| Noon Sugar Mills Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| Corporate
Information |
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| Notice
of Meeting |
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| Directors'
Report and Chairman's Review |
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| Five
Years' Review at a Glance |
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| Financial
Analysis - Graphics |
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| Pattern
of Shareholding |
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| Auditors'
Report |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Cash
Flow Statement |
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| Notes
to the Accounts |
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| Corporate
Information |
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| BOARD
OF DIRECTORS |
Malik Manzoor Hayat Noon |
(Chairman & Chief
Executive) |
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|
K. Iqbal Talib |
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|
Javed Ali Khan |
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|
Mohammad Anwar Mir |
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|
Lt. Col. (Retd.) Mohammad
Bashir Ahmad |
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|
Zaheer Ahmad Khan |
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Saeed Iqbal |
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(PICIC) |
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| MANAGEMENT |
K. Iqbal Talib |
|
Managing Director |
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|
Ahmad Ali |
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General Manager |
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|
Ehsan R. Shaikh |
General Manager (Finance) |
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| SECRETARY |
|
Syed Anwar Ali |
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| AUDITORS |
|
Hameed Chaudhri &
Co., |
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Chartered Accountants |
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| LEGAL
ADVISERS |
Hassan & Hassan
(Advocates) |
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| BANKERS |
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United Bank Limited |
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Union Bank Limited |
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National Bank of Pakistan |
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Habib Bank Limited |
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Crescent Investment Bank
Limited |
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International Finance
Investment |
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& Commerce Bank Ltd. |
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ANZ Grindlays Bank Ltd. |
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| REGISTERED
OFFICE |
1st Floor, Alfalah
Building, |
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Shahrah-e-Quaid-e-Azam, |
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Lahore. |
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| SHARES
DEPARTMENT |
66 - Garden Block, |
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New Garden Town, |
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Lahore. |
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| MILLS |
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Bhalwal, District
Sargodha. |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 37th Annual General Meeting of Noon Sugar Mills
Limited will be held at 66 |
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| Garden
Block, New Garden Town, Lahore on Friday, 31 March, 2000 at 11.00 a.m. to
transact the following |
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| business:- |
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| 1.
To confirm the minutes of the Annual General Meeting held on 31 March, 1999. |
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| 2.
To receive, consider and adopt the audited accounts for the year ended 30
September, 1999 and the |
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| reports
of the directors and auditors thereon. |
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|
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| 3.
To approve payment of dividend. |
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| 4.
To appoint auditors for the ensuing period and fix their remuneration. |
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| 5.
To transact any other business as may be placed before the meeting with the
permission of the Chairman. |
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| The
share transfer books of the Company will remain closed from 22 March, 2000 to
31 March, 2000 (both |
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| days
inclusive). Share transfers received upto close of business on 21 March, 2000
shall entitle the transferees |
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| to
the above dividend. |
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| A
member entitled to attend and vote at this meeting may appoint another member
as his/her proxy to attend, |
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| speak
and vote on his/her behalf. Proxies in order to be effective must be received
by the Company at the |
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| registered
office not less than 48 hours before the meeting. |
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By Order of the Board |
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SYED ANWAR ALl |
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| Lahore:
28 February, 2000 |
|
Secretary |
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| DIRECTORS'
REPORT AND CHAIRMAN'S REVIEW |
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| Dear Members, |
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| On
behalf of your Directors, I welcome you to the 37th Annual General Meeting
and present the Annual |
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| Report
alongwith Audited Accounts of your Company for the year ended September 30,
1999. |
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|
| FINANCIAL
RESULTS |
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| A1-Hamdulillah,
the operations of your Company for the year under review resulted in an
after-tax profit of |
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| Rs.
45.621 million compared with Rs. 26.799 million earned during the previous
year. After adding the |
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| previous
year's Unappropriated Profit, a sum of Rs. 46.239 million is available for
appropriation. Your |
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| Directors
propose to appropriate the available profit as follows: |
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1999 |
1998 |
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|
000's Rs. |
000's Rs. |
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| Profit
available for appropriation |
|
46,239 |
27,374 |
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| Proposed
appropriations: |
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| Transfer
to General Reserve |
|
25,000 |
19,000 |
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| Cash
Dividend @ 40% (1998: 15 %) |
|
20,683 |
7,756 |
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------------------ |
------------------ |
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45,683 |
26,756 |
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------------------ |
------------------ |
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| Unappropriated
profit carried forward |
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|
556 |
618 |
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========== |
========== |
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| You
will be pleased to learn that your Directors were able to maintain their
pay-out tradition and have |
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| recommended
a cash dividend of 40 %. |
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|
| OPERATING
RESULTS |
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| The
operating results of your Company for the year under review with comparative
figures of last year are as |
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| follows: |
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|
1998 |
1997 |
|
|
|
|
|
| Sugar |
|
|
|
| Operating
period |
|
Days |
147 |
158 |
|
| Cane crushed |
|
M. Tons |
447,215 |
457,542 |
|
| Sugar produced |
|
M. Tons |
37,215 |
38,194 |
|
| Average
sucrose recovery |
|
% age |
8.32 |
8.35 |
|
|
|
|
| Distillery |
|
|
|
| Operating
period |
|
Days |
233 |
281 |
|
| Molasses
processed |
|
M. Tons |
33,149 |
43,066 |
|
| Alcohol
produced |
|
000' s Ltrs. |
10,294 |
12,354 |
|
| Average yield |
|
Ltrs./Ton |
290 |
287 |
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|
| Sugar |
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| In
view of the reported country wide increase in the cane plantation area by
over 9 %, the overall size of |
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| sugarcane
crop was expected to produce better results than last year. Accordingly, the
total sugar production |
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| for
1998-99 was estimated at 3 8 million tons. However, a sharp fall in sucrose
recovery due to wide spread |
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| disease
in the low sugar yielding and degenerated Indian variety of cane, massively
propagated in the Province |
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| of
Punjab, the actual sugar production remained at last year's level of 3.5
million tons, despite cane crushing |
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| of
43.0 million tons as against 41.1 million tons in 1997-98 season. |
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| The
above short fall also reflects in a slight drop of 979 M.tons (2.6%) in sugar
production of your Mills from |
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| last
year, attributed mainly to the above factors. |
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|
| As
reported earlier, a huge carry-over stock from 1997-98 and optimistic
production estimates for 1998-99 |
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| season,
kept the sugar market under constant pressure during the first half of the
fiscal year. Most of the Mills |
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| were
forced to sell sugar below their production cost in order to meet working
capital requirements. The export |
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| of
surplus stocks of sugar however, relieved some pressure and second half of
the year witnessed stable |
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| conditions
in the local market, contributing positively to the year-end operating
results of your Company. |
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|
| Distillery: |
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| During
the year under review, the distillery plant produced 10.294 million litres of
industrial alcohol compared |
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| with
12·354 million litres produced during the preceding year. Shifting of boiler
from sugar mill to distillery |
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| site
together with the installation of Effluent Treatment Plant restricted the
operational period of the distillery to |
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| 233
days as against 281 days of the previous year. |
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| Both
the local and international markets remained suppressed mainly due to a huge
surplus of alcohol in Brazil |
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| and
massive devaluations of currency in South East Asia and Brazil. Despite
unfavourable conditions prevalent |
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| in
the international market, we were able to export 6.192 million litres of
industrial alcohol during the year |
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| under
review. This represented 60 % of our production and helped in offsetting some
effects of unfavourable |
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| price
of industrial alcohol offered in the domestic market. |
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| It
is gratifying for your Directors to announce that the Effluent Treatment
Plant installed during May, 1999 |
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| started
producing the desired results immediately after its commissioning. In
addition to waste water treatment, |
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| this
plant produces Bio-Gas which largely replaces furnace oil for operation of
boilers, resulting in a |
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| considerable
saving in the rapidly increasing energy costs. |
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|
| PROSPECTS
FOR 1999-2000 |
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| The
current crushing season commenced from November 10, 1999 and upto February
15, 2000 your Mills had |
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| crushed
261,481 tons (1998: 247,374 tons) of sugarcane and produced 20,063 tons
(1998: 18,706 tons) of |
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| sugar
with an average sucrose recovery of 7.79 % (1998: 7.70 %). |
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| Sugarcane
production for 1999-2000 season is estimated to be around 48.0 million tons
compared with 53.1 |
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| million
tons produced during the last season. The major reason for drop in the crop
size is reduction of 15-20 % |
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| in
sugarcane plantation area compared with the previous season mainly due to
non-availability of healthy seed |
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| of
good varieties of cane for spring plantation to replace the degenerated COJ
1148 (Indian) variety in Punjab. |
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| Sugar
production for 1999-2000 season was initially estimated to be around 3.2
million tons based on the |
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| assumption
that drop in plantation area would partly be offset by increase in sucrose
recovery. However, the |
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| latest
reports indicate that the overall production of sugar would be around 2.8
million tons because of 10-15 % |
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| country
wide drop in sugarcane yield/acre in addition to the sizeable reduction in
area under plantation in |
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| Punjab
as mentioned above. |
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| A
timely decision by the Government to revive export incentives last year
helped the industry to get rid of the |
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| excessive
stocks of sugar and the current season started with a normal buffer stock.
