| MARI GAS COMPANY LIMITED |
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| ANNUAL
REPORT 1997 |
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| Contents |
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| Company Information |
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| Board
of Directors |
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| Notice
of Meeting |
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| Financial
Highlights |
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| Directors'
Report |
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| Auditors'
Report |
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| Balance
Sheet |
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| Profit
and Loss Account |
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| Cash
Flow Statement |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| Ten
years at a Glance |
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| Company
Information |
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| Legal
Advisors |
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| Orr
Dignam & Company |
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| Khan
& Piracha |
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| Auditors |
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| A.F.
Ferguson & Company |
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| Chartered
Accountants |
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| Bankers |
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| Habib
Bank Limited |
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| United
Bank Limited |
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| Bank
of America |
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| Citibank,
N.A. |
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| Allied
Bank of Pakistan Limited |
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| Muslim
Commercial Bank Limited |
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| Registered
Office |
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| 21-
Mauve Area, |
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| 3rd Road, |
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| Sector
G-10/4, |
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| Islamabad |
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| Board
of Directors |
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| Chairman |
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| Lt.
Gen. Khalid Latif Moghal (Retd) |
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| Managing
Director |
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| Fauji
Foundation |
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| Chief
Executive |
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| Lt.
Gen. Ghulam Muhammad Malik (Retd) |
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| Managing
Director |
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| Mari
Gas Company Limited |
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| Director |
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| Mr.
IItifat Rasul Khan |
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| Director
Finance |
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| Fauji
Foundation |
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| Director |
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| Brig.
Sayyed Ifzal Hussain (Retd) |
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| Director
Sugar |
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| Fauji
Foundation |
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| Director |
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| Brig.
Riaz Ahmed Qureshi (Retd) |
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| Director
P&A |
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| Fauji
Foundation |
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| Director |
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| Brig.
Muhammad Saeed Baig (Retd) |
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| Director
P & D |
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| Fauji
Foundation |
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| Director |
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| Mr.
Abdus Sattar |
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| Financial
Advisor P&NR |
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| Government
of Pakistan |
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| Director |
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| Mr.
Shahid Ahmad |
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| Director
General (PC) |
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| Government
of Pakistan |
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| Director |
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| Mr.
M Tajuddin Khan Sherwani |
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| Director
LPG |
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| Government
of Pakistan |
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| Director |
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| Mr.
Shahid Akbar |
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| Chairman |
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| OGDC |
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| Director |
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| Mr.
Najam K. Hyder |
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| Acting
G.M. |
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| Joint
Venture/Production |
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| OGDC |
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| Director |
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| Mr.
EQ. Usmani |
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| Executive
Director |
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| Technical
Services & Support |
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| OGDC |
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| Director |
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| Mr.
Abdul Rahman |
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| Businessman |
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| Director |
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| Mr.
Abdul Waheed |
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| Businessman |
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| Company
Secretary |
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| Mr.
Khurram Khan |
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| Notice
of Annual General Meeting |
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| Notice
is hereby given that the thirteenth Annual General Meeting of the
Shareholders of Mari Gas Company |
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| Limited
will be held on Monday, December 22, 1997 at 9:30 a.m. at 21- Mauve Area, 3rd
Road, Sector |
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| G-10/4,
Islamabad to transact the following business: |
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| 1.
To receive, consider and adopt the Audited Accounts of the Company for the
year ended |
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| June
30, 1997, together with the Directors' and Auditors' Reports thereon. |
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| 2.
To appoint Auditors for the year 1997-98 and fix their remuneration. |
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| Islamabad,
November 25, 1997. |
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| NOTES: |
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| 1.
The Share Transfer Books of the Company will remain closed from December 16,
1997 to |
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| December
22, 1997 (both days inclusive). |
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|
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| 2.
A member entitled to attend and vote at the Meeting is entitled to appoint a
proxy. The |
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| instrument
of proxy duly executed in accordance with the articles of association of the
Company |
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| must
be deposited at the registered office of the Company at Islamabad, at least
48 hours |
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| before
the time of holding the meeting. |
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| 3.
