|
|
|
|
|
|
|
|
|
|
|
|
| GHULAM
FARUQUE GROUP |
|
|
| Annual
Report 1996 |
|
| CHERAT |
|
| Cherat
Cement Company Limited |
|
|
| CONTENTS |
|
Pages |
|
|
|
|
|
| GRAPHS
OF PROGRESS (LIST) |
|
|
2 |
|
| COMPANY
INFORMATION |
|
|
3 |
|
| NOTICE
OF MEETING |
|
|
4 |
|
| DIRECTORS'
REPORT TO THE MEMBERS |
|
5 |
|
| GRAPHS |
|
|
|
8 |
|
| YEARWISE
STATISTICAL SUMMARY |
|
|
11 |
|
| RATIO
ANALYSIS |
|
|
12 |
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
13 |
|
| BALANCE
SHEET |
|
|
14 |
|
| PROFIT
& LOSS ACCOUNT |
|
|
16 |
|
| CASH
FLOW STATEMENT |
|
|
17 |
|
| NOTES
TO THE ACCOUNTS |
|
|
18 |
|
| PATTERN
OF SHAREHOLDING |
|
|
37 |
|
|
|
|
|
|
|
| GRAPHS
OF PROGRESS |
|
| WEALTH
GENERATED & DISTRIBUTED |
|
|
8 |
|
| DEVELOPMENT
OF PROFIT |
|
|
9 |
|
| DEVELOPMENT
OF BALANCE SHEET TOTAL |
|
9 |
|
| STATUS
OF LOANS |
|
|
9 |
|
| PAYMENT
OF FINANCIAL CHARGES |
|
|
9 |
|
| CEMENT
SALES (IN TONNES) |
|
|
10 |
|
| RETURN
ON EQUITY (INCLUDING RESERVES) |
|
10 |
|
| CLINKER/CEMENT
PRODUCTION |
|
|
10 |
|
|
|
|
| COMPANY
INFORMATION |
|
|
|
|
| BOARD
OF DIRECTORS |
|
|
Chairman |
|
| Mr.
Mohammed Faruque |
|
Chief Executive/Managing
Director |
|
| Mr.
Zahid Faruque |
|
|
Director |
|
| Mr.
Iqbal Faruque |
|
|
Director |
|
| Mr.
Ahmad Faruque |
|
|
Director |
|
| Mr.
Mahmood Faruque |
|
|
Director |
|
| Mr.
Akbarali Pesnani |
|
|
| Sahibzada Mirza Mubarak Ahmad |
|
Director |
|
| Mr.
Razi-ur-Rahman Khan |
|
|
| (Representing
NIT) |
|
|
|
|
|
|
|
|
| COMPANY
SECRETARY |
|
| Rauf
Jafrani |
|
|
| AUDITORS |
|
| Sidat
Hyder Qamar Maqbool & Co. |
|
|
| BANKERS |
|
| Muslim
Commercial Bank Ltd. |
|
| United
Bank Ltd. |
|
| ABN
Amro Bank |
|
| Citibank
N.A. |
|
| American
Express Bank Ltd. |
|
| ANZ
Grindlays Bank plc |
|
| Banque
Indosuez |
|
| Bank
of America |
|
| National
Bank of Pakistan |
|
| Allied
Bank of Pakistan Limited |
|
| REGISTERED
OFFICE |
|
| Modern
Motors House, |
|
| Beaumont
Road, |
|
| Karachi-75530. |
|
|
| FACTORY |
|
| Village
Lakrai, |
|
| P.O.
Box 28, |
|
| Nowshera. |
|
|
| SALES
OFFICE |
|
| 1st
Floor, Betani Arcade, |
|
| Jamrud
Road, |
|
| Peshawar. |
|
|
| REGIONAL
OFFICE |
|
| 3,
Sunderdas Road, |
|
| Lahore. |
|
|
| CORPORATE
OFFICE |
|
| No.
7, Mezzanine Level, |
|
| Razia
Sharif Plaza, |
|
| 92,
Blue Area, |
|
| Islamabad. |
|
|
| NOTICE
OF MEETING |
|
| NOTICE
IS HEREBY GIVEN that the Fifteenth Annual General Meeting of this Company
will be held |
|
| on
Thursday, 26th December 1996 at 5.00 p.m. at the Registered Office of the
Company at Modern |
|
| Motors
House, Beaumont Road, Karachi, to transact the following business: |
|
|
| 1.
To confirm the minutes of the last Annual General Meeting held on 16th
November, 1995. |
|
|
| 2.
To receive and consider audited accounts of the company for the year ended on |
|
| June
30, 1996 with the Directors' & the Auditors' Report thereon. |
|
|
| 3.
