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| Pakistan Slag
Cement Industries Limited |
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| Annual Reports 2003 |
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| CONTENTS |
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| Company Information |
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| Notice of Meeting |
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| Report of the Directors |
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| Vission & Mission |
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| Statement of
Compliance With |
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| Best Practices of
Corporate Governance. |
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| Review Report to
the Members on Statement of Changes |
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| With Best Practices
of Code of Corporate Governance |
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| Statement of Ethics
and Business Practices. |
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| Auditors' Report |
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| Balance Sheet |
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| Profit and Loss
Account |
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| Statement of
Changes in Equity |
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| Cash Flow Statement |
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| Notes to the
Accounts |
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| Pattern of
Shareholdings |
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| COMPANY INFORMATION |
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| BOARD OF DIRECTORS |
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| Jehangir Akber -
Chairman / Chief Executive |
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| Faiz Mohammad Brohi |
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| Muhammad Naeem Khan |
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| Haji Ghulam Shabbir |
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| Nisar A. Korai |
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| Ajaz All Panhwar |
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| Muneer Ahmed |
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| COMPANY SECRETARY |
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| Syed Ajmal Hasnain |
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| AUDIT COMMITTEE |
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| Jehangir Akber -
Chairman |
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| Faiz Mohammad Brohi |
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| Nisar A. Korai |
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| AUDITORS |
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| Faruq Ali &
Company |
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| Chartered
Accountants |
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| COST AUDITORS |
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| Siddiqi &
Company |
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| Cost &
Management Accountants |
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| BANKERS |
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| Saudi Pak
Commercial Bank Limited |
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| National Bank of
Pakistan |
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| Al Meezan Bank
Limited |
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| Muslim Commercial
Bank Lin-,tQd |
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| HEAD OFFICE /
REGISTERED OFFICE |
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| 4th Floor, Panorama
Center, Building # 2, Doctors' Plaza, |
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| Raja Ghazanfar Ali
Khan Road, Saddar, Karachi. |
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| Phone : (021) 568
6095 Fax : (021) 521 9067 |
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| E-Mail :
pscil-fac@cyber.net.pk |
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| FACTORY |
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| DSU-6,
Zulfiqarabad, Pakistan Steel Mills, Karachi. |
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| Phone: (0201)
4750129-4750130 |
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| Fax:(0201)4750131 |
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| NOTICE OF ANNUAL
GENERAL MEETING |
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| Notice is hereby
given that the Fourteenth Annual General Meeting of Pakistan
Slag Cement Industries |
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| Limited will be
held on Thursday October 30, 2003 at 11.00 a.m. at Haji Abdullah Haroon
Muslim Gymkhana, |
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| Aiwan-e-Saddar
Road, Karachi, to transact the following business: |
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| 1. To read and confirm the minutes of last
Annual General Meeting held on 06th day of November 2002 |
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| 2. To receive, consider and adopt the
audited accounts for the year ended June 30, 2003 together with the |
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| Directors and
Auditors report thereon. |
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| 3. To appoint auditor of the company, for
the year ending June 30, 2004 and to fix their remuneration. |
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| 4. To transact any other business with the
permission of the chair. |
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| By the Order of the
Board |
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| (Syed Ajmal
Hasnain) |
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| Karachi: 8th October 2003
Company Secretary |
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| NOTES: |
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| 1. The register of members will remain
closed from 27th October 2003 to 06th November 2003 (both
days |
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| inclusive) |
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| 2. A member entitled to attend and vote at
the meeting may appoint an other member as his/her proxy to |
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| attend and vote on
his/her behalf. Proxies must be received at the registered office of the
Company not |
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| less than 48 hours
before meeting. |
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| 3. Shareholders are requested to notify any
change in their address immediately. |
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| 4. Shareholders who have deposited their
shares with Central Depository Company of Pakistan Limited |
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| (CDC) are requested
to bring their original NIC /Passport alongwith their account number and
participants |
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| ID number in CDC
for verification. |
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| REPORT OF THE
DIRECTORS |
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| Dear Shareholders, |
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| The Directors of
your company are pleased to welcome you to the 14th Annual General Meeting of the |
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| Company, and to
present the Annual Accounts and the Auditor's Report thereon for the year
ended 30th June |
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| 2003 |
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| Production |
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| During the year the
Company produced 77,628 tonnes cement as compared to 68,245 tonnes of last
year. The |
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| company maintained
its production according to availability of clinker and in line with the
market demand. |
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| Marketing |
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| The Company
dispatched 77,168.50 tonnes cement during the year as compared to 68,009
tonnes in the |
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| corresponding last
year. Inspite of lack of demand, the sale of cement has improved. The Company
continued |
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| to supply cement
under previous agreement with Director General Procurement (Army) to their
various |
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| consignees like
Navy, PAF and Army. |
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| Contract for Supply
of SR Cement to DGP (Army) |
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| Your Directors are
pleased to inform you that the Company, first time in its history, has
procured order for |
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| supply of Sulphate
Resisting Cement to consignee of DGP (Army). The supplies under the contract |
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| commenced
subsequent to the accounting year i.e. from late July 2003. |
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| Financial Results |
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| Though there was an
improvement increase in the quantity of cement dispatched during the year but
the |
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| company suffered an
operating loss of Rs.9.583 Million as compare to Rs. 1.814 million of
previous year due |
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| to reduction in
selling price of pure slag and fall in sale of granulated slag to Dong Fang
Electrical Corporation |
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| has increased the
operating loss and because of this the loss after taxation has also increased
form Rs. 4.184 |
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| Million to Rs.
9.976 Million during the year. |
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| Auditor's
Observation |
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| As regards
auditor's observation on the preparation of accounts under going concern
assumption, the Board |
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| feels that the
efforts towards the marketing decrease of financial expense due to payment in
full or running |
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| finance facilities
of the banks and loan payable to PICIC will be conducive of improving the
financial position of |
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| the Company in the
long run. Moreover the Company has the financial support of lenders also. |
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| So far as carrying
of actuarial valuation employee gratuity is concerned the Company has made
the provision |
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| in this behalf
sufficient enough to meet the liability of gratuity payable to the employees.
However, to comply |
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| with the
requirements of IAS- 19. The Company in the process for engaging an Actuary
for the actuarial |
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| valuation of
gratuity. In burden of financial charges, due to settlement of existing
running finance balance, will |
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| contributes towards
betterment of Company's financial position. |
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| Meeting of Board of
Directors During the Year |
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| During the year the
Board of directors meetings held Five the attendance record of each directors
is as |
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| follows. |
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| Name of Directors |
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Meeting attended |
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| 1) Mr. Jehangir Akber |
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5 |
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| 2) Mr. Faiz Muhammad Brohi |
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5 |
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| 3) Mr. Nisar Ahmed Korai |
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5 |
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| 4) Mr. Muhammad Naeem Khan |
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— |
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| 5) Mr. Haji Ghulam Shabbir |
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— |
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| 6) Mr. Munir |
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5 |
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| 7) Mr. Ejaz Ali Panhor |
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5 |
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| Auditors |
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| The present
Auditors M/s. Faruq AN & Co., Chartered Accountants, stand retired and
being eligible have |
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| offered themselves
for re-appointment, as Auditors of the Company for the financial year ended
30th June |
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| 2004. The Audit
Committee has also recommended the re-appointment of M/s. Faruq Ali &
Co., Chartered |
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| Accountants as
auditors of the company for the said year. The audit committee and company's
Board of |
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| Directors has also
recommended their name for appointment as auditor for the year 2003-04. |
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| Dividend |
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| In view of losses
no dividend has been recommended for the year 2002-03 by the directors. |
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| Pattern of Share
Holding |
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| A statement showing
pattern of share holding of the company is included in the report. |
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| Statement on
Corporate and Financial Matters |
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| a) The financial statements prepared by
the Company, fairly present its state of affairs, the result of its |
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| operations, cash
flows and changes in equity. |
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| b) Proper books of accounts have been
maintained by the Company. |
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| c) Appropriate accounting
policies have been
consistently applied in preparation
of these financial |
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| statements and
accounting estimates are based on reasonable and prudent judgement. |
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| d) Applicable International Accounting Standards,
except the implementation of IAS
19 (Employees |
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| Benefits) have been
followed in preparation of financial statements and there has been no
departure |
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| therefrom. |
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| e) The system of internal control is sound
in design and has been effectively implemented and monitored. |
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| f) Although presently the company is not
earning profit but efforts are being made to make it a profitable |
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| project and has
financial support of the landers therefore there are no significant doubt
upon the |
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| Company's ability
to continue as a going concern. |
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| g) There has been no material departure
from the best practices of corporate governance, as detailed in the |
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| listing regulations. |
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| h) The Company maintains Gratuity Fund
accounts for its employees. |
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| Future Prospects |
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| Your directors are
pleased to inform you that The Company has qualified for ISO 9001
2000-quality |
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| management system.
