| Baba Farid Sugar Mills Limited |
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| ANNUAL
REPORT 1998 |
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| CONTENTS |
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| COMPANY'S
INFORMATION |
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| NOTICE
OF THE MEETING |
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| DIRECTORS'
REPORT |
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| AUDITORS'
REPORT |
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| BALANCE
SHEET |
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| PROFIT
& LOSS ACCOUNT |
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| STATEMENT
OF CHANGES IN |
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| FINANCIAL
POSITION (CASH FLOW STATEMENT) |
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| NOTES
TO THE ACCOUNTS |
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| SCHEDULE
OF FIXED ASSETS |
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| PATTERN
OF SHAREHOLDING |
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| COMPANY'S
INFORMATION |
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| BOARD
OF DIRECTORS |
CHIEF EXECUTIVE |
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|
MR. GHULAM MOHAMMED A.
FECTO |
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|
DIRECTORS |
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|
MR. MUNAWAR ALI FECTO |
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|
MR. KAISER MAHMOOD FECTO |
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DR. ABDUL WAHED MOHAMMED |
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MR. SAID AHMED |
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MR. YAHYA AHMED BAWANY |
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|
MR. JAMES R. RICHARDS |
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|
CH. BARKAT ALl |
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|
MR. FAZLUR REHMAN |
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| SECRETARY |
|
MR. MUHAMMED ANWER
NATHANI (ACA) |
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|
| AUDITORS |
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M/S. HYDER BHIMJi &
CO |
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|
(Chartered Accountants) |
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|
M/S. A. R. DIWAN &
CO. |
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|
(Chartered Accountants) |
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| BANKERS |
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MUSLIM COMMERCIAL BANK
LTD. |
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|
HABIB BANK LTD. |
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| MILLS |
|
OKARA (DISTT. OKARA) |
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| NOTICE
OF THE MEETING |
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| NOTICE
IS HEREBY GIVEN that the Twentieth Annual General Meeting of the |
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| Members
of the Company will be held on Monday the 22rid March, 1999 at 3.00 P.M. |
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| at
Hotel Metropole, Club Road, Karachi to transact the following business. |
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| ORDINARY
BUSINESS |
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| To
receive and adopt the Report of the Directors and the Audited Accounts of the |
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| Company
together with the Auditors' Report for the Financial Year ended 30th |
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| September,
1998. |
|
|
| (2)
To appoint Auditors for the year 1998-99 and fix their remuneration. |
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|
By order of the Board |
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|
|
(GHULAM MOHAMMED A. FECTO) |
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|
Chief Executive |
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| Karachi:
the 18th February, 1999 |
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| NOTES: |
|
|
| (1)
The Share Transfer Books of the Company will remain closed from 15th March, |
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| 1999
to 22nd March 1999 (both days inclusive) |
|
|
| (2)
A member entitled to attend and vote at this Meeting may appoint another
member If. |
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| as
his/her Proxy to attend, speak and vote on his/her behalf. |
|
|
| (3)
An instrument appointing a proxy must be received at the Registered Office of
the |
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| Company
not later than forty eight hours before the time appointed for the |
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| Meeting.
