| TANDLIANWALA SUGAR MILLS LIMITED |
|
|
|
|
| ANNUAL
REPORT 2004 |
|
|
| Board
of Directors |
|
|
| Company
Secretary and |
|
|
Mr. Akbar Akhtar Khan |
(Chairman) |
|
|
Mr. Haroon Akhtar Khan |
(Chief Executive) |
|
|
Mr. Ghazi Akhtar Khan |
|
|
Mrs. Rasheeda Begum |
|
|
Mrs. Mobina Akbar Khan |
|
|
Mrs. Nazli Rafat Jamal |
|
|
Mr. Hameed Ullah Khan
Paracha |
|
|
Mr. Saeed Ullah Khan
Paracha |
|
|
|
|
| Chief
Financial Officer |
|
|
Mr. Ahmad Jehanzeb Khan |
|
|
| Bankers |
|
| Muslim
Commercial Bank Limited |
|
| Bank
Alfalah Limited |
|
| Habib
Bank Limited |
|
| Allied
Bank of Pakistan Limited |
|
| National
Bank of Pakistan Limited |
|
| United
Bank Limited |
|
|
| Legal Advisors |
|
|
Cornelius, Lane &
Mufti |
|
|
Nawa-i-Waqat Building |
|
|
4-Shahrah-e-Fatima Jinnah |
|
|
Lahore. |
|
|
| Audit
Committee |
|
|
Mr. Haroon Akhtar Khan |
Chairman |
|
|
Mr. Akbar Akhtar Khan |
Member |
|
|
Mr. Ghazi Akhtar Khan |
Member / Secretary |
|
|
| Auditors |
|
|
Taseer Hadi Khalid &
Co. |
|
|
Chartered Accountants |
|
|
| Mills |
|
|
Kanjwani, Tehsil
Tandlianwala |
|
|
District, Faisalabad |
|
|
| Registered
Office |
|
|
32-N, Gulberg-II, Lahore. |
|
|
| DIRECTORS'
REPORT |
|
|
| Dear
Shareholders. |
|
|
| The
Board of Directors of Tandlianwala Sugar Mills Limited are pleased to present
before you the |
|
| Sixteenth
Annual Report together with the Audited Accounts of the company for the year
ended |
|
| September
30,2004. |
|
|
| The
operating results for the season 2003-2004 and report on the financial
position for the year are |
|
| discussed
as under: |
|
|
| Cane
Crushing and Production: |
|
|
|
|
2003-2004 |
2002-2003 |
|
| Season started |
|
|
November 30, 2003 |
November 18, 2002 |
|
| Season closed |
|
|
April 20, 2004 |
April 24, 2003 |
|
| Total days worked |
|
(Run) |
|
143 |
158 |
|
| Sugarcane
crushed |
(M. Tons) |
|
883,996.48 |
854,075.58 |
|
| Sugar produced |
|
(M. Tons) |
|
77,707 |
71,168 |
|
| Sugar recovery |
|
(%) |
|
8.79 |
8.33 |
|
| Molasses
production |
(M. Tons) |
|
43,747 |
41.926 |
|
| Molasses
recovery |
(%) |
|
4.95 |
4.91 |
|
|
| Our
Company achieved satisfactory operating and financial results during the year
under review. The |
|
| sugar
production increased by almost 9% during the season as compared to previous
year, although the |
|
| days
worked were less. We carried out a comprehensive cane development programme
which resulted |
|
| in
improved production and an enhanced recovery. |
|
|
| The
average recovery of 8.79% was the highest achieved since inception of our
Mills. |
|
| The
overall situation in sugar sector remained depressed due to glut of sugar in
the market. |
|
| Current
Season 2004 - 2005 |
|
|
| We
started crushing with effect from November 01,2004. Production of sugar is
expected to decrease |
|
| as
area under sugarcane in Punjab declined this year by 16%. |
|
|
| The
brief results of the present season, since inception till December 31.2004
are as follows: |
|
|
|
|
2004-2005 |
|
| Season started |
|
|
November 01, 2004 |
|
| Total days worked |
(Run) |
|
61 |
|
| Sugarcane crushed |
(M. Tons) |
|
374,610.60 |
|
| Sugar produced |
(M. Tons) |
|
30,033.00 |
|
| Sugar recovery- |
(%) |
|
8.09 |
|
| Molasses production |
(M. Tons) |
|
18,919.00 |
|
| Molasses recovery |
(%) |
|
5.104 |
|
|
| This
year we expect to end up with a recovery close to last year recovery. The
cost of cane has astronomically |
|
| increased
but so far the sugar prices have remained high also. The profitability,
however, depends on the price of |
|
| sugar
for the balance of the year. |
|
|
| The
