| Kohat Cement Company |
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| Annual
Report 2001 |
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| CONTENTS |
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| Company Profile |
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| Notice
of Meeting |
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| Director's
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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| Pattern
of Shareholding |
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| Company
Profile |
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| Board
of Directors |
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| Chairman |
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Mr. Atta Mohammad Sheikh |
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| Chief
Executive/Director |
Mr. Aizaz Mansoor Sheikh |
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Mr. Nadeem Atta Sheikh |
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Mr. Tariq Atta Sheikh |
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Mr. Nadeem Qadir |
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Mrs. Khalida Asghar |
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Mrs. Khawar Sultana |
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| Company
Secretary |
Mr. Mohammad Hashim Khan |
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| Auditors |
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Viqar A. Khan |
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Chartered Accountants |
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| Legal Advisor |
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Qazi Waheed-ud-Din |
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| Bankers |
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Allied Bank of Pakistan
Limited |
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Askari Commercial Bank
Limited |
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Habib Bank Limited |
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Muslim Commercial Bank
Limited |
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National Bank of Pakistan |
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Prime Commercial Bank
Limited |
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The Bank of Khyber |
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Union Bank Limited |
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| Head Office |
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House No. 64-El/D, |
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Gulberg-III, Lahore. |
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Tel: (042) 575-4358,
575-8649 |
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Fax: (042) 575-4064 |
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E. Mail: kccl@wol.net.pk. |
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| Registered
Office and Works |
Kohat Cement Company
Limited |
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Rawalpindi Road, Kohat. |
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Tel: (0922) 560-401-04 |
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Fax: (0922)560-405 |
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| Share Deptt. |
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AZM Computer Services
(Pvt.) Limited |
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24-Ferozepur Road, |
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Mozang Chungi, Lahore. |
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Tel: (042) 755-2269 |
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Fax: (042) 757-6129 |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 22nd Annual General Meeting of the Shareholders of
Kohat Cement |
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| Company
Limited, will be held at its Registered Office, Rawalpindi Road, Kohat on
Friday, December 21, |
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| 2001
at 11:00 A.M. to transact the following business. |
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| Ordinary
Business |
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| 1.
To confirm the minutes of the Extra Ordinary General Meeting held on June 29,
2001. |
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| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended June 30, |
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| 2001
and Reports of Directors and Auditors thereon. |
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| 3.
To approve final cash dividend @ 20% (Rupees 2 per share) for the year ended
June 30, 2001. |
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| 4.
To appoint Auditors for the year 2001-2002 and to fix their remuneration. The
present Auditors |
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| Viqar
A. Khan, Chartered Accountants, being eligible offer themselves for
re-appointment. |
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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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Mohammad Hashim Khan |
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| Kohat:
November 23, 2001 |
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Company Secretary |
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| Note: |
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| 1.
The register of the members of the Company will be closed from Saturday,
December 15, 2001 to |
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| Friday,
December 21, 2001 (both days inclusive) and no transfer will be registered
during that time. |
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| Shares
transfer deeds received in order at the share department of the
Company-Incharge shares |
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| department,
AZM Computer Services (Pvt.) Limited, 24-Feruzpur Road, Mazang Chungi,
Lahore, at the |
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| close
of business on Friday, December 14, 2001 will be treated in time for
entitlement of payment of |
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| dividend. |
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| 2.
A member entitled to attend, speak and vote at this meeting may appoint
another member as proxy to |
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| attend,
speak and vote on his/her behalf. Proxies in Order to be effective must be
received at |
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| Registered
Office of the Company not later than 48 hours before the meeting. |
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| 3.
Shareholders whose shares are registered in their account/sub-account/group
account with Central |
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| Depository
System (CDS) are requested to bring original NIC along with their account
number in CDS |
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| and
participants' ID number for verification. In case of appointment of proxy by
such account holders, it |
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| must
be accompanied with participants ID number and account / sub-account number
alongwith |
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| attested
photocopies of NIC or the Passport of the beneficial owner. Representatives
of Corporate |
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| members
should bring the usual documents required for such purposes. |
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| 4.
Members should quote their folio number in all correspondence with the
Company and at the time of |
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| attending
the Annual General Meeting. |
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| 5.
The shareholders are requested to notify the company if there is any change
in their address. |
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| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
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| Your
directors have the pleasure in presenting the Audited Accounts for the
financial year ended June 30, 2001. |
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| OPERATING
RESULTS |
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| The
net sales revenue for the year under review is Rs. 835.607 million as against
Rs. 1,021.861 million in the preceding |
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| year.
The profitability of the Company has reduced in the current year due to
instability in the prices of cement. After |
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| accounting
for all charges including depreciation of Rs. 68.938 million (2000: Rs.
74.528 Million) the Company has |
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| earned
a pre-tax profit of Rs. 74.565 million compared to Rs. 249.179 million last
year. |
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| Your
company endeavors to give a fair return to the shareholders. Following this
policy, the Directors have recommended |
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| a
final cash dividend @ 20% (2000: @ 27.5%). Appropriation of available profit
is as under: |
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Rupees in
Thousand |
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2001 |
2000 |
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| Profit/(Loss)
before taxation |
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74,565 |
249,179 |
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| Taxation |
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| Current |
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|
24,383 |
25,181 |
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| Prior |
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-- |
932 |
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| Deferred |
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(5,023) |
72,500 |
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------------------ |
------------------ |
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19,360 |
98,613 |
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------------------ |
------------------ |
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| Profit/(Loss)
after taxation |
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55,205 |
150,566 |
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| Un-appropriated
profit brought forward. |
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93,179 |
2,929 |
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------------------ |
------------------ |
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| Profit
available for appropriation |
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148,384 |
153,495 |
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| APPROPRIATION: |
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| Interim
Cash Dividend @ Nil (2000 @ 7.50%) |
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-- |
16,450 |
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| Final
Cash Dividend @ 20% (2000 @ 20%) |
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43,867 |
43,867 |
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------------------ |
------------------ |
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43,867 |
60,317 |
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------------------ |
------------------ |
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| Carried
Forward to Balance Sheet |
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104,517 |
93,179 |
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------------------ |
------------------ |
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| PRODUCTION
AND SALES |
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| Comparative
figures for production of Clinker and Cement are as under: |
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2000-01 |
1999-00 |
(Decrease) |
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|
(Tonnes) |
(Tonnes) |
(Tonnes) |
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| Clinker
Production |
|
290,804 |
347,328 |
(56,524) |
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| Cement
Production |
|
325,672 |
374,274 |
(48,602) |
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| Capacity
utilization has only been 57.44% due to depressed |
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| market
conditions and overall excess cement production |
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| capacity
in the country. |
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| The
Company sold 331,987 metric tonnes of cement as against |
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| 374,036
metric tonnes in the previous year, registering a |
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| negative
growth of 11.24% in the sales volume. Sales during |
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| the
year were relatively less as compared to those companies |
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| who
enjoyed exemption from levy of 15% Sales Tax upto |
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| June
30, 2001. The market has remained highly competitive |
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| throughout
the year with a downward pressure on prices resulting |
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| in
lower capacity utilization for the industry as a whole. |
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| MARKET
REVIEW |
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| Cement
industry has continuously been under pressure due to weak economic conditions
and inconsistent financial |
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| policies
of the Government. Constant increase in the prices of inputs especially
electricity and furnace oil has increased |
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| the
cost of production by Rs. 224 per tonne. Fall in the value of Pak Rupee has
substantially increased the cost of |
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| imported
capital inputs like spare parts, refractory bricks, grinding media,
lubricants etc. |
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| An
additional factor constantly pushing up the conversion cost is across the
board wage increase every two years by |
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| way
of a peace agreement, thrust upon the Company without any relation to Labour
efficiency due to exorbitant demands |
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| of
C.B.A. Labour Union. In addition the Company is forced down its throat the
bitter dozes of periodic increases under the |
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| Cost
of Living (Relief) Act, 1973. Any attempt by the Company to pass on these
increases to the consumers would have |
