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Interim Financial Report

for the nine months ended September 30, 2015

Pak Elektron Limited

CONTENTS

Corporate InformationDirectors’ Review

STAKEHOLDERS’ INFORMATION

Condensed Interim Consolidated Balance SheetCondensed Interim Consolidated Profit and Loss Account / Statement of Comprehensive IncomeCondensed Interim Consolidated Cash Flow StatementCondensed Interim Consolidated Statement of Changes in EquityCondensed Interim Notes to the Consolidated Financial Information

CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION

091011

CONDENSED INTERIM SEPARATE FINANCIAL INFORMATION

Condensed Interim Balance SheetCondensed Interim Profit and Loss Account / Statement of Comprehensive IncomeCondensed Interim Cash Flow StatementCondensed Interim Statement of Changes in EquityCondensed Interim Notes to the Financial Information

232425

CONTENTS

Corporate InformationDirectors’ Review

STAKEHOLDERS’ INFORMATION

Condensed Interim Consolidated Balance SheetCondensed Interim Consolidated Profit and Loss Account / Statement of Comprehensive IncomeCondensed Interim Consolidated Cash Flow StatementCondensed Interim Consolidated Statement of Changes in EquityCondensed Interim Notes to the Consolidated Financial Information

CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION

091011

CONDENSED INTERIM SEPARATE FINANCIAL INFORMATION

Condensed Interim Balance SheetCondensed Interim Profit and Loss Account / Statement of Comprehensive IncomeCondensed Interim Cash Flow StatementCondensed Interim Statement of Changes in EquityCondensed Interim Notes to the Financial Information

232425

Pak Elektron Limited | Interim Financial Report September 30, 2015

Board of Directors

Audit Committee

Company Secretary

Chief Financial Officer

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

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

Mr. Usman Shahid

Mr. Khalid Siddiq Tirmizey

Director - BOP Nominee U/S 182 of the Ordinance/Non Executive

Mr. Munaf IbrahimDirector - Independent

Mr. M. Azam Saigol

Chairman/Member

Mr. Usman Shahid

Member

Mr. Haroon Ahmad KhanMember

Muhammad Omer Farooq

Syed Manzar Hassan, FCA

HR & Remuneration Committee

Auditors

Legal Advisor

Share Registrar

Bankers

Mr. M. Azam Saigol

Chairman/Member

Member

Syed Manzar HassanMember

M/s Rahman Sarfaraz Rahim Iqbal Rafiq Chartered Accountants

M/s Hassan & Hassan Advocates

Corplink (Private) Limited

Wings Arcade, 1-K Commercial Model Town, Lahore.

Tel: 042-35839182, 35887262

Fax: 042-35869037

Albaraka Islamic Bank

Askari Bank Limited

Bank Alfalah Limited

Bank of Khyber

Bank of Punjab

Burj Bank Limited

Faysal Bank Limited

Bank Islami Pakistan

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

CORPORATE INFORMATION DIRECTORS’ REVIEW

Registered Office

Transformer Facility

Karachi

Islamabad

17-Aziz Avenue, Canal Bank, Gulberg V, Lahore.

Tel: 042-35718274-6

Fax: 042-35762707

Email: [email protected]

14-K.M. Ferozepur Road, Lahore.

Tel: 042-35920151-9 (9 Lines)

34-K.M. Ferozepur Road, Keath Village, Lahore.

Tel: 042-35935151-2

Kohinoor Building, 25-West Wharf Road, Karachi.

Tel: 021-32200951-4

Fax: 021-32310303

Room # 301, 3rd Floor, Green Trust Tower, Blue Area, Islamabad.

Tel: 051-2824543, 2828941

Fax: 051-2273858

206, No. 1007, Zhong Shan Naun Er Road, Shanghai, China.

Tel: 86-21-64567713

Fax: 86-21-54109971

Nine month ended up to Rupees in thousandsSeptember 30, 2015 September 30, 2014

Increase /(Decrease)

Gross Profit

Profit before tax

Profit after tax

Earnings per share - Rupees

21,956,250

6,119,251

3,170,490

2,660,427

18,507,755

4,839,566

1,931,982

1,614,204

3,448,495

1,279,685

1,238,508

1,046,223

Dear Shareholders

Your directors are pleased to present the un-audited interim financial information of the Company for the nine months period ended September 30, 2015. The Company has registered positive sales growth of 18.63% as compared to the corresponding period of last year. In absolute terms, sales revenue was reported at Rs. 21.956 billion against Rs.18.508 billion of the corresponding period of last year. The company continued to make center of its efforts on disciplined cost management which resulted in gross profit expansion to Rs.1.280 billion. The positive improvement in the gross margin has trickled down to the bottom line resulting in enhanced net profit after tax & Earnings per share. Profit after tax achieved is Rs. 2.660 billion against Rs.1.614 billion of the respective period of last year, showing a growth of 64.81 %. EPS achieved is Rs. 6.60 as compared to Rs. 4.52 of corresponding period of last year showing a growth of 46.02%.

Summarized results are as below:

During the period under review, overall economy of the country has illustrated a growing trend. In the wake of the energy crisis, and the need for investment in distribution network besides generation, the present government is expected to remain steadfast in providing a feasible market business atmosphere in the country.

The Company continued to surpass its previous records in the nine months ended September 30, 2015 against comparative volume of previous corresponding period. Appliances Division has achieved sales of Rs 12.762 billion against sale of Rs.10.572 billion of corresponding period of last year. Robust marketing and advertising strategies, persistent cost cutting focus and major R & D initiatives have been the main drivers of consistent growth in appliances division. Sales have also grown up for deep freezers and split ACs. PEL Deep Freezer is well received among the corporate customers as well as at domestic level. Customization according to the requirement of the corporate customer is the Strength of PEL. By following international standards & Protocols, Product Quality and Strong After sales Service, PEL has created strong Good will with Customers Like Unilever (Walls), Engro Foods (O'more), Pakistan Dairies (Igloo) and PEPSI etc. PEL split A.C is well received in market due to its durability, quality, brand equity and after sales services backup. To sum up, there has been a moderate growth of home appliances products produced by the company during this period.

Power Division sales have witnessed a decent growth against the prior period, primarily on the back of higher number of sales orders from WAPDA and EPC division. Sales achieved during the period are Rs. 9.194 billion i.e. 16 % higher as compared to the corresponding period of previous year. The Company's strategic focus to cater the demand pertaining to expansion requirement & strengthening of distribution network and infrastructure in the country is main driver of the volumetric growth in orders. This has also enabled the Company to secure a market leading position in the production of Distribution Transformer, Power Transformer, Switch Gear and as an EPC Contractor.

In the wake of the above-mentioned factors, the Company aims to operate at its optimal efficiency to achieve further growth by employing working capital management, cost containment measures and improved processes.

APPLIANCES DIVISION

POWER DIVISION

Board of Directors

Audit Committee

Company Secretary

Chief Financial Officer

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

Syed Manzar Hassan

Director - Executive

Director - NIT Nominee/Independent

Mr. Wajahat A. Baqai

Mr. Akbar Hassan Khan

Mr. Usman Shahid

Mr. Khalid Siddiq Tirmizey

Director - BOP Nominee U/S 182 of the Ordinance/Non Executive

Mr. Munaf IbrahimDirector - Independent

Mr. M. Azam Saigol

Chairman/Member

Mr. Usman Shahid

Member

Mr. Haroon Ahmad KhanMember

Muhammad Omer Farooq

Syed Manzar Hassan, FCA

HR & Remuneration Committee

Auditors

Legal Advisor

Share Registrar

Bankers

Mr. M. Azam Saigol

Chairman/Member

Member

Syed Manzar HassanMember

M/s Rahman Sarfaraz Rahim Iqbal Rafiq Chartered Accountants

M/s Hassan & Hassan Advocates

Corplink (Private) Limited

Wings Arcade, 1-K Commercial Model Town, Lahore.

