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By SHABBIR H. KAZMI
Updated Dec 29, 2001

While the expectations were that the KSE-100 index may breach 1500 psychological barrier by the end of year 2001, the major dent has been caused by clouds of war engulfing Pakistan and India. At the closing on December 28, the KSE-100 index closed at 1269 points. Although there seems to be easing of the tension, the international mediators are not only voicing concerns but also lobbying for an early and peaceful resolution. This should boost the morale of investors, but investors are equally concern about the attitude of ruling alliance in India.

DEWAN FAROOQUE MOTORS

The company has announced financial results for the year ending June 30, 2001, the first full year of commercial operations. On a gross sales of Rs 4,024.4 million, operating profit amounted to Rs 97.5 million but year ended with loss after tax amounting to Rs 31 million. However, un-appropriated profit carried forward was Rs 32 million due to profit after tax of Rs 63.6 million during six-months operations last year. The highlight of the performance was the record 7,906 units sales by any assembler in Pakistan, keeping in view that 10,000 units per annum plant-II commenced its operations in January 2001. During the year two new products were added, KIA Spectra and KIA NGV. Actual impact of these products will be observed in year 2001-2002, because these products were introduced at the fag end of the year. The initial years of a new project are critical as to its capacity for absorbing total costs of the operations. From the figures, it is evident the company has absorbed all the operational cost in its first year of full commercial operation.

SHAFFI CHEMICAL INDUSTRIES

The company has posted Rs 30 million loss after tax for the year ending June 30, 2001 as against a profit of Rs 70.5 million for the previous year. However, it must be noted that the management was able to reduce gross loss from Rs 12.8 million for the year 2000 to Rs 3.6 million for the year under review. Last year profit was mainly due to other income amounting to Rs 101.6 million which reduced to Rs 4.2 million for year 2001. Financial expenses hiked from Rs 6.9 million to Rs 22.9 million during this period. It is necessary to read Auditors Report, particularly the note about provisioning. It says, "The company has not provided any provision on account of disputed receivables amounting to Rs 159 million from First Capital ABN Equities Pakistan Limited. Further against the same dispute, First Capital ABN Equities Pakistan Limited has also filed a claim against the company amounting to Rs 9.6 million which has also not been accounted for in the Financial Statements."

AL-KHAIR GADOON

Higher sales and corresponding lower cost of sales helped the company to improve its gross profit, from Rs 221 million for the previous year to Rs 337 million for the year ending June 30, 2001. Loss after tax reduced from Rs 2 million to 0.378 million during this period. This can be attributed to reduction in selling and administrative expenses and financial charges improvement in other income. In the Directors Report, low volume of activities due to withdrawal of exemptions by the government, hike in the cost of basic raw materials, depreciation of rupee and cut throat competition among foam manufacturing companies were said to be the reasons for losses.

PAKISTAN TELEPHONE CABLES

Despite reduction in sales the company posted higher profit after tax for the year ending June 30, 2001 as well as improved dividend payout as compared to previous year. Profit after tax improved from Rs 37 million for the year 2000 to Rs 58.7 million for the year under review. While sales declined by 38 per cent as compared to previous year, gross profit improved from 10.88 per cent to 24.35 per cent during this period. The fall in sales was attributed to lower business but improvement in gross profit was due to a favourable prices received in contracts placed by PTCL.

FIRST GENERAL LEASING MODARABA

As against a paid-up capital of Rs 56.25 million, accumulated losses were Rs 41.8 million as at June 30, 2001. It is evident that for many more years to come certificate holders will not be able to get any return on their investment. While income for the year 2001 increased the advantage was eroded by hike in expenditure. On the expenditure side the most significant increase was in financial charges, administrative and operating expenses. Another factor which added the loss was provision of about Rs 9 million for diminution in the value of investments. According to Notes to the financial statements, long-term investment in listed securities amounting to Rs 12.8 million had a market value of Rs 7.3 million as at June 30, 2001. Yet another important observation was the visible shift from leasing business to short-term Musharika investments yielding Rs 6.7 million return during the year 2001 as compared to a return of Rs 3.3 million for the previous year.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE)

PTCL

15.80

12.80

13.60

105,009,000

Hubco

17.80

14.60

15.70

142,399,000

ICI

41 .80

34.25

35.60

8,959,100

Engro

56.50

49.25

51.70

8,252,100

Fauji Fertilizer

42.00

39.25

41.15

6,464,000

MCB

22.60

18.20

18.75

5,325,000

Adamjee Insurance

37.00

28.25

29.00

5,046,000

World Call

12.20

9.60

10.70

1,050,500

Telecard

9.50

7.40

7.90

195,900

Nishat Mills

18.25

17.75

17.90

111,000