| Dandot Cement Company Limited |
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| Annual
Report 2001 |
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| Contents |
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| Company
Information |
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| Notice
of Meeting |
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| Pattern
of Shareholdings |
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| Directors' Report |
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| Auditor's Report |
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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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| Company
Information |
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| Board
of Directors: |
Mr. Abdur Rafique Khan |
(Chairman) |
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Mr. M. Tousif Peracha |
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Mr. A. Shoeb Piracha |
(Managing Director) |
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Mr. Farooq Zaman |
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Mr. Jawaid A. Peracha |
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Mr. Ali Rashid Khan |
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Mr. Mohammad Asif |
(Nominee of N.I.T.) |
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| Bankers: |
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Habib Bank Limited |
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Citi Bank |
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ABN Amro Bank |
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The Bank of Punjab |
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Saudi Pak Commercial Bank
Limited |
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United Bank Limited |
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National Bank of Pakistan |
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Bolan Bank Limited |
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Muslim Commercial Bank
Limited |
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| Auditors: |
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Rahim Iqbal Rafiq &
Co. |
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Chartered Accountants |
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| Company
Secretary: |
Zulfiqar A. Choudhry |
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ACA. ACMA. |
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| Registered
Office: |
3-A/3 Gulberg - III,
Lahore. |
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Telephone: 5871057-58,
Fax: 5871056 |
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| Works: |
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DAN DOT R.S., Distt.
Jhelum. |
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| Shares
Department: |
3-A/3 Gulberg - III,
Lahore. |
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| Notice
of Annual General Meeting |
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| NOTICE
is hereby given that 21st Annual General Meeting of the shareholders of
Dandot Cement Company |
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| Limited
for the financial year ended June 30, 2001 will be held on Wednesday,
December 26, 2001 at |
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| Avari
Hotel, Lahore at 3:30 p.m to transact the following business: |
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| ORDINARY
BUSINESS |
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| 1.
To confirm the minutes of the last Annual General Meeting held on December
23, 2000. |
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| 2.
To receive, consider and adopt the audited Accounts together with the
Directors' report and |
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| Auditor's
Report for the year ended June 30, 2001. |
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| 3.
To appoint Auditors for the year 2001-2002 and fix their remuneration. Rahim
Iqbal Rafiq & Co., |
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| Chartered
Accountants, the retiring auditors, being eligible, offer themselves for
reappointment |
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| as
Auditors of the Company. |
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| SPECIAL
BUSINESS |
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| 4.
That clause 83 of Article of Association of the Company be and is hereby
substituted with the |
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| following
new clause:- |
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| "Subject
to the provisions of the Ordinance, the Directors may from time to time, at |
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| their
discretion, raise or borrow money for the purposes of the company and may |
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| secure
the same on any or all of the properties or assets of the company upon such |
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| terms
and conditions as they may deem fit." |
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| 5.
To transact any other business with the permission of the Chair. |
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By Order of the Board |
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(ZULFIQAR A. CHOUDHRY) |
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| Lahore:
November 30, 2001 |
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Company Secretary |
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| STATEMENT
U/S 160(1)(b) OF THE COMPANIES ORDINANCE, 1984 |
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| Clause
83 of the Articles restricts the borrowing power of the company, thus
hindering in obtaining additional |
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| finances
for the BMR purposes. In order to overcome this hindrance and to streamline
the process of borrowing |
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| by
the Directors on behalf of the company, it is proposed to substitute the
existing clause 83 of the Articles of |
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| Association
on which shareholders consent is required in the General Meeting. |
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| NOTES: |
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| 1.
A member entitled to attend and vote at this Meeting may appoint another
member as his / her proxy |
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| to
attend and vote on his / her behalf. Proxies, in order to be effective, must
be received at the Registered |
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| Office
of the Company before 48 hours of the time appointed for the Meeting. |
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| 2.
The share transfer books of the Company will remain closed from 20th
December, 2001 to |
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| 26th
December, 2001, (both days inclusive). |
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| 3.
