| Pangrio Sugar Mills Limited |
|
|
|
|
|
|
|
| Annual
Report 2001 |
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| CONTENTS |
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| Company
Information |
|
| Notice
of Annual General Meeting |
|
| Directors' Report |
|
| Auditors' Report |
|
|
| Pattern
of Share Holding |
|
| Balance Sheet |
|
| Profit
and Loss Account |
|
| Statement
of Changes in Equity |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS: |
|
MR. SAJID HUSSAIN NAQVI |
Chairman & Chief
Executive |
|
|
BEGUM AKHTAR ABID |
|
|
MS. NAHEED ZAFFAR MIRZA |
|
|
MRS. YASMEEN BAIG |
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|
MR. HIMMADULLAH BEG |
|
|
MR. ABBAS ALLY AGHA |
|
|
MR. AFTAB AHMAD (NDFC
Nominee) |
|
|
MR. MUMTAZ ALI MEMON
(ICP) |
|
|
MR. KEMAL SHOAIB (NIT) |
|
|
MR. HAMMAD MEHMOOD (NIT) |
|
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| SECRETARY: |
|
MR. TAHIR MAHMOOD |
|
|
| AUDITORS: |
|
M. YOUSUF ADIL SALEEM
& CO. |
|
|
Chartered Accountants |
|
|
| BANKERS
TO THE COMPANY: |
|
ALLIED BANK OF PAKISTAN
LIMITED |
|
|
UNITED BANK LIMITED |
|
|
DOHA BANK LIMITED |
|
|
HABIB BANK LIMITED |
|
|
NATIONAL BANK OF PAKISTAN
LIMITED |
|
|
BANKERS EQUITY LIMITED |
|
|
MUSLIM COMMERCIAL BANK
LTD. |
|
|
| LEGAL
ADVISOR: |
|
MR. GHULAM QADIR ZARGAR |
|
|
| REGISTERED
OFFICE: |
|
10TH FLOOR, BUILDING NO.
1, |
|
|
LAKSON SQUARE, |
|
|
SARWAR SHAHEED ROAD, |
|
|
KARACHI. |
|
|
| MILLS: |
|
DEH RAJAURI II, |
|
|
TALUKA TANDO BAGO, |
|
|
DISTRICT BADIN, |
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|
SINDH. |
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|
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| NOTICE
OF ANNUAL GENERAL MEETING |
|
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| Notice
is hereby given that the 17th Annual General Meeting of the Company will be
held on Thursday, |
|
| March
28, 2002 at 2:30 p.m. at the Raffia Choudri Memorial Centre, Ground Floor,
Sidco Avenue Centre, |
|
| 264
R.A. Lines, Karachi to transact the following business: |
|
|
| 1.
To confirm the Minutes of the 16th Annual General Meeting of the Company held
on March 28, |
|
| 2001. |
|
|
| 2.
To receive, consider and adopt the Annual Audited Accounts alongwith the
Directors' and |
|
| Auditors'
Reports of the Company for the year ended September 30, 2001. |
|
|
| 3.
To appoint Auditors of the Company for the year ending September 30, 2002 and
fix their remu- |
|
| neration.
The retiring Auditors, M/s. M. Yousuf Adil Saleem & Co., Chartered
Accountants, being |
|
| eligible,
have offered themselves for re-appointment. |
|
|
| 4.
To transact any other ordinary business with the permission of the Chair. |
|
|
|
By Order of the Board, |
|
|
|
(TAHIR MAHMOOD) |
|
| Karachi,
March 05, 2002 |
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The Share Transfer Books of the Company will remain closed and no transfer of
shares will be |
|
| accepted
for registration from March 19, 2002 to March 28, 2002 (both days inclusive). |
|
|
| 2.
A member entitled to attend and vote at the Annual General Meeting is
entitled to appoint a |
|
| proxy
to attend and vote on his / her behalf. |
|
|
| Form
of Proxies in order to be valid, must be received at the Registered office of
the Company 48 |
|
| hours
before the Scheduled time of Meeting. A proxy must be a member of the
Company. |
|
|
| 3.
