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ASSIGNMENT

ANALYSIS OF FINANCIAL STATEMENT

MEHRAN SUGAR MILLS LIMITED


MIRPURKHAS SUGAR MILLS LIMITED
MIRZA SUGAR MILLS LIMITED

Management Science
Submitted by:

Ali Zahoor
MBA-5 (A)
31366
Supervised by:

Sir Danish Iqbal

TABLE OF CONTENT
MEHRAN SUGAR MILLS LIMITED
-

Introduction..3
Income statement5
Balance sheet..6
Horizontal analysis
Income statement...7
Balance sheet.8
Vertical analysis
Income statement9
Balance sheet10
Ratio analysis12
Interpretation.13
Notes of financial statement17

MIRPURKHAS SUGAR MILLS LIMITED


-

Introduction....26
Income statement.27
Balance sheet28
Horizontal analysis
Income statement.30
Balance sheet31
Vertical analysis
Income statement.33
Balance sheet34
Ratio analysis35
Interpretation.36
Notes of financial statement41

MIRZA SUGAR MILLS LIMITED


- Introduction50
- Income statement.51
- Balance sheet52
- Horizontal analysis
Income statement.54
Balance sheet55
- Vertical analysis
Income statement.56
Balance sheet57
-

Ratio analysis59
Interpretation.60
Notes of financial statement...64

History
Mehran has a long, rich heritage with Haji Hasham and his son Usman's vision to set up one of
Pakistan's first sugar factories. Haji Hasham started his business career by trading in commodities
in the 1930's in the Indo Subcontinent.
Mehran sugar has grown to become a leading and diversified company today.
Key dates in our history
1965
The Company is incorporated as a public limited company.
1968
Shares of the Company are listed on the Karachi Stock Exchange.
1968
Plant commences trial production with a crushing capacity of 1,500 TCD. Complete plant is procured
from M/s. Mitsubishi Japan.
1978
Steady re-engineering increased the crushing capacity to 3,500 TCD.
1983
Recognized by the Karachi Stock Exchange as one of the Top 25 Companies for the first time.
1986
Recognized by the Karachi Stock Exchange for its Top 25 Company Award.
1994
Second parallel milling unit commenced production, increasing crushing capacity to 7,000 TCD.
1998
The Company is awarded ISO-9002 QMS Certification.
2001
Company touched billion Rupees in sales.
2006
The Company crosses the Rs. 2.0 Billion turnover sales milestone.
2007
The joint venture distillery-Unicol Limited commenced commercial production of Ethanol.
2010
The Company crosses the Rs. 4.0 Billion sales milestone.
2013
Crushing Capacity increased to 10,000 M. Tons Record highest sugar production,
turnover and profits.

Vision
Focusing on customers and shareholders satisfaction with challenging spirit and flexibility, we are
dedicated to have eminent position in manufacturing and supplying quality white refined sugar and
allied products and thereby play a vital role in the social economic development of Pakistan.

Mission
we the management of Enterprise, have set forth our belief as to the purpose for which the Company
is established and the principles under which it should operate.
We pledge our efforts to the accomplishment of the purpose within the agreed principles.

Sustainability
At Mehran we always work towards ensuring we run a sustainable business.
Our core cane procurement area is one of the richest and most densely populated cane zones in
Pakistan. The quality of land and vast irrigation network in our vicinity allows our farmer to have a
higher farm yield than the countries average. It also allows Mehran to have one of the highest factory
yields in the country. This allows us to be a competitive sugar producer.
Our sugar processing facility is also one of the most efficient in Pakistan. Our crushing capacity is
above the average size of mills in the country thus allowing us economies of scale. Our investment in
energy and plant efficiency also makes us a low cost and long term player.
Our final product, sugar, continues to remain a necessity without any competing alternative. Also, a
growing population in Pakistan and the subsequent consumption growth continues to ensure that
demand for sugar remains strong.
Our investments in ethanol, farming and other blue chip local companies listed on the KSE allows us
to have a diversified balance sheet which can sustain any cyclical downturn in our core business.
We follow recognised high standards, work with industry leading service providers, and engage in
credible initiatives in our pursuit of sustainability. Our credibility and goodwill with our investors,
suppliers and creditors allows us to continue to remain a sustainable business.
We actively monitor, mitigate and exploit the market, regulatory and economic issues related to and
arising from sustainability.

Mehran Sugar Mills Limited


Profit & Loss Account
For the year ended September 30, 2013 to 2009
2013

2012

2011

2010

2009

Turnover

5,797,469,558

4,150,108,933

4,355,038,305

3,841,344,807

2,387,445,858

Cost of sales

5,215,459,529

3,771,972,032

3,773,642,501

3,366,565,888

1,994,378,239

582,010,029

378,136,901

581,395,804

474,778,919

93,923,771

27,576,075

5,163,852

5,442,782

5,367,298

Administrative expenses
Other operating
expenses

132,299,256

102,127,246

103,333,544

81,953,859

61,592,846

15,704,414

14,010,238

43,544,444

33,377,182

77,240,035

Other operating income

149,200,939

63,865,561

80,259,085

39,076,640

22,536,783

Finance cost
Share of Profit from an
associate

186,842,345

116,319,761

133,757,171

73,800,473

65,333,093

128,580,477

171,666,322

40,640,865

1,848,209

39,621,871

Profit before tax

431,021,659

353,635,464

416,496,743

321,129,472

245,693,001

33,522,605

81,079,316

93,640,144

79,143,207

69,780,223

397,499,054

272,556,148

322,856,599

241,986,265

175,912,778

Gross profit
Distribution costs

Taxation
Profit after taxation
Basic & diluted earnings
per share
Number of Shares
Market Price

393,067,619

15.70

13.02

18.66

16.90

14.89

25,321,143
69.99

20,926,565
42.30

17,294,682
54.78

14,293,125
52.70

11,812,500
55.00

Meharn Sugar Mills Limited


Balance Sheet
As at September 30, 2013 to 2009

ASSETS
NON-CURRENT
ASSETS
Property, plant &
equipment
Long term investment
Long term deposits
Total Fixed Assets

2013

2012

2011

1,509,202,543

1,388,678,801

1,088,780,908

847,953,503

512,174,648

376,834,660

216,718,336

176,077,471

174,229,262

4,640,900

8,545,735

3,992,400

1,770,154,361

1,314,044,979

1,028,023,374

505,415,137
2,803,650
2,017,421,330

2010

2009

1,992,400
688,396,310

CURRENT ASSETS
Biological assets

56,295,200

57,424,050

43,315,568

13,347,530

8,748,440

Stores & spare parts

67,024,769

73,198,231

77,795,462

56,961,715

60,310,523

1,095,298,026

1,458,570,403

253,836,976

141,296,744

9,963,768

73,171,715

4,683,163

90,560,989

112,101,426

75,491,524

33,539,996

31,029,412

84,487,408

41,702,799

15,985,845

20,359,105

14,669,595

2,382,059

1,313,826

3,297,801

1,545,595

472,171

83,505,783

63,760,617

162,988,889

91,480,776

39,053,176

292,503,684

204,396,724

23,219,053

Cash & bank balances

6,114,516

144,769,742

11,943,333

113,747,245

1,341,095

Total Current Assets

1,298,614,450

1,767,463,801

1,805,467,996

707,367,775

430,048,325

TOTAL ASSETS

3,316,035,780

3,537,618,162

3,119,512,975

1,735,391,149

253,211,430

209,265,650

172,946,820

142,931,250

118,125,000

1,132,337,395

829,037,028

619,891,757

379,483,109

215,556,120

1,385,548,825

1,038,302,678

792,838,577

522,414,359

333,681,120

454,241,072

380,312,500

175,000,000

203,750,000

85,714,000

16,068,494

12,267,661

14,058,991

16,221,811

4,917,252

7,564,191

6,438,840

5,681,987

5,742,073

4,867,802

Stock-in-trade
Trade debts - unsecured
Loans & advances unsecured
Trade deposits & short
term prepayments
Other receivables
Short term investment
Advance income tax

688,431,560

563,077

961,243

1,118,444,635

EQUITY & LIABILITIES


SHARES CAPITAL &
RESERVES
Issued, subscribed &
paid-up capital
Reserves
Total Shareholder
Equity

NON-CURRENT
LIABILITIES
Long-term financing secured
Liabilities against assets
subject to finance leases
Deffered liabilities
deffered taxation

240,536,912

230,902,814

158,054,830

116,249,988

87,812,369

Provision
Total Long term
Liabilities

119,290,919

119,290,919

119,290,919

119,290,919

119,290,919

837,701,588

749,212,734

472,086,727

461,254,791

302,602,342

CURRENT LIABILITIES
Trade & other payables

455,497,657

Accrued mark-up
Short term borrowings secured
Current maturity of
liabilities againts assets
subject to finance leases
Current portion of long
term financing
Provision for market
committee fee
Income tax paybles
Sales tax / excise duty
payble

1,169,363,442

1,634,127,427

606,527,976

310,757,518

22,003,620

14,060,321

9,627,061

10,806,928

10,261,788

397,176,948

325,428,839

29,998,978

70,522,403

126,071,428

147,187,500

6,349,843

7,374,302

1,081,538

12,269,035

7,119,185

128,750,000

40,000,000

36,428,800

59,155,823

49,999,163

42,777,959

32,700,000

32,700,000

20,695,628

14,824,491

36,944,300

12,259,753

9,489,324

20,610,856

20,409,126

Total Current Liabilities

1,092,785,367

1,750,102,750

1,854,587,671

751,721,999

482,161,173

Total Liabilities

1,930,486,955

2,499,315,484

2,326,674,398

1,212,976,790

784,763,515

TOTAL EQUITY &


LIABILITIES

3,316,035,780

3,537,618,162

3,119,512,975

1,735,391,149

1,118,444,635

2012

2011

2010

Profit & loss Account


Horizontal Analysis

2013
Turnover

39.69

(4.71)

13.37

60.90

Cost of sales

38.27

(0.04)

12.09

68.80

Gross profit

53.92

(34.96)

22.46

20.79

240.60

434.02

(5.12)

1.41

29.54

(1.17)

26.09

33.06

12.09

(67.83)

30.46

(56.79)

133.62

(20.43)

105.39

73.39

60.63

(13.04)

81.24

12.96

(25.10)

322.40

2,098.93

(95.34)

21.88

(15.09)

29.70

30.70

(58.65)

(13.41)

18.32

13.42

45.84

(15.58)

33.42

37.56

Distribution costs
Administrative
expenses
Other operating
expenses
Other operating
income
Finance cost
Share of Profit from an
associate
Profit before tax
Taxation
Profit after taxation

Balance Sheet
Horizontal Analysis

2013
ASSETS
NON-CURRENT
ASSETS
Property, plant &
equipment

2012

2011

2010

8.68

27.54

28.40

65.56

34.12

73.88

23.08

1.06

(39.59)

(45.69)

114.05

100.38

13.97

34.71

27.82

49.34

Biological assets

(1.97)

32.57

224.52

52.57

Stores & spare parts

(8.43)

(5.91)

36.57

(5.55)

Stock-in-trade

(37.15)

(24.91)

474.61

79.65

Trade debts - unsecured


Loans & advances unsecured
Trade deposits & short
term prepayments

(86.38)

1,462.44

(94.83)

(19.22)

125.08

8.09

(63.27)

102.59

(21.48)

38.78

515.84

81.31

Other receivables

113.37

227.34

(16.14)

(41.42)

Short term investment

30.97

(60.88)

78.17

134.25

Advance income tax

43.11

Cash & bank balances

(95.78)

1,112.14

(89.50)

8,381.67

Total Current Assets

(26.53)

(2.10)

155.24

64.49

TOTAL ASSETS

(6.26)

13.40

79.76

55.16

Long term investment


Long term deposits
Total Fixed Assets
CURRENT ASSETS

EQUITY & LIABILITIES


SHARES CAPITAL &
RESERVES
Issued, subscribed &
paid-up capital
Reserves
Total Shareholder
Equity

21.00
36.58

21.00
33.74

21.00
63.35

21.00
76.05

33.44

30.96

51.76

56.56

19.44

117.32

(14.11)

137.71

30.98

(12.74)

(13.33)

229.90

Deffered liabilities

17.48

13.32

(1.05)