Sugar production of 1999- |
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| 2000
season combined with carry-over stocks of last year is therefore, expected to
cater to only domestic |
|
| consumption. |
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| The
sugar industry is still suffering from the sharp increase of 46 % in the
support price of cane from Rs. |
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| 24/40
Kg. to Rupees 35/40 Kg. in 1997-1998 season, for this massive increase in the
cost of production has |
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| not
been fully absorbed in the sale price of sugar. This has been further
compounded by a squeeze in |
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| availability
of working capital by the banks under the cover of prudential regulations of
the State Bank. Most |
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| of
the mills are therefore, compelled to sell their daily production below their
cost during the crushing season |
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| for
competitive purchase of cane on cash basis. Due to shortage of cane this
phenomenon has a more prominent |
|
| effect
during the current season. |
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| Erratic
supply of sugarcane to the mills, particularly during the first fortnight of
January, 2000 when only one- |
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| half
of the quantity of cane was crushed as compared to the same period of last
season, resulted in an early |
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| price
war among the sugar mills. Gate supply of sugarcane fell below 50% of the
daily crush and we are left |
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| with
no alternative but to procure sugarcane at a substantially higher price from
outside of our normal supply |
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| area
to meet our requirements so as to cover the fixed costs of operation. |
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| The
distillery plant is expected to achieve the targetted production of 13.0
million litres as against 10.3 million |
|
| litres
produced during the last year. More than 50 % of the production is already
committed for exports, of |
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| which
two consignments consisting of 2.9 million litres of industrial alcohol were
shipped by December, 1999 |
|
| and
the third shipment of 3.1 million litres is expected during February, 2000.
Possibilities of further exports |
|
| are
being explored in order to continue production and relieve pressure from the
local market. This is of course |
|
| subject
to availability of half of our total requirement of molasses committed by the
adjacent mills. |
|
|
| Despite
the depressed market conditions and relatively higher cost of sugar
production, your management |
|
| hopes
to achieve positive financial results for 1999-2000 if the sugar prices
stabilise during the later part of the |
|
| year. |
|
|
| Y2K
COMPLIANCE |
|
| The
management had taken appropriate steps for compliance to Y2K requirements and
is pleased to report that |
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| we
did not encounter any problems with the start of new millennium. |
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|
| AUDITOR |
|
| The
retiring auditors, M/s Hameed Chaudhri & Co., Chartered Accountants,
being eligible offer themselves |
|
| for
re-appointment for the ensuing period. |
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|
| SHARE
HOLDING |
|
| Statement
showing pattern of shareholding of the Company as at September 30, 1999 is
