Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698075387222.pdf (Guyana)
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 •,.° " 4.1; • , DEM ERA • c From the very land that gate suga world the name - "Demerara" coin grade quality of cane sugar - Den Lnioy the "real thing" from the ori, the lush green fields of Guyana whe has been harvested since the mid Quality comes down to stringent golden crystal from every hat manufac lured by the Guyana Suga The result is here for you to enjoy.
unique sugar flavour is needed - 1) is the ingredient that will always .1.

III (; l (.„,,,,, li•i••: -1 St'(;AR -111 • cni.,• n Flag & Crest The GUYSUCO flag is green and gol The green on the flag represents agricultural lands of Guyana gold symbolises sugar and ration's involvement in tivation d rese h in sugar rpora gears, a4fia heel, the sugar c The ge machin rporation's relive effort of the Industry which lodes every category of worker.
machete symbolises the r needed in contents Mission Statement 3 Corporate Information 3 H ighlights 4 Board of Directors 5 Chairman's Statement 6 Guysuco & the Environment 10 Report of the Directors 11 Report of the Auditors 13 Report of the Auditor General 14 Consolidated Balance Sheet 15 order to build the try's economy 16 Consolidated Profit & Loss Account while the wheel is industrial Consolidated Cash Flow Statement 19 efficiency and The stalk and cane arrow sugar and represent flunu,gh breeding new varieties of cane.
Notes to the Consolidated Financial Statements so so Year Review 34 mission statement corporate information go be a world class sugar stry producing high quality ed-value by- cts, while ensuring stomer satisfaction Board of Directors Vickram Oditt, A.A. Chairman Brian Webb Chief Executive Dindyal Permaut, Chairman, Cential Bar $yzeorxqii.

uation- in order to the economic and social development of Guyana.
AUDITORS: The 2002 Accounts were audited bythe Auditor General in accordance with the provisions of the Financial Administration and Audit (Amendment) Act, 1993.

COMPANY SECRETARY A.

De Souza GUYANA SUGAR CORPORATION INC. Ogle Estate, East Coast Demerara, Guyana.

Telephone: (592) 222-6030 Facsimile: (592) 222-6048 E-mail: michaelk@guysuco.com This report can also be viewed on the Corporation's website www.guysuco.corn 3 highlights rl Record production 331,052 is - highest production since GuySuCo formed.
New production records at Blairmont, Wales, Uitvlugt and Skeldon.

II All estates exceeded 2002 AIP cane yield targets.

Enmore plant and 1st ratoon yield over 100 tonnes cane per hectare.

Over 60,000 tonnes sold into the Caribbean, an increase of 35% on 2001.

Presence established in the Haitian market.

▪ GuySuCo has 75% of the brown sugar market in Trinidad.

Ni Organic sugar in conversion produced at Uitvlugt.
El Portuguese refiners acknowledge our sugar as one of the best in the ACP On schedule for construction of the new factory at Skeldon.

NI Land levelling and other infrastructural work on the factory site commenced.

mi Operating profit of $ 800 million in 2002 before tax, but ... nI IAS 19 (unfunded pension liability) charge of $1.13 billion.

O1 $ 10.8 billion of reserves capitalised as stated capital.

NI Local Area Networks established at each location.
NI Virtual private network extended to estate houses.

4 board of directors Vickram Odin.

A.A. Chau/run Brian Webb Chief Executive Hubert Rodney Dindyal Permaul Barry Newton 461111111111011101111 -... Ronald Alli Donald Ramotar Rajendra Singh chairman's statement As a result of the increased production.

sugar workers were rewarded with 23.5 days of annual production incentive for their efforts.

A further 173 days tax-free pay was awarded as weekly production incentive.
compared with 112 days tax-free pay in 2001 The Corporation made an operating profit of $800 million (US$ 4.2 million) in 2002 before tax.

This operating profit was a considerable improvement over the loss in 2001 and was recorded despite a low value of the Euro for the first ten months of the year, and was achieved on the back of the record sugar production.
For the first time, the Corporation was required to make adjustments to its financial statements based on the International Accounting Standard (IAS) 19.

The Standard requires the Corporation to measure the financial effects of the un-funded pension scheme for junior staff.

The IAS 19 adjustment was $1.13 billion (US$ 5.9 million).

The final result after finance costs and a tax credit of $60 million (US$ 0.3 million) was a loss of $310 million (US$ 1.6 million).
I extend my congratulations to every member of the GuySuCo team for their individual and collective efforts in 2002 that resulted in the achievements recorded.

Sagan proclacrust at 331,052 SKife4 Iva le higher emet 1976 Introduction The performance of the sugar industry in 2002 was most encouraging and commendable.

Sugar production at 331,052 tonnes was the highest production since 1976, the year of nationalization, when 332,437 tonnes were produced.
Production exceeded budget by over 8% and was well above the Agricultural Improvement Programme (AIP) target of 312,910 tonnes The year also recorded new field and factory production records at three of our eight estates, Blairmont, Wales and Uitvlugt, while Skeldon recorded a new field production record.

Marketing A total of 306, 918 tonnes of sugar was marketed this year.

Export sales increased from 251,798 tonnes in 2001 to 282,425 tonnes in 2002. an increase of 12%.
Substantial growth in the Caricom market was recorded.

We sold 60,313 tonnes into the region.

an increase of 35% over 2001 sales of 44.681 tonnes.

For the first time the Corporation achieved a major private sector sale in Trinidad and Tobago.

We also established a presence in the Haitian market and we hope to continue to supply this market in 2003.

By the yearend the final touches were completed for the new "Demerara Gold" packaged sugar, as featured in this year's report.
This is our first real effort to regain association of the "Demerara Sugar" name with Guyana, its original source, and it will include promotion, advertising and trademarking activities.

Sugar storage is now a problem, particularly in the first crop, with larger volumes of sugar and reduced SPS quota.
In the medium term therefore, and until the new factory at Skeldon is completed, sales into markets outside the region will have to continue while regional markets are being further expanded and / or developed.

6 Developments in the markets of our major trading partners.

There is immediate concern in the challenge posed to the EU sugar regime by Brazil and Australia.

Brazil and Australia are challenging the EU's guaranteed intervention price for domestic sugar and its export subsidies.
Average selling price per tonne sugar -1993 - 2002 chairman's statement Annual Report 2002 Initiative (CBI) Sugar Group to ensure that our US quotas are maintained.

Production All estates exceeded the AIP 2002 cane yield targets, Enmore being particularly notable with plant and first ratoon yield both over 100 tonnes cane per hectare.

However land preparation and planting were below targets owing to the above average long term mean rainfall experienced in March, April and May.
The industry achieved 87% of the budgeted replanting programming and 90% of the AIP 2002 replanting projection.

The wet conditions reduced the opportunity days for land preparation and as a result less land was available for replanting and flood fallow.

Skeldon was affected by strikes at a time when conditions were ideal for land preparation.

East Demerara Estate in particular suffered major problems due to civil unrest.
$650 Sn =3 $600 12 $550 5, $500 a $450 $400 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Sugar Production -1993 - 2002 They contend that these measures are inconsistent with the EU's WTO commitments and result in depressed world market prices and less favourable treatment for imported sugar.

Guyana has been very closely involved in the negotiations.

As a member of the ACP group and with the third highest quota, the challenge threatens the security of access to the EU market.
The ACP has been lobbying against the challenge and arguing that the matter should be addressed in the context of the WTO negotiations in agriculture, which are due to be concluded in 2005.
THOUSANDS 330 z 315 p300 285 270 255 240 dinsitioni\/\/ 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 • We are still continuing our negotiations with the EU on the "Everything But Arms" initiative, which gave Least Developed Countries market access to the EU at the expense of existing ACP SPS suppliers such as Guyana.

