Transmission of Annual Report for the Year Ended September 30,2024

COMPANY INFORMATION

EXECUTIVE DIRECTORS

Ishtiaq Ahmad - Chief Executive Officer

Ghazanfar Baber Siddiqi

NON-EXECUTIVE DIRECTORS

Abdul Basit - Chairman Board of Directors

Syed Maqbool Ali

Nida Jamil

Mehmood-ul-Hassan Asghar

INDEPENDENT DIRECTOR

Aziz-ul-Haque

COMPANY SECRETARY

Muhammad Hanif German

CHIEF FINANCIAL OFFICER

Muhammad Ilyas Abdul Sattar

AUDITORS

Feroze Sharif Tariq & Co. - Chartered Accountants

COST AUDITORS

UHY Hassan Naeem & Co.

TAX ADVISOR

Sharif & Company - Advocates

LEGAL ADVISOR

A.K. Brohi & Company Advocates

The Vision Statement

"The vision of Dewan Sugar Mills Limited is to become leading market

player in the Sugar Sector".

03 ANNUAL REPORT 2024

Mission Statement

The Mission of Dewan Sugar Mills Limited is to be the finest

Organization, and to conduct business responsibly

and in a straight forward way.

Our basic aim is to benefit the customers, employees

and shareholders and to fulfill our commitments to the society. Our hallmark is honesty, innovation, teamwork of our people and our ability to respond effectively to change in all aspects of life including technology, culture and environment.

We will create a work environment, which motivates, recognizes

and rewards achievements at all levels of the Organization

because

In Allah We Believe & In People We Trust

We will always conduct ourselves with integrity

and strive to be the best.

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that 43rd Annual General Meeting of Dewan Sugar Mills Limited will be held at Dewan Cement Limited Factory Site, at Deh Dhando, Dhabeji, District Malir, Karachi, Pakistan on Monday, January 27, 2025 at 12:00 noon. to transact the following businesses;

1. To confirm the minutes of the preceding Annual General Meeting of the Company held on Saturday, January 27, 2024;
2. To receive, consider, approve and adopt the annual audited financial statements of the Company for the year ended September 30, 2024, together with the Directors' and Auditors' Reports thereon;
3. To confirm the appointment of the Statutory Auditors of the Company for the year ended September 30, 2025, and to fix their remuneration;
4. To consider any other business with the permission of the Chair.

By order of the Board

Muhammad Hanif German

Company Secretary

Karachi: January 02, 2025

NOTES:

1. The share transfer books of the company will remain closed from January20, 2025 to January 27, 2025 (both days inclusive). Transfers received in order at the share registrar office M/s. BMF Consultants Pakistan (Private) Limited, Located at Anum Estate Building, Room No.310 & 311,3rd Floor,49, Darul Aman Society, Main Shahrah-e-Faisal, adjacent to Baloch Colony Bridge, Karachi, Pakistan.
2. A member entitled to attend and vote at this meeting may appoint another member as his/her proxy to attend the meeting and vote for his/her behalf. proxies in order to be effective must be received at the Shares Registrar Office duly stamped and signed not less than 48 hours (Working days only) before the time of holding of the meeting.
   CDC Account Holder will further have to follow the guidelines as laid down in Circular 1 dated January 26,2000 issued by Securities and Exchange commission of Pakistan for attending the meeting and appointment of proxies.
3. members are requested to promptly communicate the change in their addresses, if any, to the Company's share registrar.
4. Electronic Transmission of Financial Statements Etc.:
   SECP through its notification No. SRO 787(1)/2014 dated September 8, 2014 has allowed companies to circulate Annual Audited Financial Statements along with Notice of Annual General Meeting through email instead of sending the same through post, to those members who desires to avail this facility. The members who desire to opt to receive aforesaid statements and notice of AGM through e-mail are requested to provide their written consent on the Standard Request Form available on the Company's website: http://www.yousufdewan.com/Dsml/index.html

