| Karam Ceramics Limited |
|
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|
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| Annual
Report 2001 |
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| Contents |
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| Company
Information |
|
| Business Items |
|
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Financial
Highlights |
|
| Auditors Report |
|
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| Company
Information |
|
|
|
| BOARD
OF DIRECTORS |
|
|
| Shaban
Ali G. Kassim |
Chairman |
|
| Irshad
Ali S. Kassim |
Chief Executive |
|
| Munawar
Ali S. Kassim |
Vice Chairman |
|
| Mariam
Shaban Ali |
Director |
|
| Shaheen
A. Rahman |
Director |
|
| Sakin Noorallah |
|
Director |
|
| H. Hatim Dayala |
|
Director |
|
|
| COMPANY
SECRETARY |
|
| Abdul
Sultan Hamirani |
|
|
| BANKERS |
|
| Soneri
Bank Limited |
|
| Emirates
Bank International Limited |
|
| Standard
Chartered Grindlays Bank |
|
| Habib
Bank Limited |
|
|
| AUDITORS |
|
| Qavi & Co. |
|
| Chartered
Accountants |
|
|
| REGISTRAR
AND SHARE TRANSFER OFFICE |
|
| T.H.K.
Associates (Private) Limited |
|
| Ground
Floor, Sheikh Sultan Trust Building No. 2 |
|
| Beaumont
Road, Karachi. |
|
|
| NATIONAL
TAX NUMBER |
: 0710857-5 |
|
| SALES
TAX REGISTRATION NO. : 02-02-6907-001-55 |
|
|
|
| REGISTRED
OFFICE |
|
|
| B.C-6,
Block-5, Scheme-5, Kehkashan, Clifton, Karachi. |
|
|
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| RANGE
OF PRODUCTS |
|
|
| SANITARYWARE |
|
|
| * Simpact - set |
|
* Royal - set |
|
|
| W. C. Cistern |
|
W.C. Cistern |
|
|
| Wash Basin |
|
Wash Basin |
|
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| Pedestal |
|
Pedestal |
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| Bidet |
|
|
|
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| * Mairaj - set |
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* Venus - set |
|
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| W. C. Cistern |
|
W.C. Cistern |
|
|
| Wash Basin |
|
Wash Basin |
|
|
| Pedestal |
|
Pedestal |
|
|
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| * Angelo - set |
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* Orissa Asian W.C. |
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| W. C. Cistern |
|
sanitare Asian W.C. |
|
| Wash Basin |
|
Orient W.C. |
|
|
| Pedestal |
|
|
|
|
| * Kitchen Sink |
|
* Urinal |
|
|
| * Accessories |
|
* Ceramic Traps |
|
|
| Soap/Paper/Tooth
Brush Holder |
S. Trap |
|
|
| Mirror Plate |
|
P. Trap |
|
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| Towel Rails |
|
|
| Hooks |
|
|
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| COLOURED
DECORATED & EFFECT GLAZED TILES |
|
|
| * 15cm X 15cm |
|
* 20cm X 20cm |
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| * 20cm X 30cm |
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* 30cm X 30cm |
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| * 28cm X 40cm |
|
* 40cm X 40cm |
|
|
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| NOTICE
OF THE MEETING |
|
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| Notice
is hereby given that the 22nd annual general meeting of the company will be
held at the registered |
|
| office
of the company on Thursday 13th December, 2001 at 10.00 a.m. to transact the
following business: |
|
|
| 1.
To confirm the minutes of the 21st Annual General Meeting held on 22nd
December 2000. |
|
|
|
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| 2.
To consider and adopt !he audited account of the company for the year ended
30th June 2001 |
|
| along
with the Report of the Directors thereon. |
|
|
|
|
|
| 3.
To appoint Auditors for the year 2002 and fix their remuneration. |
|
|
|
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| 4.
To declare a dividend. The Directors have recommended a cash dividend of 15%
(Rs.1.5 per |
|
| share). |
|
|
|
|
| 5.
