| Mustehkam Cement Limited |
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| Annual
Report 2001 |
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| CONTENTS |
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| Board
of Directors |
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| Notice
of Annual General Meeting |
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| Directors'
Report to the Shareholders, |
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| Pattern
of Holding of Shares |
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| Auditors'
Report to the Members |
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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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|
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| BOARD
OF DIRECTORS |
ZAHID HUSSAIN |
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Chairman |
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MUHAMMAD RIAZ KHAN |
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Chief Executive |
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S.M.FAKHIR HASAN |
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ABDUL GHAFFAR SOOMRO |
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MUHAMMAD ILYAS DAR |
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ABDULBARIKHAN |
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SHAHID ANWAR |
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| SECRETARY |
|
MUHAMMAD TABREZ BAIG |
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| AUDITORS |
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Sidat Hyder Qamar &
co.. |
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|
Chartered Accountants, |
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|
3rd Floor Eagle Plaza,
75-West, |
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|
Fazal-e-Haq Road, |
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|
Blue Area, Islamabad. |
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| BANKERS |
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Habib Bank Limited. |
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National Bank of
Pakistan. |
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| REGISTERED
OFFICE |
345-Bazar Road, |
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Westridge, |
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Rawalpindi Cantt. |
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| FACTORY |
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HATTAR, |
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Distt. Haripur. |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the Annual General Meeting of Shareholders of |
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| Mustehkam
Cement Limited will be held at Flashman's Hotel, The Mall, |
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| Rawalpindi
Cantt. on Saturday the 29th December 2001, at 10.00 A.M for the |
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| purpose
of transacting the following business:- |
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| 1-
To confirm the minutes of previous Annual General Meeting. |
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| 2-
To receive and adopt the audited accounts of the Company for the |
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| period
ended June 30, 2001 together with the reports of directors and |
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| auditors
thereon. |
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| 3-
To appoint auditors and fix their remuneration. |
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| 4-
To transact any other ordinary business of the Company with the |
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| permission
of the Chair. |
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| The
share transfer books of the Company will remain closed from 21st December, |
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| 2001
to 27th December, 2001 (both days inclusive). |
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|
By Order of the Board |
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| Rawalpindi |
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|
Muhammad Tabrez Baig |
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| Dated:-
6th December, 2001. |
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Secretary |
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| Notes:- |
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| l-
A member entitled to attend and vote at this meeting is entitled to appoint |
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| another
member as his/her proxy to attend and vote instead of him/her. |
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| Proxies,
in order to be effective, must be received at the registered office of |
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| the
Company not less than 48 hours before the time appointed for the |
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| meeting. |
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| 2-
Shareholders are requested to immediately notify the Company of any |
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| change
in their address. |
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| 3-Shareholders
are further requested to quote their folio number in all |
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| correspondence
with the Company and at the time of attending the Annual |
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| General
Meeting: |
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| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
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| 1.
The Directors of your company take pleasure in placing before you the 47th
annual |
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| report
together with the audited accounts and the auditors' report thereon for the |
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| year
ended 30th June 2001. |
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| FINANCIAL |
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| 2.
The financial results of the company for the year are summarized as under:- |
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|
(Rupees in million) |
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| Net
loss before tax |
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|
139.326 |
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| Balance
brought forward |
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|
760.016 |
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|
|
------------------ |
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| Loss
before taxation and appropriation |
|
899.342 |
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|
|
------------------ |
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| Less:
provision for taxation - current |
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0.571 |
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|
- prior years |
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(3.760) |
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|
- deferred |
|
-- |
|
|
------------------ |
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|
(3.189) |
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|
------------------ |
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| Net loss after tax |
|
896.153 |
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|
========== |
|
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| 3.
During the year, the company was unable to generate funds of its own because |
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| there
was no production and marketing activity. Consequently the company could |
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| not
arrange repayment to SCCP of Rs. 132.114 million against local currency |
|
| loan,
Rs. 52.335 million against loan for BMR and Rs. 285.203 million on account |
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| of
interest accrued thereon. Instead SCCP had to give further loan of Rs.41.508 |
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| million
during the year for repayment of running finance facility of Rs. 27.203 |
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| million
and meeting with other cash requirements of the company. The company |
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| sustained
loss per share of Rs. 11 during the year under report. The Directors |
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| endorse
the auditors' report to the members on the accounts of the company. |
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| DIRECTORS |
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| 4.
