CONTENTS

Company Information Chairmans Statement Condensed Interim Balance Sheet Condensed Interim Profit and Loss Account Condensed Interim Statement of Changes in Equity Condensed Interim Cash Flow Statement Selected Explanatory Notes to the Condensed Interim Financial Information

02 03 04 05 07 08 09

Condensed Interim Statement of Comprehensive Income 06

COMPANY INFORMATION
Board of Directors Chairman Chief Executive Officer Directors Haji Bashir Ahmed Mr. Muhammad Adrees Mr. Javed Iqbal Mr. Muhammad Anis Mr. Imran Ghafoor Mr. Haseeb Ahmed Mr. Muhammad Khalil Mr. Rashid Zahir (Nominee Director of Saudi Pak Industrial and Agricultural Investment Company (Pvt.) Ltd.) Mr. Mazhar Ali Khan Mr. Anwar-ul-Haq (FCA) Mr. Muhammad Anis Haji Bashir Ahmed Mr. Javed Iqbal Mr. Muhammad Yameen (FCA) M/s. M. Yousuf Adil Saleem & Company Chartered Accountants Mr. Sahibzada Muhammad Arif Meezan Bank Limited National Bank of Pakistan Allied Bank Limited United Bank Limited Bank Alfalah Limited Dubai Islamic Bank Pakistan Limited The Bank of Punjab MCB Bank Limited Standard Chartered Bank First Habib Bank Modaraba Saudi Pak Industrial and Agricultural Investment Company (Pvt.) Limited Silk Bank Limited Al-Baraka Islamic Bank B.S.C. (E.C.) Askari Commercial Bank Limited Faysal Bank Limited Habib Bank Limited Dawood Islamic Bank Limited Bank Islami Pakistan Limited Summit Bank Limited (Formerly Arif Habib Bank Limited) Barclays Bank PLC Pakistan Soneri Bank Limited Habib Metropolitan Bank Limited Pak Oman Investment Company Limited 601-602 Business Centre, Mumtaz Hasan Road, Karachi-74000 28/32 KM, Faisalabad - Sheikhupura Road, Faisalabad.

Company Secretary Chief Financial Officer Audit Committee Chairman Members Head of Internal Audit Auditors Legal Advisor Bankers

Registered Office Factories

SITARA CHEMICAL INDUSTRIES LIMITED

CHAIRMANS STATEMENT
On behalf of Board of Directors, I feel pleasure in presenting the financial statements for third quarter ended on March 31, 2011. Energy crisis in the country remained inhabited to the economy which has further slowed down the whole economic growth of the country. Customers of chlor alkali products were badly affected with energy crises, high inflation and undercut demand in the country. Besides these negative indicators, by the grace of Almighty Allah, your company eventually performed better. Net sales of your company for the third quarter were Rs. 1,695 million as compared to Rs. 1,498 million of the corresponding quarter resulting in net increase of Rs. 197 million. Sale of Chemical Division has increased by Rs. 111 million whereas sales of Textile Division increased by Rs. 86 million from corresponding quarter. Gross profit and net profit before tax are Rs. 370 million and Rs. 122 million, compared to Rs. 306 million and Rs. 90 million of the corresponding quarter. Earning per share for the quarter was Rs. 4.16 against Rs. 2.11 of corresponding quarter. FUTURE OUTLOOK Although future vital signs that are responsible for economic growth of the country are not so encouraging however, international market of caustic soda is improving day by day. Prices of caustic soda in international market are resuming back showing reasonable potential for export. We are optimistic about this situation and in near future, we expect that your company will be able to cover the gap of domestic short sales through exports. ACKNOWLEDGEMENTS We take this opportunity to thank all our valued stakeholders for their continued trust, patronage, support and guidance.
A comparison of quarterly Sales with corresponding four previous quarters
1800 1600 1493 1310 1166 1498 1695

Rs in Million

1400 1200 1000 800 600 400 200 0

2007

2008

2009

Year

2010

2011

HAJI BASHIR AHMED CHAIRMAN Faisalabad April 18, 2011 Quarterly Report March 31, 2011 3

