For business information, annual reports, laws, ordinances, regulations and articles.

	Web Paksearch.com

Siemens (Pakistan) Engineering Co. Ltd.
	(Annual Report 1996)
Siemens Pakistan at a glance
		1992	1993	1994	1995	1996
New orders		1,745,915	3,035,894	2,423,941	1,858,815	3,572,735
Sales		1,712,162	1,910,477	2,072,466	2,246,820	2,579,836
Capital investments		89,043	60,434	82,675	37,644	115,628
Net income		80,922	108,855	104,848	192,288	228,665
as a percent of sales		4.7	5.7	5.1	8.6	8.9
as a percent of equity		34.9	34.3	26.3	33.9	29.6
Dividend		19,565	23,479	23,479	23,479	23,479
as a percent of share
capital		25	30	30	30	30
Employees (at Sept 30)		1,382	1,318	1,273	1,323	1,350
Amounts in thousand Rupees.
	Corporate Objectives
Our prime objective is to offer to our customers quality products
and services at competitive prices to their complete
satisfaction.
We constantly endeavor to maintain our position as market
leaders and technology pace-setters in all areas of our
operations and to continuously improve our efficiency and
competitive strength.
To enhance their creativity and job satisfaction, we provide our
employees, opportunity for personal development, limited only
by their own ability and drive; we consider this to be an
important means of achieving our corporate goals.
By continually improving our performance, we aim to generate
earnings sufficient to ensure a secure future for the Company
and to protect and increase shareholders' investment.
Local presence, backed fully by the high-tech engineering
expertise of Siemens world wide, is our special strength. We
are an integral part of national economy with a strong sense of
responsibility to society and the environment.
	Company information
Board of Directors
S.Babar Ali, Lahore, Chairman
M.Sulger, Karachi, Managing Director
M.Asadullah Sheikh, Karachi (until October 9,1996)
Razi-ur-Rahman Khan, Karachi (effective October 10,1996)
R. Koch, Munich
Mutiur Rahman, Karachi
R. Schlotfeldt, Munich
H. Steffen, Erlangen
Management
Managing Director					M. Sulger
Power Engineering Division					B.Saeed
Products and Services Division					Sohail Wajahat
Telecommunication Division					K.A.Abbasi
Transportation Systems and Medical Engineering Division					Farhat Ali
Finance & Business Administration Division					K.D.V. Ansari
Bankers
ABN Amro Bank
American Express Bank Limited
ANZ Grindlays Bank plc.
Bank of America
Banque Indosuez
Citibank N.A.
Deutsche Bank AG
Habib Bank AG Zurich
Habib Bank Limited
Hongkong and Shanghai Banking Corporation
Muslim Commercial Bank Limited
Societe Generale The French and International Bank
Standard Chartered Bank
Auditors
Taseer Hadi Khalid & Company, Karachi
Legal Advisors
Orr Dignam & Company, Karachi
S.Imran Bokhari, Lahore
Registered Office
llaco House
Abdullah Haroon Road
P.O. Box No. 7158
Karachi-74400
	Directors' report
Your Directors take pleasure in presenting their report and the audited accounts
for the year ended September 30, 1996 alongwith the Auditors' report.
				(Rupees in thousand)
Net profit for the year after taxation				228,665
Unappropriated profit brought forward				49
				--------
Available for appropriation				228,714
Transfer to asset replacement reserve				58,000
Transfer to revenue reserve - general				147,000
Proposed final dividend @ 30 %				23,479
				--------
Unappropriated profit carried forward				235
				========
The earning per share (EPS) amounted to Rs 29.22
Mr. Razi-ur-Rahman Khan was
co-opted as Director in place
of Mr. M. Asadullah Sheikh
with effect from October 10,
1996. The Board welcomes
Mr. Razi-ur-Rahman Khan.
No material changes and
commitments affecting the
financial position of your
Company have occurred
between the end of the
financial year of the Company
to which this Balance Sheet
relates and the date of the
Directors' Report.
The present auditors, Messrs
Taseer Hadi Khalid &
Company retire and being
eligible, offer themselves for
re-appointment.
The statement of pattern of the
shareholding of the Company
as at September 30,1996 is
shown on page 37.
The Company is a subsidiary
of Siemens AG, which is
incorporated in Germany.
The Board endorses the
contents of the Chief
Executive Officer's general
review.
