| Essa Cement Industries Limited |
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| Annual
Report 1998-99 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Meeting |
|
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| Directors'
Report to the Members |
|
|
| Financial
Highlights |
|
|
| Pattern
of Share Holding |
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|
| Auditors'
Report to the Members |
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| Balance Sheet |
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|
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| Profit
and Loss Account |
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| Statement
of Changes in Financial Position |
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| Notes
to the Accounts |
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| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| MR.
ABDUL AZIZ ESSA |
|
CHAIRMAN & CHIEF
EXECUTIVE |
|
| MRS.
HUMERA ESSA |
|
|
|
| MRS.
JAMILA YOUNUS DADA |
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| MRS.
ZAITOON HAMZA DADA |
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| MR.
JAWED AZIZ ESSA |
|
| MR.
IRFAN AZIZ ESSA |
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| MR.
ZAFARUDDIN SIDDIQUI |
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| COMPANY
SECRETARY |
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| MR.
JAWED AZIZ ESSA |
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| AUDITORS |
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| F.R.
MERCHANT & CO. |
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| CHARTERED
ACCOUNTANTS |
|
|
| BANKERS |
|
| HABIB
BANK LIMITED |
|
| NATIONAL
BANK OF PAKISTAN |
|
| MUSLIM
COMMERCIAL BANK LIMITED |
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| ANZ
GRINDLAYS BANK |
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| ALLIED
BANK OF PAKISTAN LIMITED |
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| BOLAN
BANK LIMITED |
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| SONERI
BANK LIMITED |
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| BANK
AL HABIB LIMITED |
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| FAYSAL
BANK LIMITED |
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| THE
BANK OF PUNJAB |
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| REGISTERED
OFFICE |
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| FL-2/1,
BLOCK-6, |
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| GULSHAN-E-IQBAL, |
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| KARACHI-
75300 |
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|
| FACTORY |
|
| DEH
KALO KOHAR |
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| NOORIABAD
INDUSTRIAL AREA, |
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| DISTRICT
DADU, (SINDH) |
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| NOTICE
OF MEETING |
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| NOTICE
IS HEREBY GIVEN that Annual General Meeting of the Company will be held on |
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| Wednesday,
December 29, 1999 at 02:00 P.M. at the Registered Office of the Company at |
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| FL-2/1,
Block-6, Gulshan-e-lqbal, Karachi, to transact the following business: |
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| ORDINARY
BUSINESS |
|
|
| 1)
To confirm the minutes of the last Annual General Meeting. |
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|
|
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| 2)
To receive and consider the Report of the Directors, the Audited Accounts and |
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| Statement
alongwith the Balance Sheet for the year ended June 30, 1999 with the |
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| Auditors'
Report thereon. |
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|
|
