| Javedan Cement Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| Corporate
Information |
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| Notice
of Annual General Meeting |
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| Directors'
Report to the Shareholders |
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| Pattern
of Shareholding |
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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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| Statement
of Changes in Financial Position |
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| Notes
to the Accounts |
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| CORPORATE
INFORMATION |
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| BOARD
OF DIRECTORS: |
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Muhammad Nawaz Tiwana |
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Chairman |
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M. P. Gangwani |
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Managing Director |
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Hussain Ahmed Khan |
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Samir Ahmed |
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Behram Hassan |
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Muhammad Sharif Shafique |
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Muhammad Shamim Siddiqui |
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Muhammad Ashraf Chaudhry |
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Khawaja Saqib Naim |
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| SECRETARY: |
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|
S.J. Hyder |
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| AUDITORS: |
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Taseer Hadi Khalid &
Co. |
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Chartered Accountants, |
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Karachi |
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| BANKERS: |
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Muslim Commercial Bank
Ltd. |
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National Bank of Pakistan |
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Habib Bank Ltd. |
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| REGISTERED
OFFICE: |
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AI-Haroon, 2nd Floor |
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10-Agha Khan III Road, |
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Karachi-74400 |
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Tel: 7725961-62 |
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Fax: 92-21-7767302 |
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Telegram: JAVCEMT |
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| WORKS: |
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Manghopir, |
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Karachi-75890 |
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Tel: 6980026-27 |
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Fax: 92-21-6980132 |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 37th Annual General Meeting of Shareholders of
Javedan Cement |
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| Limited,
Karachi, will be held at 11:00 a.m. on Thursday, the 30th December, 1999, at
Hotel Paradise, |
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| Abdullah
Haroon Road, Karachi-3, in order to transact the following business:- |
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| 1.
To confirm the Minutes of the 36th Annual General Meeting. |
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| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended |
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| 30th
June, 1999, together with the Reports of Directors and Auditors thereon. |
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| 3.
To appoint Auditors and fix their remuneration. Present Auditors M/s Taseer
Hadi Khalid & |
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| Co.,
Chartered Accountants, have retired. However, we have received a notice under
section |
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| 253
of the Companies Ordinance 1984 from a shareholder for appointment of M/s
Ibrahim |
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| Shaikh
& Company, Chartered Accountants, as Auditors of the Company for the
financial |
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| year
1999-2000. The have also given their consent for appointment. |
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| 4.
Any other business with the permission of the Chair. |
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By order of the Board |
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|
S. J. HYDER |
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| Karachi,
07th December, 1999. |
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Company Secretary |
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| NOTES: |
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| 1.
The Share Transfer books of the Company will remain closed from 21.12.1999 to
30.12.1999 |
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| (both
days inclusive). |
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| 2.
Shareholders are requested to notify the Company of change in their
addresses, if any. |
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| 3.
Shareholders are further requested to quote their Folio number in all
correspondence with |
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| the
Company and at the time of attending Annual General Meeting. |
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| 4.
