| MIRPURKHAS SUGAR MILLS LIMITED |
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| ANNUAL
REPORT 1996 |
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| CONTENTS |
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| Board of Directors |
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| Notice
of Annual General Meeting |
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| Directors' Report |
|
| Graphs |
|
|
| Ratio
Analysis on Accounts |
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| Auditors'
Report |
|
| Balance
Sheet |
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| Profit & Loss Account |
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| Cash
Flow Statement |
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| Notes to the Accounts |
|
| Pattern
of Shareholding |
|
| Proxy |
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|
| BOARD
OF DIRECTORS |
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| CHAIRMAN |
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|
MR. MOHAMMED FARUQUE |
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| CHIEF
EXECUTIVE/ |
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| MANAGING
DIRECTOR |
|
MR. MAHMOOD FARUQUE |
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| DIRECTORS |
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MR. IQBAL FARUQUE |
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MR. ZAHID FARUQUE |
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MR. AKBARALI PESNANI |
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MR. ASLAM FARUQUE |
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SAHIBZADA MIRZA MUBARAK
AHMAD |
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MR. BEHRAM HASSAN
(I.C.P.) |
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MR. SHAMSHAD AHMAD
(N.I.T.) |
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| AUDITORS' |
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HYDER BHIMJI & CO. |
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CHARTERED ACCOUNTANTS |
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KARACHI. |
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| REGISTERED
OFFICE |
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MODERN MOTORS HOUSE |
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BEAUMONT ROAD |
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KARACHI. |
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| FACTORY |
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JAMRAO, DIST. MIRPURKHAS |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| NOTICE
IS HEREBY GIVEN that the 32nd Annual General Meeting of this Company will be
held on Wednesday, |
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| March
20, 1997 at 4.00 p.m. at the Registered Office of the Company at Modern
Motors House, Beaumont Road, |
|
| Karachi
to transact the following business: |
|
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| 1.
To receive and consider the Report of the Directors, Statement of Accounts
and the Balance Sheet for |
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| the
year ended September 30, 1996 with the Auditors' Report thereon. |
|
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| 2.
To declare final dividend @ Rs. 2.50 per share as recommended by the
Directors. |
|
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| 3.
To appoint Auditors for the ensuing year and to fix their remuneration. |
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By Order of the Board |
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| NOTE: |
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| 1.
A member eligible to attend and vote at the AGM is entitled to appoint
another member as his proxy |
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| to
attend and vote in his stead. Proxies to be effective must be in writing in
the usual form and must |
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| be
received by the Company 48 hours before the Meeting. |
|
|
| 2.
The registers of members will be closed from Wednesday, March 13, to
Wednesday, March 20, |
|
| 1997,
inclusive and no transfers will be registered during that time. The shares
received in order upto |
|
| the
closing office hours of March 12, 1997, shall qualify to the above dividend. |
|
|
| 3.
The shareholders are requested to notify the Company if there is any change
in their address. |
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| DIRECTORS'
REPORT TO THE MEMBERS |
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| FOR
THE YEAR ENDED SEPTEMBER 30, 1996. |
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| The
Directors have pleasure in presenting to you 32nd Annual Report together with
the audited accounts for the |
|
| year
ended September 30, 1996. |
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| By
the Grace of Allah, financial results for the year under review improved over
the last year. |
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|
| Production |
|
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| The
mill commenced crushing on 16.10.1995 and closed on 13.03.1996 after
operating 149 days against 157 |
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| days
in 1994-95. The production data and other salient features for the reporting
year as well as the comparative |
|
| statement
for the last year are as follows: |
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|
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|
Year ended |
|
Year ended |
|
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|
30-09-96 |
|
30-09-95 |
|
| Sugarcane
Crushed: |
|
|
| Tonnes |
|
347,697.93 |
|
522,237.17 |
|
| Maunds |
|
9,315,592 |
|
13,991,882 |
|
| Sucrose
percentage |
|
9.88 |
|
9.11 |
|
| Sugar
production (Tonnes) |
|
34,367.05 |
|
47,465 |
|
| Molasses
production (Tonnes) |
18,400 |
|
28,846 |
|
| Average
crushing per day (Tonnes) |
2,333.54 |
|
3,326.35 |
|
|
| The
production of sugar was lower primarily because of less availability of
sugarcane to your mills. However, |
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| higher
sucrose recovery helped to produce 34,367.05 tonnes of sugar during the year
under review. |
|
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| The
company showed an improvement in profitability over last year due to
operating efficiencies and continued |
|
| efforts
of the management to control costs. For 1995-96 season, the Government
increased minimum support |
|
| price
of sugarcane from Rs. 20.75 per 40 Kgs to Rs. 21.75 per 40 Kgs. As reported
at the last Annual General |
|
| Meeting
the sugarcane was in short supply. The growers slowed down harvesting with
the intention to pressurize |
|
| mills
for higher price and transport subsidies. We had no alternative but to agree
to their demand. |
|
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| As
in the previous years, your Company provided loans and advances for
fertilizers to cane growers with the |
|
| object
of ensuring availability of improved quality of sugarcane with higher yields. |
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| Operating
Results: |
|
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| The
sales revenue for the year after deducting brokerage amounted to Rs. 566.987
million inclusive of excise |
|
| duty
amounting to Rs. 72.171 million compared to Rs. 596.949 million for the last
year. The cost of sales comes |
|
| to
Rs. 469.726 million which leaves us a gross profit of Rs. 97.262 million i.e.
17.15% of net sales compared to |
|
| 15.17%
last year. Deduction are made from the gross profit on account of
administration expenses Rs. 26.864 |
|
| million,
selling and distribution expenses Rs. 1.892 million, financial charges Rs.
6.908 million, other charges |
|
| Rs.
5.144 which includes WPPF Rs. 3.605 million, WWF Rs. 1.479 million. After
adding other income amounting |
|
| to
Rs. 10.562 million net profit before tax comes to Rs. 67.016 million (11.82%
of net sales) for the year. Provision |
|
| has
been made for the taxation at Rs. 29.579 million, thus leaving us a net
profit after tax of Rs. 37.437 million |
|
| (6.60%
of net sales) for the year. Earning per share comes to Rs. 5.86 (Rs. 3.90 -
1994-95). The total contribution |
|
| to
the exchequer on account of Excise Duty and income tax comes to Rs. 101.75
million (17.94% of gross sales) |
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| compared
to Rs. 83.911 million for 1994-95. Other comparative figures are reflected in
the Financial Statements. |
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|
| FINANCIAL
RESULTS |
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| Your
Directors propose to appropriate the profit as follows: |
|
|
| -
Net Profit for the year |
|
37,437,026 |
|
|
| -Add:
Unappropiiated profit |
|
|
|
| brought
forward |
|
620,472 |
|
|
|
---------- |
|
|
|
38,057,498 |
|
| Appropriation: |
|
========== |
|
| Proposed
Cash Dividend |
|
15,972,000 |
|
| Transfer
to General Reserve |
22.000.000 |
|
| Balance
Carried Forward |
|
85,498 |
|
|
| PROSPECTS
FOR 1996-97: |
|
|
| The
current crushing season commenced on 08.11.1996 and as of 19th February, 1997
we have crushed |
|
| 261,169
tonnes of sugarcane producing 26,355 tonnes of sugar at 10.33% recovery. The
sugarcane price has |
|
| again
been raised by the Government from Rs. 21.75 to Rs. 24.50 per 40 Kgs which
will increase the cost of |
|
| production
of sugar. The estimated quantum of sugarcane to be crushed during the current
crushing season will |
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| be
more or less the same as last year due to the following reasons: |
|
|
| a)
Diversification to cotton cultivation by sugarcane growers due to economic
reasons, thus curtailing their area |
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| under
sugarcane cultivation as compared with the previous season. |
|
|
| b)
Higher price of sugarcane on account of the growers having restored to
slowing down the harvesting, |
|
| demanding
extra payments coupled with increase in crushing capacities of some of the
sugar mills in the province, |
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| without
corresponding increase in acreage under sugarcane cultivation, caused reduced
availability of sugarcane. |
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| Fortunately
higher sucrose recovery estimated around 10.30% may result in improved
production over the |
|
| previous
year. Some of the mills in our adjoining areas succumbed to the growers
demand and raised price. We |
|
| were
left with no alternative but to match with other mills. |
|
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| c)
Reduction in sugarcane supply due to addition of two new sugar mills in
Mirpurkhas and one in District |
|
| Hyderabad. |
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|
| PROSPECTS
FOR 1997-98: |
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| For
the last three years sugarcane crop is under heavy pressure due to
introduction of high yield cotton varieties |
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| fetching
prices from Rs. 700 to Rs. 900/40 Kg. Moreover cotton is a short period crop
requiring less water, labour |
|
| and inputs |
|
|
| Low
rains of 1996 monsoon season, high temperature, high price, and condition
conducive to cotton crop |
|
| adversely
affected sugarcane cultivation in the area. To encourage cane cultivation we
have started giving seed |
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| on
subsidized rates and fertilizer loans to growers. |
|
|
| Three
new factories have already come into operation and with Bachani Sugar Mills
in Tando Allah Yar expected |
|
| to
commence production in 1997-98, the sugarcane supply will again remain short
and thus it may be a difficult |
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| year for us. |
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|
| AUDITORS' |
|
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| The
Auditors' of the Company, Messrs Hyder Bhimji & Co., retire and being
eligible offer themselves for |
|
| reappointment. |
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|
| GENERAL |
|
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| Our
special thanks are due to our team of dedicated managers and other
executives, supervisors and hard |
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| working
workers, who continue to put in their best efforts for achieving optimum
results year after year. |
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|
| RATIO
ANALYSIS ON ACCOUNTS |
|
| for
the year ended September 30, 1996 |
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|
|
|
| PROFITABILITY |
|
|
|
1996 |
1995 |
|
| Gross
Profit (percentage) |
|
|
|
|
| Operating
Profit (percentage) |
|
|
17.15 |
15.17 |
|
| Profit
Before Tax (percentage) |
|
|
12.08 |
8.82 |
|
| Net
Profit After Tax (percentage) |
|
|
11.81 |
6.60 |
|
| Growth
in Net Profit After Tax (percentage) |
|
6.60 |
4.25 |
|
| Net
Profit to Share Holder Equity (Average after tax) (percentage) |
47.38 |
48.87 |
|
| Earning
Per Share (Before Tax) |
|
|
19.95 |
15.47 |
|
| Earning
Per Share (After Tax) |
|
|
10.49 |
6.16 |
|
| Net
Profit to Total Assets (Average After Tax) (percentage) |
|
5.86 |
3.98 |
|
| (Decrease)/Increase
in Sales (Gross percentage) |
|
10.25 |
6.99 |
|
| (Decrease)/Increase
in Sales (Net percentage) |
|
(5.02) |
9.73 |
|
| Materials
Percent of Net Sales |
|
|
(5.01) |
972 |
|
| Labour
Percent of Net Sales |
|
|
45.60 |
55.15 |
|
| Other
Cost of Sales Expenses Percent of Net Sales |
|
8.73 |
9.37 |
|
| Raw
& Packing Material as Percent of Cost of Sales |
|
28.50 |
20.29 |
|
| Administrative
Expenses Percent of Net Sales |
|
55.05 |
65.02 |
|
| Selling
Expenses Percent of Net Sales |
|
|
4.73 |
4.66 |
|
| Income
Tax Percent of Net Sales |
|
|
0.33 |
1.68 |
|
| Financial
Expenses Percent of Net Sales |
|
5.21 |
2.34 |
|
| Other
Charges Percent of Net Sales |
|
|
1.21 |
2.58 |
|
|
|
|
|
0.90 |
0.45 |
|
| SHORT
TERM SOLVENCY RATIO: |
|
|
|
|
|
|
|
|
| Working
Capital Ratio |
|
|
|
1.2: 1 |
1.1: 1 |
|
| Acid
Test Ratio |
|
|
|
0.67: I |
0.48: 1 |
|
| Working
Capital Turn Over (Net Sales) times |
|
16.54 |
27.55 |
|
| Inventory
Turn Over / times |
|
|
15.15 |
798 |
|
|
|
|
|
|
| OVERALL
VALUATION AND ASSESSMENT: |
|
|
|
|
|
|
|
|
| Number
of Time Interest Earned |
|
|
10.70 |
3.55 |
|
| Return
on Capital Employed before tax (Average in percentage) |
|
28.66 |
20.03 |
|
| P.E.
Ratio (Before tax) |
|
|
|
1.72 |
3.78 |
|
| Book
Value per share |
|
|
|
29.79 |
2,643 |
|
| Debt Ratio |
|
|
|
0.45: 1 |
0.52: 1 |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of MIRPURKHAS SUGAR MILS LIMITED, as
at 30th September, |
|
| 1996
and the related Profit & Loss Account and Statement of Changes in
Financial Position 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 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 thereon
have bee 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,
profit and loss account and the statement of changes in financial position
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 30th |
|
| September,
1996 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. |
|
|
|
HYDER BHIMJI & CO. |
|
| Karachi:
the 20th February 1997 |
Chartered Accountants |
|
|
|
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 1996 |
|
1996 |
1995 |
|
|
|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Share
capital: |
|
| Authorized |
|
3.10 |
150,000,000 |
150,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed & paid-up |
|
3.20 |
63,888,000 |
63,888,000 |
|
|
|
|
---------- |
---------- |
|
| Revenue
reserves |
|
4 |
126,350,305 |
104,350,305 |
|
| Unappropriated
profit |
|
|
85,498 |
620,472 |
|
|
---------- |
---------- |
|
|
|
|
126,435,803 |
104,970,777 |
|
|
|
|
---------- |
---------- |
|
|
|
|
190,323,803 |
168,858,777 |
|
| REDEEMABLE
CAPITAL |
|
5 |
2,025,324 |
2,659,864 |
|
| LIABILITIES
AGAINST ASSETS |
|
| SUBJECT
TO FINANCE LEASE |
|
6 |
5,010,245 |
8,017,725 |
|
| DEFERRED
TAXATION |
|
7 |
25,880,000 |
23,000.00 |
|
| CURRENT
LIABILITIES |
|
| Current
portion of redeemable |
|
---------- |
---------- |
|
| capital |
|
|
|
634,540 |
3,394,892 |
|
| Current
portion of liabilities |
|
| against
assets subject to |
|
| finance
lease |
|
|
3,007,480 |
7,275,667 |
|
| Short
term running finance utilized |
|
| under
mark-up arrangements |
|
8 |
- |
925,391 |
|
| Creditors,
accrued and other |
|
|
| liabilities |
|
9 |
109,658,238 |
112,567,978 |
|
| Provision
for taxation |
|
|
25,036,739 |
9,573,535 |
|
| Proposed
dividend |
|
|
15,972,000 |
15,972,000 |
|
|
---------- |
---------- |
|
|
|
154,308,997 |
149,709,463 |
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
10 |
- |
- |
|
|
---------- |
---------- |
|
|
|
377,548,369 |
352,245,829 |
|
|
========== |
========== |
|
|
|
|
|
|
|
|
1996 |
1995 |
|
|
|
Note |
Rupees |
Rupees |
|
|
| FIXED ASSETS |
|
|
| Operating
assets |
|
11 |
174,418,566 |
175,899,430 |
|
| Capital
work-in-progress |
|
12 |
11,065,065 |
1,143,879 |
|
|
|
|
---------- |
---------- |
|
|
|
|
185,483,631 |
177,043,309 |
|
| LONG
TERM INVESTMENTS |
|
13 |
14,025,000 |
14,025,000 |
|
| LONG
TERM LOANS AND ADVANCES |
|
14 |
558,976 |
364,124 |
|
| LONG
TERM DEPOSITS |
|
15 |
4,863,454 |
5,415,381 |
|
| CURRENT
ASSETS |
|
|
---------- |
---------- |
|
| Stores
and spares |
|
16 |
46,661,457 |
47,121,842 |
|
| Stock-in-trade |
|
17 |
3,534,003 |
58,439,798 |
|
| Trade debts |
|
18 |
- |
1,165,847 |
|
| Loans
and advances |
|
19 |
16,015,066 |
22,590,744 |
|
| Deposits,
prepayments and |
|
|
| other
receivables |
|
20 |
17,566,218 |
11,928,345 |
|
|
|
|
| Short
term investment |
|
21 |
80,500,000 |
10,500,000 |
|
| Cash
and bank balances |
|
22 |
8,340,564 |
3,651,439 |
|
|
|
|
---------- |
---------- |
|
|
|
|
172,617,308 |
155,398,015 |
|
|
---------- |
---------- |
|
|
|
|
377,548,369 |
352,245,829 |
|
|
|
|
=========== |
=========== |
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR |
|
| ENDED
SEPTEMBER 30, 1996 |
|
|
|
|
|
1996 |
1995 |
|
|
|
|
Note |
Rupees |
Rupees |
|
|
| Sales |
|
23 |
566,987,335 |
596,949,110 |
|
| Cost
of goods sold |
|
24 |
469,725,777 |
506,368,808 |
|
|
---------- |
---------- |
|
| Gross profit |
|
|
97,261,558 |
90,580,302 |
|
|
| OPERATING
EXPENSES: |
|
---------- |
---------- |
|
| Administrative |
|
25 |
26,863,861 |
27,854,021 |
|
| Selling
& distribution |
|
26 |
1,892,317 |
10,025,942 |
|
|
---------- |
---------- |
|
|
|
|
|
28,756,178 |
37,879,963 |
|
|
---------- |
---------- |
|
| Operating
profit |
|
68,505,380 |
52,700,339 |
|
|
|
27 |
10,562,163 |
4,874,055 |
|
|
---------- |
---------- |
|
|
|
|
|
79,067,543 |
57,574,394 |
|
|
|
|
|
---------- |
---------- |
|
|
|
28 |
6,907,875 |
15,427,546 |
|
|
|
29 |
5,143,894 |
2,728,690 |
|
|
---------- |
---------- |
|
|
|
12,051,859 |
18,156,236 |
|
|
---------- |
---------- |
|
|
|
|
| Profit
before taxation |
|
67,015,684 |
39,418,158 |
|
| Provision
for taxation |
|
30 |
29,578,658 |
14,017,310 |
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
37,437,026 |
25,400,848 |
|
| Unappropriated
profit brought forward |
|
620,472 |
191,624 |
|
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
38,057,498 |
25,592,472 |
|
| APPROPRIATIONS: |
|
---------- |
---------- |
|
| Transfer
to general reserve |
|
|
22,000,000 |
9,000,000 |
|
| Proposed
dividend |
|
|
|
15,972,000 |
15,972,000 |
|
|
---------- |
---------- |
|
|
|
|
|
37,972,000 |
24,972,000 |
|
|
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
|
85,498 |
620,472 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
|
|
|
|
1996 |
1995 |
|
|
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
after taxation |
|
|
37,437,026 |
25,400,848 |
|
| Adjustments |
|
---------- |
---------- |
|
| Depreciation |
|
|
19,702,618 |
19,632,950 |
|
| Deferred
taxation |
|
|
2,880,000 |
1,000~000 |
|
| Gain
on sale of fixed assets |
|
(215,639) |
(492,125) |
|
|
|
|
---------- |
---------- |
|
|
|
|
22,366,979 |
20,140,825 |
|
|
|
|
---------- |
---------- |
|
| Operating
profit before changes |
|
59,804,005 |
45,541,673 |
|
|
| (Increase)/decrease
in operating assets |
|
---------- |
---------- |
|
| Stores
& spares |
|
|
460,385 |
5,905,132 |
|
| Stock-in-trade |
|
|
54,905,795 |
10,043,330 |
|
| Trade debts |
|
|
1,165,847 |
11,722,518 |
|
| Loans
and advances |
|
|
6,575,678 |
-5,292,750 |
|
| Deposits
prepayments and other receivables |
|
{5,637,873 |
-2,607,813 |
|
| Short
term investment |
|
|
-70,000,000 |
- |
|
|
---------- |
---------- |
|
|
|
|
-12,530,168 |
19,770,417 |
|
|
|
|
---------- |
---------- |
|
|
|
|
47,273,837 |
65,312,090 |
|
|
| Increase/(decrease)
in Current liabilities |
|
---------- |
---------- |
|
| Short
term finance |
|
|
-925,391 |
-8,383,123 |
|
| Creditors
accrued and other liabilities |
|
(2,909,740) |
5,861,065 |
|
| Provision
for taxation |
|
|
15,463,204 |
-14,060,270 |
|
|
|
|
---------- |
---------- |
|
|
|
|
11,628,073 |
-16,582,328 |
|
|
|
|
---------- |
---------- |
|
| Net
Cash from operating activities |
|
58,901,910 |
48,729,762 |
|
|
|
| Cash
flow from investment activities |
|
---------- |
---------- |
|
| Capital
expenditure |
|
-28,674,441 |
-22,231,196 |
|
| Sale
proceed of fixed assets |
|
747,140 |
679,190 |
|
| Purchase
of investment |
|
|
- |
2,000,000 |
|
| Payments
of long term loan and advances |
|
(194,852) |
434,330 |
|
| Payment
of long term deposits |
|
551,927 |
1,014,010 |
|
|
