| Al-Asif Sugar Mills Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| Company
Profile |
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| Notice
of Annual General Meeting |
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| Director's
Report |
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| Auditor's
Report |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Statement
of Changes in Financial Position |
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| Notes
to the Accounts |
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| Pattern
of Share Holding |
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| COMPANY
PROFILE |
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| BOARD
OF DIRECTORS: |
KAZI AMJAD ABID ABBASI |
(Chief Executive) |
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|
M. ARSHAD MIRZA |
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|
MRS. HUSNA AMJAD KAZI |
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|
ALl AKBAR JUNEJO |
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SYED VAQAR HASSAN |
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SHAIKH AFTAB AHMED |
(Rep: I.D.B.P.) |
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|
SAMIR AHMED |
(Rep: N.1.T.) |
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|
M. SHAIKH M. ASLAM |
(Rep: N.I.T.) |
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| COMPANY
SECRETARY |
MUHAMMAD BAQIR JAFFERI |
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| BANKERS |
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NATIONAL BANK OF PAKISTAN |
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HABIB BANK LIMITED |
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MUSLIM COMMERCIAL BANK
LTD. |
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|
UNITED BANK LTD. |
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| AUDITORS |
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M/S. RAHIM IQBAL RAFIQ
& CO. |
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|
CHARTERED ACCOUNTANTS -
KARACHI. |
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| REGISTERED
OFFICE |
4TH FLOOR, BANK HOUSE NO.
2, |
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HABIB SQUARE, M.A. JINNAH
ROAD, |
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KARACHI. |
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| FACTORY |
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ASIFABAD P.O. GARHO, |
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DISTRICT THATTA. |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the 16th Annual General Meeting of the Company will be
held at 4th floor, Bank |
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| House
No. 2, Habib Square, M. A. Jinnah Road, Karachi on Friday 31st March 2000 at
19:30. |
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| 1.
To confirm the minutes of the 15th Annual General Meeting held on 31-05-99. |
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| 2.
To receive, consider and adopt the Audited Accounts for the year ended
30-09-99 together with the |
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| directors
and auditors report thereon. |
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| 3.
To elect the directors of the Company for a period of (03) Three years
commencing from 23rd June 2000 in |
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| accordance
with the provision of the Companies Ordinance, 1984 in place of retiring
directors namely |
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| Messrs.
Kazi Amjad Abid Abbasi, M. Arshad Mirza, Ali Akber Junejo, Syed Vaqar Hassan,
Husna |
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| Amjad
Kazi, Shaikh Aftab Ahmed (Rep: I.D.B.P.), Samir Ahmed (Rep: N.I.T.) and M.
Shaikh M. Aslam |
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| (Rep:
N.I.T). All retiring directors shell be eligible to offer themselves for
re-election. |
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| 4.
To appoint auditors for the years 1999-2000 and to fixed their remuneration,
the retiring auditors M/s. |
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| Rahim
Iqbal Rafiq & Co. Chartered Accountants have offered themselves for
reappointment. |
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| 5.
To transact any other business of the company that may be brought forward
with permission of the |
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| chairman. |
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BY ORDER OF THE BOARD |
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|
(MOHAMMAD BAQIR JAFFERI) |
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| Karachi
the dated 2nd March, 2000 |
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Company Secretary |
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| NOTES: |
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| 1.
The Share transfer books of the Company will remain closed from 30-03-2000 to
05-04-2000 |
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| (both
days inclusive). |
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| 2.
A member entitled to attend and vote at the Annual General Meeting is
entitled to appoint a proxy to |
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| attend
and vote on his behalf. Form of proxies in order to be valid must be received
at registered office of |
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| the
company 48 hours before the time of the meeting. A proxy must be a member of
the company. |
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| 3.
Shareholders are requested to notify any change in address immediately. |
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| DIRECTOR'S
REPORT |
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| DEAR
SHAREHOLDERS |
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| In
the name of Allah The Most Gracious and Merciful your directors feel
privilege to present the 16th Annual |
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| Report
and the audited accounts together with the auditors report thereon for the
year ended September 30, |
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| 1999.
