Pel 2019 PDF

Maintaining Commitment to
Top Quality Products ..

BRAVO
TO THE CARERS!
The entire team of PEL applauds all the doctors, nurses and paramedics,
who find themselves on the frontlines of this COVID 19 emergency. The
nation owes each of them a tremendous debt of gratitude.
Research & Development | Quality Control & Assurance
PEL recognizes the importance of consumer-driven product

development, makes significant investments in Research
& Development, Technologies and Quality Control & Assurance,
and remains committed to maintaining its market leadership
position as provider of top quality products to meet the
challenges and technology intensive needs of its customers.
This annual report can be accessed and downloaded from PEL’s website
https://pel.com.pk/financial-reports/
Annual Report 2019 i
BEST CORPORATE AND SUSTAINABILITY

REPORT AWARDS 2018
The Institute of Chartered Accountants of Every year all listed companies are requested
Pakistan (ICAP) and the Institute of Cost and to send their annual reports for the
Management Accountants of Pakistan competition.
(ICMAP) jointly hold the Best Corporate
The objective of the Awards is to encourage
Report Award annually.
the application of timely, accurate,
Companies are encouraged to adopt informative and well-presented annual
international best practices to ensure reports for stakeholders.
transparency by giving more disclosures and
following specific formal requirements. The
criteria for evaluating companies are
reviewed by the joint Committee of ICAP and
ICMAP every year based on latest trends.
PEL participated in the competition for fourth consecutive year and was able to successfully
secure awards in the Engineering and Auto sector for all four years; 2015, 2016, 2017 and
2018. PEL’s annual report is a vital tool for investors at home and abroad to enable them to
understand the underlying factors relating to the current position and future prospects of the
Company. The value of reporting to investors has been achieved by providing a greater focus
on forward looking information, risk management, and integrating them in a more coherent
way.
ii Pak Elektron Limited
CONTENTS
i BEST CORPORATE REPORT AWARD
ii TABLE OF CONTENTS
iv 2019 IN NUMBERS
vi STRIVING FOR EXCELLENCE IN CORPORATE REPORTING
viii CALENDER OF EVENTS
A ORGANIZATIONAL OVERVIEW AND EXTERNAL ENVIRONMENT

A 02 ABOUT PEL A 27 CORE VALUES
A 04 PRODUCT PROFILE A 28 GROUP STRUCTURE
A 18 GEOGRAPHICAL PRESENCE A 30 HUMAN CAPITAL
A 20 PEL'S JOURNEY THROUGH TIME A 32 ORGANIZATION CHART
A 22 CORPORATE INFORMATION A 34 POSITION WITHIN THE VALUE CHAIN
A 24 VISION AND MISSION A 36 EXTERNAL ENVIRONMENT
A 26 ETHICS AND BUSINESS PRACTICES A 38 EFFECT OF SEASONALITY
A 26 CODE OF CONDUCT A 38 COMPOSITION OF RAW MATERIAL; LOCAL VS IMPORTED
A 26 ORGANIZATIONAL CULTURE A 38 SIGNIFICANT CHANGES FROM PRIOR YEARS
B STRATEGY AND RESOURCE ALLOCATION

B 02 OBJECTIVES AND STRATEGIES B 06 LIQUIDITY MANAGEMENT
B 04 RESOURCE ALLOCATION PLAN B 06 SIGNIFICANT PLANS AND DECISIONS
B 05 BUSINESS MODEL
C RISK AND OPPORTUNITIES

