| Fecto Sugar Mills Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| COMPANY
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) |
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| NOTES
TO THE ACCOUNTS |
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| SCHEDULE
OF FIXED ASSETS |
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| PATTERN
OF SHARE HOLDING |
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| COMPANY'S
INFORMATION |
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CHAIRMAN |
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MR. GHULAM MOHAMMED A.
FECTO |
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| BOARD
OF DIRECTORS |
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CHIEF EXECUTIVE |
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MR. MUNAWAR ALI FECTO |
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DIRECTORS |
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MR. KAISER MEHMOOD FECTO |
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MRS. ABEDA BANO |
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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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MR. UMAIR KHAN (SLIC) |
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| SECRETARY |
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MR. MUHAMMED ANWER
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 |
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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 |
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1st FLOOR, NAWA-E-WAQT
HOUSE, |
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4-SHAHRAH-E-FATIMA
JINNAH, LAHORE. |
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| MILLS |
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Darya Khan (Distt.
BHAKKAR) |
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| NOTICE
OF THE MEETING |
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| NOTICE
IS HEREBY GIVEN that the Thirty Fifth Annual General Meeting of the Members
of the Company |
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| will
be held on Thursday the 30th March, 2000 at 2.00 P.M. at Hotel Metropole,
Club Road, Karachi to transact the |
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| 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 Company together with |
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| the
Auditors' Report for the Financial Year ended 30th September, 1999. |
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|
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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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|
(MUNAWAR ALl 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, 2000 (both |
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| days inclusive). |
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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 Proxy to |
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| attend,
.speak and vote on his/her behalf. The instrument appointing a proxy and the
power of attorney or |
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| other
authority under which it is signed or a notorially attested copy of the power
of attorney must be |
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| deposited
at the registered office of the Company at least 48 hours before the time of
the meeting. |
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| CDA
Account holder: |
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| A.
For Attending the meeting: |
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| i)
In case of individuals, the account holder or sub-account holder and/or the
person whose securities are in |
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| group
account and their registration details are uploaded as per the Regulations,
shall authenticate his |
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| identity
by showing his original National Identity Card (NIC) or original passport at
the time of attending the |
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| meeting. |
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|
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| ii)
In case of corporate entity, the Board of Directors resolution/power of
attorney with specimen signature of |
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| the
nominee shall be produced unless it has been provided earlier) at the time of
the meeting. |
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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 securities are in |
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| group
account and their registration details are uploaded as per the Regulations,
shall submit the proxy form |
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| as
per the above requirements. |
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|
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| ii)
The proxy form shall be witnessed by two persons whose names, addresses and
NIC numbers shall be |
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| mentioned
on the form. |
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|
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| iii)
Attested copies of NIC or the passport of the beneficial owners and the proxy
shall be furnished with the |
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| 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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|
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| v)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen signature |
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| shall
be submitted (unless it has been provided earlier) alongwith proxy form to
the Company. |
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| DIRECTOR'S
REPORT |
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| The Members, |
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| FECTO
SUGAR MILLS LIMITED, |
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| KARACHI. |
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|
| Gentlemen, |
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| Your
Directors feel pleasure in presenting their Thirty Fifth Annual Report
together with the audited accounts of the |
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| company
for the year ended September 30, 1999. |
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| The
year under review witnessed all round improvement in performance standards.
By the Grace of Almighty Allah |
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| the
sales increased by 16% and have touched Rs. One billion mark. The operational
performance for the year under |
|
| review
is as under: |
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| Season
Commenced on |
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November 25, 1998 |
|
November 21, 1997 |
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| Concluding
of season |
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May 08, 1999 |
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May 04, 1998 |
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| Duration
of Season |
Days |
164 |
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164 |
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| Sugar
cane Crushed |
M.T. |
741,813 |
|
686,467 |
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| Production
of Refined Sugar |
M.T. |
56,165 |
|
57,055 |
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| Sucrose
Content |
% |
7.58 |
|
8.26 |
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| From
the above operational performance it is observed that our mill has crushed
enormous quantity sugar cane but |
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| the
production of refined sugar was slightly less than last year due to fall in
sucrose recovery and excessive |
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| availability
of Indian variety. By the blessing of Allah the benefits of enhanced crushing
capacity under BMRE is |
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| giving
better results. |
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| Trading
results during the year depict an upsurge in volume up ward, which has
resulted mainly in slight increase in |
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| sugar
prices in local market but not in proportion to increase in price of sugar
cane. The Company also availed the |
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| opportunity
of exporting sugar under the policy announced by Government. The Company has
exported 25% of its |
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| sugar
production during the year despite the lower International prices, because of
non-performance penalty imposed |
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| by
the Government. |
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| Pre-tax
profit was Rs. 6.39 million as against loss of Rs. (5.72) million of the
previous year. After making provision for |
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| taxation
amounted to Rs. 0.151 million, the profit available for appropriations
amounted to Rs. 6.24 million. Rs. 6.00 |
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| million
transferred from general reserves. Out of the profits available for
appropriations, your board has already |
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| declared
Interim Dividend @ 10%. |
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| Your
Board recommends that INTERIM DIVIDEND may be considered as 'Final Dividend
for the year under review. |
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| The
Earning per share increased to Rs.l.24 from Rs. (2.07) of previous year. |
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| CURRENT
YEAR PROSPECTS |
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| In
the year 1999-2000 crushing season commenced on November 19, 1999 and as on
February 21, 2000 we have |
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| crushed
465,665 tones of sugar cane producing 33,220 tones of refined sugar with
sucrose content 7.22%. We will |
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| be
able to crush 550,000 MT. approximately during the current season subject to
availability of sugar cane because |
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| yield
per acre and area under cultivation has been reduced by 15% to 20% and hope
the Company will achieve the |
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| target
production despite low sucrose recovery. |
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| Endeavours
are being made for a better future and financial outcome although these would
be dependent largely on |
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| production
achievement, selling prices in local market and optimum utilization of
resources. The price of sugar in |
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| local
market is showing a rising trend and hope this will further improve in the
years to come. |
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|
| In
the current season neighbouring mills started Price War and using total
unethical and unbusiness like method for |
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| lifting
huge quantity of cane from our Natural Zones. We strongly recommend to
Government not to allow export of |
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| sugar
as we feel there is going to be a shortage of sugar and Government may have
to import at least 0.300 million |
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| M.T
of sugar in the months of July to October 2000 as country will face acute
shortage. We also recommend the |
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| revival
of zoning system, which was abolished due to political reasons in order to
improve the varieties of cane as |
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| well
as to improve the sucrose recovery. |
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| During
the year there was complete industrial peace and harmony in all areas of our
operation. Your Directors place |
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| on
record their appreciation for the honest and dedicated work of the staff and
workers of all categories and have |
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| pleasure
to mention here that during the year under review, the Management Employees
relations continued to |
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| remain
