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| THE
KARACHI ELECTRIC SUPPLY CORPORATION LIMITED |
|
| 84Th Annual Report |
|
| Accounts
for the year ended June 30, 1996 |
|
|
| CONTENTS |
|
Page |
|
| Names
of Directors, Bankers, Auditors |
|
| and
Managing Agents |
|
1 |
|
| Notice
of Meeting |
|
2-3 |
|
| Chairman's Review |
|
4-7 |
|
| Directors'
Report to Members |
|
8-9 |
|
| Income
And Where it went |
|
10 |
|
| Historical
highlights |
|
11 |
|
| Operating
results of generating stations |
12 |
|
| Transmission and Distribution
system |
|
13 |
|
| Auditors
Report to the Members |
|
15 |
|
| Balance
Sheet |
|
16-17 |
|
| Profit
and Loss Account |
|
18-19 |
|
| Statement
of Changes in Financial Position |
20 |
|
| Notes
to the Financial Statements |
|
21-41 |
|
| Pattern
of Shareholdings |
|
42-43 |
|
|
| (Incorporated
in 1913) |
|
| BOARD
OF DIRECTORS |
|
|
| CHAIRMAN |
|
| Mr. Muhammad Saeed Mehdi |
|
|
| MANAGING
DIRECTOR (AGENTS) |
|
| Mr. Malik Shahid Hamid |
|
|
| DIRECTORS |
|
| Mr.
Raziur Rehman Khan |
|
| Mr.
Engr. A. Aziz Buriro |
|
| Brig.
Mansoor Ahmed |
|
| Mr.
Mir Munawar All Talpur |
|
| Mr.
S.M. Munir |
|
| Mr.
Dinshaw Anklesaria |
|
| Mr.
Jehangir Ansari |
|
| Mr.
Jahangir Siddiqui |
|
| Mr,
Muhammad Khusrow Khowaja |
|
|
| CORPORATE
SECRETARY |
|
| Mr.
Oswald Pearl |
|
|
| BANKERS |
|
| National
Bank of Pakistan |
|
| Habib
Bank Ltd. |
|
| United
Bank Ltd. |
|
| Muslim
Commercial Bank Ltd. |
|
| Allied
Bank of Pakistan Ltd. |
|
| First
Women Bank Ltd. |
|
|
| AUDITORS |
|
| Rahim
Jan & Co. |
|
| Ford,
Rhodes, Robson, Morrow |
|
|
| MANAGING
AGENTS |
|
| The
Pakistan Electric Agencies (Pvt.) Ltd. |
|
|
| REGD.
OFFICE |
|
| Aimai
House, Abdullah Haroon Road, Karachi. |
|
|
| NOTICE
OF MEETING |
|
| Notice is hereby given that the 86th
Annual General Meeting of the Karachi Electric Supply |
|
| Corporation
Ltd. will be held at P.N. Fleet Club, Liaquat Barracks, Karachi, on Thursday
27th March, |
|
| 1997
at 11..30 hours to transact the following business: |
|
|
| A.
1. To confirm minutes of the Annual General Meeting held on 29th February,
1996. |
|
|
| 2.
To receive and adopt the Directors' Report and the Audited Accounts (with
Auditors' Report) |
|
| for
the year ended 30th June, 1996. |
|
|
| 3.
To appoint Auditors in place of those retiring and fix their remuneration for
1996-97. Retiring |
|
| Auditors
viz: M/s. Rahim Jan & Co. and M/s. Ford, Rhodes, Robson, Morrow being
eligible |
|
| have
offered for re-appointment. |
|
|
| Notice
has been received from a member of the Company proposing appointment of |
|
| M/s.
