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Annual Report2009

Annual Report 2009 01

Contents

Corporate Information 02

Vision & Mission Statement 03

Notice of the Annual General Meeting 04-05

Directors’ Report to the Members 06-09

Statement of Compliance with Code of Corporate Governance 10-11

Review Report to the Members on Statement of Compliance

With Best Practices of Code of Corporate Governance 12

Auditors’ Report to the Members 13

Balance Sheet 14-15

Profit and Loss Account 16

Cash Flow Statement 17

Statement of Changes in Equity 18

Notes to the Accounts 19-42

Financial Highlights 43

Pattern of Shareholding 44-46

Form of Proxy

02 Annual Report 2009

Corporate InformationBoard of Directors Mr. Naveed M. Sheikh - Chairman

Mr. Faqir Hussain Khan - Chief Executive OfficerMian Muhammad Ali - DirectorMr. Muhammad Asghar - DirectorMr. Ahmed Haji Mussa - DirectorMr. Asad Ali - DirectorMs. Samina Gul - Director

Chief Financial Officer Mr. Mansur-Ul-Haque

Company Secretary Mr. Abdul Mansoor Khan

Audit Committee Mr. Muhammad Asghar - ChairmanMian Muhammad Ali - MemberMs. Samina Gul - Member

Executive Committee Mr. Naveed M. Sheikh - ChairmanMr. Faqir Hussain Khan - MemberMs. Samina Gul - Member

Bankers National Bank of PakistanEmirates Global Islamic BankFaysal Bank LimitedKASB Bank LimitedThe Bank of Punjab

Auditors Naveed Zafar Husain Jaffery & Co.Chartered Accountants

Legal Advisors Imtiaz Siddiqui & AssociatesAdvocates & Solicitors

Registered Office Ismail Aiwan-e-Science Building205-Ferozepur RoadLahore-54600UAN # (042) 111-COLONY

Fax # (042) 3576-3247

Production Facilities Phalia Project Mian Chanu ProjectKarmanwala, Tehsil Phalia Chak # 84/15L, 15 KM, Vehari RoadDistt. Mandi Bahauddin. Kacha Khoo, Tehsil Mian ChanuPh # (0546) 636-001/14 Distt. Khanewal.Fax # (0546) 636-015 Ph # (0652) 553-182

Fax # (0652) 660-452

2 6 5 6 6 9

To exploit our company's potential by

diversifying into the entire range of industrial

and consumer products that can be

derived from Sugar Cane.

Vision Statement

To exceed our customers' expectations

in quality and delivery on one hand and

maximize profit for the stakeholders of

our company on the other hand by

continuous cost reduction through

identifying and deploying latest

technologies in process and monitoring

control systems.

Mission Statement


Notice of Annual General MeetingNOTICE is hereby given that the 3rd Annual General Meeting of the members of ColonySugar Mills Limited will be held on Saturday, January 30, 2010, at 10:00 a.m. at the RegisteredOffice at Ismail Aiwan-e-Science Building, 205-Ferozepur Road, Lahore to transact thefollowing business:

ORDINARY BUSINESS:-

1. To confirm the minutes of the last general meeting of the members.

2. To receive, consider and adopt the Audited Accounts of the Company for the yearended September 30, 2009 together with the Directors' and Auditors' Reports thereon.

3. To appoint auditors for the year 2009-10 and to fix their remuneration.

SPECIAL BUSINESS:-

4. To consider and if thought fit, pass the following Resolution with or without modification:

RESOLVED THAT the Company be and is hereby authorized to place its quarterlyaccounts on its website instead of sending the same to the members by post, asallowed by Circular # 19 dated April 14, 2004 of the Securities and Exchange Commissionof Pakistan.

FURTHER RESOLVED THAT the Chief Executive Officer and/or Company Secretary beand are hereby authorized to do all necessary acts, deeds and things in connectionherewith and ancillary thereto.

5. Any other business with the permission of the Chair.

By Order of the Board

Lahore Abdul Mansoor KhanJanuary 07, 2010 Company Secretary


Statement U/S 160(1)(b) of the Companies Ordinance 1984

This statement sets out the material facts concerning the Special Business. Securities &Exchange Commission of Pakistan has allowed the listed Companies to place the quarterlyfinancial statements on their website instead of sending the same to each shareholder bypost vide Circular # 19 of 2004. The Company, however, will supply the copies of financialstatements to the shareholders on demand at their registered address, free of cost, withinone week of receiving such request. The directors of the Company have no interest in theabove business that would need further disclosure.

Notes:-

1. The Share Transfer Books of the Company will remain closed from January 24, 2010to January 30, 2010 (both days inclusive).

2. A member entitled to attend and vote at this meeting may appoint another memberas his proxy to attend and vote on his/her behalf. The proxy, in order to be effective,must be received at the registered office of the Company duly signed not less than48 hours before the meeting.

3. The CDC Account holders/sub-account holders are requested to bring with themtheir National ID Cards along with the Participant(s) ID Number and their accountnumbers at the time of attending the Annual General Meeting for identificationpurpose.

4. In case of Corporate entity, the Board of directors' resolution/power of attorney withspecimen signatures of the nominee shall be produced (unless it has been providedearlier) at the time of the meeting. The nominee shall produce his original CNIC atthe time of attending the meeting for identification purpose.

5. Members are requested to notify the change of address immediately, if any.


Directors’ Report to the MembersDEAR MEMBERSWe take pleasure to present Company’s Annual Audited Financial Statements for thefinancial year ended September 30, 2009 together with auditors’ report thereon.

FINANCIAL RESULTSSales for the year under review have been increased twofold to reach Rupees 4,009 Millionas compared to Rupees 2,107 Million for the corresponding period of last year (the firstyear of operations). As a result, we succeeded to earn a gross profit of Rupees 1,086 Million(2008: Rupees 671 Million). After making provision for taxation, the net profit for the yearis Rupees 309 Million (2008: profit Rupees 42 Million) yielded earning of Rupees 3.12 pershare as compared with Rupees 0.42 per share for the last year.

In spite of increase in sugarcane price by the Government from Rupees 60 to Rupees 80(per 40 kgs) for the season 2008-09, sugarcane cultivation was less than the previousseason; hence, the period of crushing season was also curtailed considerably. However,by taking appropriate technical measures, the sucrose recovery percentage significantlyimproved which greatly contributed to achieve above results.

OPERATIONAL RESULTS1) Sugar Division – The Mian Chanu Plant

The crushing for the season 2008-09 commenced on November 6, 2008 and the plantcrushed 382,585 M. tons of sugarcane and produced 39,049 M. tons sugar as comparedwith 439,481 M. tons of sugarcane crushing and 40,975 M. tons of sugar production ofthe previous season. Our recovery at Mian Chanu plant stood at all time high of 10.22%against that of 9.21% of the previous season.

2) Sugar Division – The Phalia PlantThe crushing for the season 2008-09 commenced on November 26, 2008 and crushed305,445 M. tons of sugarcane and produced 25,687 M. tons sugar as compared with682,986 M. tons of sugarcane crushing and 55,719 M. tons of sugar production of theprevious season. The recovery was 8.41% as compared to 8.16% of the previous year.Steps are being taken to further improve recovery percentage at this project.

3) Distillery Division – At PhaliaThe plant commenced production from October 01, 2008, however, distillery operationwas suspended from March 17, 2009 to November 15, 2009 due to erection andinstallation of CO2 recovery plant which is now at its final stage. The other factor whichreduced production during the year 2008-09 was due to a lower availability of molassesas compared with the previous season.

During the period under review, plant produced 12,654,197 liters of ENA Anhydrous,75,423 liters of ENA and 792,848 liters (B-Grade) as compared with 16,478,381 liters ofENA Anhydrous 18,633,442 liters of ENA and 2,249,840 liters (B-Grade) during thecorresponding period of last year.



EXPANSION AND GROWTHAs described in Directors’ Report on 3rd quarterly accounts, the Trial Run of CO2 RecoveryPlant is slightly delayed from what was initially projected due to delay in supply of plantcomponents from our foreign supplier. Plant is anticipated to commence its operationsin End-January/ Early-February 2010.

FUTURE OUTLOOKSugar and ethanol are both projected to be in short supply for the year 2009–2010, globally.Growers are claiming much higher prices over and above the minimum support price ofRupees 100 per 40 kgs fixed by the Government. In light of the prevailing situation, thecompany is also procuring sugarcane at higher rates. This will result in significant increasein the cost of production. Unless there is a corresponding increase in the sugar selling price,the profitability of the sugar divisions may be affected. However, higher sugarcane priceswill play a positive role in a substantial increase in sugarcane cultivation area in the ensuingyears.

On a positive note, there has been a great comeback of the Ethanol Prices which havecrosses the highest level of the previous season. We are carrying a substantial stock of RawMaterial (Molasses), once converted into ethanol will yield a higher retun that it wouldhave, had it been consumed earlier. We expect to fetch a premium on our product.

The Management of your company is taking all appropriate measures to plan and managethe challenges it is foreseeing of the future. In order to resolve the current sugar industrycrises, the Government, the Sugar Industry and the Growers MUST get together to chalkout a future strategy which will benefit all stakeholders in this industry.

DIVIDENDKeeping in view current economic scenario and further expansion/growth of the company,the directors did not recommend dividend for the year ended September 30, 2009.

AUDIT COMMITTEEThe Board of Directors, in compliance with the Code of Corporate Governance, hasestablished an Audit Committee. This step has ensured the strict compliance of internalcontrols so as to safeguard the interests of the company. The committee reviews the finaland interim financial statements.

