| Siemens (Pakistan) Engineering Company
Limited |
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| Annual
Report 2000 |
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| Five
years summary |
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|
Rupees in thousand |
|
| As
at September 30. |
1996 |
1997 |
1998 |
1999 |
2000 |
|
|
|
|
|
| Reserves
& share capital |
772,767 |
969,896 |
1,166,023 |
1,168,671 |
1,435,192 |
|
| New orders |
|
3,572,735 |
2,273,846 |
2,862,009 |
3,295,311 |
5,371,934 |
|
| Sales |
|
2,579,836 |
3,065,315 |
2,632,576 |
3,327,335 |
3,582,253 |
|
| Export of goods and services |
11,529 |
108,860 |
150,118 |
181,368 |
304,311 |
|
| Profit after tax |
|
228,665 |
220,608 |
219,606 |
114,173 |
266,521 |
|
| Profit
as a percentage of sales (%) |
8.9 |
7.2 |
8.3 |
3.4 |
7.4 |
|
| Profit
as a percentage of equity (%) |
29.6 |
22.7 |
18.8 |
9.8 |
18.6 |
|
| Dividend
(including interim dividend) |
23,479 |
23,479 |
88,046 |
46,958 |
117,395 |
|
| Dividend
as a percentage of share capital (%) |
30 |
30 |
112.50 |
60 |
150 |
|
| Earnings
per share (Rs.) |
29.22 |
28.19 |
28.06 |
14.59 |
34.05 |
|
| Number
of Permanent employees |
1,167 |
1,256 |
1,218 |
1,207 |
1,221 |
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| Corporate
Structure |
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| Managing
Director |
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| Divisions |
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| Information
& Communication, Medical Engineering |
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| Energy
Transmission & Distribution, Rail Transportation, Solar Systems |
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| Industrial
Projects, Technical Services and Power Generation |
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| Automation
& Drives |
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| Finance
& Business Administration |
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| Business
Units |
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| Information
& Communication, Public Networks |
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| Enterprise/Business
Networks |
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| Private Carriers |
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| Special Systems |
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| Medical
Engineering |
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| Transmission
& Distribution |
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| Transformers |
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| Switchboards |
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| Rail
Transportation |
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| Solar Systems |
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| Industrial
Projects, Process & Automation |
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| Engineering
& Construction |
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| Maintenance
& Service |
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| Power
Generation |
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| Information
Technology |
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| Diesel
Generating Sets |
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| Motors
and Alternators |
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| Standard
Products |
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| Central
Depts. |
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| Finance
& Controlling |
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| Security
& General Services |
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| Audit |
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| Organization
& Information |
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| Corporate
Depts. |
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| Human
Resources |
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| Industrial
Relations |
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| Quality |
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| Communication |
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| Siemens
AG's other investments in Pakistan |
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| Telephone
Industries of Pakistan (Pvt) Limited, Haripur |
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| Carrier
Telephone Industries (Pvt.) Limited, Islamabad |
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| Rousch
(Pakistan) Power Limited, Abdul Hakim |
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| Regional Offices |
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| Karachi,
Lahore, Islamabad, Quetta, Peshawar |
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| Contents |
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| Corporate
Objectives |
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| Company
Information |
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| Company
Performance |
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| Directors'
Report |
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| Management
Report |
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| Information
& Communication, Medical Engineering Division |
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| Energy
Transmission & Distribution, Rail Transportation and Solar Systems
Division |
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| Industrial
Projects & Technical Services and Power Generation Division |
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| Automation
& Drives Division |
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| Notice
of Meeting |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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| Profit
& Loss Account |
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| Cash
Flow Statement |
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| Statement
of Changes in Equity |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| Locally
manufactured products & services |
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| Siemens
household appliances |
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| Corporate
Objectives |
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| *
Our prime objective is to offer our customers quality products and services
at |
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| competitive
prices to their complete satisfaction. |
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| *
We constantly endeavor to maintain our position as market leaders and
technology |
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| pace-setters
in all areas of our operations and to continuously improve our |
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| efficiency
and competitive strength. |
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| *
To enhance their creativity and job satisfaction, we provide our employees, |
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| opportunity
for personal development, limited only by their own ability and drive; |
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| we
consider this to be an important means of achieving our corporate goals. |
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| *
By continually improving our performance, we aim to generate earnings
sufficient |
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| to
ensure a secure future for the Company and to protect and increase
shareholders' |
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| investment. |
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| *
Local presence, backed fully by the high-tech engineering expertise of
Siemens |
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| world
wide, is our special strength. |
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| *
We are an integral part of national economy with a strong sense of
responsibility |
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| to
society and the environment. |
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| Company
Information |
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| Board
of Directors |
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| Syed
Babar Ali, Lahore |
Chairman |
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| Sohail
Wajahat Siddiqui, Karachi |
Managing Director |
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| Karl
Friedrich Hunke, Munich |
Director |
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| Asadullah
Khawaja, Karachi |
Director |
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| Rolf
Schlotfeldt, Munich |
Director |
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| Klaus
Voges, Erlangen |
Director |
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| Dr.
