Maple Leaf Cement Factory : Transmission of Quarterly Report for the Period Ended 30.09.2022

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CONTENTS

CONDENSED INTERIM UNCONSOLIDATED FINANCIAL STATEMENTS
Company Information........................................................................................................................	2
Directors' Review.................................................................................................................................	3
Condensed Interim Unconsolidated Statement of Financial Position..........................	8
Condensed Interim Unconsolidated Statement of Profit or Loss ...............................	10
Condensed Interim Unconsolidated Statement of Comprehensive Income..........	11
Condensed Interim Unconsolidated Statement of Cash Flows ...................................	12
Condensed Interim Unconsolidated Statement of Changes in Equity......................	13
Selected Explanatory Notes to the Condensed Interim Unconsolidated
Financial Statements...................................................................................................................	14
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Directors' Review..............................................................................................................................	27
Condensed Interim Consolidated Statement of Financial Position............................	28
Condensed Interim Consolidated Statement of Profit or Loss .....................................	30
Condensed Interim Consolidated Statement of Comprehensive Income ...............	31
Condensed Interim Consolidated Statement of Cash Flows.........................................	32
Condensed Interim Consolidated Statement of Changes in Equity...........................	33
Selected Explanatory Notes to the Condensed Interim
Consolidated Financial Statements ......................................................................................	34

Quarterly Report 2022 1

COMPANY INFORMATION

Board of Directors			MCB Islamic Bank Limited
Mr. Tariq Sayeed Saigol ..........................	Chairman	National Bank of Pakistan
Mr. Sayeed Tariq Saigol ..............	Chief Executive	PAIR Investment Company Limited
Mr. Taufique Sayeed Saigol			Samba Bank Limited
Mr. Waleed Tariq Saigol			Silk Bank Limited
Mr. Danial Taufique Saigol			Soneri Bank Limited
Ms. Jahanara Saigol			Standard Chartered Bank (Pakistan) Limited
Mr. Shafiq Ahmed Khan			Summit Bank Limited
Mr. ulfikar Monnoo			The Bank of Punjab
Syed Mohsin Raza Naqvi			United Bank Limited
Executive Directors			Auditors
Mr. Sohail Sadiq.............................................	Finance	KPMG Taseer Hadi	Co.,
Mr. Yahya Hamid.......................................	Marketing	Chartered Accountants
			351 Shadman-1, Jail Road, Lahore, Pakistan.
Audit Committee
		Tel:	92 42 111-KPMGTH (576484)
Mr. Shafiq Ahmed Khan..........................	Chairman	Fax:	92 42 37429907
Mr. ulfikar Monnoo...................................	Member
Legal Adviser
Mr. Waleed Tariq Saigol............................	Member
Mr. Danial Taufique Saigol.......................	Member	Mr. Abdul Rehman	ureshi - Advocate High
			Court
Human Resource & Remuneration
Registered Office
Committee
Mr. Shafiq Ahmed Khan..........................	Chairman	42-Lawrence Road, Lahore.
Mr. ulfikar Monnoo...................................	Member	Phone: [phone]
Mr. Danial Taufique Saigol.......................	Member	Fax:	92 42 36368721
			E-mail: mohsin.naqvi	kmlg.com

Chief Financial Officer

Syed Mohsin Raza Naqvi

Company Secretary

Mr. Muhammad Ashraf

Chief Internal Auditor

Mr. eeshan Malik Bhutta

Bankers of the Company

Allied Bank Limited

Askari Bank Limited

Bank Alfalah Limited

Bank Al-Habib Limited

BankIslami Pakistan Limited

Albaraka Bank (Pakistan) Limited

Dubai Islamic Bank Limited

Faysal Bank Limited

FINCA Microfinance Bank Limited

Habib Bank Limited

Habib Metropolitan Bank Limited

MCB Bank Limited

Factory

Iskanderabad, District: Mianwali

Phone: [phone]

Call Center (24/7) 0800-41111

Share Registrar

ision Consulting Limited

Head Office: 3-C, LDA Flats, First Floor, Lawrence Road, Lahore

Phone: [phone]

Fax: [phone]

E-mail: shares vcl.com.pk

Company Website:

www.kmlg.com

Note:

MLCFL's Financial Statements are also available at the above website.

• Maple Leaf Cement Factory Limited

DIRECTORS' REVIEW

In compliance with Section 237 of the Companies Act, 2017, the Directors of your Company have pleasure to present unaudited standalone and consolidated financial statements for the first three months of financial year 2022-23, ended 30th September 2022.

