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JAPAN POWER GENERATION LIMITED
Annual Reports 2002
Contents
Company Information
Notice of the Meeting
Directors 'Report
Auditors 'Report
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
Pattern of Shareholdings
Categories of Share Holders
Form of Proxy
COMPANY INFORMATION
BOARD OF DIRECTORS
Mr. ZAFAR MAHMOOD		(Chief Executive)
SHEIKH NAZAZALI		(Chairman)
Mr. HASEEB KHAN
Mr. ASAD ALI UPPAL
Mr.AKHTARALI UPPAL
Mr. FAISAL QAMAR UPPAL
Mr.SAITOYOSHIHIRO
Mr. TAKASHI KABURAGI
Mr. MUHAMMAD ALI
Mr. KHALID IMRAN
Mr. MAHMOOD AHMED
SYED MAJEEDULLAH HUSAINI
SHEIKH MAHMOOD ALI
Mrs. SAMINA ZAFAR
COMPANY SECRETARY SYED ZAFAR HAIDER
COMPANY'S AUDIT
COMMITTEE
Mr. HASEEB KHAN (Chairman)
SHEIKH MAHMOOD ALI
Mr. FAISAL QAMAR UPPAL
Mrs. SAMINA ZAFAR
AUDITORS
HYDERBHIMJI&CO.,
CHARTERED ACCOUNTANTS
&
JAVAID JALAL AMJAD & CO.,
CHARTERED ACCOUNTANTS
LEGAL ADVISORS
WALKER MARTINEAU
SALEEM
BANKERS
PRIME COMMERCIAL BANK LTD.
ASKARI COMMERCIAL BANK LTD.
ALLIED BANK OF PAKISTAN LTD.
REGISTERED OFFICE
26, PESHAWAR BLOCK, FORTRESS STADIUM,
LAHORE CANTT.
TEL: +92-42-6668156-57  FAX: +92-42-6664625
PLANT LOCATION
JIA BAGGA RAILWAY STATION
RAIWIND ROAD, DISTRICT LAHORE.
TEL: +92-42-5835864-68 FAX: +92-42-5835860
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 8"'Annual General Meeting of the members of Japan Power Generation Limited
will be held on Wednesday, the 30"' October 2002 at 11:00 a.m. at plant site located at Khan-e-Nepal Road, Near Jia
Bagga Railway Station, Raiwind Road, District Lahore to transact the following business:
1.     To confirm the minutes of the lastAnnual General Meeting held on December 31,2001.
2.      To receive, consider and adopt the audited accounts of the company for the financial year ended June
30,2002 together with the Auditors' and Directors' Reports thereon.
3.      To appoint Auditors of the company for the year ending June 30, 2003 and fix their remuneration.
4.      To transact any other business that may be placed before the meeting with the permission of the chair.
For and on behalf of
the Board of Director
Lahore:		SYEDZAFARHAIDER
Dated: October 08,2002.		(Company Secretary)
NOTES:
1.      The Share Transfer Book of the Company will remain closed from October 20,2002 to October 30.
(Both days inclusive)
2.      A member entitled to attend and vote at the above meeting may appoint another person as proxy.
Proxies, in order to be effective, must be received at 26-Peshawar Block, Fortress Stadium, Lahore
Cantt, to the Registered Office of the Company not later than 48 hours before the time of the meeting
and must be duly stamped, signed and witnessed.
3.      Members are requested to immediately notify the change in address, if any.
DIRECTORS' REPORT TO THE MEMBERS
The Directors of your company take pleasure in presenting the 8"' Annual Report and the Audited Accounts of the
company for the year ended June 30,2002.
PRINCIPALACTIVITIES
The principal activities of the company are to own, operate and maintain a thermal power house with an installed
capacity of 135 MW at Raiwind Road, Lahore and to generate power for onward supply to WAPDA.
PRESENT STATUS
The complex (plant) was operated to a high standard of technical efficiency which was achieved after regular
supervision and preventive maintenance. WAPDA recently conducted Annual Dependable Capacity Test from August
27, 2002 to August 30, 2002 and your Directors feel pleasure in informing the shareholders that the complex
successfully qualified the test by generating 116.094 MW against the net capacity requirement of 107 MW i.e. an
excess generating capacity of 9 MW.
FINANCIAL RESULTS
Turnover for the year was Rs. 1,960 million (2001:Rs. 1,508 million) and operating costs were Rs. 1,484 million (2001:
Rs. 1,087 million) resulting in a gross profit of Rs. 476 million (2001: Rs. 421 million). The average dispatch to
WAPDA in term of percentage of dependable capacity was 45.88% (2001: 30%). However, inspite of increase in
turnover during the year, the company suffered a net loss ofRs. 257 million (as compared to Rs. 187 million last year)
after deducting administrative and financial expenses.
Major reasons for continuous losses are as follows:
1.      Your company's levellized tariff was reduced to US cents 4.3 perkWh in July, 1999 against US cents 5.56 per
kWh as per original Power Purchase Agreement (PPA). Other IPPs in the same vicinity with almost the same
capacity are paid a levellized tariff of US cents 5.19 perkWh. This reduction was reluctantly agreed by your
company in the larger interest of the shareholders and lenders for the revival of the complex because WAPDA
had already issued a notice of intent to terminate the PPA. The management is soliciting a request to WAPDA
to increase the agreed tariff to a reasonable level in order to improve the operational results of the company.
2.      Presently the company is paid by WAPDA for consumption of furnace oil @ 211 gm per kWh in fuel
component of energy payment against actual consumption ranging between 218 - 222 gm per kWh. Your
directors also plan to take up this issue with WAPDA and are confident to convince WAPDA to increase the
consumption factor on merit. Positive response from WAPDA will significantly improve the operating results
and financial liquidity of the company.
1.      Similar to last year, liquidated damages ofRs 74 million invoiced by WAPDA and charged in these
accounts have also contributed to loss for the year. The management is vigorously making efforts to
arrange funds for timely purchase of HFO to avoid the levy of such damages in the future.
2.      Heavy financial cost is another factor for continuing losses. The financial expenses for the current year are Rs.
603.603 million as compared to Rs. 541.267 million for the previous year. The company is making payments
regularly to reduce its debts and financial charges will start decreasing after payment of last installment of
supplier's credit which is due on March 26,2004.
3.      Loss of revenue ofRs. 26.667 million resulted from short receipt of capacity payments from WAPDA due to
the depressing effect of the decrease in US $ exchange rate during the period from January to June 2002. This
loss may further increase ifUS$ continues to fall in the future.
4.      After the mishap of September 11, 2001 the insurance premium has almost doubled to secure the complex
under a proper insurance cover.
The above facts highlight the urgent need for improving the financial position of the company and your
management is sincerely trying to mobilize all its resources to overcome this adverse situation, and thereby
converting your company into a profitable unit in the years to come. In this regard the management is taking
the following steps to improve the overall profitability and financial health of the company.
i)      It is planned to approach WAPDA for sale of additional 9 MW, the extra generating capacity
demonstrated during annual dependable capacity test as mentioned above. In case of successful
negotiations it will increase revenues and reduce the accumulated loss resulting from decrease in
tariff rate.
ii)     The company is in the process of reconciling its balances with WAPDA on account of liquidated
damages charged by WAPDA in the First Agreement Year and your Directors are confident to
claim a refund of about Rs. 66 million, which will also reduce the accumulated loss.
iii)     The sponsoring directors are also injecting a sum of Rs.60 million in due course of time which will
improve the overall liquidity and the working capital position of the company.
By the grace of Allah and Prophet's blessing (pbuh), and with the untiring efforts of the management, your
company is expected to show much better results in the future.
CORPORATE AND FINANCIAL REPORTING FRAMEWORK
We are pleased to report that your company has taken necessary steps to comply with the provisions of the
Code of Corporate Governance issued by Securities and Exchange Commission of Pakistan.
