| KOHAT CEMENT COMPANY LIMITED |
|
|
|
|
|
|
|
|
|
| ANNUAL
REPORT 1998 |
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|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors
Report |
|
| Yearwise
Statistical Summary |
|
| Auditor's
Report |
|
| Balance
Sheet |
|
| Profit
& Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| COMPANY
INFORMATION |
|
|
| Board
of Directors |
|
|
|
| Chairman |
|
Atta Mohammad Sheikh |
|
| Chief
Executive |
|
Aizaz Mansoor Shiekh |
|
|
|
Nadeem Atta Sheikh |
|
|
|
Nadeem Qadir |
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|
Mian Mohammad Riaz |
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|
|
Mrs. Khalida Asghar |
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|
|
Mrs. Khawar Sultana |
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|
|
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| Company
Secretary |
|
Fazal Karim Khattak |
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|
|
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| Auditors |
|
Viqar A. Khan |
|
|
|
Chartered Accountants |
|
|
|
|
| Legal
Advisors |
|
Syed Shuja-ud-din Wasti |
|
|
|
|
| Bankers |
|
Allied Bank of Pakistan
Limited |
|
|
|
Askari Commercial Bank
Limited |
|
|
|
Citibank N.A. |
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|
|
Habib Bank Limited |
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|
|
Muslim Commercial Bank
Limited. |
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|
National Bank of
Pakistan. |
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|
Prime Commercial Bank
Limited |
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The Bank of Khaber. |
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|
Union Bank Limited. |
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| Registered
Office & Works |
Kohat Cement Company
Limited |
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|
Rawalpindi Road, Kohat. |
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Tel: (0922) 560401-04 |
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Fax: (0922) 560405 |
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|
Telex: 52431 KCCL Pk. |
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| Lahore
Office |
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House No. 1,43 FCC, |
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|
Gulberg IV, Lahore. |
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Tel.: (042) 5754357-8,
5752699 |
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Fax: (042) 5754084 |
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| NOTICE
OF THE ANNUAL GENERAL MEETING |
|
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| Notice
is hereby given filet tile 19th Annual General Meeting of the Shareholders of
Kohat |
|
| Cement
Company Limited, will be held at its Registered Office, Rawalpindi Road,
Kohat on |
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| Wednesday,
30th,December, 1998 at 11.00 A.M. to transact tile following Business. |
|
|
| ORDINARY
BUSINESS |
|
|
| 1)
To confirm the minutes of the Extra Ordinary General Meeting held on June 29,
1998. |
|
|
| 2)
To receive, consider and adopt the Audited Accounts of the Company for the
year ended |
|
| June
30, 1998 and Reports of Directors and Auditors thereon. |
|
|
| 3)
To appoint Auditors for the year 1998-99 and to fix their remuneration. The
present Auditors |
|
| M/s
Viqar A. Khan, Chartered Accountants, being eligible, offer themselves for
re-appointment. |
|
|
| 4)
To transact any other business with tile permission of tile Chair. |
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|
| SPECIAL
BUSINESS |
|
|
|
| 5)
To approve the remuneration payable to Chief Executive and working Directors
of the Company. |
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|
|
By Order of the Board, |
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|
|
|
|
|
|
(FAZAL KARIM KHATTAK) |
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|
Company Secretary |
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|
| KOHAT |
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| Dated:
December 08, 1998. |
|
|
| NOTE: |
|
| 1)
A member entitled to attend, speak and vote at this meeting may appoint
another member as proxy |
|
| to
