Annual Report September 2016

2016
ANNUAL REPORT
Husein Sugar Mills Limited

Annual Report
HUSEIN SUGAR MILLS LIMITED 2016
Annual Report
Contents
Vision and Mission Statement 03
Company Information 04
Notice of Annual General Meeting 05-08
Directors Report to the Shareholders - English 09-14
Performance at A Glance 15
Review Report to the Members on Statement of Compliance 16
Statement of Compliance with the Code of Corporate Governance 17-18
Key Operating and Financial Data 19
Auditors Report to the Members 20-1
Balance Sheet 22-23
Profit and Loss Account 24
Statement af Comprehensive Income 25
Cash Flow Statement 26
Statement of Changes in Equity 27
Notes to the Financial Statements 28-60
Pattern of Shareholding 61-62
Categories of Shareholders 63
Directors Report to the Shareholders - Urdu 64-71
Proxy Forms 73-74
Jama Punji 75
Annual Report
Vision Statement
A leading producer of sugar and its bye-products by providing the highest quality of products
and service to its customers.
Lowest cost supplier with assured access to long-term supplies.
Sustained growth in earning in real terms.
Highly ethical company and be respected corporate citizen to continue playing due role in
the social and environmental sectors of the company.
To develop an extremely motivated and professional trained work force which would
drive growth through innovation and renovation?
To strive for excellence through commitment, integrity, honesty and team work.
Mission Statement
Our mission is to be a dynamic, profitable and growth oriented company by providing good return
on investment to its shareholders and investors, quality products to its customers, promote
agriculture sector, a secured and friendly environment place of work to its employees and
present the company as a reliable partner to all sugarcane growers and other business associates.
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COMPANY INFORMATION
BOARD OF DIRECTORS Mr. Mustafa Ali Tariq Executive Director CEO
Mr. Ahmed Ali Tariq Non Executive Director Chairman
Mst. Nusrat Shamim Non Executive Director
Mr. Taufeeq Ahmed Khan Independent Director
Mr. Wasim Saleem Executive Director
Mr. Ali Ashfaq Non Executive Director
Mr. Muhammad Iftikhar Independent Director
AUDIT COMMITTEE Mr. Taufiq Ahmad Khan Independent Director Chairman

Mr. Ahmed Ali Tariq Non Executive Director Member
Mr. Ali Ashfaq Non Executive Director Member
HUMAN RESOURCE & Mr. Ahmed Ali Tariq Non Executive Director Chairman
REMUNERATION COMMITTEE Mr. Taufiq Ahmad Khan Independent Director Member
Mr. Mustafa Ali Tariq Executive Director Member
CHIEF OPERATING OFFICER Mr. Wasim Saleem
CHIEF FINANCIAL OFFICER Mr. Wasim Saleem
COMPANY SECRETARY Mr. Khalid Mahmood

ACIS
LEAGAL ADVISOR Masud & Mirza Associates
BANKERS MCB Bank Limited
Bank Alfalah Limited
Habib Bank Limited
National Bank of Pakistan
Allied Bank Limited
Faysal Bank Limited
Meezan Bank Limited
United Bank Limited
The Bank of Punjab
Albarkah Bank (Pakistan) Limited
Bank Islami Pakistan Limited
Summit Bank Limited
NIB Bank Limited
SHARE REGISTRAR M/s Corptec Associates (Pvt) Limited

503-E, Johar Town, Lahore.
Ph:042- 35170336-7 Fax: 042- 35170338
E-mail: [email protected]
AUDITORS Kreston Hyder Bhimji & Co
Chartered Accountants
MILLS Lahore Raod, Jaranwala
REGISTERED HEAD OFFICE 30-A E/1, Old FCC Gulberg III, Lahore
Ph: 35762089 - 35762090 Fax: 042-35712680
E-mail: [email protected]
Website: www.huseinsugarmills.com
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NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that 50th Annual General Meeting of the Shareholders of HUSEIN SUGAR MILLS
LIMIED will be held on Tuesday the 31 st January, 2017 at 10:00 A.M at its Registered Office 30-A E/1,
Old F.C.C., Gulberg III, Lahore to transact the following business:
ORDINARY BUSINESS
1. To confirm the minutes of the last Annual General Meeting held on January 28, 2016.
2. To receive, consider and adopt, the Annual Audited Financial Statements for the year ended September
30, 2016 together with the Directors' and Auditors' Reports thereon.
3. To appoint auditors of the company for the year 2016-17 ending September 30, 2017 and to fix their
remuneration. The audit committee of the Board has recommended the retiring auditors M/s. Kreston
Hyder Bhimji & Company, Chartered Accountants, being eligible have offered them-selves for
re-appointment.
SPECIAL BUSINESS:
4. To obtain consent of the shareholders in terms of S.R.O. 470(I)/2016 dated 31 May 2016 issued by
Securities and Exchange Commission of Pakistan, for the transmission of the annual reports including
annual audited accounts, notices of annual general meetings and other information contained therein
of the Company either through CD or DVD or USB and to pass the following resolution as an
Ordinary Resolution, with or without modification:
Resolved that consent & approval of the members of Husein Sugar Mills Limited (the Company) be
and is hereby accorded for transmission of annual reports including annual audited accounts, notices of
annual general meetings and other information contained therein of the Company to the members for
future years commencing from the year ending on 30 September 2017 through CD or DVD or USB
instead of transmitting the same in hard copies.
Resolved Further that Chief Executive Officer or Company Secretary of the Company be and is hereby
authorized to do all acts, deeds and things, take or cause to be taken all necessary actions to comply
with all legal formalities and requirements and file necessary documents as may be necessary or
incidental for the purposes of implementing this resolution
5. To consider and, if deemed fit, pass the following resolution as a Special Resolution with or without
modification for alterations in the Articles of Association of the Company:
Resolved that pursuant to Section 28 and other applicable provisions, if any, of the Companies
Ordinance, 1984 and any other law(s), Articles of Association of the Company be and are hereby
amended by inserting a new Article 65A immediately after the existing Article 65 to read as under;
65A ELECTRONIC VOTING: The Company shall comply with the mandatory e-voting requirements
as may be prescribed by the Securities and Exchange Commission of Pakistan from time to time and
members may be allowed to appoint members as well as non-members as proxies for the purposes
of electronic voting pursuant to this Article.
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Resolved further that the Chief Executive Officer or Company Secretary be and is hereby authorized
to do all acts, deed and things, take all steps and action necessary, ancillary and incidental for
altering the Articles of Association of the Company including filing of all requisite documents/
statutory forms as may be required to be filed with the Registrar of Companies and complying with
all other regulatory requirements so as to effectuate the alterations in the Articles of Association and
implementing the aforesaid resolution.
By Order Of the Board
Lahore: 9th January,2017
Khalid Mahmood
Company Secretary
NOTES:
1. Book Closure :
The share transfer books of the Company will remain closed from 25th January 2017 to 31st January
2017 (both days inclusive).Transfers received in order at the Registrar office, M/s Corptec Associates
(Pvt.) Limited, 503-E, Johar Town Lahore by the close of business on 24th January 2017 will be
entertained.
2. A member entitled to attend and vote at this meeting may appoint any other member as his/her proxy
to attend and vote instead of him/her. A Proxy must be a member of the Company.
3. The instrument appointing a proxy and the power of attorney or other authority under which it is
signed or a notarially attested copy of the power of attorney must be deposited at the Registered
Office of the Company at least 48 hours before the time of the meeting.
4. Members who have deposited their shares into Central Depository Company of Pakistan Limited
(CDC) will further have to follow the under mentioned guidelines as laid down 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 the person whose
securities are in group account and their registration details are uploaded as per the regulations,
shall authenticate his/her identity by showing his/her original Computerized National Identity
Card (CNIC) or original passport at the time of attending the meeting.
ii). In case of corporate entity, the board of directors' resolution/power of attorney with specimen
signatures of the nominee shall be produced (unless it has been provided earlier) at the time of
the Meeting.
b. FOR APPOINTING PROXIES
i). In case of individuals, the account holder or sub-account holder and/or the person whose
securities are in group account and their registration details are uploaded as per the regulations,
shall submit the proxy form as per the above requirement.
ii). Proxy form shall be witnessed by two persons whose names, addresses and CNIC numbers shall
be mentioned on the form.
iii). Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished
with the proxy form.
iv). Proxy shall produce his original CNIC or original passport at the time of the meeting.
v). In case of corporate entity, the board of directors' resolution/power of attorney with specimen
signatures shall be submitted (unless it has been provided earlier) along with proxy form to the
company.
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5. Notice to Shareholders who have not provided CNIC:

The Company has made several requests through advertisements in Urdu and English newspapers
having circulation throughout the country and Independent Share Registrar of the Company has also
sent letters through Registered Post to the shareholders who have not yet provided valid copies of
their Computerized National Identity Card (CNIC), requesting them to provide their CNIC's. The
directive of the Securities and Exchange Commission of Pakistan contained in S.R.O. 831(I)/2012
dated 5 July 2012 requires that the dividend warrants should bear the Computerized National
Identity Card Numbers (CNIC) of the registered shareholders or the authorized person except in the
case of minor(s) and corporate shareholders.
CNIC number of the shareholders is, therefore, mandatory for the issuance of future dividend warrants
and in the absence of such information, payment of dividend may be withheld in term of SECP's order
dated 10th May, 2016. Therefore, the shareholders who have not yet provided their CNICs are once
again advised to provide the attested copies of their CNICs directly to our Independent Share Registrar
at the address given herein above without any further delay.
6. Mandate for E-DIVIDENDS for shareholders
In order to make process of payment of cash dividend more efficient, e-dividend mechanism has been
envisaged where shareholders can get amount of dividend credited into their respective bank accounts
electronically without any delay. In this way, dividends may be instantly credited to respective bank
accounts and there are no chances of dividend warrants getting lost in the post, undelivered or
delivered to the wrong address, etc. The Securities and Exchange Commission of Pakistan (SECP)
through Notice No. 8(4) SM/CDC 2008 dated 5 April 2013 has advised all Listed Companies to adopt
e-dividend mechanism due to the benefits it entails for shareholders. In view of the above, you are
hereby encouraged to provide a dividend mandate in favour of e-dividend by providing dividend
mandate form duly filled in and signed.
7. Electronic Transmission of Financial Statements Etc.,
SECP through its Notification No. SRO. 787(1)/2014, dated September 08, 2014 has allowed
companies to circulate Annual Audited Financial Statements along with Notice of Annual General
Meeting through email instead of sending the same through post, to those members who desires to
avail this facility. The members who desire to opt to receive aforesaid statements and notice of AGM
through e-mail are requested to provide their written consent on the Standard Request Form available
on the Company's website: www.huseinsugarmills.com
8. Deduction of Income Tax from Dividend at Revised Rates
Pursuant to the provisions of Finance Act, 2016 effective 1 July 2016, deduction of income tax from
dividend payments shall be made on the basis of filers and non-filers as follows:
S.No Nature of Shareholders Rate of deduction
1 Filers of Income Tax Return 12.5%
2 Non- Filers of Income Tax Return 20.0%
Income Tax will be deducted on the basis of Active Tax Payers List posted on the Federal Board of
Revenue website.
Members seeking exemption from deduction of income tax or are eligible for deduction at a reduced
rate are requested to submit a valid tax certificate or necessary documentary evidence, as the case
may be.
The shareholders who have joint shareholdings held by Filers and Non-Filers shall be dealt with
separately and in such particular situation, each account holder is to be treated as either a Filer or a
Non-Filer and tax will be deducted according to his shareholding. If the share is not ascertainable then
each account holder will be assumed to hold equal proportion of shares and the deduction will be
made accordingly. Therefore, in order to avoid deduction of tax at a higher rate, the joint account
holders are requested to provide the below details of their shareholding to the Share Registrar of the
Company latest by the AGM date.
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Folio/CDC Name of Principal/Joint

CNIC Shareholding Total Shares
Account No. Shareholder Shareholder
9. Placement of Financial Statements

The Company has placed the Audited Annual Financial Statements for the year ended 30 September
2016 along with Auditors and Directors Reports thereon on its website: :
www.huseinsugarmills.com
STATEMENT UNDER SECTION160 (1)(B) OF THE COMPANIES ORDINANCE,1984

This statement set out the material facts concerning the special business to be transacted at the annual
general meeting of the Company to be held on 31 January 2017.
Circulations of Annual Reports through CD/DVD/USB
Securities and Exchange Commission of Pakistan has vide S.R.O 470(I)/2016 dated 31 May 2016
allowed the companies to circulate the annual reports including annual audited accounts, notices of
annual general meetings and other information contained therein of the Company to its members
through CD/DVD/USB subject to consent of the shareholders in the general meeting. This will save
time and expenses incurred on printing of the annual report.
The Company shall supply the hard copies of the aforesaid document to the shareholders on demand,
free of cost, within one week of such demand. After approval of the shareholders, the Company will
place a Standard Request Form on its website to communicate their need of hard copies of the
documents along with postal and email address of the Company Secretary/Share Registrar to whom
such requests shall be made.
Accordingly, the directors have placed the matter before the shareholders for their approval and to pass
the ordinary resolution as proposed in the notice of meeting. The directors are not interested, directly or
indirectly, in the above business except to the extent of their investment as has been detailed in the
pattern of shareholding annexed to the Directors Report.
Alteration in the Articles of Association
Securities and Exchange Commission of Pakistan has issued Companies (E-Voting) Regulation 2016 on
January 22, 2016 vide S.R.O 43(1)/2016. The directors have recommended alteration in the Articles of
Association by inserting a new Article 65A therein which will give the members option to be part of the
decision making in the general meeting of the Company through electronic means. Accordingly, it has
been proposed to pass the resolution as a Special Resolution for alteration in the Articles of Association
of the Company, as specified in the notice of meeting.
The directors are not interested, directly or indirectly, in the above business except to the extent of their
investment as has been detailed in the pattern of shareholding annexed to the Directors Report.
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Annual Report
DIRECTORS REPORT TO THE SHAREHOLDERS

Your Directors are pleased to present the 50thAnnual Report of Husein Sugar Mills Limited for the year
ended September 30, 2016.
The Company's performance for current and last year is given as under:
September 30 2016 2015
OPERATIONS
Operating days (Nos) 1111 139
Sugarcane crushed (M. Tons) 499,396 447,091
Sugar produced (M. Tons) 46,861 41,103
Molasses Produced ( M.Tons) 22,305 19,665
Sugar recovery ( % age) 9.41 9.20
Rupees in Thousand
FINANCIAL
Sales 3,144,147 1,995,710
Gross Profit / (Loss) 245,551 (209,329)
Operating Profit /(Loss) 68,130 (381,278)
Finance Cost 61,569 61,335
Profit / (Loss) After Taxation 115,665 (418,342)
Earnings / (Loss) Per Share (Rupees) 6.80 (24.61)
(a) Alhamdulillah, the efficiency improvement initiates and corrective steps taken by the management have
started yielding positive results. The company, which took gross loss and net loss in last two financial years
have come out of woods and posted very decent Gross Profit Rs.245.551 million [2015: Rs. (209.329)
million] and net profit after tax Rs.115.635 million [2015: Rs. (418.342) million].
The company started season 2015-16 with hardly any working capital lines. The mills remained
operational for 111 days [2015: 139 days] and crushed 499,396 tons of sugarcane which is 11.6% more
than last year [2015: 447,091 tons]. Similarly sugar produced during the season was 46,861 tons which
was 14% more than that produced in last year [41,103 tons]. The company is pursuing a sugarcane
development program in which variety seed of sugarcane and other inputs like fertilizers and pesticides
are being provided to growers by arranging soft agriculture loans from banks. Inshallah our members will
see significant improvement in sucrose recovery and sugarcane supplies to the mills which in turn will
ensure reasonable profitability.
The disparity in sugarcane support price between two provinces; Punjab and Sindh continued in the
current season also. For mills operating in Sindh sugarcane support price was 172/40 kg whereas it was Rs.
180/40 kg in Punjab. Similarly road cess incidence was 6 times more in Punjab than in Sindh Province.
These factors continued to hurt sugar mills operating in Punjab.
(b) The company during the financial year obtained working capital facilities to the tune of Rs. 600 million
from two leading banks, which helped a lot in building stock holding capacity of the company which, in
future will reduce distress selling during crushing season.
(c) During the season company exported 8,107 M. Tons of sugar to Afghanistan. As the government has kept
sugar support price abnormally high as compared to international price, therefore without export subsidy,
export of sugar was not feasible. The Government announced subsidy of Rs. 13/kg on export sugar.
Unfortunately the promised subsidy was released with a delay of eight months. This inordinate delay in
release of subsidy was very painful for small companies like us.
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FUTURE OUTLOOK
For the season 2016-17, the disparity in sugarcane support prices is over and Sindh province has now
announced sugarcane support price of Rs. 182/40 kg. This will enable level playing field to all sugar mills
operating in Pakistan.
Due to timely rains and reduction in fertilizer and other inputs prices 2016-17, the crop is very healthy and we
foresee 10% - 15% increase in per acre yield.
One important factor, which we are witnessing in crushing season, is that the season started with hardly any
carry forward sugar stocks from last year. This resulted in higher sugar prices at the start of the season and it will
continue during first few months of the season. Moreover sugar in international market is trading at upward
trajectory and Government, in anticipation of bumper season has allowed export of 225,000 M. Tons with no
export subsidy.
Your company taking advantage of enhanced sugarcane crop and higher sugar rates took initiate of early start of
crushing season, which proved very benificial for the company. Upto December 31, 2016, the company
crushed 251,413 M. Tons of sugar [2015-16: 173,899 M. Tons] and produced 21,835 M. Tons of sugar [2015-
16: 14,305 M. Tons] at an average sucrose content of 9.00% [2015-16: 9.10%]. The company has secured
working capital lines of Rs. 1.1 billion which will enhance the financial and operational capacity of the
company.
We expect good operational and financial results in the new crushing season 2016-17.
DIVIDEND
No dividend is recommended for the time being as retention of funds are required for improving permanent
working capital and undertaking efficiency improvement projects.
DEBT SERVICING
The company has zero long term loan. It is availing only short term working capital loans, which are being
serviced to the fullest satisfaction of lenders.
COMMENTS ON AUDITORS' OBSERVATIONS:

