71 out of 84 sugar mills declared losses in FY19: FBR chief

[khail007]

Sugar Mills are actually running in losses

What my limited knowledge is:

1. Sugar mills usually do the business upon poor farmers money ... crushing of sugarcane and payment to farmer after sale of sugar. Even in accepting sugarcane is involved irregularities like delaying tactics and weighing issues.
2. The residue of sugarcane after crushing is used as cattle fodder as well as burned to operate boilers for electricity generation - saving money thru by product and reducing operating expenditures.
3. The molasses collected in process of sugar production is one of vital content in cattle and poultry feed. Also used as a glueing medium in foundry process - again money.

So how they operate on losses - There are rumours that in NS mills even staff was recruited and preferred from a hostile neighbouring country.

 

[B.K.N]

So how they operate on losses

They say the at which price government is forcing us to buy sugarcane is too high
and at this price we are not making any profits

The residue of sugarcane after crushing is used as cattle fodder

Leaves of sugarcane are used as fodder mixed with barseem

 

[khail007]

International audit firms not audit private companies as audit fees is high and only public listed companies are mostly audited by big4 firms Recently Ey ernst young has decided to move out of Pakistan due to lack of good clients and low profits in Pakistan and it is expected other top 3 audit firms will also leave Pakistan so there will be no franchise of top firms in Pakistan in future.

OK ... if top four are moving we can hire the next top four, but audit must be carried out to justify the claims - legislation could be done to benefit the entity to be audited, if the claim is valid else ... suggested punishment and award of title of 'black sheep businessman'.

They say the at which price government is forcing us to buy sugarcane is too high
and at this price we are not making any profits

Sir G ... it is their statement, usually our businessmen statement should not be taken at their face values. IMO it is not a rocket science to calculate the actual cost of commodity.

Leaves of sugarcane are used as fodder mixed with barseem

You just increased my knowledge ... so leaves separated from sugarcane mixed for fodder. I was talking about the residue of actual sugarcane after crushing which they used to generate electricity - so dual fold of income from one by product; leaves + sugarcane residue.

 

[B.K.N]

it is their statement

These businesses aren't as much profitable as some people think

leaves + sugarcane residue.

Labourers those who cut sugarcane remove leaves and feed it to their cattle
only stem which is called gana is sold to sugar Mills
they extract it's juice and the stems are used for burning I am not sure but I think it's also used for making gatta or something like that

 

[Yaseen1]

I think every industry in Pakistan cannot be allowed a license unless they register as private companies and every private company cannot remain a company unless they carry out annual audits so they are already carrying out audit but by using small audit firms.These sugar mills in Pakistan also include jhangir tareen group of industries and if they are also incurring loss I think there is some decline in the profit of this sector which can be confirmed by another audit performed under fbr order

OK ... if top four are moving we can hire the next top four, but audit must be carried out to justify the claims - legislation could be done to benefit the entity to be audited, if the claim is valid else ... suggested punishment and award of title of 'black sheep businessman'.


Sir G ... it is their statement, usually our businessmen statement should not be taken at their face values. IMO it is not a rocket science to calculate the actual cost of commodity.


You just increased my knowledge ... so leaves separated from sugarcane mixed for fodder. I was talking about the residue of actual sugarcane after crushing which they used to generate electricity - so dual fold of income from one by product; leaves + sugarcane residue.

 

[AsifIjaz]

majority of the Sugar mills are owned by politicians or their relatives. Till we change that they will always be in loss. This nation underreports its books and hires accountants to make it look clean, add political influence on top of it and no one can touch you...

 

[Yaseen1]

theses types of activities by audit firm and accountants happen in all countries and even in u.s and japan.Recently audit firm Kpmg u.s is fined 50million usd which is equal to 7.8 billion Pkr for malpractices and poor quality of their audit services
.This can only be controlled if blockchain becomes common in businesses for maintaining records

majority of the Sugar mills are owned by politicians or their relatives. Till we change that they will always be in loss. This nation underreports its books and hires accountants to make it look clean, add political influence on top of it and no one can touch you...

