| Dadabhoy Cement Industries Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| COMPANY
INFORMATION |
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| NOTICE
OF THE MEETING |
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| DIRECTORS'
REPORT |
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| GRAPHS |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| BALANCE
SHEET |
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| PROFIT
AND LOSS ACCOUNT |
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| CASH
FLOW STATEMENT |
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| STATEMENT
OF CHANGES IN EQUITY |
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| NOTES
TO THE ACCOUNTS |
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| PATTERN
OF HOLDING OF THE SHARES |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
|
|
| Mr.
Mohammad Hussain Dadabhoy |
Chairman |
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| Mrs.
Razia Hussain Dadabhoy |
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| Mrs.
Humaira Dadabhoy |
|
| Mr.
Mohammad Amin Dadabhoy |
|
Chief Executive |
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| Ms.
Yasmeen Dadabhoy |
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| Mr.
Fazal Karim Dadabhoy |
|
| Mr.
Naseemuddin |
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| COMPANY
SECRETARY |
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| Mr.
Abdul Wahab |
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| AUDITORS |
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| Sidat
Hyder Qamar & Co. |
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| Chartered
Accountants |
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| LEGAL
ADVISOR |
|
| Aziz A. Munshi |
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| BANKERS |
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| Allied
Bank of Pakistan Limited |
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| United
Bank Limited |
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| National
Development Finance Corporation |
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| National
Bank of Pakistan |
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| Deutsche Bank |
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| Bank of Punjab |
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| REGISTERED
OFFICE & SHARE DEPTT. |
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| 5th
Floor, Maqbool Commercial Complex |
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| JCHS
Block 7 & 8 |
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| Shahrah-e-Faisal,
Karachi. |
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| FACTORY |
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| Nooriabad
Deh Kalu Kohar, |
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| Dist.
Dadu (Sindh) |
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| NOTICE
OF 20TH ANNUAL GENERAL MEETING OF SHAREHOLDERS |
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| Notice
is hereby given that the 20th Annual General Meeting of Dadabhoy Cement
Industries Limited |
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| will
be held at 11.00 A.M. on Wednesday the December 20, 2000 at Defence Sunset
Club, Defence |
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| Housing
Authority, Karachi, to transact the following business: |
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| 1.
To confirm the minutes of the 19th Annual General Meeting of the Company held
on December |
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| 29, 1999. |
|
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| 2.
To receive and adopt the Audited Accounts together with Directors' and
Auditors' Report for the |
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| year
ended June 30, 2000. |
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| 3.
To approve 5% interim dividend declared during the year 2000. |
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| 4.
To appoint Auditors for the year 2001 and to fix their remuneration. |
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| 5.
To review & discuss the optimization of the project. |
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| 6.
Any other business with the permission of the Chair. |
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|
By Order of the Board |
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|
ABDUL WAHAB |
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| November
22, 2000 |
|
Company Secretary |
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| NOTE: |
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| 1.
The share transfer books of the Company will remain closed from December 14,
2000 to December |
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| 20,
2000 (both days inclusive) |
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| 2.
Any member of the Company entitled to attend and vote may appoint another
member as his/her |
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| Proxy
to attend and vote on his/her behalf. |
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| 3.
Proxies must be received at the registered office of the company not less
than 48 hours before |
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| the meeting. |
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| DIRECTORS'
REPORT |
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| The
Board of Directors of your Company has pleasure in presenting the Annual
Report, together with |
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| the
audited accounts for the year ended June 30, 2000. |
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| Operating
Results |
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| During
the year under review, the net sales amounting to Rs. 776 million (1999 Rs.
703 million) and |
|
| a
pre-tax profit of Rs. 84 million after charging depreciation of Rs. 42
million and financial charges |
|
| 12
million (1999 Rs. 5 million after charging depreciation Rs. 34 million and
financial charges Rs. |
|
| 19 million). |
|
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| During
the year under review the cement industry continued to experience stiff
competition in the |
|
| market
and has maintained a downward pressure on prices of cement. The existing over
capacity in |
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| the
industry has resulted in an industry wide lower capacity utilization.
However, continued cost cutting |
|
| methods
and reduction in overheads costs, your company has maintained substantial
improvement |
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| over
the last year. |
|
|
| While
the concern of oversupply and continuous increase in furnace oil prices still
remain, we hope |
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| the
improvement trend that has been witnessed since the last twelve months will
continue, for the good |
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| of
the industry as a whole. |
|
|
| Future
Prospects |
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| With
the improved financial discipline and economic revival strategies being
introduced by the |
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| government,
the country's economy is expected to start improving. This improvement in
economy |
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| will
most likely further improve the growth rate of cement consumption. |
|
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| The
increasing rate of local consumption and the expected opening up of exports
will enhance the |
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| capacity
utilization ratio, and the gap in supply and demand caused by the temporary
over supply |
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| position
is expected to further reduce in the coming years. |
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|
| Expansion
Project |
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| Much
progress has been achieved towards completion of the expansion project.
However, in the year |
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| under
review efforts were focused on optimizing capacity of the present operational
line and will be |
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| completed
and stabilized in due course of time. |
|
|
| Case
with NDFC |
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|
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| As
Board of Directors informed you in their last report that Company had filed
judicial applications |
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| in
the High Court of Sindh against NDFC. The High Court of Sindh on august 28,
2000 has passed |
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| an
order to appoint a firm of Chartered Accountants to look into the figures
mentioned in the plaint |
|
| as
principal amount and verify from the plaintiff i.e. NDFC as to how this
amount has been computed. |
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|
|
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| Management
hopes that on the basis of merit these applications will be decided in favour
of Company |
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| and
ultimately all shareholders will get benefit of the same. |
|
|
| Auditors |
|
|
| M/s.
Sidat Hyder Qamar & Co., Chartered Accountants, the present auditors
retire and being eligible |
|
| offer
themselves for reappointment for next year. |
|
|
| Pattern
of Shareholding |
|
|
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| The
Shareholding pattern of the Company as on June 30, 2000 is included in the
annual report. |
|
|
| Management
Relationship |
|
| The
management relations remained cordial throughout the year and Board wishes to
place on record |
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| its
appreciation for the dedicated efforts and services rendered by the officers
and workers with the |
|
| expectation
that the same zeal would be witnessed in the years to come. |
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|
| Acknowledgements |
|
| I
acknowledge with deep appreciation and wish to place on record our thanks to
customers who |
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| patronize
our products and appreciate the help and support from the vendors and
contractors because |
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| of
whose prompt services we have made good progress on our projects. |
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|
For and on behalf of the Board |
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| Karachi |
|
MUHAMMAD AMIN DADABHOY |
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| November
22, 2000 |
|
Chief Executive |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of DADABHOY CEMENT
INDUSTRIES LIMITED as at |
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| 30
June 2000 and the related profit and loss account, cash flow statement and
statement of changes |
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| in
equity together with the notes forming part thereof, for the year then ended
and we state that we |
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| have
obtained all the information and explanations which, to the best of our
knowledge and belief, |
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| were
necessary for the purposes of our audit. |
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| It
is the responsibility of the Company's management to establish and maintain a
system of internal |
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| control,
and prepare and present the above said statements in conformity with the
approved accounting |
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| standards
and the requirements of the Companies Ordinance, 1984. Our responsibility is
to express |
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| an
opinion on these statements based on our audit. |
|
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| We
conducted 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
statements. An audit also |
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| includes
assessing the accounting policies and significant estimates made by
management, as well as, |
|
| evaluating
the overall presentation of the 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 account have been kept by the Company as
required by |
|
| the
Companies Ordinance, 1984; |
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|
|
|
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| b)
in our opinion |
|
|
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| i)
the balance sheet and profit and loss account together with the notes thereon
have been |
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| drawn
up in conformity with the Companies Ordinance, 1984, and are in agreement |
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| with
the books of account and are further in accordance with accounting policies |
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| consistently
applied except for the change as stated in note 2.4 to the accounts with |
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| which
we concur; |
|
|
|
|
| ii)
the expenditure incurred during the year was for the purpose of the Company's
business; and |
|
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| iii)
the business conducted, investments made and the expenditure incurred during
the year |
|
| were
in accordance with the objects of the Company except for the fact that the |
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| Company
has made advances as referred to in note 19.1 and 19.2 to the accounts |
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| contrary
to provisions of the Companies Ordinance, 1984. However, such advances |
|
| have
been realized/adjusted subsequent to balance sheet date: |
|
|
| c)
in our opinion and to the best of our information and according to the
explanations given |
|
| to
us, the balance sheet, profit and loss account, 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 |
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| Companies
Ordinance, 1984, in the manner so required and respectively give a true and |
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| fair
view of the state of the Company's affairs as at 30 June 2000 and of the
profit, its |
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| cash
flows and changes in equity for the year then ended; and |
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|
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| d)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
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|
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| We
draw attention to the following matters: |
|
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| i)
as disclosed in notes 6.2 and 6.3 to the accounts, the Company has filed
various Judicial |
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| Applications
in the High Court of Sindh against the lender of interest and mark-up |
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| based
long term loans, aggregating to Rs. 598.913 (1999: Rs. 598.913) million, for |
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| the
reasons given in the above referred notes. These applications are currently
pending |
|
| with
the High Court of Sindh and, accordingly, a final decision in this regard has
not |
|
| been
rendered todate by the above referred Court. |
|
|
|
|
|
| ii)
interest and mark-up on long term loans, aggregating to Rs. 67.480 (1999:
67.480) |
|
| million,
as stated in notes 6.2 and 6.3 to the accounts have been recorded in the |
|
| accounts
as reduction of outstanding balances of long term loans for the reasons state |
|
| in
the above referred notes. |
|
|
|
|
| iii)
the ultimate outcome of contingencies disclosed in note 11 to the accounts,
aggregating |
|
| to
Rs. 536.515 (1999: Rs. 427.130) million, cannot presently be determined and, |
|
| hence,
no provision that may result therefrom has been made in the accounts for the |
|
| current year. |
|
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| iv)
as stated in note 2.6 to the accounts the Company is charging depreciation on
cost of |
|
| plant,
machinery and quarry equipment on the basis of production unit method,
whereby |
|
| the
rate of depreciation is computed with reference to the proportion which the
actual |
|
| production
bears to production units estimated to be produced during the useful economic |
|
| life
of such assets. The Company over the recent years is experiencing a slump in |
|
| demand
and hence decline in production thereby giving rise to unutilised capacity.
