| Mustehkam Cement Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 1998 |
|
|
|
| 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 |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
|
|
| BOARD
OF DIRECTORS |
|
| MUHAMMAD
NAWAZ TIWANA |
|
| Chairman |
|
|
| MUHAMMAD
AKRAM |
|
| Chief
Executive |
|
|
| MASOOD-UR-REHMAN
MASOOD |
|
|
| S.
M. FAKHIR HASAN |
|
|
| BEHRAM
HASSAN |
|
|
| MUHAMMAD
AKHTAR |
|
|
| MUHAMMAD
ASHRAF CHAUDHRY |
|
|
| SECRETARY |
|
| MAHMOOD
AHMED KHAN |
|
| Chartered
Secretary |
|
|
| AUDITORS |
|
| MUNIFF
ZIAUDDIN & CO., |
|
| Chartered
Accountants, |
|
| M-40/E,
Bank Road, |
|
| Rawalpindi
Cantt. |
|
|
| BANKERS |
|
| Habib
Bank Limited. |
|
| National
Bank of Pakistan |
|
|
| REGISTERED
OFFICE |
|
| Gul-e-Akra
Plaza, |
|
| 147-Murree
Road, |
|
| Rawalpindi
Cantt. |
|
|
| FACTORY |
|
| HATTAR, |
|
| Distt.
Haripur. |
|
|
|
| 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. |
|
| on
Wednesday the 30th December, 1998 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, 1998 together with the reports of directors and auditors |
|
| thereon. |
|
|
| 3.
To appoint auditors and fix their remuneration. |
|
|
| 4.
To transact any other ordinary business of the Company with the permission |
|
| of
the Chair. |
|
|
| The
share transfer books of the Company will remain closed from 24th December, |
|
| 1998
to 30th December, 1998 (both days inclusive). |
|
|
| RAWALPINDI |
|
By Order of the Board |
|
| Dated:
December 5, 1998 |
|
|
|
|
|
|
|
MAHMOOD AHMAD KHAN |
|
|
Secretary |
|
|
| Notes: |
|
|
| 1.
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. |
|
|
| 2.
Shareholders are requested to immediately notify the Company of any |
|
| change
in their address. |
|
|
| 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. |
|
|
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| The
Directors of your Company take pleasure in placing before you the 44th Annual |
|
| Report
together with the Audited Accounts and the Auditors' Report thereon for the
year |
|
| ended
30th June, 1998. |
|
|
| PRODUCTION |
|
| 330,370
tonnes of Clinker and 354,784 tonnes of cement was produced against the |
|
| target
of 288,000/302,400 tonnes respectively during the year 1997-98. |
|
|
| MARKETING |
|
| The
Company sold 354,462 tonnes of cement during the year against target of |
|
| 302,400
tonnes. |
|
|
| PRICING
POLICY |
|
| Unhealthy
price war experienced during last year persisted in the year under report |
|
| as
well, and we had to make downward revision in price many times upto
10-02-1998. |
|
| Upward
revision in price took place w.e.f. 18-02-1998 which raised our booking price
to |
|
| Rs.
4,110/- per tonne. This price remained operative upto 30th June, 1998. |
|
|
| FINANCIAL |
|
| Average
ex-factory price of cement was Rs. 3,637.88 per tonne and average |
|
| retention
price to the company after deduction of excise duty and SCCP cement |
|
| surcharge
was Rs. 2,121.60 per tonne against the cost to make and sell of Rs. 2,649.26 |
|
| per
tonne during the year. Retention price during the last year was Rs. 1,925.85
per tonne |
|
| against
the cost to make and sell of Rs. 2,288.39 per tonne. Manufacturing cost has |
|
| increased
mainly due to increase in the price of electricity and impact of peace
agreement |
|
| with
CBA with effect from 01-07-1997. Operational loss for the fiscal period was |
|
| Rs.
