| Ideal Energy Limited |
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| CONTENTS |
|
|
| COMPANY
INFORMATION |
|
| NOTICE
OF MEETING |
|
| DIRECTORS
REPORT |
|
| AUDITORS
REPORT |
|
| BALANCE
SHEET |
|
|
| PROFIT
AND LOSS ACCOUNT |
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| NOTES
TO THE ACCOUNTS |
|
| PATTERN
OF SHAREHOLDING |
|
|
|
| LIST
OF DIRECTORS |
|
|
| CHAIRMAN: |
|
| NISAR
AHMED SHEIKH |
|
|
| CHIEF
EXECUTIVE: |
|
| MUHAMMAD
ARSHAD SHEIKH |
|
|
| DIRECTORS: |
|
| MUHAMMAD
SAEED |
|
| MUHAMMAD
ANWAR SAJJAD |
|
| AMJAD
SAEED |
|
| SHAHZAD
AHMED |
|
| NAUREEN
SHAHZAD |
|
|
| SECRETARY: |
|
| JAVED
ABBAS NAQVI |
|
|
| AUDITORS: |
|
| M.
YOUSUF ADIL SALEEM & CO., |
|
| CHARTERED
ACCOUNTANTS |
|
|
| BANKERS: |
|
| FAYSAL
BANK LIMITED. |
|
| HABIB
BANK LIMITED |
|
|
| REGISTERED
OFFICE AND SHARES DEPARTMENT: |
|
| 404,
405 4TH FLOOR |
|
| BUSINESS
CENTRE |
|
| DUNOLLY
ROAD, |
|
| KARACHI
- PAKISTAN |
|
|
| PLANT: |
|
| SHEIKHUPURA
ROAD, |
|
| TEHSIL
JARANWALA, |
|
| DISTRICT
FAISALABAD. |
|
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the 5th Annual General Meeting of IDEAL
ENERGY LIMITED will be |
|
| held
at 404-405 4th Floor Business Centre, Dunolly Road, Karachi on Wednesday
December 29, |
|
| 1999
at 10:00 a.m to transact the following business: |
|
|
| 1.
To confirm the minutes of the last Annual General Meeting held at December
28, 1998. |
|
|
|
|
| 2.
To receive, consider and adopt the audited accounts for the year ended June,
30, 1999 |
|
| together
with the Auditor's and Director's report thereon. |
|
|
|
|
| 3.
To approve the payment of cash dividend @ 25.00% (Rs.2.50 per share) in the
ordinary |
|
| share
capital of the Company as recommended by the Board of Directors. |
|
|
|
|
| 4.
To appoint auditors for the current year and fix their remuneration. The
present auditors |
|
| M/s
M. Yousuf Adil Saleem & Co; Chartered Accountants,
being eligible, have offered |
|
| themselves
for re-appointment. |
|
|
|
|
|
|
| To
discuss any other matter with the permission of the chair. |
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|
|
|
BY ORDER OF THE BOARD |
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|
|
|
|
|
|
|
|
|
|
| KARACHI. |
|
|
JAVED ABBAS NAQVI, |
|
| DATED:
25-11-1999 |
|
COMPANY SECRETARY. |
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|
|
|
|
| NOTES: |
|
|
| 1.
The share transfer book of the company remain closed from 29th December 1999
to 3rd |
|
| January
2000 (both days inclusive). Transfers received in order at the registered
office of |
|
| the
company at the close of business hours on 28th December 1999 will be treated
in time |
|
| for
the purpose of payment of dividend to transferees. |
|
|
|
|
|
| 2.
A member entitle to attend and vote this meeting may appoint another member
as proxy. |
|
|
|
|
| 3.
Proxies in order to be effective must be received at the Registered office of
the company |
|
| not
less than 48 Hours before the time of meetings and must be duly stamped-and
signed. |
|
|
|
|
| 4.
Share holders are requested to promptly notify the company of change in their
addresses. |
|
|
|
| DIRECTOR'S
REPORT TO THE MEMBERS. |
|
|
| In
the name of Allah the Most Merciful & Host Benevolent. |
|
|
| The
Directors take pleasure in presenting their Annual Report together with the
Company's financial |
|
| Statement
for the year ended June 30, 1999 and the Auditor's report there on. |
|
|
| The
Company started commercial operation from December 01, 1995. The year under
review is a |
|
| Third
completed year of our commercial operation. |
|
|
| Operating
results during 01-07-1998 to 30-06-1999 are given bellow. |
|
|
| Operating Profit |
|
|
|
53,732,748 |
|
| Loss
on Disposal of |
|
|
(1,080) |
|
| Fixed Assets |
|
|
|
------------------ |
|
|
|
|
53,731,668 |
|
|
|
|
|
|
| Less;
Financial Charges |
|
|
16,405,123 |
|
| Other Charges |
|
|
2,503,089 |
|
|
|
|
------------------ |
|
|
|
|
18,908,212 |
|
|
| Profit
For the Year |
|
|
34,823,456 |
|
| Unappropriated
profit B/F |
|
|
19,032,776 |
|
|
|
|
------------------ |
|
| Profit
Available for Appropriations |
|
53,856,232 |
|
| Proposed
cash dividend @ 25.00% |
|
20,000,000 |
|
|
|
|
------------------ |
|
| Unappropriated
Profit c/f |
|
|
33,856,232 |
|
|
|
|
========== |
|
|
|
|
| Due
to smooth operating of the engines the profit for the year has increased from
19.229 million to |
|
| Rs.34.823
million i.e and increase of 81%. |
|
|
| Your
company has earned Net Profit Rs.34.823 million during the year. |
|
|
| The
Board of Directors are pleased to propose cash dividend @ 25.00% for the year
ended June |
|
| 30,
1999 i.e 57.43% of net profit. |
|
|
| Pattern
of Share Holding |
|
|
| A
statement reflecting the distribution of shareholding as on June 30, 1999 is
attached to the |
|
| Annual Report. |
|
|
| In
the end I would like to thanks the workers, staff and officers of your
company for their hard |
|
| work,
zeal and dedication. I am confident that Inshallah with their wholehearted
support and |
|
| increase
productivity better results will be obtained during the current year. |
|
|
|
|
NISAR AHMED SHEIKH |
|
|
|
CHAIRMAN |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Ideal Energy Limited as at June 30,
1999 and the |
|
| related
profit and loss account and statement of changes in financial position (cash
flow statement) |
|
| 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 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 the
explanations given to |
|
| us,
the balance sheet and profit and loss account and the statement of changes in
financial |
|
| position
(cash flow statement) together with the notes forming part thereof, give the |
|
| information
required by the Companies Ordinance, 1984, in the manner so required and |
|
| respectively
give a true and fair view of the state of the Company's affairs as at June
30, |
|
| 1999
and of the profit and the changes in financial position for the year then
ended; and |
|
|
| (d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was |
|
| deducted
by the Company and deposited in the Central Zakat Fund established Under |
|
| Section
7 of that Ordinance. |
|
|
|
|
| Date:
25 Nov 1999 |
|
M. Yousuf Adil Saleem & Co. |
|
| Faisalabad. |
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
Capital |
|
|
|
| 10,000,000
Ordinary |
|
|
|
| shares
of Rs. 10/- each |
|
100,000,000 |
100,000,000 |
|
|
|
|
========== |
========== |
|
| :Issued,
subscribed and |
|
|
|
| paid up capital |
|
|
|
| 8,000,000
Ordinary shares |
|
|
|
| of
Rs. 10/-each fully |
|
|
80,000,000 |
80,000,000 |
|
| paid in cash |
|
|
| Capital
reserve-share |
|
|
80,000,000 |
80,000,000 |
|
| premium |
|
|
48,856,232 |
34,032,776 |
|
| Revenue
reserves |
|
3 |
------------------ |
------------------ |
|
|
|
|
208,856,232 |
194,032,776 |
|
| Liabilities
Against Assets |
|
|
|
| Subject
To Finance Lease |
|
4 |
38,252,621 |
71,748,632 |
|
|
|
|
| Deferred
Liability |
|
|
|
| Staff
retirement gratuity |
|
|
855,330 |
643,823 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term bank borrowing |
|
5 |
5,325,000 |
10,000,000 |
|
| Current
portion of |
|
|
|
| Lease liabilities |
|
|
33,496,011 |
30,294,384 |
|
| Creditors,
accrued and |
|
|
|
| Other liabilities |
|
6 |
9,516,370 |
10,496,701 |
|
| Dividends |
|
7 |
20,003,762 |
10,002,450 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
68,341,143 |
