| Kohinoor Genertek Limited |
|
|
|
|
|
|
|
|
| Annual
Report 1998 |
|
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Directors'
Report to the Shareholders |
|
| Auditors'
Report to the Members |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of Shares Held by the Shareholders |
|
|
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
|
| MR.
TARIQ SAYEED SAIGOL |
|
Chairman |
|
| MR.
SARMAD AMIN |
|
Chief Executive |
|
| MR.
TAUFIQUE SAYEED SAIGOL |
|
| MR.
AAMIR FAYYAZ SHEIKH |
|
| MR.
ASAD FAYYAZ SHEIKH |
|
| MR.
SAYEED TARIQ SAIGOL |
|
| MR.
USMAN SAID |
|
| MR.
WUSOOQ KHALEELI |
|
(Nominee of NIT) |
|
|
| COMPANY
SECRETARY |
|
| MR.
MUHAMMAD ASHRAF |
|
|
| AUDITORS |
|
| M/S.
AVAIS HYDER ZAMAN RIZWANI, |
|
| CHARTERED
ACCOUNTANTS |
|
|
| BANKERS |
|
| PRIME
COMMERCIAL BANK LIMITED |
|
| GULF
COMMERCIAL BANK LIMITED |
|
| UNION
BANK LIMITED |
|
|
| REGISTERED
OFFICE |
|
| 42-LAWRENCE
ROAD, |
|
| LAHORE. |
|
| TEL:
6302261-6302262 |
|
| FAX:
92-42-6368721 |
|
|
| PROJECT |
|
| 8TH
KILOMETER, MANGA RAIWIND ROAD, |
|
| DISTRICT
KASUR. |
|
| TEL:
04951-391941-45 |
|
| FAX:
04951-391948 |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 6th Annual General Meeting of the members of
Kohinoor Genertek |
|
| Limited
will be held on Thursday, December 24, 1998 at 10.30 a.m. at its Registered
Office, 42- |
|
| Lawrence
Road, Lahore, to transact the following business:- |
|
|
| 1.
To confirm the minutes of the 5th Annual General Meeting held on December 29,
1997. |
|
|
|
|
| 2.
To receive, consider and adopt the audited accounts of the Company for the
year ended |
|
| June
30, 1998 together with the Directors' and Auditors' Reports thereon. |
|
|
|
|
| 3.
To approve the payment of final cash dividend @ Rs. 1.75 per share of Rs.
10/= each |
|
| (17.5%),
for the year ended June 30, 1998, as recommended by the Directors. |
|
|
| 4.
To appoint Auditors and fix their remuneration. M/s. Avais Hyder Zaman
Rizwani, Chartered |
|
| Accountants,
the retiring auditors, being eligible offer themselves for re-appointment. |
|
|
| 5.
To transact any other business with the permission of the Chair. |
|
|
|
|
BY ORDER OF THE BOARD |
|
|
|
|
|
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| Lahore:
December 01, 1998. |
|
(MUHAMMAD ASHRAF) |
|
|
|
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The share transfer books of the Company shall remain closed from December 24,
1998 to |
|
| December
30, 1998 (both days inclusive). Transfers received in order at the Registered
Office |
|
| of
the Company by the close of business on December 23, 1998 will be treated in
time. |
|
|
| 2.
A member entitled to vote at this meeting is entitled to appoint another
member as proxy. |
|
| Proxies
in order to be effective must be received at 42-Lawrence Road, Lahore, the |
|
| Registered
Office of the Company not less than 48 hours before the meeting and must be |
|
| duly
stamped, signed and witnessed. |
|
|
| 3.