A Member shall not be entitled to appoint more than one proxy. If |
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| a
Member appoints more than one proxy and more than one instrument of proxies |
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| are
deposited by a Member with the Company all such instruments shall be |
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| rendered
invalid. |
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|
|
|
| (4)
Members are requested to notify any change in their address immediately. |
|
|
| (5)
Members should quote their Folio Number in all correspondence at the time |
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| of
attending the Meeting. |
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| DIRECTORS'
REPORT |
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|
| The
Members, |
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| BABA
FARID SUGAR MILLS LIMITED |
|
| KARACHI. |
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|
| Gentlemen, |
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|
| Your
Directors present to the Shareholders the Twentieth Annual Report together |
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| with
the audited accounts for the financial year ended 30th September, 1998. |
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|
| The
operating performance and other salient features for the year under review as |
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| compared
with preceding. Year are as follows: |
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|
|
|
1998 |
1997 |
|
|
| Date
of Commencement of Season |
|
19-11-1997 |
19-11-1996 |
|
| Date
of Cessation Concluding of Season |
30-04-1998 |
04-04-1997 |
|
| Crushing
Duration |
|
Days |
162 |
136 |
|
| Cane
Crushed |
|
Tons |
511,189 |
341,287 |
|
| Sugar
Production |
|
Tons |
40,242 |
25,234 |
|
| Sucrose
Recovery |
|
% |
7.87 |
7.39 |
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|
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| The
above operating results show that the Company crushed larger quantity of |
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| sugarcane
on account of bumper cane crop. The Company has however not been able to |
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| achieve
expected production due to low sucrose recovery as against the recovery that
had |
|
| been
expected. Secondly we could not get the benefits of price due to downward
trend of |
|
| selling
prices in the local as well as international market as the price remained out
of focus |
|
| with
the increase in support price of sugarcane fixed by the Government i.e. from
Rs. 24/- |
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| per
40 kgs. to Rs,35/- per 40 kgs. These factors- adversely affected the
Company's |
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| operational
results. We may also add that it is not our Company alone but the entire
sugar |
|
| industry
of the country which was similarly affected. |
|
|
| The
company's financial results for the year under report are as follows:- |
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|
|
|
RUPEES |
|
|
|
|
| Net(loss)
before taxation |
|
(22,358,005) |
|
| Taxation |
|
|
|
15,294,463) |
|
|
|
|
---------- |
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|
|
|
(27,652,468) |
|
| Un-appropriated
Profit |
|
|
|
1,411,492 |
|
|
|
|
|
|
---------- |
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|
|
|
|
|
(26,240,976) |
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| Transfer
from Revenue Reserve |
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|
27,500,000 |
|
|
|
|
|
|
---------- |
|
| Un-appropriated
Profit Carried forward |
|
1,259,024 |
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|
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|
========== |
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| Your
Directors regretfully recommended that Dividend for the year under review be |
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| passed
over. |
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|
| CURRENT
YEAR PROSPECTS |
|
|
| The
current crushing season commenced on 25-11-1998 and as on February 14, 1999 |
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| we
have crushed 252,128 tonnes of sugarcane producing 15,346 tonnes of White
Sugar and |
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| 6.23%
recovery. We will be able to crush 450,000 metric tons to 500,000 metric tons |
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| approximately
during the current season. We also hope to achieve the target production this |
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| season
but unfortunately sucrose recovery would be lower due to viral attack to the
sugar- |
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| cane
crop and the long dry spell which has caused the recovery to decline by at
least |
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| 1%
in Central Punjab. |
|
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| We
hope for a better future as well as financial results. However these will
entirely |
|
| depend
on expected production and selling price in the local market and
International |
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| market
as well as also the recent incentives given by the Government to the
Industry. |
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| During
the year there was complete industrial peace and harmony in all areas of our |
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| operations.
