| Baba Farid Sugar Mills Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| COMPANY'S
INFORMATION |
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| NOTICE
OF THE MEETING |
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| DIRECTORS'
REPORT |
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| AUDITORS'
REPORT |
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| BALANCE
SHEET |
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| PROFIT
& LOSS ACCOUNT |
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| STATEMENT
OF CHANGES IN |
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| FINANCIAL
POSITION (CASH FLOW STATEMENT) |
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| NOTES
TO THE ACCOUNTS |
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| SCHEDULE
OF FIXED ASSETS |
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| PATTERN
OF SHAREHOLDING |
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| COMPANY'S
INFORMATION |
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| BOARD
OF DIRECTORS |
CHIEF EXECUTIVE |
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|
MR. GHULAM MOHAMMED A.
FECTO |
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|
DIRECTORS |
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MR. MUNAWAR ALl FECTO |
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MR. KAISER MEHMOOD FECTO |
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DR. ABDUL WAHID MOHAMMED |
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MR. JAMES R. RICHARDS |
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MR. SAID AHMED |
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MR. YAHYA AHMED BAWANY |
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MR. FAZLUR REHMAN |
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CH. BARKAT ALI |
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| SECRETARY |
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MR. MUHAMMED ANWAR
NATHANI (ACA) |
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| AUDITORS |
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M/S. HYDER BHIMJI &
CO. |
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(Chartered Accountants) |
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M/S. A.R. DIWAN & CO. |
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(Chartered Accountants) |
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| BANKERS |
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MUSLIM COMMERCIAL BANK
LTD. |
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HABIB BANK LTD. |
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| REGISTERED
OFFICE |
1ST FLOOR, PANORAMA
CENTRE, |
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RAJA GHAZANFAR ALl KHAN
ROAD, |
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KARACHI-75530 |
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| ZONAL
OFFICE |
1ST FLOOR, NAWA-E-WAQT
HOUSE, |
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4-SHAHRAH-E-FATIMA JINNAH |
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LAHORE. |
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| MILLS |
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OKARA (Distt. OKARA) |
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| NOTICE
OF THE MEETING |
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| NOTICE
IS HEREBY GIVEN that the Twenty First Annual General Meeting of the |
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| members
of the Company will be held on Thursday the 30th March, 2000 at 4.00 P.M. |
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| at
Hotel Metropole, Club Road, Karachi to transact the following business. |
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| ORDINARY
BUSINESS |
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| (1)
To receive and adopt the Report of the Directors and the Audited Accounts of
the |
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| Company
together with the Auditors' Report for the Financial Year ended 30th |
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| September,
1999. |
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| (2)
To appoint Auditors for the year 1999-2000 and fix their remuneration. |
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By order of the Board |
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|
(GHULAM MOHAMMED A. FECTO) |
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| Karachi:
the 23rd February, 2000 |
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Chief Executive |
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| NOTES: |
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| (1)
The Share Transfer Books of the Company will remain closed from March 22,
2000 to March 30, |
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| 2000
(both days inclusive). |
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|
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| (2)
All the members Should bring their original National Identity Cards at the
time of the meeting. |
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| (3)
A member entitled to attend and vote at this Meeting may appoint another
member as his/her |
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| Proxy
to attend, speak and vote on his/her behalf. The instrument appointing a
proxy and the |
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| power
of attorney or other authority under which it is signed or a notarially
attested copy of the |
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| power
of attorney must be deposited at the registered office of the Company at
least 48 hours |
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| before
the time of the meeting. |
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|
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| CDS
Account Holder: |
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| A.
For Attending the Meeting: |
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|
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| i)
In case of individuals, the account holder or sub-account holder and/or the
person whose |
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| securities
are in group account and their registration details are uploaded as per the
Regulations, |
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| shall
authenticate his identity by showing his original National Identity Card
(NIC) or original |
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| passport
at the time of attending the meeting. |
|
|
| ii)
In case of corporate entity, the Board of Directors resolution/power of
attorney with specimen |
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| signature
of the nominee shall be produced (unless it has been provided earlier) at the
time of the |
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| meeting. |
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|
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| B.
For Appointing Proxies |
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| i) In case of individuals, the account holder
or sub-account holder and/or the person whose |
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| securities
are in group account and their registration details are uploaded as per the
Regulations, |
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| shall
submit the proxy form as per the above requirements. |
|
|
| ii)
The proxy form shall be witnessed by two persons whose names, addresses and
NIC numbers |
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| shall
be mentioned on the form. |
|
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| iii)
Attested copies of NIC or the passport of the beneficial owners and the proxy
shall be furnished |
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| with
the proxy form. |
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|
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| iv)
The proxy shall produce his original NIC or original passport at the time of
the meeting. |
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| 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 |
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| Company. |
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| DIRECTORS'
REPORT |
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| The Members, |
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| BABA
FARID SUGAR MILLS LIMITED, |
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| KARACHI. |
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|
| Gentlemen, |
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| Your
Directors present their Twenty First Annual Report together with the audited |
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| accounts
of the company for the year ended September 30, 1999. |
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| The
operational performance for the year under review is as under: |
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|
November 25, |
November 19, |
|
| Commencement
of Season. |
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|
1998 |
1997 |
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|
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| Concluding
of Season |
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|
April 27, |
April 30, |
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|
1999 |
1998 |
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|
|
| Duration
of Season |
|
Days |
153 |
162 |
|
| Sugar
cane Crushed |
|
M.T. |
466,326 |
511,189 |
|
| Production
of Refined Sugar |
|
M.T. |
30,923 |
40,242 |
|
| Sucrose
Content |
|
% |
6.63 |
7.87 |
|
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| From
the above operational performance it is observed that our mill has crushed
lesser |
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| quantity
of sugar cane and consequently production of refined sugar was less than last |
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| year
due to fall in sucrose recovery because of viral attack on sugar cane crop
and |
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| growing
excessive availability of Indian variety which is ruining the sugar industry. |
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| Trading
results during the year depict a modest upward improvement in sale, due to |
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| slight
increase in sugar prices in the local market but not in proportion to
increase in |
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| price
of sugar cane. The Company also availed the opportunity of exporting sugar
under |
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| the
policy announced by Government. The Company has exported 25% of its sugar |
|
| production
during the year despite the lower International prices, because of non- |
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| performance
penalty imposed by the Government. |
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|
| Your
Company has incurred loss due to low sucrose recovery (which is lowest in the |
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| Company's
history i.e.6.63%) because of reasons mentioned above. |
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| Your
Board regretfully recommends that DIVIDEND for the year review be passed
over. |
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| The
Earning per share also decreased to Rs. (8.16) from Rs. (2.93) of previous
year. |
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|
| CURRENT
YEAR PROSPECTS |
|
| In
the year 1999-2000 crushing season commenced on November 15, 1999 and as on |
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| February
15, 2000 we have crushed 273,702 tons of sugar cane producing 18,717 tons |
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| of
refined sugar with sucrose content 6.92%. We will be able to crush 350,000
tons to |
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| 375,000
tons approximately during the current season subject to availability of sugar |
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| cane
as both yield per acre and area under cultivation has been reduced by 25% to
30%. |
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| The
Company will be able to achieve the target production despite low sucrose
recovery. |
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| In
the current season neighbouring mill started Price War and using total
unethical and |
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| unbusiness
like method for lifting huge quantity of cane from our Natural Zones. We |
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| strongly
recommend to Government not to allow export of sugar as we feel there is
going |
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| to
be shortage of sugar and Government may have to import at least 0.200 million
M.T. |
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| of
sugar in the months of July to October 2000 as Country will face acute
shortage. We |
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| also
recommend the revival of zoning system that was abolished due to political
reasons |
|
| in
order to improve the varieties of cane as well as to improve sucrose
recovery. |
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| Endeavours
are being made for a better future and financial outcome although these |
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| would
be primarily dependent on production achievement, selling prices in local
market |
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| and
optimum utilization of resources. The prices of sugar in local market is
showing |
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| rising
trend and hope this will further improve in the years to come. We are now
giving |
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| better
quality of seeds in order to replace Indian variety. Your Directors are
pleased to |
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| inform
that there are no defaults and improvement in production and financial
results |
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| hopefully
in coming days would show better profits. |
|
|
| During
the year there was complete industrial peace and harmony in all areas of our |
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| operation.
