| Mari Gas Company Limited |
|
|
|
|
|
|
|
|
|
|
|
| Annual
Report 1998 |
|
|
|
| Contents |
|
|
| Company
Information |
|
| Board
of Directors |
|
| Financial
Highlights |
|
| Notice
of Annual General Meeting |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Ten
Years at a Glance |
|
| Pattern
of Shareholding |
|
|
|
|
|
| Company
Information |
|
|
| Legal
Advisors |
|
| Orr
Dignam & Company |
|
| Khan
& Piracha |
|
|
| Auditors |
|
| A.F.
Ferguson & Company |
|
| Chartered
Accountants |
|
|
| Bankers |
|
| ABN
AMRO Bank N.V. |
|
| Allied
Bank of Pakistan Limited |
|
| Askari
Commercial Bank Limited |
|
| Bank
of America |
|
| Citibank
N.A. |
|
| Habib
Bank Limited |
|
| Muslim
Commercial Bank Limited |
|
| National
Bank of Pakistan |
|
| United
Bank Limited |
|
|
| Registered
Office |
|
| 21-Mauve
Area, 3rd Road |
|
| Sector
G- 10/4. |
|
| Islamabad. |
|
|
|
| Board
of Directors |
|
|
|
| Chairman |
|
|
|
| Lt
Gen Khalid Latif Moghal (Retd) |
|
|
|
| Managing
Director |
|
|
|
| Fauji
Foundation |
|
|
| Chief
Executive |
|
| Lt
Gen Ghulam Muhammad Malik (Retd) |
|
| Managing
Director |
|
| Mari
Gas Company Limited |
|
|
| Director |
|
| Mr.
Iltifat Rasul Khan |
|
| Director
Finance |
|
| Fauji
Foundation |
|
|
| Director |
|
| Brig
Riaz Ahmed Qureshi (Retd) |
|
| Director
P&A |
|
| Fauji
Foundation |
|
|
| Director |
|
| Brig
Muhammad Saeed Baig (Retd) |
|
| Director
P&D |
|
|
|
|
| Fauji
Foundation |
|
|
|
|
|
|
|
|
| Director |
|
|
|
|
|
| Brig
Muhammad Akram Ali Khan (Retd) |
|
|
|
|
| Director
Sugar |
|
| Fauji
Foundation |
|
|
|
|
| Director |
|
|
| Mr.
Abdus Sattar |
|
| Financial
Advisor P&NR |
|
| Governor
of Pakistan |
|
|
| Director |
|
| Mr.
Abdul Rahman |
|
| Businessman |
|
|
| Director |
|
| Mr.
F.Q. Usmani |
|
| Acting
Chairman |
|
| OGDCL |
|
|
| Director |
|
| Mr.
Shahid Ahmad |
|
| Director
General (PC) |
|
| Government
of Pakistan |
|
|
| Mr.
Nasim Beg |
|
|
| Deputy
Chief Executive |
|
|
| NIT |
|
|
|
|
|
| Director |
|
| Mr.
Najam K. Hyder |
|
| General
Manager |
|
| Joint
Venture/Production |
|
| OGDCL |
|
|
| Director |
|
| Mr.
Munir Ahmad |
|
| Director
General (Gas) |
|
| Government
of Pakistan |
|
|
| Company
Secretary |
|
| Mr.
Khurram Khan |
|
|
|
|
|
| Financial
Highlights |
|
|
|
|
1997-98 |
1996-97 |
|
|
| Revenue |
|
Rs. Million |
5,446.36 |
5,098.45 |
|
| Government
levies |
|
Rs. Million |
4,928.25 |
4,619.60 |
|
| Profit
before tax |
|
Rs. Million |
163.10 |
218.58 |
|
| Profit
after tax |
|
Rs. Million |
153.49 |
196.74 |
|
| Dividend
per share |
|
Rs. |
2.25 |
2.25 |
|
| Tangible
fixed assets (Gross) |
|
Rs. Million |
1,956.48 |
1,774.73 |
|
| Number of shares issued and
subscribed |
Million |
36.75 |
36.75 |
|
|
|
|
| Notice
of Annual General Meeting |
|
|
| Notice
is hereby given that the Fourteenth Annual General Meeting of the
Shareholders of Mari Gas |
|
| Company
Limited will be held on Wednesday, December 23, 1998 at 9:30 a.m. at 21-Mauve
Area, 3rd Road, |
|
| Sector
G-10/4, Islamabad to transact the following business: |
|
|
| 1.
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. |
|
|
| 2.
To appoint Auditors for the year 1998-99 and fix their remuneration. |
|
|
|
|
By order of the Board |
|
|
|
|
|
|
|
KHURRAM KHAN |
|
| Islamabad,
December 02, 1998 |
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The Share Transfer Books of the Company will remain closed from December 17,
1998 to |
|
| December
23, 1998 (both days inclusive). |
|
|
| 2.
