| MUSTEHKAM CEMENT LIMITED |
|
|
|
|
|
|
| ANNUAL
REPORT 1997 |
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|
|
|
| CONTENTS |
|
| Board
of Directors |
|
| Notice
of Annual General Meeting |
|
| Directors'
Report to the Shareholders |
|
| Pattern
of Holding of Shares |
|
| Auditors' Report to the Members |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Source and Application of Funds |
|
| Cash Flow Statement |
|
| Notes to the Accounts |
|
|
|
| BOARD
OF DIRECTORS |
MUHAMMAD NAWAZ TIWANA |
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|
|
Chairman |
|
|
|
|
MUHAMMAD AKRAM |
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|
|
Chief Executive |
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|
EHSAN ULLAH KHAN |
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|
S. M. FAKHIR HASAN |
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|
BEHRAM HASSAN |
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|
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|
MUHAMMAD AKHTAR |
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|
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|
MUHAMMAD ASHRAF CHAUDHRY |
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| SECRETARY |
|
MAHMOOD AHMED KHAN |
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|
Chartered Secretary |
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|
|
| AUDITORS |
|
MUNIFF ZIAUDDIN &
CO., |
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|
|
Chartered Accountants, |
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|
|
M-40/E, Bank Road, |
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|
Rawalpindi Cantt. |
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|
|
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| BANKERS |
|
Habib Bank Limited. |
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|
National Bank of Pakistan |
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|
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| REGISTERED
OFFICE |
Gul-e-Akra Plaza, |
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|
147-Murree Road, |
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|
Rawalpindi Cantt. |
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|
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| FACTORY |
|
HATTAR, |
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|
Distt. Haripur. |
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| NOTICE
OF ANNUAL GENERAL MEETING |
|
| Notice
is hereby given that the Annual General Meeting of the Shareholders of |
|
| Mustehkam
Cement Limited will be held at Flashman's Hotel, The Mall, Rawalpindi Cantt. |
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| on
Monday the 29th December, 1997 at 11.00 a.m. for the purpose of transacting
the |
|
| following
business:- |
|
|
| 1.
To confirm the minutes of previous Annual General Meeting. |
|
|
|
|
| 2.
To receive and adopt the audited accounts of the Company for the period |
|
| ended
June 30, 1997 together with the reports of directors and auditors |
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| thereon. |
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|
|
|
|
| 3.
To appoint auditors and fix their remuneration. |
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|
|
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| 4.
To transact any other ordinary business of the Company with the permission |
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| of
the Chair. |
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|
| The
share transfer books of the Company will remain closed from 23rd December, |
|
| 1997
to 29th December, 1997 (both days inclusive). |
|
|
| Notes: |
|
|
| 1.
A member entitled to attend and vote at this meeting is entitled to appoint |
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| another
member as his/her proxy to attend and vote instead of him/her. |
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| 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 |
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| meeting. |
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|
|
|
|
| 2.
Shareholders are requested to immediately notify the company of any |
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| change
in their address. |
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|
|
|
| 3.
Shareholders are further requested to quote their folio number in all |
|
| correspondence
with the Company and at the time of attending the Annual |
|
| General
Meeting. |
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|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| The
Directors of your Company take pleasure in placing before you the 43rd Annual |
|
| Report
together with the Audited Accounts and the Auditors' Report thereon for the
year |
|
| ended
30th June, 1997. |
|
|
| PRODUCTION |
|
|
| 420,425
tonnes of Clinker and 473,508 tonnes of cement was produced against the |
|
| revised
target of 473,343 / 517,957 tonnes respectively during the year 1996-97. |
|
|
| MARKETING |
|
|
| The
Company sold 481,304 tonnes of cement during the year against revised |
|
| target
of 517,957 tonnes. |
|
|
| PRICING
POLICY |
|
|
| Mustehkam
Cement Limited being the only state owned company in the North has |
|
| to
align its sales policy with the cement industry in the neighbourhood. During
the year |
|
| under
report, cement industry in the area went into unhealthy price war.
