| Karam Ceramics Limited |
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| Annual
Report 1999 |
|
|
| Contents |
|
|
| 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. Rehman |
|
Director |
|
| Sakin
Noorallah |
|
Director |
|
| H.
Hatira Dayala |
|
Director |
|
|
| COMPANY
SECRETARY |
|
| Abdul
Sultan Hamirani |
|
|
|
| AUDITORS |
|
| Taseer
Hadi Khalid & Co. |
|
| Chartered
Accountants |
|
|
| Qavi & Co. |
|
| Chartered
Accountants |
|
|
| BANKERS |
|
|
| Soneri
Bank Limited |
|
| Emirates
Bank International Limited |
|
| Gulf
Commercial Bank Ltd. |
|
|
| REGISTERED
OFFICE |
|
| BC-6,
Block-5, Scheme-5, Kehkashan, Clifton, Karachi. |
|
|
| REGISTRAR
AND SHARE TRANSFER OFFICE |
|
| T.H.K~
Associates (Private) Limited |
|
| Ground
Floor, Sheikh Sultan Trust Building No. 2, |
|
| Beaumont
Road, Karachi. |
|
|
|
| Business
Items |
|
|
| 1.
SANITARYWARE |
|
|
| Simpact - set |
|
| W.C. Cistern |
|
| Wash Basin |
|
| Pedestal |
|
| Bidet |
|
|
| Royal - set |
|
| W.C. Cistern |
|
| Wash Basin, |
|
| Pedestal |
|
|
| Mayfair - set |
|
| W.C. Cistern |
|
| Wash Basin |
|
· |
|
| Pedestal |
|
| Bidet |
|
|
| Venus - set |
|
| W. C. Cistern |
|
| Wash Basin |
|
| Pedestal |
|
|
| Angelo - Set |
|
| W. C. Cistern |
|
| Wash Basin |
|
| Pedestal |
|
|
| Orissa
Asian W.C. |
|
| sanirate
Asian W.C. |
|
| Orient W.C. |
|
|
| Kitchn Sink |
|
| Urinal |
|
| Accessories |
|
| Soap/Paper/Tooth
Brush Holder |
|
| Mirror Plate |
|
| Towel Rails |
|
| Hooks |
|
|
| Ceremic Traps |
|
| S. Trap |
|
| P. Trap |
|
|
| Coloured
& Decorate / Effect |
|
| Glazed
Wall Tiles |
|
| 15cm x 15cm |
|
| 20cm x 50 cm |
|
| 30cm x 30cm |
|
|
|
| Notice
of Meeting |
|
|
| Notice
is hereby given that the 20th Annual General Meeting of the Company will be
held at the |
|
| Registered
Office of the Company on Friday, 24th December, 1999 at 3.00 p.m. to transact
the |
|
| following
business :- |
|
|
| 1.
To confirm the minutes of the 19th Annual General Meeting held on 28th
December, 1998. |
|
|
| 2.
To consider and adopt the Audited Accounts of the Company for the year ended
June 30, 1999 |
|
| alongwith
the Report of the Directors thereon. |
|
|
| 3.
To declare a dividend. The Directors have recommended a cash dividend of 15%
per share. |
|
|
| 4.
To appoint Auditors for the year 2000 and fix their remuneration. |
|
|
| 5.
To transact any other business with the permission of the Chairman. |
|
|
|
By Order of the Board |
|
|
| KARACHI |
|
ABDUL SULTAN HAMIRANI |
|
| November
30, 1999 |
|
Company Secretary |
|
|
| NOTES: |
|
|
| 01.
The Share Transfer Books of the company will remain closed from I7th December
to 24th |
|
| December,
1999 (both days inclusive). |
|
|
| 02.
A member eligible to attend and vote at the meeting may appoint another
member as his/her proxy |
|
| to
attend and vote on his/her behalf. Proxies to be effective must be received
by the company |
|
| not
less than 48 hours before the time for holding of the meeting. |
|
|
| 03.
