| Pakland Cement Limited |
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| (Audited
Report for the year ended June 1996) |
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|
Contents |
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| Company
Information |
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|
3 |
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| Notice
of Meeting |
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|
4 |
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| Report
of the Directors |
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|
5 |
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| Auditors'
Report to the Members |
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8 |
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| Balance
Sheet |
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|
10 |
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| Profit
and Loss Account |
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12 |
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| Cash
Flow Statement |
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13 |
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| Notes
to the Accounts |
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|
15 |
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| Pattern
of Holding of Shares |
|
36 |
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| Statement
and Report under sub-section |
|
| (1)
(e), (f) and (g) of Section 237 |
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37 |
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| Auditors
Report to the Members of Saadi Cement Ltd |
38 |
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| Balance
Sheet and Notes of Saadi Cement Limited |
40 |
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| Form
of Proxy |
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Company Information |
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| BOARD
OF DIRECTORS |
Tariq Mohsin Siddiqui |
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|
(Chairman & Chief
Executive) |
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|
Ather Waheed Khan |
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|
Khalid Mohsin Siddiqui |
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|
Muhammad Salim Arif |
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|
Shamira Mushtaq Siddiqui |
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|
Zahida Khatoon |
|
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|
Razi-ur-Rahman Khan
(Nominee - NIT) |
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|
Syed Ghulam Abbas
(Nominee - NDFC) |
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|
Muhammad Aqueel Abbasi |
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|
(Alternate to Ather
Waheed Khan) |
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| COMPANY
SECRETARY |
Yazdi J. Mehta |
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| REGISTERED
OFFICE |
Trade Centre, A-14 |
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Block 7/8, KCHS |
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|
Shahra-e-Faisal |
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Karachi-75350 |
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| FACTORY |
|
Deh Dhando, Dhabeji |
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| BANKERS |
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AI Faysal Investment Bank
Limited |
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|
Allied Bank of Pakistan
Limited |
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ANZ Grindlays Bank |
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Askari Commercial Bank
Limited |
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Citibank N.A. |
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Crescent Investment Bank
Limited |
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Faysal Bank Limited |
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Habib Bank Limited |
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National Bank of Pakistan |
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National Development
Finance Corporation |
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Standard Chartered Bank |
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Union Bank Limited |
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| AUDITORS |
|
Ford, Rhodes, Robson,
Morrow |
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Chartered Accountants |
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Finlay House |
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I. I. Chundrigar Road |
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|
Karachi |
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|
Khan H.R. & Co. |
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|
Chartered Accountants |
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328, Muhammadi House |
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I. I. Chundrigar Road |
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|
Karachi |
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Notice of Meeting |
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| Notice
is hereby given that the 17th Annual General Meeting of Pakland Cement
Limited will be |
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| held
at Beach Luxury Hotel, Maulvi Tamizuddin Khan Road, Karachi on Wednesday,
29th January |
|
| 1997,
at 2:00 p.m. to transact the following business: |
|
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| 1.
To confirm the minutes of the Extraordinary General Meeting held on 26th
September |
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| 1996. |
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|
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| 2.
To receive and consider the Audited Accounts for the year ended 30th June
1996 and the |
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| report
of the directors and auditors thereon. |
|
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| 3.
To appoint auditors and to fix their remuneration. |
|
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| 4.
To transact any other business with the permission of the chair. |
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|
By Order of the Board |
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| Karachi |
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|
Yazdi J. Mehta |
|
| 5th
January 1997 |
|
Company Secretary |
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| Notes: |
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| 1.
Share Transfer Books of the Company will remain closed from 23rd January 1997
to 29th |
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| January
1997, both days inclusive. |
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|
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| 2.
Any member of the Company entitled to attend and vote may appoint another
member as |
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| his/her
proxy to attend and vote instead of him/her. |
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|
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| 3.
Proxies must be received at the Registered Office of the Company not less
than 48 hours |
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| before
the time of holding the meeting. |
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|
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| 4.
Members are requested to promptly notify the Company of any change in their
addresses. |
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|
Report of the Directors |
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|
for the year ended 30th
June 1996 |
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| The
Directors of the Company are pleased to present their report together with
the audited |
|
| accounts
of the Company for the year ended 30th June 1996. |
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| During
the year under review, the Company earned an operating profit of Rs. t38
million on a |
|
| turnover
of Rs.966 million. After accounting for depreciation and financial charges
the profit after |
|
| tax
was Rs.45.8 million. |
|
|
| Appropriation
of Profit |
|
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| The
appropriation of the available profit is recommended as under: |
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|
(Rs.'000) |
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|
|
|
| Net
profit for the year |
|
45,846 |
|
| Unappropriated
profit brought forward |
|
4,089 |
|
|
|
|
-------- |
|
|
|
|
49,935 |
|
| Transfer
to general reserve |
|
45,000 |
|
|
|
|
-------- |
|
| Unappropriated
profit carried forward |
|
4,935 |
|
|
======== |
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|
|
|
| Due
to the fact that the Company is undergoing a major expansion, the Directors
of the Company |
|
| feel
that the entire profit should be retained within the business and hence no
dividend is being |
|
| proposed. |
|
|
| Production
and Sales |
|
| Production
of clinker for the year ended 30th June 1996 was 501,101 tons. This
corresponds to a |
|
| corresponding
production figure of 474,782 tons for the year 1994-95. |
|
|
| The
law and order situation in Karachi continues to create a problem for cement
marketing in our |
|
| base
market. However, your Company's brand commands a premium price in the market
and is |
|
| one
of the best established brands in Pakistan. Due to this we were able to sell
530,033 tons of |
|
| cement
which is more than the entire production for the year of 527,613 tons. |
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|
| Overview
of the Cement Industry |
|
| The
cement industry is going through a phase where major capacity expansions are
taking place. |
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| Due
to these expansions, the prices of cement in the country have remained
constant and have |
|
| not
risen in line with the various costs of production mainly fuel oil and
electricity. With increase in |
|
| input
costs and insignificant increases in selling prices, the gross margins of all
cement |
|
| manufacturers
have come under pressure. |
|
|
| Demand
for cement is determined by economic activities specially in the housing
sector. The |
|
| expected
increase in demand did not materialize due to uncertain political conditions
within the |
|
| country
which resulted in a slow-down in economic activity. However, the export
market offers |
|
| major
potential and this has already been exploited by one manufacturer in the
South. The export |
|
| prices
available are almost the same as those available in the local markets on a
net retention |
|
| basis.
The Cement Manufacturers Association has approached the GOP for reduction in |
|
| government
levies on inputs for cement which is exported. We are confident that a
positive |
|
| response
will be received. It is estimated that within the next 3 years cement exports
can earn the |
|
| country
approximately US$ 250 million per year. |
|
|
| Your
company plans to export cement in the near future specially after its
expansion comes on |
|
| stream.
Various markets have been identified and representative offices have been
established |
|
| in
two countries within the Asia-Pacific region. We are confident that with our
quality product the |
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| export
market will yield very favourable returns. |
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|
| Expansion
Project |
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| The
expansion project is progressing satisfactorily and we expect commercial
production in mid |
|
| 1997.
The progress on the project is as follows: |
|
|
|
| Civil Works |
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| More
than 80% of the civil works have been completed. In certain areas 100% of the
civil |
|
| works
have been completed. |
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|
|
| Plant
and Equipment |
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| 70%
of the imported plant and machinery has arrived in Pakistan. The balance is |
|
| expected
to be delivered by March '97. Local fabrication has been completed to the |
|
| extent
of 85%. |
|
|
| Erection
and Commissioning |
|
| Erection
contracts have been awarded to the various contractors and some of these
contractors |
|
| have
been mobilized at site. It is expected that erection will be completed by
June '97. |
|
|
|
| Investment
in Saadi Cement Limited |
|
| As
you are aware your company has invested an amount of Rs.800 million in the
equity of Saadi |
|
| Cement
Limited which is a grass root level project comprising of two cement
manufacturing lines. |
|
| The
project is at an advance stage of implementation and Line-1 is expected to be
in commercial |
|
| production
by the second quarter of 1997. |
|
|
| Saadi
Cement Limited will be a listed company and approval from the Karachi Stock
Exchange |
|
| (Guarantee)
Limited for listing has already been obtained. It is estimated that the
Company will |
|
| offer
its shares to the public in the first quarter of 1997. |
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|
|
| Social
Responsibilities |
|
|
| By
the grace of ALLAH, your company continues to honour its social
responsibilities towards the |
|
| community.
