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THE FRONTIER SUGAR MILLS & DISTILLERY LIMITED
Annual Reports 2003
Board of Directors
Notice of Meeting
Directors' Report
Form 34
Ten Years' Review
Ten Years Growth at a Glance
Vision , Mission Statement,
Strategic Goals, Core Values
Statement of Ethics And Business Practices
Statement of Compliance with Best Practices of
the Code of Corporate Governance
Review Report
Auditors' Report
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
BOARD OF DIRECTORS
CHAIRPERSON MS. NAJDA SARFARAZ
CHIEF EXECUTIVE BEQUM ZAR! SARFARAZ
DIRECTORS KHAN AZIZ SARFARAZ KHAN
BEGUM LAILA SARFARAZ
ISKANDER M. KHAN
ABDUL QADAR KHATTAK
MS. ZAEMINE SARFARAZ
BOARD AUDIT COMMITTE BEGUM ZARI SARFARAZ CHAIRPERSON
AZIZ SARFARAZ KHAN MEMBER
ISKANDER M. KHAN SECRETARY
COMPANY SECRETARY  MALIK MOHAMMAD ASLAM, FCMA
CHIEF FINANCIAL OFFICER
AUDITORS MESSRS HAMEED CHAUDHRI & CO.,
CHARTERED ACCOUNTANTS
COST AUDTIORS        MESSERS MUNAWAR ASSOCIATES,
CHARTERED ACCOUNTANTS
TAX CONSULTANT MAHMOODA MIRZA ADVOCATE
LEGAL ADVISOR QAZI MUHAMMAD ANWAR ADVOCATE
BANKERS HABIB BANK LIMITED
NATIONAL BANK0£ PAKISTAN
UNITED BANK LIMITED
ALLIED BANK LIMITED
MUSLIM COMMERCIAL BANK
BANK OF KHYBER
BANK ALFALAH ^pTED
STANDARD CHA^IRED BANK
PICIC. COMERCIAL BANK
REGISTERED OFFICE MARDAN
FACTORY TAKHT-I-BHAI DISTT. MARDAN
PHONES: (0931 )551051-551 049-551 041
FAX: (0931) 552878
THE FRONTIER SUGAR MILLS & DISTILLERY LTD.
NOTICE OF MEETING
NOTICE IS HEREBY GIVEN that 66th Annual General Meeting of the shareholders
of The Frontier Sugar Mills & Distillery Limited will be held on 31st December, 2003
at 10:30 AM at the Registered Office of the Company at Mardan, for the
transacting the following business.
1.        To confirm the minutes of the last meeting held on 20th March, 2003.
2.        To receive and consider the audited  Balance Sheet,  Profit and  Loss
Account, Cash flow statement and statement of changes in equity together
with the notes of accounts, Directors' and Auditors' Reports for the year
ended 30th September, 2003.
3.        To appoint auditors for the year 2003-2004 and to fix their remuneration.
4.        To transact any other ordinary business of the Company as may be
permitted by the Chair.
By order of the Board
Mardan: 08 December 2003                  (MALIK MUHAMMAD ASLAM) FCMA
COMPANY SECRETARY
N.B:                    1.        Member unable to attend in person may kindly send proxy form attached
with the Balance Sheet signed and witnessed to the Company at least 48
hours before the time of the meeting. No person shaff act as proxy unless
he is entitled to be present and vote in his own right.
2.          Members are requested to notify any change in address immediately.
3          C.D.C. shareholders desiring to attend the meeting are requested to bring
their original National Identity Cards, Account and participants I.D.
numbers, for identification purpose, and in case of proxy, to enclose as
attested copy of his / her National Identity Card.
DIRECTORS' REPORT
The Board of Directors of The Frontier Sugar Mills & Distillery Limited has pleasure in presenting
the directors report of the Company, together with the audited financial statements for the year
ended 30 September 2003.
1 .          SUMMARISED FINANCIAL RESULTS. 2003 2002
Rupees Rupees
Profit/(Loss) before taxation 2,635,154 -7,011,649
Taxation
- current year 900,000 720,000
- prior years' 0 -143,443
- deferred 1.305,000 0
2,205,000 576,557
Profit/(Loss) After Taxation 430,154 -7,588,206
Transferred from surplus on revaluation
of fixed assets on account of incremental depreciation for
- prior years' 10,528,643 0
- current year 4,464,741 0
Surplus on revaluation of fixed assets 237,848 0
15,661,386 -7,588,206
Unapproprated Profit- Brought forward 302,654 5,860
Profit/(Loss) available for appropriation 15,964,040 -7,582,346
Approprations:
Transfer from to general reserve -15,000,000 8,900,000
Proposed dividends on:
-   ordinary shares-Nil (2002:@ Re. 0.70 per shares) 0 -945,000
- preference shares -Nil
(2002:@ Re. 0.70 per shares for two years) 0 -70,000
-15,000,000 -7,885,000
Unapproprated Prodit -Carried to balance sheet 964.04 302,654
Earnings/(Loss) per share- Basic 0.32 -5.62
2.          REVIEW OF OPERATIONS.
2.1   SUGARCANE SEASON 2002-2003
Sugarcane crushing season started on 20th November 2002 and ended on 18th April 2003, after
crushing 110,158 tons of sugarcane and producing 10,680.25 tons of sugar at an average
recovery of 9.70 %. The supply of sugarcane this year was better than last year, but still 70% of
our production capacity.
The country recorded its highest sugar production this year at 3.686 million tons, while its should
have been a period of celebration, we are mourning it because huge carry over stock of last year
coupled with record production this year, the sugar prices have been depressed in the market far
below the cost of production. The result is that we can not dispose off surplus stock, the situation
has become very alarming. To remedy the situation the only course is export of surplus sugar to
stabilize the local market
2.2   SUGARBEET SEASON 2003
Sugarbeet season lasted from 12th May to 14th June 2003. We sliced 40,866 tons of sugarbeet
and produced 4,175.70 M. tons sugar at a recovery of 10.24%. Due to favourable weather
conditions the recovery was better than last year. However due to low sugar prices the financial
results are not favourable.
2.3   DISTILLERY
The Distillery plant remains closed due to very low prices of spirit in the local market.
3.           DIVIDEND
The directors do not recommend payment of dividend due very low profit for the year.
4.           STAFF
The Labour and Management relations remained cordial during the year. 2 V2 month bonus was
paid for the year ended 30th September 2003 to all employees of the Company.
5.           CURRENT SEASON 2002-2003
Sugarcane crushing season has started on 29th November 2003, crushed 9,600 tons of
sugarcane and produced 728 tons of sugar at an average recovery of 8.60 upto 8th December
2003. Due low price of gur we expect the factory will worked at its full capacity.
6.           SUGARBEET CROP 2004
The area under sugarbeet crop this year is slightly more than last year. The factory will start
sugarbeet season in May, 2004. However if the prices of sugar remain depressed, the factory will
also suffer more loss during the sugarbeet season 2004.
CORPORATE AND FINANCIAL REPORTING FRAMEWORK
The financial statements, prepared by the management of The Frontier Sugar Mills & Distillery
Limited, present fairly its state of affairs, the result of its operations, cash flows and changes in
equity.
Proper books of account of The Frontier Sugar Mills & Distillery Limited have been maintained.
Appropriate accounting policies have been consistently applied in preparation of the financial
statements and accounting estimates are based on reasonable and prudent judgment.
International Account Standards (lASs), except for lASs mentioned in the financial statement as
applicable in Pakistan have been followed in preparation of the financial statements.
The system of internal controls is sound in design and has been effectively implemented and
monitored.
There has been no material departure from the best practices of corporate governance, as
detailed in the listing regulations.
Key operating and financial data for the last ten years in summarized form is annexed.
There are no statutory payments on account of taxes, duties, levies and charges which are
outstanding as 30 September 2003 except for those disclosed in the financial statements.
The value of investments of staff provident fund, based on audited accounts, was Rs. 19 million
as at 30 September 2003.
During the year 5 meetings of the Board of Directors were held. Attendance by each director was
as follows:
NAME OF DIRECTORS NO OFiWEETINGS ATTENDED
Begum Zari Sarfaraz 5
Aziz Sarfaraz Khan 5
Iskandar M. Khan 5
Abdul Qadar Khattak 5
Begum Laila Sarfaraz 4
Zarmine Sarfaraz -
Najda Sarfaraz 4
Leave of absence was granted to directors who could not attend some of Board meetings.
The pattern of shareholding and additional information regarding pattern of shareholding is
included in this annual report.