| Gammon Pakistan Limited |
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| BOARD OF DIRECTORS |
|
|
|
|
|
| Mian
Mohammad Arif |
-Chairman/Managing Director |
|
| Chowdhry
Abdul Waheed |
-Vice Chairman |
|
|
| Mohammad
Salahuddin |
-Deputy Managing Director |
|
| Rafee
ud Din Ahmad Faruqi |
|
|
| Khalid
Rashid Quraishi |
|
|
| Abdul
Karim Khan |
|
|
| Habib-ur-Rehman |
|
|
| Andrew
Duncan Gammon |
|
|
| Mujib
Rahim Khan |
|
|
| Shahabuddin |
|
|
|
| Shakeeluddin |
|
|
|
| M. Allauddin |
|
| Brig
(R) Khawar Latif Butt |
|
| Shafqat Tanvir |
|
|
| AUDITORS |
|
|
| Shahid
Sami & Co. |
|
| Chartered
Accountants |
|
|
| BANKERS |
|
|
| Allied
Bank of Pakistan |
|
| Citi Bank, N. A. |
|
|
| ANZ
Grindlays Bank |
|
| ABN-AMRO
Bank |
|
| National
Bank of Pakistan |
|
| Muslim
Commercial Bank Limited |
|
| The
Bank of Punjab |
|
| Platinum
Commercial Bank |
|
| Gulf
Commercial Bank Limited |
|
| Bank
Alfalah Limited |
|
| PICIC |
|
|
| REGISTERED
OFFICE / HEAD OFFICE |
|
| Gammon House, |
|
|
| 400/2,
Peshawar Road, Rawalpindi. |
|
| Tele:
5477326-30, 5479211-12 |
|
| Fax: 5477511 |
|
|
| E.
Mail - gpl@isb.infolink.net.pk |
|
|
|
| CONTENTS |
|
|
| NOTICE
OF MEETING |
|
| REPORT
OF THE DIRECTORS |
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| STATEMENT
OF SOURCE AND APPLICATION OF FUNDS |
|
| NOTES
TO THE ACCOUNTS |
|
| PATTERN
OF SHAREHOLDINGS |
|
| REVIEW
OF DECADE |
|
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the 53rd Annual General Meeting of Gammon Pakistan
Limited will be held at |
|
| Gammon
House, 400/2 Peshawar Road, Rawalpindi on Tuesday, December 26, 2000 at 10.30
AM for the |
|
| following
purposes:- |
|
|
| 1.
To confirm the minutes of the Annual General Meeting held on December 30,
1999. |
|
|
|
|
| 2.
To consider and adopt the company's Accounts and Reports of the Directors and
Auditors for the |
|
| year
ended June 30, 2000. |
|
|
|
| 3.
To appoint auditors and fix their remuneration. |
|
|
|
|
|
| 4.
To approve payment of dividend at the rate of 7.5% for the year ended June
30, 2000 as |
|
| recommended
by Directors. |
|
|
|
|
| 5.
