Annual Report



ISO 9001 & ISO 14001


Annual Report


Company Information ...........................................................2 Board of Directors................................................................5 Committees of the Board of Directors ..................................7 Vision and Mission Statements.............................................8 Operating Highlights .............................................................9 Notice of 18th Annual General Meeting...............................10 Directors' Report...................................................................12 Statement of Compliance .....................................................23 Review Report to the Members ............................................26 Auditors' Report ....................................................................27 Balance Sheet ......................................................................28 Profit and Loss Account........................................................30 Statement of Comprehensive Income...................................31 Cash Flow Statement ...........................................................32 Statement of Changes in Equity ...........................................33 Notes to the Financial Statements........................................34 Pattern of Shareholding as on 30 June 2010 .......................67 Form of Proxy .......................................................................69



Annual Report


Company Information
Board of Directors Lt Gen Hamid Rab Nawaz, HI (M) (Retired) Lt Gen Javed Alam Khan, HI (M) (Retired) Mr. Qaiser Javed Mr. Riyaz H. Bokhari, IFU Brig Rahat Khan, SI (M) (Retired) Dr. Nadeem Inayat Brig Liaqat Ali , TI (M) (Retired) Brig Agha Ali Hassan , SI(M) (Retired) Brig Parvez Sarwar Khan, SI (M) (Retired)
Company Secretary:

Chairman Chief Executive / MD Director Director Director Director Director Director Director

Brig Sajjad Azam Khan, SI (M), T Bt (Retire d) House No. 62, Khayaban-e-Iqbal (Margalla Road), F-7/2, Islamabad - Pakistan Tel: (051) 9102451 Fax: (051) 9102454 E-mail:

Chief Financial Officer

Mr. Omer Ashraf Tel: (051) 2651762 Ist Floor, Aslam Plaza, 60 Adam Jee Road, Sadar, Rawalpindi Pakistan Tel: (051) 5523836, 5528042, 5528960, 5528963-64 Fax: (051) 5528965-66 Near Village Jhang, Tehsil Fateh Jang District: Attock Tel: 05 7-2538047-48, 2538138, 2538148 Fax: 057-2538025 M/s KPMG Taseer Hadi & Co, Chartered Accountants Fax No: (051) 2822671 M/s Orr Dignam & Co, Advocates Fax No: (051) 2260653
M/s CORPLINK (PVT) LIMITED Wings Arcade, 1-K, Commercial, Model Town, Lahore Ph No: 042-5839182, 5887262 Fax No: 042-5869037

Registered Office and Marketing and Sales Department:




Legal Advisors:

Company Website Registration & Shares Transfer Officer


BUILDING BETTER PAKISTAN Annual Report 2010 Chairman Lt Gen Hamid Rab Nawaz. HI (M) (Retired) 3 .

BUILDING BETTER PAKISTAN Annual Report 2010 Chief Executive & Managing Director Lt Gen Javed Alam Khan. HI (M) (Retired) 4 .

Riyaz H. SI(M) (Retired) Brig Sajjad Azam Khan. Qaiser Javed Mr. IFU Brig Rahat Khan. TI(M)(Retired) Brig Agha Ali Hassan. SI(M) (Retired) Brig Parvez Sarwar Khan.TBt(Retired) Company Secretary 5 . SI (M) (Retired) Dr. SI(M).BUILDING BETTER PAKISTAN Annual Report 2010 Board of Directors Mr. Nadeem Inayat Brig Liaqat Ali . Bokhari.

BUILDING BETTER PAKISTAN Annual Report 2010 Key Management Mir Khawar Saleem Director (Project) New Line Mr. Omer Ashraf Chief Financial Officer Mr. Shahid Ghazanfar GM (Plant) Existing Line Brig Muhammad Sarwar. HR & MIS) 6 . SI (M) (Retired) GM ( Procurement. Rais Ahmad GM (Project) New Line Brig M. Zubair Tahir.SI(M) (Retired) GM (Marketing & Sale) Mr.

Nadeem Inayat Mr. Director (Project) President Member Member Secretary 7 . Company Secretary President Member Member Secretary Audit Committee Mr.BUILDING BETTER PAKISTAN Annual Report 2010 Committees of The Board of Directors Human Resource Committee Dr. Qaiser Javed Mr. Company Secretary President Member Member Member Secretary Technical Committee Brig Rahat Khan (Retired) Brig Liaqat Ali (Retired) Brig Parvez Sarwar Khan (Retired) Mir Khawar Saleem. Qaiser Javed Brig Liaqat Ali (Retired) Brig Sajjad Azam Khan (Retired). Nadeem Inayat Brig Sajjad Azam Khan (Retired). Riyaz H. Bokhari Brig Rahat Khan (Retired) Dr.

BUILDING BETTER PAKISTAN Annual Report 2010 Vision & Mission Statements Vision “To maintain accepted FCCL as a role model cement of corporate social manufacturing Company fully aware of generally principles responsibilities engaged in nation building through most efficient utilisation of resources and optimally benefiting all stake holders while enjoying public respect and goodwill”. 8 . Mission “ FCCL while maintaining its leading position in quality of cement and through greater market outreach will build up and improve its value addition with a view to ensuring optimum returns to the shareholders”.

07 8.75 18.233 1.424.61 8.911 250.648)** 9.48 28.74** 0.57 % Times Times % 5.06 0.88 1.455 515.687.517 1.67 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 2.735 3.32 0.75 26.57 0.984 1.598 5.81** 0.254 202.42 0.421)** 12.191.97 28.01 34.784.60** Rs Rs Rs Rs % Rs 0.98 26.73 Restated 10.203.64 41.53 6.57 4.60 1.66 31.283 1.729.54 9.824 (39.13 0.040 (1.56 16.86 12.16* 3.449.007.819.286.282.10 0.296. ** Excluding fair value of cross currency swap and swap fee payable (non-cash) 9 .206 4.648.68 38.70 10.285 788.563.272 (90.751 9.314.51 16.777.839.32 0.240 1.17 19.21 8.46 0.091.687 1.322 715.217.195 9.76 18.60) 13.58 0.545.939.70) (10.584 366.26 (1.106.218 3.25 0.183 1.63** 0.39 0.92 0.646.134 4.518 454.61 5.292 3. 18.97 13.538 1.93 0.495 995.299 9.599.37 Times Times Times 1.49 0.38 1.85 13.06 6.690.117 324.808.564 413.068) (243.685 23.BUILDING BETTER PAKISTAN Annual Report 2010 2010 Operating Highlights Key Indicators Operating 2004 2005 2006 2007 2008 2009 Gross Profit Margin Operating Profit Margin Pre Tax Margin After Tax Margin Performance Return on total assets Total Assets turnover Fixed Assets turnover Return on Paid up Share Capital Leverage Debt Equity Ratio Current Ratio Quick Ratio Valuation Earnings per share (basic) Breakup Value per share (basic) Breakup Value per share (diluted) Dividend per share Dividend payout Ratio Market Price per share (average) Historical Trends Trading Results Sales-net Gross Profit Operating Profit / (loss) Profit / (loss) before tax Profit after tax Financial Position Shareholders Equity Property plant & Equipment Working Capital Non current liabilities % % % % 32.39 12.95 6.38 1.83 1.62 Nil N/A 14.16 2.12 47.91 20.88 0.623 3.43 Restated 13.68 17.463.179 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 1.223.428 1.82 11.673 759.54 0.70 0.09 0.624 4.50 5.431 Million.52 28.66 18.38 1.658.84 5.576 988.777.75 30.14 0.111 2.450 511.399 * Includes Capital Work In Progress of Rs.08 31.845.28 13.231 740.25 1.31 13.204 (387.112 601.180 646.52 7.28 0.039 510.35 1.54 1.115 312.490 4.112) 2.40 0.96 12.143 1.74 22.291) 314.63 12.567.94 51.69 0.06 1.599 2.103 2.689 18.84 Nil N/A 12.81 15.36 6.138 2.23 0.392.41 3.345 3.148 1.981 7.20 0.50 31% 19.617 4.902 658.96 13.323 3.23 4.76 3.49 8.85 7.09 2.

Rawalpindi. to transact the following business:1. must be received at the Registered Office located at First Floor. A member may not appoint more than one proxy. (2) A member entitled to attend and vote at the Annual General Meeting may appoint a proxy to attend and vote in place of the member. consider and adopt the Audited Accounts of the Company together with the Directors' and the Auditors' Reports for the Year ended 30 June 2010. Any other business with the permission by the Chairman. Sadar. To receive. not less than 48 hours before the Meeting. Proxy Form is attached. 4. A copy of shareholder's attested CNIC must be attached with the proxy form. 3. By order of the Board Place: Rawalpindi Date: 04 October 2010 Brig Sajjad Azam Khan (Retd) Company Secretary NOTES (1) The Share Transfer Books of the Company will remain closed from 19 October 2010 to 25 October 2010 (both days inclusive).BUILDING BETTER PAKISTAN Annual Report 2010 Notice of 18th Annual General Meeting Notice is hereby given that the 18th Annual General Meeting of the Company will be held at 1030 hours 25 October 2010 (Monday) at Hotel Pearl Continental Rawalpindi. in order to be effective. To confirm the Minutes of 6th Extra-ordinary General Meeting held on 10th December. Aslam Plaza. Pakistan duly stamped and signed. To appoint Statutory Auditors of the Company and fix their remuneration. No transfer will be accepted for registration during this period. 2. Proxies. 10 . 60 Adam Jee Road. 2009.

In case of individuals. Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the Proxy Form. the account holder or sub-account holder shall authenticate his/her identity by showing his/her original national identity card or original passport at the time of attending the Meeting. The Proxy shall produce his/her original CNIC or original passport at the time of Meeting. In case of individuals. v. In case of corporate entity. please contact Ph: 051-9102451. the Board of Directors' resolution/ power of attorney with specimen signature of the nominee shall be produced at the Meeting. (b) For Appointing Proxies i. 11 . Fax No: 051-9102454. addresses and CNIC numbers shall be mentioned on the form.BUILDING BETTER PAKISTAN Annual Report 2010 (3) CDC Account Holders are required to follow the under mentioned guidelines as laid down by the Securities & Exchange Commission of Pakistan:(a) For Attending the Meeting i. the Board of Directors' resolution / power of attorney with specimen signature shall be submitted along with proxy form to the Company. The proxy form shall be witnessed by two persons whose names. the account holder or sub-account holder shall submit the proxy form as per the above ii. In case of corporate and Web Site: www. (5) For any other information. (4) Members are requested to promptly notify any change in their iii. iv. E-mail: secretary@fccl.

788 1. 366 Million depicting a decrease of 78 % owing to decrease in cement prices.577.066.625 1.30 % increase in total dispatches of the Industry as compared to the last year.20 Million MT including 23. 1.128.BUILDING BETTER PAKISTAN Annual Report 2010 Directors' Report .74 % decrease in domestic despatches and 20.646.75 Million MT exports. FCCL has dispatched 1.09% and in FY 2009-10 has been 96.66 Million MT exports.684 Financial Performance 5. The profit from operations decreased from Rs.2010 General 1. There is a 9. 250 Million as compared to the last year's profit of Rs. 1.89%.28 Million MT including 20. Production Review 4. 3.54 Million MT domestic and 10. Comparative production figures are given as under:2009 ~ 10 a. which were 31.931 MT exports.92% increase in the export.06 % capacity utilization.258 2008 ~ 09 1. The Company earned a Profit After Tax of Rs.008 Million.09 MT for the FY 2009-10 including 786. b. Market Overview 2. The increase in the domestic dispatches of the industry is 14. Profitability. 12 .06%.119.09 MT domestic and 332. Clinker ( MT) Cement ( MT) 1. Industry dispatches for the FY 2009-10 have been 34. There has been a 11.53 Million MT domestic and 10. Performance of the plant remained above satisfactory level with 96. Capacity utilization of FCCL in FY 2008-09 was 100.065. The Directors of Fauji Cement Company Limited (FCCL) are pleased to present the 18th Annual Report together with audited financial statements of the Company for the year ended 30 June 2010 and Auditors' Report thereon.183.63 % and the decrease in exports is 0.646 Million to Rs.