In |
|
| view
of the above, there is a need to review the depreciation method currently
being |
|
| applied
to the above assets and if, there has been a significant change in the
expected |
|
| pattern
of economic benefits from these assets, such method be adopted as would
reflect |
|
| the
changed pattern as required by IAS-16 "Property, Plant and
Equipment". |
|
|
|
|
|
|
| Karachi |
|
|
Sidat Hyder Qamar & Co. |
|
| Dated:
22nd November, 2000 |
|
Chartered Accountants |
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
Note |
2000 |
1999 |
|
|
|
|
(Rupees in
'000') |
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorized
Capital |
|
| 60,000,000
Ordinary shares of Rs. 10/- each |
|
600,000 |
600,000 |
|
|
|
|
========== |
========== |
|
| Issued,
Subscribed and paid-up capital |
3 |
398,688 |
398,688 |
|
| Capital reserve |
|
|
|
33,224 |
33,224 |
|
| General reserve |
|
|
|
-- |
90,000 |
|
| Accumulated
profit / (loss) |
|
9,242 |
(115,755) |
|
|
------------------ |
------------------ |
|
|
|
|
441,154 |
406,157 |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
4 |
791,380 |
487,688 |
|
| REDEEMABLE
CAPITAL |
|
5 |
18,630 |
22,986 |
|
| LONG
TERM LOANS -secured |
|
6 |
489,357 |
578,401 |
|
| LONG
TERM DEPOSITS |
|
7 |
26,318 |
35,098 |
|
| DEFERRED
TAXATION |
|
27 |
25,000 |
-- |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
| Current
maturities of redeemable capital and |
|
| long term loans |
|
8 |
186,797 |
1,304,571 |
|
| Running
finance under mark-up arrangement-secured |
9 |
4,477 |
10,590 |
|
| Short term loan |
|
|
-- |
6,438 |
|
| Creditors,
accrued and other liabilities |
10 |
232,733 |
2,311,291 |
|
| Taxation-net |
|
|
|
2,143 |
3,407 |
|
| Unclaimed
dividend |
|
|
6,571 |
6,575 |
|
| Dividend
payable |
|
|
8,654 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
441,375 |
388,596 |
|
| CONTINGENCIES
AND COMMITMENTS |
11 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,233,214 |
1,918,926 |
|
|
|
========== |
========== |
|
| FIXED
ASSETS - TANGIBLE |
|
|
| Operating
assets |
|
12 |
1,775,575 |
1,510,231 |
|
| Capital
work-in-progress |
|
13 |
24,635 |
16,079 |
|
| Spares
held for capital expenditure purposes |
|
15,833 |
23,990 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,816,043 |
1,550,300 |
|
| LONG
TERM INVESTMENTS -at cost |
14 |
71,326 |
71,326 |
|
| LONG
TERM LOANS AND DEPOSITS |
15 |
2,149 |
2,136 |
|
|
|
|
|
|
|
| CURRENT
ASSETS |
|
| Stores,
spares and loose tools |
|
16 |
109,152 |
116,148 |
|
| Stock-in-trade |
|
17 |
30,333 |
23,486 |
|
| Trade debts |
|
18 |
87,202 |
94,769 |
|
| Loans,
advances, deposits, prepayments and |
|
| other
receivables |
|
19 |
99,864 |
51,952 |
|
| Cash
and bank balances |
|
20 |
17,145 |
8,809 |
|
|
|
|
|
------------------ |
------------------ |
|
|
343,696 |
295,164 |
|
|
------------------ |
------------------ |
|
|
|
2,233,214 |
1,918,926 |
|
|
========== |
========== |
|
| Auditors'
Report Annexed |
|
|
|
| These
accounts should be read with the annexed notes. |
|
|
|
MOHAMMAD AMIN DADABHOY |
|
FAZAL KARIM DADABHOY |
|
|
Chief Executive |
|
Director |
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees in
'000') |
|
|
|
|
| Sales - net |
|
21 |
776,127 |
703,145 |
|
| Cost of sales |
|
22 |
606,069 |
621,307 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
|
170,058 |
81,838 |
|
|
| Operating
expenses |
|
| Administrative |
|
23 |
588,091 |
48,119 |
|
| Selling
and distribution |
|
24 |
13,285 |
14,978 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
72,094 |
63,097 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
|
97,964 |
18,741 |
|
|
| Other income |
|
|
25 |
1,910 |
6,069 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
99,874 |
24,810 |
|
|
|
|
| Financial
charges |
|
|
11,651 |
19,316 |
|
| Workers'
profit participation fund |
|
|
4,411 |
281 |
|
|
|
------------------ |