Taseer Hadi Khalid & Co., Chartered Accountants as auditors of the
Company. |
|
|
| Any
other business with the permission of the Chair. |
|
|
| Transfer
Books of the Corporation will remain closed from 19.3.1997 to 28.3.1997 (both
days |
|
| inclusive). |
|
|
| By
order of the Board |
|
| THE
KARACHI ELECTRIC SUPPLY CORPORATION LTD. |
|
|
| OSWALD
PEARL |
|
| Corporate
Secretary |
|
|
| Karachi:
February 27, 1997 |
|
|
| N.B: |
|
| i)
The shareholders will please notify change in their address, if any. |
|
|
| ii)
Any member of the company entitled to attend and vote at the meeting of the
company |
|
| shall
be entitled to appoint another member, as his proxy to attend and vote
instead of |
|
| him,
and a proxy so appointed shall have such rights as respects speaking and
voting |
|
| at
the meeting as are available to a member. |
|
|
| iii)
This meeting has been called in terms of the extension of the period for
holding of Annual |
|
| General
Meeting for the year ended June 30, 1996 granted by the Corporate Law
Authority, |
|
| Islamabad
vide their letter No. Co.158(1)/189/95 dated 15th February, 1997. |
|
|
| iv)
Form of proxy is enclosed. |
|
|
| Instrument
of appointment of proxy and power of attorney or any other authority under
which |
|
| it
is signed must be deposited at the registered office of the company at least
48 hours |
|
| before
the time of the meeting. |
|
|
| v)
Pursuant to the provision of Section 80 and 81 of the Companies Ordinance
1984 a member |
|
| may,
if he opts, deposit with the company a nomination conferring on one or more
persons |
|
| the
right to acquire the interest in the shares therein specified in the event of
his death. |
|
|
| CHAIRMAN'S
REVIEW |
|
|
| Ladies
& Gentlemen: |
|
|
| It
is my first opportunity to welcome you on |
|
| the
occasion of 84th Annual General Meeting of |
|
| the
Corporation I am pleased to present before |
|
| you
the Directors Report, Annual Accounts to- |
|
| gether
with the Auditors Report for the Financial |
|
| year
1995-96. |
|
|
| The
year under report was marked by |
|
| frequent
calls of strikes and resultant disturbances |
|
| creating
problems of management and control. |
|
| Further
continuous inflationary pressure and |
|
| consequent
effect on the prices of consumable |
|
| store
items, equipment and material needed in |
|
| connection
with expansion programme of the |
|
| Corporation
have increased the financial expen- |
|
| diture
of the year under review. The single main |
|
| factor
which contributed to an exhorbitant increase |
|
| in
current expenditure are the increases in prices |
|
| of
oil and gas. |
|
|
|
|
| Total
installed capacity of the power stations |
|
|
|
|
|
|
| was
1,738 MW which had remained the same |
|
| as
was in the previous year whilst the actual |
|
|
|
|
|
|
| capability
in the year under re. view was 1,307 MW |
|
|
|
|
|
|
| as
against 1,229 MW in the year 1994-95. The |
|
|
|
|
|
|
| Corporation
met the maximum consumers |
|
|
|
|
|
|
| demand
for Karachi region of 1,513 MW as against |
|
| 1,442
MW in the year 1994-95. The overall system |
|
| peak
demand was 1,513 MW as compared to |
|
| 1,442
MW registered in the previous report year. |
|
|
| The
operational activities during the year |
|
| under
review with comparative figures of the last |
|
| year
are summarized hereunder:- |
|
|
|
1995-96 |
1994-95 |
Percentage |
|
|
Increase/ |
|
|
decrease |
|
|
MWH |
MWH |
% |
|
|
| 1.
Units generated (KESC) |
|
8,056,879 |
7,299,366 |
10.38 |
|
| 2.
units sentout (KESC) |
|
7,513,969 |
6,800,708 |
10.49 |
|
| 3.
Units purchased |
|
1,328,837 |
1,461,769 |
-9.09 |
|
| 4.
Total available for sale |
|
8,842,806 |
8,262,477 |
7.02 |
|
| 5.
Units billed |
|
6,021,008 |
5,631,828 |
6.91 |
|
|
|
|
|
| POWER
GENERATION |
|
|
|
| Inspire
of and retirement of Machine Nos. |
|
| generated
were 8,056,879 MWH as against |
|
|
| 7,299,366
MWH in the year 1994-95 and shows |
|
| an
increase of 10.38% over the previous year. |
|
| The
major contribution of power generation |
|
| pertains
to Bin Qasim Thermal Power station |
|
| which
contributed 73.81%, KTPS 19.34% and the |
|
| balance
of 6.85% from Gas Turbines. KESC power |
|
| plants
had contributed 85.84% of the total power |
|
| requirement
as against 83.32% in the last financial |
|
| year.
The balance power requirement was met |
|
| by
power purchase from WAPDA, KANUPP and |
|
| PASMIC.
The ratio of power generation by KESC |
|
| and
purchase ratio of WAPDA, KANUPP and |
|
| PASMIC
is highlighted hereunder:- |
|
|
|
1995.96 |
Ratio |
1994-95 |
Ratio |
|
|
MWH |
% |
MWH |
% |
|
|
| 1.
Generation by KESC |
8,056,879 |
85.84 |
7,299,366 |
83.32 |
|
| 2.
