CONTENTS Company Information 2 The Vision Statement 3 Mission Statement 4 Notice of Annual General Meeting 5 Chairman's Review 8 Directors' Report 9 Financial Highlights 14 Statement of Compliance with Listed Companies ( Code of Corporate Governance) Regulation, 2019 15 Independent Auditor's Review Report To the Members of Dewan S ugar Mills Limited 17 Independent Auditor's Report to the Member of Dewan S ugar Mills Limited 18 Statement of Financial Position 21 Statement of Profit or Loss 22 Statement of Comprehensive Income 23 Statement of Cash Flows 24 Statement of Changes in Equity 25 Notes to the Financial Statements 26 Pattern of S hare Holding 56 6467 Form of Proxy | |
ANNUAL REPORT 2025 | |
COMPANY INFORMATION EXECUTIVE DIRECTORS Ishtiaq Ahmad - Chief Executive Officer Ghazanfar Baber S iddiqi NON-EXECUTIVE DIRECTORS Abdul Basit - Chairman Board of Directors S yed Maqbool Ali Nida Jamil Mehmood-ul-Hassan Asghar INDEPENDENT DIRECTOR Aziz-ul-Haque COMPANY SECRETARY Muhammad Hanif German CHIEF FINANCIAL OFFICER Muhammad Ilyas Abdul S attar AUDITORS Feroze S harif Tariq & Co. - Chartered Accountants COST AUDITORS UHY Hassan Naeem & Co. LEGAL ADVISOR A.K. Brohi & Company Advocates AUDIT COMMITTEE Aziz-ul-Haque Chairman S yed Maqbool Ali Member Abdul Basit Member HUMAN RESOURCE & REMUNERATION COMMITTEE Aziz-ul-Haque Chairman Ghazanfar Baber S iddiqi Member Abdul Basit Member BANKERS National Bank of Pakistan MCB Bank Limited S ummit Bank Limited Meezan Bank Limited Habib Bank Limited The Bank of Punjab Standard Chartered Bank Pakistan Limited Dubai Islamic Bank Pakistan Limited The Bank of Khyber Limited Bank Islami Pakistan Limited REGISTERED OFFICE: CORPORATE OFFICE Dewan Centre, 3-A Lalazar, Beach Hotel Block-A, 2nd Floor Road, Karachi-74000, Pakistan. Finance & Trade Centre S hahrah-e-Faisal, Karachi, Pakistan. SHARE REGISTRAR / TRANSFER AGENT BMF Consultants Pakistan (Pvt.) Limited Annum Estate Building, R oom No. 310 & 311, 3rd Floor, 49, Darul Aman S ociety. Main S hahrah-e-Faisal, Adjacent Baloch Colony, Karachi, Pakistan. FACTORY Jillaniabad, Budho Talpur, Taluka: Mirpur Bathoro District: S ujawal S indh, Pakistan. WEBSITE https://www.yousufdewan.com | ||
ANNUAL REPORT 2025 | 02 | |
Ỹhe Cicion Statement "The vision of Dewan S ugar Mills Limited is to become leading market player in the S ugar S ector". | |
03 | ANNUAL REPORT 2025 |
Miccion Statement The Mission of Dewan S ugar 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. | ||
ANNUAL REPORT 2025 | 04 | |
NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that 44th Annual General Meeting of Dewan Sugar Mills Limited ("DSML" or "the Company") will be held on Monday, January 26, 2026, at 12:00 noon. at Dewan Cement Limited Factory S ite, at Deh Dhando, Dhabeji, District Malir, Karachi, Pakistan; to transact the following businesses upon recitation from Holy Qur'aan and other religious recitals:
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. S ubject 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. | |
05 | ANNUAL REPORT 2025 |
p.m. Members can casttheir votes any time in the period.
According to section 119 of the Companies Act, 2017 and Regulation 19 of the Companies (General Provisions and Forms) Regulations, 2018, all physical S hareholders 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 S hare Registrar at their address M/s. BMF Consultants Pakistan (Private) Limited, Located at Anum Estate Building, R oom No. 310 & 311, 3rd Floor, 49, Darul Aman S ociety, Main S hahrah-e-Faisal, adjacent to Baloch Colony Bridge, Karachi, email (bmfconsultantspakistan@ gmail.com) immediately to avoid any noncompliance of law or any inconvenience in future. | ||
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In accordance with the directive issued by the S ECP Vide S RO 452 (1)/2025 dated 17th March 2025 the Company would like to inform all the shareholders that no gifts will be distributed atthe AGM. | |
07 | ANNUAL REPORT 2025 |
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 settherein. The Board of Directors comprises individuals with diversified knowledge who endeavor to contribute towards the goal of the Company with the bestof 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 setfor the Company. During financial year ended S eptember 30, 2025 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 31, 2025 Place: Karachi | ||
ANNUAL REPORT 2025 | 08 | |
DIRECTORS' REPORT 2025 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 our privilege to present the annual audited financial statements of your company for the year ended 30th September 2025. Financial performance of your company is summarized below:
FINANCIAL RESULTS2025 | 2024 | |
Amount in Rs. | ||
Net Sales (Rs.) | 1,296,929,074 | 2,483,411,983 |
Gross (Loss) (Rs.) | (994,876,478) | (453,609,395) |
(Net Loss) after tax (Rs.) | (572,398,335) | (608,932,260) |
After a suspension of operations for the crushing season 2023-2024, Sugar plant had resumed its operations on 22nd January 2025 for the crushing season 2024-2025. Sugar mill was made operative for 24 days but due to technical and sugar cane availability issues could not remain operative for longer duration of time and have not achieved desired results in the period under review. By the grace of Almighty after required maintenance and overhauling of the sugar plant the crushing has been commenced for the season 2025-26 subsequent to balance sheetdate.
