For the Nine Months Period Ended September 30, 2012 (Un-Audited)

Transcription

1 For the Nine Months Period Ended September 30, 2012 (Un-Audited)

2

3 Contents 02 Company Information 03 Directors Review 04 Condensed Interim Balance Sheet 05 Condensed Interim Profit & Loss Account 06 Condensed Interim Statement of Comprehensive Income 07 Condensed Interim Cash Flow Statement 08 Condensed Interim Statement of Changes in Equity 09 Notes to the Condensed Interim Financial Information 15 Condensed Interim Consolidated Balance Sheet 16 Condensed Interim Consolidated Profit and Loss Account 17 Condensed Interim Consolidated Statement of Comprehensive Income 18 Condensed Interim Consolidated Cash Flow Statement 19 Condensed Interim Consolidated Statement of Changes in Equity 20 Notes to the Condensed Interim Consolidated Financial Information

4 Company Information Board of Directors Shahid Hamid Pracha (Chairman) Inam ur Rahman (Chief Executive) Shafiq Ahmed S.M. Asghar A. Samad Dawood Shahzada Dawood Haroon Mahenti Sulaiman S. Mehdi Mir Muhammad Nasir Sarfaraz Ahmed Rehman Board Audit Committee S.M. Asghar (Chairman) Sulaiman S. Mehdi Haroon Mahenti Shafiq Ahmed CFO and Company Secretary Hafsa Shamsie Auditors M. Yousuf Adil Saleem & Co. (Chartered Accountants) Bankers Bank Al-Habib Limited Habib Bank Limited National Bank of Pakistan MCB Bank Limited Share Registrar C&K Management Associates (Pvt.) Ltd. 404-Trade Tower, Abdullah Haroon Road, Near Metropole Hotel, Karachi Registered / Head Office 3rd Floor, Dawood Centre, M. T. Khan Road, Karachi Ph#: Fax#: info.textiles@dawoodgroup.com Website: Mills Landhi Landhi Industrial Area, Karachi. Ph#: , Fax#: , Dawoodabad District Vehari. Ph#: , , Fax#: Dawoodpur District Attock. Ph#: Fax#: Legal Advisor Zia Law Associates 17, Second Floor, Shah Chiragh Chambers, The Mall, Lahore. 2

5 Directors Review The Board of Directors is pleased to present the un-audited condensed interim financial statements of Dawood Lawrencepur Limited for the nine months ended September 30, OPERATING RESULTS Turnover of the Company for the nine months ended September 30, 2012 was Rs million as against Rs million for the similar period last year with a gross margin of 13.0% which is at par with last year. Resultantly, the operating loss of the Company reduced to Rs 29.3 million as compared to a loss of Rs million last year. The summary of operating results is as follows: Nine months ended Nine months ended 30 September September 2011 Rupees (million) Rupees (million) Sales Operating Loss (29.25) (44.32) Share of profit from associate Profit/(loss) from discontinued operations 8.47 (18.98) Profit/(loss) after taxation from continuing Operations EARNINGS PER SHARE Earnings per share on a standalone basis for the nine months were Rs per share as compared to Rs per share in September Earnings per share on a consolidated basis for the Group were Rs per share as compared to Rs per share for the similar period last year. PROGRESS REVIEW Earlier in the year, the Company entered into a timebound, non-exclusive licensing agreement with an associated concern for sales of brand Lawrencepur and the resultant specialized focus has helped generate substantial revenue growth (35%) over last year. The challenging manufacturing environment continues to erode textile margins. However, use of prudent cost cutting and outsourcing strategies has helped the Company in keeping gross margins at par with last year. In the Renewable energy space, the Company has successfully completed a pilot project for distribution of solar energy products and a formal market launch is expected shortly. The Company has also been actively involved in researching various energy solutions including solar residential systems and water pumping systems. During the period under review, Tenaga Generasi Limited (TGL), a wholly owned subsidiary of the Company, has obtained a Letter of Support (LOS) from AEDB based upon the awarded cost-plus tariff. The Project now has 12 months till September 3rd 2013 to achieve financial close. This LOS confirms TGL s right to develop the Project on the originally agreed terms with AEDB. The AEDB has allowed the Company to opt for a feed-in tariff (FIT) at any stage. BUSINESS OUTLOOK Lack of energy will be the biggest challenge for textile manufacturing this winter season. Extreme electricity load shedding is forecast, along with a complete shutdown of natural gas supply from mid November onwards. The Company is hopeful that its licensing arrangement will safeguard stakeholder returns through use of better marketing and sourcing strategies thereby boosting the Lawrencepur brand image in the marketplace. The Company is aggressively focusing on its strategic interest in the renewable energy business which is still in a developmental stage with ample space for innovation. Besides exploring the options of trading and entering into strategic partnerships, the Company is engaged in research and development activities for various customized energy solutions in order to meet the energy needs of our population. With regard to the wind power sector, presently all developers are waiting for the government to finalize the Energy Purchase Agreement (EPA) and the Implementation Agreement (IA) specific to FIT which is a pre-requisite for lenders to sign-off on the funding arrangements. In the meantime, the Company is amending its contracts to be able to take advantage of the FIT regime as soon as the government documents are finalized. Given the slow response from the government, the Company now expects financial close to spill over in to Karachi: October 25, 2012 On Behalf of the Board INAM UR RAHMAN Chief Executive Quarterly Report

