| Javeden Cement Limited |
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| Annual
Report 1998 |
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| CONTENTS |
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| Corporate
Information |
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| Notice
of Annual General Meeting |
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| Directors'
Report to the Shareholders |
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| Pattern
of Shareholding |
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| Auditors'
Report to the Members |
|
| Balance
Sheet |
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| Profit
and Loss Account |
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| Statement
of Changes in Financial Position |
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| Notes
to the Accounts |
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| CORPORATE
INFORMATION |
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| BOARD
OF DIRECTORS: |
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|
Muhammad Nawaz Tiwana |
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Chairman |
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M. P. Gangwani |
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Managing Director |
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Hussain Ahmed Khan |
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Razi-ur-Rehman Khan |
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Behram Hassan |
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Mohammad Sharif Shafique |
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Muhammad Shamim Siddiqui |
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Muhammad Ashraf Chaudhry |
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Khawaja Saqib Naim |
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| SECRETARY: |
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Muhammad Yasin |
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| AUDITORS: |
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Taseer Hadi Khalid &
Co. |
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Chartered Accountants, |
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Karachi |
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| BANKERS: |
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Muslim Commercial Bank
Ltd. |
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National Bank of Pakistan |
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|
Habib Bank Ltd. |
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| REGISTERED
OFFICE: |
Al-Haroon, 2nd Floor |
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10-Agha Khan III Road, |
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Karachi-74400 |
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Tel: 7725961-62 |
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Fax: 92-21-7767302 |
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Telegram: JAVCEMT |
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| WORKS: |
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Manghopir, |
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Karachi-75890 |
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Tel: 6980026-27 |
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Fax: 92-21-6980132 |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 36th Annual General Meeting of Shareholders of
Javedan Cement |
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| Limited,
Karachi, will be held at 5.00 p.m. on Thursday, the 31st December, 1998, at
Hotel Paradise, |
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| Abdullah
Haroon Road, Saddar, Karachi-3, in order to transact the following business:- |
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| 1.
To confirm the Minutes of the Last Annual General Meeting. |
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|
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| 2.
To receive and adopt the Audited Accounts of the Company for the year ended |
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| 30th
June, 1998, together with the Reports of Directors and Auditors thereon. |
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| 3.
To appoint Auditors and fix their remuneration. M/s. Taseer Hadi Khalid &
Company., Chartered |
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| Accountants,
have offered themselves for re-appointment as Auditors of the Company for the |
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| year
1998-99. |
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| 4.
Any other business with the permission of the Chair. |
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|
By order of the Board |
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|
MUHAMMAD YASIN |
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|
Company Secretary |
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| Karachi,
8th December, 1998. |
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| NOTES: |
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| 1.
The Share Transfer books of the Company will remain closed from 22.12.1998 to
31.12.1998 |
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| (both
days inclusive) to effect the transfer of shares, as at the close of business
on |
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| 21.12.1998. |
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| 2.
Shareholders are requested to immediately notify the Company of change in
their |
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| addresses,
if any. |
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| 3.
Shareholders are further requested to quote their Folio numbers in all
correspondence with |
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| the
Company and at the time of attending Annual General Meeting. |
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| 4.
Those shareholders who have not collected their Share Certificates and/or
dividend warrants |
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| for
the previous years are requested to please collect the same from the Company
in person/ |
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| through
authorised representatives and or by post. |
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| 5.
