| Pakistan Slag Cement Industries Limited |
|
|
|
|
|
| Annual
Report 1999 |
|
|
| Contents |
|
|
| Notice
of Meeting |
|
| Company
Information |
|
| Report of the Directors |
|
| Auditors'
Report |
|
| Balance Sheet |
|
|
| Profit and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Shareholders'
Statistics |
|
|
|
| Notice
of Annual General Meeting |
|
|
| Notice
is hereby given that the 10th Annual General Meeting of Pakistan Slag Cement
Industries Limited |
|
| will
be held on Monday, December 27, 1999 at 5.00 p.m. at Hotel Jabees, Abdullah
Haroon Road, Saddar, |
|
| Karachi,
to transact the following business: |
|
|
| 1.
To confirm the minutes of 9th Annual General Meeting held on December 26,
1998. |
|
|
| 2.
To receive and adopt the Report of Directors and Auditors together with
Audited Accounts for the year |
|
| ended
June 30, 1999. |
|
|
| 3.
To appoint Auditors for the year 1999-2000 and to fix their remuneration. |
|
|
| 4.
To transact any other business with the permission of the chair. |
|
|
|
By Order of the Board |
|
|
|
(Muhammad Shariq Aqeel) |
|
| Karachi
' December 4, 1999 |
|
Company 'Secretary |
|
|
| NOTES : |
|
|
| 1.
The register of members will remain closed from 26th December, 1999 to 1st
January, 2000 (both days |
|
| inclusive). |
|
|
| 2.A
member entitled to attend and vote at the meeting may appoint another member
as his/her proxy to |
|
| attend
and vote on his/her behalf. The instrument to appoint a proxy must be
received at the Company's |
|
| Registered
Office not less than 48 hours before the time of holding of the meeting. |
|
|
| 3.
Shareholders are requested to notify any change in their address immediately, |
|
|
|
| Company
Information |
|
|
| Board
of Directors |
|
|
| Chairman |
|
Jehangir Akber |
|
| Chief
Executive |
Eng. Ch. Ehsan Aziz |
|
|
|
Shafi Muhammad Khan Jatoi |
|
|
|
Muhammad Naeem Khan |
|
|
|
Nisar A. Korai |
|
|
|
Faiz Mohammad Brohi |
|
|
|
Ajaz Ali Panhor |
|
|
|
| Company
Secretary |
Muhammad Shariq Aqeel |
|
|
|
| Auditors |
|
Faruq Ali & Co., |
|
|
|
Chartered Accountants |
|
|
|
| Bankers |
|
Platinum Commercial Bank
Limited |
|
|
Muslim Commercial Bank
Limited |
|
|
National Bank of Pakistan |
|
|
United Bank Limited |
|
|
Allied Bank of Pakistan
Limited |
|
|
| Registered
Office |
4th Floor, Panorama
Center, |
|
|
|
Building No. 2, Doctors'
Plaza, |
|
|
Raja Ghazanfar Ali Khan
Road, |
|
|
Saddar, Karachi. |
|
|
Phone :5686095 |
|
|
Fax :5686095' |
|
|
| Factory |
|
DSU-6, Zulfiqarabad,
Karachi. |
|
|
Phone :(0201) 750129 -
750130 |
|
|
Fax : (0201) 750131 |
|
|
|
| Report
of the Directors |
|
|
| Dear
Shareholders, |
|
|
| Your
Directors are pleased to welcome you to the 10th Annual General Meeting of
the Company to present the |
|
| Annual
accounts and the Auditors Report thereon for the financial year ended June
30, 1999. |
|
|
| FINANCIAL
RESULTS |
|
|
| These
financial results are encouraging given the difficult economic climate
throughout the past two years, |
|
| following
the nuclear test and market constraints. However in spite of all such
difficulties, .during the year under |
|
| review,
the Company is now able to decrease its loss amounting to Rs. 6.00 million,
as compared to the last |
|
| year
ended June 30, 1998, a loss of Rs. 19.46 million. |
|
|
| The
Company has been awarded a contract by Ghazi Barotha Hydro Power Project for
the grinding & supply |
|
| of
50,000 MT of pure slag. The said contract will be helpful to run the company,
in the existing slump of the |
|
| cement
industry. |
|
|
| The
auditors with out qualifying their report indicated that there exist
significant uncertainty that the Company |
|
| will
be able to continue as a going concern on the basis of losses incurred,
declining current ratio and the two |
|
| major
creditors have obtained decree from the court for recovery of their
outstanding loans |
|
|
| Similar
