Hoechst Pakistan : Transmission of Financial Statements for the Nine-Months Period Ended September 30, 2023

Hoechst Pakistan Limited

(formerly sanofi-aventis Pakistan Limited)

CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE NINE-MONTHS PERIOD ENDED SEPTEMBER 30, 2023

(UN-AUDITED)

Contents

	Page No.
Company Information	2
Directors' Report to the Shareholders (English)	3
Directors' Report to the Shareholders (Urdu)	5
Condensed Interim Statement of Financial Position	7
Condensed Interim Statement of Profit or Loss	8
Condensed Interim Statement of Other Comprehensive Income	9
Condensed Interim Statement of Changes in Equity	10
Condensed Interim Statement of Cash Flows	11
Notes to the Condensed Interim Financial Statements	12

Nine-Months Period Ended September 30, 2023

Page 1 of 19

Company Information

Board of Directors

Syed Babar Ali (Chairman)

Syed Hyder Ali

Mr. Arshad Ali Gohar

Syed Anis Ahmad Shah

Mr. Imtiaz Ahmed Husain Laliwala

Mr. Muhammad Salman Burney

Ms. Saadia Naveed

Mr. Sajjad Iftikhar

Ms. Iqra Sajjad

Chief Executive Officer

Mr. Sajjad Iftikhar

Chief Financial Officer

Mr. Yasser Pirmuhammad

Company Secretary

Mr. Mir Zulfiqar Hussain Khan

Auditors

A.F. Ferguson & Co.

Chartered Accountants

Legal Advisors

Khalid Anwer & Co.

Saadat Yar Khan & Co.

Ghani Law Associates

THS & Co.

Registrars & Share Transfer Office

FAMCO Associates (Private) Limited 8-F, Near Hotel Faran, Nursery, Block-6, P.E.C.H.S., Shahrah-e-Faisal, Karachi.

Tel: [phone]

URL: www.famco.com.pk

Contact

Tel: [phone]

Email: [e-mail]

URL

www.sanofi.com.pk

Bankers

Standard Chartered Bank (Pakistan) Limited

MCB Bank Limited

Habib Bank Limited

Allied Bank Limited

Citibank, N.A.

Deutsche Bank AG

National Bank of Pakistan

Registered Office

Plot 23, Sector 22,

Korangi Industrial Area,

Karachi - 74900, Pakistan

Postal Address

P.O. Box No. 4962, Karachi - 74000

Nine-Months Period Ended September 30, 2023

Page 2 of 19

Hoechst Pakistan Limited

(formerly sanofi-aventis Pakistan Limited)

Directors' Report to the Shareholders

The Directors are pleased to present the un-audited condensed interim financial statements of your Company, for the nine-months period ended September 30, 2023. These financial statements have been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 - "Interim Financial Reporting" and the provisions of and the directives issued under the Companies Act, 2017. In case requirements differ, the provisions of directives issued under the Companies Act, 2017 have been followed.

Total net sales for the nine-months period ended September 30, 2023, stand at Rs. 15,879 million, which grew by 13.1% compared to the same period last year. This growth was mainly driven by Enterogermina®, Clexane® and Lantus® which grew by 41%, 30% and 18% respectively.

The gross margin has remained constant at 27% when compared to the same period last year. Distribution and marketing expenses decreased to 12% of net sales from 14% in last year's comparative period mainly on account of curtailment of travelling and promotional activities. Administrative expenses remained stable at 4% of net sales; as they were in the same period last year.

Other expenses increased significantly to 10% of net sales from 4% in last year's comparative period primarily on account of adverse exchange rate movement resulting from an exchange loss of PKR 1,265 million during the period.

Furthermore, the challenging socio-political and macroeconomic factors including surging inflation, increasing policy rates and reduction in economic activity have a cascading impact on your Company's performance during the period under review. The cumulative impact of aforementioned factors has transpired into a loss after tax for the nine-months period ended September 30, 2023, amounting to PKR

52.8 million as compared to a profit after tax of Rs. 213.0 million during corresponding period of the year 2022.

