Back Row from left to right Front Row from left to right Ronald Alli A.A. Dr. Hubert Rodney Dr. Dindyal Permaul Donald Ramotar Michael Boast Barry Newton Errol Hanoman Rajendra Singh J Se ET eR perenne ee ST REAR TERT ““uysuca . :wuyana Sugar LOrporation NL. @haiman's Statement Production Overview There was a net operating loss before defined benefit pension liability, sugar levy writeback and tax of $2.3 billion in 2003 compared with a net operating profit of {$800 milion in 2002. This disappointing result was due to a significant drop in production which | explain in the next section. After defined benefit pension liability, sugar levy writeback and tax the net loss for the year was $1.1 billion compared with $300 million in2002. The defined pension benefit fabity increased by $300 million in 2003 and is a provision and not a cash iter. ‘Turnover in 2003 (excluding the release of the export sugar levy by Government) increased to $28. billion, an 11% increase over 2002. Total sugar sold increased from 306,000 tonnes in 2002 to 336,000 tonnes of which 183,000 tonnes were sold fo Europe and over 87,000 tonnes (a 46% increase over 2002) into the Cantbbean, ‘The application of the new International Financial Reporting Standard number 41 on Agriculture increased the Corporation's assets by over $4 billion {rom the inclusion of the value of growing cane. The Corporation's net assets now tolal $87 billion. In 2003 we produced 302,376 tonnes of sugar from 3.4 milion tonnes of cane. This represented a drop of 412 % from the record levels of 2002. Cane farmers provided 8.5 percent ofthis cane. The disappointing quantities arose from the drought conditions during the first crop and unusually high rainfall both during the mid year out of crop period and at the beginning ofthe second crop. Cane yields in 2003 were affected by the prolonged drought in the second half of 2002 and the first half of 2003, which affected cane growth. The drought restricted the abilty of the estates to irrigate the cane. ‘Sugar Production Tonnes 1000) During the first crop of 2003, despite the many challenges, Blaimont was able to set a new all-time ‘sugar production first crop record with an achievement of 19,024 tonnes of sugar. The Corporation is targeting additional land preparation and planting to ‘getto the acceptable cycle age of plant to four ratoons over a five-year period. A total of 9,313 hectares of land, or over 20% of the area under cultivation, were prepared for planting and 9,626 hectares were planted. Biairmont recorded the highest cane yield at 84.24 tonnes of cane per hectare and the highest sugar yield at 8.06 tonnes of sugar per hectare. ‘The budgeted cane yield for 2004 is projected at 79.8 tonnes cane per hectare which is a four per cent improvement on the actual 2003 cane yields. This is expected to be achieved since the 2003 drought created good conditions for subsoil cracking and. excellent root development thereby promoting good stalk development of the cane to be reaped in 2004.The Corporation's contribution to the economy ‘GuySuCo generates 16 per centof total GDP and 30 er cent of agriculture GDP. Each 20,000 tonnes of ‘GuySuCo's sugar production represents one percent ‘of the country’s GDP. We generated gross foreign ‘exchange earnings of over USS 130 milion last year and net foreign exchange earings of over USS 80 milion. This represents almost 25 per cant of the country's foreign exchange reserves. Including temporaries the corporation employs over 20,000 people directly, with a further 5,000 estimated to be employed within cane farming. Itis estimated that businesses which serve and depend on sugar ‘employ a further 10,000 persons. If each employee ‘supports a minimum of ive people, 35,000 employees ‘fepresent 175,000 persons or almost one quarter of the population. Peer Eéveaton on HYADS Avareness We provide medical, sporting, educational and community development facilities and are promoting computer literacy through training courses at our community centres. In particular the Corporation is focusing attention on HIV/Aids amongst the workforce. ‘The Corporation recognizes that HIV/AIDS is a significant issue for all major employers in Guyana and has developed a sensitive and caring policy to address the issue. ‘The Corporation continues to invest heavily in drainage, an activity which benefits the surrounding ‘communities as well as cane land. The concessional loan from the Caribbean Development Bank was drawn, ‘down during the year. Apart from this the Corporation thas no long-term borrowings although of course this, will change when the new Skeldon Project is complete. suysuco Annval Repo | Costs ‘Although operating costs decreased in absolute terms, the overall cost of production for the industry in 2003 was USe 19.5 per pound compared with the US 18.3¢ per pound in 2002. While maintaining our status as the largest and premium employer in Guyana, we have to target employment costs as in 2003 they represented 57 per cent of total costs. employment Cost (5 ‘0000 16000 14900 +2000) +0000 000 6000 4000 2000 During 2004 we will discuss with the unions the replacement of the current production based annual incentive scheme with a new profit based scheme. This concep! will be extended to all staff and the corporate managers. We will also introduce an incentive scheme based on results for senior management. Eatty in 2004 the management contract, with Booker Tate was renewed with more emphasis placed on the achievement of a number of key operating parameters. Weare in the process of changing the current defined benefit pension scheme for senior staff to a defined contribution scheme. This change is necessary in view of the relatively limited opportunities for investmentin Guyana which shows retums above the rate of inflation. Average Price / Tone (USS)Guyana Sugar Corporation INU Grairman's Statement - conta The global sugar trade environment It is no secret that we are experiencing very challenging times in relation to maintaining access to our traditional markets in the European Union, which account for 180,000 tonnes of sugar or 60% of our 2003 production. Guyana is an active member of the ACP group and has the third largest EU quota, after Mauntius and Fiji, and the largest quota in Caricom. The global trading system in which we now operate is placing heavy pressure on non-reciprocal Preferential trade and several countries, including some of the largest sugar producers in the world, have challenged the EU's sugar regime on the ‘grounds that the regime is not WTO compatible. ‘There is also downward pressure on prices both within Europe and within Caricom, As the EU complies with its WTO commitments to reduce domestic support ‘and export subsidies, the price for sugar willinevitably reduce, The EU