Pakistan Synthetics : Transmission of Third Quarterly Report for the period ended March 31, 2024

PAKISTAN SYNTHETICS LIMITED

BOARD OF DIRECTORS	MR. KHURSHID AKHTAR	CHAIRMAN - INDEPENDENT
	MR. YAKOOB HAJI KARIM	CHIEF EXECUTIVE
	MR. NOMAN YAKOOB	EXECUTIVE
	MR. ABID UMER	NON - EXECUTIVE
	MR. MUBBASHIR AMIN	NON - EXECUTIVE
	MR. ALI KAMAL	INDEPENDENT
	MR. FARAZ YOUNUS BANDUKDA	INDEPENDENT
	MS. SADAF SHABBIR	INDEPENDENT
AUDIT COMMITTEE	MR. ALI KAMAL	CHAIRMAN
	MR. MUBBASHIR AMIN
	MR. FARAZ YOUNUS BANDUKDA
HUMAN RESOURCE AND	MR. FARAZ YOUNUS BANDUKDA	CHAIRMAN
REMUNERATION COMMITTEE	MR. MUBBASHIR AMIN
	MR. NOMAN YAKOOB
CHIEF FINANCIAL OFFICER	MR. SHAHID YAQOOB
COMPANY SECRETARY	MR. MUHAMMAD IMRAN
BANKERS	ASKARI BANK LIMITED
	AL BARAKA BANK PAKISTAN LIMITED
	BANK AL HABIB LIMITED
	BANK OF PUNJAB LIMITED
	BANK AL-FALAH LIMITED
	BANK ISLAMIC PAKISTAN LIMITED
	DUBAI ISLAMIC BANK PAKISTAN LIMITED
	FAYSAL BANK LIMITED
	HABIB BANK LIMITED
	HABIB METROPOLITAN BANK LIMITED
	MEEZAN BANK LIMITED
	SONERI BANK LIMITED
AUDITORS	BDO EBRAHIM AND CO.
	CHARTERED ACCOUNTANTS
HEAD OF INTERNAL AUDIT	MR. JAFFAR IQBAL
REGISTRAR	F.D REGISTRAR SERVICES (PVT.) LTD. OFFICE # 1705, 17TH
	FLOOR, SAIMA TRADE TOWER-A, I.I. CHUNDRIGAR
	ROAD, KARACHI.
LEGAL ADVISOR ADVOCATE	TASAWUR ALI HASHMI
REGISTERED OFFICE	OFFICE # 1504, 15TH FLOOR, EMERALD TOWER,
	BLOCK 5, CLIFTON, KARACHI
FACTORY	F-1, 2, 3, & 13, 14 & 15 HUB INDUSTRIAL
	TRADING ESTATE DISTRIC LASBELLA, BALOCHISTAN.
	PLOT # A-5, N.W.I.Z, PORT QASIM AUTHORITY, KARACHI

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PAKISTAN SYNTHETICS LIMITED

DIRECTORS' REVIEW

The Board of Directors of Pakistan Synthetics Limited takes pleasure in presenting review of the performance of the Company together with the financial statements for the nine months' period ended March 31, 2024:

OPERATING AND FINANCIAL PERFORMANCE

During the period under review, the Company recorded net sales revenue of Rs. 9,350.63 million as compared to Rs. 10,252.68 million during the same period last year. This decline is due to decrease in overall quantity sold. Gross profit fall from Rs. 1,908.157 million to 1,425.852 million on account of higher input cost. Increase in input cost mainly attributable to higher fuel, power and raw & packing material cost. The Administrative expenses increased by 29.10% mainly due to impact of rising inflation over each cost component. Distribution expenses which mainly consist of outward freight were declined by 31.07% on account lower sales volume. Decline in other operating expenses represents the impact of extraordinary exchange loss of Rs. 243 million incurred in the corresponding period last year. Higher utilization of short term borrowing facilities and rise in discount rates to its highest ever have resulted in increased Finance cost of the Company from Rs. 271.39 million (March 2023) to Rs. 624.323 million (March 2024). During the current period, the Company has earned a net profit of Rs. 356.533 million as compared to a net profit of Rs. 670.080 million for the same period in the previous year. The profit is translated into earning per share of Rs. 2.57 (2023: Rs. 4.83).