apprehensions were expressed in the last audit report, but you will
appreciate that losses are showing |
|
| a
declining trend. Your management is pleased to announce that the company has
settled the disputes with |
|
| PICIC
and NDFC out side the court in the light of the instructions given by the
Honorable Chief Executive of |
|
| Pakistan. |
|
|
| The
year 2000 (Millenium Bug) problem has been identified and a program initiated
to access and contain its |
|
| impact
on our operations. |
|
|
| PRODUCTION |
|
|
| During
the above year the production stood at 76,819.85 M.Tons as compared 33,463
M.Tons during the |
|
| same
preceding year. |
|
|
| MARKETING |
|
|
| During
the referred above year sale amounting to 77,708.82 M.Tons, whereas during
the previous year ended |
|
| June
30, 1998 was 31,535 M.Tons. |
|
|
| APPROPRIATION |
|
|
| In
view the loss suffered during the year ending June 30, 1999 no amount is
being appropriated towards |
|
| reserves
or dividends. |
|
|
| DIRECTORS |
|
|
| Since
the last Annual General Meeting, the composition of Board of Directors has
been considerably changed |
|
| that
Mrs. Shaheen Saleem, Syed Mehboob Nawaz, Abdul Shakoor Azad and Syed Zulfiqar
Ali Bukhari has |
|
| resigned
from the membership of the Board and Mr. Nisar A. Korai, Mr. Ajaz Ali Panhor
and Mr. Faiz |
|
| Mohammad
Brohi replaced the outgoing directors. |
|
|
| The
Board express its deep appreciation for the valuable services rendered by the
retiring Directors during the |
|
| tenure
of their Directorships. |
|
|
| AUDITORS |
|
|
| The
present Auditors M/s. Faruq Ali & Co., Chartered Accountants, Stand
retired and being eligible, offer |
|
| .themselves
for reappiontment as Auditor of the Company for the financial year ending
30th June, 2000. |
|
|
| PATTERN
OF SHARE HOLDING |
|
|
| A
statement showing pattern of holding of the Company is included in the
report. |
|
|
| APPRECIATION
FOR EMPLOYEES |
|
|
| We
on behalf of the Board of Directors with to place on record our appreciation
for dedication and devotion of |
|
| our
employees to their duties and have no doubt that it would be coming forth in
greater measure in the |
|
| development
phase ahead. It is hopped that they will continue to work with same zeal and
sprit. |
|
|
|
BY ORDER OF THE BOARD |
|
|
| Karachi: December 04, 1999 |
|
Chairman |
|
|
|
| Auditors'
Report |
|
| To
The Members |
|
|
| We
have audited the annexed Balance Sheet of Pakistan Slag Cement Industries
Limited as at June 30, 1999 |
|
| and
the' related Profit and Loss Account and Cash Flow Statement, together with
the notes forming part |
|
| thereof,
for the year ended June 30, 1999 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; |
|
|
| 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 period was for the purpose of the
Company's business; and |
|
|
| the
business conducted, investments made and the expenditure incurred during the
period 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 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
loss and 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. |
|
|
| (e)
Without qualifying our opinion we draw attention of the members to the fact
that the accounts have been |
|
| prepared
assuming that the company will continue as a going concern. The accumulated
losses of the |
|
| Company
has reached the figure of Rs. 53.43 M against total equity of Rs. 64.00 M. As
of that date |
|
| Company's current liabilities exceed its current
assets by Rs. 85.60 M. As explained in Note No. 11.3 |
|
| and
11.5 of notes to the accounts the two major creditors of the Company has
obtained decree from the |
|
| court
for recovery of their outstanding loans. Although after the balance sheet
date the Company has |
|
| paid
a substantial part of decreed amount due to these creditors and proposes to
pay the balance |
|
| amount
in monthly instalments as explained in details in Notes No. 11.3 & 11.5.
