| DADABHOY CEMENT INDUSTRIES LIMITED |
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| ANNUAL
REPORT 1997 |
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| CONTENTS |
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| COMPANY
INFORMATION |
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| NOTICE
OF THE MEETING |
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| DIRECTORS'
REPORT |
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| GRAPHS |
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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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| CASH
FLOW STATEMENT |
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| NOTES
TO THE ACCOUNTS |
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| PATTERN
OF HOLDING OF SHARES |
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| STATEMENT
AND REPORT UNDER SUB-SECTION (1) (e), (f) |
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| AND
(g) OF SECTION 237 |
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| DIRECTORS'
REPORT OF DADABHOY SACK LTD |
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| AUDITORS'
REPORT OF DADABHOY SACK LTD |
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| BALANCE
SHEET OF DADABHOY SACK LTD |
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| PROFIT AND LOSS ACCOUNT
OF DADABHOY SACK LTD |
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| CASH
FLOW STATEMENT OF DADABHOY SACK LTD |
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| NOTES
TO THE ACCOUNTS OF DADABHOY SACK LTD |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
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|
| MR.
MOHAMMAD HUSSAIN DADABHOY |
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CHAIRMAN |
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| MRS.
RAZIA HUSSAIN DADABHOY |
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| MRS.
HUMAIRA DADABHOY |
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| MR.
MOHAMMAD AMIN DADABHOY |
|
CHIEF EXECUTIVE |
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| MS.
YASMEEN DADABHOY |
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| MR.
FAZAL KARIM DADABHOY |
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| MR.
NASEEMUDDIN |
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| SYED
GHULAM ABBAS |
|
NOMINEE DIRECTOR-NDFC |
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| COMPANY
SECRETARY & |
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| GENERAL
MANAGER FINANCE |
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| MR.
NAYYAR KARIM |
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| AUDITORS |
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| FORD,
RHODES, ROBSON, MORROW |
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| CHARTERED
ACCOUNTANTS |
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| SOLICITOR: |
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| DR.
RAIS M. MUSHTAQ (ADVOCATE) |
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| BANKERS: |
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| ALLIED
BANK OF PAKISTAN LIMITED |
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| UNITED
BANK LIMITED |
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| NATIONAL
DEVELOPMENT FINANCE CORPORATION |
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| NATIONAL
BANK OF PAKISTAN |
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| DEUTSCHE
BANK |
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| BANK
OF PUNJAB |
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| REGISTRAR: |
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| FORD,
RHODES, ROBSON, MORROW |
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| ROOM
NO. 12, 1st FLOOR, |
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| WRITERS
CHAMBERS, |
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| MUMTAZ
HASAN ROAD, KARACHI. |
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| REGISTERED
OFFICE: |
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| 5TH
FLOOR, MAQBOOL COMMERCIAL COMPLEX |
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| JCHS
BLOCK 7 & 8 |
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| SHAHRAH-E-FAISAL,
KARACHI. |
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| FACTORY: |
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| NOORIABAD
DEH KALU KOHAR, |
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| DIST.
DADU (SINDH) |
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| NOTICE
OF 17TH ANNUAL GENERAL MEETING |
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| NOTICE
is hereby given that the Seventeenth Annual General Meeting of DADABHOY
CEMENT INDUSTRIES LIMITED |
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| will
be held on Saturday the 27th day of December, 1997 at 2:30 P.M at D.H.A.
sunset Club Khayaban-e-Jami Phase-II |
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| Ext.
Defence Housing Authority, Karachi to transact the following business. |
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| ORDINARY
BUSINESS |
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| 1.
To confirm the minutes of the 16th Annual General Meeting held on 28th
December 1996. |
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|
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| 2.
To receive, consider and adopt the Audited Accounts for the year ended 30th
June, 1997 and reports of |
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| the
Board of Directors' and Auditors' thereon. |
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|
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| 3.
To appoint auditors h:)r the ensuing year and to fix their remuneration. |
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| SPECIAL
BUSINESS |
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| 4.