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| further
jeopardized the sales volume. As such most of the increase in costs was
absorbed by the Company resulting in |
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| lower profits. |
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| FUTURE
PROSPECTS |
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| Future
prospects of your Company depend to a large extent on the revival of the
economy and adoption of long-term |
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| stable
fiscal policies by the Government. The present structure of fiscal levies
i.e. Excise Duty of Rs. 1,000 per tonne & |
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| Sales
Tax @ 15% on the cement industry is the highest in the World. High incidence
of taxes on electricity and furnace |
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| oil
makes production of cement in Pakistan one of the most expensive in the World
which has a dampening effect on the |
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| construction
industry in Pakistan. |
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| Coal
Firing: To cut down on production cost due to ever
increasing price of furnace oil which is a major element of cost, |
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| the
use of indigenous coal was started for which a very basic Coal Firing
mechanism has initially been put in operation. |
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| Letters
of Credit for import of Coal Firing machinery and equipment have been
established. |
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| The
events, which took place in the USA on Sep. 11, 2001 are already having a
depressive impact on the world economy. |
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| Business
environment in Pakistan is also being affected. God willing, we hope the
country will emerge from this crisis soon. |
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| Your
Company intends to continue its ongoing BMR plans but will exercise due
caution in the current volatile business |
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| environment. |
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| DEBT
OBLIGATION |
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| The
Company continues to meet its financial obligations. The debt outstanding, as
at June 30, 2001 is only of Rs. 27.00 |
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| million,
which is one of the lowest in the cement sector. |
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| PATTERN
OF SHAREHOLDINGS |
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| The
pattern of Shareholding of the Company as at June 30, 2001 is annexed with
the Annual Report. |
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| COMPANY
AUDITORS |
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| The
Auditors Viqar A. Khan, Chartered Accountants, retires at the conclusion of
the annual general meeting. Being |
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| eligible,
they have offered themselves for re-appointment. |
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| MANAGEMENT
EMPLOYEES RELATIONS |
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| The
Board would like to record its appreciation for the valuable contribution
made by all its employees. |
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| The
management is quite confident that these cordial relations and cooperation
will continue in the years to come. |
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|
AIZAZ MANSOOR SHEIKH |
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|
Chief Executive |
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| YEARWISE
STATISTICAL SUMMARY |
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|
(Rs. in Million) |
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|
2001 |
2000 |
1999 |
1998 |
1997 |
1996 |
1995 |
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| ASSETS
EMPLOYED |
|
| Fixed assets |
|
609 |
662 |
715 |
789 |
862 |
805 |
346 |
|
| Investment
and Long Term |
|
| Advances
and Deposits |
4 |
4 |
24 |
37 |
39 |
40 |
27 |
|
| Current Assets |
|
204 |
209 |
223 |
219 |
209 |
273 |
604 |
|
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|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
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| Total
Assets Employed |
817 |
875 |
961 |
1045 |
1111 |
1119 |
977 |
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------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
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| FINANCED BY |
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| Shareholders
Equity |
486 |
475 |
384 |
406 |
408 |
449 |
453 |
|
| Long
Term Liabilities |
6 |
18 |
140 |
160 |
326 |
303 |
306 |
|
| Deferred
Liabilities |
112 |
117 |
44 |
12 |
11 |
11 |
11 |
|
| Current
Liabilities |
213 |
266 |
393 |
469 |
365 |
356 |
207 |
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------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
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| Total
Funds Invested |
817 |
875 |
961 |
1045 |
1111 |
1119 |
977 |
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------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
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| TURNOVERAND
PROFIT |
|
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|
| Turnover (Net) |
836 |
1,022 |
733 |
748 |
501 |
953 |
342 |
|
| Operating Profit |
|
95 |
304 |
115 |
57 |
45 |
116 |
71 |
|
| Profit/(Loss)
Before Taxation |
75 |
249 |
58 |
(1) |
(38) |
47 |
67 |
|
| Profit/(Loss)
After Taxation |
55 |
151 |
23 |
(3) |
(41) |
46 |
39 |
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| Cash Dividend |
|
44 |
60 |
44 |
-- |
-- |
50 |
-- |
|
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| Profit c/f |
|
105 |
93 |
3 |
17 |
20 |
61 |
65 |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of KOHAT CEMENT
COMPANY LIMITED |
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| as
at June 30, 2001 and the related profit and loss account, cash flow statement
and statement of changes |
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| in
equity together with the notes forming part thereof, for the year then ended
and we state that we have |
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| obtained
all the information and explanations which, to the best of our knowledge and
belief, were necessary |
