| Baba Farid Sugar Mills Limited |
|
|
|
|
|
|
|
|
|
| Annual Report 2001 |
|
|
|
| Contents |
|
|
| COMPANY'S
INFORMATION |
|
| NOTICE
OF THE MEETING |
|
| DIRECTORS'
REPORT |
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
& LOSS ACCOUNT |
|
| STATEMENT
OF CHANGES IN |
|
| FINANCIAL
POSITION (CASH FLOW STATEMENT) |
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| NOTES
TO THE ACCOUNTS |
|
| SCHEDULE
OF FIXED ASSETS |
|
| PATTERN
OF SHAREHOLDING |
|
|
|
| COMPANY'S
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
CHIEF EXECUTIVE |
|
|
MR. GHULAM MOHAMMED A.
FECTO |
|
|
|
DIRECTORS |
|
|
MR. MUNAWAR ALI FECTO |
|
|
MR. KAISER MAHMOOD FECTO |
|
|
MR. YAHYA AHMED BAWANY |
|
|
MR. MOIN A. HAROON |
|
|
MR. JAMES R. RICHARDS |
|
|
MR. FAZLUR REHMAN |
|
|
| AUDITORS |
|
M/S. HYDER BHIMJI &
CO |
|
|
(Chartered Accountants) |
|
|
|
M/S. A. R. DIWAN &
CO. |
|
|
(Chartered Accountants) |
|
|
| BANKERS |
|
MUSLIM COMMERCIAL BANK
LTD. |
|
|
HABIB BANK LTD. |
|
|
| REGISTERED
OFFICE |
1ST FLOOR, PANORAMA
CENTRE, |
|
|
RAJA GHAZANFAR ALI KHAN
ROAD, |
|
|
KARACHI-75530 |
|
|
| ZONAL OFFICE |
|
1ST FLOOR, NAWA-E-WAQT
HOUSE, |
|
|
4-SHAHRAH-E-FATIMA JINNAH |
|
|
LAHORE. |
|
|
| MILLS |
|
OKARA (Distt. OKARA) |
|
|
|
| NOTICE
OF THE MEETING |
|
|
| NOTICE
IS HEREBY GIVEN that the Twenty Third Annual General Meeting of the members
of |
|
| the
Company will be held on Wednesday the March 27, 2002 at 10:00 a.m. at Dr.
Abdul |
|
| Qadeer
Khan Auditorium, Haji Abdullah Haroon Muslim Gymkhana, Gate # 1, Aiwan-e- |
|
| Saddar
Road, Karachi to transact the following business. |
|
|
| ORDINARY
BUSINESS |
|
| (1)
To receive and adopt the Report of the Directors and the Audited Accounts of
the Company |
|
| together
with the Auditors' Report for the Financial Year ended September 30, 2001. |
|
|
| (2)
To appoint Auditors for the year 2001-2002 and fix their remuneration. |
|
|
|
By order of the Board |
|
|
(GHULAM MOHAMMED A FECTO) |
|
| Karachi
the 16th February, 2002. |
|
Chief Executive |
|
|
|
| NOTES: |
|
| (1)
The Share Transfer Books of the Company will remain closed from March 20,
2002 to March 27, 2002 |
|
| (both
days inclusive). |
|
|
| (2)
All the members should bring their original National Identity Cards at the
time of the meeting. |
|
|
| (3)
A member entitled to attend and vote at this Meeting, may appoint another
member as his/her Proxy |
|
| to
attend, speak and vote on his/her behalf. The instrument appointing a proxy
and the power of |
|
| attorney
or other authority under which it is signed or a notarially attested copy of
the power of attorney |
|
| must
be deposited at the registered office of the Company at least 48 hours before
the time of the |
|
| meeting. |
|
|
| (4)
Shareholders are requested to notify any change in their address immediately. |
|
|
| CDS
Account Holder: |
|
| A.
For Attending the Meeting: |
|
| i)
In case of individuals, the account holder or sub-account holder and/or the
person whose securities |
|
| are
in group account and their registration details are uploaded as per the
Regulations, shall authen- |
|
| ticate
his/her identity by showing his/her original National identity Card (NIC) or
original passport at |
|
| the
time of attending the meeting. |
|
|
| ii)
In case of corporate entity, the Board of Directors resolution/power of
attorney with specimen |
|
| signature
of the nominee shall be produced (unless it has been provided earlier) at the
time of the |
|
| meeting. |
|
|
| B.
