| Ibrahim Energy Limited |
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| Annual
Report 2000 |
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| Contents |
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| Company
Information |
|
| Notice
of Meeting |
|
| Directors'
Report to the Shareholders |
|
| Auditors'
Report to the Members |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| Company
Information |
|
|
| *
Board of Directors |
|
| Sheikh
Mukhtar Ahmed |
|
| (Chairman
& Chief Executive) |
|
| Sheikh
Mohammad Yaseen |
|
| Mohammad
Naeem Mukhtar |
|
| Mohammad
Waseem Mukhtar |
|
| Atif Yaseen |
|
|
| Ghazala Naeem |
|
|
| Mirza
Khurshid Baig (ICP Nominee) |
|
|
| * Secretary |
|
| Anwarul Haque |
|
|
| B. Com., FCA |
|
|
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| ·
Auditors/Tax Consultants |
|
| F.
R. Merchant & Co. |
|
| Chartered
Accountants, |
|
| Karachi,
Pakistan. |
|
|
| *
Information Technology Consultants |
* Bankers |
|
| KPMG
Peat Marwick |
|
Pakistan Industrial
Credit & Investment |
|
| Associates
(Pvt) Limited |
|
Corporation Limited |
|
| Karachi,
Pakistan. |
|
Al-Baraka Islamic Bank |
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|
Emirates Bank
International PJSC |
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|
Faysal Bank Limited |
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|
Muslim Commercial Bank
Limited |
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* Registered Office |
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Ibrahim Centre |
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|
1-A, Ahmed Block |
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|
New Garden Town |
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|
Lahore, Pakistan. |
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* Head Office |
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|
Ibrahim Centre |
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|
15-Club Road, |
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|
Faisalabad, Pakistan. |
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|
* Shares Registration
Office |
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|
Ibrahim Centre |
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|
GK-7/59, Bagh-e-Zehra
Street, |
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|
Kharadar, |
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|
Karachi, Pakistan. |
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* Plant Location |
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38, Kilometre, |
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Faisalabad-Sheikhupura
Road, |
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Tehsil Jaranwala,
District |
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Faisalabad, Pakistan. |
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| Notice
of Meeting |
|
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| Notice
is hereby given that the 9th Annual General Meeting of the shareholders of
the company will be held on |
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| 23-12-2000
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 ended 30-06-2000. |
|
|
| 3.
To consider and approve the declaration of bonus shares @ 20% as recommended
by the Board of Directors. |
|
|
| 4.
To appoint Auditors for the year 2000-2001 and fix their remuneration. The
present auditors |
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| M/s.
E R. Merchant & Co. Chartered Accountants, Karachi being eligible for
appointment, offer |
|
| themselves
for re-appointment. |
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|
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| 5.
SPECIAL BUSINESS: |
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|
|
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| The
remuneration of Chief Executive or full time working director of the company
to be re-fixed w.e.f. 01-01-2001. |
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| "Resolved
that the remuneration of Chief Executive or full time working director of the
company be and is |
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| hereby
re-fixed in line with market conditions w.e.f. 01-01-2001 as follows:- |
|
|
| 1. Basic Salary |
|
Rs. 200,000 |
per month |
|
| 2.
House Rent Allowance |
Rs. 100,000 |
per month |
|
| 3. Utilities |
|
Rs. 20,000 |
per month |
|
|
| 6.
To transact any other business with the permission of the chair. |
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|
|
|
By order of the Board |
|
|
|
|
|
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| Lahore. |
|
|
Anwarul Haque |
|
| November
15, 2000 |
|
Company Secretary |
|
|
| Notes: |
|
|
| i.
The share transfer books of the company shall remain closed from 14-12-2000
to 23-12-2000 (both days |
|
| inclusive)
to determine the names of members entitled to receive bonus shares and to
attend the meeting. |
|
| Transfers
received in order at the registered office of the company at Ibrahim Centre,
l-A, Ahmed Block, |
|
| New
Garden Town, Lahore at the close of business on 13-12-2000 will be treated in
time. |
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|
|
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| ii.
A member entitled to attend and vote at the meeting may appoint another
member as his/her proxy to |
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| attend
and vote on his/her behalf. |
|
|
|
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| iii.
