SHAHMURAD SUGAR MILLS LTD. September 30 2011.pdfSHAHMURAD SUGAR MILLS LTD. NOTICE OF MEETING 05 NOTE: 1. The Register of the Members of the Company will remain closed from 23rd January,

SHAHMURAD SUGAR MILLS LTD.

CONTENTS

Page No.

Company Information........................................................................................................................................................02

Mission & Vision Statements .............................................................................................................................................03

Statement of Ethics and Business Practices ....................................................................................................................04

Notice of Annual General Meeting ....................................................................................................................................05

Directors' Report ...............................................................................................................................................................06

Statement of Compliance with the Code of Corporate Governance..................................................................................10

Key Operation and Financial Data for Ten Years .............................................................................................................12

Review Report to the Members on Statement of Compliance with best

Practices of Code of Corporate Governance from Auditors .............................................................................................13

Auditors' Report to the Members ......................................................................................................................................14

Balance Sheet ..................................................................................................................................................................15

Profit & Loss Account .......................................................................................................................................................16

Statement of Comprehensive Income ...............................................................................................................................17

Statement of Changes in Equity........................................................................................................................................18

Cash Flow Statement .......................................................................................................................................................19

Notes to the Financial Statements ....................................................................................................................................20

Pattern of Share Holding ..................................................................................................................................................46


COMPANY INFORMATION

BOARD OF DIRECTORS

MR. ISMAIL H. ZAKARIA ChairmanMR. YUSUF AYOOB Managing DirectorMR. SULEMAN AYOOBMR. A. AZ1Z AYOOBMR. ZIA ZAKARIA Resident DirectorMR. GHULAM MOHIUDDIN ZAKARIAMR. ZOHAIR ZAKARIAMR. AAMIR AMIN (N.I.T. Nominee)MR. KHURRAM AFTAB (N.I.T. Nominee)

BOARD AUDIT COMMITTEE

MR. SULEMAN AYOOB ChairmanMR. ZOHAIR ZAKARIA MemberMR. AAMIR AMIN Member

CHIEF FINANCIAL OFFICER

MR. IQBAL UMER

COMPANY SECRETARY

MR. MOHAMMAD YASIN MUGHAL FCMA

AUDITORS

HYDER BHIMJI & COMPANYChartered Accountants

LEGAL ADVISOR

MR. ABDUL SATTAR PINGAR Advocate

REGISTERED OFFICE

96-A, SINDHI MUSLIM SOCIETY,KARACHI-74400Tel: 34550161-63 Fax: 34556675

FACTORY

JHOK SHARIF,TALUKA MIRPUR BATHORO,DISTRICT THATTA (S1NDH)

REGISTRAR & SHARE REGISTRATION OFFICE

C & K MANAGEMENT ASSOCIATES (PVT) LTD.404-TRADE TOWER,ABDULLAH HAROON ROAD,NEAR METROPOLE HOTEL,KARACHI - 75530

WEBSITE

www.alnoorgroup.co

02


To be a model company producing sugar and allied products

of international quality by maintaining high level of ethical

and professional standards.

To gain strength through industry leadership in the

manufacturing and marketing of sugar and allied products

and to have a strong presence in these products markets

while retaining the options to diversify in other profitable

ventures.

To operate ethically while maximizing profits and satisfying

customers needs and stakeholders� interests.

To assist in the socio economic development of Pakistan

especially in the rural areas through industrial expansion and

development.

03


STATEMENT OF ETHICS & BUSINESS PRACTICES

04

Shahmurad Sugar Mills is guided by the following principles in its pursuit of excellence in all activities for the attainment ofthe Company's Objectives.

THE COMPANY

� Fulfills all statutory requirements of the Regulatory Authority and follows all applicable laws of the country togetherwith compliance of accepted accounting principles, rules and procedures required.

� Deals with all stakeholders in an objective and transparent manner so as to meet the expectations of those who relyon the Company.

� Meet the expectations of the spectrum of the society and the Regulatory Authority by implementing an effective andfair system of financial reporting and internal controls.

� Uses all means to protect the environment and ensures health and safety of the employees.

� Activities and involvement of directors and employees of the Company in no way conflict with the interest of theCompany. All acts and decisions of the management are motivated by the interest of the Company rather than theirown.

� Ensures efficient and effective utilization of its resources.

AS DIRECTORS

� Promote and develop attractive environment through responsive policies and guidelines to facilitate viable and timelydecisions.

� Maintain organizational effectiveness for the achievement of the Company's goals.

� Support and adherence to compliance of legal and industry requirements.

� Safeguard the interest and assets of the company to meet and honor all obligations of the Company.

� Promote a culture that supports enterprise and innovation with appropriate short-term and long-term performancerelated rewards that are fair and achievable in motivating management and employees effectively and productively.

AS EXECUTIVE AND MANAGERS

� Ensure cost effectiveness and profitability of operations.

� Provide directions and leadership for the organization and take viable and timely decisions.

� Develop and cultivate work ethics and harmony among colleagues and associates.

� Encourage initiatives and self-realization in employees through meaningful empowerment.

� Promote and develop culture of excellence, conservation and continuous improvement.

� Provide pleasant work atmosphere and ensure an equitable way of working and rewarding system.

� Institute commitment to environmental, health and safety performance.

AS EMPLOYEES AND WORKERS

� Observe Company policies, regulations and codes of Best Business Practices.

� Exercise prudence in effective, efficient and economical utilization of resources of the Company.

� Make concerted struggle for excellence and quality.

� Devote productive time and continued efforts to strength the Company.

� Protect and safeguard the interest of the Company and avoid the conflict of interest. Ensure the primary interest inall respect is that of the Company.

" Maintain financial integrity and must avoid making personal gain at the Company's cost by participating in or assistingactivities which compete with the Company.


NOTICE OF MEETING

05

NOTE:

1. The Register of the Members of the Company will remain closed from 23rd January, 2012 to 2nd February, 2012(Both days inclusive) for the purpose of holding the Annual General Meeting / Transfer of Shares.

2. A member of the Company entitled to attend and vote may appoint any member as his/her proxy to attend and voteon his/her behalf . PROXIES MUST BE RECEIVED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESSTHAN 48 HOURS BEFORE THE MEETING.

3. CDC Accounts Holders will further have to follow the under-mentioned guidelines as laid down in Circular I datedJanuary 26, 2000 issued by the Securities and Exchange Commission of Pakistan.

A. For Attending the Meeting

i. In case of individuals, the account holder or sub-account holder and/or person whose securities are in groupaccounts and their registration details are uploaded as per the Regulations shall authenticate his identity byshowing his Original Computerized National Identity Card (CNIC) or original passport at the time of attendingthe meeting.

ii. In case of corporate entity, the Board of Directors' resolution /power of attorney with specimen signature ofthe nominee shall be produced (unless it has been provided earlier) at the time of the meeting.

B. For appointing proxies:

In case of individuals the account holder or sub-account holder and/or the person whose securities are in groupaccount and their registration details are uploaded as per the Regulations shall submit the proxy form as per theabove requirements.

i. The proxy form shall be witnessed by two persons whose names, addresses and CNIC number shall bementioned on the form.

ii. Attested copies CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxyform.

iii. The proxy shall produce his/her original CNIC or original passport at the time of the meeting.

iv. In case of corporate entity, the Board of Directors resolution/power of attorney with specimen signature of thenominee shall be submitted (unless it has been provided earlier) along with proxy form to the company.

4. Shareholders are requested to inform the Company's Share Registrar M/S. C & K Management Associates (Pvt.)Ltd. of any change in their address immediately.

Notice is hereby given that 33rd Annual General Meeting of SHAHMURAD SUGAR MILLS LIMITED will be held at theRegistered Office of the Company at 96-A, Sindhi Muslim Society, Karachi on Monday, 30th January, 2012 at 03.30 p.m.to transact the following business:

ORDINARY BUSINESS

1. To confirm the minutes of the 32nd Annual General Meeting held on 28th January, 2011.

2. To receive, consider and adopt the Audited Financial Statements of the Company for the year ended September 30,2011 together with the Directors' and Auditors' Reports thereon.

3. To approve payment of Cash Dividend @ 10 % i.e. Re. 1/= per ordinary shares of Rs.10/= each for the year ended30th September 2011 as recommended by the Board of Directors

4. To appoint Auditors and to fix their remuneration for the year ended 30th September 2012. The present Auditors. M/sHyder Bhimji & Company, Chartered Accountants, retire and offer themselves for re-appointment.

5. To transact any other business with permission of the Chair.

Karachi: December 29, 2011

By Order of the Board

M. YASIN MUGHAL

COMPANY SECRETARY


DIRECTORS� REPORT TO THE MEMBERS

IN THE NAME OF ALLAH THE MOST GRACIOUS AND MOST MERCIFUL

Dear Members:

Assalam-o-Alaikum:

On behalf of Board of Directors of your company I am pleased to share with you the significant achievements of the Company'soperations and present the audited Annual Financial Statements together with Auditors' Report thereon for the period endedSeptember 30, 2011.The Company has earned pretax profit amounting to Rs.88.526 million as against Rs.67.308 millionearned last year.

Salient production and financial data are provided as under:

PRODUCTION DATA 2010-11 2009-10Season started on 08-12-2010 04-12-2009Season ended on 30-03-2011 05-03-2010Duration of crushing (days) 113 92Sugarcane crushed (Metric Tons) 654,892 521,063Sugar produced (Metric Tons) 60,775 49,565Sugar recovery - percentage 9.27 9.51Molasses produced (Metric Tons) 33,478 26,561Ethanol produced (Metric tons) 25,116 18,226

FINANCIAL DATA (Rupees in thousand)

Sales revenues 4,392,083 4,440,856Cost of sales 3,637,734 3,858,567Gross profit 754,349 582,289Distribution cost 86,974 64,677Administrative expenses 109,548 105,341Financial Cost 462,637 341,664Profit before taxation 88,526 67,308Provision for taxation 1,191 (35,060)Profit after tax 89,717 32,248Earning per share Rs.4.25 Rs. 1.53

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PERFORMANCE REVIEW:

SUGAR DIVISION:

During the period under consideration the sugarcane crushed was more 28.68 percent as compared to the preceding season,although the sugar produced was 22.62 percent more than the last year's production. The production was 60,775 MetricTons as compared to 49,565 Metric Tons as last year, not increasing in the same proportion as the crushing due to declinein the recovery rate which reduced from 9.51 percent to 9.27 percent. Excessive rainfall and flood affects close to harvestingtime had an adverse affect on the sugar percentage in the cane. Additionally some varieties of cane continue to be plantedand harvested which are not inducive to higher sugar contents.

Sugarcane price was fixed by the Government at Rs. 127 per 40 kilograms of cane, but due to growers' unwillingness tosupply at this price, the average sugarcane procurement rate this year was Rs.205 per 40 kilograms which indicated anincrease of 61.42 percent over the price fixed by the Government. In the sugar industry, the cost of sugarcane accountsfor more than 75% of the total cost of the production of sugar. The industry continues to stress upon the Government toformulate a policy of linking sugarcane support price to the sugar price in the open market and for timely fixation andannouncement of sugarcane support price. The present mechanism literally assures sugarcane floor price with no ceilingwhilst the finished product price remains volatile to many elements. Formulation of such a strategy will enable a long termapproach of planning and help in proper and timely plantation of high yield sugarcane as it will provide the necessaryincentives to both the farmers and the sugar mills.


ETHANOL DIVISION:

During the period under review Distillery Division produced 25,116 metric tons of Ethanol as against 18,226 metric tonsproduced last year. This also included 7,061 metric tons of Fuel Grade Ethanol produced after the installation of the molecularsieve dehydration facility the production was higher by 38.80 percent due to timely purchase of sufficient molasses duringthe crushing season. The Company exported 25,102 metric tons of Ethanol and earned US$ 22.092 million foreign exchangefor the country. As indicated in the last year's Annual Report the Government of Pakistan allowed blending of fuel gradeEthanol with petrol up to 10 percent for which no modification is required in the engine of the vehicles. It was expected thatsubstantial quantity of fuel grade Ethanol would be consumed in the domestic market instead of exporting the product butlimited awareness has reduced the potential of the local market. Most of the plants producing fuel grade Ethanol are exportingtheir production.