CREDITROS
The amount of Rs. 283.765 million (2015: Rs. 264.704 million included in Creditors (Note-10) was disbursed
to the Company on different dates during the year on behalf of various farmers of sugarcane for purchase of
agricultural inputs by Bankislami Pakistan Limited (Total Limit 615.000 Million). The Company is contingently
liable to repay the principal and accrued profit in case of default of any individual farmer of sugarcane to the
extent of actual default on due date (Note 15.1.5)
GOING CONCERN ASSUMPTION
In response to auditors' observation regarding Company's ability to continue as a going concern the Directors
submit as follows:
I During the year under review the Sponsor Directors have further injected a significant amount
towards Share Deposit Money enhancing the balance from Rs. 403.442 Million as of September 30,
2015 to Rs. 609.682 Million as of September 30, 2016. This factor fairly constitutes a tangible
evidence of the continued commitment of the Sponsors to support the operations of the Company for
any foreseeable future. This commitment also satisfactorily addresses all consequences of equity
erosion caused by accumulated losses incurred by the Company.
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Annual Report
ii The Company has been successfully able to secure Rs.1.1 billion working capital facility for the next
year 2016-17.
iii The company during the year exported 8,107 tons of sugar to the entire satisfaction of banks.
Moreover payment to the grower was made to the entire satisfaction of Cane Commissioner. The
company after two years has earned decent gross profit and after three years earned net profit. The
imbalance in current liabilities and current assets is being taken care of and management is leaving
no stone un-turn to rectify this imbalance.
iv The spare parts and material suppliers are supplying goods as usual and receiving payments. Banks
are sanctioning new facilities, and growers are timely paid. The company in tender for supply of
sugar to Utility Stores Corporation. The company also intends to export sugar as was done last year
v The Company at present is not in default with any bank or financial institution and there is no adverse
remark against the Company in the eCIB data being maintained by State Bank of Pakistan. Further,
there are no fixed terms borrowings approaching maturity and the Company is not relying on short
term borrowings to finance long term assets, as well as, there are no loan agreements which the
Company is not able to comply with.
vi The cumulative effect of explanations contained in paragraphs ( i ) to ( v) is that it can be rightly

concluded that there is no uncertainty regarding application of going concern assumption with
respect to the Company.
CORPORATE SOCIAL RESPONSIBILITY
The Company provides a safe, healthy, and environment friendly atmosphere to its all employees, besides
promoting culture of tolerance, mutual respect, friendliness, self-help and mutual trust and confidence.
Besides offering apprenticeship to fresh graduates and post graduates and professional and technical young
individuals, the Company employs appropriate persons purely on merit basis. The Company also provides
employment to physically handicapped and special persons to make them a useful part of the society.
As a responsible corporate citizen, the Company is committed to a sustainably equitable social setup. The
Company has, for this purpose, promoted establishment of non-profit institutions for the welfare of the poor and
needy, primarily in the field of education and health. The aforesaid institutions have provided free medical
facilities and quality education facilities to the people of the area.
LISTING AT STOCK EXCHANGE
Keeping in view the merger of all stock exchanges, your Company has been listed at Pakistan Stock Exchange
Limited.
COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE
We are committed to good corporate governance and do comply with the requirements of Code of Corporate
Governance included in the listing regulations of Pakistan Stock Exchange Limited. The statement of
compliance with the best practices of the Code of Corporate Governance is annexed
DIRECTORS' STATEMENT
In compliance of the Code of Corporate Governance, we give below statement on Corporate and Financial
Reporting Framework:
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Annual Report
1 The financial statements prepared by the management of the Company present fairly its state of
affairs, the results of its operations, cash flows and changes in equity.
2 Proper books of account of the Company have been maintained in the manner as required by the
Companies Ordinance, 1984
3 Appropriate accounting policies have been consistently applied in preparation of financial

statements and accounting estimates are based on reasonable and prudent judgment.
4 The International Financial Reporting Standards, as applicable in Pakistan, have been followed in
preparation of financial statements.
5 The system of internal control is sound in design and has been effectively implemented and
monitored.
6 There are no significant doubts upon the Company's ability to continue as a going concern as
it has adequate resources and improving its results to continue in operation for the foreseeable
future as has been explained in this report and note 1.2.
7 There has been no material departure from the best practices of Corporate Governance as listed in
the listing regulations of stock exchange where the Company is listed.
8 Key operating and financial data for last six years in summarized form is annexed.
9 The statement of pattern of shareholding as on September 30,2016 is attached.
10 Provident Fund is managed by a duly executed separate Trust and the Trust has invested Rupees
23.087 million, as at September 30, 2016(2015: Rupees 41.743 million).
11 Detail of transactions in the shares of the Company by Directors, Chief Executive, Company
Secretary, Chief Financial Officer, their spouses and minor children is as under:
Shares Purchased/Transferred in:
Mr. Ahmed Ali Tariq - Chairman 4,221,546
Mr.Mustafa Ali Tariq- CEO 3,819,305
Shares Transferred out:

Mr. Ahmed Ali Tariq - Chairman 3,232,313
Mr. Mustafa Ali Tariq - CEO 2,867,806
Mst.Nusrat Shamim - Director 6,210,670
BOARD COMMITTEES
Audit Committee
The audit committee is performing its duties in line with its terms of reference as determined by the Board
of Directors. Composition of the committee is as follows:
Mr. Taufiq Ahmad Khan Chairman

Mr.Ahmed Ali Tariq Member
Mian Ali Ashfaq Member
Human Resources and Remuneration (HR&R) Committee

The Human Resources and Remuneration (HR&R) Committee is performing its duties in line with its terms
of reference as determined by the Board of Directors. Composition of the committee is as follows:
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Annual Report
Mr.Ahmed Ali Tariq Chairman
Mr. Taufiq Ahmad Khan Member
Mr. Mustafa Ali Tariq Member
Meetings of Board of Directors
The Board of the Company met four times during current year in Pakistan and the attendance position of
the directors at these meetings is as under:
No. of Meetings Attended
Directors Names
Mst. Nusrat Shamim 4
Mr. Ahmed Ali Tariq 4
Mr. Mustafa Ali Tariq 4
Mian Shahzad Aslam* None
Mian Aamir Naseem ** None
Mr. Asad Ahmed Sheikh*** 2
Mian M. Shams Amin**** 2
Mr.Taufiq Ahmed Khan 4
Mr.Wasim Saleem 2
Mr.Ali Ashfaq 4
Mr.Muhammad Iftikhar 2
Notes: .
*Resigned with effect from November 25, 2015 and replaced by Mr.Taufiq Ahmed Khan.
** Resigned with effect from November 28, 2015 and replaced by Mr.Ali Ashfaq.
*** Resigned with effect from February 11, 2016 and replaced by Mr.Muhammad Iftikhar
**** Resigned with effect from March 02, 2016 and replaced by Mr.Wasim Saleem
.
Leaves of absences were granted to the directors who could not attend the Board meetings.
DIRECTORS' TRAINING
As required under the Code of Corporate Governance, one director of the Company has completed director's
training course. Other directors, who are not exempted from the requirement of directors' training, would
acquire it within prescribed time period.
RELATIONS WITH STAKEHOLDERS
Husein Sugar Mills is committed to establish mutually beneficial relations with suppliers, customers,
bankers,employees, stock exchange, SECP and other business partners of the Company. Relations with all stock
stakeholders during the year under review remained cordial.
INFORMATION UNDER SECTION 218 OF COMPANIES ORDINANCE, 1984
During the year ended 30 September 2016, the Board appointed Mr. Mustafa Ali Tariq, as CEO and fix his
remuneration at Rs.700,000 per month effective from 1st April 2016 along with other benefits as per Company
policy. Mr. Mustafa Ali Tariq is a director of the Company and is considered as interested in his appointment as
Chief Executive and the terms and conditions thereof. No other director is interested in this appointment.
POST BALANCE SHEET EVENTS
Subsequent to balance sheet date, no significant change has occurred or came to the knowledge of the Board
that warrants reporting to shareholders.
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Annual Report
SHAREHOLDERS'S ROLE
Company's shareholders are regularly informed about Company's state of affairs through quarterly accounts
available on the Company's website. Active participation in the members' meetings is encouraged to ensure
accountability and transparency.
FINANCIAL STATEMENTS
As required under clause 5.19.14 (a) of PSX Rule Book, the Chief Executive Office and Chief Financial Officer
presented the financial statements, duly endorsed under their respective signatures, for consideration and
approval of the Board of Directors and the Board after consideration and approval, authorized the signing of
financial statements for issuance and circulation.
The financial statements of the Company have been duly audited and approved with qualification by the
auditors of the Company, Kreston Hyder Bhimji & Co, Chartered Accountants and their report is attached with
the financial statements.
AUDITORS
The external auditors of the Company Kreston Hyder Bhimji and Company, Chartered Accountants shall retire
on the conclusion of Annual General Meeting. Being eligible for re-appointment under the listing regulations,
they have offered their services as auditors of the Company for the financial year ending September 30,2017.
The Audit Committee has recommended the appointment of Kreston Hyder Bhimji and Company, Chartered
Accountants as Auditors of the Company for the year ended 30 September 2017 and the Board agrees to the
recommendation of the Audit Committee.
The Auditors have also given their consent to work as Auditors for the next year and have conveyed that they
have been given satisfactory rating under the Quality Control Review of Institute of Chartered Accountants of
Pakistan and that the firm and all its partners are fully compliant with the code of ethics issued by International
Federation of Accountants (IFAC). The Auditors have also confirmed that neither the firm nor any of their
partners, their spouses or minor children at any time during the year held or traded in the shares of the
Company.
WEB PRESENCE
The website of the Company is compliant to requirements of Securities and Exchange Commission of Pakistan
(SECP), and all the information relating to the Company including periodic financial statements / annual reports
etc., is available on the website. Stakeholders and general public can visit Company's website
www.huseinsugarmills.com to get their desired information.
APPRECIATION
The Board acknowledges with thanks the continued support and cooperation extended by the shareholders,
bankers, sugarcane farmers and all other stakeholders. The Board also places on record its appreciation for
employees of the Company for its devotion and hard work.
AHMED ALI TARIQ

Lahore: January 05, 2017 Chairman
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Annual Report
PERFORMANCE AT A GLANCE
LOCAL SALES BREAK UP-CURRENT YEAR
5 YEARS OMPARISON OF SUGARCANE CUSHING(M.TONS)
2015-16, 499,396 2011-12, 650,995
2014-15, 447,091
2012-13, 580,197
2013-14, 429,611
SUGAR RECOVERY PERCENTAGE
9.6
9.55
9.5
9.4 9.39 9.41 9.41

%AGE
9.3
9.2 9.20
9.1
9
2011-12 2012-13 2013-14 2014-15 2015-16
YEARS
SUGAR PRODUCTION -M.TONS
2015-16 46,861
2014-15 41,103
YEARS
2013-14 40,415
2012-13 55,368
2011-12 61,129
0 20,000 40,000 60,000 80,000

M.TONS
15
Annual Report
REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE

WITH BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE
We have reviewed the enclosed Statement of Compliance with the best practices contained in the Code of
Corporate Governance (the Code) prepared by the Board of Directors (the Board) of HUSEIN SUGAR
MILLS LIMITED (the Company) for the year ended 30 September 2016, to comply with the requirements
of Listing Regulations of Pakistan 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 and report if it does not and to highlight any non-compliance with the requirements
of the Code. A review is limited primarily to inquiries of the Company's 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 are not
required to consider whether the Board of director's statement on internal control covers all risks and
controls, or to form an opinion on the effectiveness of such internal controls, the Company's corporate
governance procedures and risks.
The Code requires the Company to place before the Audit Committee, and upon recommendation of the
Audit Committee, place before the Board of Directors for their review and approval its 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 and recording
proper justification for using such alternate pricing mechanism. We are only required and have ensured
compliance of this requirement to the extent of approval of related party transactions by the Board of
Directors upon recommendation of 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 as applicable to the Company for the year ended 30 September 2016.
Date: January 05, 2017
LAHORE
16
Annual Report
STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE

FOR THE YEAR ENDED SEPTEMBER 30, 2016
This statement is being presented to comply with the Code of Corporate Governance (CCG) as contained
in Listing Regulations of Pakistan Stock Exchange Limited for the purpose of establishing a framework of
good governance, whereby a listed company is managed in compliance with the best practices of
corporate governance.
The company has applied the principles contained in the CCG in the following manner:
1. The company encourages representation of independent non-executive directors and directors
representing minority interest on its board of directors. At present the board includes:
Category Names
Independent Director Mr.Taufiq Ahmad Khan
Executive Directors Mr. Mustafa Ali Tariq
Mr. Wasim Saleem
Non-Executive Directors Mr. Ahmed Ali Tariq
Mst.Nusrat Shamim
Mr.Ali Ashfaq
Mr.Muhammad Iftikhar
2. The independent director meets the criteria of independence under clause 5.19.1 (b) of CCG.
3. The directors have confirmed that none of them is serving as a director on more than seven listed
companies, including this company.
4. All the resident directors of the company are registered as taxpayers and none of them has defaulted in
payment of any loan to a banking company, a DFI or an NBFI or, being a member of a stock exchange,
has been declared as a defaulter by the stock exchange.
5. During the year ended 30 September 2016, four casual vacancies occurred on the Board which were
filled up by the directors within stipulated time.
6. The company has prepared a Code of Conduct and has ensured that appropriate steps have been
taken to disseminate it throughout the company along with its supporting policies and procedures.
7. The Board has developed a vision/mission statement, overall corporate strategy and significant policies
of the company. A complete record of particulars of significant policies along with the dates on which
they were approved or amended has been maintained.
8. All the powers of the Board have been duly exercised and decisions on material transactions,
including appointment and determination of remuneration and terms and conditions of employment
of the CEO, other executive and non-executive directors, have been taken by the board.
9. The meetings of the Board were presided over by the Chairman and, in his absence, by a
director elected by the Board for this purpose and the Board met at least once in every quarter.
Written notices of the board meetings, along with agenda and working papers, were circulated
at least seven days before the meetings. The minutes of the meetings were appropriately
recorded and circulated.
10. One director completed the director's training program during the year. The directors other than those
who are not exempted from the requirement of director's training program will acquire certification
within specified time.
17
Annual Report
11. The Board has approved appointment of CFO, Company Secretary and Head of Internal Audit including
their remuneration and terms and conditions of employment, as recommended by the HR and
Remuneration Committee.
12. The directors' report for this year has been prepared in compliance with the requirements of the
CCG and fully describes 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 disclosed in the pattern of shareholding.
15. The company has complied with all the corporate and financial reporting requirements of the CCG.
16. The Board has formed an Audit Committee. It comprises of three members of whom two are Non-
Executive Directors and the chairman of the committee is an independent Director.
17. The meetings of the audit committee were held at least once every quarter, prior to the approval of
interim and final results of the Company and as required by the CCG. The terms of reference of the
committee have been formed and advised to the committee for compliance.
18. The board has formed an HR and Remuneration Committee. It comprises three members, of whom
two are non-executive directors and the chairman of the committee is a non executive director.
19. The Board has set up an effective internal audit function and the members of internal audit function
are considered suitably qualified and experienced for the purpose and are conversant with the
policies and procedures of the company
20. The statutory auditors of the company have confirmed that they have been given a satisfactory rating
under the Quality Control Review program of the ICAP, that they or any of the partners of the firm,
their spouses and minor children do not hold shares of the company and that the firm and all its
partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of
ethics as adopted by the ICAP.
21. The statutory auditors or the persons associated with them have not been appointed to provide other
services except in accordance with the listing regulations and the auditors have confirmed that they
have observed IFAC guidelines in this regard.
22. The 'closed period', prior to the announcement of interim/final results, and business decisions,
which may materially affect the market price of Company's Securities, was determined and
intimated to directors, employees and stock exchanges.
23. Material/price sensitive information has been disseminated among all market participants at once
through stock exchange(s).
24. We confirm that all other material requirements of the CCG have been complied with.
AHMED ALI TARIQ