The proxies, in order to be effective, must be received by the company at
least 48 hours before the time for |
|
| holding
the meeting. |
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|
|
| Directors'
Report to the Shareholders |
|
|
| Your
Directors are pleased to present the 9th Annual Report of the company
together with Auditors' Report for |
|
| the
year ended June 30, 2000. |
|
|
| Power
Generation Results |
|
| During
the year under review, capacity utilization of the plant registered an
increase of 5.59% over the previous |
|
| year
and generated 158,970 Megawatt Hours electrical power as compared to 150,558
Megawatt Hours during |
|
| the
previous year, but it was still on the lower side due to the stagnant
industrial activity and restricted demand of |
|
| electrical
power in the surrounding area of the plant. |
|
|
| Financial
Results |
|
| During
the current financial year, there was a decrease in profit after tax of
52.75% which was mainly due to |
|
| increasing
trend in furnace oil prices. Per ton furnace oil price has increased to Rs.
9,680/- (net of sales tax) by the |
|
| end
of the financial year as against per ton price of Rs. 5,278.70 (net of sales
tax) prevailing at the beginning of |
|
| the
financial year, thus showing an increase of 83.38%. The revenues of the
company also decreased as WAPDA |
|
| made
a downward adjustment in the tariff by introducing a new dual band time based
industrial tariff. |
|
|
| You
will appreciate that during the year under review your company managed to
generate and distribute higher |
|
| electrical
power in terms of Megawatt Hours but could not maintain its profitability at
the level of last year as it |
|
| does
not have any control over the prices of electrical power as well as the
prices of furnace oil being used as raw |
|
| material
for generation of electrical power. |
|
|
| The
summarized position of financial results is as under. |
|
|
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|
Year ended |
Year ended |
|
|
|
30-06-2000 |
30-06-1999 |
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|
|
Rupees |
Rupees |
|
|
| Revenue
generated from sale of electrical power |
|
451,179,155 |
466,751,925 |
|
|
|
|
========== |
========== |
|
| Gross profit |
|
|
97,278,430 |
148,471,791 |
|
| Administrative
expenses |
|
|
27,700,882 |
27,284,646 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
69,577,548 |
121,187,145 |
|
| Other income |
|
|
2,084,743 |
3,081,186 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
71,662,291 |
124,268,331 |
|
| Financial
/ other charges |
|
|
39,662,178 |
54,945,311 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
32,000,113 |
69,323,020 |
|
| Prior
year workers' welfare fund written back |
|
756,043 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
32,756,156 |
69,323,020 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit brought forward |
|
38,071 |
65,051 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
32,794,227 |
69,388,071 |
|
|
|
|
========== |
========== |
|
|
| Bonus Shares |
|
| Your
directors are pleased to recommend issue of Bonus Shares @ 20% out of the
profit earned during the year. |
|
|
| The
appropriations of profit are as under: |
|
|
|
Year ended |
Year ended |
|
|
|
30-06-2000 |
30-06-1999 |
|
|
|
Rupees |
Rupees |
|
| Appropriations: |
|
| Proposed
dividend Nil (1999: 25%) |
|
-- |
31,250,000 |
|
| Proposed
issue of Bonus Shares @ 20% (1999: Nil) |
25,000,000 |
-- |
|
| Transfer
to general reserve |
|
7,700,000 |
38,100,000 |
|
|
|
------------------ |
------------------ |
|
|
|
32,700,000 |
69,350,000 |
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
94,227 |
38,071 |
|
|
|
========== |
========== |
|
| Earning
per share |
|
2.62 |
5.55 |
|
|
|
|
| Future
Prospects |
|
| We
foresee that with the start up of production of expansion project of Ibrahim
Fibres Limited during third |
|
| quarter
of 2002, the demand of electrical power will increase and profitability of
your company will improve. |
|
|
| Auditors |
|
| The
present Auditors Messrs. F.R. Merchant & Co., Chartered Accountants,
Karachi retire and being eligible, |
|
| offer
themselves for re-appointment. |
|
|
| Pattern
of Shareholding |
|
| The
pattern of shareholding of the company is annexed. |
|
|
| Acknowledgments |
|
| We
wish to thank our valued clients, banks, financial institutions and
shareholders for their continued support |
|
| and
confidence on the company. The employees of the company deserve appreciation
for their dedication, devotion |
|
| and hard work. |
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|
|
|
On behalf of the Board |
|
|
|
|
|
|
| Lahore. |
|
|
Sheikh Mukhtar Ahmed |
|
| November
15, 2000 |
|
Chief Executive |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed Balance Sheet of Ibrahim Energy
Limited, as at June 30, 2000 and the related |
|
| profit
and loss account, cash flow statement and statement of changes in equity
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 purpose of
our audit. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of internal control, and |
|
| prepare
and present the above said statements in conformity with the approved
accounting standards and the |
|
| requirements
of the Companies Ordinance, 1984. Our responsibility is to express an opinion
on these statements |
|
| based
on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These standards |
|
| require
that we plan and perform the audit to obtain reasonable assurance about
whether the above said statements |
|
| are
free of any material misstatement. An audit includes examining, on a test
basis, evidence supporting the |
|
| amounts
and disclosures in the above said statements. An audit also includes
assessing the accounting policies |
|
| and
significant estimates made by management, as well as evaluating the overall
presentation of the above said |
|
| statements.