Distillery OperationsThe plant produced 2,519 MT of industrial alcohol, as compared to 8,902 MT of last year. Factors contributing to the low ethanol production were its global pricing, economic recession, Government policies and prices of gasoline those made ethanol a less competitive alternative fuel worldwide. This led to reduced blending of ethanol with gasoline, thereby decreasing the overall ethanol production.
For the period under review, operating loss of distillery unit is Rs. 275.724 million as against the operating loss of Rs. 184.612 million in the comparable year. The major factor for unfavorable results of the unit was lower production of ethanol by 72% than that of last year and increased feed stock cost which have also negatively impacted the results of the unit. Being the export business, the prospects are brightfor the days to come.
Board & Panel OperationsChip Board plant has produced 67,650 sheets during the year under review, as compared to 33,630 sheets last year. However, because of prevailing unfavorable economic situation we could not avail better results. Managementis 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 segmentwill yield positive results.
09 ANNUAL REPORT 2025Polypropylene Operations Due to unviable situation this plant is not operating atthe 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 S indh at Karachi wherein it has been strongly contested that filing of executions is unjust and against the law. Managementexpects favorable outcome therefrom. The financial statements have been prepared on going concern assumption as the Company is in negotiations with its lenders for further restructuring of principle amounts of liabilities (without the requirement of payment of markup, if any,) which is at fast pace and is expected to be finalized soon, which will further streamline the funding requirements of the Company which will ultimately help the management to run the operations smoothly with optimum utilization of production capacity. In continuation of required maintenance and over hauling of the sugar plant in last year, the current year's maintenance and over hauling has also been completed and Company has commenced sugar cane crushing for the season 2025-26 subsequent to balance sheet date. As the conditions mentioned in the foregoing paragraph are temporary and would reverse therefore the preparation of financial statements using going concern assumption is justified. Therefore, the preparation of financial statements using going concern assumption is justified, as explained in note, 1.2 to the financial statements. The company is not making provision of markup on long term and short-term borrowings from banks since S eptember 30, 2018 due to the fact that under restructuring terms proposed to the financial institutions as fully disclosed in note 16, 17, and 26.1 to the financial statements, the liabilities will be restructured atprincipal amounts only. FUTURE OUTLOOK OF SUGAR INDUSTRY FOR 2025-2026 The sugar industry holds a pivotal and multi-faceted importance for the economy and society of Pakistan, functioning as one of the country's largest Agro-based industries. The industry faces a cautiously optimistic outlook with challenges and potential growth areas. According to forecasts, Pakistan's sugar production is expected to potential increase of over13% to 15% raging 6.6 million to 7.5 million tons. This major increased expected in province of Punjab while S indh's production and under cultivation faced declines due to weather condition. This enhances due to 1.7% increase cultivation area in province of Punjab which share 67% of national output. Domestic consumption expected to increase because of increase in population and food processing industries' demand. E nding stock of refined white sugar having some surplus position and a more balanced supply-demand scenario. The sector continues to face the challenges related to market manipulation, hoarding and price fixing by cartels, other major challenge critically low irrigation water supplies and current dry conditions limiting factor for future cane area expansion and yield improvement. CORPORATE SOCIAL RESPONSIBILITIES We are also committed to Corporate S ocial Responsibility (CS R) and integrating sound social practices in our day-to-day business activities. CS R 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. | ||
ANNUAL REPORT 2025 | 10 | |
HEALTH, SAFETY AND ENVIRONMENT
Environmental protection issues are always considered on higher priority. Your Company produces all its products from renewable crops and raw materials and does not believe in making profit at the cost of damage to our environment. Energy conservation and aiming for 'zero`wastes are our key environment friendly policies. Company is regularly maintaining the existing greenery and improving environment at the plants and we believe that natural environment supports all human activity. Effluent water is treated before its disposal and work safety equipment's are provided to the employees to prevent any unwarranted incidentand first aid equipment and ambulance is also in place to meetsuch situations.
