| Japan Power Generation Limited |
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
| COMPANY
INFORMATION |
|
| NOTICE
OF THE MEETING |
|
| DIRECTORS'
REPORT |
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| CASH
FLOW STATEMENT |
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| NOTES
TO THE ACCOUNTS |
|
| PATTERN
OF SHAREHOLDING |
|
| CATEGORIES
OF SHAREHOLDERS |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| MR.
ZAFAR MAHMOOD |
|
CHIEF EXECUTIVE |
|
| SHEIKH
NIAZ ALI |
|
| MR.
AKHTAR ALI UPPAL |
|
| MR.
ASAD ALI UPPAL |
|
| MR.
FAISAL QAMMAR UPPAL |
|
| MR.
SAITO YOSHIHIRO |
|
| SHEIKH
MAHMOOD ALI |
|
| MR.
MUHAMMAD ALI |
|
| MR.
HASEEB KHAN |
|
| SYED
ZAFAR HAIDER |
|
| MR.
SHAHARYAR AHMED |
|
| MR.
MAHMOOD AHMED |
|
| MR.
HAMAYUN RAZA |
|
| MRS.
SAMINA ZAFAR |
|
|
| COMPANY
SECRETARY |
|
| SYED
ZAFAR HAIDER |
|
|
| AUDITORS |
|
| HYDER
BHIMJI & CO., |
|
| CHARTERED
ACCOUNTANTS |
|
| & |
|
| JAVAID
JALAL AMJAD & CO., |
|
| CHARTERED
ACCOUNTANTS |
|
|
| LEGAL
ADVISORS |
|
| SYED
RASHID RAHIM |
|
|
| BANKERS |
|
| PRIME
COMMERCIAL BANK LTD. |
|
| ASKARI
COMMERCIAL BANK LTD. |
|
| ALLIED
BANK OF PAKISTAN LTD. |
|
| FAYSAL
BANK LTD. |
|
|
| REGISTERED
OFFICE |
|
| 26,
PESHAWAR BLOCK, |
|
| FORTRESS
STADIUM, |
|
| LAHORE
CANTT. |
|
| TEL:
6668156 - 57 |
|
| FAX:
6664625 |
|
|
| PLANT
LOCATION |
|
| JIA
BAGGA RAILWAY STATION, |
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| RAIWIND
ROAD, DISTRICT LAHORE. |
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| TEL:
5835864 - 68 |
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| FAX:
5835860 |
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|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the 6th Annual General Meeting of the members of Japan
Power Generation Limited will be |
|
| held
on Tuesday the 26th December, 2000 at 11:00 a.m. at plant site located at
Khan-Nepal Road near Jia Bagga Railway |
|
| Station,
Raiwind Road, District Lahore to transact the following business: |
|
|
| 1.
To confirm the minutes of last Annual General Meeting held on December 31,
1999. |
|
|
| 2.
To receive, consider and adopt the audited accounts of the Company for the
financial year ended June 30, 2000 |
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| together
with the Auditors' and Directors' Reports thereon. |
|
|
| 3.
To appoint Auditors for the financial year 2000-2001 and fix their
remuneration. |
|
|
| 4.
To transact any other business that may be placed before the meeting with the
permission of the Chair. |
|
|
|
For and on behalf of the |
|
|
Board of Directors |
|
|
|
|
| Lahore |
|
SYED ZAFAR HAIDER |
|
| December
05,2000 |
|
(Company Secretary) |
|
|
| Notes: |
|
| i)
The Share Transfer Book of the Company will remain closed from December 16,
2000 to December 26, |
|
| 2000
(both days inclusive) |
|
|
| ii)
A member entitled to attend and vote at the above meeting may appoint another
person as proxy. Proxies, in |
|
| order
to be effective, must be received at 26-Peshawar Block, Fortress Stadium,
Lahore Cantt, the registered |
|
| office
of the Company not later than forty-eight hours before the time of the
meeting and must be duly stamped, |
|
| signed
and witnessed. |
|
|
| iii)
Members are requested to immediately notify the change in address, if any |
|
|
|
| DIRECTORS'
REPORT |
|
|
| Your
Directors feel pleasure in presenting the 6th Annual Report and Audited
Accounts for the Year ended June 30, |
|
| 2000. |
|
|
| PRESENT
STATUS |
|
| With
Allah's blessing your project successfully declared the Commercial Operation
Date from March 14, 2000 |
|
| which
was accepted by WAPDA with the following two conditions: |
|
|
| A)
Company will comply with the environmental standards by increasing height of
stacks and submit a certificate |
|
| under
section 5.1 (b) (i) of PPA in this regard within four months from the date
thereof. |
|
|
| B)
The certificates and documents as required under section 3.3 (v) and 3.3
(vii) of PPA will be submitted within |
|
| three
months from the date thereof. |
|
|
| Necessary
work for increasing stack height is in progress and is nearing completion.
