Financial Statements of Chenab Limited. For the 3rd Quarter Ended March 31, 2012

Transcription

1 Financial Statements of Chenab Limited For the 3rd Quarter Ended March 31, 2012 L I M I T E D

2 Contents Company Information 02 Directors Report to the Members 03 Balance Sheet 04 Profit & Loss Account 05 Statement of Comprehansive Incom 05 Cash Flow Statement 06 Statement of Changes in Equity 07 Notes to the Financial Statement 08 01

3 Company Information Chief Executive Officer Directors Bankers/Financial Institutions (In Alphabetic Order) Mian Muhammad Javaid Iqbal Mr. Muhammad Naeem Mr. Muhammad Faisal Latif Mr. Muhammad Farhan Latif Mr. Muhammad Zeeshan Latif Mst. Shahnaz Latif Allied Bank Limited. Askari Bank Limited. AlBaraka Bank (Pakistan) Limited. (ABBL) Bank Alfalah Limited. Citibank, N.A. Faysal Bank Limited. First Credit & Investment Bank Limited First Punjab Modaraba. Habib Bank Limited. Habib Metropolitan Bank Limited. KASB Bank Limited. National Bank of Pakistan. NIB Bank Limited Orix Leasing (Pakistan) Limited. Pak Oman Investment Company Ltd. Pak Kuwait Investment Company (Pvt.) Ltd. Pak Libya Holding Company (Pvt.) Ltd. Saudi Pak Industrial & Agricultural Investment Company (Pvt.) Ltd. SILK Bank Limited. Standard Chartered Bank (Pakistan) Limited Summit Bank Limited. The Bank of Punjab United Bank Limited. Company Secretary/ Chief Financial Officer Mr. Muhammad Arshad Audit Committee Mr. Muhammad Farhan Latif - Chairman Mr. Muhammad Zeeshan Latif - Member Mst. Shahnaz Latif - Member Auditors Legal Advisor Registered Office Address Website Address Works Avais Hyder Liaquat Nauman Chartered Accountants Ch. Shahid Mehmood (Advocate) Nishatabad, Faisalabad. Tel: Fax: , chenab@chenabgroup.com - Spinning Unit - Toba Tek Singh. - Weaving Unit - Kharianwala, Distt., Sheikhupura. - Weaving Unit - Shahkot, Distt., Nankana Sahib. - Processing & Stitching Units - Nishatabad, Faisalabad. 02

4 DIRECTORS REPORT TO THE SHAREHOLDERS The directors place before you the un-audited financial statements of the company together with its notes for nine months period ended on March 31, SALES AND SERVICES REVENUE Sales revenue of Rs.1, million and revenue from services of Rs million aggregating to Rs.1, million was earned during the period under report as compared with the sales and services revenue of Rs. 3, million achieved during the same period of the preceding year. FINANCIAL RESULTS AND REASONS FOR LOSS The company has suffered a financial loss of Rs million during the period under report for the circumstances being beyond control and for non availability of electric/sui gas on account of load management by the authorities concerned, thereby causing adverse effect on production and quality of the products. There had been acute paucity of funds due to successive financial losses and the banks of the company did not extend their cooperation in providing any financial assistance to the company for its smooth running. FUTURE PROSPECTS The company can come out of the current financial crisis if interruption free gas is supplied to it by remaining within the parameters of gas load management by the authority concerned apart from providing additional working capital on economical rate of mark up and granting rescheduling of existing financial facilities on soft terms by its banks/financial institutions. ACKNOWLEDGEMENT The directors are thankful to the shareholders, financial institutions and customers of the company who have extended their support in one way or the other to the cause of the company. The directors also place on record their appreciation for dedicated services rendered by the employees of the company during this period. For and on behalf of Board of Directors Date: Place: Faisalabad (Chief Executive Officer) 03

