| Bawany Sugar Mills Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| Company
Profile |
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| Notice
of Meeting |
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| Chairman's
Review |
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| Directors'
Report |
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| Auditors'
Report |
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| Balance Sheet |
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| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position (Cash Flow Statement) |
|
| Statement
of Changes in Equity |
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| Notes
to the Accounts |
|
| Pattern
of Share Holding |
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| COMPANY
PROFILE |
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| BOARD
OF DIRECTORS: |
1. Mr. Dawood Ebrahim
Bawany |
Chief Executive |
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|
2. Mr. Khalid Ebrahim
Bawany |
Chairman |
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|
3. Mr. Ismail Ebrahim
Bawany |
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4. Mr. Ahmed Ebrahim
Bawany |
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5. Ms. Farzana Munaf |
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6. Mr. Ansar Hussain |
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7. Mr. Muhammad Baqir
Jafferi |
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8. Mr. Syed Zamir Hassan |
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9. Mr. H. A. Satar
Mohammed |
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| COMPANY
SECRETARY |
Mr. Muhammad Baqir
Jafferi |
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| BANKERS |
|
Habib Bank Limited |
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|
National Bank of Pakistan |
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|
Metropolitan Bank Limited |
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| AUDITORS |
|
Hyder Bhimji & Co., |
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|
Chartered Accountants. |
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| REGISTERED
OFFICE |
Bank House No. 1, |
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|
3rd Floor, Habib Square, |
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M. A. Jinnah Road, |
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P. O. Box No. 4178, |
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Karachi-74000 |
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| MILLS |
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Ahmed Nagar |
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TALHAR |
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(Distt. Badin) Sindh. |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the 36th Annual General Meeting of the Company will be
held on |
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| Saturday,
26th May 2001 at 2:00 p.m. at the Registered Office at 3rd Floor, Bank House
No. 1, |
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| Habib
Square, M.A. Jinnah Road, Karachi to transact the following business: |
|
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| 1.
To confirm the minutes of the 35th Annual General Meeting held on 27th March,
2000. |
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| 2.
To receive, consider and adopt the Director's Report, Chairman's Review
Audited Accounts of |
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| the
Company and Auditor's Report thereon for the year ended 30th September 2000. |
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| 3.
To appoint Auditors for the year 2000-2001 and fix their remuneration. The
present Auditors |
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| Messrs.
Hyder Bhimji & Co., Chartered Accountants, being eligible have offered
themselves |
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| for
re-appointment. |
|
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| 4.
To transact any other business the may be brought forward with the permission
of the |
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| Chairman. |
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|
BY ORDER OF THE BOARD |
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|
Muhammad Baqir Jafferi |
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| Karachi:
Dated 04th May, 2001. |
|
Company Secretary |
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| NOTES: |
|
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| l.
The Share Transfer Books of the Company will be closed from 25th May 2001 to
31st May |
|
| 2001
(both days inclusive). |
|
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| 2.
A member eligible to attend and vote at this meeting may appoint another
member as his/her |
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| proxy
to attend and vote instead of him/her. Proxies in order to be effective must
be received by |
|
| the
Company at the Registered Office not later than 48 hours before the time for
holding tile |
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| Meeting. |
|
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| 3.
