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IBRAHIM ENGERGY LIMITED
Annual Report 1997
Content
Company information
Notice of meeting
Directors' report
Auditors' report
Balance sheet
Profit & loss account
Statement of changes in financial position
Notes to the accounts
Pattern of shares holding
Company information
Chief Executive
Sheikh Mukhtar Ahmed
Directors
Sheikh Mohammed Yaseen
Mr. Mohammed Naeem Mukhtar
Mr. Mohammad Waseem Mukhtar
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
Sheikhupura Road,
Tehsil Jaranwala,
District Faisalabad.
Notice of Meeting
Notice is hereby given that the 6th Annual General Meeting of the shareholders of the Company will be
held on 29-12-1997 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 and approve the Annual Audited Accounts of the Company for the year ending 30-06-1997.
3. To consider and approve declaration of Cash Dividend @ 20% as recommended by the Board of
Directors.
4. To appoint Auditors for the next year 1997-98 and to fix remuneration. The present auditors
M/s. F. R. Merchant & Co., Chartered Accountants, Karachi being eligible for appointment, offer
themselves for re-appointment.
5. Special Business:
To approve the following special business.
To fix/increase remuneration of a working Director.
"Resolved that keeping in view the inflationary trend, the remuneration of Mr. Atif Yaseen, Director
of the Company be and is hereby fixed/increased w.e.f. 01-01-1998 as following:
1. Basic Salary			Rs.	100,000/- per month
2. House Rent Allowance			Rs.	45,000/- per month
3. Utilities			Rs.	10,000/- per month
			---------	---------	---------
Total			Rs.	155,000/- per month
			---------	---------	---------
6. To transact any other business with the permission of the chair.
Notes:
i) The share transfer books of the Company shall remain closed from 23-12-1997 to 29-!2-1997
(both days inclusive) to determine the names of members entitled to receive Dividend and to attend
the meeting. Transfers received in order at the Share Registration Office of the Company at GK 7/59
Bagh-e-Zehra Street, Kharadar, Karachi, at the close of business on 22-12-1997 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 its Registered Office at
least 48 hours before the meeting.
Directors' Report to the Shareholders
We are pleased to present before you the 6th Annual Report together with Audited Accounts for the
year ended 30-06-1997.
OPERATING RESULTS
The generation and distribution of electric power during the year under review is 125,017 Megawatt
hours as compared to 91,583 Megawatt hours in pervious year. The increase in generation is due to
installation of two additional diesel engines of 5.3 M.W. each which have started generation from
April 1997.
FINANCIAL RESULTS
The financial results of the company are satisfactory and are being summarized as follows:
						Year ended	Year ended
						30-06-1997	30-06-1996
						Rupees	Rupees
Revenue generated from sale of electric energy						327,091,030	227,108,868
						===========	===========
Gross profit						102,348,868	103,824,436
Administrative expenses						14,642,402	13,744,058
						----------	----------
Operating profit						87,706,466	90,080,378
Other income						1,376,009	903,141
						----------	----------
						89,082,475	90,983,519
Financial/other charges						66,141,013	71,818,704
						----------	----------
						22,941,462	19,164,815
Capital gain						15,172,181	--
						----------	----------
						38,113,643	19,164,815
Taxation (provision written back)						494,411	--
						----------	----------
Net Profit for the year						38,608,054	19,164, 815
Unappropriated profit brought forward						66,043	51,228
						----------	----------
Total Profit available for appropriation						38,674,097	19,216,043
DIVIDEND:
Your directors are pleased to recommend 20% cash dividend
i.e. Rs. 2/= per share out of profits earned during the year and
the profit has been appropriated as under:
Appropriations:
Proposed dividend @ 20% (1996- @ 15%)						25,000,000	18,750,000
Transfer to general reserve						13,600,000	400,000
						----------	----------
						38,600,000	19,150,000
						----------	----------
Unappropriated profit carried forward						74,097	66,043
						==========	==========
CAPACITY UTILIZATION
The position of capacity utilization has improved during the year after the start of operation of fibre
plant of Ibrahim Fibres Limited in the month of April 1997.
We are negotiating with some more industrial units in the area for the sale of surplus power but there is
always a time lag between negotiation/agreement and actual supply as it require to build infrastructure
before resuming actual supply.
FUTURE PROSPECTS
The management is of the view that there is still big scope for further capacity utilization as the supply
position in the hydel power generation area always used to detoriate during winter season due to very
low water level. There is routine load shedding during winter season on daily basis and it lasts for
months which result production losses to the industrial units.
AUDITORS
The present Auditors Messrs. ER. 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 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
co-operation in future also.
Auditors' Report to the Members
We have audited the annexed balance sheet of Ibrahim Energy Limited as at June 30, 1997 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 thereon 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 the accounting policies consistently
applied;
(ii) the expenditures 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, 1997 and of the profit and the changes in financial position for the
year then ended; and
d) Zakat deductible at source under the Zakat and Ushr Ordinance, 1980, has been deducted by the
Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
Karachi				F.R. Merchant & Co.
