Engro Foods announces profit of Rs 891 million

By Abdul Qadir Qureshi

 The Board of Directors of Engro Foods Limited has announced a profit after tax of Rs. 891 million for the year ended, December 31, 2011 as compared to Rs 176 million in 2010.

 Engro Foods’ revenue for 2011 recorded an increase of 43% and stood at Rs. 30 billion as compared to Rs. 21 billion in the 2010. The Company also announced an EPS of Rs. 1.22 (basic & diluted) for the year 2011 as compared to EPS of Rs 0.31 in the year 2010.

 Engro Foods continued to consolidate its growth through the year and during the first half of the year, in May 2011, the foods business raised Rs. 1.2 billion by issuing 48 million shares to the institutional investors – mainly the US & UK mutual funds – at a share price of Rs. 25 per share. The Company’s vision to enhance its footprint and pursue a focused growth strategy led to the first-ever public offering of 27 million shares of the business to the general public at a price of Rs. 25 per share, inclusive of a premium of Rs. 15 per share.

 The Company has continued its aggressive business strategy of growth and diversification and achieved volume growth of 22% in 2011. Building on its promise of elevating consumer delight, the business diversified into popularly priced, high quality product category with the launch of Dairy Omung – a nutritious and affordable dairy product for lower income consumers. Innovation remained at the core of the business’s product expansion strategies this year and we also introduced Olper’s variants of Badam Zafran and Rose flavors which were well received by the market.

 The year 2011 also marked the relaunch of the refreshing Olfrute brand which continues to reflect strong consistent growth in its volume base. With six invigorating flavors Olfrute registered a volume growth of 236% in 2011.

 Omore’s volume increased by 43% in 2011 and the company continued to investment in its brands, product development & diversification and cold chain infrastructure.

 The Company’s Nara Dairy Farm continued to remain a rich and nutritious source of raw material for its dairy segment. The Nara Farm produced over 5.8 million liters of milk in 2011 with a total herd size of over 3,000 animals.

 Mirroring its success in the local market, Engro Corp – the parent company – made its foray within the international arena with acquisition of Al-Safa – a leading halal meat brand in North America – at a total cost of US $6.3 million in April 2011. The business is owned by Engro Corp, but managed by Engro Foods.  During the first 8 months of operations (since the acquisition) till December 31, 2011, Al-Safa brand sales were US $5.3 million and the operational loss was US $ 1.2 million including the pre-commencement cost of US $0.33 million.

 Since Engro Corporation currently owns the equity stake in Engro Foods Canada these losses are not included in the Company’s financial performance. Engro Foods will buy the equity shares from the holding Company at the actual cost post-approval of the Regulator.

 The Board expressed confidence in the strategic vision and direction of the management and indicated a clear signal to pursue a long-term growth strategy by building an inherent cost-consciousness and product positioning for the business.

Sui Southern Gas Company declares 25pc cash dividend, 5pc bonus

Sui Southern Gas Company  has earned a net profit of Rs. 4,724 million for financial year 2010-11 as compared to Rs. 4,399 million during the last corresponding period. In addition, the Company’s earnings-per-share for the period under review increased to Rs. 5.63 from Rs. 5.24 in FY 2009-10. The Board of Directors of SSGC, in its meeting held on 29 September 2011, approved the final accounts for the year ended 30 June 2011 and proposed a 25% cash dividend for its shareholders; in addition, 5% bonus shares was also declared by the Board.

SECP tells holding companies to enhance public disclosure

ISLAMABAD: Group Companies Registration Regulations, 2008, were issued by the Securities and Exchange Commission of Pakistan in 2008 to provide a regulatory framework for the formation of group companies, comprising a holding company and its subsidiaries and to streamline the group ownership structures.

The Regulations provided a registration mechanism of holding companies along with their subsidiaries as a group with the SECP, and also provided an enabling framework for the group companies intending to avail themselves of tax relief from the FBR.

In order to further enhance the public disclosure of intra-group shareholding and financial position of the group companies, it has now been required that all the holding companies registered under the Regulations shall maintain their websites and place thereon the annual audited financial statements of their group along with their directors’ report and the auditors’ report. SRO No. 640(I)/2011 was issued on June 22, 2011, mandating the aforesaid requirement, and the holding companies have been required to report the compliance by intimating the SECP of their website address within 15 days of the issuance of the notification.

SECP takes Eastern Capital Limited to court, warrants issued

ISLAMABAD – January 12: The Securities and Exchange Commission of Pakistan (SECP) has filed a criminal complaint in a court against Eastern Capital Limited, ex-member of the Karachi Stock Exchange (KSE) and all those, including its director, involved in non-transfer of shares/funds and unauthorized pledges of client’s shares and other prohibited activities under Section 24(2) of the Central Depositories Act 1997 as well as offences under relevant provisions of the Pakistan Penal Code (PPC). The warrants for all the accused have been issued.

The SECP received numerous complaints/claims against five KSE brokers mainly pertaining to the alleged non-transfer of shares and non-payment of funds. The SECP directed the brokers to expedite resolution of complaints/claims and issued instructions for the immediate transfer of shares/funds to the claimants. The brokers failed to remedy the situation, obliging the SECP to suspend registration of Eastern Capital Limited and four other brokers.

Moreover, the SECP initiated enquiries against five brokers and appointed enquiry committees comprising officers from the SECP, KSE and CDC.

It emerged that the shares of the clients which were in control of Eastern Capital Limited for trading purposes only were moved, pledged and transferred to other accounts, without any authorization. . The shares were pledged with banks to obtain financing which were mostly used to liquidate liabilities of the brokerage house resulting in total loss to the investors.

Consequently, the SECP filed a criminal complaint in the court of Session Judge Karachi South against the Eastern Capital Limited and others. This is the third criminal complaint against the brokerage houses involved in illegal pledging of shares. The earlier two criminal complaints were filed against Capital One Equities Limited and Cliktrade Limited.

The SECP has also moved a reference under Section 18(b)(i) of the NAB Ordinance, 1999 with a request to investigate the affairs of Capital One Equities Limited and Cliktrade Limited to punish the culprits who have cheated innocent investors and to recover the investors’ savings which have been misappropriated/transferred for the personal benefits of the sponsors, directors and their associated concerns.

In addition, the SECP took steps to curb such market abuse by improving regulatory framework to facilitate the market participants. In this connection the SECP has recently approved a project of “Automation of Securities Settlement” which has jointly been implemented by NCCPL and CDC to facilitate the market participants to automate the mechanism for settlement of book-entry securities by eliminating the need for any manual intervention. The new system not only improves efficiency but also help in preventing mishandling of book entry securities of clients.

The copies of enquiry report on Eastern Capital Limited and criminal complaint are available on the SECP website. The SECP has also finalized the enquiry reports on the other two expelled KSE members and legal action is being taken against all those who were involved in prohibited practices.