| Pakistan Slag 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 Meeting |
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| Report
of the Directors |
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| Shareholders'
Statistics |
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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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|
|
| Company
Information |
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| Board
of Directors |
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| Chairman/Chief
Executive |
Jehangir Akber |
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|
Shaft Muhammad Khan Jatoi |
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|
Muhammad Naeem Khan |
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|
Nisar A. Korai |
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|
Faiz Mohammad Brohi |
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|
Ajaz Ali Panhor |
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|
Muneer Ahmed |
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| Company
Secretary |
Muhammad Shariq Aqeel |
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| Auditors |
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Faruq Ali & Co., |
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Chartered Accountants |
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| Bankers |
|
Platinum Commercial Bank
Limited |
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|
Muslim Commercial Bank
Limited |
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National Bank of Pakistan |
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Societe Generele French
International Bank |
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| Registered
Office |
4th Floor, Panorama
Center, |
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Building No. 2, Doctors'
Plaza, |
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|
Raja Ghazanfar Ali Khan
Road, |
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Saddar, Karachi. |
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Phone: 568-6095 |
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Fax: 521-9067 |
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| Factory |
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DSU-6, Zulfiqarabad,
Karachi. |
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Phone: (0201) 750129 -
750130 |
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Fax: (0201) 750131 |
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| Notice
of Annual General Meeting |
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| Notice
is hereby given that the 11th Annual General Meeting of Pakistan Slag Cement
Industries Limited |
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| will
be held on Tuesday January 30, 2001 at 4.00 p.m. at FTC Auditorium,
Sharah-e-Faisal, Karachi, to |
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| transact
the following business: |
|
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| 1.
To confirm the minutes of 10th Annual General Meeting held on December 27,
1999. |
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|
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| 2.
To receive and adopt the Report of Directors and Auditors together with
Audited Accounts for the year |
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| ended
June 30, 2000. |
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|
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| 3.
To lay information before the members of the Company of the appointment of
Messers Faruq Ali & |
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| Company,
Chartered Accountants, as auditor of the Company, for the year ending June
30, 2001. |
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|
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| 4.
To declare a dividend @ 5% for the year ended June 30, 2000. |
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|
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| 5.
To elect Directors of the Company for a term of three years in accordance
with the Companies |
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| Ordinance,
1984 in this respect. |
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|
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| a)
Number of Directors to be elected has been fixed as seven by The Board of
Directors. |
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|
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| b)
The retiring Directors are as follows: |
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| 1.
Mr. Jehangir Akber |
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| 2.
Mr. Muhammad Naeem Khan |
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| 3.
Mr. Shafi Muhammad Khan Jatoi |
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| 4.
Mr. Nisar Ahmad Korai |
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| 5.
Mr. Faiz Muhammad Barohi |
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| 6.
Mr. Aijaz Ali Ponwer |
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| 7.
Mr. Munir Ahmed |
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| And |
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| 8.
To transact any other business with the permission of the chairman. |
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By Order of the Board |
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|
(Muhammad Shariq Aqeel) |
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| Karachi:
January 10, 2001 |
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Company Secretary |
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| NOTES: |
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| i.
The register of members will remain closed from 29th January 2001 to 13th
February 2001 (both days |
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| inclusive). |
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|
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| ii.
A member entitled to attend and vote at the meeting may appoint a proxy to
attend and vote on his/her |
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| behalf.
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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|
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| iii.
Shareholders are requested to notify any change in their address immediately. |
|
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| iv.
Notice of Candidature for the office of Directorship should be received at
least 14 days before meeting |
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| at
the registered office of the Company in accordance with the provisions of
section 178(3) of the |
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| Companies
Ordinance, 1984 |
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|
| Report
of the Directors |
|
|
| Dear
Shareholders, |
|
|
| Your
Directors are pleased to welcome you to the 11th Annual General Meeting of
the Company and to present |
|
| the
Annual Accounts and the Auditors report thereon for the financial year ended
June 30, 2000. |
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|
| PRODUCTION |
|
| During
the year the Company produced 35,522.50 tonnes cement, as compared to
74,319.85 tonnes of last |
|
| year.