To elect 7 Directors for a period of three years in accordance with the
Companies Ordinance, |
|
| 1984. |
|
|
| The
Directors have fixed number of elected Directors as 7(Seven). The name of
Directors who |
|
| are
retiring are as follows:- |
|
|
|
|
| 1.
Mr. Shabanali G. Kassim |
2. Mr. Irshad Ali S.
Kassim |
|
| 3.
Mr. Munawar Ali S. Kassim |
4. Mrs. Mariam S. Kassim |
|
| 5.
Mrs. Sakin Noorullah |
6. Mrs. Shaheen A. Rehman |
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| 7.
Mr. H. Hatim Dayala |
|
|
| 6.
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 Sultan Hamirani |
|
| Karachi:
November 15, 2001 |
|
Company Secretary |
|
|
|
| Notes: |
|
|
| 1.
The share transfer book of the company will remain closed from 7th December
2001 to 13th |
|
| December
2001 (both days inclusive). |
|
|
|
| 2.
A member eligible to attend and vote at the meeting may appoint another
member on his/her |
|
| proxy
to attend and vote on his/her behalf. Proxies to be effective must be
received by the company |
|
| note
less than 48 hours before the time of holding of the meeting. |
|
|
|
|
| 3.
Members are requested to communicate to the company or the registrar to the
company of any |
|
| change
in their address. |
|
|
| 4.
Any person who seeks to contest election to the office of Directors shall
file with the company, |
|
| not
later than fourteen days before the date of the meeting a notice of his
intention to offer himself |
|
| for
election as a Director together with his consent to act as a Director. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| The
Directors of your company have pleasure in submitting the report along with
audited accounts for |
|
| the
year ended 30th June 2001. |
|
|
| ISO
CERTIFICATION |
|
| Your
management is pleased to inform you that company has got ISO 9002
certification during the year. |
|
| This
will certainly prove to be the competitive edge over its competitors. |
|
|
| OPERATING
PERFORMANCE |
|
| By
grace to Allah your company has managed to increase the net sales revenue by
35% compared |
|
| with
previous year. Increase in sales revenue is mainly due to increase in volumes
as a result of |
|
| installation
of new machinery. However in view of depressed and uncertain market condition
the entire |
|
| increase
in sales volume has not been translated in the proportion of increased volume
into monetary |
|
| terms. |
|
|
| The
cost of sales during the year increased by 36% due to downward slide of
Pakistani Rupees against |
|
| world
major currencies, increase in prices of utilities especially Gas, Electricity
and general inflation in |
|
| the
country. Increased in petroleum prices has also been resulted into increased
in transportation cost. |
|
| These
increases in cost could not be passed on to the customers in view of presence
of competition |
|
| from
imported as well as locally manufactured titles. |
|
|
| Inspite
of the above adverse impacts your management has been able to improve its
profit after tax to |
|
| Rs.
