| Pakistan Slag Cement Industries 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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| Report
of the Directors |
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| Shareholders'
Statistics |
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| Auditors'
Report |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Statement
Of Changes in Equity |
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| Cash
Flow Statement |
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| Notes
to the Accounts |
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| COMPANY
INFORMATION |
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|
| Board
of Directors |
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| Chairman/Chief
Executive |
Jehangir Akber |
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|
Haji Ghulam Shabbir |
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|
Nisar A. Korai |
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|
Faiz Mohammad Brohi |
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|
Ajaz Ali Panhor |
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|
Muneer Ahmed |
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|
Muhammad Naeem Khan |
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| Company
Secretary |
Muhammad Shariq Aqeel |
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| Auditors |
|
Faruq Ali & Co., |
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|
Chartered Accountants |
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|
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| Bankers |
|
Platinum Commercial Bank
Limited |
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Muslim Commercial Bank
Limited |
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National Bank of Pakistan |
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|
Societe Generele French
International Bank |
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| Registered
Office |
4th Floor, Panorama
Center, |
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|
Building No. 2, Doctors'
Plaza, |
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|
Raja Ghazanfar Ali Khan
Road, |
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|
Saddar, Karachi. |
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Phone: 568-6095 |
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Fax :521-9067 |
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| Factory |
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DSU-6, Zulfiqarabad,
Karachi. |
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Phone: (0201) 750129 -
750130 |
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Fax: (0201) 750131 |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the Twelfth Annual General Meeting of Pakistan
Slag Cement Industries Limited |
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| will
be held on Monday December 31, 2001 at 2.00 p.m. at FTC Auditorium,
Sharah-e-Faisal, Karachi, to |
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| transact
the following business: |
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| 1.
To confirm the minutes of last Annual General Meeting held on 30th day of
January, 2001. |
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|
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| 2.
To receive and adopt the Directors and Auditors report together with the
Audited Accounts for the year |
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| ended
30th June, 2001. |
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|
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| 3.
To lay information before the members of the Company of the appointment of
Messers Faruq Ali & |
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| Company,
Chartered Accountants, as auditor of the Company, for the year ending June
30, 2002. |
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| AND |
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|
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|
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| 4.
To transact any other Ordinary Business of the Company with the permission of
the chairman. |
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By Order of the Board |
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|
(Muhammad Shariq Aqeel) |
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| Karachi:
December 08, 2001 |
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Company Secretary |
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| NOTES: |
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| i.
The register of members will remain closed from 22nd December 2001 to 5th
January 2002 (both days |
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| inclusive). |
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|
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| ii.
A member entitled to attend and vote at the meeting may appoint a proxy to
attend and vote on his/her |
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| behalf.
Proxies must be received at the registered office of the Company not less
than 48 hours before |
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| the meeting. |
|
|
|
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| iii.
Shareholders are requested to notify any change in their address immediately. |
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|
| REPORT
OF THE DIRECTORS |
|
|
| Dear
Shareholders, |
|
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| Your
Directors are pleased to welcome you to the 12th Annual General Meeting of
the Company and to |
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| present
the Annual Accounts and the Auditors report thereon for the financial year
ended June 30, 2001. |
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|
| PRODUCTION |
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| During
the year the Company produced 62,391 tonnes cement, as compared to 35,522.50
tonnes of last year. |
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| The
main reason for the increase in production is attributable to the prompt of
supply of Clinker from Zeal Pak |
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| Cement
Factory, the main supplier for Clinker to the Company. |
|
|
| MARKETING |
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| As
submitted above, the Company despatched 62,221.83 Tonnes cement during the
year under review, as |
|
| compare
to 35,767.41 tonnes in the corresponding last year. |
|
|
| SUPPLY
OF GRINDED GRANULATED SLAG |
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| Under
an agreement with Ghazi Barotha Hydro Power Project, DEC, the Company was to
supply grinded pure |
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| slag
to them. Due to capacity constraints, the Company also procured the above
material from outside |
|
| sources.