This was grossly unfair in that the initiative did not create new access into Europe but instead took access away from other developing countries.
In addition to the WTO challenge and EBA concerns, we are well aware that adherence to commitments on reductions in subsidies in the WTO agricultural negotiations and internal EU reforms both in the Sugar Regime and the Common Agricultural Policy will place downward pressures on prices.

Guyana, as the main regional supplier to the EU market.

must take the lead in the Region's involvement in these negotiations.
It is also essential that we work assiduously with other Caricom sugar producing countries in coordinating and ensuring that there is no regional departure from the Sugar Protocol between now and 2008.

The objective will be to ensure that we maintain at least the current level of regional allocation in the event that the new Economic Partnership Agreements (EPAs) being negotiated between the ACP and the EU are regionalized.
We also face difficulties with access to the USA market arising from Mexico's increased access under the NAFTA.

Under this Agreement Mexico will be allowed full duty free access for their surplus sugar production commencing in 2008.

Guyana will have to work closely with the Caribbean Business A significant number of new tractors and rotary ditchers were introduced during 2002.

The benefits of the new equipment were clearly reflected in the availability figures.
621 tonnes of organic sugar in conversion were successfully produced at Uitvlugt.

The 2003 crop will be certified as organic and attract a premium.

Incentive farming, whereby responsibility for a certain area of land is delegated to a group of workers, now has been extended to over 1,250 hectares throughout the industry.

This new concept offers promise in agricultural terms.
7 445t1c-c' GUYANA SUGAR CORPORATION INC. chairman's statement Cost of production The overall cost of production for the industry in 2002 was USC18.2/Ib which was lower than the budget of US(18.8/1b.

We still have a long way to go to reach our USO11/Ib target.
However, we have recently concluded a Benchmarking and Zero-based Budgeting exercise for agriculture, which shows that with the necessary productivity improvements, equipment acquisition and the elimination of unnecessary customs and practices, the medium term target of USC11/Ib is entirely achievable.

Factories Further improvements were made in sugar quality.

Most factories are now producing sugar at 98.5 pal.

The Portuguese refiners have acknowledged our sugar as among the best in the ACP.
Tate & Lyle have once again commended us on our improvement.

For the fourth year in succession mill extraction exceeded 92%.

A good factory time efficiency of 92.86% was achieved but there is room for further improvement in reducing lost time due to out of cane and strikes.

A total of 208 strikes were recorded in 2002, the lowest in ten years.

However the participation rate was higher than in the past two years, therefore mandays lost increased.
Materials Management department achieved a 16% reduction in inventory level at the Central Stores.

A bonded warehouse was established at Coldingen.

Estate fire tenders responded to over fifty external incidents during the year.

Staffing Thirty-five senior staff and fifteen middle-level staff resigned during the year.

Over 76,000 mandays were lost due to strikes, representing S137M (US$ 0.7 million) in wages.

Total mandays lost for the year were 122,871. not including uncertified sick days.
The days lost are equivalent to each person employed being absent from work for seven days.

The factories lost a total of five weeks owing to out of cane and strikes.

Strikes affecting the factories amounted to 2,918 hours, which was the highest for the last ten years.

Wage negotiations with both unions broke down and the Minister of Labour decreed compulsory arbitration.
Employment Costs - 1993 - 2002 16,000 14,000 12,000 10,000 c s,000 3 6,000 4,000 2,000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Appreoticen of the Instrumentation Section of the GuySuCo Training Centre work on UPS's ender the supervision of an instrectot In partnership with the Unions - GeySirCo and Union officials meet to discos the state of the industry prior to weges negotiations.

Albion and Rose Hall reduced the burning to grinding interval.
Substantial improvement is possible in Demerara and there are potential significant gains for the industry in this area.

Administration The main achievement of the Information Systems Department during the year was the roll out of Local Area Networks at each estate.

Our virtual private network was also extended, with many managers from the centre and at the estates being able to dial in to the Corporation's network and have access to the worldwide web and Internet from their houses.
Campus LANS using wireless bridges were installed at Rose Hall and Albion and at the Albion community centre.

Criminal activity on the East Coast affected the department's ability to promptly attend to reported faults.

Some of the craftsmen and women after completing training at the CuySuCo Training Centre ore equipped to make positive contributions in the engineering field.
8 chairman's statement Annual Report 2002 Skeldon Sugar Modernization Project We are proceeding on schedule with the arrangements for the construction of the new factory at Skeldon.

Work commenced with land leveling and other infrastructural work on the factory site.

Tenders have been received for the equipment supply and construction contracts and it appears that the budget figures for these components can be achieved.

We expect to award contracts for the equipment supply and construction in mid- 2003.
Construction should be completed by the second crop of 2005.

Significant progress has been made on the development of estate cane areas, including the trial use of a cane harvester.

Progress has also been made in arrangements with cane farmers who will provide thirty per cent of the cane forthe new factory, and work is about to start on the infrastructure necessary for access to, and irrigation and drainage of, the farmers cane area.
Details of the first tranche of land being sold on behalf of the Corporation by the Government Privatisation Unit can be seen on the Corporation's Website.

Aortal view of hal preparation at do Wes Sops llobrolootioo Prop& Conclusion GuySuCo had a very satisfactory year in terms of the record production and exceeding the AIP cane yield targets.

There still remain a number of key objectives to achieve particularly in terms of the reduction of costs.
However I believe we have the correct strategies in place to enable us to realize our goals.

For example our benchmarking and zero based budgeting exercise for agriculture identified the critical cost centres in this area and we will obtain similar guidelines when we complete the exercise for factory and administration.

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The growth of the sugar industry over the last ten years is testament to the purposeful and successful execution of our mandate, and we are pleased that the industry's performance in 2002 has further demonstrated that we are well placed to realize our vision of becoming a world-class competitive and sustainable sugar industry.

I wish to thank my fellow directors and the management and all employees of GuySuCo most heartily for a very commendable year.

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9 guysuco & the environment The Guyana sugar industry was established in the eighteenth century.

It has undoubtedly made an impact on the environment within the so-called "sugar-belt".

Fortunately, however, none of the sugar industry's by- products or operational procedures present a serious threat to the local environment.
The disposal of waste products The main waste products emanating from a sugar development are bagasse, filter press mud, water as a factory effluent and smoke.

Bagasse is the fibre which remains after thejuice has been extracted from the cane during processing.

It consists mainly of cellulose and lignin and is used as a fuel in the factory boilers.

Filter press mud is the mud which settles out from the cane juice during clarification and which is filtered off.
It is variable in composition and consists of sucrose, wax, fat, nitrogen, phosphate, potassium and some bagacillo (small particles of bagasse).

It has value as a soil ameliorant and is used for this purpose, particularly on dam beds and during conversion of cambered beds to other field layouts when some exposure of the sub-soil occurs.

Water, in the form of effluent from the factory, contains many impurities, often varying quantities of sugar.
It must be treated to minimal BOD (Biological Oxygen Demand) content prior to being discharged.

Smoke is another potential pollutant on a sugar development.

It is produced by the factory boilers and from burning cane trash both before and after harvest.

Prior to harvest cane fields are set on fire to remove the dead leaves and to minimise the non sugar-containing vegetative matter being taken to the factory.
Fire is also found to displace snakes and some pests which are a hazard to cane cutters and agricultural workers.

Guysuco is presently monitoring smoke discharge and its effect on areas around the estates.

We are working with the Environmental Protection Agency towards defining a standard for smoke emission.

Effects on the indigenous life of the area The industry's future plans relate, in the main, to the existing cane area.
About 10 000 acres of new land will be developed in Berbice while some existing cane lands in Demerara may be put to alternative use.

There are therefore no anticipated negative environmental effects.

Present cane husbandry practices will essentially be maintained although we intend to increase the level of mechanisation of certain operations.

Thus the present weed control measures will continue.

It will be a mix of chemical, manual and mechanical methods of control.
The herbicides in use are manufactured and/or formulated by major manufacturers within the United States and Europe and are approved for use by the appropriate United States and European authorities.