A member entitled to attend and vote at the Meeting is entitled to appoint a
proxy. The |
|
| instrument
of proxy duly executed in accordance with the articles of association of the
Company |
|
| must
be deposited at the registered office of the Company at Islamabad, at least
48 hours before |
|
| the
time of holding the meeting. |
|
|
| 3.
Shareholders are requested to promptly notify the Company of any change in
their address. |
|
|
|
| Directors'
Report |
|
|
| 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, 1998. |
|
|
| OPERATIONS |
|
| The
Company continued un-interrupted gas supply throughout the year under review
to all its customers |
|
| namely
Fauji Fertilizer Company Ltd, Engro Chemical Pakistan Ltd, Pak Saudi
Fertilizer Company Ltd and |
|
| Water
and Power Development Authority (WAPDA). The cumulative gas produced during
the year ended |
|
| June
30, 1998 was 136,776.819 million standard cubic feet (MMSCF) as against
135,859.808 (MMSCF) |
|
| during
the corresponding period of 1996-97. The daily average gas production for the
year was 374.731 |
|
| MMSCF
as compared to 372.218 MMSCF last year. |
|
|
| The
gas allocation to fertilizer companies for producing fertilizer and to WAPDA
for power generation |
|
| remained
the same during the year at 336 MMSCFD and 66 MMSCFD respectively. |
|
|
| Regular
maintenance of the field infrastructure arid equipment was carried out and
reservoir monitoring was |
|
| conducted
throughout the year for preventing any breakdowns and controlling water
conning problem in |
|
| wells. |
|
|
| FUTURE
CHALLENGES |
|
| With
the successful drilling of the second deep well, the Company has discovered a
decent size of gas |
|
| reservoir
in Goru B sands of the deeper horizon. The gas discovered is estimated to
have probable reserves |
|
| of
2 Trillion Cubic Feet (TCF) and proven reserves of 0.65 TCF of combustible
gas. This of course, is in |
|
| addition
to the existing shallow Habib Rahi recoverable reserves of 4.7 TCF of gas. |
|
|
| With
the discovery of gas in, the deeper horizon, the Company has finalized the
arrangements to conduct a |
|
| 440
line kilometer 2D seismic survey as a prelude to the development of Goru B
reservoir. Based on the |
|
| interpretation
of the acquired seismic data and the appraisal of reservoir, further
development of the field will |
|
| be
undertaken accordingly. |
|
|
|
| FINANCIAL
RESULTS |
|
|
|
|
Rs. '000 |
|
| The
profit and appropriations for the year are as follows: |
|
| PROFIT |
|
| -
Profit for the year under review after taxation |
153,494 |
|
| - Unappropriated profit
brought forward |
|
354,820 |
|
|
|
|
|
---------- |
|
|
|
508,314 |
|
| APPROPRIATION |
|
|
|
| - Dividend @ 22.5% in May 1998 |
|
|
82,689 |
|
| -
Transferred to Undistributed Percentage Return Reserve |
6,432 |
|
|
|
|
|
---------- |
|
|
|
89,121 |
|
|
|
---------- |
|
| - Unappropriated profit
carried forward |
|
419,193 |
|
|
|
|
|
========== |
|
|
| The
Directors have decided to retain Rs.6,432 thousand representing the balance
of percentage |
|
| return
relating to the year ended June 30, 1998. Therefore, the aforesaid amount is
being transferred |
|
| to
"Undistributed Percentage Return Reserve". Reduction in profit
after taxation is mainly due to high |
|
| depreciation
cost of fixed assets and decrease in, interest income due to reduced bank
deposits on account of |
|
| non-payment
of dues by WAPDA. However, above variances do not affect the return to the
Shareholders. |
|
|
| DIRECTORS |
|
|
| The
following persons were elected as directors for a three-year term, under the
provisions of the Companies |
|
| Ordinance,
1984, at the Extraordinary General Meeting held on June 24, 1998: |
|
|
| 1.
Lt Gen Khalid Latif Moghal (Retd) |
|
| 2.
Lt Gen Ghulam Muhammad Malik (Retd) |
|
| 3.
Mr. Iltifat Rasul Khan |
|
| 4.
Brig Sayyed Ifzal Hussain (Retd) |
|
| 5.
Brig Riaz Ahmed Qureshi (Retd) |
|
| 6.
Brig Muhammad Saeed Baig (Retd) |
|
| 7.
Mr. Abdul Rahman |
|
| 8.
Mr. Nasim Beg (Nominee of NIT) |
|
|
| Brig
Muhammad Akram Ali Khan (Retd) was appointed as member of the Board with
effect from |
|
| September
01, 1998 in place of Brig Sayyed Ifzal Hussain (Retd) who resigned from the
directorship. |
|
| Mr.