We give below Statements on Corporate and Financial Reporting Framework.
•       The financial statements, prepared by the management of the company, present fairly its state of affairs, the
result of its operations, cash flows and changes in equity.
•       The financial statements for the year ended June 30, 2002 were presented before the Board after duly signed
by the CEO and CFO. The Board after due consideration and approved, authorized the signing of the financial
statements for issuance and circulation.
•      Proper books of account of the company have been maintained.
•       Appropriate accounting policies have been consistently applied in preparation of the financial statements and
accounting estimates are based on reasonable and prudent judgment.
•'      International Accounting Standards, as applicable in Pakistan, have been followed in preparation of the
financial statements.
•      A sound system of internal control is being effectively implemented and continuously reviewed and
monitored.
•       For the reasons stated in the relevant paras of this report, there are no significant doubt upon the company's
abi 1 ity to continue as a going concern.
•       There has been no material departure from the best practices of corporate governance, as detailed in the listing
regulations.
•       Note 9 of the annexed audited accounts relate to outstanding taxes and levies.
•       In compliance with the requirements of the Securities and Exchange Commission of Pakistan, the company
has been issuing the quarterly financial statements within the prescribed time limits.
•      The key operating and financial data of the company is as under:
Financial year ended June 30,		2002	2001	2000
Turnover	Rs. in million	1,960	1,508	374
Net loss	Rs. in million	(257)	(187)	(67)
Total assets	Rs. in million	6,895	6,961	7,058
Generation	(MWH)	430,058	281,544	70,507
Load factor	%	46	30	26
* (Operating results for the year 2000 are for the period of three and a half months only)
BOARD MEETINGS
During the year, four meetings of the Board of Directors were held. Attendance by each director was as follows:
			Attendance
Mr. Zafar Mahmood (Chief Executive)			4
Sheikh Nazaz Ali			4
Mr. Haseeb Khan			4
Mr. Akhtar Ali Uppal			4
Mr. Asad Ali Uppal			4
Mr. Faisal Qamar Uppal			4
Mr. Mahmood Ahmed (Crescent Investment Bank Ltd)			0
Sheikh Mahmood Ali			4
Mr. Muhammad Ali			2
Mr. Saito Yoshihiro			0
Mr. Takashi Kaburagi			0
Mrs. Samina Zafar			2
Mr. Khalid Imran (Nominee Prime Commercial Bank Ltd)			4
Mr. Majeed Ullah Hussaini (Nominee National Bank of Pakistan)			0
Leave of absence was granted to directors including Japanese directors who could not attend the Board meetings.
SHAREHOLDING PATTERN
A statement indicating the distribution of shareholding is attached with this report.
AUDITORS
The present Auditors' M/s. Hyder Bhimji & Company, Chartered Accountants & Javaid Jalal Amjad & Company,
Chartered Accountants retire and being eligible, offer themselves for re-appointment.
GENERAL
During the year, there were a number of changes in the Banking Sector which also affected the lending syndicate of our
project. Effective November 1,2001 National Development Finance Corporation (NDFC), a Syndicate Member and a
Lender, amalgamated with the National Bank of Pakistan (NBP) under a scheme notified by the Federal Government
Similarly Gulf Commercial Bank Ltd. another member of the lending syndicate, was taken over by PICIC and its name
changed to PICIC Commercial Bank Ltd. Similarly another lender. Prudential Commercial Bank Ltd. was taken
over by Saudi Pak Investment Co. and is now knows as Saudi Pak Commercial Bank Ltd. AL-Faysal Investment Bank
Ltd. Merged with Faysal Bank Ltd. Beside this, the share of the Indus Bank Ltd. (under liquidation) in the lender's
syndicate has been taken over by Allied Bank of Pakistan Ltd.
Your Directors are pleased to report that during the year all payments to the lenders have been made on time and in
accordance with the SFA-I and SFA-II.
ACKNOWLEDGEMENT
All the employees of the company have put in a real team work. The directors wish to thank the members, staff and
management of the company for their hard and dedicated efforts.
on behalf of
the Board of Director
Lahore: September 30,2002		CHIEFEXECUTIVE
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of Japan Power Generation Limited as at June 30, 2002 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 purpose of our audit.
It is the responsibility of the company's management to establish and maintain a system of internal control, and prepare
and present the above said statements in conformity with the approved accounting standards and the requirements of
the Companies Ordinance 1984. Our responsibi lity is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require
that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of
any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the above said statements. An audit also includes assessing the accounting policies and significant
estimates made by management, as well as, evaluating the overall presentation of the above said statements. We believe
that our audit provides a reasonable basis for our opinion and, after due verification, we report that:
a)      in our opinion, proper books of account have been kept by the company as required by the Companies
Ordinance, 1984;
b)      in our opinion:
i.      the balance sheet and profit and loss account together with the notes thereon have been drawn up
in conformity with the Companies Ordinance, 1984, and are in agreement with the books of
account and are further in accordance with accounting policies consistently applied except for the
change as mentioned in note 2.3 with which we concur;
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, 2002 and of the loss, 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: September 30, 2002
Javaid Jalal Amjad & Co.
Chartered Accountants
Hyder Bhimji & Co
Chartered Accountants
REVIEW REPORT TO THE MEMBERS ON STATEMENT OF
COMPLIANCE WITH BEST PRACTICES OF CODE OF CORPORATE
GOVERNANCE
We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate Governance
prepared by the Board of Directors of Japan Power Generation Limited to comply with the Listing Regulation No. 37
(Chapter XI) and No. 40 (Chapter XIIT) of the Karachi and Lahore Stock Exchanges respectively where the Company is
listed.
The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the
Company. Our responsibility is to review, to the extent where such compliance can be objectively verified, whether the
Statement of Compliance reflects the status of the company's compliance with the provisions of the Code of Corporate
Governance and report if it does not. A review is limited primarily to inquiries of the Company personnel and review of
various documents prepared by the company to comply with the Code.
As part of our audit of financial statements we are required to obtain an understanding of the accounting and internal
control system sufficient to plan the audit and develop an effective audit approach. We have not carried out any special
review of the internal control system to enable us to express an opinion as to whether the Board's statement on internal
control covers all controls and the effectiveness of such internal controls.
Based on our review nothing has come to our attention which causes us to believe that the Statement of Compliance
does not appropriately reflects the Company's compliance, in all material respects, with the best practices contained in
the Code of Corporate Governance effective for the period from May 2,2002 to June 30,2002.
Lahore: September 30, 2002
Javaid Jalal Amjad & Co.
Chartered Accountants
Hyder Bhimji & Co
Chartered Accountants
BALANCE SHEET AS AT JUNE 30, 2002
				2002	2001
			Note	Rupees	Rupees
Capital and reserves
Authorized capital
150,000,000 ordinary shares of Rs. 10 each				1,500,000,000	1,500,000,000
Issued, subscribed and paid-up capital
133,200,000 ordinary shares ofRs.10 each,
fully paid-up in cash				1,332,000,000	1,332,000,000
Accumulated loss				(512,181,100)	(255,131,474)
Shareholders' equity				819,818,900	1,076,868,526
Non current liabilities
Sponsors' interest free loan - unsecured				168,375,918	168,375,918
Long term loans / finances			3	5,407,941,950	4,221,590,446
Liabilities against assets
subject to finance lease			4	11,495,382	-
Deferred liabilities			5	4,405,620	3,812,900
				5,592,218,870	4,393,779,264
Current liabilities
Short term borrowings			6	146,040,486	76,607,678
Current portion of long term liabilities			7	86,091,023	820,166,402
Creditors, accrued and other liabilities			8	251,101,903	593,136,412
				483,233,412	1,489,910,492
Contingencies and commitments			9
Total equity and liabilities				6,895,271,182	6,960,558,282
The annexed notes form an integral part of these financial statements.