Required Extension of time from |
|
| WAPDA
is in place and company is confident to meet the requirement. |
|
|
| All
required certificates and documents as required u/s 3.3 (v) and 3.3(vii) of
PPA have been submitted to WAPDA. |
|
| From
March 15, 2000 the company started delivery of energy to WAPDA and is
receiving Energy and Capacity |
|
| payments
on the basis of MOU signed with WAPDA on July 29, 1999. |
|
|
| The
company is finalising a Rescheduling / Restructuring plan with the Banks'
Syndicate to which the majority of |
|
| Syndicate
members have principally agreed as explained in note - 10.2 & 10.3 to the
audited accounts. The legal |
|
| documentation
is being drafted for necessary authentication by the syndicate members. |
|
|
| GENERAL |
|
| The
profit and loss account being presented is for the period of three and a half
months i.e. from March 15, 2000 to June |
|
| 30, 2000. The main reason for loss is the
charge for liquidated damages of Rs. 51.331(m) imposed by WAPDA due to |
|
| project's
inability, on certain occasions, to supply electricity to WAPDA on demand.
This was primarily due to the non- |
|
| availability
of residual fuel oil for which required working capital could not be raised.
To ensure against any such future |
|
| eventuality,
the management has taken appropriate steps to buildup requisite stock of
residual fuel oil, from the funds |
|
| generated
from internal resources. |
|
|
| The
Directors wish to thank the members, staff and management of the company for
their devotion and hard work and are |
|
| confident
that Insha Allah with their whole-hearted efforts, future years will result
in profitability and prosperity. |
|
|
| AUDITORS |
|
| Retiring
Auditors Messrs. Javaid Jalal Amjad & Company Chartered Accountants and
Messrs. Hyder Bhimji & |
|
| Company
Chartered Accountants being eligible, offer themselves for reappointment. |
|
|
| PATTERN
OF SHARE HOLDING |
|
| Statement
reflecting the Pattern of shareholding as at June 30, 2000 is attached. |
|
|
| LAHORE |
|
ON BEHALF OF THE BOARD OF DIRECTORS |
|
| December
04, 2000 |
|
CHIEF EXECUTIVE |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Japan Power Generation 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 period 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 period was for the purpose of the
company's business; and |
|
|
| iii.
the business conducted, investments made and the expenditure incurred during
the period 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 loss, its cash flows and changes |
|
| in
equity for the period then ended; and |
|
|
| d)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| LAHORE |
|
Javaid Jalal Amjad & Co. |
|
Hyder Bhimji & Co. |
|
| December
04, 2000. |
|
Chartered Accountants |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET |
|
| AS
AT JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
| Fixed
capital expenditure |
|
| Operating
Fixed assets |
|
3 |
6,662,913,491 |
37,584,697 |
|
| Capital
work-in-progress |
|
4 |
-- |
4,689,372,380 |
|
| Pre-operational
cost |
|
5 |
-- |
717,827,766 |
|
|
|
------------- |
------------- |
|
|
2.8 |
6,662,913,491 |
5,444,784,843 |
|
| Deferred
Cost |
|
61,093,172 |
64,935,957 |
|
| Current
assets |
|
|
|
| Stock
and stores |
|
6 |
23,377,062 |
l 59,807,370 |
|
| Trade debts |
|
7 |
156,859,790 |
|
|
| Advances.
