| Pangrio Sugar Mills Limited |
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| CONTENTS |
|
|
| 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 Financial Position |
|
| Notes
to the Accounts |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS: |
MR. SAJID HUSSAIN NAQVI |
Chairman & Chief
Executive |
|
|
|
BEGUM AKHTER ABID |
|
|
|
MS. NAHEED ZAFFAR MIRZA |
|
|
|
MRS. YASMEEN BAIG |
|
|
|
MR. HIMMADULLAH BEG |
|
|
|
MR. ABBAS ALLY AGHA |
|
|
|
MR. ABDUL LATIF UQAILI
(ICP) |
|
|
|
MR. KEMAL SHOAIB (NIT) |
|
|
|
MR. HAMMAD MEHMOOD (NIT) |
|
|
|
RAO MOHAMMAD SHAFAAT
(NDFC-Nominee) |
|
|
|
|
| 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 |
|
|
|
NATIONAL DEVELOPMENT
FINANCE CORPORATION |
|
|
|
BANKERS EQUITY LIMITED |
|
|
|
MUSLIM COMMERCIAL BANK
LTD. |
|
|
| LEGAL
ADVISER: |
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 |
|
|
|
SINDH. |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETINGS |
|
|
| Notice
is hereby given that the 14th & 15th Annual General Meetings of the
Company will be held |
|
| on
Tuesday, March 28, 2000 at 3.00 p.m. at 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 13th Annual General Meeting of the Company held
on March 28, |
|
| 1998
and Extra-Ordinary General Meeting of the Company held on December 18, 1999. |
|
|
|
|
| 2.
To receive, consider and adopt the Annual Audited Accounts alongwith the
Directors' and |
|
| Auditors'
Reports of the Company for the years ended September 30, 1998 & September
30, 1999. |
|
|
|
|
| 3.
To appoint Auditors of the Company for the years ending September 30, 2000
and fix their |
|
| remuneration.
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 06, 2000 |
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The Share Transfer Books of the Company will remain closed an no transfer of
shares will be |
|
| accepted
for registration from March 19, 2000 to March 28, 2000. (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 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 and change in address immediately. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| Dear
Shareholders: |
|
|
| We
congratulate the shareholders that the management of the company has been
entrusted with them |
|
| by
the Order of the Supreme Court of Pakistan and on behalf of the Directors, it
is my pleasure to |
|
| welcome
you to the 14th Annual General Meeting of the Company. It is my privileged
honour to |
|
| present
you the financial and operating results alongwith the audited accounts for
the year ended |
|
| September
30, 1998. |
|
|
| APPOINTMENT
OF RECEIVER |
|
| During
the year the bank accounts of the Company were made inoperative and the
assets of the |
|
| Company
were frozen by the Order of the Honourable Lahore High Court (Ehtesab Bench)
on April |
|
| 28, 1998. |
|
|
| An
appeal was made against this order in which affects of this order on the
shareholders and the |
|
| cane
growers of the area were submitted to the court, as a result the Receiver was
appointed vide |
|
| order
dated 21.7.1998. The order said, "Receiver is directed to take over the
management and control |
|
| of
the Mills. All financial responsibilities shall be incurred and discharged
under his signatures. He |
|
| will
be also responsible for operating all accounts, dealing with all departments
and persons till |
|
| further orders". |
|
|
| Mr.
Aftab Ahmed, Senior Vice President of NDFC, took charge of the mills as
Receiver on August |
|
| 21, 1998. |
|
|
| PERFORMANCE
REVIEW |
|
| The
Operating results of your company are as under:- |
1997-98 |
1996-97 |
|
| Season Started |
|
|
31-10-97 |
12-11-96 |
|
| Season Closed |
|
|
06-04-98 |
31-03-97 |
|
| Days Worked |
|
|
158 |
140 |
|
| Sugar
Cane Curshing (Tons) |
|
347,805 |
167,900 |
|
|
(Monds) |
|
9,318,508 |
4,498,420 |
|
|
|
|
|
| Sugar
Recovery (%) |
|
10.704 |
10.300 |
|
| Sugar
Production (Tons) |
|
37,225 |
17,278 |
|
| Molasses
Recovery (%) |
|
4.888 |
5.189 |
|
| Molasses
Production (Tons) |
|
17,000 |
8,705 |
|
|
| The
crop situation during the year was much better as is evident from the
comparative results. |
|
| Adequate
supply of water with conducive sugarcane growing weather helped in a good
crop harvest. |
|
| The
support price of sugarcane was raised by the Government from Rs. 24.50 to Rs.