It is an indicative of our quality consciousness in the filed of Cement and
will have far- |
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| reaching effects on
the overall capability of the Company in the years to come and this quality
management |
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| system will help us
in reduction of ou.r cost by preventive measures. The Company expects better
financial |
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| results due to
expected increase in dispatches of cement on account of addition sale SR
Cement for DGP |
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| (Army). |
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| Appreciation for
Employees |
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| The directors would
like to thank the employees of the company for their devotion towards their
duties and |
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| hoped that they
will continue to work with the same spirit. Directors are also thankful to
the valued customers |
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| whose continues
support is of great source of strength to the Company. |
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| FOR AND ON BEHALF |
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| OF BOARD OF
DIRECTORS |
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| Dated: October 08,
2003
(JEHANGIR AKBAR) |
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| Place: Karachi
Chief Executive |
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| Our Vision |
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| Our vision is to
provide Superior Quality of our product customer by making a difference in |
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| cement
manufacturing concerns engaged in the nations building through the optimum |
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| utilization of
resources for the benefit of its stake holder. |
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| Our Mission |
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| To develop a
continuous procedure of improvement & development in advancement of |
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| technology to
produce a "Quality Product". We aim to develop an organization
having |
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| dedicated team of
professionals with strong customers & shareholders. |
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| Core Values |
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| Achieve excellence
in business. |
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| Continuous
improvement & development through advancement & latest technology. |
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| Committed with
Quality Product. |
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| Continuous
improvement & development in work force by training. |
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| STATEMENT OF
COMPLIANCE WITH |
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| THE CODE OF
CORPORATE GOVERNANCE |
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| This Statement is
being presented to comply with the Code of Corporate Governance contained in
the Regulation No. 37, |
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| of the Karachi
Stock Exchange for the Purpose of establishing a framework of good
governance, whereby a listed |
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| company is managed
in compliance with the best practice of Corporate Governance. |
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| The Company has
applied the principles contained in the Code in the following manner: |
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| 1. The Company encourages representation of
independent non-executive directors and directors representing minority |
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| interest on its
Board of Directors. At present the Board includes three independent
non-executive directors. |
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| 2. The directors have confirmed that non of
them is serving as director in more than ten listed Companies, including this |
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| company. |
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| 3. The directors of Company have voluntary
declared that all the resident directors of the Company have no default in |
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| payment of any loan
to banking Company, a DPI or NBFI and none of them is a member of Karachi
Stock Exchange. |
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| 4. The Company has prepared a 'Statement of
Ethics and Business Practices', which has been approved by the Board of |
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| Directors and
signed by the employees of the Company. |
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| 5. The Board has developed a vision/mission
statement, overall corporate strategy and significant policies of the |
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| Company. A complete
record of particulars of significant policies along with the dates on which
these were approved |
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| or amended has been
maintained. |
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| 6. All powers of the Board have been duly
exercised and decisions on material transactions, including appointment and |
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| determination of
remuneration and terms and conditions of employment of the CEO and other
executive directors, |
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| have been taken by
the Board. |
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| 7. The meeting of the Board was presided
over the Chairman and, in his absence, by a director elected by the Board for |
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| this purpose and
the Board met at least once in every quarter. Written notices of the Board
meetings, along with |
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| agenda and working
papers, were circulated well in time before the meetings. The minutes of the
meeting were |
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| appropriately
recorded and circulated. |
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| 8. The directors have been provided with
copies of the listing regulation of the Karachi Stock Exchange and copies of |
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| Memorandum and
Article of the Association and they are well conversant with their duties and
responsibilities. |
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| 9. The Company Secretary and Head of
Internal Audit were appointed prior to enforcement of the Code of Corporate |
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| Governance.
However, such next appointment, if any including their remuneration and terms
and conditions of |
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| employment, as
determined by the CEO, will be referred to the Board of Directors for
approval. |
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| 10. The directors' report for this year has
been prepared in compliance with requirement of the Code and fully describes |
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| the salient matters
required to be disclosed. |
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| 11. The financial statements of the Company
were duly endorsed by CEO and CFO before approval of the Board. |
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| 12. The directors, CEO and executives do not
hold any interest in the shares on the Company other than that disclosed in |
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| the pattern of
shareholding. |
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| 13. The Company has complied with all the
corporate and financial reporting requirement of the Code. |
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| 14. The Board has formed an Audit Committee. It
presently comprises three members, all of whom are non-executive |
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| directors including
the Chairman of the Committee. |
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| 15. The meeting of the Audit Committee were
held at least once every quarter prior to approval of interim and final
results |
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| of the Company and
as required by the Code. The terms of reference of the Committee have been
formed and |
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| advised to
committee for compliance. |
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| 16. The Board has set-up and effective internal
audit functions. |
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| 17. The statutory auditors of the Company have
confirmed that they have been given a satisfactory rating under the |
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| quality control
review program of the Institute of Chartered Accountants of Pakistan, that
they or any of the partners |
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| of the firm, their
spouses and minor children do not hold shares of the Company and that the
firm and all its partners |
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| are in compliance
with the rules and regulation of International Federation of Accountants. |
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| 18. The statutory auditors or the persons
associated with them have not been appointed to provide other services except |
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| in accordance with
the listing regulations and the auditors have confirmed that they have
observed IFAC guidelines in |
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| this regard. |
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| 19. We confirm that all other material
principles contained in the Code of Corporate Governance have been complied
with. |
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| FOR AND ON BEHALF
OF BOARD OF DIRECTORS |
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| Dated: October 08,
2003
(JEHANGIR AKBAR) |
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| Place: Karachi
Chief Executive |
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| REVIEW REPORT TO
THE MEMBERS ON STATEMENT OF |
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| COMPLIANCE WITH
BEST PRACTICES OF CODE OF |
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| CORPORATE
GOVERNANCE |
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| We have reviewed
the Statement of Compliance with the best practices contained in the Code of
Corporate |
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| Governance prepared
by the Board of Directors of Pakistan Slag Cement
Industries Limited to comply with |
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| the Listing
Regulation No.37 (Chapter XI) of the Karachi Stock Exchange where the Company
is listed. |
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| The responsibility
for compliance with the Code of Corporate Governance is that of the Board of
Directors of |
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| the Company. Our
responsibility is to review, to the extent where such compliance can be
objectively verified, |
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| whether the
Statement of Compliance reflects the status of the Company's compliance with
the provisions of |
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| the Code of
Corporate Governance and report if it does not. A review is limited primarily
to inquiries of the |
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| Company personnel
and review of various documents prepared by the company to comply with the
Code. |
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| As part of our
audit of financial statements we are required to obtain an understanding of
the accounting and |
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| internal control
systems sufficient to plan the audit and develop an effective audit approach.
We have not |
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| carried out any
special review of the internal control system to enable us to express an
opinion as to whether |
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| the Board's
statement on internal control covers all controls and the effectiveness of
such internal controls. |
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| Based on our
review, nothing has come to our attention, which causes us to believe that
the Statement of |
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| Compliance does not
appropriately reflect the Company's compliance, in all material respects,
with the best |
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| practices contained
in the Code of Corporate Governance. |
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| Faruq Ali &
Company |
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| Dated: October 08,
2003
Chartered Accountants |
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| Place: Karachi |
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| STATEMENT OF ETHICS |
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| AND BUSINESS
PRACTICES |
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| The business policy
of PAKISTAN SLAG CEMENT INDUSTIRES LIMITED is to provide product customers |
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| that meets or
exceed requirements in areas of Quality, Cost and On Time Delivery. |
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| Product Quality |
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| Our Operations are
based on International Standards PS 232 1983 & BS 12 1958 the that meets
national and |
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| International
standards for quality reliability. |
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| Dealing with
Employees |
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| Provide congenial
work atmosphere where all employees treated with respect and dignity.
Training is provided |
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| to Employess in
order to make them competent. |
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| Responsibility to
interested parties |
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|
|
| To be objectives,
that our dealings with the people must be fair and transparent who have
reposed their |
|
|
| confidence in us. |
|
|
|
|
|
|
| Financial Reporting
& Internal Controls |
|
|
|
|
|
|
| To implement an
effective and transparent system of financial reporting and internal controls
to safeguard the |
|
|
| interest of our
shareholders and fulfill the regulatory requirements. |
|
|
|
|
|
| Procurement of
Goods & Services |
|
|
|
|
|
|
| Our purchasing and
procurement system is based on the quality management system purchased goods
and |
|
|
| services that are
tailored to our requirement and are priced appropriately. Before taking
decision about |
|
|
| procurement of any
goods or service, quotations are obtained from various sources. |
|
|
|
|
|
| Conflict of
Interest |
|
|
|
|
|
|
| All the decisions
of the management must be in the interest of the company and activities and
involvement of |
|
|
| the directors and
employees in no way conflict with the interest of the company. |
|
|
|
|
|
| Adherence to law of
the land |
|
|
|
|
|
|
| To fulfill all
legal requirements of the Government and its regulatory bodies and follow
relevant and applicable |
|
|
| laws of the
country. |
|
|
|
|
|
|
| Environment
Protection |
|
|
|
|
|
|
| To protect
environment and ensure health and safety of the work force and well being of
the people living in |
|
|
| the adjoining areas
of our plant. |
|
|
|
|
|
|
| AUDITORS' REPORT TO
THE MEMBERS |
|
|
|
|
|
|
| We have audited the
annexed balance sheet of Pakistan Slag Cement Industries
Limited as at June 30, 2003 and |
|
|
| the related profit
and loss account, cash flow statement and statement of changes in equity
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. |
|
|
|
|
|
| It is the
responsibility of the company's management to establish and maintain a system
of internal control, and |
|
|
| prepare and present
the above said statements in conformity with the approved accounting
standards and the |
|
|
| requirements of the
Companies Ordinance, 1984. Our responsibility is to express an opinion on
these statements |
|
|
| based on our audit. |
|
|
|
|
|
|
| We conduct our
audit in accordance with the auditing standards as applicable in Pakistan.