attend, speak and vote on his/her behalf. Proxies in order to be effective
must be received at |
|
| Registered
Office of the Company not later than 48 hours before the meeting. |
|
|
| 2)
Members should quote their folio number in all correspondence with the
Company and at tile |
|
| time
of attending the Annual General Meeting. |
|
|
| 3)
Statement Under Section 160 of the Company Ordinance, 1984 pertaining to
Special Business. |
|
|
| To
consider and pass, with or without amendment, following as a Special
Resolution. |
|
|
| "RESOLVED
that remuneration of Rs. 1,087,145/- (Rupees One Million Eighty Seven
Thousand One |
|
| Hundred
Forty Five Only) payable to Chief Executive and working Directors
respectively be and is |
|
| hereby
approved" |
|
|
|
| DIRECTORS'
REPORT |
|
|
| Your
Directors take pleasure in presenting their Annual Report together with
Audited Accounts and |
|
| the
Auditors' Report thereon for the year ended June 30, 1998. |
|
|
| PRODUCTION |
|
| Comparative
figures for production of Clinker and Cement are as under: |
|
|
|
1997-98 |
1996-97 |
Increase |
|
|
|
(Tonnes) |
(Tonnes) |
(Tonnes) |
|
| Clinker |
|
348,608 |
245,676 |
102,932 |
|
| Cement |
|
366,500 |
269,603 |
96,997 |
|
|
| Capacity
utilization has only been 65% due to depressed market conditions and overall
excess Cement |
|
| production
capacity in the Country. |
|
|
| The
Company sold 366,342 metric tonnes of cement as against 269,493 metric tonnes
in the preced |
|
| year. |
|
|
| OPERATING
RESULTS |
|
| During
the year under review the Company sustained a pre-tax loss of Rs. 1.025
million against a |
|
| loss
of Rs. 38.133 million for the previous year. |
|
|
|
|
|
|
|
(Rupees in Thousands) |
|
|
|
|
1998 |
1997 |
|
|
|
|
| Net
Loss after Taxation |
|
|
|
(2,643) |
(40,771) |
|
| Un-
appropriated profit B/F |
|
|
19,821 |
60,592 |
|
|
|
|
|
---------- |
---------- |
|
| Carried
forward to Balance Sheet |
|
|
17, 179 |
19,821 |
|
|
|
========== |
========== |
|
|
| MARKET
REVIEW |
|
| Low
G.D.P. growth coupled with reduction in Government spending on development
projects has |
|
| led
the industry into crisis. Increase in input prices and depressed selling
prices has adversely affected |
|
| the
operating results of the Company. Presently there seems to be no improvement
in economic |
|
| activity
which will further weaken the cement industry. In order to save the industry
from collapse, |
|
| the
Government must take steps to rescue the cement industry. The industry at
present is not in a |
|
| position
to carry the burden of ever increasing input prices and high incidence of
excise duty and |
|
| other
taxes. |
|
|
| COST AUDIT |
|
| The
Corporate Law Authority, Government of Pakistan, enforced Cost Audit of
Cement Industry |
|
| through
SRO. No. 846(1)98 dated 24th July, 1998 effective financial year 1997-98
which has been |
|
| implemented
by the Company. |
|
|
| YEAR
2000 COMPLIANCE OF COMPUTER SYSTEM |
|
| Tim
Corporate Law Authority, in exercise of powers under section 246 of the
Companies Ordinance, |
|
| 1984
vide its circular He. 3/1998 dated October 05, 1998 has directed all listed
Companies to disclose |
|
| in
their future annual and half yearly accounts the status of the "year
2000 compliance". |
|
|
| Your
Company is taken necessary measures to ensure that necessary modifications
are made to the |
|
| computer
system to cope with any unforeseen happening. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| The
pattern of Shareholding of the Company as at June 30, 1998 is annexed with
the Annual |
|
| Report. |
|
|
| COMPANY
AUDITORS |
|
| Viqar
A. Khan, Chartered Accountants, the retiring Auditors, being eligible, offer
themselves |
|
| re-
appointment for the year 1998-99. |
|
|
| MANAGEMENT
EMPLOYEES RELATIONS |
|
| The
Board would like to record its appreciation for the valuable contribution
made by all its |
|
| employees. |
|
|
|
|
Sd/- |
|
|
|
(AIZAZ MANSOOR SHEIKH |
|
|
|
Chief Executive |
|
|
|
| YEARWISE
STATISTICAL SUMMARY |
|
|
|
|
(Rs. in Million) |
|
|
|
|
|
|
1998 |
1997 |
1996 |
1995 |
1994 |
1993 |
1992 |
1991 |
1990 |
1989 |
|
| ASSETS
EMPLOYED |
|
| Fixed
Assets |
|
789 |
862 |
805 |
346 |
357 |
373 |
399 |
413 |
433 |
465 |
| Investment
and Long Term |
|
| Advances
and Deposits |
|
37 |
39 |
40 |
27 |
4 |
3 |
6 |
4 |
4 |
0.3 |
| Current
Assets |
|
219 |
209 |
273 |
