| SIEMENS (Pakistan) Engineering Co. Ltd |
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| (Annual
Report 1997) |
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| Corporate
Objectives |
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| Our
prime objective is to offer to our customers quality |
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| products
and services at competitive prices to their |
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| complete
satisfaction. |
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| We
constantly endeavor to maintain our position as |
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| market
leaders and technology pace-setters in all areas of |
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| our
operations and to continuously improve our efficiency |
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| and
competitive strength. |
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| To
enhance their creativity and job satisfaction, we |
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| provide
our employees, opportunity for personal |
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| development,
limited only by their own ability and drive; |
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| we
consider this to be an important means of achieving |
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| our
corporate goals. |
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| By
continually improving our performance, we aim to |
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| generate
earnings sufficient to ensure a secure future for the |
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| Company
and to protect and increase shareholders' |
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| investment. |
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| Local
presence, backed fully by the high-tech engineering |
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| expertise
of Siemens world wide, is our special strength. We |
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| are
an integral part of national economy with a strong sense of |
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| responsibility
to society and the environment. |
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| Contents |
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| Company
Information |
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| Directors'
report |
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|
| Management
report |
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| Telecommunication
Division |
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| Rail-Transportation
Systems & |
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| Medical
Engineering Division |
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| Power
Engineering Division |
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| Products
& Services Division |
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| Notice
of meeting |
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| Auditors'
report to the members |
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| Balance
sheet |
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| Profit
& loss account |
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| Cash
Flow Statement |
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| Notes
to the accounts |
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| Pattern
of holding of the shares |
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| Company
information |
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| Board
of Directors |
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| Syed
Babar All, Lahore, Chairman |
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| Martin
Sulger, Karachi, Managing Director |
|
| Karl
Friedrich Hunke, Munich |
(effective October 1,
1997) |
|
| Razi-ur-Rahman
Khan, Karachi |
|
| Asadullah
Khawaja, Karachi (effective September 15, 1997) |
|
| Roland
Koch, Munich |
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(until September 30,
1997) |
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| Mutiur
Rahman, Karachi |
|
(until June 13, 1997) |
|
| Rolf
Schlotfeldt, Munich |
|
| Herbert
Steffen, Erlangen |
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|
| Management |
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| Martin
Sulger |
Managing Director |
|
| Hamiduddin
Ahmed |
Exports and Special
Projects Division |
|
| Farhat All |
|
Rail-Transportation
Systems and |
|
|
Medical Engineering
Division |
|
| Daud
Ansari |
Finance & Business
Admn. Div. |
|
| Pervez
Iftikhar |
Telecommunication
Division |
|
| Bakhtiyar
Saeed |
Power Engineering
Division |
|
| Sohail
Wajahat |
Products and Services
Division |
|
|
| Auditors |
|
| Taseer
Hadi Khalid & Company, Karachi |
|
|
| Legal
Advisors |
|
| Orr
Digham & Company, Karachi |
|
| Syed
Iraran Bokhari, Lahore |
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|
| Registered
Office |
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| B-72,
Estate Avenue |
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| Sind
Industrial Trading Estates, |
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| Karachi-75700 |
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| Corporate
Structure |
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| DIVISIONS |
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| Telecommunication
Division |
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| Rail
Transport Medical Engineering Division |
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| Power
Engineering Division |
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| Products
& Services Division |
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| Export
& Special Projects Division |
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| Finance
& Business Administration Division |
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| BUSINESS
UNITS |
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| Private
Networks |
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| Medical
Sales |
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| Transmission
& Distribution |
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| Diesel
Generating Sets |
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| Telecom
Networks |
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| Medical
Technical Services |
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| Transformers |
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| Industrial
Projects |
|
| Special
Systems |
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| Rail
Transportation |
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| Switchboards |
|
| Engg.
