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| I
b r a h i m E n e r g y L i rn i t e d |
|
| Ibrahim
Energy Limited |
|
| Annual
Report 1996 |
|
|
|
| Company
Information |
|
|
|
|
| Chief
Executive |
|
| Sheikh
Mukhtar Ahmed |
|
|
| Directors |
|
| Sheikh
Muhammed Yaseen |
|
| Mr.
Muhammed Naeem Mukhtar |
|
| Mr.
Muhammad Waseem Kukhtar |
|
| Mr.
Atif Yaseen |
|
| Mrs.
Iqbal Begum |
|
| Mrs.
Ghazala Naeem |
|
|
| Secretary |
|
| S.M.
Hasnain Rizvi |
|
|
| Auditors |
|
| F.R.
Merchant & Co., |
|
| Chartered
Accountants, Karachi. |
|
|
| Tax
Consultants |
|
| F.R.
Merchant & Co., |
|
| Chartered
Accountants, |
|
| Karachi. |
|
|
| System
Consultants |
|
| KPMG
Peat Marwick Associates |
|
| (Pvt)
Limited |
|
| Karachi. |
|
|
| Bankers |
|
| Pakistan
Industrial Credit & Investment |
|
| Corporation
Limited. |
|
| Faysal
Bank Limited. |
|
|
| Registered
Office |
|
| Ibrahim
Centre |
|
| l-A,
Ahmad Block, |
|
| New
Garden Town, Lahore. |
|
|
| Head Office |
|
| Ibrahim
Centre |
|
| 15-Club
Road, Faisalabad. |
|
|
| Shares
Registration Office |
|
| Ibrahim
Centre |
|
| GK-7/59,
Bagh-e-Zehra Street, |
|
| Kharadar,
Karachi. |
|
|
| Location
of Power Plant |
|
| 38,
Kilometer, Faisalabad |
|
| Shaikhupura
Road, |
|
| Tehsil
Jaranwala, District |
|
| Faisalabad. |
|
|
| Notice of Meeting |
|
| Notice
is hereby given that the 5th Annual General Meeting of the shareholders of
the Company will be |
|
| held
on 30-12-1996 at 10:00 A.M., at Avari Hotel, Lahore to transact the following
business:- |
|
|
| 1.
To confirm the minutes of the preceding meeting of the shareholders of the
Company. |
|
|
| 2.
To consider, approve and adopt the Annual Audited Accounts of the Company for
the year ending |
|
| 30-06-1996. |
|
|
| 3.
To approve Cash Dividend @ 15% as recommended by the Board of Directors. |
|
|
| 4.
To appoint Auditors for the next year 1996/97 and to fix their remuneration.
The present |
|
| auditors
M/s. F. R. Merchant & Co., Chartered Accountants, Karachi being eligible
for appointment, |
|
| offer
themselves for re-appointment. |
|
|
| 5.
To transact any other business with the permission of the chair. |
|
|
| By
Order of the Board |
|
|
| (S.M.
HASNAIN RIZVI) |
|
| Company
Secretary |
|
|
| Notes: |
|
| i)
The share transfer books of the Company shall remain closed from 24-12-1996
to 30-12-1996 |
|
| (both
days inclusive) to determine the names of members entitled to Dividend
payment and to |
|
| attend
the meeting. Transfers received in order at the Registered Office of the
Company at the |
|
| close
of business on 23-12-1996 will be treated in time. |
|
|
| ii)
A member entitled to attend and vote at the meeting may appoint another
member as his/her proxy |
|
| to
attend and vote on his/her behalf. |
|
|
| iii)
The proxies, in order to be effective, must be received by the Company at
least 48 hours before the |
|
| meeting, |
|
|
| Management
Review |
|
|
| Dear
share holders, |
|
| Your
Directors are pleased to present before you the 5th Annual Report together
with Audited |
|
| Accounts
for the year ended 30-06-1996. |
|
|
| POWER
GENERATION ACTIVITIES |
|
| The
Power plant run by your Company generated 91,583 M.W.H. during the year under
review |
|
| as
against the generation of 124,526 M.W.H. during the corresponding period of
last year. The |
|
| reasons
for low generation being:- |
|
|
| i)
The major considers of Electric Power from our Plant are spinning units of
our |
|
| Ibrahim
Group and also to a nearby chemical plant. During the year they had installed |
|
| their
own Power Generation Unit and discontinued taking electric supply from us. |
|
|
| ii)
The periodical maintenance and overhauling was also a factor for low
