| Kohat Cement Company Limited |
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
| Contents |
|
|
| Company
Profile |
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditor's
Report |
|
| Balance Sheet |
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| Company
Profile |
|
|
| Board
of Directors |
|
|
|
| Chairman |
|
Mr. Atta Mohammad Sheikh |
|
|
|
|
| Chief
Executive / Director |
Mr. Aizaz Mansoor Sheikh |
|
|
|
Mr. Nadeem Atta Sheikh |
|
|
|
Mr. Nadeem Qadir |
|
|
|
Mian Mohammad Riaz |
|
|
|
Mrs. Khalida Asghar |
|
|
|
Mrs. Khawar Sultana |
|
|
|
|
| Company
Secretary |
Mr. Mohammad Hashim Khan |
|
|
|
| Auditors |
|
Viqar A. Khan |
|
|
|
Chartered Accountants |
|
|
|
|
| Legal Advisor |
|
Qazi Waheed-ud-Din |
|
|
|
|
| Bankers |
|
Allied Bank of Pakistan
Limited |
|
|
|
Askari Commercial Bank
Limited |
|
|
|
Habib Bank Limited |
|
|
|
Muslim Commercial Bank
Limited |
|
|
|
National Bank of Pakistan |
|
|
|
Prime Commercial Bank
Limited |
|
|
|
The Bank of Khyber |
|
|
|
Union Bank Limited |
|
|
|
ABN Amro Bank |
|
|
|
|
| Head Office |
|
House No. 1, 43 FCC, |
|
|
|
Gulberg-IV, Lahore. |
|
|
|
Tel: (042) 575 4357-8,
575 2699 |
|
|
|
Fax: (042) 575 4084 |
|
|
|
E-mail: kccl@wol.net.pk |
|
|
|
| Registered
Office and Works |
Kohat Cement Company
Limited |
|
|
|
Rawalpindi Road, Kohat. |
|
|
|
Tel: (0922) 560 401-04 |
|
|
|
Fax: (0922) 560 405 |
|
|
|
|
| Share
Department |
AZM Computer Services
(Pvt.) Limited |
|
|
|
Ferozepur Road, |
|
|
|
Mozang Chungi, Lahore. |
|
|
|
Tel: (042) 755 2269 |
|
|
|
Fax: (042) 757 6129 |
|
|
|
| NOTICE
OF THE ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 21st' Annual General Meeting of the Shareholders of
Kohat Cement Company Limited, will be held |
|
| at
its Registered Office, Rawalpindi Road, Kohat on Wednesday, December 20, 2000
at 11:00 A.M. to transact the following |
|
| business:- |
|
|
| ORDINARY
BUSINESS |
|
|
| 1.
To confirm the minutes of the Last Annual General Meeting held on December
20, 1999. |
|
|
| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended June 30, 2000 and Reports of |
|
| Directors and Auditors thereon. |
|
|
| 3.
To declare final cash dividend @20% (Rupees 2 per share) recommended by
directors in addition to an interim cash dividend |
|
| @7.50%
(Rupees 0.75 per share) already paid aggregating to 27.50% (Rupees 2.75 per
share) for the year ended June 30, 2000. |
|
|
| 4.
To appoint Auditors for the year 2000-2001 and to fix their remuneration. The
present Auditors, Viqar A. Khan, Chartered |
|
| Accountants,
being eligible offer themselves for re-appointment. |
|
|
| 5.
To transact any other business with the permission of the Chair. |
|
|
|
|
By Order of the Board |
|
|
|
|
|
|
|
Mohammad Hashim Khan |
|
| Kohat,
November 23, 2000 |
|
Company Secretary |
|
|
| NOTE: |
|
|
| 1.
The register of the members of the Company will be closed from Thursday,
December 14, 2000 to Wednesday, |
|
| December
20, 2000 (both days inclusive) and no transfer will be registered during that
time. Shares transfer deed received in |
|
| order
at the share department of the Company, incharge share department, AZM
Computer Services (Pvt) Ltd., 24-Ferozepur |
|
| Road,
Lahore at the close of business on Wednesday, December 13, 2000 will be
treated in time for entitlement of payment of |
|
| dividend. |
|
|
|
|
| 2.
A member entitled to attend, speak and vote at this meeting may appoint
another member as proxy to attend, speak and vote |
|
| on
his/her behalf. Proxies in Order to be effective must be received at
Registered Office of the Company not later than 48 |
|
| hours
before the meeting. |
|
|
| 3.
Shareholders whose shares are registered in their account / sub-account /
group account with Central Depository System |
|
| (CDS)
are requested to bring N.I.C. along with their account number in CDS and
participants 1D number for verification. In |
|
| case
of appointment of proxy by such account holders the guide lines as contained
in SECP's circular of January 26, 2000 to |
|
| be
followed. The copy of the said circular is being sent to the members along
with the Annual Report. |
|
|
| 4.
Members should quote their folio number in all correspondence with the
Company and at the time of attending the Annual |
|
| General
Meeting. |
|
|
| 5.
The shareholders are requested to notify the Company if there is any change
in their address. |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| Annual
Report and the Audited Accounts for the financial year ended June 30, 2000
are presented on behalf of the Board of |
|
| Directors. |
|
|
| OPERATING
RESULTS |
|
| The
net sales revenue for the year under review is Rs. 1,021.861 million as
against Rs. 732.825 million in the preceding year. The |
|
| profitability
of the Company has improved considerably in the current year due to stability
in the prices of cement. After accounting |
|
| for
all charges including depreciation of Rs. 74.528 million (1999: Rs. 81.126
Million) the Company has earned a pre-tax profit of |
|
| Rs.
249.179 million compared to Rs. 58.281 million for the last year. |
|
|
| In
March 2000, the Board of Directors declared an interim cash dividend @ 7.50%
(Rupees 0.75 per share) and have now declared |
|
| a
final cash dividend @ 20.00% (Rupees 2 per share), making a total cash pay
out of 27.50% (Rupees 2.75 per share) to its |
|
| shareholders.
This way the Board of Directors have maintained their policy of distributing
maximum profits amongst the |
|
| shareholders.
Appropriation of available profit is as under: |
|
|
|
|
(Rupees in
Thousand) |
|
|
|
2000 |
1999 |
|
|
|
|
| Profit/(Loss)
before taxation |
|
|
249,179 |
58,281 |
|
| Taxation |
|
|
|
|
|
| Current |
|
|
25,181 |
3,664 |
|
| Prior |
|
|
932 |
-- |
|
| Deferred |
|
|
72,500 |
32,000 |
|
|
------------------ |
------------------ |
|
|
|
98,613 |
35,664 |
|
|
|
------------------ |
------------------ |
|
| Profit/(Loss)
after taxation |
|
150,566 |
22,617 |
|
|
------------------ |
------------------ |
|
| Un-appropriated
profit Brought Forward |
|
2,929 |
17,179 |
|
| Transferred
from General Reserve |
|
|
-- |
7,000 |
|
|
|
------------------ |
------------------ |
|
|
|
2,929 |
24,179 |
|
|
| Profit
available for appropriation |
|
|
153,495 |
46,796 |
|
|
|
|
|
|
| APPROPRIATION |
|
|
| Interim
Cash Dividend @ 7.50% |
|
|
16,450 |
43,867 |
|
| Final
Cash Dividend @ 20.00% |
|
|
43,867 |
-- |
|
|
------------------ |
------------------ |
|
|
|
|
|
60,317 |
43,867 |
|
|
|
|
|
------------------ |
------------------ |
|
| Carried
Forward to Balance Sheet |
|
93,179 |
2,929 |
|
|
========== |
========== |
|
|
| PRODUCTION
AND SALES |
|
| Comparative
figures for production of Clinker and Cement are as under: |
|
|
|
|
1999-00 |
1998-99 |
Increase/ |
|
|
|
|
(Decrease) |
|
|
|
(Tonnes) |
(Tonnes) |
(Tonnes) |
|
|
| Clinker
Production |
|
347,328 |
329,070 |
18,258 |
|
| Cement
Production |
