| Mustehkam Cement Limited |
|
|
|
|
|
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|
|
|
| Annual
Report 1999 |
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|
| CONTENTS |
|
|
| Board
of Directors |
|
| Notice of Annual General
Meeting |
|
| Directors'
Report to the Shareholders |
|
| Pattern
of Holding of Shares |
|
| Auditors' Report to the Members |
|
| Balance Sheet |
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
|
|
| BOARD
OF DIRECTORS |
|
MUHAMMAD NAWAZ TIWANA |
|
|
Chairman |
|
|
|
KHAWAJA SAQIB NAIM |
|
|
Chief Executive |
|
|
|
MUHAMMAD IRIAZ KHAN |
|
|
|
S. M. FAKHIR HASAN |
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|
|
BEHRAM HASAN |
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|
|
MUHAMMAD ILYAS DAR |
|
|
|
MUHAMMAD ASHRAF CHAUDHRY |
|
|
| SECRETARY |
|
MAHMOOD AHMED KHAN |
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|
Chartered Secretary |
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|
| AUDITORS |
|
MUNIFF ZIAUDDIN &
CO., |
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|
Chartered Accountants, |
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|
M-40/E, Bank Road, |
|
|
Rawalpindi Cantt. |
|
|
| BANKERS |
|
Habib Bank Limited. |
|
|
National Bank of
Pakistan. |
|
|
| REGISTERED
OFFICE |
|
Gul-e-Akra Plaza, |
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|
147-Murree Road, |
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|
Rawalpindi Cantt. |
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|
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| FACTORY |
|
HATTAR, |
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|
Distt. Haripur. |
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| NOTICE
OF ANNUAL GENERAL MEETING |
|
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| Notice
is hereby given that the Annual General Meeting of the Shareholders of |
|
| Mustehkam
Cement Limited will be held at Flashman's Hotel, The Mall, Rawalpindi Cantt. |
|
| on
Thursday the 30th December, 1999 at 10.00 a.m. for the purpose of transacting
the |
|
| following
business:- |
|
|
| 1. To confirm the minutes of previous Annual
General Meeting. |
|
|
| 2.
To receive and adopt the audited accounts of the Company for the period |
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| ended
June 30, 1999 together with the reports of directors and auditors |
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| thereon. |
|
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| 3.
To appoint auditors and fix their remuneration. |
|
|
| Under
Sub-Section(1) of Section 253 of Companies Ordinance 1984, the |
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| company
has received notice for a resolution at the Annual General |
|
| Meeting
from a shareholder to appoint Riaz Ahmad & Co., Chartered |
|
| Accountants,
2-A, ATS Centre, 30-West Fazal-uI-Haq Road, Blue Area, |
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| Islamabad
as auditors of the company to hold office from the conclusion |
|
| of
above mentioned Annual General Meeting untill the conclusion of next |
|
| Annual
General Meeting in place of retiring auditors Muniff Zia-ud-Din & |
|
| Co.,
Chartered Accountants, M-40-E, Bank Road, Rawalpindi Cantt. |
|
|
| 4.
To transact any other ordinary business of the Company with permission of the
Chair. |
|
|
| The
share transfer books of the Company will remain closed from 23rd December, |
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| 1999
to 29th December, 1999 (both days inclusive). |
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| RAWALPINDI |
|
By Order of the Board |
|
| Dated:
December 4, 1999 |
|
|
MAHMOOD AHMAD KHAN |
|
|
Secretary |
|
| Notes: |
|
|
| 1.
A member entitled to attend and vote at this meeting is entitled to appoint |
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| another
member as his/her proxy to attend and vote instead of him/her. |
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| Proxies,
in order to be effective, must be received at the registered office of. |
|
| the
Company not less than 48 hours before the time appointed for the |
|
| meeting. |
|
|
| 2.
Shareholders are requested to immediately notify the Company of any |
|
| change
in their address. |
|
|
| 3.