Commission has produced a report ‘which implies that the preferred mechanism for the rationalization of the E U sugar regime is fora gradual reduction in both prices and quotas with effect from 2006. Brazil's low cost of production and rapid increase in exports are also severely depressing world matket prices. Our Caricom and non-EU customers ate using world market prices to benchmark our price offers. This will negatively impact on revenues. Guyana is currently involved in global, hemispherical and regional negotiations on the future of markets for sugar, i.e. the WTO, the FTAA, the EU/ACP and the Caricom Single Market and Economy (CSME). itis, lear that we must become less heavily dependent ‘on existing trade arrangements and become more competitive if we are to continue to sustain our industry, I discuss in the next paragraph the initiatives ‘we are taking to address this objective. suysuco sity control measures are adhered town or factory Strategic Objectives and other initiatives We continued the implementation of our strategic ‘objectives including © Development of the new factory at Skeldon including co generation Widening of the product base by developing systems for organic sugar production and by introducing Demerara Gold, our first branded packaged product Continuing talks on possible introduction of refinery at Skeldon Improvements in productivity by the implementation of the Agricultural Improvement Pian ‘The attack on the cost base through further work on the Benchmarking and Zero Based Budget (BOBB) exercises Emphasis on staff training at all levels. ° ° ° We also commenced discussion with Angostura of Trinidad for a new joint venture Distlery at Skeldon which will intially produce raw alcohol and later will produce aged and blended spirit. ‘The Corporation has sold forward the majority ofits 2004 and 2005 European receivables at remunerative levels and has sold some of the 2006 receivables at over USS 1.20 for #1 GuySuCo continues to place emphasis on quality andis therefore seeking o obtain ISO certification in ‘quality control and marketing for the Blaimmont factory. ‘The Corporation is replacing its aging accounting and inventory management systems andis in the process of refining its comprehensive Information Systems strategy.Skeldon Sugar Modernization Project ‘We were unable to sign a contract for the construction ‘of the new factory at Skeldon due to the delays in ‘getting approval from the multilateral institutions for the addition of a co-generation component to the project. However this approval has now been received and we expect to sign a contract during the first half of 2004, with the new factory becoming operational in 2007. The corporation raised US $ 4 million from the first tranche of land sales as part of the financing of the new project and additional land willbe released to the market as necessary. Thank you In October the previous Chairman, Mr. Viekram Odi, resigned to pursue other business interests. Mr. Oditt presided over the industry during a time of major changes and major achievements and we cannot thank him enough for the immense contributions he made to the development of the industry. We wish him well in his new business ventures. | wish to record my appreciation to my fellow directors {or their steting contributions particulary since it must be said that the level of directors’ fees Is very low in relation to the substantial demands placed upon their time. | also thank the management and all employees of GuySuCo most heartily for their efforts during 2003 and urge allo redouble efforts towards ensuring that ‘our industry has a viable and sustainable future. GuySuCo is gradually evolving into a results ‘orientated Corporation by reducing the previous ‘emphasis on production and shifting lo emphasis on ‘customer satisfaction and cost reduction. | am ‘confident that we have the team and the strategies to achieve the objectives of our mission statement. guysuco ‘Bel Lsder far move efficent getherng of cu canes at mest Etats The most recent dewopnen nfl meshanzationvuyaua oQuyat vurpuretiun Guysuco & The ‘The Guyana sugar industry was established in the eighteenth century. It has undoubtedly made an impact on the environment within the so-called “sugar-belt". Fortunately, however, none of the sugar industry's by-products or operational procedures present a serious threat to the local environment. The disposal of waste products BAGASSEIS THE FIBRE WHICH REMAINS AFTER THE JUICE, IF CONSISTS MAINLY OF CELLULOSE AND LIGNIN AND 15 POTASSIUM AND SOME GAGACILLO (SMALL PARTICLES OF WATER, IN THE FORM OF EFFLUENT FROM THE FACTORY, CONTAINS MARY IMPURETIES, OFTEN VARVING QUANTITIES GF SUGAR, IT MUST BE TREATED TO MINIMAL BOD (BIOLOGICAL OXYGEN DEMAND) CONTENT PRIOR 70 BEING biscancen. DEVELOPMENT. IT 19 PRODUCED GY THE FACTORY VEGETATIVE MATTER BEING TAKEN TO THE FACTORY. FIRE IS ALSO FOUND TO DISPLACE SNAKES AND SOME, AGnicULTURAL WORKERS. GuYGUGA IB PRESENTLY AREAS AROUND THE EBTATES. WE ARE WORKING WIT+ THE ENVIRONMENTAL PROTECTION AGENCY TOWARDS guysuco bw. Environment Effects on the indigenous life of the area “Te noUSTRY's FUTURE PLANS RELATE, INTHE MAIN, TO THE EXISTING CANE AREA. ABOUT 10, OOO ACRES OF HOW LAND WILL GE DEVELOPED It BERBICE WHILE SOME EXIGTING EANE LANOS IN DEMERARA MAY 8 PUT TO ALTERNATIVE USE, THERE ARE THEREFORE NO ANTICIPATED PRESENT CANE HUSBANORY PRACTICRNS WiLL MEASURES WILL CONTINUE. IT WILL BE A Mix OF ANO/OR FORMULATED BY MAJOR MANUFACTURERS withite THE UNITED STATE® AND EUROPE AND ARE APPROVED FOR USE BY THE APPROPRIATE UNITED STATES AND EUROPEAN AUTHORITIES. PEST CONTROL, SOME INSECTICIDES MAY BE USED TO CONTROL TERMITES, AGAIN IN SUCH CASES, ONLY APPROVED INBECTICIDES WILL BE USED. RAT BArING wiTH GOOD STOCKS OF FISH AND OTHER AQUATIC ANIMALS QUALITY AND FREEDOM FROM POLLUTANTS. THE Aa STATED EARLIER, SOME 10.000 ACRES OF NEWLAND WiLL GE TAKEN INTO CANE. CURRENTLY, THIE AREA “THE REHABILITATION PROPOSALS FOR THE AGRICULTURAL, coon of GUYSUCO Ane, THEREFORE, NOT POLLUTION OVER THE LEVELS WHICH HAVE EXISTED DURING THE PAST TWENTY OR THIRTY YEARS.THIS 15 TESTINED SY THE FACT THAT THE ENVIRONMENTAL, PROTECTION AGENCY HAS ISSUED AN ENVIRONMENTAL, PERMIT To GUYSUCO To CONSTRUCT THE NEW FACTORYReport of the Directors The Directors of Guyana Sugar Corporation Inc. present their report together with the audited financial, statements for the year ended 31 December 2003. Principal Activity ‘The principal activity of the Corporation is the growing, of sugar cane and the manufacture and sale of sugar and molasses from that cane. ‘The Chairman's Statement describes the development and operation of the Corporation during the year, including the preferential markets situation, the position at the end ofthe year and the proposed future developments. Results