A member entitled to attend and vote at this meeting is entitled to appoint
another member |
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| as
his/her proxy to attend and vote instead of him/her. Proxies, in order to be
effective must |
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| be
received at the Registered Office of the Company not less than 48 hours
before the time |
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| appointed
for the Meeting. |
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| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
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| The
Directors welcome the members at the 36th Annual General Meeting of the
Company |
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| and
have pleasure in presenting Annual Report alongwith Audited Accounts and
Auditors' Report |
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| thereon,
for the year ended June 30th 1998. The Company during the year under review
sustained |
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| a
loss of Rs. 64.730 million before tax as against net loss of Rs. 90.604
million during the |
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| year
1996-97. The reasons for incurring losses of Rs. 64.730 million were on
account of lower |
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| despatches
of cement and lower sales price in competition with the private sector
companies. |
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| After
seven months there was a little spur in the market, the company increased the
sale price |
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| and
did earn some profits. Then the market was flooded with cheaper cement. The
demand |
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| diminished
further and we lost the ground we had gained. The performance of the company |
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| in
terms of production and sales in the year under review is as follows: |
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| PRODUCTION: |
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| We
are pleased to inform the members that the Company produced 398,538 tonnes of |
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| clinker
and 453,496 tonnes of cement in the year under review. |
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| The
production of the year under review is compared with that of last year
hereunder: |
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|
|
|
Increase/ |
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|
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|
(Decrease) |
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|
|
|
Over Last |
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|
1997-98 |
1996-97 |
Year |
|
|
(Tonnes) |
(Tonnes) |
(Tonnes) |
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|
| Clinker
Production |
|
398,538 |
391,723 |
6,815 |
|
| Cement
Production |
|
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|
| Ordinary
Portland Cement |
|
331,243 |
312,133 |
19,110 |
|
| Slag
Cement |
|
108,687 |
171,062 |
(62,375) |
|
| Sulphate
Resisting Cement |
|
13,566 |
22,421 |
(8,855) |
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|
---------- |
---------- |
---------- |
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|
453,496 |
505,616 |
(52,120) |
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|
========== |
========== |
========== |
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| MARKETING: |
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| Cement
market in general and of our area in particular remained slum during greater
part of year |
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| due
to socio-economic conditions prevailing in the country. The market was
further depressed by |
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| dumping
of cement by private sector. These factors caused a decrease of 71,016 tonnes
in our sales |
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| volume
as compared to the Last Year's. Comparison of sales for the year with that of
the last year |
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| is
summarized below: |
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|
|
|
Increase/ |
|
|
|
|
(Decrease) |
|
|
|
|
Over Last |
|
|
1997-98 |
1996-97 |
Year |
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|
(Tonnes) |
(Tonnes) |
(Tonnes) |
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|
| Ordinary
Portland Cement |
|
323,478 |
318,776 |
4,702 |
|
| Slag
Cement |
|
106,200 |
171,764 |
(65,564) |
|
| Sulphate
Resisting Cement |
|
11,879 |
22,033 |
(10,154) |
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|
---------- |
---------- |
---------- |
|
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|
441,557 |
512,573 |
(71,016) |
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|
========== |
========== |
========== |
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| DIVIDEND: |
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| In
view of the losses, no dividend is being recommended for the year 1997-98. |
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|
| DIRECTORS: |
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| Since
the last Annual General Meeting, the following changes have taken place in
the Board |
|
| of
Directors of the Company:- |
|
|
| (1)
Mr. M.P. Gangwani has taken over the charge of the post of Managing Director
with |
|
| effect
from 13th November, 1998 in place of Mr. Uqaili, M. Hussain. |
|
|
| (2)
Mr. Uqaili, M. Hussain, had taken over the charge of the post of Managing
Director |
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| with
effect from 09th June, 1998 in place of Mr. Sayed Amir Ali Shah. |
|
|
| (3)
Mr. Hussain Ahmed Khan has been nominated as Director by the Federal
Government |
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| w.e.f.
12th August, 1998. in place of Mr. Tehsin K. Iqbal. |
|
|
| (4)
Mr. Muhammad Shamim Siddiqui, representing private shareholders of the
Company |
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| has
been elected as Director, in accordance with Section 178 of the Companies
Ordinance |
|
| 1984
and Article 87 of the Articles of Association of the Company in the Extra
Ordinary |
|
| Meeting
of the Company held on 18th April 1998. |
|
|
| (5)
Mr. Khawaja Saqib Naim, has been nominated as Director in place of Mr. Abdul
Qayyum. |
|
|
| While
welcoming the new Directors, we place on record our deep appreciation for the
valuable |
|
| services
rendered by the outgoing Directors and Managing Directors. The Board also
records |
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| its
deep condolence on the sad demise of their Board colleague Mr. Abdul Qayyum,
who was |
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| very
active member of the Board of Directors of the Company. |
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|
| AUDITORS: |
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| Present
Auditors M/s. Taseer Hadi Khalid & Co., Chartered Accountants, retire and
being |
|
| eligible
have offered themselves for re-appointment. |
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|
| ACKNOWLEDGEMENT: |
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| The
Chairman & Directors of the Company place on record their appreciation
for the hard |
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| work
done by the Workers, Staff and Officers of the Company during the year
1997-98 with |
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| the
hope that they would accelerate their joint efforts and dedication for
achieving yet better |
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| results
during the forthcoming years. |
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|
For and on behalf of the Board |
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|
(M.P. GANGWANI) |
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|
Managing Director |
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| Karachi:
8th December, 1998 |
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|
|
| FORM
"A" |
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| PATTERN
OF HOLDING OF THE SHARES |
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| AS
AT 30TH JUNE, 1998 |
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| No. of |
From |
To |
Total |
|
| Shareholders |
|
shares held |
|
|
|
| 1744 |
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 |
|
| ---------- |
|
---------- |
|
| 2507 |
|
8,800,000 |
|
| ========== |
|
========== |
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|
| Categories
of Shareholders |
Number |
Shares held |
Percentage |
|
|
| 1.