Shareholders are requested to promptly notify the Company of any change in
their address. |
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| Financial
Highlights |
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|
1996-97 |
1995-96 |
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| Revenue |
|
Rs. Million |
5,098.45 |
3,909.77 |
|
| Government
levies |
|
Rs. Million |
4,619.60 |
3,544.23 |
|
| Profit
before tax |
|
Rs. Million |
218.58 |
87.92 |
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| Profit
after tax |
|
Rs. Million |
196.74 |
75.09 |
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| Dividend
per share |
|
Rs. |
2.25 |
2.25 |
|
| Tangible
fixed assets (Gross) |
|
Rs. Million |
1,774.73 |
1,416.78 |
|
| Number
of shares issued and subscribed |
Million |
36.75 |
21.00 |
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| Directors'
Report |
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| The
Directors take pleasure in presenting their report together with the audited
accounts of the |
|
| Company
and the Auditors' report thereon for the year ended June 30, 1997. |
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| OPERATIONS |
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| The
Company continued un-interrupted gas supply throughout the year under review
to all its |
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| customers
namely, Fauji Fertilizer Company Ltd, Engro Chemical Pakistan Ltd, Pak Saudi
Fertilizer |
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| Company
Ltd, and Water and Power Development Authority (WAPDA). The cumulative gas |
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| produced
during the year ended June 30, 1997 was 135,859.808 million standard cubic
feet |
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| (MMSCF)
as against 133,167.650 (MMSCF) during the corresponding period of 1995-96.
The |
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| daily
average gas production for the year was 372.218 MMSCF as compared to 364.039
MMSCF |
|
| last
year. |
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| The
gas allocation to fertilizer companies for producing fertilizer and to WAPDA
for power |
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| generation
remained the same during the year at 336 MMSCFD and 66 MMSCFD respectively. |
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| Regular
maintenance of the field infrastructure and equipment was carried out and
reservoir |
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| monitoring
was conducted throughout the year for preventing any breakdowns and
controlling |
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| water
conning problems in wells. |
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| FUTURE
CHALLENGES |
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| The
Company, by the grace of Almighty Allah, has completed the Deep Well - 1. A
new reservoir |
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| has
been discovered in the deeper horizon which when developed and exploited to
its full |
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| capacity
would open up new avenues of progress for the Company. |
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| The
drilling of Deep Well - 2, spud in on October 28, 1997, is progressing
smoothly. According to |
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| the
seismic survey and study of the acquired data, the prospects of discovering
yet another |
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| reservoir
are promising. |
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| FINANCIAL
RESULTS |
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| The
profit and appropriation for the year are as follows: |
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|
Rs. '000 |
|
|
| PROFIT |
|
| - Profit for the
year under review after taxation |
|
196,741 |
|
| - Un-appropriated profit
brought forward |
|
246,835 |
|
|
|
|
---------- |
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|
443,576 |
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| APPROPRIATION |
|
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| - Interim
Dividend @ 10% per share declared in Dec 96 |
|
36,750 |
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| -
Second Interim Dividend @ 12.5% per share declared in June 97 |
45,938 |
|
|
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|
---------- |
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| - Total Dividend for the year |
|
82,688 |
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| -
Transferred to un-distributed percentage return reserve |
6,068 |
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|
---------- |
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|
88,756 |
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|
---------- |
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| - Un-appropriated profit
carried forward |
|
354,820 |
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|
========== |
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| The
Directors have decided to retain Rs. 6,068 thousand representing the balance
of percentage |
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| return
relating to the year ended June 30, 1997. Therefore, the aforesaid amount is
being |
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| transferred
to un-distributed percentage return reserve. |
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| DIRECTORS |
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| During
the year under review Lt Gen M Arif Bangash (Retd) and Brig Mushtaq Ali Khan
(Retd), |
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| representing
the interest of Fauji Foundation, Mr M Mubeen Ahsan, Mr Khalid Rahim and Mr |
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| Muhammad
Jehangir Bashar, representing the interest of Oil & Gas Development
Corporation |
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| (OGDC)
and Mr Munir Ahmed, representing Government of Pakistan resigned from the
Company's |
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| Board
of Directors. These vacancies were filled by Lt Gen Khalid Latif Moghal
(Retd) and Brig |
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| Muhammad
Saeed Baig (Retd), as nominees of Fauji Foundation, Mr. Shahid Akbar, Mr
Najam K. |
|
| Hyder
and F. Q. Usmani, as nominees of OGDC and Mr M Tajuddin Khan Sherwani as
nominee of |
|
| Government
of Pakistan. I wish to record the Board's appreciation for valuable
contributions |
|
| and
services rendered by all the outgoing directors during their tenure. I also
extend warm |
|
| welcome