CORPORATE GOVERNANCE COMPLIANCEThe compliance with the best practices of Code of Corporate Governance providescomfort to the Board. Therefore, the management ensures that all requirements of thecode of corporate governance are complied with. The statement of compliance with thebest practices of Code of Corporate Governance is annexed.

STATEMENT ON CORPORATE AND FINANCIAL REPORTING FRAMEWORKIn compliance with the Code of Corporate Governance, we give below statements onCorporate and Financial Reporting Framework:

The financial statements prepared by the management of the company present fairlyits state of affairs, the results of its operations, cash flows and changes in equity.The company has maintained proper books of accounts as per statutory requirements.Appropriate accounting policies have been consistently applied in preparation offinancial statements and accounting estimates are based on reasonable and prudentjudgment.The International Accounting Standards, as applicable in Pakistan, have been followedin preparation of financial statements.The system of internal control is sound in design and has been effectively implementedand monitored.There are no significant doubts upon the company’s ability to continue as a goingconcern.There has been no departure from the best practices of corporate governance, asdetailed in the listing regulations.Key operating and financial data since incorporation is annexed in summarized form.Keeping in view the expansion and growth of the company, the directors did notrecommend dividend.Information about outstanding taxes and other government levies are given in relatednote(s) to the accounts.The company operates a gratuity fund scheme for all employees. The net value ofinvestment in their respective accounts is given in related note(s) to the accounts.All material information, as described in clause (xxiii) of the Code is disseminated tothe Stock Exchange and Securities and Exchange Commission of Pakistan in a timelyfashion.The company has complied with requirements as stipulated in the newly inserted clause35 (xiii) (a) relating to related party transactions.The directors, CEO, CFO, Company Secretary and their spouses and minor childrenhave made no transactions in the company’s share during the year. The number ofshares, if any, held by them is annexed.

BOARD MEETINGSDuring the year under review four (04) meetings of the Board of Directors were held.Participation of Directors as follows: -

Name of DirectorMr. Mughis A. Sheikh 3Mr. Faqir Hussain Khan 4Mr. Waqar Ibn Zahoor Bandey 4Mr. Muhammad Abid* 4Mr. Muhammad Asghar 4Mr. Tahir Mehmood Sikhani* 4Mr. Muhammad Atta ullah Khan* 4Mr. Asad Ali -Mian Muhammad Ali -Mr. Ahmed Haji Mussa -

*Resigned during the year under review.

The Board granted leave of absence to the directors who could not attend the Meeting. Mr. Naveed M. Sheikhappointed Director/Chairman and Ms. Samina Gul as Director, in place of outgoing deirectors Mr. Mughis A.Sheikh and Mr. Waqar Ibn Zahoor Bandey respectively who resigned on October 31, 2009.


EXTERNAL AUDITORThe present auditors M/S Naveed Zafar Husain Jaffery & Co., Chartered Accountants areretiring and being eligible, offer themselves for re-appointment.

The external auditors have been given satisfactory rating under the Quality Control ReviewProgram of the Institute of Chartered Accountants of Pakistan (ICAP). They have furtherconfirmed that their firm is in compliance with International Federation of Accountants’(IFAC) guidelines on the Code of Ethics as adopted by the ICAP. The external auditorshave not been appointed to provide other services except in accordance with the listingregulations and they have confirmed that they have observed IFAC guidelines in thisrespect.

The audit committee has recommended M/s Naveed Zafar Husain Jaffery & Co., asauditors of the company for the next financial year.

PATTERN OF SHAREHOLDINGThe pattern of shareholding under section 236(d) and information under clause XIX(i) ofthe Code of Corporate Governance as on September 30, 2009 are annexed.

ACKNOWLEDGEMENTThe Board of Directors places on record its appreciation for the support by its shareholders,valued clients, government agencies and bankers to the company. The Board would alsolike to express its appreciation for the services, loyalty and efforts being continuouslyrendered by the executives and all the staff members of the company and hope thatthey will continue with these efforts in future.

For and on behalf of the Board

Lahore Naveed M. SheikhJanuary 07, 2010 Chairman


Statement of Compliance With the Code ofCorporate GovernanceFor The Period Ended September 30, 2009

The statement is being presented to comply with the Code of Corporate Governance containedin the Regulation # 35 (previously regulation # 37) of the listing regulation of Karachi Stock Exchange(Guarantee) Limited for the purpose of establishing a framework of good governance, whereby alisted company is managed in compliance with the best practices of corporate governance.

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

1. The company encourages representation of independent non-executive directors anddirectors representing minority interest on its Board of Directors. At present, the Board includessix independent non-executive directors.

2. The directors have confirmed that none of them is serving as a director in more than ten listedcompanies, including this company.

3. All the resident directors of the company are registered as tax payers and non of them hasdefaulted in payment of any loan to a banking company, DFI, NBFI or, being a member ofa stock exchange, has been declared as a defaulter by that stock exchange.

4. The company has prepared a “Statement of Ethics and Business Practices” which has beensigned by all the directors and employees of the company.

5. The Board has developed a vision/mission statement. Overall corporate strategy and significantpolicies of the company have been developed and maintaining a complete record ofparticulars of significant policies.

6. 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 theemployment of the CEO and other executive directors, have been taken by the Board.

7. The meetings of the Board were presided over by the Chairman and, in his absence, by adirector elected by the Board for this purpose and the Board met at least once in everyquarter. Written notices of the board meetings, along with agenda and working papers, werecirculated at least seven days before the meetings. The minutes of the meetings wereappropriately recorded and circulated.

8. The Directors are aware of their fiduciary responsibilities and orientations courses were arrangedin the past in-house and will be arranged, in future if so required.

9. The Board has approved the appointment of CFO, Company Secretary and Internal Auditor,including their remuneration and terms and conditions of the employment, as determinedby the CEO.


10. The directors' report for the year has been prepared in compliance with the requirements ofthe code and fully describes the salient matters required to be disclosed.

11. The financial statements of the company were duly endorsed by CEO and CFO beforeapproval of the board.

12. The directors, CEO and executives don't hold any interest in the shares of the company otherthan that disclosed in the pattern of shareholding.

13. The company has complied with the corporate and financial reporting requirements of thecode.

14. The Board has formed an audit committee. It comprises of three members, all of them arenon-executive Directors including the Chairman of the company.

15. The meetings of the audit committee were held, prior to the approval of interim and finalresults of the company as required by the code. The term of reference of the committee havebeen formed and advised to the committee for compliance.

16. The Board has set up an internal audit function and taking appropriate measures to make iteffective.

17. The statutory auditors of the company have confirmed that they have been given a satisfactoryrating under the Quality Control Review program of The Institute of Chartered Accountantsof Pakistan, that they or any of the partners of the firm, their spouses and minor children donot hold shares of the company and that the firm and all its partners are in compliance withInternational Federation of Accountants ( IFAC) guidelines on the code of ethics as adoptedby The Institute of Chartered Accountants of Pakistan.

18. The statutory auditors or the persons associated with them have not been appointed toprovide other services except in accordance with the listing regulations and the auditors haveconfirmed that they have observed IFAC guidelines in this regard.

19. All material information, as described in clause (xxiii) of the Code is disseminated to the StockExchange and Securities and Exchange Commission of Pakistan in a timely fashion.

20. The company has complied with requirements as stipulated in the newly inserted clause 35(xiii)(a) relating to related party transactions.

21. We confirm that all other material principles contained in the code have been complied with.

For and On Behalf of the Board

Lahore Naveed M. SheikhJanuary 07, 2010 Chairman


Review Report to the Members on Statement ofCompliance With Best Practices of Code ofCorporate GovernanceWe have reviewed the Statement of Compliance with the best practices contained in theCode of Corporate Governance prepared by the Board of Directors of COLONY SUGARMILLS LIMITED (”the Company”) for the year ended September 30, 2009 to comply with theListing Regulations of the respective Stock Exchange(s) where the Company is listed.

The responsibility for compliance with the Code of Corporate Governance is that of theBoard of Directors of the company. Our responsibility is to review, to the extent where suchcompliance can be objectively verified, whether the Statement of Compliance reflectsthe status of the company’s compliance with the provisions of the Code of CorporateGovernance and report if it does not. A review is limited primarily to inquiries of the companypersonnel and review of various documents prepared by the company to comply with theCode.

As part of our audit of financial statements, we are required to obtain an understandingof the accounting and internal control systems sufficient to plan the audit and develop aneffective audit approach. We are not required to consider whether the Board’s statementon internal control covers all risks and controls, or to form an opinion on the effectivenessof such internal controls, the Company’s corporate governance procedures and risks.

Further, Sub-Regulation (xiii a) of Listing Regulation # 35 (previously Regulation # 37) notifiedby The Karachi Stock Exchange (Guarantee) Limited vide circular KSE/N-269 dated January19, 2009 requires the Company to place before the Board of Directors for their considerationand approval related party transactions distinguishing between transactions carried outon terms equivalent to those that prevail in arm’s length transactions and transactionswhich are not executed at arm’s length price recording proper justification for using suchalternate pricing mechanism. Further, all such transactions are also required to be separatelyplaced before the audit committee. We are only required and have ensured complianceof requirement to the extent of approval of related party transactions by the Board ofDirectors and placement of such transactions before the audit committee. We have notcarried out any procedures to determine whether the related party transactions wereundertaken at arm’s length price or not.

Based on our review, nothing has come to our attention which causes us to believe thatthe Statement of Compliance does not appropriately reflect the company’s compliance,in all material respects, with the best practices contained in the Code of CorporateGovernance as applicable to the Company for the year ended September 30, 2009.

