| Javedan Cement Limited |
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| Annual
Reports 2002 |
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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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| Key
Operating and Financial Data for Last Six Years |
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| Review
Report to the Members on Statement of Compliance |
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| with
Best Practices of Code of Corporate Governance |
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| Pattern of Shareholding |
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| Auditor's Report to the
Members |
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| Balance
Sheet |
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| Profit and Loss Account |
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| Cash Flow Statement |
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| Statement
of Changes in Equity |
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| Notes to the Accounts |
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| |
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| CORPORATE
INFORMATION |
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| |
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| BOARD
OF DIRECTORS: |
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| |
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| Zahid
Hussain |
|
Chairman |
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| Iqbal
R. Siddiqui |
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Managing Director |
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| Abdul Hafeez Chaudhary |
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| Tariq Kirmani |
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| Abdul Bari Khan |
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| Ikram-ul-Haq Siddiqui |
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| Mirza Khurshid Baig |
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| |
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| BOARD
AUDIT COMMITTEE |
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| |
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| Abdul Hafeez Chaudhary |
Chairman |
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| Ikram-ul-Haq Siddiqui |
Member |
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| Mirza Khurshid Baig |
Member |
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| A.
K. Merchant |
|
Secretary |
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| |
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| SECRETARY: |
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| S. M. H. Rizvi |
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| |
| AUDITORS: |
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| |
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| Syed
Husain & Co. |
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| Chartered Accountants, |
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| Karachi |
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| |
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| BANKERS: |
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| |
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| United Bank Ltd. |
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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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| Allied
Bank of Pakistan Ltd. |
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| |
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| REGISTERED
OFFICE: |
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| |
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| Al-Haroon, 2nd Floor |
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| 10-AghaKhan III Road, |
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| Karachi-74400 |
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| Tel:
9215281-82 |
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| Fax:
9215592 |
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| Telegram: JAVCEMT |
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| Email :
javedancement@hotmail.com |
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| javedancement@yahoo.com |
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| |
| WORKS: |
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| |
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| Manghopir, |
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| Karachi-75890 |
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| Tel:
6980026 |
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| Fax: 92-21-6946918 |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| |
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| Notice
is hereby given that the 40th 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 17th October, 2002, at
Haji Abdullah |
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| Haroon
Muslim Gymkhana, Awan-e-Saddar Road, behind Shaheen Complex Karachi, in order
to |
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| transact
the following business: - |
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| |
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| (a)
ORDINARY BUSINESS |
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| |
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| 1.
To confirm the Minutes of the Extra-Ordinary General Meeting held on
Wednesday, the 19th |
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| June 2002. |
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| |
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| 2.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended 30th |
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| June
2002, together with the Report of Directors and the Auditors thereon. |
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| |
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| 3.
To appoint Auditors and fix their remuneration for the year ending 30th June
2003. M/s Syed |
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| Husain
& Co., Chartered Accountants, the retiring Auditors, being eligible have
offered |
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| themselves
for re-appointment. |
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| |
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| (b)
SPECIAL BUSINESS: |
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| |
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| To
fix and approve the Director's fee for attending the Meeting of the Board of
Directors and |
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| following
resolution is proposed to be passed. |
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| |
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| "Resolved
that the fee of the Director who attends meeting of the Board of Directors be
and is |
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| hereby
fixed at Rs. 1,000/- per meeting" |
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| |
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| 4.
To consider any other business with the permission of Chair. |
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| |
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| STATEMENT U/S 160 OF THE
COMPANIES |
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| ORDINANCE,
1984 REGARDING SPECIAL BUSINESS |
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| |
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| The
Director's fee for attending the Board Meeting was fixed at Rs. 500/- per
meeting in the 20th AGM |
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| held
on 23rd December 1982. At present, only the Director representing the
minority Shareholders |
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| gets
Rs. 500/- per Meeting. The Board of Directors in its Meeting held on 3rd
June, 2002, has decided |
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| to
fix the director's fee (for all Directors) at Rs. 1000/- per Meeting for a
Director who attends the |
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| Meeting.