generation. |
|
|
| CAPACITY
UTILIZATION |
|
| However
to overcome the capacity utilisation we have successfully negotiated with 2
nearby |
|
| Industrial
Units for the sale of energy and the supply has already started. The position
will |
|
| further
improve to the maximum capacity after the start of production by Ibrahim
Fibres |
|
| Limited
of their Polyester Staple Fibre Plant in December 1996. |
|
|
| SALES |
|
| We
hope that the capacity utilisation will boost the sales revenue and the
profitability of the |
|
| Company
during the financial year ending on June 30, 1997 and onward. |
|
|
| FINANCIAL
RESULTS: |
|
| The
financial results are as under: |
|
Year ended |
Year ended |
|
|
30-06-1996 |
30-06-1995 |
|
|
Rupees |
Rupees |
|
|
| Revenue
generated from sale of electric energy |
|
227,108,868 |
282,414,861 |
|
|
=========== |
=========== |
|
|
| Gross
Profit |
|
103,824,436 |
140,977,756 |
|
| Administrative
expenses |
|
13,744,058 |
12,824,368 |
|
|
----------- |
----------- |
|
| Operating
profit |
|
90,080,378 |
128,153,388 |
|
| Other
Income |
|
903,141 |
715,276 |
|
|
----------- |
----------- |
|
|
90,983,519 |
128,868,664 |
|
| Financial/other
charges |
|
71,818,704 |
66,941,870 |
|
|
----------- |
----------- |
|
| Net
Profit available for appropriation |
|
19,164,815 |
61,926,794 |
|
|
=========== |
=========== |
|
|
| EXPANSION
PROGRAMME |
|
| The
Directors are further pleased to inform you that in view of the better future
prospects of |
|
| Power
Supply, the Power Generation Capacity is being increased by the import of 2
more |
|
| Diesel
Generators of 5.3 M.W. Capacity each from Niigata of Japan and Cooling Tower
from |
|
| LUWA
of Switzerland. The machinery has reached at site and under the process of
installation. |
|
| The
extension work of the building has already been completed for the
installation of the |
|
| machinery. |
|
|
| The
total power generation capacity will be increased to 31.8 M.W. after
commissioning of |
|
| these
two additional engines. |
|
|
| ACKNOWLEDGEMENTS: |
|
|
| The
management would like to place on record its deep appreciation for the
continuous |
|
| support
of Shareholders, Employees and Bankers for their able and continued guidance
and |
|
| hope
to get the same cooperation in future also. |
|
|
| On
behalf of the board |
|
| (
SHEIKH MUKHTAR AHMED) |
|
| CHIEF
EXECUTIVE |
|
|
| Directors'
Report to the Shareholders |
|
| The
Directors of your Company take pleasure in presenting the 5th Annual Report
of your Company |
|
| together
with audited accounts for the year ended June 30, 1996. |
|
|
| Financial
Results |
|
|
Rupees |
|
| Profit
for the year |
|
19,164,815 |
|
| Unappropriated
profit brought forward |
|
51,228 |
|
|
----------- |
|
| Available
for appropration |
|
19,216,043 |
|
|
=========== |
|
| Cash
dividend |
|
| You
will be pleased to learn that your directors have recommended to pay Cash
Dividend at the rate of |
|
| 15%
i.e. Rs. 1.50 per shares i.e. of the face value of Rs. 10.00 out of the
profit earned during the year. |
|
| Thus
the appropriation of the profit earned for the year will be:- |
|
|
|
Rupees |
|
| Available
for appropriation |
|
19,216,043 |
|
|
|
|
| Cash
Dividend @ 15% |
|
187,500,001 |
|
| Transfer
to general reserve |
|
400,000 |
|
|
----------- |
|
|
|
19,150,000 |
|
|
----------- |
|
| Unappropriated
profit carried forward |
|
66,043 |
|
|
=========== |
|
|
|
|
| Chief
Executive's Review |
|
| The
Directors of the Company endorse the accompanying Chief Executive's Review on
the performance |
|
| of
the Company during the year. |
|
|
| Auditors |
|
| The
present Auditors Messrs. F.R. Merchant & Co., Chartered Accountants,