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 |
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| during
the year under review, the Management Employees relations continued to remain |
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| quite cordial. |
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| Your
Directors express their thanks to the officials of the Ministry of Food and |
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| Agriculture,
other Government Agencies and Pakistan Sugar Mills Association for the |
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| support
and encouragement they have extended to sugar industry and which we hope |
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| will
be continued in future too. We would also like to express our sincere thanks
to all the |
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| banks/financial
institutions for their continued support and co-operation. |
|
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| Your
Company entered the new millennium fully compliant the Y2K requirements. |
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|
| Messrs
Hyder Bhimji & Co and Messrs A. R. Diwan & Co. the Auditors of the
Company |
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| retire
and offer themselves for reappointment. |
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| Statement
showing the pattern of holding of the shares held by the members of Baba |
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| Farid
Sugar Mills Limited as on September 30, 1999 is annexed. |
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| With
Allah's blessing we move forward with hope and determination to be more |
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| prosperous
and stronger in future. |
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|
By Order of the Board |
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|
(GHULAM MUHAMMED A. FECTO) |
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| KARACHI:
February 23, 2000 |
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|
Chief Executive |
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|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of BABA FARID SUGAR MILLS |
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| LIMITED,
as at September 30, 1999 and the related profit and loss account and |
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| statement
of changes in financial position (cash flow statement together with the |
|
| notes
forming part thereof 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 |
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| purpose
of our audit and after due verification thereof, 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 |
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| 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 were for the purpose of |
|
| Company's
business; and |
|
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| iii)
the business conducted, investments made and the expenditure incurred |
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| 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 and |
|
| statement
of changes in financial position (cash flow statement) together with |
|
| the
notes forming part thereof, 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, 1999 and of the |
|
| loss
and the changes in financial position for the year then ended; and |
|
|
| (d)
in our opinion, no Zakat was deductible at source, under the Zakat and Ushr |
|
| Ordinance,
1980. |
|
|
| Without
qualifying our report, we draw your attention to note No. 2 of the financial |
|
| statements