Shareholders are requested to promptly notify the Company of any change in
their |
|
| addresses. |
|
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| The
Directors of your company welcome you 'to the 6th Annual General Meeting of
the Company |
|
| and
take pleasure in placing before you their report alongwith audited accounts
and auditors' |
|
| report
thereon for the year ended 30th June 1998. |
|
|
| Operating
Results |
|
| Your
company earned a net profit of Rs. 75.086 million as compared to Rs. 52.099
million last year. |
|
| The
major reason for this improvement is increase in production efficiency,
increase in WAPDA |
|
| tariff
from March 1998 and strict monitoring of production costs. |
|
|
|
|
(Rupees in thousand) |
|
|
|
|
1998 |
1997 |
|
|
|
|
|
|
| Net
profit of the Company for the year ended 30th June
1998 |
75,086 |
52,099 |
|
| Unappropriated
profit brought forward |
32,127 |
28,928 |
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
107,213 |
81,027 |
|
| Appropriations: |
|
| Interim
Cash Dividend @ Rs. 3/- per share |
- |
48,900 |
|
| Proposed
Final Cash Dividend @ Rs. 1.75 per share |
28,525 |
- |
|
|
---------- |
---------- |
|
|
|
28,525 |
48,900 |
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
78,688 |
32,127 |
|
|
|
========== |
========== |
|
| Earning
per share (Rupees) |
|
4.61 |
3.20 |
|
|
|
|
|
| Future
Prospects |
|
| The
management of the Company is exerting its best efforts for maximum capacity
utilisation and it |
|
| is
hoped that there will be an increase in profitability of the Company during
the current financial |
|
| year. |
|
|
| Millennium
Bug |
|
| The
database that has been used to develop the software systems is compliant with
year 2000. |
|
| However,
there are some modifications required in input forms and output reports to
handle the |
|
| century
in four digits and the Company is taking measures to ensure that all its
computer |
|
| applications,
process controllers and hardware systems are free of the millennium bug and
year |
|
| 2000
compliant well before the turn of the century. |
|
|
| Dividend |
|
| Your
Directors have recommended a final cash dividend @ Rs. 1.75 per share of Rs.
10 each |
|
| (17.50%)
for the year ended 30th June, 1998. |
|
|
| Auditors |
|
| The
auditors M/s. Avais Hyder Zaman Rizwani, Chartered Accountants, retire and
being eligible |
|
| offer
themselves for re-appointment. |
|
|
| Pattern
of Share Holding |
|
| The
pattern of share holding of the Company is included in the Annual Report. |
|
|
| Acknowledgment |
|
| The
Directors place on record their appreciation for the dedicated efforts made
by the Staff and |
|
| Executives
of the Company and hope that the same spirit of devotion and dedication will
continue |
|
| in future. |
|
|
|
|
for and on behalf of the Board |
|
|
|
|
|
|
| Lahore:
November 21, 1998. |
|
(SARMAD AMIN) |
|
|
|
|
Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Kohinoor Genertek Limited as at 30
June 1998 |
|
| and
the related profit and loss account and cash flow statement, 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 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 the 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, 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 cash flow statement, 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 30 June 1998 and of the profit and cash flow for the year then
ended; and |
|
|
|
|
| (d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
|
|
AVAIS HYDER ZAMAN |
|
| Lahore:
November 21, 1998. |
|
Chartered Accountants |
|
|
|
|
| BALANCE
SHEET AS AT 30 JUNE 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
|
|
| Authorised
Capital |
|
|
|
| 30,000,000
ordinary shares of Rs. 10 each |
|
300,000,000 |
300,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
3 |
163,000,000 |
163,000,000 |
|
| Capital
reserve |
|
4 |
98,000,000 |
98,000,000 |
|
| Unappropriated
profit |
|
|
78,688,418 |
32,126,785 |
|
|
|
|
---------- |
---------- |
|
|
|
|
339,688,418 |
293,126,785 |
