| Essa Cement Industries Limited |
|
|
|
|
|
|
|
|
| Annual
Report 2001 |
|
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|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors'
Report to the Members |
|
| Financial
Highlights |
|
| Pattern
of Share Holding |
|
| Auditors'
Report to the Members |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| MR.
ABDUL AZIZ ESSA |
CHAIRMAN & CHIEF
EXECUTIVE |
|
| MRS.
HUMERA ESSA |
|
| HAJI
YOUNUS DADA |
|
| MRS.
ZAITOON HAMZA DADA |
|
| MRS.
SAZINA JAWED ESSA |
|
| MR.
IRFAN AZIZ ESSA |
|
| MR.
ZAFARUDDIN SIDDIQUI |
|
|
| COMPANY
SECRETARY |
|
| MR.
ABDUL HAMEED |
|
|
| AUDITORS |
|
| F.R.
MERCHANT & CO. |
|
| CHARTERED
ACCOUNTANTS |
|
|
| BANKERS |
|
| HABIB
BANK LIMITED |
|
| NATIONAL
BANK OF PAKISTAN |
|
| MUSLIM
COMMERCIAL BANK LIMITED |
|
| STANDARD
CHARTERED GRINDLAYS BANK LIMITED |
|
| ALLIED
BANK OF PAKISTAN LIMITED |
|
| BOLAN
BANK LIMITED |
|
| SONERI
BANK LIMITED |
|
| BANK
AL HABIB LIMITED |
|
| FAYSAL
BANK LIMITED |
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| THE
BANK OF PUNJAB |
|
|
| REGISTERED
OFFICE |
|
| FL-2/1,
BLOCK-6, |
|
| GULSHAN-E-IQBAL, |
|
| KARACHI
- 75300 |
|
|
| FACTORY |
|
| DEH
KALO KOHAR |
|
| NOORIABAD
INDUSTRIAL AREA, |
|
| DISTRICT
DADU, (SINDH) |
|
|
|
| NOTICE
OF MEETING |
|
|
| NOTICE
IS HEREBY GIVEN that Annual General Meeting of the Company will be held on
Monday, |
|
| December
31, 2001 at 12.00 noon at the Registered Office of the Company at FL - 2/1,
Block-6, |
|
| Gulshan-e-Iqbal,
Karachi, to transact the following business: |
|
|
| 1)
To confirm the minutes of the last Extra-Ordinary General Meeting. |
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|
|
|
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| 2)
To receive and consider the Audited Accounts of the company for the year
ended June 30, |
|
| 2001,
with the Directors' and the Auditors' Reports thereon. |
|
|
|
| 3)
To appoint auditors for the year 2001-2002 and to fix their remuneration. |
|
|
| 4)
To transact any other business with the permission of the Chairman. |
|
|
|
|
By Order of the Board |
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|
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|
|
ABDUL HAMEED |
|
| KARACHI:
December 01, 2001 |
|
Secretary |
|
|
| NOTES: |
|
|
| 1)
The Share Transfer Books of the Company will remain closed from December 22,
2001 to |
|
| December
31, 2001 (both days inclusive). |
|
|
|
| 2)
A member entitled to attend and vote at the Annual General Meeting may
appoint another |
|
| member
as the proxy to attend and vote on his/her behalf. Proxies must be duly
filled, signed and |
|
| deposited
at the Registered Office of the Company not less than 48 hours before the
time of the |
|
| meeting, |
|
|
| 3)
Shareholders are requested to promptly notify the Company of any change in
their addresses, if |
|
| any. |
|
|
|
|
|
| DIRECTORS'
REPORT TO THE MEMBERS |
|
|
| Your
directors are pleased to place before you the annual report alongwith audited
accounts and |
|
| auditors'
report thereon for the financial year ended June 30, 2001. |
|
|
| PRODUCTION: |
|
| Due
to slow economic growth in the country, the Cement Industry suffered the
most. During the year |
|
| under
review, we had to adjust production capacity in line with market demand as
such the plant |
|
| capacity
was not operated fully. Inspite of general slow down, we have around 4%
increase in the |
|
| production
comparing with last year. The production of Clinker and Cement for he period
are given as |
|
| under: |
|
|
|
|
2000-2001 |
1999-2000 |
|
|
|
|
M. Tons |
M. Tons |
|
|
| Clinker |
|
|
251,153 |
240,860 |
|
| Cement |
|
|
268,780 |
259,850 |
|
|
|
|
| SALES
& MARKETING: |
|
| The
company was able to sell 268, 121 m.tons of cement during the year ended 30th
June, 2001 as |
|
| against
262,766 m. tons sold during the preceding year registering an increase of 2%,
The company had |
|
| to