deposits, prepayments and other receivables |
8 |
98,606,713 |
12,146,853 |
|
| Cash
and bank balances |
|
9 |
55,031,591 |
59,964,909 |
|
|
|
------------- |
------------- |
|
|
333,875,156 |
131,919,l32 |
|
|
------------- |
------------- |
|
|
7,057,881,819 |
5,641.639,932 |
|
|
========== |
========== |
|
| Share
capital |
|
| Authorized |
|
| 150.000,000
Ordinary shares of Rs. 10 each |
|
1,500,000,000 |
1,500,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
| 133.200.000
Ordinary shares of Rs. 10/- each. |
|
| Issued
for cash |
|
1,332,000,000 |
1,332,000,000 |
|
| Accumulated
loss |
|
(67,567,284) |
-- |
|
|
------------- |
------------- |
|
| Shareholders'
equity |
|
1,264,432,716 |
1,332,000,000 |
|
| Sponsors'
interest free loan - unsecured |
|
168,375,918 |
108,585,226 |
|
| Long
term loans/finances |
|
10 |
3,989,830,228 |
3,068,423,961 |
|
| Liabilities
against assets |
|
|
|
|
| subject
to finance lease |
|
11 |
1,292,779 |
2,427.76 |
|
|
|
|
| Deferred
liabilities - gratuity |
|
2,545,200 |
1.851.300 |
|
|
| Current
liabilities |
|
| Finance
against dishonoured bill |
|
12 |
7,386,718 |
18,492,787 |
|
| Current
portion of long term liabilities |
|
13 |
733,600,387 |
705,902,401 |
|
| Short
term borrowings |
|
14 |
102,104,065 |
-- |
|
| Creditors,
accrued and other liabilities |
|
15 |
788,313,808 |
403,956,502 |
|
|
|
------------- |
------------- |
|
|
1,631,404,978 |
1,128,351,690 |
|
| Contingencies
and commitments |
|
16 |
|
|
------------- |
------------- |
|
|
7,057,881,819 |
5,641,639,932 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| LAHORE |
|
| December
04, 2000 |
DIRECTOR |
|
DIRECTOR |
|
CHIEF EXECUTIVE |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE PERIOD FROM MARCH 15, 2000 TO JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| Sales |
|
17 |
374,473,635 |
-- |
|
| Cost of sales |
|
18 |
237,310,344 |
-- |
|
|
|
------------- |
------------- |
|
| Gross profit |
|
|
137,163,291 |
-- |
|
| Operating
Expenses |
|
|
|
|
| Administration
and general |
|
19 |
7,049,700 |
-- |
|
|
|
------------- |
------------- |
|
| Operating
profit |
|
|
130,113,591 |
-- |
|
| Other
income |
|
20 |
1,139,270 |
-- |
|
|
|
------------- |
------------- |
|
|
|
131,252,861 |
-- |
|
| Financial
and other Charges |
|
|
|
|
| Financial
charges |
|
21 |
143,597,279 |
-- |
|
| Other
charges |
|
22 |
55,173,706 |
-- |
|
|
|
------------- |
------------- |
|
|
|
198,770,985 |
-- |
|
|
|
------------- |
------------- |
|
| Operating
loss before taxation |
|
|
(67,518,124) |
-- |
|
| Provision
for taxation |
|
|
|
|
| Current
taxation on other income |
|
|
49,160 |
-- |
|
|
|
------------- |
------------- |
|
| Loss
carried forward to balance sheet |
|
|
(67,567,284) |
-- |
|
|
|
|
========== |
========== |
|
| Earnings
per share of Rs. 10 each |
|
23 |
(0.051) |
-- |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| LAHORE |
|
| December
04, 2000 |
DIRECTOR |
|
DIRECTOR |
|
CHIEF EXECUTIVE |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Operating
loss before taxation |
|
(67,518,124) |
-- |
|
| Adjustment
for: |
|