Shareholders are requested to notify any change in address immediately. |
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| 4.
CDC shareholders are requested to bring their National Identity Card, Account
and Participant's Numbers |
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| while
attending the Meeting for identification. |
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| Pattern
of Shareholdings as at June 30, 2001 |
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| No. of |
Shareholding |
No. of |
Percentage |
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| Shareholders |
From |
To |
Shares Held |
|
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| 447 |
1 |
10 |
3,678,815 |
13.214 |
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| 133 |
101 |
500 |
45,185 |
0.162 |
|
| 105 |
501 |
1000 |
90,025 |
0.323 |
|
| 120 |
1001 |
5000 |
3,873,334 |
13.913 |
|
| 17 |
5001 |
10000 |
123,661 |
9.444 |
|
| 8 |
10001 |
15000 |
97,681 |
0.351 |
|
| 3 |
15001 |
20000 |
48,537 |
0.174 |
|
| 3 |
20001 |
25000 |
1,943,729 |
6.982 |
|
| 37 |
25001 |
30000 |
11,971,735 |
43.002 |
|
| 6 |
30001 |
35000 |
67,900 |
0.244 |
|
| 2 |
35001 |
40000 |
78,106 |
0.231 |
|
| 1 |
40001 |
45000 |
41,506 |
0.149 |
|
| 1 |
45001 |
50000 |
46,750 |
0.168 |
|
| 0 |
50001 |
55000 |
0 |
0.000 |
|
| 2 |
55001 |
60000 |
116,900 |
0.420 |
|
| 0 |
60001 |
65000 |
0 |
0.000 |
|
| 9 |
65001 |
300000 |
1,474,743 |
5.297 |
|
| 1 |
300001 |
785000 |
457,186 |
1.642 |
|
| 1 |
785001 |
2500000 |
1,058,812 |
3.803 |
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| 1 |
2500001 |
9750000 |
2,625,375 |
9.430 |
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| 0 |
9750001 |
30000000 |
0 |
0.000 |
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| ------------------ |
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------------------ |
------------------ |
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| 897 |
|
27,839,980 |
100.000 |
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| ========== |
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========== |
========== |
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No. of |
Shares |
Percentage |
|
| Categories
of Shareholders |
|
Shareholders |
Held |
|
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| INDIVIDUALS |
|
790 |
4,269,569 |
15.336 |
|
| INVESTMENT
COMPANIES |
|
3 |
45,662 |
0.164 |
|
| INSURANCE
COMPANIES |
|
2 |
222,531 |
0.799 |
|
| FINANCIAL
INSTITUTIONS |
|
19 |
3,756,155 |
13.492 |
|
| PRIVATE
LIMITED COMPANIES |
|
5 |
81,131 |
0.291 |
|
| FOREIGN
INVESTORS |
|
32 |
1,899,193 |
6.822 |
|
| CORPORATIONS |
|
2 |
2,625,400 |
9.430 |
|
| LEASING
COMPANIES |
|
1 |
1,896,792 |
6.813 |
|
| JOINT
STOCK COMPANIES |
|
39 |
13,038,047 |
46.832 |
|
| OTHERS |
|
4 |
5,500 |
0.020 |
|
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|
------------------ |
------------------ |
------------------ |
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| GRAND
TOTAL |
|
897 |
27,839,980 |
100.000 |
|
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|
========== |
========== |
========== |
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|
| Directors'
Report to the Shareholders |
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| Your
directors are pleased to present the annual report alongwith the audited
financial statements for the |
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| year
ended June 30, 2001. |
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| GENERAL |
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| Ever
since the new management of the Company took over the control and management
of the Company, the |
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| commercial
production of clinker and cement and despatches of cement have posted an
outstanding recovery. |
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| PRODUCTION |
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| The
production of clinker and cement increased during the year under review
principally on account of |
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| market
consolidation of the Company and its continuous operation throughout the
year. It is worth mentioning |
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| here
that this increase in production has occurred in the backdrop of the
prevailing recessionary trend in the |
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| cement
industry which operated at 62% of capacity on average throughout the year.
