FAUJI CEMENT COMPANY LIMITED

CONCRETE COMMITMENT

If Undelivered please return to:

Company Secretary

Fauji Cement Company Limited

Fauji Towers Block III, 68 Tipu Road Chaklala
Rawalpindi Pakistan
www.fccl.com.pk

ISO 9001 & ISO 14001

ENVIRONMENTAL

APPROVED

www.fccl.com.pk

ANNUAL REPORT

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FAUJI CEMENT COMPANY LIMITED

Contents
2

Board of Directors

Company Information

Vision and Mission Statements

Company Profile

Key Operating Indicators

Directors Report

18

Statement of Compliance

20

Review Report to the Members

21

Auditors' Report

22

Balance Sheet

24

Profit and Loss Account

25

Statement of Comprehensive Income

26

Cash Flow Statement

27

Statement of Changes in Equity

28

Notes to the Financial Statements

64

Pattern of Shareholding as on 30th June 2015

71

Notice of 23rd Annual General Meeting

73

Form of Proxy

ANNUAL REPORT

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FCCL

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Board of
Directors
Lt Gen Khalid Nawaz Khan
HI(M) Sitara-i-Esar (Retd), (Chairman)

Lt Gen Sardar Mahmood Ali Khan,

HI (M) (Retd), (Chief Exective/MD)

Mr Qaiser Javed

Dr. Nadeem Inayat

Maj Gen Syed Jamal Shahid HI (M) (Retd)

Maj Gen Muhammad Farooq Iqbal

HI (M) (Retd)

Brig Dr,Gulfam Alam,SI(M) (Retd)

Brig Muhammad Saeed Khan (Retd)

Mr Pervez Inam
Independent Director

Brig Asmat Ullah Khan Niazi SI(M) (Retd)

Independent Director

Brig Ch Zafar Iqbal (Retd)

Company Secretary

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FAUJI CEMENT COMPANY LIMITED

ANNUAL REPORT

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Company Information
Board of Directors
Lt Gen Khalid Nawaz Khan
HI (M) Sitara e Esar (Retd)
Lt Gen Sardar Mahmood Ali Khan
HI (M) (Retd) (CEO/MD)
Mr. Qaiser Javed (Director)
Dr. Nadeem Inayat (Director)
Maj Gen Syed Jamal Shahid
HI (M) (Retd) (Director)
Maj Gen Muhammad Farooq Iqbal
HI (M) (Retd.) (Director)
Brig Dr. Gulfam Alam, SI (M) (Retd.)
(Director)
Brig Muhammad Saeed Khan (Retd.)
(Director)
Brig Asmat Ullah Khan Niazi
SI (M) (Retd.) (Independent Director)
Mr. Pervez Inam (Independent Director)
Company Secretary
Brig Ch. Zafar Iqbal (Retd.)
Fauji Tower Block III
68 Tipu Road Chaklala, Rawalpindi
Tel: (051) 9280075
Fax: (051) 9280416
E-mail: [email protected]
Chief Financial Officer
Mr. Omer Ashraf
Tel: (051) 5500157
Human Resource Committee
Dr. Nadeem Inayat (President)
Mr. Qaiser Javed (Member)
Brig Muhammad Saeed Khan (Retd.)
(Member)
Brig Ch. Zafar Iqbal (Retd.) (Secretary)
Audit Committee
Brig Asmat Ullah Khan Niazi SI (M)
(Retd.) (President)
Mr. Qaiser Javed (Member)
Dr. Nadeem Inayat (Member)
Maj Gen Syed Jamal Shahid HI (M)
(Retd.) (Director)
Brig Dr. Gulfam Alam, SI (M)(Retd.) (Director)
Brig Ch. Zafar Iqbal (Retd.) (Secretary)
Technical Committee
Brig Dr. Gulfam Alam SI(M) (Retd.)
(President)

Maj Gen Muhammad Farooq Iqbal

HI (M) (Retd.) (Director)
Brig Muhammad Saeed Khan (Retd.)
(Member)
Mr. Rais Ahmed, Senior GM (Plant)
(Secretary)

Key Management

Auditors
M/s KPMG Taseer Hadi & Co,
Chartered Accountants
Fax: (051) 2822671
Legal Advisors
M/s ORR Dignam & Co, Advocates
Fax: (051) 2260653
Registration & Shares
Transfer Officer
M/s CORPLINK (PVT) LIMITED
Wings Arcade, 1-K, Commercial,
Model Town, Lahore
Tel: 042-35916714,
35916719, 35839182
Fax: 0425-35869037
Email: [email protected]
Registered Office/Head Office
Fauji Tower Block III
68, Tipu Road, Chaklala, Rawalpindi
Tel: 051-9280081-83,
051-5763321-24, 051-5500159,
Fax: 051-9280416

Mr. Rais Ahmed

Senior GM (Plant)

Mr. Shahid Ghazanfar

GM (Operation)

Mr. Siddiq Khan

GM (Maintenance)

Mr. Omer Ashraf

Chief Finnalcial Officer

Brig Ashfaq Ahmed (Retd)

GM (PHM)

Brig Muhammad Iqbal SI(M) (Retd)

GM (Sales & Marketing)

Marketing and Sales Department

Ist Floor, Aslam Plaza, 60 Adamjee
Road, Sadar, Rawalpindi-Pakistan
Tel: (051) 5523836,
Tel: (051) 5528042, 5528960,
Tel: (051) 5528963-64,
Fax: (051) 5528965-66
Factory
Near Village Jhang Bahtar, Tehsil
Fateh Jang District Attock
Tel: 057-2538047-48, 2538138,
2538148-49
Fax: 057-2538025
Company Website
http://www.fccl.com.pk

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Accountability
We expect superior performance
and results. Our leaders set clear
goals and expectations, are supportive and provide and seek frequent
feed back.

Our Vision
To be a role model cement
manufacturing Company,
benefiting all stake holders and
fulfilling Corporate Social
Responsibilities while enjoying
public respect and goodwill.

VISION
MISSION

& VALUES
People
Our success depends
upon high performing
people working together
in a safe and healthy work
place where diversity,
development and team
work are valued and
recognized.

Financial Responsibility
We are prudent and effective
in the use of the resources
entrusted to us.

Our Mission
FCCL While maintaining its
leading position in quality of
cement maximize profitability
through reduced cost of production and enhanced share in
domestic and International
markets.

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Customers
We listen to our customers and improve our
product to meet their
present and future needs.

Citizenship
We support the communities where
we do business, hold ourselves to
the highest standards of ethical
conduct and environment responsibility, and communicate openly with
FCCL people and the resources
entrusted to us.

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FAUJI CEMENT COMPANY LIMITED

ANNUAL REPORT

Company Profile
FCCL located at Jhang Bahtar, District Attock, is a leading producer of Pakistan Cement Industry and a major
concern of Fauji Foundation. Incorporated as a public limited company, it started its operations in 1997 on
commissioning of 3150 TPD F.L. Smidth Plant of DENMARK. Subsequently in 2005, the Plant capacity was
enhanced to 3,885 TPD.
To cater for the expanding demand of Fauji Cement a new line of 7560 TPD has been erected and its production
started on 30 May 2011. The new Plant is equipped with latest / state of art equipment and is also the first
GERMAN plant of Pakistan Cement Industry. The Portland Cement produced at this plant is the finest in the
Country. Major equipment suppliers were:
a. POLYSIUS AG Germany
b. LOESCHE GmBH Germany (Vertical Cement Mills)
c. HAVOR & BOECKER Germany (Packing Plant)
d. ABB Switzerland (Electrical Equipment and PLC)
In pursuance of its commitment to ENVIRONMENT, the Company installed in 2009 first ever Refuse Derived
Fuel (RDF) Processing Plant at a cost of Rs. 320 million. It has not only provided economical fuel but demonstrated a better way of disposing Municipal Waste. In addition, this milestone achievement has shown the entire industrial sector the future path to follow.
FCCL management has recently installed 10 MW Waste Heat recovery Plant with a concept to convert waste
heat into energy to promote sustainable environment and reduce load on national grid. The contract for
engineering and equipment was awarded to M/S SINOMA Engineering, where as construction, erection and
commissioning contract was given to M/S EITEMAAD Engineering. Waste Heat Recovery power plant was
formally inaugurated on 14th may 2015.
FCCL is an ISO 9001:2008 and ISO 14001:2004 Certified Company with a total capacity of 11,445 TPD and a
strong and longstanding tradition of service, reliability and quality.

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Key Operating Indicators

%

2015

2014

2013

2012

2011

2010

(Rs. In Million)
Gross Profit Margin
Operating Profit Margin
Pre Tax Margin
After Tax Margin

%
%
%
%

37.69
34.25
30.47
22.08

34.70
31.67
25.72
14.98

31.82
28.79
19.32
13.13

26.63
24.23
8.39
4.80

17.35
12.48
10.29
8.98

13.54
9.61
8.53
6.57

Performance
Return on total assets
Total Assets turnover
Fixed Assets turnover
Return on Paid up Share Capital

%
Times
Times
%

13.48
0.61
0.78

8.94
0.60
0.73
19.03

6.92
0.53
0.65
15.2

1.80
0.38
0.44
4.00

1.32
0.15
0.18
5.74

0.93
0.14
0.16
3.37

Leverage
Debt Equity Ratio
Current Ratio
Quick Ratio

Times
Times
Times

0.27
1.36
1.17

0.33
1.16
0.84

0.40
1.14
0.92

0.47
0.76
0.58

0.55
0.89
0.80

0.57
0.63
0.60

Rs
Rs
Rs
Rs
%
Rs

2.91
13.09
12.62
1.00
34.36
26.46

1.80
11.86
11.44
0.75
41.67
15.41

1.42
11.97
11.55
1.25
88.00
7.9

0.29
10.44
10.08
4.53

0.52
15.89
14.84
4.72

0.31
13.86
12.95
6.67

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
Profit before tax
Profit after tax

Rs in 000
Rs in 000
Rs in 000
Rs in 000
Rs in 000

18,642,358 17,532,277
7,027,097 6,084,135
6,385,918 5,551,649
5,679,891 4,509,505
4,116,165 2,625,994

15,967,900
5,080,473
4,597,673
3,085,525
2,097,067

11,523,050
3,068,450
2,791,690
966,245
552,590

4,742,593
823,053
592,075
488,153
425,661

3,808,455
515,584
366,117
324,911
250,179

Financial Position
Shareholders Equity
Property plant & Equipment
Working Capital
Non current liabilities

Rs in 000
Rs in 000
Rs in 000
Rs in 000

17,418,984 15,788,187
23,880,553 23,881,426
1,683,219
705,851
8,378,929 9,110,639

15,936,361 13,905,105
24,734,325 25,857,954
629,660 (1,334,355)
9,959,258 11,304,187

11,014,017
26,658,079
(592,614)
12,623,072

9,610,685
23,819,040
(1,217,421)
12,784,399

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FAUJI CEMENT COMPANY LIMITED

ANNUAL REPORT

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Directors' Report
General
1.

The Directors of Fauji Cement Company Limited

(FCCL) are pleased to present the 23rd Annual
Report together with audited financial statements of
the Company for the year ended 30th June 2015 and
Auditors Report thereon.

Market Overview

Financial Performance

2.

Industry dispatches for the FY 2014-15 were 35.40 Million

MT including 28.20 Million MT domestic and 7.20 Million
MT exports. There is an increase of 3.24 % in total
dispatches of the Industry as compared to the previous year,
which were 34.28 Million MT including 26.14 Million MT
domestic and 8.14 Million MT exports. The increase in the
domestic dispatches is 7.88 % and the decrease in exports is
11.55 %.

5.

3.

FCCL has dispatched 2,591,412 MT for the FY 2014 -15

including 2,207,016 MT domestic and 384,396 MT
exports. There is a growth/increase of 5 % in total
dispatches as compared to the previous year. Capacity
utilization of FCCL in FY 2014-15 has been 75 % whereas
in FY 2013 -14 it was 72%.

Profitability. Gross profit ratio was 38% as

compared to 35% during last year. The Company
earned a Profit after Tax of Rs. 4,116 Million as
compared to the last years profit of Rs. 2,626
Million. The cost of production decreased by 3 %.
The Company successfully managed debt servicing
of Rs 3.1 Billion during this financial year from
operational cash flows. The effective tax rate this
year i.e 2015 is lower than last year mainly due to
lower deferred tax as a result of reduction in
corporate tax rates i.e from 33% is 2015 to 30%
from 2018 onwards and also due to change in local
to export sale ratio.

6.

Contribution to National Exchequer.

The Company contributed Rs. 6.024 Billion to
the national exchequer in the form of taxes
and duties during the year under review.
Concurrently, Fauji Cement earned USD 27
Million through export of cement.

7.

Going Concern. There is no doubt that the

Company has the ability and strength to
operate as a going concern.

Production Review
4.

a.
b.

Performance of the plant remained satisfactory.

Comparative production figures are given as under:-

Clinker (MT)
Cement (MT)

2014-15

2013-14

2,344,715
2,565,547

2,449,380
2,490,851

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Financial Data of Last Six Years. Key operating and financial data of last six years is tabulated below:-

Description

2014

2015

Operating Results

2013

2012

2011

2010

(Rs. In Million)

18,642

17,532

15,968

11,523

4,744

3,808

Gross Profit

7,027

6,084

5,080

3,068

823

516

Operating Profit

6,386

5,552

4,598

2,792

592

366

706

1,042

1,512

1,825

104

41

4,116

2626

2,097

553

426

250

Shareholders Equity

17,419

15,788

15,936

13,905

11,014

9,611

Fixed Assets

23,881

23,881

24,734

25,898

26,658

23,819

6,525

7,914

10,484

12,555

13,554

12,980

Basic

2.91

1.80

1.42

0.29

0.52

0.31

Diluted

2.91

1.80

1.42

0.29

0.34

0.30

Net Sales

Financial Charges
Profit after taxation
Balance Sheet

Long Term Loans

including current portion
EPS (Rs)

9.

Dividend. The Board is pleased to recommend final cash dividend of Rs. 1.50 per ordinary share in addition to the
interim dividend of Re. 1.00 per ordinary share already paid during the year 2014-15.

10. Outstanding Statutory Dues. The Company does not have any outstanding statutory dues except as shown in
Note Number 8 to the Financial Statement.
11. Provident Fund (in Million). Value as on 30th June 2015 is given below:a. Management Staff

Rs. In Million
248

b. Non-Management Staff

147

Best Practices of Corporate Governance.

12. Best practices of corporate governance as given in the listing regulations are being applied / implemented in true
letter and spirit.
13. Presentation of Financial Statement
The financial statements prepared by the Management present the Companys state of affairs, the results of its
operations, cash flows and changes in equity in a fair and accurate manner.

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FAUJI CEMENT COMPANY LIMITED

ANNUAL REPORT

Our Values are

Concrete
Our Support is
Absolute

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ANNUAL REPORT

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14. Books of Account. Proper books of account are

maintained.
15. Accounting Policies. Appropriate accounting policies
are consistently applied in preparation of financial
statements and accounting estimates are based on
reasonable and prudent judgment.
16. Compliance with International Accounting
Standards (IAS) and International Financial
Reporting Standards (IFRS).
International
Accounting Standards and International Financial
Reporting Standards (IFRS) as applicable in Pakistan
have been followed in preparation of financial
statements.
17. Internal Control System. The system of internal
control is sound in design. Its effective implementation
and monitoring is ensured.
18. Salient Aspects of Companys Control and
Reporting Systems. The Company complies with all
the requirements of the Code of Corporate
Governance as contained in the listing regulations of
the Stock Exchanges. To fulfill this role, the Board is
responsible to implement overall corporate
governance in the Company including approval of the
strategic direction as recommended by the
Management, approving and monitoring capital
expenditures, appointing, removing and creating
succession policies for the senior management,
establishing and monitoring the achievement of
management's goals and ensuring the integrity of
internal control and Management Information Systems.
It is also responsible for approving and monitoring
financial and other reporting.
19. Disclosures. To the best of our knowledge, the
Directors except Mr Pervez Inam and his spouse
declared beneficiary owners, CEO, CFO, Company
Secretary, Company Auditors, their spouses and their
minor children have not undertaken any trading in
shares of the Company during the FY 2014-15.

