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ANSARI SUGAR MILLS LIMITED
CONTENTS
Company Profile
Notice of Annual General Meeting
Vision and Mission Statement
Receiver s Report
Statement of Compliance with the Code of
Corporate Governance
Review Report to the Members on Statement of
Compliance with Best Practices of Code of
Corporate Governance
Pattern of Shareholding
Pattern of Shareholding as per
requirements of Code of Corporate Governance
Six Years' Review at a Glance
Auditors' Report
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Financial Statements
COMPANY PROFILE
RECEIVER Mr. Afaq Jamal Hussain
BOARD OF DIRECTORS Mr, Dinshaw Hoshang Anklesaria Chief Executive
(Suspended for the time being) Mr. Ahmed Khan Ansari Director
Mr. Abdul Hafeez Ansari Director
Mrs. Nasreen Ghani Ansari Director
Mr. Irnran Rasheed Ansari Director
Syed Anwar Raza Naqvi Director
Mr. S.M.Ahsan Raza Director
{Nominee of N.I.T.)
Mr. M.Manzurul Haq Director
(Nominee of N.D.F.C.}
COMPANY SECRETARY Mr. Muhammad Tahseen
BANKERS Habib Bank Limited
Muslim Commercial Bank Limited
National Bank of Pakistan
National Development Finance Corporation
Allied Bank of Pakistan
AUDITORS M/s. Khalid Majid Rahman Sarfaraz Rahim Iqbal Rafiq
Chartered Accountants
LEGAL ADVISOR Dr. Raees Mushtaq
REGISTRAR Uni Corporate & Financial Services
Westland Trade Centre,
Opp. Flyover, Shaheed-e-Millat Road,
Karachi
REGISTERED OFFICE 41-K, Block 6, P.E.C.H.S.
Karachi
FACTORY Deh Jagsiyani,
Taluka Tando Mohammad Khan
District Hyderabad, Sindh
STATEMENT UNDER SEC. 138 (2) OF THE COMPANIES ORDINANCE, 1984
MR. AFAQ JAMAL HUSSAIN HAS BEEN APPOINTED AS RECEIVER BY
THE EHTESAB BENCH LAHORE HIGH COURT VIDE ITS ORDER DATED
MAY 27,1998 AND MAY 29,1998 IN E.R. NO. 26/98, 27/98 & 28/98.
NOTICE OF ANNUAL GENERAL MEETING
The Honourable Ehtesab Bench of Lahore High Court vide its order dated October 08, 1999 has
directed the Receiver to fix the date for holding of Annual General Meeting for the purpose of
authentication of accounts in compliance with sections 158, 236 and 241 of the Companies Ordinance,1984
Notice is hereby given that the 14th Annual General Meeting of the Shareholders of ANSARI SUGAR
MILLS LIMITED, will be held on Thursday, January 29, 2004 at 8 a.m. at the registered office of the
Company situated at 41-K, Block 6, P.E.C.H.S., Karachi for transacting the following business.
ORDINARY BUSINESS:
1.       To confirm the minutes of the Annual General Meeting held on 27th March 2003.
2.       To receive, consider and adopt the audited accounts of the Company for the year ended
September 30, 2003 together with the Receiver's and Auditors' Report thereon.
3.       To appoint Auditors and to fix their remuneration.
4.       To consider any other Business with the permission of the Receiver.
for ANSARI SUGAR MILLS LIMITED
Karachi                                                                                           (AFAQ JAMAL HUSSAIN)
Dated: December 27. 2003                                                         Receiver
NOTES :
1.       The Share Transfer Books of the Company will remain closed from 19th January, 2004 to 29th
January, 2004 .
2.       A member entitled to atteud and vote at this meeting may appoint another member as his/her
proxy to attend the meeting and vote on his/her behalf. Proxies, in order to be effective, must
be received by the Company not less than 48 hours before the meeting.
3.       The share holders are requested to notify any change in their address immediately.
4.       Kindly quote your folio number in all correspondence with the Company.
VISION & MISSION STATEMENT
VISION
To make a product of International Standard acceptable as a brand in
the world market. To explore business opportunities available under
the World Trade Organization regime.
MISSION
•     To sustain contribution to the National Economy by producing cost
effective product.
•     To ensure professionalism and healthy working environment.
•     To create a reliable product through adoption of latest technology/
advancement.
•     To promote research & development and provide technical know
how to the growers for improvement of sugarcane yield/recovery.
RECEIVER'S REPORT
The Honourable Ehtesab Bench of Lahore High Court vide its order dated October 08/1999 has
directed the Receiver to fix the date for holding of Annual General Meeting for the purpose of
authentication of the accounts in compliance with sections 158, 236 and 241 of the Companies
Ordinance., 1984.
On behalf of the Company, it is my pleasure to welcome you to the 14th Annual General Meeting
of the Company. It is my privilege to present to you the financial and operating results of your
Company along with the audited accounts for the year ended September 30, 2003.
FINANCIAL RESULTS
The financial results are as follows: RUPEES RUPEES
2003 2002
Loss for the vear before taxation 61,327,218 117,243,468
Provision for taxation for the year 4,903,114 3,142,499
Loss after tax 66,230,332 120,385,967
Accumulated loss brought forward 190,819,445 70,433,478
Accumulated loss carried forward 257,049,777 190,819,445
It is evident from above that the company has achieved note worthy results in respect of reducing
its traditional losses. In last year our loss before tax was Rs. 117.243 million which has now reduced
to Rs. 61.327 million . This represents 48% improvemeuc in the current year.
