| Japan Power Generation Limited |
|
|
|
|
|
|
(Annual Report 1996) |
|
|
|
| CONTENTS |
|
|
| COMPANY
INFORMATION |
3 |
|
| NOTICE
OF MEETING |
4 |
|
| DIRECTORS'
REPORT |
5 |
|
| AUDITORS'
REPORT |
7 |
|
| BALANCE SHEET |
|
8 |
|
| CASH
FLOW STATEMENT |
9 |
|
| NOTES
TO THE ACCOUNTS |
10 |
|
| PATTERN
OF SHAREHOLDING |
14 |
|
| PROXY FORM |
|
|
|
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
|
| MR.
ZAFAR MAHMOOD (Chief Executive) |
|
| MR.
HASEEB KHAN |
|
| MR.
TAKASHI KABURAGI |
|
| MR.
SAITO YOSHIHIRO |
|
| MR.
AKHTAR ALl UPPAL |
|
| MR.
ASAD ALl UPPAL |
|
| MR.
FAISAL QAMMAR UPPAL |
|
| SHFIKH
NIZAR ALl |
|
| SHEIKH
NIZAZ ALl |
|
| SHEIKH
MAHMOOD ALl |
|
| MOHAMMAD ALl |
|
| MS.
SAMINA ZAFAR |
|
|
| COMPANY
SECRETARY |
|
| SYED ZAFAR HAlDER |
|
|
|
| AUDITORS |
|
| COOPERS
& LYBRAND |
|
| JAVAID
IQBAL & CO. |
|
|
|
| LEGAL
ADVISORS |
|
| WALKER
MARTINEAU & SALEEM SAHGAL |
|
| SYED
RASHID RAHIM |
|
|
| BANKERS
OF THE COMPANY |
|
| PRIME
COMMERCIAL BANK LTD. |
|
| ASKARI
COMMERCIAL BANK LTD. |
|
| ALLIED
BANK OF PAKISTAN LTD. |
|
| FAYSAL
BANK LTD. |
|
| AL-FAYSAL
INVESTMENT BANK LTD. |
|
|
|
| REGISTERED
OFFICE |
|
| 26,
PESHAWAR BLOCK. |
|
| FORTRESS
STADIUM. |
|
| LAHORE-CANTT |
|
|
|
| PLANT |
|
| JIA
BAGGA RAILWAY STATION, |
|
| RAIWAND
ROAD, DISTRICT LAHORE. |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
| Notice
is hereby given that the 2nd Annual General Meeting of the Members of the
Company will be held at |
|
| 11.00
A.M. on Monday the 30th December 1996 at 131-A, Tufail Road, Lahore Cantt. to
transact the following |
|
| business: |
|
|
|
| 1.
To confirm the minutes of last Extra Ordinary General Meeting held on
February 22, 1996. |
|
|
| 2.
To receive, consider and adopt the audited accounts of the Company for the
financial year ended |
|
| June
30, 1996 together with the Auditors' and Directors' Reports thereon. |
|
|
|
|
| 3.
To appoint Auditors for the financial year, 1996-97 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 Directors. |
|
|
|
| Dated:
8th December, 1996. |
|
(ZAFAR HAlDER) |
|
|
|
Company Secretary |
|
|
| Note: |
|
|
| The
Share Transfer Books of the Company will remain closed from December 22,
1996. to December 31 st, |
|
| 1996
(both days inclusive). |
|
|
| i)
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,
the registered office of the Company not later than forty-eight hours before
the time for holding |
|
| the
meeting and must be duly stamped, signed and witnessed. |
|
|
| ii)
Members are requested to immediately notify the change in address, if any. |
|
|
|
| DIRECTORS'
REPORT |
|
| Your
Directors feel an immense pleasure in presenting the 2nd Annual Report and
the Audited Accounts for the year |
|
| ended
June 30, 1996. |
|
|
| PRINCIPAL
OBJECTIVES |
|
| The
principal objectives of the company are to design, construct, own and operate
a 135 MW oil fired power station |
| in Pakistan. |
|
|
|
| ACHIEVEMENTS
OF THE YEAR |
|
| The
year under review has seen very hectic efforts to achieve very pivotal
targets on the front of finance and |
|
| construction. |
|
|
| Financial: |
|
| 23-11-1995 |
Placement of the off
shore shares floatation. |
|
| 24-01-1996 |
Financial closure
achieved. |
|
| 08-04-1996 |
Underwriting agreements
for public floatation of shares were completed. |
|
| 08-04-1996 |
Placement of local shares
floatation. |
|
| 30-05-1996 |
Letter of Credit was
established for import of 24 sets of diesel generators alongwith |
|
|
auxiliaries. |
|
|
| Construction: |
|
| 25-09-1995 |
Engineering, Procurement
and Construction (EPC). Contract was signed. |
|
|
| CONSTRUCTION
PROGRESS |
|
| Almost
90% of the civil engineering design and about 35% of the civil construction
works have been completed. |
|
| Remaining
civil work is likely to be completed by May, 1997. |
|
|
| Complete
