3rd Quarter Report March 31, 2018

Transcription

1 3rd Quarter Report March 31, 2018 Fulfilling Dreams w w w. k o h a t c e m e n t. c o m

2 01 Contents 02 Corporate Information 03 Directors Review Balance Sheet 06 Profit and Loss Account 07 Statement of Comprehensive Income 08 Cash Flow Statement 09 Statement of Changes in Euqity 10 Notes to the Financial Statements

3 02 3rd Quarter Report - March 31, 2018 Corporate Information Board of Directors Mrs. Hafsa Nadeem Chairperson & Non-Executive Director Mr. Aizaz Mansoor Sheikh Mr. Nadeem Atta Sheikh Mr. M. Atta Tanseer Sheikh Ms. Aminah Aizaz Sheikh Mr. Muhammad Rehman Sheikh Mr. Hasan Tariq Atta Audit Committee Mr. M. Atta Tanseer Sheikh Ms. Aminah Aizaz Sheikh Mr. Muhammad Rehman Sheikh Chief Executive Executive Director Independent Director Non-Executive Director Non-Executive Director Non-Executive Director Chairman Share Registrar Hameed Majeed Associates (Pvt) Limited H.M. House, 7-Bank Square, Lahore. Tel: Fax: Registered Office and Works Kohat Cement Company Limited Rawalpindi Road, Kohat. Tel: Fax: finance@kohatcement.com HR&R Committee Mr. M. Atta Tanseer Sheikh Mr. Aizaz Mansoor Sheikh Mr. Muhammad Rehman Sheikh Company Secretary Mr. Muhammad Asadullah Khan Legal Advisor Imtiaz Siddiqui & Associates Auditors KPMG Taseer Hadi & Co. Chartered Accountants Chairman Head Office 37-P, Gulberg-II, Lahore. Tel: Fax: mis@kohatcement.com Bankers of the Company Standard Chartered Bank (Pak) Ltd Askari Bank Limited The Bank of Punjab The Bank of Khyber Soneri Bank Limited Allied Bank Limited United Bank Limited MCB Bank Limited National Bank of Pakistan Habib Bank Limited Bank Alfalah Limited

4 Directors Review 03 Dear Shareholders, Your Directors present to you the unaudited Interim results for the 3rd Quarter and nine months of financial year Production and Sales Volumes Summary of production and sales is as under: Financial Performance (Jan-March) Financial Performance of your Company for the period under review is summarized below: 3rd Quarter (Jan-Mar) M Tons (July-March) Clinker Production 460, ,482 1,527,810 1,438,081 Cement Production 618, ,280 1,721,626 1,603,910 Local Sales 608, ,550 1,664,021 1,502,709 Export Sales 20,731 22,036 79, ,307 Total Sales 628, ,586 1,743,456 1,606,016 (Rupees) Nine months (July-Mar) Net Sales Revenue 3,517,027,189 3,493,497,757 10,384,648,773 10,657,622,935 Gross profit 986,294,738 1,451,580,845 3,514,815,155 4,815,699,669 Admin and selling expenses (75,979,671) (68,844,467) (245,445,611) (223,256,890) Other expenses (73,800,223) (106,098,408) (254,682,597) (336,987,002) Other income 91,645, ,007, ,410, ,555,133 Finance costs (12,728,167) (20,313,189) (49,928,083) (66,910,270) Taxation (263,601,170) (425,062,232) (936,152,108) (1,369,753,847) Profit after taxation 651,831, ,269,788 2,296,017,275 3,121,346,793 Earnings per share (Rs.) Global coal prices have been on a steady rise in the period under reference, which coupled with declining Pak Rupee Value, has increased cost of cement production. Although the cement prices showed upward trend during March 2018; however, these have been continuously decreasing during earlier months for the nine-month period under review. All these factors together culminated into profit reduction of the Company. The Company is current on its all debt obligations. On Going Projects Cement Mill of grinding capacity of 105 tph shall commence its commercial operations during April Brownfield Expansion of 7800 tpd at the existing Plant site is being carried out as per schedule. Future outlook We are expecting growth in overall consumption across several sectors including Private sector housing projects and provincial infrastructure projects associated with China Pak Economic Corridor (CPEC) and PSDP. These projects shall have vital role to boost the overall investment climate resultantly shall have robust increase in the profits of the Company. Acknowledgments We would like to express our sincere appreciation and gratitude to all the stakeholders and employees for their co-operation, trust and support. For and on behalf of the Board Lahore: April 21, 2018 Aizaz Mansoor Sheikh Chief Executive Nadeem Atta Sheikh Director