|
374,274 |
339,045 |
35,229 |
|
|
| Capacity
utilization has only been 66% due to depressed market conditions and overall
excess cement production capacity in the |
|
| Country. |
|
|
| The
Company sold 374,036 metric tonnes of cement as against 338,835 metric tonnes
in the previous year, registering a |
|
| growth
of 10.40% in the sales volume. The market has remained highly competitive
throughout the year with a downward |
|
| pressure
on prices. However, the existing over capacity in the industry has resulted
in industry wide lower capacity utilization. |
|
|
| ISO
9002 CERTIFICATION |
|
| Your
management has successfully completed ISO 9002 certification carried out by
M/s. Bet Norske Veritas of Netherlands, a |
|
| well
renowned ISO certifying body. This is a milestone achievement in the history
of your Company and this certification |
|
| stands
for consistent quality of our product. |
|
|
| MARKET
REVIEW |
|
| Cement
Industry has continuously been under pressure due to weak economic conditions
and inconsistent financial policies |
|
| of
the Government. Constant increase in input prices, particularly the prices of
furnace oil, which in one year has increased |
|
| from
Rs. 6,980 per tonne to Rs. 14,500 per tonne. This extraordinary increase of
108% in the prices of furnace oil has |
|
| increased
the cost of production by Rs. 40 per bag. Fall in the value of rupee has
substantially increased the cost of imported |
|
| inputs
like, spare parts, refractory bricks, grinding media, lubricants etc. Any
attempt by the Company to pass on these |
|
| increases
to the consumers would have further jeopardized the capacity utilization. As
such most of the inflation was absorbed |
|
| by
the Company. |
|
|
| General
Sales Tax @ 15% has been imposed on cement w.e.f. September 05, 2000 and
incidence of excise duty has been |
|
| reduced
from Rs. 1,400 per ton to Rs. 1,000 per ton. This measure of the Government
has created an un-level playing field |
|
| amongst
the cement manufacturers. Four cement units namely Lucky Cement, Bestway
Cement, Askari Cement (Nizampur) |
|
| and
Saadi Cement will be exempt from payment of General Sales Tax till June 30,
2001. This benefit works out to be |
|
| approximately
Rs. 450 per tonne in favour of these four units. |
|
|
|
| FUTURE
PROSPECTS |
|
| Increasing
input prices, under utilised production capacity in the country and
especially the recent selective general sales tax |
|
| levy
by the Government upto June 30, 2001, has created a doomsday scenario for the
cement industry in the country which is |
|
| bound
to spell disaster for cement manufacturing units, especially to ours, being
the smallestones. |
|
|
| However,
reduction in financial and depreciation costs of your Company over future
years will contribute towards better |
|
| profitability. |
|
|
| DEBT
OBLIGATION |
|
| The
Company continues to meet its financial obligations. There has been a net
debt reduction of approximately Rs. 259 million |
|
| during
the year under review. The debt outstanding, as of June 30, 2000 is Rs. 118
million, which is one of the lowest in the |
|
| cement sector. |
|
|
| PATTERN
OF SHAREHOLDINGS |
|
| The
pattern of Shareholding of the Company as at June 30, 2000 is annexed with
the Annual Report. |
|
|
| COMPANY
LEGAL ADVISOR |
|
| Syed
Shuja Uddin Wasti was replaced as legal advisor by Qazi Waheed ud din
advocate High Court, Peshawar. |
|
|
| COMPANY
AUDITORS |
|
| Viqar
A. Khan, Chartered Accountants, the retiring Auditors, being eligible, offer
themselves for re-appointment for the next |
