| Kohinoor Sugar Mills Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 2000 |
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|
| CONTENTS |
|
|
| Board
of Directors |
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditors'
Report |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Statement
of Changes in Equity |
|
| Notes
to the Accounts |
|
| Pattern
of Holding of the Shares |
|
|
|
| BOARD
OF DIRECTORS |
|
|
| M.
USMAN SAIGOL |
|
Chief Executive |
|
| M.
FAROOQUE SAIGOL |
|
| M.
SALEEM SAIGOL |
|
| TARIQ
REHMAN |
|
| KHAWAJA
KHURSHID ANWAR |
|
| SHEIKH
ZAHID SULTAN |
|
| MUHAMMAD
NAWAZ TISHNA |
N.I.T. |
|
|
| AUDITORS |
|
| M/S.
S. M. MASOOD & CO |
|
| Chartered
Accountants |
|
|
| BANKERS |
|
| CRESCENT
INVESTMENT BANK LIMITED |
|
| MUSLIM
COMMERCIAL BANK LIMITED |
|
| FAYSAL
BANK LIMITED |
|
| HABIB
BANK LIMITED |
|
|
| REGISTERED
OFFICE- |
|
| 18
- MAIN GULBERG, |
|
| LAHORE. |
|
|
| MILLS |
|
| JAUHARABAD, |
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| DISTRICT
KHUSHAB |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the Thirty-second Annual General Meeting of Kohinoor
Sugar Mills |
|
| Limited
will be held at the Registered Office of the Company at 18-Main Gulberg,
Lahore on Saturday, |
|
| March
31, 2001 at 11.00 a.m. to transact the following business: |
|
|
| 1.
To confirm the minutes of the Thirty-first Annual General Meeting held on
March 31, 2000. |
|
|
|
|
| 2.
To review and adopt the audited accounts together with Directors' and
Auditors' reports for the |
|
| year
ended September 30, 2000. |
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|
|
|
|
| 3.
To consider and approve payment of cash dividend @ 15% (final) as recommended
by the |
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| Directors. |
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|
|
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| 4.
To appoint Auditors and to fix their remuneration. |
|
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| 5.
Any other business with the permission of the Chair. |
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| The
share transfer books of the Company will remain closed from 24th March, 2001
to 31st March, 2001 |
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| (both
days inclusive). |
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|
By order of the Board |
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| LAHORE:
February 23, 2001. |
|
Secretary |
|
|
| NOTE: |
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|
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| A
member entitled to attend and vote at the meeting may appoint another member
as his/her |
|
| proxy
to attend and vote. Proxies in order to be effective must be received at the
Registered Office |
|
| of
the Company not later than 48 hours before the time of holding of the
meeting. |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| Your
Directors are pleased to present the thirty-second report together with
audited accounts for |
|
| the
year ended September 30, 2000. |
|
|
| FINANCIAL
RESULTS |
|
|
2000 |
1999 |
|
|
|
|
|
(Rs. in
thousands) |
|
|
|
| Profit before tax |
|
39,303 |
24,293 |
|
| Provision
for tax |
|
20,197 |
4,140 |
|
|
|
|
------------------ |
------------------ |
|
| Net
Profit Available for Appropriation |
|
19,106 |
20,153 |
|
|
|
========== |
========== |
|
|
| APPROPRIATION |
|
| The
Directors recommend the following: |
|
| Profit/(Loss)
for the year |
|
19,106 |
20,153 |
|
| Dividend
- Final 15% (1999: 15%) |
|
14,230 |
14,230 |
|
|
------------------ |
------------------ |
|
|
|
4,876 |
5,923 |
|
| Balance
brought forward |
|
(28,385) |
(34,308) |
|
|
|
------------------ |
------------------ |
|
|
|
(23,509) |
(28,385) |
|
|
========== |
========== |
|
|
|
| OPERATING
RESULTS |
|
| Operating
results for the year and comparative figures are as under: |
|
|
|
2000 |
1999 |
1998 |
1997 |
|
|
| Crushing days |
No. |
142 |
162 |
160 |
152 |
|
| Average recovery |
% |
8.13 |
8.07 |
8.31 |
8.16 |
|
| Cane crushed |
M. Tons |
455,470 |
570,512 |
554,924 |
396,066 |
|
| Sugar produced |
M. Tons |
37,048 |
46,021 |
46,082 |
32,318 |
|
|
| By
the Grace of Almighty, your Company has had a profitable year with pre-tax
profit rising by |
|
| 61%.
However, the fall in crushing and production confirms the Directors' fears
about the degeneration |
|
| of
the so-called Indian Variety (COL-1148) as we mentioned in our earlier
reports. |
|
|
| BMR PLANS |
|
| In
the year under review, your Company has embarked on a balancing plan which
envisioned |
|
| installation
of a continuous vacuum pan and a new boiler. This equipment will improve the
plant's energy |
|
| balance
and promote efficiency which is vital for survival in the face of increasing
international |
|
| competition. |
|
|
| PROSPECTS
FOR 2000-2001 |
|
| As
mentioned earlier, the degeneration of Punjab's pre-dominant cane variety has
resulted in a |
|
| sharp
drop in crop production and recovery of sucrose from the same. The 2000-01
season is marked |
|
| by
further shortage of sugar cane. The recovery has fallen sharply and the sugar
industry is now facing a |
|
| serious
crisis. In order to utilise our refining capacity to the fullest, we are
importing and refining raw |
|
| sugar
in line with government policy. |
|
|
| The
Government's response to the crisis is puzzling in that it has relied wholly
on import incentives |
|
| for
raw and refined sugar instead of taking emergency measures in the cane
fields. This liberal import |
|
| policy
drains the nation's precious foreign exchange and further discourages the
farmer from taking any |
|
| step
to improve the crop. |
|
|
| AUDITORS'
REPORT |
|
| In
reply to Auditors observations your Directors have to comment as follows: |
|
|
| 1.
Recovery of dues from Kohinoor Textile Mills Ltd. against the amount decreed
in our favour |
|
| continues
to be stayed in an appeal by KTML in the Lahore High Court. Interest has not
been |
|
| provided. |
|
|
| 2.
During the year 1980 Rs. 9,414,522/- were written back out of the provision
for depreciation |
|
| for
the period since inception to February 10, 1975 which amount was considered
excessive. |
|
| Your
Directors still hold this opinion and do not see any justification in
reinstating this |
|
| amount.
It may be appreciated that it is a self adjusting amount which is reducing
every year. |
|
|
| AUDITORS |
|
| The
retiring auditors M/s. S. M. Masood & Co., are eligible for the ensuing
period, and have offered |
|
| themselves
for reappointment. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| The
pattern of shareholding as required under Section 236 of the Companies
Ordinance, 1984 is |
|
| annexed
with the report. |
|
|
| APPRECIATION |
|
| Management
and employee relations remained highly satisfactory and your Directors place
on |
|
| record
their appreciation to all concerned. |
|
|
|
|
On behalf of the Board |
|
|
|
|
|
|
|
|
|
M. USMAN SAIGOL |
|
| LAHORE:
February 23, 2001. |
|
Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of KOHINOOR SUGAR MILLS LIMITED as at |
|
| September
30, 2000 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 requirements 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)
The advance to Kohinoor Textile Mills Limited which was necessitated due to
the |
|
| reorganization
of management in the Saigol Group of Companies, together with interest |
|
| accrued
upto September 30, 1985 amounting to Rs. 9,715,042. No interest has been
provided |
|
| on
the said advance since September 30, 1985. The Company has taken legal action
for the |
|
| recovery