The financial results of the company of the year under report are as under: |
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| Sales |
|
Rs. 285,646,323 |
|
|
| Operating Loss |
|
Rs. 33,951,851 |
|
|
| Loss
before Taxation |
Rs. 58,493,397 |
|
|
| Loss
after taxation |
Rs 59,850,730 |
|
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| Accumulated
loss |
Rs. 665,002,267 |
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| CANE
CRUSHING & PRODUCTION |
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| As
your mill restarted after a gap of four years on 24th November, 1998 it had
to face consequences of its long |
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| closure
i.e. shortage of sugarcane in the vicinity and other infrastructures. Despite
all hurdles your mill |
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| crushed
208870.630 M.Tons sugarcane by producing 19042 M. Tons refined sugar with an
average recovery |
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| of 9.033 %. |
|
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| a)
Cost of production |
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| There
was no cane in the mill vicinity due to its continuos four years closure as a
result of which we could not |
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| crush
our anticipated figure. As the cane was short in our area, we had to augment
our supplies from adjoining |
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| areas
in a "Price War" with the competitive mills. Our average purchase
price per 40 kg was higher as compare |
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| to
the government support price of Rs.36 per 40 kg. This excessive element of
Transportation substantially |
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| increased
our cost of production and ultimately added to our losses. |
|
|
| b)
Repairs & maintenance |
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| We
have to incur a huge expense on the repairs and maintenance while restarting
the mills which was closed |
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| since
February, 1995. Major replacements and modifications were carried out which
impacted the |
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| profitability
for the year under report. |
|
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| c) Sales |
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| In
the year under review there was surplus stock of sugar available in the
market, therefore sugar prices were |
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| very
low. Your Directors made their utmost efforts to sell sugar regularly at the
higher available market |
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| prices
to meet day to day needs of the mills. |
|
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| d)
Financial Charges |
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| Although
most of the long term loans had been rescheduled and restructured under the
S.B.P incentive scheme |
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| with
a moratorium period of 18 months in 1997 yet we could not get the required
advantage as the moratorium |
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| period
was expired soon after taking over the management. Consequently, we have to
account for a huge amount |
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| against
interest/markup expense which added to the losses for the year under report
as well as impaired the cash |
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| flow position. |
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| FUTURE
PROSPECTUS |
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| In
the 1999-2000 season, Pakistan sugar industry is again in a crises of raw
material shortage. Unfortunately, we |
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| have
to face a heavy cyclone on May 20, 1999 which badly damaged sugarcane crop in
mills suburbs Fortunately, |
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| we
have ascertained remarkable production figure up to 29.02.2000. |
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| Sugarcane
crushed |
253,677.507 |
M. Tons |
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| Sugar Produced |
|
24,032 |
M.Tons |
|
| Average
Recovery |
9.63 |
Per cent |
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| We
are continuing with our proven strategy of promoting sugarcane cultivation.
Farmers in our area are again set |
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| to
increase sugarcane cultivation even more due to our great deal of motivation
and incentives. We have got |
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| develop
about 13000 acres sugarcane in our area which is a very happy sign for the
surviving crushing and mills |
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| profitability. |
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| ELECTION
OF DIRECTORS |
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| The
present term of directors has expired on 23-06-2000. The new directors are to
be elected for the next term of |
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| three
years in accordance with the provisions of companies ordinance 1984. During
the year Kazi Afzal Abid |
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| Abbasi
and Mr. S.M. Baqir has resigned from the board and Kazi Amjad Abid Abbassi
and Mrs. Husna Amjad |
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| Abid
had joined the board to fill the casual vacancies. Kazi Amjad Abid Abbassi
has also taken over the charge of |
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| Chief
Executive of the company. The board appreciated the valuable services of 2 of
above retiring directors. All |
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| the
retiring directors are eligible to offer themselves for reelection for the
next term of three years. |
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| AUDITORS
OBSERVATIONS |
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| Your
directors would like to give the following explanations about the auditor's
observations. |
|
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| a)
Although the mills had been suffering huge losses in the past yet the
management is fully confident to |
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| overcome
these loses in the coming future. Our current performance is a concrete
evidence of our gradual |
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| prosperity.
We had not only restore our company prestige to the extent of people directly
or indirectly |
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| involved
with this agro based industry but also caused satisfaction for the DFI's. We
are paying our |
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| utmost
efforts to resolve our key issue of sugarcane development in the mills
vicinity to reduce the |
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| sugarcane
cost. In this respect we have adopted drastic measures and Insha-Allah we
would soon resolve |
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| our
this hurdle which was the key obstacle in the way of mills profitability. |
|
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| b)
The amount of Rs.37.176 (M) consisted of advance to growers and transporters.