187.035 million and after addition of revenue/other income of Rs. 10.827
million, the |
|
| company
sustained a net loss for the year amounting to Rs.176.208 million. |
|
|
| The
results are summarised as under:- |
|
|
|
(Rupees in million) |
|
|
| Net
profit/(loss) for the year |
|
(176.208) |
|
| Adjustment
of prior year |
|
(12.431) |
|
|
---------- |
|
| Net
profit/(loss) before tax |
|
(163.777) |
|
| Balance
brought forward |
|
(181.822) |
|
|
---------- |
|
| Total
profit/(loss) |
|
(345.599) |
|
| Less:
provision for taxation |
|
(1.793) |
|
|
---------- |
|
| Net
profit/(loss) after tax |
|
(343.806) |
|
|
========== |
|
|
| DIRECTORS |
|
| Since
the last Annual General Meeting Mr. Ehsan Ullah Khan relinquished the |
|
| charge
to act as a Director and Mr. Masood-ur-Rehman Masood has been appointed |
|
| Director
in his place. |
|
|
| The
Directors place on record their appreciation for the valuable services
rendered |
|
| by
the outgoing Director and welcome the incoming Director on the Board. |
|
|
| AUDITORS |
|
| The
auditors Muniff Zia-ud-Din & Co., retire and offer their services for re- |
|
| appointment. |
|
|
| ACKNOWLEDGEMENT |
|
| The
relationship 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. |
|
|
|
For and on behalf of the |
|
|
Board of Directors |
|
|
|
|
| RAWALPINDI |
|
MUHAMMAD AKRAM |
|
| November
30, 1998 |
|
CHIEF EXECUTIVE |
|
|
|
| PATTERN
OF HOLDING OF SHARES |
|
| AS
ON JUNE 30, 1998 |
|
|
| No. of |
Shareholding |
Total |
|
| Shareholders |
From |
To |
Shares Held |
|
|
| 3,759 |
1 |
100 |
81,847 |
|
| 703 |
101 |
500 |
141,032 |
|
| 97 |
501 |
1,000 |
69,136 |
|
| 80 |
1,001 |
5,000 |
147,110 |
|
| 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 |
30,001 |
35,000 |
34,905 |
|
| 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 |
|
| ---------- |
|
---------- |
|
| 4,660 |
|
12,320,000 |
|
| ========== |
|
========== |
|
|
| CATEGORIES
OF SHAREHOLDERS |
|
| AS
ON JUNE 30, 1998 |
|
|
| Particulars |
|
No. of |
Shares held |
Percentage |
|
|
Shareholders |
|
|
|
| Individuals |
|
4,471 |
510,774 |
4.15% |
|
| Investment
Companies |
|
5 |
38,598 |
0.31% |
|
| Insurance
Companies |
|
5 |
120,876 |
0.98% |
|
| Joint
Stock Companies |
|
5 |
79,958 |
0.65% |
|
| Financial
Institutions |
|
13 |
1,055,535 |
8.57% |
|
| 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 |
- |
|
|
---------- |
---------- |
---------- |
|
|
4,660 |
12,320,000 |
100% |
|
|
|
|
========== |
========== |
========== |
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of MUSTEHKAM CEMENT LIMITED |
|
| as
at June 30, 1998 and the related profit and loss account and cash flow
statement, |
|
| 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 |
|
| cash
flow statement 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, no zakat was deductible at source under the Zakat and Ushr |
|
| Ordinance,
1980. |
|
|
| Rawalpindi |
|
MUNIFF ZIAUDDIN & CO., |
|
| Dated:
Dec. 05, 1998 |
|
CHARTERED ACCOUNTANTS |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1998 |
|
|
|
|
| CAPITAL
AND LIABILITIES |
|
NOTE |
1998 |
1997 |
|
|
(RUPEES
IN THOUSAND) |
|
| 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 |
|
|
(343,806) |
(181,822) |
|
|
---------- |
---------- |
|
|
(212,629) |
(50,645) |
|
|
---------- |
---------- |
|
|
(89,429) |