of the dues. No provision against amount recoverable has been made in the |
|
| accounts
(See Note 10.1). |
|
|
|
|
|
|
| (b)
Out of the total depreciation of Rs. 9,414,522 covering the period since
inception to February |
|
| 10,
1975 written back in 1980, Rs. 1,336,259 still remain unprovided. The
retained earnings |
|
| continue
to be overstated accordingly. |
|
|
|
| (c)
in our opinion, proper books of accounts have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| (d)
in our opinion: |
|
|
| (i)
the balance sheet and the 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; |
|
|
|
|
| (e)
in our opinion, except for the effect, if any, of the matter referred to in
paragraph (a) & (b) |
|
| above,
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, 2000 and of the profit, its cash
flows and |
|
| changes
in equity for the year then ended; and |
|
|
|
|
|
| (f)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980 (XVIII of |
|
| 1980),
was deducted by the Company and deposited in the Central Zakat Fund
established |
|
| under
Section 7 of the Ordinance. |
|
|
|
| Date:
February 23, 2001. |
|
S.M. MASOOD & CO. |
|
| Place: LAHORE |
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
Note |
(Rupees) |
(Rupees) |
|
| FIXED
ASSETS |
|
| Operating
fixed assets |
|
3 |
352,919,333 |
330,599,311 |
|
| Operating
fixed assets subject to finance lease |
4 |
42,354,018 |
88,466,779 |
|
| Capital
work in progress |
|
5 |
6,574,737 |
1,130,655 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
401,848,088 |
420,196,745 |
|
| INVESTMENTS |
|
6 |
14,100 |
14,100 |
|
| LONG
TERM DEPOSITS |
|
7 |
7,203,517 |
7,203,517 |
|
|
| CURRENT
ASSETS |
|
| Stores
and spares |
|
8 |
49,425,778 |
497,749,521 |
|
|
| Stock in trade |
|
9 |
6,448,041 |
93,447,316 |
|
|
| Advances,
deposits and prepayments |
10 |
23,613,993 |
25,785,954 |
|
|
| Short
term investment |
|
|
-- |
150,000 |
|
|
| Taxation |
|
11 |
3,591,971 |
20,171,325 |
|
|
| Cash
and bank balances |
|
12 |
4,915,443 |
715,747 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
87,995,226 |
190,045,294 |
|
| CURRENT
LIABILITIES |
|
|
|
|
| Short
term borrowings |
|
13 |
25,600,000 |
115,306,000 |
|
| Current
maturity of long term loans |
16 |
10,600,000 |
16,200,000 |
|
| Current
maturity of liabilities against |
|
|
| assets
subject to finance lease |
|
17 |
14,645,934 |
13,122,291 |
|
| Creditors,
provisions and accrued expenses |
14 |
41,443,962 |
59,645,587 |
|
| Dividend: |
|
|
|
| Un-claimed |
|
|
340,049 |
269,541 |
|
| Proposed |
|
|
14,230,170 |
14,230,170 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
106,860,115 |
218,773,589 |
|
|
|
------------------ |
------------------ |
|
| CURRENT
ASSETS LESS CURRENT LIABILITIES |
(18,864,889) |
(28,728,295) |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
ASSETS LESS CURRENT LIABILITIES |
|
390,200,816 |
398,686,067 |
|
| CONTINGENCIES
AND COMMITMENTS |
15 |
-- |
-- |
|
|
|
|
|
| LONG
TERM LIABILITIES |
|
|
|
| Long term loans |
|
|
16 |
44,901,000 |
59,504,661 |
|
| Liabilities
against assets subject to finance lease |
17 |
34,814,486 |
49,806,771 |
|
|
|
------------------ |
------------------ |
|
|
|
|
79,715,486 |
109,311,432 |
|
| OTHER
LIABILITIES |
|
18 |
33,098,051 |
16,863,227 |
|
|
|
|
|
------------------ |
------------------ |
|
| NET ASSETS |
|
|
|
277,387,279 |
272,511,408 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| REPRESENTED