5 CONDENSED INTERIM BALANCE SHEET As At March 31, 2012 (Un-audited) (Audited) March 31, June, 30 Notes SHARE CAPITAL AND RESERVES Authorised capital 120,000,000 ordinary shares of Rs.10/- each 1,200,000,000 1,200,000,000 80,000,000 cumulative preference shares of Rs.10/- each 800,000, ,000,000 Issued, subscribed and paid up capital 1,150,000,000 1,150,000,000 Cumulative preference shares 3 800,000, ,000,000 Capital reserves 526,409, ,409,752 Revenue reserves (5,665,349,842) (4,772,317,801) (3,188,940,090) (2,295,908,049) SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT 4 5,150,656,524 5,156,590,479 NON-CURRENT LIABILITIES Long term financing 5 3,271,313,049 1,866,733,990 Liabilities against assets subject to finance lease 27,017,001 33,546,581 Deferred liability 6 520,104, ,998,188 3,818,434,750 2,067,278,759 CURRENT LIABILITIES Trade and other payables 2,056,172,991 2,007,795,137 Interest / markup payable 1,343,876,356 1,583,696,780 Short term borrowings 5,569,654,125 7,266,477,945 Current portion of : Long term financing 1,525,957,415 1,265,396,400 Liabilities against assets subject to finance lease 126,299, ,250,292 Provision for taxation - income tax 12,327,936 29,515,650 10,634,288,682 12,276,132,204 CONTINGENCIES AND COMMITMENTS ,414,439,866 17,204,093,393 NON-CURRENT ASSETS Property, plant and equipment 8 11,518,224,823 11,659,236,722 8,851,468 8,851,468 11,527,076,291 11,668,088,190 CURRENT ASSETS Stores, spares and loose tools 863,917,353 1,108,469,107 Stock in trade 1,278,982,012 1,246,629,813 Trade debts 9 2,383,720,482 2,802,036,404 Loans and advances 105,438, ,027,030 Deposits and prepayments 37,136,805 25,931,317 Other receivables 94,789, ,310,668 Tax refunds due from Government 90,014, ,847,043 Cash and bank balances 33,364,655 19,753,821 4,887,363,575 5,536,005,203 The annexed notes form an integral part of this condensed interim financial report 16,414,439,866 17,204,093,393 Muhammad Naeem (Director) (Chief Executive Officer) 04

6 CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED) For The 3rd Quarter Ended March 31, 2012 Quarter Ended March 31, Nine Months Ended March 31, Note Sales 520,024,339 1,245,755,281 1,948,828,388 3,761,221,607 Cost of sales ,083,393 1,524,379,850 2,568,974,326 4,793,761,001 Gross (loss) (217,059,054 (278,624,569) (620,145,938) (1,032,539,394) Other operating income 933, ,440 2,707,160 3,582,343 (216,125,498) (277,643,129) (617,438,778) (1,028,957,051) Selling and distribution expenses 7,056,598 21,322,746 26,003, ,899,298 Administrative expenses 32,915,957 48,366, ,051, ,776,023 Other operating expenses Finance cost 11 36,297, ,242, ,472,888 1,026,879,067 76,269, ,931, ,527,427 1,322,554,388 (Loss) for the period before taxation (292,395,490) (693,574,379) (902,966,205) (2,351,511,439) Provision for taxation 882,188 8,688,227 13,648,138 38,694,274 (Loss) for the period after taxation (293,277,678) (702,262,606) (916,614,343) (2,390,205,713) Earnings per share - Basic 12 (2.55) (6.11) (7.97) (20.78) The annexed notes form an integral part of this condensed interim financial report Muhammad Naeem (Director) (Chief Executive Officer) CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED) For The 3rd Quarter Ended March 31, 2012 Quarter Ended March 31, Nine Months Ended March 31, (Loss) for the period (293,277,678) (702,262,606) (916,614,343) (2,390,205,713) Other comprehensive income for the Period incremental depreciation on revalued assets for the period 7,854,394 36,674,025 23,582,302 32,599,670 (293,277,678) (665,588,581) (893,032,041) (2,357,606,043) The annexed notes form an integral part of this condensed interim financial report Muhammad Naeem (Director) (Chief Executive Officer) 05