OPERATING RESULTS
In 2002-2003 season, the mi" commenced crushing on December 10, 2002 and continued upto April
6, 2003. Though the industry has not yet been released from the crisis yet the operating results, like
wise financial results, are tending towards improvement. There is an increase in production and
capacity utilization by 58% and 27% respectively beside increase in recovery rate of sugar and
molasses. These indicators reflect satisfactory performance of mill for which management and staff
deserve appreciation.
A six years analysis of our financial and operating results is annexed to this report.
SALES
Average sale price of sugar during the year 2003 was 10% lower than year 2002 that effected revenue
to the Company.
FUTURE OUTLOOK
The crushing season of 2003-2004 started on November 30, 2003. On the basis of the following
production data till this report date our progress may be analyzed.
PARTICULARS SEASON SEASON
2003-04 2002-03
*   No of crushing days till todate 28 13
*   Sugar cane crushed- tonnes 148,367 76,189
*   Sugar produced- tonnes 12,785 5,818
*   Sugar recovery rate 9.411 9.311
STATEMENT ON CORPORATE AND FINANCIAL REPORTING FRAMEWORK
1         The financial statements , prepared by the Company , present fairly its state of affairs, results
of its operation, cash flow and statement of equity.
2        Proper books of account of the company have been maintained
3        Appropriate Accounting policies have been consistently applied in prepraration of the finiancial
statements, changes, if any have been adequately disclosed and accounting estimates are based
on reasonable and prudent judgement.
4        International Accouting Standard, as applicable in Pakistan, have been followed in preparation
of financial statements, and departure thereform,if any, has been adequately disclosed.
5        The system of internal control is sound in design and has been effectively implemented and
monitored.
6        There are no significant doubts upon the Company's ability to continue as a going concern.
7        Key operating and financial data for last six years in summarized form is annexed.
8        There have been no material departure from the best practices of Corporate Governance except
those mentioned in the Statement of Compliance with Code of Corporate Governance.
9         In view of the loss during the year, the Company has not declared any dividend.
10      No trades in share of the Company were carried out by the directors and their spouses and
minor children.
LABOUR MANAGEMENT RELATIONS
The management labour relations remained cordial. I take this opportunity to thank and appreciate
the spirit of understanding, goodwill and co-operation shown by the workers and hope that the same
will continue in future.
1 arn also thankful to the executives, officers and all the staff members of the Company and wish to
place on records my appreciation for their devotions, Sense of responsibility and loyalty.
AUDITORS
M/s. Khalid Majid Rahman Sarfaraz Rahim Iqbal Rafiq, Chartered Accountants retire and offer their
services for the year 2003-20U4
CODE OF CORPORATE GOVERNANCE
Statement of compliance with the Code of Corporate Governance is anexed.
PATTERN OF SHARE HOLDING
The pattern of share holding as on 30th September 2003 is annexed.
CONCLUSION
At the end, let us pray to Almighty Allah to guide us in all our pursuits for National development
and for the betterment of your organization - Ameen.
Thank you all,
for ANSARI SUGAR MILLS LIMITED
(AFAQ JAMAL HUSSAIN)
Receiver
Karachi, December 27, 2003
STATEMENT OF COMPLIANCE WITH THE CODE
OF CORPORATE GOVERNANCE
This statement is being presented to comply with the Code of Corporate Governance contained in the Listing
Regulations of Karachi, Lahore and Islamabad Stock Exchanges for the purposes of establishing a framework
of good governance, whereby a listed Company is managed in compliance with the best practices of corporate
governance.
As the Board of Directors' is suspended and Company's affairs are being managed by the Receiver appointed
by Ehtesab Bench of Lahore High Court, certain clauses of the Code which are related to the function of/by
directors and Board of Directors' are not relevant to the Company. The SECP has however relaxed the
requirements contained in the said clauses vide its letter no. SECP/ICAP/EM/36/2000/49 dated January 28,
2003 as numerated below.
Clause i) to clause (vii)
Clause viii), sub-clauses (e) and (f)
Clause ix) to clause (xii)
Clause fxiv)
Clause (xv)
Clause (xviii)
Clause (xxx) to clause (xxxiv)
As regard to remaining provisions of the Code, the Company applied principles in the following manner:
1.        Statement of Ethics and Business Practices has been prepared arid accordingly signed by all the concerned
person.
2.        Vision/Mission Statement, Overall Corporate Strategy and Significant Polices of the Company have
been developed and complete record of particulars of significant policies along with the dates on which
they were approve/a mended, is maintained by the departments.
3.        All the powers of the Board and decision-making have been duly exercised by the Receiver.
4.        The Receiver's report for this year has been prepared in compliance with the requirement of the Code
and fully describes the salient matters required to be disclosed.
5.        The company has complied with all the corporate and financial reporting requirements of the Code.
6         The directors, CEO and executives do not hold any interest in the shares of the company other than that
disclosed in the pattern of shareholding.
7.        An effective internal audit function for the company has been established.
8.        The statutory auditors of the company have confirmed that they have been given a satisfactory rating
under the quality control review program of the Institute of Chartered Accountants of Pakistan, that
they or any of the partners of the firm, their spouse and minor children do not hold shares of the company
and that the firm and all its partners are in compliance with International Federation of Accountants
(IFAC) guidelines on code of ethics as adopted by Institute of Chartered Accountants of Pakistan.