Pakland Cement Limited over the last two years has pioneered the concept of |
|
| sponsoring
various individuals from all walks of life for Haj. This sponsorship is
awarded to |
|
| individuals
who do not have the financial resources to perform Haj themselves. This
sponsorship |
|
| has
been continued in the current year. The Company also continues to make
contributions, |
|
| towards
various social and charitable causes. |
|
|
| Personnel |
|
| As
in previous years, the members of the Pakland family worked in complete
harmony and mutual |
|
| cooperation.
The Company continues its drive to recruit quality personnel, as it considers
its |
|
| people
to be the back bone of the organization. |
|
|
| The
Board would like to place on record its appreciation for the efforts of all
its employees. |
|
|
| Auditors |
|
| Messrs.
Ford, Rhodes, Robson, Morrow, Chartered Accountants and Messrs. Khan H.R.
& Co., |
|
| Chartered
Accountants, retire and offer themselves for re-appointment. |
|
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|
| Future
Outlook |
|
| Your
company continues to expand. Due to the major increase in capacity and the
equity |
|
| investment
in Saadi Cement Limited, the earnings for the current year were impacted. As
stated |
|
| previously
your company's policy is to ensure medium to long-term growth in shareholder
value |
|
| and
the above investments were made with these objectives in mind. We remain
confident of the |
|
| cement
industry in Pakistan and feel that the medium to long-term prospects for
growth are |
|
| excellent. |
|
|
| Acknowledgements |
|
| The
board of directors would like to place on record their appreciation for the
help and support of |
|
| the
various financial institutions. We would like to thank our dealers and our
customers for their |
|
| support
as they form an important and integral part of the Company. |
|
|
|
|
By Order of the Board |
|
| Karachi |
|
Tariq Mohsin Siddiqui |
|
| 5th
January 1997 |
|
Chairman & Chief
Executive |
|
|
|
|
|
Auditors' Report to the
Members |
|
|
| We
have audited the annexed balance sheet of Pakland Cement Limited as at 30th
June 1996, |
|
| and
the related profit and loss account and statement of changes in financial
position, 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 notes thereon,
have |
|
| been
drawn up in conformity with 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, investments 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, profit and loss
account and the statement of changes in |
|
| financial position, 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 changes in financial
position for the year then ended; and |
|
|
| (d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr
Ordinance, |
|
| 1980. |
|
|
|
|
|
ACCOUNTS |
|
|
|
Balance Sheet |
|
|
as at 30th June 1996 |
|
|
|
|
|
30th June |
30th June |
|
|
|
|
|
1996 |
1995 |
|
|
|
Note |
Rs.'000' |
Rs.'000' |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorized
capital |
|
| 150,000,000
ordinary shares of Rs. 10/- each |
|
1,500,000 |
500,000 |
|
|
|
-------- |
-------- |
|
|
|
| Issued,
subscribed and paid-up capital |
3 |
825,000 |
375,000 |
|
| Reserves |
|
4 |
374,935 |
366,589 |
|
|
|
|
|
|
|
|
1,199,935 |
741,589 |
|
| REDEEMABLE
CAPITAL |
|
5 |
45,996 |
3,745 |
|
| LONG-TERM
LOANS |
|
6 |
571,294 |
101,602 |
|
| LONG-TERM
DEPOSITS |
|
7 |
17,185 |
17,335 |
|
| OBLIGATIONS
AND ADVANCES |
|
|
|
| UNDER
FINANCE LEASES |
|
8 |
641,276 |
478,110 |
|
|
|
|
|
| DEFERRED
INCOME |
|
9 |
1,615 |
2,261 |
|
|
|
| CURRENT
LIABILITIES |
|
|
| Shod-term
loans |
|
10 |
85,404 |
36,587 |
|
| Shod-term
finances |
|
11 |
360,304 |
346,868 |
|
| Current
portion of long-term liabilities |
12 |
319,222 |
124,548 |
|
| Creditors,
accrued and other liabilities |
13 |
941,322 |
550,070 |
|
| Provision
for taxation |
|
|
58,339 |
101,682 |
|
|
|
|
-------- |
-------- |
|
|
|
|
1,764,591 |
1,159,755 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
14 |
|
|
|
|
|
-------- |
-------- |
|
|
|
|
4,241,892 |
2,504,397 |
|
|
|
|
======== |
======== |
|
| The
annexed notes form an integral pad of these accounts. |
|
|
|
30th June |
30th June |
|
|
1996 |
1995 |
|
|
Note |
Rs.'000' |
Rs.'000' |
|
| TANGIBLE
FIXED ASSETS |
|
|
|
|
| Operating
fixed assets |
|
|
15 |
745,995 |
805,831 |
|
| Capital
work-in-progress |
|
|
16 |
1,676,845 |
581,194 |
|
|
|
-------- |
-------- |
|
|
|
2,422,840 |
1,387,025 |
|
|
| LONG-TERM
LOANS |
|
17 |
2,600 |
828 |
|
|
|
|
|
| LONG-TERM
DEPOSITS |
|
18 |
101,572 |
70,597 |
|
|
|
|
|
| DEFERRED
COST |
|
19 |
2,230 |
|
|
|
|
| CURRENT
ASSETS |
|
|
| Stores
and spares |
|
20 |
165,668 |
174,343 |
|
| Stock-in-trade |
|
21 |
138,438 |
140,518 |
|
| Trade debts |
|
|
22 |
40,977 |
48,267 |
|
| Loans
and advances |
|
23 |
415,093 |
460,644 |
|
| Deposits,
prepayments and |
|
|
|
|
other receivables |
|
24 |
61,829 |
98,657 |
|
| Shod-term
investments |
|
25 |
806,393 |
9,752 |
|
| Cash
and bank balances |
|
26 |
84,252 |
113,766 |
|
|
-------- |
-------- |
|
|
|
1,712,650 |
1,045,947 |
|
|
|
-------- |
-------- |
|
|
|
4,241,892 |
2,504,397 |
|
|
======== |
======== |
|
|
|
Profit and Loss Account |
|
|
for the year ended 30th
June 1996 |
|
|
Year ended |
Half-year ended |
|
|
|
|
30th June |
30th June |
|
|
|
|
1996 |
1995 |
|
|
|
|
Note |
Rs.'000' |
Rs.'000' |
|
|
|
|
|
| NET SALES |
|
27 |
965,989 |
503,160 |
|
| COST
OF GOODS SOLD |
|
28 |
738,922 |
315,529 |
|
|
|
|
-------- |
-------- |
|
| GROSS PROFIT |
|
|
227,067 |
187,631 |
|
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| General
and administrative |
|
29 |
74,919 |
33,536 |
|
| Selling
and distribution |
|
30 |
14,147 |
5,861 |
|
|
-------- |
-------- |
|
|
|
|
89,066 |
39,397 |
|
|
|
|
-------- |
-------- |
|
| OPERATING
PROFIT |
|
|
138,001 |
148,234 |
|
| OTHER INCOME |
|
31 |
63,087 |
28,066 |
|
|
|
|
-------- |
-------- |
|
|
|
|
201,088 |
176,300 |
|
| FINANCIAL
CHARGES |
|
32 |
142,149 |
52,757 |
|
|
|
|
-------- |
-------- |
|
|
|
|
58,939 |
123,543 |
|
| OTHER
CHARGES |
|
33 |
13,093 |
28,364 |
|
|
|
|
-------- |
-------- |
|
| PROFIT
BEFORE TAXATION |
|
|
45,846 |
95,179 |
|
| TAXATION
- Current |
|
36 |
- |
35,006 |
|
|
|
|
-------- |
-------- |
|
| PROFIT
AFTER TAXATION |
|
|
45,846 |
60,173 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
|
4,089 |
1,416 |
|
|
|
-------- |
-------- |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
|
49,935 |
61,589 |
|
|
|
|
|
|
| APPROPRIATIONS |
|
|
| Transfer
to capital reserve for issue of bonus shares |
- |
37,500 |
|
| Transfer
to general reserve |
|
45,000 |
20,000 |
|
|
|
-------- |
-------- |
|
|
|
45,000 |
57,500 |
|
|
|
-------- |
-------- |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
|
4,935 |
4,089 |
|
|
======== |
======== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
|
|
|
Statement of changes in
Financial Position |
|
|
|
(Cash Flow Statement) |
|
|
for the year ended 30th
June 1996 |
|
|
Year ended |
Half year ended |
|
|
30th June |
30th June |
|
|
1996 |
1995 |
|
|
|
Rs.'000' |
Rs.'000' |
|
|
|
| Cash
Flow from Operating Activities |
|
| Net
profit before tax |
|
45,846 |
95,179 |
|
|
| Adjustments
for items not involving movement of funds |
|
| Depreciation |
|
| Net
profit on disposal of operating fixed assets |
|
| Profit
on sale and lease back |
|
78,420 |
41,281 |
|
| Provision
for diminution in value of investment |
|
(1,109) |
(121) |
|
|
|
(646) |
(322) |
|
|
|
3,359 |
3,447 |
|
|
|
|
|
|
|
|
|
80,024 |
44,285 |
|
|
-------- |
-------- |
|
| Operating
profit before working capital changes |
|
125,870 |
139,464 |
|
| Working
capital changes |
|
| (Increase)/decrease
in current assets |
|
| Stores
and spares |
|
8,675 |
(25,852) |
|
| Stock
in trade |
|
2,080 |
(7,797) |
|
| Trade debts |
|
7,290 |
6,151 |
|
| Loans
and advances |
|
45,551 |
(374,858) |
|
| Deposits,
prepayments and other receivables |
|
36,828 |
(41,996) |
|
| Short-term
investments |
|
(800,000) |
- |
|
|
|
|
-------- |
-------- |
|
|
|
|
(699,576) |
(444,352) |
|
| Increasel(decrease)
in current liabilities |
|
|
|
| Short-term
borrowings |
|
|
62,253 |
117,411 |
|
| Creditors,
accrued and other liabilities |
|
391,252 |
394,786 |
|
|
-------- |
-------- |
|
|
|
|
453,505 |
512,197 |
|
|
|
|
-------- |
-------- |
|
| Cash
generated from operation |
|
(120,201) |
207,309 |
|
| Income
tax paid |
|
|
(43,343) |
(12,887) |
|
|
|
|
-------- |
-------- |
|
| Net
cash generated from operating activities |
|
(163,544) |
194,422 |
|
|
| Cash
Flow from Investing Activities |
|
|
| Capital
expenditures |
|
|
('1,115,786) |
(576,301) |
|
| Sale
proceeds of fixed assets |
|
2,660 |
323 |
|
| Long-term
loans |
|
|
(1,772) |
144 |
|
| Long-term
deposits |
|
|
(30,975) |
(37,913) |
|
| Share
issue expenses |
|
|
(2,230) |
- |
|
|
-------- |
-------- |
|
| Net
cash used in investing activities |
|
(1,148,103) |
(613,747) |
|
|
-------- |
-------- |
|
| Cash
Flows from Financing Activities |
|
|
| Issue
of right shares |
|
|
412,500 |
- |
|
| Long-term
liabilities |
|
|
869,783 |
415,660 |
|
| Payment
of dividend |
|
|
- |
(1,556) |
|
| Deposits
from dealers |
|
|
(150) |
200 |
|
|
|
|
-------- |
-------- |
|
| Net
cash generated in financing activities |
|
1,282,133 |
414,304 |
|
|
|
|
-------- |
-------- |
|
| Net
decrease in cash and cash equivalent |
|
(29,514) |
(5,021) |
|
| Cash
and cash equivalent at beginning |
|
113,766 |
118,787 |
|
|
|
|
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