| Javedan Cement Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
| Corporate
Information |
|
| Notice
of Annual General Meeting |
|
| Director's
Report to the Shareholders |
|
| Pattern
of Shareholding |
|
| Auditor's
Report to the Members |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
|
|
|
|
| CORPORATE
INFORMATION |
|
|
| BOARD
OF DIRECTORS: |
|
|
|
Muhammad Nawaz Tiwana |
|
|
Chairman |
|
|
|
M.P. Gangwani |
|
|
Managing Director |
|
|
|
Abdul Hafeez Choudhry |
|
|
Istaqbal Mehdi |
|
|
Akhtar Mehmood |
|
|
Muhammad Shamim Siddiqui |
|
|
Muhammad Arshad Saeed |
|
|
Khawaja Saqib Naim |
|
|
| SECRETARY: |
S.M.H. Rizvi |
|
| AUDITORS: |
|
Ibrahim, Shaikh & Co. |
|
|
Chartered Accountants, |
|
|
Karachi |
|
|
| BANKERS: |
|
Muslim Commercial Bank
Ltd. |
|
|
National Bank of Pakistan |
|
|
Habib Bank limited |
|
|
Allied Bank of Pakistan
Ltd. |
|
|
| REGISTERED
OFFICE: |
AI-Haroon, 2rid Floor |
|
|
10- Agha Khan III Road, |
|
|
Karachi-74400 |
|
|
Tel: 9215281-82 |
|
|
Fax: 9215592 |
|
|
Telegram: JAVCEMT |
|
|
| WORKS: |
|
Manghopir, |
|
|
Karachi-75890 |
|
|
Tel: 6980026-27 |
|
|
Fax: 92-21-6980132 |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 38th Annual General Meeting of Shareholders of
Javedan Cement |
|
| Limited,
Karachi, will be held at 12.00 noon on Thursday, the 21st December, 2000, at
Haji Abdullah |
|
| Haroon
Muslim Gymkhana, Awan-e-Saddar Road, behind Shaheen Complex Karachi, in order
to |
|
| transact
the following business: - |
|
|
| 1.
To confirm the Minutes of 37th Annual General Meeting. |
|
|
| 2.
To receive and adopt the Audited Accounts of the Company for the year ended
30th June 2000, |
|
| together
with the Reports of Directors and Auditors thereon. |
|
|
| 3.
To appoint Auditors and fix their remuneration. M/s. Ibrahim, Shaikh &
Company, Chartered |
|
| Accountants,
the retiring Auditors, have offered themselves for re-appointment as Auditors
of the |
|
| Company
for the year 2000-2001. |
|
|
| 4.
To elect the Director representing private shareholders in accordance with
section 178 of |
|
| Companies
Ordinance, 1984; and Article 87 of "Articles of Association" of the
Company. The |
|
| tenure
of retiring Director Mr. Muhammad Shamira Siddiqui will expire on 17-04-2001.
The next |
|
| term
of Director will be for a period of 3 years effective from 18-04-2001. |
|
|
| 5.
Any other business with the permission of the Chair. |
|
|
|
By order of the Board |
|
|
|
S. M. H. RIZVI |
|
| Karachi,
7th November, 2000. |
|
Company Secretary |
|
|
| NOTES: |
|
| 1.
Article 89 of the "Articles of Association" of the Company provides
that any person who seeks to contest |
|
| an
election to the office of Director shall, whether he is a retiring Director
or otherwise, file with the |
|
| Company,
not later than fourteen days before the date of the meeting at which
elections are to be held a |
|
| notice
of his intention to offer himself for election as a Director provided that
any such person may, at any |
|
| time
before the holding of election, withdraw such notice. |
|
|
| 2.
A retiring Director shall be eligible for re-election under Article 111 of
"Articles of Association" of the |
|
| Company. |
|
|
| 3.
According to Article 78 of the "Articles of Association" of the
Company, the qualification of a Director, shall |
|
| be
his holding shares of the value of Rs.5,000/= (Five Thousand Rupees) at
least, in his own name, |
|
| provided
that Directors representing interests holding the shares of the requisite
value need not |
|
| themselves
hold the qualification shares. |
|
|
| 4.
The Share Transfer books of the Company will remain closed from 12.12.2000 to
21.12.2000 (both days |
|
| inclusive)
to effect the transfer of shares, as at the close of business on 21.12.2000. |
|
|
| 5.
Shareholders are requested to immediately notify the Company of change in
their addresses, if any. |
|
|
| 6.