Pest control will continue as at present with minimal use of insecticides for insect control and continuing efforts to establish means of biological control for the troublesome moth borers.
Some insecticides may be used to control sporadic froghopper attacks and the periodic attacks by leaf - eating caterpillars and by termites.

Again in such cases, only approved insecticides will be used.

Rat baiting with rodenticides of low toxicity to other mammals, such as brodifacoum, will continue to be the main means of control.
In general, the navigation canals, together with flood fallow fields and sidelines, contain good stocks of fish and other aquatic animals and plants thus demonstrating the high water quality and freedom from pollutants.

The situation will continue to be monitored.

As stated earlier, some 10 000 acres of new land will be taken into cane.

Currently, this area supports savannah type grassland for grazing cattle during the season, but is subject to flooding in rainy periods.
There are no trees to be cleared and the proposals will result in the replacement of pasture by sugarcane.

The rehabilitation proposals for the agricultural sector of GUYSUCO are, therefore, not expected to increase dangers of environmental pollution over the levels which have existed during the past twenty or thirty years.

This is testified by the fact that the Environmental Protection Agency has issued an Environmental Permit to GuySuCo to construct the new factory at Skeldon.
10 report of the directors Annual Report 2002 The Directors submit their report for the year ended December 31, 2002.

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.
The Chairman's Statement describes the development and operation of the Corporation during the year, including the preferential markets situation, the position at the end of the year and the proposed future developments, specifically the Skeldon Sugar Modernization Project.

RESULTS AND DIVIDENDS The results for the year are set out in the financial statements on pages 15 to 33.

In accordance with the policy of the Corporation for many years, no dividends are declared or payable.
CORPORATE GOVERNANCE The Guyana Sugar Corporation recognizes the importance and is committed to high standards of corporate governance.

The principles of good governance have been applied in the following ways:- (a) The Board: The Board meets not less than six times a year and has adopted a schedule of matters reserved for its decision.

It is responsible for the strategic direction of the Corporation and all directors have full and timely access to information.
The Board has established four committees with defined terms of reference, namely the Audit Committee, the Central Tender Committee, the Remuneration Committee and the Lands Committee.

The Audit Committee, a formally constituted sub-committee of the Board, is composed of Non-executive Directors.
The Audit Committee reviews and discusses, with the Internal Auditor and External Auditor, the Group's internal accounting controls, internal audit function, choice of accounting policies, internal and external audit programmes, statutory auditors' report, financial reporting and other related matters.

The Central Tender Committee evaluates all tenders for the supply of materials and services above predetermined levels.
The Remuneration Committee approves remuneration of senior staff and sets the policies for remuneration of other staff.

The Lands Committee approves all land disposals and policy issues concerning land.
The Directors are responsible for the Corporation's system of internal financial control which is designed to provide reasonable (but not absolute) assurance regarding: a) the safeguarding of assets against unauthorized use; and b) the maintenance of proper accounting records and the reliability of financial information used within the Corporation.

Key procedures have been established which are designed to provide effective internal financial control.
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.
(b) Control Environment: The Directors have put in place an organizational structure with clearly defined lines of responsibility and delegation of authority.

(c) Information Systems: The Corporation has a comprehensive system of financial reporting.

The annual budget is approved by the Board 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.
(d) Control Procedures: There are clearly defined policies for capital expenditure including appropriate authorization levels.

11 - - - - - - - report of the directors EMPLOYEES Performance appraisals, 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.

PENSIONS The senior staff pension scheme of the Corporation 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.
DIRECTORS: Cabinet approved the appointment of the following persons as members of the Board of Directors of the Guyana Sugar Corporation Inc. as of 30"' October, 2001: Chairman Director Director Director Director Director Director Director Director Representative, Ministry of Agriculture Vickram Oditt Ronald Alli David Garter' Barry Newton Donald Ramotar Hubert Rodney Rajendra Singh Joseph Vieire Brian Webb The Honourable Minister of Agriculture, Mr. Navin Chandarpal nominated Dr. Dindyal Permaul, Permanent Secretary Ministry of Agriculture as their representative.
No director has any significant interest in any contract concluded by the Corporation.

Non-significant interests are reported to the Board and recorded in minutes of Board meetings.

DIRECTORS' EMOLUMENTS: Directors' fees and expenses are reported in Note 12 (b) to the Financial Statements.

DONATIONS: The aggregate amount of money given by the Corporation to charitable or public causes in 2002 was 51,917,360.
AUDITORS: The Auditor General has contracted the accounting firm of Ram and McRae to audit the Financial Statements of the Corporation who have indicated their willingness to continue in office and have offered themselves for reappointment.

By Order of the Board A.

De Souza secrem,y.

Registered Office Ogle Estate East Coast Demerara June 24.

2003 • Resigned rn July 2002.
Resigned n February 2002 12 report of the auditors AnnuAl Report 2002 Report of the Chartered Accountants Ram & McRae To the Auditor General On the Consolidated Financial Statements of the GUYANA SUGAR CORPORATION For the year ended 31st December 2002 We have audited the consolidated balance sheet of Guyana Sugar Corporation Inc. as at December 31, 2002, the consolidated profit and loss account and the statements of changes in shareholders' equity and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with International Standards on Auditing and the Office of the Auditor General's auditing standards.

Those standards require that we plan and perform an audit to obtain reasonable assurance that the financial statements are free from material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.

An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the Consolidated financial statements on pages 15 to 33 present fairly, in all material respects, the state of the Company's affairs at December 31, 2002 and its loss and cash flows for the year then ended in conformity with International Accounting Standards, and comply with the Companies Act 1991.
Without qualifying our opinion we draw attention to the following matters: International Accounting Standard 17 - Leases requires that leases be accounted for as finance or operating leases under defined circumstances.

The Company in the preparation of these financial statements has accounted for all leases with the Government of Guyana as operating leases as stated in note 1 (d) to the financial statements.

These leases represent a substantial portion of the operating assets of the Company.
Preliminary data was used by the Independent Actuaries, Bacon Woodrow and de Souza in calculating the IAS 19 - employee benefits amounts for the Junior Staff Pension Scheme.

The Actuaries cautioned that the IAS 19 figures may be subject to change after a more complete assessment is carried out of the Scheme.

The defined benefit obligation on the Junior Staff Pension Scheme included in the financial statements at December 31, 2002 amounted to $14.8 billion.
RAM & McRAE CHARTERED ACCOUNTANTS PROFESSIONAL SERVICES FIRM 157 'C' Waterloo Street, North Cummingsburg, Georgetown, Guyana June 27, 2003 13 report of the auditor general OFFICE OF THE AUDITOR GENERAL, OF GUYANA 63, HIGH STREET, KINGSTON, GFARGETOWN, GUYANA REPORT OF THE AUDITOR GENERAL.
TO THE MEMBERS OF GUYANA SUGAR CORPORATION INC. ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2002 Chartered Accountants, Ram & McRae, have audited on my behalf the financial statements of Guyana Sugar Corporation Inc. for the year ended 31 December 2002, as set out on pages 15 to 33.

The audit was conducted in accordance with the Financial Administration and Audit ( Amendment) Act 1993.
The preparation of the financial statements, including assertions relating to their completeness, accuracy and validity, and compliance with the applicable laws, regulations and contractual obligations, is the responsibility of Management.

My responsibility is to express an independent opinion on the statements based on these assertions and to report my opinion to you.

As required by the Financial Administration and Audit (Amendment) Act 1993, I have re- viewed the audit plan and procedures, work papers.
report and opinion of the Chartered Accountants.

I have also had detailed discussions with the Chartered Accountants on all matters of significance to the audit.

I concur with the opinion, as set out on page 13, of Chartered Accountants.

Ram & McRae.

B. BA IRA Auditor General (Ag.)
June 27, 2003 4 consolidated balance sheet as at 31st December 2002 Annual Report 2002 Notes 3 4(c) 4(a), (b) 1(k), 5 11 14 16(a) COMPANY GROUP 2002 $M 10,800 54,099 41 (4,900) 60,040 1,232 21 - 14,922 76,215 Restated 2001 $M 499 53,821 10,295 (5,115) 59,500 1,550 - 13,791 74,841 2002 $M 10,800 54,099 41 (4,875) 60,065 1,221 21 65 14,922 76,294 Restated 2001 $M 499 53,821 10,295 (5,090) 59,525 1,550 68 13,791 74,934 1(c), 1 (d), 7 73,599 72,481 73,608 72,493 14 1 1 1(e), 8(a) 1(e), 8(b) 8(c), 19 9 8(d),19 6 8(f) 8(e),10 3,451 3,315 1,939 41 - 1,814 3,250 1,554 2,700 2,831 3,451 3,365 1,939 10 1,882 3,250 1,592 2,688 10 2,887 10,560 10,335 10,647 10,427 3,758 662 144 - 70 435 2,876 7,945 2,615 3,348 569 144 - - 1,039 2,876 7,976 2,360 3,773 662 144 - 70 436 2,876 7,961 2,686 3,367 520 144 22 - 1,057 2,876 7,986 2,441 Stated capital Revaluation reserve Other reserves Accumulated earnings Total Shareholders Equity Deferred tax Loan Minority interest Defined benefit pension liability Represented by: Fixed Assets Investments Current Assets Inventories Product stock Trade and other receivables Related parties Tax recoverable Cash and cash equivalents Total Current Assets Current Liabilities Trade and other payables Related parties Debenture Dividends payable Obligations under finance lease (within one year) Taxation Export sugar levy Total Current Liabilities Net Current Assets Total Assets less Current Liabilities 76,215 74,841 76,294 74,934 These financial statements were approved for issue by the Board of
 Directors on 26th June, 2003.
Vickram Oditt Director Rajendra Singh Director The accompanying notes on pages 20 to 33 form an integral part of these financial statements 15 consolidated profit and loss account for the year ended 31st December 2002 Notes COMPANY 10 Sales Cost of sales Gross profit Other operating income Administrative expense Selling and marketing expense Net profit/(loss) from operations 12 Finance costs Net profit/(loss) before tax and defined benefit pension liability 2002 $M 25,389 20,604 4,785 401 2,116 2,266 804 37 2001 $M 22,950 19,936 3,014 244 2,453 1,994 (1,189) 46 GROUP 2002 $M 2001 $M 25,389 22,950 20,601 19,905 4,788 390 2,117 2,266 795 35 3,045 247 2,454 1,994 (1,156) 46 767 (1,235) 760 (1,202) Provision for defined benefit pension liability 16 1,131 — 1,131 — Net loss before tax Taxation credit Net loss after tax Minority Interest (364) (1,235) (371) (1,202) 54 (310) — 366 (869) — 61 (310) — 349 (853) (28) 13 14 Retained loss for the year (310) (869) (310) (881) The accompanying notes on pages 20 to 33 form an integral part of these financial statements 16 b'o GUYANA SUGAR CORPORATION INC. consolidated statement of changes in equity for the year ended 31st December 2002 Annual Report 2002 COMPANY Statement of changes in equity for 2002 Notes Stated Capital Revaluation Reserve Other Reserves Accumulated Earnings Total Balances at 1st January, 2002 499 53,821 10,295 (5,115) 59,500 Capitalisation of reserves as equity 10,301 (47) (10,254) Effect of review of valuation of factory
 plant & machinery 4(c) 8 Release of revaluation reserve for excess depreciation Deferred tax recognised in equity 5 Retained loss for the year 1,025 (525) (175) — — — — .
— — — — — — 1,025 525 — (175) (310) (310) Balances at 31st December, 2002 10,800 54,099 41 (4,900) 60,040 COMPANY Statement of changes in equity for 2001 Stated Capital Revaluation Reserve Other Reserves Accumulated Earnings Total Balances at 1st January, 2001 499 54,234 10,295 4,083 69,111 Release of revaluation reserve for disposal of revalued assets Release of revaluation reserve for excess depreciation Deferred tax recognised in equity Retained loss for the year (62) (573) 772 — — — — 62 573 — 222 (869) (869) Balances at 31st December, 2001 499 53,821 10,295 3,849 68,464 Adjustment to opening reserves: 15 Deferred tax on recognition of defined benefit pension liability Recognition of defined benefit pension liability — — 16 — — — 4,827 4,827 (13,791) (13,791) Restated balances as at 31st December 2001 499 53,821 10,295 (5,115) 59,500 The accompanying notes on pages 20 to 33 form an integral part of these financial statements 17 GUYANA SUGAR CORPORATION INC. consolidated statement of changes in equity it • GROUP Statement of changes in equity for 2002 Notes Stated Capital Revaluation Reserve Other Reserves Accumulated Earnings Total Balances at 1st January, 2002 499 53,821 10,295 (5,090) 59,525 Capitalisation of reserves as equity 10,301 (47) (10,254) — Effect of review of valuation of factory plant & machinery 4(c) Release of revaluation reserves for excess depreciation Deferred tax recognised in equity 5 Retained loss for the year — — — — 1,025 (525) (175) — Balances
 at 31st December 2002 10,800 54,099 — 1,025 525 (175) — 41 (310) (310) (4,875) 60,065 GROUP Statement of changes in equity for 2001 Stated Capital Revaluation Reserve Other Reserves Accumulated Earnings Total Balances at 1st January, 2001 499 54,234 10,295 4,120 69,148 Release of revaluation reserves for disposal of revalued assets Release of revaluation reserves for excess depreciation Deferred tax recognised in equity Retained loss for the year — — — (62) (573) 222 62 573 222 — — (881) (881) A-- Balances
 at 31st December 2001 499 53,821 10,295 3,874 68,489 Adjustment to opening reserves: 15 Deferred tax on recognition of defined benefit pension liability Recognition of Defined Benefit Pension liability 16 — — — — 4,827 4,827 (13,791) (13,791) Restated balances as at 31st December 2001 499 53,821 10,295 (5,090) 59,525 The accompanying notes on pages 20 to 33 form an integral part of these financial statements 18 consolidated cash for the year ended 31st flow statement December 2002 Annual Report 2002 Notes (a) Cash generated from operations Interest paid Net cash flows from operating activities 1 Taxation Taxation paid Tax refunds received Cash flows from investing activities Interest received Purchase of fixed assets Sale of fixed assets Payment to minority interest Net cash used in investing activities Cash flows from financing activities Short term lease financing Proceeds from long - term borrowing Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period (9) COMPANY GROUP 2002 $M 1,998 (73) 1,925 2001 $M 2,876 (24) 2,852 (1,044) (35) 36 (2,026) 70 (1,824) 8 2002 $M 2,057 (73) 1,984 (1,070) 9 35 (2,026) (28) 2001 $M 2,978 (24) 2,954 (80) 12 70 (1,826) 8 (11) (1,990) (1,746) (2,019) (1,759) 70 21 (1,017) 2,831 1,814 1,071 1,760 2,831 70 21 (1,005) 2,887 1,882 1,127 1,760 2,887 a. Reconciliation of net profit before taxation to
 net cash inflows from operations: COMPANY GROUP Net (loss) before taxation Adjustments for Depreciation Net adjustments for impairment of asset values Interest (net) Operating profit before working capital changes (Increase)/decrease in inventories (Increase) in product stocks Decrease in trade and other receivables Increase in trade and other payables Increase in amounts owing to related parties (Increase)/decrease in amounts due from related parties Increase in defined benefit pension liability Cash
 generated from operations 2002 $M (364) 1,933 37 1,606 (201) (1,761) 761 410 93 (41) 1,131 1,998 Restated 2001 $M (1,235) 2,184 133 (46) 1,036 631 (640) 173 1,511 125 40 Restated 2001 $M (1,202) 2,186 132 (46) 1,070 631 (641) 181 1,517 180 40 2002 $M (371) 1,936 - 38 1,603 (201) (1,773) 749 406 142 - 1,131 2,876 2,057 2,978 The accompanying notes on pages 20 to 33 form an integral part of these financial statements 19 notes to the consolidated financial statements for the year ended 31st December 2002 1.
SIGNIFICANT ACCOUNTING POLICIES (a) Accounting convention The financial statements of the Group have been prepared under the historical cost convention as modified for the revaluation of certain fixed assets.
The financial statements have been prepared in accordance with International Financial Reporting Standards, which comprise standards and interpretations approved by the International Accounting Standards Board ("IASB") and International Accounting Standards and Standing Interpretations Committee interpretations approved by the International Accounting Standards Committee ("IASC")that remain in effect, all of which have been adopted by The Institute of Chartered Accountants of Guyana ("ICAG").
These financial statements also comply with the Companies Act 1991.

