| Kohinoor Energy Limited |
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Directors'
Report |
|
| Auditors'
Report to the Members |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| 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 |
|
| Mrs.
Amber Saigol |
|
| Mr. Pervez Malik |
Chief Executive |
|
| Mr.
Haruyoshi Murakami |
|
(Nominee of Tomen
Corporation, Japan) |
|
| Mr.
Akira Sasaki |
|
(Nominee of Tomen
Corporation, Japan) |
|
| Mr.
Roll Anderson |
|
(Nominee of Wartsila
Diesel Oy, Finland) |
|
|
| Corporate
Secretary |
|
| Mr.
Ahmed Zia Haider |
|
|
| Management |
|
| Mr.
Pervez Malik |
|
Chief Executive |
|
| Mr.
Haruyoshi Murakami |
|
Plant Director |
|
| Mr.
Mehboob A. Mirza |
|
Plant Manager |
|
| Mr.
Ahmed Zia Haider |
|
Finance Manager |
|
|
| Auditors |
|
| A.F.
Ferguson & Co. |
|
| Chartered
Accountants |
|
|
| Bankers |
|
| Off-Shore
Trustee |
|
| US
Bank Trust National Association, New York |
|
| On-Shore
Trustee |
|
| Bank
of America NT&SA Lahore |
|
| Others |
|
| AI-Faysal
Investment Bank Limited |
|
| Emirates
Bank International |
|
| Bank
Alfalah Limited |
|
|
| Registered
office |
|
| 2nd
Floor, Rashid Plaza |
|
| 24-D,
Blue Area |
|
| Islamabad |
|
| Tel:
92-51-824273 ' |
|
|
| Head
office / Share department |
|
| 06-Egerton
Road, Lahore. |
|
| Tel:
92-42-6312936-37 |
|
| Fax:
92-42-6312938 |
|
|
| Project |
|
| 35
KM, Link Manga Raiwind Road, Lahore. |
|
| Tel:
92-1951-391284-5 |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the Sixth Annual General Meeting of Shareholders of
Kohinoor Energy |
|
| Limited
will be held on Friday 31st December 1999, at 11:00 A.M. at the Registered
Office, Rashid |
|
| Plaza,
2nd Floor, 24-D. Blue Area, Islamabad, to transact the following business |
|
|
| 1.
To confirm the minutes of the Annual General Meeting held on 26th January
1999. |
|
|
| 2.
To receive and adopt the Annual Audited Accounts for the year ended June 30,
1999 |
|
| 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 Chair. |
|
| By
order of the Board |
|
|
| Islamabad |
|
Ahmed Zia Haider |
|
| 08
December 1999 |
|
Company Secretary |
|
|
| Notes: |
|
|
| 1.
The Share Transfer Books of the Company will remain closed from 31st December
1999 to |
|
| 06th
January 2000 (both days inclusive). |
|
|
| 2.
A member entitled to attend and vote at this meeting may appoint a proxy.
Proxies in order |
|
| to
be effective, must be received at 06-Egerton Road, Lahore, the Head Office of
the |
|
| Company
not less than forty-eight hours before the time of the meeting and must be
duly |
|
| stamped,
signed and witnessed. |
|
|
| 3.