Shareholders are further requested to quote their folio number in all |
|
| correspondence
with the Company and at the time of attending the Annual |
|
| General
Meeting. |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| The
Directors of your Company take pleasure in placing before you the 45th Annual |
|
| Report
together with the Audited Accounts and the Auditors' Report thereon for the
year |
|
| ended
30th June, 1999. |
|
|
| PRODUCTION |
|
|
| 112,030
tonnes of Clinker and 124,434 tonnes of cement was produced against the |
|
| target
of 280,000 / 294,000 tonnes respectively during the year 1998-99 as operation
of |
|
| the
plant was closed w.e.f. 10-01-99 on the instructions of the Privatization
Commission |
|
| and
the Board of Directors. |
|
|
| MARKETING |
|
|
| The
Company sold 136,558 tonnes of cement during the year against the target of |
|
| 294,000
tonnes. |
|
|
| PRICING
POLICY |
|
|
| Last
year unhealthy price war was experienced which persisted in the early part of |
|
| year
under report as well. We had to make downward revision in price many times. |
|
| Upward
revision in price took place w.e.f. 16-10-1998 which raised our booking price
to |
|
| Rs.
4,300/- per tonne. This price remained operative upto 22-04-1999. With
downward |
|
| revision
in excise duty, price was revised and booking price fixed at Rs. 3,820 per
tonne |
|
| w.e.f.
23-04-1999 which remained operative up to 30-06-1999. |
|
|
| FINANCIAL |
|
|
| The
Company's plant being closed has no cash resources of its own. Its cash |
|
| requirements
including salary & wages, utility bills etc are financed by SCCP treating
the |
|
| same
as loan bearing 14% interest per annum. |
|
|
| Average
ex-factory price of cement was Rs. 3,800.17 per tonne and average retention |
|
| price
to the company after deduction of excise duty and SCCP cement surcharge was |
|
| Rs.
2,165.09 per tonne against the cost to make and sell of Rs. 3,917.09 per
tonne |
|
| (including
fixed cost of Rs. 2,147.38 per tonne) during the year. Retention price during
the |
|
| last
year was Rs. 1,925.85 per tonne against the cost to make and sell of Rs.
2,649.26 per |
|
| tonne
(including fixed cost of Rs. 923.68 per tonne). Manufacturing cost has
increased due |
|
| to
increase in fixed charges as a result of closure of the plant w.e.f.
10-01-99. Operational |
|
| loss
for the fiscal period was Rs. 239.251 million and after addition of revenue /
other |
|
| income
of Rs. 8.013 million, the company sustained a net loss for the year amounting
to |
|
| Rs.
231.238 million. |
|
|
| The
results are summarised as under :- |
|
|
|
(Rupees in million) |
|
|
| Net
profit/(Ioss) for the year |
|
(231.238) |
|
| Adjustment
of prior year |
|
10.336 |
|
|
---------- |
|
| Net
profit/(Ioss) before tax |
|
(220.902) |
|
| Balance
brought forward |
|
(343.806) |
|
|
---------- |
|
| Total
profit/(Ioss) |
|
(564.708) |
|
| Provision
for taxation |
|
(0.557) |
|
|
---------- |
|
| Net
profit/(Ioss) after tax |
|
(565.265) |
|
|
========== |
|
| DIRECTORS |
|
|
| Since
the last Annual General Meeting Syed Asif Ali Shah, Mr. Muhammad Akhtar |
|
| and
Mr. Muhammad Akram relinquished the charge to act as Directors and Mr.
Muhammad |
|
| Riaz
Khan, Mr. Muhammad Ilyas Dar and Khawaja Saqib Naim were appointed Directors |
|
| in
their place. The Directors place on record their appreciation for the
valuable services |
|
| rendered
by the outgoing Directors and welcome the incoming Directors on the Board. |
|
|
| AUDITORS |
|
|
| The
auditors Muniff Zia-ud-Din & Co., Chartered Accountants retire and offer
their |
|
| services
for reappointment. |
|
|
| GENERAL |
|
|
| The
Company has relieved 611 workers and 26 officers under GHS/VSS scheme. |
|
| The
claim for payment of GHS/VSS for the remaining employees, who have opted
under |
|
| the
scheme, has been lodged with the Privatization Commission which is under
process. |
|
|
| For
and on behalf of the |
|
| Board
of Directors |
|
|
| RAWALPINDI |
|
KHAWAJA SAQIB NAIM |
|
| November
29, 1999 |
|
CHIEF EXECUTIVE |
|
|
|
| PATTERN
OF HOLDING OF SHARES |
|
| AS
ON JUNE 30, 1999 |
|
|
|
| NO.
