| Mari Gas Co Ltd - 2004 |
============================================================================== BALANCE SHEET AS AT JUNE 30, 2004 ============================================================================== 2004 2003 Note (Rupees in thousand) ============================================================================== SHARE CAPITAL, RESERVES AND SURPLUS Authorised capital 250,000,000 ordinary shares of Rs 10 each 2,500,000 2,500,000 Issued, subscribed and paid up capital 3 367,500 367,500 General reserve 2,046 2,046 Undistributed percentage return reserve 4 158,127 120,720 Profit and loss account 5 1,830,035 1,458,480 2,357,708 1,948,746 LONG TERM LOAN AND DEFERRED LIABILITIES Long term loan-secured 6 560,500 784,700 Deferred income tax 7 307,387 228,882 Decommissioning cost 8 1,310,089 1,285,272 Other deferred liabilities 9 87,857 27,868 2,265,833 2,326,722 CURRENT LIABILITIES Current maturity of long term loan 6 224,200 224,200 Accrued and other liabilities 10 2,211,158 2,228,223 2,435,358 2,452,423 CONTINGENCIES AND COMMITMENTS 11 7,058,899 6,727,891 FIXED CAPITAL EXPENDITURE Operating assets 12 3,546,158 3,262,325 Capital work in progress 13 185,718 304,044 3,731,876 3,566,369 LONG TERM LOANS, ADVANCES, DEPOSITS AND PREPAYMENTS 14 9,292 8,089 CURRENT ASSETS Stores and spares 15 173,770 196,927 Trade debts-unsecured, considered good 16 857,227 876,514 Loans, advances and prepayments 17 99,919 52,265 Income tax 40,598 97,727 Other receivables 18 62,572 63,093 Cash and bank balances 19 2,083,645 1,866,907 3,317,731 3,153,433 7,058,899 6,727,891 ============================================================================== ============================================================================== PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2004 ============================================================================== 2004 2003 Note (Rupees in thousand) ============================================================================== Sales 20 14,089,290 12,144,087 Less: Development surcharge 8,870,416 7,332,563 General sales tax 1,858,900 1,618,622 Excise duty 597,194 756,734 11,326,510 9,707,919 Sales - net 2,762,780 2,436,168 Less: Royalty 344,972 304,180 2,417,808 2,131,988 Operating expenses 21 969,267 806,320 Exploration expenditure 22 457,568 175,691 1,426,835 982,011 Operating profit 990,973 1,149,977 Other income 23 50,877 81,745 1,041,850 1,231,722 Financial charges 24 38,320 113,094 Other charges 25 66,708 66,277 105,028 179,371 Profit before taxation 936,822 1,052,351 Taxation 26 368,152 222,471 Profit after taxation 568,670 829,880 Prior years' adjustment 27 48,870 183,866 Profit for the year 519,800 646,014 Unappropriated profit brought forward 1,458,480 951,163 Profit available for appropriation 1,978,280 1,597,177 Appropriations/transfers: Dividends - 1st interim @ 20.16 % (2003: 20 %) 74,088 73,500 - 2nd interim @ 10 % (2003: 10 %) 36,750 36,750 Transferred to unappropriated percentage return reserve - note 4.1 37,407 28,447 148,245 138,697 Unappropriated profit carried forward 1,830,035 1,458,480 Earnings per share - Rupees 28 14.14 17.58 ============================================================================== ============================================================================== CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2004 ============================================================================== 2004 2003 Note (Rupees in thousand) ============================================================================== Cash flow from operating activities Cash generated from operations 29 1,302,070 2,393,476 Long-term loans, advances, deposits and prepayments (1,203) (791) Deferred credits 7,052 (51,783) Taxes paid (232,517) (206,640) 1,075,402 2,134,262 Cash flow from investing activities Fixed capital expenditure (505,536) (704,183) Sale proceeds of fixed assets 4,917 2,320 Interest received 44,834 70,679 (455,785) (631,184) Cash flow from financing activities Long-term loan repaid (224,200) (112,100) Financial charges paid (38,756) (115,476) Dividends paid (139,923) (80,508) (402,879) (308,084) Increase in cash and bank balances 216,738 1,194,994 Cash and bank balances at beginning of the year 1,866,907 671,913 Cash and bank balances at end of the year 2,083,645 1,866,907 ============================================================================== =========================================================================================
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2004