16.2 million compared with Rs. 15 million in the last year. |
|
|
| PROFIT
& DISTRIBUTION |
|
|
|
|
|
|
Rupees |
|
|
| Profit
after taxation |
|
16,223,029 |
|
| Un-appropriated
profit brought forward |
|
22,461,225 |
|
|
|
|
------------------ |
|
| Profit
available for appropriation |
|
38,684,254 |
|
|
| APPROPRIATION |
|
| Cash
dividend 15% (2000: 15%) on |
|
| 10,911,780
shares of Rs. 10/- each |
|
16,367,670 |
|
|
|
|
------------------ |
|
| Un-appropriated
profit carried forward |
|
22,316,584 |
|
|
========== |
|
|
| Details
of the appropriation recommended by the Directors are as under:- |
|
|
| BOARD
OF DIRECTORS |
|
| The
present monthly remuneration of the Chief Executive and Vice Chairman are as
under:- |
|
|
| -
Chief Executive Rs. 60,000/- per month |
|
| -
Vice Chairman Rs. 60,000/- per month |
|
|
| In
addition to above they are also provided with company maintained car. |
|
|
| FUTURE
PROSPECTS |
|
| The
management of the company is of the view that due to prevailing international
situation and uncertain |
|
| economic
conditions in the country, the activities of construction industry will
remain depressed. Further |
|
| more,
government efforts for resumption of housing scheme have not yet yielded any
tangible results. |
|
| This
will adversely affect the demand of Tiles and Sanitary Ware. However, company
will endeavor to |
|
| improve
its market share with rigorous marketing efforts and aim to take appropriate
measures to ensure |
|
| better
operating results. |
|
|
| EMPLOYEES
RELATION |
|
| The
management would like to place on record its appreciation for the positive
attitude of the labour |
|
| union
during the year under review and we look forward for its support in resolving
all issues mutually |
|
| with
the active cooperation of the labour union. |
|
|
| AUDITORS |
|
| Our
present auditor M/s. Qavi & Co., Chartered Accountants retire and offer
themself for reappointment. |
|
|
| PATTERN
OF SHARE HOLDING |
|
| Pattern
of Share holding as on June 30, 2001 is given on page 30. |
|
|
| APPRECIATION |
|
| The
Directors take this opportunity to thanks the suppliers M/s. R.A. Watts
Limited, Fritta S. L., Cerdec |
|
| A.G.
Welko Industrial s.p.a, shareholders and staff/employees etc. for their
cooperation and contribution |
|
| towards
the progress of the company. We would like to thank the Banks and financial
institutions and |
|
| customers,
for the confidence reposed on the company. |
|
|
|
|
IRSHADALI S. KASSIM |
|
| KARACHI:
November 8, 2001 |
|
CHIEF EXECUTIVE |
|
|
|
|
| FINANCIAL
HIGHLIGHTS |
|
|
|
|
2001 |
2000 |
|
|
|
Rupees |
Rupees |
|
|
| Net Sales |
|
Rupees in million |
445,484 |
330,970 |
|
| Profit before Tax |
|
Rupees in million |
26,440 |
20,354 |
|
| Income Tax |
|
Rupees in million |
3,216 |
1,731 |
|
| Deferred Tax |
|
Rupees in million |
7,000 |
3,600 |
|
| Profit after Tax |
|
Rupees in million |
16,223 |
15,023 |
|
| Earning
per Share |
Rupees / share |
|
1.49 |
1.38 |
|
| Cash
dividend per Share |
Rupees / share |
|
1.50 |
1.50 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of KARAM CERAMICS
LIMITED as at 30th 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 Fart thereof conform with approved accounting
standards as |
|
| applicable
in Pakistan, and, give the information required by the Companies Ordinance,
1.984, in |
|
| the
manner so required and respectively give a true and fair view of the state of
the company's |
|
| affairs
as at 30th June, 2001 and of the profit, 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 (XVIII of |