Dated: 24-11-1997				Chartered Accountants
Balance Sheet as at June 30, 1997
						1997	1996
					Note	Rupees	Rupees
CAPITAL & RESERVES
Capital
Authorized
20,000,000 ordinary shares of Rs. 10/-each						200,000,000	200,000,000
						==========	==========
Issued, subscribed and paid up
12,500,000 ordinary shares of Rs. 10/- each					3	125,000,000	125,000,000
General reserve						61,800,000	48,200,000
Unappropriated profit						74,097	66,043
						----------	----------
						186,874,097	173,266,043
LONG TERM LOANS					4	165,568,102	329,314,102
LIABILITIES AGAINST ASSETS
SUBJECT TO FINANCE LEASE					5	145,987,622	21,675,266
DEFERRED LIABILITIES
Provision for gratuity					6	1,408,049	1,022,340
CURRENT LIABILITIES
Short term borrowings					7	772,396	15,000,000
Current portion of long term liabilities					8	58,664,749	25,120,148
Creditors, accrued & other liabilities					9	30,791,491	49,731,293
Proposed dividend						25,000,000	18,750,000
Taxation						--	494,411
						----------	----------
						115,228,636	109,095,852
CONTINGENCIES AND COMMITMENTS					10	--	--
						----------	----------
						615,066,506	634,373,603
						==========	==========
The annexed notes form an integral part of these account.
FIXED CAPITAL EXPENDITURE
Operating assets					11	542,165,867	305,909,520
Capital work in progress						--	23,893,025
						542,165,867	329,802,545
LONG TERM DEPOSITS & DEFERRED COST					12	15,716,781	6,303,009
LONG TERM INVESTMENTS						--	206,704,000
CURRENT ASSETS
Stores, spares & loose tools					13	19,062,178	14,545,337
Stock of oils & lubricants					14	13,750,647	9,906,054
Trade debtors					15	6,685,214	2,691,553
Advances, deposits & other receivables					16	12,070,142	7,710,649
Short term investments						--	45,529,145
Cash & bank balances					17	5,615,677	11,181,311
						----------	----------
						57,183,858	91,564,049
						----------	----------
						615,066,506	634,373,603
						===========	===========
Profit and Loss Account for the year ended June 30, 1997
						1997	1996
					Note	Rupees	Rupees
SALES						327,091,030	227,108,868
COST OF SALES					18	224,742,162	123,284,432
						----------	----------
GROSS PROFIT						102,348,868	103,824,436
ADMINISTRATIVE EXPENSES					19	14,642,402	13,744,058
						----------	----------
OPERATING PROFIT						87,706,466	90,080,378
OTHER INCOME					20	1,376,009	903,141
						----------	----------
						89,082,475	90,983,519
OTHER-CHARGES
Financial					21	64,504,891	66,297,293
Amortization of deferred cost						428,677	428,677
Diminution						--	4,084,060
Workers' profit participation fund						1,207,445	1,008,674
						----------	----------
						66,141,013	71,818,704
						----------	----------
						22,941,462	19,164,815
CAPITAL GAIN						15,172,181	--
						----------	----------
PROFIT BEFORE TAXATION						38,113,643	19,164,815
TAXATION (Provision written back)					22	494,411	--
						----------	----------
PROFIT AFTER TAXATION						38,608,054	19,164,815
Unappropriated profit brought forward						66,043	51,228
						----------	----------
						38,674,097	19,216,043
APPROPRIATION
Proposed dividend @ 20% (1996- @ 15%)						25,000,000	18,750,000
Transfer to general reserve						13,600,000	400,000
						----------	----------
						38,600,000	19,150,000
						----------	----------
UNAPPROPRIATED PROFIT CARRIED FORWARD						74,097	66,043
						==========	==========
The annexed notes form an integral part of these accounts.
Statement of Changes in Financial Position (Cash Flow Statement)
for the year ended - June 30, 1997
						1997	1996
						Rupees	Rupees
a) CASH FLOW FROM OPERATING ACTIVITIES
Profit for the year
before taxation						38,608,054	19,164,815
Adjustment for
Depreciation						31,196,077	33,963,538
Profit/(loss) on disposal of fixed assets						--	10,549
Provision for gratuity						476,039	706,882
Gratuity paid						(90,330)	(192,390)
Amortization of deferred cost						428,677	428,677
Financial-charges						64,504,891	66,297,293
						----------	----------
Operating profit before working capital changes						135,123,408	120,379,364
						----------	----------
Changes in working capital
(Increase)/decrease in current assets
Stores, spares and loose tools						(4,516,841)	(458,949)
Stock in trade						2,834,188	(3,225,814
Trade debtors						(3,993,661)	17,653,921
Advances, deposits and other receivables						(4,359,493)	(2,841,988)
(Decrease)/increase in current liabilities
Creditors, accrued and other liabilities						(15,434,469)	6,832,027
						----------	----------
						(25,470,276)	17,959,197
						----------	----------
Cash generated from operations						109,653,132	138,338,561
Financial charges paid						(86,760,224)	(47,043,887
Taxes paid						(494,411)	(2,500,000
						----------	----------
Net cash (used in )/from operating activities						22,398,497	88,794,674
						==========	==========
						1997	1996
						Rupees	Rupees
b) CASH FLOW FROM INVESTING ACTIVITIES
Fixed capital expenditure						(250,247,974)	(20,624,607)