C 02 RISKS AND MITIGATION STRATEGIES C 07 SWOT ANALYSIS
C 06 OPPORTUNITIES AND MATERIALIZATION C 08 CAPITAL STRUCTURE
STRATEGIES C 08 REPAYMENT OF DEBTS
C 06 MATERIALITY APPROACH
D GOVERNANCE
D 02 BOARD OF DIRECTORS D 10 INFORMATION TECHNOLOGY
D 02 Profile of Board Members GOVERNANCE
D 04 Composition of the Board D 10 IT Governance Policy
D 04 Independent Director D 10 Business Continuity and Disaster
D 04 Female Director Recovery Plan
D 04 Meetings of The Board
D 12 POLICY DISCLOSURES
D 05 Board Operations
D 12 Diversity Policy
D 05 Changes to the Board
D 12 Corporate Social Responsibility and
D 05 Annual Evaluation of Board's Performance
Sustainability Policy
D 05 Office of the Chairman and Chief Executive Officer
D 12 Conflict of Interest Policy
D 05 Roles and Responsibilities of the Chairman
D 12 Investers' Grievance Policy
and Chief Executive Officer
D 13 Policy For Safety Of Records
D 06 Formal Orientation at Induction
D 13 Speak-up Whistle Blowing Policy
D 06 Directors Training Program
D 13 Human Resource Management Policy
D 06 Directors' Remuneration
D 06 Foreign Directors D 14 SHARIAH COMPLIANCE
D 06 Implemented Governance Practices D 14 Shariah Compliance Certificate
vs Legal Requirements D 15 Shariah Advisor's Profile And Report
D 07 Related Parties D 16 CODE OF CORPORATE GOVERNANCE
D 07 Preparation and Fair Presentation D 16 Statement of Compliance
of Financial Statements D 18 Report of the Audit Committee
D 08 COMMITEES OF THE BOARD D 20 Review Report by Auditors
D 08 Audit Commitee
D 09 Human Resource and Remuneration
Committee
Annual Report 2019 iii
E PERFORMANCE AND POSITION

E 02
E 04
CHAIRMAN'S REVIEW
CEO'S REMARKS A Company's
E 06
E 06
DIRECTORS' REPORT
Macro-economic Overview Commitment to
E 08 Analysis of Financial and Non-Financial
E 13
Performance
Product-Wise Operating Performance
Quality had to
E 16
E 18
Financial Ratios
Graphical Anaylsis
come from the
E 20
E 21
Dupont Anaylsis
Free Cash Flow
Top, and it had
E 22
E 23
Economic Value Added
Summary of Cash Flows to be
E 24 Horizontal Analysis
E 26
E 28
Vertical Analysis
Quarterly Analysis
Reinforced
E 29
E 30
Direct Method Cash Flow Statement
Segmental Review of Business Performance
Over and Over
E 31
E 32
Market Share Information
Market Overview
again. Unless a
E 35
E 40
Pattern of Shareholding
Capital Expenditure Business views
E 40
E 40
Dividend
Other Matters Quality as its
E 46 Directors' Report In Urdu
Single, Non-
F OUT LOOK negotiable
F 02
F 02
FORWARD LOOKING STATEMENT
COMPANY PERFORMANCE AGAINST Goal, Workers
F 03
LAST YEAR PROJECTIONS
FINANCIAL PROJECTIONS will Inevitably
F 03 STATUS OF PROJECTS
F 03 SOURCES OF INFORMATION AND
ASSUMPTIONS
Feel the Need
to make
G STAKEHOLDERS RELATIONSHIP
AND ENGAGEMENT
Tradeoffs and
G 02 STAKEHOLDERS' ENGAGEMENT Quality will
G 05 STATEMENT OF VALUE ADDITION
G 06
G 08
INVESTOR RELATIONS
GLOSSARY OF TERMS AND DEFINITIONS
slip.
W. Edwards Deming
H SUSTAINABILITY AND CORPORATE

SOCIAL RESPONSIBILITY
H 02 CSR INITIATIVES
H 06 SUSTAINABILITY HIGHLIGHTS
I CONSOLIDATED FINANCIAL STATEMENTS

J SEPARATE FINANCIAL STATEMENTS
K ANNUAL GENERAL MEETING
K 02 NOTICE OF ANNUAL GENERAL MEETING
K 07 FORM OF PROXY
iv Pak Elektron Limited
2019 THE YEAR IN NUMBERS
REVENUE IN 2019
[RUPEES IN MILLIONS]
37,621
42,347
38,990
37,621
34,124
29,323
24,126
2014 2015 2016 2017 2018 2019
Segmental Performance
APPLIANCES DIVISION 27,787
POWER DIVISION 9,834

Annual Report 2019 v
Key Indicators
EARNINGS PER RETURN ON EQUITY MARKET
SHARE VALUE PER SHARE
Rs. 1.68
2.86% Rs. 27.07

BREAK-UP MARKET
VALUE PER SHARE CAPITALIZATION
CURRENT RATIO
Rs. 60.76 Rs. 13,472M 1.76 Times
EQUITY 25,511
27,001
30,280 30,668
19,996
15,595
Share capital and reserves

