First Quarterly Report July-September 2012

Contents

FCCL
1st Quarterly Report 2012

Company Information Directors' Review Condensed Interim Balance Sheet(Un-Audited) Condensed Interim Profit and Loss Account(Un-Audited) Condensed Interim Statement of Comprehensive Income(Un-Audited) Condensed Interim Cash Flow Statement(Un-Audited) Condensed Interim Statement of Changes in Equity(Un-Audited) Notes to the Condensed Interim Financial Information(Un-Audited)

3 4 6 7 8 9 10

Company Information

FCCL
1st Quarterly Report 2012

Board of Directors

Lt Gen (R) Muhammad Mustafa Khan, HI (M) , (Chairman) Lt Gen (R) Muhammad Sabir,HI (M), (CE/MD) Mr. Qaiser Javed Dr. Nadeem Inayat Brig (R) Agha Ali Hassan, SI(M) Brig (R) Parvez Sarwar Khan, SI (M) Brig (R) Dr. Gulfam Al am, SI (M) Brig (R) Muhammad Saeed Khan Mr. Max Kruse, IFU Brig (R) Sajjad Azam Khan, SI (M) T Bt Fauji Tower Block III 68 Tipu Road, Chaklala, Rawalpindi Tel: (051) 9280075 Fax: (051) 9280416 E - mail: sajjad@fccl.com.pk Mr. Omer Ashraf Tel: (051) 5500157 M/s KPMG Taseer Hadi & Co, Chartered Accountants Fax No: (051) 2822671 M/s Orr Dignam & Co, Advocates Fax No: (051) 2260653

Company Secretary

Chief Financial Officer

Auditors

Legal Advisors

Registered Office

Fauji Towers, Block -III, 68 Tipu Road Chaklala Rawalpindi Tel: (051) 9280075, Exch: 051-9280081-83, 5763321-24 Fax: (051) - 9280416 Near Village Jhang Bahtar, Tehsil Fateh Jang District: Attock Tel: 057-2538047-48, 2538138, 2538148-49 Fax: 057- 2538025

Factory

Company Website

http://www.fccl.com.pk

Directors' Review
1.

FCCL
1st Quarterly Report 2012

The Board of Directors is pleased to present their review report along with the un-audited accounts of the Company for the Quarter ended 30 September 2012.

2.

During the first quarter the Company earned a net profit of Rs. 361 Million as compared to Rs. 104 Million in the same period of last year. The Company achieved capacity utilization of 66% as compared to 50% (based on 11,445 TPD) in the corresponding period of last year. Local dispatches stood at 424,719 tons as compared to 288,759 tons during the corresponding quarter of last year. Export dispatches stood at 141,960 tons as compared to 138,196 tons in the same quarter of last year. The Company is making considerable efforts to further enhance its sales.

3.

The cost of sales per ton during the period under review was higher than the corresponding period of last year mainly due to increase in electricity and diesel prices. The average retention prices during the period have also increased due to enhanced demand in the market, which has somewhat mitigated the impact of cost increase.

4.

Looking forward, next quarter could be slow in terms of dispatches due to the start of winter season. The domestic prices are looking stable but with low exports, domestic dispatches will remain under pressure. However, reduction in KIBOR in line with the SBP discount rate will provide some relief in financial charges. The major challenge however remains stable electricity supply and prices of fuel and electricity.

For and on behalf of the Board

Rawalpindi 30 October 2012

Lt Gen (R) Muhammad Mustafa Khan, HI (M) Chairman

Condensed Interim Balance Sheet as at 30 September 2012

30 September 2012 Un- audited Rupees'000

FCCL
30 June 2012 Audited Rupees'000

1st Quarterly Report 2012

Note

SHARE CAPITAL AND RESERVES Share capital Reserves 4 13,798,150 507,115 14,305,265 13,798,150 106,955 13,905,105

NON - CURRENT LIABILITIES Long term financing - secured Deferred liability - compensated absences Deferred tax liability - net 5 9,747,703 25,203 1,234,956 10,174,513 24,851 1,104,823

CURRENT LIABILITIES Trade and other payables 1,528,019 Markup accrued 174,728 Short term borrowings - secured 1,232,925 Current portion of long term financing 2,499,971 5,435,643 30,748,770 2,380,395 5,494,173 30,703,465 985,954 349,377 1,778,447

CONTINGENCIES AND COMMITMENTS

The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.

