Escolar Documentos
Profissional Documentos
Cultura Documentos
Industries Analysis
Cement Industry of Pakistan
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CONTENTS
Introduction:..............................................................................................................................................3
Structure:...................................................................................................................................................3
Cement Companies:..................................................................................................................................3
Comaprision:.............................................................................................................................................3
Companies Information:...........................................................................................................................4
Bestway Cement:..................................................................................................................................4
CORPORATE MISSION:................................................................................................................4
List of Products: ...............................................................................................................................4
INTRODUCTION:...........................................................................................................................4
INDUSTRY OVERVIEW:...............................................................................................................5
PRODUCTION AND SALES:.........................................................................................................5
OPERATING HIGHLIGHTS:..........................................................................................................6
Fauji Cement:......................................................................................................................................16
INTRODUCTION:.........................................................................................................................16
OUR VISION:................................................................................................................................16
MISSION STATEMENT :.............................................................................................................16
OUR STRATEGIES:......................................................................................................................16
OUR VALUES:..............................................................................................................................16
MARKET OVERVIEW:................................................................................................................17
PRODUCTION REVIEW:.............................................................................................................18
FINANCIAL PERFORMANCE:...................................................................................................18
Cherat Cement:...................................................................................................................................25
VISION:..........................................................................................................................................25
MISSION:.......................................................................................................................................25
STRATEGIC OBJECTIVES:.........................................................................................................25
CORE VALUES:............................................................................................................................25
COMPANY INFORMATION:......................................................................................................25
OPERATING PERFORMANCE:..................................................................................................27
Conclusion:.............................................................................................................................................32
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Introduction:
Structure:
A market is a group of buyers and sellers exchanging goods that are highly
substitutable for one
another. Markets are defined by demand conditions; they embody the zone
of consumer choice for
the goods.
Cement Companies:
1. Bestway Cement
2. Fauji Cement
3. Cherat Cement
Comaprision:
Production Capacity
Financial Report
Net Profit
Contractor’s Survey
Market Survey
Growth per Annum
Stakeholders
3
Companies Information:
Bestway Cement:
VISION:
CORPORATE MISSION:
List of Products:
INTRODUCTION:
INDUSTRY OVERVIEW:
During the year under review, despatches of cement by the industry increased by
32% to
30.14 million tonnes as against 24.29 million tonnes for last year. The domestic
market
grew by 6.6% while exports recorded a healthy increase of 142%. Overall
capacity
utilisation for the industry stood at 78% for the year under review as against 81%
for last
year. The decline in capacity utilisation was mainly due to slower growth in
domestic
market and additional capacity coming online during the year.
Hattar
2008 2007 Increase/ %
Decrease
Cement production 1,166,737 1,170,392 (3,655) (0.3%)
Cement sales 1,164,540 1,163,161 1,379 0.12%
Chakwal
2008 2007 Increase/ %
Decrease
Cement production 1,453,523 1,119,117 334,406 30%
Cement sales 1,446,470 1,086,812 359,658 33%
Despite fierce competition your Company was able to retain 11% of the market in
the
north zone and its position as one of the largest cement producers in the country.
Bestway
Cement remains one of the largest exporters of cement to Afghanistan. The
industry as a
whole exported 7,716,628 tonnes during the year as against 3,188,424 tonnes
during the
5
year ended 30th June 2007. Bestway Cement’s share stood at 7.3% of total
exports at
565,716 tonnes as against 304, 001 tonnes in 2007 which represents an increase
of 86%.
OPERATING HIGHLIGHTS:
The Company recorded sales of Rs. 10,670 million compared to Rs. 8,409 million
during
the preceding year. Net turnover amounted to Rs. 7,487 million compared to Rs.
5,649
million in the corresponding period last year, which represents an increase of
33%, after
payment of Rs. 2,771 million towards Sales Tax and Excise Duty and Rs. 412
million as
rebates and discounts to customers. Gross Profit decreased to Rs. 1,008 million
from Rs.
1,013 million last year. The increase in sales couldn’t result in proportionate
increase in
profits mainly due to low retentions and high energy costs.
Finance cost increased to Rs.1,236 million for the year ended 30th June 2008 from
Rs.
1,212 million last year. Loss before taxation for the year ended 30th June 2008
stood at
Rs. 419 million as compared to Rs. 56 million profit for the previous year. Profit
after
taxation for the year ended 30th June 2008 amounted to Rs.169 million as
compared to Rs.
