Habib Sugar Mills : Transmission of Half Yearly Report for the Six Months ended March 31,2024

Habib Sugar Mills Limited

Report and Condensed Interim

Financial Statements

for the Half Year ended

March 31, 2024

(Unaudited)

Contents

Company Information	2
Directors' Report	3
Independent Auditors' Review Report	5
Condensed Interim Statement of Financial Position	6
Condensed Interim Statement of Profit or Loss	7
Condensed Interim Statement of Comprehensive Income	8
Condensed Interim Statement of Changes in Equity	9
Condensed Interim Statement of Cash Flows	10
Notes to the Condensed Interim Financial Statements	11
	22

1

Company Information
Board of Directors	Asghar D. Habib	Chairman
	Murtaza Habib
	Hasnain Habib
	Farouq Habib Rahimtoola
	Sohail Hussain Haji
	Muhammad Salman Husain Chawala
	Tyaba Muslim Habib
	Khursheed A. Jamal	Chief Executive
Audit Committee	Farouq Habib Rahimtoola	Chairman
	Tyaba Muslim Habib	Member
	Sohail Hussain Haji	Member
Human Resource &	Tyaba Muslim Habib	Chairperson
Remuneration Committee	Hasnain Habib	Member
	Khursheed A. Jamal	Member
Chief Financial Officer	Amir Bashir Ahmed
Company Secretary	Imran Amin Virani
Registered Office	3rd Floor, Imperial Court,
	Dr. Ziauddin Ahmed Road,
	Karachi-75530
	Phones :	([phone] - 5 Lines
	Fax	:	([phone]
	www	: habibsugar.com
	E-mail : [e-mail]
Mills	Sugar & Distillery Division
	Nawabshah District Shaheed Benazirabad
	Phones :	([phone] - 5 Lines
	Fax	:	([phone]
	Textile Division
	D-140/B-1 Mangopir Road
	S.I.T.E. Karachi-75700
	Phones :	([phone], 32572119
	Fax	:	([phone]
Terminal	60/1-B Oil Installation Area
	Keamari Karachi-75620
	Phones :	([phone]
	Fax	:	([phone]
Bankers	Allied Bank Limited
	Bank AL Habib Limited
	Bank Al-Falah Limited
	First Women Bank Limited
	JS Bank Limited
	Habib Bank Limited
	Habib Metropolitan Bank Limited
	MCB Bank Limited
	Meezan Bank Limited
	National Bank of Pakistan
	United Bank Limited
Statutory Auditors	Grant Thornton Anjum Rahman
	Chartered Accountants
Cost Auditors	Reanda Haroon Zakaria & Co.
	Chartered Accountants
Share Registrar	THK Associates (Pvt.) Limited
	Plot No. C-32, Jami Commercial Street-2
	D.H.A. Phase VII, Karachi.
	UAN	:	([phone]
	Phone	:	([phone]
	Fax	:	([phone]
	E-mail	:	[e-mail]
2

Directors' Report

Dear Members - Assalam-o-Alekum

On behalf of the Board of Directors, we are pleased to present you the unaudited condensed interim financial statements duly reviewed by the auditors of the Company for the half year ended March 31, 2024. The Company has earned pre-tax profit of Rs. 1,583 million (2023: Rs. 1,009 million). The financial results of the Company for the half year are summarized below:

Financial Results
Half year ended	Half year ended	Variance
March 31, 2024	March 31, 2023
				(Rupees in Million)
Profit before taxation	1,583		1,009		574
Less: Taxation	(330)		(160)		(170)
Profit after taxation	1,253		849		404
Add: Realized gain/(loss) on sale of investment	58		(229)		287
Unappropriated profit brought forward	5		5		-0
Unappropriated profit carried forward	1,316		625		691
Earnings per share-Basic and diluted (Rs.)	8.35		5.66		2.69

Sugar Division

The crushing season 2023-24 commenced on November 15, 2023 and the plant operated upto March 3, 2024 for 110 days as against 89 days in the preceding season. Sugarcane crushed during the current season was 1,065,705 M. Tons with average sucrose recovery of 10.63 % and sugar production of 113,286 M. Tons as compared with sugarcane crushing of 844,841 M. Tons with average sucrose recovery of 10.96 % and sugar production of 92,595 M. Tons during the preceding season.

The Government of Sindh on August 16, 2023 issued a notification fixing the minimum sugarcane support price at Rs. 425 per 40 kgs for the crushing season 2023 - 24 as against Rs. 302 per 40 kgs for the crushing season 2022 - 2023. In addition, the sugar mills in Sindh are also required to pay quality premium at the rate of Re. 0.50 for every 0.1 percent sucrose recovery in excess of the bench mark of 8.7%.

The sugar division earned operating profit of Rs. 453 million (2023: Rs. 223 million). The operating profit for the current period is higher by Rs. 230 million as compared to the preceding period.