CHIEF FINANCIAL OFFICER
				2002	2001
			Note	Rupees	Rupees
Non Current Assets
Tangible fixed assets
Operating fixed assets			10	6,342,732,047	6,575,065,767
Capital work-in-progress			11	24,723,272	26,785,070
				6,367,455,319	6,601,850,837
Long term deposits			12	3,477,170	800,000
Deferred cost			13	35,118,788	48,105,980
				6,406,051,277	6,650,756,817
Current assets
Stores and spares			14	8,966,388	7,997,450
Stock in trade			15	47,946,433	48,702,941
Trade debts			16	350,631,710	155,666,753
Advances, deposits, prepayments
and other receivables			17	78,515,479	48,476,435
Cash and bank balances			18	3,159,895	48,957,886
				489,219,905	309,801,465
Total assets				6,895,271,182	6,960,558,282
DIRECTOR			CHIEF EXECUTIVE
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2002
				2002	2001
			Note	Rupees	Rupees
Sales			19	1,960,138,825	1,508,086,301
Cost of sales			20	(1,483,973,505)	(1,087,068,539)
Gross profit				476,165,320	421,017,762
Operating expenses
Administrative and general			21	(49,367,620)	(38,464,096)
Operating profit				426,797,700	382,553,666
Other income			22	8,207,379	7,931,784
				435,005,079	390,485,450
Financial and other charges
Financial charges			23	(603,603,580)	(541,267,420)
Other charges			24	(88,067,219)	(36,395,425)
				(691,670,799)	(577,662,845)
Net loss before taxation				(256,665,720)	(187,177,395)
Provision for taxation:
Current taxation on other income				(383,906)	(386,795)
Net loss after taxation				(257,049,626)	(187,564,190)
Accumulated loss brought forward				(255,131,474)	(67,567,284)
Accumulated Loss carried forward				(512,181,100)	(255,131,474)
Earnings per share			25	(2)	(1)
The annexed notes form an integral part of these financial statements.
CASH FLOW STATEMENT
FOR THE YEAR ENDED JUNE 30, 2002
				2002	2001
			Note	Rupees	Rupees
CASH FLOW FROM OPERATING ACTIVITIES
Net loss before taxation				(256,665,720)	(187,177,395)
Adjustment for:
Depreciation				234,321,403	230,050,399
Loss on disposal of fixed assets				1,054,186	-
Provision for gratuity				688,780	1,337,700
Amortisation of deferred cost				12,987,192	12,987,192
Financial charges				603,603,580	541,267,420
				852,665,141	785,642,711
Operating profit before working capital changes				595,989,421	598,465,316
Working capital changes
Stores and spares				(968,938)	(7,997,450)
Stock in trade				756,508	(25,325,879)
Trade debts				(194,964,957)	15,964,743
Advances, deposits, prepayments and other receivables				(30,010,126)	. 33,279,303
Creditors, accrued and other liabilities				(3,290,822)	(93,767,656)
				(228,478,335)	(77,846,939)
Cash inflow after working capital changes				367,511,086	520,618,377
Financial charges paid				(518,307,107)	(642,677,160)
Gratuity paid				(96,060)	(70,000)
Income tax paid				(412,824)	(180,026)
Net cash utilized in operating activities				(151,304,905)	(122,308,809)
CASH FLOW FROM INVESTING ACTIVITIES
Fixed capital expenditure				(44,581,774)	(43,890,838)
Proceed from fixed assets sold and scrapped				4,523,200	-
Long term deposits				(2,677,170)	-
Net cash used in investing activities				(42,735,744)	(43,890,838)
CASH FLOW FROM FINANCING ACTIVITIES
Long-term loans / finances				82,211,787	195,748,727
Finance against dishonoured bill (FADB)				-	(7,386,718)
Short term borrowings				69,432,809	(25,496,387)
Payment of lease rentals - principal amount				(3,401,938)	(2,739,680)
Net cash provided by financing activities				148,242,658	160,125,942
Net decrease in cash and cash equivalents				(45,797,991)	(6,073,705)
Cash and cash equivalents at the beginning of year				48,957,886	55,031,591
Cash and cash equivalents at the end of year (Note -18)				3,159,895	48,957,886
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED JUNE 30, 2002
		Share	Accumulated	Total
		Capital	Loss
		Rupees	Rupees	Rupees
Balance as at July 01, 2000		1,332,000,000	(67,567,284)	1,264,432,716
Net loss for the year		-	(187,564,190)	(187,564,190)
Balance as at July 1, 2001		1,332,000,000	(255,131,474)	1,076,868,526
Net loss for the year		-	(257,049,626)	(257,049,626)
Balance as at June 30, 2002		1,332,000,000	(512,181,100)	819,818,900
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 2002
1.   THE COMPANY AND ITS OPERATIONS
Japan Power Generation Limited is a public company, incorporated on September 29, 1994 under the
Companies Ordinance, 1984 and its shares are quoted on Lahore and Karachi Stock Exchanges. The principal
business of the company is to generate and supply electric power to WAPDA. The company commenced actual
commercial operations w.e.f. March 15,2000.
2.   SIGNIFICANT ACCOUNTING POLICIES
2.1   Basis of preparation
These financial statements have been prepared, in all material respects, in accordance with the
International Accounting Standards .(IAS) as applicable in Pakistan and the requirements of the
Companies Ordinance, 1984.
2.2   Accounting convention
These financial statements have been prepared under the historical cost convention modified by
capitalization of exchange differences referred to in note 2.9.
2.3   Staff retirement benefits
The company operates an unfunded gratuity scheme covering all employees with qualifying service
period of six months. Consequential to the adoption of IAS 19 (Revised 2000), Employees Benefits,
company has changed its accounting policy and provision is now made annually to cover the obligation
on the basis of actuarial valuation which is charged to income currently. Such scheme was previously
being accounted for on the basis of current entitlement of employees on termination basis. The most
recent actuarial valuation was carried out as at June 30, 2002 using the Projected Unit Credit Method.
(note-5). Actuarial gains and losses are recognized in accordance with the recommendations of the
actuary.
Had this change in the accounting policy not made, the loss for the year and the accumulated loss would
have increased by Rs. 443,060.
2.4   Taxation
The company's profit and gains from power generation are exempt from tax under clause 176 of the
Second Schedule - Part I of the Income Tax Ordinance, 1979. The company is also exempt from
minimum tax on turnover under clause 20 of Part IV of the Second Schedule to the Income Tax
Ordinance, 1979. Tax on income from sources not covered under the above clauses is determined in
accordance with the normal provisions of the Income Tax Ordinance, 1979.
2.5   Operating fixed assets and depreciation
Operating fixed assets except land are stated at cost less accumulated depreciation. Land and capital
work in progress are stated at cost. Cost of certain fixed assets comprises of historical cost and exchange
differences referred to in note 2.9.
Depreciation on operating fixed assets is charged to profit on 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 10. The net
exchange differences relating to an asset at the end of each year is amortized in equal installments over its
remaining useful life. Full year's depreciation is charged on additions during the year, while no
depreciation is charged on assets deleted during the year.
Maintenance and normal repairs are charged to income as and when incurred. Major renewals and
improvements are capitalized. Gains and losses on disposal are taken to income.
2.6   Accounting for leased Assets
Assets under finance lease are stated at lower of present value of minimum lease payments under the lease
agreement and the fair value of assets. Depreciation on these assets is charged according to company's
policy for similar assets.
The aggregate amount of obligation relating to ass^s subject to finance lease is accounted for at the net
principal liability underthe lease agreement.
Finance charges are allocated over the lease term so as to produce constant periodic rate of return on the
outstanding principal liability for each period.
