Leading Transformation

FOR THE QUARTER ENDED MARCH 31, 2024 (Un-audited)

Table of Contents

Company Information

02

Directors' Report (English)

03

Directors' Report (Urdu)

05

Condensed Interim Statement of Financial Position

08

Condensed Interim Statement of Profit or Loss and

09

Other Comprehensive Income

Condensed Interim Statement of Changes in Equity

10

Condensed Interim Statement of Cash Flow

11

Notes to the Condensed Interim Financial Statements

12

Company Information

BOARD OF DIRECTORS

SARFARAZ AHMED REHMAN

(Chairman)

ROMAN YAZBECK

(Chief Executive)

MUHAMMAD ZEESHAN

PATTARAPORN AUTTAPHON

PETER CALON

MIRZA REHAN BAIG

JUNAID IQBAL

COMPANY SECRETARY

SANA ENAIT HASHMI

AUDIT COMMITTEE

MIRZA REHAN BAIG

(Chairman)

PATTARAPORN AUTTAPHON

SANA ENAIT HASHMI

(Secretary)

HUMAN RESOURCE &

REMUNERATION COMMITTEE

SARFARAZ AHMED REHMAN

(Chairman)

ROMAN YAZBECK

JAY RAMOS

(Secretary)

AUDITORS

A. F. FERGUSON & CO.

Chartered Accountants

BANKERS

UNITED BANK LIMITED

STANDARD CHARTERED BANK PAKISTAN LIMITED

MCB BANK LIMITED

HABIB BANK LIMITED

CITI BANK N.A.

DEUTSCHE BANK A.G.

FAYSAL BANK LIMITED

HABIBMETRO BANK

BANK OF CHINA

LEGALADVISOR

IJAZ AHMED & ASSOCIATES

REGISTERED OFFICE

OFFICE 04 & 05, 5TH FLOOR,

CORPORATE OFFICE BLOCK,

DOLMEN CITY, PLOT HC-3,BLOCK-4,

CLIFTON, KARACHI-75600

FACTORIES

  1. G.T ROAD, QUADIRABAD, DISTRICT: SAHIWAL (PUNJAB)
  2. LEAF DIVISION COMPLEX, 22ND KM, MARDAN SWABI ROAD, MARDAN (KPK)

SHARE REGISTRAR

CDC SHARE REGISTRAR SERVICES LIMITED

CDC HOUSE, 99-B,BLOCK-B, S.M.C.H.S.,

MAIN SHAHRAH-E-FAISAL, KARACHI -74400

Website : http://philipmorrispakistan.com.pk

Email : pmpk.info@pmi.com Email : pmpk.info@pmi.

02

Director's Report

For the Quarter Ended March 31, 2024

As per the International Monetary Fund (IMF) World Economic Outlook update of January 2024, inflation is falling faster than expected in most regions, in the midst of unwinding supply-side issues and restrictive monetary policy. The IMF projected global growth at 3.1% and 3.2% for 2024 & 2025 respectively, though the forecast for 2024-25 is still below the historical average (2000-19) of 3.8%. However, Pakistan's economy continues to face challenges on account of high inflation, soaring energy prices, deteriorating Pakistan rupee value, rising current account deficit, and eroding investors' confidence. According to the World Bank's latest Pakistan Development Update, Pakistan's economy is expected to grow only by 1.8% in the current fiscal year ending in June 2024. Aside from the economic and inflationary pressure, the unprecedented and exorbitant increases in taxes on the existing taxpayers, and a growing presence of the non-tax-paid/informal sector across different industries have not been conducive for investment.

The Track & Trace System (the "System") for the tobacco industry was implemented effective July 01, 2022, with an aim to ensure that all the cigarettes sold in Pakistan are tax-paid, which will boost tax revenue and create a level playing field for the compliant tax-paying sector. However, despite the System's implementation, noticeable enforcement is yet to be witnessed. Expansion of the illicit market share from 40% to 63% was observed post unprecedented excise hike of ~150% in Feb'23 which also resulted in an annual loss of approximately PKR 310 billion to the National Exchequer (according to an estimate). These measures not only cause a dent in the tax revenue targets for the Government but also erode investor confidence, undermine public health initiatives aimed at reducing tobacco consumption, and promote a culture of impunity for the non-tax-paid sector. We urge the Government to ensure immediate, effective, and substantive action to ensure enforcement of the System which will help address the loss of tobacco revenue to the National Exchequer and will also help restore the investors' confidence.