7 CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED) For The 3rd Quarter Ended March 31, 2012 March 31, March 31, a) CASH FLOWS FROM OPERATING ACTIVITIES (Loss) / profit before taxation (902,966,205) (2,351,511,439) Adjustments for: Depreciation / impairment loss on property, plant and equipment 139,606, ,161,632 Provision for staff retirement gratuity 31,442,771 35,534,272 Loss on disposal of property, plant and equipment 3,538,837 - Finance cost 145,472,888 1,026,879,067 Operating cash flows before working capital changes (582,905,508) (1,121,936,468) Changes in working capital (Increase) / decrease in current assets Stores, spares and loose tools 244,551,754 72,221,880 Stock in trade (32,352,199) 1,117,886,336 Trade debts 418,315, ,906,198 Loans and advances (2,411,163) (36,947,286) Deposits and prepayments (11,205,488) (2,129,934) Other receivables (13,900,513) (18,700,842) Tax refunds due from Government 47,310,920 22,420, ,309,233 1,630,656,392 Increase/ (Decrease) in current liabilities Trade and other payables 51,888,808 80,377, ,198,041 1,711,033,907 Cash generated from operating activities 119,292, ,097,439 Income tax paid (18,892,623) (26,465,126) Finance cost paid (19,568,138) (341,302,160) Staff retirement gratuity paid (13,807,689) (7,293,525) Net cash generated from operating activities 67,024, ,036,628 b) CASH FLOWS FROM INVESTING ACTIVITIES Additions in property, plant and equipment (1,189,883) (47,817,962) Proceeds from disposal of property, plant and equipment 2,867,222 10,429,607 Net cash genrated / (used) in investing activities 1,677,339 (37,008,302) c) CASH FLOWS FROM FINANCING ACTIVITIES Long term financing obtained - 99,443,670 Repayment of: Long term financing (30,858,973) (84,586,322) Liabilities against assets subject to finance lease (6,990,967) (1,168,818) Increase in short term bank borrowings - net (14,907,199) (189,795,710) Net cash (used) from financing activities (52,757,139) (176,107,180) Net increase / (decrease) in cash and cash equivalents (a+b+c) 15,944, ,146 Cash and cash equivalents at the beginning of the period 17,420,372 17,420,372 Cash and cash equivalents at the end of the period 33,364,655 18,341,518 The annexed notes form an integral part of this condensed interim financial report Muhammad Naeem (Director) (Chief Executive Officer) 06

8 CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED) For The 3rd Quarter Ended March 31, 2012 Issued, subscribed and paid up capital Share Capital Capital Reserves Revenue Reserves Cumulative preference shares Premium on issue of ordinary shares Book difference of capital under scheme of arrangement Preference shares redemption reserve General reserve Unappropriated profit Total Balance as at July 01, ,150,000, ,000, ,000,000 63,552, ,857,142 76,432,834 (1,995,964,954) 556,877,632 Total comprehensive (loss) for the period (Loss) for the period (2,364,263,927) (2,364,263,927) Incremental depreciation on revalued assets for the period ,883,571 51,883,571 (2,312,380,356) (2,312,380,356) Balance as at March 31, ,150,000, ,000, ,000,000 63,552, ,857,142 76,432,834 (4,308,345,310) (1,755,502,724) Total comprehensive (loss) for the period (Loss) for the period (523,487,230) (523,487,230) Surplus realised on disposal of asset during the period ,054,614 2,054,614 Incremental depreciation on revalued assets for the period (18,972,709) (18,972,709) (540,405,325) (540,405,325) Balance as at June 30, ,150,000, ,000, ,000,000 63,552, ,857,142 76,432,834 (4,848,750,635) (2,295,908,049) Total comprehensive (loss) for the period (Loss) for the period (916,614,343) (916,614,343) Incremental depreciation on revalued assets for the period ,582,302 23,582, (893,032,041) (893,032,041) Balance as at March 31, ,150,000, ,000, ,000,000 63,552, ,857,142 76,432,834 (5,741,782,676) (3,188,940,090) The annexed notes form an integral part of this condensed interim financial report Muhammad Naeem (Director) (Chief Executive Officer) 07