Shareholders are requested to notify any change in address immediately. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| Dear
Shareholders: |
|
|
| GENERAL |
|
|
| It
gives us great pleasure in presenting the Annual Accounts of the Company for
the year ended September 30, 2001 |
|
| together
with Auditors' Report thereon. |
|
|
| The
period under review was a catalyst year. Sugar rates touched its peak. Never
in the sugar industry history did sugar |
|
| rates
went this high. Industry could not benefit from this boom, due to government
intervention in shape of allowing |
|
| liberal
imports of sugar. A major point however has been registered that consumer in
general is not bothered about the |
|
| price
of sugar, the willingness to pay the prevailing price was evident, no body or
organization has any adverse remarks |
|
| about
the price flare-up. There is now a general perception that while rates of
almost all the daily kitchen items have |
|
| increased,
the sugar rates are still at lower side. We also feel that unless sugar rates
are around Rs. 25/- per kg. and |
|
| keeps
pace with the increase in yearly government enhancement of sugarcane price we
will not be able to survive and the |
|
| industry
will have to start shutting its units one by one, which will ultimately
result in our becoming an importer country |
|
| of
sugar and unemployment in the rural areas will further rise. |
|
|
| PERFORMANCE
REVIEW |
|
|
| We
have elaborated the crop situation in our mid-term report of March 31, 2001.
Some of the contents are reiterated for |
|
| emphasis sake :- |
|
|
| 1.
Crop size was lower |
|
| 2.
Competition for sugarcane procurement amongst the mills was severe. |
|
| 3.
Water shortage in Badin has taken its toll. |
|
| 4.
Some of the standing crop dried due to water shortage. |
|
| 5.
Yield per acre is gradually declining. |
|
| 6.
Rate of sugarcane are almost equalizing the Cost of Sales. |
|
|
| Despite
the odds mentioned above, we were able to perform better. |
|
|
| The
operating results of the company are as follows :- |
|
|
| Particulars |
|
2000-2001 |
1999-2000 |
|
| Season starterd |
|
03-11-2000 |
30-10-1999 |
|
| season closed |
|
19-03-2001 |
26-02-2000 |
|
| Days worked |
|
136 |
120 |
|
| Sugarcane
crushing (tons) |
|
277,269 |
222,676 |
|
| (Mds) |
|
7,428,646 |
5,965,991 |
|
| Sugar
recovery (%) |
|
9.90 |
9.35 |
|
| Sugar
production (Tons) |
|
27,490 |
20,890 |
|
| Molasses
recovery (%) |
|
5.29 |
5.12 |
|
| Molasses
production (Tons) |
|
14,662 |
11,440 |
|
|
| Sugar
industry as a whole is in a dire state. Sugar mills capacities have gone
about double than the available sugarcane |
|
| crop.
Research on sugarcane crop and a concerted effort to achieve a national
objective of making the industry viable, at |
|
| government
level, is the need of this crucial phase in the sugar industry history.
Billions of Rupee worth of capital will |
|
| go
waste if utilization of idle capacity is not thought out. |
|
|
| FINANCIAL
RESULTS |
|
2000-2001 |
1999-2000 |
|
|
|
|
| Profit/(Loss)
for the year |
|
1,020,354 |
(109,519,811) |
|
| Taxation
written back/(Provision) |
|
(3 789,918) |
616,128 |
|
|
---------- |
---------- |
|
|
(2,769,564) |
(108,903,683) |
|
| Accumulated
loss brought forward |
|
(804,208,079) |
(695,304,396) |
|
|
---------- |
---------- |
|
| Accumulated
loss carried forward |
|
(806,977,643) |
(804,208,079) |
|
|
========== |
========== |
|
|
|
|
| The
results are encouraging, however, losses due to imbalance in sugarcane rates
need to be addressed. Sugarcane cost |
|
| is
eating up the expected generation. We have elaborated that sugar prices
should also be allowed to be floated higher. |
|
|
| so
that industry is saved from a total collapse. |
|
|
| Your
mill is also constrained because of financial problems., Since the take-over
of your mill by the present management |
|
| during
1995-96, we have paid more than Rs. 100 million to Banks/DFIs, yet it is a
matter of record, that we have not yet |
|
| been
provided any financial assistance by any lenders, nor we are still treated as
a regular borrower. |
|
|
| However,
efforts are underway to have the company loans rescheduled under the aegis of
the Committee for Revival of |
|
| Sock
Units, we are hopeful of a favourable outcome. |
|
|
| SEASON
2001-2002 |
|
| There
was heavy carry over stock of previous season, as such though the mills
started crushing during mid November, |
|
| 2001,
the harvesting of sugarcane could not pick up as the sugar rates were very
low, compelling the mills to stick to the |
|
| government
rates of sugarcane. There was strong efforts from the millers for obtaining
