Lahore: Pakistan Engineering Company Ltd. (PECO) has announced its financial results for the fiscal year ending June 30, 2021, revealing significant losses amid a turbulent management period. The company's board meeting, held on January 20, 2025, disclosed that no cash dividends, bonus shares, or other entitlements will be distributed to shareholders, with right shares announced separately.
The company's audited financial statements, which include the Profit and Loss Account, Statement of Financial Position, Statement of Changes in Equity, and Statement of Cash Flows, highlighted a challenging fiscal year. Sales for the year were reported at 183.30 million rupees, a decrease from the previous year's 259.60 million rupees. The cost of sales exceeded the revenue, resulting in a gross loss of 183.34 million rupees, compared to a loss of 219.90 million rupees in the previous year.
Operating expenses further exacerbated the company's financial woes, with administrative expenses rising to 110.84 million rupees from 47.18 million rupees in 2020. The company also faced a significant operating loss of 303.91 million rupees, up from a loss of 208.81 million rupees the previous year. Finance costs increased to 10.25 million rupees, contributing to a pre-tax loss of 314.15 million rupees. After accounting for taxation, the loss stood at 310.52 million rupees, compared to 215.48 million rupees in 2020.
According to information available from the Pakistan Stock Exchange (PSX), the company's basic and diluted loss per share worsened to 54.57 rupees, from 37.87 rupees per share in the prior year. The financial difficulties were compounded by issues in corporate governance, as the Government-appointed ex-MD of PECO, Mr. Mairaj Anees Ariff, unlawfully seized control of the company from October 2018 to October 2022. During this period, he barred the Board of Directors and other key officials from performing their duties, leading to the suspension of essential corporate activities.
The company's asset position also showed a decline, with total assets reducing to 15.38 billion rupees from 15.55 billion rupees in the previous year. Non-current assets remained stable at 14.48 billion rupees, while current assets decreased significantly to 587.29 million rupees from 722.51 million rupees. The company's equity was reported at 12.68 billion rupees, down from 12.99 billion rupees, with accumulated losses increasing to 1.83 billion rupees.
Despite generating 25.16 million rupees from operations, PECO faced a net cash outflow from operating activities of 34.13 million rupees in the previous year, which improved to a net inflow of 13.22 million rupees in 2021. The company’s financing and investing activities remained minimal, with no significant changes reported.
The external auditors, Messrs. Maqbool Haroon Ahmad & Co., refrained from expressing an opinion on the financial statements, highlighting the ongoing challenges faced by PECO. The company's future remains uncertain as it navigates through the aftermath of the management turmoil and financial losses.