17.96

deffered taxation

4.17

46.09

35.96

32.38

Total Long term


Liabilities

11.81

58.70

2.35

52.43

NON-CURRENT
LIABILITIES
Long-term financing secured
Liabilities against assets
subject to finance leases

CURRENT LIABILITIES
Trade & other payables

(61.05)

(28.44)

169.42

95.18

Accrued mark-up
Short term borrowings secured
Current maturity of
liabilities againts assets
subject to finance leases
Current portion of long
term financing
Provision for market
committee fee
Sales tax / excise duty
payble

56.49

46.05

(10.92)

5.31

22.05

(57.46)

(14.35)

2,217.97

(13.89)

581.83

72.34

(94.47)

221.88

9.80

18.31

16.88

30.82

(44.21)

201.35

29.20

(53.50)

Total Current Liabilities

(37.56)

(5.63)

146.71

55.91

Total Liabilities

(22.76)

7.42

91.82

54.57

(6.26)

13.40

79.76

55.16

TOTAL EQUITY &


LIABILITIES

Profit & loss


Account
Vertical Analysis
2013

2012

2011

2010

2009

Turnover

100.00

100.00

100.00

100.00

100.00

Cost of sales

(89.96)

(90.89)

(86.65)

(87.64)

(83.54)

Gross profit

10.04

9.11

13.35

12.36

16.46

Distribution costs

(1.62)

(0.66)

(0.12)

(0.14)

(0.22)

Administrative expenses

(2.28)

(2.46)

(2.37)

(2.13)

(2.58)

Other operating expenses

(0.27)

(0.34)

(1.00)

(0.87)

(3.24)

2.57

1.54

1.84

1.02

0.94

(3.22)

(2.80)

(3.07)

(1.92)

(2.74)

2.22

4.14

0.93

0.05

1.66

7.43

8.52

9.56

8.36

10.29

(0.58)

(1.95)

(2.15)

(2.06)

(2.92)

6.86

6.57

7.41

6.30

7.37

Other operating income


Finance cost
Share of Profit from an
associate
Profit before tax
Taxation
Profit after taxation

Balance Sheet
Vertical Analysis
2013
ASSETS
NON-CURRENT
ASSETS
Property, plant &
equipment
Long term investment
Long term deposits
Total Fixed Assets
CURRENT ASSETS
Biological assets
Stores & spare parts
Stock-in-trade
Trade debts - unsecured
Loans & advances unsecured
Trade deposits & short
term prepayments
Other receivables
Short term investment
Advance income tax
Cash & bank balances
Total Current Assets
TOTAL ASSETS

2012

2011

2010

2009

45.51
15.24
0.08

39.25
10.65
0.13

34.90
6.95
0.27

48.86
10.15
0.23

45.79
15.58
0.18

1.70
2.02
20.76
0.30

1.62
2.07
30.96
2.07

1.39
2.49
46.76
0.15

0.77
3.28
14.63
5.22

0.78
5.39
12.63
10.02

2.28

0.95

0.99

4.87

3.73

0.48
0.10
2.52
8.82
0.18
39.16

0.58
0.04
1.80
5.78
4.09
49.96

0.47
0.02
5.22

0.14
0.03
5.27

100.00

0.38
57.88

6.55
40.76

0.12
0.09
3.49
2.08
0.12
38.45

100.00

100.00

100.00

100.00

7.64
34.15

5.92
23.43

5.54
19.87

8.24
21.87

10.56
19.27

41.78

29.35

25.42

30.10

29.83

13.70

10.75

5.61

11.74

7.66

0.48
0.23
7.25
3.60

0.35
0.18
6.53
3.37

0.45
0.18
5.07
3.82

0.93
0.33
6.70
6.87

0.44
0.44
7.85
10.67

25.26

21.18

15.13

26.58

27.06

13.74
0.66

33.06
0.40

52.38
0.31

34.95
0.62

27.78
0.92

11.98

9.20

1.73

6.31

3.80

4.16

0.20

0.42

0.10

0.37

0.20

4.13

2.30

3.26

1.78
-

1.41
-

1.37
0.66

1.88
0.85

2.92
-

0.62
32.95

1.04
49.47

0.39
59.45

0.55
43.32

1.82
43.11

58.22

70.65

74.58

69.90

70.17

100.00

100.00

100.00

100.00

100.00

EQUITY & LIABILITIES


SHARES CAPITAL &
RESERVES
Issued, subscribed &
paid-up capital
Reserves
Total Shareholder
Equity
NON-CURRENT
LIABILITIES
Long-term financing secured
Liabilities against assets
subject to finance leases
Deffered liabilities
deffered taxation
Provision
Total Long term
Liabilities
CURRENT LIABILITIES
Trade & other payables
Accrued mark-up
Short term borrowings secured
Current maturity of
liabilities againts assets
subject to finance leases
Current portion of long
term financing
Provision for market
committee fee
Income tax paybles
Sales tax / excise duty
payble
Total Current Liabilities
Total Liabilities
TOTAL EQUITY &
LIABILITIES

10

S.no

Formula's
Profibility Ratios

Assets Turnover

Total Net Sales/Total Assets *100

Rate of return on total assets

Net Profit After Tax/Total Assets *100

Rate of return on S.H.E

Net Profit/Total S.H.E *100

Equity Multiplier

Total Assets/Total S.H.E *100

Rate of return on capital employed

EBIT/Capital Employed *100

Net Profit Margin

Net Profit After Tax/Sales *100

Rate of cost of good sold

Cost of Good Sold/Total Net Sales *100

Rate of gross profit

Gross Profit/Total Net Sales *100

Rate of operating expense

Operating Expenses/Total Net Sales *100

10

Rate of net profit

Net Profit/Total Net Sales *100

Liquidtiy Ratos
11

Working Capital

Current Assets - Current Liabilities

12

Current Ratio

Current Assets/Current Liabilities

13

Quik Ratio

Quick Asstes/Current Liabilities

14

Inventory Turnover

Cost of Good Sold/Average Inventory

15

Days on Inventory

365/Times

16

A/C Receivable Turnover

Net Credit Sales/Average A/C Receivable

17

Days on A/C Receivables

365/Times

18

A/C Payable payment

Net Credit Purchases/Average A/C Payable

19

Days on A/C Payable

365/Times

20

Total Days
Debt & Gearing Ratios

(Inventory Days + A/R Days) - A/P Days

21

Debt Ratio

Total Liabilities/Total Assets

22

Debt to Equity Ratio

23

Gearing Ratio

Long term Debt/Total S.H.E *100


L.T.D + Preferred Share/L.T.D + S.H.E + Pref.
Share *100

24

Interest Cover
Invertor's Ratios

EBIT/Interest Expenses

25

Earning per share

Net Profit-Prefered Dividend/No. of Shares

26

Price earning ratio

Market Price/Earning per share

27

Dividend Yield

Dividend per share/ Market Price

28

Book Value Per Share

Total S.H.E/No. of share

11

Mehran Sugar Mills Limited


Ratio Analysis
For the year ended September 30, 2013 to 2009
2013

2012

2011

2010

2009

Average

Industry

1.75

1.17

1.40

2.21

2.13

1.73

1.16

11.99

7.70

10.35

13.94

15.73

11.94

4.44

28.69

26.25

40.72

46.32

52.72

38.94

16.00

239.33

340.71

393.46

332.19

335.18

328.17

298.00

1.51

4.54

7.40

8.05

10.97

6.49

8.12

6.86

6.57

7.41

6.30

7.37

6.90

5.60

89.96

90.89

86.65

87.64

83.54

87.74

88.11

10.04

9.11

13.35

12.36

16.46

12.26

4.87

2.57

1.54

1.84

1.02

0.94

1.58

5.50

6.86

6.57

7.41

6.30

7.37

6.90

3.33

205,829,083

17,361,051

(49,119,675)

(44,354,224)

(52,112,848)

15,520,677

1.19

1.01

0.97

0.94

0.89

1.00

2.38

0.56

0.38

0.19

0.60

0.60

0.47

1.83

5.84

2.95

4.40

17.04

14.11

8.87

4.54

62.50

123.73

82.95

21.42

25.87

63.29

53.84

143.19

113.53

96.67

39.73

37.75

86.17

47.97

2.55

3.22

3.78

9.19

9.67

5.68

2.11

6.41

2.69

3.36

7.34

6.41

5.24

7.53

56.94

135.69

108.63

49.73

56.94

81.59

93.15

121.99

262.63

195.36

80.33

92.48

150.56

187.11

0.58

0.71

0.75

0.70

0.70

0.69

0.86

60.46

72.16

59.54

88.29

90.69

74.23

68.63

37.68

41.91

37.32

46.89

47.56

42.27

43.00

2.31

3.04

3.11

4.35

3.76

3.31

1.63

15.70

13.02

18.67

16.93

14.89

15.84

14.90

4.46

3.25

2.94

3.12

3.69

3.49

8.52

6.43

10.64

9.13

10.44

11.82

9.69

1.18

54.72

49.62

45.84

36.55

28.25

43.00

30.52

12

Interpretations:
Assets Turnover: This ratio measures how efficiently a firm uses its assets to generate
sales, so a higher ratio is always more favorable. Higher turnover ratios mean the
company is using its assets more efficiently. Lower ratios mean that the company isn't
using its assets efficiently and most likely have management or production problems,
company average assets turnover is 1.73 which shows us company in better position with
high ratio but when we compare with industry ratio than company is better than industry
1.16 ratios.

Rate of return on total assets: The return on assets ratio measures how effectively a
company can turn earn a return on its investment in assets. In other words, ROA shows
how efficiently a company can covert the money used to purchase assets into net income
or profits, company average rate of return on total assets is 11.94 which shows us
company in better position with high ratio but when we compare with industry ratio than
company is better than industry 4.44 ratio.

Rate of return on S.H.E: Return on equity measures how efficiently a firm can use the
money from shareholders to generate profits and grow the company. Unlike other return
on investment ratios, ROE is a profitability ratio from the investor's point of viewnot the
companies, company average rate of return on S.H.E is 38.94 which shows us company
in better position with high ratio but when we compare with industry ratio than company
are better than industry 16 ratios.

Equity Multiplier: The equity multiplier is a ratio used to analyze a company's debt and
equity financing strategy. A higher ratio means that more assets were funding by debt
than by equity. In other words, investors funded fewer assets than by creditors, company
average equity multiplier is 328.17 which shows us company in better position with high
ratio but when we compare with industry ratio than company is better than industry 298
ratio.

Rate of return on capital employed: The return on capital employed ratio shows how
much profit each dollar of employed capital generates. Obviously, a higher ratio would be
more favorable because it means that more dollars of profits are generated by each dollar
of capital employed, company average rate of return on capital employed is 6.49 which
show us company is not better position with high ratio but when we compare with industry
ratio 8.12 than industry is in better position because higher ratio would be more favorable.

Net profit margin: Net profit margin is a key financial indicator used to assets the
profitability of a company.Net profit margin measures how much of each dollar earned by
the company is translated into profits. A low profit margin indicates a low margin of safety:
higher risk that a decline in sales will erase profits and result in a net loss, company
average net profit margin is 6.9 which shows us company is not better position with high
ratio but when we compare with industry ratio 5.6 than industry is in better position with
high ratio.

13

Rate of gross profit: Gross margin ratio is a profitability ratio that measures how
profitable a company can sell its inventory. It only makes sense that higher ratios are
more favorable. Higher ratios mean the company is selling their inventory at a higher profit
percentage; company average rate of gross profit is 12.26 which show us company is in
better position but when we compare with industry ratio 4.87, than we analyze company is
in better position.

Rate of operating expense: The operating expense ratio also known as the OER is the
ratio between the total operating expenses and the effective gross income for an income
producing property. Operating expenses are costs associated with the operation
and maintenance of income producing properties, company average rate of operating
expense is 1.58 which shows us company is in better position but when we compare with
industry than industry 5.5 ratios.

Rate of net profit: Net profit margin measures how much of each dollar earned by the
company is translated into profits. A low profit margin indicates a low margin of safety:
higher risk that a decline in sales will erase profits and result in a net loss, company
average rate of net profit is 6.9 but when we compare with industry ratio 3.33 than
industry is better than company ratio.

Current ratio: Current Ratio is a liquidity ratio that measures company's ability to pay its
debt over the next 12 months or its business cycle. Current ratio is a financial ratio that
measures whether or not a company has enough resources to pay its debt over the next
business cycle (usually 12 months) by comparing firm's current assets to its current
liabilities, company average current ratio is 1 which is not better than industry 2.38 ratio.

Quick ratio: The acid test ratio measures the liquidity of a company by showing its ability
to pay off its current liabilities with quick assets. If a firm has enough quick assets to cover
its total current liabilities, the firm will be able to pay off its obligations without having to
sell off any long-term or capital assets, company average quick ratio is 0.47 which is not
better for company when we compare with industry than industry 1.83 ratio.

Inventory turnover: Inventory turnover is a measure of how efficiently a company can


control its merchandise, so it is important to have a high turn. This shows the company
does not overspend by buying too much inventory and wastes resources by storing nonsalable inventory. It also shows that the company can effectively sell the inventory it buys;
company average inventory turnover is 8.87 which show company is in better position
when we compare with industry ratio 4.54 than company is in good position.

Days on inventory: Days in Inventory measures the average number of days it takes a
company to turn its inventory into sales, a financial indicator of a company's performance.
Days in Inventory estimates also the number of days the average inventory balance will
be sufficient, company average days on inventory is 63.29 which is not good for company
than industry 53.84 ratios show better position.

14

A/C receivable turnover: The receivables turnover ratio measures a business' ability to
efficiently collect its receivables; it only makes sense that a higher ratio would be more
favorable. Higher ratios mean that companies are collecting their receivables more
frequently throughout the year; company average A/C receivable turnover is 86.17 which
is better than industry 47.97 ratio.
Days on A/C receivable: The days sales outstanding formula shows investors and
creditors how well companies' can collect cash from their customers. Obviously, sales
don't matter if cash is never collected. This ratio measures the number of days it takes a
company to convert its sales into cash, company average days on A/C receivable is 5.68
which is not better than industry 2.11 ratio.

Accounts payable turnover: Accounts payable turnover ratio is an accounting liquidity


metric that evaluates how fast a company pays off its creditors (suppliers). The ratio
shows how many times in a given period (typically 1 year) a company pays its average
accounts payable. An accounts payable turnover ratio measures the number of times a
company pays its suppliers during a specific accounting period, company average A/C
payables turnover is 5.24 which is better than industry 7.53 ratio.

Days on A/C payable: The days A/c payable formula shows investors and creditors how
well companies' can pay cash from their customers. Obviously, sales don't matter if cash
is never paid. This ratio measures the number of days it takes a company to convert its
sales into cash, company average days on A/C payable is 81.59 which is not better than
industry 93.15 ratio.

Total days: The cash conversion cycle measures how many days it takes a company to
receive cash from a customer from its initial cash outlay for inventory. For example, a
typical retailer buys inventory on credit from its vendors. When the inventory is purchased,
a payable is established, but cash isn't actually paid for some time, average total days of
company is 150.56 which is better than industry 187.11 ratio.
Debt ratio: The debt ratio is a fundamental solvency ratio because creditors are always
concerned about being repaid. When companies borrow more money, their ratio
increases creditors will no longer loan them money. Companies with higher debt ratios are
better off looking to equity financing to grow their operations, so company average debt
ratio is 0.69 which is better than industry 0.86 ratio.

Debt to equity ratio: It is also a measure of a company's ability to repay its obligations.
When examining the health of a company, it is critical to pay attention to the debt/equity
ratio. If the ratio is increasing, the company is being financed by creditors rather than from
its own financial sources which may be a dangerous trend. Lenders and investors usually
prefer low debt-to-equity ratios because their interests are better protected in the event of
a business decline. Thus, companies with high debt-to-equity ratios may not be able to
attract additional lending capital; in this case average debt to equity ratio is 74.23 which is
not better than industry 66.63 ratio.

15

Gearing ratio: The gearing ratio is the proportion of a company's debt to its equity. A high
gearing ratio represents a high proportion of debt to equity, and a low gearing ratio
represents a low proportion of debt to equity. The ratio indicates the financial risk to which
a business is subjected, in this case average gearing ratio is 42.27 which is better than
industry 43 ratio.

Interest cover: The interest coverage ratio (ICR) is a measure of a company's ability to
meet its interest payments. Interest coverage ratio is equal to earnings before interest and
taxes (EBIT) for a time period, often one year, divided by interest expenses for the same
time period. The interest coverage ratio is a measure of the number of times a company
could make the interest payments on its debt with its EBIT. It determines how easily a
company can pay interest expenses on outstanding debt; company average interest cover
is 3.31 which is better than industry 1.63 ratio.
Earnings per share: Earnings per share is the same as any profitability or market
prospect ratio. Higher earnings per share is always better than a lower ratio because this
means the company is more profitable and the company has more profits to distribute to
its shareholders, company average earning per share is 15.84 which is better than
industry 14.90 ratio.

Price earnings ratio: The price to earnings ratio indicates the expected price of a share
based on its earnings. As a company's earnings per share being to rise, so does their
market value per share. A company with a high P/E ratio usually indicated positive future
performance and investors are willing to pay more for this company's shares, company
average price earnings ratio is 3.49 which is not better than industry 8.52 ratio.

Dividend yield: A company with a high dividend yield pays its investors a large dividend
compared to the fair market value of the stock. This means the investors are getting highly
compensated for their investments compared with lower dividend yielding stocks. A high
or low dividend yield is relative to the industry of the company, company average dividend
yield is 9.69 which is better than industry 1.18 ratios.

Book value per share: Book value per share is often used to negotiate mergers,
acquisitions, and loan contracts. During a merger, the both companies need to calculate a
baseline price for the common and preferred shares of the business being absorbed.
Book value is a good starting point because it is objective and shows a selling price or
liquation value of the shares, company average book value per share is 43 which is better
than industry 30.52 ratio.

16

Notes to the Financial Statements


For the year ended September 30, 2013

2013
2012
Note --------------- Rupees --------------PROPERTY, PLANT AND EQUIPMENT
Operating fixed assets
Capital work-in-progress

5.1
5.2

1,424,307,615 1,172,730,789
84,894,928
215,948,012
1,509,202,543 1,388,678,801

2013
2012
Note --------------- Rupees --------------Depreciation charge for the year has been
allocated as follows:
Cost of sales
Administrative expenses

28 97,940,981 84,676,152
30 14,244,494 11,222,548
112,185,475
95,898,700

2013
2012
Note --------------- Rupees --------------Capital work-in-progress
Civil works
Advance against supply of plant and machinery 5.2.1

53,211,137
31,683,791
84,894,928

14,702,914
201,245,098
215,948,012

2013
2012
Note --------------- Rupees --------------LONG-TERM RECEIVABLE
Tender earnest money
Down payment
Other costs
Provision for doubtful receivable

6.1

1,000,000
33,125,000
8,385,996
42,510,996
(42,510,996)

1,000,000
33,125,000
8,385,996
42,510,996
(42,510,996)

2013
2012
Note --------------- Rupees --------------LONG TERM INVESTMENT in an associated company
Associated company unquoted

7.1

505,415,137

376,834,660

17

2013
2012
Note --------------- Rupees --------------Movement of investment
Opening balance
Dividend received during the year
Share of profit for the year net of tax
Prior year adjustment

7.2.1

376,834,660
376,834,660
129,206,196
(625,719)
128,580,477
505,415,137

216,718,336
(11,549,998)
205,168,338
167,355,908
4,310,414
171,666,322
376,834,660

2013
2012
Note --------------- Rupees --------------Aggregate amount of:
- Assets
- Liabilities
- Revenue
- Profit

3,926,004,401
2,409,649,999
2,595,817,661
387,618,632

1,800,206,000
671,579,000
2,137,306,000
500,190,000

BIOLOGICAL ASSETS at fair value


Carrying value at beginning of the year
57,424,050
Addition due to cultivation
28,863,440
Gain arising from initial recognition of standing crop less
costs to sell
27,431,760
113,719,250
Reduction due to harvesting
(57,424,050)
Carrying value at the end of the year
56,295,200
Operations and principal activities at farms
The Company is principally engaged in sugar cane cultivation.

43,315,568
29,276,902
28,147,148
100,739,618
(43,315,568)
57,424,050

STORES AND SPARE PARTS


Stores
Spare parts

6,549,100
60,475,669
67,024,769

10,289,203
62,909,028
73,198,231

2,103,958
686,327,602
688,431,560

2,959,297
1,092,338,729
1,095,298,026

9,963,768
16,987,867
26,951,635
16,987,867
9,963,768

73,171,715
16,987,867
90,159,582
16,987,867
73,171,715

STOCK-IN-TRADE
Manufactured sugar
- Work-in-process
- Finished goods
TRADE DEBTS unsecured
Considered good
Considered doubtful

11.1
11.2

Less: Provision for doubtful debts

11.2

18

2013
2012
--------------- Rupees --------------The aging of trade debts at September 30 is as follows:
Neither past due nor impaired
6,251,497
Past due but not impaired
- Within 90 days
69,766,122
- 91 - 180 days
3,405,593
- Over 365 days
3,712,271
3,712,271
73,171,715
9,963,768
73,171,715

2013
2012
Note --------------- Rupees --------------LOANS AND ADVANCES unsecured, considered good
Loans to staff
12.1 3,497,123
4,298,554
Advances
- to suppliers
26,735,270
15,588,151
- to cane growers
21,994,312
12,848,246
- against expenses
1,126,819
805,045
- federal excise duty
22,138,000
71,994,401
29,241,442
75,491,524
33,539,996
2013
2012
Note --------------- Rupees --------------TRADE DEPOSITS AND SHORT-TERM PREPAYMENTS
Trade deposits
Considered good
Considered doubtful

13.1

Less: Provision for doubtful deposits


Short-term prepayments
Considered good
Considered doubtful
Less: Provision for doubtful prepayments

478,500
8,196,113
8,674,613
8,196,113
478,500

238,500
8,196,113
8,434,613
8,196,113
238,500

15,507,345
563,441
16,070,786
563,441
15,507,345
15,985,845

20,120,605
563,441
20,684,046
563,441
20,120,605
20,359,105

2013
2012
Note --------------- Rupees --------------OTHER RECEIVABLES
Due from related parties:
Pakistan Molasses Company (Private) Limited
Mogul Tobacco Company (Private) Limited

2,331,099
717,702
3,048,801
249,000
3,297,801

1,001,670
378,925
1,380,595
165,000
1,545,595

15.1

3,300,000

3,300,000

15.2

289,203,684
292,503,684

201,096,724
204,396,724

Others
SHORT-TERM INVESTMENTS
Held to maturity
Term deposit certificates
Available for sale
Equity securities

19

2013
2012
--------------- Rupees --------------CASH AND BANK BALANCES
In hand
Cash with banks in current accounts

174,742
5,939,774
6,114,516

155,434
144,614,308
144,769,742

SHARE CAPITAL
2013
2012
(Number of shares)
Authorized capital
50,000,000 50,000,000 Ordinary shares of Rs. 10/- each 500,000,000 500,000,000
Issued, subscribed and paid-up capital
Ordinary shares of Rs. 10/- each
5,968,750
5,968,750 Fully paid in cash
59,687,500 59,687,500
350,000
350,000 Issued for consideration other
than cash
3,500,000 3,500,000
19,002,393 14,607,815 Issued as fully paid bonus shares 190,023,930 146,078,150
25,321,143 20,926,565
253,211,430 209,265,650

2013
2012
Note --------------- Rupees --------------LONG TERM FINANCING secured
From banking companies

18.1

454,241,072

380,312,500

2013
2012
Note --------------- Rupees --------------DEFERRED LIABILITY
Staff gratuity
Staff gratuity
Opening balance
Expense for the year
Benefits paid during the year
Closing balance
Expense for the year
Current service cost
Interest cost
Actuarial (gain) / loss recognized
Expense for the year

20.1

20.2

7,564,191

6,438,840

6,438,840
1,550,959
7,989,799
(425,608)
7,564,191

5,681,987
1,440,195
7,122,182
(683,342)
6,438,840

715,494
809,385
26,080
1,550,959

732,103
708,092
1,440,195

2013
2012
--------------- Rupees --------------Principal actuarial assumptions
Discount rate
Expected rate of increase in salary level
Expected average remaining life of employees

11.5%
8.5%
24 years

13%
10%
30 years

20

2013
2012
--------------- Rupees --------------DEFERRED TAXATION
Credit balances arising due to:
Accelerated tax depreciation
Assets subject to finance lease
Long term investment
Debit balances arising due to:
Provision for gratuity
Provision for doubtful debts
Provision for doubtful deposits and prepayments
Provision for impairment on short-term investments
Provision for doubtful long-term receivable
Carryover of minimum tax

263,149,616
2,040,985
33,072,141
298,262,742

253,534,297
994,326
24,978,468
279,507,091

(2,571,825)
(3,670,483)
(2,978,248)
(120,360)
(14,453,739)
(33,931,175)
(57,725,830)
240,536,912

(2,253,594)
(3,778,438)
(3,065,844)
(123,900)
(14,878,849)
(24,503,652)
(48,604,277)
230,902,814

2013
2012
Note --------------- Rupees --------------TRADE AND OTHER PAYABLES
Creditors
Accrued expenses
Advances from customers
23.1
Workers Profits Participation Fund
23.2
Workers Welfare Fund
23.3
Unclaimed dividend
Deposits from employees against purchase of vehicles
Others

49,835,584
56,534,262
12,139,754
10,364,672
333,509,308
1,053,890,371
9,260,652
7,174,383
21,474,386
15,113,124
8,310,624
8,836,001
10,186,596
8,297,574
10,780,753
9,153,055
455,497,657
1,169,363,442
Include advances amounting to Rs. 32.3 million (2012: Nil) received from Unicol Limited, a related
party.

