Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698075890610.pdf (Guyana)
GUYANA SUGAR CORPORATION INC.
ANNUAL REPORT 2011 Table of Contents Financial Matters Agriculture Operation Environmental Matters Factory Operation Corporate Social Responsibilities National Contributions Markets 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 B C C C E F G 1 3 Financial Matters The Corporation continues its effort towards profitability.
Overall revenue for the year was G$32.6 bln, compared to G$26.2 bln.

This increase was attributed towards increase sales to the European market and management initiatives.

Whilst the Corporation strives for profitability, this is continuously hampered by aged machineries and equipment.

The Corporation has recorded a loss of G$13.8 bln for 2011, compared to G$7.3 bln for 2010.

Efforts were made to have greater productivity from the flagship estate, Skeldon.
It was hopeful that the state of the art factory would have contributed significantly to the Corporation’s profitability, but this expectation was not met since there were many challenges with the factory.

The Corporation continues to work along with suppliers to ensure that their obligations are met within a reasonable timeframe.

The Corporation’s cash and bank balances have slightly declined from G$1.1 bln in 2010 to G$1.0 bln in 2011, due to efforts to settle outstanding payments.
Agricultural Operations The Corporation plans for the year 2011 to be a year of consolidation.

Many of the programmes initiated during the previous year have begun to yield results that should give direction to agriculture operations in the medium term.

Despite the lack of achievement of the projected yields in plant cycles, the sustainability of ratoon yields has been a major challenge.
The Department’s scientists have contributed monitoring and advisory support to estates where necessary in crop maintenance.

Considerable emphasis continues to be placed on the High Quality recurrent Selection Programme, which is being run with close cooperation with the High Quality programme of the West Indies Sugar Central Sugarcane Breeding Station that has begun to produce results that have received attention from sugarcane breeders around the world.
The Demerara Crossing Programme extended for a period of 13 weeks, during which 458 crosses comprising 18 bi- parental, 99 high qualities, 331 open poly and 10 multipurpose crosses were accomplished.

Two hundred and ninety three (293) distinct parents were utilized in 2011 crossing season, sixty one (61) being from the Demerara series, two hundred and fifteen (215) Demerara Barbados, four (4) Barbados and thirteen (13) WI and foreign varieties.
The department continues to face considerable setbacks with its varietal development programme due primarily to unavailability of prepared fields.

The year commenced with 4.6Ha available for mechanical tillage operation and as the year progressed 24.82 Ha was added.

At the conclusion of the year only 4.6 Ha was prepared, allowing for the establishment and advancement of the stages previously mentioned.
The department was also not exempted from the shortage of labour affecting the corporation; especially harvesters, which resulted in 35.7 percent of the 45.18 Ha of canes, budgeted for harvest being carried over to the following year.

A 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 Drainages 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.
The importance of the biological control programme for containing the spread of Diatraea sp.

is now widely appreciated and this is obvious by the emphasis that was placed by most estates on the management of insectaries and rearing and release of the Cotesia flavipes bio-control agent.
The laboratory production and field releasing of the Diatraea spp parasitoid; Cotesia flavipes, continued successfully on most estates across the Industry during the year 2011 and as a result contributed significantly to the management and control of the major stem borer insect pest; Diatraea spp.

A total of 8,189,880 Cotesia adults was produced from nine (9) Insectaries.
Ninety- five percent (95%) of production was released in the sugarcane eco-system across the industry and this resulted in an average of 40% field parasitism in Diatraea infested fields as revealed from monthly field recovery surveys.

Rodent infestation and its damaging effects in sugarcane cultivation across the industry, once again revealed damages generally below economic threshold with no reports of widespread or endemic infestations or isolated threatening incidence of widespread high populations.
However, the usual upsurges, seasonal increases in infestation were evident in some sections and/or fields at rat endemic locations.

Factory Operations The sugar production for 2011 totalled 236,505 tonnes.

This represented 84% of the January latest estimate of 282,712 tonnes.

Rose Hall factory was the best of the operating units with 101% achievement, while Skeldon only produced 60% of its estimates.

This was mainly due to weather and factory related problems at this location.
The industry average weekly grinding hours was 94 hours.

Excellent performances were seen from Blairmont and Rose Hall.

Cane shortages at the Demerara locations are the main reason for factory underutilization.