During the three months ended March 31, 2024, Philip Morris Pakistan Limited ( the "Company") reported a Total Net Turnover of PKR 8,628 million reflecting an increase of 48% vs. the same period last year primarily reflecting the export turnover of PKR 4,830 million, an increase of >100% vs the same period last year while the domestic Net Turnover of PKR 3,798 million reflects an increase of 10% vs. prior year. During the three months ended March 31, 2024, the Company's cigarette volume declined by 10.2% reflecting the continuing impact of the Feb'23 excise hike. The Company recorded a profit after tax of PKR 438 million for the three months ended March 31, 2024, vs. PKR 379 million in prior year. For the first three months of the current fiscal year (Jan-Mar'24), the company contributed PKR 10,713 million to the National Exchequer which was higher by 79% vs. the prior period. Further, for the ongoing fiscal year July'23-Mar'24, the Company contributed PKR 34,280 million to the National Exchequer, an increase of 65% vs. the prior period.

03

The tax-paying tobacco industry is facing the repercussions of deteriorating economic conditions, including heightened interest costs, inflated business expenses, and escalated energy tariffs. Coupled with the unprecedented excise hike, the environment for tax-paid tobacco entities to operate has become increasingly challenging. The Company remains committed to vigilantly monitoring market dynamics and striving to effectively manage operations amidst these challenging circumstances.

On behalf of the Board of Directors.

SARFARAZ AHMED REHMAN

ROMAN YAZBECK

Chairman Board

Chief Executive

Karachi, April 29, 2024

04

05

06

FINANCIAL STATEMENTS

07

PHILIP MORRIS (PAKISTAN) LIMITED

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION (UNAUDITED)

AS AT MARCH 31, 2024

March 31,

December 31,

ASSETS

Note

2023

2023

(Un-audited)

(Audited)

NON CURRENT ASSETS

(Rupees in thousand)

FIXED ASSETS

5

5,251,337

- Property, plant and equipment

5,058,551

- Right-of-use assets

319,794

322,396

- Intangibles

2,859

3,604

5,381,204

5,577,337

Investment in a subsidiary company

6

1

1

Long term deposits

73,582

73,582

Deferred taxation

208,757

144,269

5,663,544

5,795,189

CURRENT ASSETS

Stores and spares - net

7

255,943

215,791

Stock in trade - net

7,641,779

12,033,405

Advances

8

172,484

287,937

Prepayments

51,294

62,139

Other receivables

2,422,402

2,164,436

Income tax - net

717,736

876,658

Staff retirement benefits

34,724

34,724

Short term investment

3,122,428

-

Cash and bank balances

6,455,153

9,062,895

Non-current assets held for sale / disposal

9

20,873,943

24,737,985

1,600

1,600

TOTAL CURRENT ASSETS

20,875,543

24,739,585

TOTAL ASSETS

26,539,087

30,534,774

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

12,000,000

Authorised capital

12,000,000

Issued, subscribed and paid-up capital

615,803

- Ordinary shares

615,803

- Preference shares

10,464,000

10,464,000

Transaction cost on issuance of preference shares - net of tax

11,079,803

11,079,803

(33,911)

(33,911)

Reserves

11,045,892

11,045,892

4,986,978

4,548,931

TOTAL EQUITY

16,032,870

15,594,823

NON CURRENT LIABILITIES

Lease liabilities

273,353

265,035

CURRENT LIABILITIES

Short term borrowings

10

-

-

Trade and other payables

10,039,347

13,504,425

Current maturity of lease liabilities

102,267

92,186

Unclaimed dividend

37,128

37,128

Unpaid dividend

54,122

54,122

Sales tax and excise duty payable

-

987,055

TOTAL CURRENT LIABILITIES

10,232,864

14,674,916

TOTAL LIABILITIES

10,506,217

14,939,951

TOTAL EQUITY AND LIABILITIES

11

26,539,087

30,534,774

CONTINGENCIES AND COMMITMENTS

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

Sarfaraz Ahmed Rehman

Roman Yazbeck

Muhammad Zeeshan

08

Chairman / Director

Chief Executive Officer

Chief Financial Officer

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Philip Morris (Pakistan) Ltd. published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 07:06:17 UTC.