to the incoming directors. |
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| AUDITORS |
|
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| The
present auditors, Messrs A. F. Ferguson & Co, Chartered Accountants,
retire and being |
|
| eligible
offer themselves for the re-appointment as Auditors of the Company. |
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| HUMAN
RESOURCES |
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| Relations
between the Management and the workers continued to be cordial and are
expected to |
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| remain
so in the future. |
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| WELFARE
ACTIVITIES |
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| The
Company continues to maintain its regular welfare activities for the local
community in the |
|
| vicinity
of Marl Gas Field. |
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| PATTERN
OF SHAREHOLDING |
|
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| A
statement showing the pattern of shareholding in the Company as at June 30,
1997 is attached. |
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| ACKNOWLEDGEMENT |
|
|
| The
board of directors, would like to express their appreciation for the efforts
and dedication of |
|
| all
officers and staff of the Company which enabled the management to run the
Company |
|
| efficiently
during the year. The board also wish to express their appreciation for
continued |
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| assistance
and cooperation received from the local administration at Daharki, various
departments |
|
| of
federal government particularly the Ministry of Petroleum and Natural
Resources and the |
|
| Ministry
of Finance in respect of matters relating to Company's operations, and
cooperation |
|
| extended
by Fauji Foundation and Oil & Gas Development Corporation. |
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|
|
| Auditors'
Report to the Members |
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| We
have audited the annexed balance sheet of Mari Gas Company Limited as at June
30, 1997 and the |
|
| related
profit and loss account and cash flow statement together with the notes
forming part thereof, for |
|
| the
year ended June 30, 1997 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 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 and loss account together with the notes thereon
have |
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| been
drawn up in conformity with the Companies Ordinance, 1984 and the |
|
| requirements
of Marl Gas Well Head Price Agreement dated December 22, 1985 |
|
| where
its requirements are not consistent with the requirements of the Companies |
|
| Ordinance,
1984 and are in agreement with the books of account and are further |
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| in
accordance with the accounting policies consistently applied; |
|
|
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the Company's |
|
| business;
and |
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|
|
|
|
| (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 and the cash flow statement,
together with the |
|
| notes
forming part thereof, give the information required by the Companies
Ordinance, |
|
| 1984
and the Agreement referred to in (b) (i) above 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 cash flows for the year then ended; and |
|
|
|
|
| (d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980, was |
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| deducted
by the Company and deposited in the Central Zakat Fund established under
section |
|
| 7
of that Ordinance. |
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|
|
|
|
A.F. Ferguson & Co. |
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| Islamabad:
November 13, 1997 |
|
Chartered Accountants |
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|
|
| Balance
Sheet as at June 30, 1997 |
|
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|
1997 |
1996 |
|
|
|
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|
Note |
(Rupees in thousand) |
|
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|
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| SHARE
CAPITAL, RESERVES AND SURPLUS |
|
|
|
|
|
| Authorised
capital |
|
|
|
| 50,000,000
ordinary shares of Rs. 10 each |
|
|
500,000 |
500,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
|
3 |
367,500 |
210,000 |
|
| General
reserve |
|
|
2,046 |
2,046 |
|
| Undistributed
percentage return reserve |
|
4 |
30,992 |
24,924 |
|
|
|
|
|
|
| Profit
and loss account |
|
5 |
354,820 |
246,835 |
|
|
|
|
---------- |
---------- |
|
|
|
|
755,358 |
483,805 |
|
|
|
|
| ADVANCE
AGAINST SUBSCRIPTION OF |
|
|
| SHARE
CAPITAL |
|
|
|
- |
285 |
|
|
|
|
|
|
| REDEEMABLE
CAPITAL AND ACCRUED MARK-UP |
|
|
279,552 |
334,806 |
|
|
|
|
|
|
| LONG
TERM LOANS AND DEFERRED LIABILITIES |
|
|
|
|
|
|
|
|
|
| Loans
- secured |
|
|
|
|
295,547 |
379,989 |
|
| Employees'
retirement benefits |
|
|
|
11,151 |
828 |
|
| Deferred
credits |
|
|
|
8,239 |
3,343 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
304,901 |
384,160 |
|
| CURRENT
LIABILITIES |
|
|
|
|
|
|
| Current
maturity of- redeemable capital |
|
|
| and
accrued mark-up |
|
6 |
55,254 |
47,153 |
|
| -
long term loans |
|
|
7 |
84,442 |
84,442 |
|
| Accrued
and other liabilities |
|
9 |
1,325,860 |
510,947 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,465,556 |
642,542 |
|
|
|
|
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| CONTINGENCIES
AND COMMITMENTS |
|
|
10 |
- |
- |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
2,805,367 |
1,845,598 |
|
|
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
|
|
|
| Operating
assets |
|
11 |
838,613 |
595,291 |
|
| Capital
work-in-progress |
|
12 |
128,501 |
103,477 |
|
|
|
|
---------- |
---------- |
|
|
|
967,114 |
698,768 |
|
| LEASING
AND EXPLORATION COSTS |
|
|
|
| Cost |
|
|
|
|
5,606 |
5,606 |
|
| Less:
Amortization |
|
|
|
2,540 |
2,279 |
|
|
|
|
---------- |
---------- |
|
|
|
3,066 |
3,327 |
|
|
|
|
| LONG TERM LOANS, ADVANCES, |
DEPOSITS |
|
|
|
| AND
PREPAYMENTS |
|
13 |
4,671 |
2,578 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
|
|
| Stores
and spares |
|
14 |
68,883 |
54,797 |
|
| Trade
debts - unsecured, considered good |
|
1S |
1,038,915 |
246,386 |
|
| Loans,
advances and prepayments |
|
16 |
10,489 |
8,011 |
|
| Other
receivables |
|
17 |
98,930 |
75,020 |
|
| Taxation |
|
|
25,977 |
19,120 |
|
| Bank
and cash balances |
|
18 |
587,322 |
737,591 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,830,516 |
1,140,925 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
2,805,367 |
1,845,598 |
|
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts.