CAPITAL EXPENDITURE:

In the sugar industry upgrading of the plant and machinery is a continuous process. During the year under review theCompany incurred an expenditure of Rs.187.751 million on addition, balancing and modernization of plant and machinery.

STATEMENT OF COMPLIANCE WITH BEST PRACTICESOF CORPORATE GOVERNANCE:

1. The financial statements prepared by the management of the Company present fairly its state of affairs, the resultsof its operation, cash flows and changes in equity.

2. The Company has maintained proper books of accounts as required by the law.

3. Appropriate accounting policies have been consistently applied in preparation of financial statements and accountingestimates are based on reasonable and prudent judgment.

4. International Accounting Standards, as applicable in Pakistan, have been followed in preparation of the financialstatements unless otherwise disclosed.

5. The system of internal control is sound in design and has been effectively implemented and monitored.

6. There are no doubts upon the Company's ability to continue as going concern.

7. There has been no material departure from the best practices of the Code of Corporate Governance as detailed inthe listing regulations of the Stock Exchange.

8. There have been no outstanding statutory payments; however, there are some disputed cases which are appearingin the relevant notes to the financial statements.

9. The pattern of share holding in the Company as on September 30, 2011 is also included in the report.

10. The Directors, Chief Executive, Chief Financial Officer, Company Secretary, their spouses or minor children carriedout no trade in the shares of the company.

11. Value of investment and balance in deposit accounts of Provident Fund as at 30th June, 2011 amounted to Rs14.461million.

The key operating and financial data of the last ten years and pattern of shareholding has been included in the AnnualReport. There has been no significant change in the holding of directors or their spouses except as otherwise indicated.

CHANGES IN COMPOSITION OF BOARD OF DIRECTORS:

There has been no change in the composition of Board of Directors during the period under review.

The details of the Board of Directors meetings and attendance of each Director is also indicated against their names asunder.

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08

Name of Directors Numbers of Meetings

Held Attended

01 Mr. Ismail H Zakaria 4 302 Mr. Yusuf Ayoob 4 403 Mr. Suleman Ayoob 4 404 Mr. A Aziz Ayoob 4 405 Mr. Zia Zakaria 4 306 Mr. Ghulam Mohiuddin Zakaria 4 307 Mr. Zohair Zakaria 4 408 Mr. Aamir Amin 4 409 Mr. Khurram Aftab 4 4

FUTURE OUTLOOK:

SUGAR DIVISION:

The Government of Sindh has announced minimum sugarcane support price at Rs.154 per 40 kg of sugarcane for thecrushing season 2011-12 vide Notification No. 8(142)S.O (Ext)/2011 dated October 25, 2011 as against Rs.127 for theprevious crushing season. This represents an increase in the raw material support price of 21.26% over the preceding year.Sugarcane cost is increased by the Government every year ranging from 20 percent to 30 percent but final product priceis left open ended to the market forces. Further more the sugarcane cost constitutes about 75% of the total production costof sugar. The increase in the sugarcane price supplemented by lower availability of sugarcane and uncertain recovery ratemight further enhance the cost of production of sugar in the coming year. Additionally the cane survey indicated that therehas been more plantation of sugarcane crop but the new crop has been affected by torrential rain close to the harvestingtime. The actual effect will only be visible after the start of the crushing season.

It is imperative that the Government of Pakistan must formulate a cogent sugar policy to protect the interest of growers�producers and consumers. Your Company continued its efforts towards research and development in order to ensure constantsupply of raw material and introduce high quality of cane seed amongst the growers. It is expected that the recoverypercentage would improve significantly in the years to come if these new varieties are successfully sown in the surroundingareas of your mills in place of the banned low recovery varieties of sugarcane.

The cost of refined sugar in the international market continues to be erratic with higher production expected in the upcomingyear particularly in the South East Asian region. In this regard, the Trading Corporation of Pakistan (TCP) has floated a localpurchase tender of 200,000 tons to build up and maintain a strategic buffer stock of sugar in the country during the upcomingsurplus year, which can come in good use during the years of shortage. This is a good step to bring stability to sugar prices,and might have a trickle down effect in making sugar cane prices more stable as well.

ETHANOL DIVISION:

Export of molasses from Pakistan continues to take some of the raw material from the market reducing molasses availabilityfor the local Ethanol plants. Assessment of availability of raw material i.e. molasses in the desired quantity would be determinedwhen the crushing season progresses, and the production figures start to emerge. However, the management is fullydetermined to procure molasses at reasonable rates and in such quantity as required to run the plant at the maximumcapacity. As always, price of oil continues to play an important part in the pricing of Ethanol, and as the future outlook of oilattains stability, it is expected that Ethanol would follow suit. Fuel grade Ethanol continues to attract a good price in theinternational market and the same was exported at a premium price over the extra neutral grade product.

CREDIT RATING OF THE COMPANY:

JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity rating of the Company at 'BBB +/A-2' (TripleB Plus/A-Two) Outlook on the rating has also remained "Stable".

CORPORATE & SOCIAL RESPONSIBILITY:

The company strives to fulfill its social and corporate responsibilities towards its employees and general public living in itsfranchise area. The company operating a school in the factory area and provides education not only to the children ofemployees but also to the children residing in the surrounding areas of the factory.


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Karachi: 29th December, 2011

By order of the Board

YUSUF AYOOBMANAGING DIRECTOR

DIVIDEND:

Directors are pleased to recommend the payment of cash dividend at 10 percent i.e. Re.1/= per share of Rs.10 each. (2010:10% cash dividend i.e. Re.1. per share of Rs. 10/= each).

AUDITORS:

M/s Hyder Bhimji & Co. Chartered Accountants have retired and being eligible has offered their services for re-appointmentfor the Financial Year 2011-12. Audit Committee of the Board has also recommended their re-appointment.

STAFF RELATIONS:

Finally the Directors of your Company record their appreciations for the perseverance, commitment to meeting the objectivesand targets and the team work put in by the management and employees, in the current demanding environment and areconfident that they will continue to demonstrate the same zeal and vigor in future.


10

STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATEGOVERNANCE FOR THE YEAR ENDED 30TH SEPTEMBER 2011

This statement is being presented to the company with the Code of Corporate Governance contained in the Regulation No35, chapter XI of listing regulations of the Karachi Stock Exchange (Guarantee) Limited for the purpose of establishing aframework of good governance, whereby a listed company is managed in compliance with the best practices of CorporateGovernance.

The company has applied the principles contained in the Code in the following manner:

1. The Board encourages representation of independent non-executive Director. At present the Board comprises ofnine Directors including five non-executive Directors.

2. The directors have confirmed that none of them is serving as Director in more than ten listed companies, includingthe Company.

3. All the Directors of the company are registered as taxpayers and none of them has defaulted in payment of any loanto a banking company, a DFI/NBFI or, being a member of Stock Exchange, has been declared as a defaulter by thatStock Exchange.

4. There was no change in the composition of Board of Directors during the year.

5. The company has prepared a "Statement of Ethics and Business Practices" which has been approved by the Boardof Directors.

6. The Board has developed a vision and mission statements, overall corporate strategy and significant policies. Acomplete record of particulars of significant policies has been maintained and amended / updated from time to time.

7. All the powers of the Board have been duly exercised and decisions on material transactions, including appointmentand determination of remuneration and terms and conditions of employment of the CEO and other executive Directors,have been taken by the Board.

8. The meetings of the Board were presided over by the Chairman. The Board met at least once in every quarter. Writtennotices of the meetings, along with the working papers were circulated at least seven days before the meetings. Theminutes of the meetings were appropriately recorded and circulated.

9. The related party transactions were placed before the Audit Committee and approved by the Board of Directors tocomply with listing regulations of Karachi Stock Exchange.

10. The members of the Board are well conversant with their duties and responsibilities. One of the Directors has alsoacquired the certification of the courses offered by the Pakistan Institute of Corporate Governance as required underthe Code of Corporate Governance.

11. Chief Financial Officer and Head of Internal Audit were appointed prior to the enforcement of Code of CorporateGovernance. Appointment of Company Secretary was approved by the Board including his remuneration and termsand conditions of employment as determined by the CEO.

12. The Directors' Report for the year has been prepared in compliance with the requirements of the Code and fullydescribed the salient matters required to be disclosed.

13. The financial statements of the Company were duly endorsed by CEO and CFO before approval of the Board.

14. The Directors, CEO and executives do not hold any interest in the shares of the Company other than that disclosedin the pattern of shareholding.


11

15. The Company has complied with all the corporate and financial reporting requirements of the Code.

16. The Board has formed an Audit Committee of three members. All the members are non-executive Directors.

17. Meetings of the Audit Committee were held at least once in every quarter prior to the approval of interim and finalresults of the Company as required by the Code. The terms of reference of the Committee have been formed andadvised to the Committee for compliance.

18. The Board has setup an effective internal audit function.

19. The Statutory Auditors of the Company have confirmed that they have been given a satisfactory rating under thequality control review programme of the Institute of Chartered Accountants of Pakistan, that they or any of the partnersof the firm , their spouses and minor children do not hold shares of the Company and that the firm and all its partnersare in compliance with International Federation of Accountants (IFAC) guidelines on Code of Ethics as adopted byInstitute of Chartered Accountants of Pakistan.

20. The Statutory Auditors or the persons associated with them have not been appointed to provide other services exceptin accordance with the listing regulations and the Auditors have confirmed that they have observed IFAC guidelinesin this regard.

21. We confirmed that all other material principles contained in the Code have been complied with.

Karachi: 29th December, 2011

YUSUF AYOOB

CHIEF EXECUTIVE


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KEY OPERATION & FINANCIAL DATA FOR LAST TEN YEARS

BALANCE SHEET:

Share Capital 211,187 211,187 211,187 211,187 211,187 211,187 211,187 211,187 211,187 211,187

Reserves 296,930 208,586 184,529 76,405 (99,177) (109,334) (146,508) (120,850) (159,209) (85,519)

Surplus on revaluation 451,986 473,701 496,561 314,874 331,257 348,544 366,787 386,440 176,986 -

of fixed assets

Long Term Liabilities 914,113 741,021 973,916 1,164,938 1,131,560 1,049,346 538,719 518,653 255,547 261,354

Deferred Liabilities 128,364 173,525 182,822 169,547 197,178 206,487 221,306 231,888 74,114 59,404

Current Liabilities 2,878,103 1,502,702 1,011,608 1,298,067 1,089,329 1,022,614 1,493,277 1,001,293 752,574 714,712

Operating Assets 2,044,741 1,957,988 1,918,684 1,693,408 1,681,232 1,644,117 1,630,152 1,498,675 714,027 510,035

Long Term Deposits 2,708 2,570 2,462 5,133 25,968 19,382 13,111 11,618 5,579 3,105

Long Term Investment 2,909 4,601 4,362 4,265 4,215 4,060 3,670 2,895 2,280 5,000

Deferred Cost - - 9,891

Current Assets 2,828,149 1,344,912 1,135,115 1,532,212 1,149,919 1,061,285 1,037,835 715,423 589,313 633,106

TRADING

Turnover 4,392,083 4,440,856 2,887,436 2,345,768 1,523,852 1,880,477 1,067,984 826,086 992,890 802,594

Gross Profit/(Loss) 754,349 582,289 603,637 585,326 288,071 264,571 130,867 130,324 50,971 (5,039)

Operating Profit/(Loss) 550,887 409,360 444,042 395,895 200,048 187,051 70,009 85,074 7,736 (45,762)

Profit/(Loss) before Tax 88,526 67,308 115,012 158,225 (8,968) 13,548 (51,289) (516) (77,109) (147,511)

Profit/(Loss) after Tax 89,717 32,248 102,794 169,708 (7,285) 18,541 (46,086) 21,011 (82,339) (151,749)

Earning Per Share 4.25 1.53 4.87 8.04 (0.34) 0.88 (2.18) 0.99 (3.90) (7.19)

Cash Dividend 10% 10% 15% 10% NIL NIL NIL NIL NIL NIL

Bonus Shares NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL

SUGAR PRODUCTION

a) From Cane 60,775 49,565 47,690 69,286 52,510 31,640 33,614 60,775 54,135 45,030

b) From Raw Sugar - - - - - 9,814 4,566 - - -

Cane Crushed (M.Tons) 654,892 521,062 482,166 762,418 552,767 321,769 335,100 617,351 576,635 470,839

Sugar Produced (M.Tons) 60,775 49,565 47,690 69,286 52,510 41,454 37,872 60,775 54,135 45,030

Recovery (%) 9.27% 9.51% 9.85% 9.08% 9.50% 9.88% 9.90% 9.80% 9.40% 9.61%

(Rupees in thousand)

2007 2006 2004 2003 20022009 200820102011 2005


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REVIEW REPORT TO THE MEMBERS

ON THE STATEMENT OF COMPLIANCE WITH BEST PRACTICES

OF THE CODE OF CORPORATE GOVERNANCE

We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate Governance

prepared by the Board of Directors of SHAHMURAD SUGAR MILLS LIMITED to comply with the Listing Regulation No.