and Dividends ‘The financial results of the Corporation are set out on pages 15-32. In accordance with the policy of the Corporation for many years, no dividends are daciared or payable. Directors ‘The names of the Directors are set out on page 3. All the Directors are non-executive, except for Mr. M. Boast. Mr. B. Newton and Mr. E. Hanoman are both senior executives of Booker Tate Limited, which manages the Corporation under 2 Corporate Management Agreement. Fixed and results-related fees are payable under the Agreement. Mr. M. Boast is an ‘executive of Booker Tate seconded to the Corporation. Apart from this, none of the Directors during the year hhad any material interest in any contract which is of significance in relation to the business of the Corporation. Directors’ remuneration is set out Financial Statements. ote 12(c) to the Guysuco Corporate Governance ‘The Board believes that its primary function is to generate sustainable wealth for the shareholder as the key stakeholder in the business. The Guyana ‘Sugar Corporation recognizes the importance and is, committed to high standards of corporate governance. This report by the Directors covers the key elements regarding the application by the Corporation of the principles of corporate governance, (a) The Board: The Board comprises seven non- executive directors (including the Chairman) and one executive director (the Chief Executive). The Board considers that each director is able to bring independent judgment to the Corporation's affairs in all matters. The Board meets not less than ten times a year and has adopted a schedule of matters reserved for its decision. It is responsible for the strategic direction of the Corporation. The Board receives information about the progress of the Corporation and its financial position each month. This information, together with papers required for each Board meeting, is circulated in a timely manner before each meeting. ‘The Board has established four committees with defined terms of reference, namely the Audit Committee, the Central Tender Committee, the Remuneration Committee and the Lands Committee. The Audit Committee comprises three non-executive directors. Representatives of the corporation’s senior management attend meetings. The role of the Committee is to assist the Board in fulfiling its obligations in relation to the integrity of financial statements, risk management and internal control. The Audit Committee reviews and discusses, with the Internal Aucitor and External Auditor, the Group's internal accounting controls, intemal audit function, choice of accounting policies, intemal and external uit programmes, statutory auditors’ report, nancial reporting and other retated matters.wuyatd dugar VOTpur@tiun Inu Report of the Directors - conra ‘The Central Tender Committee evaluates all tenders for the supply of materials and services above predeterminedlevels. The Remuneration Commitee approves remuneration of senior staff and sets the policies for remuneration of other staff. The Lands Committee approves all land disposals and establishes policy issues concerning land. (b) Internal Control: The Board is responsible for the Corporation's system of internal control and for reviewing its effectiveness which is designed to provide reasonable (but not absolute) assurance tegarding the safeguarding of assets against unauthorized use, the maintenance of proper accounting records and the reliability of the financial information used within the Corporation. ‘The Board has delegated this responsibilty to the Audit Committee. The Audit Committee conducts an annual assessment ofthe effectiveness of the system ‘of intemal control during the year. Key procedures have been established which are designed to provide an effective system of internal control. ‘The framework of the Corporation's system of internal control includes @ an organizational structure with clearly defined lines of responsibilty and delegation of authority documented policies, procedures, and authorization limits for all transactions including capital expenditure ‘a comprehensive system of financial reporting. The Board approves the annual budget and actual results are reported against budget each month, Any significant adverse variance is examined and remedial action taken. Revised profit forecasts for the year are prepared on a quarterly basis aninternal audit function ° ‘The system of internal control is designed! to manage rather than eliminate risk as no system of controt ‘can provide absolute protection against loss. ‘The Directors are of the opinion, based on information and explanations given by management and the intemal auditors, and on comment by the independent auditors on the results of their audit, that the Corporation's internal accounting controls are adequate and that the financial records may reasonably be relied upon for preparing the financial statements and for maintaining accountability for assets and liabilities. suysuco. Employees Performance appraisals, staff development and training are provided at all levels and emphasis is placed on both technical and personal development. Guysuco is committed to equality of opportunity amongst its employees, Recruitment, terms of service and career development are based solely on ability and performance. Pensions ‘The pension scheme of the Corporation is established under an irrevocable trust. The Pension Scheme Management Committee includes employee representatives. Professionals manage the Scheme. Both the Committee and the Managers are required to act at all times in accordance with the rules of the ‘Scheme and to have regard to the best interests of the members of the Scheme, The Management Committee controls the investment funds, which are managed by external fund managers. Guysuco is committed to ensuring that the Scheme is administered in accordance with the highest standards, Material events after year-end No matter which is material to the financial attairs of the Corporation or the group occurred between the balance sheet date and the date of approval of the Financial Statements, Auditors The Auditor General has audited the Financial Statements. For the financial years 1995 to 1998 inclusive this activity was sub-contracted to Deloitte and Touche. For 1999 to 2003 the activity was sub- contracted to Ram and McRae. BY ORDER OF THE BOARD. Bis ‘Adreana De Souza-Pompey Company Secrotay Registered Office ple Estate 12Report of the Auditors Report of the Chartered Accountants Ram & McRae ‘To the Auditor General ‘On the Consolidated Financial Statements of the GUYANA SUGAR CORPORATION INC. For the year ended 31st December 2003 We have audited the consolidated balance sheet of Guyana Sugar Corporation Inc. as at December 31, 2003, the consolidated profit and loss account