Lahore: January 05, 2017 Chairman
18
Annual Report
KEY OPERATING AND FINANCIAL DATA

OPERATING DATA 2016 2015 2014 2013 2012 2011
Cane crushed (M.Tons) 499,396 447,091 429,617 580,197 650,995 575,886
Sugar produced from Sugar Cane (M.Tons) 46,861 41,103 40,415 55,368 61,129 50,221
Average Recovery from Sugarcane( %) 9.41 9.20 9.41 9.55 9.39 8.72
Number of days worked 111 139 114 113 121 122
...(Rupees in ' 000)..
FINANCIAL DATA
Sales 3,144,147 1,995,710 2,694,801 2,234,951 3,010,669 3,477,699
Gross Profit /(Loss) 245,551 (209,329) (54,950) 24,125 198,169 293,358
Operating Profit /(Loss) 68,130 (381,278) (197,430) (95,843) 109,205 185,749
Profit / (Loss) before taxation 98,257 (416,144) (287,973) (217,021) 24,492 119,245
Taxation 17,408 (2,197) (6,672) 26,216 (17,571) (49,353)
Profit / (Loss )after taxation 115,665 (418,342) (294,645) (190,805) 6,921 69,892
Earning /(Loss) per share (Rupees) 6.80 (24.61) (17.28) (11.22) 0.41 5.32
Total Assets 3,139,121 3,337,783 3,149,633 2,183,840 1,450,996 1,397,393
Current Liabilities 1,276,551 1,731,041 1,411,531 1,538,575 574,318 370,957
Capital Employed 1,862,570 1,606,742 1,738,103 645,265 876,678 1,026,436
Represented by:
Share Capital 170,000 170,000 170,000 170,000 170,000 170,000
Reserves 190,543 208,855 203,987 207,471 192,171 192,920
Accumulated Loss (770,789) (952,607) (594,721) (300,076) (109,271) (116,192)
Shareholders' Equity (410,246) (573,752) (220,734) 77,395 252,900 246,728
Non - current Liabilities
Liabilities against assets subject to finance
lease - - 7,576 17,574 25,718 5,816
Long term financing - - - 49,967 99,933 279,341
Long term deposits - - 6,753 5,144 5,442 -
Deferred income tax liability 209,585 282,327 295,705 - - -
Deferred income on sale and lease back - - - - - 289
209,585 282,327 310,034 72,685 131,093 285,446
19
Annual Report
AUDITORS' REPORT TO THE MEMBERS

We have audited the annexed balance sheet of HUSEIN SUGAR MILLS LIMITED as at 30 September 2016 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 estimates 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 qualified opinion and, after due verification, we report that:
1 The trade and other payables (Note 10 of these financial statements) include balances amounting to Rs.283.765
million (2015: Rs. 264.704 million) stated to be received from a bank on behalf of sugarcane growers as advance
against the provision of agricultural inputs, against which we were unable to obtain sufficient appropriate audit
evidence. Accordingly, these balances remained unverified to that extent.
Except for the effects of the matter described in the paragraph (1) above, 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;
b) in our opinion, and to the best of our information and according to the explanations given to us, except for the matter
discussed in paragraph 1 above, 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 30 September 2016 and of the profit, its comprehensive income, its cash flows and changes in equity for
the year then ended; and
d) a)in our opinion, no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980).
We draw attention to note 1.2 to the financial statements, which indicates that although the company has earned gross
profit and profit after taxation amounting to Rs. 245.551 million and Rs. 115.665 million respectively during the year
ended 30 September 2016, yet the equity of the company stands at a negative balance of Rs. 410.246 million (2015:
Rs. 573.752 million). Further at the balance sheet date, the company's current liabilities exceeded its current assets by
Rs. 762.820 million (2015: Rs. 1,024.834 million). These conditions, along with other matters as set forth in the
aforesaid note, indicate the existence of material uncertainty which may cast doubt about the company's ability to
continue as a going concern. These financial statements do not include any adjustments relating to the realization of
the company's assets and liquidation of any liabilities that may be necessary should the company be unable to
continue as a going concern.
20
Annual Report
Our opinion is not qualified in respect of the matters discussed in emphasis of matter paragraph enumerated as above.
The financial statements of the company for the year ended 30 September, 2015 were audited by the outgoing auditors
Messrs Riaz Ahmad and Co., Chartered Accountants, Lahore, whose audit report dated 29 December, 2015 expressed
qualified opinion on the matters of non-verification / inability to obtain sufficient appropriate audit evidence of closing
stock in trade in the sum of Rs. 321.669 million and creditors shown under the head trade and other payablesin the sum of
Rs. 264.704 million with an emphasis of matter paragraph on the issue of going concern.
LAHORE: 05 January 2017
21
Annual Report
BALANCE SHEET
2016 2015
NOTE Rupees Rupees
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES

Authorized share capital
50,000,000 ordinary
shares of Rs. 10 each 500,000,000 500,000,000
Issued, subscribed and paid-up share capital 3 170,000,000 170,000,000

Reserves 4 (580,245,660) (743,752,314)
(410,245,660) (573,752,314)
Deposit for purchase of shares - related parties 5 609,681,833 403,441,833

Surplus on revaluation of property, plant and equipment 6 1,453,548,580 1,494,724,734
- net of deferred tax
NON-CURRENT LIABILITIES
Long term borrowing 7 - -

Liabilities against assets subject to finance lease 8 - -
Deferred tax liability 9 209,585,106 282,326,962
209,585,106 282,326,962
CURRENT LIABILITIES
Trade and other payables 10 762,269,832 1,280,293,581
Accrued mark-up on secured borrowings 11 5,334,298 13,874,902
Short term borrowings 12 438,946,777 417,404,411
Loan from related party 13 70,000,000 -
Current portion of non-current liabilities 14 - 19,468,541
1,276,550,907 1,731,041,435
CONTINGENCIES AND COMMITMENTS 15
TOTAL EQUITY AND LIABILITIES 3,139,120,766 3,337,782,650
The annexed notes form an integral part of these financial statements.
MUSTAFA ALI TARIQ

Chief Executive Officer
22
Annual Report
AS AT 30 SEPTEMBER 2016
2016 2015
NOTE Rupees Rupees
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 16 2,622,701,694 2,609,983,575
Long term investments 17 - 20,812,295
Long term deposits 18 2,687,690 779,440
2,625,389,384 2,631,575,310
CURRENT ASSETS
Stores, spare parts and loose tools 19 144,614,335 139,864,011
Stock-in-trade 20 180,513,382 321,669,362
Trade debts 21 693,424 41,531
Advances 22 35,100,050 26,126,433
Short term deposits and prepayments 23 828,598 11,127,476
Other receivables 24 103,754,148 44,047,964
Tax refund due from Government - income tax 32,021,299 60,624,064
Cash and bank balances 25 16,206,146 102,706,499
513,731,382 706,207,340
TOTAL ASSETS 3,139,120,766 3,337,782,650
AHMED ALI TARIQ

Chairman / Director
23
Annual Report
PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED 30 SEPTEMBER 2016
2016 2015
Note Rupees Rupees
NET SALES 26 3,144,146,871 1,995,710,327
COST OF SALES 27 (2,898,595,674) (2,205,039,435)
GROSS PROFIT / (LOSS) 245,551,197 (209,329,108)
OPERATING EXPENSES
Selling and distribution cost 28 (15,388,904) (17,625,456)

Administrative and general expenses 29 (154,491,654) (147,608,656)
Other operating expenses 30 (7,540,953) (6,715,156)
(177,421,511) (171,949,268)
PROFIT / (LOSS) FROM OPERATIONS 68,129,686 (381,278,376)
OTHER INCOME 31 91,696,683 26,469,810
FINANCE COST 32 (61,569,188) (61,335,416)
PROFIT / (LOSS) BEFORE TAXATION 98,257,181 (416,143,982)
TAXATION 33 17,407,648 (2,197,539)
PROFIT / (LOSS) AFTER TAXATION 115,664,829 (418,341,521)
EARNINGS / (LOSS) PER SHARE - BASIC AND DILUTED 34 6.80 (24.61)
MUSTAFA ALI TARIQ AHMED ALI TARIQ

Chief Executive Officer Chairman / Director
24
Annual Report
STATEMENT OF COMPREHENSIVE INCOME

2016 2015
Rupees Rupees
PROFIT / (LOSS) AFTER TAXATION 115,664,829 (418,341,521)
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified to profit and loss account - -
Items that may be reclassified subsequently

profit and loss account:
Surplus on remeasurement of available for sale

investments - 4,868,045
- 4,868,045
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR 115,664,829 (413,473,476)

25
Annual Report
CASH FLOW STATEMENT

FOR THE YEAR ENDED 30 SEPTEMBER 2016 2016 2015
Rupees Rupees
CASH FLOW FROM OPERATING ACTIVITIES
Profit / (loss) before taxation 98,257,181 (416,143,982)

Adjustments for non-cash and other items:
Depreciation 132,761,579 125,377,248

Finance cost 61,569,188 61,335,416
Profit on bank deposits (150,777) (6,077,662)
Credit balances written back 29,057 91,403
Gain on sale of investments (19,916,481) -
Gain on disposal of operating fixed assets (1,794,481) 881,644
Fines and penalties 3,238,679
Provision for doubtful trade debts - 683,623
Provision for doubtful advances to suppliers 2,134,680 3,008,595
Provision for doubtful advances to contractors - 12,000
Margin against letter of credit written off - 1,700
Provision for doubtful miscellaneous receivables 84,842 1,719,605
Long term deposits written off - 270,000
Margins against bank guarantees written off - 117,989
OPERATING PROFIT BEFORE
WORKING CAPITAL CHANGES 276,213,467 (228,722,421)
Working capital changes
Stores, spare parts and loose tools (4,750,324) (27,278,847)

Stock-in-trade 141,155,980 (215,127,742)
Trade debts (680,950) 14,804,441
Advances (11,108,297) 7,469,449
Short term deposits and prepayments 10,298,878 9,471,317
Other receivables (61,679,164) 3,456,081
Trade and other payables (502,574,230) 305,578,740
(429,338,107) 98,373,439
CASH OUTFLOW FROM OPERATIONS (153,124,640) (130,348,982)
Finance cost paid (70,109,792) (59,498,061)

Income tax paid (20,442,125) (13,970,420)
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (243,676,557) (203,817,463)
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from disposal of operating fixed assets 5,855,224 21,324,204

Purchase of operating fixed assets (149,540,441) (183,316,927)
Proceeds from sale of investments 22,416,931 -
Net increase / decrease in long term deposits (1,908,250) 4,361,489
Profit on bank deposits received 2,038,915 4,205,325
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (121,137,621) (153,425,909)
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of liabilities against assets subject to finance lease (7,976,878) (5,456,616)

Deposit for purchase of shares received 206,240,000 296,441,833
Repayment of long term borrowings (11,491,663) (38,475,001)
Short term borrowings obtained 21,542,366 100,973,957
Loan obtained from related party 70,000,000 -
NET CASH INFLOW FROM FINANCING ACTIVITIES 278,313,825 353,484,173
NET DECREASE IN CASH AND CASH EQUIVALENTS (86,500,353) (3,759,199)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 102,706,499 106,465,698
CASH AND CASH EQUIVALENTS AT END OF THE YEAR 16,206,146 102,706,499

26
STATEMENT OF CHANGES IN EQUITY
RESERVES
Capital Revenue
SHARE
Premium on TOTAL EQUITY
CAPITAL Fair value Accumulated Total
issue of right Sub total General Sub total
reserve loss
shares
----------------------------------------------------------------------- Rupees -----------------------------------------------------------------------
Balance as at September 30, 2014 170,000,000 21,093,550 13,443,800 34,537,350 169,450,000 (594,721,521) (425,271,521) (390,734,171) (220,734,171)
Transferred from surplus on revaluation of property, plant and

equipment in respect of incremental depreciation - net of - - - - - 60,455,333 60,455,333 60,455,333 60,455,333
deferred tax
Loss for the year - - - - - (418,341,521) (418,341,521) (418,341,521) (418,341,521)
Other comprehensive income for the year - - 4,868,045 4,868,045 - - - 4,868,045 4,868,045
Total comprehensive loss for the year
- - 4,868,045 4,868,045 - (418,341,521) (418,341,521) (413,473,476) (413,473,476)
Balance as at September 30, 2015 170,000,000 21,093,550 18,311,845 39,405,395 169,450,000 (952,607,709) (783,157,709) (743,752,314) (573,752,314)
Transferred from surplus on revaluation of property, plant and

- - - - - 66,153,670 66,153,670 66,153,670 66,153,670
equipment in respect of incremental depreciation - net of
HUSEIN SUGAR MILLS LIMITED
deferred tax
Profit for the year - - (18,311,845) (18,311,845) - 115,664,829 115,664,829 97,352,984 97,352,984
Other comprehensive income for the year - - - - - - - - -
Total comprehensive income for the year - - (18,311,845) (18,311,845) - 115,664,829 115,664,829 97,352,984 97,352,984
2016
Balance as at September 30, 2016 170,000,000 21,093,550 - 21,093,550 169,450,000 (770,789,210) (601,339,210) (580,245,660) (410,245,660)
Annual Report
27
Mr. Mustafa Ali Tariq AHMED ALI TARIQ
Annual Report
NOTES TO THE FINANCIAL STATEMENTS