During the period, an Investor Consortium led by Packages Limited (comprising Packages Limited, IGI Investments (Private) Limited and affiliates of Arshad Ali Gohar Group) acquired entire 52.87% shares held by Sanofi Foreign Participations B.V in the Company on April 28, 2023 in accordance with the terms of the Share Purchase Agreement executed between the parties on April 29, 2022. Earlier, Packages Limited also acquired a 6.07% shareholding in the Company as a result of mandatory tender offer on August 23, 2022, in accordance with the applicable Takeover Laws.

Accordingly, upon completion of applicable corporate approvals, the name of the Company has been changed to Hoechst Pakistan Limited with effect from September 27, 2023 and a Certificate of Incorporation on Change of Name has been issued by the Securities and Exchange Commission of Pakistan in this respect. This change of name shall have no effect on the principal line of business of the Company. The Company is now taking steps required for name change from Drug Regulatory Authority of Pakistan.

The new name encapsulates the rich legacy of the Company since making its footprint in Pakistan. The Company was incorporated in 1967, started manufacturing pharmaceuticals and specialty chemicals in 1972 and went public in 1977.

Nine-Months Period Ended September 30, 2023

Page 3 of 19

Hoechst Pakistan Limited

(formerly sanofi-aventis Pakistan Limited)

The management of the Company is committed to navigate through the challenging economic conditions through enhanced focus on portfolio optimization, cost control, better working capital management and operations management.

The Board of Directors would like to acknowledge the efforts and commitment of the employees.

By order of the Board

___________________	____________________
Syed Babar Ali	Sajjad Iftikhar
Chairman	Chief Executive Officer
Karachi: October 21, 2023

Nine-Months Period Ended September 30, 2023

Page 4 of 19

Nine-Months Period Ended September 30, 2023

Page 5 of 19

Nine-Months Period Ended September 30, 2023

Page 6 of 19

Hoechst Pakistan Limited (formerly sanofi-aventis Pakistan Limited) Condensed Interim Statement of Financial Position

As at September 30, 2023

September 30,	December 31,
2023	2022

Note

ASSETS

NON-CURRENT ASSETS

`

Fixed assets

-------------- Rupees in '000 -------------

(Un-audited)(Audited)

Property, plant and equipment	4
Investment properties
Intangible assets	5
Long-term loans to employees
Long-term deposits
Deferred taxation - net
CURRENT ASSETS
Stores and spares
Stock-in-trade	6
Trade debts - net	7
Loans and advances
Trade deposits and short-term prepayments	8
Short-term investments	9
Other receivables
Taxation - net
Cash and bank balances
TOTAL ASSETS
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Share capital
Reserves
NON-CURRENT LIABILITIES
Deferred liabilities
Defined benefit plan - gratuity fund
CURRENT LIABILITIES
Contract liabilities
Trade and other payables	10
Current maturity of long-term financing
Current maturity of deferred liabilities
Accrued mark-up
Unclaimed dividend
Unpaid dividend
Bank overdraft
Short-term borrowings
CONTINGENCIES AND COMMITMENTS	11

1,768,485

31,649

14,012

1,814,146

4,244

15,983

226,783

2,061,156

95,436

4,312,764

459,897

237,627

1,098,770

136,311

72,899

1,442,444

331,484

8,187,632

10,248,788

96,448

4,892,613

4,989,061

4,500

69,691

74,191

107,972

5,036,674

-

23,905

6,461

8,241

2,283

-

-

5,185,536

1,884,260

32,961

2,657

1,919,878

3,623

15,983

147,394

2,086,878

88,038

4,550,693

857,348

220,304

2,499,808

-

485,566

1,309,840

233,196

10,244,793

12,331,671

96,448

4,933,244

5,029,692

9,000

32,844

41,844

155,332

5,435,086

41,053

9,000

17,440

8,286

2,283

891,655

700,000

7,260,135

TOTAL EQUITY AND LIABILITIES

10,248,788 12,331,671

The annexed notes 1 to 20 form an integral part of these condensed interim financial statements.

