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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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| 5) Mr. Haji Ghulam Shabbir |
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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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