| Mirpurkhas Sugar Mills Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| COMPANY
INFORMATION |
|
| NOTICE
OF MEETING |
|
| DIRECTORS'
REPORT TO MEMBERS |
|
| GRAPHS
OF PROGRESS |
|
| RATIO
ANALYSIS OF ACCOUNTS |
|
| AUDITORS'
REPORT TO MEMBERS |
|
| BALANCE
SHEET |
|
| PROFIT
& LOSS ACCOUNT |
|
| CASH
FLOW STATEMENT |
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| NOTES
FORMING PART OF THE ACCOUNTS |
|
| PATTERN
OF SHAREHOLDING |
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| SECP'S
CIRCULAR OF JANUARY 26, 2000 |
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|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
|
| Mr.
Mohammed Faruque |
|
Chairman |
|
|
| Mr.
Mahmood Faruque |
|
Chief Executive/Managing
Director |
|
|
| Mr.
Iqbal Faruque |
|
Director |
|
| Mr.
Akbarali Pesnani |
|
Director |
|
| Mr.
Aslam Faruque |
|
Director |
|
| Mr.
Tariq Faruque |
|
Director |
|
| Mr.
Maqbool H. H. Rahimtoola (NIT) |
Director |
|
| Mr.
Anis Wahab Zuberi (NIT) |
|
Director |
|
| Mr.
Gul Nawaz (NIT) |
|
Director |
|
|
| COMPANY
SECRETARY |
|
| Rauf Jafrani |
|
|
| AUDITORS |
|
| Hyder
Bhimji & Co. |
|
| Chartered
Accountants |
|
| Karachi. |
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|
| REGISTERED
OFFICE |
|
| Modern
Motors House, |
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| Beaumont
Road, |
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| Karachi-75530 |
|
|
| FACTORY |
|
| Jamrao Dist. |
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| Mirpurkhas. |
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|
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| NOTICE
OF MEETING |
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| NOTICE
IS HEREBY GIVEN that the 36th Annual General Meeting of this Company will be
held on Monday, |
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| March
26, 2001 at 2:00 p.m. at the Registered Office of the Company at Modern
Motors House, Beaumont |
|
| Road,
Karachi to transact the following business: |
|
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| 1.
To receive and consider the audited accounts of the company for the year
ended on September 30, |
|
| 2000,
with the Directors' and the Auditors' Reports thereon. |
|
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| 2.
To declare dividend of Rs. 0.70 per share (@ 7%) for the financial year ended
on September 30, 2000 |
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| as
recommended by the Directors. |
|
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| 3.
To appoint auditors for the ensuing year and to fix their remuneration. |
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|
By Order of the Board |
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|
R. JAFRANI |
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| Karachi,
February 26, 2001. |
|
Secretary |
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|
| NOTES: |
|
|
| (1)
The register of members of the Company will be closed from Monday, March 19
to Monday, March 26, |
|
| 2001
inclusive, and no transfers will be registered during that time. Shares
received in order at the |
|
| registered
office of the Company at the close of business on Friday, March 16, 2001 will
be treated in |
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| time
for entitlement of the above dividend. |
|
|
| (2)
A member eligible to attend and vote at the Annual General Meeting may
appoint another member as |
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| his/her
proxy to attend and vote in his/her stead. Proxies to be effective must be in
writing and must be |
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| received
by the Company 48 hours before the Meeting. |
|
|
| (3)
Shareholders whose shares are registered in their account/sub-account/group
account with Central |
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| Depository
System (CDS) are requested to bring original NIC along with their account
number in CDS |
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| and
participant's ID Number for verification. In case of appointment of proxy by
such account holders |
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| and
sub-account holders the guidelines as contained in SECP's circular of January
26, 2000 to be |
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| followed. |
|
|
| (4)
The Shareholders are requested to notify the Company immediately the change
in their address, if |
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| any. |
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|
|
| DIRECTORS'
REPORT TO THE MEMBERS |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
| Your
Directors are pleased to present to you 36th Annual Report together with the
audited accounts for the year |
|
| ended
September 30, 2000. |
|
|
| PRODUCTION |
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| The
cane crushing for the period under review started on 05.11.1999 and ended on
16.02.2000.This only gave |
|
| us
104 days of crushing against 148 days for the previous year. The production
data for the current year as well |
|
| the
comparative figures for the previous year are given below: |
|
|
|
Year ended |
Year ended |
Percentage |
|
|
30.09.2000 |
30.09.1999 |
change |
|
|
| Sugarcane
crushed (MT) |
|
337,448 |
430,312 |
(21.58) |
|
|
|
|
| Sucrose
percentage |
|
9.13 |
8.76 |
4.22 |
|
| Sugar
production (MT) |
|
30,774 |
37,989 |
(18.99) |
|
| Molasses
Production (MT) |
|
18,154 |
22,312 |
(18.64) |
|
| Average
crushing per day (MT) |
3,245 |
2,907 |
11.63 |
|
|
| During
the year the availability of sugarcane in Sindh decreased by about 28% (i.e.