The main reason for the fall in production is attributable to the lack of
supply of Clinker from Zeal Pak |
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| Cement
Factory, the main supplier for Clinker to the Company. Moreover, Company had
to keep the |
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| production
in line with the demand in the market. |
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|
| MARKETING |
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| As
submitted above, due to lack of supply of clinker and fall in demand in the
market, the Company could |
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| despatch
35,767.41 Tonnes cement during the year under review, as compare to 75,345.82
tonnes in the |
|
| corresponding
last year. |
|
|
| SUPPLY
OF GRINDED GRANULATED SLAG |
|
| Under
an agreement with Ghazi Barotha Hydro Power Project, the Company was to
supply the above material |
|
| to
them. Due to capacity constraints, the Company subletted the contract to Zeal
Pak Cement Factory Limited. |
|
| Under
this agreement Company supplied 109,904 tonnes to Ghazi Barotha .Hydro Power
Project. |
|
|
| FINANCIAL
RESULTS |
|
| During
the year the Company has been in a position to earn operating profit of Rs.
1.852 Million as against |
|
| operating
loss of Rs. 2.132 Million of last year. However, due to increase in financial
charges and provision for |
|
| taxation
the Company's loss after taxation amounted to Rs.6.048 Million as against Rs.
6.991 Million of the |
|
| previous
year. As a result of prior year's adjustment the profit amounted to Rs. 5.632
Million which has enable |
|
| the
Company's Board of Directors to declare dividend which is a history by
itself. |
|
|
| AUDITOR'S
QUALIFICATION |
|
| As
regards Auditor's qualification, in their report to the members, regarding
understated markup of Rs. 29.190 |
|
| Million,
the Shareholders of the Company are informed that as a result of an agreement
with PICIC the |
|
| Company
is not liable to pay the above amount of markup if the Company remains
regular in the payment of |
|
| the
installments as per the agreement. We assure our shareholders that Company is
following agreement for |
|
| repayment
of loan installments religiously and has been paying the stipulated
installments regularly on or |
|
| before
due dates. Further, the sponsors of the Company ensure that payment of
installments will be made |
|
| strictly
in accordance with the agreement. Thus a situation of invoking of reverting
clause by PICIC is not going |
|
| to
arise. Hence the Company needs not to have the provision for the said markup. |
|
|
| As
regards Auditor's qualification on payment of dividend it is a fact that the
Company could not pay Dividend |
|
| to
its shareholders since its established in view of accumulated losses.
Consequent upon, the relief in mark up |
|
| on
PICIC loan, arising out of the above agreement, the Company has included the
same as prior year's |
|
| adjustment.
The Directors of the Company have, therefore, decided to pay 5% Dividend on
the basis of prior |
|
| year's
adjustment, inspite of Current year's and accumulated losses. |
|
|
| As
regards auditor's observation on going concern of the Company the Company is
improving its operational |
|
| profit
and is making all efforts to boostup its sales. It is therefore, expected
that the profitability of the Company |
|
| will
be improved in the future. |
|
|
| DIRECTORS |
|
| Since
the last Annual General Meeting the composition of the Board of Directors
remained the same with the |
|
| exemption
that Mr. Chaudhry Ehsan Aziz resigned from the Board and Mr. Muneer Ahmed was
inducted as a |
|
| Director
in his place. |
|
|
| The
Election of Company's Directors is going to be held in the Annual General
Meeting to be held on January |
|
| 30th
2001. |
|
|
| AUDITORS |
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| The
present Auditors M/s. Faruq Ali & Co. Chartered Accountants, stand
retired and being eligible. Offer |
|
| themselves