The whole amount was |
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| advanced
against cane and transportation supply. The management is in a close touch
with the concerned |
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| and
has accorded a concession for three early crushing seasons. Thus the amount
would be recovered |
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| after
the end of this period. |
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|
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| c)
Negotiation with M/S Capricorn (Pvt.) limited is on its final touch and the
balance confirmation would be |
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| available
after reconciliation. |
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| SHARE
HOLDING |
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| Pattern
of share holding by shareholders of the company as at 30th September 1999 is
annexed. |
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| AUDITORS |
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| The
present Auditors M/S Rahim Iqbal Rafiq & Company Chartered Accountant
retire and being eligible offer |
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| themselves
for re-appointment. |
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| Your
Directors place on record their appreciation of the diligence and devotion of
duty of the executives, officers |
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| and
staff members of the company. |
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| AL-ASIF
SUGAR MILLS LIMITED |
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| Chairman
/ Chief Executive |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of AL-ASIF SUGAR MILLS LIMITED as at
September 30, 1999 |
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| and
the related profit and loss account and Statement of Changes in Financial
Position together with the notes |
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| forming
part thereof, for the year then ended and we state that: |
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| We
have obtained all the information and explanation which to the best of our
knowledge and belief were |
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| necessary
for the purposes of our audit and, after due verification thereof, we report
that: |
|
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| a.
The company incurred continued operating losses and upto September 30, 1999
its accumulated loss |
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| amounts
to Rs. 665.002 million which has resulted in net capital deficiency of Rs.
518.335 million. The |
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| current
liabilities have exceeded current assets by Rs. 80.694 million. In view of
huge accumulated loss |
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| and
liquidity constraints, there is an uncertainty about the continuation of the
company as a going |
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| concern.
The financial statements do not include any adjustments relating of the
recoverability and |
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| classification
of recorded assets and liabilities that are necessary to reflect these on
realisable basis. |
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|
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| b.
Provision against doubtful advances of Rs. 37,176,287 has not been made in
these financial statements. |
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| Had
the provision been made, the loss for the year would have increased by this
amount. |
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|
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| c.
Balance confirmation in respect of loan from Capricorn International (refer
note 4.8) was not made |
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| available
to us and therefore this could not be verified by us. |
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|
|
|
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| d.
In our opinion, proper books of account have been kept by the company as
required by the companies |
|
| Ordinance,
1984; |
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|
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| e.
in our opinion: |
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|
|
|
|
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| (i)
the balance sheet and profit and loss account together with the notes thereon
have been drawn up |
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| in
conformity with the Companies Ordinance, 1984 and are in agreement with the
books of |
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| account
and are further in accordance with accounting policies consistently applied; |
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|
|
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| (ii)
the expenditure incurred during the year was for the purpose of the company's
business; and |
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|
|
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| (iii)
the business conducted, investment made and the expenditure incurred during
the year were in |
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| accordance
with the objects of the company; |
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|
|
|
| f.
Except for the matters stated in para a, b & c above and note 4.8 &
6.1 and to the extent to which these may |
|
| effect
the result of the company, in our opinion and to the best of our information
and according to the |
|
| explanations
given to us, the balance sheet and profit and loss account and Statement of
Changes in |
|
| Financial
Position, together with the notes forming part thereof, give the information
required by the |
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| Companies
Ordinance, 1984 in the manner so required and respectively give a true and
fair view of the |
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| state
of the company's affairs as at September 30, 1999 and of the loss and the
changes in financial |
|
| position
for the year then ended, and |
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|
|
|
|
|
| g.
In our opinion, no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980 |
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|
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|
|
|
|
RAHIM IQBAL RAFIQ & COMPANY |
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| Karachi.