|
|
|
|
|
| LONG
TERM LOANS - Secured |
|
5 |
22,938,635 |
119,671,662 |
|
| DEFERRED
LIABILITY - Gratuity |
|
6 |
756,100 |
369,850 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
|
|
|
| Current
portion of long term loans |
|
5 |
119,671,662 |
- |
|
| Short
term finance - Secured |
|
7 |
77,594,011 |
73,334,914 |
|
| Creditors,
accrued and other liabilities |
8 |
31,663,019 |
91,329,385 |
|
| Proposed
dividend |
|
|
28,525,000 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
257,453,692 |
164,664,299 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
9 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
620,836,845 |
577,832,596 |
|
|
|
|
========== |
========== |
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
|
|
|
| Operating
fixed assets |
|
10 |
384,418,162 |
419,387,441 |
|
| Capital
work-in-progress |
|
11 |
1,211,667 |
177,623 |
|
|
|
|
---------- |
---------- |
|
|
|
|
385,629,829 |
419,565,064 |
|
|
|
|
|
|
| LONG
TERM INVESTMENT |
|
12 |
60,900,000 |
60,900,000 |
|
| DEFERRED
COST |
|
13 |
5,784,906 |
7,713,206 |
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
14 |
37,846,588 |
14,142,849 |
|
| Stock
of oil and lubricants |
|
15 |
12,264,826 |
7,128,856 |
|
| Trade debts |
|
16 |
37,881,924 |
35,109,309 |
|
| Advances,
deposits & prepayments |
|
17 |
76,514,478 |
27,926,308 |
|
| Other
receivables |
|
18 |
1,777,051 |
628,161 |
|
| Cash
and bank balances |
|
19 |
2,237,243 |
4,718,843 |
|
|
|
|
---------- |
---------- |
|
|
|
|
168,522,110 |
89,654,326 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
620,836,845 |
577,832,596 |
|
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
SARMAD AMIN |
|
WUSOOQ KHALEELI |
|
|
|
Chief Executive |
|
Director |
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30 JUNE 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Sales |
|
20 |
389,407,553 |
262,841,952 |
|
| Cost
of generation |
|
21 |
282,832,064 |
190,229,091 |
|
|
|
|
---------- |
---------- |
|
| Gross
Profit |
|
|
106,575,489 |
72,612,861 |
|
|
|
|
| Operating
expenses |
|
22 |
5,633,473 |
5,692,810 |
|
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
100,942,016 |
66,920,051 |
|
| Other
income |
|
23 |
3,905,245 |
1,703,242 |
|
|
|
|
---------- |
---------- |
|
|
|
|
104,847,261 |
68,623,293 |
|
|
|
|
---------- |
---------- |
|
| Financial
and other charges |
|
24 |
20,118,156 |
11,853,971 |
|
| Amortisation
of deferred cost |
|
|
1,928,300 |
1,928,300 |
|
| Workers'
profit participation fund |
|
|
4,140,040 |
2,742,051 |
|
|
|
|
---------- |
---------- |
|
|
|
|
26,186,496 |
16,524,322 |
|
|
|
|
---------- |
---------- |
|
| Net
profit for the year |
|
|
78,660,765 |
52,098,971 |
|
| Taxation
- Prior year's |
|
25 |
3,574,132 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
75,086,633 |
52,098,971 |
|
| Unappropriated
profit brought forward |
|
32,126,785 |
28,927,814 |
|
|
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
|
107,213,418 |
81,026,785 |
|
| Appropriation: |
|
|
|
| Interim
dividend @ Rs. Nil (1997: Rs. 3) per share |
- |
48,900,000 |
|
| Final
proposed dividend Rs. 1.75 (1997: Rs. Nil) per share |
28,525,000 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
28,525,000 |
48,900,000 |
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
78,688,418 |
32,126,785 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
SARMAD AMIN |
|
WUSOOQ KHALEELI |
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30 JUNE 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Note |
Rupees |
Rupees |
|
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Cash
generated from operations |
|
29 |
32,582,657 |
152,251,764 |
|
| Financial
charges paid |
|
|
(18,197,359) |
(10,516,401) |
|
| Gratuity
paid |
|
|
(27,800) |
- |
|
| Tax paid |
|
|
(3,574,132) |
- |
|
|
|
|
---------- |
---------- |
|
| Net
cash inflow from operating activities |
|
10,783,366 |
141,735,363 |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Fixed
capital expenditure |
|
(8,966,606) |
(177,454,772) |
|
| Long