We believe that our audit provides a reasonable basis for our opinion and,
after due verification, 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, 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, cash flow statement and statement of changes
in equity together |
|
| with
the notes forming part thereof conform with approved accounting standards as
applicable in Pakistan, |
|
| and,
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, 2000 and of the |
|
| Profit,
its cash flows and changes in equity for the year then ended; and |
|
|
| d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance
1980, (XVIII of 1980), was |
|
| deducted
by the company and deposited in the Central Zakat Fund established under
Section 7 of that |
|
| Ordinance. |
|
|
|
|
|
|
|
|
| Karachi. |
|
|
F.R. Merchant & Co., |
|
| November
15, 2000 |
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at June 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
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 |
|
|
128,700,000 |
121,000,000 |
|
| Reserves
for issue of bonus shares |
|
25,000,000 |
-- |
|
| Unappropriated
profit |
|
|
94,227 |
38,071 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
278,794,227 |
246,038,071 |
|
| Long
Term Loans |
|
4 |
138,390,102 |
130,842,102 |
|
| Liabilities
Against Assets |
|
| Subject
to Finance Lease |
|
5 |
31,356,172 |
56,417,749 |
|
|
|
|
|
| Deferred
Liabilities |
|
|
|
| Provision
for gratuity |
|
6 |
7,304,660 |
4,978,265 |
|
|
| Current
Liabilities |
|
| Short
term borrowings |
|
7 |
102,000,000 |
-- |
|
| Current
portion of long term liabilities |
8 |
76,213,577 |
95,393,220 |
|
| Creditors,
accrued & other liabilities |
9 |
22,430,116 |
34,513,057 |
|
| Proposed
dividend |
|
|
-- |
31,250,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
200,643,693 |
161,156,277 |
|
|
------------------ |
------------------ |
|
|
|
656,488,854 |
599,432,464 |
|
|
|
========== |
========== |
|
|
| Fixed
Capital Expenditure |
|
| Operating
assets |
|
10 |
498,131,516 |
508,635,955 |
|
|
|
|
|
| Long
Term Deposits |
|
11 |
9,597,540 |
24,597,540 |
|
|
|
| Current Assets |
|
|
|
| Stores,
spares & loose tools |
|
12 |
75,347,839 |
33,393,033 |
|
| Stock
of oils & lubricants |
|
13 |
24,563,944 |
8,980,710 |
|
| Trade debtors |
|
14 |
18,629,376 |
8,575,922 |
|
| Advances,
deposits & other receivables |
15 |
23,390,993 |
8,834,730 |
|
| Cash
& bank balances |
|
16 |
6,827,646 |
6,414,574 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
148,759,798 |
66,198,969 |
|
|
------------------ |
------------------ |
|
|
|
656,488,854 |
599,432,464 |
|
|
|
========== |
========== |
|
| The
annexed notes from 1 to 27 form an integral part of these accounts. |
|
|
Chief Executive |
|
Director |
|
|
|
|
|
| Profit
and Loss Account |
|
| for
the year ended June 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| Sales- Net |
|
|
451,179,155 |
466,751,925 |
|
| Cost of sales |
|
17 |
353,900,725 |
318,280,134 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
97,278,430 |
148,471,791 |
|
| Administrative
expenses |
|
18 |
27,700,882 |
27,284,646 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit |
|
|
69,577,548 |
121,187,145 |
|
| Other income |
|
19 |
2,084,743 |
3,081,186 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
71,662,291 |
124,268,331 |
|
| Other charges |
|
| Financial |
|
20 |
37,977,962 |
51,296,731 |
|
| Workers'
profit participation fund |
|
1,684,216 |
3,648,580 |
|
|
------------------ |
------------------ |
|
|
|
|
39,662,178 |
54,945,311 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
32,000,113 |
69,323,020 |
|
|
|
|
|
------------------ |
------------------ |
|
| Taxation |
|
|
21 |
(16,118) |
-- |
|
| W.W.E
prior year written back |
|
|
772,161 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
756,043 |
-- |
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
32,756,156 |
69,323,020 |
|
| Unappropriated
profit brought forward |
|
38,071 |
65,051 |
|
|
|
------------------ |
------------------ |
|
|
|
32,794,227 |
69,388,071 |
|
|
| Appropriation |
|
|
| Proposed
dividend Nil (1999 - 25%) |
|
-- |
31,250,000 |
|
| Proposed
bonus shares @ 20% (1999 -Nil) |
|
25,000,000 |
-- |
|
| Transferred
to general reserve |
|
7,700,000 |
38,100,000 |
|
|
|
------------------ |
------------------ |
|
|
|
32,700,000 |
69,350,000 |
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
94,227 |
38,071 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes from 1 to 27 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, 2000 |
|
|
|
|
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| A.