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20. Relations with Company Personnel.

Relations between the management and the
workers continued to be extremely cordial
based on mutual respect and confidence
contributing to optimal efficiency. The
Company has allocated funds for Provident
Fund and Profit Participation Fund for its
employees. Considerable investment has been
made for welfare of the staff in order to
provide Safe and Healthy work environment.
21. External Auditors. The present Auditors M/s
KPMG Taseer Hadi & Co. Chartered
Accountants will stand retired at the
conclusion of the 23rd Annual General
Meeting. However, they have expressed their
willingness for re-appointment. They have also
been recommended by the Audit Committee
as External Auditors till conclusion of 24th
AGM on existing terms and condition.
Board Annual Evaluation
22. This is the 1st year since the change in the
Code of Corporate Governance as applicable
to Listed Companies that we are reporting on
the Annual Evaluation of the Boards own
performance.
23. The Board has introduced a self evaluation
criteria which is based on a questionnaire
format and the following are covered:a. Membership Governance
b. Board Operations
c. Legal responsibilities
d. Financial over view and planning

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FAUJI CEMENT COMPANY LIMITED

ANNUAL REPORT

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24. Based on the feedback received from all the directors on the evaluation questionnaire, it has observed that
all aspects are within the acceptable limits.
Board of Directors / Committees
25. The Board has delegated responsibility for operation and administration of the Company to the Chief
Executive / Managing Director. The Board has constituted the following committees which work under the
guidance of Board of Directors:a. Audit Committee. b. Technical Committee. c. Human Resource Committee.

Board of Directors at Plant Office after 108th Meeting of BODs held on 16th Feb 2015
26. Attendance of Meetings. During the year under review, attendance by each director is given below:Board of Directors

No of Meetings Attended

Lt Gen Muhammad Mustafa Khan HI (M) (Retd)

Lt Gen Khalid Nawaz Khan, HI (M) Sitara-e-Esar (Retd)

Lt Gen Sardar Mahmood Ali Khan, HI (M) (Retd)

Mr. Qaiser Javed

Dr. Nadeem Inayat

Maj Gen Syed Jamal Shahid,HI(M)(Retd)

Maj Gen Muhammad Farooq Iqbal HI (M)(Retd)

Brig Dr. Gulfam Alam SI (M) (Retd)

Brig Muhammad Saeed Khan(Retd)

Brig Asmat Ullah Khan Niazi SI (M) (Retd)

Mr. Max Kruse

Mr. Pervez Inam

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Audit Committee

No of Meetings Attended

Brig Asmat Ullah Khan Niazi SI (M) (Retd)

Mr. Qaiser Javed

Dr. Nadeem Inayat

Maj Gen Syed Jamal Shahid, HI(M) (Retd)

Brig Dr. Gulfam Alam SI (M) (Retd)

Human Resource Committee

No of Meetings Attended

Dr. Nadeem Inayat

Mr. Qaiser Javed

Brig Muhammad Saeed Khan (Retd)

Technical Committee

No of Meetings Attended

Brig Dr. Gulfam Alam, SI(M) (Retd)

Maj Gen Muhammad Farooq Iqbal HI (M)(Retd)

Brig Muhammad Saeed Khan (Retd)

Note: Chief Financial Officer (CFO) and Internal Auditor were invariably invited to attend the meetings of Audit
Committee. External Auditors were also invited to attend two meetings of Audit Committee, wherein, issues related
to annual and half year's financial statements were discussed.
Change of Chairman
27. On retirement of Lt Gen Muhammad Mustafa Khan,
HI(M) (Retired), Lt Gen Khalid Nawaz Khan, HI(M),
Sitar-i-Esar, (Retired) was appointed as Chairman of
BODs of FCCL with effect from 02 January 2015.
The Board while welcoming the new Chairman, also
placed on record its appreciation for the
commendable services rendered by Lt Gen
Muhammad Mustafa Khan, HI(M) (Retired).
Change of Directors
28. As a result of resignation tendered by Mr Max Kruse
from Directorship, Mr Pervez Inam was appointed
as Director of the Company with effect from 27th
February 2015.

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Pattern of Share-holding
29. Pattern of share-holding as on 30th June 2015 is
attached as Annex A.
Product Quality
30. FCCL has always endeavored to produce the best
quality cement in Pakistan and now markets top of
the line OPC, low Alkaly and Sulphate Resistent
Cement. FCCL Laboratory is fully equipped with
latest and state of the art equipment in accordance
with National and International Standards. As a
company, FCCL is focused on customers
satisfaction, employees morale and fair deal to its
partners in the business. The company has a well
designed and effectively practiced Quality Control
Policy.

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FAUJI CEMENT COMPANY LIMITED

a.

Quality Management System. Procedures

and systems are appropriately placed and
implemented ensuring supply of high quality
cement to customers. Diversification of
products with higher standard of quality has
placed Fauji Cements in high demand by the
Hydro Power Projects and other mega
development schemes in public and private
sectors.

(1) ISO 9001:2008. Fauji Cement is certified

for compliance to the latest Quality
Assurance Standards. The certification is
audited by TUV Austria.

ANNUAL REPORT

Waste Heat Recovery Power Plant will help in:a.

b.
c.

d.

Generating cheap electricity and thus

reducing the cost of production
Reducing load on national grid
Operating line 2 together with integral captive
power plant even during WAPDA power
breakdowns.
Keeping the environment clean by
eliminating emissions of more than 32,000
tons of Carbon Dioxide annually.

Waste Heat Recovery Power Plant

31. Mindful of energy crisis in the country vis--vis its
impact on Industrial sector, FCCL installed
Waste Heat Recovery Power Plant with the
designed capacity of generating 12 MW
electricity through recycling of waste heat of the
plant. The plant was setup by SINOMA Energy
Conservation Company from China. Chinese
engineers and FCCL project team worked
hands in gloves and completed the project 40
days prior to the scheduled date. FCCL started
generating its own electricity with effect from
20th March 2015. Lt Gen Khalid Nawaz Khan,
HI (M) Sitara-i-Esar Retd and Lt Gen Sardar
Mahmood Ali Khan, HI (M) (Retd) formally
inaugurated the project on 14th May 2015.

WHRPP Inauguration ceremony

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FCCL Management has a pro-active approach towards

fulfillment of Corporate Social Responsibility where it has
safeguard measures for sustainable environment,
community development programs and employees
welfare steps. The measures taken by Fauji Cement
Company have been acknowledged by the society and
concerned authorities through different awards.
(1) CSR Awards 2015. As an acknowledgement to the
measures taken by Fauji Cement for fulfilling
Corporate Social Responsibility, it has been awarded
with the award for extraordinary steps.
WHRPP Inauguration ceremony

Management Representative Mr. Amir Saleem, receiving CSR Award 2015

(2) Annual Environmental Excellence Awards 2014.

Fauji Cement Company has been awarded the
environmental excellence award for the last 5
consecutive years. FCCL ensures implementation of
active measures and essential safeguards to have
sustainable environment for the next generations.

Waste Heat Recovery Power Plant

Corporate Social Responsibilities and Sustainable

Environment Care
32. Donation to IDPs. Rupees ten million were donated
through Fauji Foundation to Prime Ministers Relief Fund
for IDPs of North Waziristan.
33. Care for the Social Responsibility is often portrayed as
determined on economic growth. At Fauji Cement, we
have laid that myth to rest.
a

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Fauji Cement strongly believes in paying back a portion to

the community in the area it operates.

General Manager, Muhammad Siddiq Khan receiving 11th

Annual Environmental Award 2014

(3) UNEP Acknowledgement. United Nations

Environment Program has also acknowledged tree
Plantation being done by Fauji Cement with reference
to Billion Tree Campaign. The Company has plans
to plant more than 50,000 Trees in next few years.
This year FCCL successfully planted more than 6000
trees besides distribution of plants amongst local
schools and community farmers.

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FAUJI CEMENT COMPANY LIMITED

b.

Technical Education and Skill Development.

Realizing the importance of technically skilled
manpower in development of any nation, FCCL
has taken initiative to develop Fauji Technical
Training Institute. First phase of the institute has
been completed for imparting education to
apprentices, Trainees and FCCL own employees.
The institute has a hostel with messing facilities for
the students.

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c.

Woman Vocational Training Centre. FCCL has

developed the Woman Vocational Training Centre at
the cost of Rs. 2.5 million. Free of cost training is
imparted to women / girls of the surrounding area in
following disciplines:-

1.

Dress Cutting & Sewing (Domestic Version)

3 months

2.

Dress Cutting & Sewing (Industrial Version)

6 months

3.

Hand Embroidery

3 months

4.

Hand / Machine knitting

3 months

5.

Short Computer Courses (Summer Camp)

d.

Education Facilities. English Medium Secondary

School is being run by Fauji Cement with strength of 553
students from Class Nursery to Class 10. Continuous
improvement measures are taken to up-grade and
up-date the school to impart quality education.

e.

2 months

Children Park. Management of FCCL felt need of

recreational facility for the children of local community
and decision was taken to establish a children park. The
park has been completed and the local community
children are enjoying the facility.

15 >

FCCL

ANNUAL REPORT

2O15

(4) Fire Safety. Fire fighting and fire alarm systems are installed
to guard against any incident. Funds are allocated every year
for upgradation and maintenance of the safety equipment.
Management Systems

f.

Medical Facility. Free medical treatment is extended

to the local community through Company
Operational Medical Dispensary. The facility is
equipped with necessary equipment. Doctors (with
MBBS degrees) including a lady Doctor are available to
extend treatment to patients. A well equipped
Ambulance has also been placed to cater for timely
evacuation of serious cases.

g.

Road Works. FCCL took the initiative to rebuild the

road connecting adjacent villages. Rs. 47 Million have
been spent on the project.

h.

Employees Welfare Activities

(1) Canteen for Company Employees. Was up-graded

to provide good quality food to the employees. Food is
provided at subsidized rates to minimize impact of
inflation on the employees.

34. Fauji Cement management is strongly committed to

sustainable Environment and Quality Management. Measures
instituted by the company have been well recognized by the
society and independent certification authorities. The
company is ISO Certified. TUV Austria are External Auditors
for Integrated Management System, to ensure that
Environment and Quality Management System of the
company are kept to acceptable norms.
a.

Environment Management System. Environmental

aspects are well considered and taken care in day to day
business activities. Steps like plantation of 50,000 trees,
development of Children Park, Installation of RDF plant
and erection of Waste Heat Recovery Power Plant
together with energy conservation measures are worth
mentioning.

(1) ISO 14001:2004. Fauji Cement fully complies with national

and International regulations pertaining to environmental
aspects and is always conscious about industrial development
impacting the environment. Fauji Cement is 14001:2004
certified by TUV Austria.

(2) Sports Gala. Was organized for employees of Fauji

cement as well as for the local community. Local players
from adjacent villages and FCCL employees
participated actively in volley ball and cricket.
(3) Health and Safety. Company Management accords due
priority to health and safety of its employees and
accordingly keeps the allocation in the annual budget.
Besides measures taken at the plant, all employees are
provided with personal protection equipment.

< 16

www.fccl.com.pk

FAUJI CEMENT COMPANY LIMITED

(2) Environmental Awareness for Public.

Tree Plantation Campaign with involvement
of local community was carried out in order
to create awareness for sustainable
environment. Free of cost plants were
provided to local schools and farmers for
the purpose. Community willingly and
actively participated in tree plantation
campaign.

ANNUAL REPORT

2O15

Acknowledgement
35. The Directors express their deep appreciation
to valued Shareholders, Customers, Financial
Institutions / Government Departments for their
cooperation and Companys Employees for
their hard work and commitment which has
enabled the company to achieve exceptionally
good operational results.
36. The Board is of the opinion that with sustained
efforts and ALLAHs blessings, the Company will
continue on its way to success.

For and on behalf of the Board

b.

Alternate Fuels. FCCL is continuously striving to

maximize replacement of fossil fuels with alternate /
biomass fuels. Successful usages of Municipal Sold
Waste (MSW) and poultry waste have reduced
consumption of coal. Efforts are in hand in developing
the feeding mechanism for alternate fuels at the Line 2.

Lt Gen Khalid Nawaz Khan

HI (M) Sitara-e-Esar (Retd)
Chairman

Rawalpindi
01 September 2015

Lt Gen Sardar Mahmood Ali Khan, HI(M)

(Retd), CEO/MD with Company Secretary and
Plant Management

17 >

FCCL

ANNUAL REPORT

2O15

Statement of Compliance
with the Code of Corporate
Governance
Name of Company

Fauji Cement Company Limited

Year ending

30th June 2015

This statement is being presented to comply with the Code of Corporate Governance (CCG) contained in listing regulation
No 35 of Karachi Stock Exchange, listing regulation No 35 of Lahore Stock Exchange and Chapter XI of the Listing
Regulation of Islamabad Stock Exchange for the purpose of establishing a framework of good governance, whereby a listed
company is managed in compliance with the best practices of corporate governance (CCG).
The company has applied the principles contained in the CCG in the following manner:
1.

The company encourages representation of independent non-executive directors and directors representing minority
interests on its board of directors. At present the board includes:

Category

Names

Independent Directors

Brig Asmat Ullah Khan Niazi , SI(M) (Retd)

Mr Pervez Inam

Executive Directors

Lt. Gen Sardar Mahmood Ali Khan, HI(M) (Retd)

Non-Executive Directors

1. Lt. Gen Khalid Nawaz Khan, HI(M) Sitara-i-Esar (Retd) (Chairman)

2. Mr. Qaiser Javed
3. Mr. Dr. Nadeem Inayat
4. Maj Gen Syed Jamal Shahid, HI(M) (Retd)
5. Maj Gen Muhammad Farooq Iqbal, HI(M) (Retd)
6. Brig Dr. Gulfam Alam, SI(M) (Retd)
7. Brig Muhammad Saeed Khan (Retd)

2.

The directors have confirmed that none of them is serving as a director on more than seven listed companies, including
this company (excluding the listed subsidiaries of listed holding companies where applicable).

3.

All the resident directors of the company are registered as taxpayers and none of them has defaulted in payment of any loan
to a banking company, a Development Finance Institution (DFI) or Non Banking Finance Institution (NBFI) or, being a
member of a stock exchange, has been declared as a defaulter by that stock exchange.

4.

A casual vacancy occurred during the period under review and filled within 90 days.

5.

The company has prepared a Code of Conduct and has ensured that appropriate steps have been taken to
disseminate it throughout the company along with its supporting policies and procedures.

6.

The board has developed a vision / mission statement, overall corporate strategy and significant policies of the
company. A complete record of particulars of significant policies along with the dates on which they were approved
or amended has been maintained.

7.

All the powers of the board have been duly exercised and decision on material transactions, including appointment and
determination of remuneration and terms and conditions of employment of the CEO, other executive and
non-executive directors, have been taken by the board.

< 18

www.fccl.com.pk

FAUJI CEMENT COMPANY LIMITED

ANNUAL REPORT

2O15

8.

The meetings of the Board were presided over by the Chairman and, in his absence, by a director elected by the board
for this purpose and the board met at least once in every quarter. Written notices of the board meetings, along with
agenda and working papers, were circulated at least seven days before the meeting. The minutes of the meetings were
appropriately recorded and circulated.

9.

