| Kohinoor Energy Limited |
|
|
|
|
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|
|
| Annual
Report 2001 |
|
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| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Directors'
Report |
|
| Auditors'
Report to the Members |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Statement
of Changes in Equity |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of Share Holding of Shares |
|
|
|
| COMPANY
INFORMATION |
|
|
| Board
of Directors |
|
| Mr.
M. Azam Saigol |
(Chairman) |
|
| Mr.
M. Naseem Saigol |
(Chief Executive) |
|
| Sheikh
Muhammad Shakeel |
|
| Mr.
Haruyoshi Murakami |
(Nominee of Tomen
Corporation, Japan) |
|
| Mr. Akira Sasaki |
|
(Nominee of Tomen
Corporation, Japan) |
|
| Mr.
Hideyuki Ohashi |
(Nominee of Tomen Power
(Singapore) Pte Limited) |
|
| Mr.
Rolf Andersson |
(Nominee of Wartsila
Finland, Oy, Finland) |
|
|
| Corporate
Secretary |
|
| Mr.
Ahmed Zia Haider |
|
|
| Management |
|
| Mr.
M. Naseem Saigol . |
Chief Executive |
|
| Mr.
Haruyoshi Murakami |
Chief Operating Officer |
|
| Mr.
Umer Masood Tariq |
Dy. Chief Operating
Officer |
|
| Mr.
Archimedes B. Donato |
General Manager Plant |
|
| Mr.
Ahmed Zia Haider |
Finance Manager |
|
|
| Auditors |
|
| A.
F. Ferguson & Co. |
|
| Chartered
Accountants |
|
|
| Bankers |
|
| Offshore
Trustee |
|
| U.S.
Bank, Corporate Trust Services, New York |
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| Onshore
Trustee |
|
| Union
Bank Limited formerly Bank of America NT&SA, Lahore |
|
| Others |
|
| Al-Faysal
Investment Bank Limited |
|
| Standard
Chartered Bank |
|
| ABN
Amro Bank |
|
| Bank
Alfalah Limited |
|
| Emirates
Bank International |
|
|
| Registered
Office |
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| 2nd
Floor, Rashid Plaza |
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| 24-D, Blue Area |
|
| Islamabad |
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| Tel:
+ 92-51-824273 |
|
|
| Lahore Office |
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| 06-Egerton
Road, Lahore |
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| Tel:
+ 92-42-6312936-37 |
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| Fax:
+92-42-6312938 |
|
|
| Project/Head
Office/Share Department |
|
| 35
KM, Link Manga Raiwind Road, |
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| Near
Tablighi Ijtama, P.O. Ruby Mills, |
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| Raiwind, Lahore. |
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| Tel.
+ 92-4951-392317-18 |
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| Fax:
+ 92-4951-393416-17 |
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|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the eighth Annual General Meeting of Shareholders of |
|
| Kohinoor
Energy Limited will be held on Thursday December 27, 2001 at 11:00 A.M. at |
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| Registered
Office, Rashid Plaza, 2nd Floor, 24-D, Blue Area, Islamabad to transact the |
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| following
business: |
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|
|
| 1.
To confirm the minutes of the Extraordinary General Meeting held on |
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| May
22, 2001. |
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|
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| 2.
To receive and adopt the Annual Audited Accounts for the year ended June 30, |
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| 2001
alongwith Directors' and Auditors' Reports thereon. |
|
|
| 3.
To appoint Auditors to hold office till the conclusion of the next Annual
General |
|
| Meeting
and to fix their remuneration. |
|
|
| 4.
Any other business with the permission of the Chain |
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|
|
|
|
By order of the Board |
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|
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| Lahore: |
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|
|
(Ahmed Zia Haider) |
|
| November
20, 2001 |
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|
Company Secretary |
|
|
| Notes: |
|
|
| 1.
The Share Transfer Books of the Company will remain closed from December |
|
| 27,
2001 to January 02, 2002 (both days inclusive). |
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|
|
| 2.
A member entitled to attend and vote at this meeting may appoint a proxy. |
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| Proxies
in order to be effective, must be received at 35-KM, Link Manga Raiwind |
|
| Road,
Near Tablighi Ijtama, P.O. Ruby Mills, Raiwind, Lahore the Head Office of |
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| the
Company not less than forty-eight hours before the time of the meeting |
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| and
must be duly stamped, signed and witnessed. |
|
|
| 3.
