BABA FARID
S U G A R M I L L S L I M I T E D
CONDENSED INTERIM FINANCIAL INFORMATION
For the 1st Quarter Ended 31 December 2021 (Un-audited)
QUARTERLY
REPORT
2 0
CONTENTS
Company Information | 2 |
Directors' Review | 3 |
Condensed Interim Statement of Financial Position | 10 |
Condensed Interim Statement of Profit or Loss | 11 |
Condensed Interim Statement of Comprehensive Income | 12 |
Condensed Interim Statement of Cash Flows | 13 |
Condensed Interim Statement of Changes in Equity | 14 |
Selected Notes to the Condensed Interim Financial Information | 15 |
First Quarterly Report 2021 | 1 | |
COMPANY INFORMATION
BOARD OF DIRECTORS
Mrs. Qaiser Shamim Khan | Chairperson |
Mr. Adnan Ahmed Khan | Chief Executive |
Mr. Muhammad Shamim Khan | Executive Director |
Mr. Nauman Ahmed Khan | Non-Executive |
Mrs. Sarah Hajra Khan | Non-Executive |
Mr. Farid ud Din Ahmed | Independent Director |
Mr. Malik Manzoor Hussain Humayoon | Independent Director |
CHIEF FINANCIAL OFFICER | AUDIT COMMITTEE | ||
Mr. Wasif Mahmood | Mr. Farid-ud-Din Ahmad | Chairman | |
COMPANY SECRETARY | Mrs. Sarah Hajra Khan | Member | |
Mr. Malik Manzoor Hussain Humayoon | Member | ||
Mr. Muhammad Imran | NOMINATION COMMITTEE | ||
AUDITORS | Mr. Malik Manzoor Hussain Humayoon | Chairman | |
BDO Ebrahim & Co. | Mr. Farid-ud-Din Ahmad | Member | |
RISK MANAGEMENT COMMITTEE | |||
Chartered Accountants | |||
F-2, First Floor, Grace Centre, | |||
Canal Bank Road, 1-B Canal Park, | Mr. Malik Manzoor Hussain Humayoon | Chairman | |
Gulberg-II, Lahore | Mr. Farid-ud-Din Ahmad | Member | |
Tel: 042-35875709-10 | SHARE REGISTRAR | ||
Fax: 042-35717351 | |||
Email: info@bdo.com.pk | M/s Corplink (Pvt) Limited | ||
MILLS | |||
Share Registrar, Wings Arcade, | |||
1-K Commercial Model Town, Lahore. | |||
5 K.M. Faisalabad Road, Okara | Tel: 042-35916714, | ||
Tel: 044-2714418-21 | Fax: 042-35869037 | ||
Fax: 044-2522978 | Email: corplink786@gmail.com | ||
BANKERS | REGISTERED OFFICE | ||
Habib Bank Limited | 2-D-1, Gulberg III, Lahore | ||
Bank Al-Habib Limited | Tel: 042-35771066-71 | ||
MCB Bank Limited | Fax: 042-35756687 | ||
Meezan Bank Limited | Email: info@bfsml.com | ||
Bank Alfalah Limited | Website: www.bfsml.com | ||
Soneri Bank Limited | LEGAL ADVISOR | ||
Allied Bank Limited | |||
Askari Bank Limited | M/S Ahmed & Pansota | ||
HUMAN RESOURCES & | |||
Advocate and Legal Consutants | |||
REMUNERATION COMMITTEE | 20 - Sir Gangaram Mansions | ||
The Mall Lahore | |||
Mr. Farid-ud-Din Ahmad | Chairman | Tel: 042-37313549, 37313520 | |
Mr. Adnan Ahmed Khan | Member | Tel: 042-36672102 | |
Mr. Malik Manzoor Hussain Humayoon | Member |
2 BABA FARID SUGAR MILLS LIMITED
DIRECTORS' REVIEW
The Directors of your Company are pleased to present the Un-Audited Accounts of the Company for the Ist Quarter Ended December 31, 2021 in compliance with the section 237 of the Companies Act, 2017.
INDUSTRY OVERVIEW
During the period under review, cultivated area of sugarcane crop is expectedly higher and yield per acre being reported by the growers is also reportedly higher as compared to corresponding period of last year. The early start of crushing season can also affect the yield and recovery of cane. Despite of above facts we are expecting better sugar recoveries in the area as compared to last year due to extra ordinary efforts made by agri team to promote better varieties of sugar cane and good practices.
For current crushing season 2021-22, notified support price of sugarcane is Rs. 225/- per 40 kg in Punjab & KPK. However, sugarcane is being procured at considerably higher cost than notified support price.
Due to early start of crushing season from November 15, 2021 tough competition has been observed in cane procurement that resulted into price war like situation in the region. Average sugarcane purchase cost is higher as compared to last year.
PERFORMANCE OF THE COMPANY
As the crushing is in process and so far Company is able to crush 200,100.40 M. Tons sugarcane and produced 15,900.00 M. Tons white refined sugar at an average recovery of 8.36% during the first quarter ending December 31, 2021 as compared to corresponding period of last year sugarcane crushing of 170,860.00 M. Tons and production of 14,215.00 M. Tons white refined sugar at an average recovery of 8.65%.
Net sales were recorded at Rs. 545.633 million during the first quarter of current financial year as compared to Rs. 504.376 million against the corresponding period of last year.
The Company earned pretax loss of Rs. 24.426 million during the quarter under review as compared to pretax profit of Rs. 13.751 million in the corresponding period of last year. Decrease in profitability is attributed to increase in sugarcane procurement cost.
All out efforts are being made to increase the production and profitability of the Company through process efficiency, installing modern and latest technology, reducing production cost by close supervision, developing good quality cane by providing the latest improved seed varieties, fertilizer, pesticides etc. and facilitating the cane growers constantly, which ultimately will result in higher sugar recovery and also financial benefit to the cane growers.
RESEARCH AND DEVELOPMENT
Agricultural R&D is an integral part of the Company's policy which entails identification and multiplication of promising new sugarcane varieties and their subsequent commercial sowing through progressive growers with best agricultural practices. This not only increases per acre yield of sugar cane but also enhances growers earning and creates more enthusiasm for sowing sugarcane compared to competing crops. It also increases the sugarcane supply to the Company and boosts overall sugar recovery, directly improving the bottom line of the Company.
RELATIONSHIP WITH GROWERS
As usual growers' payment has remained our top priority being one of the main keys of our success and we are trying our level best to make growers' payment on priority basis. We regularly provide financial
First Quarterly Report 2021 | 3 | |
and technical support to our growers. Due to these policies and preferential treatment to growers, the Company enjoys excellent relationship with them.
FUTURE OUTLOOK AND GOING CONCERN ASSUMPTION
According to surveys, the sugarcane crop size in current crushing season 2021-22 is estimated to be approx. 10-15% higher than last year but keeping in view the low sucrose content in South & Centeral Punjab, we are expect the sugar production will expectedly be higher as compared to last year. In view of all this, it is expected that sugarcane prices would play a vital role in the determination of sugar prices. Even after the substantial increase in support prices of sugarcane by the Provincial Governments, the industry is procuring sugarcane at much higher prices as growers are not willing to supply sugarcane at notified support prices. This will result in increase in the production cost of the sugar, consequently sugar prices in the market may remain on the higher side. Government needs to take appropriate measures to ensure availability of sugarcane to sugar mills at support prices.
The increase in discount rate by the State Bank of Pakistan (SBP) by 275 bps has ultimately increased the KIBOR rate, that will result in increasing the financial cost of the Company. Any further increase in mark-up rates may adversely affect the profitability of the Company.
Sales tax evasion and undocumented sugar trade were two major challenges being faced by the sugar industry. These issues were the root causes of instability in the prices of sugarcane, sugar and hurdle in planning by the Government for availability of sugar in the country. To curb these issues on 11 November 2021, FBR has issued Sales Tax General Order No. 05 of 2021-22 with subject of Implementation of Track & Trace System. As per order, no sugar bags shall be allowed to be removed from production site or factory without affixation of Tax Stamps / Unique Identification Marking (UTMs) with effect from 11 November 2021, which are to be obtained / procured from FBR Licensed vendor only. FBR has achieved marvelous success in the implementation of Track & Trace System and results are quite satisfactory. This is a milestone achieved by FBR which will result in giving level playing fields to fully compliant sugar mills and substantial increase in the revenue of FBR. Now FBR should also find out practical ways out to document the sugar trade which is another uphill task.
CORPORATE GOVERNANCE
Best Corporate Practices
Directors are committed to good corporate governance and comply with the requirements of the Listed Companies (Code of Corporate Governance) Regulations, 2017 and the Rule Book of Pakistan Stock Exchange. The statement of compliance with the CCG is enclosed. The composition of the Board of Directors (the Board") is as follows:
The total number of Directors are seven as per following:
- Male: Five
- Female: Two
Category | Names |
Independent Director | Mr. Farid-ud-Din Ahmad |
Mr. Malik Manzoor Hussain Humayoon | |
Executive Directors | Mr. Adnan Ahmed Khan (CEO) |
Mr. Muhammad Shamim Khan | |
Non-Executive Director | Mrs. Qaiser Shamim Khan |
Mr. Nauman Ahmed Khan | |
Mrs. Sarah Hajra Khan | |
The Board has formed committees comprising of members given below:
4 BABA FARID SUGAR MILLS LIMITED
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Baba Farid Sugar Mills Ltd. published this content on 31 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 January 2022 04:50:08 UTC.