CONDENSED INTERIM BALANCE SHEET AS AT MARCH 31, 2011 March 31, June 30, 2011 2010 Un-Audited Audited -------- Rupees in thousand --------5,334,758 1,549,554 84,044 53,830 107,965 7,130,151 286,901 982,414 648,345 138,971 299,990 6,697 114,783 211,339 648,302 3,337,742 1,178,000 4,515,742 11,645,893 5,675,577 2,724,588 85,509 6,341 38,965 8,530,980 290,379 502,292 433,457 58,938 15,416 12,154 201,857 122,015 142,970 1,779,478 1,779,478 10,310,458

Note ASSETS Non -current assets Property, plant and equipment Investment Property Long-term investment Long-term loan and advances Long-term deposits Total non-current assets Current Assets Stores, spares and loose tools Stock-in-trade Trade debts Loans and advances Trade deposits and short term prepayments Other receivables Other financial asset Tax refunds due from Government Cash and bank balance Non-current assets classified as held for sale Total current assets Total Assets EQUITY AND LIABILITIES Share capital and reserves Authorised 40,000,000 "A" class ordinary share of Rs. 10 each 20,000,000 "B" class ordinary share of Rs. 10 each Share capital Reserves Un-appropriated profits Surplus on revaluation of property, plant and equipment Non-current liabilities Long-term financing Long-term deposits Deferred Liabilities Total non-current liabilities Current liabilities Trade and other payable Profit / financial charges payable Short term borrowings Current portion of long term financing Total current liabilities Contingencies and commitment Total Equity and liabilities 6

4 5

400,000 200,000 214,294 1,328,532 2,014,095 3,556,921 948,244 2,048,751 1,117,724 3,166,475 932,571 117,858 1,921,065 1,002,759 3,974,253 11,645,893

400,000 200,000 204,090 1,338,554 1,817,708 3,360,352 944,619 2,735,240 8,806 1,132,938 3,876,984 591,685 89,010 662,000 785,808 2,128,503 10,310,458

The annexed notes from 1 to 17 form an integral part of the interim financial information.

MUHAMMAD ADREES (CHIEF EXECUTIVE OFFICER) 4 SITARA CHEMICAL INDUSTRIES LIMITED

HASEEB AHMED (DIRECTOR)

CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED) FOR THE NINE MONTH ENDED MARCH 31, 2011

Note

Nine months ended Quarter ended March 31 March 31 March 31 March 31 2011 2010 2011 2010 ---------------------------Rupees in thousand -----------------------4,612,310 3,575,908 1,036,402 32,443 1,068,845 (52,656) (160,132) (24,379) (4,977) 826,701 504,046 4,278,843 3,099,020 1,179,823 19,757 1,199,580 (44,956) (169,845) (51,142) 33,496 967,133 440,564 526,569 147,934 378,635 18.55 1,694,795 1,325,004 369,791 7,331 377,122 (14,812) (52,948) (8,951) 2,074 302,485 180,949 1,497,594 1,191,477 306,117 8,857 314,974 (15,140) (49,692) (11,411) 238,731 148,764 89,967 46,891 43,076 2.11

Sales Cost of goods sold Gross profit Other operating income Distribution cost Administrative expenses Other operating expenses Share of profit / (loss) of associated company Operating profit Finance cost Net profit for the period before taxation Taxation Net profit for the period after taxation Earnings per share - Basic (Rupees)

8 9

322,655 10 106,616 216,039

121,536 32,467 89,069

11

10.08

4.16

The annexed notes from 1 to 17 form an integral part of the interim financial information.

MUHAMMAD ADREES (CHIEF EXECUTIVE OFFICER)

HASEEB AHMED (DIRECTOR)

Quarterly Report March 31, 2011

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED) FOR THE NINE MONTH ENDED MARCH 31, 2011

Nine months ended Quarter ended March 31 March 31 March 31 March 31 2011 2010 2011 2010 ---------------------------Rupees in thousand -----------------------Profit after taxation Other comprehensive income for the period - net of tax Gain/(Loss) on re-measurement of available for sale financial assets Gain/(Loss) realized on sale of available for sale financial assets Share of other comprehensive income of associate Total comprehensive income for the period 216,039 378,635 89,069 43,076

762 14,441

6,644 846 7,490 386,125

(5,052) 13,804

830 209 1,039 44,115

(64) 15,139

(64) 8,688

231,178

97,757

The annexed notes from 1 to 17 form an integral part of the interim financial information.

MUHAMMAD ADREES (CHIEF EXECUTIVE OFFICER)

HASEEB AHMED (DIRECTOR)

SITARA CHEMICAL INDUSTRIES LIMITED

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED) FOR THE NINE MONTH ENDED MARCH 31, 2011
Reserves Capital Share Premium Sub total General Reserve Reserve on Share of other remeasurement comprehensive of available for income of sale investment associates Unappropriated Profit Total Reserves Total Share Capital Revenue

............................................................................................. Rupees in thousand .......................................................................................... 204,090 204,090 204,090 10,204 214,294 97,490 6,106 (64) 15,203 15,203 (64) (64) (25,160) 15,203 (64) 15,139 (25,160) 103,532 97,490 (9,097) 25,160 113,553 97,490 (3,232) 94,258 1,225,000 1,225,000 1,225,000 7,489 7,489 7,489 7,489 378,635 46,446 425,081 (153,067) 1,718,144 1,817,708 216,039 216,039 41,574 (51,022) (10,204) 2,014,095 97,490 (10,721) 86,769 1,225,000 1,446,130 2,757,899 378,635 53,935 432,570 2,961,989 378,635 53,935 432,570 (153,067) (153,067) 3,037,402 3,241,492 3,156,261 216,039 15,203 (64) 231,178 (25,160) 41,574 (51,022) (10,204) 3,342,627 3,360,351 216,039 15,203 (64) 231,178 (25,160) 41,574 (51,022) 3,556,921

Balance as at June 30, 2009 Total comprehensive income Profit for the nine months ended March 31, 2010

Other comprehensive income for the nine months ended March 31, 2010

Distribution to owners Final dividend for the year ended June 30, 2009 Balance as at March 31, 2010

Quarterly Report March 31, 2011

Balance as at June 30, 2010 Total comprehensive income Profit for the nine months ended March 31, 2011 Other comprehensive income for the nine months ended March 31, 2011 Share of other comprehensive income of associate

Transfer of share in revaluation surplus of associate Transfer to un-appropriated profit on account of incremental depreciation Distribution to owners Final dividend for the year ended June 30, 2010 Issue of bonus shares

Balance as at March 31, 2011

The annexed notes from 1 to 17 form an integral part of the interim financial information.

MUHAMMAD ADREES (CHIEF EXECUTIVE OFFICER)

AHMED HASEEB AHMED (DIRECTOR)

CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED) FOR THE NINE MONTH ENDED MARCH 31, 2011

CASH FLOWS FROM OPERATING ACTIVITIES Operating cash flows before changes in working capital Changes in working capital (Increase) / decrease in current assets Stores, spare parts and loose tools Stock-in-trade Trade debts Loans and advances Trade deposits and prepayments (Increase) / decrease in other Financial assets Other receivables Trade and other payables Cash generated from operations Finance cost paid Employee benefits paid Income Taxes paid Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and equipment Purchases of investment property Proceeds from disposal of property, plant and equipment Proceeds from disposal of availabale for sale investment Long-term loans and advances Profit on deposits Dividend income received Long term deposits CASH FLOWS FROM FINANCING ACTIVITIES Payment of long-term financing Proceed from Long-term finance Short term financing - net Long term deposits Dividend paid Net cash from financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of the period

Nine Months Ended March 31 March 31 2011 2010 ------Rupees in thousand-----14 1,236,851 1,293,895

3,478 (480,122) (214,887) (80,034) (284,574) 74,257 5,457 330,942 (645,483) 591,368 (475,199) (3,457) (214,567) (693,223) (101,855)

(224,895) 307,912 183,432 (327,161) 14,553 (108,637) 6,297 (561,964) (710,463) 583,432 (459,870) 2,263 (83,200) (540,807) 42,625

(51,850) (33) (4,468) 2,835 (47,489) 14,216 2,816 (69,000) (152,973)

(342,638) (17,560) 21,841 26,932 5,615 7,060 611 (298,139)

(581,200) 111,662 1,259,065 (8,806) (20,561) 760,160 505,332 142,970 648,302

(674,897) 350,000 864,712 5,452 (148,322) 396,945 141,432 294,165 435,597

The annexed notes from 1 to 17 form an integral part of the interim financial information.

MUHAMMAD ADREES (CHIEF EXECUTIVE OFFICER)

HASEEB AHMED (DIRECTOR)

SITARA CHEMICAL INDUSTRIES LIMITED

SELECTED EXPLANATORY NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)

FOR THE NINE MONTH ENDED MARCH 31, 2011

1. 1.1

LEGAL STATUS AND OPERATION Sitara Chemical Industries Limited ("the Company") was incorporated in Pakistan on September 08, 1981 as a Public Limited Company under Companies Act, 1913 (now Companies Ordinance, 1984). The Company is currently listed on all Stock Exchanges in Pakistan. The principal activities of the Company are operation of Chlor Alkali plant and yarn spinning unit. The registered office of the Company is situated at 601-602, Business Centre, Mumtaz Hasan Road, Karachi, in the province of Sindh and the manufacturing facilities are located at 28/32 K.M., Faisalabad - Sheikhupura Road, Faisalabad, in the province of Punjab. The Company is currently organized into two operating divisions and these divisions are the basis on which the Company reports its primary segment information. Chemical Division: Manufacturing of caustic soda and allied products Textile Division: Manufacturing of yarn

1.2 2. 2.1

This condensed interim financial information is prepared in Pak Rupee, which is the Company's functional and presentation currency. BASIS OF PREPARATION This condensed interim financial report of the Company for the nine months period ended March 31, 2011 has been prepared in accordance with the International Accounting Standard - 34 "Interim Financial Reporting" and provisions of and directives issued under the Companies Ordinance, 1984. In case where requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 have been followed. This condensed interim financial information should be read in conjunction with annual audited financial statements for the year ended June 30, 2010. Comparative balance sheet is extracted from annual audited financial statements for the year ended June 30, 2010 whereas comparative profit and loss account, comparative statement of changes in equity and comparative cash flow statement are stated from un-audited condensed interim financial information for the nine months ended on March 31, 2010. ACCOUNTING POLICIES AND ESTIMATES The accounting policies and the methods of computation adopted in the preparation of this condensed interim financial report are the same as those applied in preparation of the financial statements for the year ended June 30, 2010. March 31, June 30, 2011 2010 Note Un-audited Audited ------ Rupees in thousand ------

2.2

3. 3.1

PROPERTY, PLANT AND EQUIPMENT Operating assets Capital work-in-progress 4.1 5,119,674 215,084 5,334,758 5,489,389 186,188 5,675,577

Quarterly Report March 31, 2011

4.1

Operating assets Opening written down value Additions during the period / year: Building on freehold land - Mills Plant and machinery Grid station and electric installation Factory equipment Electric equipment Office equipment Furniture and fittings Vehicles Written down value of operating assets disposed off Depreciation charged during the period / year

March 31, June 30, 2011 2010 Note Un-audited Audited ------ Rupees in thousand -----5,489,389 1,185 780 874 778 352 1,446 5,415 (2,248) (372,882) 5,119,674 4,851,602 88,092 920,409 52,568 9,185 2,841 2,549 1,418 10,824 1,087,886 (14,942) (435,157) 5,489,389

5.

INVESTMENT PROPERTY Land Building 5.1 1,544,523 5,031 1,549,554 2,719,148 5,440 2,724,588

5.1

Land - at cost Balance at beginning of period Acquisitions Classified as held for sale Balance at end of period 2,719,148 3,375 (1,178,000) 1,544,523 2,699,760 19,388 2,719,148

6.

LONG-TERM FINANCING Opening balance Obtained during the period / year Less: paid during the period / year Less: current portion 3,521,048 111,662 3,632,710 581,200 3,051,510 1,002,759 2,048,751 3,200,843 1,153,340 4,354,183 833,135 3,521,048 785,808 2,735,240

7.

CONTINGENCIES AND COMMITMENTS Contingencies Sales tax demand not acknowledged in view of pending appeals Suppliers' claim not acknowledged in view of pending case in Civil Court Guarantees issued by banks and outstanding Commitments Capital expenditure Outstanding letters of credit for raw material and spares 19,011 18,017 17,390 3,398 890 111,401 3,398 890 188,290

10

SITARA CHEMICAL INDUSTRIES LIMITED

8.

SALES - NET

Nine Months Ended

Quarter Ended

March 31, March 31, March 31, March 31, 2011 2010 2011 2010 ------------------------------- Rupees in thousand -----------------------------Local Export 5,057,463 65,050 5,122,513 132,843 377,360 510,203 4,612,310 4,722,965 39,030 4,761,995 89,239 393,913 483,152 4,278,843 1,822,691 39,346 1,862,037 47,034 120,208 167,242 1,694,795 1,510,704 16,578 1,527,282 29,688 29,688 1,497,594

Less: Commission and discount Sales tax

9.

COST OF GOODS SOLD Raw material consumed Fuel and power Salaries, wages and benefits Stores and spares Repairs and maintenance Vehicle running and maintenance Travelling and conveyance Insurance Depreciation Other 1,262,169 1,745,767 177,383 128,280 54,888 18,139 14,195 14,331 363,034 3,739 3,781,925 780,777 1,383,133 160,254 102,148 45,329 20,039 10,808 7,485 315,102 8,223 2,833,298 423,590 595,384 57,621 38,137 17,238 6,704 6,507 4,751 119,402 1,347 1,270,681 252,347 486,573 49,554 35,276 17,008 8,264 4,473 2,475 103,532 605 960,107

Work in process Opening stock Closing stock Cost of goods manufactured Finished stocks Opening stock Closing stock

22,219 (60,658) (38,439) 3,743,486

26,240 (21,415) 4,825 2,838,123

56,126 (60,658) (4,532) 1,266,149

23,655 (21,415) 2,240 962,347

211,500 (379,078) (167,578) 3,575,908

445,964 (185,067) 260,897 3,099,020

437,933 (379,078) 58,885 1,325,004

414,197 (185,067) 229,130 1,191,477

PROVISION FOR TAXATION Current - For the period Deferred

176,366 (69,750) 106,616

172,555 (24,621) 147,934

59,219 (26,752) 32,467

42,178 4,713 46,891

Quarterly Report March 31, 2011

11

10.

EARNINGS PER SHARE - BASIC AND DILUTED Nine Months Ended Quarter Ended

March 31, March 31, March 31, March 31, 2011 2010 2011 2010 ------------------------------- Rupees in thousand -----------------------------Profit for the period Weighted average number of ordinary shares outstanding during the period Earnings per share (Rupees) 216,039 378,635 89,069 43,076

21,429 10.08

20,409 18.55

21,429 4.16

20,409 2.11

11.

TRANSACTIONS WITH RELATED PARTIES The related parties comprise of associated companies, staff retirement benefit plans, directors and key management personnel. The Company in the normal course of business carries out transactions with various related parties. Nature and description of significant related party transactions along with monetary values are as follows: Nine Months Ended

March 31, March 31, 2011 2010 ------ Rupees in thousand -----12. Relationship with the Company And Nature of Transactions Associated Undertakings Sales Purchases Organizational expenses recovered Organizational expenses paid Power charges paid Donation Key Management Personnel Remuneration to executive 13. SEGMENT REPORTING The Company has two reportable segments, which offer different products and are managed separately. The following summary describes the operations in each of the reportable segment of the Company. - Chemical division : Manufacturing of caustic soda and allied products - Textile division: Manufacturing of yarn 31,578 845 848 3,477 506,597 16,339 52,235 7,230 199 1,728 2,231 553,454 17,665 61,382

12

SITARA CHEMICAL INDUSTRIES LIMITED

Chemical Division

Textile Division

Total

Total

-------------------------------------------Nine months ended----------------------------------------March 31, March 31, March 31, March 31, March 31, March 31, 2011 2010 2011 2010 2011 2010 ----------------------------------------------- Rupees in thousand ---------------------------------------------Revenue from external customers - net Depreciation on property, plant and equipment Segment profit 3,441,987 349,825 703,696 3,275,154 300,548 854,021 1,170,323 23,172 118,939

1,003,689

4,612,310

4,278,843

111,246

822,635

965,267

Total Un-audited Audited Un-audited

Total

Audited

Un-audited

Audited

March 31, June 30, March 31, June 30, March 31, June 30, 2011 2010 2011 2010 2011 2010 ----------------------------------------------- Rupees in thousand ---------------------------------------------Capital expenditure Segment assets Segment liabilities 3,993 7,586,887 354,129 1,087,306 6,639,891 341,677 1,423 1,247,410 68,298

581

5,416

1,087,887

940,911

8,834,297

7,580,802

84,175

422,427

425,852

Quarterly Report March 31, 2011

26,035

372,997

326,583

13

13.1

Information about operating segments is as follows: -------------------------------------Operating segments----------------------------------------------

Nine Months Ended

13.2.

Reconciliations of reportable segments are as follows: Revenue Entity's revenue Profit for the period Total profit for reportable segments Unallocated corporate income / (expenses) Other operating income Administrative expenses Other operating expenses Finance cost Share of profit of associates - net of tax Profit before income tax expense

March 31, March 31, 2011 2010 ------ Rupees in thousand ------

4,612,310 822,635 32,443 979 (24,379) (504,046) (4,977) 322,655

4,278,843 965,267 19,757 (245) (51,142) (440,564) 33,496 526,569

March 31, June 30, 2011 2010 ------ Rupees in thousand -----Assets Total assets for reportable segments Other unallocated corporate assets Entity's assets Liabilities Total liabilities for reportable segments Other unallocated corporate liabilities Entity's liabilities 13.3 The Company has no reportable geographical segment. 8,834,297 2,811,596 11,645,893 7,580,802 2,729,656 10,310,458

422,638 11,223,255 11,645,893

425,852 9,884,606 10,310,458

14

SITARA CHEMICAL INDUSTRIES LIMITED

14.

OPERATING CASH FLOW BEFORE WORKING CAPITAL CHANGES

Nine Months Ended

March 31, March 31, 2011 2010 ------ Rupees in thousand -----Profit before taxation Adjustments for: Depreciation on property, plant and equipment Depreciation on investment property Impairment loss on investment in associated Company Share of profit of associated company Provision for Worker's Profit Participation fund Provision for Worker's wellfare fund Finance cost Gain of sale of investment held for sale Gain on disposal of property, plant and equipment - net Provision for gratuity Profit on deposits Dividend income 322,655 526,569

372,588 408 4,977 35,297 13,413 504,046 (449) (2,220) 3,168 (14,216) (2,816) 914,196 1,236,851

326,129 454 12,480 (33,496) 26,581 10,100 440,564 (3,008) (1,642) (3,165) (7,060) (611) 767,326 1,293,895

15.

DATE OF AUTHORIZATION FOR ISSUE This interim financial information has been approved by the Board of Directors of the Company and authorised for issue on April 18, 2011.

16.

RE-ARRANGEMENT AND RECLASSIFICATION No significant re-arrangement and reclassification has been made in this condensed interim financial information, except mentioned otherwise.

17.

GENERAL Figures have been rounded to the nearest thousand of rupees, unless otherwise stated.

MUHAMMAD ADREES (CHIEF EXECUTIVE OFFICER)

AHMED HASEEB AHMED (DIRECTOR)

Quarterly Report March 31, 2011

15

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