C O N T E N T S Vision / Mission and Corporate Strategies 02 Company Information 03 Directors Report 04 Balance Sheet 08 Profit and Loss Account 09 Statement of Comprehensive Income 10 Statement of Changes in Equity 11 Cash Flow Statement 12 Notes to the Accounts 13 01
Our Vision To recognize globally as a leading supplier of steel large bar of the highest quality standards, with market leading standards of customer service. Business development by adoption of emerging technologies, growth in professional competence, support to innovation. Enrichment of human resources and performance recognition. Our Mission To manufacture and supply high quality steel large bar to the construction sector whilst adopting safe and environmentally friendly practices. To remain the preferred and consistent supply source for various steel products in the country. Offer products that are not only viable in terms of desirability and price but most importantly give true and lasting value to our customers. To fulfill social obligation and compliance of good governance. Ensure that the business policies and targets are in conformity with national goals. Deliver strong returns on investments of our stakeholders by use of specialized and high quality corporate capabilities with the combined use of modern bar mill practices, enterprise class software on a web based solution and targeted human resource support. Corporate Strategies Ensure that the business policies and targets are in conformity with national goals. Establish a better and safer work environment for all employees Contribute in National efforts towards attaining sustainable self-efficiency in steel products, Customer's satisfaction by providing best value and quality products. Maintain modern management system conforming to international standards needed for an efficient organization. Ensure to foster open communications, listen, and understand other perspectives. Acquire newer generation technologies for effective and efficient operations. 02
COMPANYS INFORMATION Mr. Zahid Anjum Mr. Abdul Wajid Registered Office Mr. Saad Zahid Associated Company The Crescent Star Insurance Co. Ltd. Nagar, Silk Bank Limited Soneri Bank Limited Summit Bank Limited Habib Bank Limited MCB Bank Limited e mail: info@doststeels.com 03
DIRECTORS' REVIEW Dear Members Assalam-O-Alaikum The Directors of your Company are pleased to present the condensed interim financial information for the nine months period ended. General Review We are glad to report to the shareholders that their company started its commercial operations th from 28 February. The progress of the stability of production and the quality of the finished product attained are both beyond expectations. The total commercial production period covered by the attached financial statements is approximately one month. Hence, the materiality level of the sales and the cost of sales is very low and additionally Gross and Net Loss has also been observed. The company expect to produce and stock multiple sizes, due to the nature of its customers' requirements, in the coming months and to build up its inventory of the finished goods up to the desired level of sales cycle and hence achieve the desired sales targets accordingly. We are grateful to the shareholders for the patience exercised and the support extended towards your company during this crucial time, enabling it to reach this pivotal point. Financial Position at a Glance. Financial results for nine-month period under review are as follows: Performance Highlights March March Net Sales 27,447,811 - Gross Profit/(Loss) (10,094,764) - (Loss) before Tax (PKR) (65,353,533) (66,801,591) (Loss) after Tax (PKR) (65,696,631) (66,801,591) LPS (0.21) (0.44) Business Review The Steel Sector in Pakistan is constantly improving in terms of not only expanding capacity but also increasing quality. Demand for higher standard rebar is expected to rise further in the near future due to the inauguration of mega development schemes and power projects under the umbrella of China-Pakistan Economic Corridor (CPEC). In the initial stages of economic development, steel consumption increases faster than other commodities due to huge requirements of steel to build basic infrastructure, including bridges, dams, railways, and power generation, distribution and transmission projects, etc. The finished product of DSL is establishing its footprints in the retail market as an accepted and trusted brand and is expected to penetrate further into consumer preferences due to its quality, reliability and stellar test results thereby fueling further demand. Future outlook Keeping in view the country's expanding annual steel demand and the government's commitments toward upcoming infrastructure projects including but not limited to highways, dams and industrial undertakings in relation to China Pakistan Economic Corridor. The DSL is in takeoff position to capture a fair portion of steel sector's canvas. 04
