AL-NOOR SUGAR MILLS LIMITED 3rd Quarterly Results for the period 1st October to 30th June,
COMPANY INFORMATION BOARD OF DIRECTORS MR. ISMAIL H. ZAKARIA MR. YUSUF AYOOB MR. SULEMAN AYOOB MR. A. AZIZ AYOOB MR. NOOR MOHAMMAD ZAKARIA MR. ZIA ZAKARIA MR. SALIM AYOOB MR. ZOHAIR ZAKARIA MR. SHAMIM AHMAD MR. MUHAMMAD ASIF BOARD AUDIT COMMITTEE MR. A. AZIZ AYOOB MR. ZIA ZAKARIA MR. MUHAMMAD ASIF Chairman & Managing Director Resident Director Marketing Director (N.I.T. Nominee) (N.I.T. Nominee) Chairman Member Member CHIEF FINANCIAL OFFICER MR. ZOHAIR ZAKARIA COMPANY SECRETARY MR. MOHAMMAD YASIN MUGHAL FCMA AUDITORS HYDER BHIMJI & CO. Chartered Accountants LEGAL ADVISOR MR. ABDUL SATTAR PINGAR REGISTERED OFFICE 96-A, SINDHI MUSLIM SOCIETY, KARACHI-74400 Tel: 34550161-63 Fax: 34556675 FACTORY SHAHPUR JAHANIA, P.O. NOOR JAHANIA, TALUKA MORO, DISTRICT SHAHEED BENAZIR BHUTTO ABAD (NAWABSHAH) REGISTRAR & SHARE REGISTRATION OFFICE C & K MANAGEMENT ASSOCIATES (PVT) LTD. 404-TRADE TOWER, ABDULLAH HAROON ROAD, NEAR METROPOLE HOTEL, KARACHI - 75530 WEBSITE www.alnoorgroup.co 1
DIRECTORS REPORT IN THE NAME OF ALLAH THE MOST GRACIOUS AND MOST MERCIFUL Dear Members: Assalam-o-Alaikum: On behalf of the Board of Directors it is my privilege to present to you the unaudited financial statements of your Company for the nine months period ended. During the period under review your company earned pre-tax profit amounting to Rs 372.541 million as against Rs.209.668 million earned in the same period of last year. The financial results are summarized as under. Rs. in thousands Profit before taxation Rs. 372,541 Provision for taxation Rs. 53,568 Profit after taxation Rs. 318,973 Earning per share Rs. 17.18 PERFORMANCE REVIEW: Crushing operation -11 commenced on October 29, and your mills operated up to March 19,. The duration of crushing was 142 days as against 111 days operation in the preceding crushing season. During the current crushing season the mills crushed 888,736 metric tons of sugarcane as against 774,230 metric tons crushed during the last crushing season. The production of sugar was 71,655 metric tons as against 73,175 metric tons produced last year indicating a decrease of 2.08 percent. The production of sugar declined mainly due to reduction in the recovery rate to 8.05 percent as against 9.47 percent achieved last year. The recovery rate reduced mainly due to severe attack by Pyrilla pest which has reduced substantially the recovery percentage. This has significantly affected the profitability of the Mills by substantially increasing the cost of the sugar produced. The Government fixed minimum support price of sugarcane for the crushing season -11 at Rs.127 per 40 kg but due to competition amongst the sugar mills the average sugarcane cost increased to Rs. 191.34 per 40 kg. This is higher by 50.66 percent of the cost fixed by the Government. In sugar industry the sugarcane cost accounts for more than 75 percent of the total production cost of sugar. The production of sugar on overall country basis is about 4.138 million tons and carry over stock with the sugar mills was 0.675 million tons making available a total of 4.813 million tons against the country requirement of 4.500 million metric tons per annum. In addition Trading Corporation of Pakistan is also maintaining a stock of 0.358 million metric tons. These figures have been provided by Pakistan Sugar Mills Association. The year ahead looks favorable Insha Allah with timely availability of canal water for irrigating the standing sugarcane crop. 2