05 ANNUAL REPORT 2024

1. Video Conference Facility:
   Pursuant to the provisions of the Companies Act, 2017, member can avail video conference facility to participate in this Annual General Meeting provided that the company receives consent from the members holding in aggregate 10% or more shareholding, residing in a city, at least seven (7) days prior to the date of meeting. Subject to the fulfillment of the above conditions, members shall be informed of the venue along with complete information necessary to access the facility. Format of request form has been placed on the Company's website.
2. Attendance through Zoom:
   The members may attend the AGM online through ZOOM, by following the below guidelines:
3. 1. The member shall get himself/herself registered by sending his/her request to the Company at e-mail ID dsml.corp@yousufdewan.com as per Standard Request Form available on the Company's website (http://www.yousufdewan.com/DSML/index.html or can send his/her request to the Company Secretary at Dewan Centre, 3-A Lalazar Beach Hotel Road Karachi along with a legible copy of CNIC not later than January 25, 2025.
   1. Zoom link shall be sent by the Company only on email ID or Mobile/WhatsApp Number mentioned in Standard request Form.
4. Deposit of physical Shares into CDC Account;
   As per section 72 of the Companies Act,2017 every existing company shall be required to replace its physical shares with book-entry form in a manner as may be specified and from the date notified by the commission, within a period not exceeding four years from the commencement of the Act i.e May 30,2017.
   The physical Shareholders having physical shareholding are encouraged to open CDC Investor Account with CDC or CDC Sub-Account with any of the brokers to place their physical shares into Script less form.
5. E-VotingProcedure
6. 1. Details of the e-voting facility will be shared through an email with those members of the Company who have their valid CNIC numbers, cell numbers, and email addresses available in the register of members of the Company within due course.
   2. The web address, login details, will be communicated to members via email.
   3. Identity of the members indenting to case vote through E-voting shall be authenticated through authenticated login.
   4. E-Votinglines will start from January 20, 2025 at 10 a.m. and shall close on January 26, 2025 at 5 p.m. Members can cast their votes any time in the period.

1. Postal Ballot
   For voting through Postal Ballot members may exercise their right to vote as per provisions of the Companies (Postal Ballot) Regulations, 2018 subject to the requirement of Section 143 and 144 of the Companies Act, 2017. Further details in this regard will be communicated to the shareholders within the legal time frame as stipulated under these said Regulations, if required.
   The members shall ensure that duly filed and signed ballot paper along with copy of CNIC should reach the Chairman of the meeting through post on the Company's Registered office or email at dsml.corp@yousufdewan.com one day before the Annual General Meeting i.e. January 26, 2025 during the working hours. The signature on the ballot paper shall match with the signature on CNIC or Company records.
2. Particulars of Physical Shareholders:
   According to section 119 of the Companies Act, 2017 and Regulation 19 of the Companies (General Provisions and Forms) Regulations, 2018, all physical Shareholders are advised to provide their mandatory information such as CNIC number, address, email address, contact mobile/telephone number, International Bank Account Number (IBAN), etc. to Company's Share Registrar at their address M/s. BMF Consultants Pakistan (Private) Limited, Located at Anum Estate Building, Room No. 310 & 311, 3rd Floor, 49, Darul Aman Society, Main Shahrah-e-Faisal, adjacent to Baloch Colony Bridge, Karachi, email (bmfconsultantspakistan@gmail.com) immediately to avoid any non- compliance of law or any inconvenience in future.

CHAIRMAN'S REVIEW

I am pleased to present a report on the overall performance of the Board of Directors and efficiency of the role played by the board in achieving the Company's objectives.

The Board of Directors is accountable for managing the Company's affairs, which formulate all significant policies and strategies. The Board is governed by appropriate laws & guidelines and its obligation, rights, responsibilities and duties as are defined and set therein.

The Board of Directors comprises individuals with diversified knowledge who endeavor to contribute towards the goal of the Company with the best of their abilities.

An annual evaluation of the Board of Directors of the Company is carried out. The purpose of the assessment is to ensure that the Board's overall performance and effectiveness is measured and benchmarked against expectations in the context of objectives set for the Company.

During financial year ended September 30, 2024 four board meetings were held. The Board of Directors of the Company received agendas and supporting material in advance prior to the Board and its committee meetings. The non-executive and independent directors are equally involved in key decisions.

The Board's overall performance and effectiveness for the year under review was satisfactory and I wish the company successful years ahead.