Chief Executive

Condensed Interim Balance Sheet as at 30 September 2012

30 September 2012 Un-audited Rupees'000

FCCL
30 June 2012 Audited Rupees'000

1st Quarterly Report 2012

Note

NON - CURRENT ASSETS Property, plant and equipment 7 25,605,760 25,897,954

Long term advance

3,600

3,600

Long term deposits and prepayments

613,803

642,093

CURRENT ASSETS Stores, spares and loose tools Stock in trade Trade debts Advances Trade deposits, short term prepayments and balances with statutory authority Interest accrued Other receivables Cash and bank balances 198,703 284 45,613 194,634 4,525,607 30,748,770 192,024 393 165,242 215,071 4,159,818 30,703,465 2,958,318 939,698 165,650 22,707 2,554,433 955,337 64,241 13,077

Director

Condensed Interim Profit And Loss Account (Un-Audited) FCCL 6 1st Quarterly Report 2012 For the First Quarter Ended 30 September 2012
Quarter Ended 30 September 2012 Note Rupees'000 30 September 2011 Rupees'000

SALES Government levies NET SALES Cost of sales GROSS PROFIT Other income Distribution cost Administrative expenses Other operating expenses Finance cost NET PROFIT BEFORE TAXATION Taxation Current Deferred 8

4,073,099 (609,006) 3,464,093 (2,451,227) 1,012,866 14,438 (38,597) (38,549) (38,737) (385,700) 525,721

1,956,742 (354,833) 1,601,909 (1,364,515) 237,394 8,392 (13,237) (28,491) (9,310) (68,405) 126,343

(34,641) (130,133) (164,774)

(22,525) (22,525) 103,818 0.08 0.07

NET PROFIT AFTER TAXATION

360,947 0.27 0.26

Earnings per share - Basic (Rupees) Earnings per share - Diluted (Rupees)

The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.

Chief Executive

Director

Condensed Interim Statement of Comprehensive Income(Un - Audited) F C C L 7 1st Quarterly Report 2012 For the First Quarter Ended 30 September 2012
30 September 2012 Rupees'000 Quarter Ended 30 September 2011 Rupees'000

Net profit after tax

360,947

103,818

Other comprehensive income

Total comprehensive income

360,947

103,818

The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.

Chief Executive

Director

FCCL Condensed Interim Cash Flow Statement (Un - Audited) 8 1st Quarterly Report 2012 For the First Quarter Ended 30 September2012
Quarter Ended 30 September 2012 Rupees'000 Cash flows from operating activities Net profit before taxation Adjustments for: Depreciation Provision for compensated absences Workers' (Profit) Participation Fund including interest and WWF Finance cost (excluding interest on WPPF) Gain on disposal of property, plant and equipment Interest income including interest on long term deposit 318,814 5,641 39,034 385,403 (2,079) (6,358) 740,455 Operating cash flows before working capital changes Increase in stores and stocks Increase in trade debts (Increase)/ decrease in advances (Increase)/ decrease in trade deposits, short term prepayments and balance with statutory authority Decrease/ (increase) in other receivables (Decrease)/ increase in trade and other payables (20,383) 119,629 (66,571) (466,610) Cash generated from/ (used in) operations Compensated absences paid Payment to Workers' (Profit) Participation Fund Taxes paid Net cash generated from/ (used in) operating activities Cash flows from investing activities Additions in property, plant and equipment Proceeds from disposal of property, plant and equipment Interest received on bank deposits Net cash used in investing activities Cash flows from financing activities Repayment of subordinated loan Repayment of long term financing Amount received against issue of right shares - net Dividend paid on preference shares Repayment of short term borrowings Finance cost paid Net cash used in financing activities Decrease in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period Cash and cash equivalents comprise of the following: Cash and bank balances Running finance 194,634 (1,232,925) (1,038,291) 123,535 (1,378,198) (1,254,663) (374,764) (175,573) (940,000) (425,022) (1,915,359) (1,207,408) 169,117 (1,038,291) (3,189,000) 2,324,986 (66,885) (18,739) (525,797) (1,475,435) (1,738,551) 483,888 (1,254,663) (26,620) 2,079 6,467 (18,074) (52,426) 1,586 2,822 (48,018) 799,566 (437) (52,169) (20,935) 726,025 11,876 (1,473) 147,140 (477,122) (152,528) (898) (26,463) (35,209) (215,098) 1,266,176 (388,246) (101,409) (9,630) 118,658 7,882 9,568 68,147 (1,555) (4,449) 198,251 324,594 (653,241) (3,048) 21,624 525,721 126,343 30 September 2011 Rupees'000