=========================================================================================
Undistributed Unappropriated
Share General Percentage profit and loss
capital reserve return reserve account Total
(Rupees in thousand)
=========================================================================================
Balance as at June 30, 2002 367,500 2,046 92,273 951,163 1,412,982
Profit for the year - - - 646,014 646,014
Dividends - - - (110,250) (110,250)
Transferred to undistributed
percentage return reserve - - 28,447 (28,447) -
Balance as at June 30, 2003 367,500 2,046 120,720 1,458,480 1,948,746
Profit for the year - - - 519,800 519,800
Dividends - - - (110,838) (110,838)
Transferred to undistributed
percentage return reserve - - 37,407 (37,407) -
Balance as at June 30, 2004 367,500 2,046 158,127 1,830,035 2,357,708
=========================================================================================NOTES TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 20041. LEGAL STATUS AND OPERATIONS The Company is a public limited company incorporated in Pakistan under the Companies Ordinance, 1984 and its shares are listed at all stock exchanges of Pakistan. The Company is principally engaged in drilling, exploration, production and sale of natural gas. The gas price mechanism is governed by Mari Gas Well Head Price Agreement dated December 22, 1985 between the President of Islamic Republic of Pakistan and the Company. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1. BASIS OF PREPARATION These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984. Approved accounting standards comprise of such International Accounting Standards as notified under the provisions of the Companies Ordinance, 1984. Wherever, the requirements of the Companies Ordinance, 1984 or directives issued by the Securities and Exchange Commission of Pakistan differ with the requirements of these standards, the requirements of Companies Ordinance, 1984 or the requirements of the said directives take precedence. These financial statements have been prepared on the historical cost convention. 2.2. GAS PRICE MECHANISM In terms of Mari Gas Well Head Price Agreement dated December 22, 1985 between the President of Islamic Republic of Pakistan and Mari Gas Company Limited, wellhead gas price for each ensuing year is determined in accordance with the principles of gas price formula set out in Article II of the Agreement. The Agreement states that the gas price will be at the minimum level to ensure that total revenues generated from sale of gas and other income are sufficient to provide a minimum return of 30%, net of all taxes, on Shareholder Funds (as defined in the Agreement) after meeting specified ratios and deductibles. The return to shareholders shall be escalated in the event of increase in the Company's gas production beyond the level of 425 MMSCFD at the rate of 1%, net of all taxes, on Shareholder Funds for each additional 20 MMSCFD of gas or equivalent oil produced, prorated for part thereof on annual basis, subject to a maximum of 45%. The minimum return to shareholders for the year was 30.47% (2003: 30.16%). Effective July 01, 2001, the Government has authorized the Company to incur expenditure not exceeding the Rupee equivalent of US$ 20,000,000 per annum or 30% of the Company's annual gross sales revenue as disclosed in the last audited accounts, whichever is less in connection with exploration and development in any Concession area other than Mari Field provided that if such exploration and development result in additional oil and gas production, the revenues generated from such additional oil or gas production shall be credited to and treated as revenue under the Agreement referred to above. 2.3. TAXATION Provision for current taxation is based on taxable income at the current rate of taxation. The Company accounts for deferred taxation on all timing differences, using the 'Liability Method'. Deferred tax liability has been calculated at the estimated effective rate of 25% after taking into account availability of depletion allowance. 2.4. PROVISIONS Provisions are recognized when the Company has a present obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and reliable estimates can be made of the amount of obligation. 2.5. DECOMMISSIONING COST Estimated cost to abandon and remove wells and production facilities at Mari Field is capitalised under fixed assets and amortised on unit-of-production basis. The amount is based on estimated expenditure which would be incurred should decommissioning occur at the balance sheet date and is reassessed each year. The decommissioning is expected to occur over the next 22 years. 