blue prints of plant mechanical design done by Mitsubishi and its associates
in Japan have been received. |
|
| 90%
of design and procurement work to be done locally has been completed. Local
design and procurement work |
|
| represents
less than 5% of the total plant. |
|
|
| Entire
designing of the electrical work to be supplied by Mitsubishi Heavy
Industries has been completed and |
|
| received. |
|
|
| Work
of mechanical erection has also been embarked upon. |
|
|
| Civil
works of the 11/132 KV step-up grid station has been started and necessary
Letter of Credit has been |
|
| established
in favour of Siemens Germany. |
|
|
|
| SHIPMENTS: |
|
| Letter
of Credit for the supply of plant comprising 24 power generating sets of 5.65
MW each with an installed |
|
| capacity
of 135.6 MW (which can be considered as available net capacity of 120 MW )
has been established in |
|
| favour
of Toyota Tsusho Corporation through Allied Bank of Pakistan. Out of total 8
major shipments, spread over a |
| period
of 9 months commencing from 31st July, 1996 to 31st March, 1997, 4 number of
shipments, as per schedule, |
|
| have
been effected. First major shipment comprising 6 number engines and
auxiliaries weighing about 730 tons has |
|
| been
safely stored at site. Remaining shipment No.2 and 3 having 3 number of
engines are under custom clearance |
|
| at
Karachi port and will soon be transported to site. 4th shipment comprising 3
number of engines and auxiliaries |
|
| dispatched
from Japan is in the high seas and is expected to reach Karachi in the
beginning of December, 1996. |
|
| The
consignments so far shipped represent 50% of the entire plant and equipment
to be supplied by Mitsubishi |
|
| Heavy
Industries through Toyota Tsusho Corporation. |
|
|
| The
activities undertaken are well within the schedule worked out together with
Mitsubishi for the timely |
|
| implementation
of the project. |
|
|
| STAFF |
|
| A
team of professionals has been formed for the successful and timely
implementation of the project. The team shall |
| further
strengthen itself by inducting more professionals at an appropriate time. |
|
|
| AUDITORS |
|
| Retiring
Auditors M/s Coopers & Lybrand and Javaid Iqbal & Co., Chartered
Accountants, have offered themselves |
|
| for
re-appointment. |
|
|
| SHARE
HOLDING PATTERN |
|
| Statement
reflecting the pattern of share holding is attached to the Annual Report. |
|
|
|
|
BY ORDER OF THE BOARD |
|
|
| Date:
02-12-1996 |
CHIEF EXECUTIVE |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| We
have audited the annexed balance sheet of Japan Power Generation Limited for
the year ended June 30, |
|
| 1996
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 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,
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, 1996; and |
|
|
| d)
In our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| Coopers
& Lybrand |
|
Javaid Iqbal & Co. |
|
| Chartered
Accountants |
|
Chartered Accountants |
|
|
| Lahore
: December 2, 1996. |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1996 |
|
|
|
|
|
1996 |
1995 |
|
|
|
Note |
Rupees |
Rupees |
|
| FIXED
CAPITAL EXPENDITURE |
|
|
| Fixed assets |
|
3 |
22,627,520 |
19,018,455 |
|
| Capital
work in progress |
|
4 |
15,868,000 |
135,521 |
|
| Pre-operational
cost |
|
5 |
20,149,804 |
7,766,830 |
|
|
|
|
---------- |
---------- |
|
|
|
|
58,645,324 |
26,920,806 |
|
|
|
|
|
|
| Deferred cost |
|
|
6 |
44,587,657 |
36,180 |
|
| Current
assets |
|
|
|
| Advances,
deposits and prepayments |
7 |
556,795,027 |
325,593,525 |
|
| Cash
and bank balances |
|
8 |
461,221,703 |
46,641,991 |
|
|
---------- |
---------- |
|
|
|
1,018,016,730 |
372,235,516 |
|
|
|
---------- |
---------- |
|
|
|
1,121,249,711 |
399,192,502 |
|
|
|
========== |
========== |
|
| SHARE CAPITAL |
|
|
| Authorized |
|
| 150,000,000
(1995-1,000.000) ordinary |