Tel: 042-35839182, 35887262

Fax: 042-35869037

Albaraka Islamic Bank

Askari Bank Limited

Bank Alfalah Limited

Bank of Khyber

Bank of Punjab

Burj Bank Limited

Faysal Bank Limited

Bank Islami Pakistan

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

CORPORATE INFORMATION DIRECTORS’ REVIEW

Registered Office

Transformer Facility

Karachi

Islamabad

17-Aziz Avenue, Canal Bank, Gulberg V, Lahore.

Tel: 042-35718274-6

Fax: 042-35762707

Email: [email protected]

14-K.M. Ferozepur Road, Lahore.

Tel: 042-35920151-9 (9 Lines)

34-K.M. Ferozepur Road, Keath Village, Lahore.

Tel: 042-35935151-2

Kohinoor Building, 25-West Wharf Road, Karachi.

Tel: 021-32200951-4

Fax: 021-32310303

Room # 301, 3rd Floor, Green Trust Tower, Blue Area, Islamabad.

Tel: 051-2824543, 2828941

Fax: 051-2273858

206, No. 1007, Zhong Shan Naun Er Road, Shanghai, China.

Tel: 86-21-64567713

Fax: 86-21-54109971

Nine month ended up to Rupees in thousandsSeptember 30, 2015 September 30, 2014

Increase /(Decrease)

Gross Profit

Profit before tax

Profit after tax

Earnings per share - Rupees

21,956,250

6,119,251

3,170,490

2,660,427

18,507,755

4,839,566

1,931,982

1,614,204

3,448,495

1,279,685

1,238,508

1,046,223

Dear Shareholders

Your directors are pleased to present the un-audited interim financial information of the Company for the nine months period ended September 30, 2015. The Company has registered positive sales growth of 18.63% as compared to the corresponding period of last year. In absolute terms, sales revenue was reported at Rs. 21.956 billion against Rs.18.508 billion of the corresponding period of last year. The company continued to make center of its efforts on disciplined cost management which resulted in gross profit expansion to Rs.1.280 billion. The positive improvement in the gross margin has trickled down to the bottom line resulting in enhanced net profit after tax & Earnings per share. Profit after tax achieved is Rs. 2.660 billion against Rs.1.614 billion of the respective period of last year, showing a growth of 64.81 %. EPS achieved is Rs. 6.60 as compared to Rs. 4.52 of corresponding period of last year showing a growth of 46.02%.

Summarized results are as below:

During the period under review, overall economy of the country has illustrated a growing trend. In the wake of the energy crisis, and the need for investment in distribution network besides generation, the present government is expected to remain steadfast in providing a feasible market business atmosphere in the country.

The Company continued to surpass its previous records in the nine months ended September 30, 2015 against comparative volume of previous corresponding period. Appliances Division has achieved sales of Rs 12.762 billion against sale of Rs.10.572 billion of corresponding period of last year. Robust marketing and advertising strategies, persistent cost cutting focus and major R & D initiatives have been the main drivers of consistent growth in appliances division. Sales have also grown up for deep freezers and split ACs. PEL Deep Freezer is well received among the corporate customers as well as at domestic level. Customization according to the requirement of the corporate customer is the Strength of PEL. By following international standards & Protocols, Product Quality and Strong After sales Service, PEL has created strong Good will with Customers Like Unilever (Walls), Engro Foods (O'more), Pakistan Dairies (Igloo) and PEPSI etc. PEL split A.C is well received in market due to its durability, quality, brand equity and after sales services backup. To sum up, there has been a moderate growth of home appliances products produced by the company during this period.

Power Division sales have witnessed a decent growth against the prior period, primarily on the back of higher number of sales orders from WAPDA and EPC division. Sales achieved during the period are Rs. 9.194 billion i.e. 16 % higher as compared to the corresponding period of previous year. The Company's strategic focus to cater the demand pertaining to expansion requirement & strengthening of distribution network and infrastructure in the country is main driver of the volumetric growth in orders. This has also enabled the Company to secure a market leading position in the production of Distribution Transformer, Power Transformer, Switch Gear and as an EPC Contractor.

In the wake of the above-mentioned factors, the Company aims to operate at its optimal efficiency to achieve further growth by employing working capital management, cost containment measures and improved processes.

APPLIANCES DIVISION

POWER DIVISION

DIRECTORS’ REVIEW

CONDENSED INTERIM

CONSOLIDATED FINANCIAL INFORMATION

M. MURAD SAIGOL

Chief Executive Officer

on behalf of the Board of Directors

LahoreOctober 27, 2015

FUTURE OUTLOOK

The macroeconomic outlook looks positive for Pakistan with electricity self-sufficiency being one of the top priorities for the present Government. There are a lot of untapped market opportunities for PEL.On the appliances front, the company has built its brand equity in the past years out of which the company is likely to continue to derive monetary benefits in the form of higher revenue generation in the future.

Prevailing market statistics and PEL's strategic market presence depict national and international opportunities to focus during the fourth quarter of the year, primarily in the power division. The adoption of underground electrification throughout the country, augmentation of Transmission and Distribution sector and export opportunities will enable us to continue the upward trajectory in financial and operational growth of the company and economy as a whole.

We take this opportunity to thank all our stakeholders for their patronage and look forward to their continued support.

DIRECTORS’ REVIEW

CONDENSED INTERIM

M. MURAD SAIGOL

Chief Executive Officer

on behalf of the Board of Directors

LahoreOctober 27, 2015

FUTURE OUTLOOK

The macroeconomic outlook looks positive for Pakistan with electricity self-sufficiency being one of the top priorities for the present Government. There are a lot of untapped market opportunities for PEL.On the appliances front, the company has built its brand equity in the past years out of which the company is likely to continue to derive monetary benefits in the form of higher revenue generation in the future.

Prevailing market statistics and PEL's strategic market presence depict national and international opportunities to focus during the fourth quarter of the year, primarily in the power division. The adoption of underground electrification throughout the country, augmentation of Transmission and Distribution sector and export opportunities will enable us to continue the upward trajectory in financial and operational growth of the company and economy as a whole.

We take this opportunity to thank all our stakeholders for their patronage and look forward to their continued support.

CONDENSED INTERIM

CONSOLIDATED BALANCE SHEET

AS AT SEPTEMBER 30, 2015

M. MURAD SAIGOLChief Executive Officer

HAROON A. KHANDirector

(Un-Audited) (Audited)

September 302015

December 312014Rupees in thousands

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Authorized Capital 4

Issued, subscribed and paid up capital 5

Reserves

Unappropriated profit

SURPLUS ON REVALUATION

NON-CURRENT LIABILITIES

Redeemable Capital 6

Long-term financing 7

Liabilities against assets subject to finance lease 8

Deferred taxation

Deferred income

CURRENT LIABILITIES

Trade and other payables

Interest/ mark-up accrued on loans and payables

Short-term borrowings 9

Current Portion of Non Current Liabilities:

Long term loans

Liabilities against assets subject finance lease

Contingencies and Commitments 10

6,000,000

4,431,029

1,293,858

8,118,008

13,842,895

4,412,331

4,061,112

1,809,163

96,876

2,012,183

43,465

891,526

485,619

4,848,986

2,054,765

72,996

8,353,892

34,631,917

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

881,429

500,528

4,243,261

1,462,760

60,395

7,148,373

32,526,664

September 302015

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 11

Intangible assets

Long-term investments 12

Long-term deposits

CURRENT ASSETS

Stores, spare parts and loose tools

Stock-in-trade

Trade debts

Advances

Trade deposits and short-term prepayments

Other receivables

Other financial assets

Income tax refundable

Cash and bank balances

14,096,816

340,397

14,437,213

75,163

188,191

491,047

7,648,338

8,861,982

1,346,626

991,573

185,542

19,354

11,140

375,749

19,931,350

34,631,917

14,466,890

344,008

14,810,898

63,890

192,808

462,140

6,316,868

7,702,272

1,256,100

853,209

187,730

21,596

319,067

340,086

17,459,068

32,526,664

The annexed notes from 1 to 18 form an integral part of this condensed interim consolidated financial information.

