| ATTOCK CEMENT PAKISTAN LIMITED |
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| Annual
Reports 2002 |
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| Contents |
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| Company Information |
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| Board
of Directors |
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| ISO
Certification |
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| Plant
and Facilities |
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| Notice of the Meeting |
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| Directors'
Report |
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| Decade at a Glance |
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| Statement of Compliance
with Best Practices |
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| of Code of Corporate
Governance |
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| and
Auditors' Review Report thereon |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Statement
of Changes in Equity |
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| Cash
Flow Statement |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| Company
Information |
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| Board of Directors |
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| Dr. Ghaith R. Pharaon |
Chairman |
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| Babar Bashir Nawaz |
Chief Executive |
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| Laith G. Pharaon |
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| Wael G. Pharaon |
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| Shuaib A. Malik |
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| Fakhrul Islam Baig |
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| Abdul Nayeem |
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| Arif Kemal |
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| Akhtar Hussain |
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| Audit
Committee of the Board |
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| Shuaib A. Malik |
Chairman |
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| Fakhrul
Islam Baig |
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| Arif Kemal |
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| Company Secretary |
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| Irfan Amanullah |
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| Bankers |
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| BankAl-Falah
Limited |
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| Faysal Bank Limited |
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| Habib Bank Limited |
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| Muslim
Commercial Bank Limited |
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| National
Bank of Pakistan |
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| Auditors |
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| A.F. Ferguson & Co., |
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| Chartered
Accountants |
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| Registered Office |
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| 5th Floor, P.N.S.C Building, |
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| M.
T. Khan Road, |
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| Karachi. |
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| Plant |
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| Hub Chowki, Lasbella, |
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| Baluchistan. |
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| Legal Advisor |
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| Sattar
& Sattar |
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| Attorneys at Law |
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| Share Registrar |
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| Noble Computer Services (Pvt.)
Ltd. |
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| 14, Bangalore Town Housing
Society |
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| Main Shahrah-e-Faisal,
Karachi. |
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| Tel:
4546978-4520121 Fax: 4314962 |
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| 4.
CDC Account holders will further have to follow the under mentioned
guidelines as laid |
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| down
in Circular 1 dated January 26, 2000 issued by the Securities and Exchange
Commission |
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| of Pakistan. |
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| A. For Attending the
Meeting: |
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| i)
In case of individuals, the account holder or sub-account holder and/or the
person |
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| whose
securities are in group account and their registration details are uploaded
as per |
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| the
Regulations, shall authenticate his/her identity by showing his/her original
National |
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| Identity
Card (NIC) or original passport at the time of attending the meeting. |
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| ii)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with |
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| specimen
signature of the nominee shall be produced (unless it has been provided |
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| earlier)
at the time of meeting. |
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| B.
For Appointing Proxies: |
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| i)
In case of individuals, the account holder or sub- account holder and/or the
person |
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| whose
securities are in group account and their registration details are uploaded
as per |
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| the
Regulations, shall submit the proxy form as per the above requirement. |
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| ii)
The proxy form shall be witnessed by two persons whose names, addresses and
NIC |
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| Numbers shall be mentioned
on the form. |
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| iii)
Attested copies of the NIC or Passport of the beneficial owners and the proxy
shall be |
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| furnished with the proxy
form. |
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| iv)
The proxy shall produce his/her original NIC or original Passport at the time
of the meeting. |
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| v)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with |
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| specimen
signature shall be submitted (unless it has been provided earlier)
alongwith |
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| proxy
form to the Company. |
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| 5.
Members who desire to stop deduction of Zakat from their dividends may submit
a |
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| declaration
on non-judicial stamp paper duly signed as required under the law. |
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| 6.
Members are requested to notify immediately changes, if any, in their
registered address. |
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| NOTICE
OF THE TWENTY THIRD ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 23rd Annual General Meeting of Attack Cement
Pakistan Limited |
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| will
be held on Thursday October 24, 2002 at 2:30 p.m. at Marriott Hotel, Karachi,
to transact |
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following business: |
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| 1.