Shareholders are further requested to quote their Folio numbers in all
correspondence with the Company |
|
| and
at the time of attending Annual General Meeting. |
|
|
| 7.
A member entitled to attend and vote at this meeting is entitled to appoint
another member as his/her proxy |
|
| to
attend and vote instead of him/her. Proxies, in order to be effective must be
received at the Registered |
|
| Office
of the Company not less than 48 hours before the time appointed for the
Meeting. |
|
|
|
| DIRECTORS
REPORT TO THE SHAREHOLDERS |
|
|
| The
Directors welcome the Members at the 38th Annual General Meeting of the
Company and |
|
| have
pleasure in presenting annual report alongwith Audited Accounts and Auditor's
Report thereon, |
|
| for
the year ended June 30th, 2000. The Company during the year under review
sustained a loss of |
|
| Rs.
46.453 million before tax as against loss of Rs. 103.771 million during the
year 1998-99. The |
|
| reasons
for decrease of loss of Rs. 57.318 million was on account of higher
production and sales of |
|
| cement
by 49,737 tonnes and 37,669 tonnes respectively during the year as compared
to last year |
|
| and
reduction in cost of sales by adopting stringent measures. The performance of
the Company in |
|
| terms
of production and sales in the year under review is as follows:- |
|
|
| PRODUCTION: |
|
| It
is to inform the members that the Company produced 187,487 tonnes of clinker
and 348,483 |
|
| tonnes
of cement in the year under review. The production of the year under review
is compared with |
|
| that
of last year hereunder. Clinker production had been low due to kiln remained
stopped for major |
|
| maintenance.
However the clinker was purchased from sister concern to meet the short fall. |
|
|
|
|
Increase/ |
|
|
|
(Decrease) |
|
|
1999-2000 |
1998-99 |
Over Last Year |
|
|
(Tonnes) |
(Tonnes) |
(Tonnes) |
|
|
| Clinker
Production |
|
187,487 |
210,909 |
(23,422) |
|
|
------------ |
------------ |
------------ |
|
| Cement
Production |
|
|
|
| Ordinary
Portland Cement |
|
311,658 |
244,836 |
66,822 |
|
| Slag Cement |
|
22,157 |
37,657 |
(15,500) |
|
| Sulphate
Resisting Cement. |
|
14,668 |
16,253 |
(1,585) |
|
|
------------ |
------------ |
------------ |
|
|
348,483 |
298,746 |
49,737 |
|
|
========== |
========== |
========== |
|
|
|
|
|
| Due
to low demand, production was partly suspended during the year as also in
last year which |
|
| resulted
in under utilization of capacity. During the year, the company has continued
to close a part of |
|
| the
cement plant (2 Kilns of semi dry process) which represents about 50 percent
of the production |
|
| capacity
of clinker. |
|
|
| MARKETING: |
|
| During
the year, less demand and more supply of cement persisted in the Country.
Construction |
|
| Industry
remained in poor shape. The Company continued to face difficulty in selling
its products in |
|
| bulk
as compared to private manufacturers due to the fierce competition from them.
The Company |
|
| due
to its strenuous efforts succeeded to increase the sale by 37,669 tonnes as
compared to last year, |
|
| its
comparative position is hereunder:- |
|
|
|
|
Increase/ |
|
|
|
(Decrease) |
|
|
1999-2000 |
1998-99 |
Over Last Year |
|
|
(Tonnes) |
(Tonnes) |
(Tonnes) |
|
|
| Ordinary
Portland Cement |
|
308,439 |
249,305 |
59,134 |
|
| Slag Cement |
|
21,894 |
39,174 |
(17,280) |
|
| Sulphate
Resisting Cement |
|
14,238 |
18,423 |
(4,185) |
|
|
------------ |
------------ |
------------ |
|
|
344,571 |
306,902 |
37,669 |
|
|
========== |
========== |
========== |
|
|
|
|
| DIVIDEND: |
|
| In
view of the losses, no dividend is being recommended for the year 1999-2000 |
|
|
| EARNING
PER SHARE: |
|
| Rs.