Under this arrangement Company supplied 37,867 tonnes to Ghazi Barotha Hydro
Power Project, |
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| DEC. |
|
|
| FINANCIAL
RESULTS |
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| The
depressed market conditions, excess supply of cement, exorbitant increase in
cost of clinker due to |
|
| increase
in furnace oil prices and inequitable taxation has greatly affected the
results of your company. During |
|
| the
year the Company has been in a position to earn operating profit of Rs..388
Million as against operating |
|
| profit
of Rs. 1.852 Million of last year. However, due to increase in financial
charges and provision for taxation |
|
| the
Company's loss after taxation amounted to Rs.10.165 Million as against Rs.
6.048 Million of the previous |
|
| year. |
|
|
| However,
the company is punctual in repayment of long term loans of PICIC & NDFC.
The loan payable to |
|
| NDFC
stands fully paid during the year. |
|
|
| AUDITOR'S
QUALIFICATION |
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| As
regards Auditor's observation .on going concern of the company, the
shareholders are assured that the |
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| company
is making efforts to improve the performance of the plant. |
|
|
| The
company have sponsors in the shape of a group of companies and they take care
of the financial needs of |
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| your company. |
|
|
| DIRECTORS |
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| Since
the last Annual General Meeting the composition of the Board of Directors
remained the same with the |
|
| exception
that Mr. Shafi Muhammad Khan Jatoi resigned from the Board and Mr. Haji
Ghulam Shabbir was |
|
| inducted
as a Director in his place. |
|
|
| AUDITORS |
|
| The
present Auditors M/s. Faruq Ali & Co. Chartered Accountants, stand
retired and being eligible. Offer |
|
| themselves
for reappointment as Auditor of the Company for the financial year ended 30th
June, 2002. : |
|
|
| PATTERN
OF SHARE HOLDING |
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| A
statement showing pattern of holding of the Company is included in the
report. |
|
|
| APPRECIATION
FOR EMPLOYEES |
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| The
director would like to thank all employees of the company for having achieved
outstanding results in a |
|
| difficult
year. It is hopped that they will continue to work with same zeal and spirit.
Directors are also grateful to |
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| the
valued customers whose continuous support is great source of strength to the
company in the market |
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| place. |
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|
BY ORDER OF THE BOARD |
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| Karachi:
December 08, 2001 |
|
Chairman |
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|
|
| SHAREHOLDERS'
STATISTICS |
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| AS
AT JUNE 30, 2001 |
|
|
| Number of |
|
Share Holding |
|
Total |
|
| Share Holders |
From |
|
To |
Shares Held |
|
|
| 696 |
1 |
-- |
100 |
69,600 |
|
| 2727 |
101 |
-- |
500 |
1,327,700 |
|
| 47 |
501 |
-- |
1000 |
45,400 |
|
| 48 |
1001 |
-- |
5000 |
123000 |
|
| 7 |
5001 |
-- |
10000 |
52,100 |
|
| 2 |
10001 |
-- |
15000 |
29,500 |
|
| 4 |
15001 |
-- |
20000 |
76,000 |
|
| 1 |
25001 |
-- |
30000 |
26,600 |
|
| 1 |
45001 |
-- |
50000 |
50,000 |
|
| 1 |
285001 |
-- |
290000 |
286,100 |
|
| 1 |
1110001 |
-- |
1115000 |
1,114,000 |
|
| 1 |
3195001 |
-- |
3200000 |
3,200,000 |
|
| ------------------ |
|
------------------ |
|
| 3536 |
|
6,400,000 |
|
| ========== |
|
========== |
|
|
| CATEGORIES
OF SHAREHOLDERS |
|
|
| Categories
of Shareholders |
|
Number of |
Total |
Percentage |
|
|
|
Share Holders |
Shares Held |
|
|
|
| INDIVIDUAL |
|
3533 |
4,995,900 |
78.06 |
|
| INVESTMENT
COMPANIES |
|
1 |
286,100 |
4.47 |
|
| FINANCIAL
INSTITUTIONS |
|
1 |
4,000 |
0.06 |
|
| FOREIGN
COMPANY |
|
1 |
1,114,000 |
17.41 |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
3536 |
6,400,000 |
100.00 |
|
|
|
========== |
========== |
========== |
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| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of M/S. PAKISTAN
SLAG CEMENT INDUSTRIES LIMITED, |
|
| Karachi,
as at 30th June, 2001 and the related Profit & Loss Account, Cash Flow
Statement and Statement of |
|
