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Maple Leaf Cement Factory Limited
Annual Report 2000
Contents
Company Information
Notice of Meeting
Directors' Report
Five Years Summary
Pattern of Shareholding
Auditors' Report
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Statement of Equity
Notes To The Accounts
COMPANY INFORMATION
Board of Directors
Mr. Tariq Sayeed Saigol
Chairman/Chief Executive
Mr. Taufique Sayeed Saigol
Mr. Usman Said
Mr. Aamir Fayyaz Sheikh
Mr. Sarmad Amin
Mr. Mansur Aly Malik
Mr. Henrik Starup
(Representing FLS & IFU)
Mr. Mahmood Ahmad
(Rep. Crescent Investment Bank Ltd.)
Company Secretary
Mr. Mohammad Sharif
Bankers of the Company
Allied Bank of Pakistan Limited
The Bank of Punjab
Habib Bank Limited
Muslim Commercial Bank Limited
Soneri Bank Limited
United Bank Limited
National Bank of Pakistan
Gulf Commercial Bank Limited
Auditors
Ford, Rhodes, Robson, Morrow
Chartered Accountants
Legal Advisors
1. Cornelius Lane and Mufti
Advocates & Solicitors,
Lahore.
2. Mr. Nomaan Akram Raja
Barrister-At-Law
Raja Mohammad Akram & Co.
Advocates and Legal Consultants,
Lahore.
Registered Office
42-Lawrence Road, Lahore.
Phone: 6278904-5
Fax: (042) 6363184
E-mail: cement@maple.lcci.org.pk
Factory
Iskanderabad Distt. Mianwali.
Phones: (0459) 392237-8
NOTICE OF THE ANNUAL GENERAL MEETING
Notice is hereby given that the 40th Annual General Meeting of the members of Maple Leaf Cement Factory
Limited will be held at its registered office, 42-Lawrence Road, Lahore on Saturday, 30th December, 2000 at
10:30 A.M. to transact the following business:
1) To confirm the minutes of Extra-ordinary General Meeting held on March 29, 2000.
2) To receive and adopt Audited Accounts of the company for the year ended June 30, 2000 together with
Auditors' and Directors' Reports thereon.
3) To appoint Auditors and fix their remuneration.
The present auditors, M/s Ford, Rhodes, Robson, Morrow, Chartered Accountants, retire and being eligible,
offer themselves for re-appointment.
4) SPECIAL BUSINESS
(i) To pass with or without modification(s) the following resolution as Special Resolution:
"WHEREAS the merger of Part 1 of Maple Leaf Electric Company Limited into the
Company has been proposed by the Board of Directors in view of benefits to the
merged companies and as a consequence to the shareholders.
IT IS HEREBY RESOLVED that the Scheme of Arrangement put before the meeting
for the merger of Part 1 of Maple Leaf Electric Company Limited into Maple Leaf
Cement Factory Limited be and is hereby approved subject to completion of formalities
and approval by the Honourable High Court.
FURTHER RESOLVED that the Chief Executive of the company and/or Mr. Usman
Said, Director of the Company be and is/are hereby authorised to take all such steps
as may be necessary or incidental for the purpose of implementing the aforesaid
scheme of the merge/amalgamation of the above named companies".
(ii) To approve the remuneration of the Chief Executive and full time working Director of the Company
and pass the following two resolutions as Ordinary Resolutions with or without amendment:-
(a) "RESOLVED that a sum of Rs. 100,000 (Rupees one hundred thousand only) be and
is hereby approved towards monthly remuneration inclusive of house rent allowance
of Chief Executive of the Company for term of his office ending December 31,2001.
In addition to the above, a company maintained chauffeur driven car for official and
private use, private security guards at his residence, hard and soft furniture, and all
other benefits incidental or relating to his office plus bonus in accordance with the
rules and policy of the company shall also be provided to him".
(b) "RESOLVED that a sum of Rs. 85,250 (Rupees eighty five thousand two hundred
fifty only) be and is hereby approved towards monthly remuneration inclusive of house
rent allowance of the full time working Director of the Company as General Manager
(Marketing) for term of his office ending December 31,2001. In addition to the above,
a company maintained car with driver's and security guard's salaries, LFA, medical
facilities and with annual increment and all other benefits incidental or relating to his
office plus bonus and provident fund in accordance with the rules and policy of the
Company shall also be provided to him".
5) To transact any other business with the permission of the Chair.
By order of the Board
Mohammad Sharif
Lahore: December 09, 2000. Company Secretary
STATEMENT U/S 160 (1) (b) OF THE COMPANIES ORDINANCE, 1984.
(i) The management of the Company has considered various options for consolidating its activities and
thereby effecting economies for the benefit of the Company and ultimately for the shareholders.
It is with this goal before it, that the management of the Company, in consultation with technical experts
in the field, has reached to the conclusion that Part 1 of Maple Leaf Electric Company Limited comprising
of the power project installed at the premises of the Company and supplying electricity to the Company
be merged with the Company.
Maple Leaf Electric Company Limited is a public limited company quoted on Karachi & Lahore Stock
Exchanges. Its Authorised Capital is Rupees 750,000,000/- (Rupees Seven Hundred Fifty Million Only)
divided into 75,000,000 ordinary shares of Rs. 10/- each and its paid up capital is Rupees 520,000,000/-
(Rupees Five Hundred Twenty Million Only) divided into 52,000,000 ordinary shares of Rs. 10/- each.
The Directors of the Company may be deemed to be interested to the extent of their shareholding or by
the Companies in which they are Directors.
(ii) The Shareholder's approval will be sought for the remuneration payable to the Chief Executive and the
full time working Director of the Company in accordance with the terms and conditions of their service with
the Company. The Authorised Capital of the company is Rs. two billion with subscribed and paid-up capital
of Rs. 1.546 billion. The production facilities are located at Iskanderabad, Mianwali and annual gross
sales revenue is Rs. 4,353 million for the year ended June 30, 2000.
Notes:
1. The scheme of arrangement for merger of Part 1 of Maple Leaf Electric Company Limited into the
Company is appended herewith and may also be inspected during business hours in the registered
office of the company.
2. Share Transfer Books of the Company will remain closed from 23rd December, 2000 to 30th
December, 2000 (both days inclusive). Transfers received in order at Company's Shares Department,
42-Lawrence Road, Lahore upto 12:00 noon on 22nd December, 2000 will be considered in time.
3. A member eligible to attend and vote at this meeting may appoint another member as his/her proxy
to attend and vote instead of him/her. Proxies in order to be effective must reach at the Company's
registered office not less than 48 hours before the time for holding the meeting.
4. The Beneficial Owners of the company through Central Depository Company, entitled to attend
and vote at this meeting, must bring his/her NIC or Passport to prove his/her identity, and in case
of Proxy, must enclose an attested copy of his/her NIC or Passport. Representatives of corporate
members should bring the usual documents required for such purpose.
5. Shareholders are requested to immediately notify the change in address, if any.
SCHEME OF ARRANGEMENT
UNDER SECTIONS 284 TO 288 OF THE COMPANIES ORDINANCE, 1984
FOR MERGER BETWEEN
MAPLE LEAF ELECTRIC COMPANY LIMITED
AND
MAPLE LEAF CEMENT FACTORY LIMITED
AND
KOHINOOR TEXTILE MILLS LIMITED
AND
THEIR RESPECTIVE MEMBERS
PRELIMINARY
Definitions
In this Scheme of Arrangement, unless the subject or context otherwise requires, the following expressions
shall bear the meanings specified against them below:
"MLECL" means Maple Leaf Electric Company Limited, a company, limited by
shares incorporated as a public limited company having its registered
office at Lahore.
"MLCFL" means Maple Leaf Cement Factory Limited a company, limited by
shares incorporated as a public limited company having its registered
office at Lahore.
"KTM" means Kohinoor Textile Mills Limited, a company, limited by shares
incorporated as a public limited company having its registered office
at Lahore.
"the Court" means Lahore High Court, Lahore.
"this Scheme" means this Scheme of Arrangement in its present form with any
modification thereof or addition thereto approved or condition imposed
by the court.
"the Effective Date" means the day on which the Scheme becomes operative in accordance
with clause 4.0 of this Scheme.
"Undertaking of MLECL" means the two Power Projects of Maple Leaf Electric Company Limited
installed at the premises of Maple Leaf Cement Factory Limited,
Iskanderabad and Kohinoor Textile Mills Limited, Rawalpindi
respectively as divided into two separate parts namely Part 1 and
Part 2 and as contained specifically in Annex "A" and Annex "B" to
this scheme.
The headings and marginal notes are inserted for convenience and shall not affect the construction of this
Scheme.
Capital
The authorised share capital of Maple Leaf Electric Company Limited (MLECL) is Rupees 750,000,000 divided
into 75,000,000 ordinary shares of Rupees 10 each and its paid up capital is Rupees 520,000,000 divided into
52,000,000 ordinary shares of Rupees 10 each.
The authorized share capital of Maple Leaf Cement Factory Limited (MLCFL) is Rupees 2,000,000,000 divided
into 200,000,000 ordinary shares of Rupees 10 each and its paid up capital is Rupees 1,546,473,240 divided
into 154,647,324 ordinary shares of Rupees 10 each.
