| SHAHMURAD SUGAR MILLS LTD |
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| 18th
Annual Report And Account 1995-1996 |
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| CONTENTS |
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| BOARD OF DIRECTORS |
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| NOTICE OF MEETING |
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| DIRECTORS' REPORT |
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| AUDITORS' REPORT TO THE
MEMBERS |
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| BALANCE SHEET |
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| PROFIT AND LOSS ACCOUNT |
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| CASH FLOW STATEMENT |
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| NOTES ON ACCOUNTS |
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| SHAREHOLDERS' STATISTICS |
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| BOARD OF DIRECTORS |
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| MR.
ELLIAS H. ZAKARIA |
Chairman |
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| MR.
ISMAlL H. ZAKARIA |
Vice Chairman |
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| MR.
YUSUF AYOOB |
Managing Director |
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| MR.
SULEMAN AYOOB |
|
| MR.
A. KADER JAFFER |
|
| MR.
A. AZIZ AYOOB |
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| MR.
ZIA I. ZAKARIA |
Resident Director |
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| MR.
SALIM AYOOB |
|
| MR.
SHAMSHAD AHMED |
(N.I.T. Nominee) |
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| COMPANY
SECRETARY: |
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| M.
YAKOOB ADMANEY |
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| FCIS, FCMA. |
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| LEGAL
ADVISOR: |
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| 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. |
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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
OP MEETING |
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| Notice
is hereby given that the 18th Annual General Meeting of SHAHMURAD SUGAR MILLS |
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| LIMITED
will be held at the Registered Office of the Company at 96-A, Sindhi Muslim
Society, |
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| Karachi
on Monday, March 31, 1997 at 12.00 noon to transact the following business: |
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| 1.
To read and confirm the Minutes of the 17th Annual General Meeting of the
Company held |
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| on
March 31, 1996. |
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| SPECIAL
BUSINESS: |
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| To
consider and thought fit to pass with or without modifications, the following
Resolution |
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| as
a Special Resolution: |
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| Resolved
that authorized Capital of the Company be and is hereby increased from |
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| Rs.200,000,000/=
to Rs.250,000,000/= and accordingly : |
|
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| i)
In clause 5 of the Memorandum of Association of the Company, the words and
figures |
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| "Rupees
two hundred million, divided into 20,000,000 Ordinary Shares" be and is |
|
| replaced
by the words and figure "Rs.250,000,000/= (Rupees two hundred fifty
million) |
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| divided
into 25,000,000 Ordinary Shares". |
|
|
| ii)
In Article 4 of the Articles of Association of the Company, the words and
figures |
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| "Rs.200,000,000/=
(Rupees two hundred million) divided into 20,000,000/= Ordinary |
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| Shares"
be and is hereby replaced by the words and figure "Rs.250,000,000/=
(Rupees |
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| two
hundred fifty million) divided into 25,000,000 Ordinary Shares". |
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| ORDINARY
BUSINESS |
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| 2.
To read and consider the Accounts for the year ended September 30, 1996 and
reports of |
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| Directors
and Auditors thereon. |
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| 3.
To consider and approve the following resolution: |
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| Resolved
that 1,919,878 Bonus Shares of Rs.10/= each be issued in the ratio of one
share |
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| for
every 10 ordinary shares to those shareholders whose names would appear on
the Register |
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| of
Members on March 31, 1997. These shares will rank pari passu with the
existing shares |
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| of
the Company. |
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| Further
resolved that Bonus shares forming part of such fractional holding which is
not in |
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| exact
multiple of 1:10 share will be sold in the Stock Market and proceeds of such
shares |
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| be
distributed amongst the shareholders in accordance with their entitlement. |
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| 4.
To appoint auditors and to fix their remunerations. |
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| 5.
The 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 17, |
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| 1997
to March 31, 1997 (both 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, 1997 |
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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 |
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| as
his/her proxy to attend and vote on his/her behalf. PROXIES MUST BE |
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| RECEIVED
AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS |
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| THAN
48 HOURS BEFORE THE MEETING. |
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| 2.
A statement under section 160 of the Companies Ordinance, 1984 showing |
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| material
facts in respect of Special Resolution is attached with the notice. |
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| 3.
Shareholders are requested to inform the Company of any change in address |
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| immediately. |
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| STATEMENT
UNDER SECTION 160 OF THE |
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| COMPANIES
ORDINANCE, 1984 |
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| 1.
This statement is annexed to the Notice convening the Eighteenth Annual |
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| General
Meeting of SHAHMURAD SUGAR MILLS LIMITED being held on |
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| March
31, 1997 setting out all material facts concerning the Special Business |
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| to be transacted at the meeting. |
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| 2.