| Changes
in Equity together with the Notes forming part thereof, for the year then
ended and we state that we |
|
| have
obtained all the information and explanations which, to the best of our
knowledge and belief, were |
|
| necessary
for the purposes of our audit. |
|
|
| It
is the responsibility of the Company's management to establish and maintain a
system of internal control, |
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| and
prepare and present the above said statements in conformity with the approved
accounting standards and |
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| 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 |
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| require
that we plan and perform the audit to obtain reasonable assurance about
whether the above said |
|
| statements
are free of any material misstatement. An audit includes examining, on a test
basis, evidence |
|
| supporting
the amounts and disclosures in the above said statements. An audit also
includes assessing the |
|
| accounting
polices and significant estimates made by management, as well as, evaluating
the overall |
|
| presentation
of the above said statements. We believe that our audit provides a reasonable
basis for our |
|
| opinion
and, after due verification, we report that: |
|
|
| a)
in our opinion, proper books of account 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 & Loss Account together with the notes
thereon have been drawn |
|
| up
in conformity with the Companies Ordinance, 1984, and are in agreement with
the books of |
|
| accounts
and are further in accordance with accounting policies consistently applied. |
|
|
| ii)
the expenditure incurred during the year was for the purpose of the Company's
business; and |
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the year were in |
|
| accordance
with the objects of the Company. |
|
|
|
|
| c)
in our opinion and to the best of our information and according to the
explanations given to us, the |
|
| Balance
Sheet, Profit & Loss Account, together with the Notes forming part
thereof confirm with |
|
| approved
accounting standards as applicable in Pakistan, and give the information
required by the |
|
| Companies
Ordinance, 1984, in the manner so required and respectively give true and
fair view of the |
|
| State
of the Company affairs as at 30th June, 2001, and of loss, its cash flows and
changes in equity for |
|
| the
year then ended; |
|
|
|
| e)
in our opinion, no Zakat was deductible at source under the Zakat & Ushr
Ordinance, 1980 (XVIII of |
|
| 1980). |
|
|
|
|
|
|
| Without
qualifying our opinion we draw the attention of the members to the fact that
the Company's |
|
| accounts
have been prepared under going concern concept whereas the company has
sustained loss of |
|
| Rs.
9.022 millions during the year ended 30th June, 2001 and as of that date the
accumulated losses of |
|
| the
Company have reached the figure of Rs. 61.168 million and the current
liabilities exceeds its |
|
| currents
assets by 72.302 millions. |
|
|
|
|
|
|
Faruq Ali & Company |
|
| Karachi:
December 08, 2001 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Tangible
Fixed Assets |
|
3 |
78,068,673 |
92,943,512 |
|
| Capital
Work-in-Progress |
|
|
8,807,514 |
8,807,514 |
|
| Intangible
Assets |
|
4 |
10,000 |
10,000 |
|
| Long
Term Deposits |
|
|
2,107,120 |
1,307,040 |
|
|
|
|
------------------ |
------------------ |
|
| Total
Long Term Assets |
|
|
88,993,307 |
103,068,066 |
|
|
|
|
| Current Assets |
|
|
|
| Stores
and Spares |
|
5 |
2,862,524 |
2,765,200 |
|
| Stock-in-Trade |
|
6 |
35,644,478 |
36,499,917 |
|
| Trade Debts |
|
7 |
24,058,791 |
11,645,667 |
|
| Loans,
Advances, Deposits, Pre-Payments |
|
|
| and
Other Receivables |
|
8 |
25,944,472 |
36,512,107 |
|
| Cash
and Bank Balance |
|
9 |
3,013,072 |
1,117,155 |
|
|
|
------------------ |
------------------ |
|
| Total
Current Assets |
|
|
91,523,337 |
88,540,046 |
|
|
|
|
| Current
Liabilities |
|
|
|
| Current
Maturity of Long Term Loans |
|
11,206,028 |
15,772,104 |
|
| Short
Term Borrowing |
|
10 |
34,137,193 |
47,450,628 |
|
| Creditors,
Accrued & Other Liabilities |
11 |
111,467,853 |
78,959,208 |
|
| Provision
for Taxation |
|
|
7,014,658 |
5,871,658 |
|
| Proposed
Dividend |
|
|
-- |
3,200,000 |
|
|
|
------------------ |
------------------ |
|
| Total
Current Liabilities |
|
|
163,825,732 |
151,253,598 |
|
|
|
|
------------------ |
------------------ |
|
| Net
Current (Liabilities)/Assets |
|
|