|
|
|
| shares
of Rs.10/- each |
|
1,500,000,000 |
10,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid- up |
|
| 67,013,000
(1995- 100,000)ordinary shares |
|
| of
Rs.10/- each fully paid in cash |
|
670,130,000 |
1,000,000 |
|
| Share
application money |
|
|
450,488,200 |
381,701,052 |
|
|
|
|
| Current
liabilities |
|
| Short
term borrowings |
|
9 |
- |
15,295,643 |
|
| Creditors,
accrued and other liabilities |
10 |
631,511 |
1,195,807 |
|
|
---------- |
---------- |
|
|
631,511 |
16,491,450 |
|
|
| Contingencies
and commitments |
11 |
- |
- |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
1,121,249,711 |
399,192,502 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 1996 |
|
|
1996 |
1995 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Working
capital changes: |
|
|
|
| (Increase)/decrease
in current assets |
|
(231,201,502 |
(325,593,525) |
|
| Advances,
deposits and prepayments |
|
|
|
|
|
|
| Increase/(decrease)
in current liabilities |
|
|
|
| Creditors,
accrued and other liabilities |
|
(564,296 |
1,195,807 |
|
|
---------- |
---------- |
|
|
|
(231,765,798) |
(324,397,718) |
|
|
|
|
| Fixed
capital expenditure |
|
-31,724,518 |
(26,920,806) |
|
| Deferred cost |
|
|
(44,551,477) |
(36,180) |
|
|
|
---------- |
---------- |
|
|
|
(76,275,995) |
(26,956,986) |
|
| Net
cash outflow from investing activities |
A |
(308,041,793) |
(351,354,704) |
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Short
term borrowings |
|
(15,295,643) |
15,295,643 |
|
| issue
of share capital |
|
669,130,000 |
1,000,000 |
|
| Share
application money |
|
68,787,148 |
381,701,052 |
|
|
|
---------- |
---------- |
|
| Net cash from financing activities |
B |
|
722,621,505 |
397,996,695 |
|
|
| Net
increase in cash and cash equivalents (A+B) |
414,579,712 |
46,641,991 |
|
| Cash
and cash equivalents at the beginning of the year |
46,641,991 |
- |
|
|
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at the end of the year |
461,221,703 |
46,641,991 |
|
|
========== |
========== |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1996 |
|
|
| 1.
STATUS AND ACTIVITIES |
|
| The
Japan Power Generation Limited is a public company, limited by shares,
incorporated on September 29, |
|
| 1994
under the Companies Ordinance. 1984. The principal business of the Company is
to generate and |
|
| supply
of electric power to WAPDA. The Company has not yet commenced its business
operations, |
|
| therefore,
no profit and loss account has been prepared. |
|
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting convention |
|
| These accounts have been prepared under the
historical cost convention. |
|
| 2.2
Fixed assets |
|
| All
fixed assets are stated at cost and no depreciation has been charged as yet.
Depreciation will be |
|
| provided
on the commencement of the Company's commercial operations. |
|
| 2.3
Capital work in progress |
|
| All
costs/expenditure related to specific assets incurred during the project
implementation period are |
|
| carried
under this head. These will be transferred to specific assets as and when
these asses will be |
|
| available
for use. |
|
| 2.4
Pro-operation cost |
|
| This
includes all costs/expenditures not directly related to specific assets
incurred before the |
|
| commencement
of business. These will be allocated to building and plant and machinery at
the time |
|
| of
commencement of commercial production. |
|
| 2.5
Deferred Cost |
|
| Deferred
cost consists of expenses incurred in connection with the company's formation
and issue of |
|
| shares
including brokerage and commission etc. These will be amortized over a period
of five years |
|
| starting
from the year of commercial production. |
|
| 2.6
Foreign currencies |
|
|
| Foreign
currency transactions are converted into Pak Rupees at rates ruling on the
date of |
|
| transaction.