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| for
the purposes of our audit. |
|
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| It
is the responsibility of the company's management to establish and maintain a
system of internal control, |
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| 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 |
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| 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 |
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| 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 |
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| Companies
Ordinance, 1984; |
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|
|
|
|
| b)
in our opinion: |
|
|
|
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| i)
the balance sheet and profit and loss account together with the notes
thereon, have been drawn |
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| up
in conformity with the Companies Ordinance, 1984, and are in agreement with
the books of |
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| 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, investments made and the expenditure incurred during
the year were |
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| in
accordance with the objects of the company; |
|
|
|
| c)
in our opinion and to the best of our information and according to the
explanations give to us, the |
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| balance
sheet, profit and loss account, cash flow statement and statement of changes
in equity |
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| together
with the notes forming part thereof conform with the approved accounting
standards as |
|
| applicable
in Pakistan and, give the information required and 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 Zakat deductible at source under the Zakat and Ushr
Ordinance,1980 (XVIII of 1980) |
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| was
deducted by the company and deposited in the Central Zakat Fund established
under Section 7 |
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| of
that Ordinance. |
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|
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| Lahore
November 07, 2001 |
|
CHARTERED ACCOUNTANTS |
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|
|
| BALANCE
SHEETAS AT JUNE 30, 2001 |
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|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
| CAPITAL
AND LIABILITIES |
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
share capital |
|
| 50,000,000
(2000: 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
(2000: 21,933,334) ordinary |
|
| shares
of Rs. 10 each |
|
4 |
219,333,340 |
219,333,340 |
|
| Reserves |
|
5 |
162,120,028 |
162,120,028 |
|
| Unappropriated
profit |
|
|
104,517,405 |
93,178,739 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
485,970,773 |
474,632,107 |
|
|
|
|
|
|
| REDEEMABLE
CAPITAL |
|
6 |
-- |
-- |
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT TO |
|
| FINANCE
LEASE |
|
7 |
4,006,641 |
15,057,509 |
|
|
|
| DEFERRED
LIABILITIES |
|
8 |
111,828,496 |
116,594,780 |
|
| LONG
TERM SECURITY DEPOSITS |
9 |
2,354,850 |
2,806,160 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term finances |
|
10 |
10,922,808 |
69,321,124 |
|
| Current
portion of long term liabilities |
11 |
11,995,445 |
33,756,486 |
|
| Creditors,
accruals and other payables |
12 |
91,779,565 |
89,420,083 |
|
| Provision
for taxation |
|
|
53,228,442 |
28,845,466 |
|
| Dividends |
|
13 |
44,712,721 |
44,541,761 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
212,638,981 |
265,884,920 |
|
| CONTINGENCIES
AND COMMITMENTS |
14 |
-- |
-- |
|
|
------------------ |
------------------ |
|
|
|
|
816,799,741 |
874,975,476 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral pad of these accounts |
|
|
|
|
CHIEF EXECUTIVE |
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
|
| Operating
fixed assets- tangible |
|
15 |
606,457,856 |
659,797,694 |
|
| Capital
work-in-progress |
|
16 |
2,285,462 |
2,100,706 |
|
|
|
|
608,743,318 |
661,898,400 |
|
|
|
|
|
| LONG
TERM LOANS TO EMPLOYEES |
17 |
2,602,598 |
2,716,546 |
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
18 |
977,030 |
926,030 |
|
|
|
|
|
| CURRENTASSETS |
|
|
|
| Stores,
spares and loose tools |
|
19 |
88,309,024 |
51,434,353 |
|
| Stock in trade |
|
20 |
18,977,696 |
50,515,942 |
|
| Trade debtors |
|
21 |
13,148,085 |
28,921,924 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
22 |
34,200,990 |
35,195,185 |
|
| Cash
and bank balances |
|
23 |
49,841,000 |
43,367,096 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
204,476,795 |
209,434,500 |
|
|
|
|
------------------ |
------------------ |
|
|
816,799,741 |
874,975,476 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts |
|
|
|
|
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| SALES |
|
24 |
835,607,451 |
1,021,861,290 |
|
| COST
OF GOODS SOLD |
|
25 |
693,787,373 |
689,815,805 |
|
|
|
|
------------------ |
------------------ |
|
| GROSS
PROFIT |
|
|
141,820,078 |
332,045,485 |
|
|
|
|
|
|
|
|
|
| ADMINISTRATIVE
AND GENERAL EXPENSES |
26 |
37,185,202 |
17,329,717 |
|
| SELLING
EXPENSES |
|
27 |
9,990,624 |
10,780,737 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
47,175,826 |
28,110,454 |
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT |
|
|
94,644,252 |
303,935,031 |
|
|
|
|
|
| OTHER
INCOME |
|
28 |
1,379,038 |
1,442,543 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
96,023,290 |
305,377,574 |
|
|
|
|
|
| FINANCIAL
AND OTHER CHARGES |
29 |
21,457,746 |
56,198,175 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
|
74,565,544 |
249,179,399 |
|
| TAXATION |
|
30 |
19,360,210 |
98,612,894 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
AFTER TAXATION |
|
|
55,205,334 |
150,566,505 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
93,178,739 |
2,928,902 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
AVAILABLE FOR APPROPRIATION |
|
148,384,073 |
153,495,407 |
|
|
|
|
|
|
|
|
| APPROPRIATION |
|
|
| Dividends |
|
| Interim
dividend @ NIL (2000: 7.5%) |
|
-- |
16,450,000 |
|
| Proposed
final dividend @ 20% (2000: 20%) |
|
43,866,668 |
43,866,668 |
|
|
|
------------------ |
------------------ |
|
|
|
43,866,668 |
60,316,668 |
|
|
|
------------------ |
------------------ |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
104,517,405 |
93,178,739 |
|
|
|
|
========== |
========== |
|