2.7   Stores, spares and stock in trade
These are valued at lower of cost or net realizable value. Cost is calculated as follows:
Stores and spares		Moving average
Stock in trade
Residual fuel oil (RFO)		First in first out basis
High speed diesel (HSD)		Moving average
Lube oil		Moving average
Chemicals and other lubricants		Moving average
Items in transit are valued at cost comprising invoice values plus other charges incurred thereon.
2.8   Deferred Cost
Deferred cost consists of expenses incurred in connection with the company's formation and public issue
of shares including brokerage and commission etc. These are being amortized over a period of five years
starting from March 15,2000, the date of commercial operations.
2.9   Foreign currency translation
Foreign currency transactions are converted into Pak Rupees at the rates prevailing on the date of
transaction. Assets and liabilities in foreign currencies at the year-end are translated into Pak Rupees
at the rates of exchange prevailing at the balance sheet date.
Exchange gains and losses on translation of foreign currency loans utilized for the acquisition of fixed
assets are capitalized and incorporated in the cost of such assets. All other exchange differences are
charged to income currently.
2.10 Financial instruments
Recognition and measurement
All financial assets and liabilities are recognized at cost when the company becomes a party to the
contractual provisions of the instrument. Any gain or loss on subsequent re-measurement to fair value of
financial asset and financial liability is taken to profit and loss account on occurrence.
Offsetting of financial assets and financial liabilities
A financial asset and financial liability is offset against each other and the net amount is reported in the
balance sheet if the company has a legally enforceable right to set off the recognized amount and intends
either to settle on net basis or realize the asset and settle the liability simultaneously.
2.11 Provisions
A provision is recognized in the balance sheet when the company has a legal or constructive obligation as
a result of a past event; it is probable that an outflow ofeconom ic resources embodying econom ic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.
2.12 Contingencies and commitments
Capital commitments and contingencies, unless those are actual liabilities, are not incorporated in the
accounts.
2.13 Revenue recognition
Energy sale is recognized on transmission of electricity to WAPDA, whereas revenue on account of
Capacity Purchase Price is recognized when invoiced. Profit on bank deposits is recognized on receipt
				2002	2001
			Note	Rupees	Rupees
3. Long term loans / finances
Secured
Supplier's credit -
Plant and machinery 3.1				1,371,614,070	2,110,219,255
Syndicated loan I 3.2
Banking companies
Prime Commercial Bank Limited				44,814,000	51,110,000
National Bank of Pakistan				34,526,000	-
National Development Finance Corporation (taken over by NBP)				-	39,376,000
Askari Commercial Bank Limited				42,492,000	48,462,000
Allied Bank of Pakistan Limited				21,232,000	24,216,000
Faysal Bank Limited				35,368,000	20,170,000
PICIC Commercial Bank Limited				15,934,000	18,172,000
Saudi Pak Commercial Bank				8,846,000	-
Prudential Commercial Bank Limited (taken over by
Saudi Pak Commercial Bank Limited)				-	10,090,000
				203,212,000	211,596,000
Non-banking financial institutions
Al-Faysal Investment Bank Limited
(taken over by Faysal Bank Ltd)				-	20,170,000
Prudential Investment Bank Limited				8,846,000	10,090,000
Crescent Investment Bank Limited				7,086,000	8,082,000
				15,932,000	38,342,000
				219,144,000	249,938,000
Syndicated loan II 3.3
Banking companies
Prime Commercial Bank Limited				697,678,012	472,920,788
National Bank of Pakistan				553,790,744	-
National Development Finance Corporation (taken over by NBP)				-	244,185,170
Askari Commercial Bank Limited				664,728,404	448,262,459
Allied Bank of Pakistan Limited				606,517,960	557,660,436
Faysal Bank Limited				553,361,969	186,624,613
PICIC Commercial Bank Limited				249,368,402	168,195,758
Prudential Commercial Bank Limited (taken over by
Saudi Pak Commercial Bank Limited)				-	60,918,820
Suadi Pak Commercial Bank Limited				138,011,637	-
				3,463,457,128	2,138,768,044
Non-banking financial institutions
Al-Faysal Investment Bank Limited (taken over by Faysal Bank Ltd.)				-	186,624,613
Prudential Investment Bank Limited				54,246,557	39,034,141
Crescent Investment Bank Limited				100,525,197	75,013,231
Fidelity Investment Bank Limited				226,408,113	156,173,511
				381,179,867	456,845,496
				3,844,636,995	2,595,613,540
				2002	2001
			Note	Rupees	Rupees
Un-secured
Supplier's credit -
Power cable 3.4				55,292,857	84,693,277
				5,490,687,922	5,040,464,072
Less: Current portion shown undercurrent liabilities:
Overdue installments 3(a)				55,292,857	63,519,958
Current maturity 3(b)				27,453,115	755,353,668
				82,745,972	818,873,626
				5,407,941,950	4,221,590,446
3(a) Overdue installments
Supplier's credit - power cable				55,292,857	63,519,958
3(b) Current maturity
Syndicated loan-I				27,453,115	30,773,931
Supplier's credit - plant and machinery 3(c)				-	703,406,418
Supplier's credit - power cable				-	21,173,319
				27,453,115	755,353,668
3(c)    With the signing ofSFA II by the majority of the syndicate banks, the installments due are payable by
the syndicate and the company's current liability has been deferred till 31 -03 -2006 (Note 3.3).
3.1     Supplier's Credit-plant and machinery
The supplier's credit was obtained in Japanese Yen from Toyota Tsusho (Singapore) PTE Limited
(TTC) amounting to Japanese Yen 7,428,600,000 representing 90% of the total value of the plant and
machinery whereas 10% of the total value of Japanese Yen 825,400,000 was paid in advance as down
payment.
The credit carries an interest at the rate of 7.9% per annum and was repayable in twelve equal half
yearly instalments along with interest commencing from September 26, 1998. Financing fee of
Japanese Yen 737,535,552 was payable in twelve equal half yearly instalments commencing from
September 26,1998.
The credit facility is secured by an irrevocable Letter of Credit established by Allied Bank of
Pakistan Limited (ABL) in favour of TTC. ABL is secured by a counter guarantee issued by a
syndicate of banks (Syndicate).
With the signing ofSFA II by the majority of the syndicate members all the installments of supplier's
credit will be paid by ABL on behalf of the Syndicate and the company's long term liability shall be
shifted to the Syndicate Banks (Note 3.3).
The Syndicate's counter guarantee is secured by a first equitable mortgage/charge on all the present
and future assets including equipment, inventories and receivables of the company, personal
guarantees of the sponsoring directors and pledge of sponsors' shares.
3.2     Syndicated Facility Agreement -1
The loan was obtained under markup arrangements to fund the cost overrun of the project. In terms of
markup arrangement the company has agreed to sell certain assets to the Syndicate for Rs.
253,900,000 and simultaneously agreed to buy back the same for Rs. 540,851,046.
The loan is secured by a first charge ranking pari passu on all present and future assets including
equipment, inventories and receivables of the company and personal guarantees of the sponsoring
directors.
According to the rescheduling/restructuring agreement, signed by the company and majority of the
Syndicate banks, it shall be repayable in 20 quarterly installments commencing from May 31,2001
and carries mark up @ 12% p.a.
3.3     Syndicated Facility Agreement - II
This facility under markup arrangements was created due to non-payment by the company of
outstanding installments of supplier's credit, financing fee and interest thereon as well as the
repayment of the remaining installments (Note 3.1).
In terms of markup arrangement the company has agreed to sell certain assets to the Syndicate for so
much of Rupees that are equivalent of Japanese Yen 8,166,135,552, utilized in accordance with the
terms of repayment of supplier's credit alongwith financing fee, and simultaneously agreed to buy
back the same assets for so much of Rupees that equates principal amount plus markup @ 12% p.a.
on the principal amount outstanding plus so much of mark up that accrued on the amount outstanding
for the period from 01 -07-2000 to 31 -12-2001.