These standards require |
|
| that we plan and
perform the audit to obtain reasonable assurance about whether the above said
statements are |
|
|
| free of any
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts |
|
|
| and disclosures in
the above said statement. An audit also includes assessing the accounting
policies and significant |
|
| estimates made by
management, as well as, evaluating the overall presentation of above said
statements. We |
|
|
| believe that our
audit provides a reasonable basis for our opinion and, after due
verification, 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 except for the
change in accounting |
|
|
| policy, as
described in note 3.8 to the accounts, with which we concur; |
|
|
|
|
|
| i) the expenditure incurred during the
year was for the purpose of the company's business; and |
|
|
|
|
|
| i) 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, profits and
loss account, cash flow statement and statement of changes in equity together
with the notes |
|
|
| forming part
thereof conform with approved accounting standards as applicable in Pakistan,
and, 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, 2003 and of the loss,
its cash flows and |
|
|
| changes in equity
for the year then ended; and |
|
|
|
|
|
|
| d) in our opinion, no Zakat was deductible
at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980). |
|
|
|
|
|
| e) without qualifying our opinion, |
|
|
|
|
|
|
| i) we draw
attention to note 2 to the financial statements, which indicates that the
Company incurred a net |
|
|
| loss of Rs.9.976
million during the year ended June 30, 2003 and, as of that date company's
accumulated |
|
|
| losses exceeded its
share capital by Rs.11.329 million. These conditions indicate the existence
of material |
|
|
| uncertainty, which
may cast significant doubt about the company's ability to continue as a going
concern. |
|
|
|
|
|
| ii) we draw
attention of members to note 8.1 to the financial statements, which disclose
that Company has |
|
|
| not carried out
actuarial valuation of staff gratuity therefore, the liability and the
related disclosure cannot |
|
|
| be determined and
disclosed as required by International Accounting Standard -19 "Employee
Benefits". |
|
|
|
|
|
| Faruq Ali &
Company |
|
|
|
|
|
|
| Dated: October 08,
2003
Chartered Accountants |
|
|
|
|
| Place: Karachi |
|
|
|
|
|
|
| BALANCE SHEET |
|
|
|
| AS AT JUNE 30, 2003 |
|
|
|
|
|
|
|
|
Note |
2003 |
2002 |
|
| EQUITY AND
LIABILITIES |
|
RUPEES |
|
| SHARE CAPITAL AND
RESERVES |
|
|
|
| Authorized Capital |
|
|
|
| 31,500,000 (2002:
31,500,000) |
|
|
|
| Ordinary shares of
Rs.10/- each |
|
|
315,000,000 |
315,000,000 |
|
| Issued, subscribed
and paid-up capital |
|
4 |
64,000,000 |
64,000,000 |
|
| Accumulated loss |
|
|
-75,329,054 |
-65,352,564 |
|
|
|
|
-11,329,054 |
-1,352,564 |
|
| NON CURRENT
LIABILITIES |
|
|
|
| Long-term loan -
Secured |
|
5 |
— |
3,733,522 |
|
| Supplier credit -
Secured |
|
6 |
20,625,000 |
27,500,000 |
|
| Long-term deposits
- Unsecured |
|
7 |
1,125,655 |
. 1,125,655 |
|
| Deferred and other
liabilities |
|
8 |
111,941,759 |
899,870 |
|
| CURRENT LIABILITIES |
|
|
|
| Current maturity of
long-term loan |
|
|
3,733,522 |
9,000,000 |
|
| Current and over
due portion of supplier credit |
|
9 |
9,375,000 |
2,500,000 |
|
| Short term finance |
|
10 |
976,211 |
46,566,543 |
|
| Trade creditors |
|
11 |
87,430,776 |
7,693,674 |
|
| Accrued and other
liabilities |
|
12 |
15,024,838 |
90,257,865 |
|
| Advance from
customers |
|
|
15,959,117 |
— |
|
| Provision for
taxation |
|
13 |
952,000 |
1,091,367 |
|
|
|
|
133,451,464 |
157,109,449 |
|
| CONTINGENCIES |
|
14 |
— |
— |
|
|
|
|
255,814,824 |
189,015,932 |
|
| ASSETS |
|
|
|
| NON CURRENT ASSETS |
|
|
|
| Tangible fixed
assets |
|
|
|
| Operating fixed
assets |
|
15 |
79,096,241 |
97,986,158 |
|
| Long-term deposits |
|
16 |
1,876,830 |
1 ,744,830 |
|
| CURRENT ASSETS |
|
|
|
| Stores, spares and
loose tools |
|
17 |
7,130,243 |
2,637,525 |
|
| Stock-in-trade |
|
18 |
69,610,491 |
38,890,462 |
|
| Trade debts -
Unsecured |
|
19 |
50,784,206 |
24,936,247 |
|
| Loans, advances,
trade deposits, prepayments |
|
|
|
| and other
receivables |
|
20 |
17,200,113 |
3,746,342 |
|
| Advance income tax |
|
|
19,139,570 |
18,146,221 |
|
| Cash and bank
balances |
|
21 |
10,977,130 |
928,147 |
|
|
|
|
174,841,753 |
89,284,944 |
|
|
|
|
255,814,824 |
189,015,932 |
|
| The annexed notes
form an integral part of these accounts. |
|
|
|
|
|
| PROFIT AND LOSS
ACCOUNT |
|
|
|
|
|
|
| FOR THE YEAR ENDED
JUNE 30, 2003 |
|
|
|
|
|
|
|
|
Note |
2003 |
2002 |
|
|
|
|
RUPEES |
|
| Sales - Net |
|
22 |
186,468,285 |
207,740,738 |
|
| Cost of goods sold |
|
23 |
-190,435,095 |
-206,124,083 |
|
| Gross loss |
|
|
-3,966,810 |
1,616,655 |
|
| Administrative and
Selling expenses |
|
24 |
-5,616,380 |
-3,431,600 |
|
| Operating (Loss) /
Profit |
|
|
-9,583,190 |
-1,814,945 |
|
| Financial charges |
|
25 |
-3,419,215 |
-6,701,360 |
|
|
|
|
-13,002,405 |
-8,516,305 |
|
| Other Income |
|
26 |
3,977,915 |
2,922,390 |
|
| (Loss) before
taxation |
|
|
-9,024,490 |
-5,593,915 |
|
| Taxation |
|
|
|
| Current |
|
|
-932,342 |
-1,091,367 |
|
| Prior |
|
|
-19,658 |
2,500,983 |
|
|
|
|
-952,000 |
1,409,616 |
|
| (Loss) after
taxation |
|
|
-9,976,490 |
-4,184,299 |
|
| Accumulated (loss)
brought forward |
|
|
-65,352,564 |
-61,168,265 |
|
| Accumulated (loss)
carried forward |
|
|
-75,329,054 |
-65,352,564 |
|
| (Loss) per share -
basic |
|
27 |
-1.56 |
-0.65 |
|
| The annexed notes
form an integral part of these accounts. |
|
|
|
|
|
| CASH FLOW STATEMENT |
|
|
|
| FOR THE YEAR ENDED
JUNE 30, 2003 |
|
|
|
|
|
|
|
|
Note |
2003 |
2002 |
|
|
|
|
RUPEES |
|
| Cash flow from
operating activities |
|
|
|
| Cash generated from
operations |
|
28 |
-14,220,199 |
16,397,223 |
|
| Payments for |
|
|
|
| Financial charges |
|
|
-635,369 |
-4,427,282 |
|
| Gratuity paid |
|
|
-39,962 |
— |
|
| Dividend paid |
|
|
-471,157 |
-14,705 |
|
| Taxation |
|
|
-2,084,716 |
-3,085,273 |
|
|
|
|
-3,231,204 |
-7,527,260 |
|
| Net cash (outflow)
/ inflow from operating activities |
|
|
-17,451,403 |
8,869,963 |
|
| Cash flow from
investing activities |
|
|
|
| Fixed capital
expenditure |
|
|
-80,000 |
-30,111,150 |
|
| Long-term deposit |
|
|
-132,000 |
362,290 |
|
| Net cash (outflow)
from investing activities |
|
|
-212,000 |
-29,748,860 |
|
| Cash flow from
financing activities |
|
|
|
| Repayment of
long-term loan |
|
|
-9,000,000 |
-11,206,028 |
|
| Interest received |
|
|
1,547,027 |
— |
|
| Loan received from
Sardar M. Ashraf D. Baluch (Pvt) Ltd. - Net |
|
35,165,359 |
— |
|
| Supplier credit |
|
|
— |
30,000,000 |
|
| Net Cash Inflow
from Financing Activities |
|
|
27,712,386 |
18,793,972 |
|
| Net Increase /
(Decrease) in Cash and Cash Equivalent |
|
|
10,048,983 |
-2,084,925 |
|
| Cash and Cash
Equivalent as on 1st July 2002 |
|
|
928,147 |
3,013,072 |
|
| Cash and Cash
Equivalent as on 30th June 2003 |
|
|
10,977,130 |
928,147 |
|
| The annexed notes
form an integral part of these accounts. |
|
|
|
|
|
| STATEMENT OF
CHANGES IN EQUITY |
|
|
|
|
|
|
| FOR THE YEAR ENDED
JUNE 30, 2003 |
|
|
|
|
|
|
|
Issued, |
|
|
|
|
subscribed and |
Accumulated |
|
|
|
paid-up-capital |
(Loss) |
Total |
|
|
|
|
(RUPEES) |
|
|
| Balance as on July
01, 2001 |
64,000,000 |
-61,168,265 |
2,831,735 |
|
|
| (Loss) after
taxation |
— |
-4,184,299 |
-4,184,299 |
|
|
| Balance as on June
30, 2002 |
64,000,000 |
-65,352,564 |
-1,352,564 |
|
|
| (Loss) after
taxation |
— |
-9,976,490 |
-9,976,490 |
|
|
| Balance as on June
30, 2003 |
64,000,000 |
-75,329,054 |
-11,329,054 |
|
|
|
|
|
|
|
| The annexed notes
form an integral part of these accounts. |
|
|
|
|
|
| NOTES TO THE
ACCOUNTS |
|
|
|
|
|
|
| FOR THE YEAR ENDED
JUNE 30, 2003 |
|
|
|
|
|
|
| 1. THE COMPANY AND ITS OPERATION |
|
|
|
|
|
|
| The Company was
incorporated in Pakistan as a public limited Company in June 1994 under the |
|
|
| Companies
Ordinance, 1984. Its shares are listed on the Karachi Stock Exchange. The
Company is |
|
|
| principally engaged
in manufacturing and sale of cement. |
|
|
|
|
|
| 2. GOING CONCERN ASSUMPTION |
|
|
|
|
|
|
| The Company has
incurred a loss of Rs.9.976 million (2002: Rs.4.184 million) for the year
ended June 30, |
|
|
| 2003 and as of that
date its accumulated losses exceeded its share capital by Rs.11.329 million
(2002: |
|
|
| Rs.1.353 million).