sugarcane at the announced |
|
| rates,
however, growers agitated and stopped harvesting, resulting in the mills to
be almost standstill for most of the |
|
| times. |
|
|
| We
may state here that we will not be able to achieve the performance of Season
2000-2001. Financially also the season |
|
| would
prove to be difficult. |
|
|
| AUDIT REPORT |
|
| The
Audit Report for the period under review contains certain qualifications,
which are being addressed as follows: |
|
|
| a)
Company case for a favourable restructuring is being taken by National Bank
of Pakistan (NBP) formerly National |
|
| Development
Finance corporation (NDFC) to the Committee for Revival of Sick Units
(CORSU), management feels |
|
| that
CORSU will give a long-term breathing period to the company. |
|
|
| b)
Long-term loans have been arranged by the Directors from their friends and
associates. |
|
|
| c)
The Institute of Chartered Accountants of Pakistan, Banks and DFIs have an
understanding in the matter of direct |
|
| confirmation
by Banks and DFIs, we cannot influence Banks and DFIs in this matter. |
|
|
| d)
The liability is of growers who do not understand confirmation, these are in
the nature of current account as |
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| sugarcane
is received and amount paid on seasonal basis, on the receipt of sugarcane. |
|
|
| AUDITORS |
|
| M/s.
M. Yousuf Adil Saleem & Co., Auditors of the Company retire and offer
their services for the ensuing year. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| The
pattern of shareholding as on September 30, 2001 is annexed. |
|
|
| EMPLOYEES,
SHAREHOLDERS, BANKERS & DFIs |
|
| We
would like to take this opportunity to convery our deep appreciation to the
shareholders, the workers, staff and |
|
| officers
of the Company for their patience, tolerance and forbearances, as well as the
assistance and cooperation to the |
|
| management
during these hard days. |
|
|
| In
the end, let us pray to Almighty Allah to guide us in all our pursuits of
national development and for the betterment |
|
| of
your organization, Ameen. |
|
|
| Karachi: |
|
SAJID H. NAQVI |
|
| Date:
February 26, 2002 |
|
Chartered Accountants |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of PANGRIO SUGAR MILLS LIMITED as at
September 30, 2001 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 explana- |
|
| tions
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, |
|
| 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 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 state- |
|
| ments
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.
The company has incurred a net loss of Rs. 2.7 million during the year. The
next capital deficiency has increased |
|
| to
Rs. 698.477 million and current liabilities exceed current assets by Rs.
445.531 million. The eventual outcome |
|
| of
the proposed restructuring and rescheduling (refer Note No. 1.2) cannot be
presently determined. These |
|
| factors
create doubt that the Company will be able to continue as a going concern. No
adjustments, if any, have |
|
| been
made in the accounts that may be determined to be necessary should the
Company be unable to continue |
|
| as
a going concern. |
|
|
| b.
Confirmation of balance and statement of account in respect of redeemable
capital and accrued markup |
|
| thereon
of Rs. 243.1 million from NDFC (now merged with National Bank of Pakistan)
has not been received |
|
| therefore,
these remain unconfirmed. |
|
|
| c.
Confirmation of balance in respect of long term loans - other Rs. 27.7
million has not been received therefore, |
|
| the
balance remain unconfirmed. |
|
|
| d.
Confirmation of balances of growers liabilities for Rs. 56.1 million (Refer
Note No. 10) has not been received |
|
| therefore,
these balances remained unconfirmed. |
|
|
| e.
In our opinion, proper books of account have been kept by the Company as
required by the Companies |
|
| Ordinance, 1984; |
|
|
| f. 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 accor- |
|
| dance
with the objects of the company; |
|
|
| g.
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 approved accounting standards as applicable in
Pakistan, and, give the |
|
| information
required by the Companies Ordinance, 1984 in the manner so required and,
except for the |
|
| financial
effect and adjustments, if any, of the matters referred to in para (a) to (d)
above and Note No. 11, these |
|
| respectively
give a true and fair view of the state of the company's affairs as at
September 30, 2001 and of the |
|
| profit,
changes in equity and its cash flows for the year then ended; and |
|
|
| h.
