| CHARIBWAL CEMENT LIMITED |
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| ANNUAL
REPORT 1997 |
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| CONTENTS |
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| Board
of Directors |
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| Notice
of Meeting |
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| Directors'
Report to the Shareholders |
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| Auditors'
Report |
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| Pattern
of Shareholding |
|
| 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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| Subsidiary
Company |
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| BOARD
OF DIRECTORS: |
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| MR.
MOHAMMAD TOUSIF PERACHA |
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| Chairman |
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| MR.
FAROOQ ZAMAN |
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| Managing
Director (Chief Executive) |
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| MRS.
TABASSUM TOUSIF PERACHA |
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| MR.
M. NIAZ PERACHA |
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| MR.
SHAHARYAR KHAN |
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| MR.
MAZHAR HUSSAIN |
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| (Nominated
by SLIC) |
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| MR.
RAZI-UR-REHMAN KHAN |
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| (Nominated
by NIT) |
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| SECRETARY: |
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| MR.
ABDUL JABBAR BUTT |
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| AUDITORS: |
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| HAMEED
CHAUDHRI & CO. |
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| Chartered
Accountants |
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| BANKERS: |
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| NATIONAL
BANK OF PAKISTAN |
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| UNITED
BANK LIMITED |
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| MUSLIM
COMMERCIAL BANK |
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| REGISTERED
OFFICE: |
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| 26-EMPRESS
ROAD, LAHORE |
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| WORKS: |
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| GHARIBWAL
(DISTT. CHAKWAL) |
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| Notice
of Meeting |
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| Notice
is hereby given that 37th Annual General Meeting of the members of GHARIBWAL
CEMENT LIMITED will be |
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| held
at its registered office, 26-Empress Road, Lahore, on Saturday, December 27,
1997 at 3.00 p.m. for transacting the fol- |
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| lowing
business: |
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| ORDINARY
BUSINESS |
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| 1.
To confirm the minutes of the Annual General Meeting held on 23rd December,
1996. |
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| 2.
To receive, consider and adopt the Accounts of the Company for the year ended
June 30, 1997 together with the |
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| Directors'
and Auditors' reports thereon. |
|
|
| 3.
To appoint Auditors for the year 1997-98 and fix their remuneration. M/s
Hameed Chaudhri & Co. Chartered |
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| Accountants,
the retiring Auditors have offered themselves for re-appointment as Auditors
of the Company. |
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| 4.
To transact any other business with the permission of the Chair. |
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| Notes: |
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| 1.
Share transfer books of the Company will remain closed from December 19,
1997, to December 27, 1997 (both days |
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| inclusive).
The Members whose names appear in the Register as at the close of business on
December 18, 1997, will |
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| qualify
to attend the meeting. |
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| 2.
A Member entitled to attend and vote at this Meeting may appoint another
Member as his / her Proxy to attend and vote |
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| on
his / her behalf. Proxies, in order to be effective must be received by the
Company not less than 48 Hours before the |
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| Meeting. |
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| 3.
Kindly quote Folio Number in all correspondence with the Company. |
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| 4.
Members are requested to notify any change in address immediately. |
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| Directors'
Report to the Share Holders |
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| Your
Directors present the Annual Report and the Accounts for the year ended June
30, 1997, accompanied by the Auditors' |
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| report. |
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| During
the year under review, the Company earned a net Loss of Rs. 248.722 million
after accounting for all the charges |
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| and
taxes of Rs. 25.609 million including taxes of Rupees 20.887 million for the
prior years. |
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| The
appropriation of available Profit/(Loss) after taxation is recommended as
under: |
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|
(Rupees in thousand) |
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|
1997 |
1996 |
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|
| Net
Profit/(Loss) for the year after Tax |
|
(248,722) |
19,657 |
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| Unappropriated
Profit B/F |
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|
1,062 |
4,683 |
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|
---------- |
---------- |
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| Profit/(Loss)
available for appropriation |
|
(247,660) |
24,340 |
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|
========== |
========== |
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| Appropriations: |
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|
|
| Reserve
for issue of Bonus shares Nil (1996: @ 16% (4:25)) |
0 |
23,278 |
|
| Balance
to be carried forward |
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|
(247,660) |
1,062 |
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|
---------- |
---------- |
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|
(247,660) |
24,314 |
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========== |
========== |
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| Operating
Results. |
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| The
Profitability of previous year has transposed into a loss during the year.
The depreciation amounting to Rs. 68.762 mil- |
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| lion
has been charged to profit & loss account including the sum of Rs. 41.533
million on the amount of revaluation of |
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| assets.
The total production for the year was also lower compared to last year. The
major reasons being the uncertainty in |
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| the
market and lack of any major development project
during the year, which directly effected the demand of cement. The |
- |
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| figures
of Production & Sales are as under: |
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|
1996-97 |
1995-96 |
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|
(Tonnes) |
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| Clinker
Production |
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|
419,080 |
555,540 |
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| Cement
Production |
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|
484,685 |
554,502 |
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| Despatches
(Sales) |
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|
489,276 |
553,503 |
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| The
Federal Budget for 1996 - 97 increased the rates of Excise duty & Sales
tax from 25% to 35% and from 15% to 18% :: |
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| respectively.
These changes resulted in a simultaneous increase of Rs: 700 per tonne. All
the increases in the cost during the |
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| year
did not being a corresponding change in the selling price, which was infact
revised downwards several times. This was |
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| necessary
due to lack of demand of cement, and lower rates of other brands available in
the market. |
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| The
booking price of Rs. 3,950 per tonne on July 1, 1996 was gradually reduced as
low as Rs. 3250,00 per tonne on July 1, |
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| 1997.
Thus the company had to carry on the operation during the year below the
"break-even" point which resulted in |
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| negative
profitability. |
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| The
profit for the year compared to the total sales during the year has decreased
by 21.23%, resulting in a loss of 15.44% |
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| from
a profit of 5.79% from the previous year. Net earnings per share during the
year were Rs: (14.74) per share as com- |
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| pared
to Rs: 1.35 per share in the preceeding year. |
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| Marketing |
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| The
company was successful in retaining its main market inspite of very tough
competition by other brands. However, the |
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| entire
annual production was sold during the year. |
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| There
would be an increase in the supply of cement in the coming months from
enhanced capacities of existing plants and |
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| some
new plants coming up shortly. The market would be flooded with over supply of
cement. Export from both the South |
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| and
the North would be the last hope to balance the supply and demand in the
country. |
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| We
continue to keep a close eye on the market and are aligning our strategies
according to the changes in the market. |
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| Maintenance
and Development |
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| The
plant performance remained satisfactory and it's normal maintenance has been
carded out throughout the year. |
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| The
installation of Electrostatic Precipitator has almost been completed and is
expected to be in operation in |
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| December,
1997. |
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| The
power plant is at the final completion stage and is expected to give
production in January, 1997. |
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| Dividend |
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| In
view of the company's financial position the Directors, are unable to
recommend any dividend for the year under review. |
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| Pattern
of Shareholding |
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| The
pattern of shareholding of the Company is annexed. |
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| Auditors |
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| M/s.
