| Gharibwal Cement Limited |
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| Annual
Report 1998 |
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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 |
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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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| Subsidiary
Company |
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| COMPANY
PROFILE |
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| BOARD
OF DIRECTORS: |
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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Director |
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MR. M. NIAZ PERACHA |
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Director |
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LT. COL (R) BADRUZZAMAN
KHAN |
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Director |
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MR. RAZI-UR-REHMAN KHAN |
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Director (Nominated by
NIT) |
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MR. IMTIAZ RASOOL |
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Director (Nominated by
SLIC) |
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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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THE HONGKONG AND SHANGHAI
BANKING CORPORATION |
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FAYSAL BANK |
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| REGISTERED
OFFICE: |
26-EMPRESS ROAD, LAHORE |
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| WORKS: |
|
ISMAILWAL (DISTT.
CHAKWAL) |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that 38th 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 Monday, December 28,
1998 at 3.30 p.m. for transacting the |
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| following
business: |
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| ORDINARY
BUSINESS |
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| 1.
To confirm the minutes of the Annual General Meeting held on 27 December,
1997. |
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|
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| 2.
To receive, consider and adopt the Accounts of the Company for the year ended
June 30, 1998 together with the |
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| Directors'
and Auditors' reports thereon. |
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| 3.
To appoint Auditors for the year 1998-99 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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| SPECIAL
BUSINESS |
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| To
consider and pass the following Special Resolution:- |
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| "Resolved
that the consent and approval of the Company be and is hereby accorded to
enhance the investment in the |
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| share
capital/loan from Rs. 150 million to Rs. 200 million of GCL Electric Company
Limited from time to time as |
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| may
deem expedient. |
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| It
is further resolved that the Chief Executive of the Company be and is hereby
authorized to negotiate and to take |
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| any
and all actions as may be deemed necessary to enhance of the aforementioned
investment from Rs. 150 million |
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| to
Rs. 200 million or any part thereof of the Subsidiary Company from time to
time as may deem expedient for said |
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| considerations
and/or on such terms and conditions as he may think fit on behalf of the
Company. He is further |
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| authorized
for investment in the Subsidiary Company within the meanings and terms of
Section 208 of the Companies |
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| Ordinance,
1984". |
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|
By order of the Board |
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| Date:
December 3, 1998 |
|
ABDUL JABBAR BUTT |
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|
Secretary |
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| Notes: |
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| 1.
Share transfer books of the Company will remain closed from December 19, 1998
to December 28, 1998 (both days |
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| inclusive).
The members whose names appear in the Register as at the close of business on
December 18, 1998, 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 |
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| vote
on his/her behalf. Proxies, in order to be effective must be received by the
Company not less than 48 Hours |
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| before
the 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 are pleased to present the annual report and audited accounts for
the financial year ended on 30 June 1998. |
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| General |
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| During
the year under review the cement industry as a whole remained under extreme
pressure. Commissioning of new |
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| plants
further created the gap of supply versus demand of cement. Due to surplus
supply of cement in the market the sales |
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| prices
remained under serious stress. The overall economy of the country remained
stagnant. No major development |
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| project
was carried out by the Government due to financial constraints prevailing in
the country as a result of that the |
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| demand
of cement industry did not pick up. |
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|
| Financial
Results |
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| The
company suffered a net loss for the year Rs. 79.666 million as compared to
Rs. 248.722 million of the previous year. |
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|
Rs. in million |
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|
| Net
Loss for the year |
|
79.666 |
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| Add
Loss brought forward |
|
247.660 |
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|
|
|
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| Loss
carried forward |
|
327.326 |
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|
| Operating
Performance |
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| The
clinker production was increased by 4.38% as compared to last year, Whereas
the cement production decreased by |
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| 13.62%.