Since the Fast Annual General Meeting, Mr. Muhammad Nawaz Tiwana, |
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| Khawaja
Saqib Naim and Mr. Muhammad Arshad Saeed relinquished the |
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| charge
to act as Directors and Mr. Zahid Hussain. Mr. Muhammad Riaz Khan |
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| and
Mr. Abdul Bari Khan were appointed Directors in their place. |
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| AUDITORS |
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| 5.
The auditors Sidat Hyder Qamar and Co, Chartered Accountants retire and, |
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| being
eligible, offer their services for reappointment. |
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|
For and on behalf of the |
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|
|
|
Board of Directors |
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| Rawalpindi |
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|
MUHAMMAD RIAZ KHAN |
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| Dated:
30th November, 2001 |
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|
CHIEF EXECUTIVE |
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|
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| PATTERN
OF HOLDING OF SHARES |
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| AS
ON JUNE 30, 2001 |
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|
| No. of |
Share
Holding |
Total shares |
|
| Shareholders |
From |
To |
held |
|
|
| 3771 |
1 |
100 |
81933 |
|
| 698 |
101 |
500 |
141022 |
|
| 97 |
501 |
1000 |
69322 |
|
| 81 |
1001 |
5000 |
149348 |
|
| 13 |
5001 |
10000 |
83611 |
|
| 1 |
10001 |
15000 |
13566 |
|
| 1 |
15001 |
20000 |
20000 |
|
| 1 |
20001 |
25000 |
21933 |
|
| 1 |
30001 |
35000 |
34905 |
|
| 1 |
60001 |
65000 |
60200 |
|
| 1 |
1135001 |
1E+06 |
1136226 |
|
| 1 |
10505001 |
1E+07 |
1.1E+07 |
|
| ------------------ |
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|
------------------ |
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| 4667 |
|
1.20E+07 |
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| ========== |
|
========== |
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|
| CATEGORIES
OF SHAREHOLDERS |
|
| AS
ON JUNE 30, 2001 |
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|
|
| No.
of Shareholders |
|
|
|
Shares held Percentage |
|
|
| Individuals |
|
4,485 |
510,407 |
4.15 |
|
| Investment
Companies |
|
4 |
38,590 |
0.31 |
|
| Insurance
Companies |
|
4 |
20,876 |
0.17 |
|
| Joint
Stock Companies |
|
5 |
79,833 |
0.65 |
|
| Financial
Institutions |
|
8 |
1,156,035 |
9.38 |
|
| Stale
Cement Corporation of |
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|
|
| Pakistan
(Pvt.) Limited |
|
1 |
10,507,934 |
85.29 |
|
| Deputy
Administrator Abandoned |
|
|
| Properties
(Bangladesh Citizens) |
|
159 |
6,324 |
0.05 |
|
| Securities
& Exchange Commission of Pakistan |
1 |
1 |
-- |
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|
------------------ |
------------------ |
------------------ |
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|
|
4,667 |
12,320,000 |
100% |
|
|
========== |
========== |
========== |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of MUSTEHKAM CEMENT
LIMITED |
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| as
at 30 JUNE, 2001 and the related profit and loss account for the year then
ended |
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| and
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 |
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| the
information and explanations which, to the best of our knowledge and belief, |
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| were
necessary for the purposes of our audit. |
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|
| It
is the responsibility of the Company's management to establish and maintain a |
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| system
of internal control, and prepare and present the above said statements in |
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| conformity
with the approved accounting standards and the requirements of |
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| 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 |
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| Pakistan.