Your Directors place on record their appreciation for the honest and
dedicated |
|
| work
of the staff and workers of all categories and have pleasure to mention here
that |
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| during
the year under review, the Management Employees relations continued to remain |
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| quite
cordial. |
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| Your
Directors express their thanks to the officials of the Ministry of Food and |
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| Agriculture,
other Government Agencies and Pakistan Sugar Mills Association for the |
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| sup15ort
and encouragement they have extended to your Company and which we hope will |
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| be
continued in future too. We would like to express our sincere thanks to all
the financial |
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| institutions
for their continued support and co-0P~ration. |
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|
| YEAR
2000 COMPLIANCE OF COMPUTER SYSTEM |
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| The
Company is based on P.C. based software system requiring minimum changes |
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| in
software and hardware being fully compliant to Y2K requirements. Hopefully
the process |
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| will
be completed by June, 1999. |
|
|
| Messrs
Hyder Bhimji & Co. and Messrs A. R. Diwan & Co. the Auditors of the
Company |
|
| retire
and offer themselves for re-appointment. |
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|
| Statement
showing the pattern of holding of the shares held by the members of Baba |
|
| Sugar
Mills Limited as on 30-09-1998 is annexed. |
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|
By Order of the Board |
|
|
|
(GHULAM MUHAMMED A. FECTO) |
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|
|
Chief Executive |
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|
| KARACHI:
the 18th February, 1999 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of BABA FARID SUGAR MILLS LIMITED, |
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| as
at September 30,1998 and the related profit and loss account and statement of
changes |
|
| in
financial position (cash flow statement) together with the notes forming part
thereof and |
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| we
state that we have obtained all the information and explanations which to the
best of |
|
| our
knowledge and belief were necessary for the purpose 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 |
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| 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 were for the purpose of Company's |
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| business;
and |
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|
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| (iii)
the business conducted, investments made and the expenditure incurred |
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| 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, Profit and Loss Account and 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 September 30, 1998 and of the loss and the changes in financial |
|
| position
for the year then ended; and |
|
|
| (d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr |
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| Ordinance,
1980. |
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|
|
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|
A. R. DIWAN & CO. |
|
HYDER BHIMJI & CO. |
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|
Chartered Accountants |
|
Chartered Accountants |
|
|
| KARACHI:
the 18th February, 1999 |
|
|
|
| BALANCE
SHEET AS AT 30TH SEPTEMBER, 1998 |
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|
|
|
1998 |
1997 |
|
|
|
NOTE |
RUPEES |
RUPEES |
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
|
|
| SHARE
CAPITAL: |
|
|
|
| Authorized
capital |
|
|
|
| 10,000,000
ordinary shares of Rs. 10/- each |
|
100,000,000 |
100,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
3 |
94,500,000 |
94,500,000 |
|
| Revenue
reserve |
|
4 |
5,000,000 |
32,500,000 |
|
| Unappropriated
Profit |
|
|
1,259,024 |
1,411,492 |
|
|
|
|
---------- |
---------- |
|
|
|
|
100,759,024 |
128,411,492 |
|
| SUB-ORDINATED
LOANS |
|
5 |
19,000,000 |
19,000,000 |
|
|
|
|
|
|
| DEFERRED
TAXATION |
|
|
29,700,000 |
27,100,000 |
|
| DEFERRED
LIABILITIES |
|
6 |
5,512,621 |
- |
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
|
| TO
FINANCE LEASE |
|
7 |
41,789,524 |
68,219,959 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
portion of Deferred liabilities |
6.01 |
1,450,690 |
- |
|
| Current
portion of liabilities against |
|
|
| assets
subject to finance lease |
|
7.01 |
28,437,531 |
22,646,763 |
|
|
|
|
|
|
| Short
Term Running Finance utilized under |
|
|
|
| mark-up
arrangements |
|
8 |
148,591,180 |
39,192,303 |
|
|
|
|
|
|