and the statements of changes ‘in shareholde's’equity ad cash flows forthe year then ended. These financial statements are the responsibilty of the Company's management, Ourresponsibiby isto express an opinion fon these financial statements based on our audit ‘We conducted our audit in secordance with Intemational Standards on Auditing and the Office ofthe Auditar General's auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance thatthe financial statements are free from ‘material misstatement, An audit inclides examining, on atest basis, evidence supporting the amounts and disclosures in the financial statements, An audit also includes assessing the accounting principles used and signficent estimates made by management, as well as ‘evaluating the overall financial statement presenation. We believe that our audit provides a reasonablebasisforour opinion. {In our opinion, the Consolidated financial statements on pages 15 0 32 presen fairly in all material. respects, the state ofthe Company's affairs at December 31,2003 and its Toss and ‘eash flows for the year then ended in conformity with International Financial Reporting Standards, and comply with the Companies Act 1991 ‘Without qualifying ou opinion we draw attention othe following maters: International Accounting Standard 17 - Leases requires that leases be accounted for as finanee or operating leases under defined circumstances. The Company inthe preparaifon of ‘these financial statements has accounted forall leases with the Government of Guyana as ‘operating leases as slated in note 2 () tothe financial statements, These leases represent a substantial portion ofthe operating asscis ofthe Company. Preliminary data was used by the Independent Actuaries in calculating the IAS 19 ~ fee Benefits forthe Junior Staff Pension Scheme, The Actuaries cautioned thatthe IAS 19 figures may be subject to change alter a more complete sssestment is earied out of the Scheme. The defined benefit obligation onthe Junior Staff Pension Scheme included in the financial statements at December 31,2003 amounted to $14 3billion. Kano METAR Ram & McRae CHARTEREDACCOUNTANTS PROFESSIONALSERVICES FIRM 157'C Waterloo Street, North Cummingsburg, Georgetown, Guyana December 8, 2004 Guysuco.Guyana Sugar Corporation INC. Report of the Auditor General ‘OFFICE OF THE AUDITOR GENERAL OF GUYANA 63, HIGH STREET, KINGSTON, GEORGETOWN, REPORT OF THE AUDITOR GENERAL TO THE MEMBERS OF GUYANA SUGAR CORPORATION INC. ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31DECEMBER 2003 Chartered Accountants, Ram & McRae, have audited on my behalf the financial statements of Guyana Sugar Corporation Inc, for the year ended 31 December 2003, as set out on pages 15 to 32. The audit was conducted in accordance withthe Financial Administration and Audit (Amendment) Act 1993. The preparation of the financial statements, including assertions relating to their completeness, ‘accuracy and validity, and compliance with the applicable laws, regulations and contractual ‘obligations, is the responsibility of Management. My responsibility is to express an independent ‘pinion on the statements based on these assertions and toreport my opinion to you. ‘As required by the Financial Administration and Audit (Amendment) Act 1993, Ihave reviewed the audit pian and procedures, work papers, report and opinion of the Chartered Accountants, { have also hhad detailed discussions with the Chartered Accountants on all matters of significance to the audit. I concur with the opinion, as et out on page 13, of Chartered Accountants, Ram & MeRae. S.A. Goolsarran Auditor General Office of the Auditor General 63 High Street, Kingston Georgetown, Guyana December, 2004 cuysuco.ASSETS: Non current assets, Property, plant and equipment Investment Investment in subsidiary Deferred tax asset Total non current assets Current assets Inventories Product stock Standing cane ‘Accounts receivable and prepayments Relaled parties ‘Taxes recoverable ‘Cash and cash equivalents Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Shareholder’s equity ‘Slated captal Revaluation reserve Other reserves Minority interest Retained eamings ‘Total Shareholders equity, Non current liabilities Deferred tax lability ‘Loan Defined benefit pension ibility Current labinties ‘Accounts payable and accruals Relaied partes Debenture Obigations under finance fease “Taxes payable Export sugar levy: Total current liabilities ‘TOTAL EQUITY AND LIABILITIES ‘These far cai Consolidated Balance Sheet ‘Asal st December 2005, NOTES Xe), 2d), 7 5 2h),5 He), 8fa) Xe), Blo) 80) 8(c), 19 9 COMPANY, Restated 2003 2002 SM Mu 73,312 73,589 8 38 29 23 7,363 6,942 80,742. 180,602 3,253 3,445 807 321 4525 4,400. 2,056 41,999, 4 4 1615 184 12,390 14,960 93,132 95,563, 40,800 53,280 78 2449) 66,607 6,268 453 14,256. 20977 3.231 2,895 41527 41525 144 144 : 70 587 435 2.876 7,945 95,563, 2003 SM SH. 73,320 38 7.368 00.726 3,253 807 4815 2,056 10 1,686 73,808 8 953, 80,599) 3445 3324 4,842 1,939 10 1,882 42,487. 15,039 93,213 ‘The sccorpsnying notes on pages 20 (a 31 fam a toga pat ol thse franca ltements suysuca 95,638Guyana Sugar Corporation INC. Consolidated Income Statement Fer Te Ya Ended Deceber 31,2009 NoTEs COMPANY. Restated 2003, 2002 2003 2002 SM sM sm $M 28,077 25,389 28,077 25,389 25,361 20,604 25,311 20,601 Gross profit 2716 475 4708 Other operating income 206 401 300 Administrative expense (2,741), a x (2447) Maskebng and distibuiion expenses (2437) ¥ x (2.266) Finance cost i) Provision for defined benefit pension Fabity (1386) ) (1,118) 2.876 = 6 5 (844) (358) 299 4) 208 (60) (ema) (1,405) (298) S (23) 2 (274) (1,428) (238) Tha accompanying neteson page 201031 fom an topra prof tese rnc semen suysuco 16Annual Report Consolidated Statement Of Changes In Equity ‘AsA\ December 31,2003, COMPANY 2003 Balances at January 01, 2003 Review of valuation of property, plant and equipment Ac) Release of revaluation reserve for excess depreciation Release of revaluation reserve on disposals (40) Defered tax recognized n equity 499 Retained ioss for the year (1.443) | (1.143) Balances at December 31, 2003 2aa9 | 66,607 Other: SM ‘COMPANY 2002 Balances at January 01, 2002 10,295, Coptaization of reserve as equity (10,254) Review of valuation of property plant and equipment Release of revaluation reserve for ‘excess deprecation 525 Deferred tax recognized in equity 1,540 Retained loss for the year (274) (3,324) Adjustment to opening reserves {AS 41 standing cane adjustment 4400 Defined benefit pension tabiity ‘actuarial adjustment 2,038 Revaluation of investment Balances at December 31, 2002 ‘Th accompanyng netes on pages 20103 fom an tere pro tase franc sates cuysucc: 17Guyana Sugar Corporation INC. Consolidated Statement Of Changes In Equity ‘AsA.Decerber 31,2008 NOTES | Stated | Reserves Retained Capital | Revaluation | Other | Earnings SM SM SH GROUP 2003 Balances at January 01, 2003 54,099 8 3,108 Review of valuation of Property, plant and equipment Ae) (¢02) Release of revaluation reserve for ‘excess depreciation Release of revaluaion reserve on. Gisposals Minority interest Deferred tax recognized in equity Retained loss for the year Balances at December 31, 2003 ‘GROUP 2002 Balances at January 01, 2002 Capitalization of reserve as equity Review of valuation of property, plant ‘and equipment Release of revaluation reserve for ‘excess depreciation Defered tax recognized in equity Retained loss forthe year ‘Adjustmen; to opening reserves: JAS 41 standing cane adjustment Defined benefit pension billy actuarial adjustment Revaluation of investment Balances at December 31,2002 The accompanying nolas en pages 20631 frm an integra pro those franca steers suysuco. 