Abdul Waheed, businessman, retired as a director on June 24, 1998. |
|
|
| The
three each nominee directors of the Government of Pakistan and Oil & Gas
Development Company |
|
| Limited,
not being subject to election, continued to be the members of the Board. Mr.
Tajuddin Khan Sherwani |
|
| and
Mr. Shahid Akbar resigned from the directorship with effect from April 13,
1998. These vacancies were |
|
| filled
by Mr. Munir Ahmad as nominee of Government of Pakistan and Mr. Usman
Aminuddin as nominee of |
|
| Oil
& Gas Development Company Limited. Mr. Hilal A. Raza was appointed as a
nominee director in place |
|
| of
Mr. Usman Aminuddin on September 17, 1998. However, nomination of Mr. Hilal
A. Raza was also |
|
| withdrawn
by OGDCL. Nomination of third director of OGDCL is still awaited. |
|
|
| I
wish to record the Board's appreciation for the valuable contributions and
services rendered by all |
|
| the
outgoing directors during their tenure. I also extend warm welcome to the
incoming directors. |
|
|
| AUDITORS |
|
| The
present auditors, Messrs A.E Ferguson & Company, Chartered Accountants,
retire and being eligible |
|
| offer
themselves for re-appointment as auditors of the Company. |
|
|
| HUMAN
RESOURCES |
|
| Relations
between the Management and the workers continued to be cordial and are
expected to remain so |
|
| in
the future. |
|
|
| WELFARE
ACTIVITIES |
|
| The
Company continues to maintain its regular welfare activities for the local
community in the vicinity of |
|
| Mari
Gas Field. |
|
|
| YEAR
2000 COMPLIANCE OF COMPUTER SYSTEMS |
|
| The
Company is fully aware of the issue of "Millennium Bug" and is
taking appropriate steps, including |
|
| upgrading
the computer system, to overcome this problem. |
|
|
| The
major customers of the Company include WAPDA, Engro Chemical Pakistan
Limited, Fauji Fertilizer |
|
| Company
Limited and Pak Saudi Fertilizers Limited. The Company is dealing with the
banks, both local and |
|
| foreign,
in the normal course of business. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| A
statement showing the pattern of shareholding in the Company as at June 30,
1998 is attached. |
|
|
| 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 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
Company Ltd. |
|
|
|
|
|
For and on behalf of the Board |
|
|
|
|
|
|
|
|
|
Lt Gen Khalid Latif Moghal (Retd) |
|
|
|
|
Chairman |
|
|
|
|
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Mari Gas Company Limited as at June
30, 1998 and the |
|
| related
profit and loss account and cash flow statement together with the notes
forming part thereof, for the |
|
| year
ended June 30, 1998 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 the requirements of |
|
| Mari
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 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 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, 1998 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 |
|
| deducted
by the Company and deposited in the Central Zakat Fund established under
section 7 |
|
| of
that Ordinance. |
|
|
|
|
| Islamabad |
|
A. F. Ferguson & Co. |
|
| November
16, 1998. |
|
Chartered Accountants |
|
|
|
|
| Balance
Sheet as at June 30, 1998 |
|
|
|
|
Note |
1998 |
1997 |
|
|
|
|
|
(Rupees in thousand) |
|
| 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 |
367,500 |
|
| General
reserve |
|
|
2,046 |
2,046 |
|
| Undistributed
percentage return reserve |
4 |
37,424 |
30,992 |
|
| Profit
and loss account |
|
5 |
419,193 |
354,820 |
|
|
|
|
---------- |
---------- |
|
|
|
|
826,163 |
755,358 |
|
| REDEEMABLE
CAPITAL AND ACCRUED MARK-UP |
6 |
214,805 |
279,552 |
|
|
|
|
|
|
| LONG
TERM LOANS AND DEFERRED LIABILITIES |
|
|
|
|
|
|
| Loans
- secured |
|
|
7 |
206,472 |
295,547 |
|
|
|
| Employees'
retirement benefits |
|
|
1,381 |
1,115 |
|
|
|
| Deferred
credits |
|
|
8 |
26,835 |
8,239 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
|
234,688 |
304,901 |
|
|
|
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
|
|
| Current
maturity of - redeemable capital and |
|
|
-
accrued mark-up |