|
| year. |
|
|
| MANAGEMENT
EMPLOYEES RELATIONS |
|
| The
Board would like to record its appreciation for the valuable contribution
made by all its employees. The management is |
|
| quite
confident these cordial relations and cooperation will continue in the years
to come. |
|
|
|
|
|
AIZAZ MANSOOR SHEIKH |
|
| Dated:
November 21,2000 |
|
Chief Executive |
|
|
|
| YEAR
WISE STATISTICAL SUMMARY |
|
|
|
2000 |
1999 |
1998 |
1997 |
1996 |
|
|
|
|
| ASSETS
EMPLOYED |
|
|
|
|
| Fixed Assets |
|
662 |
715 |
789 |
862 |
805 |
|
|
|
|
| Investment
and Long Term |
|
| Advances
and Deposits |
4 |
24 |
37 |
39 |
40 |
|
| Current Assets |
|
209 |
223 |
219 |
209 |
273 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Total
Assets Employed |
875 |
961 |
1,045 |
1,111 |
1,119 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
|
|
| FINANCED BY |
|
|
| Shareholders
Equity |
475 |
384 |
406 |
408 |
449 |
|
| Long
Term Liabilities |
18 |
140 |
160 |
326 |
303 |
|
| Deferred
Liabilities |
117 |
44 |
12 |
11 |
11 |
|
| Current
Liabilities |
266 |
393 |
469 |
365 |
356 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Total
Funds Invested |
875 |
961 |
1,045 |
1,111 |
1,119 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| TURNOVER
AND PROFIT |
|
| Turnover
(Net) |
|
1,022 |
733 |
748 |
501 |
953 |
|
| Operating Profit |
|
304 |
115 |
57 |
45 |
116 |
|
| Profit/(Loss)
Before Taxation |
249 |
58 |
(1) |
(38) |
47 |
|
| Profit/(Loss)
After Taxation |
151 |
23 |
(3) |
(41) |
46 |
|
| Cash Dividend |
|
60 |
44 |
0 |
0 |
50 |
|
| Profit c/f |
|
93 |
3 |
17 |
20 |
61 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of KOHAT CEMENT
COMPANY LIMITED as at June 30, 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 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; |
|
|
|
|
| ii)
the expenditure incurred during the year was for the purpose of the company's
business; and |
|
|
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the year were in accordance |
|
| with
the objects of the company; |
|
|
|
|
| c)
in our opinion and to the best of our information and according to the
explanations given to us, the balance sheet, |
|
| profit
and loss account, cash flow statement and statement of changes in equity
together with the notes forming part |
|
| thereof
conform with the 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, 2000 and of the profit, its cash flows and
changes in equity for the year then |
|
| ended; and |
|
|
|
|
|
|
| d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980 (XVIII of 1980) was deducted by |
|
| the
company and deposited in the Central Zakat Fund established under Section 7
of that Ordinance. |
|
|
| LAHORE:
November 22, 2000 |
|
CHARTERED ACCOUNTANTS |
|
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| Share
Capital and Reserves |
|
| Authorised
share capital |
|
| 50,000,000
(1999: 50,000,000) ordinary |
|
| Shares
of Rs. 10 each |
|
500,000,000 |
500,000,000 |
|
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid up share capital |
|
| 21,933,334
(1999: 21,933,334) ordinary |
|
| shares
of Rs. 10 each |
|
3 |
219,333,340 |
219,333,340 |
|
| Reserves |
|
4 |
162,120,028 |
162,120,028 |
|
| Accumulated
profit |
|
|
93,178,739 |
2,928,902 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
474,632,107 |
384,382,270 |
|
|
| Redeemable
Capital |
|
5 |
-- |
16,954,098 |
|
| Liabilities
Against Assets Subject to Finance Lease |
6 |
15,057,509 |
118,220,157 |
|
| Deferred
Liabilities |
|
7 |
116,594,780 |
44,124,993 |
|
| Long
Term Security Deposits |