-5.28 ( Minus Rupees Five and Paisa Twenty Eight ) |
|
|
| GOING
CONCERN: |
|
| As
regards Auditors' observation regarding "Going Concern", we report
that since it is not |
|
| possible
to undertake BMR, however financial restructuring proposal for issuance of
Shares against |
|
| loan,
is under consideration at SCCP & M.O.I.P. |
|
|
| PROVISIONS
FOR DOUBTFUL DEBTS: |
|
| The
Directors consider the provision for doubtful debts as sufficient. However,
the receivables |
|
| are
under close scrutiny for appropriate subsequent adjustment, as a substantial
amount is under |
|
| litigation
for recovery and remaining amount is adjustable. |
|
|
| MISSIN6
ASSETS ITEMS: |
|
| Physical
verification of fixed assets has been done by a Chartered Accountants firm.
Few items |
|
| have
been identified as missing having written down value of Rs. 57,919 which
shall be written off to |
|
| rectify
the situation. |
|
|
| PAYMENT
OF DEBTS: |
|
| Due
to continued poor liquidity position, only part-payment against the
installments of the loan |
|
| could
be made. The Company succeeded in getting the loans rescheduled from the
holding |
|
| Corporation
and loan restructuring proposal is under consideration. |
|
|
| OTHER
INCOME: |
|
| During
the period under review an amount of Rs. 19,795,780 has been taken into
income out of |
|
| interest
over and above the requirement of fund on the advise and legal opinion. |
|
|
| DIRECTORS: |
|
| Since
the last Annual General Meeting, the following changes have taken place in
the Board of |
|
| Directors
of the Company:- |
|
| 1
) Mr. Akhtar Mehmood has been nominated as director by National Investment
Trust Ltd. in place |
|
| of
Mr. Samir Ahmed. |
|
| 2)
Mr. Abdul Hafeez Choudhry has been nominated as Director by M.O.I. & P in
place of Mr. |
|
| Hussain
Ahmed Khan. |
|
| 3)
Mr. Istaqbal Medhi has been nominated by I.C.P. as Director in place of Mr.
Behram Hassan. |
|
| 4)
Mr. Muhammad Arshad Saeed has been nominated as Director by SCCP in place of
Mr. |
|
| Muhammad
Ashraf Choudhry. |
|
| While
welcoming the new directors, we place on record our appreciation for the
valuable services |
|
| rendered
by the outgoing directors. |
|
|
| AUDITORS: |
|
| Present
auditors M/s Ibrahim, Shaikh & Co., Chartered Accountants, retiring and
being eligible |
|
| have
offered their services for re-appointment, as auditors of the company for the
financial year 2000- |
|
| 2001. |
|
|
| YEAR
2000 COMPLIANCE OF COMPUTER SYSTEM: |
|
| All
hardware and software computer system & applications of the Company are
fully Y2K |
|
| compliant
which was certified by M/s. Dadabhoy Software Co. |
|
|
| ACKNOWLEDGEMENT: |
|
| The
Chairman and Directors of the Company place on record the appreciation for
the hard work |
|
| done
by the Workers, Staff & Officers of the Company during the year 1999-2000
with the hope that |
|
| they
would accelerate their joint efforts and dedication for achieving yet better
results during the |
|
| forthcoming
years. |
|
|
|
For and on behalf of the
Board |
|
|
|
(M.P. GANGWANI) |
|
| Karachi:
7th November, 2000 |
|
Managing Director |
|
|
|
|
| FORM
"A" |
|
| PATTERN
OF HOLDING OF THE SHARES |
|
| AS
AT 30TH JUNE, 2000 |
|
|
| No. of |
From |
To |
Total Shares |
|
| Shareholders |
|
held |
|
| 1755 |
1 |
100 |
48,500 |
|
| 618 |
101 |
500 |
163,688 |
|
| 76 |
501 |
1,000 |
54,646 |
|
| 66 |
1,001 |
5,000 |
128,384 |
|
| 3 |
5,001 |
10,000 |
13,023 |
|
| 1 |
10,001 |
15,000 |
14,666 |
|
| 1 |
100,001 |
120,000 |
118,548 |
|
| 1 |
135,001 |
140,000 |
139,893 |
|
| 1 |
1,120,001 |
1,400,000 |
1,369,309 |
|
| 1 |
6,745,001 |
6,750,000 |
6,749,343 |
|
| ---------- |
---------- |
---------- |
---------- |
|
| 2523 |
|
8,800,000 |
|
| ========= |
========= |
========= |
========= |
|
|
|
| Categories
of Shareholders |
Number |
Shares held |
Percentage |
|
|
| Individuals |
|
2511 |
395,350 |
4.49 |
|
| Financial
Institutions |
3 |
1,487,857 |
16.91 |
|
| Insurance
Companies |
3 |
161,979 |
1.84 |
|
| Commercial
Banks |
5 |
5,471 |
0.06 |
|
| Others |
|
| a)
State Cement Corporation |
|
| of
Pakistan (Pvt) Ltd. |
1 |
6,749,343 |
76.70 |
|
|
---------- |
---------- |
---------- |
|
|
2523 |
8,800,000 |
100 |
|
|
========= |
========= |
========= |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of M/S Javedan Cement Limited as at
30th June, 2000 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
purposes 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
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
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 !hat: |
|
|
| a)
Trade debtors' advances and other receivables include debts amounting to Rs.