This facility is secured by a first charge ranking pari passu on all present and future assets including
equipment, inventories and receivables of the company and personal guarantees of the sponsoring
directors.
According to the rescheduling/restructuring agreement, signed by the company and majority of the
Syndicate Banks, it shall be repayable in 53 installments commencing from May 31, 2001.
Repayment of the principal sum will start from March 31,2006.
3.4    Supplier's credit - power cable
This credit was obtained from Toyota Tsusho Corporation, Japan amounting to US $ 1,315,113
against the import of power cables. It is unsecured and carries interest @ 7 % per annum with
additional interest @ 7 % on delayed payments, and was repayable in eight equal consecutive semi
annual installments commencing from July 8,1998.
				2002	2001
			Note	Rupees	Rupees
4. Liabilities against assets subject to finance lease
Opening balance				1,292,776	4,032,456
Add: Finance obtained during the year				16,949,595	-
Less: paid during the year				3,401,938	2,739,680
				14,840,433	1,292,776
Less: Current portion shown under current liabilities:
Installments due within next twelve months				3,345,051	1,292,776
				11,495,382	-
4.1     These represent finance leases entered into with leasing companies for card. The company intends to
exercise its option to purchase the asset on payment of last installment and adjustment of residual
value against lease key money.
4.2     These are secured by demand promisory notes, personal guarantees of the directors and security
deposits (note-12).
4.3     Present value of minimum lease payments has been discounted at an interest rate implicit in lease
which equates to an interest rate of approximately 19% to 28% per annum. Repayments are made
monthly with an escalable clause for delay on payment ranging from Rs. 100 per day to Rs. 1 per
thousand per day.
4.4     Repair and insurance cost shall be borne by the lessee. The lease may be terminated by the lessee at
the end of any completed year of lease after first year, whereby the lessee will be required to pay
outstanding principal plus the termination cost which may range from 0 ~ 5% of the outstanding
balance.
4.5     The future minimum lease payments under finance lease together with the present value of the
minimum lease payments are as follows:
		2002		2001
		Minimum		Minimum
		lease	Present	lease	Present
		Payments	values	payments	values
		Rupees	Rupees	Rupees	Rupees
Within one year		5,853,024	3,345,051	1,371,334	1,292,776
After one year but not more than
five years		14,617,608	11,495,382	-	-
Total minimum lease payments		20,470,632	14,840,433	1,371,334	1,292,776
Less: Amounts representing
financial charges		5,630,199	-	78,558	-
Present value of minimum lease
payments		14,840,433	14,840,433	1,292,776	1,292,776
				2002	2001
			Note	Rupees	Rupees
5 Deferred Liability
Staff Gratuity - defined benefits plan				4,405,620	3,812,900
The principal actuarial assumptions used in the valuation of this staff retirement benefit as at June 30,2002 are
as follows:
Discount rate			11% per annum
Interest rate			10%per annum
Average expected remaining working life time of employees			13 Years
The amount recognised in the balance sheet on this account as per IAS 19 is:
Present value of defined benefit obligation				3,121,650
Add: benefit payable before application of IAS 19				1,224,900
Actuarial gains not yet recognised				59,070
				4,405,620
Movement during the year in the net liability recognised in the balance sheet is:
Opening net liability				3,812,900	2,545,200
Add: expense recognised				688,780	1,337,700
				4,501,680	3,882,900
Less: paid during the year				96,060	70,000
Closing net liability				4,405,620	3,812,900
The actuarial expense recognised in the profit and loss account is:
Current service cost				924,784	-
Interest cost				233,081	-
Asset charged due to application of IAS-19				(469,085)	-
				688,780	-
5.1     Actuarial valuation was carried out for the first time, so the corresponding figures of the prior
period are not provided.
6. Short term borrowings
These borrowings are obtained from:
Name of Lenders		Sanctioned Limit	Disbursed	Amount
			2002	2001
Banking Companies		Rupees	Rupees	Rupees
Prime Commercial Bank Ltd	6.1	40,000,000	21,764,876	6,056,977
Prime Commercial Bank Ltd	6.2	90,000,000	84,805,610	-
Askari Commercial Bank Ltd		10,811,850	-	10,811,850
Allied Bank of Pakistan Ltd	6.1	39,470,000	39,470,000	44,873,000
Faysal Bank Limited		4,501,286	-	4,501,286
Gulf Commercial Bank Limited		4,054,000	-	4,054,000
Non-banking financial institutions
Al-Faysal Investment Bank Ltd.		4,501,286	-	4,501,286
Crescent Investment Bank Ltd.		1,809,279	-	1,809,279
		195,147,701	146,040,486	76,607,678
6.1     These borrowing are secured by a first charge ranking pari passu on all present and future assets
including equipment, inventories and receivables of the company and personal guarantees of the
sponsoring directors and carry mark up @ 12% per annum.
6.2     This running finance facility has been obtained to finance the purchase of heavy furnace oil (HFO)
which is secured by a lien over PAK rupee deposit, arranged from a private source and by a
hypothecation charge over movable assets of the company. It carries mark up at the effective rate of
26-27% per annum.
				2002	2001
			Note	Rupees	Rupees
7. Current portion of long-term liabilities
Long term loans / finances			3	82,745,972	818,873,626
Liabilities against assets subject to finance lease			4	3,345,051	1,292,776
				86,091,023	820,166,402
8. Creditors, accrued and other liabilities
Creditors				38,526,313	77,676,104
Accrued liabilities				4,935,276	4,351,035
Provision for sales tax				2,238,036	2,238,036
Infrastructure tax payable				4,396,800	4,396,800
Interest / mark up'payable on secured borrowings				77,601,819	303,708,996
Interest / mark up payable on unsecured borrowings				2,013,449	17,671,811
Guarantee commission payable				5,530,273	83,112,185
Penalty for delay on payment of long-term borrowings and
guarantee commission				46,956,471	66,352,708
Liquidated damages				67,077,806	6,718,301
Retention money				1,725,660	25,297,874
Other liabilities				-	1,612,562
				251,101,903	593,136,412
9.     Contingencies and commitments
Contingencies:
9.1     The company has the following contingent liabilities/assets in case ofWAPDA:
a)      A bill of Rs. 5,575,286 had been raised by WAPDA in the previous year being interest for
delayed payment of liquidated damages; the company has not only challenged the levy of
interest but also the amount of liquidated damages paid and is confident that the matter will
be settled in its favour. Accordingly, the amount of this bill has not been recognised in these
accounts. It is expected that the reconciliation will be completed by middle of November
2002
b)      Amounts totalling Rs. 4.28 million included in trade debts (note-16) are disputed by
WAPDA due to different meter reading formulae used by WAPDA and the company. The
management's contention is that formula adopted by it is most appropriate and by
discussions/negotiations its contention would prevail. Accordingly, no provision against
these debts has been recognized in these accounts.
c)      The provisions of section 9.7(e) of Power Purchase Agreement (PPA) stipulate that any late
payment of invoice amount by WAPDA shall bear markup equal to base rate (SBP Repo
rate) plus 2% per annum compounded semi-annually. Consequently the company has
claimed mark up of amounting to Rs. 9,868,119 from WAPDA during the year. The matter
is under discussions between the parties and its outcome cannot be determined with
certainty at this point of time, hence, the accrual of markup has not been recognized in these
accounts.
9.2     The Deputy Commissioner of Income Tax (DCIT) imposed certain penalties / additional tax
amounting to Rs. 8,451,549 on account ofnon / delayed payments of income tax demands for the
assessment years 1997-98 and 1998-99. The company considered these levies as arbitrary and
accordingly filed appeals at the appropriate forums; the final outcome of which is pending
adjudication. These liabilities, however, have been fully paid and incorporated in these
accounts.