Power purchased: |
|
| a) WAPDA |
|
781,429 |
8.33 |
884,042 |
10.09 |
|
| b)
KANUPP |
|
415,660 |
4.43 |
443,323 |
5.06 |
|
| c)
PASMIC |
|
131,748 |
1.40 |
134,404 |
1.53 |
|
|
---------- |
---------- |
---------- |
---------- |
|
| Total
power purchase |
1,328,837 |
14.16 |
1,461,769 |
16.68 |
|
|
---------- |
---------- |
---------- |
---------- |
|
| Total
generation + |
|
| power
purchase |
|
9,385,716 |
100.00 |
8,761,135 |
100.00 |
|
|
---------- |
---------- |
---------- |
---------- |
|
|
| TRANSMISSION
& DISTRIBUTION LOSSES |
|
| T&D
losses for the financial year under |
|
| review
comes to 31.20% as against 31.37% for |
|
| the
year 1994-95 shows marginal decrease over |
|
| previous
year. |
|
|
| The
reduction in T&D losses was possible |
|
| due
to rigorous campaign against the culprits |
|
| involved
in theft of electricity and removal of |
|
| Kundas.
The continuous efforts of the Management |
|
| will
further bring down the percentage of T&D |
|
| losses. |
|
|
| REVENUE
AND EXPENDITURE |
|
| Total
revenue of the financial year under |
|
| review
shows an increase of Rs 3,648.496 million |
|
| over
the previous year which is due to (1) increase |
|
| in
units sold by 389.18 million KWH and (2) |
|
| increase
in additional surcharge notified by the |
|
| Government of Sindh and
Balochistan and (3) |
|
| increase
in other income. |
|
|
| Total expenditure shows
an increase of Rs. |
|
| 4,417.449millionoverthepreviousyear.
The major |
|
| portion of the
increase in total expenditure of the |
|
| Corporation
has been attributable to (1) payment |
|
| of higher cost of
fuel due to increase in prices |
|
| of oil and gas (2)
cost of power purchase (3) |
|
| depreciation
and interest (4) increase in wage- |
|
| bill
and (5) provision of Additional Depreciation |
|
| which
was not made in the previous year report. |
|
|
| The
summarized position of income and |
|
| expenditure
is given hereunder: |
|
|
|
Rs. Million |
|
|
1995-96 |
1994-95 |
Percentage |
|
|
Increase/ |
|
|
decrease |
|
| Energy
sales |
|
15,988.034 |
12,383.28 |
29.11 |
|
| Other
income |
|
351.404 |
307.660 |
14.22 |
|
| Total
income |
|
16,339.438 |
12,690.942 |
28.75 |
|
| Gross expenditure |
|
16,808.306 |
12,502.390 |
34.44 |
|
| Profit/(Loss)
before tax |
(468.868) |
188.552 |
'(348.63) |
|
|
| CONSUMERS
SERVICES |
|
| The
Management of the Corporation was |
|
| in constant touch for
redressal of consumers |
|
| complaints
instantly. In this context, decentrali- |
|
| zation of the data
processing was done by KESC |
|
| installation of
Personal Computers (Pcs) at all the |
|
| 20 zonal offices.
Another computer terminal has |
|
| been installed at
Awami Markaz directly linked |
|
| with the main
computer for immediate and prompt |
|
| action
on the consumers complaint. |
|
|
| The
number of new connections pro- |
|
| vided
during the year are 17,696 as against |
|
| 18,205
during the last financial year. |
|
|
| The
number of villages electrified during the |
|
| year
are as under:- |
|
|
| Province |
|
Normal
|
Funded |
Total |
|
|
Schemes |
Schemes |
|
|
|
|
| 1. Sindh |
|
29 |
16 |
45 |
|
| 2. Balochistan |
8 |
7 |
15 |
|
|
--------- |
--------- |
--------- |
|
|
37 |
23 |
60 |
|
|
=========== |
=========== |
=========== |
|
|
| ON-GOING
PROJECT |
|
|
| 210
MW Bin Qasim Thermal Power Station |
|
| Ext.
Unit-6 Project: |
|
|
|
| The
project envisages construction of a 210 |
|
| MW
extension Unit at Bin Qasim Power Station |
|
| including
laying of a 220KV double circuit trans- |
|
| mission
line from Bin Qasim Station to Korangi |
|
| West Grid station (about 35 KM long). The
project |
|
| also
includes establishment of a new 220KV grid |
|
| station
at Korangi West. The project is being funded |
|
| by
OECF, Japan. |
|
|
| The
project scope has been divided into |
|
| following
three lots: |
|
|
| I
Lot-I Civil works |
|
| II
Lot-II Power Plant Equipment |
|
| III.