72,555 |
|
| LONG
TERM LOANS AND DEFERRED LIABILITIES |
|
| Long
term loans |
|
5 |
205,059 |
225,318 |
|
| Deferred
taxation |
|
|
78,857 |
84,410 |
|
|
|
---------- |
---------- |
|
|
|
283,916 |
309,728 |
|
| LONG
TERM DEPOSITS |
|
6 |
3,576 |
3,803 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of long term loans |
7 |
136,060 |
74,949 |
|
| Due
to Associated Companies |
|
8 |
65,922 |
37,297 |
|
| Trade
creditors |
|
|
12,033 |
22,886 |
|
| Deposits/advances
from customers |
|
9 |
96,565 |
42,429 |
|
| Accrued
liabilities |
|
10 |
146,274 |
117,352 |
|
| Other
liabilities |
|
11 |
18,167 |
29,717 |
|
| Provision
for taxation |
|
|
- |
2,106 |
|
| Dividend
payable |
|
12 |
187,589 |
187,602 |
|
|
|
---------- |
---------- |
|
|
|
662,610 |
514,338 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
13 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
860,673 |
900,424 |
|
|
========== |
========== |
|
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
|
|
| FIXED
ASSETS - TANGIBLE |
|
|
| Operating
assets |
|
14 |
451,212 |
506,875 |
|
| Capital
work in progress |
|
|
- |
1,188 |
|
| Stores
held for capital expenditure |
|
32,021 |
35,667 |
|
|
---------- |
---------- |
|
|
483,233 |
543,730 |
|
|
| LONG
TERM LOANS AND DEPOSITS |
|
| Employees |
|
15 |
4,062 |
10,484 |
|
| Prime
Minister's Debt Retirement Scheme |
|
| (Qarz-e-Hasna) |
|
1,000 |
1,000 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
| Stores,
spares and loose tools - at cost |
16 |
192,838 |
215,126 |
|
| Stock
in trade |
|
17 |
48,815 |
50,349 |
|
| Trade
debtors-considered good |
|
18 |
216 |
595 |
|
| Loans
and advances - employees |
|
19 |
22,518 |
16,474 |
|
| Due
from Associated Companies |
|
20 |
94 |
279 |
|
| Loans
and advances - others |
|
21 |
28,337 |
41,075 |
|
| Trade
deposits & prepayments |
|
22 |
3,883 |
6,795 |
|
| Interest
accrued |
|
|
280 |
98 |
|
| Other
receivables |
|
23 |
103 |
103 |
|
| Advance
Income Tax |
|
24 |
4,426 |
- |
|
| Cash
and bank balances |
|
25 |
70,868 |
14,316 |
|
|
|
---------- |
---------- |
|
|
|
372,378 |
345,210 |
|
|
---------- |
---------- |
|
|
860,673 |
900,424 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
| Auditors'
report to the members annexed. |
|
|
|
BEHRAM HASSAN |
|
MUHAMMAD AKRAM |
|
|
DIRECTOR |
|
CHIEF EXECUTIVE |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1998 |
|
|
|
NOTE |
1998 |
1997 |
|
|
(RUPEES IN THOUSAND) |
|
|
|
|
| SALES - Net |
|
26 |
752,027 |
926,918 |
|
| COST
OF GOODS SOLD |
|
27 |
854,009 |
1,013,783 |
|
|
|
---------- |
---------- |
|
| GROSS
PROFIT/(LOSS) |
|
|
(101,982) |
(86,865) |
|
|
|
|
| OTHER
INCOME |
|
|
|
| Interest |
|
28 |
3,524 |
3,590 |
|
| Miscellaneous |
|
29 |
7,303 |
3,380 |
|
|
|
---------- |
---------- |
|
|
|
10,827 |
6,970 |
|
|
|
(91,155) |
(79,895) |
|
| OPERATING
EXPENSES |
|
|
|
|
| General
and administrative |
|
30 |
33,482 |
35,377 |
|
| Selling
and distribution |
|
31 |
4,839 |
4,415 |
|
| Auditors'
remuneration |
|
32 |
60 |
35 |
|
| Financial |
|
33 |
46,672 |
47,802 |
|
|
|
---------- |
---------- |
|
|
85,053 |
87,629 |
|
|
---------- |
---------- |
|
| NET
PROFIT/(LOSS) FOR THE YEAR |
|
|
(176,208) |
(167,524) |
|
| PRIOR
YEARS' ADJUSTMENTS |
|
34 |
12,431 |
(22,000) |
|
|
|
---------- |
---------- |
|
| NET
PROFIT/(LOSS) BEFORE TAXATION |