CONDENSED INTERIM

CONSOLIDATED BALANCE SHEET

September 302015

Authorized Capital 4

Issued, subscribed and paid up capital 5

Reserves

Redeemable Capital 6

Long-term financing 7

Liabilities against assets subject to finance lease 8

Deferred taxation

Deferred income

CURRENT LIABILITIES

Short-term borrowings 9

Long term loans

Contingencies and Commitments 10

6,000,000

4,431,029

1,293,858

8,118,008

13,842,895

4,412,331

4,061,112

1,809,163

96,876

2,012,183

43,465

891,526

485,619

4,848,986

2,054,765

72,996

8,353,892

34,631,917

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

881,429

500,528

4,243,261

1,462,760

60,395

7,148,373

32,526,664

September 302015

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 11

Intangible assets

Long-term investments 12

Long-term deposits

CURRENT ASSETS

Stores, spare parts and loose tools

Stock-in-trade

Trade debts

Advances

Trade deposits and short-term prepayments

Other receivables

Other financial assets

Income tax refundable

Cash and bank balances

14,096,816

340,397

14,437,213

75,163

188,191

491,047

7,648,338

8,861,982

1,346,626

991,573

185,542

19,354

11,140

375,749

19,931,350

34,631,917

14,466,890

344,008

14,810,898

63,890

192,808

462,140

6,316,868

7,702,272

1,256,100

853,209

187,730

21,596

319,067

340,086

17,459,068

32,526,664

1,931,982

1,626,894

3,558,876(2,319,644)

1,239,232

(1,965,743)

(6,199)(170,064)

(2,142,006)

(902,774)

(243,980)

109,797

(50,219)

(44,536)

(228,938)

1,702,386

(61,631)(489,075)

1,151,68019,968

277,804

297,772

(Un-Audited)

September 302015

September 302014Rupees in thousands

21,956,250

3,149,331

18,806,919

12,687,668

6,119,251

25,978

6,145,229

971,678

568,360

109,389

1,321,367

(3,946)

3,170,490

510,062

2,660,427

18,507,755

2,805,571

15,702,184

10,862,618

4,839,566

15,967

4,855,533

913,206

526,396

60,913

1,417,916

(5,120)

1,931,982

317,778

1,614,204

Gross Sales

Sales Tax and discount

Net Sales

Cost of Sales 14

Gross Profit

Other Operating Income

Distribution Cost

Administrative Cost

Other Operating Expenses

Finance Cost

Share of (loss) / profit of associate

Profit Before Tax

Provision for Taxation

Profit after taxation

Other Comprehensive income

Total the period

Comprehensive income for

Earnings per share - Rupees Basic & diluted 15

September 302014

September 302015

5,846,260

863,9804,982,280

3,539,6841,442,596

1,452,302

299,336

151,547

23,078

377,400

(1,230)

599,712

66,179

533,532

5,440,378

823,843

4,616,535

3,242,187

1,374,348

1,374,964

287,679

182,666

18,325

382,064

504,991

48,829

456,162

Nine months ended Quarter Ended

September 302014

September 302015

CONDENSED INTERIM

CONSOLIDATED PROFIT AND LOSS ACCOUNT / STATEMENT OF COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 (Un-Audited)

Rupees in thousands

CONDENSED INTERIM

CONSOLIDATED CASH FLOW STATEMENT

Cash flows from operating activities

Profit before taxation

Adjustments for non cash and other items

Cash generated from operations before working capital changesWorking capital changes

Cash generated from operations

Finance cost paidCompensated absence paidIncome tax paid

Net cash generated / used in operating activities

Cash flows from investing activitiesPurchase of property, plant and equipmentProceeds from disposal of property, plant and equipmentPurchase of other financial assets(Increase) / decrease in long-term deposits

Net cash used in investing activities

Cash flows from financing activitiesIncrease / (Decrease) in Long Term FinancingIncrease/ (Decrease) in liabilities against finance leaseIncrease / (Decrease) in Short Term BorrowingNet cash (used in) / generated from financing activitiesNet increase in cash and cash equivalentsCash and cash equivalents at beginning of the period

Cash and cash equivalents at end of the period

3,170,490

1,873,159

5,043,649

(3,138,497)

1,905,152

(1,336,276)(9,163)

(178,926)

(1,524,365)

380,787

(222,812)

73,061

-4,617

(145,134)

(806,996)

605,725

(199,990)35,663

340,086

375,749

(Un-Audited)

1,931,982

1,626,894

3,558,876(2,319,644)

1,239,232

(1,965,743)

(6,199)(170,064)

(2,142,006)

(902,774)

(243,980)

109,797

(50,219)

(44,536)

(228,938)

1,702,386

(61,631)(489,075)

1,151,68019,968

277,804

297,772

(Un-Audited)

September 302015

21,956,250

3,149,331

18,806,919

12,687,668

6,119,251

25,978

6,145,229

971,678

568,360

109,389

1,321,367

(3,946)

3,170,490

510,062

2,660,427

18,507,755

2,805,571

15,702,184

10,862,618

4,839,566

15,967

4,855,533

913,206

526,396

60,913

1,417,916

(5,120)

1,931,982

317,778

1,614,204

Gross Sales

Sales Tax and discount

Net Sales

Cost of Sales 14

Gross Profit

Other Operating Income

Distribution Cost

Administrative Cost

Other Operating Expenses

Finance Cost

Share of (loss) / profit of associate

Profit Before Tax

Provision for Taxation

Profit after taxation

Other Comprehensive income

Total the period

Comprehensive income for

Earnings per share - Rupees Basic & diluted 15

September 302014

September 302015

5,846,260

863,9804,982,280

3,539,6841,442,596

1,452,302

299,336

151,547

23,078

377,400

(1,230)

599,712

66,179

533,532

5,440,378

823,843

4,616,535

3,242,187

1,374,348

1,374,964

287,679

182,666

18,325

382,064

504,991

48,829

456,162

September 302014

September 302015

CONDENSED INTERIM

CONSOLIDATED PROFIT AND LOSS ACCOUNT / STATEMENT OF COMPREHENSIVE INCOME

Rupees in thousands

CONDENSED INTERIM

CONSOLIDATED CASH FLOW STATEMENT

Adjustments for non cash and other items

Cash generated from operations before working capital changesWorking capital changes

Finance cost paidCompensated absence paidIncome tax paid

Net cash generated / used in operating activities

Cash flows from investing activitiesPurchase of property, plant and equipmentProceeds from disposal of property, plant and equipmentPurchase of other financial assets(Increase) / decrease in long-term deposits

Cash flows from financing activitiesIncrease / (Decrease) in Long Term FinancingIncrease/ (Decrease) in liabilities against finance leaseIncrease / (Decrease) in Short Term BorrowingNet cash (used in) / generated from financing activitiesNet increase in cash and cash equivalentsCash and cash equivalents at beginning of the period

3,170,490

1,873,159

5,043,649

(3,138,497)

1,905,152

(1,336,276)(9,163)

(178,926)

(1,524,365)

380,787

(222,812)

73,061

-4,617

(145,134)

(806,996)

605,725

(199,990)35,663

340,086

375,749

(Un-Audited)

Share capital TotalRupees in thousands

Premium on

issue of shares

Capital reserves Revenue reserves

CONDENSED INTERIM

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

NOTES TO THE CONDENSED INTERIM

Balance as at December 31, 2013 (Audited)

Total comprehensive income for the period

Issue of bonus shares

Incremental depreciation

Balance as at September 30, 2014 (Un-Audited)

Issue of right ordinary shares

Total comprehensive income for the period.