Shareholders are requested to immediately notify the change in address, if
any. |
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|
BY ORDER OF THE BOARD |
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|
Muhammad Baqir Jafferi |
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| Karachi:
Dated 04th May, 2001. |
|
Company Secretary |
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|
| CHAIRMAN'S
REVIEW |
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|
| IN
THE NAME OF ALLAH, THE MOST GRACIOUS, THE MOST MERCIFUL |
|
|
| I
present this review of the Company's Annual Report and performance for the
year ended |
|
| September
30, 2000. Your Company suffered a gross loss of 80.50 million as against
gross profit |
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| of
48.87 million of last year. As reported earlier the cane crushing and sugar
production both |
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| showed
a drastic decline as given below. |
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| PARTICULARS |
|
Year |
|
Year |
|
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|
1999/00 |
|
1998/99 |
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| Season |
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|
07/11/99 to 10/02/00 |
|
11/11/98 to 26/03/99 |
|
| Number
of Days worked |
|
96 |
|
136 |
|
| Cane
crushed M. Tons |
|
258,757 |
|
601,320 |
|
| Average
Recovery |
|
9.33% |
|
9.14% |
|
| Production
of Sugar M. Tons |
|
23,876 |
|
55,023 |
|
| Production
of Molasses M. Tons |
|
12,005 |
|
29,440 |
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| A
massive cyclone hit the Badin District in May 1999 and devastated the Ratoon
and spring |
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| plantation
in our cane procurement areas. The entire district was declared a calamity
area. Your |
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| Mill
closed on 10th of February, 2000 due to a collapse in sugar cane supply,
which had already |
|
| been
trickling in at low pace throughout the season. The final production of
23,876 metric tonnes |
|
| was
the lowest ever in the past 25 years. There was an overall decline of
sugarcane crop in the |
|
| country
and particularly in the province of Sindh. Our mills was one of the worst
sufferers of |
|
| acute
shortage of sugarcane crop due to high intensity cyclone last year, which
particularly |
|
| damaged
the sugarcane crop in Badin and surroundings districts. |
|
|
| Due
to acute shortage of sugarcane crop the prices of sugar-cane also shot up
abruptly, whereas |
|
| sugar
prices declined as a result of low international prices and our import
policies. We had to sell |
|
| sugar
soon after the same was manufactured as due to the paucity of funds, we had
to make |
|
| prompt
payments to the growers. |
|
|
| Your
mill started the current crushing season on 27th November, 2000 and by the
Grace of |
|
| Almighty
Allah, the production was bagged at 28,135 metric tons, on 31st March, 2001
at an |
|
| average
recovery rate of 9.48. The sowing for the next season is on the lower side
and we pray to |
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| Almighty
Allah for favourable weather and water conditions in the hope of a healthy
crop and |
|
| blessings
in all our endeavours. |
|
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| We
are also negotiating with the Banks/DFls and their response is encouraging. |
|
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| The
relationship among the Staff, Workers and Management with the blessing of
Almighty |
|
| ALLAH
remained satisfactory and may ALLAH bless us in our efforts. |
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|
|
|
KHALID EBRAHIM BAWANY |
|
| Karachi:
04th May, 2001. |
|
Chairman |
|
|
|
|
| DIRECTORS'
REPORT |
|
|
| IN
THE NAME OF ALLAH, THE MOST GRACIOUS, THE MOST MERCIFUL |
|
|
| Dear
Shareholder, |
|
| By
the Grace of Almighty Allah, your Directors presenting the 36th Annual Report
and the |
|
| Company's
Audited Accounts together with the Auditors' Report thereon for the year
ended 30th |
|
| September,
2000. |
|
|
| ACCOUNTS: |
|
|
Rupees |
|
|
|
|
|
|
| (Loss)
for the year after provision for Taxation |
|
(224,200,261) |
|
| (Loss)
brought forward |
|
(188,647,680) |
|
|
|
|
------------------ |
|
| Accumulated
(Loss) |
|
(412,847,941) |
|
|
========== |
|
|
| The
loss for the year under review has the following reasons. |
|
|
| a)
Short production of 23,876 metric tons. |
|
| b)
Administrative Expenses |
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| c)
Financial Expenses |
|
|
| AUDITORS'
OBSERVATION: |
|
| The
audit report for the period under review contain qualification, which are
being addressed as |
|
| follows: |
|
|
| i)
The Institute of Chartered Accountants of Pakistan and Banks and DFIs have an |
|
| understanding
in the mater of direct confirmation by Banks and DFIs, we cannot influence |
|
| Banks
and DFIs in this matter. |
|
|
| ii)
The conditions are not permanent and would reverse. The Company managed
financial |
|
| affairs,
re-arranged / re-structured its financial liabilities. The sponsors of the
Company are |
|
| committed
to continued operation and plans are afoot to improved the Company's |
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| operational
results. |
|
|
|
|
| PATTERN
OF SHARE HOLDINGS |
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| The
pattern of share holdings as at 30th September, 2000 is annexed to this
report. |
|
|
| AUDITORS |
|
| M/s.
