| D. G. KHAN CEMENT COMPANY LIMITED |
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| Annual Reports 2002 |
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| CONTENTS |
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| Corporate profile |
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| Notice of meeting |
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| Directors' report |
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| Operating
and financial data |
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| Code
of corporate governance |
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| Auditors' report |
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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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| CORPORATE PROFILE |
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| Board of Directors |
Mrs. Naz Mansha i |
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Chairman/Chief Executive |
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Mr. Saqib Elahi |
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Mr. KhalidQadeerQureshi |
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Mr. H. Hatim Dayala |
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Nominee - ICP |
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Mr. Zaka-ud-Din |
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Mr. Aftab Ahmad Khan |
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Mr. Inayat Ullah Niazi l |
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Chief Financial Officer |
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| Audit Committee |
Mr. Saqib Elahi |
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Chairman |
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Mr. KhalidQadeerQureshi |
Member |
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Mr. Aftab Ahmad Khan |
Member |
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| Company Secretary |
Mr. Khalid Mahmood Chohan |
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| Bankers |
ABN-AMRO Bank N.V. |
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Faysal Bank Limited |
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Habib Bank Limited |
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Mashreq Bank Psc |
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Muslim Commercial Bank
Limited |
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Union Bank Limited |
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| Auditors |
M/s A.F. Ferguson &
Co, Chartered Accountants |
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| Legal Advisors |
Mr. Shahid Hamid,
Bar-at-Law |
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| Registered Office |
Nishat House, 53-A,
Lawrence Road, Lahore-Pakistan |
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Phone: 92-42-6367812-20
Fax: 92-42-6367414 |
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Email: info@dgcement.com |
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web Site:
www.dgcement.com |
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| Factory |
Khofli Sattai, Distt.
Dera Ghazi Khan-Pakistan |
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Phone:92-641-460025-7 |
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Fax:92-641-462392 |
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Email:
dgsite@dgcement.com |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that 24th Annual General Meeting of the Shareholders of D. G.
Khan Cement Company Limited ("the Company") will |
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| be
held on 31st October, 2002 (Thursday) at 11:00 a. m. at Nishat House, 53-A,
Lawrence Road, Lahore to transact the following business: |
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| 1. To confirm minutes of the last meeting. |
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| 2. To receive and adopt the audited
accounts of the Company for the financial year ended June 30,2002 together
with the Directors' |
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| and
Auditors' reports thereon. |
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| 3. To approve issue of Bonus Shares @ 10%
i.e one (1) ordinary share for every ten (10) ordinary shares as recommended
by the Board. |
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| 4. To appoint Auditors for the year 2002 -
2003 and fix their remuneration. The present Auditors M/s. A. F. Ferguson
& Company, |
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| Chartered
Accountants, Lahore retire and being eligible offer themselves for
re-appointment. |
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| 5. Special Business: |
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| To
pass the following Special Resolutions with or without modification, addition
or deletion :- |
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| a) Alteration of the Memorandum of
Association |
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| Resolved
that Clause V of Memorandum of Association of the Company be and is hereby
substituted with the following: |
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| V. The Authorised Capital of the
Company is Rs. 3,000,000,0007- (Rupees Three Billion Only) divided into
250,000,000 |
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| (Two
Hundred Fifty Million) Ordinary Shares of Rs.10/- each and 50,000,000 (Fifty
Million) Preference Shares of Rs.10/- |
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| each,
with attached thereto respectively such preferential, deferred, qualified or
special rights, privileges or conditions |
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| as
provided in the Articles of Association of the Company, or in accordance with
the Companies Ordinance 1984, and |
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| to
vary, modify or abrogate any such rights, privileges or conditions, in such
manner as may be permitted by the Companies |
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| Ordinance,
1984 and to increase and/or reduce the capital and to divide shares in the
capital into several kinds and |
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| classes
and to consolidate or subdivide the shares and to issue shares for higher or
lower denominations. |
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| b) Alteration of Articles of Association |
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| Resolved
that the 'Articles of Association' of the Company be and is hereby amended as
follows: |
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| 1. In article no. 2, definition of
"The Authority" be substituted with the following: |
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| "The
Commission" means the Securities and Exchange Commission of Pakistan
established under the Securities and Exchange |
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| Commission
of Pakistan Act, 1997. |
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| 2. In article no. 2, after definition of
"The Board" following new definition be inserted: |
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| "The
Central Depository" means a central depository as defined in clause (cc)
of section 2 of the Securities and Exchange Ordinance, |
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| 1969
(XVII of 1969), and registered with the Commission under section 32A of that
Ordinance. |
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| 3. In article no. 2, definition of
"The Dividend" be modified so that after the word 'bonus' the
following may be added: |
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| in
the manner and mode prescribed in these Articles and subject to the right and
