Kohinoor Sugar Mills Limited - Annual Reports 2003

KOHINOOR SUGAR MILLS LIMITED

Annual Repors 2003

CONTENTS

COMPANY INFORMATION

BOARD OF DIRECTORES

M. USMAN SAIGOL

Chief Executive

M. FAROOQUE SAIGOL

M. SALEEM SAIGOL

TARIQ REHMAN

KHAWAJA KHURSHID ANWAR

SHEIKH ZAHID SULTAN

MUHAMMAD NAWAZ TISHNA

NIT Nominee

AUDIT COMMITTEE

M. FAROOQUE SAIGOL

Chairman

M. USMAN SAIGOL

Member

M. SALEEM SAIGOL

Member

COMPANY SECRETARY

FAROOQ AHMED

AUDITORS

MIS. S. M. MASOOD & CO.

Chartered Accountants

BANKERS

MUSLIM COMMERCIAL BANK LIMITED

FAYSAL BANK LIMITED

BANK ALFALAH LIMITED

UNION BANK LIMITED

REGISTERED OFFICE

ei-B-I.GULBERG-lll,

LAHORE.

Internet: www.ksugar.com

Email : secretary@ksugar.com

MILLS

JAUHARABAD,

DISTRICT KHUSHAB.

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Thirty-fifth Annual General Meeting of Kohinoor Sugar Mills

Limited will be held at the Registered Office of the Company at 61-B-l, Gulberg-lll, Lahore on Saturday

January 31, 2004 at 11:00 a.m. to transact the following business:-

1. To confirm the minutes of the Thirty-fourth Annual General Meeting held on March 29, 2003.

2. To review and adopt the audited accounts together with Directors' and Auditors' reports for

the year ended September 30, 2003.

3. To appoint Auditors and to fix their remuneration.

4. Any other business with the permission of the Chair.

The share transfer books of the Company will remain closed from 24th January to 31st January,

2004 (both days inclusive).

By order of the Board

(Farooq Ahmed)

LAHORE : December 09, 2003. Company Secretary

NOTE:

A member entitled to attend and vote at the meeting may appoint another member as his/her

proxy to attend and vote. Proxies in order to be effective must be received at the Registered

Office of the Company not later than 48 hours before the time of holding of the meeting.

STATEMENT OF ETHICS AND

BUSINESS PRACTICES

Code of ethics is a pre-requisite for all directors and employees

of Kohinoor Sugar Mills Limited. We endeavour to have fully

groomed employees committed to carry out honestly activities

assigned to them. Our aim is to have high standard of excellence

for the products and for all those involved with our Company.

VISION STATEMENT

To become a market leader in the Industry setting out high quality

standards for the Company and others to follow.

MISSION STATEMENT

To produce/manufacture quality sugar and molasses by

maintaining a high standard of efficiency and staying competitive

to ensure customer satisfaction and to provide a comfortable

level of return to all stakeholders.

DIRECTORS' REPORT TO THE SHAREHOLDERS

Your Directors are pleased to present the thirty-fifth report together with audited accounts for the

year ended September 30, 2003.

2003

2002

FINANCIAL RESULTS

(Rs. in thousands)

Profit / (Loss) before tax

-29,042

50,299

Taxation

-3,901

-4,573

Profit / (Loss) available for appropriations

-32,943

45,726

APPROPRIATIONS

The Directors recommend the following:

Profit / (Loss) for the year

-32,943

45,726

Dividend final - nil (2002 : 15%)

14,230

-32,943

31,496

Balance brought forward

-27,372

-58,868

-60,315

-27,372

OPERATING-RESULTS

Operating results for the year and comparative figures are as under:

2003

2002

2001

2000

Crushing days

No.

166

142

129

142

Average recovery

7.74

8.49

7.8

8.13

Cane crushed

M. Tons

630,565

529,915

361,843

455,470

Sugar produced

M. Tons

48,786

46,074

35,153

37,048

The sugar industry is grappling with the largest sugar surplus in our country's history. Sugar

prices have been on a constant decline in the last six months and this has impacted negatively on

the Company's profitability. Despite lower financial charges, the year has closed with a loss

because the sugar prices have fallen to an alarming level. The government's policy of mandating

cane price while leaving sugar price exposed to market forces has proved extremely detrimental.

BMR PLANS

New continuous vacuum pan and vapour cell will be commissioned in the 2003-04 season. The

emphasis will be on maximizing plant efficiency through removal of bottlenecks and improved

steam utilization.

PROSPECTS FOR 2003 - 2004

Steps taken in the last season for biological pe.st control and timely rains have helped to control

the pyrilla infestation. Sugar cane crop in the mills' area is therefore, expected to yield better

recovery in the 2003-04 season. The management remains concerned, however about the future

trend in sugar prices.

AUDITORS' REPORT

In reply to auditors observations your Directors have to comment as follows :

Recovery of dues from Kohinoor Textile Mills Ltd. (KTML) against the amount decreed in our

favour continues to be stayed in an appeal by KTML in the Lahore High Court. Mark-up has not

been provided.

AUDITORS

The retiring auditors Mis. S. M. Masood & Co. are eligible for the ensuing period, and have

offered themselves for reappointment.

APPRECIATION

Management and employee relations remained highly satisfactory and your Directors place on

record their appreciation to all concerned.

BOARD OF DIRECTORS MEETINGS

During the year 2002-03, four Meetings of the Board of Directors were held. The attendance by

each Director is as follows :

No. of Meetings Attended

1. Mr. M. Usman Saigol

2. Mr. M. Farooque Saigol

3. Mr. M. Saleem Saigol

4. Mr. Tariq Rehman

5. Sheikh Zahid Sultan

6. Khawaja Khurshid Anwar

7. Mr. Muhammad Nawaz Tishna - NIT Nominee

PATTERN OF SHAREHOLDING

The pattern of shareholding of the Company is annexed with the financial statements.

COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE

The management is fully aware of the compliance with the Code of Corporate Governance and

steps have been taken for its effective implementation. The various statements, as required by

the Code, are given below:

PRESENTATION OF FINANCIAL STATEMENTS

The financial statements, prepared by the management of the Company, fairly present its state of

affairs, the results of its operations, cash flow and changes in equity.

BOOKS OF ACCOUNT

The Company has maintained proper books of Account as required by the Companies

Ordinance, 1984.

ACCOUNTING POLICIES

Appropriate accountings policies have been consistently applied in preparation of financial

statements and accounting estimates are based on reasonable and prudent judgment.

INTERNATIONAL ACCOUNTING STANDARDS (IAS)

International Accounting Standards, as applicable in Pakistan, have been followed in preparation

of financial statements.

INTERNAL CONTROL SYSTEM

The system of internal control is sound in design and has been effectively implemented and

monitored. The review will continue in future for the improvement in controls.

GOING CONCERN

There are no significant doubts upon the Company's ability to continue as a going concern.

SUMMARIZED FINANCIAL DATA

Operating and financial summarized data for the last six years is annexed with financial

statements.

INVESTMENTS IN PROVIDENT FUND

Value of Investments based on last audited accounts of Provident Fund is Rs. 39.183 million.

AUDIT COMMITTEE

The Board of Directors in compliance to the Code of Corporate Governance has established an

Audit Committee. Following directors are its members.

Mr. M. Farooque Saigol Chairman

Mr. M. Usman Saigol Member

Mr. M. Saleem Saigol Member

SAFETY AND ENVIRONMENTS