from 15,095,412 MT to |
|
| 10,856,757
MT) thus resulting in a shorter cane crushing period. The shortage of
sugarcane led to unhealthy |
|
| price
competition among sugar mills which adversely affected the cost of
production. |
|
|
| OPERATIONAL
RESULTS |
|
| The
summarized operating results are as follows: |
|
|
|
1999-2000 |
1998-1999 |
Percentage |
|
|
(Rs.'Million) |
(Rs.'Million) |
change |
|
|
| Net Sales |
|
558.06 |
593.52 |
(5.98) |
|
| Cost of Sales |
|
503.55 |
564.33 |
{10.77) |
|
| Gross Profit |
|
54.50 |
29.19 |
86.71 |
|
| Expenses
& Taxes |
|
91.85 |
85.43 |
7.52 |
|
| Net
Profit before tax |
|
7.81 |
5.05 |
54.86 |
|
| Net
(Loss)/Profit after tax |
|
(9.065) |
10.68 |
(184.87) |
|
|
| Other
comparative figures are reflected in the Financial Statements. |
|
|
| APPROPRIATION |
|
| After
providing for the tax we ended the year with a net loss of Rs.9.065 Million.
The total contribution to the |
|
| government
on account of excise duty, sales tax, income tax was Rs.87.406 million
against Rs. 71.443 million |
|
| for
the year 1999-2000. |
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|
(Rs. Million) |
|
| Net
(Loss) for the year. |
|
(9.065) |
|
| Proposed
Cash Dividend |
|
(4.472) |
|
|
---------- |
|
|
(13,537) |
|
| Loss
brought forward |
|
(28.143) |
|
|
---------- |
|
| Net
Loss carried forward |
|
(41.680) |
|
|
========== |
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|
| OUTLOOK
FOR 2000-2001 |
|
| The
current crushing season started on 4th November 2000 and as on 25th February
2001, we have crushed |
|
| 353,891
tonnes@ 8.87% recovery and produced 30,899 tonnes sugar and 18,873 tonnes
Molasses. There is |
|
| an
increase in the quantity of sugarcane crushed. However, the sucrose contents
has decreased from 9.13% |
|
| to
8.87 %. We have also been able to produce 3,921 tonnes sugar by refining
imported raw sugar. |
|
|
| Due
to extreme shortage of water, cane production was badly affected resulting in
availability of lesser quantity |
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| than
required by the mills. This again led to higher prices for available
sugarcane which obviously means higher |
|
| cost
of production. On the whole the sugar production in the country during the
current year is expected to |
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| decline.
The government has allowed import of raw sugar to compensate for shortage of
cane requirement of |
|
| each
mill. To check prices of sugar rising beyond an acceptable level, import of
refined sugar was also allowed |
|
| by
the Government. Due to import of refined sugar, prices of local sugar are
presently under pressure. This will |
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| necessitate
holding sugar stocks for longer period which results in increased carrying
charges. |
|
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| BEYOND
2001 |
|
| Because
of no rains in Northern Areas and as well as in Sindh, the growers are
expecting further decline in |
|
| supply
of water for cultivation for the next season which would adversely affect the
availability of sugar cane. |
|
| There
will be a need to import raw and refined sugar to compensate for the shortage
as was done this year. We |
|
| are
closely monitoring the situation and if needed we will import raw/refined
sugar to improve the operating |
|
| results.