of Shareholders |
Shareholding |
Total Shares Held |
|
|
From |
To |
|
|
|
|
| 3,760 |
1 |
100 |
81,947 |
|
| 701 |
101 |
500 |
140,429 |
|
| 96 |
501 |
1,000 |
68,470 |
|
| 81 |
1,001 |
5,000 |
148,279 |
|
| 12 |
5,001 |
10,000 |
78,051 |
|
| 2 |
10,001 |
15,000 |
26,632 |
|
| 1 |
15,001 |
20,000 |
20,000 |
|
| 1 |
20,001 |
25,000 |
21,933 |
|
| 1 |
30,001 |
35,000 |
34,905 |
|
| 1 |
60,001 |
65,000 |
60,200 |
|
| 1 |
105,001 |
110,000 |
108,060 |
|
| 1 |
1,020,001 |
1,025,000 |
1,023,160 |
|
| 1 |
10,505,001 |
10,510,000 |
10,507,934 |
|
| ---------- |
|
---------- |
|
| 4,659 |
|
12,320,000 |
|
| ========== |
|
========== |
|
|
|
|
|
| CATEGORIES
OF SHAREHOLDERS |
|
| AS
ON JUNE 30, 1999 |
|
|
|
| Particulars |
|
No. of Shareholders |
Shares held |
Percentage |
|
|
| Individuals |
|
4,473 |
510,907 |
4.15% |
|
| Investment
Companies |
5 |
38,598 |
0.31% |
|
| Insurance
Companies |
4 |
20,876 |
0.17% |
|
| Joint
Stock Companies |
4 |
79,825 |
0.65% |
|
| Financial
Institutions |
12 |
1,155,535 |
9.38% |
|
| State
Cement Corporation |
|
|
| of
Pakistan (Fvt) Limited |
1 |
10,507,934 |
85.29% |
|
| Deputy
Administrator Abandoned |
|
|
| Properties
(Bangladesh Citizens) |
159 |
6,324 |
0.05% |
|
| Securities
and Exchange |
|
|
| Commission
of Pakistan |
1 |
1 |
-- |
|
|
---------- |
---------- |
---------- |
|
|
4,659 |
12,320,000 |
100% |
|
|
|
========== |
========== |
========== |
|
|
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
|
| We
have audited the annexed balance sheet of MUSTEHKAM CEMENT LIMITED |
|
| as
at 30th June, 1999 and the related profit and loss account and Cash flow
statement |
|
| together
with the notes forming part thereof, for the year then ended and subject to
the |
|
| remarks that:- |
|
|
| As
shown in the financial statements, the company is carrying accumulated loss
of |
|
| Rs.
565,265 thousands and the current liabilities exceeded its current assets by |
|
| Rs.
371,990 thousands. These raise doubt that the company will be able to |
|
| continue
as a going concern. The financial statements do not include any |
|
| adjustments
relating to recoverability and classification of recorded asset amounts |
|
| or
to the amounts and classification of liabilities that might be necessary
should the |
|
| company
be unable to continue as a Going Concern. |
|
|
| We
state that we have obtained all the information and explanations which to the |
|
| best
of our knowledge and belief were necessary for the purpose 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:- |
|
|
| l)
the balance sheet and profit and loss account together with the |
|
| notes
thereof 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 |
|
| 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 |
|
| 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 30th June, 1999 and of the loss and the changes in |
|
| financial
position for the year then ended; and |
|
|
| d)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr |
|
| Ordinance,
1980. |
|
|
| Rawalpindi |
|
| Dated:
Dec. 03, 1999 |
|
MUNIFF ZIAUDDIN &
CO., |
|
|
CHARTERED ACCOUNTANTS |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
|
| CAPITAL
AND LIABILITIES |
|
NOTE |
1999 |
1998 |
|
|
(RUPEES IN THOUSAND) |
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorised
capital |
|
| 18,000,000
ordinary shares of Rs. 10/- each |
|
180,000 |
180,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
|
| 12,320,000
ordinary shares of Rs. 10/- each |
|
3 |
123,200 |
123,200 |
|
|
|
|
| RESERVES |
|
|
|
| Capital
reserve |
|
|
289 |
289 |
|
| Revenue
reserve |
|
4 |
130,888 |
130,888 |
|
| Retained
earnings |
|
(565,265) |
(343,806) |
|
|
---------- |
---------- |
|
|
(434,088) |
(212,629) |
|
|
---------- |
---------- |
|
|
(310,888) |
(89,429) |
|
| LONG
TERM LOANS AND DEFERRED LIABILITIES |
|
| Long
term loans |
|
5 |
299,430 |
205,059 |
|
| Deferred
taxation |
|
77,936 |
78,857 |
|
|
---------- |
---------- |
|
|
377,366 |
283,916 |
|
| LONG
TERM DEPOSITS |
|
6 |
3,356 |
3,576 |
|
| CURRENT
LIABILITIES |
|
| Bank
overdraft-secured |
|
7 |
27,974 |
-- |
|
| Current
maturity of long term loans |
|
8 |
130,489 |
136,060 |
|
| Due
to Associated Companies |
|
9 |
68,903 |
65,922 |
|
| Trade
creditors |
|
|
9,893 |
12,033 |
|
| Deposits/advances
from customers |
|
10 |
21,187 |
96,565 |
|
| Accrued
liabilities |
|
11 |
163,597 |
146,274 |
|
| Other
liabilities |
|
12 |
5,756 |
18,167 |
|
| Dividend
payable |
|
13 |
187,588 |
187,589 |
|
|
|
---------- |
---------- |
|
|
|
615,387 |
662,610 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
14 |
-- |
-- |
|
|
|
|
---------- |
---------- |
|
|
685,221 |
860,673 |
|
|
========== |
========== |
|
| PROPERTY AND ASSETS |
NOTE |
|
|
|
|
|
| FIXED
ASSETS - TANGIBLE |
|
| Operating
assets |
|
15 |
401,890 |
451,212 |
|
| Stores
held for capital expenditure |
|
36,893 |
32,021 |
|
|
438,783 |
483,233 |
|
|
| LONG
TERM LOANS AND DEPOSITS |
|
| Employees |
|
16 |
3,041 |
4,062 |
|
| Prime
Minister's Debt Retirement Scheme |
|
-- |
1,000 |
|
| (Qarz-e-Hasna) |
|
|
| CURRENT
ASSETS |
|
|
| Stores,
spares and loose tools - at cost |
|
17 |
178,081 |
192,838 |
|
| Stock in trade |
|
18 |
65.38 |
48,815 |
|
| Trade
debtors-considered good |
|
19 |
51 |
216 |
|
| Loans
and advances - employees |
|
20 |
7,389 |
22,518 |
|
| Due
from Associated Companies |
|
21 |
94 |
94 |
|
| Loans
and advances - others |
|
22 |
20,226 |
28,337 |
|
| Trade
deposits & prepayments |
|
23 |
6,750 |
3,883 |
|
| Interest
accrued |
|
|
21 |
280 |
|
| Other
receivables |
|
24 |
7,193 |
103 |
|
| Advance
Income Tax |
|
25 |
6,557 |
4,426 |
|
| Cash
and bank balances |
|
26 |
10,497 |
70,868 |
|
|
---------- |
---------- |
|
|
243,397 |
372,378 |
|
|
---------- |
---------- |
|
|
685,221 |
860,673 |
|
| The
annexed notes form an integral part of these accounts. |
|
========== |
========== |
|
| Auditors'
report to the members annexed. |
|
|
| S.
