| Habib Sugar Mills Limited |
|
|
|
|
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|
| Annual
Report 2000 |
|
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|
| Contents |
|
|
| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Directors'
Report |
|
| Pattern
of Shareholdings |
|
| Auditors'
Report to the Members |
|
| Balance
Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Changes in Equity |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Statement
under Section 160 / 218 (2) of the Companies Ordinance, 1984 |
|
|
|
| Company
Information |
|
|
| Board of |
|
Asghar D. Habib |
|
Chairman |
|
| Directors |
|
All Raza D, Habib |
|
|
Lic. jur. Wolfgang E.
Seeger |
|
|
Farzana Munaf |
|
|
Murtaza H. Habib |
|
|
Hashain A. Habib |
|
|
Imran A. Habib |
|
|
Raeesul Hasan |
|
Chief Executive |
|
|
| Secretary |
|
Cawas R. Sethna |
|
|
| Bankers |
|
ABN-AMRO Bank N.V. |
|
|
Allied Bank of Pakistan
Limited |
|
|
American Express Bank
Limited |
|
|
Bank AL Habib Limited |
|
|
Citibank N.A. |
|
|
Habib Bank AG Zurich |
|
|
Habib Bank Limited |
|
|
Metropolitan Bank Limited |
|
|
Muslim Commercial Bank
Limited |
|
|
National Bank of Pakistan |
|
|
Societe Generale, The
French and International Bank |
|
|
Standard Chartered Bank |
|
|
| Auditors |
|
Hyder Bhimji & Co. |
|
|
Chartered Accountants |
|
|
| Registered |
|
Imperial Court, 3rd
Floor, |
|
|
|
| Office |
|
Dr. Ziauddin Ahmed Road, |
|
|
Karachi-75530 |
|
|
| Mills |
|
Nawabshah |
|
|
|
| Notice
of Annual General Meeting |
|
|
| Notice
is hereby given that the Thirty-ninth Annual General Meeting of Habib Sugar
Mills Limited will |
|
| be
held on Wednesday, March 21, 2001 at 11.00 a.m. at Marriott Hotel, Abdullah
Haroon Road, |
|
| Karachi,
to transact the following business: |
|
|
| 1.
To confirm the minutes of the Thirty-eighth Annual General Meeting of the
Company held on |
|
| March
30, 2000. |
|
|
| 2.
To receive and consider the audited accounts for the year ended September 30,
2000 and |
|
| reports
of the Directors and Auditors thereon. |
|
|
| 3.
To declare cash dividend @ 25% i.e. Rs. 1.25 per ordinary share of Rs. 5 each
for the year |
|
| ended
September 30, 2000 as recommended by Directors. |
|
|
| 4.
To appoint auditors and fix their remuneration. |
|
|
| Special
Business |
|
|
| 5.
To approve the remuneration of Chairman and working Director of the Company. |
|
|
|
By order of the Board |
|
|
|
Cawas R. Sethna |
|
| Karachi:
February 17, 2001 |
|
Company Secretary |
|
|
| Notes: |
|
| 1.
The Share Transfer Books of the Company will remain closed from Saturday,
March 10, 2001 |
|
| to
Wednesday, March 21, 2001, both days inclusive. |
|
|
| 2.
A member entitled to attend and vote at this meeting is entitled to appoint
another member |
|
| of
the Company as a proxy to attend and vote on his/her behalf. Proxies in order
to be |
|
| effective
must be received at the Registered Office of the Company duly stamped and
signed |
|
| at
least 48 hours before the time of meeting. |
|
|
| 3.
For identification, CDC account holders should present the participant's
National Identity Card, |
|
| and
CDC Account Number. |
|
|
| 4.
Members are requested to promptly communicate to the Company any change in
their |
|
| addresses. |
|
|
| 5.
For item 5 of the Agenda, statement under section 160 of the Companies
Ordinance, 1984 is |
|
| being
sent to all members. |
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|
|
| Directors'
Report |
|
|
| Dear
Members - Assalam-o-Alekum |
|
|
| On
behalf of my colleagues on the Board, I welcome you to the Thirty-ninth
Annual General Meeting |
|
| of
the Company and present the Annual Report, alongwith the audited accounts of
the Company |
|
| for
the year ended September 30, 2000. |
|
|
| The
Board of Directors expresses its deep regret and profound sorrow on the sad
passing away of |
|
| Mr.