Individuals |
|
2495 |
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 |
|
|
---------- |
---------- |
---------- |
|
|
2507 |
8,800,000 |
100.00 |
|
|
========== |
========== |
========== |
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|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of Javedan Cement Limited as at 30th
June, |
|
| 1998
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 accounts 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 30th June, 1998 and of the loss and the changes in financial position |
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| for
the year then ended; |
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|
|
|
|
|
| d)
In our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, |
|
| 1980; and |
|
|
|
|
| e)
Without qualifying our opinion, we draw attention to the fact that the
company |
|
| has
suffered losses amounting to Rs. 246,553,801 upto the year ended 30th June, |
|
| 1998
which resulted in negative equity of Rs. 83,088,199 and as of that date, |
|
| the
company's current liabilities exceeded its current assets by Rs. 52,677,442. |
|
| These
financial statements have been prepared on a going concern basis, the |
|
| validity
of which is dependent on the continuing financial support by the parent |
|
| company,
State Cement Corporation of Pakistan (Private) Limited. |
|
|
| Karachi,
8th December, 1998. |
|
TASEER HADI KHALID & CO. |
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|
|
|
|
Chartered Accountants |
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|
|
|
| BALANCE
SHEET AS AT 30TH JUNE, 1998 |
|
|
|
(RUPEES) |
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|
Notes |
1998 |
1997 |
|
| 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 |
|
|
|
|
|
| Capital
Reserve |
|
|
|
11,965,602 |
11,965,602 |
|
| General
Reserve |
|
|
|
63,500,000 |
63,500,000 |
|
| Accumulated
losses carried forward |
|
(246,553,801) |
(227,435,022) |
|
|
|
|
---------- |
---------- |
|
|
|
|
(83,088,199) |
(63,969,420) |
|
| LONG
TERM LOANS - SECURED |
|
4 |
285,000,000 |
388,000,000 |
|
| DEFERRED
TAXATION |
|
|
|
- |
50,829,297 |
|
| LONG
TERM DEPOSITS |
|
|
5 |
604,107 |
5,284,107 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Finance
under markup |
|
|
|
|
| arrangement
- secured |
|
|
- |
12,996,356 |
|
| Short
term loans - Unsecured |
|
6 |
30,000,000 |
- |
|
| Current
maturity and overdue |
|
|
|
| installments
of long term loans |
|
7 |
149,000,000 |
46,000,000 |
|
| Due
to parent company - Unsecured |
8 |
10,931,718 |
16,095,660 |
|
| Accrued
markup on long term and |
|
|
|
| short
term loans |
|
|
130,560,483 |
68,041,852 |
|
| Creditors,
accrued expenses and |
|
|
|
| other
liabilities |
|
9 |
108,208,737 |
80,902,535 |
|
| Provision
for taxation |
|
|
9,553,624 |
4,725,772 |
|
| Unclaimed
dividend |
|
|
|
1,964,127 |
1,965,934 |
|
|
|
|
---------- |
---------- |
|
|
|
|
440,218,689 |
230,728,109 |
|
| CONTINGENCIES |
|
|
10 |
- |
- |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
642,734,597 |
610,872,093 |
|
|
|
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
|
|
|
|
|
|
|
| Operating
Fixed Assets |
|
11 |
223,931,170 |
242,877,465 |
|
|
| Capital
Work-in-Progress |
|
|
- |
2,302,628 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
223,931,170 |
245,180,093 |
|
|
| LONG
TERM DEPOSITS |
|
|
12 |
5,612,554 |
4,492,203 |
|
|
| LONG
TERM LOANS TO |
|
|
|
|
|
|
| EMPLOYEES
- Considered good |
|
13 |
25,649,626 |
21,356,975 |
|
|
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
| Stores
and Spares |
|
|
14 |
150,335,222 |
177,632,035 |
|
|
| Stock-in-Trade |
|
|
15 |
111,265,372 |
73,733,716 |
|
|
| Trade
Debtors- Unsecured |
|
|
|
|
|