Advance against issue of ordinary shares
Surplus on revaluation of property, plant
and equipment
2014 2015 2016 2017 2018 2019
EXPENSES IN 2019
78.83% Cost of sales

7.23% Distribution cost
4.55% Administrative and general expenses 27,055
0.20% Other expenses
9.17% Finance cost
0.01% Share of loss of associate
0.01% Taxation
vi Pak Elektron Limited
STRIVING FOR EXCELLENCE IN CORPORATE REPORTING

UNRESERVED COMPLIANCE WITH ADOPTION AND STATEMENT OF
ACCOUNTING AND REPORTING ADHERENCE WITH THE INTERNATIONAL
STANDARDS APPLICABLE IN PAKISTAN INTEGRATED REPORTING FRAMEWORK
PEL prepares its financial statements in Since its inception in 1956, PEL has
accordance with the accounting and maintained a legacy of adhering to the best
reporting standards as applicable in Pakistan. corporate governance practices. The
The accounting and reporting standards management has laid business foundation
applicable in Pakistan comprise of: built on the principles of ethics and
a) International Financial Reporting corporate professionalism and, as always, it is
Standards ['IFRS'] issued by the committed to generating greater value for
International Accounting Standards both the organization and its stakeholders.
Board ['IASB'] as notified under the The Company is not only focused on
achieving sustainable corporate value but
Companies Act, 2017;
also committed to achieving excellence in
b) Islamic Financial Accounting Standards transparent reporting.
['IFAS'] issued by Institute of Chartered
Accountants of Pakistan as notified under In the current increasingly complex
the Companies Act, 2017; and economic, technological, social, political and
environmental circumstances, integration of
c) Provisions of and directives issued under its financial information with non-financial
the Companies Act, 2017. information is one of the most effective ways
The Company has adopted all IFRSs notified for an organization to demonstrate the
under the Companies Act, 2017 and effective importance of linking sustainability issues to
for the year 2019. Those IFRSs which have business strategies. Frequent changes to the
been notified under the Companies Act, corporate environment have led to a need
2017 but are not effective for the year 2019 for additional information beyond the basic
financial statements so that stakeholders can
will adopted on their due dates.
have a better understanding of the value-
However, where provisions of and directives creation process.
issued under the Companies Act, 2017 differ
The Company has adopted 'International
from the IFRS and IFAS, the provisions of and Integrated Reporting (IR) Framework' to give
directives issued under the Companies Act, an overview of the Company's business
2017 have been followed in preparation and affairs by presenting and explaining all the
presentation of financial statements. financial and non-financial information,
considering the variable interests of a wide
range of stakeholders, in a manner that
would enhance the user's understanding as
to how the Company is working to improve
its performance.
The IR Framework requires a strong
commitment by the Company's
management who is ultimately responsible
for the message the Company is delivering
to all of its stakeholders. The Board of
Directors, elected by shareholders, play a
crucial role in maintaining an integrated
reporting mechanism and ensuring long-
term value creation while simultaneously
increasing transparency for the shareholders.
Adoption of International Integrated
Reporting Framework depends on the
individual circumstances of an entity and is
still considered to be a practice in its early
Annual Report 2019 vii
stages. We will continue to improve the