 

[khail007]

These businesses aren't as much profitable as some people think



Labourers those who cut sugarcane remove leaves and feed it to their cattle
only stem which is called gana is sold to sugar Mills
they extract it's juice and the stems are used for burning I am not sure but I think it's also used for making gatta or something like that

Actually ... it is in our DNA that if I got benefitted from a thing, I will not pass on its pros but only cons. For example ... you could see in the medical 'Hikmat' is taking her last breaths while 'Allopathic' way of treatment is dominant. 'Hakeems' were keeping the knowledge to only themselves or educated only their sons, brothers or relatives. On the other hand Westerns spread allopathic way thru colleges and universities.

I am sure of sugarcane residue after crushing it out for juice is used to burn in boilers to generate steam to further generate electricity.

 

[B.K.N]

theses types of activities by audit firm and accountants happen in all countries and even in u.s and japan.Recently Kpmg u.s is fined 50million usd which is equal to 7.8 billion Pkr for malpractices and poor quality of their services
.This can only be controlled if blockchain becomes common in businesses for maintaining records

I think most of these sugar Mills should be closed as sugar isn't something very necessary without we can't survive
then the land which is being used for sugarcane cultivation would be used for other useful crops like cotton and oil seed crops like cannola etc
it would make Pakistan a big producer of cooking oil cotton wheat etc

Hikmat

Because these hakeems were /are fraud
but as no other health facilities were available in past they were andhon main kana raja

 

[khail007]

I think every industry in Pakistan cannot be allowed a license unless they register as private companies and every private company cannot remain a company unless they carry out annual audits so they are already carrying out audit but by using small audit firms.These sugar mills in Pakistan also include jhangir tareen group of industries and if they are also incurring loss I think there is some decline in the profit of this sector which can be confirmed by another audit performed under fbr order

Even if sugar mills are doing the audit on their own - government/FBR should randomly pick some if not all to confirm the validity of their audit.

 

[313ghazi]

International audit firms not audit private companies as audit fees is high and only public listed companies are mostly audited by big4 firms Recently Ey ernst young has decided to move out of Pakistan due to lack of good clients and low profits in Pakistan and it is expected other top 3 audit firms will also leave Pakistan so there will be no franchise of top firms in Pakistan in future.

On the bright side it is an opportunity for budding young Pakistani accountants with experience in auditing to setup a business and dominate the auditing field. If you can get in the FBR good books, you could be set for work for a long time.

 

[khail007]

Because these hakeems were /are fraud
but as no other health facilities we're available in past they were andhon main kana raja

Sir G ... in present days most of them are frauds using steroids in their medicines but not all. In olden days that was a reputable profession and even at the time of British India; 'Gora Badshah' was also benefitted from it for treatment.

 

[Yaseen1]

the problem is that big4 audit firm brand name is so dominant in world that if audit is performed by audit firm other than big4 firms then foreign investors are not ready to invest in these companies particularly listed companies and consider their financial statements less credible so it will have negative impact on FDI Similarly multinational companies like unilever if in any foreign country are hiring any big4 firm for audit also require similar firm to carryout audit in Pakistan

On the bright side it is an opportunity for budding young Pakistani accountants with experience in auditing to setup a business and dominate the auditing field. If you can get in the FBR good books, you could be set for work for a long time.

.

 

[313ghazi]

the problem is that big4 audit firm brand name is so dominant in world that if audit is performed by audit firm other than big4 firms then foreign investors are not ready to invest in these companies particularly listed companies and consider their financial statements less credible so it will have negative impact on FDI Similarly multinational companies like unilever if in any foreign country are hiring any big4 firm for audit also require similar firm to carryout audit in Pakistan

.

Thats tomorrows problem, todays problem is tax revenue. Lets use our own resources to get our house in order and then look at auditing snobbery next. If the people are ACCA qualified and following industry standards, they'll soon build a reputation for themselves. Pakistan is no longer an investment outpost far far away from the rest of the world, we are beginning to have options.

 

[RoadRunner401]

They say the at which price government is forcing us to buy sugarcane is too high
and at this price we are not making any profits

I am going to make it simple as I can, when we start a new unit, I accept to lose money in the first few years of starting a Mfg facility and budget for it, we do audits and calculate for the future where we going to be in x amount of years and if its shows its going to stay negative we will shut it down. Point is, if you are not going to be profitable in the first few years you will never be profitable period...
If these companies are running at loss after so many years in business either the owners have unlimited amount of money, which they are willing to lose or they are lying.