Amjad Waheed, Karachi |
Director |
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| Mohammad
Haleem Khan |
Company Secretary |
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| Management |
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| Sohail
Wajahat Siddiqui |
Chief Executive Officer |
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| Tertius
Vermeulen |
Chief Financial Officer |
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| Pervez Iftikhar |
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Information &
Communication, |
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|
Medical Engineering
Division |
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| Mohammad
Ilyas |
Energy Transmission &
Distribution, |
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|
Rail Transportation and
Solar Systems Division |
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| Nasim
A. Siddiqui |
Industrial Projects,
Technical Services and |
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|
Power Generation Division |
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| Sohail
Wajahat Siddiqui |
Automation and Drives
Division |
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| Left
to Right - Pervez Iftikhar; Mohammad Ilyas, Mohammad Haleem Khan, Karl
Friedrich Hunke, Rolf Schlotfeldt, Syed Babar Ali, Klaus Voges, |
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| Sohail
Wajahat Siddiqui, Asadullah Khawaja, Nasim A. Siddiqui, Tertius Vermeulen. |
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| Auditors |
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| Taseer
Hadi Khalid & Company, Karachi |
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| Legal Advisor |
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| Syed
Imran Bokhari, Lahore |
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| Registered
Office |
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| B-72,
Estate Avenue, Sindh Industrial Trading Estates |
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| Karachi-75700 |
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| Bankers |
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| ABN
Amro Bank |
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| American
Express Bank Limited |
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| Citibank NA |
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| Deutsche
Bank AG |
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| Habib
Bank Limited |
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| Hongkong
& Shanghai Banking Corporation Limited |
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| Mashreq
Bank psc |
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| Muslim
Commercial Bank Limited |
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| Societe
Generale, The French and International Bank |
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| Standard
Chartered Bank |
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| Standard
Chartered Grindlays Bank Limited |
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| Union
Bank Limited |
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| Directors'
Report |
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| Your
Directors are pleased to present their report and the audited |
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| accounts
for the year ended September 30, 2000 along with the Auditors' |
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| report. |
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| The
Board proposes to appropriate the net income of the Company as under: |
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(Rupees in thousand) |
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| Net
profit for the year after taxation |
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266,521 |
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| Unappropriated
profit brought forward |
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139 |
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------------------ |
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| Available
for appropriation |
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266,660 |
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| Appropriations |
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| Transfer
to asset replacement reserve |
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(75,000) |
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| Transfer
to revenue reserve - general |
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(74,000) |
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| Proposed
final dividend @ 150% |
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(117,395) |
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|
------------------ |
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| Unappropriated
profit carried forward |
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265 |
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|
========== |
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| The
Board thanks the Management of the Company for achieving the |
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| excellent
result in the year under review despite very unfavourable |
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| economic
environment in the country and assures its continuous support in |
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| achieving
even better results in the next years. |
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| There
has been no change in the Board of Directors during the year under |
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| review.