for reappointment as Auditor of the Company for the financial year ended 30th
June, 2001. |
|
|
| PATTERN
OF SHARE HOLDING |
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| A
statement showing pattern of holding of the Company is included in the
report. |
|
|
| APPRECIATION
FOR EMPLOYEES |
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| We
on behalf of the Board of Directors wish to place on record our appreciation
for dedication and devotion of |
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| our
employees to their duties and have no doubt that it would be coming forth in
greater measure in the |
|
| development
phase ahead. It is hopped that they will continue to work with same zeal and
spirit. |
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|
|
|
BY ORDER OF THE BOARD |
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|
|
|
|
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| Karachi'
January 8, 2001 |
|
Chairman |
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|
| Shareholders'
Statistics as At June 30, 2000 |
|
|
| Number of |
|
Share Holding |
|
Total |
|
| Share Holders |
From |
|
To |
Shares Held |
|
|
| 646 |
1 |
-- |
100 |
64,600 |
|
| 3125 |
101 |
-- |
500 |
1,535,400 |
|
| 36 |
501 |
-- |
1000 |
35,000 |
|
| 25 |
1001 |
-- |
5000 |
62,704 |
|
| 2 |
5001 |
-- |
10000 |
13,500 |
|
| 4 |
10001 |
-- |
15000 |
51,500 |
|
| 2 |
15001 |
-- |
20000 |
40,000 |
|
| 1 |
35001 |
-- |
40000 |
39,300 |
|
| 1 |
195001 |
-- |
200000 |
200,000 |
|
| 1 |
495001 |
-- |
500000 |
500,000 |
|
| 1 |
600001 |
-- |
605000 |
602,001 |
|
| 1 |
1160001 |
-- |
1165000 |
1,162,000 |
|
| 1 |
2090001 |
-- |
2095000 |
2,093,995 |
|
| ------------------ |
|
|
|
------------------ |
|
| 3846 |
|
6,400,000 |
|
| ========== |
|
========== |
|
|
| CATEGORIES
OF SHAREHOLDERS |
|
|
| S.No. |
Categories of
Shareholders |
Number of |
Total |
Percentage |
|
|
|
Share Holders |
Shares Held |
|
|
|
|
| 1. |
INDIVIDUAL |
|
3834 |
5,037,000 |
78.70 |
|
| 2. |
INVESTMENT COMPANIES |
1 |
200,000 |
3.13 |
|
| 3. |
FOREIGN COMPANY |
1 |
1,162,000 |
18.16 |
|
| 4. |
JOINT HOLDER |
|
10 |
1,000 |
0.01 |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
3846 |
6,400,000 |
100.00 |
|
|
|
========== |
========== |
========== |
|
|
|
| Auditors
Report To The Members |
|
|
| We
have audited the annexed Balance Sheet of M/S. PAKISTAN
SLAG CEMENT INDUSTRIES LIMITED, |
|
| Karachi,
as at 30th June, 2000 and the related Profit & 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
polices 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)
Despite of accumulated losses of Rs. 51.002 Million and loss for the year of
Rs. 4.485 Million the |
|
| Company
has opted to pay dividend to the shareholders. |
|
|
| b)
in our opinion, proper books of account have been kept by the Company as
required by the Companies |
|
| Ordinance,
1984. |
|
|
| c)
in our opinion:- |
|
|
| i)
the Balance Sheet and Profit & 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 |
|
| accounts
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. |
|
|
|
| d)
in our opinion and to the best of our information and according to the
explanations given to us, the |
|
| Balance
Sheet, Profit & Loss Account, together with the notes forming part
thereof confirm with |
|
| approved
accounting standards as applicable in Pakistan, and give the information
required by the |
|
| Companies
Ordinance, 1984, in the manner so required and with the exception of the fact
that liability in |
|
| respect
of markup on borrowing is under stated to the extent of Rs. 29.190 Million as
explain in note |
|
| 12.3.2.
respectively give true and fair view of the State of the Company affairs as
at 30th June, 2000, |
|
| and
of loss, its cash flows and changes in equity for the year then ended; |
|
|
| e)
in our opinion, no Zakat was deductible at source under the Zakat & Ushr
Ordinance, 1980. |
|
|
| Without
qualifying our opinion we draw the attention of the members to the fact that
the Company's |
|
| accounts
have been prepared under going concern concept whereas the company has
sustained loss of |
|
| Rs.