Hamid Dawood Habib, Founder Director and Chairman of the Company on May 25,
2000 (20th |
|
| Safar
1421 A.H.). May Allah rest his soul in eternal peace! Ameen. His wisdom and
vision, together |
|
| with
high moral standards of ethics and principles, set the Company firmly on its
path of steady and |
|
| stable
progress. He shall be missed and fondly remembered. |
|
|
| Consequently,
the Board has appointed Mr. Asghar D. Habib as Chairman of the Company. To
fill |
|
| up
the casual vacancy having occurred, the Directors have appointed Mr. Imran A.
Habib as Director |
|
| of
the Company. |
|
|
| Operating
Results |
|
| By
the Grace of Allah, your Company's operations for the year resulted in a
pre-tax profit of |
|
| Rs.
102.598 million. The financial results and appropriations, as recommended by
the Board |
|
| of
Directors, are as follows: |
|
|
|
(Rupees in thousands) |
|
|
| Profit
for the year before taxation |
|
102,598 |
|
| Less:
Provision for taxation |
|
30,000 |
|
|
----------- |
|
| Profit
after taxation |
|
72,598 |
|
| Unappropriated
profit brought forward |
|
1,466 |
|
|
----------- |
|
| Profit
available for appropriation |
|
74,064 |
|
| Appropriations: |
|
| Proposed
- Cash Dividend @ 25% i.e. Rs.1.25 |
|
| per
ordinary share of Rs. 5 each |
|
40,500 |
|
|
| -
Transfer to general reserve |
|
32,500 |
|
|
----------- |
|
|
73,000 |
|
|
----------- |
|
| Unappropriated
profit carried forward |
|
1,064 |
|
|
========== |
|
|
| Performance
Review |
|
| Sugar Unit |
|
| The
1999-2000 crushing season commenced on November 1, 1999 and the plant
operated for 123 |
|
| days
upto March 2, 2000, producing 56,664 M. Tons of sugar with average sucrose
recovery of 8.47 |
|
| percent.
Comparative statistics of operations are as under: |
|
|
|
1999-2000 |
1998-1999 |
|
| Crushing duration |
|
Days |
123 |
160 |
|
| Sugar-cane crushed |
|
M. Tons |
668,811 |
968,788 |
|
| Average recovery |
|
% |
8.47 |
8.30 |
|
| Sugar production |
|
M. Tons |
56,664 |
80,435 |
|
|
| The
quantum of sugar-cane available during the season 1999-2000 was substantially
lower as |
|
| compared
with the season 1998-1999 due to the following reasons: |
|
|
| a)
The overall sugar-cane cultivation dropped drastically due to improved cotton
price last year, |
|
| which
resulted in the diversion of area under cultivation of sugar-cane to the more
lucrative |
|
| cotton
crop, besides, a vast area under sugar-cane cultivation in lower Sindh was
hit by |
|
| cyclone
causing damage to the standing crop. |
|
|
| b)
Shortage of water and unfavourable climatic conditions reduced the average
yield per acre |
|
| and
sucrose contents in the sugar-cane. |
|
|
| c)
Due to shortage of sugar-cane, growers were demanding higher prices. Some
mills in the |
|
| adjacent
areas raised sugar-cane prices paying upto and beyond Rs. 50 per 40 kgs. as
against |
|
| support
price of Rs. 36 per 40 kgs. Having no alternative, your company also had to
resort |
|
| to
purchasing sugar-cane at substantially higher rates. |
|
|
| The
above factors adversely affected the quantum of crushing and the production
of sugar during |
|
| the
year under review. |
|
|
| The
continued efforts of the management to strive towards containing costs and
increasing efficien- |
|
| cies
by the Grace of Allah, have helped to achieve higher operating profit of the
unit as shown in |
|
| the
accompanying accounts. |
|
|
| Trading Unit |
|
| To
meet the shortfall of sugar production in the country the government allowed
import of refined |
|
| sugar
at concessionary rates of import duty. The timely decision of the company to
import sugar |
|
| and
export of molasses has, by the Grace of Allah, contributed towards the
company's profitability |
|
| during
the year under review. |
|
|
| Distillery
Unit |
|
| The
comparative statistics of the unit's operations are given below: |
|
|
Days of |
Molasses |
Industrial alcohol |
|
| Year |
operation |
processed |
produced |
|
|
M. Tons |
M. Tons |
|
| 1999-2000 |
260 |
51,691 |
9,908 |
|
| 1998-1999 |
354 |
50,625 |
10,187 |
|
|
| The
unit produced 9,908 M. Tons of industrial alcohol as compared with 10,187 M.
