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Ibrahim Energy Limited
Annual Report 1999
Contents
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
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
Auditors
F. R. Merchant fit Co.
Chartered Accountants,
Karachi, Pakistan.
Tax Consultants
ER. Merchant & Co.
Chartered Accountants,
Karachi, Pakistan.
Information Technology Consultants
KPMG Peat Marwick
Associates (Pvt) Limited
Karachi, Pakistan.
Bankers
Pakistan Industrial Credit & Investment
Corporation Limited
A1-Baraka Islamic Bank
Emirates Bank International pjsc
Faysal Bank Limited
Muslim Commercial Bank Limited
Registered Office
Ibrahim Centre
l-A, Ahmed Block
New Garden Town
Lahore, Pakistan.
Head Office
Ibrahim Centre
15-Club Road,
Faisalabad, Pakistan.
Shares Registration Office
Ibrahim Centre
GK-7/59, Bagh-e-Zehra Street,
Kharadar,
Karachi, Pakistan.
Plant Location
38, Kilometre,
Faisalabad-Sheikhupura Road,
Tehsil Jaranwala, District
Faisalabad, Pakistan.
Notice of Meeting
Notice is hereby given that the 8th Annual General Meeting of the shareholders of the company will be held on
29-12-1999 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 ending 30-06-1999.
3. To consider and approve the declaration of Cash Dividend @ 25% as recommended by the Board of Directors.
4. To appoint Auditors for the next year 1999-2000 and to fix their remuneration. The present auditors
M/s. E R. Merchant & Co. Chartered Accountants, Karachi being eligible for appointment, offer themselves
for re-appointment.
To transact any other business with the permission of the chair.
By order of the Board
Place: Lahore. Anwarul Haque
Date: November 15, 1999 Company Secretary
Notes:
i. The share transfer books of the company shall remain closed from 21-12-1999 to 2%12-1999 (both days
inclusive) to determine the names of members entitled to receive dividend and to attend the meeting.
Transfers received in order at the Share Registration Office of the Company at Ibrahim Centre, GK 7/59,
Bagh-e-Zehra Street, Kharadar, Karachi, at the close of business on 20-12-1999 will be treated in time.
ii. A member entitled to attend and vote at the meeting may appoint another member as his/her proxy to
attend and vote on his/her behalf.
iii. The proxies, in order to be effective, must be received by the company at its Registered Office at least
48 hours before the meeting.
Directors' Report to the Shareholders
We feel pleasure in presenting before you the 8th Annual Report of the company together with Audited Accounts
for the year ended June 30, 1999.
Operating Results
The operating results of the power generation plant during the year under review is satisfactory. The electricity
generated and distributed is 150,558 Megawatt hours as compared to generation and distribution of electricity in 
the previous year was 148,015 Megawatt hours. The capacity utilization improved during the year over previous
year but it is not upto the mark. The industrial activity in the area of our power plant is low which resulted in less
demand of electricity by the end users. The periodical maintenance schedule of generators also resulted in low 
generation of electric power as the engines had to run at slow speed for some time when it was restarted after
maintenance.
Financial Results
The revenue generated from the sale of electrical energy is Rs. 466,751,925/- as against Rs. 442,537,341/- during
the previous year. The company earned a gross profit of Rs. 69.323 million during the year as compared to a gross
profit of Rs. 46.090 million during last year. Net profit also registered a sharp increase over previous year. The
comparative figures of financial results are being furnished hereunder.
Year ended Year ended
30-06-1999 30-06-1998
Rupees Rupees
Revenue generated from sale of electric energy 466,751,925 442,537,341
========== ==========
Gross profit 148,471,791 126,827,472
Administrative expenses 27,284,646 19,498,801
------------------ ------------------
Operating profit 121,187,145 107,328,671
Other income 3,081,186 2,781,596
------------------ ------------------
124,268,331 110,110,267
Financial / other charges 54,945,311 64,019,313
------------------ ------------------
Net profit for the year 69,323,020 46,090,954
Unappropriated profit brought forward 65,051 74,097
------------------ ------------------
Total profit available for appropriation 69,388,071 46,165,051
Dividend
Your directors are pleased to recommend 25% cash dividend
i.e., Rs. 2.50 per share out of profits earned during the year and
the profit has been appropriated as under:
Appropriations:
Proposed dividend @ 25% (1998: 20%) 31,250,000 25,000,000
Transferred to general reserve 38,100,000 21,100,000
------------------ ------------------
69,350,000 46,100,000
------------------ ------------------
Unappropriated profit carried forward 38,071 65,051
========== ==========
Earning per share 5.55 3.69
Future Prospects
The increase in demand of electric energy is largely depends upon the industrial growth in the area where our
power plant is located, but due to economic slump the industrial growth has come to a complete halt and resulted
in shrinkage of demand from the end users.