The actual sales were also lower by 14.91% from the previous year mainly due
to decline in the demand as a result |
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| of
increase in supply of the new brands of cement. The summary is given below. |
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|
1997-98 |
1996-97 |
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|
(Tonnes) |
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| Clinker
Production |
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|
437,455 |
419,080 |
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| Cement
Production |
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|
418,670 |
484,685 |
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| Dispatches |
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|
416,305 |
489,276 |
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| The
booking price remained under stress till Feb. 98. The prices remained in the
range of Rs. 3,130 to Rs. 3,300 per tonne |
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| till
Jan. 98. These were increased from Rs. 3,300 to 4,470 per tonne in Feb. 98 to
June 98. However, at the end of June prices |
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| once
again started to decline. |
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|
| Marketing |
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| The
company was successful in retaining its main market inspite of very tough
competition prevailing in the market due to |
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| excessive
supply of the cement. The product acceptability remained satisfactory in the
eyes of the customer. |
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|
| Development
and Maintenance |
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| Power
Plant has started its commercial production since Oct. 98. This captive power
plant will supply power to the factory |
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| and
workers colony. It will give a major relief in electricity bills and
favourable impact on the cash flow of the company. |
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| However,
considerable amount of civil work was deferred due to financial constraints.
This will be completed in the |
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| forthcoming
financial year. |
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| The
cement plant performance remained satisfactory and its normal maintenance has
been carried out throughout the year. |
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| Pattern
of Shareholding |
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| Pattern
of Shareholding of the company is annexed. |
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|
| Dividend |
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| No
dividend is recommended due to loss suffered by the company. |
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|
| Auditors |
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| M/s
Hameed Chaudhri & Co. Chartered Accountants, the retiring auditors, being
eligible offer themselves for |
|
| re-appointment. |
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| Future
Outlook |
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| As
explained above that over supply of cement in the country and due to heavy
taxation in terms of central excise |
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| duty
@ 40% of the retail sales price imposed by the Government, the industry will
remain under pressure. In order to save |
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| the
industry from a total collapse the Government should take extensive measures
i.e. reduction of excise duty and |
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| facilitation
of export of cement and undertaking of development projects in the country. |
|
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| Commissioning
of our own power plant and stringent cost controls undertaken by the
management will help to strengthen |
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| the
financial position of the company. |
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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 exists between the labour and management. It is hoped that
they will continue to work with same |
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| zeal
and spirit. |
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|
For and on behalf of the Board |
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| Lahore,
December 3rd, 1998. |
|
FAROOQ ZAMAN |
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|
CHIEF EXECUTIVE |
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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, 1998 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: |
|
|
| a)
in our opinion, proper books of account have been kept by the Company as
required by the Companies |