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
| Karachi: |
|
M. YOUSUF ADIL SALEEM & CO. |
|
| Date:
February 26, 2002 |
|
Chartered Accountants |
|
|
|
| PATTERN
OF SHAREHOLDINGS |
|
| AS
AT 30TH SEPTEMBER, 2001 |
|
|
| Number of |
Shareholding |
Total Shares |
|
|
| Share Holders |
From |
To |
Held |
Percentage |
|
| 1850 |
1 |
100 |
185,000 |
1.71 |
|
| 396 |
101 |
500 |
142,800 |
1.32 |
|
| 327 |
501 |
1000 |
310,000 |
2.86 |
|
| 377 |
1001 |
5000 |
887,150 |
8.18 |
|
| 99 |
5001 |
10000 |
671,500 |
6.19 |
|
| 4 |
10001 |
15000 |
57,700 |
0.53 |
|
| 2 |
15001 |
20000 |
31,200 |
0.29 |
|
| 1 |
20001 |
25000 |
22,600 |
0.21 |
|
| 1 |
25001 |
30000 |
30,000 |
0.28 |
|
| 25 |
45001 |
50000 |
1,247,100 |
11.49 |
|
| 8 |
95001 |
100000 |
800,000 |
7.37 |
|
| 3 |
100001 |
145000 |
345,600 |
3.19 |
|
| 2 |
160001 |
175000 |
336,700 |
3.10 |
|
| 4 |
500001 |
1000000 |
2,373,850 |
21.88 |
|
| 2 |
1000001 |
1810000 |
3,408,800 |
31.42 |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
|
| 3101 |
|
10,850,000 |
100.00 |
|
| ========== |
========== |
========== |
========== |
========== |
|
|
|
| Categories of |
|
Numbers of |
Total |
Percentage |
|
| Shareholders |
|
Shareholders |
Share Held |
|
|
| Individual |
|
3,089 |
6,605,350 |
60.88 |
|
| Investment
Companies |
5 |
2,989,900 |
27.56 |
|
| Insurance
Companies |
5 |
293,500 |
2.71 |
|
| Joint
Stock Companies |
1 |
100 |
0.00 |
|
| Financial
Institutions |
1 |
961,150 |
8.86 |
|
|
---------- |
---------- |
---------- |
|
|
3,101 |
10,850,000 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL |
|
| Authorised |
|
| 12,000,000
ordinary shares of Rs. 10/= each |
|
120,000,000 |
120,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid up |
|
3 |
108,500,000 |
108,500,000 |
|
| Accumulated
Loss |
|
(806,977,643) |
(804,208,079) |
|
|
---------- |
---------- |
|
|
(698,477,643) |
(695,708,079) |
|
|
| PARTICIPATION
RESERVE FOR |
|
| ISSUE
OF CONVERTIBLE SHARES |
|
4 |
73,328,776 |
73,328,776 |
|
|
| SURPLUS
ON REVALUATION |
|
| OF
FIXED ASSETS |
|
5 |
281,803,020 |
281,803,020 |
|
|
|
|
|
| REDEEMABLE
CAPITAL |
|
6 |
119,350,879 |
155,629,878 |
|
|
|
|
| LONG
TERM LOANS - OTHER |
|
|
|
| Unsecured
- interest free |
|
27,672,603 |
27,672,603 |
|
|
| DEFERRED
LIABILITIES |
|
| Staff gratuity |
|
4,069,046 |
4,109,880 |
|
| Banking
Companies |
|
7 |
27,526,667 |
38,148,149 |
|
|
|
---------- |
---------- |
|
|
31,595,713 |
42,258,029 |
|
| CURRENT
LIABILITIES |
|
| Short
term borrowings |
|
8 |
22,595,369 |
42,595,369 |
|
| Current
portion of long term liabilities |
|
9 |
149,922,330 |
119,797,839 |
|
| Creditors,
accrued and other |
|
|
|
| liabilities |
|
10 |
314,537,069 |
293,512,588 |
|
| Taxation |
|
5,395,181 |
9,060,966 |
|
|
---------- |
---------- |
|
|
492,449,949 |
464,966,762 |
|
|
| CONTINGENCIES |
|
11 |
-- |
-- |
|
|
---------- |
---------- |
|
|
327,723,297 |
349,950,989 |
|
|
========== |
========== |
|
|
|
|
| OPERATING
FIXED ASSETS |
|
12 |
280,437,199 |
308,665,482 |
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