Lahore:January 07, 2010

NAVEED ZAFAR HUSAIN JAFFERY & CO.Chartered Accountants

S. Zafar Ullah Shah



We have audited the annexed balance sheet of COLONY SUGAR MILLS LIMITED (“the Company”) as at September 30, 2009, and related profit and loss account, 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 opinion and, after due verification, we report that:

a) in our opinion, proper books of account have been kept by the company as required by the

Companies Ordinance, 1984; b) in our opinion: (i) the balance sheet 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; and

(ii) the expenditure incurred during the year was for the purpose of the company’s business;

and (iii) the business conducted, investments made and the expenditure incurred during the

year were in accordance with the objects of the company; c) in our opinion and to the best of our information and according to the explanations given to

us, the balance sheet, profit and loss account, cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan, and, give the information required by the Companies Ordinance, 1984, in the manner so required and respectively give a true and fair view of the state of the company’s affairs as at September 30, 2009 and of the profit, its cash flows and changes in equity for the year then ended; and

d) in our opinion, no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980

(xviii of 1980) by the Company.

Lahore: Naveed Zafar Husain Jaffery & Co.January 07, 2010 Chartered Accountants S. Zafar Ullah Shah

Auditors’ Report to the Members


Note 2009 2008 ( Rupees in thousand )

EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorized capital 100,000,000 (2008: 100,000,000) ordinary shares of Rupees 10 each 1,000,000 1,000,000 Issued, subscribed and paid up capital 6 990,200 990,200 Unappropriated profit 350,981 41,876

1,341,181 1,032,076 NON-CURRENT LIABILITIES Long term finances 7 1,485,362 2,152,385 Staff retirement benefits 8 2,787 1,258 Deferred taxation 9 22,198 -

1,510,347 2,153,643 CURRENT LIABILITIES Trade and other payables 10 707,751 300,172 Accrued finance cost 11 99,657 184,193 Short term borrowings - secured 12 - Export re-finance 299,013 22,840 - Others 736,154 1,592,944

1,035,167 1,615,784

Current portion of long term finances 117,917 120,833 Provision for taxation 23,312 10,591

1,983,804 2,231,573 Contingencies and commitments 13 - -

4,835,332 5,417,292

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

Balance SheetAs at September 30, 2009

Chief Executive Officer



PROPERTY AND ASSETS NON-CURRENT ASSETS Property, plant and equipment 14 3,344,118 3,262,442 CURRENT ASSETS Stores, spares and loose tools 15 147,796 183,595

Stocks in trade 16 1,064,542 1,412,758

Trade debts 17 - 145,799

Advances, deposits, prepayments and other receivables 18 253,214 202,947

Cash and bank balances 19 25,662 209,751

1,491,214 2,154,850

4,835,332 5,417,292

Director

Balance SheetAs at September 30, 2009



Sales - net 20 4,009,320 2,106,567 Cost of sales 21 2,923,071 1,435,497 Gross profit 1,086,249 671,070 Administrative and general expenses 22 80,342 71,940 Distribution and marketing expenses 23 60,748 90,455 141,090 162,395 Operating profit 945,159 508,675 Other operating income 24 4,079 4,989 949,238 513,664 Finance cost 25 577,054 458,497 Workers’ profit participation fund 18,609 2,758 595,663 461,255 Profit before taxation 353,575 52,409 Provision for taxation 26 44,470 10,533 Profit for the year 309,105 41,876 Earnings per share - basic Rupees 35 3.12 0.42


Profit and Loss AccountFor the year ended September 30, 2009

Chief Executive Officer Director


2009 2008 ( Rupees in thousand )

CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation 353,575 52,409 Adjustments for non-cash and other items: Finance cost 577,054 458,497 Depreciation of Property, plant and equipment 153,592 144,290 Provision for employees’ retirement benefits - gratuity 2,202 1,303 Provision for contribution to workers’ profit participation fund 18,609 2,758 751,457 606,848 Cash generated from operating activities before working capital changes 1,105,032 659,257 Adjustments for Working Capital Changes (Increase)/decrease in current assets: Stores, spares and loose tools 35,799 (155,110) Stocks-in-trade 348,216 (1,366,239) Trade debts 145,799 (145,799) Advances, deposits, prepayments and other receivables (37,453) (145,935)Increase in current liabilities; Trade and other payables 388,970 293,122

Net working capital changes 881,331 (1,519,961) Finance cost paid (661,590) (306,747)Employees’ retirement benefits - gratuity paid (673) (45)Income tax paid (22,365) (15,949)

(684,628) (322,741)

Net cash generated from/(used in) operating activities 1,301,735 (1,183,445) CASH FLOWS FROM INVESTING ACTIVITIES Fixed capital expenditure (19,238) (1,193,878)Capital work in progress (216,030) - Proceeds from sale of fixed assets - 400 Net cash used in investing activities (235,268) (1,193,478) CASH FLOWS FROM FINANCING ACTIVITIES Shares issued - 990,000 Deposits against issue of shares - (636,000)Short term borrowings (580,617) 1,615,784 Long term finances (669,939) 1,083,218 Payable to vendor - (467,224)

Net cash generated from/(used in) financing activities (1,250,556) 2,585,778 NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (184,089) 208,855 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 209,751 896

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 25,662 209,751


Cash Flow StatementFor the year ended September 30, 2009



Share Unappropriated Total Particulars capital profit equity

(Rupees in thousand )

Balance as on September 30, 2007 200 - 200 Shares issued fully paid in cash 640,000 - 640,000 Shares issued fully paid for considerationother than cash 350,000 - 350,000 Profit for the year - 41,876 41,876 Balance as on September 30, 2008 990,200 41,876 1,032,076 Profit for the year - 309,105 309,105 Balance as on September 30, 2009 990,200 350,981 1,341,181


Statement of Changes in Equity For the year ended September 30, 2009



Notes to the Financial StatementsFor the year ended September 30, 2009

1. LEGAL STATUS AND NATURE OF BUSINESS Colony Sugar Mills Limited (“the Company”) was incorporated in Pakistan on May 09, 2007

under the Companies Ordinance, 1984. The shares of the company are quoted on Karachi Stock Exchange (Guarantee) Limited. The Company’s registered office is situated in Lahore and its manufacturing facilities are located at Tehsil Phalia, District Mandi Bahauddin and Tehsil Mian Channu, District Khanewal. The company is engaged in manufacturing and sale of white refined sugar and ethanol.

2. STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with the approved accounting

standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) and International Accounting Standards as notified under the provisions of the Companies Ordinance, 1984. Wherever the requirements of the Companies Ordinance, 1984 or directives issued by the Securities and Exchange Commission of Pakistan (SECP) differ with the requirements of these standards, the requirements of the Companies Ordinance, 1984 or the requirements of the said directives take precedence.

2.1 Amendments to published standards and new interpretations effective in current year The following standards, interpretations and amendments in approved accounting

standards are effective from current accounting period:

IFRS 7 – “Financial Instruments: Disclosures” (effective for annual periods beginning on or after April 28, 2008) supersedes IAS 30 – “Disclosures in the Financial Statements of Banks and Similar Financial Institutions” and the disclosure requirements of IAS 32 – “Financial Instruments: Disclosure and Presentation”. The application of the standard did not have significant impact on the Company’s financial statements other than increase in disclosures.

IAS 29 – “Financial Reporting in Hyperinflationary Economies” (effective for annual periods beginning on or after April 28, 2008). The Company does not have any operations in hyperinflationary economies and therefore the application of the standard is not likely to have an effect on the Company’s financial statements.

IFRIC 4 – “Determining whether an Arrangement contains a Lease” (effective for annual periods beginning on or after January 01, 2006) and IFRIC 12 – “Service Concession Arrangements” (effective for annual periods beginning on or after 1 January 2008). However, the application of these interpretations have been deferred by the Securities and Exchange Commission of Pakistan (SECP), through circular 21 of 2009 dated June 22, 2009, for all companies till June 30, 2010. However, the companies are encouraged to comply with the said interpretations but the fact of compliance shall be disclosed in their financial statements.

IFRIC 12 – “Service Concession Agreements” applies to contractual arrangements whereby a private sector operator participates in the development, financing, operation and maintenance of infrastructure for public sector services. Since the Company is not involved in public sector services, the implementation of this interpretation does not affect its financial statements.


IFRIC 13 – “Customer Loyalty Programmes” (effective for annual periods beginning on or after July 01, 2008) addresses the accounting by entities that operate or otherwise participate in customer loyalty programmes under which the customer can redeem credits for awards such as free or discounted goods or services. The application of IFRIC 13 is not likely to have an effect on the Company’s financial statements.

IFRIC 14 – “IAS 19- The Limit on Defined Benefit Asset, Minimum Funding Requirements and their interaction” (effective for annual periods beginning on or after January 01, 2008). IFRIC 14 clarifies when refunds or reductions in future contributions in relation to defined benefit assets should be regarded as available and provides guidance on minimum funding requirements for such asset. The interpretation has no effect on Company’s financial statements for the year ended September 30, 2009.

2.2 New accounting standards, interpretations and amendments which are not yet effective

The following standards, amendments and interpretations of approved accounting

standards will be effective for accounting periods beginning on or after July 01, 2009. These standards, interpretations and the amendments are either not relevant to the Company’s operations or are not expected to have significant impact on the Company’s financial statements other than increase in disclosures in certain cases.

Revised IAS 1 - Presentation of financial statements (effective for annual periods beginning on or after January 01, 2009) introduces the term total comprehensive income, which represents changes in equity during a period other than those changes resulting from transactions with owners in their capacity as owners. Total comprehensive income may be presented in either a single statement of comprehensive income (effectively combining both the income statement and all non-owner changes in equity in a single statement), or in an income statement and a separate statement of comprehensive income.

Revised IAS 23 - Borrowing costs (effective for annual periods beginning on or after January 01, 2009) removes the option to expense borrowing costs and requires that an entity capitalize borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset.

IAS 27 – “Consolidated and Separate Financial Statements” (effective for annual periods beginning on or after January 01, 2009). The amendment removes the definition of the cost method from IAS 27 and replaces it with a requirement to present dividends as income in the separate financial statements of the investor.

IAS 27 – “Consolidated and Separate Financial Statements” (effective for annual periods beginning on or after July 01, 2009) requires accounting for changes in ownership interest by the group in a subsidiary, while maintaining control, to be recognised as an equity transaction. When the group loses control of subsidiary, any interest retained in the former a subsidiary will be measured at fair value with gain or loss recognised in the profit or loss.


Amendments to IAS 32 Financial instruments: Presentation and IAS 1 Presentation of Financial Statements (effective for annual periods beginning on or after January 01, 2009) – Puttable Financial Instruments and Obligations Arising on Liquidation requires puttable instruments, and instruments that impose on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation, to be classified as equity if certain conditions are met.

Amendments to IAS 39 and IFRIC 9 – “Embedded derivatives” (effective for annual periods beginning on or after January 01, 2009). Amendments require entities to assess whether they need to separate an embedded derivative from a hybrid (combined) financial instrument when financial assets are reclassified out of the fair value.

Amendments to IAS 39 – “Financial Instruments: Recognition and measurement - Eligible hedged items” (effective for annual periods beginning on or after July 01, 2009) clarifies the application of existing principles that determine whether specific risks or portions of cash flows are eligible for designation in a hedging relationship.

Amendment to IFRS 2 Share-based Payment – Vesting Conditions and Cancellations (effective for annual periods beginning on or after January 01, 2009) clarifies the definition of vesting conditions, introduces the concept of non-vesting conditions, requires non-vesting conditions to be reflected in grant-date fair value and provides the accounting treatment for non-vesting conditions and cancellations.

Amendment to IFRS 2 – “Share-based Payment - Group Cash-settled Share-based Payment Transactions” (effective for annual periods beginning on or after January 01, 2010). Currently effective IFRS requires attribution of group share-based payment transactions only if they are equity-settled. The amendment resolves diversity in practice regarding attribution of cash-settled share-based payment transactions and require an entity receiving goods or services in either an equity-settled or a cash-settled payment transaction to account for the transaction in its separate or individual financial statements.

Revised IFRS 3 Business Combinations (applicable for annual periods beginning on or after July 01, 2009) broadens among other things the definition of business resulting in more acquisitions being treated as business combinations, contingent consideration to be measured at fair value, transaction costs other than share and debt issue costs to be expensed, any pre-existing interest in an acquiree to be measured at fair value, with the related gain or loss recognised in profit or loss and any non-controlling (minority) interest to be measured at either fair value, or at its proportionate interest in the identifiable assets and liabilities of an acquiree, on a transaction-by-transaction basis.

IFRS 4 – “Insurance Contracts” (effective for annual periods beginning on or after January 01, 2009). The IFRS makes limited improvements to accounting for insurance contracts until the Board completes the second phase of its project on insurance contracts. The standard also requires the entity issuing insurance contracts (an insurer) to disclose information about those contracts.

IFRS 5 (Amendment) – “Non-current assets held-for-sale and discontinued operations” (effective from July 01, 2009). The amendment clarifies that all of a subsidiary’s assets and liabilities are classified as held for sale if a partial disposal sale plan results in loss of control.


Amendment to IFRS 7 – “Improving disclosures about Financial Instruments” (effective for annual periods beginning on or after January 01, 2009). These amendments have been made to bring the disclosure requirements of IFRS 7 more closely in line with US standards. The amendments introduce a three-level hierarchy for fair value measurement disclosures and require entities to provide additional disclosures about the relative reliability of fair value measurements.

IFRS 8 – “Operating segments” (effective for annual periods beginning on or after January 01, 2009) ‘introduces the management approach’ to segment reporting. IFRS 8 will require a change in presentation and disclosure of segment information based on the internal reports that are regularly reviewed by the Company’s ‘chief operating decision maker’ in order to assess each segment’s performance and to allocate resources to them. Currently the Group presents segment information in respect of its business segments.

IFRIC 15 – “Agreement for Construction of Real Estate” (effective for annual periods beginning on or after October 01, 2009) clarifies the recognition of revenues by real estate developers for sale of units, such as apartments or houses, ‘off-plan’, that is, before construction is complete.

IFRIC 16 – “Hedge of Net Investment in a Foreign Operation” (effective for annual periods beginning on or after October 01, 2008) clarifies that net investment hedging can be applied only to foreign exchange differences arising between the functional currency of a foreign operation and the parent entity’s functional currency and only in an amount equal to or less than the net assets of the foreign operation, the hedging instrument may be held by any entity within the group except the foreign operation that is being hedged and that on disposal of a hedged operation, the cumulative gain or loss on the hedging instrument that was determined to be effective is reclassified to profit or loss. The Interpretation allows an entity that uses the step-by-step method of consolidation an accounting policy choice to determine the cumulative currency translation adjustment that is reclassified to profit or loss on disposal of a net investment as if the direct method of consolidation had been used.

IFRIC 17 – “Distributions of Non-cash Assets to Owners” states that when a Company distributes non cash assets to its shareholders as dividend, the liability for the dividend is measured at fair value. If there are subsequent changes in the fair value before the liability is discharged, this is recognised in equity. When the non cash asset is distributed, the difference between the carrying amount and fair value is recognised in the income statement. As the Company does not distribute non-cash assets to its shareholders, this interpretation has no impact on these financial statements.

IFRIC 18 – “Transfers of Assets from Customers” clarifies the requirements of IFRSs for agreements in which an entity receives from a customer an item of property, plant, and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services (such as a supply of electricity, gas or water). The interpretation is not relevant to the Company’s operations.


3. BASIS OF PREPARATION 3.1 These financial statements have been prepared under the historical cost convention.

3.2 The Company’s significant accounting policies are stated in note 5. The preparation of financial statements in conformity with approved accounting standards requires management to make judgments, estimates and assumptions that effect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions and judgments are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the result of which form the basis of making the judgment about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

3.3 Change in accounting estimate

The estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of revision and future periods if revision affects both current and future periods. The areas where various assumptions and estimates are significant to Company’s financial statements or where judgments were exercised in application of accounting policies are as follows:

- Useful life of depreciable assets and residual value thereof - Taxation - Provisions and contingencies - Staff retirement benefits

4. SEASONALITY OF OPERATIONS

The company is inter -alia, engaged in manufacturing of sugar for which the season begins in November and ends in April. Therefore, majority of expenses are incurred and production activities are undertaken in first half of the company’s financial year.

5. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in the preparation of these financial statements are set out hereunder. These policies have been consistently applied to year presented, unless otherwise stated.

5.1 Employees’ retirement benefits

The company operates an unfunded retirement gratuity scheme for its eligible employees. Eligibility is determined subject to completion of a prescribed qualifying period of service. Provision is made annually in the financial statements according to the Industrial and Commercial Employment (Standing Orders) Ordinance, 1968.

5.2 Taxation

Current Provision for taxation is based on taxable income for the year determined in accordance

with the prevailing law for taxation of income. The charge for current tax is calculated using prevailing tax rates or tax rates expected to apply the profit for the year if enacted. The charge for the current tax also includes tax credits and tax rebates available, if any.


Deferred

Deferred tax liability is accounted for using the balance sheet liability method in respect of all taxable temporary differences at the balance sheet date arising from difference between the carrying amount of the assets and liabilities in the financial statements and corresponding tax bases used in the computation of taxable profit. Deferred tax assets are generally recognized for all deductible temporary differences, unused tax losses and tax credits to that extent it is probable that taxable profit will be available in future against which the deductible temporary differences, unused tax losses and tax credits can be utilized.

Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse based on tax rates that have been enacted or substantively enacted by balance sheet date. Deferred tax is charged or credited in the income statement, expect in the case of items credited or charged to equity in which case it is included in equity.

5.3 Property, plant and equipment Property, plant and equipment except freehold land are stated at cost less accumulated

depreciation and impairment loss, if any. Freehold land is stated at cost. Depreciation is charged by applying the reducing balance method over its estimated

useful life at the rates specified in fixed assets note 14.

Depreciation is charged on additions during the year from the month in which assets become available for use while no depreciation is charged from the month of deletion/disposal.

The assets residual value and useful life are reviewed to ensure that the methods and

period of depreciation charged during the year are consistent with the expected pattern of economic benefits from the assets. Appropriate adjustments are made if the impact of depreciation is significant.

Normal repairs are charged to income as and when incurred. Major overhauling,

renovations, rehabilitation, renewals and improvements are capitalized and assets so replaced, if any, are retired.

Gains and losses on disposal of fixed assets are taken to profit and loss account.

5.4 Capital work in progress

Capital work in progress is stated at cost less any identified impairment loss. All expenditure

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 assets are available for use.

5.5 Stores, spares and loose tools These are valued at lower of cost and net realizable value. Cost is calculated using moving

average method except for items in transit which are valued at cost comprising invoice value plus other charges paid thereon till the balance sheet date. Provision is made against obsolete items and slow moving stores and spares based on management’s estimate.


5.6 Stocks-in-trade Stock of raw materials, work-in-process and finished goods, except for those in transit are

valued principally at the lower of weighted average cost and net realizable value. Cost of work-in-process and finished goods comprises cost of direct materials, labour and appropriate manufacturing overheads. Cost of own produced molasses, a by product, is determined on the basis of monthly average cost of molasses purchased from third parties.

Stock of raw material and finished goods purchased for sale/process are valued at weighted average cost.

Materials in transit are stated at cost comprising invoice values plus other charges paid thereon.

Net realizable value signifies the estimated selling price in the ordinary course of

business less costs necessary to be incurred in order to make a sale. Provision is made in the financial statements for obsolete and slow moving stock in trade based on management’s estimate.

5.7 Trade debts and other receivables Receivables are carried at original invoice amount less an estimate made for doubtful

receivable balances based on review of outstanding amounts at year end. Balances considered bad are written off when identified.

5.8 Cash and cash equivalents Cash and cash equivalents comprise of cash in hand and at banks. For the purpose of cash

flow statement, cash and cash equivalents comprise cash in hand, demand deposits. 5.9 Borrowings

Loans and borrowings are recorded at the proceeds received. Financial cost is accounted

for on the accrual basis and is reported under accrued finance cost to the extent of unpaid. Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are charged to income in the period in which these are incurred.

5.10 Trade and other payables

Liabilities for trade and other amounts payable are carried at cost which is the fair value of the consideration to be paid in the future for goods and services.

5.11 Provisions

Provisions are recognized when the company has a legal and constructive obligation as a result of past events and it is probable that an outflow of resources will be required to settle these obligations and a reliable estimate of the amounts can be made.

5.12 Impairment The management assesses at each balance sheet date whether there is any indication

that an asset is impaired. If such indication exists, the management estimates the recoverable amount of the asset. If the recoverable amount of the asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount by charging the impairment loss against income for the year.


5.13 Revenue recognition

Revenue from sales is recognized on despatch of goods to customers.

Return on deposits is accrued on a time proportion basis by reference to the principal outstanding and the applicable rate of return.

5.14 Related party transactions Transactions between the company and a related party are measured at arm’s length

rates determined in accordance with the Comparable Uncontrolled Price Method.

5.15 Foreign currency translations

Transactions in foreign currency are accounted for in Pak rupees at the rates of exchange prevailing at the date of transaction. Monetary assets and liabilities in foreign currencies are translated at rates of exchange prevailing at the balance sheet date and in case of forward exchange contracts at the committed rates. Gains or losses on exchange are charged to income.

5.16 Business segment

A business segment is a group of assets and operations engaged in providing or services that are subject to risks and returns that are different from those of other business segments. Business segments are the primary reporting format and the company is organized into two segments:

- Sugar division - manufacture and sale of sugar - Ethanol division - manufacture and sale of ethanol

A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments. The company mainly operates in one economic environment, hence there are no geographical segments.

5.17 Segment assets and liabilities

The assets of a segment include all operating assets used by a segment and consist principally of operating cash, receivables, inventories and property, plant and equipment, net off allowances and provisions.

Segment liabilities include all operating liabilities consisting principally of deferred liabilities, other payables and accrued liabilities.

The carrying amount of identifiable assets and liabilities are directly attributed to

respective segments. The carrying amount of jointly used assets and liabilities of sugar and allied segment is classified as unallocated assets and liabilities.

5.18 Allocation of segment expenses

All identifiable expenses are directly attributed to the respective segments. The jointly incurred expenses of sugar and allied segments are allocated on the basis of segment revenues.


5.19 Dividends

Dividend distribution to the Company’s shareholders is recognized as liability at the time when proposed.

5.20 Functional and presentation currency

These financial statements are presented in Pak Rupees which is also the Company’s functional currency. All financial information presented in Pak Rupees has been rounded to the nearest thousand.

6. ISSUED, SUBSCRIBED AND PAID UP CAPITAL

2009 2008 2009 2008 (Number of shares) (Rupees in thousand) Ordinary 64,020,000 64,020,000 Ordinary shares of Rupees 10 640,200 640,200 each fully paid in cash

35,000,000 35,000,000 Ordinary shares of Rupees 10 350,000 350,000 each issued as fully paid for consideration other than cash 99,020,000 99,020,000 990,200 990,200

6.1 46,520,000 (2008: 46,520,000) ordinary shares of the Company, including 35,000,000 (2008: 35,000,000) shares issued for other than cash, are held by Colony Mills Limited, an associated undertaking.


7. LONG TERM FINANCES - Secured

Long term finance from commercial banks - Secured The Bank of Punjab 7.1 527,083 575,000 Faysal Bank Limited 7.2 225,000 250,000 KASB Bank Limited 7.3 80,000 -

832,083 825,000 Loan from related parties: Musharika-I 7.4 330,126 782,126 Musharika-II 7.5 441,070 666,092

771,196 1,448,218 1,603,279 2,273,218 Less: Current portion shown under current liabilities Long term finances - secured (117,917) (120,833)

1,485,362 2,152,385


7.1 This represents the term finance obtained from The Bank of Punjab. The finance is repayable in six years in eleven equal semi annual installments commencing from June 28, 2010. It carries mark up at the rate of average 3 month KIBOR plus 195 bps (2008: 3 month KIBOR plus 195 bps) per annum, with 11% floor and no cap. It is secured by way of 1st exclusive charge over present and future current and fixed assets of the Company with 25% margin and personal guarantee of a director.

7.2 This represents the term finance facility of Rs. 250 Million obtained from Faysal Bank

Limited. It is repayable in ten equal semi annually installments. The finance is repayable in six years from the date of disbursement inclusive of one year grace period. It carries mark up at the rate of 6 month average KIBOR plus 300 bps per annum. It is secured by way of 1st pari passu charge on all present and future fixed assets of the Company amounting to Rupees 334 Million and personal guarantee of a director.

7.3 This represents the demand finance facility of Rs. 80 million obtained from KASB Bank Limited. This finance is repayable in thirty-six equal monthly principal installments commencing from January 2010. It carries mark up at the rate of 6 month KIBOR plus 2.5% per annum. It is secured by way of ranking charge over fixed assets of the Company and personal guarantee of a director.

7.4 This represents long term musharika based loan extended by Colony Mills Limited (CML) in consideration of the sale, transfer and vesting of assets less current liabilities of CML’s sugar division, Mian Channu. This musharika shall be repayable over a period of 6 years in equal half yearly installments, with a grace period of 12 months, which may be repaid earlier or swapped with arrangements made by the company, and is subject to profit rates charged to the CML by its creditors matching with its related borrowings. The current profit rate would accordingly be 3 month KIBOR plus 3%. The company, shall not, without prior written consent of CML sell, transfer, grant encumber, lease or otherwise dispose of all or any substantial part of Musharika Assets.

7.5 This represents long term musharika based loan extended by Colony Industries (Private) Limited (CIL). This musharika shall be repayable over a period of 6 years in equal half yearly installments, with a grace period of 24 months, which may be repaid earlier or swapped with arrangements made by the company, and is subject to profit rates charged to the CIL by its creditors matching with its related borrowings. The current profit rate would accordingly be 3 month KIBOR plus 3%.


8. STAFF RETIREMENT BENEFITS - Gratuity

Openning balance as at October 01 1,258 - Charge to profit and loss account 2,202 1,303 Less: Payments made during the year (673) (45)

Net Liability as at September 30 2,787 1,258

8.1 Acturarial valuation will be carried out by the company in due course.



9. DEFERRED TAXATION The liability for deferred taxation comprises of temporary differences relating to:

Accelerated tax depreciation 293,143 - Unused tax credits and losses (270,945) - 22,198 - 10. TRADE AND OTHER PAYABLES Creditors 106,219 80,846 Bills payable 176,403 174,961 Advances from customers 356,303 14,484 Accrued liabilities 21,471 24,329 Income tax deducted at source 664 383 Sales tax payable 27,588 2,150 Refundable securities 279 171 Worker’s profit participation fund 10.1 18,624 2,758 Other payables 200 90 707,751 300,172 10.1 Workers’ profit participation fund (WPPF) Balance as on October 01 2,758 - Allocation for the year 18,609 2,758 Interest on funds 15 - 21,382 2,758 Amount paid during the year (2,758) - Balance as on September 30 18,624 2,758 11. ACCRUED FINANCE COST Accrued finance cost on: - Long term finances 34,675 105,271 - Short term borrowings 64,982 78,922 99,657 184,193

12. SHORT TERM BORROWINGS - SECURED From commercial banks: Bank of Punjab 12.1 125,591 349,465 Bank of Punjab 12.2 199,835 98,284 Emirates Global Islamic Bank 12.3 128,000 172,000 National Bank of Pakistan 12.4 282,728 661,933 National Bank of Pakistan - 22,840 KASB Bank Limited 12.5 299,013 - KASB Bank Limited - 199,912 Faysal Bank Limited - 111,350

1,035,167 1,615,784


12.1 This represents the cash finance obtained from Bank of Punjab with total limit of Rs.250 million (2008: Rupees 350 million) to meet the working capital requirements. The finance is repayable on or before April 30, 2010. It carries markup at the rate of average 3 month KIBOR ask+200 bps per annum, with 11% floor and no cap. It is secured against effective pledge of white refined sugar in bags.