Members are requested to notify the Company for change in their addresses, if
any: |
|
|
| 4. Members of all recognized fiqas may file
with the Company their declaration ( if any ) |
|
| for
Non Deduction of zakat |
|
|
|
| DIRECTORS'
REPORT |
|
|
| The
Directors are pleased to present their annual report together with the
Company's audited |
|
| annual
accounts for the year ended June 30, 1999. |
|
|
| PRINCIPAL
ACTIVITIES |
|
|
| Company
was listed on the Stock Exchanges of Pakistan on June 30, 1996. It achieved
its commercial |
|
| operation
date on June 19, 1997, after performing testing requirements as per Power
Purchase Agreement |
|
| entered
with WAPDA and finally it achieved its Project completion date on March 3 1,
1998 as required by |
|
| the
Principal lenders (International Finance Corporation and ABN AMRO Bank.) |
|
|
| 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 |
|
|
| The
plant comprises eight 15 MW diesel engine generators and a heat recovery
system including a 6 MW |
|
| steam
turbine. The Plant was in commercial operations for the last 2 years by the
grace of God. The plant |
|
| in
general was operated to a very high standard achieving a thermal efficiency
rate of 44.75 %. The station |
|
| generated
482,152 MW of electricity at the request of WAPDA. |
|
|
| High
efficiency rates were achieved through regular maintenance, which was carried
out on all 8 units and |
|
| on
the system of steam turbine. During this period all eight (8) diesel engine
generators (DG) 8000-hrs |
|
| maintenance
was also carried out as per manufacturer's recomendations. This major
maintenance has |
|
| resulted
in increased consumption of mechanical stores. |
|
|
| FINANCE |
|
|
| Turn
Over for the year was Rs 1,834 million and operating costs were Rs. 1,076
million resulting in a net |
|
| profit
of Rs.307 million for the period with an EPS of Rs.2.36. |
|
|
| Company
has proved to have good relations with WAPDA, all the dispatch requirements
received from |
|
| WAPDA
were duly fulfilled by the Company in time. Company is also upto date in
receiving all its payments |
|
| from
WAPDA on the original tariff basis signed between The Company and WAPDA. |
|
|
| The
Company is upto date in making its debt service payments to lenders and there
stands no default in this |
|
| regard.
The company has also fulfilled its obligations under the various contracts. |
|
|
| Y2K
COMPLIANCE |
|
|
| The
Millennium Compliance has been achieved to the extent of 99 % and the
management is confident that |
|
| the
Company's internal operations will not be disrupted due to this issue. |
|
|
| DIVIDENDS |
|
|
| Directors
of your Company would like to inform you that as per the First Amended and
Restated Agree- |
|
| ment
as to certain common representations, warranties, covenants and other terms
among Kohinoor En- |
|
| ergy
Limited, International Finance Corporation and ABN AMRO Bank dated May 22
1995 as amended |
|
| and
restated September 19, 1995, Company cannot declare or pay any dividends to
its shareholders, |
|
| unless
Reserve Accounts have been funded to the extent then required under Trust and
Retention agree- |
|
| ment
and Trust and Retention agreement requirements are otherwise satisfied. |
|
|
| At
the moment the Company is not in a position to fill its Reserve Accounts due
to strict GOP policies |
|
| regarding
foreign exchange. |
|
|
| You
would appreciate that your Company has to fulfil all the requirements of its
lenders, which are in |
|
| accordance
with the signed agreements before it can declare or pay any dividends to its
shareholders. |
|
|
| Please
be assure that the Company is keen to declare dividends as soon as the
requirements attached |
|
| thereto
are fulfilled. |
|
|
| AUDITORS |
|
|
| The
Auditors, Messrs. A.F.Ferguson & Co., Chartered Accountants retire at the
conclusion of the meeting. |
|
| Being
eligible, they have offered themselves for re-appointment. |
|
|
| DIRECTORS |
|
|
| Since
the last Annual General Meeting Mr. Tore Bjorkman (nominee of Wartsila Diesel
Oy, Finland) and Mr. |
|
| Koichi
Atsuta (nominee of Tomen Corporation, Japan) have resigned and in their
places Mr. Rolf Andersson |
|
| and
Mr. Akira Sasaki have been appointed as nominee directors of Wartsila Diesel