make frequent adjustments in the prices due to cut throat competition in the
market so as to be able |
|
| to
sell almost entire quantity of cement produced. |
|
|
| The
net sales revenue in the year under review has increased to Rs. 622.170
million as compared to Rs. |
|
| 573.483
million during the preceding year. |
|
|
| FINANCIAL
RESULTS: |
|
| As
shown in the annexed profit and loss accounts, the company earned an
operating profit of Rs. 63.767 |
|
| million
as compared to Rs. 63.068 million earned last year. Net profit for the year
after provision for |
|
| taxation
comes to Rs. 7.057 million. |
|
|
| FUTURE
PROSPECTS: |
|
| To
decrease the cost of production and to remain in Market Competition, we have
started replacing |
|
| Furnace
Oil with Coal. The trial process was done during May-June 2001. From July
2001, we have been |
|
| able
to replace Furnace Oil by Coal from 40% to 50% by utilizing Local Lakra High
Sulphur Coal. To |
|
| increase
further consumption of Coal, we will need Low Sulphur Coal, for this we are
planning to blend |
|
| Local
Coal with Imported Low Sulphur Coal and for this conversion, all equipments
are arranged/ |
|
| fabricated
locally. We hope the economic activities in Pakistan will pick up after
Afghanistan War and |
|
| demand
will increase and we will be able to produce/sell of Cement to the full
capacity. |
|
|
| PATTERN
OF SHAREHOLDING: |
|
| The
Shareholding Pattern of the company as on June 30, 2001 is included in the
Annual Report. |
|
|
| DEBT
SERVICING: |
|
| You
were informed last year that due to financial constraints, we approached
Overseas Credit & |
|
| Investment
Co. Ltd. for restructuring of loan. We hope this will be done during the year
2001-2002. |
|
|
| AUDITORS: |
|
| The
present Auditors M/s. F.R. Merchant & Co., Chartered Accountants, retire
and being eligible offer |
|
| themselves
for reappointment as Auditors of the Company for the year 2001-2002. |
|
|
| ACKNOWLEDGEMENT: |
|
| The
Board express its thanks for the valuable services, loyalty and commendable
efforts rendered by the |
|
| executives,
staff members and workers of the Company, during the year under review, and
wish to place |
|
| on
record its appreciation for the same. |
|
|
|
|
For and on behalf of the Board |
|
|
|
|
|
|
|
|
|
ABDUL AZIZ ESSA |
|
| KARACHI:
December 01, 2001 |
|
Chairman/Chief Executive |
|
|
|
| FINANCIAL
HIGHLIGHTS |
|
|
|
|
|
(Figures in Thousand) |
|
|
|
2001 |
2000 |
1999 |
1998 |
1997 |
1996 |
|
|
|
|
|
| NET SALES |
|
622,170 |
573,483 |
377,904 |
172,571 |
270,954 |
300,613 |
|
|
|
|
| RESULT |
|
|
|
|
| PROFIT
BEFORE TAX |
10,257 |
9,086 |
50,920 |
(10,143) |
11,918 |
41,614 |
|
| PROFIT
AFTER TAX |
7,057 |
6,086 |
48,920 |
(11,043) |
16,267 |
29,015 |
|
| NET
RETURN OF TURNOVER % |
1.13 |
1.06 |
12.94 |
(6.40) |
6.00 |
9.65 |
|
| CURRENT
ASSETS |
182,444 |
203,407 |
281,339 |
229,423 |
188,831 |
184,302 |
|
| CURRENT
LIABILITIES |
174,730 |
184,021 |
281,336 |
254,363 |
171,174 |
127,282 |
|
|
|
|
| CURRING
RATIO |
|
| ASSETS:
LIABILITIES |
1.04: 1 |
1.11.:1 |
1.00: 1 |
0.90: 1 |
1.10:1 |
1.45:1 |
|
| DISTRIBUTABLE
RESERVES |
201,083 |
194,026 |
222,570 |
173,650 |
216,175 |
228,528 |
|
| SHAREHOLDERS
EQUITY |
582,010 |
574,953 |
568,867 |
519,948 |
530,991 |
514,724 |
|
| NUMBER
OF SHARES |
38,093 |
38,093 |
34,630 |
34,630 |
31,482 |
28,620 |
|
| EARNING
PER SHARE |
|
| OF
RS. 10 EACH |
0.19 |
0.16 |
1.41 |
(0.32) |
0.52 |
1.01 |
|
|
| BREAK-UP
VALUE |
|
| PER SHARE |
RS. |
15.28 |
15.09 |
16.43 |
15.01 |
16.87 |
17.98 |
|
|
|
| PATTERN
OF SHAREHOLDINGS |
|
| AS
AT 30th JUNE 2001 |
|
|
| SHARE |
|
SHAREHOLDERS |
TOTAL |
|
| HOLDINGS |
|
|
|
SHARES HELD |
|
|
| FROM |
1 |
TO |
100 |
291 |
9,148 |
|
| FROM |
101 |
TO |
500 |
446 |
103,481 |
|
| FROM |
501 |
TO |
1000 |
194 |
131,134 |
|
| FROM |
1001 |
TO |
5000 |
492 |
1,122,976 |
|
| FROM |
5001 |
TO |
10000 |
181 |
1,299,778 |
|
| FROM |
10001 |
TO |
15000 |
270 |
2,905,858 |
|
| FROM |
15001 |
TO |
20000 |