To consider and approve the following resolution under section 208 of the
Companies Ordinance, 1984: |
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|
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| "RESOLVED
that the company be and is hereby authorised to sell/disinvest shares of
Dadabhoy Sack |
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| Limited. |
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| FURTHER
RESOLVED that the Chairman and Chief Executive of the company be and are
hereby |
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| authorised
to sell / disinvest the shares of Dadabhoy Sack Limited." |
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|
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| 5.
To transact any other business as may be placed before the meeting with
permission of the chair. |
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| NOTES: |
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| 1.
The share transfer books of the company shall remain closed from 24th
December, 1997 to 27th December, 1997 |
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| (both
days inclusive) |
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| 2.
A member entitled to attend, speak and vote at this meeting may appoint
another member as his/her proxy to |
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| attend,
speak and vote on his/her behalf. Proxies in order to be effective must be
received at the registered office |
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| of
the company not less than 48 hours before the meeting. |
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|
| 3.
Members are requested to notify change in their addresses if any immediately
to our registrar Ford, Rhodes, |
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| Robson,
Morrow 1st floor, Writers Chambers, Mumtaz Hassan Road, Off, I.I. Chundrigar
Road, Karachi. |
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| 4.
For item No. 4, statement under section 160 (1)(b) of the Companies
Ordinance, 1984 is being sent to all |
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| members. |
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| STATEMENT
UNDER SECTION 160(1) (b) OF THE COMPANIES |
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| ORDINANCE,
1984. |
|
|
| This
statement set out the material facts concerning the Special business to be
transacted at the seventeenth |
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| Annual
General Meeting of Dadabhoy Cement Industries Limited to be held on 27th
December, 1997. |
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|
| Dadabhoy
Cement Industries Limited is major shareholder of shares of Dadabhoy Sack
Limited and therefore, it |
|
| has
been proposed to disinvest the shares at the prevailing market rate. |
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|
|
| DIRECTORS'
REPORT TO THE MEMBERS |
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| FOR
THE YEAR ENDED 30TH JUNE 1997 |
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| Your
directors are pleased to present their report with the audited accounts of
the Company for the year ended |
|
| 30th
June 1997. |
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| During
the year under review the cement industry as a whole faced a very
discouraging scenario. The over sup- |
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| ply
position of cement in market with commissioning of new projects in country
and sluggish demand are forcing the |
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| prices
downward. On the other hand cost of production increased considerably
resulting mainly due to continues |
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| increase
in price of fuel, power and packaging material and erratic tax structure. The
high rate of inflation has also effect |
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| the
consumers' purchasing power. Additionally, due to overall slow down in
economic activities, it is difficult to pass on |
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| the
increased input cost to the consumer. |
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| Moreover,
the heavy taxation for cement industry in the form of excise duty and sales
tax also has significant |
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| effect
on the industry. |
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| FINANCIAL
RESULTS |
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| The
Company has made gross sale of Rs. 1,716.127 Million. The Company has earned
a little gross profit of Rs. |
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| 6.631
Million reasons as explained in above paras. During the year the company has
to charge the WAPDA additional |
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| surcharge
of Rs. 83.706 Million related to previous year. |
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|
Rupees in Million |
|
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| Net
loss for the year |
|
137,996 |
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| Less:
Unappropriated profit brought forward |
|
6,551 |
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|
|
|
---------- |
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| Loss
carried forward |
|
131,445 |
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|
========== |
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| FUTURE
PROSPECTS |
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| After
withdrawal of Sales Tax from the current fiscal year, other incentives
announced by the government and |
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| present
stability in tax structure, we are hopeful that the demand of Cement will
arise and cement industry will come out |
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| of
above situation. Further the Company has signed agreement with foreign
consultant / supplier for expansion of its |
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| existing
capacity of the plant. |
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| The
company filed a law suit against the DFIs and Banks in High Court of Sindh,
regarding markup on markup and |
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| Capitalisation
of penal / additional interest into new loans. The Company has already paid
to them in excess o! what was |
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| due.
