Gatron Industries : Transmission of Quarterly Report for the Interval Ended 30-09-2022

Quarterly

Report

September 30, 2022

CONTENTS

02 Company Info

UNCONSOLIDATED PRESENTATION

03 Administrators’ Report

1. Administrators’ Report (in Urdu)
2. Condensed Interim Assertion of Monetary Place
3. Condensed Interim Assertion of Revenue or Loss
4. Condensed Interim Assertion of Complete Revenue
5. Condensed Interim Assertion of Adjustments in Fairness
6. Condensed Interim Assertion of Money Flows
7. Notes to the Condensed Interim Monetary Statements

CONSOLIDATED PRESENTATION

32 Administrators’ Report

1. Administrators’ Report (in Urdu)
2. Condensed Interim Assertion of Monetary Place
3. Condensed Interim Assertion of Revenue or Loss
4. Condensed Interim Assertion of Complete Revenue
5. Condensed Interim Assertion of Adjustments in Fairness
6. Condensed Interim Assertion of Money Flows
7. Notes to the Condensed Interim Monetary Statements

55 Notes for Members

Administrators’ Report

Pricey Shareholders,

On behalf of the Board of Administrators, we’re happy to current the un-audited condensed monetary statements of Gatron (Industries) Restricted for the three months ended September 30, 2022.

Monetary Assessment:

The monetary synopsis for the interval beneath overview are as under:

• Web gross sales Rs.4,896 million,
• Working loss Rs.41 million,
• Loss earlier than revenue tax Rs.278 million,
• Loss after revenue tax Rs.370 million,
• Loss per share Rs.9.65

Throughout the interval beneath overview, your Firm has achieved web gross sales income of Rs.4,896 million as in comparison with Rs.4,953 million in corresponding interval of final 12 months. On account of devaluation of Pak Rupee, the gross sales haven’t diminished considerably in financial phrases, nevertheless quantum of gross sales of each important merchandise i.e., Polyester Filament Yarn (PFY) and PET Preforms diminished by 28% and 37% respectively. The gross sales quantity of PFY remained at decrease aspect and stock of Completed PFY additionally elevated from round 6,200 tons in finish June 2022 to above 10,000 tons in finish September 2022 because of fairly an overhang of stock out there because of sudden surge of imported PFY. That is the very best ever stock of Completed PFY ever within the historical past of the Firm. The manufacturing of PFY was additionally low on account of this and it mirrored common plant capability utilization on this quarter of 73% solely. Alternatively, gross sales quantity of PET Preforms remained at decrease aspect throughout the interval as in comparison with final 12 months corresponding interval as a result of influence of floods and extraordinary inflation affecting carbonated tender drink demand.

On the time when the Firm has invested closely in growth plant & equipment, the decrease working charges leading to greater value of producing and on the opposite aspect vital improve in finance value, put strain on web results of the Firm. Additional promoting costs of native yarn are beneath strain because of overhang stock of imported PFY which is being dumped with no anti-dumping duties being paid = evaded at import by the merchants. Nevertheless as famous under the Authorities is now severe in tackling this evasion.

Distribution & promoting bills considerably elevated by round 102% as in comparison with final corresponding interval and it’s primarily because of improve in freight and transportation prices. Alternatively, administrative bills elevated by 42% primarily elevated because of inflationary elements due to Pak Rupee devaluation.

Finance prices have additionally elevated considerably as in comparison with final 12 months corresponding interval because of vital improve in Inventory in Commerce and Receivables which leading to greater working capital necessities on the opposite aspect low cost price virtually reached to double i.e., 15%.

On the Stability Sheet entrance as in comparison with June 30, 2022, shares elevated by Rs.5,537 million to succeed in to Rs.11,855 million. Debtors elevated by Rs.254 million to succeed in Rs.4,577 million whereas collectors elevated by Rs.3,888 million to succeed in Rs.7,556 million. In view of the above, Firm’s short-term borrowing elevated by Rs.2,981 million as in comparison with June 30, 2022, to fulfill financing in working capital necessities.

As already reported earlier that with the resolve of the Authorities to strongly pursue the gathering of Anti-Dumping Obligation on Filament Yarn, your Firm has already proceeded with the part 2 of its growth plan. This can permit the Firm the capability to supply 95,000 to 99,000 tons every year of blended denier (up from 75,000 tons present potential). That is 3 times the 33,000 tons of comparable blended denier manufacturing potential of the Firm 5 years in the past in 2017. Additionally, the polymer plant of capability greater than 200,000 tons/12 months is being put in, which is able to begin Insha Allah in April 2023. This Polymer will now be capable of feed all of the PFY traces together with the brand new capability which in any other case the present polymer plant would have been capable of feed solely one-third of the PFY capability. Moreover, it additionally permits manufacturing of extra polymer for extra diversified merchandise for native sale, personal use in addition to export. These diversified merchandise additionally embrace Cationic polymer for Cationic yarn in addition to Movie grade Silica resin. The extra vibrant polymer will make it possible to the Firm to increase the manufacturing of FDY yarn by Direct spinning if it so choses. Additional, the export alternative is being tapped to acquire low price of long run financing of capital prices of the respective manufacturing plant. This could additionally permit higher utilization of manufacturing capability at a time when the home market is in a flux.

Moreover, by December 2022, your Firm Insha Allah will improve its functionality of manufacturing recycled yarn from PET bottle flakes upto almost 12% of its PFY capability, thus rising the potential of extra various set of consumers for a similar and rising additional the range within the already broad vary of various sorts of PFY that the Firm is ready to produce.

Additionally, by December 2022 the auto dealing with, auto inspection and auto packing undertaking of PFY will Insha Allah be in full swing, beneath this undertaking the yarn trolleys transfer on a observe and the yarn bobbins are inspected, graded, and packed in sealed & labelled cartons with none human touching the bobbins. The inspection, grading in addition to packed manufacturing information additionally auto uploaded to the digital information of the Firm.

Your Firm has put up in-house knitting machines to provide Knitted Material of excellent high quality for the native patrons of such product. This undertaking is extra to point out the best way for improved high quality of Polyester Knitted cloth to the market and to exhibit that the identical could be produced along with your Firm’s yarn. At second the out there capability can convert 2.50% of your Firm’s PFY manufacturing into Knitted Material.

Throughout the interval beneath overview, Pakistan’s largest SAP (Techniques, Purposes and Merchandise) implementation went reside at Gatron. We’ve got applied and activated modules in Finance, Manufacturing, Provide Chain, Tasks and HR. This can carry a end in a cultural shift that brings collectively individuals, information, and processes from throughout the enterprise to create a greater buyer expertise and turn out to be extra aggressive in an more and more digital world.

CHALLENGES FACED AND FUTURE OUTLOOK

• Pursuant to the ultimate dedication of antidumping duties made by the NTC in 2017, the Importers and overseas exporters of PFY had additionally filed appeals earlier than the Appellate Tribunal. The Appellate Tribunal after greater than 4 years remanded the case again to the NTC in December 2021 to re-calculate the duties for sure facets.

Accordingly, NTC has diminished the notified antidumping duties within the vary of two.78% to six.82% (common 4.8%) earlier than remand the notified antidumping duties have been within the vary of three.25% to 11.35%. These have been already low to cowl the precise dumping/damage and are a lot decrease than Anti-Dumping Duties imposed on Chinese language exporters of Polyester Filament yarn: