| CRESCENT SUGAR MILLS |
|
|
|
|
|
|
|
|
|
|
|
|
| AND
DISTILLERY LIMITED |
|
| ANNUAL
REPORT |
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|
|
|
In The Name of Allah The Merciful The Compassionate |
|
|
|
| PRODUCTION
DATA |
|
| 1988-1997 |
|
|
|
INDUSTRIAL |
|
COTTON |
|
|
|
SUGAR |
|
|
|
MOLASSES |
|
ALCOHOL |
|
YARN |
|
|
|
|
|
|
|
|
COTTONYARN |
|
|
DURATION |
|
|
|
|
INDUSTRIAL |
|
PRODUCED |
|
|
OF |
CANE |
SUGAR |
|
PROCESS |
MOLASSES |
|
ALCOHOL |
|
CONVERTED |
|
|
SEASON |
CRUSHED |
PRODUCED |
RECOVERY |
LOSSES |
PRODUCED |
|
PRODUCED |
|
INTO20/S |
|
| SEASON |
(DAYS) |
(M.TONS) |
(M.TONS) |
(PERCENT) |
(PERCENT) |
(M.TONS) |
DAYS |
(LITRES) |
DAYS |
(KGS.) |
|
| 1996-97 |
171 |
385,071 |
28,709 |
7.46 |
2.74 |
18,052 |
129 |
2,261,027 |
364 |
12,318,774 |
|
| 1995-96 |
144 |
341,828 |
26,445 |
7.76 |
2.70 |
15,190 |
170 |
2,644,156 |
365 |
10,470,408 |
|
| 1994-95 |
157 |
423,994 |
34,473 |
8.12 |
2.60 |
19,725 |
172 |
2,575,601 |
357 |
10,575,475 |
|
| 1993-94 |
186 |
467,110 |
36,983 |
7.93 |
2.62 |
21,818 |
180 |
3,257,528 |
359 |
9,760,406 |
|
| 1992-93 |
142 |
363,475 |
29,432 |
8.09 |
2.66 |
15,170 |
198 |
2,404,791 |
363 |
5,831,179 |
|
| 1991-92 |
166 |
378,633 |
31,885 |
8.42 |
2.77 |
16,405 |
125 |
1,761,113 |
363 |
5,629,850 |
|
| 1990-91 |
192 |
498,909 |
38,296 |
7.67 |
2.81 |
25,079 |
206 |
3,127,164 |
363 |
4,608,955 |
|
| 1989-90 |
177 |
456,415 |
36,952 |
8.10 |
2.59 |
21,331 |
196 |
2,986,799 |
92 |
889,049 |
|
| 1988-89 |
166 |
425,026 |
33,902 |
7.98 |
2.48 |
19,577 |
153 |
2,703,458 |
|
| 1987-88 |
203 |
545,438 |
44,264 |
8.11 |
2.51 |
27,115 |
154 |
2,194,235 |
|
|
|
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|
| GENERAL
INFORMATION |
|
SUBSIDIARIES |
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|
|
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|
|
| Principal
Office |
|
Crescot Mills Limited |
|
| Nishatabad, |
|
|
Principal &
Registered Office |
|
| New
Lahore Road, |
|
3rd Floor, |
|
| Faisalabad. |
|
|
The Cotton Exchange
Building, |
|
| Phones:
(041) 752111 -4 |
|
I.I. Chundrigar Road, |
|
| Telex:
43321 Sugar Pk |
|
Karachi. |
|
| Fax:
(041) 750366 |
|
Phones: (021) 2415501-4 |
|
|
|
|
(021)
2419455 |
|
| Registered
Office |
|
Telex: 21028 MAMB PK |
|
|
|
Fax: (021) 2416942 |
|
| 83,
Babar Block, |
|
| New
Garden Town, Lahore. |
WORKS |
|
| Phones:
(042) 5881974-5 |
|
| Fax:
(042) 5881976 |
|
|
B-10, SITE, Kotri. |
|
|
|
|
Phones: (0221) 870126,
870027 |
|
|
| Karachi
Office |
|
Company Activity |
|
|
| 3rd
Floor, The Cotton Exchange Building, |
Spinning Unit comprising |
|
| I.