2.6. EMPLOYEES' RETIREMENT BENEFITS THE COMPANY OPERATES i) Defined benefit funded pension and gratuity schemes for its management employees and defined a benefit funded gratuity scheme for its non-management employees. Contributions are made to these schemes on the basis of actuarial recommendations. Actuarial valuations are conducted periodically using Projected Unit Credit Actuarial Cost method and the latest valuation was carried out as at June 30, 2004. The results of the valuation are summarized in note 30 to the accounts. The transitional liability is amortized over five years. Actuarial gains and losses are amortized over the expected remaining service of employees. ii) Defined benefit unfunded pension scheme for its non-management employees. Liability related to accumulated period of service of eligible employees is provided based on actuarial valuation. The latest valuation was carried out as at June 30, 2004 using discount rate of 8% p.a. and pension increase rate of 2% p.a. iii) Defined contribution provident fund for its permanent employees for which contributions are charged to income for the year. An amount of Rs 7.646 million (2003: Rs 6.339 million) has been charged to profit and loss account during the year in respect of this scheme. iv) From the current year, the Company has accrued post retirement medical benefit of its management employees based on actuarial valuation carried out as at June 30, 2004 using discount rate of 8% p.a. and increase in cost of medical benefit of 5% p.a. The change in accounting policy has resulted in charge for the year of Rs 3.997 million and for prior years Rs 35.445 million. However, the change in accounting policy does not affect the current year or prior years' profits of the Company due to gas price mechanism explained in note 2.2 to the accounts. v) From the current year, the Company has accrued post retirement leave of its management employees based on actuarial valuation carried out as at June 30, 2004 using discount rate of 8% p.a. and salary increase rate of 8% p.a. The change in accounting policy has resulted in charge for the year of Rs 1.682 million and for prior years Rs 13.425 million. However, the change in accounting policy does not affect the current year or prior years' profits of the Company due to gas price mechanism explained in note 2.2 to the accounts. 2.7. FIXED CAPITAL EXPENDITURE Operating assets except freehold land are stated at cost less accumulated depreciation. Freehold land and capital work in progress are stated at cost. Depreciation on fixed assets and amortisation of drilling expenditure related to Mari Field are charged to income using straight line method at the rates specified in note 12. Acquisition cost of leases, where commercial reserves have been discovered, are capitalized and amortized on unit of production basis. The full calendar quarter's depreciation is charged on additions during a calendar quarter, while no depreciation is charged for the calendar quarter during which the asset is disposed. Gains and losses on disposals are taken to income in the year of disposal. Maintenance and repairs are charged to income as and when incurred. 2.8. STORES AND SPARES These are valued at moving average cost less allowance for obsolete items. Material in transit is valued at cost. 2.9. FOREIGN CURRENCY TRANSLATION Transaction in foreign currencies are recorded at the rate of exchange prevailing on the date of the transaction. Assets and liabilities in foreign currencies are translated into rupees at the rate of exchange ruling at the balance sheet date. Exchange gains and losses are taken into income except on foreign currency loans obtained for Mari Gas Field which are capitalised till the date of substantial completion of a project. 2.10. REVENUE RECOGNITION Sales are recorded on delivery of gas to customers. Income on bank deposits is proportionately accrued upto the balance sheet date. 2.11. EXPLORATION EXPENDITURE - OTHER THAN MARI FIELD Exploration expenditure incurred in concession areas other than Mari Field is expensed as incurred. Transactions related to joint venture operations in which the Company has a working interest are accounted for on the basis of latest available audited accounts of the joint venture and where applicable, the cost statements received from the operator of the joint venture, for the intervening period up to the balance sheet date. 2.12. BORROWING COST Borrowing cost is expensed as incurred. 2.13. FINANCIAL INSTRUMENTS Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are initially recognised at cost, which is the fair value of the consideration given and received. These are subsequently measured at fair value, amortised cost or cost, as the case may be. 3. ISSUED, SUBSCRIBED AND PAID UP CAPITAL ==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