Resultantly |
|
| booking
price of cement was frequently reduced. Against booking price of Rs. 3,900.00
per |
|
| tonne
as on 13-06-1996 our booking price as on 23-05-1997 was Rs. 3,360.00 per
tonne |
|
| which
remained uptill 30-06-1997. |
|
|
| FINANCIAL |
|
|
| Average
ex-factory price of cement was Rs. 3,621.65 per tonne and average |
|
| retention
price to the company after deduction of excise duty, sales tax and SCCP
cement |
|
| surcharge
was Rs.1,925.85 per tonne against the cost to make and sell of Rs. 2,288.39 |
|
| per
tonne during the year. Retention price during the last year was Rs.1,889.39
per tonne |
|
| against
the cost to make and sell of Rs.1,828.67 per tonne. Manufacturing cost has |
|
| increased
mainly due to increase in the price of furnace oil raising it from Rs.
4,914.71 per |
|
| tonne
as on 23-05-1996 to Rs. 6,735.64 per tonne as on 05-12-1996 and Rs. 6,366.48
per |
|
| tonne
as on 04-02-1997. Operational loss for the fiscal period was Rs. 174.494
million and |
|
| after
addition of revenue/other income of Rs. 6.970 million, the company sustained
a net |
|
| loss
for the year amounting to Rs.167.524 million. |
|
|
| The
results are summarised as under :- |
|
|
|
|
(Rupees in million) |
|
|
| Net
profit/(loss) for the year |
|
|
(167.524) |
|
| Adjustment
of prior year |
|
|
22.00 |
|
|
|
|
|
|
|
| Net
profit/(loss) before tax |
|
|
(189.524) |
|
| Balance
brought forward |
|
|
|
2.62 |
|
|
|
|
|
|
|
| Total
profit/(loss) |
|
|
|
(186.900) |
|
| Less:
provision for taxation |
|
|
(5.078) |
|
|
|
|
|
---------- |
|
| Net
profit/(loss) after tax |
|
(181.822) |
|
|
|
|
========== |
|
| DIRECTORS |
|
|
|
| Since
the last Annual General Meeting Malik Amjad All Noon, Mr. Khawar Zaman |
|
| and
Mr. Javed Alam Khanzada relinquished charge to act as Directors and Mr.
Muhammad |
|
| Nawaz
Tiwana and Mr. Ehsanullah Khan have been appointed Directors in their place.
The |
|
| Directors
place on record their appreciation for the valuable services rendered by the |
|
| outgoing
Directors and welcome the incoming Directors on the Board. |
|
|
| AUDITORS |
|
|
| The
auditors Muniff Zia-ud-Din & Co., retire and offer their services for re- |
|
| appointment. |
|
|
| ACKNOWLEDGMENT |
|
|
| The
relations between the management and workers remained cordial throughout |
|
| the
year. The Directors place on record their appreciation of sincere efforts and
good work |
|
| done
by workers, staff and officers and expect that they will show greater zeal in
further |
|
| improving
the performance of the Company. The Directors also thank the dealers and |
|
| customers
of Company for their valuable association and support. |
|
|
| GENERAL |
|
|
| On
29-01-1995 application CM No. 38/95 was filed by the Company regarding |
|
| clarification
of status quo dated 31st May, 1994 granted by the Supreme Court of Pakistan |
|
| on
the application of ex-owners in civil appeal No. 512/94 and the case is
subjudice before |
|
| the
Honourable Court. The disbursement of 35% final dividend already approved by