MDF BOARD DIVISION: Laminated products of the Division have now established their acceptability in the market but persistent power crises continue to effect the production and efficiency of the Division. CHANGES IN THE COMPOSITION OF BOARD OF DIRECTORS: As reported in the Half Yearly Report the tenure of the Board of Directors was completed on March 25, and following persons were elected by the members in the Extra Ordinary General Meeting held on the said date as Directors of your Company for a further period of three years: 1. Mr. Ismail H Zakaria 2. Mr. Suleman Ayoob 3. Mr. Yusuf Ayoob 4. Mr. A. Aziz Ayoob 5. Mr. Noor Mohammad Zakaria 6. Mr. Shamim Ahmad (N.I.T. Nominee) 7. Mr. Muhammad Asif (N.I.T. Nominee) 8. Mr. Zia Zakaria 9. Mr. Salim Ayoob 10. Mr. Zohair Zakaria Board of Directors wish to assure to respectable stakeholders for dedicated efforts to achieve the best results. Please pray to Almighty Allah to guide / help us to achieve the desired goals (Ameen). Karachi: Dated: 28 th July ISMAIL H. ZAKARIA CHAIRMAN & MANAGING DIRECTOR 3
CONDENSED INTERIM BALANCE SHEET AS AT 30TH JUNE, EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorised Capital Note Un-Audited Audited September 30, (Rupees in thousand) 20,000,000 ordinary shares of Rs.10/- each 200,000 200,000 Issued, subscribed and paid-up capital 185,703 185,703 Unrealised loss on remeasurement of investment (55) (55) Unapporpriated profit 1,190,022 928,667 1,375,670 1,114,315 SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT 673,534 708,767 NON-CURRENT LIABILITIES Long term financing 354,792 392,500 Liabilities against assets subject to finance lease 165,094 14,945 Long term deposits 7,060 1,089 Deferred liabilities 543,154 561,830 1,070,100 970,364 CURRENT LIABILITIES Trade and other payables 567,064 646,914 Interest / mark-up accrued 119,091 41,477 Short term borrowings 3,121,553 549,483 Current portion of long term financing & finance lease 211,623 168,549 Provision for income tax - net of payments 59,369 24,595 4,078,700 1,431,018 CONTINGENCIES AND COMMITMENTS 3 - - ASSETS NON - CURRENT ASSETS 7,198,004 4,224,464 Property, plant and equipment 4 2,798,094 2,681,942 Long-term investments 159,236 143,933 Long-term deposits 46,632 4,688 Long-term Loans 3,513 4,476 3,007,475 2,835,039 CURRENT ASSETS Stores, spares and loose tools 223,628 218,657 Stock-in-trade 3,619,087 965,121 Trade debts Unsecured - considered good 48,897 - Current maturity of long term loans 1,095 5,422 Short term loans and advances 121,638 41,528 Short term trade deposits and prepayments 4,591 8,164 Other receivables 14,419 10,104 Cash and bank balances 157,174 140,429 4,190,529 1,389,425 7,198,004 4,224,464 The annexed notes from 1 to 9 form an integral part of these condensed interim financial statements. ISMAIL H. ZAKARIA Chief Executive Officer 4 SULEMAN AYOOB Director
CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED) FOR THE NINE MONTHS PERIOD ENDED 30TH JUNE, Note For nine months October-June For the quarter April-June (Rupees in thousand) Sales 4,335,917 4,180,243 1,092,521 1,837,978 Cost of sales 5 (3,460,027) (3,514,301) (704,139) (1,607,437) Gross profit 875,890 665,942 388,382 230,541 Profit from trading activities 2,203 2,303 1,253 1,155 Other operating income 11,599 1,773 3,379 519 13,802 4,076 4,632 1,674 889,692 670,018 393,014 232,215 Administration expenses (208,011) (171,071) (70,211) (58,581) Selling and Distribution expenses (13,873) (14,836) (2,568) (3,207) Other operating expenses (26,354) (15,443) (12,409) (3,855) Finance cost (287,516) (260,667) (140,718) (114,569) Share of Profit/(Loss) of Investment in associate 18,603 1,667 4,509 (1,704) (517,151) (460,350) (221,397) (181,916) Profit before taxation 372,541 209,668 171,617 50,299 Taxation - Current (72,243) (22,668) (17,174) (4,083) - Deferred 18,675 (49,883) 2,509 (10,302) (53,568) (72,551) (14,665) (14,385) Profit for the period after taxation 318,973 137,117 156,952 35,914 Earnings per share - Basic and diluted- (Rupees) 17.18 7.38 8.45 1.93 The annexed notes from 1 to 9 form an integral part of these condensed interim financial statements ISMAIL H. ZAKARIA Chief Executive Officer SULEMAN AYOOB Director 5