| Provision
for taxation |
|
|
5,080,981 |
5,657,592 |
|
| Creditors,
Accrued and Other Liabilities |
9 |
74,288,328 |
34,500,356 |
|
|
|
|
---------- |
---------- |
|
|
|
|
257,848,710 |
101,997,014 |
|
| Contingencies
and commitments |
|
29 |
- |
- |
|
|
|
|
---------- |
---------- |
|
| TOTAL
RUPEES |
|
|
454,609,879 |
344,728,465 |
|
|
|
|
========== |
========== |
|
|
| FIXED
ASSETS |
|
|
|
|
|
|
| Operating
assets |
|
10 |
254,053,180 |
271,786,748 |
|
|
|
|
|
|
| LONG
TERM INVESTMENTS |
|
11 |
3,000,000 |
3,000,000 |
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
10,770,917 |
13,853,000 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
|
|
| Stores,
spares and loose tools |
|
12 |
37,837,370 |
40,535,881 |
|
| Stock-in-trade |
|
13 |
112,642,385 |
1,854,489 |
|
| Trade Debts |
|
14 |
3,149,301 |
139,029 |
|
| Loans
and advances |
|
15 |
18,601,233 |
8,792,947 |
|
| Deposits,
prepayments and other receivables |
16 |
7,949,892 |
4,031,172 |
|
| Cash
and bank balances |
|
17 |
6,605,601 |
735,199 |
|
|
|
|
---------- |
---------- |
|
|
|
|
186,785,782 |
56,088,717 |
|
|
|
|
---------- |
---------- |
|
| TOTAL
RUPEES |
|
454,609,879 |
344,728,465 |
|
|
|
|
|
========== |
========== |
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
|
|
(GHULAM MUHAMMAD A. FECTO) |
|
(SAID AHMED) |
|
| KARACHI:
the 18th February, 1999 |
|
Chief Executive |
|
Director |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30TH SEPTEMBER, 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
| Sales |
|
18 |
512,478,402 |
479,137,300 |
|
| Cost
of sales |
|
19 |
461,505,360 |
439,625,062 |
|
|
|
|
---------- |
---------- |
|
| Gross
profit |
|
|
50,973,042 |
39,512,238 |
|
|
|
|
|
| Administrative
Expenses |
|
20 |
28,797,437 |
27,481,528 |
|
| Selling
& Distribution Expenses |
|
21 |
2,713,250 |
1,397,162 |
|
|
|
|
---------- |
---------- |
|
|
|
|
31,510,687 |
28,878,690 |
|
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
19,462,355 |
10,633,548 |
|
| Other
income |
|
23 |
1,842,843 |
5,105,833 |
|
|
|
|
---------- |
---------- |
|
|
|
|
21,305,198 |
15,739,381 |
|
|
|
|
---------- |
---------- |
|
| Financial
expenses |
|
24 |
43,565,853 |
28,884,487 |
|
| Other
charges |
|
25 |
97,350 |
300,830 |
|
|
|
|
---------- |
---------- |
|
|
|
|
43,663,203 |
29,185,317 |
|
|
|
|
---------- |
---------- |
|
| Loss
before taxation |
|
|
(22,358,005) |
(13,445,936) |
|
| Taxation |
|
26 |
(5,294,463) |
(4,143,630) |
|
|
|
|
---------- |
---------- |
|
| Loss
after taxation |
|
|
(27,652,468) |
(17,589,566) |
|
| Un-appropriated
profit brought forward |
|
1,411,492 |
1,501,058 |
|
|
|
|
---------- |
---------- |
|
|
|
|
(26,240,976) |
(16,088,508) |
|
| Transfer
from Revenue Reserve |
|
|
27,500,000 |
17,500,000 |
|
|
|
|
---------- |
---------- |
|
| Un-appropriated
profit carried forward |
|
1,259,024 |
1,411,492 |
|
|
|
|
|
========== |
========== |
|
|
| NOTE:
The annexed notes form as integral part of these accounts |
|
|
|
(GHULAM MUHAMMED A. FECTO) |
|
(SAID AHMED) |
|
|
Chief Executive |
|
Director |
|
|
| KARACHI:
the 18th February, 1999 |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) FOR THE YEAR ENDED |
|
| 30TH
SEPTEMBER 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
| Cash
generated from operations |
|
A |
(42,455,571) |
35,725,968 |
|
| Financial
charges paid |
|
|
(40,827,410) |
(28,113,888) |
|
| Taxes paid |
|
|
(3,521,074) |
(4,946,676) |
|
|
|
---------- |
---------- |
|
| Net
cash inflow from operating activities |
|
(86,804,055) |
2,665,404 |
|
|
|
|
---------- |
---------- |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Fixed
capital expenditure |
|
|
(4,679,457) |
(2,823,892) |
|
| Sale
proceeds of fixed assets |
|
|
- |
744,000 |
|
| Decrease
in long term deposits |
|
|
3,082,083 |
955,000 |
|
|
|
|
---------- |
---------- |
|
|
|
(1,597,374) |
(1,124,892) |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Increase
in short term finance |
|
109,398,877 |
10,841,971 |
|
| Proceeds
of liabilities against |
|
|
|
| assets
subject to finance lease |
|
2,800,000 |
- |
|
| Repayments
of liabilities against assets subject |
|
|
| to
finance lease |
|
|
(23,439,667) |
(17,063,130) |
|
| Dividend
paid |
|
|
- |
(250) |
|
| Proceed/(Repayment)
of sub-ordinated loan |
|
- |
4,000,000 |
|
| Increase
in Deferred Liability |
|
5,512,621 |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
94,271,831 |
(2,221,409) |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
| Net
increase/(decrease)in cash and cash equivalents |
5,870,402 |
(680,897) |
|
| Cash
and cash equivalents in the beginning of the year |
735,199 |
1,416,096 |
|
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at the end of the year |
6,605,601 |
735,199 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed note form an integral part of these accounts |
|
|
|
(GHULAM MUHAMMED A. FECTO) |
|
(SAID AHMED) |
|
|
Chief Executive |
|
Director |
|
|
| KARACHI:
the 18th February, 1999 |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) FOR THE YEAR ENDED |
|
| 30TH
SEPTEMBER 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
|
RUPEES |
RUPEES |
|
| A.
