Interim Financial Report

Transcription

1 Interim Financial Report for the first quarter ended, Pak Elektron Limited

2 Pak Elektron Limited CONTENTS STAKEHOLDERS INFORMATION Corporate Information Directors Review CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION Condensed Interim Consolidated Balance Sheet Condensed Interim Consolidated Profit and Loss Account / Statement of Comprehensive Income Condensed Interim Consolidated Cash Flow Statement Condensed Interim Consolidated Statement of Changes in Equity Condensed Interim Notes to the Consolidated Financial Information CONDENSED INTERIM SEPARATE FINANCIAL INFORMATION Condensed Interim Balance Sheet Condensed Interim Profit and Loss Account / Statement of Comprehensive Income Condensed Interim Cash Flow Statement Condensed Interim Statement of Changes in Equity Condensed Interim Notes to the Financial Information

3 CORPORATE INFORMATION Board of Directors Mr. M. Naseem Saigol Chairman Executive Mr. M. Murad Saigol Chief Executive Executive/Certified (DTP) Mr. M. Azam Saigol Director Non Executive Mr. Muhammad Zeid Yousuf Saigol Director Executive/Certified (DTP) Mr. Haroon Ahmad Khan Director Executive/Certified (DTP) Syed Manzar Hassan Director Executive Syed Zubair Ahmad Shah Director NIT Nominee/Independent Mr. Wajahat A. Baqai Director NBP Nominee U/S 182 of the Ordinance/Non Executive Mr. Akbar Hassan Khan Director NBP Nominee U/S 182 of the Ordinance/Non Executive Mr. Usman Shahid Director NBP Nominee U/S 182 of the Ordinance/Non Executive Mr. Khalid Siddiq Tirmizey Director BOP Nominee U/S 182 of the Ordinance/Non Executive Mr. Munaf Ibrahim Director Independent Audit Committee Mr. M. Azam Saigol Chairman/Member Mr. Wajahat A. Baqai Member Syed Zubair Ahmad Shah Member Mr. Haroon Ahmad Khan Member Company Secretary Muhammad Omer Farooq Chief Financial Officer Syed Manzar Hassan, FCA HR & Remuneration Committee Mr. M. Azam Saigol Chairman/Member Mr. Haroon Ahmad Khan Member Syed Zubair Ahmad Shah Member Syed Manzar Hassan Member Auditors M/s Rahman Sarfaraz Rahim Iqbal Rafiq Chartered Accountants Legal Advisor M/s Hassan & Hassan Advocates Share Registrar Corplink (Private) Limited Wings Arcade, 1K Commercial Model Town, Lahore. Tel: , Fax: Bankers Albaraka Islamic Bank Askari Bank Limited Bank Alfalah Limited Bank of Khyber Bank of Punjab Burj Bank Limited Faysal Bank Limited KASB Bank Limited MCB Bank Limited National Bank of Pakistan NIB Bank Limited Pak Brunei Investment Company Limited Pak Libya Holding Company (Private) Limited Silk Bank Limited Soneri Bank Limited Standard Chartered Bank Summit Bank Limited Registered Office 17Aziz Avenue, Canal Bank, Gulberg V, Lahore. Tel: Fax: Works 14K.M. Ferozepur Road, Lahore. Tel: (9 Lines) Transformer Facility 34K.M. Ferozepur Road, Keath Village, Lahore. Tel: Karachi Kohinoor Building, 25West Wharf Road, Karachi. Tel: Fax: Islamabad Room # 301, 3rd Floor, Green Trust Tower, Blue Area, Islamabad. Tel: , Fax: China 206, No. 1007, Zhong Shan Naun Er Road, Shanghai, China. Tel: Fax:

