Mustehkum Cement Limited - Annual Reports 2003



MUSTHEKUM CEMENT LIMITED
Annual Reports 2003

CONTENTS

Company Profile
Vision / Mission Statement
Notice of Annual General Meeting
Directors' Report to the Shareholders
Key Operating & Financial Data
Pattern of Holding of Shares
Statement of Compliance with the best practices of corporate
governance to the members
Review Report to the members on the statement of compliance
with the Code of Corporate of Governance
Auditors' Report to the Members.
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts

VISION & MISSION STATEMENT

"Mustehkam Cement Limited is committed to make sustained
efforts towards optimum utilization of its resources through
good corporate governance for serving the interests of all its
stakeholders".

STRATEGIC GOALS •

• Efficient deployment of resources
• Optimization of cost
• Minimization of losses
• Environmental protection

STATEMENT OF BUSINESS ETHICS

• Transparency in transactions
• Sound business policies
• Judicious use of Company's resources
• Avoidance of conflicts of interest
• Justice to all
• Integrity at all levels
• Compliance of laws of the land

BOARD OF DIRECTORS		M.P. GANGWANI
		Chairman
		MUHAMMAD RIAZ KHAN
		Chief Executive
		SAAD ASH RAF
		SHAH RUKH ARBAB
		MUHAMMAD ZAFAR KHAN
		ABDUL BARI KHAN
		SHAH ID ANWAR

AUDIT COMMITTEE		Securities & Exchange Commission Govt. of Pakistan have
		under clause (xlvii) of the Code of Corporate
		Governance, granted relaxation to set up Audit Committee to
		the company as a closed unit.

SECRETARY		MUHAMMAD TABREZ BAIG

AUDITORS		FORD RHODES SIDAT HYDER & CO
		Chartered Accountants
		3rd Floor, Eagle Plaza,
		75-West Fazal-ul-Haq Road
		Blue Area, Islamabad.

BANKERS		Habib Bank Limited.
		National Bank of Pakistan

REGISTERED OFFICE		345-Bazar Road,
		Westridge,
		Rawalpindi Cantt.

FACTORY		H ATTAR,
		Distt. Haripur.

DIRECTORS' REPORT TO THE SHAREHOLDERS

The Directors of your company take pleasure in placing before you the 49^th annual report togetl
with the audited accounts and the auditors' report thereon for the year ended30^th June 2003.

FINANCIAL

The financial results of the company for the year are summarized as under:-

					(Rupees	in million)
					2002-2003	2001-2002
Net profit/(loss) before tax					-92.451	-109.274
Reversal of dividend					-	184.8
					-92.451	75.526
Taxation					-	-
Net pro fit/( loss) after tax					-92.451	75.526
Balance brought forward					-820.627	-896.153
Net profit/(loss)					-913.078	-820.627

During the year, the company was unable to generate funds of its own because there was no
production and marketing activity. Consequently the company could not arrange repayment to SCCP
of Rs. 396.342 million against local currency loan, Rs. 52.335 million against loan for BMR and
Rs. 416.021 million on account of interest accrued thereon. Instead SCCP had to give further loan of
Rs. 1.560 million during the year for meeting with cash requirements of the company. The company
also utilized long term security deposits amounting to Rs.2.297 million on the understanding by SCCP
that they will lend the amount to the company as & when required for refund of these long term
security deposits. The company sustained loss per share of Rs. 7.50 during the year under report. The
Directors endorse the auditors' report to the members on the accounts of the company.

AUDITORS

The auditors Ford Rhodes Sidat Hyder and Company, Chartered Accountants retire and. beinj
eligible, offer their services for reappointment.

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of Shareholders of Mustehkam
Cement Limited will be held at Flashman's Hotel, The Mall, Rawalpindi Cantt. on Tuesday
the 30th September 2003, 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 ended
June 30,2003 together with the reports of directors and auditors thereon.

3- To appoint auditors and fix their remuneration.

4- To transact any other ordinary business of the Company with the permission of the
Chair.

The share transfer books of the Company will remain closed from 22nd September,
2003 to 28th September, 2003 (both days inclusive).