We hope that with the improvement in the economic conditions as a whole the revival of industrial activity will
start once again and it will also benefit the power sectors.
You will be happy to note that the mills/plant of the associated undertaking are planning to carry out some
expansion in their existing units which will ultimately increase the future demand of electric power by these units
and further improve the capacity utilization.
Year 2000 Compliance
We are pleased to report that all the computer systems of your company are fully year 2000 compliant.
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 share holding of the company is annexed.
Acknowledgments
We wish to thank our valued clients, banks & financial institutions and share holders for their continued support
and confidence on the company. The company personnel deserve appreciation for their dedication, devotion and
hard work.
On behalf of the Board
Place: Lahore. Sheikh Mukhtar Ahmed
Date: November 15, 1999 Chief Executive
Auditors' Report to the Members
We have audited the annexed Balance Sheet of Ibrahim Energy Limited, as at June 30, 1999 and the related Profit
and Loss Account and Statement of Changes in Financial Position, 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 and, after due verification thereof, we
report that:
a) in our opinion, proper books of account have been kept by the company as required by the Companies
Ordinance, 1984;
b) in our opinion:
i) the balance sheet and profit and loss account together with the notes thereon have been drawn up
in conformity with the Companies Ordinance, 1984, and 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 and the Statement of Changes in the Financial Position, together
with the notes forming part thereof, 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, 1999 and the profit and the changes in the financial position for the year then ended; and
d) Zakat deductible at source under the Zakat and Ushr Ordinance, 1980, has been deducted by the Company
and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
Place: Karachi. F. R. Merchant & Co.,
Date: November 15, 1999 Chartered Accountants
Balance Sheet as at June 30, 1999
1999 1998
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 121,000,000 82,900,000
Unappropriated profit 38,071 65,051
------------------ ------------------
246,038,071 207,965,051
Long Term Loans 4 130,842,102 173,537,102
Liabilities Against Assets
Subject to Finance Lease 5 56,417,749 96,118,965
Deferred Liabilities
Provision for gratuity 6 4,978,265 2,368,470
Current Liabilities
Current portion of long term liabilities 7 95,393,220 89,899,657
Creditors, accrued & other liabilities 8 34,513,057 30,964,199
Proposed dividend 31,250,000 25,000,000
------------------ ------------------
161,156,277 145,863,856
------------------ ------------------
599,432,464 625,853,444
========== ==========
Fixed Capital Expenditure
Operating assets 9 508,635,955 534,379,424
Long Term Deposits 8: Deferred Cost 10 24,597,540 28,919,205
Current Assets
Stores, spares & loose-tools 11 39,582,773 25,762,693
Stock of oils & lubricants 12 8,980,710 16,350,152
Trade debtors 13 8,575,922 9,415,900
Advances, deposits & other. receivables 14 2,644,990 1,768,837
Cash & bank balances 15 6,414,574 9,257,233
------------------ ------------------
66,198,969 62,554,815
------------------ ------------------
599,432,464 625,853,444
========== ==========
The annexed notes from 1 to 28 form an integral part of these accounts. 