3,130,689

268,111

3,398,800

1,032,229

4,431,029

529,740

(268,111)

261,629

1,032,229

1,293,858

2,885,041

1,614,204

159,336

4,658,581

627,265

15,708

5,301,554

2,660,427

156,027

8,118,008

6,545,470

1,614,204

159,336

8,319,010

627,265

2,064,458

15,708

11,026,441

2,660,427

156,027

13,842,895

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 (Un-Audited)

1 REPORTING ENTITY

2 BASIS OF PREPARATION

The group comprises of the following companies

Parent Company

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. PEL is currently listed on all three Stock Exchanges of Pakistan. The principal activity of PEL is manufacturing and sale of electrical capital goods and domestic appliances.

PEL is currently organized into two main operating divisions - Power Division & Appliances Division. PEL's activities are as follows:

Power Division: manufacturing and distribution of transformers, switchgears, energy meters, power transformers, construction of grid stations and equipment procurement and construction (EPC).

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) was incorporated in Pakistan on August 11, 2011 as a private limited company under the companies ordinance 1984. Registered office of PMPL is situated at 17 Aziz Avenue, canal bank Gulberg V, Lahore. The principal activity of PMPL is sale of electrical capital goods and domestic appliances. PMPL is wholly owned subsidiary of PEL.

This interim consolidated financial information is not audited and has been presented in condensed form and does not include all the information and disclosures as are required to be provided or made in a full set of annual financial statements. This condensed interim consolidated financial information should be read in conjunction with the audited financial statements of the Group for the year ended December 31, 2014.

The comparative interim consolidated balance sheet as at December 31, 2014 and the related notes to the condensed interim consolidated financial information are based on audited financial statements. The comparative interim consolidated profit and loss account/statement of comprehensive income, interim consolidated cash flow statement, interim consolidated statement of changes in equity and related notes to the condensed interim consolidated financial information for the nine months ended September 30, 2014 are based on unaudited interim financial information.

2.1 Statement of compliance

This condensed interim consolidated financial information has been prepared in accordance with the requirements of 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 and directives issued under the Companies Ordinance, 1984 have been followed.

Premium on

issue of shares

CONDENSED INTERIM

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

3,130,689

268,111

3,398,800

1,032,229

4,431,029

529,740

(268,111)

261,629

1,032,229

1,293,858

2,885,041

1,614,204

159,336

4,658,581

627,265

15,708

5,301,554

2,660,427

156,027

8,118,008

6,545,470

1,614,204

159,336

8,319,010

627,265

2,064,458

15,708

11,026,441

2,660,427

156,027

13,842,895

1 REPORTING ENTITY

The group comprises of the following companies

Parent Company

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. PEL is currently listed on all three Stock Exchanges of Pakistan. The principal activity of PEL is manufacturing and sale of electrical capital goods and domestic appliances.

PEL is currently organized into two main operating divisions - Power Division & Appliances Division. PEL's activities are as follows:

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) was incorporated in Pakistan on August 11, 2011 as a private limited company under the companies ordinance 1984. Registered office of PMPL is situated at 17 Aziz Avenue, canal bank Gulberg V, Lahore. The principal activity of PMPL is sale of electrical capital goods and domestic appliances. PMPL is wholly owned subsidiary of PEL.

This interim consolidated financial information is not audited and has been presented in condensed form and does not include all the information and disclosures as are required to be provided or made in a full set of annual financial statements. This condensed interim consolidated financial information should be read in conjunction with the audited financial statements of the Group for the year ended December 31, 2014.

The comparative interim consolidated balance sheet as at December 31, 2014 and the related notes to the condensed interim consolidated financial information are based on audited financial statements. The comparative interim consolidated profit and loss account/statement of comprehensive income, interim consolidated cash flow statement, interim consolidated statement of changes in equity and related notes to the condensed interim consolidated financial information for the nine months ended September 30, 2014 are based on unaudited interim financial information.

This condensed interim consolidated financial information has been prepared in accordance with the requirements of 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 and directives issued under the Companies Ordinance, 1984 have been followed.

4. AUTHORIZED CAPITAL

500,000,000 500,000,000 5,000,000 5,000,000

62,500,000 62,500,000 625,000 625,000

37,500,000 37,500,000 375,000 375,000

100,000,000 100,000,000 1,000,000 1,000,000

600,000,000 600,000,000 6,000,000 6,000,000

September 302015

December 312014

Number of shares Rupees in thousands

September 302015

December 312014

(Un-audited) (Audited) (Audited)(Un-audited)

Ordinary shares of Rs. 10/- each

‘A’ class preference shares of Rs. 10 each

‘B’ class preference shares of Rs. 10 each

2.2 Basis of measurement

This condensed interim consolidated financial information has been prepared under the historical cost convention except for property, plant and equipment at revalued amounts and certain financial instruments at fair value/amortized cost. In this financial information, except for the amounts reflected in the statement of cash flows, all transactions have been accounted for on accrual basis.

2.3 Functional currency

This financial information is prepared in Pak Rupees which is the Group's functional currency.

The accounting policies and the methods of computation adopted in the preparation of this condensed interim financial information are the same as those applied in the preparation of the financial statements for the year ended December 31, 2014.

3 ACCOUNTING POLICIES AND METHODS OF COMPUTATION

6 REDEEMABLE CAPITAL

Long term finances

Short term borrowing

Paid during the period/year

Less : Current maturity

As at beginning of the period/ year

Issued during the period /year against:

2,464,286

2,103,438

1,062,252

3,165,690

803,507

5,629,976

425,326

1,143,538

4,061,112 4,826,469 As at end of the period / Year

Debt equity swap transaction agreed between the group and National Bank of Pakistan (NBP) whereby 40 Million ordinary shares were supposed to be issued by the company to redeem the outstanding Privately Placed Term Finance certificate (PPTFC) has been withdrawn. PPTFC shall be redeemed as per the redemption plan mutually agreed between PEL and NBP.

5 ISSUED, SUBSCRIBED AND PAID UP CAPITAL

273,214,754 273,214,754 Issued for cash

Other than cash:

2,732,148

137,500 137,500 - against machinery 1,375

408,273 408,273 - issued on acquisition of PELAppliances Limited 4,083

6,040,820

6,040,820 - issued against conversion of

preference shares 60,408 118,343,841 118,343,841 - as bonus shares 1,183,439

398,145,188 398,145,188 3,981,453

Fully paid A class preference shares ofRs. 10 each

44,957,592 44,957,592 In cash 449,576

443,102,780 443,102,780

2,732,148

60,408

1,183,439

3,981,453

449,576

4,431,029 4,431,029

September 302015

December 312014

September 302015

December 312014

Ordinary shares of Rs. 10 eachfully paid

500,000,000 500,000,000 5,000,000 5,000,000

62,500,000 62,500,000 625,000 625,000

37,500,000 37,500,000 375,000 375,000

100,000,000 100,000,000 1,000,000 1,000,000

600,000,000 600,000,000 6,000,000 6,000,000

September 302015

December 312014

September 302015

December 312014

This condensed interim consolidated financial information has been prepared under the historical cost convention except for property, plant and equipment at revalued amounts and certain financial instruments at fair value/amortized cost. In this financial information, except for the amounts reflected in the statement of cash flows, all transactions have been accounted for on accrual basis.

This financial information is prepared in Pak Rupees which is the Group's functional currency.

3 ACCOUNTING POLICIES AND METHODS OF COMPUTATION

Long term finances

Less : Current maturity

2,464,286

2,103,438

1,062,252

3,165,690

803,507

5,629,976

425,326

1,143,538

Debt equity swap transaction agreed between the group and National Bank of Pakistan (NBP) whereby 40 Million ordinary shares were supposed to be issued by the company to redeem the outstanding Privately Placed Term Finance certificate (PPTFC) has been withdrawn. PPTFC shall be redeemed as per the redemption plan mutually agreed between PEL and NBP.