|
6 |
64,747 |
55,254 |
|
|
|
|
- long term loans |
|
7 |
82,588 |
84,442 |
|
|
|
| Accrued
and other liabilities |
|
9 |
2,795,157 |
1,325,860 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
2,942,492 |
1,465,556 |
|
|
|
|
---------- |
---------- |
|
| CONTINGENCIES
AND COMMITMENTS |
|
10 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
4,218,148 |
2,805,367 |
|
|
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
assets |
|
11 |
955,469 |
838,613 |
|
| Capital
work-in-progress |
|
12 |
75,308 |
128,501 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,030,777 |
967,114 |
|
|
|
|
|
|
| LEASING
AND EXPLORATION COSTS |
|
|
| Cost |
|
|
5,606 |
5,606 |
|
| Less:
Amortization |
|
|
2,803 |
2,540 |
|
|
|
|
---------- |
---------- |
|
|
|
2,803 |
3,066 |
|
|
|
|
| LONG-TERM
LOANS, ADVANCES, DEPOSITS |
|
|
| AND
PREPAYMENTS |
|
13 |
4,842 |
4,671 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
14 |
67,465 |
68,883 |
|
| Trade
debts - unsecured, considered good |
15 |
2,576,662 |
1,038,915 |
|
| Loans,
advances and prepayments |
|
16 |
13,375 |
10,489 |
|
| Other
receivables |
|
17 |
142,739 |
98,930 |
|
| Taxation |
|
|
85,998 |
25,977 |
|
| Bank
and cash balances |
|
18 |
293,487 |
587,322 |
|
|
|
|
---------- |
---------- |
|
|
|
|
3,179,726 |
1,830,516 |
|
|
|
|
---------- |
---------- |
|
|
|
4,218,148 |
2,805,367 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Lt
Gen Ghulam Muhammad Malik (Retd) |
|
|
Abdus Sattar |
|
| Chief
Executive |
|
|
Director |
|
|
|
| Profit
and Loss Account for the year ended June 30, 1998 |
|
|
|
|
|
Note |
1998 |
1997 |
|
|
|
|
|
(Rupees in thousand) |
|
|
|
|
| Sales - net |
|
19 |
612,454 |
584,917 |
|
| Less:
Royalty |
|
|
75,541 |
72,488 |
|
|
|
|
---------- |
---------- |
|
|
|
|
536,913 |
512,429 |
|
| Other
operating expenses |
|
20 |
320,476 |
248,012 |
|
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
216,437 |
264,417 |
|
| Other
income |
|
21 |
70,765 |
109,268 |
|
|
|
|
---------- |
---------- |
|
|
|
|
287,202 |
373,685 |
|
|
|
|
---------- |
---------- |
|
| Financial
charges |
|
22 |
114,895 |
143,370 |
|
| Other
charges |
|
23 |
9,209 |
11,737 |
|
|
|
|
---------- |
---------- |
|
|
|
|
124,104 |
155,107 |
|
|
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
|
163,098 |
218,578 |
|
| Taxation |
|
|
9,604 |
21,837 |
|
|
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
|
153,494 |
196,741 |
|
| Unappropriated
profit brought forward |
|
354,820 |
246,835 |
|
|
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
508,314 |
443,576 |
|
|
|
|
| Appropriations/transfers: |
|
|
| Dividends
- Ist Interim @ 22.5% (1997: 10.0%) |
|
82,689 |
36,750 |
|
| - 2nd Interim Nil (1997: 12.5%) |
|
- |
45,938 |
|
| Transferred
to undistributed percentage return |
|
|
|
| reserve
- note 4.1 |
|
6,432 |
6,068 |
|
|
|
---------- |
---------- |
|
|
|
89,121 |
88,756 |
|
|
|
---------- |
---------- |
|
| Un-appropriated
profit carried forward |
|
419,193 |
354,820 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Lt
Gen Ghulam Muhammad Malik (Retd) |
|
|
Abdus Sattar |
|
| Chief
Executive |
|
|
|
Director |
|
|
|
| Cash
Flow Statement for the year ended June 30, 1998 |
|
|
|
|
Note |
1998 |
1997 |
|
|
|
|
|
(Rupees in thousand) |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
| Cash
generated from operations |
|
24 |
365,344 |
275,663 |
|
| Financial
charges paid |
|
|
(221,187) |
(120,609) |
|
| Taxes paid |
|
|
|
(69,626) |
(28,694) |
|
| Long-term
loans, advances, deposits |
|
|
|
| and
prepayments (net) |
|
|
(171) |
(2,093) |
|
|
|
|
---------- |
---------- |
|
| Net
cash inflow/(outflow) from operating activities |
74,360 |
124,267 |
|
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Fixed
capital expenditure |
|
(184,893) |
(362,755) |
|
| Sale
proceeds of fixed assets |
|
1,440 |
4,679 |
|
| Interest
received |
|
|
66,049 |
100,698 |
|
|
|
|
---------- |
---------- |
|
| Net
cash (outflow)/inflow from investing activities |
(117,404) |
(257,378) |
|
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Share
capital subscription |
|
|
- |
157,215 |
|