(b) Basis of Consolidation The consolidated financial statements incorporate the financial statements made up to 31st December each year of the Corporation and Lochaber Limited, a company controlled by the Corporation (its subsidiary).

Control is achieved by virtue of the Corporation having the power to govern the financial and operating policies of the subsidiary through the Board of Directors.
Details of the subsidiary are given in note 14.

(c) Fixed assets and depreciation Freehold Land and Buildings are stated at professional valuation as at 1/1/99.

Factory Plant is stated at Directors' valuation as at 31/12/02 as further explained in note 4 (c ).

Other fixed assets and additions to freehold land, buildings and factory plant subsequent to 1/1/99 are stated at cost.
All assets with the exception of freehold land and work-in- progress are depreciated on the straight line method calculated to write off each asset over its estimated useful life as follows:- Freehold Buildings - Wooden Freehold Buildings - Others Land expansion costs Plant, machinery and equipment Motor Vehicles Aircraft Before 1/1/2000 Over 20 years Over 33 years From 5 to 10 years From 5 to 16 years Over 4 and 10 years Over 3 years After 1/1/2000 Over 20 years Over 33 years According to tenure From 5 to 17 years Over 4 and 10 years Over 5 and 10 years Depreciation is provided from the month following acquisition and a full year's charge is taken in the year of disposal.
(d) Freehold and Leasehold Land In addition to 53,289 acres of freehold land, the Group leases from the Government of Guyana 135,963 acres of land on which it grows cane and for ancillary purposes.
These are subject to several types of lease agreements, the status of which is as follows: Unexpired leases Expired leases Expired permissions During the President's Pleasure Licences During the President's Pleasure Permissions Unexpired provisional leases (Skeldon expansion) Acres 22,880 18,684 2,333 66,621 845 24,600 135,963 4 The Group has received written confirmation that the Government is committed to renewing all leases for lands beneficially occupied by GuySuCo.
The tenure of the leases is likely to be fifty (50) years.

Lease rentals will be reviewed from time to time by the Commissioner of Lands & Surveys and approved by the Government of Guyana.

The Directors have decided to treat these leases as operating leases in the light of the uncertainties relating to future lease payments.
20 notes to the consolidated financial statements for the year ended 31st December 2002 Annual Report 2002 (d) Freehold and Leasehold Land (cont'd) The Government of Guyana has approved 1039.1 acres of land owned by the Corporation for disposal.

Lease payment per acre per annum has been as follows: Prior to 1985 1.1.85 to 31.5.98 From 1.6.98 $4 $7.5 $1,000 A valuation prepared by professional valuers placed a value on these lands of $600,000 per acre at 1st January, 1999.
(e) Inventories Inventories are valued at the lower of weighted average cost and net realisable value.

Product stocks are valued at the lower of cost of production and estimated realisable value less deductions for sugar industry special funds contributions and shipping and selling expenses, where applicable.

Where markets are identified for sugar and molasses, the net realisable value is used if it is lower than the cost of production.

The Corporation does not value standing cane.


The value of standing cane will be included in financial statements with effect from financial year 2003, the year from which IAS 41 (Agriculture) becomes mandatory.

The value of standing cane is incorporated in the financial statements of Lochaber Limited.

(f) Research and development Research and development expenditure is charged against revenue in the year in which it is incurred.
(g) Foreign currency transactions Foreign currency transactions are recorded in Guyana Dollars at the rates of exchange ruling at the date of such transactions.

At the balance sheet date, foreign currency assets and liabilities are translated at the rates of exchange ruling at that date and resulting gains and losses are recognised in the profit and loss account.

(h) Sales Sales represent the amounts earned from the sale of sugar and molasses during the year.
(i) Revenue recognition Revenue is recognised when the product is shipped, or for domestic sales when the product is collected.

(j) Pension Scheme The Corporation participates in a contributory multi-employer pension scheme, and operates a non contributory scheme for its senior and junior staff respectively.

The multi-employer pension scheme, Guyana Sugar and Trading Enterprises Pension Scheme, is a defined benefit scheme, for its qualifying employees.
The contributions are held in trustee administered funds which are separate from the Corporation's finances.

A preliminary valuation carried out at 31st December 2001 for the Pension Scheme revealed a deficit of $322M.

The actuaries have not quantified the extent of the deficits of the individual participating members, of which the Corporation is the largest member.

The Corporation's share is estimated to be $235M.


This deficit was calculated on a going concern basis and thus allows, inter alia, for the effect of future salary increases on the Scheme's liabilities.

The actuaries advised that, had the Scheme been terminated as at the date of the valuation, the available assets would have been sufficient to secure accrued benefits based on completed service and current salary levels.
21 notes to the consolidated financial statements for the year ended 31st December 2002 (j) Pension Scheme (cont'd) During the year the Corporation's contribution to the Scheme was $199M (2001 $193M) which does not include any contribution towards the deficit on the Scheme.

Junior staff who have retired and are not members of the multi-employer Pension Scheme are paid ex-gratia pensions, which are partially recoverable from the Sugar Industry Price Stabilisation Fund.
Under IAS 19 the total liability to the employees governed by this arrangement has been computed.

The liability as at December 31, 2001 has been taken to revenue reserve and the current year liability has been taken to the Profit and Loss Account.

(k) Deferred Tax Deferred tax liabilities are recognised in respect of corporation taxes payable in future periods in respect of taxable temporary differences.
Deferred tax assets are recognised in respect of deductible temporary differences, unused tax losses and unused tax credits but only to the extent that it is anticipated that taxable profit will be available in future years.

(I) Skeldon Sugar Modernisation Project All expenditure relating to the Modernisation Project has been charged to work in progress.

Expenditure incurred to date on the Project comprises Project Management Costs ($609M) and the development of new cane areas ($1,041M).
The Corporation has received written confirmation from the Government of Guyana that loans from the World Bank (IDA) and the Caribbean Development Bank have been pledged and the Government of Guyana has guaranteed all payment obligations under contracts awarded for project implementation.

4 (m) Comparatives Certain changes have been made to the presentation of the financial statements and where necessary the comparative figures for the previous year have been restated accordingly.

2.
2.

INCORPORATION AND PRINCIPAL ACTIVITIES Guyana Sugar Corporation Limited was incorporated on 21st May 1976 and is primarily involved in the cultivation of sugar cane and the manufacture and sale of sugar and molasses.

On 28th February 1996 the Corporation was continued under the Companies Act 1991 and its name changed to Guyana Sugar Corporation Inc.

The Corporation is wholly owned by the Government of Guyana.

3.
3.

STATED CAPITAL The Corporation has an authorised stated capital of 10,800,000,000 and issued stated capital of 10,799,571,775 ordinary shares at a minimum issue price of $1 each.

During the year the Corporation capitalised $9,362,950,000 from the Rehabilitation and Development Fund and $938,085,000 from the General Capital Reserves as stated capital.

The authorised stated capital was increased to $10,800,000,000 on 24th October 2001.

4.
4.