52 million profit of last year, which is an increase of 227%. Earnings per share of
the
Company for the year ended 30th June 2008 on its increased paid up capital stood
at
Rs.0.51 as compared to last year’s restated EPS of Rs.0.10.
BALANCE SHEET:
This year the capital and reserves of your Company have increased to Rs.6.86
billion as
compared to Rs.5.98 billion.
Your Company has continued to discharge its repayment obligations on all types
of loans
on time. The net current liabilities on 30th June 2008 stood at Rs.5,372 million as
against
Rs. 3,414 million on 30th June 2007.
Work on Line-2 of 6,000 tpd cement capacity completed in the fourth quarter and
6
production was started in the month of June 2008 resulting in capitalisation of
project on
30th June 2008.
OTHER INVESTMENTS:
PLANT PERFORMANCE:
7
which it has adopted, right from the beginning. This proactive approach ensures
efficient
and stable operations with minimum disruptions. Our well-knit team of dedicated
managers, engineers, technicians and other members of the management and
administrative staff play key role in the successful implementation of this
approach.
Hattar plant continued to operate smoothly throughout the year at well above its
rated
capacity.
Chakwal Line-1 after commencing operation in June 2007 and, barring a few
teething
problems, operated smoothly.
Chakwal Line-11 after commencing operation in June 2008 is also operating
smoothly.
MARKETING:
8
The Company places great importance on the training, development and
education of its
personnel. In order to keep its workforce abreast with best operational
techniques and practices, technical and general managerial training courses are
organised for various
departments and categories of personnel. Staff is also sent on courses,
workshops and
seminars organised externally by other institutions. The Company actively
encourages
and assists its employees in pursuit of professional development and career
enhancement.
Your Company attaches highest priority to the health and safety of its personnel
who are
an essential and valuable component of its operations. Initiatives including safety
meetings, incident reporting, safety audits, good housekeeping and hygiene
controls are
actively and consistently pursued to instil safe behaviour in all personnel.
Bestway Cement actively pursues protection and up gradation of the
environment by
ensuring that its plants continue to comply with established environmental
quality
standards at all times. Our plant not only meets the stringent environmental
quality
standards prescribed by the Environment Protection Authority of Pakistan, it even
surpasses the international standards for emissions. Your Company always
participates in
various environment uplift programmes including the Tree Plantation drive each
year by
planting thousands of plants and trees in our factory areas and surrounding hills
in order
to contribute our share towards the improvement of environment.
SOCIAL RESPONSIBILITY:
Your Company regards itself as a responsible corporate citizen. Right from the
outset,
Bestway Cement has taken its social responsibilities, particularly towards the
local
community, very seriously and takes pride in its active participation in the
development
and welfare of the under-privileged.
Bestway Foundation, the charitable trust of the Bestway Group to which your
Company
is a major contributor, was established in the year 1997. The Foundation is also
certified
9
from the Pakistan Centre for Philanthropy. During the year ended 30th June 2008,
your
Company contributed nearly Rs.14 million to the Foundation for its various social
causes.
Bestway Foundation’s main goal is provision of education in rural communities.
Quality
education is fundamental to building up a strong and vibrant society. This aspect
has long
been neglected especially in the rural areas where masses are still deprived of
good
educational facilities. Bearing this in mind the Foundation embarked upon an
ambitious
plan of revitalising primary and secondary education in rural areas. Bestway
Foundation
(in collaboration with the District Government Education Department) adopted 29
schools in the far-flung corners of Rawalpindi District, which lacked basic
infrastructure,
facilities and sufficient number of teachers. You will be pleased to learn that the
Foundation has been able to achieve desired results and the schools being
supported by
the Foundation have shown marked improvement and students have shown very
good
results in the Secondary School Examinations of 2008 also.
In addition, the Foundation continues to provide scholarships to talented students
who,
for want of sufficient resources are unable to continue with their higher studies.
Financial
assistance is also provided to a large number of widows and indigents of the local
community in the shape of monthly stipends. In the area of basic health, free
medical
facilities are provided to the local community through a dispensary located at our
factory
premises.
FUTURE PROSPECTS:
Cement industry has benefited from sustained economic growth in the last few
years. The
year under review however witnessed a slowdown in domestic cement
consumption due
to political and economic uncertainty in the country. Election of a democratic
government
should bring about political stability in the country which should encourage more
economic activity in the country thus positively impacting demand for cement.
On the
export front, there remains a huge shortage of cement in numerous Middle
Eastern and
Asian countries most notably UAE, Qatar and India. Besides, there are other
potential
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markets including some African and Central Asian states.