| considered
good |
|
16 |
1,174,542 |
1,176,775 |
|
|
| Due
from Associated Companies |
|
|
|
|
|
| -
Unsecured Considered good |
|
17 |
1,040,744 |
815,781 |
|
|
| Current
Maturity of Long Term |
|
|
|
|
|
| loans
to Employees |
|
|
9,732,014 |
8,205,729 |
|
|
| Advances,
Deposits, Prepayments |
|
|
|
|
|
| and
Other Receivables |
|
18 |
41,254,020 |
43,347,026 |
|
|
| Cash
and Bank Balances |
|
19 |
72,739,333 |
34,931,760 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
387,541,247 |
339,842,822 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
642,734,597 |
610,872,093 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
MUHAMMAD NAWAZ TIWANA |
|
M.P. GANGWANI |
|
|
Chairman |
|
Managing Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30TH JUNE, 1998 |
|
|
|
|
|
|
(RUPEES) |
|
|
|
Notes |
1998 |
1997 |
|
|
|
|
| SALES
- Net |
|
20 |
928,402,195 |
944,063,064 |
|
| COST
OF GOODS SOLD |
|
21 |
(912,700,556) |
(949,948,964) |
|
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT/(LOSS) |
|
|
15,701,639 |
(5,921,900) |
|
| OPERATING
EXPENSES |
|
22 |
(26,570,607) |
(23,290,907) |
|
|
|
|
---------- |
---------- |
|
| OPERATING
(LOSS) |
|
|
(10,868,968) |
(29,212,807) |
|
| FINANCIAL
CHARGES |
|
23 |
(64,231,717) |
(74,012,030) |
|
|
|
|
---------- |
---------- |
|
|
|
|
(75,100,685) |
(103,224,837) |
|
| OTHER
INCOME |
|
24 |
10,370,343 |
11,620,569 |
|
|
|
|
---------- |
---------- |
|
| LOSS
BEFORE TAXATION |
|
|
(64,730,342) |
(91,604,268) |
|
|
|
|
|
|
| TAXATION |
|
|
|
|
| Current |
|
|
(4,827,851) |
(4,724,790) |
|
| Prior |
|
|
(389,883) |
2,013,275 |
|
| Deferred |
|
|
50,829,297 |
(15,829,297) |
|
|
|
|
---------- |
---------- |
|
|
|
|
45,611,563 |
(18,540,812) |
|
|
|
|
---------- |
---------- |
|
| LOSS
AFTER TAXATION |
|
|
(19,118,779) |
(110,145,080) |
|
| ACCUMULATED
LOSSES BROUGHT FORWARD |
|
(227,435,022) |
(117,289,942) |
|
|
|
|
|
---------- |
---------- |
|
| ACCUMULATED
LOSSES CARRIED FORWARD |
|
(246,553,801) |
(227,435,022) |
|
|
|
|
========== |
========== |
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
MUHAMMAD NAWAZ TIWNA |
|
M.P. GANGWANI |
|
|
Chairman |
|
Managing Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE YEAR ENDED 30TH JUNE, 1998 |
|
|
|
|
|
|
|
|
(RUPEES) |
|
|
|
|
1998 |
1997 |
|
|
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
| Loss
before taxation |
|
(64,730,342) |
(91,604,268) |
|
| Adjustments
for: |
|
|
|
| Depreciation |
|
25,567,325 |
27,772,153 |
|
| Assets
written-off |
|
- |
43,655 |
|
| Provision
for Gratuity |
|
2,003,614 |
2,014,480 |
|
| Gain
on Disposal of Fixed Assets |
|
(117,199) |
(38,193) |
|
| Liabilities
written back |
|
- |
(7,748,177) |
|
| Financial
Charges |
|
64,231,71 7 |
74,012,030 |
|
|
|
---------- |
---------- |
|
|
|
26,955,115 |
4,451,680 |
|
|
|
|
|
|
|
| Changes
in operating assets and liabilities |
|
|
| Decrease
in Stores and Spares |
|
27,296,813 |
6,740,199 |
|
| (Increase)/Decrease
in Stock-in-Trade |
|
(37,531,656) |
55,920,416 |
|
| Decrease
in Trade Debts |
|
2,233 |
85,208 |
|
| (Increase)/Decrease
due from Associated Companies |
(224,963) |
2,912,838 |
|
| Decrease/(Increase)
in advances, deposits, |
|
|
|
| prepayments
and other receivables |
|
7,709,012 |
(8,945,258) |
|
| (Decrease)
in long term deposits |
|
(4,680,000) |
- |
|
| (Decrease)/Increase
due to Parent Company |
|
(5,163,942) |
6,937,133 |
|
| Increase/(Decrease)
in Creditors, Accrued Expenses |
|
|
| and
Other Liabilities |
|
28,079,196 |
(31,874,326) |
|
|
|
---------- |
---------- |
|
|
|
42,441,808 |
36,227,890 |
|
|
|
|
|
| Income
Tax Paid |
|
(6,005,889) |
(12,459,685) |
|
| Long
Term Deposits Paid |
|
(1,120,351) |
232,727 |
|
| Loans
Given to Employees |
|