Members are requested to communicate to the Company or the Registrar to the
Company of any |
|
| change
in their address. |
|
|
|
| Directors'
Report |
|
|
| The
Directors of your company have pleasure in submitting the report alongwith
the audited |
|
| accounts
for the year ended $0th June, 1999. |
|
|
| OPERATING
PERFORMANCE |
|
|
| During
the year under review the company's net sales registered an increase of 8.56%
in comparison |
|
| to
sales for the immediate preceding year. Overall market conditions during the
year were very difficult |
|
| in
the presence of tough competition from imported tiles and uncertain market
conditions in the country. |
|
| Reduction
in import trade price on imported tiles has resulted into unrestricted influx
of imported tiles. |
|
| The
cost of imported raw materials had increased due to downward slide of
Pakistani Rupees against |
|
| world
major currencies and increase in prices of the raw material in the
international market. There |
|
| were
also increases in prices of other inputs especially Gas and Electricity.
Increased in petroleum prices |
|
| has
resulted into incureased in transportation cost. The company could not pass
on the entire increase |
|
| in
the cost of inputs to its customers due to stiff competition, recession and
the erosion in the buying |
|
| power
of the customers. |
|
|
| lnspite
of the above adverse impact your management has been able to slightly
improved the operating |
|
| results
due to economization in expenses and by reducing financial charges. |
|
|
| FINANCIAL
RESULTS |
|
|
| Profit
after tax for the year under review amounted to Rs. 13.30 million as against
Rs. 12.99 million |
|
| for
the previous year. Details of the appropriation recommended by the Directors
are as under:- |
|
|
|
Rupees |
|
| Profit
after Taxation |
|
13,301,010 |
|
| Unappropriated
Profit brought forward |
|
26,872,403 |
|
|
|
--------- |
|
| Profit
available for appropriation |
|
40,173,413 |
|
| APPROPRIATION: |
|
|
|
| Cash
Dividend 15% (1998: 15%) on |
|
|
|
| 10,911,780
shares of Rs. 10/- each |
|
16,367,670 |
|
|
--------- |
|
| Unappropriated
Profit carried forward |
|
23,805,743 |
|
|
|
========= |
|
|
|
|
|
| BOARD
OF DIRECTORS |
|
|
| Following
Directors were elected to the Board of Directors in an extra ordinary general
meeting held |
|
| on
14th December, 1998: |
|
|
| Mr.
Shabanali G. Kassim |
|
Chairman |
|
| Mr,
Irshadali S. Kassim |
|
Chief Executive |
|
| Mr.
Munawarali S. Kassim |
|
Vice Chairman |
|
| Mrs.
MarJam G. Kassim |
|
Director |
|
| Mrs..
Sakin Noorullah |
|
Director |
|
| Mrs.
Shaheen A. Rehman |
|
Director |
|
| Mr.
H. Hatim Dayala |
|
Director |
|
|
|
| The
Board records it appreciation for the valuable services rendered by the
retiring Directors, Mr. Amirali |
|
| H.
Ganji and Mr. S. Faiq Hussain. |
|
|
| The
present monthly remuneration of the Chief Executive and Vice Chairman are as
under:- |
|
|
| -- Chief Executive |
|
Rs. 40,000/- per month |
|
| --
Vice Chairman |
|
Rs. 40,000/- 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 uncertain economic
conditions in the country |
|
| and
influx of imported tiles, the overall demand for the local tiles will remain
depressed. At present |
|
| duty
on import of basic 'raw material is at par with the duty on import of
finished tiles. To compete |
|
| with
the imported tiles, the company has send representation to the Government for
reduction in import |
|
| duty
on the import of basic raw material to 10% as against 25% to 35% being
presently levied. |
|
|
| The