The accounts have been prepared under going concern assumption as the Company |
|
|
| expects continued
support from lenders. |
|
|
|
|
|
|
| 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
|
| 3.1 Statement of compliance |
|
|
|
|
|
|
| These financial
statements have been prepared in accordance with the approved accounting |
|
|
| standards as
applicable in Pakistan and the requirements of the Compliance Ordinance,
1984'. |
|
|
| Approved accounting
standards comprise of such International Accounting Standards (lASs) as |
|
|
| notified under the
provisions of the Companies Ordinance, 1984. Wherever the requirements of the |
|
|
| Companies
Ordinance, 1984 or directives issued by the Securities and Exchange
Commission of |
|
|
| Pakistan (SECP)
differ with the requirements of these standards, the requirements of the
Companies |
|
|
| Ordinance, 1984 or
the requirements of the said directives take precedence. |
|
|
|
|
|
| In the current
year, the following International Accounting Standards become applicable to
the |
|
|
| Company: |
|
|
|
|
|
|
| — IAS 12 Income Taxes (Revised 2000) |
|
|
|
|
|
|
| — IAS 39 Financial Instruments: Recognition
and Measurement |
|
|
|
|
|
| — IAS 40 Investment Property |
|
|
|
|
|
|
| In accordance with
the application of revised IAS 12, the Company has changed its accounting |
|
|
| policy with respect
to deferred taxation as disclosed in note 3.8. The applicability of IAS 39
and IAS |
|
|
| 40 did not have a
material impact on the financial statement of the Company. |
|
|
|
|
|
| 3.2 Accounting convention |
|
|
|
|
|
|
| These accounts have
been prepared under the historical cost convention. |
|
|
|
|
|
| 3.3 Staff retirements benefits |
|
|
|
|
|
|
| The Company
operates un-funded gratuity scheme covering all employees eligible to the
benefit. |
|
|
| Provision is made
annually to cover the obligation under the scheme. |
|
|
|
|
|
| 3.4 Trade and other payable |
|
|
|
|
|
|
| Short term
liabilities for trade and other amount payable are carried at amortized cost. |
|
|
|
|
|
| 3.5 Tangible fixed assets and depreciation |
|
|
|
| Owned |
|
|
|
|
|
|
| Operating assets
are stated at cost less accumulated depreciation, except leasehold land and
capital |
|
|
| work-in-progress
which are stated at cost. Cost of certain fixed assets comprise of historical
cost and |
|
|
| the cost of
borrowings during construction period in respect of loans specifically taken
for the |
|
|
| projects. |
|
|
|
|
|
|
| Depreciation charge
is based on the straight line method on plant and machinery and factory
building |
|
|
| and at reducing
balance method on other assets at the rates specified in Note 15. Full year's |
|
|
| depreciation is
charged on additions while no depreciation is charged in the year of
dispdsal. |
|
|
|
|
|
| Maintenance and
normal repairs are charged to income as and when incurred. Major renewals and |
|
|
| improvements are
capitalized and the assets so replaced, if any, are retired. Gains and losses
on |
|
|
| disposal of assets
are included in income currently. |
|
|
|
|
|
|
| 3.6 Stores, spares and loss tools |
|
|
|
|
|
|
| These are valued at
moving average cost except for those in transit, which are valued at cost. |
|
|
|
|
|
| 3.7 Stock in trade |
|
|
|
|
|
|
| Raw and packing
material, except for those in transit, are valued at lower of average cost
and net |
|
|
| realizable value. |
|
|
|
|
|
|
| Work in process is
valued at average material cost and an appropriate allocation of conversion
cost. |
|
|
|
|
|
| Finished goods are
valued at lower of average cost, which include prime cost and appropriate |
|
|
| portion of
production overheads, and net realizable value. |
|
|
|
|
|
| Item in transit are
valued at cost comprising invoice values plus other charges incurred thereon. |
|
|
|
|
|
| Net realizable
value signifies the selling price less cost necessary to be incurred in order
to make the |
|
|
| sale. |
|
|
|
|
|
|
| 3.8 Taxation |
|
|
|
|
|
|
| Current |
|
|
|
|
|
|
| Provision for
taxation is made at the current rate of tax applicable under Income Tax
Ordinance, |
|
|
| 2001 |
|
|
|
|
|
|
| Deferred |
|
|
|
|
|
|
| During the current
year, the Company has changed its accounting policy in respect of deferred |
|
|
| taxation. The
change has been made to comply with the requirements of the revised
International |
|
|
| Accounting Standard
12; "Income Taxes" which became applicable for financial periods
beginning on |
|
|
| or after January 1,
2002. Accordingly, deferred tax is now recognized on all major temporary |
|
|
| difference between
the carrying amount for financial reporting purposes and the amounts used for |
|
|
| taxation purposes.
Until last year, the Company accounted for deferred taxation on all material
timing |
|
|
| difference using
the liability method. The change in accounting policy did not have any effect
on the |
|
|
| profit and loss
account for the year. |
|
|
|
|
|
|
| The Company has not
recognized deferred tax asset amounting to Rs.8.701 million for the reason |
|
|
| that in immediate
future, taxable profits will not be available to obtain benefits from the
asset. |
|
|
|
|
|
| 3.9 Trade debts |
|
|
|
|
|
|
| Trade debts
originated by the Company are recognized and carried at original invoice
amount less |
|
|
| an allowance for
any un collectible amounts. An estimate for doubtful debt is made when
collection |
|
|
| of full amount is
no longer probable. Bad debts are written off as incurred. |
|
|
|
|
|
| 3.10 Foreign currency translation |
|
|
|
|
|
|
| Transactions in
foreign currencies are recorded using the rates of exchanges ruling at the
date of |
|
|
| transaction. |
|
|
|
|
|
|
| Assets and
liabilities in foreign currencies are translated into Rupees at exchanges
rates |
|
|
| approximating those
prevailing at the balance sheet date except where forward exchange contracts |
|
|
| have been entered
into for repayment of liabilities, in which case the rates contracted for are
used. |
|
|
|
|
|
| Any exchange gain
or loss charge to profit and loss account. |
|
|
|
|
|
| 3.11 Revenue recognition |
|
|
|
|
|
|
| — Revenue is recognized on dispatch of cement
to customer. |
|
|
|
|
|
| — Sale of pure slag is recognized on receipt
of slag by the customer. |
|
|
|
|
|
| 3.12 Provisions |
|
|
|
|
|
|
| A provision is
recognized in the balance sheet when the Company has a legal or constructive |
|
|
| obligation as a
result of past event, it is probable that an outflow of resources embodying
economic |
|
|
| benefits will be
required to settle the obligation and a reliable estimate can be made of the
amount of |
|
|
| obligation. |
|
|
|
|
|
|
| 3.13 Cash and cash equivalents |
|
|
|
|
|
|
| For the purpose of
cash flow statement, cash and cash equivalents comprise of cash and bank |
|
|
| balances. |
|
|
|
|
|
|
| 3.14 Financial instruments |
|
|
|
|
|
|
| All the financial
assets and liabilities are recognized at the time when the Company becomes a
party |
|
|
| to the contractual
provisions of the instrument. Any gain or loss on derecognition of the
financial |
|
|
| assets and
financial liabilities is taken to profit and loss account currently. |
|
|
|
|
|
| Financial
instruments carried on the balance sheet include receivables, cash and bank
balances, |
|
|
| creditors,
borrowings and other payables. The particular recognition method adopted is
disclosed in |
|
|
| the individual
policy statements associated with each item. |
|
|
|
|
|
| Financial assets
and liabilities are offset when the Company has a legally enforceable right
to offset |
|
|
| and intends to
settle either on a net basis or to realize the asset and settle the liability |
|
|
| simultaneously. |
|
|
|
|
|
|
|
|
|
2003 |
2002 |
|
|
|
|
RUPEES |
|
| 4. ISSUED, SUBSCRIBED AND PAID-UP-CAPITAL |
|
|
|
| 6,400,000 Ordinary shares of Rs.10/- each fully
paid in cash |
|
|
| (2002: 6,400,000
shares of Rs.10/- each) |
|
64,000,000 |
64,000,000 |
|
| 6,400,000 |
|
|
64,000,000 |
64,000,000 |
|
| 5. LONG TERM LOAN - Secured |
|
|
|
| Pakistan Industrial
Credit & Investment Corporation |
|
|
|
| Balance on 1st July |
|
|
12,733,522 |
23,939,550 |
|
| Less: Payment made
during the year |
|
|
9,000,000 |
11,206,028 |
|
|
|
|
3,733,522 |
12,733,522 |
|
| Less: Transferred
to current maturity |
|
|
3,733,522 |
9,000,000 |
|
|
|
|
— |
3,733,522 |
|
|
|
|
| 5.1 Repayment |
|
|
|
|
|
|
| The above amount
represent rescheduled loan from the PICIC. The Company entered into a loan |
|
|
| settlement
agreement with PICIC whereby the bank has fixed the Company's loan liability
at Rs.74.120 |
|
|
| million being the
aggregate of principal and mark-up due by the Company as on October 30, 1999
as per |
|
|
| book of PICIC. The
repayment schedule has been agreed as under: - |
|
|
|
|
|
| i) Down payment of
Rs.20.000 million by November 16, 1999. |
|
|
|
|
|
| ii) The balance decretal amount of Rs.12.120 million in equal
monthly installment of Rs.1.347 million |
|
|
| per month starting
from December 16, 1999. |
|
|
|
|
|
|
| iii) Out of the principal not yet due amount of Rs.42.000 million an
amount of Rs.28.516 million shall be |
|
|
| paid in 30 equal
monthly installment of Rs.0.95 million starting from December 15, 1999 and
the |
|
|
| balance amount of
Rs.13.484 million in 18 equal monthly installment Rs.0.75 million starting
from |
|
|
| June 15, 2002. |
|
|
|
|
|
|
| 5.2 Security |
|
|
|
|
|
|
| The loan is secured
against an equitable mortgage on all present and future operating assets and
a |
|
|
| floating charge on
all other assets of the Company ranking pari passu with National Bank of
Pakistan |
|
|
| (Formerly: National
Development Finance Corporation - NDFC). |
|
|
|
|
|
|
|
|
2003 |
2002 |
|
|
|
|
RUPEES |
|
| 6. SUPPLIER CREDIT - Secured |
|
|
|
|
| Mis. M. J.
