CONTENTS Nishat Power Limited Company Profile 2 Directors Report 3 Condensed Interim Balance Sheet 4-5 Condensed Interim Profit and Loss Account 6 Condensed Interim Statement of Comprehensive Income 7 Condensed Interim Cash Flow Statement 8 Condensed Statement of Changes in Equity 9 Selected Notes to the Condensed Interim Financial Information 10-15 Ist Quarterly Report 2009
Company Profile Board of Directors Mian Raza Mansha Director / Chairman Mian Hassan Mansha Director / Chief Executive Mr. Khalid Qadeer Qureshi Mr. Aftab Ahmad Khan Mr. Shahzad Ahmad Malik Mr. Muhammad Shahzad Sadiq Director - Nominee ABL Mr. Masood Karim Shaikh Director - Nominee NBP Mr. Rizwan Hameed Alternate Director - Nominee NBP Audit Committee Mr. Khalid Qadeer Qureshi Member / Chairman Mr. Aftab Ahmad Khan Member Mr. Shahzad Ahmad Malik Member chief financial officer Company secretary Mr. Tanvir Khalid Mr. Khalid Mahmood Chohan Bankers of the company Habib Bank Limited United Bank Limited Allied Bank Limited National Bank of Pakistan Faysal Bank Limited Bank Alfalah Limited Auditor of the company A. F. Ferguson & Co. Chartered Accountants legal advisor of the company registered office Head Office Share registrar plant Cornelius, Lane & Mufti Advocates & Solicitors 53 - A, Lawrence Road, Lahore - Pakistan UAN: 042-111-11-33-33 7 - Main Gulberg, Lahore - Pakistan UAN: 042-111-33-22-00 Tel: 042-5716351 to 59, Fax: 042-5716349-50 Hameed Majeed Associates (Pvt.) Ltd. Financial & Management Consultants H.M. House, 7-Bank Square, Lahore - Pakistan. Tel: 042-7235081-2 66-K.M, Multan Road, Jambar Kalan, Tehsil Pattoki, District Kasur. 2 Nishat Power Limited
directors report The Board of Directors of Nishat Power Limited is pleased to present the, un-audited Financial Statements for the first quarter ended September 30, 2009. Principal Activity The principal activity of the company is to Build, Own, Operate (BOO) a Residual Furnace Oil (RFO) fired power plant based on combine cycle Reciprocating Engine Technology having gross capacity of 200MW ISO in Jamber Kalan, Tehsil Pattoki, District Kasur, Punjab, Pakistan. Project Activity During the first three months of fiscal year the company successfully completed the presynchronization tests and during testing and commissioning phase it has started exporting energy to NTDC. Operating Financial Results; QUARTER ENDED September 30, September 30, Highligts 2009 2008 Turnover 134,657,454 - Operating Cost 155,388,842 - Other operating income 1,795,044 1,938,268 Administrative expenses (2,719,761) (2,030,172) Finance cost (4,382) - Loss Before Taxation (21,660,487) (91,904) Loss for the Period (21,660,487) (91,904) Loss per share in Rupees (0.061) (0.001) The turnover amounting to Rs134.657 million, is in connection with the fuel cost component of energy purchase price receivable from National Transmission and Dispatch Company (NTDC). As the project is in construction, testing and commissioning phase therefore the trial run loss amounting to Rs.21.660 million has been accounted for during this quarter. Future Prospects; The company is in the phase of full load testing and is expected to achieve Commercial Operation Date within first week of November 2009 subject to successful completion of Reliability Run Tests as required under Power Purchase Agreement dated November 13, 2007. Chief Executive Lahore: October 26, 2009 Ist Quarterly Report 2009
CONDENSED INTERIM BALANCE SHEET AS AT SEPTEMBER 30, 2009 un-audited Audited Note September 30, June 30, 2009 2009 ----------------Rupees--------------- EQUITY AND LIABILITIES CAPITAL AND RESERVES Authorised capital 500,000,000 (June 30, 2009: 500,000,000) ordinary shares of Rs 10 each 5,000,000,000 5,000,000,000 Issued, subscribed and paid up capital 354,088,500 (June 30, 2009: 291,250,000) ordinary shares of Rs 10 each 4 3,540,885,000 2,912,500,000 Accumulated loss (44,389,111) (20,706,410) NON-CURRENT LIABILITIES 3,496,495,889 2,891,793,590 Long term financing - secured 5 11,989,176,921 11,396,546,271 CURRENT LIABILITIES Current portion of long term financing - secured 416,833,355 253,439,983 Trade and other payables 725,135,643 680,986,841 Accrued markup 488,206,966 436,094,554 Short term borrowing - secured 523,220,176 - Provision for taxation 1,798,818 2,000,672 CONTINGENCIES AND COMMITMENTS 6 2,155,194,958 1,372,522,050 17,640,867,768 15,660,861,911 The annexed notes 1 to 12 form an integral part of these financial statements. chief executive Nishat Power Limited
un-audited Audited Note September 30, June 30, 2009 2009 ----------------Rupees--------------- ASSETS NON-CURRENT ASSETS Property, plant and equipment 7 16,504,679,717 15,593,956,036 CURRENT ASSETS Inventory 723,615,282 128,735 Trade debts 136,282,997 - Advances, deposits, prepayments and other receivables 188,242,143 8,585,887 Cash and bank balances 88,047,629 58,191,253 1,136,188,051 66,905,875 17,640,867,768 15,660,861,911 Director Ist Quarterly Report 2009
CONDENSED INTERIM PROFIT AND LOSS ACCOUNT FOR THE QUARTER ENDED SEPTEMBER 30, 2009 Note September 30, September 30, 2009 2008 (Restated) ----------------Rupees--------------- Turnover 8 134,657,454 - Operating cost 9 155,388,842 - Gross loss (20,731,388) - Other operating income 1,795,044 1,938,268 Administrative expenses (2,719,761) (2,030,172) Finance cost (4,382) - Loss before taxation (21,660,487) (91,904) Taxation - - Loss for the period (21,660,487) (91,904) Loss per share in Rupees (0.061) (0.001) The annexed notes 1 to 12 form an integral part of these financial statements. chief executive Director Nishat Power Limited
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME FOR THE QUARTER ENDED SEPTEMBER 30, 2009 September 30, September 30, 2009 2008 (Restated) ----------------Rupees--------------- LOSS FOR THE PERIOD (21,660,487) (91,904) OTHER COMPREHENSIVE INCOME - - TOTAL COMPREHENSIVE LOSS FOR THE PERIOD (21,660,487) (91,904) The annexed notes 1 to 12 form an integral part of these financial statements. chief executive Director Ist Quarterly Report 2009
CONDENSED INTERIM CASH FLOW STATEMENT FOR THE QUARTER ENDED SEPTEMBER 30, 2009 Note September 30, September 30, 2009 2008 (Restated) ----------------Rupees--------------- Cash flows from operating activities Cash generated from operations 10 (495,278,890) 38,518,175 Taxes (paid)/refunded (201,854) (683,083) Employees retirement benefits paid (193,414) - Net cash inflow from operating activities (495,674,158) 37,835,092 Cash flows from investing activities Fixed capital expenditure (858,639,764) (607,601,474) Profit on bank deposits received 1,783,490 1,913,650 Net cash outflow from investing activities (856,856,274) (605,687,824) Cash flows from financing activities Proceeds from long term financing 756,024,022 572,243,872 Proceeds from issuance of share capital 628,385,000 80,000,000 Proceeds from share deposit money - 3,400,000 Share issuance cost (2,022,214) (8,725,800) Net cash inflow from financing activities 1,382,386,808 646,918,072 Net increase in cash and cash equivalents 29,856,376 79,065,340 Cash and cash equivalents at the beginning of the period / year 58,191,253 2,384,312 Cash and cash equivalents at the end of the period / year 88,047,629 81,449,652 The annexed notes 1 to 12 form an integral part of these financial statements. Nishat Power Limited
CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE QUARTER ENDED SEPTEMBER 30, 2009 Share Accumul- Share deposit ated Profit / Total capital money (loss) -------------------------------- Rupees-------------------------------- Receipt of share deposit money - 812,600,000-812,600,000 Issuance of ordinary shares against share deposit money 800,000,000 (800,000,000) - - Share issuance cost, net - - (8,725,800) (8,725,800) Profit for the period - - 28,613 28,613 Balance as on June 30, 2008 - restated 800,000,000 12,600,000 (8,697,187) 803,902,813 Receipt of share deposit money - 2,099,900,000-2,099,900,000 Issuance of ordinary shares against share deposit money 2,112,500,000 (2,112,500,000) - - Share issuance cost, net (includes underwriting commission of Rs 4,398,777 to Allied Bank Limited, a related party) - - (11,057,507) (11,057,507) Loss for the year - - (951,716) (951,716) Balance as on June 30, 2009 2,912,500,000 - (20,706,410) 2,891,793,590 Receipt of share deposit money - 628,385,000-628,385,000 Issuance of ordinary shares against share deposit money 628,385,000 (628,385,000) - - Share issuance cost - - (2,022,214) (2,022,214) Loss for the period - - (21,660,487) (21,660,487) Balance as on September 30, 2009 3,540,885,000 - (44,389,111) 3,496,495,889 The annexed notes 1 to 12 form an integral part of these financial statements. chief executive Director Ist Quarterly Report 2009 9
SELECTED NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION FOR THE QUARTER ENDED SEPTEMBER 30, 2009 1. Legal status and nature of business Nishat Power Limited ( the company ) was incorporated in Pakistan as a public company limited by shares under the Companies Ordinance, 1984 on February 23, 2007. The company is a subsidiary of Nishat Mills Limited, a listed company. The principal activity of the company is to build, own, operate and maintain a fuel fired power station having gross capacity of 200 MW in Jamber Kalan, Tehsil Pattoki, District Kasur, Punjab, Pakistan. The address of the registered office of the company is 53-A, Lawrence Road, Lahore. The company has not yet commenced commercial operations. 2. Basis of preparation 2.1 This condensed interim financial information is unaudited and is being submitted to shareholders as required by section 245 of the Companies Ordinance, 1984. This condensed interim financial information has been prepared in accordance with the International Accounting Standard (IAS) 34 Interim Financial Reporting as applicable in Pakistan and notified by the Securities and Exchange Commission of Pakistan (SECP). This condensed interim financial information does not include all of the information required for full annual financial statements, and should be read in conjunction with the annual financial statements for the year ended June 30, 2009. 3. Accounting policies and computation methods 3.1 The accounting policies and methods of computations adopted for the preparation of this condensed interim financial information are the same as applied in the preparation of the preceding annual published financial statements of the company for the year ended June 30, 2009. 3.2 Standards and interpretations effective in the current period Following new and revised standards are effective and mandatory for financial statements for the periods beginning on or after January 01, 2009 and therefore, have been applied in preparing this condensed interim financial information. Revised IAS 1 - Presentation of financial statement (2007) introduced the term total comprehensive income which represents changes in equity during the period other than those changes resulting from transactions with owners in their capacity as owners. As required by the revised standard, the company has presented an income statement and a separate statement of comprehensive income. Revised IAS 23 - Borrowing costs removed the option to expense borrowing costs and requires that an entity capitalized borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of cost of the asset. Since the company already followed the policy of capitalizing borrowing costs on qualifying assets, the revised standard has no effect on financial performance of the company. 4. Issued, subscribed and paid up capital This represents 354,088,500 (June 30, 2009: 291,,250,000) ordinary shares of Rs 10 each fully paid in cash. During the period, the company issued 62,838,500 ordinary shares of Rs 10 each. The movement of ordinary shares is as follows: 10 Nishat Power Limited
September 30, June 30, 2009 2009 (Number of shares) Opening balance 291,250,000 80,000,000 Add: Shares issued during the period / year 62,838,500 211,250,000 Closing balance 354,088,500 291,250,000 Ordinary shares of the company held by related parties as at period / year end are as follows: September 30, June 30, 2009 2009 (Number of shares) Nishat Mills Limited - holding company 201,288,498 192,999,998 National Bank of Pakistan 30,000,000 24,125,000 Allied Bank Limited 59,173,739 53,298,739 Directors 2 2 5. Long term financing - secured 290,462,239 270,423,739 Long term financing under mark-up arrangement obtained from following banks: September 30, June 30, Lender 2009 2009 ----------------Rupees--------------- National Bank of Pakistan - related party 2,153,090,524 2,021,880,883 Habib Bank Limited 2,871,047,207 2,696,085,184 Allied Bank Limited - related party 2,871,047,206 2,696,085,183 United Bank Limited 2,819,886,138 2,648,041,877 Faysal Bank Limited 1,690,939,201 1,587,893,127 12,406,010,276 11,649,986,254 Less: Current portion shown under current liabilities 416,833,355 253,439,983 11,989,176,921 11,396,546,271 5.1 This represents long term financing obtained from a consortium of banks led by Habib Bank Limited (Agent Bank). The portion of long term financing from Faysal Bank Limited is on murabaha basis. The total project financing facility amounts to Rs 14,163,540,800 (June 30, 2009 Rs 12,259,509,600) of which Rs 12,406,010,276 has been availed by the company as at September 30, 2009. 5.2 The financing is secured against registered first joint parri passu charge on immovable property, mortgage of project receivables, hypothecation of all present and future assets and all properties of the company (excluding the mortgaged immovable property), lien over project bank accounts and pledge of shares held by the holding company in Nishat Power Limited. It carries markup at the rate of three months Karachi Inter-Bank Offered Rate (KIBOR) plus three percent per annum, payable on quarterly basis. The effective markup rate charged during the period ranges from 15.60% to 15.77% per annum. The finance is repayable in forty equal quarterly installments commencing from January 01, 2010. Ist Quarterly Report 2009 11