The authorised share capital of Kohinoor Textile Mills Limited (KTM) is Rupees 700,000,000 divided into
70,000,000 ordinary shares of Rupees 10 each and its paid up capital is Rupees 271,648,380 divided into
27,164,838 ordinary shares of Rupees 10 each.
THE SCHEME
OBJECT OF THIS SCHEME'
1.0 The principal object of this scheme is to reorganize/reconstruct Maple Leaf Electric Company Limited
(MLECL) and bifurcate/divide the assets and liabilities of the Maple Leaf Electric Company Limited (MLECL)
into two parts namely Part 1 and Part 2, as contained specifically in Annexes "A" and "B" to the Scheme
and effect merger of Part 1 of the Maple Leaf Electric Company Limited (MLECL) with Maple Leaf Cement
Factory Limited (MLCFL) and Part 2 of Maple Leaf Electric Company Limited (MLECL) with Kohinoor
Textile Mills Limited (KTM), through the transfer and vesting in MLCFL and KTM of the two parts mentioned
above.
WHEREBY IT IS PROPOSED THAT:
1.1 The undertakings of MLECL comprising of Part 1 and Part 2 (as contained specifically in Annexes
"A" and "B" to this scheme), as at the transfer date (as hereinafter defined) including all assets,
properties, rights, privileges, powers, bank accounts, trade marks, title deeds, patents, leave and
licences and all or any other assets, properties, rights, privileges, powers, contracts, bank accounts,
trade marks, title deeds, patents and licences of MLECL as may reasonably be allocatable to each
part as at the transfer date (as hereinafter defined) shall, without further act or deed, stand transferred
to and be vested in MLCFL and KTM as per Annexes "A" and "B", respectively, as from the
commencement of business on 01 July 2000 (hereinafter referred to as the "transfer date").
1.2 Without prejudice to the generality of paragraph 1.1 above, undertakings of MLECL shall include all
rights, powers, authorities, privileges, contracts, benefits of Government consents, sanctions and
authorisations, trade marks, patents, licences, liberties and all properties, immovable and movable,
real, corporeal or incorporeal, in possession or reversion, present or contingent of whatsoever nature
and where so ever situate, including in particular reserves, revenue balances, leasehold properties,
investments, deposits, deferred costs, stores and spares, advances, deposits, prepayments, other
receivables, cash and bank balances, telephones, faxes, e-mail and telexes and trade debts owing
to MLECL and all other authorities, rights or interests in or arising out of such property as may belong
to or be in the possession or claim of MLECL on the transfer date and all books of account and
documents relating thereto, and shall be deemed to include all debts, borrowings, liabilities, duties
and obligations of MLECL of whatever kind, including liabilities for payment of gratuity, pension,
benefits, provident fund or compensation in the event of retrenchment, PROVIDED ALWAYS that
this Scheme shall not operate to enlarge the security for any loan, deposit or facility created by or
available to MLECL which shall vest in MLCFL and KTM on approval of this Scheme by the Honourable
Lahore High Court, Lahore and MLCFL and KTM as the case may be shall not be obliged to create
any further or additional security therefor after the approval of this Scheme as aforesaid or otherwise.
1.3 The transfer and vesting of the undertakings of MLECL under Clauses 1.1 and 1.2 hereof and the
continuance of proceedings by MLCFL and KTM under Clause 1.7 hereof shall not affect any
transactions or proceedings already concluded by MLECL in the ordinary course of business and
after the transfer date to the end and intent that MLCFL and KTM respectively accept on behalf of
themselves all acts, deeds and things done and executed by MLECL in relation to the part being
merged with either, as the case may be.
1.4 As from the transfer date, MLECL shall be deemed to have carried on and to carry on its business
on behalf of and on account of MLCFL and KTM until such time as this Scheme becomes fully
effective.
1.5 MLCFL shall in respect of the assets and liabilities mentioned in Annex "A" undertake, pay, satisfy,
discharge, perform and fulfill all debts, liabilities, contracts, engagements and obligations whatsoever
of MLECL as at the transfer date, and all contracts, deeds, bonds, agreements, powers of attorney,
grants of legal representation and all other instruments of whatever kind subsisting or having effect
immediately before the transfer date to which MLECL may be a party or which shall be in favour of
MLECL as they were before the transfer date and may be enforced or acted upon as fully and
effectively as if instead of MLECL, MLCFL had been a party thereto or as if the same had been issued
by or in favour of MLCFL, PROVIDED ALWAYS the existing creditors of MLCFL and MLECL
respectively having charges over the land, building, machinery and other fixed assets of the respective
companies shall continue to retain their security interests over the land, building, machinery and other
fixed assets respectively charged in their favour; the existing creditors of MLCFL having charges over
the current assets of MLCFL shall retain their respective charges over the current assets as on the
transfer date of MLCFL and shall have a first charge ranking, pari passu inter se, on the future current
assets which are kept at the MLCFL premises; and the existing creditors of MLECL having charges
over the current assets of MLECL shall retain their respective charges over the existing current assets
of MLECL as on the transfer date and shall have a first charge ranking pari passu inter se, on the
future current assets which are kept at the MLECL premises after the transfer date.
1.6 KTM shall in respect of the assets and liabilities mentioned in Annex "B" undertake, pay, satisfy,
discharge, perform and fulfill all debts, liabilities, contracts, engagements and obligations whatsoever
of MLECL as at the transfer date, and all contracts, deeds, bonds, agreements, powers of attorney,
grants of legal representation and all other instruments of whatever kind subsisting or having effect
immediately before the transfer date to which MLECL may be a party or which shall be in favour of
MLECL as they were before the transfer date and may be enforced or acted upon as fully and
effectively as if instead of MLECL, KTM had been a party thereto or as if the same had been issued
by or in favour of KTM, PROVIDED ALWAYS the existing creditors of KTM and MLECL respectively
having charges over the land, building, machinery and other fixed assets of the respective companies
shall continue to retain their security interests over the land, building, machinery and other fixed
assets respectively charged in their favour; the existing creditors of KTM having charges over the
current assets of KTM shall retain their respective charges over the current assets as on the transfer
date of KTM and shall have a first charge ranking, pari passu inter se, on the future current assets
which are kept at the KTM premises; and the existing creditors of MLECL having charges over the
current assets of MLECL shall retain their respective charges over the existing current assets of
MLECL as on the transfer date and shall have a first charge ranking pari passu inter se, on the future
current assets which are kept at the MLECL premises after the transfer date.
1.7 All causes, suits, appeals, petitions/revisions or other judicial, quasi judicial and/or administrative
proceedings of whatever nature by or against MLECL which shall be pending on the transfer date
in or before any court, tribunal forum or other authority will be continued, prosecuted and enforced
in the same manner and to the same extent as they would or might have been continued, prosecuted
and enforced by or against MLECL as if this Scheme had not been made, by or against MLCFL and
KTM to the extent and relating to the part being merged with each and the same shall not abate, be
discontinued or be in any way prejudiced or affected by the provisions of this Scheme.
1.8 Every officer, workman or other employee of MLECL engaged directly on the project forming Part 1
of MLECL shall, on the transfer date, become an officer, workman or employee, as the case may be,
of MLCFL on the basis that his services have not been interrupted by the vesting of the Part 1 of
MLECL, in MLCFL under this Scheme and on the same remunerations and other conditions of service,
rights and privileges as to pension, provident fund and gratuity, if any, and other matters as were
applicable to him before the transfer date.
1.9 Every officer, workman or other employee of MLECL engaged directly on the project forming Part 2
of MLECL and/or the head office of MLECL shall, on the transfer date, become an officer, workman
or employee, as the case may be, of KTM on the basis that his services have not been interrupted
by the vesting of the Part 2 of MLECL, in KTM under this Scheme and on the same remunerations
and other conditions of service, rights and privileges as to pension, provident fund and gratuity, if
any, and other matters as were applicable to him before the transfer date.
2.0 As consideration for the said transfers, the individual members of MLECL shall get "X" numbers of fully
paid-up ordinary share of the par value of Rupees 10 each in the capital of MLCFL and "Y" numbers of
fully paid-up ordinary share of the par value of Rupees 10 each in the capital of KTM for every One fully
paid-up share of the par value of Rupees 10 each held by them in the capital of MLECL, as on a day to
be fixed by the board of Directors of MLCFL and KTM following the transfer date. The value of "X" and
"Y" will be determined on the basis of ratio resulting from the average of the undermentioned two figures
for the three companies:
a) Break-up value of the shares as per audited accounts for the year ended 30 June 2000.
b) Average of weekly quotation of the shares on the Karachi Stock Exchange from 01 July 1999
to 30 June 2000.
All costs, charges and expenses of carrying this scheme into effect shall be borne and paid by MLCFL
and KTM proportionately.
2.1 The said fully paid-up ordinary shares in MLCFL and KTM to be issued and allotted to the members
of MLECL shall rank pari passu in all respects with the existing fully paid-up ordinary shares in MLCFL
and KTM respectively.
2.2 All members whose names shall appear in the Register of Members of MLECL on such date (after
the transfer date) as the Board of Directors of MLCFL and KTM may determine, shall surrender their
share certificates for cancellation thereof to the shares department of KTM who shall coordinate for
the issuance of shares by MLCFL and KTM in the determined proportion. In default, upon the new
shares in MLCFL and KTM being issued and allotted by it to the members of MLECL whose name
shall appear on the Register of Members of MLECL on such date, as aforesaid, the share certificates
in relation to the shares held by them in MLECL shall be deemed to have been cancelled.
2.3 The excess value of the net assets of Part 1 of MLECL as at 30 June 2000 over the paid-up value
of shares issued and allotted pursuant to the terms of Clause 2.0 hereof shall be accounted for in
the books of MLCFL, as at the transfer date that the Capital Reserves, Revenue Reserves and the
unappropriated profit of Part 1 of MLECL, as at 30 June 2000 shall constitute Reserves of a
corresponding nature of MLCFL and the balance, if any, transferred to the General Reserves in
MLCFL.
2.4 The excess value of the net assets of Part 2 of MLECL as at 30 June 2000 over the paid-up value
of shares issued and allotted pursuant to the terms of Clause 2.0 hereof shall be accounted for in
the books of KTM, as at the transfer date, that the Capital Reserves, Revenue Reserves and the
unappropriated profit of Part 2 of MLECL, as at 30 June 2000 shall constitute Reserves of a
corresponding nature of KTM and the balance, if any, transferred to the General Reserves in KTM.
3.0 The Chief Executives of MLCFL, KTM and MLECL acting jointly or any person or persons duly authorised
by the respective boards of MLCFL, KTM and MLECL shall be authorised to take all such further
supplemental, incidental and consequential actions and steps as may be requisite for giving full effect to
this Scheme and may consent on behalf of all concerned to any modification of or addition to this Scheme
or to. any condition which the Honourable Lahore High Court, Lahore may deem fit to impose.
4.0 Subject to an order being made by the Honourable Lahore High Court, Lahore under Section 287 of the
Companies Ordinance 1984, MLECL shall, without winding up, stand dissolved from such date on which
all shares to be allotted by MLCFL and KTM under Clause 2.0 above to the member(s) of MLECL shall
have been so allotted.
5.0 The approvals and/or confirmations and/or directions to the proposed transfer of undertakings as set out
in Clauses 1.1 and 1.2 of this Scheme have been received from the share holders of MLCFL, KTM and
MLECL.
6.0 This Scheme shall be subject to such modifications or conditions as the Honourable Lahore High Court,
Lahore may approve or impose.
7.0 In case this Scheme is not finally sanctioned by the Honourable Lahore High Court, Lahore for any reason
whatsoever OR if for any other reason this Scheme cannot be implemented before 30 June 2001 or within
such further period or periods as may be agreed upon by MLCFL, KTM and MLECL (by the authorized
person(s) as approved under clause 3.0 above) this Scheme shall become null and void and in that event
no rights and liabilities shall accrue to or be incurred inter se by the parties in terms of this Scheme.
MAPLE LEAF ELECTRIC COMPANY LIMITED
PART 1
DETAILS OF ASSETS AND RELATED LIABILITIES AS ON 31) JUNE 2000
OF POWER PROJECT INSTALLED AT PREMISES OF
MAPLE LEAF CEMENT FACTORY LIMITED
RUPEES
ASSETS
Fixed Assets
Building on leasehold land 39,583,215
Plant and machinery 374,838,902
Electric equipment and installation 5,579,582
Furniture and fixtures 635,889
Office equipment 275,734
Fire fighting equipment 137,627
Vehicles 365,262
------------
421,416,211
Assets subject to finance lease 227,328
Long Term Deposit and Deferred Costs 4,900
Current Assets
Stores, spares and loose tools 42,623,899
Trade debts 77,235,936
Advances, deposits, prepayments and other receivables 16,438,717
Cash and bank balances 119,947
------------
136,418,499
------------
TOTAL ASSETS 558,066,938
==========
LIABILITIES
Share Capital and Reserves
Authorized Capital (37,764,675 Ordinary shares of Rs. 10/- each) 377,646,750
==========
Issued, subscribed and paid-up capital 261,835,080
Reserves 186,305,730
Unappropriated profit 2,044,254
------------
450,185,064
Long Term Loans and Deferred Liabilities
Supplier's credit --
Liability against assets subject to finance lease --
Provision for gratuity 490,225
------------
490,225
Current Liabilities
Current portion of long term liabilities 156,498
Short term finance 63,150,000
Creditors, accrued and other liabilities 11,355,766
Unclaimed dividend --
Proposed dividend 32,729,385
Provision for taxation --
------------
107,391,649
------------
TOTAL CAPITAL AND LIABILITIES 558,066,938
==========
MAPLE LEAF ELECTRIC COMPANY LIMITED
PART 2
DETAILS OF ASSETS AND RELATED LIABILITIES AS ON 30 JUNE 2000
OF POWER PROJECT INSTALLED AT PREMISES OF
KOHINOOR TEXTILE MILLS LIMITED
RUPEES
ASSETS
Fixed Assets
Building on leasehold land 20,413,417
Plant and machinery 156,186,244
Electric equipment and installation 7,287,146
Furniture and fixtures 371,721
Office equipment 689,975
Fire fighting equipment 44,264
Vehicles 2,811,739
------------
187,804,506
Assets subject to finance lease 8,302,444
Long Term Investment 133,676,603
Long Term Deposit and Deferred Costs 3,865,137
Current Assets
Stores, spares and loose tools 41,312,894
Trade debts 146,017,755
Advances, deposits, prepayments and other receivables 42,352,557
Cash and bank balances 17,462,189
------------
247,145,395
------------
TOTAL ASSETS 580,794,085
LIABILITIES
Share Capital and Reserves
Authorized Capital (37,235,325 Ordinary shares of Rs. 10/- each) 372,353,250
==========
Issued, subscribed and paid-up capital 258,164,920
Reserves 183,694,270
Unappropriated profit 2,015,084
------------
443,874,274
Long Term Loans and Deferred Liabilities
Liability against assets subject to finance lease --
Provision for gratuity 545,963
------------
545,963
Current Liabilities
Current portion of long term liabilities 4,381,280
Short term finance 61,691,419
Creditors, accrued and other liabilities 13,527,640
Unclaimed dividend 181,956
Proposed dividend 32,270,615
Provision for taxation 24,320,938
------------
136,373,848
------------
TOTAL CAPITAL AND LIABILITIES 580,794,085
==========
DIRECTORS' REPORT TO THE SHAREHOLDERS
Your directors are pleased to present annual report and the audited accounts for the financial year ended
June 30, 2000.
The operating results of the company improved due to the increase in capacity utilization, decrease in financial
& depreciation charge and stability in selling price during the year under review. Pre-tax loss for year ended
June 30, 2000 reduced to Rs. 70.226 million from Rs. 578.976 million last year. In the over supply market with
sales volume at only 65% of capacity, the selling price was not enough to meet rising input cost and fixed
charge especially depreciation and financial expenses. However, on adjustment of tax refund and deferred tax
liability, the profit after tax for the year amounted to Rs. 1.618 million against last year's after tax loss Rs.
590.133 million.
Production & Sales
The production and sales for the year under review compare favourably with last year and are given as under:
Grey White
Clinker Cement Clinker Cement
Production (M. Tonnes)
2000 993,634 1,022,717 37,720 39,340
1999 849,777 893,975 34,470 35,883
Sales (M. Tonnes)
2000 1,009,501 39,497
1999 900,243 36,752
Financial Results
The financial results for the year ended June 30, 2000 are as under:
(Rs. in thousand)
Loss before taxation (70,226)
Provision for taxation:
Current year (15,128)
Prior years 32,601
Deferred 54,371 71,844
------------ ------------
Profit after taxation 1,618
Un-appropriated loss brought forward (960,848)
Transfer from general reserve 749,664
------------
Loss carried to balance sheet (209,566)
==========
During the year under review, there was no deferred tax liability. As such the deferred tax liability of Rs. 54.371
million has been written back.
The Earning Per Share (EPS) of the year ended June 30, 2000 was Rs. 0.01. There being pre tax loss
Rs. 70.226 million, no dividend is recommended.
Future Prospects
In the past four years demand for cement failed to grow at the pace of increased supply. The national economy
has also not shown recovery due to dwindling foreign exchange reserves, massive debt servicing, increasing
import as compared to exports, resultantly capping government infra-structural development expenditures. This
has reduced the cement demand in public sector.
On deregulation of furnace oil in July, 2000 its price has been doubled in one year. The continuous enhancement
in furnace oil prices has tremendously increased the production cost while the selling price registered declining
trend.
The imposition of sales tax @ 15% effective from 5th September, 2000 has created regional disparity with three
cement manufacturers in NWFP enjoying exemption from this levy. Another factor of discrimination is provision
of low cost fuel i.e. natural gas to some units. This has denied the level playing field in cement sector. The
difference in prices between exempted and non-exempted units disturbed the whole system resulting in unstable
market conditions.
The future prospects therefore are related with economic revival, incentive to cement sector, removal of disparity
and consistency in taxation & fiscal policies of the government.
The management being conscious of rising cost of production, constantly keeps on reviewing the various
alternatives to reduce the cost. As such, different measures i.e. production of special cement, use of low cost.
fuel like coal instead of imported furnace oil and substitute of kraft paper bags for packing are presently under
active consideration.