company will also try to improve its market share with rigorous marketing
efforts. Moreover, |
|
| appropriate
measures will be taken to further improve the operating results. |
|
|
| EMPLOYEES
RELATION |
|
|
| The
management would like to place on record the positive attitude of the labour
union during the |
|
| year
under review and we look forward to resolving all issues mutually and with
the active cooperation |
|
| of
the labour union. |
|
|
| AUDITORS |
|
|
| Our
present auditors M/s. Taseer Hadi Khalid & Co., Chartered Accountants and
M/s. Qavi & Co., |
|
| Chartered
Accountants retire and offer themselves for re-appointment. |
|
|
| APPRECIATION |
|
|
| The
Directors take this opportunity to thank the suppliers M/s. R.W. Watts
Limited, Fritta S.L., Cerdec |
|
| A.G.,
shareholders and staff/employees etc. for their cooperation and contribution
towards the progress |
|
| of
the company. We would like to thank the financial institutions and banks
namely Soneri Bank Limited |
|
| and
Askari Leasing Co., for the confidence reposed on the company. |
|
|
| IRSHAD
ALl S. KASSIM |
|
| Chief Executive |
|
|
|
| Financial
Highlights |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
|
| Net Sales |
|
Rs. in Million |
|
339.49 |
312.71 |
|
|
| Profit
/ (Loss) before Tax |
|
Rs. in Million |
|
18.81 |
16.05 |
|
|
| Income Tax |
|
Rs. in Million |
|
5.51 |
3.06 |
|
|
| Profit
/ (Loss) after Tax |
|
Rs. in Million |
|
13.30 |
12.99 |
|
|
| Earning
per Share |
|
Rs. / Share |
|
1.21 |
1.19 |
|
|
| Cash
dividend per Share |
|
Rs. / Share |
|
1.50 |
1.50 |
|
|
|
| Auditors
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Karam Ceramics Limited as at 30
June 1999 |
|
| and
the related profit and loss account and cash flow statement, 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
and after due verification thereof, 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 opionion: |
|
|
| (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 and cash flow statement,
together with the |
|
| notes
forming part thereof, 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 1999 and of the profit and the cash flows 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 in the Central Zakat Fund, established under
Section |
|
| 7
of that Ordinance. |
|
|
| (d)
without qualifying our opinion, we would like to draw attention to the fact'
that the financial |
|
| statements
do not disclose the information regarding "Segment reporting"
required by International |
|
| Accounting
Standard 14. |
|
|
| QAVI & CO. |
|
TASEER HADI KHALID &
CO. |
|
| CHARTERED
ACCOUNTANTS |
|
CHARTERED ACCOUNTANTS |
|
|
| KARACHI:
NOVEMBER 22, 1999 |
|
|
|
| Balance
Sheet |
|
| As
at 30 June 1999 |
|
|
NOTE |
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Share Capital |
|
| Authorised |
|
| 15,000,000
Ordinary Shares of Rupees 10/- each |
|
150,000,000 |
150,000,000 |
|
|
========= |
========= |
|
| Issued,
subscribed and paid-up |
|
3 |
109,117,800 |
109,117,800 |
|
| Unappropriated
profit |
|
23,805,743 |
26,872,403 |
|
|
---------- |
---------- |
|
|
|
132,923,543 |
135,990,203 |
|
| LONG
TERM AND DEFERRED LIABILITIES |
|
4 |
93,486,663 |
83,062,745 |
|
| DEFERRED
INCOME |
|
5 |
6,265,413 |
4,876,497 |
|
| DEFERRED
TAXATION |
|
22 |
3,000,000 |
1,500,000 |
|
|
| CURRENT
LIABILITIES |
|
|
| Short
term finances under mark-up |
|
| arrangements
- Secured |
|
-- |
17,500,000 |
|
|
|
|
| Short-term
finance |
|
6 |
37,204,655 |
7,663,774 |
|
|
|
|
|
| Current/overdue
portion of long-term and |
|
|
|
|
| de[erred
liabilities |
|
7 |
63,924,012 |