I. Chundrigar Road, Karachi. |
|
of 30,296 Spindles |
|
| Phones:
(021) 2415501 -4, 2419455 |
|
| Telex
:21028 MAMB PK |
|
|
Chief Executive |
|
|
|
|
Mr. Amjad Mehmood |
|
|
| WORKS |
|
|
Karachi Bulk Storage
& |
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|
|
|
Terminals (Pvt) Limited |
|
|
| Sugar
Division |
|
Principal &
Registered Office |
|
|
|
3rd Floor, |
|
| Nishatabad,
Faisalabad. |
|
The Cotton Exchange
Building, |
|
| Phones:
(041)752111 -4 |
|
I.I. Chundrigar Road,
Karachi. |
|
|
|
Phones: (021) 9415501-4 |
|
| Distillery
Division |
|
Telex: 21028 MAMB PK |
|
|
|
Fax: (021) 2412275 |
|
| Nishatabad, |
|
| Faisalabad. |
|
|
|
WORKS |
|
| Phones:
(041) 752111 -4 |
|
|
|
|
60/1-A, Oil Installation |
|
| Textile
Division |
|
|
Area, Keamari, Karachi. |
|
| Kotla
Kahlon, |
|
|
| 8/9
Kilometers from |
|
|
Company Activity |
|
| Shahkot
Towards Sheikhupura, |
|
Export of Molasses and
General Trading. |
|
| Shahkot,
Distt. Sheikhupura. |
|
Also offers facility of
Storage. |
|
| Phones:
(0342) 362123 |
|
|
|
(04955) 71622 & 71700 |
|
Chief Executive |
|
| Fax:
(04955) 71700 |
|
|
Mr. Zahid Bashir |
|
|
| CONTENTS |
|
|
| CRESCENT
SUGAR MILLS AND DISTILLERY LIMITED |
|
|
| Company
profile |
|
|
|
| Notice
of annual general meeting |
|
|
| Directors'
report to the shareholders |
|
| Five
years financial summary |
|
|
| Pattern
of holding of shares |
|
|
| Auditors'
report to the members |
|
|
| Balance
sheet |
|
|
|
| Profit
and loss account |
|
|
| Statement
of changes in financial position |
|
| Notes to the accounts |
|
|
|
|
| CRESCOT
MILLS LIMITED |
|
|
| (Subsidiary Company) |
|
|
|
| KARACHI
BULK STORAGE AND TERMINALS (PVT) LIMITED |
|
| (Subsidiary Company) |
|
| Form
of Proxy |
|
|
|
| COMPANY
PROFILE |
|
|
| Board
of Directors |
|
|
| Mr.
Muhammad Arshad |
|
| (Chief
Executive) |
|
|
| Directors |
|
| (in
alphabetical order) |
|
|
| Mr.
Amjad Mahmood |
|
| Mr.
Khalid Bashir |
|
| Mr.
Mazhar Karim |
|
| Mr.
Muhammad Anwar |
|
| Mr.
Muhammad Rafi |
|
| Mr.
Razi-ur-Rahman Khan |
|
| (Nominee
NIT) |
|
|
| Company
Secretaries |
|
|
| Mr.
Zaheer A. Shaikh |
|
| Mr.
Rashid Sadiq |
|
|
| Bankers |
|
|
| United
Bank Limited |
|
| National
Bank of Pakistan |
|
| Standard
Chartered Bank |
|
| Emirates
Bank International Limited |
|
| Faysal
Bank Limited |
|
| Muslim
Commercial Bank Limited |
|
| Citibank
N.A. |
|
| Crescent
Investment Bank Ltd. |
|
|
| Auditors |
|
|
| Messrs.
Riaz Ahmad & Company |
|
| Chartered
Accountants |
|
|
| NOTICE
OF ANNUAL |
|
| GENERAL
MEETING |
|
|
| NOTICE
IS HEREBY GIVEN THAT the 39th |
|
|
| Annual
General Meeting of the Shareholders of |
|
|
| CRESCENT
SUGAR MILLS AND DISTILLERY |
|
|
| LIMITED
will be held on Monday the March 30, |
|
|
| 1998
at 9:30 a.m. at Registered Office, 83-Babar |
|
|
| Block,
New Garden Town, Lahore to transact the |
|
|
| following
business :- |
|
|
|
|
|
|
|
|
| ORDINARY
BUSINESS: |
|
|
|
|
|
|
| 1.
To receive and adopt the Audited Accounts of |
ON BEHALF OF THE BOARD |
|
|
|
| the
Company for the year ended September |
|
|
|
| 30,
1997 together with the Directors' and |
|
|
|
| Auditors'
Reports thereon. |
|
|
|
|
|
|
| 2.