604 |
316 |
241 |
191 |
156 |
157 |
150 |
|
|
----------------------------------------------------------------------------------------------------------------------- |
| Total
Assets Employed |
|
1,045 |
1,111 |
1,119 |
977 |
677 |
617 |
596 |
573 |
594 |
615 |
|
|
======================================================================================================================= |
|
|
|
| FINANCED
BY |
|
|
| Shareholders
Equity |
|
406 |
408 |
449 |
453 |
414 |
267 |
115 |
185 |
187 |
193 |
| Long
Term Liabilities |
|
160 |
326 |
303 |
306 |
58 |
4 |
85 |
97 |
111 |
140 |
| Deferred
Liabilities |
|
12 |
11 |
11 |
11 |
11 |
17 |
100 |
2 |
8 |
7 |
| Current
Liabilities |
|
469 |
365 |
356 |
207 |
194 |
329 |
295 |
290 |
288 |
275 |
| Total
Funds Invested |
|
1,045 |
1,111 |
1,119 |
977 |
677 |
617 |
596 |
573 |
594 |
615 |
|
|
======================================================================================================================= |
|
|
|
| TURNOVER
AND PROFIT |
|
|
|
|
|
| Turnover
(Net) |
|
748 |
501 |
953 |
342 |
838 |
394 |
362 |
311 |
305 |
266 |
| Operating
Profit |
|
57 |
45 |
116 |
71 |
255 |
117 |
34 |
23 |
28 |
28 |
| Profit
(Loss) Before Taxation |
(1) |
(38) |
47 |
67 |
238 |
97 |
27 |
14 |
16 |
13 |
| Profit/(Loss)
After Taxation |
(3) |
(41) |
46 |
39 |
150 |
185 |
24 |
10 |
16 |
13 |
| Dividend |
|
|
- |
- |
50 |
- |
141 |
- |
- |
11 |
11 |
11 |
| Transfer
to Reserves |
|
- |
- |
- |
- |
77 |
85 |
- |
- |
- |
- |
| Profit C/F |
|
17 |
20 |
61 |
65 |
25 |
70 |
2 |
72 |
74 |
69 |
|
|
|
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of KOHAT CEMENT COMPANY LIMITED as at |
|
| June
30, i 998 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
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 purposes 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 and 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, 1998 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. |
|
|
|
|
|
|
(Viqar A. Khan) |
|
| LAHORE:
December 04, 1998 |
|
CHARTERED ACCOUNTANTS |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
|
Note |
Rupees |
Rupees |
|
| Share
Capital and Reserves |
|
|
|
|
|
| Authorised
share capital |
|
|
| 50,000,000
(1997: 50,000,000) ordinary |
|
| shares
of Rs. 10 each |
|
|
500,000,000 |
500,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up share capital |
|
| 21,933,334
(1997:21,933,334) ordinary |
|
| shares
of Rs. 10 each |
|
3 |
219,333,340 |
219,333,340 |
|
| Reserves |
|
4 |
169,120,028 |
169,120,028 |
|
| Accumulated
profit |
|
|
17,178,756 |
19,821,794 |
|
|
|
|
---------- |
---------- |
|
|
|
|
405,632,124 |
408,275,162 |
|
|
|
|
| Redeemable
Capital |
|
5 |
- |
14,750,000 |
|
| Liabilities
Against Assets Subject to Finance lease |
6 |
154,842,859 |
248,513,400 |
|
| Deferred
Liabilities |
|
7 |
11,663,462 |
11,345,701 |
|
| Long
Term Security Deposits |
|
8 |
4,710,000 |
6,965,000 |
|
|
|
|
|
| Current
Liabilities |
|
|
|
|
|
|
| Short
term finances |
|
9 |
121,550,768 |
113,770,842 |
|
| Current
portion of long term liabilities |
10 |
210,261,864 |
129,584,439 |
|
| Creditors,
accruals and other payables |
11 |
105,114,377 |
142,465,913 |
|
| Provision
for taxation |
|
|
31,382,689 |
34,765,055 |
|
| Dividend
payable |
|
|
239,473 |
254,033 |
|
|
|
|
---------- |
---------- |
|
|
|
|
468,549,171 |
420,840,282 |
|
|
|
|
|
| Contingencies
and Commitments |
|
12 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,045,397,616 |
########### |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
Sd/- |
|
|
|
CHIEF EXECUTIVE |
|
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Fixed
Capital Expenditure |
|
|
| Operating
fixed assets - tangible |
|
13 |
789,047,171 |
861,693,594 |
|
|
|
|
| Capital
work-in-progress |
|
14 |
173,082 |
187,591 |
|
|
|
|
---------- |
---------- |
|
|
|
|
789,220,253 |
861,881,185 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Long
Term Loans to Employees |
|
15 |
2,465,682 |
2,037,764 |
|
|
|
|
| Long
Term Deposits |
|
16 |
34,345,523 |
37,345,523 |
|
|
|
|
| Current
Assets |
|
|
|
|
|
|
| Stores,
spares and loose tools |
|
17 |
57,445,439 |
65,527,470 |
|
| Stock
in trade |
|
18 |
41,135,325 |
36,152,449 |
|
| Trade
debtors |
|
19 |
71,515,023 |
43,432,374 |
|
| Advances,
deposits, prepayments, |
|
|
|
| investments
and other receivables |
|
20 |
23,276,560 |