36.00 per 40 kg, |
|
| to
give further incentive to the growers for cultivation of sugarcane, as there
was always a demand |
|
| and
supply gap due to unplanned horizontal and vertical expansion of milling
capacity, necessitating |
|
| smooth
supply of sugarcane. |
|
|
| It
was however, unfortunate that though the rates of sugarcane and other inputs
keeps on rising, |
|
| there
is an inadequate rise in the rate of sugar and infact a sharp fall in the
rates of the byproducts, |
|
| due
to ever rising sugar production. Mills such as yours who are denied all sorts
of financial facilities |
|
| due
to strigent SBP regulations have to unload their stocks during the pendency
of the milling/ |
|
| harvesting
time to pay the purchase price of sugar cane, does not benefit from the
post-season price |
|
| boom,
as there is hardly any stocks left to reap the benefit of higher prices.
During the year under |
|
| review
also, no banks or DFIs extended any helping hand, all the financial
institutions were adamant |
|
| in
realization of their dues, without realizing the impact of such drain of
funds to an economic entity |
|
| such
as yours. We must emphasize here that if the financial institutions do not
come with terms with |
|
| the
depression set in the economy and provide a helping hand in overcoming the
recession, the |
|
| country
would further be entangled into economic crises. |
|
|
| We
take this opportunity to suggest to the Government some initiatives for the
sugar industry for |
|
| their
economic revival: |
|
|
| a)
Complete moratorium on recovery of principal amount for next five years; |
|
| b)
Reduction in mark-up rates by 5% on short-term borrowings; |
|
| c)
Mandatory purchase by government of some portion of sugar at the prior year
average rate of |
|
| that
particular sugar mill; |
|
| d)
Zoning the area of a sugar mill; |
|
| e)
Reduction of some of the tariffs payable by mills. |
|
|
| FINANCIAL
RESULTS: |
|
|
1997-98 |
1996-97 |
|
| Loss
for the year |
|
|
(64,007,925) |
(125,228,767) |
|
| Taxation |
|
|
(3,099,937) |
(2,986,346) |
|
|
|
|
------------------ |
------------------ |
|
|
|
(67,107,862) |
(128,215,113) |
|
| Accumulated
Loss brought forward |
|
|
(564,821,746) |
(436,606,633) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
Loss carried forward |
|
|
(631,929,608) |
(564,821,746) |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| SEASON
1998-99 |
|
| The
season was operated by the Receiver. We are conducting the Annual General
Meeting (AGM) |
|
| of
the financial year ended September 30, 1999 also in the current AGM, as such
a detailed review |
|
| is
available in the Directors' Report for the year ended September 30, 1999. |
|
|
| AUDIT
REPORT |
|
|
| a)
The auditors have shown doubts on the going concern ability of the company,
the management |
|
| is
however confident that the present phase will be overcome by the company. The
banks and |
|
| DFIs
are being persuaded to renegotiate the rescheduling packages and withdraw
suits. The |
|
| results
of such endeavors are encouraging. |
|
|
|
|
|
| b)
The long-term loan had been arranged by the directors at the time of
take-over from previous |
|
| management. |
|
|
|
|
| c)
Negotiations are also in progress with NDFC for rescheduling and the company
has paid a |
|
| further
amount of Rs.21 million, apart from the payment of Rs.16 million at the time
of change |
|
| of management |
|
|
| d)
Growers are resident in remote areas and are unfamiliar with paper work, as
such they are |
|
| reluctant
to confirm balance. The company cannot force the issue as the growers may get |
|
| agitated.
Trade debtors are being pursued. |
|
|
|
|
| The
matter regarding the Central Excise duty was decided in favour of the
company, however, the |
|
| department
has not refunded the amount to the company, other matters raised are also
being resolved |
|
| in
the interest of the company. |
|
|
| AUDITORS |
|
| The
present Auditors - Messrs. M. Yousuf Adil Saleem & Co., Chartered
Accountants, retire and offer |
|
| their
services for the ensuing year. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| The
pattern of shareholding as on September 30, 1998 is annexed. |
|
|
| EMPLOYERS,
SHAREHOLDERS, BANKERS & DFIs |
|
| We
would like to take this opportunity to convey our deep appreciation to the
shareholders, the |
|
| workers,
staff and officers of the Company for their patience, tolerance and
forbearance, as well as |
|
| the
assistance and cooperation extended 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. |
|
|
|
|
On behalf of the board |
|
|
|
|
|
|
|
|
|
SAJID H. NAQVI |
|
| Karachi:
January 26, 2000 |
|
Chairman & Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of Pangrio Sugar Mills Limited as at
September 30, |
|
| 1998
and related Profit and Loss Account and Statement of Changes in Financial
Position (cash flow |
|
| statement),
together with the notes forming part thereof, for the year ended on that date
and we state |
|
| that,
we have obtained all the information and explanations which to the best of
our knowledge and |
|
| belief
were necessary for the purposes of our audit and, after due verification
thereof, we report that: |
|
|
| a.
The Company has incurred a net loss of Rs. 67.108 million during the year and
the net |
|
| capital
deficiency has increased to Rs. 523.430 million, current liabilities exceed
current |
|
| assets
by Rs. 275.282 million and total liabilities exceeded total assets by Rs.
523.430 million. |
|
| The
major lenders of the Company have filed cases for recovery of their dues.
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 necessary should the |
|
| Company
be unable to continue as a going concern; |
|
|
|
|
|
| b.
Confirmation of balance in respect of long term loan - other Rs.39.5 million
has not been |
|
| received
therefore, the balance remained unconfirmed; |
|
|
|
|
|
| c.
Confirmation of balances and statement of accounts in respect of redeemable
capital from |
|
| NDFC
have not been received (except the portion of LMM loan for which NDFC has |
|
| filed
suit for recovery), therefore, the balance and accruals thereon remained
unconfirmed |
|
| and
unverified (Refer Note No.6.3); |
|
|
|
|
| d.
Confirmation of balances of growers liabilities (Note No.8) and trade debtors
(Note |
|
| No.13),
have 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 forming
part |
|
| thereof
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 accordance 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, except for the financial effect of the matters referred to in para (a) to
(d) above and |
|
| Note
Nos. 7, 9.1, 9.2, 9.3 and 9.4, regarding settlement of amount due to Banks,
pending |
|
| excise
duty case, charges and rebates on finance obtained from NDFC and tax and |
|
| additional
tax claim on non-deduction of tax at source respectively, the balance sheet, |
|
| profit
and loss account and the statement of changes in financial position (cash
flow |
|
| statement),
together with the notes thereon, 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, 1998 and of
the loss |
|
| and
the changes in financial position for the year then ended; and |
|
|
| h.
In our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, |
|
| 1980. |
|
|
|
|
| Without
further qualifying our report we would like to draw the attention of the
Members |
|
| towards
the facts that during the year the Honourable High Court freezed the assets
and accounts |
|
| and
then appointed Receiver by the order dated July 21, 1998 under the Ehtesab
Act, 1997 (Refer |
|
| Note No.l.2). |
|
|
|
| Karachi. |
|
|
M. YOUSUF ADIL SALEEM & CO., |
|
| Dated:
January 25, 2000 |
|
CHARTERED ACCOUNTANTS |
|
|
|
| PATTERN
OF SHAREHOLDINGS |
|
| AS
AT 30TH SEPTEMBER 1998 |
|
|
| No. of |
Shareholding |
Total Shares |
Percentage |
|
|
| Shareholders |
From |
To |
Held |
|
|
|
|
| 1740 |
1 |
100 |
174,000 |
1.60 |
|
| 397 |
101 |
500 |
144,200 |
1.33 |
|
| 332 |
501 |
1000 |
310,000 |
2.86 |
|
| 384 |
1001 |
5000 |
889,250 |
8.20 |
|
| 105 |
5001 |
10000 |
671,100 |
6.19 |
|
| 4 |
10001 |
15000 |
57,700 |
0.53 |
|
| 1 |
15001 |
20000 |
16,000 |
0.15 |
|
| 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 |
|
| 1 |
145001 |
150000 |
146,400 |
1.35 |
|
| 2 |
160001 |
175000 |
336,700 |
3.10 |
|
| 4 |
500001 |
815000 |
2,227,450 |
20.53 |
|
| 2 |
1599001 |
1810000 |
3,431,900 |
31.63 |
|
| ------------------ |
|
------------------ |
------------------ |
|
| 3010 |
|
10,850,000 |
100.00 |
|
| ========== |
|
========== |
========== |
|
|
| CATEGORIES
OF SHARES AND SHAREHOLDERS |
|
|
|
|
No. of |
Total Shares |
Percentage |
|
| Particulars |
|
Shareholders |
Held |
|
|
|
| Individual |
|
2,997 |
5,825,250 |
53.69 |
|
| Investment
Companies |
|
6 |
3,910,700 |
36.04 |
|
| Insurance
Companies |
|
5 |
300,200 |
2.77 |
|
| Joint
Stock Companies |
|
1 |
100 |
0.00 |
|
| Financial
Institutions |
|
1 |
813,750 |
7.50 |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
3,010 |
10,850,000 |
100.00 |
|
|
|
========== |
========== |
========== |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
|
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 |
|
|
108,500,000 |
108,500,000 |
|
| Accumulated
loss |
|
|
(631,929,608) |
(564,821,746) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(523,429,608) |
(456,321,746) |
|
| PARTICIPATION
RESERVE FOR ISSUE |
|
4 |
73,328,776 |
73,328,776 |
|
| OF
CONVERTIBLE SHARES |
|
|
|
|
|
|
|
|
| SURPLUS
ON REVALUATION |
|
5 |
281,803,020 |
281,803,020 |
|
| OF
FIXED ASSETS |
|
|
|
|
|
|
|
| REDEEMABLE
CAPITAL |
|
6 |
225,749,440 |
236,844,222 |
|
|
|
|
|
| LONG
TERM LOANS - OTHERS |
|
|
39,469,525 |
58,000,000 |
|
| Unsecured
- interest free |
|
|
|
|
|
| DEFERRED
LIABILITY |
|
|
| Staff gratuity |
|
|
|
4,109,880 |
4,243,418 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term borrowings |
|
7 |
62,129,885 |
46,774,779 |
|
| Current
portion of Redeemable Capital |
|
|
69,461,195 |
45,782,808 |
|
| Creditors,
accrued and other liabilities |
|
8 |
230,434,166 |
189,820,020 |
|
| Taxation |
|
|
9,862,419 |
9,462,482 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
371,887,665 |
291,840,089 |
|
| CONTINGENCIES |
|
9 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
472,918,698 |
489,737,779 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| OPERATING
ASSETS |
|
10 |
375,957,626 |
416,226,863 |
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
355,874 |
314,874 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
11 |
30,878,816 |
31,019,725 |
|
| Stock in trade |
|
12 |
27,345,778 |
|
| Trade debtors |
|
|
|
| Un
secured-considered good |
|
13 |
5,743,607 |
13,125,617 |
|
| Loans
and advances |
|
14 |
30,363,381 |
28,441,876 |
|
| Deposits
and prepayments |
|
|
395,173 |
-- |
|
| Cash
and bank balances |
|
15 |
1,878,443 |
608,824 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
96,605,198 |
73,196,042 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
472,918,698 |
489,737,779 |
|
|
|
|
|
========== |
========== |
|
| The
annexed notes from 1 to 26 form an integral part of these accounts. |
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1998 |
|
|
|
|
1998 |
1997 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Sales |
|
16 |
565,333,798 |
325,224,916 |
|
| Cost
of goods sold |
|
17 |
535,176,107 |
363,521,559 |
|
|
|
|
------------------ |
------------------ |
|
| Gross
Profit / (loss) |
|
|
30,157,691 |
(38,296,643) |
|
|
|
|
|
|
|
| Operating
expenses |
|
|
|
|
| Administration |
|
18 |
15,606,294 |
12,179,197 |
|
| Selling |
|
19 |
690,485 |
797,657 |
|
| Financial |
|
20 |
13,233,629 |
13,922,667 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(29,530,408) |
(26,899,521) |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit/(loss) |
|
|
627,283 |
(65,196,164) |
|
| Other
allocation and charges |
|
21 |
(64,771,428) |
(60,073,162) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
(64,144,145) |
(125,269,326) |
|
| Other income |
|
22 |
136,220 |
40,559 |
|
|
|
|
------------------ |
------------------ |
|
| Loss
before taxation |
|
(64,007,925) |
(125,228,767) |
|
|
|
|
| Taxation |
|
|
|
| Current |
|
|
2,452,000 |
1,450,000 |
|
| Prior Years' |
|
|
647,937 |
1,536,346 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(3,099,937) |
(2,986,346) |
|
|
|
|
------------------ |
------------------ |
|
| Loss
after taxation |
|
|
(67,107,862) |
(128,215,113) |
|
| Accumulated
loss brought forward |
|
|
(564,821,746) |
(436,606,633) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
loss carried forward |
|
|
(631,929,608) |
(564,821,746) |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes from 1 to 26 form an integral part of these accounts. |
|
|
|
|
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