: |
|
|
|
|
| Profit
and Loss Account for the year ended June 30, 1997 |
|
|
|
|
|
1997 |
1996 |
|
|
|
Note |
(Rupees in thousand) |
|
|
|
|
| Sales
- net |
|
|
|
19 |
584,917 |
438,508 |
|
| Less:
Royalty |
|
|
|
|
72,488 |
53,608 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
512,429 |
384,900 |
|
| Other
operating expenses |
|
|
20 |
248,012 |
259,004 |
|
|
|
|
|
|
---------- |
---------- |
|
| OPERATING
PROFIT |
|
|
|
|
264,417 |
125,896 |
|
| Other
income |
|
|
|
21 |
109,268 |
79,473 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
373,685 |
205,369 |
|
|
|
|
|
|
---------- |
---------- |
|
| Financial
charges |
|
|
|
22 |
143,370 |
110,912 |
|
| Other
charges |
|
|
|
23 |
11,737 |
6,535 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
155,107 |
117,447 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
BEFORE TAXATION |
|
|
218,578 |
87,922 |
|
| Taxation |
|
24 |
21,837 |
12,828 |
|
|
|
|
---------- |
---------- |
|
| PROFIT
AFTER TAXATION |
|
|
196,741 |
75,094 |
|
| Unappropriated
profit brought forward |
|
|
246,835 |
223,945 |
|
|
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
|
443,576 |
299,039 |
|
|
|
|
| APPROPRIATIONS/TRANSFERS: |
|
|
|
|
|
|
| Dividends
- 1st interim @ 10% (1996: 7.5%) |
|
36,750 |
15,750 |
|
| -
2nd interim @ 12.5% (1996: 15%) |
|
45,938 |
31,500 |
|
| Transferred
to undistributed percentage return |
|
|
|
| reserve
- note 4.1 |
|
|
6,068 |
4,954 |
|
|
|
---------- |
---------- |
|
|
|
88,756 |
52,204 |
|
|
|
---------- |
---------- |
|
| UN-APPROPRIATED
PROFIT CARRIED FORWARD |
|
354,820 |
246,835 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| Cash
Flow Statement for the year ended June 30, 1997 |
|
|
|
|
|
1997 |
1996 |
|
|
|
Note |
(Rupees in thousand) |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
| (:ash
generated from operations |
|
25 |
275,663 |
108,679 |
|
| Financial
charges paid |
|
|
(120,609) |
(88,568) |
|
| Taxes
paid |
|
|
(28,693) |
(35,906) |
|
| Long-term
loans, advances, deposits |
|
|
| and
prepayments (net) |
|
(2,093) |
(838) |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash inflow/(outflow) from operating activities |
|
124,268 |
(16,633) |
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTWITIES |
|
|
|
|
|
| Fixed
capital expenditure |
|
|
|
(362,755) |
(67,258 |
|
| Sale
proceeds of fixed assets |
|
|
|
4,679 |
2,226 |
|
| Interest
received |
|
|
|
|
100,698 |
69,733 |
|
|
|
|
|
|
---------- |
---------- |
|
| Net
cash (outflow)/inflow from investing activities |
|
(257,378) |
4,701 |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
|
|
| Long-term
loans received |
|
|
|
- |
259,020 |
|
| Share
capital subscription |
|
|
|
15 7,215 |
285 |
|
| Redeemable
capital and accrued mark-up repayments |
|
(47,153) |
(40,240) |
|
| Long-term
loans repayments |
|
|
|
(84,442) |
(41,076) |
|
| Dividends
paid |
|
|
|
|
|