To transact any other business with the permission of the chair. |
|
|
| The
Register of members shall be closed and no transfer of shares shall be
accepted for registration |
|
| from
December 12, 2000 to December 26, 2000 (both days inclusive) |
|
|
|
|
BY ORDER OF THE BOARD |
|
|
|
MOHAMMAD SALAHUDDIN |
|
| Rawalpindi:
November 28, 2000 |
|
DEPUTY MANAGING DIRECTOR/SECRETARY |
|
|
| NOTE: |
|
|
| A
member of the Company entitled to attend and vote may appoint another member
as |
|
| his/her
proxy to attend and vote instead of him/her. |
|
|
|
|
|
| The
instrument appointing a proxy must be deposited at the Company's Registered
Office, Gammon |
|
| House,
400/2 Peshawar Road, Rawalpindi, not less than 48 hours before the time of
holding the |
|
| meeting. |
|
|
|
|
|
|
| Members
are requested to notify immediately change in their address, if any. |
|
|
|
|
|
| DIRECTORS'
REPORT |
|
|
| Directors
of Gammon Pakistan Ltd. feel pleasure in presenting the audited accounts for
the year ended |
|
| June 30, 2000 :- |
|
|
| The
financial results are as under :- |
|
|
|
|
(Rupees) |
|
|
| Net
profit before taxation |
|
26,233,438 |
|
|
|
|
|
|
| Taxation |
|
|
(21,877,905) |
|
|
|
|
------------------ |
|
| Net
profit after taxation |
|
4,355,533 |
|
| Adjustments
relating to prior years |
|
319,826 |
|
|
|
|
------------------ |
|
|
|
|
4,675,359 |
|
| Accumulated
profit brought forward |
|
4,569,031 |
|
| Proposed
dividend @ 7.5% |
|
(2,625,000) |
|
|
|
|
------------------ |
|
| Accumulated
profit transferred to Balance Sheet |
|
6,619,390 |
|
|
------------------ |
|
|
| During
the year ended June 30, 2000 the Company has completed following projects:- |
|
|
|
|
|
Total Contract |
|
|
|
|
Value (Rs) |
|
|
|
|
|
|
| - Changla Gali Project |
|
14,707,098 |
|
| - Asphalt Plant Work - Changla
Gali |
|
2,931,700 |
|
| -
Lai Bridge - Rawalpindi |
|
23,055,508 |
|
| -
Sherpao Bridge - Lahore |
|
89,263,677 |
|
|
|
|
------------------ |
|
|
|
|
129,957,983 |
|
|
|
|
------------------ |
|
|
| Work
on following projects was in advance stage of execution:- |
|
| -
Islamabad-Peshawar Motorway Project- Main Structures |
|
| -
Multan Flyover Project. |
|
|
| During
the year under review the work on Islamabad-Peshawar Motorway Project
remained suspended for seven. |
|
| months
due to some disputes between M/s. Bayindir and NHA after the change of
Government on 12th October, 1999. |
|
|
| FUTURE
PROSPECTS |
|
| After
resumption of works M/s. Bayindir have given us following new works: |
|
| -
Six large bridge structures - between Badri Khawar and Uch Khawar. |
|
| - Indus River Bridge (Rs.
323,592,200) |
|
|
| Soon
after signing the Indus River Contract the management floated inquiries for
piling work. Since the bore logs |
|
| provided
to us were showing the river bed full of boulders of very large diameter
going upto the depth of 30 meter, |
|
| therefore
lot of efforts were required in selecting the right type of machinery. It is
hoped that the machinery selected |
|
| will
help in the completion of this prestigious/challenging project being executed
in most difficult strata ever |
|
| encountered
by any contractor, perhaps in the whole world. |
|
|
| In
addition to above two projects, your Company has got a sub-contract for
construction of Icher Nullah Bridge |
|
| (Rs.
21,826,610) to be constructed on Mansehra-Naran Road. |
|
|
| These
projects will keep your Company busy upto August 2002. |
|
|
| REGISTERED
OFFICE |
|
| You
will recall that during last Annual General Meeting the shareholders of your
Company approved transfer of |
|
| Registered
Office from Nelsons Chambers, I.I. Chundrigar Road, Karachi to Gammon House,
400/2, Peshawar |
|
| Road,
Rawalpindi. Consequent upon the approval of Securities and Exchange
Commission of Pakistan, the Registered |
|
| Office
of the Company now situates at Gammon House, 4002, Peshawar Road, Rawalpindi. |
|
|
| COMMENTS
ON AUDITORS' REPORTS |
|
| The
matter relating to interest on overseas credit facilities is subjudice,
therefore, necessary entries, if required will |
|
| be
made in the accounts only after court orders, whereas appropriation of
promissory notes is subject to after tax |
|
| audited profits. |
|
|
| DIVIDEND |
|
| The
directors have recommended 7.5% cash dividend subject to approval of
shareholders. It is expected that some |
|
| directors,
their relatives and major shareholders will forego their rights to dividend. |
|
|
| AUDITORS |
|
| The
retiring auditors M/s Shahid Sami & Co., Chartered Accountants, being
eligible, offer themselves for re- |
|
| appointment. |
|
|
| STAFF |
|
| On
behalf of the Directors I would like to thank all the staff of the Company
for their dedication and honesty in |
|
| serving
the Company. |
|
|
|
|
CHAIRMAN |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of GAMMON PAKISTAN
LIMITED as at June 30, 2000 and the related |
|
| profit
and loss account and statement of source and application of funds, 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. |
|
|
| 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 responsibility 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; |
|
|
| (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
explanations given to us, the balance |
|
| sheet,
profit and loss account and the statement of source and application of funds,
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,
2000 and of the profit, its |
|
| changes
in source and application of funds for the year then ended; and |
|
|
| (d)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| (i)
the company has not provided interest on overseas credit facilities from
Nationalised banks [reference |
|
| Note 18 (B) (i)]. |
|
|
| (ii)
the Company has not appropriated against promissory notes issued in favour of
Citibank N.A and |
|
| American
Express against overseas foreign currency loans [reference Note. 18 (B)
(ii)]. |
|
|
| November 28, 2000. |
|
SHAHID SAMI & CO. |
|
| PESHAWAR |
|
|
CHARTERED ACCOUNTANTS |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
| SHARE
CAPITAL AND RESERVE |
|
2000 |
1999 |
|
|
|
NOTE |
RUPEES |
RUPEES |
|
|
| Authorised
Capital |
|
| 5,000,000
Ordinary shares of Rs. 10/- each |
|
50,000,000 |
50,000,000 |
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid up capital |
3 |
35,000,000 |
35,000,000 |
|
| Accumulated
profit |
|
|
6,619,390 |
4,569,031 |
|
|
------------------ |
------------------ |
|
|
|
|
41,619,390 |
39,569,031 |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
4 |
78,293,192 |
78,613,018 |
|
| DEFERRED
LIABILITY FOR RETIREMENT GRATUITIES |
2,549,861 |
3,387,156 |
|
| LONG
TERM LOANS |
|
5 |
23,076,764 |
20,065,926 |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
| Bills discounted |
|
|
10,000,000 |
-- |
|
| Creditors |
|
|
81,038,172 |
42,554,720 |
|
| Accrued
expenses |
|
|
17,763,091 |
17,651,780 |
|
| Mobilisation
advance |
|
|
33,513,851 |
2,000,000 |
|
| Material
received from client/secured advances |
|
136,560 |
1,378,004 |
|
| Provision
for Taxation |
|
6 |
854,772 |
335,993 |
|
| Proposed
dividend |
|
|
2,625,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
145,931,446 |
63,920,497 |
|
| Contingencies