2013
2012
--------------- Rupees --------------Workers Profits Participation Fund
Balance at the beginning of the year
Allocation for the year
Interest on funds utilized in the Companys business
Amount paid to trustees of the fund

7,174,383
9,260,652
16,435,035
16,435,035
(7,174,383)
9,260,652

22,149,673
7,174,383
29,324,056
223,750
29,547,806
(22,373,423)
7,174,383

2013
2012
Note --------------- Rupees --------------SHORT- TERM BORROWINGS secured
Running finance under markup arrangements
Short term loans

24.1
24.2

122,176,948
275,000,000
397,176,948

38,832,978
286,595,861
325,428,839

21

2013
2012
Note --------------- Rupees --------------TURNOVER
Sales
- Sugar exports
- Sugar local
- Molasses
- Bagasse
Less:
- Sales tax
- Federal excise duty

COST OF SALES
Manufactured sugar:
Cost of sugarcane consumed
(including procurement and other expenses)
Market committee fee
Road cess on sugarcane
Salaries, wages and other benefits
Stores and spare parts consumed
Repairs and maintenance
Fuel, electricity and water charges
Vehicle running and maintenance expenses
Insurance
Depreciation
Other overheads

28.1

5.1.1

Opening stock of work-in-process


Closing stock of work-in-process
Cost of goods manufactured
Opening stock of finished goods
Closing stock of finished goods

1,829,209,183
3,760,042,126
346,289,785
16,503,153
5,952,044,247

516,520,354
3,612,514,844
279,385,495
10,854,124
4,419,274,817

2,589,480
151,985,209
154,574,689
5,797,469,558

1,659,212
267,506,672
269,165,884
4,150,108,933

4,279,022,978
9,156,660
5,723,047
138,705,489
184,310,640
40,925,629
15,884,628
6,091,779
8,790,384
97,940,981
22,040,848
4,808,593,063
2,959,297
(2,103,958)
855,339
4,809,448,402
1,092,338,729
(686,327,602)
406,011,127
5,215,459,529

2,975,479,545
7,221,204
4,513,378
111,025,315
133,127,359
46,775,418
14,351,765
6,685,979
6,730,459
84,676,152
18,113,081
3,408,699,655
3,763,964
(2,959,297)
804,667
3,409,504,322
1,454,806,439
(1,092,338,729)
362,467,710
3,771,972,032

Include gratuity expense of Rs. 1,550,959/- (2012: Rs. 1,440,195/-) and contribution to provident fund
of Rs. 3,237,005/- (2012: Rs. 2,988,409/-).
2013
2012
Note --------------- Rupees --------------DISTRIBUTION COSTS
Salaries and other benefits
Insurance
Stacking and loading
Export expenses
Selling expenses

29.1

1,940,658
20,000
9,434,199
80,691,661
1,837,253
93,923,771

1,499,492
18,800
6,639,717
19,178,898
239,168
27,576,075

Include contribution to provident fund of Rs. 70,713/- (2012: Rs. 73,806/-).

22

2013
2012
Note --------------- Rupees --------------ADMINISTRATIVE EXPENSES
Salaries and other benefits
Rent, rates and taxes
Electricity, telephone, fax and postage
Printing and stationery
Travelling and conveyance
Vehicle running and maintenance expenses
Ijarah rentals
Auditors remuneration
Legal and professional
Fees and subscription
Insurance
Repairs and maintenance
Advertising
Donations
Depreciation
Other expenses

30.1

71,124,688
55,268,301
2,374,456
3,456,773
6,042,950
5,583,417
2,146,591
2,276,453
6,872,475
5,669,054
8,563,308
6,762,367
1,737,685
503,430
30.2
1,430,200
1,236,625
3,308,977
1,302,737
2,576,832
1,971,789
166,400
176,720
3,742,115
4,015,725
279,312
997,296
30.3
6,978,200
1,252,267
5.1.1 14,244,494
11,222,548
710,573
431,744
132,299,256
102,127,246
Include contribution to provident fund of Rs. 1,801,034/- (2012: Rs. 1,462,540/-).
2013
2012
--------------- Rupees --------------Auditors remuneration
Statutory audit
Ernst & Young Ford Rhodes Sidat Hyder
Statutory audit fee
Review of half yearly financial statements and
Compliance with Code of Corporate Governance
Out of pocket expenses
Cost audit
Haroon Zakaria & Co.
Cost audit fee
Out of pocket expenses

825,000
410,600
79,600
1,315,200

115,000
115,000
15,000
1,430,200
1,236,625
2013
2012
Note --------------- Rupees ---------------

OTHER OPERATING EXPENSES


Workers Profits Participation Fund
23.2
Workers Welfare Fund
Provision for impairment on short-term investments
Exchange loss
Zakat
OTHER OPERATING INCOME
Income from financial assets
Interest on term deposit receipts
Gain on disposal of short term investments
Exchange gain
Dividend income
Income from non financial assets
Net farm income
Scrap sales
Gain on disposal of fixed assets

750,000
292,500
64,125
1,106,625

9,260,652
6,361,262
82,500
15,704,414

7,174,383
3,860,072
1,583,222
1,310,061
82,500
14,010,238

1,495,813
79,275,183
7,275,311
17,348,099
105,394,406

1,093,848
12,746,078
12,789,414
26,629,340

36,226,772
3,618,534
3,961,227
43,806,533
149,200,939

23,980,452
11,622,090
1,633,679
37,236,221
63,865,561

23

2013
2012
--------------- Rupees --------------FINANCE COSTS
Mark-up on:
Long-term financing
Short-term borrowings
Lease finance
Bank charges
TAXATION
Current
Prior year
Deferred

57,824,932
124,420,409
2,217,176
184,462,517
2,379,828
186,842,345

49,988,901
61,541,200
2,876,070
114,406,171
1,913,590
116,319,761

25,047,394
(1,158,887)
23,888,507
9,634,098
33,522,605

8,127,749
103,583
8,231,332
72,847,984
81,079,316

During the year, provision for current tax is based on minimum tax. Accordingly, tax reconciliation is
not presented in the financial statements.
Income tax assessments of the Company have been completed upto the tax year 2013 (accounting
year ended September 30, 2012).

BASIC AND DILUTED EARNING PER SHARE


There is no dilutive effect on the basic earnings per share of the Company, which is based on:

Profit after taxation attributable to ordinary shares (Rupees)


(Restated)
Weighted average number of ordinary shares
(Restated)
Earnings per share (Rupees)

2013
397,499,054

2012
272,556,148

25,321,143

25,321,143

5.70

10.76

2013
2012
--------------- Rupees --------------WORKING CAPITAL CHANGES
(Increase) / decrease in current assets
Biological assets
Stores and spare parts
Stock-in-trade
Trade debts
Loans and advances
Trade deposits and short-term prepayments
Other receivables
Increase / (decrease) in current liabilities
Trade and other payables
Sales tax and federal excise duty payable

1,128,850
6,173,462
406,866,466
63,207,947
(41,951,528)
4,373,260
(1,752,206)
438,046,251

(14,108,482)
4,597,231
363,272,377
(68,488,552)
(2,510,584)
(5,689,510)
(1,073,424)
275,999,056

(713,340,408)
(16,333,444)
(729,673,852)
(291,627,601)

(466,230,864)
24,684,547
(441,546,317)
(165,547,261)

24

2013
2012
--------------- Rupees --------------Associates
Sales
Expenses shared
Insurance premium
Donations
Retirement benefit plans
Provident fund contribution

Trade debts
Investments held to maturity
Loans and advances
Deposits
Other receivables
Bank balances

356,106,346
1,355,073
10,758,055
6,450,000

285,268,393
1,257,256
9,423,640
500,000

5,108,752

4,524,755

2013
2012
--------------- Rupees --------------9,963,768
73,171,715
3,300,000
3,300,000
75,491,524
33,539,996
478,500
238,500
3,297,801
1,545,595
5,939,774
144,614,308
98,471,367
256,410,114
2013
2012
--------------- Rupees ---------------

Trade debts
Customers with no defaults in the past one year
Bank balances
With external credit rating
A1
A1+

9,963,768

73,171,715

1,243,886
4,695,888
5,939,774

101,449,026
43,165,282
144,614,308

25

MIRPURKHAS SUGAR MILLS LIMITED


Company profile
The company was established in 1964 and is located in the city of Mirpurkhas, some 300 km
from the part city of Karachi. Mirpurkhas Sugar Mills is a public limited company and its
shares are listed on the Karachi Stock Exchange. It has attained the distinction of being
ranked amongst the top ten companies in Pakistan for the years 1982, 1983 and 1986.
The original plant was supplied by Fletcher Smith, UK (formerly known as Fletcher &
Stewart). The original plant had a crushing capacity of 500 TDC (tons per day capacity) and
has progressed to 5000 TDC.
The company is involved in the development of higher yield sugar cane varieties on its 300
acre experimental form and provides support to local cultivators in term of fertilizers, agro
chemicals and the latest farming techniques.
CORE VALUES

To strive for excellence and build on our core competencies.


To continuously maintain technological advancements and update ourselves in the
field of sugar technology.
To meet and exceed the expectations of our stakeholders.
To inculcate efficient, ethical and time tested business practices in our management.
To work as a team and support each other.
To strive to place the invest of the company before that of the individual.

VISION & MISSION


We aim to be a leading producer and supplier of high quality sugar in Pakistan. We aspire to
be known for the superior quality of our product. We intend to play a pivotal role in the
economic and social development of Pakistan there by, improving the quality of life of its
people.
As a leading producer of quality sugar in Pakistan, we shall build on our core competencies
and achieve excellence in performance. In doing so, we aim to meet and exceed the
expectations of our stakeholders. In striving to serve better, our goal is not to attain
technological advancement in the field of sugar technology, but also to inculcate the most
efficient, ethical and time tested business practices in our management. We shall continue to
look for innovative approaches to introduce alternate uses of sugar in order to broaden our
customer base.

