| Mustehkam Cement Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
| Board
of Directors |
|
|
| Notice of Annual General
Meeting |
|
| Directors' Report to the
Shareholders |
|
| Pattern of Holding of Shares |
|
| Auditors' Report to the Members |
|
| Balance
Sheet |
|
| Profit and Loss Account |
|
|
| Cash
Flow Statement |
|
| Statement of Changes in Equity |
|
| Notes
to the Accounts |
|
|
| BOARD
OF DIRECTORS |
|
|
| MUHAMMAD
NAWAZ TIWANA |
|
| Chairman |
|
| KHAWAJA
SAQIB NAIM |
|
| Chief
Executive |
|
| S.
M. FAKHIR HASAN |
|
| ABDUL
GHAFFAR SOOMRO |
|
| MUHAMMAD
ILYAS DAR |
|
| MUHAMMAD
ARSHAD SAEED |
|
| SHAHID
ANWAR |
|
|
| SECRETARY |
MAHMOOD AHMED KHAN |
|
|
Chartered Secretary |
|
|
| AUDITORS |
|
RIAZ AHMED & CO., |
|
|
Chartered Accountants, |
|
|
2-A, ATS Centre, 30 West |
|
|
Fazul-uI-Haq Road, |
|
|
Blue Area, Islamabad. |
|
|
| BANKERS |
|
Habib Bank Limited. |
|
|
National Bank of
Pakistan. |
|
|
| REGISTERED
OFFICE |
Gul-e-Akra Plaza, |
|
|
147-Murree Road, |
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|
Rawalpindi Cantt. |
|
|
| FACTORY |
|
HATTAR, |
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|
Distt. Haripur. |
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|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the Annual General Meeting of Shareholders of |
|
| Mustehkam
Cement Limited will be held at Flashman's Hotel, The Mall, Rawalpindi Cantt. |
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| on
Saturday the 30th December 2000, at 10.00 A.M. for the purpose of transacting
the |
|
| following
business:- |
|
|
| 1.
To confirm the minutes of previous Annual General Meeting. |
|
|
| 2.
To receive and adopt the audited accounts of the Company for the period |
|
| ended
June 30, 2000 together with the reports of directors and auditors |
|
| thereon. |
|
|
| 3.
To appoint auditors and fix their remuneration. |
|
|
| 4.
To transact any other ordinary business of the Company with the permission |
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| of the Chair. |
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|
| The
share transfer books of the Company will remain closed from 20th December, |
|
| 2000
to 26th December, 2000 (both days inclusive). |
|
|
| Rawalpindi |
|
By Order of the Board |
|
| Dated:-
7thDecember, 2000. |
|
|
Mahmood Ahmed Khan |
|
|
Secretary |
|
|
| Notes :- |
|
| 1.
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. |
|
|
| 2.
Shareholders are requested to immediately notify the Company of any |
|
| change
in their address. |
|
|
| 3.
Shareholders are further requested to quote their folio number in all |
|
| correspondence
with the Company and at the time of attending the Annual |
|
| General
Meeting. |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| 1.
The Directors of your company take pleasure in placing before you the 46th
annual |
|
| report
together with the audited accounts and the auditors' report thereon for the
year |
|
| ended
30th June 2000. |
|
|
| FINANCIAL |
|
| 2.
The financial results of the company for the year are summarised as under:- |
|
|
|
(Rupees in million) |
|
| Net
loss before tax |
|
280.337 |
|
| Balance
brought forward |
|
565.264 |
|
| Loss
before taxation and appropriation |
|
845.601 |
|
|
| Less:
provision for taxation - current |
|
1.931 |
|
|
- prior years |
|
(6.692) |
|
|
- deferred |
|
(10.964) |
|
|
------------ |
|
|
(15.725 |
|
|
------------ |
|
| Net
loss after tax |
|
829.876 |
|
|
| Appropriations
- Transfer from tax holiday reserve u/s 15BB |
|
| of
the repealed Income Tax Act 1922 |
|
(2.888) |
|
|
------------ |
|
| Accumulated
loss carried forward |
|
(826.988) |
|
|
========== |
|
|
|
|
| 3.
During the year, the company was unable to generate funds of its own because
there |
|
| was
no production and marketing activity. The company has already temporarily |
|
| suspended
its operations from 10 January 1999 under the instructions from the |
|
| Privatization
Commission, Government of Pakistan. The company shall |
|
| recommence
its operations after successful privatization of 85% of equity held by |
|
| State
Cement Corporation of Pakistan (Private)Limited. In this respect, Rupees |
|
| 477.192
million have been paid by the Privatization Commission to 1,076 employees |
|
| during
1998-99 and 1999-2000 under golden handshake/voluntary separation |
|
| scheme.
