Sitara Peroxide : Transmission of Quarterly Report for the Period Ended 31.12.2022

HALF YEARLY REPORT DECEMBER

2022

Company Information
Board of Directors	Mr. Yasir Ahmed Awan	Chairman
	Mr. Imran Ghafoor	Chief Executive Officer
	Mrs. Sharmeen Imran	Non-Executive Director
	Mr. Haroon Ahmed Zuberi	Non-Executive Director
	Mr. Junaid Makda	Non-Executive Director
	Mr. Saqib Anjum	Non-Executive Director
	Mr. Saim Bin Saeed	Independent Director
Chief Financial Officer	Mr. Shahid Irshad
Company Secretary	Mr. Mazhar Ali Khan
Head of Internal Audit	Mr. Zia-ul-Mustafa
Audit Committee	Mr. Saim Bin Saeed	Chairman
	Mr. Yasir Ahmed Awan	Member
	Mr. Haroon Ahmed Zuberi	Member
Human Resource and	Mrs. Sharmeen Imran	Chairperson
Remuneration Committee	Mr. Imran Ghafoor	Member
	Mr. Saqib Anjum	Member
External Auditors	M/s Yousuf Adil
Chartered Accountants
Legal Advisor Registered	Sahibzada Waqar Arif
Office	601-602, Business Centre, Mumtaz Hassan
	Road, Off. I. I. Chundrigar Road, Karachi - 74000
	Ph : (92 21) 32401373, 32413944
Company Website	www.sitaraperoxide.com
Bankers	Al Baraka Bank (Pakistan) Limited
	Askari Bank Limited
	Bank Alfalah Limited
	Faysal Bank Limited
	Habib Bank Limited
	MCB Bank Limited
	Meezan Bank Limited
	National Bank Limited
	Soneri Bank Limited
	Standard Chartered Bank (Pakistan) Limited
	Summit Bank Limited
	United Bank Limited
	JS Bank Limited
	First Women Bank Limited
	Bank Al Habib Limited
Share Registrar	THK Associates (Private) Limited
Plot No. 32-C, Jami Commercial Street 2,
	DHA, Phase VII, Karachi - 75500, Pakistan.
	UAN: (92 21) 111-000-322
	Ph:	(92 21) 35310183-84
	Fax:	(92 21) 35310191
Head Office & Project	26 - KM Sheikhupura Road, Faisalabad. Ph :
Location	(92 41) 2400900-2,2400904-5
Sitara Peroxide Limited // Half Yearly Dec 31, 2022	1

Directors' Report

DIRECTORS REVIEW

I, on the behalf of Board of Directors of your Company, have pleasure in presenting you the un-audited condensed interim financial information for the half year ended December 31, 2022.

The quarter under review has been very testing period for your Company. The Company is facing challenge of unprecedented rise in tariff of RLNG . The Company uses RLNG as feedstock in manufacturing of Hydrogen Peroxide and its captive power house in also run on RLNG . Unlike exporters, fertilizer manufac turers etc which receive natural gas at subsidized rate, local Hydrogen Peroxide manufacturing industry is exposed to fluctuations in tariff of RLNG in international market. Global demand of RLNG has been on higher side and global supply has been facing bottlenecks; resulting in higher tariff of RLNG to hydrogen peroxide manufacturing industry.

Net sales during the six months period under review remained Rs. 386 million against net sales of Rs. 1,044 million during the corresponding period of financial last year. Drop in turnover during the period is due to decrease in sales volume; and sales volume decreased due to lower capacity utilization of plant. Cost of sales remained to Rs. 499 million as compared to 986 million. Due to lower capacity utilization and rising cost of production, gross margins of your C ompany remained negative. During first six months, Company incurred net loss after tax of Rs. 220 million and loss per share of Rs. 3.99; as against net loss after tax of Rs. 92 million and loss per share of Rs. 1.67 in corresponding period of last financial year.

During quarter ended December 31, 2022, net sales remained Rs. 71 million against net sales of Rs. 594 million during the corresponding period of financial last year. Cost of sales remained Rs. 145 million as compared to 511 million. The Company incurred net loss after tax of Rs. 111 million and loss per share of Rs. 2.01 against profit after tax of Rs. 7 million and earning per share of Rs. 0.13 in comparative quarter of corresponding financial year.

Despite all challenges, management of the Company has been positive about future business outlook. Demand of hydrogen peroxide and its prices are expected to remain strong in future. We are confident of much improved financial performance in second half of ongoing financial year.

The Board takes this opportunity to thank all stakeholders for their continued support. We also appreciate and acknowledge the continued commitment and hard work of our employees.

Allah may give us the courage to face the challenges ahead. Aameen

On behalf of Board of Directors

Faisalabad	HAROON AHMED ZUBERI	IMRAN GHAFOOR
April 04, 2023	Director	Chief Executive Officer

2	Sitara Peroxide Limited // Half Yearly Dec 31, 2022

Directors' Report
Sitara Peroxide Limited // Half Yearly Dec 31, 2022	3

Auditors' Review Report

INDEPENDENT AUDITORS' REVIEW REPORT

TO THE MEMBERS OF SITARA PEROXIDE LIMITED

REVIEW OF INTERIM FINANCIAL STATEMENTS

Introduction

We have reviewed the accompanying condensed interim statement of financial position of Sitara Peroxide Limited (the Company) as at December 31, 2022, the related condensed interim statement of profit or loss, condensed interim statement of comprehensive income, condensed interim statement of changes in equity, and condensed interim statement of cash flows and notes to the financial statements for the six month period then ended (here-in-after referred to as the "interim financial statements"). Management is responsible for the preparation and presentation of these interim financial statements in accordance with accounting and reporting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on these interim financial statements based on our review.

The figures of the condensed interim statement of profit or loss, condensed interim statement of comprehensive income for the three-month period ended December 31, 2022 and related comparative information have not been reviewed, as we are required to review only the cumulative figures for the six month period ended December 31, 2022.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial statements are not prepared, in all material respects, in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting.

Emphasis of Matter

During the period, the Company has incurred a gross loss and net loss for the period of Rs.

1. million and Rs. 220.06 million respectively (June 30, 2022: Rs. 63.20 million and Rs.

1. million respectively), and as at December 31, 2022, current liabilities exceed current assets by Rs. 349.09 million (June 30, 2022: Rs.107.67 million). The Company was unable to pay installments of long term financing and rental payments of sukuks of Rs. 177.46 million (June 30, 2022: Rs. 174.67 million). The plant of the Company has remained shut down from October 20, 2022 until March 02, 2023. These conditions along with other matters as disclosed in note 1.2 to interim financial statements, indicate the existence of material uncertainty about company's ability to continue as going concern.

These financial statements have been, however, prepared on going concern basis for the reasons more fully explained in note 1.2 to these interim financial statements.

The engagement partner on the review resulting in this independent auditor's review report is Muhammad Sufyan.

Chartered Accountants

Lahore

Date: April 18, 2023

UDIN: RR202210180n4fPx6TYw

4	Sitara Peroxide Limited // Half Yearly Dec 31, 2022