To approve, as recommended by the |
|
|
|
| Directors,
the issue of Bonus Shares in the |
|
|
|
| proportion
of one (1) share for every Ten (10) |
|
|
|
| shares
held (i.e. @ 10%) out of premium on |
|
|
|
| issue
of right shares account. |
|
|
|
|
|
|
|
| 3.
To appoint Auditors and fix their remuneration. |
|
|
| The
present Auditors M/s Riaz Ahmad & |
|
| Company,
Chartered Accountants retire and |
|
| being
eligible, offer themselves for re- |
|
| appointment. |
|
|
|
| PARTICIPATION
IN THE |
|
| ANNUAL
GENERAL MEETING |
|
|
| A
member eligible to attend and vote at this |
|
| Meeting
may appoint another member as his/her |
|
| proxy
to attend and vote on his/her behalf. Proxies |
|
| in
order to be effective must be received by the |
|
| Company
at the Registered Office not later than |
|
| 48
hours before the time for holding the Meeting. |
|
|
| BOOK
CLOSURE: |
|
|
| The
Share Transfer Books of the Company will |
|
| remain
closed from March 25, 1998 to March 31, |
|
| 1998
(both days inclusive) and Bonus if approved, |
|
| will
be issued to such members whose names |
|
| appear
in the company's Register of Members by |
|
| the
close of business on March 24, 1998. |
|
|
| REGISTERED
OFFICE |
|
| 83-BABAR
BLOCK, |
|
| NEW
GARDEN TOWN, LAHORE. |
|
| Phone
No. (042) 5881974-75 |
|
| Fax
No. (042) 5881976 |
|
| E-Mail:
Rashid.sadiq@cresoft.com.pk |
|
| E-Mail:
Azeemr@brain.net.pk |
|
|
| DIRECTORS'
REPORT |
|
| TO
THE SHAREHOLDERS |
|
|
| On
behalf of the Directors, it gives me great |
|
|
|
| pleasure
to welcome you to the Thirty-ninth |
|
|
|
| Annual
General Meeting of the company. It is a |
|
|
|
| great
honour for me to present to you the Audited |
|
|
| Accounts
of the company for the year ended 30th |
|
|
| September
1997. |
|
|
|
|
|
|
|
|
|
(Rupees in '000') |
|
| FINANCIAL
RESULTS |
|
|
|
|
|
|
| Profit
before taxation |
|
30,551 |
|
| Provision
for taxation |
|
15,607 |
|
|
|
---------- |
|
| Profit
after taxation |
|
14,944 |
|
| Loss
brought forward |
|
(16,314) |
|
|
|
---------- |
|
| Accumulated
Loss |
|
(1,370) |
|
|
|
========== |
|
|
|
|
|
|
| I
feel great pleasure to report that during the year |
|
|
| 1996-97,
your company had earned an after tax |
|
|
|
| profit
to the tune of Rs. 14.944 Million. The Board |
|
|
| of
Directors has, therefore, recommended issue of |
|
|
| Bonus
Shares @ 10% out of share premium |
|
|
|
| account. |
|
|
|
|
|
|
|
|
|
|
|
| During
the period under review, the performance |
|
|
| of
the Sugar Sector was not satisfactory and, |
|
|
|
| therefore,
the company sustained marginal loss in |
|
|
| this
Division. However, we have been able to |
|
|
|
| register
significant improvement in the |
|
|
|
| performance
of our Spinning Division. |
|
|
|
|
|
|
|
|
| The
Sales Revenue in Sugar as well as Textile |
|
|
|
| Division
was better this year when we make |
|
|
|
| comparison
to the previous year. Nevertheless, |
|
|
|
| Distillery
Division has not been able to maintain its |
|
|
| performance
because of lower prices of the end |
|
|
|
| product.
I will attempt to present an in depth |
|
|
|
| analysis
of the performance of all the Divisions in |
|
|
| the
operating performance sector of each Division. |
|
|
|
|
|
|
|
| However,
if we make an overall analysis, it is |
|
|
|
| heartening
to note that the company was able to |
|
|
| present
better results in comparison to previous |
|
|
| year. On looking at
the results of our Textile |
|
|
| Division, the
shareholders will observe that the |
|
|
| company
is making notable progress in its |
|
|
|
| operation.
The results have, in fact, been better as |
|
|
| compared
to previous few years. The Distillery |
|
|
|
| Division,
inspire of operating in competitive and |
|
| depressed
market, has still made notable |
|
| contribution
in the revenue of the company. |
|
|
|
|
| It
is our highest priority to safeguard the interest of |
|
| the
shareholders and, therefore, the Management |
|
| is
committed to adopt every measure that is |
|
| necessary
to achieve this objective. The |
|
| Management
is striving hard to achieve such |
|
| results
which are to the entire satisfaction of the |
|
| shareholders.