4 Pak Elektron Limited Interim Financial Report, DIRECTORS REVIEW Dear Share Holders Your Directors are pleased to present the unaudited interim financial statements of the Company for the First quarter ended,. Alhamdulillah, Sales revenue achieved during the period is Rs billion as compared to Rs billion of corresponding quarter of last financial year, representing a growth of 16 %. The gross margins of current quarter are also higher as compared to corresponding quarter of previous year. The net profit after tax and earnings per share also show significant improvement. The improvement in margins is mainly attributable to general reduction in prices of plastics, steel, copper etc. as a result of reduction in oil prices, and further due to improved capacity utilization, operating cost control initiatives, and material cost reduction as a result of R&D initiatives in our main products. Summary of results is as under: Rupees in million Quarter ended, Quarter ended, Increase / (Decrease) Sales 5,869 5, Gross Profit 1,679 1, Finance Cost (11) Profit before tax Profit after tax Earnings per share Performance of the Company in appliances division during the current period showed significant improvement over the corresponding period of last financial year. Appliances Division Appliances Division's sale has shown a momentous increase in first quarter ended, against the corresponding quarter. Sales value achieved is higher by 32 % over the corresponding first quarter of last year. This time again, Refrigerators remained the main contributor to the increase in sales revenue. It is been achieved through introduction of new models, research and development, cost control initiatives and effective marketing strategies. Deep freezers sales have also shown improvement. Refrigerators and Split Air Conditioners sales in first quarter are normally a starter which peaks in the second quarter. Your Company is now geared up for higher sales volumes in the current year and especially in second quarter. The Company is enduring with its focused marketing and distribution efforts to further strengthen its position in the market. Appliances market is looking good and your company is well positioned to make higher supplies to make higher sales and profitability Insha Allah. With the introduction of new models in our refrigerator range demand for PEL refrigerator is showing positive trends. Other appliances products like Deep freezers, Air conditioners, Microwave ovens have also started pouring their share into the Company's sales. Power Division Despite slow ordering from Wapda Distribution companies, Power Division remained successful in maintaining its sales in current quarter at same level of first quarter of last year. Your Company is working on new designs and prototypes for different power division products to rationalize costs without compromising on quality. State of inertia in distribution transformers ordering has started to fade away and new orders have started flowing in from Discos on top of continuous ordering from private customers and our in house EPC department. With reasonable ordering outlook we are optimistic that we would be able to meet our budgeted sales for the power division during the course of the financial year. 03

5 DIRECTORS REVIEW Future Outlook The sales and profitability outlook seems promising for the current financial year. We hope that your company would be able to achieve its targets for both Power and Appliances divisions and by the grace of Almighty would earn healthy profitability. Acknowledgement We take this opportunity to thank all our customers, shareholders, bankers, employees, CBA and workers for their continued support and guidance. on behalf of the Board of Directors Lahore April 24, M. MURAD SAIGOL Chief Executive Officer 04

6 CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION

7 CONDENSED INTERIM CONSOLIDATED BALANCE SHEET AS AT MARCH 31, Note December 31 (UnAudited) (Audited) EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorized Capital 3 6,000,000 Issued, subscribed and paid up capital 4 4,431,029 Capital Reserve 1,293,858 Unappropriated profit 6,086,174 11,811,061 SURPLUS ON REVALUATION 4,516,349 NONCURRENT LIABILITIES Redeemable Capital 5 4,571,349 Longterm financing 6 2,215,699 Liabilities against assets subject to finance lease 7 98,561 Deferred taxation 2,412,869 Deferred income 44,593 6,000,000 4,431,029 1,293,858 5,301,554 11,026,441 4,568,357 4,826,469 2,442,807 74,715 2,394,344 45,158 CURRENT LIABILITIES Trade and other payables 798,950 Interest/ markup accrued on loans and payables 576,972 Shortterm borrowings 3,809,109 Current Portion of Non Current Liabilities: Long term loans 1,818,628 Liabilities against assets subject finance lease 70,148 7,073,807 Contingencies and Commitments 8 32,744, , ,528 4,243,261 1,462,760 60,395 7,148,373 32,526,664 The annexed notes from 1 to 15 form an integral part of this condensed interim consolidated financial information. M. MURAD SAIGOL Chief Executive Officer 06

8 Pak Elektron Limited Interim Financial Report, Note December 31 (UnAudited) (Audited) ASSETS NONCURRENT ASSETS Property, plant and equipment 9 14,425,945 14,466,890 Intangible assets 342, ,008 14,768,750 14,810,898 Longterm investments 64,467 63,890 Longterm deposits 198, ,808 CURRENT ASSETS Stores, spares and loose tools 448, ,140 Stockintrade 6,436,584 6,316,868 Trade debts 7,854,620 7,702,272 Advances 1,254,303 1,256,100 Trade deposits and shortterm prepayments 904, ,209 Other receivables 172, ,730 Other financial assets 21,962 21,596 Income tax refundable 299, ,067 Cash and bank balances 320, ,086 17,713,048 17,459,068 32,744,288 32,526,664 HAROON A. KHAN Director 07

