| Mirpurkhas Sugar Mills Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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|
| Board of Directors |
|
| Notice of Meeting |
|
| Directors' Report |
|
| Ratio
Analysis on Accounts |
|
| Auditors' Report |
|
| Balance
Sheet |
|
|
| Profit & Loss Account |
|
| Cash Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
|
|
| BOARD
OF DIRECTORS |
|
|
| CHAIRMAN |
|
MR. MOHAMMED FARUQUE |
|
|
| CHIEF
EXECUTIVE/ |
|
| MANAGING
DIRECTOR |
MR. MAHMOOD FARUQUE |
|
|
| DIRECTORS |
|
MR. IQBAL FARUQUE |
|
|
MR. AKBARALI PESNANI |
|
|
MR. ASLAM FARUQUE |
|
|
MR. TARIQ FARUQUE |
|
|
MR. MAQBOOL H.H.
RAHIMTOOLA (NIT) |
|
|
MR. GUL NAWAZ (NIT) |
|
|
MR. ANIS WAHAB ZUBERI
(NIT) |
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|
| AUDITORS |
|
HYDER BHIMJI & CO. |
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|
CHARTERED ACCOUNTANTS |
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|
KARACHI. |
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| REGISTERED
OFFICE |
MODERN MOTORS HOUSE |
|
|
BEAUMONT ROAD |
|
|
KARACHI. |
|
|
| FACTORY |
|
JAMRAO DIST. MIRPURKHAS |
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| NOTICE
OF MEETING |
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| NOTICE
IS HEREBY GIVEN that the 35th Annual General Meeting. of this Company will be
held on Friday, |
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| 24th
March, 2000 at 9.00 a.m. at the Registered Office of the Company at Modern
Motors House, Beaumont |
|
| Road,
Karachi to transact the following business: |
|
|
| 1.
To receive and consider the audited accounts of the company for the year
ended on September 30, 1999 |
|
| with
the Directors' and the Auditors' Reports thereon. |
|
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| 2.
To approve dividend of Rs. 0.70 per share (@ 7%) for the financial year ended
on September 30, 1999 |
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| as
recommended by the Directors. |
|
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| 3. To appoint Auditors for the ensuing year
and to fix their remuneration. |
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|
By Order of the Board |
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|
R. JAFRANI |
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| Karachi:
25th February, 2000. |
|
Company Secretary |
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|
| NOTE: |
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| 1.
The registers of members of the Company will be closed from Friday,17th March
to Friday, 24th |
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| March
2000 inclusive, and no transfers will be registered during that time. Shares
received in order |
|
| at
the registered office of the Company at the close of business on Thursday,
16th March 2000 will |
|
| be
treated in time for entitlement of the above dividend. |
|
|
| 2.
A member eligible to attend and vote at the Annual General Meeting may
appoint another member |
|
| as
his/her proxy to attend and vote in his/her stead. Proxies to be effective
must be in writing and |
|
| must
be received by the Company 48 hours before the Meeting. |
|
|
| 3.
Shareholders whose shares are in group account with Central Depository System
(CDS) are |
|
| requested to bring original National
Identity Card (NIC) along with their Account number in Central |
|
| Depository System for Verification. In case
of appointment of proxy by such account holders and |
|
| or sub account holders the guidelines as
contained in SECP circular of January 26,2000 (copy |
|
| enclosed) to be followed. |
|
|
| 4.
The shareholders are requested to notify the Company immediately if there is
any change in their |
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| address, if any. |
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|
| DIRECTORS'
REPORT TO THE MEMBERS |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1999 |
|
|
| The
Directors have pleasure in presenting to you 35th Annual Report together with
the audited accounts for the |
|
| year
ended September 30, 1999. |
|
|
| PRODUCTION |
|
| The
Mill commenced crushing on 10.11.1998 and closed on 06.04.1999 after
operating 148 days against 143 |
|
| days
in 1997-98 season. The production data and other salient features for the
reporting year as well as the |
|
| comparative
data for the previous year are as follows: |
|
|
|
Year ended |
Year ended |
|
|
|
|
|
30-09-99 |
30-09-98 |
|
| Su9arcane
Crushed: |
|
| Metric Tonnes |
|
430,312 |
402,273 |
|
| Sucrose
percentage |
|
8.76 |
10.11 |
|
| Sugar
production (M.T.) |
|
37,989 |
40,533 |
|
| Molasses
production (M.T.) |
|
22,312 |
19,630 |
|
| Average
crushing per day (M.T.) |
2,907 |
2,183 |
|
|
| Production
of the cane crop in Sindh increased, but was not enough to cater for the
increased crushing capacity |
|
| of
the mills. The sucrose recovery dropped to 8.76% from 10.11% (last season)
resulting in higher cost of |
|
| production.