Hameed Chaudhri & Co., Chartered Accountants, the retiring Auditors,
being eligible offer themselves for |
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| re-appointment. |
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|
| Labour
Management Relations |
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| The
Board of Directors appreciates the hard work of the labour and the entire
team of the company and applauds the |
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| cordial
relationship that is between the labour and the management. |
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|
| Management
would like to put it on the record that as of this date, there has been no
significant change during the current |
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| year,
in the company's financial position and commitments, except as explained
above. |
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|
| Auditors'
report to the Members of Gharibwal Cement Ltd |
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| We
have audited the annexed Balance Sheet of GHARIBWAL CEMENT LIMITED as at 30
June, 1997 and the related |
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| Profit
and Loss Account and Cash Flow Statement, together with the notes forming
part thereof, for the year then ended and |
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| we
state that we have obtained all the information and explanations which to the
best of our knowledge and belief were |
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| necessary
for the purposes of our audit and, after due verification thereof, we report
that: |
|
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| a)
in our opinion, proper books of account have been kept by the company as
required by the Companies Ordinance, 1984; |
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| b)
in our opinion: |
|
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| (i)
the Balance Sheet and Profit and Loss Account together with the notes thereon
have been drawn up in conformity |
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| with
the Companies Ordinance, 1984 and are in agreement with the books of account
and are further in accordance |
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| with
accounting policies consistently applied; |
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| (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 in accordance with |
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| the
objects of the Company; |
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| c)
in our opinion and to the best of our information and according to the
explanations given to us, the Balance Sheet, |
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| Profit
and Loss Account and the Cash Flow statement together with the notes forming
part thereof, give the |
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| information
required by the Companies Ordinance, 1984 in the manner so required and
respectively give a true and fair |
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| view
of the state of the Company's affairs as at 30 June, 1997 and of the loss and
cash flows for the year then |
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| ended; and |
|
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| d)
in our opinion, no Zakat was Deductible at source under the Zakat and Ushr
Ordinance, 1980. |
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|
HAMEED CHAUDHARI &
CO. |
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| Lahore:
28 November, 1997 |
CHARTERED ACCOUNTANTS |
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|
| Pattern
of shareholding as at June 30, 1997 |
|
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|
| Share Holding |
No. of |
No. of |
Percentage |
|
|
| From |
To |
Share Holders |
Shares Held |
of issued capital |
|
|
|
| 1 |
100 |
697 |
29,085 |
0.17 |
|
| 101 |
500 |
497 |
127,822 |
0.76 |
|
| 501 |
1000 |
243 |
166,294 |
0.99 |
|
| 1001 |
5000 |
313 |
680,178 |
4.03 |
|
| 5001 |
10000 |
54 |
358,336 |
2.12 |
|
| 10001 |
15000 |
10 |
119,004 |
0.71 |
|
| 15001 |
20000 |
5 |
83,663 |
0.50 |
|
| 20001 |
30000 |
5 |
117,623 |
0.70 |
|
| 30001 |
9999999 |
14 |
15,194,412 |
90.02 |
|
|
---------- |
---------- |
---------- |
|
|
1838 |
16,876,417 |
100.00 |
|
|
========== |
========== |
========== |
|
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|
|
|
|
No. of |
No. of |
Percentage |
|
|
| Categories
of Share Holders |
Share Holders |
Shares Held |
of Issued Capital |
|
|
| Individuals |
|
1797 |
1,531,048 |
9.07 |
|
| Investment
Companies |
|
3 |
1,014,092 |
6.01 |
|
| Insurance
Companies |
|
6 |
3,682,937 |
21.82 |
|
| Financial
Institutions |
|
10 |
1,872,845 |
11.10 |
|
| Private
Limited Companies |
13 |
92,001 |
0.55 |
|
| Foreign
Investors |
|
2 |
8,564,224 |
50.75 |
|
|
|
|
| Corporations |
|
1 |
61,301 |
0.36 |
|
| Corporate
Law Authority |
|
1 |
11 |
0.00 |
|
| Others |
|
5 |
57,958 |
0.34 |
|
|
---------- |
---------- |
---------- |
|
| Grand Total |
|
1838 |
16,876,417 |
100.00 |
|
|
========== |
========== |
========== |
|
| DETAIL
OF OTHERS
'~:: |
|
|
| Tehrik-i-Jadid
Anjuman Ahmadiya Pakistan |
278 |
|
| Sadar
Anjuman Ahmadiya Pakistan |
|
24,448 |
|
| Dacca
Benevolent Association |
|
17,437 |
|
| The
Ahmadiya Anjuman Ishaat-i-Islam |
|
934 |
|
| Dy.