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| 3)
To appoint Auditors for the year 1999-2000 and to fix their remuneration. |
|
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| 4)
To transact any other business with the permission of the Chairman. |
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|
| SPECIAL
BUSINESS: |
|
|
|
| 1) To consider and if thought fit to resolve
"that a sum of Rs. 34,629,730 be capitalised out of |
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| the
profit of the Company and that such sum be applied in making full at par for
3,462,973 |
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| ordinary
shares of Rs, 10 each in the capital of the Company. Such shares to be
distributed as |
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| fully
paid shares among the members as at the closing of the books on December 20,
1999 @ |
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| 10%
(1 share for every 10 shares held) and that any fraction of shares arising
thereof shall be |
|
| disregarded
and that the whole shares representing such fraction shall be disposed of in
such |
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| manner
as the Directors of the Company think fit and proceeds shall be distributed
in due |
|
| proportion
among the members entitled thereto in accordance with their respective rights
and |
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| such
shares shall rank for all purposes part passu with the ordinary shares
already issued by the |
|
| Company". |
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|
By Order of the Board |
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|
JAWED AZIZ ESSA |
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| KARACHI:
November 29, 1999 |
|
Director & Secretary |
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|
|
| NOTES: |
|
|
| 1) The Share Transfer Books of the Company
will remain closed from December 21, 1999 to |
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| December
29, 1999 (both days inclusive).Transfers received in order at the Registered
Office of |
|
| the
Company upto the close of business on December 20, 1999 will be considered in
time for the |
|
| purpose
of Bonus Shares to the transferees. |
|
|
| 2)
A member entitled to attend and vote at the Annual General Meeting may
appoint another |
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| member
as the proxy to attend and vote on his/her behalf. Proxies must be duly
filled, signed |
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| and
deposited at the Registered Office of the Company not less than 48 hours
before the time |
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| of the meeting. |
|
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| 3)
Shareholders are requested to promptly notify the Company of any change in
their addresses, |
|
| if any. |
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|
| STATEMENT
UNDER SECTION 160(I) (b) OF THE COMPANIES ORDINANCE, 1984 |
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| The
Reserves of the Company as on June 30, 1999 represent accretion on its
existing share |
|
| capital,
it had been thought expedient to capitalise a part of the said reserves by
way of issue |
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| of
Bonus Shares to the members. The Company had no direct interest in the event
the capital is |
|
| increased
as proposed. Upon issuance of the Bonus Shares, the paid-up capital of the
Company |
|
| shall
stand increased to Rs. 380,927,050. |
|
|
|
| DIRECTORS'
REPORT TO THE MEMBERS |
|
|
| Your
directors have pleasure in presenting their report alongwith audited accounts
and auditors' |
|
| report
thereon for the year ended June 30, 1999. |
|
|
| EXPANSION
OF PLANT: |
|
|
| First
of all we would pay our humble gratitude to Almighty Allah as only His
blessings made it |
|
| possible