Government will tiy hard to keep the sugar prices down but due to rising
price of sugar in the International |
|
| Market,
it has a tough job ahead. |
|
|
| NEW PROJECTS |
|
| Distillery
Division |
|
| We
are currently in the process of setting up a distillery having a capacity of
125,000 liters of ethyl alcohol |
|
| (ethanol)
per day at our existing sugar plant site situated at Tehsil Tandlianwala,
District Faisalabad. The annual |
|
| capacity
of the distillery will be 30 thousand tons of ethanol and the total project
cost works out to be PKR 319.5 |
|
| million. |
|
|
| The
Financial close of the distillery project has already been achieved through
equity contribution in the form of |
|
| rights
issue amounting to PKR 80.988 million. The right issue was offered on the
stock exchanges in January |
|
| 2004
and a total of 6,748,991 shares were offered at a premium of PKR 2 per share.
The remaining debt portion |
|
| of
the project has been raised through bank financing. L/Cs for procurement of
machinery have already been |
|
| established
and the distillery is expected to start production during the year 2004- 05. |
|
|
| SugarUnit(Expansion
Unit2) |
|
| We
have selected one of the best area in Pakistan for extension of our sugar
mills division (Unit 2) at Meran in |
|
| Dera
Ismail Khan. There is an abundant availability of sugarcane in the vicinity
of our proposed mills with huge |
|
| acres
of land available for further development of sugarcane crop. |
|
|
| The
Unit 2 shall have a capacity of 10,000 TCD, which translates into an annual
rated capacity of 1,500,000 tons. |
|
| Local
component of the machinery is being supplied by Heavy Mechanical Complex,
Taxila whereas the |
|
| foreign
component is being procured from different companies of England, Germany,
Japan and China. The |
|
| extension
unit will go into production at the beginning of the 2005-2006 crushing
campaign. |
|
|
| Compliance
With Code of Corporate Governance |
|
| The
Board of Directors of Tandlianwala Sugar Mills Limited and its management is
fully conversant with its |
|
| responsibilities
as formulated in the Code of Corporate Governance incorporated in the listing
regulations of |
|
| stock
exchanges. The prescribed practices are effectively under implementation in
the company and there has |
|
| been
no material departure from the best practices of Corporate Governance as
detailed in the listing regulations. |
|
|
| The
statements, as required by the Code of Corporate Governance are given
below: . |
|
|
| • The financial statements for the
year ended September 30, 2004 present fairly its state of affairs, the |
|
|
| results
of its operations, cash flows and changes in equity; |
|
|
| • Proper books of accounts have
been maintained; |
|
|
| • International Accounting Standards
(IAS) as applicable in Pakistan, have been followed in preparation |
|
| of
financial statements. Appropriate accounting policies have been consistently
applied; |
|
|
| • The system of internal control is
sound in design and has been effectively implemented and monitored; |
|
|
| • There is no doubt about the
company's ability to continue as a going concern; |
|
|
| • There has been no material
departure from the best practices of the corporate governance as detailed in |
|
| the
listing regulations. |
|
|
| Six
Years Review At a Glance |
|
| The
six years review at a glance is annexed. |
|
|
| Pattern
of Shareholdings |
|
| The
pattern of shareholdings as on September 30,2004 is annexed. |
|
|
| Audit
Committee |
|
| The
Audit Committee comprises of the following members: |
|
|
| Mr.
