National Refinery : Transmission of Quarterly Report for the Period Ended September 30, 2023

Condensed Interim Financial Statements for the Quarter Ended September 30, 2023

Refining with Vision

Contents

02 Corporate Information

1. Directors' Review - English
2. Directors' Review - Urdu
3. Condensed Interim Statement of Financial Position
4. Condensed Interim Statement of Profit or Loss
5. Condensed Interim Statement of Profit or Loss and other
   Comprehensive Income
6. Condensed Interim Statement of Changes in Equity
7. Condensed Interim Statement of Cash Flows
8. Notes to the Condensed Interim Financial Statements

NATIONAL REFINERY LIMITED

Corporate Information

Board of Directors

Laith G. Pharaon

Alternate Director: Mohammad Raziuddin
Wael G. Pharaon
Alternate Director: Babar Bashir Nawaz
Shuaib A. Malik - Chairman
Shamim Ahmad Khan
Abdus Sattar
Sajid Nawaz
Khondamir Nusratkhujaev
Chief Executive Officer
Jamil A. Khan
Chief Financial Officer
Nouman Ahmed Usmani
Company Secretary
Muhammad Atta ur Rehman Malik
Audit Committee
Shamim Ahmad Khan	Chairman
Abdus Sattar	Member
Babar Bashir Nawaz	Member
Alternate Director for Mr. Wael G. Pharaon
Shaikh Ather Ahmed	Secretary
Human Resource and Remuneration (HR&R) Committee
Shamim Ahmad Khan	Chairman
Shuaib A. Malik	Member
Babar Bashir Nawaz	Member
Alternate Director for Mr. Wael G. Pharaon
Jamil A. Khan	Member
Nouman Ahmed Usmani	Secretary

Auditors

A. F. Ferguson & Co.

Chartered Accountants

Legal Advisor

Ali Sibtain Fazli & Associates

Legal Advisors, Advocates & Solicitors

Bankers

Habib Bank Limited

Meezan Bank Limited

Allied Bank Limited

National Bank of Pakistan

Bank Alfalah Limited

United Bank Limited

Askari Bank Limited

Faysal Bank Limited

BankIslami Pakistan

The Bank of Punjab

Habib Metropolitan Bank Limited

Dubai Islamic Bank

MCB Bank Limited

Samba Bank Limited

Bank AL-Habib Limited

Industrial & Commercial Bank of China Limited

Registered Office

7-B, Korangi Industrial Area, Karachi-74900

P.O. Box: 8228, Karachi-74900

UAN: [phone]

PABX: [phone]+92-21-35064977-79

Website: www.nrlpak.com

E-mail: [e-mail]

Share Registrar

CDC Share Registrar Services Limited CDC House, 99-B, Block 'B', S.M.C.H.S., Main Shahra-e-Faisal, Karachi - 74400.

Tel: (Toll Free) 0800-23275

Fax: [phone]

Email: [e-mail]

Website: www.cdcsrsl.com

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NATIONAL REFINERY LIMITED

Directors' Review

On behalf of the Board of Directors of National Refinery Limited, I am pleased to present a brief review of the financial results and operations of your Company for the quarter ended September 30, 2023.

During the quarter, your company earned profit after tax of Rs. 3,203 million resulting in earning per share of Rs. 40.05 as compared to loss after tax of Rs. 4,391 million that resulted in loss per share of Rs. 54.92 in the corresponding period.

Fuel segment of the Company experienced a significant turnaround in its financial performance. In the current quarter, it earned profit after tax of Rs. 1,995 million in contrast to loss after tax of Rs. 4,457 million in the same period last year. Improvement in fuel segment profitability is mainly attributed to consistent increase in petroleum product prices in the international market during the quarter, which resulted in improved gross refinery margins. The performance was further improved with the help of effective measures taken by Government authorities that relieved pressure on the exchange rate, thereby resulting in exchange gain of Rs. 367 million in the current quarter as compared to loss of Rs. 4,058 million in same period last year. Additionally, the measures taken by the Government to address vulnerabilities along porous borders, resulted in restoration of demand for petroleum products to certain extent.

Your Company has recently embarked a significant change by producing Very Low Sulphur Furnace Oil (VLSFO), commonly known as "Bunker Fuel" after necessary change in crude mix and adjustments in production process. VLSFO is a premium product and environment friendly fuel that is now mandated for use by all sea vessels under the International Maritime Organization's (IMO) 2020 regulations. Furthermore, following the successful resumption of normal operations at Hydro Production Unit (HPU), the Company has also initiated the production and sale of High Speed Diesel (HSD) compliant with PAK-V specifications. Both of these recent initiatives are anticipated to contribute positively to the sustainability of refinery operations.

Lube Segment earned profit after tax of Rs. 1,208 million as compared to profit after tax of Rs. 66 million during the corresponding quarter. Better product margins due to increasing price trend resulted in improved profitability.

The Company's working capital requirement continues to remain on higher side, primarily due to the elevated crude oil prices compared to corresponding period. Further, increase in bank borrowing rates in the current quarter as compared to same period last year has resulted in mark-up cost of Rs. 1,825 million during this period, which was Rs. 1,280 million during the same period last year.

The Government has approved Pakistan Refinery Policy 2023 for existing brownfield refineries in August 2023. The policy offers fiscal incentives for upgrade of existing refineries, subject to certain terms and conditions. We appreciate the support of the Government in considering the upgradation of the refineries and are in contact with the Ministry of Energy (MoE) and Oil and Gas Regulatory Authority (OGRA) for smooth implementation of the policy.

We thank our shareholders, customers and staff for their continuous support and trust in the Company.

Islamabad

October 09, 2023

Chairman

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