35 (previously No. 37) of the Karachi Stock Exchange where the Company is listed.

The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Company.

Our responsibility is to review, to the extent where such compliance can be objectively verified, whether the Statement of

Compliance reflects the status of the Company's compliance with the provisions of the Code of Corporate Governance and

report if it does not. A review is limited primarily to inquiries of the Company personnel and review of various documents

prepared by the Company to comply with the Code.

As part of our audit of financial statements we are required to obtain an understanding of the accounting and internal control

systems sufficient to plan the audit and develop an effective audit approach. We have not carried out any special review of

the internal control system to enable us to express an opinion as to whether the Board's statement on internal control covers

all controls and the effectiveness of such internal controls.

Further, Sub - Regulation (xiii a) of Listing Regulations 35 notified by the Karachi Stock Exchange vide circular No. KSE/N-

269 dated January 19, 2009 requires the Company to place before the Board of Directors for their consideration and approval

of related party transactions distinguishing between transactions carried out on terms equivalent to those that prevail in arm's

length transactions and transactions which are not executed at arm's length price recording proper justification for using

such alternate pricing mechanism. Further, all such transactions are also required to be separately placed before the Audit

Committee. We are only required and have ensured compliance of requirement to the extent of approval of related party

transactions by the Board of Directors and placement of such transactions before the Audit Committee. We have not carried

out any procedures to determine whether the related party transactions were undertaken at arm's length price or not.

Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does

not appropriately reflect the Company's compliance, in all material respects, with the best practices contained in the Code

of Corporate Governance as applicable to the Company for the year ended September 30, 2011.



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AUDITORS� REPORT TO THE MEMBERS

We have audited the annexed balance sheet of SHAHMURAD SUGAR MILLS LIMITED as at September 30, 2011 and

the related profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in

equity together with the notes forming part thereof, for the year then ended and we state that we have obtained all the

information and explanations which to the best of our knowledge and belief, were necessary for the purposes of our audit.

It is the responsibility of the Company's management to establish and maintain a system of internal control, and prepare

and present the above said statements in conformity with the approved accounting standards and the requirements of the

Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit.

We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that

we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any

material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in

the above said statements. An audit also includes assessing the accounting policies and significant statements made by

management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit provides

a reasonable basis for our opinion and, after due verification, we report that:

a. in our opinion, proper books of account have been kept by the Company as required by the Companies Ordinance,

1984;

b. in our opinion :

i. the balance sheet and profit and loss account together with the notes thereon have been drawn up

in conformity with the Companies Ordinance, 1984, and are in agreement with the books of account

and are further in accordance with accounting policies consistently applied;

ii. the expenditure incurred during the year was for the purpose of the Company's business; and

iii. the business conducted, investments made and the expenditure incurred during the year were in accordance

with the objects of the company;

c. in our opinion and to the best of our information and according to the explanations given to us, the balance sheet,

profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity

together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan,

and, give the information required by the Companies Ordinance, 1984 in the manner so required, and respectively

give a true and fair view of the state of the company's affairs as at September 30, 2011 and of the profit, total

comprehensive income, its cash flows and changes in equity for the year then ended; and

d. in our opinion, zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980)

was deducted by the Company and deposited in the central zakat fund established under section 7 of that Ordinance.



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ASSETS

NON CURRENT ASSETS

Property, plant and equipment 6 2,044,741 1,957,988Long Term Investment 7 2,909 4,601Long Term Deposits 8 2,708 2,570Long Term Loan 9 2,176 651

2,052,534 1,965,810

CURRENT ASSETS

Stores, spare parts and loose tools 10 170,911 160,319 Stock-in-trade 11 2,496,514 954,493 Trade debts 12 15 732 Loans and advances 13 127,635 199,311 Short term prepayments- to Related Party 721 105 Other receivables 14 19,501 15,412

Cash and bank balances 15 12,852 14,540 2,828,149 1,344,912

4,880,683 3,310,722EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Authorised Capital 25,000,000 ordinary shares of Rs. 10 each 250,000 250,000

Issued, subscribed and paid-up capital 16 211,187 211,187 General reserve 17 80,000 80,000 Unrealised (loss) on remeasurment of investment (1,982) (13) Unappropriated profit 218,912 128,599

508,117 419,773

SURPLUS ON REVALUATION OF PROPERTY, PLANT & EQUIPMENT 18 451,986 473,701

NON CURRENT LIABILITIES

Long Term Financing 19 662,357 510,166Loan from Related Parties 20 230,855 230,855Liabilities against assets subject to finance lease 21 20,901 -Deferred liabilities 22 128,364 173,525

1,042,477 914,546CURRENT LIABILITIES

Trade and other Payables 23 1,382,915 393,278 Accrued markup/Interest 24 65,411 43,385 Short term borrowings 25 1,247,197 767,549 Current portion of long term financing and liabilities against assets subject to finance lease 26 171,029 282,167 Provision for tax- Net of payment 11,551 16,323

2,878,103 1,502,702

CONTINGENCIES AND COMMITMENTS 27 - - 4,880,683 3,310,722

The annexed notes 01 to 43 form an integral part of these financial statements.

BALANCE SHEETAS AT SEPTEMBER 30, 2011

Note

2011 2010


YUSUF AYOOBManaging Director

ZIA I.ZAKARIADirector

Restated


16

Sales 28. 4,392,083 4,440,856

Cost of sales 29. 3,637,734 3,858,567

Gross profit 754,349 582,289

Less:

Distribution Cost 30. 86,974 64,677

Administrative Expenses 31. 109,548 105,341

Other Operating Charges 32. 23,180 20,724

219,702 190,742

Other Operating Income 33. 16,240 17,813

Operating Profit 550,887 409,360

Finance Cost 34. 462,637 341,664

88,250 67,696

Shares of profit/(Loss) in an associate 276 (388)

Profit before taxation 88,526 67,308

Taxation 35. 1,191 (35,060)

Profit after taxation 89,717 32,248

Earning per share - Basic and diluted 36. 4.25 1.53

The annexed notes 1 to 43 form an integral part of these financial statements

PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED SEPTEMBER 30, 2011

Note

2011 2010





17

Profit for the year after taxation 89,717 32,248

Other Comprehensive Income:

Share of associate's unrealised (loss)/profit on revaluation of investment 7.2 (1,969) 391

Total Comprehensive Income for the year 87,748 32,639


STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED SEPTEMBER 30, 2011

2011 2010




Restated


18

STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED SEPTEMBER 30, 2011

Balance as at October 01, 2009 as Originally reported 211,187 80,000 (404) 104,933 395,716

Impact of restatment of Financial Statements of associate - - - 236 236

Balance as at October 01, 2009 as restated 211,187 80,000 (404) 105,169 395,952

Transaction with owners

Final Dividend for 30-September-2009 @ 1.50 per Share - - (31,678) (31,678)

Transfer from surplus on revaluation of property,plant and equiqment on account of incremental depreciationnet of deferred tax 22,860 22,860

Total Comprehensive Income for the year 30th September-2010 - - 391 32,248 32,639

Balance as at September 30, 2010 as restated 211,187 80,000 (13) 128,599 419,773

Balance as at October 1, 2010 as Originally stated 211,187 80,000 (13) 128,363 419,537

Impact of restatment of Financial Statements of associate - - - 236 236

Balance as at October 01, 2010 as restated 211,187 80,000 (13) 128,599 419,773

Transaction with owners

Final Dividend for 30-September-2010 @ 1.00 per Share (21,119) (21,119)

Transfer from surplus on revaluation of property,plant and equiqment on account of incremental depreciationnet of deferred tax 21,715 21,715

Total Comprehensive Income for the year 30th September-2011 (1,969) 89,717 87,748

Balance as at September 30, 2011 211,187 80,000 (1,982) 218,912 508,117


...��... Rupees in thousands ��

Issued,Subscribed &paid up capital

Generalreserves

Unrealized(loss) on

revaluationof investment

Un-appropriatedprofit Total




19

A. CASH FLOW FROM OPERATING ACTIVITIESProfit before taxation 88,526 67,308Adjustment for non cash charges and other items:

Depreciation 100,974 97,929Profit on disposal of property,plant & equipment (136) (325)Finance cost 462,637 341,664Shares of (profit) /Loss in an associate (276) 388

563,199 439,656Cash generated before working capital changes 651,725 506,964(Increase) / decrease in current assetsStores spares and loose tools (10,592) (39,321)Stock in trade (1,542,021) (122,950)Trade debts 717 7,746Loans & advances 71,676 (57,711)Short term prepayments (616) 254Other receivables (4,089) (6,246)

(1,484,925) (218,228)Increase / (decrease) in current liabilitiesTrade and other payables 989,637 311,496Short term borrowings 479,648 123,552Cash generated from operations 1,469,285 435,048

636,085 723,784

Payment of Income Tax during the year (48,742) (15,690)Finance cost paid (440,612) (322,090)

(489,354) (337,780)

Net cash flow from operating activities 146,731 386,004

B. CASH FLOW FROM INVESTING ACTIVITIESFixed capital expenditures (187,751) (137,256)(Increase)/Decrease in Long term deposits (138) 425Increase in Long term Loan (1,525) (651)Sale proceed of property,plant & equipment 160 346Net cash flow from investing activities (189,254) (137,136)

C. CASH FLOW FROM FINANCING ACTIVITIESLong term financing 808,571 100,000Loan from Related Parties - (40,505)Repayment of long term financing (773,833) (267,913)Increase in Liabilities against assets subject to finance lease 30,000 -Repayment of Liabilities against assets subject to finance lease (2,784) (3,876)Dividend Paid (21,119) (31,678)Net cash inflow / (outflow) from financing activities 40,835 (243,972)

Net (decrease) in cash and bank balances (A+B+C) (1,688) 4,896Cash and bank balance at the beginning of the year 14,540 9,644Cash and bank balance at the end of year 12,852 14,540

The annexed notes form 01 to 43 an integral part of these financial statements

CASH FLOW STATEMENTFOR THE YEAR ENDED SEPTEMBER 30, 2011

2011 2010





20

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED SEPTEMBER 30, 2011

1. The Company and its operations

The Company was incorporated in Pakistan under the repealed Companies Act, 1913 (now Companies Ordinance,1984) as a public limited company. Its shares are quoted at the Karachi Stock Exchange. The Company owns andoperate Sugar and Ethyl Ethanol manufacturing units which are located at Jhoke, District Thatta in the province ofSindh. The registered office of the Company is located at 96-A, Sindhi Muslim Cooperative Housing Society, Karachi,Sindh.

1.1 The financial statements are presented in Pak.Rupees which is the company's functional and presentation currency.

2. Statement of Compliance

These financial statements have been prepared in accordance with approved accounting standards as applicable inPakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issuedby the International Accounting Standards Board as are notified under the Companies ordinance, 1984, provisions ofand directives issued under the Companies Ordinance, 1984 in case requirements differ, the provisions of the CompaniesOrdinance, 1984 shall prevail.

3 Significant accounting Judgments and estimates

The preparation of financial statements in conformity with approved accounting standards requires the use of certaincritical accounting estimates. It also requires management to exercise its judgment in the process of applying theCompany's accounting policies. Estimates and judgments are continually evaluated and are based on historic experienceand other factors, including expectations of future events that are believed to be reasonable under the circumstances.Revisions of accounting estimates are recognized in the period in which the estimate is revised and in any futureperiods as appropriate.