Notwithstanding the intermittent grinding pattern at some locations due to cane shortages, several factory efficiency parameters were surpassed, however final molasses purity continued to be above the desired level.
Extensive factory equipment failure due to design flaws, poor quality equipment and shortages of water are the main reasons for Skeldon poor performance and high mechanical downtime.

However, the time lost due to strikes decreased by 57% over 2011, significantly improved labour/industrial relations.

Also notably, factory time loss did decrease at Skeldon Factory by 21% as well at Blairmont and Uitvlugt Factories by 43% and 17% respectively.
B 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  Makes the Community sports 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.
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.
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 increased by 24.5% in 2011 due to the increase of 7% in production levels.

C Table 1.
Revenue by Markets for 2011 Markets Europe North America Caribbean Guyana Other Markets Total Revenues (G$m) 19,569 1,997 6,462 4,291 359 32,678 D Production figures Ten Year Review 2002 to 2011 Operation 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 HECTARES HARVESTED 41,627 41,959 45,447 41,890 42,422 39,757 44,262 43,556 36,510 45,411 TONNES CANE MILLED ('000) 3,708 3,382 3,744 3,005 2,975 3,099 2,767 2,764 2,762 3,196 YIELDS: ESTATE - TONNES CANE / HECTARE TONNES CANE /TONNE SUGAR 80.60 72.75 74.87 65.43 64.48 71.97 57.71 57.50 66.32 62.58 11.20 11.03 11.52 12.20 11.46 11.55 12.16 11.67 12.51 13.51 TONNE SUGAR / HECTARE 7.29 6.59 6.45 5.36 5.63 6.23 4.75 4.93 5.30 4.63 PRODUCTION (TONNES) SUGAR 331,052 302,378 325,317 246,071 259,549 266,482 226,267 233,736 220,818 236,505 MOLASSES HOME CONSUMPTION (TONNES): SUGAR MOLASSES EXPORT (TONNES): SUGAR MOLASSES SALES: DOMESTIC SUGAR ($M) 1,066 1,286 1,319 1,335 1,644 1,673 1,595 1,906 2,273 1,884 AVERAGEPRICE / TONNE($) 51,556 52,428 55,723 58,601 70,245 71,252 68,328 76,857 101,757 94,079 EXPORT SUGAR ($M) 22,562 25,094 25,288 21,324 25,509 27,101 23,777 24,398 18,332 23,954 AVERAGE PRICE / TONNE
 ($) 79,886 80,469 87,498 92,835 107,332 110,676 115,832 112,067 93,652 113,601 AVERAGE PRICE / TONNE (US$) 417 418 439 465 538 545 570 552 462 558 MOLASSES ($M) 1,177 1,373 1,265 1,637 1,914 1,667 1,306 1,815 1,815 3,428 EMPLOYMENT COST 14,449 16,207 16,444 14,710 16,067 17,373 17,580 15,571 15,787 18,518 MATERIALS AND SERVICES (LOSS) / PROFIT BEFORE TAX ($M) (LOSS) / PROFIT BEFORE TAX AND LEVY (LOSS) / PROFIT AFTER TAX($M) (LOSS) / PROFIT AFTER TAX BEFORE LEVY AVERAGE MID MARKET 7,496 7,754 7,220 8,408
 9,485 8,958 10,858 10,629 11,565 12,626 (328) (1,130) 1,220 (1,188) 2,429 2,159 (6,210) (1,949) (5,136) (11,232) (328) (4,006) 1,220 (1,188) 2,429 2,159 (6,210) (1,949) (5,136) (11,232) (274) (1,429) 261 (1,866) (274) (4,305) 261 (1,866) 476 476 630 (4,089) (1,323) (7,387) (13,896) 630 (4,089) (1,323) (7,387) (13,896) EXCHANGE RATE (G$ /US$ ) 191.27 192.33 199.28 199.75 199.50 202.99 203.34 202.99 202.83 203.63 E Board of Directors Dr. Nanda Gopaul Chairman Mr. Paul Bhim Chief Executive Officer Dr. Raj Singh Member Mr. Keith Burrowes Member Mr. J. Raghurai Member Mrs. Geeta Singh-Knight Member F REPORT OF THE DIRECTORS For the year ended 31st December, 2011 The Directors of the Guyana Sugar Corporation Inc. present their report together with the audited financial statements for the year ended 31st December, 2011.
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 13-40.

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 F. 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 14.2.3 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.


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.

G 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.

H 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 I