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED) FOR THE NINE MONTHS PERIOD ENDED 30TH JUNE, For nine months October-June For the quarter April-June Profit for the period after taxation 318,973 137,117 156,952 35,914 Other Comprehensive Income (Rupees in thousand) Share of associate's transfer from surplus on revaluation of property, plant and equipment on account of incremental depreciation- net of deferred tax and disposal 2,545 2,684 849 891 2,545 2,684 849 891 Total Comprehensive Income for the period 321,518 139,801 157,801 36,805 The annexed notes from 1 to 9 form an integral part of these condensed interim financial statements ISMAIL H. ZAKARIA Chief Executive Officer SULEMAN AYOOB Director 6
CONDENSED INTERIM CASH FLOW STATEMENT (UNAUDITED) FOR THE NINE MONTHS PERIOD ENDED 30TH JUNE, (Rupees in thousand) A. CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation 372,541 209,668 Adjustments for non cash charges & other items: Depreciation of property, plant and equipment 153,264 138,045 Gain on disposal of property, plant and equipment (2,790) - Provision for employees compensated absences 3,500 766 Finance cost 287,516 260,667 Share of loss / (profit) of associated undertakings (18,603) 3,284 422,887 402,762 Operating cash flows before movement in working capital 795,428 612,430 (Increase) / decrease in current assets Stores, spares and loose tools (4,971) (34,098) Stock in trade (2,653,966) (1,341,840) Trade debts (48,897) (105,907) Loans and advances (75,783) (15,455) Trade deposits and short term prepayments 3,573 4,811 Other receivables (4,315) 120 (2,784,359) (1,492,369) Increase in current liabilities Trade and other payables (69,747) 248,614 Short term bank borrowings 2,572,070 1,341,309 2,502,323 1,589,923 Cash generated from operations 513,392 709,984 Income taxes paid (37,470) (38,894) Gratuity paid (13,603) (5,450) Long term loans/deposits (40,981) (316) Finance cost paid (209,902) (197,870) (301,956) (242,530) Net cash flows from operating activities 211,436 467,454 B. CASH FLOWS FROM INVESTING ACTIVITIES Fixed capital expenditure (272,067) (337,041) Sale proceeds from disposal of property, plant and equipment 5,441 - Dividend received 3,300 - Net cash flow from investing activities (263,326) (337,041) C. CASH FLOWS FROM FINANCING ACTIVITIES Long term finance obtained 275,000 100,000 Repayment of long term financing (110,208) (71,193) Long term Deposit 5,971 - Repayment of liabilities against assets subject to finance lease (9,277) - Dividend paid (92,851) (74,281) Net cash flow from financing activities 68,635 (45,474) Net increase / (decrease) in cash and cash equivalents (A+B+C) 16,745 84,939 Cash and cash equivalents at the beginning of the period 140,429 107,769 Cash and cash equivalents at the end of the period 157,174 192,708 The annexed notes from 1 to 9 form an integral part of these condensed interim financial statements ISMAIL H. ZAKARIA Chief Executive Officer 7 SULEMAN AYOOB Director
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UNAUDITED) FOR THE NINE MONTHS PERIOD ENDED 30TH JUNE, Issued, Subscribed & paid up capital General Revenue reserve Unrealised loss on remeasurement of investments Unappropriated profit Total (Rupees in thousand) Balance as at October 1, 2009 185,703 - (453) 691,824 877,074 Final dividend for the year ended September 30, 2009 @ Rs. 4 per share - - - (74,281) (74,281) Incremental depreciation arising due to surplus on revaluation of fixed assets - net of deferred tax - - - 36,253 36,253 Total Comprehensive Income for nine months ended - - - 139,801 139,801 Balance as at 185,703 - (453) 793,597 978,847 Balance as at October 1, 185,703 - (55) 928,667 1,114,315 Final dividend for the year ended September 30, @ Rs. 5 per share - - - (92,851) (92,851) Incremental depreciation arising due to surplus on revaluation of fixed assets - net of deferred tax - - - 32,688 32,688 Total Comprehensive Income for nine months ended - - - 321,518 321,518 Balance as at 185,703 - (55) 1,190,022 1,375,670 The annexed notes from 1 to 9 form an integral part of these condensed interim financial statements ISMAIL H. ZAKARIA Chief Executive Officer SULEMAN AYOOB Director 8
