Transmission of Annual Report for the Year Ended 2025-09-30

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SINDH ABADGAR’S SUGAR MILLS LIMITED

42nd ANNUAL REPORT

2025

COMPANY PROFILE

DIRECTORS Mr. Deoo Mal Essarani Chairman

Dr. Tara Chand Essarani Chief Executive Mr. Mahesh Kumar Director

Mr. Dileep Kumar Director

Mr. Jugdesh Kumar Director

Mr. Mohan Lal Director

Dr. Besham Kumar Director

Mr. Muhammad Siddiq Khokhar Independent Director Mr. Zafar Ahmed Ghori Independent Director Ms. Maheshwari Osha Independent Director

CHIEF FINANCIAL OFFICER Mr. Saqib Ghaffar

COMPANY SECRETARY Mr. Ali Hassan

BANKERS Allied Bank Limited Askari Bank Limited Bank Al-Falah Limited MCB Bank Limited Bank AL Habib Limited United Bank Limited Meezan Bank Limited

HBL Foreign Exch. Bank Limited

AUDIT COMMITTEE Mr. Zafar Ahmed Ghori Chairman Mr. Pehlaj Rai Member

Mr. Dileep Kumar Member

Dr. Besham Kumar Member

HR AND REMUNERATION Ms. Maheshwari Osha Chairman

COMMITTEE Mr. Mohan Lal Member Mr. Dileep Kumar Member

AUDITORS M/s. Rahman Sarfaraz Rahim Iqbal Rafiq Chartered Accountants

REGISTERED OFFICE 209, 2nd Floor, Progressive Plaza, Beaumont Road, Karachi-Pakistan.

MILLS Deh: Deenpur,

Taluka. Bulri Shah Karim, Distt. Tando Muhammad Khan, Sindh-73024.

REGISTRAR JWAFFS Registrar Services (Pvt) Ltd.

Office # 20, 5th Floor, Arkays Square, Ext. New Challi, Shahrah e Liaquat, Karachi.

EMAIL ADDRESS sasm@unitedgroup.org.pk

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NOTICE OF ANNUAL GENERAL MEETING

NOTICE is hereby given that the Annual General Meeting of the Members of Sindh Abadgar's Sugar Mills Limited (the "Company") will be held on Friday, January 23, 2026 at 4:00 PM at the Exchange Auditorium of Pakistan Stock Exchange Building, 2nd Floor, Stock Exchange Road, Karachi-74000, to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and approve the audited financial statements of the Company together with the Directors' and Auditors' reports for the year ended September 30, 2025.

2. To approve cash dividend @ 20%, i.e. Rs. 2 per share, for the year ended September 30, 2025, as recommended by the Board of Directors.

3. To appoint auditors of the Company for the year ending September 30, 2026 and to fix their remuneration.

4. To transact any other business with the permission of the Chair.

By Order of the Board

http://qrto.org/1izfrN

Ali Hassan

Karachi: January 02, 2026 Company Secretary

NOTES

1. Closure of Share Transfer Books

   The Share Transfer Books of the Company will remain closed from Friday, January 16, 2026 to Friday, January 23, 2026 (both days inclusive). Transfers received at the Company's Registered Office or at the Share Registrar's Office, JWAFS Registrar Services (Pvt.) Ltd., Office No. 20, 5th Floor, Arkay Square Extension, New Chali, Shahrah-e-Liaquat, Karachi, at the close of business on January 15, 2026, will be treated in time for the purpose of entitlement to the transferees.

2. Circulation of Annual Report through QR Code and Weblink

   In accordance with Section 223 of the Companies Act, 2017 and SECP's SRO 389(I)/2023 dated March 21, 2023, the Company has obtained shareholders' approval to circulate the Annual Report through QR code and weblink.

3. Proxy

   A member entitled to attend and vote at this meeting is entitled to appoint another member as a proxy to attend and vote on his/her behalf. Proxies must be received at the Registered Office of the Company at least 48 hours before the time of the meeting.

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4. For Identification

   Members are requested to bring their original CNIC or passport. CDC account holders must also bring their Participant ID and CDC account number.

5. Change of Address

   Members are requested to notify any change in their address immediately to the Share Registrar, JWAFS Registrar Services (Pvt.) Ltd., Office No. 20, 5th Floor, Arkay Square Extension, New Chali, Shahrah-e-Liaquat, Karachi.