Tons produced |
|
| during
the previous year. |
|
| Demand
for industrial alcohol during the year remained firm both in the domestic as
well as in the |
|
| international
markets, enabling the unit to maintain its profitability. |
|
|
| Pollution
Free Environment at Nawabshah |
|
| Your
Directors are pleased to inform you that the fly ash removal systems
installed in the boilers |
|
| continued
to operate satisfactorily and the spread of black soot particles has been
completely |
|
| eliminated.
Similarly, the slop treatment plant has fully eradicated the unpleasant smell
from the |
|
| distillery.
By the Grace of Allah, the successful operations of these projects have
ensured a pollution |
|
| free
environment for the citizens of Nawabshah. |
|
|
| Textile Unit |
|
| The
comparative production data for two years is given below: |
|
|
|
Days of |
Yarn consumed |
Finished product |
|
| Year |
operation |
Kgs. |
|
Kgs. |
|
|
| 1999-2000 |
302 |
873,567 |
|
728,561 |
|
| 1998-1999 |
300 |
973,978 |
|
878,452 |
|
|
| During
the year under review, the Textile unit earned a profit of Rs. 1.719 million
as against a profit |
|
| of
Rs. 1.406 million during the previous year. The unit operated satisfactorily
in terms of production |
|
| and
sales and also succeeded in finding new markets in Europe in order to enlarge
as well as |
|
| diversify
the customers' base. |
|
|
| Future
Prospects |
|
| The
2000-2001 crushing season commenced on November 4, 2000 and the mills have so
far |
|
| crushed
503,466 M. Tons (1999~2000:632,621 M. Tons) of sugar-cane with an average
sucrose |
|
| recovery
of 7.95% (1999-2000: 8.44%). |
|
|
| The
sugar-cane crushing is expected to be lower by approximately 15% as compared
with the |
|
| previous
year. This is largely attributed to reduction in the area under sugar-cane
cultivation, lower |
|
| yield's
due to shortage of irrigation water and scanty rainfall. |
|
|
| Sucrose
recovery is also lower due to poor quality of sugar-cane being heavily
infested by root and |
|
| stem
borer infestation. Scarcity of irrigation water/rainfall has had its toll on
the sucrose contents |
|
| of the crop. |
|
|
| Having
anticipated shortfall in the production of sugar within the country as a
whole, the government |
|
| has
taken steps to allow the import of raw sugar of 500,000 M. Tons, subsequently
increased to |
|
| 600,000
M. Tons which will not only help to cover the shortfall but will also provide
additional |
|
| capacity
utilization for the industry and save valuable foreign exchange. Your company
has imported |
|
| as
of the date of the report 34,000 M. Tons of raw sugar. |
|
|
| Higher
cost of sugar-cane coupled with lower recovery may adversely affect
profitability of the unit. |
|
|
| The
initial teething problems of the modification work undertaken in the
Distillery unit in the previous |
|
| year
have been rectified which will Inshallah help to achieve increased production
during the current |
|
| year.