Change of Directors The Board of Directors has accepted the resignations tendered by Mr. Nasser Hyatt Maggo and Lt. General (R) Syed Parvez Shahid. The board of directors thanks both the gentlemen for the contribution during their stay with the company and trust that their guidance shall remain be available to us in future. In accordance with the Restructuring Agreement between the company and its lenders, Mr. Zahid Anjum and Mr. Abdul Wajid have been appointed to fill in the casual vacancies as representatives of the lenders. We welcome both Mr. Zahid Anjum and Mr. Abdul Wajid on the board and trust that their experience will contribute greatly to the progress and development of your company. Acknowledgement The Board of Directors would like to express their appreciation for the assistance and co-operation received from the banks, Government authorities, vendors and above all, the shareholders of the Company for placing trust on their Company and wish to place on record their deep sense of appreciation for the committed services by the executives and staff of the company. For and on behalf of the Board of Directors Jamal Iftakhar Chief Executive Officer Karachi: April 24, 05
06 QUARTERLY REPORT
07 QUARTERLY REPORT
ASSETS CONDENSED INTERIM BALANCE SHEET AS AT 31 MARCH (Un-Audited) (Audited) June 30, Note Rupees Rupees Non-Current Assets Property, plant and equipment 6 2,539,481,500 2,363,043,780 Long term security deposits 41,881,345 13,910,345 Deferred tax assets - - 2,581,362,845 2,376,954,125 Current Assets Stock in trade 7 122,896,292 - Trade debtors 15,355,451 - Current portion of Long term security deposits 1,170,000 1,170,000 Advances 7,092,532 3,386,543 Short term prepayments 473,800 - Interest accrued - 17,406 Taxes refundable/adjustable 3,177,648 1,595,033 Cash and bank balances 8 367,679,298 781,199,806 517,845,021 787,368,788 TOTAL ASSETS 3,099,207,866 3,164,322,913 EQUITY Share Capital and Reserves Authorized Share Capital 320,000,000 (June 30, : 320,000,000) 3,200,000,000 3,200,000,000 Issued, subscribed and paid up capital 9 3,157,338,600 3,157,338,600 Discount on issue of right shares 10 (1,365,481,480) (1,365,481,480) Accumulated losses (647,708,298) (582,011,667) Total Equity 1,144,148,822 1,209,845,453 LIABILITIES Non-Current Liabilities Advance for issuance of shares-unsecured 11 358,100,019 358,100,019 Long term financing - secured 12 794,769,634 815,728,583 Markup accrued on secured loans 614,940,264 614,940,264 Deferred Liabilities 6,020,565 4,243,275 Current Liabilities 1,773,830,482 1,793,012,141 Trade & other payables 46,539,731 23,233,120 Accrued Markup 6,214,069 4,215,915 Short term borrowings - unsecured 94,481,181 112,395,016 Current and overdue portion of long term borrowings 33,993,581 21,621,268 181,228,562 161,465,319 Contingencies and Commitments 13 Total Liabilities 1,955,059,044 1,954,477,460 TOTAL EQUITY AND LIABILITIES 3,099,207,866 3,164,322,913 The annexed notes 01 to 17 form an integral part of these financial statements. Chief Executive Officer Chief Financial Officer Director 08
CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED) FOR THE NINE MONTHS ENDED MARCH 31, Nine months period ended Quarter ended --------------------------Rupees-------------------------- -- Sales 27,447,811-27,447,811 - Less: Cost of sales (37,542,575) - (37,542,575) - Gross loss (10,094,764) - (10,094,764) - Administrative expenses (69,868,471) (72,331,162) (15,049,970) (12,588,868) Finance cost (4,635,867) (90,394) (4,480,133) (22,912) Other operating income 14 19,245,569 5,619,965 769 - Loss before taxation (65,353,533) (66,801,591) (29,624,098) (12,611,780) Taxation (343,098) - - - Loss after taxation (65,696,631) (66,801,591) ( 29,624,098 ) (12,611,780) Loss per share - basic & diluted (0.21) (0.44) (0.09) (0.08) The annexed notes 01 to 17 form an integral part of these financial statements. Chief Executive Officer Chief Financial Officer Director 09
