| Chakwal Cement Company Limited |
|
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|
| Annual
Report 1999 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Meeting |
|
| Directors'
Report |
|
| Pattern
of Shareholding |
|
| Auditors'
Report |
|
| Balance Sheet |
|
|
| Statement
of Changes in Financial Position (Cash Flow Statement) |
|
| Notes
to the Accounts |
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|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
Khawaja Mohammad Jawed |
|
(Chairman & Chief
Executive) |
|
|
Khawaja Mohammad Jahangir |
|
|
Khawaja Mohammad Tanveer |
|
|
Palle-o-Jorgensen |
|
(Nominee F.L.S) |
|
|
Khawaja Mohammad Nadeem |
|
|
Khawaja Mohammad Naveed |
|
|
Mr. Nasim Beg |
|
(Nominee NIT) |
|
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| COMPANY
SECRETARY |
Mr. Muhammad Anwar Sheikh |
|
|
|
| AUDITORS |
|
M. Hussain Chaudhury
& Co. |
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|
Chartered Accountants |
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| LEGAL
ADVISORS |
Cornelius Lane &
Mufti |
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|
Advocates and Solicitors |
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| BANKERS |
|
Citibank N.A. |
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|
Faysal Bank Limited |
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|
Muslim Commercial Bank
Limited |
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|
National Bank of Pakistan |
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|
Platinum Commercial Bank
Limited |
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Prime Commercial Bank
Limited |
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Standard Chartered Bank |
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| REGISTERED
OFFICE |
7/1-E-3, Main Boulevard, |
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|
Gulberg III, Lahore -
Pakistan. |
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Tel: (042) 575-7108 - 119 |
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| CORPORATE
AND |
31-F, Main Market,
Gulberg II, |
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| SHARE
DEPARTMENT |
Lahore - Pakistan. |
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|
Tel: (042) 575-.5774 |
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| PLANT SITE |
|
Karuli Near Kallaar Kahar |
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|
District Chakwal -
Pakistan. |
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| NOTICE
OF 6TH ANNUAL GENERAL MEETING |
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| Notice
is hereby given that 6th Annual General Meeting of Shareholders of Chakwal
Cement |
|
| Company
Limited will be held on Friday, December 31, 1999 at 10.00 a.m. at 7-Happy
Homes, 38-A, |
|
| Main
Gulberg, Lahore to transact the following business: |
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| ORDINARY
BUSINESS |
|
|
| 1.
To confirm the minutes of 5th Annual General Meeting held on December 31,
1998. |
|
|
| 2.
To receive and adopt the audited accounts together with Directors' and
Auditors' reports for |
|
| the
year ended June 30, 1999. |
|
|
| 3.
To appoint Auditors for the year ending June 30, 2000 and fix their
remuneration. The retiring |
|
| auditors
Messrs M. Hussain Chaudhury & Co. Chartered Accountants, being eligible,
offer |
|
| themselves
for re-appointment. |
|
|
| SPECIAL
BUSINESS |
|
|
| 4.
To consider and pass the following resolution as special resolution with or
without |
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| amendment. |
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| RESOLVED
THAT pursuant to the provisions of the Companies Ordinance 1984, and |
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| subject
to the approval of the relevant Government agencies and institutions, consent
be |
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| and
is hereby accorded to the Board of Directors of the Company for re-export and
or |
|
| sale
of the plant and machinery for such consideration and on such terms and
conditions |
|
| as
the Directors may consider beneficial to the Company. |
|
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| RESOLVED
FURTHER that the Chief Executive or any person authorized by the Board be |
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| and
is hereby authorized to execute such power of attorneys, agreement or
instrument |
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| and
to do all such things on behalf of the Company as may be necessary for
putting into |
|
| effect
the re-export and or sale of the said plant and machinery. |
|
|
| 5.
To transact any other business with the permission of Chair. |
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|
BY ORDER OF THE BOARD |
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| Lahore: |
|
(MUHAMMAD ANWAR SHEIKH) |
|
| Dated:
December 07, 1999. |
|
CORPORATE SECRETARY |
|
|
| NOTES: |
|
|
| 1.
