| Ibrahim Energy Limited |
|
|
|
|
|
|
|
|
| Annual
Report 1998 |
|
|
| Contents |
|
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| Company
Information |
|
|
| Chief
Executive |
Sheikh Mukhtar Ahmed |
|
|
|
| Directors |
|
Sheikh Mohammad Yaseen |
|
|
Mr. Mohammad Naeem
Mukhtar |
|
|
Mr. Mohammad Waseem
Mukhtar |
|
|
Mr. Atif Yaseen |
|
|
Mrs. Ghazala Naeem |
|
|
Mirza Khurshid Baig (ICP
Nominee) |
|
|
| Secretary |
|
S.M. Hasnain Rizvi |
|
|
|
| Auditors |
|
ER. Merchant & Co. |
|
|
Chartered Accountants, |
|
|
Karachi. |
|
|
| Tax
Consultants |
ER. Merchant & Co. |
|
|
Chartered Accountants, |
|
|
Karachi. |
|
|
| System
Consultants |
KPMG Peat Marwick |
|
|
Associates (Pvt) Limited |
|
|
Karachi. |
|
|
| Bankers |
|
Pakistan Industrial
Credit & Investment |
|
|
Corporation Limited |
|
|
Emirates Bank
International pjsc |
|
|
Faysal Bank Limited |
|
|
Muslim Commercial Bank
Limited |
|
|
| Registered
Office |
Ibrahim Centre |
|
|
l-A, Ahmed Block |
|
|
New Garden Town |
|
|
Lahore. |
|
|
| Head Office |
|
Ibrahim Centre |
|
|
15-Club Road, |
|
|
Faisalabad. |
|
|
| Shares Registration |
Ibrahim Centre |
|
| Office |
|
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 7th Annual General Meeting of the shareholders of
the company will be held on |
|
| 30-12-1998
at 11:00 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 30-06-1998. |
|
|
| 3.
To consider and approve the declaration of Cash Dividend @ 20% as recommended
by the Board of Directors. |
|
|
| 4.
To appoint Auditors for the next year 1998-99 and to fix their remuneration.
The present auditors |
|
| M/s.
ER. 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 |
|
|
| Place:
Lahore. |
|
S.M. Hasnain Rizvi |
|
| Date:
November 20, 1998 |
|
Company Secretary |
|
|
| Notes: |
|
|
| i.
The share transfer books of the company shall remain closed from 24-12-1998
to 30-12-1998 (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 23-12-1998 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
have pleasure for presenting before you the 7th Annual Report of the company
together with Audited |
|
| Accounts
for the year ended June 30, 1998. |
|
|
| Operating
Results |
|
|
| The
electric power generation and distribution during the year is 148,015
Megawatt hours as compared to |
|
| previous
year at 125,017 Megawatt hours. The capacity utilisation during the year
under review is low due to |
|
| complete
overhauling and maintenance work of engines which has resulted stoppage of
generating capacity |
|
| from
time to time. The engines had also to run at low speed after the overhauling
work to complete the running |
|
| in
time. The other factor of low capacity utilizations is less demand of
electricity from the end user. |
|
|
| Financial
Results |
|
|
| The
revenue earned from generation and distribution of electric energy is
satisfactory and the same are summarized |
|
| as follows: |
|
|
|
Year ended |
Year ended |
|
|
30-06-1998 |
30-06-1997 |
|
|
Rupees |
Rupees |
|
|
| Revenue
generated from sale of electric energy |
|
442,537,341 |
327,091,030 |
|
| Gross profit |
|
126,827,472 |
102,348,868 |
|
| Administrative
expenses |
|
19,498,801 |
14,642,402 |
|
| Operating
profit |
|
107,328,671 |
87,706,466 |
|
| Other income |
|
2,781,596 |
1,376,009 |
|
|
110,110,267 |
89,082,475 |
|
| Financial
/ other charges |
|
64,019,313 |
66,141,013 |
|
|
46,090,954 |
22,941,462 |
|
| Capital gain |
|
- |
15,172,181 |
|
|
46,090,954 |
38,113,643 |
|
| Taxation
(Provision written back) |
|
- |
494,411 |
|
| Net
profit for the year |
|
46,090,954 |
38,608,054 |
|
| Unappropriated
profit brought forward |
|
74,097 |
66,043 |
|
| Total
profit available for appropriation |
|
46,165,051 |
38,674,097 |
|
|
| 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% (1997: 20%) |