the |
|
| Shareholders
for the year ended 30-06-1994, 100% dividend for the year ended |
|
| 30-06-1995
and 15% dividend for the year ended 30-06-1996 can only be made if the |
|
| Court
Orders that the status quo does not restrain the Directors from payment of
dividend |
|
| to
the shareholders. |
|
|
| PATTERN
OF HOLDING OF SHARES |
|
| AS
ON JUNE 30, 1997 |
|
|
| No. of Shareholders |
Shareholding |
Total |
|
|
From |
To |
shares held |
|
|
| 3,726 |
|
1 |
100 |
80,437 |
|
| 710 |
|
101 |
500 |
142,730 |
|
| 97 |
|
501 |
1,000 |
68,849 |
|
| 79 |
|
1,001 |
5,000 |
144,110 |
|
| 12 |
|
5,001 |
10,000 |
78,051 |
|
| 2 |
|
10,001 |
15,000 |
26,632 |
|
| 1 |
|
15,001 |
20,000 |
20,000 |
|
| 1 |
|
20,001 |
25,000 |
21,933 |
|
| 1 |
|
35,001 |
40,000 |
37,904 |
|
| 1 |
|
60,001 |
65,000 |
60,200 |
|
| 1 |
|
105,001 |
110,000 |
108,060 |
|
| 1 |
|
1,020,001 |
1,025,000 |
1,023,160 |
|
| 1 |
|
10,505,001 |
10,510,000 |
10,507,934 |
|
| ---------- |
|
|
---------- |
|
| 4,633 |
|
|
12,320,000 |
|
| ========== |
|
========== |
|
|
|
|
|
| CATEGORIES
OF SHAREHOLDERS |
|
| AS
ON JUNE 30, 1997 |
|
|
| Particulars |
|
No. of |
Shares held |
Percentage |
|
|
Shareholders |
|
|
|
|
| Individuals |
|
4,446 |
507,832 |
4.12% |
|
| Investment
Companies |
|
4 |
41,540 |
0.33% |
|
| Insurance
Companies |
|
4 |
120,876 |
1.00% |
|
| Joint
Stock Companies |
|
5 |
79,958 |
0.65% |
|
| Financial
Institutions |
|
13 |
1,055,535 |
8.56% |
|
| State
Cement Corporation |
|
|
| of
Pakistan (Pvt) Limited |
1 |
10,507,934 |
85.29% |
|
| Deputy
Administrator Abandoned |
|
|
| Properties
(Bangladesh Citizens) |
159 |
6,324 |
0.05% |
|
| Corporate
Law Authority of |
|
|
| Pakistan |
|
1 |
1 |
- |
|
|
---------- |
---------- |
---------- |
|
|
4,633 |
12,320,000 |
100% |
|
|
|
========== |
========== |
========== |
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of MUSTEHKAM CEMENT LIMITED |
|
| as
at June 30, 1997 and the related profit and loss account and the 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 purpose 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 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 June 30, 1997 and of the loss 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. |
|
|
|
|
|
|
|
|
MUNIFF ZIAUDDIN & CO. |
|
| Rawalpindi:
Dated Dec 02, 1997 |
|
CHARTERED ACCOUNTANTS |
|
|
|
|
|
|
|
|
| BALANCE
SHEET AS |
|
| AT
JUNE 30, 1997 |
|
|
|
NOTE |
1997 |
1996 |
|
|
|
(RUPEES IN THOUSAND) |
|
| CAPITAL
AND LIABILITIES |
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
capital |
|
|
|
| 18,000,000
ordinary shares of Rs. 10/- each |
|
180,000 |
180,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
|
| 12,320,000
ordinary shares of Rs. 10/- each |
3 |
123,200 |
123,200 |
|
|
|
|
|
| RESERVES |
|
|
|
|
| Capital
reserve |
|
|
289 |
289 |
|
| Revenue
reserve |
|
4 |
130,888 |
130,888 |
|
| Retained
earnings |
|
|
(181,822) |
2,624 |
|
|
|
|
---------- |
---------- |
|
|
|
|
(50,645) |
133,801 |
|
|
|
|
---------- |
