Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698075934411.pdf (Guyana)
GUYANA SUGAR CORPORATION INC.
ANNUAL REPORT 2012 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 B C C D E F G 1 3 Financial Matters The Corporation’s financial strategies of sourcing more cost effective materials and services while maintaining quality; maximizing on the credit terms from suppliers; negotiating better contracts with customers in terms of reduced credit periods while still being competitive; following up on timely collection of debts; and monitoring costs on a weekly basis continued in 2012 to counteract the low production levels which affected the Corporation’s liquidity.
Entering 2012 our local consortium of banks continued to provide working capital of $3.1bln In 2011 the Corporation sourced US$17m in crop financing from its bankers, Citibank.

However, in 2012 the Corporation did not enter into a Crop Financing contract with any foreign banks due to increased interest rates.

Instead the Corporation negotiated advances from its Caricom customers and temporary increases in its local overdraft facility at Republic Bank (Guyana) Limited.
The Government of Guyana also provided G$4bln.

Our Caricom customers (Trinidad and Suriname), Republic Bank (Guyana) Limited and the Government of Guyana provided much needed support to the Corporation during its challenging times.

The Corporation; however, managed to negotiate payment terms in US currency with our European Customer, Tate and Lyle, who was bought over by American Sugar Refining Inc., thereby eliminating the EU/US$ foreign exchange risk.
Cash and Bank balance improved from G$1.0bln in 2011 to G$1.3bln in 2012.

The Corporation was able to reduce its loss from G$13.8bln in 2011 to G$1.4bln in 2012, partly due to cost reduction.

Agricultural Operations The very wet conditions in the first crop of 2012 combined with Industrial Relations issues and low labour turn out negatively impacted production and agricultural activities during the year.

The 2012 production of 218,069 tonnes fell well short of the June 2012 budget of 236,310 tonnes.
A total of 6,309 hectares (ha) was replanted against a budgeted replanting programme of 14,361 ha, a 44% achievement.

76% of the replanting were done in the second crop of 2012.

Unavailability of prepared lands, because of adverse climatic conditions, especially in the first crop, contributed to lower than budgeted achievement.

In order to supplement the replanting programme, supplying is done.
Supplying is the filling of gaps with seed cane (planting material) in a ratoon field that has been harvested and allowed to go through another cycle to maturity.

This operation is quite similar to planting operations and can only be done manually.

It is done in the fields where gaps exceed 15%.

Workers will manually take the planting material into the fields; use a hand fork to till the gaps (blank spots) before inserting the planting material into the soil.
A The land preparation achievement level was 51% of the budget; 7,356 hectares completed versus 14,395 hectares budgeted.

Loss of opportunity days due to persistent heavy rains contributed to the lower than budgeted achievement.

80% of this achievement were in the second crop.

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 Irrigation which have a direct impact of the country’s water management system.

These actions are done throughout the coastal areas on a daily basis by the Corporation’s employees.
In the central analytical & environmental monitoring laboratory, fifty-four thousand and three hundred and ninety-two (54,392) analyses were conducted on ten thousand nine hundred and ninety-five (10,995) samples during the year.

The majority of these analyses were required for the monitoring of routine operations and research projects carried out by the Corporation’s Agriculture and Factory Departments.
2012 production was higher than 2011 production by approximately 14 %, which was due to an increase in foliar and water sampling.

In the soil and plant nutrition areas, repeated trials in soil management blocks across the industry were continued and monitored during 2012.

However, the harvesting and monitoring of most of the trials across the Industry were severely affected by the unfavorable weather experienced over the period under review.
There was some return to normalcy during second crop 2012 where some trials were successfully harvested.

Factory Operations The total quantity of canes processed by the industry in 2012 amounted to 2,710,242.68t, which yielded 218,068.68t sugar and 107,617t molasses.

That is a cane to sugar (TC: TS) of 12.43 and a molasses % cane of 3.77.

The industry achieved a milling rate of 125.27 tonnes per hour and a factory time efficiency of 91.03.

The average grinding period for the industry was 32.61 weeks.
Total volume of cane milled was 2,710,043t.

Hours lost due to industrial strikes were 1,547 hours for the Industry.

The average grinding time per week in 2012 was 94.78 hours, an increase of 0.94hrs from 2011.

However, this is below the budget of 130 hours /week.

The production of sugar in 2012 was 218,069, a drop of 18,437 tonnes from 2011 due to adverse climatic conditions, which affected both the yield and the cane quality.