While there are huge opportunities for cement industry in the future, there are
potential
threats also. Looming global economic crisis may adversely impact the demand
for
cement both domestically and internationally. Also, worsening economic
condition in the
country is likely to hit the domestic consumption of cement. These factors
coupled with
more production capacity coming online in the future both within the country and
the
region, the markets are likely to become more competitive. Your management is
cognisant of the challenges that lie ahead and will be making all out efforts to
ensure
further growth and superior returns in the ensuing years.
CORPORATE GOVERNANCE:
PATTERN OF SHAREHOLDING:
BOOKS OF ACCOUNT:
ACCOUNTING POLICIES:
11
INTERNAL CONTROL SYSTEM:
The system of internal controls is sound in design and has been effectively
implemented.
The system itself is also subject to continuous review for enhancement wherever
and
whenever necessary.
GOING CONCERN:
There are no doubts about the Company’s ability to continue as a going concern.
LISTING REGULATIONS:
There has been no material departure from the best practices of corporate
governance, as
detailed in the listing regulations.
FINANCIAL HIGHLIGHTS:
BOARD MEETINGS:
Attendance by each director in the 30 Board Meetings held during the year was
as given
below:
AUDITORS:
The present auditors, Messrs KPMG Taseer Hadi & Co., Chartered Accountants
retire at
the conclusion of the Meeting and, being eligible, have offered themselves for
reappointment. The Audit committee of the Company has considered the matter
and
recommended the retiring auditors for reappointment.
12
Bestway Cement Company limited
Key Financial Data of Last 8 years
Balance Sheet
Shareholders' funds 6,857 5,544 4,850 3,597 2,859 2,181 2,213 2,003
Operating fixed assets 16,004 14,175 10,689 5,069 3,200 3,306 3,287 3,456
Long term finance 12,507 12,380 9,459 3,148 1,895 1,701 1,579 1,993
Net current liabilities 1,622 607 624 221 80 1,289 168 50
13
Bestway Cement Company limited
Balance Sheet as on 30 June 2008
14
Bestway Cement Limited
PROFIT AND LOSS ACCOUNT
2008 2007
Notes Rupees Rupees
The annexed notes from 1 to 35 form an integral part of these financial statements.
15
Fauji Cement:
INTRODUCTION:
The cement plant operating in the Fauji Cement is one of the most efficient and
best maintained in the country and has an annual production capacity of 1.165
million tons of cement. The quality portland cement produced at this plant is the
best in the Country and is preferred the construction of highways, bridges,
commercial and industrial complexes, residential homes, and a myriad of other
structures needing speedy strengthening bond, fundamental to Pakistan's
economic vitality and quality of life.
OUR VISION:
To transform FCCL into a role model cement manufacturing Company fully aware
of generally accepted principles of corporate social responsibilities engaged in
nation building through most efficient utilisation of resources and optimally
benefiting all stake holders while enjoying public respect and goodwill.
MISSION STATEMENT :
FCCL while maintaining its leading position in quality of cement and through
greater market outreach will build up and improve its value addition with a view
to ensuring optimum returns to the shareholders.
OUR STRATEGIES:
We shall achieve our vision by making total quality the FCCL way of doing
business, Relentless pursuit of full customer satisfaction, Empowering FCCL
people leading the industry of Cement world and manufacturing excellence
producing superior returns to our shareholders.
OUR VALUES:
We listen to our customers and improve our product to
Customers
meet their present and future needs.
People Our success depends upon high performing people
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working together in a safe and healthy work place
where diversity, development and team work are
valued and recognized.
We expect superior performance and results. Our
Accountability leaders set clear goals and expectations, are
supportive and provide and seek frequent feed back.
We support the communities where we do business,
hold ourselves to the highest standards of ethical
Citizen Ship
conduct and environment responsibility, and
communicate openly with FCCL people and the public.
We are prudent and effective in the use of the
Financial Responsibility
resources entrusted to us.
MARKET OVERVIEW:
The Cement Industry witnessed an unprecedented demand for its product during
Fiscal Year 2007-
Total cement despatches stood at 30 Million tons which is the highest figure ever
achieved by the Cement Industry. It reflected a growth of 24.31% over 24 Million
tons of sales during last fiscal year. Whereas, local demand grew by 6.47 % over
the last year, the exports recorded a historic growth of 142% to an all time high
level of 7.72 Million tons as compared to 3.19 Million tons during the last year. As
a result of above, the overall capacity utilization of the Industry stood at 81.04%
as compared to 80.07 % of the last year.