|
8 |
2,806,160 |
4,420,000 |
|
|
|
| Current
Liabilities |
|
|
|
| Shod
term finances |
|
9 |
69,321,124 |
98,750,293 |
|
| Current
portion of long term liabilities |
10 |
33,756,486 |
154,188,070 |
|
| Creditors,
accruals and other payables |
11 |
89,420,083 |
81,340,902 |
|
| Provision
for taxation |
|
|
28,845,466 |
14,546,815 |
|
| Dividends |
|
12 |
44,541,761 |
44,097,041 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
265,884,920 |
392,923,121 |
|
| Contingencies
and Commitments |
|
13 |
------------------ |
------------------ |
|
|
|
|
874,975,476 |
961,024,639 |
|
|
========== |
========== |
|
|
| Fixed
Capital Expenditure |
|
| Operating
fixed assets- tangible |
|
14 |
659,797,694 |
714,765,683 |
|
| Capital
work-in-progress |
|
15 |
2,100,706 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
661,898,400 |
714,765,683 |
|
|
|
|
| Long
Term Loans to Employees |
|
16 |
2,716,546 |
1,428,611 |
|
|
|
|
|
| Long
Term Deposits |
|
17 |
926,030 |
22,325,311 |
|
|
|
|
|
| Current Assets |
|
|
|
| Stores,
spares and loose tools |
|
18 |
51,434,353 |
56,342,730 |
|
| Stock in trade |
|
19 |
50,515,942 |
50,964,743 |
|
| Trade debtors |
|
20 |
28,921,924 |
43,461,019 |
|
| Advances,
deposits, prepayments, |
|
|
| investments
and other receivables |
21 |
35,195,185 |
38,324,163 |
|
| Cash
and bank balances |
|
22 |
43,367,096 |
33,412,379 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
209,434,500 |
222,505,034 |
|
|
------------------ |
------------------ |
|
|
|
874,975,476 |
961,024,639 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Sales |
|
23 |
1,021,861,290 |
732,825,249 |
|
| Cost
of goods sold |
|
24 |
689,815,805 |
590,884,795 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
332,045,485 |
141,940,454 |
|
| Selling,
administrative and general expenses |
25 |
28,110,454 |
26,465,728 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit |
|
|
303,935,031 |
115,474,726 |
|
| Other income |
|
26 |
1,442,543 |
3,305,734 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
305,377,574 |
118,780,460 |
|
|
|
|
------------------ |
------------------ |
|
| Financial
charges |
|
27 |
41,261,308 |
55,810,692 |
|
| Other charges |
|
28 |
14,936,867 |
4,688,828 |
|
|
------------------ |
------------------ |
|
|
|
|
56,198,175 |
60,499,520 |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Profit/(Loss)
before taxation |
|
|
249,179,399 |
58,280,940 |
|
|
| Taxation |
|
29 |
(98,612,894) |
(35,664,126) |
|
|
|
|
|
------------------ |
------------------ |
|
|
| Profit/(Loss)
after taxation |
|
|
150,566,505 |
22,616,814 |
|
|
|
| Unappropriated
profit brought forward |
|
2,928,902 |
17,178,756 |
|
| Transferred
from general reserve |
|
-- |
7,000,000 |
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
153,495,407 |
46,795,570 |
|
|
|
|
|
| Appropriation |
|
| Dividends |
|
| Interim
dividend @ 7.5% (1999: 20%) |
|
16,450,000 |
43,866,668 |
|
| Proposed
final dividend @ 20% (1999: NIL) |
|
43,866,668 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
60,316,668 |
43,866,668 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
93,178,739 |
2,928,902 |
|
|
|
|
========== |
========== |
|
| Earnings
per share |
|
30 |
6.86 |
1.03 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
Note |
Rupees |
Rupees |
|
|
| Cash
flows from operating activities |
|
|
| Cash
generated from operations |
|
A |
393,345,938 |
218,435,329 |
|
| Financial
charges paid |
|
|
(50,243,65I) |
(78,644,077) |
|
| Income
tax paid/deducted at source |
|
(13,191,964) |
(24,503,320) |
|
|
|
|