CAPITAL RESERVES (a) Rehabilitation & Development Fund (b) General Total other reserves (c) Revaluation Reserve COMPANY GROUP 2001 $M 9,363 932 10,295 53,821 64,116 2002 $M 41 41 54,099 54,140 2001 $M 9,363 932 10,295 53,821 64,116 2002 $M 41 41 54,099 54,140 22 .4'44111‘1 P5L1 GUYANA SUGAR CORPORATION INC. notes to the consolidated financial statements for the year ended 31st December 2002 Annual Report 2002 4.
CAPITAL RESERVES (cont'd) (a) Rehabilitation & Development Fund An agreement was reached between the Ministry of Finance and the Corporation to set up a Rehabilitation and Development Fund from levies payable.

This fund represents additional equity contributions by the Government of Guyana.

No balances were transferred to the fund since 1996.

The full amount was capitalised as stated capital during 2002.

--4- ' (b) General 1.


Amounts received by the Corporation from the Sugar Industry Special Funds for rehabilitation work carried out on the Corporation's factories.

2.

Monies received from the Government of Guyana for the purpose of financing projects in the Corporation's diversification programme.

3.

The value of the net assets of Demerara Sugar Terminals Limited, which ceased trading in 1991 but continued as a department of the Corporation.
During 2002 the full amount was capitalised as stated capital.

4.

The value of loans and accrued interest assumed by the Government of Guyana.

During 2002 the full amount was capitalised as stated capital.

5.

The value of the net assets of Guyana Agricultural Products Corporation and Demerara Sugar Company Limited which were acquired by the Government of Guyana and the assets transferred to the Corporation.

During the year $14M was capitalised as stated capital.
4 (c) Revaluation Reserve This amount represents: 1.

The surplus of the net book values over the consideration paid for the acquisition of the Corporation's assets on nationalisation in 1976, less disposals.

During the year the full amount was capitalised as stated capital.

2.
2.

Revaluation of Fixed Assets Effect of review of valuation of factory plant & machinery Less: Provision for Deferred Tax COMPANY GROUP 2002 $M 2001 $M 2002 $M 2001 $M 25 15 — — 1 41 $M 25 15 38 839 15 932 $M 47 25 15 — — 1 41 $M 25 15 38 839 15 932 $M 47 60,330 60,330 60,330 60,330 1,025 (7,256) (6,556) 1,025 (7,256) (6,556) 54,099 53,821 54,099 53,821 The Corporation revalued its Freehold Land and Buildings and Factory Plant and Machinery as at 1st January 1999.
The valuation of the land and buildings was undertaken by an independent valuer.

The original valuation as at 1/1/99 of plant and machinery was based on a value in use calculation.

The valuation is reviewed each year in the light of changes in markets, production levels and exchange rate movements.

The value was revised upwards by the directors at the balance sheet date by $1,025M.
23 `14,41n,;,( GUYANA SUGAR CORPORATION INC. notes to the consolidated financial statements for the year ended 31st December 2002 5.
DEFERRED TAX Recognised deferred tax assets/liabilities for the Group are attributable to the following items: Property, plant and equipment Inventories provision Tax value of loss carry-forward utilised Defined benefit pension liability COMPANY Assets GROUP Liabilities 2002 $M 6,634 (179) (5,223) 2001 $M 6,574 (87) (110) (4,827) 2002 $M 6,634 (179) (11) (5,223) 2001 $M 6,574 (87) (110) (4,827) 1,232 1,550 1,221 1,550 f Movement in temporary differences during 2002 COMPANY Balance 1st Jan 2002 Recognised in income Recognised in equity Balance 31st Dec 2002 Property, plant and equipment Inventories provision Tax value of loss carry-forward utilised Defined benefit pension liability 6,574 (87) (110) (4,827) 1,550 Movement in temporary differences during 2002 175 6,634 (179) (5,223) 175 1,232 (115) (92) 110 (396) (493) GROUP Balance 1st Jan 2002 Recognised in income Recognised in equity Balance 31st Dec 2002 (115) (92) 99 (108) (396) (504) 175 175 6,634 (179) (11) 6,444 (5,223) 175 1,221 Property, plant and equipment Inventories provision Tax value of loss carry-forward utilised Balance at 31st December 2002 Adjustment to opening balance Defined benefit pension liability Restated balance 6.574 (87) (110) 6,377 (4,827) 1,550 24 .e4a: 4 rso\?
GUYANA SUGAR CORPORATION INC. notes to the consolidated financial statements for the year ended 31st December 2002 Annual Report 2002 6.

DEBENTURE 2% Government of Guyana debenture COMPANY GROUP 2002 SM 144 2001 $M 144 2002 SM 144 2001 $M 144 The debenture from the Government of Guyana is scheduled to be repaid in 2003.

7.
FIXED ASSETS-COMPANY Freehold Land Buildings Others Wooden State Land and Factory Plant Land Expansion Machinery & Equipment Cost SM SM $M Equipment Linder Finance Lease < 1 year SM Work in Progress Totals SM $M 43,811 10,947 3,146 76 21,200 - 2,742 81,922 - - - - 76 4 - - 4 72 72 1,025 (16) (59) 1,502 - - - 2,026 174 (1,730) 1,025 2,026 (59) - 23,652 174 3,038 84,914 8,519 1,593 (59) 10,053 - 21 - 21 - 9,441 - 1,933 (59) - 11,315 13,599 153 3,038 73,599 12,681 2,742 72,481 Cost or valuation At 1st January 2002 Effect of review of valuation of factory plant & machinery Recategorisation Additions Disposals Transfers - - - - (528) - - 54 544 - - - At 31st December 2002 43,811 10,473 3,690 Depreciation At 1st January 2002 Charge for the year Retired on disposals At 31st December 2002 Net book value at 31st December 2002 Net book value as at 31st December 2001 - 7 - 7 695 232 - 223 80 - 927 303 43,804 9,546 3,387 43,811 10,252 2,923 25 \4:411.." GUYANA SUGAR CORPORATION INC. notes to the consolidated financial statements for the year ended 31st December 2002 FIXED ASSETS-GROUP Freehold Land Buildings Others Wooden State Land and Factory Plant Land Expansion Machinery & Equipment Cost Equipment under Finance Lease < 1 year Work in Progress Totals $M $m $M $M $m $M $M $M 43,811 10,947 3,146 76 21,223 2,742 81,945 Cost or valuation At 1st January 2002 Effect of review of valuation of factory plant & machinery Recategorisation Additions Disposals
Additions Disposals Transfers - (528) - 54 - 544 - - - - - - - At 31st December 2002 43,811 10,473 3,690 Depreciation At 1st January 2002 Charge for the year Retired on disposals At 31st December 2002 Net book value at 31st December 2002 Net book value as at 31st December 2001 695 232 223 80 927 303 7 7 43,804 9,546 3,387 43,811 10,252 2,923 8.
NET CURRENT ASSETS (a) Inventories Gross (Note (i) below) Less provision for slow moving and obsolete items Net $22M (2001 $23M)of obsolete stocks were identified and charged against the provision.

Additionally the provision has been (decreased)/increased by (S190M) (2001 $54M ).
(i) Inventory Categories Fuel Spares Fertilisers and Chemicals Other - - - - - 76 4 4 72 72 1,025 (16) (59) 1,502 1,025 - - - - - 2,026 2,026 (59) - - - (1,730) 174 23,675 174 3,038 84,937 8,530 1,596 (59) 10,067 21 21 - - - 9,452 1,936 (59) - 11,329 13,608 153 3,038 73,608 12,693 2,742 72,493 COMPANY GROUP 2001 $M 3,952 (702) 3,250 $M 84 1,926 868 1,074 3,952 2002 $M 3,963 (512) 3,451 $M 88 2,535 777 563 3,963 2001 $M 3,952 (702) 3,250 $M 84 1,926 868 1,074 3,952 2002 $M 3,963 (512) 3,451 $M 88 2,535 777 563 3,963 26 4 4 I notes to the consolidated financial statements for the year ended 31st December 2002 Annual Report 2002 GUYANA SUGAR CORPORATION IN( .
8.
NET CURRENT ASSETS (cont'd) (b) Product Stock Categories Sugar Molasses (c) Amounts due from Related Parties Lochaber Limited (d) Amounts due to Related Parties Booker Tate (Note 19) Lease Rentals (Government of Guyana) Lochaber Limited (e) Export sugar levy COMPANY GROUP 2002 $M 3,122 193 3,315 $M 41 41 $M 177 485 — 662 2001 $M 1,549 5 1,554 $M $M 71 449 49 569 2002 $M 3,172 193 3,365 $M — — $M 177 485 — 662 2001 $M 1,587 5 1,592 $M — $M 71 449 — 520 There was unpaid export sugar levy totalling $2,8 7 6M at the balance sheet date.
Subsequent to the balance sheet date the Government of Guyana relinquished its right to claim payment of the unpaid sugar levy.