6. Submission of Copies of Valid CNIC

   CNIC is mandatory for dividend payment. Shareholders holding physical shares are required to submit a copy of their valid CNIC to the Share Registrar.

7. Withholding Tax on Dividend

   • For filers: 15%

   • For non-filers: 30%

     Shareholders are advised to ensure that their names appear on the Active Taxpayers List (ATL) before the book closure.

8. Valid Tax Exemption Certificate

   Tax exemption on dividend shall be allowed only if a valid tax exemption certificate is submitted to the Share Registrar before the book closure.

9. Mandatory Requirement of Bank Details

   Cash dividends shall be paid electronically directly into the shareholders' designated bank accounts.

10. Conversion of Physical Shares into Book-Entry Form

    Shareholders holding physical shares are advised to convert their shares into book-entry form in accordance with applicable regulations.

11. Transmission of Financial Statements and Notices through Email

Financial statements and notices may be transmitted through email, subject to SECP regulations and shareholders' consent.

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CHAIRMAN'S REPORT

On behalf of the Board of Directors, I am pleased to present a review report on the overall performance of the Board and effectiveness of the role played by the Board in achieving the company's objectives under section 192 of the Companies Act, 2017.

The composition of the Board of Directors represents mix of varied backgrounds and rich experience in the field of business, banking etc., more specifically having thorough understanding of sugar industry spanning rich experience of more than 19 years, and are committed to operate at highest standard of Corporate Governance.

The Board provides strategic directions both short term and long term to the Company and guide the management to achieve objectives and goals of the Company. Annual evaluation of the Board of Directors as required under the code of Corporate Governance has been carried out to measure the performance and effectiveness of the Board against the objectives of the Company set at the beginning of the year and report that:

1. The overall performance of the Board for the year under review remained satisfactory.

2. The Directors have performed their duty diligently and honestly in the best interest of the company particularly related to strategic objective of the company and monitoring the actuals against the budget.

3. The Board remained focus on risk management, business growth and future opportunities.

4. The Board had full understanding of the vision and mission statements and frequently revisit them to update with the changing market conditions

5. The Board members attended Board meetings during the year and participated in important Company's matter.

6. The Board undertook an overall review of business risks to ensure effectiveness of internal controls to safeguard assets and interest of the company and its shareholders.

7. The Board members regularly received reports on finances / budgets, production and other important matters which helped them take effective decisions.

8. The Board members were updated with regard to achievement of financial results through regular presentations by the management and Board Meeting and accordingly received directions and oversight on a timely basis.

I would like to thank the Board members for their commitments and devoted priceless time in overcoming the difficulties posed by the continuing weakening of sugar prices.

DEOO MAL ESSARANI

Karachi: 23 December, 2025

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DIRECTORS' REPORT

Dear Members, Assalam-o-Alaikum,

On behalf of the Board of Directors of Sindh Abadgar's Sugar Mills Limited, we are pleased to present the Directors' Report together with the audited financial statements of the Company for the year ended September 30, 2025.

Financial Results:

Financial Performance Review

During the year ended September 30, 2025, the Company recorded a marked improvement in financial performance compared to the previous year, reflecting better operational efficiency and improved cost and financial management.

Net revenue increased to Rs. 6,195.8 million, up by approximately 7.5% from Rs. 5,766.2 million in FY 2024. Gross profit rose significantly to Rs. 588.5 million from Rs. 203.7 million, representing an increase of about 189%, mainly due to better pricing, because of lower production of sugar throughout Pakistan and effective control over cost results.

Operating profit increased to Rs. 485.0 million, compared to Rs. 152.0 million last year, reflecting a growth of approximately 219%, supported by disciplined cost management and improved operating leverage. Finance costs declined substantially by about 55% to Rs. 260.2 million from Rs. 572.8 million, primarily due to reduction in policy rate from 22% to 11% improved cash flow management and reduced reliance on borrowings.

As a result, the Company reported a profit before levies and taxation of Rs. 224.8 million, compared to a loss of Rs. 420.8 million in the previous year. After accounting for levies and taxation, the Company achieved a profit after taxation of Rs. 140.0 million, reversing the loss of Rs. 296.4 million reported in FY 2024.