A higher sugar production in the country coupled with carry over stock of
previous year created a glut |
|
| in
the local market resulting in suppressed sugar sale prices all the year
round. Low international prices for export |
|
| of
sugar also gave no significant advantage. |
|
| Your
company exported 10,000 MT sugar during the year under report. |
|
|
| OPERATING
RESULTS |
|
| The
summarized operating results are as follows: |
|
|
|
1998-99 |
1997-98 |
|
|
(Rs. 'Million) |
Rs. 'Million) |
|
| Net Sales |
|
593.524 |
498.142 |
|
| Cost of Sales |
|
564.333 |
455.922 |
|
| Gross Profit |
|
29.191 |
42.220 |
|
| Expenses
& Taxes |
|
52.098 |
91.547 |
|
| Net
Profit / (Loss) before tax |
|
5.045 |
(20.129) |
|
| Net
Profit/(Loss) after tax |
|
10.680 |
(34.371) |
|
|
| Other
comparative figures are reflected in the Financial Statements. |
|
|
| The
Government abolished the levy of excise duty on sugar of Rs. 450/= per metric
tonne and imposed sales tax |
|
| at
15% effective January 1999. |
|
|
| FINANCIAL
RESULTS |
|
| After
accounting for the tax benefit your company earned a net profit after tax of
Rs. 10.680 million. The total |
|
| contribution
to the government on account of excise duty, sales tax and income tax was Rs.
71.443 million against |
|
| Rs.
64.290 million for the year 1997-98. |
|
|
|
Amount |
|
|
(Rs. 'Million) |
|
|
| Net
profit for the year |
|
10.680 |
|
| Proposed
Cash Dividend |
|
(4,472) |
|
|
----------------- |
|
|
6,208 |
|
| Less:
Loss brought forward |
|
(34,350) |
|
|
----------------- |
|
| Net
loss carried forward |
|
(28,142) |
|
|
========== |
|
|
|
|
| Y2K
COMPLIANCE |
|
| The
Company has identified the effects of the Y2K issue on the Company's computer
system as well as other |
|
| computerized
/ electronic equipment, whether involved in information processing or
production or any other |
|
| purpose,
in connection with the operations and preparation of the financial
statements. Even though we have taken |
|
| all
the necessary measures, we have also developed a contingency plan in order to
overcome any major problem |
|
| that
might be encountered in the event of failure, whether partial or complete of
our arrangement. |
|
|
| PROSPECTS
FOR 1999-2000 |
|
| The
current crushing season commenced on 05.11.1999 and as of 16th February 2000
we crushed 337,448 |
|
| tonnes
of sugarcane producing 30,774 tonnes of sugar at 9.13% recovery. The quantum
of sugarcane crushed |
|
| has
decreased compared to last season due to unfavourable climatic condition and
canal water shortage, the |
|
| yield
has deteriorated. Sucrose recovery has improved from 8.76% to 9.13% compared
to last year. |
|
|
| During
the current year sugar production will be less than the domestic requirement
due to which the price of |
|
| sugar
in the local market is expected to improve. Due to shortage of availability
of sugarcane, sugar mills indulged |
|
| in
price war and sugar cane prices went up. We had to buy sugar cane at very
high cost. Prices of molasses in |
|
| the
international market remained suppressed during the season. |
|
|
| PROSPECTS
FOR 2000-2001 |
|
| The
increase in prices has encouraged growers to cultivate more cane. The crop
during season 2000-2001 is |
|
| expected
to be higher. The spring plantation will end by March 2000,after which the
acreage of cultivation will |
|
| become known. |
|
|
| AUDITORS |
|
| The
Auditors of the Company, Messrs Hyder Bhimji & Co., retire and being
eligible offer themselves for re- |
|
| appointment |
|
|
| GENERAL |