in respect of appropriateness of going concern basis. However, the |
|
| financial
statements have been prepared on that basis in view of matters stated in |
|
| that note. |
|
|
|
A. R. DIWAN & CO. |
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|
HYDER BHIMJI & CO. |
|
|
Chartered Accountants |
|
|
Chartered Accountants |
|
|
| Karachi:
the 23rd February, 2000 |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
| SHARE
CAPITAL AND RESERVES |
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
|
| SHARE
CAPITAL: |
|
|
|
| Authorized |
|
|
|
| 10,000,000
Ordinary Shares of |
|
|
|
| Rs. 10/-each |
|
|
100,000,000 |
100,000,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Issued
subscribed & Paid up |
|
3-5 |
94,500,000 |
94,500,000 |
|
| Revenue
Reserve |
|
4 |
-- |
5,000,000 |
|
| Accumulated
(Loss) \ Unappropriated Profit |
|
|
(70,882,222) |
1,259,024 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
23,617,778 |
100,759,024 |
|
|
|
|
|
| SUB-ORDINATED
LOANS |
|
6 |
60,000,000 |
19,000,000 |
|
| DEFERRED
LIABILITIES |
|
7 |
32,906,291 |
35,212,621 |
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
| SUBJECT
TO FINANCE LEASE |
|
8 |
37,373,786 |
41,789,524 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
Portion of Deferred Liabilities |
|
7.1 |
5,038,457 |
1,450,690 |
|
| Current
Portion of Liabilities |
|
|
|
| Against
Assets Subject to Finance Lease |
|
8.1 |
22,959,882 |
28,437,531 |
|
| Short
Term Running Finance |
|
|
|
|
| (Utilized
under Mark-up arrangements) |
|
9 |
102,780,939 |
148,591,180 |
|
| Provision
for Taxation |
|
|
5,591,458 |
5,080,981 |
|
| Creditors
Accrued and Other Liabilities |
|
10 |
54,446,520 |
74,288,328 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
190,817,256 |
257,848,710 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
11 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL |
|
|
344,715,111 |
454,609,879 |
|
|
|
|
========== |
========== |
|
|
| FIXED ASSETS |
|
|
|
| Operating
Assets |
|
12 |
253,056,389 |
254,053,180 |
|
| Capital
Work-in-Progress |
|
12.2 |
210,240 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
253,266,629 |
254,053,180 |
|
|
|
|
|
|
| LONG
TERM INVESTMENTS |
|
13 |
3,000,000 |
3,000,000 |
|
| LONG
TERM DEPOSITS |
|
|
9,865,917 |
10,770,917 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
Spares and Loose Tools |
|
14 |
36,268,781 |
37,837,370 |
|
| Stock-in-Trade |
|
15 |
28,402,025 |
112,642,385 |
|
| Trade Debts |
|
16 |
34,120 |
3,149,301 |
|
| Loans
and Advances |
|
17 |
7,729,124 |
18,601,233 |
|
| Deposits,
Prepayments and |
|
|
|
| Other
Receivables |
|
18 |
4,852,560 |
7,949,892 |
|
| Cash
and Bank Balances |
|
19 |
1,295,955 |
6,605,601 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
78,582,565 |
186,785,782 |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL |
|
344,715,111 |
454,609,879 |
|
|
|
|
========== |
========== |
|
| Note:
The annexed notes form an integral part of these accounts |
|
|
| Karachi:
the 23rd February, 2000 |
|
|
|
(GHULAM MOHAMMED A. FECTO) |
|
(SAID AHMED) |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
|
| Sales |
|
20 |
555,184,707 |
512,478,402 |
|
| Cost of sales |
|
21 |
550,079,027 |
461,505,360 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
5,105,680 |
50,973,042 |
|
|
|
|
|
|
| Administrative
Expenses |
|
22 |
29,809,179 |
28,797,437 |
|
| Selling
& Distribution Expenses |
|
23 |
8,739,605 |
2,713,250 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
38,548,784 |
31,510,687 |
|
|
|
|
|
|
| Operating
(Loss)/Profit |
|
|
(33,443,104) |
19,462,355 |
|
| Other Income |
|
25 |
1,570,713 |
1,842,843 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(31,872,391) |
21,305,198 |
|
|
|
|
|
|
| Financial
Expenses |
|
26 |
41,862,765 |