12.2 This represents the running finance obtained from Bank of Punjab with total limit of Rs.200

million (2008: Rupees 100 million) to meet working capital requirements. The finance is repayable on or before April 30, 2010. It carries markup at the rate of average 3 month KIBOR ask+200 bps per annum, with 11% floor and no cap. It is secured by way of 1st exclusive charge on present and future current assets of the Company and personal guarantee of a director.

12.3 This represents the salam finance facility obtained from Emirates Global Islamic Bank

with total limit of Rs.275 Million to meet working capital requirements. The finance is repayable on or before December 31, 2009. It carries profit at the rate of 6 month KIBOR + 400 bps per annum. It is secured by way of 1st ranking charge on present and future current assets of the Company, effective pledge of refined sugar or ethanol or molasses and personal guarantee of a director.

12.4 This represents the cash finance facilities of Rs.550 Million obtained from National Bank

of Pakistan to meet working capital requirements. The finance is repayable on or before November 30, 2009. It carries markup at the rate of 3 month KIBOR +2.5% per annum. It is secured against pledge of refined sugar, molasses, ethanol and personal guarantee of a director.

12.5 This represents Export Re-finance (ERF-1) facility of Rs. 300 million obtained from KASB Bank

Limited to meet export requirements. This finance is repayable on or before September 30, 2009. It carries profit at the rate of SBP rate plus 1% per annum. It is secured by way of 1st ranking charge on present and future current assets of the Company and lien over firm contract /confirmed export letters of credit and personal guarantee of a director.

12.6 The aggregated amount of unavailed credit limits as at September 30, 2009 is Rupees 539.833 million (2008: Rupees 309.216 million).

13. CONTINGENCIES AND COMMITMENTS Guarantees given to sui northern gas pipelines limited and director excise and taxation by

banks on behalf of the company outstanding as at September 30, 2009 were for Rupees 47.000 million (2008: Rupees 46.500 million).


13.1 Commitments Irrevocable letters of credit for: Fixed capital expenditure 49,599 158,300



14. PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets 14.1 3,128,088 3,262,442 Capital work - in - progress 14.3 216,030 -

3,344,118 3,262,442 14.1 Operating Fixed Assets

Freehold Building on Plant and Furniture, Vehicles Total Particulars land freehold land machinery fixture and operating

equipment assets

( Rupees in thousand )

At October 01, 2007 Cost 140,000 768,317 1,281,921 5,516 17,500 2,213,254 Accumulated depreciation - - - - - -

Net book value 140,000 768,317 1,281,921 5,516 17,500 2,213,254 Year ended September 30,2008 Opening net book value 140,000 768,317 1,281,921 5,516 17,500 2,213,254 Acquisition of assets 136,937 676,989 229,430 7,735 7,735 1,058,826 Additions 33,577 14,461 69,519 10,274 7,221 135,052 Disposals: Cost - - - - 429 429 Accumulated depreciation - - - - 29 29

- - - - 400 400 Depreciation charge - 64,143 73,391 1,342 5,414 144,290

Closing net book value 310,514 1,395,624 1,507,479 22,183 26,642 3,262,442 At October 01, 2008 Cost 310,514 1,459,767 1,580,870 23,525 32,027 3,406,703 Accumulated depreciation - 64,143 73,391 1,342 5,385 144,261

Net book value 310,514 1,395,624 1,507,479 22,183 26,642 3,262,442 Year ended September 30,2009 Opening net book value 310,514 1,395,624 1,507,479 22,183 26,642 3,262,442 Additions - 1,569 13,524 2,943 1,202 19,238 Disposals: Cost - - - - - - Accumulated depreciation - - - - - -

- - - - - - Depreciation charge - 69,827 75,910 2,369 5,486 153,592

Closing net book value 310,514 1,327,366 1,445,093 22,757 22,358 3,128,088 At September 30, 2009 Cost 310,514 1,461,336 1,594,394 26,468 33,229 3,425,941 Accumulated depreciation - 133,970 149,301 3,711 10,871 297,853

Net book value 310,514 1,327,366 1,445,093 22,757 22,358 3,128,088

Annual rate of depreciation (%) - 5 5 10 20


14.2 The depreciation charge for the year has been allocated as follows:

Cost of sales 145,737 137,534 Administration and general expenses 7,855 6,756

153,592 144,290


14.3 Capital work-in-progress

2009 2008

Particulars Sugar Ethanol CO2 Total Sugar Ethanol CO2 Total

(Rupees in thousand) (Rupees in thousand)

Plant and machinery 9,082 - 199,683 208,765 - - - -

Civil work 733 3,048 3,484 7,265 - - - -

9,815 3,048 203,167 216,030 - - - -

14.3.1 Capital work in progress includes borrowing cost amounting to Rupees 8.677 million (2008: Rupees Nil)

Note 2009 2008 (Rupees in thousand) 15. STORE, SPARES AND LOOSE TOOLS Stores 88,905 105,119 Spares 52,866 67,992 Loose tools 6,025 10,484

147,796 183,595

15.1 The Company does not hold any stores for specific capitalization. 15.2 There are no stores, spares and loose tools in transit as at September 30, 2009

(2008: Rupees Nil).

16. STOCKS IN TRADE Raw materials - molasses 315,969 101,885 Work in process -Sugar 2,820 1,413 -Molasses 305 5,389

3,125 6,802 Finished goods 16.1 -Sugar 718,187 1,228,105 -Ethanol 27,261 75,966

745,448 1,304,071

1,064,542 1,412,758

16.1 Stocks amounting to Rupees 906.252 million (2008: Rupees 1.352 billion) are pledged with lenders as security against short term borrowings as referred to in note 12.

17. TRADE DEBTS - Considered good Secured (against letters of credits) - Foreign - 144,665 Unsecured - Local - 1,134

- 145,799


Note 2009 2008 (Rupees in thousand)18. ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES Advances - considered good 18.1 218,908 181,729 Advance income tax 28,779 15,965 Security deposits 3,326 3,161 Prepaid expenses 17 802 Other receivables 861 844 Letter of credits 1,323 446

253,214 202,947

18.1 It includes advances given to sugarcane growers of Rupees 39.247 million (2008: Rupees 63.138 million) which are recoverable from growers against supply of sugarcane for crushing season 2009-2010 and to suppliers and contractors of Rupees 73.712 million (2008: Rupees 17.619 million). It also includes Rs.100 million paid for purchase of property after obtaining courts’ consent decree which is presently under execution with the same court. The property shall be disposed off after its take over. Hence, it has been classified as current asset instead of non-current asset in last year.

19. CASH AND BANK BALANCES Cash in hand 220 464 Cash with banks: in current accounts 25,422 184,277 in saving accounts 20 25,010

25,442 209,287

25,662 209,751

20. SALES 2009 2008 Sugar Ethanol Total Sugar Ethanol Total

(Rupees in thousand) (Rupees in thousand) Gross Sales Local 3,788,721 6,624 3,795,345 1,135,511 8,053 1,143,564 Export - 652,294 652,294 109,915 995,961 1,105,876 By-products 436 - 436 24,856 - 24,856 Inter-segment 166,295 - - 184,994 - -

3,955,452 658,918 4,448,075 1,455,276 1,004,014 2,274,296 Less: Sales tax and special excise duty 431,904 1,407 433,311 153,670 1,688 155,358 Commission to selling agents 2,178 3,266 5,444 1,801 10,570 12,371

434,082 4,673 438,755 155,471 12,258 167,729

Net Sales 3,521,370 654,245 4,009,320 1,299,805 991,756 2,106,567

20.1 Inter-segment sales have been eliminated from the total figures.


21. COST OF SALES 2009 2008 Sugar Ethanol Total Sugar Ethanol Total

(Rupees in thousand) (Rupees in thousand) Raw Material consumed 21.1 1,790,351 80,902 1,871,253 1,729,650 312,125 2,041,775 Inter-segment transfers - 166,295 - - 184,994 -

1,790,351 247,197 1,871,253 1,729,650 497,119 2,041,775 Salaries, wages and other benefits 21.2 88,775 11,719 100,494 67,701 19,916 87,617 Fuel and power 55,614 747 56,361 10,557 47,410 57,967 Chemicals consumed 12,807 9,327 22,134 5,290 29,929 35,219 Packing material consumed 19,943 - 19,943 26,257 - 26,257 Oil and Lubricants 12,618 1,517 14,135 12,209 1,359 13,568 Stores and spares consumed 88,307 10,310 98,617 15,245 6,072 21,317 Repair and maintenance 9,109 5,758 14,867 12,246 1,199 13,445 Insurance 9,825 2,686 12,511 2,646 1,151 3,797 Vehicle, running and maintenance 3,320 652 3,972 2,677 460 3,137 Miscellaneous 747 1 748 2,321 146 2,467 Depreciation 105,027 40,710 145,737 96,133 41,401 137,534

2,196,443 330,624 2,360,772 1,982,932 646,162 2,444,100 Work In Process Opening Stock 1,413 5,388 6,801 - - - Add: Stock purchased for process - - - 7,843 - 7,843 Less: Closing Stock (2,820) (305) (3,125) (1,413) (5,388) (6,801)

(1,407) 5,083 3,676 6,430 (5,388) 1,042

Cost of goods produced 2,195,036 335,707 2,364,448 1,989,362 640,774 2,445,142 Finished Goods Opening Stock 1,228,105 75,966 1,304,071 - - - Add: Finished goods purchased for sale - - - 294,426 - 294,426 Less: Closing stock (718,187) (27,261) (745,448) (1,228,105) (75,966) (1,304,071)

509,918 48,705 558,623 (933,679) (75,966) (1,009,645)

2,704,954 384,412 2,923,071 1,055,683 564,808 1,435,497

21.1 Raw material consumed

2009 2008 Sugar Ethanol Total Sugar Ethanol Total

(Rupees in thousand) (Rupees in thousand) Opening stock - 101,885 101,885 - 46,519 46,519 Purchases (Included procurement and other costs) 1,790,351 294,986 2,085,337 1,729,650 367,491 2,097,141 Less: Closing stock - (315,969) (315,969) - (101,885) (101,885)

1,790,351 80,902 1,871,253 1,729,650 312,125 2,041,775

21.1.1 Inter-segment purchases have been eliminated from the total figures. 21.2 These include Rupees 1,391,346 (2008: Rupees 1,011,063) in respect of employees’ retirement

benefits - gratuity.


Note 2009 2008 (Rupees in thousand)

22. ADMINISTRATIVE AND GENERAL EXPENSES Director’s remuneration 1,800 900 Salaries, wages and other benefits 22.1 45,528 34,790 Fee and subscription 2,004 5,903 Vehicle running 4,487 5,589 Legal and professional 3,715 4,811 Management fee - 3,000 Rent, rates and taxes 1,114 1,664 Travelling and conveyance 4,032 2,909 Postage, telephone and telegrams 1,908 1,064 Utilities expenses 2,039 1,011 Entertainment 801 821 Insurance 1,824 700 Repair and maintenance 266 348 Printing and stationery 445 225 Charity and donations 777 20 Newspapers and periodicals 6 16 Auditors’ remuneration 22.2 365 375 Other expenses 1,376 1,038 Depreciation 7,855 6,756

80,342 71,940 22.1 These include Rupees 811,337 (2008:Rupees 291,529) in respect of employees’ retirement

benefits - gratuity. 22.2 Auditors’ remuneration Statutory audit 225 200 Half yearly review 83 75 Certification charges 35 75 Out of pocket expenses 22 25

365 375 23. DISTRIBUTION AND MARKETING EXPENSES Salaries and other benefits 1,313 1,101 Stocks handling charges 54,989 87,701 Insurance 3,210 1,354 Other expenses 1,236 299

60,748 90,455


2009 2008 (Rupees in thousand)

24. OTHER OPERATING INCOME Sale of Fertilizers 147 3,965 Profit on bank deposits 2,549 - Miscellaneous 1,383 1,024

4,079 4,989

25. FINANCE COST Financial charges on: - Long term finances 206,166 292,054 - Short term borrowings 356,409 162,349 Interest on Workers’ profit participation fund 15 - Bank charges, commission and excise duty 14,464 4,094

577,054 458,497 26. PROVISION FOR TAXATION Provision for taxation for: - Current year 23,312 10,533 - Prior year (1,040) -

22,272 10,533 - Deferred tax 22,198 -

44,470 10,533

Income tax return for the tax year 2009 has been filed under universal self assessment scheme is deemed to have been accepted.

No numeric tax rate reconciliation is given in these financial statements as provisions made during the current and preceding years respectively represent final tax deducted at source on realisation of foreign exchange proceeds under section 154 and minimum tax payable under section 113 of the Income Tax Ordinance, 2001.

Net temporary differences result in deferred tax liability of an amount of Rs. 22.198 million, the provision of which has been made in these financial statements of the Company.


27. REMUNERATION OF CHIEF EXECUTIVE OFFICER , DIRECTORS AND EXECUTIVES

2009 2008 Chief Chief Executive Directors Executives Total Executive Directors Executives Total (for twelve months) (for six months)

(Rupees in thousand)

Managerial remuneration 1,800 - 7,028 8,828 900 - 1,686 2,586 Rent and utilities - - 3,639 3,639 - - 288 288 Medical - - 740 740 - - 169 169 1,800 - 11,407 13,207 900 - 2,143 3,043 Number of Persons 1 - 21 22 1 - 4 5

27.1 In addition to the above, some of the executives are provided with free use of company maintained cars.

2009 2008 (Rupees in thousand)

28. RELATED PARTY TRANSACTIONS Colony Mills Limited - Associated company Purchase of sugar division of Colony Mills limited - 1,480,059 Long term musharika finance 330,126 782,126 Profit charged on long term musharika finance 77,406 106,509 Management fee - 3,000 Colony Industries (Private) Limited - Related party Long term musharika finance 441,070 666,092 Profit charged on long term musharika finance 92,885 102,285


29. BUSINESS SEGMENT INFORMATION

2009 2008 Note Sugar Ethanol Total Sugar Ethanol Total

(Rupees in thousand) (Rupees in thousand) Revenue Local and export 20 3,355,075 654,245 4,009,320 1,114,811 991,756 2,106,567 Inter-segment 20 166,295 - - 184,994 - -

3,521,370 654,245 4,009,320 1,299,805 991,756 2,106,567 Segment expenses Cost of sales - Intersegment 21 - 166,295 - - 184,994 - - External 21 2,704,954 218,117 2,923,071 1,055,683 379,814 1,435,497 2,704,954 384,412 2,923,071 1,055,683 564,808 1,435,497 Gross profit 816,416 269,833 1,086,249 244,122 426,948 671,070 Administrative and general expenses 22 (73,970) (6,372) (80,342) (66,785) (5,155) (71,940) Distribution and marketing expenses 23 (10,586) (50,162) (60,748) (6,979) (83,476) (90,455)

Operating profit 731,860 213,299 945,159 170,358 338,317 508,675

29.1 Inter-segment sales and purchases Inter-segment sales and purchases have been eliminated from total figures.

29.2 Basis of inter-segment pricing All inter-segment transfers are made at cost.

2009 2008

Sugar Ethanol CO2 Total Sugar Ethanol CO2 Total

(Rupees in thousand) (Rupees in thousand)

29.3 Segment assets 3,570,025 1,062,140 203,167 4,835,332 4,506,924 910,368 - 5,417,292 29.4 Segment liabilities 2,752,665 741,486 - 3,494,151 3,708,084 677,132 - 4,385,216 29.5 Capital expenditures 29,053 3,048 203,167 235,268 1,156,012 37,866 - 1,193,878 29.6 Depreciation on property, plant and equipment 110,719 42,873 - 153,592 100,951 43,339 - 144,290 29.7 Non cash items (excluding depreciation) 17,955 2,856 - 20,811 3,709 352 - 4,061


30. FINANCIAL INSTRUMENTS The Company’s financial instruments are as follows:

2009

Markup bearing Non-Markup bearing Effective Total Maturity Maturity after Sub Maturity Maturity after Sub rate of upto one one year Total upto one one year Total markup/ year and upto year and upto profit five years five years

% ( Rupees in thousand )

Financial Assets Trade debts - - - - - - - Advances, deposits, prepayments and other receivables 4,666 - - - 4,666 - 4,666 Cash and bank balances 25,662 20 - 20 25,642 - 25,642

30,328 20 - 20 30,308 - 30,308 Off balance sheet - - - - - - - Total 30,328 20 - 20 30,308 - 30,308 Financial Liabilities Long term finances 13.30 to 17.50 1,603,279 117,917 1,485,362 1,603,279 - - - Trade and other payables 679,499 - - - 679,499 - 679,499 Accrued mark up 99,657 - - - 99,657 - 99,657 Short term borrowings 7.50 to 18.40 1,035,167 1,035,167 - 1,035,167 - - -

3,417,602 1,153,084 1,485,362 2,638,446 779,156 - 779,156 Off balance sheet Guarantees 47,000 - - - - 47,000 47,000 Letters of credit 49,599 - - - 49,599 - 49,599 96,599 - - - 49,599 47,000 96,599 Total 3,514,201 1,153,084 1,485,362 2,638,446 828,755 47,000 875,755 On balance sheet gap (3,387,274) (1,153,064) (1,485,362) (2,638,426) (748,848) - (748,848) Off balance sheet gap (3,483,873) (1,153,064) (1,485,362) (2,638,426) (798,447) (47,000) (845,447)

2008

Markup bearing Non-Markup bearing Effective Total Maturity Maturity after Sub Maturity Maturity after Sub rate of upto one one year Total upto one one year Total markup/ year and upto year and upto profit five years five years

% ( Rupees in thousand )

Financial Assets Trade debts 145,799 - - - 145,799 - 145,799 Advances, deposits, prepayments and other receivables 4,409 - - - 4,409 - 4,409 Cash and bank balances 209,751 25,010 - 25,010 184,741 - 184,741 359,959 25,010 - 25,010 334,949 - 334,949 Off balance sheet - - - - - - - Total 359,959 25,010 - 25,010 334,949 - 334,949 Financial Liabilities Long term finances 15.55 to 16.93 2,273,218 120,833 2,152,385 2,273,218 - - - Trade and other payables 297,639 - - - 297,639 - 297,639 Accrued mark up 184,193 - - - 184,193 - 184,193 Short term borrowings 12.39 to 17.33 1,615,784 1,615,784 - 1,615,784 - - - 4,370,834 1,736,617 2,152,385 3,889,002 481,832 - 481,832 Off balance sheet Guarantees 46,500 - - - - 46,500 46,500 Letters of credit 158,300 - - - 158,300 - 158,300 204,800 - - - 158,300 46,500 204,800 Total 4,575,634 1,736,617 2,152,385 3,889,002 640,132 46,500 686,632 On balance sheet gap (4,010,875) (1,711,607) (2,152,385) (3,863,992) (146,883) - (146,883)

Off balance sheet gap (4,215,675) (1,711,607) (2,152,385) (3,863,992) (305,183) (46,500) (351,683)


31. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company finances its operations through equity, borrowings and management of working capital with a view to maintaining a reasonable mix between the various sources of finance to minimize risk. Taken as a whole, risks arising from the company’s financial instruments is limited as there is no significant exposure to market risk in respect of such instruments. The company manages its exposure to financial risk in the following manner:

31.1 Concentration of credit risk Credit risk represents the accounting loss that would be recognized at the reporting

dateif counter parties failed completely to perform as contracted. The company’s credit risk is primarily attributable to its trade debts and its balances at banks. The credit risk on liquid funds is limited because the counter parties are banks with reasonably high credit ratings. Out of the total financial assets of Rupees 359.959 million (2008: Rupees 359.959 million), the financial assets which are subject to credit risk amount to Rupees 359.495 million (2008: Rupees 359.495 million). The company believes that it is not exposed to major concentration of credit risk as exposure is spread over a large number of counter parties in case of trade debts. To manage exposure to credit risk, the company applies credit limits to its customers.