The performance and profitability of the unit, Inshallah, is expected to be
better. |
|
|
| In
so far as the Textile unit is concerned, every endeavour is being made to
explore markets other |
|
| than
the traditional ones which have been our main buyers so far. The unit is
expected to perform |
|
| better,
in terms of production, sales and profitability during the ensuing year. |
|
|
| Pattern
of shareholdings |
|
| The
statement of pattern of shareholdings of the Company as at September 30, 2000 |
|
|
| Auditors |
|
| The
present auditors Messrs. Hyder Bhimji & Co., Chartered Accountants retire
and being eligible |
|
| offer
themselves for reappointment. |
|
|
| General |
|
| The
Directors place on record their appreciation of the devoted services and hard
work put in by |
|
| the
officers, staff and workers of the Company. |
|
|
|
On behalf of the Board of Directors |
|
|
|
ASGHAR D. HABIB |
|
| Karachi:
February 17, 2001 |
|
Chairman |
|
|
|
|
|
| Pattern
of Shareholdings as at September 30, 2000 |
|
|
|
| Number of |
|
Size of Shareholdings |
|
Total |
|
| Shareholders |
From |
|
To |
Shares held |
|
|
|
|
| 1,073 |
1 |
-- |
100 |
34,132 |
|
| 1,524 |
101 |
-- |
500 |
457,377 |
|
| 454 |
501 |
-- |
1,000 |
333,500 |
|
| 629 |
1,001 |
-- |
5,000 |
1,457,188 |
|
| 124 |
5,001 |
-- |
10,000 |
868,327 |
|
| 49 |
10,001 |
-- |
15,000 |
599,409 |
|
| 23 |
15,001 |
-- |
20,000 |
403,264 |
|
| 15 |
20,001 |
-- |
25,000 |
344,192 |
|
| 10 |
25,001 |
-- |
30,000 |
285,784 |
|
| 7 |
30,001 |
-- |
35,000 |
220,078 |
|
| 8 |
35,001 |
-- |
40,000 |
295,612 |
|
| 1 |
40,001 |
-- |
45,000 |
44,314 |
|
| 2 |
45,001 |
-- |
50,000 |
98,039 |
|
| 2 |
50,001 |
-- |
55,000 |
103,231 |
|
| 8 |
55,001 |
-- |
60,000 |
469,066 |
|
| 7 |
60,001 |
-- |
65,000 |
430,543 |
|
| 3 |
65,001 |
-- |
70,000 |
200,162 |
|
| 4 |
75,001 |
-- |
80,000 |
311,038 |
|
| 2 |
80,001 |
-- |
85,000 |
164,523 |
|
| 1 |
85,001 |
-- |
90,000 |
88,452 |
|
| 4 |
90,001 |
-- |
95,000 |
362,934 |
|
| 1 |
95,001 |
-- |
100,000 |
95,412 |
|
| 9 |
100,001 |
-- |
105,000 |
907,253 |
|
| 2 |
105,001 |
-- |
110,000 |
214,129 |
|
| 4 |
110,001 |
-- |
115,000 |
443,509 |
|
| 5 |
120,001 |
-- |
125,000 |
614,059 |
|
| 1 |
135,001 |
-- |
140,000 |
138,531 |
|
| 1 |
205,001 |
-- |
210,000 |
209,549 |
|
| 1 |
215,001 |
-- |
220,000 |
217,684 |
|
| 1 |
220,001 |
-- |
225,000 |
224,482 |
|
| 1 |
230,001 |
-- |
235,000 |
232,067 |
|
| 1 |
240,001 |
-- |
245,000 |
241,077 |
|
| 1 |
255,001 |
-- |
260,000 |
256,933 |
|
| 1 |
305,001 |
-- |
310,000 |
306,411 |
|
| 1 |
335,001 |
-- |
340,000 |
337,227 |
|
| 1 |
360,001 |
-- |
365,000 |
364,663 |
|
| 1 |
400,001 |
-- |
405,000 |
403,252 |
|
| 1 |
660,001 |
-- |
665,000 |
663,519 |
|
| 1 |
765,001 |
-- |
770,000 |
768,516 |
|
| 1 |
805,001 |
-- |
810,000 |
806,260 |
|
| 1 |
1,155,001 |
-- |
1,160,000 |
1,156,866 |
|
| 1 |
1,255,001 |
-- |
1,260,000 |
1,258,278 |
|
| 1 |
1,605,001 |
-- |
1,610,000 |
1,608,633 |
|
| 1 |
2,000,001 |
-- |
2,005,000 |
2,003,999 |
|
| 1 |
5,625,001 |
-- |
5,630,000 |
5,629,691 |
|
| 1 |
5,725,001 |
-- |
5,730,000 |
5,726,835 |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
|
| 3,991 |
|
32,400,000 |
|
| ========== |
========== |
========== |
========== |
========== |
|
|
|
| Shareholders'
Category |
|
No. of |
Shares held |
Percentage |
|
|
|
Shareholders |
|
|
| Individuals |
|
3,924 |
9,074,728 |
28.01 |
|
| Investment
Companies |
|
2 |
5,648,142 |
17.44 |
|
| Insurance
Companies |
|
6 |
2,706,832 |
8.35 |
|
| Joint
Stock Companies |
|
37 |
9,995,777 |
30.85 |
|
| Financial
Institutions |
|
6 |
2,342,592 |
7.23 |
|
| Modaraba
Company |
|
1 |
14,040 |
0.04 |
|
| Others: |
|
| Charitable
Trusts |
|
9 |
2,487,154 |
7.68 |