CORPORATE AND FINANCIAL REPORTING FRAMEWORK:The financial statements for the year ended S eptember 30, 2025, prepared by the management of the company, present fairly its state of affairs, the results of its operations, cash flow and changes in equity;
Proper books of accounts of the company have been maintained;
Appropriate accounting policies have been consistently applied in preparation of financial statements for the year ended S eptember 30, 2025 and accounting estimates are based on reasonable and prudent judgment.
International Financial Reporting Standards (IFRS ) as applicable in Pakistan, have been followed in preparation of financial statements and departure there from, if any, has been adequately disclosed in the financial statements.
The system of internal control is sound in design and has been effectively implemented and monitored;
The Management has explained their views in detail regarding the going concern ability of the company in note 1.2 and non-provisioning of markup in note 17.1 and note 32.1 of the annexed financial statements.
There has been no material departure from the best practice of the corporate governance, as detailed in the listing regulations of the stock exchange of Pakistan;
S ummarized key operating and financial data of lastsix years is enclosed with the report;
The fair value of the Provident Fund's Investment as at June 30, 2025 was Rs.68.900 million (2024: Rs.82.470 million).
The Board of Directors comprises individuals with diversified knowledge with endeavor to contribute towards the aim of the Company with the best of their abilities. The Board of Directors as of S eptember 30, 2025 consisted of the following:
Directors | Numbers | |
a) | Male | 6 |
b) | Female | 1 |
Composition | Numbers | |
a) | Independent Director | 1 |
b) | Other Non-executive Directors | 4 |
c) | Executive Directors | 2 |
During the year four meetings of the Board were held. The attendance of directors was as follows:
Members of the Board of Directors | Number of meetings attended |
Mr. Abdul Basit | 4 |
Mr. Ghazanfar Babar S iddiqi | 4 |
Mr. S yed Maqbool Ali | 4 |
Mr. Mehmood-ul-Hassan Asghar | 4 |
Mr. Ishtiaq Ahmad | 4 |
Mrs. Nida Jamil | 4 |
During the year four meeting of the audit committee were held with the chair of Mr. Aziz-ul-Haque. Members' attendance in these meetings is as under:
Members of the Committee | Number of meetings/Eligibility to attended Meetings |
Mr. Aziz-ul Haque | 4 |
Mr. S yed Maqbool Ali | 4 |
Mr. Abdul Basit | 4 |
Human Resource and Remuneration Committee was established by the Board to assist the Directors in discharging their responsibilities with regard to devising and periodic reviews of human resource policies. It also assists Board in selection, evaluation, compensation and succession planning of key managementpersonnel.
During the year one meeting of the human resource committee with the chair of Mr. Aziz-ul Haque was held.
Members of the Human Resources | Number of meetings attended |
Mr. Aziz-ul Haque | 1 |
Mr. Ghazanfar Babar S iddiqi | 1 |
Mr. Abdul Basit | 1 |
The present auditors, M/s. Feroze S harif Tariq & Co, Chartered Accountants, would retire at the conclusion of the currentAnnual General meeting and have offered themselves for re-appointment.
CONTRIBUTION TO NATIONAL EXCHEQUERDuring the year, your Company has made contribution to the national exchequer of Rs.113.826 million under the head of S ales Tax, Custom Duty, and Income Tax and other statutory duties & levies.
DIVIDENDDue to accumulated losses and the circumstances explained above, your management is not in a position to propose any payout.
ANNUAL REPORT 2025 12
EARNING PER SHARE (EPS) The loss per share is Rs (6.25), (2024 Rs. (6.65). PATTERN OF SHAREHOLDING The prescribed Pattern of shareholdings of the Company is attached atthe end of this report. VOTE OF THANKS The Board places on record its gratitude to its valued shareholders, Federal and Provincial Government functionaries, banks, financial institutions, suppliers and farmers for their continued co-operation, support and patronage. The Board would also like to thank company's executives, staff members and workers for standing shoulder to shoulder with the managementin these difficult times. We wish and pray thatwith this team's hard work and dedication; your Company will be out of this difficult situation very soon. CONCLUSION In conclusion, we bow beg and pray to Almighty Allah, Rahman-o-Rahim, in the name of our beloved Prophet, Mohammad, may Allah peace be upon him, for continued showering of His Blessings, Guidance, Strength, Health and Prosperity on our Company, Country and Nation; and also pray to Almighty Allah to bestow peace, harmony, brotherhood and unity in true Islamic spirit to the whole of Muslim Ummah, Ameen S umma-Ameen. LO-MY LORD IS INDEED HEARER OF PRAYER (AL-QURAN) For and on behalf of the Board of Directors Ishtiaq Ahmad Abdul Basit CEO & Director Chairman Board of Director Date: December 31, 2025 Place: Karachi | |