6 Condensed Interim Balance Sheet (Un-Audited) As at September 30, 2012 ASSETS Note (Unaudited) September 30, 2012 Rupees in 000 (Audited) December 31, 2011 Non-current assets Property, plant and equipment 49,467 55,336 Intangible assets ,933 55,720 Long term investments 4 341, ,017 Long term deposits 10,544 10, , ,281 Current assets Stores and spares 39,503 45,206 Stock-in-trade 310, ,688 Trade debtors 5 155,690 82,643 Loans and advances 6 24,320 12,948 Deposits, prepayments and other receivables 70,864 69,268 Short term investments 7 535, ,691 Cash and bank balances 49,782 29,270 1,186,218 1,133,714 Assets classified as held for sale 186, ,675 1,775,434 1,729,670 SHARE CAPITAL AND RESERVES Share capital Authorised: 75,000,000 (December 31, 2010: 75,000,000) Ordinary shares of Rs. 10/- each 750, ,000 Issued, subscribed & paid up capital 590, ,578 Reserves 605, ,761 Unappropriated profit 404, ,536 LIABILITIES 1,600,976 1,539,875 Non current liabilities Deferred liability 64,448 58,885 Current liabilities Trade and other payables 8 92, ,104 Provision for taxation 17,909 7,806 CONTINGENCIES AND COMMITMENTS 9 110, ,910 1,775,434 1,729,670 The annexed notes from 1 to 12 form an integral part of this condensed interim financial information. 4 SHAHID HAMID PRACHA Chairman INAM UR RAHMAN Chief Executive

7 Condensed Interim Profit & Loss Account (Un-Audited) For the Quarter and Nine Months Ended September 30, 2012 CONTINUING OPERATIONS Quarter ended Nine Months Ended Sep 30, 2012 Sep 30, 2011 Sep 30, 2012 Sep 30, Rupees in Sales - net 99,577 71, , ,790 Cost of goods sold (94,363) (63,429) (269,111) (198,508) Gross profit 5,214 7,978 40,358 29,282 Other operating income 13,346 20, ,310 85,572 Selling and distribution expenses (1,525) (2,971) (6,490) (8,743) Administrative expenses (10,950) (15,766) (53,211) (49,594) Impairment loss on available for sale investments - (80) - (818) (12,474) (18,817) (59,700) (59,155) Profit before taxation 6,085 9, ,968 55,699 Taxation (598) (1,617) (10,105) (5,336) Profit after taxation from continuing operations 5,488 7, ,863 50,363 DISCONTINUED OPERATIONS (Loss) / profit from discontinued operations (6,394) (7,022) 8,466 (18,977) (Loss) / profit for the period (906) ,329 31,386 Earnings per share - Basic & diluted Continuing operations (Rs.) Earnings per share - Basic & diluted Discontinued operations (Rs.) (0.11) (0.12) 0.14 (0.32) The annexed notes from 1 to 12 form an integral part of this condensed interim financial information. SHAHID HAMID PRACHA Chairman INAM UR RAHMAN Chief Executive Quarterly Report

8 Condensed Interim Statement of Comprehensive Income For the Quarter and Nine Months Ended September 30, 2012 Quarter Ended Nine Months Ended Sep 30, Sep 30, Sep 30, Sep 30, Rupees in (Loss) / profit for the period (906) ,329 31,386 Other comprehensive income (Deficit) / surplus on remeasurement of available for sale investments (42) (1,660) 830 (1,499) Total comprehensive (loss) / income for the period (948) (973) 120,159 29,887 The annexed notes from 1 to 12 form an integral part of this condensed interim financial information. SHAHID HAMID PRACHA Chairman INAM UR RAHMAN Chief Executive 6

9 Condensed Interim Cash Flow Statement (Un-Audited) Nine Months ended September 30, 2012 Nine Months ended September 30, 2011 Continuing Discontinued Continuing Discontinued operations operations Total operations operations Total A. CASH FLOWS FROM OPERATING ACTIVITIES Rupees in Profit / (loss) before taxation 120,968 8, ,434 55,699 (18,977) 36,722 Adjustments for: Depreciation 4,781 1,552 6,333 4,774 1,874 6,648 Amortization Provision for staff retirement gratuity 11,228-11,228 7, ,387 Gain on disposal of property, plant and equipment (14,402) (1,314) (15,716) (91) (788) (879) Impairment loss on available for sale investments Gain on sale of investments (722) - (722) Gain on sale of short-term investments (25,997) - (25,997) (25,717) - (25,717) Unrealized gain on remeasurement of short-term investments (21,433) - (21,433) (36,262) - (36,262) Dividend income (78,632) - (78,632) (20,283) - (20,283) (3,143) 8,704 5,561 (14,615) (17,395) (32,009) (Increase) / decrease in current assets Stores and spares 5,703-5,703 1,271-1,271 Stock in trade 8,748 1,783 10,531 (149,578) 5,952 (143,626) Trade debts (73,047) - (73,047) 5, ,275 Loans and advances (1,468) (1,409) (2,877) Deposits, prepayments and other receivables 4,045-4,045 (4,790) 86,640 81,850 (Decrease) / increase in current liabilities Trade and other payables (32,132) - (32,132) 31,305 11,854 43,159 (86,207) 1,783 (84,424) (118,083) 103,135 (14,948) Cash (used in) / generated from operations (89,350) 10,487 (78,863) (132,698) 85,740 (46,957) Gratuity paid (11,307) - (11,307) (6,592) (451) (7,043) Taxes paid (11,848) - (11,848) (4,203) (2,881) (7,084) Net cash (used in) / generated from operating activities (112,505) 10,487 (102,018) (143,493) 82,408 (61,084) B. CASH FLOWS FROM INVESTING ACTIVITIES Sale proceeds from disposal of property, plant and equipment 17,026-17,026 1,434 1,428 2,862 Purchase of property, plant and equipment (2,201) - (2,201) (3,126) - (3,126) Investment in subsidiary (170,000) - (170,000) Sale proceeds from disposal of investments ,390-2,390 Short term investments - net 87,001-87, , ,921 Dividend received 78,632-78,632 20,283-20,283 Net cash generated from investing activities 180, ,458 58,902 1,428 60,330 C. CASH FLOWS FROM FINANCING ACTIVITIES Fund transferred from operations ,892 (84,892) - Payment of dividend (57,928) - (57,928) (4) (5) (9) Net cash (used in) / generated from financing activities (57,928) - (57,928) 84,888 (84,897) (9) Net increase / (decrease) in cash and cash equivalents (A+B+C) 10,025 10,487 20, (1,061) (764) Cash and cash equivalents at beginning of the period 110,439 (81,169) 29,270 23,061 1,413 24,474 Cash and cash equivalents at end of the period 120,464 (70,682) 49,782 23, ,710 The annexed notes from 1 to 12 form an integral part of this condensed interim financial information. SHAHID HAMID PRACHA Chairman INAM UR RAHMAN Chief Executive Quarterly Report

10 Condensed Interim Statement of Changes in Equity (Un-Audited) Ordinary Shares Merger Reserve Capital Reserves Share Premium Capital Reserve Capital Redemption Reserve Fund General Reserve Unappropriated Profit Unrealized gain / (loss) on remeasurement of available for sale investments Total Rupees in Balance at December 31, ,547 10, ,865 33,311 25, , ,309 4,627 1,525,504 Issue of bonus 15% for the 77, (77,032) - - year ended December 31, 2010 Total comprehensive income for the period ,386 (1,499) 29,887 Balance at September 30, ,579 10, ,865 33,311 25, , ,663 3,128 1,555,391 Balance at December 31, ,578 10, ,865 33,311 25, , ,536 2,740 1,539,875 Final cash dividend for the year ended December 31, Rs. 1 per share (59,058) - (59,058) Total comprehensive income for the period , ,159 Balance at September 30, ,578 10, ,865 33,311 25, , ,807 3,570 1,600,976 The annexed notes from 1 to 12 form an integral part of this condensed interim financial information. SHAHID HAMID PRACHA Chairman INAM UR RAHMAN Chief Executive 8

11 Notes to the Condensed Interim Financial Information (Un-Audited) 1. GENERAL INFORMATION 1.1 Dawood Lawrencepur Limited, the Company was incorporated in Pakistan in the year 2004 as a public limited company formed as a result of a Scheme of Arrangement for Amalgamation in terms of the provisions of the Companies Ordinance, 1984 between Dawood Cotton Mills Limited, Dilon Limited, Burewala Textile Mills Limited and Lawrencepur Woolen and Textile Mills Limited. The shares of the Company are listed on the Karachi and Lahore Stock Exchanges. The Company is principally engaged in the business of manufacture and sale of yarn and fabrics made from natural and man-made fibers and blends thereof. The registered office of the Company is situated at 3rd Floor, Dawood Centre, M.T. Khan Road, Karachi. 1.2 The Company in the year 2008 suspended its manufacturing operations located at Burewala, District Vehari and closed down the mill in The assets (plant, machinery and current assets) relating to the closed down unit have been classified as discontinued operations, and are accounted for as per the requirement of IFRS - 5 Non-current Assets Held for Sale and Discontinued Operations. 2. BASIS OF PREPARATION This condensed interim financial information has been prepared on the historical cost convention except that obligations under certain staff retirement benefits have been measured at present value and certain investments which have been measured at fair market value. All amounts are in Pakistani Rupees which is the functional and presentation currency of the Company unless stated otherwise. 2.1 Statement of compliance This condensed interim financial information of the Company for the nine months ended September 30, 2012 has been prepared in accordance with the requirements of International Accounting Standard 34 - Interim Financial Reporting and provisions of and directives issued under the Companies Ordinance, In case where requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 have been followed. 2.2 The disclosures made in this condensed interim financial information have been limited based on the International Accounting Standard 34 - Interim Financial Reporting. This does not include all of the information and disclosures required in the annual financial statements and should be read in conjunction with the annual audited financial statements of the Company for the year ended December 31, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, ESTIMATES AND RISK MANAGEMENT POLICIES 3.1 The accounting policies, underlying estimates and methods of computation adopted in the preparation of this condensed interim financial information are the same as those applied in the preparation of annual audited financial statements of the Company for the year ended December 31, The financial risk management objectives and policies adopted by the Company are consistent with those disclosed in the annual audited financial statements of the Company for the year ended December 31, Quarterly Report