A member entitled to attend and vote at this meeting is entitled to appoint
another member |
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| as
his/her proxy. Proxies, in order to be effective must be received at the
Registered Office |
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| of
the Company not less than 48 hours before the time appointed for the Meeting. |
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| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
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| The
Directors welcome the Members at the 37th Annual General Meeting of the
Company |
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| and
have pleasure in presenting annual report alongwith Audited Accounts and
Auditor's Report |
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| thereon,
for the year ended June 30th 1999. The Company during the year under review
sustained |
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| a
loss of Rs 103.771 million before tax as against net loss of Rs 64.730
million during the |
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| year
1997-98. The reasons for incurring losses of Rs 103.771 million were on
account of lower |
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| production
and sales of cement to the extent of 154,750 tonnes and 134,655 tonnes
respectively |
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| during
the year as compared to last year. The performance of the company in terms of
production |
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| and
sales in the year under review is as follows:- |
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| The
main reasons of loss during the year were reduced sales volume and increased
cost |
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| of
production due. to increased labour cost on account of 50% closure and with
no significant |
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| increase
in sale-price. |
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| PRODUCTION: |
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| It
is to inform the members that the Company produced 210,909 tonnes Of clinker
and |
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| 298,746 tonnes of cement in the year under review. |
The production of the
year under review |
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| is
compared with that of last year hereunder: |
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|
Increase/ |
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|
(Decrease) |
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|
Over Last |
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|
1998-99 |
1997-98 |
Year |
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|
(Tonnes) |
(Tonnes) |
(Tonnes) |
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|
| Clinker
Production |
|
210,909 |
398,538 |
(187,629) |
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| Cement
Production |
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| Ordinary
Portland Cement |
|
244,836 |
331,243 |
(86,407) |
|
| Slag Cement |
|
37,657 |
108,687 |
(71,030) |
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| Sulphate
Resisting Cement |
|
16,253 |
13,566 |
2,687 |
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|
------------------ |
------------------ |
------------------ |
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|
298,746 |
453,496 |
(154,750) |
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|
========== |
========== |
========== |
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| Due
to low demand, production was partly suspended during the current year which
resulted |
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| in
under utilization of capacity. During the year, the company has closed a part
of the cement plant |
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| (2
kilns of semi dry process) which represents about 50 percent of the
production capacity of clinker. |
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| MARKETING: |
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| During
the year, less demand and more supply position of cement persisted in he
country. |
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| Construction
industry remained in poor shape. The Company continued to face difficulty in
selling |
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| its
products in bulk as compared to private manufacturers due to the fierce
competition from them. |
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| As
a result, there was a decrease in sale of cement during the year to the
extent of 134,655 tonnes |
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| as under:- |
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|
Increase/ |
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|
(Decrease) |
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|
Over Last |
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|
1998-99 |
1997-98 |
Year |
|
|
(Tonnes) |
(Tonnes) |
(Tonnes) |
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|
|
| Ordinary
Portland Cement |
|
249,305 |
323,478 |
(74,173) |
|
| Slag Cement |
|
39,174 |
106,200 |
(67,026) |
|
| Sulphate
Resisting Cement |
|
18,423 |
11,879 |
6,544 |
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|
------------------ |
------------------ |
------------------ |
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|
306,902 |
441,557 |
(134,655) |
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|
========== |
========== |
========== |
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| DIVIDEND: |
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| In
view of the losses, no dividend is being recommended for the year 1998-99. |
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| EARNING
PER SHARE: |
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| Rs.
- 11.72 (Minus Rupees Eleven and Paisa Seventy Two) |
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| GOING
CONCERN: |
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| As
regards Auditors' observation regarding "Going Concern", we report
that since it is neither |
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| possible
to undertake BMIR nor we are in a position to restructure the loans, nothing
could be |
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| done
to rectify the situation. |
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| PROVISIONS
FOR DOUBTFUL DEBTS: |
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| The
Directors consider the provision for doubtful debts as sufficient. However,
the receivables |
|
| shall
be scrutinised closely for appropriate adjustment subsequently, as suggested
by the auditors. |
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|
| MISSING
ASSETS ITEMS: |
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| Physical
verification of fixed assets had been done by company's staff members.
However, |
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| the
report was not reliable. Therefore, the job of "Physical Verification of
Fixed Assets" has |
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| been
given to a firm of Chartered Accountants. After the receipt of their final
report, the clear |
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| position
regarding "Missing Items" will be known. |
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| PAYMENT
OF DEBTS: |
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| Due
to poor liquidity position, only part-payment against the installments of the
loan could |
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| be
made. The Company succeeded in getting the loans rescheduled from the holding
Corporation. |
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|
| DIRECTORS: |
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| Since
the last Annual General Meeting, the following change has taken place in the
Board |
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| of
Directors of the Company :- |
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| Mr.