However, it is hoped that the |
|
| shareholders
would appreciate that in the present |
|
| difficult
economic situation, there are certain |
|
| uncontrollable
factors which hamper our plans and |
|
| efforts. |
|
|
|
| We
hope that with better economic conditions, we |
|
| would
try to present even better results for the |
|
| coming
year. |
|
|
|
|
|
|
| OPERATING
PERFORMANCE |
|
|
|
| SUGAR |
|
|
|
|
|
|
| The
Sugar Factory commenced its Thirty-seventh |
|
| crushing
campaign on 4.11.96 and terminated the |
|
| same
on 23.4.1997 after milling 385,070 M. Tons |
|
| of
Sugarcane at an average recovery of 7.46 % |
|
| and
produced 28,709 M. Tons of White Sugar. |
|
|
|
|
| During
the crushing season of 1996-97, the |
|
| industry
witnessed second successive year of low |
|
| Sugarcane
Crop. The shortfall in production of |
|
| Sugarcane
resulted in vigorous competition |
|
| among
the member mills for the procurement of |
|
| Sugarcane.
In addition to this, we were also |
|
| confronted
with a decline of the sucrose |
|
| percentage.
Owing to fierce competition among |
|
| the
mills, the farmers were at liberty to feed to the |
|
| mills
Sugarcane available with them that had |
|
| extraneous
matter. This factor contributed a lot |
|
| towards
having low recovery ratio. |
|
|
|
|
|
| For
the review period, the Government enhanced |
|
| Sugarcane
support price for 1996-97 to Rs. 24/- |
|
| per
40 Kgs. The growers did not seem to be |
|
| satisfied
with the support price and demanded |
|
| much
higher price. In order to combat competition, |
|
|
| the
company had to incur additional expenditure of |
|
|
| transport
subsidy. |
|
|
|
|
|
| The
Government in the middle of the crushing |
|
|
| season
felt that the current production of sugar |
|
|
| would
not be sufficient to cater to the country's |
|
|
| requirement,
allowed liberal imports of sugar at |
|
|
| concessionary
duty structure. The prices of |
|
|
| international
sugar prevailing at that time were |
|
|
| much
lower than the domestic prices, therefore, |
|
|
| we
witnessed a large inflow of imported sugar. As |
|
|
| a
result, the price of the sugar dipped and was at |
|
|
| the
lowest ebb witnessed during the .remaining |
|
|
| months
of the review period. The Government, in |
|
|
| our
opinion, announced this policy without giving |
|
|
| any
consideration to the domestic industry. The |
|
|
| policy
of import should have been announced after |
|
|
| making
in depth analysis of the domestic |
|
|
|
| production.
To safeguard the interest of the |
|
|
|
| domestic
industry, the Government in our opinion, |
|
|
| should
have allowed import of the shortfall amount |
|
|
| only.
Had it been done properly, it would have |
|
|
|
| saved
this industry from huge losses. |
|
|
|
|
|
|
| Relying
on the previous experience, the industry |
|
|
| had
not imagined such adverse affect the imported |
|
|
| sugar
had on the domestic market. The mills at |
|
|
|
| that
time were engaged in vigorous crushing |
|
|
|
| campaign
thinking that the prices of sugar would |
|
|
| remain
stable for the remaining period. |
|
|
|
| Unfortunately,
the prices of the sugar sharply |
|
|
|
| declined
and were touching to such level that was |
|
|
| beyond
the normal economies. The domestic |
|
|
|
| industry
was left with huge stocks the disposal of |
|
|
| which
at the prevailing prices placed the industry |
|
|
| at
a colossal loss. |
|
|
|
|
|
|
|
| Adding
to that, the prices of the molasses also |
|
|
| dropped
substantially in the international market |
|
|
| and
therefore, this sector also did not contribute to |
|
|
| the
level that we had expected or desired. |
|
|
|
|
|
|
|
| The
production results for the last three years are |
|
|
| given
below: |
|
|
|
|
|
|
|
|
1996-97 |
1995-96 |
1994,95 |
|
|
| CANE
CRUSHED |
|
|
|
| (M. tons) |
|
385,070 |
341,828 |
423,994 |
|
|
|
|
|
| WHITE SUGAR |
|
|
|
| PRODUCED |
|
|
|
| (M. TONS) |
|
|
28,709 |
26,445 |
34,473 |
|
|
|
|
|
|
|
| RECOVERY
(%) |
|
7.46 |
7.76 |
8.12 |
|
|
| As
it would be observed from the above chart, |
|
| Sugarcane
crushing of our mills has shown little |
|
| improvement
in the review period. The crushing |
|
| season
this year lasted for 171 days as compared |
|
| to
144 days' operation of last year. The company |
|
| continued
to operate in a very competitive |
|
| environment.