9 CONDENSED INTERIM CONSOLIDATED PROFIT AND LOSS ACCOUNT / STATEMENT OF COMPREHENSIVE INCOME FOR THE QUARTER ENDED MARCH 31, (UnAudited) Note Gross Sales 10 5,868,729 5,053,989 Sales Tax and discount , ,645 Net Sales 5,161,571 4,338,344 Cost of Sales 11 3,482,491 3,124,498 Gross Profit 1,679,080 1,213,846 Other Operating Income 6,526 6,139 1,685,606 1,219,985 Distribution Cost 254, ,330 Administrative Cost 188, ,343 Other Operating Expenses 2,800 26,970 Finance Cost 471, ,300 Share of loss of associate (2,439) (3,285) Profit /(Loss) Before Tax 765, ,757 Provision for Taxation 33,091 43,383 Profit /(Loss) For the year 732, ,374 Earnings per share Rupees Basic & diluted The annexed notes from 1 to 15 form an integral part of this condensed interim consolidated financial information. M. MURAD SAIGOL Chief Executive Officer HAROON A. KHAN Director 08

10 Pak Elektron Limited Interim Financial Report, CONDENSED INTERIM CONSOLIDATED CASH FLOW STATEMENT FOR THE QUARTER ENDED MARCH 31, (UnAudited) Cash flows from operating activities Profit before taxation 765,702 Adjustments for non cash and other items 657,444 Cash generated from operations before working capital changes 1,423,146 Working capital changes (332,993) Cash generated from operations 1,090,153 Finance cost paid (394,704) Compensated absence paid (7,244) Income tax paid (31,777) (433,725) Net cash generated/(used) in operating activities 656,428 Cash flows from investing activities Purchase of property, plant and equipment (120,171) Proceeds from disposal of property, plant and equipment 2,522 Purchase of other financial assets Increase in longterm deposits (5,215) Net cash used in investing activities (122,864) Cash flows from financing activities Increase / (Decrease) in Long Term Financing (126,360) Increase/ (Decrease) in liabilities against finance lease 7,606 Decrease in Short Term Borrowing (434,152) Net cash (used)/generated from financing activities (552,906) Net increase/(decrease) in cash and cash equivalents (19,342) Cash and cash equivalents at beginning of the period 340,086 Cash and cash equivalents at end of the period 320, , , ,656 (516,666) 454,990 (1,316,052) (6,199) (84,105) (1,406,356) (951,366) (62,958) 2,350 (50,219) (2,348) (113,175) 2,904,318 (7,244) (1,856,549) 1,040,525 (24,016) 277, ,788 The annexed notes from 1 to 15 form an integral part of this condensed interim consolidated financial information. M. MURAD SAIGOL Chief Executive Officer HAROON A. KHAN Director 09

11 CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE QUARTER ENDED MARCH 31, (UnAudited) Capital reserves Revenue reserves Share capital Premium on issue of shares Unappropriated profit Total Balance as at December 31, ,130, ,740 2,885,041 6,545,470 Total comprehensive income for the period 253, ,374 Incremental depreciation 53,112 53,112 Balance as at, 3,130, ,740 3,191,527 6,851,956 Total comprehensive income for the period 1,988,095 1,988,095 Issue of right ordinary shares 1,032,229 1,032,229 2,064,458 Issue of bonus shares 268,111 (268,111) Incremental depreciation 121, ,932 Balance as at December 31, 4,431,029 1,293,858 5,301,554 11,026,441 Total comprehensive income for the period. 732, ,611 Incremental depreciation 52,009 52,009 Balance as at, 4,431,029 1,293,858 6,086,174 11,811,061 The annexed notes from 1 to 15 form an integral part of this condensed interim consolidated financial information. M. MURAD SAIGOL Chief Executive Officer HAROON A. KHAN Director 10