Most of the balancing work that was required to improve the operation of the
mill has already been |
|
| carried
out and we look to the future with hope knowing very well that there could be
difficult times ahead. |
|
|
| AUDITORS |
|
| The
Auditors of the Company, Messrs Hyder Bhimji & Co., retire and being
eligible offer themselves for re- |
|
| appointment. |
|
|
| GENERAL |
|
| Our
special thanks are due to team of dedicated managers, executives, supervisors
and hard working workers, |
|
| who
continued to put in their best effort for achieving results. |
|
|
|
For and on behalf of the Board |
|
|
|
|
|
MOHAMMED FARUQUE |
|
| KARACHI:
February 26, 2001 |
|
Chairman |
|
|
|
|
| RATIO
ANALYSIS ON ACCOUNTS |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
2000 |
1999 |
|
| PROFITABILITY |
|
| Gross
profit (percentage) |
|
9.77 |
4.91 |
|
| Operating
profit / (loss) (percentage) |
|
4.52 |
(1.89) |
|
| Net
profit before Tax (percentage) |
|
1.40 |
0.84 |
|
| Net
(loss) / profit after tax (percentage) |
|
(1.62) |
1.80 |
|
| Decline
/ growth in net profit after tax (percentage) |
|
(184.88) |
131.07 |
|
| E.P.S.
(before tax) |
|
1.22 |
0.78 |
|
| E.P.S.
(after tax) |
|
(1.42) |
1.67 |
|
| Net
(loss) / profit to total assets (average after tax) (percentage) |
(1.70) |
1.88 |
|
| (Decrease)
/increase in sales (gross percentage) |
|
(5.97) |
18.63 |
|
| (Decrease)
/increase in sales (net percentage) |
|
(5.98) |
19.14 |
|
| Material
as % of net sales |
|
65.04 |
71.35 |
|
| Labour
as % of net sales |
|
8.33 |
8.39 |
|
| Other
cost of sales expenses as % of net sales |
|
12.73 |
13.87 |
|
| Raw
& packing material as % of cost of sales |
|
75.53 |
76.21 |
|
| Administrative
expenses as % of net sales |
|
5.10 |
4.74 |
|
| Selling
expenses as % of net sales |
|
0.14 |
2.07 |
|
| Income
tax as % of net sales |
|
3.02 |
(0.94) |
|
| Financial
expenses as % of net sales |
|
8.00 |
8.37 |
|
| Other
charges as % of net sales |
|
0.18 |
0.14 |
|
|
|
|
| SHORT
TERM SOLVENCY |
|
|
|
| Working
capital ratio |
|
0.90:1 |
0.96:1 |
|
| Acid test ratio |
|
0.79:1 |
0.71:1 |
|
| Inventory
turnover / times |
|
21.55 |
7.64 |
|
|
|
|
| OVERALL
VALUATION AND ASSESSMENT |
|
|
|
| Return
on equity after tax |
|
(5.79) |
6.28 |
|
| Book
value per share |
|
24.49 |
26.60 |
|
| Long-term
debts to equity ratio |
|
0.47 |
0.54 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of MIRPURKHAS SUGAR MILLS LIMITED as
at September 30, |
|
| 2000
and the related profit and loss account 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
accounting standards and the |
|
| requirements
of the Companies Ordinance, 1984. Our responsibility is to express an opinion
on these state- |
|
| ments
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 management, as well as, evaluating
the overall presen- |
|
| tation
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: |
|
|
| 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 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 and Profit and Loss account together with the notes forming part
thereof, conform with |
|
| approved
accounting standards as applicable in Pakistan, except the deviation of IAS
as more fully |
|
| explained
in Note 2.3 (b) 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, its cash flows and changes in equity for the