12 Notes to the Condensed Interim Financial Information (Un-Audited) 4. LONG TERM INVESTMENTS 30-Sep Dec-11 No. of Shares / Units Name of Investee Listed Securities 200, ,000 National Investment Trust Limited 6,010 5,180 Un-Listed Securities 30-Sep Dec-11 (Un-audited) (Audited) Note Rupees in 000 Investment in related parties at cost , ,822 Other investments 4.2 6,025 5, , , Investment in related parties at cost Wholly owned subsidiary - unquoted Tenaga Generasi Limited (TGL) Percentage holding 100% (December 31, 2011: 100%) 24,600,000 (December 31, 2011: 24,600,000) fully paid ordinary shares of Rs. 10/- each 270, ,528 The Company has accepted to subscribe 10,000,000 right Rs. 10 each offered by TGL. Chief Executive Officer: Mr. Inam ur Rahman Associated Company - quoted Dawood Hercules Corporation Limited Percentage holding 16.19% (December 31, 2011: 16.19%) 77,931,896 (December 31, 2011: 77,931,896) fully paid ordinary shares of Rs. 10/- each Market value Rs billion (December 31, 2011: billion) Chief Executive Officer: Mr. Shahid Hamid Pracha 65,294 65, , , Other investments Available for sale investments 1,500 Asian Co-operative Society 1,500 Limited , ,000 Karnaphuli Paper Mills Limited Mianwali Central Co-operative Bank Limited ,025 5, Cost of Investment in securities classified as available for sale is Rs. 2,455 million (December 31, 2011: Rs. 2,455 million).

13 Notes to the Condensed Interim Financial Information (Un-Audited) 5. TRADE DEBTS 7. SHORT TERM INVESTMENTS Held for trading at fair value through Profit and Loss 30-Sep Dec-11 Name of Investee No. of Units 30-Sep Dec-11 (Un-audited) (Audited) Rupees in 000 Unsecured Considered good 155,690 82,643 Considered doubtful 15,666 22, , ,110 Provision against doubtful receivable (15,666) (22,467) 155,690 82, LOANS AND ADVANCES Unsecured- considered good Advance tax 20,576 8,730 Loans and advances to employees 2,638 1,730 Advances to suppliers 894 1,365 Others 212 1,123 24,320 12,948 2,886,320 3,560,143 Meezan Cash Fund 144, ,506 1,422,764 1,680,961 UBL Liquidity Plus Fund 146, ,911 1,414,142 1,746,133 MCB Cash Management Optimizer 145, ,652 9,780,802 4,675,740 NAFA Government Securities Liquid Fund 98,338 47, , ,691 Cost of Investment in securities classified as held for trading at fair value through profit or loss is Rs million (December 31, 2011: Rs million). 8. TRADE AND OTHER PAYABLES Creditors 1,291 18,004 Accrued expenses 23,949 32,819 Gratuity to ex staff Advance from customers and others 10,537 10,777 Unclaimed dividend 22,161 21,031 Due to Islamic Development Bank 25,969 25,969 Deposits 527 1,115 Workers welfare fund 5,223 2,423 Withholding tax Advance against scrap sales 2,309 10,529 92, ,104 Quarterly Report

14 Notes to the Condensed Interim Financial Information (Un-Audited) 9. CONTINGENCIES AND COMMITMENTS 9.1 Contingencies a) The Taxation Officer while framing assessment for the tax year 2003 made errors in allowing expenses relating to gratuity, lease rentals, employee perquisites and utilities amounting to Rs million, and for tax years 2004 to 2005 had made additions on account of allocation of expenses between the normal and presumptive income of the Company amounting to Rs million and had disallowed Rs million as adjustment of brought forward losses of the Company. During the year ended December 31, 2011, Appellate Tribunal Inland Revenue (ATIR) has decided the issue of brought forward losses against the Company, however, the Company has filed an appeal before the High Court and a decision is awaited. The remaining issues have been set aside by the said Tribunal and remanded to the taxation officer for reconsideration. The tax impact of all cases amounts to Rs million. b) The Company is contingently liable against guarantees and counter guarantees amounting to Rs million (December 31, 2011: Rs million). These are secured against margins and liens over certain short term investments. 9.2 Commitments The Company has no commitments against letters of credit for purchase of raw material (December 31, 2011: Rs million). The Company has no commitment to supply fabric to any customer (December 31, 2011: Rs. 9.8 million). 10. TRANSACTIONS WITH RELATED PARTIES Related parties comprise of a subsidiary and associated undertakings, other related group companies, directors of the Company and key management personnel. The Company in the normal course of business carries out transactions with various related parties. Other significant transactions with related parties are as follows: Nine Months Ended 30-Sep-12 (Un-audited) Relationship Nature of transaction Rupees in Sep-11 (Un-audited) a. Subsidiary company Tenaga Generasi Limited Reimbursement of expenses to Company 8,022 6,286 Short term loan disbursed - 25,000 Repayment of short term loan - 25,000 Markup paid on short term loan Advance against issuance of share capital - 170,000 Subscription of ordinary shares - 170,000 12