Earnings per share improved to Rs. 13.43, compared to a loss per share of Rs. 28.43 in the preceding year, indicating a strong recovery in shareholder value.

Overall, the results reflect a positive turnaround in the Company's financial position, and the Board remains focused on sustaining operational efficiencies, prudent financial management, and long-term value creation for shareholders

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Dividend

The Board of Directors, in its meeting held on December 23, 2025, has recommended dividend of Rs. 2 per share ie 20% for the year ended September 30, 2025.

During the 2024–25 crushing season, the Company commenced crushing operations on 21 November 2024 and concluded on 23 February 2025, operating for 95 gross days compared to 87 gross days in the previous season. Despite a longer operating period, net crushing days declined to 74 from 85, primarily due to cane availability constraints and operational stoppages.

Cane Crushing and Throughput

Total sugarcane crushed during the season amounted to 405,205 tons, representing a decline of approximately 22% compared to 521,657 tons crushed in the previous season. Consequently, average daily crushing reduced to 4,265 tons on gross days and 5,452 tons on net days, compared to 5,996 tons and 6,137 tons, respectively, last season. The reduction in throughput reflects lower cane availability and shorter effective crushing duration.

Capacity Utilization

Despite lower crushing volumes, capacity utilization improved to 79%, up from 77% in the preceding season, indicating better operational discipline, plant reliability, and improved scheduling during effective crushing days.

Sugar Production and Recovery

Sugar production declined to 40,450 tons from 56,855 tons, mainly due to reduced cane availability. Also,

sugar recovery declined to 9.981%, compared to 10.90%, last season.

By-product Performance

Molasses production totaled 18,800 tons, compared to 23,320 tons in the previous season, in line with reduced cane crushing.

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Overall Assessment

Overall, the operational performance during the 2024–25 season was impacted by lower cane availability, resulting in reduced crushing and sugar production volumes. Nevertheless, the Company maintained improved capacity utilization and stable processing efficiency, reflecting effective operational management and plant performance. The Board remains focused on improving cane procurement, enhancing recovery, and optimizing plant utilization in future.

Industry Overview

Sugar production across Pakistan for the 2025–26 crushing season has commenced nationwide. Based on initial industry indicators, sucrose recovery is expected to show an improvement compared to the previous season, supported by favorable climatic conditions and improved cane quality.

Preliminary estimates indicate an upside in average recovery of approximately 0.5%, which may enable the industry to touch the national average recovery level of 10% plus. This improvement is primarily attributable to better sucrose content in cane and enhanced agronomic practices at the farm level.

In addition, area under sugarcane cultivation and yield per acre are also projected to improve marginally over the last season. The combined impact of higher recovery rates and improved cane availability is expected to translate into higher overall sugar production volumes, potentially surpassing the production levels recorded in the previous year.

Overall, the industry outlook for the ongoing season remains cautiously optimistic, with improved operational efficiencies and agricultural inputs supporting a favorable production environment.

Corporate Social Responsibility

Corporate Social Responsibility (CSR) reflects the Company's commitment to creating a positive and sustainable impact on society beyond its core business operations. The Company recognizes that its role extends beyond the pursuit of profitability and includes a broader responsibility to address social needs and contribute to the well-being of the communities in which it operates. Through its CSR initiatives, the Company actively participates in improving social welfare and supporting inclusive development.

During the year under review, the Company undertook meaningful initiatives aimed at supporting the health sector, reaffirming its dedication to community well-being. By investing in healthcare-related initiatives, the Company contributes to the development of healthier communities, enhances the quality of life for local populations, and supports objectives aligned with sustainable development. These efforts not only provide immediate assistance to those in need but also create long-term benefits by strengthening social infrastructure, building trust, and enhancing the Company's reputation as a responsible corporate entity.

The Company's focus on CSR in the health sector demonstrates a holistic approach to societal development that goes beyond financial performance. By prioritizing health initiatives, the Company aligns its corporate objectives with a strong sense of social responsibility and contributes to a healthier and more prosperous future. This approach supports community welfare while reinforcing the foundation for sustainable development and long-term positive impact. Through its CSR efforts, the Company continues to uphold its role as a responsible corporate citizen, fostering a resilient society in which both the business and the community can thrive.