349 Million to the national exchequer in the form of taxes and duties during the year under review. 13 . 11. Proper books of account have been maintained. Going Concern. There is no doubt that the Company has the ability and strength to operate as a going concern. 8. There has been no material departure from the best practices of corporate governance. The financial statements prepared by the Management present the Company's state of affairs. 10. Fauji Cement earned USD 16. Presentation of Financial Statements. Internal Control System. International Accounting Standards and International Financial Reporting Standards (IFRS) as applicable in Pakistan have been followed in preparation of financial statements. the results of its operations. 9. Accounting Policies.1. 12. 7. Best Practices of Corporate Governance. as given in the listing regulations.BUILDING BETTER PAKISTAN Annual Report 2010 6. Compliance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS).5 Million through export of cement. The system of internal control is sound in design and has been effectively implemented and monitored. Books of Account. Contribution to National Exchequer. The Company contributed a sum of Rs. Concurrently. cash flows and changes in equity in a fair and accurate manner. Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgement. 13.

appointing.206 250.314.538 1.599 875. The Board's primary role is the protection and enhancement of long term shareholders' value.449.000 3.206 4.85 1. below:- Financial Data of Last Six Years.106.000 3.685 23.115 1.43 Restated Diluted 0. It is also responsible for approving and monitoring financial and other reporting.007.490 2010 2009 2008 2007 2006 2005 15.203.735 2.975.716 1.624 4.233 224. establishing and monitoring the achievement of management's goals and ensuring the integrity of internal control and Management Information Systems.687.658. The Company complies with all the requirements of the Code of Corporate Governance as contained in the listing regulations of the Stock Exchanges.191.610. Value of Investment of Employees.584 366.576 988.000 2.455 515.21 Restated 2.845. removing and creating succession policies for the senior management.463.36 0.111 2.197 18.143 1.518 146.283 1.646.091. 76. Dividend.392.323 4.617 4.425.808.902 658.040 12.563.598 3.000 3.73 Restated 1.31 1.981 7. Value as on 30 June 2010 is given below:Management Staff Provident Fund (in Million) : Rs. To fulfil this role. Due to the heavy investment in construction of its New Line.84 Restated 1. 14 .414 9. the Board is responsible to implement overall corporate governance in the Company including approval of the strategic direction as recommended by the Management.248 Non-Management Staff Rs.984 264.272 3. 16.117 41.21 Restated 9.777.285 207.041.549.954 413.980.495 995.283.BUILDING BETTER PAKISTAN Annual Report 2010 14.282.227 9.081. In Million) Net Sales Gross Profit Operating Profit Financial Charges Profit after taxation Balance Sheet Shareholders Equity Fixed Assets Long Term Loans including current portion EPS (Rs) Basic 0.204 6. The Company does not have any outstanding statutory dues.286. Salient Aspects of Company's Control and Reporting Systems.30 1. Key operating and financial data of last six years is given Description Operating Results (Rs. Outstanding Statutory Dues.819.689 18.36 Restated 1.634 510.735.179 5.138 2.105 646.77 0.623 3.545. company has not declared any dividend for its share holders.075. 42.428 1.690. 17.673 229.450 1.297 1. approving and monitoring capital expenditure.112 601.53 Restated 3.

Riyaz H. SI (M) (Retired) Brig Agha Ali Hassan. Responsibilities are delineated by formal authority delegations. Qaiser Javed Mr. (Retired) Mr. TI (M) (Retired) Brig Munawar Ahmed Rana. b. IFU Brig Arif Rasul Qureshi. SI (M) (Retired) Brig Rahat Khan. IFU Brig Rahat Khan. Qaiser Javed Mr. During the year under review. Bokhari. Audit Committee (1) (2) (3) (4) Mr. Attendance of Meetings 19. attendance by each director is given below:- a. Audit Committee. HI (M). SI (M) (Retired) Dr. Riyaz H.BUILDING BETTER PAKISTAN Annual Report 2010 The Board has delegated responsibility for operation and administration of the Company to the Chief Executive / Managing Director. Bokhari. Nadeem Inayat Brig Liaqat Ali. Technical Committee. c. SI (M) (Retired) - No of Meetings Attended 6 6 5 4 3 6 6 5 2 3 b. Nadeem Inayat 5 5 4 3 15 . The Board has constituted the following committees which work under the guidance of Board of Directors:a. HI (M). (Retired) Lt Gen Javed Alam Khan. SI (M) (Retired) Dr. Board of Directors (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Lt Gen Hamid Rab Nawaz. Human Resource Committee.

CEO. need. CFO. the Company continues to enjoy a high degree of goodwill and cooperation with local community as it respects their environment through responsible business practices. Relations With Company Personnel 22. Pattern of Share-holding 21. the Directors. Human Resource Committee. Technical Committee. 24. issues related to annual and half year's financial statements were discussed.BUILDING BETTER PAKISTAN Annual Report 2010 c. Company Secretary. Company Auditors. (1) (2) (3) Brig Rahat Khan (Retired) Brig Arif Rasul Qureshi (Retired) Brig Liaqat Ali (Retired) - No of Meetings Attended NIL - 4 2 4 Note: Chief Financial Officer (CFO) and Internal Auditor were invariably invited to attend the meetings of Audit Committee. Corporate Social Responsibilities 23. The Company has donated relief goods worth 2.2 Million weighing 30 tons and Rupees 16 Million in cash as donation to PM Flood Relief Fund for our brothers and sisters in 16 . Donation to Flood Victims. Concurrently. d. To the best of our knowledge. Relations between the management and the workers continued to be extremely cordial based on mutual respect and confidence contributing to optimal efficiency. their spouses and their minor children have not undertaken any trading in shares of the Company during the FY 2009-10. External Auditors were also invited to attend two meetings of Audit Committee. Disclosures 20. The Company has allocated funds for Provident Fund and Profit Participation Fund for its employees. wherein. The Company runs a free dispensary for the locals and also provides good education facilities up to secondary school level at reasonable fee. Pattern of share-holding as on 30 June 2010 is attached.

2010 As a result of resignation. As a result of resignation. Brig Parvez Sarwar Khan (Retd) has been appointed as Director of the Company with effect from 30 June 2010. SI (M) (Retd). 17 . tendered by Brig Munawar Ahmed Rana. tendered by Brig Arif Rasul Qureshi. Customers' satisfaction through quality assurance. Brig Sajjad Azam Khan. Chartered Accountants will stand retired at the conclusion of the 18th Annual General Meeting. employees' morale and fair deal to its partners in the business. both inside and outside the Country. SI (M). Brig Agha Ali Hassan. Continuous improvement through well planned training. Change of Company Secretary 27. External Auditors 28. they have expressed their willingness for reappointment. SI (M) (Retd).BUILDING BETTER PAKISTAN Annual Report Change of Directors 25. b.T Bt (Retd) has been appointed as Company Secretary with effect from 19 July 2010. Objectives (1) (2) To be a cost effective and efficient organisation. On transfer of Brig Shabbir Ahmed (Retd) to New Line. FCCL has always endeavoured to produce the best quality cement in Pakistan. FCCL is focused on customers' satisfaction. The present Auditors M/s KPMG Taseer Hadi & Co. SI (M) (Retd) has been appointed as Director of the Company with effect from 20 January 2010. 26. However. which is amply reflected in the premium price and its high demand. The Board records its appreciation for the valuable advice and services rendered by the outgoing Directors and welcomes the new Directors on the Board. Product Quality 29. Quality Policy. It strictly adheres to the following:a. b. As a Company. They have also been recommended by the Audit Committee. Following changes have taken place in the Board of the Company:a.

endorsed by UKAS International. Fauji Cement Management is strongly committed to sustainable Environmental & Quality Management. b. Moody International executed the Audit and issued the certificate. Steps like 30.000 trees plantation plan. Environmental Management System 32. Annual Environmental Excellence Award 2010. first ever RDF Plant in Pakistan Cement Industry & energy conservation measures are worth mentioning. Company's measures have been well recognized by the society and independent certification authorities. keeping in view pro active measures taken & further planned to safeguard environment for the next generations. To remain a leading manufacturer of high quality Portland Cement in Pakistan. Fauji Cement is 14001:2004 certified by Moody International and endorsed by UKAS International. Environmental aspect is well considered and taken care in day to day business activities. ISO 9001:2008. To maintain quality culture within FCCL.BUILDING BETTER PAKISTAN Annual Report 2010 (3) (4) (5) Commitment to leadership and team-work. Apparatus for ISO 679 standard is the latest and worth mentioning addition to Fauji Cement QC Labs. 18 . Quality Management System 31. ensuring high quality cement delivery to customers. Quality & Environmental Management System 30. ISO 14001:2004. Fauji Cement fully complies with National & International regulations pertaining to environmental aspect and is always conscious about industrial development impact over the environment. children park development. which will further open business doors for FCCL in global markets. a. Fauji Cement Company has been awarded the environment excellence award. Procedures and systems are appropriately placed and implemented. Laboratory is fully equipped with cement testing apparatus as per National and International Standards. ISO 9001:2008 Fauji Cement Company has been certified with the latest Quality Standards.

2010 Karachi) 19 .BUILDING BETTER PAKISTAN Annual Report 2010 Annual Environmental Excellence Award 2010 Managing Director FCCL receiving Environment Award 2010 from Federal Minister for Environment (August 2.

The Plant started its production on 21st May 2010. b. Fauji Cement signed contract with WARTSILA Finland for supply of 16. Wartsila Power Plant 20 . after successful commissioning. c. since its commissioning.3 MW Power Plant. The Power Plant is dual fired (Gas + Oil) and is operating successfully.BUILDING BETTER PAKISTAN Annual Report 2010 (ISO 9001:2008 Certificate) (ISO 14001:2004 Certificate) 33. Power Plant 16 MW a.

d. At present 94% of the Project work has been completed and commercial production is expected by end of year 2010. b. ever built in Pakistan. The Plant comprises of well renowned equipment with latest technology and efficient systems. New Line of Production .BUILDING BETTER PAKISTAN Annual Report 2010 Future Outlook 34. 21 . having a clinker capacity of 7200 tons per day. Fauji Cement planned to construct a new Cement Plant. Electrical and Refractory Works is signed with DESCON Engineering Limited. Major Equipment Suppliers are:a. c. Overall Plant Picture. ensuring smooth operation of the plant. the highest capacity single production line. Contract for Civil. Special training program has been designed for professionals.7200 TPD Cement Plant Project. Mechanical. POLYSIUS AG Germany LOESCHE GmBH Germany (Vertical Cement Mills) Havor & Boecker Germany (Packing Plant) ABB Switzerland (Electrical Equipment & PLC) 35.

the Board is of the opinion that the Company remains on its way to success. With profound gratitude to the blessings of Allah Almighty. which have enabled the Company to display excellent performance both in operational and financial fields.BUILDING BETTER PAKISTAN Annual Report 2010 Raw Material Storage Pre heater Acknowledgement Raw Mill 36. The Directors express their deep appreciation to our valued customers. HI(M) (Retd) Chairman 22 . Conclusion 37. For and on behalf of the Board Rawalpindi 24 September 2010 Lt Gen Hamid Rab Nawaz. the dedication of Company's employees to their professional obligations and the cooperation extended by financial institutions / government agencies.

2. a DFI or an NBFI or. has been declared as a defaulter by that stock exchange. Casual vacancies occurring in the Board as a result of resignation by directors were filled up by the directors expeditiously as per clause (vi) of Code of Corporate Governance. A complete record of particulars of significant policies along with the dates on which they were approved or amended has been maintained. 23 . being a member of a stock exchange. a listed company is managed in compliance with the best practices of corporate governance. At present. The Company has applied the principles contained in the Code in the following manner:1. including this Company. overall corporate strategy and significant policy guidelines for the Company. 4. Remaining eight (including the Chairman) are non-executive directors. The Board has developed a vision and mission statement. 3. The Company has prepared a 'Statement of Ethics and Business Practices'. the Board comprises nine directors. out of whom only one is an executive director. 5. whereby. 6. Lahore and Islamabad Stock Exchanges for the purpose of establishing a framework of good governance. The Company encourages representation of independent non-executive directors and directors representing minority interests on its Board of Directors. The directors have confirmed that none is serving as a director in more than ten listed companies. which has been signed by all the directors and employees of the Company.BUILDING BETTER PAKISTAN Annual Report 2010 Statement of Compliance with the Code of Corporate Governance For the Year Ended 30 June 2010 This Statement is being presented to comply with the Code of Corporate Governance contained in listing regulations of Karachi. The Management has further elaborated these guidelines into detailed control systems. All the resident directors of the Company have confirmed that they are registered as taxpayers and none of them has defaulted in payment of any loan to a banking company. The same are being updated.

Written notices of the Board meetings. other than that disclosed in pattern of share-holding. All the powers of the Board have been duly exercised and decisions on material transactions. The Directors' Report for FY 2009-2010 has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed. No orientation course for Directors and officials of the Company was conducted during the period under review. The Board met at least once in every quarter. 10. along with agenda and working papers. 9. KSE/N-269 dated 19 January 2009. The Head of Internal Audit has the access to the chair of Audit Committee. The directors. 12. 13. 14. The minutes of the meetings were appropriately recorded and circulated.BUILDING BETTER PAKISTAN Annual Report 2010 7. 8. The meetings of the Board were presided over by the Chairman. 15. The financial statements of the Company were duly endorsed by CEO and CFO before approval by the Board. The Company has complied with all the corporate and financial reporting requirements of the Code. were circulated at least seven days before the meetings. 11. 24 . All the Directors of the Board are fully conversant with their duties and responsibilities as Directors. whenever necessary. including appointment and determination of remuneration and terms and conditions of employment of the CEO have been taken by the Board. The Board has approved the appointment of CFO and Company Secretary including their remuneration and terms and conditions of employment as determined by the CEO. CEO and executives do not hold any interest in the shares of the Company. The Company has complied with approval of transactions with related parties as per Karachi Stock Exchange notice No.

