Managements Assessment Regarding Going Concern

Assumption
1-During the year under review the Sponsor Directors have
further introduced a significant amount towards Share Deposit
Money enhancing the balance to Rs. 403 Million as of September
30,2015, from Rs. 107 Million as of September 30, 2014. The
Sponsors also intend to bring the balance of Share Deposit Money
to Rs. 500 Million by December 31, 2015 and yet further to Rs.
600 Million by March 31, 2016. This factor fairly constitutes a
tangible evidence of the continued commitment of the Sponsors
to support the operations of the Company for foreseeable future.
The Company has been successfully able to negotiate with The
National Bank of Pakistan and win the renewal of a
comprehensive working capital facility for the next year 201516.It is also pertinent to mention that consequent upon complying
with all the required pre disbursement formalities by the
Company, the National Bank of Pakistan has duly issued to the
Company the Disbursement Authorization Certificate (DAC) during
third week of December 2015 and after that the Company has
initiated draw down of the facility.
The Company is also in the process of similar negotiations with
other banks and financial institutions for renewals/fresh working
capital facilities. It is reasonably expected that in view of the
continued confidence demonstrated by National Bank of Pakistan
as a precedence, these negotiations will also prove to be
successful.
The Company started the Crushing Season 2015-16 w.e.f
November 25, 2016 and is crushing an average quantity ranging
between 5,000 to 6,000 Metric Tons per day. It is fortunate that
during the current year the nature has been very generous and
the cane crop is very rich, healthy, and abundant. It is reasonably
expected that current season is going to be a breakthrough year

for the sugar industry in the province and the Company is also
going to reap the related benefits. The Company is expected to
operate for more than 120 days and produce an impressive
quantity of sugar and other by products.
An added advantage for the Company during the current season
is that another sugar mill of 12,000 TCD capacity which was so far
sharing the cane crop of the area with the Company has shifted to
southern Punjab and thus the quantity of cane available to the
Company is much more than in the preceding seasons and this is
also going to help the Company to turn around.
In fact, owing to the typical nature of the sugar industry, the
crushing days are the total periodduring which the Company
executes the entire revenue generation activity and with the
successful completion on the season it is concluded that the
Company has operated for the whole year.The abundant quantity
of cane being crusheddaily, during the current 2015-16 seasonby
the Company, is also a clear indication of the continued support
and comfort of the raw material suppliers (sugar cane growers)to
and upon the Company.
Owing to generally stringent financial conditions being faced by
the Sugar Mills of Punjab, the Lahore High Court ordered sealing
of nine (9) sugar mills which also included Husein Sugar Mills. The
Company was able to fulfill all the conditions ordained by the
Lahore High Court for de sealing of the mills and consequently the
Mill was de sealed and the Company is briskly engaged in
accomplishing the crushing season 2015-16.
The Government of Pakistan has initially allowed export of 5,000
Metric Tons of sugar. This policy decision of the government is
understandably going to have very salutary effects for the sugar
industry of the country. In line with this policy the Company is
actively engaged in formalizing the contracts for export of 30

Metric Tons mainly with customers in Afghanistan and Central

Asian States.
In view of the economies of scale and, abundant quantity of
availability of cane due to shifting of a 12,000 TCD mill from the
area, Company is planning to increase its crushing capacity to
15,000 TCD in next three years phasing out as 9,000TCD next
year 12,000TCD in next two years and 15,000TCD in the next
third year.

2- Paragraph A2.of the ISA 570 Going Concern, outlines the following
examples of events or conditions that, individually or collectively, may
cast significant doubt about the going concern assumption. The ISA
further states that his listing is not all-inclusive nor does the existence
of one or more of the items always signify that a material
uncertainty exists.
Financial
Net liability or net current liability position.
Fixed-term borrowings approaching maturity without realistic
prospects of renewal or repayment; or excessive reliance on short-term
borrowings to finance long-term assets.
Indications of withdrawal of financial support by creditors.
Negative operating cash flows indicated by historical or prospective
financial statements.
Adverse key financial ratios.
Substantial operating losses or significant deterioration in the value of
assets used to generate cash flows.
Arrears or discontinuance of dividends.
Inability to pay creditors on due dates.
Inability to comply with the terms of loan agreements.
Change from credit to cash-on-delivery transactions with suppliers.
Inability to obtain financing for essential new product development or
other essential investments.

Operating
Management intentions to liquidate the entity or to cease operations.
Loss of key management without replacement.
Loss of a major market, key customer(s), franchise, license, or
principal supplier(s).
Labor difficulties.
Shortages of important supplies.
Emergence of a highly successful competitor.
Other
Non-compliance with capital or other statutory requirements.
Pending legal or regulatory proceedings against the entity that may, if
successful, result in claims that the entity is unlikely to be able to satisfy.
Changes in law or regulation or government policy expected to
adversely affect the entity.
Uninsured or underinsured catastrophes when they occur.
The ISA 570 further prescribes that the significance of such events or
conditions often can be mitigated by other factors. For example, the
effect of an entity being unable to make its normal debt repayments may
be counter-balanced by managements plans to maintain adequate cash
flows by alternative means, such as by disposing of assets, rescheduling
loan repayments, or obtaining additional capital. Similarly, the loss of a
principal supplier may be mitigated by the availability of a suitable
alternative source of supply.
3- In context of the paragraph (2) above which describes the events or
conditions that, individually or collectively, may cast significant doubt
about the going concern assumption; and the mitigating factors
described in paragraph (1) above, itcan be justifiably concluded that
there is no uncertainty about the going concern assumption related to the

Company and the Company is a Going Concern for any foreseeable

future.