In the process of applying the accounting policies, management has made the following estimates and judgmentswhich are significant to the financial statements:

a) Property, plant and equipment

The Company reviews appropriateness of the rate of depreciation, useful life and residual value used in the calculationof depreciation. Further, where applicable, an estimate of the recoverable amount of asset is made for possibleimpairment on an annual basis. In making these estimates, the Company uses technical resources available with theCompany. Any change in the estimates in the future might affect the carrying amount of respective item of property,plant and equipment, with a corresponding effects on the depreciation and impairment.

b) Stock-in-trade

The Company reviews the net realizable value of stock in trade to assess any diminution in the respective carryingvalues. Net realizable value is estimated with reference to the estimated selling price in the ordinary course of businessless the estimated cost necessary to make the sale.

c) Taxation

In making the estimate for income tax payable by the Company, the Company takes into account the applicable taxlaws and decision by appellate authorities on certain issues in past. Due weightage is given to past history whiledetermining the ratio of future export sales for the purposes of calcualting deferred taxation.

Deferred tax assets are recognized for all unused tax losses and credits to the extent that it is probable that taxableprofit will be available against such losses and credits can be utilized. Significant management judgment is requiredto determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of futuretaxable profits together with future tax planning strategies.

d) Impairment

The Company reviews carrying amount of assets annually to determine whether there is any indication of impairment.If any such indication exists, the assets recoverable amount is estimated and impairment losses are recognized in theprofit and loss account.


21

e) Stores and spares with respect to provision for obsolescence and slow moving items

The estimates of slow moving and obsolete stores, spare parts and loose tools, are made, using and appropriatelyjudging the relevant inputs and applying the parameters, as the management considers appropriate, which, on actualoccurrence of the subsequent event, may fluctuate. The effects of variation is given as and when it takes place.

f) Trade debts

The Company reviews its doubtful trade debts at each reporting date to assess whether provision should be recordedin the profit and loss account. In particular, judgement by managment is required in the estimation of the irrecoverableamount and timing of future cash flow when determining the level of provision required. Such estimates are based onassumptions about a number of factors and actual results may differ, resulting in future changes to the provision.

4 Accounting Standards

4.1 Changes in disclosures and accounting policies

There are certain new standards, interpretations and amendments to published approved accounting standardsthat are mandatory for accounting periods beginning on or before January 01, 2010 but considered not to berelevant or to have any significant effect on the company's operations and are therefore, not disclosed in thesefinancial statements.

4.2 Accounting Standards issued but not yet effective for the current financial year

The following revised standards and interpretations with respect to approved accounting standards as applicablein Pakistan would be effective from the dates mentioned below against the respective revised standards orinterpretations:

Standard or Interpretation Effective dates (accounting periodbeginning on or after)

IAS-1 Presentation of Financial Statement- Amendments to revise the

way other comprehensive income is presensted July 1, 2012

IFRS-7 Financial Instruments: Disclosures- Amendments enhancing

disclosures about transfer of financial assets July 1, 2011

IAS-12 Income Tax (Amendment)- Deferred Taxes: Recovery of underlying Assets January 1, 2012

IAS-19 Employee Benefits- Amended Standards resulting from the Post

Employment Benefits and Termination Benefits Projects January 1, 2013

IAS-24 Related Party Disclosure (Revised) January 1, 2011

IFRIC-14 Prepayment of minimum Funding Requirement (Amendment) January 1, 2011

IFRIC-15 Agreement for Construction of Real Estate

IFRIC-16 Hedges of a Net Investment in a Foreign Operation

IFRIC-17 Distributions of Non-cash Assets to Owners

IFRIC-18 Transfer of Assets from Customers

The Company expects that the adoption of the above revision, amendments and interpretations of the standardswill not have any material impact on the Company's financial statements in the period of initial application exceptcertain additional disclosures.

In addition to the above, amendments to various accounting standards have also been issued by IASB. Suchimprovements are generally effective for accounting periods beginning on or after 1 January 2011. The Companyexpects that the such improvements of the standards will not have any material impact on the Company's financialstatements in the period of initial application.

Further, the following new standards have been issued by IASB which are yet to be notified by the Securities andExchange Commission of Pakistan for the purpose of applicability in Pakistan.


22

5. SIGNIFICANT ACCOUNTING POLICIES

The Principal accounting policies adopted are set out below

5.1 Accounting Convention

These financial statements have been prepared under " historical cost convention" except for revaluation ofcertain property, plant and equipments, long term investment and financial instruments.

5.2 Employees post employment benefits

5.2.1 Defined Contribution Plan

The Company operates an approved provident fund scheme for all its employees eligible to the benefit andequal monthly contributions thereto are made both by the Company and the employees in accordance with theterms of the scheme @ 10% on basic plus applicable cost of living allowances.

5.2.2 Defined Benefit Plan

The Company was operating unfunded gratuity scheme covering all its permanent employees eligible to thebenefit under the scheme. However, in accordance with the award of Labour Court No. 6, Hyderabad the schemehas been discontinued effective from October 1, 2004 and balance amount have been shown under "trade andother Payable".

5.3 Compensated unavailed leaves

The Company accounts for its liability towards unavailed leaves accumulated by employees on accrual basis.

5.4 Taxation

a) Current

The charge for current taxation is based on taxable income at the current rate of taxation after taking into accountapplicable tax credits, rebates and exemptions available, if any, or one percent of total turnover under section113 of the Income Tax Ordinance, 2001 whichever is higher. The Company falls under the final tax regime undersection 154 and 169 of the Income Tax Ordinance, 2001 to the extent of direct export sales.

b) Deferred

Deferred tax is recognized using the balance sheet liability method, on all temporary differences at the balancesheet date between the tax base of assets and liabilities and their carrying values for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognizedfor all deductible temporary differences to the extent that it is probable that the deductible temporary differenceswill reverse in the future and sufficient taxable income will be available against which the deductible temporarydifferences can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that therelated tax benefit will be utilized.

Deferred income tax assets and liabilities are measured at the tax rate that is expected to apply to the periodwhen the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted orsubstantively enacted at the balance sheet date. In this regard, the effects on deferred taxation of the portionof income expected to be subject to final tax regime is adjusted in accordance with the requirement of AccountingTechnical Release - 27 of the Institute of Chartered Accountants of Pakistan (ICAP), if considered material.

Standard or Interpretation IASB Effective dates (annualperiod beginning on or after)

IFRS-9 Financial Instruments January 1, 2015

IFRS-10 Consolidated Financial Statements January 1, 2013

IFRS-11 Joint Arrangements January 1, 2013

IFRS-12 Disclosure of Interest in Other Entities January 1, 2013

IFRS-13 Fair Value Measurement January 1, 2013


23

c) Sales tax

Revenues, expenses and assets are recognized net off amount of sales tax except:

i) Where sales tax incurred on a purchase of asset or service is not recoverable from the taxation authority,in which case the sales tax is recognized as part of the cost of acquisition of the asset or as part of theexpense item as applicable; and

ii) Receivables or payables that are stated with the amount of sales tax included.

iii) The net amount of sales tax recoverable from, or payable to, the taxation authority is included as partof receivables or payables in the balance sheet.

5.5 Property Plant & Equipments

Owned

Operating fixed assets except furniture, fixture & fittings and vehicles are stated at revalued amounts. Furniturefixture & fittings and vehicles are stated at cost.

Depreciation on addition including assets after revaluations is charged from the quarter in which the assets areput to use while no Depreciation is charged in the quarter in which the assets are disposed off. Depreciationis charged to income applying the reducing balance method at the rates specified in assets note no. 6.1 .

Maintenance and normal repairs are charged to income as and when incurred, major renewals and improvementsare capitalized and the assets so replaced, if any, are retired.

In accordance with the Section 235 of the Companies Ordinance, 1984 an amount equal to the incrementaldepreciation charged on assets after revaluation has been transferred from the surplus on revaluation of fixedassets to accumulated loss / profit in the current year through Statement of changes in equity. Consequentlyincremental depreciation charged for the period on revalued assets is transferred from surplus on revaluationof fixed assets to accumulated loss/unappropriated profit as the case may be during the current year as referredto in note no. 6.1 of these financial statements.

Gain or loss on disposal of property, plant and equipment is taken to profit and loss account.

The carrying value of fixed assets are reviewed for impairment when events or changes in circumstances indicatethat the carrying values may not be recoverable. If such indications exist and where the carrying values exceedthe estimated recoverable amounts, the assets are written down to the recoverable amount.

5.6 Capital work-in-progress

All cost/expenditures connected with specific assets incurred during the implementation period are carried underthis head. These are transferred to specific assets as and when assets are available for intended use.

5.7 Borrowings and their costs

Borrowings are recorded at the proceeds received.

Borrowing costs incurred on finances obtained for the construction/installation of qualifying assets are capitalizedup to date the respective assets are available for the intended use. All other mark-up, interest and other relatedcharges are taken to the profit and loss account currently.

5.8 Investment in Associates

The Investment in associates is accounted for under equity method. Under this method, the investment is initiallyrecognized at cost and the carrying amount is increased or decreased to recognize the Company's share ofthe profit or loss of the investee after the date of acquisition which is recognized in the profit and loss account.Dividend received, if any, reduces the carrying amount of investment. Changes in associate's equity includingthose arising from the revaluation of property, plant and equipment are recognized directly in the Company'sequity in proportion of the equity held.

Break-up value / equity has been determined on the basis of latest audited financial statements as of June 30,2011 of that un-listed company.

Investment is de-recognized when the Company has transferred substantially all risks and rewards of ownershipand rights to receive cash flows from the investment has expired or has been transferred.


24

5.9 Impairment of assets

All Company's assets are reviewed at each financial year end to determine whether there is objective evidenceof impairment. If any such indication exists, the assets recoverable amount is estimated and carrying amountsare adjusted accordingly. Impairment losses are recognized in the profit and loss account.

5.10 Trade Debts

Trade debts are initially recognized at fair value and subsequently measured at cost less provision for doubtfuldebts. A provision for doubtful debt is established when there is objective evidence that the Company will notbe able to collect amount due according to the original terms of the debts. Significant financial difficulties of thedebtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquencyin making payments are considered indicators that the trade debt is doubtful and the provision recognized inthe profit and loss account. When a trade debt is uncollectable, it is written off.

5.11 Provisions

A provision is recognized when the Company has a legal or constructive obligation as a result of a past event,if it is probable that an out flow of resources embodying economic benefits will be required to settle the obligationand a reliable estimate can be made of the amount of obligation.

5.12 Cash and Cash Equivalents

For the purpose of cash flow statement, cash and cash equivalents comprise cash and bank balances.

5.13 Stores, Spare parts and Loose Tools

Stores, spare parts and loose tools are valued at cost, using first-in-first-out (FIFO) method. Items in transit arevalued at cost comprising invoice value and other charges paid thereon. Adequate provision is made forobsolescence and slow moving items as and when required based on parameters set out by management.

5.14 Stock-in-Trade

These are stated at lower of weighted average cost and net realisable value.

Cost in relation to semi finished goods and finished goods represents cost of raw material and an appropriateportion of manufacturing overheads. Cost in respect of semi finished goods is adjusted to an appropriate stageof completion of process.

Cost in relation to stock of molasses held by Distillery Division is valued at moving average cost.

Net realizable value signifies the estimated selling price in the ordinary course of business less the estimatedcost of completion and the estimated costs necessary to make the sale.

5.15 Foreign currency transactions and translation:

Transactions in foreign currencies are translated into reporting currency at the rates of exchange prevailing onthe date of transactions. Monetary assets and liabilities denominated in foreign currencies are translated intoreporting currency using year-end spot foreign exchange rates and in case of forward contracts at the committedrates. Non-monetary assets and liabilities are translated using exchange rates that existed when the valueswere determined. Exchange differences on foreign currency translations are included in profit and loss account.

5.16 Financial Instruments

All the financial assets and liabilities are recognized at the time when the company becomes a party to thecontractual provisions of the instrument. All the financial assets are derecognized at the time when the Companyloses control of the contractual right that comprise the financial assets. All financial liabilities are derecognizedat the time when they are extinguished that is, when the obligation specified in the contract is discharged,cancelled or expires. Any gain or loss on derecognition of the financial assets and financial liabilities are takento profit and loss account.


25

5.17 Derivative Financial Instruments

The Company enters into derivative financial instruments such as agreements for interest rate and cross currencyswap to hedge the risk associated with interest and exchange rate fluctuations. Such derivative financialinstruments are initially recognized at fair value on the date on which a derivative contract is entered into andare subsequently measured at fair value. Derivatives are carried as assets when the fair value is positive andas liabilities when the fair value is negative on the balance sheet date. Any gain or losses arising from changein fair value of derivatives that do not qualify for hedge accounting are taken directly to profit and loss account.

