| Shahmurad Sugar Mills Limited |
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| Annual
Report 1998-99 |
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| CONTENTS |
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| COMPANY
INFORMATION |
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| NOTICE
OF MEETING |
|
| DIRECTORS'
REPORT |
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| CASH
FLOW STATEMENT |
|
| NOTES
ON ACCOUNTS |
|
| SHAREHOLDERS'
STATISTICS |
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| COMPANY
INFORMATION |
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|
| BOARD
OF DIRECTORS |
|
| MR.
ISMAIL H. ZAKARIA |
|
Chairman |
|
| MR.
YUSUF AYOOB |
|
Managing Director |
|
| MR.
SULEMAN AYOOB |
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|
| MR.
A. AZIZ AYOOB |
|
|
| MR.
ZIA I. ZAKARIA |
|
Resident Director |
|
| MR.
SALIM AYOOB |
|
|
| MR.
ZOHAIR ZAKARIA |
|
|
| MR.
NASIM BEG |
|
(N.I.T. Nominee) |
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| MS.
FARZANA MUNAF |
|
(N.I.T. Nominee) |
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|
| COMPANY
SECRETARY |
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| MR.
M. YAKOOB ADMANEY |
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| FCIS, FCMA. |
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|
|
| LEGAL
ADVISOR |
|
| DR.
RAEES M. MUSHTAQ & CO. |
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| Advocate |
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| AUDITORS |
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| A.
R. DIWAN & COMPANY |
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| Chartered
Accountants |
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| REGISTERED
OFFICE |
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| 96-A
SINDHI MUSLIM SOCIETY, |
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| KARACHI-74400 |
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| FACTORY |
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| JHOK SHARIF, |
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| TALUKA
MIRPUR BATHORO, |
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| DISTRICT
THATTA (SINDH) |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the 21st Annual General Meeting of SHAHMURAD SUGAR MILLS
LIMITED |
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| will
be held at the Registered Office of the Company at 96-A, Sindhi Muslim
Society, Karachi on Thursday, |
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| March
30, 2000 at 11:00 A.M. to transact the following business: |
|
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| 1.
To read and confirm the Minutes of the 20th Annual General Meeting of the
Company held on March |
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| 31, 1999. |
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|
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| 2.
To read and consider the Accounts for the year ended September 30, 1999 and
reports of Directors |
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| and
Auditors thereon. |
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|
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| 3.
To approve payment of cash dividend @ 7.50% i.e. Re. 0.75 per ordinary share
of Rs.10/= each for |
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| the
year ended September 30, 1999 as recommended by the Board of Directors of the
Company. |
|
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| 4.
To appoint Auditors and to fix their remuneration. |
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| 5.
To transact any other business with permission of the chair. |
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| The
Share Transfer Book of the Company will remain closed from March 21, 2000 to
March 30, 2000 (both |
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| days inclusive) |
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|
By Order of the Board |
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|
(M. YAKOOB ADMANEY) |
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| Karachi:
March 01, 2000 |
|
COMPANY SECRETARY |
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|
| NOTE: |
|
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| 1.
A member of the Company entitled to attend and vote may appoint any member as
his/her proxy |
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| to
attend and vote on his/her behalf. PROXIES MUST BE RECEIVED AT THE REGISTERED |
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| OFFICE
OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE MEETING. |
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|
|
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| 2.
CDC Account Holders will further have to follow the undermentioned guidelines
as laid down in |
|
| Circular
I dated January 26, 2000 issued by the Securities and Exchange Commission of
Pakistan. |
|
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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
person whose securities |
|
| are
in group account and their registration details are uploaded as per the
Regulations, shall |
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| authenticate
his identity by showing his Original National Identity Card (NIC) or original |
|
| passport
at the time of attending the meeting. |
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|
|
|
|
| ii)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen |
|
| signature
of the nominee shall be produced (unless it has been provided earlier) at the
time |
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| of the meeting. |
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|
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| 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
arc 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. |
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|
|
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| ii)
The proxy form shall be witnessed by two persons whose names, addresses and
NIC number |
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| shall
be 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 |
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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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|
|
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| v)
In case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen |
|
| signature
of the nominee shall be submitted (unless it has been provided earlier)
alongwith proxy |
|
| form
to the Company. |
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|
|
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| 3.
Shareholders are requested to inform the Company of any change in their
address immediately. |
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| DIRECTORS'
REPORT |
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| To: |
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| The
Shareholders: |
|
|
| We
take pleasure in submitting before you the 21St. Annual Report along with
audited accounts for the year ended |
|
| 30th
September 1999. By the grace of Almighty Allah, during the year your company
has earned a net profit of |
|
| Rs.17.865
million. After adjusting last year's un-appropriated loss of Rs.11.628
million, a sum of Rs.6.237 million |
|
| is
available which we propose to appropriate as follows:- |
|
|
| i)
Amount available for appropriation |
|
Rs. 6.237 million |
|
| ii)
Transfer from General Reserve |
|
Rs. 10.000 million |
|
| iii)
Proposed cash dividend @ 7 1/2 % |
|
Rs. (15.839) million |
|
| iv)
Un-appropriated profit carried over to Balance Sheet |
Rs. 0.398 million |
|
|
| Your
Directors propose to pay cash dividend @ 7 1/2 %. After tax earning, per
share of the company is Rs.0.85 per |
|
| share. |
|
|
| During
the year under report your mill started crushing on 11th November, 1998 and
ended on 3rd, April, 1999 with |
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| an
average crushing of 767,252 M. Tons (1998: 749,110 M. Tons) of sugarcane.
Sugar produced was to the extent of |
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| 74,055
M. Tons (1998: 81,590 M. Tons) with an average recovery of 9.677 % (1998:
10.89 % ). |
|
|
| Molasses
produced during the year was to the extent of 38,150 M. Tons (1998: 36,202 M.
Tons). |
|
|
| Although
the sugarcane crushing was 2.4 % higher than last year, Sugar produced was
9.24% lesser as compared to |
|
| last
year. The overall recovery was less in the entire Pakistan due to climatic
conditions. |
|
|
| During
the year quality premium rate was raised from 32 paisa to 50 paisa per 40 Kg
for every 0.1% over and above |
|
| 8.7
% benchmark. This increase of sugarcane price has affected the cost of
production, as the benefits available |
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| against
higher recovery of sugarcane are less than the benefits passed towards
sugarcane price. |
|
|
| Your
mill has been badly hit by the shortage of sugarcane due to number of mills
in the close vicinity. This has |
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| resulted
in the less sugarcane cultivated area available to your mill; which has
forced your mill to procure sugarcane |
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| from
far flanged areas at higher transportation cost. |
|
|
| During
the year average recovery dropped from 10.89 % to 9.67 %, as quality of
sugarcane was affected due to bad |
|
| climatic
conditions in the country |
|
|
| During
the year the amount of quality premium was to the extent of Rs. 93.605
million to the sugarcane grower on |
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| account
of higher recovery. Exports made by your company was to the extent of 19,822
M. Tons and valuable |
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| foreign
exchange earned on this account was to the extent of U.S. $ 4.855 million. |
|
|
| During
the year Mr. Hashim Ishaque, NIT nominee resigned and Farzana Monaf, NIT
nominee, was co-opted in his |
|
| place. |
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|
| COMPUTER
Y2K PROBLEM: |
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| Your
management has taken timely necessary measures for computer problem for Y2K
and is pleased to inform that |
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| no
unforeseen incident has happened at the end of the century. |
|
|
| MANAGEMENT-LABOUR
RELATIONS: |
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| We
are happy to report that management labour relations are better than earlier
year and Directors appreciate the co- |
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| operation
shown by the workers and hope the same will continue. |
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|
| STAFF: |
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| Your
Directors are pleased to place on record deep appreciation of hard work and
devotion to the duty shown by the |
|
| officers
and staff of the company. |
|
|
| AUDITORS: |
|
| M/s.
A. R. Diwan & Co., Chartered Accountants, Auditors of the Company have
retired and offered their services |
|
| for
the ensuing year. |
|
|
| FUTURE
OUTLOOK: |
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| For
the current year the Government has maintained the support price and quality
premium of sugarcane at the same |
|
| level.
Due to cyclone in the coastal belt of lower Sindh the sugarcane crop was
badly hit, which has resulted in the |
|
| shortage
of cane in the lower Sindh and resulted in abnormal increase of sugarcane
price. |
|
|
| Current
crushing season started in November 1999 and crushing up to 29th February
2000 was 619,479 M. Tons |
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| with
an average recovery of 9.73 %. Sugar produced up to 29th February 2000 was to
the extent of 59,620 M. Tons. |
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|
FOR AND ON BEHALF OF BOARD OF DIRECTORS |
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|
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|
|
|
|
(YUSUF AYOOB) |
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| Karachi:
1st March, 2000. |
|
MANAGING DIRECTOR |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of Shahmurad Sugar Mills Limited as at
September 30, 1999 and the |
|
| related
Profit and Loss Account and Cash Flow Statement, together with the notes
forming part thereof, for the year then |
|
| ended
and we state that we have obtained all the information and 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)
in our opinion, proper books of account have been kept by 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 thereon
have been drawn up in |
|
| conformity
with the Companies Ordinance, 1984 and are in agreement with the books of
account and |
|
| are
further in accordance with accounting policies consistently applied; |
|
|
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the Company's
business; and |
|
|
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the year were in |
|
| 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 |
|
| and
Profit and Loss Account and the 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 loss and |
|
| the
cash flows for the year then ended; and |
|
|
|
|
| (d)
in our opinion, no Zakat was deductible at source under Zakat and Ushr
Ordinance, 1980. |
|
|
|
|
|
A. R. Diwan & CO. |
|
| Karachi:
March 1, 2000. |
|
Chartered Accountants |
|
|
|
|
| BALANCE
SHEET AS AT 30TH SEPTEMBER, 1999 |
|
|
|
|
|
|
|
Note |
1999 |
1998 |
|
|
|
|
|
(Rupees in
thousand) |
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
Capital |
|
|
|
| 25,000,000
ordinary shares of Rs. 10.00 each |
|
250,000 |
250,000 |
|
|
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid-up capital |
|
2 |
211,187 |
211,187 |
|
|
|
|
|
|
| Reserve: |
|
|
|
| General Reserve |
|
|
82,000 |
92,000 |
|
|
|
|
|
| Unappropriated
profit/(loss) |
|
|
398 |
(11,628) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
82,398 |
80,372 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
293,585 |
291,559 |
|
| REDEEMABLE
CAPITAL |
|
3 |
38,276 |
56,528 |
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
| TO
FINANCE LEASE |
|
4 |
7,600 |
6,983 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
5 |
59,390 |
80,366 |
|
|
|
|
| CURRENT
LIABILITIES AND PROVISIONS |
|
|
| Short
term running finance and borrowings |
|
6 |
283,081 |
447,657 |
|
| Current
maturity of redeemable capital, long term |
|
|
|
| loan
and finance lease |
|
7 |
45,242 |
56,204 |
|
| Creditors
accrued and other liabilities |
|
8 |
91,059 |
83,942 |
|
| Taxation |
|
|
3,150 |
2,343 |
|
| Proposed
Dividend |
|
|
15,838 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
438,370 |
590,146 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
9 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
837,221 |
1,025,582 |
|
|
|
|
========== |
========== |
|
|
| FIXED
ASSETS |
|
|
|
| Operating
assets |
|
10 |
546,198 |
570,865 |
|
|
|
|
|
| LONG
TERM INVESTMENT |
|
11 |
5,000 |
5,000 |
|
|
|
|
|
| LONG
TERM LOANS AND ADVANCES |
|
12 |
652 |
346 |
|
| LONG
TERM DEPOSITS |
|
13 |
2,998 |
5,931 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
14 |
82,403 |
82,558 |
|
| Stock-in-trade |
|
15 |
105,991 |
196,735 |
|
| Trade debts |
|
|
|
-- |
28,480 |
|
| Loans,
advances, prepayments and other receivables |
16 |
54,433 |
47,249 |
|
| Duty draw back |
|
|
-- |
74,250 |
|
| Bank
and cash balance |
|
17 |
39,546 |
14,168 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
282,373 |
443,440 |
|
|
|
|
------------------ |
------------------ |
|
|
|
837,221 |
1,025,582 |
|
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
YUSUF AYOOB |
|
ZIA I. ZAKARIA |
|
ZOHAIR ZAKARIA |
|
| Karachi:
March l, 2000 |
Managing Director |
|
Director |
|
Director |
|
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR |
|
| ENDED
30TH SEPTEMBER, 1999 |
|
|
|
Note |
1999 |
1998 |
|
|
|
(Rupees
in thousand) |
|
|
|
|
| Sales |
|
18 |
1,258,847 |
1,459,797 |
|
| Cost of sales |
|
19 |
1,081,360 |
1,269,138 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
177,487 |
190,659 |
|
|
|
|
|
|
| Administration
expenses |
|
|
20 |
47,404 |
50,568 |
|
| Selling
and Distribution expenses |
|
21 |
24,601 |
31,758 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
72,005 |
82,326 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
105,482 |
108,333 |
|
| Other income |
|
22 |
27,847 |
284 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