FUTURE OUTLOOK

The country is facing extra ordinary economic challenges and its impacts are now visible on the industry. The short to medium term outlook is extremely uncertain as both the economic and political landscape shift continuously. Due to high energy tariffs as well as a high cost of borrowing, the cost of doing business has increases substantially. We do not anticipate any substantial improvement in business conditions in the near future due to the high prevailing policy rate, as well as a consistent rise in the cost of energy. The management understand the current local and international economic and political climate and the adverse effect it has had on the company. The management is continuously making efforts for growth in sales volumes and profitability.

ACKNOWLEDGEMENT

The Directors express gratitude to the Shareholders, customers, vendors, Bankers and other business associates for their unwavering patronage and support. Their continued collaboration is deeply appreciated by the Company's Leadership.

For and on behalf of the Board of Directors

_____________________	____________________
YAKOOB HAJI KARIM	NOMAN YAKOOB
CHIEF EXECUTIVE	DIRECTOR
Date: April 29, 2024
Karachi

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PAKISTAN SYNTHETICS LIMITED

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
AS AT MARCH 31, 2024
		March 31,	June 30,
		2024	2023
		(Un-audited)	(Audited)
	Note	--------------(Rupees in '000)------------
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment	5	2,928,889	3,225,828
Right-of-use assets		14,831	22,246
Long term loan to employees		2,513	1,610
Long term deposits		4,209	4,209
Investment in associates	6	1,480,271	1,398,365
		4,430,713	4,652,258
CURRENT ASSETS
Stores and spares		410,225	289,601
Stock-in-trade	7	4,213,575	3,200,803
Trade debts	8	2,370,944	1,427,591
Loans and advances		139,590	17,863
Short term deposits and prepayments		24,172	10,938
Short term investments		4,381	3,846
Other receivables		2,032	2,032
Taxation - net		97,897	-
Cash and bank balances	9	22,065	3,052
		7,284,881	4,955,726
TOTAL ASSETS		11,715,594	9,607,984
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Authorised share capital
140,000,000 (June 30, 2023: 140,000,000) ordinary shares of Rs. 10 each		1,400,000	1,400,000
Issued, subscribed and paid-up capital
138,699,000 (June 30, 2023: 138,699,000) ordinary shares of Rs. 10 each		1,386,990	1,386,990
Reserves		2,880,104	2,523,571
		4,267,094	3,910,561
NON-CURRENT LIABILITIES
Long term borrowings	10	593,191	811,685
Lease liability		6,230	13,485
Deferred liabilities		159,303	151,332
Deferred income - government grant		67,867	85,909
Deferred taxation		28,113	64,074
		854,704	1,126,485
CURRENT LIABILITIES
Trade and other payables		2,708,559	2,739,346
Short term borrowings	11	3,560,450	1,380,819
Accrued markup		64,514	23,306
Current portion of long term borrowings	10	214,003	94,239
Current portion of lease liabilities		14,583	15,831
Current portion of deferred government grant		26,290	30,202
Taxation - net		-	281,798
Unclaimed dividend		5,397	5,397
		6,593,796	4,570,938
TOTAL EQUITY AND LIABILITIES		11,715,594	9,607,984
CONTINGENCIES AND COMMITMENTS	12

The annexed notes from 1 to 22 form an integral part of these condensed interim financial statements.

CHIEF FINANCIAL OFFICER

CHIEF EXECUTIVE

DIRECTOR

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PAKISTAN SYNTHETICS LIMITED

CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS (UN-AUDITED)

