CONTENTS Corporate Information 2 Directors Review 3 Condensed Interim Balance Sheet 4 Condensed Interim Profit and Loss Account 5 Condensed Interim Cash Flow Statement 6 Condensed Interim Statement of Changes in Equity 7 Notes to the Condensed Interim Financial Information 8 1
CORPORATE INFORMATION Board of Directors Mr. Naveed M. Sheikh - Chairman Mr. Waqar Ibn Zahoor Bandey - Director/CEO Mian Muhammad Ali - Director Mr. Muhammad Asghar - Director Mr. Ahmed Haji Mussa - Director Mr. Asad Ali - Director Ms. Samina Gul - Director Company Secretary Mr. Abdul Mansoor Khan Audit Committee Mr. Muhammad Asghar - Chairman Mian Muhammad Ali - Member Ms. Samina Gul - Member HR & Remuneration Mr. Muhammad Asghar - Chairman Committee Mr. Asad Ali - Member Ms. Samina Gul - Member Financial Institutions Auditors Legal Advisors Registered Office Shares Registrar National Bank of Pakistan MCB Bank Limited Faysal Bank Limited KASB Bank Limited The Bank of Punjab Al-Baraka Bank (Pakistan) Limited Pak Oman Investment Company Limited Naveed Zafar Ashfaq Jaffery & Co. Chartered Accountants Ms. Aniqua Sheikh Advocate Ground Floor, Ismail Aiwan-e-Science Building 205 Ferozepur Road, Lahore-54600 Ph # +92 (42) 3575-8970 +92 (42) 3575-1308 Fax # +92 (42) 3576-3247 Drummonds (Pvt.) Limited Suit # 204-206, 2 nd Floor, Al Qadir Heights 1-Babar Block, New Garden Town, Lahore Ph # +92 (42) 3584-6644/45 Production Facilities Phalia Project Mian Chanu Project Karmanwala, Tehsil Phalia Chak # 84/15L, 15 KM Distt. Mandi Bahauddin Vehari Road, Kacha Khoo Ph # +92 (546) 541-151/54 Tehsil Mian Chanu Fax # +92 (546) 541-162 Distt. Khanewal Ph # +92 (652) 553-182 Fax # +92 (652) 660-452 2
DIRECTORS' REVIEW Dear Members We are pleased to present the condensed un-audited interim financial information of the company for the nine months ended on June 30, 2012. Turnover for the period under review condensed to Rupees 3.43 Billion as compared with Rupees 4.37 Billion for the corresponding period of last year whilst the cost of sales stood at Rupees 2.86 Billion (2011: Rupees 3.70 Billion) bringing gross profit to Rupees 574 Million (2011: Rupees 670 Million). After making provision for taxation, profit for the nine months is Rupees 43 Million (2011: Rupees 72 Million). Earnings per share is Rupee 0.43 (2011: Rupee 0.73 per share). The selling price of sugar remained depressed during all the three quarters of the period under review. However, due to better performance of our Distillery Operations clubbed with additional revenues from CO2 Operations contributed positively towards company's overall results. Ethanol prices in the international market that had declined over the past few months have started to show an upward trend. If sugar and ethanol prices move upwards in the forthcoming months, the overall financial performance of the Company is likely to improve in the fourth quarter. The Management of your company is taking all appropriate measures to plan and manage the challenges it is foreseeing of the future. We are thankful to all our valuable Members, Banks and Government departments for their trust, persistent support and patronage and would like to place on record its gratitude to all the Growers and Employees of the company for their contribution, dedication and hard work. For and on behalf of the Board Lahore Waqar Ibn Zahoor Bandey 30 th July, 2012 Director / CEO 3