Corporation |
|
|
30,000,000 |
30,000,000 |
|
| Less: Current
portion |
|
|
6,875,000 |
2,500,000 |
|
| Over due
installments |
|
|
2,500,000 |
— |
|
|
|
|
20,625,000 |
27,500,000 |
|
|
|
|
| 6.1 The Company has
purchased a cement plant under supplier's credit scheme from M/s. M. J. |
|
|
| Corporation. The
plant has value of Rs.30.000 million. The credit is secured against first
charge on |
|
|
|
|
|
| the plant supplied.
The credit carries a mark up rate of 10% per annum (2002: 10% per annum). The |
|
|
| credit is repayable
in 16 equal quarterly installments in five years including a grace period of
one |
|
|
| year. The loan
installment starts from 31st May 2003 and ends on 28th February 2007. |
|
|
|
|
|
|
|
|
2003 |
2002 |
|
|
|
|
RUPEES |
|
| 7. LONG TERM DEPOSITS - Unsecured |
|
|
|
|
| Dealer deposits -
Interest free |
|
|
1,125,655 |
1,125,655 |
|
|
|
|
| These represent
interest free security deposits from cement stockists repayable on
cancellation or |
|
|
| withdrawal of the
dealership. The Company in terms of Section 226 of the Companies Ordinance,
1984 |
|
|
| has not kept these
deposit in a separate account. For which, the Company is in the process of
complying |
|
|
| with Section 226,
whereby the agreements with stockist are being suitably amended. |
|
|
|
|
|
| 8. DEFERRED AND OTHER LIABILITIES |
|
|
|
| Staff Gratuity |
|
|
|
| Opening balance |
|
|
899,870 |
— |
|
| Provision for the
year |
|
|
950,722 |
899,870 |
|
|
|
|
1,850,592 |
899,870 |
|
| Less: Payment made |
|
|
39,962 |
— |
|
|
|
8.1 |
1,810,630 |
899,870 |
|
| Others |
|
8.2 |
110,131,129 |
— |
|
|
|
|
111,941,759 |
899,870 |
|
|
|
|
| 8.1 The Company has accounted for the gratuity
on liability method. No actuarial valuation has been |
|
|
| carried out for the
Company's obligation under the scheme, therefore, the liability is not
ascertainable |
|
|
| and the related
disclosures cannot be given as required by International Accounting Standard
- 19 |
|
|
| (IAS-19). However,
company intents to engage a qualified actually for the purpose in near
future. |
|
|
|
|
|
| 8.2 During the year Sardar
Muhammad Ashraf D. Baluch (Private) Limited has deferred liability payable |
|
| for two year upto
last year the same was reflected as other liability and was payable
currently. Now |
|
|
| the whole amount is
payable after 2005. Hence the same is being reflected as non current
liability. |
|
|
| The liability is
unsecured and interest free. |
|
|
|
|
|
|
| 9. CURRENT AND OVER DUE PORTION OF SUPPLIER
CREDIT |
|
|
| Current maturity |
|
|
6,875,000 |
2,500,000 |
|
| Over due
installments |
|
|
2,500,000 |
— |
|
|
|
|
9,375,000 |
2,500,000 |
|
| 10. SHORT TERM
FINANCE |
|
|
|
| Short-term running
finance - Secured |
|
|
— |
9,500,001 |
|
| Book over draft |
|
|
976,211 |
37,066,542 |
|
|
|
|
976,211 |
46,566,543 |
|
|
|
|
|
|
|
2003 |
2002 |
|
|
|
|
RUPEES |
|
| 11. TRADE CREDITORS |
|
|
|
| Due to associated
concerns |
|
|
84,457,375 |
6,019,296 |
|
| Others |
|
|
2,973,401 |
1,674,378 |
|
|
|
|
87,430,776 |
7,693,674 |
|
| 12. ACCRUED AND
OTHER LIABILITIES |
|
|
|
| Accrued expenses |
|
|
3,557,626 |
3,399,898 |
|
| Mark-up payable on
supplier credit |
|
|
3,750,000 |
1,000,000 |
|
| Mark-up payable on
running finance |
|
|
— |
466,736 |
|
| Royalty payable |
|
|
1,679,558 |
1,293,715 |
|
| Workers' profit
participation fund |
|
12.1 |
3,003,493 |
2,502,911 |
|
| Unclaimed dividend |
|
|
238,570 |
709,727 |
|
| Sales tax payable |
|
|
2,063,770 |
1,679,437 |
|
| Other liabilities |
|
|
731,821 |
79,205,441 |
|
|
|
|
15,024,838 |
90,257,865 |
|
| 12.1 Workers' profit participation fund |
|
|
|
| Opening balance |
|
|
2,502,911 |
1,448,444 |
|
| Interest provided |
|
|
|
| For the year |
|
|
500,582 |
417,152 |
|
| Prior years |
|
|
— |
637,315 |
|
|
|
|
500,582 |
1,054,467 |
|
|
|
|
3,003,493 |
2,502,911 |
|
| 13. PROVISION FOR
TAXATION |
|
|
|
| Balance brought
forward |
|
|
1,091,367 |
7,014,658 |
|
| Provision for the
year |
|
|
952,000 |
1,091,367 |
|
|
|
|
2,043,367 |
8,106,025 |
|
| Less: |
|
|
|
| Advance tax
adjusted |
|
|
1,091,367 |
4,513,675 |
|
| Excess provision of
prior year written back |
|
|
— |
2,500,983 |
|
|
|
|
1,091,367 |
7,014,658 |
|
|
|
|
952,000 |
1,091,367 |
|
|
|
|
| 13.1 The assessment
of the Company has been completed upto and including assessment year 2002 - |
|
|
| 2003 |
|
|
|
|
|
|
|
|
|
2003 |
|
|
|
|
|
Rupees |
|
|
| 13.2 Relationship
between tax expense and accounting profit |
|
|
| Accounting (loss)
before tax |
|
|
-9,024,490 |
|
|
| Applicable tax rate |
|
|
35% |
|
|
| Tax on accounting
(loss) |
|
|
-3,158,572 |
|
|
| Tax effect of
gratuity |
|
|
318,766 |
|
|
| Tax (refundable) /
payable under normal rules |
|
|
-2,839,806 |
|
|
| Minimum tax payable
under Income Tax |
|
|
|
| Ordinance, 2001
(Turnover tax) |
|
|
|
| Net sales as
reported |
|
|
186,468,285 |
|
|
| Applicable tax rate
of minimum tax liability |
|
|
0.50% |
|
|
| Maximum tax
liability under Income Tax Ordinance, 2001 |
|
932,342 |
|
|
|
|
|
| 14. CONTINGENCIES |
|
|
|
|
|
|
| 14.1 The National
Bank of Pakistan (formerly: National Development Finance Corporation -NDFC)
has |
|
|
| filed suit against
the Company for recovery of an amount of Rs.1.985 million (2002: Rs.1.985 |
|
|
| million). The
Company has already repaid an amount of Rs.11.129 million (2002: Rs.11.129
million) |
|
|
| through post dated
cheques issued in favour of NBP on the basis of loan settlement proposal |
|
|
| forwarded by the
Company. However, the National Bank of Pakistan (NBP) has not withdrawn the |
|
|
| suit due to which
an amount of Rs.1.985 million (2002: Rs.1.985 million) is still recoverable
from the |
|
|
| Company. The
management anticipates that the suit will be decided in it's favour and no
liability will |
|
|
| arise against the
Company and charge of NBP on Company's fixed assets will be vacated. |
|
|
|
|
|
| 14.2 Guarantee
issued by commercial bank on behalf of the Company amounting to Rs.3.473
million |
|
|
| (2002: 50.00
million). |
|
|
|
|
|
|
| 14.3 As referred to
in note No.6.1, the Company has entered into an agreement with Pakistan
Industrial |
|
|
| Credit and
Investment Corporation (PICIC) for settlement of loan at an agreed amount.