For Appointing Proxies |
|
| i)
In case of individuals, the account holder or sub-account holder and/or the
person whose securities |
|
| are
in group account and their registration details are uploaded as per the
Regulations, shall sub- |
|
| mit
the proxy form as per the above requirements. |
|
|
| ii)
The proxy form shall be witnessed by two persons whose names, addresses and
NIC numbers shall |
|
| be
mentioned on the form. |
|
|
| iii)
Attested copies of NIC or the passport of the beneficial owners and the proxy
shall be furnished with |
|
| the proxy form. |
|
|
| iv)
The proxy shall produce his/her original NIC or original passport at the time
of the meeting. |
|
|
| v)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen signature |
|
| shall
be submitted (*unless it has been provided earlier) alongwith proxy form to
the Company. |
|
|
|
| DIRECTORS'
REPORT |
|
|
|
| The Members, |
|
| BABA
FARID SUGAR MILLS LIMITED |
|
| KARACHI. |
|
|
| Gentlemen, |
|
| Your
Directors present the Twenty Third Annual Report and Audited Accounts for the
year |
|
| ended
September 30, 2001. The operational performance for the year under review is
as |
|
| under |
|
|
|
2001 |
|
2000 |
|
| Date of |
|
| Commencement
of Season |
|
November 20, 2000 |
November 15, 1'999 |
|
| Date
of Cessation |
|
| (Concluding
of Season) |
|
April 06, 2001 |
March 22, 2000 |
|
| Crushing
Duration |
|
Days |
138 |
|
128 |
|
| Cane Crushed |
|
M.Tons |
318,081 |
|
335,992 |
|
| Sugar
Production |
|
M.Tons |
29,750 |
|
24,100 |
|
| Sucrose
recovery |
|
% |
7.00 |
|
7.17 |
|
|
| The
total sugarcane crop, in the Province of Punjab, was substantially less due
to decrease in |
|
| the
area under cultivation and natural factors. The shortage of cane resulted in
substantial |
|
| pilferage
from our natural zone and payment to grower prices higher than the support
prices |
|
| fixed
by the government. Frequent price raises by growers made the supplies of cane
to mills |
|
| intermittent
with forced stoppage of crushing. We, therefore, operated below our capacity. |
|
|
| Moreover,
the crop was badly affected by attack of borer which in turn affected the
sucrose con- |
|
| tent
of cane resulting in drop of recovery percentage. Under capacity operations
and drop in |
|
| recovery
resulted in decrease in production of refined sugar during the year. |
|
|
| The
Government was deeply concerned with the situation of production of refined
sugar from |
|
| sugar
cane in the country and therefore to bridge the gap between consumption and
production |
|
| of
refined sugar allowed initially an import of 0.5 million tons of raw sugar
which was later on |
|
| increased
to 0.6 million tons to meet the demand of the country. We re-melted 8196
metric tons |
|
| of
Raw Sugar and produced 7518 metric tons of refined sugar but as the prices of
raw sugar in |
|
| International
markets had also risen, the cost of production thereof was more than selling
prices |
|
| prevailing
in the local market. |
|
|
| At
the start of the season the prices of sugar in local market had shown rising
trend but the |
|
| decision
of the Government to import refined sugar which was unnecessary, pushed the
sugar |
|
| prices
downward adding to the woes of Sugar industry, wastage of hard earned foreign |
|
| exchange,
and benefited only a few traders at the cost of the Industry. According to
press report |
|
| published
in DAWN on February 14, 2002, the Federal Bureau of Statistics showed that
83,434 |
|
| tons
of sugar worth $22.68 million were imported during the period July
2001-January 2002. |
|
|
| Your
Board regretfully recommends that the Dividend for the year under review be
passed over. |
|
| The
Earnings/(loss) per share has increased to Rs. (3.54) from Rs. (0.60) |
|
|
| CURRENT
YEAR- PROSPECTS |
|
| As
anticipated in last year's report, the current sugarcane crop in the province
is good to give |
|
| mills
an optimum level of crushing. The recovery to-date is encouraging and
hopefully the |
|
| province
will produce a substantial quantity of refined sugar. |
|
|
| We
commenced current crushing season on 30th November, 2001 and are encouraged
with the |
|
| results
achieved so far, in as much as, on February 15, 2002, we crushed 245,686
metric tones |
|
| of
sugarcane producing 19,228 metric tones of refined sugar @ 7.84% recovery.