quite cordial. |
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| Your
Directors express their thanks to the officials of the Ministry of Food and
Agriculture, other Government |
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| Agencies
and Pakistan Sugar Mills Association for the support and encouragement they
have extended to your |
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| Company
and which we hope will be continued in future too. We would also like to
express our sincere thanks to all |
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| the
banks/financial institutions for their continued support and co-operation. |
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| Your
Directors are pleased to inform you that Particle Board Plant has commenced
commercial production during the |
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| current season. |
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| Your
Company entered the new millennium fully compliant Y2k requirements. |
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| Messrs
Hyder Bhimji & Co and Messrs A. R. Diwan & Co. the Auditors of the
Company retire and offer themselves |
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| for
reappointment. |
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| Statement
showing the pattern of holding of the shares held by the members of Fecto
Sugar Mills Limited as on |
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| September
30, 1999 is annexed. |
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| With
Allah's blessing we move forward with hope and determination to be more
prosperous and stronger in future. |
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By Order of the Board |
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|
(MUNAWAR ALl FECTO) |
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| KARACHI:
February 23, 2000 |
|
Chief Executive |
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|
| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed Balance Sheet of FECTO SUGAR MILLS LIMITED, as at
September 30, 1999 and |
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| the
related profit and loss account and statement of changes in financial
position (cash flow statement) together with |
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| 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 purpose of our audit and
after due verification thereof, we |
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| report that; |
|
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| (a)
in our opinion, proper books of account have been kept by the Company as
required by the Companies |
|
| Ordinance,
1984; |
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|
|
|
|
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| (b)
in our opinion; |
|
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|
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| i)
the balance sheet and profit and loss account together with the notes thereon
have been drawn-up in |
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| conformity
with the Companies Ordinance, 1984 and are in agreement with the books of
account and |
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| are
further in accordance with accounting policies consistently applied; |
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|
|
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| ii)
the expenditure incurred during the year were for the purpose of Company's
business; and |
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|
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| 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 |
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| 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 profit and the changes in financial position 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, |
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|
|
|
A. R. DIWAN & Co. |
|
HYDER BHIMJI & Co. |
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|
CHARTERED ACCOUNTANTS |
|
CHARTERED ACCOUNTANTS |
|
|
| Karachi:
the 23rd February 2000 |
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|
|
| BALANCE
SHEET AS AT 30TH SEPTEMBER, 1999 |
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|
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|
1999 |
1998 |
|
|
|
NOTE |
RUPEES |
RUPEES |
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorized |
|
|
|
| 15,000,000
ordinary shares |
|
|
|
| of Rs. 10/- each |
|
150,000,000 |
150,000,000 |
|
|
|
|
========== |
========== |
|
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|
|
|
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| Issued,
subscribed and paid up capital |
|
3 |
50,297,280 |
50,297,280 |
|
| Revenue
reserve |
|
4 |
0 |
6,000,000 |
|
| Accumulated
loss |
|
|
(41,500,778) |
(48,714,064) |
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|
|
|
------------------ |
------------------ |
|
|
|
|
8,796,502 |
7,583,216 |
|
| Sub-ordinated
loans |
|
6 |
466,000,000 |
466,000,000 |
|
| Long term loan |
|
7 |
30,000,000 |
0 |
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| Liabilities
against assets subject to finance lease |
|
8 |
78,669,283 |
37,104,799 |
|
| Deferred
liabilities |
|
9 |
17,488,093 |
33,416,885 |
|
|
|
|
|
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| CURRENT
LIABILITIES |
|
|
|
|
| Current
portion of long term liabilities |
|
10 |
59,508,341 |
41,894,965 |
|
| Short
term running finance utilized under |
|
|
|
| mark-up
arrangement |
|
11 |
72,399,065 |
134,731,755 |
|
| Creditors,
accrued and other liabilities |
|
12 |
71,177,897 |
92,225,117 |
|
| Provision
for taxation |
|
|
6,318,002 |
4,905,400 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
209,403,305 |
273,757 |
|
| Contingencies
& Commitments |
|
13 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
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| TOTAL
RUPEES |
|
|
810,357,183 |
817,862,137 |
|
|
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
assets |
|
|
14 |