To declare dividend of Rs. 3/= per share (@ 30%) for the financial year ended
on June 30, 1996 |
|
| as recommended by the Directors. |
|
|
| 4.
To appoint auditors for the ensuing year and to fix their remuneration. |
|
|
| By
Order of the Board |
|
| RAUF
JAFRANI |
|
| Company
Secretary |
|
| Karachi,
5th November, 1996 |
|
|
| NOTE: |
|
| 1.
A member eligible to attend and vote at the Annual General Meeting may
appoint another member |
|
| as
his/her proxy to attend and vote in his/her stead. Proxies to be effective
must be in writing and |
|
| must
be received by the Company 48 hours before the Meeting. |
|
|
| 2.
The register of members will be closed from Thursday, 12th December to
Thursday, 26th December |
|
| 1996
inclusive, and no transfers will be registered during that time. Shares
received in order at the |
|
| registered
office of the Company at the close of business on Wednesday 11th December, |
|
| 1996
will be treated in time for entitlement of the above dividend. |
|
|
| 3.
The shareholders are requested to notify the Company immediately the change
in their address, |
|
| if any. |
|
|
|
| DIRECTORS'
REPORT TO THE MEMBERS |
|
| for
the year ended 30th June 1996 |
|
|
| Dear
Shareholders, |
|
| Your
directors have pleasure in presenting to you the 15th annual report on the
working results of the |
|
| company
together with the Audited Accounts for the year ended 30th June, 1996. |
|
|
| PRODUCTION: |
|
| Since
completing the expansion to our plant in March 1995 there has been
substantial increase in the |
|
| production
capacity as is reflected by the following figures. |
|
|
|
|
1995-96 |
1994-95 |
% Change |
|
|
|
Tons |
Tons |
|
|
| Clinker |
|
712,492 |
423,436 |
68.26 |
|
| Cement |
|
715,744 |
437,561 |
63.58 |
|
|
| As
the year 1994-95 did not have the benefit of full year's production of the
extended plant capacity, the |
|
| figure
may not be strictly comparable, but the figures for 1995-96 definitely
reflect an enhancement in plant |
|
| capacity
even higher than what was guaranteed under the contract i.e. 660,000 tons of
Clinker per annum. |
|
|
| SALES
AND MARKETING: |
|
| During
the year under review we booked orders for 713,647 tons. Together with
pending |
|
| orders
from the last year, we were able to dispatch 721,055 tons of Cement. In other
word the total |
|
| production
of cement for the current year, was utilised to meet the demand. |
|
|
| Since
we are aiming for still high production with the expanded capacity vigorous
efforts are bain9 made |
|
| to
increase our share of market both in NWFP and Punjab. We are happy to report
that these efforts have |
|
| already
started showing positive results. |
|
|
| OPERATING
RESULTS: |
|
| The
sales revenues for the year amounted to Rs. 2,212.612 million. Out of this
Rs. 534.132 million was |
|
| paid
for excise duty and Rs. 310.155 million towards sales tax, and accordingly
net sales comes to |
|
| Rs.
1,368.325 million compared to Rs. 952.996 million for the last year. The cost
of sales comes to |
|
| Rs.
977.747 million which leaves us a gross profit of Rs. 390.578 million.
Deduction are made from the |
|
| gross
profit on account of administration expenses Rs. 28.817 million, selling and
distribution expenses |
|
| Rs.
27.919 million, financial charges Rs. 85.753 million, WPPF Rs. 14.405
million, WWF Rs. 4.084 million |
|
| and
other charges Rs. 3.159 million. After accounting for other income amounting
to Rs. 47.167 million the |
|
| net
deductions from the gross profit comes to Rs. 116.97 million. This gives us a
net profit before tax Rs. |
|
| 273.608
million (20% of net sales) for the year. Provision has been made for the
taxation at Rs. 107.626 |
|
| million,
thus leaving us a net profit after tax of Rs. 165.982 million (12.13% of net
sales) for the year. The |
|
| total
contribution to the exchequer on account of Excise Duty, Sales Tax and Income
Tax comes to |
|
| Rs.
951.913 million (43.02% of gross sales) compared to Rs. 658.762 million for
1994-95. Other |
|
| comparative
figures are reflected in the Financial Statements. |
|
|
| We
wish to explain that marginal increase in profit for the year under review as
compared to last year |
|
| despite
increase in sales is mainly due to pressure on selling prices, charge for
depreciation for extended |
|
| plant
and financial charges for new loans against plant extension, which upto last
year were capitalized. |
|
|
| APPROPRIATION
OF PROFIT: |
|
| To
the current year's profit of Rs. 165.982 million addition has been made of
Rs. 32.288 million on account |
|
| of
profit brought forward from last year. The total profit thus available for
appropriation amounts to Rs. |
|
| 198.27
million. |
|
|
| Your
Directors propose following appropriation of profit: |
|
|
|
Rupees |
|
|
|
(Million) |
|
|
| Net
profit for the year |
|
165.98 |
|
| Add:
unappropriated profit brought forward |
|
32.29 |
|
|
|
|
|
|
198.270 |
|
|
======== |
|
|
|
| Appropriation: |
|
| Proposed
cash dividend @30% |
|
144.40 |
|
| Transfer
to General Reserve |
|
25.00 |
|
| Balance
to be Carried forward |
|
28.87 |
|
|
|
|
-------- |
|
|
|
|
|
198.27 |
|
|
======== |
|
|
|
| DEBT
OBLIGATION: |
|
| We
are happy to report that we continue to meet our financial commitments and
debt obligations well in |
|
| time. |
|
|
| FUTURE
OUT LOOK |
|
| As
reported last year the continued expansion of cement industry, without
corresponding increase in |
|
| economic
activities in the country rather its slowing down and at the same time the
delay or deferment of |
|
| development
project by the government is having serious repercussion on the industry as a
whole. We are |
|
| however
fortunate to have been able to do much better than the industry average and
hope to do so in |
|
| foreseeable
future also. |
|
|
| HUMAN
RESOURCE DEVELOPMENT: |
|
| Following
up on the concept of human resources development, a number of staff members
including |
|
| executives
were sent to various training courses/programmes and seminars to acquire
further knowledge |
|
| in
their respective fields. |
|
|
| AUDITORS: |
|
| The
present auditors M/s. Sidat Hyder Qamar Maqbool & Co., Chartered
Accountants, retire and being |
|
| eligible
offer themselves for reappointment. |
|
|
| ACKNOWLEDGEMENT: |
|
| In
the end we wish to express our thanks to all the financial institutions
including the French Banks who |
|
| have
been associated with the project, for their support and cooperation. We would
also like to thank |
|
| our
dealers and customers for their continued association and support. Our
special thanks are due to our |
|
| team
of dedicated managers and other executives, supervisors and hard working
workers, who continue |
|
| to
put in their best efforts for achieving optimum results year after year. |
|
|
| Thank
you, |
|
|
| On
behalf of the Board |
|
| Cherat
Cement Company Limited |
|
|
| (MOHAMMED
FARUQUE) |
|
| CHAIRMAN |
|
|
| Karachi:
5th November 1996 |
|
|
| YEARWISE
STATISTICAL SUMMARY |
|
|
(Rs. in million) |
|
|
|
1996 |
1995 |
1994 |
1993 |
1992 |
|
|
|
|
|
|
|
|
| ASSETS
EMPLOYED |
|
|
|
|
| Fixed
Assets |
|
1,378 |
1,471 |
1,453 |
1,236 |
1,059 |
|
|
|
|
|
|
|
|
|
|
|
| Investments
and |
|
|
|
|
| Long-term
Advances |
|
|
|
|
| &
Deposits |
|
14 |
14 |
12 |
11 |
9 |
|
|
|
|
|
|
|
| Current
Assets |
|
638 |
427 |
376 |
357 |
242 |
|
|
|
|
--------- |
--------- |
--------- |
--------- |
--------- |
|
|
| Total
Assets Employed |
2,030 |
1,912 |
1,841 |
1,604 |
1,310 |
|
|
|
|
======== |
======== |
======== |
======== |
======== |
|
|
|
|
|
|
|
| FINANCED