Administration Abandoned Properties |
14,861 |
|
|
---------- |
|
|
|
57,958 |
|
|
|
========== |
|
|
|
|
|
|
|
| Balance
Sheet as at June 30, 1997 |
|
|
|
|
|
|
(Rupees in thousand) |
|
|
|
Note |
1997 |
1996 |
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised |
|
|
|
| 50,000,000
(1996: 20,000,000) |
|
|
| ordinary
shares of Rs. 10 each |
|
500,000 |
200,000 |
|
|
|
|
---------- |
---------- |
|
| Issued,
subscribed and paid-up |
|
3 |
168,764 |
145,486 |
|
| Capital
reserve |
|
4 |
0 |
23,278 |
|
| Revenue
reserve |
|
4 |
332,000 |
332,000 |
|
| (Accumulated
loss)/Unappropriated profit |
|
(247,660) |
1,062 |
|
|
|
|
---------- |
---------- |
|
|
|
|
253,104 |
501,826 |
|
|
|
|
| SURPLUS
ON REVALUATION OF |
|
|
| FIXED
ASSETS |
|
5 |
993,804 |
993,804 |
|
|
|
|
| FINANCE
FROM LEASING COMPANY |
|
6 |
0 |
14,013 |
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
|
| SUBJECT
TO FINANCE LEASE |
|
7 |
124,574 |
0 |
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
| Deferred
taxation |
|
8 |
15,581 |
18,900 |
|
| Vacation
benefits |
|
9 |
7,495 |
7,714 |
|
| Deposits
from customers |
|
10 |
14,900 |
36,425 |
|
|
|
|
---------- |
---------- |
|
|
|
|
37,976 |
63,039 |
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of liabilities against assets |
|
| subject
to finance lease |
|
7 |
25,132 |
0 |
|
| Short
term finances |
|
11 |
33,135 |
17,492 |
|
| Creditors,
accrued and other liabilities |
12 |
152,699 |
147,299 |
|
| Taxes
and duties |
|
13 |
52,320 |
53,586 |
|
| Unclaimed
Dividend |
|
|
3,106 |
3,189 |
|
|
|
|
---------- |
---------- |
|
|
|
|
266,392 |
221,566 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
14 |
---------- |
---------- |
|
|
|
|
1,675,850 |
1,794,248 |
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
fixed assets |
|
15 |
912,182 |
946,699 |
|
| Capital
work-in-progress |
|
16 |
311,421 |
262,966 |
|
| Stores
held for capital expenditure |
|
|
3,926 |
4,313 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
1,227,529 |
1,213,978 |
|
|
|
|
| LONG
TERM INVESTMENTS |
|
17 |
2,719 |
2,922 |
|
|
|
|
| LONG
TERM DEPOSITS AND PREPAYMENTS |
|
18 |
1,174 |
16,161 |
|
|
|
|
|
| LONG
TERM LOANS AND ADVANCES |
|
19 |
29,467 |
33,044 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
20 |
122,420 |
150,273 |
|
| Stock-in-trade |
|
21 |
26,790 |
110,125 |
|
| Trade
debtors |
|
22 |
0 |
0 |
|
| Loans,
advances, deposits, prepayments and |
|
|
| other
receivables |
|
23 |
221,981 |
115,367 |
|
| Short
term investments |
|
24 |
980 |
634 |
|
| Cash
and bank balances |
|
25 |
42,790 |
151,744 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
414,961 |
528,143 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
1,675,850 |
1,794,248 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
| Profit
& Loss Account for the year ended June 30, 1997 |
|
|
|
|
|
|
|
(Rupees in thousand) |
|
|
|
|
Note |
1997 |
1996 |
|
|
|
|
| SALES - Net |
|
26 |
1,466,549 |
1,460,404 |
|
| COST
OF SALES |
|
27 |
1,656,860 |
1,336,045 |
|
|
|
|
---------- |
---------- |
|
| GROSS
(LOSS) / PROFIT |
|
|
(190,311) |
124,359 |
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| General
and administrative |
|
28 |
38,117 |
61,797 |
|
| Selling
and distribution |
|
29 |
13,342 |
12,813 |
|
| Financial
charges |
|
30 |
4,731 |
1,565 |
|
| Other
charges |
|
31 |
169 |