4.485 Millions during the year ended 30th June, 2000 and as of that date the
accumulated losses of |
|
| the
Company have reached the figure of Rs. 51.002 M. and the current liabilities
exceeds its currents |
|
| assets
by 62.713 M. |
|
|
|
|
|
Faruq Ali & Company |
|
| Karachi:
January 08, 2001 |
|
Chartered Accountants |
|
|
|
| Balance
Sheet as At June 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| Operating
Fixed Assets |
|
3 |
92,943,512 |
108,060,843 |
|
| Capital
Work-in -Progress |
|
|
8,807,514 |
5,843,605 |
|
| Intangible
Assets |
|
4 |
10,000 |
10,000 |
|
| Long
Term Deposits |
|
|
1,307,040 |
1,561,355 |
|
|
|
|
|
------------------ |
------------------ |
|
| Total
Long Term Assets |
|
|
103,068,066 |
115,475,803 |
|
|
|
|
|
|
|
| Current Assets |
|
|
|
| Stores
and Spares |
|
5 |
2,765,200 |
3,044,591 |
|
| Stock-in-Trade |
|
|
6 |
36,499,917 |
23,686,571 |
|
| Trade Debts |
|
|
7 |
11,645,667 |
18,685,726 |
|
| Loans,
Advances, Deposits, Pre-Payments |
|
|
| and
Other Receivables |
|
8 |
36,512,107 |
17,953,916 |
|
| Cash
& Bank Balance |
|
9 |
1,117,155 |
2,846,947 |
|
|
|
|
------------------ |
------------------ |
|
| Total
Current Assets |
|
|
88,540,046 |
66,217,751 |
|
|
|
|
|
| Current
Liabilities |
|
|
|
| Current
Maturity of Long Term Loans |
|
15,772,104 |
41,832,309 |
|
| Short
Term Borrowing |
|
10 |
47,450,628 |
-- |
|
| Creditors,
Accrued & Other Liabilities |
11 |
78,959,208 |
105,711,087 |
|
| Provision
for Taxation |
|
|
5,871,658 |
4,309,658 |
|
| Proposed
Dividend |
|
|
3,200,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Total
Current Liabilities |
|
|
151,253,598 |
151,853,054 |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
Current Liabilities |
|
|
(62,713,552) |
(85,635,303) |
|
|
|
|
|
------------------ |
------------------ |
|
| Total
Assets less Current Liabilities |
|
40,354,514 |
29,840,500 |
|
|
|
|
|
| Long
Term Liabilities |
|
|
|
| Long
Term Loans |
|
12 |
26,231,238 |
17,823,358 |
|
| Long
Term Deposits |
|
13 |
1,125,655 |
1,125,655 |
|
| Liabilities
against assets subject to finance lease |
|
-- |
324,984 |
|
|
|
|
------------------ |
------------------ |
|
| Total
Long Term Liabilities |
|
|
27,356,893 |
19,273,997 |
|
|
|
|
|
-- |
-- |
|
|
|
|
|
------------------ |
------------------ |
|
| Contingencies
and Commitments |
|
12,997,621 |
10,566,503 |
|
|
| Represented
By: |
|
| Share Capital |
|
|
14 |
64,000,000 |
64,000,000 |
|
| Unappropriated
Loss |
|
|
(51,002,379) |
(53,433,497) |
|
|
------------------ |
------------------ |
|
| Share
Holder Equities |
|
|
12,997,621 |
10,566,503 |
|
|
|
========== |
========== |
|
|
|
| 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 - Net |
|
15 |
312,228,893 |
178,289,192 |
|
| Cost of Sales |
|
16 |
307,804,320 |
176,978,146 |
|
|
|
|
------------------ |
------------------ |
|
| Gross Profit |
|
|
4,424,573 |
1,311,046 |
|
| Administrative
and Selling Expenses |
17 |
2,890,571 |
3,840,682 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
Profit/(Loss) |
|
|
1,534,002 |
(2,529,636) |
|
| Other Income |
|
18 |
317,809 |
397,441 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,851,811 |
(2,132,195) |
|
| Financial
Charges |
|
19 |
6,337,277 |
3,963,729 |
|
|
|
|
------------------ |
------------------ |
|
| Net
(Loss) Before Taxation |
|
|
(4,485,466) |
(6,095,924) |
|
| Provision
for Taxation |
|
20 |
1,562,000 |
895,000 |
|
|
|
|
------------------ |
------------------ |
|
| Net
Loss After Taxation |
|
|
(6,047,466) |
(6,990,924) |
|
| Prior
Year's Adjustments |
|
21 |
11,678,584 |
174,009 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
