Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698076296855.pdf (Guyana)
GUYANA SUGAR CORPORATION INC.
ANNUAL REPORT 2014 Table of Contents Financial Matters Agriculture Operation Environmental Matters Factory Operation Corporate Social Responsibilities Markets National Contributions Production figures Board of Directors Report of the Directors Report of the Auditor General Report of the Chartered Accountants Consolidated Statement of Financial Position Statement of Comprehensive Income Consolidated Statement of Changes In Equity Consolidated Statement of Cash Flows Notes to the Financial Statements A A B C D E E G H I 1 3 Financial Matters The decline in revenue is as a direct result of the decline in production and decline in world market prices for sugar.
The savings in administration and other costs are mainly due to two factors: ((i) Lower interest and finance charges due to a lower overdraft as compared to the business plan.

ii) A conscientious effort to control costs.

The large variance in Agriculture costs is due mainly to a standing cane adjustment from revaluing the canes in the ground at the beginning of the year to the end of the year.
The price for sugar is used in valuing the cane and due to the dramatic decrease in price from 2013 to 2014; this also resulted in a large standing cane adjustment.

Factory costs remained on par.

Employment cost amounted to over 50% of total costs.

This is largely a fixed cost.

Also, depreciation accounts for 10% of total costs, which is fixed.

The next significant category of costs is the purchase of materials (20%), which is also largely fixed.
These costs are difficult to reduce; therefore, there is need for our productivity to increase in order to reduce our cost per unit in order to be competitive.

Hence the drive for mechanization and other initiatives as part of our business plan to improve productivity.

In 2014, the industry continued to place emphasis on conversion.

This is in keeping with the business plan to alleviate the current labour shortage the industry is faced with.
A total of 3,076.3 hectares was converted in 2014, compared to 1,127 hectares which were converted in 2013.

This achievement in 2014 was made possible by the acquisition of ten (10) excavators and twelve (12) tractors, which was one of the EU indicators for the evaluating period July 2013 to June 2014.

The Corporation recorded a significant loss for the year of G$15.7 bln compared with a profit of G$5.7 bln for 2013.
Contributing to the loss for the year was a major increase in Cost of Sales and a sizable reduction of revenue.

Whilst there was a favourable Deferred Taxation in 2014, it was unable to stem the tide of the loss incurred at the Operational level.

Cash and Bank balance significantly declined from G$5.5 bln in 2013 to G$ 770m in 2014.

Agricultural Operations In 2014, GuySuCo budgeted to produce a total of 215,910 tonnes of sugar; this included an estimated farmer’s production of 24,156 tonnes.
The actual production realized by the corporation in 2014 totaled 216,357 tonnes, compared to 2013 when only 186,752 tonnes were produced.

This represents a 16% variance.

A The 29,632 tonnes increase in 2014 was due primarily to improved yields; tonnes cane per Hectare (TCH) moved from 53.5 in 2013 to 55.66 in 2014.

During the year, all estates with the exception of Skeldon, were able to take off all canes available to be harvested in each crop.
Skeldon, unfortunately, in the second crop had to close prematurely because of inclement weather resulting in 170.8 hectares of canes being taken over into the 1st crop of 2015.

East Demerara Estate made maximum use of the two Billet harvesters.

The purchasing of these two harvesters was one of the EU indicators (investment in mechanization) for the evaluating period July 2012 to June 2013, which was achieved.

This estate achieved its highest production in the last four (4) years.
This was due primarily to the Billet harvesters which contributed in a very large way to maintain constant cane supply to the factory from areas available to be harvested.

East Demerara Estate faced one of its biggest challenges over the last three (3) years prior to 2014 because of labour issues, which affected the crop and supplies of canes to the factory.

With the introduction of the Billet harvester this situation has been reversed.

Skeldon showed encouraging signs of improvement.


The production of 35,859 tonnes of sugar achieved in 2014 is the highest since the new factory was commissioned in 2009.

Previous years, major factory challenges resulted in large volumes of canes being carried over from one year into the next.

These carry over canes impacted significantly on the quality of canes delivered to the factory and was largely responsible for the poor recoveries experienced in the factory.
In 2015, very little (170 Hectares) carry over canes will be harvested at Skeldon.

This, coupled with extensive repair works carried out in the factory during the 2014 end of year maintenance period should realize better recoveries in 2015.