& Const. Services Traffic Control Systems IT Services |
|
| Siemens
Nixdorf |
|
| Solar |
|
| Power
Generation |
|
| Motors
& Alternators |
|
| Standard
Products |
|
|
| CENTRAL
DEPTS |
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| Finance
& Accounting |
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| Central
Imports |
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| Central
Comm. Services |
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| CORPORATE
DEPTS |
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| Planning
& Development |
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| Security
General Services SITE Industrial Relations |
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| Human
Resources |
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| Quality |
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| Communication |
|
| Audit |
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| Joint
Venture Partners of Siemens A. G. with Pakistan Telecommunication Corp. |
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| Telephone
Industries of Pakistan (Pvt.) Lid., Haripur |
|
Regional Offices |
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| Carrier
Teleph0ne Industries (Pvt.) Ltd., Islamabad |
|
Karachi Lahore Islamabad
Quetta Peshawar Faisalabad |
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| Directors'
Report |
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| Your
Directors take pleasure in presenting their report and the audited |
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| accounts
for the year ended September 30, 1997 alongwith the Auditors' |
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| report. |
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|
(Rupees in thousand) |
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|
| Net
profit for the year after taxation |
|
220,608 |
|
| Unappropriated
profit brought forward |
|
235 |
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| Available
for appropriation |
|
220,843 |
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| Transfer
to asset replacement reserve |
|
55,200 |
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| Transfer
to revenue reserve - general |
|
142,100 |
|
| Proposed
final dividend @ 30% |
|
23,479 |
|
| Unappropriated
profit carried forward |
|
64 |
|
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| The
earning per share (EPS) amounted to Rs. 28.19 |
|
|
| Mr.
Mutiur Rahman who |
|
September 30, 1997. He |
|
Khalid & Company
retire |
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| joined
the Board on |
|
has been replaced by |
|
and being eligible, offer |
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| 16-Dec-91 |
|
Mr. K.F. Hunke w.e.f. |
|
themselves for re- |
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| expired
on June 15, 1997 |
October 1, 1997. The |
|
appointment. |
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| after
a brief illness. The |
Board acknowledges the |
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| Board
expresses its grief |
valuable services of |
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The statement of pattern |
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| on
his death and extends |
Mr. Koch and wishes him |
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of the shareholding of
the |
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| its
heartfelt condolence to |
good health and also |
|
Company as at |
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| his
family. The Board |
|
welcomes Mr. Hunke. |
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September 30, 1997 is |
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| wished
to put on record its |
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shown on page 35. |
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| appreciation
for the |
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No material changes and |
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| valuable
services |
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commitments affecting the |
The Company is a |
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| rendered
by him to the |
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financial position of
your |
subsidiary of Siemens |
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| company. |
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Company have occurred |
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Aktiengesellschaft, which |
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|
between the end of the |
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is incorporated in |
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| The
Board welcomes |
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financial year of the |
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Germany. |
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| Mr.
Asadullah Khawaja in |
Company to which this |
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| place
of late |
|
Balance Sheet relates |
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The Board endorses the |
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| Mr.
Mutiur Rahman. |
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and the date of the |
|
contents of the |
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|
Directors' Report. |
|
Management report for |
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| Mr.
Roland Koch, a |
|
The present auditors, |
|
the year 1996/97. |
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| Director
since October |
|
Messrs Taseer Hadi |
|
| 1995
retired w.e.f. |
|
1995 retired w.e.f. |
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| Karachi,
November 26, 1997 |
M. Sulger |
|
S.Babar Ali |
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|
Chief Executive Officer |
|
Chairman |
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|
| Management
Report |
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|
| General
Review |
|
the close of the year
amounted |
an outsider any more but
a |
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| During
the whole of the year |
to Rs. 2.21 billion. |
|
Company employee who |
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| 96/97,
the economic situation |
|
therefore has a stake in
the |
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| was
adversely affected by |
Profit before tax
however, |
Company. We hope this |
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| political
developments |
|
declined 22% from last
year to |
cooperation and
understanding |
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| including
three changes of |
Rs. 297 million which was |
will continue in the
future to |
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| Government
and also by |
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mainly due to persistent
default |
the mutual benefit of the |
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| financial
crises in the public |
in payment for our goods
and |
workers and the Company. |
|
| sector
corporations, some of |
services by WAPDA and
KESC |
|
| which
are our major customers |
among other public sector |
We celebrated in October
1997 |
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| and
business partners. |
|
customers. This resulted
in the |
the 150 year anniversary
of |
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|
Company having to borrow |
Siemens worldwide and the |
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| Consequently
our business in |
heavily to meet its
operating |
fifth decade of Siemens |
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| general
and that with the public |
capital needs leading to |
operations in Pakistan as
well |
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| sector
in particular suffered |
incidence of much higher |
as the inauguration of
the |
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| considerably
through |
|
financial charges.