16Annual Report Consolidated Cash Flow Statement Fer The Yes Ended Docaba 31,2003 COMPANY, Restated 2003 2002 SM Mm CASH FLOWS FROM OPERATING ACTIVITIES (note a) 2,541 1,998 (75) 3) ast) (4044) Tensor insecsied NET CASH FLOWS FROM OPERATING ACTIVITIES. 2.015 884 CASH FLOWS FROM INVESTING ACTIVITIES Interest received 6 Purchase of propery, plant and equipment (2.028) Payment to minority interest = NET CASH FLOWS FROM INVESTING ACTIVITIES (1,990) CASH FLOWS FROM FINANCING ACTIVITIES Lease Financing - short term 7 Proceeds from Loan longterm borrowing 432 2 NET CASH FLOWS FROM FINANCING ACTIVITIES 362 4 Not decrease in cash and cash equivalents (200) (1.018) Cash and cash equivaienis at beginning of the period 1,814 2831 CASH AND CASH EQUIVALENTS ATEND OF THE PERIOD = 1.615 4814 CASH AND CASH EQUIVALENTS AS PER BALANCE SHEET 1.015, 1.814 a) CASH FLOWS FROM OPERATING ACTIVITIES Net loss before taxation (4) ‘Adjustments for Depreciation 1,933 Loss on Disposal of property, plant and equipment 3 : Not intrest 82 Ey Income from subsidiary a 3) Operating profit before working capital changes, 7262 \lncrease)idecrease in inventories 492 (195) \lnerease)decrease in product stocks 2514 (1767) Increase in standing cane (225) : {(ncrease)/decrease in accounts receivable and prepayments (117) 761 Increase accounts payable and accruals 396 410 Increase in amounts due to related partes 2 93 {(ncrease)decrease in amounts due from related parties 7 (41) Increase in defined benefit pension ability 1386 118 Decrease in sugarievy payable 876) Cash generated rom operations i808 ‘The accompanying notes on pags 20 lo 31 far an itsra prof ass eae statementsGuyana Sugar Corporation INC. Notes To The Financial Statement For Te Year Ended Documber 31,2003, 1, INCORPORATION AND PRINCIPAL ACTIVITIES ‘Guyana Sugar Corporation Linited was incorporated on May 21, 1976 and is involved inthe culvaion of sugar cane andthe ‘Manufacture and sale of sugar and molasses. On February 28,1896 the Corporation was coinued under the Companies ACL 1991 andits name changed to Guyana Sugar Corporation inc. The Corporations wholly owned by the Govemmentof Guyana, 2. STATEMENT OF ACCOUNTING POLICIES a)Accountingconvention “The financial slatemen have been prepared under the historical cost convention as modified forthe revaluation of xed assats Inveshrni standing cane and produc slack yc re sated ala vate The ave Been prepared in accordance wih he Intematona Financial Reporting Standards IFRS) issued by the Intemational Accouning Standards Board (ASB) and be requirements ofthe Laws of Guyana, )Basis of consolidation ‘The consolidated financial statements incorporate the nancial slatements made to December 31 each year othe Corporation ndLochberLiied (he subsdan)canpany controle Ie Corman, Cn sachevediy veoh Cporaton aig fe gowe fo gover he nail and operating paces of he util rough fe Board Dress. Dea of he Subs are gre in note 15, lta group balances and ansactons hve ben elinted im prepatng the consldeed ancialstalemen ¢)Property, plantand equipment and depreciation Freehod iand and buldings are stated al professional valuation as at January 01, 1999, Factory plan is stated at Directors’ Valuations ol Deere 31 200323 futheexldnednnoled (Ober propery lan andequnmentacaured tto January 01, 1999 are slated at cost All assets with the exception of reehold land and work-in-progress are deprecialed on the ine method calculated to write off each asset overitsesimated usefullife as folows:- Freehold buildings- wooden ‘Over20 years Freeholdbullings-others Over 33 years Land expansion costs ‘According to tenure Fant, machinery andequipment From5to 17 years Motor vehicles ‘Overs years Airraf Over and 10yeats Atasslsre std oss ipsien based onncame generaton andl alzabl value Detreciaons proved fon $e pe eno suomi eon of onal Capt worn omens dcredeld ul re an ese ‘are brouphlintouse, 4d) Freehold and leasehold land {In addition to 21,565 hectares of freehold land, the Group leases from the Government of Guyana 55,173 hectares of land on ‘which it grows cane and for anclary purposes. These are subject to Several types of iease agreemenis, he siatus of which is follows: Hectares Unexpiredieases 19;364 Expiredieases 7564 Expired permissions 944 During he Presidents plessure licenses During the Prestients pleasure permissions [he Group has reeled wien conmaton hat the Goverment of Guyana is commited 1 eneving al leases fo lnds benefcialy occupiedby Guyana Sugar Corporation nc. The tenure ofthe leases is kel obey (0) years, Lease rentals wil, ‘be reviewed from time to timeby the Commissioner ofLands and Surveys and approved by the Goverment of Guyana. Lease payment per hectare per annum hes been as follows: s Prior to 1985, 100 From January01, 1985 to May 31, 1998 485 From June01, 1998 2471.0 ‘Avaluaton prepated by professional valuer placed a value on these lands of $1482 600 per hectare at January 01, 1808, suysuca 20Notes To The Financial Statement For The Year Ended Dcerbr 31,2003 2. STATEMENT OF ACCOUNTING POLICIES-conta )inventories lventores are valued atthe wer of weighled average cost and ne realizable valu. Product stocks are yale a the ower of costo producion and estimated realizable vale es deductions or sugar industy special unds contributions and shipping and sein expenses, where applicable, Where markels are denied for sugar and molasses be nalreizble vate seed Fisowerthan be cof reducon. Proven cst desl este pean and administra ‘The value of standing cane is included in the financial statements IAS 41 (Agricuture) became effective for nancial statements beginning on orafier January01, 2003 ‘Standing cane{s measured ar value ess estimated point ofsale costs. The fai value of cane’ determined using the average ee aaa 'aagregale price achieved in the various markets for which sugars supplied. ‘)Researchand development Research and development expenditures charged against revenue in the yearin whch tis incurred. 