BY: |
|
| Share capital |
|
|
19 |
94,867,800 |
94,867,800 |
|
| Premium
on right shares |
|
|
41,109,380 |
41,109,380 |
|
| General reserve |
|
|
|
62,000,000 |
62,000,000 |
|
| Balance
transferred from profit & loss account |
|
(23,509,498) |
(28,385,369) |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
CAPITAL AND RESERVES |
|
174,467,682 |
169,591,811 |
|
| Surplus
on revaluation of land |
|
20 |
102,919,597 |
102,919,597 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
277,387,279 |
272,511,408 |
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes 1 to 33 form an integral part of these financial statements. |
|
|
|
AUDITORS' REPORT |
|
M. FAROOQUE SAIGOL |
|
M. USMAN SAIGOL |
|
|
(As per annexed) |
|
Director |
|
Chief Executive |
|
|
|
|
| Date:
February 23, 2001. |
|
S.M. MASOOD & CO., |
|
|
| Place: LAHORE |
|
|
Chartered Accountants |
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE |
|
| YEAR
ENDED SEPTEMBER 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
Note |
(Rupees) |
(Rupees) |
|
|
|
|
| SALES |
|
21 |
776,146,481 |
831,762,081 |
|
| COST
OF SALES |
|
22 |
640,836,606 |
707,141,410 |
|
|
|
|
------------------ |
------------------ |
|
| GROSS
PROFIT |
|
135,309,875 |
124,620,671 |
|
|
| OPERATING
EXPENSES |
|
|
|
|
| Administrative |
|
23 |
30,010,334 |
30,826,420 |
|
| Selling |
|
24 |
2,333,259 |
5,805,283 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
32,343,593 |
36,631,703 |
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT |
|
|
102,966,282 |
87,988,968 |
|
| FINANCIAL
AND OTHER CHARGES |
25 |
42,896,112 |
58,348,949 |
|
| OTHER
INCOME/(EXPENSES) |
|
26 |
(20,767,147) |
(5,346,725) |
|
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
|
39,303,023 |
24,293,294 |
|
| PROVISION
FOR TAXATION |
|
11 |
(20,196,982) |
(4,140,372) |
|
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
AFTER TAXATION |
|
|
19,106,041 |
20,152,922 |
|
|
|
|
========== |
========== |
|
|
| APPROPRIATION: |
|
| Profit
for the year |
|
|
19,106,041 |
20,152,922 |
|
| Less:
Proposed dividend - final 15% (1999: 15%) |
|
14,230,170 |
14,230,170 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
4,875,871 |
5,922,752 |
|
| Balance
brought forward |
|
|
(28,385,369) |
(34,308,121) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(23,509,498) |
(28,385,369) |
|
|
|
|
========== |
========== |
|
| EARNING
PER SHARE |
|
28 |
2.01 |
2.12 |
|
|
|
|
|
| The
annexed notes 1 to 33 form an integral part of these financial statements. |
|
|
|
AUDITORS' REPORT |
|
M. FAROOQUE SAIGOL |
|
M. USMAN SAIGOL |
|
|
(As per annexed) |
|
Director |
|
Chief Executive |
|
|
|
|
| Date:
February 23, 2001. |
|
S.M. MASOOD & CO., |
|
|
| Place: LAHORE |
|
|
Chartered Accountants |
|
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
2000 |
1999 |
|
|
|
(Rupees) |
(Rupees) |
|
|
| Cash
flow from operating activities |
|
| Net
profit before taxation |
|
|
39,303,023 |
24,293,294 |
|
|
|
|
| Adjustments
for: |
|
|
| Depreciation |
|
|
28,099,911 |
25,458,052 |
|
| Amortization |
|
|
4,706,002 |
9,948,658 |
|
| Profit
on sate of fixed assets |
|
|
(25,362) |
(326,347) |
|
| Financial
charges |
|
|
40,000,100 |
56,613,714 |
|
| Accounts
receivables written off |
|
|
370,903 |
318,987 |
|
| Profit
on sale of DSC |
|
|
(489,000) |
(106,500) |
|
| Profit