and commitments |
|
18 |
-- |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
291,470,653 |
205,555,628 |
|
|
|
========== |
========== |
|
|
| FIXED ASSETS |
|
|
7 |
56,356,532 |
54,911,012 |
|
| INVESTMENTS |
|
|
8 |
19,993,540 |
17,506,699 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
| Stock
of material, stores and Spares: |
|
|
| Material
and stores |
|
|
11,009,152 |
13,025,446 |
|
| Spare parts |
|
|
3,221,315 |
3,746,098 |
|
| Loose tools |
|
|
71,040 |
60,028 |
|
| Other stocks |
|
|
788,853 |
845,307 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
15,090,360 |
17,676,879 |
|
|
|
|
| Contract
receivables |
|
9 |
127,346,140 |
88,902,773 |
|
| Advances,
deposits, prepayments |
|
| and
other receivables |
|
10 |
12,422,891 |
9,929,116 |
|
|
|
|
|
| Cash
and bank balances |
|
11 |
60,261,190 |
16,629,149 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
215,120,581 |
133,137,917 |
|
|
------------------ |
------------------ |
|
|
|
291,470,653 |
205,555,628 |
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
| Auditors'
report to the members is annexed. |
|
|
| RAWALPINDI
: November 28, 2000 |
|
|
|
|
|
MIAN MOHAMMAD ARIF |
|
MOHAMMAD SALAHUDDIN |
|
|
|
Chief Executive |
|
Director |
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
| CONTRACT
INCOME |
|
12 |
371,413,217 |
193,884,341 |
|
| CONTRACT
EXPENDITURE |
|
13 |
342,276,487 |
192,699,390 |
|
|
|
|
------------------ |
------------------ |
|
| NET
CONTRACT PROFIT |
|
|
29,136,730 |
1,184,951 |
|
| OTHER
INCOME/(LOSS) |
|
14 |
206,710 |
(478,145) |
|
| ADJUSTMENTS
REGARDING CONTRACTS |
|
|
| COMPLETED
IN PRIOR YEARS |
|
|
505,926 |
1,040,880 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
29,849,366 |
1,747,686 |
|
| OTHER
EXPENDITURE |
|
| Interest
on bank borrowings |
|
|
3,193,923 |
833,882 |
|
| Auditors'
remuneration |
|
15 |
41,000 |
41,000 |
|
| Retirement
gratuities |
|
|
381,005 |
753,358 |
|
| Zakat |
|
|
-- |
67,754 |
|
|
------------------ |
------------------ |
|
|
|
3,615,928 |
1,695,994 |
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
26,233,438 |
51,692 |
|
| TAXATION |
|
|
(21,877,905) |
(9,558,337) |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT/(LOSS)
FOR THE YEAR |
|
4,355,533 |
(9,506,645) |
|
| ADJUSTMENTS
RELATING TO PRIOR YEARS |
16 |
319,826 |
4,512,131 |
|
|
|
|
------------------ |
------------------ |
|
| NET
PROFIT/(LOSS) AFTER PRIOR YEARS ADJUSTMENTS |
4,675,359 |
(4,994,514) |
|
| ACCUMULATED
PROFIT BROUGHT FORWARD |
4,569,031 |
9,563,545 |
|
|
|
|
------------------ |
------------------ |
|
|
|
9,244,390 |
4,569,031 |
|
| APPROPRIATIONS |
|
| Proposed
dividend @ 7.5% |
|
(2,625,000) |
-- |
|
|
|
------------------ |
------------------ |
|
| ACCUMULATED
PROFIT CARRIED FORWARD |
|
6,619,390 |
4,569,031 |
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
MIAN MOHAMMAD ARIF |
|
MOHAMMAD SALAHUDDIN |
|
|
Chief Executive |
|
Director |
|
|
| RAWALPINDI:
November 28, 2000 |
|
|
|
|
| STATEMENT
OF SOURCE AND |
|
| APPLICATION
OF FUNDS |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
|
RUPEES |
RUPEES |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit/(Loss)
After Taxation |
|
4,675,359 |
(4,994,514) |
|
|
|
|
|
|
| Adjustment
of Non Cash Items |
|
|
|
| Depreciation |
|
6, 865, 513 |
8,542,836 |
|
| Provision
for gratuity |
|
381,005 |
701,788 |
|
| (Profit)/Loss
on disposal of fixed assets |
|
(104,710) |
502,145 |
|
| Interest
capitalized |
|
3,010,838 |
2,611,312 |
|
| (Profit)/Loss
on disposal of Chakwal Cement Co. Shares |
(78,000) |
-- |
|
| Provision
for taxation |
|
518,779 |
335,993 |
|
|
|
------------------ |
------------------ |
|
| Surplus
on revaluation of fixed assets |
|
(319,826) |
(4,512,131) |
|
|
| Operating
Profit Before Changes |
|
|
14,948,958 |
3,187,429 |
|
|
|
|
|
|
| (Increase)/Decrease
In Current Assets: |
|
|
|
| Stock