49) Foreign currency transactions. Foreign currency transactions are recorded in Guyana Dokars atthe rales of exchange ing athe date of such transactions. At {hebalance sheet date, monetary assets and abities denominated in a foreign currency are translated the rates ofexchange ‘ung at that date andthe resuiting gains andlosses ae recognizedinthe income statement. h)Revenue Revenve represents the amounts eared from the sale of sugar andmolasses during the year. I) Revenue recognition Revenue isrecognized when the products shipped, orfordomesticsces when the products collected. |) Pension scheme ‘The Corporation partcipatesin acontbutory muti-employer pension scheme, Guyana Sugar and Trading Enterprises Pension Schon (STEPS, 3 dine bret shone rs als employes he butane re ha tute suited funds which are separate from tie Corporations fnances. ‘valuation cartied out at December 31,2001 forthe pension scheme revealed a suplus of$144M. The valuation was calculated ‘na going concem basis and tus allowed, inter alia, for future salary increases on the scheme's abilies. The actuaries have confirmed that, had the scheme been terminated as atthe date of valiaion, the avaiable assets wouldhave been sufientto ‘secure accrued benefits based on completed service and current salary leves. During the year he Corporations contribution to the scheme was $196M (2002$199M). Employees who have retired and are not members ofthe pension scheme are paid ex-gratia pensions, which are partially tocoverable fom the Sugerindusty rice Satizaton Fund Under AS 19 the ol laity to the ‘governed by this Srrangement hasbeen compuled a how Nok 4. The movementn ie lablly a atDecomter31,2003hes been keno income statement. i) Deferredtax Deferred tax liabilities are recognized in respect of the inte ta payable in fle pets in respect of lable ‘temporary diferences. Deferred tax assets are recognized in respect temporary differences, unused lax losses. ‘and unused tax credits but only to the extent thatitis anticipated that taxable prof will be availabe in fulure years. The amountof ‘the deferred taxhas been calculated using rates enacted or substariially enacted al the balance sheet dale, cuysuco.Guyana Sugar Corporation INC. Notes To The Financial Statement Fer ta Yar EnesDeerbe 3,202 1) Skeldon sugar modernization project. at eee acer ree Siiiercaecineata eta project management costs ($899M) the developmentofnew cane areas, eaipmentpuchased corporation has received wntten confirmation fromthe Goverimentof Gi Petteane fot to Weta Bark ( oi cae freee area for the project and the ‘Government of Guyana has guaranteed allpayment obigations under contracts awarded for 1m) Comparatives Certain changes have been made to the presentation of the financial statements and where necessary the comparative figures forhepevous eorhave been reslategaccordngy. ee 3. STATED CAPITAL aera a reece eA OD er Soe a aee ee canto! 10,700.57. 77Sardnary sare. During 2002 ion capitalized $9,362, 950,000 from the Rehabilitation and. Development Fund and $930,085,000 from the General Capital 3 oul. COMPANY, GROUP Rostated Restated 2003 2002 2003 2002 is _s 4,RESERVES: a) Other reserves 78 78 8 b) Revaluation Reserve F 53280 54,099 53,358 S447 42) Other reserves: 4. _Ameuris receiv y be Corporation fom te Sugar ndusty Special —— Fundsforrhabliion werccaedouton te Coporatonsfa aOR 2 Moros recived fom the Goverment of Guyana fr the puose of financing projetsinthe Corporation's diversicaion programme. Pa ‘The value of he net assets of Guyana Agricultural Products| ‘and Demerara Sugar Company Limited which were acquir ed Be ‘Goverment of Guyana and transfered tothe Corporation. Duric ‘$t4mwas capitalized as equi. ‘Ajusment of vestments to reflec fc value oa b)Revaluation reserve eee) 41. Revaluation offixed assets 61,355 60,330 «61,355 60,330 Eflect of review of vaatono factory plant and machinery (e02) 1.025 (602) 1,025 Less provision or deferred tax (7233) (7.256) (7,285) (7,256) Less releasedon ssposals (40) (40) 53.200 54099 53,280 54, ‘)Revaluation The Caparaton reales rehot and abun and actor plan and machinery asa January 01999 Te vabaon ofthe land and buldings was undertaken by an independent valuer. The orginal valiaion as al Janvary 61, 999 of plant and ‘athinery was based ona vabe muse caution, The valuation is evewed each yea inthe bgt of changes in makes, Procure and cena venereal ven sone by the Greco al the balance shee ats '5802M (2002 §1,(25M upwards).Notes To The Financial Statement For Te Yat Endod December 31, 2008, 5. DEFERRED TAX COMPANY Recognized deferred tax assetsiabiliies are —— attributable to the following tems: 2003 2003 $M. aM 3M. su. Defered tax labilty Propet, plant and equpment 8208 66M _6.268 Detered tax assets Tax vale of oss cary forward (825) = (530) a Inventories provision (229) (179) (223) (17) Defined benefit pension lability (4,990) ea (4,990) a ‘Standing Cane (1619) (4540) _(1619)____(1.540) 363) (es) (7,368) (6,953) Movement in temporary differences during 2003 ane COMPANY, GROUP Balance at Recognized Recognized _Balance at Jan.01,2003 in Income ___in Equity Dec 3.2003 Delerred tax ibility Property, plant and equipment ee Sc nt OS (499) Deferred tax assets: Invenlores provision (178) (0) Defined benefit pension liablity (6223) 23 Tax losses - (625) & Standing Cane — 11.540) 73) Sates a 16,842) (a2) 3) company ___GRouP__ Balance at Recognized Recognized _Balance at Jan.0%,2003___intncome _ _in Equity _Dec 31,2003 Deferred tax ibility Propety, plant and equipment 664 133 499) 6,266 Deferred tax assets Tax vale of oss cary forward uilzed ) @t9) Inventories provision (79) (60) Defined benefit pension ability (5.223) 233 Standing Cane 5 (6,953) (415 Movement in temporary differences during 2003 COMPANY, Restated 2003 2002 6, DEBENTURE SM. SM. 2% Govemment of Guyana Debenture 144 144 ‘The debenture from the Government of Guyana is scheduled tobe repaid in 2004, GuysucoGuyana Sugar Corporation INC. Notes To The Financial Statement er Tn Yar En Decor 31,208 7. FIXED ASSETS Equipment COMPANY, Plant, under Land Machinery finance Buildings Buildings expansion’ ‘and lease<1 Workin Costar valualon _Land__others_ wooden. en eeipmeal Yeat_progmss _ Total As al Jan 01 2003 BST 4 I 1 3) 914 Revaluation : (it) - : : = (813) Additions : . - : - > 2503 2.593 Disposais - i) ~ (2) (125 Translers 89 210 3 174) (1,718) . ‘AsatDec 312003 43,900 —*10,648, 1) 79 24,356 = 3895 86570 Depreciation Ast Jan 01 2003 : 934 303 11,315 Transfers : - = - = ‘Charge forthe year = 23 . K 2017 Relired on disposals 2 (2) a = {72) (74) ‘As at Dec 312003 + 4463 32 : + 13,258 Not book value As atDec 312003 43,900 9.485 33th &7 12,655, 3,895 733312, As atDec31 2002 43.811 9.539, R13; 463 3,038 73,599. Cost or valuation As at Jan 01 2003 43,811 10,473 3,690 6 23,675 174 3,038 84,937, : - : = (602) - - (az) > 2,584 2,584 3) : - (78) - (125) 43,900 10,658 3,683 9 24,379 ‘3886 (86,595. As at Jan 01 2003 oar 10,067 2 + 11329 ‘Transfers - - 5 1) 3 3 (Charge forthe year : 231 : 2,020 Retired on isposals : = : : ‘As at Dec 34 2003 32 - = 3275 Net book value ‘As atDec31 2003 43,893 ‘As at Dec 31 2002 suysuco.Notes To The Financial Statement For The Year Ended December 31,2003, COMPANY, Restated 2002 8, NETCURRENT ASSETS 2003 SM ) (i) Inventories Gross. 