12 NOTES TO THE CONDENSED INTERIM Pak Elektron Limited Interim Financial Report, CONSOLIDATED FINANCIAL INFORMATION FOR THE QUARTER ENDED MARCH 31, (UnAudited) 1 LEGAL STATUS AND OPERATIONS 1.1 The Group consists of: Parent Company Pak Elektron Limited Subsidiary Company PEL Marketing (Private) Limited Parent Company Pak Elektron Limited ("PEL" or "the Parent Company") was incorporated in Pakistan on March 03, 1956 as a public limited company under the Companies Act, 1913 (replaced by the Companies Ordinance, 1984). Registered office of the Parent Company is situated at 17 Aziz Avenue, Canal Bank, Gulberg V, Lahore. The Parent Company is currently listed on all three Stock Exchanges of Pakistan. The principal activity of the Parent Company is manufacturing and sale of electrical capital goods and domestic appliances. The Parent Company is currently organized into two main operating divisions Power Division and Appliances Division. The Parent Company's activities are as follows: Power Division: manufacturing and distribution of transformers, switchgears, energy meters, power transformers, construction of grid stations and electrification works. Appliances Division: manufacturing, assembling and distribution of refrigerators, air conditioners, deep freezers, microwave ovens and other home appliances. Subsidiary Company PEL Marketing (Private) Limited ("PMPL" or "the Subsidiary Company") was incorporated in Pakistan on August 11, 2011 as a private limited company under the Companies Ordinance, Registered office of the Subsidiary Company is situated at 17 Aziz Avenue, Canal Bank, Gulberg V, Lahore. The principal activity of the Subsidiary Company is sale of electrical capital goods and domestic appliances. 1.2 These consolidated financial statements are presented in Pak Rupees, which is the functional currency of the Group and figures are rounded off to the nearest thousand of rupees unless otherwise stated. 2. BASIS OF PREPARATION This condensed interim consolidated financial information is unaudited and is being submitted to the members as required by section 245 of The Companies Ordinance, 1984 and the listing regulations of Karachi, Lahore and Islamabad Stock Exchanges. This condensed interim financial information has been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 'Interim Financial Reporting'. This condensed interim consolidated financial information does not include all the information required for annual financial statements and therefore, should be read in conjunction with the annual financial statements for the year ended December 31,. These financial statements have been prepared under " Historical cost convention " except for certain fixed assets which are stated at revalued amount / fair value and certain financial assets which are stated at fair value. 11

13 2.1 ACCOUNTING POLICIES The accounting policies adopted for the preparation of these unaudited financial statements are consistent with those applied in preparation of preceding published financial statements of the Group for the year ended December 31,. 3. SHARE CAPITAL AUTHORIZED CAPITAL (Unaudited) (Audited) (Unaudited) (Audited) December 31 December 31 Number of shares 500,000, ,000,000 Ordinary shares of Rs. 10/ each 5,000,000 5,000,000 62,500,000 62,500,000 A class preference shares of Rs. 10 each 625, ,000 37,500,000 37,500,000 B class preference shares of Rs. 10 each 375, , ,000, ,000,000 1,000,000 1,000, ,000, ,000,000 6,000,000 6,000,000 4 ISSUED, SUBSCRIBED AND PAID UP CAPITAL (Unaudited) (Audited) (Unaudited) (Audited) December 31 December 31 Number of shares 273,214, ,214,754 Issued for cash 2,732,148 Other than cash: 137, ,500 against machinery 1,375 1, , ,273 on acquisition of Pel Appliances Limited 4,083 4,083 6,040,820 6,040,820 against conversion of preference shares 60,408 60, ,343, ,343,841 as fully paid bonus shares 1,183,439 1,183, ,145, ,145,188 3,981,453 3,981,453 Fully paid A class preference shares of Rs. 10 each 44,957,592 44,957,592 Issued for cash 449, , ,102, ,102,780 2,732,148 4,431,029 4,431,029 12