24,850,007 (2003: 24,850,007) ordinary shares of
Rs 10 each for cash 248,500 248,500
11,899,993 (2003: 11,899,993)
ordinary shares of Rs 10 each for
consideration other than cash 119,000 119,000
367,500 367,500
==============================================================================4. UNDISTRIBUTED PERCENTAGE RETURN RESERVE4.1. OPENING BALANCE ==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
120,720 92,273
Transferred from profit and loss account 37,407 28,447
158,127 120,720
==============================================================================4.2. The amount held in this reserve represents the balance of the percentage return reserve on shareholders' funds as defined in the Mari Gas Well Head Price Agreement.5. PROFIT AND LOSS ACCOUNT The amount of Rs 1,830,035 thousands represents the following: 5.1. UNDISTRIBUTABLE BALANCE The amount of Rs 1,828,308 thousands, which is not distributable, has been provided through the operation of Article II of Mari Gas Well Head Price Agreement to meet the obligations and to the extent Indicated for the following: ===========================================================================
Generated
Generated during the
upto year ended
June 30, June 30,
2003 2004 Total
(Rupees in thousand)
===========================================================================
a) Rupee element of capital expenditure
(net of depreciationmortization) and
repayment of borrowings 1,193,121 370,416 1,563,537
b) Maintenance of debt service ratio 90,234 - 90,234
c) Maintenance of current ratio 174,537 - 174,537
Total 1,457,892 370,416 1,828,308
2003 951,163 506,729 1,457,892
===========================================================================5.2. DISTRIBUTABLE BALANCE==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Undistributed guaranteed return (see note below) 1,727 588
==============================================================================6. LONG TERM LOAN-SECURED==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
From Habib Bank Limited - note 6.1 784,700 1,008,900
Less: Current maturity shown under current liabilitie 224,200 224,200
560,500 784,700
==============================================================================6.1. On September 15, 2000, the Company entered into an agreement with Habib Bank Limited for financing of its Goru-B Project on mark-up basis. The total amount disbursed is Rs 1,121 million with a corresponding "Marked-up Price" of Rs 2,125 million.The mark-up is payable quarterly on the basis of last successful auction of six months treasury bills cut-off yield plus 1.50% (2003: average of the last three auctions plus 2.50%) per annum. The effective mark-up rate during the year was 3.20% (2003: 9.47%) per annum. The loan is repayable in ten half-yearly installments commencing March 2003. The loan is secured by mortgage, hypothecation and floating charges created against all present and future assets of the Company. 7. DEFERRED INCOME TAX ==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Accelerated tax depreciation 321,837 230,098
Unfunded retirement benefits (14,450) (1,216)
Deferred income tax liability 307,387 228,882
==============================================================================8. DECOMMISSIONING COST==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Opening balance 1,285,272 -
Provision during the year 24,817 1,285,272
Closing balance 1,310,089 1,285,272
==============================================================================9. OTHER DEFERRED LIABILITIES==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Post retirement medical benefit 38,414 -
Post retirement leave 14,496 -
Unfunded pension scheme for non-management
employees-note 9.1 4,890 4,863
Deferred credits - minimum billing to customers 30,057 23,005
87,857 27,868
==============================================================================9.1. UNFUNDED PENSION SCHEME FOR NON-MANAGEMENT EMPLOYEES==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Balance at beginning of the year 4,863 4,154