The said |
|
|
| agreement contains
a reverting clause, according to which in the case of default by the Company
in |
|
|
| making any
installment the PICIC will have the right to invoke the reverting clause
whereby the |
|
|
| Company will have
to pay mark-up amounting to Rs.29.190 million (2002: Rs.29.190 million) to |
|
|
| PICIC. This amount
is not charged to profit and loss account as management is making repayment |
|
|
| as per agreement
and do not foresee any circumstances that will give PICIC the right to invoke
the |
|
|
| reverting clause. |
|
|
|
|
|
|
| 14.4 During the
year the Company has lodged claim amounting to Rs.4.658 million with KESC for
excess |
|
|
| billing made during
the year. The management feels that their claim is based on sold grounds and |
|
|
| will be accepted
and no charge will arise to profit and loss account. The amount has been paid
under |
|
|
| protest and is now
reflected in other receivables. |
|
|
|
|
|
|
| 15. OPERATING FIXED
ASSETS |
|
|
|
|
|
|
|
Cost |
|
Depreciation |
Book value |
|
|
As at July 01, |
Addition / |
As at June |
Rate |
As at July |
For the |
As at June |
As at June |
As at June |
|
|
2002 |
(deletion) |
30, 2003 |
% |
01,2002 |
year |
30, 2003 |
30, 2003 |
30, 2002 |
|
|
(RUPEES) |
|
|
(RUPEES) |
|
|
|
|
|
| Land (Leasehold) |
|
6,721,750 |
— |
6,721,750 |
— |
— |
— |
— |
6,721,750 |
6,721,750 |
|
| Building on
leasehold |
45,451,614 |
— |
45,451,614 |
5 |
18,114.34 |
2,272,581 |
20.386,925 |
25 064,689 |
27.337 270 |
|
| land |
|
|
|
| Plant and Machinery |
163,913,569 |
— |
163,913,569 |
10 |
102,744.73 |
16,391,357 |
119,136,085 |
44.777.484 |
61,168,841 |
|
| Electric
Installations |
2,006,604 |
— |
2,006,604 |
10 |
1,187,595 |
81,901 |
1,269,496 |
737,108 |
819,009 |
|
| Motor Vehicles |
|
1,237,831 |
— |
1,237,831 |
20 |
1,016,335 |
44,299 |
1,060,634 |
177,197 |
221,496 |
|
| Furniture and
Fixtures |
849,272 |
33,000 |
882,272 |
10 |
490,386 |
39,188 |
529,574 |
352,698 |
358,886 |
|
| Office Equipment |
|
2,275,959 |
47,000 |
2,322,959 |
10 |
1,188,780 |
113,418 |
1,302,198 |
1,020,761 |
1,087,179 |
|
| Generator |
|
718,863 |
— |
718,863 |
10 |
447,136 |
27,173 |
474,309 |
244,554 |
271,727 |
|
| 2003 |
|
223,175,462 |
80,000 |
223,255,462 |
|
125,189,304 |
18,969,917 |
144,159,221 |
79,096,241 |
— |
|
| 2002 |
|
184,256,798 |
38,918,664 |
223,175,462 |
|
106,188,125 |
19,001,179 |
125,189,304 |
|
97,986,158 |
|
|
|
|
|
|
|
2003 |
2002 |
|
|
|
|
RUPEES |
|
| Depreciation charge
for the year has been allocated as follows. |
|
|
|
| Cost of goods sold |
|
|
18,856,499 |
18,880,381 |
|
| Administrative and
Selling expenses |
|
|
113,418 |
120,798 |
|
|
|
|
18,969,917 |
19,001,179 |
|
| 16. LONG TERM
DEPOSITS |
|
|
|
| Interest bearing |
16.1 |
|
|
492,080 |
492,080 |
|
| Interest free |
|
|
|
1,384,750 |
1,252,750 |
|
|
|
|
1,876,830 |
1 ,744,830 |
|
|
|
|
| 16.1 This represent amount deposited into Karachi Electric Supply
Corporation Limited against supply of |
|
| electricity. The
Company earns interest at the rate of 5% per annum of outstanding deposits. |
|
|
|
|
|
| 17. STORES, SPARES
AND LOOSE TOOLS |
|
|
|
| Stores |
|
|
4,919,867 |
1,748,405 |
|
| Spares |
|
|
1,782,561 |
599,295 |
|
| Loose tools |
|
|
427,815 |
289,825 |
|
|
|
|
7,130,243 |
2,637,525 |
|
| 18. STOCK-IN-TRADE |
|
|
|
| Raw material |
|
|
61,040,515 |
32,445,614 |
|
| Packing material |
|
|
4,289,891 |
3,367,058 |
|
| Work-in-process |
|
|
492,556 |
512,965 |
|
| Finished goods |
|
|
3,787,529 |
2,564,825 |
|
|
|
|
69,610,491 |
38,890,462 |
|
|
|
|
|
|
|
|
|
|
|
2003 |
2002 |
|
|
|
|
RUPEES |
|
| 19. TRADE DEBTS -
Unsecured |
|
|
|
| Trade debts -
Considered good |
|
|
50,784,206 |
24,936,247 |
|
| 20. LOANS,
ADVANCES, TRADE DEPOSITS, PREPAYMENTS |
|
|
| AND OTHER
RECEIVABLES |
|
|
|
| Loans |
|
|
|
| — to staff -
considered good |
|
|
616,446 |
629,916 |
|
| Advances -
Considered good |
|
|
|
| — to Suppliers |
|
|
490,635 |
490,635 |
|
| — Against expenses |
|
|
1,038,255 |
265,996 |
|
| — Against purchases |
|
|
6,463,362 |
562,216 |
|
|
|
|
7,992,252 |
1,318,847 |
|
| Trade deposits |
|
|
600,000 |
800,000 |
|
| Prepayments |
|
|
|
| Central excise duty |
|
|
3,313,169 |
981,669 |
|
| Other receivables |
|
20.1 |
4,678,246 |
15,910 |
|
|
|
|
17,200,113 |
3,746,342 |
|
|
|
|
| 20.1 Other
receivables include claim of Rs.4.658 million lodged with KESC for excess
units billed during |
|
|
| the year, as
mentioned in note 14.4 of the financial statements. |
|
|
|
|
|
| 21. CASH AND BANK
BALANCES |
|
|
|
|
| Cash in hand |
|
|
36,079 |
55,000 |
|
| Cash at bank |
|
|
|
| In current account |
|
|
1,037,319 |
71,920 |
|
| In dividend account |
|
|
228,385 |
699,542 |
|
| In deposit account |
|
|
9,675,347 |
101,685 |
|
|
|
|
10,977,130 |
928,147 |
|
| 22. SALES |
|
|
|
| Ordinary Portland
Cement |
|
|
315,363,158 |
274,709,360 |
|
| Granulated Slag |
|
|
— |
49,549,376 |
|
| Boulder Slag |
|
|
176,593 |
1,073,548 |
|
|
|
|
315,539,751 |
325,332,284 |
|
| Less: |
|
|
|
| — Central excise
duty |
|
|
75,815,500 |
68,009,000 |
|
| — Sales tax |
|
|
45,039,156 |
49,582,546 |
|
| — Trade discount |
|
|
8,216,810 |
— |
|
|
|
|
129,071,466 |
117,591,546 |
|
|
|
|
186,468,285 |
207,740,738 |
|
|
|
|
|
|
|
2003 |
2002 |
|
|
|
|
RUPEES |
|
| 23. COST OF GOODS
SOLD |
|
|
|
| Raw and packing
material consumed |
|
23.1 |
139,301,956 |
147,833,226 |
|
| Stores, spares and
loose tools consumed |
|
|
2,627,789 |
2,235,524 |
|
| Fuel and power |
|
|
19,491,292 |
16.411,524 |
|
| Salaries, wages and
benefits |
|
23.4 |
6,688,372 |
5,927,280 |
|
| Grinding charges |
|
|
— |
12,146.76 |
|
| Repair and
maintenance |
|
|
863,511 |
246,070 |
|
| Depreciation |
|
15 |
18,856,499 |
18.880,381 |
|
| Other production
overheads |
|
|
3,807,971 |
3,035,756 |
|
|
|
|
191,637,390 |
206,716,517 |
|
| Work-in-process |
|
23.2 |
20,409 |
-31,068 |
|
| Cost of goods
manufactured |
|
|
191,657,799 |
206,685,449 |
|
| Finished goods |
|
23.3 |
-1,222,704 |
-561,366 |
|
|
|
|
190,435,095 |
206,124,083 |
|
| 23.1 Raw and packing material consumed |
|
|
|
| Opening stock |
|
|
35,812,672 |
33,159,122 |
|
| Purchases |
|
|
168,819,690 |
150,486,776 |
|
| Available for use |
|
|
204,632,362 |