14 Pak Elektron Limited Interim Financial Report, (Unaudited) (Audited) December Reconciliation of number of shares of Rs. 10 each: Ordinary shares At beginning of year Add: Issued during the year as bonus shares Add: Issued during the year as right shares 398,145, ,111,239 26,811, ,222, ,145, ,145,188 5 REDEEMABLE CAPITAL As at beginning of the period/ year Issued during the period on settlement of: Long term finances Short term borrowing As at end of the period / year Current maturity 5,629,976 2,464,286 2,103,438 1,062,252 3,165,690 5,629,976 5,629,976 1,058, ,507 4,571,349 4,826,469 6 LONGTERM FINANCINGSECURED As at beginning of the period/ year 3,102,060 3,628,291 Obtained during the period / year Settled through issue of PPTFC's Repaid during the period / year As at end of the period / year Current maturity 126, ,360 2,975, ,001 2,215,699 1,850,000 2,103, ,793 2,376,231 3,102, ,253 2,442,807 13

15 7 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE (Unaudited) (Audited) December 31 Present value of minimum lease payments Less: Current portion payable within next twelve months 168, ,110 70,148 60,395 98,561 74,715 8 CONTINGENCIES AND COMMITMENTS There are no material changes in contingencies and commitments as disclosed in the notes to the financial statements for the year ended December 31,. 9 PROPERTY, PLANT AND EQUIPMENT (Unaudited) (Audited) December 31 Property, plant and equipment Capital work in progress Net book value at the beginning of the period/ year Additions / transferred during the period / year 14,362,777 14,407,147 63,168 59,743 14,425,945 14,466,890 14,407,147 14,764, , ,994 14,549,872 15,168,484 Written down value of the assets disposed off/ adjustment 5,174 10,109 Depreciation charged during the period 181, ,228 Net book value at the end of the period/ year 14,362,777 14,407, SALES (Unaudited) (Unaudited) Local Export Less: Sales tax and excise duty Discount 5,620, ,868 5,868, ,654 67, ,158 5,161,571 5,000,989 53,000 5,053, , , ,645 4,338,344 14

16 Pak Elektron Limited Interim Financial Report, 11 COST OF SALES (Unaudited) (Unaudited) Raw material consumed 2,787,092 2,675,370 Direct wages 156, ,850 Factory overhead 445, ,392 3,388,756 3,270,612 Workinprocess at beginning of period 1,262,830 1,043,870 at end of period (1,138,270) (1,084,390) 124,560 (40,520) Cost of goods manufactured 3,513,316 3,230,092 Finished goods at beginning of period 877, ,437 at end of period (908,314) (491,031) (30,826) (105,594) Cost of goods sold 3,482,491 3,124, EARNINGS PER ORDINARY SHARE BASIC AND DILUTED The calculation of basic and diluted earnings per ordinary share is based on the following data: Earnings (Unaudited) (Unaudited) Profit for the period 732, ,375 Less: dividend payable on preference shares 10,677 10,677 Profit attributable to ordinary shares 721, ,698 Number of shares (Unaudited) (Unaudited) Weighted average number of ordinary shares for the purpose of basic earnings per share 398,145, ,145,188 Effect of dilutive potential ordinary shares 44,957,592 44,957, ,102, ,102,780 15

17 (Unaudited) (Unaudited) Basic earning per share (rupees) Basic earnings per share have been calculated through dividing profit as stated above by weighted average number of ordinary shares. There is no diluting effect on the basic earnings per share of the Group as the conversion rights pertaining to outstanding preference shares, under the original terms of issue, are no longer exercisable. 13 TRANSACTIONS AND BALANCES WITH RELATED PARTIES "Related parties from the group`s perspective comprise associated companies,key management personnel and post employment benefit plan. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the group, directly or indirectly, and includes the chief executive and directors of the parent company." Transactions with key management personnel are limited to payment of short term and post employemt benefits. The group in the normal course of business carries out various transactions with its subsidiary and associated companies and continues to have policy whereby all such transactions are carried out on commercial tems and conditions which are equivalent to those prevailing in an arm`s length transactions. Details of transactions with related parties are as follows: 13.1 Transactions with related parties (Unaudited) (Unaudited) Nature of relationship Nature of transaction Associated Companies Purchase of services 19,840 27,359 Key management personnel Short term employee benefits 10,955 10,235 Post employment benefits DATE OF AUTHORIZATION FOR ISSUE These financial statements were authorized for issue on April 24, by the Board of Directors of the Company. 15 GENERAL Figures have been rounded off to the nearest thousand rupee, unless otherwise stated. M. MURAD SAIGOL Chief Executive Officer HAROON A. KHAN Director 16