The Directors at FCCL Board are adequately trained to perform their duties. Lt Gen Muhammad Mustafa Khan (Retd)
Ex Chairman, Mr. Qaiser Javed and Mr. Dr. Nadeem Inayat directors of the Company has obtained certificate under
directors training program offered by institution that meets the criteria specified by SECP in the period under review.

10. The board has already approved appointment of CFO, Company Secretary and Head of Internal Audit, including their
remuneration and terms and conditions of employment.
11. The directors report for this year has been prepared in compliance with the requirements of the CCG and fully
describes the salient matters required to be disclosed.
12. The financial statements of the company were duly endorsed by CEO and CFO before approval of the board.
13. The directors, CEO and executives do not hold any interest in the shares of the company other than that disclosed in
the pattern of share holding.
14. The company has complied with all the corporate and financial reporting requirements of the CCG.
15. The company has formed an Audit Committee. It comprises five members, of whom all are non-executive directors
and the Chairman of the committee is an Independent Director a non executive director.
16. The meetings of the audit committee were held at least once every quarter prior to approval of interim and final results
of the company and as required by the CCG. The terms of reference of the committee have been formed and advised
to the committee for compliance.
17. The board has formed an HR Committee. It comprises three members, of whom all are non-executive directors and
the chairman of the committee is also a non executive director.
18. The board has set up an effective internal audit department which is suitably qualified and experienced for the purpose
and is conversant with the policies and procedures of the company.
19. The statutory auditors of the company have confirmed that they have been given a satisfactory rating under
the quality control review program of the Institute of Chartered Accountants of Pakistan (ICAP), that they or any of
the partners of the firm, 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 the ICAP.
20. 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.
21. The closed period, prior to the announcement of interim/final results, and business decisions, which may materially
affect the market price of companys securities, was determined and intimated to directors, employees and stock
exchange(s).
22. Material/price sensitive information has been disseminated among all market participants at once through stock
exchange(s).
23. We confirm that all other material principles enshrined in the CCG have been complied with.

Lt Gen Khalid Nawaz Khan, HI (M) Sitara-e-Esar (Retd)

Chairman Board of Directors FCCL

19 >

FCCL

ANNUAL REPORT

2O15

Review Report

To the Members on the Statement of Compliance

with the Code of Corporate Governance
We have reviewed the enclosed Statement of Compliance with the best practices contained in the Code of Corporate
Governance (the Code) prepared by the Board of Directors of Fauji Cement Company Limited (the Company) for the
year ended 30 June 2015 to comply with the requirements of Listing Regulation No. 35 of Karachi Stock Exchange
Limited, Listing Regulation No. 35 of Lahore Stock Exchange Limited and Chapter XI of the Listing Regulations of
Islamabad Stock Exchange Limited, where the Company is listed.
The responsibility for compliance with the Code is that of the Board of Directors of the Company. Our responsibility is
to review, to the extent where such compliance can be objectively verified, whether the Statement of Compliance
reflects the status of the Company's compliance with the provisions of the Code and report if it does not and to
highlight any non-compliance with the requirements of the Code. A review is limited primarily to inquiries of the
Company's personnel and review of various documents prepared by the Company to comply with the Code.
As a part of our audit of the 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. We are not required to
consider whether the Board of Directors' statement on internal control covers all risks and controls or to form an
opinion on the effectiveness of such internal controls, the Company's corporate governance procedures and risks.
The Code requires the Company to place before the Audit Committee, and upon recommendation of the Audit
Committee, place before the Board of Directors for their review and approval its related party transactions
distinguishing between transactions carried out on terms equivalent to those that prevail in ann.'s length transactions and
transactions which are not executed at ann.'s length price and recording proper justification for using such alternate
pricing mechanism. We are only required and have ensured compliance of this requirement to the extent of the
approval of the related party transactions by the Board of Directors upon recommendation of the Audit Committee.
We have not carried out any procedures to determine whether the related party transactions were undertaken at ann.'s
length price or not.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance
does not appropriately reflect the Company's compliance, in all material respects, with the best practices contained in
the Code as applicable to the Company for the year ended 30 June 2015.

Islamabad
01 September 2015

< 2O

KPMG Taseer Hadi & Co.

Chartered Accountants
Riaz Pesnani

www.fccl.com.pk

FAUJI CEMENT COMPANY LIMITED

ANNUAL REPORT

Auditors' Report

To the Members of Fauji Cement Company Limited

We have audited the annexed balance sheet of Fauji Cement Company Limited ("the Company") as at 30 June 2015
and the related profit and loss account, statement of comprehensive income, cash flow statement and statement of
changes in equity together with the notes forming part thereof, for the year then ended and we state that we have
obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the
purposes of our audit.
It is the responsibility of the Company's management to establish and maintain a system of internal control, and prepare
and present the above said statements in conformity with the approved accounting standards and the requirements of
the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require
that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free
of any material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and
disclosures in the above said statements. An audit also includes assessing the accounting policies and significant estimates
made by management, as well as, evaluating the overall presentation of the financial statements. We believe that our
audit provides a reasonable basis for our opinion and, after due verification, we report that:
(a)

in our opinion, proper books of account have been kept by the Company as required by the Companies
Ordinance, 1984;

(b)

in our opinion(i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in
conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are
further in accordance with accounting polices consistently applied;
(ii) the expenditure incurred during the year was for the purpose of the Company's business; and
(iii) the business conducted, investments made and the expenditure incurred during the year were in accordance
with the objects of the Company;

(c)

in our opinion and to the best of our information and according to the explanations given to us, the balance
sheet, profit and loss account, 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, and, give the information required by the Companies Ordinance, 1984, in the manner so
required and respectively give a true and fair view of the state of the Company's affairs as at 30 June 2014 and
of the profit, its cash flows and changes in equity for the year then ended; and

(d)

in our opinion, Zakat deductible at source under Zakat and Ushr Ordinance, 1980 (XVIII of 1980) was deducted
by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.

Islamabad
01 September 2015

KPMG Taseer Hadi & Co.

Chartered Accountants
Riaz Pesnani

21 >

2O15

BALANCE SHEET
AS AT 30 JUNE 2015

Note

2015
Rupees'000

2014
Rupees'000

SHARE CAPITAL AND RESERVES

Share capital
4
13,798,150
13,798,150
Reserves
5
3,620,834
1,990,037

17,418,984
15,788,187
NON - CURRENT LIABILITIES

Long term financing - secured
6
4,000,119
5,362,998
Deferred liabilities
7
4,378,810
3,747,641
8,378,929
9,110,639
CURRENT LIABILITIES

Trade and other payables
8
2,055,628
1,725,648
Markup accrued
144,013
163,457
Short term borrowings - secured
9
5,758
42,232
Current portion of long term financing
6
2,524,978
2,551,169

4,730,377
4,482,506
30,528,290

29,381,332

CONTINGENCIES AND COMMITMENTS 10

The annexed notes 1 to 36 form an integral part of these financial statements.

CHIEF EXECUTIVE

< 22

DIRECTOR

Note

2015
Rupees'000

2014
Rupees'000

NON - CURRENT ASSETS

Property, plant and equipment
11
23,880,553
23,881,426
Long term advance
900
1,800
Long term deposits and prepayments
12
233,241 309,749
24,114,694
24,192,975
CURRENT ASSETS
Stores, spares and loose tools
13
1,965,411
2,016,336
Stock in trade
14
888,536 1,409,107
Trade debts
15
566,141
580,214
Advances
16
11,190 50,414
Trade deposits, short term prepayments and
balances with statutory authority
17
375,563
268,545
Interest accrued
3,902 173
Other receivables
18
6,039
20,585
Other financial assets
19
300,211
Cash and bank balances
20
2,296,603
842,983

6,413,596
5,188,357


30,528,290
29,381,332

CHIEF EXECUTIVE

DIRECTOR

23 >

PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED 30 JUNE 2015

Note

2015
Rupees'000

2014
Rupees'000

Turnover - net
21
18,642,358
17,532,277
Cost of sales
22 (11,615,261) (11,448,142)
Gross profit
7,027,097
6,084,135

Distribution cost
23 (141,018)
(125,106)
Administrative expenses
24
(271,629)
(225,957)
Other operating expenses
25 (419,918)
(333,504)
Finance cost
26 (706,027)
(1,042,144)
Other income
27 191,386
152,081
Profit before taxation
5,679,891 4,509,505

Taxation
28 (1,563,726)
(1,883,511)

Profit for the year
4,116,165
2,625,994

Earnings per share - Basic (Rupees)
29.1 2.91
1.80
Earnings per share - Diluted (Rupees)
29.2
2.91
1.80

The annexed notes 1 to 36 form an integral part of these financial statements.

CHIEF EXECUTIVE

< 24

DIRECTOR

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2015

2015
Rupees'000

2014
Rupees'000

Profit for the year

4,116,165
2,625,994

Other comprehensive income for the year

-

Total comprehensive income for the year
4,116,165
2,625,994

The annexed notes 1 to 36 form an integral part of these financial statements.

CHIEF EXECUTIVE

DIRECTOR

25 >

CASH FLOW STATEMENT

FOR THE YEAR ENDED 30 JUNE 2015

Note

2015
Rupees'000

2014
Rupees'000

Cash flows from operating activities

Net profit before taxation
5,679,891
4,509,505
Adjustments for:
Depreciation 1,291,054
1,269,247
Provision for compensated absences
22,840
23,346
Provision for slow moving spares
-
38,828
Workers' (Profit) Participation Fund including interest and WWF
419,161
332,631
Finance cost
705,384
1,041,792
Gain on disposal of property, plant and equipment
(3,957)
(8,358)
Interest income including interest on long term advance
(155,019)
(130,755)

2,279,463
2,566,731
Operating cash flows before working capital changes

7,959,354
7,076,236
Decrease/ (increase) in working capital
Stores and spares
50,925
(185,245)
Stock in trade
520,571
(428,015)
Long-term deposits and prepayments
-
127,406
Long-term advance
900
900
Trade debts
14,073
(374,412)
Advances
39,224
(37,494)
Trade deposits and short term prepayments
765
2,081
Other receivables
14,546
1,616
Trade and other payables
338,438
260,803

979,442
(632,360)
Cash generated from operations
8,938,796
6,443,876
Compensated absences paid
(21,614)
(20,433)
Payment to Workers' (Profit) Participation Fund
(332,732)
(240,996)
Taxes paid

(1,159,623)
(328,540)
Net cash generated from operating activities
7,424,827
5,853,907

Cash flows from investing activities
Additions in property, plant and equipment excluding borrowing cost capitalized
(1,210,368)
(496,184)
Proceeds from disposal of property, plant and equipment

4,084
88,194
Other financial assets
(300,211)
Interest received on bank deposits and long term advance
151,290
141,054
Net cash used in investing activities
(1,355,205)
(266,936)

Cash flows from financing activities
Disbursement of long term financing
1,059,453
Repayment of long term finances
(2,600,172)
(2,613,483)
Dividend paid on preference shares
(227,408)
(210,687)
Dividend paid on ordinary shares
(2,319,660)
(2,654,711)
Finance cost paid
(491,741)
(849,825)
Net cash used in financing activities
(4,579,528)
(6,328,706)

Net increase/ (decrease) in cash and cash equivalents
1,490,094
(741,735)
Cash and cash equivalents at beginning of the year
800,751
1,542,486
Cash and cash equivalents at end of the year
30 2,290,845
800,751

The annexed notes 1 to 36 form an integral part of these financial statements.

CHIEF EXECUTIVE

< 26

DIRECTOR

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2015

Share capital

Capital reserve

Revenue reserve

Ordinary Preference Discount on Hedging

issue of shares reserve
Rupees'000
Balance at 01 July 2013 13,311,158

486,992

(1,364,385)

(273,237)

Total

Un-appropriated
profit
3,775,833

15,936,361

Total comprehensive income for the year

Profit for the year

2,625,994

2,625,994

Total comprehensive income for the year

2,625,994

2,625,994

Transfer during the year

115,472

115,472

Transactions with owners of the Company

Dividend on preference shares @ Rs. 4.67 per share

(227,408)

(227,408)

Final dividend 2013 @ Rs. 1.25 per share

(1,663,895)

(1,663,895)

Interim dividend 2014 @ Rs. 0.75 per share

(998,337)

(998,337)

Total transactions with owners of the Company

(2,889,640)

(2,889,640)

3,512,187

15,788,187

Balance at 30 June 2014 13,311,158

486,992

(1,364,385)

(157,765)

Total comprehensive income for the year

Profit for the year

4,116,165

4,116,165

Total comprehensive income for the year

4,116,165

4,116,165

Transfer during the year

84,870

84,870

Transactions with owners of the Company

Dividend on preference shares @ Rs. 4.94 per share

(240,785)

(240,785)

Final dividend 2014 @ Rs. 0.75 per share

(998,337)

(998,337)

Interim dividend 2015 @ Re.1.00 per share

(1,331,116)

(1,331,116)

Total transactions with owners of the Company

(2,570,238)

(2,570,238)

5,058,114

17,418,984

Balance at 30 June 2015 13,311,158

486,992

(1,364,385)

(72,895)

The annexed notes 1 to 36 form an integral part of these financial statements.

CHIEF EXECUTIVE

DIRECTOR

27 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

1
LEGAL STATUS AND OPERATIONS


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 Fauji Towers, Block-III, 68-Tipu
Road, Rawalpindi.

2
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 the fair values.

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
(PKR) which is the Company's functional and presentation currency.
2.4 Use of estimates and judgments


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.


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.

< 28



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 regularly reviews useful life and residual value for 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, spare parts and loose tools to
assess any diminution in the respective carrying values. Net realisable value is determined with reference
to estimated selling price less estimated cost to complete and estimated cost 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 pertinent issues in the past.


The Company regularly reviews the trend of proportion of incomes under Presumptive Tax Regime and
Normal Tax Regime income and the change in proportions, if significant, is accounted for in the year of
change.

2.4.4 Provisions and contingencies


A provision is recognized, as a result of past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are determined by discounting the expected future cash
flows at pre-tax rate that reflects the current market assessments of the time value of money and the
risk specific to the liability. The un-winding of discount is recognized as finance cost, if any.


Where it is not probable that an outflow of resources embodying economic benefits will be required to
settle the obligation or the amount of the obligation can not be measured with sufficient reliability, it is
disclosed as contingent liability.

2.4.5 Impairment


The carrying amounts of the Company's assets are reviewed at each balance sheet date to determine whether
there is any indication of impairment loss. If any such indication exists, recoverable amount is estimated using criteria
given in respective accounting standards to determine the extent of impairment loss, if any.

29 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

2.5 Standards, interpretations and amendments to approved accounting standards that are not
yet effective


The following standards, amendments and interpretations of approved accounting standards will be
effective for accounting periods beginning on or after 01 July 2015:

-
Amendments to IAS 38 Intangible Assets and IAS 16 Property, Plant and Equipment (effective for
annual periods beginning on or after 1 January 2016) introduce severe restrictions on the use of
revenue-based amortization for intangible assets and explicitly state that revenue-based methods
of depreciation cannot be used for property, plant and equipment. The rebuttable presumption
that the use of revenue-based amortisation methods for intangible assets is inappropriate can be
overcome only when revenue and the consumption of the economic benefits of the intangible
asset are highly correlated, or when the intangible asset is expressed as a measure of revenue.The
amendments are not likely to have an impact on Companys financial statements.

-
IFRS 10 Consolidated Financial Statements (effective for annual periods beginning on or after 1
January 2015) replaces the part of IAS 27 Consolidated and Separate Financial Statements. IFRS
10 introduces a new approach to determining which investees should be consolidated. The single
model to be applied in the control analysis requires that an investor controls an investee when
the investor is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee. IFRS 10 has made
consequential changes to IAS 27 which is now called Separate Financial Statements and will deal
with only separate financial statements. Certain further amendments have been made to IFRS 10,
IFRS 12 and IAS 28 clarifying the requirements relating to accounting for investment entities and
would be effective for annual periods beginning on or after 1 January 2016. .