183,645,898 |
|
| Closing stock |
|
|
-65,330,406 |
-35,812,672 |
|
|
|
|
139,301,956 |
147,833,226 |
|
| 23.2 Work-in-process |
|
|
|
| Opening
work-in-process |
|
|
512,965 |
481,897 |
|
| Closing
work-in-process |
|
|
-492,556 |
-512,965 |
|
|
|
|
20,409 |
-31,068 |
|
| 23.3 Finished goods |
|
|
|
| Opening stock |
|
|
2,564,825 |
2,003,459 |
|
| Closing stock |
|
|
-3,787,529 |
-2,564,825 |
|
|
|
|
-1,222,704 |
-561,366 |
|
|
|
|
|
|
|
2003 |
2002 |
|
|
|
|
RUPEES |
|
| 24. ADMINISTRATIVE
AND SELLING EXPENSES |
|
|
|
| Salaries,
allowances and benefits 24.1 |
|
1,668,880 |
1,467,112 |
|
| Traveling and
conveyance |
|
|
431,903 |
96,692 |
|
| Motor vehicle
running |
|
|
222,517 |
82,076 |
|
| Telephone, postage
and telegram |
|
|
454,797 |
330,970 |
|
| Printing and
stationery |
|
|
566,795 |
424,880 |
|
| Legal and
professional |
|
|
673,541 |
387,852 |
|
| Loading and
unloading |
|
|
683,895 |
— |
|
| Auditors'
remuneration
24.2 |
|
140,000 |
115,000 |
|
| Advertisement and
subscription |
|
|
— |
10,000 |
|
| Entertainment |
|
|
223,955 |
117,916 |
|
| Newspaper and
periodicals |
|
|
6,900 |
6,521 |
|
| Repair and
maintenance |
|
|
203,177 |
164,781 |
|
| Depreciation
15 |
|
113,418 |
120,798 |
|
| Trade-mark written
off |
|
|
— |
10,000 |
|
| Miscellaneous |
|
|
226,602 |
97,002 |
|
|
|
|
5,616,380 |
3,431,600 |
|
| 24.1 Salaries, allowances
and benefits include
Rs.188,761/- (2002: Rs.136,114/-) relating
to staff |
|
|
| retirement
benefits. |
|
|
|
|
| 24.2 Auditors' remuneration |
|
|
|
|
| Statutory audit |
|
|
80,000 |
80,000 |
|
| Cost audit |
|
|
25,000 |
25,000 |
|
| Half yearly review |
|
|
25,000 |
— |
|
| Out of pocket
expenses |
|
|
10,000 |
10,000 |
|
|
|
|
140,000 |
115,000 |
|
| 25. FINANCIAL
CHARGES |
|
|
|
| Bank charges |
|
|
27,694 |
38,678 |
|
| Mark-up on supplier
credit |
|
|
2,750,000 |
1,000,000 |
|
| Mark-up on
short-term borrowing |
|
|
— |
3,703,583 |
|
| Interest on
workers' profit participation fund |
|
|
500,582 |
1,054,467 |
|
| Guarantee
commission |
|
|
140,939 |
904,632 |
|
|
|
|
3,419,215 |
6,701,360 |
|
| 26. OTHER INCOME |
|
|
|
| Sales tax recovered |
|
|
— |
1,188,114 |
|
| Director
remuneration waived written back |
|
|
— |
1,612,847 |
|
| Profit on K.E.S.C.
deposits |
|
|
24,600 |
24,600 |
|
| Profit on bank
deposits |
|
|
1,522,427 |
72,578 |
|
| Sale of waste paper
bags |
|
|
695,530 |
24,251 |
|
| Liabilities no
longer required to be paid, written back |
|
|
1,735,358 |
— |
|
|
|
|
3,977,915 |
2,922,390 |
|
|
|
|
| CEMENT |
|
|
2003 |
2002 |
|
|
|
|
|
RUPEES |
|
| 27. (LOSS) PER
SHARE - Basic |
|
|
|
| (Loss) after
taxation |
|
|
-9,976,490 |
-4,184,299 |
|
|
|
|
Number of Shares |
|
| Weighted average
number of ordinary shares |
|
|
|
| outstanding during
the year |
|
|
6,400,000 |
6,400,000 |
|
|
|
|
RUPEES |
|
| (Loss) per share -
basic |
|
|
-1.56 |
-0.65 |
|
| 28. CASH GENERATED
FROM OPERATIONS |
|
|
|
| (Loss) before
taxation |
|
|
-9,024,490 |
-5,593,915 |
|
| Adjustment for non
cash charges and other items |
|
|
|
| Deferred liability
for staff gratuity |
|
|
950,722 |
899,870 |
|
| Depreciation |
|
|
18,969,917 |
19,001,179 |
|
| Financial charges |
|
|
3,419,215 |
5,758,050 |
|
| Liabilities written
back |
|
|
-1,735,358 |
— |
|
| Trade mark written
off |
|
|
— |
10,000 |
|
| Interest income |
|
|
-1,547,027 |
— |
|
| Changes in working
capital |
|
28.1 |
-25,253,178 |
-3,677,961 |
|
|
|
|
-14,220,199 |
16,397,223 |
|
| 28.1 Changes in working capital |
|
|
|
| (Increase) /
decrease in current assets |
|
|
|
| Stores and spares |
|
|
-4,492,718 |
224,999 |
|
| Stock in trade |
|
|
-30,720,029 |
-3,245,984 |
|
| Trade debts |
|
|
-25,847,959 |
-877,456 |
|
| Loans, advances,
deposits, prepayments |
|
|
|
| & other
receivable |
|
|
-13,453,771 |
2,623,507 |
|
| Net decrease /
(increase) in current assets |
|
|
-74,514,477 |
-1,274,934 |
|
| Increase /
(decrease) in current liabilities |
|
|
|
| Short-term finance
- Secured |
|
|
-45,590,332 |
12,429,350 |
|
| Trade creditor |
|
|
81,472,460 |
-58,713,428 |
|
| Accrued and other
liabilities |
|
|
-2,579,946 |
43,881,051 |
|
| Advance from
customers |
|
|
15,959,117 |
— |
|
| Net (decrease) /
increase in current liabilities |
|
|
49,261,299 |
-2,403,027 |
|
| Changes in working
capital |
|
|
-25,253,178 |
-3,677,961 |
|
|
|
|
| CEMENT |
|
|
|
|
|
|
2003 |
2002 |
|
| 29 PLANT CAPACITY AND ACTUAL PRODUCTION |
|
|
Metric Tons |
|
| Installed Capacity
(Based on 300 working days) |
|
29.1 |
255,000 |
255,000 |
|
| Production |
|
29.2 |
77,628 |
68,245 |
|
|
|
|
| 29.1 Installed Capacity |
|
|
|
|
|
|
| The plant does not
produce clinker. Installed capacity is only for grinding. |
|
|
|
|
|
| 29.2 Production |
|
|
|
|
|
|
| Due to market
constraints, the Company could only operate at this level of capacity. |
|
|
| 30 FINANCIAL ASSETS AND LIABILITIES |
|
|
|
|
|
|
| The Company's
exposure to interest / mark-up rate on its financial assets and liabilities
are summarized as |
|
|
| under: |
|
|
|
|
|
|
|
Effective |
Interest / Markup bearing |
Non Interest / Markup bearing |
Total |
|
|
interest |
|
|
|
|
|
|
Maturity |
Maturity |
Total |
Maturity |
Maturity |
Total |
|
|
|
|
upto one |
after one |
|
upto one |
after one |
|
2003 |
2002 |
|
|
|
year |
year |
|
year |
year |
|
|
| Financial Assets |
|
|
|
|
| Deposits |
|
5% |
— |
492,080 |
492,080 |
600,000 |
1,384,750 |
1,984,750 |
2,476,830 |
3,036,910 |
|
| Trade debts |
|
— |
— |
— |
— |
50,784,206 |
— |
50,784,206 |
50,784,206 |
24,936,247 |
|
| Loans, and other |
|
|
|
|
| receivables |
|
— |
— |
— |
— |
636,356 |
— |
636,356 |
636,356 |
645,826 |
|
| Cash and bank |
|
|
|
|
| balances |
|
5% to 6% |
9,675,347 |
— |
9,675,347 |
1,301,783 |
— |
1,301,783 |
10,977,130 |
928,147 |
|
| Total |
|
9,675,347 |
492,080 |
10,167,427 |
53,322,345 |
1,384,750 |
54,707,095 |
64,874,522 |
29,547,130 |
|
| Financial
Liabilities |
|
|
|
|
| Supplier Credit |
|
10% |
9,375,000 |
20,625,000 |
30,000,000 |
— |
— |
— |
30,000,000 |
30,000,000 |
|
| Long term loans |
|
— |
— |
— |
— |
3,733,522 |
— |
3,733,522 |
3,733,522 |
12,733,522 |
|
| Long-term deposits |
— |
— |
— |
— |
— |
1,125,655 |
1,125,655 |
1,125,655 |
1,125,655 |
|
| Deferred and other |
|
|
|
|