It is proposed that keeping in view the over all increase of prices index
over the last years, |
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| it
is needed to be revised and the Director's fee may be fixed at Rs. 1000/- per
Meeting for a Director |
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| who
attends the Meeting of the Board of Directors or its Committee(s). |
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| |
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| By
order of the Board |
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| |
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| S. M. H. RIZVI |
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| Company
Secretary |
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| |
| Karachi,
20th September, 2002. |
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| |
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| NOTES: |
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| |
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| 1.
The Share Transfer books of the Company will remain closed from 08-10-2002 to
17-10-2002 (both days |
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| inclusive)
to effect the transfer of shares, as at the close of business on 07-10-2002. |
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| |
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| 2.
Shareholders are requested to immediately notify the Company of change in
their addresses, if any. |
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| |
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| 3.
Shareholders who have deposited their shares into Central Depository Company
of Pakistan Limited |
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| (CDC)
are requested to bring their original NIC/Passport alongwith their account
number and Participant's |
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| ID
Number in CDC for verification. |
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| |
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| 4.
A member entitled to attend and vote at the meeting is entitled to appoint
another member as his/her proxy |
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| to
attend and vote instead of him/her. Proxies, in order to be effective must be
received at the Registered |
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| Office
of the Company not less than 48 hours before the time appointed for the
Meeting. |
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| |
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| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
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| |
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| The
Directors welcome the Members at the 40th Annual General Meeting of the
Company and have pleasure in |
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| presenting
annual report alongwith Audited Accounts and Auditor's Report thereon, for
the year ended June 30th, |
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| 2002.
The Company during the year under review earned a profit of Rs. 31.902
million before tax as against loss |
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| of
Rs. 89.265 million during the year 2000-2001. The reasons for elimination of
loss were on account of higher |
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| production
and sales of cement by 23,429 tonnes and 6,861 tonnes respectively during the
year as compared to |
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| last
year, reduction in cost of sales by adopting stringent measures and due to
financial restructuring, mark-up |
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| has
not been charged. The performance of the Company in terms of production and
sales during the year under |
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| review
is as follows :- |
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| |
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| PRODUCTION: |
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| |
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| It
is to inform the members that the Company produced 250,424 tonnes of clinker
and 307,518 tonnes of cement |
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| in
the year under review. The production of the year under review as compared
with that of last year is hereunder. |
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| Clinker
production had been low due to kiln remained stopped for planned maintenance.
However the clinker was |
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| purchased
from sister concern to meet the short fall. |
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| |
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|
Increase/ |
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| |
|
(Decrease) |
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| |
2001-2002 |
2000-2001 |
Over Last Year |
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| |
(Tonnes) |
(Tonnes) |
(Tonnes) |
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| |
| Clinker Production |
|
250 |
260,269 |
(9,845) |
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| Cement Production |
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|
| Ordinary
Portland Cement |
246,505 |
257,261 |
(10,756) |
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| Slag Cement |
|
57,825 |
22 |
35,880 |
|
| Sulphate
Resisting Cement |
3,188 |
4,883 |
(1,695) |
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| |
307,518 |
284,089 |
23,429 |
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| |
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| Due
to low demand, production was partly suspended during the year as also in
last year which resulted in under |
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| utilization
of capacity. During the year, the company has continued to close a part of
the cement plant (2 Kilns of |
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| semi
dry process) which represents about 50 percent of the production capacity of
clinker. |
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| |
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| MARKETING: |
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| |
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| During
the year, less demand and more supply of cement persisted in the Country.