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Effect of Company's Operations on the Environment

The Company remains committed to minimizing the environmental impact of its operations through strict compliance with environmental laws, regulatory standards, and industry best practices. Environmental sustainability is integrated into operational processes to promote a safe, clean, and responsible working environment while aligning business activities with long-term environmental stewardship.

During the year, the Company strengthened its sustainability initiatives through the installation of a modern water recycling plant, supporting resource conservation and the responsible use of water. In parallel, efforts to reduce the Company's carbon footprint continue through improved operational efficiency and environmentally conscious practices.

The Company also maintains a strong focus on health, safety, and compliance, regularly reviewing its policies to ensure alignment with evolving standards. Ongoing employee training reinforces a culture of safety and environmental responsibility, safeguarding both workforce well-being and operational integrity.

Future Outlook

Sugarcane production for the 2025–26 crushing season is expected to surpass broadly last season numbers, supported by improved sucrose recovery overall, stable area under cultivation and marginal improvement in yield per acre. Initial industry assessments indicate that overall sugarcane availability may remain adequate; however, regional variations and weather conditions will continue to influence final outcomes.

As of the reporting date, the Sindh Government has not announced an official minimum support price for sugarcane. Market prices, however, have already exceeded prevailing levels of the previous season, primarily due to higher input costs, including fertilizers, fuel, and labor. Elevated sugarcane prices are expected to continue exerting pressure on cash flows and margins, unless corresponding adjustments occur in domestic sugar prices.

On the financial side, the declining interest rate environment is a favorable development. The reduction in six-month KIBOR compared to the prior year is expected to lower borrowing costs and ease finance expense pressures for sugar mills, supporting improved profitability and cash flow management.

Overall, the outlook for the 2025–26 season remains cautiously optimistic. While challenges relating to cane pricing, surplus inventories, and regulatory uncertainty persist, supportive government policies, improved recovery expectations, and a softer interest rate regime may help mitigate risks. The Company remains focused on operational efficiency, prudent financial management, and proactive engagement with stakeholders to navigate industry challenges and create sustainable long-term value.

Board's Evaluation

In accordance with the Code of Corporate Governance, 2019, the Board has implemented a structured evaluation process to assess its overall performance. The evaluation is conducted through a formal questionnaire covering the Board's roles, responsibilities, effectiveness, and oversight functions. All Directors participate in the evaluation, enabling the Board to review its performance, identify areas for improvement, and ensure alignment with good corporate governance practices and the Company's strategic objectives.

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Disclosure on Sustainability Risks and DE&I Practices

The Board of Directors acknowledges its responsibility for the oversight of sustainability-related risks and opportunities, including environmental, social, and governance (ESG) considerations, that may have an impact on the Company's business, financial performance, and long-term value creation.

During the year, the Board reviewed key sustainability-related risks relevant to the Company's operations, including environmental compliance, resource efficiency, workplace health and safety, and emerging climate-related considerations. Appropriate measures have been implemented to manage and mitigate these risks through compliance with applicable laws, adoption of prudent operational practices, and continuous monitoring of operational and environmental performance.

The Board also recognizes the importance of diversity, equity, and inclusion (DE&I) in promoting effective governance and sustainable growth. Policies and practices are in place to promote equal opportunity, fair treatment, and a respectful working environment across the Company. The Company remains committed to fostering diversity within its workforce and management, in line with applicable laws and best practices.

The Board periodically reviews sustainability and DE&I-related matters to ensure alignment with the Company's strategic objectives and regulatory requirements. Relevant disclosures regarding sustainability risks, mitigation measures, and DE&I practice have been included in this Directors' Report in accordance with the requirements of the Code of Corporate Governance, 2019.

Statement on Corporate and Financial Reporting Framework

The Board of Directors is pleased to confirm that:

1. The financial statements, prepared by the Company, present fairly its state of affairs, results of operations, cash flows, and changes in equity.

2. Proper books of accounts of the company have been maintained.

3. Appropriate accounting policies have been consistently applied in the preparation of the Financial Statements, Changes, if any, have been adequately disclosed and accounting estimates are based on reasonable and prudent judgment.

4. International Financial Reporting Standards (IFRS), are applicable in Pakistan, have been followed in preparation of the Financial Statements.

5. The system of Internal Control is sound in design and has been effectively implemented and monitored regularly.

6. There are no significant doubts upon the company's ability to continue as a going concern.

7. There is no material departure from the best practices of the corporate governance, as detailed in the listing regulations.