In view of recommencement of company's operations as aforesaid, no |
|
| adjustment
has been made in these financial statements that might result, should the |
|
| company
not be able to continue as a going concern. The auditors of the company |
|
| have
also emphasized the matter in their report to the members. |
|
|
| DIRECTORS |
|
| 4.
Since the last Annual General Meeting, Mr. Behram Hassan, Mr. Muhammad Ashraf |
|
| Chowdhry
and Mr. Muhammad Riaz Khan relinquished the charge to act as Directors |
|
| and
Mr. Shahid Anwar, Mr. Muhammad Arshad Saeed and Mr. Abdul Ghaffar Soomro |
|
| were
appointed Directors in their place. The Directors place on record their |
|
| appreciation
for valuable services rendered by the outgoing Directors and welcome |
|
| the
incoming Directors on the Board. |
|
|
| AUDITORS |
|
| 5.
The Auditors Riaz Ahmed & Company, Chartered Accountants retire and,
being |
|
| eligible,
offer their services for reappointment. |
|
|
| GENERAL |
|
| 6.
Nominal strength of essential officers and workers has been retained/hired
after |
|
| relieving
all the employees under GHS/VSS.. |
|
|
|
For and on behalf of the |
|
|
Board of Directors |
|
|
| Rawalpindi |
|
KHAWAJA SAQIB NAIM |
|
| Dated:
29th November, 2000 |
|
CHIEF EXECUTIVE |
|
|
|
| PATTERN
OF HOLDING OF SHARES |
|
| AS
ON JUNE 30, 2000 |
|
|
| No. of |
Share
Holding |
Total Shares |
|
| Shareholders |
From |
To |
Held |
|
| 3,769 |
1 |
100 |
81,984 |
|
| 699 |
101 |
500 |
141,237 |
|
| 95 |
501 |
1,000 |
67,590 |
|
| 82 |
1,001 |
5,000 |
150,814 |
|
| 13 |
5,001 |
10,000 |
83,611 |
|
| 1 |
10,001 |
15,000 |
13,566 |
|
| 1 |
15,001 |
20,000 |
20,000 |
|
| 1 |
20,001 |
25,000 |
21,933 |
|
| 1 |
30,001 |
35,000 |
34,905 |
|
| 1 |
60,001 |
65,000 |
60,200 |
|
| 1 |
1,135,001 |
1,140,000 |
11,360,226 |
|
| 1 |
10,505,001 |
10,510,000 |
10,507,934 |
|
| ----------- |
----------- |
----------- |
----------- |
|
| 4,665 |
|
12,320,000 |
|
| ========= |
========= |
========= |
========= |
|
|
|
| CATEGORIES
OF SHAREHOLDERS |
|
| AS
ON JUNE 30, 2000 |
|
|
No. of |
Shares |
|
|
|
Shareholders |
Held |
Percentage |
|
|
| Individuals |
|
4,483 |
510,407 |
4.15% |
|
| Investment
Companies |
|
4 |
38,590 |
0.31% |
|
| Insurance
Companies |
|
4 |
20,876 |
0.17% |
|
| Joint
Stock Companies |
|
5 |
79,833 |
0.65% |
|
| Financial
Institutions |
|
8 |
1,156,035 |
9.38% |
|
| State
Cement Corporation |
|
|
|
| of
Pakistan (Pvt) Limited |
|
1 |
10,507,934 |
85.29% |
|
| Deputy
Administrator Abandoned |
|
|
| Properties
(Bangladesh Citizens) |
159 |
6,324 |
0.05% |
|
| Securities
& Exchange |
|
|
|
| Commission
of Pakistan |
|
1 |
I |
-- |
|
|
----------- |
----------- |
----------- |
|
|
4,665 |
12,320,000 |
100% |
|
|
========= |
========= |
========= |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of MUSTEHKAM CEMENT LIMITED as on |
|
| 30
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 |
|
| 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 account 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 and 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 |
|
| respectively
give a true and fair view of the state of the company's affairs as at 30 June |
|
| 2000
and of the loss and the changes in financial position for the year then
ended; and |
|
|
| d)
in our opinion, no Zakat was deductable at source under the Zakat and Ushr |
|
| Ordinance,
1980. |
|
|
| Without
qualifying our opinion, we draw attention to Note No. 1.2 to the accounts.
The |
|
| company
has incurred losses of Rupees 826.988 million including loss of Rupees
264.612 |
|
| million
for the year. The company's current liabilities have exceeded its current
assets by |
|
| Rupees
494.232 million and its total liabilities exceed its total assets by Rupees
508.527 |
|
| million.