18 CONDENSED INTERIM FINANCIAL INFORMATION

19 CONDENSED INTERIM BALANCE SHEET AS AT MARCH 31, Note December 31 (UnAudited) (Audited) EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorized Capital 3 Issued, subscribed and paid up capital 4 Capital Reserve Unappropriated profit SURPLUS ON REVALUATION NONCURRENT LIABILITIES Redeemable Capital 5 Longterm financing 6 Liabilities against assets subject to finance lease 7 Deferred taxation Deferred income CURRENT LIABILITIES Trade and other payables Interest/ markup accrued on loans and payables Shortterm borrowings Current Portion of Non Current Liabilities: Long term loans Liabilities against assets subject finance lease CONTIGENCIES AND COMMITMENTS 8 6,000,000 4,431,029 1,293,858 4,303,993 10,028,880 4,516,349 4,571,349 2,215,699 98,561 2,067,463 44, , ,972 3,804,753 1,818,628 70,148 7,027,802 30,570,697 6,000,000 4,431,029 1,293,858 3,876,195 9,601,082 4,568,357 4,826,469 2,442,807 74,715 2,048,938 45, , ,528 4,240,947 1,462,760 60,395 7,082,116 30,689,642 The annexed notes from 1 to 15 form an integral part of this condensed interim financial information. M. MURAD SAIGOL Chief Executive Officer 18

20 Pak Elektron Limited Interim Financial Report, Note December 31 (UnAudited) (Audited) ASSETS NONCURRENT ASSETS Property, plant and equipment 9 14,425,945 14,466,890 Intangible assets 342, ,008 14,768,750 14,810,898 Longterm investments 64,567 63,990 Longterm deposits 198, ,808 CURRENT ASSETS Stores, spares and loose tools 448, ,140 Stockintrade 6,282,310 6,140,170 Trade debts 5,811,322 6,025,103 Advances 1,254,303 1,256,100 Trade deposits and shortterm prepayments 904, ,209 Other receivables 172, ,730 Other financial assets 21,962 21,596 Income tax refundable 379, ,963 Cash and bank balances 264, ,935 15,539,357 15,621,946 30,570,697 30,689,642 HAROON A. KHAN Director 19

21 CONDENSED INTERIM PROFIT AND LOSS ACCOUNT / STATEMENT OF COMPREHENSIVE INCOME FOR THE QUARTER ENDED MARCH 31, (UnAudited) Note Gross Sales Sales Tax and discount Net Sales Cost of Sales Gross Profit 10 4,637,494 4,191, , ,233 3,997,840 3,618, ,110,319 2,959, , ,143 Other Operating Income Distribution Cost Administrative Cost Other Operating Expenses Finance Cost Profit /(Loss) Before Taxation Provision for Taxation Profit /(Loss) For the year Earnings per share Basic & diluted 5,455 1, , ,687 87,952 84, , ,131 2,800 22, , , , ,223 21,453 37, , , The annexed notes from 1 to 15 form an integral part of this condensed interim financial information. M. MURAD SAIGOL Chief Executive Officer HAROON A. KHAN Director 20

22 Pak Elektron Limited Interim Financial Report, CONDENSED INTERIM CASH FLOW STATEMENT FOR THE QUARTER ENDED MARCH 31, (UnAudited) Note Cash flows from operating activities Profit before taxation Adjustments for non cash and other items 397, , , ,210 Cash generated from operations before working capital changes Working capital changes Cash generated from operations Finance cost paid Compensated absence paid Income tax paid Net cash generated/(used) in operating activities Cash flows from investing activities Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Purchase of other financial assets Increase in longterm deposits Net cash used in investing activities Cash flows from financing activities Increase / (Decrease) in Long Term Financing Increase/ (Decrease) in liabilities against finance lease Decrease in Short Term Borrowing Net cash (used)/generated from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period 879,379 33, ,385 (219,396) (7,244) (31,777) (258,417) 653,968 (120,171) 2,522 (5,215) (122,864) (126,360) 7,606 (436,195) (554,949) (23,844) 287, , ,433 (366,258) 277,175 (1,136,363) (6,198) (86,080) (1,228,641) (951,466) (62,958) 2,350 (50,219) (2,348) (113,175) 2,904,318 (7,244) (1,844,441) 1,052,633 (12,008) 259, ,480 The annexed notes from 1 to 15 form an integral part of this condensed interim financial information. M. MURAD SAIGOL Chief Executive Officer HAROON A. KHAN Director 21