|
|
| Depreciation |
|
65,299,753 |
-- |
|
| Provision
for gratuity |
|
693,900 |
-- |
|
| Amortisation
of deferred cost |
|
3,842,785 |
-- |
|
| Financial
Charges |
|
143,597,279 |
-- |
|
|
------------- |
------------- |
|
|
213,433,717 |
-- |
|
|
------------- |
------------- |
|
| Operating
profit before working capital changes |
|
145,915,593 |
-- |
|
| Working
capital change - schedule attached |
|
(89,365,794) |
-- |
|
| Income
taxes paid |
|
(6,012,419) |
-- |
|
|
------------- |
------------- |
|
| Cash
generated from operating activities |
|
50,537,380 |
-- |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Working
capital change - schedule attached |
|
-- |
146,642,951 |
|
| Fixed
capital expenditure |
|
(1,154,228,663) |
(1,305,552,732) |
|
|
------------- |
------------- |
|
| Net
cash used in investing activities |
|
(1,154,228,663) |
(1,158,909,781) |
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
| Long-term
loans / finances |
|
947,969,277 |
1,002,930,405 |
|
| Sponsors'
interest free loan |
|
59,790,692 |
108,585,226 |
|
| Finance
against dishonoured bill (FADB) |
|
(11,106,069) |
18,492,787 |
|
| Short
term borrowings |
|
102,104,065 |
-- |
|
| Payment
of lease rentals |
|
-- |
(1,138,901 ) |
|
|
------------- |
------------- |
|
| Net
cash provided by financing activities |
|
1,098,757,965 |
1,128,869,517 |
|
|
|
------------- |
------------- |
|
| Net
decrease in cash and cash equivalents |
|
(4,933,318) |
(30,040,264) |
|
| Cash
and cash equivalents at the beginning of the year |
|
59,964,909 |
90,005 173 |
|
|
|
------------- |
------------- |
|
| Cash
and cash equivalents at the end of the year |
9 |
55,031,591 |
59,964,909 |
|
|
========== |
========== |
|
|
| LAHORE |
|
| December
04, 2000 |
DIRECTOR |
|
DIRECTOR |
|
CHIEF EXECUTIVE |
|
|
|
| SCHEDULE
OF CHANGES IN OPERATING ASSETS AND LIABILITIES |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| Trade debts |
|
(156,859,790) |
-- |
|
| Stock
and stores |
|
36,430,308 |
(39,648,983) |
|
| Advances,
deposits, prepayments and other receivables |
(90,291,809) |
(3,855,894) |
|
| Creditors,
accrued and other liabilities |
|
121,355,497 |
190,147,828 |
|
|
------------- |
------------- |
|
|
(89,365,794) |
146,642,951 |
|
|
========== |
========== |
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
Share |
Accumulated |
Total |
|
|
Capital |
Loss |
|
|
|
Rupees |
Rupees |
Rupees |
|
|
| Balance
as at July 01, 1998 |
|
1,332,000,000 |
-- |
1.332,000,000 |
|
| Addition
during the year |
|
-- |
-- |
-- |
|
|
------------- |
------------- |
------------- |
|
| Balance
as at July 1, 1999 |
|
1,332,000,000 |
-- |
1.332.000.000 |
|
| Addition
during the year |
|
-- |
-- |
-- |
|
| Profit
/ (loss) for the period |
|
-- |
(67,567,284) |
(67,567,284) |
|
|
------------- |
------------- |
------------- |
|
| Balance
as at June 30, 2000 |
|
1,332,000,000 |
(67,567,284) |
1,264,432,716 |
|
|
========== |
========== |
========== |
|
|
|
|
| LAHORE |
|
| December
04, 2000 |
DIRECTOR |
|
DIRECTOR |
|
CHIEF EXECUTIVE |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
| 1.