God willing, we |
|
| will
be able to crush approximately 450,000 metric tons during the current season
and also hope |
|
| to
achieve the targeted production. |
|
|
| We
have managed to line up adequate finances for smooth operation of the current
season. |
|
|
| During
the year under review, your Directors, Mr. Said Ahmed and Dr. Abdul Wahid
Mohammad |
|
| expired.
The Board wishes to place on record its profound sorrow and its appreciation
of their |
|
| valuable
services and guidance for the benefit of the Company. May Allah rest their
souls in |
|
| peace
and give forbearance to the bereaved families to bear the loss. |
|
|
| 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 during the
year under |
|
| review,
the Management Employees relations continued to remain quite cordial. |
|
|
| Your
Directors express their thanks to the officials of the Ministry of Food and
Agriculture, other |
|
| Government
Agencies and Pakistan Sugar Mills Association for the support and
encouragement |
|
| they
have extended to your Company and which we hope will continue in future too.
We would |
|
| also
like to express our sincere thanks to all the financial institutions for
their continued support |
|
| and
co-operation. |
|
|
| Messrs.
Hyder Bhimji & Co. and Messrs. A.R. Diwan & Co. the Auditors of the
Company retire |
|
| and
offer themselves for reappointment. |
|
|
| Statement
showing the pattern of holding of the shares held by the members of Baba
Farid |
|
| Sugar
Mills Limited as on 30.9.2001 is annexed. |
|
|
| By
Order of the Board |
|
| (GHULAM
MOHAMMED A. FECTO) |
|
| Chief Executive |
|
|
| KARACHI:
the 16th February, 2002 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of M/S BABA FARID SUGAR MILLS LIMITED |
|
| as
at September 30, 2001 and related Profit and loss account, Cash Flow
statement and state- |
|
| ment
of changes in equity, together with the notes forming part thereof, for the
year 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 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 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, 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)
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 accounts 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 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, Cash Flow statement and
statement |
|
| of
changes in equity together with the notes forming part thereof conform with
approved |
|
| accounting
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, 2001 and of
the loss in |
|
| Cash
Flow and changes in equity for the year ended; and |
|
|
| d)
in our opinion, no Zakat was deductible at source, under the Zakat and Ushr
Ordinance, 1980. |
|
|
| Without
qualifying our opinion, we draw your attention to the note No. 2.1 of the
financial state- |
|
| ment
in respect of appropriateness of going concern basis, however the financial
statements |
|
| have
been prepared on the basis in view of matters stated in that note. |
|
|
|
A. R. DIWAN & CO. |
|
HYDER BHIMJI & CO. |
|
| Karachi:
the 16th February, 2002 |
|
Chartered Accountants |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
NOTE |
RUPEES |
RUPEES |
|
| SHARE
CAPITAL AND RESERVES |
|
| SHARE
CAPITAL |
|
| Authorized |
|
| 10,000,000
Ordinary Shares of |
|
| Rs. 10/= each |
|
100,000,000 |
100,000,000 |
|
|
========== |
========== |
|
| Issued
Subscribed & Paid up |
|
3 |
94,500,000 |
94,500,000 |
|
| Accumulated
(loss) |
|
|
(110,039,328) |
(76,579,980) |
|
|
|
---------- |
---------- |
|
|
|