---------- |
|
|
|
|
72,555 |
257,001 |
|
| LONG
TERM LOANS AND DEFERRED LIABILITIES |
|
| Long
term loans |
|
5 |
225,318 |
267,409 |
|
| Deferred
taxation |
|
|
84,410 |
94,123 |
|
|
|
|
---------- |
---------- |
|
|
|
|
309,728 |
361,532 |
|
| LONG
TERM DEPOSITS |
|
6 |
3,803 |
3,961 |
|
| CURRENT
LIABILITIES |
|
|
| Current
maturity of long term loans |
|
7 |
74,949 |
54,362 |
|
| Due
to Associated Companies |
|
8 |
37,297 |
13,193 |
|
| Trade
creditors |
|
|
22,886 |
10,470 |
|
| Deposits/advances
from customers |
|
9 |
42,429 |
70,874 |
|
| Accrued
liabilities |
|
10 |
117,352 |
66,376 |
|
| Other
liabilities |
|
11 |
29,717 |
46,472 |
|
| Provision
for taxation |
|
12 |
2,106 |
4,149 |
|
| Dividend
payable |
|
13 |
187,602 |
187,645 |
|
|
|
|
---------- |
---------- |
|
|
|
|
514,338 |
453,541 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
14 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
900,424 |
1,076,035 |
|
|
|
|
========== |
========== |
|
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
|
|
|
|
| FIXED
ASSETS - TANGIBLE |
|
|
|
|
|
|
| Operating
assets |
|
15 |
506,875 |
535,481 |
|
| Capital
work in progress |
|
|
1,188 |
- |
|
| Stores
held for capital expenditure |
|
|
35,667 |
37,242 |
|
|
|
|
---------- |
---------- |
|
|
|
|
543,730 |
572,723 |
|
|
|
|
| LONG
TERM LOANS AND DEPOSITS |
|
|
| Employees |
|
16 |
10,484 |
9,669 |
|
| Prime
Minister's Debt Retirement Scheme |
|
| (Qarz-e-Hasna) |
|
|
1,000 |
- |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
| Stores,
spares and loose tools - at cost |
17 |
215,126 |
221,523 |
|
| Stock
in trade |
|
18 |
50,349 |
90,751 |
|
| Trade
debtors-considered good |
|
19 |
595 |
260 |
|
| Loans
and advances - employees |
|
20 |
16,474 |
20,354 |
|
| Due
from Associated Companies |
|
21 |
279 |
- |
|
| Loans
and advances - others |
|
22 |
41,075 |
65,579 |
|
| Trade
deposits & prepayments |
|
23 |
6,795 |
7,372 |
|
| Interest
accrued |
|
|
98 |
190 |
|
| Other
receivables |
|
24 |
103 |
103 |
|
| Cash
and bank balances |
|
25 |
14,316 |
87,511 |
|
|
|
|
---------- |
---------- |
|
|
|
|
345,210 |
493,643 |
|
|
|
|
---------- |
---------- |
|
|
|
|
900,424 |
1,076,035 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
| Auditor's
report to the members annexed. |
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1997 |
|
|
|
|
NOTE |
1997 |
1996 |
|
|
|
|
(RUPEES IN THOUSAND) |
|
|
|
|
| SALES - Net |
|
|
26 |
926,918 |
1,144,564 |
|
| COST
OF GOODS SOLD |
|
27 |
1,013,783 |
1,004,136 |
|
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT/(LOSS) |
|
|
(86,865) |
140,428 |
|
| OTHER
INCOME |
|
|
|
| Interest |
|
28 |
3,590 |
9,204 |
|
| Miscellaneous |
|
29 |
3,380 |
8,298 |
|
|
|
|
---------- |
---------- |
|
|
|
|
6,970 |
17,502 |
|
|
|
|
---------- |
---------- |
|
|
|
|
(79,895) |
157,930 |
|
| OPERATING
EXPENSES |
|
|
|
| General
and administrative |
|
30 |
35,377 |
40,723 |
|
| Selling
and distribution |
|
31 |
4,415 |
5,642 |
|
| Auditors'
remuneration |
|
32 |
35 |
35 |
|
