Archroma Pakistan : Transmission of Quarterly Report for the Period Ended 30 June 2023

3RD QUARTER REPORT 2023 (Ended June 2023)

CONTENTS

Company Information

Directors' Report

Condensed Interim Statement of Financial Position

Condensed Interim Statement of Profit or Loss and other Comprehensive Income

Condensed Interim Statement of Cash Flows

Condensed Interim Statement of Changes in Equity

Notes to the Condensed Interim Financial Statements

COMPANY INFORMATION

Chairman	M Veqar Arif
Board of Directors	Mujtaba Rahim	- Chief Executive Officer
	Marcos Furrer	(Alternate: Irfan Chawala)
	Patrick Verraes
	Shahid Ghaffar
	Thomas Bucher	(Alternate: Naveed Kamil)
	Yasmin Peermohammad
Audit Committee	Shahid Ghaffar	- Chairman
	M Veqar Arif
	Thomas Bucher	(Alternate: Naveed Kamil)
	Irfan Lakhani	- Secretary
Human Resources and	Yasmin Peermohammad	- Chairperson
Remuneration Committee	Mujtaba Rahim
	Thomas Bucher	(Alternate: Naveed Kamil)
	Irfan Lakhani	- Secretary
Management Committee	Mujtaba Rahim	Naveed Kamil
	Irfan Chawala	Qazi Naeemuddin
	Muhammad Altaf
Chief Financial Officer	Irfan Chawala
Company Secretary	Irfan Lakhani
Bankers	Bank Al Habib Limited
	Habib Bank Limited
	Habib Metropolitan Bank Limited
	MCB Bank Limited
	Meezan Bank Limited
	National Bank of Pakistan
	Standard Chartered Bank (Pakistan) Limited
Auditors	KPMG Taseer Hadi & Co. Chartered Accountants
Legal Advisor	Fazleghani Advocates
Share Registrar	FAMCO Associates (Pvt) Limited
	8-F, Next to Hotel Faran, Nursery
	Block-6, P.E.C.H.S.,
	Shahra-e-Faisal, Karachi
Registered Office	1-A/1, Sector 20,
	Korangi Industrial Area, Korangi, Karachi
Factories	Petaro Road, Jamshoro
	LX-10,LX-11, Landhi Industrial Area, Karachi
Sales & Marketing Offices	Katar Bund Road, Off. Multan Road,
	Thokar Niaz Baig, Lahore
	P-277, Kashmir Road, Amin Town, Faisalabad
Website	www.archroma.com.pk
Email	[e-mail]

REPORT OF BOARD OF DIRECTORS

The Directors of your Company are pleased to present the financial report for the nine months ended 30 June 2023, together with the condensed interim financial information of the Company for the period ended 30 June 2023.

COMPOSITION OF BOARD

The composition of the Board is as follows:

a) Male members:	6
b) Lady member:	1
Out of the above:
a) Executive Director:	1
b) Non-Executive Directors:	4
c) Independent Directors:	2

BUSINESS OVERVIEW

Archroma's major consumption Markets i.e. Textiles' and Construction Industry demand & consumer sales continued to remain slow both for local as well as exports during the third quarter of the current Financial Year under review, mainly due to prevailing Macroeconomic and fiscal challenges, ever highest inflation, energy & commodity prices triggered after Russia- Ukraine conflict and devastating floods affecting one- third of the Country.

Despite the challenging environment and less than 50% production and capacity utilization for the Textiles' Industry, your Company was able to increase its market share position to achieve higher net sales of PKR 21,036 million during the nine months period ended 30th June 2023 versus PKR 19,416 million in comparison to the same period last year. This increase in sales of 8% was mainly contributed by Textile Effects, whose sales increased by 5% and Paper, Packaging & Coatings business, whose turnover increased by 46%, in comparison to the same period last year.

Gross Margins of all the business segments remained under pressure mainly due to severe devaluation of PKR versus US Dollar and other foreign currencies and consequential increase in Raw materials' import costs

On behalf of the Board

Mujtaba Rahim

Chief Executive Officer

and therefore declined to PKR 5,435 million during the nine months period ended 30th June 2023 versus PKR 5,590 million in comparison to same period last year.

Higher borrowing costs, foreign exchange losses and further increase in Taxation rates for Registered and Corporate businesses during the period further reduced the bottom-line profitability of the Company to PKR 903 million as against PKR 1,467 million achieved in comparison to the same period last year.

Projects

After the closing of Global acquisition of Huntsman Textile effects business and local acquisition of Archroma Chemicals Pakistan (Private) Limited formerly Huntsman Textile Effects Pakistan during the financial year under review, by your Company's Holding Company i.e. Archroma Textiles GmbH, your Company is now actively working towards the merger of Archroma Chemicals Pakistan (Private) Limited into Archroma Pakistan Limited.

The Board of Directors of the Company had approved the Draft scheme of Arrangement in its meeting held on 27 April 2023, which was further approved by the members of the Company in the Extraordinary General Meeting held on 23 June 2023. Currently Scheme of Arrangement is pending for issuance of sanction order by the Honorable Sindh High Court.

Future Outlook

The ongoing Russia-Ukraine conflict, Global Energy and Commodities prices and availability situation, and consequential adverse Balance of Trade and Forex reserves' situation of Pakistan, continues to keep the outlook for the Textiles' Exports somewhat uncertain. However, with the recent additional financing agreement of USD 3 Billion with IMF is not only expected to contribute positively towards improvement in the overall macro-economic situation of Pakistan but also support business development for local Textiles and Construction Industry of the Country in the upcoming fiscal year.

Irfan Chawala

Director

Karachi: 25th July 2023