3,902 ‘Less provision for slow moving and obsolete items, as Net 3.253 bby $141M in 2003 compared to a decrease of $190M in 2002. 42) (i Inventory categories Fuel Spares Fertiizers and chemicals Other Product stock categories Sugar Molasses Livestock ‘Amounts due from related parties Lochaber Linited ‘Amounts due to related parties Booker Tate 67 ‘Government of Guyana - Lease rentals 437 ‘Sugar Industry Labour Welfare Fund 4,023 SM 3957 51 3,445 7 485 863 2003 SM 3,902 3957 (51) 3,253 ES 'No obsolete stocks were charged against the provision in 2003 (2002 $22M). Additionally he provision has been increased L227 41525 ‘COMPANY Restated 2002 Standing cane ‘Standing cane is accounted for in accordance with IAS 41 ‘The difference between the opening and closing balance 2003, is included in cost of seles Balance as al January 01,2003 4,400 Taken to prof and loss accountretained earings 225 Balance as at December 31,2003, ‘Standing cane by age Company Group 2003 2002 2003 2002 Age of cane 41-5 Months 2A 647.64 2639152 24,824.34 24,424.52 6 Months 1.258.386 89874 1,256.96 808.74 7 Months 643.00 486.50 543.00 486.50 Months 1912.70 241290 1.91270 2,541.90 9 Months 5791.30 5,240.30 5,869.00 40 Months 5 5001.50 5.81190 5,121.50 4 Months 36660 3.47270 3,646.80 42 Months 449.60 85200 449.60 43,540.60, 45,089.66 43,913.30 43,430.36 ‘Farmers Price per tonne of sugar 4,400 2003 33 3 182 4,027 4173 4,239 30. 4625) $ 52,108 Company 2002 23 Ea 237 4428 11545 1270 474 4400 $ 51,137 2003 3 3 492 4,050 4,800 239) 4815 § 52,108 4625 4,400 4675 442 Group 2002 51,137Guyana Sugar Corporation INC. Notes To The Financial Statement Fr The Year En Deca 31,2003 8, CASH AND CASH EQUIVALENTS 2003 000s 3,740 35 3,029 2002 oots __s@_ $M sy 41 725 212 725 212 253 12 TT 12 7 5142 740 983 740 983 TAT Tar TAT Tare 4; ‘5A? 610 615: 814 7686) “82 193.85 191.27 193.85 191.27 342.86 308.19 342.86 308.19 244.31 20057 24431 200.57 COMPANY GROUP Restated Restated 2003 2002 2003 2002 — et 21,167 24.212 27167 24,212 10. 4477 310. 447 28,077 25,389 28,077 25,388 Us Doller Staring Euro Guyana Dollar Rate of conversion GsUss GsicBP GSEUR 10, SALES AND EXPORT LEVY Sales Sugar Molasses Total Sales Export sales levy ‘Amount payabie 5,989 11,958 Remited by Govemment (6.989) (11,958) 25,369 ‘Sales after remission of levy 28077. 25,380 28,077. ‘The Suget Levy Act of 1974 was repealed as of July 01,2003. Therefore, the amount of export sales levy payable was calculated under the Act upto that dale: Under section 6(1) ofthe Financial Administraion and Audit Act, the Goverment of Guyana ‘agreed to remit $5,968M (2002$11,958M) of he Sugar Levy payable. {2003 the Government of Guyana relinquished ts right to clalm payment of any unpaid suger levy totaling $2,876M therefore the ‘amount was written back in the curent period. eee names Restated Restated 2002 2003 2002 SM 79,498 716,350 825 942 360 ss 5,010 4219 5,989 (6.989) 11,958 (11958) 2003 SM. 79,498) 18,350 825, 942 360 5 5010 4219 2,384 1878 2.384 1,878 28,077 25,380 28077 25,389 ‘expenses and part of the management fee, All assets and lances and some trade receivables and payables. Europe usa Canada Caribbean Guyana ‘Al expenditure is incurred in Guyana, withthe of feos a based Gyan, vih he excapon ore eat ‘The Directors consider therefore that segmentation of net profit and assets by geographic area would not be meaningful 11. LOANS Goverment of Guyana COMPANY, Restated 2003 2002 453 2 GROUP Restated 2003 2002 su SM. SM. SM. 453 a ‘The oan from the Goverment of Guyana (GoG) represents en on-lending of a loan from the Caribbean ‘Bank (CDB) for US$5,050,000to finance various Drainage and Development Irigation projects, Total funds received al December 31, 2003 amounted to US$2,321,653 (2002 US$109, 798). Interest is charged atthe rate of 3% per annum on the principal and paid quarterly ‘The loan isto be repaid starting 10 years after the date of the fist disbursement in 34 equal semi annual instalments. ‘The dale of the first cisbursement was July 2002,Notes To The Financial Statement For The Yor Ended Daconber 31,2003, COMPANY, Restated 2003 2002 SM. SM. 412. NET LOSS) BEFORE TAXATION (044) (a) ARer charging - Shrew Wages and salaries Social security contrbutions Defined benefit pension Kabilty (note 14(c)) Materials and services purchased Lease obligations Research and development exnense. Directors’ fees & expenses (Note (b) below) Provision for slow moving and obsolete tars Depreciaon ‘Auxdiors! remuneration audit services Interest expense Management fees and expenses (Nole 19) ‘Aftor crediting ‘Net gain (loss) on exchange Inlerest income () Directors fees expenses Directors Vickram Oat (1) Ronald Ali Donaid Ramotar Dindyal Permaul Refendra Singh Hubert Rodney Brian Webd (2) Michael Boast David Carter(3) Barty Newton Errol Hanoman Patrick Falconer Joseph King . Seeee8 Bere Resignations (1)-Viekram Odit- resigned Oclober, 2003. (2}- Brian Webb - Resigned February, 2003 (8) - David Carter - Resigned Juy, 2003 ‘All directors expenses have been incurred on the company’s business. Direciors fees comprise those amounts paid lo or on behalf of directors in respect of services as diectois, (c) Write back of Camp Street Property “The property was disposed in February 2004 for §101.9M, Accordingly the net book value previously writen back of $112.5M an ocotathe trae ells and an arent si0.oM wos wien otGuyana Sugar Corporation INC. Notes To The Financial Statement For The Year Ended Deconber 31,2003, 43, TAXATION Current year Por yar unddovr provision property Corporation| Reconciliation of corporation tax expense and accounting profit: ‘Accounting loss) Corporation tax @35% ‘Add: Tax effect of expenses not deductible in determining taxable profits. Depreciation for accounting purposes Defined benefit pension cost 47a 82g 8 Others 885 902. 932 Deduct: Depreciation forex purposes (509) (440) (603) (410) Interest nd dividend O} (i) @ (10) Tax oss utilized d —___isn. the To ably (tect of ass) Ss — No deferred tax Faby has been recognized in relation to capital gains taxes which would become payable on factory plant, ‘machinery nd equipment should te revaluation surplus be realized upon disposal ofthe rovalued assets since the Corporation does not intend to dispose of these asses other than inthe normal couse of business. 14. DEFINED BENEFIT PENSION LIABILITY-COMPANY 2003 2002 Post x Post Ex Retirement STEPS Gratia Total | Retirement STEPS Gralla Total Medical Scheme Scheme Medical Scheme Scheme SM SM SM SH $M SM SM SH {2} The amounts recognizod in the balance sheet are as follows: ‘Defined beneft obgaton 292 6,645 _15,989 21,926 2735327 44,622 20,422 Fir value of assets = 637 = (5.347) (4,648) (4,648) Present vaive of unfunded contributions 292, 298 15,989) 16,579, 273, 67914822, 15,774 Unrecognized loss (38) (460) _(2,125)_(2,323) Defined benefit ability 254138 13,064 14,256 suysuca.Notes To The Financial Statement Fee Th Yor Endod Dacaber 31,2003, 2003 Post Ex Post Retirement STEPS Gratia Total Retirement STEPS Gratia Total Medical Scheme Scheme Medical Scheme Scheme M M MOSM M ™” SMM (b) Reconciliation of opening and losing defined beneft ably Defined benefit abit at ‘beginning of year 94 12542 12,870 92 1497 ‘Add net pension cost 248 1,69 1,968 1951405 Less company contrbuttonbenefis ald (204) (371) (583) (193) (300) Not pension cost 44 1,322 1,386 2 Defined benefit bilty at ‘end of year {c) The amounts recognized 2a staff costs inthe profit and [oss account are 2s follows: 13.864 14,256 4 ‘Current service cost Interest on defined benefit obigaton Expected rtum on Plan Assets ‘Amortized nel (gainVloss Total included in staff costs {(@) Actual return on Plan Assets, Expocted rtum on Pian assets ‘Actuarial gain on Plan Assets ‘Actual retum on Pian Assots (e) Actuarial assumptions () Funded Scheme Discount rate Solar increases Pension increases Rate of retum on Pension Plan assets (i) Unfunded Schome Discount rate Salary increases Pension increases Rate of return on Pension Plan assels There is no Pension Scheme forthe subsidiary company. euyeucaGuyana Sugar Corporation INC. Notes To The Financial Statement For The Your Ends Deco 31,2003 415, INVESTMENT IN SUBSIDIARY. HUB SI ad oo Bags ee a ee aa A the nana and operating polee of Lochaber Linfee trough the membership ois Board. Ivestnent nthe subedary {is accounted for using the equity method in the corporation's own financial slatements, COMPANY, GROUP 16. ADJUSTMENT TO OPENING RESERVES: a he st AS 41 standing cane 4400 = 4,400) : Restatement of defined benefit pension liability following 2938 : 2.039 : actuarial adjustment 208 = a = 17. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES ‘COMPANY, GROUP Restated Restated 2003 2002 2003 Expenditure authorized by the Directors but not committed —##1_$M_ a Routine expenditure za 41,600 4701 4,600 ‘Skeldon Sugar Modemization Project on ae 0 Oe Sasi cen) ‘532 ‘876 1532 Tie 7433 The caplal expenditure wile funded bya combination f facies on lentby Government, provided by ther supple of france and fromselfgenereed funds. Conary to previous practice, the Commissioner of Inlemal Revenue in 2000 sought io assess the Corporation on addional income forthe years of assessment 1995, 1996 and 1997 arising fom the remission of sugar levies by the Govemment of Guyana for the years 1994, 1995 and 1996, The Corporaion does not accep this amended ax eaten and objected Ic the computations onthe rounds tha the levies have been corety treated for lax purposes, No provision has been made inte financial statements for taxation arising rom any such computations as the Coporatonhas been advised thal hey would beincorect 18. CREDIT, INTEREST RATE AND CURRENCY EXPOSURE Expoturetcredtintrestateandcurency raises inthe nomalcourse ofthe Crporator's busines. Creditrisk ‘The Corporation has exposure fo credit buyers of sugar, Management has a credit policy in place and exposure to cedi risks ‘moritored on an ongoing bass, Credit evaluains are performed onal customers requiring credit All buyers have consistently paid antime. {investments are only alowed i quid secures and only wih counterparties which have a credit rang of AA or better. Given these high ctedratings management does no expect any counterparty ofailtomeetitsobkgations. ‘Atthe Balance Shee! date there were no signticant concentrations of credit isk. Interest rate risk The Corporation has no interest-bearing Kabilties except for a govemment debenture (note 6) and the GoGICDB drainage & {niga joan (note 11) The rales of interest on the debenture and the GoGICDB loan are fixed and thee i therefore no Interest rate risk. The Corporation obiains compettve quotations before investing funds, Guysucc.Notes To The Financial Statement For Th Yor Ended Deconber 31, 2003, Currency exposure ‘The Corporation incurs currency risk on sales and purchases which are denominated in a currency other than the Guyana Dollar. The Corporation seeks to minimize exposure to cuency risk by entering ito forward contracts and other hedge instruments . The ‘currencies giving rset ths riskare primariy the Euro, US dollar and pound stering. At the reporting date the Corporation had assets inforeign curency consisting of cash and rade accounts receivable and lables consisting of trade accounts payable. The foreign currency assets considerably exceeded the foreign currency fables, ais normal throughout the year. Details of balances at balance sheet date denominaled in foreign currencies are as follows: uss, Euro Sterling 000 000 ‘000. ‘Accouns payable em iG 7 ‘Accounts receivable 3,194 370 - Due to related parties < = (302) ‘Asatthe balance sheet date the Corporatio had entered into forward contracts sell B6M Euros relating to 2004 sales alan average rale of USS/Euro= 1,012, Subsequent tothe balance sheet dale 69M Euros relating 102005 sales and 27 AM Euros for 2006 sales ‘were sod forward at an average rate of USS/Euro= 1.104Zend 1.2052 respectively. Thisrepresents 85% 68% and 31% of sales into Euopein2004, 2005 and 2006 respectively. 49, RELATED PARTIES Booker Tale Limited a company incorporated in he United Kingdom manages the Corporation under an agreement dated March 26, ‘1996. Under this agreement Booker Tate receives a fixed fe, a production incentive fee and reimbursement of certain expenses. The amounts pa to Booker Tate under the agreement were as folows: Fixed fee (£380,000 per annum) Producton incantive fee Expenses Total During 2004 the Corporation enteredinto a new agreement with Booker Tale. 20, PENDING LITIGATION. ‘There are several acfons for which the lability ofthe Corporation fany, has notbeen determined. The maximum potential iablty at ‘the end ofthe yearis estimated at $142M (2002$205M).Guyana Sugar Corporation INC. Ten Year Review 18060 003 53 2057 117618 HOME CONSUMPTION: (TONNES) 21800 411700 9424 5.909 4,053 46,508 16812 7210 8 or _ATERNGEPRICE TONNE) 5,101 EXPENOMTURE (SM) ROWMENTCOST 7902 MATERALS AND SERVICES 6732 (208s) PROAT BEFORE xo) 4.401 (ROSS}/PROAT BEFORE DAAVOLEVY 4,820 (A0SS)/PROFT AFTER i) a (ROSS)/PROAT AFTER "WKSEFORELEVY AVERAGE MDMARKET. EXGNGE ATE (C8708) cuysuco