3

Distillery Division

The ethanol production during the half year ended March 31, 2024 was 13,150 M. Tons (2023: 15,923 M. Tons). The division earned operating profit of Rs. 442 million (2023: Rs. 765 million). The decrease in the profit of Rs. 323 million during the half year was mainly due to increased cost of production and decrease in selling prices.

Textile Division

The division earned profit of Rs. 16 million during the half year under review (2023: Rs. 12 million). The increase in profit was mainly attributable to better selling prices and increased quantum of sales.

Trading Division

Trading division earned operating profit of Rs. 67 million mainly on account of trading of sugar and molasses (2023: Rs. 4 million).

Buy-Back of Shares

The Board of directors in their meeting held on December 23, 2023 had recommended the scheme for Buy-Back of 15,000,000 ordinary shares of the Company, which was approved by the members in the Annual General Meeting held on January 24, 2024. The Company had completed the above purchase/Buy-Back of Shares on April 25, 2024. The required legal and corporate formalities after completion of the Buy-Back, are under process.

Acknowledgement

The Directors of the Company would like to thank all the staff, shareholders, financial institutions and other stakeholders of the Company for their continued support and cooperation.

On behalf of the Board of Directors

Khursheed A. Jamal	Murtaza Habib
Chief Executive	Director

Karachi: May 8, 2024

4

Grant Thornton Anjum

Rahman

1st & 3rd Floor, Modern Motors House, Beaumont Road, Karachi, Pakistan.

T [phone]

INDEPENDENT AUDITORS' REVIEW REPORT

TO THE MEMBERS OF HABIB SUGAR MILLS LIMITED

REPORT ON REVIEW OF CONDENSED INTERIM FINANCIAL STATEMENTS

Introduction

We have reviewed the accompanying condensed interim statement of financial position of Habib Sugar Mills Limited as at 31 March 2024 and the related condensed interim statement of profit or loss, condensed interim statement of other comprehensive income, condensed interim statement of changes in equity, and condensed interim statement of cash flows, and notes to the condensed interim financial statements for the half year then ended (here-in-after referred to as the "condensed interim financial statements"). Management is responsible for the preparation and presentation of these condensed interim financial statements in accordance with accounting and reporting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on these condensed interim financial statements based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of condensed interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial statements are not prepared, in all material respects, in accordance with accounting and reporting standards as applicable in Pakistan for interim financial reporting.

The engagement partner on the review resulting in this independent auditor's review report is Khurram Jameel.

Chartered Accountants

Place: Karachi

Date: 10 May 2024

UDIN: RR202410093Gc0nyeEDT

5

Condensed Interim Statement of Financial Position as at March 31, 2024 (Unaudited)

		Unaudited		Audited
Assets	Note	March 31,		Sept. 30,
	2024	2023
Non-Current Assets		(Rupees in thousands)
Property, plant and equipment	5	2,159,864	2,284,432
Right-of-use assets		3,618	7,237
Long-term investments	6	3,154,585	1,908,277
Long-term loans		19,269	17,529
Long-term deposits		3,972		3,972
Current Assets		5,341,308	4,221,447

Stores and spare parts
Stock-in-trade	7
Trade debts
Loans and advances	8
Trade deposits and short-term prepayments
Profit accrued
Other receivables
Short-term investments	9
Cash and bank balances	10

288,607

13,300,765

1,252,251

1,064,502

88,796

11,830

18,932

1,591,256

2,085,104

19,702,043

387,261

3,957,133

1,160,742

186,108

64,087

32,793

12,753

6,412,471

1,274,264

13,487,612

Total Assets		25,043,351
Equity and Liabilities
Share Capital and Reserves
Share Capital
Authorised
150,000,000 (September 30, 2023: 150,000,000)
Ordinary shares of Rs. 5 each		750,000
Issued, subscribed and paid-up capital
150,000,000 (September 30, 2023: 150,000,000)
Ordinary shares of Rs. 5 each		750,000
Reserves	11	12,020,396
Total Equity		12,770,396
Non-Current Liabilities

17,709,059

750,000

750,000

10,565,406

11,315,406

Deferred taxation	12
Gas Infrastructure Development Cess
Current Liabilities
Trade and other payables	13
Advance from customers	14
Short-term borrowings	15
Unclaimed dividends
Accrued mark-up
Taxation
Current portion of lease liability
Contingencies and Commitments	16
Total Equity and Liabilities

198,500

73,569

272,069

2,911,197

3,287,086

5,070,376

348,865

134,167

244,280

4,915

12,000,886

25,043,351

180,500

71,432

251,932

2,956,821

1,615,781

1,156,626

195,425

5,440

202,055

9,573

6,141,721

17,709,059

The annexed notes 1 to 27 form an integral part of these condensed interim financial statements.