532,408,169 |
511,617,023 |
|
| Capital
work-in-progress |
|
|
15 |
90,157,171 |
108,655,188 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
622,565,340 |
620,272,211 |
|
|
|
|
|
|
| Long
term investments |
|
16 |
22,537,900 |
10,037,900 |
|
| Long
term deposits |
|
|
19,374,830 |
12,125,130 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
17 |
68,272,304 |
59,379,896 |
|
| Stock-in-trade |
|
|
18 |
407,776 |
89,271,555 |
|
| Loans
and advances |
|
|
19 |
63,101,972 |
13,615,674 |
|
| Deposits,
prepayments and other receivables |
|
20 |
7,171,716 |
9,437,510 |
|
| Cash
and bank balances |
|
|
21 |
6,925,345 |
3,722,261 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
145,879,113 |
175,426,896 |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
RUPEES |
|
|
810,357,183 |
817,862,137 |
|
|
|
|
========== |
========== |
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
| KARACHI:
February 23, 2000 |
|
|
|
(MUNAWAR ALl FECTO) |
|
|
SAID AHMAD |
|
|
Chief Executive |
|
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE PERIOD ENDED 30TM SEPTEMBER, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
NOTE |
RUPEES |
RUPEES |
|
|
|
|
| Sales |
|
|
22 |
916,602,792 |
831,611,332 |
|
| Cost
of goods sold |
|
23 |
824,957,306 |
764,171,721 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
|
91,645,486 |
67,439,611 |
|
|
|
|
|
|
| Operating
expenses |
|
|
|
|
| Administrative
expenses |
|
24 |
34,034,120 |
28,294,359 |
|
| Selling
and distribution expenses |
|
25 |
14,330,457 |
1,965,947 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
48,364,577 |
30,260,306 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
|
43,280,909 |
37,179,305 |
|
| Other income |
|
|
28 |
3,029,040 |
1,391,158 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
46,309,949 |
38,570,463 |
|
|
|
|
------------------ |
------------------ |
|
| Financial
charges |
|
29 |
38,872,986 |
44,085,736 |
|
| Other charges |
|
|
30 |
1,042,880 |
211,997 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
39,915,866 |
44,297,733 |
|
|
|
|
------------------ |
------------------ |
|
| Profit/(loss)
before taxation |
|
|
6,394,083 |
(5,727,270) |
|
| Taxation |
|
|
|
(151,069) |
(4,687,841) |
|
|
|
|
------------------ |
------------------ |
|
| Profit/(loss)
after taxation |
|
|
6,243,014 |
(10,415,111) |
|
|
|
|
|
|
|
| Appropriation: |
|
|
|
| Transferred
from General Reserve |
|
|
6,000,000 |
-- |
|
| Interim
Dividend |
|
|
(5,029,728) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
7,213,286 |
(10,415,111) |
|
| Un-appropriated
(loss) b/f. |
|
|
(48,714,064) |
(38,298,953) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
(loss) carried forward |
|
|
(41,500,778) |
(48,714,064) |
|
|
|
|
========== |
========== |
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
(MUNAWAR ALl FECTO) |
|
|
SAID AHMAD |
|
|
Chief Executive |
|
|
Director |
|
|
| Dated:
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 |
|
33 |
113,716,686 |
65,456,296 |
|
| Financial
charges paid |
|
|
(44,805,874) |
(40,562,350) |
|
| Return
on term deposits |
|
|
97,807 |
38,643 |
|
| Taxes paid |
|
|
(4,736,467) |
(3,527,133) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
|
64,270,152 |
21,405,456 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Fixed
capital expenditure |
|
(53,978,825) |
(45,817,063) |
|
| Sale
proceeds of fixed assets |
|
-- |
28,500 |
|
| Increase
in long term investments |
|
(12,500,000) |
-- |
|
| (Increase)/decrease
in long term loan |
|
-- |
-- |
|
| (Increase)/decrease
in long term deposits |
|
(7,249,700) |
7,250,000 |
|
|
|
------------------ |
------------------ |
|
|
|
(73,728,525) |
(38,538,563) |
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Proceeds
of right shares |
|
-- |
-- |
|
| Proceeds
of sub-ordinated loan |
|
-- |
14,000,000 |
|
| Proceeds
of long term loan |
|
40,000,000 |
(15,147,770) |
|
| Increase
in deferred liabilities |
|
3,491,894 |
27,521,445 |
|
| Repayment
of redeemable capital |
|
(4,000,000) |
-- |
|
| Repayment
of liabilities against assets |
|
(31,579,826) |
(31,269,316) |
|
| Subject
to finance lease |
|
|
|
| Proceeds
of liabilities against assets |
|
71,337,000 |
-- |
|
| subject
to finance lease |
|
|
|
| Dividend paid |
|
|
(4,254,921) |
(58) |
|
|
|
------------------ |
------------------ |
|
|
|
74,994,147 |
(4,895,699) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
| Net
increase/(decrease) in cash and cash |
|
|
| equivalent |
|
|
65,535,774 |
(22,028,806) |
|
| Cash
and cash equivalent in the beginning |
|
|
(131,009,494) |
(108,980,688) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalent at the end of year |
|
34 |
(65,473,720) |
(131,009,494) |
|
|
|
|
========== |
========== |
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
(MUNAWAR ALl FECTO) |
|
|
SAID AHMAD |
|
|
Chief Executive |
|
|
Director |
|
|
|
|
| KARACHI:
the 23rd February, 2000. |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED 30TH SEPTEMBER, 1999 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| The
Company was incorporated in Pakistan on September 19, 1964 as a public
limited company and is |
|
| listed
at Karachi and Lahore Stock Exchanges of Pakistan. The Company is principally
engaged in the |
|
| manufacture
and sale of sugar. The Company has set up a particle board unit |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES: |
|
|
|
|
| 2.1
Accounting convention: |
|
| These
accounts -have been prepared under the historical cost convention,
modification thereto, if any, is |
|
| stated. |
|
|
| 2.2
Staff retirement benefits: |
|
| The
Company operates provident fund scheme for all its employees eligible to the
benefit. |
|
|
|
| 2.3 Taxation: |
|
|
|
| Current |
|
| Provision
for current taxation is based on taxable income al the current rates of
taxation after taking into |
|
| account
admissible tax credits and rebates, if any. |
|
|
| Deferred: |
|
| The
Company accounts for deferred taxation on all significant timing difference
using liability method. |
|
|
| 2.4
Fixed assets: |
|
|
| Company's
owned: |
|
| Operating
fixed assets are stated at cost less accumulated depreciation except freehold
land and capital |
|