information produced to make it even easier
to understand, while taking into account the
opinion of stakeholders reading this report.
Initially, the Company has included following
content elements for the users of this report:
A. Organizational overview and external
environment
B. Strategy and resource allocation
C. Risks and opportunities
D. Governance
E. Performance and position
F. Outlook
G. Stakeholder's relationship and
engagement
H. Corporate social responsibility and
sustainability
I. Consolidated Financial Statements
J. Separate Financial Statements
K. Annual General Meeting
Moving ahead with PEL's tradition of
providing information to its stakeholders that
goes beyond the traditional requirements of
financial reporting framework and other legal
requirements, by doing so we believe the
stakeholders gain a better understanding of
the Company, its business, strategies,
opportunities and risks, business model, The IR Framework
governance and performance which itself is
a form of value creation for its stakeholders. requires a strong
commitment by the
Company's
management who is
ultimately
responsible for the
message the
Company is
delivering to all of
its stakeholders.
viii Pak Elektron Limited
CALENDAR OF EVENTS
2019
• Commencement of Installation of Power Transformer Manufacturing Facility
JANUARY
at PEL 34 KM, Ferozepur Road, Lahore.
• Successful Testing of PEL 40 MVA Power Transformers from National
Transmission and Dispatch – NTDC Lab.
Start of commercial production after successful installation &
FEBRUARY
•
commissioning of AC & Microwave Oven production line at PEL 34 KM,
Ferozepur Road, Lahore shifted from PEL 14 KM, Ferozepur Road, Lahore.
APRIL
• Development of energy efficient wide body Refrigerator “Life Series”, with
extended space, improved aesthetics and cost effective product design.
JULY
• Commencement of commercial production of Washing Machine after
successful commissioning.
A
ORGANIZATIONAL
OVERVIEW AND
EXTERNAL
ENVIRONMENT
A 02 Pak Elektron Limited
ABOUT PEL
PEL is the pioneer manufacturer of electrical Until the acquisition by the Saigol Group,
goods in Pakistan. In 1956, the Company PEL was solely catering the power
was set up by Malik Brothers in technical equipment market. The Company ventured
collaboration with M/s AEG of Germany into home appliances market in 1981 after
(“AEG”) to manufacture transformers, acquisition as a part of the Group’s long
switchgear and electric motors. AEG exited term strategy of diversification.
from the venture and sold their share of PEL
to the Malik Brothers in the late 1960s,
which was subsequently acquired by the
Saigol Group of Companies in 1978.
Since its inception, the Company has always
been contributing towards the advancement
and development of the engineering sector
in Pakistan by introducing a range of quality
electrical equipment, home appliances and
by producing hundreds of engineers, skilled
workers and technicians through its
apprenticeship schemes and training
programmes.
Annual Report 2019 A 03
The Company comprises of two divisions; each offering a wide

range of products as follows:
POWER DIVISION APPLIANCES DIVISION

• Distribution Transformers • Refrigerators
• Power Transformers • Air Conditioners
• Energy Meters • Deep Freezers
• Switchgears • Microwave Ovens
• Grid Stations • Water Dispensers
• EPC • LED TVs
• Washing Machine
• Small Domestic Appliances
(Electric Kettle, Toaster,
Sandwich Maker, Steam Iron)
PRODUCT PROFILE
APPLIANCES DIVISION REFRIGERATOR
PEL started refrigerator manufacturing in 1987
PEL is among the market leaders in with the technical assistance of IAR- SILTAL Italy.
home appliances business with a Its cooling performance is tested and approved
by Danfoss Germany while the manufacturing
very good presence and market facility is ISO 9002 Certified from SGS
share since year 1987. The growing Switzerland.
demand is due to innovation and Growing numbers of middle class, growth in
product development through disposable Incomes, upward trajectory of
dedicated and continuous research country macroeconomic indicators, improved
country law & order situation and improved
& development. electricity supply are the factors behind
growing market demand of refrigerators. Wide
product penetration gap is yet to be bridged,
especially in rural areas. In the improving
electricity load shedding scenario, PEL's
“Inverter / Invert on Series Refrigerators” being
“Energy Efficient” has been well received in the

market. Going forward, the Company is
The Company is well positioned to take benefit of committed to adding more products
growing demand as a result of above factors and
has introduced energy efficient “Invert on series” in its range. The strategy employed is
Compatible with UPS and solar solutions.
Company also launched “Arctic Fresh" Series with to use the same distribution channel
turbo cooling and freshness LEDs for better food to sell more products. This dilutes our
preservation. Both of the series being based on a
masterpiece of “Japanese Inverter Technology” fixed cost. The growth potential to
add more products and leverage to
with electricity saving up to 50% with improved
aesthetics are well received in the local market. In
already existing series new models with
enhanced space and cooling retention are
the PEL Brand is Vast.
introduced in the market. PEL Glass Door Series
“INTELLO” with super freezer, bluetooth speaker,
door alarm and intelligent temperature control
system is also launched last year, are receiving an
excellent response due to its additional and
unique features.
The Company is focusing on continuous
improvement through R&D. Special attention is
being given through different marketing
campaigns to further strengthen the PEL Brand.
The turnover of refrigerators has increased
significantly over the past few years.
DEEP FREEZER
PEL Deep Freezers were introduced in 1987 in
technical collaboration with ARISTON Italy. The
Company's manufacturing facility is ECO Friendly
because PEL uses Green Gases and is the best choice
for MNCs. Customized products (Deep Freezers and
ICE Cream Cabinets) with durability and high level of
performance is preference of Corporate Customers
like Unilever (Walls), Engro Foods (O more), Pakistan
Dairies (Igloo), Coke and PEPSI Bottlers. Due to
superior product quality and highly responsive after
sales service, the Company receiving continuously
repeat orders from corporate customers.
Capitalizing on our technical expertise Entry of PEL Deep Freezers in retail