Members are requested to notify the Company for change in their addresses, |
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| if any. |
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|
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| DIRECTORS'
REPORT |
|
|
| The
Directors have pleasure in presenting the Annual Report together with the
Company's |
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| Audited
Annual Accounts for the year ended June 30, 2001. |
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|
| PRINCIPAL
ACTIVITIES |
|
| The
principal activities of the Company are to own, operate, and maintain a
furnace oil power |
|
| station
with a net capacity of 120 MW (Gross Capacity 131.44 MW). |
|
|
| OPERATIONS |
|
| Dispatch
during the year under review has been observed relatively low due to less
demand of |
|
| electricity
in the region. Company dispatched 116,322 MWH of electricity during the year
as |
|
| compared
to 256,818 MWH in year 2000 at the request of WAPDA translating in a load
factor of |
|
| 11%
(2000: 24%) of the total Capacity. The plant achieved a thermal efficiency
rate of 44.04% |
|
|
| Routine
and preventive maintenance programs have been completed within budget as |
|
| scheduled
to ensure long-term integrity of the plant. Quality standards are enforced at
each |
|
| stage
of Power Generation. |
|
|
| The
Company continues to maintain the maintenance contract of Plant with Wartsila
NSD |
|
| Pakistan
(Pvt.) Ltd. |
|
|
| FINANCE |
|
| In
the year under review, the Company worked in a brighter environment and
achieved its |
|
| projected
profits and operation and maintenance targets as budgeted. |
|
|
| Turnover
for the year was Rs. 1,698 million and operating costs were Rs. 724 million
resulting in a |
|
| net
profit of Rs. 503 million with an earning per share (EPS) of Rs. 2.97. |
|
|
| Company
has proved to have good working relations with WAPDA; it fulfilled all
dispatch |
|
| requirements
received from WAPDA in time. Company is also up to date in receiving all its |
|
| current
payments from WAPDA on the original tariff basis signed between the Company
and |
|
| WAPDA. |
|
|
| Under
Power Purchase Agreement, WAPDA has provided a Standby Letter of Credit to
the |
|
| Company
as security for payments. |
|
|
| The
company continues to discharge its statutory and contractual liabilities
under different |
|
| agreements
as they become due. During the year, the company repaid two trenches of the |
|
| senior
debt amounting to Rs 916 million, which were due in September 2000 and March
2001. |
|
|
| TRAINING
AND DEVELOPMENT AND COMPUTERIZATION |
|
| The
training and development of Human Resource of the Company continues to be the
priority |
|
| areas.
Executives and staff were nominated to various Technical / Management
courses. Special |
|
| emphasis
was laid on in-house training programs specially designed by the reputed
consultants |
|
| for
management, staff and workers. |
|
|
| During
the year under review company has improved its automation facilities by
updating and at |
|
| the
same time introducing new soft wares and hard wares for the efficient and
better |
|
| performance
of the Power Plant. |
|
|
| ENVIRONMENT,
HEALTH AND SAFETY MANAGEMENT |
|
| Within
the framework, the Safety Management approved several major policy
initiatives designed |
|
| to
broaden Safety Development. The overall health and safety performance of the
plant was |
|
| excellent
throughout the year. The Kohinoor Energy Limited has an ongoing proactive
approach to |
|
| safety
management. |
|
|
| No
major environmental issues were reported. The plant continues to operate
within the strict |
|
| guidelines
and limits established by the World Bank for emission and waste. |
|
|
| ISO
9000-2000 CERTIFICATION |
|
| The
Company is in the process of preparing itself for the certification of ISO
9000-2000, which is |
|
| regarding
Quality Maintenance System. |
|
|
| AUDITORS |
|
| The
present auditors Messers A.F. Ferguson & Co. Chartered Accountants retire
at the conclusion of |
|
| the
Annual General Meeting, being eligible offer themselves for reappointment. |
|
|
| ACKNOWLEDGEMENT |
|
| Relationship
with the staff, especially with the workers, remains cordial. All
achievements made |
|
| during
the period under report were only possible due to great deal of dedicated
efforts and |
|
| teamwork
by the company's staff. The Directors take this opportunity to thank all of
them for their |
|
| hard
work and commitment. Development of management and staff has a high priority
in the |
|
| Company. |
|
|
| The
Directors wish to thank the banks and shareholders for their continued
support and confidence |
|
| on
the Company. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| A
statement reflecting the pattern of shareholding as at June 30, 2001 is
attached to the Annual |
|
| Report. |
|
|
|
|
For and on behalf of the Board |
|
|
|
|
|
|
| Lahore |
|
|
M. Naseem Saigol |
|
| November
20, 2001 |
|
Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Kohinoor Energy Ltd. as at June 30,