5.18 Offsetting of Financial Assets and Liabilities

Financial assets and financial liabilities are only offset and the net amount reported in the statement of assetsand liabilities when there is a legally enforceable right to set off the recognized amount and the Company intendsto either settle on a net basis, or to realize the asset and settle the liability simultaneously.

5.19 Segment Reporting

Primary segment reporting format:

The Company has following reportable segments on the basis of product characteristics and the criteria definedby the "IFRS 8 Segment Reporting".

Sugar Division - Manufacturing and sale of Refined Sugar

Distillery Division - Manufacturing and sale of Ethyl Ethanol.

5.20 Revenue Recognition

Revenue is recognized to the extent it is probable that the economic benefits will flow to the company and therevenue can be measured reliably. Revenue is measured at the fair value of the consideration received orreceivable, excluding discounts, rebates and government levies. The following recognition criteria must beadopted before revenue is recognized.

* Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goodshave passed to the buyer, usually on dispatch of the goods to customers.

* Return on bank deposits is recognized on a time proportion basis on the principal amount outstanding andthe rate applicable.

* Mark-up on grower loan is accounted for in line with the recovery of the respective loan due to exigenciesinvolved in such matters. Recognition of markup on loans considered doubtful is deferred.

5.21 Dividends and other appropriations

Dividend and appropriation to reserves are recognized in the financial statements in the period in which theseare approved.

Note

2011 2010


6. PROPERTY, PLANT AND EQUIPMENT

OPERATING ASSETS 6.1 1,933,173 1,836,465

CAPITAL WORK IN PROGRESS 6.2 111,568 121,523

2,044,741 1,957,988


26

NET C

ARRYIN

G

VALU

EAD

DIT

ION

STR

AN

SFE

R

AT N

BV

DIS

POSA

LD

EPR

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TI

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FREE H

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LAN

DCos

t2,

140

29,4

35-

--

31,5

7531

,575

-31

,575

0%Rev

alua

tion

69,9

20-

--

69,9

2069

,920

-69

,920

0%

FACTO

RY B

UIL

DIN

GCos

t36

,542

7,05

9-

-4,

122

39,4

7995

,110

55,6

3139

,479

10%

Rev

alua

tion

23,8

982,

390

21,5

0833

,220

11,7

1221

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NO

N F

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DIN

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t49

,870

7,32

7-

-2,

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54,5

2589

,941

35,4

1654

,525

5%Rev

alua

tion

70,2

88-

-3,

515

66,7

7388

,990

22,2

1766

,773

5%

RES Q

TR

FO

R L

ABO

UR

Cos

t4,

339

677

--

455

4,56

127

,139

22,5

784,

561

10%

Rev

alua

tion

7,22

872

36,

505

12,6

956,

190

6,50

510

%

PLAN

T &

MACH

INERY

Cos

t1,

080,

597

144,

773

--

59,5

021,

165,

868

1,95

9,29

279

3,92

71,

165,

868

5%Rev

alua

tion

467,

625

--

23,4

0744

4,21

864

1,21

219

6,49

144

4,21

85%

FURN

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RE, FI

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RE A

ND

FITT

ING

SCos

t1,

754

399

--

205

1,94

86,

658

4,71

01,

948

10%

OFF

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QU

IPM

EN

TCos

t10

,299

3,65

5-

-1,

280

12,6

7426

,116

13,4

4212

,674

10%

Rev

alua

tion

2,26

0-

--

226

2,03

44,

786

2,75

22,

034

10%

VEH

ICLE

SCos

t9,

705

4,38

1-

242,

477

11,5

8526

,592

15,0

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,585

20%

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t1,

195,

246

197,

706

-24

70,7

131,

322,

215

2,26

2,42

394

0,71

11,

322,

215

Rev

alua

tion

641,

219

--

-30

,261

610,

958

850,

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239,

362

610,

958

1,83

6,46

519

7,70

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0,97

41,

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173

3,11

3,24

61,

180,

073

1,93

3,17

3

DEPR

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RATE P

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PARTIC

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2010

As

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During

the

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27

NET C

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G

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BV

DIS

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--

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140

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140

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69,9

20-

--

69,9

2069

,920

-69

,920

0%

FACTO

RY B

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DIN

GCos

t40

,479

--

-3,

937

36,5

4288

,051

51,5

0936

,542

10%

Rev

alua

tion

26,5

022,

604

23,8

9833

,220

9,32

223

,898

10%

NO

N F

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DIN

GCos

t51

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28

SUGAR TOTALDISTILLERY

2011

SUGAR TOTALDISTILLERY

2010

Manufacturing 52,147 37,275 89,422 53,446 33,414 86,860Administration and Selling 8,789 2,763 11,552 8,357 2,712 11,069

Total 60,936 40,038 100,974 61,803 36,126 97,929

6.1.3 The Company has revalued its fixed assets, carried out by Messrs Sipra & Company in September 30,2009.

6.1.2 Depreciation has been allocated as follows:

6.1.4 DISPOSAL OF FIXED ASSETS

Description Original Accumulated Sale Profit on Mode of Sold to

Cost Depreciation W.D.V. proceeds Disposal Disposal

Suzuki Khyber 355 331 24 160 136 by Negotiation Mr. Attiqu RehmanABU-824 Model 1998 House # B35 Gulshan-e-Halli

Hyderabad

355 331 24 160 136 -

2010 524 503 21 346 325

2011

6.2 CAPITAL WORK-IN-PROGRESS

Civil Works

Under Construction 1,941 26,087 11,132 16,896 5,666 1,941 5,666 1,941 1,941 26,087 11,132 16,896 5,666 1,941 5,666 1,941

Plant & Machinery

Plant & Machineryunder errection-Owned 119,582 89,681 144,591 64,672 52,794 129,270 62,482 119,582 Leased 6.2.1 - 30,000 - 30,000 - - - -

119,582 119,681 144,591 94,672 52,794 129,270 62,482 119,582 121,523 145,768 155,723 111,568 58,460 131,211 68,148 121,523

Balanceas on

01-10-2008

Additionduring

the year

Balanceas on

30-09-2010

Capitalized

2010

Balanceas on

01-10-2010

Additionduring

the year

Balanceas on

30-09-2011

Capitalized

2011

6.2.1 Addition during the year includes borrowing cost of Rs 2.4 million ( 2010: Nil)


29

7. LONG TERM INVESTMENT

In related party - Available for SaleAl-Noor Modaraba Management (Pvt.) Ltd. 7.1 4,601 4,598 Less: Unrealized (loss)/profit on re-measurement of investment of associate 7.2 (1,968) 391

2,633 4,989 Share of profit/(loss) 276 (388)

2,909 4,601

7.1 500,000 (2010 :500,000) fully paid ordinary shares of Rs.10 each Equity held 14.285% (2010 : 14.285%)Break-up value Rs. 5.82 (2010 : Rs. 9.20) Chief Executive Mr.Jalaluddin Ahmed

7.2 Unrealized loss on re-measurement of investment

Opening balance 13 404 Unrealized profit/(loss) on re-measurement of investment 1,969 (391)Closing balance 1,982 13

7.3 The Company's interest in assets and liabilities ofAl- Noor Modaraba Mangement (Pvt.) Ltd. is as follows:

Tangible Fixed assets 1,542 1,162 Long Term Investments 20,110 33,929 Other long term assets 24 773 Current assets 7,233 4,141

28,909 40,005 Long term liabilities 620 7,360 Current liabilities 7,926 436

8,546 7,796 Net Assets 20,363 32,209

7.4 The Company's share in profit and loss of Al-Noor ModarabaManagememt (Pvt.) Ltd. is as follows:

Income 6,040 3,027 Expenses (4,031) (3,520)

2,009 (493)Loss on remeasurement & impairment loss on investment (132) (2,434)Share of profit from associates 283 193 Profit/ (loss) for the year before taxation 2,160 (2,734)Taxation (276) (29)Profit/ (loss) for the year after taxation 1,884 (2,763)Share of associate incremental depreciation on revaluation of investment 49 47

1,933 (2,716)8. LONG TERM DEPOSITS

Guarantee margin 533 533 Security deposits 2,175 2,037

2,708 2,570

Note

2011 2010


Restated


30

9. LONG TERM LOANS- UNSECURED AND INTEREST FREE

Considered Good - Due from executives 9.2 2,162 1,527 - Due from non- executive employees 1,561 488

3,723 2,015

Less: Current Portion of: - Due from executives (783) (969)

- Due from non- executive employees (764) (395) (1,547) (1,364) 2,176 651

9.1 Loans and advances have been given in accordance withthe terms of employment and are repayable in monthly installments.

9.2 Reconciliation of carrying amount of loans to executives

Balance at the beginning of the year 1,527 1,891 Disbursement during the year 1,617 1,168 Repayment during the year (982) (1,532)Balance at the end of the year 2,162 1,527

10. STORES, SPARE PARTS AND LOOSE TOOLS

Stores 52,437 39,829 Spare Parts 129,409 115,219 Stores and spare parts in transit 1,794 15,858

183,640 170,906 Less: Provision for obsolescence and slow moving 10.1 (12,729) (10,587)

170,911 160,319

10.1 Opening Balance 10,587 9,581

Provision for the year 2,142 1,006 Closing balance 12,729 10,587

11. STOCK IN TRADE

Work-in-processSugar 6,589 10,052

Raw Material Molasses 635,842 337,730

Finished goods

Sugar 11.1 1,730,484 481,308 Ethanol 123,599 125,403

1,854,083 606,711 2,496,514 954,493

11.1 Stock of finished goods are pledged against short term running finances under markup arrangement as referredin note No. 25 amounting to Rs. 772.515 million.(2010:195.44 million) and under Murabaha arrangement asreferred in Note No. 23.1 amounting to Rs 134.6 million.

Note

2011 2010



31

Note

2011 2010


12. TRADE DEBTS

Export - Secured against L/C. 15 15 Local - Unsecured, considered good - 717

15 732

13. LOANS AND ADVANCES - (UNSECURED) CONSIDERED GOOD

Current portion of long term loans 1,547 1,364 Advances to Employees-other than executives, Director and Chief executives 1,258 2,464

2,805 3,828

Advances against expenses 1,834 1,836 Advances against purchases and services 77,343 98,290

79,177 100,126

Loan to Growers 13.1 45,653 95,357 45,653 95,357

127,635 199,311 13.1 Loan to Growers

Considered good 45,653 95,357 Considered doubtful 21,731 18,681

67,384 114,038 Less Provision for doubtful debtsAs at October 1, 18,681 16,578 Provision for the year 3,050 2,103

21,731 18,681 45,653 95,357

13.2 These carry Markup at the rate of 10% per annum on chargeable annually.

14. OTHER RECEIVABLES

Transportation contractors 13,284 13,497Insurance Claim receivable from related party 14.1 3,496 1,700Others 2,721 215

19,501 15,412

14.1 These claims are receivable from M/s Reliance Insurance Co a related party. The maximum aggregate amountdue from related party at the end of any month during the year was Rs. 3.496 million

15. CASH AND BANK BALANCES

Cash in hand 455 129 Cash at banksIn current accounts 12,397 14,411

12,852 14,540


32

18. SURPLUS ON REVALUATION OF PROPERTY, PLANT & EQUIPMENTS

This represents surplus over book values resulting from the revaluation of fixed assets lastly carried out by MessrsSipra & Company on September 30, 2009 (see note no.6). The details are as under:

Surplus on revaluation as at October 01, 473,701 496,561

Incremental depreciation for the year - net of deferred taxation (21,715) (22,860)

Surplus on revaluation as at September 30, 451,986 473,701

19. LONG TERM FINANCING

Banks / Financial Institutions / Sukuk 19.1 662,357 510,166 662,357 510,166

2011 2010

(Rupees in thousand)Note

11,730,368 11,730,368 Ordinary shares of Rs.10 each allottedfor consideration paid up in cash 117,304 117,304

9,388,295 9,388,295 Ordinary shares of Rs.10 each allotted as bonus shares 93,883 93,883

21,118,663 21,118,663 211,187 211,187

Associated companies hold 4,016,104 (19.01%) shares in the Company.