Oy, Finland and Tomen |
|
| Corporation,
Japan respectively. |
|
|
| The
Board of Directors wishes to record its appreciation for the valuable
services rendered by the |
|
| retiring
Directors and extends its warm welcome to the incoming Directors. |
|
|
| ACKNOWLEDGMENT |
|
|
| The
Directors wish to thank all the Executives, Officers and staff members for
their efforts and hard work |
|
| rendered
for successful operation and maintenance of the power generation project and
hope the team |
|
| spirit
will continue for successful running of the project. |
|
|
| Your
Directors wish to place on record their thanks to the Bankers of the Company
who have played a vital |
|
| role
in the progress of the Company. |
|
|
| PATTERN
OF SHAREHOLDING |
|
|
| A
statement reflecting the pattern of shareholding as at June 30, 1999 is
attached to the Annual Report. |
|
| For
and on the behalf of the Board |
|
|
|
Lahore |
|
| Chief
Executive |
|
December 08, 1999 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Kohinoor Energy Limited as at June
30,1999 and profit and |
|
| loss
account and cash flow statement for the year then ended together with the
notes forming part thereof |
|
| 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 and, after due
verification thereof, we report that: |
|
|
| (a)
to our opinion, proper books of account have been kept by the company as
required by the Com- |
|
| panies
Ordinance, 1984; |
|
|
| 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. |
|
|
| ©
In our opinion and to the best of our information and according to the
explanations given to us, the |
|
| balance
sheet and profit and loss account and the cash flow statement, 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
company's affairs as |
|
| at
June 30 1999, and the profit and the cash flow for the year then ended; and |
|
|
| (d)
In our opinion, no zakat was deductable at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| Lahore |
|
A.F. Ferguson &, Co. |
|
| December
08,1999 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
Note |
(Rupees in thousand) |
|
|
| CAPITAL |
|
|
| Authorised |
|
| 140,000,000
ordinary shares of Rs 10 each |
|
1,400,000 |
1,400,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
|
| 130,352,780
(1997: 130,352,780) ordinary shares of Rs 10 each |
|
1,303,528 |
1,303,528 |
|
| issued
for cash |
|
| Reserves
- Share premium |
|
140,348 |
140,348 |
|
| Unappropriated
profit |
|
3 |
677,211 |
369,762 |
|
|
|
---------- |
---------- |
|
|
|
2,121,087 |
1,813,638 |
|
|
|
|
| LONG
TERM LOANS - SECURED |
|
4 |
3,746,315 |
3,818,046 |
|
| LONG
TERM LOANS - UNSECURED |
|
5 |
295,571 |
295,463 |
|
|
| DEFERRED
LIABILITIES |
|
6 |
5,899 |
1,114 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
| Current
maturity of long term loans |
|
| - Secured |
|
4 |
522,460 |
409,269 |
|
| Unsecured |
|
5 |
52,160 |
15,551 |
|
| Creditors,
accrued and other liabilities |
|
7 |
314,686 |
342,940 |
|
| Provision
for taxation |
|
19,000 |
5,808 |
|
|
---------- |
---------- |
|
|
908,306 |
773,568 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
8 |
|
|
|
---------- |
---------- |
|
|
7,077,178 |
6,701,829 |
|
|
========== |
========== |
|
| FIXED
CAPITAL EXPENDITURE |
|
| Operating
fixed assets |
|
9 |
5,732,977 |
5,527,738 |
|
| CURRENT
ASSETS |
|
|
|
|
|
|
|
|
| Stores,
spares and loose tools |
|
10 |
152,499 |
153,422 |
|
| Stock in trade |
|
11 |
129,859 |
100,464 |
|
| Trade debts |
|
12 |
248,637 |
245,152 |
|
| Advances,
deposits, prepayments and other receivables |
13 |
171,298 |
182,230 |
|
| Cash
and bank balance |
|
14 |
641,908 |
492,823 |
|
|
---------- |
---------- |
|
|
1,344,201 |
1,174,091 |
|
|
---------- |
---------- |
|
|
7,077,178 |
6,701,829 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Director |
|
Chief Executive |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
|
Note |
(Rupees in thousand) |
|
|
| Sales |
|
15 |
1,834,192 |
1,833,627 |
|
| Cost of sales |
|
16 |
1,076,213 |
1,013,319 |
|
|
|
---------- |
---------- |
|
| Gross profit |
|
|
757,979 |
820,308 |
|
| Administration
and general expenses |
|
17 |
26,160 |
24,119 |
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
731,819 |