18. that they or any of the partners of the firm.BUILDING BETTER PAKISTAN Annual Report 2010 16. It comprises four members and all of them are non-executive directors including the President of the Committee. 20. The Board has set up an effective internal audit function. 19. The officials conducting internal audit are considered suitably qualified and experienced for the purpose. The meetings of the Audit Committee were held at least once a quarter prior to approval of interim and annual results of the Company as required by the Code. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the Quality Control Review Programme of the Institute of Chartered Accountants of Pakistan. 17. HI (M) (Retired) Chairman NIC No 13101-0409535-9 25 . their spouses and minor children do not hold shares of the Company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by Institute of Chartered Accountants of Pakistan. The Committee is following the terms of reference as given in the Code of Corporate Governance. and are conversant with the policies and procedures of the Company and they are involved in internal audit function on full time basis. Rawalpindi 24 September 2010 Lt Gen Hamid Rab Nawaz. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard. The Board has formed an Audit Committee.

nothing has come to our attention which causes us to believe that the Statement does not appropriately reflect the Company's compliance. where the Company is listed. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Company. distinguishing between transactions carried out on terms equivalent to those that prevail in arm's length transactions and transactions which are not executed at arm's length price recording proper justification for using such alternative pricing mechanism. ISLAMABAD 24 September 2010 KPMG TASEER HADI & CO. We have not carried out any procedure to determine whether the related party transactions were undertaken at arm's length price or not. Listing Regulations No. the Company's corporate governance procedures and risks. CHARTERED ACCOUNTANTS Muhammad Rehan Chughtai 26 . Our responsibility is to review. in all material respects.BUILDING BETTER PAKISTAN Annual Report 2010 Review Report to the Members on Directors' Statement of Compliance with Best Practices of Code of Corporate Governance We have reviewed the Directors' Statement of Compliance with the best practices (“the Statement”) contained in the Code of Corporate Governance prepared by the Board of Directors of Fauji Cement Company Limited. We are not required to consider whether the Board's statement covers all risks or controls. Further. Sub-Regulation (xiii a) of Listing Regulation 35 notified by the Karachi Stock Exchange (Guarantee) Limited vide circular KSE/ N-269 dated January 19. 2009 requires the Company to place before the Board of Director for their consideration and approval related party transactions. to the extent where such compliance can be objectively verified. (“the Company”) to comply with the Listing Regulations No. all such transactions are also required to be separately placed before the Audit Committee. Based on our review. with the best practices contained in the Code of Corporate Governance as applicable to the Company for the year ended June 30. or to form an opinion on the effectiveness of such internal control. 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. 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. Further. 35 of Karachi Stock Exchange (Guarantee) Limited. 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. 35 of Lahore Stock Exchange (Guarantee) Limited and Chapter XI of the Listing Regulations of Islamabad Stock Exchange (Guarantee) Limited. We are only required and have ensured compliance of requirement to the extent of approval of related party transactions by the Board of Directors and placement of such transactions before the Audit Committee. 2010.

and are in agreement with the books of account and are further in accordance with accounting polices consistently applied except for the change as mentioned in note 2. ISLAMABAD 24 September 2010 KPMG TASEER HADI & CO. 1980 (XVIII of 1980).BUILDING BETTER PAKISTAN Annual Report 2010 Auditors’ Report to the Members We have audited the annexed balance sheet of Fauji Cement Company Limited (“the Company”) as at 30 June 2010 and the related profit and loss account. as well as. (ii) the expenditure incurred during the year was for the purpose of the Company's business. Our responsibility is to express an opinion on these statements based on our audit. were necessary for the purposes of our audit. statement of comprehensive income 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. (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. 1984. its cash flows and changes in equity for the year then ended. 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.5 with which we concur. CHARTERED ACCOUNTANTS Muhammad Rehan Chughtai 27 . statement of comprehensive income. we report that: (a) in our opinion. 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. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. and (iii) the business conducted. evaluating the overall presentation of the financial statements. and (d) in our opinion no Zakat was deductible at source under Zakat and Ushr Ordinance. It is the responsibility of the Company's management to establish and maintain a system of internal control. the balance sheet. and. An audit also includes assessing the accounting policies and significant estimates made by management. We believe that our audit provides a reasonable basis for our opinion and. profit and loss account. An audit includes examining on a test basis. and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance. evidence supporting the amounts and disclosures in the above said statements. proper books of account have been kept by the Company as required by the Companies Ordinance. 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 2010 and of the profit. investments made and the expenditure incurred during the year were in accordance with the objects of the Company. 1984. cash flow statement and statement of changes in equity together with the notes forming part thereof. after due verification. (c) in our opinion and to the best of our information and according to the explanations given to us.

026 14.secured Fair value of derivative Deferred liability .secured Current portion of long term financing 6 7 8 9 10 11.unsecured NON .190.674 349.999 1.227 10.707 788.154 143.802 9.825 95.384 3.610.071. 2010 Note SHARE CAPITAL AND RESERVES 2010 Rupees'000 2009 Rupees'000 Share capital Reserves 4 5 7.685 400.CURRENT LIABILITIES Long term financing . These financial statements were authorised for issue by the Board of Directors of the Company in their meeting held on 24 September 2010.407 765.BUILDING BETTER PAKISTAN Annual Report 2010 Balance Sheet as at June 30.419.000 2.419.270.984.778 325.798 9.130 865.909.501 CONTINGENCIES AND COMMITMENTS 13 The annexed notes 1 to 38 form an integral part of these financial statements.020.441.689 - Subordinated loan .916 11 12 7 Retention money payable Liability against shipment in transit CURRENT LIABILITIES Trade and other payables Markup accrued Short term borrowings .698.compensated absences Deferred tax liability .739 2.779.766 728.628.030 72. Chief Executive 28 .887 2.224.000 7.727 1.887 2.446.690.636 - 6.010 21.915 26.

451 54. spares and loose tools Stock in trade Trade debts Advances Trade deposits.684 24.359 164.501 Director 29 .779.400 884.947 1.BUILDING BETTER PAKISTAN Annual Report 2010 Note NON .858 192.014 21.204 6.981 601.446.364 567 47.533 96.078 137.353 717 45.654.514 46.300 1.008.999 1.819.841 18.718 26.217 2.070. short term prepayments and balances with statutory authority Interest accrued Other recievables Cash and bank balances 17 18 19 20 21 22 23 1.038. plant and equipment Long term advance Long term deposits and prepayments 14 15 16 23.CURRENT ASSETS 2010 Rupees'000 2009 Rupees'000 Property.040 5.468 175.777.641 37.060.983 CURRENT ASSETS Stores.

490) (25.110) 1.424 (50.186) (78.179 2009 Rupees'000 6.785) 5.43 1.538 (3.323 (1.687.911 (74.808.517 (413.BUILDING BETTER PAKISTAN Annual Report 2010 Profit and Loss Account For the Year Ended June 30.871) 515.455 (3.638.421.220 (47.941) 3.396 (1.953.206) 324.584 27. 2010 Note SALES Less: Government levies NET SALES Less: Cost of sales GROSS PROFIT Other income Distribution cost Administrative expenses Other operating expenses Finance cost NET PROFIT BEFORE TAXATION Taxation NET PROFIT AFTER TAXATION 24 24 2010 Rupees'000 4.627.902.Basic (Rupees) Earnings per share . Chief Executive Director 30 .737) (103.716) 1.292.314.093.623 25 26 27 28 29 30 31 Earnings per share .894) 1.31 0.1 32.173) (224.260) (103.460) (41.30 1.36 The annexed notes 1 to 38 form an integral part of these financial statements.732) 250.007.2 0.428 190.Diluted (Rupees) 32.

007. Chief Executive Director 31 .609) 423. 2010 2010 Rupees'000 Net profit after taxation Other comprehensive income Effective portion of changes in fair value of cash flow hedge Reclassified when hedge item effected profit or loss Total comprehensive income 35.BUILDING BETTER PAKISTAN Annual Report 2010 Statement of Comprehensive Income For the Year Ended June 30.179 2009 Rupees'000 1.562) (564.623 The annexed notes 1 to 38 form an integral part of these financial statements.429 250.288) (46.585) (19.547 (332.

874) (106.544) 397.363) 3.892.421.145) (24.142 900 (143.728 (5.435 (1.130 19.988) (990.714) (17.935 (146.996 (8.135.831) 125.518) (289.911 327.580 Chief Executive Director 32 .520) 1.375.721) 379.781) 575.678) 378.388 (2.694 (2. 2010 Note Cash flows from operating activities Net profit before taxation Adjustments for: Depreciation Provision for compensated absences Reversal of provision for bad debt Workers' (Profit) Participation Fund including interest and WWF Finance cost Gain on disposal of property.861.195) (3.099 (37.324 12.995. plant and equipment excluding borrowing cost capitalized Proceeds from disposal of property.567) 25.163 722.534) 900 125.849) (66.480 198.BUILDING BETTER PAKISTAN Annual Report 2010 2009 Rupees'000 1.905.517 311.740.813 295.920) 300.407 40.074 18.273) (433.000) 1.237) 4.284 (982) (12.694 (9.841 224.532 (169. deposits.000 (7) (16. short term prepayments and balance with statutory authority Increase in advances.312 124.336) 4.989.825) (75.411 (169.741) (103.750) 439. 2010 Rupees'000 324.926) 5.472 274.549) 2.831) Cash Flow Statement For the Year Ended June 30.361) (334.582 1.000) 4.833 77.861 (4. plant and equipment Interest received on bank deposits Net cash used in investing activities Cash flows from financing activities Repayment of long term finances Proceeds from long-term loans Dividend paid on ordinary shares Dividend paid on preference shares Export refinance Payment of guarantee premium and other cost Finance cost paid Net cash generated from/ (used in) financing activities Increase/ (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 33 The annexed notes 1 to 38 form an integral part of these financial statements.390) 206.006.035 2.739) 31.293 (13. plant and equipment Interest income including interest on long term deposit Operating cash flows before working capital changes Decrease/ (increase) in stores and stocks Decrease/ (increase) in long-term deposits and prepayments Decrease in long-term advance (Decrease)/ increase in retention money Decrease/ (increase) in trade debts Increase in advances (Increase)/ decrease in trade deposits.622) (373.318) (325.090 (1.000 (55) (8. prepayments and other receivables Increase in trade and other payables Cash generated from operations Compensated absences paid Payment to Workers' (Profit) Participation Fund Taxes paid Net cash generated from operating activities Cash flows from investing activities Additions in property.013) (2.610 ( (550.096.330.134 (11.479) (184.749 12.916 (3.


Annual Report


Statement of Changes in Equity
For the Year Ended June 30, 2010
Share capital Ordinary Rupees'000 Balance as at June 30, 2008 Total comprehensive income Profit for the year Other comprehensive income Total comprehensive income Transaction with owners Dividend on preference shares Rs. 0.34 per share Total transaction with owners Balance as at June 30, 2009 Total comprehensive income Profit for the year Other comprehensive income Total comprehensive income Transaction with owners Dividend on preference shares Rs.0.68 per share Total transaction with owners Balance as at June 30, 2010 (296,741) (296,741) 250,179 250,179 250,179 (296,741) (46,562) (584,194) (584,194) 1,007,623 1,007,623 1,007,623 (584,194) 423,429 6,932,895 Preference Rupees'000 486,992 Capital reserve Share premium Rupees'000 1,833,709 Hedging reserve Rupees'000 84,364 Revenue reserve Accumulated profit/(loss) Rupees'000 (53,979) Rupees'000 9,283,981 Total





(16,721) (16,721) 936,923

(16,721) (16,721) 9,690,689





(33,442) (33,442) 1,153,660

(33,442) (33,442) 9,610,685

The annexed notes 1 to 38 form an integral part of these financial statements.

Chief Executive




Annual Report


Notes to the Financial Statements
For the Year Ended June 30, 2010
1 LEGAL STATUS AND OPERATIONS 1.1 Fauji Cement Company Limited ("the Company") is a public limited company incorporated in Pakistan on 23 November 1992 under the Companies Ordinance, 1984. The Company commenced its business with effect from 22 May 1993. The shares of the Company are quoted on the Karachi, Islamabad and Lahore Stock Exchanges in Pakistan. The principal activity of the Company is manufacturing and sale of ordinary portland cement. The Company's registered office is situated at Aslam Plaza, Adamjee Road, Rawalpindi. The Company is in the process of setting up a new cement manufacturing line. For this purpose, the Company has entered into agreements with M/s Polysius AG, M/s Loesche GmbH, M/s ABB Schweiz AG and M/s Haver and Boecker OHG for supply of machinery and related services and M/s Descon Engineering Limited for EPC related work.