51,767,589 |
|
| Bills payable, |
|
|
11,957,825 |
45,656,093 |
|
| Creditors,
accrued expenses and other liabilities |
|
8 |
50,004,572 |
52,650,396 |
|
| Provision
for taxation |
|
22 |
7,333,801 |
5,611,440 |
|
| Unclaimed
dividend |
|
96,581 |
77,501 |
|
| Proposed
dividend |
|
16,367,670 |
16,367,670 |
|
|
---------- |
---------- |
|
|
186,889,116 |
197,294,463 |
|
|
| COMMITMENTS
AND CONTINGENCIES |
|
9 |
|
|
---------- |
---------- |
|
|
422,564,735 |
422,723,908 |
|
|
========= |
========= |
|
| TANGIBLE
FIXED ASSETS |
|
|
| Operating
Assets - At cost less |
|
| accumulated
depreciation |
|
10 |
257,956,023 |
265,155,700 |
|
|
|
|
|
| Capital
work in progress |
|
11 |
-- |
2,709,993 |
|
|
|
|
|
| LONG
TERM DEPOSITS AND PREPAYMENTS |
|
12 |
! 1,072,433 |
7,680,614 |
|
|
| CURRENT
ASSETS |
|
|
| Stores,
spares and loose tools |
|
13 |
596,113 |
868,000 |
|
| Stock in trade |
|
14 |
69,000,365 |
70,259,069 |
|
| Trade
debts - Unsecured considered good |
|
|
19,894,027 |
22,542,320 |
|
| Loans,
advances, deposits, prepayments |
|
|
|
|
| and
other receivables |
|
15 |
18,134,726 |
12,484,504 |
|
|
|
|
| Cash
and bank balances |
|
16 |
45,911,048 |
41,023,708 |
|
|
---------- |
---------- |
|
|
153,536,279 |
147,177,601 |
|
|
|
---------- |
---------- |
|
|
422,564,735 |
422,723,908 |
|
|
========= |
========= |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
| IRSHAD
ALl S. KASSIM |
|
MUNAWAR ALl S. KASSIM |
|
| Chief Executive |
|
|
|
Vice Chairman |
|
|
|
|
|
| Profit
and Loss Account |
|
| For
the year ended 30 June 1999 |
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
| SALES - Net |
|
17 |
339,488,753 |
312,709,783 |
|
| COST
OF SALES |
|
18 |
276,642,683 |
255,147,136 |
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT |
|
|
62,846,070 |
57,562,647 |
|
| OTHER
INCOME |
|
19 |
7,036,353 |
5,690,739 |
|
|
|
---------- |
---------- |
|
|
|
69,882,423 |
63,253,386 |
|
|
|
|
| ADMINISTRATIVE,
SELLING AND GENERAL EXPENSES |
20 |
34,753,359 |
29,644,656 |
|
|
|
|
| FINANCIAL
CHARGES |
|
15,078,465 |
16,712,017 |
|
| WORKERS'
PROFIT PARTICIPATION FUND |
|
990,140 |
844,840 |
|
| WORKERS'
WELFARE FUND |
|
247,799 |
-- |
|
|
---------- |
---------- |
|
|
51,069,763 |
47,201,513 |
|
|
---------- |
---------- |
|
| PROFIT
BEFORE TAXATION |
|
18,812,660 |
16,051,873 |
|
| PROVISION
FOR TAXATION |
|
22 |
|
|
|
| Current year |
|
4,011,650 |
1,563,549 |
|
| Deferred |
|
1,500,000 |
1,500,000 |
|
|
---------- |
---------- |
|
|
5,511,650 |
3,063,549 |
|
|
---------- |
---------- |
|
| PROFIT
AFTER TAXATION |
|
13,301,010 |
12,988,324 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
26,872,403 |
30,251,749 |
|
|
---------- |
---------- |
|
|
40,173,413 |
43,240,073 |
|
| APPROPRIATION: |
|
|
|
| Proposed
dividend 15% (1998: 15%) |
|
16,367,670 |
16,367,670 |
|
|
---------- |
---------- |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
|
23,805,743 |
26,872,403 |
|
|
========= |
========= |
|
| EARNING
PER SHARE - BASIC AND DILUTED |
23 |
1.21 |
1.19 |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
| IRSHAD ALl S. KASSIM |
|
MUNAWAR ALl S. KASSIM |
|
| Chief Executive |
|
Vice Chairman |
|
|
|
| Cash
Flow Statement |
|
| For
the year ended 30 June 1999 |
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
|
| Profit
before taxation |
|
18,812,660 |
16,051,873 |
|
|
---------- |
---------- |
|
| Adjustments
for: |
|
|
|
| Depreciation |
|
28,813,561 |
29,335,647 |
|
| Provision for staff gratuity |
, |
|
3,975,433 |
3,536,052 |
|
| Charge
for Workers' profit participation fund |
|