15 Notes to the Condensed Interim Financial Information (Un-Audited) b. Associated companies Nine Months Ended 30-Sep Sep-11 (Un-audited) (Un-audited) Rupees in 000 Dawood Hercules Corporation Limited Dividend income 77,832 19,483 Purchase of asset Reimbursement of expenses by Company Sach International (Private) Limited Sale of fabric 201,281 31,307 Reimbursement of expenses to Company 3,769 1,293 Reimbursement of expenses by Company 267 Royalty paid to Company 1,592 - Purchase of fabric 4,329 - Cyan Limited Insurance claim received Insurance premium refund / paid D H Fertilizer Limited Reimbursement of expenses by Company c. Other related parties Sui Northern Gas Pipelines Limited Utility charges paid 14,700 15,718 Sale of Fabric 2,590 - The Dawood Foundation Rental charges paid 5,862 7,306 Reimbursement of expenses by Company 1, Inbox Business Technologies (Pvt) Limited Hardware maintenance charges paid Dawood Corporation Reimbursement of expenses by Company (Pvt) Limited Reimbursement against assets transferred - 1,233 by Company Dawood Lawrencepur Limited (Burewala Mills) - Staff Provident Fund Contribution by Company LWTM - Employees Gratuity Fund Contribution by Company 1,141 1,024 Directors Bonus shares issued - 2,682 d. Key Management Personnel Salaries and employee benefits 17,307 13, DATE OF AUTHORIZATION FOR ISSUE This condensed interim financial information was authorized for issue on October 25, 2012 by the Board of Directors of the Company. 12. GENERAL Figures have been rounded off to the nearest thousand rupees. SHAHID HAMID PRACHA Chairman INAM UR RAHMAN Chief Executive Quarterly Report

16 Condensed Interim Consolidated Financial Information (Un-Audited) 14

17 Condensed Interim Consolidated Balance Sheet (Un-Audited) As at September 30, Sep Dec-11 (Unaudited) (Audited) Note Rupees in 000 ASSETS Non-current assets Property, plant and equipment 220, ,524 Intangible assets 23,457 23, , ,742 Long term investments 4 4,199,848 4,083,174 Long term deposits 10,544 10,544 4,454,375 4,305,460 Current assets Stores and spares 39,503 45,206 Stock-in-trade 310, ,688 Trade debtors 5 155,690 82,643 Loans and advances 6 24,698 13,080 Deposits, prepayments and other receivables 71,769 69,901 Short term investments 7 554, ,837 Cash and bank balances 86,508 52,314 1,243,944 1,237,669 Assets classified as held for sale 186, ,675 5,885,211 5,731,804 SHARE CAPITAL AND RESERVES Share capital Authorised: 75,000,000 (December 31, 2011: 75,000,000) Ordinary shares of Rs. 10/- each 750, ,000 Issued, subscribed & paid up capital 590, ,578 Reserves 598, ,393 Unappropriated profit 4,511,240 4,357,199 5,699,941 5,528,170 Non current liabilities Deferred liability 65,451 59,674 Current liabilities Trade and other payables 8 100, ,419 Provision for taxation 19,283 8, , ,960 CONTINGENCIES AND COMMITMENTS 9 5,885,211 5,731,804 The annexed notes from 1 to 12 form an integral part of this condensed interim consolidated financial information. SHAHID HAMID PRACHA Chairman INAM UR RAHMAN Chief Executive Quarterly Report

18 Condensed Interim Consolidated Profit & Loss Account (Un-Audited) For the Quarter and Nine Months Ended September 30, 2012 CONTINUING OPERATIONS Quarter ended Nine Months Ended Sep 30, 2012 Sep 30, 2011 Sep 30, 2012 Sep 30, Rupees Sales - net 99,576 71, , ,790 Cost of goods sold (94,363) (63,429) (269,111) (198,508) Gross profit 5,213 7,978 40,358 29,282 Selling and distribution (1,525) (2,971) (6,490) (8,743) Administrative expenses (14,756) (19,484) (63,118) (64,854) Other operating income 15,111 23,838 68,364 73,377 (1,170) 1,383 (1,244) (220) Finance cost (158) (92) (515) (459) Impairment loss on available for sale investments of Holding company - (80) - (818) Associated company - (194) (37,988) (57,124) Share of profit from associates excluding impairment loss on available for sale investments (44,192) 183, , ,487 (44,350) 183, , ,086 (Loss) / profit before taxation (40,307) 192, , ,148 Provision for taxation - Current (874) (1,832) (10,742) (5,574) - Share of taxation from associate 9,486 (34,199) (15,979) (126,563) 8,612 (36,031) (26,721) (132,137) (Loss) / profit after taxation from continuing operations (31,695) 156, , ,011 DISCONTINUED OPERATIONS (Loss) / profit from discontinued operations (6,394) (7,022) 8,466 (18,977) (Loss) / profit for the period (38,089) 149, , ,034 Earnings per share - Basic & diluted Continuing operations (Rs.) (0.54) Earnings per share - Basic & diluted Discontinued operations (Rs.) (0.11) (0.12) 0.14 (0.32) The annexed notes from 1 to 12 form an integral part of this condensed interim consolidated financial information. 16 SHAHID HAMID PRACHA Chairman INAM UR RAHMAN Chief Executive

19 Condensed Interim Consolidated Statement of Comprehensive Income (Un-Audited) For the Quarter and Nine Months Ended September 30, 2012 Quarter ended Nine Months Ended Sep 30, 2012 Sep 30, 2011 Sep 30, 2012 Sep 30, Rupees (Loss) / profit after taxation (38,089) 149, , ,034 Other comprehensive income (Deficit) / surplus on remeasurement of available for sale investments - Holding company (42) (1,660) 830 (1,499) - Associate company (46,886) 14,691 16,900 (51,371) Total comprehensive (loss) / ncome (85,017) 162, , ,164 The annexed notes from 1 to 12 form an integral part of this condensed interim consolidated financial information. SHAHID HAMID PRACHA Chairman INAM UR RAHMAN Chief Executive Quarterly Report