796,189 |
|
| Other income |
|
18 |
52,020 |
21,390 |
|
|
|
---------- |
---------- |
|
|
|
783,839 |
817,579 |
|
| Financial
charges |
|
19 |
458,559 |
449,514 |
|
|
---------- |
---------- |
|
| Profit
before tax |
|
325,280 |
368,065 |
|
| Provision
for taxation |
|
20 |
17,831 |
11,980 |
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
307,449 |
356,085 |
|
| Accumulated
profit brought forward |
|
369,762 |
13,677 |
|
|
---------- |
---------- |
|
| Accumulated
profit carried forward |
|
677,211 |
369,762 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Chief
Executive |
|
Director |
|
|
|
| CASH
FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
Note |
(Rupees in thousand) |
|
|
| Cash
flow from operating activities |
|
|
| Cash
generated from operations |
|
21 |
920,423 |
803,571 |
|
| Financial
charges paid |
|
(414,845) |
(388,807) |
|
| Taxes paid |
|
(4,639) |
(15,304) |
|
|
---------- |
---------- |
|
| Net
cash inflow/(outflow) from operations |
|
500,939 |
399,460 |
|
| Cash
flow from investing activities |
|
|
|
| Fixed
capital expenditure |
|
(480,283) |
(614,565) |
|
| Interest/mark-up
income received |
|
46,818 |
13,143 |
|
| Sale
proceeds of fixed assets |
|
3,434 |
-- |
|
|
---------- |
---------- |
|
| Net
cash outflow from investing activities |
|
(430,031) |
(601,422) |
|
| Cash
flow from financing activities |
|
| Long
term loans |
|
781,771 |
606,439 |
|
| Net
cash inflow from financing activities |
|
78,177 |
606,439 |
|
|
---------- |
---------- |
|
| Net
increase/(decrease) in cash and cash equivalents |
|
149,085 |
404,477 |
|
| Cash
and cash equivalents at beginning of the year |
|
492,823 |
88,346 |
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at the end of the year 14 |
|
641,908 |
492,623 |
|
|
========== |
========== |
|
| Chief
Executive |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
|
| The
company was incorporated on April 26, 1994 and received Certificate for
Commencement of Business |
|
| on
September14,1994 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
capitalisation of |
|
| exchange
differences referred to in note 27. |
|
|
| 2.2 Taxation |
|
| Profit
and gains derived by the company from electric power generation project are
exempt from tax |
|
| under
clause 176 of the Second Schedule to the Income Tax Ordinance, 1979. |
|
|
| The
company is also exempt from minimum tax on turn over under clause 20 of the
Part IV of Second |
|
| Schedule
to the Income Tax Ordinance 1979. |
|
|
| 2.3
Retirement benefits |
|
|
| The
company operates an unapproved unfunded gratuity scheme for all employees,
payable on cessa- |
|
| tion
of employment, subject to a minimum qualifying period of service. Provision
is made annually to |
|
| cover
obligations under the scheme for all employees eligible to gratuity benefits. |
|
|
|
| 2.4
Fixed assets |
|
|
| 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 2.7 and interest etc. in note 2.8. |
|
|
| 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 9. The net |
|
| exchange
differences relating to an asset, at the end of each year is amortised in
equal instalments 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 capitalised Gains and losses on disposal of assets are taken to profit
and loss ac- |
|
| count. |
|
|
| 2.5
Stores, spares and loose tools |
|
| Stores,
spare and loose tools are valued principally at moving average cost. Items in
transit are valued |
|
| at
cost comprising invoice values plus other charges incurred thereon. |
|
|
| 2.6
Stock in trade |
|
| Raw
materials except furnace oil are valued at lower of moving average cost and
net realisable value. |
|
| Furnace
oil is valued at lower of FIFO cost and net realisable value. |
|
|
| 2.7
Foreign currencies |
|
| Assets
and liabilities in foreign currencies are translated into Pak Rupees at
exchange rates prevailing at the |
|
| balance
sheet date. Exchange differences on loans utilised for the acquisition of
plant and machinery are |
|
| capitalised |
|
|
| 2.8
Financial and other charges |
|
| Financial
and other charges on long term loans are capitalised upto the date of
commissioning of the |
|
| respective
plant and machinery, acquired out of the proceeds of such long term loans.