of material, stores and spares |
|
2,586,519 |
13,288,049 |
|
| Contract
receivables |
|
|
(38,443,367) |
(8,201,370) |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables |
|
|
(2,493,775) |
2,411,580 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(38,350,623) |
7,498,259 |
|
| Increase/(Decrease)
In Current Liabilities: |
|
| Bills discounted |
|
|
10,000,000 |
-- |
|
| Creditors
and accrued expenses |
|
|
38,594,764 |
(28,879,170) |
|
| Mobilization
and material advances. |
|
30,272,407 |
(14,654,652) |
|
|
------------------ |
------------------ |
|
|
|
78,867,171 |
(43,533,822) |
|
|
|
------------------ |
------------------ |
|
| Net
Cash From Operating Activities |
|
55,465,506 |
(32,848,134) |
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Fixed
capital expenditure |
|
|
(8,494,260) |
(1,595,178) |
|
| Investments |
|
|
(2,586,841) |
(3,031,891) |
|
| Proceeds
from sales of fixed assets |
|
287,936 |
427,130 |
|
| Process
from sale of Chakwal Cement Co. shares |
|
178,000 |
-- |
|
|
------------------ |
------------------ |
|
|
|
(10,615,165) |
(4,199,939) |
|
|
|
|
------------------ |
------------------ |
|
|
| Net
Cash After Operating Activities |
|
44,850,341 |
(37,048,073) |
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Gratuity paid |
|
(1,218,300) |
(458,310) |
|
|
|
------------------ |
------------------ |
|
| NET
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS |
43,632,041 |
(37,506,383) |
|
| CASH
AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR |
16,629,149 |
54,135,532 |
|
|
|
|
------------------ |
------------------ |
|
| CASH
AND CASH EQUIVALENTS AT THE END OF THE YEAR |
60,261,190 |
16,629,149 |
|
|
|
|
========== |
========== |
|
|
| RAWALPINDI:
November 28, 2000. |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
| Gammon
Pakistan Limited (the "company") is a public limited quoted company
incorporated in Pakistan. |
|
| The
company is principally engaged in execution of civil construction works. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| The
following accounting policies have been applied consistently in dealing with
items which are |
|
| considered
material to the company's accounts. |
|
|
| 2.1
Basis of accounting |
|
| These
accounts are drawn up under the historical cost convention and Schedule - IV
of the Companies |
|
| Ordinance,
1984, as modified by the revaluation of fixed assets. |
|
|
| 2.2
Retirement gratuity |
|
| The
company operates an unfunded gratuity scheme and provision is made annually
to cover obligations |
|
| under
the scheme. |
|
|
| 2.3 Investments |
|
| These
are stated at cost. |
|
|
| 2.4 Taxation |
|
| Provision
for current taxation is based on current rates of tax. |
|
|
| 2.5
Tangible fixed assets |
|
| Depreciation
is provided on straight line basis on the cost or valuation of all fixed
assets, except freehold land, |
|
| to
write off ninety percent of the value over the useful life of the asset. The
remaining ten percent is written off on |
|
| retirement.
Maintenance and normal repairs are charged to income as and when incurred;
major renewals and |
|
| improvements
are capitalised. Gains and losses on disposal of fixed assets are taken to
the profit and loss |
|
| account. |
|
|
| 2.6
Stocks and spares |
|
| Inventories
are valued as follows: |
|
|
|
|
| Materials |
|
- At cost determined
generally on "first-in-first-out" basis. |
|
| Spare Parts: |
|
|
|
|
| Fast Moving |
|
- At average cost. |
|
| Slow Moving |
|
- At the lower of average
cost and estimated realiseable value. |
|
| Other Stocks |
|
-At average cost. |
|
|
| 2.7
Revenue recognition |
|
| Revenue
on works in progress is recognised on the basis of actual work completed on
projects. |
|
|
| 2.8
Contract receivables |
|
| Known
bad debts are written off, while debts considered doubtful of recovery are
fully provided for. |
|
|
|
| 2.9
|