Commitments:
9.3     Commitments under the letters of credit other than capital expenditure at the year end were
equivalent to Rs. 4,888,602 (2001: Nil).
9.4     Commitments of capital expenditure at end of the year amounted to Rs. Nil (2001:Rs.2,500,000).
10. Operating fixed assets
		COST				DEPRECIATION
											Book value
PARTICULARS		As at July 1,2001	Additions	Deletions	As at June 30,2002	Rate (%)	As at July 01, 2001	Deletion	Charge for the year	As at June 30,2002	as at June, 30,2002
Owned
Land - freehold		16,046,645	932,000	-	16.978,645						16,978,645
Buildings and civil works		354,564,231	10,713,994	-	365,278,225	3,3-3.57	15,113,301	-	12,083,109	27,196,410	338,081,815
Plant and machinery		6,459,551,676	31,213,248	(56,028,098)	6,434,737	3.3-3.57	274,392,704	-	214.465,555	488,858,259	5,945,878,567
Workshop equipment		16,081,888	-	-	16.081,888	10	1,608,189	-	1,608,189	3,216,378	12,865,510
Weigh Bridge		1,175,000	-	-	1,175,000	10	117,500	-	117,500	235,000	940,000
Furniture and fixtures		1,488,767	287,730	-	1,776,497	10	187,666	-	177,650	365,316	1,411
Electric installations		1,044,443	393,897	-	1,438,340	10	128,449	•	143,834	272,283	1,166,057
Office equipment		995,263	271,640	39	1,228,403	10	127,817	4,973	122,840	245,684	982,719
Computers		1,207,365	424,955	7	1,626	30	142,905	680	487,656	629,881	995,639
Tubewell		1,723,760	-	-	1.723.760	10	222,652	-	172,376	395,028	1,328,732
Railways sidings		6,650,000	-	-	6,650,000	10	858,958	.	665,000	1,523,958	5,126,042
Vehicles		4,411,881	1,809,608	2,766,615	3,544,874	20	1,135,740	714,709	708,975	1,130,006	2,414,868
Leased
Office premises		775,000	'	' -	775,000	10	100,104	-	77,500	177,604	597,396
Vehicle		4,700,000	17,456,095	4,700,000	17,456,095	20	1,214,167	1,214,167	3,491,219	3,491,219	13,964,876
Rupees 2002		6,870,415,919	63,593,167	63,540,013	6,870,469,073		295,350,152	1,934,529	234,321,403	527,737,026	6,342,732,047
Rupees 2001		6,728,213,244	142,202,675	-	6,870,416		65,299,753	-	230,050	295,350,152	6,575,065,767
10.1      Deletion to plant and machinery represents exchange gain on the foreign currency loans utilized for the acquisition of lant and machinery
(2001: exchange loss, Rs. 124,024,407)
	2002	2001
	Rupees	Rupees
10.2 The depreciation charge for the year has been allocated to:
Cost of sales	229,111,729	227,676,939
Administrative & general expenses	5,209,674	2,373,460
	234,321,403	230,050,399
10.2   The company has changed the depreciation rate on computers from 10% to 30%. The company believes that the changed rate ts more reflective of
the useful life of these assets. Had this change in accounting estimate not made, for the year and accumulated loss would have been lower by
Rs. 325,104.
10.3    The detail of fixed assets disposed of during the year are as follows:
Description		Accumulated	Book	Sale	Profit/	Mode of
	Cost	Depreciation	Value	Proceeds	(Loss)	Sale	Sold to
Vehicle
Honda Motor cycle	45,000	11,625	33,375	14,200	(19,175)	Negotiation	Mr. Muhammad Tufail, inside
							Lahori Gate Lahore
Toyota Land Cruiser	4,700,000	1,214,167	3,485,833	3,200,000	(285,833)	Negotiation	Mr. Rashid Iqbal Nadeem,
							60-H, Gulberg, Lahore.
BMW Saloon	2,721,615	703,084	2,018,531	1,300,000	(718,531)	Negotiation	Mr. M. Aqil Sultan, 106-L,
							DHA, Lahore.
	7,466,615	1,928,876	5,537,739	4,514,200	(1,023,539)
Office equipment
Fax Machine	38,500	4,937	33,527	6,000	(25,527)	Negotiation	Office Products Marketing, Lahore.
Computers
Monitor	6,800	680	6,120	3,000	(3,120)	Negotiation	Zit International, Lahore.
Rupees 2002	7,511,915	1,934,529	5,577,386	4,523,200	(1,054,186)
Rupees 2001	-	-	-	-	-
				2002	2001
Note			Note	Rupees	Rupees
11. Capital work in progress
This comprise of:
Civil work				200,697	7,229,870
Plant and machinery				23,450,075	18,482,700
Advance for land				1,072,500	1,072,500
				24,723,272	26,785,070
12. Long term deposits
Security deposits with :
Leasing companies				2,677,170	470,000
Central Depository Company (CDC)				800,000	800,000
				3,477,170	1,270,000
Less: current portion shown under assets (Note - 17)				-	470,000
				3,477,170	800,000
13. Deferred cost
Balance at July 01,				48,105,980	61,093,172
Less: Amortised during the year				12,987,192	12,987,192
				35,118,788	48,105,980
14. Stores and spares
Stores				-	184,781
Spares				8,966,388	7,812,669
				8,966,388	7,997,450
The Company does not hold any stores and spares for specific capitalization.
15. Stock in trade
Residual fuel oil (RFO)( including in transit Rs. 6,321,907 ( 2001: Nil ))				38,126,840	25,442,251
High speed diesel (HSD)				1,441,253	2,765,799
Lube oil				6,980,218	18,862,480
Chemicals and other lubricants				1,398,122	1,632,411
				47,946,433	48,702,941
16. Trade debts - considered good				350,631,710	155,666,753
These are receivable from WAPDA and are fully secured.
17. Advances, deposits, prepayments and other receivables
Advances - considered good
To directors 17.1				482,108	-
To executives 17.2				453,300	-
To employees				210,180	355,950
For expenses				761,083	104,853
To suppliers				1,148,299	466,373
To Pakistan State Oil Co. Ltd. (PSO)				31,818,104	22,814,398
Income tax				200,429	171,511
To Others				38,646	-
				35,112,549	23,913,085
				2002	2001
			Note	Rupees	Rupees
Deposits . .
Current portion of long term deposits (Note-12)				-	470,000
Letters of credit margin				2,688,971	-
Others				118,856	112,856
				2,807,827	582,856
Prepayments				29,569,959	14,972,545
Other receivables
Claims receivable				2,733,381	1,715,554
Sales tax recoverable				6,551,379	5,552,011
Others				1,740,384	1,740,384
				11,025,144	9,007,949
				78,515,479	48,476,436
17.1    The maximum aggregated amount of advances due from directors at the end of any month during the
yearwasRs, 582,108 (2001: Nil).
17.2   The maximum Aggregated amount of advances due from executives at the end of any month during
the year was Rs. 489,300 (2001: Rs. 262,500).
18. Cash and bank balances
Cash in hand				11,649	28,236
Cash with banks :
In current accounts				917,010	25,030,679
In saving accounts				2,231,236	23,898,971
				3,148,246	48,929,650
				3,159,895	48,957,886
19. Sales
Energy payments				1,098,617,341	707,636,812
Capacity payments				861,521,484	800,449,489
				1,960,138,825	1,508,086,301
20. Cost of Sales
Fuels and oils consumed				1,137,942,169	759,081,285
Salaries, wages, and benefits 20.1				6,441,727	5,399,952
Operating and maintenance fee				61,341,791	50,014,753
Stores and spares consumed				3,955,997	8,387,157
Electricity consumed in house				3,836,580	5,563,288
Communication charges				2,724,480	3,013,512
Repair and maintenance				3,912,004	2,857,941
Insurance				34,707,028	25,073,712
Depreciation 10.2				229,111,729	227,676,939
				1,483,973,505	1,087,068,539
20.1 Salaries, wages and benefits include Rs.100,843 (2001: Rs. 803,200) in respect of staff gratuity.
				2002	2001
			Note	Rupees	Rupees
21. Administration and general expenses
Directors, remuneration				11,027,571	7,200,000
Salaries, wages, and benefits			21.1	11,287,382	9,328,450
Plant security services				2,115,188	1,718,157
Staff transportation				2,861,663	3,048,756
Travelling and conveyance				2,002,596	1,238,383
Rent, rates and taxes				375,432	338,455
Postage and telegram				165,459	80,287
Electricity and utility charges				238,713	278,643
Telephone and telex				2,608,760	1,511,688
Printing and stationery				798,655	794,272
Vehicle running and maintenance				2,664,628	1,676,859
Entertainment				996,534	784,835
Newspapers and periodicals				16,551	14,603
Legal, professional and consultancy charges			21.2	3,803,482	4,906,786
Fee and subscription				274,242	292,896
Auditors' remuneration			21.3	525,000	425,000
Charity and donation			21.4	18,500	50,000
Advertisement				172,092	327,979
Insurance				636,849	204,358
Repair and maintenance				1,392,259	1,772,117
Miscellaneous				176,390	98,112
Depreciation			10.2	5,209,674	2,373,460
				49,367,620	38,464,096
21.1    Salaries, wages and benefits included Rs. 587,935 (2001: Rs. 534,500) in respect of staff
gratuity.
21.2    It includes retainership fee ofRs. 225,000 per month (2001: Rs. 225,000 per month) to Haseeb Khan
& Co. CharteredAccountants, whose proprietor is also a director in the company.
21.3   Auditors' remuneration
		2002	2002	2001	2001
		Rupees	Rupees	Rupees	Rupees
		Hyder Bhiniji	Javaid Jalal	Hyder Bhimji	Javaid Jalal
		&Co.	Amjad & Co.	&Co.	Amjad & Co
Audit fee		175,000	175,000	175,000	175,000
Review engagement		5,000	5,000	-	-
Out of pocket expenses		37,500	37,500	37,500	37,500
		262,500	262,500	212,500	212,500
21.4 None of the directors or their spouses have any interest in the funds of the donees.
22. Other Income
Interest on bank deposits				1,762,426	4,221,798
Sale of scrap / sludge				5,316,358	3,709,986
Exchange gain				1,128,595	-
				8,207,379	7,931,784
				2002	2001
			Note	Rupees	Rupees
23. Financial charges
Interest / mark up on:
Long term loans / finances				553,962,563	485,560,602
Short term borrowings				15,254,106	12,611,147
Lease finance				3,312,161	936,765
Guarantee commission				27,102,704	37,309,924
Bank fee and other charges				3,972,046	4,848,982
				603,603,580	541,267,420
24. Other Charges
Liquidated damages				74,025,841	23,408,233
Deferred cost amortized				12,987,192	12,987,192
Loss on sale of fixed assets			10.4	1,054,186	-
				88,067,219	36,395,425
25. Earnings per share
Basic
Net loss for the year				(257,049,626)	(187,564,190)
Weighted average number of ordinary shares				133,200,000	133,200,000
Basic earning per share				(2)	(1)
26. Plant capacity and actual production
Installed annual capacity in MWH				937,320	937,320
Actual energy delivered in MWH				430,058	281,544
Utilisation of available capacity depends on the load demands by WAPDA.
27.     Financial assets and liabilities
Interest rate sensitivity nosition based on the earlier of contractual renricine or maturitv date is as follow
		2002 (Rupees)
			Interest / markup bearing			Non - Interest bearing
Financial assets
		Maturity	Maturity	Sub	Maturity	Maturity	Sub
		upto one	after one	total	upto one	after one	total	Total
		Year	year		year	year
Long term deposits		.	-	-	.	3.477,170	3,477,170	3,477,170
Trade debts		350,631,710	-	350,631,710	-	-	-	350,631,710
Advances, deposits,
prepayments and other receivables		-	-	-	7,281,592	-	7,281,592	7,281,592
Cash and bank balances		2,231,236	-	2,231,236	928,659	'	928,659	3,159,895
Claims receivable not recogniseed
in the books		-	•-	-	9,868,119	-	9,868,119	9,868,119
		352,862,946	.	352,862,946	18,078,370	3,477,170	21,555,540	374,418,486
Financial liabilities
Long term loans
-Secured		27,453,115	5,407,941,950	5,435,395,065	-	. -	-	5,435,395,065
-Unsecured		55,292,857	-	55,292,857	-	-	•	55,292,857
Sponsors" loan		-	-	-	-	168,375,918	168,375,918	168,375,918
Liabilities against assets subject to
finance lease		3,345,051	11,495,382	14,840,433	-	-	-	14,840,433
Short term borrowings		146,040,486	-	146,040,486	-	-	-	146,040,486
Creditors, accrued and other liabilities		67,077,806	-	67,077,806	177,389,261	-	177,389,261	244,467,067
Letters of credit at Sight		4,888,602	-	4,888,602	.	-	-	4,888,602
Claims not acknowledged as dept
-Mark up on Liquidated damages		-	-	-	5,575	-	5,575	5,575,286
		304,097,917	5,419,437,332	5,723,535,249	182,964,547	168,375,918	351,340,465	6,074,875,714
		2001 (Rupees)
			Interest / markup bearing			Non - Interest bearing
Financial assets		Maturity	Maturity	Sub	Maturity	Maturity	Sub
		upto one	after one	total	upto one	after one	total	Total
		Year	year		year	year
Long term deposits		.	'	-	470,000	800,000	1,270,000	1,270,000
Trade debts		155,666,753	-	155,666,753	-	-	-	155,666,753
Advances, deposits,
prepayments and other receivable		-	-	-	4,038,794	-	4,038,794	4,038,794
Cash and bank balances		23,898,971	-	23,898,971	25,058,915	-	. 25,058,915	48,957,886
		179,565,724	-	179,565,724	29,567,709	800,000	30,367,709	209,933,433
Financial liabilities
Long term loans
-Secured		755,353,668	4,200,417,127	4,955,770,795	-	-	-	4,955,770,795
-Unsecured		63,519,958	21,173,319	84,693,277	-	-	-	84,693,277
Sponsors' loan		-	-	-	-	168,375,918	168,375,918	168,375,918
Liabilities against assets subject to		-	-	-	-	-	-	-
finance lease		1,292,776	-	1,292,776	-	'	-	1,292,776
Short term borrowings		76,607,678	-	76,607,678	-	-	-	76,608
Creditors, accrued and other liabilities		6,718,301	-	6,718,301	579,783,275	-	579,783,275	586,501,576
Claims not acknowledged as dept
-Mark up on Liquidated damages		-	.	-	5,575,286	-	5.575,286	5,575
		903,492,381	4,221,590,446	5,125,082,827	585,358,561	168,375,918	. 753,734,479	5,878,817,306
27.1    Interest rate risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to change in
market interest rates. The effective interest rates as at June 30, 2002 for financial instruments are
given in the relevant notes except trade debts, liquidated damages, deposits in PLS accounts for
which effective rate is eiven:
				2002	2001
Trade debts-interest charged after
25 days of the invoice delivered to				2% above Repo rate	2% above Repo rate
WAPDA
Liquidated damages-interest is payable
after 25 days of invoice received from				2% above Repo rate	2% above Repo rate
WAPDA
Deposits in PLS accounts	As determined by the bank	As determined by the bank
27.2    Credit risk and concentration of credit risk
Credit risk represents the accounting loss that would be recognized at the reporting date if counter
parties failed completely to perform as contracted. Out of total financial assets ofRs. 374,418,486
(2001: Rs. 209,933,433), the financial assets which are subject to credit risk amount to Rs.