|
| 1980),
was deducted by the company and deposited in the Central Zakat Fund
established under |
|
| section
7 of that Ordinance. |
|
|
|
|
|
|
|
QAVI & CO. |
|
| Karachi:
November 08, 2001 |
|
|
CHARTERED ACCOUNTANTS |
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2001 |
|
|
|
Note |
2001 |
2000 |
|
|
|
Rupees |
Rupees |
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Share Capital |
|
3 |
109,117,800 |
109,117,800 |
|
| Unappropriated
Profit |
|
|
22,316,584 |
22,461,225 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
131,434,384 |
131,579,025 |
|
|
|
|
| LONG
TERM LIABILITIES |
|
88,497,708 |
83,341,686 |
|
| DEFERRED
LIABILITY-Staff Gratuity |
|
27,060,420 |
20,559,645 |
|
| DEFERRED
TAXATION |
|
13,600,000 |
6,600,000 |
|
| DEFERRED
INCOME |
|
9,004,258 |
5,495,692 |
|
|
|
| CURRENT
LIABILITIES |
|
| Current/overdue
portion of |
|
| long-term
and deferred |
|
|
|
| liabilities |
|
|
6 |
66,236,792 |
67,561,782 |
|
| Short
Term Finance |
|
7 |
28,257,239 |
21,863,494 |
|
| Creditors,
Accrued Expenses |
|
|
|
| and
Other Liabilities |
|
8 |
51,203,351 |
113,788,646 |
|
| Unclaimed
Dividend |
|
|
139,817 |
108,141 |
|
| Provision
for Taxation |
|
22 |
3,279,492 |
2,566,883 |
|
| Proposed
Dividend |
|
|
16,367,670 |
16,367,670 |
|
|
|
------------------ |
------------------ |
|
|
|
165,484,361 |
222,256,616 |
|
| CONTINGENCIES
AND COMMITMENTS |
9 |
|
|
------------------ |
------------------ |
|
|
|
435,081,131 |
469,832,664 |
|
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
Assets - At cost |
|
|
|
| less
accumulated depreciation |
|
10 |
280,311,781 |
281,344,713 |
|
| Capital
Work in Progress |
|
11 |
-- |
4,160,962 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
280,311,781 |
285,505,675 |
|
|
| LONG
TERM DEPOSITS |
|
|
|
| AND
PREPAYMENTS |
|
12 |
6,178,539 |
13,004,153 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
Spares and Loose Tools |
|
13 |
88,100 |
802,616 |
|
| Stock in Trade |
|
14 |
49,916,739 |
87,738,798 |
|
| Trade
Debts - Unsecured |
|
|
|
| considered
good |
|
|
19,145,071 |
19,239,257 |
|
| Loans,
Advances, Deposits, |
|
|
|
| Prepayments
and Other Receivables |
15 |
27,474,329 |
16,221,275 |
|
| Cash
and Bank Balances |
|
16 |
51,966,572 |
47,320,890 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
148,590,811 |
171,322,836 |
|
|
------------------ |
------------------ |
|
|
|
435,081,131 |
469,832,664 |
|
|
|
========== |
========== |
|
|
| These
accounts should be read in conjunction with the annexed notes. |
|
|
|
|
IRSHAD ALI S. KASSIM |
|
MUNAWAR ALI S. KASSIM |
|
|
CHIEF EXECUTIVE |
|
VICE CHAIRMAN |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
Note |
2001 |
2000 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| Sales - Net |
|
17 |
445,484,344 |
330,970,491 |
|
| Cost of Sales |
|
18 |
(368,741,531) |
(270,798,481) |
|
|
|
|
------------------ |
------------------ |
|
| Gross Profit |
|
|
76,742,813 |
60,172,010 |
|
|
|
|
|
|
| Other Income |
|
19 |
7,510,701 |
6,322,708 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
84,253,514 |
66,494,718 |
|
|
|
|
| Administrative,
Selling and General Expenses |
20 |
33,578,933 |
27,889,957 |
|
| Financial
Charges |
|
21 |
22,244,455 |
16,860,701 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
55,823,388 |
44,750,658 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before Statutory Provisions |
|
|
28,430,126 |
21,744,060 |
|
|
| Workers'
Profit Participation Fund |
|
1,421,506 |
1,079,453 |