we have signed after sale service market is being well received; this is
agreements with PEPSI Bottlers, Unilever, evident from sales volume growth. A
Engro Foods, Pakistan Dairies for repair continuous R&D process is on way to
services of Deep Freezers, Visi Coolers make the product energy efficient,
and Chest Coolers . This will deepen our durable and with improved aesthetics.
relationship with valued customers and Growing macro-economic indicators and
multinational companies. smooth & low cost electricity will increase
demand of deep freezers, in both
general consumer market and corporate
sector.
AIR CONDITIONER
The Company is among the pioneers of Window Company introduced new product series like
AC manufacturing in the country and remained "Invert-Eco", "Invert-o-Sense" , "Invert-o-Sense" ,
market leader for a long time until it hit due to "Invert-o-Life" and "Invert-o-Pro" launched during
technological shift on Split AC. Since the the year, are well received by Market. These
Company's return in Split A.C Business, PEL Split “Heat & Cool" Energy Efficient ACs with "4 Star
A.C has been well received in the market due to Rating Inverter Technology" are real market "Eye
its innovations, durability, quality, brand equity Catch" due to product quality & aesthetics. An
and after sales service. aggressive market campaign also leveled fueled
the growth trajectory. Improved electricity supply
Growing emerging middle class, rapid
also played a vital role in country market growth.
urbanization and increase in disposable income
are market growth drivers. Uninterrupted and
lower cost electricity supply has further increase
the market demand, due to low electricity
consumption by Inverter technology based
equipments. Company's country wide efficient
after sales services net work is also playing a vital
role to win "Consumer Confidence”.
WASHING MACHINE
PEL fully auto Washing Machines feature PEL Semi Automatic Washing Machines are built
meaningful innovations and contemporary to last and empowered with features that prevent
design and space saving. Washing machine's the formation of rust. These advanced machines
innovative Fit-wash technology helps protect have a plastic body which is non-corrosive and
delicate fabrics from friction damage while still rust proof. Cleans clothes thoroughly with Fit-
boasting the outstanding washing performance. wash Technology, a powerful wash system that
The unique structure of its pulsator generates a controls the flow of water to move fabrics around
dynamic, multi-directional washing flow that the drum. Currents of water deeply clean clothes
minimizes tangles, twists and knots and and sheets without tangling or twisting them.
thoroughly cleans clothes with its enhanced stain-
fighting capabilities. Artificial Intelligence
automatically detects optimal washing for clothes
and its touch & go function automatically
calculates and starts washing cycle.
MICROWAVE OVEN
PEL Electrical Home Appliances have
always been customers' choice due to
its quality, brand equity and a country
wide efficient after sales services
network. On consistent market
demand, the Company entered in to
Microwave Oven business.
Following an innovative product
development culture, the Company
has introduced DESIRE and GLAMOUR
series with built in recipes.
WATER DISPENSER
On consistent market demand and to widen the product
range company has set up a production facility to produce
wide range of Water Dispensers. PEL Water Dispensers are
well received in the market and being recognized as a
perfect match with mini refrigerator. Further R&D process is
continued to enhance product capacity & aesthetics.
SMART LED TV
PEL celebrated the launch of their new The Coloron LED TV also comes with
4K Coloron LED Smart TV in Pakistan with Android 6.0 Marshmallow, as well as
an event on October 20, 2018. Google Play and Wi-Fi functions, allowing
users to download and use all their
The Smart TV features 4K UHD, Smart
favourite apps on the TV itself. With its
LED technology and Dolby Digital (5.1)
built-in Screen Mirroring technology,
surround sound system which, combined
users can use the Coloron LED TV to view
with Netflix and YouTube, delivers a fully
content being played on their mobile
cinematic entertainment experience.
devices.
The new LED TV uses IPS display to Coloron Prime 4K LED TVs are available
enhance display and colour quality, and in 55 and 49inch sizes, the smart Coloron
allows for high quality viewing from any model is available in 40inches, with basic
angle. It also has 1 GB ram, 8 GB Internal models available in 49, 40, and 32 inch
Space, VGA, USB 2.0, HDMI 2.0 and has sizes.
LAN capabilities making it an equally
good choice for both movie fans and
gamers.
POWER DIVISION
PEL is among the pioneers of Electrical Capital Goods and has been serving the power utility
companies, industries, individual customers, housing and commercial projects by providing
cost effective solutions. PEL is now technology forerunner and market leader in providing
new products and services to meet the challenges and technology intensive needs of its
customers. Our EPC contracting division delivers customer designed and built HV and EHV
grid stations, electrification of housing projects and industrial parks. We aim to maintain this
competitive edge and at the same time keep striving to improve it further by continuous R&D,
creating new knowledge and adopting global developments in technology and product
design.
High standards of Quality and customer care are hallmark of PEL Corporate Philosophy. We
have a comprehensive Quality Management System that is Consistent with ISO 9001-2000.
PEL is an ISO certified Company.
PEL being leading electrical equipment manufacturer has aligned its policies to support the
Government in its effort to overcome the energy issues and is well positioned to obtain its
due share in electrical equipment business arising from CPEC developments.
DISTRIBUTION TRANSFORMER
Distribution Transformer is among year under review was the successful short
Company's Premier Products. PEL is engaged circuit testing of PEL Green Transformers
in Distribution Transformer manufacturing (with bio degradable fluid instead of
since its inception in 1958. With its excellent conventional mineral oil) of 1,500 & 630 KVA
performance history, the Company is among (11KV) and 250 & 630 KVA (33KV) at KEMA –
key players in local market with a substantial Netherlands for Jordan Electric Power
market share. After Siemens's exit from Company - JEPCO Jordan (First time by a
transformer business PEL is among Pakistani manufacturer in its history).
prominent having state of the art
manufacturing and testing facilities. PEL
established a transformer manufacturing
facility to meet the global quality standards,
in Technical assistance from Pauwels,
Belgium.
PEL Distribution Transformers range includes
oil impressed core type transformers, dry
type transformers and auto transformers of
voltage up to 33 KV ratings from 10 KVA to
10 MVA. PEL has acquired manufacturing
capabilities and developed Smart
Transformers with reduced size by using foil
winding, with latest cooling efficient
insulation and corrugated tanks with
detachable radiators.
The transformers have been tested and
accredited for impulse voltage and short
circuits from Short Circuit Laboratory, KEMA
(Holland) and HVSC Lab, RAWAT (Pakistan).
Besides meeting the local demand PEL is
exporting transformers to different countries.
Among land mark achievements during the
POWER TRANSFORMERS ENERGY METER