(15,539,328) |
17,920,020 |
|
|
|
|
|
| SUB-ORDINATED
LOANS |
|
4 |
60,000,000 |
60,000,000 |
|
| REDEEMABLE
CAPITAL |
|
5 |
106,972,500 |
51,080,000 |
|
| DEFERRED
LIABILITIES |
|
6 |
28,700,000 |
29,700,000 |
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
|
| SUBJECT
TO FINANCE LEASE |
|
7 |
66,378,652 |
40,977,963 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
Portion of Long Term Liabilities |
|
8 |
74,583,299 |
99,161,993 |
|
| Short
Term Running Finance |
|
|
|
|
| (Utilized
under Mark-up Arrangements) |
|
9 |
50,946,801 |
35,295,079 |
|
|
|
|
|
| Creditors,
accrued and other liabilities |
|
10 |
66,586,654 |
60,353,089 |
|
|
|
|
| Provision
For Taxation |
|
5,342,640 |
4,987,133 |
|
|
197,459,394 |
199,797,294 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
11 |
-- |
-- |
|
|
---------- |
---------- |
|
| TOTAL |
|
443,971,218 |
399,475,277 |
|
|
========== |
========== |
|
| FIXED ASSETS |
|
| Operating
Assets |
|
12 |
234,342,728 |
250,788,595 |
|
| Capital
Work-in-Progress |
|
|
383,437 |
383,437 |
|
|
|
234,726,165 |
251,172,032 |
|
| LONG
TERM DEPOSITS |
|
13 |
12,326,967 |
13,865,867 |
|
| CURRENT
ASSETS |
|
|
|
|
| Stores,
Spares and Loose Tools |
|
14 |
28,285,063 |
33,702,275 |
|
| Stock-in-Trade |
|
15 |
59,392,390 |
14,828,243 |
|
| Trade Debts |
|
16 |
49,590 |
57,162 |
|
| Short
term investment |
|
17 |
61,500,000 |
-- |
|
| Loans
and Advances |
|
18 |
8,960,536 |
14,416,417 |
|
| Deposits,
Prepayments and |
|
|
|
|
| Other
Receivables |
|
19 |
1,085,064 |
1,948,592 |
|
|
|
|
|
| Cash
and Banks Balances |
|
20 |
37,645,443 |
69,484,689 |
|
|
|
---------- |
---------- |
|
|
196,918,086 |
134,437,378 |
|
|
---------- |
---------- |
|
| TOTAL |
|
443,971,218 |
399,475,277 |
|
|
========== |
========== |
|
| Note:
The annexed notes form an integral part of these accounts |
|
|
|
(GHULAM MOHAMMED A. FECTO) |
|
(MOIN A. HAROON) |
|
| Karachi:
the February 16, 2002 |
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
NOTE |
RUPEES |
RUPEES |
|
| Sales |
|
21 |
571,712,788 |
466,574,137 |
|
| Cost of Sales |
|
22 |
527,460,381 |
411,156,048 |
|
|
|
---------- |
---------- |
|
| Gross Profit |
|
|
44,252,407 |
55,418,089 |
|
| Administrative
Expenses |
|
23 |
26,848,718 |
28,726,226 |
|
| Selling
& Distribution Expenses |
|
24 |
1,418,107 |
1,582,759 |
|
|
|
---------- |
---------- |
|
|
|
28,266,825 |
30,308,985 |
|
|
|
---------- |
---------- |
|
| Operating
Profit / (Loss) |
|
|
15,985,582 |
25,109,104 |
|
| Other Income |
|
26 |
7,399,744 |
3,100,664 |
|
|
|
---------- |
---------- |
|
|
23,385,326 |
28,209,768 |
|
|
| Financial
Expenses |
|
27 |
55,271,947 |
30,819,509 |
|
| Other Charges |
|
28 |
93,540 |
96,240 |
|
|
|
---------- |
---------- |
|
|
|
55,365,487 |
30,915,749 |
|
|
|
---------- |
---------- |
|
|
|
(31,980,161) |
(2,705,981) |
|
| Prior
Year Adjustment |
|
29 |
(920,650) |
-- |
|
| Net
Loss Before Taxation |
|
|
(32,900,811)1 |
(2,705,981) |
|
| Taxation |
|
30 |
(558,537) |
(2,991,777) |
|
|
|
---------- |
---------- |
|
| Net
Loss After Taxation |
|
|
(33,459,348) |
(5,697,758) |
|
| Accumulated
Loss Brought Forward |
|
|
(76,579,980) |
(70,882,222) |
|
|
|
---------- |
---------- |
|
| Accumulated
loss carried forward |
|
|
(110,039,328) |
(76,579,980) |
|
|
|
========== |
========== |
|
| Earning
per Share |
|
31 |
(3.54) |
(0.60) |
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
(GHULAM MOHAMMED A. FECTO) |
|
(MOIN A. HAROON) |
|
| Karachi:
the February 16, 2002 |
|
Chief Executive |
|
Director |
|
|