26

Mirpurkhas Sugar Mills Limited


Profit & Loss Account
For the year ended September 30, 2013 to 2009
2013

2012

2011

2010

2009

Turnover [Sales]

3,454,478

2,541,537

2,739,671

2,823,671

1,803,234

Cost of sales

3,224,179

2,368,501

2,375,297

2,477,780

1,471,620

Gross profit

230,299

173,036

364,374

345,891

331,614

4,985

2,571

5,940

Distribution costs

42,925

27,257

Administrative expenses

94,618

76,083

79,833

79,108

52,647

Other operating expenses

2,858

859

12,806

11,854

14,091

2,074

5,973

4,983

Other operating income

35,248

5,723

Opereating profit

125,146

74,560

270,778

252,018

268,278

Finance costs

135,271

133,720

145,310

103,958

86,594

Share of Profit from an associate

129,742

168,856

42,826

8,286

32,534

Profit before tax

119,117

109,696

168,294

156,346

214,218

Taxation

22,061

8,568

30,580

72,047

88,778

Profit after taxation

97,056

101,128

137,714

84,299

125,440

Earnings per share basic (Rupees)

12.66

9.07

14.20

10.00

17.85

Number of Shares

11,152,928

9,698,198

8,433,215

2,911,150

2,646,500

Market Price

69.80

43.26

53.88

58.19

71.00

27

Mirpurkhas Sugar Mills Limited


Balance Sheet
As at September 30, 2013 to 2009
2013

2012

2011

2010

2009

ASSETS
NON-CURRENT ASSETS
Property, plant & equipment

1,280,879

1,263,593

967,920

809,430

584,948

Long term investment

505,451

376,209

218,903

176,077

167,791

Long term deposits

995

732

732

732

738

Total Fixed Assets

1,787,325

1,640,534

1,187,555

986,239

753,477

Stores & spare parts

147,052

147,147

151,795

111,144

120,192

Stock-in-trade

108,687

630,144

886,781

125,715

203,171

Biological assets

47,084

Trade debts - unsecured

13,595

9,766

13,481

90,979

84,050

Loans & advances - unsecured


Trade deposits & short term
prepayments

56,919

81,425

112,852

77,412

22,511

1,137

1,514

1,251

1,380

2,771

Other receivables

61,512

23,034

26,062

6,803

19,953

Short term investment

226,968

170,188

58,180

56,616

63,828

CURRENT ASSETS

Tax refinds due from the Government

41,764

8,118

1,059

8,146

Cash & bank balances

11,494

16,477

15,651

31,152

35,036

Total Current Assets

716,212

1,087,813

1,267,112

501,201

559,658

TOTAL ASSETS

2,503,537

2,728,347

2,454,667

1,487,440

1,313,135

Share capital

111,529

96,982

84,332

70,277

63,888

Reserves

776,576

603,420

411,367

311,318

256,592

888,105

700,402

495,699

381,595

320,480

SURPLUS ON REVALUATION OF
FIXED ASSETS

282,552

282,552

173,056

173,056

129,056

Total Shareholder Equity

1,170,657

982,954

668,755

554,651

449,536

EQUITY & LIABILITIES


SHARES CAPITAL & RESERVES

28

NON-CURRENT LIABILITIES

Long-term financing - secured

490,000

439,999

344,445

88,890

133,334

Deffered liabilities

245,956
735,956

247,090
687,089

248,340
592,785

249,341
338,231

205,752
339,086

Trade & other payables

241,200

744,798

641,342

365,993

291,740

Accrued mark-up

14,278

22,456

32,309

14,843

18,089

Short term borrowings - secured

191,446

186,605

475,032

161,878

170,240

Current portion of long term financing

150,000

104,445

44,444

44,444

44,444

Total Current Liabilities

596,924

1,058,304

1,193,127

594,558

524,513

Total Liabilities

1,332,880

1,745,393

1,785,912

932,789

863,599

TOTAL EQUITY & LIABILITIES

2,503,537

2,728,347

2,454,667

1,487,440

1,313,135

2012

2011

2010

Total Long term Liabilities


CURRENT LIABILITIES

Taxation

7,400

Profit & loss Account


Horizontal Analysis
2013
Turnover [Sales]

35.92

(7.23)

(2.97)

56.59

Cost of sales

36.13

(0.29)

(4.14)

68.37

Gross profit

33.09

(52.51)

5.34

4.31

Distribution costs

57.48

358.87

19.16

93.89

Administrative expenses

24.36

(4.70)

0.92

50.26

Other operating expenses

232.71

(93.29)

8.03

(15.88)

Other operating income

515.90

14.85

140.26

(65.28)

Operating profit

67.85

(72.46)

7.44

(6.06)

Finance costs

1.16

(7.98)

9.78

20.05

Share of Profit from an associate

(23.16)

294.28

416.85

(74.53)

Profit before tax

8.59

(34.82)

7.64

(27.02)

Taxation

157.48

(71.98)

(57.56)

(18.85)

Profit after taxation

(4.03)

(26.57)

63.36

(32.80)

29

Balance Sheet
Horizontal Analysis
2013

2012

2011

2010

ASSETS
NON-CURRENT ASSETS
Property, plant & equipment

1.37

30.55

19.58

38.38

Long term investment

34.35

71.86

24.32

4.94

Long term deposits

35.93

Total Fixed Assets

8.95

38.14

20.41

30.89

Stores & spare parts

(0.06)

(3.06)

36.58

(7.53)

Stock-in-trade

(82.75)

(28.94)

605.39

(38.12)

Trade debts - unsecured

39.21

(27.56)

(85.18)

8.24

Loans & advances - unsecured


Trade deposits & short term
prepayments

(30.10)

(27.85)

45.78

243.89

(24.90)

21.02

(9.35)

(50.20)

Other receivables

167.05

(11.62)

283.10

(65.90)

Short term investment

33.36

192.52

2.76

(11.30)

Tax refinds due from the Government

414.46

666.57

Cash & bank balances

(30.24)

5.28

(49.76)

(11.09)

Total Current Assets

(34.16)

(14.15)

152.82

(10.45)

TOTAL ASSETS

(8.24)

11.15

65.03

13.27

Share capital

15.00

15.00

20.00

10.00

Reserves

28.70

46.69

32.14

21.33

26.80

41.30

29.90

19.07

SURPLUS ON REVALUATION OF
FIXED ASSETS

63.27

Total Shareholder Equity

19.10

46.98

(0.81)

CURRENT ASSETS

Biological assets

EQUITY & LIABILITIES


SHARES CAPITAL & RESERVES

20.57

34.09
23.38

30

NON-CURRENT LIABILITIES

Long-term financing - secured

11.36

27.74

287.50

(33.33)

Deffered liabilities

(0.46)

(0.50)

(0.40)

21.19

Total Long term Liabilities

7.11

15.91

75.26

(0.25)

Trade & other payables

(67.62)

16.13

75.23

25.45

Accrued mark-up

(36.42)

(30.50)

117.67

(17.94)

Short term borrowings - secured

2.59

(60.72)

193.45

(4.91)

Current portion of long term financing

43.62

135.00

Total Current Liabilities

(43.60)

(11.30)

100.67

13.35

Total Liabilities

(23.63)

(2.27)

91.46

8.01

TOTAL EQUITY & LIABILITIES

(8.24)

11.15

65.03

13.27

2012

2011

2010

2009

CURRENT LIABILITIES

Taxation

Profit & loss Account


Vertical Analysis
2013
Turnover [Sales]

100.00

100.00

100.00

100.00

100.00

Cost of sales

93.33

93.19

86.70

87.75

81.61

Gross profit

6.67

6.81

13.30

12.25

18.39

Distribution costs

1.24

1.07

0.22

0.18

0.14

Administrative expenses

2.74

2.99

2.91

2.80

2.92

Other operating expenses

0.08

0.03

0.47

0.42

0.78

Other operating income

1.02

0.23

0.18

0.07

0.33

Opereating profit

3.62

2.93

9.88

8.93

14.88

Finance costs

3.92

5.26

5.30

3.68

4.80

Share of Profit from an associate

3.76

6.64

1.56

0.29

1.80

Profit before tax

3.45

4.32

6.14

5.54

11.88

Taxation

0.64

0.34

1.12

2.55

4.92

Profit after taxation

2.81

3.98

5.03

2.99

6.96

31

Balance Sheet
Vertical Analysis
2013

2012

2011

2010

2009

ASSETS
NON-CURRENT ASSETS
Property, plant & equipment

51.16

46.31

39.43

54.42

44.55

Long term investment

20.19

13.79

8.92

11.84

12.78

Long term deposits

0.04

0.03

0.03

0.05

0.06

Total Fixed Assets

71.39

60.13

48.38

66.30

57.38

Stores & spare parts

5.87

5.39

6.18

7.47

9.15

Stock-in-trade

4.34

23.10

36.13

8.45

15.47

Biological assets

1.88

Trade debts - unsecured

0.54

0.36

6.12

6.40

Loans & advances - unsecured


Trade deposits & short term
prepayments

2.27

2.98

5.20

1.71

0.05

0.06

0.05

0.09

0.21

Other receivables

2.46

0.84

1.06

0.46

1.52

Short term investment

9.07

6.24

2.37

3.81

4.86

Tax refinds due from the Government

1.67

0.30

0.04

0.62

Cash & bank balances

0.46

0.60

0.64

2.09

2.67

Total Current Assets

28.61

39.87

33.70

42.62

TOTAL ASSETS

100.00

100.00

100.00

100.00

100.00

Share capital

4.45

3.55

3.44

4.72

4.87

Reserves

31.02

22.12

16.76

20.93

19.54

SURPLUS ON REVALUATION OF
FIXED ASSETS

11.29

10.36

7.05

11.63

9.83

Total Shareholder Equity

46.76

36.03

27.24

37.29

34.23

CURRENT ASSETS

0.55
4.60

51.62

EQUITY & LIABILITIES


SHARES CAPITAL & RESERVES

32

NON-CURRENT LIABILITIES

Long-term financing - secured

19.57

16.13

14.03

5.98

10.15

Deffered liabilities

9.82

9.06

10.12

16.76

15.67

Total Long term Liabilities

29.40

25.18

24.15

22.74

25.82

Trade & other payables

9.63

27.30

26.13

24.61

22.22

Accrued mark-up

0.57

0.82

1.32

1.00

1.38

Short term borrowings - secured

7.65

6.84

19.35

10.88

12.96

Current portion of long term financing

5.99

3.83

1.81

2.99

3.38

CURRENT LIABILITIES

Taxation

Total Current Liabilities

23.84

38.79

48.61

39.97

39.94

Total Liabilities

53.24

63.97

72.76

62.71

65.77

TOTAL EQUITY & LIABILITIES

100.00

100.00

100.00

100.00

100.00

33

S.no

Formula's

1
2
3
4
5
6
7
8
9
10

Profibility Ratios
Assets Turnover
Rate of return on total assets
Rate of return on S.H.E
Equity Multiplier
Rate of return on capital employed
Net Profit Margin
Rate of cost of good sold
Rate of gross profit
Rate of operating expense
Rate of net profit

Total Net Sales/Total Assets *100


Net Profit After Tax/Total Assets *100
Net Profit/Total S.H.E *100
Total Assets/Total S.H.E *100
EBIT/Capital Employed *100
Net Profit After Tax/Sales *100
Cost of Good Sold/Total Net Sales *100
Gross Profit/Total Net Sales *100
Operating Expenses/Total Net Sales *100
Net Profit/Total Net Sales *100

11
12
13
14
15
16
17
18
19
20

Liquidtiy Ratos
Working Capital
Current Ratio
Quik Ratio
Inventory Turnover
Days on Inventory
A/C Receivable Turnover
Days on A/C Receivables
A/C Payable payment
Days on A/C Payable
Total Days

Current Assets - Current Liabilities


Current Assets/Current Liabilities
Quick Asstes/Current Liabilities
Cost of Good Sold/Average Inventory
365/Times
Net Credit Sales/Average A/C Receivable
365/Times
Net Credit Purchases/Average A/C Payable
365/Times
(Inventory Days + A/R Days) - A/P Days

21
22

Debt & Gearing Ratios


Debt Ratio
Debt to Equity Ratio

23
24

Gearing Ratio
Interest Cover

Total Liabilities/Total Assets


Long term Debt/Total S.H.E *100
L.T.D + Preferred Share/L.T.D + S.H.E + Pref. Share
*100
EBIT/Interest Expenses

25
26
27

Invertor's Ratios
Earning per share
Price earning ratio
Dividend Yield

Net Profit-Prefered Dividend/No. of Shares


Market Price/Earning per share
Dividend per share/ Market Price

28

Book Value Per Share

Total S.H.E/No. of share

34

Mirpurkhas Sugar Mills Limited


Ratio Analysis
For the year ended September 30, 2013 to 2009

2013

2012

2011

2010

2009

Average

Industry

137.32
9.55
27.90
292.11
27.16
6.96
81.61
18.39
14.88
6.96

133.98
5.68
16.45
283.75
14.17
4.35
88.52
11.48
8.05
4.35

(93,357)
0.84
0.44
15.07
24.22
28.88
12.64
6.77
53.91
(17.05)

35,145
1.07
0.45
4.67
78.16
17.34
21.05
5.04
72.36
26.85

32,914
1.04
0.48
11.68
71.37
47.80
10.32
6.41
73.38
8.31

0.73

0.63

0.66

0.64

0.86

69.90
41.14
0.65

88.64
46.99
3.93

60.98
37.88
18.87

75.43
43.00
6.58

71.56
41.52
6.19

68.63
43.00
1.63

10.43
4.77
3.47
85.79

14.20
3.79
4.64
78.96

8.69
5.82
6.01
72.13

12.93
3.98
4.93
65.30

11.39
4.77
4.26
78.96

14.90
8.52
1.18
30.52

137.98
3.88
8.29
213.86
6.25
2.81
93.33
6.67
3.62
2.81

93.15
3.71
10.29
277.57
6.57
3.98
93.19
6.81
2.93
3.98

111.61
5.61
20.59
367.05
13.34
5.03
86.70
13.30
9.88
5.03

189.83
5.67
15.20
268.18
17.51
2.99
87.75
12.25
8.93
2.99

119,288
1.20
1.02
31.78
11.49
45.99
7.94
13.37
27.31
(7.88)

29,509
1.03
0.29
2.21
165.16
77.49
4.71
3.18
114.78
55.09

73,985
1.06
0.19
4.69
77.83
69.28
5.27
3.70
98.55
(15.46)

0.53

0.64

62.87
38.60
0.92
10.68
5.51
2.27
92.62

1.16
4.44
16.00
298.00
8.12
5.60
88.11
4.87
5.50
3.33
2.38
1.83
4.54
53.84
47.97
2.11
7.53
93.15
187.11

35

Interpretation:

Assets Turnover: This ratio measures how efficiently a firm uses its assets to generate
sales, so a higher ratio is always more favorable. Higher turnover ratios mean the
company is using its assets more efficiently. Lower ratios mean that the company isn't
using its assets efficiently and most likely have management or production problems,
company average assets turnover is 133.98 which is not better than industry 160.31 ratio.

