Interim Financial Report

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

Pak Elektron Limited CONTENTS STAKEHOLDERS INFORMATION Corporate Information Directors Review 02 03 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 06 08 09 10 11 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 18 20 21 22 23

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: 04235839182, 35887262 Fax: 04235869037 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: 042357182746 Fax: 04235762707 Email: shares@saigols.com Works 14K.M. Ferozepur Road, Lahore. Tel: 04235919 (9 Lines) Transformer Facility 34K.M. Ferozepur Road, Keath Village, Lahore. Tel: 042359351512 Karachi Kohinoor Building, 25West Wharf Road, Karachi. Tel: 021322009514 Fax: 02132310303 Islamabad Room # 301, 3rd Floor, Green Trust Tower, Blue Area, Islamabad. Tel: 0512824543, 2828941 Fax: 0512273858 China 206, No. 1007, Zhong Shan Naun Er Road, Shanghai, China. Tel: 862164567713 Fax: 862154109971 02

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. 5.869 billion as compared to Rs. 5.054 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 5,054 815 Gross Profit 1,679 1,214 465 Finance Cost 471 482 (11) Profit before tax 766 297 469 Profit after tax 733 253 480 Earnings per share 1.81 0.61 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

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

CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION

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 32,744,288 881,429 500,528 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

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 342,805 344,008 14,768,750 14,810,898 Longterm investments 64,467 63,890 Longterm deposits 198,023 192,808 CURRENT ASSETS Stores, spares and loose tools 448,890 462,140 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 904,108 853,209 Other receivables 172,609 187,730 Other financial assets 21,962 21,596 Income tax refundable 299,228 319,067 Cash and bank balances 320,744 340,086 17,713,048 17,459,068 32,744,288 32,526,664 HAROON A. KHAN Director 07

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 10 707,158 715,645 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 254,991 223,330 Administrative Cost 188,526 187,343 Other Operating Expenses 2,800 26,970 Finance Cost 471,148 482,300 Share of loss of associate (2,439) (3,285) Profit /(Loss) Before Tax 765,702 296,757 Provision for Taxation 33,091 43,383 Profit /(Loss) For the year 732,611 253,374 Earnings per share Rupees Basic & diluted 12 1.81 0.61 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

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 320,744 296,757 674,899 971,656 (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) 277,804 253,788 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

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, 2013 3,130,689 529,740 2,885,041 6,545,470 Total comprehensive income for the period 253,374 253,374 Incremental depreciation 53,112 53,112 Balance as at, 3,130,689 529,740 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 121,932 121,932 Balance as at December 31, 4,431,029 1,293,858 5,301,554 11,026,441 Total comprehensive income for the period. 732,611 732,611 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

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, 1984. 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

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 500,000,000 500,000,000 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 625,000 625,000 37,500,000 37,500,000 B class preference shares of Rs. 10 each 375,000 375,000 100,000,000 100,000,000 1,000,000 1,000,000 600,000,000 600,000,000 6,000,000 6,000,000 4 ISSUED, SUBSCRIBED AND PAID UP CAPITAL (Unaudited) (Audited) (Unaudited) (Audited) December 31 December 31 Number of shares 273,214,754 273,214,754 Issued for cash 2,732,148 Other than cash: 137,500 137,500 against machinery 1,375 1,375 408,273 408,273 on acquisition of Pel Appliances Limited 4,083 4,083 6,040,820 6,040,820 against conversion of preference shares 60,408 60,408 118,343,841 118,343,841 as fully paid bonus shares 1,183,439 1,183,439 398,145,188 398,145,188 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 449,576 449,576 443,102,780 443,102,780 2,732,148 4,431,029 4,431,029 12

Pak Elektron Limited Interim Financial Report, (Unaudited) (Audited) December 31 4.1 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 398,145,188 268,111,239 26,811,123 103,222,826 398,145,188 398,145,188 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 1,058,627 803,507 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 126,360 126,360 2,975,700 760,001 2,215,699 1,850,000 2,103,438 272,793 2,376,231 3,102,060 659,253 2,442,807 13

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 168,709 135,110 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 14,764,490 142,725 403,994 14,549,872 15,168,484 Written down value of the assets disposed off/ adjustment 5,174 10,109 Depreciation charged during the period 181,921 751,228 Net book value at the end of the period/ year 14,362,777 14,407,147 10 SALES (Unaudited) (Unaudited) Local Export Less: Sales tax and excise duty Discount 5,620,861 247,868 5,868,729 639,654 67,504 707,158 5,161,571 5,000,989 53,000 5,053,989 573,233 142,412 715,645 4,338,344 14