CONDENSED INTERIM BALANCE SHEET AS AT JUNE 30, 2012 PROPERTY AND ASSETS Note Un-Audited June 30, 2012 Audited September 30, 2011 NON-CURRENT ASSETS Property, plant and equipment 7 3,387,253 3,515,925 CURRENT ASSETS Stores, spares and loose tools 159,436 135,899 Stocks in trade 3,283,605 896,981 Trade debts 3,807 324,547 Advances, deposits, prepayments and other receivables 272,396 196,583 Cash and bank balances 3,450 16,959 3,722,694 1,570,969 TOTAL PROPERTY AND ASSETS 7,109,948 5,086,894 EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorized capital: 100,000,000 (September 30, 2011: 100,000,000) ordinary shares of Rs. 10 each 1,000,000 1,000,000 Issued, subscribed and paid-up capital 8 990,200 990,200 Unappropriated profit 577,550 534,743 1,567,750 1,524,943 NON-CURRENT LIABILITIES Long term finances 9 809,405 1,097,528 Staff retirement benefits 10,938 12,943 Deferred taxation 5,000 5,000 825,343 1,115,471 CURRENT LIABILITIES Current portion of long term finances 277,429 137,500 Short term borrowings 10 1,555,461 1,625,102 Trade and other payables 2,748,590 527,388 Accrued finance cost 97,637 121,221 Provision for taxation 37,737 35,269 4,716,855 2,446,480 CONTINGENCIES AND COMMITMENTS 11 - - 7,109,948 5,086,894 The annexed selected notes form an integral part of this condensed interim financial information. Chief Executive Officer Director 4
CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (Un-Audited) FOR THE PERIOD ENDED JUNE 30, 2012 Nine Months Ended June 30, 2012 Third Quarter Ended June 30, 2011 2012 2011 Sales - net 3,432,506 4,368,574 814,900 847,488 Cost of sales 2,858,311 3,698,303 647,546 603,020 Gross Profit 574,195 670,271 167,354 244,468 Operating expenses Administrative expenses 81,449 81,069 22,626 22,783 Distribution and marketing expenses 124,285 131,706 25,794 52,592 205,734 212,775 48,420 75,375 368,461 457,496 118,934 169,093 Other operating income 276 5,184 26 121 Operating profit 368,737 462,680 118,960 169,214 Financial and other charges 291,605 343,940 90,560 120,819 Profit before taxation 77,132 118,740 28,400 48,395 Provision for taxation 34,325 46,702 8,149 8,475 Profit for the period 42,807 72,038 20,251 39,920 Other comprehensive Income Other comprehensive income-net of tax - - - - Total comprehensive income 42,807 72,038 20,251 39,920 Earnings per share - basic Rupees 0.43 0.73 0.20 0.41 The annexed selected notes form an integral part of this condensed interim financial information. Chief Executive Officer Director 5
CONDENSED INTERIM CASH FLOW STATEMENT (Un-Audited) FOR THE PERIOD ENDED JUNE 30, 2012 CASH FLOWS FROM OPERATING ACTIVITIES Profit for the period before taxation 77,132 118,740 Adjustments for non-cash and other items: Finance cost 287,545 337,690 Depreciation 123,481 109,483 Staff retirement benefits -gratuity (190) 750 410,836 447,923 Cash generated from operating activities before working capital changes 487,968 566,663 Adjustments for Working Capital Changes (Increase) / Decrease in current assets: Stores, spares and loose tools (23,537) 24,668 Stocks-in-trade (2,386,624) (862,993) Trade debts 320,740 143,247 Advances, deposits, prepayments and other receivables (43,609) (6,624) Increase in current liabilities: Trade and other payables 2,221,202 74,839 Net working capital changes 88,172 (626,863) Finance cost paid (311,129) (335,015) Staff retirement benefits -gratuity paid (1,815) (1,818) Income tax paid (64,061) (18,568) (377,005) (355,401) Net cash generated/(used) in operating activities 199,135 (415,601) CASH FLOWS FROM INVESTING ACTIVITIES Fixed capital expenditure incurred (3,664) (18,269) Proceeds from sale of fixed assets 8,885 - Net cash generated/(used) in investing activities 5,191 (18,269) CASH FLOWS FROM FINANCING ACTIVITIES Nine Months Ended June 30, 2012 June 30, 2011 Short term borrowings (69,641) 560,571 Long term finances (148,194) (116,320) Net cash (used)/generated from financing activities (217,835) 444,251 Net (Decrease)/Increase in Cash and Cash Equivalents (13,509) 10,381 Cash and Cash Equivalents at the beginning of the period 16,959 37,576 Cash and Cash Equivalents at the end of the period 3,450 47,957 The annexed selected notes form an integral part of this condensed interim financial information. Chief Executive Officer Director 6