10.      It is confirmed that all material principles contained in the Code have been dully complied with.
(AFAQ JAMAL HUSSAIN)
RECEIVER.
Karachi
Dated: December 27, 2003
REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE
WITH BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE
We have reviewed the Statement of Compliance with the best practices contained in the Code of
Corporate Governance as applicable to the Company for the year ended September 30,2003 prepared
by the Receiver of Ansari Sugar Mills Limited, to comply with the Listing Regulation No.37 and
Chapter XIII of the Karachi and Lahore Stock Exchanges where the Company is listed.
The responsibility for compliance with the Code of Corporate Governance is that of the Receiver of
the Company. Our responsibility is to review, to the extent where such compliance can be objectively
verified, whether the Statement of Compliance reflects the status of the Company's compliance with
the provisions of the Code of Corporate Governance and report if it does not. A review is limited
primarily to inquiries of the Company personnel and review of various documents prepared by the
Company to comply with the Code.
A? part of the audit of financial statements we are required to obtain an understanding of the
accounting and internal control systems sufficient to plan the audit and develop an effective audit
approach. We have not carried out any special review of the internal control system to enable us to
express an opinion as to whether the Receiver's statement on internal control covers all controls and
the effectiveness °f such internal controls.
We report that:
during the year under review, relaxation from compliance with certain provisions of the Code
of Corporate Governance as pointed out in Company's Statement of Compliance has been given
by the Securities and Exchange Commission of Pakistan vide its letter
No SECP/ICAP/EM/36/2000/49 dated January 28, 2003.
Based on our review, except for matters noted in the previous paragraph, nothing has come to our
attention which causes us to believe that the Statement of Compliance does not appropriately reflect
the Company's compliance, in all material respects with the best practices contained in the Code of
Corporate Governance as applicable to the Company for the year ended September 30, 2003.
Khalid Majid Rahman Sarfaraz
Rahim Iqbal Rafiq
Chartered Accountants
Karachi
Dated: December 27, 2003
PATTERN OF SHAREHOLDING
OF THE SHARES HELD BY THE SHAREHOLDERS
AS ON SEPTEMBER 30, 2003
NUMBER OF SHARE HOLDING TOTAL
SHAREHOLDERS FROM TO SHARES HELD
546 1 100 34,836
364 101 500 91,157
266 501 1000 183,397
485 1001 5000 1,038,524
106 5001 10000 728,274
54 10001 15000 660,153
10 15001 20000 167,221
10 20001 25000 221,257
6 25001 30000 162,379
12 30001 35000 404,757
6 35001 40000 224,784
7 40001 45000 297,439
7 45001 50000 335,800
5 50001 55000 254,840
8 55001 60000 461,711
4 60001 65000 243,555
3 65001 70000 206,862
3 75001 80000 232,659
3 80001 85000 249,550
1 95001 100000 96,800
31 100001 105000 3,101,550
2 105001 110000 217,258
1 110001 115000 114,770
1 120001 125000 121,500
1 125001 130000 126,754
1 135001 140000 138,000
1 145001 150000 148,120
4 155001 160000 625,600
1 170001 175000 173,362
1 180001 185000 182,544
1 185001 190000 186,300
1 195001 200000 196,765
1 205001 210000 206,310
I 210001 215000 212,106
2 220001 225000 441,600
1 230001 235000 230,862
1 235001 240000 238,941
1 245001 250000 245,962
2 250001 255000 504,857
10 260001 265000 260,945
1 265001 270000 266,570
1 270001 275000 272,090
1 275001 280000 276,747
1 290001 295000 293089
2 310001 315000 624,105
1 315001 320000 315,915
1 345001 350000 349,715
2 410001 415000 827,808
1 605001 610000 609,109
1 790001 795000 790,248
1 1020001 1025000 1.022.263
1 1345001 1350000 1,345,500
1 3440001 3445000 3,443,978
1977 24,407,198
S.No.   Category No. of Shareholders Total Shares Held Percentage %
1        Individuals 1,948 16,591,352 67.98
2        Joint Stock Companies 9 1,185,654 4.86
3        Financial Institutions 6 5,099,958 20.9
4        Insurance Companies  6 5 817,954 3.35
5        Investment Companies 701,090 2.87
6       Modaraba 3 11,190 0.05
1,977 24,407,198 100
PATTERN OF SHAREHOLDING AS AT SEPTEMBER 30, 2003
AS PER REQUIREMENTS OF
THE CODE OF CORPORATE GOVERNANCE
Category Number of shares held Category wise No. of shareholders Category wise shares held Percentage %
JOINT STOCK COMPANIES 9 1,185,654 4.86
INVESTMENT COMPANIES 5 701,090 2.87
DIRECTORS, CHIEF EXECUTIVE AND
THEIR SPOUSE AND MINOR CHILDREN 6 1,043,805 4.28
Mr. AlirrtpH Khan Ansari 269,013
Mr. Abdul Hafeez Ansari 48,990
Mrs. Nasreen Ghani Ansari 33,350
Mr. Tmran Rasheed Ansari 413,108
Mr. Dinshaw Hoshang Anklesaria 96,800
S. Anwar Raza Naqvi 182,544
S. M. Ahsan Raza ( Nominee of NIT ) -
Mr. Manzurul Haq (Nominee of NBP - formerly NDFC) -
NIT/ICP 2 3,858,678 15.81
National Bank of Pakistan - Trustee Department 3,443,978
Investment Corporation of Pakistan 414,700
BANKS, DFTs, NBFIs, INSURANCE COMPANIES,
MODARABAS AND MUTUAT FUNDS 13 2,070,424 8.48
INDIVIDUALS 1,942 15,547,547 63.7
1,977 24,407,198 100
Shareholders holding ten percent or more voting interest in the Company
Name of Shareholders No. of Shares held Percentage
National Bank of Pakistan - Trustee Department 3,443,978 14.11
SIX YEARS' REVIEW AT A GLANCE
2003 2002 2001 2000 1999 1998
................... (Rs. in 000) .............