5,382,315, which have |
|
| been
outstanding for a considerable period of time. A provision of Rs. 2,327,096
has already been made |
|
| against
these debts. The management considers that these amounts are recoverable.
However, age of |
|
| the
balances suggests that these may not be recoverable in full. Accordingly, we
consider that provision |
|
| for
the remaining amounts of Rs. 3,055,219 should be made against these debts; |
|
|
| b)
Operating fixed assets include certain assets having a written down value of
Rs. 57,919, which were |
|
| identified
as being missing, as per the 100% physical verification by a chartered
accountant firm, assigned |
|
| by
the management. Accordingly, we consider that these assets should be written
off; |
|
|
| c)
In our opinion proper books of account have been kept by the Company as
required by the Companies |
|
| Ordinance,
1984; |
|
|
| d)
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 the accounting policies consistently applied; |
|
|
| ii)
the expenditure incurred during the year was for the purpose of the company's
business; and |
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the year were in |
|
| accordance
with the objects of the Company; |
|
|
| e)
In our opinion and to the best of our information and according to the
explanations given to us, the balance |
|
| sheet,
profit and loss account and the statement of changes in financial position,
together with the notes |
|
| forming
part thereof, give the information required by the Companies Ordinance, 1984,
in the manner so |
|
| required
and except for the financial effect of the matters referred to in para (a)
and (b) above, respectively |
|
| give
a true and fair view of the state of the company's affairs as at 30th June
2000 and of the loss and the |
|
| changes
in financial position for the year then ended; |
|
|
| f)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980; and |
|
|
| g)
Without qualifying our opinion, we draw attention to the fact that the
company has suffered losses |
|
| amounting
to Rs.404,738,191 upto the year ended 30th June 2000 which resulted in
negative equity of Rs. |
|
| 241,272,589.
As of that date, the company's current liabilities exceeded its current
assets by Rs. |
|
| 300,220,427.
These financial statements have been prepared on a going concern basis, the
validity of |
|
| which
is dependent on the continuing financial support by the parent company, State
Cement Corporation |
|
| of
Pakistan (Private) Limited. |
|
|
| The
accounts of Javedan Cement Limited for the year ended 30th June, 1999 were
audited by another firm of |
|
| Chartered
Accountants whose report dated 7th December, 1999 expressed a qualified
opinion on those accounts. |
|
|
|
IBRAHIM, SHAIKH & COMPANY |
|
| Karachi:
10th November, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30TH JUNE, 2000 |
|
|
|
|
(RUPEES) |
|
|
Notes |
2000 |
1999 |
|
|
| SHARE
CAPITAL & RESERVES |
|
| Authorised
Share Capital |
|
| 15,000,000
Ordinary Shares of |
|
| Rs. 10/- each |
|
150,000,000 |
150,000,000 |
|
|
========== |
========== |
|
| Issued
, Subscribed & Paid-up Capital |
|
3 |
88,000,000 |
88,000,000 |
|
|
| Capital
Reserve |
|
4 |
11,965,602 |
11,965,602 |
|
| General
Reserve |
|
63,500,000 |
63,500,000 |
|
| Accumulated
loss carried forward |
|
(404,738,191) |
(353,931,505) |
|
|
----------- |
----------- |
|
|
(241,272,589) |
(190,465,903) |
|
| LONG
TERM LOANS- SECURED |
|
6 |
225,797,261 |
344,250,000 |
|
| LONG
TERM DEPOSITS |