These standards require that we plan and perform the audit to obtain |
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| reasonable
assurance about whether the above said statements are free of any |
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| 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 |
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| 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 |
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| thereon
have been drawn up in conformity with the Companies |
|
| Ordinance,
1984, and are in agreement with the books of account and |
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| are
further in accordance with accounting policies consistently applied; |
|
|
|
|
| ii)
the expenditure incurred during the year was for the purpose of the |
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| Company's
business; and |
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|
|
|
|
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| iii)
the business conducted, investment made and the expenditure |
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| 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 |
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| fair
view of the state of the Company's affairs as at 30 June 2001 and of the |
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| loss
for the year then ended and its cash flows and changes in equity for the |
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| year
then ended; and |
|
|
| d)
in our opinion no zakat was deductible at source under the Zakat and Ushr |
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| Ordinance, 1980. |
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| Without
qualifying our report, we draw attention to the note no. 1.3 to the accounts. |
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| The
Company has incurred accumulated losses of Rupees 896.153 million including |
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| loss
of Rupees 136.137 million for the year. The Company's current liabilities
have |
|
| exceeded
its current assets by Rupees 684.392 million and its total liabilities exceed |
|
| its
total assets by Rupees 644.664 million. These factors raise doubts that the |
|
| Company
will be able to continue as a going concern. However, these accounts |
|
| have
been prepared on going concern basis, which is dependent on the successful |
|
| outcome
of the matters stated in the aforesaid note. |
|
|
|
|
| Dated:
30November2001 |
|
SIDAT HYDER QAMER & CO |
|
|
| Islamabad |
|
|
CHARTERED ACCOUNTANTS |
|
|
|
|
| BALANCE
SHEET AS AT 30 JUNE 2001 |
|
|
|
NOTE |
2001 |
2000 |
|
|
|
(Rupees in
'000) |
|
|
| Share Capital |
|
| Authorized |
|
| 18,000,000
ordinary shares of Rs 10/- each |
|
180,000 |
180,000 |
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid up |
|
3 |
123,200 |
123,200 |
|
| Reserves |
|
4 |
128,289 |
128,289 |
|
| Accumulated
losses |
|
|
(896,153) |
(760,016) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(644,664) |
(508,527) |
|
|
| Non-Current
liabilities |
|
|
|
| Long term loans |
|
5 |
305,735 |
396,342 |
|
| Long
term security deposits |
|
6 |
2,542 |
2,742 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
308,277 |
399,084 |
|
|
| Running
finance facility - secured |
|
|
-- |
27,203 |
|
| Current
maturity of long term loans |
7 |
316,563 |
184,449 |
|
| Creditors,
accrued and other liabilities |
8 |
398,461 |
333,178 |
|
| Dividend
payable |
|
9 |
187,584 |
187,585 |
|
| Taxation |
|
|
571 |
1,931 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
903,179 |
734,346 |
|
| Contingencies |
|
10 |
|
|
|
------------------ |
------------------ |
|
|
|
566,792 |
624,903 |
|
|
========== |
========== |
|
|
| AUDITORS'
REPORT ANNEXED |
|
| The
accompanying notes to the balance sheet from an integral part of the
financial statements. |
|
|
|
|
|
|
CHIEF EXECUTIVE |
|
|
|
|
| Fixed
assets at cost - net |
|
11 |
312,237 |
349,022 |
|
| Capital stores |
|
|
35,768 |
35,768 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
348,005 |
384,790 |
|
|
| Current assets |
|
|
|
| Stores,
spares and loose tools |
|
12 |
178,546 |
178,078 |
|
| Stock in trade |
|
13 |
2,783 |
6,540 |
|
| Trade
debts - unsecured |
|
14 |
-- |
38 |
|
| Advances,
prepayments and other receivables |
15 |
33,372 |
41,149 |
|
| Cash
and cash equivalents |
|
16 |
4,086 |
14,308 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
218,787 |
240,113 |
|
|
|
|
------------------ |
------------------ |
|
|
|
566,792 |
624,903 |
|
|
|
========== |
========== |
|
|
|
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30 JUNE 2001 |
|
|
|
|
2001 |
2000 |
|
|
|
(Rupees in
'000) |
|
|