CASH FLOW FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
(22,358,005) |
(13,445,936) |
|
| Add/(less)
adjustment for non cash charged |
|
|
|
| and
other items |
|
|
|
|
| Depreciation |
|
|
22,413,025 |
19,988,694 |
|
| (Profit)
on disposal of fixed assets |
|
- |
(705,358) |
|
| Financial
charges |
|
|
43,565,853 |
28,884,487 |
|
|
|
---------- |
---------- |
|
|
|
65,978,878 |
48,167,823 |
|
|
|
---------- |
---------- |
|
| Profit
before working capital changes |
|
43,620,873 |
34,721,887 |
|
|
|
|
---------- |
---------- |
|
|
|
|
| EFFECT
ON CASH FLOW DUE TO WORKING |
|
|
| CAPITAL
CHANGES |
|
|
|
|
|
|
| (Increase)/decrease
in current assets |
|
|
|
|
| Stores,
spares and loose tools |
|
2,698,511 |
(1,454,848) |
|
| Stock
in trade |
|
|
(110,787,896) |
360,702 |
|
| Trade debts |
|
|
(3,010,272 |
729,660 |
|
| Loans
and advances |
|
|
(9,808,286 |
202,104 |
|
| Deposits,
prepayments & receivables |
|
(3,918,720 |
(1,367,427) |
|
|
|
|
---------- |
---------- |
|
|
|
|
(124,826,663) |
(1,529,809) |
|
| increase/(decrease)
in current liabilities |
|
|
|
| Creditors
and accrued liabilities |
|
38,750,219 |
2,533,890 |
|
|
|
|
---------- |
---------- |
|
|
|
|
(86,076,444) |
1,004,081 |
|
|
|
|
---------- |
---------- |
|
| Cash
generated from operations |
|
|
(42,455,571) |
35,725,968 |
|
|
|
|
========== |
========== |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED 30TH SEPTEMBER 1998 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS: |
|
|
| Baba
Farid Sugar Mills Limited was incorporated in Pakistan in 1978 as a Public
Limited |
|
| Company
and its shares are quoted on the Karachi and Lahore Stock Exchanges. The |
|
| Company
is principally engaged in the production and sale of sugar. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: |
|
|
| 2.1
Accounting convention: |
|
|
|
| The
accounts of the Company are prepared on historical cost convention. |
|
|
|
|
| 2.2
Foreign Currency Translation: |
|
|
|
| Transactions
in Foreign Currencies are translated into Pak Rupees at the rate of |
|
| exchange
ruling on the Balance Sheet date. |
|
|
|
|
|
| 2.3
Staff Retirement Benefits: |
|
|
|
| The
Company operates a Contributory Provident Fund Scheme for all permanent |
|
| employees
eligible to the benefit. |
|
|
|
| 2.04
Taxation: |
|