The present directors will retire on December 15, 2000. The election |
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| of
directors is scheduled for December 11, 2000 in an Extra-ordinary General |
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| Meeting
of the shareholders. |
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| No
material changes and commitments affecting the financial position of your |
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| Company
have occurred between the end of the financial year of the |
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| Company
to which this Balance Sheet relates and the date of the Directors' |
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| Report. |
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| The
present auditors, Messrs Taseer Hadi Khalid & Company retire and |
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| being
eligible, offer themselves for re-appointment. |
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| The
statement of pattern of the shareholding of the Company as at 30 |
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| September,
2000 is shown on page 41. |
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| The
Company is a subsidiary of Siemens Aktiengesellschaft, which is |
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| incorporated
in Germany. |
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| The
Board endorses the contents of the Management report for the year 1999/00. |
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|
Sohail Wajahat Siddiqui |
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|
S. Babar Ali |
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| Karachi;
November 17, 2000 |
Chief Executive Officer |
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Chairman |
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| Management
Report |
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| General Review |
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| During
the year under review the country continued to face macro- |
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| economic
problems. The change of government and the unabated external |
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| accounts
problems have not enhanced the investment climate in the country. |
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| This
is also reflected in the lack of industrial growth. The public sector too |
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| had
no funds to improve the infrastructure so desperately needed |
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| to
attract foreign investments. |
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| EXPORTS
remain our priority to dampen the effects of recession in
local |
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| economy.
We were successful in increasing the volume of export of |
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| goods
and services. |
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| New
orders for export exceeded US$ 17 million. Export sales of goods and |
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| services
amounted to US$ 6 million. The margins will, however, remain under |
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| pressure
until we have established ourselves in these markets. |
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| NEW
ORDERS increased by 63 % over the previous year, mainly for |
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| transformers,
power generation, transmission and distribution projects. |
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| SALES increased by 8 % only as bulk of the new orders were received in
the |
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| later
part of the year. |
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| PROFIT
BEFORE TAX improved which is attributable to exchange gains |
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| on
receivables in foreign currencies and interest recovered from a customer |
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| for
delayed payment. The gross profit, however, declined in percent of sales |
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| due
to increased cost of inputs, especially of imported raw materials |
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| and
components. Our plants remained under-utilized during the year as the |
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| receipt
of new orders for locally produced goods were received in the |
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| later
part of the year. |
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| PROFIT
AFTER TAX increased in line with profit before tax and also
due to |
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| the
fact that in the last year there was an additional charge of tax for prior
years. |
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| CAPITAL
INVESTMENT amounted to Rs. 83.7 million towards
replacements, |
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| modernization
and rationalization in plant and machinery, transport and IT |
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| equipment. |
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| We
have launched Siemens Household Appliances in Pakistan in September, |
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| 2000
and hope that these world renown products will be received well |
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| by
the consumers who demand quality in life. A dealer network will be |
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| established
in the major cities of Pakistan to cater the quality conscious |
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| customers. |
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| Our
contribution to the Exchequer during the year amounted to Rs. 659 |
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| million
as duties and taxes. |
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| We
thank all our Managers, officers and workers whose dedicated efforts |
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| with
devotion and working in a team spirit enabled the Company to achieve |
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| these
results despite difficult economic conditions. |
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| Management
Report |
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| INFORMATION
& COMMUNICATION, MEDICAL ENGINEERING DIVISION |
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| Sales |
|
Rs.538 million + 41% |
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| New Orders |
|
Rs.607 million - 39 % |
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| Information
& Communication (Public Networks) |
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| During
the year we supplied, installed and commissioned a Voice Messaging |
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| Platform
for PTCL in the major cities. This has enabled PTCL to offer the |
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| value-added
services of Voice Mail to its subscribers in addition to basic |
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| telephony
services. |
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| We
also received from PTCL an order for supply installation and integration |
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| of
a modern Internet infrastructure in all major cities which will enable PTCL |
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| to
offer Internet services to the end user. The total capacity of the installed |
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| infrastructure
is 5000 modem ports, catering to the need of approx. 50,000 |
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| Internet users. |
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| National
Telecommunication Corporation (NTC) placed an order on |
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| us
for supply and installation of its industry leading Network management |
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| platform
"NET Manager" for its Telecom Network. After installation of |
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| Net
Manager, NTC will be able to manage its overall Network centrally |
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| from Islamabad. |
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| Information
& Communication (Network Services) |
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| With