Hyder Bhimji & Company, Chartered Accountants, Auditors of the company
retire at this |
|
| Annual
General Meeting and being eligible, offer their services for re-appointment
as auditors of |
|
| the
company for the ensuing year. |
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|
|
|
For and on behalf of the Board. |
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|
|
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|
|
DAWOOD EBRAHIM BAWANY |
|
| Karachi:
04th May, 2001. |
|
Chief Executive |
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|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of BAWANY SUGAR
MILLS LIMITED as at |
|
| September
30, 2000 and the related Profit and Loss Account, Cash Flow Statement and
statement |
|
| of
changes in equity, together with the Notes forming part thereof, for the
period then ended and we |
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| state
that we have obtained all the information and explanations which, to the best
of our |
|
| knowledge
and belief were necessary for the purposes of our audit. |
|
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| It
is the responsibility of the company's management to establish and maintain a
system of Internal |
|
| control
and prepare and present the above said statements in conformity with the
approved |
|
| accounting
standards and the requirements of the Companies Ordinance, 1984. Our
responsibility is |
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| to
express an opinion on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the approved auditing standards as
applicable in |
|
| Pakistan.
These standards requires that we plan an perform the audit to obtain
reasonable assurance |
|
| about
whether the said statement are free of any material misstatement. An audit
includes |
|
| examining
on a test basis, evidence supporting the amounts and disclosures in the above
said |
|
| statements.
An audit also includes assessing the accounting policies and significant
estimates made |
|
| by
management, as well as, evaluating the overall presentation of the above said
statements. We |
|
| believe
that our audit provides a reasonable basis for our opinion and, after due
verification. |
|
|
| (i)
We have not received direct confirmation from National Development Finance |
|
| Corporation
confirming the outstanding balance including markup and Charges, despite |
|
| sending
reminder request. |
|
|
| (ii)
The company's accounts has been prepared on going concern basis despite the
fact that |
|
| the
company is sustaining significant losses over the years which has now
aggregated |
|
| to
Rs. 412.847 Million resulting into negative equity of Rs. 157.356 Million
besides for |
|
| the
effects of our above observation if given effect, would result substantially
increase |
|
| the
loss reported by the company while current ratio of the company has reached
the |
|
| level of 0.49:1. |
|
|
| Subject
to effect of above, we report that: |
|
|
| a)
In our opinion, proper books of accounts have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984. |
|
|
| b)
Except for the effects of the above in our opinion: |
|
|
| (i)
the Balance Sheet and profit and loss account together with the Notes 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 period was for the purpose of the
Company's |
|
| business; and |
|
|
| (iii)
the business conducted, investment made and the expenditure incurred during |
|
| the
period were in accordance with the objects of the Company; |
|
|
| c)
Subject to the effects of above in our opinion and to the best of our
information and according |
|
| to
the explanations given to us, the balance sheet, profit & loss account,
cash flow statement |
|
| and
statement of changes in equity together with the notes forming part thereof,
give the |
|
| information
required by the Companies Ordinance, 1984, in the manner so required and with |
|
| the
exception for the effect of above respectively give a true and fair view of
the state of the |
|
| Company's
affairs as at September 30, 2000 and of the Loss, its Cash Flow and changes
in |
|
| equity
for the year then ended; and |
|
|
| d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| e)
Without qualifying our report, we refer the matter in Note No. 10. |
|
|
|
|
|
|
|
|
HYDER BHIMJI & CO. |
|
| Karachi:
4th May, 2001. |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30TH SEPTEMBER, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
Notes |
RUPEES |
RUPEES |
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
| SHARE
CAPITAL |
|
|
|
| Authorised: |
|
| 15,000,000
Ordinary Shams of Rs. 10/- each |
|
150,000,000 |
150,000,000 |
|
|
========== |
========== |
|
|
| Issued,
Subscribed and Paid-up Capital |
2 |
87,245,910 |
87,245,910 |
|
|
| RESERVES
AND SURPLUS |
|
|
|
| Reserves |
|
3 |
168,245,430 |
168,245,430 |
|
| Accumulated
(Loss) |
|
|
(412,847,941) |
(188,647,680) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(244,602,511) |
(20,402,250) |
|
|
|
|
------------------ |
------------------ |
|
|
|
(157,356,601) |
66,843,660 |
|
|
|
| REDEEMABLE
CAPITAL |
|
4 |
59,529,632 |
89,902,020 |
|
|
|
|
|
| LONG-TERM
LOAN |
|
5 |
6,593,077 |
18,808,588 |
|
|
|
| DEFERRED
LIABILITIES |
|
| Deferred
Taxation |
|
|
43,000,000 |
43,000,000 |
|
|
| CURRENT
LIABILITIES |
|
| Current
Maturity of Redeemable |
|
|
|
| Capital
& Long term Loan |
|
6 |
104,687,136 |
62,099,237 |
|
| Short
term running finance |
|
7 |
220,466,405 |
231,166,919 |
|
| Creditors,
Accrued and Other Liabilities |
8 |
455,559,772 |
318,789,714 |
|
| Provision
for Taxation |
|
9 |
13,868,802 |
12,444,184 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
794,582,115 |
624,500,054 |
|
| CONTINGENCIES
& COMMITMENTS |
l 0 |
|
|
------------------ |
------------------ |
|
|
|
746,348,223 |
843,054,322 |
|
|
|
========== |
========== |
|
|
|
|
| Note:
The Annexed notes form an integral part of these accounts. |
|
|
|
| Karachi: |
|
| Dated:
May 04, 2001 |
|
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
Assets |
|
11 |
348,626,243 |
383,378,546 |
|
| Capital
Work-in-Progress |
|
12 |
-- |
1,027,659 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
348,626,243 |
384,406,205 |
|
| LONG-
TERM INVESTMENTS |
|
13 |
582,986 |
4,332,986 |
|
| LONG
TERM DEPOSITS |
|
14 |
8,164,546 |
8,304,546 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
| Stores
and Spares |
|
15 |
35,319,859 |
41,353,872 |
|
| Stock-in-Trade |
|
16 |
12,724,741 |
8,558,081 |
|
| Trade Debts |
|
17 |
101,746,666 |
111,407,380 |
|
| Loans,
Advances & Other Receivables |
18 |
238,242,349 |
282,483,042 |
|
| Cash
and Bank Balances |
|
19 |
940,833 |
2,208,210 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
388,974,448 |
446,010,585 |
|
|
|
|
------------------ |
------------------ |
|
|
|
746,348,223 |
843,054,322 |
|
|
========== |
========== |
|
|
|
KHALID EBRAHIM BAWANY |
|
|
DAWOOD EBRAHIM BAWANY |
|
|
|
Chairman |
|
|
Chief Executive |
|
|
|
| NOTES:
Mr. Dawood E. Bawany, Chief Executive of the Company is presently out of
Pakistan hence these accounts have been |
|
| authenticated
by two Directors in accordance with the section 241 of the Companies
Ordinance |
|
|
|
|
| PROFIT
& LOSS ACCOUNT FOR THE YEAR |
|
| ENDED
30TH SEPTEMBER, 2000 |
|
|
|
|
2000 |
1999 |
|
|
|
Notes |
RUPEES |
RUPEES |
|
|
| Sales |
|
20 |
330,096,183 |
830,031,804 |
|
| Less:
Cost of Sales |
|
21 |
410,602,268 |
781,155,353 |
|
|
|
------------------ |
------------------ |
|
| GROSS
(Loss) / PROFIT |
|
(80,506,085) |
48,876,451 |
|
|
|
|
| Establishment
and Other Expenses |
22 |
52,551,835 |
54,458,300 |
|
| Selling
and Distribution Expenses |
|
23 |
327,431 |
13,816,258 |
|
|
|
|
------------------ |
------------------ |
|
|
|
52,879,266 |
68,274,558 |
|
|
|
------------------ |
------------------ |
|
| Operating
(Loss) before the following: |
|
(133,385,351) |
(19,398,107) |
|
| Other
Income/(Loss) |
|
24 |
9,450,710 |
(19,110,925) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(123,934,641) |
(38,509,032) |
|
|
|
|
------------------ |
------------------ |
|
| Financial
Expenses |
|
25 |
985,702,951 |
93,611,455 |
|
| Charity
and Donation |
|
26 |
25,325 |
80,300 |
|
|
------------------ |
------------------ |
|
|
|
|
98,595,620 |
93,691,755 |
|
|
|
|
------------------ |
------------------ |
|
| (Loss)
before taxation |
|
|
(222,530,261) |
(132,200,787) |
|
| Provision
for taxation |
|
27 |
(1,670,000) |
(4,200,000) |
|
|
|
|
------------------ |
------------------ |
|
| (Loss)
after taxation |
|
|
(224,200,261) |
(136,400,787) |
|
| Accumulated
(Loss) brought forward |
|
(188,647,680) |
(52,246,893) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
(Loss) carried over to Balance Sheet |
|
(412,847,941) |
(188,647,680) |
|
|
|
|
========== |
========== |
|
| Earnings
Per Share |
|
28 |
(25.70) |
(15.63) |
|
|
|
|
|
|
KHALID EBRAHIM BAWANY |
|
|
DAWOOD EBRAHIM BAWANY |
|
|
|
Chairman |
|
|
Chief Executive |
|
|
|
| NOTES:
Mr. Dawood E. Bawany, Chief Executive of the Company is presently out of
Pakistan hence these accounts have been |
|
| authenticated
by two Directors in accordance with the section 241 of the Companies
Ordinance. |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) FOR THE YEAR ENDED 30TH SEPTEMBER. 2000 |
|
|
|
|
2000 |
1999 |
|
|
|
RUPEES |
RUPEES |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| (Loss)
before taxation |
|
(222,530,261) |
(132,200,787) |
|
| ADD:
item not effecting funds: |
|
|
|
| Depreciation |
|
38,958,472 |
19,480,840 |
|
| (Profit)
/ Loss on sale of fixed assets |
|
(1,911,842) |
94,447 |
|
| Loss
on sale of shares investment |
|
1,822,200 |
38,025,000 |
|
| Financial
Charges |
|
98,570,295 |
93,611,455 |
|
|
|
------------------ |
------------------ |
|
|
|
(85,091,136) |
19,010,955 |
|
|
|
|
| (INCREASE)
/ DECREASE IN CURRENT ASSETS |
|
| Stores
and spares |
|
|
6,034,013 |
733,283 |
|
| Stock-in-trade |
|
|
|
(4,166,660) |
27,058,664 |
|
| Trade debts |
|
|
|
9,660,714 |
28,803,773 |
|
| Loans,
advances and Other Receivables |
|
44,240,693 |
(242,999,260) |
|
|
|
------------------ |
------------------ |
|
|
|
|
|
55,768,760 |
(186,403,540) |
|
|
|
|
| INCREASE
/ (DECREASE) IN CURRENT LIABILITIES |
|
| Creditors,
accrued and Other Liabilities |
|
69,997,553 |
163,043,473 |
|
| Payment
of Income - tax |
|
(245,382) |
(3,669,296) |
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow / (outflow) from operating activities |
40,429,795 |
(8,018,408) |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Fixed
Operating Assets including Capital work-in-Progress |
(5,208,663) |
(11,885,752) |
|
| Proceeds
from sale of fixed assets |
|
3,942,000 |
3,078,200 |
|
| Proceeds
from sale of Long-term investments |
|
1,927,800 |
3,400,000 |
|
| Decrease
/ (Increased) in Long-term deposits |
|
140,000 |
(2,606,488) |
|
|
|
------------------ |
------------------ |
|
| Net
cash out flow from investing activities |
|
801,137 |
(8,014,040) |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Payment
of Redeemable Capital & Long Term Loan |
|
-- |
(10,478,080) |
|
| Financial
Charges Paid |
|
(31,797,795) |
(45,696,139) |
|
| (Decrease)
/ Increase in short-term borrowings |
|
( 10,700,514) |
69,204,681 |
|
|
------------------ |
------------------ |
|
| Net
cash out flow from financing activities |
|
(42,498,309) |
13,030,462 |
|
|
|
|
|
| Net
(decrease) in cash and cash equivalents |
|
(1,267,377) |
(3,001,986) |
|
| Cash
and cash equivalents at the beginning of the year |
2,208,210 |
5,210,196 |
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of the year |
|
940,833 |
2,208,210 |
|
|
|
|
========== |
========== |
|
|
|
KHALID EBRAHIM BAWANY |
|
|
DAWOOD EBRAHIM BAWANY |
|
|
Chairman |
|
|
Chief Executive |
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED 30TH SEPTEMBER. 2000 |
|
|
|
|
Shares |
General |
Accumulated |
Total |
|
|
|
Capital |
Reserve |
(Loss) |
|
|
|
| Balance
at 1st October, 1998 |
83,091,340 |
172,400,000 |
(52,246,893) |
203,244,447 |
|
| Bonus
Shares Issued |
4,154,570 |
(4,154,570) |
-- |
-- |
|
| (Loss)
for the year 1999 |
-- |
-- |
(136,400,787) |
(136,400,787) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
at 30th September, 1999 |
87,245,910 |
168,245,430 |
(188,647,680) |
66,843,660 |
|
|
|
|
| (Loss)
for the year 2000 |
-- |
-- |
(224,200,261) |
(224,200,261) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
at 30th September 2000 |
87,245,910 |
168,245,430 |
(412,847,941) |
(157,356,601) |
|
|
========== |
========== |
========== |
========== |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