Environment The Corporation continues to take actions that will contribute towards good stewardship of the Environment.
These actions include, but not limited to sustainable Agriculture, Water Conservation, usage of Biological Herbicide and Weedicides for the field operations.

The Corporation spends a significant portion of its financial resources towards drainage and irrigations which have a direct impact on the country’s water management system.

These actions are done throughout the Coastal areas on a daily basis by the Corporation’s employees.

In 2014 a total of 567.8 Hectares of Flood Fallow lands was planted.
The Flood fallow planted areas reaped in 2014 2nd crop yielded better than the Plough and plant (non-flood fallow) areas.

As part of the Business plan the industry will continue to maximize this practice in the coming years.

B In 2014, Crop Protection continued to focus on integrated management technologies and the promotion of environmentally responsible approaches to pest and weed management.
Effective surveillance for potential pest, disease, weeds and nutrient problems will be emphasized in order for timely and effective response or investigation where an immediate solution is not available.

Standard required quantitative and qualitative monitoring activities were carried out for most major pest species on all estates across the Industry namely; Rodents, Diatraea, Castinomera, and Termites, some carried out weekly, monthly and/or on a quarterly routine, and some at immediate post-harvest.
There were no reports of major outbreaks or severe infestations of any major or minor pest species; however the usual seasonal upsurges at endemic locations/sections in cultivations on various estates were evident for the major pest.

Close monitoring of all major problem weeds continued throughout 2014.

The management of problem weeds, especially on Demerara Estates was affected by the weather.
Heavy seasonal rainfall continued for the crop, impacting negatively on the timing, method, efficacy and ultimately the cost of weed control.

The duration of control by residual herbicides was reduced, resulting in more frequent interception.

Rate Screening Comparison Herbicide Trials and Herbicide Evaluations continued for the period covered.

This is ongoing work and the department will continue to evaluate the efficacy of new formulations.
Reduced tillage to minimize excessive soil manipulation and loss and other cultural practices to sustain productivity, such as legume fallow as an alternative to flood fallow in fields developed for mechanized culture and alternatives to flood irrigation.
During the period under review, and also in keeping with the aim of increasing production and the exploration of possible means of reducing the dependence on the use of artificial fertilizers, experimental trials involving the application of bio-fertilizers were also established.

Factory Operations Improvement in factory efficiencies was a notable achievement in 2014.

The table below shows actual performance of the industry for the period 2013 – 2014.
C Table showing Industry performance for the period 2013 – 2014 Parameters 2013 Average Grinding Time/Week (hrs.)
92.86 Tonnes Cane Hour(t/hr) - Industry Average 122.65 Pol % Cane (%) Mill Extraction (%) Boiling House Recovery (%) Overall Recovery (%) Factory Time Efficiency (%) Cane Processed (t) Sugar Made (t) Molasses Made (t) Tonnes Cane/Tonnes Sugar (TC/TS) Molasses % Cane (% 9.55 92.06 84.34 77.60 87.84 2,461,080 186,752 98,129.10 13.17 3.72 2014 105.38 123.73 9.63 92.07 85.04 77.44 90.98 2,836,897 216,357 114,999.79 13.11 3.78 Factory reliability was significantly greater in 2014.
Similarly 15% increase in cane was crushed over the same period.

For Skeldon, there were marginal increases in hourly crushing rate and average weekly grinding hours achieved over the period.

However, with the replacement of the outboard punt dumper of the winch system, crushing rate will increase to 250 – 280 tch in 2015.

Works are continuing to improve the performance of this mill in all departments.
Corporate Social Responsibilities As part of the Corporation’s passion to contribute to the nation as a Corporate Citizen, it continues to give back to the communities in the areas that it operates therein.

The Guyana Sugar Corporation has been engaged in the ethical perspective of the Corporate Social responsibility for several decades.

It sees itself as a giver to the community that it operates in, since many of the persons that it employs are residents of the community.
These are some of the things that the Corporation continues to do for the communities wherein it operates:  Provides medical services for the extended family members of any employee in the community  Uses its Water tender to assist in the event that there is fire to any property for anyone in the community D  Makes the Community sport grounds available for anyone in the community so that they can practice whatever sport that will be seen fitted  Offer Bursary awards to children of the employees  Manage the irrigation and drainage across the coastal belt of the country.
Markets The Corporation continues to provide its products to several markets.

These markets include Local market, Caribbean, Regional, North America and European Market.

These markets have allowed the Corporation to reach its customers as it supplies both bulk and package sugar.

The Corporation is also able to supply Molasses to local and Regional Markets.

Molasses is a by product from the Sugar cane production and the sale of it provides some much needed income for the Corporation.
Total Revenue declined by G$6.1 bln in 2014, compared to 2013, which is equivalent to 21% reduction.

Table 1.

Revenue by Markets for 2014 Markets Europe North America Caribbean Guyana Other Markets Total Revenues (G$m) 14,425 1,356 3,281 4,021 77 23,160 National Contributions Guyana Sugar Corporation Inc. continues to make a sizeable contribution to the nation.

These are through the forms of Corporation Taxes, Pay As You Earned, Social Security and Pension.
The Sugar Corporation employs approximately 17,000 persons directly.

This level of employment directly affects about 80,000 persons.

Guyana Sugar Corporation In.

continues to be the single largest employer of the Cooperative Republic of Guyana.

E A total of 64.9 days tax free pay was awarded as Weekly Production Incentive, comprising 25.65 and 39.25 days for the 1st and 2nd crop respectively.

In addition, an Annual Production Incentive of 4.5 days’ pay was awarded i.e.
4.5 days’ pay to all qualified employees.

An increase of 4% was awarded in wages and salaries for the year 2014 at the bilateral level to unionized employees.
F Production figures Ten Year Review 2005 to 2014 Operation 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 HECTARES HARVESTED 41,890 42,422 39,757 44,262 43,556 36,510 45,411 43,616 40,676 45,302 TONNES CANE MILLED ('000) 3,005 2,975 3,099 2,767 2,764 2,762 3,196 2,710 2,461 2,837 YIELDS: ESTATE - TONNES CANE / HECTARE 65.43 64.48 71.97 57.71 57.50 66.32 62.58 55.31 53.55 55.66 TONNES CANE /TONNE SUGAR 12.20 11.46 11.55 12.16 11.67 12.51 13.51 12.43 13.18 13.11 TONNE SUGAR / HECTARE 5.36 5.63 6.23 4.75 4.93 5.30 4.63 4.45 4.06 4.25 PRODUCTION (TONNES) SUGAR MOLASSES HOME CONSUMPTION (TONNES): SUGAR MOLASSES EXPORT (TONNES): SUGAR MOLASSES SALES: DOMESTIC SUGAR ($M) 1,335 1,644 1,673 1,595 1,906 2,273 1,884 2,048 2,101 1,999 AVERAGEPRICE / TONNE($) 58,601 70,245 71,252 68,328 76,857 101,757 94,079 91,463 94,872 96,100 EXPORT SUGAR ($M) 21,324 25,509 27,101 23,777 24,398 18,332 23,954 26,211 23,240 17,312 AVERAGE PRICE / TONNE ($) 92,835 107,332 110,676 115,832 112,067 93,652 113,601 133,363 142,288 91,327 AVERAGE PRICE / TONNE (US$) 465 538 545 570 552 462 558 654 694
 443 MOLASSES ($M) 1,637 1,914 1,667 1,306 1,815 1,815 3,428 3,129 2,639 2,789 EMPLOYMENT COST 14,710 16,067 17,373 17,580 15,571 15,787 18,518 19,413 20,094 22,385 MATERIALS AND SERVICES 8,408 9,485 8,958 10,858 10,629 11,565 12,626 11,271 11,546 13,100 (LOSS) / PROFIT BEFORE TAX ($M) (1,188) 2,429 2,159 (6,210) (1,949) (5,136) (11,232) (1,863) (2,959) (22,335) (LOSS) / PROFIT BEFORE TAX AND LEVY (1,188) 2,429 2,159 (6,210) (1,949) (5,136) (11,232) (1,863) (2,959) (22,335) (LOSS) / PROFIT AFTER TAX($M)
 (LOSS) / PROFIT AFTER TAX BEFORE LEVY AVERAGE MID MARKET (1,866) 476 630 (4,089) (1,323) (7,387) (13,896) (1,246) 5,736 (15,730) (1,866) 476 630 (4,089) (1,323) (7,387) (13,896) (1,246) 5,736 (15,730) EXCHANGE RATE (G$/US$ ) 199.75 199.50 202.99 203.34 202.99 202.83 203.63 203.99 204.99 205.98 G Board of Directors Mr. Shaik Baksh Chairman Dr. R. Singh Chief Executive Officer Mr. Badrie Persaud Member Mr. Keith Burrowes Member Dr. D. Permaul Member Mrs. Geeta Singh-Knight Member H REPORT OF THE DIRECTORS For the year ended 31st December, 2014 The Directors of the Guyana Sugar Corporation Inc. present their report together with the audited financial statements for the year ended 31st December, 2014.
Principal Activity The principal activity of the Corporation is the growing of sugar cane and the manufacture and sale of sugar and molasses from that cane.