273,214,754 273,214,754 Issued for cash

Other than cash:

2,732,148

6,040,820

398,145,188 398,145,188 3,981,453

44,957,592 44,957,592 In cash 449,576

443,102,780 443,102,780

2,732,148

60,408

1,183,439

3,981,453

449,576

4,431,029 4,431,029

September 302015

December 312014

September 302015

December 312014

11.1.1 Additions during the period / year

Plant and machinery 193,955 330,587

Office equipment and furniture 6,456 3,738

Computer hardware and allied items 16,002 10,912

Vehicles 36,477 58,757

252,890 403,994

7 LONG-TERM FINANCING - SECURED

3,102,060 3,628,291 Obtained during the period / year 1,562,633 1,850,000

Paid / settled during the period / year 1,944,303

2,376,231

Current portion 911,227

Rupees in thousandsSeptember 30

2015December 31

(Un-audited) (Audited)

659,253

1,809,163

2,442,807

8 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE

Present value of minimum lease payments 169,872

135,110

Current maturity 72,996

60,395

96,876

74,715

9 SHORT TERM BORROWING

10 CONTINGENCIES AND COMMITMENTS

These facilities have been obtained from various banks under mark-up arrangements for working capital requirements. These facilities are secured against the pledge/hypothecation of raw material and components, work-in-process, finished goods, machinery, spare parts, charge over book debts, shares of public companies and other assets of the company.

There is no material changes in contingencies and commitments as disclosed in the notes to the financial statements for the year ended December 31, 2014.

11 PROPERTY, PLANT AND EQUIPMENT

Operating assets 11.1 14,033,670

14,407,147

Capital work-in-progress 63,146

59,743

14,096,816

14,466,890

11.1 Operating assets

Written down value at beginning of the period / year 14,407,147

14,764,490

Additions during the period / year 11.1.1 252,890 403,994

14,660,037 15,168,484

Written down value of the assets disposed off / adjustments

Depreciation charged during the period / year

73,061 10,109

553,306 751,228

14,033,670 14,407,147

2015December 31

55,740 -

50,219

SILK BANK LIMITED- un quoted

17,698,489 preference shares of Rs. 2.5 each

As at beginning of the period/year

Acquired during the period/year

Amortization for the period/year

As at end of the period/year 61,338

55,740

12 LONG-TERM INVESTMENTS

13,825 8,150

Other Investments 61,338 55,740

75,163 63,890

Kohinoor Power Company Limited

Ownership interest % 23.10 23.10

54,701

12,129

62,884

66,830

Cost of investment

2,910,600 shares (December 31, 2014: 2,910,600 shares)

Share of post acquisition profit- net of dividend received

Less: provision for impairment in value of investment 49,059

58,680

13,825

Investment in related parties - Quoted

Rupees in thousands

September 302015

December 312014

Vehicles 36,477 58,757

252,890 403,994

3,102,060 3,628,291 Obtained during the period / year 1,562,633 1,850,000

Paid / settled during the period / year 1,944,303

2,376,231

Current portion 911,227

2015December 31

659,253

1,809,163

2,442,807

135,110

60,395

96,876

74,715

9 SHORT TERM BORROWING

14,407,147

59,743

14,096,816

14,466,890

14,764,490

14,660,037 15,168,484

Written down value of the assets disposed off / adjustments

Depreciation charged during the period / year

73,061 10,109

553,306 751,228

14,033,670 14,407,147

2015December 31

55,740 -

50,219

SILK BANK LIMITED- un quoted

17,698,489 preference shares of Rs. 2.5 each

As at beginning of the period/year

Acquired during the period/year

Amortization for the period/year

As at end of the period/year 61,338

55,740

13,825 8,150

Other Investments 61,338 55,740

75,163 63,890

54,701

12,129

62,884

66,830

Cost of investment

2,910,600 shares (December 31, 2014: 2,910,600 shares)

Share of post acquisition profit- net of dividend received

58,680

13,825

Investment in related parties - Quoted

Rupees in thousands

September 302015

December 312014

13 REVENUE

Sales - local 19,967,034

18,167,298

4,241,468

5,370,157

Sales - export 1,989,216

340,457

1,604,792

70,221

21,956,250

18,507,755

5,846,260

5,440,378

Less: - sales tax and excise duty 2,501,317

1,985,693

644,757

685,484

- trade discounts 648,014

819,878

219,223

138,359

3,149,331

2,805,571

863,980

823,843

18,806,919

15,702,184

4,982,280

4,616,535

14 COST OF SALES

Raw material consumed 10,146,993

8,889,578

2,109,790

2,491,970

Direct wages 479,880

465,903

168,754

163,839

Factory overhead 1,386,611

1,343,628

441,614

439,703

12,013,484

10,699,109

2,720,158

3,095,512

Work-in-process

-at beginning of period 1,262,830

1,043,870

1,017,814

908,450

-at end of period (719,142)

(688,310)

(719,142)

(688,310)

543,688

355,560

298,672

220,140

Cost of goods manufactured 12,557,171 11,054,669 3,018,830 3,315,652

Finished goods

-at beginning of period 877,488 385,437 1,267,846 504,023

-at end of period (746,992) (577,488) (746,992) (577,488)

130,496 (192,051) 520,854 (73,465)

Cost of sales 12,687,668 10,862,618 3,539,684 3,242,187

Rupees in thousands

September 30

(Un-audited)

September 30

(Un-audited)

September 30

(Un-audited)

September 30

(Un-audited)

Earnings 2,660,427 1,614,204

Less: dividend on preference shares 32,032 32,032

2,628,395 1,582,172

Number of shares

398,145,188

349,840,423

398,145,188

Basic Profit per share (Rupees) 6.60

Weighted average number of ordinary shares.

EARNINGS PER SHARE - BASIC AND DILUTED

(Number)

Rupees in thousands

September 30

(Un-audited)

Six months ended

September 30

(Un-audited)

Basic and diluted Profit per share have been calculated through dividing Profit as stated above by weighted average number of ordinary shares.

32,846

Other related parties:

130,658

Key Management Personnel Short-term employee benefits

Post employment benefits

Associated companies Services acquired

Relationship Nature of transaction

16 TRANSACTIONS WITH RELATED PARTIES

Related parties from the Group's perspective comprise associated companies, post employment benefit plans and key management personnel. 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 employee benefits only. The Group in the normal course of business carries out various transactions with other related parties and continues to have a policy whereby all such transactions are carried out on commercial terms and conditions which are equivalent to those prevailing in an arm's length transaction.

Details of transactions with related parties are as follows:

Rupees in thousands

September 302015

September 302014

(Un-audited)

30,542

107,047

16.1 All transactions with related parties have been carried out on commercial terms and conditions.

13 REVENUE

18,167,298

4,241,468

5,370,157

340,457

1,604,792

70,221

21,956,250

18,507,755

5,846,260

5,440,378

1,985,693

644,757

685,484

- trade discounts 648,014

819,878

219,223

138,359

3,149,331

2,805,571

863,980

823,843

18,806,919

15,702,184

4,982,280

4,616,535

14 COST OF SALES

8,889,578

2,109,790

2,491,970

465,903

168,754

163,839

1,343,628

441,614

439,703

12,013,484

10,699,109

2,720,158

3,095,512

Work-in-process

1,043,870

1,017,814

908,450

(688,310)

(719,142)

(688,310)

543,688

355,560

298,672

220,140

Finished goods

-at beginning of period 877,488 385,437 1,267,846 504,023

-at end of period (746,992) (577,488) (746,992) (577,488)

130,496 (192,051) 520,854 (73,465)

Cost of sales 12,687,668 10,862,618 3,539,684 3,242,187

Rupees in thousands

September 30

(Un-audited)

September 30

(Un-audited)

September 30

(Un-audited)

September 30

(Un-audited)

Earnings 2,660,427 1,614,204

Less: dividend on preference shares 32,032 32,032

2,628,395 1,582,172

Number of shares

398,145,188

349,840,423

398,145,188

Basic Profit per share (Rupees) 6.60

Weighted average number of ordinary shares.