Extensive experience and success in PEL Single Phase and Three Phase Static
manufacturing distribution transformer led to Meters are manufactured as per
establishment of Power Transformer Division specifications of Utility Companies licensed
in 2005. Since its birth this division has from ABB USA and its quality is certified by
produced transformers of rating 31/40 MVA, KEMA Laboratories.
20/26 MVA and 10/13 MVA for 132 KV level.
PEL Energy Meter Plant is ISO 9002 certified
To compete internationally, PEL combined its
and its products meet the standards of
technical expertise with GANZ, a renowned
WAPDA & KESC.
and experienced Hungarian transformer
manufacturer with over 150 years of history To overcome the circular debt Government
and now continues to cooperate with their has Plan to introduce more efficient metering
technical partners for new development. system to control electricity pilferage.
Company has developed Single Phase, Three
After Siemens' exit from transformer
Phase GSM Energy Meters and DLMS
business, PEL is a leading power transformer
Compliant Single Phase Energy Meter and
manufacturer in local market. Demand of
got it approved from National Transmission
power transformers is expected to continue
and Distribution Company - NTDC and is
due to the Government's accelerated efforts
well positioned to take care of rising demand
for T&D Infrastructure Augmentation after
of Energy Meters with advance
meeting energy generation requirements.
functionalities.
SWITCHGEAR
Company is engaged in switchgear
business since its inception in 1958 and is
one of the leading manufacturers of
Pakistan. Switch Gear division products
include MV&LV Switch Gears, MV Metal
Clad Switch Gear Cubicles, MV Pad
Mounted Transformers, Kiosk Type
Compact substations, LV Distribution
Panels, PFI Plant, Motor Control Centre &
Bus Tie Duct.
Pakistan's Industrial Sector is reviving due
to improved electricity supply and other
Government initiatives. There are visible
signs of economic stimulation of local
industry. The overall private business of
housing schemes and upcoming projects
of industrial estates seem very promising .
We being key Player in Switch Gear
Business, are confident to increase our
market share and switchgear business will
even grow further in future.
EPC CONTRACTING
PEL EPC Division was formally
established in 2006 and delivers custom
made solutions in following areas.
• 132 & 220 KV Grid Station for Power
Utility Companies.
• 132 and 11 KV Substations for
commercial & industrial customers
for integration of Private Captive
.Power Generation Plants into utility
network for sale of their surplus
power to utility companies.
• Electrification of housing projects
and industrial parks.
EPC business foresees a great Potential
due to CPEC developments and boom
in the local construction industry. The
Company is well prepared to grasp
opportunities in this sector.
GEOGRAPHICAL PRESENCE
PEL DEALER/SERVICE CENTRE NETWORK
Our nationwide Dealer and Service Centre Network provides us access
to a wide range of customers and enables us to provide quality after
sales services.
KPK
Population : 12%
Dealers : 11%
GILGIT
Sales Offices :3 SKARDU
Service Center :2 KPK
ASCs : 103
PESHAWAR
JAMMU & KASHMIR
(DISPUTED TERRITORY)
ISLAMABAD
BALOCHISTAN
Population : 6%
Dealers : 2%
Sales Offices :1
Service Center :0
ASCs :0 LAHORE
QUETTA PUNJAB
PUNJAB Population : 61%
Dealers : 75%
Sales Offices : 13
Service Center : 13
BLOCHISTAN ASCs : 423
GAWADAR
SINDH
Population : 21%
KARACHI Dealers : 12%
Sales Offices :3
Service Center :5
ASCs : 91
SUMMARY Sales Offices