These facts raise doubt |
|
| that
the Company may be able to continue as going concern, unless and until the
Company is able to |
|
| make
further financing arrangement or otherwise increase its production. |
|
|
|
Faruq Ali & Company |
|
| Karachi:
December 4, 1999 |
|
Chartered Accountants |
|
|
|
| Balance
Sheet |
|
| As
At June 30, 1999 |
|
|
Note |
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
| Tangible
Fixed Assets |
|
3 |
108,060,843 |
123, 283,024 |
|
| In Process |
|
|
5,843,605 |
31,050 |
|
| Intangible
Fixed Assets |
|
4 |
10,000 |
10,000 |
|
| Long
Term Deposits |
|
1,561,355 |
1,561,355 |
|
| Deferred |
|
-- |
743,850 |
|
|
---------- |
---------- |
|
| Total
Long Term Assets |
|
115,475,803 |
125,629,279 |
|
| Current
Assets |
|
| Stores
and Spares |
|
5 |
3,044,591 |
3,828,966 |
|
| Stock-in-Trade |
|
6 |
23,686,571 |
22,835,235 |
|
| Trade Debts |
|
7 |
18,685,725 |
4,968,670 |
|
| Loans,
Advances, Deposits, Pre-Payments |
|
| and
Other Receivables |
|
8 |
17,929,998 |
23,843,859 |
|
| Cash
and Bank Balance |
|
9 |
2,846,947 |
2,287,784 |
|
|
|
---------- |
---------- |
|
| Total
Current Assets |
|
65,193,832 |
57,764,514 |
|
| Current
Liabilities |
|
| Current
Maturity of Long Term Loans |
|
41,832,309 |
41,832,309 |
|
| Creditors,
Accrued and Other Liabilities |
|
10 |
105,687,168 |
99,113,037 |
|
| Taxation |
|
4,309,658 |
3,414,658 |
|
|
---------- |
---------- |
|
| Total
Current Liabilities |
|
151,829,135 |
144,360,004 |
|
|
| Net
Current (Liabilities)/assets |
|
(85,635,303) |
(86,595,490) |
|
|
---------- |
---------- |
|
| Total
Assets Less Current Liabilities |
|
29,840,500 |
39,033,789 |
|
| Long
Term Liabilities |
|
---------- |
---------- |
|
| Long
Term Loans |
|
11 |
17,823,358 |
20,199,732 |
|
| Long
Term Deposits |
|
12 |
1,125,655 |
1,125,655 |
|
| Liabilities
against assets subject to finance lease |
13 |
324,984 |
324,984 |
|
|
|
---------- |
---------- |
|
| Total
Long Term Liabilities |
|
19,273,997 |
21,650,371 |
|
| Contingencies
and Commitments |
|
14 |
-- |
-- |
|
| Net Assets |
|
10,566,503 |
17,383,418 |
|
| Represented
By: |
|
---------- |
---------- |
|
| Share Capital |
|
15 |
64,000,000 |
64,000,000 |
|
| Accumulated
-Loss |
|
(53,433,497) |
(46,616,582) |
|
|
---------- |
---------- |
|
| Shareholders
Equity |
|
|
105,665,031 |
17,383,418 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Chief
Executive |
|
Director |
|
|
|
|
| Profit
and Loss Account |
|
| For
The Year Ended June 30, 1999 |
|
|
Note |
1999 |
1998 |
|
|
|
|
|
|
Rupees |
Rupees |
|
|
| Net Sales |
|
16 |
178,289,192 |
50,349,115 |
|
| Cost
of Goods Sold |
|
17 |
176,978,146 |
63,008,540 |
|
|
|
---------- |
---------- |
|
| Gross
Profit/(Loss) |
|
|
1,311,046 |
(12,659,425) |
|
| Administrative
& Selling Expenses |
|
18 |
3,840,682 |
4,444,086 |
|
|
---------- |
---------- |
|
| Operating
Loss |
|
(2,529,636) |
(17,103,511 ) |
|
| Other Income |
|
19 |
397,441 |
-- |
|
|
---------- |
---------- |
|
|
(2,132,195) |
(17,103,511) |
|
| Financial
Charges |
|
20 |
3,963,729 |
2,365,294 |
|
|
---------- |
---------- |
|
| Net
Loss Before Taxation |
|
(6,095,924) |
(19,468,805) |
|
| Provision
for Taxation |
|
(895,000) |
(252,000) |
|
|
---------- |
---------- |
|
| Net
Loss After Taxation |
|
(6,990,924) |
(19,720,805) |
|
| Prior
Year Adjustments |
|
21 |
174,009 |
-- |
|
|
---------- |
---------- |
|
|
(6,816,915) |
(19,720,805) |
|
| Un-appropriated
balance brought forward |
|
(46,616,582) |
(26,895,777) |