Lot-III Allied Transmission Line & Grid Station |
|
| Equipment |
|
| decrease |
|
| During
the year under reference, major |
|
| construction
activities and equipment installations |
|
| were
completed. |
|
|
| An
overall progress of about 97% has been |
|
| achieved
and the project is expected to be |
|
| commissioned
in April 1997. |
|
|
| Private
Power Project on KESC"s Grid |
|
| Ten
private sponsors were issued letters of |
|
| Support
(LOS) by Government of Pakistan (GOP) |
|
| to
set up power plants in KESC's licensed area. |
|
| KESC
has so far signed Power Purchase Agree- |
|
| ments
(PPAs) with nine (9) of them. Financial |
|
| closing
(FC) for five (5) projects has been |
|
| acknowledged
by GOP, their status as of the end |
|
| of
the reporting year is as under:- |
|
|
| Name
of Projects |
|
Status |
|
Commissioning |
|
| With
Capacity |
|
date |
|
|
| 1.
Gul Ahmed Energy |
Construction has |
|
October, 1997 |
|
| (136 Mw) |
|
started |
|
|
| 2.
Tapal Energy |
|
Construction has |
|
April, 1997 |
|
| (126 Mw) |
|
started |
|
|
| 3.
Sabah Shipyard |
|
Construction has |
|
November, 97 |
|
| (288 Mw) |
|
started |
|
|
| 4.
TriStar Energy |
|
Under litigation |
|
-- |
|
| (110 Mw) |
|
| 5.
WAK Orient |
|
Conditional FC |
|
| (420 Mw) |
|
has been acknowledged |
|
|
by GOP |
|
|
| Project
under ADB Loan (5th Power Sector |
|
| Loan) |
|
|
| Asian
Development Bank (ADB) has pro- |
|
| vided
a loan of USS 100 million for transmission |
|
| system
expansion and rehabilitation. |
|
|
| Under
the above project known as KESC |
|
| 5th
Power (Sector Loan) project, contracts for |
|
| overhead
transmission lines, conventional grid |
|
| stations,
GIS grid stations and underground |
|
| transmission
lines have been awarded to M/s. |
|
| ICC,
Pakistan, M/s Hyundai, Korea, M/s. Siemens, |
|
| Germany
and M/s. China National Electric Wire |
|
| &
Cables Import Export Corporation, China, |
|
| respectively. |
|
|
| These
projects are expected to be completed |
|
| by
June 1997 and would enhance transformation |
|
| capacity
by about 900 MVA. The details of these |
|
| projects
are given below: |
|
|
| .
Expansion and rehabilitation of 9 Nos. of |
|
| 220/132
KV overhead transmission lines. |
|
| Work
on all the transmission lines has been |
|
| completed
and the same have been ener- |
|
| gized. |
|
|
| .
Expansion and rehabilitation of 1'9 Nos. of |
|
| conventional
grid stations which includes |
|
| establishment
of one new 132 KV grid station |
|
| at
Malir. Work on the projects progressing. |
|
|
|
|
| ·
Expansion and rehabilitation of GIS grid |
|
| stations
which includes establishment of one |
|
| new
220 KV GIS grid station at Queens Road |
|
| and
extension work in three existing GIS |
|
| grid
stations. Work on the project is in |
|
| progress. |
|
|
| · Expansion and rehabilitation of 6 Nos. of |
|
| underground
transmission lines. Work on the |
|
| project
is in progress. |
|
|
| Under
the above project co-financing ar- |
|
| rangement
of USS 100 million with EXlM Bank |
|
| of
Japan has also been made for the procurement |
|
| of
distribution material for augmentation of dis- |
|
| tribution
system. |
|
|
| Out
of 16 different packages, delivery of 7 |
|
| under-mentioned
packages have been com- |
|
| pieted
:- |
|
|
| 1.
Medium voltage surge arresters; |
|
| 2.
Medium and low voltage joints and terminations; |
|
| 3.
Indoor low voltage switchboards; |
|
| 4.
Medium and low voltage insulators; |
|
| 5.
11 KV drop out cut outs; |
|
| 6.
11 KV out door ring mains units; |
|
| 7.
Copper and galvonized steel earth rods; |
|
|
| The
delivery of following 9 packages is in |
|
| progress
:- |
|
|
| 1.
Hardware for overhead lines |
|
| 2.