term investment |
|
- |
(60,900,000) |
|
| Proceeds
from sale of fixed assets |
|
- |
630,000 |
|
|
|
---------- |
---------- |
|
| Net
cash (outflow) from investing activities |
|
(8,966,606) |
(237,724,772) |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Dividend
paid |
|
|
(27,236,995) |
(20,919,825) |
|
| Long
term loans |
|
|
22,938,635 |
119,671,662 |
|
|
|
|
---------- |
---------- |
|
| Net
cash (outflow)/inflow from financing activities |
(4,298,360) |
98,751,837 |
|
|
|
|
| Net
(decrease)/increase in cash & cash equivalents |
(2,481,600) |
2,762,428 |
|
| Cash
and cash equivalents at the beginning of the year |
4,718,843 |
1,956,415 |
|
|
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at the end of the year |
30 |
2,237,243 |
4,718,843 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
SARMAD AMIN |
|
WUSOOQ KHALEELI |
|
|
Chief Executive |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED 30 JUNE 1998 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| Kohinoor
Genertek Limited was incorporated in February, 1993 as a public limited
company in |
|
| Pakistan
under the Companies Ordinance, 1984 with the primary object to undertake
power |
|
| generation,
distribution and supply of electricity. The shares of the company are quoted
on Karachi |
|
| and
Lahore Stock Exchanges. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| The
principal accounting policies adopted in the preparation of these accounts
are summarized |
|
| below: |
|
|
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention without any |
|
| adjustment
for the effects of inflation or current values. |
|
|
|
|
| 2.2
Staff retirement benefits |
|
| The
company has been operating an unfunded gratuity scheme for its employees
whose |
|
| period
of service is one year or more for which provision annually is made to cover
the |
|
| obligation.
However, in the succeeding year the company has disbanded the gratuity scheme |
|
| and
has introduced Provident Fund Scheme with effect from 1 October, 1998. |
|
|
| 2.3
Taxation |
|
| By
virtue of clause 176 of part 1 of Second Schedule to the Income Tax
Ordinance, 1979, |
|
| profits
and gains of the company are exempt from levy of income tax. The company is
also |
|
| exempt
from minimum tax on turnover under clause 20 of the part IV of Second
Schedule to |
|
| the
Income Tax Ordinance, 1979. |
|
|
|
|
| 2.4
Fixed capital expenditure |
|
| All
fixed capital expenditures are stated at cost less accumulated depreciation
except |
|
| freehold
land and capital work in progress which are stated at cost. Depreciation is |
|
| calculated
on reducing balance method at normal rates specified in Note 10. Full year's |
|
| depreciation
is charged on additions whereas no depreciation is charged on deletions
during |
|
| the year. |
|
|
|
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. Major |
|
| renewals
and improvements are capitalized. |
|
|
|
|
| Gains/losses,
if any, on disposal of assets are taken to profit and loss account. |
|
|
| 2.5
Deferred cost |
|
| The
deferred cost is being amortized over a period of five years beginning from
the full year |
|
| of
commercial production i.e. year ended 30 June 1997. |
|
|
| 2.6
Stocks, stores and spares |
|
| These
are valued at moving average cost, except stores in transit which are stated
at actual |
|
| cost. |
|
|
|
|
|
| 2.7
Revenue recognition |
|
| Revenue
from supply of electricity is recognized on issue of bills to customers. |
|
|
| 2.8
Foreign currency translation |
|
| Foreign
currency assets and liabilities, if any are translated at the rate prevailing
on the date |
|
| of
balance sheet. Foreign currency transactions, if any, are converted at the
rate applicable |
|
| on
the date of transaction. Resulting gain or loss, if any, relating to
acquisition of assets is |
|
| capitalised
and for other transactions, charged to revenue. |
|
|
| 2.9
Investments |
|
| These
are stated at cost. |
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
Rupees |
Rupees |
|
| 3.