Construction Industry |
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| remained
in poor shape. The Company continued to face difficulty in selling its
products in bulk as compared to |
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| private
manufacturers due to the fierce competition from them. The Company due to its
strenuous efforts |
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| succeeded
to increase the sale by 6,861 tonnes as compared to last year. Its
comparative position is hereunder:- |
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| |
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| |
|
Increase/ |
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| |
|
(Decrease) |
|
| |
2001-2002 |
2000-2001 |
Over Last Year |
|
| |
(Tonnes) |
(Tonnes) |
(Tonnes) |
|
| |
|
|
| Ordinary
Portland Cement |
239,095 |
262,790 |
(23,695) |
|
| Slag Cement |
|
56,855 |
23,267 |
33,588 |
|
| Sulphate
Resisting Cement |
2,751 |
5,783 |
(3,032) |
|
| |
298,701 |
291,840 |
6,861 |
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| |
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| DIVIDEND: |
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| |
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| No
Bonus Share is being recommended for the year due to accumulated losses and
negative equity and Cash |
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| Dividend
is not recommended due to tight liquidity position and expected coal firing
plant investment. |
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| |
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| EARNING
PER SHARE: |
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| |
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| Rs.
3.20 (Rupees three and Twenty Paisa), [2001 Rs. (10.55) (Negative Rupees Ten
and fifty five paisa)]. |
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| GOING
CONCERN AND PAYMENT OF DEBTS: |
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| |
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| As
regards Auditors' observation regarding "Going Concern", we report
that since it is not possible to undertake |
|
| BMP,
however financial restructuring for issuance of Shares against loan, has been
considered to overcome the |
|
| situation. |
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| |
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| FINANCIAL
RESTRUCTURING: |
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| |
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| The
EOGM of shareholders held on 19.06.2002 has approved the increase of
authorized capital from Rs. 150 |
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| million
to Rs. 700 million and increase of paid up capital from Rs. 88 million to Rs.
560 million by way of issue of |
|
| shares
without right issue against long term loans of Rs. 453.400 million and
advances of Rs. 18.600 million of |
|
| State
Cement Corporation of Pakistan which has been approved by the SECP. The loan
agreement entered with |
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| SCCP
for issue of share against loan also provides that no markup would be charged
w.e.f. 01.07.2001 and |
|
| residue
interest amount would be transferred to non interest account, |
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| |
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| PRIVATIZATION
PROCESS: |
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| |
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| The
privatization commission has started the privatization process and
advertisement to the effect has been |
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| published
calling expression of interest latest by 30.07.2002, to off load 85% shares. |
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| |
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| FUTURE
PROSPECTS: |
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| |
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| The
continued adverse situation prevailing in the country coupled with fierce
competition among manufacturers |
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| has
necessitiated to undertake coal firing plant investment at Rs. 150 million
enabling us to reduce cost of |
|
| production,
compete effectively with private sector and to capture market share
aggressively. |
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| |
|
| DIRECTORS: |
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| |
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| The
following changes took place in the Board of Directors of the Company since
the last annual General Meeting |
|
| heldon27.12.2001. |
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| |
|
| 1.
Mr. Iqbal R. Siddiqui, has taken over the charge of the post of Chief
Executive Officer / Managing Director |
|
| of
the Company (in place of Mr. Aijaz Ahmed, Acting Managing Director) w.e.f.
04th December, 2001. |
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| |
|
| 2.
Mr. Mirza Khurshed Baig, Executive Vice President, Investment Corporation of
Pakistan, has been |
|
| nominated
as Director on the Board in place of Mr. Syed Haroon Rasheed, (ICP nominee). |
|
| |
|
| 3.