for us to start the operations of the expansion plant during the year under
review. We would |
|
| also
like to congratulate the highly dedicated and competent team of Directors,
Managers, |
|
| Engineers
and erection team who enthusiastically committed themselves for months to
setup expansion |
|
| plant. |
|
|
| Your
directors are confident that with the expanded capacity the company will be
able to |
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| substantially
improve its performance and operating results in the years ahead, |
|
|
| PRODUCTION: |
|
|
| During
the year under report the Company witnessed favorable improvement in
production |
|
| as
compared to last year. The comparative figures both for clinker and cement
production are given |
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| as under: |
|
|
|
|
|
1998-99 |
1997-98 |
|
|
|
|
M.Tons |
M.Tons |
|
|
|
|
| Clinker |
|
|
161,451 |
75,855 |
|
| Ordinary
Portland Cement. |
|
|
139,422 |
50,485 |
|
| Slag Cement |
|
|
32,440 |
22,915 |
|
| Sulphate
Resistance Cement |
|
|
6,670 |
5,707 |
|
|
| SALES
& MARKETING: |
|
|
| As
discussed in our last report that the cement industry as a whole is facing
two major |
|
| problems
i.e. growing gap between supply and demand and secondly low economic
activities. |
|
| Impact
of both kept producers under pressure, Inspite of all these problems and
after expansion we |
|
| are
now in a better position to face and compete with others. The cement sales by
the Company |
|
| aggregated
to 174,785 m.tons as compared to 87,069 m.tons last year. |
|
|
| Gross
Sales Revenue amounted to Rs. 641,983 million, out of which Rs. 264.079
million |
|
| were
paid to-the government as Excise Duty. Net sales revenue amounted to
Rs.377.904 million, |
|
|
| FINANCIAL
RESULTS: |
|
|
|
| Inspite
of lower capacity utilization and wide fluctuation in selling prices, the
company managed |
|
| to
earn an operating profit of Rs. 68.452 million as against 6.301 million last
year. Following are the financial |
|
| results: |
|
|
| PROFIT
AFTER TAX |
|
48,919,543 |
|
|
|
|
|
|
| APPROPRIATION |
|
|
|
| PROPOSED
ISSUE OF BONUS SHARES |
|
|
|
| IN
THE RATIO OF 1:10 |
|
34,629,730 |
|
|
|
|
------------------ |
|
|
|
|
14,289,813 |
|
|
|
|
|
|
| UNAPPROPRIATED
PROFIT / (LOSS) B/F |
|
(6,349,616) |
|
|
|
|
------------------ |
|
| UNAPPROPRIATED
PROFIT C/F |
|
7,940,197 |
|
|
------------------ |
|
|
| After
expansion and with a stability in selling prices, it is hoped that the year
1999-2000 will close |
|
| with
better results. |
|
|
| BONUS
SHARES: |
|
|
| The
Directors now are pleased to recommend to issue Bonus Shares @ 10% (1 share
for every 10 shares |
|
| held). |
|
|
| YEAR
2000 COMPLIANCE: |
|
|
| Management
is aware of the Year 2000 problem anti has taken appropriate steps, including
upgrading |
|
| the
computer systems. |
|
|
| PATTERN
OF SHAREHOLDING: |
|
|
| The
Shareholding Pattern of the company as on June 30, 1999 is included in the
Annual Report. |
|
|
| STAFF
& LABOUR: |
|
|
| The
relations between the management and workers remained cordial throughout the
year. The Directors |
|
| wish
to place on record their appreciation for the efforts and good work done by
the Staff and the |
|
| Workers
and expect that they will show greater zeal in further improving the
performance of the |
|
| Company. |
|
|
| AUDITORS: |
|
|
| The
present Auditors M/s. F.R. Merchant & Co., Chartered Accountants, retire
and being eligible offer |
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| them-selves
for reappointment as Auditors of the Company for the year 1999-2000. |
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|
|
|
For and on behalf of the Board |
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|
|
|
|
|
|
ABDUL AZIZ ESSA |
|
| KARACHI:
November 29, 1999 |
|
Chairman/Chief Executive |
|
|
|
| FINANCIAL
HIGHLIGHTS |
|
|
|
|
(Figures in
Thousand) |
|
|
|
|
|
|
|
|
1999 |
1998 |
1997 |
1996 |
1995 |
1994 |
|
|
|
|
|
|
|
|
|
|
|
| NET SALES |