8. The Statement of Ethics and Business Strategy is prepared and circulated among the directors and employees.

9. The Investments of the Provident Funds have been made in accordance with the provision of section 218 of the companies Act, 2017 and the rules formulated for this purpose. The value of the fund as at

   30th September, 2025 was at Rs. 6,814,472 (unaudited).

10. The boad adopted mission statement and a statement of overall corporate strategy.

11. Key Operating and Financial Data for last six years, I summarized form, in given on page 21.

12. Information about the taxes and levies is given in the notes of Financial Statements.

13. The Pattern of Shareholding and additional information regarding Pattern of Shareholding is given on page 80 and 81.

14. During the year 2024-25 five (5) Meetings of the Board of Directors were held.

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Attendance of each director is as under;

The leave of absence was granted to the Directors who could not attend the meeting due to their preoccupation.

Code of Conduct and Ethics

It is the company's policy to conduct its operations in accordance with the highest business ethical considerations, to comply with all statutory regulations and to conform to the best accepted standards of good corporate citizenship. This policy applies to all director and employees of the company regardless of function, grade of standing.

1. The company's activities and operations are carried out in strict compliance with all applicable laws and the highest ethical standards. The directors and employees ensure that the company deals in the fairness with its customers, suppliers and competitors.

2. In its relations with Governmental Agencies, Customers and Suppliers, the company does not, directly or indirectly; engage in any corrupt business practices.

3. The Director and Employees do not take any advantage of the company's information or property or their position with the company to develop inappropriate gains or opportunities.

Directors' Remuneration Policy

The Board has approved a Directors' Remuneration Policy which described in detail the objectives and transparent procedures for the remuneration package of individual director. The company does not have remuneration policy for non-executive and independent directors except for attending meeting of the board and its committee. The remuneration however, is paid to executive directors based on their annual appraisal. The director's remuneration policy is reviewed and approved by the board from time to time.

Detail of aggregate amount of Executive and Non-Executive Directors are disclosed in note 31 to the Financial Statement.

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Composition of the Board of Directors

Total number of Directors.

• Total Directors: 10 o Male: 09

  o Female: 01

  Composition:

• Independent Directors: 03

• Other Non-Executive Directors: 05

• Executive Directors: 02

  Audit Committee

  The Audit Committee of the company is performing duties with its term of reference as determined by the Board. During the year, four meetings were held.

  Attendance is as follows:

  Name of Director No of Meeting

  attendance

• Mr. Zafar Ahmed Ghori – Chairman 4

• Mr. Besham Kumar – Member 2

• Mr. Dileep Kumar – Member 2

• Mr. Jugdesh Kumar – Member 2

  HR and Remuneration Committee

  The HR and Remuneration Committee of the company is performing its duties with its term of reference as determined by the Board. During the year, one meeting was held. Attendance is as follows:

• Ms. Maheshwari Osha – Chairman (1)

• Mr. Mohan Lal – Member (1)

• Mr. Dileep Kumar – Member (1)

Subsequent Material Events

Material changes or commitments affecting the financial position of the Company occurred after 30th September, 2025 till the issue of this Financial Statement has been reflected in the notes of contingencies

and commitments to the Financial Statements. The company is confident that no adverse financial impact will occur.

Evaluation of the Board of Directors

The Board of Directors has evolved a criterion to measures the performances of each member of the board and its committees. Annual Evaluation as required under the Code of Corporate Governance has been carried out against the criteria / objectives set out at the beginning of the year.

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Statutory Auditors

The present auditors, M/s Rahman Sarfaraz Rahim Iqbal Rafiq, Chartered Accountants, retire and, being eligible, have offered themselves for re-appointment. The Board's Audit Committee has recommended their appointment as statutory auditors for the ensuing year, also.

Acknowledgement

The Board acknowledges the cooperation and continued support of all stakeholders and place on record its gratitude for the dedication of workers and employees of the Company.

At the end, let us pray to Almighty Allah to guide us in all our pursuits for national development and for the betterment of our organization. Ameen.

On behalf of the Board of Directors

———————————— ——————————

Dr. Tara Chand Mahesh Kumar

Chief Executive Officer Director

Date: 23rd December 2025.

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SIX YEARS AT A GLANCE

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