| Financial |
|
33 |
47,802 |
54,560 |
|
| Workers'
"Profit" Participation Fund |
|
- |
2,686 |
|
|
|
|
---------- |
---------- |
|
|
|
87,629 |
103,646 |
|
|
|
---------- |
---------- |
|
| NET
PROFIT/(LOSS) FOR THE YEAR |
|
(167,524) |
54,284 |
|
|
|
|
| PRIOR
YEARS' ADJUSTMENTS |
|
34 |
22,000 |
- |
|
|
|
|
---------- |
---------- |
|
| NET
PROFIT/(LOSS) BEFORE TAXATION |
|
|
(189,524) |
54,284 |
|
| TAXATION |
|
|
35 |
(5,078) |
31,481 |
|
|
|
|
---------- |
---------- |
|
|
|
|
(184,446) |
22,803 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
|
2,624 |
3,301 |
|
|
|
|
---------- |
---------- |
|
| UNAPPROPRIATED
PROFIT/(LOSS) |
|
|
(181,822) |
26,104 |
|
| APPROPRIATION |
|
|
|
| Proposed
dividend |
|
|
- |
18,480 |
|
| General
reserve |
|
|
- |
5,000 |
|
|
|
|
---------- |
---------- |
|
|
|
|
- |
23,480 |
|
|
|
|
---------- |
---------- |
|
| RETAINED
EARNING CARRIED FORWARD |
|
|
(181,822) |
2,624 |
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
| STATEMENT
OF SOURCE AND APPLICATION OF |
|
| FUNDS
FOR THE YEAR ENDED JUNE 30, 1997 |
|
|
|
1997 |
1996 |
|
|
|
|
(RUPEES IN THOUSAND) |
|
|
|
|
| SOURCE
OF FUNDS |
|
|
|
| Operations: |
|
|
|
|
| Profit
before taxation |
|
(189,524) |
54,284 |
|
| Adjustments
for items not involving |
|
|
|
| movement
of funds: |
|
|
|
| Depreciation |
|
63,450 |
66,529 |
|
| (Gain)
on sale of fixed assets |
|
- |
(436) |
|
|
|
---------- |
---------- |
|
|
|
(126,074) |
120,377 |
|
| Other
sources: |
|
|
|
| Loans
from State Cement Corporation |
|
|
|
| of
Pakistan (Private) Limited |
|
15,000 |
40,000 |
|
| Long
term loans and advances (employees) |
|
- |
233 |
|
| Sale
proceeds of fixed assets |
|
350 |
550 |
|
|
|
---------- |
---------- |
|
|
|
15,350 |
40,783 |
|
|
|
---------- |
---------- |
|
|
|
(110,724) |
161,160 |
|
|
|
---------- |
---------- |
|
| APPLICATION
OF FUNDS |
|
|
|
| Repayment
of SCCP loan |
|
|
36,504 |
66,507 |
|
| Fixed
capital expenditure |
|
34,807 |
61,769 |
|
| Payment
of dividend |
|
|
43 |
64 |
|
| Long
term advances/deposits |
|
1,973 |
80 |
|
| Tax paid |
|
|
6,678 |
30,059 |
|
|
|
---------- |
---------- |
|
|
|
80,005 |
158,479 |
|
|
|
---------- |
---------- |
|
| NET
INCREASE/(DECREASE) IN WORKING |
|
|
|
| CAPITAL |
|
|
(190,729) |
2,681 |
|
|
|
========== |
========== |
|
|
|
|
|
|
|
1997 |
1996 |
|
|
|
|
(RUPEES IN THOUSAND) |
|
|
|
|
| ANALYSIS
OF CHANGES IN WORKING CAPITAL |
|
|
|
|
|
| INCREASE/(DECREASE)
IN CURRENT ASSETS |
|
|
|
|
|
| Stores
and stocks |
|
|
|
(46,799) |
58,031 |
|
| Deposits,
prepayments and other |
|
|
|
|
| receivables |
|
|
|
(28,774) |
(35,745) |
|
| Trade
debtors |
|
|
|
335 |
(687) |
|
| Cash
and bank balances |
|
|
|
(73,195) |
41,644 |
|
|
|
---------- |
---------- |
|
|
|
|
(148,433) |
63,243 |
|
|
|
|
| (INCREASE)/DECREASE
IN CURRENT |
|
|
|
| LIABILITIES |
|
|
|
|
|
|
| Trade
creditors |
|
|
|
(12,416) |
785 |
|
| Other
liabilities |
|
|
|
(29,880) |
(61,347) |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
(42,296 |
(60,562) |
|
|