BASIS OF PREPARATION 2.1 Statement of Compliance These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984. In case requirements differ, the provisions of, or directives issued under the Companies Ordinance, 1984 shall prevail. 2.2 Basis of measurement These financial statements have been prepared under the historical cost convention except for certain financial instruments which are carried at fair value. The fair value of derivative hedging instruments are based on bank's valuations. These valuations are tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each instrument and using market rates for similar instruments at the measurement date. 2.3 Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates. The financial statements are presented in Pakistan Rupees which is the Company's functional and presentation currency. 2.4 Use of estimates and judgements The preparation of financial statements in conformity with the approved accounting standards require management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.



Annual Report


The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Judgments made by the management in application of the approved accounting standards that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in the ensuing paragraphs. 2.4.1 Property, plant and equipment The Company reviews appropriateness of the rate of depreciation, useful life, residual value used in the calculation of depreciation. Further where applicable, an estimate of recoverable amount of assets is made for possible impairment on an annual basis. 2.4.2 Provision for inventory obsolescence and doubtful receivables The Company reviews the net realisable value of stock in trade and stores and spares to assess any dimunition in the respective carrying values. Net realisable value is determined with reference to estimated selling price less estimated expenditures to make the sales. Further the carrying amounts of trade and other receivables are assessed on a regular basis and if there is any doubt about the realisability of these receivables, appropriate amount of provision is made. 2.4.3 Taxation In making the estimates for income taxes payable by the Company, the management refers to the applicable law and the decisions of appellate authorities on certain issues in the past. The Company regularly reviews the trend of proportion of incomes between Presumptive Tax Regime income and Normal Tax Regime income and the change in proportions, if significant, is accounted for in the year of change. 2.4.4 Derivative hedging instrument designated as a cash flow hedge The Company reviews the changes in fair values of the cross currency swap at each reporting date based on the valuations received from the contracting bank. These valuations represent estimated fluctuations in the relevant variables over the reporting period. 2.4.5 Contingencies The Company reviews the status of all the legal cases on a regular basis. Based on the expected outcome and lawyers' judgments, appropriate provision is made. 2.5 Change in accounting policy The Company applies revised IAS 1 " Presentation of Financial Statements", which became effective from January 1, 2009. The Company has accordingly presented all changes in owners equity in the statement of changes in equity, whereas all non-owner changes in equity are presented in the statement of comprehensive income. Comparative information has been re-presented in conformity with the revised standard. The change in accounting policy impacts presentation only without any impact on earning per share.


Minimum Funding Requirements and their Interaction Amendments to IFRS 1 First-time Adoption of IFRSs Amendments to IFRS 7 Financial Instruments: Disclosures Amendments to IAS 1 Presentation of Financial Statements Amendments to IAS 34 Interim Financial Reporting Amendments to IFRIC 13 Customer Loyalty Programmes 1 July 2010 1 July 2010 1 January 2011 1 January 2011 1 January 2011 1 January 2011 1 January 2011 1 January 2011 1 January 2011 Other accounting developments Disclosures pertaining to fair values for financial instruments The Company has applied Improving Disclosures about Financial Instruments (Amendments to IFRS 7). that require enhanced disclosures about fair value measurements in respect of financial instruments.7 Amendments to IFRS 3 Business Combinations Amendments to IAS 27 Consolidated and Separate Financial Statements IAS 24 Related Party Disclosures (revised 2009) These amendments will result in increase in disclosures in the Fund's financial statements Amendments to IFRIC 14 IAS 19 The Limit on a Defined Benefit Assets. amendments to standards and interpretations are effective for annual periods beginning after 1 July 2009. these are not relevant to the Company except in few cases these may require additional disclosure.BUILDING BETTER PAKISTAN Annual Report 2. issued in March 2009. Improvements to IFRSs 2009 - Effective date Amendments to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations 1 January 2010 Amendments to IFRS 8 Operating Segments 1 January 2010 Amendments to IAS 1 Presentation of Financial Statements 1 January 2010 Amendments to IAS 7 Statement of Cash Flows 1 January 2010 Amendments to IAS 17 Leases 1 January 2010 Amendments to IAS 36 Impairment of Assets 1 January 2010 Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards Additional Exemptions for First-time Adopters 1 January 2010 Amendments to IFRS 2 Share-based Payment Group Cash-settled Share-based Payment Transactions 1 January 2010 Amendment to IAS 32 Financial Instruments: Presentation Classification of Rights Issues 1 January 2010 IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments 1 July 2010 Amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters 1 July 2010 Improvements to IFRSs 2010 2. and have not been applied in preparing these financial statements. The amendments require that fair value measurement disclosures use a three-level fair value hierarchy that reflects the 36 .6 Standards. interpretations and amendments 2010 The following standards. However.

Specific disclosures are required when fair value measurements are categorised as Level 3 (significant unobservable inputs) in the fair value hierarchy. Taxable temporary difference are adjusted by the portion of income expected to fall under presumptive tax regime in accordance with the requirement of Accounting Technical Release . in which case it is recognized in equity. 3. including the reasons therefore. changes in valuation techniques from one period to another. Furthermore.BUILDING BETTER PAKISTAN Annual Report 2010 significance of the inputs used in measuring fair values of financial instruments. unused tax losses and tax credits can be utilized. plant and equipment except freehold land and capital work in progress are stated at cost less accumulated depreciation and impairment loss. rebates and exemptions available. Current Provision for current taxation is based on taxable income at the current rate of tax after taking into account applicable tax credits. if any.27 of the Institute of Chartered Accountants of Pakistan. Deferred Deferred tax liabilities are generally recognized for all major taxable temporary differences and deferred tax assets are recognized to the extent that is probable that taxable profits will be available against which the deductible temporary differences. Freehold land and capital work in progress are stated at cost less allowance for impairment. Revised disclosures in respect of fair values of financial instruments are included in note 35. plant and equipment includes acquisition cost. distinguishing between transfers into and out of each level. Transfers from capital work in progress are made to the relevant category of property. plant and equipment Property. are required to be disclosed for each class of financial instruments. 3. The amount of deferred tax recognized is based on expected manner of realization or settlement of the carrying amount of assets and liabilities using the tax rates enacted or substantially enacted at the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of all major taxable temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of tax. Cost of property. if any. if any.2 Property. The amendments require that any significant transfers between Level 1 and Level 2 of the fair value hierarchy be disclosed separately. borrowing cost during construction phase of relevant asset and other directly attributable costs. which adresses change in accounting policy. plant and equipment as and when the assets are available for use. 37 .1 Taxation Income tax expense comprises current and deferred tax.5. The effect of the adjustment is charged or credited to income currently. Income tax is recognized in profit and loss account except to the extent that it relates to items recognized directly in equity. 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to the period presented in these financial statements except as explained in note 2.

plant and equipment over their estimated useful lives at the rates specified in note 14. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined. For available-for-sale financial assets that are equity securities. if any. For items which are slow moving and/ or identified as surplus to the Company's requirements. plant and equipment and are recognized on net basis within "other income" in profit or loss. Depreciation on depreciable assets is commenced from the month the asset is available for use upto the date when the asset is disposed off. plant and equipment are determined by comparing the proceeds from disposals with the carrying amount of property. available-for-sale financial assets that are debt securities. The cost of replacing an item of property.4 Stores. Exchange differences are included in the profit and loss account. Impairment losses are recognized as expense in the profit and loss account. 3. The carrying amount of the replaced part is derecognized. Cost of work in process and finished goods comprises cost of direct materials. spares and loose tools are valued at weighted average cost except for items in transit which are stated at cost incurred upto the balance sheet date.BUILDING BETTER PAKISTAN Annual Report 2010 Depreciation is charged to income on the straight line method so as to write off the depreciable amount of the property. The Company reviews the carrying amount of stores and spares on a regular basis and provision is made for obsolescence. Materials in transit are stated at cost comprising invoice value plus other charges paid thereon. spares and loose tools Stores. 3. net of depreciation or amortisation. Stock of packing material is valued principally at moving average cost. All monetary assets and liabilities in foreign currencies are translated at exchange rates prevailing at the balance sheet date. recoverable amount is estimated in order to determine the extent of the impairment loss. work in process and finished goods are valued principally at the lower of average cost and net realizable value. except for those in transit. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.5 Stock in trade Stock of raw material.6 Foreign currency transactions Transactions in foreign currencies are recorded into local currency at the rates of exchange prevailing at the date of transaction. 3. plant and equipment are recognized in profit or loss as incurred. Gains and losses on disposal of an item of property. the reversal is recognised directly in equity. 3. 38 . plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. labour and appropriate manufacturing overheads. If any such indication exists. if no impairment loss had been recognised.3 Impairment The carrying amount of the Company's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment loss. For non-financial assets. The cost of the day to day servicing of property. adequate provision is made for any excess book value over estimated net realizable value. Net realizable value signifies the estimated selling price in the ordinary course of business less estimated cost of completion and estimated costs necessary to be incurred in order to make a sale. financial assets measured at amortized cost. the reversal is recognised in profit and loss account.

if any. which is the fair value of the consideration to be paid in future for goods and services received. Borrowing cost includes exchange differences arising from foreign currency borrowings to the extent these are regarded as an adjustment to borrowing costs. 39 . The Company's contribution is charged to the profit and loss account.9 Financial instruments Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument and assets and liabilities are stated at fair value and amortized cost respectively. 3. Trade and other payables Liabilities for trade and other amounts payable are carried at cost.10. Trade debts and other receivables Trade debts and other receivables are recognized at original invoice amount less allowance for impairment. Known bad debts are written off. Subsequent to initial recognition. whether or not billed to the Company .11 Staff retirement benefits Provident fund The Company operates a defined contributory provident fund scheme for permanent employees.10 Borrowing cost Borrowing costs are recognised as an expense in the period in which they are incurred except where such costs are directly attributable to the acquisition. Profit on deposits and advances is accounted for on a time proportion basis using the applicable rate of interest.7 Revenue recognition 2010 Revenue from sales is recognized when significant risks and rewards of ownership are transferred to the buyer. while the difference between the original recognized amounts (as reduced by periodic payments) and redemption value is recognized in the profit and loss account over the period of borrowings on an effective rate basis. when identified. The borrowing cost on qualifying asset is included in the cost of related asset as explained in note 3. less attributable transaction costs. markup bearing borrowings are stated at originally recognized amount less subsequent repayments. Scrap sales and miscellaneous receipts are recognised on realised amounts. 3. The Company de-recognizes the financial assets and liabilities when it ceases to be a party to such contractual provision of the instrument. 3. construction or production of a qualifying asset in which case such costs are capitalised as part of the cost of that asset. 3. Monthly contributions are made to the fund @ 10% of the basic salary both by the Company and employees. Off-setting of financial assets and liabilities A financial asset and a financial liability is offset and the net amount is reported in the balance sheet if the Company has a legally enforceable right to set-off the recognized amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.8 Mark-up bearing borrowings Mark-up bearing borrowings are recognized initially at cost.BUILDING BETTER PAKISTAN Annual Report 3.

and changes therein are accounted for as described below. In other cases the amount recognised in equity is transferred to profit or loss in the same period that the hedged item affects profit or loss. the effective portion of changes in the fair value of the derivative is recognised and presented in the hedging reserve in equity. provisions are reviewed at each balance sheet date and adjusted to reflect current best estimate.12 Derivative financial instruments and hedging activities The Company holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. cash and cash equivalents comprise cash in hand. or the designation is revoked.BUILDING BETTER PAKISTAN Annual Report Compensated absences 2010 The Company also provides for compensated absences of its employees on unavailed leaves according to the Company's policy. terminated. Derivatives are recognised initially at fair value. together with the methods that will be used to assess the effectiveness of the hedging relationship. including the risk management objectives and strategy in undertaking the hedge transaction. 3. Cash flow hedge When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss. Subsequent to initial recognition. The Company makes an assessment. deposits at banks and running finances. and whether the actual results of each hedge are within a range of 80-125 percent. The amount recognised in equity is removed and included in profit or loss in the same period as the hedged items affect profit or loss.14 Provisions A provision is recognized in the balance sheet when the Company has a legal or constructive obligation as a result of a past event. If the hedging instrument no longer meets the criteria for hedge accounting. 3. then hedge accounting is discontinued prospectively. attributable transaction costs are recognised in profit or loss as incurred.13 Cash and cash equivalents For the purpose of cash flow statement. On initial designation of the hedge. both at the inception of the hedge relationship as well as on an ongoing basis. When the hedged item is a non-financial asset. exercised. 40 . discounted at a pre tax rate that reflects current market assessment of the time value of the money and the risk specific to the obligation. The cumulative gain or loss previously recognised and presented in the hedging reserve in equity remains there until the forecast transaction affects profit or loss. 3. However. expires or is sold. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss. whether the hedging instruments are expected to be “highly effective” in offsetting the changes in the fair value or cash flows of the respective hedged items during the period for which the hedge is designated. derivatives are measured at fair value. the Company formally documents the relationship between the hedging instrument(s) and hedged item(s). and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. the amount recognised in equity is transferred to the carrying amount of the asset when the asset is recognised. Provisions are measured at the present value of expected expenditure.