|
25,000,000 |
25,000,000 |
|
| Transfer
to general reserve |
|
21,100,000 |
13,600,000 |
|
|
46,100,000 |
38,600,000 |
|
| Unappropriated
profit carried forward |
|
65,051 |
74,097 |
|
|
| Future
Prospects |
|
|
| The
depressed economic condition prevailing for the last more titan six years had
largely affected the industrial |
|
| growth,
and a continuous slow down in production activities. It needs some corrective
measures in the right |
|
| direction
to revive the economy and to over come the problem of stagnation. |
|
|
| Your
Directors hope that with the revival of economy, the slow down in the
industrial sector will be over and all |
|
| type
of industrial activities will have a new start and the power sector will also
be benefited by the changed |
|
| condition. |
|
|
| Year
2000 Compliance of Computer System |
|
|
| The
company has assigned the work of year 2000 compliance of the existing
computer system to its consultants |
|
| and
they have confirmed that the work will be completed by September, 1999 and
all our applications will be |
|
| made
year 2k compliant. |
|
|
| 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 share holding of the company is annexed. |
|
|
| Acknowledgments |
|
|
| The
managements 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 |
|
|
| Place:
Lahore. |
|
Sheikh Mukhtar Ahmed |
|
| Date:
November 20, 1998 |
|
Chief Executive |
|
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed Balance Sheet of M/s. IBRAHIM ENERGY LIMITED, as at
June 30, 1998 and the |
|
| related
Profit and Loss Account and Statement of Changes in Financial Position,
together with the notes ft)forming |
|
| part
thereof, for the year then ended and we state that we have obtained all the
information and explanation |
|
| 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 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 consistently applied; |
|
|
| ii)
the expenditure incurred during the year was for the purpose 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, profit and loss account and the statement of changes in the 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,
1998 and the profit and the changes in the 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. |
|
|
| ER.
Merchant & Co., |
|
| Chartered
Accountants |
|
|
| Place:
Karachi. |
|
| Date:
November 20, 1998 |
|
|
|
| Balance
Sheet |
|
| as
at June 30, 1998 |
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
| Capital
and Reserves |
|
|
| Capital |
|
| Authorised |
|
| 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 |
|
82,900,000 |
61,800,000 |
|
| Unappropriated
profit |
|
65,051 |
74,097 |
|
|
--------- |
--------- |
|
|
207,965,051 |
186,874,097 |
|
| Long
Term Loans |
|
4 |
173,537,102 |
165,568,102 |
|
| Liabilities
Against Assets |
|
| Subject
to Finance Lease |
|
5 |
96,118,965 |
145,987,622 |
|
|
| Deferred
Liabilities |
|
| Provision
for gratuity |
|
6 |
2,368,470 |
1,408,049 |
|
|
| Current
Liabilities |
|
|
| Short
term borrowings |
|
- |
772,396 |
|
| Current
portion of long term liabilities |
7 |
89,899,657 |
58,664,749 |
|
| Creditors,
accrued & other liabilities |
8 |
30,964,199 |
30,791,491 |
|
| Proposed
dividend |
|
25,000,000 |
25,000,000 |
|
|
---------- |
---------- |
|
|
145,863,856 |
115,228,636 |
|
| Contingencies
and Commitments |
9 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
625,853,444 |
615,066,506 |
|
|
========== |
========== |
|
|
| Fixed
Capital Expenditure |
|
|
| Operating
assets |
|
10 |
534,379,424 |
542,165,867 |
|
|
|
|
| Long
Term Deposits & Deferred Cost |
11 |
28,919,205 |
15,716,781 |
|
|
| Current
Assets |
|
|
| Stores,
spares & loose tools |
12 |
25,762,693 |
19,062,178 |
|
| Stock
of oils & lubricants |
|
13 |
16,350,152 |