Pak Elektron Limited Interim Financial Report, 11 COST OF SALES (Unaudited) (Unaudited) Raw material consumed 2,787,092 2,675,370 Direct wages 156,406 151,850 Factory overhead 445,258 443,392 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 877,488 385,437 at end of period (908,314) (491,031) (30,826) (105,594) Cost of goods sold 3,482,491 3,124,498 12 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 732,611 253,375 Less: dividend payable on preference shares 10,677 10,677 Profit attributable to ordinary shares 721,934 242,698 Number of shares (Unaudited) (Unaudited) Weighted average number of ordinary shares for the purpose of basic earnings per share 398,145,188 398,145,188 Effect of dilutive potential ordinary shares 44,957,592 44,957,592 443,102,780 443,102,780 15

(Unaudited) (Unaudited) Basic earning per share (rupees) 1.81 0.61 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 552 469 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 16

CONDENSED INTERIM FINANCIAL INFORMATION

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 44,594 757,301 576,972 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 45,158 817,486 500,528 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

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 342,805 344,008 14,768,750 14,810,898 Longterm investments 64,567 63,990 Longterm deposits 198,023 192,808 CURRENT ASSETS Stores, spares and loose tools 448,890 462,140 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 904,108 853,209 Other receivables 172,610 187,730 Other financial assets 21,962 21,596 Income tax refundable 379,762 387,963 Cash and bank balances 264,090 287,935 15,539,357 15,621,946 30,570,697 30,689,642 HAROON A. KHAN Director 19

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 4,191,364 10 639,654 573,233 3,997,840 3,618,131 11 3,110,319 2,959,988 887,521 658,143 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 1,544 892,976 659,687 87,952 84,566 109,141 102,131 2,800 22,156 295,840 302,611 397,243 148,223 21,453 37,826 375,789 110,397 12 0.92 0.25 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

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 397,243 482,136 148,223 495,210 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 33,006 912,385 (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) 287,935 264,090 643,433 (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) 259,488 247,480 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

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, 2013 3,130,689 529,740 2,473,853 6,134,282 Total comprehensive income for the period 110,397 110,397 Incremental depreciation 53,112 53,112 Balance as at, 3,130,689 529,740 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 121,932 121,932 Balance as at December 31, 4,431,029 1,293,858 3,876,195 9,601,082 Total comprehensive income for the period. 375,789 375,789 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

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, 1984. 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 31 500,000,000 500,000,000 Ordinary shares of Rs. 10 each 5,000,000 5,000,000 62,500,000 62,500,000 37,500,000 37,500,000 100,000,000 100,000,000 A class preference shares of Rs. 10 each B class preference shares of Rs. 10 each 625,000 625,000 375,000 375,000 1,000,000 1,000,000 600,000,000 600,000,000 6,000,000 6,000,000 23

4 ISSUED, SUBSCRIBED AND PAID UP CAPITAL (Unaudited) (Audited) (Unaudited) (Audited) December 31 Number of shares December 31 273,214,754 273,214,754 Issued for cash 2,732,148 Other than cash: 137,500 137,500 against machinery 1,375 1,375 408,273 408,273 on acquisition of Pel Appliances Limited 4,083 4,083 6,040,820 6,040,820 against conversion of preference shares 60,408 60,408 118,343,841 118,343,841 as fully paid bonus shares 1,183,439 1,183,439 398,145,188 398,145,188 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 449,576 449,576 443,102,780 443,102,780 2,732,148 4,431,029 4,431,029 4.1 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 398,145,188 268,111,239 26,811,123 103,222,826 398,145,188 398,145,188 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 1,058,627 803,507 4,571,349 4,826,469 24

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 2,103,438 126,360 272,793 126,360 2,376,231 As at end of the period / year Current maturity 2,975,700 760,001 2,215,699 3,102,060 659,253 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 168,709 135,110 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 14,764,490 142,725 403,994 14,549,872 15,168,484 5,174 10,109 181,921 751,228 14,362,777 14,407,147 25

(Unaudited) (Unaudited) 10 SALES Local Export Less: Sales tax and excise duty Discount 4,389,626 247,868 4,637,494 639,654 639,654 3,997,840 4,138,364 53,000 4,191,364 573,233 573,233 3,618,131 11 COST OF SALES Raw material consumed 2,437,346 2,511,982 Direct wages 156,406 151,850 Factory overhead 445,258 443,392 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 700,790 278,744 at end of period (754,040) (385,460) (53,250) (106,716) Cost of goods sold 3,110,319 2,959,988 12 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 375,789 110,397 Less: dividend payable on preference shares 10,677 10,677 Profit attributable to ordinary shares 365,112 99,720 26

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 398,145,188 398,145,188 Effect of dilutive potential ordinary shares 44,957,592 44,957,592 443,102,780 443,102,780 (Unaudited) (Unaudited) Basic earning per share (rupees) 0.92 0.25 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 552 469 27

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

www.pel.com.pk 17Aziz Avenue, Canal Bank, GulbergV, Lahore. Ph: (042) 357182745, 357173645