Dated: March 01, 2000 |
|
Chartered Accountants |
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| BALANCE
SHEET AS AT SEPTEMBER 30, 1999 |
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|
1999 |
1998 |
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|
Note |
RUPEES |
RUPEES |
|
|
|
|
| SHARE
CAPITAL |
|
|
|
| Authorised |
|
|
|
| 50,000,000
ordinary shares of Rs. 10/- each |
|
|
500,000,000 |
500,000,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Issued,
subscribed and paid-up capital 14,666,666 |
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|
146,666,660 |
146,666,660 |
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| ordinary
shares of Rs. 10 each fully paid in cash |
|
|
|
|
|
| Unappropriated
loss |
|
|
(665,002,267) |
(605,151,537) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(518,335,607) |
(458,484,877) |
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|
|
|
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| REDEEMABLE
CAPITAL |
|
3 |
45,424,000 |
50,768,000 |
|
| LONG
TERM LOANS |
|
4 |
684,452,389 |
710,207,818 |
|
| DEFERRED
LIABILITIES |
|
5 |
235,124 |
216,613 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Short
term borrowing |
|
6 |
13,618,476 |
13,618,476 |
|
| Current
maturity of redeemable |
|
|
|
| capital
and long term loans |
|
7 |
62,572,976 |
26,579,648 |
|
| Creditors,
accrued and other |
|
|
|
| liabilities |
|
8 |
108,576,292 |
58,949,907 |
|
| Taxation |
|
|
4,013,820 |
6,991,359 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
188,781,564 |
106,139,390 |
|
| CONTINGENCIES |
|
|
9 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
400,557,470 |
408,846,944 |
|
|
|
|
========== |
========== |
|
|
| OPERATING
FIXED ASSETS |
|
10 |
289,322,305 |
301,433,309 |
|
| LONG
TERM SECURITY DEPOSITS |
|
|
587,356 |
565,357 |
|
| DEFERRED
COST |
|
11 |
2,559,667 |
-- |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores
and spares |
|
12 |
14,886,583 |
15,925,780 |
|
| Stock-in-trade |
|
13 |
1,154,194 |
2,893,726 |
|
| Trade debts |
|
14 |
21,723,512 |
22,026,103 |
|
| Advances,
deposits and prepayments |
|
15 |
69,832,074 |
65,733,638 |
|
| Cash
and bank balances |
|
16 |
491,779 |
269,031 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
108,088,142 |
106,848,278 |
|
|
|
|
------------------ |
------------------ |
|
|
400,557,470 |
408,846,944 |
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these financial statements |
|
|
Chief Executive |
|
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
Note |
RUPEES |
RUPEES |
|
|
|
|
| Sales |
|
17 |
285,646,323 |
-- |
|
| Cost
of good sold |
|
18 |
(304,241,136) |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Gross Loss |
|
|
(18,594,813) |
-- |
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
|
| Factory Cost |
|
19 |
-- |
6,891,817 |
|
| Administrative |
|
20 |
14,757,482 |
4,295,834 |
|
| Selling
and distribution |
|
21 |
599,556 |
15,600 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(15,357,038) |
(11,203,251) |
|
|
|
|
------------------ |
------------------ |
|
| Operating Loss |
|
|
(33,951,851) |
(11,203,251) |
|
|
|
|
| Financial
charges |
|
22 |
(22,581,992) |
(2,751,350) |
|
| Other charges |
|
23 |
(2,171,545) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(24,753,537) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(58,705,388) |
(13,954,601) |
|
|
|
|
| Other income |
|
24 |
211,991 |
898,991 |
|
| Provision
for doubtful advances |
|
|
-- |
(11,931,393) |
|
| Write
off of spares |
|
|
-- |
(6,165,810) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
211,991 |
(17,198,212) |
|
|
|
|
------------------ |
------------------ |
|
| LOSS
BEFORE TAXATION |
|
|
(58,493,397) |
(31,152,813) |
|
|
|
|
|
|
| Reversal
of liability |
|
25 |
269,729 |
39,328,218 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(58,223,668) |
8,175,405 |
|
| PROVISION
FOR TAXATION- MINIMUM TAX |
|
|
(1,627,062) |
-- |
|
|
|
|
------------------ |
------------------ |
|
| LOSS
AFTER TAXATION |
|
|
(59,850,730) |