2001 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 purposes 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 statement 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 the 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 the 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 accounts 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, 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,
2001 and of |
|
| the
profit, its cash flows and changes in equity for the year then ended; and |
|
|
| d)
in our opinion no zakat was deductible at source under the Zakat and Ushr
Ordinance, |
|
| 1980. |
|
|
|
|
| Lahore |
|
|
A.F. Ferguson & Co. |
|
| November
20, 2001 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2001 |
|
|
|
Note |
2001 |
2000 |
|
|
|
(Rupees in
thousand) |
|
|
| CAPITAL |
|
|
| Authorised |
|
|
|
| 170,000,000
(2000:140,000,000) ordinary shares |
|
1,700,000 |
1,400,000 |
|
| of Rs 10 each |
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
|
| 169,458,600
(2000:130,352,780) ordinary shares |
|
| of Rs 10 each |
|
|
1,694,586 |
1,303,528 |
|
|
| RESERVES |
|
| Reserve
for bonus shares |
|
|
-- |
391,058 |
|
| Unappropriated
profit |
|
3 |
1,323,087 |
820,140 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
3,017,673 |
2,514,726 |
|
|
|
|
| LONG
TERM LOANS - SECURED |
4 |
3,352,020 |
3,248,702 |
|
| LONG
TERM LOANS- UNSECURED |
5 |
280,462 |
262,807 |
|
| DEFERRED
UABIUTIES |
|
6 |
8,684 |
5,029 |
|
|
|
| CURRENT
UABIUTIES |
|
|
|
| Current
maturity of long term loans |
|
|
| - Secured |
|
4 |
648,293 |
526,487 |
|
| -
Unsecured |
|
5 |
151,018 |
87,603 |
|
| Creditors,
accrued and other liabilities |
7 |
401,373 |
324,359 |
|
| Provision
for taxation |
|
|
49,957 |
32,522 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,250,641 |
970,971 |
|
| CONTINGENCIES
AND COMMITMENTS |
8 |
|
|
------------------ |
------------------ |
|
|
|
7,909,480 |
7,002,235 |
|
|
========== |
========== |
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
|
| Operating
fixed assets |
|
9 |
6,008,448 |
5,486,520 |
|
| Capital
work-in-progress |
|
|
19,344 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
6,027,792 |
5,486,520 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
10 |
198,001 |
162,708 |
|
| Stock in trade |
|
11 |
157,444 |
29,623 |
|
| Trade debts |
|
12 |
262,171 |
315,915 |
|
| Advances,
deposits, prepayments and other receivables |
13 |
149,881 |
229,305 |
|
| Cash
and bank balances |
|
14 |
1,114,191 |
778,164 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,881,688 |
1,515,715 |
|
|
|
|
------------------ |
------------------ |
|
|
|
7,909,480 |
7,002,235 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes Corm an integral part of these accounts. |
|
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
Note |
2001 |
2000 |
|
|
|
(Rupees in
thousand) |
|
|
| Sales |
|
15 |
1,698,497 |
1,693,258 |
|
| Cost of sales |
|
16 |
724,217 |
806,796 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
974,280 |
886,462 |
|
| Administration
and general expenses |
17 |
58,909 |
121,123 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
915,371 |
765,339 |
|
| Other income |
|
18 |
57,313 |
53,226 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
972,684 |
818,565 |
|
| Financial
charges |
|
19 |
449,737 |
408,805 |
|
|
|
------------------ |
------------------ |
|
| Profit before tax |
|
|
522,947 |
409,760 |
|
| Provision
for taxation |
|
20 |
20,000 |
16,121 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
502,947 |
393,639 |
|
| Unappropriated
profit brought forward |
|
820,140 |
677,211 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
1,323,087 |
1,070,850 |
|
| Appropriation |
|
|
|
|
| -
Transfer to reserve for issue of bonus shares |
|
-- |
250,710 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
1,323,087 |
820,140 |
|
|
|
|
========== |
========== |
|
| Earnings
per share |
|
25 |
2.97 |
2.32 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
|
(Rupees in thousand) |
|
|
|
Reserve |
|
|
|
|
for issue |
|
Un-appro- |
|
|
|
Share |
of bonus |
Share |
priated |
|
|
|
capital |
shares |
premium |
profit |
Total |
|
|
|
|
| Balance
as on June 30, 1999 |
1,303,528 |
-- |
140,348 |
677,211 |
2,121,087 |
|
| Net
profit for the year |
-- |
-- |
-- |
393,639 |
393,639 |
|
|
|
|
|
| Appropriations: |
|
|
|
| Reserve
for issue of bonus shares |
-- |
391,058 |
(140,348) |
(250,710) |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as on June 30, 2000 |
1,303,528 |
391,058 |
-- |
820,140 |
2,514,726 |
|
|
|
|
|
| Net
profit for the year |
-- |
-- |
-- |
502,947 |
502,947 |
|
| Bonus
shares issued |
391,058 |
(391,058) |
-- |
-- |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as on June 30, 2001 |
1,694,586 |
-- |
-- |
1,323,087 |
3,017,673 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
|
|
Chief Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
Note |
2001 |
2000 |
|
|
|
(Rupees in
thousand) |
|
|
| Cash
flow from operating activities |
|
|
|
| Cash
generated from operations |
|
21 |
1,204,568 |
992,105 |
|
| Staff
gratuity paid |
|
|
(144) |
(3,036) |
|
| Financial
charges paid |
|
|
(297,642) |
(381,440) |
|
| Taxes paid |
|
|
(2,565) |