Rate of return on total assets: The return on assets ratio measures how effectively a
company can turn earns a return on its investment in assets. In other words, ROA shows
how efficiently a company can covert the money used to purchase assets into net income
or profits, company average rate of return on total assets is 5.68 which is better than
industry 4.44 ratio.

Rate of return on S.H.E: Return on equity measures how efficiently a firm can use the
money from shareholders to generate profits and grow the company. Unlike other return
on investment ratios, ROE is a profitability ratio from the investor's point of viewnot the
company, company average rate of return on S.H.E is 16.45 which is better than industry
16 ratio.

Equity Multiplier: The equity multiplier is a ratio used to analyze a company's debt and
equity financing strategy. A higher ratio means that more assets were funding by debt
than by equity. In other words, investors funded fewer assets than by creditors; company
average equity multiplier is 283.75 which are not better than industry 298 ratio.

Rate of return on capital employed: The return on capital employed ratio shows how
much profit each dollar of employed capital generates. Obviously, a higher ratio would be
more favorable because it means that more dollars of profits are generated by each dollar
of capital employed, company average rate of return on capital employed is 14.17 which
are better than industry 8.12 ratio.

Net profit margin: Net profit margin is a key financial indicator used to assets the
profitability of a company.Net profit margin measures how much of each dollar earned by
the company is translated into profits. A low profit margin indicates a low margin of safety:
higher risk that a decline in sales will erase profits and result in a net loss, company
average net profit margin is 4.35 which is better than industry 5.6 ratios.

36

Rate of gross profit: Gross margin ratio is a profitability ratio that measures how
profitable a company can sell its inventory. It only makes sense that higher ratios are
more favorable. Higher ratios mean the company is selling their inventory at a higher
profit percentage; company average rate of gross profit is 11.48 which are better than
industry 4.87 ratios.

Rate of operating expense: The operating expense ratio also known as the OER is the
ratio between the total operating expenses and the effective gross income for an income
producing property. Operating expenses are costs associated with the operation
and maintenance of income producing properties, company average rate of operating
expense is 8.05 which are not better than industry 5.5 ratios.

Rate of net profit: Net profit margin measures how much of each dollar earned by the
company is translated into profits. A low profit margin indicates a low margin of safety:
higher risk that a decline in sales will erase profits and result in a net loss, company
average rate of net profit is 4.35 which is not better than industry 3.33 ratios.

Current ratio: Current Ratio is a liquidity ratio that measures company's ability to pay its
debt over the next 12 months or its business cycle. Current ratio is a financial ratio that
measures whether or not a company has enough resources to pay its debt over the next
business cycle (usually 12 months) by comparing firm's current assets to its current
liabilities, company average current ratio is 1.04 which is not better than industry 2.38
ratio.

Quick ratio: The acid test ratio measures the liquidity of a company by showing its ability
to pay off its current liabilities with quick assets. If a firm has enough quick assets to cover
its total current liabilities, the firm will be able to pay off its obligations without having to
sell off any long-term or capital assets, company average quick ratio is 0.48 which is not
better than industry 1.83 ratio.

Inventory turnover: Inventory turnover is a measure of how efficiently a company can


control its merchandise, so it is important to have a high turn. This shows the company
does not overspend by buying too much inventory and wastes resources by storing nonsalable inventory. It also shows that the company can effectively sell the inventory it buys,
company average inventory turnover is 11.68 which are better than industry 4.54 ratio.

37

Days on inventory: Days in Inventory measures the average number of days it takes a
company to turn its inventory into sales, a financial indicator of a company's performance.
Days in Inventory estimates also the number of days the average inventory balance will
be sufficient, company average days on inventory is 71.37 which is not better than
industry 53.84 ratios.

A/C receivable turnover: The receivables turnover ratio measures a business' ability to
efficiently collect its receivables; it only makes sense that a higher ratio would be more
favorable. Higher ratios mean that companies are collecting their receivables more
frequently throughout the year; company average A/C receivable turnover is 47.80 which
is not better than industry 47.97 ratio.

Days on A/C receivable: The days sales outstanding formula shows investors and
creditors how well companies' can collect cash from their customers. Obviously, sales
don't matter if cash is never collected. This ratio measures the number of days it takes a
company to convert its sales into cash, company average days on A/C receivable is 10.32
which is not better than industry 2.11 ratio.

Accounts payable turnover: Accounts payable turnover ratio is an accounting liquidity


metric that evaluates how fast a company pays off its creditors (suppliers). The ratio
shows how many times in a given period (typically 1 year) a company pays its average
accounts payable. An accounts payable turnover ratio measures the number of times a
company pays its suppliers during a specific accounting period, company average A/C
payables turnover is 6.41 which is better than industry 7.53 ratio.

Days on A/C payable: The days A/c payable formula shows investors and creditors how
well companies' can pay cash from their customers. Obviously, sales don't matter if cash
is never paid. This ratio measures the number of days it takes a company to convert its
sales into cash, company average days on A/C payable is 73.38 which is not better than
industry 93.15 ratio.

Total days: The cash conversion cycle measures how many days it takes a company to
receive cash from a customer from its initial cash outlay for inventory. For example, a
typical retailer buys inventory on credit from its vendors. When the inventory is purchased,
a payable is established, but cash isn't actually paid for some time, average total days of
company is 8.31 which is better than industry 187.11 ratio.

38

Debt ratio: The debt ratio is a fundamental solvency ratio because creditors are always
concerned about being repaid. When companies borrow more money, their ratio
increases creditors will no longer loan them money. Companies with higher debt ratios
are better off looking to equity financing to grow their operations, company average debt
ratio is 0.64 which is better than industry 0.86 ratio.

Debt to equity ratio: It is also a measure of a company's ability to repay its obligations.
When examining the health of a company, it is critical to pay attention to the debt/equity
ratio. If the ratio is increasing, the company is being financed by creditors rather than from
its own financial sources which may be a dangerous trend. Lenders and investors usually
prefer low debt-to-equity ratios because their interests are better protected in the event of
a business decline. Thus, companies with high debt-to-equity ratios may not be able to
attract additional lending capital; in this case average debt to equity ratio is 71.56 which
are not better than industry 66.63 ratio.

Gearing ratio: The gearing ratio is the proportion of a company's debt to its equity. A high
gearing ratio represents a high proportion of debt to equity, and a low gearing ratio
represents a low proportion of debt to equity. The ratio indicates the financial risk to which
a business is subjected, in this case average gearing ratio is 41.52 which is better than
industry 43 ratio.

Interest cover: The interest coverage ratio (ICR) is a measure of a company's ability to
meet its interest payments. Interest coverage ratio is equal to earnings before interest and
taxes (EBIT) for a time period, often one year, divided by interest expenses for the same
time period. The interest coverage ratio is a measure of the number of times a company
could make the interest payments on its debt with its EBIT. It determines how easily a
company can pay interest expenses on outstanding debt, company average interest cover
is 6.19 which are better than industry 1.63 ratios.

Earnings per share: Earnings per share is the same as any profitability or market
prospect ratio. Higher earnings per share is always better than a lower ratio because this
means the company is more profitable and the company has more profits to distribute to
its shareholders, company average earning per share is 11.39 which is not better than
industry 14.90 ratio.

39

Price earnings ratio: The price to earnings ratio indicates the expected price of a share
based on its earnings. As a company's earnings per share being to rise, so does their
market value per share. A company with a high P/E ratio usually indicated positive future
performance and investors are willing to pay more for this company's shares, company
average price earnings ratio is 4.77 which are not better than industry 8.52 ratio.

Dividend yield: A company with a high dividend yield pays its investors a large dividend
compared to the fair market value of the stock. This means the investors are getting
highly compensated for their investments compared with lower dividend yielding stocks. A
high or low dividend yield is relative to the industry of the company, company average
dividend yield is 4.26 which is better than industry 1.18 ratio.

Book value per share: Book value per share is often used to negotiate mergers,
acquisitions, and loan contracts. During a merger, the both companies need to calculate a
baseline price for the common and preferred shares of the business being absorbed.
Book value is a good starting point because it is objective and shows a selling price or
liquation value of the shares, company average book value per share is 78.96 which are
better than industry 30.52 ratios.

40

Notes to the Financial Statements


For the year ended September 30, 2013

41

42

43

44

45

46

47

48

49

50

Mirza Sugar Mills Limited


Profit & Loss Account
For the year ended September 30, 2013 to 2009
2013
Turnover [Sales]
Cost of sales
Gross profit
Administrative expenses
Distribution costs
Operating Profit or loss
Finance costs
Other income
Other charges
Profit before tax
Taxation
Profit after taxation

Earning per share


Number of Shares
Market Price

2012

2011

2010

2009

217,644,919

774,360,704

1,465,477,806

1,328,623,472

649,456,562

290,201,877

829,673,359

1,355,198,764

1,107,581,793

556,161,162

(72,556,958)

(55,312,655)

110,279,042

221,041,679

93,295,400

48,353,265

58,782,738

57,944,915

43,780,352

37,727,646

537,005

1,006,346

1,347,106

1,009,983

834,753

(121,447,228)

(115,101,739)

50,987,021

176,251,344

54,733,001

(1,173,366)

(2,897,005)

9,000,428

12,825,951

6,822,048

2,433,925

286,882,015

6,700,150

357,264

140,054,686

(9,733,635)

9,352,101

11,301,003

21,169,984

(120,186,669)

159,149,636

39,334,642

152,481,654

166,795,655

(1,493,835)

(40,276,519)

(14,721,779)

(121,680,504)

118,873,117

24,612,863

(8.63)
23,681,361
39.47

8.43
24,561,987
43.26

(13,286,250)
139,195,404

(4,711,230)
162,084,425

1.75

9.87

2.89

28,433,215

22,911,150

22,646,500

53.88

58.19

71

51

Mirza Sugar Mills Limited


Balance Sheet
As at September 30, 2013 to 2009
2013

2012

2011

2010

2009

ASSETS
NON-CURRENT ASSETS
Property, plant & equipment

159,149,292

175,726,018

194,570,041

206,455,303

214,422,967

1,426,886

1,426,886

194,570,041

207,882,189

215,849,853

Long term deposits


Total Fixed Assets

159,149,292

175,726,018

CURRENT ASSETS

Stores & spare parts


Stock-in-trade
Trade debts - unsecured
Loans, advances & other
receivable
Cash & bank balances
Total Current Assets