SELECTED EXPLANATORY NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION FOR THE NINE MONTHS PERIOD ENDED 30TH JUNE, 1. LEGAL STATUS AND OPERATIONS Al-Noor Sugar Mills Limited (the Company) was incorporated in Pakistan on August 08, 1969 as a public limited company under the Companies Act, 1913 (now the Companies Ordinance, 1984). The company is currently listed on Karachi and Lahore Stock Exchanges. The principal activities of the company is manufacturing of sugar, medium density fibre board,power generation and its sale.the registered office of the company is situated at 96-A, Sindhi Muslim Society, Karachi in the province of Sindh and the manufacturing facilities are located at Shahpur Jahania, District Nawabshah in the province of Sindh. The Company is currently organised into two operating divisions and these divisions are the basis on which the company reports its primary segment information. The operating divisions are as follows: Sugar Division MDF Board Division Manufacturing of sugar Manufacturing of medium density fiber board The financial statements are presented in Pak Rupees, which is the company's functional and presentation currency. 2. BASIS OF PREPARATION 2.1 These condensed interim financial statements have been prepared under historical cost convention modified by: - revaluation of certain property, plant and equipment; - Long term Investment and - Stock in trade when valued at Net realizable value 2.2 These unaudited interim financial statements have been prepared in accordance with the International Accounting Standard (IAS) 34 "Interim Financial Reporting" and in compliance with requirement of Section 245 of the Companies Ordinance, 1984. These interim financial statements are in condensed form and should be read in conjunction with the annual financial statements of the company for the year ended September 30,. 2.3 The accounting policies and basis for accounting estimates adopted for the preparation of these condensed interim financial statements are consistent with those followed in the preparation of the Company's annual financial statements for the year ended September 30,. Since the financial statements of Al Noor Modaraba Management (Pvt.) Ltd. (The Associate) are neither prepared except year ended June 30, hence the value of investment in Al Noor Modaraba Management (Pvt.) Ltd. (The Associate) has been taken on the basis of these financial statement. 9
2.4 Due to seasonal availability of sugarcane, the manufacturing of sugar is carried out during the period of availability of sugarcane and costs incurred / accrued upto the reporting date have been accounted for in these condensed interim financial statements. Accordingly,the costs incurred / accrued after the reporting date will be reported in subsequent interim and annual financial statements. 3. CONTINGENCIES AND COMMITMENTS 3.1 Contingencies There is no material change in the status of contingencies as disclosed in the published annual audited financial statements for the year ended September 30,. 3.2 Commitments 10 Unaudited Audited September 30, Rupees in '000 Letters of credit Stores 4,592 17,842 Plant and machinery 2,524 133,043 Raw Material 293,426 100,114 Capital work in progress Plant and machinery - 22,259 300,542 273,258 4. ADDITIONS TO AND DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT Cost of additions to and disposals of property, plant and equipment during the current period is given below; Additions Disposal (W.D.V) Additions Disposal (W.D.V) Operating assets ----------------- Rupees 000 ----------------- Owned Plant and machinery 191,418 1,418 358,450 - Building on free hold land 2,614-2,187 - Furniture and fixture 130-134 - Office equipment 4,345-3,136 - Vehicle 13,957 1,233 26,259 8 Intangible asset 6,683 219,147 2,651 390,1166 8 Capital work in progress Plant and machinery 50,485 (53,118) Civil work 2,435-52,920 (53,118) 272,067 337,048