The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.

Chief Executive

Director

Share capital Ordinary Preference Hedging reserve Rupees'000 (606,629) 1,512,436 Rupees'000

Advance against issue of shares Capital reserve Discount on issue of shares Rupees'000 1,826,452 Revenue reserve Accumulated Total profit

Rupees'000 6,932,895 486,992 861,871

Rupees'000

Rupees'000

Rupees'000 11,014,017

Balance as at 30 June 2011 Total comprehensive income 6,378,263 6,378,263 13,311,158 13,311,158 13,311,158 486,992 486,992 (1,364,385) (1,364,385) 486,992 2,327,261 (3,189,132) (861,871) (3,189,131) (2,275) (3,191,406) (1,364,954) (560,470) (418,113) 39,213 (378,900) 46,159

103,818 103,818 1,616,254 1,889,453 360,947 360,947 2,250,400

Profit for the period Other comprehensive income Total comprehensive income Transfer during the period Transaction with the owners Amount received against issue of right shares Issuance of right shares at discount Cost incurred in connection with issue of right shares Total transaction with the owners Balance as at 30 September 2011

103,818 103,818 46,159 2,327,261 (2,275) 2,324,986 13,488,980 13,905,105 360,947 360,947 39,213 14,305,265

Balance as at 30 June 2012 Total comprehensive income Profit for the period Other comprehensive income Total comprehensive income Transfer during the period Total transaction with the owners

Balance as at 30 September 2012

FCCL Condensed Interim Statement of Changes in Equity (Un - Audited) 9 1st Quarterly Report 2012 For the First Quarter Ended 30 September 2012

The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.

Chief Executive

Director

Notes to the Condensed Interim Financial Information (Un-Audited) F C C L 10 1st Quarterly Report 2012 For the First Quarter Ended 30 September 2012
1 Fauji Cement Company Limited ("the Company") is a public limited company incorporated in Pakistan on 23 November 1992 under the Companies Ordinance, 1984 and commenced its business with effect from 22 May 1993. The shares of the Company are quoted on 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. Fauji Foundation holds 57.09 % ordinary and 100% preference shares in the Company. This condensed interim financial information of the Company for the quarter ended 30 September 2012 has been prepared in accordance with the requirements of International Accounting Standard 34 - "Interim Financial Reporting" and provisions of and directives issued under the Companies Ordinance, 1984. In case where requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 have been followed. The disclosures in the condensed interim financial information do not include the information reported for full annual financial statements and should therefore be read in conjunction with the financial statements for the year ended 30 June 2012. Comparative balance sheet is extracted from annual financial statements as of 30 June 2012 whereas comparative profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity are extracted from unaudited condensed interim financial information for the quarter ended 30 September 2011. This condensed interim financial information is unaudited and is being submitted to the members as required under Section 245 of the Companies Ordinance, 1984 and the listing regulations of the Karachi Stock Exchange Limited. 3. 4. The accounting policies and the methods of computation adopted in preparation of this condensed interim financial information are the same as those applied in preparation of financial statements for the year ended 30 June 2012. SHARE CAPITAL There is no change in composition of issued, subscribed and paid up share capital of the Company from 30 June 2012.
5. LONG TERM FINANCING-SECURED Note From banking companies Term finance facilities including syndicated term finance facilities secured 5.1 Less: Current portion shown under current liabilities 5.1 Movement in this account during the period/ year is as follows: Opening balance Principal repayment during the period/ year Exchange loss on revaluation and transaction cost adjustment Closing balance 6. CONTINGENCIES AND COMMITMENTS Un-Audited 30 September 2012 Rupees'000 Audited 30 June 2012 Rupees'000

12,247,674 (2,449,971) 9,747,703 12,554,908 (374,764) 67,530 12,247,674

12,554,908 (2,380,395) 10,174,513 13,553,622 (1,671,082) 672,368 12,554,908

6.1

Contingencies There is no change in the contingent liabilities as reported in the financial statements for the year ended 30 June 2012. Commitments The company has opened Letters of Credit for the import of spare parts valuing Rs. 56 million ( 30 June 2012: Rs. 51 million).
Un-Audited 30 September 2012 Rupees'000 25,897,954 26,620 (318,814) 25,605,760 Audited 30 June 2012 Rupees'000 26,658,079 310,288 (330) (1,070,083) 25,897,954

6.2

7.

PROPERTY, PLANT AND EQUIPMENT

Opening book value Additions during the period/ year Written down value of disposals Depreciation for the period Closing carrying amount

Notes to the Condensed Interim Financial Information (Un-Audited) F C C L 11 1st Quarterly Report 2012 For the First Quarter Ended 30 September 2012
Quarter Ended Un-audited 30 September 2012 Rupees'000 162,021 179,332 7,883 138,149 3,736 22,417 897,645 550,696 315,817 107,065 677 238 4,011 5,388 1,224 2,396,299 Add: Opening work-in-process Work in process transferred after trial run of line -II Less: Closing work-in-process 677,001 (641,609) 2,431,691 146,138 (126,602) 2,451,227 Less: Own consumption capitalized 2,451,227 Un-audited 30 September 2011 Rupees'000 79,556 111,337 4,597 80,218 1,635 8,001 578,421 320,537 115,429 43,013 197 1,614 3,728 2,485 1,350,768 210,041 260,372 (475,451) 1,345,730 80,289 135,052 (194,035) 1,367,036 (2,521) 1,364,515

8.

COST OF SALES Raw material consumed Packing material consumed Stores and spares consumed Salaries, wages and benefits Rent, rates and taxes Insurance Fuel consumed Power consumed Depreciation Repairs and maintenance Technical assistance Printing and stationery Traveling and conveyance Vehicle running and maintenance expenses Communication, establishment and other expenses

Cost of goods manufactured Add: Opening finished goods Finished goods transferred after trial run of line-II Less: Closing finished goods

9.

RELATED PARTY TRANSACTIONS Fauji Foundation holds 57.09 % ordinary shares and 100% preference shares of the Company, 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 significant influence and employees' fund. Transaction and balances with related parties are as follows:

Notes to the Condensed Interim Financial Information (Un-Audited) F C C L 12 1st Quarterly Report 2012 For the First Quarter Ended 30 September 2012
Quarter Ended 30 September 2012 Rupees'000 Fauji Foundation -Sale of Cement -Payment on account of clearance of shipments -Payment for use of medical facilities -Preference dividend paid -Payment of rent and utilities -Amount received against underwriting of shares -Repayment of subordinated loan -Repayment of amount payable -Amount payable 5,455 69 175,573 1,925 300,000 115 30 September 2011 Rupees'000 432 750 66,885 2,327,260 3,189,000 -

Payments made into Employees' Provident Fund Payments made to Workers' (Profit) Participation Fund Remuneration including benefits and perquisites to Chief Executive Remuneration including benefits and perquisites to key management personnel

5,650 52,169 2,870 7,733

4,450 26,206 2,468 6,195

* Comparative figure relate to 30 June 2012 balance

10. Date of authorization for issue This condensed interim financial information was authorized for issue by the Board of Directors of the Company in their meeting held on 30 October 2012 . 11. General Figures have been rounded off to the nearest thousand of Rupees unless otherwise stated.

Chief Executive

Director

ENVIRONMENTAL

ISO 9001 & ISO 14001

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Company Secretary

Fauji Cement Company Limited

CEMENT

AU J I

Fauji Tower Block-III, 68 Tipu Road Rawalpindi Pakistan