Haroon Akhtar Khan
Chairman |
|
|
| Mr.AkbarAkhtarKhan Member |
|
|
| Mr.
Ghazi Akhtar Khan
Member/ Secretary |
|
|
| Board Meetings |
|
| There
have been seven Board meetings during the year and the attendance of each
director is stated as under: |
|
|
| Name
of Directors |
Number of meeting
attended |
|
| Mr.
Akbar Akhtar Khan |
7 |
|
| Mr.
Haroon Akhtar Khan |
7 |
|
| Mr.
Ghazi Akhtar Khan |
6 |
|
| Mrs.
Rasheeda Begum |
5 |
|
| Mrs.
Mobina Akbar Khan |
6 |
|
| Mr.
Saeedullah Khan Paracha |
4 |
|
| Mr.
Hameedullah Khan Paracha |
4 |
|
| Mrs.
Nazli Rafat Jamal |
2 |
|
|
| (However,
leaves of absence were granted to the directors who could not attend the
Board Meetings due to their |
|
| preoccupations.) |
|
|
| Trading
in Shares |
|
| The
Directors, CEO, CFO and Company Secretary and their spouses and minor
children did not carry out |
|
| any
transactions in the Shares of the company during the year. |
|
|
| Outstanding
Statutory Dues |
|
| Details
of outstanding dues towards minimum tax and those relating to other statutory
obligations are set out |
|
| in
note # 30 and 07 respectively. |
|
|
| Dividend |
|
| No
dividend is being recommended by the Board of Directors for the year ended
September 30,2004. |
|
|
| Staff
Retirement Benefits |
|
| The
company operates an un-funded gratuity scheme for all employees with
qualifying service period of six |
|
| months. |
|
|
| Auditors |
|
| The
retiring Auditors. M/s Taseer Hadi Khalid & Company, Chartered
Accountants, being eligible, offer |
|
| themselves
for re-appointment for the year ending September 30,2005. |
|
|
| Appreciation |
|
| We
appreciate the efforts and devotion of the workers, staff and executives and
hope that they will contribute to |
|
| the
enhancement of productivity and well being of the company with the same zeal
and effort. |
|
|
| On
behalf of the Board |
|
|
| SIX
YEARS REVIEW AT A GLANCE |
|
|
|
|
Figures in '000 |
|
|
2004 |
2003 |
2002 |
2001 |
2000 |
1999 |
|
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
| FINANCIAL
RESULTS |
|
| Sales (Net) |
|
1,055,439 |
843,137 |
1,385,566 |
1,145,546 |
919,013 |
1,201,924 |
| Cost of Sales |
|
959,807 |
788,160 |
1,103,024 |
1,104,152 |
795,015 |
1,040,742 |
| Gross profit |
|
95,632 |
54,977 |
282,542 |
41,394 |
123,998 |
161,182 |
| Operating,
financial and |
|
| other expenses |
|
50,920 |
78,972 |
79,046 |
132,110 |
95,957 |
146,578 |
|
44,712 |
-23,995 |
203,496 |
-90,716 |
28,041 |
14,604 |
| Other income |
|
2,979 |
2,159 |
2,702 |
1,889 |
1,075 |
2,678 |
| Net
profit / (loss) before wppf |