Comparing with the Industry, the overall performance of FCCL has been
substantially higher. It achieved the capacity utilization of 101.03% as compared
to 81.04% of the Industry. Similarly, the exports showed an increase of 82.63%
over the last year, i.e, from 152,268 tons in Fiscal Year 2006-07 to 278,095 tons
in Fiscal Year 2007-08. Apart from Afghanistan, FCCL has been able to create an
effective market niche in India and expects it to expand further.
The highlights of the performance of the Company vis-à-vis the Industry are as
under:-
Industry Comparison
2007-08 2006-07 Difference (%)
(1) Domestic Despatches (tons) 22,395,522 21,034,278 6.47
(2) Exports (tons) 7,716,620 3,188,424 142.02
(3) Total Despatches (tons) 30,112,142 24,222,702 24.31
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(4) Capacity Utilization (%) 81.04 80.07 1.21
PRODUCTION REVIEW:
Performance of the plant remained above satisfactory level with an overall production
level
exceeding 100.83%, which is the highest ever achieved in the history of Fauji Cement.
Efficiency in terms of fuel, power and raw material consumption at the plant is amongst
the best, while labour cost is also one of the lowest in Cement Industry. Comparative
production figures are given as under:-
2007 ~ 08 2006 ~ 07
a. Clinker ( Tons ) 1,119,221 1,098,019
b. Cement ( Tons ) 1,174,722 1,153,711
FINANCIAL PERFORMANCE:
PROFITABILITY:
The Company earned a Profit After Tax of Rs. 414 Million as compared to the last
year's profit of Rs. 646 Million. The profit from operations decreased from Rs. 995
Million to Rs. 602 Million depicting a decrease of 39 % owing to reduction in
cement prices and higher manufacturing cost due to increase in prices of fuel,
power and packing material.
The Company contributed a sum of Rs. 1,268 Million to the national exchequer in
the form of taxes and duties during the year under review. Concurrently, Fauji
Cement earned USD 13.804 Million through export of cement.
BOOKS OF ACCOUNT:
ACCOUNTING POLICIES:
The system of internal control is sound in design and has been effectively
implemented and monitored.
GOING CONCERN:
There is no doubt that the Company has the ability and strength to operate as a
going concern.
There has been no material departure from the best practices of corporate
governance, as given in the listing regulations.
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OUTSTANDING STATUTORY DUES:
The Company complies with all the requirements of the Code of Corporate
Governance as contained in the listing regulations of the Stock Exchanges. The
Board's primary role is the protection and enhancement of long term
shareholders' value. To fulfil this role, the Board is responsible to implement
overall corporate governance in the Company including approval of the strategic
direction as recommended by the Management, approving and monitoring capital
expenditure, appointing, removing and creating succession policies for the senior
management, establishing and monitoring the achievement of management's
goals and ensuring the integrity of internal control and Management Information
Systems. It is also responsible for approving and monitoring financial and other
reporting. The Board has delegated responsibility for operation and
administration of the Company to the Chief Executive / Managing Director.
Responsibilities are delineated by formal authority delegations. The Board has
constituted the following committees which work under the
guidance of Board of Directors:
• Audit Committee.
• Technical Committee.
• Human Resources Committee.
ATTENDANCE OF MEETINGS:
During the year under review, the Board of Directors held six meetings and Audit
Committee held five meetings.
DISCLOSURES:
To the best of our knowledge, the Directors, CEO, CFO, Company Secretary,
Company Auditors, their spouses and their minor children have not undertaken
any trading in shares of the Company during the FY 2007-08.
PATTERN OF SHARE-HOLDING:
DIRECTORS:
EXTERNAL AUDITORS:
The present Auditors M/s KPMG Taseer Hadi & Co, Chartered Accountants will
stand retired at the conclusion of the 16th Annual General Meeting. However,
they have expressed their willingness for reappointment. They have also been
recommended by the Audit Committee.
PRODUCT QUALITY:
FCCL has always endeavoured to produce the best quality cement in Pakistan,
which is amply reflected in the premium price and its high demand, both inside
and outside the Country. As a company, FCCL is focused on customers'
satisfaction, employees' morale and fair deal to its partners in the business. It
strictly adheres to the following:-
1. Quality Policy. Customers' satisfaction through quality assurance.
2. Objectives
a. To be a cost effective and efficient organisation.
b. Continuous improvement through well planned training.
c. Commitment to leadership and team-work.
d. To maintain quality culture within FCCL.
e. To remain a leading manufacturer of high quality Portland Cement in
Pakistan.