|
| Our
special thanks are due to our team of dedicated managers, executives,
supervisors and hard working |
|
| workers,
who continued to put in their best effort for achieving optimum results. |
|
|
|
For and on behalf of the
Board |
|
|
MOHAMMED FARUQUE |
|
| Karachi:
the 25th February, 2000 |
|
Chairman |
|
|
|
| RATIO
ANALYSIS ON ACCOUNTS |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1999 |
|
|
| PROFITABILITY: |
|
1999 |
1998 |
|
|
|
|
| Gross
Profit (percentage) |
|
4.91 |
8.48 |
|
| Operating
(Loss)/Profit (percentage) |
|
(1.89) |
(0.18) |
|
| Profit
/ (Loss) Before Tax (percentage) |
|
0.84 |
(4.04) |
|
| Net
Profit/(Loss) After Tax (percentage) |
|
1.80 |
6.90 |
|
| Growth/decline
in Net Profit After Tax (percentage) |
131.07 |
(297.32) |
|
| Earning
Per Share (Before Tax) |
|
0.78 |
(3.15) |
|
| Earning
Per Share (After Tax) |
|
1.67 |
(5.38) |
|
| Net
Profit/(Loss) to total Assets (Average after tax) (percentage) |
1.88 |
(7.29) |
|
| Increase
(decrease)in Sales (Gross percentage) |
|
18.63 |
(26.87) |
|
| Increase
(Decrease) in Sales (Net percentage) |
|
19.14 |
(27.19) |
|
| Materials
Percent of Net Sales |
|
71.35 |
94.28 |
|
| Labour
Percent of Net Sales |
|
8.39 |
10.46 |
|
| Other
Cost of Sales Expenses Percent of Net Sales |
13.87 |
12.33 |
|
| Raw
& Packing Material as Percent of Cost of Sales |
76.22 |
80.53 |
|
| Administrative
Expenses Percent of Net Sales |
|
4.74 |
5.67 |
|
| Selling
Expenses Percent of Net Sales |
|
2.07 |
2.98 |
|
| Income
Tax Percent of Net Sales |
|
(0.94) |
2.86 |
|
| Financial
Expenses Percent of Net Sales |
|
8.37 |
6.54 |
|
| Other
charges Percent of Net Sales |
|
0.14 |
0.33 |
|
|
| SHORT
TERM SOLVENCY RATIO: |
|
| Working
Capital Ratio |
|
1:1.03 |
1:1.21 |
|
| Acid
Test Ratio |
|
0.70:1 |
0.48:1 |
|
| Inventory
Turn Over/times |
|
7.64 |
8.41 |
|
|
| OVERALL
VALUATION AND ASSESSMENT: |
|
| Return
on equity after tax |
|
6.39 |
(18.99) |
|
| Book
Value per share |
|
26.60 |
25.64 |
|
| Long
term debt to equity ratio |
|
0.54 |
0.02 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of MIRPURKHAS SUGAR MILS LIMITED, as
at September 30, |
|
| 1999
and the related Profit & Loss Account and Statement of Changes in
Financial Position (Cash Flow |
|
| Statement)
together with the notes forming part thereof, 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 and, |
|
| after
due verification thereof, 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; |
|
|
| 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)
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 and the
statement of changes in financial position (Cash Flow Statement) |
|
| together with the notes forming part
thereof, 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, 1999 and of the
Profit and the changes in financial position for the year then |
|
| ended; and |
|
|
| (d)
in our opinion, no Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
|
HYDER BHIMJI & CO. |
|
| Karachi:
the 25th February 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Share capital: |
|
| Authorized |
|
3.1 |
150,000,000 |
150,000,000 |
|
|
=========== |
=========== |
|
| Issued,
subscribed & paid-up |
|
3.2 |
63,888,000 |
63,888,000 |
|
| Reserves |
|
4.0 |
134,250,305 |
134,250,305 |
|
| Accumulated
(loss) |
|
(28,142,662) |
(34,350,009) ' |
|
|
------------------- |
------------------- |
|
|
106,107,643 |
99,900,296 |
|
|
------------------- |
------------------- |
|
|
169,995,643 |
163,788,296 |
|
| REDEEMABLE
CAPITAL |
|
5 |
-- |
593,140 |
|
