Ethiopian Sugar Corporation

Fiscal Year 2011 EC (2019/2020 GC)

Qualified

All Years

Download Original Audit Report FY 2010 FY 2012

Revenue

ETB 8.9B

Net Loss

ETB -14.6B

Total Assets

ETB 150.8B

Total Equity

ETB -17.8B

Profit Breakdown

Key income statement items

Cash Flow Activities

Net cash from each activity

Asset Composition

Breakdown of total assets

Statement of Profit or Loss and Other Comprehensive Income

FY 2011 EC

Item	Amount (ETB)
Revenue
Revenue	8,872,878,586
Cost of sales	-8,329,720,902
Gross profit	543,157,683
Operating Items
Other operating income	218,943,074
General & administrative	-2,674,940,802
Foreign currency exchange loss	-3,017,540,068
Fair value gain/(loss) cane and fruit	-1,170,691,297
Loss on cane at fair value	-125,367,275
Provision for bad debt expense	-87,782,488
Provision for stock obsolescence	-43,886,058
Provision expense - Standing Cane	-31,707,226
Operating profit/(loss)	-10,411,861,967
Finance and Tax
Finance costs/charges	-4,182,972,833
Profit/(loss) before tax	-14,594,834,801
Income tax expense	38,032,044
Profit/(loss) for the year	-14,556,802,757
Other Comprehensive Income
Remeasurement gain/(loss) on retirement benefits obligations	8,721,746
Total comprehensive income for the year	-14,548,081,011

Statement of Financial Position

As at end of FY 2011 EC

Item	Amount (ETB)
Non-Current Assets
Property, plant and equipment	122,978,559,844
Right use of asset - Land	364,503,135
Right use of asset - Office	300,368
Bearer plant	966,252,994
Investment in ESISC and MSF	3,992,000
Current Assets
Trade and other receivable	1,206,504,342
Stock & goods in transit	6,761,563,406
Biological Asset - Agricultural	3,230,210,323
Biological Asset - Animal	3,299
Tax receivable	3,647,632,716
Advance and prepayments	8,280,004,749
Cash and cash equivalents	3,356,382,398
Total assets	150,795,909,576
Equity
Paid up capital	14,083,024,490
Capital contribution	418,273,766
Contribution for capital expenditure	101,054,623
Sugar Industry Development Fund	18,666,049,921
Reserve for SIDF	-7,290,739,206
Asset revaluation reserve	11,977,353,299
Accumulated loss	-55,722,648,339
Other reserve	3,796,029
Total equity	17,763,835
Non-Current Liabilities
Long term loan	132,505,301,565
Employee benefit obligation	43,827,359
Deferred tax liability	4,056,974,669
Current Liabilities
Trade and other payable	13,472,216,337
Retention payable	2,190,924,265
Interest payable	2,726,675,328
Long term loan - current maturity	8,823,693,834
Sugar development fund payable	167,514,534
Tax payable	1,215,203,864
Contract liability	128,902,226
Accrual	729,351,602
Provision	499,159,410
Total liabilities	168,559,744,993
Total equity and liabilities	150,795,909,576

Cash Flow Statement

FY 2011 EC

Item	Amount (ETB)
Operating Activities
Profit before tax	-14,594,834,801
Depreciation of property, plant and equipment and bearer plant	2,057,743,276
Impairment/(reversal) of PPE and bearer plant	4,022,047,511
Provision/(reversal) for loss of plantation	31,707,226
Fair value change on biological asset	1,200,374,646
Stock obsolescence	43,886,058
Bad debt expense	88,696,071
Amortization of right use of assets	13,832,083
Severance expense (current service and interest)	1,290,065
Decrease/(increase) in trade and other receivables	-522,883,728
Decrease/(increase) in advance and prepayment	266,504,891
Decrease/(increase) in inventories	470,309,983
Decrease/(increase) in biological asset	-1,115,464,723
Increase/(decrease) in trade and other payables	8,717,130,210
Net cash flows from operating activities	690,338,769
Investing Activities
Investment in property, plant and equipment and sugar development	-16,318,531,624
Expenditure on bearer plant	-258,763,430
Net cash flows used in investing activities	-16,577,295,054
Financing Activities
Proceeds from borrowings	22,881,989,175
Repayment of borrowings	-6,453,729,327
Additional fund from SIDF for project expansion	1,967,883,170
Contribution to SIDF	-2,064,709,048
Capital contribution	-25,438,525
Net cash flows from/(used in) financing activities	17,560,379,259
Net Change in Cash	1,673,422,975
Closing Cash & Equivalents	3,356,382,398

Audit Findings

#1

The Sugar Corporation Import account (01-12500-6000) exhibits a material long-standing outstanding balance.

#2

We have identified notable deficiencies within the inventory management system.

#3

There was no system of internal control over the accounting of intercompany accounts.

#4

The financial statements reflect advance payments to contractors (Note 17) amounting to a significant balance.

#5

We have identified notable deficiencies within the cost accounting system of the Corporation.

#6

The property, plant and equipment consisting of CIP-tissue culture for an amount has exhibited no movement over a significant period and has not been capitalized.

#7

Included in trade and other receivables is receivable from Commercial Bank of Ethiopia.

#8

Despite the fact that a provision of ETB 265,468,615 was held in advance and prepayment accounts of Wonji Sugar Factory for the out growers.

#9

We identified significant deficiencies in the internal control over cash and cash equivalents.

#10

The revenue shown in the statement of profit or loss and other comprehensive income is the cumulative total of the revenue recorded in the separate records of the head office and the sugar factories measured at transfer prices. This constitutes a departure from IFRS.

#11

As discussed in Note 28.6 (Capital management) of the notes to the financial statements, gearing (Debt to Equity ratio) of the Corporation stood at 114% which imply the Corporation has larger proportion of debt than equity.

#12

Paid up capital of the Corporation is summation of the carrying amount of net asset of each of the existing factories upon establishment until it is increased through in kind contribution by the government.

Extracted from audited financial statements via OCR. Figures in Ethiopian Birr.