Results and Dividends The financial results of the Corporation are set out on pages 9-40.

In accordance with the policy of the Corporation for many years, no dividends are declared or payable.

Directors The names of the Directors are set out on page H. All the Directors are non-executive, except for the Chief Executive.
None of the Directors during the year had any material interest in any contract which is of significance in relation to the business of the Corporation.

Directors’ remuneration is set out in note 14.2.2 to the Financial Statements.

Corporate Governance The Board believes that its primary function is to generate sustainable wealth for the shareholder as the key stakeholder in the business.

The Guyana Sugar Corporation recognises the importance and is committed to high standards of corporate governance.
This report by the Directors covers the key elements regarding the application by the Corporation of the principles of corporate governance.

(a) The Board: The Board comprises of six non-executive Directors (including the Chairman) and one executive Director (the Chief Executive).

The Board considers that each Director is able to bring independent judgment to the Corporation's affairs in all matters.

The Board meets not less than ten times a year.


I It is responsible for the strategic direction of the Corporation and receives information about the progress of the Corporation and its financial position each month.

This information, together with papers required for each Board meeting, is circulated in a timely manner before each meeting.

The Board has established the Central Tender Committee which evaluates all tenders for the supply of materials and services above predetermined levels.
(b) Internal Control: The Board is responsible for the Corporation’s system of internal control and for reviewing its effectiveness which is designed to provide reasonable (but not absolute) assurance regarding the safeguarding of assets against unauthorised use, the maintenance of proper accounting records and the reliability of the financial information used within the Corporation.
The framework of the Corporation’s system of internal control includes: - an organisational structure with clearly defined lines of responsibility and delegation of authority; - documented policies, procedures, and authorisation limits for all transactions including capital expenditure; - a comprehensive system of financial reporting.

The Board approves the annual budget and actual results are reported against budget each month.

Any significant adverse variance is examined and remedial action taken.
Revised profit forecasts for the year are prepared on a quarterly basis; - an internal audit function The system of internal control is designed to manage rather than eliminate risk as no system of control can provide absolute protection against loss.
The Directors are of the opinion, based on information and explanations given by management and the internal auditors, and on comment by the independent auditors on the results of their audit, that the Corporation’s internal accounting controls are adequate and that the financial records may reasonably be relied upon for preparing the financial statements and for maintaining accountability for assets and liabilities.
Employees Staff development and training are provided at all levels and emphasis is placed on both technical and personal development.

GuySuCo is committed to equality of opportunity amongst its employees.

Recruitment, terms of service and career development are based solely on ability and performance.

J Pensions The Corporation’s senior staff Pension Scheme is established under an irrevocable trust.

The Pension Scheme Management Committee includes employee representatives.
The Scheme is managed by Professionals.

Both the Committee and the Managers are required to act at all times in accordance with the rules of the Scheme and to have regard to the best interests of the members of the Scheme.

The Management Committee controls the investment funds, which are managed by external fund managers.

GuySuCo is committed to ensuring that the Scheme is administered in accordance with the highest standards.
In addition to the senior staff pension scheme the Corporation pays an ex-gratia pension to those unionized workers who satisfy the qualification criteria for a pension.

This scheme is unfunded.

Material events after year-end There was no material event that is material to the financial affairs of the Corporation or the group occurring between the date of the Balance Sheet and the date of approval of the Financial Statements.

Auditors The Auditor General has audited the Financial Statements.
For the financial years 1995 to 1998, inclusive, this activity was sub-contracted to Deloitte and Touche; for the financial years 1999 to 2003 this activity was sub-contracted to Ram and McRae; for the financial years 2004 to 2010 this activity was subcontracted to TSD Lal & Co; for the financial years 2011 to 2015 Parmesar Chartered Accountants were the sub-contracted auditors.

By order of the Board Frederick Singh Company Secretary Registered Office Ogle Estate East Coast Demerara K