The present Authorized Capital of the Company is Rs.200,000,000/= out of |
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| which
Rs. 191,987,850/= has already issued and paidup. The Company is expanding |
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| its
business activities. The present Paidup Capital will have to be increased |
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| gradually
for issuance of further shares in the forthcoming Annual General |
|
| Meeting
accordingly the Company propose to increase Paidup Capital, hence |
|
| it
is essential to increase Authorized Capital to Rs.250,000,0000/= divided into |
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| 25,000,000
Ordinary Shares of Rs.10/= each. |
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|
By Order of the Board |
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|
( M. YAKOOB ADMANEY ) |
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| Karachi:
March 01, 1997 |
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Company Secretary |
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| DIRECTORS'
REPORT |
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| To: |
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| The
shareholders, |
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| We
take pleasure in submitting before you the Annual Report alongwith Audited
Accounts for |
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| the
year ended September 30, 1996. By the grace of Almighty Allah, your company
has earned |
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| a
net profit of Rs. 24.840 million. After adding last year's un-appropriated
profit of Rs. 4.766 |
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| million,
a sum of Rs. 29.616 million is available which we propose to appropriate as
follow: |
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|
(Rs. in million) |
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| Propose
issue of Bonus Shares @10% |
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Rs. |
19.199 |
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| Tax
on Bonus Shares |
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Rs. |
1.920 |
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| Unappropriated
profit carried forward |
Rs. |
8.497 |
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---------------------- |
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Total Rs. |
29.616 |
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=========== |
============ |
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| Your
directors propose to issue Bonus Shares @ 10%. from current year's profit.
After tax earning |
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| per
share of the company is Rs. l.30 per share during the year. |
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|
| During
the year under report, your Mill started crushing on October 10, 1995 and
season ended |
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| on
March 31, 1996 with an average crushing of 791,599 metric tons (1995:879,022
metric tons) |
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| of
sugarcane. The sugar produced was 82,800 metric tons (1995:85,311 metric
tons) with an average |
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| recovery
of 10.46% (1995: 9.67%). Molasses produced was to the extent of 38,033 metric
tons |
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| (1995:44,904
metric tons). |
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| During
the year, company had to pay Rs.94.042 million to the sugarcane growers on
account of |
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| higher
recovery @ paisa 27 per 40 kg for every 0.1% over and above 8.7%. As reported
earlier, |
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| Government
has increased minimum support price from Rs.20.75 to Rs.21.75 per 40 kg. In
addition, |
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| quality
premium was payable @ paisa 27 per 40 kg for every 0.1% excess recovery for
over and |
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| above 8.7%. |
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| As
reported to the shareholder in the last Annual Report that with the
installation of new sugar |
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| mills
in the lower Sindh less sugarcane was available to your mill. Your mill had
to procure |
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| sugarcane
from far flung area at higher cost during the year. |
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|
| The
year ended with a profit of Rs 54.014 million before tax. However, keeping in
mind deferred |
|
| tax
liability, your directors has proposed to transfer a sum of Rs.27.5 million
to deferred taxation |
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| provision. |
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| LABOUR
MANAGEMENT RELATIONS: |
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| We
are happy to report that labour management relations has improved
considerably during the |
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| year
under report. Your directors appreciate the spirit of cooperation shown by
the workers and |
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| hope
it will continue. |
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|
| STAFF: |
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| Your
directors also place on record deep appreciation of hard work, loyalty and
devotion to duty |
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| shown
by the officers and staff of the Company. |
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| AUDITORS: |
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| Messrs
A. R. Diwan and Company, Chartered Accountants, auditors of the company,
retire and |
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| offer
their services for the ensuing year. |
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| FUTURE
OUTLOOK : |
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| For
the current year, Government has fixed the sugarcane support price at
Rs.24.50 per kg and |
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| quality
premium has been retained at paisa 27 per 40 kg for every 0.1% over and above
recovery |
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| of
8.7% However, due to less quantity of sugarcane available in the lower Sindh,
the price war |
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| has
begun for the procurement of sugarcane which has resulted that price of
sugarcane has gone |
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| beyond
Rs.50/= per 40 kg which will ultimately effect the profitability of your
Company. However, |
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| your
mill is trying its utmost to keep the total cost of sugarcane within
controllable limit and is |
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| also
trying its best to maximize utilization of capacity with higher production. |
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| The
current crushing season started on November 1, 1996 and crushing upto
February 28, 1997 |
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| was
586,125 metric tons with an average recovery of 10.699%. We are trying our
level best to |
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| cross
the quantum of sugar produced than the last year. |
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FOR AND ON BEHALF OF
BOARD OF DIRECTORS |
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|
(
YUSUF AYOOB ) |
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| Karachi: March 1,1997 |
|
Managing Director |
|
|
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|
| AUDITORS' REPORT TO THE MEMBERS |
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| We
have audited the annexed Balance Sheet of Shahmurad Sugar Mills Limited as at
September 30, 1996 and the related |
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| Profit
and Loss Account and Cash Flow Statement, together with the notes forming
part thereof, for the year then ended ::~; |
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| 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, 1996 and
of the profit 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 01, 1997 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30TH SEPTEMBER, 1996 |
|
|
|
1996
|
1995 |
|
|
Note |
(Rupees in thousand) |
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
Capital |
|
| 20,000,000
ordinary shares of Rs. 10.00 each |
|
200,000 |
200,000 |
|
|
========== |
========== |
|
| Issued, subscribed and paid-up |
|
2 |
191,988 |
174,535 |
|
| capital |
|
|
|
|
| Reserve: |
|
3 |
|
| General
Reserve |
|
|
92,000 |
92,000 |
|
| Reserve
for issue of Bonus Shares |
|
|
19,199 |
17,454 |
|
| Unappropriated
profit |
|
|
8,497 |
4,766 |
|
|
|
|
|
|
119,696 |
114,220 |
|
|
|
---------- |
---------- |
|
|
|
311,684 |
288,755 |
|
| REDEEMABLE
CAPITAL |
|
4 |
85,036 |
130,225 |
|
| LONG
TERM LOAN |
|
5 |
4,549 |
6,824 |
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
|
| TO
FINANCE LEASE |
|
6 |
45,282 |
81,375 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
7 |
131,452 |
72,037 |
|
|
|
|
|
| CURRENT
LIABILITIES AND PROVISIONS |
|
|
|
|
|
|
| Short term running finance and |
|
8 |
75,791 |
89,747 |
|
| borrowings |
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|
| Current maturity of
redeemable capital |
|
|
| long
term loan and finance lease |
|
9 |
86,229 |
107,921 |
|
| Creditors
accrued and other liabilities |
10 |
74,544 |
99,811 |
|
| Taxation |
|
|
2,277 |
1,783 |
|
|
|
|
|
|
238,841 |
299,262 |
|
| CONTINGENCIES AND
COMMITMENTS |
|
11 |
-- |
-- |
|
|
---------- |
---------- |
|
|
816,844 |
878,478 |
|
|
========== |
========== |
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| The
annexed notes form an integral part of these accounts. |
|
|
| FIXED
ASSETS |
|
| Operating
assets |
|
|
12 |
618,455 |
633,596 |
|
| Capital
work-in-progress |
|
13 |
2,598 |
9,228 |
|
|
|
|
|
|
|
|
621,053 |
642,824 |
|
| LONG
TERM INVESTMENT |
|
|
14 |
5,000 |
5,000 |
|
| LONG
TERM LOANS AND ADVANCES |
|
15 |
567 |
222 |
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
16 |
15,861 |
18,002 |
|
| CURRENT
ASSETS |
|
|
|
|
| Stores
and spares |
|
|
17 |
75,127 |
98,010 |
|
| Stock-in-trade |
|
|
18 |
14,186 |
40,486 |
|
| Loans, advances, prepayments
and |
|
|
|
| other
receivables |
|
|
19 |
47,287 |
43,553 |
|
| Bank
and cash balance |
|
|
20 |
37,763 |
30,381 |
|
|
|
|
---------- |
---------- |
|
|
|
174,363 |
212,430 |
|
|
|
---------- |
---------- |
|
|
|
|
816,844 |
878,478 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR |
|
| ENDED
30TH SEPTEMBER, 1996 |
|
|
|
|
|
|
1996 |
1995 |
|
|
|
Note |
(Rupees in thousand) |