367,874 |
367,874 |
|
|
|
|
|
| CURRENT
AS SETS |
|
|
|
|
| Stores,
spares and loose tools |
|
13 |
28,642,604 |
29,263,201 |
|
| Trade debtors - |
|
|
|
|
| Unsecured
considered good |
|
14 |
556,377 |
1,252,242 |
|
|
|
|
|
| Loans,
advances and |
|
|
|
|
| prepayments |
|
15 |
12,815,782 |
9,697,134 |
|
|
|
|
|
| Cash
and bank balances |
|
16 |
4,903,461 |
705,056 |
|
|
|
---------- |
---------- |
|
|
46,918,224 |
40,917,633 |
|
|
---------- |
---------- |
|
|
327,723,297 |
349,950,989 |
|
|
========== |
========== |
|
| The
annexed notes from 1 to 30 form an integral part of these accounts. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
| Sales |
|
17 |
585,789,022 |
308,877,414 |
|
| Cost
of goods sold |
|
18 |
531,875,943 |
360,411,554 |
|
|
---------- |
---------- |
|
| Gross
profit / (loss) |
|
53,913,079 |
(51,534,140) |
|
|
| Operating
expenses |
|
| Administration |
|
19 |
16,999,556 |
16,105,180 |
|
| Selling |
|
20 |
622,927 |
472,813 |
|
|
---------- |
---------- |
|
|
(17,622,483) |
(16,577,993) |
|
|
---------- |
---------- |
|
| Operating
profit/(loss) |
|
36,290,596 |
(68,112,133) |
|
| Other charges |
|
| Financial |
|
21 |
7,607,737 |
11,188,886 |
|
| Other
allocation and charges |
|
22 |
27,746,299 |
30,879,786 |
|
| Worker's
profit participation fund |
|
53,703 |
-- |
|
|
---------- |
---------- |
|
|
(35,407,739) |
(42,068,672) |
|
|
---------- |
---------- |
|
|
882,857 |
(110,180,805) |
|
| Other income |
|
23 |
137,497 |
660,994 |
|
|
---------- |
---------- |
|
| Profit/(Loss)
before taxation |
|
1,020,354 |
(109,519,811) |
|
|
|
|
| Taxation |
|
|
|
| Current |
|
3,000,000 |
1,800,000 |
|
| Prior years' |
|
789,918 |
(2,416,128) |
|
|
---------- |
---------- |
|
|
(3,789,918) |
616,128 |
|
|
---------- |
---------- |
|
| Loss
after taxation |
|
(2,769,564) |
(108,903,683) |
|
| Accumulated
loss brought forward |
|
(804,208,079) |
(695,304,396) |
|
|
---------- |
---------- |
|
| Accumulated
loss carried forward |
|
(806,977,643) |
(804,208,079) |
|
|
========== |
========== |
|
| Earnings
per share |
|
27 |
(0.26) |
(10.04) |
|
|
| The
annexed notes from 1 to 30 form an integral part of these accounts. |
|
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2001 |
|
|
|
Issued, |
|
|
|
Subscribed |
|
|
|
and paidup |
Accumulated |
|
|
|
capital |
(Loss)/Profit |
Total |
|
|
-------------------Rupees--------------------------- |
|
| Balance
at October 01, 1999 |
|
108,500,000 |
(695,304,396) |
(586,804,396 |
|
| Loss for the year |
|
-- |
(108,903,683) |
(108,903,683 |
|
|
---------- |
---------- |
---------- |
|
| Balance
at September 30, 2000 |
|
108,500,000 |
(804,208,079) |
(695,708,079 |
|
| Loss for the year |
|
-- |
(2,769,564) |
(2,769,564 |
|
|
---------- |
---------- |
---------- |
|
| Balance
at September 30, 2001 |
|
108,500,000 |
(806,977,643) |
(698,477,643) |
|
|
========== |
========== |
========== |
|
|
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2001 |
|
|
|
2001 |
2000 |
|
|
Rupees |
Rupees |
|