(72,302,395) |
(62,713,552) |
|
|
|
|
------------------ |
------------------ |
|
| Total
Assets less Current Liabilities |
|
16,690,912 |
40,354,514 |
|
|
|
|
| Long
Term Liabilities |
|
|
|
| Long
Term Loans |
|
12 |
12,733,522 |
26,231,238 |
|
| Long
Term Deposits |
|
13 |
1,125,655 |
1,125,655 |
|
|
|
------------------ |
------------------ |
|
| Total
Long Term Liabilities |
|
13,859,177 |
27,356,893 |
|
|
|
------------------ |
------------------ |
|
| Commitments
and Contingencies |
|
-- |
-- |
|
|
------------------ |
------------------ |
|
| Net Assets |
|
2,831,735 |
12,997,621 |
|
|
| Represented
By: |
|
|
|
| Share Capital |
|
14 |
64,000,000 |
64,000,000 |
|
| Accumulated
Loss |
|
|
(61,168,265) |
(51,002,379) |
|
|
------------------ |
------------------ |
|
| Share
Holder Equities |
|
2,831,735 |
12,997,621 |
|
|
------------------ |
------------------ |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Sales - Net |
|
15 |
228,589,586 |
312,228,893 |
|
| Cost
of Goods Sold |
|
16 |
225,276,622 |
307,804,320 |
|
|
|
|
------------------ |
------------------ |
|
| Gross Profit |
|
|
3,312,964 |
4,424,573 |
|
| Administrative
and Selling Expenses |
17 |
2,980,982 |
2,890,571 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
Profit |
|
|
331,982 |
1,534,002 |
|
| Other Income |
|
18 |
56,868 |
317,809 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
388,850 |
1,851,811 |
|
| Financial
and Other Charges |
|
19 |
9,411,736 |
6,337,277 |
|
|
|
|
------------------ |
------------------ |
|
| Net
(Loss) Before Taxation |
|
|
(9,022,886) |
(4,485,466) |
|
| Provision
for Taxation |
|
20 |
1,143,000 |
1,562,000 |
|
|
|
|
------------------ |
------------------ |
|
| Net
(Loss) After Taxation |
|
|
(10,165,886) |
(6,047,466) |
|
| Prior
Year's Adjustments |
|
|
-- |
11,678,584 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(10,165,886) |
5,631,118 |
|
| Accumulated
Loss Brought Forward |
|
(51,002,379) |
(53,433,497) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(61,168,265) |
(47,802,379) |
|
| Proposed
Dividend Nil (2000 - 5%) |
|
-- |
3,200,000 |
|
|
|
|
------------------ |
------------------ |
|
| Balance
Loss Carried Over |
|
|
(61,168,265) |
(51,002,379) |
|
|
|
|
========== |
========== |
|
| Loss Per Share |
|
21 |
(1.58) |
(0.94) |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Chief Executive |
|
|
Director |
|
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
Rupees |
|
|
Share |
Un-Appropriated |
Total |
|
|
Capital |
Loss |
|
|
|
| Balance
as at 30th June 1999 |
|
64,000,000 |
(56,633,497) |
7,366,503 |
|
|
|
|
|
| Profit
after Taxation for the year |
|
|
|
| ended
30th June, 2000 |
|
-- |
5,631,118 |
5,631,118 |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30th June 2000 |
|
64,000,000 |
(51,002,379) |
12,997,621 |
|
|
|
|
|
| (Loss)
after Taxation for the year |
|
|
|
| ended
30th June, 2001 |
|
-- |
(10,165,886) |
(10,165,886) |
|
|
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30th June 2001 |
|
64,000,000 |
(61,168,265) |
2,831,735 |
|
|
|
========== |
========== |
========== |
|
|
|
Chief Executive |
|
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
| Cash
flow from operating activities |
|
| Cash
generated from operations |
|
24 |
32,889,336 |
25,207,461 |
|
|
| Cash
flow from investing activities |
|
| Fixed
capital expenditure |
|
(278,400) |
(3,019,559) |
|
| Long
Term Deposits |
|
(800,080) |
254,315 |
|
|
|
------------------ |
------------------ |
|
| Net
cash outflow from investing activities |
|
(1,078,480) |
(2,765,244) |
|
|
|
|
| Cash
flow from financing activities |
|
| Re-payments
of long-term loan |
|
(18,063,792) |
(17,652,325) |
|
| Financial
Charges |
|
(9,375,579) |
(6,194,700) |
|
| Liabilities
against Assets subject to Finance Lease |
|
-- |
(324,984) |
|
| Dividend Paid |
|
(2,475,568) |
-- |
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow) from financing activities |
|
(29,914,939) |
(24,172,009) |
|
|
|
------------------ |
------------------ |
|
| Net
increase/(decrease) in cash and cash equivalents |
1,895,917 |
(1,729,792) |
|
| Cash
and cash equivalents at the beginning of the year |
1,117,155 |
2,846,947 |
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents as at the end of year |
|
3,013,072 |
1,117,155 |
|
|
|
========== |
========== |
|
|
| Karachi:
December 08, 2001 |
|
Chief Executive |
|
Director |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
| 1.
Nature and Status |
|
| Pakistan