60,793,535 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
316,305,326 |
327,218,766 |
|
|
|
|
========== |
========== |
|
|
| OPERATING
ASSETS |
|
8 |
236,421,489 |
261,589,132 |
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
|
| AND
DEFERRED COSTS |
|
9 |
13,649,407 |
14,298,812 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and |
|
|
|
| Loose tools |
|
10 |
9,150,592 |
5,891,449 |
|
| Stock of oil and |
|
|
|
| lubricants |
|
11 |
14,094,292 |
10,367,730 |
|
| Debtors |
|
12 |
36,115,441 |
29,833,497 |
|
| Advances,
deposits |
|
|
|
| prepayments
and other |
|
|
|
| receivables |
|
13 |
5,339,959 |
3,015,514 |
|
| Cash
and bank balances |
|
14 |
1,534,146 |
2,222,632 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
66,234,430 |
51,330,822 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
316,305,326 |
327,218,766 |
|
|
|
|
|
========== |
========== |
|
| The
annexed notes from 1 to 26 form |
|
| An
integral part of these accounts. |
|
|
|
MUHAMMAD ARSHAD |
|
NISAR AHMED SHEIKH |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
NOTE |
Rupees |
Rupees |
|
|
|
|
| Sales
of electric energy |
|
15 |
254,047,927 |
243,674,412 |
|
| Cost
of generation |
|
16 |
196,455,006 |
196,780,182 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
57,592,921 |
46,894,230 |
|
| Operating
expenses |
|
17 |
3,860,173 |
3,641,201 |
|
|
|
|
------------------ |
------------------ |
|
| Operating Profit |
|
53,732,748 |
43,253,029 |
|
| Loss
on disposal of |
|
|
|
| Fixed assets |
|
|
< 1,080 > |
< 56,933 > |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
53,731,668 |
43,196,096 |
|
|
|
|
|
| Other charges |
|
|
|
|
| Financial |
|
18 |
16,405,123 |
22,290,803 |
|
| Amortisation
of deferred |
|
|
| Costs |
|
|
649,405 |
649,405 |
|
| Worker' s profit |
|
|
| Participation
fund |
|
|
1,853,684 |
1,027,020 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
18,908,212 |
23,967,228 |
|
|
|
|
------------------ |
------------------ |
|
| Net
profit for the year |
|
34,823,456 |
19,228,868 |
|
| Unappropriated
profit brought |
|
|
| Forward |
|
19,032,776 |
9,803,908 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriations |
|
53,856,232 |
29,032,776 |
|
|
|
|
|
| Appropriation |
|
|
|
| Proposed
cash dividend 25% |
|
|
| (1998 12.5%) |
|
|
20,000,000 |
10,000,000 |
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
33,856,232 |
19,032,776 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form 1 to 26 form |
|
| an
integral part of these accounts. |
|
|
|
MUHAMMAD ARSHAD |
|
NISAR AHMED SHEIKH |
|
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 1999. |
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| a)
CASH FLOW FROM OPERATING ACTIVITIES |
|
| Net
profit for the year |
|
34,823,456 |
19,228,868 |
|
| Depreciation |
|
26,572,523 |
29,370,353 |
|
| Amortisation
of deferred costs |
|
649,405 |
649,405 |
|
| Provision
for gratuity |
|
278,369 |
402,674 |
|
| Gratuity paid |
|
< 66,862 > |
< 13,504 > |
|
| Loss
on disposal of |
|
|
| Fixed assets |
|
1,080 |
56,933 |
|
| Financial
charges |
|
16,405,123 |
22,290,803 |
|
|
|
------------------ |
------------------ |
|
| Operating
profit before |
|
|
| Working
capital changes |
|
78,663,094 |
71,985,532 |
|
|
|
------------------ |
------------------ |
|
|
|
|
| Change
is working capital |
|
|
|
| (Increase)/decrease
in |
|
|
|
| current assets |
|
|
|
| Stores,
spares and |
|
|
|
| Loose tools |
|
|
< 3,259,143 > |
< 5,206,235 > |
|
| Stock of oil and |
|
|
|
|
| Lubricants |
|
|
< 3,726,562 > |
4,155,465 |
|
| Debtors |
|
|
< 6, 281,944 > |
1,237,483 |
|
| Advances,
deposits, |
|
|
|
|
| Prepayments
and |
|
|
|
|
| Other
receivables |
|
|
< 2,324,445 > |
< 476,936 > |
|
| Increase/(decrease)
in |
|
|
|
| Current
liabilities |
|
|
|
| Creditors,
accrued and |
|
|
|
| Other liabilities |
|
|
2,652,683 |
297,593 |
|
|
|
|
------------------ |
------------------ |
|
|
|
< 12,939,411 > |
7,370 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from |
|
|
|
| Operations |
|
|
65,723,683 |
71,992,902 |
|
| Financial
charges paid |
|
|
< 20,038,137 > |
< 21,594,799 > |
|
|
|
|
------------------ |
------------------ |
|
| Net cash from |
|
|
|
|
| Operating
activities |
|
|
45,685,546 |
50,398,103 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| b)
CASH FLOW FROM INVESTING ACTIVITIES |
|
|
| Fixed