on disposal of machinery held for sale |
|
-- |
267,127 |
|
| Provision
for diminution in investment |
|
-- |
72,854 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
111,965,577 |
116,539,839 |
|
|
| (Increase)/Decrease
in stores, spares and loose tools |
349,174 |
6,716,878 |
|
| (Increase)/Decrease
in stock in trade |
|
86,999,275 |
93,453,914 |
|
| (Increase)/Decrease
in advances, deposits & prepayments |
(154,468) |
21,894,128 |
|
| Increase/(Decrease)
in creditors, |
|
|
|
|
| provisions
and accrued expenses |
|
|
(17,885,955) |
(4,037,923) |
|
| Increase/(Decrease)
in unclaimed dividend |
|
70,508 |
(103) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
(used in)/generated from operations |
|
181,344,111 |
234,566,733 |
|
|
|
|
|
|
| Tax paid |
|
|
(3,617,628) |
(6,063,581) |
|
| Markup paid |
|
|
(40,315,770) |
(62,251,560) |
|
|
|
|
------------------ |
------------------ |
|
| Net
Cash (used in)/generated from operating activities |
137,410,713 |
166,251,592 |
|
|
|
|
|
|
| Cash
flow from investing activities |
|
| Addition
to fixed assets |
|
(3,342,155) |
(1,951,122) |
|
| Security
deposits |
|
-- |
2,527,476 |
|
| Encashment
of DSC |
|
639,000 |
639,000 |
|
| Sale
proceeds on disposal of fixed assets |
|
1,462,060 |
793,653 |
|
| Addition
to CWIP |
|
(10,596,273) |
(14,370,398) |
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities |
|
(11,837,368) |
(12,361,391) |
|
|
|
|
| Cash
flow from financing activities |
|
| Dividend paid |
|
(14,230,170) |
-- |
|
| Increase/(Decrease)
in long term loans |
|
(20,203,661) |
(24,504,841) |
|
| Increase/(Decrease)
in lease liabilities |
|
(13,468,642) |
(14,282,334) |
|
| Increase/(Decrease)
in short term borrowings |
|
(89,706,000) |
(126,571,087) |
|
| Increase/(Decrease)
in other long term liabilities |
|
16,234,824 |
9,008,371 |
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in)/generated from financing activities |
(121,373,649) |
(156,349,891) |
|
|
|
------------------ |
------------------ |
|
| Net
increase/(decrease) in cash & cash equivalents |
4,199,696 |
(2,459,690) |
|
| Cash
& cash equivalents at beginning of the period |
715,747 |
3,175,437 |
|
|
|
------------------ |
------------------ |
|
| Cash
& cash equivalents at close of the period |
|
4,915,443 |
715,747 |
|
|
========== |
========== |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
|
Share |
Share |
General |
Unappropriated |
Total |
|
|
Capital |
Premium |
Reserve |
Profit & (Loss) |
|
|
|
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
(Rupees) |
|
|
|
|
| Balance
as at October 01, 1998 |
94,867,800 |
41,109,380 |
62,000,000 |
(34,308,121) |
163,669,059 |
|
| Profit
after taxation for the year |
|
|
| ended
September 30, 1999 |
-- |
-- |
-- |
20,152,922 |
20,152,922 |
|
| Final
dividend 15% |
-- |
-- |
-- |
(14,230,170) |
(14,230,170) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at September 30, 1999 |
94,867,800 |
41,109,380 |
62,000,000 |
(28,385,369) |
169,591,811 |
|
|
|
|
|
|
|
| Profit
after taxation for the year |
|
| ended
September 30, 2000 |
-- |
-- |
-- |
19,106,041 |
19,106,041 |
|
| Proposed
final dividend @ 15% |
-- |
-- |
-- |
(14,230,170) |
(14,230,170) |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| Balance
as at September 30, 2000 |
94,867,800 |
41,109,380 |
62,000,000 |
(23,509,498) |
174,467,682 |
|
|
|
|
========== |
========== |
========== |