TOTAL ASSETS

24,534,334

26,372,886

28,486,958

23,621,522

13,998,988

22,900,294

87,209,660

140,826,612

77,649,506

65,590,242

26,259,168

26,951,149

36,010,130

1,749,262

9,079,600

19,550,550

40,839,877

50,240,744

18,273,855

2,233,385

2,315,569

14,195,373

18,275,800

2,487,587

85,006,781

162,399,814

260,358,950

171,536,834

100,350,672

244,156,073

338,125,832

454,928,991

379,419,023

316,200,525

150,000,000

150,000,000

150,000,000

150,000,000

150,000,000

141,000,000

141,000,000

141,000,000

141,000,000

141,000,000

622,019,257

500,335,753

619,208,870

637,961,903

777,157,307

(481,019,257)

(359,335,753)

(478,208,870)

(496,961,903)

(636,157,307)

16,788,482

16,788,482

16,788,482

64,109,934

143,773,187

121,920,553

120,426,718

386,698,201

386,698,201

386,698,201

138,709,035

137,215,200

403,486,683

450,808,135

530,471,388

EQUITY & LIABILITIES


SHARES CAPITAL &
RESERVES
Authorized Capital
15000000 (2012:
15000000) Odinary shares
of Rs. 10/- each.
Issued, subscribed &
paid-up capital
14100000 (2012:
14100000) Odinary shares
of Rs. 10/- each fully paid in
cash
Accumulated loss
Total Share Holder Equity

NON-CURRENT
LIABILITIES
Long-term financing secured
Deffered liabilities
Total Long term Liabilities

52

CURRENT LIABILITIES
Current portion of long term
financing
Trade & other payables
Accrued mark-up
Provision taxation
Total Current Liabilities

Total Liabilities
TOTAL EQUITY &
LIABILITIES

342,487,991

342,487,992

359,692,308

331,354,806

291,438,725

204,178,450

176,830,407

143,128,407

58,639,808

108,155,792

18,991,927

18,991,927

18,991,927

18,991,927

18,991,927

20,804,927

21,936,059

7,838,536

16,586,250

3,300,000

586,463,295

560,246,385

529,651,178

425,572,791

421,886,444

725,172,330

697,461,585

933,137,861

876,380,926

952,357,832

244,156,073

338,125,832

454,928,991

379,419,023

316,200,525

Profit & loss


Account
Horizontal Analysis
2013
Turnover [Sales]
Cost of sales
Gross profit
Administrative expenses
Distribution costs
Operating Profit or loss
Finance costs
Other income
Other charges
Profit before tax
Taxation
Profit after taxation

(71.89)
(65.02)
31.18
(17.74)
(46.64)
5.51
(59.50)
(99.15)

2012
(47.16)
(38.78)
(150.16)
1.45
(25.30)
(325.75)
(132.19)
4,181.73

2011

2010

10.30

104.57

22.36

99.15

(50.11)

136.93

32.35

16.04

33.38

20.99

(71.07)

222.02

(29.83)

88.01

1,775.41

(99.74)

(17.25)

(46.62)

(204.08)

(175.52)

304.60

(74.20)

(8.58)

(96.29)

173.58

10.80

182.01

(202.36)

382.97

(82.32)

(14.12)

53

Balance Sheet
Horizontal Analysis
2013

2012

2011

2010

ASSETS
NON-CURRENT ASSETS
Property, plant &
equipment
(9.43)
Long term deposits
Total Fixed Assets

(9.43)

(9.68)
(9.68)

(5.76)

(3.72)
-

(100.00)
(6.40)

(3.69)

20.60

68.74

81.36

18.39

CURRENT ASSETS

Stores & spare parts


Stock-in-trade
Trade debts - unsecured
Loans, advances &
other receivable
Cash & bank balances
Total Current Assets

TOTAL ASSETS

(6.97)
(73.74)
(2.57)
(53.56)
(3.55)
(47.66)

(27.79)

(7.42)
(38.07)
(25.16)
(52.13)
(83.69)
(37.62)

(25.68)

1,958.59
(18.71)

174.93

(22.33)

634.68

51.78

70.94

19.90

19.99

(2.94)

(17.91)

(3.77)

(21.88)

EQUITY & LIABILITIES


SHARES CAPITAL &
RESERVES
Authorized Capital
15000000 (2012:
15000000) Odinary
shares of Rs. 10/- each.
Issued, subscribed &
paid-up capital
14100000 (2012:
14100000) Odinary
shares of Rs. 10/- each
fully paid in cash
Accumulated loss
Total Share Holder
Equity

24.32
33.86

(19.20)
(24.86)

NON-CURRENT
LIABILITIES
Long-term financing secured
Deffered liabilities
Total Long term
Liabilities

1.24
1.09

(73.81)

(68.86)
(65.99)

(55.41)
-

(10.50)

(15.02)

54

CURRENT LIABILITIES
Current portion of long
term financing

(0.00)

Trade & other payables

15.47

Accrued mark-up
Provision taxation

(4.78)
23.55

8.55

13.70

144.08

(45.78)

(5.16)

179.85

Total Current
Liabilities

4.68

5.78

Total Liabilities

3.97

(25.26)

TOTAL EQUITY &


LIABILITIES

(27.79)

(25.68)

(52.74)

402.61

24.46

0.87

6.48

(7.98)

19.90

19.99

2011

2010

2009

Profit & loss


Account
Vertical Analysis
2013

2012

Turnover [Sales]

100.00

100.00

100.00

100.00

100.00

Cost of sales

133.34

107.14

92.47

83.36

85.63

Gross profit

(33.34)

(7.14)

7.53

16.64

14.37

Administrative expenses

22.22

7.59

3.95

3.30

5.81

Distribution costs

0.25

0.13

0.09

0.08

0.13

(55.80)

(14.86)

3.48

13.27

8.43

(0.54)

(0.37)

0.61

0.97

1.05

1.12

37.05

0.46

0.03

21.56

(1.26)

0.64

0.85

3.26

(55.22)

20.55

2.68

11.48

25.68

(0.69)

(5.20)

(1.00)

(1.00)

(0.73)

(55.91)

15.35

1.68

10.48

24.96

Operating Profit or loss


Finance costs
Other income
Other charges
Profit before tax
Taxation
Profit after taxation

55

Profit & loss


Account
Vertical Analysis

2013

2012

2011

2010

2009

ASSETS
NON-CURRENT ASSETS
Property, plant &
equipment
Long term deposits
Total Fixed Assets

65.18

51.97

42.77

54.41

67.81

0.38

0.45

65.18

51.97

42.77

54.79

68.26

10.05

7.80

6.26

6.23

4.43

9.38

25.79

30.96

20.47

20.74

10.76

7.97

7.92

0.46

3.72

5.78

8.98

13.24

5.78

0.91

0.68

3.12

4.82

0.79

34.82

48.03

57.23

45.21

31.74

100.00

100.00

100.00

100.00

100.00

61.44

44.36

32.97

39.53

47.44

57.75

41.70

30.99

37.16

44.59

254.76

147.97

136.11

168.14

245.78

(197.01)

(106.27)

(105.12)

6.88

4.97

3.69

16.90

45.47

49.94

35.62

85.00

101.92

122.30

56.81

40.58

88.69

118.82

167.76

CURRENT ASSETS

Stores & spare parts


Stock-in-trade
Trade debts - unsecured
Loans, advances &
other receivable
Cash & bank balances
Total Current Assets

TOTAL ASSETS

EQUITY & LIABILITIES


SHARES CAPITAL &
RESERVES
Authorized Capital
15000000 (2012:
15000000) Odinary
shares of Rs. 10/- each.
Issued, subscribed &
paid-up capital
14100000 (2012:
14100000) Odinary
shares of Rs. 10/- each
fully paid in cash
Accumulated loss
Total Share Holder
Equity

(130.98)

(201.19)

NON-CURRENT
LIABILITIES
Long-term financing secured
Deffered liabilities
Total Long term
Liabilities

56

CURRENT LIABILITIES
Current portion of long
term financing
Trade & other payables
Accrued mark-up
Provision taxation
Total Current
Liabilities
Total Liabilities
TOTAL EQUITY &
LIABILITIES

140.27

101.29

79.07

87.33

92.17

83.63

52.30

31.46

15.46

34.20

7.78

5.62

4.17

5.01

6.01

8.52

6.49

1.72

4.37

1.04

240.20

165.69

116.43

112.16

133.42

297.01

206.27

205.12

230.98

301.19

100.00

100.00

100.00

100.00

100.00

57

S.no

Formula's

1
2
3
4
5
6
7
8
9
10

Profibility Ratios
Assets Turnover
Rate of return on total assets
Rate of return on S.H.E
Equity Multiplier
Rate of return on capital employed
Net Profit Margin
Rate of cost of good sold
Rate of gross profit
Rate of operating expense
Rate of net profit

Total Net Sales/Total Assets *100


Net Profit After Tax/Total Assets *100
Net Profit/Total S.H.E *100
Total Assets/Total S.H.E *100
EBIT/Capital Employed *100
Net Profit After Tax/Sales *100
Cost of Goods Sold/Total Net Sales *100
Gross Profit/Total Net Sales *100
Operating Expenses/Total Net Sales *100
Net Profit/Total Net Sales *100

11
12
13
14
15
16
17
18
19
20

Liquidity Ratios
Working Capital
Current Ratio
Quick Ratio
Inventory Turnover
Days on Inventory
A/C Receivable Turnover
Days on A/C Receivables
A/C Payable payment
Days on A/C Payable
Total Days

Current Assets - Current Liabilities


Current Assets/Current Liabilities
Quick Assets/Current Liabilities
Cost of Goods Sold/Average Inventory
365/Times
Net Credit Sales/Average A/C Receivable
365/Times
Net Credit Purchases/Average A/C Payable
365/Times
(Inventory Days + A/R Days) - A/P Days

21
22

Debt & Gearing Ratios


Debt Ratio
Debt to Equity Ratio

23
24

Gearing Ratio
Interest Cover

Total Liabilities/Total Assets


Long term Debt/Total S.H.E *100
L.T.D + Preferred Share/L.T.D + S.H.E + Pref. Share
*100
EBIT/Interest Expenses

25
26
27

Invertor's Ratios
Earnings per share
Price earnings ratio
Dividend Yield

Net Profit-Preferred Dividend/No. of Shares


Market Price/Earnings per share
Dividend per share/ Market Price

28

Book Value Per Share

Total S.H.E/No. of share

58

Mirza Sugar Mills Limited


Ratio Analysis
For the year ended September 30, 2013 to 2009
2013

2012

2011

2010

2009

Average

Industry

89.14

229.02

322.13

350.17

205.39

239.17

1.16

(49.84)

35.16

5.41

36.69

51.26

15.74

4.44
16

25.30

(33.08)

(5.15)

(28.01)

(25.48)

(13.28)

(50.76)

(94.10)

(95.13)

(76.35)

(49.70)

(73.21)

298

35.11

(71.65)

(52.64)

(330.38)

(157.82)

(115.48)

8.12

15.35

1.68

10.48

24.96

107.14

92.47

83.36

85.63

(55.91)
133.34

(0.69)

5.60

100.39

88.11

(33.34)

(7.14)

7.53

16.64

14.37

(0.39)

4.87

(55.80)

(14.86)

3.48

13.27

8.43

(9.10)

5.50

(55.91)

15.35

1.68

10.48

24.96

(0.69)

3.33

(501,456,514)

(397,846,571)

(269,292,228)

(254,035,957)

(321,535,772) (348,833,408)

0.14

0.29

0.49

0.40

0.24

0.31

2.38

0.05

0.05

0.09

0.05

0.01

0.05

1.83

12.67

9.51

9.62

14.26

8.48

10.91

4.54

28.80

38.37

37.93

25.59

43.05

34.75

53.84

23.97

39.61

35.88

26.45

35.54

32.29

47.97

15.23

9.22

10.17

13.80

10.27

11.74

2.11

1.42

4.69

9.47

18.89

5.14

7.92

7.53

256.80

77.79

38.55

19.32

70.98

92.69

93.15

(212.77)

(30.21)

9.55

20.07

(17.67)

(46.21)

187.11

2.97

2.06

2.05

2.31

3.01

2.48

0.86

(28.84)

(38.19)

(84.37)

(90.71)

(83.39)

(65.10)

68.63

43.00

1.85

1.63

(16.35)

4.21

13.49

7.88

(8.63)

8.43

1.75

9.87

2.89

2.86

14.90

(4.57)

5.13

30.79

5.90

24.57

12.36

8.52

2.27

3.47

4.64

6.01

4.93

4.26

1.18

3.57

3.49

2.35

4.85

5.50

3.95

30.52

59

Interpretation:
Assets Turnover: This ratio measures how efficiently a firm uses its assets to generate
sales, so a higher ratio is always more favorable. Higher turnover ratios mean the
company is using its assets more efficiently. Lower ratios mean that the company isn't
using its assets efficiently and most likely have management or production problems,
company average assets turnover is 239.17 which are not better than industry 1.16 ratios.