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED 30TH SEPTEMBER, 2001 |
|
|
|
|
2001 |
2000 |
|
|
NOTE |
RUPEES |
RUPEES |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Cash generated from operations |
A |
|
A |
(51,722,932) |
69,527,539 |
|
| Financial
charges paid |
|
(52,325,200) |
(35,864,965) |
|
| Taxes paid |
|
(1,203,029) |
(3,596,102) |
|
| Dividend paid |
|
-- |
(350) |
|
|
---------- |
---------- |
|
| Net
cash inflow from operating activities |
|
(105,251,161) |
30,066,122 |
|
|
---------- |
---------- |
|
| CASH
FROM INVESTING ACTIVITIES |
|
| Fixed
capital expenditure |
|
(493,199) |
(16,183,118) |
|
| Sale
proceeds of fixed assets |
|
-- |
150,000 |
|
| Decrease
in long term deposits |
|
1,538,900 |
(3,999,950) |
|
| Decrease
in long term investment |
|
-- |
3,000,000 |
|
|
---------- |
---------- |
|
|
1,045,701 |
(17,033,068) |
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Increase
in short term finance |
|
15,651,722 |
(67,485,860) |
|
| Proceeds
of liabilities against |
|
|
|
| assets
subject to finance lease |
|
151,250,000 |
40,000,000 |
|
| Repayment
of liabilities against |
|
|
|
| assets
subject to finance lease |
|
(115,989,940) |
(22,745,272) |
|
| Proceeds
of redeemable capital |
|
92,500,000 |
110,425,269 |
|
| Decrease/increase
in Deferred Liability |
|
(3,206,291) |
(5,038,457) |
|
| Repayment
of redeemable capital |
|
(67,839,275) |
-- |
|
|
---------- |
---------- |
|
|
72,366,216 |
55,155,680 |
|
|
---------- |
---------- |
|
| Net
increase/(decrease) in cash and |
|
| Cash
equivalents |
|
(31,839,246) |
68,188~734 |
|
| Cash
and Cash Equivalent in the beginning of |
|
| the year |
|
69,484,689 |
1,295,955 |
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at the end of year |
|
37,645,443 |
69,484,689 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
(GHULAM MOHAMMED A. FECTO) |
|
(MOIN A. HAROON) |
|
| Karachi:
the February 16, 2002 |
|
Chief Executive |
|
Director |
|
|
| A.
CASH FLOW FROM OPERATING ACTIVITIES |
|
| (Loss)
before taxation |
|
(32,900,811) |
(2,705,981) |
|
| Add/(less)
adjustment for non cash |
|
| charges
and other items |
|
|
| Depreciation |
|
16,939,067 |
18,253,715 |
|
| (Profit)
on disposal of fixed assets |
|
-- |
(126,000) |
|
| Financial
charges |
|
55,271,947 |
30,819,509 |
|
| Provision
for obsolete stores items |
|
-- |
1,001,250 |
|
|
---------- |
---------- |
|
|
72,211,014 |
49,948,474 |
|
|
---------- |
---------- |
|
| Profit
before working capital changes |
|
39,310,203 |
47,242,493 |
|
|
========== |
========== |
|
| EFFECT
ON CASH FLOW DUE TO WORKING |
|
| CAPITAL
CHANGES |
|
| (Increase)/decrease
in current assets |
|
| Stores
and spares |
|
5,417,212 |
1,565,256 |
|
| Stock-in-trade |
|
(44,564,147) |
13,573,782 |
|
| Short
term investment |
|
(61,500,000) |
-- |
|
| Trade debts |
|
7,572 |
(23,042) |
|
| Loans
and advances |
|
5,455,882 |
(6,687,293) |
|
| Deposits,
prepayments & Receivables |
|
863,528 |
2,903,968 |
|
|
---------- |
---------- |
|
|
(94,319,953) |
11,332,671 |
|
|
|
|
| Increase/(decrease)
in current liabilities: |
|
|
|
| Creditors
and accrued liabilities |
|
3,286,818 |
10,952,375 |
|
|
---------- |
---------- |
|
|
(91,033,135) |
22,285,046 |
|
|
---------- |
---------- |
|
| Cash
generated from operations |
|
(51,722,932) |
69,527,539 |
|
|
========== |
========== |
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2001 |
|
|
|
Share Capital |
Unappropriated |
Total |
|
|
|
Profit / (Loss) |
|
|
| Balance
as on Sept. 30 1999 |
|
94,500,000 |
(70,882,222) |
23,617,778 |