5 04 3rd Quarter Report - March 31, ,438,081 1,527, , ,919 1,603,910 1,721, , ,202 1,502,709 1,664, , , ,307 79,435 22,036 20,731 1,606,016 1,743, , ,773 10,657,622,935 10,384,648,773 3,493,497,757 3,517,027,189 4,815,699,669 3,514,815,155 1,451,580, ,294,738 (223,256,890) (245,445,611) (68,844,467) (75,979,671) (336,987,002) (254,682,597) (106,098,408) (73,800,223) 302,555, ,410, ,007,239 91,645,676 (66,910,270) (49,928,083) (20,313,189) (12,728,167) (1,369,753,847) (936,152,108) (425,062,232) (263,601,170) 3,121,346,793 2,296,017, ,269, ,831,

6 05 Condensed Interim Balance Sheet (Un-audited) As at 31 March 2018 EQUITY AND LIABILITIES Share capital and reserves (Un-Audited) (Audited) March 31, 2018 June 30, 2017 Note Rupees Rupees Authorized share capital 3,000,000,000 3,000,000,000 Issued, subscribed and paid-up capital 1,545,086,900 1,545,086,900 Reserves 120,142, ,531,465 Accumulated profit 15,627,639,141 13,640,639,246 17,292,868,506 15,306,257,611 Non-current liabilities Long term finances - secured 5 213,157, ,315,784 Long term security deposits 2,036,100 2,036,100 Deferred liabilities - deferred taxation 1,603,720,842 1,660,261,314 - compensated absences 12,873,964 13,616,897 1,831,788,794 2,102,230,095 Current liabilities Current maturity of long term finances 5 284,210, ,210,528 Trade and other payables 6 2,960,786,671 2,177,574,482 Short term borrowings - secured - 200,000,000 Provision for taxation - net - 78,470,775 Unpaid dividend 29,603,848 29,082,559 Unclaimed dividend 9,919,087 8,027,340 Interest / mark-up accrued on borrowings 3,968,401 6,337,389 Contingencies and commitments 7 ASSETS The annexed notes from 1 to 21 form an integral part of these condensed interim financial statements. 3,288,488,535 2,783,703,073 22,413,145,835 20,192,190,779 Non-current assets Property, plant and equipment 8 8,272,186,819 8,060,484,714 Investment property 9 3,588,639,222 3,062,824,000 Intangible assets 15,901,917 14,741,587 Long term loans and advances 4,201 39,827 Long term deposits 125,326, ,326,640 12,002,058,799 11,263,416,768 Current assets Stores, spares and loose tools 1,741,210,004 1,333,176,562 Stock-in-trade 841,871, ,142,281 Trade debts - unsecured, considered good ,212, ,775,970 Short term investments 11 6,018,322,456 5,219,113,317 Advances, deposits, prepayments and other receivables 591,324, ,907,314 Advance income tax - net 134,688,509 - Cash and bank balances ,457, ,658,567 10,411,087,036 8,928,774,011 22,413,145,835 20,192,190,779 Chief Executive Chief Financial Officer Director

7 06 3rd Quarter Report - March 31, 2018 Condensed Interim Profit and Loss Account (Un-audited) For the quarter and nine months period ended 31 March 2018 Note July to 01 July to 01 January to 01 January to 31 March 31 March 31 March 31 March Rupees Sales - net 13 10,384,648,773 10,657,622,935 3,517,027,189 3,493,497,757 Cost of goods sold 14 (6,869,833,618) (5,841,923,266) (2,530,732,451) (2,041,916,912) Gross profit 3,514,815,155 4,815,699, ,294,738 1,451,580,845 Selling and distribution expenses (94,699,052) (102,416,793) (26,696,190) (30,938,474) Administrative and general expenses (150,746,559) (120,840,097) (49,283,481) (37,905,993) Other operating income ,410, ,555,133 91,645, ,007,239 Other operating charges 16 (254,682,597) (336,987,002) (73,800,223) (106,098,408) (232,717,689) (257,688,759) (58,134,218) (74,935,636) Operating profit 3,282,097,466 4,558,010, ,160,520 1,376,645,209 Finance cost (49,928,083) (66,910,270) (12,728,167) (20,313,189) Profit before taxation 3,232,169,383 4,491,100, ,432,353 1,356,332,020 Taxation 17 (936,152,108) (1,369,753,847) (263,601,170) (425,062,232) Profit after taxation 2,296,017,275 3,121,346, ,831, ,269,788 Earning per share (basic and diluted) The annexed notes from 1 to 21 form an integral part of these condensed interim financial statements. Chief Executive Chief Financial Officer Director

8 07 Condensed Interim Statement of Comprehensive Income (Un-audited) For the quarter and nine months period ended 31 March 2018 Profit after taxation 2,296,017,275 3,121,346, ,831, ,269,788 Other comprehensive income for the period Items that are or may be reclassified to profit and loss account: Available-for-sale financial assets July to 01 July to 01 January to 01 January to 31 March 31 March 31 March 31 March Rupees - net changes in fair value (389,000) 260,199 44, ,999 Total comprehensive income for the period 2,295,628,275 3,121,606, ,875, ,480,787 The annexed notes from 1 to 21 form an integral part of these condensed interim financial statements. Chief Executive Chief Financial Officer Director

9 08 3rd Quarter Report - March 31, 2018 Condensed Interim Cash Flow Statement (Un-audited) For the nine months ended 31 March 2018 Cash flow from operating activities (Un-audited) (Un-audited) July 1 - March 31 July 1 - March Note Rupees Rupees Profit before taxation 3,232,169,383 4,491,100,640 Adjustments for: Depreciation on property, plant and equipment ,230, ,785,901 Amortization on intangible assets 2,763, ,907 Gain on disposal of property, plant and equipment (11,860) (2,977,326) Interest on bank deposits and investments (110,264,348) (253,140,017) Realized gain on held for trading investments (112,361,398) (14,107,185) Unrealized gain on held for trading investments (37,150,092) (31,428,567) Provision for compensated absences 901,740 1,560,852 Provision for Workers Welfare Fund 16 65,375,788 87,777,620 Provision for Workers Profit Participation Fund ,555, ,404,382 Finance cost 49,928,083 66,910, ,967, ,014,837 Cash generated from operations before working capital changes 3,658,136,696 4,951,115,477 (Increase) / decrease in current assets: Stores, spares and loose tools (408,033,442) (149,999,847) Stock-in-trade 107,270,494 3,950,828 Trade debts (172,436,258) (134,067,236) Advances, deposits, prepayments and other receivables 14,179, ,095,266 Increase / (decrease) in current liabilities: Trade and other payables 650,885,189 (167,709,294) 191,865,160 (280,730,283) Cash generated from operations 3,850,001,856 4,670,385,194 Compensated absences paid (1,644,673) (1,900,824) Finance cost paid (52,297,071) (74,893,885) Payment made to Workers Welfare Fund (106,603,797) (86,003,351) Long term deposits made - (27,030,000) Income tax paid (1,205,851,864) (1,239,151,764) Net cash generated from operating activities 2,483,604,451 3,241,405,370 Cash flow from investing activities Acquisition of property, plant and equipment (621,036,981) (538,423,291) Proceeds from disposal of property, plant and equipment 16,115,761 8,060,000 Acquisition of intangible assets (3,923,746) (9,254,980) Acquisition of investment property (525,815,222) (908,645,072) Investment in mutual funds - net (1,926,052,471) (825,000,000) Long term loans and advances - net 35,626 80,519 Gain on other short term investments - net 110,452, ,578,987 Interest on bank deposits 92,668,143 86,192,271 Net cash used in investing activities (2,857,556,065) (1,990,411,566) Cash flow from financing activities Repayment of long term finances - secured (213,157,896) (213,157,896) Repayment of short term borrowings (200,000,000) (398,000,000) Dividend paid (306,604,344) (770,043,530) Net cash used in financing activities (719,762,240) (1,381,201,426) Net decrease in cash and cash equivalents (1,093,713,854) (130,207,622) Cash and cash equivalents at beginning of the period 5,611,171,564 6,036,461,321 Cash and cash equivalents at end of the period 18 4,517,457,710 5,906,253,699 The annexed notes from 1 to 21 form an integral part of these condensed interim financial statements. Chief Executive Chief Financial Officer Director