13,750,647 |
|
| Trade
debtors |
|
14 |
9,415,900 |
6,685,214 |
|
| Advances,
deposits & other receivables |
15 |
1,768,837 |
12,070,142 |
|
| Cash
& bank balances |
|
16 |
9,257,233 |
5,615,677 |
|
|
---------- |
---------- |
|
|
62,554,815 |
57,183,858 |
|
|
---------- |
---------- |
|
|
625,853,444 |
615,066,506 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
| Chief
Executive |
|
Director |
|
|
|
|
| Profit
and Loss Account |
|
| for
the year ended June 30, 1998 |
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
| Sales |
|
17 |
442,537,341 |
327,091,030 |
|
| Cost
of sales |
|
18 |
315,709,869 |
224,742,162 |
|
|
|
---------- |
---------- |
|
| Gross profit |
|
|
126,827,472 |
102,348,868 |
|
| Administrative
expenses |
|
19 |
19,498,801 |
14,642,402 |
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
107,328,671 |
87,706,466 |
|
| Other income |
|
20 |
2,781,596 |
1,376,009 |
|
|
---------- |
---------- |
|
|
110,110,267 |
89,082,475 |
|
| Other
charges |
|
|
|
| Financial |
|
21 |
60,351,996 |
64,504,891 |
|
| Amortisation
of deferred cost |
|
428,676 |
428,677 |
|
| Workers
profit participation fund |
|
2,466,480 |
1,207,445 |
|
|
---------- |
---------- |
|
|
63,247,152 |
66,141,013 |
|
|
---------- |
---------- |
|
|
46,863,115 |
22,941,462 |
|
| Capital gain |
|
- |
15,172,181 |
|
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
46,863,115 |
38,113,643 |
|
|
| Taxation
Provision written back |
22 |
- |
(494,411 ) |
|
| Provision for W.W.E |
|
772,161 |
- |
|
|
---------- |
---------- |
|
|
772,161 |
(494,411) |
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
46,090,954 |
38,608,054 |
|
| Unappropriated
profit brought forward |
|
74,097 |
66,043 |
|
|
---------- |
---------- |
|
|
46,165,051 |
38,674,097 |
|
|
| Appropriation |
|
| Proposed
dividend @ 20% (1997: 20%) |
|
25,000,000 |
25,000,000 |
|
| Transfer
to general reserve |
|
21,100,000 |
1,360,000 |
|
|
---------- |
---------- |
|
|
46,100,000 |
38,600,000 |
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
65,051 |
74,097 |
|
| The
annexed notes form an integral part of |
|
========== |
========== |
|
| these
accounts |
|
|
| Chief
Executive |
|
Director |
|
|
|
| Statement
of Changes in Financial Position |
|
| (Cash
Flow Statement) for the year ended June 30, 1998 |
|
|
|
1998 |
1997 |
|
|
Rupees |
Rupees |
|
|
| A.
Cash flow from operating activities |
|
|
| Profit
for the year before taxation |
|
46,090,954 |
38,608,054 |
|
| Adjustment
for depreciation |
|
59,282,539 |
31,196,077 |
|
| Provision
for gratuity |
|
1,060,550 |
476,039 |
|
| Gratuity
paid |
|
(100,129) |
(90,330) |
|
| Amortisation
of deferred cost |
|
428,676 |
428,677 |
|
| Financial
charges |
|
60,351,996 |
64,504,891 |
|
|
---------- |
---------- |
|
| Operating
profit before working capital changes |
|
167,114,586 |
135,123,408 |
|
|
---------- |
---------- |
|
| Changes
in working capital |
|
| (Increase)/decrease
in current assets |
|
|
| Stores,
spares and loose tools |
|
(6,700,515) |
(4,516,841) |
|
| Stock
in trade |
|
(2,599,505) |
2,834,188 |
|
| Trade
debtors |
|
(2,730,686) |
(3,993,661) |
|
| Advances,
deposits and other receivables |
|
10,301,305 |
(4,359,493) |
|
| (Decrease)/increase
in current liabilities |
|
| Creditors,
accrued and other liabilities |
|
(27,270,941) |
(15,434,469) |
|
|
---------- |
---------- |
|
|
(29,000,342) |
(25,470,276) |
|
|
---------- |
---------- |
|
| Cash
generated from operations |
|
138,114,244 |
109,653,132 |
|
|
| Financial
charges paid |
|
(57,908,346) |
(86,760,224) |
|
| Taxes paid |
|
- |
(494,411) |
|
|
---------- |
---------- |
|
| Net
cash (used in)./from operating activities |
|
80,205,898 |
22,398,497 |
|
|
---------- |
---------- |
|
|
|
|
1998 |
1997 |
|
|
Rupees |
Rupees |
|
| B.