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED) FOR THE NINE MONTHS ENDED MARCH 31, Nine months period ended Quarter ended --------------------------Rupees-------------------------- ---- Loss after tax for the period (65,696,631) (66,801,591) ( 29,624,098 ) (12,611,780) Other comprehensive income for the period Items that will not be reclassified to profit or loss - - - - Items that may be reclassified to profit or loss - - - - Total comprehensive loss for the period (65,696,631) (66,801,591) ( 29,624,098 ) (12,611,780) The annexed notes 01 to 17 form an integral part of these financial statements. Chief Executive Officer Chief Financial Officer Director 10
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED) FOR THE NINE MONTHS ENDED MARCH 31, Issued, subscribed and paid up capital Discount on issue of right shares Accumulated losses Total - - - - - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - - - - Balance as at June 30, 2016 674,645,000 - (500,993,968) 173,651,032 Right shares issued during the period 2,482,693,600 - - 2,482,693,600 Discount on right shares issued - (1,365,481,480) - (1,365,481,480) Loss for the nine months ended - - (66,801,591) (66,801,591) Balance as at 3,157,338,600 (1,365,481,480) (567,795,559) 1,224,061,561 Balance as at June 30, 3,157,338,600 (1,365,481,480) (582,011,667) 1,209,845,453 Loss for the nine months ended - - (65,696,631) (65,696,631) Balance as at 3,157,338,600 (1,365,481,480) (647,708,298) 1,144,148,822 The annexed notes 01 to 17 form an integral part of these financial statements. Chief Executive Officer Chief Financial Officer Director 11
CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED) FOR THE NINE MONTHS ENDED MARCH 31, CASH FLOWS FROM OPERATING ACTIVITIES Note Rupees Rupees Loss before taxation (65,353,533) (66,801,591) Adjustments for non cash items: Depreciation 12,124,424 908,295 Finance cost 4,635,867 90,394 Provision for gratuity 1,777,290 876,000 Bad debts provision 17,913,835 500,000 Creditors written back - (5,543,350) One time special grant from Directors (17,913,835) - Interest income (1,331,734) (76,615) The annexed notes 01 to 17 form an integral part of these financial statements. 17,205,847 (3,245,276) Operating cash flow before working capital changes (48,147,686) (70,046,867) Working capital changes: (Increase) / Decrease in current assets: Stock in trade (122,896,292) - Trade debtors (15,355,451) Advances (3,705,989) (2,776,986) Short term prepayments (473,800) 3,446,500 Tax refund due from government (1,925,713) (173,056) Increase / (Decrease) in current liabilities: Trade and other payables 23,306,611 (3,880,481) Cash (outflow) from working capital (121,050,634) (3,384,023) Cash (used in) operations (169,198,320) (73,430,890) Finance cost paid (37,829,285) (47,246,456) Net cash (used in) operating activities (207,027,605) (120,677,346) CASH FLOW FROM INVESTING ACTIVITIES Fixed capital expenditure (153,370,572) 159,294,929 Long term security deposits (27,971,000) 1,350,000 Interest received 1,349,140 598,235 Net cash (used in) / generated from investing activities (179,992,432) 161,243,164 CASH FLOW FROM FINANCING ACTIVITIES Advance received against issuance of shares - (328,503,167) Receipts against Issuance of Right Shares - 1,117,212,120 Repayment of long term financing - secured (8,586,636) (47,262,051) (Repayment) / Receipt of short term borrowings- unsecured (17,913,835) 66,702,782 Net cash (used in) / generated from financing activities (26,500,471) 808,149,684 Net (decrease)/increase in cash and cash equivalents during the period (413,520,508) 848,715,502 Cash and cash equivalents at beginning of the period 781,199,806 6,505,449 Cash and cash equivalents at the end of the period 8 367,679,298 855,220,951 - Chief Executive Officer Chief Financial Officer Director 12
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED) FOR THE NINE MONTHS ENDED MARCH 31, 1 THE COMPANY AND ITS OPERATIONS Dost Steels Limited (the Company) was incorporated in Pakistan on March 19, 2004 as a private limited company under the Companies Ordinance, 1984 (now the Companies Act, ). The Company was converted into public limited company with effect from May 20, 2006 and then listed on the Pakistan Stock Exchange Limited (formerly Karachi Stock Exchange Limited) with effect from November 26, 2007. The registered office of the Company is situated at 101, Chapel Plaza, Hasrat Mohani Road, Karachi 74000. The principal business of the Company include manufacturing of steel, direct reduced iron, sponge iron, hot briquetted iron, carbon steel, pig iron and special alloy steel in different forms. 