To receive, consider and adopt the Audited Accounts of Attock Cement Pakistan
Limited |
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the year ended June 30, 2002 together with the Report of Auditors and the
Directors, |
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| thereon. |
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| 2.
To appoint Auditors for the Financial Year 2002 -2003 and to fix their
remuneration. |
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| 3.
To declare final cash dividend @5% (Re. 0.50 per share) as recommended by the
Board |
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| of
Directors for the year ended June 30, 2002. This is in addition to 10% (Re.
1.00 per |
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| share)
interim dividend already paid and will make a total of 15% (Re. 1.50 per
share) for |
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year ended June 30, 2002. |
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| 4.
To elect Seven (07) Directors of Attock Cement Pakistan Limited for a period
of three years |
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| commencing
from October 24, 2002 in accordance with the provisions of the Companies |
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| Ordinance,
1984. The names of retiring Directors are: |
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| 1. Dr. Ghaith R. Pharaon |
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| 2.
Laith G. Pharaon |
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| 3. Wael G: Pharaon |
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| 4.
Shuaib A. Malik |
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| 5.
Babar Bashir Nawaz |
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| 6.
Fakhrul Islam Baig |
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| 7. Abdul Nayeem |
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| 8. Arif Kemal |
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| 9. Akhtar Hussain |
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| The
retiring Directors are eligible for re-election. |
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| The
Board has decided to link the date of election of Directors with the date of
Annual General |
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| Meeting
in order to facilitate the shareholders and minimise related expenses
thereon. |
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| By
Order of the Board |
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| IRFAN
AMANULLAH |
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| Company Secretary |
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| Karachi:
September 27, 2002 |
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| NOTES: |
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| 1.
The Register of Members and Share Transfer Books of the Company will remain
closed |
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Thursday October 10 to Thursday October 24, 2002 (both days inclusive). |
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| 2.
Only those members whose names appear in the Register of Members of the
Company as |
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October 24, 2002 are entitled to attend and vote at the Meeting. |
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| 3.
A member entitled to attend, and vote may appoint any other person as his/her
proxy |
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attend and vote on his/her behalf. Proxies must be received at the Registered
Office |
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| of
the Company duly stamped and signed not later than 48 hours before the time
of holding |
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| the meeting. |
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| MARKETING |
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| Falcon
Brand continued to maintain its market leadership position in the South both
in terms of |
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| price
and quantity. Our share in the market of South was 21.50%, which is
reasonable and the |
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| highest
of the 8 plants operating in the South. |
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| The
Company's continuing success is attributable to its policy of innovation
/flexibility and |
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| introduction
of new products and services to satisfy market demand coupled with superior
and |
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| consistent
quality of its products which have been tested time and again by consultants
at internationally |
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| known
laboratories around the world. Due to this reason most of the prestigious and
internationally |
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| funded
projects of national importance, consultants/contractors have prescribed the
use of Falcon |
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| Brand
products. It is the only brand in the Country, which commands a high premium
as compared |
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| to
the other brands in its core market of Karachi. |
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| REPAYMENT
OF DEBT OBLIGATIONS |
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| By
the Grace of Allah the Company repaid all its long term and short-term debt
obligations and as |
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| a
result of this a substantial reduction has been achieved in terms of
financial charges, which were |
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| lower
by Rs. 30.3 million (57%) during the year under review. |
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| APPROPRIATION OF PROFIT |
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| Financial
results for the year under review are as follows: - |
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2002 |
2001 |
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(Rs. in thousand |
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| Profit before tax |
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189,297 |
161,625 |
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| Taxation |
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| Current |
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55,518 |
31,000 |
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| Deferred |
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37,873 |
53,993 |
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93,391 |
84,993 |
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| Profit after tax |
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95,906 |
761,632 |
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| Unappropriated
profit b/f |
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372,582 |
295,950 |
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| Profit
available for appropriation |
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468,488 |
372,582 |
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| Appropriations: |
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| Issue
of Bonus Shares (2001 : Nil) |
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61,846 |
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| Interim
Dividend @ 10% (2001: Nil) |
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61,846 |
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| Proposed
Final Dividend @ 5 % (2001 : Nil) |
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36,081 |
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159,773 |
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| Unappropriated
profit c/f |
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308,715 |
372,582 |
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| Earning Per Share |
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Rs. |
1.33 |
1.06 |
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| DIRECTORS^
REPORT |
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| In
the name of Allah, The Most Gracious, The Most Benevolent, The Most
Merciful |
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| Assalam-o-Alaikum |
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| The
Directors take pleasure in presenting their Report with the audited accounts
of the Company |
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| for
the year ended June 30, 2002. |
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| CEMENT
INDUSTRY |
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| Cement
industry continues to remain under pressure due to depressed market
conditions and |
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| slowdown
of economic activities in the country. As in the previous year there was no
growth in |
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| the
demand for cement in the country, which remained stagnant at about 9.8
Million Metric Tonnes. |
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| The
situation further deteriorated due to commissioning of a new Plant in the
North and capacity |
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| expansion
by an existing unit in the South. Currently there is a surplus of about 7
Million Metric |
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| Tonnes
in the country and there seems to be no short-term solution to the problem of
this over |
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| capacity.
