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Wazir Ali Industries Limited
Annual Report 2001
QUALITY POLICY
We at Wazir Ali Industries Limited are committed to
produce such Quality Products, which at least Qualify
P.S.I. standards and in their formulation / manufacturing
prime importance would be given to the health
of consumers.
CONTENTS
Company Information
Notice of Annual General Meeting
Directors' Report to the Members
Pattern of Shareholding
Auditors' Report to the Members
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
COMPANY INFORMATION
Board of Directors		Syed Yawar Ali		Chairman & Chief Executive
		Dr. Abdulraouf M. Mannaa
		Dr. Mohamed H. Ikhwan
		Syed Tariq Ali
		Syeda Feriel Riffat Ali
		Mr. Zainul Abidin Memon
		Syed Naseem Ahmad
Company Secretary		Sadaqat Ali
Auditors		Taseer Hadi Khalid & Co.
		Chartered Accountants
		Karachi
Bankers		Prime Commercial Bank Limited
		Habib Bank Limited
		ABN-AMRO Bank
Registered
Head Office		3rd Floor, Kandawala Building
		M.A. Jinnah Road
		Karachi
Factory		Hali Road
		Hyderabad
Registrars & Share		THK Associates (Pvt.) Limited
Transfer Office		Ground Floor, Shaikh Sultan Trust Building No.2
		Beaumont Road
		Karachi
NOTICE OF ANNUAL GENERAL MEETING
NOTICE is hereby given that the 49th Annual General Meeting of the shareholders of Wazir Ali Industries Limited
will be held on Thursday, 27th December 2001 at 9.00 a.m. at Hotel Beach Luxury, Karachi to transact the
following business.
1. To confirm the minutes of the last Annual General Meeting held on 15th November 2000.
2. To review and adopt the audited Balance Sheet and Profit and Loss Account of the Company for the
year ended 30th June 2001 together with the Directors' and Auditors' reports thereon.
3. To appoint Auditors for the year end 30th June 2002 and fix their remuneration (Messrs. Taseer Hadi
Khalid & Co., Chartered Accountants retire, and being eligible offer themselves for reappointment).
4. To transact any other business with the permission of the Chair.
					By Order of the Board
					SADAQAT ALI
Karachi: 21st November 2001					Company Secretary
NOTES:
1. The Share Transfer Books of the Company will remain closed from 20th December 2001 to 27th December
2001 (both days inclusive).
2. A member entitled to attend and vote at the annual general meeting is entitled to appoint another member
as proxy to attend and vote instead of him except that a corporation being a member may appoint as
proxy a person who is not a member. The instrument appointing a proxy must be received at the
registered office of the Company not less than forty-eight hours before the time of the meeting.
3. Members are requested to notify the change in their addresses, if any, immediately to the Registrar of
the Company.
(CDC Account Holders will further have to follow the undermentioned guidelines as laid down by the Securities
& Exchange Commission of Pakistan:
A. For Attending the Meeting:
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 identity by showing his original National Identity Card (NIC) or original passport 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.
B. For Appointing Proxies:
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) The proxy form shall be witnessed by two persons whose names, addresses and NIC numbers shall be
mentioned on the form.
iii) Attested copies of NIC or the passport of the beneficial owners and the proxy shall be furnished with
the proxy form.
iv) The proxy shall produce his original NIC or original passport at the time of the meeting.
v) In case of corporate entity, the Board of Directors' resolution/power of attorney with specimen signature
shall be submitted (unless it has been provided earlier) alongwith proxy form to the company.
DIRECTORS' REPORT TO THE MEMBERS
The members of the Board of Directors feel pleasure in presenting to you the Company's accounts for
the year ended on June 30, 2001 together with the Auditors' report thereon.
Overview
The year under review was a difficult period where depressed economic environment continued to
hamper business activity at every level. The sales were adversely affected due to the availability of
loose unbranded oil and ghee at cut throat prices and unprecedented lowering of international edible
oil prices. Furthermore the profit margins were squeezed, as the oil and ghee industry to compete with
the unorganized sector had to pass on the benefit through consumer and trade promotions.
Operating Results
Although the operating results show a decline of 25% in sales over the last year due to the above stated
reasons, the gross profit grew from 16.4% in last year to 19.3% in the year under review. This is mainly
due to decline in raw material prices along with timely buying. Moreover, this is also reflective of some
cost-effective measures that were initiated in March to relieve the pressure on margins.