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The Company, by grace of Almighty ALLAH, is an ISO 9001-2000 and ISO-14001-
2004 Certified Company.
2008 2007
Note Rupees'000 Rupees'000
NON - CURRENT
LIABILITIES
Long term financing 5 325,000 875,000
Deferred liability - compensated absences 6 9,468 8,277
Deferred tax liability - net 7 363,154 339,918
Retention money payable 18,129 -
CURRENT
LIABILITIES
Trade and other payables 8 493,210 468,447
12,454,493 6,400,688
22
2008 2007
Note Rupees'000 Rupees'000
FIXED ASSETS -
Tangible
Property, plant and equipment 11 7,106,599 4,392,450
CURRENT ASSETS
5,294,083 1,953,527
12,454,493
23
Fauji Cement Company Limited
Profit and Loss Account
Restated
24
Cherat Cement:
VISION:
Growth through the best value creation for the benefit of all stakeholders
MISSION:
Invest in projects that will optimize the risk-return profile of the Company.
Achieve excellence in business. Maintain competitiveness by leveraging
technology. Continuously develop our human resource. To be regarded by
investors as amongst the best blue-chip stocks in the country.
STRATEGIC OBJECTIVES:
CORE VALUES:
Always deliver best quality product to our customers. Maintain the highest level
of integrity, honesty and ethics. Use technology to continuously improve our
processes. Develop the capability of our workforce on an ongoing basis.
Safeguard the interests of all our stakeholders.
COMPANY INFORMATION:
OVERVIEW:
The year 2007/08 proved to be one of the most challenging years for the country
in terms of economic out look and performance. Political uncertainty, coupled
with a rising trade deficit, a reduction in the PSDP allocation, and a tightening of
monetary policy by the Central Bank have adversely impacted all sectors of the
national economy. The cement sector was no different. Unlike the previous
25
couple of years, domestic sales remained relatively sluggish and grew by only
6%. However, export sales to Afghanistan and other destinations like Middle East
and Africa continued to show unprecedented growth. During the year under
review, aggregate sales of the cement industry touched 30 million tons compared
to 24 million tons last year mainly on account of increase in export sales. The
profitability of the cement plants, however, remained under pressure due to
substantial increase in the cost of production.
The year 2007/08 marked the first full year of operations for the Company
following the optimization of the plant. During the year, the production and
dispatch volumes rose by 15% and 11% respectively compared to last year.
However, significant increase in the cost of input items like coal, furnace oil and
raw and packing materials, depressed the margins and the Company could only
earn an after tax profit of Rs. 10 million against net sales of Rs. 3,014 million
compared to an after tax profit of Rs. 184 million against net sales of Rs. 2,620
million in the corresponding period last year.
PRODUCTION:
During the year under review, the clinker production increased by 127,665 tons
to 1,000,710 tons while cement production increased by 100,715 tons to
1,026,830 tons. Comparative production figures of clinker and cement are stated
under:
While domestic sales of the Company increased only by 3,245 tons due to factors
explained above, exports sales increased by 96,354 tons i.e. 35% due to a
greater focus on the Afghan market where prices were more attractive during the
year. The export figure also includes 700 tons of cement exported to UAE. The
contribution of exports sales to the total sales of the Company increased to 36%
compared to 30% last year.
26
OPERATING PERFORMANCE:
Despite almost Rs. 400 million i.e. 15% increase in the sales revenue from the
corresponding period last year, there was a drop in the profitability of the
Company compared to last year. Depressed cement prices for most part of the
year, owing to substantial increase in production capacity of the industry coupled
with rising costs of major inputs such as furnace oil, coal and raw and packing
materials, reduced margins substantially. There was also a drop in the other
income due to reduced level of investments made by the Company. After taking
into consideration various expenses and government taxes, the company was
able to earn an after tax profit of Rs. 10.35 million during the year under review.
Summarized operating performance of the Company for the current year and that
of last year is as follows:
In order to mitigate the risk of rising energy cost which constitutes a major
portion of cost of production, the Company has decided to install Waste Heat
Recovery Boilers. The installation of this equipment by the end of ensuing
financial year is expected to help in reducing the rising cost of production in the
days ahead.