During the period under review, the Company recorded net consolidated turnover of Rs. 12,827 million against Rs. 9,896 million in the corresponding period last year. The top line of the Company increased by 30% mainly due to improvement in selling prices in the local market. Increase in selling prices is mainly due to high inflationary impact on cost side, especially fuel and power. Devastating floods have hit the country during the period under review and adversely impacted cement dispatches which in turn affected growth of the construction sector. This is in addition to lackluster implementation of large-scale projects, low utilization of PSDP budget and reduced demand in housing sector which have impacted the growth of the sector negatively.

Comparative data of capacity utilization and cement dispatches for the period under review is as under: -

Particulars	(July to September)	Variance
	2022	2021		Change		Percentage
	( ----------------------			M. Tons ----------------------	)
Production:
Clinker Production	854,830	1,200,422		(345,592)	(28.79%)
Cement Production	911,640	1,137,633		(225,993)	(19.87%)
Sales:
Domestic	872,039		1,094,679		(222,640)		(20.34%)
Exports	30,062		41,189		(11,127)		(27.01%)
Total	902,101	1,135,868		(233,767)	(20.58%)

Total Sales volume of 902,102 tons achieved depicts a decrease of 20.58% over 1,135,868 tons sold during the corresponding period. Domestic sales volume of 872,039 tons depicts a significant decrease of 20.34% as compared to corresponding period last year due to reasons discussed above. Political instability causing uncertainty is another major factor contributing to negative growth of the construction sector.

The Company's export volume decreased by 27.01% to reach 30,062 metric tons from 41,189 metric tons in corresponding period. Exports have not picked up post the American exodus from Afghanistan. This has resulted in slowing down of the economy and banking restrictions are another major reason for decline in export sales. Cement dispatches to rest of world are still not feasible due to high production costs in Pakistan as compared to global markets and increased shipping costs, impacting competitiveness in the regional markets.

Quarterly Report 2022 3

During the three months' period under review, global coal and oil prices remained high mainly because of ongoing war between Russia and Ukraine that has impacted the supply of oil from Russia which in turn caused prices of commodities to increase further. However, the Company was able to keep its fuel and power costs under control by procuring local coal at cheaper rates. The Company is also benefitting by use of pet coke which is cost effective due to higher energy content and inventory of imported coal and pet coke at affordable rates.

The Management of the Company has initiated cost control measures and adopted various strategies in all areas including use of alternative fuels and optimized operations of the plant with a specific focus to reduce fixed costs.

The Company was able to avoid the potential adverse impact due to hikes in electricity tariff by NEPRA by relying on own power generation sources i.e. coal fired power plant (CFPP), Solar Power Plant and Waste Heat Recovery Plant which is the cheapest source of electricity for the Company. Waste Heat Recovery Plant is now representing one third of the power mix of the Company. All aforementioned cost saving measures have contributed towards higher margins as compared to corresponding period last year.

On account of aforementioned factors impacting cost of production, the Company achieved consolidated gross profit of Rs. 3,695 million during the reporting period, an increase of 67% from Rs. 2,207 million in the corresponding period last year.

The Company recorded consolidated pre-tax profit of Rs. 1,966 million for the reporting period against consolidated pre-tax profit of Rs. 1,112 million in corresponding period. Consolidated tax component amounted to a charge of Rs. 588 million for the reporting period as compared to Rs. 273 million in the corresponding period mainly due to higher profits and increase in effective tax rate due to imposition of Super Tax.

Profits earned from MLPL are exempt from charge of income tax and amounted to Rs. 134 million for the first three months of financial year 2022-23.

The above factors have increased post-tax bottom line for the reporting period at a consolidated profit of Rs. 1,378 million as against Rs. 839 million for corresponding period last year, representing an increase of 64%.

During the period under review, monetary policy rate was reviewed by the State Bank of Pakistan (SBP) and enhanced from 13.75% to 15.00%. Due to this raise, the Company's finance cost has increased during 1st quarter of financial year as compared to corresponding period. The Temporary Economic Refinance Facility (TERF) and Long Term Finance Facility (LTFF) launched under the directives of the SBP have lent sustainable financial support to the Company by helping it avail long term borrowing at attractive mark-up rates to purchase imported plant and machinery and setting up new projects.

The Company's capacity enhancement project i.e., Line 4 (7,000 tpd) at its existing plant site is in final stages. The construction work is in progress with satisfactory pace. The said project is being financed with a mix of concessionary debt and internally generated cash flows. Management is targeting to achieve COD in 2Q of FY 2023.

• Maple Leaf Cement Factory Limited