All other financial |
|
| and
other charges are charged to income. |
|
|
| 2.9
Revenue recognition |
|
| Revenue
on account of energy is recognised on transmission of electricity to WAPDA,
whereas on account |
|
| of
capacity is recognised when due. Profit on deposits with onshore banks is
recognised on a time proportion |
|
| basis
taking into account the amounts outstanding and the rates applicable thereon,
whereas profit on |
|
| deposits
with offshore bank is recognised on receipt basis. |
|
|
| 3.
In accordance with the terms of agreement between the company and the lenders
of long terms loans, |
|
| there
are certain restrictions on distribution of dividends by the company. |
|
|
| 4. LONG TERM LOANS - SECURED |
|
| These
are composed of |
|
|
|
Rate of |
No of equal |
|
|
|
Foreign currency balance |
Rupees equivalent interest |
Interest |
Half yearly |
Interest |
| Lender |
|
Currency |
1999 |
1998 |
1999 |
1998 |
per annum |
instalments |
payable |
|
|
(Dollars in thousand) |
(Rupees in thousand) |
|
| IFC |
|
| Loan A |
|
US $ |
23,750 |
25.00 |
1,232,625 |
1,160,500 |
1125% |
19ending |
Half yearly |
|
|
|
|
Sep, 2008 |
|
| IFC |
|
|
|
|
|
| Loan B |
|
US S |
30,500 |
34.57 |
1,582,950 |
1,604,585 |
Libor + 2.5% |
15ending |
Half yearly |
|
|
|
|
Sep, 2006 |
|
| ABN
AMRO Bank |
|
|
|
|
| Loan C |
|
US$ |
28,000 |
31,500 |
1,453,200 |
1,462,230 |
745% |
16ending |
Half yearly |
|
|
---------- |
---------- |
---------- |
---------- |
|
March, 2007 |
|
|
|
82,250 |
91,067 |
4,268,775 |
4,227.32 |
|
| Less
Current maturity |
|
10,067 |
8,817 |
522,460 |
409,269 |
|
|
|
---------- |
---------- |
---------- |
---------- |
|
|
|
72,183 |
82,250 |
3,746,315 |
3,818,046 |
|
|
========== |
========== |
========== |
========== |
|
| Security |
|
| These
loans are secured by a registered mortgage on the company's freehold land and
building, a first charge |
|
| on
present and future moveable assets including plant and machinery, equipment
and motor vehicles and a |
|
| floating
charge on the company's present and future current assets including stock in
trade, stores and spares, |
|
| trade
debts and other receivables. |
|
|
| 5. Long term loans - unsecured |
|
| This
represents a loan amount of US $ 6.7 million from Tomen Corporation of the
total facility available of US $ 9 |
|
| million
availed for meeting loan repayments. |
|
|
|
Rate of |
No of equal |
|
|
|
Foreign currency balance |
Rupees equivalent interest |
Interest |
Half yearly |
Interest |
| Lender |
|
Currency |
1999 |
1998 |
1999 |
1998 |
per annum |
instalments |
payable |
|
|
(Dollars in thousand) |
(Rupees in thousand) |
|
| Tomen
Corporation |
US $ |
6,700 |
6,700 |
347,731 |
311,014 |
Libor + 5% |
20ending |
Half yearly |
| Less: Current |
|
Sep, 2008 |
|
| maturity
- note 5 1 |
1,005 |
335 |
52,160 |
15,551 |
|
|
---------- |
---------- |
---------- |
---------- |
|
|
5,695 |
6,365 |
295,571 |
295,463 |
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
| 5.1
Current maturity includes overdue i |