Since the Company has not yet commenced commercial production, exchange gains
and |
|
| losses
on conversion are accounted for in pre-operational cost. |
|
|
|
|
|
|
|
1996 |
1995 |
|
| 3.
FIXED ASSETS |
|
Rupees |
Rupees |
|
| Land |
|
16,046,645 |
16,046,645 |
|
| Leasehold
office premises |
|
775,000 |
- |
|
| Furniture
& fixtures |
|
295,850 |
292,400 |
|
| Office
equipments |
|
96,900 |
34,900 |
|
| Motor
vehicles |
|
5,321,615 |
2,600,000 |
|
| Air
conditioners |
|
91,510 |
44,510 |
|
|
|
---------- |
---------- |
|
|
|
22,627,520 |
19,018,455 |
|
|
|
========== |
========== |
|
|
|
|
| 4.
CAPITAL WORK IN PROGRESS |
|
|
|
|
|
| Building
- civil work |
|
15,868,000 |
135,521 |
|
|
|
========== |
========== |
|
|
|
| 5.
PRE-OPERATION AT COST |
|
|
| Directors'
remuneration |
|
1,140,000 |
480,000 |
|
| Traveling
and conveyance |
|
6,698,075 |
3,376 508 |
|
| Staff
salaries and benefits |
|
777,116 |
81 600 |
|
| Rent,
rates and taxes |
|
48,925 |
22 800 |
|
| Postage
and telegrams |
|
36,649 |
13 893 |
|
| Telephone
and telex |
|
912,528 |
275,097 |
|
| Printing
and stationery |
|
392,491 |
150,974 |
|
| Newspapers
and periodicals |
|
6,515 |
1.09 |
|
| Legal,
professional and consultancy charges |
14,252,178 |
2,668,712 |
|
| Auditors'
remuneration |
5.10 |
245.70 |
55,000 |
|
| Fee
and subscription |
|
37.75 |
- |
|
| Insurance |
|
|
51,595 |
27,783 |
|
| Vehicle
running expenses |
|
184.62 |
44,050 |
|
| Entertainment |
|
|
377.50 |
124,752 |
|
| Charity
and donation |
5.20 |
151.09 |
7,550 |
|
| Electricity
and utilities |
|
89.68 |
22,726 |
|
| Repair
and maintenance |
|
23.48 |
4,271 |
|
| Publicity
and advertisement |
|
335.99 |
16,850 |
|
| Bank
charges and excise duty' |
331.26 |
72.94 |
|
| Financial charges |
· |
|
4,210,934 |
1,000,000 |
|
| Guarantee
charges |
|
2,465,124 |
240,000 |
|
| Miscellaneous
expenses |
|
248,617 |
80,704 |
|
|
|
---------- |
---------- |
|
|
|
33,017,802 |
8,767,299 |
|
|
|
---------- |
---------- |
|
| Less: Interest received on |
|
3,033,367 |
1,000,469 |
|
|
foreign currency accounts |
9,834,631 |
- |
|
| Exchange gain |
|
---------- |
---------- |
|
|
|
12,867,998 |
1,000,469 |
|
|
|
---------- |
---------- |
|
|
20,149,804 |
7,766,830 |
|
|
|
|
========== |
========== |
|
|
|
|
| 5.1
Auditors' remuneration |
|
|
|
|
|
|
|
1996 |
|
1995 |
|
|
|
Coopers |
Javaid Iqbal |
Coopers |
Javaid Iqbal |
|
|
|
& Lybrand |
& Co. |
& Lybrand |
& Co. |
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
| Audit fee |
|
110,000 |
79,200 |
27,500 |
27,500 |
|
| Out of pocket expenses |
1,500 |
- |
- |
- |
|
|
---------- |
---------- |
---------- |
---------- |
|
|
111,500 |
79,200 |
27,500 |
27,500 |
|
|
========== |
========== |
========== |
========== |
|
|
| 5.2
Charity and donation |
|
|
| None
of the directors or their spouses have any interest in the donations paid. |
|
|
|
|
|
|
1996 |
1995 |
|
|
|
Rupees |
Rupees |
|
| 6.
DEFERRED COST |
|
|
|
|
| Preliminary
expenses |
|
2,285,540 |
36,180 |
|
| Commission
& other charges on Int'l. placement |
33,361,891 |
- |
|
| Public
issue expenses |
|
4,075,699 |
- |
|
| Underwriting
commission |
|
4,864,527 |
- |
|
|
|
---------- |
---------- |
|
|
|
44,587,657 |
36,180 |
|
|
|
========== |
========== |
|
|
|
|
| 7.