6

Amir Bashir Ahmed	Khursheed A. Jamal	Murtaza Habib
Chief Financial Officer	Chief Executive	Director

Condensed Interim Statement of Profit or Loss for the half year ended March 31, 2024 (Unaudited)

	Note				Half year ended				Quarter ended
				March 31,			March 31,					March 31,	March 31,
			2024		2023			2024		2023
Segment operating results	17							(Rupees in thousands)
Net sales and services		9,671,824	7,340,802		4,983,758	4,079,398
Cost of sales		(8,345,021) (6,015,120)	(4,224,045)	(3,230,630)
Gross profit		1,326,803	1,325,682		759,713	848,768
Selling and distribution expenses
		(168,837)		(171,252)		(84,889)			(96,579)
Administrative expenses	18		(180,189)		(151,373)		(89,981)			(78,712)
Other operating expenses		(101,345)		(250,560)		(43,860)			(147,993)
Other income	19		759,477		385,803			279,191			245,971
		309,106	(187,382)	60,461	(77,313)
Operating profit		1,635,909	1,138,300		820,174	771,455
Finance cost - net	20	(52,800)	(129,740)	(102,501)	(117,224)
Profit before taxation		1,583,109	1,008,560		717,673	654,231
Taxation
- Current			(375,000)		(165,000)		(105,000)		(95,000)
- Deferred			45,000		5,000			45,000		5,000
			(330,000)		(160,000)		(60,000)		(90,000)
Profit after taxation
	1,253,109	848,560		657,673	564,231
Earnings per share - Basic and diluted Rs.	8.35	5.66		4.38	3.76

The annexed notes 1 to 27 form an integral part of these condensed interim financial statements.

Amir Bashir Ahmed	Khursheed A. Jamal	Murtaza Habib
Chief Financial Officer	Chief Executive	Director

7

Condensed Interim Statement of Comprehensive Income for the half year ended March 31, 2024 (Unaudited)

		Half year ended			Quarter ended
		March 31,		March 31,				March 31,	March 31,
		2024		2023			2024		2023
				(Rupees in thousands)
Profit after taxation	1,253,109	848,560		657,673		564,231
Other comprehensive income :

Items that will not be reclassified to the statement of profit or loss:

Unrealised gain / (loss) on re-measurement of equity
investments classified as fair value through other	1,291,449		(396,510)		119,946		(322,171)
comprehensive income (FVOCI) - net of tax
Total comprehensive income	2,544,558	452,050	777,619	242,060

The annexed notes 1 to 27 form an integral part of these condensed interim financial statements.

Amir Bashir Ahmed	Khursheed A. Jamal	Murtaza Habib
Chief Financial Officer	Chief Executive	Director

8

Condensed Interim Statement of Changes in Equity for the half year ended March 31, 2024 (Unaudited)

Issued,

Reserves

Total

Total

Share

Own Shares

General

Unappropriated

Unrealised

Subscribed

Premium

Purchase

Reserve

Profit

Gain / (Loss)

Reserves

Equity

and Paid-up

for

measurement

Capital

Cancellation

of FVOCI

Investment

Balance as on 01 October 2022 (Audited)	750,000	34,000
Cash dividend for 2022 @ 70%	-00		-00
Transfer to general reserve	-00		-00
Total comprehensive income for the	-00		-00
half year ended 31 March 2023
Realised loss on sale of investments - net	-00		-00
Balance as on 31 March 2023	750,000		34,000
Balance as on 01 October 2023 (Audited)	750,000	34,000
Cash dividend for 2023 @ 120%	-00		-00
Transfer to general reserve	-00		-00
Total comprehensive income for the	-00		-00
half year ended 31 March 2024
Realised gain on sale of investments - net	-00		-00
Own shares purchased for cancellation (Note 11.1)	-00		-00
Balance as on 31 March 2024	750,000		34,000

-00	6,408,500	1,340,185	987,317	8,770,002	9,520,002
-00		-00	(525,000 )		-00	(525,000)	(525,000)
-00	810,000	(810,000 )		-00		-00		-00
-00		-00	848,560	(396,510)	452,050	452,050
-00		-00	(229,108 )	229,108		-00		-00
-00		7,218,500		624,637		819,915		8,697,052		9,447,052
-00	7,218,500	2,314,540	998,366	10,565,406	11,315,406
-00		-00	(900,000 )		-00	(900,000)	(900,000)
-00	1,410,000	(1,410,000 )		-00		-00		-00
-00		-00	1,253,109	1,291,449	2,544,558	2,544,558
-00		-00	58,395	(58,395)		-00		-00
(189,568)		-00		-00		-00		(189,568)		(189,568)
(189,568)		8,628,500		1,316,044		2,231,420	12,020,396	12,770,396

The annexed notes 1 to 27 form an integral part of these condensed interim financial statements.

9

Amir Bashir Ahmed	Khursheed A. Jamal	Murtaza Habib
Chief Financial Officer	Chief Executive	Director