13 | ANNUAL REPORT 2025 |
(Rupees in Thousand)
2025 | 2024 | 2023 | 2022 | 2021 | 2020 | |
TURNOVER | 1,401,396 | 2,526,018 | 6,526,540 | 9,158,241 | 6,380,749 | 4,117,144 |
LESS GOVT. LEVY & COMMISSION | 104,467 | 42,606 | 319,749 | 703,464 | 422,053 | 292,359 |
SALES (NET) | 1,296,929 | 2,483,412 | 6,206,791 | 8,454,777 | 5,958,696 | 3,824,785 |
GROSS (LOSS) | (994,876) | (453,609) | (84,778) | (139,844) | (538,515) | (640,976) |
(LOSS) BEFORE TAX | (656,408) | (674,515) | (899,389) | (822,102) | (802,335) | (921,010) |
(LOSS) AFTER TAX | (572,398) | (608,932) | (863,655) | (758,822) | (795,113) | (886,326) |
GROSS ASSETS EMPLOYED | 7,941,607 | 9,010,629 | 8,579,774 | 8,558,167 | 8,783,671 | 6,792,920 |
CURRENT ASSETS | 924,222 | 1,579,833 | 2,567,698 | 2,255,976 | 1,917,539 | 2,007,517 |
SHAREHOLDERS EQUITY | (1,263,916) | (661,441) | (1,297,995) | (557,941) | 200,881 | (737,471) |
LONG TERM DEBTS & DEFERRED | 2,050,805 | 2,146,276 | 1,723,011 | 1,839,023 | 1,929,459 | 1,277,490 |
LIABILITIES | ||||||
CURRENT LIABILITIES | 7,154,718 | 7,525,794 | 8,154,758 | 7,277,086 | 6,653,331 | 6,252,901 |
GROSS (LOSS)(%) | (76.71) | (18.27) | (1.37) | (1.65) | (9.04) | (16.76) |
DEBT/EQUITY RATIO (Times) | ||||||
CURRENT RATIO | 0.13 | 0.21 | 0.31 | 0.31 | 0.29 | 0.32 |
NUMBER OF SHARES ISSUED | 91,511,992 | 91,511,992 | 91,511,992 | 91,511,992 | 91,511,992 | 91,511,992 |
EARNINGS PER SHARE | (6.25) | (6.65) | (9.44) | (8.29) | (8.69) | (9.69) |
PRODUCTION | ||||||
SUGAR - VOLUME IN (TONS) | 3,009 | - | 20,568 | 50,790 | 33,936 | 24,375 |
POLYPROPYLENE- VOLUME IN (TONS) | - | - | - | - | - | - |
BOARD & PANEL- NO.OF SHEETS | 67,650 | 33,630 | 67,970 | 104,310 | 183,210 | 122,895 |
ETHANOL- VOLUME IN (TONS) | 2,519 | 8,902 | 19,511 | 32,236 | 26,061 | 18,807 |
ANNUAL REPORT 2025 14
STATEMENT OF COMPLIANCE WITH LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATION, 2019 FOR THE YEAR ENDED SEPTEMBER 30, 2025 The company has complied with the requirements of the Regulations in the following manner:
| |
15 | ANNUAL REPORT 2025 |
The board has formed committees comprising of members given below:
a) Audit Committee :
Mr. Aziz-ul-Haque S yed Maqbool Ali Mr. Abul Basit
Chairman Member Member
b) HR and Remuneration Committee :
Mr. Aziz-ul-Haque
Mr. Ghazanfar Baber S iddiqi
Mr. Abdul Basit
Chairman Member
Member
The terms of reference of the aforesaid committees have been formed, documented and advised to the committee for compliance.
The frequency of meetings (quarterly/half yearly/yearly) of the committee were as per following:
Audit Committee : 4 meetings during the financial year ended
S eptember 30, 2025
HR and Remuneration Committee : 1 annual meeting held during the financial year
ended S eptember 30, 2025
The board has set up an effective internal audit function. The staffs are considered suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the company.
The statutory auditors of the company have confirmed that they have been given a satisfactory rating under the quality control review program of the ICAP and registered with Audit Oversight Board of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the ICAP.
The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the Act, these regulations or any other regulatory requirement and the auditors have confirmed that they have observed IFAC guidelines in this regard.
We confirm that all other requirements of the Regulations 3, 6, 7, 8, 27,32, 33 and 36 of the Regulations have been complied with; and
E xplanation for non-compliance with requirements, other than regulations 3, 6, 7, 8, 27, 32, 33 and 36 are below:
S.No.
Non-Mandatory Requirement
Reg No.
Explanation
1
Directors' Training.-
19
All the Directors are required to acquire the prescribed
Currently, four Directors are
certification under Director's Training Program.
qualified under the directors
training program, The Company
is encouraging and planning to
arrange DTP certification for the
remaining Directors.
Abdul BasitChairman Board of Director
Ishtiaq AhmadCEO & Director
Date : December 31, 2025 Place : Karachi
INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF DEWAN SUGAR MILLS LIMITEDANNUAL REPORT 2025
16
Review Report on the Statement of Compliance contained in Listed Companies (Code of Corporate Governance) Regulations, 2019
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance) Regulations, 2019 (the Regulations) prepared by the Board of Directors of Dewan S ugar Mills Limited (the Company) for the year ended S eptember 30, 2025 in accordance with the requirements of regulation 36 of the Regulations.