| liabilities |
|
— |
— |
— |
— |
— |
110,131,129 |
110,131,129 |
110,131,129 |
— |
|
| Short term finances |
— |
— |
— |
— |
976,211 |
— |
976,211 |
976,211 |
46,566,543 |
|
| Trade Creditors |
|
— |
— |
— |
— |
87,430,776 |
— |
87,430,776 |
87,430,776 |
7,693,674 |
|
| Accrued and other |
|
|
|
|
| liabilities |
|
— |
— |
— |
— |
12,961,068 |
— |
12,961,068 |
12,961,068 |
88,578,428 |
|
| Total |
|
|
9,375,000 |
20,625,000 |
30,000,000 |
105,101,577 |
111,256,784 |
216,358,361 |
246,358,361 |
186,697,822 |
|
| 2003 |
|
|
300,347 |
-20,132,920 |
-19,832,573 |
-51,779,232 |
-109,872,034 |
-161,651,266 |
-181,483,839 |
— |
|
| 2002 |
|
|
-20,898,316 |
-30,741,442 |
-51,639,758 |
-106,130,109 |
127,095 |
-105,510,934 |
— |
-157,150,692 |
|
|
|
|
| 30.1 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES |
|
|
|
|
|
| The carrying
amounts of the financial assets and liabilities approximate their fair
values. |
|
|
|
|
|
| 30.2 CONCENTRATION OF CREDIT RISK AND |
|
|
|
|
|
|
| CREDIT EXPOSURES OF
THE FINANCIAL STATEMENTS |
|
|
|
|
|
| The Company does
not believe it is exposed to major concentration of credit risk. The Company |
|
|
| applies approved
limits to the amount of credit exposure to any one customer. |
|
|
|
|
|
| 31. REMUNERATION OF
DIRECTORS AND EXECUTIVES |
|
|
|
|
|
| The aggregate
amount charged in the accounts for remuneration, including all benefits, to
the Chief |
|
|
| Executive,
Directors and Executives of the Company was as follows: |
|
|
|
|
|
|
Chief Executive |
Directors |
Executive |
Total |
|
|
2003 |
2002 |
2003 |
2002 |
2003 |
2002 |
2003 |
2002 |
|
|
|
(RUP |
EES) |
|
|
| Managerial |
|
— |
— |
— |
— |
120,012 |
112,686 |
120,012 |
112,686 |
|
| House rent
allowance |
— |
— |
— |
— |
54,588 |
50,709 |
54,588 |
50,709 |
|
| Utilities |
|
— |
— |
— |
— |
1,800 |
2,626 |
1,800 |
2,626 |
|
| Conveyance |
|
— |
— |
— |
— |
3,600 |
3,000 |
3,600 |
3,000 |
|
| Gratuity |
|
— |
— |
— |
— |
1,500 |
— |
1,500 |
— |
|
|
— |
— |
— |
— |
195,000 |
169,021 |
195,000 |
169,021 |
|
| Number of Persons |
1 |
1 |
6 |
6 |
1 |
1 |
8 |
8 |
|
|
|
|
|
|
|
2003 |
2002 |
|
|
|
|
RUPEES |
|
| 32. TRANSACTION
WITH ASSOCIATED UNDERTAKING |
|
|
| Sales of goods to
associated undertakings |
|
|
962,546 |
1,073,549 |
|
| Purchase of goods
from associated undertakings |
|
|
142,725,959 |
154,520,260 |
|
| Services provided
by associated undertakings |
|
|
— |
12,146,756 |
|
|
|
|
| 32.1 Related
parties disclosures |
|
|
|
|
|
|
| Following are the
related parties of the company on the basis of common directorship and / or
being |
|
|
| operated under
common management control:: |
|
|
|
|
|
|
| — Zeal Pak Cement Factory Limited |
|
|
|
|
|
|
| — Indus Steel Pipes Limited |
|
|
|
|
|
|
| — Zeal Pak Paper Sack (Private) Limited |
|
|
|
|
|
|
| 33. NUMBER OF
EMPLOYEES |
|
|
|
|
| Number of employees
as June 30 |
|
|
93 |
93 |
|
|
|
|
| 34. GENERAL |
|
|
|
|
|
|
| 34.1 These
financial statements are authorized for issue on October 08, 2003 in
accordance with the |
|
|
| resolution of the
Board of Directors of the company |
|
|
|
|
|
|
| 34.2 Corresponding
figures have been rearranged and reclassified for comparison, where
necessary. |
|
|
|
|
|
| 34.3 Figures have
been rounded off to the nearest rupee. |
|
|
|
|
|
|
| Pattern of
Shareholding |
|
|
|
| As at June 30, 2003 |
|
|
|
|
|
|
| No. of Share Holders |
From |
To |
Total Shares Held |
Percentage |
|
|
| 588 |
1 |
100 |
58,800 |
0.92% |
|
|
| 1908 |
101 |
500 |
915,200 |
14.30% |
|
|
| 41 |
501 |
1000 |
39,200 |
0.61% |
|
|
| 34 |
1001 |
5000 |
93,800 |
1 .47% |
|
|
| 4 |
5001 |
10000 |
31,900 |
0.50% |
|
|
| 2 |
10001 |
15000 |
28,100 |
0.44% |
|
|
| 2 |
15001 |
20000 |
40,000 |
0.63% |
|
|
| 1 |
925001 |
930000 |
927,000 |
14.48% |
|
|
| 1 |
1065001 |
1070000 |
1,066,000 |
16.66% |
|
|
| 1 |
3195001 |
3200000 |
3,200,000 |
50.00% |
|
|
| 2,582 |
Total |
6,400,000 |
100.00% |
|
|
|
|
|
| Categories of
Shareholders |
|
|
|
| As on June 30, 2003 |
|
|
|
|
|
|
| Particulars |
|
Shareholders |
Shareholding |
Percentage |
|
|
| INDIVIDUALS |
|
2564 |
1,881,300 |
29.4 |
|
|
| FINANCIAL
INSTITUTIONS |
|
2 |
238,700 |
3.73 |
|
|
| FOREIGN COMPANIES |
|
1 |
1,066,000 |
16.66 |
|
|
| OTHERS |
|
15 |
3,214,000 |
50.22 |
|
|
| COMPANY TOTAL |
|
2582 |
6,400,000 |
100 |
|
|
|
|
|
| Pattern of
Shareholding |
|
|
|
|
| As at June 30 2003 |
|
|
|
|
|
|
|
| Category of
Shareholders |
|
Number |
Shares Held |
Percentage |
|
|
| Associated
Companies, Undertakings |
|
|
|
| and Related Parties |
|
|
|
| NIT and ICP |
|
2 |
238,700 |
3.73% |
|
|
| National Bank of
Pakistan Trustee Deptt. |
|
200,000 |
3.13% |
|
|
| Investment
Corporation of Pakistan |
|
|
38,700 |
0.60% |
|
|
| Directors, CEO
& their Spouses |
|
|
|
|
| and Minor Children |
|
7 |
3,500 |
0.05% |
|
|
| Mr. Jehangir Akber |
|
|
500 |
0.01% |
|
|
| Mr. Faiz Muhammad |
|
|
500 |
0.01% |
|
|
| Mr. Nisar Ahmed
Korai |
|
|
500 |
0.01% |
|
|
| Mr. Muhammad Naeem
Khan |
|
|
500 |
0.01% |
|
|
| Mr. Munir |
|
|
500 |
0.01% |
|
|
| Mr. Haji Ghulam
Shabbir |
|
|
500 |
0.01% |
|
|
| Mr. Ejaz Ali Panhor |
|
|
500 |
0.01% |
|
|
| Executive |
|
|
— |
— |
|
|
| Public Sector
Companies |
|
|
— |
— |
|
|
| and Corporations |
|
|
|
|
| Banks, Developmnt
Finance Institutions, Non - Banking |
|
— |
— |
|
|
| Finance
Institutions, Insurance Companies , |
|
|
|
| Modarabas and
Mutual Funds |
|
|
|
|
| Shareholders
holding ten Percent or |
|
2 |
4,266,000 |
66.66% |
|
|
| more voting
interest in the company |
|
|
|
|
| Sikandar Ali Jatoi |
|
|
3,200,000 |
50.00% |
|
|
| Landsdown
Investment Limited (Foreign Co.) |
|
1,066,000 |
16.66% |
|
|
| Individual |
|
2,564 |
1,881,300 |
29.40% |
|
|
| Others |
|
7 |
10,500 |
0.16% |
|
|
| Eastern Capital
Limited |
|
|
400 |
0.01% |
|
|
| Munaf Sattar
Securities (Pvt.) Limited |
|
2,000 |
0.03% |
|
|
| M. S. Securities
(Pvt.) Limited |
|
|
500 |
0.01% |
|
|
| Zillion Capital
Securities (Pvt.) Limited |
|
500 |
0.01% |
|
|
| Motiwala Securities
(Pvt.) Limited |
|
|
100 |
0.00% |
|
|
| Dosslani's
Securities (Pvt.) Limited |
|
|
3,000 |
0.05% |
|
|
| AI-Mal Securities
& Services Limited |
|
|
4,000 |
0.06% |
|
|
|
2582 |
6,400,000 |
100.00% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