47,691 |
-21,836 |
206,198 |
-88,827 |
29,116 |
17,282 |
| Workders'
profit participation fund |
2,385 |
1,326 |
10,309 |
- |
1,456 |
864 |
| Net
(loss) / profit before |
|
| Taxation |
|
45,306 |
-23,162 |
195,889 |
-88,827 |
27,660 |
16,418 |
| Others |
|
_ |
_ |
_ |
_ |
_ |
_ |
| Provision
for taxation |
5,277 |
4.216 |
6,928 |
5,728 |
4,595 |
5,499 |
| Net
(loss) / profit after |
|
| Taxation |
|
40,029 |
-27,378 |
188,961 |
-94,555 |
23,065 |
10,919 |
| Cash dividend |
|
. |
- |
5% |
. |
_ |
. |
| (Loss)
/ Earning per share (Rs.) |
1.4 |
-1.09 |
7.58 |
-3.79 |
(L23_ |
0.44 |
| Authorized
Capital |
350,000 |
250 |
250 |
250 |
250 |
250 |
| Paid-up capital |
|
316.806 |
249.316 |
249.316 |
249,316 |
» 249.316 |
249.316 |
| Fixed
capital expenditures (Net) |
677.528 |
666.982 |
670.098 |
668.727 |
701.781 |
736.73 |
| OPERATING
RESULTS |
|
| Sugarcane
crushed M. Tons |
883,096 |
854,076 |
840,392 |
637,032 |
621,889 |
970,917 |
| Sugar
recovery % |
8.79 |
8.33 |
8.45 |
7.14 |
7.12 |
7.47 |
| Sugar
production M . Tons |
77,707 |
71,168 |
71,101 |
* 64,951 |
44,265 |
72,545 |
| *
(including remelt raw sugar) |
|
| Molasses
recovery % |
4.95 |
4.91 |
4.92 |
5.17 |
5.16 |
5.15 |
| Season started |
|
30-11-2003 |
18-11-2002 |
04-12-2001 |
03-11-2000 |
15-11-1999 |
25-11-1998 |
| Season closed |
|
20-04-2004 |
24-04-2003 |
30-04-2002 |
09-04-2001 |
31-03-2000 |
01-05-1999 |
| Crushing
days No. |
143 |
158 |
148 |
158 |
138 |
158 |
|
| PATTERN
OF SHARE HOLDING |
|
|
|
No. of Shareholders |
Shareholding |
Total Shares Held |
|
|
|
From |
To |
|
|
|
36 |
1 |
100 |
2926 |
|
|
635 |
101 |
500 |
307452 |
|
|
124 |
501 |
1000 |
113274 |
|
|
95 |
1001 |
5000 |
262013 |
|
|
23 |
5001 |
10000 |
169355 |
|
|
14 |
10001 |
15000 |
176777 |
|
|
2 |
15001 |
20000 |
36625 |
|
|
6 |
20001 |
25000 |
140600 |
|
|
3 |
25001 |
30000 |
79200 |
|
|
2 |
30001 |
35000 |
66000 |
|
|
1 |
40001 |
45000 |
43000 |
|
|
1 |
45001 |
50000 |
50000 |
|
|
2 |
55001 |
60000 |
119000 |
|
|
1 |
65001 |
70000 |
70000 |
|
|
1 |
90001 |
95000 |
93500 |
|
|
2 |
95001 |
100000 |
200000 |
|
|
1 |
100001 |
105000 |
100353 |
|
|
1 |
140001 |
145000 |
144300 |
|
|
1 |
145001 |
150000 |
150000 |
|
|
1 |
170001 |
175000 |
175000 |
|
|
1 |
245001 |
250000 |
250000 |
|
|
3 |
1375001 |
1380000 |
4129868 |
|
|
1 |
1380001 |
1385000 |
1383359 |
|
|
3 |
1455001 |
1460000 |
4379391 |
|
|
1 |
1460001 |
1465000 |
1461621 |
|
|
1 |
1490001 |
1495000 |
1490568 |
|
|
1 |
1685001 |
1690000 |
1688000 |
|
|
2 |
1890001 |
1895000 |
3787492 |
|
|
1 |
10610001 |
10615000 |
10610937 |
|
|
966 |
|
31680611 |