A member entitled to attend and vote at the meeting may appoint an other
member as his/her |
|
| proxy
to attend and vote instead of him/her at the meeting. Proxies must be
deposited at the |
|
| Company's
Registered Office not less than 48 hours before the time of holding the
meeting. |
|
|
| 2.
Members are requested to immediately notify the change of their address, if
any. |
|
|
| 3.
Holders of Accounts and Sub Accounts for Company's shares in Central
Depository Company |
|
| of
Pakistan Limited, who wish to attend this meeting may do so by identifying
themselves |
|
| through
there original I.D. Card and providing a copy thereof duly attested by their
bankers. |
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| 4.
Share Transfer Books of the Company shall remain closed from December 29,
1999 to January |
|
| 05,
2000 (both days inclusive). |
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| STATEMENT
UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984. |
|
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| The
Company had imported plant and machinery for production of 5500 tons of
cement per day. At |
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| the
time of import, the plant and machinery if not manufactured locally was
exempted from tax. |
|
| However,
due to withdrawal of exemption and change in the duty structure, imposition
of sales tax |
|
| and
other cost over runs, the project could not be completed. Besides the
Financial Institutions who |
|
| had
earlier committed funding withdrew the commitment in view of glut in the
cement market. The |
|
| Directors
in order to save the plant and machinery from deterioration are exploring the
possibility of |
|
| re-export
of the machinery and or sale of the same. In order to enter into negotiation
with the |
|
| prospective
buyers and to obtain approval of the Government agencies and departments, the |
|
| Directors
seek consent of the members. |
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|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| The
Directors of your Company hereby present their report together with Audited
Accounts for the |
|
| year
ended June 30, 1999. |
|
|
| The
Company is facing the financial crunch and the management is making every
effort to get the |
|
| additional
funds to put the project on the track of completion. The uncertain economic
environment |
|
| has
further worsened the conditions. The management had tried its level best to
attract foreign |
|
| investment
but the same could not materialize due to poor investment climate. The
management |
|
| has
also requested to the Committee for Sick units for the revival of the unit,
which if completed will |
|
| contribute
billion of rupees towards national exchequer in terms of taxes, duties and
other levies. In |
|
| spite
of sluggish cement market and economic slump in the country, the management
is confident |
|
| that
cement plant with rated capacity of 5500 tons has potential to be viable and
will be profitable. |
|
| The
Government should take cognizance of the facts and contribute in the
completion of project by |
|
| providing
necessary funds to cover the cost overruns. The project has the importance of
a national |
|
| project
because it will contribute in economic growth, provide job opportunities and
enrich the |
|
| national
exchequer. While every effort is being made for additional financing and
representations to |
|
| the
Government for complete or partial exemption of duties and taxes, your
Directors are also |
|
| exploring
the feasibility of re-export and or sale of the plant and machinery. In case
necessary |
|
| financing
to complete the project could not be arranged, export and or sale of the
plant and |
|
| machinery
would be inevitable to save the machinery from deterioration. |
|
|
| Board
of Directors |
|
| On
October 18, 1999, Khawaja Mohammad Kaleem was replaced with Mr. Palle O.
Jorgensen, |
|
| nominee
of M/s F. L. Smidth-Fuller Engineering Group. We thank Khawaja Mohammad
Kaleem for |
|
| his
contributions and wish him more success in life and welcome Mr. Palle O.
