 |
420000 |
420,000 |
|
| 1 |
480001 |
490000 |
488,000 |
|
| 2 |
810001 |
815000 |
1,625,000 |
|
| 1 |
995001 |
1000000 |
999,300 |
|
| 2 |
1495001 |
1500000 |
2,999,600 |
|
| 2 |
1895001 |
1900000 |
3,790,834 |
|
| 1 |
1940001 |
1945000 |
1,945,000 |
|
| 1 |
3155001 |
3160000 |
3,156,600 |
|
| 1 |
3170001 |
3175000 |
3,172,200 |
|
| 1 |
4780001 |
4785000 |
4,782,700 |
|
| 2 |
5220001 |
5225000 |
10,442,966 |
|
| ------------------ |
|
------------------ |
|
| 3196 |
|
45,600,000 |
|
| ========== |
|
========== |
|
|
| Categories
of Shareholders |
|
Number of |
Shares Held |
Percentage |
|
|
Shareholders |
|
|
| Individuals |
|
3,131 |
31,284,400 |
68.61 |
|
|
| Investment
Companies |
|
35 |
4,221,900 |
9.26 |
|
|
| Insurance
Companies |
|
2 |
14,900 |
0.03 |
|
|
| Joint
Stock Companies |
|
14 |
78,500 |
0.17 |
|
|
| Financial
Institutions |
|
7 |
8,003,100 |
1,755 |
|
|
| Modaraba
Companies |
|
3 |
46,700 |
0.10 |
|
|
| Foreign
Investors |
|
2 |
1,949,000 |
428 |
|
|
| Others |
|
2 |
1,500 |
0 |
|
|
|
|
------------------ |
------------------ |
------------------ |
|
|
| Total |
|
3,196 |
45,600,000 |
100.00 |
|
|
|
|
========== |
========== |
========== |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Fecto Cement Limited as at 30 June
2001 and |
|
| the
related profit and loss account, cash flow statement and 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
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, cash flow statement and
statement of |
|
| changes
in equity 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 30 June 2001 and of the loss, its
cash flows |
|
| and
changes in equity for the year then ended; and |
|
|
| (d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was |
|
| deducted
by the Company and deposited into the Central Zakat Fund established under |
|
| Section
7 of that Ordinance. |
|
|
|
|
|
TASEER HADI KHALID & CO. |
|
|
RAHIM IQBAL RAFIQ & COMPANY |
|
|
Chartered Accountants |
|
|
Chartered Accountants |
|
|
| Karachi:
November 26, 2001 |
|
|
|
| BALANCE
SHEET |
|
|
|
|
(Rupees in
Thousands) |
|
|
|
NOTE |
2001 |
2000 |
|
| SHARE
CAPITAL |
|
| Authorised: |
|
| 50,000,000
Ordinary Shares of Rs. 10/- each |
|
500,000 |
500,000 |
|
|
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid-up: |
|
| 45,600,000
Ordinary Shares of Rs. 10/- each |
|
| Issued for Cash |
|
|
456,000 |
456,000 |
|
|
|
|
|
| GENERAL
RESERVES |
|
|
150,000 |
150,000 |
|
| ACCUMULATED
(LOSS)/PROFIT |
|
(40,314) |
39,633 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
565,686 |
645,633 |
|
| LONG
TERM LOANS |
|
4 |
42,680 |
71,133 |
|
| DEFERRED
LIABILITIES |
|
5 |
186,557 |
241,217 |
|
| LONG
TERM DEPOSITS |
|
6 |
15,637 |
17,737 |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES: |
|
|
|
| Short
Term Running Finance |
|
7 |
159,341 |
-- |
|
| Current
Maturity of Long Term Liabilities |
4 |
28,453 |
28,453 |
|
| Creditors,
Accrued & Other Liabilities |
8 |
208,299 |
211,306 |
|
| Provision
for Taxation |
|
|
5,901 |
63,130 |
|
| Proposed
Dividend |
|
|
-- |
45,600 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
401,994 |
348,489 |
|
| CAPITAL
COMMITMENTS |
|
9 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
1,212,554 |
1,324,209 |
|
|
========== |
========== |
|
|
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
| OPERATING
FIXED ASSETS |
|
10 |
736,004 |
811,034 |
|
| CAPITAL
WORK IN PROGRESS |
11 |
2,456 |
-- |
|
| LONG
TERM DEPOSITS |
|
|
4,503 |
4,505 |
|
|
|
|
|
|
| CURRENT
ASSETS: |
|
|
|
| Stores
and Spares |
|
12 |
314,037 |
311,862 |
|
| Stock-in-Trade |
|
13 |
38,502 |
35,158 |
|
| Trade
Debtors-Unsecured Considered Good |
|
13,531 |
4,087 |
|
| Advances
and Prepayments |
|
14 |
60,737 |
77,337 |
|
| Cash
and Bank Balances |
|
15 |
42,784 |
80,226 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
469,591 |
508,670 |
|
|
|
|
------------------ |
------------------ |
|
|
|
1,212,554 |
1,324,209 |
|
|
|
========== |
========== |
|
|
|
(MOHAMMED YASIN FECTO) |
|
(ABDUL JALEEL SHAIKH) |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
(Rupees in
Thousands) |
|
|
NOTE |
2001 |
2000 |
|
|
| SALES-NET |
|
16 |
1,173,676 |
1,208,111 |
|
| COST
OF SALES |
|
17 |
1,177,012 |
970,826 |
|
|
|
|
------------------ |
------------------ |
|
| GROSS
(LOSS)/PROFIT |
|
|
(3,336) |
237,285 |
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| General
& Administrative |
|
18 |
50,968 |
40,022 |
|
| Selling
& Distribution |
|
19 |
25,993 |
24,113 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
76,961 |
64,135 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(80,297) |
173,150 |
|
|
|
|
| FINANCIAL
CHARGES |
|
20 |
40,680 |
33,716 |
|
| OTHER
INCOME |
|
21 |
(6,529) |
(3,634) |
|
| WORKERS'
FUNDS |
|
22 |
45 |
11,836 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
34,196 |
41,918 |
|
|
|
|
|
------------------ |
------------------ |
|
| (LOSS)/PROFIT
BEFORE TAXATION |
|
(114,493) |
131,232 |
|
|
|
|
|
|
|
|
| PROVISION
FOR TAXATION |
|
|
|
|
| Current Year |
|
23 |
5,901 |
63,130 |
|
| Prior Year |
|
|
2,028 |
2,376 |
|
| Deferred |
|
|
(42,475) |
(17,658) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(34,546) |
47,848 |
|
|
|
|
------------------ |
------------------ |
|
| (LOSS)/PROFIT
AFTER TAXATION |
|
(79,947) |
83,384 |
|
|
========== |
========== |
|
|
|
|
|
|
|
|
(Rupees) |
|
|
|
|
| (Loss)/Earning
per share - basic |
|
24 |
(1.75) |
1.83 |
|
|
|
|
========== |
========== |
|
|
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
(MOHAMMED YASIN FECTO) |
|
(ABDUL JALEEL SHAIKH) |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