374,406,837 (2001: Rs. 209,905,197). The company believes that it is not exposed to major
concentration of credit risk due to counter guarantees given by the Government of Pakistan in respect
ofreceivable from WAPDA.
27.3   Foreign exchange risk management
Foreign exchange risk arises mainly where receivables and payables exist due to transactions with
foreign undertakings. Out of total payables of Rs. 1,476,829,665 (2001: Rs. 2,317,103,063) in
foreign currency, the payable exposed to foreign exchange risk amounts to Rs. 79,501,406(2001:
Rs. 167,322,697).
27.4    Fair value of financial instruments
The carrying values of all financial assets and financial liabilities reflected in the financial statements
approximates to their fair values.
28. Numberofemployees				2002	2001
Number ofemp loyees at the year end was
				122	98
29.     Remuneration of Chief executive, directors and executives
The aggregated amounts charged in the accounts for the year for remuneration, including benefits to chief
executive, directors and executives of the company are as follows:
		Chief Executive		Directors		Executive
		2002	2001	2002	2001	2002	2001
No. ofpersons		1	1	4	4	20	15
Managerial remuneration		3,594,283	2,408,639	4,444,118	3,062,148	6,265,067	4,174,984
House rent		-	-	-	-	438,427	238,827
Utilities		359,428	240,864	444,411	306,212	626,509	417,497
Gratuity		-	-	-	-	703,130	513,600
Other benefits		1,110,074	665,497	1,075,257	516,640	1,471,719	1,388,891
Total-Rupees		5,063,785	3,315,000	5,963,786	3,885,500	9,504,852	6,733,799
29.1    Board meeting fee has not been paid to the directors of the company, (2001: Nil).
29.2    Company maintained vehicles are provided to the chief executive and four directors.
30     Environmental risk exposure
The company is fully complaint with the environmental regulations.
31.     Date of Authorization
These financial statements were authorized for issue on September 30,2002 in accordance with the resolution
of the Board of Directors.
31     General
31.1    Previous year's figures have been rearranged and reclassified where necessary for the purposes of
comparison. Major rearrangements/reclassifications are as under:
Note	Reclassification
	From		To		— Nature			Rupees
8	Accrued liabilities		Provision for sales tax		To separately disclose government dues.			2,238,036
8	Accrued liabilities		Infrastructure tax payable		To separately disclose government dues.			4,396,800
10	Office equipment		Computers		To make depreciation charge on			1,207,365
					computers in line with general practice.
10	Furniture and fixtures		Electronic installations		For better presentation purposes.			1,044,443
12	Security deposit with Central Depository Company - CDC		Long term deposits		To properly segregate the short and long term deposits.			800,000
17	Other receivables		Sales tax receivable		To separately disclose government dues.			5,552,011
	Advances - others		Advances to suppliers		This figure needed separate disclosure			466,373
17					in future periods.
17	Sales tax receivable fromWAPDA		Trade debts		To give more correct picture for the receivable balance.			14,771,706
20	Telephone and communication		Communication charges-(Cost of sale)		For better presentation purposes.			3,013,512
32.2 Figures in these accounts have been rounded off to the nearest rupee.
PATTERN OF SHAREHOLDINGS AS 30-06-2002
NUMBER OF	SHAREHOLDING		TOTAL
SHAREHOLDERS	FROM	TO	SHARES HELD
4	1	100	251
403	101	500	201,332
587	501	1,000	587,000
1,337	1,001	5,000	4,410,220
563	5,001	10,000	4,742,393
195	10,001	15,000	2,573,180
147	15,001	20,000	2,768,500
104	20,001	25,000	2,476,100
60	25,001	30,000	1,723,500
34	30,001	35,000	1,144,500
37	35,001	40,000	1,427,999
23	40,001	45,000	989,000
53	45,001	50,000	2,622,500
18	50,001	55,000	954,525
14	55,001	60,000	822,500
19	60,001	65,000	1,216,500
9	65,001	70,000	621,000
13	70,001	75,000	960,000
7	75,001	80,000	545,500
8	80,001	85,000	663,000
6	85,001	90,000	522,500
7	90.001	95,000	651,500
28	95,001	100,000	2,791
9	100,001	105,000	928,000
3	105,001	110,000	319,500
3	110,001	115,000	344,000
9	115,001	120,000	1,069,000
3	120,001	125,000	371,000
2	125,001	130,000	254,000
5	130,001	135,000	665,500
3	135,001	140,000	410,500
2	140,001	145,000	287,500
4	145,001	150,000	594,500
1	150,001	155,000	153,000
2	155,001	160,000	317,500
2	160,001	165,000	326,000
1	165,001	170,000	170,000
1	170.001	175,000	175,000
3	175,001	180,000	534,500
3	180,001	185,000	549,500
1	185,001	190,000	188,500
2	190,001	195,000	386,000
6	195,001	200,000	1,199,500
2	200,001	205,000	407,500
3	205,001	210,000	624,200
3	210,001	215,000	637,500
2	215,001	220,000	435,000
2	220,001	225,000	446,500
2	225,001	230,000	455,000
1	230,001	235,000	231,000
1	240,001	245,000	245,000
2	245,001	250,000	497,500
1	250,001	255,000	252,000
1	255,001	260,000	260,000
1	265.001	270,000	269,500
1	270,001	275,000	270,500
1	275,001	280,000	278,000
1	285,001	290,000	287,500
1	290,001	295,000	294,000
2	295,001	300,000	600,000
1	310,001	315,000	312,500
1	315,001	320,000	320,000
1	330,001	320,000	331,000
1	335,001	340,000	336,000
1	340.001	345,000	343,000
1	345,001	350,000	350,000
1	355,001	360,000	359,500
2	425,001	430,000	858,000
2	430,001	435,000	869,000
1	445,001	450,000	450,000
2	475,001	480,000	959,500
1	490,001	495,000	493,500
3	495,001	500,000	1,498,500
1	500,001	505,000	501,500
1	515,001	520,000	517,000
1	530,001	535,000	534,000
1	555.001	560,000	557,000
1	575,001	580,000	579,500
1	595,001	600,000	600,000
1	605,001	610,000	610,000
2	620.001	625,000	1,246,100
1	635,001	640,000	640,000
1	700,001	705,000	703,000
1	770,001	775,000	775,000
1	795,001	800,000	800,000
1	810,001	815,000	811,500
3	930,001	935,000	2,796,000
1	995,001	1,000,000	1,000,000
1	1,025,001	1,030,000	1,026,500
1	1,160,001	1,165	1,164,500
1	1,485,001	1,500,000	1,500,000
7	1,660,001	1,665,000	11,650,000
1	1,860,001	1,865,000	1,862,000
1	3,250,001	3,255,000	3,250,500
2	3,395,001	3,400,000	6,800,000
3	3,880,001	3,885,000	11,650,000
1	4,355,001	4,360,000	4,357,200
1	18,635,001	18,640,000	18,640,000
3,823			133,200,000
CATEGORIES OF SHAREHOLDERS AS AT 30-06-2002
Sr. # Shareholder's Category			Number of	Number of Shares	Percentage
			Shareholders	Held
1 Directors/Chief Executive Officer and their			11	35,128,524	26.37
spouse and minor children, (Included in individuals)
2 Executives: (Company Secretary)			1	1,000	-
3 Associated Companies, Undertakings and related parties			-	-	-
4 Public Sectors Companies & Corporations			94	11,542,600	8.67
5 NIT and ICP (Already included in Financial Inst.)			4	813,000	0.61
NIT 0
ICP 813,000