The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our responsibility is to review whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of the Regulations and report if it does not and to highlight any non-compliance with the requirements of the Regulations. A review is limited primarily to inquiries of the Company's personnel and review of various documents prepared by the Company to comply with the Regulations.
As a part of our audit of the financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider whether the Board of Directors' statement on internal control covers all risks and controls or to form an opinion on the effectiveness of such internal controls, the Company's corporate governance procedures and risks.
The Regulations require the Company to place before the Audit Committee, and upon recommendation of the Audit Committee, place before the Board of Directors for their review and approval, its related party transactions We are only required and have ensured compliance of this requirement to the extent of the approval of the related party transactions by the Board of Directors upon recommendation of the Audit Committee.
Following instances of non-compliances with the requirements of the Code were observed which are not stated in the Statementof Compliance.
It is mandatory that each listed company shall have at least two or one third members of the Board, whichever is higher, as independent directors; but there is only one independent director, Mr. Aziz ul Haque serving as independent director on the board of the Company. Further, Mr. Aziz ul Haque in our view not meet the criteria of independence on account of his cross directorship in associated companies; accordingly, due to the foregoing reasons, the requirements of Chairman of Audit and Human Resource and Remuneration Committee to be an independent director has not been Complied with by the Company
Based on our review, except for the above instances of non-compliance, nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Company's compliance, in all material respects, with the requirements contained in the Regulations as applicable to the Company for the year ended S eptember 30, 2025.
Further, we highlight the following instances of non-compliances with the requirements of the codes as reflected in the paragraph reference where these are stated in the statementof compliance;
One of the directors of the Company is serving as a director in more than seven listed companies as disclosed in the Paragraph 3 of the Statementof Compliance; and
The board of Directors includes only one independent director, which is below the limit of one third of the board, as required by regulations as disclosed in Paragraph 2 to the Statementof Compliance.
As disclosed in Paragraph 9 and 19 of the Statement of Compliance four directors are qualified under the directors' training program which is less than the prescribed criteria of the directors' training program as by S eptember 30, 2025 all the directors are required to acquire prescribed certification.
UDIN: CR 2025101615lpgys0QU
Audit Engaging Partner: Mohammad Ghalib Dated: January 2, 2026
Place: Karachi
17 ANNUAL REPORT 2025CHARTERED ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DEWAN SUGAR MILLS LIMITED Report on the Audit of the Financial Statements Adverse Opinion We have audited the annexed financial statements of Dewan S ugar Mills Limited (the Company), which comprise the statement of financial position as at S eptember 30, 2025, and the statement of profit or loss, Statement of comprehensive income, the statement of changes in equity, the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of the audit. In our opinion and to the best of our information and according to the explanations given to us, because of the significance of the matters described in Basis for Adverse opinion Paragraph, the statement of financial position, the statement of profit or loss, Statement of comprehensive income, the statement of changes in equity and the statement of cash flows together with the notes forming part thereof do not conform with the accounting and reporting standards as applicable in Pakistan and do not give the information required by the Companies Act, 2017 (XIX of 2017), in the manner so required and respectively do not give a true and fair view of the state of the Company's affairs as at S eptember 30, 2025 and of the loss and other comprehensive Income, the changes in equity and its cash flows for the year then ended. Basis for Adverse Opinion We conducted our audit in accordance with International Standards on Auditing (IS As) as applicable in Pakistan. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the company in accordance with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe thatthe audit evidence we have obtained is sufficientand appropriate to provide a basis for our adverse opinion. a) The financial Statements which indicate in note 1.2 to the financial statements that as of S eptembers 30, 2025 the company incurred a loss after taxation of Rs. 572.398 (2024: Rs. 608.932) million and as of that date it has negative revenue reserves amounting to Rs. by Rs. 6.242 (2024: Rs. 5.895) billion which resulted in negative equity of Rs. 1.264 billion (2024: 661.441 million) and its current liabilities exceeded its current assets by Rs. 6.230 (2024: Rs. 5.946) billion without provided markup of Restructured and other liabilities and as refer in below para (b) and (c). The Company has defaulted in repayments of installments of earlier restructured longterm liabilities as disclosed in para (b) below and short-term finance facilities had expired and not renewed by the banks amounting to Rs. 192.196 million, and therefore the company not utilizing its full capacity of sugar unit and shut down of polypropylene unit since long time due to working capital constraints. Further, the financial institution filled suit for execution of decree as disclosed in note 26.1 to the financial Statements. Accordingly, the financial institutions have not been provided bank confirmations as at reporting date this shows restructuring proposal of the company had not been accepted by the lenders till the reporting date. These conditions lead us to believe that the going concern assumption used in preparation of these financial statements is inappropriate; consequently, the assets and liabilities should have been stated at their realizable and settlement amounts respectively.
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ANNUAL REPORT 2025 | 18 | |
made the provision of mark up in the financial statements. Further during the year, the company not made Provision for the restructured long term and short-term liabilities amounting to Rs. 297 (2024: Rs. 410.777) million in the financial Statements as disclosed in note 32.1 to the financial Statements. Had the provisions for the mark up, as discussed in preceding paragraph (b), been made in these financial statements, the loss after taxation would have been higher by Rs. 2.484 billion and markup payable would have been higher and shareholders' equity would have been lower by Rs. 2.484 billion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined that there are no key audit matters to communicate in our report other than the matters described in the basis for adverse opinion section. Information Other than the Financial Statements and Auditor's Report Thereon Management is responsible for the other information. The other information comprises the information in the annual report including, in particulars, the chairman's review, directors report, financial and business highlights, but does not include the financial statements and our auditor's reports thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have concluded thatthe other information is materially misstated for the same reason with respectto the matters described in the basis for adverse opinion section. Responsibilities of Management and Board of Directors for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Accounting and Reporting Standards as applicable in Pakistan and requirements of companies Act 2017 (XIX of 2017, and for such internal control as management determines is necessary to enable the preparation of financial statements thatare free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Board of Directors are responsible for overseeing the company's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee thatan audit conducted in accordance with IS As as applicable in Pakistan will always detecta material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with IS As as applicable in Pakistan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
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19 | ANNUAL REPORT 2025 |
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated the Board of Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory RequirementsBased on our audit except for the matter discussed in basis for adverse opinion section, we further report that in our opinion:
Proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX of 2017);
because of the matters described in Basis for Adverse Opinion section, the statement of financial position, the statement of profit or loss, Statement of comprehensive income, the statement of changes in equity and the statement of cash flows together with the notes thereon have not been drawn up in conformity with the Companies Act, 2017 (XIX of 2017) however, the same are in agreement with the books of account and returns;
Investments made, expenditure incurred and guarantees extended during the year were for the purpose of the Company's business; and
No Zakatwas deductible atsource under the Zakatand Ushr Ordinance, 1980 (XVIII of 1980). The engagementpartner on the audit resulting in this independent auditor's report is Mohammad Ghalib.
UDIN: AR 202510161TMpd023BN
Dated: January 2, 2026 Place: Karachi
CHARTERED ACCOUNTANTS
ANNUAL REPORT 2025 | 20 |
AS AT SEPTEMBER 30, 2025
ASSETS
NON-CURRENT ASSETS
Sep-25 Sep-247,017,385,670 |
128,568,504 362,804,886 52,302,058 185,735,613 8,287,571 170,962,102 -15,561,036 |
924,221,770 |
7,941,607,440 |
1,300,000,000 |
915,119,920 (6,242,246,904) 4,063,211,332 |
(1,263,915,652) 469,855,641 - -1,580,948,957 |
4,122,746,793 12,009,624 192,195,875 769,544 2,622,150,702 204,845,956 |
7,154,718,494 - |
7,941,607,440 |
Property, Plant and E quipment 4 7,430,796,330 CURRENT ASSETS | ||
Stores, Spares and Loose Tools | 5 | 139,965,049 |
Stock-in-Trade | 6 | 709,818,109 |
Trade Debts - Unsecured, Considered Good | 7 | 42,562,034 |
Loans, Advances and Other Receivable - Unsecured, | ||
Considered Good | 8 | 489,478,252 |
Trade Deposits, S hort-Term Prepayments and Current | ||
Balances with Statutory Authorities | 9 | 11,943,415 |
Income Tax Refunds and Advances | 157,938,211 | |
S hort Term Investment - Related Party | 10 | - |
Cash and Bank Balances | 11 | 28,127,543 |
1,579,832,613 | ||
TOTAL ASSETS | 9,010,628,943 | |
EQUITY AND LIABILITIES | ||
SHARE CAPITAL AND RESERVES | ||
Authorized Capital | ||
130,000,000 (2024: 130,000,000) Ordinary S hares of Rs. | ||
10/- each | 1,300,000,000 | |
Issued, S ubscribed and Paid-up Capital | 12 | 915,119,920 |
Reserves and S urplus | 13 | (5,895,008,738) |
S urplus on Revaluation of Property, Plant & E quipment | ||
(Net) | 14 | 4,318,447,864 |
(661,440,954) | ||
NON-CURRENT LIABILITIES Sponsors Loan - Unsecured | 15 | 461,075,498 |
Long Term Finance | 16 | - |
Long Term Interest Payable | 17 | - |
Deferred Liabilities | 18 | 1,685,200,496 |
CURRENT LIABILITIES | ||
Trade and Other Payables - Unsecured | 19 | 4,503,287,733 |
Interest, Profit, Mark-up Accrued on Loans and Other | ||
payables | 20 | 12,009,624 |