9 SELECTED EXPLANATORY NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For The 3rd Quarter Ended March 31, STATUS AND ACTIVITIES 1.1 Chenab Limited (the Company) is incorporated as a public limited company under the Companies Ordinance, 1984 (the Ordinance) and is listed on Karachi Stock Exchange. The registered office of the Company is situated at Nishatabad, Faisalabad. The principal business of the Company is export of all kinds of value added fabrics, textile made-ups, casual and fashion garments duly processed. The cloth processing unit is located at Nishatabad, District Faisalabad and stitching units are located at Nishatabad, District Faisalabad and Shorkot Road, District Toba Tek Singh. Weaving units are located at Sheikhupura Road, Khurrianwala, District Faisalabad, Jhumra Road, Gatti, District Faisalabad, Sheikhupura Road, Kharrianwala, District Sheikhupura and Shahkot, District Nankana Sahib. Spinning unit is located at Shorkot Road, District Toba Tek Singh, in the province of Punjab Pursuant to schemes of arrangement approved by the Honourable Lahore High Court, Lahore, assets, liabilities and reserves of Faisal Weaving (Private) Limited, Latif Weaving (Private) Limited and Chenab Finishing (Private) Limited were merged with the Company with effect from December 31, 1998 and assets, liabilities and reserves of Chenab Fibres Limited were merged with the Company with effect from April 01, The Company has incurred operating losses of Rs million during the period and the accumulated losses of the Company as at the balance sheet date are Rs. 5, million. The current liabilities exceed its current assets by Rs. 5, million. The Company has not redeemed preference shares on exercise of put options for two consecutive years by holders of preference shares due to tight cash flow situation. The Company has not been able to comply with terms of certain loan agreements. Certain banks and financial institutions have filed cases for recovery and winding up of the Company and / or served legal notices against the Company which the management is defending. A couple of bankers of the Company have restructured their long term and short term borrowings into long term loans (Refer Note 5). The Company has applied to its bankers and financial instituations for rescheduling of existing principal and mark up thereon to convert the entire outstanding liabilities into non serviceable loans to improve the liquidity position of the Company. Negotiations with the banks and financial institutions are under process. The management is in the process of making arrangements with renowned foreign buyers to obtain export business agianst advance payments before shipments and hopeful that this arrangement will improve the tight liquidity position of the Company. The management is hopeful of restoring its previous status and prestige in the export market, subject to successful negotiations with the foreign buyers for improvement of liquidity. The management's efforts to improve the operations and cut down the losses were adversely affected due to electricity and gas loadshedding. The management is making all out efforts to achieve the desired level of production and sales. The management is confident that with the improvement in the supply position of electricity and gas, the operations of the Company will improve and it will be successful in its efforts and the Company will be able to continue as a going concern This condensed interim financial report is presented in Pak Rupee, which is the Company's functional and presentation currency. SIGNIFICANT ACCOUNTING POLICIES This condensed interim financial report has been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 ''Interim Financial Reporting'' and provisions of and directives issued under the Companies Ordinance, in case the requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 have been followed. This condensed interim financial report has been prepared under the "historical cost convention" except staff retirement gratuity carried at present value and certain property, plant and equipment carried at valuation. This condensed interim financial report does not include all the information required for full annual financial statements, and should be read in conjunction with the Company's published audited financial statements for the year ended June 30, This condensed interim financial report is unaudited and being submitted to the shareholders as required under Section 245 of the Companies Ordinance, The accounting policies and methods of computation adopted in the preparation of this condensed interim financial report are the same as those applied in the preparation of the financial statements for the year ended June 30, Standards, amendments to published approved accounting standards and interpretations effective from July 01, 2011: There are certain new standards, amendments and International Financial Reporting Interpretations Committee (IFRIC) interpretations that became effective during the period and are mandatory for accounting periods beginning on or after July 01, 2011 but are considered not to be relevant or have any significant effect on the Company's operations and are, therefore, not disclosed in this condensed interim financial report. Standards, amendments to published approved accounting standards and interpretations effective as adopted in Pakistan, those are not yet effective: There are other amendments to the standards and new interpretations that are mandatory for accounting periods beginning on or after July 01, 2012 but are considered not to be relevant or do not have any significant effect on Company's operations and are, therefore, not detailed in this condensed interim financial report. 08