Rescheduling of Long Term Loans
Muslim Commercial Bank Limited and Bank Of Punjab have rescheduled their long term loans and their loans
are being paid according to agreed revised schedules. The Board of Directors of International Finance
Corporation (IFC) has also approved the restructuring of their loan and requires principal payment of US $
1,093,750 during the year 2000-2001 from company's own resources. The agreement for restructuring of IFC
loan is in process and a sum of Rs. 707.884 million representing the over due principal installment will stand
deferred and excluded from the current liabilities on signing of the agreement. The company is also working
on conversion of part of IFC loan into local currency loan backed by IFC guarantee.
Right Issue
As a part of IFC proposal for restructuring, 18.75 % right offer, 24,418,000 shares of Rs. 10 each at 20%
discount i.e. @ Rs. 8 per share have been subscribed/taken up by the underwriters and right issue stands
subscribed and allotted in full in the period subsequent to balance sheet date. The management is of the view
that with the additional equity injection, the company will be able to meet its debt obligations on schedule.
Merger Arrangements for Maple Leaf Electric Company Ltd.
As a measure for consolidating its activities and thereby effecting economies for the benefit of the company
and ultimately for the shareholders, the Board of Directors recommend that part I of Maple Leaf Electric Company
Limited comprising of the power project installed at company's premises and supplying electricity to the company
be merged with the company. The scheme of arrangement for merger is proposed for members' approval
through Special Resolution in forthcoming Annual General Meeting.
Auditors
M/s Ford, Rhodes, Robson, Morrow, Chartered Accountants the present auditors retire and being eligible offer
themselves for re-appointment for next year.
Pattern of Shareholding
The Shareholding Pattern of the company as on June 30, 2000 is included in the Annual Report.
Labour Management Relationship
The Board wishes to place on record its appreciation for the efforts and services rendered by the officers and
workers who worked as a team throughout the year. It is expected that the same would be coming forth in the
years to come.
For and on behalf of the board
(Tariq Sayeed Saigol)
Lahore: November 29, 2000 Chairman / Chief Executive
FIVE YEARS SUMMARY
1999-2000 1998-99 1997-98 1996-97 1995-96
Quantitative Data (M. Tonnes)
Grey Cement:
Production 1,022,717 893,975 551,473 471,070 488,961
Sales 1,009,501 900,243 545,318 474,415 481,881
White Cement:
Production 39,340 35,883 32,700 33,412 34,720
Sales 39,497 36,752 32,758 33,405 34,450
Sales (Rs. 000)
Gross sales 4,353,526 3,577,219 1,630,218 1,911,471 1,675,074
Less: Excise duty 1,468,599 1,455,355 676,269 604,718 397,782
Sales tax -- -- -- 277,944 235,457
Rebate 85,816 86,409 28,303 15,090 11,001
------------ ------------ ------------ ------------ ------------
Net sales 2,799,111 2,035,455 925,646 1,013,719 1,030,834
========== ========== ========== ========== ==========
Profitability (Rs. 000)
Profit/(Loss) before tax (70,226) (578,976) (368,517) 40,041 238,554
Provision for income tax 71,844 (11,157) (4,770) (12,200) (98,000)
------------ ------------ ------------ ------------ ------------
Profit/(Loss) after tax 1,618 (590,133) (373,287) 27,841 140,554
========== ========== ========== ========== ==========
Financial Position (Rs. 000)
Tan9ible fixed assets-net 5,511,852 6,099,791 6,349,668 5,966,034 3,780,420
Investment & other assets 56,680 20,066 21,248 364,466 380163
------------ ------------ ------------ ------------ ------------
5,568,532 6,119,857 6,370,916 6,330,500 4,160,583
------------ ------------ ------------ ------------ ------------
Current assets 963,225 798,888 852,693 844,219 1,880,883
Current liabilities (1,768,537) (1,702,401) (1,216,183) (554,900) (380,854)J
------------ ------------ ------------ ------------ ------------
Net working capital (805,312) (903,513) (363,490) 289,319 1,500,029
------------ ------------ ------------ ------------ ------------
Capital employed 4,763,220 5,216,344 6,007,426 6,619,819 5,660,612
Less Long term loan & other liab. (2,169,581) (2,676,399) (2,877,348) (3,116,454) (2,557,172)
------------ ------------ ------------ ------------ ------------
Share holders Equity 2,593,639 2,539,945 3,130,078 3,503,365 3,103,440
========== ========== ========== ========== ==========
Represented By:
Share capital 1,302,293 1,302,293 1,302,293 1,302,293 930,209
Share deposit money 52,076 -- -- -- --
Reserves & un-app. profit 1,239,270 1,237,652 1,827,785 2,201,072 2,173,231
------------ ------------ ------------ ------------ ------------
2,593,639 2,539,945 3,130,078 3,503,365 3,103,440
========== ========== ========== ========== ==========
Ratios:
Gross Profit/(Loss) to sales (%age) 16.13 (2.86) (7.27) 5.14 19.59
Net Profit/(Loss) to sales (%age) 0.06 (28.99) (40.33) 2.75 13.63
Debt equity ratio 45:55 49:51 47:53 45:55 44:56
Current ratio 0.54 0.47 0.69 1.52 4.94
Break up value per share of Rs. 10 each 19.92 19.50 24.04 26.90 33.36
PATTERN OF SHAREHOLDING AS ON JUNE 30, 2000
Size of Holding
No. of Total
Shareholders From To Shares Held
1138 1 100 54,491
2500 101 500 766,431
1978 501 1000 1,455,643
3726 1001 5000 7,632,920
550 5001 10000 3,902,464
155 10001 15000 1,896,391
89 15001 20000 1,567,683
49 20001 25000 1,127,160
35 25001 30000 977,284
17 30001 35000 557,265
27 35001 40000 1,003,166
13 40001 45000 555,105
17 45001 50000 831,822
10 50001 55000 528,096
8 55001 60000 454,959
9 60001 65000 560,703
5 65001 70000 340,275
5 70001 75000 371,164
6 75001 80000 469,154
6 80001 85000 492,043
6 85001 90000 532,280
3 90001 95000 281,450
8 95001 100000 792,015
2 100001 105000 201,558
2 105001 110000 218,887
1 110001 115000 111,134
1 115001 120000 115,424
1 120001 125000 123,000
5 125001 130000 643,744
2 130001 135000 264,600
1 140001 145000 143,000
1 145001 150000 !45,531
2 155001 160000 312,999
2 160001 165000 327,773
2 165001 170000 335,358
1 180001 185000 181,377
1 190001 195000 193,332
1 195001 200000 200,000
1 200001 205000 203,000
3 210001 215000 637,687
1 225001 230000 227,148
1 250001 255000 253,962
1 255001 260000 255,275
1 270001 275000 270,572
1 310001 315000 313,557
1 325001 330000 329,000
1 335001 340000 338,000
1 340001 345000 342,000
1 345001 350000 350,000
1 385001 390000 386,191
1 390001 395000 394,445
1 410001 415000 411,500
1 415001 420000 418,000
2 435001 440000 872,253
1 445001 450000 450,000
1 575001 580000 576,608
1 580001 585000 580,200
1 675001 680000 677,406
1 680001 685000 681,700
1 720001 725000 720,389
1 760001 765000 764,470
1 805001 810000 807,900
1 835001 840000 839,300
1 885001 890000 885,168
1 995001 1000000 1,000,000
1 1595001 1600000 1,600,000
1 3395001 3400000 3,400,000
1 3415001 3420000 3,420,000
1 4180001 4185000 4,181,321
1 4700001 4705000 4,702,625
1 5995001 5000000 6,000,000
2 6935001 6940000 13,873,091
1 7235001 7240000 7,239,724
1 7780001 7785000 7,780,374
1 13955001 13960000 13,959,036
1 19415001 19420000 19,419,141
------------ ------------ ------------ ------------
Grand Total: 10,427 130,229,324
========== ========== ========== ==========
Categories of No. of Shares Percentage
Shareholders Shareholders Held of Capital
Individuals 10226 32,027,146 24.593
Investment Companies 13 1,608,078 1.235
Insurance Companies 6 989,612 0.760
Joint Stock Companies 93 38,031,102 29.203
Financial Institutions 40 13,781,342 10.582
Foreign Companies 31 43,459,820 33.372
Modaraba Companies 18 332,224 0.255
------------ ------------ ------------
Grand Total: 10,427 130,229,324 100.000
========== ========== ==========
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of Maple Leaf Cement Factory Limited as at June 30, 2000, and
the related profit and loss account, cash flow statement and statement of changes in equity, 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.
It is the responsibility of the company's management to establish and maintain a system of internal control,
and prepare and present the above said statements in conformity with the approved accounting standards and
the requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these
statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards
require that we plan and perform the audit to obtain reasonable assurance about whether the above said
statements are free of any material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the above said statements. An audit also include assessing the
accounting policies and significant estimates made by management, as well as, evaluating the overall presentation
of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after
due verification, we report that:-
(a) in our opinion, proper books of accounts have been kept by the company as required by the Companies
Ordinance, 1984;
(b) in our opinion:
(i) 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
accounts and are further in accordance with accounting policies consistently applied;
(ii) the expenditure incurred during the year was for the purpose of the 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, cash flow statement and statement of changes in
equity together with the notes forming part thereof conform with approved accounting standards as
applicable in Pakistan, and, 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, 2000 and of the profit, its cash flow and changes in equity for the year then ended; and
(d) in our opinion, no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980.