1. THE COMPANY AND ITS OPERATIONS
1.1 Husein Sugar Mills Limited ("the Company") is a public limited company incorporated in Pakistan
under the Companies Act, 1913 (Now the Companies Ordinance, 1984). The shares of the
Company are listed on Pakistan Stock Exchange. The Company is principally engaged in the
business of production and sale of sugar and by products. Its registered office is situated at 30-A E/1,
Old FCC, Gulberg-III, Lahore.
1.2 GOING CONCERN ASSUMPTION
The Company earned gross profit and net profit after taxation of Rupees 245.551 million and Rupees
115.665 million respectively in the current financial year, still, its equity stands at a negative balance of
Rupees 410.246 million (2015: Rupees 573.752 million) due to accumulated losses of Rupees
770.789 million (2015 Rupees 952.608 million). Continuing losses in past have resulted in erosion of
the Company's equity and depletion of working capital base. During last few years, the Company
faced financial crunch. Long term loans from banks / financial institutions could not be obtained due to
the Company's continuous loss history and adverse financial ratios.
During the year under review the sponsor directors have further introduced a significant amount
towards share deposit money enhancing the balance from Rupees 403.442 million as of 30 September
2015 to Rupees 609.682 million as of 30 September 2016. The sponsors also intend to bring further
balance of share deposit money if necessitated by the future events. This factor fairly constitutes a
tangible evidence of the continued commitment of the sponsors to support the operations of the
Company for foreseeable future. This commitment also satisfactorily addresses all consequences of
equity erosion caused by accumulated losses incurred by the Company.
The Company has been successfully able to negotiate with the National Bank of Pakistan and Bank
Islami Pakistan Limited (Islamic Banking) and win the renewal and extension of a comprehensive
working capital facility for the next year 2016-17. It is also pertinent to mention that, company has no
history of default in current year. The Company has already started draw down of the working capital
facility since its renewal.
The Company is also in the process of similar negotiations with other banks and financial institutions
for renewals /extension / fresh working capital facilities. It is reasonably expected that in view of the
precedence of continued confidence demonstrated by National Bank of Pakistan, these negotiations
will also prove to be successful.
The Company at present is not in default with any bank or financial institution and there is no adverse
remarks against the Company in the eCIB data being maintained by State Bank of Pakistan. Further,
there are no fixed terms borrowings approaching maturity and the Company is not relying on short
term borrowings to finance long term assets, as well as, there are no loan agreements which the
Company is not able to comply with.
The Company started the Crushing Season 2016-17 w.e.f 06 November 2016 and is crushing an
average quantity of sugarcane ranging between 5,500 to 6,500 Metric Tons per day. It is fortunate that
during the current year the nature has been very generous and the sugarcane crop is very rich, healthy,
and abundant. It is reasonably expected that current season is going to be a breakthrough year for the
sugar industry in the province and the Company is also going to reap the related benefits. The
Company is expected to operate for more than 130 days and produce an impressive quantity of sugar
and other by products.
28
Annual Report
An added operational advantage for the Company during the current season was that a sugar mill of
12,000 TCD capacity, which was so far sharing the sugarcane crop of the area with the Company, has
shifted to southern Punjab and thus the quantity of sugarcane available to the Company is much more
than in the preceding seasons and this additional opportunity is also going to help the Company to turn
around.
It is a fact that, owing to the typical nature of the operations of sugar industry, the total sugarcane
crushing days are the entire period during which the Company executes the revenue generation
activity for the whole financial year. It is also a fact that with the successful completion of the crushing
season it is concluded that the Company has operated for the whole year.
The ample quantity of sugarcane daily being crushed and sold by the Company, during the current
season, is a clear and absolute indication of the continued comfort and support to the Company by the
raw material suppliers (sugarcane growers) and its customers.
The Government of Pakistan has initially allowed export of 500,000 Metric Tons of sugar. This policy
decision of the Government is understandably going to have very salutary effects for the sugar industry
of the country. In line with this policy the Company is actively engaged in formalizing the contracts, for
export of sugar, mainly with customers in Afghanistan and Central Asian States.
In order to avail the benefits of the economies of scale and, the availability of abundant quantity of
sugarcane due to shifting of a 12,000 TCD mill from the area, the Company is planning to increase its
crushing capacity to 15,000 TCD in next two years phasing out as 12,000 TCD next year and 15,000
TCD in next two years.
The management is confident that these steps will bring the Company out of the existing crises and the
Company will continue as a going concern. These financial statements, therefore, do not include any
adjustment relating to realization of its assets and liquidation of any liabilities that might be necessary
should the Company be unable to continue as a going concern.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all years presented, unless otherwise stated:
2.1 Basis of preparation

a) Statement of compliance
These financial statements have been prepared in accordance with approved accounting standards as
applicable in Pakistan. Approved accounting standards comprise of such International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards Board and Islamic
Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as
are notified under the Companies Ordinance, 1984, provisions of and directives issued under the
Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the
Companies Ordinance, 1984 shall prevail.
b) Accounting convention
These financial statements have been prepared under the historical cost convention, except for
freehold land, buildings on freehold land and plant and machinery which are carried at revalued
amount and certain financial instruments which are carried at their fair value.
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Annual Report
c) Critical accounting estimates and judgements
The preparation of financial statements in conformity with the approved accounting standards requires
the use of certain critical accounting estimates. It also requires the management to exercise its
judgment in the process of applying the Company's accounting policies. Estimates and judgments are
continually evaluated and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances. The areas where various
assumptions and estimates are significant to the Company's financial statements or where judgments
were exercised in application of accounting policies are as follows:
Income taxes: In making the estimates for income taxes payable by the Company, the
management considers current income tax law and the decisions of appellate authorities on
certain cases issued in past. Where the final tax outcome is different from the amount that was
initially recorded, such differences will impact the income tax provision in the period in
which such final outcome is determined.
Useful lives, patterns of economic benefits and impairments: Estimates with respect to
residual values, useful lives and pattern of flow of economic benefits are based on the analysis
of the management of the Company. Further, the Company reviews the value of assets for
possible impairment on an annual basis. Any change in the estimates in the future might affect
the carrying amount of respective item of property, plant and equipment, with a
corresponding effect on the depreciation charge and impairment.
Inventories: Net realizable value of inventories is estimated with reference to the estimated
selling price in the ordinary course of business less estimated costs necessary to make the sales
Stores, spares and loose tools: These are valued at moving average cost less allowance for
obsolete and slow moving items. Items in transit are valued at invoice values plus other
charges incurred thereon. Stores, spares and loose tools are regularly reviewed by the
management to assess the indication for impairment in the value. Provision is made for slow
moving and obsolete store items when so identified.
Provision for doubtful debts, advances and other receivables: The Company reviews
recoverability of its trade debts, advances and other receivables on annual basis to assess
amount of bad debts and provision there against. In particular, judgment by management is
required in the estimation of the amount and timing of future cash flows when determining
the level of provision required.
Contingencies: The assessment of the contingencies inherently involves the exercise of

significant judgment as the outcome of the future events cannot be predicted with certainty.
The company, based on the availability of the latest information, estimates the value of
contingent assets and liabilities which may differ on the occurrence / non-occurrence of the
uncertain future events not wholly within the control of the Company.
The Company has disclosed significant contingent liabilities for the pending litigations and
claims against the Company based on its judgment and the advice of the legal advisors for the
estimated financial outcome. The actual outcome of these litigations and claims can have an
effect on the carrying amounts of the liabilities recognised at the balance sheet date. However,
based on the best judgment of the Company and its legal advisors, the likely outcome of these
litigations and claims is remote and there is no need to recognise any liability at the balance
sheet date.
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Annual Report
d) Standards, interpretation and amendments to published approved accounting standards that

became effective during the year
The following standards, amendments and interpretations of approved accounting standards are
effective for the Company's accounting periods beginning on or after 01 October 2015:
- IAS 28 Investments in Associates and Joint Ventures (Amendments)

- IAS 1 Presentation of Financial Statements (Amendments)
- IAS 27 Separate Financial Statements (Amendments)
- IAS 16 Property, Plant and Equipment (Amendments)
- IAS 38 Intangible Assets (Amendments)
The adoption of above accounting standards and amendments above did not have any material effect
on the financial statements.
e) Standards, interpretation and amendments to published approved accounting standards that are not
yet effective
Following standards and amendments to existing standards have been published and are mandatory
for the Company's accounting periods beginning from dates specified below:
IASB effective date
Standard / Amendments (annual periods
beginning on after)
- IAS 7 Cash Flow Statements January 1, 2017
(Amendments resulting from disclosure initiative issued on 29 January, 2016)
- IAS 12 Income Taxes January 1, 2017
(Amendments regarding recognition of deferred tax assets for unrealized losses
issued on 19 January, 2016)
- IFRS 15 Revenue from Contracts with Customers January 1, 2018
(Standard was issued by IASB on 12 April, 2016)
- IFRS 2 Share-Based Payments January 1, 0
218
(Amendments regarding classification and measurement -of share based payment
transactions on 20 June, 2016)
- IFRS 16 Leases January 1, 2019
(Standard was issued by IASB on 13 January, 2016)
2.2 Share capital
Ordinary shares issued represent the equity.
2.3 Dividend and other appropriations
Dividend distribution to the shareholders is recognized as a liability in the Company's financial

statements in period in which the dividends are declared and other appropriations are recognized in
the period in which these are approved by the Board of Directors.
2.4 Surplus on revaluation of property, plant and equipments
The Company follows the requirement of section 235 of the Companies Ordinance, 1984 and
accordingly the surplus arising on revaluation of property, plant and equipment is credited to the
"Surplus on revaluation of property, plant and equipment"' account shown below equity in the
balance sheet and deferred tax, if any, attributed to the surplus is credited to deferred tax liability.
Following amounts are transferred from " Surplus on Revaluation of Fixed Assets account" to Retained
Earnings through Statement of Changes in Equity to record realization of surplus:
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Annual Report
- an amount equal to incremental depreciation on revaluation surplus on property, plant and

equipment for the year net of deferred taxation, if any; or
- an amount equal to carrying amount of revaluation surplus on property, plant and equipment
net of deferred taxation, if any, on its disposal;
2.5 Financial instruments
Financial Instruments carried on the balance sheet include, deposits, trade debts, advances, other
receivables, cash and bank balances, short-term borrowings, accrued mark-up, trade and other
payables, liabilities against assets subject to finance lease and long term finance. Financial assets and
liabilities are recognized initially at fair value when the Company becomes a party to the contractual
provisions of instrument.
The particular measurement methods adopted are disclosed in the following individual policy
statements associated with each item. Financial assets are derecognized when the Company loses
control of the contractual rights that comprise the financial asset. The Company loses such control if it
realizes the rights to benefits specified in contract, the rights expire or the Company surrenders those
rights. Financial liabilities are derecognized when the obligation specified in the contract is
discharged, cancelled or expired. Any gain or loss on subsequent measurement (except available for
sale investments) and de recognition is charged to the profit and loss account currently.
Offsetting of financial assets and liabilities
Financial assets and liabilities are offset when the Company has a legally enforceable right to offset and
intends to settle either on a net basis or to realize the asset and settle the liability simultaneously.
2.6 Taxation
Current
Provision for current taxation is calculated as payable tax after taking into account tax credits, rebates
and exemptions available, if any, plus tax deducted to be treated as full and final discharge. Payable tax
is higher of normal tax at corporate tax rate applied to taxable income; or minimum taxation at the rate
of 1% of the turnover in case there is gross profit; or alternative corporate tax at the rate of 17% of
accounting profit adjustable as per income tax laws. For income covered under Final Taxation Regime
(FTR), taxation is based on the applicable tax rates under such Regime.
Deferred
Deferred tax is recognized using the balance sheet liability method on all temporary differences
between the carrying amounts of assets and liabilities for the financial reporting purposes and the
amounts used for taxation purposes.
Deferred tax liability is recognized for all the taxable temporary differences. Deferred tax asset is
recognized for all the deductible temporary differences only to the extent that it is probable that future
taxable profits will be available against which the asset may be utilized. Significant management
judgment is required to determine the amount of deferred tax assets that can be recognized, based
upon the likely timing and level of future taxable profits together with future tax planning strategies.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
when the asset is realized or the liability is settled, based on the tax rates that have been enacted or
substantively enacted by the balance sheet date. The Company recognizes deferred tax liability on
surplus on revaluation of property, plant and equipment which is adjusted against the related surplus.
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Annual Report
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in
profit or loss, except where they relate to items that are recognised in other comprehensive income
(such as the revaluation of property, plant and equipment) or directly in equity, in which case the
related deferred tax is also recognised in other comprehensive income or equity, respectively.
2.7 Borrowings
Borrowings are recognized initially at fair value and are subsequently stated at amortized cost, any
difference between the proceeds and the redemption value is recognized in the profit and loss account
over the period of the borrowings using the effective interest rate method.
Trade and other payables
Liabilities for trade and other amounts payable are initially recognized at fair value, which is normally
the transaction cost.
2.9 Provisions
Provisions are recognized when the Company has a present legal or constructive obligation as a result
of past events and it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate of the obligation can be made. However,
provisions are reviewed at each balance sheet date and adjusted to reflect current best estimate.
2.10 Contingencies and commitments

The assessment of the contingencies inherently involves the exercise of significant judgment as the
outcome of the future events cannot be predicted with certainty. The company, based on the
availability of the latest information, estimates the value of contingent assets and liabilities which may
differ on the occurrence / non-occurrence of the uncertain future events not wholly within the control
of the Company.
The Company has disclosed significant contingent liabilities for the pending litigations and claims
against the Company based on its judgment and the advice of the legal advisors for the estimated
financial outcome. The actual outcome of these litigations and claims can have an effect on the
carrying amounts of the liabilities recognized at the balance sheet date. However, based on the best
judgment of the Company and its legal advisors, the likely outcome of these litigations and claims is
remote and there is no need to recognize any liability at the balance sheet date.
Property, plant and equipment
Operating fixed assets - tangible
Owned
Property, plant and equipment except freehold land, buildings on freehold land and plant and
machinery are stated at cost less accumulated depreciation and accumulated impairment losses (if
any). Freehold land is stated at revalued amount less accumulated impairment losses (if any). Buildings
on freehold land and plant and machinery are stated at revalued amount less accumulated
depreciation and accumulated impairment losses (if any). Cost of property, plant and equipment
consists of historical cost, borrowing cost pertaining to erection / construction period of qualifying
assets and other directly attributable cost of bringing the asset to working condition.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as
appropriate, only when it is probable that future economic benefit associated with item will flow to the
Company and the cost of the item can be measured reliably. All other repair and maintenance costs are
charged to profit and loss account during the period in which they are incurred.
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Annual Report
Any revaluation surplus is credited to surplus on revaluation of operating fixed assets except to the
extent that it reverses a revaluation decrease of the same asset previously recognized in profit or loss, in
which case the increase is recognized in profit or loss. A revaluation deficit is recognized in profit or
loss, except to the extent that it offsets an existing surplus on the same asset recognized in surplus on
revaluation of operating fixed assets.
Leased
Finance leases
Leases where the Company has substantially all the risk and rewards of ownership are classified as
finance lease. Assets subject to finance lease are capitalized at the commencement of the lease term at
the lower of present value of minimum lease payments under the lease agreements and the fair value
of the leased assets, each determined at the inception of the lease.
The related rental obligation net of finance cost is included in liabilities against assets subject to finance
lease. The liabilities are classified as current and long term depending upon the timing of payments.
Each lease payment is allocated between the liability and finance cost so as to achieve a constant rate
on the balance outstanding. The finance cost is charged to income over the lease term.
Depreciation of assets subject to finance lease is recognized in the same manner as for owned assets in
view of certainty of ownership of assets at the end of the lease period. Depreciation of the leased assets
is charged to profit and loss account.
Operating lease
Leases where significant portion of the risk and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases are charged to the income on a
straight-line basis over the period of lease. Considering the S.R.O 431 (I) 2007 dated May 22, 2007
issued by Securities and Exchange Commission of Pakistan, vehicles obtained under the Ijarah
arrangements are treated as operating lease. Rents payable under Ijarah arrangements are recognized
as an expense in the profit and loss account on a straight-line basis over the Ijarah term.
Capital work in progress
It is stated at cost less identified impairment losses, if any. All expenditure including applicable
borrowing costs, if any, connected with specific assets incurred during installation and construction
period are carried under capital work-in-progress. These are transferred to specific assets as and when
these are available for use.
De recognition
An item of property, plant and equipment is de-recognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on de recognition of the asset is
included in the profit and loss account in the year the asset is de-recognized.
Depreciation
Depreciation on all operating fixed assets is charged to profit and loss account applying the reducing
balance method so as to write off the depreciable amount of the assets over their estimated useful lives
at the rates given in Note 16.1. The residual values and useful lives are reviewed by the management at
each financial year end and adjusted if impact on depreciation is significant. Depreciation on additions
is charged from the date on which the assets are available for use and on deletions upto the date on
which the assets are deleted.
2.12 Investments
The Company's management determines the appropriate classification of its investments at the time of
purchase
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Annual Report
Investments are initially measured at fair value plus transaction costs directly attributable to
acquisition, except for "investment at fair value through profit and loss account" which is initially
measured at fair value.
Investment at fair value through profit and loss account
Investment classified as held-for-trading and those designated as such are included in this category.
Investments are classified as held-for-trading if they are acquired for the purpose of selling in the short
term.
Gains or losses on investments held-for-trading are recognized in profit and loss account.
Held-to-maturity
Investments with fixed or determinable payments and fixed maturity are classified as held-to-maturity
when the Company has the positive intention and ability to hold to maturity. Investments intended to
be held for an undefined period are not included in this classification. Other long-term investments
that are intended to be held to maturity are subsequently measured at amortized cost. This cost is
computed as the amount initially recognized minus principal repayments, plus or minus the
cumulative amortization using the effective interest rate method of any difference between the initially
recognized amount and the maturity amount. For investments carried at amortized cost, gains and
losses are recognized in profit and loss account when the investments are derecognized or impaired,
as well as through the amortization process.
Available-for-sale
Investments intended to be held for an indefinite period of time, which may be sold in response to
need for liquidity, or changes to interest rates or equity prices are classified as available-for-sale.
After initial recognition, investments which are classified as available-for-sale are measured at fair
value. Gains or losses on available-for-sale investments are recognized directly in statement of
comprehensive income until the investment is sold, derecognized or is determined to be impaired, at
which time the cumulative gain or loss previously reported in statement of comprehensive income is
included in profit and loss account.
For investments that are actively traded in organised financial markets, fair value is determined by
reference to stock exchange quoted market bids at the close of business on the balance sheet date. For
investments where there is no quoted market price, fair value is determined by reference to the current
market value of another instrument which is substantially the same or is calculated based on the
expected cash flows of the underlying net asset base of the investment.
2.13 Impairment
Financial assets
A financial asset is considered to be impaired if objective evidence indicate that one or more events
had a negative effect on the estimated future cash flow of that asset.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as a

difference between its carrying amount and the present value of estimated future cash flows
discounted at the original effective interest rate. An impairment loss in respect of available for sale
financial asset is calculated by reference to its current fair value.
Significant financial assets are tested for impairment on an individual basis. The remaining financial
assets are assessed collectively in groups that share similar credit risk characteristics.
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Annual Report
Non-financial assets
The carrying amounts of assets are reviewed at each balance sheet date for impairment whenever
events or changes in circumstances indicate that the carrying amounts of the assets may not be
recoverable. If such indication exists, and where the carrying value exceeds the estimated recoverable
amount, assets are written down to their recoverable amounts. The resulting impairment loss is taken
to the profit and loss account except for impairment loss on re valued assets, which is adjusted against
the related revaluation surplus to the extent that the impairment loss does not exceed the surplus on
revaluation of that asset.
Inventories
2.14 Inventories, except for stock in transit, molasses, bagasse and press mud are stated at lower of cost and
net realizable value. Cost is determined as follows:
Stores, spare parts and loose tools
Useable stores, spare parts and loose tools are valued principally at moving average cost, while items
considered obsolete are carried at nil value. Items in transit are valued at cost comprising invoice value
plus other charges paid thereon.
Stock-in-trade
Stock comprises of refined sugar, press mud and molasses and sugar in process. Work-in-process and
finished good of sugar is valued at the average annual production cost, which comprise cost of direct
material, labour and appropriate manufacturing overheads.
Molasses (finished good), bagasse and press mud are valued at their net realizable value.
Net realizable value is determined on the basis of the estimated selling price of the product in the
ordinary course of business less estimated costs of completion and estimated costs necessary to make a
sale.
2.15 Trade debts
Trade debts originated by the Company are recognized and carried at original invoice amount less
provision for any uncollectible amounts. Provision for doubtful debts is based on the management's
assessment of customer's outstanding balances and credit worthiness. Bad debts are written-off, when
there is no realistic prospect of recovery.
2.16 Advances and other receivables
These are carried at cost which is the fair value of the consideration to be received in future less any
estimate made for balances doubtful of recovery based on review of balances outstanding at the year
end. Balances considered bad by the management are written off as and when identified.
2.17 Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of cash flow
statement, cash and cash equivalents comprise cash in hand, cash at banks on current, saving and
deposit accounts and other short term highly liquid instruments that are readily convertible into known
amounts of cash and which are subject to insignificant risk of changes in values.
2.18 Revenue recognition
Revenue from sales is recognized on delivery of goods to customers.