Needless to |
extension to our building |
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| postponement
and shelving of |
say, in order to reduce
the |
complex at S.I.T.E.
Thelargely |
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| projects
and delays in |
|
adverse impact of these |
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attended function to
which |
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| execution
of contracts. |
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circumstances on
profitability, |
important customers,
leaders |
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|
efforts were intensified
to |
of business and industry
and a |
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| We
were however able to |
|
reduce costs through an |
|
large number of
journalists |
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| compensate
to some extent the |
austerity drive. |
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were invited was presided
over |
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| loss
of business due to these |
|
by Dr. Juergen Kleiner, |
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| reasons
by winning orders from |
A satisfactory
development |
Ambassador of Germany. |
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| the
private sector. |
|
was success in obtaining
ISO |
Dr. Guenter Wilhelm,
Member |
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|
certification. |
|
Corporate Executive |
|
| Nevertheless
the value of new |
|
Committee, Siemens AG, |
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| orders
received during the year |
Capital investment of Rs.
153 |
|
| fell
from Rs. 3.57 billion to Rs. |
million was made mainly
for |
responsible for Asia
Pacific |
|
| 2.27
billion or by around 36%. |
development of
infrastructure |
Region, was present for
the |
|
|
at our complex at
S.I.T.E. |
occasion. |
|
| Sales
improved 19% to |
|
Karachi. |
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| Rs.
3.07 billion from last year |
|
The Chief guest gave away
5 |
|
| due
to progressive billing of |
Rs. 548 million were paid
to |
Gold Medals to students
who |
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| projects
already under |
|
Government towards duties |
topped in the Electrical
and |
|
| construction.
Orders in hand at |
and taxes during the year |
Electronics Engineering |
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|
which was 10% higher than
in |
faculties in major
engineering |
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|
the year before. |
|
universities of the
country. |
|
|
This award, instituted on
this |
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|
I am glad to report that
after |
occasion will now be a
regular |
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|
long and difficult
negotiations |
annual feature. |
|
|
with the CBA, we were
able to |
|
|
conclude a new, mutually |
In the end I would like
to thank |
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|
beneficial agreement.
This has |
all our managers,
officers and |
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|
already paved the way for
new |
workers without whose |
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|
employment of workers.
One of |
devotion and efforts the |
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|
the reasons for the
responsible |
positive results achieved |
|
|
and cooperative attitude
of the |
despite difficulties
would not |
|
|
Workers Union is that the |
have been possible. |
|
|
present CBA president is
not |
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| ------------------------------------------------------------------------------------------------------- |
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| Telecommunication
Division |
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|
great success. We got
orders |
messaging, call logging
and |
|
| Sales |
Rs. 253 million (+ 24%) |
from reputed
organizations for |
hotel solutions will be |
|
| New Orders |
Rs. 275 million (+ 38%) |
HICOM 300 system where
for |
marketed. |
|
|
the first time ISDN
trunks were |
We have entered the
growing |
|
|
used for a PABX. All ISDN |
mobile telephone market
with |
|
| Telecom
Networks |
|
systems are capable of |
|
the launch of world
renowned |
|
|
providing video
conferencing |
GSM mobile phones S6
& S10. |
|
| Apart
from strengthening our |
and data transmission at
high |
|
| presence
in the business areas |
speeds. The medium and
small |
Special Systems |
|
| of
narrowband switching and |
systems of HICOM-100
series |
We continued to provide |
|
| transport
networks, new areas |
continued to be marketed |
logistics support to a
number |
|
| including
broadband networks, |
successfully. We plan to |
of hi-tech systems
already |
|
| access
networks, mobile |
|
introduce Hicom-150 and |
|
supplied by Siemens to
various |
|
| networks,
telecom management |
Hicom-1182-2 in this
series in |
Government organizations
in |
|
| networks,
intelligent networks |
the near future. |
|
addition to providing new |
|
| and
internet solutions are being |
Our emphasis will be on
added- |
systems and technologies. |
|
| entered
into. |
|
features product business |
The prevalent economic |
|
| Our
indirect business in |
where auto attendant |
|
crunch affected the sale
of new |
|
| narrowband
switching and |
answering, voice mail |
|
systems. However, the |
|
| transport
networks was below |
|
business in logistics
support |
|
| target
due to unfavourable |
|
area continued steadily. |
|
| financial
situation of Pakistan |
|
Ground work for induction
of |
|
| Telecommunication
Co. Ltd., |
|
new systems is being
done. |
|
| (PTCL).