Dated Rawalpindi:- By Order of the Board

6th September, 2003.

Notes:-

Muhammad Tabrez Baig

Secretary

1- A member entitled to attend and vote at this meeting is entitled to appoint another
member as his/her proxy to attend and vote instead of him/her.

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.

There have been three (3) Board meetings during the year and the attendance of each director is
stated hereunder:

Name of Director				No. of meetings attended
Mr. Zahid Hussain					3
Mr. M. P. Gangwani		*			-
Mr. Muhammad Riaz Khan					3
S. M. Fakhir Flasan		(NIT nominee)			-
Mr. Saad Ashraf					1
Mr. Abdul Ghaffar Soomro		(Govt. of N.W.F.P. nominee)			-
Mr. Shah Rukh Arbab					-
Mr. Muhammad Ilyas Dar		(M.O.I. & P nominee)			2
Mr. Muhammad Zafar Khan					-
Mr. Abdul Bari Khan					-
Mr. Shahid Anwar		(I.C.P. nominee)			1

* (No meeting of the Board took place during the year after nomination
on the Board of Mr. M. P. Gangwani and Mr. Muhammad Zafar Khan). •

Accounts for the quarter ending September 30,2002 were approved by the Board through
resolution by circulation. The Directors who did not attend the above meetings were granted leave
of absence by the Board of Directors.

m)- The pattern of shareholding is annexed,
n)- Trading of Company Shares

During the year, no share transactions involving the directors and the company secretary, their
spouses and minor children have been undertaken.

FUTURE OUTLOOK

Full Bench of the Supreme Court of Pakistan have after making final hearing of the appeal
filed by the ex-owners of the company about its privatization announced their decision on
11-12-2002 directing the Privatization Commission to offer the shares held by SCCP to
ex-owners @ Rs. 127.00 per share. Trade & Textile (Pvt) Ltd., the highest bidders in the
second bidding, have filed review petition before the Honorable Supreme Court, which is yet
pending. After the disposal of the review petition by the Court the company will, hopefully, be
privatized and re-operated by the private management.

For and on behalf of the
Board of Directors

STATEMENT ON CORPORATE AND FINANCIAL REPORTING FRAMEWORK

a)- The financial statements prepared by the company fairly present its state of affairs, cash
flows and changes in equity.

b)- Proper books of accounts have been maintained by the company.

c)- Appropriate accounting policies have been consistently applied in the preparation of financial
statements and accounting estimates are based on reasonable and prudent judgment.

d)- Applicable International Accounting Standards have been followed in preparation of financial
statements and there has been no departure therefrom.

e)- The company, as a closed unit, has been granted relaxation for setting up internal audit
function. The company has, however, implemented necessary checks and balances, to
safeguard the interests of all the stakeholder.

f)- The company's accounts have been prepared on going concern basis which is linked with
successful privatization and re-operation of the company.

g)- • There has been no material departure from the best practices of corporate governance, as
detailed in the listing regulations.

h)- The key operating and financial data of last six (6) years is annexed.

i)- The company's operations being temporarily closed, could not declare dividend for the
year under report.

j)- There is nothing outstanding against your company on account of taxes, duties, levies and other
charges except for those which are being made in the normal course of business.

k)- The company maintains approved Provident and Gratuity Funds for its employees which after
relieving of all the employees and arranging payment of their dues comprise of Provident and
Gratuity dues of the Chief Executive Officer and Chief Financial Officer whose services have
been retained pending privatization of the company.

MUSTEHKAM CEMENT LIMITED
Pattern of Holding of Shares As on 30-06-2003

Sr.	No of	Share Holding		No of
No.	Share Holder	From	To	Shares Held
1	3774	1	100	82052
2	693	101	500	140104
3	101	501	1000	73398
4	83	1001	5000	152204
5	12	5001	10000	77478
6	1	10001	15000	13566
7	1	15001	20000	20000
8	1	20001	25000	21933
9	1	30001	35000	34905
10	1	60001	65000	60200
11	1	1135001	1140000	1136226
12	1	10000001	Above	10507934