10 09 Condensed Interim Statement of Changes in Equity (Un-audited) For the nine months ended 31 March 2018 Balance as at 30 June audited 1,545,086,900 49,704, ,714 70,000,000 12,104,437,366 12,225,003,031 13,770,089,931 Total comprehensive income Profit for the nine months ended 31 March ,121,346,793 3,121,346,793 3,121,346,793 Other comprehensive income for the nine months ended 31 March , , ,199 Transactions with owners of the Company ,199-3,121,346,793 3,121,606,992 3,121,606,992 Final cash dividend at Re. 1.0 per share for the year ended 30 June (154,508,690) (154,508,690) (154,508,690) First interim cash dividend at Rs. 4.0 per share for the year ended 30 June (618,034,760) (618,034,760) (618,034,760) Second interim cash dividend at Rs. 8.0 per share for the year ended 30 June (1,236,069,520) (1,236,069,520) (1,236,069,520) (2,008,612,970) (2,008,612,970) (2,008,612,970) Balance as at 31 March unaudited 1,545,086,900 49,704,951 1,120,913 70,000,000 13,217,171,189 13,337,997,053 14,883,083,953 Balance as at 30 June audited 1,545,086,900 49,704, ,514 70,000,000 13,640,639,246 13,761,170,711 15,306,257,611 Total comprehensive income Profit for the nine months ended 31 March ,296,017,275 2,296,017,275 2,296,017,275 Other comprehensive income for the nine months ended 31 March (389,000) - - (389,000) (389,000) Transactions with owners of the Company Capital reserves Revenue reserves Share Share Fair value General Accumulated Total Total capital permium reserve reserve profit reserves Rupees - - (389,000) - 2,296,017,275 2,295,628,275 2,295,628,275 Final cash dividend at Rs. 2.0 per share for the year ended 30 June (309,017,380) (309,017,380) (309,017,380) Balance as at 31 March unaudited 1,545,086,900 49,704, ,514 70,000,000 15,627,639,141 15,747,781,606 17,292,868,506 The annexed notes from 1 to 21 form an integral part of these condensed interim financial statements. Chief Executive Chief Financial Officer Director

11 10 3rd Quarter Report - March 31, 2018 Notes to the Condensed Interim Financial Statements (Un-audited) For the nine months ended 31 March Reporting entity 1.1 Kohat Cement Company Limited ("the Company") is a public limited company incorporated in Pakistan under the Companies Act, 1913 (now the Companies Act, 2017) and is listed on Pakistan Stock Exchange. The Company is engaged in the production and sale of cement. The registered office of the Company is situated at Rawalpindi Road, Kohat, Pakistan. Pursuant to the approval of the Board of Directors, the management intends to set up a new cement production line at the Company's existing factory site. 1.2 ANS Capital (Private) Limited is the holding company of the Company and holds 84,986,400 ordinary shares of the Company comprising 55% of its total paid up share capital. 2. Basis of preparation 2.1 These condensed interim financial statements comprise of the condensed interim balance sheet of the Company, as at 31 March 2018 and the related condensed profit and loss account, condensed interim statement of comprehensive income, condensed interim cash flow statement and condensed interim statement of changes in equity together with the notes forming part thereof. 2.2 These condensed interim financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting. the accounting and reporting standards as applicable in Pakistan for interim financial reporting comprise of: - International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, 2017: and - Provisions of and directives issued under the Companies Act, Where the provisions of and directives issued under Companies Act, 2017 differ with the requirements of IAS 34, the provisions of and directives issued under Companies Act, 2017 have been followed. 2.3 These condensed interim financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the annual audited financial statements for the year ended 30 June Comparative balance sheet numbers are extracted from the annual audited financial statements of the Company for the year ended 30 June 2017, whereas comparatives of condensed interim profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity are stated from unaudited condensed interim financial statements of the Company for the nine months period ended 31 March These condensed interim financial statements are unaudited and being submitted to the shareholders as required under Section 237 of the Companies Act, Judgements and estimates The preparation of the condensed interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. The significant judgments made by the management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those applied to the financial statements for the year ended 30 June Statement of consistency in accounting policies 4.1 The accounting policies and the methods of computation adopted in the preparation of these condensed interim financial statements are same as those applied in the preparation of the financial statements for the year ended 30 June 2017 except that pursuant to the requirements of IAS 7 "Statement of cash flows" a disclosure of reconciliation of movements of liabilities to cash flows arising from financing activities has been given in note 19 to these condensed interim financial statements. This change does not have any impact on the figures reported in the financial statements There were certain new standards and amendments to the approved accounting standards which became effective during the period but are considered not to be relevant or have any significant effect on the Company's operations and are, therefore, not disclosed.

12 11 Notes to the Condensed Interim Financial Statements (Un-audited) For the nine months ended 31 March The following amendments and interpretations of approved accounting standards will be effective for accounting periods as detailed below : Standard 5 Long term finances - secured Effective date (accounting periods beginning on or after) FRIC 23 - Uncertainty over Income Tax Treatments 01 January 2019 IFRS 15 - Revenue from Contract with customer 01 July 2018 IFRS 9 - Financial Instruments 01 July 2018 IAS 28 - Investments in Associates and Joint Ventures 01 January 2019 IFRS 3 - Business Combinations 01 January 2019 IFRS 11 - Joint ventures 01 January 2019 IAS - 12 Income Taxes 01 January 2019 IAS - 23 Borrowing cost 01 January 2019 IFRS 16 - Leases 01 January 2019 (Un-Audited) (Audited) March 31, 2018 June 30, 2017 Note Rupees Rupees Syndicated term finance - WHR ,368, ,526,312 Less: Current maturity presented under current liabilities (284,210,528) (284,210,528) 213,157, ,315, During the period / year, the Company has made repayments amounting to Rs. 213,157,896 (30 June 2017 : Rs. 284,210,528). (Un-Audited) (Audited) March 31, 2018 June 30, 2017 Note Rupees Rupees 6 Trade and other payables Trade creditors ,143, ,656,825 Contractors bills payable 25,857,416 12,006,222 Accrued liabilities 279,509, ,009,609 Advances from customers 67,101,087 82,688,697 Payable to Workers Welfare Fund 66,341, ,569,463 Payable to Workers Profit Participation Fund 1,282,494,908 1,107,484,399 Payable to Provident Fund Trust 2,402,811 1,857,673 Payable to Government on account of: 2,438,850,196 1,685,272,888 Income tax deducted at source 9,807, Federal excise duty 51,987,312 79,815,400 Sales Tax 11,638,386 - Royalty and excise duty 71,458,585 57,851, ,892, ,667,640 Securities and retention money payable 195,482, ,723,893 Other payables 181,562, ,910, ,044, ,633,954 2,960,786,671 2,177,574, This includes unsecured balance of Rs. 6,757 (30 June 2017: Rs. 15,347) and Rs. 31,898,434 (30 June 2017: 5,978,701) payable to Palace Enterprises (Private) Limited and Ultra Pack (Private) Limited respectively, related parties of the Company.