year then ended; and |
|
|
| d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was deducted by |
|
| the
Company and deposited in the Central Zakat Fund established under section 7
of that Ordinance. |
|
|
|
HYDER BHIMJI & CO. |
|
| KARACHI:
February 26, 2001 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 2000 |
|
|
|
NOTE |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVES |
|
| Share capital : |
|
| Authorised |
|
3.1 |
150,000,000 |
150,000,000 |
|
|
|
========== |
========== |
|
| issued,
subscribed and paid-up |
|
3.2 |
63,888,000 |
63,888,000 |
|
|
|
|
| Reserves |
|
4 |
134,250,305 |
134,250,305 |
|
| Accumulated
(loss) |
|
(41,679,703) |
(28,142,662) |
|
|
----------- |
----------- |
|
|
92,570,602 |
106,107,643 |
|
|
156,458,602 |
169,995,643 |
|
| LIABILITIES
AGAINST ASSETS |
|
| SUBJECT
TO FINANCE LEASE |
|
5 |
74,225,673 |
92,462,301 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
6 |
88,212,723 |
77,165,187 |
|
|
|
| CURRENT
LIABILITIES |
|
|
| Current
portion of liabilities against |
|
| assets
subject to finance lease |
|
19,017,028 |
13,775,128 |
|
|
| Short-term
running finance |
|
| (utilized
under mark-up arrangements) |
|
7 |
127,412,211 |
124,285,000 |
|
|
|
|
| Creditors,
accrued and other |
|
|
|
| liabilities |
|
8 |
27,686,125 |
83,822,151 |
|
|
| Proposed
Dividend |
|
4,472,160 |
4,472,160 |
|
|
----------- |
----------- |
|
|
178,587,524 |
226,354,439 |
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
9 |
-- |
-- |
|
|
----------- |
----------- |
|
|
|
497,484,522 |
565,977,570 |
|
|
========== |
========== |
|
| FIXED
ASSETS |
|
| Operating
assets |
|
10 |
323,153,853 |
258,893,576 |
|
| Capital
work-in-progress |
|
11 |
-- |
72,351,624 |
|
|
----------- |
----------- |
|
|
323,153,853 |
331,245,200 |
|
| LONG
TERM INVESTMENTS |
|
12 |
13,615,100 |
13,617,875 |
|
| LONG
TERM LOANS AND ADVANCES |
|
13 |
670,056 |
742,368 |
|
| LONG-TERM
DEPOSITS |
|
14 |
15,814,304 |
15,634,804 |
|
| CURRENT
ASSETS |
|
|
|
|
| Stores
and spares |
|
15 |
54,867,235 |
50,727,303 |
|
| Stock-in-trade |
|
16 |
3,133,990 |
43,589,245 |
|
| Trade debts |
|
17 |
537,981 |
169,810 |
|
| Loans
and advances |
|
18 |
68,475,158 |
43,911,388 |
|
| Deposits,
prepayments and |
|
|
|
|
| other
receivables |
|
19 |
12,077,638 |
52,402,595 |
|
|
|
|
| Short-term
investment |
|
20 |
-- |
10,500,000 |
|
| Cash
& bank balances |
|
21 |
5,139,207 |
3,436,982 |
|
|
|
----------- |
----------- |
|
|
144,231,209 |
204,737,323 |
|
|
----------- |
----------- |
|
|
497,484,522 |
565,977,570 |
|
|
========== |
========== |
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
MAHMOOD FARUQUE |
|
MOHAMMED FARUQUE |
|
|
Chief Executive |
|
Chairman |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
NOTE |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| Sales |
|
22 |
558,054,575 |
593,524,304 |
|
| Cost
of goods sold |
|
23 |
503,552,446 |
564,333,183 |
|
|
|
----------- |
----------- |
|
| Gross profit |
|
|
54,502,129 |
29,191,121 |
|
|
|
|
|
| Administrative
expenses |
|
24 |
28,486,250 |
28,154,446 |
|
| Selling
and distribution expenses |
|
25 |
800,797 |
12,306,469 |
|
|
|
----------- |
----------- |
|
|
|
29,287,047 |
40,460,915 |
|
|
|
----------- |
----------- |
|
| Operating
profit / (loss) |
|
|
25,215,082 |
(11,269,794) |