Samir Ahmed has been nominated as director by National Investment Trust Ltd.
in place |
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| of
Mr. Razi-ur-Rehman Khan. |
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| While
welcoming the new director, we place on record our appreciation for the
valuable |
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| services
rendered by the outgoing director. |
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| AUDITORS: |
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| Present
auditors M/s Taseer Hadi Khalid & Co., Chartered Accountants, have
retired. However, |
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| the
Board has recommended the appointment of M/s Ibrahim, Shaikh & Co.,
Chartered Accountants, |
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| as
auditors of the company for the financial year 1999-2000. |
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|
| YEAR
2000 COMPLIANCE OF COMPUTER SYSTEM: |
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| During
the year the company have obtained a certificate from M/s. Dadabhoy Software
Company |
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| relating
to compliance of year 2000 issue of computer system and applications. |
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| ACKNOWLEDGMENT: |
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| The
Chairman and Directors of the Company place on record the appreciation for
the hard |
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| work
done by the Workers, Staff & Officers of the Company during the year
1998-99 with the |
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| hope
that they would accelerate their joint efforts and dedication for achieving
yet better results |
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| during
the forthcoming years. |
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|
For and on behalf of the Board |
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|
(M.P. GANGWANI) |
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| Karachi:
30th November, 1999 |
|
Managing Director |
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| FORM "A" |
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| PATTERN
OF HOLDING OF THE SHARES |
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| AS
AT 30TH JUNE, 1999 |
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| No. of |
From |
To |
Total |
|
| Shareholders |
|
shares held |
|
|
|
| 1750 |
1 |
100 |
47,631 |
|
|
| 616 |
101 |
500 |
164,557 |
|
|
| 75 |
501 |
1000 |
54,646 |
|
|
| 65 |
1001 |
5000 |
128,384 |
|
|
| 3 |
5001 |
10000 |
13,023 |
|
|
| 1 |
10001 |
15000 |
14,666 |
|
|
| 1 |
100001 |
120000 |
118,548 |
|
|
| 1 |
135001 |
140000 |
139,893 |
|
|
| 1 |
1120001 |
1150000 |
1,369,309 |
|
|
| 1 |
6745001 |
6750000 |
6,749,343 |
|
|
| ------------------ |
|
------------------ |
|
| 2514 |
|
8,800,000 |
|
|
| ========== |
|
========== |
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|
|
| Categories
of Shareholders |
|
Number |
Shares held |
Percentage |
|
|
| 1. Individuals |
|
|
2502 |
395,350 |
4.49 |
|
| 2.
Financial Institutions |
|
3 |
1,487,857 |
16.91 |
|
| 3.
Insurance Companies |
|
3 |
161,979 |
1.84 |
|
| 4.
Commercial Banks |
|
5 |
5,471 |
0.06 |
|
| 5. Others |
|
|
| a)
State Cement Corporation |
|
|
| of
Pakistan (Pvt) Ltd. |
|
1 |
6,749,343 |
76.70 |
|
|
------------------ |
------------------ |
------------------ |
|
|
2514 |
8,800,000 |
100.00 |
|
|
========== |
========== |
========== |
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|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of Javedan Cement Limited as at 30th
June, |
|
| 1999
and the related profit and loss account and the 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)
trade debtors, advances and other receivables include debts amounting to Rs.
6,221,482 |
|
| which
have been outstanding for a considerable period of time. A provision of |
|
| Rs.