Charge for the year 27 709
Balance at end of the year 4,890 4,863
==============================================================================10. ACCRUED AND OTHER LIABILITIES==============================================================================
2004 2003
Note (Rupees in thousand)
==============================================================================
Development surcharge 1,475,112 1,335,516
General sales tax 153,179 145,018
Excise duty 48,489 65,434
Interest on long term loan 722 1,158
Workers' welfare fund 51,460 32,484
Workers' profits participation fund 10.1 47,733 55,931
Staff retirement funds 29,701 23,520
Retention and earliest money deposits 5,500 7,264
Payable to joint venture partners 108,290 7,719
Other accrued liabilities 112,570 176,357
Unclaimed/unpaid dividend 10,353 39,438
Gas price surplus due to the President under the
provisions of Mari Gas Well Head Price Agreement 168,049 338,384
2,211,158 2,228,223
==============================================================================The accrued and other liabilities include Rs nil (2003: Rs 17.361 million) payable to an associated company.10.1. WORKERS' PROFITS PARTICIPATION FUND ==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Balance payable at beginning of the year 55,931 21,210
Add: Allocation for the year 47,733 55,931
Interest on delayed payment to the Fund 2,313 1,307
50,046 57,238
105,977 78,448
Less: Amount paid to the Fund (58,244) (22,517)
Balance payable at end of the year 47,733 55,931
==============================================================================11. CONTINGENCIES AND COMMITMENTS11.1. In terms of Ministry of Petroleum and Natural Resources instructions through their letters DGO(AC)-5(50)/94-1A and DGO(AC)-5(50)/95 dated March 30, 1995 and October 01, 1996 respectively, the Company was advised that interest on delayed payment from WAPDA and interest on delayed payment of development surcharge to the Government be taken into account after it is actually received/paid. Interest on delayed payment from WAPDA and interest on delayed payment of development surcharge to the Government at June 30, 2004 amounted to Rs 236.977 million (2003: Rs 202.821 million) and Rs 112.392 million (2003: Rs 112.392 million) respectively, which will be taken into account when it is actually received/paid. However, it does not affect the current year or future years' profit after taxation which includes the return available to shareholders under the Mari Gas Well Head Price Agreement. 11.2. OTHER CONTINGENCIES ==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
(i) Indemnity bonds given to Collector of Customs
against duty concessions on import of equipment
and materials 384,130 355,755
(ii) Claims for regulatory duty 10,059 10,059
==============================================================================11.3. COMMITMENTS==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
(i) Capital expenditure:
-Share in joint ventures 1,004,217 603,291
-Others 6,852 43,429
1,011,069 646,720
(ii) Operating lease rentals due:
Less than one year 5,070 4,037
-More than one year but less than five years 14,594 8,549
19,664 12,586
==============================================================================12. OPERATING ASSETS====================================================================================================================================
COST DEPRECIATION Written Annual
Down value rate
As at July Additions/ As at June As at July For the year/ As at June as at June of
Description 01, 2003 (deletions) 30, 2004 01, 2003 (on deletions) 30, 2004 30, 2004 depreciation
Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 Rs. '000 %
====================================================================================================================================
Freehold land 82,364 - 82,364 - - - 82,364 -
Leasehold land 8,910 42,001 50,911 855 320 1,175 49,736 1-3
Buildings on freehold land 241,488 53,447 294,935 78,635 14,288 92,923 202,012 5
Buildings on Leasehold land 45,519 - 45,519 14,687 2,276 16,963 28,556 5
Road and bridges 68,958 2,895 71,853 35,027 5,289 40,316 31,537 10
Drilling tools and equipment 21,432 - 21,432 21,432 - 21,432 - 20
Equipment and general plant 279,240 25,669 302,829 142,154 21,862 162,521 140,308 10
(2,080) (1,495)
Computer and Allied Equipment 42,013 10,519 52,247 21,529 11,163 32,407 19,840 25
(285) (285)
Gathering lines 622,587 140,620 763,207 412,776 35,245 448,021 315,186 10