10 3. Cumulative preference shares Un-audited Audited March 31, June 30, 80,000,000 cumulative preference shares of Rs. 10/- each fully paid in cash. 800,000, ,000, SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT Un-audited Audited March 31, June 30, Note Opening balance 5,156,590,479 5,209,204,302 Surplus realised on disposal of assets during the period / year - (2,054,614) Incremental depreciation on revalued assets for the period / year (23,582,302) (32,910,862) (Reversal) / provision of deferred tax on surplus 17,648,347 (17,648,347) 5,150,656,524 5,156,590, Long term financing Secured Under mark up arrangements From banking companies Fixed assets finance 239,227, ,227,233 Demand finances 5.1 1,723,000, ,640,000 Term finances 5.2 1,682,598,197 1,236,724,170 Long term finances 157,245, ,139,748 From financial institutions Term finances 561,760, ,960,533 Long term finances 78,434,529 78,434,529 Not subject to mark up From financial institution Term finance 58,351,091 58,351,091 4,500,617,378 2,835,477,304 Less : Current portion Installments due 998,409, ,187,546 Payable within one year 527,547, ,208,854 1,525,957,415 1,265,396,400 2,974,659,963 1,570,080,904 Unsecured From Directors 264,813, ,813,086 From others 31,840,000 31,840, ,653, ,653,086 3,271,313,049 1,866,733, The holders of 55,080,498 cumulative preference shares called upon to convert preference shares into ordinary shares due to non-redemption of their holding on exercise of put option for two consecutive years. The Company proposed to issue new ordinary shares to preference shareholders holding 49,984,998 cumulative preference shares who have called upon to convert their shares, as per conversion formula laid down in the Prospectus and Articles of Association of the Company. In view of the reservations by the investors regarding conversion formula, the matter is deferred till amicable resolution with the consensus of the investors. The matter of conversion of balance of 5,095,500 cumulative preference shares is also pending till the resolution of matter with the investors who have first exercised the put option. Demand finance I of Rs million, demand finance V of Rs. 80 million, demand finance VI of Rs million, long term finance of IX Rs million and short term export finances of Rs. 1, million have been restructured and converted into a long term finance during the period. The principal amount will be repaid in 36 unequal quarterly installments in nine years commencing from September 30, 2011 and ending on June, 30, The loan will be subject to fixed mark up rate of 6% per annum for first 3 years, 7% per annum for next two years, 8% per annum for next two years and at KIBOR rate for the last two years. Markup of Rs million outstanding as at June 30, 2011 and markup for the period from July 01, 2011 to June 30, 2020 will be deferred and will be repaid after payment of principal amount in nine years. The rescheduling of Rs 1,537 million was subject to arrangement of fresh working capital facilities by the sponsors till September 30, The Company has requested to extend the period for arrangement of working capital. Term finance I of Rs million, export finances of Rs million, finance against trust receipts of Rs million and running finance of Rs. 225 million have been restructured into a long term finance during the period. Rs. 6 million will be repaid in 12 equal monthly instalments commencing from July 01, 2011 and ending on June, 01, 2012, Rs million will be repaid in 54 equal monthly instalments commencing from July 01, 2012 and ending on December, 01, 2016 and the balance principal of Rs 250 million will be declassified as a regular limit from January 1, Terms of repayment of balance amount of Rs. 250 million are not decided. The loan will be subject to fixed mark up rate of 9% per annum. Markup of Rs million outstanding as at June 30, 2011 and markup for the period from July 2011 to December 2016 will be deffered and will be repaid in 34 monthly installments commencing from January 2017 and ending on October

11 6. Deferred liabilities Un-audited Audited March 31, June 30, Deferred taxation ,648,347 Staff retirement gratuity 166,984, ,349,841 Deferred mark up ,119, ,104, ,998, Deferred tax asset of Rs million has not been recognised in this condensed interim financial report in view of uncertain future results. 7. CONTINGENCIES AND COMMITMENTS Contingencies March 31, June 30, Post dated cheques issued in favour of Collector of Customs for release of goods imported for re-export 22,388,382 32,496,022 Liability of markup not acknowledged in view of loan rescheduling applications filed to allow non serviceable grace period on the outstanding liabilities 677,777,312 - Commitments There is no commitment outstanding as at March 31, Property, plant and equipment 8.1 ACQUISITIONS AND DISPOSALS OF PROPERTY, PLANT AND EQUIPMENT - AT COST Nine Months Ended March 31, 2012 Nine Months Ended March 31, 2011 Acquisitions Disposals Acquisitions Disposal Owned Plant and machinery 239,000-45,994,422 - Electric installations ,201 - Furniture and fixture 150, Office equipment 141,000-1,333,325 - Vehicles 659,883 10,515, ,550 1,189,883 10,515,694 47,792, , Trade debts Un-audited Audited March 31, June 30, Considered good Secured Foreign 15,383,490 47,697,586 Unsecured Foreign 1,811,590,352 2,383,154,461 Local 556,746, ,184,357 2,383,720,482 2,802,036, The aging of trade debts is as under: Not past due 568,605,575 1,002,888,683 Past due 1,815,114,907 1,799,147,721 2,383,720,482 2,802,036,404 Out of past due trade debts outstanding at June 30, 2011, Rs million have been recovered during the period. The management is confident that its efforts will result in the recovery of above old outstanding balances, and hence, based on the past experience and taking into consideration, the financial position, previous record of recoveries and pending negotiations and resolutions, the management believes that trade debts past due do not require any impairment. 10