2,327,096 has already been made against these debts. The mana9ement |
|
| considers
that these amounts are recoverable. However, age of the balances suggests |
|
| that
these may not be recoverable in full. Accordingly, we consider that provision |
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| for
the remaining amounts of Rs. 3,894,386 should be made against these debts; |
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|
|
|
| b)
operating fixed assets include certain assets costin9 Rs. 9,367,797 having a
written |
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| down
value of Rs. 1,661,516, which were identified as bein9 missin9. Accordingly, |
|
| we
consider that these assets should be written off; |
|
|
|
|
| c)
in our opinion proper books of account have been kept by the Company as
required |
|
| by
the Companies Ordinance, 1984; |
|
|
|
|
|
| d)
In our opinion: |
|
|
|
|
| i)
the balance sheet and profit and loss account together with the notes thereon |
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| have
been drawn up in conformity with the Companies Ordinance, 1984, |
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| and
are in agreement with the books of account and are further in accordance |
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| with
the accountin9 policies consistently applied; |
|
|
|
| ii)
the expenditure incurred during the year was for the purpose of the company's |
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| business; and |
|
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| iii)
the business conducted, investments made and the expenditure incurred during |
|
| the
year were in accordance with the objects of the Company; |
|
|
|
| e)
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 except |
|
| for
the financial effect of the matters referred to in para (a) and (b) above,
respectively |
|
| give
a true and fair view of the state of the company's affairs as at 30th June |
|
| 1999
and of the loss the changes in financial position for the year then ended; |
|
|
|
|
| f)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, |
|
| 1980; and |
|
|
|
|
|
|
| g)
without qualifying our opinion, we draw attention to the fact that the
company has |
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| suffered
losses amounting to Rs. 353,931,505 upto the year ended 30th June 1999 |
|
| which
resulted in negative equity of Rs. 190,465,903 and as of that date, the |
|
| company's
current liabilities exceeded its current assets by Rs. 90,036,802. These |
|
| financial
statements have been prepared on a going concern basis, the validity |
|
| of
which is dependent on the continuing financial support by the parent company, |
|
| State
Cement Corporation of Pakistan (Private) Limited. |
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|
|
|
TASEER HADI KHALID & CO. |
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| Karachi:
7th December, 1999 |
|
Chartered Accountants |
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|
|
| BALANCE
SHEET AS AT 30TH JUNE, 1999 |
|
|
|
|
|
|
(RUPEES) |
|
|
Note |
1999 |
1998 |
|
|
|
|
|
| SHARE
CAPITAL & RESERVES |
|
|
|
| Authorised
share capital |
|
|
|
| 15,000,000
ordinary shares of |
|
|
|
| Rs. 10/- each |
|
|
|
150,000,000 |
150,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed & paidup share capital |
|
3 |
88,000,000 |
88,000,000 |
|
|
|
|
|
| Capital Reserve |
|
4 |
11,965,602 |
11,965,602 |
|
| General Reserve |
|
|
63,500,000 |
63,500,000 |
|
| Accumulated
loss carried forward |
|
|
(353,931,505) |
(246,553,801) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(190,465,903) |
(83,088,199) |
|
| LONG
TERM LOANS - Secured |
|
6 |
344,250,000 |
285,000,000 |
|
| LONG
TERM DEPOSITS |
|
7 |
604,107 |
604,107 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term loans - Unsecured |
|
8 |
-- |
30,000,000 |
|
| Current
maturity and overdue |
|
|
|
|
| installments
of long term loan |
|
9 |
114,750,000 |
149,000,000 |
|
| Due
to parent company - Unsecured |
|
10 |
14,627,348 |
10,931,718 |
|
| Accrued
markup on long term loan |
|
|
183,126,260 |
122,119,072 |
|
| Accrued