Furniture and fixture 31,251 2,714 33,730 17,867 2,669 20,330 13,400 10
(235) (206)
Vehicles - heavy 116,084 14,037 127,385 90,167 16,814 104,245 23,140 30
(2,736) (2,736)
- light 55,198 27,336 78,443 27,301 12,444 36,086 42,357 20
(4,091) (3,659)
Drilling Expenditure - Mari Fi 2,157,851 268,339 2,426,190 918,885 185,352 1,104,237 1,321,953 10
Lease acquisition cost - Mari 91,147 - 91,147 53,224 1,641 54,865 36,282 Ref. note (Note 2.7)
- Zarghun South Field - 36,285 36,285 - - - 30,285 Ref. note (Note 2.7)
Decommissioning cost - Mari Fi 1,285,272 24,817 1,310,089 52,450 54,437 106,887 1,203,202 Ref. note (Note 2.5)
2004 5,149,314 648,679 5,788,566 1,886,989 363,800 2,242,408 3,546,158
(9,427) (8,381)
2003 3,305,908 1,848,080 5,149,314 1,553,187 337,788 1,886,989 3,262,325
(4,674) (3,986)
====================================================================================================================================12.2. DETAILS OF ASSETS DISPOSED OFF DURING THE YEAR==========================================================================================================================
Net
Accumulated book Sale
Description Cost depreciation value proceeds Mode of disposal Particulars of purchaser
(Rupees in thousand)
==========================================================================================================================
Equipment and general plant 655 365 290 26 Tender Miscellaneous
134 70 64 13 As per Company policy Brig. (Retd) Tariq Masood
Khan Niazi Executive
134 70 64 13 As per Company policy Parveiz Usman
Executive
87 45 42 9 As per Company policy Khurrum Khan
Executive
36 18 18 4 As per Company policy Mohammad Aqib Anwer
Executive
26 7 19 16 As per Company policy Munir A Memon
Executive
12 7 5 1 As per Company policy Mohammad Ali Mughal
Executive
12 7 5 1 As per Company policy Mohammad Ajmal Abbasi
Executive
29 16 13 3 As per Company policy Bashir Marshall
Ex-employee
6 3 3 1 As per Company policy Afzaal Latif Malik
Executive
949 887 62 33 Miscellaneous
2,080 1,495 585 120
Computer and allied equipmen 285 285 - 3 Tender Miscellaneous
Furniture and fixture 235 206 29 60 Tender Miscellaneous
Vehicles 785 353 432 785 Insurance claim M/s EFU General
Insurance Limited
988 988 - 950 Insurance claim M/s EFU General
Insurance Limited
733 733 - 73 As per Company policy Mian Abdul Ghafur Kausar
4,321 4,321 - 2,925 Miscellaneous
6,827 6,395 432 4,733
9,427 8,381 1,046 4,916
==========================================================================================================================13. CAPITAL WORK IN PROGRESS==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Goru - B project
Land 6,964 3,925
Others - 23,140
6,964 27,065
Phase VI project
Land 28,009 20,624
Building, roads and bridges - 10,819
Materials and equipment 12,250 94,669
Others 3,149 12,818
43,408 138,930
Mari Deep 12
Land 312 -
Materials and equipment 3,714 -
Others 746 -
4,772 -
Support of production
Land 9,952 45,556
Building, roads and bridges 88,587 51,402
Plant, machinery and others 32,035 41,091
130,574 138,049
185,718 304,044
==============================================================================14. LONG TERM LOANS, ADVANCES, DEPOSITS AND PREPAYMENTS - CONSIDERED GOOD==============================================================================
2004 2003
Note (Rupees in thousand)
==============================================================================
Loans and advances-considered good
-Executives 8,782 6,604
-Other employees 3,200 3,434
11,982 10,038
Less: Recoverable within one year 17
-Executives 4,863 4,340
-Other employees 1,243 1,545
6,106 5,885
5,876 4,153
Deposits 3,353 3,871
Prepayments 63 65
9,292 8,089
==============================================================================14.1. The amount outstanding for periods exceeding three years was Rs 0.667 million (2003: Rs 1.049 million).14.2. The maximum amount due from executives at the end of any month during the year was Rs 9.346 million (2003: Rs 7.766 million). 14.3. The loans and advances given to executives and employees represent transport loans and other advances repayable in 36 to 60 equal monthly installments. The loans and advances are interest free. 15. STORES AND SPARES ==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Stores 141,292 142,541
Spares 32,478 54,386
173,770 196,927
==============================================================================15.1. The stores stated above include stores valuing Rs 4.385 million (2003: Nil) representing the Company's share in the Joint Venture operated by ENI Pakistan Limited.16. TRADE DEBTS - UNSECURED, CONSIDERED GOOD ==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Water and Power Development Authority 493,796 544,193