Ford, Rhodes, Robson, Morrow
Lahore: November 20, 2000 Chartered Accountants
BALANCE SHEET AS AT JUNE 30, 2000
2000 1999
Note (Rupees in thousand)
Share Capital and Reserves
Authorised capital
200,000,000 (1999: 200,000,000) ordinary
shares of Rs. 10/- each 2,000,000 2,000,000
Issued, subscribed and paid up capital
130,229,324 (1999: 130,229,324) ordinary
shares of Rs. 10/- each 3 1,302,293 1,302,293
Share deposit money 52,076 --
Reserves 4 1,448,836 2,198,500
Accumulated loss (209,566) (960,848)
2,593,639 2,539,945
Long Term Loans 5 2,154,015 2,464,353
Liabilities Against Assets Subject
to Finance Lease 6 -- 134
Deferred and Long Term Liabilities 7 5,726 201,021
Long Term Deposits 8 9,840 10,891
Current Liabilities
Current portion of long term liabilities 9 848,938 8,163,941
Short term finance 10 162,462 126,189
Creditors, accrued and other liabilities 11 709,784 713,575
Provision for taxation 47,353 46,243
------------- -------------
1,768,537 1,702,401
Contingencies and Commitments 12
------------- -------------
6,531,757 6,918,745
========== ==========
Tangible Fixed Assets
Operating assets 13 5,511,202 6,097,798
Assets subject to finance lease 14 410 1,820
Capital work in progress 15 240 173
------------- -------------
5,511,852 6,099,791
Long Term investments 5,000 5,000
Long Term Loans, Deposits 17
and Deferred Costs 51,680 15,066
Current Assets
Stores, spares and loose toots 18 427,115 366,524
Stock-in-trade 19 155,552 84,709
Trade debts 20 67,797 59,420
Loans, advances, deposits, prepayments
and other receivables 21 116,751 67,797
Short term investments 22 2,659 1,396
Cash and bank balances 23 163,036 219,042
------------- -------------
963,225 798,888
Cash and bank balances ------------- -------------
6,531,757 6,918,745
========== ==========
The annexed notes form an integral part of these accounts.
Tariq Sayeed Saigol Usman Said
Chief Executive Director
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2000
2000 1999
Note (Rupees in thousand)
Sales 24 2,799,111 2,035,455
Cost of goods sold 25 2,347,646 2,093,613
------------- -------------
Gross Profit/(Loss) 451,465 (58,158)
Selling, administrative and general expenses 26 72,232 53,744
------------- -------------
Operating Profit/(Loss) 379,233 (111,902)
Other income 27 17,751 35,639
------------- -------------
396,984 (76,263)
Financial charges 28 467,197 502,669
Other charges 29 13 44
------------- -------------
467,210 502,713
------------- -------------
Loss Before Taxation (70,226) (578,976)
Provision for taxation 30 71,844 (11,157)
Profit / (Loss) After Taxation 1,618 (590,133)
Unappropriated loss brought forward (960,848) (370,715)
------------- -------------
(959,230) (960,848)
Transfer from general reserve 749,664 --
------------- -------------
Loss Carried Forward (960,848) (209,566)
========== ==========
Earning Per Sham (Rs.) 33 0.01 (4.50)
The annexed notes form an integral part of these accounts.
Tariq Sayeed Saigol Usman Said
Chief Executive Director
CASH FLOW STATEMENT
FOR THE YEAR ENDED JUNE 30, 2000
2000 1999
Note (Rupees in thousand)
Cash Flows From Operating Activities
Cash generated from operations A 500,008 222,082
Payments for:
Earned leave (3,049) (6,351)
Taxes 18,583 (12,105)
Long term deposits (net) (1,051) (1,199)
Duties and levies (229,328) 140,164
------------ ------------
Net Cash Inflow From Operating Activities 285,163 342,591
Cash Flows From Investing Activities
Fixed assets purchased (45,104) (293,782)
Capital work in progress (67) (173)
Long term loans and deposits (net) (3,061) 4,855
Sale proceeds of fixed assets 2,319 1,452
------------ ------------
Net Cash Outflow From Investing Activities (45,913) (287,648)
Cash Flows From Financing Activities
Right issue 52,076 --
Long term loans less repayments (290,222) (76,311)
Repayment of liability under finance lease (706) (10,557)
Deferred cost (56,404) (10,588)
------------ ------------
Net Cash Outflow From Financing Activities (295,256) (97,456)
Net Decrease in Cash and Cash Equivalents (56,006) (42,513)
Cash and Cash Equivalents at beginning of the Year B 219,042 261,555
------------ ------------
Cash and Cash Equivalents at end of the Year B 163,036 219,042
========== ==========
Tariq Sayeed Saigol Usman Said
Chief Executive Director
NOTES TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED JUNE 30, 2000
2000 1999
(Rupees in thousand)
A. Cash Flows From Operating Activities
Loss before taxation (70,226) (578,976)
Add/(less) adjustment for non cash charges
and other items
Depreciation 644,308 732,006
Amortisation of leased assets 103 455
Provision for earned leave 2,289 3,297
Profit on sale of fixed assets (620) (278)
Amortisation of deferred costs 22,851 6,915
Provision for diminution in short term investment (1,263) 598
------------ ------------
Cash Before Working Capital Changes 597,442 164,017
Movement in Working Capital
(Increase)/decrease in current assets
Stores, spares and loose tools (60,591) (38,192)
Stock in trade (70,843) 16,986
Trade debts (38,692) (219)
Loans, advances, deposit, prepayments
and other receivables (net) (48,954) (19,970)
Short term investment -- 52,687
------------ ------------
(219,080) 11,292
Increase in short term running finance 36,273 (45,532)
Increase/(decrease) in creditors, accrued
and other liabilities (net) 85,373 92,305
------------ ------------
Cash Generated From Operations 500,008 222,082
========== ==========
B. Cash and Cash Equivalents
Cash and cash equivalents included in the cash flow statement comprise only cash and bank balances
as appearing in the balance sheet.
Tariq Sayeed Saigol Usman Said
Chief Executive Director
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED JUNE 30, 2000
Share General Capital Share deposit Accumulated
Capital Reserve Reserve money Profit/(Loss) Total
-----------------------------------------(Rupees in thousand)------------------------------------------
Balance as at June 30, 1998 1,302,293 749,664 1,448,836 -- (370,715) 3,130,078
Net loss for the year -- -- -- -- (590,133) (590,133)
------------ ------------ ------------ ------------ ------------ ------------
Balance as at June 30, 1999 1,302,293 749,664 1,448,836 -- (960,848) 2,539,945
Net Profit for the year -- -- -- -- 1,618 1,618
Share deposit money -- -- -- 52,076 -- 52,076
Transfer from general reserve -- (749,664) -- -- 749,664 --
------------ ------------ ------------ ------------ ------------ ------------
Balance as at June 30, 2000 1,302,293 -- 1,448,836 52,076 (209,566) 2,593,639
========== ========== ========== ========== ========== ==========
Chief Executive Director
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 2000
1. The Company and Nature of Business
Maple Leaf Cement Factory was incorporated on April 13, 1960 under the Companies Act, 1913 (now
Companies Ordinance, 1984) as public company limited by shares and was listed on Stock Exchanges
in Pakistan on August 17, 1994. It is engaged in production and sale of cement.
1.1 The company's current liabilities exceeded current assets by Rs. 805.312 million (1999:
Rs. 905.513 million) which is due to the current portion of principal repayments of loans from
International Finance Corporation (IFC) plus their overdue installments.
The Board of IFC has agreed to restructure both loans by asking the company to repay the principal
portion by US$ 2.5 million equivalent to Pak Rs. 130.750 million during the financial year 2001.
The company has to finance US$ 1.093 million from its own sources whilst the remaining balance
would be raised from a commercial bank, with the backing of IFC's guarantee. The formal agreement
for this restructuring is in process. As a result of the restructuring, the current portion and overdue
installments of IFC loans amounting to Rs. 707.884 million will stand deferred and excluded from
current liabilities.
With the additional equity injection and debt rescheduling arrangements in place, the management
considers that the company is now out of crisis and will be able to meet its debt servicing
requirements.
2. Summary of Significant Accounting Policies
2.1 Accounting convention
These accounts have been prepared under the historical cost convention, modified by capitalization
of exchange differences referred to in note 2.12.
2.2 Taxation
Current
The provision for current taxation is based on taxable income at the current rates of taxation after
taking into account tax credit available, if any, or half percent of turnover, whichever is higher in
accordance with the provisions of the Income Tax Ordinance, 1979.
Deferred
The company provides for deferred taxation on all material timing differences using the liability
method.
2.3 Retirement benefits
Gratuity fund
The company operates a recognised funded gratuity scheme for all employees, payable on cessation
of employment, subject to a minimum qualifying period of service. The company has not been
making contribution to gratuity fund trust since 1994 as the trust has adequate funds to meet its
obligations.