16 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

2011 2010

No. of Shares

17. GENERAL RESERVE

This represents amount appropriated out of profit in past years and retained in order to meet future exigencies


33

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34

2011 2010


20. LOANS FROM RELATED PARTIES

Directors and Associates 230,855 230,855

The directors have given their consent to certain term borrowers that the balance due to them and their associateswill not be reduced below Rs. 229.802 million till the improvement in equity or achievement of leverage of 3.5 x 1.

21. LIABILITIES AGAINST ASSETSSUBJECT TO FINANCE LEASE

Future minimum lease payaments under finance lease and the present value of the net minimum lease paymentsare as follows:

Within one year 10,519 6,315 After one year but not more than five years 26,298 20,901 - -Total minimum lease payments 36,817 27,216 - -Less : Amount representing finance charges 9,601 - -Present value of minimum lease payments 27,216 27,216 - -Less : Current portion 6,315

20,901 27,216 - -.

This represents finance lease entered into with leasing companies for plant and machinery. Rates of finance chargesis 6 months Kibor+3% (2010:Nil)

The company enjoys the option to purchase the leased assets upon completion of the leased period.

These are secured against demand promissory notes.

22. DEFERRED TAXATION

Opening Balance 173,525 182,822Reversal during the year (45,161) (9,297)Closing Balance 22.1.1 128,364 173,525

22.1.1 Deferred taxation comprises of:

Deferred tax liabilities arising in respect of

Accelerated tax depreciation 150,995 109,894Revaluation of property, plant & equipment 158,972 167,516

309,967 277,410Deferred tax assets arising in respect of

Provision for Doubtful grower loan (7,606) (5,035)Provision for slow moving items and obsolescence (4,455) (2,853)Provision for Gratuity (675) (533)Provision for Leave Encashment (513) (441)Unabsorbed tax loss/depreciation (168,354) (95,023)

(181,603) (103,885) 128,364 173,525

Minimum Minimumlease Present lease Present

payments Value payments Value

------- 2010 -------------- 2011 -------

-----------------(Rupees in thousand)--------------


35

23. TRADE AND OTHER PAYABLES

Creditors - Related Parties 902 1,836Creditors - Others 32,048 38,813Murabaha 23.1 254,690 120,000Accrued expenses 10,007 7,551Advance against Sales from customers 1,049,374 185,243Gratuity payable 1,930 1,976Worker's profit participation fund 23.2 5,728 5,572Worker's Welfare Fund 8,942 7,025Security Deposit 182 85Unclaimed dividends 1,016 873Others- FED & SED 18,096 24,304

1,382,915 393,278

23.1 The murabaha arrangements are for an amount upto Rs. 575 million (2010: Rs 425 million) . The effectiverates of profit is 6M Kibor+1.50 to 2% (2010: 6M Kibor+1.75 to 2% ). The unavailed facility at the year endis Rs. 320.4 million

Securities:1st pari passu hypothecation charge on Property Plant & Equipment & Pledge of Sugar.

23.2 Worker's profit participation fundBalance at start 5,572 6,991Add:Allocation for the year 5,046 4,838Interest due on fund utilized in the Company's businessshown under finance cost 34. 682 734

5,728 5,572Less:Paid to Trustee 5,572 6,991Balance at Close 5,728 5,572

24. ACCRUED MARK-UP / INTEREST Long term financing 14,251 10,769Finance lease 36 -Short term Borrowings 51,124 32,616

65,411 43,38525. SHORT TERM BORROWINGS

SecuredCommercial Banks 25.1 407,197 357,549Export refinance 25.2 840,000 410,000

1,247,197 767,549

25.1 Cash Finance/ Running Finance facilities available are upto Rs. 2.465 million (2010: Rs.1,915 million). Theeffective rate of markup ranges between 1M/3M/6M kibor+1.5% to 4% (2010: 1M kibor/3M kibor+1.75% to6M kibor+3.5%. Unavailed facilites as on balance sheet date is Rs. 2,057.8 million (2010: Rs. 1,557 million).

SecuritiesPledge of Sugar/Molasses/Ethanol and First pari passu charge on fixed assets.

25.2 These finance facilities are available from commercial banks under SBP Export Finance Scheme. The totallimit is Rs. 840 Million (2010 Rs.440 Million). The effective rate of Mark-up is 1% over SBP ERF Rate whichis 10% (2010: 1% over SBP ERF Rate). Unavailed facilites as on balance sheet date is Rs. Nil ( 2010: Rs30 million).

SecuritiesHypothecation charge on stock of ethanol, receivables and current assets. First pari passu equitable mortgagecharge over current and future fixed assets of the company.

2011 2010



2011 2010


36

26. CURRENT PORTION OF LONG TERM FINANCING

AND FINANCE LEASE

Long term financing 19. 164,714 282,167Liabilities against assets subject to finance lease 21. 6,315 -

171,029 282,167

27. CONTINGENCIES AND COMMITMENTS

a) CONTINGENCIES

27.1 A demand of Rs.4.629 million in respect of sales tax on in house use of baggase as fuel was raised by theCollectorate of Sales Tax, Hyderabad. The Company has disputed the liability and had filed an appeal beforethe Appellate Tribunal Karachi. The Appellate Tribunal has remanded back the case to the department of salestax with a direction to compute the sales value and the sales tax payable thereon correctly after providingproper opportunity to the parties. The Sales Tax Tribunal has also directed the department to consider thefact that there was no deliberate or willful attempt to defraud the revenue therefore, the additional tax liabilitymay be uncalled for. However, to avail of relief from levy of additional tax, as provided through SRO 1349(1)99 dated 17th December,1999, the Company had to pay a total amount of Rs. 8.818 million including additionaltax of Rs.4.190 million upto in December,1999.

The adjudicating authority has conducted the proceedings on remanded back case of the Tribunal andmaintained its previous order. The Company had filed an appeal before Collector Appeals which was decidedagainst the company. The company has filed an appeal before the Appellate Tribunal. However the companyhas provided for the contingency for the amount of sales tax and additional tax already paid through theaforesaid SRO.

27.2 The Company filed petition before Honorable High Court of Sindh challenging the levy of further tax againsttaxable supplies made to persons other than registered person under section 3(1A) of the Sales Tax Act,1990. However, the entire liability till November 30, 2000 was paid by the Company, in the month of December2000 as per judgment awarded against the department by the Honorable High Court of Sindh. Accordinglythe Company has claimed refund of such further tax amounting to Rs. 45.190 million out of which an amountof Rs.7.144 million has been refunded by the department.

The Department of Sales Tax has filed an Appeal before the hon'ble Supreme Court against the Order of theHigh Court of Sindh. The hon'ble Supreme Court has allowed the Appeal with direction to the department toact in accordance with law. The Company is of the view that the hon'ble Supreme Court has allowed theAppeal however ratio-decidendi ordered by the High Court of Sindh has not been reversed, over ruled oramended. The Company is therefore of the view that the final outcome of the matter will be in favor of theCompany. Subsequently, the definition of registered person for the purpose of sales Tax was amended in June2002. Accordingly Sales Tax department has raised a demand of further tax, which has been contested bythe company in the light of Sindh High Court Judgment. Tribunal has issued order in favour of the company.Departement appealed against the orders of Tribunal are pending at Sindh High Court and Supreme Courtof Pakistan.

27.3 The Company has filed a petition before the Honorable High Court of Sindh against the imposition ofspecial excise duty. The Honorable High Court has issued stay order for the recovery of 70% of the totalamount of Rs 7.073 million against excise duty involved. The Company has however as a matter of abudentprecaution has provided for the amount of said duty in these accounts.


37

27.4 The Company�s appeal in the Honorable Supreme Court against the Order of the Sindh High Court for levyof Quality Premium has been accepted by the hon'ble Supreme Court by assailing the Order of Sindh HighCourt. Accordingly, no provision has been made in the books of accounts amounting to Rs. 86.670.million,as the matter is pending in the hon'ble Supreme Court and as per decision of federal government, steeringcommittee held on 16-07-2007, the quality premium shall remain suspended till decision of hon'ble SupremeCourt/consensus on uniform formula is developed in MINFAL.

27.5 There are certain litigations pending in the sixth Sindh Labour Court pertaining to ex-employees. The sixthSindh labour court awarded decision in favour of company and the ex-employees filed an appeal in LabourAppellate Tribunal at Hyderabad the outcome of which is pending. The financial liability may arise only if thesecases are finally decided against the Company. The amount of liability is not ascertainable and hence, noprovision has been made in this regard as in the mangement view the same is not likely to crystalze.

27.6 Cases regarding possession of land of the Company are pending in the Hon'ble High Court of Sindh wherethe matter is pending for hearing. The financial impact of the same is not presently determinable with anyaccuracy. The Company is confident that the same is not likely to be decided against the Company.

27.7 The Company has filed a petition in the Honourable Supreme Court of Pakistan against a show cause noticeissued by Competition Commission of Pakistan (CCP), challenging the jurisdiction of the CompetitionCommission. The Honourable Supreme Court of Pakistan has disposed the petition on the ground that thismatter is already under proceedings with Honorable High Courts and refrained CCP from passing any final /penal order till a final decision is achieved at Honourable High Courts. Therefore, there are no financialimplications related to this at the moment.

27.8 The Company has filed a suit before the Honourable High Court of Sindh against Pakistan Standards andQuality Control Authority (the Authority) challenging the levy of marking fee under PSQCA Act-VI of 1996. TheAuthority has demanded a fee payment @ 0.1% of ex-factory price for the year 2008-09 amounting to Rs.1.45 million. The Company is of the view that demand notifications so raised are without any lawful authorityunder the PSQCA Act-VI of 1996 and are violation of the constitution. The Honourable High Court of Sindhhas accepted the petition and termed that the impugned notification have been issued without lawful authorityand suspended the operation of the impugned notifications. The matter is pending for hearing before theHonarable High court of Sindh. No provisions has been made in this regard since the management is confidentthat the outcome would be in Company's favour as the amount is insignificant and is not likely to materialize.

27.9 The Income Tax Department has filed an appeal before the honorable Appellate Tribunal Inland Revenueagainst order passed by the Appellate Commission relevant to accounting year ended on September 30, 2009in respect of admissibility of certain expenses involving tax impact of Rs.Nil. In view of decision of the AppellateCommissioner Inland Revenue and the legal position emerged. The Company is expecting that the order ofAppellate Commissioner Inland Revenue will also be upheld by the Income Tax Appellate Tribunal InlandRevenue. Furthermore, Company has also computed the tax liability for the years ended September 30, 2010 andSeptember 30, 2011 on the basis decided by the Appellate Commissioner Inland revenue which has a taximpact of Rs. 50,267 million.

b) COMMITMENTS

The Company's commitment as on September 30, 2011 are as follows:

Letter of Credit for stores and spares 36,771 24,724


SalesLocal 2,651,938 3,259,360 5,220 - 2,657,158 3,259,360Export - - 1,889,235 1,336,833 1,889,235 1,336,833

2,651,938 3,259,360 1,894,455 1,336,833 4,546,393 4,596,193Sales tax 77,174 134,640 752 - 77,926 134,640Special Excise Duty 75,423 16,830 44 - 75,467 16,830Brokerage and Commission 407 583 510 3,283 917 3,866

153,004 152,053 1,306 3,283 154,310 155,336Net sales 2,498,934 3,107,307 1,893,148 1,333,549 4,392,083 4,440,856

Cost of goods sold 29. 2,087,087 2,749,423 1,550,647 1,109,144 3,637,734 3,858,567

Gross Profit 411,847 357,884 342,501 224,405 754,349 582,289

Distribution Cost 30. 4,282 3,396 82,692 61,281 86,974 64,677Administrative Expenses 31. 85,894 85,485 23,654 19,856 109,548 105,341

90,176 88,881 106,346 81,137 196,522 170,018

Operating Profit (Excluding other charges and other income) 321,671 269,003 236,155 143,268 557,827 412,271

28.1 Segment Assets 2,782,339 2,013,231 1,996,849 1,225,431 4,779,188 3,238,662Unallocated Assets 101,495 72,060

28.2 Segment Liabilities 2,269,498 1,501,670 1,651,082 915,578 3,920,580 2,417,248

28.3 Capital expenditure 65,708 33,620 122,043 103,636 187,751 137,256

28.4 Depreciation 60,936 61,803 40,038 36,126 100,974 97,929

29. COST OF GOODS SOLD

Opening stock of finished goods 481,308 536,289 125,403 159,323 606,711 695,612

Manufacturing cost:

Opening stock of work in process 10,052 5,974 - - 10,052 5,974Raw material consumed 3,346,990 2,711,462 1,387,302 929,194 4,734,292 3,640,656Salaries, wages and benefits 29.1 53,701 42,292 11,166 9,051 64,867 51,343Stores and spares consumed 67,945 52,203 29,130 15,626 97,075 67,829Packing materials 22,614 15,721 4,224 17,200 26,838 32,921Fuel and oil 11,040 9,718 42,831 42,049 53,871 51,767Power and water 15,446 13,161 3,413 4,871 18,859 18,032Chemicals and process materials 15,252 10,842 13,713 7,612 28,965 18,454Repair and maintenance 22,530 19,025 10,892 9,695 33,422 28,720Insurance 8,195 5,940 3,919 2,746 12,114 8,686Other manufacturing expenses 14,707 6,917 4,978 5,466 19,685 12,383Cane development cess and surcharge 4,093 3,257 - - 4,093 3,257Education cess 2 - - - 2 -Depreciation 52,147 53,446 37,275 33,414 89,422 86,860

3,644,714 2,949,958 1,548,843 1,076,924 5,193,557 4,026,882Less: Closing stock of work in process 6,589 10,052 - - 6,589 10,052

3,638,125 2,939,906 1,548,843 1,076,924 5,186,968 4,016,830Less:Insurance Claim - - - 1,700 - 1,700Molasses transfer to Ethanol Division 299,088 244,349 - - 299,088 244,349Scrap Sales (Net of sales tax) 2,774 1,115 - - 2,774 1,115

301,862 245,464 - 1,700 301,862 247,164 3,336,263 2,694,442 1,548,843 1,075,224 4,885,106 3,769,666 3,817,571 3,230,731 1,674,246 1,234,547 5,491,817 4,465,278

Less: Closing stock of finished goods- Sugar/Ethanol 1,730,484 481,308 123,599 125,403 1,854,083 606,711

2,087,087 2,749,423 1,550,647 1,109,144 3,637,734 3,858,567

29.1 Includes Rs. 1.215 million (2010 : Rs. 3.59 million) in respect of contribution towards staff provident fund.

38

28. OPERATING RESULTS

Figures of sales, cost of goods sold, gross profit, administration and selling expenses and operating profit for businesssegments are as follows:

2011 2010 2011 2010 2011 2010

Note

TOTALDISTILLERYSUGAR

(Rupees in thousand) (Rupees in thousand)(Rupees in thousand)


39

30. DISTRIBUTION COST

Sugar Handling Charges 4,282 3,396 - - 4,282 3,396Storage Rent - - 18,250 12,705 18,250 12,705Carriage Out Ward - - 27,364 13,585 27,364 13,585Export Charges - - 17,822 16,701 17,822 16,701Other - - 19,256 18,290 19,256 18,290

4,282 3,396 82,692 61,281 86,974 64,677

2011 2010 2011 2010 2011 2010

Note

TOTALDISTILLERYSUGAR

(Rupees in thousand) (Rupees in thousand)(Rupees in thousand)

31. ADMINISTRATIVE EXPENSES

Salaries, wages and benefits 31.1 31,780 29,773 8,432 6,584 40,212 36,357Chief Executives and Director'sremuneration and perquisites 10,593 9,004 - - 10,593 9,004Staff welfare 4,042 5,394 2,747 2,116 6,789 7,510Repair and maintenance 3,928 3,616 1,851 1,564 5,779 5,180Legal and professional 2,399 3,256 - - 2,399 3,256Auditors' remuneration 31.2 746 603 - - 746 603Vehicle running 7,036 8,639 1,378 1,247 8,414 9,886Insurance 298 264 123 95 421 359Communication 1,070 863 325 322 1,395 1,185Entertainment 801 723 286 354 1,087 1,077Printing and stationery 751 756 372 349 1,123 1,105Fees and subscription 684 654 1,932 886 2,616 1,540Advertisement 166 126 108 - 274 126Depreciation 8,789 8,357 2,763 2,712 11,552 11,069Others 12,811 13,457 3,337 3,627 16,148 17,084

85,894 85,485 23,654 19,856 109,548 105,341

31.1 Includes Rs. 0.882 million (2010 : Rs. 0.247 million) in respect of contribution towards staff provident fund.

31.2 Auditors' remuneration

Hyder Bhimji & Co Statutory Audit 500 410 - - 500 410 Half yearly review 75 75 - - 75 75 CDC Certification - 8 - - 0 8 Corporate Governance 50 10 - - 50 10

625 503 - - 625 503Harron Zakaria & Co Cost Audit 100 100 - - 100 100A.D.Akhawala & Co -Provident Fund 21 - - - 21 -

746 603 - - 746 603

2011 2010


32. OTHER CHARGES

Charity and donation 32.1 1,968 742Exchange Loss on derivative 8,899 10,892Provision for doubtful loan to growers 3,050 2,103Provision for slow moving spares items 2,142 1,006Director meeting fees 39. 158 105Worker's profit participation fund 5,046 4,258Worker's Welfare Fund 1,917 1,618

23,180 20,724

32.1 None of the directors or their spouses had any interest in the above donee funds.


40

2011 2010


33. OTHER OPERATING INCOME

Income from financial AssetsExchange Gain -on export debtors 7,081 7,693Insurance Claim 3,496 1,000Interest on Grower Loan 4,560 7,566Profit on Bank Deposits 214 36

Income from non financial AssetsScrap Sale 294 -Profit on disposal of Property, Plant & Equipment 136 325

Income from other Provision written back 459 1,193

16,240 17,81334. FINANCE COST

Markup on:Long term financing 137,636 131,955Short term borrowings 257,209 164,710Export refinance 55,326 38,494

450,171 335,159Interest on:

Worker's profit participation fund 23.2 682 734Finance cost on assets held under finance lease - 86Bank charges 1,033 1,527Others 10,751 4,158

11,784 5,771 462,637 341,664

35. TAXATION

Current Year 35.1 43,970 44,357Deferred taxation

Current year 22.1.1 (130) (9,297)Prior year 22.1.1 (45,031) -

(45,161) (9,297) (1,191) 35,060

35.1 In view of available tax losses/depreciation, the provision for current taxation represents minimum tax beingthe turnover tax under Section 113 of the Income Tax Ordinance, 2001., hence tax reconciliation of tax expensewith accounting profit is not presented.

36. EARNING PER SHARE - BASIC

36.1 Profit after taxation before the effect of reversal ofincremental depreciation due to revalued fixed assets Rs '000 89,717 32,248

Weighted average number of ordinary shares Number 21,118,663 21,118,663

Earning per share Rs 4.25 1.53

36.2 Profit after taxation after the effect of reversal of incremental depreciation due to revalued fixed assets 111,432 55,108

Weighted average number of ordinary shares 21,118,663 21,118,663

Earning per share 5.28 2.61

There is no dilutive effect on the basic earning per share.


41

37. TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS

37.1 The related parties includes associates,executives being the key management personnel and post employmentcontribution plan. The company in the normal course of business carries out transcations with various relatedparties. Amount due from and to related parties are shown under receivables and payables, and remunerationof executives and directors and key management personnel is disclosed in note.39. Other significant transcationswith related parties are as follow:

39. CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES REMUNERATION

The aggregate amount charged in the accounts of the year for remuneration including all benefits to Chief Executive,Director and Executives of the Company were as follows:

i. The Chief Executive, Directors and Executives are provided with free use of company's cars.ii. Meeting fee paid to 9 Directors (2010 : 9 Directors).iii. Reimbursable expenses paid to non-executive directors amounted to Rs. Nil (2010 : Rs. 0.110 million).

Chief Executive Directors Executives

2011 2010 2011 2010 2011 2010 2011 2010

Meeting fee 15 10 143 95 158 105

Remuneration 3,476 2,897 2,840 2,366 10,937 6,770 17,253 12,033

Provident fund - - - - 780 496 780 496

Perquisite (including house -rent and bonus) 1,738 1,448 1,420 1,183 14,982 9,220 18,140 11,851

Reimbursable expenses -including traveling expenses 387 436 732 674 - - 1,119 1,110

5,616 4,791 5,135 4,318 26,699 16,486 37,450 25,595

Number of persons 1 1 1 1 16 10

Total

2011 2010


Purchase of Goods 338,931 298,456Insurance Premium 14,225 9,530Insurance claim 3,496 2,700Repayment of Loan to Related Party - 40,505Dividend paid to associated undertakings 3,587 5,962

38. CAPACITY AND PRODUCTION IN METRIC TONS

Sugar DivisionCapacity days 120 120Cane crushing capacity per day (M.T.) 7,000 7,000Total cane crushing capacity 840,000 840,000No of days Mill operated 113 92Actual crushing (M.T.) 654,892 521,062Sugar Production (M.T.) 60,775 49,565

Distillery DivisionCapacity in M.Tons 33,000 33,000Days 330 330Production in M.Tons 25,115 18,226No of days Mill operated 308 235

Reasons for short fall in production

The sugar production plant capacity is based on crushing of sugar cane on daily basis and the sugar production isdependent on certain factors which include surcose recovery. The short fall in actual crushing is mainly on accountof shortage of sugar cane.

The reason of below capacity production of Ethanol is due to torrential rain and flood.


42

Long-term Loans 2,176 651Long-term deposits 2,708 2,037Trade debts 15 732Loans and advances 48,458 99,185Other receivable 19,501 15,945Bank balances 12,397 14,411Cash in hand 455 129

83,534 132,439

2011 2010(Rupees in thousand)

Carrying Values

40 Financial Risk Management Objectives and Policies

The Company is mainly exposed to credit risk, liquidity risk, foreign currency risk interest/markup rate risk, price riskand derivative for the use of financial instruments.

This note presents information about the Company's exposure to each of the above risk, the Company's objectives,policies and procedures for measuring and managing risk, and the Company's management of capital. Furtherquantitative disclosures are included throughout these financial statements.

The Company risk management policies are established to identify and analyze the risks faced by the Company, toset appropriate risk limits and controls, and to monitor risks and adherence to limits. The Company's overall riskmanagement programme focuses on the predictibility of financial markets and seeks to minimize potential adverseeffects on the Company's financial performance.

The Company's senior management provides policies for overall risk management, as well as policies coveringspecific areas such as foreign exchange risk, interest rate risk, credit risk, financial instruments and investment ofexcess liquidity. The Board of Directors reviews and agrees policies for managing each of these risks which aresummarized below:

40.1 Credit risk.

Credit risk is the risk which arises with the possibility that one party to a financial instrument will fail to dischargeits obligation and cause the other party to incur a financial loss.

The Company is exposed to credit risk on deposits, trade debts, loan and advances, profit accrued on bankdeposits, other receivables and bank balances. The Company exposure to credit risk is minimal as theCompany receives advance agaisnt sale of goods to customers and in respect of other financial assets, itseeks to minimize the credit risk exposure through having exposures only to reliable counterparties. Thedetails of Company's exposure in this behalf is as under:

Quality of financial assets

The credit quality of financial assets can be assessed by reference to external credit standing or the historicalinformation about counter party default rates as shown below:

40.1.1 Trade debts

Trade Debts amounting to Rs. 15 thousand (2010: Rs. 732 thousand) are essentially due from these localand foreign companies and the company does not expect that these parties will fail to meet their obligation.None of the trade debts are past due.

40.1.2 Loans and advances & other receivables

2011 2010(Rupees in thousand)

Carrying Values

Counter parties without credit rating - Long Term Loan 2,176 651

- Loans and Advances 48,458 99,185

- Other receivables 19,501 15,412


43

Long term financing - - 164,714 662,357 - 827,071Loan from related parties - - - 1,053 229,802 230,855Liabilities against assets subject to finance lease - - 6,315 20,901 - 27,216Trade and other payables - 1,092,331 290,584 - - 1,382,915Short-term borrowings - 407,197 840,000 - - 1,247,197Accrued mark-up on short-term borrowings - 65,411 - - - 65,411

- 1,564,939 1,301,613 684,311 229,802 3,780,665

-------Rupees in thousands-------

Year ended 30 September 2011

Ondemand

Less than3 months

3 to12 months

1 to 5years

> 5 years Total

40.2 Liquidity risk

Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. TheCompany applies the prudent risk management policies by maintaining sufficient cash and bank balancesand by keeping committed credit facilities. As at the balance sheet date, the Company has unused creditfacilities of Rs. 2,057 million. (2010: Rs. 1,587 million).

40.1.3 Bank Balances

The company limits its exposure to credit risk by investing time deposits in bank accounts only with the counterparties that have stable credit rating accordingly the management does not expect that any counter party willfail to meet their obligation.The credit rating of counter parties as at balances held on the balance sheet withthem are as under:

Long term financing - - 282,167 510,166 - 792,333Loan from related parties - - - 1,053 229,802 230,855Trade and other payables - 257,747 135,531 - - 393,278Short-term borrowings - 357,549 410,000 - - 767,549Accrued mark-up on short-term borrowings - 43,385 - - - 43,385

- 658,681 827,698 511,219 229,802 2,227,400

-------Rupees in thousands-------

Year ended 30 September 2010

Ondemand

Less than3 months

3 to12 months

1 to 5years

> 5 years Total

AAA 2,650AA+ 4,083AA- 1,325AA 2,373A+ 1,775A- 191

12,397

40.3 Foreign currency risk

Foreign currency risk is the risk that the value of financial assets or a financial liability will fluctuate due to achange in foreign exchange rates. It arises mainly where receivables and payables exist due to transactions inforeign currency. The Company is not exposed to any significant foreign currency risk.


44

40.4 Intrest/Markup rate risk

Interest/markup rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuatebecause of chages in market interest rates. The Company's exposure to the risk of changes in variable marketinterest rates arises from long term financing and short term borrowings with floating rates linked with KIBOR.All the borrowings have been obtained in functional currency. The following information provides the details offixed and floating rates of borrowings:

2011

KIBOR +100 (20,806)KIBOR 100 20,806

2010

KIBOR +100 (15,599)KIBOR 100 15,599

Increase/decrease in basic Points

Effect on profitbefore tax

Cash Flow Sensitivity Analysis for variable rate instruments:

The Company does not account for any fixed rate financial assets and liabilities at par value through the Profitand loss. Therefore a change in interest rates at the reporting date would not affect the Profit and Loss.

Cash Flow Sensitivity Analysis for variable rate instruments:

The following figures demonstrate the sensitivity to a reasonably possible change in interest rate, with all othervariables held constant, of the Company's profit before tax:

40.5 Price Risk

Price Risk represents the risk that the fair value of future cash flow of a financial instrument will fluctuate becauseof change in market prices [other than those arising from interest rate risk]. The Company is not exposed to anysignificant price risk.

2011 20112010 2010

Carrying ValuesEffective interest rates

(Rupees in thousand)Financial AssetsFixed Rate InstrumentsLoan to Growers See Note 13 45,653 95,357

Financial LiabilitiesFixed Rate InstrumentsWPPF See Note 23 5,728 5,572

Variable Rate InstrumentsLong Term Financing See Note 19 662,357 510,166Murabaha See Note 23 254,690 120,000Liability Against assets subject to finance lease See Note 17 20,901 -Short term Borrowings See Note 25 1,247,197 767,549


45

40.6 Fair value of financial instruments

The carrying value of all financial assets and liabilities reflected in the financial statements approximates theirfair value. The Company does not have financial assets which are tradeable in open market.

41. Capital risk management

The primary objective of the Company's capital management are to safeguard the Company's ability to continue as goingconcern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capitalstructure to reduce the cost of capital.

The Company manages its capital structure and makes adjustment to it, in light of changes in economic conditions. Inorder to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholdersor issue new shares or sell assets to reduce debt.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net debt iscalculated as total loans and borrowings and subordinated loan, less cash and bank balances. Capital signifies equityas shown in the balance sheet plus net debt.



2011 2010


Total Borrowing 1,085,142 1,023,188

Less: Cash and bank balances 12,852 14,540Net debt 1,072,290 1,008,648

Total equity 508,117 419,537

Gearing ratio 67.85% 70.62%

42. DATE OF AUTHORIZATION

These financial statements were authorized for issue in the Board of Directors meeting held on 29th December 2011

43. GENERAL

i. Amounts have been rounded off to the nearest thousand rupee unless otherwise stated.

ii. Restatement

Comparative Corresponding figure of Long Term Investment has been restated as a consequence of restatmentin investee's Financial statement however the same do not affect figures of the profit and loss account of thecorresponding period.

iii. Reclassification/ Rearrangement

Gurantee Margin of Rs 533 thousands has been reclassified due to change in classification.

Figure of Cost and Revaluation has been rearranged as on October 1, 2010 in Plant and machinery underProperty, Plant & Equipment due to rectification.


46

PATTERN OF HOLDING OF THE SHARES HELD BY THESHAREHOLDERS AS ON 30-09-2011

1365 FROM 1 TO 100 31,625592 FROM 101 TO 500 147,084120 FROM 501 TO 1000 94,542267 FROM 1001 TO 5000 659,197215 FROM 5001 TO 10000 1,411,95710 FROM 10001 TO 15000 120,92915 FROM 15001 TO 20000 282,9696 FROM 20001 TO 25000 140,2913 FROM 25001 TO 30000 85,0013 FROM 30001 TO 35000 94,6362 FROM 35001 TO 40000 75,0186 FROM 40001 TO 45000 252,9862 FROM 45001 TO 50000 94,9491 FROM 50001 TO 55000 54,6342 FROM 60001 TO 65000 122,5563 FROM 70001 TO 75000 223,5262 FROM 80001 TO 85000 164,9281 FROM 100001 TO 105000 102,2031 FROM 110001 TO 115000 110,2414 FROM 115001 TO 120000 476,1811 FROM 120001 TO 125000 124,1121 FROM 130001 TO 135000 132,9273 FROM 145001 TO 150000 442,0201 FROM 150001 TO 155000 154,4072 FROM 155001 TO 160000 316,7091 FROM 165001 TO 170000 166,6502 FROM 170001 TO 175000 342,0481 FROM 180001 TO 185000 184,7862 FROM 185001 TO 190000 375,1312 FROM 190001 TO 195000 386,9271 FROM 195001 TO 200000 195,8382 FROM 210001 TO 215000 424,1221 FROM 215001 TO 220000 218,0862 FROM 225001 TO 230000 455,6232 FROM 230001 TO 235000 463,6521 FROM 285001 TO 290000 288,9241 FROM 295001 TO 300000 298,4291 FROM 340001 TO 345000 340,7581 FROM 355001 TO 360000 359,4582 FROM 375001 TO 380000 756,3181 FROM 390001 TO 395000 390,8421 FROM 425001 TO 430000 427,7061 FROM 500001 TO 505000 502,0001 FROM 510001 TO 515000 514,1801 FROM 740001 TO 745000 740,7131 FROM 780001 TO 785000 781,5931 FROM 870001 TO 875000 871,5571 FROM 2415001 TO 2420000 2,417,9101 FROM 3295001 TO 3300000 3,299,784

2659 TOTAL:- 21,118,663

NOs OFSHARESHOLDERS

TOTAL SHARESHELD

CATEGORIES OF SHAREHOLDING AS ON 30-09-2011

1 INDIVIDUALS 2627 12,573,309 59.54%2 JOINT STOCK COMPANIES 18 4,363,864 20.66%3 INSURANCE COMPANIES 1 23,551 0.11%4 FINANCIAL INSTITUTIONS 7 4,006,319 18.97%5 MODARABA COMPANIES 2 102,218 0.49%6 LEASING COMPANIES 1 2,058 0.01%7 MODARABA MANAGEMENT COMPANIES 1 47,000 0.22%8 OTHERS 2 344 0.00%

TOTAL 2,659 21,118,663 100%

SR.NO.CATEGORIES OFSHAREHOLDER'S

NUMBER OFSHAREHOLDER'S

SHARESHELD

PERCENTAGE


47

CATEGORIES OF SHARE HOLDINGAS AT SEPTEMBER 30, 2011

No. ofShare

holdersSheres Held PercentageCategories of Shareholders

ASSOCIATE COMPANIES UNDERTAKINGS

AND RELATED PARTIES 6

Al-Noor Sugar Mills Ltd. 3,299,784 15.62First Al-Noor Modaraba 102,203 0.48Reliance Insurance Co. Ltd. 23,551 0.11Al-Noor Modaraba Management (Pvt.) Ltd. 47,000 0.22Noori Trading Corporation (Pvt.) Ltd. 543,566 2.57

NIT & ICP 5

NATIONAL BANK OF PAKISTAN, TRUSTEE DEPTT 2,418,010 11.46NATIONAL INVESTMENT TRUST LTD. 62,266 0.29NATIONAL BANK OF PAKISTAN 1,011,763 4.79

DIRECTORS , CEO & THEIR SPOUSES AND 13MINOR CHILDREN

MRS. MUNIRA ANJUM (W/O YUSUF AYOOB) 218,086 1.03 MR. MUHAMMAD YOUSUF AYOUB 377,818 1.79 MR.MOHAMMAD SULEMAN AYOOB 184,786 0.87 MR. ABDUL AZIZ AYOOB 170,594 0.81 MRS. ZARINA BAI ISMAIL (W/O ISMAIL H. ZAKARIA) 158,075 0.75 MR. ZIA ZAKARIA 228,999 1.08 MR. ZOHAIR ZAKARIA 226,624 1.07 MRS. SURAIYA SULEMAN (W/O SULEMAN AYOOB) 132,927 0.63 MR. ISMAIL H. ZAKARIA 47,949 0.23 MRS. MEHRUNNISA A. AZIZ (W/O A. AZIZ AYOOB) 43,613 0.21 MRS. SANOBER ZIA (W/O ZIA ZAKARIA) 10,641 0.05 MR. GHULAM MOHIUDDIN 871,557 4.13 MRS. MANAL GHULAM MOHIUDDIN (W/O GHULAM MOHIUDDIN) 60,290 0.29

PUBLIC SECTOR COMPANIES AND CORP. --- ---

BANK, DEVELOPMENT FINANCE INSTITUTIONS, 4 516,353 2.45NON BANKING FINANCE INSTITUTIONS,

INSURANCE COMPANIES, MODARABAS AND

MUTUAL FUNDS, LEASING

JOINT STOCK COMPANIES 15 520,514 2.46

OTHERS 2 344 0.00

INDIVIDUALS 2614 9,841,350 46.09

TOTAL:- 2,659 21,118,663 100.00

SHARE HOLDERS HOLDING TEN PERCENT OR MORE VOTING INTEREST IN THE LISTED COMPANY

CERTIFICATES HOLDERS HOLDINGTEN PERNCENT OR MORE VOTINGINTEREST IN THE LISTED COMPANY

National Bank of Pakistan Trustee Deptt. --- 2,418,010

Al-Noor Sugar Mills Limited 3,299,784


41

PROXY FORM

I/We ..........................................................................................................................................................................................

in the district of ................................................... being a Member of SHAHMURAD SUGAR MILLS LIMITED

and holder of ............................................................................................................... Ordinary Shares as per Share

(Number of Shares)

Register Folio No. .................... and/or CDC Participant I.D. No. ..................... and Sub Account No. ..................

hereby appoint .......................................................................... of ..........................................................................................

or failing him ...........................................................................................................................................................................

of..................................................................................... also a member; as my/our Proxy in my/our absence to

attend and vote for me/us at the 33rd Annual General Meeting of the Company to be held on the 30th day of January two

thousand and twelve at 3.30 p.m. and at any adjournment thereof :

Signed this .................................................................................. day of .......................................................... 2012

WITNESSES:

1. Signature ...............................................

Name: ...............................................

Address ...............................................

...............................................

NIC or

Passport No. ...............................................

NOTE:

If a Member is unable to attend the Meeting, he may sign this Form and send it to Secretary SHAHMURAD SUGAR MILLSLIMITED, KARACHI so as to reach him not less than 48 hours before the time of holding the Meeting. A proxy need to bea member of the company.

2. Signature ...............................................

Name: ...............................................

Address ...............................................

...............................................

NIC or

Passport No. ...............................................

Rupees five

Revenue

Stamp

Signature of Member(s)

Documents

SHAHMURAD SUGAR MILLS LTD. September 30 2011.pdfSHAHMURAD SUGAR MILLS LTD. NOTICE OF MEETING 05 NOTE: 1. The Register of the Members of the Company will remain closed from 23rd January,