|
|
---------- |
---------- |
|
| Balance
Carried to Balance Sheet |
|
(53,433,497) |
(46,616,582) |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Chief
Executive |
|
Director |
|
|
|
| Cash
Flow Statement |
|
| For
The Year Ended June 30, 1999 |
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
| Cash
flow from operating activities |
|
| Cash
generated from operations |
|
24 |
12,426,783 |
6,425,397 |
|
|
| Cash
flow from investing activities |
|
| Fixed
capital expenditure |
|
(5,812,555) |
(250,003) |
|
| Long
Term Deposits |
|
-- |
(15,000) |
|
|
---------- |
---------- |
|
| Net
cash outflow from investing activities |
|
(5,812,555) |
(265,003) |
|
|
| Cash
flow from financing activities |
|
| Re-payments
of long-term f; lances |
|
(2,376,374) |
(1,666,728) |
|
| Markup
on long-term finances |
|
(3,678,691) |
(2,365,294) |
|
|
---------- |
---------- |
|
| Net
cash (outflow) from financing activities |
|
(6,055,065) |
(4,032,022) |
|
|
|
|
| Net
increase in cash and cash equivalents |
|
559,163 |
2,128,372 |
|
| Cash
and cash equivalents at the beginning of the year |
|
2,287,784 |
159,412 |
|
|
---------- |
---------- |
|
| Cash
and cash equivalents as at the end of year |
9 |
2,846,947 |
2,287,784 |
|
|
========== |
========== |
|
|
|
|
|
| Notes
To The Accounts |
|
| For
The Year Ended June 30, 1999 |
|
|
| 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 |
|
| August 1994. |
|
|
| The
company is principally engaged in the manufacturing and sale of Slag Cement,
Ordinary Portland |
|
| Cement,
White Cement, Clinker Coal Ash Cement and allied products. |
|
|
| 2.
Significant Accounting Policies |
|
| 2.1
Accounting Convention |
|
|
| These
Accounts have been prepared under the "Historical Cost Convention"
without any effect of |
|
| inflation
or of current values. |
|
|
| 2.2
Tangible Fixed Assets and Depreciation |
|
|
| i)
These are stated at cost less accumulated depreciation except leasehold land
which is |
|
| stated
at cost. The depreciation has been charged on straight line method on Plant
& |
|
| Machinery
and Factory Building and at reducing balance method on other assets. |
|
|
| ii)
Profits/loss on disposals is charged to revenue and no depreciation is
charged on disposals. |
|
|
| iii)
Normal repairs/maintenance is charged to Profit and Loss Account as and when
incurred |
|
| whereas
major renewals and improvements are capitalised. |
|
|
| 2.3
Leased Assets |
|
|
| i)
Assets acquired under finance lease are stated at cost less accumulated
depreciation. |
|
|
| ii)
Obligation of the lease are accounted for as liabilities. Financial charges
are charged to profit |
|
| and
loss account. |
|
|
| 2.4
Capitalization of Borrowing Costs |
|
|
| The
company capitalizes borrowing costs' relating to capital projects, excluding
normal capital |
|
| expenditure. |
|
|
| 2.5 Deferred Costs |
|
|
|
| These
are to be amortized 'over a period of five years (5) from the year 1994
onwards. |
|
|
| 2.6
Stores & Spares |
|
|
| These
are valued at average cost. |
|
|
| 2.7
Stock in Trade |
|
|
| Raw
and packing material in hand are valued at average cost. |
|
|
| Finished
goods and work in progress are valued at average cost or net realisable value |
|
|
| 2.8 Taxation |
|
|
| Provision
for taxation is made at the current rate of tax applicable to public
companies under |
|
| Income
Tax Ordinance, 1979. |
|
|
| 2.9
Revenue Recognition |
|
|
| Revenue
is recognised on dispatch of goods to consumers. |
|
|
| 3.