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (Un-Audited) FOR THE PERIOD ENDED JUNE 30, 2012 Particulars Share capital Unappropriated profit Total equity Balance as at September 30, 2010 (audited) 990,200 469,032 1,459,232 Total comprehensive income - 72,038 72,038 Balance as at June 30, 2011 (un-audited) 990,200 541,070 1,531,270 Balance as at September 30, 2011 (audited) 990,200 534,743 1,524,943 Total comprehensive income - 42,807 42,807 Balance as at June 30, 2012 (un-audited) 990,200 577,550 1,567,750 The annexed selected notes form an integral part of this condensed interim financial information. Chief Executive Officer Director 7
SELECTED NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL INFORMATION (Un-Audited) FOR THE PERIOD ENDED JUNE 30, 2012 1 THE COMPANY AND ITS OPERATIONS Colony Sugar Mills Limited ("the Company") was incorporated in Pakistan on May 09, 2007 under the Companies Ordinance, 1984. The shares of the company are quoted on Karachi Stock Exchange (Guarantee) Limited. The Company's registered office is situated in Lahore and its manufacturing facilities are located at Tehsil Phalia, District Mandi Bahauddin and Tehsil Mian Channu, District Khanewal. The company is engaged in manufacturing and sale of white refined sugar and ethanol. 2 STATEMENT OF COMPLIANCE This condensed interim financial information has been prepared in, all material respects, in accordance with the requirements of International Accounting Standard (IAS) 34, "Interim Financial Reporting ", as applicable in Pakistan. This condensed interim financial information is un-audited and is being submitted to the members as required by section 245 of the Companies Ordinance, 1984 and listing regulations of Karachi Stock Exchange. 3 BASIS OF PRESENTATION, MEASUREMENT AND ESTIMATION Estimates used in preparation of this condensed interim financial information are reasonable under the circumstances, continually evaluated and are based on historical experience.the basis of presentation and measurement adpoted for the preparation of this condensed interim financial information are the same as those applied in preparation of the preceding annual published audited financial statements as of September 30, 2011. 4 SIGNIFICANT ACCOUNTING POLICIES Accounting policies adpoted and applied for the preparation of this condensed interim financial information are the same as those applied in preparation of annual published audited financial statements of the Company for the year ended September 30, 2011. 5 SEASONALITY OF OPERATION The Company is inter-alia, engaged in manufacturing of sugar for which the season begins in November and ends in April. Therefore, majority of expenses are incurred and production activities are undertaken in first half of the Company's financial year. 6 PROVISIONS The provisions in respect of staff retirement benefits, workers' profit participation fund and taxation are estimated and these are subject to final adjustment in the annual audited financial statements. 7 PROPERTY, PLANT AND EQUIPMENT Note Un-Audited June 30, 2012 Audited September 30, 2011 Opening book value 3,515,925 3,022,160 Add: Additions during the period 7.1 3,664 655,593 3,519,589 3,677,753 Less: Disposed of during the period -Vehicles (8,855) - 3,510,734 3,677,753 Less: Depreciation charged during the period (123,481) (161,828) 8 3,387,253 3,515,925