S hort Term Finances - S ecured | 21 | 192,195,875 |
Unclaimed Dividend | 22 | 769,544 |
Current Portion of Non-Current Liabilities | 23 | 2,632,929,321 |
Provision for Taxation | 24 | 184,601,806 |
7,525,793,903 | ||
CONTINGENCIES & COMMITMENTS | 26 | - |
TOTAL EQUITY AND LIABILITIES | 9,010,628,943 | |
The annexed notes form an integral part of these financial statements | ||
CEO & Director
Muhammad Ilyas Abdul SattarChief Financial Officer
Abdul BasitChairman Board of Director
21 ANNUAL REPORT 2025STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED SEPTEMBER 30, 2025 Notes Sales - Net 27 Cost of Sales 28 Gross (Loss) Administrative and General E xpenses 29 Distribution and S elling Costs 30 Other Operating Income/(Loss) 31 (Loss) from Operations Finance Cost 32 Impairment of Plant & Machinery -polpropylene unit Provision for obsolescence and slow moving stocks and stores 5 Levies 33 Taxation 34 (Loss) after Tax (Loss) Per Share - Basic 35 The annexed notes form an integral part of these financial statements Ishtiaq Ahmad Muhammad Ilyas Abdul Sattar CEO & Director Chief Financial Officer | Sep-25 Sep-24 (Rupees) 1,296,929,074 2,483,411,983 (2,291,805,552) (2,937,021,378) (994,876,478) (453,609,395) (70,195,987) (88,644,101) (23,383,194) (109,800,404) 497,256,350 69,839,327 (591,199,309) (582,214,573) (50,921,027) (66,819,719) (642,120,336) (649,034,292) - (14,756,426) (14,285,389) (10,724,260) (656,405,725) (674,514,978) (20,244,150) (18,601,806) (676,649,875) (693,116,784) 104,251,540 84,184,524 (572,398,335) (608,932,260) (6.25) (6.65) Abdul Basit Chairman Board of Director | ||
ANNUAL REPORT 2025 | 22 | ||
FOR THE YEAR ENDED SEPTEMBER 30, 2025
Sep-25 Sep-24 (Rupees)(Loss) for the year (572,398,335) Items that will not reclassify to profit or loss | (608,932,260) | |
Other Comprehensive Income | ||
Amortization interest income/(R eversal) (30,076,363) | (32,718,461) | |
(602,474,698) | (641,650,721) | |
S urplus on revaluation of Property, Plant & E quipment - | 1,774,114,463 | |
Related Deferred tax - | (495,909,994) | |
- | 1,278,204,469 | |
Total Comprehensive (loss)/ income for the year (602,474,698) | 636,553,748 | |
The annexed notes form an integral part of these financial statements |
CEO & Director
Muhammad Ilyas Abdul SattarChief Financial Officer
Abdul BasitChairman Board of Director
23 ANNUAL REPORT 2025STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 2025
Cash Flow from Operating Activities Sep-25 Sep-24(656,405,725) |
414,081,322 50,921,027 14,285,389 - |
479,287,738 (177,117,987) |
(2,888,843) 347,013,223 (9,740,024) 303,742,639 3,655,844 (380,540,939) |
261,241,900 |
(13,023,891) (382,878) |
(13,406,769) |
70,717,144 (670,661) |
(670,661) |
(10,778,619) (71,834,371) |
(82,612,990) |
(12,566,507) 28,127,543 |
15,561,036 |
(Loss) Before Taxation Adjustment for non-cash and other items: | (674,514,978) |
Depreciation | 361,832,702 |
Financial Charges | 66,819,719 |
Provision for obsolescence and slow moving stock & stores | 10,724,260 |
Impairment of Plant & Machinery | 14,756,426 |
454,133,107 | |
(220,381,871) | |
Changes in Operating Assets and Liabilities | |
(Increase) / Decrease in Current Assets | |
Stores and Spares | 7,376,687 |
Stock in Trade | 822,324,568 |
Trade Debts | (16,328,400) |
Loans and Advances | 187,882,033 |
Trade Deposits, Prepayments & Other Balances | (1,231,972) |
Increase / (Decrease) in Current Liabilities | |
Trade and Other Payables | (647,565,915) |
352,457,001 | |
Taxes Paid | (28,679,546) |
Financial Charges Paid | (184,970) |
(28,864,516) | |
Net Cash Flows from Operating Activities | 103,210,614 |
Cash Flow from Investing Activities Fixed Capital E xpenditure | (21,195,101) |
Net Cash Out Flows from Investing Activities | (21,195,101) |
Cash Flow from Financing Activities | |
Long Term Loan | -- |
Sponsor Loan | (87,813,549) |
Net cash flows from financing activities | (87,813,549) |
Net Decrease in Cash and Cash equivalent | (5,798,036) |
Cash and Bank Balances at Beginning of the year | 33,925,579 |
Cash and Cash equivalent at the end of the year | 28,127,543 |
The annexed notes form an integral part of these financial statements. | |
CEO & Director
Muhammad Ilyas Abdul SattarChief Financial Officer
Abdul BasitChairman Board of Director
ANNUAL REPORT 2025 24
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED SEPTEMBER 30, 2025 Issued, Revaluation Subscribed & General Accumulated Surplus on Total Reserve Profit/( Loss) Property, Plant & Paid-up Capital Equipment -----------------------------------------(Rupees)----------------------------------------- Balance as on October 1, 2023 915,119,920 190,000,000 (5,649,464,949) 3,246,350,327 (1,297,994,702) (Loss) for the Year - - (641,650,721) - (641,650,721) Revluation during the year Net of tax - - - 1,278,204,469 1,278,204,469 Incremental Depreciation transferred from Surplus on Revaluation of Property, Plant & Equipment - Net of tax - - 206,106,932 (206,106,932) -Balance as on S eptember 30, 2024 915,119,920 190,000,000 (6,085,008,738) 4,318,447,864 (661,440,954) Balance as on October 1, 2024 915,119,920 190,000,000 (6,085,008,738) 4,318,447,864 (661,440,954) (Loss) for the period - - (602,474,698) - (602,474,698) Incremental Depreciation transferred from Surplus on Revaluation of Property, Plant & Equipment - Net of tax - - 255,236,532 (255,236,532) - Balance as on S eptember 30, 2025 915,119,920 190,000,000 (6,432,246,904) 4,063,211,332 (1,263,915,652) The annexed notes form an integral part of these financial statements Ishtiaq Ahmad Muhammad Ilyas Abdul Sattar Abdul Basit CEO & Director Chief Financial Officer Chairman Board of Director | |
