BU IL DI NG BETTE R PA KI STAN

2009
Annual Report
Review Report to the Members on Directors' Statement of
Compliance with Best Practices of Code of Corporate Governance
We have reviewed the Directors' Statement of Compliance with the best practices contained in the Code of
Corporate Governance prepared by the Board of Directors of Fauji Cement Company Limited, ("the
Company") to comply with the Listing Regulations No. 37, 36 and Chapter VIII of the Karachi, Islamabad
and Lahore Stock Exchanges respectively where the Company is listed.
The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors
of the Company. 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 of Corporate Governance and report if it does not. A review is limited primarily to
inquiries of the Company personnel and review of various documents prepared by the Company to comply
with the Code.
As part of our audit of financial statements we are required to obtain an understanding of the accounting
and internal control systems sufficient to plan the audit and develop an effective audit approach. We are not
required to consider whether the Board's statement on internal control covers all risks and controls, or to
form an opinion on the effectiveness of such internal control, the Company's corporate governance
procedures and risks.
Further, Sub- Regulation (xiii) of Listing Regulation No. 37 notified by The Karachi Stock Exchange
(Guarantee) Limited vide circular KSE/N-269 dated January 19, 2009 requires the Company to place
before the Board of Directors for their consideration and approval related party transactions distinguishing
between transactions carried out on terms equivalent to those that prevail in arm's length transactions and
transactions which are not executed at arm's length price recording proper justification for using such
alternate pricing mechanism. Further, all such transactions are also required to be separately placed
before the audit committee. We are only required and have ensured compliance of requirement to the
extent of approval of related party transactions by the Board of Directors and placement of such
transactions before the audit committee. We have not carried out any procedures to determine whether the
related party transactions were undertaken at arm'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 of Corporate Governance as applicable to the Company for the year
ended June 30, 2009.

KPMG TASEER HADI & CO.

CHARTERED ACCOUNTANTS
ISLAMABAD Muhammad Rehan Chughtai
16 September 2009

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 BU IL DI NG BETTE R PA KI STAN

2009
Annual Report
Auditors’ Report to the Members
We have audited the annexed balance sheet of Fauji Cement Company Limited ("the Company") as at 30
June 2009 and the related profit and loss account, 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, 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 2009 and of the profit, its cash flows and changes
in equity for the year then ended; and
(d) in our opinion no Zakat was deductible at source under Zakat and Ushr Ordinance, 1980
(XVIII of 1980).

ISLAMABAD KPMG TASEER HADI & CO.

16 September 2009 CHARTERED ACCOUNTANTS
Muhammad Rehan Chughtai
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 BU IL DI NG BETTE R PA KI STAN

2009
Annual Report
Balance Sheet as at June 30, 2009
2009 2008
Note Rupees'000 Rupees'000

SHARE CAPITAL AND RESERVES

Share capital 4 7,419,887 7,419,887

2,270,802 Reserves 5
1,864,094
9,690,689 9,283,981

NON - CURRENT LIABILITIES

Long term financing - secured 6 6,224,227 325,000

- - Fair value of derivative
7
Deferred liability - compensated absences 8 10,766 9,468
Deferred tax liability - net 9 728,154 363,154
Retention money payable 143,739 18,129
Liability against shipment in transit 10 2,020,916 -

CURRENT LIABILITIES
Trade and other payables 11 493,210 1,441,825
Markup accrued 95,407 33,186
Short term borrowings - secured 12 1,378,365 765,778
Current portion of long term financing 6 325,000 550,000
2,628,010 2,454,761

21,446,501 12,454,493

CONTINGENCIES AND COMMITMENTS 13

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

These financial statements were authorised for issue by the Board of Directors of the Company in their
meeting held on 16 September 2009.