-
IFRS 11 Joint Arrangements (effective for annual periods beginning on or after 1 January 2015)
replaces IAS 31 Interests in Joint Ventures. Firstly, it carves out, from IAS 31 jointly controlled
entities, those cases in which although there is a separate vehicle, that separation is ineffective
in certain ways. These arrangements are treated similarly to jointly controlled assets/operations
under IAS 31 and are now called joint operations. Secondly, the remainder of IAS 31 jointly
controlled entities, now called joint ventures, are stripped of the free choice of using the equity
method or proportionate consolidation; they must now always use the equity method. IFRS 11 has
also made consequential changes in IAS 28 which has now been named Investment in Associates
and Joint Ventures. The amendments requiring business combination accounting to be applied
to acquisitions of interests in a joint operation that constitutes a business are effective for annual
periods beginning on or after 1 January 2016. The adoption of this standard is not likely to have
an impact on Companys financial statements.

-
IFRS 12 Disclosure of Interests in Other Entities (effective for annual periods beginning on or after
1 January 2015) combines the disclosure requirements for entities that have interests in subsidiaries,
joint arrangements (i.e. joint operations or joint ventures), associates and/or unconsolidated
structured entities, into one place. The adoption of this standard is not likely to have an impact on
Companys financial statements.

< 30


-
IFRS 13 Fair Value Measurement (effective for annual periods beginning on or after 1 January
2015) defines fair value, establishes a framework for measuring fair value and sets out disclosure
requirements for fair value measurements. IFRS 13 explains how to measure fair value when it is
required by other IFRSs. It does not introduce new fair value measurements, nor does it eliminate
the practicability exceptions to fair value measurements that currently exist in certain standards.
The adoption of this standard is not likely to have an impact on Companys financial statements.

-
Amendments to IAS 27 Separate Financial Statements (effective for annual periods beginning on
or after 1 January 2016). The amendments to IAS 27 will allow entities to use the equity method
to account for investments in subsidiaries, joint ventures and associates in their separate financial
statements. The adoption of the amended standard is not likely to have an impact on Companys
financial statements.

-
Agriculture: Bearer Plants [Amendments to IAS 16 and IAS 41] (effective for annual periods
beginning on or after 1 January 2016). Bearer plants are now in the scope of IAS 16 Property,
Plant and Equipment for measurement and disclosure purposes.Therefore, a company can elect to
measure bearer plants at cost. However, the produce growing on bearer plants will continue to be
measured at fair value less costs to sell under IAS 41 Agriculture. A bearer plant is a plant that: is
used in the supply of agricultural produce; is expected to bear produce for more than one period;
and has a remote likelihood of being sold as agricultural produce. Before maturity, bearer plants are
accounted for in the same way as self-constructed items of property, plant and equipment during
construction. The adoption of the amended standard is not likely to have an impact on Companys
financial statements

-
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments
to IFRS 10 and IAS 28) [effective for annual periods beginning on or after 1 January 2016]. The
main consequence of the amendments is that a full gain or loss is recognised when a transaction
involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognised
when a transaction involves assets that do not constitute a business, even if these assets are housed
in a subsidiary. The adoption of these amendments is not likely to have an impact on Companys
financial statements

Annual Improvements 2012-2014 cycles (amendments are effective for annual periods beginning
on or after 1 January 2016). These amendments are not likely to have an impact on Company's
financial statements. The new cycle of improvements contain amendments to the following
standards:

-
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. IFRS 5 is amended to
clarify that if an entity changes the method of disposal of an asset (or disposal group) i.e. reclassifies
an asset from held for distribution to owners to held for sale or vice versa without any time lag,
then such change in classification is considered as continuation of the original plan of disposal and if
an entity determines that an asset (or disposal group) no longer meets the criteria to be classified
as held for distribution, then it ceases held for distribution accounting in the same way as it would
cease held for sale accounting.

-
IFRS 7 Financial Instruments- Disclosures. IFRS 7 is amended to clarify when servicing arrangements

31 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

are in the scope of its disclosure requirements on continuing involvement in transferred financial
assets in cases when they are derecognized in their entirety. IFRS 7 is also amended to clarify that
additional disclosures required by Disclosures: Offsetting Financial Assets and Financial Liabilities
(Amendments to IFRS7) are not specifically required for inclusion in condensed interim financial
statements for all interim periods.

-
IAS 19 Employee Benefits. IAS 19 is amended to clarify that high quality corporate bonds or
government bonds used in determining the discount rate should be issued in the same currency
in which the benefits are to be paid.

-
IAS 34 Interim Financial Reporting. IAS 34 is amended to clarify that certain disclosures, if they are
not included in the notes to interim financial statements and disclosed elsewhere should be cross
referred.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


The accounting policies set out below have been applied consistently to the period presented in these
financial statements.

3.1 Taxation


Income tax expense comprises current and deferred tax. Income tax is recognized in profit and loss
account except to the extent that it relates to items recognized directly in statement of comprehensive
income or equity, in which case it is recognized in statement of comprehensive income or equity.


Current


Provision for current taxation is based on taxable income at the applicable rate of tax after taking into
account applicable tax credits, rebates and exemptions available, if any.


Deferred


Deferred tax is accounted for using the balance sheet liability method in respect of 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 taxable profit. Deferred tax liabilities are
recognised for all taxable temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which the deductible temporary differences,
unused tax losses and tax credits can be utilized. Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred tax is not recognised on temporary differences arising from the initial recognition of assets
or liabilities in a transaction that is not a business combination and that affects neither accounting nor
taxable profit or loss, and differences arising on the initial recognition of goodwill.

< 32

Deferred tax is calculated at the rates that are expected to apply to the period when the differences
reverse, based on tax rates that have been enacted. Deferred tax assets and liabilities are offset if there is
a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied
by the same tax authority on the same taxable entity, or on different taxable entities, but they intend
to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised
simultaneously.


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 - 27 of the Institute of Chartered
Accountants of Pakistan.The effect of the adjustment is charged or credited to income currently.

3.2 Property, plant and equipment


Property, plant and equipment except for freehold land and capital work in progress are stated at
cost less accumulated depreciation and impairment losses, if any. Freehold land and capital work in
progress are stated at cost less allowance for impairment, if any. Cost of property, plant and equipment
includes acquisition cost, borrowing cost during construction phase of relevant asset and other directly
attributable costs including trial run production expenses (net of income, if any). Transfers from capital
work in progress are made to the relevant category of property, plant and equipment as and when the
assets are available for use in the manner intended by the Company's management.


Depreciation is charged to income on the straight line method so as to write off the depreciable amount
of the property, plant and equipment over their estimated useful lives at the rates specified in note 11.
Depreciation on depreciable assets is commenced from the date the asset is available for use upto the
date when the asset is disposed off.


The cost of replacing a major item of property, plant and equipment is recognized in the carrying
amount of the item if it is probable that the future economic benefits embodied within the item will
flow to the Company and its cost can be measured reliably. The carrying amount of the replaced item is
derecognized. The cost of the day to day servicing of property, plant and equipment are recognized in
profit or loss as incurred.


Gains and losses on disposal of an item of property, plant and equipment are determined by comparing
the proceeds from disposals with the carrying amount of property, plant and equipment and are
recognized on net basis within "other income" in profit or loss.

3.3 Impairment

Non-financial assets
The carrying amount of the Company's assets are reviewed at each balance sheet date to determine
whether there is any indication of impairment. If any such indication exists, then the asset's recoverable
amount is estimated. Impairment losses are recognized as expense in the profit and loss account.

An impairment loss is reversed if there has been a change in the estimates used to determine the
recoverable amount and loss is reversed only to the extent that the assets carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation or amortisation, if

33 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

no impairment loss had been recognised. For non-financial assets, financial assets measured at amortized
cost, available-for-sale financial assets that are debt securities, the reversal is recognised in profit and loss
account.


Financial assets


A financial asset is assessed at each reporting date to determine whether there is any objective evidence
that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one
or more events have had a negative effect on the estimated future cash flows of that asset. Individually
significant financial assets are tested for impairment on an individual basis. The remaining financial assets
are assessed collectively in groups that share similar credit risk characteristics.

3.4 Stores, spares and loose tools


Stores, spares and loose tools are valued at lower of weighted average cost and net realisable value
less impairment, if any. Cost is determined using weighted average method except for items in transit
which is determined on the basis of cost incurred upto the balance sheet date. For items which are slow
moving and/ or identified as surplus to the Company's requirements, adequate impairment is recognised.
The Company reviews the carrying amount of stores, spare parts and loose tools on a regular basis and
provision is made for obsolescence.

3.5 Stock in trade


Stock of raw material, except for those in transit, work in process and finished goods are valued at the
lower of average cost and net realizable value. Stock of packing material is valued at moving average cost
less impairment, if any. Cost of work in process and finished goods comprises cost of direct materials,
labour and appropriate manufacturing overheads.


Materials in transit are stated at cost comprising invoice value plus other charges paid thereon less
impairment, if any.


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.

3.6 Foreign currency transactions


Transactions in foreign currencies are translated into functional currency at exchange rates at the date
of transaction. Monetary assets and liabilities denominated in foreign currencies at balance sheet date
are translated to the functional currency at the exchange rates at that date. The foreign currency gain or
loss on monetary items is the difference between amortised cost in the functional currency at beginning
of the year, adjusted for effective interest and payments during the year, and amortised cost in foreign
currency translated at the exchange rate at balance sheet date. Exchange differences are included in the
profit and loss account.

< 34

3.7 Revenue recognition

Revenue from sale of goods in the course of ordinary activities is measured at the fair value of the
consideration received or receivable, net of commission. Revenue is recognized when significant risks and
rewards of ownership have been transferred to the customer, recovery of the consideration is probable,
there is no continuing management involvement with the goods, and the amount of revenue can be
measured reliably. Scrap sales and miscellaneous receipts are recognised on realised amounts. Profit on
deposits and advances is accounted for on a time proportion basis using the applicable rate of interest.


3.8 Mark-up bearing borrowings


Mark-up bearing borrowings are recognized initially at cost being the fair value of consideration received,
less attributable transaction costs. Subsequent to initial recognition, markup bearing borrowings are
stated at originally recognized amount less subsequent repayments, 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.

3.9 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 as the case may be. The Company de-recognizes the financial assets and liabilities when it ceases to
be a party to such contractual provision of the instrument. The Company recognises the regular way of
purchase or sale of financial assets using settlement date accounting.


Trade and other payables


Liabilities for trade and other amounts payable are initially recognised at fair value less any directly
attributable transaction cost. Subsequent to initial recognition, these are measured at amortised cost
using effective interest method.


Trade debts and other receivables


Trade debts and other receivables are initially recognised at fair value plus any directly attributable
transaction cost. Subsequent to initial recognition, these are measured at amortised cost using effective
interest method, less any impairment losses. Known bad debts are written off, when identified.


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.

3.10 Borrowing cost


Borrowing costs are recognised as an expense in the period in which they are incurred except where

35 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

such costs relate to the acquisition, construction or production of a qualifying asset in which case such
costs are capitalised as part of the cost of that asset. Borrowing cost includes exchange differences arising
from foreign currency borrowings to the extent these are regarded as an adjustment to borrowing
costs.

3.11 Staff retirement benefits


Provident fund


The Company operates a defined contributory provident fund scheme for permanent employees.
Monthly contributions are made to the fund @ 10% of the basic salary both by the Company and
employees. The Company's contribution is charged to the profit and loss account.


Compensated absences


The Company also provides for compensated absences to its employees on unavailed leaves according
to the Company's policy. Charge for the year is included in profit and loss account.

3.12 Other financial assets


Investments which are acquired principally for the purpose of selling in the near term or the investments
that are part of a portfolio of financial instruments exhibiting short term profit taking, are classified as
fair value through profit or loss-held for trading and designated as such upon initial recognition.These are
stated at fair values with any resulting gains or losses recognized directly in profit or loss.


3.13 Cash and cash equivalents


Cash and cash equivalents comprise cash in hand, balances at banks, running finances and short term
highly liquid investments with maturity of three months or less from the acquisition date that are subject
to insignificant risk of changes in their fair value.

3.14 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, 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. Provisions are
measured at the present value of expected expenditure, 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. Provisions are
reviewed at each balance sheet date and adjusted to reflect current best estimate.

3.15 Earnings per share


The Company presents basic and diluted earnings per share (EPS). Basic EPS is calculated by dividing the

< 36

profit and loss attributable to ordinary shareholders of the Company by the weighted average number
of ordinary shares outstanding during the period. Diluted EPS is determined by using profit and loss
attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding,
adjusted for the effects of all dilutive potential ordinary shares.

3.16 Dividend


Dividend on ordinary shares is recognized as a liability in the period in which it is declared. Dividend
on preference shares is recognized as a liability when the conditions as agreed with the preference
shareholders are fulfilled.

37 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015
4

SHARE CAPITAL

4.1 Authorized share capital


This represents 1,451,300,813 (2014: 1,451,300,813) ordinary shares of Rs. 10 each and 48,699,187
(2014: 48,699,187) preference shares of Rs. 10 each.
4.2 Issued, subscribed and paid up capital
2014
2015
Number '000 Number '000

2014
2015
Rupees '000 Rupees '000

Ordinary shares
171,311 Ordinary shares of Rs. 10 each-paid in cash
171,311


199,433 Ordinary shares of Rs. 10 each issued at a discount of Rs. 3.85 per share - paid in cash
199,433


322,546 Ordinary shares of Rs. 10 each issued at a premium of Rs. 6 per share-paid in cash
322,546


637,826 Ordinary shares of Rs. 10 each issued at a discount of Rs. 5 per share-paid in cash
637,826


1,331,116 1,331,116

Preference shares (note 4.2.1)

48,699 Preference shares of Rs. 10 each issued at a discount of Rs. 3.85 per share - paid in cash
48,699
1,379,815 1,379,815

1,713,105

1,713,105

1,994,325

1,994,325

3,225,465

3,225,465

6,378,263

6,378,263

13,311,158 13,311,158
486,992
486,992
13,798,150 13,798,150

4.2.1 Preference shares are convertible into ordinary shares only, at any time at Rs. 10 each without further
payment, such conversion being irreversible once exercised and having the same rights as ordinary shares
in the Company including pari passu voting rights with ordinary shares.