8,175,405 |
|
| Accumulated
loss brought forward |
|
|
(605,151,537) |
(613,326,942) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
loss carried forward |
|
|
(665,002,267) |
(605,151,537) |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE PERIOD ENDED SEPTEMBER 30, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
Note |
RUPEES |
RUPEES |
|
|
|
|
| CASH
FLOWS OPERATING ACTIVITIES |
|
|
| Loss
before taxation |
|
|
(58,493,397) |
(31,152,813) |
|
|
|
|
|
|
| ADJUSTMENT
FOR: |
|
|
|
|
| Depreciation |
|
|
14,043,803 |
5,004,528 |
|
| Financial
charges |
|
|
22,581,992 |
2,751,350 |
|
| Profit
on sale of fixed assets |
|
|
(200,327) |
(796,491) |
|
| Written
off of spares |
|
|
-- |
6,165,810 |
|
| Provision
for doubtful advances |
|
|
-- |
11,931,393 |
|
| Provision
of gratuity |
|
|
18,511 |
245,236 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
36,443,979 |
25,301,826 |
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
(LOSS)/PROFIT BEFORE |
|
|
| WORKING
CAPITAL CHANGES |
|
|
(22,049,418) |
(5,850,987) |
|
|
|
|
|
|
| CHANGES
IN WORKING CAPITAL |
|
|
| (INCREASE)
/ DECREASE IN CURRENT ASSETS |
|
|
|
|
| Stores
and spares |
|
1,039,197 |
(1,110,297) |
|
| Stock in trade |
|
1,739,532 |
-- |
|
| Advances,
Deposits & Prepayments |
|
(4,098,436) |
16,601 |
|
| Trade Debts |
|
302,591 |
(22,026,103) |
|
|
|
|
| (DECREASE)
IN CURRENT |
|
|
|
| LIABILITIES |
|
|
|
|
|
|
| Creditors,
accrued and other liabilities |
|
|
28,861,074 |
(22,750,352) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
27,843,958 |
(45,870,151) |
|
|
|
|
------------------ |
------------------ |
|
| CASH
GENERATED FROM OPERATION |
|
|
5,794,540 |
(51,721,138) |
|
|
|
|
|
|
| Taxes paid |
|
|
(4,604,601) |
(664,974) |
|
| Financial
charges paid |
|
|
(1,546,952) |
(15,919,370) |
|
| Payment
of gratuity |
|
|
-- |
(1,157,982) |
|
|
|
|
|
|
| NET
CASH FROM (USED IN) OPERATING |
|
|
------------------ |
------------------ |
|
| ACTIVITIES |
|
|
(357,013) |
(69,463,464) |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
1999 |
1998 |
|
|
Note |
RUPEES |
RUPEES |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Fixed
Capital Expenditure |
|
|
(1,990,107) |
-- |
|
| Proceeds
from disposal of fixed assets |
|
|
257,635 |
1,115,000 |
|
| Long
term security deposit |
|
|
(21,999) |
441,503 |
|
| Deferred Cost |
|
|
(2,559,667) |
-- |
|
|
|
|
------------------ |
------------------ |
|
| NET
CASH FROM/(USED IN) INVESTING |
|
|
(4,314,138) |
1,556,503 |
|
| ACTIVITIES |
|
|
|
------------------ |
------------------ |
|
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
| Long
term loans obtained/adjusted |
|
|
7,893,899 |
118,730,284 |
|
| Repayment
of Redeemable capital |
|
|
-- |
(900,000) |
|
| Repayment
of long term loans |
|
|
(3,000,000) |
(4,167,000) |
|
| Decrease
in short term finance |
|
|
-- |
(45,758,969) |
|
|
|
|
|
|
| NET
CASH (USED IN) / FINANCING |
|
|
------------------ |
------------------ |
|
| ACTIVITIES |
|
|
4,893,899 |
67,904,315 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
|
| (DECREASE)
IN CASH |
|
|
222,748 |
(2,646) |
|
|
|
|
| CASH
AND BANK BALANCE AT THE |
|
|
| BEGINNING
OF THE YEAR |
|
|
269,031 |
271,677 |
|
|
|
|
------------------ |
------------------ |
|
| CASH
& BANK BALANCE AT THE END OF YEAR |
|
491,779 |
269,031 |
|
|
|
|
========== |
========== |
|
|
|
Chief Executive |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE PERIOD ENDED SEPTEMBER 30, 1999 |
|
|
| 1.
STATUS AND OPERATION |
|
|
|
|
|
|
| 1.1
The company was incorporated in Pakistan on February 25, 1984 as a Private
limited Company |
|
| and
was subsequently converted into a Public Limited Company on February 11,
1990. The |
|
| Company
is Listed in Karachi and Lahore Stock Exchanges. The principal business of
the |
|
| company
is manufacturing and selling of refined sugar. The mill is located at Garho,
Sindh. |
|
|
|
|
| 1.2
In the year 1998, the management of the company underwent a major change as a
result of enbloc |
|
| resignation
by all its directors includi |