|
|
|
|
|
|
| Sales |
|
|
21 |
1,318,317 |
1,304,992 |
|
| Cost
of sales |
|
|
22 |
1,113,693 |
1,120,042 |
|
|
|
|
---------- |
---------- |
|
| Gross
profit |
|
|
|
204,624 |
184,950 |
|
|
|
|
|
| Administration
expenses |
|
23 |
47,709 |
45,267 |
|
| Selling
and Distribution expenses |
|
24 |
2,540 |
13,669 |
|
|
|
|
|
|
|
|
50,249 |
58,936 |
|
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
|
154,375 |
126,014 |
|
| Other
income |
|
|
25 |
344 |
135 |
|
|
|
|
---------- |
---------- |
|
|
|
|
154,719 |
126,149 |
|
|
|
|
|
| Financial
charges |
|
|
26 |
96,238 |
102,895 |
|
| Other
charges |
|
|
27 |
4,467 |
2,266 |
|
|
|
|
|
|
|
|
|
100,705 |
105,161 |
|
|
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
|
|
54,014 |
20,988 |
|
| Taxation |
|
|
28 |
31,084 |
3,445 |
|
|
|
|
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
|
|
22,930 |
17,543 |
|
| Unappropriated
profit brought forward |
|
4,766 |
4,677 |
|
|
|
|
---------- |
---------- |
|
|
|
|
27,696 |
22,220 |
|
| Appropriations |
|
|
| Reserve for
issue of Bonus Shares @10% (1995: @10%) |
19,199 |
17,454 |
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
8,497 |
4,766 |
|
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30TH SEPTEMBER, 1996 |
|
|
|
|
|
1996 |
1995 |
|
|
|
|
(Rupees in thousand) |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Cash
generated from operations |
|
34 |
244,130 |
331,955 |
|
| Taxes paid |
|
|
|
(9,097) |
(9,456) |
|
| Payment
for staff retirement benefits |
|
(86) |
(79) |
|
| Financial charges paid |
|
|
(100,329) |
(106,028) |
|
| (including
interest income) |
|
|
|
|
| Long
term loans advances |
|
|
(345) |
(18) |
|
| Long
term deposits |
|
|
|
2,141 |
(726) |
|
|
|
|
---------- |
---------- |
|
|
|
|
136,414 |
215,648 |
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Fixed
capital expenditure |
|
|
(10,399) |
(47,685) |
|
| Sale
proceeds of operating assets |
|
|
577 |
184 |
|
| Net
cash outflow from investing activities |
|
(9,822) |
(47,501) |
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
| Redeemable
capital |
|
|
|
-- |
80,000 |
|
| Long
term loan |
|
|
|
-- |
11,374 |
|
| Obligation
under finance lease |
|
|
3,489 |
11,028 |
|
| Repayment
of redeemable capital, long term loans |
|
|
| and
finance lease |
|
|
|
(108,738) |
(122,671) |
|
| Dividend
paid |
|
|
|
(5) |
(16) |
|
| Net
cash inflow from financing activities |
|
(105,254) |
(20,285) |
|
| Net increase / (decrease)
in cash and cash |
|
---------- |
---------- |
|
| equivalents |
|
|
|
21,338 |
147,862 |
|
| Cash and cash equivalent
at the beginning |
|
|
| of the year |
|
|
|
(59,366) |
(207,228) |
|
| Cash and cash equivalents at
the end |
|
---------- |
---------- |
|
| of the year |
|
|
35 |
(38,028) |
(59,366) |
|
|
|
|
========== |
========== |
|
|
| ISMAlL H. ZAKARIA |
YUSUF AYOOB |
|
SULEMAN AYOOB |
|
| Vice
chairman |
Managing Director |
Director |
|
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR |
|
| ENDED
30TH SEPTEMBER, 1996 |
|
|
|
| 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
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. |
|
|
| 1.2
Staff retirement benefits: |
|
| The
Company operates a provident fund scheme for all its employees eligible for
the benefits |
|
| and
contributions thereto are made in accordance with the terms of the scheme. |
|
|
| Effective
October 01, 1990, Company had introduced an unfunded gratuity scheme for
those |
|
| permanent
employees who have completed qualifying period and are members of the |
|
| aforestated
provident fund scheme. |
|
|
| 1.3
Taxation: |
|
| Provision
for current taxation for the year is based on taxable income at the current
rate of |
|
| taxation
after taking into account tax credit available, if any. |
|
|
| The
company accounts for deferred taxation on all material timing differences
using the |
|
| liability
method. However, deferred tax is not provided if it can be established with |
|
| reasonable
probability that these timing differences will not reverse in the foreseeable
future. |
|
|
| 1.4
Fixed assets: |
|
|
| (a) OWN |
|
| Operating
assets except freehold land are stated at cost less accumulated |
|
| depreciation.
Freehold land and capital work in progress are stated at cost. Cost |
|
| in
relation to certain fixed assets including capital work in progress signifies |
|
| historical
cost and exchange differences referred to in Note 1.8. |
|
|
| Depreciation
is charged to income at normal tax rate on the written down value of |
|
| the
assets as affected on account of exchange differences referred to in Note
1.8. |
|
| Full
year's depreciation is charged on all assets in the year of acquisition,
except for |
|
| plant
and machinery on which depreciation is charged on the basis of actual |
|
| operating
days of factory. No depreciation is charged on assets in the year of |
|
| disposal. |
|
|
| Maintenance
and normal repairs are charged to income as and when incurred; major |
|
| renewals
and improvements are capitalized and the assets so replaced, if any, are |
|
| retired. |
|
|
| Gain
and loss on disposal of assets are taken to profit and loss account. |
|
|
| (b) LEASED |
|
| Assets
held under finance leases are included in operating assets at present value |
|
| of
minimum lease payments. |
|
|
| The
financial charge is calculated at the interest rate implicit in the lease and
is |
|
| charged
to profit and loss account. |
|
|
| Depreciation
is charged at the same rates as company owned assets. However, if |