Mr. Abdul Bari Khan, General Manager (Finance) PIDC/SCCP has been nominated
as Director on the |
|
| Board
in place of Mr. Muhammad Arshad Saeed (SCCP Nominee). |
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| |
|
| FINANCIAL
MANAGEMENT: |
|
| |
|
| The
company is practicing strict and efficient financial management. As a result,
economies have been effected. |
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| Efforts
will continue towards improving company's performance. |
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| |
|
| HEALTH
SAFETY & ENVIRONMENT |
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| |
|
| Appropriate
facilities exist for safeguarding the health of employees. There was no Lost
Work Injury relevant to |
|
| employees. |
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| |
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| Our
basic raw material is Lime Stone and waste from the cement industries is not
harmful to health. This is an |
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| environment
friendly resource. The company is responsive to environment consideration and
to principles of |
|
| sustainable
development, in it's selection of raw materials, energy sources and
production processes. |
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| |
|
| CORPORATE
MEETING CONFERENCE: |
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| |
|
| A
Corporate Meeting Conference has been planned during the ensuing year. Aims
of which are to improve |
|
| management
efficiency and professionalism in the Company. The Company's Vision &
Mission Statement, Core |
|
| Values,
Strategic Goals, Ethics and Business Practices, Key Result Areas and Key
Performance Indicators are in |
|
| the
process of planning and under a dynamic discussion. |
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| |
|
| INFORMATION
TECHNOLOGY |
|
| |
|
| The
company has initiated a process of integrated computerization during the
year. The process is continuing. |
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| |
|
| ISO
9002 CERTIFICATION |
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| |
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| The
ISO-9002 Certification is in advance internal audit stage. |
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| |
|
| STATEMENT
ON CORPORATE AND FINANCIAL REPORTING FRAME WORK |
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| |
|
| a.
The financial statements,prepared by the management of the company, present
fairly it's state of affairs, |
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| the
result of it's operations, cash flows and changes in equity. |
|
| |
|
| b.
Proper books of accounts, of the company have been maintained. |
|
| |
|
| c.
Appropriate accounting policies have been consistently applied in preparation
of financial statements and |
|
| accounting
estimates are based on reasonable and prudent judgment. |
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| |
|
| d.
International Accounting Standards, as applicable in Pakistan, have been
followed in preparation of |
|
| financial
statement and any departure there from has been adequately disclosed. |
|
| |
|
| e.
The system of internal control, is being continuously reviewed by internal
audit and other such procedures. |
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| The
process of review will continue and any weaknesses in controls will be
removed. |
|
| |
|
| f.
There are no significant doubts upon the company's ability to continue as a
going concern. |
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| |
|
| g.
There has been no material departure from the best practices of corporate
governance as defined in the |
|
| listing regulations. |
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| |
|
| h.
Key operating and financial data for last six years in summarized form is
annexed. |
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| |
|
| i.
Outstanding taxes and levies. Please refer Note No. 10 & 27 to the
annexed audited accounts. |
|
| |
|
| j.
The following is the value of investments based on respective audited
accounts: |
|
| |
|
| Provident
Fund Rs. 136.592 million. |
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| |
|
| Gratuity
Fund Rs. 41.954 million. |
|
| |
|
| k.
During the year 6 meetings of the Board of Directors including two special
meetings were held. |
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| Attendance
by each Director is as follows :- |
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| |
|
| S.
No. Name of Directors |
No. of Meetings |
Special Meeting |
|
| |
|
Attended |
|
|
| 1. Mr. Zahid Hussain |
|
4 |
2 |
|
| 2. Mr. Aijaz Ahmed |
|
1 |
- |
|
| 3.
Mr. Iqbal Rashid Siddiqui |
4 |
2 |
|
| 4.
Mr. Abdul Hafiz Choudhary |
2 |
- |
|
| 5.
Mr. Ikram-ul-Haq Siddiqui |
2 |
2 |
|
| 6.
Mr. Khawaja Saqib Nairn |
4 |
1 |
|
| 7. Mr. Tariq Kirmani |
|
1 |
1 |
|
| 8.
Mr. Syed Haroon Rasheed |
1 |
1 |
|
| 9.
Mr. Abdul Bari Khan |
3 |
1 |
|
| 10.
Mr. Mirza Khurshid Baig |
3 |
1 |
|
| |
|
| I.
The pattern of shareholding is annexed. |
|
| |
|
| m.
No directors has sold any shares of his shareholding in the Company. |
|
| |
|
| AUDIT
COMMITTEE: |
|
| |
|
| The
Audit Committee consists of the followinq non-executive Directors : |
|
| |
|
| 1.