|
377,904 |
172,571 |
270,954 |
300,613 |
310,612 |
338,811 |
|
|
| RESULT |
|
|
|
|
|
|
|
|
|
| PROFIT BEFORE TAX |
|
50,920 |
(10,143) |
11,918 |
41,614 |
88,845 |
15,915 |
|
| PROFIT
AFTER TAX |
|
48,920 |
(11,043) |
16,267 |
29,015 |
70,670 |
114,211 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| NET
RETURN OF TURNOVER % |
|
12.94 |
(6.40) |
600 |
9.65 |
2,275 |
33.71 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| CURRENT
ASSETS |
|
281,339 |
229,423 |
188,831 |
184,302 |
156,415 |
109,566 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| CURRENT
LIABILITIES |
|
281,336 |
254,363 |
171,174 |
127,282 |
90,633 |
63,969 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
|
|
| CURRENT
RATIO |
|
|
|
| ASSETS:
LIABILITIES |
|
1.00:1 |
0.90:1 |
1.10:1 |
1.45:1 |
1.73:1 |
1.71:1 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| DISTRIBUTABLE
RESERVES |
|
222,570 |
173,650 |
216,175 |
228,528 |
199,513 |
147,508 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| SHAREHOLDERS
EQUITY |
|
568,867 |
519,948 |
530,991 |
514,724 |
342,611 |
260,629 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| NUMBER
OF SHARES |
|
34,630 |
34,630 |
31,482 |
28,620 |
14,310 |
11,312 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
|
|
| EARNING
PER SHARE |
|
|
|
| OF
RS. 10 EACH |
|
1.41 |
(0.32) |
52 |
101 |
494 |
10.10 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| BREAK-UP
VALUE |
|
| PER SHARE |
|
RS. |
16.43 |
15.01 |
16.87 |
17.98 |
23.94 |
23.04 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| PATTERN
OF SHAREHOLDING |
|
| AS
AT JUNE 30, 1999 |
|
|
| SHAREHOLDINGS |
|
|
SHARE |
TOTAL |
|
|
|
|
HOLDERS |
SHARES HELD |
|
|
|
|
|
|
| FROM |
1 |
TO |
100 |
216 |
8,311 |
|
| FROM |
101 |
TO |
500 |
424 |
93,237 |
|
| FROM |
501 |
TO |
1000 |
153 |
122,614 |
|
| FROM |
1001 |
TO |
5000 |
514 |
1,168,188 |
|
| FROM |
5001 |
TO |
10000 |
358 |
2,940,920 |
|
| FROM |
10001 |
TO |
15000 |
85 |
1,021,545 |
|
| FROM |
15001 |
TO |
20000 |
233 |
4,298,280 |
|
| FROM |
20001 |
TO |
25000 |
272 |
6,128,211 |
|
| FROM |
25001 |
TO |
30000 |
35 |
948,507 |
|
| FROM |
30001 |
TO |
35000 |
17 |
524,062 |
|
| FROM |
35001 |
TO |
40000 |
2 |
78,815 |
|
| FROM |
40001 |
TO |
45000 |
1 |
41,745 |
|
| FROM |
45001 |
TO |
50000 |
2 |
95,648 |
|
| FROM |
50001 |
TO |
55000 |
1 |
53,000 |
|
| FROM |
55001 |
TO |
60000 |
2 |
114,620 |
|
| FROM |
70001 |
TO |
75000 |
1 |
70,409 |
|
| FROM |
120001 |
TO |
130000 |
1 |
120,002 |
|
| FROM |
140001 |
TO |
150000 |
1 |
140,861 |
|
| FROM |
150001 |
TO |
160000 |
2 |
310,411 |
|
| FROM |
160001 |
TO |
170000 |
1 |
164,666 |
|
| FROM |
190001 |
TO |
200000 |
1 |
193,778 |
|
| FROM |
275001 |
TO |
300000 |
1 |
295,898 |
|
| FROM |
450001 |
TO |
500000 |
1 |
480,455 |
|
| FROM |
800001 |
TO |
900000 |
4 |
3,409,341 |
|
| FROM |
1000001 |
TO |
1025000 |
4 |
4,040,916 |
|
| FROM |
1500001 |
TO |
2000000 |
1 |
1,530,650 |
|
| FROM |
2500001 |
TO |
3000000 |
1 |
2,652,921 |
|
| FROM |
3500001 |
TO |
4000000 |
1 |
3,581,721 |
|
|
------------------ |
------------------ |
|
|
|
2365 |
34,629,723 |
|
|
|
|
========== |
========== |
|
|
| CATEGORIES
OF SHAREHOLDERS |
NUMBER |
SHARES HELD |
PERCENTAGE |
|
|
| INDIVIDUALS |
|
2317 |
32,680,001 |
94.37 |
|
| INVESTMENT
COMPANIES |
|
27 |
655,168 |
189 |
|
| INSURANCE
COMPANIES |
|
4 |
441,059 |
1.27 |
|
| JOINT
STOCK COMPANIES |
|
8 |
5,599 |
0.02 |
|
| FINANCIAL
INSTITUTIONS |
|
9 |
847,905 |
2.45 |
|
| CORPORATE
LAW AUTHORITY |
-- |
-- |
-- |
|
| ADMINISTRATOR
ABANDONED |
-- |
-- |
-- |
|
| PROPERTY |
|
-- |
-- |
-- |
|
| CHARITABLE |
|
-- |
-- |
-- |
|
| OTHERS |
|
-- |
-- |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
2365 |
34,629,732 |
100 |
|
|
|
|
========== |
========== |
========== |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of ESSA CEMENT INDUSTRIES LIMITED as
at |
|
| June
30, 1999 and the related profit and loss account and statement of changes in
financial |
|
| position,