Production capacities |
|
| at
factories of both joint |
|
Siemens Nixdorf
Information |
|
| venture
companies, (TIP and |
|
Systems |
|
| CTI)
were underutilized due to |
|
We offer the entire range
of |
|
| lack
of orders. |
|
Siemens Nixdorf Computer |
|
| We
exported the services of |
|
Systems which includes |
|
| our
engineers for Siemens |
|
notebooks, personal
computers |
|
| projects
in Germany, France, |
|
& PC Servers, mini
& super mini |
|
| Netherlands,
Hungary, Bosnia, |
|
class machines, related |
|
| UAE,
Qatar, Kuwait, Nepal, |
|
software solutions &
services. |
|
| Indonesia
and Philippines |
|
Since its inception in
October, |
|
| where
they executed several |
|
1996 its operations
remained |
|
| projects. |
|
satisfactory. This
business is |
|
|
expected to grow steadily |
|
| Private
Networks |
|
| Introduction
of the state-of-the- |
|
|
| art
technology ISDN PABX |
|
| HICOM-300
System was a |
|
| ------------------------------------------------------------------------------------------------------- |
|
|
| Rail-Transportation
Systems |
equipment is increasing
every |
SOLAR |
|
| and
Medical Engineering |
|
year. Our Medical
Technical |
Solar Power System has
also |
|
|
Services Unit is fully
equipped |
been introduced for
domestic |
|
| Division |
|
to meet the challenge of
the |
applications during the
year. |
|
| Sales |
Rs. 296 million (+ 7%) |
growing requirements. |
|
One System of 2 kW has
been |
|
| New
Orders Rs. 133 million (- 40%) |
|
installed in a village 30
KM |
|
|
Rail-Transportation
Systems |
from District Okara for |
|
| Medical
Engineering |
|
The activity in the
transport |
electrification of Women
Art |
|
| Business
volume decreased |
section remained dull
during |
Centre. A number of
similar |
|
| substantially
from last year due |
the year. There has not
been |
systems of 250 Watts have |
|
| to
lack of funds in the health |
any new investment by the |
also been installed
recently in |
|
| sector.
During the year, we |
Railways in signalling
and |
remote areas of
Hyderabad, |
|
| have
supplied state-of-the-art |
related fields. Of the
large |
Sukkur and Rahim Yar
Khan. |
|
| digital
filmless cardiac |
signalling contract for
94 |
Several orders for solar |
|
| angiography
equipment to |
Stations, 36 Stations
have so |
products have been
obtained |
|
| Punjab
Institute of Cardiology, |
far been completed and |
|
from Pakistan
Telecommunication |
|
| Lahore.
This is the first system |
handed over to the
Railways |
Company (PTCL) and Sui |
|
| in
Pakistan which, in addition |
and another 6 Stations
are |
Southern Gas Company. |
|
| to
archiving coronary images |
ready for handing over. |
|
| on
traditional cine-film media, |
|
| also
provides loss-less digital |
|
| archiving
of examination |
|
| results
on cost effective |
|
| leading
edge optical media (i.e. |
|
| C.D). |
|
|
| We
have handed over three |
|
| major
projects, i.e. Ayub |
|
| Medical
College, Abbottabad, |
|
| Hayatabad
Medical Complex, |
|
| Peshawar
and National |
|
| Institute
of Handicapped, |
|
| Islamabad
which have been |
|
| equipped
with hi-tech |
|
| diagnostic
medical equipment. |
|
| We
have also supplied and |
|
| installed
a gamma camera at |
|
| Dr.
Ziauddin University |
|
| Hospital,
Karachi. Another |
|
| major
project, Children's |
|
| Hospital,
Quetta, inclusive of |
|
| civil
work, engineering services |
|
| and
medical equipment with |
|
| commitment
of three years |
|
| after-sales
support is nearing |
|
| completion. |
|
|
| The
installed volume of state- |
|
| of-the-art
highly sophisticated |
|
| ------------------------------------------------------------------------------------------------------- |
|
|
| Power
Engineering Division |
This is reflected in
overall |
private sector were |
|
| Sales |
Rs.l,600 million (+ 9%) |
lower new orders figure
for the |
undertaken. Completion of
Bin |
|
| New Orders |
Rs. 991 million (-40%) |
division. |
|
Qasim 220 kV Substation
and |
|
|
of the major portion of
GIS 5th |
|
| Power
Generation |
|
Relay and control panels
for |
Power Project of KESC |
|
| We
continue to play an active |
WAPDA and 132 kV
switchyard |
accounted for the bulk of
the |
|
| role
in enhancing the power |
and relay control panels
for IPP |
total sales during the
year. A |
|
| generation
capacity of the |
Saba Power were among
major |
substation for BOC
Limited |
|
| country.