privileges attached to the shares in the manner |
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| and
mode provided by these Articles. |
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| 4. In article no. 2, definition of
"The Managing Director" be substituted with the following: |
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| "The
Chief Executive" means the Chief Executive of the Company appointed from
time to time pursuant to these Articles. |
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| 5. In article no. 2, after definition of
"Month" the following new definition be inserted: |
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| Non-
Voting and Non-Participating Ordinary Shares, means ordinary shares of the
Company, subject to the following limitation/restrictions: |
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| a)
Holder of such shares shall not be entitled to receive notice, attend general
meetings and vote at meetings of the shareholders of |
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| the
Company, except as otherwise provided by the Companies Ordinance, 1984 (the
"Ordinance"), whereby the holders of such |
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| shares
would be entitled to vote separately as a class, i.e., provisions with
respect to voting entitlement of shareholders of a |
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| particular
kind or class on matters/issues affecting substantive rights or liabilities
of that particular kind or class of shareholders, |
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| b)
Holder of such shares shall not be entitled to, subject to the right of
dividend as holder of ordinary shares, participate any further |
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| in
profits of the Company. |
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| 6. In article no. 2. after definitions of
"The Office" the following new definition be inserted: |
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| "Preference
Shares" not being Ordinary Shares, means Preferance Shares whether
redeemable in accordance with the provisions |
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| of
these articles subject to section 85 of the ordinance, including but not
limited to, by way of conversion into shares with such right, |
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| restrictions
and privileges as determined by the Company in the manner and mode provided
in these Articles or irredeemable, |
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| cumulative
or otherwise with the rights, privileges and conditions attaching thereto,
within the scope and purview as are provided |
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| by
the Articles, in the manner and mode provided in the Articles. |
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| "Preference
Shareholders" not being Ordinary Shareholders mean, in relation to the
Company, every person to whom the Company |
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| has
allotted, or who becomes the holder of Preference Shares and whose name is
entered in the register of preference shareholder |
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| or
any such document as prescribed by the Ordinance. |
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| 7. In article no. 2, definition of
"S.C.C.P." be deleted and the following new definition be inserted: |
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| "Share"
means share in the share capital of the Company. |
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| 8. Existing article no. 3, be substituted
with the following: |
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| The
Authorised Capital of the Company is Rs. 3,000,000,000/- (Rupees Three
billion only) divided into 250,000,000 (Two hundred |
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| fifty
million only) Ordinary Shares of Rs. 10/- each and 50,000,000 (Fifty million
only) Preference Shares of Rs. 10/- each. |
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| 9. After existing Article no. 3, the
following new articles be inserted: |
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| • Subject to section 90 of the Ordinance
and any rules in that regard made under the Ordinance, and without prejudice
to any special |
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| rights
previously conferred on the holders of any existing shares or class of
shares, any share in the Company may be issued with |
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| different
rights, restrictions and privileges, including but not limited to the
following, namely: |
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| a) different voting rights; voting
rights disproportionate to the paid-up value of shares held; voting rights
for specific purposes |
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| only;
or no voting rights at all; |
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| b) different rights for entitlement of
dividend, right shares or bonus shares or entitlement to receive the notices
and to |
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| attend
the general meetings; |
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| c) rights and privileges for indefinite
period, for a limited specified period or for such periods as may from time
to time be |
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| determined
by the members through special resolution; and |
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| d) different manner and mode of
redemption, including redemption in accordance with the provisions of these
Articles |
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| subject
to section 85 of the Ordinance, including but not limited to, by way of
conversion into shares with such right and |
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| privileges
as determined by the Company in the manner and mode provided in these
Articles. |
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| •• Subject to section nos. 85 and 95 (4)(a)
of the Ordinance, and any rules in that regard made under the Ordinance, the
Company |
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| may
issue shares or any other redeemable security, which are to be redeemed in
the manner and mode provided by these Articles, |
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| including
but not limited to, by way of conversion into shares with such rights and
privileges as determined by the Company in the |
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| manner
and mode provided in these Articles and/or in the offering document pursuant
to which the same were issued/allotted or under |
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| the Ordinance. |
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| 10. Existing Article No.4 be substituted
with the following: |
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| Subject
to provisions of the Ordinance and any rules framed thereunder and these
Articles and subject to any special rights or |
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| privileges
for the time being attached to any issued shares, the shares in the capital
of the Company for the time being, including |
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| any
new shares resulting from an increase in the authorized capital, shall be
under the control of the Directors who may allot or |
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| otherwise
dispose of the same or any of them to such persons, company or other
corporate body on such terms and conditions and |
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| with
such rights and privileges annexed thereto, as the Directors shall determine