7.1 Additions during the period Un-Audited June 30, 2012 Audited September 30, 2011 Company owned assets Building on freehold land - 6,340 Plant and machinery 328 645,215 Furniture, fixture and equipments 135 3,908 Vehicles 3,200 130 8 ISSUED, SUBSCRIBED AND PAID UP CAPITAL 3,664 655,593 64,020,000 (September 30, 2011: 64,020,000) Ordinary shares of Rupees 10/- each fully paid-up in cash 640,200 640,200 35,000,000 (September 30, 2011: 35,000,000) Ordinary shares of Rupees 10/- each fully paid for consideration other than cash 350,000 350,000 9 LONG TERM FINANCES 990,200 990,200 Outstanding balance 1,086,834 1,235,028 Less: Current portion shown under current liabilities (277,429) (137,500) 10 SHORT TERM BORROWINGS 809,405 1,097,528 These represent cash finance, running finance, export refinance, murabaha/bi-salam obtained from various banks and other credits are subject to mark up ranging from 11% to 16.73% per annum (September 30, 2011: 9% to 17.30% per annum) on funds used. These are secured against pledge / hypothecation of stock-in-trade, charge on current assets, demand promissory note, Company's performance guarantee and personal guarantee of a sponsor director. 11 CONTINGENCIES Guarantees given to sui northern gas pipelines limited, trading corporation of pakistan (private) limited and director excise and taxation by banks on behalf of the company outstanding as at June 30, 2012 were for Rupees 58.2 million (September 30, 2011: Rupees 46.6 million). Commitments Nill - (September 30, 2011: Nill) in the normal course of business. 9
12 BUSINESS SEGMENTS INFORMATION Nine Months Ended June 30, 2012 Sugar Ethanol Total Nine Months Ended June 30, 2011 Sugar Ethanol Total Revenue Local 3,046,141 98,508 2,534,256 3,684,433 23,535 3,406,378 500,891 54,292 419,735 66,220 7,079 73,299 Export - 1,054,534 1,054,534-1,118,846 1,118,846-430,278 430,278-783,507 783,507 Other by-products 2,876-2,876 2,788 11,877 14,665 - - - - 11,877 11,877 3,049,017 1,153,042 3,591,666 3,687,221 1,154,258 4,539,889 500,891 484,570 850,013 66,220 802,463 868,683 Less: Sales tax, excise duty and commission 153,061 6,099 159,160 165,699 5,616 171,315 35,113-35,113 18,102 3,093 21,195 2,895,956 1,146,943 3,432,506 3,521,522 1,148,642 4,368,574 465,778 484,570 814,900 48,118 799,370 847,488 Cost of sales 2,729,932 738,772 2,858,311 3,134,862 865,031 3,698,303 494,426 288,568 647,546 97,324 505,696 603,020 Gross profit 166,024 408,171 574,195 386,660 283,611 670,271 (28,648) 196,002 167,354 (49,206) 293,674 244,468 Administrative expenses 75,001 6,448 81,449 73,577 7,492 81,069 22,197 429 22,626 20,129 2,654 22,783 Distribution and marketing expenses 10,270 114,015 124,285 8,617 123,089 131,706 1,904 23,890 25,794 1,180 51,412 52,592 85,271 120,463 205,734 82,194 130,581 212,775 24,101 24,319 48,420 21,309 54,066 75,375 Operating profit/(loss) 80,753 287,708 368,461 304,466 153,030 457,496 (52,749) 171,683 118,934 (70,515) 239,608 169,093 12.1 Inter-segment sales and purchases Quarter Ended June 30, 2012 Sugar Ethanol Total Inter-segment sales and purchases have been eliminated from total figures. 12.2 Basis of inter-segment pricing All inter-segment transfers are made at cost. Quarter Ended June 30, 2011 Sugar Ethanol Total As at June 30, 2012 Sugar Ethanol Total As at September 30, 2011 Sugar Ethanol Total 12.3 Segment assets 5,644,511 1,465,437 7,109,948 3,871,051 1,215,843 5,086,894 12.4 Segment liabilities 4,634,342 902,856 5,537,198 2,606,989 949,962 3,556,951 12.5 Depreciation on property, plant and equipment 86,246 37,235 123,481 113,972 47,856 161,828 13 DATE OF AUTHORIZATION FOR ISSUE This condensed interim financial information was authorised for issue by the Board of Directors of the Company in their meeting held on July 30, 2012. 14 GENERAL - Corresponding figures, wherever necessary, have been rearranged. However, no significant rearrangements have been made. - Figures in this condensed interim financial information have been rounded off to the nearest thousand of rupees unless otherwise stated. Chief Executive Officer 10 Director