Jorgensen in his new |
|
| assignment. |
|
|
| Auditors |
|
| The
Auditors, M/s Hussain Chaudhury & Co. Chartered Accountants, retired and
being eligible, offer |
|
| themselves
for re-appointment. |
|
|
| Y2K
Compliance |
|
| The
management of your Company confirm that all its computer hardware and
software are year |
|
| 2000
compliant. |
|
|
| Pattern
of Shareholding |
|
| The
pattern of shareholding as on June 30, 1999 is annexed. |
|
|
| Acknowledgment |
|
| We
thank our contractors, foreign / local suppliers for their support. We
appreciate the zeal and |
|
| devotion
of executives and employees of the Company during the year. Our special
thanks to our |
|
| worthy
shareholders. We also put on record our gratitude of foreign lenders, bankers
and |
|
| Government
functionaries for their co-operation and continued support. |
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|
|
On Behalf of the Board |
|
|
| Lahore. |
|
( Khawaja Mohammad Jawed
) |
|
| Date:
December 06, 1999. |
|
Chief Executive |
|
|
|
| FORM - 34 |
|
| THE
COMPANIES ORDINANCE, 1984 |
|
| (SECTION
236) |
|
| PATTERN
OF SHAREHOLDING AS ON JUNE 30, 1999 |
|
|
| No. of |
Shareholding |
Total |
|
| Shareholders |
From |
To |
Shares Held |
|
|
|
| 2 |
1 |
100 |
200 |
|
| 1693 |
101 |
500 |
845900 |
|
| 59 |
501 |
1000 |
58800 |
|
| 90 |
1001 |
5000 |
306100 |
|
| 34 |
5001 |
10000 |
281800 |
|
| 15 |
10001 |
15000 |
188000 |
|
| 13 |
15001 |
20000 |
239000 |
|
| 11 |
20001 |
25000 |
249000 |
|
| 4 |
25001 |
30000 |
108500 |
|
| 4 |
30001 |
35000 |
131500 |
|
| 1 |
35001 |
40000 |
38000 |
|
| 4 |
40001 |
45000 |
174300 |
|
| 2 |
45001 |
50000 |
96000 |
|
| 1 |
50001 |
55000 |
55000 |
|
| 1 |
55001 |
60000 |
56500 |
|
| 1 |
60001 |
65000 |
63500 |
|
| 2 |
65001 |
70000 |
136000 |
|
| 1 |
70001 |
75000 |
71000 |
|
| 1 |
75001 |
95000 |
91500 |
|
| 5 |
95001 |
100000 |
499600 |
|
| 1 |
100001 |
105000 |
103500 |
|
| 1 |
105001 |
110000 |
107000 |
|
| 1 |
115001 |
120000 |
116000 |
|
| 1 |
145001 |
150000 |
145500 |
|
| 2 |
195001 |
200000 |
399800 |
|
| 1 |
565001 |
570000 |
567400 |
|
| 1 |
690001 |
695000 |
694425 |
|
| 1 |
885001 |
890000 |
890000 |
|
| 1 |
895001 |
900000 |
898000 |
|
| 3 |
995001 |
1000000 |
2997000 |
|
| 16 |
1995001 |
2000000 |
31968400 |
|
| 1 |
2995001 |
3000000 |
2997000 |
|
| 1 |
3465001 |
3470000 |
3466500 |
|
| 1 |
3870001 |
3875000 |
3871000 |
|
| 1 |
8145001 |
8150000 |
8146619 |
|
| 1 |
8545001 |
8550000 |
8546260 |
|
| 1 |
8940001 |
8945000 |
8943711 |
|
| 1 |
9325001 |
9330000 |
9325825 |
|
| 1 |
12870001 |
12875000 |
12872882 |
|
| 1 |
13490001 |
13495000 |
13491700 |
|
| 1 |
14995001 |
15000000 |
15000000 |
|
| 1 |
19995001 |
20000000 |
19999980 |
|
| 3 |
24515001 |
24520000 |
73557285 |
|
| 1 |
24570001 |
24757000 |
24572476 |
|
| 1 |
52495001 |
52500000 |
52500000 |
|
| 1 |
262585001 |
262590000 |
262587900 |
|
| ---------- |
---------- |
---------- |
---------- |
|
| 1990 |
|
562456363 |
|
| ========== |
========== |
========== |
========== |
|
|
|
| Categories of |
|
Number of |
Number of |
Percentage |
|
| Shareholders |
|
Shareholders |
Shares held |
|
|
|
| Individuals |
|
1964 |
168965714 |
30.04 |
|
| Investment
Companies |
3 |
22000 |
0.00 |
|
| Insurance
Company |
1 |
19999980 |
356 |
|
| Joint
Stock Companies |
11 |
6839700 |
1.22 |
|
| Financial
Institutions |
3 |
66095200 |
11.75 |
|
| Foreign
companies |
8 |
300533769 |
53.43 |
|
|
---------- |
---------- |
---------- |
|
| Total |
|
1990 |
562456363 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of "CHAKWAL CEMENT COMPANY
LIMITED" as at |
|
| June
30, 1999 and statement of changes in financial position (cash flow statement)
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 and, after due verification thereof, 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 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 purposes 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 and the statement of changes in financial position (cash flow
statement) |
|
| together
with the notes forming part thereof, 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, 1999 and of the changes in financial
position |
|
| (cash
flows) for the year then ended; and |
|
|
| (d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| Without
qualifying our opinion, we draw attention to note 15 to the accounts. These
accounts |
|
| have
been prepared on a going concern basis the validity of which is dependent on
the |
|
| successful
outcome of the matter sated in the said note. |
|
|
| Lahore. |
|
(M. Hussain Chaudhury
& Co.) |
|
| Date:
December 06, 1999. |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
Note |
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
| CAPITAL
AND LIABILITIES |
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorized
capital: |
|
|
| 750
million (1998:750 million) ordinary |
|
| shares
of Rs. 10 each |
|
7,500,000,000 |
7,500,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
|
3 |
5,624,563,630 |
5,624,563,630 |
|
|
|
|
| Capital reserve |
|
4 |
214,838,692 |
214,838,692 |
|
|
|
5,839,402,322 |
5,839,402,322 |
|
|
| LONG
TERM LOAN - SECURED |
|
5 |
320,631,750 |
410,747,500 |
|
|
|
| DEFERRED
LIABILITY |
|
|
| Gratuity
payable |
|
955,565 |
495,298 |
|
|
| CURRENT
LIABILITIES |
|
|
| Current
portion of long term loan |
|
534,386,250 |
246,448,500 |
|
| Due
to directors |
|
-- |
2,267,997 |
|
| Creditors,
accrued and other liabilities |
|
6 |
809,181,571 |
283,430,707 |
|
|
---------- |
---------- |
|
|
1,343,567,821 |
532,147,204 |
|
|
|
|
| CONTINGENCIES AND COMMITMENTS |
|
7 |
|
|
---------- |
---------- |
|
|
7,504,557,458 |
6,782,792,324 |
|
|
========== |
========== |
|
| PROPERTY
AND ASSETS |
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
| Operating
fixed assets |
|
8 |
31,876,221 |
32,302,392 |
|
|
|
|
| Capital
work in progress - net |
|
9 |
7,325,945,445 |
6,503,577,798 |
|
|
---------- |
---------- |
|
|
7,357,821,666 |
6,535,880,190 |
|
|
| DEFERRED
COSTS |
|
10 |
5,258,844 |
10,517,690 |
|
|
|
| CURRENT
ASSETS |
|
|
| Advances,
deposits, prepayments and |
|
| other
receivables |
|
11 |
135,568,762 |
201,444,482 |
|
|
|
|
| Cash
and bank balances |
|
12 |
5,908,186 |
34,949,962 |
|
|
|
---------- |
---------- |
|
|
141,476,948 |
236,394,444 |
|
|
|
---------- |
---------- |
|
|
7,504,557,458 |
6,782,792,324 |
|
|
========== |
========== |
|
| NOTE:
The annexed notes from 1 to 16 form an integral part of these accounts. |
|
|
| Director |
|
Chief Executive |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Operating
fixed assets |
|
(32,636) |
-- |
|
| Capital
work in progress - net |
|
(511,373,314) |
(90,295,065) |
|
| Proceeds
from sale of fixed assets |
|
-- |
240,000 |
|
| Financial
charges paid |
|
(1,159) |
(74,897) |
|
|
---------- |
---------- |
|
| Net
cash used in investing activities |
|
(511,407,109) |
(90,129,962) |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
| Interest
income received |
|
2,263,766 |
9,341,187 |
|
| Net
cash from financing activities |
|
2,263,766 |
9,341,187 |
|
|
| (Increase)/Decrease
in current assets |
|
65,850,500 |
(1,977,605) |
|
| Increase/(Decrease)
in current liabilities |
|
414,522,338 |
64,991,158 |
|
| Income
tax paid |
|
(271,271) |
(973,148) |
|
| Gratuity paid |
|
-- |
(104,534) |
|
|
---------- |
---------- |
|
| Increase/(Decrease)
in cash and cash equivalents |
|
(29,041,776) |
(18,852,904) |
|
| Cash
and cash equivalents at beginning of the year |
|
34,949,962 |
53,802,866 |
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at end of the year |
|
5,908,186 |
34,949,962 |
|
|
========== |
========== |
|
| Chief
Executive |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
| 1.
The company and its operations |
|
|
| 1.1
Chakwal Cement Company Limited was incorporated in Pakistan on May 23, 1993,
as a |
|
| private
limited company and subsequently converted into a public limited company on |
|
| October
18, 1994 under the Companies Ordinance, 1984. The Company is listed on all |
|
| Stock
Exchanges of Pakistan. The principal activity of the company is to set up an |
|
| industrial
undertaking for the manufacture and sale of cement. |
|
|
| 1.2
Profit and loss account for the year ended June 30, 1999 has not been drawn
up as the |
|
| company
has not commenced its operating activities. |
|
|
| 2.
Significant accounting policies |
|
|
| 2.1
Accounting convention: |
|
| These
accounts have been prepared under the historical cost convention without any |
|
| adjustment
for the effect of inflation or reference to current values. |
|
|
| 2.2
Staff retirement benefit: |
|
| The
company operates an un-funded gratuity scheme for all its employees. |
|
|
| 2.3
Fixed assets and depreciation: |
|
| Fixed
assets are stated at cost less accumulated depreciation except freehold land
and |
|
| capital
work in progress which are stated at cost. |
|
|
| Cost
of operating fixed assets consists of historical cost and attributable
expenses in |
|
| bringing
the assets to their working condition. |
|
|
| Depreciation
is charged by applying the reducing balance method at the rates specified |
|
| in
Note. 8 so as to write off the cost of assets over their useful lives. |
|
|
| No
depreciation is charged on the assets deleted during the year, whereas, full
year's |
|
| depreciation
is charged on additions during the year. |
|
|
| Profit/loss
on disposal of fixed assets is charged to income currently. Normal repairs
and |
|
| maintenance
are charged to income as and when incurred. Major renewals and |
|
| improvements
are capitalized. |
|
|
| 2.4 Taxation: |
|
| The
company has not yet commenced its operating activities and as such the
provision |
|
| for
taxation is not required in these accounts. |
|
|
| 2.5
Deferred costs: |
|
| Deferred
costs are amortized during the period not exceeding five years from the date
on |
|
| which
the costs are incurred. |
|
|
| 2.6
Foreign currency translations: |
|
| Assets
and liabilities in foreign currencies are translated into Pak Rupees at the
rates of |
|
| exchange
ruling on the balance sheet date. Exchange differences on foreign currency |
|
| loan
are capitalized. |
|
|
| 2.7
Revenue recognition: |
|
| Return
on investments from bank accounts is recognized on accrual basis. Revenue
from |
|
| sales
shall be recognized under the policy to be framed after the completion of the |
|
| project. |
|
|
| 3.
Issued, subscribed and paid up capital |
|
|
| 1999 |
1998 |
|
|
1999 |
1998 |
|
| Number of |
Number of |
|
Rupees |
Rupees |
|
| shares |
shares |
|
|
| 562,456,363 |
562,456,363 |
Ordinary shares of |
|
5,624,563,630 |
5,624,563,630 |
|
|
Rs. 10 each fully |
|
|
paid in cash |
|
| ---------- |
---------- |
|
---------- |
---------- |
|
| 562,456,363 |
562,456,363 |
|
5,624,563,630 |
5,624,563,630 |
|
| ========== |
========== |
|
========== |
========== |
|
|
| 4.
Capital reserve |
|
| Share premium |
|
214,838,692 |
214,838,692 |
|
|
========== |
========== |
|
| This
represents share premium of Re. 0.50 on issue of 429,677,383 ordinary shares. |
|
|
| 5.
Long term loan - secured |
|
| Foreign
currency loan |
|
855,018,000 |
657,196,000 |
|
| Less:
Current maturity |
|
534,386,250 |
246,448,500 |
|
|
---------- |
---------- |
|
|
320,631,750 |
410,747,500 |
|
|
========== |
========== |
|
| This
represents Japanese Yen 2 billion foreign currency loan obtained from M/s.
Nichimen |
|
| Corporation,
U.K. in the year 1996, to meet the local cost components for the construction
and |
|
| installation
of cement plant. |
|
|
