This cement plant of Zulfiqarabad has fallen on difficult days. The company's statutory auditors have made some sour observations, making reference to the Note No 2 annexed to the account under the heading - "Going Concern Assumption" - This is about incurring exceeding its share capital by Rs 11.33 million.
The directors of the company have responded to their observations. The directors hope to improve the financial position of the company in the long run.
The optimism is based on their efforts towards marketing, reduction in financial facilities (borrowing), decrease in financial expenses as well as the financial support of lenders.
The company expects better financial results also because it foresees increase in despatches of cement on account of addition in sale of Sulphate Resistant (SR) cement for DGP (Director General Procurement) Army.
On the other hand the company has qualified for ISO 9001-2000 quality management system. Quality product will definitely stimulate selling efforts.
Pakistan Slag Cement Industries Limited was incorporated in the province of Sindh as a public limited company in June 1994 under the companies ordinance 1984. Its head office and registered office are located at Saddar Karachi in Panorama Centre.
The company is principally engaged in manufacturing and sale of cement and its manufacturing facilities are located at Zulfiqarabad, Pakistan Steel Mills, Karachi.
The plant does not produce clinker. Its installed capacity is based on 300 working days per annum and only for grinding work.
The annual capacity has been rated at 255 thousand metric tonnes. During the financial year ended June 30, 2003 (FY 2002-03) its output was recorded at 77.63 thousand metric tonnes as against 68.25 thousand metric tonnes recorded in the preceding year.
It works out to 30.4% utilised capacity and the increase in output is 13.7% over the preceding years.
A large portion of the rated capacity remained unutilised and this adverse situation has been attributed to market constraints.
In the shareholding information provided on June 30, 2003, Sikander Ali Jatoi held 50% of the company's total 6.4 million shares of Rs 10 each.
Landsdown Investment Limited, a foreign company, held 16.67% of the company's stock. Its 2,564 individual investors owned 29.4% of the stock.
Its shares are listed on Karachi Stock Exchange.
The closing market value of the share on 20th January 2004 was Rs 4.50 per share at 55% discount to the par value. On the other hand the break-up value of the share is negative figure.
The paid up capital of the company at Rs 64 million has been wiped out due to accumulated deficit of Rs 75.33 million producing capital deficiency of Rs 11.33 million which increased from the last year's capital deficiency of Rs 1.35 million.
During the year the company's sales in terms of value, declined significantly and last year's gross profit was replaced by gross loss.
On the other hand stock-in-trade's closing balance at Rs 69.61 million was 79% more than the opening balance of the stock-in-trade account at Rs 38.89 million. So additional liquidity was locked-in the trade debts (unsecured), as the closing balance in the account increased by Rs 25.8 million from the opening balance in the trade debt account.
The company's despatches have increased to 77,168.50 tonnes cement from 68,009 tonnes in the preceding year. Chief Executive Jehangir Akbar informed that the company continued to supply cement under previous agreement with DGP (Director General Procurement - Army).
He added that, for the first time in its history, the company procured order for supply of Sulphate Resisting cement to DGP.
The supply under the contract commenced subsequently to the accounting year ie from late July 2003.
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Performance Statistics (Million Rupees)
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30 June 2003 2002
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Share Capital-Paid-up: 64.00 64.00
Accumulated (Loss): (75.33) (65.35)
Shareholders Equity: (11.33) (1.35)
L.T Debts: 20.62 31.23
L.T. Deposits-Unsecured: 1.13 1.13
Deferred & Other Liabilities: 111.94 0.90
Current Liabilities: 133.45 157.11
Tangible Fixed Assets: 79.10 97.99
Investments: 1.87 1.74
Current Assets: 174.84 89.29
Total Assets: 255.81 189.02
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Sales, Profit & Pay Out
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Sales-Net: 186.47 207.74
Gross (Loss)/Profit: (3.97) 1.62
Operating (Loss): (9.58) (1.81)
Other Income: 3.98 2.92
Financial (Charges): (3.42) (6.70)
(Depreciation): (18.97) (19.00)
(Loss) Before Taxation: (9.02) (5.59)
(Loss) After Taxation: (9.98) (4.18)
(Loss) Per Share (Rs): (1.56) (0.65)
Share Price (Rs) Dated 20.01.2004: 4.50 -
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Financial Ratios
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Price/Earning Ratio: (-) -
Book Value Per Share: (1.77) (0.21)
Price/Book Value Ratio: (-) -
Debt/Equity Ratio: (-) (-)
Current Ratio: 1.31 0.56
Asset Turn Over Ratio: 0.73 1.10
Days Receivables: 99 44
Days Inventory: 133 69
Gross Profit Margin (%): (2.13) 0.78
Net Profit Margin (%): (5.35) (2.01)
R.O.A (%): (3.90) (2.21)
R.O.C.E (%): (8.16) (13.10)
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Plant Capacity & Production (000' M. Tons)
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The plant does not produce clinker.
Installed Capacity is only for grinding
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Installed Capacity
(Based on 300 Working Days): 255.00 255.00
Actual Production: 77.63 68.25
Utilization Capacity (%): 30.44 26.76
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