The directors are of the opinion that this is a non adjusting event in accordance with International Accounting Standard #10 and as such there has been no adjustment to the Financial Statements.

(f) Obligation under finance lease The Corporation leases equipment from Machinery Corporation of Guyana Inc. Interest is charged at a rate of 2.46%.

The lease expires in September 2003.


9.

CASH AND CASH EQUIVALENTS US$ Sterling Euro G$ Rate of conversion G$/US$ G$/Sterling G$/Euro 2002 000s 1,1 1 1 253 5,142 2001 000s 9,193 649 870 G$M 212 77 983 1,272 542 1,814 G$M 1,741 178 146 2,065 766 2,831 G$M 212 77 983 1272 610 1,882 G$M 1,741 178 146 2,065 822 2,887 191.27 308.19 200.57 189.38 274.58 167.51 191.27 308.19 200.57 189.38 274.58 167.51 27 M.,117/./nn ,5:411&sti VW.
GUYANA SUGAR CORPORATION INC. notes to the consolidated financial statements for the year ended 31st December 2002 10.
SALES AND EXPORT LEVY Sales (Note (a) below) Sugar Molasses Total Sales Export sales levy Amount payable Remitted by Government COMPANY GROUP 2002 $M 24,212 1,177 25,389 2001 $M 21,614 1,336 22,950 2002 $M 24,212 1,177 25,389 2001 $M 21,614 1,336 22,950 11,958 (11,958) 10,571 (10,571) 11,958 (11,958) 10,571 (10,571) Sales after remission of levy 25,389 22,950 25,389 22,950 The amount of export sales levy payable is calculated under the Sugar Levy Act of 1974 (as amended).
Under Section 6(1) of the Financial Administration and Audit Act, the Government of Guyana has agreed to remit $11,958M (2001 $10,571M) of the Sugar Levy payable.

COMPANY GROUP (a) Sales by geographic area Europe USA Caribbean Guyana 2002 $M 18,350 942 4,219 1,878 25,389 2001 $M 16,998 905 3,220 1,827 22,950 2002 $M 18,350 942 4,219 1,878 25,389 2001 $M 16,998 905 3,220 1,827 22,950 All expenditure is incurred in Guyana, with the exception of marketing expenses and part of the management fee.
All assets and liabilities are based in Guyana, with the exception of foreign cash balances and some trade receivables and payables.

The Directors consider therefore that segmentation of net profit and net assets by geographic area would not be meaningful.

11.
11.

Loans Government of Guyana COMPANY GROUP 2001 $M 2002 $M 21 2001 $M 2002 $M 21 The loan from the Government of Guyana represents an on - lending of a loan from the Caribbean Development Bank for US$5,050,000 to finance various Drainage and Irrigation projects.

Total funds received at 31st December 2002 amounted to US$ 109,798.

Interest is charged at the rate of 2% per annum on the principal and accrued quarterly.
The loan is to be repaid starting 10 years after the date of first disbursement in 120 equal quarterly installments.

The date of the first disbursement was July 2002.

1 28 notes to the consolidated financial statements for the year ended 31st December 2002 Annual Report 2002 12.
NET (LOSS) BEFORE TAXATION (364) (1,235) (371) (1,202) COMPANY GROUP 2002 $M 2001 $M 2002 $M 2001 $M (a) Atter charging - Staff Costs Wages and salaries Social security contributions Defined benefit pension liability (Note 16(c) Materials and services purchased Lease obligations Research and development expense Directors' fees & expenses (Note (b) below) Provision for slow moving and obsolete items Depreciation Auditors' remuneration Interest expense Management fees and expenses (Note 19) Impairment adjustment to fixed assets After crediting Net gain on exchange Interest income Write back of Camp Street Property (Note (c) below) 12,164 634 1,651 7,629 230 38 30 (190) 1,933 6 73 453 - 67 36 12,051 577 193 7,242 136 43 15 54 2,184 6 24 394 133 20 70 (49) 12,164 634 1,651 7,717 230 38 30 (190) 1,936 6 73 453 - 67 39 12,051 577 193 7,330 136 43 16 54 2,186 6 24 394 132 20 70 (49) COMPANY GROUP (b) Directors' fees & expenses Chairman - Vickram Oditt Director - Ronald Alli Director - Donald Ramotar Director - Edgar Heyligar (resigned in May 2 0 01) Director - Dindyal Permaul Director - Joseph Vieira (resigned in February 2 0 0 2) Director - Rajendra Singh Director - Hubert Rodney Director - Brian Webb Director - David Carter (resigned in July 2 0 0 2) Director - Barry Newton Director- Patrick Falconer Director- Joseph King 2002 $000 10,419 1,680 84 - 84 - 732 1,947 389 6,929 7,844 - - 2001 $000 3,943 1,584 84 35 7 7 57 57 624 6,840 2,204 - - 2002 $0 0 0 10,419 1,680 84 - 84 732 1,947 389 6,929 7,844 169 169 2001 $000
 3,943 1,584 84 35 7 7 57 57 624 6,840 2,204 160 160 30,108 15,442 30,446 15,762 All directors expenses have been incurred on the Group's business.
• (c) Write back of Camp Street Property The cost of $1 61M incurred on the construction of this property was written off in 1999 at which time the recoverable amount was assessed to be nil.

The directors are confident that an amount of $11 2.5M representing the estimated value of the land can be recovered from the disposal of this property and accordingly this amount was reinstated on the Corporation's books in 2001.
29 GUYANA SUGAR CORPORATION INC. notes to the consolidated financial statements for the year ended 31st December 2002 13.
TAXATION Current year Corporation Tax Deferred Tax Withholding Tax Property Tax Prior year under/(over) provision Property Tax Reconciliation of corporation tax expense and accounting profit: Accounting (loss) Corporation tax @35% Add: Tax effect of expenses not deductible in determining taxable profits Depreciation for accounting purposes Defined benefit cost Others Deduct: Tax effect of depreciation for tax purposes Interest and dividend Tax loss utilised during the year Tax/ (effect of loss) COMPANY GROUP 2002 $M 245 (493) (248) 4 188 2 (54) 2001 $M (421) (421) 35 166 (146) (366) 2002 $M 245 (503) (258) 5 189 4 (60) 2001 $M 17 (421) (404) 35 166 (146) (349) COMPANY GROUP 2002 $M (364) (127) 664 396 — 933 (410) (11) (267) 245 2001 $M (1,235) (432) 765 11 47 391 (483) (18) (110) 2002 SM (371) (130) 665 396 1 932 (410) (10) (267) 245 2001 $M (1,202) (421) 765 11 46 401 (483) (15) (97) The Corporation has a tax liability/(tax effect of loss) of $245M (2001 ($110M)).
The effect of tax losses utilised/(available) during the year were $267 M (2001 ($110M) 14.

INVESTMENTS The Corporation holds 36.8% of the share capital of Lochaber Limited which is deemed to be a controlling interest.

The investment is valued at original cost.