The overall capacity utilisation of industry during the year under review
remained at 58%. |
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| OPERATIONAL
RESULTS |
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| Despite
the difficult market conditions, the Company was able to show good results
and improved |
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| on
its profitability during the year. This was mainly due to significant change
in the composition |
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| of
energy utilisation. The use of Coal and increased availability of Gas helped
the Company to |
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| curtail
and reduce its overall energy cost. As a result the Gross Margins improved
from 16.77% |
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| to 19.14%. |
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| Production
and Sales figures achieved during the year are as follows: - |
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2002 |
2001 |
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(In Metric Tonnes) |
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| Clinker Production |
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469,625 |
604,392 |
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| Cement Production |
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520,883 |
529,680 |
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| Cement Sales |
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510,847 |
531,474 |
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| Clinker
production during the year remained low as compared to the previous year as
the Company |
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| carried
out major replacement programme due to which the Plant operations remained
suspended |
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| for
about three (3) months. The Company had build up a reasonable Clinker stock
in the previous |
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| year
to ensure uninterrupted Cement sales during the year. |
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| As
a result of use of coal, coupled with other cost saving measures, the overall
gross and operating |
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| margins
of the Company improved significantly. The significant decline in the
transmission of gas |
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| to
your plant over the years and ever increasing prices of Furnace Oil were
successfully countered |
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| through
the use of coal by developing an in-house indigenous coal plant. In order to
be more |
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| competitive
in the market the Management is taking various steps to optimize the use of
coal by |
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| converting
the plant into a complete Coal Fired Plant by December 2003. |
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| Key
operating and financial data for last 10 years has been given on Page 13. |
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| d) International Accounting Standards, as
applicable in Pakistan, have been followed in preparation |
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| of
financial statements; |
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| e) The system of internal control is sound
in design and has been effectively monitored and |
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| implemented; |
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| f) There are no significant doubts upon the
Company's ability to continue as a going concern; |
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| g) There has been no material departure from
the best practices of corporate governance as |
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| detailed in the listing
regulations. |
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| h) The following is the value of investments
of terminal benefit schemes based on their respective |
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| latest
audited accounts:- |
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| Provident Fund |
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Rs. 50.92 million |
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| Gratuity Fund |
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Rs. 14.96 million |
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| Pension Fund |
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Rs. 32.28 million |
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| i) During the year three (3) meetings of the
Board of Directors were held. Attendance by each |
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| Director
is as follows : - |
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| Name of Director |
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No. of Meetings Attended |
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| Dr.
Ghaith R. Pharaon - (PCIGL Saudi Arabia) |
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| Mr.
Laith G. Pharaon (PCIGL Saudi Arabia) |
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| Mr.
Wael G. Pharaon (PCIGL Saudi Arabia) |
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| Mr. ShuaibA. Malik |
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3 |
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| Mr.
Babar Bashir Nawaz |
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3 |
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| Mr. Arif Kemal |
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1 |
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| Mr.Abdul
Nayeem (PCIGL Saudi Arabia) |
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| Mr.
Fakhrul Islam Baig |
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3 |
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| Mr. Akhtar Hussain |
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3 |
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