------------------ |
|
|
|
16,062 |
19,597 |
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
83,812 |
5,213 |
|
|
| Taxation |
|
|
27 |
|
| -current |
|
|
3,881 |
3,516 |
|
| - deferred |
|
|
25,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
28,881 |
3,516 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
54,931 |
1,697 |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
loss brought forward |
|
(115,755) |
(117,452) |
|
| Transfer
from general reserve |
|
|
90,000 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
(25,755) |
(117,452) |
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
29,176 |
(115,755) |
|
|
|
|
|
|
| Appropriations: |
|
| Interim
dividend @ 5% (1999: Nil) |
|
|
19,934 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
profit / (loss) carried forward |
|
9,242 |
(115,755) |
|
|
|
|
========== |
========== |
|
|
|
|
(Rupees) |
|
|
|
|
|
| Earning
per share - Basic and diluted |
29 |
1.38 |
0.04 |
|
|
|
========== |
========== |
|
|
| These
accounts should be read with annexed notes. |
|
|
|
MOHAMMAD AMIN DADABHOY |
|
FAZAL KARIM DADABHOY |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees in
'000') |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
|
83,812 |
5,213 |
|
| Adjustments
for: |
|
|
|
| Depreciation |
|
|
42,110 |
34,334 |
|
| Financial
charges |
|
|
11,651 |
19,316 |
|
| Gain
on sale of fixed assets |
|
|
(856) |
(378) |
|
| Provision
against debts considered doubtful |
|
17,220 |
6,249 |
|
| Working
capital changes |
|
33 |
(60,367) |
91,432 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
93,570 |
156,166 |
|
| Financial
charges paid |
|
|
(13,533) |
(46,041) |
|
| Taxes paid |
|
|
(5,145) |
(2,494) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
74,892 |
107,631 |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Capital
expenditure |
|
|
(12,357) |
11,347 |
|
| Spares
held for capital expenditure |
|
8,157 |
(11,001) |
|
| Sale
proceeds of fixed assets |
|
|
894 |
2,268 |
|
| Long-term
loans and deposits |
|
|
(13) |
8,130 |
|
| Investments |
|
|
-- |
6,000 |
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow) / inflow from investing activities |
|
(3,319) |
16,744 |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Net
effect due to repayments of long term loans |
|
| and
redeemable capital |
|
(37,060) |
(127,600) |
|
| Payment
of dividend |
|
|
(11,284) |
(551) |
|
| Deposits
from dealers |
|
|
(8,780) |
6,251 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
(57,124) |
(121,900) |
|
|
|
------------------ |
------------------ |
|
| Net
increase in cash and cash equivalents |
|
14,449 |
2,475 |
|
| Cash
and cash equivalents at beginning of the year |
|
(1,781) |
(4,256) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at end of the year |
34 |
12,668 |
(1,781) |
|
|
|
|
========== |
========== |
|
|
| These
accounts should be read with the annexed notes. |
|
|
|
MOHAMMAD AMIN DADABHOY |
|
FAZAL KARIM DADABHOY |
|
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
Share |
Capital Reserve |
General |
Accumulated |
Total |
|
|
|
Capital |
(Premium on |
Reserve |
Profit/(Loss) |
|
|
|
|
|
issue of |
|
|
|
|
|
Right shares |
|
|
|
|
|
|
|
|
(Rupees in '000' |
|
|
|
|
| Balance
as at 30 June 1998 |
398,688 |
33,224 |
90,000 |
(117,452) |
404,460 |
|
| Profit
for the year after taxation |
-- |
-- |
-- |
1,697 |
1,697 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 1999 |
398,688 |
33,224 |
90,000 |
(115,755) |
406,157 |
|
|
|
|
|
|
|
|
| Profit
for the year after taxation |
-- |
-- |
-- |
54,931 |
54,931 |
|
| Transferred
(to) / from profit |
|
| and
loss account |
-- |
-- |
(90,000) |
90,000 |
-- |
|
| Interim dividend |
|
-- |
-- |
-- |
(19,934) |
(19,934) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 2000 |
398,688 |
33,224 |
-- |
9,242 |
441,154 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