31.2 Currency risk Currency risk is the risk that the value of a financial instrument will fluctuate due to

changes in foreign exchange rates. Currency risk arises mainly where receivables and payables exist due to transactions with foreign buyers and suppliers. The company believes that it is not exposed to major foreign exchange risk.

31.3 Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The company borrows at fixed and market based rates and as such the risk is minimized. Significant interest rate risk exposures are primarily managed by a mix of borrowings at fixed and variable interest rates and contracting floor and cap of interest rates as referred to in notes 7 and 12.

31.4 Liquidity risk Liquidity risk is the risk that an enterprise will encounter difficulty in raising funds to meet

commitments associated with financial instruments. The company follows an effective cash management and planning policy to ensure availability of funds. The company also aims to maintaining flexibility in funding by keeping committed credit lines available.

32. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values. Fair value is determined on the basis of objective evidence at each reporting date.


33. CAPITAL RISK MANAGEMENT

The company’s objective when managing capital is to safe guard the Company’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; and to maintain a strong capital base to support the sustained development of its business.

The Company manages its capital structure by monitoring return on net assets and makes

adjustments to it in the light of changes in economic conditions. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend paid to shareholders or issue new shares.

2009 2008 34. CAPACITY AND PRODUCTION Sugar Phalia Unit Rated crushing capacity - On the basis of 105 days (2008: 135 days) M. Tons 787,500 1,012,500 - Actual sugarcane crushed M. Tons 305,445 682,986 - Actual sugar production M. Tons 25,687 55,719 Mian Channu Unit Rated crushing capacity - On the basis of 130 days (2008: 110 days) M. Tons 585,000 495,000 - Actual sugarcane crushed M. Tons 382,585 439,481 - Actual sugar production M. Tons 39,049 40,975 The low crushing was due to limited availability of sugarcane and normal maintenance in the

ordinary course of business. Ethanol

Rated capacity on the basis of 333 days working(E.N.A. & B-Grade) Liters 41,625,000 41,625,000 Actual production (E.N.A., E.N.A. Anhydrous & B-Grade) Liters 13,522,468 37,361,663 The low production was due to limited availability of molasses and normal maintenance in the

ordinary course of business.


2009 2008 35. EARNINGS PER SHARE 35.1 Basic earnings per share Profit for the year Rupees 309,105,000 41,876,000 Weighted average number of ordinary shares in issue during the year Numbers 99,020,000 99,020,000 Earning per share - Basic Rupees 3.12 0.42 35.2 Diluted earnings per share There is no dilution of the basic earnings per share of the Company.

36. DATE OF AUTHORIZATION OF ISSUE These financial statements were authorized for issue on January 07, 2010 by the Board of

Directors of the Company. 37. GENERAL 37.1 Figures have been rounded off to the nearest thousand. 37.2 Previous year’s figures have been rearranged, wherever necessary for the purpose of

comparison. However, no significant re-arrangement, except as disclosed in note 18.1, has been made in these financial statements.



Financial Highlights 2009 2008 2007

(Rupees in thousand)

Share capital 990,200 990,200 200

Unappropriated profit 350,981 41,876 -

Non current liabilities 1,510,347 2,153,643 1,657,224

Current liabilities 1,983,804 2,231,573 36,793

Non current assets 3,344,118 3,262,442 2,213,254

Current assets 1,491,214 2,154,850 116,963

Turnover 4,009,320 2,106,567 -

Gross profit 1,086,249 671,070 -

Operating profit 945,159 508,675 -

Profit before taxation 353,575 52,409 -

Profit after taxation 309,105 41,876 -

Production Data

Cane crushed (M. Tons) 688,030 1,122,467 -

Sugar Produced (M. Tons) 64,736 96,694

Recovery (%)

Phalia 8.41% 8.16% -

Mian Channu 10.22% 9.21% -

Ethanol produced (Liters) 13,522,468 37,361,663 -


Number of Shareholding Total Shareholders From To Shares Held

355 1 100 15,698 599 101 500 153,227 221 501 1,000 163,534 306 1,001 5,000 624,652 60 5,001 10,000 461,700 18 10,001 15,000 201,116 3 15,001 20,000 53,018 4 20,001 25,000 92,780 6 25,001 30,000 162,132 3 30,001 35,000 96,265 4 35,001 40,000 152,133 2 40,001 45,000 87,809 1 45,001 50,000 45,585 2 50,001 55,000 106,249 1 55,001 60,000 57,224 1 95,001 100,000 100,000 1 115,001 120,000 118,215 1 125,001 130,000 126,000 1 165,001 170,000 165,215 1 255,001 260,000 257,912 1 305,001 310,000 306,271 1 335,001 340,000 335,682 1 345,001 350,000 345,780 1 960,001 965,000 962,073 2 1,850,001 1,855,000 1,853,747 1 3,325,001 3,330,000 3,326,309 1 5,130,001 5,135,000 5,130,929 1 7,290,001 7,295,000 7,292,861 1 9,210,001 9,215,000 9,211,690 1 20,490,001 20,495,000 20,494,194 1 46,515,001 46,520,000 46,520,000

1,602 99,020,000

Pattern of Shareholding As at September 30, 2009


Categorial Pattern of Shareholding As at September 30, 2009

Categories of Number of Number of PercentageShareholders Shareholders shares held

INDIVIDUAL 1,544 38,602,073 38.98

FINANCIAL INSTITUTIONS 7 751,161 0.75

INSURANCE COMPANIES 8 1,050,028 1.06

JOINT STOCK COMPANIES 38 58,303,862 58.88

MUTUAL FUND 1 306,271 0.32

OTHERS 4 6,605 0.01

TOTAL 1,602 99,020,000 100.00


Shareholding Percentage

Directors, CEO, and their spouse and minor children

Mr. Mughis A. Sheikh 5,130,929 5.18

Mr. Faqir Hussain Khan 1,000 0.00

Mr. Waqar Ibn Zahoor Bandey 1,000 0.00

Mr. Muhammad Asghar 1,000 0.00

Mian Muhammad Ali 1,000 0.00

Mr. Ahmed Haji Mussa 1,000 0.00

Mr. Asad Ali 1,000 0.00

Mrs. Fozia Mughis Sheikh 3,326,309 3.36

Executives

- -

Associated Companies, Undertakings & Related parties

Colony Mills Limited 46,520,000 46.98

NIT 681,462 0.69

ICP - -

Public Sector Companies & Corporations 1,062 0.00

Banks, DFIs & Insurance Companies, Modarabas

and Mutual Funds 1,425,998 1.44

others 11,789,405 11.91

Public 30,138,835 30.44

Total 99,020,000 100.00

Shareholding 10% and More

Mr. Fareed M. Sheikh 20,494,194 20.70

Colony Mills Limited 46,520,000 46.98

There has been no trading of shares by CEO, Directors, CFO and Company Secretary, their spouse

and minor children except the qualifying shares acquired by incoming directors.

Pattern of Shareholding (Additional Information) under Code of Corporate Governance as at September 30, 2009


I/We _____________________________________________________________________________ of

___________________________________________________________ being member of COLONY

SUGAR MILLS LIMITED and holder of _______________________ Ordinary Shares as per

Registered Folio / CDC Participant I.D. No. _________________________ hereby appoint

Mr./Mrs./Miss. _________________________________________________ of ___________________

or failing him/her Mr./Mrs./Miss. ______________________________ of ______________________

who is also a member of the COLONY SUGAR MILLS LIMITED vide Registered Folio / CDC

Participant I.D. No. __________________ as my proxy to vote for me and on my behalf at the

3rd Annual General Meeting of the Company to be held on Saturday, January 30, 2010 at

10.00 a.m. and any adjournment thereof.

Signed this _______________ day of __________ 2010.

Revenue Stamp(s) of Rupees five

Signature (As registered with the company)

FORM OF PROXY

WITNESS: 1Signature____________________________

Name ____________________________

Address ____________________________

___________________________

CNIC or

Passport # ___________________________

WITNESS: 2Signature_____________________________

Name _____________________________

Address _____________________________

____________________________

CNIC or

Passport # ____________________________

NOTES: -

• This proxy form, duly completed and signed, must be received at the Registered

Office of the company not less than 48 hours before the time of holding the

Meeting.

• No person shall act as Proxy unless he/she himself / herself is a Shareholder of the

Company except that a company may appoint a person as its representative who

is not a shareholder.

Ismail Aiwan-e-Science Building205 Ferozepur RoadLahore - 54600PAKISTAN

2 6 5 6 6 9

+92 42 3576-3247

+92 42 111-COLONY

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