|
| Other income |
|
26 |
28,285,376 |
66,914,139 |
|
|
----------- |
----------- |
|
|
53,500,458 |
55,644,345 |
|
| Financial
charges |
|
27 |
44,657,307 |
49,722,764 |
|
| Other charges |
|
28 |
1,030,635 |
877,067 |
|
|
|
----------- |
----------- |
|
|
|
45,687,942 |
50,599,831 |
|
|
|
----------- |
----------- |
|
| Net
profit before taxation |
|
|
7,812,516 |
5,044,514 |
|
| Provision
for taxation |
|
29 |
(16,877,397) |
5,634,993 |
|
|
----------- |
----------- |
|
| Net
(loss) / profit after taxation |
|
(9,064,881) |
10,679,507 |
|
| Accumulated
(loss) brought forward' |
|
(28,142,662) |
34,350,009) |
|
|
----------- |
----------- |
|
|
(37,207,543) |
23,670,502) |
|
|
|
|
| Appropriation: |
|
|
|
| Proposed
cash dividend @ 7% (1999: @ 7%) |
|
(4,472,160) |
(4,472,160) |
|
|
----------- |
----------- |
|
| Accumulated
(loss) carried forward |
|
(41,679,703) |
(28,142,662) |
|
|
========== |
========== |
|
| Earning
per share |
|
31 |
(1.42) |
1.67 |
|
|
| NOTE
- The annexed notes form an integral part of these accounts. |
|
|
|
MAHMOOD FARUQUE |
|
MOHAMMED FARUQUE |
|
|
Chief Executive |
|
Chairman |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
2000 |
1999 |
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| (Loss)
/ profit after taxation |
|
(9,064,881) |
10,679,507 |
|
| Adjustments · |
|
|
|
| Depreciation |
|
20,016,875 |
14,131,043 |
|
| Financial
charges |
|
44,657,307 |
49,722,764 |
|
| (Profit)
on sale of fixed assets |
|
(758,4171 |
(464,239) |
|
| Excise
duty refund |
|
-- |
(22,436,247) |
|
| Markup
on disputed excise duty |
|
-- |
(32,636,596) |
|
| Provision
for dimunition in value of investments |
|
2,775 |
488,125 |
|
| Fixed
assets written off |
|
-- |
845 |
|
| Provision
for taxation |
|
16,877,397 |
(5,634,993) |
|
|
----------- |
----------- |
|
|
80,795,937 |
3,170,702 |
|
|
----------- |
----------- |
|
| Operating
profit before changes |
|
71,731,056 |
13,850,209 |
|
|
| (Increase)/decrease
in current assets |
|
| Stores
and spares |
|
(4,139,932) |
(3,860,292) |
|
| Stock-in-trade |
|
40,455,255 |
60,381,456 |
|
| Trade debts |
|
(368,171) |
6,242,561 |
|
| Loans
and advances |
|
(14,373,185) |
(16,433,014) |
|
| Deposits,
prepayments and other receivables |
|
40,324,957 |
4,656,941 |
|
| Short
term investment |
|
10,500,000 |
-- |
|
|
----------- |
----------- |
|
|
72,398,924 |
50,987,652 |
|
|
----------- |
----------- |
|
|
144,129,980 |
64,837,861 |
|
| Increase/(decrease)
in current liabilities |
|
| Short-term
finance |
|
3,127,211 |
(100,095,436) |
|
| Creditors,
accrued and other liabilities |
|
(55,779,977) |
6,013,286 |
|
| Taxes paid |
|
(17,972,009) |
8,002,013 |
|
| Financial
charges paid |
|
(42,066,792) |
(46,178,633) |
|
|
----------- |
----------- |
|
|
(112,691,567) |
(132,258,770) |
|
|
----------- |
----------- |
|
| Net
cash from operating activities |
|
31,438,413 |
(67,420,909) |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Capital
expenditure |
|
(12,131,912) |
(20,642,859) |
|
| Sale
proceeds of fixed assets |
|
964,800 |
580,368 |
|
| Payment
of long term loan and advances |
|
72,312 |
(7,454) |
|
| Payment
of long term deposits |
|
(179,500) |
(11,671,990) |
|
|
----------- |
----------- |
|
| Net
cash utilized towards investing activities |
|
(11,274,300) |
(31,741,935) |
|