12 10. Cost of sales Quarter Ended March 31, Nine Months Ended March 31, Cost of goods manufactured (Note 10.1) 705,587,815 1,423,475,677 2,577,693,244 4,451,274,309 Finished goods Opening stock 379,668, ,365, ,453, ,947,548 Closing stock (348,172,643) (494,460,856) (348,172,643) (494,460,856) 31,495, ,904,173 (8,718,918) 342,486, Cost of goods manufactured 737,083,393 1,524,379,850 2,568,974,326 4,793,761,001 Raw material consumed (Note ) 257,517, ,267,077 1,135,740,683 1,765,913,039 Salaries, wages and benefits 66,945,496 99,616, ,188, ,036,741 Staff retirement benefits 9,402,763 7,211,912 24,867,333 25,026,345 Stores and spares 24,784,546 90,867, ,478, ,373,457 Dyes and chemicals 89,529, ,854, ,023, ,152,171 Packing material 64,039, ,463, ,336, ,047,334 Repairs and maintenance 2,065,941 6,602,645 9,715,863 11,278,963 Fuel and power 79,571,699 80,457, ,837, ,943,233 Insurance 146,001 5,819,024 3,432,753 17,644,945 Research and development expenditure - 256, ,258 Depreciation 40,198,672 38,788, ,011, ,961,912 Other 13,814,416 45,999,681 63,222,553 84,749, ,015,752 1,174,204,928 2,594,856,085 3,805,472,104 Work in process Opening stock 736,306, ,227, ,571,441 1,373,758,465 Closing stock (678,734,282) (727,956,260) (678,734,282) (727,956,260) 57,572, ,270,749 (17,162,841) 645,802, ,587,815 1,423,475,677 2,577,693,244 4,451,274, Raw material consumed 11. Finance cost Opening stock 273,007, ,664, ,604, ,682,701 Purchases including purchase expenses 236,584, ,687,898 1,142,211,123 1,636,315, ,592, ,352,339 1,387,815,770 1,916,998,301 Closing stock (252,075,087) (151,085,262) (252,075,087) (151,085,262) 257,517, ,267,077 1,135,740,683 1,765,913,039 The Company is facing financial and operational problems. As part of its long terms plan to overcome these problems, the management has filed applications to its bankers to reschedule the existing principal and markup thereon to convert the entire outstanding liabilities into non serviceable loans for a reasonable period of time. The Company is hopeful that its bankers will consider the proposals favourably, therefore provision of markup on financial facilities under consideration for rescheduling has not been made in this condensed interim financial report. 12. Earnings per share - Basic Quarter Ended March 31, Nine Months Ended March 31, (Loss) attributable to ordinary share holders (293,277,678) (702,262,606) (916,614,343) (2,390,205,713) Weighted average number of ordinary shares outstanding during the period 115,000, ,000, ,000, ,000,000 Earnings per share - Basic and diluted (2.55) (6.11) (7.97) (20.78) 12.1 There is no dilutive effect on the basic earnings per share of the Company. 11

13 13. TRANSACTIONS WITH RELATED PARTIES The Company in the normal course of business carries out transactions with various related parties which comprise of associated undertakings and key management personnel. Significant transactions with related parties are as follows:- Nine Months Ended March 31, Relationship Nature of transaction Associated undertakings Sale of goods - 865,343,337 Organisational expenses recovered - 370,009 Services received 3,267,679 4,435,901 Rental income - 1,492,000 Key management personnel Remuneration 6,300,000 4,500, Overdue loans On the reporting date, the installments of long term financing amounting to Rs million (June 30, 2011: Rs million) alongwith mark up of Rs million (June 30, 2011: Rs million), lease finances amounting to Rs million (June 30, 2011: Rs million) alongwith mark up of Rs million (June 30, 2011: Rs million) and short term borrowings amounting to Rs million (June 30, 2011: Rs million) alongwith mark up of Rs million (June 30, 2011: Rs million) were over due. The Company has filed applications for rescheduling of outstanding liabilities, which are under consideration. 15. DATE OF AUTHORISATION FOR ISSUE This condensed interim financial report was authorised for issue on by the Board of Directors of the Company. 16. GENERAL (i) (ii) There is no unusual item included in this condensed interim financial report which is affecting liabilities, assets, loss, comprehensive loss, cash flows or equity of the Company. The provision for taxation made in this condensed interim financial report is subject to adjustment in annual financial statements. (iii) Figures have been rounded off to the nearest Rupee. Muhammad Naeem (Director) (Chief Executive Officer) 12

14 Book Post Printed Matter L I M I T E D Nishatabad, Faisalabad - Pakistan. Tel: Fax: , chenab@chenabgroup.com Design & Printed by: G.D. PRINTERS (Pvt) Ltd. Fsd. Ph: