FINANCIAL STATEMENTS
(REVIEWED)
FOR THE HALF YEAR ENDED
MARCH 31, 2023
FARAN SUGAR MILLS LIMITED | HALF YEAR REPORT |
CORPORATE
INFORMATION
Date of Incorporation
November 3, 1981
Date of Commencement of Business
November 25, 1981
Board of Directors | |
Muhammad Omar Amin Bawany | Chairman |
Ahmed Ali Bawany | Chief Executive |
Hamza Omar Bawany | |
Bilal Omar Bawany | |
Mohammad Altamash Bawany | |
Ahmed Ghulam Hussain | |
Irfan Zakaria Bawany | |
Khurram Aftab | NIT |
Tasneem Yusuf | |
Audit Committee | |
Ahmed Ghulam Hussain | Chairman |
Muhammad Omar Amin Bawany | Member |
Irfan Zakaria Bawany | Member |
Human Resource & Remuneration Committee | |
Ahmed Ghulam Hussain | Chairman |
Muhammad Omar Amin Bawany | Member |
Ahmed Ali Bawany | Member |
Auditors
Rahman Serfaraz Rahim Iqbal Rafiq
Chartered Accountants
Chief Financial officer & Company Secretary
Muhammad Ayub
Legal Advisor
Ghulam Rasool Korai
Bankers (Islamic Banking Division)
Bank AL-Habib Ltd.
AL-Baraka Islamic Bank Ltd.
Bank AL-Falah Ltd.
Dubai Islamic Bank Ltd.
MCB Islamic Bank Ltd.
Habib Metropolitan Bank Ltd.
Meezan Bank Ltd.
United Bank Ltd.
Habib Bank Ltd.
Askari Bank Ltd.
Faysal Bank Ltd.
Bank Islami Ltd.
Share Registrar
C&K Management Associates (PVT.) Ltd. 404,
Trade Tower, Abdullah Haroon Road, Near
Metropole Hotel, Karachi.
Tel: (92-21) 35687639, 35685930
Registered Office
43-1-E (B), P.E.C.H.S. Block 6, off Razi Road, Karachi Phone: (92-21)34322851-54 UAN: 111-229-269
Fax: (92-21) 32 42 10 10
Mills
Shaikh Bhirkio,
Distt. Tando M. Khan.
E-mail& Websiteinfo@faran.com.pk www.faran.com.pk
Stock Exchange Symbol
FRSM
Registration Number
Company Registration Number - K-161/6698
National Tax Number - 0710379-4
Sales Tax Number - 01-01-2303-005-82
FARAN SUGAR MILLS LIMITED | HALF YEAR REPORT |
CHIEF EXECUTIVE REVIEW
FOR THE PERIOD ENDED MARCH 31, 2023
Dear Shareholders,
By the grace of Almighty Allah, on behalf of the Board of Directors, I present a brief review of the performance of your Company for the Half year ended March 31, 2023, which have been reviewed by the External Auditors.
Financial results for the Half year are summarized as follows:
Mar-2023 | Mar-2022 | |||||
Gross sales | Rs. '000 | Rs. '000 | ||||
4,300,129 | 4,317,510 | |||||
Profit / (Loss) before share of Associates & taxation | (231,539) | 288,253 | ||||
Share of profit from Associate-net | 768,828 | 103,408 | ||||
Profit before taxation | 537,290 | 391,661 | ||||
Taxation | (146,224) | (143,052) | ||||
Profit after Taxation | 391,065 | 248,609 | ||||
Earnings per Share Rs. | 15.64 | 9.94 |
Gross sale of sugar declined by 12.16% % mainly due to low sales volume as well as decrease in selling price of refined sugar, however, selling price of molasses significantly improved, consequently overall turnover was almost at same level as compared to the same corresponding period of last year. Margin on sugar sale shrank due to higher cost of manufacturing and lower sales price. For season 2022-23, the Sindh government fixed minimum support price for sugarcane at Rs. 302 per maund - Rs. 52 jump from the previous season, but average actual rate paid around Rs. 335 per manud due to constrain supply of cane. Further, rising of minimum labour wages and hyperinflation and the exorbitant rise in the oil prices pushed up the chemicals, spare parts of the machinery and the other input cost as well as staff cost, resulting in jacking up the cost of production of refined sugar. However, the price of sugar has increased much less in comparison to food inflation in the country which has gone up by 47 percent in the last one year.
Other income was supported from the sale proceeds of divestment of UniFood shares amounting to Rs. 188.38 million. Finance cost shot up to 381.44 million from Rs. 152.18 million, increased by 151% due to steep rise in KIBOR rate, huge financing obtained for timely growers' payments & for cost saving projects and sluggish sale volume that eroded our profitability. Huge fund is required for timely payment to growers as payments are made in 3-4 months while sugar is sold all year around due to its monthly distribution.
However, the company's bottom line highly benefited from the share of profit from Unicol Limited, a joint venture associated company that was up by almost 4.5 times during the first half of the reporting year. The distillery reported exceptional profit of Rs. 2.305 billion, out of which our shares of profit of Rs. 768.6 million that has been reflected in shares of profit from equity accounted investees-net.
Operational Performance:
As per Track and Trace system of FBR , around 6.657 million tons sugar produced in the country during the season 2022-23 and carry over stock of 0.99 million tons was in the beginning of crushing season 2023-23, cumulative available sugar for the country was 7.647 million tons for the year 2022-23. By the grace of Almighty Allah, our mills performance was satisfactory in terms of cane crushing and sugar production.
The comparative summarized operating result of your mills for complete season is as follows:
FARAN SUGAR MILLS LIMITED | HALF YEAR REPORT | ||
Season 2022-23 | Season 2021-22 | ||
Season commenced | Date | November 28, 2022 | November 19, 2021 |
Season end | Date | February 27, 2023 | March 27, 2022 |
Duration of Operation | Days | 92 | 129 |
Sugar-cane Crushed | Metric tons | 764,606 | 845,437 |
Sugar Production | Metric tons | 79,427 | 92,862 |
Recovery | % | 10.387 | 10.984 |
Minimum Support Price-Sindh Zone | Per 40 kg | 302 | 250 |
The sugar industry of Pakistan had been demanding permission for the export of surplus sugar since March 2022 due to huge production in season 2021-22. It was estimated a surplus sugar stock of 1.2 million metric tons and the industry asked the permission of exporting at least one million tons of surplus sugar. However, the government inordinately delayed the decision. If the government would have timely allowed export of one million tons of sugar it would have ultimately given a positive message to farmers who would have timely increased plantation and invested more in their fields to increase yield.
In December 2022, the government finally gave permission to export 250,000 metric tons of sugar, allocating 61 percent of sugar export quota to Punjab (152,500 tons), 32 percent to Sindh (80,000 tons) and 7 percent to KP (17,500 tons). After fulfilling all governmental prerequisites, the sugar industry has exported 172,180 metric tons of sugar till March 2023 earning approximately US$ 85 million.
The continually increasing international sugar price meant that sugar domestically in Pakistan was priced at half of prices across our border in Afghanistan. PSMA had been continually stressed the need to control our porous borders to Afghanistan or otherwise the huge arbitrage would make it lucrative to smuggle this commodity as well along with what had been seen happening in urea and wheat previously. PSMA again sensitized the government that the smugglers mafia had been taken benefit of higher sugar prices in the international market and smuggle sugar out of the country.
If the government had given due consideration to the apprehensions and demands of the sugar industry then its earnings of foreign exchange would have been added to the national exchequer instead of landing into the pockets of smugglers mafia. Sadly the industry couldn't export the surplus and the country couldn't benefit from this due to the huge smuggling.
Domestic price were very depressed during the crushing season 2022-23. However, as there is continuous improvement in domestic selling price of sugar, as well as anticipation of historical ever- highest profit in Unicol, we expect, Insha Allah, the bottom line to show healthy growth on year-to-year basis
It might also be reiterated that the sugar industry of Pakistan set up several discounted sugar stalls much below its cost of production in different cities of the country during the holy month of Ramazan. This step of the sugar industry was also acknowledged by government circles
Unicol Limited has entered into an agreement to acquire the entire assets of Popular Sugar Mills Limited. This investment is intended to diversify the revenue stream of Unicol Limited as well as entrant to new geographical region and thus add to its potential for future profitability, benefiting its ultimate shareholders.
May Allah bestow the strength on us to continue our success, AMEEN!
_______________ | ______________________ |
Ahmed Ali Bawany | Muhammad Omar Bawany |
Chief Executive | Director |
Karachi: | |
May 26, 2023 | |
FARAN SUGAR MILLS LIMITED | HALF YEAR REPORT |
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Faran Sugar Mills Ltd. published this content on 30 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 May 2023 10:23:06 UTC.