Chief Executive Director
Profit and Loss Account
for the year ended June 30, 1999
1999 1998
Note Rupees Rupees
Sales 16 466,751,925 442,537,341
Cost of sales 17 318,280,134 315,709,869
------------------ ------------------
Gross profit 148,471,791 126,827,472
Administrative expenses 18 27,284,646 19,498,801
------------------ ------------------
Operating profit 121,187,145 107,328,671
Other income 3,081,186 2,781,596
------------------ ------------------
124,268,331 110,110,267
Other charges
Financial 20 51,296,731 60,351,996
Amortisation of deferred cost -- 428,676
Workers' profit participation fund 3,648,580 2,466,480
------------------ ------------------
54,945,311 63,247,152
------------------ ------------------
Profit Before taxation 69,323,020 46,863,115
------------------ ------------------
Taxation 21 -- --
Provision for workers' welfare fund -- 772,161
------------------ ------------------
-- 772,161
Profit after taxation 69,323,020 46,090,954
Unappropriated profit brought forward 65,051 74,097
------------------ ------------------
69,388,071 46,165,051
Appropriation
Proposed dividend @ 25% (1998: 20%) 22 31,250,000 25,000,000
Transferred to general reserve 38,100,000 21,100,000
------------------ ------------------
69,350,000 46,100,000
------------------ ------------------
Unappropriated profit carried forward 38,071 65,051
========== ==========
The annexed notes from 1 to 28 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, 1999
1999 1998
Rupees Rupees
A. Cash flow from operating activities
Profit for the year before taxation 69,323,020 46,090,954
Adjustment for depreciation 56,465,856 59,282,539
Provision for gratuity 2,877,634 1,060,550
Gratuity paid (267,839) (100,129)
(Profit)/loss on sale of fixed assets (146,763) --
Amortisation of deferred cost -- 428,676
Financial charges 51,296,731 60,351,996
------------------ ------------------
Operating profit before working capital changes 179,548,639 167,114,586
------------------ ------------------
Changes in working capital
(Increase)/decrease in current assets
Stores, spares and loose tools (13,820,080) (6,700,515)
Stock in trade 7,369,442 (2,599,505)
Trade debtors 839,978 (2,730,686)
Advances, deposits and other receivables (876,153) 10,301,305
(Decrease)/increase in current liabilities
Creditors, accrued and other liabilities 5,481,336 (1,721,226)
------------------ ------------------
(1,005,477) (3,450,627)
------------------ ------------------
Cash generated from operations 178,543,162 163,663,959
Financial charges paid (53,393,403) (57,908,346)
------------------ ------------------
Net cash (used in) / from operating activities 125,149,759 105,755,613
------------------ ------------------
B. Cash flow from investing activities
Fixed capital expenditure (31,057,544) (51,496,097)
Proceeds from disposal of fixed assets 481,920 --
Long term deposits 4,321,665 (13,631,100)
------------------ ------------------
Net cash (used in) / from investing activities (26,253,959) (65,127,197)
------------------ ------------------
C. Cash flow from financing activities
Long term loan -- 48,000,000
Repayment of tong term loans (27,031,000) (13,746,000)
Repayment of lease liability (49,871,653) (44,918,749)
Dividend paid ( 24,835,806) (25,549,715)
Increase/(decrease) in short term borrowings -- (772,396)
------------------ ------------------
Net cash (used in) / from financing activities (101,738,459) (36,986,860)
------------------ ------------------
Net increase in cash and bank balances (A+B+C) (2,842,659) 3,641,556
Cash and bank balances at the beginning of the year 9,257,233 5,615,677
------------------ ------------------
Cash and bank balances at the end of the year 6,414,574 9,257,233
------------------ ------------------
Chief Executive Director
Notes to the Accounts
for the year ended June 30, 1999
1. Status and activities
The company is limited by shares incorporated in Pakistan and its shares are quoted on stock exchanges in
Pakistan. The company is operating a Power Generation Plant at Tehsil Jaranwala District, Faisalabad.
The exclusive object for which the company is established is to generate, distribute and supply electricity.
2. Significant accounting policies
2.1 These accounts have been prepared under historical cost convention.
2.2 Foreign currency translations
Foreign currency loans have been converted into Pak rupees at the fixed rates of exchange under the
exchange risk absorption scheme of State Bank of Pakistan. Exchange risk coverage fee is capitalised
as part of cost of tangible fixed assets acquired from the proceeds of loans.
2.3 Staff retirement benefits
The company operates an unfunded gratuity scheme covering all its employees. Provision is made
annually to cover the liability under the scheme.
2.4 Taxation
Profits and gains of the company are exempt from levy of income tax under clause 176 of the Second
Schedule to the Income Tax Ordinance, 1979, therefore no provision for taxation is required.
Profits and gains of the company is also exempt from minimum tax liability under Section 80(D) of
the Income Tax Or