4.2.2 Fauji Foundation holds 494,951,055 (2014: 494,951,055) ordinary shares and 48,699,187 (2014:
48,699,187) preference shares of the Company at the year end. In addition Fauji Fertilizer Company
Limited, Fauji Fertilizer Bin Qasim Limited and Fauji Oil Terminal & Distribution Company Limited hold
93,750,000 (2014: 93,750,000), 18,750,000 (2014: 18,750,000) and 18,750,000 (2014: 18,750,000)
ordinary shares respectively of the Company at the year end.
2015
Rupees'000

2014
Rupees'000

5 RESERVES

Capital reserves
Discount on issue of shares
(1,364,385)
(1,364,385)
Hedging reserve
(72,895)
(157,765)
Revenue reserves
Un-appropriated profit
5,058,114
3,512,187

3,620,834
1,990,037

< 38

LONG TERM FINANCING - Secured

- Loans from banking companies-under mark up arrangements
Lender

Note

2015
2014
Rupees'000

Rate of interest
per annum

Outstanding
installment

Interest
payable

Syndicate Finance

6.1

1,345,455

2,018,182

"6 month's KIBOR + 0.75%

4 semi annual installments
(2014: 6 month's KIBOR +0.75%)" ending 16 February 2017

Semi annual

Citi Bank Europe Plc

6.2

2,979,689

4,333,495

"6 month's LIBOR + 0.70%

4 semi annual installments
(2014: 6 month's LIBOR +0.80%)" ending 7 May 2017

Semi annual

964,286

1,178,572

"6 month's KIBOR + 0.75%

9 semi annual installments
(2014: 6 month's KIBOR +1.35%)" ending 19 July 2019

Semi annual

Faysal Bank Limited

71,429

214,286

"6 month's KIBOR + 1%

(2014: 6 month's KIBOR + 1%)"

1 semi annual installment

ending 7 December 2015

Semi annual

Habib Bank Limited

115,200

192,000

"6 month's KIBOR + 0.75%

(2014: 6 month's KIBOR +1%)"

3 semi annual installments

ending 29 July 2016

Semi annual

1,059,453

"6 month's KIBOR + 0.40%"

10 semi annual installments Semi annual

ending 22 July 2021

(10,415)
6,525,097

(22,368)
7,914,167

National Bank of Pakistan

MCB Bank Limited

Less: Unamortized portion of
transaction cost
Less: Current portion shown
under current liabilities

(2,524,978) (2,551,169)
4,000,119 5,362,998

6.1 This is a syndicated term finance facility obtained from consortium of banks consisting of Allied Bank
Limited, United Bank Limited, Bank Alfalah Limited, Bank of Khyber, Bank Al Habib Limited and Soneri
Bank Limited.

6.2 This foreign currency loan amounting to USD 29.26 million (2014: USD 43.88 million) is an Export
Credit Agency (Euler Hermes Kreditversicherungs-AG (Hermes)) backed term finance facility obtained
from The Royal Bank of Scotland PLC. During the year this foreign currency loan facility has been
transferred by Royal Bank of Scotland Plc to Citi Bank Europe Plc in accordance with the terms of
financing agreement. The terms and conditions pertaining to the repayment structure and other terms
of loan remain unchanged.

6.3 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. Allied Bank Limited is the security trustee and inter creditor agent on behalf of all the
first pari passu lenders.

39 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

Note

2015
Rupees'000

2014
Rupees'000

DEFERRED LIABILITIES


Provision for compensated absences
7.1
43,743
42,611

Deferred taxation
7.2
4,335,067 3,705,030

4,378,810
3,747,641
7.1 Provision for compensated absences


Balance at beginning of the year
51,324 48,411

Add: Charge for the year
22,840
23,346

74,164 71,757

Less: Amount paid during the year
(21,614)
(20,433)

52,550
51,324

Less: Amount transferred to current liabilities
(8,807)
(8,713)

43,743
42,611

As per the rules of compensated absences, unavailed leaves up to 30 days are payable at the time of
retirement. Compensated absences over and above the period of 30 days are paid to the employees
as per the Company policy. Therefore the balance of unavailed compensated absences over that period
has been transferred to current liabilities. Actuarial valuation has not been carried out as the impact is
considered immaterial.
2015
Rupees'000

7.2

2014
Rupees'000

Deferred taxation

Deductible temporary differences
Unused tax losses representing unabsorbed depreciation - (749,606)

Unrealised exchange loss on foreign currency loan (132,124)
(169,276)

Provision for slow moving spares
(11,066)
(11,746)
Taxable temporary difference
Excess of accounting book value of fixed assets over

their tax base
4,478,257 4,635,658

4,335,067 3,705,030

< 40

Note

2014
2015
Rupees'000 Rupees'000

8
TRADE AND OTHER PAYABLES


Creditors

157,147
170,463

Accrued liabilities

875,441
667,952

Retention money
123,121
27,948

Security deposits
90,940
83,497

Advances from customers

186,735
198,538

Workers' (Profit) Participation Fund
8.1
14,920
42,089

Workers' Welfare Fund
113,598
118,151

Federal excise duty payable
37,084
12,623

Sales tax payable (net)
64,414
36,260

Withholding tax
27,891
15,661

Other liabilities
95,170
106,563

Compensated absences
7.1
8,807
8,713

Dividend payable on preference shares to a related party
240,785
227,408

Unclaimed dividend
19,575
9,782


2,055,628 1,725,648
8.1 Workers' (Profit) Participation Fund (WPPF)


Balance at beginning of the year
42,089
40,644

Interest on funds utilised in the Company's business
643
352

Allocation for the year
304,920
242,089

Payment to the fund during the year
(332,732)
(240,996)

14,920
42,089

Allocation for the year is made up as follows:

Profit for the year before tax, WPPF and WWF
6,098,409
4,841,784

Charge for the year at the rate of 5%
304,920
242,089
9

SHORT TERM BORROWINGS - secured

The Company has short term running finance and morahaba facility limits to the tune of Rs. 2,680
million (2014: Rs. 3,480 million) from banking companies. These facilities are secured against first pari
passu charge by way of hypothecation over the present and future assets of the Company (excluding
land and building) retaining 25% margin. These facilities carry markup ranging from 7.83%-11.37% per
annum (2014: 10.19%-11.38% per annum) of the utilized amount and payable on a quarterly basis.
Allied Bank Limited is the security trustee and inter creditor agent on behalf of all the first pari passu
lenders.

41 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

10
CONTINGENCIES AND COMMITMENTS

10.1 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, 1992 against an undertaking
provided by the Company. Subsequent to the release of plant and machinery, the Custom Authorities
raised a demand of Rs. 828.343 million in respect of items which are considered by the Federal Board
of Revenue (FBR) as not qualifying for the concessionary rate of duty. The status of the cases included
in the above amount are as follows:

(i)
The custom case of Rs. 337.227 million was decided in the Company's favour by the Honorable
Sindh High Court (SHC). On an appeal filed by the custom authorities to Honorable Supreme
Court of Pakistan against decision of SHC, the matter was referred back by the Honorable
Supreme Court to custom authorities for review.Thereafter, the Deputy Collector, then Collector
(Appeals) and finally Custom Appellate Tribunal decided the case against the Company and the
Company has filed an appeal before Sindh High Court.

(ii) Case for Rs. 15.797 million was decided by the Honourable Supreme Court of Pakistan against
the Company. Review Petition filed by the Company against the decision of Supreme Court of
Pakistan has been dismissed by the Court. Thereafter, Custom Authorities raised a demand of Rs.
808 million against which a petition was filed by the Company before Sindh High Court.

(iii) Case for Rs. 87.442 million is pending before the SHC.

(iv) Demand for Rs. 39.285 million is pending with the Custom Authorities.

(v) A demand of Rs. 20.257 million has been raised by the Assistant Collector of Customs on
September 21, 2004 and the Company has asked for details of this claim.

(vi) Remaining amount of Rs. 328.34 million has been claimed by Custom Authorities by revising the
total demand of custom duty as being short levied as per letter No. SI/NISC/IB/191/96-VI dated
31 December 1999.


The Company filed an application before FBR under Section 47A of the Sales Tax Act, 1990 and
Section 195C of the Customs Act, 1969 for constitution of an Alternate Dispute Resolution
Committee (ADRC) on the above cases. The proceedings of ADRC were concluded and final
recommendations were forwarded to FBR, which were in the Company's favour. FBR has informed
the Company that recommendations of ADRC are not acceptable and advised the Company to
plead the cases in court of law. The management of the Company is confident of a favourable
outcome, since the management believes that the goods imported by the Company (against
which the purported duties have been assessed) were covered by statutory exemption issued

< 42

by the Ministry of Finance in 1992, the grant of which was confirmed by the custom authorities
through various documents obtained from the appropriate authorities.
b)

c)

d)

e)

f)

A claim for damages amounting to Euros 833,120 equivalent Pak Rs. 93.77 (2014: Rs. 111.75)
million was in a tribunal of Arbitrators by the supplier of plant and machinery against which the
Company had filed a counter claim of Euros 410,914 equivalent Pak Rs. 46.25 (2014: Rs. 55.12)
million and Rs. 11.824 million (less the aggregate sum of equivalent Pak Rs. 21.33 million previously
recovered/ adjusted by the Company). In the arbitration proceedings between the supplier and
the Company, awards were passed by each arbitrator appointed by each party. As a result of the
difference in opinion of the two arbitrators, the matter was referred to an umpire, on whose
recommendations the supplier filed the award in the Court of Senior Civil Judge Islamabad, for
the same to be made a rule of court. The Court dismissed the supplier's case in February 2014.
The management believes that the Company has strong grounds to argue the case in the court
and accordingly, no liability has been accounted for in these financial statements.
The Company is contesting a claim of damages amounting to Rs. 19.75 million filed by a supplier
of plant and machinery arising from encashment by the Company of bank guarantee amounting
to Rs. 5.32 million which is appearing under payables in these financial statements. Islamabad High
Court stayed the case in 2009 for appointment of arbitrators to decide the matter. Under the
law, it was the responsibility of the supplier to appoint/ nominate its arbitrator but it has not yet
appointed any arbitrator to resolve the matter.
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, 2007 and imposed a penalty of Rs. 266 million on the Company. 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 . Based on expert legal advice,
the management is confident that the case will be decided in favour of the Company.
The Company is contingently liable in respect of guarantees amounting to Rs. 421 million (2014:
Rs. 426 million) issued by banks on behalf of the Company in the normal course of business.
These guarantees are secured against margin/lien on bank deposits 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.

For tax related contingencies refer note 28.1

10.2 Commitments


The Company has opened letters of credit for the import of spare parts valuing Rs. 82 million (2014:
Rs. 121 million).

43 >

< 44

Balance at 30 June 2014 148,452

5,345,523

Balance at 30 June 2015 148,452

- 1,402,306

Balance at 30 June 2014

- 1,612,151

On disposals

Balance at 30 June 2015

Rates of depreciation

4%-8%

3,711,541

Carrying amounts - 2014 148,452

3,733,372

Carrying amounts - 2015 148,452

209,845

Charge for the year

1,402,306

Balance at 01 July 2014

On disposals/written off

206,079

Charge for the year

1,196,227

Balance at 01 July 2013

Depreciation

230,796

Transfers

Disposals

880

5,113,847

Additions

Balance as at 01 July 2014 148,452

16,567

5,113,847

Transfers

Disposals/written off

1,140

5,096,140

148,452

Building
on
freehold
land

Additions

Balance at 01 July 2013

Cost

Freehold
land

4%-8%

19,567,814

19,845,432

6,775,255

1,048,078

5,727,177

5,727,177

(7,322)

1,033,091

4,701,408

26,620,687

1,325,696

25,294,991

25,294,991

(86,380)

94,924

25,286,447

Plant and
machinery

4%

26,046

22,802

10,886

3,244

7,642

7,642

3,244

4,398

33,688

33,688

33,688

33,688

15%

2,665

5,636

8,731

(895)

980

8,646

8,646

(512)

821

8,337

14,367

(896)

3,952

11,311

11,311

(512)

794

11,029

33.33%

6,909

6,796

55,498

(3,149)

4,734

53,913

53,913

(616)

4,289

50,240

62,294

(3,199)

4,671

60,822

60,822

(616)

4,835

56,603

10%-15%

6,833

11,597

81,598

(421)

2,935

79,084

79,084

(357)

2,534

76,907

93,195

(468)

7,746

85,917

85,917

(358)

1,395

84,880

Rupees'000

16,873

18,434

42,177

57,103

121,909

(13,074)

116,549

116,549

(15,943)

115,619

179,012

15% 20 %-25%

8,221

8,595

19,828

(54)

2,804

17,078

17,078

(15)

2,316

14,777

28,423

33,389

(13,103)

158,726

158,726

(54)

3,178

25,299

25,299

(16,719)

(16)

20,160

155,285

2,533

22,782

10%

27,855

27,855

27,855

27,855

27,855

27,855

27,855

27,855

360,768

40,768

40,768

(1,556,492)

1,236,492

360,768

360,768

(16,567)

370,403

6,932

Office
Capital work
Quarry
Electric Furniture Motor
Store held
Computers
in progress
vehicles
road and
and
installation
for capital equipment
development (Note:11.2)
and other fittings
expenditure
equipment

11 PROPERTY, PLANT AND EQUIPMENT

23,881,426

23,880,553

8,713,711

(17,593)

1,291,054

7,440,250

7,440,250

(24,765)

1,269,247

6,195,768

32,594,264

(17,720)

1,290,308

31,321,676

31,321,676

(104,601)

496,184

30,930,093

Total

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

Note

2014
2015
Rupees'000 Rupees'000

11.1 Depreciation charge for the year has been

allocated as follows:


Cost of sales
22
1,275,850 1,257,196

Distribution cost
23
4,054
4,576

Administrative expenses
24
11,150
7,475


1,291,054
1,269,247
11.2 Capital wok in progress

Waste Heat Recovery project
11.2.1
-
347,146
Others
40,768
13,622


40,768
360,768
11.2.1 The Company declared commencement effective 01 May 2015 of 10 MW of Waste Heat Recovery
Project. Accordingly, the Company has transferred the cost related thereto to operating assets. Borrowing
cost amounting to Rs. 80 million (2014: Nil) has been capitalized at the rate of 9.65% (2014: Nil) during
the year.
11.3 Aggregate of assets disposed off having book value of less than Rs 50,000 is as follows:

Original
cost

Book
value

Sale proceeds /
compensation
received

Gain

Mode of
disposal

3,957
8,358

Company's policy/auction

Rupees'000
2015
2014

17,720
104,601

127
79,836

4,084
88,194

Note
12 LONG TERM DEPOSITS AND PREPAYMENTS


Islamabad Electric Supply Company Limited

Sui Northern Gas Pipelines Limited

Prepaid guarantee fee

2014
2015
Rupees'000
Rupees'000

61,590
61,590
25,011
25,011
12.1
146,640
223,148
233,241 309,749

45 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

12.1 This represents premium paid to Euler Hermes Kreditversicherungs-AG (Hermes) for guarantee issued
to a lender as a security against long term loan for construction of new cement manufacturing line.
2015
Rupees'000

2014
Rupees'000

13 STORES, SPARES AND LOOSE TOOLS

Stores
812,136
893,916

Spares (Including items in transit of Rs. 29.3 million

(2014: Rs. 31.1 million)
1,189,924 1,159,787

Provision of slow moving spares

(38,828)
(38,828)

1,151,096
1,120,959

Loose tools

2,179
1,461

1,965,411
2,016,336
14
STOCK IN TRADE


Raw and packing material
145,147
215,990

Work in process
607,869
976,816

Finished goods
135,520
216,301

888,536 1,409,107
15 TRADE DEBTS

Unsecured

Considered good

498,141

Considered doubtful
3,281

501,422

Secured considered good

68,000

Less: Provision for doubtful debts
(3,281)

566,141
16 ADVANCES


Advances - Considered good

To suppliers
9,250

To employees
1,040

Current portion of long term advance

900


11,190

< 46

533,378
3,281
536,659
46,836
(3,281)
580,214

48,967
547
900
50,414

Note

2015
Rupees'000

17 TRADE DEPOSITS, SHORT TERM PREPAYMENTS

AND BALANCES WITH STATUTORY AUTHORITY

Deposits
7,005

Prepayments
17.1
2,857

Advance tax-net
365,701

375,563
17.1 This includes balance paid to associated company

amounting to Rs 1.1 million (2014: Nil)

18 OTHER RECEIVABLES


Other receivables - Considered good
4,132

Margin on letter of guarantee
1,907

6,039
19

2014
Rupees'000

7,940
2,687
257,918
268,545

1,518
19,067
20,585

OTHER FINANCIAL ASSETS

These are classified as fair value through profit or loss-held for trading and are made in money
market funds. Fair value of these investments are determined using quoted market price.
Note

2015
Rupees'000

2014
Rupees'000

20 CASH AND BANK BALANCES

Cash at banks

Deposit accounts
20.1
2,184,612
758,166

Current accounts
111,817 84,788

2,296,429
842,954

Cash in hand
174
29

2,296,603
842,983
20.1
-
-
-

Balances with banks include Rs. 88.1 million (2014: Rs. 83.5 million) in respect of security deposits
received.
Deposits of Rs. 4 million (2014: Rs. 4 million) with banks are under lien for letters of guarantee
issued on behalf of the Company.
This includes Term Deposit Receipts (TDRs) amounting to Rs. 1,287 million (2014: Rs. 500 million)
carrying interest rate of 7- 7.4 % p.a. (2014: 10 - 10.5 % p.a.).

47 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

2015
Rupees'000

Note
21 TURNOVER - NET


Sales - Local

20,283,533

- Export

2,467,801


22,751,334

Less: Sales tax
3,174,035

Excise duty

928,189

Export development surcharge

6,752


4,108,976

18,642,358
22
COST
OF
SALES

Raw materials consumed
841,118

Packing material consumed
945,898

Stores and spares consumed
26,003

Provision for slow moving spares
-

Salaries, wages and benefits (including retirement

benefits of Rs. 37.7 million (2014 : Rs. 35.9 million))

909,382

Rent, rates and taxes
20,280

Insurance

106,141

Fuel consumed
3,958,388

Power consumed
2,601,733

Depreciation
11.1
1,275,850

Repairs and maintenance

424,586

Technical assistance
2,618

Vehicle running and maintenance expenses
26,951

Printing and stationery

2,480

Travelling and conveyance
13,093

Communication, establishment and other expenses

15,815

11,170,336

Add: Opening work-in-process
976,816

Less: Closing work-in-process

(607,869)

Cost of goods manufactured
11,539,283

Add: Opening finished goods
216,301

Less: Closing finished goods
(135,520)

11,620,064

Less: Own consumption capitalized
(4,803)

11,615,261

< 48

2014
Rupees'000

18,555,629
2,750,619
21,306,248
2,941,426
824,950
7,595
3,773,971
17,532,277
866,133
890,604
35,637
38,828
788,964
18,964
98,684
4,367,340
2,954,173
1,257,196
490,044
1,870
26,534
3,286
13,817
13,861
11,865,935
638,144
(976,816)
11,527,263
141,182
(216,301)
11,452,144
(4,002)
11,448,142

Note

2015
Rupees'000

2014
Rupees'000

23 DISTRIBUTION COST


Salaries, wages and benefits (including retirement

benefits of Rs. 4.8 million (2014 : Rs. 4.5 million)

89,353
78,068

Export freight and other charges

23,944
20,658

Travelling and entertainment

3,564 1,894

Vehicle running and maintenance expenses

2,580
3,226

Rent, rates and taxes

4,009
4,085

Repairs and maintenance
359
936

Printing and stationery
1,491 1,703

Depreciation
11.1
4,054
4,576

Communication, establishment and other expenses
5,606
5,257

Advertisement and sale promotion expenses

5,801 4,443

Insurance
257
260

141,018
125,106
24

ADMINISTRATIVE EXPENSES

Salaries, wages and benefits (including retirement

benefits of Rs. 10.1 million (2014: Rs. 9.7 million)
202,288

Travelling and entertainment

6,781

Vehicle running and maintenance expenses
8,533

Insurance

863

Rent, rates and taxes
8,451

Repairs and maintenance

1,000

Printing and stationery
3,647

Communication, establishment and other expenses

12,118

Legal and professional charges

5,107

Depreciation
11.1
11,150

Donations
24.1
11,691

271,629

175,639
2,719
10,382
757
3,193
542
2,467
13,040
5,371
7,475
4,372
225,957

24.1 This includes Rs. 0.5 million (2014: Rs. 0.5 million) donated to Foundation University Phase - I
DHA Islamabad. The following directors' interest in the university is limited to the extent of their
involvement as directors:

2015
Lt Gen (R) Khalid Nawaz Khan, HI(M)
Maj Gen (R) Muhammad Farooq Iqbal , HI(M)
Dr. Nadeem Inayat

2014
Lt Gen (R) Muhammad Mustafa Khan, HI(M)
Mr. Qaiser Javed
Dr. Nadeem Inayat

49 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

Note
25

2015
Rupees'000

2014
Rupees'000

OTHER OPERATING EXPENSES

Auditors' remuneration:

Annual audit
1,150 1,000

Half yearly review
160 140

Out of pocket expenses
29
25

Other certifications
61
60

1,400
1,225

Workers' (Profit) Participation Fund
8.1 304,920
242,089

Workers' Welfare Fund
113,598 90,190

419,918 333,504
26 FINANCE COST


Interest and other charges on long and short

term borrowings
550,967
827,495

Proceeds on realisation of derivative/ changes in

fair value of derivative
-
(135,798)

Swap fee
-
307,368

Interest on Workers' Profit Participation Fund
643
352

Exchange loss on revaluation of loan

139,696
27,208

Bank charges and commission
14,721
15,519

706,027
1,042,144
27 OTHER INCOME


Income from financial assets

Profit on deposit accounts
154,982 130,704

Interest on long term advance
37 51

Gain on re-measurement of investments classified

as fair value through profit or loss-held for trading
16,087

171,106 130,755

Income from assets other than financial assets

Gain on disposal of property, plant and equipment
3,957 8,358

Others
16,323
12,968

191,386
152,081

< 50

2014
2015
Rupees'000 Rupees'000
28 TAXATION


Current

For the year
933,765
175,323

Prior
(76)

933,689
175,323

Deferred
630,037
1,708,188
1,563,726 1,883,511


Accounting profit for the year (Rupees '000)
5,679,891 4,509,505

Applicable tax rate
33%
34%

Income tax at applicable rate (Rupees '000)
1,874,364
1,533,232

Tax effect of change in proportion of export sales to

local sales (Rupees '000)
441,135 317,750

Minimum tax (Rupees '000)
-
147,892

Tax effect of change in tax rate (Rupees '000)
(529,290)

Tax effect of income taxable under final tax

regime (Rupees '000)
(222,831)
(210,640)

Tax effect on permanent differences (Rupees '000)
349
95,277
1,563,726
1,883,511
28.1 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. The appeals filed by the Company have been decided by the
Appellate authorities for the most part in the Companys favour up to and including Assessment
Years 2001-2002. For Assessment Year 2002-2003 appeal filed by the Company was rejected by the
Commissioner Inland Revenue (Appeals) accordingly additions amounting to Rs. 19.27 million were
upheld. Companys appeal against the appellate order of the Commissioner Inland Revenue (Appeals)
is pending before the Appellate Tribunal.


For the Tax Year 2005, expenses amounting to Rs. 65.49 million claimed on account of transportation charges
were disallowed by the Assistant Commissioner Inland Revenue for non withholding of income tax from
payments made to the vendors. The Commissioner Inland Revenue (Appeals) upheld the order of the
Assistant Commissioner Inland Revenue.The Company filed appeal before the Appellate Tribunal against the
appellate order of the Commissioner Inland Revenue (Appeals).While disposing off the appeal, the Appellate
Tribunal has decided the case in Company's favour, thereby demand created by Assistant Commissioner
Inland Revenue has become null and void.The Department has filed a refernce to the Islamabad High Court
against the order of Appellate Tribunal.

51 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

Further, the assessment for the Tax Year 2010 has been rectified by the Commissioner Inland Revenue
under Section 221 of the Income Tax Ordinance 2001. For the Tax Year 2011, the Deputy Commissioner
Inland Revenue [DCIR] charged income tax and default surcharge amounting to Rs. 2.49 million on
alleged non withholding of income tax on various payments made by the Company. The Commissioner
Inland Revenue (Appeals) upheld the order of the DCIR and Companys appeal is now pending disposal
with the Appellate Tribunal.
For the Tax Year 2011 and 2012 DCIR computed alleged sales on the basis of formula issued by PCSIR
and levied additional tax amounting to Rs. 14.96 million and Rs. 62.64 million respectively.The Company
filed an appeal before Commissioner Inland Revenue (Appeals) who remanded back the case to DCIR
to pass a speaking order after going through the facts of the case. The Company has filed appeals with
the Appellate Tribunal where the proceedings are underway for both tax years.
The Company has filed appeal before Commissioner Inland Revenue (Appeals) against the order in
original of DCIR for the recovery of Sales Tax, Federal Excise Duty and Special Excise Duty amounting
to Rs 312 million for the period from 01 July 2010 to 30 June 2012. Commissioner Inland Revenue
(Appeals) remanded the case back to DCIR to pass a speaking order after going through the facts of
the case. While giving appeal effect to the order of Commissioner Inland Revenue (Appeals), the DCIR
changed the basis on which earlier assessment was made and increased the demand to Rs. 340 million.
The Company filed the appeal before Commissioner Inland Revenue (Appeals) against the order of
DCIR. On disposing off the Company's appeal, the Commissioner Inland Revenue (Appeals) held that
the basis adopted by DCIR is no more in field as the matter has already been decided by the superior
appellate authorities and therefore attained finality. Accordingly, the issue is decided in favour of the
Company and demand ceases to exist. However, the Departement has filed an appeal to Appellate
Tribunal against the decision of Commissioner Inland Revenue (Appeals) and the case is not yet fixed
for hearing.
Tax returns filed by the Company for Tax Years 2009, 2013 and 2014 stand assessed in terms of Section
120 of the Ordinance. However, tax authorities are empowered to amend the assessment at any time
within 5 years from the end of the financial year in which the return was filed.
No provision has been made in these financial statements other than those mentioned above in respect
of outstanding issues as management is confident of a favourable outcome.

28.2 Change in applicable income tax rate from 34% to 33% is due to change in relevant Income Tax laws.

< 52

2015
29

29.1











29.2

2014

EARNINGS PER SHARE

Basic
Profit after taxation (Rupees '000)

4,116,165

2,625,994

Less: Dividend on preference shares (Rupees '000)

(240,785)

(227,408)

Profit attributable to ordinary shareholders (Rupees '000)

3,875,380

2,398,586

Weighted average number of ordinary shares outstanding

during the year (Numbers '000)

1,331,116

1,331,115

2.91

1.80

Earnings per share (EPS) - basic (Rupees)

Diluted
Profit attributable to ordinary shareholders (Rupees '000)

3,875,380

2,398,586

Weighted average number of ordinary shares outstanding

during the year (Numbers '000)

1,331,116

1,331,115

Earnings per share - diluted (Rupees)

2.91

1.80

Effect of convertible preference shares is not included in diluted EPS calculation since the effect is
anti-dilutive.
2015
Rupees'000

2014
Rupees'000

Cash and bank balances
2,296,603

Short term running finances
(5,758)

2,290,845

842,983
(42,232)
800,751

30

31

CASH AND CASH EQUIVALENTS

REMUNERATION OF MANAGING DIRECTOR, DIRECTORS AND EXECUTIVES

The aggregate amounts charged in the year for remuneration, including benefits and perquisites,
are as follows:

53 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

Managing Director
2014
2015
Rupees'000 Rupees'000

Executives
2014
2015
Rupees'000 Rupees'000

Managerial remuneration
18,150 19,455 330,413
281,334
Provident fund 510
602
12,102
10,956
Compensated absences
755
722
7,113
6,778
Utilities and upkeep
944 830
31,880
29,516

20,359
21,609
381,508
328,584

No of persons
1 1
126 130
31.1 In addition, the above were provided with free medical facilities in panel hospitals only. The Managing
Director and certain executives were also provided Company's maintained cars and household
equipment in accordance with the Company's policy.
31.2 Meeting fee of non-executive directors charged during the year was Rs. 2.8 million (2014: Rs. 3.1
million), number of non-executive directors 8 (2014: 8).
31.3 Remuneration of Managing Director for last year includes remuneration of both existing Managing
Director and previous Managing Director, who retired in February 2014.
32

Financial instruments
The Company has exposure to the following risks arising from financial instruments:

Credit risk
Liquidity risk
Market risk

The Board of Directors has overall responsibility for the establishment and oversight of the Companys
risk management framework.The Board is also responsible for developing and monitoring the Companys
risk management policies.

The Companys risk management policies are established to identify and analyse the risks faced by the
Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and
the Companys activities.The Company, through its training and management standards and procedures,
aims to develop a disciplined and constructive control environment in which all employees understand
their roles and obligations.
The Audit Committee of the Company oversees how management monitors compliance with the
Companys risk management policies and procedures, and reviews the adequacy of the risk management

< 54

framework in relation to the risks faced by the Company.The Audit Committee is assisted in its oversight
role by Internal Audit. Internal Audit undertakes both regular and adhoc reviews of risk management
controls and procedures, the results of which are reported to the Audit Committee.
32.1 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, and arises principally from trade debts, advances and
deposits, interest accrued, other receivables, margin on letter of guarantee, other financial assets and
bank balances. The carrying amount of financial assets represents the maximum credit exposure. The
maximum exposure to credit risk at the reporting date was:

Note

2014
2015
Rupees'000 Rupees'000

Long term advance
1,800

Long term deposit
12
86,601

Trade debts - net of provision
15
566,141
Deposits
17 7,005

Interest accrued
3,902

Other receivables
18
6,039

Other financial assets
19
300,211

Bank balances
20
2,296,429
3,268,128

2,700
86,601
580,214
7,940
173
20,585
842,954
1,541,167

Geographically there is no concentration of credit risk.

The maximum exposure to credit risk for trade debts at the reporting date are with end - user
customers and represents debtors within the country .

The Company's most significant customer is an end user (Mega construction project) from whom Rs.
125 million (2014: Rs. 132 million) was outstanding and which is included in total carrying amount of
trade debtors as at 30 June 2015.

Certain trade debts are secured against letter of guarantee and security deposits. The Company has
placed funds in financial institutions with high credit ratings. The Company assesses the credit quality of
the counter parties as satisfactory. The Company does not hold any collateral as security against any of
its financial assets other than trade debts.

The Company limits its exposure to credit risk by investing only in liquid securities and placing funds
with banks that have high credit rating. Management actively monitors credit rating and given that the

55 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

Company only has placed funds in the banks with high credit ratings, management does not expect any
counter party to fail to meet its obligations.

Impairment losses
The aging of trade debts at the reporting date was:

2015
Gross

2015
Impairment

Rupees'000
Past due 1-30 days
Past due 31-60 days
Past due 61-90 days
Over 90 days

407,819
95,450
21,446
44,707
569,422

-
-
-
3,281
3,281

2014
Gross

2014
Impairment

Rupees'000
384,483
129,182
44,861
24,969
583,495

3,281
3,281

The movement in allowance for impairment in respect of trade debts during the year was as follows:
2014
2015
Rupees'000
Balance at 1 July

Impairment loss adjustment

Balance at 30 June

3,281
-
3,281

3,281
3,281

Based on past experience, the management believes that no further impairment allowance is
necessary in respect of carrying amount of trade debts.
The allowance account in respect of trade debts is used to record impairment losses unless the
Company is satisfied that no recovery of the amount owing is possible; at that point the amount
considered irrecoverable is written off against the financial asset directly.

32.2 Liquidity risk


Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they
fall due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
The Company uses different methods which assists it in monitoring cash flow requirements and
optimising its cash return on investments. Typically the Company ensures that it has sufficient cash
on demand to meet expected operational expenses for a reasonable period, including the servicing

< 56

of financial obligations; this excludes the potential impact of extreme circumstances that cannot
reasonably be predicted, such as natural disasters. In addition the Company maintains lines of credit
as mentioned in note 9 to the financial statements.