M. FAKHIR HASAN |
|
KHAWAJA SAQIB NAIM |
|
| DIRECTOR |
|
CHIEF EXECUTIVE |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
(RUPEES IN THOUSAND) |
|
|
| SALES - Net |
|
295,660 |
752,027 |
|
| COST
OF GOODS SOLD |
|
446,173 |
854,009 |
|
|
---------- |
---------- |
|
| GROSS
PROFIT/(LOSS) |
|
(150,513) |
(101,982) |
|
| OTHER
INCOME |
|
|
|
| Interest |
|
29 |
1,036 |
3,524 |
|
| Miscellaneous |
|
30 |
6,977 |
7,303 |
|
|
|
---------- |
---------- |
|
|
|
8,013 |
10,827 |
|
|
|
---------- |
---------- |
|
|
|
(142,500) |
(91,155) |
|
| OPERATING
EXPENSES |
|
|
|
|
| General
and administrative |
|
31 |
30,511 |
33,482 |
|
| Selling
and distribution |
|
32 |
2,604 |
4,839 |
|
| Auditors'
remuneration |
|
33 |
60 |
60 |
|
| Financial |
|
34 |
55,563 |
46,672 |
|
|
---------- |
---------- |
|
|
88,738 |
85,053 |
|
|
---------- |
---------- |
|
| NET
PROFIT/(LOSS) FOR THE YEAR |
|
(231,238) |
(176,208) |
|
| PRIOR
YEARS' ADJUSTMENTS |
|
35 |
10,336 |
12,431 |
|
|
|
|
---------- |
---------- |
|
| NET
PROFIT/(LOSS) BEFORE TAXATION |
|
(220,902) |
(163,777) |
|
| TAXATION |
|
36 |
(557) |
1,793 |
|
|
|
|
---------- |
---------- |
|
|
(221,459) |
(161,984) |
|
| UNAPPROPRIATED
PROFIT/(LOSS) BROUGHT FORWARD |
|
(343,806) |
(181,822) |
|
|
---------- |
---------- |
|
| UNAPPROPRIATED
PROFIT/(LOSS) |
|
(565,265) |
(343,806) |
|
|
|
---------- |
---------- |
|
| RETAINED
EARNING CARRIED FORWARD |
|
(565,265) |
(343,806) |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| S.
M. FAKHIR HASAN |
|
KHAWAJA SAQIB NAIM |
|
| DIRECTOR |
|
CHIEF EXECUTIVE |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30TH JUNE, 1999 |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
(RUPEES IN THOUSAND) |
|
| CASH
FLOW FROM OPERATING ACTIVITIES · |
|
| Loss
before taxation |
|
(163,777) |
(220,902) |
|
| ADJUSTMENT
FOR NON CASH ITEMS |
|
|
|
|
|
|
| Depreciation |
|
48,878 |
55,663 |
|
| (Profit)
on sale of fixed assets |
|
(1,801) |
-- |
|
| Provision
for obsolete stores & spares |
|
1,044 |
1,044 |
|
|
---------- |
---------- |
|
|
48,121 |
56,707 |
|
| (INCREASE)/DECREASE
IN CURRENT ASSETS' |
|
|
|
| Stores
& stocks |
|
55,990 |
22,778 |
|
| Deposits,
prepayments & other recoverables |
|
13,542 |
9,609 |
|
| Trade debtors |
|
165 |
379 |
|
|
---------- |
---------- |
|
|
69,697 |
32,766 |
|
| INCREASE/(DECREASE)
IN CURRENT ,LIABILITIES · |
|
|
|
| Trade
creditors |
|
(2,140) |
(10,854) |
|
| Other
liabilities |
|
(67,485) |
100,134 |
|
|
---------- |
---------- |
|
|
(69,625) |
89,280 |
|
|
---------- |
---------- |
|
| NET
CASH FLOW FROM OPERATING ACTIVITIES · |
|
(172,709) |
14,976 |
|
| CASH
FLOW FROM INVESTING ACTIVITIES - |
|
|
|
| Fixed
capital expenditure |
|
(4,943) |
4,834 |
|
| Long
term loans & deposits |
|
2,021 |
6,422 |
|
| Taxes paid |
|
(3,609) |
(10,292) |
|
| Sale
proceed of fixed assets |
|
2,316 |
-- |
|
|
---------- |
---------- |
|
|
(4,215) |
964 |
|
| CASH
FLOW FROM FINANCING ACTIVITIES · |
|
|
| Loan
received from S.C.C.P. |
|
88,800 |
59,500 |
|
| Bank
overdraft |
|
27,974 |
-- |
|
| Repayment
of SCCP loan |
|
- |
(18,648) |
|
| ,Long
term deposits |
|
(220) |
(227) |
|
| Dividend paid |
|
(1) |
(13) |
|
|
---------- |
---------- |
|
|
116,553 |
40,612 |
|
|
---------- |
---------- |