5. COST OF GOODS SOLD For nine months October-June (Rupees in thousand) For the quarter April-June Cost of goods manufactured 5.1 6,101,093 4,849,082 614,948 471,327 Finished goods Opening stock 653,094 710,793 3,383,351 3,181,684 Closing stock (3,294,160) (2,045,574) (3,294,160) (2,045,574) (2,641,066) (1,334,781) 89,191 1,136,110 3,460,027 3,514,301 704,139 1,607,437 5.1 Cost of goods manufactured Raw material consumed 5,419,617 4,282,877 373,137 231,616 Salaries, wages and benefits 101,044 87,187 31,268 22,296 Stores and spares consumed 100,436 123,792 21,002 47,157 Process Chemical consumed 82,805 63,429 65,299 12,820 Packing materials 25,335 24,030 - - Fuel and oil 321,966 169,876 64,560 61,364 Power and water 132,077 111,731 57,375 59,871 Repair and maintenance 86,391 64,889 18,464 24,817 Insurance 9,541 9,408 2,078 3,009 Cane development cess and surcharge 5,555 4,839 (2) 291 Depreciation 131,293 118,915 43,900 41,137 Other manufacturing expenses 41,782 39,539 10,962 8,790 6,457,842 5,100,512 688,043 513,168 Less: by product sale Molasses 194,693 232,901 64,720 39,915 Power Generation 161,339 6,729 5,808 - Sander dust 5,062 5,259 2,021 1,777 (361,094) (244,889) (72,549) (41,692) Work-in-process Opening stock 8,891 2,244 4,000 8,636 Closing stock (4,546) (8,785) (4,546) (8,785) 4,345 (6,541) (546) (149) 6,101,093 4,849,082 614,948 471,327 11
6. TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS AND RELATED PARTIES The associated undertaking and related party comprises associated companies, staff retirement funds, directors and key management personnel. The transaction with related parties and associated undertakings are carried out in the normal course of business. Rupees in '000 Associates Sale of molasses 194,693 232,901 Insurance premium paid 10,836 7,165 Insurance claim received 2,509 - Service Rended - 100 Rent Received 27 36 Key management personnel Director's remuneration 24,809 19,979 Directors meeting fee 160 145 Executives remuneration 32,540 26,189 Contribution made to provident fund 5,070 4,142 7. SEGMENT INFORMATION The Company's operating businesses are organized and managed separately according to the nature of products produced with each segment representing a strategic business unit that offers different products and serves different markets. The sugar segment is the manufacturer of sugar and board segment is a manufacturer of Medium Density Fiber (MDF) board. The following tables represent revenue and profit information regarding business segment for the period ended and and assets and liabilities information regarding business segments as at and September 30, : Sugar MDF Board Total Nine months Nine months Nine months period ended period ended period ended ------------------------------(Rupees in '000)------------------------------ Segment Revenue 2,306,801 2,689,352 2,029,116 1,490,891 4,335,917 4,180,243 Segment Results 539,202 369,181 128,606 114,930 667,808 484,111 UNALLOCATED ITEMS Other operating expenses (26,354) (15,443) Finance charges (287,516) (260,667) Share of profit from associated undertaking 18,603 1,667 Profit before taxation 372,541 209,668 Provision for taxation (53,568) (72,551) Profit after taxation 318,973 137,117 OTHER INFORMATION Capital expenditure 99,251 270,750 172,816 66,291 272,067 337,041 Depreciation 69,946 54,396 83,318 83,649 153,264 138,045 12
BALANCE SHEET June 30, Sugar MDF Board Total September 30, June September 30, 30, June September 30, 30, ------------------------------(Rupees in '000)------------------------------ Assets Segment assets 4,859,093 2,098,359 2,179,675 1,982,172 7,038,768 4,080,531 Investment in associates 159,236 143,933 - - 159,236 143,933 Total assets 7,198,004 4,224,464 Liabilities Segment liabilities 4,421,246 1,868,679 727,554 532,703 5,148,800 2,401,382 8. GENERAL Figures have been rounded off to the nearest thousand of rupees. Corresponding figures have been rearranged and reclassified to reflect more appropriate presentation of events and transactions for the purposes of comparison. 9. APPROVAL OF FINANCIAL STATEMENTS These financial statements were authorized for issue on July 28, by the Board of Directors of the Company. ISMAIL H. ZAKARIA Chief Executive Officer SULEMAN AYOOB Director 13
BOOK POST PRINTED MATTER If undelivered please return to : AL-NOOR SUGAR MILLS LTD. 96-A, SINDHI MUSLIM SOCIETY, KARACHI-74400.