These factors raise doubts that the company will be able to continue as a
going |
|
| concern.
However, these accounts have been prepared on going concern basis, which is |
|
| dependent
on the successful outcome of the matters stated in the aforesaid note. |
|
|
| Dated:
30 November 2000 |
|
RIAZ AHMAD AND COMPANY |
|
| Islamabad |
|
CHARTERED ACCOUNTANTS |
|
|
|
|
| BALANCE
SHEET AS AT 30 JUNE 2000 |
|
|
|
|
(RUPEES IN
THOUSAND) |
|
|
NOTE |
2000 |
1999 |
|
| EQUITY AND LIABILITIES |
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorized
share capital |
|
| 18,000,000
(1999: 18,000,000) ordinary |
|
|
|
| shares
of Rupees 10 each |
|
180,000 |
180,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid up share capital |
3 |
123,200 |
123,200 |
|
| Reserves |
|
4 |
128,289 |
131,177 |
|
| Accumulated
loss |
|
(826,988) |
(565,264) |
|
|
|
----------- |
----------- |
|
|
(575,499) |
(310,887) |
|
|
| NON-CURRENT
LIABILITIES |
|
| Long
term loans |
|
5 |
396,343 |
299,430 |
|
| Long
term security deposits |
|
6 |
2,742 |
3,356 |
|
| Deferred
taxation |
|
|
66,972 |
77,936 |
|
|
|
----------- |
----------- |
|
|
|
466,057 |
380,722 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term running finance |
|
7 |
27,203 |
27,974 |
|
| Current
maturity of long term loans |
|
8 |
184,448 |
130,489 |
|
| Creditors,
accrued and other liabilities |
|
9 |
333,176 |
269,335 |
|
| Dividend
payable |
|
10 |
187,586 |
187,588 |
|
| Provision
for taxation |
|
|
1,931 |
151,677 |
|
|
|
----------- |
----------- |
|
|
734,344 |
767,063 |
|
| CONTINGENT
LIABILITIES |
|
11 |
-- |
-- |
|
|
----------- |
----------- |
|
|
624,902 |
836,898 |
|
|
========== |
========== |
|
|
| ASSETS |
|
| NON-CURRENT
ASSETS |
|
| Tangible
fixed assets |
|
| Operating
fixed assets - at cost less |
|
| accumulated
depreciation |
|
12 |
349,022 |
401,891 |
|
| Stores
held for capital expenditure |
|
35,768 |
36,893 |
|
|
----------- |
----------- |
|
|
384,790 |
438,784 |
|
|
|
|
| Long
term loans and advances |
|
13 |
-- |
3,041 |
|
|
|
|
----------- |
----------- |
|
|
384,790 |
441,825 |
|
| CURRENT
ASSETS |
|
| Stores,
spares and loose tools |
|
14 |
178,078 |
178,081 |
|
| Stock
in trade |
|
15 |
6,540 |
6,538 |
|
| Trade
debtors - Considered good |
|
16 |
38 |
51 |
|
| Loans,
advances, deposits, prepayments |
|
|
|
| and
other receivables |
|
17 |
41,148 |
199,906 |
|
| Cash
and bank balances |
|
18 |
14,308 |
10,497 |
|
|
|
----------- |
----------- |
|
|
240,112 |
395,073 |
|
|
----------- |
----------- |
|
|
624,902 |
836,898 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR |
|
| ENDED
30 JUNE 2000 |
|
|
|
|
|
(RUPEES IN
THOUSAND) |
|
|
|
NOTE |
2000 |
1999 |
|
| SALES |
|
19 |
-- |
295,660 |
|
| COST
OF GOODS SOLD |
|
20 |
-- |
446,172 |
|
| GROSS
LOSS |
|
-- |
(150,512) |
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| Administrative
and general |
|
21 |
211,374 |
305,711 |
|
| Selling
and distribution |
|
22 |
-- |
2,604 |
|
|
|
----------- |
----------- |
|
|
211,374 |
33,175 |
|
|
----------- |
----------- |
|
| OPERATING
LOSS |
|
(211,374) |
(183,687) |
|
|
|
|
| OTHER
INCOME |
|
23 |
19,796 |
18,349 |
|
|
|
|
----------- |
----------- |
|
|
(191,578) |
(165,338) |
|
|
|
|
| FINANCIAL
AND OTHER CHARGES |
|
|
|
| Financial
charges |
|
24 |
77,072 |
55,563 |
|
| Other
charges |
|
25 |
9,739 |
-- |
|
|
|
----------- |
----------- |
|
|
86,811 |
55,563 |
|
|
----------- |
----------- |
|
|
(278,389) |
(220,901) |
|
| PRIOR
YEARS' ADJUSTMENT |
|
26 |
1,948 |
-- |
|
|
|
|
----------- |
----------- |
|
| LOSS
BEFORE TAXATION |
|
(280,337) |
(220,901) |
|
|
|
|
| TAXATION |
|
|
|
| Current |
|
1,931 |
(1,478) |
|
| Prior years |
|
(6,692) |
-- |
|
| Deferred |
|
(10,964) |
921 |
|
|
----------- |
----------- |
|
|
(15,725) |
(557) |
|
|
----------- |
----------- |
|
| LOSS
AFTER TAXATION |
|
(264,612) |
(221,458) |
|
|
|
|
| ACCUMULATED
LOSS BROUGHT FORWARD |
|
(565,264) |
(343,806) |
|
|
|
----------- |
----------- |
|
|
(829,876) |
(565,264) |
|
| APPROPRIATIONS |
|
|
|
|
|
|
| Transfer
from Tax Holiday Reserve |
|
(2,888) |
-- |
|
|
----------- |
----------- |
|
| ACCUMULATED
LOSS CARRIED TO BALANCE SHEET |
(826,988) |
(565,264) |
|
|
========== |
========== |
|
| LOSS
PER SHARE-BASIC |
|
27 |
21.48 |
17.98 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30 JUNE 2000 |
|
|
|
|
|
(RUPEES IN
THOUSAND) |
|
|
|
NOTE |
2000 |
1999 |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Loss
before taxation |
|
(280,337) |
(220,901) |
|
| ADJUSTMENTS
FOR NON CASH CHARGES AND OTHER ITEMS: |
|
| Depreciation |
|
42,142 |
48,878 |
|
| Depreciation
of prior years |
|
1,948 |
-- |
|
| Provision
for gratuity |
|
6,294 |
-- |
|
| Provision
for obsolete spare parts |
|
-- |
1,044 |
|
| Fixed
assets written off |
|
9,023 |
-- |
|
| Store
shortages written off |
|
716 |
-- |
|
| Credit
balances added back |
|
(5,588) |
-- |
|
| Gain
on disposal of operating fixed assets |
|
(23) |
(1,801) |
|
| Financial
charges |
|
77,072 |
55,563 |
|
|
------------ |
------------ |
|
|
131,584 |
103,684 |
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
------------ |
------------ |
|
| BEFORE
ADJUSTMENT OF WORKING CAPITAL |
|
(148,753) |
(117,217) |
|
| CASH
FLOWS FROM WORKING CAPITAL CHANGES |
|
|
| (INCREASE)/DECREASE
IN CURRENT ASSETS |
|
| Stores
and spares |
|
(713) |
13,713 |
|
| Stock
in trade |
|
(2) |
42,277 |
|
| Trade debts |
|
13 |
165 |
|
| Loans,
advances, deposits, prepayments |
|
|
|
| and
other receivables |
|
8,591 |
13,542 |
|
| (DECREASE)
IN CURRENT LIABILITIES |
|
| Creditors,
accrued and other liabilities |
|
(529) |
(123,343) |
|
|
------------ |
------------ |
|
| EFFECT
ON CASH FLOWS DUE TO WORKING CAPITAL CHANGES |
7,360 |
(53,646) |
|
|
------------ |
------------ |
|
| CASH
OUTFLOWS FROM OPERATING ACTIVITIES |
(141,393) |
(170,863) |
|
|
| Financial
charges paid |
|
(7,114) |
(1,846) |
|
| Income
tax paid |
|
(1,112) |
(3,609) |
|
|
------------ |
------------ |
|
| NET
CASH OUTFLOWS FROM OPERATING ACTIVITIES |
(149,619) |
(176,318) |
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Fixed
assets acquired |
|
(554) |
(71) |
|
| Stores
held for capital expenditure |
|
1,125 |
(4,872) |
|
| Sale
proceeds of operating fixed assets |
|
333 |
2,316 |
|
| Long
term advances |
|
3,041 |
2,021 |
|
|
------------ |
------------ |
|
| NET
CASH INFLOWS/(OUTFLOWS) FROM INVESTING ACTIVITIES |
3,945 |
(606) |
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
| Long
term loans |
|
150,872 |
88,800 |
|
| Short
term running finance |
|
(771) |
27,974 |
|
| Long
term security deposits |
|
(614) |
(220) |
|
| Dividend
paid</ |