We wish to update our shareholders that the Project Consultants for Madian
Hydro Power Limited - M/s. Fichtner GmbH have almost completed work on the
Phase II of the feasibility study and will soon be presenting the draft feasibility
report. Given the power shortage situation in the country, the project is of high
significance with lots of potential, however, the law and order situation in the
project area remains a major cause of concern.
27
As a conscientious member of the corporate community, the Company
generously contributed to various social and charitable causes during the year.
STATEMENT ON CORPORATE AND FINANCIAL REPORTING FRAMEWORK:
• The financial statements prepared by the Company fairly present its state
of affairs, the results of operations, cash flows and changes in equity.
• Proper books of account have been maintained by the Company.
• Appropriate accounting policies have been consistently applied in the
preparation of financial statements and accounting estimates are based on
reasonable and prudent judgment.
• Applicable International Accounting Standards have been followed in
preparation of financial statements and there has been no departure there
from.
• The system of internal controls has been effectively implemented and is
continuously reviewed and monitored.
• The Company is a going concern and there are no doubts about its ability
to continue.
• There has been no material departure from the best practices of corporate
governance, as detailed in the listing regulations.
• Key operating and financial data for last six (6) years in summarized form is
annexed.
• 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.
• The Company maintains Provident and Gratuity Fund accounts for its
employees. Stated below are the values of the investments of the fund as
on 30th June 2008:
DIVIDEND:
In view of the liquidity requirements for on going projects, the Company will not
be able to pay any dividend this year.
FUTURE PROSPECTS:
While increased demand for cement from Middle East and other destinations is
expected to contribute to higher cement sale volumes, expected reduction in the
PSDP allocation, rising interest rates and political uncertainty in the country will
continue to have a negative impact on domestic demand. We are hopeful that
the government will address these issues effectively, and will take necessary
measures to revive the economy which in turn could spur the demand of cement
for infrastructural and housing projects and exports through land and sea routes.
28
AUDITORS:
The present auditors M/s. Ford Rhodes Sidat Hyder & Co., Chartered Accountants,
retire and being eligible, offer themselves for reappointment.
Cherat Cement Company Limited
Financial data of Last 7 Years
for the year ended June 30,
2008
2008 2007Year2006 2005 2004 2003 2002 2008
2008 2007
2007 2006 2005 2004 2003 2002
(Tons in '000)
ASSETS EMPLOYED
(Rs. in million)
Tangible fixed assets 2,522 2,197 2,270 1,773 1,252 1,276 1,135
Investment and long-term loan,
advances & deposits 111 71 33 18 17 19 101
Derivative financial assets 29 25 41 28 - - -
Current assets 1,720 1,240 1,268 1,384 913 601 664
Total assets employed 4,382 3,533 3,612 3,203 2,182 1,896 1,900
FINANCED BY
Profit / (loss) before taxation (56) 247 719 684 574 25 177
Profit after taxation 10 184 538 512 426 10 138
Cash dividend - 96 83 199 213 66 120
Bonus shares - - 125 166 133 - -
29
Transfer to reserves - - - - - - 5
2008 2007
We have audited the annexed balance sheet of CHERAT CEMENT COMPANY LIMITED as at 30 June 2008
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
based on our of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements
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 includes 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 account 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 consistently
agreement with the books
of account and are further in accordance with accounting policies 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 30 June 2008 and of the profit, its cash flows and changes in equity for the year then
ended; and
d) in our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980)
was deducted by the Company and deposited in the Central Zakat Fund established under section
7 of that Ordinance.
30
Cherat Cement Company Limited
Profit & Loss Account
for the year ended June 30, 2008
31
Conclusion:
On the basis of above financial data we ca assume that currently Bestway Cement is leader of the
market.
Following by Fauji Cement on 2nd position.
Production Capacity
1. Bestway
2. Fauji
3. Cherat
Financial Report
1. Bestway
2. Fauji
3. Cherat
Net Profit
1. Bestway
2. Fauji
3. Cherat
Contractor’s Survey
• A survey of contractors and construction companies conducted by
our group. Most of the constructors say that the management of
Bestway Cement is very efficient and cooperative to their
customers. Some contractors are satisfied with Fauji Cement
management. That’s why Charat Cement is facing tough
competition.
Market Survey
• Cement dealers describes that the quality and price of Bestway
Cement is reasonable. And they deliver cement with in give time
whereas Fauji Cement has also good quality but slightly expensive
then Bestway cement. Cherat cement gives very low profit margin
to cement dealers. Their marketing promotion is also not very
competitive.