Further, the gas supply |
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| disconnection
of our cement plant during the period from December 2000 to April 2001 led to
a shortfall in |
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| the
production of clinker. The comparative figures for production of clinker and
cement are mentioned |
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| hereunder
(data for the year 1999-2000 is reflective of two month's production only):- |
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2000-2001 |
1999-2000 |
|
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|
Tonnes |
Tonnes |
|
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| Clinker
Production |
|
260,589 |
48,409 |
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| Cement
Production |
|
258,549 |
42,436 |
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| DESPATCHES |
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| Given
the recession in the cement sector, your Company alongwith other cement
manufacturers had to |
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| absorb
a large surplus capacity of 38% on average during the year under review.
Despite this, the cement |
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| despatches
of the Company registered an increase in line with prevailing surplus
capacity and market demand. |
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| The
comparative figures for cement despatches are given as under:- |
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|
2000-2001 |
1999-2000 |
|
|
|
Tonnes |
Tonnes |
|
|
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| Despatches |
|
263,174 |
37,527 |
|
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|
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| For
comparative purposes, the preceding year's data of despatches is reflective
of two month's despatch |
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| activity only. |
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| SALES
AND MARKETING |
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| During
the year under review, the Company posted gross sales of Rs. 1,016 million
(1999-2000: Rs. 155 |
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| million)
and net sales of Rs. 610 million (1999-2000: Rs. 103 million). The Company
suffered a net loss of |
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| Rs.
213 million before tax for the year under review as compared to the net loss
of Rs. 186 million before tax |
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| of
the preceding year. |
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| The
loss is attributed to market price fluctuation, impact of the aforesaid
disconnection of gas supply to our |
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| cement
plant, increase in gas tariff by 44.72% which stood at Rs. 616.4 per HM3 of
gas on June 30, 2001 as |
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| compared
to Rs. 425.9 per HM3 of gas on June 29, 2000 and due to some adverse
extra-ordinary items |
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| amounting
to Rs. 21 million. |
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| Our
Company contributed Rs. 406 million to the National Exchequer in the form of
excise duty, sales tax and |
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| income
tax, which is computed to around 40% of our sales. |
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|
| FINANCIAL
RESULTS |
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| The
financial results for the year ended June 30, 2001 are as follows: |
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|
| Loss
before taxation |
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|
(Rs. in thousand) |
|
|
|
|
|
|
| Provision
for taxation: |
|
|
(212,733) |
|
| Current year |
|
|
|
3,242 |
|
|
| Deferred
- Current |
|
|
(2,508) |
|
|
| Prior years |
|
50,814 |
51,548 |
|
|
|
------------------ |
------------------ |
|
| Loss
after taxation |
|
|
|
(264,281) |
|
|
========== |
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|
| Expansion,
Development and Maintenance |
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| During
the year under review, the cement plant remained satisfactory and its normal
maintenance has been |
|
| carried
out throughout the year. |
|
|
| In
accordance with the B.M.R. commitment of the management, the Company has
begun the installation and |
|
| commissioning
of the Coal-Firing System at our cement plant. The foreign exchange portion
of the project has |
|
| been
financed by the sponsors of the Company. |
|
|
| The
commissioning of the Coal-Firing System by the sponsors is expected to reduce
our reliance upon natural |
|
| gas
and furnace oil as industrial-fuel and decrease our direct costs of
production. The project is expected to |
|
| ensure
the cost-benefit competitiveness of the Company in the long-run. |
|
|
| Pattern
of Shareholding |
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| The
Pattern of Shareholding of the Company as on June 30, 2001, is annexed. |
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|
| Auditors |
|
| M/s.
Rahim Iqbal Rafiq and Company, Chartered Accountants, the retiring auditors,
being eligible offer |
|
| themselves
for reappointment for the year ended June 30, 2002. |
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|
| FUTURE
PROSPECTS |
|
| In
general, the revival of large-scale construction activities in Pakistan,
lower taxes upon cement alongwith |
|
| other
incentives and the consistent supply of fuel energy at low cost are the
factors imperative for the short- |
|
| term
revival as well as the long-term capacity utilization of our cement industry.
Among specific factors, the |
|
| gas
tariff for the cement industry has been disproportionately increased to the
detriment of the cement units |
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| operating
upon gas. |
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|
| We
are pleased that your management is in constant pursuit of measures designed
to deal with the rising |
|
| costs
of fuel-energy. The on-going installation and commissioning of the aforesaid
Coal-Firing System is a |
|
| significant
milestone in our efforts to reduce our consumption of fuel and lower the
direct costs of energy. |
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| The
I.S.O 9002 Certification of Dandot Cement Company Limited is being undertaken
to ensure that your |
|
| Company
remains at the forefront of quality and technology. |
|
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| The
Company plans to revalue the Company's fixed assets in accordance with the
corporate rules and |
|
| regulations. |
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| ACKNOWLEDGMENT |
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| The
Board of Directors appreciates the efforts and devotion of the labour and the
entire team of management |
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| and
anticipates that they will contribute for the enhancement of the productivity
and well being of the Company |
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| in
future with greater zeal and spirit. |
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|
For and on behalf of the Board |
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|
A. SHOEB PIRACHA |
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| Lahore:
November 30, 2001 |
|
CHIEF EXECUTIVE |
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|
|
| Auditor's
Report to the Members |
|
|
| We
have audited the annexed balance sheet of DANDOT CEMENT
COMPANY LIMITED as at June |
|
| 30,
2001 and the related profit and loss account, cash flow statement and
statement of changes in equity |
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| together
with the notes forming pad thereof, for the year then ended and we state that
we have obtained all |
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| 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 included
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; |
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|
|
|
|
|
| b)
in our opinion: |
|
|
|
|
| (i)
the balance sheet and profit and loss account together with the notes thereon
have |
|
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| 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; |
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|
|
|
|
|
| (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, investment 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 |
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| 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 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, 2001, and of the Loss for the year
then ended; and |
|
|
|
|
| (d)
In our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
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| Without
qualifying our opinion, we draw attention to the net after tax loss for the
year of Rs. 264.281 |
|
| million
incurred by the Company. Its accumulated losses are of Rs. 1,355.230 million
resulted in net capital |
|
| deficiency
of Rs. 1,045.029 million. Its current liabilities exceeded its current assets
by Rs. 571.600 million. The |
|
| going
concern assumption used in the preparation of these accounts is based on
matters referred in note 1. |
|
|
| Karachi: |
|
|
RAHIM IQBAL RAFIQ & COMPANY |
|
| Dated:
December 1,2001 |
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at June 30, 2001 |