the commissioning of countrywide Internet Expansion Project, Paknet has |
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| emerged
as the largest Internet Service Provider with widest operational |
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| network
offering Internet facilities in 22 cities of Pakistan. The most modern |
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| state-of-art
technology and efficient operational support of Siemens |
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| enabled
Paknet to acquire maximum users network capacity of 50,000. |
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| Fastest
Web surfing, Advance On-line billing, web-hosting, roaming and mail |
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| facilities
have been provisioned for Dial-up Access, ISDN and shared |
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| bandwidth
users. |
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| Siemens
successfully rendered supervision of Operation & |
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| Maintenance
Services of Digital Exchanges, consisting of 2 million ports |
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| of
PTCL/NTC network throughout the country. Similarly Operation & |
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| Maintenance
Services were provided to Mobilink for their Digital Switches. |
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| Technical
services in the fields of Digital Switching, Intelligent Networks, ISDN |
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| and
Mobile Networks were provided by Pakistani engineers to international |
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| projects
of Siemens AG. |
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| A
Voice Messaging system was set up for PTCL in 10 cities. System launched |
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| in
May 2000 offers many new facilities to the users, like Message deposit & |
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| retrieval,
Fax deposit & retrieval, Future delivery of the message, Notification |
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| of
the message, group mailbox, sub mailbox etc. |
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| In
our Training Center training programmes were conducted for Digital |
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| Switches,
Internet, Voice Messaging, Access Networks for customers as well |
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| as
for our own engineers. This facility has saved huge cost of training which |
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| was
being given abroad. |
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| Private
Carriers |
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| The
market growth remained steady as the Telecom Operators such as |
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| Webnet,
Fascom, Gerry's Net, WOL, Hinet etc., continued to expand their |
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| services
and we continued to be their reliable partners. We also supplied |
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| to
various private service providers over 9000 PRI ports (each equivalent |
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| to
30 Voice Channels). |
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| In
the Data Operator market we received an order from Supernet for |
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| up-gradation
of their existing VSAT network. Our in (intelligent Network) |
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| solution
to Mobilink helped them to re-launch JAZZ prepaid card services in |
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| the
country which has already reached to over 40,000 subscribers. The growth |
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| of
subscribers has exceeded the initial projections, thereby showing the |
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| resilience
and reliability of our product. Siemens Mediation Device solution |
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| for
billing enabled Mobilink to automate their billing data collection and |
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| processing
as well as to reduce activation time for new subscribers. |
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| We
expect a continuous growth of this business in the coming years due to |
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| deregulation
of Telecom Market in the country and the boom in the Mobile |
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| Networks,
Internet Services and E-commerce. |
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| Enterprise/Business
Networks |
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| With
the introduction of HICOM300E communication server, the world of |
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| voice
and data communication have been brought one step closer. It |
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| provides
voice access not only to the traditional analogue and ISDN worlds |
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| but
also to the worlds of ATM and IP. With more than 3500 ports, it is the |
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| largest
stand alone PABX available in Pakistan. It has been a tremendous |
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|
| success
in the market with more than 8000 line units and among major |
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| customers
are Pakistan Ordnance Factories, Port Qasim Authority, Sui |
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| Southern
Gas, Baluchistan Government Secretariat, Quetta, WWF |
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| Lahore
and Allied Hospital Faisalabad The HICOM150E Office has been |
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| introduced
in the small and medium market segment providing also Call |
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| Center
and Voice Mail facilities. Furthermore, it provides connectivity |
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| to
the IP world and allows customers to migrate to the new technology |
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| without
major investment. This has been selected by organizations like |
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| AGPR,
Pakistan Telecommunication Company Limited as well as by the |
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| private
sector organizations like Clarinet Pakistan, DADEX Eternit, |
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| Reckitt
Benckiser Pakistan Limited, International School Islamabad, United |
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|
| School
Islamabad, United Refrigeration (Dawlance) etc. |
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|
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|
|
| HICOM
100E PABX system has been a success in small organizations having |
|
|
| requirement
between 20 to 100 users. More than 115 systems were installed |
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| over
a period of one year. |
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|
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| It
has proven to be very popular as an Executive/Secretary system. |
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|
|
| Siemens
Mobile Phones business has not reached to the expected level due |
|
| to
large influx of Siemens models into the country through other channels. |
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| However
to provide the back up services to Siemens Handset Users, |
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| Mobile
Phones Service Center has been setup in Karachi. This has |
|
| ensured
local repair of Siemens Mobile phones at the component level. |
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| At
present it is the highest level of repair services offered by any |
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| manufacturer
/ supplier in Pakistan. |
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| Special
Systems |
|
|
| The
main activity during the year was the implementation of a National |
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| Frequency
Management and Monitoring System. With Rohde & |
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| Schwarz
of Germany we are to install and commission using state- |
|
| of-the-art
technology and design. The progress of the project has been |
|
| satisfactory.