20 Condensed Interim Consolidated Cash Flow Statement (Un-Audited) Nine Months ended Sep 30, 2012 Nine Months ended Sep 30, 2011 Continuing Discontinued Total Continuing Discontinued Total Operations Operations Operations Operations Rupees in ' A. Cash Flow from Operating Activities: Profit / (loss) before taxation 231,354 8, , ,148 (18,977) 542,171 Adjustment for: Depreciation 5,339 1,552 6,891 5,211 1,874 7,085 Amortization Provision for gratuity 11,756-11,756 7, ,016 Interest income (1,813) - (1,813) Unrealized gain on short term investments (23,144) - (23,144) (41,763) - (41,763) Loss on disposal of computer Gain on sale of long term investment (1,490) - (1,490) Gain on sale of short term investment (28,356) - (28,356) (25,717) - (25,717) Share of profit from associates (230,743) - (230,743) (590,487) - (590,487) Gain / (loss) on sale of property and equipment (14,402) (1,314) (15,716) (91) (788) (879) Impairment loss on available for sale investment Impairment loss on available for sale investment- Associate 37,988-37,988 57,124 57,124 Dividend Income (800) - (800) (800) - (800) Finance cost Operating profit / (loss) before working capital changes (12,243) 8,703 (3,539) (27,487) (17,330) (44,817) (Increase) / Decrease in Current Assets Stores and spares 5,703-5,703 1,271-1,271 Stock-in-trade 8,748 1,783 10,531 (149,578) 5,952 (143,626) Trade debts (73,047) - (73,047) 5, ,275 Loans and advances (1,468) (1,409) (2,877) Deposits, prepayments and other receivables 3,952-3,952 (6,605) 86,640 80,035 Increase / (Decrease) in Current Liabilities Trade debts and other payable (36,768) - (36,768) 48,249 11,854 60,103 (90,936) 1,783 (89,153) (102,954) 103, Cash (used in) / generated from operations (103,179) 10,486 (92,692) (130,441) 85,805 (44,636) Payments for: Gratuity paid (11,622) - (11,622) (6,592) (451) (7,043) Tax paid (12,094) - (12,094) (4,447) (2,881) (7,328) Finance cost paid (187) - (187) (762) (65) (827) Net cash (outflow) /inflow from Operating Activities (127,082) 10,486 (116,596) (142,242) 82,408 (59,834) B. Cash Flow from Investing Activities Additions to capital work in progress (38,146) - (38,146) (64,816) - (64,816) Sale proceeds from disposal of property, plant and equipment 17,070-17,070 1,434 1,428 2,862 Short term investments - net 151, , , ,921 Dividend received 78,632-78,632 20,283-20,283 Interest received 2,396-2, Sale proceeds from disposal of investments 2,390-2,390 Purchase of intangible assets (201) - (201) Purchase of property, plant and equipment (2,534) - (2,534) (3,283) - (3,283) Net cash inflow from Investing Activities 208, ,718 79,929 1,428 81,357 C. Cash Flow from Financing Activities Funds transferred from operations ,892 (84,892) - Dividend paid (57,928) - (57,928) (4) (5) (9) Net cash (outflow) from Financing Activities (57,928) - (57,928) 84,888 (84,897) (9) Net increase / (decrease) in cash and cash equivalents (A+B+C) 23,708 10,486 34,194 22,575 (1,061) 21,514 Cash and cash equivalents at the beginning of the period 133,483 (81,169) 52,314 25,220 1,413 26,633 Cash and cash equivalents at the end of the period 157,191 (70,683) 86,508 47, ,147 The annexed notes from 1 to 12 form an integral part of this condensed interim consolidated financial information. 18 SHAHID HAMID PRACHA Chairman INAM UR RAHMAN Chief Executive

21 Condensed Interim Consolidated Statement of Changes in Equity (Un-Audited) Capital Reservess Total Unrealized Gain / (loss) on Remeasurement of Available for Sale Investments in Associate Unrealized Gain / (loss) on Remeasurement of Available for Sale Investments Unappropriated Profit General Reserve Capital Redemption Reserve Fund Capital Reserve Share Premium Merger Reserve Ordinary Shares Rupees in Balance at January 01, ,547 10, ,865 33,311 25, ,355 3,872,669 4,627 73,243 5,066,107 Issue of bonus Rs. 1.5 for the 77, (77,031) year ended December 31, Total comprehensive income for the period ,034 (1,499) (51,371) 357,164 Balance as at September 30, ,578 10, ,865 33,311 25, ,355 4,205,672 3,128 21,872 5,423,271 Balance at January 01, ,578 10, ,865 33,311 25, ,355 4,357,199 2,740 (24,368) 5,528,170 Final cash dividend for the year ended December 31, Rs. 1 per share (59,058) - - (59,058) Total comprehensive income for the period , , ,829 Balance as at September 30, ,578 10, ,865 33,311 25, ,355 4,511,240 3,570 (7,468) 5,699,941 The annexed notes from 1 to 12 form an integral part of this condensed interim consolidated financial information. INAM UR RAHMAN Chief Executive SHAHID HAMID PRACHA Chairman Quarterly Report