|
|
| Categories
of Shareholders |
|
Shares Held |
Percentage |
|
| Directors,
chief executive officers |
|
|
|
| and
their spouse and minor children |
|
14,990,506 |
47.32% |
|
| Associated
companies, undertaking and related parties |
- |
- |
|
| NIT and ICP |
|
1,706,800 |
5.39% |
|
| Banks
development financial institutions, |
|
|
| non
banking financial institutions |
|
238,100 |
0.75% |
|
| Insurance
companies |
|
277,500 |
0.88% |
|
| Modarabas
and mututal funds |
|
26,700 |
0.08% |
|
| Shares
holders holding 10% |
|
10,610,937 |
33.49% |
|
| General public |
|
|
|
| a. Local |
|
3,223,983 |
10.18% |
|
| b. Foreign |
|
- |
- |
|
| Others |
|
|
|
| Joint
stock companies |
|
604,985 |
1.91% |
|
| Non-residence
/ Foreign Ccompanies |
|
10,612,037 |
33.50% |
|
|
| Pattern
of Holding of Shares - Additional Information |
|
| As
at 30 September 2004 |
|
|
|
| S.No. Name |
|
Holding |
% of Share |
|
| Associated
companies |
|
0 |
0.00% |
|
| NIT and ICP |
|
|
|
| 1. Investment Corp. of Pakistan |
|
12,300 |
0.04% |
|
| 2. National Bank of Pakistan (CDC) |
1,688,000 |
5.33% |
|
| 3. Investment Corp. of Pakistan (CDC) |
6,500 |
0.02% |
|
|
1,706,800 |
5.39% |
|
| Directors,
CEO their spouse and minor children |
|
|
| 1. Mr. Akbar Akhtar Khan |
|
1,376,558 |
4.35% |
|
| Mr.
Akbar Akhtar Khan (CDC) |
|
1,459,780 |
4.61% |
|
| 2. Mr. Haroon Akhtar Khan |
|
1,383,359 |
4.37% |
|
| Mr.
Haroon Akhtar Khan (CDC) |
|
1,461,621 |
4.61% |
|
| 3. Mr. Ghazi Akhtar Khan |
|
1,376,955 |
4.35% |
|
| Mr.
Ghazi Akhtar Khan (CDC) |
|
1,459,887 |
4.61% |
|
| 4. Mrs. Rasheeda Begum |
|
1,376,355 |
4.34% |
|
| Mrs.
Rasheeda Begum (CDC) |
|
1,459,724 |
4.61% |
|
| 5. Mrs. Mobina Akbar Khan |
|
1,000 |
0.00% |
|
| 6. Mr. Saeedullah Khan Paracha |
1,490,568 |
4.71% |
|
| 7. Mr. Hameedullah Khan Paracha |
1,894,064 |
5.98% |
|
| 8. Mrs. Nazli Rafat Jamal |
|
635 |
0.00% |
|
| 9. Mrs. Shahnaz Saeedullah |
|
250,000 |
0.79% |
|
|
|
14,990,506 |
47.32% |
|
|
| Public
sector companies & corporations |
|
| 1
. Sarfraz Mahmood (Pvt.) Ltd. |
|
500 |
0.00% |
|
| 2. Shirazi Investments (Pvt.) Ltd. |
|
12,300 |
0.04% |
|
| 3. A. Sattar Motiwala Securities (Pvt.) Ltd.
(CDC) |
270 |
0.00% |
|
| 4
. A . H . K . D . Securities (Pvt .)
Ltd . (CDC) |
89,000 |
0.28% |
|
| 5. Aqeel Karim Dhedhi Securities (Pvt.)
Ltd. (CDC) |
1,400 |
0.00% |
|
| 6. B & B Securities (Pvt.) Ltd. (CDC) |
2,000 |
0.01% |
|
| 7. Bawa Securities (Pvt.) Ltd. (CDC) |
2,000 |
0.01% |
|
| 8. Capital Vision Securities (Pvt.) Ltd.
(CDC) |
400 |
0.00% |
|
| 9. Continental Capital Management (Pvt.)