133,329 |
108,617 |
|
|
|
|
------------------ |
------------------ |
|
| Financial
charges |
|
23 |
107,889 |
122,130 |
|
| Other charges |
|
24 |
1,977 |
754 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
109,866 |
122,884 |
|
|
|
|
------------------ |
------------------ |
|
| Profit/(loss)
before taxation |
|
|
23,463 |
(14,267) |
|
| Taxation |
|
25 |
5,599 |
70 |
|
|
|
|
------------------ |
------------------ |
|
| Profit/(loss)
after taxation |
|
|
17,864 |
(14,337) |
|
| Unappropriated
(loss) / profit brought forward |
|
(11,628) |
2,709 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
6,236 |
(11,628) |
|
|
|
|
| Appropriations |
|
|
|
| Transfer
from General Reserve |
|
|
|
10,000 |
-- |
|
| Proposed
cash dividend @ 7.50% (1998: Nil) |
|
|
(15,838) |
-- |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
(5,838) |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit/(loss) carried forward |
|
|
398 |
(11,628) |
|
|
|
|
========== |
========== |
|
| Earning
per Shares - Basic and diluted |
|
31 |
0.85 |
(0.68) |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
YUSUF AYOOB |
|
ZIA I. ZAKARIA |
|
ZOHAIR ZAKARIA |
|
|
Managing Director |
|
Director |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30TH SEPTEMBER, 1999 |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
(Rupees in
thousand) |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Profit/(loss)
before taxation |
|
23,463 |
(14,267) |
|
| Adjustment
for non cash charges and other items. |
|
|
|
| Depreciation |
|
24,657 |
27,533 |
|
| Profit
on sale of operating assets |
|
(788) |
(284) |
|
| Provision
for staff retirement benefits |
|
1,492 |
1,345 |
|
| Deferred
liability |
|
(22,129) |
1,405 |
|
| Financial
charges |
|
107,889 |
122,130 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated before working capital changes |
|
134,584 |
137,862 |
|
|
|
|
|
| Decrease
/ (Increase) in current assets |
|
|
| Stores
and spares |
|
155 |
(7,843) |
|
| Stock- in - trade |
|
|
90,744 |
166,386 |
|
| Trade debts |
|
|
28,480 |
(28,480) |
|
| Loans,
advances, prepayments and |
|
|
|
| other
receivable (excluding income tax) |
|
(5,880) |
(16,088) |
|
| Duty
draw back receivable |
|
74,250 |
(74,250) |
|
|
|
------------------ |
------------------ |
|
|
|
187,749 |
39,725 |
|
| (Decrease)/increase
in current liabilities |
|
|
| Creditors
accrued and other liabilities |
|
|
| (excluding
financial charges & unclaimed dividend) |
|
(130) |
(37,815) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operation |
|
|
322,203 |
139,772 |
|
|
|
|
|
|
| Taxes paid |
|
|
(6,095) |
(15,214) |
|
| Payment
for staff retirement benefits |
|
|
(339) |
(235) |
|
| Financial
charges paid (including interest income) |
|
|
(100,635) |
(122,723) |
|
| Long
term loans advances |
|
|
(306) |
96 |
|
| Long
term deposits |
|
|
2,933 |
6,777 |
|
|
|
|
------------------ |
------------------ |
|
|
|
217,761 |
8,473 |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Fixed
capital expenditure |
|
|
(679) |
(2,198) |
|
| Sale
proceeds of operating assets |
|
1,477 |
340 |
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow/(outflow) from investing activities |
|
798 |
(1,858) |
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Redeemable
capital |
|
|
20,000 |
-- |
|
| Obligation
under finance lease |
|
|
7,606 |
-- |
|
| Repayment
of redeemable capital, long term loans |
|
|
|
|
| and
finance lease |
|
|
(56,204) |
(71,245) |
|
| Short
term running finance and borrowings |
|
|
(164,576) |
89,302 |
|
| Dividend |
|
|
|
(7) |
(15,778) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow)/inflow from financing activities |
|
|
(193,18l) |
2,279 |
|
|
|
|
------------------ |
------------------ |
|
| Net
increase / (decrease) in cash and cash equivalents |
|
25,378 |
8,894 |
|
| Cash
and bank balance at the beginning of the year |
17 |
14,168 |
5,274 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and bank balance at the end of the year |
|
|
39,546 |
14,168 |
|
|
|
|
========== |
========== |
|
|
|
YUSUF AYOOB |
|
ZIA I. ZAKARIA |
|
ZOHAIR ZAKARIA |
|
|
Managing Director |
|
Director |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR |
|
| ENDED
30TH SEPTEMBER, 1999 |
|
|
|
| LEGAL
STATUS AND OPERATIONS |
|
| The
Company is a public company incorporated in Pakistan under the Companies Act,
1913 (now Companies |
|
| Ordinance,
1984). Its shares are quoted on Karachi Stock Exchange in Pakistan and is
principally engaged |
|
| in
the production and sale of sugar. |
|
|
| Summary
of Significant accounting policies: |
|
|
| 1.1
Basis for preparation of the accounts: |
|
| These
financial statements have been prepared in compliance with the requirements
of International |
|
| Accounting
Standards as adopted by the Institute of Chartered Accountants of Pakistan
which are |
|
| applicable
to the Company. |
|
|
| 1.2
Accounting convention: |
|
| These
accounts have been prepared under the historical cost convention except that
certain exchange |
|
| differences
have been included in fixed assets referred to in Note 1.4. |
|
|
| 1.3
Staff retirement benefits: |
|
|