markup on short term loan |
|
|
12,658,497 |
8,441,411 |
|
| Creditors,
accrued expenses and |
|
|
|
|
| other liabilities |
|
11 |
79,788,456 |
108,208,737 |
|
| Provision
for Taxation |
|
|
13,159,867 |
9,553,624 |
|
| Unclaimed
Dividend |
|
|
1,963,802 |
1,964,127 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
420,074,230 |
440,218,689 |
|
| CONTINGENCIES |
|
12 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
574,462,434 |
642,734,597 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
Fixed Assets |
|
|
13 |
206,888,427 |
223,931,170 |
|
| LONG
TERM DEPOSITS |
|
|
14 |
11,971,685 |
5,612,554 |
|
| LONG
TERM LOANS TO |
|
|
|
|
| EMPLOYEES
- Considered good |
|
|
15 |
25,564,894 |
25,649,626 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores & spares |
|
|
16 |
151,532,745 |
150,335,222 |
|
| Stock-in-Trade |
|
|
17 |
35,812,347 |
111,265,372 |
|
| Trade
debtors - Unsecured |
|
|
|
| considered
good |
|
18 |
1,168,975 |
1,174,542 |
|
| Due
from associated companies |
|
|
|
| -
Unsecured Considered good |
|
19 |
788,942 |
1,040,744 |
|
| Current
maturity of long term |
|
|
|
| loans
to employees |
|
|
10,072,209 |
9,732,014 |
|
| Advances,
deposits, prepayments |
|
|
|
| and
other receivables |
|
20 |
48,337,408 |
41,254,020 |
|
| Cash
& bank balances |
|
21 |
82,324,802 |
72,739,333 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
330,037,428 |
387,541,247 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
574,462,434 |
642,734,597 |
|
|
|
|
========== |
========== |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
MUHAMMAD NAWAZ TIWANA |
|
M.P. GANGWANI |
|
|
Chairman |
|
Managing Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30TH JUNE, 1999 |
|
|
|
|
|
(RUPEES) |
|
|
|
Note |
1999 |
1998 |
|
|
|
|
| SALES - Net |
|
22 |
677,549,165 |
928,402,195 |
|
| COST
OF GOODS SOLD |
|
23 |
(699,753,056) |
(912,700,556) |
|
|
|
|
|
------------------ |
------------------ |
|
| GROSS
(LOSS)/PROFIT |
|
|
(22,203,891) |
15,701,639 |
|
| OPERATING
EXPENSES |
|
|
(24,809,358) |
(26,570,607) |
|
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
LOSS |
|
|
(47,013,249) |
(10,868,968) |
|
| FINANCIAL
CHARGES |
|
|
(66,283,354) |
(64,231,717) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(113,296,603) |
(75,100,685) |
|
| OTHER
INCOME |
|
|
9,525,142 |
10,370,343 |
|
|
|
|
|
------------------ |
------------------ |
|
| LOSS
BEFORE TAXATION |
|
|
(103,771,461) |
(64,730,342) |
|
| TAXATION |
|
|
27 |
|
|
| Current |
|
|
(3,606,243) |
(4,827,851) |
|
| Prior |
|
|
-- |
(389,883) |
|
| Deferred |
|
|
-- |
50,829,297 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(3,606,243) |
45,611,563 |
|
|
|
|
------------------ |
------------------ |
|
| LOSS
AFTER TAXATION |
|
|
(107,377,704) |
(19,118,779) |
|
| ACCUMULATED
LOSS BROUGHT FORWARD |
|
|
(246,553,801) |
(227,435,022) |
|
|
|
|
|
------------------ |
------------------ |
|
| ACCUMULATED
LOSS |
|
|
(353,931,505) |
(246,553,801) |
|
|
|
|
========== |
========== |
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
MUHAMMAD NAWAZ TIWANA |
|
M.P. GANGWANI |
|
|
Chairman |
|
Managing Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE YEAR ENDED 30TH JUNE, 1999 |
|
|
|
|
|
|
(RUPEES) |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
| Loss
before taxation |
|
(103,771,461) |
(64,730,342) |
|
| Adjustments
for: |
|
|
|
| Depreciation |
|
23,447,900 |
25.567,325 |
|
| Provision
for Gratuity |
|
-- |
2,003,614 |
|
| Gain
on Disposal of Fixed Assets |
|
(125,040) |
(117,199) |
|
| Financial
Charges |
|
66,283,354 |
64,231,717 |
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(14,165,247) |
26,955,115 |
|
|
|
|
|
| Changes
in operating assets and liabilities |
|
|
| (Increase)/Decrease
in stores and pares |
|
|
(1,197,523) |
27,296,813 |
|
| Decrease/(Increase)
in stock-in-trade |
|
|
75,453,025 |
(37,531,656) |
|
| Decrease
in trade debts |
|
|
5,567 |
2,233 |
|
| Decrease/(Increase)
in due from associated companies |
|
251,802 |
(224,963) |
|
| (Increase)/Decrease
in advances, deposits, |
|
|
|
| prepayments
and other receivables |
|
|
(2,795,158) |
7,709,012 |
|
| (Decrease)
in long term deposits |
|
|
-- |
(4,680,000) |
|