|
|
|
|
|
2001 |
2000 |
|
| CAPITAL
AND LIABILITIES |
|
NOTE |
RUPEES |
RUPEES |
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorized
capital |
|
| 50,000,000
ordinary shares |
|
| of Rs. 10/- each |
|
|
500,000,000 |
500,000,000 |
|
|
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid up capital |
3 |
278,399,800 |
262,500,000 |
|
| Share
deposit money |
|
4 |
-- |
47,700,540 |
|
| Share
premium reserve |
|
|
31,800,740 |
-- |
|
| Accumulated
loss |
|
|
(1,355,230,285) |
(1,090,948,884) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(1,045,029,745) |
(780,748,344) |
|
| LONG
TERM LOANS AND LIABILITIES |
5 |
530,387,199 |
452,895,592 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
|
| TO
FINANCE LEASE |
|
6 |
206,483,917 |
180,767,098 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
7 |
125,302,642 |
72,939,315 |
|
| LONG
TERM ADVANCES AND DEPOSITS |
8 |
5,163,227 |
6,656,177 |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
maturity of long term liabilities |
9 |
69,401,165 |
51,734,609 |
|
| Short
term bank borrowing |
|
10 |
285,244,087 |
-- |
|
| Creditors,
accrued and other liabilities |
11 |
424,941,359 |
713,879,155 |
|
| Unclaimed
dividend |
|
|
782,699 |
782,699 |
|
| Taxation |
|
|
10,303,429 |
7,060,945 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
790,672,739 |
773,457,408 |
|
| Contingencies
and Commitments |
|
12 |
------------------ |
------------------ |
|
|
|
|
612,979,979 |
705,967,246 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
A. SHOEB PIRACHA |
|
|
|
CHIEF EXECUTIVE |
|
|
| PROPERTYAND
ASSETS |
|
|
|
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
|
|
| Operating
fixed assets |
|
13 |
372,970,827 |
417,904,452 |
|
| Capital
work in progress |
|
14 |
66,453 |
41,450 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
373,037,280 |
417,945,902 |
|
| LONG
TERM LOANS AND DEPOSITS |
15 |
12,530,293 |
16,841,148 |
|
| DEFERRED
COST |
|
16 |
8,339,942 |
-- |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
17 |
88,522,448 |
77,493,897 |
|
| Stock in trade |
|
18 |
57,067,183 |
79,551,000 |
|
| Trade debtors |
|
19 |
5,007,420 |
4,285,120 |
|
| Advances,
deposits, prepayments and |
|
|
| other
receivables |
|
20 |
57,679,377 |
105,177,360 |
|
| Cash
and bank balances |
|
21 |
10,796,036 |
4,672,819 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
219,072,464 |
271,180,196 |
|
|
|
|
------------------ |
------------------ |
|
|
612,979,979 |
705,967,246 |
|
|
|
========== |
========== |
|
|
|
|
FAROOQ ZAMAN |
|
|
|
DIRECTOR |
|
|
|
| Profit
& Loss Account for the Year Ended June 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
| SALES (Net) |
|
22 |
610,497,634 |
102,573,300 |
|
| COST
OF SALES |
|
23 |
638,192,472 |
163,962,710 |
|
|
|
|
------------------ |
------------------ |
|
| GROSS LOSS |
|
|
(27,694,838 |
(61,389,410) |
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| Administration
and general |
|
24 |
16,863,300 |
7,798,359 |
|
| Selling
and distribution |
|
25 |
4,375,195 |
2,096,037 |
|
| Financial |
|
|
143,142,732 |
96,247,553 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(164,381,227) |
(106,141,949) |
|
|
------------------ |
------------------ |
|
| OPERATING
LOSS |
|
(192,076,065) |
(167,531,359) |
|
| Provision
against doubtful advances |
|
(18,248,968) |
-- |
|
| Abnormal Loss |
|
|
(3,080,387) |
-- |
|
| Other
income / (loss) |
|
672,503 |
(18,904,189) |
|
|
|
------------------ |
------------------ |
|
| LOSS
BEFORE TAXATION |
|
(212,732,917) |
(186,435,548) |
|
|
|
|
|
| TAXATION |
|
|
28 |
|
| - Current |
|
|
|
3,242,484 |
512,867 |
|
| -
Deferred - Current |
|
|
(2,508,000) |
-- |
|
| - Prior |
|
|
50,814,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(51,548,484) |
(512,867) |
|
|
|
|
------------------ |
------------------ |
|
| NET
LOSS AFTER TAXATION |
|
|
(264,281,401) |
(186,948,415) |
|
| Accumulated
loss brought forward |
|
(1,090,948,884) |
(904,000,469) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
loss carried to balance sheet |
|
(1,355,230,285) |
(1,090,948,884) |
|
|
|
|
========== |
========== |
|
| Loss
per share - Basic |
|
29 |
(9.63) |
(7.12) |
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
A. SHOEB PIRACHA |
|
FAROOQ ZAMAN |
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| Cash
Flow Statement for the Year Ended June 30, 2001 |
|
|
|
|
2001 |
2000 |
|