|
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS |
|
| SUBJECT
TO FINANCE LEASE |
6 |
92,462,301 |
778,963 |
|
| DEFERRED
LIABILITIES |
|
7 |
77,165,187 |
95,297,640 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
| Current
portion of redeemable |
|
| capital |
|
-- |
743,278 |
|
| Current
potion of liabilities |
|
| against
assets subject to |
|
| finance lease |
|
13,775,128 |
2,803,184 |
|
| Short
term running finance (utilized |
|
| under
mark-up arrangements). |
|
8 |
118,442,291 |
224,380,436 |
|
| Creditors,
accrued and other |
|
| liabilities |
|
9 |
83,822,151 |
77,808,865 |
|
| Provision
for taxation |
|
-- |
4,992,980 |
|
| Proposed
Dividend |
|
4,472,160 |
-- |
|
|
|
220,511,730 |
310,728,743 |
|
| CONTINGENCIES
AND COMMITMENTS |
10 |
-- |
-- |
|
|
|
|
------------------- |
------------------- |
|
|
560,134,861 |
571,186,782 |
|
|
=========== |
=========== |
|
|
| FIXED
ASSETS |
|
|
| Operating
assets |
|
11 |
258,893,576 |
180,946,384 |
|
| Capital
work-in-progress |
|
12 |
72,351,624 |
117,867,715 |
|
|
------------------- |
------------------- |
|
|
331,245,200 |
298,814,099 |
|
| LONG
TERM INVESTMENTS |
|
13 |
13,617,875 |
14,106,000 |
|
| LONG
TERM LOANS AND ADVANCES |
14 |
742,368 |
734,914 |
|
| LONG
TERM DEPOSITS |
|
15 |
15,634,804 |
3,962,814 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
16 |
50,727,303 |
46,867,011 |
|
| Stock-in-trade |
|
17 |
43,589,245 |
103,970,701 |
|
| Trade debts |
|
18 |
169,810 |
6,412,371 |
|
| Loans
and advances |
|
19 |
38,068,679 |
27,478,374 |
|
| Deposits,
prepayments and |
|
| other
receivables |
|
20 |
52,402,595 |
57,059,536 |
|
|
|
|
| Short
term investment |
|
21 |
10,500,000 |
10,500,000 |
|
| Cash
and bank balances |
|
22 |
3,436,982 |
1,280,962 |
|
|
|
------------------- |
------------------- |
|
|
|
198,894,614 |
253,568,955 |
|
|
------------------- |
------------------- |
|
|
560,134,861 |
571,186,782 |
|
|
=========== |
=========== |
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
| Karachi:
the 25th February 2000 |
|
|
| MAHMOOD
FARUQUE |
|
MOHAMMED FARUQUE |
|
| Chief
Executive |
|
Chairman |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR |
|
| ENDED SEPTEMBER 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
| Sales |
|
23 |
593,524,304 |
498,141,693 |
|
| Cost
of goods sold |
|
24 |
564,333,183 |
455,921,878 |
|
|
|
------------------- |
------------------- |
|
| Gross profit |
|
29,191,121 |
42,219,815 |
|
|
| Administrative
expenses |
|
25 |
28,154,446 |
28,265,416 |
|
| Selling
& distribution expenses |
|
26 |
12,306,469 |
14,833,226 |
|
|
------------------- |
------------------- |
|
|
40,460,915 |
43,098,642 |
|
|
| Operating
(loss) |
|
(11,269,794) |
(878,827) |
|
| Other income |
|
27 |
66,914,139 |
14,955,195 |
|
|
|
------------------- |
------------------- |
|
|
55,644,345 |
14,076,368 |
|
|
| Financial
charges |
|
28 |
49,722,764 |
32,585,810 |
|
| Other charges |
|
29 |
877,067 |
1,619,851 |
|
|
------------------- |
------------------- |
|
|
50,599,831 |
34,205,661 |
|
|
------------------- |
------------------- |
|
| Profit/(loss)
b6fore taxation |
|
5,044,514 |
(20,129,293) |
|
| Provision
for taxation |
|
30 |
5,634,993 |
14,241,775 |
|
|
------------------- |
------------------- |
|
| Profit/(loss)
after taxation |
|
10,679,507 |
(34,371,068) |
|
| Accumulated(Loss)/Unappropriated
Profit brought forward |
(34,350,009) |
21,059 |
|
|
------------------- |
------------------- |
|
|
(23,670,502) |
(34,350,009) |
|
| Appropriations: |
|
|
|
| Proposed