Cash flow from investing activities |
|
|
|
| Fixed
capital expenditure |
|
(51,496,097) |
(250,247,974) |
|
| Proceeds
from disposal of fixed assets |
|
- |
9,794 |
|
| Long
term deposits |
|
(13,631,100) |
(9,842,449) |
|
| Long
term investments |
|
- |
206,704,000 |
|
| Short
term investment |
|
- |
45,529,145 |
|
|
---------- |
---------- |
|
| Net
cash (used in) from investing activities |
|
(65,127,197) |
(7,847,484) |
|
| C.
Cash flow from financing activities |
|
---------- |
---------- |
|
|
| Long
term loan |
|
48,000,000 |
- |
|
| Lease
finance |
|
- |
184,944,048 |
|
| Repayment
of long term loans |
|
(13,746,000) |
(161,787,000) |
|
| Repayment
of lease liability |
|
(44,918,749) |
(29,046,091 ) |
|
| Increase/(decrease)
in short term borrowings |
|
(772,396) |
(14,227,604) |
|
|
---------- |
---------- |
|
| Net
cash (used in) / from financing activities |
|
(11,437,145) |
( 20,116,647 ) |
|
|
---------- |
---------- |
|
| Net
increase in cash and |
|
| bank
balances (A+B+C) |
|
3,641,556 |
(5,565,634) |
|
|
| Cash
and bank balances |
|
| at
the beginning of the year |
|
5,615,677 |
11,181,311 |
|
|
---------- |
---------- |
|
| Cash
and bank balances |
|
| at
the end of the year |
|
9,257,233 |
5,615,677 |
|
|
========== |
========== |
|
| Chief
Executive |
|
Director |
|
|
|
| Notes
to the Accounts |
|
| for
the year ended June 30, 1998 |
|
|
| 1.
Status and activities |
|
|
| The
company is limited by shares incorporated in Pakistan and its shares are
quoted on stock exchanges in |
|
| Pakistan.
The company is operating a Power Generation Plant at Tehsil Jaranwala
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 |
|
|
| Foreign
currency loans have been converted into Pak rupees at the fixed rates of
exchange under the |
|
| exchange
risk absorption scheme of State Bank of Pakistan. Exchange risk coverage fee
is capitalised |
|
| as
part of cost of tangible fixed assets acquired from the proceeds of loans. |
|
|
| 2.3
Staff retirement benefits |
|
|
| The
company operates an unfunded gratuity scheme covering all its employees.
Provision is made |
|
| annually
to cover the liability under the scheme. |
|
|
| 2.4 Taxation |
|
|
|
| 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 |
|
| assets note. |
|
|
| Exchange
differences in respect of foreign currency loans obtained for acquisition of
fixed assets are |
|
| incorporated
in the cost of the relevant assets. |
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. Major renewal
and |
|
| improvements
are capitalised. |
|
|
| Gains
and losses on disposal of assets, if any, are included in current income. |
|
|
| 2.6
Capital work in Progress |
|
|
|
| All
cost/expenditure connected with specific assets, incurred during the project
implementation |
|
| period,
are grouped under this head. These are transferred to specific assets as and
when assets are |
|
| available
for use. |
|
|
| 2.7
Unallocated capital expenditure |
|
|
| All
cost/expenditure not directly related to specific assets, incurred during the
project implementation |
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