The rat race among the member |
|
| mills
has been putting enormous burden on the |
|
| procurement
cost. Most of mills have to bear |
|
| heavy
burden of transport subsidy in order to bring |
|
| the
cane to their premises. |
|
|
| The
sugar mills situated in our area are confronted |
|
| with
twin problems of low Sugarcane yield and |
|
| sucrose.
The growers are using old varieties of |
|
| Sugarcane
seed which has become obsolete and |
|
| need
replacement to achieve better Sugarcane |
|
| production.
Therefore, the Government should |
|
| take
a serious note of this situation and arrange to |
|
| develop
improved variety of seeds that could give |
|
| better
yield and recovery percentage. The Sugar |
|
| Sector
is confronted with the critical situation and it |
|
| is
imperative that necessary remedial measures |
|
| be
adopted so that the industry can be saved as |
|
| this
Sector has been making handsome |
|
| contribution
towards the National Exchequer. |
|
|
| COST
OF SALES |
|
|
| Sugar
Industry is beset with escalation of cost of |
|
| production.
The Government has continuously |
|
| been
increasing the Sugarcane support price. Due |
|
| to
intense competition in Sugarcane procurement, |
|
| we
have to sustain additional cost in this category. |
|
| The
rise in electricity and fuel charges is also |
|
| having
adverse affect on the cost of production. |
|
| The
unabated devaluation of Rupee has further |
|
| compounded
our problem as the cost of spares is |
|
| constantly
on an increase. The general rise in |
|
| wage
spiral also affects our cost of production. |
|
|
|
| DISTILLERY |
|
|
|
|
|
|
|
|
|
| The
Distillery Unit worked for 129 days during the |
|
|
| review
period. As the price of molasses remained |
|
|
| depressed
for most part of the year, we have been |
|
|
| able
to control the cost drastically. In relation to |
|
|
| this,
the prices of the end product also declined |
|
|
| and
we had to curtail our production because the |
|
|
| buying
trend was not very active. |
|
|
|
|
|
|
|
|
| By
the grace of God, this Sector has been making |
|
|
| significant
contribution to the revenues of the |
|
|
| company. |
|
|
|
|
|
|
|
|
|
| PROSPECTS
FOR THE CURRENT YEAR |
|
|
|
|
|
|
|
|
| The
current crushing campaign commenced on |
|
|
|
| 17.11.1997
and till the compilation of report, the |
|
|
| factory
milled 287,800 M. Tons of Sugarcane and |
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| produced
20,885 M. Tons of White Sugar at an |
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| average
recovery of 7.44%. |
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| In
the Sugar Policy of 1997-98, the Government |
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|
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| has
revised the support price of Sugarcane and |
|
|
|
| fixed
the same at Rs. 35/- per 40 Kgs. During the |
|
|
| previous
years, the farmers obtained reasonable |
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| price
for their produce which has motivated them |
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|
| to
cultivate more Sugarcane. By the grace of God, |
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| the
Sugarcane production this year is very good. |
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| Favourable
climatic conditions have also positively |
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|
| contributed
towards the record production. The |
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|
|
| arrival
of the Sugarcane is satisfactory and it is |
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|
| hoped
that the company will have better crushing |
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| this year. |
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| Unfortunately,
due to record production and heavy |
|
|
| inventory
of carry over stocks, the price of sugar |
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|
| has
been depressed this year. There is a huge |
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|
|
| supply
of sugar from the mills and in comparison, |
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| the
buying spree is not very good. It is expected |
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|
| that
record production target would be achieved |
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|
| this
year. Seeing the excessive production, the |
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|
| Government
is very keen for exporting the surplus |
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| quantity.
The price in the international market is |
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| quite
low and, therefore, no major export is |
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|
|
| recorded
todate. However, with better export |
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|
| potential,
it is hoped that Pakistan would be able |
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|
| to
export the earmarked quantity. We feel 'that |
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| unless and until
the surplus quantity is routed out |
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|
| of
Pakistan, we would not see any improvement in |
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| the
price of sugar in the domestic market. |
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