Dividend income is recognized when the right to receive the cash is established.
Return on bank deposits is accrued on a time proportionate basis by reference to the principal
outstanding and the applicable rate of return.
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Annual Report
2.19 Borrowing cost
Interest, mark-up and other charges on long-term financing are capitalized up to the date of
commissioning of the respective qualifying assets acquired out of the proceeds of such borrowings. All
other interest, mark-up and other charges are charged to income.
2.20 Staff retirement benefits
The Company operates a funded provident fund scheme covering all permanent employees. Equal
monthly contributions are made to the fund both by the Company and employees at the rate of 10
percent of basic pay plus cost of living allowance.
2.21 Foreign currencies
The financial statements are presented in Pak Rupees, which is the Company's functional currency.
Transactions in foreign currency during the year are initially recorded in the functional currency at the
rates prevailing at the date of transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at functional currency rates of exchange prevailing at the balance sheet
date. All differences are taken to the profit and loss account.
2.22 Earning per share (EPS)
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares outstanding during the year.
Diluted EPS is calculated by adjusting basic EPS by the weighted average number of ordinary shares
that would be issued on conversion of all dilutive potential ordinary shares into ordinary shares and
post-tax effect of changes in profit or loss attributable to ordinary shareholders of the Company that
would result from conversion of all dilutive potential ordinary shares into ordinary shares.
2.23 Related party transaction
All transactions arising in the normal course of business and are conducted at arm's length at normal
commercial rate on the same terms and conditions as third party transactions using valuation modes as
admissible, except in rarely extreme circumstances where, subject to approval of the Board of
Directors, it is in the interest of the company to do so. Parties are said to be related if they are able to
influence the operating and financial decisions of the company and vice versa.
Operating segments
An operating segment is a component of the company that engages in business activities from which it
may earn revenues and incur expenses, including revenues and expenses that relates to transactions
with any of the company's other components. Operating segments are reported in a manner consistent
with the internal reporting structure based on the operating (business) segments of the company. An
operating segment's operating results are regularly reviewed by the management and the chief
executive officer for the purpose of making decisions regarding resource allocation and performance
assessment.
Segment results, assets and liabilities include items directly attributable to segment as well as those that
can be allocated on a reasonable basis. Segment assets, consist primarily of property, plant and
equipment, intangibles, stores and spares, stock in trade and other debts. Segment liabilities comprise
of operating liabilities and exclude items that are common to all operating segments.
Accounting policies of the reportable segments are the same as the Company's accounting policies
described in this note. Inter-segment transactions are recorded at fair value. Segment capital
expenditure is the total cost incurred during the year to acquire property, plant and equipment and
intangible assets.
The Company has only one reportable segment (manufacturing and sale of refined sugar) on the basis
of product characteristics and the criteria defined by the IFRS 8, "Segment Reporting".
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Annual Report
3. ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL 2016 2015
2016 2015 Note Rupees Rupees
(Number of shares)
8,156,250 8,156,250 Ordinary shares of Rs. 10 each, 81,562,500 81,562,500
fully paid in cash
161,900 161,900 Ordinary shares of Rs. 10 each, fully 1,619,000 1,619,000
paid for consideration other than cash
8,681,850 8,681,850 Ordinary shares of Rs. 10 each, 86,818,500 86,818,500
issued as fully paid bonus shares
17,000,000 17,000,000 170,000,000 170,000,000
RESERVES
4. Composition of reserves is as follows:
Capital
Premium on issue of right shares 4.1 21,093,550 21,093,550
Fair value reserve 4.2 - 18,311,845
21,093,550 39,405,395
Revenue
General 169,450,000 169,450,000

Accumulated loss (770,789,210) (952,607,709)
(601,339,210) (783,157,709)
(580,245,660) (743,752,314)
4.1 This reserve can be utilized by the Company only for the purposes specified in Section 83(2) of
the Companies Ordinance, 1984.
4.2 This represented unrealized gain on remeasurement of available for sale investments and is not
available for distribution. It is being transferred to profit and loss account on realization of
investments during the year.
5. DEPOSIT FOR PURCHASE OF SHARES - RELATED PARTIES
5.1 It was received from the following directors of the Company:
Mr. Mustafa Ali Tariq 309,905,833 116,115,833
Mr. Ahmed Ali Tariq 299,776,000 287,326,000
609,681,833 403,441,833
5.2 It represents the sponsoring directors' funding that was extended to the company for its working
capital requirements, which will be converted into equity of the company after complying with
the necessary legal formalities in due course of time.
6. SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT - NET OF DEFERRED TAX
Gross surplus
Balance as at October 01, 1,894,364,976 1,983,269,877
Less: Incremental depreciation for the year 94,505,243 88,904,901
Balance as at September 30, 1,799,859,733 1,894,364,976
Less: Deferred tax attributed to surplus 6.1 346,311,153 399,640,242

Net surplus 1,453,548,580 1,494,724,734
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Annual Report
2016 2015
Note Rupees Rupees
6.1 Reconciliation of deferred tax attributed to surplus
Balance as at October 01, 399,640,242 441,467,617
Incremental depreciation for the year (28,351,573) (28,449,568)
Tax rate adjustment (24,977,516) (13,377,807)
Balance as at September 30, 346,311,153 399,640,242
7. LONG TERM BORROWINGS
From banking company - secured & interest bearing
MCB Bank Limited 7.1 - 11,491,663
Less: Current portion shown under current liabilities 14 - (11,491,663 )
- -
7.1 It represented the diminishing musharaka facility amounting to Rs. 149.9 million obtained to
enhance the production efficiency of the company. This facility was secured against the ranking
charge over the present and future assets (both current and fixed) of the Company to the extent
of Rs. 199.867 million with 25% margin and personal guarantees of two directors of the
Company. Mark-up was payable on quarterly basis at the rate of 3 months KIBOR plus 2.50%
per annum. Effective rate of mark-up ranged from 10.47% to 12.68% per annum. This facility
was repayable in 12 quarterly installments however at October 1, 2015 it was overdue. This
overdue amount has been paid off during the year and NOC has been obtained from the
bank in this regard.
8. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE
Future minimum lease payments - 7,980,429
Less: Un-amortized finance charges - 3,551
Present value of future minimum lease payments - 7,976,878
Less: Current portion shown under current liabilities 14. - (7,976,878)
- -
8.1 Minimum lease payments were discounted using implicit interest rates ranging from 10% to
12.93% per annum. Balance rentals are payable in monthly installments. Taxes, repairs and
insurance costs are to be borne by the Company. In case of termination of the agreement, the
Company had to pay entire amount of rentals for unexpired period of lease agreement. These
were secured against the leased assets, demand promissory notes, personal guarantees of
directors and security deposits of Rs. Nil( 2015: Rs. 7.315 million) (refer to note-18). As at
October 1, 2015, outstanding balance of liabilities against assets subject to finance lease was
overdue. However, during the current year it has been paid off and NOC has been obtained
from bank / leasing company in this regard.
8.2 Minimum lease payments and their present values are regrouped as under:
2016 2015
Later than one
Not later than Later than one Not later than year but not
one year year but not later one year later than five
than five years years
------------------------------- Rupees --------------------------------
Future minimum lease payments - - 7,980,429 -
Less: Un-amortized finance charges - - 3,551 -
Present value of future minimum lease
payments - - 7,976,878 -
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Annual Report
2016 2015
9. DEFERRED TAX LIABILITY Note Rupees Rupees
The (liability) / asset for deferred taxation comprises temporary differences arising due to:
Taxable temporary differences
Accelerated tax depreciation (105,332,463) (104,255,692)
Finance lease - (3,238,948)
Surplus on revaluation of property, plant and equipment (346,311,153) (399,640,242)
(451,643,616) (507,134,882)
Deductible temporary differences
Provision against doubtful assets 2,551,921 -
Available tax losses 273,016,058 337,083,275
Turnover tax available for carry forward 26,367,178 -
Less : Deferred tax asset not recognized (59,876,647) (112,275,355)
9.2
242,058,510 224,807,920
Net deferred tax liability (209,585,106) (282,326,962)
9.1 Reconciliation of deferred tax (income) / expense for the year
Opening deferred tax liability (282,326,962) (295,704,769)
Deferred tax attributed to revaluation surplus due to change in tax rate 24,977,516 13,377,807
Closing deferred tax liability 209,585,106 282,326,962
Change in tax rate from last year (7,332,080) -
Net deferred tax (income) / expense recognized for the year (55,096,420) -
9.2 The deferred tax assets amounting to Rs. 299,383,236 mainly owing to tax losses and minimum
tax, are recognized in these financial statements only to the extent of 80%, as it is not probable
that sufficient taxable profit will be available to utilize the remaining assets i.e. unused losses
and tax credits in the foreseeable future.
10. TRADE AND OTHER PAYABLES
Creditors 579,968,596 830,128,876
Advances from customers 51,139,692 361,833,509
Security deposits - interest free 10.1 26,321,414 26,012,743
Accrued liabilities 30,744,368 36,389,496
Income tax deducted at source payable 11,487,594 6,128,782
Taxes and duties payable 30,542,025 3,900,220
Payable to provident fund trust - related party 10.2 23,546,693 11,387,868
Worker's profit participation fund payable 5,171,431 -
Unclaimed dividend 1,208,842 1,208,842
Ijarah rentals payable 103,908 -
Others 2,035,269 3,303,245
762,269,832 1,280,293,581
10.1 Security deposits - interest free
It includes:
Dealers security deposit 18,483,000 18,483,000
Employee vehicle deposit 10.1.1 7,838,414 7,529,743
26,321,414 26,012,743
40
Annual Report
10.1.1 It includes deposit received from executives of the company amounting to Rs. 2,177,268 (2015:
Rs. 1,851,810).
10.2 It includes mark-up payable to provident fund amounting to Rs. 4,068,137 (2015: Rs.3,248,829)
accrued at the rate of 6% per annum (2015: 7% per annum).
11. ACCRUED MARK-UP ON SECURED BORROWINGS 2016 2015

Note Rupees Rupees
From banking companies
Long term borrowing - 214,993
Short term borrowings 5,334,298 13,514,049
Liabilities against assets subject to finance lease - 145,860
5,334,298 13,874,902
12. SHORT TERM BORROWINGS
From banking companies - secured
Cash finance 12.1 49,995,092 99,949,411
Agricultural finance 12.2 139,505,000 142,455,000
Istisna finance 12.3 249,446,685 175,000,000
438,946,777 417,404,411
12.1 This cash finance facility has been obtained from National Bank of Pakistan, out of the total sanctioned
limit of Rs. 50 million (2015: Rs. 100 million), to meet working capital requirements of the company.
It carries markup at the rate of 3 months KIBOR + 3% (2015: 3 months KIBOR + 2.5%) per annum,
payable quarterly and effective rate of markup ranges from 8.99% to 9.35% (2015: 9.51% to 12.68%)
per annum. It is secured by way of first pari passu charge over all present and future assets (both fixed
and current) of the company to the extent of Rs. 134 million (2015: Rs. 134 million) with a margin of
25% on hypothecated current and fixed assets, pledge of refined sugar in standard bags of 50 kgs each
in shared godowns with a margin of 25% on pledge of sugar or as per SBP, ranking charge of
Rs. 400 million (2015: Rs. 400 million) already registered with SECP over fixed assets of the company
as additional security and personal guarantees of two directors of the company.
12.2 This agricultural finance facility has been obtained from Bank of Punjab, out of the total sanctioned
limit of Rs. 140.155 million (2015: Rs. 150 million), for adjustment purposes only. It carries markup
at the rate of 3 months KIBOR + 3% (2015: 6 months KIBOR + 3%) per annum, payable quarterly
and effective rate of markup ranges from 8.93% to 9.67% (2015: 10.05% to 13.21%) per annum.
It is secured by way of first pari passu charge over all present and future fixed assets of the company
to the extent of Rs. 180 million (2015: Rs. 180 million), corporate guarantee of the company and
personal guarantees of two directors of the company.
12.3 This istisna finance facility has been obtained from Bank Islami Pakistan Limited, out of total
sanctioned limit of Rs. 250 million (2015: Rs. 200 million) for production of sugar. It carries profit
at the rate of respective KIBOR + 3% (2015: respective KIBOR + 3%) per annum, payable
quarterly and effective rate of markup ranges from 9.35% to 9.36% (2015: 9.99% to 10.69%) per
annum. It is secured by way of ownership of Istisna goods, first pari passu charge over all future
and present current assets of the company to the extent of Rs. 234 million (2015: Rs. 234 million),
ranking charge over all future and present fixed assets of the company to the extent of Rs. 334
million (2015: Rs. 334 million) and personal guarantees of all the directors of the company.
41
Annual Report
12.4 In addition to above, the company has unavailed Istisna facility from Meezan Bank Limited
amounting to Rs. 500 million (2015: Rs. 300 million) for purchase of raw material, stores &
spares and to meet working capital requirements of the company. This facility is secured against
ranking charge over all current and fixed assets of the company amounting to Rs. 667 million
(2015: Rs. 400 million), pledge of white crystalline refined sugar with a margin of 25% on sugar
placed in covered godowns, personal guarantees of three directors of the company and cross
corporate guarantee of Messrs Styles and Trends (Pvt) Limited, an associated undertaking of the
company.
12.5 The company has total credit facilities from all the banks as mentioned in notes 12.1 to 12.4 above,
amounting to Rs. 950 million (2015: Rs. 307.6 million) that remained unutilized at the terminal date.
2016 2015
Note Rupees Rupees
13. LOAN FROM RELATED PARTY
Unsecured and interest free 70,000,000 -
13.1 This represents loan obtained from the sponsoring director of the company to bridge / assist
its working capital requirements. It is unsecured, interest free and payable on demand.
14. CURRENT PORTION OF NON-CURRENT LIABILITIES
Long term borrowing 7 - 11,491,663
Liabilities against assets subject to finance lease 8 - 7,976,878
- 19,468,541
15. CONTINGENCIES AND COMMITMENTS

15.1 Contingencies
15.1.1 The tax department raised demand of Rs. 44.039 million in show cause notice issued to the
Company on 10 November, 2014, alleging that the Company charged federal excise duty (FED) at
the rate of 0.5% instead of 8% on local supplies made during the period from January 2014 to
June 2014 against quantity of white crystalline sugar exported to Afghanistan which was not in
accordance with clause (d) of SRO 77(1)/2013 dated 07 February, 2013. Consequently, the
Company filed a writ petition against this notice in the Honorable Lahore High Court, Lahore on
the basis that the FED at the rate of 0.5% has been charged as allowed by the order dated 08
November, 2013 passed in W.P No. 4927/2013, which declared that clause (d) of SRO
No. 77/2013 is unlawful. The writ petition filed by the Company is in the process of hearing. The
company has also filed appeal before CIR (Appeals) Lahore, on this issue, pending adjudication at
the terminal date. Based on the advice of the legal counsel, the management expects a favorable
outcome of the matter. Hence, no provision has been made in these financial statements.
15.1.2 During the previous year, Deputy Commissioner Inland Revenue raised Sales tax demand of
Rs. 15.402 million along with penalty / default surcharge amounting to Rs. 0.508 million on the
basis of audit conducted by the tax department for the period from July 2012 to June 2013. The
Company filed an appeal before the Commissioner Inland Revenue (Appeals) against the order of
Deputy Commissioner Inland Revenue. The Commissioner Inland Revenue (Appeals) deleted the
demand of Rs. 14.209 million along with penalty / default surcharge amounting to Rs. 0.426
million. Against the remaining demand of Rs. 1.193 million along with penalty there on amounting
to Rs. 0.082 million, the Company has filed an appeal before Appellate Tribunal Inland Revenue
which is still pending for hearing. The management of the Company based on advice of legal
counsel expects a favorable outcome of the appeal, hence, no provision has been made in these
financial statements.
15.1.3 As a result of withholding tax audit for the tax year 2010, the Deputy Commissioner Inland Revenue
raised a demand of Rs. 7.264 million under sections 161 / 205 of the Income Tax Ordinance, 2001.
Currently, the Company is in appeal before Appellate Tribunal Inland Revenue against this demand
pending adjudication. The Company expects a favorable outcome of the appeal based on advice of
the tax counsel, hence, no provision has been made in these financial statements.
42
Annual Report
15.1.4 The case of the company has been selected for the income tax audit for the tax year 2009, by the
Commissioner Inland Revenue, Large Taxpayer Unit, Lahore under section 177 of the Income Tax
Ordinance, 2001. The company filled write petition before the Honorable Lahore High Court,
Lahore against this selection. The Honorable Lahore High Court, Lahore has declared the selection
as valid and directed the department to disclose the reason for selection of audit in writing, provide
them an opportunity of hearing, decide the objections through reason orders and proceed further
(if necessary) justly, fairly, and strictly in accordance with the law. The department has now taken
up the proceedings and sent reasons of selection. The company is in the process of filling the reply
against the reasons / justification of selections at the terminal date.
15.1.5 For the tax years 2010 and 2011, the Income Tax Department has created tax demand of Rs. 21.4
million under section 161 / 205. The cases has been decided against the company by learned CIR
(Appeals) Lahore. The company filled second appeals before the Honorable Appellate Tribunal
Inland Revenue Lahore, pending adjudication at the terminal date. The Company expects a
favorable outcome of the appeal based on advice of the tax counsel, hence, no provision has been
made in these financial statements.
15.1.6 The Department has filled reference before the Honorable Lahore High Court Lahore, against the
order of the Appellate Tribunal Inland Revenue, Lahore, deleting the tax demand of Rs. 17.3 million
for the assessment years 2001-2002 and 2002-2003. This reference have not been heard so far.
pending adjudication at the terminal date. The Company expects a favorable outcome of the appeal
based on advice of the tax counsel, hence, no provision has been made in these financial statements.
15.1.7 Company has given counter guarantee amounting to Rs. 820 million (2015: Rs. 354 million) and
ranking charge over the current assets of the Company given as security against Murabah facility
obtained from Bank Islami Pakistan Limited on account of agricultural loan to growers of sugar cane.
15.1.8 Company has given corporate gurantee of 350 million ( 30 September 2015: Rs.Nil ) to Apna
Microfinance Bank Limited on account of cane growers.
2016 2015
Note Rupees Rupees
15.2 Commitments
Company is committed to pay the following ijarah rentals:
Due within one year 1,246,896 -

Due after one year but not later than five years 4,571,952 -
5,818,848 -
16. PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets 16.1 2,388,975,515 2,516,399,289
Capital work-in-progress 16.2 233,726,179 93,584,286

2,622,701,694 2,609,983,575
43
14.1 Operating Fixed Assets - Tangible
COST / REVALUED AMOUNT ACCUMULATED DEPRECIATION Net book

Balance Additions Transfer Deletion Balance Balance For the Transfer Deletion Balance value
as at as at as at as at
44
Rate year as at
1-Oct-15 30-Sep-16 % 1-Oct-15 30-Sep-16 30-Sep-16
Owned
Freehold land 649,089,430 - - - 649,089,430 - - - - - - 649,089,430
Buildings on freehold land 539,221,222 - - - 539,221,222 10 92,407,897 44,681,333 - - 137,089,230 402,131,992
Plant and machinery 2,048,519,304 8,819,639 - - 2,057,338,943 5 697,261,697 80,047,274 - - 777,308,971 1,280,029,972
Stand by equipments 2,625,683 - - - 2,625,683 10 716,779 190,890 - - 907,669 1,718,014
Factory equipments 7,294,540 - - - 7,294,540 10 5,942,793 135,175 - - 6,077,968 1,216,572
Gas and electric installations 16,653,842 341,694 - - 16,995,536 10 9,313,103 744,927 - - 10,058,030 6,937,506
Railway sidings 492,072 - - - 492,072 5 492,072 - - 492,072 -
Furniture and fixtures 4,253,831 13,006 - - 4,266,837 10 3,381,930 87,521 - - 3,469,451 797,386
Office equipments 7,226,100 204,909 - - 7,431,009 20 5,347,338 404,447 - - 5,751,785 1,679,224
Computer equipments 5,327,917 19,300 - - 5,347,217 30 4,420,060 275,942 - - 4,696,002 651,215
Vehicles 69,308,704 - 29,808,348 (6,477,665) 92,639,387 20 32,039,198 4,990,325 13,302,582 (2,416,922) 47,915,183 44,724,204
3,350,012,645 9,398,548 29,808,348 (6,477,665) 3,382,741,876 851,322,867 131,557,834 13,302,582 (2,416,922) 993,766,361 2,388,975,515
Assets subject to finance lease

Vehicles 29,808,348 - (29,808,348) - - 20 12,098,837 1,203,745 (13,302,582) - - -
Rupee's - 2016 3,379,820,993 9,398,548 - (6,477,665) 3,382,741,876 863,421,704 132,761,579 - (2,416,922) 993,766,361 2,388,975,515
COST / REVALUED AMOUNT ACCUMULATED DEPRECIATION Net book

Balance Additions Transfer Deletion Balance Balance For the Transfer Deletion Balance Value
as at as at Rate as at year as at as at
1-Oct-14 30-Sep-15 % 1-Oct-14 30-Sep-15 30-Sep-15
Owned
Freehold land 649,089,430 - - - 649,089,430 - - - - - - 649,089,430
Buildings on freehold land 539,221,222 - - - 539,221,222 10 42,761,972 49,645,925 - - 92,407,897 446,813,325
Plant and machinery 1,904,295,311 144,223,993 - - 2,048,519,304 5 631,109,311 66,152,386 - - 697,261,697 1,351,257,607
Stand by equipments 2,625,683 - - - 2,625,683 10 504,679 212,100 - - 716,779 1,908,904

Factory equipments 7,294,540 - - - 7,294,540 10 5,792,599 150,194 - - 5,942,793 1,351,747
Gas and electric installations 12,674,800 3,979,042 - - 16,653,842 10 8,602,172 710,931 - - 9,313,103 7,340,739
Railway sidings 492,072 - - - 492,072 5 492,072 - - - 492,072 -
Furniture and fixtures 4,253,831 - - - 4,253,831 10 3,285,052 96,878 - - 3,381,930 871,901
Office equipments 6,977,600 248,500 - - 7,226,100 20 4,898,460 448,878 - - 5,347,338 1,878,762
2016
Computer equipments 4,619,617 708,300 - - 5,327,917 30 4,161,512 258,548 - - 4,420,060 907,857

Vehicles 36,937,855 25,783,309 13,082,260 (6,494,720) 69,308,704 20 26,431,036 4,387,803 5,709,231 (4,488,872) 32,039,198 37,269,506
Annual Report
3,168,481,961 174,943,144 13,082,260 (6,494,720) 3,350,012,645 728,038,865 122,063,643 5,709,231 (4,488,872) 851,322,867 2,498,689,778
Assets subject to finance lease

Vehicles 42,890,608 - (13,082,260) - 29,808,348 20 14,494,463 3,313,605 (5,709,231) - 12,098,837 17,709,511
Rupee's - 2015 3,211,372,569 174,943,144 - (6,494,720) 3,379,820,993 742,533,328 125,377,248 - (4,488,872) 863,421,704 2,516,399,289
Annual Report
16.1.1 The Company had its freehold land, building on free hold land and plant and machinery
situated at its plant site revaluated by, independent valuers namely Messrs Unicorn
International Surveyors and Messrs SAMA Engineering Associates, both approved by
Pakistan Banks' Association (PBA). Fresh revaluation exercise of free hold land was
carried out on March 31, 2014 and of building on free hold land and plant and machinery
was carried out on September 30, 2014. The basis used for revaluation were as follows:
Free hold land

Fair market value of freehold land was assessed through survey of land, taking into
consideration, the land specifications, inquiries from property dealers / estate agents, recent
matured transactions in the vicinity and market trends.
Building on free hold land
Construction specifications were noted for each building and structure and new construction
rates are applied according to construction specifications for current replacement values.
After determining current replacement values, depreciation was calculated to determine
the current assessed market value.
Plant and machinery

Current replacement cost was determined by collecting information regarding current prices
of comparable sugar plant from suppliers and different sugar plant consultants in Pakistan
and abroad. Fair depreciation factor for each item is applied according to their physical
condition, usage and maintenance.
16.1.2 Had the revaluations of these assets not been made, the carrying value of these assets as at
September 30, 2016 would have been as under:
45
2016 2015
Accumulated Accumulated
Cost Net book value Cost Net book value
depreciation depreciation
46
---------------- Rupees ----------------- ---------------- Rupees -----------------
Freehold land 3,600,212 - 3,600,212 3,600,212 - 3,600,212
Buildings on freehold land 98,903,852 53,428,929 45,474,923 98,903,852 48,376,160 50,527,692
Plant and machinery 1,159,875,654 677,559,127 482,316,527 1,151,056,015 652,388,533 498,667,482
1,262,379,718 730,988,056 531,391,662 1,253,560,079 700,764,693 552,795,386
16.1.3 Depreciation charge for the year has been allocated as follows:
2016 2015
Note Rupees Rupees
Cost of sales 27 118,049,220 108,260,004

Selling and distribution cost 28 7,750,379 8,611,533
Administrative and general expenses 29 6,961,980 8,505,711
132,761,579 125,377,248
Detail of operating fixed assets disposed of during the year is as follows:

16.1.4
Accumulated Net Book Sale Mode of
Description Cost Gain/(Loss) Particulars of purchasers
Depreciation Value Proceeds Disposal
------------------------------------------------------ Rupees -------------------------------------------------------
Vehicles
Honda Civic - LE-3838 2,527,600 1,086,051 1,441,549 1,900,000 458,451 Negotiation Mrs.Rukhsana Javed - related party
Toyota Corolla - LE-38 1,915,360 354,121 1,561,239 2,500,000 938,761 Negotiation Mrs.Rukhsana Javed - related party
Toyota Corolla Altis - LEC-1079 1,896,165 914,736 981,429 1,400,000 418,571 Insurance Claim Premier Insurance Company
Honda CD-70 - LEP-5194 69,270 31,007 38,263 27,612 (10,651) Company policy Mr. Rashid Javed - Employee
Honda CD-70 - LEP-5201 69,270 31,007 38,263 27,612 (10,651) Company policy Mr. Shahid Nazir - Employee
6,477,665 2,416,922 4,060,743 5,855,224 1,794,481
The cost of operating fixed assets includes fully depreciated operating fixed assets which are still in use of the company. The breakup of cost of such assets is as follows :
2016 2015
2016
16.1.5 Rupees Rupees

Plant and machinery 305,934,000 295,640,000
Annual Report
Vehicles 16,045,033 14,803,000
321,979,033 310,443,000
Annual Report
16.1.6 Owned vehicles includes a vehicle having cost of Rs. 22,856,000 (2015: Rs. 22,856,000) which is
purchased out of the funds of the company, however said vehicle is in the name of a director of the
company and is being used by the director.
16.1.7 Owned vehicles also include 14 (2015: 9) vehicles having cost of Rs. 13,107,368 (2015: Rs. 9,259,255)
which are in the process of being registered in the company's name. The said vehicles are in the
possession of the company and are being used by the company's staff.
16.2 Capital work-in-progress
Transfer to
Opening Additions / Closing
operating
Balance Adjustment Balance
fixed assets
Civil work and buildings 7,150,936 8,874,192 - 16,025,128
Plant and machinery 6,304,055 163,011,170 - 169,315,225
Advances for capital
expenditure - plant and machinery 80,129,295 (31,743,469) - 48,385,826
93,584,286 140,141,893 - 233,726,179
17. LONG TERM INVESTMENTS 2016 2015

Note Rupees Rupees
AVAILABLE FOR SALE
Associated companies - Quoted
Shadab Textile Mills Limited

Nil (2015: 375,000) fully paid ordinary shares of Rupees 10 each - 2,500,000
Company held nil (2015 : 19%) share holding in Shadab Textile Mills Ltd
Sargodha Spinning Mills Limited
Nil (2015: 500) fully paid ordinary shares of Rupees 10 each - 5,000
Company held nil (2015 : 0.002%) share holding in Sargodha Spinning Mills Ltd
- 2,505,000
Add : Fair value adjustment - 18,311,845
Less : Impairment loss - 4,550
- 20,812,295
18. LONG TERM DEPOSITS
Security deposits
- against ijarah facility 1,903,250 -
- others 784,440 779,440
- against leased assets - 7,315,200
2,687,690 8,094,640
Less: Current portion shown under current assets 23 - 7,315,200
2,687,690 779,440
19. STORES, SPARE PARTS AND LOOSE TOOLS
Stores 129,441,636 124,286,694

Spare parts 13,422,802 13,746,328
Loose tools 1,749,897 1,830,989
144,614,335 139,864,011
47
Annual Report
Note 2016 2015

20. STOCK-IN-TRADE Rupees Rupees
Work-in-process 8,250,909 2,519,008
Finished goods 172,262,473 319,150,354
180,513,382 321,669,362
20.1 Stock-in-trade includes inventory amounting to Rupees 172.122 million (2015: Rupees 32.653 million)
carried at net realizable value.
21. TRADE DEBTS - unsecured
Considered good 693,424 41,531
Considered doubtful 27,180 683,623
Provision for doubtful trade debts 27,180 683,623
- -
693,424 41,531
21.1 Doubtful trade debts amounted to Rs. 656,443 (2015: Nil) were written off against the provision
during the year, whereas provision amounting to Rs. Nil (2015: Rs. 683,623) was made during
the year.
22. ADVANCES
Considered good - Unsecured
Advances to:
Employees - interest free 22.1 2,179,613 2,410,812
Employees against expenses 877,189 493,024
Suppliers 22.2 27,443,645 16,992,002
Contractors 22.3 10,025 552,360
Sugarcane growers 22.4 4,589,578 5,678,236
35,100,050 26,126,433
22.1 It includes advances amounting to Rs. 781,837 given to Executives of the company and the year
end balance is the highest outstanding balance at the end of any month during the year.
22.2 Advances to suppliers
Considered good 27,443,645 16,992,002
Considered doubtful 5,143,275 3,008,595
Provision for doubtful advances (5,143,275) (3,008,595)
- -
27,443,645 16,992,002
22.2.1 Further provision against doubtful advances amounting to Rs. 2,134,680 (2015:
Rs. 3,008,595) was made during the year.
22.3 Advances to contractors
Considered good 10,025 552,360
Considered doubtful 12,000 12,000
Provision for doubtful advances (12,000) (12,000)
- -
10,025 552,360
48
Annual Report
Note 2016 2015
22.4 Advances to sugarcane growers Rupees Rupees
Considered good 4,589,578 5,678,236
Provision for doubtful advances (1,519,503) (1,519,503)
- -
4,589,578 5,678,236
23. SHORT TERM DEPOSITS AND PREPAYMENTS

Deposits:
Current portion of long term deposits 18 - 7,315,200
Prepayments
Prepaid expenses 828,598 3,812,276
828,598 11,127,476
24. OTHER RECEIVABLES