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 and profit and loss account, together with the notes |
|
| thereon,
have been drawn up in conformity with the Companies Ordinance, |
|
| 1984
and are in agreement with the books of account and are further in |
|
| accordance
with accounting policies consistently applied; |
|
|
|
| ii)
the expenditure incurred during the year was for the purpose of the |
|
| Company's
business; and |
|
|
| iii)
the business conducted, investments made and the expenditure incurred |
|
| during
the year were in accordance with the objects of the Company; |
|
|
| c)
in our opinion and to the best of our information and according to the
explanations |
|
| given
to us, the balance sheet, profit and loss account and the statement of |
|
| changes
in financial position, 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 profit and the changes in the financial position for the
year |
|
| then ended; and |
|
|
| d)
in our opinion, no zakat was deductible at source under the Zakat & Ushr
Ordinance, 1980. |
|
|
|
|
|
|
|
|
F.R. MERCHANT & CO. |
|
| KARACHI:
November 29, 1999 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised |
|
|
|
| 50,000,000
ordinary shares of Rs, 10/- each |
|
|
500,000,000 |
500,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
3 |
346,297,320 |
3,462,973,201 |
|
| Reserves |
|
4 |
222,569,927 |
173,650,384 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
568,867,247 |
519,947,704 |
|
|
|
|
|
|
| LONG
TERM LOANS |
|
5 |
670,626,419 |
634,379,446 |
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
|
| SUBJECT
TO FINANCE LEASE |
|
6 |
21,615,696 |
26,853,332 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
maturity of long term loans |
|
5 |
152,049,049 |
93,848,939 |
|
| Current
maturity of liabilities against |
|
|
|
| assets
subject to finance lease |
|
6 |
18,245,171 |
16,346,121 |
|
| Creditors,
accured and other liabilities |
|
7 |
222,432,437 |
143,733,796 |
|
| Running
finances under mark-up arrangements |
|
8 |
56,122,584 |
109,848,174 |
|
| Provision
for taxation |
|
|
2,617,333 |
617,333 |
|
| Unclaimed
dividend |
|
|
163,891 |
163,891 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
451,630,465 |
364,558,254 |
|
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
9 |
------------------ |
------------------ |
|
|
Rupees |
|
|
1,712,739,827 |
1,545,738,736 |
|
|
|
|
========== |
========== |
|
|
|
|
| FIXED
ASSETS - Tangible |
|
|
|
| Operating
Assets |
|
10 |
1,139,993,459 |
301,494,015 |
|
| Capital
work-in-progress |
|
11 |
287,266,655 |
1,010,636,771 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,427,260,114 |
1,312,130,786 |
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
4,140,346 |
4,185,346 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores
and spares |
|
12 |
108,194,150 |
99,762,417 |
|
| Stock-in-trade |
|
13 |
97,968,749 |
82,406,066 |
|
| Trade debts |
|
14 |
48,024,954 |
27,034,224 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
15 |
15,287,311 |
12,169,396 |
|
| Cash
and bank balances |
|
16 |
11,864,203 |
8,050,501 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
281,339,367 |
229,422,604 |
|
|
|
|
------------------ |
------------------ |
|
|
Rupees |
1,712,739,827 |
1,545,738,736 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form am integral part of these accounts, |
|
|
|
ABDUL AZIZ ESSA |
|
JAWED AZIZ ESSA |
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
| Sales |
|
|
641,982,765 |
292,291,858 |
|
| Less:
Excise duty |
|
|
264,078,816 |
120,350,425 |
|
|
|
|
------------------ |
------------------ |
|
| Net sales |
|
|
377,903,949 |
172,571,433 |
|
| Cost of sales |
|
17 |
300,248,227 |
158,281,301 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
77,655,722 |
14,290,132 |
|
|
|
|
| Administration
and selling |
|
|
|
| expenses |
|
|
18 |
9,203,885 |
7,988,877 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
|
68,451,837 |
6,301,590 |
|
| Other income |