BY |
|
|
|
|
| Shareholders'
equity |
885 |
864 |
704 |
621 |
457 |
|
|
| long-term
Liabilities |
434 |
544 |
633 |
572 |
520 |
|
|
| Deferred
Liabilities |
206 |
165 |
42 |
40 |
31 |
|
|
| Current
Liabilities |
|
505 |
339 |
462 |
371 |
302 |
|
|
|
|
--------- |
--------- |
--------- |
--------- |
--------- |
|
|
| Total
Funds Invested |
2,030 |
1,912 |
1,841 |
1,604 |
1,310 |
|
|
|
|
======== |
======== |
======== |
======== |
======== |
|
|
|
|
|
|
|
| TURNOVER
& PROFIT |
|
|
|
|
| Turnover
(Net) |
|
1,368 |
953 |
530 |
763 |
630 |
|
|
| Operating
Profit |
|
334 |
337 |
143 |
309 |
197 |
|
|
| Profit
before Taxation |
274 |
289 |
122 |
277 |
157 |
|
|
| Profit
after Taxation |
166 |
159 |
83 |
164 |
73 |
|
|
| Dividend |
|
|
144 |
96 |
64 |
64 |
33 |
|
|
| Transfer
to Reserves |
25 |
55 |
15 |
100 |
40 |
|
|
| Profit
c/f |
|
29 |
32 |
24 |
20 |
20 |
|
|
|
|
|
| Contd. |
|
|
|
|
|
(Rs. in million) |
|
|
|
1991 |
1992 |
1989 |
1988 |
1987 |
|
|
|
| ASSETS
EMPLOYED |
|
| Fixed
Assets |
|
861 |
614 |
564 |
594 |
621 |
|
|
|
|
|
| Investments
and |
|
|
| Long-term
Advances |
|
|
| &
Deposits |
|
73 |
50 |
92 |
92 |
45 |
|
|
|
| Current
Assets |
|
154 |
225 |
153 |
102 |
80 |
|
|
|
--------- |
--------- |
--------- |
--------- |
--------- |
|
|
| Total
Assets Employed |
1,088 |
889 |
809 |
788 |
746 |
|
|
|
======== |
======== |
======== |
======== |
======== |
|
|
|
|
| FINANCED
BY |
|
|
| Shareholders'
equity |
385 |
314 |
303 |
294 |
230 |
|
| long-term
Liabilities |
438 |
257 |
266 |
296 |
326 |
|
| Deferred
Liabilities |
2 |
-- |
-- |
-- |
-- |
|
| Current
Liabilities |
|
263 |
318 |
240 |
198 |
190 |
|
|
|
--------- |
--------- |
--------- |
--------- |
--------- |
|
|
| Total
Funds Invested |
1,088 |
889 |
809 |
788 |
746 |
|
|
|
======== |
======== |
======== |
======== |
======== |
|
|
|
|
| TURNOVER
& PROFIT |
|
|
| Turnover
(Net) |
|
550 |
466 |
373 |
471 |
484 |
|
| Operating
Profit |
|
130 |
101 |
101 |
169 |
120 |
|
| Profit
before Taxation |
85 |
55 |
54 |
114 |
58 |
|
| Profit
after Taxation |
70 |
55 |
54 |
115 |
57 |
|
| Dividend |
|
|
25 |
45 |
45 |
50 |
40 |
|
| Transfer
to Reserves |
40 |
20 |
15 |
50 |
15 |
|
| Profit
c/f |
|
20 |
15 |
25 |
31 |
16 |
|
|
| RATIO
ANALYSIS ON ACCOUNTS |
|
| for
the year ended 30th June 1996 |
|
|
|
|
1996 |
1995 |
|
|
| PROFITABILITY: |
|
|
|
|
|
|
| Gross
Profit (percentage) |
|
|
28.54 |
44.75 |
|
|
| Operating
Profit (percentage) |
|
|
24.40 |
35.32 |
|
|
| Profit
Before Tax (percentage) |
|
|
20.00 |
30.34 |
|
|
| Net
Profit After Tax (percentage) |
|
|
12.13 |
16.75 |
|
|
| Growth
in Net Profit After Tax (percentage) |
|
|
3.97 |
92.43 |
|
|
| Net Profit to Share Holders'
Equity |
|
|
|
|
|
| (Average
after tax) (percentage) |
|
|
18.98 |
20.37 |
|
|
| E.P.S
(Before Tax) |
|
|
|
568 |
7.51 |
|
|
| E.P.S
(After Tax) |
|
|
|
3.45 |
4.15 |
|
|
| Net Profit to Total Assets |
|
|
|
|
|
| (Average
after tax) (percentage) |
|
|
842 |
8.51 |
|
|
| Increase
in Sales (Gross percentage) |
|
|
4,927 |
96.68 |
|
|
| Increase
in Sales (Net percentage) |
|
|
4,358 |
79.91 |
|
|
| Materials
% of Net Sales |
|
|
1,813 |
12.21 |
|
|
| Labour
% of Net Sales |
|
|
383 |
4.50 |
|
|
| Other
Cost of Sales Expenses % of Net Sales |
|
|
4,949 |
38.54 |
|
|
| Raw
& Packing Material as % of Cost of Sales |
|
25.37 |
22.09 |
|
|
| Administrative
Expenses % of Net Sales |
|
|
210 |
2.31 |
|
|
| Selling
Expenses % of Net Sales |
|
|
204 |
1.70 |
|
|
| Income
Tax % of Net Sales |
|
|
7.87 |
13.59 |
|
|
| Financial, other charges, |
|
|
|
|
|
| (other
income) % of Net Sales |
|
|
4.40 |
4.98 |
|
|
|
| SHORT
TERM SOLVENCY: |
|
| Working
Capital Ratio |