53 |
889,176 |
|
| FROM |
20001 |
TO |
25000 |
320 |
7,024,056 |
|
| FROM |
25001 |
TO |
30000 |
153 |
3,999,375 |
|
| FROM |
30001 |
TO |
35000 |
42 |
1,329,888 |
|
| FROM |
35001 |
TO |
45000 |
1 |
43,560 |
|
| FROM |
45001 |
TO |
50000 |
1 |
45,919 |
|
| FROM |
50001 |
TO |
60000 |
1 |
58,685 |
|
| FROM |
60001 |
TO |
75000 |
2 |
126,082 |
|
| FROM |
75001 |
TO |
130000 |
1 |
77,449 |
|
| FROM |
130001 |
TO |
150000 |
1 |
132,002 |
|
| FROM |
150001 |
TO |
160000 |
2 |
306,621 |
|
| FROM |
160001 |
TO |
190000 |
2 |
354,212 |
|
| FROM |
190001 |
TO |
300000 |
1 |
213,155 |
|
| FROM |
300001 |
TO |
500000 |
1 |
370,642 |
|
| FROM |
500001 |
TO |
900000 |
1 |
812,410 |
|
| FROM |
900001 |
TO |
1025000 |
4 |
3,750,273 |
|
| FROM |
1025001 |
TO |
2000000 |
5 |
6,128,719 |
|
| FROM |
2000001 |
TO |
3000000 |
1 |
2,918,213 |
|
| FROM |
3000001 |
TO |
4000000 |
1 |
3,939,893 |
|
|
------------------ |
------------------ |
|
|
2,467 |
38,092,705 |
|
|
========== |
========== |
|
|
| CATEGORIES
OF SHAREHOLDERS |
NUMBER |
SHARES HELD |
PERCENTAGE |
|
|
| FINANCIAL
INSTITUTIONS |
|
10 |
926,735 |
2.43 |
|
| INDIVIDUALS |
|
2,425 |
35,702,500 |
93.73 |
|
| INSURANCE
COMPANY |
|
4 |
485,163 |
1.27 |
|
| INVESTMENT
COMPANY |
|
28 |
978,307 |
2.57 |
|
| JOINT
STOCK COMPANIES |
|
-- |
-- |
-- |
|
| CORPORATE
LAW AUTHORITY |
-- |
-- |
-- |
|
| ADMINISTRATOR
ABANDONED |
-- |
-- |
-- |
|
| PROPERTY |
|
-- |
-- |
-- |
|
| CHARITABLE |
|
-- |
-- |
-- |
|
| OTHERS |
|
-- |
-- |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
2,467 |
38,092,705 |
100 |
|
|
|
========== |
========== |
========== |
|
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of ESSA CEMENT
INDUSTRIES LIMITED as at June 30,2001 |
|
| 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 |
|
| purpose
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 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, 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
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, 2001 and of the
Profit, its cash |
|
| flows
and changes in equity for the year then ended; and |
|
|
| d)
in our opinion, no Zakat was deductible at source under the Zakat & Ushr
Ordinance, 1980. |
|
|
|
|
|
F.R. MERCHANT & CO. |
|
| KARACHI:
December 01, 2001 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2001 |
|
|
|
| SHARE
CAPITAL AND RESERVES |
NOTE |
2001 |
2000 |
|
|
|
| Authorised |
|
| 50,000,000
ordinary shares of Rs, 10/- each |
|
500,000,000 |
500,000,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Issued,
subscribed and paid-up capital |
3 |
380,927,050 |
380,927,050 |
|
| Reserves |
|
4 |
201,082,818 |
194,025,830 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
582,009,868 |
574,952,880 |
|
|
| LONG
TERM LOANS |
|
5 |
702,795,870 |
664,668,174 |
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
|
| SUBJECT
TO FINANCE LEASE |
|
6 |
2,477,714 |
9,778,783 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
7 |
13,660,051 |
10,413,447 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of long term loans |
5 |
299,285,977 |
199,022,894 |
|
| Current
maturity of liabilities against |
|
|
| assets
subject to finance lease |
|
6 |
21,632,039 |
19,841,153 |
|
| Creditors,
accrued and other liabilities |
8 |
153,997,190 |
166,459,303 |
|
| Running
finances under mark-up arrangements |
9 |
11,915,632 |
11,944,152 |
|
| Provision
for taxation |
|
|
8,817,333 |
5,617,333 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
495,648,171 |
402,884,835 |
|
| CONTINGENCIES
AND COMMITMENTS |
10 |
|
|
|
|
------------------ |
------------------ |
|
|
|
Rupees |
1,796,591,674 |
1,662,698,119 |
|
|
|
|
========== |
========== |
|
|
| FIXED
ASSETS - Tangible |
|
|
|
| Operating
Assets |
|
11 |
1,158,128,629 |
1,120,252,068 |
|
| Capital
work-in-progress |
|
12 |
451,878,361 |
334,898,216 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,610,006,990 |
1,455,150,284 |
|
|
| LONG
TERM DEPOSITS |
|
|