			M. Sulger		S. Babar Ali
Karachi, November 27, 1996			Chief Executive Officer		Chairman
	Corporate Structure
	Managing Director
Divisions
Telecommunication
Transportation Systems & Medical Engineering
Power Engineering
Products & Services
Finance & Business Administration
Business Units
Private Networks
Telecom Networks
Special Systems
Siemens Nixdorf
Medical Sales
Medical Technical Services
Tranportation Systems
Solar
Transmission & Distribution
Transformers
Switchboards
Power Generation
Diesel Generating Sets
Industries, & Building Automation
Field Services, Traffic Control Systems
Motors & Alternators
Standard Products
Central Depts.
Finance & Accounting
Information Systems
Central Imports
Central Purchases & General Services Head Office
Corporate Depts.
Human Resources & Industrial Relations
Corporate Security & General Services S.I.T.E.
Corporate Quality & Logistics
Corporate Communication
Corporate Audit
Joint ventures of Siemens A. G. with Pakistan Telecommunication Corp
Telephone Industries of Pakistan (Pvt) Ltd., Haripur.
Carrier Telephone Industries (Pvt) Ltd, Islamabad.
Regional Offices:
Karachi, Lahore, Islamabad, Quetta, Peshawar, Faisalabad.
	Management report
General Review
During the year under review the
economy of the country remained
sluggish. The rupee continued to
depreciate bringing cost increases
in all our inputs. Persisting
inflationary pressure coupled with
additional burden of regulatory
duties and increased rate of sales
tax had an impact on operations.
New Orders almost doubled from
previous year to Rs 3,573 million
which included orders for local
supplies and services to two
private power plants.
Sales recorded a growth of 15%
over the previous year. Orders in
hand amounted to Rs. 3,000 million
at the close of the year.
Profit before tax increased to
Rs 380 million. The increase in
profit has been contributed mainly
on certain large projects under
execution for a couple of years.
There has, however, been a
negative impact on the profit by the
business units having
manufacturing activities due to 'go-
slow' and strike restored to by the
Employees Union and also due to
general strikes in the city.
After very lengthy negotiations with
the Employees Union an
agreement was signed in
March, 1996 for payment of bonus
to the employees for the business
years 1993/95.
The debt equity ratio improved from
17:83. The current ratio, however,
went down from 1.8 to 1.5 which
resulted partly due to non payment
of our trade debts by public sector
customers owing to shortages of
funds and partly due to deliberate
build up of stocks to cover against
adverse devaluation effects.
Capital investment of
Rs 116 million was made mainly for
development of infrastructure at
manufacturing premises including
construction of new building for
Head Office, which is progressing
according to schedule. Investments
have also been made in production
machinery and equipment as well
as in information technology for
modernisation and rationalisation.
We paid to the Government
Rs 497 million, 40% more than in
last year, towards duties and taxes.
The corporate structure has been
further streamlined by reducing the
number of operating divisions from
5 to 4 and by regrouping for better
service to customers.
I would like to thank our employees
whose dedicated efforts made the
good results possible despite
adverse economic conditions.
			M. Sulger
			Chief Executive Officer
Power Engineering Division
Sales	Rs 1462 million + 18%
New Orders Rs 1656 million + 72%
This division is responsible for
the business field ENERGY and
comprises the following 4
business units:
Power Generation
The year under review saw
considerable activity in the
private sector and several
power companies were able to
achieve financial close. Among
these was also the 412 MW
Rousch power station to be
located at Sidhnai, Punjab, in
which Siemens AG has equity
participation. This is another
major investment of Siemens
AG in Pakistan and is an
example of its strong local
commitment. This combined
cycle plant using gas & steam
turbines will be the third power
plant of its kind we have built in
the country. The 400 MW Kot
Addu plant, similar to the
Guddu plant is nearing
completion and will be handed
over to WAPDA before the end
of the year. Another plant being
built by us is a 7.5 MW steam
power plant with 4 MW Diesel
unit - a co-generation project -
for National Refinery.
Transmission & Distribution
This unit executes turnkey
contracts and is currently
involved in major grid station
projects of WAPDA and KESC.
We were able to successfully
complete the Multan 500kV
Project this year. Work on the
GIS Projects of KESC is in
progress. The new business
includes a grid station for the
Japan Power Project. Next year
we expect more business from
Independent power producers
(IPPs) as well as WAPDA and
KESC.