13 12 3rd Quarter Report - March 31, 2018 Notes to the Condensed Interim Financial Statements (Un-audited) For the nine months ended 31 March Contingencies and commitments 7.1 Contingencies The Competition Commission of Pakistan ("CCP") took suo moto action under Competition Ordinance, 2007, (subsequently enacted as Competition Act, the "Law") and issued show cause notice on 28 October 2008 inquiring for increase in cement prices across the country. Similar notices were also issued to All Pakistan Cement Manufacturer Association ("APCMA") and its member cement manufacturers. The Company filed writ petition in Honorable Lahore High Court ("LHC") challenging the vires of the law along with filing of appeal before the honourable Supreme Court of Pakistan ("SCP") because at that time, no appeallate forum except Supreme Court was available to the Company. The LHC, vide its order dated 24 August 2009, allowed CCP to issue its final order. Consequently, CCP passed an order dated 28 August 2009 imposing a penalty of Rs million on the Company. The said levy of penalty has also been agitated by the Company before the LHC, and the LHC vide its order dated 31 August 2009 restrained CCP from enforcing its order against the Company for the time being. Meanwhile the CCP Tribunal was constituted under the law to hear appeals against levy of penalty by CCP and the SCP set aside all the appeals to the Tribunal for its adjudication. However, the constitution of Tribunal has also been challenged by the Company along with other stakeholders before the Honorable Sindh High Court ("SHC") on various legal grounds, which very kindly has granted a stay order in favour of the Company against constitution of the CCP Tribunal The Tax Department, after conducting Sales Tax and Federal Excise Duty audit of the Company for Tax Year 2009 passed an order dated 23 May 2012 disallowing zero rating on exports and input tax claims, levying additional tax and penalty amounting to Rs million and Rs million under provisions of Sales Tax and Federal Excise Laws respectively. The Company filed appeal before CIR(A) along with a writ petition before the honourable Lahore High Court (LHC) against the above mentioned order. Both litigations have been decided in favour of the Company. However, both these appellate decisions have been assailed by the tax department at respective forums i.e. through filing of appeal before the ATIR and through filing of an Intra Court Appeal (ICA) before the the honourable LHC. Before the decision of matter, an amount of Rs million was deposited by the Company under Amnesty Scheme announced vide SRO 548(I)/2012 dated 22 May 2012 which became refundable to the Company in consequence of favorable appellate order The Deputy Commissioner Inland Revenue (DCIR), disallowed Rs million being reversal of excess output tax paid by the Company on advances recevied from its dealers and imposed a penalty of Rs million, pertaining to Tax Periods August 2013, October 2013, December 2013, January 2014 and March 2014 without apprehending the facts and legal provisions which donot empower the DCIR to disallow the aforesaid amount. The Company filed an appeal before the Commissioner Inland Revenue (Appeals) [CIR(A)], challenging the aforesaid disallowance and in the meanwhile, the principal demand of Rs Million was also paid to the State kitty. The CIR(A), heard the case of the Company for the aforesiad months and remanded the case back to the DCIR to consider the contention of the Company to delete the disallowance. The DCIR, after thorough examination of taxpayer's record accepted its contention and deleted the entire demand of Rs million; however, the levy of penalty was maintained by him, which has been challenged by the Company through filing of appeal before (CIR(A) Income tax affairs of the Company for Tax Year 2015 were selected for audit by the Commissioner Inland Revenue (CIR) under the provisions of Section 177 of the Income Tax Ordinance, 2001 (ITO, 2001). The audit proceedings were finalized by Deputy Commissioner Inland Revenue (DCIR) resulting in change in allocation of expenses between local and export income of the Company and disallowance of certain expenses and allowance culminating into a further tax liability of Rs. 145 million. The aforesaid treatment meted out by the DCIR has been agitated by the Company before Commissioner Inland Revenue (Appeals) through filing of appeal The Additional Commissioner Inland Revenue (Addl. CIR) amended the assessment of the Company twice for the Tax Year 2016 under the provisions of Section 122(5A) of the Income Tax Ordinance, 2001 (ITO, 2001). The amendments of assessment resulted in change in allocation of expenses between local and export income of the Company and disallowance of certain expense, allowances and tax credit. Super Tax U/S 4B of the ITO, 2001 was enhanced by Rs million and tax credit U/S 65B of the ITO, 2001 was disallowed to the tune of Rs. 28 million whereas aforesaid disallowance created a further tax liability of Rs million.the aforesaid treatment meted out by the Addl. CIR has been agitated by the Company before the Commissioner Inland Revenue (Appeals) through filing of appeal. Management is confident of favourable outcome in aforementioned matters, hence no provision is being recognized in this respect in the financial statements. Other than the above mentioned matters, there has been no material change in contingencies as disclosed preceding annual published financial statements of the Company for the year ended 30 June 2017.

14 13 Notes to the Condensed Interim Financial Statements (Un-audited) For the nine months ended 31 March Commitments In respect of letters of credit for: - capital expenditure 6,542,681,765 70,344,785 - stores and spares 102,950, ,021,201 6,645,632, ,365, Property, plant and equipment Operating fixed assets 8.1 7,064,291,550 7,378,863,363 Capital work in progress 8.2 1,207,895, ,621, Operating fixed assets 8,272,186,819 8,060,484,714 Opening written down value 7,378,863,363 7,698,456,586 Add: Additions during the period / year (cost) Factory buildings and plant civil structure 39,202,304 - Plant, machinery and equipment 9,469,971 43,835,811 Power installations - 35,023,268 Furniture, fixtures and office equipment 3,332,329 4,717,593 Computers and printers 2,310,615 3,469,337 Light vehicles 35,730,677 95,172,996 Heavy vehicles 1,509,200 - Laboratory equipment 3,207, ,882 94,763, ,523,887 Less: Disposals during the period / year (written down value) Factory buildings and plant civil structure - (4,500,000) Plant, machinery and equipment (9,481,316) (338,275) Furniture, fixtures and office equipment - (158,738) Light vehicles (6,622,585) (132,766) Heavy vehicles - (111,633) (16,103,901) (5,241,412) Less: Depreciation charge for the period / year (393,230,975) (496,875,698) Closing written down value 7,064,291,550 7,378,863, Capital work in progress (Un-Audited) (Audited) March 31, 2018 June 30, 2017 Note Rupees Rupees Balance at beginning of the period / year 681,621, ,299,377 Add: Additions during the period / year 574,696, ,463,141 Less: Transfers to fixed assets during the period / year (48,422,276) (18,141,167) 9. Invesment Property 1,207,895, ,621,351 Opening Balance 3,062,824,000 2,156,011,898 Addition during the period / year 525,815, ,812, ,588,639,222 3,062,824, The latest valuation of investment property was carried out as at 30 June 2017, and according to that the market value of investment property, excluding additions during the period of Rs million, was Rs. 3, million. During the current nine months period, the Company has purchased land measuring 309 kanals and 8 marlas in Lahore. The fair value measurement for the investment property has been categorized as a level 3 fair value based on the inputs to the valuation techniques used. 10. This includes unsecured balance of Rs. 3,915 (30 June 2017: Rs. 3,915) receivable from Ultra Pack (Private) Limited, a related party of the Company.

15 14 3rd Quarter Report - March 31, 2018 Notes to the Condensed Interim Financial Statements (Un-audited) For the nine months ended 31 March Short term investments Available-for-sale (Un-Audited) (Audited) March 31, 2018 June 30, 2017 Note Rupees Rupees Equity securities of listed company 526, ,800 Held for trading Investment in mutual funds ,067,795, ,684,520 Investment in Market Treasury Bills - 5,115,512,997 Loans and receivables Investment in term deposit receipts ,950,000,000-6,018,322,456 5,219,113, These represent deposits made and securities placed under Shariah permissible arrangement. 12. Cash and Bank Balance These include Rs million (June 30, 2017: Rs million) placed under Shariah permissible arrangement. Remaining deposits are placed with conventional financial institutions. (Un-Audited) (Un-Audited) July 1 - Mar. 31 July 1 - Mar Rupees Rupees 13 Sales - net Local sales - gross 14,640,586,884 13,987,093,810 Less: Sales tax 2,487,818,589 2,302,284,796 Federal Excise Duty 2,080,026,376 1,502,708,700 4,567,844,965 3,804,993,496 10,072,741,919 10,182,100,314 Export sales 403,446, ,525,513 10,476,188,829 10,749,625,827 Less: Commission on cement sales 91,540,056 92,002, Cost of goods sold 10,384,648,773 10,657,622,935 Raw materials consumed 499,554, ,103,027 Packing materials consumed 575,311, ,767,070 Fuel and power 1,293,182,520 1,225,441,918 Coal and gas 3,126,775,285 2,482,138,478 Stores, spares and loose tools consumed 302,162, ,185,095 Salaries, wages and other benefits 254,298, ,578,228 Royalty and excise duty 153,547, ,472,855 Rent, rates and taxes 24,912,763 18,060,013 Repairs and maintenance 78,401,822 62,045,166 Insurance 30,779,345 22,155,669 Depreciation 389,070, ,450,596 Other expenses 72,233,830 52,653,211 Work-in-process 6,800,231,121 5,869,051,326 At beginning of the period 703,875, ,860,370 At end of the period (694,853,590) (434,382,623) Cost of goods manufactured 6,809,253,122 5,840,529,073

16 15 Notes to the Condensed Interim Financial Statements (Un-audited) For the nine months ended 31 March 2018 (Un-Audited) (Un-Audited) July 1 - Mar. 31 July 1 - Mar Rupees Rupees Finished goods: At beginning of the period 167,423, ,546,558 At end of the period (93,485,733) (115,570,062) 6,883,190,710 5,849,505,569 Less: Cost attributable to own cement consumption (13,357,092) (7,582,303) 6,869,833,618 5,841,923, Other operating income Income from financial assets - Shariah non-compliant: Interest on bank deposits and investments 34,563, ,786,359 Profit from SNGPL loan - 52,733 Unrealized gain on held for trading investments - 31,428,567 Realized gain on held for trading investments 112,214,152 14,107,185 Interest on Employees loans 6,125 18,751 Income from financial assets - Shariah compliant: Profit on bank deposits 75,700, ,925 Realized gain on held for trading investments 147,246 - Unrealized gain on held for trading investments 37,150,092 - Bonus units received from investment in mutual funds 682,626 - Dividend received from investment in mutual funds 30,000 - Income from non-financial assets: Income from sale of scrap 6,615, ,763 Profit on sale of assets 11,860 2,977,326 Miscellaneous 288, , ,410, ,555, Other operating charges Donations 15,751,800 7,805,000 Workers Profit Participation Fund 173,555, ,404,382 Workers Welfare Fund 65,375,788 87,777, ,682, ,987, Taxation Current ,692,580 1,352,093,929 Deferred (56,540,472) 17,659, ,152,108 1,369,753, The Finance Act, 2017 amended Section 5A of the Income Tax Ordinance, 2001 under which every public company other than a scheduled bank or modaraba, that derives profits for a tax year and does not distribute at least 40 percent if its after tax profits within six months of the end of said tax year through cash or bonus shares shall be liable to pay tax at the rate of seven and a half percent of its accounting profit before tax. The Board of Directors of the Company intends to distribute sufficient cash dividend for the year ending 30 June 2018 to comply with the above stated requirements. Accordingly, no provision for tax on undistributed reserves has been recognized in these condensed interim financial statements for the period ended 31 March Cash and cash equivalents (Un-Audited) (Un-Audited) March 31, 2018 March 31, 2017 Rupees Rupees Cash and bank balances 567,457,710 1,227,221,444 Term deposit receipts 3,950,000, ,000,000 Market Treasury Bills - 4,526,0320,255 4,517,457,710 5,906,253,699

17 16 3rd Quarter Report - March 31, 2018 Notes to the Condensed Interim Financial Statements (Un-audited) For the nine months ended 31 March Reconciliation of movements of liabilities to cash flows arisig from financing activities. Balance as at 30 June 2017 (Audited) 710,526, ,000,000 37,109, ,636,211 Changes from financing activities Repayment of long term finances - secured (213,157,896) - - (213,157,896) Repayment of short term borrowings - (200,000,000) - (200,000,000) Dividend paid - - (306,604,344) (306,604,344) Total changes from financing cash flows (213,157,896) (200,000,000) (306,604,344) (719,762,240) Other changes 2018 Liabilities Long Term Short Term Dividend Finances borrowings Payable Total Rupees Dividend declared ,017, ,017,380 Total liability related other changes ,017, ,017,380 Closing as at 31 March 2018 (Un-audited) 497,368,416-39,522, ,891, Transactions and balances with related parties The related parties comprise of the Holding Company, associated companies, key management personnel including directors of the Company and staff retirement funds. Significant transactions and balances with related parties, other than those disclosed elsewhere in this condensed interim financial information are as follows: (Un-Audited) (Un-Audited) July 1 - Mar. 31 July 1 - Mar Parties Nature of transactions Note Rupees Rupees Transaction with holding company ANS Capital (Private) Limited Dividend paid 169,972, ,932,000 Dividend payable - 679,891,200 Transactions with associated undertakings / companies due to common directorship Ultra Pack (Private) Limited Sale of Cement - 3,302,348 Ultra Pack (Private) Limited Purchase of packing material 427,538, ,432,250 Ultra Pack (Private) Limited Purchase of light vehicle 2,061,966 - Palace Enterprises (Private) Limited Accommodation services 390, ,907 Art Vision (Private) Limited Sale of light vehicle 1,957,000 - Employee Fund Provident Fund Trust Contribution 9,871,193 7,821,120 Others Key management personnel (Chief Executive) Remuneration and other benefits 32,905,625 28,032,082 Dividend paid 113, ,030 Dividend payable - 452,848 Key management personnel Remuneration and other benefits 32,905,625 27,360,800 (Executive Director) Dividend paid 1,958 4,895 Dividend payable - 7,832 Key management personnel Remuneration and other benefits ,403,968 40,019,518 (Other Executives of the Company) Dividend paid - 148,885 Dividend payable - 126,216 Non-Executive Directors Dividend paid 653,774 1,714,435 Dividend payable - 2,615,096 Kohat Cement Educational Trust Dividend paid 233, ,780 Dividend payable - 935,664 Contribution 1,016, , This amount includes Rs million (2017: 16.9 million) paid to certain relatives of directors. 21. Date of authorization for issue These condensed interim financial statements have been approved by the Board of Directors of the Company and authorized for issue on April 21, Chief Executive Chief Financial Officer Director

18 Head Office: 37-P, Gulberg II, Lahore - Pakistan. Tel. : KCCL (5225) Fax : ,