ISSUED, SUBSCRIBED & PAID UP CAPITAL |
|
|
|
| 16,300,000
ordinary shares of Rs. 10 each |
|
| fully
paid in cash |
|
|
163,000,000 |
163,000,000 |
|
|
|
|
========== |
========== |
|
| 4.
CAPITAL RESERVES |
|
|
|
| Premium
against issuance of shares |
|
|
98,000,000 |
98,000,000 |
|
|
|
|
|
|
========== |
========== |
|
| 5.
LONG TERM LOANS - Secured |
|
|
| Union
Bank Limited |
|
|
5.1 |
119,671,662 |
119,671,662 |
|
| Prime
Commercial Bank Limited |
|
5.2 |
22,938,635 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
142,610,297 |
119,671,662 |
|
|
|
|
|
|
119,671,662 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
22,938,635 |
119,671,662 |
|
|
|
|
========== |
========== |
|
|
|
|
| 5.1
This represents the amount of Usance Letter of Credit (ULC) established by
Union Bank |
|
| Limited
for Japanese Yen 329.674 million (1997: Japanese Yen 329.674 million)
including |
|
| interest
amounting to Japanese Yen 26.374 million. The said Letter of Credit, which
was |
|
| established
in April 1996 for import of one Niigata engine, shall mature before the end
of |
|
| November
1998. On the basis of exchange rate currently prevailing the Company is
liable to |
|
| pay
in excess of Rs. 20 million more on the liability as above due to loss in
value (devaluation) |
|
| of
Pak Rs. against Japanese Yen over the period. |
|
|
|
|
| The
above facility is secured by creating first registered and equitable
pari-passu charge on |
|
| the
assets of the Company valuing upto Rs. 175 million. |
|
|
|
|
| 5.2
This represents the amount of Usance Letter of Credit (ULC) established by
Prime |
|
| Commercial
Bank Limited for Japanese Yen 66.796 million (1997: Rs. Nil) in September
1997 |
|
| for
import of spare parts for Niigata engine, the maturity date of which is
November 1999. |
|
| The
above facility is secured by creating first registered and equitable mortgage
pari-passu |
|
| charge
over fixed assets of the Company of a value upto Rs. 27 million and first |
|
| hypothecation
charge over stocks and receivables of the Company also valuing upto Rs. 27 |
|
| million
and personal guarantees of directors. |
|
|
|
|
| 6.
DEFERRED LIABILITY - Gratuity |
|
|
|
|
|
| Balance
brought forward |
|
|
369,850 |
100,250 |
|
|
|
|
|
|
| Provision
during the year |
|
|
414,050 |
269,600 |
|
| Payments
to outgoing staff |
|
|
27,800 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
386,250 |
269,600 |
|
|
|
|
---------- |
---------- |
|
|
|
|
756,100 |
369,850 |
|
|
|
|
========== |
========== |
|
|
|
|
| 7.
SHORT TERM FINANCE - Secured |
|
| The
financing was obtained from various financial institutions and banks under
mark-up |
|
| arrangements
aggregating Rs. 82 million (1997: Rs. 74 million). The rate of mark-up ranges
from |
|
| 19%
to 23.5% (1997 · 20% to 23.5%). The purchase price of these facilities is to
be settled on |
|
| various
dates upto June 1999. |
|
|
|
|
| The
arrangements are secured by way of pari-passu charges over fixed assets,
hypothecation of |
|
| the
Company's stocks, trade debts and other receivables, pledge of shares (Shares
of Maple Leaf |
|
| Cement
Factory Limited. Please see note 12 on Long term investments), bank
guarantees and |