In order to improve the "Tullo Quality Image" in the edible oil market, your company carried out
intensive marketing activities. Consequently, the marketing, selling and distribution expenses this year
recorded an increase of Rs. l 8.58 million (Year 2001: Rs.116.880 million - Year 2000: Rs.98.3 million)
as compared to the last year. Further the financial expenses remained as in the previous year.
Future Outlook
Inspite of the uncertain conditions prevalent in the country the company continues to lay focus on
operational efficiencies by resorting to automation, application of new developments in narrowing the
wastage, resulting in controlled costs and better management of working capital though we hope to
achieve sustainable performance in future as well.
Equity Injection
During the year 2,408,175 shares at Rs. 16/- per share (including a premium of Rs.6/- per share) were
issued to M/s. Savola Edible Oil Company, Saudi Arabia. These were issued on approval by the general
body of the company and Securities & Exchange Commission of Pakistan.
Revaluation of Operating Fixed Assets
Freehold land, building, plant and machinery of the company were revalued on 30 June 1993, 28 May
1997 and 30 June 2001 by an independent valuation consultant M/s. Iqbal A. Nanjee & Co. on market
value basis. Revaluation surplus has been credited to surplus on revaluation of fixed assets account.
Provision in the accounts for this benefit is based on actuarial valuation carried out under the projected
unit credit method and surplus/deficit arising on actuarial valuation of this scheme is recognized in
the year when it arises.
Earning Per Share
The after tax loss per ordinary share of Rs. 10.00 is Rs.4.91 - (Year 2000 Earning: Rs. 1.42)
Change in the Board of Directors
In the year under review, Syed Shahid Ali resigned, to whom the members of the Board of Directors
place on record their appreciation and recognition for his services rendered in the development and
growth of the company.
The members of the Board of Directors welcome Syed Naseem Ahmad on his joining the Board. The
company hopes to benefit from his vast and varied experience.
Auditors
The annexed accounts have been prepared on the assumption that the Company would continue as
a going concern. The assumption is based on the undertaking of continued support from the sponsoring
directors.
The present auditors, Messrs. Taseer Hadi Khalid & Company, Chartered Accountants, are due to
retire and being eligible, offer themselves for reappointment for the year ending June 30, 2002.
Pattern of Shareholding
The statement of pattern of shareholding of the company as at June 30, 2001 is included in the financial
statement.
Remuneration to Chief Executive and Company Secretary
The remuneration is paid in accordance with the appropriate approvals. The statement of executives'
remuneration is in the annexed audited accounts.
Acknowledgements
Our customers have supported us fully and we highly appreciate their valuable support. We will strive
our best to continue this partnership by providing them quality products.
We would also like to thank our distributors, bankers, leasing & insurance companies and the
shareholders for their continued support and encouragement.
The management and other staff members are continuously playing their role in the growth of your
company, which is highly appreciable and commendable.
					Syed Yawar Ali
Karachi: 21st November 2001					Chief Executive
PATTERN OF SHARE HOLDING AS AT 30 JUNE 2001
Number of	Share Holding		Total
shareholders	From	To	shares held	%
2,739	1	100	41,504	0.55
380	101	500	87,793	1.15
94	501	1,000	64,541	0.85
79	1,001	5,000	165,225	2.17
13	5,001	10,000	87,854	1.16
8	10,001	15,000	89,058	1.17
1	15,001	20,000	16,000	0.21
2	20,001	25,000	44,368	0.58
1	30,001	35,000	34,596	0.45
1	35,001	40,000	36,816	0.48
1	40,001	45,000	42,750	0.56
1	55,001	60,000	55,224	0.73
2	70,001	75,000	147,264	1.94
1	85,001	90,000	87,464	1.15
2	105,001	110,000	217,288	2.86
1	130,001	135,000	131,984	1.74
1	135,001	140,000	139,816	1.84
1	140,001	145,000	141,860	1.87
1	145,001	150,000	150,000	1.97
1	150,001	155,000	150,517	1.98
1	165,001	170,000	168,095	2.21
3	225,001	230,000	683,313	8.98
2	300,001	305,000	601,975	7.91
1	1,175,001	1,180,000	1,178,100	15.49
1	3,040,001	3,045,000	3,042,270	40.00
------------------			------------------	------------------
3,338			7,605,675	100.00
==========			==========	==========
Categories of shareholders
CATEGORY			NUMBERS	SHARES	%
1. Individuals (General Public)			3297	2,043,668	26.87
2. Investment Companies			1	141,860	1.87
3. Insurance Companies			3	344,593	4.53
4. Joint Stock Companies			18	1,689,863	22.22
5. Financial Institutions			15	337,874	4.44
6. Foreign Companies			1	3,042,270	40.00
7. Corporate Law Authority			1	1	0.00
8. Abandoned Properties Org.			1	3,146	0.04
9. Babar Ali Foundation			1	2,400	0.03
			------------------	------------------	------------------
			3338	7,605,675	100.00
			==========	==========	==========
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of Wazir Ali Industries 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 accounts 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 profit, its cash flows and changes
in equity for the year then ended;
(d) in our opinion, no zakat was deductible at source under the Zakat and Ushr Ordinance, 1980;
and
(e) without qualifying our opinion, we draw attention to the fact that the company, upto 30 June
2001, has incurred a net loss of Rs. 166.77 million, while its current liabilities exceed the
current assets by Rs. 11.37 million. These financial statements have however been prepared
on a going concern basis due to the undertaking of continued support of the sponsoring
directors.
BALANCE SHEET AS AT 30 JUNE 2001
			Note	2001	2000
				(Rupees in '000)
SHARE CAPITAL AND RESERVES
Share Capital
Authorised
8,000,000 ordinary shares of Rs. 10 each				80,000	80,000
				==========	==========
Issued, subscribed and paid-up			3	76,057	51,975
RESERVES
Share premium				14,449	--
Revenue reserve				66,067	66,067
Accumulated loss				(166,773)	(136,807)
				------------------	------------------
				(86,257)	(70,740)
				------------------	------------------
				(10,200)	(18,765)
SURPLUS ON REVALUATION OF
OPERATING FIXED ASSETS			4	66,723	46,085
LONG TERM DEMAND FINANCE
- secured			5	2,800	13,000
LIABILITIES AGAINST ASSETS
SUBJECT TO FINANCE LEASE			6	3,154	3,961
LONG TERM DEPOSITS				760	1,210
CURRENT LIABILITIES
Current maturities of long term demand
finance and liabilities against assets
subject to finance lease			7	11,387	11,083
Short term borrowings - secured			8	162,107	178,879
Creditors, accrued expenses and
other liabilities			9	35,376	54,319
Provision for taxation			10	9,141	9,449
				------------------	------------------
				218,011	253,730
CONTINGENCIES AND
COMMITMENTS			11
				------------------	------------------
				281,248	299,221
				==========	==========
Karachi: 21st November 2001			Annexed notes form an integral part of these accounts.
FIXED CAPITAL EXPENDITURE
Operating fixed assets - at cost / valuation
less accumulated depreciation			12	73,705	56,309
Capital work in progress				--	1,513
Intangible assets - trade marks				1	1
				------------------	------------------
				73,706	57,823
LONG TERM LOANS TO EMPLOYEES
- secured, considered good			13	269	336
LONG TERM SECURITY DEPOSITS				627	565
CURRENT ASSETS
Stock in trade			14	80,577	90,163
Goods in transit				14,415	32,196
Stores and spares			15	5,264	6,098
Trade debts - unsecured, considered good			16	42,642	44,237
Loans and advances - considered good			17	21,107	23,311
Deposits, prepayments and other receivables			18	30,697	18,572
Cash and bank balances in current accounts				11,944	25,920
				------------------	------------------
				206,646	240,497
				------------------	------------------
				281,248	29,922
				==========	==========
	Syed Yawar Ali				S. Feriel Riffat Ali
	Chief Executive				Director
PROFIT AND LOSS ACCOUNT
For the year ended 30 June 2001
			Note	2001	2000
				(Rupees in '000)
Sales - net			19	758,292	1,017,833
Cost of goods sold			20	(611,841)	(850,620)
				------------------	------------------
Gross profit				146,451	167,213
Administrative expenses			21	37,093	30,251
Selling and distribution expenses			22	117,380	98,290
Financial expenses			23	31,888	28,628
Workers' profit participation			9.1	--	823
				------------------	------------------
				186,361	157,992
				------------------	------------------
				(39,910)	9,221
Other income				19,085	6,407
				------------------	------------------
(Loss)/profit before taxation				(20,825)	15,628
Provision for taxation - current year			10	(9,141)	(9,449)
	- prior year			--	1,183
				------------------	------------------
				(9,141)	(8,266)
				------------------	------------------
Net (Loss)/profit after taxation				(29,966)	7,362
Accumulated loss brought forward				(136,807)	(144,169)
				------------------	------------------
Accumulated loss				(166,773)	(136,807)
				==========	==========
(Loss)/Earnings per share - basic and diluted			26 Rupees	(4.91)	1.42
				==========	==========
Annexed notes form an integral part of these accounts.
	Syed Yawar Ali				S. Feriel Riffat Ali
	Chief Executive