Provident fund
The company also operates an approved contributory provident fund scheme for all employees.
Equal monthly contributions are made both by the company and employees at the rate of 10
percent of the basic salary to the fund.
2.4 Provision for earned leave
Provision for earned leave benefits is made annually to meet the obligations under the employees'
service rules.
2.5 Tangible fixed assets
Operating fixed assets are stated at cost less accumulated depreciation except freehold land and
capital work in progress, which is stated at cost. Cost in relation to certain plant and machinery
signifies historical cost and exchange losses, referred to in note 2.12.
Transactions relating to jointly owned assets with Pak American Fertilizers Limited (PAFL) as stated
in note 13.4 are recorded on the basis of advices received from the housing colony.
Depreciation is calculated at the rates specified in note 13 on reducing balance method.
Full annual rate of depreciation is applied on cost of additions while no depreciation is charged
on assets deleted during the year. Maintenance and normal repairs are charged to income as and
when incurred. Major renewals and improvements are capitalised.
Gain and losses on disposal of assets, if any, are included in the profit.
2.6 Assets subject to finance lease
Assets subject to finance lease are stated at the lower of present value of minimum lease payments
under the lease agreements and the fair value of the assets. The related obligations of the leases
are accounted for as liabilities.
Assets acquired under finance leases are amortised over the useful life of the assets on a reducing
balance method at the rates given in note 14.
2.7 Long term investments
These are stated at average cost.
2.8 Short term investments
These are stated at average cost or market price whichever is lower.
2.9 Deferred costs
Expenses, the benefit of which is expected to spread over several years, are deferred and amortised
over their useful life but not exceeding five years.
2.10 Stores, spares and loose tools
These are valued at moving average cost while items considered obsolete are carried at nil value.
Items in transit are valued at cost comprising invoice values plus other charges incurred thereon.
2.11 Stock in trade
Stock of raw materials, work in process and finished goods are valued at lower of average cost
and net realizable value. Cost of work in process and finished goods represent direct cost of
material, labour and appropriate portion of production overheads. Packing expenses are not
recognized for the purpose of determination of cost.
Net realizable value signifies the ex-factory sales price less expenses and taxes necessary to be
incurred to make the sale.
2.12 Foreign currencies
Assets and liabilities in foreign currencies are converted into Pak Rupees at the rates of exchange
approximating to those prevalent on the balance sheet date except where forward exchange
contracts have been made under the Exchange Risk Cover Scheme of the Government of Pakistan
for payment of liabilities, in which case the contracted rates are applied.
Exchange gain or losses on translation of foreign currency loans are adjusted against the cost of
fixed assets acquired from the proceeds of such loans. All other exchange differences and exchange
risk cover fee are included in the profit currently.
2.13 Mark up, interest and other charges
All the mark up, interest and other charges are charged to income.
2.14 Revenue recognition
Revenue from sale is recognised on delivery of goods to customers. Dividend income is recognised
on actual receipt basis whereas return on deposits is accounted for on a time proportion basis.
2000 1999
(Rupees in thousand)
3. Issued, Subscribed and Paid up Capital
101,243,523 (1999: 101,243,523) ordinary shares
of Rs. 10 each fully paid in cash 1,012,435 1,012,435
9,990,100 (1999: 9,990,100) ordinary shares of
Rs. 10 each issued as fully paid for
consideration other than cash 99,901 99,901
18,995,701 (1999: 18,995,701) ordinary shares of
Rs. 10 each issued as fully paid bonus shares 189,957 189,957
------------- -------------
1,302,293 1,302,293
========== ==========
4. Reserves
Capital
Premium on issue of shares 1,448,836 1,448,836
Revenue
General reserve 749,664 749,664
Transfer to Profit & Loss Account (749,664) --
------------- -------------
-- 749,664
------------- -------------
1,448,836 2,198,500
========== ==========
5. Long Term Loans-Secured
Loan Lender Currency Foreign Currency Pak Rupees
2000 1999 2000 1999
------------------------(Rupees in thousand)----------------------
1. Economic Affairs Division
(Govt. of Pakistan)
Danish Credit PKR -- -- 8,418 10,289
PKR -- -- -- 13,618
2. IBPD - Loan
3. International Finance
Corporation (USA)
a) Loan "A" US $ 28,125 30,000 869,751 927,734
b) Loan "B" US $ 32,500 35,000 1,699,750 1,816,500
4. Muslim Commercial Bank PKR -- -- 229,900 246,900
5. The Bank of Punjab PKR -- -- 195,000 265,000
------------- ------------- ------------- -------------
60,625 65,000 3,002,819 3,280,041
========== ========== ========== ==========
Less: Current portion shown under
current liabilities (Note: 9) (848,804) (815,688)
------------- -------------
2,154,015 2,464,353
========== ==========
Terms of repayment
The loan 1 was originally payable in foreign currency but as per Government decision, the outstanding
loan balance as at April 21, 1987 was converted into Pak Rupees at the exchange rate prevailing at the
date. The balance of loan is repayable in nine equal half yearly installments by October 1,2004 and carries
mark- up @ 14% per annum payable half yearly.
The loan 3 (a) is covered under, the State Bank of Pakistan Risk Coverage Scheme and converted at the
various exchange rates prevailing on the dates of opening of letters of credit. The exchange risk fee is
payable @ 6.66% per annum. The loan is payable in sixteen equal half yearly installments commencing
from January 15, 1999 and carries mark- up @ 9.85% per annum.
The loan 3 (b) is converted at the exchange rate prevailing on the balance sheet date, the loan is repayable
in fourteen equal half yearly installments and carries mark - up @ 9.70% per annum.
The loan 4, as per terms of the rescheduling with the bank, Rs. 1.0 million per month is payable from July,
1999 to July, 2001 and thereafter in twelve equal half yearly installments by January, 2007. The loan
carries mark - up @ 15% per annum.
The loan 5 is repayable in five half yearly installments by October, 2002 and carries mark- up at the rate
of 46 paisa per thousand per day.
Security
The loans and interest / mark-up thereon are secured by an equitable mortgage on all the land, present
and future plant, buildings, fixtures, equipment and other immovable assets and floating charges and/or
hypothecation on all movable equipment and all other present and future assets of the company.
Economic Affairs Division loans are secured by bank guarantees issued by ABL covered through
mortgage/charge as stated above and further secured by the way of lien on deposits with bank upto 10%
of the outstanding liability.
All charges in favour of the lenders rank pari passu with each other.
6. Liabilities Against Assets Subject to Finance Lease
The amount of future payments and the period in which these payments will become due are:
2000 1999
Note (Rupees in thousand)
Year ending June 30,
2000 -- 761
2001 135 135
------------ ------------
135 896
Less: Financial charges allocated
to future periods (1) (56)
------------ ------------
134 840
Less: Current portion shown under
current liabilities 9 (134) (706)
------------ ------------
-- 134
========== ==========
The implicit rate used as the discounting factor is 24% (1999: 24%) per annum. Rentals are payable in
equal monthly installments. The lease agreements carry renewal option at the end of lease period but do
not contain option to obtain ownership of the leased assets. There are no financial restrictions in the lease
agreements. The liability is partly secured by a deposit of Rs. 80 thousand (1999: Rs. 80 thousand)
included in long term security deposits referred to in Note-17.
2000 1999
Note (Rupees in thousand)
7. Deferred and Long Term Liabilities
Deferred taxation 7.1 -- 54,371
Vacation benefits 7.2 5,726 6,486
Duties and levies 7.3 -- 140,164
------------ ------------
5,726 201,021
========== ==========
7.1 Deferred taxation
Due to heavy tax losses, the company's deferred tax liability works out to be Rupees nil for the
year.
7.2 Vacation benefits
These represent balance of provision made against un-availed leaves of employees payable on
their retirement / resignation / termination. The balance includes Rs. 2,074 thousand (1999:
Rs. 1,440 thousand) being provision made during the year for executives.
7.3 Duties and levies
These represents custom duties payable on imported plant and machinery of expansion project
capitalised as fixed assets.
8. Long Term Deposits
These represents the interest free security deposits from stockists and are repayable on cancellation or
withdrawal of the dealerships. These are being utilised by the company in accordance with the terms of
the dealership agreements.
2000 1999
Note (Rupees in thousand)
9. Current Portion of Long Term Liabilities
Long term loans 5 848,804 815,688
Liabilities against assets subject to finance
lease 6 134 706
------------ ------------
848,938 816,394
========== ==========
10. Shod Term Finance - Secured
Commercial Bank 10.1 99,462 126,189
Non-Banking Financial Institution 10.2 63,000 --
------------ ------------
162,462 126,189
========== ==========
10.1 Aggregate facility available under the mark-up arrangements from commercial banks is
Rs. 100,000 thousand ( 1999: Rs. 138,000 thousand ). The rate of mark-up is 18.98% per annum.
The facility is secured by hypothecation of inventories and book debts. All the charges rank pari
passu with each other.
10.2 These represents the facilities obtained from Modaraba and investment bank amounting to
Rs. 75,000 thousand ( 1999: Nil). The mark-up for both facilities is 15.25% per annum. These
facilities are secured by hypothecation of current assets of the company.