Chief Executive
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 BU IL DI NG BETTE R PA KI STAN

2009
Annual Report

2009 2008
Note Rupees'000 Rupees'000

FIXED ASSETS - Tangible

Property, plant and equipment 14 18,777,204 7,106,599

LONG TERM ADVANCE 15 6,300 7,200

LONG TERM DEPOSITS AND

PREPAYMENTS 16 1,008,983 46,611

CURRENT ASSETS

Stores, spares and loose tools 17 1,038,078 907,591

Stock in trade 18 137,451 230,089
Trade debts 19 54,641 26,927
Advances, deposits, prepayments and other
receivables 20 247,897 345,567
Cash and bank balances 21 175,947 3,783,909
1,654,014 5,294,083

21,446,501 12,454,493

Director
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 BU IL DI NG BETTE R PA KI STAN

2009
Annual Report
Profit and Loss Account
For the Year Ended June 30, 2009
2009 2008
Note Rupees'000 Rupees'000

SALES 22 6,953,323 4,749,217

Less: Government levies 22 (1,638,785) (1,203,315)
3,545,902 NET
SALES
5,314,538

Less: Cost of sales 23 (2,887,790) (3,627,110)

GROSS PROFIT 1,687,428 658,112

Other income 24 190,424 107,574

Distribution cost 25 (50,260) (53,383)
Administrative expenses 26 (103,186) (76,495)
Other operating expenses 27 (78,173) (34,290)
Finance cost 28 (224,716) (146,954)
NET PROFIT BEFORE TAXATION 1,421,517 454,564
Taxation 29 (413,894) (40,966)
NET PROFIT AFTER TAXATION 1,007,623 413,598
Earnings per share - Basic 30.1 1.45 0.85
Earnings per share - Diluted 30.2 1.36 0.77

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

Chief Executive Director

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 BU IL DI NG BETTE R PA KI STAN

2009
Annual Report
Cash Flow Statement
For the Year Ended June 30, 2009
2009 2008
Note Rupees'000 Rupees'000
Cash flows from operating activities
Net profit before taxation 1,421,517 454,564
Adjustments for:
Depreciation 311,749 302,656
Provision for compensated absences 12,833 9,492
Reversal of provision for bad debt - (3,500)
Workers' (Profit) Participation Fund including interest and WWF 77,841 33,690
Finance cost 224,388 146,954
Gain on disposal of property, plant and equipment (2,479) (2,550)
Interest income including interest on long term deposit (184,750) (93,255)
439,582 393,487
Operating cash flows before working capital changes 1,861,099 848,051
Increase in stores and stocks (37,849) (485,602)
Increase in long-term deposits and prepayments (66,534) -
Decrease in long-term advance 900 900
Increase in retention money 125,610 18,129
Increase in trade debts (27,714) (3,869)
Increase in advances, deposits, prepayments and other receivables (20,850) (185,476)
Increase in trade and other payables 300,472 36,128
274,035 (619,790)
Cash generated from operations 2,135,134 228,261
Compensated absences paid (11,145) (8,241)
Payment to Workers' (Profit) Participation Fund (24,741) (41,483)
Taxes paid (103,520) (27,928)
Net cash generated from operating activities 1,995,728 150,609
Cash flows from investing activities
Additions in property, plant and equipment excluding borrowing cost capitalized (5,096,237) (2,116,568)
Proceeds from disposal of property, plant and equipment 4,480 2,594
Interest received on bank deposits 198,861 83,504
Net cash used in investing activities (4,892,896) (2,030,470)
Cash flows from financing activities
Repayment of long term finances (550,000) (550,000)
Proceeds from long-term loans 1,740,000 -
Dividend paid on ordinary shares (55) (3,632)
Dividend paid on preference shares (8,361) (8,361)
Import finances and export refinance (334,988) 754,988
Payment of guarantee premium and other cost (990,518) -
Proceeds from issue of shares - net of transaction cost - 5,059,174
Finance cost paid (289,273) (259,399)
Net cash (used in)/ generated from financing activities (433,195) 4,992,770
(Decrease)/ increase in cash and cash equivalents (3,330,363) 3,112,909
Cash and cash equivalents at beginning of the year 3,160,532 47,623
Cash and cash equivalents at end of the year 31 (169,831) 3,160,532
The annexed notes from 1 to 36 form an integral part of these financial statements.

Chief Executive Director

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