Lahore: Pakistan Engineering Company Ltd. (PECO) has released its audited financial results for the fiscal year ending June 30, 2022, revealing a significant operational loss amid a leadership struggle within the company. During a board meeting held on January 20, 2025, via Zoom, the directors disclosed that no cash dividends, bonus shares, or other entitlements would be distributed to shareholders for the reported period.
The financial statements highlighted a challenging year for PECO, as the company faced a loss after taxation of 242.03 million rupees, compared to a loss of 310.52 million rupees in the previous year. Sales dropped to 137.93 million rupees from 183.30 million rupees, while the cost of sales decreased to 321.31 million rupees from 366.64 million rupees. The company recorded a gross loss of 183.38 million rupees, marginally higher than the previous year’s loss of 183.34 million rupees.
Operational expenses added to the company's woes, with administrative costs reaching 48.38 million rupees, down from 110.84 million rupees in the prior year. Despite a modest increase in other operating income to 5.53 million rupees, PECO reported an operating loss of 237.14 million rupees, which was an improvement from the previous year's loss of 303.91 million rupees. The basic and diluted loss per share stood at 42.54 rupees, a decrease from 54.57 rupees in the previous fiscal year.
According to information available from the Pakistan Stock Exchange (PSX), the financial turmoil was exacerbated by a significant leadership crisis. From October 2018 to October 2022, Mr. Mairaj Anees Ariff, the ex-Managing Director appointed by the government, unlawfully seized control of the company. This resulted in the exclusion of the legitimate Board of Directors and key management personnel, including the CFO, Company Secretary, and Head of Internal Audit, from performing their duties, leading to disruptions in corporate governance and operations.
The company's total assets as of June 30, 2022, were reported at 15.10 billion rupees, a slight decline from 15.38 billion rupees the previous year. Non-current assets remained stable at 14.45 billion rupees, while current assets dropped to 341.01 million rupees from 587.29 million rupees. The company's liabilities totaled 1.79 billion rupees, with trade and other payables amounting to 584.31 million rupees.
The external auditors, Messrs. Maqbool Haroon Ahmad & Co. Chartered Accountants, refrained from expressing an opinion on the financial statements, highlighting the uncertainty surrounding the company's financial position. The Statement of Financial Position and related documents, detailing the financial results, are to be circulated in due course.
In conclusion, PECO's financial performance for the year ended June 30, 2022, reflects the significant impact of internal management conflicts and operational challenges. The company, now seeking to stabilize its governance structure, hopes to turn around its fortunes and restore shareholder confidence in the coming years.