Abdul Basit

Chairman Board of Director

Date: December 30, 2024

Place: Karachi

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DIRECTORS' REPORT 2024

IN THE NAME OF ALLAH; THE MOST GRACIOUS AND MERCIFUL

IF YE GIVE THANKS, I WILL GIVE YOU MORE (HOLY QURAN)

Dear Shareholders

On behalf of the Board of Directors, it is my privilege to present the annual audited financial statements of your company for the year ended 30th September 2024. Financial performance of your company is summarized below:

FINANCIAL RESULTS

PLANT PERFORMANCE REVIEW

Sugar Operations:

During 2023-24 our Sugar plant could not be operated due to technical problems and operational difficulties. The decision was reached after a thoughtful review considering technical issues and time constraints. In the meanwhile, the management of your Company has undergone the required maintenance and over hauling of the sugar plant before resuming its crushing operation for upcoming season and will inshallah succeed to bring the plant in operations again.

Distillery Operations

The plant produced 8,902 MT of industrial alcohol, as compared to 19,511 MT of last year. Factor contributing low ethanol production was its global pricing, economic recession, Government policies and prices of gasoline those made ethanol a less competitive alternative fuel. This can lead to reduced blending of ethanol with gasoline, thereby decreased the ethanol production.

The period under review operating loss of distillery unit is Rs.184.612 million as against the operating loss of Rs.33.454 million in comparable previous year. Major suffering came due to lower production 45% than that of the last year and increased feed stock cost which negatively impacted results of this unit. Advance from customers in USD created a positive impact by recording exchange gain of Rs.68.673 million as compared to loss of Rs.460.540 million last year, due to stable rupee value. Being the export business, the prospects are bright in this unit for the days to come.

Board & Panel Operations

Chip Board plant has produced 33,630 sheets during the year under review as compared to 67,970 sheets last year. However, because of prevailing unfavorable economic situation we could not avail better results. Management is focused on producing high quality sheets to compete in the market. With increasing economic and construction activities, the management is confident that in coming future this segment will yield positive results.

Polypropylene Operations

Due to unviable situation this plant is not operating at the moment.

Auditors' Observations

The auditors have expressed adverse opinion in their report on going concern assumption, default in repayment of installments of restructured liabilities and related non-provisioning of mark-up as highlighted in their annexed audit report.

The company is facing financial crunch, because of non-availability of working capital from banks. Consequent to default in repayment of restructured liabilities as per compromise agreement, the lenders filed for execution of consent decrees. The Company filed suits in Honorable High Court of Sindh at Karachi wherein it has been strongly contested that filing of executions is unjust and against the law. Management expects favorable outcome therefrom.

Owing to the required maintenance & technical issues, the Sugar Plant was non-operative for the season 2023-24. As of now, the management of your Company has completed the required maintenance and over hauling of the plant and set to go in operations for the season 2024-25. By the grace of Almighty, the company will resume its production activities very soon.

The financial statements have been prepared on going concern assumption as the Company approached its lenders for further restructuring of its liabilities which is in process. Company is hopeful that such restructuring will be effective soon and will streamline the funding requirements of the Company which will ultimately help the management to operate with optimum utilization of production capacity. Therefore, the preparation of financial statements using going concern assumption is justified, as explained in note, 1.2 to the financial statements.

FUTURE OUTLOOK OF SUGAR INDUSTRY FOR 2024-2025

The sugar industry in Pakistan for the 2024-25 season faces a cautiously optimistic outlook with challenges and potential growth areas. According to forecasts, Pakistan's sugar production is expected to increase slightly to about 6.8 million tons, supported by minor expansions in sugarcane cultivation and improved sucrose recovery rates. This increase aligns with growing domestic demand, especially from the food processing sector. However, the government is likely to maintain price and supply regulations to alleviate the inflationary impact of exports on local prices.

Pakistan's sugar industry has shown potential for exports due to surplus production. The Pakistan Sugar Mills Association (PSMA) estimates a 1.5 million tons surplus in 2024-25, which it aims to export, adding $1.2 billion in foreign exchange. Nonetheless, export opportunities are hindered by high domestic prices and regulatory constraints. For example, past price surges led the government to curb exports to stabilize the local market. Still, recent government initiatives against smuggling and the proposed track- and-trace system aim to improve transparency and protect the market.

CORPORATE SOCIAL RESPONSIBILITIES

We are also committed to Corporate Social Responsibility (CSR) and integrating sound social practices in our day-to-day business activities. CSR is an important part of who we are and how we operate. We measure our success not only in terms of financial criteria but also in building customer satisfaction and supporting the communities we serve.

09 ANNUAL REPORT 2024