FOR THE NINE MONTHS AND THREE MONTH PERIOD ENDED MARCH 31, 2024

		Nine months period ended	Three months period ended
		March 31,	March 31,	March 31,	March 31,
		2024	2023	2024	2023
	Note	------------------------------ (Rupees in '000) ------------------------------
Revenue from contracts with customers	13	9,350,627	10,252,679	3,898,751	4,442,284
Cost of sales		(7,924,775)	(8,344,522)	(3,315,824)	(3,584,890)
Gross profit		1,425,852	1,908,157	582,927	857,394
Administrative and general expenses		(123,873)	(95,947)	(44,003)	(36,473)
Distribution and selling costs		(152,515)	(221,269)	(73,729)	(96,245)
Other operating expenses		(58,871)	(339,802)	(16,353)	(226,326)
		(335,259)	(657,018)	(134,085)	(359,044)
Operating profit		1,090,593	1,251,139	448,842	498,350
Other income		83,927	19,787	16,139	148
Finance costs		(624,323)	(271,397)	(244,334)	(129,177)
Profit before tax		550,197	999,529	220,647	369,321
Taxation	14	(193,664)	(329,449)	(80,355)	(109,964)
Profit for the period		356,533	670,080	140,292	259,357
			(Rupees)
Earnings per share - basic and diluted	15	2.57	4.83	1.01	1.87

The annexed notes from 1 to 22 form an integral part of these condensed interim financial statements.

CHIEF FINANCIAL OFFICER

CHIEF EXECUTIVE

DIRECTOR

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PAKISTAN SYNTHETICS LIMITED

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)

FOR THE NINE MONTHS AND THREE MONTH PERIOD ENDED MARCH 31, 2024

	Nine months period ended	Three months period ended
	March 31,	March 31,	March 31,	March 31,
	2024	2023	2024	2023
	------------------------------	(Rupees in '000) ------------------------------
Profit for the period	356,533	670,080	140,292	259,357
Other comprehensive income	-	-	-	-
Total comprehensive income for the period	356,533	670,080	140,292	259,357

The annexed notes from 1 to 22 form an integral part of these condensed interim financial statements.

CHIEF FINANCIAL OFFICER

CHIEF EXECUTIVE

DIRECTOR

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PAKISTAN SYNTHETICS LIMITED

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY

FOR THE NINE MONTHS PERIOD ENDED MARCH 31, 2024

Balance as at July 01, 2022 (Audited)

Total comprehensive income for the period ended March 31, 2023

Profit for the period

Other comprehensive income

Balance as at March 31, 2023 (Un-Audited)

Balance as at July 01, 2023 (Audited)

Total comprehensive Income for the period ended March 31, 2024

Profit for the period

Other comprehensive income

Balance as at March 31, 2024 (Un-Audited)

Issued,			Reserves
Capital	Revenue reserves
subscribed
reserve			Total	Total
and paid-up
Share	General	Unappropriated	reserves
capital
premium	reserve	profit
---------------------------------------------	(Rupees in '000) -------------------------------------------
924,660	140,100	292,450	1,757,523	2,190,073	3,114,733
-	-	-	670,080	670,080	670,080
-	-	-	-	-	-
-	-	-	670,080	670,080	670,080
924,660	140,100	292,450	2,427,603	2,860,153	3,784,813
1,386,990	140,100	292,450	2,091,021	2,523,571	3,910,561
-	-	-	356,533	356,533	356,533
-	-	-	-	-	-
-	-	-	356,533	356,533	356,533
1,386,990	140,100	292,450	2,447,554	2,880,104	4,267,094

The annexed notes from 1 to 22 form an integral part of these condensed interim financial statements.

CHIEF FINANCIAL OFFICER

CHIEF EXECUTIVE

DIRECTOR

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PAKISTAN SYNTHETICS LIMITED

CONDENSED INTERIM STATEMENT OF CASH FLOWS (UN-AUDITED)