This will provide Pakistan Telecom Authority and Frequency |
|
| Allocation
Board the possibility to better manage the Radio Frequencies. |
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|
|
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| Another
project in hand is the UHF Extended Range ground-to-air |
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| Communication
Project for Civil Aviation Authority. This project has |
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| also
been designed by us with Rohde & Schwarz equipment. |
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|
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| Medical
Engineering |
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| Despite
unfavorable economic conditions the business volume |
|
| increased
substantially. We introduced our latest CT Somatom Plus 4 Volume |
|
| Zoom
first of its kind in Pakistan, thus maintaining our reputation of being |
|
| not
only the Market Leader but also the Trend Setter in Medical |
|
| Engineering.
In the field of Nuclear Medicine, we supplied 8 Nos. Gamma |
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| Cameras
type E-CAM Pakistan Atomic Energy Commission. |
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| Our
latest 1.5 Tesla MR1 System type SYMPHONY was supplied to |
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| Hayatabad
Medical Complex, Peshawar. An order for 7 Nos. |
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| Anaesthesia
Machines of latest models of KION family as well as Patient |
|
| Monitoring
System has been received from Pakistan Institute of Medical |
|
| Sciences,
Islamabad. |
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|
| In
the Private Sector we supplied 1.0 Tesla MR1 system HARMONY to Dr |
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| Ziauddin
Hospital, Karachi. Market requirements of REFURBISHED |
|
| EQUIPMENT
are also being met and first refurbished CT has been delivered |
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| to
Shaukat Khanum Memorial Trust Hospital, Lahore. |
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| Medical
Technical Services also increased Maintenance Contracts |
|
| and
System Installations. We are committed to provide our customers |
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| an
UPTIME of over 95 %. |
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|
| ENERGY
TRANSMISSION & DISTRIBUTION, RAIL |
|
|
| TRANSPORTATION
AND SOLAR SYSTEMS DIVISION |
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|
|
|
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| Sales |
|
1.337 million + 31% |
|
|
| New Orders |
|
3.039 million + 223 % |
|
|
|
|
|
| Transmission
and Distribution WAPDA and KESC are our major |
|
|
| customers
in this field. However, no orders for any large project are |
|
|
| expected
in the near future. Work on on-going projects progressed as per |
|
|
| schedule. |
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|
|
|
|
|
| The
WAPDA's 500 kV/220 kV Substation at Muzaffargarh was |
|
|
| commissioned.
The KESC's Fifth Power GIS Substations were |
|
|
| completed
and commissioned in this business year. The 132 kV |
|
|
| Switchyards
of Japan Power and Saba Power (IPPs) were also commissioned |
|
|
| during
this period. Work on the order received from Air Sys ATM for the |
|
|
| medium
voltage Distribution System for the new Lahore Airport Terminal is |
|
|
| progressing
satisfactorily.. |
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|
| Considering
the low domestic demand, conceded efforts were made to enter |
|
| export
market. We have been successful in our efforts and our |
|
| Principals
have sub-contracted to us a major order received by them |
|
| from
Dubai Electricity and Water Authority for the construction of two |
|
| Grid
Stations, to be completed in the next business year. |
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|
|
| Transformers |
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|
|
| The
domestic market mainly WAPDA and KESC and Industrial sector |
|
| remained
stagnant. We continued to strive for expanding the export |
|
| business.
Based on overall excellent performance in export markets, we |
|
| received
Pakistan's largest ever transformer export order from Ministry |
|
| of
Electricity & Water, Kuwait. From other export markets like Saudi Arabia, |
|
| Bangladesh
and Philippines we got orders of Distribution and Power |
|
| Transformers.
Our 20/26 MVA Power Transformers was successfully tested |
|
| for
short circuit at KEMA Laboratories. The Netherlands. For the first time in |
|
| the
history of the country, short circuit testing of a 10/13 MVA Power |
|
| Transformer
manufactured by Siemens Pakistan was conducted locally and |
|
| successfully
in High Voltage and Short Circuit Testing Laboratory, Rawat, |
|
| Islamabad. |