Fauji Fertilizer Company Limited 265,413 252,847
Engro Chemicals Limited 97,657 78,571
Sui Southern Gas Company Limited 361 903
857,227 876,514
==============================================================================The amount due from an associated undertaking Fauji Fertilizer Company Limited was Rs 265.413 million as at June 30, 2004 (2003: Rs 252.847 million). The maximum amount outstanding at the end of any month during the year was Rs 294.972 million (2003: Rs 264.492 million).17. LOANS, ADVANCES AND PREPAYMENTS ==============================================================================
2004 2003
Note (Rupees in thousand)
==============================================================================
- considered good
Loans and advances 14
-Executives 4,863 4,340
-Other employees 1,243 1,545
6,106 5,885
Advances to suppliers and others 5,843 13,331
Royalty paid in advance 67,539 13,000
Short term prepayments 20,431 20,049
99,919 52,265
==============================================================================18. OTHER RECEIVABLES==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Receivable from Joint Ventures 54,017 14,385
Income on bank deposits 2,693 826
Sales tax paid under protest 1,709 1,709
Receivable from custom authorities 365 365
Octroi refundable 418 745
Exchange difference receivable from State Bank of Pak - 38,887
Others 3,370 6,176
62,572 63,093
==============================================================================19. CASH AND BANK BALANCES==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Cash in hand - 14
Balances with banks
Deposit accounts 2,079,725 1,863,630
Current accounts including US$ 7 thousand,
(2003: US$7thousand) 3,920 3,263
2,083,645 1,866,893
2,083,645 1,866,907
==============================================================================20. SALES==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Gross sales (including internal consumption) 14,257,339 12,482,471
Less: Adjustment representing surplus payable to
the President under the provisions of the Mari
Gas Well Head Price Agreement 168,049 338,384
14,089,290 12,144,087
==============================================================================21. OPERATING EXPENSES==============================================================================
2004 2003
Note (Rupees in thousand)
==============================================================================
Salaries, wages and benefits 224,666 176,275
Employees' retirement benefits 36,997 30,020
Rent, rates and taxes 4,339 4,358
Lease rentals 3,351 3,133
Legal and professional services 3,731 2,448
Fuel, light, power and water 27,686 22,979
Maintenance and repairs 29,979 17,854
Insurance 29,769 28,429
Depreciation and amortization 363,800 337,788
Employees medical and welfare 40,204 37,193
Security and other services 69,657 58,792
Travelling 10,103 9,263
Communications 9,354 7,247
Office supplies 9,403 7,704
Technical software 1,331 841
Auditors' remuneration 21.1 1,095 1,289
Stores and spares consumed 38,052 26,075
Donations 21.2 538 751
Mobile dispensary and social welfare 9,236 7,236
Training 11,087 6,138
Goru - B deliver ability build up test 34,307 -
Obsolete stores written off - 6,443
Advertisement 1,578 1,836
Books and periodicals 624 1,163
Miscellaneous 8,380 11,065
969,267 806,320
==============================================================================21.1. AUDITORS' REMUNERATION==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Audit fee 287 250
Special reports, review of half yearly accounts,
Audit of staff funds 389 411
Tax assessments and appeals 351 556
Out of pocket expenses 68 72
1,095 1,289
==============================================================================21.2. Donations do not include any amount paid to any person or organisation in which a director or his spouse had any interest.22. EXPLORATION EXPENDITURE ==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Amount expensed in terms of note 2.11
Share in joint ventures under the operatorship of:
MARI GAS COMPANY LIMITED
Ziarat Block 51,800 4,190
Bolan Block 16,711 (10,269)
Sawan East Block - 3,729
TOTAL E & P PAKISTAN
G Block 152,468 -
H Block 12,189 -
ENI PAKISTAN LIMITED
Manchar Block 96,857 15,165
PAKISTAN PETROLEUM LIMITED
Dhadar Block 45,396 -
Jhamat Block 12,573 31,846
Karsal Block (1,068) 39,705
Manzai Block (1,030) 34,335
TULLOW PAKISTAN (DEVELOPMENTS) LIMITED
Nawabshah Block 9,520 -
PAKISTAN OILFIELDS LIMITED
Hyderabad Block 5,606 -
Prospective ventures - 14,293
401,022 132,994
Exploration department cost 56,546 42,697
457,568 175,691
==============================================================================22.1. The exploration expenditure comprises of:==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Geological and geophysical 201,175 90,795
Drilling 177,478 -
General and administration 78,915 84,896
457,568 175,691
==============================================================================23. OTHER INCOME==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Income on bank deposits 46,701 69,556
Gain on sale of fixed assets 3,870 1,632
Liquidated damages/minimum billing to a customer - 9,828
Miscellaneous 306 729
50,877 81,745
==============================================================================24. FINANCIAL CHARGES==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Mark-up on long term loan 28,502 103,233
Interest on workers' profits participation fund 2,313 1,307
Exchange risk and commitment fee 6,730 6,491
Bank charges 775 2,063
38,320 113,094
==============================================================================25. OTHER CHARGES==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Workers' profits participation fund 47,733 55,931
Workers' welfare fund 18,975 10,346
66,708 66,277
==============================================================================26. TAXATION==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
Current - for the year 267,479 177,455
-for prior years 22,167 -
289,646 177,455
Deferred - for the year (12,742) 45,016
-for prior years 91,248 -
78,506 45,016
368,152 222,471
==============================================================================26.1. RECONCILIATION OF TAX CHARGE FOR THE YEAR==============================================================================
2004 2003
% %
==============================================================================
Applicable tax rate 35.00 35.00
Tax effect of amounts that are not deductible
for tax purposes 7.36 0.24
Tax effect of depletion allowance (15.17) (14.10)
Tax charge related to prior years 12.11 -
Aggregate effective tax rate charged to income 39.30 21 .14
==============================================================================27. PRIOR YEARS' ADJUSTMENT==============================================================================
2004 2003
Note (Rupees in thousand)
==============================================================================
Post retirement medical benefit 2.6 (iv) 35,445 -
Post retirement leave 2.6 (v) 13,425 -
Deferred income tax - 183,866
48,870 183,866
==============================================================================28. EARNINGS PER SHAREEarnings per share on the basis of profit after tax for the year as reported in profit and loss account is Rs 14.14 per share (2003: Rs 17.58 per share). However, as explained in note 5.1 to the accounts, Rs 370.416 million (2003: Rs 506.729 million) is not distributable to shareholders. Accordingly, return to shareholders for the year is Rs 4.06 per share (2003: Rs 3.79 per share). 29. CASH GENERATED FROM OPERATIONS ==============================================================================
2004 2003
Note (Rupees in thousand)
==============================================================================
Profit before taxation and after prior years' adjustm 887,952 1,052,351
Adjustment for non cash charges and other items:
Depreciation and amortization 363,800 337,788
Profit on disposal of fixed assets (3,871) (1,632)
Employees' retirement benefits 52,937 709
Interest income (46,701) (69,556)
Financial charges 38,320 113,094
Working capital changes 29.1 9,633 960,722
1,302,070 2,393,476
==============================================================================29.1. WORKING CAPITAL CHANGES==============================================================================
2004 2003
(Rupees in thousand)
==============================================================================
(Increase)/decrease in current assets
Stores and spares 23,157 25,273
Trade debts 19,287 1,101,868
Loans, advances and prepayments (47,654) (8,213)
Other receivables 2,388 419,583
(2,822) 1,538,511
Increase/(decrease) in current liabilities
Accrued and other liabilities 12,455 (577,789)
9,633 960,722
============================================================================== |