Cash flow from operating activities |
|
| Profit
for the year before taxation |
|
32,756,156 |
69,323,020 |
|
| Adjustment
for depreciation |
|
55,339,042 |
56,465,856 |
|
| Provision
for gratuity |
|
2,745,664 |
2,877,634 |
|
| Gratuity paid |
|
|
(419,269) |
(267,839) |
|
| (Profit)/loss
on sale of fixed assets |
|
7,250 |
(146,763) |
|
| Financial
charges |
|
37,977,962 |
51,296,731 |
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
128,406,805 |
179,548,639 |
|
|
|
------------------ |
------------------ |
|
| Changes
in working capital |
|
| (Increase)/decrease
in current assets |
|
| Stores,
spares and loose tools |
|
(41,954,806) |
(13,820,080) |
|
| Stocks in trade |
|
|
(15,583,234) |
7,369,442 |
|
| Trade debtors |
|
|
(10,053,454) |
839,978 |
|
| Advances,
deposits and other receivables |
|
(14,556,263) |
(876,153) |
|
| (Decrease)/increase
in current liabilities |
|
|
|
| Creditors,
accrued and other liabilities |
|
(11,908,705) |
5,481,336 |
|
|
|
------------------ |
------------------ |
|
|
|
(94,056,462) |
(1,005,477) |
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
34,350,343 |
178,543,162 |
|
| Financial
charges paid |
|
(38,420,280) |
(53,393,403) |
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) /from operating activities |
|
(4,069,937) |
125,149,759 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
| B.
Cash flow from investing activities |
|
| Fixed
capital expenditure |
|
(45,809,956) |
(31,057,544) |
|
| Proceeds
from disposal of fixed assets |
|
968,103 |
481,920 |
|
| Long
term deposits |
|
15,000,000 |
4,321,665 |
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) /from investing activities |
|
(29,841,853 |
(26,253,959) |
|
|
|
|
------------------ |
------------------ |
|
| C.
Cash flow from financing activities |
|
| Long
term loan - revolving finance |
|
21,700,000 |
-- |
|
| Repayment
of long term loans |
|
(18,695,000) |
(27,031,000) |
|
| Repayment
of lease liability |
|
(39,698,220) |
(49,871,653) |
|
| Payment
of dividend |
|
(30,981,918) |
(24,835,806) |
|
| Increase/(decrease)
in short term borrowings |
|
102,000,000 |
-- |
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) /from financing activities |
|
34,324,862 |
(101,738,459) |
|
|
|
------------------ |
------------------ |
|
| Net
increase in cash and bank balances (A+B+C) |
|
413,072 |
(2,842,659) |
|
| Cash
and bank balances at the beginning of the year |
6,414,574 |
9,257,233 |
|
|
|
------------------ |
------------------ |
|
| Cash
and bank balances at the end of the year |
|
6,827,646 |
6,414,574 |
|
|
========== |
========== |
|
|
|
Chief Executive |
|
Director |
|
|
|
| Statement
of Changes in Equity |
|
| for
the year ended June 30, 2000 |
|
|
|
|
Profit for the |
|
|
|
Share |
General |
Reserve for |
year and |
|
|
|
Capital |
Reserve |
issue of |
appropriations |
Total |
|
|
(Rupees) |
(Rupees) |
bonus shares |
(Rupees) |
(Rupees) |
|
|
|
