Ansari Sugar Mills Reports Significant Losses Amid Regulatory Challenges

Karachi: Ansari Sugar Mills Ltd has released its 34th Annual Report along with audited accounts for the fiscal year ending September 30, 2023, marking a challenging period for the firm with substantial losses. The Company reported a loss before taxation of PKR 819.58 million, a significant increase from the previous year’s PKR 400.01 million. Despite the considerable financial setbacks, Ansari Sugar Mills continues to navigate severe regulatory and operational challenges that have impacted its business operations and financial position.

The year was particularly tumultuous for Ansari Sugar Mills due to an inquiry initiated by the Federal Investigation Agency (FIA) against its sponsors, directors, and shareholders. This inquiry, which also involved other group companies, was later transferred to the National Accountability Bureau (NAB). Following allegations of illicit transactions, NAB took the drastic step of freezing the Company’s bank accounts, severely restricting access to funds and banking facilities. These actions were taken without the endorsement of a competent court, further complicating the financial landscape for the firm.

According to information available from the Pakistan Stock Exchange (PSX), the freeze on the Company’s accounts led to significant financial distress. Ansari Sugar Mills was forced to default on various obligations, including bank installments and payments to employees, growers, and vendors. The situation was exacerbated by the lack of a judicial backing for the account freeze, leaving the Company in a precarious financial state.

Despite these challenges, the Supreme Court’s Joint Investigation Team (JIT) conducted a thorough review of the group’s accounts and found no charges against the Company. Following recent amendments to the NAB Ordinance, the Company’s accounts have been unfrozen, and efforts are underway to settle debts and other liabilities amicably.

The financial performance of Ansari Sugar Mills also reflected the operational difficulties, with a decreased gross profit of PKR 193.55 million compared to PKR 249.73 million in the previous year. The sugar production witnessed a sharp decline, with 6,692.75 metric tons produced in the 2022-23 crushing season, almost half of the 13,392.5 metric tons in the prior period.

Looking forward, Ansari Sugar Mills is focused on improving its revenue streams through strategic initiatives such as the Balancing, Modernization, and Replacement (BMR) of equipment. This is expected to enhance the efficiency of by-product sales, such as bagasse and molasses. Additionally, the Company is committed to supporting local sugarcane farmers by promoting higher yield varieties and providing timely agricultural inputs to increase productivity and quality.

The board of directors has expressed their gratitude towards the Company’s employees, business partners, and shareholders for their continued support during these challenging times. With the unfreezing of bank accounts and strategic adjustments, Ansari Sugar Mills is poised to navigate the uncertainties and stabilize its operations in the coming years.