2000 1999
Note (Rupees in thousand)
11. Creditors, Accrued and Other Liabilities
Creditors 182,880 131,541
Accrued liabilities 214,172 119,212
Advances from customers 17,022 21,516
Security deposits - interest free, repayable on demand 19,692 16,496
Contractors retention money 4,552 40,439
Interest accrued on secured loans 181,131 183,290
Exchange risk fee payable (Net) 76,515 100,454
Custom duties payable 7.3 836 90,000
Royalty and excise duty payable 8,684 7,501
Other payables 4,300 3,126
------------ ------------
709,784 713,575
========== ==========
12. Contingencies and Commitments
12.1 Contingencies
Claims against the company not acknowledged as debt Rs. 3,956 thousand (1999: Rs. 3,804
thousand).
(ii) Pending decision of various appeals in the Lahore High Court, Supreme Court of Pakistan
and Custom, Excise and Sales Tax Appellate Tribunal, Lahore regarding sales tax payable
from accounting year 1989 to 1993. There is an approximate liability of Rs. 16,152 thousand
(1999: Rs. 16,152 thousand) for disputed amount of sales tax.
(iii) The company has filed various writ petitions with the Lahore High Court against imposition
of custom duty, regulatory duty and sales tax amounting to Rs. 321,987 thousand (1999:
Rs. 316,484 thousand). The petitions are pending adjudication.
(iv) Guarantees given to the Collector, Central Excise and Sales Tax, Customs, Sindh Development
and Maintenance, Karachi as referred to in Note 12.1 (ii) above and Sui Northern Gas Pipelines
Limited amounting to Rs. 19,596 thousand (1999: Rs. 7,100 thousand) and Rs. 16,500
thousand (1999: Rs. 6,500 thousand) respectively.
12.2 Commitments
(i) Contracts for capital expenditure Rs. Nil (1999: Rs. 7,395 thousand).
(ii) Letters of credit other than for capital expenditure Rs. 20,426 thousand (1999: Rs. 5,882
thousand).
13. Operating Fixed Assets
The following is a statement of operating fixed assets
Cost as at Additional/ Cost as at Accumu- Book Depreciation
June 30, (deletions)/ June 30, lated value as at Charge for Rate
1999 (adjustment) 2000 depreciation June 30,2000 the year %
-------------------------------------------------(Rupees in thousand)----------------------------------------------------
Land - Freehold 42,144 -- 42,144 -- 42,144 -- --
Buildings on freehold land 728,046 9,299 737,345 232,047 505,298 52,530 5-10
Road, bridges and
railway sidings 58,274 13,492 71,766 20,710 51,056 5,582 5-10
Plant and machinery 6,690,732 39,157 6,722,579 1,867,665 4,854,914 572,290 10-20
(7,310)
Furniture, fixtures and
equipment 36,338 1,634 37,728 24,001 13,727 2,896 10-15
(244)
Quarry equipment 130,404 -- 130,404 98,883 31,521 7,889 20
Vehicles 37,995 2,820 38,014 26,602 11,412 3,004 20
(2,801)
Share of joint assets (Note: 13.4) 3,582 16 3,598 2,468 1,130 126 5-10
------------ ------------ ------------ ------------ ------------ ------------
7,727,515 66,418 7,783,578 2,272,376 5,511,202 644,308
(10,355)
------------ ------------ ------------ ------------ ------------ ------------
1999 7,209,016 522,040 7,727,515 1,629,717 6,097,798 732,006
(3,541)
========== ========== ========== ========== ========== ==========
13.1 Addition to plant and machinery includes exchange loss amounting to Rs. 13,000 thousand (1999:
190,400 thousand).
13.2 The company has given on lease land measuring 8 acres in 1994 to Maple Leaf Electric Company
Limited (an associated company) at an annual rent of Rs. 360 thousand and land measuring 6
kanals and 18 marlas to Sui Northern Gas Pipelines Limited in 1991 for a period of 10 years at
an annual rent of Rs. 2 thousand.
13.3 The depreciation charge for the year has been allocated as follows:
2000 1999
Notes (Rupees in thousand)
Cost of sales 25 641,927 729,631
Administrative and general expenses 26 2,256 2,246
Other manufacturing expenses 125 129
------------ ------------
644,308 732,006
========== ==========
13.4 Ownership of the housing colony assets included in the fixed assets is shared by the company
jointly with Pak American Fertilizers Limited in the ratio of 101:245 since the time when both the
companies were managed by Pakistan Industrial Development Corporation (PIDC). These assets
are in possession of housing colony establishment for mutual benefit.
2000 1999
(Rupees in thousand)
The cost of these assets are as follows:
Buildings 2,138 2,138
Roads and bridge 202 202
Air strip 16 16
Plant and machinery 257 257
Furniture, fixtures and equipment 824 808
Vehicles 161 161
------------ ------------
3,598 3,582
========== ==========
13.5 Disposal of operating fixed assets
Accumulated Book Sale
Particulars of assets Cost Depreciation value proceeds Mode of disposal Sold to
-----------------------------------------(Rupees in thousand)------------------------------------------
Plant and Machinery
Drill machine 910 795 115 652 Negotiation U/s Sarfraz &
Co, Iskanderabad
Furniture & Fixtures
Fridge 188 73 115 117 Company's policy Factory employees
Air - conditioner 45 17 28 35 Company's policy Housing colony
Television 11 4 7 7 Company's policy Haji Mohammad Aslam
employee
Vehicles
Suzuki Margalla 501 244 257 257 Company's policy Mr. Fazle Subhan
employee
Pajero (Jeep) 2,300 1,123 1,177 1,250 Negotiation Maple Leaf Electric
Company Ltd.
14. Assets Subject to Finance Lease
The following is a statement of leased assets
Cost as at Additions/ Cost as at Accumu- Book value Amortisation
June 30, (deletions) June 30, lated as at June Charge for Rate
1999 2000 Amotisation 30, 2000 the year %
-------------------------------------------(Rupees in thousand)----------------------------------------------
Vehicles 3,355 (2,554) 801 391 410 103 20
------------ ------------ ------------ ------------ ------------ ------------
3,355 (2,554) 801 391 410 103
------------ ------------ ------------ ------------ ------------ ------------
1999 35,486 (32,131 ) 3,355 1,535 1,820 455
------------ ------------ ------------ ------------ ------------ ------------
Note: deletions consist of leased assets transferred to owned assets.
14.1 Amortisation charge for the year has been allocated as follows:
2000 1999
Notes (Rupees in thousand)
Cost of sales 25 103 455
------------ ------------
103 455
========== ==========
15 Capital Work in Progress
Civil works 240 173
========== ==========
16. Long Term Investments
In associated companies
Unquoted
Security General Insurance Company Limited
500,000 (1999: 500,000) fully paid ordinary
Shares of Rs. 10 each 5,000 5,000
========== ==========
Value of investment in Security General Insurance Company Limited based on the last available audited
accounts for the year ended December 31, 1999 (1999: December 31, 1998) is Rs. 6,085 thousand (1999:
Rs. 5,799 thousand).
17. Long Term Loans, Deposits and Deferred Costs
Long term loans - considered good
Employees 17.1 8,067 4,750
Security deposits 2,034 2,290
Deferred costs 17.2 41,579 8,026
------------ ------------
51,680 15,066
========== ==========
2000 1999
(Rupees in thousand)
17.1 Loans to employees- secured
Executives Others
House building 908 5,006 5,914 5,290
Vehicle 133 5,225 5,358 1,864
Others 77 206 283 341
------------ ------------ ------------ ------------
1,118 10,437 11,555 7,495
========== ========== ========== ==========
Less: Current portion shown
under current assets Note 21 (449) (3,039) (3,488) (2,745)
------------ ------------ ------------ ------------
669 7,398 8,067 4,750
========== ========== ========== ==========
The above balances are classified as under:
Outstanding
exceeding three years 497 1,193 1,690 1,967
others 172 6,205 6,377 2,783
------------ ------------ ------------ ------------
669 7,398 8,067 4,750
========== ========== ========== ==========
Interest rate and terms of repayment
Rate of interest
Executives Others
House building loans 4% 5%
Vehicle loans 4% 5%
Number of monthly Installments
House building loans 114 60- 114
Vehicle loans 72 48- 72
Other loans -- 30
Security
Loans to employees are secured against charge and lien on retirement benefits.
17.1.1 The maximum aggregate amount due from executives at the end of any month during the year
was Rs. 1,346 thousand (1999: Rs. 1,341 thousand).
2000 1999
Notes (Rupees in thousand)
17.2 Deferred Costs
Share Issue expenses 8,026 4,353
Golden handshake 56,404 10,588
------------ ------------
64,430 14,941
Less: Amortisation 26 (22,851) (6,915)
------------ ------------
41,579 8,026
========== ==========
These are being amortised over a period not exceeding five years.