|
| Workers'
Welfare Fund - Current year |
|
193,156 |
310,911 |
|
|
- Prior year |
|
376,519 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
1,991,181 |
1,390,364 |
|
|
|
------------------ |
------------------ |
|
| Profit
Before Taxation |
|
26,438,945 |
20,353,696 |
|
|
| Provision
for Taxation |
|
22 |
|
| Current year |
|
|
3,279,492 |
2,566,883 |
|
| Prior year |
|
(63,576) |
(836,339) |
|
| Deferred |
|
7,000,000 |
3,600,000 |
|
|
|
------------------ |
------------------ |
|
|
|
10,215,916 |
5,330,544 |
|
|
|
------------------ |
------------------ |
|
| Profit
after Taxation |
|
16,223,029 |
15,023,152 |
|
|
|
|
|
| Unappropriated
Profit Brought Forward |
|
22,461,225 |
23,805,743 |
|
|
|
------------------ |
------------------ |
|
|
|
38,684,254 |
38,828,895 |
|
|
|
| Appropriation: |
|
|
|
| Proposed
dividend 15%(2000: @ 15%) |
|
16,367,670 |
16,367,670 |
|
|
|
------------------ |
------------------ |
|
| Unappropriated
Profit Carried Forward |
|
22,316,584 |
22,461,225 |
|
|
|
|
========== |
========== |
|
| Earning
Per Share |
|
23 |
1.49 |
1.38 |
|
|
========== |
========== |
|
|
| These
accounts should be read in conjunction with the annexed notes. |
|
|
|
IRSHAD ALI S. KASSIM |
|
|
MUNAWAR ALI S. KASSIM |
|
|
CHIEF EXECUTIVE |
|
|
VICE CHAIRMAN |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
Note |
2001 |
2000 |
|
|
|
Rupees |
Rupees |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
26,438,945 |
20,353,696 |
|
|
|
|
|
| Adjustments
for: |
|
|
|
| Depreciation |
|
28,229,204 |
32,065,531 |
|
| Provision
for staff gratuity |
|
7,201,966 |
5,191,383 |
|
| Charge
for Workers' Profit Participation Fund |
|
1,421,506 |
1,079,453 |
|
| Charge
for Workers' Welfare Fund |
|
569,675 |
310,911 |
|
| Interest
and markup expense |
|
22,010,052 |
16,622,438 |
|
| Profit
on sale of Fixed Assets |
|
(174,097) |
(283,650) |
|
| Return
on deposits |
|
(4,010,468) |
(2,028,352) |
|
| Gain
on Sale and lease back of Fixed Assets |
|
(3,325,708) |
(2,430,426) |
|
| Movement
in long term prepayments |
|
180,000 |
540,000 |
|
|
|
------------------ |
------------------ |
|
|
|
78,541,075 |
71,420,984 |
|
| (Increase)
/ Decrease in Operating Assets |
|
| Stores
and Spares |
|
714,516 |
(206,503) |
|
| Stock in Trade |
|
37,822,059 |
(18,738,433) |
|
| Trade Debtors |
|
94,186 |
654,770 |
|
| Loans,
Advances, Deposits, |
|
|
|
| Prepayments
and Other Receivables |
|
(5,162,763) |
(594,540) |
|
|
|
|
|
| Increase
/ (Decrease) in Operating Liabilities |
|
|
|
| Short
Term Running Finance |
|
6,393,745 |
15,341,161 |
|
| Creditors,
Accrued Expenses, |
|
|
|
| Other
Liabilities and Bills Payable |
|
(66,649,480) |
51,133,824 |
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
51,753,338 |
119,011,263 |
|
|
|
|
|
| Interest
and Markup paid |
|
|
(18,170,163) |
(16,622,438) |
|
| Income Tax paid |
|
|
(6,691,970) |
(5,645,442) |
|
| Gratuity paid |
|
|
(701,191) |
(1,133,407) |
|
| WPPF paid |
|
|
(1,079,453) |
(990,140) |
|
| WWF paid |
|
|
(687,430) |
(247,799) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flows from operating activities |
|
24,423,131 |
94,372,037 |
|
|
|
|
|
|
| Net
cash flows from operating activities |
|
24,423,131 |
94,372,037 |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Capital
expenditure incurred |
|
(23,885,482) |
(58,199,828) |
|
| Return
on deposits |
|
2,108,840 |
2,028,352 |
|
| Sale
proceeds of fixed assets disposed during the year |
206,500 |
529,000 |
|
|
|
------------------ |
------------------ |
|