and at such times and in such manner as the Directors |
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| think
fit, either at par or at a premium or subject to Section 84 of the Ordinance
at a discount, with the power to the Directors to give |
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| any
person the right to call for and be allotted shares of any kind or class of
the Company at par or at a premium or, subject as |
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| aforesaid,
at a discount, such option being exercisable at such time, and for such
consideration as the Board think fit. Provided that |
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| the
shares in the capital of the Company shall always be issued as fully paid
shares and no shares shall be issued as partly paid |
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| shares. |
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| 11. Existing article no. 6, be substituted
with the following: |
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| Where
at any time the Board decides to increase the issued capital of the Company
by issuing further shares, then any such issue |
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| shall
be made in accordance with section 86 of the Ordinance. |
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| 12. In the Form of Transfer after the words
"Ordinary" the following be inserted: |
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| /Preference/Non-Voting
and Non-Participating |
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| 13. Existing article no. 28, be substituted
by the following: |
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| The
Company may reduce its share capital in the manner and mode provided in the
Ordinance. |
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| 14. In article no. 29, at the start
following be inserted: |
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| Subject
to the provisions of the Ordinance, |
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| Furthermore,
in article no. 29(b), after the word 'Memorandum' full stop be inserted and
the words appearing thereafter in this |
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| sub-article be deleted. |
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| 15. Existing article no. 30, be substituted
with the following: |
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| Whenever
the capital is divided into different kinds or classes of shares, all or any
of the rights and privileges attached to each kind |
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| or
class may, subject to the provisions of Section 108 of the Ordinance, be
modified, commuted, affected, abrogated or dealt with |
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| by
agreement between the Company and any person purporting to contract on behalf
of that kind or class (as the case may be) provided |
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| such
agreement is (a) ratified in writing by the holders of at least three-fourths
in nominal value of the issued shares of the kind or |
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| class
(as the case may be) or (b) confirmed by a Special Resolution passed at an
Annual General Meeting/Extraordinary General |
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| Meeting
of the holders of shares of that kind or class (as the case may be) and all
the provisions hereinafter contained as to General |
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| Meetings,
shall, mutatis mutandis, apply to every such meeting. This Article shall not
by implication curtail the power of modification, |
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| which
the Company would have if this Article were omitted. |
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| 16. Existing article No. 67 be substituted
with the following: |
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| The
remuneration of a Director for performing professional / extra services,
including but not limited to, holding of the office of |
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| chairman,
and the remuneration to be paid to any Director for attending the meetings of
the Directors or a Committee of Directors |
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| shall
from time to time be determined by the Board of Directors. |
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| 17. In article no. 69, after the words 'in
his own name' the following be inserted: |
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| .subject
to the exceptions laid down in proviso to section 187 of the Ordinance |
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| 18. Existing article No.79 be substituted
with the following: |
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| The
Company shall have an office of Chief Executive which shall be appointed,
from time to time, by the Directors who may appoint |
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| a
Director or (subject to Section 201 of the Ordinance) any other person to be
the Chief Executive of the Company for a period not |
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| exceeding
three years and on such terms and conditions as the Directors may think fit,
and such appointment shall be made within |
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| fourteen
days from the date on which the office of Chief Executive falls vacant or
election of directors under Section 178 of the |
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| Ordinance,
as the case may be. If the Chief Executive at any time is not already a
Director he shall be deemed to be a Director of the |
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| Company
notwithstanding that the number of Directors shall thereby be increased and
he shall be entitled to all the rights and privileges |
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| and
shall be subject to all liabilities of the office of Director. Upon the
expiry of his period of office, a Chief Executive shall be eligible |
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| for
reappointment. The Chief Executive may be removed from office in accordance
with the provisions of Section 202 of the Ordinance |
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| notwithstanding
anything contained in these Articles or in any agreement between the Company
and the Chief Executive. |
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| 19. Existing article No. 80 be substituted
with the following: |
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| The
Directors may from time to time entrust to and confer upon the Chief
Executive for the time being such of the powers exercisable |
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| under
these Articles by the Directors as they may think fit, and may confer such
powers for such time, and to be exercised for such |
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| objects
and purposes, and upon such terms and conditions, and with such restrictions
as they think expedient; and may from time |
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| to
time revoke, withdraw, alter or vary all or any of such powers. |
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| 20. Existing article No.81 be substituted
with the following: |
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| A
Chief Executive of the Company shall receive such remuneration as the
Directors may determine and it may be made a term of his |
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| appointment. |
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| 21. Existing article no. 83, be substituted
with the following: |
