BABA FARID | https://bfsml.com |
S U G A R M I L L S L I M I T E D
CONDENSED INTERIM FINANCIAL INFORMATION For the 3rd Quarter Ended 30 June 2023 (Un-audited)
3RD QUARTERLY
REPORT
2023
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 |
NINE MONTH Report 2023
1
CORPORATE 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 |
HUMAN RESOURCES & | MILLS | |
REMUNERATION COMMITTEE | 5 K.M. Faisalabad Road, Okara | |
Mr. Farid-ud-Din Ahmad | Chairman | Tel: 044-2714418-21 |
Mr. Adnan Ahmed Khan | Member | Fax: 044-2522978 |
Mr. Malik Manzoor Hussain Humayoon | Member | BANKERS |
AUDIT COMMITTEE | ||
Habib Bank Limited | ||
Mr. Farid-ud-Din Ahmad | Chairman | Bank Al-Habib Limited |
Mrs. Sarah Hajra Khan | Member | MCB Bank Limited |
Mr. Malik Manzoor Hussain Humayoon | Member | Meezan Bank Limited |
NOMINATION COMMITTEE | Bank Alfalah Limited | |
Soneri Bank Limited | ||
Allied Bank Limited | ||
Mr. Malik Manzoor Hussain Humayoon | Chairman | Askari Bank Limited |
Mr. Farid-ud-Din Ahmad | Member | National Bank of Pakistan-Aitemad |
RISK MANAGEMENT COMMITTEE | MCB Islamic Bank Limited | |
SHARE REGISTRAR | ||
Mr. Malik Manzoor Hussain Humayoon | Chairman | |
Mr. Farid-ud-Din Ahmad | Member | M/s Corplink (Pvt) Limited |
CHIEF FINANCIAL OFFICER | Share Registrar, Wings Arcade, | |
1-K Commercial Model Town, Lahore. | ||
Tel: 042-35916714, | ||
Mr. Wasif Mahmood | Fax: 042-35869037 | |
COMPANY SECRETARY | Email: corplink786@gmail.com | |
REGISTERED OFFICE | ||
Mr. Muhammad Imran | ||
2-D-1, Gulberg III, Lahore | ||
AUDITORS | ||
Tel: 042-35771066-71 | ||
Fax: 042-35756687 | ||
BDO Ebrahim & Co. | Email: info@bfsml.com | |
Chartered Accountants | Website: www.bfsml.com | |
Office # 4, 6th Floor, | LEGAL ADVISOR | |
Askari Corporate Tower, 75/76 D-1, | ||
Main Bolevord,Gulberg III, Lahore. | ||
Tel: 042-35875709-10 | M/S Ahmed & Pansota | |
Fax: 042-35717351 | Advocate and Legal Consutants | |
Email: info@bdo.com.pk | 20 - Sir Gangaram Mansions | |
The Mall Lahore | ||
Tel: 042-37313549, 37313520 | ||
Tel: 042-36672102 |
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 Nine Month Ended 30 June 2023 in compliance with the section 237 of the Companies Act, 2017.
INDUSTRY OVERVIEW
During the period under review, crop volume was lesser than last year partially due to flood and partially due to comparatively low yield per acre. However, better sugar recoveries & increase in the area under cultivation mitigated to some extent the negative impacts of low yield per acre.
For current crushing season 2022-23, notified support price of sugarcane was Rs. 300/- per 40 kg in Punjab
- KPK and Rs. 302/- per 40 kg in the province of Sindh as compared to Rs. 225 & 250 corresponding period in Punjab & Sind respectively. Crushing started on 25th November 2022. The 33% increase in support price of sugarcane ultimately resulted in increase in the production cost of the sugar.
PERFORMANCE OF THE COMPANY
The Company was able to crush 455,913.605 M. Tons sugarcane and produced 45,338.900 M. Tons of white refined sugar at an average recovery of 9.956% during the Period ended 30 June 2023 as compared to 30 June 2022, sugarcane crushing of 604,762.396 M. Tons and the production of 54,026.500 M. Tons white refined sugar at an average recovery of 8.936%.
Net sales were recorded at Rs. 2,946.171 million during the period under review as compared to Rs. 2865.658 million during the corresponding period of last year.
The Company incurred pretax loss of Rs. 34.782 million during the period under review as compared to pretax loss of Rs. 189.285 million in the corresponding period of last year. The decrease in loss is mainly because of better sugar rates and export of sugar.
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 and technical support to our growers. Due to these policies and preferential treatment to growers, the Company enjoys excellent relationship with them.
FUTURE OUTLOOK
Year 2023 is much more challenging for business. The year inherited political and economic uncertainty and during the year political chaos, economic distress, sky rocket inflation, unprecedented interest rates, massive rupee devaluation and global economic recession continued this marathon. Importing difficulties are hampering the pan-country industrial daily operations.
NINE MONTH Report 2023
3
Cane crushing in current season already completed. Sugar production in the country was around 6.70 million tons as compared to last year 7.10 million tons. Due to carryover sugar stocks of about 1.00 million tons and compulsion of cane payment to growers within 15 days kept sugar prices under tremendous pressure throughout the first half of the year. Increased production cost partially due to 33% higher cane cost, massive devaluation of Pak Rupee and substantial increase in KIBOR rate ultimately resulted in higher conversion cost.
Nevertheless, option of sugar export not only important for sugar industry but also for country for earning foreign exchange, the Federal Government, allowed only 250,000 tons with the condition to complete the sugar export cycle within 60 days. However, sugar prices in international market dropped from US$ 700 to US$ 500-530 per ton by the time export was allowed.
According to recent surveys the sugarcane crop size of next crushing season is expected to be slightly lower in Punjab than what was in last year due to opportunity of better prices in alternative crops whereas in Sind around 20% lesser crop is expected due to lesser sowing owing to flood. Overall sugar production of next year will is expected to be slightly lower as compared to last year.
State Bank of Pakistan (SBP) has increased policy rate by 7.40% since September 2022 which has jacked up the mark up rates and has resultantly increased borrowing cost substantially and there are indications that Govt might further increase this policy rate owing to IMF conditions and that will adversely affect the profitability. Inflationary pressure and restriction on import of machinery spares may further increase cost of doing business.
Govt strategy on controlling sugar prices, without considering inflationary pressure on prices of fertilizers, pesticides, sowing/harvesting cost etc. is discouraging sugar cane growers. The growers are switching from sugarcane crop to other crops and resultantly there may be shortage in sugar production in the country in coming years and the sugar industry, that is presently capable of export will be converted into import category industry like previously it was.
Going forward the Company is expected to perform better. Though the impact of higher sugarcane prices, higher interest rates and inflationary pressure may subdue the profitability while sugar prices to determine the extent of profitability. It is expected that Company will improve further in its operations and this is essentially due to better management and commitment by professional management and its team. These ingredients will hopefully revive the Company on overall basis.
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 composition of the Board of Directors (the Board") is as follows:
1. 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 | |
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BABA FARID SUGAR MILLS LIMITED
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Baba Farid Sugar Mills Ltd. published this content on 27 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 July 2023 10:11:33 UTC.