Baba Farid Sugar Mills : CONDENSED INTERIM FINANCIAL INFORMATION For the 1st Quarter Ended 31 December 2022 (Un-audited)

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 1st Quarter Ended 31 December 2022 (Un-audited)

QUARTERLY

REPORT

2022

CONTENTS

Company Information	2
Directors' Review	3
Condensed Interim Statement of Financial Position	8
Condensed Interim Statement of Profit or Loss	9
Condensed Interim Statement of Comprehensive Income	10
Condensed Interim Statement of Cash Flows	11
Condensed Interim Statement of Changes in Equity	12
Selected Notes to the Condensed Interim Financial Information	13

First Quarterly Report 2022

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: [phone]		SHARE REGISTRAR
Fax: [phone]
Email: [e-mail]		M/s Corplink (Pvt) Limited
MILLS
	Share Registrar, Wings Arcade,
		1-K Commercial Model Town, Lahore.
5 K.M. Faisalabad Road, Okara		Tel: [phone],
Tel: [phone]		Fax: [phone]
Fax: [phone]		Email: [e-mail]
BANKERS		REGISTERED OFFICE
Habib Bank Limited		2-D-1, Gulberg III, Lahore
Bank Al-Habib Limited		Tel: [phone]
MCB Bank Limited		Fax: [phone]
Meezan Bank Limited		Email: [e-mail]
Bank Alfalah Limited		Website: www.bfsml.com
Soneri Bank Limited		LEGAL ADVISOR
Allied Bank Limited
Askari Bank Limited
National Bank of Pakistan - Aitemad		M/S Ahmed & Pansota
HUMAN RESOURCES &		Advocate and Legal Consutants
	20 - Sir Gangaram Mansions
REMUNERATION COMMITTEE		The Mall Lahore
		Tel: [phone]
Mr. Farid-ud-Din Ahmad	Chairman	Tel: [phone]
Mr. Adnan Ahmed Khan	Member
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 31 December 2022 in compliance with the section 237 of the Companies Act, 2017.

INDUSTRY OVERVIEW

Sugarcane is among the largest crops of Pakistan. Sugar is second largest agro-based industry after textile in the country. Its production accounts for 3.7% in agriculture's value addition and 0.8% in GDP.

The crop size during current season is expected to remain more or less the same as was in last year. As per economic survey of Pakistan better sugarcane procurement price incentivized growers to dedicate more area to sugarcane and favorable weather conditions, better management and timely availability of quality inputs made the crop yield better. As a result of all the mentioned factors the sugar recovery is also improved considerably.

For current crushing season 2022-23, notified support price of sugarcane in Punjab was Rs. 300/- per 40 kg.

PERFORMANCE OF THE COMPANY

The Company was able to crush 186,319.230 M. Tons sugarcane and produced 17,077.500 M. Tons of white refined sugar at an average recovery of 9.530% during the Period ended 31 December 2022 as compared to 31 December 2021, sugarcane crushing of 200,100.397 M. Tons and production of 15,900.000 M. Tons white refined sugar at an average recovery of 8.359%.

Net sales were recorded at Rs. 688.298 million during the first quarter of current financial year as compared to Rs. 545.633 million during the corresponding period of last year.

The Company incurred pretax loss of Rs. 76.650 million during the quarter under review as compared to pretax loss of Rs. 24.426 million in the corresponding period of last year. The increase in loss is mainly because of high sugarcane procurement cost, lower sugar prices, higher markup rates and increased cost of doing business due to unprecedented higher inflationary pressure.

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.

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:

The total number of Directors are seven as per following:

• Male: Five
• Female: Two

First Quarterly Report 2022

3

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

ADEQUACY OF INTERNAL CONTROLS

The Directors are aware of their responsibility with respect to internal financial controls. Through discussions with management and Auditors (both internal and external), they confirm that adequate controls have been implemented by the Company.

FUTURE OUTLOOK

The Crushing season 2022-23 has started and is expected to be more challenging one for the sugar industry. The Government of Punjab has notified the sugarcane price at Rs. 300/- per 40 kg. The sugarcane situation in the procurement area of the Company has slightly improved due to higher acreage and also the Company is observing a good recovery as compared to last year.

The government must ensure the price of sugar is reflective of the price of sugarcane and other costs in line with prevailing inflation to create a conducive business environment for the industry as well as develop policies to promote agriculture by providing seeds to farmers those are better in yield and recovery.

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.

ACKNOWLEDGEMENT

The Directors wish to acknowledge the devotion of the employees and are appreciative of their dedication and commitment. They also extend heartfelt appreciation to the Company's suppliers, customers, and bankers for their continued confidence and support.

For and on behalf of the Board

Baba Farid Sugar Mills Limited

Muhammad Shamim Khan	Mrs. Qaiser Shamim Khan
Director	Chairperson
Lahore: 27 January 2023

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BABA FARID SUGAR MILLS LIMITED