Slag Cement Industries Limited was incorporated in September 1988 as a Public
Limited |
|
| Company.
It went into Public subscription in June 1994 and was listed at Karachi Stock
Exchange in |
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| August 1994. |
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| The
company is principally engaged in the manufacturing and sale of Slag Cement,
Ordinary Portland |
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| Cement,
White Cement, Clinker Coal Ash Cement and allied products. |
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| 2.
Significant Accounting Policies |
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| 2.1
Accounting Convention |
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| These
Accounts have been prepared under the "Historical Cost Convention"
without any effect of |
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| inflation
or of current values. |
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| 2.2
Tangible Fixed Assets/Depreciation |
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| i)
These are stated at cost less accumulated depreciation except leasehold land
which is |
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| stated
at cost. The depreciation has been charged on straight line method on Plant
& |
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| Machinery
and Factory Building and at reducing balance method on other assets. |
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| ii)
Profits/loss on disposals is charged to revenue and no depreciation is
charged on disposals. |
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| iii)
Normal repairs/maintenance is charged to Profit and Loss Account as and when
incurred |
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| whereas
major renewals and improvements are capitalised. |
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| 2.3
Leased Assets |
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| i)
Assets acquired under finance lease are stated at cost less accumulated
depreciation. |
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| ii)
Obligation of the lease are accounted for as liabilities. Financial charges
are charged to profit |
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| and
loss account. |
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| 2.4
Capitalization of Borrowing Costs |
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| The
company capitalizes borrowing costs relating to capital projects, excluding
normal capital |
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| expenditure. |
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| 2.5
Deferred Costs |
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| The
Company has the policy to amortize the deferred cost over a period of five
years. |
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| 2.6
Stores, Spares & Loss Tools |
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| These
are valued at average cost. |
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| 2.7
Stock in Trade |
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| Raw
and packing material in hand are valued at average cost. |
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| Finished
goods and work in progress are valued at lower of average cost or net
realisable value. |
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| 2.8 Taxation |
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| Provision
for taxation is made at the current rate of tax applicable to Public
Companies under |
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| Income
Tax Ordinance, 1979. |
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| 2.9
Revenue Recognition |
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| Revenue
is recognised on dispatch of goods to consumers. |
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| 3.
Operating Fixed Assets |
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COST |
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DEPRECIATION |
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Written Down |
| Particulars |
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Cost As On |
Additions/ |
Cost As At |
Acc. Dep. |
Rate |
For the |
Acc. Dep. |
Value As At |
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01-07-2000 |
(Disposal) |
30-06-2001 |
01-07-2000 |
% |
Year |
30-06-2001 |
30-06-2001 |
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