EARNINGS PER SHARE - BASIC AND DILUTED

(Number)

Rupees in thousands

September 30

(Un-audited)

Six months ended

September 30

(Un-audited)

Basic and diluted Profit per share have been calculated through dividing Profit as stated above by weighted average number of ordinary shares.

32,846

130,658

Key Management Personnel Short-term employee benefits

Associated companies Services acquired

Related parties from the Group's perspective comprise associated companies, post employment benefit plans and key management personnel. 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 employee benefits only. The Group in the normal course of business carries out various transactions with other related parties and continues to have a policy whereby all such transactions are carried out on commercial terms and conditions which are equivalent to those prevailing in an arm's length transaction.

Rupees in thousands

September 302015

September 302014

(Un-audited)

30,542

107,047

16.1 All transactions with related parties have been carried out on commercial terms and conditions.

CONDENSED INTERIM

FINANCIAL INFORMATION

17 DATE OF AUTHORIZATION FOR ISSUE

18 OTHERS

This condensed interim financial information has been approved by the Board of Directors of the Company and authorized for issue on October 27, 2015.

There are no other significant activities since December 31, 2014 affecting this condensed interim financial information.

CONDENSED INTERIM

18 OTHERS

CONDENSED INTERIM

BALANCE SHEET

Rupees in thousandsNote

September 302015

December 312014 Rupees in thousands

September 302015

December 312014

Authorized Capital

Issued, subscribed and paid up capital

Reserves

Redeemable Capital

Long-term financing

Liabilities against assets subject to finance lease

Deferred taxation

Deferred income

CURRENT LIABILITIES

Short-term borrowings

Long term loans

CONTIGENCIES AND COMMITMENTS 10

6,000,000

4,431,029

1,293,858

5,157,369

10,882,256

4,412,331

4,061,112

1,809,163

96,876

1,666,778

43,465

822,942

485,619

4,848,986

2,054,765

72,996

8,285,308

31,257,289

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

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 11 14,096,816 14,466,890

Intangible assets 340,397 344,008

14,437,213 14,810,898

Long-term investments 12 75,263 63,990

Long-term deposits 188,191 192,808

CURRENT ASSETS

Stores, spare parts and loose tools 491,047 462,140

Stock-in-trade 7,058,928 6,140,170

Trade debts 5,770,947 6,025,103

Advances 1,346,626 1,256,100

Trade deposits and short-term prepayments 991,573 853,209

Other receivables 185,543 187,730

Other financial assets 19,354 21,596

Income tax refundable 367,165 387,963

Cash and bank balances 325,440 287,935

16,556,623 15,621,946

31,257,289 30,689,642

The annexed notes from 1 to 18 form an integral part of this condensed interim financial information.

CONDENSED INTERIM

BALANCE SHEET

Rupees in thousandsNote

September 302015

December 312014 Rupees in thousands

September 302015

December 312014

Authorized Capital

Issued, subscribed and paid up capital

Reserves

Redeemable Capital

Long-term financing

Liabilities against assets subject to finance lease

Deferred taxation

Deferred income

CURRENT LIABILITIES

Short-term borrowings

Long term loans

CONTIGENCIES AND COMMITMENTS 10

6,000,000

4,431,029

1,293,858

5,157,369

10,882,256

4,412,331

4,061,112

1,809,163

96,876

1,666,778

43,465

822,942

485,619

4,848,986

2,054,765

72,996

8,285,308

31,257,289

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

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 11 14,096,816 14,466,890

Intangible assets 340,397 344,008

14,437,213 14,810,898

Long-term investments 12 75,263 63,990

Long-term deposits 188,191 192,808

CURRENT ASSETS

Stores, spare parts and loose tools 491,047 462,140

Stock-in-trade 7,058,928 6,140,170

Trade debts 5,770,947 6,025,103

Advances 1,346,626 1,256,100

Trade deposits and short-term prepayments 991,573 853,209

Other receivables 185,543 187,730

Other financial assets 19,354 21,596

Income tax refundable 367,165 387,963

Cash and bank balances 325,440 287,935

16,556,623 15,621,946

31,257,289 30,689,642

CONDENSED INTERIM

CASH FLOW STATEMENT

CONDENSED INTERIM

PROFIT AND LOSS ACCOUNT / STATEMENT OF COMPREHENSIVE INCOME

Gross Sales 13

16,132,326

13,991,401

Sales Tax and discount 13

2,501,317

2,126,693

Net Sales 13,631,009

11,864,708

Cost of Sales 14

10,683,985

9,494,139

Gross Profit 2,947,024

2,370,569

Other Operating Income 16,357

11,865

2,963,381

2,382,434

Distribution Cost 269,894

249,159

Administrative Cost 338,049

320,347

Other Operating Expenses 109,389

61,931

Finance Cost 896,920

949,177

Profit Before Taxation 1,349,129 801,820

Provision for Taxation 223,981

206,384

Profit For the year after Taxation 1,125,148 595,436

Other Comprehensive Income -

Total Comprehensive Income for the Period 1,125,148 595,436

Earnings per share Basic & diluted 15

3,718,763

644,757

3,074,006

2,362,955

711,051

714,899

62,977

102,628

23,078

306,784

219,432

20,155

199,277

4,473,032

826,484

3,646,548

2,829,212

817,336

820,982

97,945

137,904

18,091

332,815

234,227

89,787

144,440

September 30 September 30

2015 2014

Rupees in thousand

2015 2014

Adjustments for non cash items

Cash generated from operations before working capital changes

Working capital changes

Finance cost paid

Compensated absence paid

Income tax paid

Net cash generated from / (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) / decrease in long-term deposits

Cash flows from financing activities

Increase / (Decrease) in Long Term Financing

Increase/ (Decrease) in liabilities against finance lease

Increase / (Decrease) in Short Term Borrowing

Net cash from (used in) granted from financing activities

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of the period

1,349,129

1,446,793

2,795,922

(1,317,608) 1,478,314

(911,829)

(7,243)

(178,927)

(1,097,999)

380,315

(222,812)

73,061

(145,134)

(806,996)

608,039

(197,676)

37,505

287,935

325,440

September 302014

801,820

1,516,594

2,318,414

(1,233,110) 1,085,304

(1,855,443)

(6,198)

(170,064)

(2,031,705)

(946,401)

(243,980)

109,797

(50,219)

(44,536)

(228,938)

1,702,386

(61,632)

(476,967)

1,163,787

(11,552)

259,488

247,936

(Un-Audited) (Un-Audited)

CONDENSED INTERIM

CASH FLOW STATEMENT

CONDENSED INTERIM

PROFIT AND LOSS ACCOUNT / STATEMENT OF COMPREHENSIVE INCOME

Gross Sales 13

16,132,326

13,991,401

Sales Tax and discount 13

2,501,317

2,126,693

Net Sales 13,631,009

11,864,708

Cost of Sales 14

10,683,985

9,494,139

Gross Profit 2,947,024

2,370,569

Other Operating Income 16,357

11,865

2,963,381

2,382,434

Distribution Cost 269,894

249,159

Administrative Cost 338,049

320,347

Other Operating Expenses 109,389

61,931

Finance Cost 896,920

949,177

Profit Before Taxation 1,349,129 801,820

Provision for Taxation 223,981

206,384

Profit For the year after Taxation 1,125,148 595,436

Other Comprehensive Income -

Total Comprehensive Income for the Period 1,125,148 595,436

Earnings per share Basic & diluted 15

3,718,763

644,757

3,074,006

2,362,955

711,051

714,899

62,977

102,628

23,078

306,784

219,432

20,155

199,277

4,473,032

826,484

3,646,548

2,829,212

817,336

820,982

97,945

137,904

18,091

332,815

234,227

89,787

144,440

2015 2014

Rupees in thousand

2015 2014

Adjustments for non cash items

Cash generated from operations before working capital changes

Working capital changes

Finance cost paid

Compensated absence paid

Income tax paid

Net cash generated from / (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) / decrease in long-term deposits

Cash flows from financing activities

Increase / (Decrease) in Long Term Financing

Increase/ (Decrease) in liabilities against finance lease

Increase / (Decrease) in Short Term Borrowing

Net cash from (used in) granted from financing activities

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of the period

1,349,129

1,446,793

2,795,922

(1,317,608) 1,478,314

(911,829)

(7,243)

(178,927)

(1,097,999)

380,315

(222,812)

73,061

(145,134)

(806,996)

608,039

(197,676)

37,505

287,935

325,440

September 302014

801,820

1,516,594

2,318,414

(1,233,110) 1,085,304

(1,855,443)

(6,198)

(170,064)

(2,031,705)

(946,401)

(243,980)

109,797

(50,219)

(44,536)

(228,938)

1,702,386

(61,632)

(476,967)

1,163,787

(11,552)

259,488

247,936

(Un-Audited) (Un-Audited)

3,130,689

268,111

3,398,800

1,032,229

4,431,029

529,740

(268,111)

261,629

1,032,229

1,293,858

2,473,853

595,436

159,336

3,228,625

631,862

15,708

3,876,195

1,125,148

156,026

5,157,369

6,134,282

595,436

159,336

6,889,054

631,862

2,064,458

15,708

9,601,082

1,125,148

156,026

10,882,256

CONDENSED INTERIM

STATEMENT OF CHANGES IN EQUITY

Premium on

issue of shares

1 REPORTING ENTITY

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:

Appliances Division: manufacturing, assembling and distribution of refrigerators, air conditioners, microwave ovens and other home appliances.

This interim financial information is not audited and has been presented in condensed form and does not include all the information and disclosures as are required to be provided or made in a full set of annual financial statements. This condensed interim financial information should be read in conjunction with the audited financial statements of the company for the year ended December 31, 2014.

The comparative interim balance sheet as at December 31, 2014 and the related notes to the condensed interim financial information are based on audited financial statements. The comparative interim profit and loss account/statement of comprehensive income, interim cash flow statement, interim statement of changes in equity and related notes to the condensed interim financial information for the nine months ended September 30, 2014 are based on unaudited interim financial information.

This condensed interim financial information has been prepared in accordance with the requirements of 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 and directives issued under the Companies Ordinance, 1984 have been followed.

This condensed interim financial information has been prepared under the historical cost convention except for property, plant and equipment at revalued amounts and certain financial instruments at fair value/amortized cost. In this financial information, except for the amounts reflected in the statement of cash flows, all transactions have been accounted for on accrual basis.

3,130,689

268,111

3,398,800

1,032,229

4,431,029

529,740

(268,111)

261,629

1,032,229

1,293,858

2,473,853

595,436

159,336

3,228,625

631,862

15,708

3,876,195

1,125,148

156,026

5,157,369

6,134,282

595,436

159,336

6,889,054

631,862

2,064,458

15,708

9,601,082

1,125,148

156,026

10,882,256

CONDENSED INTERIM

STATEMENT OF CHANGES IN EQUITY

Premium on

issue of shares

1 REPORTING ENTITY

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:

Appliances Division: manufacturing, assembling and distribution of refrigerators, air conditioners, microwave ovens and other home appliances.

This interim financial information is not audited and has been presented in condensed form and does not include all the information and disclosures as are required to be provided or made in a full set of annual financial statements. This condensed interim financial information should be read in conjunction with the audited financial statements of the company for the year ended December 31, 2014.

The comparative interim balance sheet as at December 31, 2014 and the related notes to the condensed interim financial information are based on audited financial statements. The comparative interim profit and loss account/statement of comprehensive income, interim cash flow statement, interim statement of changes in equity and related notes to the condensed interim financial information for the nine months ended September 30, 2014 are based on unaudited interim financial information.

This condensed interim financial information has been prepared in accordance with the requirements of 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 and directives issued under the Companies Ordinance, 1984 have been followed.

This condensed interim financial information has been prepared under the historical cost convention except for property, plant and equipment at revalued amounts and certain financial instruments at fair value/amortized cost. In this financial information, except for the amounts reflected in the statement of cash flows, all transactions have been accounted for on accrual basis.

Debt equity swap transaction agreed between the company and National Bank of Pakistan (NBP) whereby 40 Million ordinary shares were supposed to be issued by the company to redeem the outstanding Privately Placed Term Finance certificate (PPTFC) has been withdrawn. PPTFC shall be redeemed as per the redemption plan mutually agreed between PEL and NBP.

This financial information is prepared in Pak Rupees which is the Company's functional currency.

3 ACCOUNTING POLICIES

500,000,000 500,000,000 5,000,000 5,000,000

62,500,000 62,500,000 625,000 625,000

37,500,000 37,500,000 375,000 375,000

100,000,000 100,000,000 1,000,000 1,000,000

600,000,000 600,000,000 6,000,000 6,000,000

September 302015

December 312014

September 302015

December 312014

273,214,754 273,214,754 Issued for cash

Other than cash:

2,732,148

6,040,820

398,145,188 398,145,188 3,981,453

44,957,592 44,957,592 In cash 449,576

443,102,780 443,102,780

2,732,148

60,408

1,183,439

3,981,453

449,576

4,431,029 4,431,029

September 302015

December 312014

September 302015

December 312014

2015December 31

Long term finances

Current maturity

2,464,286

2,103,438

1,062,252

3,165,690

803,507

5,629,976

425,326

1,143,538

3,102,060 3,628,291 Obtained during the period / year 1,562,633 1,850,000 Paid / settled during the period / year 1,944,303

2,376,231

Current portion 911,227 659,253

1,809,163

2,442,807

135,110

60,395

96,876

74,715

2015December 31

9 SHORT TERM BORROWINGS

Debt equity swap transaction agreed between the company and National Bank of Pakistan (NBP) whereby 40 Million ordinary shares were supposed to be issued by the company to redeem the outstanding Privately Placed Term Finance certificate (PPTFC) has been withdrawn. PPTFC shall be redeemed as per the redemption plan mutually agreed between PEL and NBP.

This financial information is prepared in Pak Rupees which is the Company's functional currency.

3 ACCOUNTING POLICIES

500,000,000 500,000,000 5,000,000 5,000,000

62,500,000 62,500,000 625,000 625,000

37,500,000 37,500,000 375,000 375,000

100,000,000 100,000,000 1,000,000 1,000,000

600,000,000 600,000,000 6,000,000 6,000,000

September 302015

December 312014

September 302015

December 312014

273,214,754 273,214,754 Issued for cash

Other than cash:

2,732,148

6,040,820

398,145,188 398,145,188 3,981,453

44,957,592 44,957,592 In cash 449,576

443,102,780 443,102,780

2,732,148

60,408

1,183,439

3,981,453

449,576

4,431,029 4,431,029

September 302015

December 312014

September 302015

December 312014

2015December 31

Long term finances

Current maturity

2,464,286

2,103,438

1,062,252

3,165,690

803,507

5,629,976

425,326

1,143,538

3,102,060 3,628,291 Obtained during the period / year 1,562,633 1,850,000 Paid / settled during the period / year 1,944,303

2,376,231

Current portion 911,227 659,253

1,809,163

2,442,807

135,110

60,395

96,876

74,715

2015December 31

9 SHORT TERM BORROWINGS

14,407,147

59,743

14,096,816

14,466,890

14,764,490

14,660,037 15,168,484

Written down value of the assets disposed off / adjustments 73,061 10,109

Depreciation charged during the period / year 553,306 751,228

14,033,670 14,407,147

2015December 31

Vehicles 36,477 58,757

252,890 403,994

100 100

13,825 8,150

Investments in related parties

Wholly owned subsidiary - Unquoted

Pel Marketing Private Limited

10,000 shares (December 31, 2014: 10,000 shares) of Rs. 10 eachOwnership interest: ordinary shares held 100% (December 31, 2014: 100%)

Associate - Quoted

SILK Bank Limited - Un Quoted 61,338 55,740

75,263 63,990

Cost of investment

2,910,600 shares (December 31, 2014: 2,910,600 shares) 54,701

54,701

46,551

13,825

SILK BANK LIMITED

17,698,489 preferemce shares of Rs. 2.5 each

As at begining of the period/year 55,740

Acquired during the period/year -

Amortization for the period/year 5598 5521

As at end of the year 61,338

55,740

Investment in associate at cost - Quoted

2015December 31

13 REVENUE

13,650,944

2,113,971

4,402,811

340,457

1,604,792

70,221

16,132,326

13,991,401

3,718,763

4,473,032

2,501,317

2,126,693

644,757

826,484

- trade discounts - - - -

826,484

13,631,009 11,864,708 3,074,006 3,646,548

Rupees in thousands

September 30

(Un-audited)

September 30

(Un-audited)

September 30

(Un-audited)

September 30

(Un-audited)

14,407,147

59,743

14,096,816

14,466,890

14,764,490

14,660,037 15,168,484

Written down value of the assets disposed off / adjustments 73,061 10,109

Depreciation charged during the period / year 553,306 751,228

14,033,670 14,407,147

2015December 31

Vehicles 36,477 58,757

252,890 403,994

100 100

13,825 8,150

Investments in related parties

Wholly owned subsidiary - Unquoted

Pel Marketing Private Limited

10,000 shares (December 31, 2014: 10,000 shares) of Rs. 10 eachOwnership interest: ordinary shares held 100% (December 31, 2014: 100%)

Associate - Quoted

SILK Bank Limited - Un Quoted 61,338 55,740

75,263 63,990

Cost of investment

2,910,600 shares (December 31, 2014: 2,910,600 shares) 54,701

54,701

46,551

13,825

SILK BANK LIMITED

17,698,489 preferemce shares of Rs. 2.5 each

As at begining of the period/year 55,740

Acquired during the period/year -

Amortization for the period/year 5598 5521

As at end of the year 61,338

55,740

Investment in associate at cost - Quoted

2015December 31

13 REVENUE

13,650,944

2,113,971

4,402,811

340,457

1,604,792

70,221

16,132,326

13,991,401

3,718,763

4,473,032

2,501,317

2,126,693

644,757

826,484

- trade discounts - - - -

826,484

13,631,009 11,864,708 3,074,006 3,646,548

Rupees in thousands

September 30

(Un-audited)

September 30

(Un-audited)

September 30

(Un-audited)

September 30

(Un-audited)

15 EARNINGS PER SHARE - BASIC AND DILUTED

Rupees in thousands

September 30

(Un-audited)

Six months ended

September 30

(Un-audited)

Rupees in thousands

September 30

(Un-audited)

September 30

(Un-audited)

September 30

(Un-audited)

September 30

(Un-audited)

14 COST OF SALES

7,451,094

1,115,518

2,042,761

465,903

168,754

163,839

1,343,628

441,614

439,703

9,605,122

9,260,625

1,725,886

2,646,302

Work-in-process

1,043,870

1,017,814

908,450

(688,310)

(719,142)

(688,310)

543,688

355,560

298,672

220,140

Finished goods

-at beginning of period 700,790 278,744 504,012 363,560

-at end of period (165,616) (400,790) (165,616) (400,790)

535,174 (122,046) 338,396 (37,230)

Cost of sales 10,683,984 9,494,139 2,362,954 2,829,212

The calculation of basic and diluted profit per ordinary share isbased on the following data:

Profits for the period 1,125,148

595,436

Less: dividend payable on preference shares 32,032

32,032

Profit attributable to ordinary shares 1,093,116

563,404

Number of shares

398,145,188

349,840,423

349,840,423398,145,188

(Number)Weighted average number of ordinary shares

outstanding during the period

Basic and diluted profit per share have been calculated through dividing profit as stated above by weighted average number of ordinary shares.

Rupees in thousands

September 30

(Un-audited)

Six months ended

September 30

(Un-audited)

Basic and Diluted Earnings per share (Rupees) 2.75

plans and key management personnel. 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 employee benefits only. The company in the normal course of business carries out various transactions with other related parties and continues to have a policy whereby all such transactions are carried out on commercial terms and conditions which are equivalent to those prevailing in an arm's length transaction.

Related parties from the company's perspective comprise associated companies, post employment benefit

Rupees in thousands

September 302015

September 302014

(Un-audited)

Subsidiary:

8,790,548 7,218,123

32,846 30,542

1,894 1,634

130,658 107,047

Sales of services

PEL Marketing Private Limited Sales of goods and services

Key Management Personnel Short-term employee

Red Communication Art Private

Limited

Purchase of services

15 EARNINGS PER SHARE - BASIC AND DILUTED

Rupees in thousands

September 30

(Un-audited)

Six months ended

September 30

(Un-audited)

Rupees in thousands

September 30

(Un-audited)

September 30

(Un-audited)

September 30

(Un-audited)

September 30

(Un-audited)

14 COST OF SALES

7,451,094

1,115,518

2,042,761

465,903

168,754

163,839

1,343,628

441,614

439,703

9,605,122

9,260,625

1,725,886

2,646,302

Work-in-process

1,043,870

1,017,814

908,450

(688,310)

(719,142)

(688,310)

543,688

355,560

298,672

220,140

Finished goods

-at beginning of period 700,790 278,744 504,012 363,560

-at end of period (165,616) (400,790) (165,616) (400,790)

535,174 (122,046) 338,396 (37,230)

Cost of sales 10,683,984 9,494,139 2,362,954 2,829,212

The calculation of basic and diluted profit per ordinary share isbased on the following data:

Profits for the period 1,125,148

595,436

Less: dividend payable on preference shares 32,032

32,032

Profit attributable to ordinary shares 1,093,116

563,404

Number of shares

398,145,188

349,840,423

349,840,423398,145,188

(Number)Weighted average number of ordinary shares

outstanding during the period

Basic and diluted profit per share have been calculated through dividing profit as stated above by weighted average number of ordinary shares.

Rupees in thousands

September 30

(Un-audited)

Six months ended

September 30

(Un-audited)

Basic and Diluted Earnings per share (Rupees) 2.75

plans and key management personnel. 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 employee benefits only. The company in the normal course of business carries out various transactions with other related parties and continues to have a policy whereby all such transactions are carried out on commercial terms and conditions which are equivalent to those prevailing in an arm's length transaction.

Related parties from the company's perspective comprise associated companies, post employment benefit

Rupees in thousands

September 302015

September 302014

(Un-audited)

Subsidiary:

8,790,548 7,218,123

32,846 30,542

1,894 1,634

130,658 107,047

Sales of services

PEL Marketing Private Limited Sales of goods and services

Key Management Personnel Short-term employee

Red Communication Art Private

Limited

Purchase of services

18 OTHERS

17-Aziz Avenue, Canal Bank, Gulberg-V, Lahore.Ph: (042) 35718274-5, 35717364-5

www.pel.com.pk

18 OTHERS

17-Aziz Avenue, Canal Bank, Gulberg-V, Lahore.Ph: (042) 35718274-5, 35717364-5

www.pel.com.pk

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