25 | ANNUAL REPORT 2025 |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2025
The financial statements of the company for the year ended S eptember 30, 2025 reflect net loss after taxation of Rs 572.398 million (2024: Rs.608.932 million) and Accumulated negative reserves Rs.6.242 (2024:5.895) billion its current liabilities exceeded its current assets by Rs. 6.230 (2024 Rs.5.946) billion. The Company defaulted in repayment of its restructured long term liabilities due to liquidity crunch faced by the Company and the entire restructured liabilities along with markup eligible for waiver (as disclosed in note 16, 17 and 21, 26.1 to the financial statements) have become immediately repayable, short term loan has not been renewed by the Banks. These conditions indicate the existence of material uncertainty which may cast significant doubt about the company's ability to continue as a going concern, therefore the company may not be able to realize its assets and discharge its liabilities during the normal course of business. The financial statements have been prepared on going concern assumption as the Company is in negotiations with its lenders for further restructuring of its liabilities which is at fast pace and is expected to be finalized soon, which will further streamline the funding requirements of the Company which will ultimately help the management to run the operations smoothly with optimum utilization of production capacity. In continuation of required maintenance and over hauling of the sugar plant in last year, the current year's maintenance and over hauling has also been completed and Company has commenced sugar cane crushing for the season 2025-26 subsequent to balance sheet date. As the conditions mentioned in the foregoing paragraph are temporary and would reverse therefore the preparation of financial statements using going concern assumption is justified.
These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan with the exception of departure of IFRS as mentioned in note 32.1 to the financial statements, for which the managementconcludes that provisioning of mark-up would conflict with the objectives of the financial statements. The accounting and reporting standards applicable in Pakistan comprise of: a) International Financial Reporting Standard (IFRS ) issued by the International Accounting Standards Board (IAS B) as notified under the Companies Act, 2017; | ||
ANNUAL REPORT 2025 | 26 | |
The preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. Estimates and judgments are continually evaluated and are based on historic experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. | |
27 | ANNUAL REPORT 2025 |
3 | In the process of applying the Company's accounting policies, management has made the following estimates and judgments which are significant to the financial statements:
The Company reviews the Net Realizable Value (NRV) of stock-in-trade to assess any diminution in the respective carrying values.
The company reviews carrying amount of assets annually to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amount is estimated and impairment losses are recognized in the statementof Profitor Loss. MATERIAL ACCOUNTING POLICIES The accounting policies adopted in the preparation of these financial statements are consistent with those of the previous financial year and set out below.
Provision in respect of current year's taxation is based on the method of taxation prescribed under the Income Tax Ordinance, 2001, whereby taxable income is determined, and tax charged at the current rates of taxation after taking into account tax credits, rebates available, if any, and the income falling under the presumptive tax regime, or the minimum tax liability is determined on a whichever is higher basis, and in the eventof a current or accumulated carried forward tax loss. | ||
ANNUAL REPORT 2025 | 28 | ||
Deferred Deferred tax is provided, using the balance sheet liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amount for financial statement reporting purposes. Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, tax credits and unused tax losses can be utilized. Deferred tax liabilities are generally recognized for all temporary taxable differences. Levy The tax charged under Income Tax Ordinance, 2001 which is not based on taxable profit or any amount paid/ payable in excess of the calculation based on taxable income is classified as levy in the statement of profit or loss as these levies fall under the scope of IFRIC 12 /IAS 37.
All expenditures connected with specific assets and incurred during development, installation and construction period are carried as capital work-in-progress. These are transferred to the specific assets as and when these assets are available for commercial or intended use. | |
29 | ANNUAL REPORT 2025 |
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