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Javedan Cement Limited
A Unit of State Cement Corporation of Pakistan (Pvt.) Ltd.
ANNUAL REPORT 1997
CONTENTS
Corporate Information
Notice of Annual General Meeting
Directors' Report to the Shareholders
Pattern of Shareholding
Auditors' Report to the Members
Balance Sheet
Profit and Loss Account
Statement of Changes in Financial Position
Notes to the Accounts
CORPORATE INFORMATION
BOARD OF DIRECTORS:
		Muhammad Nawaz Tiwana
		Chairman
		Sayed Amir Ali Shah
		Managing Director
		M. Tahsin K. Iqbal
		Razi-ur-Rehman Khan
		Behram Hassan
		Mohammad Sharif Shafique
		Sultan Ahmed Shamsi
		Muhammad Ashraf Chaudhry
		Abdul Qayyum
SECRETARY:		Muhammad Yasin
AUDITORS:		Taseer Hadi Khalid & Co.
		Chartered Accountants,
		Karachi
BANKERS:		Muslim Commercial Bank Ltd.
		National Bank of Pakistan
		Habib Bank Ltd.
REGISTERED OFFICE:		AI-Haroon, 2nd Floor
		10-Agha Khan III Road,
		Karachi-74400
		Tel: 7725961-62
		Fax: 92-21-7737437
		Telegram: JAVCEMT
WORKS:		Manghopir,
		Karachi-75890
		Tel: 6980026-27
		Fax: 92-21-6980132
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 35th Annual General Meeting of Shareholders of Javedan Cement
Limited, Karachi, will be held at 3.00 p.m. on Monday, the 22nd December, 1997, at Hotel Jabees,
Abdullah Haroon Road, Saddar, Karachi-3, in order to transact the following business:-
1. To confirm the Minutes of the Last Annual General Meeting.
2. To receive and adopt the Audited Accounts of the Company for the year ended 30th June,
1997, together with the Reports of Directors and Auditors thereon.
3. To appoint Auditors and fix their remuneration. M/s. Taseer Hadi Khalid & Co., Chartered
Accountants, have offered themselves for re-appointment as Auditors of the Company for the
year 1997-98.
4. To elect one Director representing private Shareholders in accordance with Section 178 of
Companies Ordinance, 1984 and Article 87 of Articles of Association of the Company. The
tenure of retiring Director Mr. Sultan Ahmed Shamsi, will expire on 31.12.1997. The next
term of Director will be effective from 1st January, 1998 for a period of 3 years.
5. Any other business with the permission of the Chair.
NOTES:
1. Article 80 of the Articles of Association of the Company provides that any person who seeks
to contest an election to the office of Director shall, whether he is a retiring Director or otherwise,
file with the Company, not later than fourteen days before the date of the meeting at which
elections are to be held, a notice of his intention to offer himself for election as a Director
provided that any such person may, at any time before the holding of election, withdraw such
notice.
2. A retiring Director shall be eligible for re-election under Article 111 of "Articles of Association"
of the Company.
3. According to Article 78 of the Articles of Association of the Company, the qualification of
a Director, shall be his holding shares of the value of Rs. 5,000/- (Five Thousand Rupees)
at least, in his own name, provided that Directors representing interests holding the Shares
of the requisite value need not themselves hold the qualification shares.
4. The Share Transfer books of the Company will remain closed from 13.12.1997 to 22.12.1997
(both days inclusive) to effect the transfer of shares, as at the close of business on 12.12.1997.
5. Shareholders are requested to immediately notify the Company of change in their
addresses, if any.
6. Shareholders are further requested to quote their Folio numbers in all correspondence with
the Company and at the time of attending Annual General Meeting.
7. Those shareholders who have not collected their Share Certificates and/or dividend warrants
for the previous years are requested to please collect the same from the Company in person/
through authorised representatives and or by post.
8. A member entitled to attend and vote at this meeting is entitled to appoint another member
as his/her proxy to attend and vote instead of him/her. Proxies, in order to be effective must
be received at the Registered Office of the Company not less than 48 hours before the time
appointed for the Meeting..
DIRECTORS' REPORT TO THE SHAREHOLDERS
The directors are pleased to welcome the Members at the 35th Annual General Meeting
of the Company wherein the Audited Accounts of the Company together with the Auditors Report
thereon are to be adopted. The performance of the Company during the period 1996-97 remained
satisfactory in terms of production and sales. The performance had been achieved despite excess
availability of cement in South as compared to demand which led to the cut throat competition
between various cement manufacturers.
PRODUCTION:
You will be pleased to notice that the Company produced 505,616 tonnes of cement and
391,723 tonnes of Clinker during the year inspire of the fact that Kilns I & II remained closed
from February to June 1997 due to huge accumulated Clinker stock, besides unfortunate flash
in the transformer occurred on 1st June 1997, due to heavy surge from KESC side. The table
given below shows the comparative figures of clinker and cement production for two years.
					Increase/
					(Decrease)
					Over Last
			1996-97	1995-96	Year
			(Tonnes)	(Tonnes)	(Tonnes)
Clinker Production			391,723	387,287	4,436
Cement Production			----------	----------	----------
Ordinary Portland Cement			312,133	327,625	(15,492)
Slag Cement			171,062	36,878	134,184
Sulphate Resisting Cement			22,421	3,925	18,496
			----------	----------	----------
			505,616	368,428	137,188
			==========	==========	==========
MARKETING:
Sales during the year under review increased by 137,078 tonnes over last year due to accelerated
sales efforts. Comparative figures of sales are given below :-
Increase/
					(Decrease)
					Over Last
			1996-97	1995-96	Year
			(Tonnes)	(Tonnes)	(Tonnes)
Ordinary Portland Cement			318,776	330,256	(11,480)
Slag Cement			171,764	38,961	132,803
Sulphate Resisting Cement			22,033	6,278	15,755
			----------	----------	----------
			512,573	375,495	137,078
			==========	==========	==========
FINANCIAL:
The Company during the year under review has incurred a loss of Rs. 91.604 Million before
tax as against net loss of Rs. 104,362 Million sustained during the year 1995-96. The reasons
for decrease in net loss being increase in sales volume, effecfive control of input ratios, better
cost consciousness inspite that rates of power, furnace oil and gas were escalated during the
year 1996-97.
				(Rs. in Million)
				1996-97	1995-96
Pre-Tax Profit/(Loss)				(91.604)	(104.362)
DIVIDEND:
In view of the losses, no dividend is being recommended for the year 1996-97.
DIRECTORS:
Since the last Annual General Meeting, the following changes have been made in the Board
of Directors of the Company :-
(1) Mr. Muhammad Nawaz Tiwana has assumed the charge of chairman in place of outgoing
chairman Mr. Khawar Zaman, w.e.f. 21.07.1997, who had taken over the charge from
Mr. Malik Amjad All Noon on 02.06.1997;
(2) Mr. M. Tabsin K. Iqbal, Joint Secretary, Ministry of Industries & Production, Government
of Pakistan, Islamabad, has been nominated as Director by the Federal Government,
w.e.f. 15.01.1997, in place of Mr. Muhammad Zia-ur-Rehman;
(3) Mr. Muhammad Yasin, Dy. General Manager (Finance), has taken over as Secretary
of the Company w.e.f. 02.02.1997 in place of Mr. Azhar Ahmed Siddiqi who has retired.
(4) The term of Mr. Sultan Ahmed Shamsi, Director, representing private shareholders of
the Company will expire on 31.12.1997. To elect one Director in accordance with section
178 of the Companies Ordinance 1984, and Article 87 of the Articles of Association
of the Company, the election will be held in the 35th Annual General Meeting scheduled
to be held on 22nd December, 1997.
While welcoming the new Chairman & Directors, we place on record our deep appreciation
for the valuable services rendered by the outgoing Chairmen, Directors and Secretary of the
Company.
AUDITORS:
Present Auditors M/s. Taseer Hadi Khalid & Co., Chartered Accountants, retire and being
eligible have offered themselves for re-appointment.
ACKNOWLEDGMENT:
The Chairman & Directors of the Company place on record their appreciation for the hard
work done by the Workers, Staff & Officers of the Company during the year 1996-97 with the
hope that they would accelerate their joint efforts and dedication for achieving yet better results
during the forthcoming years.
FORM "A"
PATTERN OF HOLDING OF THE SHARES
AS AT 30TH JUNE, 1997
No. of	From	To	Total shares
Shareholders			held
1722	1	100	47,631
616	101	500	164,557
75	501	1000	54,646
65	1001	5000	128,384
2	5001	10000	13,023
1	10001	15000	14,666
1	100001	120000	118,548
1	135001	140000	139,893
1	1120001	1150000	1,369,309
1	6745001	6750000	6,749,343
----------	----------	----------	----------
2485			8,800,000
==========	==========	==========	==========
Categories of Shareholders			Number	Shares held	Percentage
1. Individuals			2473	389,747	4.43
2. Financial Institutions			2	1,487,857	16.91
3. Insurance Companies			3	161,979	1.84
4. Commercial Banks			5	5,471	0.06
5. Others
a) State Cement Corporation
of Pakistan (Pvt) Ltd.			1	6,749,343	76.70
B) Administrator, Abandoned
Properties, Govt. of Pakistan			1	5,603	0.06
			----------	----------	----------
			2485	8,800,000	100.00
			==========	==========	==========
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed Balance Sheet of Javedan Cement Limited as at 30th June,
1997 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:
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 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, 1997 and of the loss and the changes in financial position
for the year then ended; and
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.
			TASEER HADI KHALID& CO
Karachi: 26th Nov, 1997			CHARTERED ACCOUNTANTS
BALANCE SHEET AS at 30th June 1997
					(Rupees)
				Notes	1997	1996
SHARE CAPITAL & RESERVES
Authorised Capital
15,000,000 Ordinary Shares of
Rs. 10/- each					150,000,000	150,000,000
					==========	==========
Issued, Subscribed & Paid-up Capital				3	88,000,000	88,000,000
Reserves:					----------	----------
Capital Reserve					11,965,602	11,965,602
General Reserve					----------	----------
Balance at 1st July					63,500,000	63,500,000
Addition during the year					-	-
					----------	----------
Balance at 30th June					63,500,000	63,500,000
Unappropriated Profit/(Loss)					(227,435,022)	(117,289,942)
					----------	----------
					(151,969,420)	(41,824,340)
					----------	----------
					(63,969,420)	46,175,660
LONG TERM LOANS - SECURED				4	388,000,000	311,000,000
DEFERRED LIABILITIES FOR TAXATION					50,829,297	35,000,000
LONG TERM DEPOSITS				5	5,284,107	5,774,107
CURRENT LIABILITIES					----------	----------
Finance under Mark-up Arrangements				6	12,996,356	20,814,412
Due to Associate Company				7	84,137,512	9,158,527
Current Portion of Long Term Loan				4	46,000,000	93,030,000
Creditors, Accrued Expenses and
Other Liabilities				8	80,902,535	119,600,394
Provision for Taxation				9	4,725,772	5,428,490
Unclaimed Dividend					1,965,934	1,991,237
					----------	----------
					230,728,109	250,023,060
CONTINGENCIES AND COMMITMENTS				10	-	-
					----------	----------
					610,872,093	647,972,827
					==========	==========
The Annexed notes form an integral part of these accounts.
FIXED ASSETS
Operating Fixed Assets				11	242,877,465	260,437,809
Capital Work-in-Progress				12	2,302,628	4,672,524
Stores & Spares held for Capital Expenditure					18,023,201	6,096,757
					----------	----------
					263,203,294	271,207,090
LONG TERM DEPOSITS				13	4,492,203	4,624,930
LONG TERM LOANS TO EMPLOYEES				14	10,003,566	9,897,584
CURRENT ASSETS					----------	----------
Stores, Spares & Loose Tools				15	159,608,834	166,349,033
Stock-in-Trade				16	73,733,716	129,654,132
Trade Debtors				17	1,176,775	1,261,983
Due from Associate Companies
- Unsecured Considered good				18	815,781	3,728,619
Loans & Advances to Employees				19	22,366,073	17,034,416
Advances, Deposits, Prepayments
and Other Receivables				20	40,540,091	22,554,241
Cash & Bank Balances				21	34,931,760	21,660,799
					----------	----------
					333,173,030	362,243,223
					----------	----------
					610,872,093	647,972,827
					==========	==========
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30TH JUNE, 1997
					(Rupees)
				Notes	1997	1996
SALES - Net				22	944,063,064	677,712,989
COST OF GOODS SOLD				23	949,984,964	719,714,755
					----------	----------
GROSS (LOSS)					(5,921,900)	(42,001,766)
OPERATING EXPENSES
Administrative & Selling Expenses				24	(23,290,907)	(27,215,030)
					----------	----------
OPERATING (LOSS)					(29,212,807)	(69,216,796)
Financial Charges				25	(74,012,030)	(42,270,490)
					----------	----------
					(103,224,837)	(111,487,286)
OTHER INCOME				26	11,620,569	7,125,215
					----------	----------
(LOSS) BEFORE TAX					(91,604,268)	(104,362,071)
PROVISION FOR TAXATION					----------	----------
Current					(4,724,790)	(5,428,490)
Prior Period					2,013,275	(12,354,732)
Deferred					15,829,297)	-
					----------	----------
					18,540,812)	(17,783,222)
					----------	----------
(LOSS) AFTER TAX					(110,145,080)	(122,145,293)
(ACCUMULATED Loss)/UNAPPROPRIATED
PROFIT BROUGHT FORWARD					(117,289,942)	4,855,351
					----------	----------
					(227,435,022)	(117,289,942)
					==========	==========
These accounts should be read in conjunction with the attached notes.
STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE YEAR ENDED 30TH JUNE, 1997
					(Rupees)
					1997	1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss)					(91,604,268)	(104,362,071)
Adjustments for:
Depreciation					27,772,153	29,268,656
Assets written-off					43,655	-
Provision for Gratuity					2,014,480	3,135,803
Deferred Cost Amortised					-	17,075,909
Gain on Disposal of Fixed Assets					(38,193)	(1,795,296)
Liabilities written back					(7,748,177)	-
Financial Expenses					74,012,030	42,270,490
					----------	----------
					4,451,680	(14,406,509)
Changes in operating assets and liabilities
Decrease in Stores, Spares and Loose Tools					6,740,199	7,665,023
Decrease/(Increase) in Stock-in-Trade					55,920,416	50,630,824)
Decrease in Trade Debts					85,208	231,566
(Increase) in Advances, Deposits,
Prepayments and Other Receivables					(8,945,258)	(377,954)
(Decrease)/Increase in Creditors, Accrued Expenses
and Other Liabilities					(31,874,326)	36,979,944
					----------	----------
					26,377,919	(20,538,754)
Income Tax Paid					(12,459,685)	(21,940,948)
Utility Deposits Paid					232,727	338,632
Loans Advanced to Employees					(5,437,639)	(3,875,033)
Financial Expenses Paid					(5,970,178)	42,270,490)
Gratuity Paid					(1,018,007)