Karachi retire and being |
|
| eligible,
offer themselves for re-appointment. |
|
|
| Pattern
of Shareholding |
|
| The
pattern of Shareholding of the Company is annexed. |
|
|
| Acknowledgments |
|
| The
Directors place on record their deep appreciation and thanks to the
management and staff of the |
|
| Company
for the devotion, dedication and concerted efforts towards the steady growth
of the Company. |
|
|
| On
behalf of the Board |
|
| (
SHEIKH MUKHTAR AHMED) |
|
| CHIEF
EXECUTIVE |
|
|
| Auditors'
Report to the Members |
|
| We
have audited the annexed balance sheet of Ibrahim Energy Limited as at June
30,1996 and the |
|
| related
profit & loss account and statement of changes in financial position,
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 purpose
of our audit |
|
| and,
after due verification thereof, 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 & loss account together with the notes
thereof have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984 and are in agreement with
the |
|
| books
of account and are further in accordance with accounting policies
consistent'~~2,.~ |
|
| applied; |
|
|
| (ii)
the expenditure incurred during the year were for the purposes of the
Company's business; |
|
| and |
|
|
| (iii)
the business conducted, investment 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 and profit & loss account and the statement of changes in financial
position, together |
|
| with
the notes forming part thereof, 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, 1996 and of the profit and the changes in financial
position for the |
|
| year
then ended; and |
|
|
| d)
In our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| F.R.
Merchant & Co. |
|
| Chartered
Accountants |
|
|
| Balance
Sheet as at June 30, 1996 |
|
|
|
1996 |
1995 |
|
|
Notes |
Rupees |
Rupees |
|
| CAPITAL
& RESERVES |
|
| Capital |
|
| Authorised |
|
| 20,000,000
ordinary shares of Rs. 10/-each |
|
200,000,000 |
100,000,000 |
|
|
=========== |
=========== |
|
|
| Issued
subscribed and paid up |
|
| 12,500,000
ordinary shares of Rs. 10/- each |
3 |
125,000,000 |
100,000,000 |
|
|
| General
reserve |
|
48,200,000 |
47,800,000 |
|
| Reserve
for issue of bonus shares |
|
-- |
25,000,000 |
|
| Unappropriated
profit |
|
66,043 |
51,228 |
|
|
----------- |
----------- |
|
|
173,266,043 |
172,851,228 |
|
|
|
|
| LONG
TERM LOANS |
|
329,314,102 |
191,101,102 |
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
| SUBJECT
TO FINANCE LEASE |
|
5 |
21,675,266 |
35,008,414 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
| Provision
for gratuity |
|
6 |
1,022,340 |
507,848 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term borrowings |
|
7 |
15,000,000 |
77,814,693 |
|
| Current
portion of long term liabilities |
8 |
25,120,148 |
21,286,184 |
|
| Creditors,
accrued & other liabilities |
|
9 |
49,731,293 |
23,645,860 |
|
| Proposed
dividend |
|
|
18,750,000 |
-- |
|
| Taxation |
|
|
494,411 |
2,994,411 |
|
|
----------- |
----------- |
|
|
|
109,095,852 |
125,741,148 |
|
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
10 |
-- |
-- |
|
|
----------- |
----------- |
|
|
634,373,603 |
525,209,740 |
|
|
=========== |
=========== |
|
|
|
|
1996 |
1995 |
|
|
Notes |
Rupees |
Rupees |
|
| FIXED
CAPITAL EXPENDITURE |
|
| Operating
assets |
|
11 |
305,909,520 |
338,356,047 |
|
| Capital
work in progress |
|
23,893,025 |
5,112,682 |
|
|
----------- |
----------- |
|
|
329,802,545 |
343,468,729 |
|
|
| LONG
TERM DEPOSITS & DEFERRED COST |
|
12 |
6,303,009 |
6,760,661 |
|
| LONG
TERM INVESTMENTS |
|
13 |
206,704,000 |
73,217,600 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
| Stores,