Capital expenditure |
|
< 1,422,880 > |
< 5,481,335 > |
|
| Proceeds
from disposal |
|
|
|
| Of fixed asset |
|
16,920 |
5,753,769 |
|
|
|
------------------ |
------------------ |
|
| Net
Cash (Used in)/From Investing activities |
|
< 1,405,960 > |
272,434 |
|
|
|
------------------ |
------------------ |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Repayment of: |
|
|
|
|
| Long term loans |
|
-- |
< 31,967,000 > |
|
| Lease liabilities |
|
< 30,294,384 > |
< 20,159,923 > |
|
| Short
term bank borrowing |
|
< 4,675,000 > |
10,000,000 |
|
| Payment
of dividend |
|
< 9,998,688 > |
< 23,997,550 > |
|
|
|
------------------ |
------------------ |
|
| Net
cash used in |
|
|
|
| Financing
activities |
|
< 44,968,072 > |
< 66,124,473 > |
|
|
|
|
------------------ |
------------------ |
|
| Net
decrease in cash and |
|
|
|
| Bank
balances (a+b+c) |
|
< 688,486 > |
< 15,453,936 > |
|
| Cash
and bank balances at the |
|
|
|
| Beginning
of the year |
|
2,222,632 |
17,676,568 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and bank balances at the |
|
|
|
|
| End of the year |
|
|
1,534,146 |
2,222,632 |
|
|
|
|
========== |
========== |
|
|
|
MUHAMMAD ARSHAD |
|
NISAR AHMED SHEIKH |
|
|
Chief Executive |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS JUNE 30, 1999 |
|
|
| 1.
STATUS AND ACTIVITIES |
|
| The
Company was incorporated on February 20, 1994, under the Companies Ordinance,
1984 |
|
| and
quoted at stock exchanges in Pakistan. The main object of the Company is
generation and |
|
| distribution
of electricity. The project is located at Tehsil Jaranwala, District
Faisalabad in the |
|
| province
of Punjab. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
|
| 2.1
Accounting convention |
|
|
| These
accounts have been prepared under "historical Cost convention". |
|
|
| 2.2
Staff Retirement benefits |
|
| The
Company operates an unfunded gratuity scheme covering all its employees. |
|
| Provision
is made annually to cover the liability under the scheme. |
|
|
| 2.3
Operating assets |
|
| Operating
assets except freehold land are stated at cost less accumulated |
|
| depreciation.
Freehold land is stated at cost. |
|
|
| Depreciation
is charged to income applying the reducing balance method at the |
|
| rates
specified in the operating assets note. |
|
|
| Depreciation
on additions during the year is charged to income on the basis of |
|
| whole
year, however, depreciation for proportionate period of use is charged on |
|
| major
project cost capitalised during the year. No depreciation is charged on |
|
| deletions
during the year. |
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. Major |
|
| renewals
and improvements are capitalised. |
|
|
| Gains
and losses on disposal of assets are included in current income. |
|
|
| 2.4
Accounting for leases |
|
| The
Company accounts for the assets acquired under finance lease by recording the |
|
| assets
and related liability. Financial charges are allocated to accounting periods
in |
|
| a
manner so as to provide a constant periodic rate of charge on the outstanding |
|
| liability.
Depreciation is charged at the rate specified in the related not, to write
off |
|
| the
asset over its estimated useful life in view of certainty of ownership of the
asset |
|
| at
the end of lease period. |
|
|
| 2.5
Deferred costs |
|
|
|
| These
are amortised over a maximum period of five years from the year of |
|
| deferment. |
|
|
|
|
|
|
| 2.6
Stores, spares and loose tools |
|
|
|
| These
are valued at moving average cost except items in transit which are valued at |
|
| cost
comprising invoice value and other charges incurred thereon. |
|
|
| 2.7
Stock of oil and lubricants |
|
|
|
| These
are valued at lower of cost and net realisable value. Cost has been |
|
| determined
using the average cost method except items in transit which are valued |
|
| at
cost comprising the invoice value and other charges incurred thereon. |
|
|
|
|
| 2.8 Debtors |
|
|
|
| Known
bad debts are written off and provisions are made for debts considered |
|
| doubtful. |
|
|
|
|
|
|
| 2.9
Revenue recognition |
|
|
|
| Revenue
is recognised as the services are rendered. |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| 3.
Revenue reserves |
|
|
|
| General reserve |
|
15,000,000 |
15,000,000 |
|
| Unappropriated
profit |
|
33,856,232 |
19,032,776 |
|