5,631,118 |
(6,816,915) |
|
|
|
|
|
|
|
| Appropriations |
|
|
|
| Un-appropriated
Balance Brought Forward |
|
(53,433,497) |
(46,616,582) |
|
| Proposed
Dividend @ 5% (1999 - 0) |
|
3,200,000 |
-- |
|
|
------------------ |
------------------ |
|
|
|
(56,633,497) |
(46,616,582) |
|
|
------------------ |
------------------ |
|
| Balance
Carried to balance sheet |
|
|
(51,002,379) |
(53,433,497) |
|
|
|
|
|
========== |
========== |
|
|
| Loss Per Share |
|
22 |
(0.94) |
(1.09) |
|
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Chief Executive |
|
Director |
|
|
|
|
|
| Statement
of Changes in Equity |
|
| For
The Year Ended June 30, 2000 |
|
|
|
|
Rupees |
|
|
|
Share |
Un-Appropriated |
Total |
|
|
Capital |
Loss |
|
|
|
| Balance
as at 30th June 1998 |
|
64,000,000 |
(46,616,582) |
17,383,418 |
|
|
| (Loss)
after taxation and prior year adjustments |
|
|
| for
the year ended 30th June, 1999 |
-- |
(6,816,915) |
(6,816,915) |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30th June 1999 |
|
64,000,000 |
(53,433,497) |
10,566,503 |
|
|
|
|
|
| Profit
after Taxation & prior year adjustments |
|
|
| for
the year ended 30th June, 2000 |
-- |
5,631,118 |
5,631,118 |
|
|
| Proposed
Dividend |
|
-- |
(3,200,000) |
(3,200,000) |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30th June 2000 |
|
64,000,000 |
(51,002,379) |
12,997,621 |
|
|
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
|
Chief Executive |
|
|
Director |
|
|
|
|
| Cash
Flow Statement |
|
| For
The Year Ended June 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| Cash
flow from operating activities |
|
| Cash
generated from operations |
|
25 |
25,207,461 |
12,426,783 |
|
|
|
|
|
| Cash
flow from investing activities |
|
|
|
| Fixed
capital expenditure |
|
|
(3,019,559) |
(5,812,555) |
|
| Long
Term Deposits |
|
|
254,315 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash outflow from investing activities |
|
(2,765,244) |
(5,812,555) |
|
|
| Cash
flow from financing activities |
|
| Re-payments
of long-term loan |
|
|
(17,652,325) |
(2,376,374) |
|
| Financial
Charges |
|
|
(6,194,700) |
(3,678,691) |
|
| Liabilities
against Assets subject to Finance Lease |
|
(324,984) |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow)/inflow from financing activities |
|
(24,172,009) |
(6,055,065) |
|
|
|
|
------------------ |
------------------ |
|
| Net
increase/(decrease)in cash and cash equivalents |
(1,729,792) |
559,163 |
|
| Cash
and cash equivalents at the beginning of the year |
2,846,947 |
2,287,784 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents as at the end of year |
|
1,117,155 |
2,846,947 |
|
|
========== |
========== |
|
|
|
Chief Executive |
|
Director |
|
|
|
|
| Notes
To The Accounts |
|
| For
The Year Ended June 30, 2000 |
|
|
| 1.
Nature and Status |
|
| Pakistan
Slag Cement Industries Limited was incorporated in September 1988 as a Public
Limited |
|
| Company.
It went into Public subscription in June 1994 and was listed at Karachi Stock
Exchange in |
|
| August 1994. |
|
|
|
|
|
|
| The
company is principally engaged in the manufacturing and sale of Slag Cement,
Ordinary Portland |
|
| Cement,
White Cement, Clinker Coal Ash Cement and allied products. |
|
|
|
|
| 2.
Significant Accounting Policies |
|
|
|
|
|
| 2.1
Accounting Convention |
|
|
|
| These
Accounts have been prepared under the "Historical Cost Convention"
without any effect of |
|
| inflation
or of current values. |
|
|
|
|
|
|
| 2.2
Tangible Fixed Assets/Depreciation |
|
|
|
| i)
These are stated at cost less accumulated depreciation except leasehold land
which is |