The following are the contractual maturities of financial liabilities, including expected interest payments
and excluding the impact of netting agreements:

Carrying Contractual Six months

amount cash flows
or less
2015

Six to
twelve
months

One to two Two to five

years
years

Five years
onwards

(2,697,211) (1,393,863)

(333,172)

Rupees '000

Long term loans and

mark-up accrued

6,668,976 (7,236,236)

(1,455,157) (1,356,833)

Trade and other payables

1,602,179 (1,602,179)

(1,602,179)

(5,892)

Short term borrowings and

markup accrued

5,892

(5,892)

8,277,047 (8,844,307)

(3,063,228) (1,356,833)

(2,697,211) (1,393,863)

(333,172)

mark-up accrued

8,077,490 (8,644,489)

(1,465,691) (1,431,003)

(2,690,504) (2,950,148)

(107,143)

Trade and other payables

1,309,274 (1,309,274)

(1,309,274)

(42,366)

2014
Long term loans and

Short term borrowings and

markup accrued

42,366

(42,366)

9,429,130 (9,996,129)

(2,817,331) (1,431,003)

(2,690,504) (2,950,148)

(107,143)

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier
or at significantly different amounts.

32.2.1 The contractual cash flow relating to long and short term borrowings have been determined on the
basis of expected mark up rates. The mark-up rates have been disclosed in note 6 and 9 to these
financial statements.

32.3 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, change in market sentiments, speculative activities, supply and demand of securities and
liquidity in the market. The Company is exposed to currency risk and interest rates only.

57 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

32.3.1 Currency risk

Exposure to Currency Risk


The Company is exposed to currency risk in respect of long term loan, creditos and retention money
which is denominated in currency other than the functional currency of the Company. The Company's
exposure to foreign currency risk is as follows:

2015
Rupees
US Dollar
'000
'000
Long term loan
2,979,689
29,256
Trade and other payables
207,672
2,039

The following significant exchange rate applied during the year:

US Dollars

Average rates
2015
2014
100.30

99.05

Rupees
'000

2014

4,333,495
98,500

US Dollar
'000
43,883
1,000

Balance sheet date rate

2015
2014
101.85

98.75

Sensitivity
An increase of 3% in exchange rate at the reporting date would have decreased profit or loss by
the amounts shown below.

2014
2015
Profit or loss
Profit or loss
Gross
Net of tax
Gross
Net of tax
exposure
exposure
exposure
exposure
Rupees '000

Long term loan and trade

and other payables

95,622

64,067

130,003

85,802

A 3% decrease in exchange rate would have had an equal but opposite effect to the amount shown
above.

32.3.2 Interest rate risk

The interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. Majority of interest rate exposure arises from
short and long term borrowings from banks and deposits with banks. At the balance sheet date, the
interest rate profile of the Company's interest bearing financial instruments is:

< 58

Carrying Amount
2014
2015
Rupees'000
Rupees'000

Fixed rate instruments

Financial assets

2,186,412

760,866

Variable rate instruments

Financial liabilities

6,541,270

7,978,767

Fair value sensitivity analysis for fixed rate instruments

The Company is not exposed to interest rate risk on its fixed rate instruments
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased
(decreased) profit or loss by the amounts shown below.This analysis assumes that all other
variables, in particular foreign currency rates, remain constant. The analysis is performed on
the same basis for 2014.
100 basis
points
Rupees '000

Cash flow sensitivity (net)

Variable rate instruments
30 June 2015

100 basis
points
Rupees '000

(19,001)
(19,001)

Variable rate instruments
30 June 2014

19,001
19,001

Rupees '000
(20,481)
(20,481)

20,481
20,481

Market price risk

For investments at fair value through profit or loss-held for trading a 3% increase/decrease
in market price at reporting rate would have increased/decreased profit for the year by Rs 9
million (2014: Nil).

32.4 Fair value of financial assets and liabilities


The fair values of financial assets and liabilities, together with the carrying amounts shown in the
balance sheet, are as follows:

59 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

2015
Note

Carrying
amount

Assets carried at amortized cost

Long term advance

1,800
Long term deposit
12
86,601
Trade debts - net of provision
15
566,141
Deposits
17 7,005
Interest accrued

3,902
Other receivables
18
6,039
Cash and bank balances
20
2,296,603
2,968,091
Assets carried at fair value

2014
Fair
Carrying
value
amount
Rupees '000
1,800
86,601
566,141
7,005
3,902
6,039
2,296,603
2,968,091

2,700
86,601
580,214
7,940
173
20,585
842,983
1,541,196

Other financial assets

300,211
300,211
-

Liabilities carried at amortized cost
Long term financing - secured
6
6,535,512
6,535,512
7,936,535
Creditors
8
157,147
157,147
170,463
Accrued liabilities
8
875,441
875,441
667,952
Retention money
8
123,121
123,121
27,948
Security deposits
8
90,940
90,940
83,497
Other liabilities
8
95,170
95,170
122,224
Dividend payable
8
260,360
260,360
237,190
Markup accrued
144,013
144,013
163,457
Short term borrowings - secured
9
5,758
5,758
42,232

8,287,462
8,287,462
9,451,498

Fair
value

2,700
86,601
580,214
7,940
173
20,585
842,983
1,541,196
7,936,535
170,463
667,952
27,948
83,497
122,224
237,190
163,457
42,232
9,451,498

Fair value hierarchy

The table below analyses financial instruments carried at fair value, 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, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).

< 60

Level 1

Level 2

Level 3

Rupees '000
2015
Other financial assets

2014
Other financial assets

300,211
-

32.5 Determination of fair values

A number of the Company's accounting policies and disclosures require the determination of fair
value, for both financial and non-financial assets and liabilities. Fair values have been determined for
measurement and/ or disclosure purposes based on the following methods.

Non - derivative financial assets.

The fair value of non - derivative financial assets is estimated as the present value of future cash flows, discounted
at the market rate of interest at the reporting date.The fair value is determined for disclosure purposes.
Investments at fair value through profit or loss-held for trading
The fair value of investments held for trading is determined by reference to their quoted closing
repurchase price at the reporting date.
Non - derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of interest at the reporting date.

32.6 Capital management

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business.The Board of Directors monitors the return on capital, which the
Company defines as net profit after taxation divided by total shareholders' equity and monitors that the Company
has appropriate mix of capital and debt. The Board of Directors also monitors the level of dividend to ordinary
shareholders.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.

33
RELATED PARTY TRANSACTIONS

Fauji Foundation holds 37.18 % ordinary shares and 100% preference shares of the Company at the yearend. Therefore all subsidiaries and associated undertakings of Fauji Foundation are related parties of the
Company. Other related parties comprise of directors, key management personnel, entities over which the
directors are able to exercise influence and employees' funds. Balances with related parties are disclosed
elsewhere in the financial statements.Transactions with related parties are as follows:

61 >

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2015

2015
Rupees'000

34

2014
Rupees'000

Transactions with associated undertakings/companies

due to common directorship

- Sale of cement

8,431
6,297

- Payment for use of medical facilities
404
198

- Payment on account of clearance of shipments 178
246

- Preference dividend paid
227,408
210,687

- Dividend paid on ordinary shares

1,095,852
1,252,402

- Payment of rent and utilities

13,403
7,334
Employees Funds

- Payments made into the fund
36,321
34,165

Others

- Remuneration to key management personnel

(other than Managing Director)
52,504
41,017

2014
2015
PLANT CAPACITY AND ACTUAL PRODUCTION
Metric Tons
Metric Tons


Current installed capacity
3,433,500 3,433,500

Actual production
2,565,547
2,490,851


Difference is due to supply demand situation of the market.

35

EMPLOYEES PROVIDENT FUND TRUST

2015

2014

Size of the Fund (Rupees'000)

394,793

320,928

Cost of investments made (Rupees'000)

348,328

286,923

Percentage of investments made (%)

88.23

89.40

Fair value of investments (Rupees'000)

369,988

299,980

2015
Rupees '000
% of full
Defense Saving Certificates
17,893
Term deposits in different banks 183,000
Term finance certificates
25,935
Mutual funds
121,500
348,328

< 62

5
53
7
35
100

2014
Rupees '000
17,893
231,579
35,951
1,500
286,923

% of full
6
80
13
1
100

All the investments out of provident fund trust have been made in accordance with the provisions of Section
227 of the Companies Ordinance, 1984 and the rules formulated for this purpose.

36 GENERAL

36.1 Facilities of letters of guarantee and letters of credit


Facilities of letters of guarantee and letters of credit amounting to Rs. 315 million and Rs. 3,250 million (2014:
Rs. 315 million and Rs. 3,650 million) respectively are available to the Company. Letters 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.

36.2




36.3

36.4

2015
Rupees'000

2014
Rupees'000

1,241
1,194

1,146
1,104

Number of persons employed

Employees on year end (Number)
Average employees during the year (Number)

Figures have been rounded off to the nearest thousand of Rupee unless otherwise stated.
These financial statements were authorised for issue by the Board of Directors of the Company in
their meeting held on 01st September 2015.

CHIEF EXECUTIVE

DIRECTOR

63 >

Pattern of Shareholding
4. No. of Shareholders
303
1448
1734
3146
1192
418
350
236
161
84
100
40
150
44
45
29
36
31
19
28
23
9
111
9
11
11
9
13
7
6
9
6
20
4
4
3
2
5
7
2
2
29
8
7
3
4
3
6
2
3
2
12
3
3
3
4

< 64

From
1
101
501
1,001
5,001
10,001
15,001
20,001
25,001
30,001
35,001
40,001
45,001
50,001
55,001
60,001
65,001
70,001
75,001
80,001
85,001
90,001
95,001
100,001
105,001
110,001
115,001
120,001
125,001
130,001
135,001
140,001
145,001
150,001
155,001
160,001
165,001
170,001
175,001
180,001
190,001
195,001
200,001
205,001
210,001
215,001
220,001
225,001
230,001
235,001
240,001
245,001
250,001
260,001
265,001
270,001

Annex-A

To

Total Shares Held

100
500
1,000
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
105,000
110,000
115,000
120,000
125,000
130,000
135,000
140,000
145,000
150,000
155,000
160,000
165,000
170,000
175,000
180,000
185,000
195,000
200,000
205,000
210,000
215,000
220,000
225,000
230,000
235,000
240,000
245,000
250,000
255,000
265,000
270,000
275,000

10,301
689,680
1,711,285
9,664,574
10,050,866
5,513,994
6,584,468
5,655,459
4,625,344
2,803,184
3,891,375
1,729,980
7,464,221
2,326,050
2,653,209
1,829,333
2,486,550
2,315,500
1,506,500
2,345,545
2,028,270
836,000
11,089,000
928,403
1,194,750
1,250,025
1,074,000
1,618,800
896,530
803,500
1,241,249
857,000
2,998,367
619,000
630,667
490,990
333,630
875,000
1,247,500
370,000
383,999
5,797,500
1,619,585
1,457,000
645,000
874,100
669,700
1,376,000
466,500
720,000
488,000
2,996,000
757,242
795,000
802,000
1,096,000

4. No. of Shareholders
3
3
1
1
14
3
2
1
2
2
2
1
2
2
6
1
1
2
2
1
1
12
2
2
1
2
1
1
4
1
1
1
1
15
3
2
2
2
1
2
1
5
1
1
2
1
1
1
1
1
1
1
2
1
2
1

From
275,001
280,001
285,001
290,001
295,001
300,001
305,001
310,001
315,001
320,001
325,001
330,001
335,001
340,001
345,001
350,001
355,001
365,001
370,001
375,001
385,001
395,001
400,001
405,001
410,001
415,001
425,001
435,001
445,001
450,001
460,001
465,001
475,001
495,001
500,001
505,001
515,001
520,001
530,001
535,001
540,001
545,001
585,001
590,001
595,001
600,001
605,001
610,001
615,001
625,001
630,001
635,001
645,001
650,001
660,001
670,001

To

Total Shares Held

280,000
285,000
290,000
295,000
300,000
305,000
310,000
315,000
320,000
325,000
330,000
335,000
340,000
345,000
350,000
355,000
360,000
370,000
375,000
380,000
390,000
400,000
405,000
410,000
415,000
420,000
430,000
440,000
450,000
455,000
465,000
470,000
480,000
500,000
505,000
510,000
520,000
525,000
535,000
540,000
545,000
550,000
590,000
595,000
600,000
605,000
610,000
615,000
620,000
630,000
635,000
640,000
650,000
655,000
665,000
675,000

829,500
851,500
290,000
295,000
4,200,000
912,000
612,209
312,600
636,200
647,500
652,500
334,000
680,000
688,500
2,099,500
352,000
358,500
736,500
750,000
380,000
387,935
4,797,500
804,600
813,500
415,000
834,440
428,000
436,000
1,796,350
454,500
461,500
467,226
480,000
7,499,500
1,507,000
1,016,000
1,040,000
1,050,000
533,000
1,080,000
543,500
2,749,964
588,500
590,500
1,200,000
600,100
607,500
613,000
620,000
626,500
634,000
636,500
1,300,000
650,500
1,325,100
675,000

65 >

4. No. of Shareholders
1
7
2
1
1
1
1
1
1
1
1
1
1
1
1
1
2
1
2
9
2
1
1
1
1
1
1
1
3
2
1
1
2
2
1
6
1
1
1
1
1
1
1
1
1
1
1
6
1
1
1
1
1
1
1
1

< 66

From
690,001
695,001
720,001
745,001
750,001
785,001
795,001
805,001
810,001
845,001
855,001
865,001
870,001
875,001
890,001
895,001
905,001
970,001
975,001
995,001
1,015,001
1,025,001
1,045,001
1,065,001
1,070,001
1,100,001
1,110,001
1,120,001
1,145,001
1,195,001
1,210,001
1,235,001
1,245,001
1,395,001
1,455,001
1,495,001
1,520,001
1,570,001
1,575,001
1,600,001
1,645,001
1,735,001
1,740,001
1,745,001
1,780,001
1,795,001
1,835,001
1,995,001
2,095,001
2,275,001
2,310,001
2,385,001
2,390,001
2,460,001
2,510,001
2,635,001

To

Total Shares Held

695,000
700,000
725,000
750,000
755,000
790,000
800,000
810,000
815,000
850,000
860,000
870,000
875,000
880,000
895,000
900,000
910,000
975,000
980,000
1,000,000
1,020,000
1,030,000
1,050,000
1,070,000
1,075,000
1,105,000
1,115,000
1,125,000
1,150,000
1,200,000
1,215,000
1,240,000
1,250,000
1,400,000
1,460,000
1,500,000
1,525,000
1,575,000
1,580,000
1,605,000
1,650,000
1,740,000
1,745,000
1,750,000
1,785,000
1,800,000
1,840,000
2,000,000
2,100,000
2,280,000
2,315,000
2,390,000
2,395,000
2,465,000
2,515,000
2,640,000

695,000
4,900,000
1,446,183
750,000
755,000
790,000
800,000
810,000
815,000
850,000
860,000
870,000
875,000
878,000
893,000
900,000
1,814,500
975,000
1,954,550
9,000,000
2,038,800
1,025,450
1,050,000
1,069,694
1,074,000
1,100,250
1,115,000
1,125,000
3,445,000
2,398,000
1,211,300
1,235,500
2,499,000
2,800,000
1,456,000
8,996,000
1,521,500
1,572,365
1,580,000
1,603,500
1,650,000
1,739,500
1,744,833
1,750,000
1,784,000
1,796,400
1,837,000
12,000,000
2,100,000
2,277,080
2,312,500
2,388,000
2,392,502
2,461,734
2,514,000
2,638,000

4. No. of Shareholders
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
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
1
1
1
10,230

From
2,770,001
2,855,001
2,905,001
3,030,001
3,175,001
3,180,001
3,185,001
3,245,001
3,455,001
3,495,001
3,515,001
3,785,001
3,845,001
4,070,001
4,245,001
4,370,001
4,780,001
4,950,001
4,965,001
5,200,001
5,340,001
5,470,001
5,855,001
5,860,001
5,980,001
5,995,001
6,965,001
7,400,001
8,145,001
8,765,001
9,785,001
10,455,001
10,795,001
10,980,001
13,250,001
14,295,001
15,485,001
17,065,001
17,435,001
18,195,001
18,745,001
21,305,001
21,440,001
23,030,001
25,720,001
34,740,001
48,695,001
93,745,001
494,950,001

To

Total Shares Held

2,775,000
2,860,000
2,910,000
3,035,000
3,180,000
3,185,000
3,190,000
3,250,000
3,460,000
3,500,000
3,520,000
3,790,000
3,850,000
4,075,000
4,250,000
4,375,000
4,785,000
4,955,000
4,970,000
5,205,000
5,345,000
5,475,000
5,860,000
5,865,000
5,985,000
6,000,000
6,970,000
7,405,000
8,150,000
8,770,000
9,790,000
10,460,000
10,800,000
10,985,000
13,255,000
14,300,000
15,490,000
17,070,000
17,440,000
18,200,000
18,750,000
21,310,000
21,445,000
23,035,000
25,725,000
34,745,000
48,700,000
93,750,000
494,955,000

2,771,867
2,857,000
2,909,000
3,033,000
3,180,000
3,184,000
3,186,000
3,246,000
3,459,500
3,500,000
3,519,500
3,790,000
3,847,000
4,075,000
4,247,500
4,373,000
4,781,400
4,952,767
4,969,750
5,204,000
5,344,000
5,473,000
5,860,000
5,863,750
5,983,000
6,000,000
6,969,100
7,401,100
8,150,000
8,769,500
9,790,000
10,456,500
10,800,000
10,982,060
13,252,500
14,300,000
15,487,899
17,066,500
17,440,000
18,197,500
37,500,000
21,309,000
21,441,000
23,032,000
25,722,000
34,740,500
48,699,187
93,750,000
494,951,055
1,379,815,025

67 >

5. Categories of shareholders

Share held

Percentage

539,857

0.0391%

674,900,242

48.9124%

0.0000%

5.4 Banks Development

Financial Institutions, Non
Banking Financial Institutions.