2 BASIS OF PREPARATION This condensed interim financial information is unaudited and being submitted to the shareholders as required under Section 237 of the Companies Act, ("the Act") and is un-audited as required by the Act and Code of Corporate Governance. During the previous year, the Companies Act ("the Act") was enacted on 30 May and replaced and repealed the Companies Ordinance, 1984 ("the repealed Ordinance"). However, the Securities and Exchange Commission of Pakistan vide its Circular No. 17 and Circular No. 23 dated 20 July and 04 October respectively and Institute of Chartered Accountants of Pakistan vide its Circular No. 17 dated 06 October, have advised and clarified that the Annual Financial Statements of the Companies whose financial year closes on or before 31 December and interim financial statements of the Companies for the period ended on or before 31 December, shall be prepared in accordance with the repealed Ordinance. These condensed interim financial statements comprise of the Balance Sheet as at, Profit and Loss Account, Statement of Comprehensive Income, Statement of Changes in Equity and the Cash Flow Statement together with the selected notes for the nine months ended which have not been audited. The comparative balance sheet presented in these condensed interim financial statements as at June 30, has been extracted from the audited Financial Statements of the Company for the year ended June 30,, whereas the comparative Profit and Loss Account, Statement of Comprehensive Income, Statement of Changes in Equity and the Cash Flow Statement for the half nine months ended have not been audited. These interim financial statements do not include all the information and 13 QUARTERLY REPORT
disclosures required in annual financial statements, and should be read in conjunction with the company's annual financial statements for the year ended June 30,. 3 SIGNIFICANT ACCOUNTING POLICIES The accounting policies and the methods of computation adopted in the preparation of these condensed interim financial statements are the same as those applied in the preparation of the financial statements for the year ended June 30,. Previous periods' figures are re-arranged / re-classified where necessary to facilitate comparison and are rounded off to the nearest rupee; appropriate disclosure is given in relevant note in case of material rearrangement. 4 ESTIMATES The preparation of condensed interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies ad the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. The significant judgements made by the management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended June 30,. 5 RISK MANAGEMENT The Company's risk management objectives and policies are consistent with those disclosed in the financial statements as at and for the year ended June 30,. 14
(Un-Audited) (Audited) June 30, Note Rupees Rupees 6 PROPERTY, PLANT AND EQUIPMENT Operating assets 6.1 2,531,698,377 164,217,785 Capital work-in-progress 6.2 7,783,123 2,198,825,995 2,539,481,500 2,363,043,780 6.1 Operating Assets OWNED Total Computers Equipment Electric Equipment Office Equipment Vehicles Furniture & fittings Plant and Machinery Building Free hold land Particulars - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - - - - - - - - - - - - - - -------------------- Period ended Opening net book value 157,876,220 - - 1,282,015 1,329,656 446,339 2,369,584 913,971 164,217,785 Additions - - - 123,000-430,000 616,150 290,150 1,459,300 Transferred from capital work in progress 14,685,412 216,486,885 2,146,973,419 - - - - - 2,378,145,716 Depreciation charged - (1,804,057) (9,451,517) (145,232) (192,802) (55,133) (268,965) (206,716) (12,124,422) Net book value as at 172,561,632 214,682,828 2,137,521,902 1,259,783 1,136,854 821,206 2,716,769 997,405 2,531,698,377 15 Period ended Cost 172,561,632 216,486,885 2,146,973,419 3,812,799 5,601,035 1,026,602 6,301,449 3,825,198 2,556,589,019 Accumulated depreciation - (1,804,057) (9,451,517) (2,553,016) (4,464,181) (205,396) (3,584,680) (2,827,793) (24,890,642) 172,561,632 214,682,828 2,137,521,902 1,259,783 1,136,854 821,206 2,716,769 997,405 2,531,698,377 Year ended June 30, Opening net book value 157,876,220 - - 1,471,530 1,662,070 213,444 1,740,614 714,932 163,678,810 Additions - - - 35,700-280,000 984,097 517,790 1,817,587 Depreciation charged - - - (225,215) (332,414) (47,105) (355,127) (318,751) (1,278,612) Net book value as at June 30, 157,876,220 - - 1,282,015 1,329,656 446,339 2,369,584 913,971 164,217,785 As at June 30, Cost 157,876,220 - - 3,689,799 5,601,035 596,602 5,685,299 3,535,048 176,984,003 Accumulated depreciation - - - (2,407,784) (4,271,379) (150,263) (3,315,715) (2,621,077) (12,766,218) 157,876,220 - - 1,282,015 1,329,656 446,339 2,369,584 913,971 164,217,785 Units of production 15% 20% 15% 15% 30% Rate of Depreciation - 10%