26,695,237 |
|
| Cash
and bank balances |
|
21 |
25,993,811 |
37,617,543 |
|
|
|
|
---------- |
---------- |
|
|
|
|
219,366,158 |
209,425,073 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,045,397,616 |
########### |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
Sd/- |
|
|
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 1998 |
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Sales |
|
22 |
747,966,749 |
501,170,370 |
|
| Cost
of goods sold |
|
23 |
665,197,448 |
438,623,359 |
|
| Gross
profit |
|
|
---------- |
---------- |
|
|
|
|
82,769,301 |
62,547,011 |
|
|
|
|
| Selling,
administrative and general expenses |
24 |
25,449,759 |
17,300,929 |
|
| Operating
profit |
|
|
|
---------- |
---------- |
|
|
|
|
57,319,542 |
45,246,082 |
|
|
|
|
|
| Other
income |
|
25 |
13,741,794 |
3,637,456 |
|
|
|
|
---------- |
---------- |
|
|
|
|
71,061,336 |
48,883,538 |
|
|
|
|
|
| Financial
charges |
|
26 |
72,086,740 |
87,016,521 |
|
|
|
|
---------- |
---------- |
|
| Loss
before taxation |
|
|
(1,025,404) |
(38,132,983) |
|
|
|
|
|
| Provision
for taxation |
|
|
|
| - Current |
|
|
(3,739,8341 |
(2,637,649) |
|
| - Prior year's |
|
2,122,200 |
- |
|
|
|
---------- |
---------- |
|
|
|
|
(1,617,634) |
(2,637,649) |
|
|
|
|
---------- |
---------- |
|
| Loss
after taxation |
|
|
(2,643,038) |
(40,770,632) |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
| Unappropriated
profit brought forward |
|
19,821,794 |
60,592,426 |
|
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
17,178,756 |
19,821,794 |
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Sd/- |
|
|
Sd/- |
|
|
CHIEF EXECUTIVE |
|
|
DIRECTOR |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE YEAR ENDED JUNE 30, 1998 |
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Cash
flows from operating activities |
|
|
|
|
| Cash
generated from operations |
|
A |
104,710,767 |
213,642,664 |
|
| Financial
charges paid |
|
|
(61,887,182) |
(50,375,850) |
|
| Income
tax paid/deducted at source |
|
|
(11,256,243) |
(20,302,971) |
|
|
|
|
---------- |
---------- |
|
| Net
cash inflow/(outflow) from operating activities |
31,567,342 |
142,963,843 |
|
|
|
|
|
|
|
| Cash
flows from investing activities |
|
| Fixed
capital expenditure |
|
(18,525,294) |
(157,662,609) |
|
| Net
(increase)/decrease in long term loans and deposits |
2,572,082 |
627,102 |
|
| Sale
proceeds of fixed assets |
|
1,988,876 |
6,265,975 |
|
| Profit/mark-up
on bank deposits and investments |
|
1,464,399 |
2,597,986 |
|
| Long
term security deposits |
|
(2,255,000) |
(1,670,000) |
|
|
|
|
---------- |
---------- |
|
| Net
cash inflow/(outflow) from investing activities |
(14,754,937) |
(149,841,546) |
|
|
|
|
| Cash
flows from financing activities |
|
| Repayment
of short term borrowings |
|
- |
(30,000,000) |
|
| Increase
in redeemable capital |
|
- |
71,254,516 |
|
| Repayment
of redeemable capital |
|
(11,725,000) |
- |
|
| Repayment
of finance lease liabilities |
|
(16,018,116) |
(18,496,438) |
|
| Dividend
paid |
|
(14,560) |
(13,795,365) |
|
|
|
---------- |
---------- |
|
|
|
(27,757,676) |
8,962,713 |
|
|
|
|
| Net
increase/(decrease) in cash and cash equivalents |
(10,945,271) |
2,085,010 |
|
| Cash
and cash equivalents at the beginning of the year |
(19,898,783) |
(21,983,793) |
|
|
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at the end of the year |
B |
(30,844,054) |
(19,898,783) |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Sd/- |
|
|
Sd/- |
|
|
CHIEF EXECUTIVE |
|
|
DIRECTOR |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE YEAR ENDED JUNE 30, 1998 |
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
|
Rupees |
Rupees |
|
| NOTE - A |
|
|
|
|
|
|
|
|
|
| Cash
flows from operating activities |
|
|
|
|
|
| Net
profit before taxation |
|
|
(1,025,404) |
(38,132,983) |
|
|
|
|
| Add/(Less)
adjustments for non cash |
|
|
|
| charges
and other items |
|
|
|
|
|
|
| Depreciation
on operating fixed assets |
|
89,603,829 |
77,014,969 |
|
| (Gain)/loss
on sale of fixed assets |
|
|
(755,571) |
28,175 |
|
| Provision
for earned leave (net) |
|
|
317,761 |
353,985 |
|
| Profit/mark-up
on bank deposits and investments |
|
(1,464,399) |
(2,597,986 |
|
| Financial
charges |
|
|
|
72,086,740 |
87,016,521 |
|
| Capital
Expenditure written off & charged to expenses |
28,050 |
- |
|
|
|