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| The
quorum for a meeting of the Board shall not be less than one-third of their
number or four, which ever is greater. |
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| 22. The word "Authority" be
substituted with the word "Commission" wherever appearing in
Articles of Association. |
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| 23. The word "Managing Director" be
substituted with the "Chief Executive" wherever appearing in
Articles of Association. |
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| 24. All articles be renumbered accordingly. |
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| c)
Resolved that subject to approval of Securities & Exchange Commission of
Pakistan, the Board of Directors be and are hereby authorized |
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| to
offer and issue 39,621,759 redeemable cumulative preference shares of Rs.
10/- each on the following terms & conditions, in the manner |
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| and
mode provided in section 86 of the Ordinance. |
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| 1. The Preference Shares will be offered to
the existing shareholders of the Company at the Ratio of 26 (Twenty Six)
Preference |
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| Shares
for every 100 (One Hurldred) Ordinary Shares held by them as on the date to
be announced separately after approval of |
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| the
Securities & Exchange Commission of Pakistan. |
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| 2. The preference Shareholders shall not be
entitled to: |
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| a) receive notice, attend general meetings
of the Company and vote at meetings of the shareholders of the Company,
except |
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| as
otherwise provided by the Companies Ordinance, 1984 (the
"Ordinance"), whereby the holders of such sahres would |
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| be
entitled to vote seperately as a class, i.e., with respect to voting
entitlement of Preference Shareholders on matters/issues |
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| affecting
substantive rights or liabilities of Preferance Shareholders. |
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| |
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| b) bonus or right shares, in case the
Company/Directors decide to increase the capital of the Company by issue of
further |
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| shares. |
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| |
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| c) participate any further in profit or
assets of the Company, except the right of dividend being attached to the
preference |
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| shares
as per this resolution. |
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| 3. The Company may at its option convert the
Preference Shares into non-voting and non-participating ordinary shares (as
defined |
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| in
the Articles of Association of the Company), at the expiry of the period of
four (4) years after issuance/allotment to be converted |
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| at
face value of Rs. 10/- each, if the same are not redeemed. |
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| 4. To be redeemed after hour (4) years of
assuance/allotment, if conversion option is not offered by the Company to
Preference |
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| Shareholders,
as per clause 3 above. |
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| 5. Prefered Dividend @ 10.00% per annum on
cumulative basis. If the Company does not pay dividend anually the rate
of |
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| dividend
will increase as follows; |
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| • if dividend paid in the second year (no
dividend paid in the first year) rate of dividend to be 10.50% per annum for
the subsequent |
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| years. |
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| • if dividend paid in third year (no
dividend paid in the first two years) rate of dividend to be 11.95% per annum
in 3rd and 4th |
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| years. |
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| • if dividend paid in the fourth year (no
dividend paid in the first three years) rate of dividend to be 13.02% per
annum in 4th |
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| year. |
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| Further
Resolved that Mrs. Naz Mansha, Chairman / Chief Executive / Director, (the
"Authorised Officer"), or such one or |
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| |
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| more
persons as may from time to time be specifically designated by the Authorised
Officer for the purpose, be and is hereby |
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| authorized
to undertake arrangements for issuance of preference shares and settle terms
& conditions with the arranger(s), |
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| underwriters(s),
and any and all other party(ies) concerned as and when necessary in this
regard, and to take such action as he |
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| may
consider necessary or expedient with a view to obtaining their consent and
for facilitating the eventual issue of all sanctions, |
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| approvals,
and permissions that may be required in connection with the aforesaid matter
and in that connection to do all such acts, |
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| deeds
and things as they may deem necessary. |
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| |
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| 6. To discuss any other business that may
be brought forward with the permission of the Chair. |
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| By order of the Board |
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| LAHORE
( KHALID MAHMOOD CHOHAN ) |
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| SEPTEMBER
26, 2002
COMPANY SECRETARY |
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| |
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| STATEMENT
UNDER SECTION 160(i)(b) OF THE COMPANIES ORDINANCE, 1984 |
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| Alteration
of the Memorandum of Association and Articles of Association of the Company
so that the Company may, inter alia, avail the benefit |
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| of
amendent made in section 90 of the Companies Ordinance, 1984 (the
"Ordinance") by Finance Act (IV of 1999), whereby a Company |
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| has
been allowed to issue / allot different kinds and classes of shares, with
different rights, restrictions and privileges attached thereto as |
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| per
the Articles of Association. The proposed amendments in the Memorandum and
Articles of Association may, inter alia, enable the Company |
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| to
issue shares of different kinds and calsses as per the provisions of the
Ordinance and the Companies Share Capital (Variation in Rights & |
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| Privileges)
Rules, 2000 and Articles of Association of the Company. |
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| |
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| 1.