ADVANCES, DEPOSITS AND PREPAYMENTS |
|
|
|
|
|
| Advances: |
|
|
| For
plant and machinery (11.2) |
|
301,412,143 |
301,412,143 |
|
| For
equipments |
|
99,284,355 |
23,117,742 |
|
| For
civil work |
|
33,710,000 |
- |
|
| For
construction of railway sidings |
|
154,226 |
- |
|
| For
office premises |
|
- |
700,000 |
|
| Income tax |
|
3,000 |
1,500 |
|
| Letters
of credit |
|
122,144,405 |
360,000 |
|
| Others |
|
14,000 |
2,140 |
|
| Deposits: |
|
|
|
| Leasehold
premises |
|
31,356 |
- |
|
| Prepayments: |
|
|
|
| Insurance |
|
41,542 |
- |
|
|
|
---------- |
---------- |
|
|
556,795,027 |
325,593,525 |
|
|
|
========== |
========== |
|
|
|
|
|
| 8.
CASH AND BANK BALANCES |
|
| Cash in hand |
|
132,952 |
94,064 |
|
| Cash
with banks: |
|
|
| in
current accounts |
|
121,023,707 |
10,000 |
|
| in
saving accounts |
|
340,065,044 |
46,537,927 |
|
|
|
---------- |
---------- |
|
|
|
461,221,703 |
46,641,991 |
|
|
========== |
========== |
|
| 9.
SHORT TERM BORROWINGS |
|
| Running
finance |
|
- |
15,295,643 |
|
|
========== |
========== |
|
|
| This
running finance facility was obtained from Allied Bank of Pakistan Limited
and was secured against |
|
| foreign
currency deposits. It carried mark-up @ 15.5% per annum. |
|
|
| 10.
CREDITORS, ACCRUED AND OTHER LIABILITIES |
|
|
|
|
|
|
| Markup
payable |
|
- |
1,000,000 |
|
| Accrued
expenses |
|
631,511 |
195,807 |
|
|
|
|
---------- |
---------- |
|
|
631,511 |
1,195,807 |
|
|
========== |
========== |
|
|
|
|
| 11.
CONTINGENCIES AND COMMITMENTS |
|
| Commitments |
|
|
|
| 11.1
The Company has arranged a letter of credit from Allied Bank of Pakistan
Limited in favour of |
|
| WAPDA for US$ 2.675 million against
Company's commitment to achieve Commercial Operation Date |
|
| and for liquidity damages in the event of
default as per items 4.7, 9.4 or any other relevant |
|
| Article/Section of the Power Purchase
Agreement (PPA). |
|
|
| 11.2
The Company has executed Suppliers' Credit arrangements with Toyota Tsusho
(Singapore) PTE |
|
| Limited for the supply of plant and
machinery amounting to Rs. 3,014,121,430 (Japanese Yen |
|
| 8,254,000,0000). The terms of the
arrangements are 10 percent advance payment (as shown in note |
|
| 7 above) and 90 percent amount is to be
paid in 12 biannual installments with a grace period of 18 |
|
| months commencing after the last major
shipment. The loan is secured against an irrevocable letter of |
|
| credit obtained from Allied Bank of
Pakistan Limited and carries an interest at the rate of 7.90 percent |
|
| per annum. |
|
|
| 12.
MANAGEMENTS' REMUNERATION |
|
|
|
1996 |
|
|
1995 |
|
|
|
Chief |
Directors |
Executive |
Chief |
Directors |
Executive |
|
|
|
Executive |
|
Executive |
|
|
| Managerial
remuneration |
220,000 |
220,000 |
114,570 |
160,000 |
160,000 |
- |
|
| House
rent and utilities |
110,000 |
110,000 |
56,430 |
80,000 |
80,000 |
- |
|
|
|
330,000 |
330,000 |
171,000 |
240,000 |
240,000 |
- |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| No.
of persons |
1 |
3 |
1 |
1 |
3 |
- |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
| -- No Board
meeting fee has been paid to directors. |
|
| --
The Company provides Company maintained vehicles to the Chief Executive and
the Directors. |
|
|
| 13. FIGURES |
|
|
|
| -
have been rounded off to the nearest rupee. |
|
| -
of prior period have been rearranged wherever necessary for the purpose of
comparison only. |
|
|
|