STATUS AND ACTIVITIES |
|
| Japan
Power Generation Limited is a public company, incorporated on September 29,
1994 under the |
|
| Companies
Ordinance. 1984 and its shares are quoted on Lahore and Karachi Stock
Exchanges. The principal |
|
| business
of the company is to generate and supply electric power to WAPDA. The company
has commenced |
|
| actual
commercial operations w.e.f. March 15, 2000. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention modified by
capitalization of |
|
| exchange
differences referred to in note 2.9. |
|
|
| 2.2
Staff retirement benefits |
|
| The
company operates an unfunded gratuity scheme covering all its permanent
employees. Provision |
|
| is
made annually to cover the liability trader the scheme. |
|
|
| 2.3 Taxation |
|
|
| The
company's profit and gains from Power Generation are exempt from tax under
clause 176 of the |
|
| Second
Schedule - Part I to the Income Tax Ordinance, 1979. The company is also
exempt from |
|
| minimum
tax on turnover under clause 20 of the Second Schedule - Part IV to the
Income Tax |
|
| Ordinance,
1979. Tax on income from sources not covered under the above clauses is
determined in |
|
| accordance
with the normal provisions of the Income Tax Ordinance, 1979. |
|
|
| 2.4
Operating fixed assets and depreciation |
|
| Operating
fixed assets except land are stated at cost less accumulated depreciation.
Land and capital |
|
| work
in progress are stated at cost. Cost of certain fixed assets comprise of
historical cost, exchange |
|
| differences
referred to in note 2.9 and interest etc. in note 2.10. |
|
|
| Depreciation
on operating fixed assets is charged to profit on the straight line method so
as to write off |
|
| the
historical cost of an asset over its estimated useful life at the annual
rates mentioned in note 3. The |
|
| net
exchange differences relating to an asset, at the end of each year is
amortized in equal installments |
|
| over
its remaining useful life. Depreciation on additions is charged from the
month in which the asset |
|
| is
put to use and no depreciation is charged on assets deleted during the year. |
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. Major renewals
and |
|
| improvements
are capitalized. Gains and losses on disposal are taken to income. · |
|
|
| 2.5
Accounting for leased Assets |
|
| a)
Assets under finance lease are stated at lower of present value of minimum
lease payments under |
|
| the
lease agreement and the fair value of assets. Depreciation on these assets is
charged according |
|
| to
company's policy for similar assets. |
|
|
| b)
The aggregate amount of obligation relating to assets subject to finance
lease are accounted for at |
|
| the
net principal liability under the lease agreement. |
|
|
| c)
Finance charges are allocated over the lease term so as to produce constant
periodic rate of |
|
| return
on the outstanding principal liability for each period. |
|
|
| 2.6
Stock and stores |
|
| These
are valued at lower of cost or net realizable value. Cost has been calculated
as follows: |
|
| Residual
fuel oil |
|
-Moving average upto
commercial operation date |
|
|
and thereafter on FIFO
method. |
|
|
| High
Speed diesel |
|
-Moving average |
|
| Lube oil |
|
-Moving average |
|
| Chemicals
and other lubricants |
-Moving average |
|
|
| 2.7
Pre-operational cost |
|
| All
cost/expenditure not directly related to specific assets incurred before the
commencement of |
|
| operational
activities were grouped under this head. These have been allocated to
building and plant |
|
| and
machinery at the time of commencement of commercial operation. |
|
|
| 2.8
Deferred Cost |
|
| Deferred
cost consists of expenses incurred in connection with the company's formation
and public |
|
| issue
of shares including brokerage and commission etc. These are to be amortized
over a period of |
|
| five
year starting from March 15, 2000, the date of commercial operations. |
|
|
| 2.9
Foreign currency translation |
|
| Foreign
currency transactions are converted into Pak Rupees at the rates prevailing
on the date of |
|
| transaction.
Assets and liabilities in foreign currencies at the year-end are translated
into Pak Rupees |
|
| at
the rates of exchange prevailing at the balance sheet date. |
|
|
| Exchange
gains and losses on translation of foreign currency loans utilized for the
acquisition of fixed |
|
| assets
are capitalized and incorporated in the cost of such assets. |
|
|
| 2.10
Financial and other charges |
|
| Financial
and other charges on long term loans are capitalised upto the date of actual
commercial |
|
| operations.
All other financial and related charges are charged to income. |
|
|
| 2.11
Commitments and contingencies |
|
| Capital
commitments and contingencies, unless those are actual liabilities, are not
incorporated in the |
|
| accounts. |
|
|
| 2.12 Revenue recognition |
|
| Energy
sale is recognised on transmission of electricity to WAPDA, whereas revenue
on account of |
|
| Capacity
Purchase Price is recognised when invoiced. Profit on bank deposits is
recognised on actual |
|
| basis. |