The Board of Directors have recommended that the Company's Memorandum of
Association and Articles of Association be |
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| amended
in order to facilitate the aforesaid purpose and in addition thereto by
taking into account the several changes made in |
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| the
Companies Ordinance, 1984. |
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| |
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| 2.
The preference shares are to be issued by the Company under the provisions of
the Ordinance and the Companies Share Capital |
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| (Variation
in Rights and Privileges) Rules-2000, in terms of the Memorandum and Articles
of Association (as amended), with |
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| such
rights, restrictions and privileges within the scope of rights, restriction
and pirvileges provided in the Articles of Association |
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| of
the Company, in the manner and mode provided in the Articles of Association
of the Company. |
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| |
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| 3.
The subscription of Preference Share will be utilized for refinancing of
Company's debts carrying higher rate of interest. |
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| |
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| 4.
Faysal Bank Limited has been given consent, in principle and subject to
certian terms and conditions, to arrange under writing |
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| for
the entire issue and will structure and market the public issue of Preference
Shares. |
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| |
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| 5.
The Directors of the Company have no interest in the special bussiness and /
or special resolution save to the extent of their |
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| |
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| shareholdings
and remuneration in the Company. |
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| 6.
A copy of the Memorandum and Articles of Association of the Company as on
date and also indicting the proposed amendments |
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| is
available for inspection at the registered office of the Company from 9.00
A.M. to 5.00 P.M. on any working day. |
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| |
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| NOTES: |
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| 1.
Share transfer books of the company will remain closed for entitlement of
Bonus Shares from 23-10-2002 to 31-10-2002 (both |
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| days
inclusive). The Physical Scrips Transfers/CDS Transaction IDs received in
order at Nishat House, 53-A, Lawrence Road, |
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| Lahore
upto 1:00 p.m. on October 22,2002 will be considered in time for entitlement
of 10% Bonus Shares and attending of |
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| meeting. |
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| |
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| 2.
The book closure dates for entitlement of Preference Shares will be announced
separately after approval of Securities & Exchange |
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| Commission of Pakistan. |
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| |
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| 3.
A member eligible to attend and vote at this meeting may appoint another
member his / her proxy to attend and vote instead of |
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| him/her.
Proxies in order to be effective must reach the Company's Registered office
not less than 48 hours before the time for |
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| holding
the meeting. Proxies of the Members through CDC shall be accompanied with
attested copies of thier NIC.The shareholders |
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| through
CDC are requested to bring original NIC, Account Number and Participant
Account Number to produce at the time of |
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| attending the meeting. |
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| |
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| 4.
Shareholders are requested to immediately notify the change in address, if
any. |
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| |
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| DIRECTORS' REPORT |
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| |
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| The
Directors feel pleasure in presenting the 24th annual report, along with
annexed profit & loss account, balance sheet, cash flow statement |
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| and
changes in equity together with notes forming part thereof, for the year
ended 30th June 2002. |
|
| |
|
| MARKET
REVIEW AND PLANT PERFORMANCE |
|
| |
|
| There
was a general perception that in the year under review the demand of cement
will get a boost on account of reconstruction in Afghanistan |
|