23 CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE QUARTER ENDED MARCH 31, (UnAudited) Capital reserves Revenue reserves Share capital Premium on issue of shares Unappropriated profit Total Balance as at December 31, ,130, ,740 2,473,853 6,134,282 Total comprehensive income for the period 110, ,397 Incremental depreciation 53,112 53,112 Balance as at, 3,130, ,740 2,637,362 6,297,791 Total comprehensive income for the period 1,116,901 1,116,901 Issue of right ordinary shares 1,032,229 1,032,229 2,064,458 Issue of bonus shares 268,111 (268,111) Incremental depreciation 121, ,932 Balance as at December 31, 4,431,029 1,293,858 3,876,195 9,601,082 Total comprehensive income for the period. 375, ,789 Incremental depreciation 52,009 52,009 Balance as at, 4,431,029 1,293,858 4,303,993 10,028,880 The annexed notes from 1 to 15 form an integral part of this condensed interim financial information. M. MURAD SAIGOL Chief Executive Officer HAROON A. KHAN Director 22

24 Pak Elektron Limited Interim Financial Report, NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION FOR THE QUARTER ENDED MARCH 31, (UnAudited) 1. LEGAL STATUS AND OPERATIONS Pak Elektron Limited ("PEL" or "the Company") was incorporated in Pakistan on March 03, 1956 as a public limited company under the Companies Act, 1913 (replaced by the Companies Ordinance, 1984). Registered office of the Company is situated at 17 Aziz Avenue, Canal Bank, Gulberg V, Lahore. The Company is currently listed on all three Stock Exchanges of Pakistan. The principal activity of the Company is manufacturing and sale of electrical capital goods and domestic appliances. The Company is currently organized into two main operating divisions Power Division & Appliances Division. The Company's activities are as follows: Power Division: manufacturing and distribution of transformers, switchgears, energy meters, power transformers, construction of grid stations and electrification works. Appliances Division: manufacturing, assembling and distribution of refrigerators, air conditioners, deep freezers, microwave ovens and other home appliances. This condensed interim financial information is presented in Pak Rupees, which is the functional currency of the Company and figures have been rounded off to the nearest thousand of Rupees unless otherwise stated. 2 BASIS OF PREPARATION This condensed interim financial information of the Company for the 1st quarter ended, has been prepared in accordance with the requirements of the 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. 3. SHARE CAPITAL AUTHORIZED CAPITAL (Unaudited) (Audited) December 31 Number of shares (Unaudited) (Audited) December ,000, ,000,000 Ordinary shares of Rs. 10 each 5,000,000 5,000,000 62,500,000 62,500,000 37,500,000 37,500, ,000, ,000,000 A class preference shares of Rs. 10 each B class preference shares of Rs. 10 each 625, , , ,000 1,000,000 1,000, ,000, ,000,000 6,000,000 6,000,000 23

25 4 ISSUED, SUBSCRIBED AND PAID UP CAPITAL (Unaudited) (Audited) (Unaudited) (Audited) December 31 Number of shares December ,214, ,214,754 Issued for cash 2,732,148 Other than cash: 137, ,500 against machinery 1,375 1, , ,273 on acquisition of Pel Appliances Limited 4,083 4,083 6,040,820 6,040,820 against conversion of preference shares 60,408 60, ,343, ,343,841 as fully paid bonus shares 1,183,439 1,183, ,145, ,145,188 3,981,453 3,981,453 Fully paid A class preference shares of Rs. 10 each 44,957,592 44,957,592 Issued for cash 449, , ,102, ,102,780 2,732,148 4,431,029 4,431, Reconciliation of number of shares of Rs. 10 each: (Unaudited) (Audited) December 31 Ordinary shares At beginning of year Add: Issued during the year as bonus shares Add: Issued during the year as right shares 398,145, ,111,239 26,811, ,222, ,145, ,145,188 5 REDEEMABLE CAPITAL As at beginning of the period/ year Issued during the period on settlement of: Long term finances Short term borrowing As at end of the period / year Current maturity 5,629,976 2,464,286 2,103,438 1,062,252 3,165,690 5,629,976 5,629,976 1,058, ,507 4,571,349 4,826,469 24