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| 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 |
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| conformity
with the Companies Ordinance, 1984 and are in agreement with the books of
account and are |
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| 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 in accordance |
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| with
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 |
|
| information
required by 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 30 June, 1998 and of the loss and
the cash flows for the year then |
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| ended; and |
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|
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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 CHAUDHRI & CO. |
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| Lahore:
3rd December, 1998 |
|
CHARTERED ACCOUNTANTS |
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|
| PATTERN
OF SHAREHOLDING AS AT 30 JUNE, 1998 |
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| Share Holding |
No. of |
No. of |
Percentage |
|
|
| From |
To |
Share |
Shares Held |
of Issued |
|
|
|
Holders |
|
Capital |
|
| 1 |
100 |
714 |
29,270 |
0.17 |
|
| 101 |
500 |
498 |
128,372 |
0.76 |
|
| 501 |
1000 |
244 |
167,470 |
1.00 |
|
| 1001 |
5000 |
313 |
676,561 |
4.01 |
|
| 5001 |
10000 |
55 |
366,642 |
2.17 |
|
| 10001 |
15000 |
11 |
132,808 |
0.79 |
|
| 15001 |
20000 |
4 |
67,359 |
0.40 |
|
| 20001 |
30000 |
5 |
117,623 |
0.70 |
|
| 30001 |
9999999 |
14 |
15,190,312 |
90.00 |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
|
|
1858 |
16,876,417 |
100 |
|
| ========== |
========== |
========== |
========== |
========== |
|
|
|
|
No. of |
No. of |
Percentage |
|
| Categories
of Share Holders |
Share |
Shares Held |
of Issued |
|
|
Holders |
|
Capital |
|
|
| Individuals |
|
1816 |
1,536,737 |
9.106 |
|
| Investment
Companies |
|
3 |
1,007,992 |
5.973 |
|
| Insurance
Companies |
|
6 |
3,682,937 |
21.823 |
|
| Financial
Institutions |
|
10 |
1,872,345 |
11.094 |
|
| Private
Limited Companies |
14 |
92,912 |
0.551 |
|
| Foreign
Investors |
|
2 |
8,564,224 |
50.747 |
|
| Corporations |
|
1 |
61,301 |
0.363 |
|
| Corporate
Law Authority |
1 |
11 |
0.000 |
|
| Others |
|
5 |
57,958 |
0.343 |
|
|
|
---------- |
---------- |
---------- |
|
| Grand Total |
|
1858 |
16,876,417 |
100.000 |
|
|
|
|
========== |
========== |
========== |
|
|
| 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 30 JUNE, 1998 |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
1998 |
1997 |
|
| Note |
|
|
|
|
(Rupees in thousand) |
|
| Authorised |
|
|
|
| 50,000,000
ordinary |
|
|
|
| shares
of Rs. 10 each |
|
|
500,000 |
500,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
3 |
168,764 |
168,764 |
|
| General
reserve |
|
|
332,000 |
332,000 |
|
| Accumulated
loss |
|
|
(327,326) |
(247,660) |
|
|
|
|
---------- |
---------- |
|
|
|
|
173,438 |
253,104 |
|
|
|
|
|
| SURPLUS
ON REVALUATION OF FIXED |
|
|
|
| ASSETS |
|
4 |
993,804 |
993,804 |
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
| SUBJECT
TO FINANCE LEASE |
|
5 |
145,228 |
124,574 |
|
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
|
| Deferred
taxation |
|
6 |
14,687 |
15,581 |
|
| Vacation
benefits |
|
7 |
6,548 |
7,495 |
|
| Deposits
from customers |
|
8 |
8,035 |
14,900 |
|
|
|
|
---------- |
---------- |
|
|
|
|
29,270 |
37,976 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
portion of liabilities against |
|
|
| assets
subject to finance lease |
|
5 |
21,014 |
25,132 |
|
| Short
term finance |
|
9 |
48,310 |
33,135 |
|
| Creditors,
accrued and other liabilities |
10 |
236,041 |
152,699 |
|
| Taxes
and duties |
|
11 |
44,843 |
52,320 |
|
| Unclaimed
dividend |
|
|
3,038 |
3,106 |
|
|
|
|
---------- |
---------- |
|
|
|
|
353,246 |
266,392 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
12 |
---------- |
---------- |
|
|
|
|
1,694,986 |
1,675,850 |
|
|
|
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
fixed assets |
|
13 |
867,731 |
912,182 |
|
| Capital
work-in-progress |
|
14 |
297,645 |
311,421 |
|
| Stores
held for capital expenditure |
|
1,905 |
3,926 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,167,281 |
1,227,529 |
|
|
|
|
|
| LONG
TERM INVESTMENTS |
|
15 |
150,042 |
2,719 |
|
|
|
|
|
|
| LONG
TERM DEPOSITS AND |
|
|
|
|
| PREPAYMENTS |
|
16 |
12,279 |
1,174 |
|
|
|
|
|
| LONG
TERM LOANS AND ADVANCES |
|
17 |
22,102 |
29,467 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores,
Spares and loose tools |
|
18 |
114,989 |
122,420 |
|
| Stock-in-trade |
|
|
19 |
89,806 |
26,790 |
|
| Trade
debtors |
|
|
20 |
0 |
0 |
|
| Loans,
advances, deposits, prepayments |
|
|
| and
other receivables |
|
21 |
94,719 |
221,981 |
|
| Short
term investments |
|
22 |
504 |
980 |
|
| Cash
and bank balances |
|
23 |
43,264 |
42,790 |
|
|
|
|
---------- |
---------- |
|
|
|
|
343,282 |
414,961 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
1,694,986 |
1,675,850 |
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
| M.
NIAZ PERACHA |
|
FAROOQ ZAMAN |
|
| DIRECTOR |
|
CHIEF EXECUTIVE |
|
|
|
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE, 1998 |
|
|
|
|
|
Note |
1998 |
1997 |
|
|
|
|
|
(Rupees in thousand) |
|
|
|
|
| SALES - net |
|
24 |
797,528 |
899,671 |
|
| COST
OF SALES |
|
25 |
840,692 |
1,089,982 |
|
|
|
|
---------- |
---------- |
|
| GROSS
(LOSS) |
|
|
(43,164) |
(190,311) |
|
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
|
| General
and administrative |
|
26 |
33,977 |
38,117 |
|
| Selling
and distribution |
|
27 |
9,341 |
13,342 |
|
| Financial
charges |
|
28 |
49,390 |
4,731 |
|
| Other
charges |
|
29 |
998 |
169 |
|
|
|
|
---------- |
---------- |
|
|
|
|
93,706 |
56,359 |
|
|
|
|
---------- |
---------- |
|
| OPERATING
(LOSS) |
|
|
(136,870) |
(246,670) |
|
|
|
|
|
|
| OTHER
INCOME |
|
30 |
61,047 |
20,238 |
|
|
|
|
|
---------- |
---------- |
|
| (LOSS)
BEFORE TAXATION |
|
|
(75,823) |
(226,432) |
|
|
|
|
|
|
| PROVISION
FOR TAXATION |
|
|
|
|
| Current
and prior years |
|
11.1 |
4,737 |
26,447 |
|
| Income
tax refunds |
|
|
0 |
(838) |
|
| Deferred |
|
6 |
(894) |
(3,319) |
|
|
|
|
---------- |
---------- |
|
|
|
|
3,843 |
22,290 |
|
|
|
|
---------- |
---------- |
|
| (LOSS)
AFTER TAXATION |
|
|
(79,666) |
(248,722) |
|
|
|
|
|
|
| (ACCUMULATED
Loss)/ |
|
|
|
|
| UNAPPROPRIATED
PROFIT |
|
|
|
|
| - Brought forward |
|
|
(247,660) |
1,062 |
|
|
|
|
---------- |
---------- |
|
| (ACCUMULATED
LOSS) |
|
|
|
|
| - Carried to Balance Sheet |
|
|
(327,326) |
(247,660) |
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
M. NIAZ PERACHA |
|
|
FAROOQ ZAMAN |
|
|
DIRECTOR |
|
|
CHIEF EXECUTIVE |
|
|
|
|
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE, 1998 |
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
(Rupees in thousand) |
|
|
|
|
| NET
CASH INFLOW/(OUTFLOW) FROM |
|
|
|
|
|
|
|
| OPERATING
ACTIVITIES (Note 'A') |
|
|
116,641 |
(207,345) |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Fixed
capital expenditure |
|
|
(3,676) |
(68,504) |
|
| Long
term investments in Subsidiary Company |
|
(147,430) |
0 |
|
| Sale
proceeds of operating fixed assets |
|
2,324 |
1,450 |
|
| Exchange
fluctuation gain |
|
8,836 |
10,423 |
|
| Dividend
received |
|
1 |
13 |
|
| Interest
received |
|
2,925 |
6,730 |
|
|
|
---------- |
---------- |
|
| NET
CASH (OUTFLOW) FROM |
|
|
|
| INVESTING
ACTIVITIES |
|
(137,020) |
(49,888) |
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Lease
finances - net |
|
16,536 |
135,693 |
|
| Short
term finances - net |
|
15,175 |
15,643 |
|
| Mark-up
on short term finances paid |
|
(4,176) |
(2,190) |
|
| Lease
finance charges paid |
|
(6,614) |
(784) |
|
| Dividend
paid |
|
(68) |
(83) |
|
|
|
---------- |
---------- |
|
| NET
CASH INFLOW FROM FINANCING ACTIVITIES |
|
20,853 |
148,279 |
|
|
|
|
---------- |
---------- |
|
| NET
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS |
474 |
(108,954) |
|
|
|
|
|
| CASH
AND CASH EQUIVALENTS |
|
|
|
|
|
|
| -
At the beginning of the year |
|
42,790 |
151,744 |
|
|
|
---------- |
---------- |
|
| CASH
AND CASH EQUIVALENTS |
|
|
|
|
|
|
| -
At the end of the year |
|
|
43,264 |
42,790 |
|
|
|
|
|
========== |
========== |
|
|
| The
annexed note 'A' forms an integral part of this Statement. |
|
|
|
M. NIAZ PERACHA |
|
|
FAROOQ ZAMAN |
|
|
DIRECTOR |
|
|
CHIEF EXECUTIVE |
|
|
|