18. Stores, Spares and Loose Tools
Stores 118,914 123,254
Spares including in transit Rs. 10,909 thousand
(1999: Rs. 4,244 thousand) 313,754 249,635
Loose tools 4,447 3,635
------------ ------------
437,115 376,524
Less: Provision for obsolescence (10,000) (10,000)
------------ ------------
427,115 366,524
========== ==========
19. Stock-in-trade
Raw materials 6,696 4,998
Packing materials 14,273 11,197
Work in process 89,229 48,560
Finished goods 45,354 19,954
------------ ------------
155,552 84,709
========== ==========
20. Trade Debts- Considered Good
Secured -- 2,834
Unsecured 98,112 56,586
------------ ------------
98,112 59,420
========== ==========
21. Loans, Advances, Deposits, Prepayments and
Other Receivables
Current portion of long term loans
Employees 17.10 3,488 2,745
Advances - considered good
Employees 21.10 2,756 3,866
Suppliers 48,438 28,815
Associated companies 21.20 358 95
Due from gratuity fund trust 20,840 5,129
Prepayments 1,999 556
Excise duty 7,438 8,636
Interest receivable 2,269 6,067
Other receivables 29,165 11,888
------------ ------------
116,751 67,797
========== ==========
21.1 Included in advances to employees are amounts due from executives Rs. 142 thousand (1999:
Rs. 397 thousand). The maximum aggregate amount due from executives at the end of any month
during the year was Rs. 167 thousand (1999: Rs. 470 thousand).
21.2 The maximum aggregate amount due from associated companies at the end of any month during
the year was Rs. 5,479 thousand (1999: Rs. 95 thousand).
22. Short Term Investments
Quoted
Fidelity Investment Bank Limited
664,738 (1999: 664,738) fully paid ordinary
Shares of Rs. 10 each 7,120 7,120
------------ ------------
7,120 7,120
Less: Provision for diminution in value of investments (4,461) (5,724)
------------ ------------
2,659 1,396
========== ==========
Aggregate market value of quoted investments is Rs. 2,659 thousand (1999: Rs. 1,396 thousand).
23. Cash and Bank Balances
The balances were held:
At banks
on deposit accounts 43,000 97,200
on profit and loss sharing accounts 110,138 102,636
on current accounts 9,868 19,116
------------ ------------
163,006 218,952
In hand 30 90
------------ ------------
163,036 219,042
========== ==========
Included in deposit accounts is a sum of Rs. 842 thousand (1999: Rs. 2,391 thousand) held by Allied
Bank of Pakistan Limited as margin against guarantees issued by the bank to secure long term local
currency loans referred to in Note 5.
2000 1999
Note (Rupees in thousand)
24. Sales
Gross sales 4,353,526 3,577,219
Less: Excise duty 1,468,599 1,455,355
Rebate 85,816 86,409
------------ ------------
1,554,415 1,541,764
------------ ------------
2,799,111 2,035,455
========== ==========
25. Cost of Goods Sold
Raw material consumed 25.1 94,458 76,996
Packing material consumed 253,541 236,819
Fuel and power 1,157,264 772,682
Stores and spares consumed 80,435 43,817
Salaries, wages and amenities 103,198 116,641
Insurance 19,459 26,910
Repairs and maintenance 18,722 36,855
Depreciation 13.3 641,927 729,631
Amortisation of leased assets 14.1 103 455
Other expenses 44,608 32,866
------------ ------------
2,413,715 2,073,672
Work in process
Opening inventory 48,560 54,099
Closing inventory (89,229) (48,560)
------------ ------------
(40,669) 5,539
------------ ------------
Cost of goods manufactured 2,373,046 2,079,211
Finished goods
Opening inventory , 19,954 34,356
Closing inventory (45,354) (19,954)
------------ ------------
(25,400) 14,402
------------ ------------
Cost of goods sold 2,347,646 2,093,613
========== ==========
25.1 Raw materials
Opening inventory 4,998 4,721
Purchases 96,156 77,273
Closing inventory (6,696) (4,998)
------------ ------------
Raw material consumed 94,458 76,996
========== ==========
26. Selling, Administrative and General Expenses
Selling and distribution expenses
Salaries and amenities 6,100 6,035
Travelling 155 249
Motor vehicle running 805 733
Postage, telephone and fax 653 765
Printing and stationery 115 160
Entertainment 88 68
Repairs and maintenance 54 180
Advertisement and sampling 592 1,519
Rent, rates and taxes 20 9
Other expenses 779 1,139
------------ ------------
9,361 10,857
Administrative and general expenses
Salaries and amenities 16,758 17,149
Travelling 546 385
Motor vehicle running 2,590 2,225
Postage, telephone and fax 2,072 2,942
Printing and stationery 1,722 920
Entertainment 394 311
Repairs and maintenance 257 247
Legal and professional charges 26.1 2,861 1,730
Depreciation 13.3 2,256 2,246
Amortisation of deferred costs 17.2 22,851 6,915
Rent, rates and taxes 600 216
Other expenses 9,964 7,601
------------ ------------
62,871 42,887
------------ ------------
72,232 53,744
========== ==========
26.1 Legal and professional charges include the following
Statutory audit 200 200
Consultancy - MIS 150 --
Miscellaneous certification fee -- 20
Out of pocket expenses 35 40
------------ ------------
385 260
========== ==========
26.2 Legal and professional charges includes Rs. 35,000 (1999: Rs. 35,000) for cost audit fee.
27. Other Income
Profit on bank deposits 10,253 20,906
Sale of scrap 1,283 627
Profit on sale of fixed assets 619 279
Profit on sale of investment -- 2,664
Provision for diminution in investments 1,263 (598)
Miscellaneous 4,333 11,761
------------ ------------
17,751 35,639
========== ==========
28. Financial Charges
Mark up/interest on:
Long term loans 437,639 470,236
Liabilities under finance lease 56 651
Short term running finance 27,515 28,764
Bank guarantee commission 570 2,033
Bank charges 1,417 985
------------ ------------
467,197 502,669
========== ==========
29. Other Charges
Donations 29.1 13 44
------------ ------------
13 44
========== ==========
29.1 Directors have no interest in any of the donees.
30. Provision For Taxation
Current year 15,128 11,081
Prior year (32,601 ) 76
Deferred (54,371 ) --
------------ ------------
(71,844) 11,157
========== ==========
The company has made provision of minimum tax U/S 80-D of Income Tax Ordinance, 1979 for the current
year.
Income tax assessments of the company have been finalised upto the financial year ended June 30, 1998
(assessment year 1998-99). Losses assessed by income tax department upto assessment year
1998-99 amount to Rs. 2.174 billion.
31. Remuneration to the Chief Executive, Director and Executives
The aggregate amount charged in the accounts for the year for remuneration, including certain benefits
to the chief executive, working director and other executives of the company is as follows:
Chief Executive Director Executive
2000 1999 2000 1999 2000 1999
----------------------------------------(Rupees in thousand)------------------------------------------
Managerial remuneration 1,009 2,133 729 -- 16,680 14,647
Contribution to provident
fund trust 55 156 57 -- 1,206 1,008
Perquisites and benefits:
House rent 276 780 258 -- 5,608 4,252
Medical 10 13 37 -- 848 1,271
Conveyance/petrol 35 88 134 -- 2,859 1,861
Leave passage -- 138 41 -- 1,152 1,262
Utilities 79 151 57 -- 1,221 871
------------- ------------- ------------- ------------- ------------- -------------
1,464 3,459 1,313 -- 29,574 25,172
========== ========== ========== ========== ========== ==========
Number of persons 1 1 1 -- 60 59
Mr. Mohammad Hanif, Chief Executive resigned in November 1999 and his remuneration and benefits
as stated above are for only four months. Mr. Tariq Sayeed Saigol as Chief Executive does not withdraw
any remuneration and benefits from the company.
32. Financial Instruments and Related Disclosure
32.1 Credit risk
The company believes that it is not exposed to major concentration of credit risk. To manage
exposure to credit risk, the company applies credit limits and monitors debt on continuous basis.
32.2 Foreign exchange risk management
Foreign currency risk arises mainly where payables exist due to transactions with foreign under
takings. The company has partial cover against the payables in foreign currency as stated in
Note-5.
32.3 Fair value of assets
The carrying value of financial assets and liabilities reflected in the financial statements approximates.
their fair value except for long term investments, which are stated at cost (Note-16).
32.4 Interest / mark- up rate risk exposure
The company is exposed to interest / mark up rate risk on some of the financial obligations. The
rates of interest / markup and their maturities are given in the respective notes.
2000 1999
33. Basic Earning Per Share
Net Profit/(loss) after tax (Rupees in thousand) 1,618 (590,133)
Average number of ordinary shares in issue during
June 30, 2000:130,229,324 (1999: 130,229,324)
Earning per share (Rs.) 0.01 (4.50)
2000 1999
(Rupees in thousand)
34. Transactions with Associated Companies
These comprise:
Purchase of goods and services 401,150 339,277
Sale of goods and services 3,918 5,143
Purchase of fixed assets 1,250 645
Others-duty draw back 35,174 --
35. Capacity and Production
Capacity Actual Production
Clinker 2000 1999 2000 1999
Grey - U. Ton 1,470,000 1,470,000 993,634 849,777
White - M. Ton 30,000 30,000 37,720 34,470
Shortfall in production was mainly due to market constraints.
36. Corresponding Figures
Previous year's figures have been rearranged, where necessary, to facilitate the comparison.
Chief Executive Director
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