26 Pak Elektron Limited Interim Financial Report, (Unaudited) (Audited) December 31 6 LONGTERM FINANCINGSECURED As at beginning of the period/ year 3,102,060 3,628,291 Obtained during the period / year Settled through issue of PPTFC's Repaid during the period / year 1,850,000 2,103, , , ,360 2,376,231 As at end of the period / year Current maturity 2,975, ,001 2,215,699 3,102, ,253 2,442,807 7 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE Present value of minimum lease payments Less: Current portion payable within next twelve months 168, ,110 70,148 60,395 98,561 74,715 8 CONTINGENCIES AND COMMITMENTS There are no material changes in contingencies and commitments as disclosed in the notes to the financial statements for the year ended December 31,. (Unaudited) (Audited) December 31 9 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment Capital work in progress Net book value at the beginning of the period/ year Additions / transferred during the period / year Written down value of the assets disposed off/ adjustment Depreciation charged during the period Net book value at the end of the period/ year 14,362,777 14,407,147 63,168 59,743 14,425,945 14,466,890 14,407,147 14,764, , ,994 14,549,872 15,168,484 5,174 10, , ,228 14,362,777 14,407,147 25

27 (Unaudited) (Unaudited) 10 SALES Local Export Less: Sales tax and excise duty Discount 4,389, ,868 4,637, , ,654 3,997,840 4,138,364 53,000 4,191, , ,233 3,618, COST OF SALES Raw material consumed 2,437,346 2,511,982 Direct wages 156, ,850 Factory overhead 445, ,392 3,039,009 3,107,224 Workinprocess at beginning of period 1,262,830 1,043,870 at end of period (1,138,270) (1,084,390) 124,560 (40,520) Cost of goods manufactured 3,163,569 3,066,704 Finished goods at beginning of period 700, ,744 at end of period (754,040) (385,460) (53,250) (106,716) Cost of goods sold 3,110,319 2,959, EARNINGS PER ORDINARY SHARE BASIC AND DILUTED The calculation of basic and diluted earnings per ordinary share is based on the following data: (Unaudited) (Unaudited) Earnings Profit for the period 375, ,397 Less: dividend payable on preference shares 10,677 10,677 Profit attributable to ordinary shares 365,112 99,720 26

28 Pak Elektron Limited Interim Financial Report, Number of shares (Unaudited) (Unaudited) Weighted average number of ordinary shares for the purpose of basic earnings per share 398,145, ,145,188 Effect of dilutive potential ordinary shares 44,957,592 44,957, ,102, ,102,780 (Unaudited) (Unaudited) Basic earning per share (rupees) Basic earnings per share have been calculated through dividing profit as stated above by weighted average number of ordinary shares. There is no diluting effect on the basic earnings per share as the conversion rights pertaining to outstanding preference shares, under the original terms of issue, are no longer exercisable. 13 TRANSACTIONS AND BALANCES WITH RELATED PARTIES Related parties from the Company's perspective comprise subsidiary, associated companies,key management personnel and post employment benefit plan. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, and includes the chief executive and directors of the Company. Transactions with key management personnel are limited to payment of short term and post employment benefits. The Company in the normal course of business carries out various transactions with its subsidiary and associated companies and continues to have policy whereby all such transactions are carried out on commercial tems and conditions which are equivalent to those prevailing in an arm`s length transactions. Details of transactions with related parties are as follows: (Unaudited) (Unaudited) 13.1 Transactions with related parties Nature of relationship Nature of transaction Subsidiary Sales of goods & Services 2,493,715 1,990,070 Associated Companies Purchase of services 19,840 27,359 Key management personnel Short term employee benefits 10,955 10,235 Post employment benefits

29 14 DATE OF AUTHORIZATION FOR ISSUE These financial statements were authorized for issue on April 24, by the Board of Directors of the Company. 15 GENERAL Figures have been rounded off to the nearest thousand rupee, unless otherwise stated. M. MURAD SAIGOL Chief Executive Officer HAROON A. KHAN Director 28

30 17Aziz Avenue, Canal Bank, GulbergV, Lahore. Ph: (042) ,