The main contributing factor for increase in profit is the sale of steam and favourable changes in the Power Tariff. Net margin increased by 2.88 percentage points from 2.12% last year to 5.0% for the year under review.
Last year an application fee of Rs 3.00 million was paid to NEPRA for obtaining distribution license which had then reduced margins.
The directors recommended a cash dividend @10% for the year under review as compared to cash dividend @7.5% for the preceding year.
The scheme for amalgamation/merger of Kohinoor Genertek Ltd (KGL) into Kohinoor Weaving Mills Limited (KWML) was scheduled to be completed by October 01, 2003.
On September 25, 2003 the notice of the Annual General Meeting was issue. In addition to regular business the agenda of the meeting includes special business of approval of scheme for arrangement for merger of Kohinoor Genertek Limited (KGL) into Kohinoor Weaving Mills Ltd (KWML).
The scheme of amalgamation/merger was planned to be effective from 01 October 2003.
Kohinoor Genertek Limited was incorporated in the province of Punjab. Its main business activity are power generation and distribution.
KWML and KGL belong to one group and are also inter linked with each other as the Kohinoor Genertek Limited is a captive power plant and supplying electricity to KWML.
The company was listed both Karachi and Lahore Stock Exchanges. According to the schemes on the completion date (of merger), KGL was to be delisted.
Accordingly, there is no reference of this entity on the stock exchange pages of newspapers.
The completion date would also record dissolution of KGL, obviously winding without winding.
The merger of two companies with rationalise business structure bring economies and significantly improve the flexibility, efficiency and financial strength.
The proposed merger will result in reducing expenses, cut down the reporting requirements savings in tax and will enhance the profitability of the company and as a consequence, benefits of the shareholders.
The combined operators in a single company would generate synergistic linkages besides economies in cost.
The amalgamation will give emergence to an organisation with a substantially larger capital base.
This would not only improve the balance sheet profile of KWML but would also be helpful in undertaking bigger exposures.
Since of the savings in cost will be requirement of single Board of Directors cost reduction in license and membership fees, one external audit, reduction in administrative and corporate staff, one cost effective internal audit, single assessment of income tax, one registered of shareholders, one AGM etc.
According to the scheme the basis of swap has been documented. The proportion in which the shares of KWML are to be allotted under the scheme in lieu of shares of KGL held by the registered holders thereof will be assessed on Swap Ratio, which shall be determined by Riaz Ahmed and Company Chartered Accountants by taking the effect of weighted average under mentioned three figures for KGL and KWML.
A) Break-up value of the share as per audited accounts for the year ended 30th September 2003; b) Average of weekly quotation of the share on the Karachi Stock Exchange from 01 October 2002 to 30 September 2003; c) Average dividend paid during the last 3 years.
======================================================
Performance Statistics (Million Rupees)
======================================================
30 June 2003 2002
======================================================
Share Capital-Paid-up: 163.00 163.00
Reserves & Surplus: 285.51 273.31
Shareholders Equity: 448.51 436.31
Current Liabilities: 61.06 76.21
Operating Fixed Assets-Tangible: 289.89 334.74
L.T Investments: 55.82 55.82
L.T. Deposits: 0.15 0.30
Current Assets: 163.70 121.65
Total Assets: 509.57 512.52
------------------------------------------------------
Sales, Profit & Pay Out
------------------------------------------------------
Sales-Net: 522.03 438.67
Gross Profit: 36.51 26.94
Operating Profit: 30.87 16.60
Other Income: 0.11 0.37
Financial (Charges): (3.47) 4.73
(Depreciation): (32.02) (37.24)
Profit Before Taxation: 26.10 9.34
Profit After Taxation: 26.11 9.30
Dividend Cash 10% (2002: 7.5%): 16.30 12.22
Earnings Per Share (Rs): 1.60 0.57
------------------------------------------------------
Financial Ratios
------------------------------------------------------
Book Value Per Share: 27.51 26.77
Debt/Equity Ratio: 0:100 0:100
Current Ratio: 2.68 1.60
Asset Turn Over Ratio: 1.02 0.85
Days Receivables: 52 56
Days Inventory: 18 24
Gross Profit Margin (%): 6.99 6.14
Operating Margin (%): 5.91 3.78
Net Profit Margin (%): 5.00 2.12
R.O.A (%): 5.12 1.81
R.O.C.E (%): 5.82 2.13
------------------------------------------------------
Plant Capacity & Production (000 Mega Watt Hours)
------------------------------------------------------
A) Main Generators
------------------------------------------------------
Installed Capacity: 151.930 151.930
Actual Generation: 111.196 110.615
Capacity Utilization (%): 73.19 72.81
B) Number of Generators Installed: 3 3
------------------------------------------------------
C) Standby Generators
------------------------------------------------------
Caterpillar Generation: 14.833 7.766
======================================================
D) "Actual power generation in comparison to installed capacity is low due to periodical scheduled and unscheduled maintenance of generators."
COMPANY INFORMATION: Chairman: Tariq Sayeed Saigol; Chief Executive Sarmad Amin; Director: Usman Said; Company Secretary: Muhammad Ashraf Chief Financial Officer: Hasnain Shafqat; Registered Office: 42-Lawrence Road, Lahore; Project: 8th K.M. Manga Mandi Raiwind Road District Kasur.