annexed. |
|
|
| ACKNOWLEDGMENT |
|
| Your
Directors are pleased to extend their sincerest thanks to the shareholders
for the continued confidence |
|
| reposed
by them in the Board. They would also like to record their appreciations for
the dedicated efforts of |
|
| the
workers, staff and members of the management team and hope that the same
spirit will continue in future as |
|
| well. |
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|
|
|
For and on behalf of the Board |
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|
|
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|
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|
|
|
MALIK MANZOOR HAYAT NOON |
|
| Lahore:
28 February, 2000. |
|
Chairman & Chief Executive |
|
|
|
| FIVE
YEARS' REVIEW AT A GLANCE |
|
|
| YEAR |
|
|
1999 |
1998 |
1997 |
1996 |
1995 |
|
|
|
|
|
| Sugar
Production: |
|
|
| Cane crashed |
|
(M. Tons) |
447,215 |
457,542 |
410,026 |
383,277 |
483,404 |
|
| Average
sucrose |
|
|
| recovery |
|
(% age) |
8.32 |
8.35 |
8.26 |
8.46 |
8.88 |
|
| Sugar produced |
|
(M. Tons) |
37,215 |
38,194 |
33,898 |
32,414 |
42,984 |
|
| Operating
period |
(Days) |
147 |
158 |
157 |
153 |
170 |
|
|
|
|
|
| Alcohol
Production: |
|
|
| Molasses |
|
|
|
| processed |
|
(M. Tons) |
33,149 |
43,066 |
28,527 |
23,208 |
41,955 |
|
| Alcohol produced |
(000' Ltrs.) |
10,294 |
12,354 |
8,089 |
6,809 |
12,640 |
|
| Average
alcohol |
|
|
| yield |
|
(Litres) |
290 |
287 |
284 |
293 |
301 |
|
| Operating
period |
(Days) |
233 |
281 |
179 |
147 |
284 |
|
|
|
|
|
| Operating
results: |
|
|
| Sales |
|
(000' Rs.) |
794,093 |
751,593 |
587,596 |
733,081 |
664,062 |
|
| Cost of sales |
|
(000' Rs.) |
663,586 |
659,635 |
469,622 |
575,335 |
503,492 |
|
| Gross profit |
|
(000' Rs.) |
130,507 |
91,958 |
117,974 |
157,746 |
160,570 |
|
| Pre-tax profit |
|
(000' Rs.) |
67,071 |
21,737 |
68,229 |
106,598 |
99,706 |
|
| Profit
after taxation |
(000' Rs.) |
45,621 |
26,799 |
65,023 |
80,529 |
70,171 |
|
|
|
|
|
| Shareholders'
Equity: |
|
|
| Paid up capital |
(000' Rs.) |
51,708 |
51,708 |
51,708 |
51,708 |
47,007 |
|
| Reserves & surplus |
(000' Rs.) |
250,556 |
225,618 |
206,575 |
154,479 |
99,334 |
|
| Shareholders' |
|
|
|
| equity |
|
(000' Rs.) |
302,264 |
277,326 |
258,283 |
206,187 |
146,341 |
|
| Break-up value |
|
|
|
| per share |
|
(Rupees) |
58.46 |
53.63 |
49.95 |
39.88 |
31.13 |
|
| Earnings
per share |
(Rupees) |
8.82 |
5.18 |
12.58 |
15.57 |
14.93 |
|
| Return
on equity |
(% age) |
15.09 |
9.66 |
25.18 |
39.06 |
47.95 |
|
|
|
|
|
| Financial
position: |
|
|
| Current assets |
|
(000' Rs.) |
257,139 |
330,838 |
340,411 |
257,715 |
235,340 |
|
| Fixed capital |
|
|
|
| expenditure |
|
(000' Rs.) |
323,788 |
301,941 |
257,904 |
244,943 |
234,216 |
|
| Total assets |
|
(000' Rs.) |
582,924 |
635,171 |
599,709 |
504,146 |
471,835 |
|
| Current
liabilities |
(000' Rs.) |
112,487 |
200,414 |
197,747 |
143,470 |
157,134 |
|
| Long
term debts |
(000' Rs.) |
33,298 |
34,602 |
24,862 |
38,599 |
52,185 |
|
| Total liabilities |
|
(000' Rs.) |
280,660 |
357,845 |
341,426 |
297,959 |
325,495 |
|
| Current ratio |
|
|
2.29 |
1.65 |
1.72 |
1.80 |
1.50 |
|
| Debt
equity ratio |
|
9.92 |
11.09 |
8.78 |
15.77 |
26.20 |
|
|
|
|
|
| Dividends: |
|
|
|
| Cash |
|
(% age) |
*40 |
15 |
25 |
40 |
30 |
|
|
| Bonus shares |
|
(% age) |
-- |
-- |
-- |
-- |
10 |
|
|
| Total pay out |
|
(% age) |
*40 |
15 |
25 |
40 |
40 |
|
|
|
|
|
| * Proposed |
|
|
|
| FORM 34 |
|
| PATTERN
OF SHAREHOLDING |
|
| AS
AT 30 SEPTEMBER, 1999 |
|
|
| Number of |
Shareholding |
|
Total |
|
|
| Shareholders |
From |
To |
Shares Held |
|
|
|
| 810 |
1 |
100 |
25,875 |
|
| 555 |
101 |
500 |
129,641 |
|
| 206 |
501 |
1,000 |
142,473 |
|
| 299 |
1,001 |
5,000 |
603,132 |
|
| 37 |
5,001 |
10,000 |
273,903 |
|
| 15 |
10,001 |
15,000 |
192,380 |
|
| 4 |
15,001 |
20,000 |
69,822 |
|
| 3 |
20,001 |
25,000 |
72,782 |
|
| 2 |
25,001 |
30,000 |
54,176 |
|
| 1 |
35,001 |
40,000 |
39,962 |
|
| 1 |
40,001 |
45,000 |
40,678 |
|
| 3 |
45,001 |
50,000 |
144,200 |
|
| 2 |
75,001 |
80,000 |
159,720 |
|
| 1 |
90,001 |
95,000 |
93,637 |
|
| 1 |
115,001 |
120,000 |
117,422 |
|
| 1 |
125,001 |
130,000 |
128,771 |
|
| 1 |
475,001 |
480,000 |
479,217 |
|
| 1 |
600,001 |
605,000 |
602,963 |
|
| 2 |
895,001 |
900,000 |
1,800,000 |
|
| ------------------ |
|
|
------------------ |
|
| 1,945 |
|
5,170,754 |
|
| ========== |
|
========== |
|
|
| Note:
Slabs representing Nil holdings have been omitted. |
|
|
| CATEGORIES
OF SHAREHOLDERS |
|
| AS
AT 30 SEPTEMBER, 1999 |
|
|
| Categories |
|
Nos. |
Shares Held |
Percentage |
|
|
| Individuals |
|
1,914 |
2,270,412 |
43.91 |
|
| Investment
Companies |
|
4 |
3,527 |
0.07 |
|
| Insurance
Companies |
|
6 |
173,007 |
3.34 |
|
| Joint
Stock Companies |
|
7 |
537,106 |
10.39 |
|
| Financial
Institutions |
|
9 |
1,962,793 |
37.96 |
|
| Modarabas |
|
1 |
49,500 |
0.96 |
|
| Others |
|
|
| Securities
& Exchange |
|
|
| Commission
of Pakistan |
|
1 |
1 |
0.00 |
|
| Administrator,
Abandoned Properties |
1 |
911 |
0.02 |
|
| Co-operative
Societies |
|
2 |
173,497 |
3.35 |
|
|
|
------------------ |
------------------ |
------------------ |
|
| Total |
|
1,945 |
5,170,754 |
100.00 |
|
|
|
========== |
========== |
========== |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of NOON SUGAR MILLS LIMITED as at 30
September, 1999 |
|
| and
the related Profit and Loss Account and Cash Flow Statement, 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 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 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 30 September, 1999 and of the profit and cash flows for the year then
ended; and |
|
|
| (d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was deducted |
|
| by
the Company and deposited in the Central Zakat Fund established under Section
7 of that |
|
| Ordinance. |
|
|
|
|
|
|
|
|
|
HAMEED CHAUDHRI & CO. |
|
| Lahore:
29 February, 2000 |
|
CHARTERED ACCOUNTANTS |
|
|
|
| BALANCE
SHEET AS AT 30 SEPTEMBER, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
Note |
Rupees |
Rupees |
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
|
| Authorised
capital |
|
|
|
| 7,500,000
ordinary shares of Rs, 10 each |
|
|
75,000,000 |
75,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
3 |
51,707,540 |
51,707,540 |
|
| Revenue
reserves |
|
4 |
250,000,000 |
225,000,000 |
|
| Unappropriated
profit |
|
556,317 |
618,429 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
302,263,857 |
277,325,969 |
|
|
|
|
| REDEEMABLE
CAPITAL |
|
5 |
8,237,568 |
11,949,611 |
|
| LIABILITIES
AGAINST ASSETS |
|
|
|
|
| SUBJECT
TO FINANCE LEASE |
|
6 |
25,060,897 |
|
|
| ADVANCE
FROM LEASING COMPANY |
|
7 |
-- |
22,652,106 |
|
| LONG
TERM DEPOSITS |
|
8 |
1,891,520 |
1,367,909 |
|
|
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
|
|
| Provision
for cane quality premium |
|
9 |
79,334,652 |
79,334,652 |
|
| Provision
for gratuity |
|
|
42,725,880 |
35,327,602 |
|
| Deterred
taxation |
|
10 |
10,922,997 |
6,799,488 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
132,983,529 |
121,461,742 |
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
portion of long term liabilities |
|
11 |
7,633,136 |
12,258,883 |
|
| Short
term borrowings |
|
12 |
12,356,888 |
12,356,888 |
|
| Short
term finances |
|
13 |
10,665,000 |
121,447,146 |
|
| Creditors,
accruals and other payables |
|
14 |
39,282,580 |
37,209,282 |
|
| Workers'
Welfare Fund |
|
|
3,728,229 |
3,236,264 |
|
| Provision
for taxation |