FINANCIAL RESULTS
Sales 980,623 628,500 855,343 827,589 918,065 782,308
Gross profit/ (loss) 38,247 -29,767 122,518 64,915 133,619 37,338
Operating prof it/ (loss) 712 -66,978 75,261 11,397 76,068 3,840
Prof it/ (loss) before taxation -61,327 -117,243 23,180 -33,188 -46,898 -107,782
Prof it/ (loss) after taxation -66,230 -120,386 18,903 -37,326 -52,561 -111,694
Accumlated (loss)/profit for the year -257,050 -190,819 -70,433 -89,337 -52,011 551
OPERATING RESULTS
Season Started 10-12-2002 09-11-2001 07-11-2000 25-10-1999 11-11-1998 25-10-1997
Season Closed 06-04-2003 22-03-2002 15-03-2001 02-03-2000 16-03-1999 27-03-1998
Days Worked 117 134 129 130 126 152
Sugarcane crushed (tonnes) 633,045 403,469 442,853 491,757 651,224 554,718
Sugar recovery (%) 11 10 10 10 10 10
Sugar produced (tonnes) 64,065 40,632 43,355 47,270 62,426 58,055
Molasses recovery- / o/ \ ( /o ) 5.568 5.251 5.394 5.025 5.002 5.218
Molasses produced (tonnes) 35,252 21,194 23,881 24,704 32,577 28,944
Operating period ( days ) 117 134 129 130 126 152
Capacity utilized (%) 74 47 50 55 72 67
ASSETS EMPLOYED
Fixed capiidl expenditure 865..590 908,788 956,245 1,003,730 1,014,840 1,044,214
Long term loans and deposits 559 680 876 937 992 943
Current assets 243,095 268.126 236,154 169,875 217,475 190,028
T otal Assets Employed 1,109,244 1,177,594 1,193,275 1,174,542 1,233,307 1,235,185
FINANCED BY
Shareholders' equity 20,022 80,253 200,638 181,735 219,061 271,623
Long term liabilities 624,310 639,006 623,446 700,124 270,599 382,654
Deferred liabilities 7,627 9,095 16,677 14,381 327,978 196,855
Current liabilities 463,471 449,240 352,514 278,302 415,669 384,053
Total Funds Invested 1,109,430 1,177,594 1,193,275 1,174,542 1,233,307 1,235,185
Break-up Value per Share 0.82 3.29 8.22 7.45 8.98 11.13
Earnings per Share -2.71 -4.93 0.77 -1.53 -2.15 -4.58
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed balance sheet of Ansari Sugar Mills Limited as at September 30, 2003, and the
related profit and loss account, cash flow statement and statement of changes in equity 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.
It is the responsibility of the Company's management to establish and maintain a system of internal control,
and prepare and present the above said statements in conformity with the approved accounting standards and
the requiiements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these
statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards
require that we plan and perform the audit to obtain reasonable assurance about whether the above said
statements are free of any material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the above said statements. An audit also includes assessing the
accounting policies and significant estimates made by management, as well as, evaluating the overall presentation
of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after
due verification, 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 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 except for calssification
as referred to in note 4 (b) (iii);
(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)    except for the effect of matters referred to in note 4 (b) (ii), 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, cash flow statement
and statement of changes in equity together with the notes forming part thereof, conform with approved
accounting standards as applicable in Pakistan, and, 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, 2003, and of the loss, its cash flows and changes in equity for the
year then ended; and
(d)    in our opinion, no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of
1980).
KHALID MAJID RAHMAN SARFARAZ
RAHIM IQBAL RAFIQ
Chartered Accountants
Karachi
Dated: December 27, 2003
BALANCE SHEET
Note 2003 2002
Rupees Rupees
SHARE CAPITAL AND RESERVES
Authorised Capital
30,000,000 Ordinary Shares of Rs. 10/- each 300,000,000 300,000,000
Issued, subscribed and paid up capital 3 244,071,980 244,071,980
General reserve 27,000,000 27,000,000
Unappropriated loss 257,049,777 -190,819,445
14,022,204 80,252,535
LONG TERM LOANS - SECURED
Interest bearing 4(a) 169,269,314 197,309,007
Non-interest bearing 4(b) 455,041,153 441,697,130
624,310,467 639,006,137
DEFERRED LIABILITIES 5 7,627,289 9,094,916
CURRENT LIABILITIES
Current portion of long term loans 6 194,612,769 191,905,886
Creditors, accrued and other liabilities 7 244,839,318 234,739,946
Taxation 24,019,095 22,594,551
463,471,182 449,240,383
CONTINGENCIES AND COMMITMENTS 8
1,109,431,141 1,177,593,971
The annexed notes form an integral part of these financial statements.
Persuant to order of the Ehtesab Bench of Lahore High Court on CM26/99, the Balance Sheet and
Profit & Loss Account has been authenticated by the Receiver to comply with the requirements of
section 241 of the Companies Ordinance, 1984.
Note 2003 2002
Rupees Rupees
FIXED CAPITAL EXPENDITURE
Operating fixed assets - Tangible 9 865,590,017 908,788,039
Capital work in progress 187,500 -
LONG TERM LOANS 10 111,450 232,195
LONG TERM DEPOSITS 447,526 447,526
CURRENT ASSETS
Stores, spares and loose tools 11 18,239,847 17,679,462
Stock in trade 12 142,285,056 155,157,437
Trade debts - unsecured considered good 13 5,922,366 5,922,366
Loans and advances - unsecured 14 34,668,505 34,126,577
Prepayments and other receivables 15 15,177,408 21,587,070
Cash and bank balances 16 26,801,466 33,653,299
243,094,648 268,126,211
1,109,431,141 1,177,593,971
AFAQ JAMAL HUSSAIN
RECEIVER
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED SEPTEMBER 30, 2003
Note 2003 2002
Rupees Rupees
SALES - Net  17 980,622,883 628,499,811
Cost of goods sold  18 -942,375,432 -658,266,367
Gross profit  38,247,451 -29,766,556
OPERATING EXPENS ES
Administration and gen eral 19 35,915,158 36,312,311
Selling and distribution  20 1,619,995 i 899,281
37,535,153 37,211,592
OPERATING PROFIT/  (LOSS) FOR THE YEAR 712,298 -66,978,148
Financial charges  21 61,698,077 58,703,007
Other charges  22 362,800 220,013
Other (income)/ loss  23 -21,361 -319,297
62,039,516 58,603,723
NET LOSS FOR THE Y EAR -61,327,218 -125,581,871
Unusai items  24 - 8,338,403
NET LOSS BEFORE TA XATION -61,327,218 -117,243,468
Provision for taxation - c urrent 4,903,114 3,142,499
NET LOSS AFTER TA XATION -66,230,332 -120,385,967
Unappropriated loss bro ught forward -190,819,445 -70,433,478
Unappropriated loss car ried forward -257,049,777 -190,819,445
Earnings per share   - Ba sic 28 -2.71 -4.93
The annexed notes form an inte°jal part of these financial statements.
AFAQ JAMAL HUSSAIN
RECEIVER
CASH FLOW STATEMENT
FOR THE YEAR ENDED SEPTEMBER 30, 2003
2003 2002
Rupees Rupees
CASH FLOW FROM OPERATING ACTIVITIES
Profit/ (Loss) before tax -61,327,218 -117,243,468
Adjustments for:
Depreciation 9.1 47,710,406 49,861,220
Deferred Mark-up Capatalised 4(b) (ii) 27,187,922 -
Financial charges 21 61,698,077 58,703,007
Gain on sale of fixed assets 9.2 -21,361 -319,297
136,575,044 108,244,930
Operating Profii/(Loss) before changes
in Working Capital 75,247,826 -8,998,538
Changes in Working Capital
(Increase)/Decrease in Current Assets
Stores, spares and loose tools 11 -560,385 1,635,582
Stock in trade 12 12,872,381 -74,197,156
Trade debts 13 - 16,620,427
Loans and advances 14 533,632 -4,184,544
Prepayment? and other receivables 15 6,928,566 -2,554,024
19,774,194 -62,679,715
95,022,020 -71,678,253
Increase/ (Decrease) in Current Liabilities
Creditors, accrued and other liabilities 7 11,034,713 114,998,972
Cash generated from operating activities 106,056,733 43,320,719
Taxes paid -5,086,926 -4,886,952
Financial charges paid -62,595,273 -76,118,005
Net cash generated from operating activities 38,374,534 (37,684,238)  ,
2003 2002
Rupees Rupees
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed capital expenditure -4,851,867 -3,232,527
Proceeds from disposal of fixed assets 9.2                  173,344 1,147,293
Long term loans 10                    96,492 -110,124
Long term deposits - 299,539
Net cash used in investing activities -4,582,031 -1,895,819
CASH FLOWS FROM FINANCING ACTIVITIES
Long term loans obtained / adjusted _ 44,945,667
Repayment of long term loans                                      4 (a) & 4(b)      (39,176,709) -29,692,303
Increase /(decrease) in deferred liabilities 5               (1,467,627) -7,581,890
Net cash (used in) /generated from financing activities -40,644,336 7,671,474
Net increase/ (decrease) in cash and cash equivalents -6,851,833 -31,908,583
Cash and cash equivalent at the beginning of the year 33,653,299 65,561,882
Cash and cash equivalent at the end of the year 26,801,466 33,653,299
CASH AND CASH EQUIVALENTS COMPRISE OF:
Cash and Bank Balances 16              26,801,466 33,653,299
The annexed notes form an integral part of these financial statements.
AFAQ JAMAL HUSSAIN
RECEIVER
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED SEPTEMBER 30, 2003
Share General Accumulated Total
Capital Reserve Loss
Rupees Rupees Rupees Rupees
Balance as at September 30, 2001 244,071,980 27,000,000 -70,433,478 200,638,502
Loss for the year - - -120,385,967 -120,385,967
Balance as at September 30, 2002 244,071,980 27,000,000 -190,819,445 80,252,535
Loss for the year - - -66,230,332 -66,230,332
Balance as at September 30, 2003 244,071,980 27,000,000 -257,049,777 14,022,203
The annexed notes form an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED SEPTEMBER 30, 2003
1.     STATUS AND NATURE OF BUSINESS
1.1   The Company was incorporated in Pakistan on July 09,1989 as a Public Limited Company
and its shares are quoted in Karachi and Lahore Stock Exchanges. The principal business
of the Company is to manufacture and sale of sugar.
1.2   Pursuant to the order of the Honourable Lahore High Court, since July 02,1998 the Receiver
continue to manage and control the Mill as well as discharge all financial responsibilities.
In 1999 the Ehtesab Bench of the Honourable Lahore High Court allowed the Receiver to
comply with the requirements of sections 158, 236 and 241 of the Companies Ordinance,
1984 in place of the Directors. The Receiver has accordingly authenticated the financial
statements for the year.
2.     SIGNIFICANT ACCOUNTING POLICIES
2.1   Basis of preparation
These financial statements have been prepared under the "historical cost convention".
2.2   Statement of compliance
These financial statements have been prepared in accordance with approved accounting
standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984.
Approved accounting standards comprise of such International Accounting Standards as
notified under the provisions of the Companies Ordinance, 1984. Wherever, the requirements
of the Companies Ordinance, 1984 or directives issued by the Securities and Exchange
Commission of Pakistan differ with the requirements of these standards, the requirements
of Companies Ordinance, 1984 or the requirements of the said directives take precedence.
2.3   Employees' retirement benefits
The Company operates a defined Contributory Provident Fund for all its employees eligible
under the scheme. The scheme is approved under the Income Tax Ordinance, 1979. Monthly
contributions are made both by the Company and by the employee to the fund at a rate
of 8.33% of basic pay.
2.4   Provisions
Provisions are recognized when the Company has a present legal or constructive obligation
as a result of past events and it is probable that outflow of resources embodying economic
benefits will be required to settle the obligations and a reliable estimate of the obligation
can be made.
2.5  Taxation
Current
The provision for current taxation is based on taxable income at the current tax rates, after
considering admissible tax credits, if any, or one half percent of turnover, whichever is
higher.
Deferred
Deferred tax liability/ asset, if any, is accounted for using the liability method of all major
taxable/ deductable temporary differences. Deferred tax assets is recognized only to the
extent that it is probable that future taxable profits will be available against which these can
be utililized.
2.6   Operating fixed assets
These are stated at cost less accumulated depreciation except freehold land which is stated
at cost.
Depreciation is charged to income using the reducing balance method whereby the cost of
an asset is written off over its estimated useful life.
Full year's depreciation is charged on all assets, including additions during the year. 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.
Gains and losses on disposal of assets are included in current income.
2.7   Financial assets
Financial assets are loans, advances (excluding advance income tax), deposits, trade debts,
other receivable and cash in hand and bank balances. These are initially recognized at its
cost which represent the fair value of consideration given for it and subsequent to initial
recognition financial assets are carried at cost, if fair value is not materially different at the
balance sheet date.
2.8   Inventories
The basis of valuation has been specified against each:
Stores, spares and loose tools
In hand         --         At moving average cosl.
In transit        —         Actually incurred cost upto the balance sheet date.
Stock in trade
In process      --         At average raw material cost
Finished        —         At a lower of average manufacturing cost and net realizable value.
Molasses
These are valued at net realizable value.
Provision is made for slow moving and obsolete items.
2.9    Trade debts & other receivables
Trade and other receivables, considered irrecoverable are written off and provision is made
for debts and receivables considered doubtful.
2.10  Financial liabilities
Financial liabilities are classified according to the substance of the contractual agreements
entered into. Significant financial liabilities are long-term loans, creditors, accrued and other
liabilities (excluding Sale tax payable and withholding tax deducted).
All financial liabilities are initially recognized at cost, which represents fair value of the
consideration received at initial recognition. After initial recognition financial liabilities
are carried at fair value except long term loans which are measured at amortized cost.
' Finacial instruments (financial assets and financial liabilities) are offset when the Company
has a legally enforceable right to offset and intends to settle either on a net basis or to realize
the asset and settle the liability simultaneously.
2.12  Impairment of assets
In accordance with IAS-36 'Impairment of Assets', assets are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of these
assets may not be recoverable.Whenever the carrying amount of these assets exceed their
recoverable ?*nount, an impairment loss is recognized in the profit and loss account.
2.13  Revenue Recognition
*  Sales are recorded on dispatch of goods.
*  Interest, profit and income from investment is recorded on accrual basis.
3.    ISSUED, SUBSCRIBED AND PAID UP CAPITAL
Number of Shares
2003 2002 2003 2002
Rupees Rupees Rupees Rupees
18,296,250 18,296,250 Fully paid ordinary shares of Rs. l0/- each issued for cash. 182,962,500 182,962,500
6,110,948 6,110,948 Fully paid ordinary shares of Rs. 10/- each issued as bonus
shares 61,109,480 61,109,480
24,407,198 24,407,198 244,071,980 244,071,980
4(a)         LONG TERM LOANS - INTEREST BEARING
RESCHEDULED
GENERAL TERM FINANCE DEMAND FINANCE LOAN L.C.Y. 2003 2002
PARTICULARS P.I.C.I.C. N.B.P. I N.B.P. II MCB ABL N.B.P. (Formerly NDFC)
RUPEES RUPEES RUPEES RUPEES RUPEES RUPEES RUPEES RUPEES
As at 1st October 2002 31,171,546 34,305,138 116,457,257 24,737,633 9,291,824 168,466,435 384,429,833 412,811,686
Repaid/ Adjusted
during the year -4,985,000 - - -6,766,477 -9,291,824 -15,315,130 -36,358,431 -28,381,853
26,186,546 34,305,138 116,457,257 17,971,156 - 153,151,305 348,071,402 384,429,833
Current portion -4,985,000 -34,305,138 -116,457,257 -7,739,563 - -15,315,130 -178,802,088 -187,120,826
21,201,546 - - 10,231,593 - 137,836,175 169,269,314 197,309 007
Significant terms and conditions:
Instalment payment Quarterly Semi Annually Semi Annually Semi Annually Quarterly Semi Annually
No. of instalment 39 14 12 8 8 23
Date of first instalment 01-10-99 30-12-92 31-03-97 31-03-2002 1999-2000 30-04-2002
Rate of interest per annum 14% 44 paisas 51 paisas 14% 14% 15%
per Rs. per Rs.
thousand thousand
per day per day
Sub note number 4(a) (ii) 4(a)(iii)(a) 4(a) (iii)(b) 4(a) (v) 4(a) (iv) 4(a) (i)
4(b)         LONG TERM LOANS   INTEREST FREE
PARTICULARS L.C.Y. DEMAND FINANCE G.T.F UNSECURED LOAN FROM 2003 2002
N.B.P.(FormerlyNDFC) ABL P.I.C.I.C. N.B.P. SPONSORS
RUPEES RUPEES RUPEES RUPEES RUPEES RUPEES RUPEES
As at 1st October 2002 209,472,967 15,992,466 18,432,197 200,384,559 2,200,000 446,482,189 402,846,972
Adjustments during the year - - - -124,062
209,472,967 15,992,466 18,432,197 200,384,559 2,200,000 446,482,189 402,722,910
Markup capatalised/
Addition during the year - 27,187,922 - 27,187,922 44,945,667
209,472,967 15,992,466 18,432,197 227,572,481 2,200,000 473,670,111 447,668,577
Repaid during the ypar -1,905,342 - -912,935 - - -2,818,277 -1,186,388
207,567,625 15,992,466 17,519,262 227,572,481 2,200,000 470,851,834 446,482,189
Current poi lion -4,202,611 -10,000,000 -1,608,070 - - -15,810,681 -4,785,059
203,365,014 5,992,466 15,911,192 227,572,481 2,200,000 455,041,153 441,697,130
Significant terms and conditions:
Installment payment Half Yearly Quarterly Quarterly
No. of installment 24 8 39
Date of first installment 31.10.2001 2003-2004 01-10-99
Sub note number 4(b) (i) 4(a) (iv) 4(a)(ii) 4(b) (ii)
4 (a) (i) National Bank of Pakistan (formerly NDFC)
This represents the balance of long-term loan rescheduled as per agreement date
February 15, 2001 subject to the following conditions:
1)  Without the prior written approval of National Development Finance Corporation, th
Company shall not:
-   declare and/or pay any dividend or issue bonus shares till any amount is due.
-   transfer controlling shares to any other group/party without written approval c
National Development Finance Corporation.
-   repay loans/advances to any director .
2)  In the event of non-payment of two consecutive installments or any failure to compl
with or owing to any violation/deviation of any of the terms and conditions of th
package, it may stand as withdrawn and reverted to original position/recalling c
outstanding loans liabilities.
Security:
The loans are secured by wav of creating a mortgage on the immovable propertie:
pledge and hypothecation of movable properties of the Company both present an
future including book debts, receivables and hypothecation of machinery purchase
under the agreement and personal guarantees as per Personal Networth Survey (PNW'
of the sponsoring Directors and pledge of sponsors' shares. A floating charge on all othc
properties and assets of the Company.
The securities shall rank pari-passu with other creditors.
4 (a)(ii) Pakistan Industrial Credit and Investment Corporation
Security:
The finances are secured through first charge by way of an equitable mortgage c
immovables properties, hypothecation of plant and machinery, and a floating charge o
all other assets.
The securities shall rank pari-passu with other creditors.
4 (a)(iv) Allied Bank of Pakistan Limited
Security:
The loan is secured by way of floating charge on the current assets of the Company,
personal guarantees of all the sponsoring directors and the guarantee of the Company.
4 (a)(v) Muslim Commercial Bank Limited
The Finance has been restructured/rescheduled by transferring short term finance to
long term during the year 2000. In the event of the failure to comply with any of the term
of rescheduling package and non payment of two installments, the package will be
withdrawn and liabilities will be reinstated with retrospective effect and will become
payable immediately.
Security:
The negotiations are being made to create second charge with other creditors on all assets
of the Company and fresh personal guarantees of sponsors/ directors.
4 (b)(i)  National Bank of Pakistan (formerly NDFC)
This represents the markup on loans rescheduled /restructured amounting to Rs. 140.470
million and on other outstanding loan of as referred in 4(a) i) amounting to Rs. 102.206
4 (b)(ii) National Bank of Pakistan
This represents the accumulated outstanding markup on long term loan from National
Bank of Pakistan Limited upto 30th September 2003. The restructuring package of
National Bank of Pakistan Limited loans is under process.
4 (b)(iii)The company's request for restructuring its current and overdue markup liability is
pending since the year 1999 with the bank for approval. The company has transferred
the same to non interestbearing freezed markup, repayable on long term basis on the
strength of similar conversion approved by other financial institutions.
I lad the change in classification from short term to long term not been made, the total
current liabilities would have been higher by and long term loan lower by Rs. 227.573
million.
2003 2002
Rupees Rupees
5.     DEFERRED LIABILITIES
Surcharge on cess 7,627,289 17,433,319
Reversal of liabilities - -8,338,403
7,627,289 9,094,916
It respresents surcharge on road cess payable to growers.
6.    CURRENT PORTION OF LONG TERM LOAN
Interest bearing 178,802,088 187,120,826
Non-interest bearing 15,810,681 4,785,059
194,612,769 191,905,885
2003 2002
Rupees Rupees
7.    CREDITORS, ACCRUED AND OTHER LIABILITIES
Creditors 181,249,232 134,561,503
Accrued liabilities
Accrued expenses 9,286,217 6,399,063
Accrued interest / mark-up on
secured loans / finances 9,881,957 10,779,153
19,168,174 17,178,216
Other liabilities
Sales tax payable 15,699,366 9,348,061
Employees providend fund 319,783 -
Withholding income tax deducted 18,401 56,546
Retention money 2,141,909 2,105,533
Worker's Profit Participation Fund 1,111 1,421,312
Advance from customers 23,859,137 68,083,011
Others 2,382,205 1,985,764
44,421,912 83,000,227
244,839,318 234,739,946
8.    CONTINGENCIES
i) Excise duty rebate on excess production during the crushing season 1993-94 over the
previous three years average production amounting to Rs.22.40 million refunded by the
Central Board of Revenue has been claimed back by the Collector of Customs and Central
Excise on the ground that the amount was erroneously refunded. The matter is pending
with the relevant authorities. The demand has since been stayed, the Company expects a
favorable decision as such no provision has hence been made against the said claim.
ii) Excise duty claimed by the Collector of Customs and Central Excise in respect of crushing
season 1992-93 amounting to Rs.11.969 million on excess production over previous three
years. A stay has been granted by the Customs, Excise and Sales Tax Appellate Tribunal
Karachi, against the same. No provision has been made as in view of legal advisor the
Company expects a favorable outcome.
Sales Tax on baggase used in production during crushing season 1996-97 vide letter No.
C. No. 19-ST/misc/Sugar/C&E/98/8743. The above claim has been challenged by the
Company before Customs, Sales tax and Central Excise Tribunal Karachi vide appeal No.
623 of 1998 dated 26th February, 2000. No provision has been made as the Company expects
a favorable outcome.
iv) Additional Collector of Sales Tax (Adjudication) has passed an order relevant to the years
ended 1999 and 2000 based on audit carried out by the Special Auditors under section 32
A of the Sales Tax Act, 1990 raising a demand of Rs. 13.5 million (approx) on account of
principal amount of sales tax. The company is filing an appeal in the Sales Tax Appellate
Tribunal against the said order and is confident that the allegations made in the order will
not be materialise due to concrete explanation and documents available, it does not expect
any liability in this account hence not made any provision in this respect.
9.    OPERATING FIXED ASSETS - TANGIBLE
COST DEPRECIATION
W.D.V.
PARTICULARS AS ON ADDITION/ AS ON RATE AS ON FOR THE AS ON AS ON
01-10-2002 (DISPOSALS) 30-09-2003 % 01-10-2002 YEAR 30-09-2003 30-09-2003
Freehold land 9,252,730 _ 9,252,730 _ _ _ . 9,252,730
Factory building 127,878,620 61,022 127,939,642 5 38,745,397 4,459,712 43,205,109 84,734,533
Non-factory building 26,750,769 270,000 27,020,769 10 13,169,368 1,385,140 14,554,508 12,466,261
Plant and machinery 1,092,867,993 1,800,000 1,094,667,993 5 310,786,905 39,194,054 349,980,959 744,687,034
Electric installation 7,162,769 16,863 7,179,632 10 3,249,913 392,972 3,642,885 3,536,747
Weighbridge 878,917 - 878,917 10 593,349 28,557 621,906 257,011
Office equipment
and others 4,292,932 141,400 4,225,192 10 2,049,849 229,446 2,160,182 2,065,010
-209,140 -119,112
Electrical appliances 3,532,692 101,400 3,634,092 10 1,626,287 200,781 1,827,068 1,807,024
Furniture and fixture 2,356,706 30,850 2,387,556 10 1,409,270 97,829 1,507,099 880,457
Vehicles 13,184,423 1,160,850 14,049,850 20 8,172,731 1,222,117 9,161,380 4,888,470
-295,423 -233,468
Tents and tarpaulins 1,481,187 1,003,750 2,484,937 33 1,214,938 419,100 1,634,038 850,899
Tools and tackles 1,521,711 78,232 1,609,943 33 1,365,402 80,699 1,446,101 163,842
TOTAL 2003 1,291,171,448 4,664,367 1,295,331,252 382,383,409 47,710,406 429,741,235 865,590,017
-504,563 -352,580
TOTAL 2002 1,289,689.10 3,232,527 1,291,171,448 333,444,373 49,861,220 382,383,409 908,788,039
-1,750,180 -922,184