|
|
(163,777) |
(189,524) |
|
| TAXATION |
|
35 |
1,793 |
5,078 |
|
|
|
---------- |
---------- |
|
|
|
(161,984) |
(184,446) |
|
| UNAPPROPRIATED
PROFIT/(LOSS) BROUGHT FORWARD |
|
(181,822) |
2,624 |
|
|
|
---------- |
---------- |
|
| UNAPPROPRIATED
PROFIT/(LOSS) |
|
|
(343,806) |
(181,822) |
|
|
---------- |
---------- |
|
| RETAINED
EARNING CARRIED FORWARD |
|
(343,806) |
(181,822) |
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
BEHRAM HASSAN |
|
MUHAMMAD AKRAM |
|
|
DIRECTOR |
|
CHIEF EXECUTIVE |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30TH JUNE, 1998 |
|
|
|
1998 |
1997 |
|
|
(RUPEES IN THOUSAND) |
|
| CASH
FLOW FROM OPERATION ACTIVITIES: |
|
|
|
| Fund
Provided from Operations |
|
| Loss
before taxation |
|
(176,208) |
(167,524) |
|
|
|
|
| Adjustment
for Items not involving |
|
| movement
of Funds |
|
| Depreciation |
|
55,663 |
63,450 |
|
| Other
adjustments |
|
4,834 |
- |
|
| Prior
period items |
|
12,431 |
(22,000) |
|
|
---------- |
---------- |
|
|
72,928 |
41,450 |
|
| (INCREASE)/DECREASE
IN CURRENT ASSETS |
|
| Stores
& stocks |
|
23,822 |
46,799 |
|
| Deposits,
prepayments & other recoverables |
|
9,609 |
28,774 |
|
| Trade
debtors |
|
379 |
(335) |
|
|
---------- |
---------- |
|
|
33,810 |
75,238 |
|
| INCREASE/(DECREASE)
IN CURRENT LIABILITIES |
|
| Trade
creditors |
|
(10,854) |
12,416 |
|
| Other
liabilities |
|
100,134 |
29,880 |
|
|
---------- |
---------- |
|
|
89,280 |
42,296 |
|
|
---------- |
---------- |
|
| NET
CASH FLOW FROM OPERATING ACTIVITIES |
|
19,810 |
(8,540) |
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Fixed
capital expenditure |
|
- |
(34,807) |
|
|
---------- |
---------- |
|
|
19,810 |
(43,347) |
|
|
|
|
|
| CASH
FLOW FROM FINANCING/OTHER ACTIVITIES |
|
|
| Long
term loans & deposits |
|
6,422 |
(1,815) |
|
| Dividend
Paid |
|
(13) |
(43) |
|
| Taxes paid |
|
(10,292) |
(6,678) |
|
| Sale
proceed of fixed assets |
|
- |
350 |
|
|
---------- |
---------- |
|
|
15,927 |
(51,533) |
|
|
|
|
| CASH
FLOW FROM CAPITAL ACTIVITIES |
|
|
| Long
term loans & deferred liabilities |
|
40,852 |
(21,504) |
|
| Long
term deposits |
|
(227) |
(158) |
|
|
---------- |
---------- |
|
|
56,552 |
(73,195) |
|
| CASH
& CASH EQUIVALENTS on 1-7-97 |
|
14,316 |
87,511 |
|
|
|
---------- |
---------- |
|
| CASH
& CASH EQUIVALENTS on 30-6-98 |
|
70,868 |
14,316 |
|
|
|
|
========== |
========== |
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1998 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| The
company was incorporated on 29th July, 1954 as public limited company and its
shares |
|
| are
quoted on Karachi, Lahore and Islamabad Stock Exchanges. The Company is
engaged |
|
| in
production and sale of portland cement. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
| 2.1
Accounting Convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
| 2.2
Staff Retirement Benefits |
|
| The
Company operates approved funded gratuity scheme and contributions thereto |
|
| are
charged to profit and loss account. |
|
|
| 2.3
Taxation |
|
| Taxation
is provided on the basis of taxable income at current rates of taxation after |
|
| taking
into account admissible tax credit, rebates, if any. Deferred taxation is |
|
| provided
on timing differences using the liability method. |
|
|
| 2.4
Fixed Assets |
|