43,565,853 |
|
| Other Charges |
|
27 |
106,090 |
97,350 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
41,968,855 |
43,663,203 |
|
|
|
|
| Net
(Loss) before Taxation |
|
|
(73,841,246) |
(22.,358,005) |
|
| Taxation |
|
28 |
(3,300,000) |
(5,294,463) |
|
|
|
|
------------------ |
------------------ |
|
| Net
(Loss) after Taxation |
|
|
(77,141,246) |
(27,652,468) |
|
|
|
|
| Un-appropriated
Profit brought forward |
|
|
1,259,024 |
1,411,492 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(75,882,222) |
(26,240,976) |
|
| Transfer
from Revenue Reserve |
|
|
5,000,000 |
27,500,000 |
|
| Accumulated
(Loss)/Unappropriated |
|
|
------------------ |
------------------ |
|
| Profit
carried forward |
|
|
(70,882,222) |
1,259,024 |
|
|
|
|
========== |
========== |
|
|
| NOTE:
The annexed notes from an integral part of these account |
|
|
|
(GHULAM MOHAMMED A. FECTO) |
|
(SAID AHMED) |
|
|
Chief Executive |
|
Director |
|
|
|
|
| Karachi:
the 23rd February, 2000 |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED 30TH SEPTEMBER, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Cash
generated from operations |
|
A |
70,242,928 |
(42,455,571) |
|
| Financial
charges paid |
|
|
(39,688,312) |
(40,827,410) |
|
| Taxes paid |
|
|
(2,789,523) |
(3,521,074) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
|
27,765,093 |
(86,804,055) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Fixed
capital expenditure |
|
(20,807,548) |
(4,679,457) |
|
| Sales
proceeds of fixed assets |
|
250,000 |
250,000 |
|
| Decrease
in long term deposits |
|
905,000 |
3,082,083 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(19,652,548) |
(1,597,374) |
|
|
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Increase
in short term finance |
|
|
(45,810,241) |
109,398,877 |
|
| Proceeds
of liabilities against |
|
|
|
|
| assets
subject to finance lease |
|
|
19,600,000 |
2,800,000 |
|
| Repayment
of liabilities against |
|
|
|
|
| assets
subject to finance lease |
|
(29,493,387) |
(23,439,667) |
|
| Increase
in sub-ordinated loan |
|
|
41,000,000 |
-- |
|
| Increase
in Deferred Liabilities |
|
|
1,281,437 |
5,512,621 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(13,422,191) |
94,271,831 |
|
|
|
|
| Net
increase/(decrease)in cash and |
|
|
| Cash
equivalents |
|
(5,309,646) |
5,870,402 |
|
| Cash
and Cash Equivalent in the beginning of |
|
|
|
| the year |
|
|
6,605,601 |
735,199 |
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of year |
|
1,295,955 |
6,605,601 |
|
|
|
========== |
========== |
|
|
|
|
|
| A.
CASH FLOW FROM OPERATING ACTIVITIES |
|
| (Loss)
before taxation |
|
|
(73,841,246) |
(22,358,005) |
|
|
|
|
| Add/(less)
adjustment for non cash |
|
|
| charges
and other items |
|
|
|
| Depreciation |
|
|
21,521,086 |
22,413,025 |
|
| (Profit)
on disposal of fixed assets |
|
(176,986) |
-- |
|
| Financial
charges |
|
41,862,765 |
43,565,853 |
|
| Provision
for Obsolete. Stores Items |
|
149,450 |
-- |
|
|
|
------------------ |
------------------ |
· |
|
|
|
63,356,315 |
65,978,878 |
|
|
|
------------------ |
------------------ |
|
| (Loss)/Profit
before working capital changes |
|
(10,484,931) |
43,620,873 |
|
|
|
|
========== |
========== |
|
|
|
|
| EFFECT
ON CASH FLOW DUE TO WORKING |
|
|
| CAPITAL
CHANGES |
|
|
|
|
|
|
| (Increase)/decrease
in current assets |
|
|
| Stores
and ,spares |
|
1,419,139 |
2,698,511 |
|
| Stock-in-trade |
|
|
84,240,360 |
(110,787,896) |
|
| Trade debts |
|
|
3,115,181 |
(3,010,272) |
|
| Loans
and advances |
|
10,872,108 |
(9,808,286) |
|
| Deposits,
prepayments & Receivables |
|
3,097,332 |
(3,918,720) |
|
|
|
------------------ |
------------------ |
|
|
|
102,744,120 |
(124,826,663) |
|
|
|
|
| Increase/(decrease)
in current liabilities |
|