Mr. Abdul Hafeez Chaudhry |
Chairman |
|
| 2.
Mr. Ikram-UI-Haq Siddiqui |
Member |
|
| 3.
Mr. Mirza Khurshid Baig |
Member |
|
| Mr. A.K. Merchant |
|
Secretary |
|
| |
|
| AUDITORS: |
|
| |
|
| The
Auditors appointed in the last Annual General Meeting M/s. Husain Rahman,
Chartered Accountants' fin |
|
| dissolved
and casual vacancy filled by passing resolution at the Directors' meeting
under section 252(4) of th |
|
| Companies
Ordinance, 1984 and appointed M/s. Syed Husain & Co., Chartered
Accountants, who have retire |
|
| and
being eligible, offer themselves for re-appointment for the year 2002-2003. |
|
| |
|
| ACKNOWLEDGEMENT: |
|
| |
|
| The
Chairman and Directors of the Company place on record the appreciation for
the hard work done by th |
|
| Workers,
Staff & Officers of the Company during the year 2001-2002 with the hope
that they would accelerat |
|
| their
joint efforts and dedication for achieving yet better results during the
forthcoming years. |
|
| |
|
| For
and on behalf of the Board |
|
| |
|
| (IQBAL
RASHID SIDDIQUI) |
|
| |
|
| Karachi:
20th September, 2002 Managing Director & Chief Executive |
|
| |
|
| Key
Operating and Financial Data for Last Six Years |
|
| |
|
| PARTICULARS |
|
2002 |
2001 |
2000 |
1999 |
1998 |
1997 |
1996 |
|
| Financial Position |
|
| Paid up capital |
|
88,000,000 |
88,000,000 |
88,000,000 |
88,000,000 |
88,000,000 |
88,000,000 |
88,000,000 |
|
| Reserves |
|
75,465,602 |
75,465,602 |
75,465,602 |
75,465,602 |
75,465,602 |
75,465,602 |
75,465,602 |
|
| Long term Deposit |
|
539,107 |
564,107 |
604,107 |
604,107 |
604,107 |
5,284,107 |
5,774,107 |
|
| Long Term Loans |
|
-- |
109,150,000 |
223,900,000 |
344,250,000 |
285,000,000 |
388,000,000 |
311,000,000 |
|
| Current Liabilities |
|
872,574,528 |
775,982,675 |
624,170,306 |
420,074,230 |
440,218,689 |
230,728,109 |
250,023,060 |
|
| Fixed Assets WDV |
|
185,469,920 |
183,904,272 |
199,425,779 |
206,888,427 |
223,931,170 |
263,203,294 |
271,207,090 |
|
| Long Term Deposits |
|
60,704,542 |
69,308,613 |
69,556,902 |
11,971,685 |
5,612,554 |
4,492,203 |
4,624,930 |
|
|
| Long
Term Loans to Employees |
19,479,827 |
20,342,518 |
16,366,525 |
25,564,894 |
25,649,626 |
10,003,566 |
9,897,584 |
|
| Curent Assets |
|
301,587,143 |
278,066,981 |
322,052,618 |
330,037,428 |
387,541,247 |
333,173,030 |
362,243,223 |
|
| Income |
|
|
|
| Sales (Net) |
|
732,940,253 |
725,389,521 |
829,627,530 |
677,549,165 |
928,402,195 |
944,063,064 |
677,712,989 |
|
| Other Income |
|
6,679,308 |
9,056,106 |
29,580,532 |
9,525,142 |
10,370,343 |
11,620,569 |
7,125,215 |
|
| Pre-Tax Profit(Loss) |
|
31,902,195 |
(89,264,560) |
(46,453,249) |
(103,771,461) |
(64,730,342) |
(91,604,268) |
(104,362,071) |
|
| Taxation |
|
(3,700,000) |
(3,537,249) |
(4,353,437) |
(3,606,243) |
45,611,563 |
(18,540,812) |
(17,783,222) |
|
| After Tax Profit |
|