spares & loose tools |
|
14 |
14,545,337 |
14,086,388 |
|
| Stock
of oils & lubricants |
|
15 |
9,906,054 |
6,680,240 |
|
| Trade
debtors |
|
16 |
2,691,553 |
20,345,474 |
|
| Advances,
deposits & other receivables |
|
17 |
7,710,649 |
4,868,661 |
|
| Short
term investments |
|
18 |
45,529,145 |
49,613,205 |
|
| Cash
& bank balances |
|
19 |
11,181,311 |
6,168,782 |
|
|
----------- |
----------- |
|
|
91,564,049 |
101,762,750 |
|
|
|
----------- |
----------- |
|
|
634,373,603 |
525,209,740 |
|
|
=========== |
=========== |
|
|
| The
annexed notes form an integral part of these account. |
|
|
| Profit
and Loss Account for Account for the year ended June 30,1996 |
|
|
|
1996 |
1995 |
|
|
Notes |
Rupees |
Rupees |
|
|
| SALES |
|
227,108,868 |
282,414,861 |
|
| COST
OF SALES |
|
20 |
123,284,432 |
141,437,105 |
|
|
----------- |
----------- |
|
| GROSS
PROFIT |
|
103,824,436 |
140,977,756 |
|
|
|
|
|
| ADMINISTRATIVE
EXPENSES |
|
21 |
13,744,058 |
12,824,368 |
|
|
----------- |
----------- |
|
| OPERATING
PROFIT |
|
90,080,378 |
128,153,388 |
|
|
|
|
|
| OTHER
INCOME |
|
22 |
903,141 |
715,276 |
|
|
----------- |
----------- |
|
|
|
90,983,519 |
128,868,664 |
|
| OTHER
CHARGES |
|
| Financial |
|
23 |
66,297,293 |
52,165,767 |
|
| Amortisation
of deferred cost |
|
428,677 |
428,677 |
|
| Diminution |
|
18 |
4,084,060 |
11,088,121 |
|
| Workers'
profit participation fund |
|
1,008,674 |
3,259,305 |
|
|
----------- |
----------- |
|
|
71,818,704 |
66,941,870 |
|
|
|
|
|
----------- |
----------- |
|
| PROFIT
BEFORE TAXATION |
|
19,164,815 |
61,926,794 |
|
|
|
|
|
| TAXATION |
|
24 |
-- |
-- |
|
|
----------- |
----------- |
|
| PROFIT
AFTER TAXATION |
|
19,164,815 |
61,926,794 |
|
| Unappropriated
profit brought forward |
|
51,228 |
24,434 |
|
|
----------- |
----------- |
|
|
19,216,043 |
61,951,228 |
|
|
| APPROPRIATION |
|
| Transfer
to reserve for issue of 25% bonus share |
|
-- |
25,000,000 |
|
| Provision
for tax on bonus share @ 10% |
|
-- |
2,500,000 |
|
| Proposed
dividend @ 15% |
|
18,750,000 |
-- |
|
| Transfer
to general reserve |
|
400,000 |
34,400,000 |
|
|
----------- |
----------- |
|
|
19,150,000 |
61,900,000 |
|
|
|
|
|
----------- |
----------- |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
|
66,043 |
51,228 |
|
|
|
=========== |
=========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Statement
of Changes in Financial Position for the year ended June 30, 1996 |
|
|
|
1996 |
1995 |
|
|
Rupees |
Rupees |
|
|
| a)
CASH FROM OPERATING ACTIVITIES |
|
| Profit
for the year |
|
| before
taxation |
|
19,164,815 |
61,926,794 |
|
| Adjustment
for |
|
|
|
| Depreciation |
|
33,963,538 |
37,708,088 |
|
| Profit
on disposal of fixed assets |
|
10,549 |
(104,202) |
|
| Provision
for gratuity |
|
706,882 |
532,301 |
|
| Gratuity
paid |
|
(192,390) |
(178,224) |
|
| Amortisation
of deferred cost |
|
428,677 |
428,677 |
|
| Financial
charges |
|
66,297,293 |
52,165,767 |
|
|
----------- |
----------- |
|
| Operating
profit before working capital changes |
|
120,379,364 |
152,479,201 |
|
|
----------- |
----------- |
|
|
| Changes
in working capital |
|
| (Increase)/decrease
in current assets |
|
| Stores,
spares and loose tools |
|
(458,949) |
(13,708,067) |
|
| Stock
in trade |
|
(3,225,814) |
2,479,567 |
|
| Trade
debtors |
|
17,653,921 |
(10,673,116) |
|
| Advances,
deposits and other receivables |
|
(2,841,988) |
(881,015) |
|
|
| (Decrease)/increase
in current liabilities |
|
| Creditors,
accrued and other liabilities |
|
6,832,027 |
163,527 |
|
|
----------- |
----------- |
|
|
17,959,197 |
(22,619,104) |
|
|
----------- |
----------- |
|
|
| Cash
generated from operations |
|
138,338,561 |
129,860,097 |