|
| Societies |
|
4 |
120,001 |
0.37 |
|
| Corporate
Law Authority |
|
1 |
10733 |
0.03 |
|
| The
Administrator Abandoned |
|
| Properties
Organisation, |
|
| Government
of Pakistan |
|
1 |
10,733 |
0.03 |
|
|
---------- |
---------- |
---------- |
|
|
3,991 |
32,400,000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Habib Sugar Mills Limited as at
September 30, 2000 |
|
| and
the related profit and loss account, statement of changes in equity and cash
flow statement, |
|
| together
with the notes forming part thereof, for the year then ended and we 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. |
|
|
| 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 ac- |
|
| counting
standards and the requirements of the Companies Ordinance, 1984. Our
responsibility is |
|
| to
express an opinion on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These |
|
| standards
require that we plan and perform the audit to obtain reasonable assurance
about whether |
|
| the
above said statements 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 manage- |
|
| ment,
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, 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: |
|
| 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 year was for the purpose of the Company's
business; |
|
| and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred 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, statement of changes in equity
and cash flow |
|
| statement,
together with the notes forming part thereof, conform with the approved
account- |
|
| ing
standards as applicable in Pakistan, and, 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, 2000 and of the profit, changes
in equity |
|
| and
its cash flows for the year then ended; and |
|
|
| (d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 (XVIII |
|
| of
1980), was deducted by the Company and deposited in the Central Zakat Fund
established |
|
| under
section 7 of that Ordinance. |
|
|
| Karachi:
February 17, 2001 |
|
Hyder Bhimji & Co. |
|
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at September 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
(Rupees in
thousands) |
|
| Capital
and Reserves |
|
| Share capital |
|
| Authorised |
|
| 40,000,000
ordinary shares |
|
| of Rs. 5 each |
|
200,000 |
200,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
3 |
162,000 |
162,000 |
|
| Reserves |
|
4 |
425,000 |
392,500 |
|
| Unappropriated
profit |
|
|
1,064 |
1,466 |
|
|
|
----------- |
----------- |
|
|
|
588,064 |
555,966 |
|
|
|
|
| Long-term
Finances - secured |
|
5 |
10,000 |
50,781 |
|
|
|
|
| Deferred
Liabilities |
|
6 |
199,269 |
182,394 |
|
|
| Current
Liabilities |
|
| Short-term
running finances - secured |
|
7 |
180,300 |
175,700 |
|
| Current
maturity of long-term finances |
|
8 |
20,782 |
23,431 |
|
| Creditors
and accrued expenses |
|
9 |
193,018 |
181,480 |
|
| Provision
for Income-tax |
|
|
13,589 |
23,665 |
|
| Proposed
dividend |
|
|
40,500 |
32,400 |
|
|
|
----------- |
----------- |
|
|
|
448,189 |
436,676 |
|
|
|
|
| Contingencies
and Commitments |
|
10 |
|
|
----------- |
----------- |
|
|
1,245,522 |
1,225,817 |
|
|
========== |
========== |
|
| Tangible
Fixed Assets |
|
| Operating
fixed assets |
|
11 |
577,625 |
603,785 |
|
| (at
cost less depreciation) |
|
|
|
| Capital
work-in-progress - at cost |
|
12 |
26,355 |
4,328 |
|
|
----------- |
----------- |
|
|
603,980 |
608,113 |
|
|
| Long-term
Investments |
|
13 |
23,175 |
23,175 |
|
|
|
|
| Long-term
Loans, Advances and Deposits |
|
14 |
7,637 |
5,950 |
|
|
| Current
Assets |
|
| Stores,
spares and loose tools |
|
15 |
60,549 |
60,343 |
|
| Stock-in-trade |
|
16 |
181,418 |
159,329 |