Accordingly the high court passed a restraining order. The Company did not
make accurals on long term loans, |
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| redeemable
capital and short term running finances. The management of the Company is
also discussed with DFIs and |
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| Banks
to resolve the issue amicably. |
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| PATTERN
OF SHAREHOLDING |
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| The
pattern of shareholding of the company as on 30-06-1997 is included in the
Annual Report. |
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| AUDITORS |
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| The
present auditors M/s FORD, RHODES, ROBSON, MORROW, Chartered Accountants will
retire and being eli- |
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| gible
to offer themselves-for the year ending 30th June, 1998. |
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| ACKNOWLEDGMENT |
|
| We
wish to convey our thanks to all our valued dealers and customers and the
employees of the company for their |
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| dedications
and devotions for the promotion of Dadabhoy Cement. |
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|
|
| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of DADABHOY CEMENT INDUSTRIES LIMITED
as at June ~O, |
|
| 1997
and the related profit and loss account and statement of changes in financial
position (cash flow state- |
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| ment),
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 pur- |
|
| poses
of our audit and, after due verification thereof, we report that: |
|
|
| (a)
In our opinion, proper books of accounts have been kept by the company as
required by the Companies:; |
|
| Ordinance,
1984; |
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|
|
|
| (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 o, |
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| accounts
and are further in accordance with accounting policies consistently applied; |
|
|
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's
business; and |
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|
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the year were |
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| 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 |
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| balance
sheet, profit and loss account and the statement of changes in financial
position (cash flow |
|
| statement),
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 |
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| company's
affairs as at June 30, 1997 and of the loss and the changes in financial
position (cash flow |
|
| statement)
for the year then ended; |
|
|
|
|
| (d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980 was deducted by |
|
| the
company and deposited in the Central Zakat Fund established under section 7
of that Ordinance. |
|
|
|
|
| (e)
without qualifying our opinion, we draw attention to note 14 regarding
contingencies amounting to |
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| Rs.
425.988 million (1996: Rs: 263.061 million) the ultimate outcome of which
cannot presently be |
|
| determined
and, hence, no provision that may result has been made in these financial
statements. |
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|
Ford, Rhodes, Robson,
Morrow |
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| Karachi:
Dec 02, 1997 |
|
Chartered Accountants |
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| BALANCE
SHEET AS AT JUNE 30, 1997 |
|
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|
Notes |
JUNE 30, |
JUNE 30, |
|
|
|
1997 |
1996 |
|
|
|
|
|
(Rs. '000s) |
|
|
|
|
| CAPITAL
AND RESERVES |
|
|
|
|
|
|
|
| SHARE
CAPITAL |
|
|
|
|
|
|
| Authorised |
|
|
|
|
|
|
| 60,000,000
(1996: 60,000,000) Ordinary |
|
| shares
of Rs. 10 each |
|
|
600,000 |
600,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
3 |
398,688 |
398,688 |
|
| (Accumulated
loss) / Reserves |
|
4 |
(8,221) |
129,775 |
|
|
|
|
---------- |
---------- |
|
|
|
|
390,467 |
528,463 |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
5 |
487,688 |
487,688 |
|
| REDEEMABLE
CAPITAL |
|
6 |
58,366 |
74,149 |
|
| LONG
TERM LOANS |
|
7 |
238,129 |
347,532 |
|
| LONG
TERM DEPOSITS |
|
8 |
28,568 |
8,136 |
|
| OBLIGATIONS
UNDER FINANCE LEASES |
|
9 |
17,149 |
33,260 |
|
| CURRENT
LIABILITIES |
|
|
| Current
maturities of redeemable capital, long term |
|
| loans
and obligations under finance leases |
10 |
355,106 |
224,715 |
|
|
|
|
| Shod
term running finances |
|
11 |
146,300 |
141,967 |
|
| Short
term loan |
|
12 |
31,562 |
- |
|
| Creditors,
accrued and other liabilities |
13 |
274,628 |
236,464 |
|
| Provision
for taxation |
|
|
890 |
327 |
|
| Unclaimed
dividend |
|
|
11,217 |
1,090 |
|
| Proposed
dividend |
|
|
- |
39,869 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
819,703 |
644,432 |
|
| Contingencies
and commitments |
14 |
|
|
|
|
---------- |
---------- |
|
|
|
2,040,070 |
2,123,660 |
|
|
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
|
|
|
| Operating
fixed assets at cost less |
|
| accumulated
depreciation |
|
15 |
1,576,291 |
1,543,414 |
|
|
|
|
| Capital
work-in-progress |
|
16 |
26,884 |
83,010 |
|
| Spares
held for capital expenditure |
15 |
2,677 |
-- |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,605,852 |
1,626,424 |
|
|
|
|
| LONG
TERM INVESTMENTS |
|
17 |
81,191 |
74,980 |
|
|
|
|
|
|
|
| LONG
TERM ADVANCES, DEPOSITS, |
|
|
| PREPAYMENT
AND DEFERRED COST |
|
18 |
9,822 |
10,937 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
19 |
135,171 |
145,728 |
|
| Stock-in-trade |
|
20 |
42,590 |
54,321 |
|
| Trade
debts |
|
21 |
116,848 |
92,900 |
|
|
|
|
| Advances,
deposits, prepayments |
|
|
| and
other receivables |
|
22 |
46,516 |
96,075 |
|
|
|
|
| Cash
and bank balances |
|
23 |
2,080 |
22,295 |
|
|
|
|
---------- |
---------- |
|
|
|
|
343,205 |
411,319 |
|
|
|
|
---------- |
---------- |
|
|
|
|
2,040,070 |
2,123,660 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts |
|
| The
auditor's report is annexed hereto. |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR |
|
| ENDED
JUNE 30, 1997 |
|
|
|
|
Eighteen |
|
|
|
|
Year ended |
months |
|
|
|
Notes |
June 30, |
ended June |
|
|
|
|
1997 |
3O, 1996 |
|
|
|
(Rs. '000) |
|
|
|
|
|
| NET SALES |
|
24 |
755,912 |
1,270,644 |
|
| COST
OF SALES |
|
25 |
749,261 |
908,753 |
|
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT |
|
|
6,631 |
361,891 |
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| Administrative
expenses |
|
26 |
41,784 |
61,235 |
|
| Selling
and distribution expenses |
|
27 |
10,628 |
20,539 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
52,412 |
81,774 |
|
|
|
|
---------- |
---------- |
|
| OPERATING
(LOSS) / PROFIT |
|
|
(45,761) |
280,117 |
|
| ADDITIONAL
SURCHARGE |
|
28 |
83,706 |
- |
|
| FINANCIAL
CHARGES |
|
29 |
11,630 |
206,531 |
|
| WORKERS'
PROFIT PARTICIPATION FUND |
|
- |
3,784 |
|
| OTHER
INCOME |
|
30 |
8,636 |
2,084 |
|
|
|
|
---------- |
---------- |
|
| (LOSS) / PROFIT BEFORE |
TAXATION |
|
(132,481) |
71,886 |
|
|
|
|
|
| TAXATION |
|
|
|
| Current |
|
|
|
3,780 |
8,045 |
|
| Prior |
|
|
|
1,735 |
(4,899) |
|
|
|
---------- |
---------- |
|
|
|
5,515 |
3,146 |
|
|
|
---------- |
---------- |
|
| NET
(LOSS) / PROFIT FOR THE YEAR |
|
(137,996) |
68,740 |
|
| UNAPPROPRIATED
PROFIT BROUGHT |
|
|
|
| FORWARD |
|
|
6,551 |
7,680 |
|
|
|
|
|
---------- |
---------- |
|
| ACCUMULATED
(LOSS) / UNAPPROPRIATED |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
(131,445) |
76,420 |
|
|
|
|
|
---------- |
---------- |
|
| APPROPRIATIONS |
|
|
|
|
|
| Proposed
dividend @ Rs. nil (1996: Rs. 1 per share) |
-- |
39,869 |
|
| Transfer
to general reserve |
|
|
-- |
30,000 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
-- |
69,869 |
|
|
|
|
| ACCUMULATED
(LOSS) / UNAPPROPRIATED |
|
---------- |
---------- |
|
| PROFIT
CARRIED FORWARD |
|
4 |
(131,445) |
6,551 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts |
|
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
|
|
|
|
Eighteen |
|
|
|
|
Year ended |
months |
|
|
|
|
June 30, |
ended June |
|
|
|
|
1997 |
30, 1996 |
|
|
|
|
(Rs. '000) |
|
|
|
|
| Cash
flow from operating activities |
|
|
| (Loss)
/profit before taxation |
|
|
(132,481) |
71,886 |
|
| Adjustment
for items not involving movement of funds |
|
|
|
|
| Depreciation |
|
|
41,191 |
64,820 |
|
| Amortization
of deferred cost |
|
- |
2,207 |
|
| Gain
on sale of fixed assets |
|
(697) |
(681) |
|
|
|
---------- |
---------- |
|
|
|
40,494 |
66,346 |
|
|
|
---------- |
---------- |
|
| (Loss)
/profit before working capital changes |
|
(91,987) |
138,232 |
|
|
|
|
| Working
Capital Changes |
|
|
|
|
|
|
| (Increase)
/decrease in current assets |
|
|
|
|
|
| Stores,
spares and loose tools |
|
10,557 |
12,636 |
|
| Stock-in-trade |
|
11,731 |
34,118 |
|
| Trade
debts |
|
(23,948) |
(25,473) |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables |
|
49,559 |
(54,505) |
|
|
|
|
---------- |
---------- |
|
|
|
47,899 |
(33,224) |
|
| Increase
/ (decrease) in current liabilities |
|
|
|
|
|
| Shod
term loan |
|
31,562 |
- |
|
| Shod
term running finances |
|
4,333 |
10,230 |
|
| Creditors,
accrued and other liabilities |
|
38,164 |
49,479 |
|
|
|
---------- |
---------- |
|
|
|
74,059 |
59,709 |
|
|
|
---------- |
---------- |
|
| Cash
generated from operations |
|
29,971 |
164,717 |
|
|
|
|
|
| Taxes paid |
|
|
(4,952) |
(7,813) |
|
|
|
---------- |
---------- |
|
| Net
cash from operating activities |
|
|
| carried
forward |
|
|
|
25,019 |
156,904 |
|
|
| Net
cash from operating activities |
|
| brought
forward |
|
|
25,019 |
156,904 |
|
|
|
|
|
|
| Cash
flow from investing activities |
|
|
|
|
|
|
|
|
| Capital
expenditure |
|
|
(18,332) |
(121,013) |
|
| Spares
held for capital expenditure |
|
(2,677) |
- |
|
| Sale
proceeds of fixed assets |
|
|
1,087 |
1,530 |
|
| Advance
to staff |
|
|
1,006 |
(1,412) |
|
| Trade
deposits and prepayment |
|
|
109 |
(5,713) |
|
| Investments |
|
|
(6,211) |
(74,980) |
|
|
|
|
---------- |
---------- |
|
| Net
cash used in investing activities |
|
(25,018) |
(201,588) |
|
|
|
|
---------- |
---------- |
|
|
|
|
1 |
(44,684) |
|
|
|
|
| Cash
flow from financing activities |
|
|
|
|
| Issuance
of right shares at premium |
|
- |
166,120 |
|
|
|
|
|
|
| Repayment
of long term loans, redeemable capital |
|
|
| and
lease finances |
|
|
(10,906) |
(130,612) |
|
|
|
|
|
|
| Payment
of dividend |
|
|
(29,742) |
(52,014) |
|
| Deposits
from dealers |
|
|
20,432 |
(1,027) |
|
| Lease
finance |
|
|
- |
51,968 |
|
|
|
|
---------- |
---------- |
|
| Net
cash used in financing activities |
|
(20,216) |
34,435 |
|
|
|
|
|
---------- |
---------- |
|
| Net
decrease in cash and cash equivalents |
|
(20,215) |
(10,249) |
|
|
|
|
|
|
| Cash
and cash equivalents at the beginning of the |
|
|
|
| year/period |
|
22,295 |
32,544 |
|
|
|
|
|
|
| Cash
and cash equivalents at the end of the |
|
---------- |
---------- |
|
| year/period |
|
23 |
2,080 |
22,295 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED |
|