4,140,346 |
4,140,346 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
13 |
116,019,200 |
110,492,299 |
|
| Stock-in-trade |
|
14 |
45,375,121 |
66,040,138 |
|
| Trade debts |
|
15 |
3,411,058 |
6,910,750 |
|
| Advances,
deposits, prepayments |
|
|
| and
other receivables |
|
16 |
10,875,374 |
14,716,843 |
|
| Cash
and bank balances |
|
17 |
6,763,586 |
5,247,459 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
182,444,339 |
203,407,489 |
|
|
------------------ |
------------------ |
|
|
Rupees |
1,796,591,674 |
1,662,698,119 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
ABDULAZIZ ESSA |
|
HUMERA ESSA |
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
NOTE |
2001 |
2000 |
|
|
|
|
| Sales - net |
|
18 |
622,170,027 |
573,482,950 |
|
| Cost of sales |
|
19 |
546,487,016 |
498,127,106 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
75,683,011 |
75,355,844 |
|
| Administration
and selling |
|
|
|
| expenses |
|
20 |
11,915,738 |
12,287,196 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
63,767,273 |
63,068,648 |
|
| Other income |
|
21 |
113,569 |
177,900 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
63,880,842 |
63,246,548 |
|
|
|
|
|
| Financial
charges |
|
22 |
53,084,013 |
44,576,909 |
|
| Other charges |
|
23 |
539,841 |
488,191 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
53,623,854 |
45,065,100 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
for the year |
|
|
10,256,988 |
18,181,448 |
|
| Prior
years' adjustments |
|
24 |
-- |
9,095,815 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
10,256,988 |
9,085,633 |
|
| Taxation |
|
25 |
3,200,000 |
3,000,000 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
7,056,988 |
6,085,633 |
|
| Accumulated
profit brought forward |
|
14,025,830 |
7,940,197 |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
profit carried forward |
|
21,082,818 |
14,025,830 |
|
|
|
|
========== |
========== |
|
| Earnings
per share |
|
26 |
0.19 |
0.16 |
|
|
========== |
========== |
|
|
| The
annexed notes form and integral part of these accounts |
|
|
|
ABDULAZIZ ESSA |
|
HUMERA ESSA |
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
|
2001 |
2000 |
|
| Cash
flow from operating activities |
|
| Profit
for the year |
|
|
10,256,988 |
18,181,448 |
|
| Add
/ (less) adjustments for non cash charges |
|
| Depreciation |
|
|
50,722,435 |
49,394,531 |
|
| Provision
for gratuity |
|
|
3,246,604 |
1,317,632 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
64,226,027 |
68,893,611 |
|
|
| Movement
in working capital |
|
| (Increase]/decrease
in current assets |
|
| Stores
and spares |
|
|
(5,526,901) |
(2,298,149) |
|
| Stock-in-trade |
|
|
20,665,017 |
31,928,611 |
|
| Trade debts |
|
|
3,499,692 |
41,114,204 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
|
3,841,469 |
570,468 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
22,479,277 |
71,315,134 |
|
| Increase/(decrease)
in current liabilities |
|
|
|
| Creditors,
accrued and other liabilities |
|
(12,462,113) |
(56,137,025) |
|
| Running
finances under mark-up arrangements |
|
1,285,201 |
(44,178,432) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(12,490,633) |
(100,315,457) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) / from operating activities |
|
74,214,671 |
39,893,288 |
|
|
| Cash
flow from investing activities |
|
| Capital
expenditure |
|
|
(205,579,141) |
(77,284,701) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) / from investing activities |
|
(131,364,470) |
(37,391,413) |
|
|
|
| Cash
flow from financing activities |
|
| Long term loans |
|
|
138,390,779 |
41,015,600 |
|
| Liabilities
subject to finance lease |
|
(5,510,183) |
(10,240,931) |
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) / flow from financing activities |
|
132,880,596 |
30,774,669 |
|
| Net
increase in cash and bank balances |
|
1,516,127 |
(6,616,744) |
|
| Cash
and bank balances at the beginning of the year |
5,247,459 |