6. Contingencies and commitments 6.1 Contingencies The company has issued an irrevocable letter of credit in favour of National Transmission and Despatch Company Limited for US$ 5,369,650 (June 30, 2009: US$ 5,369,650) equivalent to Rs 447,291,845 (June 30, 2009: Rs 436,552,545) as required under section 2.7 and 9.4(d) of the Power Purchase Agreement. 6.2 Commitments in respect of September 30, June 30, 2009 2009 ----------------Rupees--------------- Equipment supply contract with Wartsila Finland Oy for Euro 677,325 (June 30, 2009: Euro 194,264) 82,525,262 22,305,392 Construction services contract with Wartsila Pakistan (Private) Limited for US$ 1,922,040 (June 30, 2009: US$ 4,228,488) 160,105,932 343,776,074 Other contractors 13,995,124 24,630,008 The company has entered into a contract for purchase of fuel oil from Shell Pakistan Limited (SPL) for a period of ten years starting from the Commercial Operations Date of the power station. Under the terms of the Fuel Supply Agreement, the company is not required to buy any minimum quantity of oil from SPL. 7. Property, plant and equipment September 30, June 30, Note 2009 2009 ----------------Rupees--------------- Operating fixed assets 87,846,412 87,358,124 Capital work-in-progress 7.1 16,416,833,305 15,506,597,912 16,504,679,717 15,593,956,036 7.1 Capital work-in-progress Buildings and roads 130,911,702 130,900,347 Plant and machinery 14,211,258,026 13,618,555,905 Electric installations 864,966 269,296 Advances to contractors 46,718,456 257,511,121 Advance for purchase of plant and machinery - 6,333,124 Unallocated expenditure 2,027,080,155 1,493,028,119 16,416,833,305 15,506,597,912 12 Nishat Power Limited
8. Turnover September 30, September 30, 2009 2008 ----------------Rupees--------------- Sale of energy 136,282,997 - Less : Sales tax (1,625,543) - 9 Operating cost 134,657,454 - Furnace oil consumed 127,822,444 - Diesel oil consumed 7,761,006 - Lubricants consumed 18,485,529 - Salaries and other benefits 1,002,322 - Printing and stationery 38,349 - Travelling and conveyance 85,856 - Entertainment 15,125 - Vehicle running and maintenance 42,576 - Fee and subscription 82,808 - Miscellaneous 52,827-155,388,842-10. Cash generated from operations Loss before taxation (21,660,487) (91,904) Adjustment for non cash charges and other items: Depreciation on operating fixed assets 28,495 30,587 Profit on bank deposits (1,783,490) (1,913,650) Provision for employee retirement benefits 193,414 - Loss before working capital changes (23,222,068) (1,974,967) Effect on cash flow due to working capital changes: Increase in inventory (723,486,547) - Increase in trade debts (136,282,997) - Increase in advances, deposits, prepayments and other receivables (179,656,256) (656,390) Increase in trade and other payables 44,148,802 41,149,532 Increase in short term borrowings 523,220,176 - (472,056,822) 40,493,142 (495,278,890) 38,518,175 Ist Quarterly Report 2009 13
11. Remuneration of Chief Executive, Directors and Executives 11.1 The aggregate amount charged in the financial statements for the period for remuneration, including certain benefits, to the Chief Executive, full time working Directors and Executives of the company is as follows: Chief Executive Executive September 30, September 30, September 30, September 30, 2009 2008 2009 2008 -------------------------------- Rupees-------------------------------- Short term employee benefits Managerial remuneration 1,600,000 1,500,000 1,492,023 1,185,197 Cost of living allowance - - 7,125 300 Housing rent - - 435,984 425,370 Conveyance - - 4,500 - Medical expenses - - 149,202 - Utilities - - 149,202 130,293 Special allowance - - - 157,140 1,600,000 1,500,000 2,238,036 1,898,300 Post employment benefits Contribution to provident fund - - 142,419 109,780 1,600,000 1,500,000 2,380,455 2,008,080 Number of persons 1 1 5 5 11.2 Executives are provided with company maintained vehicles and one executive is also provided with company paid housing facility. 14 Nishat Power Limited
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