Rate of return on total assets: The return on assets ratio measures how effectively a
company can turn earns a return on its investment in assets. In other words, ROA shows
how efficiently a company can covert the money used to purchase assets into net income
or profits, company average rate of return on total assets is 15.74 which is better than
industry 4.44 ratio.

Rate of return on S.H.E: Return on equity measures how efficiently a firm can use the
money from shareholders to generate profits and grow the company. Unlike other return
on investment ratios, ROE is a profitability ratio from the investor's point of viewnot the
company, company average rate of return on S.H.E is (13.28) which is not better than
industry 16 ratio.

Equity Multiplier: The equity multiplier is a ratio used to analyze a company's debt and
equity financing strategy. A higher ratio means that more assets were funding by debt
than by equity. In other words, investors funded fewer assets than by creditors; company
average equity multiplier is (73.21) which are better than industry 298 ratio.

Rate of return on capital employed: The return on capital employed ratio shows how
much profit each dollar of employed capital generates. Obviously, a higher ratio would be
more favorable because it means that more dollars of profits are generated by each dollar
of capital employed, company average rate of return on capital employed is (115.48)
which is not better than industry 8.12 ratio.

Net profit margin: Net profit margin is a key financial indicator used to assets the
profitability of a company.Net profit margin measures how much of each dollar earned by
the company is translated into profits. A low profit margin indicates a low margin of safety:
higher risk that a decline in sales will erase profits and result in a net loss, company
average net profit margin is (0.69) which is better than industry 5.6 ratio.

Rate of gross profit: Gross margin ratio is a profitability ratio that measures how
profitable a company can sell its inventory. It only makes sense that higher ratios are
more favorable. Higher ratios mean the company is selling their inventory at a higher profit
percentage; company average rate of gross profit is (0.39) which is not better than
industry 4.87 ratio.

60

Rate of operating expense: The operating expense ratio also known as the OER is the
ratio between the total operating expenses and the effective gross income for an income
producing property. Operating expenses are costs associated with the operation
and maintenance of income producing properties, company average rate of operating
expense is (9.10) which is not better than industry 5.5 ratio.

Rate of net profit: Net profit margin measures how much of each dollar earned by the
company is translated into profits. A low profit margin indicates a low margin of safety:
higher risk that a decline in sales will erase profits and result in a net loss, company
average rate of net profit is (0.69) which is better than industry 3.33 ratio.

Current ratio: Current Ratio is a liquidity ratio that measures company's ability to pay its
debt over the next 12 months or its business cycle. Current ratio is a financial ratio that
measures whether or not a company has enough resources to pay its debt over the next
business cycle (usually 12 months) by comparing firm's current assets to its current
liabilities, company average current ratio is 0.31 which is not better than industry 2.38
ratio.
Quick ratio: The acid test ratio measures the liquidity of a company by showing its ability
to pay off its current liabilities with quick assets. If a firm has enough quick assets to cover
its total current liabilities, the firm will be able to pay off its obligations without having to
sell off any long-term or capital assets, company average quick ratio is 0.05 which is not
better than industry 1.83 ratio.

Inventory turnover: Inventory turnover is a measure of how efficiently a company can


control its merchandise, so it is important to have a high turn. This shows the company
does not overspend by buying too much inventory and wastes resources by storing nonsalable inventory. It also shows that the company can effectively sell the inventory it buys;
company average inventory turnover is 10.91 which are better than industry 4.54 ratio.

Days on inventory: Days in Inventory measures the average number of days it takes a
company to turn its inventory into sales, a financial indicator of a company's performance.
Days in Inventory estimates also the number of days the average inventory balance will
be sufficient, company average days on inventory is 34.75 which is better than industry
53.84 ratio.

A/C receivable turnover: The receivables turnover ratio measures a business' ability to
efficiently collect its receivables; it only makes sense that a higher ratio would be more
favorable. Higher ratios mean that companies are collecting their receivables more
frequently throughout the year, company average A/C receivable turnover is 32.29 which
are not better than industry 47.97 ratios.

61

Days on A/C receivable: The days sales outstanding formula shows investors and
creditors how well companies' can collect cash from their customers. Obviously, sales
don't matter if cash is never collected. This ratio measures the number of days it takes a
company to convert its sales into cash, company average days on A/C receivable is 11.74
which is not better than industry 2.11 ratio.

Accounts payable turnover: Accounts payable turnover ratio is an accounting liquidity


metric that evaluates how fast a company pays off its creditors (suppliers). The ratio
shows how many times in a given period (typically 1 year) a company pays its average
accounts payable. An accounts payable turnover ratio measures the number of times a
company pays its suppliers during a specific accounting period, company average A/C
payables turnover is 7.92 which is not better than industry 7.53 ratio.

Days on A/C payable: The days A/c payable formula shows investors and creditors how
well companies' can pay cash from their customers. Obviously, sales don't matter if cash
is never paid. This ratio measures the number of days it takes a company to convert its
sales into cash, company average days on A/C payable is 92.69 which is not better than
industry 93.15 ratio.

Total days: The cash conversion cycle measures how many days it takes a company to
receive cash from a customer from its initial cash outlay for inventory. For example, a
typical retailer buys inventory on credit from its vendors. When the inventory is purchased,
a payable is established, but cash isn't actually paid for some time, average total days of
company are (46.21) which is better than industry 187.11 ratios.

Debt ratio: The debt ratio is a fundamental solvency ratio because creditors are always
concerned about being repaid. When companies borrow more money, their ratio
increases creditors will no longer loan them money. Companies with higher debt ratios are
better off looking to equity financing to grow their operations, company average debt ratio
is 2.84 which is better not than industry 0.86 ratio.

Debt to equity ratio: It is also a measure of a company's ability to repay its obligations.
When examining the health of a company, it is critical to pay attention to the debt/equity
ratio. If the ratio is increasing, the company is being financed by creditors rather than from
its own financial sources which may be a dangerous trend. Lenders and investors usually
prefer low debt-to-equity ratios because their interests are better protected in the event of
a business decline. Thus, companies with high debt-to-equity ratios may not be able to
attract additional lending capital; in this case average debt to equity ratio is (65.10) which
is better than industry 66.63 ratio.

Gearing ratio: The gearing ratio is the proportion of a company's debt to its equity. A high
gearing ratio represents a high proportion of debt to equity, and a low gearing ratio
represents a low proportion of debt to equity. The ratio indicates the financial risk to which
a business is subjected, in this case average gearing ratio is not calculated than industry
is better position 43 ratios.

62

Interest cover: The interest coverage ratio (ICR) is a measure of a company's ability to
meet its interest payments. Interest coverage ratio is equal to earnings before interest and
taxes (EBIT) for a time period, often one year, divided by interest expenses for the same
time period. The interest coverage ratio is a measure of the number of times a company
could make the interest payments on its debt with its EBIT. It determines how easily a
company can pay interest expenses on outstanding debt, company average interest cover
is 1.85 which is better than industry 1.63 ratios.
Earnings per share: Earnings per share are the same as any profitability or market
prospect ratio. Higher earnings per share is always better than a lower ratio because this
means the company is more profitable and the company has more profits to distribute to
its shareholders, company average earning per share is 2.86 which is not better than
industry 14.90 ratio.

Price earnings ratio: The price to earnings ratio indicates the expected price of a share
based on its earnings. As a company's earnings per share being to rise, so does their
market value per share. A company with a high P/E ratio usually indicated positive future
performance and investors are willing to pay more for this company's shares, company
average price earnings ratio is 12.36 which are better than industry 8.52 ratio.

Dividend yield: A company with a high dividend yield pays its investors a large dividend
compared to the fair market value of the stock. This means the investors are getting highly
compensated for their investments compared with lower dividend yielding stocks. A high
or low dividend yield is relative to the industry of the company, company average dividend
yield is 4.26 which are better than industry 1.18 ratios.

Book value per share: Book value per share is often used to negotiate mergers,
acquisitions, and loan contracts. During a merger, the both companies need to calculate a
baseline price for the common and preferred shares of the business being absorbed.
Book value is a good starting point because it is objective and shows a selling price or
liquation value of the shares, company average book value per share is 3.95 which are
not better than industry 30.52 ratios.

63

Notes to the Financial Statements


For the year ended September 30, 2013

Stores, spare & loose tools

2013
2012
Note __________Rupees__________

Stores
Spares
Loose tools

14,689,134
11,970,581
335,072
26,994,787
(2,460,453)
24,534,334

Less: Provision for slow moving stores

Stock in trade
Finished sugar
Sugar in process

15,022,946
13,436,648
373,745
28833,339
(2,460,453)
26,372,886

2013
2012
Note __________Rupees__________
20,952,798
85,337,759
1947496
1871901
22900294
87209660
2013
2012
Note __________Rupees__________

Loans, prepayments & advances


Unsecured &
Considered good advances
To supplier
To contractors
Advance against expense
To growers

1991135
460360
239290
4472960
7163745
1915855
9079600

5197266
471361
641373
9251605
15561605
3988944
19550550

2013
2012
_________Rupees___________
Cash & bank balances
Cash in hand
Cash at banks in current accounts

55133
2178252
223385

Note
Deferred liability
Quality premium
Deferred tax liability

10.1
10.2

172105
2143464
2315569

2013
2012
_______Rupees__________
100877138
21043415
121920553

199877138
19549580
120426718

64

2013
2012
_________Rupees___________
Deferred taxation
Taxable temporary difference
On property, plant & equipment
Deductable temporary difference
Brought forward losses
Other deductable difference

21904573

22877300

861158
(861158)
21043415

3327720
(3327720)
19549580

152954293
2660814
155615107

146240238
2257864
148498102

14051817
1496604
15548421

1496604
11323464

10714752
1257077
836648
727673
42877
9375178
1357338
908912
7794467
33014922
204178450

5692
565302
561104
28309
11142064
1357338
908912
2440119
17008840
176830407

11142064
1113920
1113920
(2880806)
9375178

2446929
8376297
318838
8695135
11142064

21936059
(1131132)
20804927

7838536
20346650
380289
(6629416)
21936059

Trade & other payables


Creditors
For sugarcane
For stores & spares

Accrued liabilities
Accrued expenses
Road cess
Other liabilities
Advance from customers against sales
Employees provident fund
Federal excise duty payable
Income tax withheld payable
Retention money
Workers profits participation fund
Workers welfare fund
Dividend payable
Others

Workers profits participation fund


Opening balance
Allocated during the year
Interest accrued during the year
Paid during the year
Closing balance
Provision for taxation
Opening liability
Expense for the year
Prior year tax expense
Less: Advance tax for the year
Provision for the year

65

Note
Sales Net
Sugar
Molasses
Brokerage
Direct levies

Cost of sales
Raw material consumed
Manufacturing expenses
Opening stock:
Finished stock sugar
Sugar in process

Closing stock:
Finished stock sugar
Sugar in process

2013
2012
_______Rupees__________
221598150
13285248
234883398
(280650)
(16957829)
(17238479)
217644919

780164500
52946636
833111136
(924500)
(57825932)
(58750432)
774360704

157585878
68306633
225892511

656586290
119470117
776056407

85337759
1871901
87209660
313102171

138967362
1859250
140826612
916883019

(20952798)
(1947496)
(22900294)
290201877

(85337759)
(1871901)
(87209660)
829673359

2355672
1114634
9299128
1409785
25096416
624857
5576505
623294
15536735
1664196
68306633

7666387
2853183
26937984
6586199
40949249
1247240
6796923
1742432
17128873
2529289
119470117

83820
441885
11300
537005

63500
942846
1006346

(121680503)
14100000
(8.63)

118873117
14100000
(8.43)

Manufacturing expense
Chemicals
Oil & lubricants
Stores & spares consumed
Packing material consumed
Salaries & allowances
Repair & maintenance
Fuel & power
Handling
Depreciation
Others
Distribution cost:
Advertisement
Loading & stacking
Others
Earning per share
Profit after taxation
Weighted average number of ordinary shares
Earnings per shares

66