Switchboards
The loading of the switchboard
unit was satisfactory and it was
able to achieve its targets on
account of orders from WAPDA,
KESC, and private customers
for power plants and cement
plants. The unit was able to
consolidate and improve its
position as manufacturer and
supplier of Vacuum Circuit
Breakers.
Transformers
Distribution Transformers:
Sales were higher than in the
previous year. Production was
affected by industrial action of
workers but otherwise and due
to rationalization measures,
vendor development and use of
prime quality materials, the
negative impact was minimised.
Siemens is the largest supplier
of Distribution Transformers to
WAPDA and KESC and thus
makes an important
contribution to rural
electrification.
Power Transformers: The first of a
series of 40 MVA power
transformers was produced at the
factory in Karachi. This huge
transformer, which measures
8.2m (L) x 5.8m (H) x 4.6m (w)
and weighs 85 tons shall be used
in the K.E.S.C. network in its on
going 5th power project. This was
an important milestone in local
manufacturing of transformers.
However, the loading on the
factory was less than
satisfactory because of
excessive delays in orders
processing by our main
customers.
Products and Services
Division
Sales	Rs 637 million- 2%
New Order	Rs 1495 million+ 125%
This division is mainly active in
the INDUSTRY business field. It
consists of the following
business units.
Diesel Generating Sets
Inspite of the relatively low
demand we were able to
achieve 35% increase in
incoming orders and maintain
sales level compared to
previous year. This was
possible due to the fact that we
remain the main manufacturers/
assemblers of diesel generating
sets and are thus able to offer
tailor made solutions to our
customers for various
applications. We also have a
clear edge on our competitors
in offering better quality,
advisory support and backup
services throughout the
country. In future, we intend to
enhance the scope of our
supply. This together with some
orders that are in the
finalization stage foretell of
satisfactory improvement in the
next business year.
Standard Products
Business Unit Standard
products is responsible for
sales and marketing of all the
low voltage standard products
of Siemens. A newly formed but
growing unit, it caters for a vast
range of drives, components,
accessories and other standard
items. It has shown
considerable growth during the
year.
Field Services, Traffic Control
Systems
The strength of field services
are its qualified, trained and
experienced professional
engineers and technicians who
form the back bone of the unit.
These multi disciplined
engineers, technicians and
craftsmen are involved in the
execution of major contracts/
projects all over Pakistan and
outside the country.
The unit has the capability,
experience and expertise in
project/construction business in
all the major disciplines. It has
testing and calibration of
instruments as per international
standards. It has acquired the
capability and the competence
to handle turnkey projects for
erection, commissioning and
engineering.
The jobs undertaken by the
Unit during the year 1995 - 96
were mechanical, electrical and
instrumentation and control
installation, commissioning and
rigging of heavy equipment in
cement, power project buildings
and process industry projects.
Industries, Building Systems
& Automation
The unit was successful in
securing several orders in
cement and diesel power plant
engineering services from local
as well as foreign markets on
turnkey basis.
Through its competence and
know- how in engineering,
testing and documentation
tools, the unit has successfully
undertaken many important
projects in cement, chemical,
food, steel and power houses
and is already taking up the
challenge of the market by
executing complex projects
abroad e.g. in Saudi Arabia,
Malaysia and Vietnam.
Motors and Alternators
The business of motors and
alternators faced sluggish
market conditions due to
reduction of duties and taxes on
imported motors. The unit was
nevertheless able to improve its
performance through strict
control on manufacturing
process and costs.
The unit was able to secure
several orders from sugar,
chemical and fertilizer
industries. The unit developed
special three phase motors for
package type air - conditioning
units and single phase motors
for garment industry, thus
helping to off set adverse
market conditions.
Export of hollow shaft motors to
Bangladesh saw an increase
and further enhancement is
expected. Another positive
indicator was the launch of
schemes by the government
that will create enhanced
demand for Hollowshaft motors.
Telecommunication Division
Sales      Rs 204 million + 22%
New Orders Rs 199 million + 28%
Telecom Networks
In the Public Switching Business
the turnover achieved was below
target, mainly due to lack of
funds with Pakistan
Telecommunication Corporation
Limited (PTCL). Towards the end
of their financial year, PTCL
approached TIP/Siemens to
implement a crash program of
100,000 lines. Inspire of very
short notice we were able to
execute the order.
On the transport equipment side,
Siemens with its joint venture
partner Carrier Telephone