(5,913) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
904,217 |
601,716 |
|
|
|
|
|
| Cash
flow from investing activities |
|
| Fixed
capital expenditure |
|
|
(68,612) |
(44,612) |
|
| Interest/mark-up
income received |
|
|
56,349 |
68,202 |
|
| Sale
proceeds of fixed assets |
|
|
1,767 |
1,857 |
|
|
------------------ |
------------------ |
|
| Net
cash (outflow)/inflow from investing activities |
|
(10,496) |
25,447 |
|
|
|
|
|
| Cash
flow from financing activities |
|
| Long
term loans(net) |
|
|
1557,694) |
(490,907) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow)/inflow from financing activities |
|
(557,694) |
(490,907) |
|
|
|
|
------------------ |
------------------ |
|
| Net
increase in cash and cash equivalents |
|
336,027 |
136,256 |
|
| Cash
and cash equivalents at beginning of the year |
|
778,164 |
641,908 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of the year |
14 |
1,114,191 |
778,164 |
|
|
|
========== |
========== |
|
|
|
|
|
Chief Executive |
|
Director |
|
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
|
|
| The
company was incorporated on April 26, 1994 and received Certificate for |
|
| Commencement
of Business on September 14, 1994. The company is listed on all Stock |
|
| Exchanges
in Pakistan and its principal activity is power generation and supply to
WAPDA. |
|
| The
company commenced its commercial operations from June 20, 1997. |
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
|
|
| 2.1
Accounting convention |
|
|
|
| The
accounts have been prepared under the historical cost convention, modified |
|
| by
capitalization of exchange differences referred to in note 2.7. |
|
|
|
| 2.2 Taxation |
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| Profits
and gains derived by the company from electric power generation project |
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| are
exempt from tax under clause 176 of Part I of the Second Schedule to the |
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| Income
Tax Ordinance, 1979. |
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| The
company is also exempt from minimum tax on turn over under clause'20 of the |
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| part
IV of the Second Schedule to the Income Tax Ordinance, 1979. |
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| 2.3
Retirement benefits |
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| The
company operates an unapproved, unfunded gratuity scheme for all |
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| employees,
payable on cessation of employment, subject to a minimum qualifying |
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| period
of service. Provision is made annually to cover obligations under the |
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| scheme
for all employees eligible to gratuity benefits. |
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| 2.4 Fixed assets |
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| Operating
fixed assets except land are stated at cost less accumulated depreciation |
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| Land
and capital work in progress are stated at cost. Cost of certain fixed assets |
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| comprise
of historical cost, exchange differences referred to in note 2.7 and |
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| interest
etc. in note 2.8. |
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| Depreciation
on operating fixed assets is charged to profit on the straight line |
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| method
so as to write off the historical cost of an asset over its estimated useful
life |
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| at
the annual rates mentioned in note 9. The net exchange differences relating
to an |
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| asset,
at the end of each year is amortised in equal installments over its remaining |
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| useful
life. Depreciation on additions is charged from the month in which the asset |
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| is
put to use and no depreciation is charged on the asset deleted during the
year. |
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| Maintenance
and normal repairs are charged to income as and when incurred. |
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| Major
renewals and improvements are capitalized. Gains and losses on disposal of |
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| assets
are taken to profit and loss account. |
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| 2.5
Stores, spares and loose tools |
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| Stores,
spares and loose tools are valued principally at moving average cost. Items |
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| in
transit are valued at cost comprising invoice values plus other charges
incurred |
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| thereon. |
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|