2,136 |
|
| Workers'
(Profit) Participation Fund |
|
12.2 |
0 |
4,454 |
|
|
|
|
---------- |
---------- |
|
|
|
56,359 |
82,765 |
|
|
|
---------- |
---------- |
|
|
|
(246,670) |
41,594 |
|
|
|
|
| OTHER
INCOME |
|
32 |
20,238 |
43,032 |
|
|
|
|
---------- |
---------- |
|
| (LOSS)
/ PROFIT BEFORE TAXATION |
|
|
(226,432) |
84,626 |
|
| PROVISION
FOR TAXATION |
|
|
|
---------- |
---------- |
|
|
|
13.1 |
26,447 |
65,221 |
|
| Income
tax refunds |
|
|
(838) |
0 |
|
|
|
8 |
(3,319) |
(252) |
|
|
|
|
---------- |
---------- |
|
|
|
22,290 |
64,969 |
|
|
|
---------- |
---------- |
|
| (LOSS)/PROFIT
AFTER TAXATION |
|
(248,722) |
19,657 |
|
| UNAPPROPRIATED
PROFIT - Brought Forward |
|
1,062 |
4,683 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
(247,660) |
24,340 |
|
| APPROPRIATIONS: |
|
|
|
| Reserve
for issue of bonus shares Nil (1996: @ 16%) |
|
0 |
23,278 |
|
|
|
---------- |
---------- |
|
| (ACCUMULATED
LOSS)/UNAPPROPRIATED PROFIT |
|
(247,660) |
1,062 |
|
| Carded
to Balance Sheet |
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| Cash
flow statement for the year ended June 30, 1997 |
|
|
|
|
|
(Rupees in thousand) |
|
|
|
|
1997 |
1996 |
|
|
|
|
| NET
CASH (OUTFLOW) FROM |
|
|
|
| OPERATING
ACTIVITIES (Note 'A') |
|
|
(208,129) |
(188,703) |
|
|
|
|
|
---------- |
---------- |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
|
| Fixed
Capital expenditure |
|
|
(68,504) |
(135,451) |
|
| Long
term investments made |
|
|
0 |
(2,550) |
|
| Sale
proceeds of operating fixed assets |
|
1,450 |
1,401 |
|
| Sale
proceeds of investments |
|
|
0 |
7,036 |
|
| Exchange
gain / (loss) on dealings |
|
|
|
|
| in
U.S.$ Accounts / Bearer Certificates |
|
10,423 |
10,744 |
|
| Dividend
received |
|
|
|
13 |
0 |
|
| Interest
received |
|
|
|
6,730 |
34,226 |
|
|
|
---------- |
---------- |
|
| NET
CASH (OUTFLOW) FROM |
|
|
|
| INVESTING
ACTIVITIES |
|
|
|
(49,888) |
(84,594) |
|
|
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
|
| Lease
finances - net |
|
|
|
135,693 |
14,013 |
|
| Short
term finances - net |
|
|
15,643 |
17,492 |
|
| Mark-up
on short term finances paid |
|
|
(2,190) |
0 |
|
| Dividend
paid |
|
|
|
(83) |
(15,949) |
|
|
|
|
|
---------- |
---------- |
|
| NET
CASH INFLOW / (OUTFLOW) FROM |
|
|
|
|
| FINANCING
ACTIVITIES |
|
|
|
149,063 |
15,556 |
|
|
|
---------- |
---------- |
|
| NET
DECREASE IN CASH AND CASH EQUIVALENTS |
|
(108,954) |
(257,741) |
|
|
|
|
|
|
|
| CASH
AND CASH EQUIVALENTS |
|
|
|
|
| -
At the beginning of the year |
|
|
151,744 |
409,485 |
|
|
|
|
|
---------- |
---------- |
|
| CASH
AND CASH EQUIVALENTS |
|
|
|
|
| -
At the end of the year |
|
|
42,790 |
151,744 |
|
|
|
========== |
========== |
|
|
|
|
| The
annexed note 'A' forms an integral part of this Statement. |
|
|
| NOTE 'A' |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
(Rupees in thousand) |
|
|
|
|
1997 |
1996 |
|
|
|
|
| (Loss) Profit for the
year-Before taxation |
|
(226,432) |
84,626 |
|
| Adjustments
for: |
|
|
|
|
|
| Depreciation |
|
|
|
68,762 |
71,822 |
|
| (Gain)
on disposal of fixed assets |
|
|
(659) |
(247) |
|
| Mark-up
on short term finances |
|
|
2,004 |
219 |
|
| Interest
on bank deposits |
|
|
(3,976) |
(25,687) |
|
| Exchange
(Gain) on dealings in U.S. $ Accounts/ |
|
|
|
| Bearer
Certificates |
|
|
|
(10,423) |
(10,744) |
|
| Provision
for d |