|
7 |
604,107 |
604,107 |
|
| CURRENT
LIABILITIES |
|
| Current
maturity and overdue |
|
| installments
of long term loans |
|
8 |
229,500,000 |
114,750,000 |
|
| Due
to parent company - Unsecured |
|
9 |
26,105,553 |
14,627,348 |
|
| Due
to Associated companies |
|
|
261,415 |
-- |
|
| Accrued
markup on long term loan |
|
|
215,100,092 |
183,126,260 |
|
| Accrued
markup on short term loan |
|
|
-- |
12,658,497 |
|
| Accrued
markup on overdue maturity |
|
|
32,130,000 |
-- |
|
| Creditors,
accrued expenses and |
|
|
|
|
| other
liabilities |
|
10 |
104,477,135 |
79,788,456 |
|
| Provision
for taxation |
|
|
12,735,076 |
13,159,867 |
|
| Unclaimed
dividend |
|
1,963,774 |
1,963,802 |
|
|
----------- |
----------- |
|
|
622,273,045 |
420,074,230 |
|
|
| CONTINGENCIES |
|
11 |
-- |
-- |
|
|
----------- |
----------- |
|
|
607,401,824 |
574,462,434 |
|
|
========== |
========== |
|
| TANGIBLE
FIXED ASSETS |
|
| Operating
Fixed Assets |
|
12 |
199,425,779 |
206,888,427 |
|
|
|
----------- |
----------- |
|
|
|
199,425,779 |
206,888,427 |
|
| LONG
TERM DEPOSITS & DEFERRED COST |
13 |
69,556,902 |
11,971,685 |
|
| LONG
TERM LOANS TO EMPLOYEES |
|
|
|
|
| -
Considered good |
|
14 |
16,366,525 |
25,564,894 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores
& Spares |
|
15 |
136,246,406 |
151,532,745 |
|
| Stock-in-Trade |
|
16 |
48,661,154 |
35,812,347 |
|
| Trade
Debtors - Unsecured |
|
|
|
| considered
good |
|
17 |
973,144 |
1,168,975 |
|
|
|
|
|
| Due
from Associated Companies |
|
|
|
|
| -
Unsecured Considered good |
|
18 |
654,674 |
788,942 |
|
|
|
|
| Current
Maturity of Long Term |
|
|
|
| Loans
to Employees |
|
7,531,264 |
10,072,209 |
|
|
| Advances,
Deposits, Prepayments |
|
| and
Other Receivables |
|
19 |
49,529,929 |
48,337,408 |
|
|
|
|
| Cash
& Bank Balances |
|
20 |
78,456,047 |
82,324,802 |
|
|
----------- |
----------- |
|
|
322,052,618 |
330,037,428 |
|
|
|
----------- |
----------- |
|
|
607,401,824 |
574,462,434 |
|
|
|
========== |
========== |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
|
|
|
|
M. P. GANGWANI |
|
MUHAMMAD NAWAZ TIWANA |
|
|
|
Managing Director |
|
Chairman |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30TH JUNE 2000 |
|
|
|
|
(RUPEES) |
|
|
Notes |
2000 |
1999 |
|
|
|
|
| SALES - Net |
|
21 |
829,627,530 |
677,549,165 |
|
| COST
OF GOODS SOLD |
|
22 |
(815,882,845) |
(699,753,056) |
|
|
|
|
------------ |
------------ |
|
| GROSS
PROFIT/(LOSS) |
|
|
13,744,685 |
(22,203,891) |
|
| OPERATING
EXPENSES |
|
23 |
(22,797,583) |
(24,809,358) |
|
|
|
|
------------ |
------------ |
|
| OPERATING
(LOSS) |
|
|
(9,052,898) |
(47,013,249) |
|
| FINANCIAL
CHARGES |
|
24 |
(66,980,883) |
(66,283,354) |
|
|
|
|
------------ |
------------ |
|
|
(76,033,781) |
(113,296,603) |
|
|
|
|
| OTHER
INCOME |
|
29,580,532 |
9,525,142 |
|
|
------------ |
------------ |
|
| LOSS
BEFORE TAXATION |
|
(46,453,249) |
(103,771,461) |
|
|
| TAXATION |
|
26 |
|
| Current |
|
(4,300,000) |
(3,606,243) |
|
| Prior |
|
(53,437) |
-- |
|
|
------------ |
------------ |
|
|
(4,353,437) |
(3,606,243) |
|
|
------------ |
------------ |
|
| LOSS
AFTER TAXATION |
|
(50,806,686) |
(107,377,704) |
|
| ACCUMULATED
LOSS BROUGHT FORWARD |
|
(353,931,505) |
(246,553,801) |
|
|
|
------------ |
------------ |
|
| ACCUMULATED
LOSS |
|
(404,738,191) |
(353,931,505) |
|
|
========== |
========== |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
M. P. GANGWANI |
|
MUHAMMAD NAWAZ TIWANA |
|
|
Managing Director |
|
Chairman |
|