Standard hard drawn copper conductors |
|
| 3.
KV copper conductor, PVC insulated cable |
|
| 4.
Distribution transformers |
|
| 5.
Steel tubular poles |
|
| 6.
11 KV switchgear |
|
| 7.
LT switch board for PMTs |
|
| 8.
KV XLPE cable |
|
| 9.
KIOSK type sub-stations is in progress |
|
|
| It
is expected that the work of distribution |
|
| expansion
and rehabilitation would be completed |
|
| by
March, 1997. |
|
|
| Future
Project (6th Power Project) |
|
|
| The
full scope of work for transmission |
|
| system
as per the studies carried out by the |
|
|
|
| consultants
could not be covered under ADB loan |
|
| of
USS 100 million (5th Power Project). Moreover, |
|
| KESC
requires a proper load dispatch centre |
|
| including
SCADA facilities in order to monitor and |
|
| control
high tension network. Therefore, to cover |
|
| the
above works, another loan of USS 200 million |
|
| was
finalized in October 1994 with ADB and USS |
|
| 40
million from European investment Bank for load |
|
| dispatch
centre with co-financing of USS 75 million |
|
| from
EXlM Bank of Japan. |
|
|
| After
the approval for appointment of Con- |
|
| sultants
by KESC Board of Directors and ADB, |
|
| M/s.
Lahmeyer International have been appointed |
|
| as
Consultants for Sixth Power Project. |
|
|
| Following
projects are covered under this |
|
| project: |
|
|
| 1.
Expansion and rehabilitation of GIS grid |
|
| station,
(5 new + extension work in 6 existing |
|
| grid
stations) |
|
|
| 2.
Expansion and rehabilitation of overhead |
|
| transmission
lines (Circuit length: 220KV, 167 |
|
| KM
+ 132 KV, 167 KM) |
|
|
| 3.
Expansion and rehabilitation of underground |
|
| transmission lines
(Circuit length 220 KV, |
|
| 20
KM + 132 KV, 43 KM) |
|
|
| 4.
Expansion and rehabilitation of conventional |
|
| grid
station (7 new + extension work in 7 |
|
| existing
grid stations). |
|
|
| The
total increase in transformation capacity |
|
| would
be as under: |
|
|
| Auto
transformers: 1250 MVA + Power |
|
| transformers:
1160 MVA. |
|
|
| Contract
for packages 2 i.e. overhead trans- |
|
| mission
lines has been awarded to M/s. ICC (Pvt.) |
|
| Ltd.
whereas bids for rest of the three packages |
|
| along
with the bid of SCADA and LDC are under |
|
| evaluation. |
|
|
| The
projects are expected to be completed |
|
| in
1998-99. |
|
|
| PERSONNEL |
|
| The
working atmosphere between the Man- |
|
|
|
| agreement
and workers remained normal. The |
|
| Management
has provided monetary and non- |
|
| monetary
facilities to the staff and officers during |
|
| the
year under review for solving their socio- |
|
| economic
problems. |
|
|
| Medical
facilities have also been allowed to |
|
| the
retired staff/officers for ten years after retire- |
|
| ment
and for five years of their dependent family |
|
| members. |
|
|
| CONCLUSION |
|
| I
am thankful to all participants who have |
|
| spared
their precious time for the AGM of |
|
| Corporation
and assure you that we shall make |
|
| all
efforts towards making of KESC a profitable, |
|
| consumer-friendly
and efficient Corporation. |
|
|
| I
am thankful to my colleagues and members |
|
| of
KESC Board of Directors for their cooperation |
|
| extended
to the Corporation and hope that their |
|
| cooperation
shall continue for excellent results. |
|
| I
am also thankful to the Ministry of Water & Power, |
|
| Ministry
of Finance & Economic Affairs and |
|
| Planning
Division for their valuable assistance. |
|
| I
would also like to convey my thanks to the |
|
| Provincial
Governments of Sindh and Balochistan |
|
| and
Local Authorities for their cooperation in |
|
| resolving
the problems of the Corporation. |
|
|
| Directors'
Report to the Members |
|
| 1.
The Board of Directors present herewith Eighty Fourth Annual Report on the
working of the |
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| Corporation together with Audited Statement
of Accounts for the year ended June 30, 1996. |
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| (i)
Until 1993-94, additional depreciation was provided to meet the expected
enhanced value at |
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| the time of retirement of fixed assets of
Generating Stations and certain items of Transmission |
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| & Distribution Net Work. In the year
1994-95, additional depreciation was not provided as Government |
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