Syed Babar Ali	Sajjad Iftikhar	Yasser Pirmuhammad
Chairman	Chief Executive Officer	Chief Financial Officer

Nine-Months Period Ended September 30, 2023

Page 7 of 19

Hoechst Pakistan Limited (formerly sanofi-aventis Pakistan Limited) Condensed Interim Statement of Profit or Loss

For the nine-months period and quarter ended September 30, 2023 (Un-audited)

Note

Nine Months Ended		Quarter Ended
September 30,	September 30,		September 30,	September 30,
2023	2022	2023	2022

------------------------------------- Rupees in '000 --------------------------------------

NET SALES	12
Cost of sales
GROSS PROFIT
Distribution and marketing costs
Administrative expenses
Other expenses	13
Other income

OPERATING PROFIT

Finance costs

14

PROFIT BEFORE TAXATION

Taxation - Current

Taxation - Prior

Taxation - Deferred

(LOSS) / PROFIT FOR THE PERIOD

15,879,229

(11,547,720)

4,331,509

(1,951,719)

(686,168)

(1,533,687)

269,967

(3,901,607)

429,902

(153,539)

276,363

(408,584)

-

79,389

(329,195)

(52,832)

14,045,248

(10,209,007)

3,836,241

(1,900,816)

(581,558)

(550,419)

52,104

(2,980,689)

855,552

(21,716)

833,836

(408,213)

(187,700)

(24,911)

(620,824)

213,012

5,831,380

(4,046,218)

1,785,162

(754,054)

(263,685)

(340,244)

173,034

(1,184,949)

600,213

(23,354)

576,859

(185,983)

-

78,622

(107,361)

469,498

4,521,404

(3,392,044)

1,129,360

(562,575)

(195,056)

(240,241)

13,176

(984,696)

144,664

(8,822)

135,842

(142,013)

-

30,326

(111,687)

24,155

(LOSS) / EARNINGS PER SHARE - basic and diluted (Rupees)	(5.48)	22.09	48.68	2.50

The annexed notes 1 to 20 form an integral part of these condensed interim financial statements.

Syed Babar Ali	Sajjad Iftikhar	Yasser Pirmuhammad
Chairman	Chief Executive Officer	Chief Financial Officer

Nine-Months Period Ended September 30, 2023

Page 8 of 19

Hoechst Pakistan Limited (formerly sanofi-aventis Pakistan Limited) Condensed Interim Statement of Comprehensive Income

For the nine-months period and quarter ended September 30, 2023 (Un-audited)

	Nine Months Ended		Quarter Ended
	September 30,	September 30,	September 30,	September 30,
	2023	2022	2023	2022
	----------------------------------	Rupees in '000 ----------------------------------
(LOSS) / PROFIT FOR THE PERIOD	(52,832)	213,012	469,498	24,155

Other comprehensive income - Items that will not be reclassified to profit or loss in subsequent periods (net of tax):

Actuarial loss on defined benefit plans

Deferred tax on actuarial loss on defined benefit plans

-

-

(90,068)

(28,501)

-

-

-

-

TOTAL OTHER COMPREHENSIVE LOSS FOR THE PERIOD	-	(118,569)	-	-
TOTAL COMPREHENSIVE (LOSS) / INCOME FOR THE PERIOD	(52,832)	94,443	469,498	24,155

The annexed notes 1 to 20 form an integral part of these condensed interim financial statements.

Syed Babar Ali	Sajjad Iftikhar	Yasser Pirmuhammad
Chairman	Chief Executive Officer	Chief Financial Officer

Nine-Months Period Ended September 30, 2023

Page 9 of 19