Considered good
Accrued mark-up 236 1,888,374
Subsidy receivable 97,025,250 36,295,750
Miscellaneous receivables 24.1 6,728,662 5,863,840
103,754,148 44,047,965
24.1 Miscellaneous receivables

Considered good 6,728,662 5,863,840
Provision for doubtful miscellaneous receivables (1,804,447) (1,719,605)
- -
6,728,662 5,863,840
24.1.1 Further provision against miscellaneous receivables amounting to Rs. 84,842 (2015:
Rs. 1,719,605) was made during the year.
25. CASH AND BANK BALANCES
Cash in hand 1,355,832 1,585
Cash at bank in local currency:
Current accounts 14,613,450 98,964,721
Saving accounts 25.1 112,324 3,677,923
14,788,044 102,642,644
Cash at bank in foreign currency
US$ account 62,270 62,270
16,206,146 102,706,499
25.1 Rate of profit on saving accounts ranges from 2.15% to

6.00% (2015: 3.50% to 7.00%) per annum.
26. NET SALES

Local sales 26.1 2,656,544,140 1,753,738,341
Export sales - sugar 382,211,731 198,513,179
Freight subsidy 105,391,000 43,458,807
3,144,146,871 1,995,710,327
49
Annual Report
2016 2015
26.1 Local sales Note Rupees Rupees
Sugar 2,583,699,888 1,693,193,782
By Products:
Molasses 177,345,462 197,098,899
Bagasse 120,358,251 -
Press mud - 836,682
297,703,713 197,935,581
2,881,403,601 1,891,129,363
224,859,461 137,391,022
Less: Federal excise duty and sales tax 2,656,544,140 1,753,738,341
27. COST OF SALES

Raw material consumed:
Sugarcane purchased 2,376,210,288 2,033,295,240
Sugarcane development cess 18,727,534 16,771,801
Market committee fee 2,497,030 2,236,240
2,397,434,852 2,052,303,281
Salaries, wages and other benefits 27.1 116,661,893 121,995,573

Workers' welfare 6,325,119 1,636,269
Stores, spare parts and loose tools consumed 9,454,859 11,315,995
Chemicals consumed 21,472,236 26,248,458
Packing material consumed 19,423,722 22,246,280
Fuel and power 21,384,983 25,641,481
Repair and maintenance 36,480,093 35,532,262
Insurance 3,787,659 6,505,475
Other factory overheads 6,965,058 8,482,099
Depreciation 16.1.3 118,049,220 108,260,004
2,757,439,694 2,420,167,177
Work-in-process
Opening stock 2,519,008 1,659,576
Closing stock (8,250,909) (2,519,008)
(5,731,901) (859,432)
Cost of goods manufactured 2,751,707,793 2,419,307,745
Finished goods
Opening stock 319,150,354 104,882,044
Closing stock (172,262,473) (319,150,354)
146,887,881 (214,268,310)
2,898,595,674 2,205,039,435
27.1 Salaries, wages and other benefits include Rupees 2.622 million (2015: Rupees 2.518 million)
in respect of employees' provident fund contribution by the Company.
50
Annual Report
2016 2015
28. SELLING AND DISTRIBUTION COST Note Rupees Rupees
Handling and distribution 3,107,371 2,969,396
Repair and maintenance 62,066 126,145
Printing and stationery 65,032 29,252
Depreciation 16.1.3 7,750,379 8,611,533
Commission - 1,598,000
15,388,904 17,625,456
28.1 Salaries, wages and other benefits include Rupees 0.175 million (2015: Rupees 0.160 million)
in respect of employees' provident fund contribution by the Company.
29. ADMINISTRATIVE AND GENERAL EXPENSES
Directors' remuneration 19,600,464 19,289,414
Travelling and conveyance 2,176,801 2,100,675
Communication 2,364,414 1,658,640
Rent, rates and taxes 4,189,897 3,805,202
Printing and stationery 2,039,321 1,597,793
Repair and maintenance 1,322,479 1,001,466
Vehicle's running and maintenance 8,037,632 8,345,757
Fee and subscription 2,019,271 1,137,361
Legal and professional 2,667,316 4,370,560
Auditors' remuneration 29.2 1,075,000 1,015,500
Entertainment 3,219,954 2,324,321
Advertisement 249,095 86,850
Fines and penalties 5,103,673 -
Insurance 2,000,581 2,096,718
Ijarah rentals 645,042 -
Depreciation 16.1.3 6,961,980 8,505,711
Miscellaneous 4,847,867 6,837,092
154,491,654 147,608,656
29.1 Salaries and other benefits include Rupees 2.571 million (2015: Rupees 2.066 million) in
respect of employees' provident fund contribution by the Company.
29.2 Auditors' remuneration

Audit fee 750,000 715,000
Certification fee 50,000 50,000
Half yearly review 200,000 175,000
Out of pocket expenses 75,000 75,500
1,075,000 1,015,500
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Annual Report
2016 2015
Note Rupees Rupees
30. OTHER OPERATING EXPENSES
Donations 30.1 150,000 20,000
Loss on disposal of operating fixed assets - 881,644
Provision for doubtful trade debts - 683,623
Provision for doubtful advances to suppliers 2,134,680 3,008,595
Provision for doubtful advances to contractors - 12,000
Provision for doubtful miscellaneous receivables 84,842 1,719,605
Margin against letter of credit written off - 1,700
Long term deposits written off - 270,000
Margins against bank guarantees written off - 117,989
Workers' Profit Participation Fund 5,171,431 -
7,540,953 6,715,156
30.1 There is no interest in the donees fund, of any director or their spouses.
31. OTHER INCOME

Income from financial assets
Profit on bank deposits 150,777 6,077,662
Dividend income 1,275,000 375,000
31.1
Gain on sale of investments 19,916,481 -
21,342,258 6,452,662
Income from non-financial assets
Gain on sale of fertilizers and seeds to growers 65,446,748 16,166,493
Miscellaneous 3,084,139 1,683,057
Gain on sale of operating fixed assets 1,794,481 -
Old credit balances written back 29,057 91,403
Sale of scrap - 2,076,195
91,696,683 26,469,810
31.1 It represents the dividend received from Shadab Textile Mills Limited - associated company.
32. FINANCE COST

Mark up on :
- Long term finance - 2,104,227
- Short term borrowings 53,403,616 54,646,529
Lease financial charges 32.1 160,309 967,407
Interest on balance payable to provident fund trust 819,308 509,981
Bank charges and commission 7,185,955 3,107,272
61,569,188 61,335,416
32.1 It includes late payment charge amounting to Rs. 121,808.
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33. TAXATION 2016 2015
Current tax: Note Rupees Rupees
Minimum tax 26,407,075 -
Presumptive / final tax regime 3,949,617 -
Prior year - 2,197,539
Deferred tax
Change in tax rate 7,332,080 -
For the year (55,096,420) -
(17,407,648) 2,197,539
33.1 Tax charge reconciliation for the year is not applicable due to minimum tax. The Company has
carry forward able tax losses of Rupees. 910.054 million (2015: Rupees 1,053.385 million).
34. LOSS PER SHARE - BASIC AND DILUTED

Profit / (Loss) after taxation attributable to ordinary shareholders Rupees 115,664,829 (418,341,521)
Weighted average number of ordinary shares Numbers 17,000,000 17,000,000
Earnings /(Loss) per share - Basic Rupees 6.80 (24.61)
There is no dilutive effect on basic earnings per share of the company as the Company has no such
commitments at the balance sheet date.
35. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

Aggregate amount charged in these financial statements for remuneration including all benefits to the
chief executive, directors and executives of the Company is as follows:
2016
Chief Director Executives
Executive
------------------ Rupees -----------------
Managerial remuneration 7,483,700 3,644,984 23,061,687
House rent 2,331,810 1,391,190 6,917,971
Contribution to provident fund 337,534 309,150 2,096,774
Utilities / medical allowance 53,878 356,092 2,096,774
Others 1,768,563 1,923,563 -
11,975,485 7,624,979 34,173,206
Number of persons 1 2 24
2015
Chief
Directors Executives
Executive
-------------------- Rupees ----------------
Managerial remuneration 7,791,919 4,336,378 22,667,474
House rent 2,261,033 1,372,241 6,641,398
Contribution to provident fund - 305,276 2,045,723
Utilities / medical allowance 548,809 681,805 2,060,701
Others 371,304 1,620,649 260,246
10,973,065 8,316,349 33,675,542
Number of persons 1 1 25
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Annual Report
35.1 In addition to above, the chief executive, directors (as referred in note 16.1.6) and certain
executives are provided with the free use of the Company's maintained cars. Nineteen (2015:
Fourteen) executives are also provided with furnished accommodation including utilities.
35.2 No meeting fee was paid to directors during the year (2015: Rupees Nil).
35.3 No remuneration was paid to non-executive directors of the Company.
36. TRANSACTIONS WITH RELATED PARTIES
The related parties comprise associated undertakings, close family relative, key management personnel
i.e. directors, chief executive and executives and staff retirement benefits. The outstanding balances,
transactions with related parties and remuneration to chief executive, directors and executives have
been disclosed in the relevant notes to these financial statements. Details of transactions with related
parties during the year other than those which have been disclosed elsewhere in these financial
statements are stated below:
2016 2015
Particulars Relationship Name Rupees Rupees
Building being on rental basis Close family relative Mrs.Rukhsana Javed 2,700,000 3,540,000
All transactions were carried out on commercial terms and conditions at arms length price
37. RELATIONSHIP WITH THE ISLAMIC AND CONVENTIONAL FINANCIAL INSTITUTION
The Company in the normal course of business deals with sole Islamic financial institutions as well as
the financial institutions who operate both the conventional side and Islamic window. During the
period the Company carried out transactions with both the conventional side as well as Islamic
window of financial institutions. The details of segregation between Shariah complaints and
conventional assets/liabilities and income/expenditure are given below :
2016 2015
Rupees Rupees
Islamic Mode Conventional Total Islamic Mode Conventional Total
Long term finance - - - 11,491,663 - 11,491,663
Liabilities against assets subject to
finance lease - - - - 7,976,878 7,976,878
Accrued markup on secured borrowings 3,073,919 2,260,379 5,334,298 7,511,718 6,363,184 13,874,902
Shorterm borrowings 249,446,685 189,500,092 438,946,777 175,000,000 242,404,411 417,404,411
Investments - - - 20,805,000 7,295 20,812,295
Cash and bank balances (1,183,704) (13,666,610) (14,850,314) (3,697,713) (99,007,201) (102,704,914)
251,336,900 178,093,861 429,430,761 211,110,668 157,744,567 368,855,235
Ijarah rentals 645,042 - 645,042 - - -

Finance cost 27,543,094 34,026,094 61,569,188 28,637,624 32,931,564 61,569,188
Loss on remeasurment of available for
sale investments - - - 4,866,240 1,805 4,868,045
Dividend (1,275,000) - (1,275,000) (375,000) - (375,000)
Gain on sale of investments (19,916,481) - (19,916,481) - - -
Income from PLS bank account (21,740) (129,037) (150,777) (1,167,011) (4,910,651) (6,077,662)
6,974,915 33,897,057 40,871,972 31,961,853 28,022,718 59,984,571
38. PLANT CAPACITY AND ACTUAL PRODUCTION

Installed crushing capacity for 111 (2015: 139) working days Metric tons 721,500 903,500
Actual crushing Metric tons 499,396 447,091
Actual production Metric tons 46,861 41,103
Sugar recovery Percentage 9.41 9.20
38.1 Optimum capacity could not be achieved due to the liquidity crunch being faced by the Company, which
the management is trying hard to manage in future.
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2016 2015
39. PROVIDENT FUND RELATED DISCLOSURES Rupees Rupees
The following information is based on un-audited financial statements of the provident fund as on 30
September 2016 and 30 September 2015:
Size of the fund 85,089,532 84,612,220

Cost of investments 23,087,458 40,115,142
Percentage of investments made 27.13% 47.41%
Fair value of investments 23,497,048 41,742,642
39.1 Break-up of cost of investments is as follows:

2016 2015 2016 2015
Percentage Rupees Rupees
Term deposit receipts 24.69% 12.46% 5,700,000 5,000,000
Saving bank accounts 66.65% 3.03% 15,387,458 1,215,142
National saving scheme 8.66% 59.58% 2,000,000 23,900,000
Mutual funds 0.00% 24.93% - 10,000,000
100% 100% 23,087,458 40,115,142
39.2 Investments, out of provident fund, have been made in accordance with the provisions of
section 227 of the Companies Ordinance, 1984 and the rules formulated for this purpose.
40. NUMBER OF EMPLOYEES

Number of employees as on September 30 644 678
Average number of employees during the year 839 993
41. FINANCIAL RISK MANAGEMENT

41.1 Financial risk factors
The Company's activities may expose it to a variety of financial risks: market risk (including
currency risk, other price risk and interest rate risk), credit risk and liquidity risk. The Company's
overall risk management program focuses on the unpredictability of financial markets and
seeks to minimize potential adverse effects on the financial performance.
Risk management is carried out by the Board of Directors (the Board). The Board provides
principles for overall risk management, as well as policies covering specific areas such as currency
risk, other price risk, interest rate risk, credit risk and liquidity risk.
(a) Market risk

(i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in foreign exchange rates. Currency risk arises mainly
from future commercial transactions or receivables and payables that exist due to
transactions in foreign currencies.
Currently, the Company's foreign exchange risk exposure is restricted to bank balances
in United States Dollar (USD) as disclosed in note 25 to these financial statements which,
in management's opinion, is considered to be insignificant.
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(ii) Other price risk

Other price risk represents the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market prices (other than those arising
from interest rate risk or currency risk), whether those changes are caused by factors
specific to the individual financial instrument or its issuer, or factors affecting all similar
financial instrument traded in the market. The Company is not exposed to commodity
price risk as it has disposed of all its investments held in available for sale shares.
(iii) Interest rate risk
This represents the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates.
The Company has no long-term interest-bearing assets except for saving bank accounts.
The Company's interest rate risk arises from long term finance, liabilities against assets
subject to finance lease and short term borrowings. Borrowings and finance leases
obtained at variable rates expose the Company to cash flow interest rate risk.
At the reporting date the interest rate profile of the Companys interest bearing financial
instruments was:
2016 2015
Floating rate instruments Rupees Rupees
Financial assets
Bank balances - saving accounts 112,324 3,677,923
Financial liabilities
Long term borrowing - 11,491,663
Liabilities against assets subject to finance lease - 7,976,878
Cash flow sensitivity analysis for variable rate instruments

If interest rates at the year end date, fluctuates by 1% higher / lower with all other variables
held constant, profit after taxation for the year would have been higher / lower by Rupees
4.388 million (2015: Rupees 4.332 million), mainly as a result of higher / lower interest
expense on floating rate financial instruments. This analysis is prepared assuming the
amounts of financial instruments outstanding at reporting dates were outstanding for the
whole year.
(b) Credit risk
Credit risk represents the risk that one party to a financial instrument will cause a financial
loss for the other party by failing to discharge an obligation. The carrying amount of
financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date was as follows:
Long term investments - 20,812,295
Deposits 2,687,690 8,094,640
Trade debts 693,424 41,531
Advances 2,179,613 2,410,812
Other receivables 6,728,898 7,752,214
Bank balances 14,850,314 102,704,914
27,139,939 141,816,406
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The credit quality of financial assets that are neither past due nor impaired can be assessed by
reference to external credit ratings (If available) or to historical information about counterparty
default rate:
Rating 2016 2015

Short Term Long term Agency Rupees Rupees
Banks
Allied Bank Limited A1+ AA+ PACRA 4,831 61,872,797
Bank Alfalah Limited A1+ AA PACRA 169,612 13,189,421
Bank Islami Pakistan Limited A1 A+ PACRA 910,925 3,697,405
Faysal Bank Limited A1+ AA PACRA 327,367 327,367
The Bank of Punjab A1+ AA PACRA 1,070,553 153,651
Habib Bank Limited A1+ AAA JCR-VIS 11,402,905 50,274
Meezan Bank Limited A1+ AA JCR-VIS 186,994 1
MCB Bank Limited A1+ AAA PACRA 660,386 13,088,802
National Bank of Pakistan A1+ AAA PACRA 12,654 143,053
United Bank Limited A1+ AAA JCR-VIS 28,938 130,151
Al-Baraka Bank (Pakistan) Limited A1 A PACRA 4,868 -
Summit Bank Limited A1 A- JCR-VIS 43,911 44,051
NIB Bank Limited A1+ AA- PACRA 7,270 10,007,941
Apna Microfinance Bank A3 BBB+ PACRA 19,100
14,850,314 102,704,914
Trade debts
Customer is counterparty to local trade debts against sale of refined sugar. At the present
company has investment in one customer namely; Shakarganj Food Product Limited, which is a
well known company in the sugar industry. Due to long standing relations with counterparty and
high creditworthiness of above mentioned customer the overall credit risk of company is low.
The analysis of ages of trade debts of the Company as at the reporting date is as follows:
2016 2015
Rupees Rupees
Past due but not impaired
1 - 90 days 693,424 41,531
91 - 180 days - -
693,424 41,531
Past due and impaired
More than three years 27,180 683,623
720,604 725,154
Due to the Company's long standing business relationships with counter party and after
giving due consideration to their strong financial standing, the management does not expect
non-performance by these counter parties on their obligations to the Company. Accordingly the
credit risk is minimal.
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(c) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated
with financial liabilities.
The Company manages liquidity risk by maintaining sufficient cash and the availability of
funding through an adequate amount of committed credit facilities. At 30 September 2016, the
Company had Rupees 950 million (2015: Rupees 307.596 million) available credit limits from
financial institutions and Rupees 16.206 million (2015: Rupees 102.706 million) cash and bank
balances. The management believes the liquidity risk to be low. Following are the contractual
maturities of financial liabilities, including interest payments. The amount disclosed in the table
are undiscounted cash flows:
Contractual maturities of financial liabilities as at 30 September 2016
Carrying Contractual More than 2

6 month or less 6-12 month 1-2 Year
amount cash flows years
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Non - derivative financial liabilities

Long term borrowing - - - - - -
Liabilities against assets
subject to finance lease - - - - - -
Trade and other payables 663,929,090 663,929,090 663,929,090 - - -
Accrued mark-up 5,334,298 5,334,298 5,334,298 - - -
Short term borrowings 438,946,777 438,946,777 339,132,851 99,813,926 - -
1,108,210,165 1,108,210,165 1,008,396,239 99,813,926 - -
Contractual maturities of financial liabilities as at 30 September 2015
Carrying Contractual More than 2

6 month or less 6-12 month 1-2 Year
amount cash flows years
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Non - derivative financial liabilities
Long term borrowing 11,491,663 11,491,663 11,491,663 - - -
Liabilities against assets
subject to finance lease 7,976,878 7,980,429 7,980,429 - - -
Trade and other payables 908,431,069 908,431,069 908,431,069 - - -
Accrued mark-up
on secured borrowings 13,874,902 13,874,902 13,874,902 - - -
Short term borrowings 417,404,411 417,404,411 325,754,607 91,649,804 - -
1,359,178,923 1,359,182,474 1,267,532,671 91,649,804 - -
41.2 Fair values of financial instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The carrying value
of all financial assets and liabilities reflected in the financial statements approximate their fair
values.
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Annual Report
Fair value hierarchy

IFRS 13 requires fair value measurement disclosures using following three level fair value hierarchy
that reflects the significance of the inputs used in measuring fair value of financial instruments.
Level 1 Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2 Inputs other than quoted prices included within level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. drive from prices).
Level 3 Inputs for asset or liability that are not based on observable market data (unobservable inputs).
The Company has no financial assets measured at above mentioned levels. The carrying values of all
financial assets and liabilities reflected in the financial statements approximate their fair values. As
at September 30, 2016, the Company did not hold any financial instruments carried at fair value.
41.3 Financial instruments by categories Loans and Available for

Total
receivables sale
- - - - - - - - - - - - - - Rupees - - - - - - - - - - - - -
As at 30 September 2016
Assets as per balance sheet
Long term investments - - -
Deposits 2,687,690 - 2,687,690
Trade debts 693,424 - 693,424
Advances 2,179,613 - 2,179,613
Other receivables 6,728,898 - 6,728,898
Cash and bank balances 16,206,146 - 16,206,146
28,495,771 - 28,495,771
As at 30 September 2015
Assets as per balance sheet
Long term investments - 20,812,295 20,812,295
Deposits 8,094,640 - 8,094,640
Trade debts 41,531 - 41,531
Advances 2,410,812 - 2,410,812
Other receivables 7,752,214 - 7,752,214
Cash and bank balances 102,706,499 - 102,706,499
121,005,696 20,812,295 141,817,991
2016 2015
Rupees Rupees
Liabilities as per balance sheet measured at amortized cost
Long term finance - 11,491,663
Liabilities against assets subject to finance lease - 7,976,878
Trade and other payables 663,929,090 908,431,069
Accrued mark-up 5,334,298 13,874,902
1,108,210,165 1,359,178,923
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41.4 Capital risk management

The Company's objectives when managing capital are to safeguard the Company's ability to
continue as a going concern in order to provide returns for shareholders and benefits for
other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of
dividends paid to shareholders or issue new shares.
42. SEGMENT INFORMATION
42.1 Sales of sugar represents 89% (2015: 90.72%) of the total sales of the Company.
42.2 87% of the sales of the Company relates to customers in Pakistan. Of the remaining sales of the
Company relating to customers outside Pakistan, 100 % of those sales are made to customers in
Afghanistan.
42.3 All non-current assets of the Company as at 30 September 2016 were located in Pakistan.
42.4 45.16% (2015: 72.74%) of the total sales of the Company are made to a single customer in Pakistan.
43. DATE OF AUTHORIZATION

These financial statements have been approved and authorized by the Board of Directors of the
Company for issue on January 05, 2017
44. GENERAL
44.1 Figures of the corresponding period have been re-arranged and regrouped to represent better /
true presentation and to facilitate appropriate comparison. Major reclassification made in the
corresponding figures for better presentation are as under:
2015 Reclassification
Rupees From To
Advances to supplier 4,037,609 Capital work in progress Advances to supplier

(Advance for capital
expenditure)
Dealer's security deposit 18,483,000 Advance from customer Security deposit -
interest free
Employee vehicle deposit 6,830,743 Non current liabilities Security deposit -

(Long term deposits) interest free
Advance income tax 60,624,064 Other receivables Tax refund due from
Government
44.2 Figures have been rounded off to nearest of Rupee.

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INFORMATION UNDER COMPANIES ORDINANCE, 1984

{Section 236(1) and (464)}
PATTERN OF SHAREHOLDINGS HELD BY THE SHAREHOLDERS (FORM 34)
1. Incorporation Number 0002210

2. Name of The Company Husein Sugar Mills Limited
3. Pattern of Holding of the Shares held by the Shareholders as at 30 September 2016
Shareholding
4. No. of Shareholders Total Shares held
From To
299 1 100 5,895
166 101 500 63,335
119 501 1,000 102,381
195 1,001 5,000 525,359
48 5,001 10,000 373,316
22 10,001 15,000 280,652
4 105,001 110,000 432,524
1 120,001 125,000 124,548
1 135,001 140,000 139,605
1 140,001 145,000 141,164
1 485,001 490,000 485,793
1 585,001 590,000 588,219
1 820,001 825,000 824,077
7 15,001 20,000 126,589
2 20,001 25,000 46,000
4 25,001 30,000 116,000
1 30,001 35,000 34,000
3 35,001 40,000 112,500
1 40,001 45,000 40,905
2 45,001 50,000 96,604
1 60,001 65,000 60,150
2 65,001 70,000 130,525
1 80,001 85,000 84,000
1 110,001 115,000 113,993
2 130,001 135,000 262,458
1 145,001 150,000 148,910
1 205,001 210,000 205,537
1 340,001 345,000 341,950
1 350,001 355,000 354,397
1 430,001 435,000 432,138
1 2,980,001 2,985,000 2,983,265
1 3,035,001 3,040,000 3,038,000
1 4,185,001 4,190,000 4,185,211
894 TOTAL 17,000,000
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5. Categories of Shareholders Shares Held % age
Directors, Chief Executive Officer, Their Spouses and Minor Childern:

Chief Executive
Mr. Mustafa Ali Tariq 3,000,265 17.65
Directors
Mr. Ahmad Ali Tariq 3,038,000 17.87

Mr. Taufiq Ahmed Khan 2,500 0.01
Mst. Nusrat Shamim 500 0.00
Mr. Wasim Saleem 500 0.00
Mr. Ali Ashfaq 500 0.00
Mr. Muhammad Iftikhar 500 0.00
6,042,765 35.55
NIT & ICP
Investment Corporation of Pakistan 1,219 0.01
1,219 0.01
Banks, NBFCs, DFIs, Takaful, Pension Funds 2,118 0.01
Other Companies,Corporate Bodies, Trust etc. 102,819 0.60
General Public 10,851,079 63.83
TOTAL 17,000,000 100.00

Shareholders More Than 5.00% :-
Ahmad Ali Tariq 3,038,000 17.87
Mustafa Ali Tariq 3,000,265 17.65
Sadia Ali Tariq 4,197,711 24.69
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Annual Report
CATEGORIES OF SHAREHOLDERS REQUIRED UNDER C.C.G.

As at September 30, 2016
S. No. Name Shares Held %age of Capital
A) Associated Companies, Undertakings and related parties - -
B) Mutual Funds - -
C) Directors/Chief Executive Officer and their spouse and minor Children

1 Mr. Ahmed Ali Tariq 3,038,000 17.87
2 Mr. Mustafa Ali Tariq 3,000,265 17.65
3 Mst. Nusrat Shamim 500 0.00
4 Mr.Taufiq Ahmed Khan 2,500 0.01
5 Mr.Wasim Saleem 500 0.00
6 Mr. Ali Ashfaq 500 0.00
7 Mr.Muhammad Iftikhar 500 0.00
TOTAL: - 6,042,765 35.55
D) Executives - -
E) Public Sector Companies & Corporations

1 Investment Corporation of Pakistan, 1,219 0.01
2 Mercantile Cooperative Finance Corporation Ltd. 9,295 0.05
TOTAL:- 10,514 0.06
F) Banks, Development Finance Institutions, Non-Banking Finance

Companies, Insurance Companies, Takaful, Modarabas and Pension Funds
1 Habib Bank Limited 2,000 0.01

2 National Bank of Pakistan 1 0.00
3 Trustee National Bank of Pakistan Employees Pension Fund 117 0.00
TOATL : - 2,118 0.01
G) *Shareholding 5% or more
1 Mr. Ahmed Ali Tariq 3,038,000 17.87

2 Mr. Mustafa Ali Tariq 3,000,265 17.65
3 Mrs. Sadia Ali Tariq 4,197,711 24.69
TOTAL: - 10,235,976 60.21
H) Joint Stock Companies - -
I) Investment Companies - -
J) Others
1 Al-Noor Modarba Management (Private) Limited 1,000 0.01
2 Trustee - NBP Emp. Benevolent Fund Trust 4 0.00
3 Zafar Moti Capital Securities (Private) Ltd. 5,000 0.03
4 DJM Securities (Private) Limited 38,000 0.22
5 NCC - Pre Settlement Delivery Account 35,500 0.21
6 Saao Capital (Private) Limited 13,000 0.08
7 M/s. Fikree's (SMC-Pvt) Limited 11 0.00
8 M/s. Naeem Securities Limited 56 0.00
9 M/s. The Okhai Memon Anjuman 953 0.01
TOTAL:- 93,524 0.55
K) General Public 10,851,079 63.83
GRAND TOTAL 17,000,000 100.00
* Shareholders having 5% or above shares exist in other categories therefore not included in total.
All trade in the Company's shares,carried out by its Directors,CEO,CFO,Company Secretary and their spouses and minor
children during the year are as under:
Sr. No Name Transfer out Purchase / Transfer in
1 Mr.Ahmed Ali Tariq - Chairman 3,232,313 4,221,546
2 Mr.Mustafa Ali Tariq - CEO 2,867,806 3,819,305
3 Mst.Nusrat Shamim - Director 6,210,670 -
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403.442
609.682
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(41.743:2015)
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PROXY FORM
I/We of
being the member of HUSEIN SUGAR MILLS LIMITED
hereby appoint Mr. /Mrs./Miss.
who is a member of the company vide Registered Folio/CDC participant ID.No.
or failing whom Mr. /Mrs./Miss.
who is also a member of the company vide Registered Folio/CDC participant ID.No.
as my proxy to attend and vote for me and on my behalf at the Annual General Meeting of the Company to be held
at its Registered Head Office of the Company 30-A E/1, Old FCC, Gulberg III, Lahore on Tuesday, the 31st January,
2017 at 10:00 A.M and at any adjournment thereof.
Signed this day of 2017.
WITNESS
1. Signature
Name
(Signature on
Address Rupees Five
Revenue Stamp)
CNIC or Passport No. Signature should agree with specimen

signature with the company
2. Signature
Name
Address
CNIC or Passport No.
Notes:
1. A member entitled to attend and vote at the meeting may appoint any other member as his/her proxy to attend the meeting and vote.
2. If a member is unable to attend the meeting, they may complete and sign this form and send it to the company secretary, the Husein
Sugar Mills Limited, Lahore so as to reach not less then 48 hours before the time appointed for holding the meeting.
3. For CDC Shareholders in addition to above the follow ing requirements have to be met.
i) In case of indivi dual, the account holder or sub account holder and / or the person whose securities are in group account and their
registration details are uploaded as per the Regulat ions, shall submit t he proxy for m as per requir ement notified by the Com pany.
ii) The proxy form shall be witnesse d by two persons whose names, addresses and CNIC numbers shall be mentioned on the form.
iii) Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnish ed with the proxy form.
iv) The Proxy shall produce his/her origina l CNIC or origina l passport at the time of the meeting.
v) In case of corporate entity being a Member, the Board of Directors resolution / power of attorney with specimen signature of the
nominee/atttorney shall have to be submitted (unless it has been provided earlier) along with the proxy form to the Company.
73
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AFFIX
CORRECT
POSTAGE
The Company Secretary

30-A E/I, Old FCC, Gulberg III, Lahore
Ph: 35762089 - 35762090
Fax: (042) 35712680
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Annual Report September 2016

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2016

Husein Sugar Mills Limited

Notice of Annual General Meeting 05-08

Directors Report to the Shareholders - English 09-14

Review Report to the Members on Statement of Compliance 16

Statement of Compliance with the Code of Corporate Governance 17-18

Key Operating and Financial Data 19

Auditors Report to the Members 20-1

Balance Sheet 22-23

Profit and Loss Account 24

Statement af Comprehensive Income 25

Cash Flow Statement 26

Statement of Changes in Equity 27

Notes to the Financial Statements 28-60

Pattern of Shareholding 61-62

Directors Report to the Shareholders - Urdu 64-71

Proxy Forms 73-74

Sustained growth in earning in real terms.

AUDIT COMMITTEE Mr. Taufiq Ahmad Khan Independent Director Chairman

CHIEF OPERATING OFFICER Mr. Wasim Saleem

CHIEF FINANCIAL OFFICER Mr. Wasim Saleem

COMPANY SECRETARY Mr. Khalid Mahmood

SHARE REGISTRAR M/s Corptec Associates (Pvt) Limited

MILLS Lahore Raod, Jaranwala

NOTICE OF ANNUAL GENERAL MEETING

a. FOR ATTENDING THE MEETING

5. Notice to Shareholders who have not provided CNIC:

Folio/CDC Name of Principal/Joint

9. Placement of Financial Statements

STATEMENT UNDER SECTION160 (1)(B) OF THE COMPANIES ORDINANCE,1984

Circulations of Annual Reports through CD/DVD/USB

Alteration in the Articles of Association

DIRECTORS REPORT TO THE SHAREHOLDERS

COMMENTS ON AUDITORS' OBSERVATIONS:

GOING CONCERN ASSUMPTION

vi The cumulative effect of explanations contained in paragraphs ( i ) to ( v) is that it can be rightly

CORPORATE SOCIAL RESPONSIBILITY

LISTING AT STOCK EXCHANGE

COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE

3 Appropriate accounting policies have been consistently applied in preparation of financial

9 The statement of pattern of shareholding as on September 30,2016 is attached.

Shares Transferred out:

Mr. Taufiq Ahmad Khan Chairman

Human Resources and Remuneration (HR&R) Committee

RELATIONS WITH STAKEHOLDERS

INFORMATION UNDER SECTION 218 OF COMPANIES ORDINANCE, 1984

POST BALANCE SHEET EVENTS

AHMED ALI TARIQ

LOCAL SALES BREAK UP-CURRENT YEAR

5 YEARS OMPARISON OF SUGARCANE CUSHING(M.TONS)

2015-16, 499,396 2011-12, 650,995

SUGAR RECOVERY PERCENTAGE

9.4 9.39 9.41 9.41

SUGAR PRODUCTION -M.TONS

0 20,000 40,000 60,000 80,000

REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE

Date: January 05, 2017

STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE

AHMED ALI TARIQ