The Corporation's share of accumulated earnings of Lochaber Ltd. as at 31st December, 2002 amounted to $25M (2001 $40M).
30 GUYANA SUGAR CORPORATION INC. notes to the consolidated financial statements for the year ended 31st December 2002 Annual Report 2002 COMPANY GROUP 15.

ADJUSTMENT TO OPENING RESERVES 2002 SM Recognition of defined benefit pension liability Deferred tax on recognition of defined benefit pension liability 2002 SM 2001 $M 13,791 (4,827) 8,964 2002 2001 16.

DEFINED BENEFIT PENSION LIABILITY There is no Pension Scheme for Subsidiary Company.
(a) The amounts recognised in the balance sheet are as follows: Senior Staff Junior Staff Scheme Scheme SM SM Total SM Senior Staff Junior Staff Scheme Scheme $M SM 2001 $M 13,791 (4,827) 8,964 Total $M Defined benefit obligation Fair value of assets 5,327 18,502 (4,648) 23,829 (4,648) 4,295 (4,203) 13,699 — 17,994 (4,203) Present value of unfunded contributions Unrecognised loss 679 18,502 (3,674) (585) 19,181 (4,259) 92 13,699 13,791 Defined benefit liability 94 14,828 14,922 92 13,699 13,791 (b) Reconciliation of opening and closing defined benefit liability Defined benefit liability at beginning of year 92 13,699 13,791 Add net pension cost Less company contribution/benefits paid 195 (193) 1,456 (327) 1,651 (520) Net pension cost 2 1,129 1,131 Defined benefit liability at end of year 94 14,828 14,922 (c )The amounts recognised as staff costs in the profit and loss account are as follows: Current service cost Interest on defined benefit obligation Expected return on Plan Assets 198 295 (298) 507 949 705 1,244 (298) Total included in staff costs 195 1,456 1,651 (d) Actual return on Plan Assets Expected return on Plan assets Actuarial gain on Plan Assets Actual return on Plan Assets 298 43 341 298 43 341 31 notes to the consolidated financial statements for the year ended 31st December 2002 16.
DEFINED BENEFIT LIABILITY (cont'd) (e) Actuarial Assumptions (i) Funded Scheme Discount rate Salary increases Pension increases Rate of return on Pension Plan assets (ii) Unfunded Scheme Discount rate Salary increases Pension increases Rate of return on Pension Plan assets 2002 $M 6 % 6 % 2 % 6.5 % 6 % 6 % 5 % N/A 2001 $M 7% 7% 2% 7% 7 % 6 % 5 % N/A COMPANY GROUP 17.
CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES 2002 $M 2001 $M 2002 $M 2001 Expenditure authorised by the Directors but not committed 2,577 1,722 2,577 1,722 Contrary to previous practice, the Commissioner of Internal Revenue in 2000 sought to assess the Corporation on additional income for the years of assessment 1995, 1996 and 1997 arising from the remission of sugar levies by the Government of Guyana for the years 1994, 1995 and 1996.
The Corporation does not accept this amended tax treatment and objected to the computations on the grounds that the levies have been correctly treated for tax purposes.

No provision has been made in the financial statements for taxation arising from any such computations as the Corporation has been advised that they would be incorrect.

18. CREDIT, INTEREST RATE AND CURRENCY EXPOSURE Exposure to credit, interest rate and currency risk arises in the normal course of the Corporation's business.
Credit risk The Corporation has exposure to credit buyers of sugar.

Management has a credit policy in place and exposure to credit risk is monitored on an ongoing basis.

Credit evaluations are performed on all customers requiring credit.

All buyers have consistently paid on time.

Investments are only allowed in liquid securities and only with counterparties which have a credit rating of AA or better.
Given these high credit ratings management does not expect any counterparty to fail to meet its obligations.

At the Balance Sheet date there were no significant concentrations of credit risk.

Interest rate risk The Corporation has no interest-bearing liabilities except for a government debenture.The rate of interest on the debenture is fixed and there is therefore no interest rate risk.

The Corporation obtains competitive quotations before investing funds.
32 e."4 &'° t51.c- GUYANA SUGAR CORPORATION INC. notes to the consolidated financial statements for the year ended 31st December 2002 Annual Report 2002 18. CREDIT, INTEREST RATE AND CURRENCY EXPOSURE (cont'd) Currency risk The Corporation incurs currency risk on sales and purchases which are denominated in a currency other than the Guyana dollar.The Corporation seeks to minimise exposure to currency risk by entering into forward contracts and other hedge instruments .
The currencies giving rise to this risk are primarily the Euro, US dollar and pound sterling.

At the reporting date the Corporation had assets in foreign currency consisting of cash and trade accounts receivable and liabilities consisting of trade accounts payable.The foreign currency assets considerably exceeded the foreign currency liabilities, as is normal throughout the year.
Foreign trade accounts receivable and payable at balance sheet date are as follows: (i) Trade accounts receivable US$ Euro (ii) Trade accounts payable US $ Sterling COMPANY GROUP 2002 $000' 5,070 951 14 34 2001 WOO.

1,479 6,316 236 80 2002 $000' 5,070 951 2001 $000' 1,479 6,316 14 34 236 80 As at the balance sheet date the Corporation had entered into forward contracts to sell 88M Euros relating to 2003 sales at an average rate of US$/Euro = .9763 .
Subsequent to the balance sheet date 53M Euros relating to 2004 sales were sold forward at an average rate of US$/Euro = 1.07.

This represents 100% and 60% of sales contracted into Europe in 2003 and 2004 respectively denominated in Euros.

19.

RELATED PARTIES Booker Tate a company incorporated in the United Kingdom manages the Corporation under an agreement dated March 26, 1996.

Under this agreement Booker Tate receives a fixed fee, a production incentive fee and reimbursement of certain expenses.
The amounts paid to Booker Tate under the agreement were as follows: • COMPANY GROUP 2002 SPA 96 163 194 453 2001 $M 94 89 211 394 2002 SPA 96 163 194 453 2001 $M 94 89 211 394 Fixed fee (E350,000) Production incentive fee Expenses Total 20.

PENDING LITIGATION There are several actions for which the liability of the Corporation, if any, has not been determined.The maximum potential liability at the end of the year is estimated at $205M.
An amount of $83M was provided for in the financial statements.
33 VAMY `M. GUYANA SUGAR CORPORATION INC. ten year review 4- HECTARES HARVESTED TONNES CANE MILLED (`000) YIELDS ESTATE - TONNES CANE/HECTARE
 TONNES CANE/TONNE SUGAR ESTATE - TONNE SUGAR/HECTARE PRODUCTIONS (TONNES) SUGAR MOLASSES HOME CONSUMPTION SUGAR MOLASSES EXPORT SUGAR MOLASSES SALES LOCAL SUGAR ($M) AVERAGEPRICE/ TONNE($) EXPORT SUGAR($M) AVERAGE PRICE/ TONNE ($) AVERAGE PRICE/ TONNE (US$) MOLASSES ($M) AVERAGE PRICE/ TONNE ($) EXPENDITURE ($M) EMPLOYMENT COST MATERIAL AND OTHER SERVICES 761
 (LOSS)/PROFIT BEFORE TAX ($M) 4,120 (LOSS)/PROFIT BEFORE TAX AND LEVY 529 (LOSS)/PROFIT AFTER TAX($M) (LOSS)/PROFIT AFTER TAX BEFORE LEVY 3.888 1,101 4,129 691 3,719 702 3,602 320 3,220 674 5,315 224 4,865 680 2,680 228 2,228 860 2,680 271 2,271 2,073 3,873 1,258 3.058 60 1,060 (504) 496 (1.235) (1,235) (869) (869) (198) (198) (155) (155) AVG MID MARKET EXCHANGE RATE (G$ / US$ ) 126.66 138.20 136.50 140.50 140.13 152.94 181.00 185.00 189.38 191.27 34 rt 4 notes Annual Report 2002 35 notes SHERHASSA PROSr5HS 4 4