cash dividend @7%(1998:Nil) |
|
(4,472,160) |
-- |
|
|
------------------- |
------------------- |
|
| Accumulated
(loss)/carried forward |
|
(28,142,662) |
(34,350,009) |
|
|
=========== |
=========== |
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
| Karachi:
the 25th February 2000 |
|
|
| MAHMOOD
FARUQUE |
|
MOHAMMED FARUQUE |
|
| Chief
Executive |
|
Chairman |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED |
|
| SEPTEMBER
30,1999 |
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit/(Loss)
after taxation |
|
10,679,507 |
(34,371,068) |
|
| Adjustments |
|
|
|
| Depreciation |
|
14,131,043 |
10,974,418 |
|
| Financial
charges |
|
49,722,764 |
32,585,810 |
|
| (Profit)
on sale of fixed assets |
|
(464,239) |
(3,679,665) |
|
| Sales
Tax on bagasse: |
|
-- |
69,669 |
|
| Excise
duty refund |
|
(22,436,247) |
-- |
|
| Markup
on disputed excise duty |
|
(32,636,596) |
-- |
|
| Provision
for Diminution in value of Investments |
|
488,125 |
519,000 |
|
| Fixed
assets written off |
|
845 |
-- |
|
| Provision
for taxation |
|
(5,634,993) |
14,241,775 |
|
|
------------------- |
------------------- |
|
|
3,170,702 |
54,711,007 |
|
|
------------------- |
------------------- |
|
| Operating
profit before changes |
|
13,850,209 |
20,339,939 |
|
|
| (Increase)/decrease
in current assets |
|
| Stores
& Spares |
|
(3,860,292) |
(2,646,255) |
|
| Stock-in-Trade |
|
60,381,456 |
(99,493,741) |
|
| Trade Debts |
|
6,242,561 |
30,074,419 |
|
| Loans
and Advances |
|
(10,590,305) |
(17,467,433) |
|
| Deposits,
prepayments and other Receivables |
|
4,656,941 |
(38,718,317) |
|
|
------------------- |
------------------- |
|
|
56,830,361 |
(128,251,327) |
|
|
------------------- |
------------------- |
|
|
70,680,570 |
(107,911,388) |
|
|
| Increase/(decrease)
in Current liabilities |
|
| Short
term finance |
|
(105,938,145) |
217,898,926 |
|
| Creditors,
accrued and other liabilities |
|
6,013,286 |
27,577,104 |
|
| Taxes paid |
|
8,002,013 |
(18,166,163) |
|
| Financial
charges paid |
|
(46,178,633) |
(27,214,494) |
|
|
------------------- |
------------------- |
|
|
(138,101,479) |
200,095,373 |
|
|
------------------- |
------------------- |
|
| Net
Cash from operating activities |
|
(67,420,909) |
92,183,985 |
|
|
|
|
|
| CASH
FLOW FROM INVESTMENT ACTIVITIES |
|
| Capital
expenditure |
|
(20,642,859) |
(92,100,712) |
|
| Sale
proceed of fixed assets |
|
580,368 |
3,866,588 |
|
| Payment
of long term loan and advances |
|
(7,454) |
114,900 |
|
| Payment
of long term deposits |
|
(11,671,990) |
272,000 |
|
|
------------------- |
------------------- |
|
| Net
cash utilitised towards investing activities |
|
(31,741,935) |
(87,847,224) |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Redeemable
capital |
|
(1,336,41 8) |
(688,907) |
|
| Liabilities
against assets subject to finance lease |
|
102,655,282 |
(3,054,865) |
|
| Payment
of dividends |
|
-- |
(9,583,200) |
|
|
------------------- |
------------------- |
|
| Net
cash utilized towards investing activities |
|
101,318,864 |
(13,326,972) |
|
|
------------------- |
------------------- |
|
| Net
changes in cash flow for the year |
|
2,156,020 |
(8,990,211 ) |
|
| Cash
and bank at the beginning of year |
|
1,280,962 |
10,271,173 |
|
|
------------------- |
------------------- |
|
| Cash
and bank at the year end |
|
3,436,982 |
1,280,962 |
|
|
=========== |
=========== |
|
| Karachi:
the 25th February 2000 |
|
|
|
|
|
|
| MAHMOOD
FARUQUE |
|
MOHAMMED FARUQUE |
|
| Chief
Executive |
|
Chairman |
|
|
|
|