Tangible Fixed Assets At Cost Less Depreciation |
|
|
|
Written Down |
|
Cost |
Additions/ |
Cost |
Acc. Dep. |
Rate |
For the |
Acc. Dep. |
Value As At |
|
01-07-98 |
(Disposal) |
30-06-99 |
01-07-98 |
% |
Year |
30-06-99 |
30-06-99 |
| Land |
|
6,721,750 |
-- |
6,721,750 |
-- |
|
-- |
-- |
6,721,750 |
| Building |
|
45,451,614 |
-- |
45,451,614 |
9,024,021 |
5 |
2,272,581 |
11,296,602 |
34,155,012 |
| Plant
& Machinery |
125,106,055 |
-- |
125,106,055 |
48,821,556 |
10 |
12,510,605 |
61,332,161 |
63,773,894 |
| Electric
Installation |
2,006,604 |
-- |
2,006,604 |
758,305 |
10 |
124,830 |
883,135 |
1,123,469 |
| Motor
Vehicles |
1,237,831 |
-- |
1,237,831 |
697,069 |
20 |
108,152 |
805,221- |
432,610 |
| Furniture
& Fixture |
849,272 |
-- |
849,272 |
302,273 |
10 |
54,700 |
356,973 |
492,299 |
| Office
Equipments |
1,830,759 |
-- |
1,830,759 |
731,793 |
10 |
109,897 |
841,690 |
989,069 |
| Generator |
|
718,863 |
-- |
718,863 |
304,707 |
10 |
41,416 |
346,123 |
372,740 |
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
| TOTAL |
|
183,922,748 |
-- |
183,922,748 |
60,639,724 |
|
15,222,181 |
75,861,905 |
108,060,843 |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
| 1997-98 |
|
183,875,598 |
47,150 |
183,922,748 |
45,353,745 |
|
15,285,979 |
60,639,724 |
123,283,024 |
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
| Charge
of Expense: |
|
|
| Cost
of Goods Sold |
|
15,004,132 |
|
| Admin.
& Selling Expenses |
|
218,049 |
|
|
---------- |
|
| Total
for the year |
|
15,222,181 |
|
|
|
========== |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
| 4.
Intangible Fixed Assets |
|
| Trade Marks |
|
10,000 |
10,000 |
|
|
========== |
========== |
|
| 5.
Stores, Spares & Loose Tools |
|
| Stores |
|
1,925,201 |
2,130,725 |
|
| Spares |
|
792,110 |
1,072,721 |
|
| Loose Tools |
|
327,280 |
625,520 |
|
|
---------- |
---------- |
|
|
3,044,591 |
3,828,966 |
|
|
========== |
========== |
|
| 6.
Stock In Trade |
|
| Raw Materials |
|
19,698,729 |
17,368,131 |
|
| Packing
Material |
|
1,407,923 |
1,379,164 |
|
| Work
in Process |
|
210,000 |
200,000 |
|
| Finished
Goods |
|
2,369,919 |
3,887,940 |
|
|
---------- |
---------- |
|
|
23,686,571 |
22,835,235 |
|
|
========== |
========== |
|
| 7. Trade Debts |
|
| Trade Debts |
|
18,685,725 |
4,968,670 |
|
|
========== |
========== |
|
| 8.
Loans, Advances, Deposits, Pre-payments |
|
| and
Other Receivables |
|
|
| Loans: |
|
| Staff |
|
292,742 |
349,567 |
|
|
| Advances: |
|
| Suppliers
& Contractors |
|
490,635 |
490,635 |
|
| Against
Expenses |
|
883,740 |
50,000 |
|
| Purchases
of Raw Material |
|
4,860,528 |
16,115,585 |
|
| Taxes |
|
5,796,535 |
6,016,306 |
|
|
---------- |
---------- |
|
|
12,031,438 |
22,672,526 |
|
| Deposits |
|
100,563 |
85,563 |
|
| Pre-Payments |
|
| Expenses |
|
250,724 |
250,724 |
|
| Central
Excise Duty |
|
5,144,173 |
391,031 |
|
|
---------- |
---------- |
|
|
5,394,897 |
641,755 |
|
|
110,358 |
94,448 |
|
|
---------- |
---------- |
|
|
17,929,998 |
23,843,859 |
|
|
========== |
========== |
|
| 9.
Cash and Bank Balances |
|
| Cash in Hand |
|
78,540 |
68,700 |
|
| Cash
at Bank: Current Account |
|
233,922 |
-- |
|
| Cash
at Bank: Interest Bearing Account |
|
2,534,485 |
2,219,084 |
|
|
---------- |
---------- |
|
|
2,846,947 |
2,287,784 |
|
|
========== |
========== |