13,760,800

0.9973%

5.5 Insurance Companies

45,103,672

3.2688%

5.6 Modarabas and Mutual

Funds

93,960,929

6.8097%

5.7 Share holders holding 10%

or more

543,650,242

39.4002%

5.8 General Public

354,172,684

25.6681%

2,357,000
68,713,644
6,095,500
95,399,710
24,810,987

0.1708%
4.9799%
0.4418%
6.9139%
1.7981%

5.1 Directors, Chief Executive Officers,

and their spouse and minor childern
5.2 Associated Companies,
undertakings and related
parties. (Parent Company)
5.3 NIT and ICP

5.9 Others (to be specified)

1- Investment Companies
2- Joint Stock Companies
3- Pension Funds
3- Foreign Companies
4- Others

< 68

Categories of Shareholding required under Code of Corporate Governance (CCG)

As on June 30, 2015
Sr.
No.

Name

No. of
Shares Held

Percentage

Associated Companies, Undertakings and Related Parties (Name Wise Detail):

1
2
3
4
5

COMMITTEE OF ADMIN. FAUJI FOUNDATION (CDC)

FAUJI FOUNDATION (Preference Shares)
FAUJI FERTILIZER BIN QASIM LIMITED
FAUJI OIL TERMINAL & DISTRIBUTION
FAUJI FERTILIZER COMPANY LTD (CDC)

494,951,055
48,699,187
18,750,000
18,750,000
93,750,000

35.8708
3.5294
1.3589
1.3589
6.7944

300,000
500
15,000
157,500
5,983,000
1,149,000
8,150,000
634,000
53,500
340,000
893,000
88,000
20,000
175,000
900,000
800,000
461,500
58,500
878,000
119,000
502,500
60,000
124,500
176,500
60,000
1,750,000
200,000
1,069,694
1,796,400
208,500
3,459,500
2,388,000
2,771,867
4,247,500
3,246,000
400,000
400

0.0217
0.0000
0.0011
0.0114
0.4336
0.0833
0.5907
0.0459
0.0039
0.0246
0.0647
0.0064
0.0014
0.0127
0.0652
0.0580
0.0334
0.0042
0.0636
0.0086
0.0364
0.0043
0.0090
0.0128
0.0043
0.1268
0.0145
0.0775
0.1302
0.0151
0.2507
0.1731
0.2009
0.3078
0.2352
0.0290
0.0000

Mutual Funds (Name Wise Detail)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37

BMA FUNDS LIMITED (CDC)

PRUDENTIAL STOCK FUND LTD. (CDC)
PRUDENTIAL STOCKS FUND LTD. (03360) (CDC)
CDC -TRUSTEE AKD INDEXTRAKER FUND (CDC)
CDC -TRUSTEE AL MEEZANMUTUAL FUND (CDC)
CDC -TRUSTEE AL-AMEEN ISLAMIC ASSETALLOCATION FUND (CDC)
CDC -TRUSTEE AL-AMEEN SHARIAH STOCK FUND (CDC)
CDC -TRUSTEE ALFALAH GHP ALPHA FUND (CDC)
CDC -TRUSTEE ALFALAH GHP IINCOME FUND - MT (CDC)
CDC -TRUSTEE ALFALAH GHP ISLAMIC STOCK FUND (CDC)
CDC -TRUSTEE ALFALAH GHP STOCK FUND (CDC)
CDC -TRUSTEE ALFALAH GHPVALUE FUND (CDC)
CDC -TRUSTEE APF-EQUITY SUB FUND (CDC)
CDC -TRUSTEE APIF - EQUITY SUB FUND (CDC)
CDC -TRUSTEE ATLAS ISLAMIC STOCK FUND (CDC)
CDC -TRUSTEE ATLAS STOCK MARKET FUND (CDC)
CDC -TRUSTEE FAYSAL ASSET ALLOCATION FUND - MT (CDC)
CDC -TRUSTEE FAYSAL INCOME & GROWTH FUND - MT (CDC)
CDC -TRUSTEE FAYSAL SAVING GROWTH FUND - MT (CDC)
CDC -TRUSTEE FRIST CAPITAL MUTUAL FUND (CDC)
CDC -TRUSTEE FIRST HABIB INCOME FUND - MT (CDC)
CDC -TRUSTEE FIRST HABIB STOCK FUND (CDC)
CDC -TRUSTEE HBL IPF EQUITY SUB FUND(CDC)
CDC -TRUSTEE HBL PF EQUITY SUB FUND(CDC)
CDC -TRUSTEE JS ISLAMIC PENSION SAVINGS FUND-EQUITY ACCOUNT (CDC)
CDC -TRUSTEE JS LARGE CAP.FUND (CDC)
CDC -TRUSTEE JS PENSION SAVINGS FUND - EQUITY ACCOUNT (CDC)
CDC -TRUSTEE KSE MEEZAN INDEX FUND (CDC)
CDC -TRUSTEE LAKSON EQUITY FUND (CDC)
CDC -TRUSTEE MCB PAKISTAN ASSET ALLOCATION FUND (CDC)
CDC -TRUSTEE MCB PAKISTAN STOCK MARKET FUND (CDC)
CDC -TRUSTEE MEEZAN BANALCED FUND (CDC)
CDC -TRUSTEE NATIONAL INVESTMENT (UNIT)TRUST (CDC)
CDC -TRUSTEE NIT ISLAMIC EQUITY FUND (CDC)
CDC -TRUSTEE NIT-EQUITY MARKET OPPRTUNITY FUND (CDC)
CDC -TRUSTEE PAKISTAN SARMAYA MEHFOOZ FUND (CDC)
CDC -TRUSTEE PAKISTAN STRATEGIC ALLOCATION FUND (CDC)

69 >

Sr.
No.

Name

No. of
Shares Held

Percentage

Associated Companies, Undertakings and Related Parties (Name Wise Detail):

38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55

340,000
506,000
284,500
860,000
1,020,000
3,186,000
34,740,500
1,400,000
909,000
1,000,000
3,500,000
28,068
500,000
1,249,000
100,000
100,000
50,000
50,000

0.0246
0.0367
0.0206
0.0623
0.0739
0.2309
2.5178
0.1015
0.0659
0.0725
0.2537
0.0020
0.0362
0.0905
0.0072
0.0072
0.0036
0.0036

1
1
1
1
1
1
1
446,350
93,500

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0323
0.0068

Executives:

Public Sector Companies & Corporations:

65,460,972

4.7442%

CDC -TRUSTEE PIML ISLAMIC EQUITY FUND (CDC)

CDC -TRUSTEE PIML STRATEGIC MULTI ASSET FUND (CDC)
CDC -TRUSTEE PIMLVALUE EQUITY FUND (CDC)
CDC -TRUSTEE UBL ASSET ALLOCATION FUND (CDC)
CDC -TRUSTEE UBL RETIREMENT SAVING FUND - EQUITY SUB FUND (CDC)
CDC -TRUSTEE UBL STOCK ADVANTAGE FUND (CDC)
CDC -TRUSTEE MEEZAN ISLAMIC FUND (CDC)
CDC -TRUSTEE UNITTRUST OF PAKISTAN (CDC)
CDC-TRUSTEE AL-AMEEN ISLAMIC RET. SAV. FUND-EQUITY SUB FUND(CDC)
CDC -TRUSTEE PAK INT. ELEMENT ISLAMIC ASSET ALLOCATION FUND (CDC)
MC FSL -TRUSTEE JS GROWTH FUND (CDC)
MC FSL -TRUSTEE JS KSE-30 INDEX FUND (CDC)
MCBFSL -TRUSTEE JSVALUE FUND (CDC)
MCBFSL -TRUSTEE NAMCO BALANCED FUND (CDC)
MCBFSL -TRUSTEE PAK OMAN ADVANTAGE ASSET ALLOCATION FUND (CDC)
MCBFSL -TRUSTEE PAK OMAN ISLAMIC ASSET ALLOCATION FUND (CDC)
TRUSTEE PAK QATAR FAMILYTAKAFUL LIMITED AGGRERESSIVE FUND (CDC)
TRUSTEE PAK QATAR FAMILYTAKAFUL LIMITED BALANCED FUND (CDC)

Directors and their Spouse and Minor Children (Name Wise Detail):
1
2
3
4
5
6
7
8
9

DR. NADEEM INAYAT

MR. QAISER JAVED
BRIG DR. GULFAM ALAM (RETD)
BRIG MUHAMMAD SAEED KHAN (RETD)
LT GEN SARDAR MAHMOOD ALI KHAN HI(M) (RETD)
MAJ GEN MUHAMMAD FAROOQ IQBAL (RETD)
LT GEN KHALID NAWAZ KHAN (RETD)
MR. PERVEZ INAM (CDC)
MRS.YASMEEN PERVEZ W/O MR. PERVEZ INAM (CDC)

Banks, Development Finance Institutions, Non Banking Finance

Companies, Insurance Companies, Takaful, Modarabas and Pension Funds:

Shareholders holding five percent or more voting intrest in the listed company (Name Wise Detail)
1
2

FAUJI FOUNDATION (ORDINARY + PREFERENCE SHARES)

FAUJI FERTILIZER COMPANY LTD (CDC)

543,650,242
93,750,000

39.4002
6.7944

All trades in the shares of the listed company, carried out by its Directors, Executives and their
spouses and minor children shall also be disclosed:
S.No NAME
1
LT GEN KHALID NAWAZ KHAN (RETD)

< 70

SALE
0

PURCHASE
1

NOTICE OF 23rd ANNUAL GENERAL MEETING

Notice is hereby given that the 23rd Annual General Meeting of the Company will be held at 1000 hours 29th
September 2015 (Tuesday) at Hotel Pearl Continental The Mall, Rawalpindi, to transact the following business:To confirm the Minutes of 22nd Annual General Meeting held on 23rd September 2014.
To receive, consider and adopt the Audited Accounts of the Company together with the Directors and the
Auditors Reports for the Year ended 30th June 2015.
3.
To appoint Statutory Auditors of the Company and fix their remuneration.
4.
To approve payment of Final cash Dividend of Rs. 1.50 per share for the year ended 30th Jun 2015 as
recommended by the Board of Directors to those who are share holders as at close of business on 25th
September 2015.
5.
Any other business with the permission by the Chairman.

By order of the Board
1.
2.

Place: Rawalpindi
Date: 01st September 2015

Brig Ch Zafar Iqbal (Retd)

Company Secretary

NOTES
1.

The Share Transfer Books of the Company will remain closed from 23rd September 2015 to 29th September
2015 (both days inclusive). Transfers received at the Share Registrar office M/s Corplink (Pvt) Ltd, Wings
Arcade, 1 K Commercial, Model Town Lahore, at close of business on 22nd September 2015 will be treated
in time for the entitlement of cash dividend and to attend the Annual General Meeting.
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. Proxies, in order to be effective, must be received at the Registered Office
located at Fauji Towers, Block III, 68 Tipu Road, Chaklala, Rawalpindi, Pakistan duly stamped and signed, not
less than 48 hours before the Meeting.

A member may not appoint more than one proxy. A copy of shareholder's attested CNIC must be attached
with the proxy form.
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.

In case of individuals, the account holder or sub-account holder shall authenticate his/her identity by showing
his/her original computerized national identity card or original passport at the time of attending the Meeting.

ii.

In case of corporate entity, the Board of Directors resolution/ power of attorney with specimen signatures
of the nominee shall be produced at the Meeting.

71 >

(b)

4.
5.

6.

7.

For Appointing Proxies

i.

In case of individuals, the account holder or sub-account holder shall submit the proxy form as per the
above requirement.

ii.

The proxy form shall be witnessed by two persons whose names, addresses and CNIC numbers
shall be mentioned on the form.

iii.

Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished
with the Proxy Form.

iv.
v.

The Proxy shall produce his/her original CNIC or original passport at the time of Meeting.
In case of corporate entity, the Board of Directors resolution / power of attorney with specimen
signatures shall be submitted along with proxy form to the Company.

Members are requested to promptly notify any change in their address.

As per SECP directives, the future dividend warrants of the share holders whose CNICs are not available
with the Share Registrar could be withheld. All share holders having physical share holding are advised to
submit copies of their valid Computerised National Identity Cards (CNIC) to the Share Registrar at the
above address.
Under the law, Share holders are entitled to receive their cash dividends directly in their bank accounts
instead of receiving the same physically. Share holders having physical holding and desiring to use the option
may submit their request to the Companys Share Registrar. The share holders having CDC account may
approach CDC for the same.
For any other information, please contact Ph: 051-9280075, Fax No: 051 9280416.

E-mail: [email protected]
Web Site: www.fccl.com.pk

< 72

Form of Proxy 23rd Annual General Meeting

I/We___________________________________________________________________________
of_____________________________________________________________________________
being Member (s) of Fauji Cement Company Limited hold ___________________________________
Ordinary Shares hereby appoint Mr./Mrs./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 23rd Annual General Meeting of the Company to be held on Tuesday, 29th
September 2015 and at any adjournment thereof.
As witness my/our hand/seal this ________________________ day __________________2015.
Signed by_____________________________________________________________________
Said in the presence of:(1) Name _____________________Address:_________________________________________
_____________________________ N.I.C No:__________________________________
(2) Name ________________Address:_________________ N.I.C. No: _____________________
Folio No

CDC Account #
Participant I.D. Account #

Signature on
Five Rupees
Revenue Stamp

The signature should agree with the

specimen registered with the Company

IMPORTANT:
1.
Company, at Fauji Towers Block III, 68 Tipu Road Chaklala Rawalpindi - Pakistan, not less than 48
hours before the time of holding the meeting.
2.

If a member appoints more than one proxy and more than one instruments of proxy are
deposited by a member with the Company, all such instruments of proxy shall be rendered
invalid.