465 6.1) 48.895 3.419.992 7.887 486. 4 SHARE CAPITAL ISSUED.713.85 per share .994.187 (2009 : 48. 10 each issued at a discount of Rs.10 each fully paid in cash 199. adjusted for the effects of all dilutive potential ordinary shares which includes convertible preference shares and convertible subordinated loan.699 486.419. 3.paid in cash 322.813 (2009 : 951. Basic EPS is calculated by dividing the profit and loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.887 741.225.310 Ordinary shares of Rs.225. 10 each.289 48.300.85 per share .BUILDING BETTER PAKISTAN Annual Report 3.325 1. 6 per share-paid in cash 693.105 2009 Rupees '000 1.433 Ordinary shares ÿ 171. 3.325 322. Diluted EPS is determined by adjusting the profit and loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding.992 7.433 Ordinary shares of Rs. 10 each and 48.699.187) preference shares of Rs.546 3.16 Dividend Dividend on ordinary shares is recognized as a liability in the period in which it is declared.932. 10 each issued at a premium of Rs.713.300.932.699 Preference shares of Rs.15 Earnings per share 2010 The Company presents basic and diluted earnings per share (EPS).310 199. 41 .988 AUTHORIZED SHARE CAPITAL This represents 951.895 693.105 1. Dividend on preference shares is recognized as a liability when the conditions as agreed with the preference shareholders are fulfilled.699.813) ordinary shares of Rs.988 2010 Rupees '000 1.994.10 each issued at a discount of Rs.289 Preference shares (note 4. 3.546 Ordinary shares of Rs.465 6. SUBSCRIBED AND PAID UP CAPITAL 2010 2009 Number '000 Number '000 171.paid in cash 741.

Fauji Foundation holds 186.408 240. This loan is subordinate to all senior lenders.830) 936.000 (2009 : 18.923 2.1 Preference shares have the following characteristics : (I) 2010 Entitling the holder to receive cumulative preferential dividend in the event the Company has funds available from operations to pay the preferential dividend.000) and 18.3% per annum starting to accrue after 2 years' grace period from the date of first drawdown. Note 2010 Rupees'000 1.750. 18.190.609) (499.798 2009 Rupees'000 1.2 Convertible into ordinary shares at any time without further payment. Fauji Fertilizer Bin Qasim Limited and Fauji Oil Terminal & Distribution Company Limited hold 93. FF has an option to convert all or any part of any amounts due and owing to FF under the agreement into ordinary shares of the Company at the par value of Rs.000).709 (499. having the same rights as ordinary shares in the Company including pari passu voting rights with ordinary shares.Unsecured This represents unsecured sub-ordinated loan provided by Fauji Foundation (FF.833. In addition Fauji Fertilizer Company Limited.674) (351.187) preference shares of the Company at the year end.573 210.000 (2009 : 93.571) 1.239.750.897) (796.750. 10 per share or at below par value as decided by FF. Except as provided above.BUILDING BETTER PAKISTAN Annual Report 4.270.699. The principal is repayable in four equal half yearly installments and the mark-up is repayable on half yearly basis after all the dues relating to senior lenders are repaid in full.660 2.239.709 (796.1 Hedging reserve 5. This loan carries mark-up at 6 month's KIBOR plus 2.187 (2009 : 48.750.153. such conversion being irreversible once exercised.221) (19.1 Fair value of cross currency swap Recycling effect when hedge item effected the profit and loss account (444.830) 6 Hedging reserve (non-cash) primarily represents the effective portion of changes in fair values of designated cash flow hedges.020 (2009 : 186.699.571) (480. SUBORDINATED LOAN . it is profitable and current on its debt service obligations. 42 .802 5 RESERVES Capital Share premium Hedging reserve Revenue Accumulated profit 5.833.750.000) ordinary shares respectively of the Company at the year end. This loan is unsecured however as per the terms of agreement.885 175.687 227.750. Year ending 2011 2012 2013 2014 2015 Amount of dividend Rupees '000 66.020) ordinary shares and 48. the major sponsor).000 (2009: 18.785 (ii) (iii) 4.

414 (70. My Bank Limited and Soneri Bank Limited. 2016 Semi annual Semi annual Semi annual Semi annual Less: Unamortized transaction cost portion of (103.275) 12.000 6 month's KIBOR + 2% The Royal Bank of Scotland N. 7. Bank of Khyber. Bank Al Habib Limited. 2010 Syndicate Finance -2 7.8% National Bank of Pakistan 1.V.554.000 1. 2017 13 semi annual installments ending January 19.693 6 month's LIBOR + 0.689 4.030 7.85% 2 semi annual Semi annual installments ended March 23. 2018 10 semi annual installments ending July 20.549. Pak Libya Investment Company Limited.Loans from banking companies-under mark up arrangements Rate of interest per annum 2010 Lender Note 2010 Rupees'000 2009 Rupees'000 Outstanding Interest installment payable Syndicate Finance -1 - 325.499. United Bank Limited.909.000) 6.980.25% Habib Bank Limited 384.227 (325. 43 .1 This is a syndicated term finance facility obtained from consortium of banks consisting of Allied Bank Limited.500. 2017 14 semi annual installments ending May 7.2 7.466) 6.000 - 6 month's KIBOR + 2.384) 11 semi annual installments ending February 16.1 3.BUILDING BETTER PAKISTAN Annual Report 7 LONG TERM FINANCING-Secured .000 - 6 month's KIBOR + 2.740. Bank Alfalah Limited.227 Less: Current portion under current liabilities shown (1.000 6 month's KIBOR + 0.700.

550 Foreign lenders Local lenders 8 FAIR VALUE OF DERIVATIVE Fair value of cross currency swap Less: Current portion shown under current liabilities 444.2 7.compensated absences Compensated absences Balance at beginning of the year Add: Charge for the year Less: Amount paid during the year Less: Amount transferred to current liabilities 2010 Rupees'000 2009 Rupees'000 14.842 19.833 25.154 12. the dates at which the exchange of the principal is required equals that of the debt and the interest payment exchange dates under the cross currency swaps are the same as the interest payment dates under the debt.766 44 .3 2010 This foreign currency loan facility is an Export Credit Agency (Euler Hermes Kreditversicherungs-AG (Hermes)) backed term finance facility obtained through The Royal Bank of Scotland N.026 - The Company has entered into cross currency swap agreements to hedge its foreign currency exposure on foreign currency floating rate borrowing under a finance facility agreement with The Royal Bank of Scotland Limited.221) 11 (372. 9 DEFERRED LIABILITY .648) 72. Under the swap agreement.842 (4.435 34.000 4. Fair value of derivative represents present value of future cash inflows/ outflows. The above facilities are secured by way of creation of 1st pari passu mortgage over the immovable property of the Company and hypothecation charge over all current and future assets of the Company with 25% margin. the Company will receive applicable LIBOR and USD principal at the date of payment and pay applicable KIBOR +1.452 (5.V.585.221 (480.076) 10. Because the nominal amounts of the cross currency swaps equal that of the debt.145) 14. Allied Bank Limited is the security trustee and inter creditor agent on behalf of all the first pari passu lenders.745) 14. it is concluded that there is no ineffectiveness in the hedge design.987 (11.825) 20.707 13.550 1.277 (13.BUILDING BETTER PAKISTAN Annual Report 7.960.4 Undrawn facilities Facilities undrawn at the year end were as follows: 2010 Note Rupees'000 2009 Rupees'000 2.674 480.5% and the principal in Pak Rupees to hedging party.625. 7.

1 8 11.276 1.470 349.442 2.483 35. Compensated absences over and above the period of 30 days are paid to the employees as per the Company policy.127 74.296 62.681 64.676 60.952 45 .BUILDING BETTER PAKISTAN Annual Report 2010 10 As per the rules of compensated absences.413 328 74.396 17.221 106.Net Deductible temporary differences Unused tax losses Taxable temporary difference Excess of accounting book value of fixed assets over their tax base (88. 11.1 This includes an amount of Rs.030 74.952 (24. This is unsecured.721 2.648 324. WPPF and WWF Charge for the year at the rate of 5% 2010 Rupees'000 74.269 1.741) 74. interest free and payable on demand. an associated undertaking which represents payments made on the Company's behalf.636 728.508 50.714 40.503 480.2 Workers' (Profit) Participation Fund (WPPF) Balance at beginning of the year Interest on funds utilised in the Company's business Allocation for the year Payment to the fund during the year Allocation for the year is made up as follows: Profit for the year before tax.952 27.745 33.698.252 372.662 788.874) 17.154 11 TRADE AND OTHER PAYABLES Creditors Accrued liabilities Retention money Security deposits Advances from customers Current portion of fair value of cross currency swap Swap fee payable Workers' (Profit) Participation Fund Workers' Welfare Fund Excise duty payable Other liabilities Compensated absences Dividend payable on preference shares Unclaimed dividend 11.825 11.185 39.470 6.176 136.026) 876.952 1. 50 million (2009: 50 million) payable to Fauji Foundation.678 4.661 251.499.128 17. 2009 2010 Note Rupees'000 Rupees'000 DEFERRED TAX LIABILITY .441.923 75.076 16.366 81. Actuarial valuation has not been carried out as the impact is considered immaterial.154 728. unavailed leaves up to 30 days are payable at the time of retirement.619 5. Therefore the balance of unavailed compensated absences over that period has been transferred to current liabilities.952 922 17.470 (75.703 254.2 315.674 197.470 2009 Rupees'000 24.

979 million payable by the Company out of which Rs. Running finance facility carries markup ranging from 1 month's KIBOR plus 1. 18. The status of the cases out of the above amount are as follows: (i) (ii) Case for Rs. 13 CONTINGENCIES AND COMMITMENTS 13. 87. 1969 for constitution of an Alternate Dispute Resolution Committee (ADRC) on the above cases. FBR has informed the Company that recommendations of ADRC are not acceptable and advised the Company to plead the cases in the above referred court of law.2% per annum and export refinance carries markup at 8. 20.630 million (2009: Rs. The Company filed an application before FBR under Section 47A of the Sales Tax Act.343 million in respect of items which are considered by the Federal Board of Revenue (FBR) as not qualifying for the concessionary rate of duty.000 765. 14. Both the above cases are pending in appeals before the Supreme Court of Pakistan.BUILDING BETTER PAKISTAN Annual Report 2010 2009 Rupees'000 345. 1992 against an undertaking provided by the Company. Demand for Rs.620 million) from banking companies.9% per annum of the utilized amount and payable on a quarterly basis. Remaining amount of Rs. 1. 39.5% . Subsequent to the release of plant and machinery. 2004 and the Company has asked for details of this claim. the Custom Authorities raised a demand of Rs. 15.637 799. as the management is confident that the case will ultimately be decided in favour of the Company.056 million so arising. 828.048 million was decided in the Company's favour by the Sindh High Court (SHC).5% .727 12. b) The Company is contesting a claim for damages in civil court.778 2010 Note Rupees'000 12 SHORT TERM BORROWINGS . 1990 and Section 195C of the Customs Act. Case for Rs.1 12.secured Running finance Export refinance 12. 32. A demand of Rs.257 million has been raised by the Assistant Collector of Customs on September 21.1 Contingencies a) The Custom Authorities allowed release of plant and machinery imported by the Company at concessionary rates of duty in terms of SRO 484(1)/92 dated May 14. SI/NISC/IB/191/96-VI dated 31 December 1999. (iii) (iv) (v) (vi) Case for Rs. 46 . The management of the Company is confident of a favourable outcome. 347. filed by a supplier of raw materials upon termination of its contract of services.285 million is pending with Custom Authorities. The proceedings of ADRC were concluded and final recommendations were forwarded to FBR. has not been accounted for. Arbitrators of the case have ascertained a liability of Rs.514 million has been claimed by Custom Authorities by revising the total demand of custom duty as being short levied as per letter No.090 865.1 The Company has running finance and export refinance limits to the tune of Rs. These facilities are secured against first pari passu/ranking charge by way of hypothecation over the present and future assets of the Company (excluding land and building) retaining 25% margin.2 66.923 million has been provided for in these financial statements.797 million was decided by SHC against the Company. 1.442 million is pending before SHC.778 420. 318. The net liability of Rs.

5. 2009. The arbitrators have given their recommendations with the dissenting note by the arbitrator of the supplier. 311 million (2009: Rs. These guarantees are secured against margin/lien on bank deposits of Rs.200 tons per day clinker capacity. 96 million (2009: 3.15 million in a tribunal of Arbitrators filed by a supplier of plant and machinery against which the Company has filed a counter claim of Euros 410. 31. spare parts and coal valuing Rs. 21. For tax related contingency refer note 31.32 million which is appearing under payables in these financial statements. the Company has a strong position to challenge the award in case the supplier approaches the court again. 137 million (2009: Rs. No provision has been made against any liability as the management is confident that the case will be decided in favour of the Company.616 million). 64. The Company is contesting a claim of damages amounting to Rs.1. The Company is contingently liable in respect of guarantees amounting to Rs.75 million filed by a supplier of plant and machinery arising from encashment by the Company of bank guarantee amounting to Rs. 19. No liability has been accounted for as the management is confident that the Company has strong grounds to argue the case.120 equivalent Pak Rs. d) e) f) g) 13.284 million (less the aggregate sum of equivalent Pak Rs. 2009. the management is confident that the case will be decided in favour of the Company. Therefore. The cement manufacturers (including the Company) have filed a review petition in Lahore High Court (Court) and also challenged the CCP order in the Court .914 equivalent Pak Rs. Based on expert legal advice. 23 million and against first pari passu ranking charge by way of hypothecation over the present and future assets of the Company (excluding land and building) retaining 25% margin. 311 million) issued by banks on behalf of the Company in the normal course of business.2 Commitments a) Contracted capital commitments of Rs. the case was referred to the umpire who had also given his recommendations on July 8.BUILDING BETTER PAKISTAN Annual Report 2010 c) The Company is contesting a claim for damages amounting to Euros 833. The supplier had to file these recommendations in the court of law for getting court decree within 90 days from the above referred date which time period has lapsed on October 8.64 million and Rs. 11.203 million) for imports related to new cement manufacturing line. 3. The Company has opened letters of credit for the import of machinery.269 million) in respect of new cement manufacturing line. 2007 and imposed a penalty of Rs.33 million previously recovered/adjusted by the Company). 266 million on the Company. The management believes that since the right of supplier to go to the court has lapsed. The case is currently in High Court. Competition Commission of Pakistan (CCP) has issued a show cause notice dated October 28. 2008 to 21 cement manufacturers (including the Company) under section 30 of the Competition Ordinance. The Company has entered into agreements with various suppliers for the construction of new line with 7. 202 million (2009: 9. b) 47 . This includes letters of credit aggregating Rs.

643 25. PLANT AND EQUIPMENT Building on Plant.173.905 11.246 1.539) 3.396 221.538.160 8.498 4.680 60.095 81.731 2.266 7.947) 14.030 37.540) 21.308 (6.759 14.752 157.211 14.246 4% 4% 815.522) 143.178 8.497.432 827 9.667.466 12.752 5.539) 60.855 27.872 725 5.132 (20) 33.204 23.131.127 4.214 68.510.676 27.067 5.264) 3.514.506 2.845 (6.067 1.644 71.900 (3.457 5.263 32.067 18.567 26.491 4.2010 BUILDING BETTER PAKISTAN 2010 Rates of depreciation .225 8.249 10%-15% 636.127 229.14 PROPERTY.964 69.668 598 7.310 3.676 21.989 11.346 695.771 4.153.070 (5.583 33.303 10.538.018 25.405 1.288.552 12.220 212 8.516 294.908.173.2009 Carrying amounts .600 3.246 Cost Balance as at 01 July 2008 Additions during the year Disposals Transfers Balance as at 30 June 2009 48 141.178 64.855 27.740 12.819.704 1.855 27.246 141.189.474.431.372.130 (3.266 1.135 2.809 128.855 10% 14.329 25.538.949.542 5.669 (1.458 6.050 99.244) 81.804 5.855 27.749 (5.027 19.034 2.819 5.625 146.316.849 5.290 7.525) 18.067 Rupees'000 Rupees'000 Rupees'000 Rupees'000 Rupees'000 Rupees'000 Rupees'000 Rupees'000 Rupees'000 9.431.784 6.261 66.558 60.285.680 2.540) 128.510.950.873 76.040 Depreciation Balance as at 01 July 2008 Depreciation charge for the year On disposals Balance as at 30 June 2009 Annual Report Balance as at 01 July 2009 Depreciation charge for the year On disposals Balance as at 30 June 2010 Carrying amounts .238.432 30.483.800 1.883 8.474.118 62.867.722 2.1) Total Freehold land Rupees'000 141.600 327.777.313 (84) 45.339 2.973.597 732 6.050 2.246 141.457 8.785 25% 141.625 8.466 18.644 13.597 17.804 Computers Electric Furniture installation and and fittings other equipment Motor vehicles Quarry road Capital work and in progress development (note 14.558 23.318 15% Balance as at 01 July 2009 Additions during the year Disposals Transfers Balance as at 30 June 2010 47.063.334 59.118 12.950.855 27.109 (319.984.999 27.752.855 27.684 3.246 141.33% 66.835 2.078 2.686 76.455 756.390 311.339 6.855 2. Office freehold land machinery and equipment equipment Rupees'000 1.072 911.355 (7.930 15% 695.181.606) 27.285.211 21.259 32.381 2.186 (7.

3 14.228.2 Depreciation charge for the year has been allocated as follows: 2010 Rupees'000 Cost of sales Distribution cost Administrative expenses 310.538.191 513.557.405.119 4.46% (2009:15.107 14.17 %) per annum.408 35.405.1.3 Borrowing cost has been capitalized at a capitalization rate of 14.876 14.BUILDING BETTER PAKISTAN Annual Report 2010 Rupees'000 2010 Note 14.211 18.431.067 14.130 2009 Rupees'000 297.689 239.211 325.724 513.109 5.246 325.749 49 .1 Capital work in progress Breakup of capital work in progress is as follows: Existing project: Civil works Advances Expansion project: Advances Plant and machinery Civil works Directly attributable expenditure 14.510 327.739 2.801 14.431.216 2.582 58.495 311.458 2.1 Advances Advances for civil works Advances for plant and machinery 14.389 6.266 14.2 Directly attributable expenditure Salaries. wages and other benefits Borrowing cost Professional charges Others 75.689 11.1.876 9. 14.1.566 14.235 17.984 429.187.1.107 70.092 4.630 86.236.520.145 9.1 2009 Rupees'000 - 3.251 210.419 21.945 36.438 280.2 280.453.231 10.980 24.

2009 2010 LONG TERM DEPOSITS AND PREPAYMENTS Note Rupees'000 Rupees'000 Islamabad Electric Supply Company Limited Sui Northern Gas Pipelines Limited Prepaid insurance Prepaid guarantee fee 61.324 982 7.1 16 This represents long term advance for construction of gas pipeline. 50 .480 2.559 782. It is repayable annually in equal installments over 7 years and carries mark-up @ 1.1 16.592 25.838 1.400 2009 Rupees'000 7.3 Detail of disposals during the year is as follows: 2010 Motor vehicle Motor vehicle Computer Computer Motor vehicle Motor vehicle Motor vehicle 2010 2009 Original Book value Sale Gain/(loss) Mode of cost proceeds disposal Rupees'000 Rupees'000 Rupees'000 Rupees'000 1.BUILDING BETTER PAKISTAN Annual Report 14.008.119 813 (306) As per Company's policy to employee 1.626 1.542 895.540 2.983 16.342 4.841 61.606 3.200 (900) 6.687 1.5% per annum.300 15.639 478 Insurance claim 6.001 4.592 25.011 26.479 2010 Rupees'000 Note 15 LONG TERM ADVANCE .011 15.1 Less: Amount receivable within 12 months shown under current assets 6.300 (900) 5.295 998 (998) -do37 24 (24) -do47 40 (40) -do956 951 951 Auction 958 921 921 -do1.679 884.1 This represents premium paid to Euler Hermes Kreditversicherungs-AG (Hermes) for guarantee issued to a lender as a security against long term loan forconstruction of new cement manufacturing line.Considered good Sui Northern Gas Pipelines Limited 15.161 1.

491 3.714 41.89 million).654 1.060.6 million) Loose tools 2010 Note Rupees'000 530.7 million (2009: Rs. 54.757 550.195 33. Karachi.281) 24.196 17.256 1.772 23 (3.848 4.848) 54.038.793 (4.514 42. 2010 Note Rupees'000 2009 Rupees'000 STOCK IN TRADE Raw and packing material Work in process Finished goods 52.359 20.BUILDING BETTER PAKISTAN Annual Report 2010 2009 Rupees'000 473.078 11.411 96. 13.683 13.848 47. 51 .684 45.887 900 37.964 608 1.281 27.1 516. This relates to normal business operations of the Company and is interest free.667 13.405 50. SPARES AND LOOSE TOOLS Stores (Including items in transit of nil (2009: 0.332 137.641 20 ADVANCES Advances .1 18 This includes spares stated at net realizable value of Rs. 4.078 17 STORES.89 million (2009 : Rs 4.981 33.1 42.861 1.1 This represents amount due from Fauji Foundation Resident Director Office.139 million) Spares (Including items in transit of Rs.Considered good To suppliers To employees Due from associated undertaking -unsecured Current portion of long term advance 20.964 900 46.533 17.451 19 TRADE DEBTS Unsecured Considered good Considered doubtful Secured considered good Less: Provision for doubtful debts 24.696 11.654 1.

Local .1 & 23.953.223 577. 4 million) with banks are under lienfor lettersof guarantee 23.241 601.325 5.858 2010 2009 Rupees'000 16.067 45.629 19.941 3.991 141.599 191.538 Less: Sales tax Excise duty Export development surcharge 52 .468 23 CASH AND BANK BALANCES Cash at banks Deposit accounts Current accounts Cash in hand 23.1 Sales .024 6.353 2010 Note Rupees'000 17.241 3.299 1.191. 35.396 513.100 42.947 24 Balances with banks include Rs.927 67.636 833.632 315 175.217 133.878 1.785 5.37 million (2009 : Rs. 40. 2009 2010 Rupees'000 Rupees'000 SALES .518 4.532 175.2 issued on behalf of the Company.791 19.064 164.BUILDING BETTER PAKISTAN Annual Report 21 TRADE DEPOSITS. Deposits of Rs.638.902.354 28.228 1.681 million) in respect of security deposits received.953 264 192.2 163.762.455 5. 4 million (2009 : Rs.882 71.323 801.477 1.808. SHORT TERM PREPAYMENTS AND BALANCES WITH STATUTORY AUTHORITY Deposits Prepayments Advance tax-net Sales tax refundable -net Special excise duty refundable 22 OTHER RECEIVABLES Margin on letters of credit Other receivables.314.Considered good Margin on letter of guarantee 28.067 47.Net 23.205.Export 3.696.921 3.925 364.364 772 25.178 3.184 77.093.

544 982 13.146 Technical assistance 4.719) 3.424 53 .694 27.280) 3.829 (91.469 3.556 604.129 2. rates and taxes 4.722.405 Less: Closing work-in-process (11.194 1.389 Repairs and maintenance 92.513 16.195) Cost of goods manufactured 3.750 2.655 Communication.332 Less: Closing finished goods (33.439 105 12.148 17.412 Fuel consumed 1.337.739 million (2009 : Rs.509 9.718.081 6.631 3.109 80.220 184.042 Vehicle running and maintenance expenses 13.BUILDING BETTER PAKISTAN Annual Report 2010 25 COST OF SALES 2009 2010 Note Rupees'000 Rupees'000 Raw materials consumed 233.411) 3.330.496 Depreciation 14.611.667 83 184. wages and benefits (including retirement benefits of Rs.889 Packing material consumed 320.405) 3.2 310.313.020 Add: Opening work-in-process 41.923 196.748 152.989 4.289 (50.292.215 Printing and stationery 1.529 (41.195 190.110 12. 20. plant and equipment Others Power consumed 692.441 Insurance 15.201 1.479 3.872 46.949 Rent.773. establishment and other expenses 6.308 million) 224.701 297.332) 3.124 Stores and spares consumed 19.785 1.405 Salaries.230 Add: Opening finished goods 50.151 Less: Own consumption capitalized (37.441 345.278 Travelling and conveyance 6.871 26 OTHER INCOME Income from financial assets Profit on bank deposits Interest on long term advance Income from assets other than financial assets Gain on disposal of property.

429 594 2.435 636 7.048 (1.737 25.351 2.2 2010 2009 Note Rupees'000 Rupees'000 26.837 587 2.841 3.200 2.430 379 50.358 4. wages and benefits (including retirement benefits Rs.630 215 752 5.5 million ( 2009: 0. 4.962 5.042 3.591 3.880 103.868 1.2 Donations 28.14 million) donated for Internally Displaced Persons (IDPs) through Fauji Foundation. 2.236 3. establishment and other expenses Advertisement and sale promotion expenses Reversal of provision for doubtful debts Insurance 14.184 8. establishment and other expenses Legal and professional charges Depreciation 14.567) 512 47. 5.1 million (2009: 4.510 1.035 million) Export freight and other charges Travelling and entertainment Vehicle running and maintenance expenses Rent.101 2.1 58.490 61.186 28.973 5.797 4.886 6.5 million) donated to Foundation University and Rs. 2.993 million (2009: Rs.003 10. 54 .895 million (2009 : Rs. rates and taxes Repairs and maintenance Printing and stationery Depreciation Communication. wages and benefits (including retirement benefits of Rs.1 This includes Rs.145 3.758 703 1.495 5.013 318 979 6.082 million) Travelling and entertainment Vehicle running and maintenance expenses Insurance Rent.171 9.864 1.260 28 ADMINISTRATIVE EXPENSES Salaries.BUILDING BETTER PAKISTAN Annual Report 2010 27 DISTRIBUTION COST Salaries.761 738 6. rates and taxes Repairs and maintenance Printing and stationery Communication.591 3. 0.206 103.231 2.

894 55 .820) 337 (154) 413.000 413.120) (9.BUILDING BETTER PAKISTAN Annual Report Note 29 OTHER OPERATING EXPENSES Auditors' remuneration: Annual audit Half yearly review Out of pocket expenses Other certifications Workers' (Profit) Participation Fund Workers' Welfare Fund 30 FINANCE COST Fee and charges on loans Interest/mark-up on long term finance Interest on short term borrowings and other charges Interest on Workers' Profit Participation Fund Guarantee commission Bank charges and commission Exchange loss on revaluation of foreign currency loan Reclassification adjustment from equity on revaluation of loan 11.894 365.250 60.716 31 TAXATION Current (including prior) Deferred 14.2 2010 2009 2010 Rupees'000 Rupees'000 750 125 20 80 975 17.719 (36.015 25.173 500 13.288) 41.470 7.427) 74.911 35% 113.531 (83.609) 224.561 78.052 (18.609 (19.732 1.206 500 82.517 35% 497.732 48.389 20.288 (332.952 2.492) 25.421.563 328 673 4.460 430 125 25 80 660 74.408 332.672 135.980 19.182 922 805 5.894 Accounting profit for the year Applicable tax rate (%) Income tax at applicable rate Tax effect of change in proportion of export sales to local sales on temporary differences Minimum tax Tax effect of income taxable under final tax regime Tax effect on permanent differences Tax credits 324.482 74.

however.289 1.699 36.BUILDING BETTER PAKISTAN Annual Report 31. convertible preference shares and incremental shares on assumed conversion under subordinated loan outstanding during the year (Numbers'000) Earnings per share -diluted (Rupees) 2009 216.1 Basic Profit attributable to ordinary shareholders (adjusted) (Rupees '000) Weighted average number of ordinary shares outstanding during the year Rupees '000) Earnings per share (EPS) -basic (Rupees) 32.36 Reconciliation of weighted average number of shares Weighted average number of ordinary shares outstanding during the year (Numbers '000) Weighted average number of convertible preference shares (Not included in EPS calculation for the year 2010 due to anti-dilutive effect (Numbers ‘000) Weighted average number of incremental shares on assumed conversion under subordinated loan computed using closing market price of share (Numbers '000) 693.630 729. Tax returns filed by the Company for Tax Years 2004 to 2009 (years ended 30 June 2004 to 2009) stand assessed in terms of section 120 of the Ordinance.919 0.289 693.30 741.31 990. The appeals filed by the Company have been decided by the Appellate authorities for the most part in the Company’s favour up to and including Assessment Years 2001-2002.007.919 741.289 0.988 1. 32 EARNINGS PER SHARE 2010 32.902 693. However.1 2010 Assessments of the Company upto Assessment Year 2002-2003 were finalized by the taxation officer mainly by treating advances received from customers as deemed income and curtailing administrative expenses claimed by the Company. No provision has been made in these financial statements in respect of outstanding issues as management is confident of a favourable outcome. tax authorities are empowered to reopen the assessment at any time within 5 years from the end of the financial year in which the return was assessed.737 1.988 56 .43 216.737 693.289 - 48. appeal filed for Assessment Year 2002-2003 was decided against the Company by the Commissioner (Appeals) and is now pending before the Appellate Tribunal.2 Diluted Profit after taxation (Rupees '000) Weighted average number of ordinary shares.623 729.

778) (169. including benefits and perquisites.403 1. The Managing Director and certain executives were also provided Company's maintained cars and household equipment in accordance with the Company's policy.426 38.947 (345.360 million (2009 : Rs. 57 . were as follows: Managing Director Executives 2010 2009 2010 2009 Rupees'000 Rupees'000 Rupees'000 Rupees'000 Managerial remuneration Provident fund Compensated absences Utilities and upkeep 3.149 2.2 35 Financial instruments The Company has exposures to the following risks from its use of financial instruments: Credit risk Liquidity risk Market risk The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.853 2.038 61.831) Cash and bank balances Running finances 34 REMUNERATION OF DIRECTORS AND EXECUTIVES The aggregate amounts charged in the year for remuneration.460 million). number of directors: 8 (2009 : 8).932 223 873 1. The Board is also responsible for developing and monitoring the Company’s risk management policies.217 (66.274 1 2 3.1 In addition.853 1. Meeting fee of directors charged during the year was Rs. 0.012 5. 34.654 68.580 175.283 1.637) 125. 0.913 39 34.257 2. the above were provided with free medical facilities.965 25 No of persons 34.246 6.448 206 372 1.BUILDING BETTER PAKISTAN Annual Report 2010 33 CASH AND CASH EQUIVALENTS 2009 2010 Rupees'000 Rupees'000 192.

user customers and represents debtors within the country .953 375. Trade debts are secured against letter of guarantee and security deposits. The Board of Directors of the Company oversees how management monitors compliance with the Company’s risk management policies and procedures. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. the results of which are reported to the Board. The carrying amount of financial assets represents the maximum credit exposure.1 Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. other receivables.603 24. to set appropriate risk limits and controls.120 2009 Rupees '000 7. The Company's most significant customer is an end user from whom Rs.10.629 19.325 567 28.514 17.641 16. 58 . interest accrued. 35. advances and deposits. The Company. The Board is assisted in its oversight role by Internal Audit. and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures. and arises principally from trade debts.BUILDING BETTER PAKISTAN Annual Report 2010 The Company’s risk management policies are established to identify and analyse the risks faced by the Company.067 191. 22. aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.200 86.3 million) was outstanding and which is included in total carrying amount of trade debtors as at 30 June 2010.791 19.178 717 of provision Deposits Interest accrued Other receivables Margin on letters of guarantee Bank balances 6.63 million (2009: Rs.947 385. The maximum exposure to credit risk at the reporting date is as follows: 2010 Rupees '000 Long term advance Long term deposit Trade debts . and to monitor risks and adherence to limits.603 54.067 175. through its training and management standards and procedures. The Company does not hold any collateral as security against any of its financial assets other than trade debts. The Company has placed funds in financial institutions with high credit ratings.300 86. margin on letter of guarantee and bank balances.982 Geographically there is no concentration of credit risk. The Company assesses the credit quality of the counter parties as satisfactory. The maximum exposure to credit risk for trade debts at the reporting date are with end .

585 Past due 31-60 days 1.848 4.848 The movement in the allowance for impairment in respect of trade debts during the year was as follows: 2010 Rupees '000 Balance at 1 July Impairment loss reversed Balance at 30 June 4.848 Based on past experience. that it will always have sufficient liquidity to meet its liabilities when due.BUILDING BETTER PAKISTAN Annual Report 2010 Impairment losses The aging of trade debts at the reporting date was: Gross Impairment 2010 2010 Rupees '000 Not past due 24 Past due 1-30 days 19.941 Past due 61-90 days 407 Over 90 days 5.281 27. as far as possible. The Company's approach to managing liquidity is to ensure. under both normal and stressed conditions.848 (1.795 3.848 59.067 49. 35.2 Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.281 Gross Impairment 2009 2009 Rupees '000 3.821 4.848 4. The allowance accounts in respect of trade debts are used to record impairment losses unless the Company is satisfied that no recovery of the amount owing is possible. the management believes that no further impairment allowance is necessary in respect of carrying amount of trade debts.489 4. including expected interest payments and excluding the impact of netting agreements: 59 .838 3.567) 3. at that point the amount considered irrecoverable is written off against the financial asset directly.233 520 1. The following are the contractual maturities of financial liabilities. without incurring unacceptable losses or risking damage to the Company's reputation.281 2009 Rupees '000 4.

227 143.436) 6.549.839) - (4.233.994.689 914.130) (901.739) (786.603.348 8.101) (2.466) (914.495) (1.824) (914.336.024) (786.491) (408.727 (16.901 349.898) (95.518.555.407) (863.109) (976. 2009 Carrying amount Contractual cash flows Six months or less Six to twelve months Rupees '000 One to two years Two to five years Five years onwards Non Derivative Financial Liabilities Long term loans Retention money Trade and other payables Interest and mark-up accrued Short term borrowings Derivative Financial Liability Cross currency swaps used for hedging 586.347) - (2.277.796.701.898 95.407 765.469) (395.397 (257.921) (289.536 15.885) (3.706) The maturity analysis of cross currency swap reflects the cash flow associated with derivatives which are cash flow hedges that are expected to occur and impact profit and loss account.696) (3.927.130) (901.083.272) (260.955.739 786.822) 994.512) (304.214) - (7.730) (991.249 (19.841 (2.811.426.217) (197.130 865.371.898) (95.057) (529.910) 13.952) (503.806.491) (213.517.908) (143.457.730) (993.431) (7.937) (3.545.242) - (345.BUILDING BETTER PAKISTAN Annual Report Carrying amount Contractual cash flows Six months or less Six to twelve months Rupees '000 One to two years 2010 Five years onwards Two to five years 2010 Non Derivative Financial Liabilities Long term loans Retention money Trade and other payables Interest and mark-up accrued Short term borrowings Derivative Financial Liability Cross currency swaps used for hedging 768.739) (3.069) (10.920) (1.543.982.778 (8.660) (3.00) - 60 .802 (566.901) (349.228.404) (2.407) (863.061) (396.613) (143.901) (349.821) 901.

speculative activities.3 Market risk Market risk is the risk that the value of the financial instrument may fluctuate as a result of changes in market interest rates or the market price due to change in credit rating of the issuer or the instrument.023 The following significant exchange rate applied during the year: Average rates Balance sheet date rate 2009 2009 2010 2010 US Dollars 80 81. The Company's exposure to foreign currency risk is as follows: 2009 2010 Rupees '000 US Dollar '000 Rupees '000 US Dollar '000 Long term loan 7.45 Sensitivity The Company has hedged its foreign currency exposure by entering into cross currency swap and any changes in exchange rate will have no effect on profit and loss account or equity.BUILDING BETTER PAKISTAN Annual Report 35.693 56. 35.2 Interest rate risk The interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The mark-up rates have been disclosed in note 7 and 12 to these financial statements.767 4. 35.1 2010 The contractual cash flow relating to long and short term borrowings have been determined on the basis of expected mark up rates.3 84 85.554. However the Company has hedged its foreign currency exposure by entering into cross currency swap.2.1 Currency risk Exposure to Currency Risk The Company is exposed to currency risk on long term loan which is denominated in currency other than the functional currency of the Company.689 87.499. Majority of the interest rate exposure arises from short and long term borrowings from banks and short term deposits with banks. supply and demand of securities and liquidity in the market. change in market sentiments.3. 35. At the balance sheet date the interest rate profile of the Company's interest bearing financial instruments is: 61 .3. The Company is exposed to currency risk and interest rates only.

in particular foreign currency rates.630) 23. Profit or loss 100 100 basis points Effect in Rupees thousands basis points decrease Equity 10 percent 10 percent increase decrease Rupees '000 Cash flow sensitivity (net) Variable rate instruments Cross currency swap 30 June 2010 (23.519 160.519 62 .519) 160.326 140.519) (160. This analysis assumes that all other variables. remain constant.692 Variable rate instruments Cross currency swap 30 June 2009 (931) (931) 931 931 (160. The analysis is performed on the same basis for 2009.150.471 Fair value sensitivity analysis for variable rate instruments The Company does not hold any financial asset or liability at fair value through profit and loss.385.692) 223.300 7. Cash flow sensitivity analysis for variable rate instruments A change of 100 basis points and 10 per cent in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below.692) (223.630) (23.630 23.692 223.BUILDING BETTER PAKISTAN Annual Report 2010 Carrying Amount 2009 2010 Rupees '000 Rupees '000 Fixed rate instruments Financial assets Variable rate instruments Financial liabilities 169.630 (223.654 13.

325 567 28.325 567 28.083.641 of provision Deposits Interest accrued Other receivables Margin on letters of guarantee Bank balances Liabilities carried at amortized cost 6 Subordinated loan .689 315.470 6.952 27. are as follows: Note 2010 Carrying Fair value amount Rupees '000 15 16 19 21 22 22 23 6.172.369 Liabilities carried at fair value Cross currency swap 11& 8 444.BUILDING BETTER PAKISTAN Annual Report 35.000 13.369 6.619 33.276 765.483 35.678 16.276 765.508 50.178 717 25.693 197.185 39.619.681 74.442 2.269 865.982 Assets carried at amortized cost Long term advance Long term deposit Trade debts .721 2.982 7.264.067 191.300 86.689 315.442 2.661 251.714 40.619.676 60.603 24.120 6.176 136.269 865.483 35.629 19.366 17.641 16.703 254.953 375.678 16.727 15.172.120 2009 Carrying Fair value amount Rupees '000 7.603 54.953 375.514 17.221 63 .693 197.317 6.366 17.603 24.721 2.674 480.176 136.947 385.470 6.947 385.603 54.681 74.300 86.067 175.067 191.200 86.952 27.661 251. together with the carrying amounts shown in the balance sheet.000 13.791 19.unsecured 7 Long term financing .923 75.778 8.791 19.508 50.200 86.923 75.703 254.264.619 33.674 444.178 717 25.secured 11 Creditors 11 Accrued liabilities 11 Retention money 11 Security deposits 11 Workers' (Profit) Participation Fund 11 Workers' Welfare Fund 11 Excise duty payable 11 Other liabilities Dividend payable on preference shares 11 11 Unclaimed dividend 12 Short term borrowings .secured 400.514 17.727 15.676 60.185 39.629 19.317 400.067 175.221 480.296 62.778 8.296 62.083.714 40.4 Fair value of financial assets and liabilities 2010 The fair values of financial assets and liabilities.

Level 1 2010 Liabilities carried at fair value Cross currency swap 2009 Liabilities carried at fair value Cross currency swap 35. which is determined for disclosure purposes. Interest rates used to discount estimated future cash flows are based on the respective currency's yield curve.derivative financial assets The fair value of non .derivative financial assets is estimated as the present value of future cash flows. as prices) or indirectly (i.5 Determination of fair values Level 2 Rupees '000 Level 3 - - 444. derived from prices) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).BUILDING BETTER PAKISTAN Annual Report Fair value hierarchy 2010 The table below analyses financial instruments carried at fair value. Following are the interest rates which have been used to perform the fair value calculation of derivative financial instruments as at 30 June 2010. is calculated based on the present value of future principal and interest cash flows. These valuations are tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract. either directly (i. Derivative financial liabilities The fair value of derivative hedging instruments are based on bank's valuations. by valuation method. The different levels have been defined as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability.e.derivative financial liabilities Fair value. Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the Company and counterparty when appropriate.674 - - 480. Non . Non . discounted at the market rate of interest at the reporting date.. for both financial and non-financial assets and liabilities. The fair value is determined for disclosure purposes.221 A number of the Company's accounting policies and disclosures require the determination of fair value. discounted at the market rate of interest at the reporting date . 64 .e. Fair values have been determined for measurement and/ or disclosure purposes based on the following methods..

128.600 8.Loan received from Fauji Foundation Employees Funds .86% ordinary shares and 100% preference shares of the Company at the year-end. 1. Therefore all subsidiaries and associated undertakings of Fauji Foundation are related parties of the Company.Sale of cement .308 84 30.Payment made by Fauji Foundation on the Company's behalf . which the Company defines as net profit after taxation divided by total shareholders' equity. Amount due from the related party is shown under receivables and the remuneration of key management personnel representing the Chief Executive and directors is disclosed in note 34 to these financial statements.Payment on account of clearance of shipments .75% .500 1.165.258 2009 Rupees'000 8.94% per annum 2010 The Board's policy is to maintain a strong capital base so as to maintain investor.674 8. key management personnel.361 50. The Board of Directors also monitors the level of dividend to ordinary shareholders.000 - 11.500 1. entities over which the directors are able to exercise influence and employees' funds.721 400.37% .Payment for use of medical facilities .183.BUILDING BETTER PAKISTAN Annual Report KIBOR LIBOR 35.Preference dividend paid .084 42 20.000 13. creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on capital.58% per annum 0.684 65 . Transactions with related parties.12.6 Capital management 12.165. There were no changes to the Company's approach to capital management during the year and the Company is not subject to externally imposed capital requirements except for the maintenance of debt to equity ratios under the financing agreements.243 Metric Tons 1. other than remuneration and benefits to key management personnel under the terms of their employment are as follows: 2010 Rupees'000 Transactions with associated undertakings/companies due to common directorship .Payments made into the fund 37 PLANT CAPACITY AND ACTUAL PRODUCTION Metric Tons Current installed capacity (Based on 300 running days) Actual production Difference is due to normal wear and tear of plant.2. 36 RELATED PARTY TRANSACTIONS Fauji Foundation holds 26. Other related parties comprise of directors.700 16.

38.142 million) respectively are available to the Company. Chief Executive Director 66 . Letter of guarantees are secured by way of hypothecation charge on present and future assets of the Company (excluding land and building) and lien on bank deposits/ margin.300 million (2009: Rs.2 Figures have been rounded off to the nearest thousand of Rupee unless otherwise stated.50 million and Rs.BUILDING BETTER PAKISTAN Annual Report 38 GENERAL 38. 4. 354 million and Rs.1 Facilities of letters of guarantee and letters of credit 2010 Facilities of letters of guarantee and letters of credit amounting to Rs. 1. 354.

BUILDING BETTER PAKISTAN Annual Report 2010 Pattern of Share-holding as on 30 June 2010 From 1 101 501 1001 5001 10001 15001 20001 25001 30001 35001 40001 45001 50001 55001 60001 65001 70001 75001 80001 85001 90001 95001 100001 105001 110001 115001 120001 125001 130001 135001 140001 145001 150001 155001 160001 165001 170001 175001 180001 No. of Shareholders To 100 500 1000 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 55000 60000 65000 70000 75000 80000 85000 90000 95000 100000 105000 110000 115000 120000 125000 130000 135000 140000 145000 150000 155000 160000 165000 170000 175000 180000 185000 Total Shares Held 6762 545043 1823202 9965294 9998809 5350902 6019363 5271816 3685483 2332902 2438085 1299371 4789505 1861489 2220020 1890347 1517853 1463710 1723495 1171720 1065000 552956 7087500 1756542 974495 908800 590238 1854409 902345 801164 140000 856753 2840705 615990 476923 165000 336000 692500 535157 181390 173 1137 1844 3300 1193 406 319 219 128 70 63 30 97 35 38 30 22 20 22 14 12 6 71 17 9 8 5 15 7 6 1 6 19 4 3 1 2 4 3 1 67 .

BUILDING BETTER PAKISTAN Annual Report 1 3 15 2 4 6 6 3 1 2 1 6 3 2 3 1 1 2 3 1 5 2 1 3 1 1 3 2 1 1 1 5 1 1 1 1 2 7 1 1 2 1 2 1 1 1 1 185001 190001 195001 200001 205001 210001 215001 220001 225001 235001 240001 245001 250001 255001 260001 265001 270001 275001 280001 290001 295001 300001 305001 310001 320001 335001 345001 355001 360001 370001 385001 395001 460001 465001 470001 475001 480001 495001 520001 540001 595001 610001 625001 630001 635001 650001 670001 190000 195000 200000 205000 210000 215000 220000 225000 230000 240000 245000 250000 255000 260000 265000 270000 275000 280000 285000 295000 300000 305000 310000 315000 325000 340000 350000 360000 365000 375000 390000 400000 465000 470000 475000 480000 485000 500000 525000 545000 600000 615000 630000 635000 640000 655000 675000 2010 187000 572061 2998000 407500 832868 1278907 1307755 671410 226500 477500 243100 1495850 761175 515392 793153 270000 272500 556020 852450 292300 1500000 610000 308841 940790 321000 335001 1047800 714628 361515 373000 386440 1996950 464000 469450 471000 476400 964500 3500000 523600 541840 1196359 612700 1258664 633311 640000 652250 672000 68 .

BUILDING BETTER PAKISTAN Annual Report 1 2 1 1 1 1 3 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 695001 705001 745001 775001 795001 850001 895001 910001 995001 1050001 1110001 1115001 1160001 1165001 1195001 1235001 1280001 1375001 1445001 1475001 1760001 1960001 1995001 2645001 2995001 3490001 3720001 5285001 5430001 6855001 7060001 7225001 12670001 18745001 48695001 56305001 93745001 104990001 186235001 700000 710000 750000 780000 800000 855000 900000 915000 1000000 1055000 1115000 1120000 1165000 1170000 1200000 1240000 1285000 1380000 1450000 1480000 1765000 1965000 2000000 2650000 3000000 3495000 3725000 5290000 5435000 6860000 7065000 7230000 12675000 18750000 48700000 56310000 93750000 104995000 186240000 2010 700000 1414198 750000 778994 800000 854138 2700000 910865 999465 1054500 111 00 15 2238650 1165000 1170000 1200000 1239500 1280950 1377000 1450000 1479580 1760562 1963000 2000000 2650000 3000000 3491458 3722113 5289700 5432804 6858955 7060348 7227639 12675000 37500000 48699187 56309000 93750000 104993042 187239020 9520 741988686 69 .

000 367.681.566 1.4382 145.938. SI (M) (Retd) Spouses and minor children of Directors/CEO Executive Associated companies.0000 235.872.000 18.7981 12.548 741.249 31. undertaking and related parties:Fauji Fauji Fauji Fauji Foundation Fertilizer Company Limited (FFC) Fertilizer Bin Qasim Limited (FFBL) Oil Terminal & Distribution Company Ltd Total: 2010 Shares held Percentage 1 1 1 1 1 1 1 NIL NIL (FOTCO) 235.289.0990 0.988.750.686 0.3772 100.5270 49.750.559 19.6350 14.042 434.188.000 18.7981 12.207 93. Non Banking Finance Institutions Insurance Companies Mudarabas and Mutual Funds General Public Local Others (Local) Investment Companies Joint Stock Companies Foreign Industrialization Fund for Developing Countries (IFU) Others Total Shares held Share holders holding 10% and above Fauji Foundation Fauji Fertilizer Company Limited United Bank Limited Total 126. HI (M) (Retd) Mr.1502 58.038. Development Finance Institution.500 90.1400 0.207 31.771 17.0025 12. Nadeem Inayat Brig Liaqat Ali (Retd) Brig Parvez Sarwar Khan.186.672 3.5885 18.5833 70 .344.1546 0.7129 0.938. Qaiser Javed Brig Rahat Khan (Retd) Dr.700 2.251.000 104.4871 Banks.750.6350 2.156 5.993.BUILDING BETTER PAKISTAN Annual Report Categories of Shareholders as on 30 June 2010 Directors Lt Gen Hamid Rab Nawaz. HI (M) (Retd) Lt Gen Javed Alam Khan.5270 2.750.798.207 93.

No: __________________________________ Folio No CDC Account # Participant I.BUILDING BETTER PAKISTAN Annual Report 2010 Form of Proxy .C No:________________________________ (2) Name ________________________Address: __________________________________ _______________________________ N. Sadar. . 2. Account # Signature on Four Rupees Revenue Stamp The signature should agree with the specimen registered with the Company IMPORTANT: 1.18th Annual General Meeting I/We______________________________________________________________________ of________________________________________________________________________ being Member (s) of Fauji Cement Company Limited hold ___________________________ Ordinary Shares hereby appoint Mr. must be received at the registered office of the Company. at First Floor. If a member appoints more than one proxy and more than one instruments of proxy are deposited by a member with the Company./Mrs. not less than 48 hours before the time of holding the meeting.C. all such instruments of proxy shall be rendered invalid.I.I.D. Signed by_______________________________________________________________________ said in the presence of: (1)Name_________________________Address :__________________________________ __________________________________ N. 60 Adam Jee Road. Rawalpindi – Pakistan. Aslam Plaza. As witness my/our hand/seal this ____________________ day of_________________2010. This Form of proxy./Miss of __________________________________ __________________ or failing him/her _________________________________________ of _______________________ as my / our proxy in my / our absence to attend and vote for me/us and on my/our behalf at the 18th Annual General Meeting of the Company to be held on Monday. duly completed and signed. 25 October 2010 and at any adjournment thereof.

Saddar. Rawalpindi . Aslam Plaza.Pakistan .AFFIX CORRECT POSTAGE The Company Secretary Fauji Cement Company Limited First Floor. 60 Adam Jee Road.

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