6.2 Capital work in progress QUARTERLY REPORT (Un-Audited) (Audited) June 30, Note Rupees Rupees Land development Opening balance 14,314,430 14,314,430 Additions 370,982 - Transfer to operating assets (14,685,412) - Closing balance - 14,314,430 Civil works Opening balance 212,049,809 209,231,543 Additions 4,437,076 2,818,266 Transfer to operating assets (216,486,885) - Closing balance - 212,049,809 Plant and machinery Opening balance 1,415,672,085 1,508,014,718 Additions 147,103,214 102,927,682 Advances adjusted/received back - (213,184,150) Advances for plant and machinery 6.2.1-17,913,835 Transfer to operating assets (1,554,992,176) - Closing balance 7,783,123 1,415,672,085 Unallocated borrowing costs Opening balance 556,789,671 496,394,142 Additions/(Deletion) 35,191,572 60,395,529 Transfer to operating assets (591,981,243) - - 556,789,671 7,783,123 2,198,825,995 6.2.1 Advances for plant and machinery Advances for plant and machinery 17,913,835 17,913,835 Provision against doubtful advances 6.2.1 (a) (17,913,835) - - 17,913,835 6.2.1 (a) Provision of Rs. 17,913,835/- has been made against unrecoverable advances paid for purchase of plant & machinery. The company has recovered and adjusted advances of Rs. 213,184,150/- from suppliers against advances paid for purchase of plant and machinery due to quality issues. The management has decided to create provision for doubtful debts inrespect of the remaining amount of Rs. 17,913,835/- refer note 14. 7 STOCK IN TRADE Raw material 50,645,266 - Work in progress 4,950,248 - Finished goods 67,300,778-122,896,292-8 CASH AND BANK BALANCES Cash in hand 54,259 161,815 Cash at banks: - current accounts 351,431,619 707,720,609 - deposit accounts 16,193,420 73,317,382 8.1 367,625,039 781,037,991 367,679,298 781,199,806 16
8.1 It includes balances pertaining to proceeds from the right issue amounting to Rs. 335,514,161/- (June : Rs. 668,708,971/-) kept in an escrow account at the directions of SECP and Rs. 14,591,135/- (June : Rs. 12,684,520/-) in a repayment account for long term loans. 9 ISSUED, SUBSCRIBED AND PAIDUP CAPITAL June 30, June 30, Number of shares Rupees Ordinary share of Rs.10 each 315,733,860 315,733,860 fully paid in cash 9.1 3,157,338,600 3,157,338,600 9.1 It includes 75,694,000 ordinary shares of Rs.10 each amounting to Rs.756,940,000/- held by related parties. 9.2 The company has only one class of ordinary shares. The holder of ordinary shares are entitled to receive dividend, bonus and right issue as declared and entitled to vote at meetings of the Company. Reconciliation of number of shares at beginning and at end of the period is as under : June 30, June 30, Number of shares Rupees 315,733,860 67,464,500 At beginning of the year 3,157,338,600 674,645,000-248,269,360 Issued during the period against cash - 2,482,693,600 315,733,860 315,733,860 At end of the year 3,157,338,600 3,157,338,600 9.3 The company has not reserved shares for issue under options or sale contracts. 10 DISCOUNT ON ISSUE OF RIGHT SHARES 1,365,481,480 1,365,481,480 The Company has issued right shares with the approval of board of directors, SECP and PSX with face value of Rs.2,482,693,600/- comprising of 248,269,360/- ordinary shares of Rs. 10/- each at a discount of Rs. 5.5/- per share. 11 ADVANCE FOR ISSUANCE OF SHARES-UNSECURED (Un-Audited) (Audited) June 30, Note Rupees Rupees From Crescent Star Insurance Limited 354,279,066 354,279,066 From directors 3,820,953 3,820,953 358,100,019 358,100,019 The Company has received advance against issuance of shares from the Crescent Star Insurance Limited (CSIL) and advance from directors of the company which will be adjusted against shares in capital of the company whenever there is next issue. The advances are un-secured and interest free. 17
(Un-Audited) (Audited) June 30, Note Rupees Rupees 12 LONG TERM FINANCING - SECURED Term Finance - Restructured Facilities 12.1 From banking companies and financial institutions Opening balance 837,349,851 886,576,455 Paid during the year (8,586,636) (49,226,604) 828,763,215 837,349,851 Less: Current portion (25,616,515) (13,972,644) Less: Overdue portion 12.1.1 (8,377,066) (7,648,624) (33,993,581) (21,621,268) 794,769,634 815,728,583 12.1 The Company has arranged Restructured Term Finance facilities of Rs. 931,509,627/- from National Bank of Pakistan, Askari Bank Limited, NIB Bank Limited, Bank of Khyber, Pak Kuwait Investment Company (Private) Limited, Saudi Pak Industrial and Agricultural Investment Company Limited and Faysal Bank Limited (former Royal Bank of Scotland Limited) as Syndicated loan, whereby Faysal Bank Limited is acting as agent of the syndicate. Due to absence of cash flow and non-commissioning of the project, DSL was and is unable to meet its repayment obligations towards the Financiers. All the syndicate banks have given their in-principle approval to the rescheduling and restructuring of the debts and obligations. All the syndicate banks except Pak Kuwait Investment Company (Private) Limited have signed the rescheduling and restructuring agreement. Pak Kuwait is expected to sign this agreements in due course. Terms of rescheduled and restructured agreement are as follows: a) For the repayment of the unpaid markup, mark up has been calculated on the total outstanding amount from the date of last payment till 30 June - the assumed date of commissioning @ 8% per annum. The total Mark up calculated will be converted into a "Zero Coupon TFC convertible into ordinary shares". All the TFCs issued will be completely converted into equity/ordinary shares by 2027 as per the following schedule: Year 9th Year 10th Year 11th Year 12th 2024 2025 2026 2027 Percentage of TFC converted 25% 25% 25% 25% The Conversion shall be held on the 20th Day of December each year at a discount of 5% to the last six months weighted average price of the company shares at Karachi Stock Exchange Limited (Now Pakistan Stock Exchange Limited) b) The Mark-up rate effective from the date of Commissioning is 3 Month KIBOR payable in quarterly arrears. c) The principal repayment is made in 41 quarterly installments commencing from 31 March 2016 and ending on 31 December 2025 as per repayment schedule. 18
d) The loan is secured by a mortgage by deposit of title deeds of the Mortgaged Properties, a charge by way of hypothecation over Hypothecated Assets, pledge of the pledged shares, and personal guarantees of the sponsors. 12.1.1 Overdue portion of liability represents the instalments duly deposited by company as per arrangement in a designated bank accounts maintained with Faysal Bank Limited for the purpose but Pak Kuwait Investment Company (Private) Limited has not accepted the payment. Management of the company as per arrangement can't withdraw amounts once deposited in the designate bank account. 13 CONTINGENCIES AND COMMITMENTS 13.1 Contingencies 13.1.1 The company is not exposed to any contingent liability in respect of syndicated loan at the balance sheet date, in view of restructuring agreement - Note 12. 13.2 Commitments (Un-Audited) Rupees (Audited) June 30, Rupees Capital commitments 52,647,840 52,647,840 Non-capital commitments 6,120,312 6,678,906 14 OTHER OPERATING INCOME 19,245,569 5,619,964 Other operating income includes Rs. 17,913,835/- (2016 : Nil ) as one time special grant from directors to compensate for the unrecoverable advances as mentioned in note 6.2.1. 15 TRANSACTIONS WITH RELATED AND ASSOCIATED PARTIES Related parties include associated companies, directors of the company, companies where directors also hold directorship, related group companies, key management personnel, staff retirement funds and entities over which directors are able to exercise influence. All transactions involving related parties arising in the normal course of business are conducted at commercial terms and conditions, and at prices agreed based on inter company prices using admissible valuation modes, i.e. comparable uncontrolled price method except short term loan which are unsecured and interest free. There are no transactions with the key management personnel other than under their terms of employment / entitlements. Transactions with related parties and associated undertakings, other than those disclosed elsewhere in these financial statements, are follows: - (Un-Audited) (Audited) June 30, Rupees Rupees Associated undertakings: Issuance of shares - 67,500,000 Advance received for / (adjusted against) issuance of shares - (67,500,000) 19
(Un-Audited) Rupees (Audited) June 30, Rupees Key management personnel: Issuance of shares - 261,003,168 (Adjusted against) / Received from Directors/sponsors (17,913,835) 66,702,782 Advance received for/(adjusted against) issuance of shares - (261,003,168) Special grant received from directors 17,913,835 - Advance for issuance of shares - unsecured of Rs. 358,100,019/- and Short term borrowings - unsecured of Rs. 94,481,181/- is due to associated undertakings and related parties. 16 DATE OF AUTHORIZATION FOR ISSUE The financial statements were authorized for issue on April 24, by the board of directors of the company. 17 GENERAL Figures in the financial statements have been rounded-off to the nearest rupees except where stated otherwise. Chief Executive Officer Chief Financial Officer Director 20