22 Notes to the Condensed Consolidated Interim Financial Information (Un-Audited) 1. GENERAL INFORMATION 1.1 Dawood Lawrencepur Limited, the Holding Company was incorporated in Pakistan in the year 2004 as a public limited company formed as a result of Scheme of Arrangement for Amalgamation in terms of the provisions of the Companies Ordinance, 1984 between Dawood Cotton Mills Limited, Dilon Limited, Burewala Textile Mills Limited and Lawrencepur Woolen and Textile Mills Limited. The shares of the Holding Company are listed on the Karachi and Lahore Stock Exchanges. The Holding Company is principally engaged in the business of manufacture and sale of yarn and fabrics made from natural and man-made fibers and blends thereof. The registered office of the Company is situated at 3rd Floor, Dawood Centre, M.T. Khan Road, Karachi. 1.2 The Holding Company in the year 2008 suspended its manufacturing unit operations located at Dawoodabad, Burewala, District Vehari, and closed down the mill in The assets (plant, machinery and current assets) relating to the closed down unit have been classified as discontinued operations and are accounted for as per the requirements of IFRS-5 non-current assets held for sale and discontinued operations. 1.3 The Holding Company has a wholly owned subsidiary namely Tenaga Generasi Limited the Subsidiary Company. The Subsidiary Company was incorporated in 2005 as an unlisted public company under the Companies Ordinance, 1984 to primarily carry out business of power generation as an independent power producer using wind power. The Subsidiary Company is in the process of setting up a wind energy project in Mirpur Sakro, District Thatta, Sindh. The registered office of the Subsidiary Company is situated at Dawood Centre, M.T. Khan Road, Karachi. 2. BASIS OF PREPARATION This condensed interim consolidated financial information includes the financial information of Dawood Lawrencepur Limited (the Holding Company). The condensed interim financial information of the Subsidiary Company has been consolidated on a line by line basis. This condensed interim consolidated financial information has been prepared under the historical cost convention, except certain investments which have been measured at fair value and investment in associate is accounted for using the equity method. All amounts are in Pakistani Rupees which is the functional and presentation currency of the Company unless stated otherwise. 20

23 Notes to the Condensed Consolidated Interim Financial Information (Un-Audited) 2.1 Statement of compliance This condensed interim consolidated financial information for the nine months ended September 30, 2012 has been prepared in accordance with the requirements of International Accounting Standard 34 - Interim Financial Reporting and provisions of and directives issued under the Companies Ordinance, In case where requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 have been followed. The disclosures made in this condensed interim consolidated financial information have been limited based on the International Accounting Standard 34 - Interim Financial Reporting. They do not include all of the information and disclosures required in the annual consolidated financial statements and should be read in conjunction with the annual audited consolidated financial statements for the year ended December 31, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, ESTIMATES AND RISK MANAGEMENT POLICIES 3.1 The accounting policies, underlying estimates and methods of computation adopted in the preparation of this condensed interim consolidated financial information are the same as those applied in the preparation of annual audited consolidated financial statements for the year ended December 31, The financial risk management objectives and policies adopted are consistent with those disclosed in the annual audited consolidated financial statements for the year ended December 31, LONG TERM INVESTMENTS Sep 30, 2012 December 31, 2011 (Unaudited) (Audited) Note Rupees in 000 Investment in associated company 4.1 4,193,823 4,077,979 Other investments 4.2 6,025 5,195 4,199,848 4,083,174 Quarterly Report

24 Notes to the Condensed Consolidated Interim Financial Information (Un-Audited) 4.1 Investment in associated company Sep 30, 2012 December 31, 2011 (Unaudited) (Audited) Rupees in 000 Associated company - quoted Dawood Hercules Corporation Limited Percentage holding 16.19% (December 31, 2011: 16.19%) 77,931,896 (December 31, 2011: 77,931,896) fully paid ordinary shares of Rs. 10/- each Market value Rs. 2,782 million (December 31, 2011: 3,273 million) Chief Executive Officer: Mr. Shahid Hamid Pracha Opening balance: Cost 65,294 65,294 Share of post acquisition profits 4,037,053 3,484,219 Share of other comprehensive income of associated company (24,368) 38,284 4,077,979 3,587,797 Movement during the period / year: Share of profit 230, ,449 Share of other comprehensive income of associated company 16,900 (62,652) Share of taxation (15,979) (188,744) Impairment loss on available for sale investments (37,988) (57,388) Dividend received (77,832) (19,483) 115, ,182 4,193,823 4,077,979 Financial results as at June 30, 2012 have been used for the purpose of application of equity method. 22

25 Notes to the Condensed Consolidated Interim Financial Information (Un-Audited) 4.2 Other investments Available for sale investments Sep 30, 2012 December 31, Sep Dec-11 (Unaudited) (Audited) No. of Shares / Units Name of Investee Rupees in 000 Listed Securities 200, ,000 National Investment Trust Limited 6,010 5,180 Un-Listed Securities 1,500 1,500 Asian Co-operative Society Limited , ,000 Karnaphuli Paper Mills Limited - - Mianwali Central Co-operative Bank Limited ,025 5,195 Cost of Investment in securities classified as available for sale is Rs million (December 31,2011: Rs million). 5. TRADE DEBTS 30-Sep Dec-11 (Un-audited) (Audited) Rupees in 000 Unsecured Considered good 155,690 82,643 Considered doubtful 15,666 22, , ,110 Provision against doubtful receivable (15,666) (22,467) 155,690 82, LOANS AND ADVANCES Unsecured- considered good Advance tax 20,576 8,730 Loans and advances to employees 2,638 1,730 Advances to suppliers 894 1,365 Advances tax Others 212 1,123 24,698 13,080 Quarterly Report

26 Notes to the Condensed Consolidated Interim Financial Information (Un-Audited) 7. SHORT TERM INVESTMENTS Sep 30, 2012 December 31, 2011 (Unaudited) (Audited) Rupees in 000 Held for trading at fair value through Profit and Loss , , Held for trading at fair value through Profit and Loss 30-Sep-12 No. of Units 31-Dec-11 Name of Investee 2,886,320 3,560,143 Meezan Cash Fund 144, ,506 1,422,764 1,680,961 UBL Liquidity Plus Fund 146, ,911 MCB Cash Management 1,610,834 2,525,114 Optimizer Fund 165, ,798 NAFA Government Securities 9,780,802 4,675,740 Liquid Fund 98,338 47, , ,837 Cost of investment in securities classified as financial assets at fair value through profit or loss is Rs million (December 31, 2011: Rs million). 8. TRADE AND OTHER PAYABLES Creditors 1,291 18,004 Accrued expenses 32,386 45,134 Gratuity to ex staff Advance from customers and others 10,537 10,777 Unclaimed dividend 22,161 21,031 Due to Islamic Development Bank 25,969 25,969 Deposits 527 1,115 Workers welfare fund 5,223 2,423 Withholding tax Advance against scrap sales 2,307 10, , ,419 24

27 Notes to the Condensed Consolidated Interim Financial Information (Un-Audited) 9. CONTINGENCIES AND COMMITMENTS 9.1 Contingencies a) The Taxation Officer while framing assessment for the tax year 2003 made errors in allowing expenses relating to gratuity, lease rentals, employee perquisites and utilities amounting to Rs million, and for tax years 2004 to 2005 had made additions on account of allocation of expenses between the normal and presumptive income of the Holding Company amounting to Rs million and had disallowed Rs million as adjustment of brought forward losses of the Holding Company. During the year ended December 31, 2011, Appellate Tribunal Inland Revenue (ATIR) has decided the issue of brought forward losses against the Holding Company, however, the Holding Company has filed an appeal before the High Court and a decision is awaited. The remaining issues have been set aside by the said Tribunal and remanded to the taxation officer for reconsideration. The tax impact of all cases amounts to Rs million. b) The Holding Company is contingently liable against guarantees and counter guarantees amounting to Rs million (December 31, 2011: Rs million). These are secured against margins and lien over certain short term investments. c) The Subsidiary Company has arranged a bank guarantee of USD 125,000 (2011: USD 250,000) to Alternative Energy Development Board (AEDB) for Letter of Support. The guarantee is valid upto November 30, Commitments The Holding Company has no commitment against letters of credit (December 31, 2011: Rs million) The Holding Company has no commitment to supply fabric to any customer (December 31, 2011: Rs. 9.8 million). 10. TRANSACTIONS WITH RELATED PARTIES Related parties comprise of associated undertakings, other related group companies, directors of the Group and key management personnel. The Group in the normal course of business carries out transactions with various related parties. Other significant transactions with related parties are as follows: Quarterly Report

28 Notes to the Condensed Consolidated Interim Financial Information (Un-Audited) (Unaudited) Sep 30, 2012 Sep 30, 2011 Relationship Nature of transaction Rupees in 000 a. Associated companies Dawood Hercules Corporation Limited Purchase of asset Reimbursement of expenses by Company Sach International (Private) Limited Sale of fabric 201,281 31,307 Reimbursement of expenses to Company 3,769 1,293 Reimbursement of expenses by Company 267 Royalty 1,592 - Purchase of fabric 4,329 - Cyan Limited Insurance claim received Insurance premium refund / paid D H Fertilizer Limited Reimbursement of expenses by Company b. Other related parties Sui Northern Gas Pipelines Limited Utility charges paid 14,700 15,718 Sale of Fabric 2,590 - The Dawood Foundation Rental charges paid 5,862 7,306 Reimbursement of expenses by Company 1, Inbox Business Technologies (Pvt) Limited Hardware maintenance charges paid Dawood Corporation (Pvt) Limited Reimbursement of expenses by Company Reimbursement against assets transferred by Company - 1,233 Dawood Lawrencepur Limited (Burewala Mills) - Staff Provident Fund Contribution by Company LWTM - Employees Gratuity Fund Contribution by Company 1,141 1,024 Directors Bonus shares issued - 2,682 c. Key Management Personnel Salaries and employee benefits 29,417 23,139 26

29 Notes to the Condensed Consolidated Interim Financial Information (Un-Audited) 11. DATE OF AUTHORIZATION FOR ISSUE This condensed interim consolidated financial information was authorized for issue on October 25, 2012 by the Board of Directors of the Holding Company. 12. GENERAL Figures have been rounded off to the nearest thousand rupees. SHAHID HAMID PRACHA Chairman INAM UR RAHMAN Chief Executive Quarterly Report

30