FOR THE NINE MONTHS PERIOD ENDED MARCH 31, 2024

		March 31,	March 31,
		2024	2023
	Note	------------- (Rupees in '000) -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Cash (used in) / generated from operations	16	(785,103)	1,103,960
Staff gratuity paid		(9,057)	(4,509)
Financial charges paid		(504,504)	(186,038)
Taxes paid		(608,562)	(262,102)
Net cash (used in) / generated from operating activities		(1,907,226)	651,311
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditure		(22,450)	(194,991)
Proceeds from disposal of property, plant and equipment		-	6,049
Investment in associate		(100,000)	-
Net cash used in investing activities		(122,450)	(188,942)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of lease liability		(10,257)	(9,497)
Repayment of long term borrowings		(120,684)	(107,518)
Proceeds from long term borrowings		-	128,588
Investment in Associates		-	(1,050,000)
Short term murabaha, salam and istisna - net		1,703,263	864,576
Net cash flows from / (used in) financing activities		1,572,322	(173,851)
Net decrease in cash and cash equivalents during the period		(457,354)	288,518
Cash and cash equivalents at beginning of the period		(287,423)	(171,179)
Cash and cash equivalents at end of the period		(744,777)	117,339
CASH AND CASH EQUIVALENTS COMPRISE:
Cash and bank balances	9	22,065	160,640
Running Finance and Running Musharakah	11	(766,842)	(43,301)
		(744,777)	117,339

The annexed notes from 1 to 22 form an integral part of these condensed interim financial statements.

CHIEF FINANCIAL OFFICER

CHIEF EXECUTIVE

DIRECTOR

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PAKISTAN SYNTHETICS LIMITED

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED) FOR THE NINE MONTHS PERIOD ENDED MARCH 31, 2024

1. STATUS AND NATURE OF BUSINESS
   Pakistan Synthetics Limited ("the Company") was incorporated on November 18, 1984 as a private limited company in Pakistan and subsequently converted into a public limited company on December 30, 1987. The shares of the Company are listed on Pakistan Stock Exchange with effect from June 27, 1995. The principal activity of the Company is manufacturing and sale of Plastic Caps, Crown Caps, PET resin, Preform and BOPET resin. The registered office of the company is situated at office no. 1504, 15th Floor, Emerald Tower, Block 5, Clifton, Karachi.
   The manufacturing facility of the Company is situated at F-1,2,3 and 13,14 & 15, Hub Industrial Trading Estate, District Lasbella Balochistan and Plot No. A-5, N.W.I.Z, Port Qasim Authority, Karachi.
2. BASIS OF PREPARATION

2.1 Statement of compliance

These condensed interim financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable in Pakistan for interim financial reporting comprise of;

• International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, 2017;
• Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as notified under the Companies Act, 2017; and
• Provisions of and directives issued under the Companies Act 2017.

Where the provisions of and directives issued under the Companies Act, 2017 differ with the requirements of IAS 34 or IFAS, the provisions of and directives issued under the Companies Act, 2017 have been followed.

2.1.1 These condensed interim financial statements are unaudited and is being submitted to the shareholders as required under section 237 of the Companies Act, 2017.

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PAKISTAN SYNTHETICS LIMITED

1. These condensed interim financial statements do not include all the information and disclosures required in an annual audited financial statements and should be read in conjunction with the annual audited financial statements of the Company for the year ended June 30, 2023. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company's financial position and performance since the last annual financial statements.
2. The comparative statement of financial position presented in these condensed interim financial statements as at June 30, 2023 have been extracted from the annual audited financial statements of the Company for the year ended June 30, 2023, whereas the comparative condensed interim statement of profit or loss and condensed interim statement of comprehensive income, condensed interim statement of changes in equity and condensed interim statement of cash flows together with the notes thereto for the nine months period ended March 31, 2023 have been extracted from the condensed interim financial statements of the company for the nine months period ended March 31, 2023.

1. Basis of measurement
   These condensed interim financial statements have been prepared under the historical cost convention, except as stated otherwise.
2. Functional and presentation currency

These condensed interim financial statements are presented in Pakistan Rupees ( "Rupees" or "Rs." ) which is the functional currency of the Company.

1. MATERIAL ACCOUNTING POLICIES INFORMATION AND CHANGES THEREIN
   The accounting policies adopted and the methods of computation followed in the preparation of these condensed interim financial statements are the same as those applied in the preparation of audited annual financial statements of the Company as at and for the year ended June 30, 2023.
2. ACCOUNTING ESTIMATES AND JUDGEMENTS
   The preparation of condensed interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reporting amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience. Actual results may differ from these estimates.
   The significant judgements made by the management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual financial statements as at and for the year ended June 30, 2023.

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