B Skeldon produced 26,675.775 tonnes sugar in the second crop of 2012.
This is the highest second crop production since the commissioning of the new factory in 2008.

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 employees 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 of anyone in the community  Make 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.
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 aby product from the Sugar cane production and the sale of it provids some much needed income for the Corporation.
Total Revenue fell by a mere G$60m in 2012, compared to 2011.

C Table 1.

Revenue by Markets for 2012 Markets Europe North America Caribbean Guyana Other Markets Total Revenues (G$m) 21,057 2,334 4,633 4,486 108 32,618 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.

level of The Sugar Corporation employs approximately 17,000 persons directly.
This employment directly affects about 80,000 persons.

Guyana Sugar Corporation In.

continues to be the single largest employer of the Cooperative Republic of Guyana.
D Production figures Ten Year Review 2003 to 2012 Operation 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 HECTARES HARVESTED 41,959 45,447 41,890 42,422 39,757 44,262 43,556 36,510 45,411 43,616 TONNES CANE MILLED ('000) YIELDS: 3,382 3,744 3,005 2,975 3,099 2,767 2,764 2,762 3,196 2,710 ESTATE - TONNES CANE / HECTARE 72.75 74.87 65.43 64.48 71.97 57.71 57.50 66.32 62.58 55.31 TONNES CANE /TONNE SUGAR 11.03 11.52 12.20 11.46 11.55 12.16 11.67 12.51 13.51 12.43 TONNE SUGAR / HECTARE PRODUCTION (TONNES) 6.59 6.45 5.36 5.63 6.23 4.75 4.93 5.30 4.63 4.45 SUGAR 302,378 325,317 246,071 259,549 266,482 226,267 233,736 220,818 236,505 218,068 MOLASSES HOME CONSUMPTION (TONNES): 127,201 138,140 115,732 107,501 115,048 99,280 109,598 122,281 132,733 107,617 SUGAR 24,529 23,669 22,781 23,396 23,480 23,345 23,594 22,341 20,031 22,387 MOLASSES EXPORT (TONNES): SUGAR MOLASSES SALES: DOMESTIC SUGAR ($M) 1,286 1,319 1,335 1,644 1,673 1,595 1,906 2,273 1,884 2,048 AVERAGEPRICE / TONNE($) 52,428 55,723 58,601 70,245 71,252 68,328 76,857 101,757 94,079 91,463 EXPORT SUGAR ($M) 25,094 25,288 21,324 25,509 27,101 23,777 24,398 18,332 23,954 26,211 AVERAGE PRICE / TONNE ($) 80,469 87,498 92,835 107,332 110,676 115,832 112,067 93,652 113,601 133,363 AVERAGE PRICE / TONNE (US$) 418 439 465 538 545 570 552 462 558
 654 MOLASSES ($M) 1,373 1,265 1,637 1,914 1,667 1,306 1,815 1,815 3,428 3,129 EMPLOYMENT COST 16,207 16,444 14,710 16,067 17,373 17,580 15,571 15,787 18,518 19,413 MATERIALS AND SERVICES 7,754 7,220 8,408 9,485 8,958 10,858 10,629 11,565 12,626 11,271 (LOSS) / PROFIT BEFORE TAX ($M) (1,130) 1,220 (1,188) 2,429 2,159 (6,210) (1,949) (5,136) (11,232) (1,863) (LOSS) / PROFIT BEFORE TAX AND LEVY (4,006) 1,220 (1,188) 2,429 2,159 (6,210) (1,949) (5,136) (11,232) (1,863) (LOSS) / PROFIT AFTER TAX($M) (LOSS) /
 PROFIT AFTER TAX BEFORE LEVY AVERAGE MID MARKET (1,429) 261 (1,866) 476 630 (4,089) (1,323) (7,387) (11,232) (1,863) (4,305) 261 (1,866) 476 630 (4,089) (1,323) (7,387) (13,896) (1,246) EXCHANGE RATE (G$/US$ ) 192.33 199.28 199.75 199.50 202.99 203.34 202.99 202.83 203.63 203.99 E Board of Directors Dr. Raj Singh Chairman Mr. Paul Bhim Chief Executive Officer Mr. Badrie Persaud Member Mr. Keith Burrowes Member Dr. D. Permaul Member Mrs. Geeta Singh-Knight Member F REPORT OF THE DIRECTORS For the year ended 31st December, 2012 The Directors of the Guyana Sugar Corporation Inc. present their report together with the audited financial statements for the year ended 31st December, 2012.
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 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