WORKING TOGETHER

FOR A

BETTER FUTURE

CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED DECEMBER 31, 2022

CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED DECEMBER 31, 2022

CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED DECEMBER 31, 2022

TABLE OF CONTENTS

COMPANY INFORMATION

01

DIRECTORS' REPORT

02

INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS

04

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

05

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

06

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)

07

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)

08

CONDENSED INTERIM STATEMENT OF CASH FLOWS (UN-AUDITED)

09

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)

10

CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED DECEMBER 31, 2022

COMPANY INFORMATION

Chairman (Non-Executive)

Mr. Kamal A. Chinoy

Independent Directors

Dr. Amjad Waheed

Ms. Nausheen Ahmad

Mr. Nihal Cassim

Non-Executive Directors

Mr. Haroun Rashid

Mr. Mustapha A. Chinoy

Mr. Shuji Tsubota

Director and Chief Operating Officer

Mr. Samir M. Chinoy

Chief Executive Officer

Mr. Yousuf H. Mirza

Chief Financial Officer

Mr. Mujtaba Hussain

Company Secretary & Head of Legal Affairs

Ms. Schaane Ansari

External Auditors

A. F. Ferguson & Co., Chartered Accountants

Legal Advisor(s)

Mrs. Sana Shaikh Fikree

Investor Relations Contact

Shares Registrar

THK Associates (Pvt.) Ltd

Plot No. 32-C, Jami Commercial Street 2 D.H.A., Phase VII, Karachi - 75500.

Phone: +92 21-111-000-322, +92 21-37120628-29

Email: sfc@thk.com.pk

Registered Office

101, Beaumont Plaza, 10, Beaumont Road, Karachi - 75530. Telephone Numbers : +9221-35680045-54

UAN : +92 21-111-019-019, Fax : 021-35680373

E-mail : investors@isl.com.pk

Lahore Office

Chinoy House, 6 Bank Square, Lahore - 54000. Telephone Nos: +92 42-37229752-55, UAN: +92 42-111-019-019

Fax: +92 42-37249755

E-Mail: lahore@isl.com.pk

Islamabad Office

Office No.303-A, 3rd Floor, Evacuee Trust Complex, Sector F-5/1, Sir Agha Khan Road, Islamabad.

Telephone Nos: +92 51-2823041 - 2 Fax: 051-28230413

Multan Office

Office No. 708-A, "The United Mall", Plot No. 74, Abdali Road, Multan.

Telephone Nos: +92 61-4570571

Factory

399 - 404, Rehri Road, Landhi, Karachi.

Telephone Nos: +92 21-35013104 - 5 Fax : 021-35013108

E-mail: info@isl.com.pk

Service Center

Plot# LE-73-79,102-103,112-118,125-129 Survey # Nc.98, Near Arabian Country Club, National Industrial Park, Bin Qasim, Karachi. Telephone Nos: +92 21-34724184

Website

www.isl.com.pk

Bankers

Allied Bank Limited

Askari Bank Limited

Bank Al Habib Limited

Bank Alfalah Limited

BankIslami Pakistan Limited

Dubai Islamic Bank Pakistan Limited

Faysal Bank Limited

Habib Bank Limited

Habib Metropolitian Bank Limited

Industrial and Commercial Bank of China Limited

MCB Bank Limited

MCB Islamic Bank Limited

Meezan Bank Limited

National Bank of Pakistan

Samba Bank Limited

Standard Chartered Bank (Pakistan) Limited

United Bank Limited

01

CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED DECEMBER 31, 2022

DIRECTORS' REPORT

FOR THE PERIOD ENDED DECEMBER 31, 2022

The Directors of your Company are pleased to present the financial statements for the half year ended December 31, 2022.

Pakistan is currently facing an economic crisis, characterized by a high fiscal deficit, significant trade and current account imbalances, and high inflation. The country has also struggled with a shortage of foreign currency, which has made it difficult to pay for imports and service its debt. The IMF program has stalled and other international financing being unavailable, the country's foreign exchange reserves are on a continuous decline. The State Bank of Pakistan has placed strict restrictions over import payments, albeit unannounced. LC opening has nearly become impossible for import of raw materials. As a result, large-scale manufacturing in the country has declined by 5.5%. Consequently the demand for your Company's products has also dropped sharply.

Inflation has remained stubbornly high at 25% resulting in the State Bank of Pakistan's policy rate increasing to 17%. It is expected that the policy rate will continue to increase. While the official value of PKR has been maintained between Rs. 225 to 230 against USD, the gap between interbank and open market rate has been severely hurting the already precarious foreign currency reserves and diverting remittances from banking channels to the grey market.

Global steel prices declined sharply near the start of the financial year to USD 570 /MT after having reached an all-time high of USD 1,100 /MT last year. However, thereafter steel prices have seen a recovery on the back of production cuts by major mills across the world and ease of COVID related restrictions in China.

In the wake of such uncertain economic conditions your Company has been focusing on vigilant inventory management in line with the weak market demand while undertaking certain key productivity measures to counter the economic headwinds. Some of the measures taken include shutdowns during peak hours to save energy costs, lowering the borrowing levels to save on interest costs and restricting capital spending to key initiatives only.

Gas availability has remained a challenge in winter and has had an adverse impact in meeting the Company's energy requirements. It is expected that gas supply will improve in the coming months.

Rigorous efforts are being employed in working capital management to reduce leverage. As a result, the Company's net cash generated from operating activities was Rs. 9 Bn in the half year.

In the backdrop of the above stated weak economic conditions, the Company's revenue dropped by 22% from Rs. 43 Bn (SPLY) to Rs. 34 Bn for the half year ended 31 Dec 2022. High-interest rates with extreme volatility in exchange rates increased the finance costs and exchange loss by more than 3 times. The Company posted a profit after tax of Rs. 61 million and EPS of Rs. 0.14 compared to PAT of Rs. 4,224 million and EPS of Rs. 9.71 in the same period last year. In these uncertain times, your Company is proactively working towards meeting the challenges of this tough economic environment.

We thank the management and staff for their untiring efforts towards the Company's goals. The Board would also like to express its appreciation to our valued customers, dealers, vendors, banks and all other stakeholders for their cooperation and trust.

We pray to Allah for the continued success of your Company.

Mr. Yousuf H. Mirza

Mr. Kamal A. Chinoy

Chief Executive Officer

Chairman

Karachi : January 27, 2023

02

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International Steels Ltd. published this content on 22 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 February 2023 05:26:14 UTC.