| Expenditure |
|
| General
and administration expenses |
17 |
(65,195) |
(221,114) |
|
| Financial
charges |
|
18 |
(72,056) |
(77,071) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(137,251) |
(298,185) |
|
|
|
|
|
|
| Other
income/credits |
|
19 |
2,277 |
19,795 |
|
| Workers
welfare fund - prior year |
|
|
(4,352) |
-- |
|
| Prior
years adjustment |
|
|
-- |
(1,948) |
|
|
|
|
------------------ |
------------------ |
|
| Loss
before taxation |
|
|
(139,326) |
280,338) |
|
|
| Taxation |
|
| Current |
|
|
|
(571) |
(1,931) |
|
| Prior years |
|
|
|
3,760 |
6,692 |
|
| Deferred |
|
20 |
-- |
77,936 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
3,189 |
82,697 |
|
|
|
|
------------------ |
------------------ |
|
| Loss
after taxation |
|
|
(136,137) |
(197,641) |
|
|
|
|
|
|
| Loss per share |
|
21 |
Rs. 11 |
Rs. 16 |
|
|
========== |
========== |
|
|
| The
accompanying notes to the profit and loss account from an integral part of
the |
|
| financial
statements. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30 JUNE 2001 |
|
|
|
|
2001 |
2000 |
|
|
|
(Rupees in
'000) |
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Loss before tax |
|
(139,326) |
(280,338) |
|
| Items
not involving movement of cash: |
|
|
|
| Depreciation |
|
37,135 |
42,142 |
|
| Gain
on sale of fixed assets |
|
(260) |
(23) |
|
| Depreciation
of prior years |
|
-- |
1,948 |
|
| Provision
for gratuity |
|
-- |
6,294 |
|
| Provision
for bad debts |
|
1,324 |
|
|
| Fixed
assets written off |
|
-- |
9,023 |
|
| Store
shortages written off |
|
-- |
716 |
|
| Credit
balances added back |
|
-- |
(5,588) |
|
| Stocks
written off |
|
1,564 |
-- |
|
| Financial
charges |
|
72,056 |
77,072 |
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
(27,507) |
(148,754) |
|
|
| (Increase)
/ decrease in current assets |
|
| Stores
and spares |
|
(468) |
(713) |
|
| Stock in trade |
|
2,193 |
(1) |
|
| Trade
debts - net |
|
38 |
13 |
|
| Advances,
prepayments and other receivables |
|
8,818 |
8,591 |
|
|
|
------------------ |
------------------ |
|
|
|
10,581 |
7,890 |
|
|
|
|
| Increase
/ (decrease) in current liabilities |
|
| Creditors,
accrued and other liabilities |
|
(3,473) |
(529) |
|
|
|
------------------ |
------------------ |
|
| Net
cash from working capital |
|
7,108 |
7,361 |
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
(20,399) |
(141,393) |
|
| Income tax paid |
|
(536) |
(1,112) |
|
| Financial
charges paid |
|
(3,301) |
(7,114) |
|
|
|
------------------ |
------------------ |
|
| Net
cash used in operating activities |
|
(24,236) |
(149,619) |
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Capital
expenditure |
|
(601) |
(554) |
|
| Sale
proceeds of fixed assets |
|
511 |
333 |
|
| Capital stores |
|
-- |
1,125 |
|
| Long-term
advances |
|
-- |
3,041 |
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) / from investing activities |
|
(90) |
3,945 |
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
| Long term loans |
|
41,508 |
150,872 |
|
| Short
term running finance |
|
(27,203) |
(771) |
|
| Long
term security deposits |
|
(200) |
(614) |
|
| Dividend paid |
|
(1) |
(2) |
|
|
|
------------------ |
------------------ |
|
| Net
cash from financing activities |
|
14,104 |
149,485 |
|
|
------------------ |
------------------ |
|
| Net
(decrease) increase in cash balances |
|
(10,222) |
3,811 |
|
|
|
|
|
|
| Cash
at beginning of the year |
|
|
14,308 |
10,497 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
at end of the year |
|
|
4,086 |
14,308 |
|
|
|
|
========== |
========== |
|
|
|
CHIEF EXECUTIVE |
|
|
DIRECTOR |
|
|
|
|
|
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED 30 JUNE 2001 |
|
|
|
|
|
|
(Rupees in '000) |
|
|
|
|
|
|
Share |
Capital |
General |
Accumulated |
Total |
|
|
|
Capital |
Reserve |
Reserve |
Losses |
|
|
|
|
|
| Balance
as at 01 July 1999 |
123,200 |
289 |
130,889 |
(565,264) |
(310,886) |
|
| Loss
after taxation as previously |
|
|
| stated |
|
-- |
-- |
-- |
(264,613) |
(264,613) |
|
| Correction
of error (Note. 20) |
-- |
-- |
-- |
66,972 |
66,972 |
|
| Loss
after taxation as restated |
-- |
-- |
-- |
(197,641) |
(197,641) |
|
| Transfer
from general reserve |
-- |
-- |
(2,889) |
2,889 |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 2000 |
123,200 |
289 |
128,000 |
(760,016) |
(508,527) |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| Balance
as at 01 July 2000 as |
|
|
| previously
stated |
123,200 |
289 |
128,000 |
(826,988) |
(575,499) |
|
| Correction
of error (Note. 20) |
-- |
-- |
-- |
66,972 |
66,972 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at 01 July 2000 |
|
|
| as restated |
|
123,200 |
289 |
128,000 |
(760,016) |
(508,527) |
|
| Loss
after taxation |
-- |
-- |
-- |
(136,137) |
(136,137)</ |