After completing |
orders for the year.
Along with |
was completed in record
time |
|
| Tarbela
Extension, Guddu |
execution of old public
sector |
of 7 months. |
|
| Power
and Kot Addu Extension |
orders, new projects from
the |
|
| plants
previously, we received |
|
| a
new order for execution of |
|
| the
412 MW Combined Cycle |
|
| Private
Power Project (IPP) for |
|
| Rousch
Power Pakistan Limited |
|
| near
Multan. Including this |
|
| order,
we will have contributed |
|
| approximately
15% to |
|
| Pakistan's
installed thermal |
|
| power
capacity. |
|
|
| The
construction of a new |
|
| industrial
power plant for the |
|
| National
Refinery in Karachi |
|
| has
been completed. This is a |
|
| co-generation
project |
|
| consisting
of a 7.5 MW steam |
|
|
| turbine
generator and a 4 MW |
|
| diesel
generator. The Rousch |
|
| Power
Plant is expected to go |
|
| into
commercial operation in |
|
| 1998. |
|
|
| Transmission
& |
|
|
| Distribution |
|
| This
Unit specializes in the |
|
| engineering,
supply and |
|
| construction
of high voltage |
|
| substations
and protection and |
|
| control
systems. |
|
|
| Due
to problems mentioned |
|
| already
in respect of delay in |
|
| WAPDA
and KESC projects, it |
|
| was
a difficult year with decline |
|
| in
business volume, since |
|
| these
two public sector |
|
| organizations
account for |
|
| nearly
90% of this business. |
|
| ------------------------------------------------------------------------------------------------------- |
|
|
| Switchboards |
|
| The
capacity utilization |
|
| remained
satisfactory as orders |
|
| were
received from WAPDA |
|
| and
KESC as well as from the |
|
| private
sector. Major sales |
|
| related
to supplies for Japan |
|
| Power
Project, for cement |
|
| plants
(Maple Leaf, DG Khan |
|
| and
Bestway) and relay and |
|
| control
panels. Several |
|
| rationalization
measures were |
|
| introduced
to make the unit |
|
| more
efficient. |
|
|
| Export
business is expected to |
|
| increase
with intensified efforts, |
|
| currently
being made in the |
|
| Middle
East, Sri Lanka and |
|
| Bangladesh.
An export order |
|
| for
package stations was |
|
| executed
for a customer from |
|
| Saudi
Arabia. |
|
|
| Transformers |
|
| During
the year, various steps |
|
| were
taken to improve |
|
| productivity,
quality and |
|
| delivery.
New orders and sales |
|
| Persistent
default in receipt of |
|
| payments
from WAPDA and |
|
| KESC
posed severe liquidity |
|
| problems
and adversely |
|
| affected
profitability. |
|
|
| We
are the only manufacturer |
|
| of
power transformers in the |
|
| private sector. We were unable |
|
| to
utilize the production |
|
| capacity
fully due to delay in |
|
| various
projects. We have |
|
| intensified
our efforts in the |
|
| export
market and were |
|
| successful
in getting orders |
|
| from
Saudi Arabia and |
|
| Bangladesh. |
|
| ------------------------------------------------------------------------------------------------------- |
|
|
| Products
& Services Division |
|
| Sales |
Rs. 916 million (+ 440/0) |
|
|
| New
Orders Rs. 875 million (- 42%) |
|
|
| Engineering
and |
|
|
| Construction
Services / |
|
| Information
Technology |
|
| Services |
|
|
|
| Already
a proven name in |
|
| electrical
and I & C works, |
|
| Siemens
Pakistan has now |
|
| begun
to undertake mechanical |
|
| works
as well. Recently, at |
|
| BOC,
we successfully erected a |
|
| 140
ton 45 meter high cold |
|
| box,
one of the tallest |