Ltd. (CDC) |
600 |
0.00% |
|
| 10. Darson Securities (Pvt.) Ltd. (CDC) |
70,000 |
0.22% |
|
| 1
1 . DJM Securities (Pvt.) Ltd. (CDC) |
223,500 |
0.71% |
|
| 12. Fawad Yousauf Securities (Pvt.) Ltd. (CDC) |
8,500 |
0.03% |
|
| 13. First Capital Equities Limited (CDC) |
2,500 |
0.01% |
|
| 14. Intermarket Securities (Pvt.) Ltd. (CDC) |
20,500 |
0.06% |
|
|
| S. No. Name |
|
Holding |
% of Share |
|
| 15. Invest Capital & Securities (Pvt.)
Ltd. (CDC) |
115 |
0.00% |
|
| 16. Iqbal Usman Kodvavi Securities (Pvt.)
Ltd. (CDC) |
1,000 |
0.00% |
|
| 17. Jahangir Siddique Capital Markets Ltd.
(CDC) |
10,100 |
0.03% |
|
| 18. Jamshaid & Hasain Securities (Pvt.)
Ltd. (CDC) |
1,500 |
0.00% |
|
| 19. Live Securities (Pvt.) Ltd. (CDC) |
31,000 |
0.10% |
|
| 20. M.R.A. Securities (Pvt.) Ltd. (CDC) |
6,000 |
0.02% |
|
| 21. MGM Securities (Pvt.) Ltd. (CDC) |
1,000 |
0.00% |
|
| 22. Moosa, Noor Mohammad, Shahzada & Co.
(Pvt.) Ltd |
.(CDC) 5,000 |
0.02% |
|
| 23. Moosani Securities (Pvt.) Ltd. (CDC) |
5,000 |
0.02% |
|
| 24. Oriental Securities (Pvt.) Ltd. (CDC) |
812 |
0.00% |
|
| 25. Prudential Securities Ltd. (CDC) |
|
500 |
0.00% |
|
| 26. Safe Securities (Pvt.) Ltd. (CDC) |
635 |
0.00% |
|
| 27. Salim Chamdia Securities (Pvt.) Ltd. (CDC) |
1,000 |
0.00% |
|
| 28. Salman Services (Pvt.) Ltd. (CDC) |
4,500 |
0.01% |
|
| 29. Y.S. Securities & Services (Pvt.)
Ltd. (CDC) |
2,500 |
0.01% |
|
| 30. Zillion Capital Securities (Pvt.) Ltd.
(CDC) |
100,353 |
0.32% |
|
| 31
. The Karachi Stock Exchange (G)
Ltd. (CDC) |
500 |
0.00% |
|
|
604,985 |
1.91% |
|
| Banks
development financial institutions. |
|
|
| non
banking financial institutions |
|
|
|
| 1
. Bankers Equity Limited |
|
1,000 |
0.00% |
|
| 2. Paksitan Kawait Investment |
|
700 |
0.00% |
|
| 3. Pakistan Industrial Credit &
Investment Corp. Ltd. |
24,500 |
0.08% |
|
| 4. Saudi Pak Industrial & Agricultural |
|
|
| Investment
Company (Pvt.) Ltd. |
|
43,000 |
0.14% |
|
| 5. National Development Finance Corporation
Investor |
2,000 |
0.01% |
|
| 6. Atlas Bot Investment Bank Ltd. |
|
22,100 |
0.07% |
|
| 7. Indus Bank Ltd. |
|
144,300 |
0.46% |
|
| 8. Prudential Investment Bank Ltd. |
|
500 |
0.00% |
|
|
238,100 |
0.75% |
|
| Insurance
Companies |
|
|
|
| 1. Adamjee Insurance Co. Ltd. |
|
100,000 |
0.32% |
|
| 2. New Jubliee Insurance Co. |
|
2,400 |
0.01% |
|
| 3. EFU General Insurance |
|
100 |
0.00% |
|
| 4. State Life Insurance Corp. Ltd. (CDC) |
175,000 |
0.55% |
|
|
277,500 |
0.88% |
|
| Modaraba
& Mutual Fund |
|
|
|
| 1
. First Interfund M |