|
1.6:1 |
1.86:1 |
|
| Acid
Test Ratio |
|
|
1.41:1 |
1.41:1 |
|
| Working
Capital Turn Over (Net Sales) times |
|
5.74 |
4.85 |
|
| Inventory
Turn Over/times |
|
17.86 |
25.72 |
|
|
| OVERALL
VALUATION AND ASSESSMENT: |
|
| Number
of Time Interest Earned |
|
4.19 |
6.65 |
|
| Return on Capital Employed
before tax |
|
|
|
| (Average
in percentage) |
|
18.05 |
19.60 |
|
| P.E
Ratio (Before tax) |
|
4.75 |
6.66 |
|
| Book
Value Per Share |
|
18.39 |
22.40 |
|
| Debt
Ratio |
|
|
0.56:1 |
0.55:1 |
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of CHERAT CEMENT COMPANY LIMITED as at |
|
| 30th
June 1996 and the related profit and loss account and cash flow statement,
together with the notes |
|
| forming
part thereof, for the year then ended and we state that we have obtained all
the information |
|
| and
explanations which to the best of our knowledge and belief were necessary for
the purposes of |
|
| our
audit and, after due verification thereof, we report that: |
|
|
| a)
in our opinion, proper books of account have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| b)
in our opinion: |
|
|
| i)
the balance sheet and profit and loss account, together with the notes
thereon, have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984 and are in agreement with
the |
|
| books
of account and are further in accordance with the accounting policies
consistently |
|
| applied; |
|
|
|
|
| ii)
the expenditure incurred during the year was for the purpose of the Company's
business; and |
|
|
| iii)
the business conducted, investment made and the expenditure incurred during
the year were |
|
| in
accordance with the objects of the Company; |
|
|
| c)
in our opinion and to the best of our information and according to the
explanations given to us, the |
|
| balance
sheet and the profit and loss account, together with the notes forming part
thereof, give the |
|
| information
required by the Companies Ordinance, 1984 in the manner so required and
respectively |
|
| give
a true and fair view of the state of the Company's affairs as at 30th June
1996 and of the |
|
| profit
and the cash flow statement for the year then ended; and |
|
|
| d)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| SIDAT
HYDER QAMAR MAQBOOL & CO. |
|
| CHARTERED
ACCOUNTANTS |
|
|
| Karachi:
5th November 1996 |
|
|
| BALANCE
SHEET AS |
|
| AT
30TH JUNE 1996 |
|
|
Note |
1996 |
1995 |
|
|
|
(Rupees '000) |
|
|
| SHARE
CAPITAL |
|
| Authorised |
|
|
| 50,000,000
(1995: 50,000,000) ordinary |
|
|
shares of Rs. 10/- each |
|
500,000 |
500,000 |
|
|
|
========= |
========= |
|
|
|
|
| Issued,
subscribed and paid-up |
|
3 |
481,324 |
385,059 |
|
| RESERVES |
|
|
|
4 |
403,873 |
478,553 |
|
|
--------- |
--------- |
|
|
|
|
885,197 |
863,612 |
|
|
|
|
|
|
| REDEEMABLE
CAPITAL |
|
|
5 |
138,392 |
157,409 |
|
|
|
|
|
|
|
| LONG-TERM
LOANS |
|
|
6 |
211,578 |
269,095 |
|
|
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
| TO
FINANCE LEASE |
|
7 |
43,001 |
43,512 |
|
|
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
8 |
205,558 |
164,836 |
|
|
| LONG-TERM
DEPOSITS - unsecured |
|
9 |
41,626 |
73,647 |
|
|
| CURRENT
LIABILITIES |
|
| Short-term
finance |
|
10 |
65,021 |
71,179 |
|
| Current
maturity |
|
11 |
105,135 |
108,806 |
|
| Creditors,
accrued and other liabilities |
|
12 |
126,197 |
152,616 |
|
| Unclaimed
dividend |
|
|
472 |
494 |
|
| Taxation |
|
|
|
63,500 |
6,500 |
|
| Proposed
dividend |
|
|
144,397 |
- |
|
|
--------- |
--------- |
|
|
|
|
504,722 |
339,595 |
|
| Contingencies
and commitments |
|
13 |
|
|
--------- |
--------- |
|
|
|
2,030,074 |
1,911,706 |
|
|
========= |
========= |
|
|
|