|
| Financial
charges paid |
|
(47,043,887) |
(52,944,605) |
|
| Taxes paid |
|
(2,500,000) |
(133,348) |
|
|
----------- |
----------- |
|
| Net
cash (used in )/from operating activities |
|
88,794,674 |
76,782,144 |
|
|
============ |
============ |
|
|
|
1996 |
1995 |
|
|
Rupees |
Rupees |
|
| b)
CASH FROM INVESTING ACTIVITIES |
|
| Fixed
capital expenditure |
|
(20,624,607) |
(16,313,886) |
|
| Proceeds
from disposal of fixed assets |
|
316,704 |
323,550 |
|
| Long
term deposits |
|
28,975 |
(601,630) |
|
| Long
term investments |
|
(133,486,400) |
(73,217,600) |
|
| Short
term investment |
|
4,084,060 |
(22,183,799) |
|
|
----------- |
----------- |
|
| Net
cash (used in) from investing activities |
|
(149,681,268) |
(111,993,365) |
|
|
----------- |
----------- |
|
|
| c)
CASH FROM FINANCING ACTIVITIES |
|
| Long
term loan |
|
150,000,000 |
-- |
|
| Lease
finance |
|
-- |
7,709,580 |
|
| Repayment
of long term loans |
|
(10,108,000) |
(4,500,000) |
|
| Repayment
of lease liability |
|
(11,178,184) |
(9,048,435) |
|
| Increase/(decrease)
in short term borrowings |
|
(62,814,693) |
32,028,070 |
|
|
----------- |
----------- |
|
| Net
cash (used in )/from financing activities |
|
65,899,123 |
26,189,215 |
|
|
----------- |
----------- |
|
| NET
INCREASE IN CASH AND BANK BALANCES (A+B+C) |
|
5,012,529 |
(9,022,006) |
|
| CASH
AND BANK BALANCES AT THE BEGINNING OF THE YEAR |
|
6,168,782 |
15,190,788 |
|
|
----------- |
----------- |
|
| CASH
AND BANK BALANCES AT THE END OF THE YEAR |
|
11,181,311 |
6,168,782 |
|
|
============ |
============ |
|
|
| Notes
to the Accounts for the year ended - June 30, 1996 |
|
|
| 1-
STATUS AND ACTIVITIES |
|
| The
company is limited by shares incorporated in Pakistan and its shares are
quoted on stock |
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| exchanges
in Pakistan. The company is operating a Power Generation Plant at Tehsil
Jaranwala |
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| District
Faisalabad. The exclusive object for which the company is established is to
generate, |
|
| accumulate,
distribute and supply electricity. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
These accounts have been prepared under historical cost convention. |
|
|
| 2.2
Foreign Currency Translations |
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| Foreign
currency loans have been converted into Pak rupees at the fixed rates of
exchange |
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| under
the exchange risk absorption scheme of State Bank of Pakistan. Exchange risk |
|
| coverage
fee is capitalized as part of cost of tangible fixed assets acquired from the |
|
| proceeds
of loans. |
|
|
| 2.3
Staff retirement benefits |
|
| The
Company operates an unfounded gratuity scheme covering all its employees.
Provision |
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| is
made annually to cover the liability under the scheme. |
|
|
| 2.4
Taxation |
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| Profits
and gains of the company are exempt from levy of income tax under clause 176
of |
|
| the
Second Schedule to the Income Tax Ordinance, 1979, therefore no provision for |
|
| taxation
is required. |
|
|
| Profits
and gains of the company is also exempt from minimum tax liability under
Section |
|
| 80
(D) of the Income Tax Ordinance, 1979, vide SRO No. (1)/95 dated 23rd May,
1995. |
|
|
| 2.5
Operating assets |
|
| These
are stated at cost less accumulated depreciation, except free hold land which
is stated at |
|
| cost. |
|
|
| Depreciation
is charged applying the reducing balance method at the rates specified in |
|
| operating
fixed assets note. |