Total Appliances Dealers : 2,600
PEL Dealer : 1,500 Service Centers
PEL Sales Offices : 20
PEL Service Centers : 20
Authorized Service Centers (ASCs) : 617
INTERNATIONAL PRESENCE
PEL exports to customers and see potential in following countries and has
continued focus on expanding presence in international market:
• Afghanistan • Egypt • Mozambique • Tajikistan

• Algeria • Ghana • Namibia • Tanzania
• Bahrain • Greece • Nigeria • Togo
• Benin • Guinea • Oman • UAE
• Botswana • Iraq • Qatar • Uganda
• Bulgaria • Kenya • Rwanda • Uzbekistan
• Burkina Faso • Kuwait • Saudi Arabia • Yemen
• Burundi • Libya • South Africa
• Congo • Macedonia • South Sudan
• Cote d’ Ivory • Malaysia • Swaziland
Quality means
doing it right when
no one is looking
- Henry Ford
PEL’S JOURNEY THROUGH

TIME
Listing with all Stock Exchanges Acquired Technology
in Pakistan. Acquired License to from GANZ, Hungry to
manufacture VCBs from Hitachi, Produce Power
Japan Transformers
Formal start of EPC

Business Segment
of the Company
2006
1988
2004
1987 Manufacturing of
Refrigerators & Deep
Started Production
Freezers in Technical
1992
of Energy Meters
Collaboration with
under the License
IAR-SILTAL &
from ABB USA
ARISTON of Italy
2000
Launching of new
Crystal Series
Refrigerator under
Technical
Collaboration of
1981 Manufacturing of Air
Danfoss, Germany
Conditioners with
assistance of Fujitsu
Japan
1994 1997
Start of Commercial
Production of Distribution
1958 Transformers and Switch
Gears in Technical
Acquired Technology
from Carrier, USA to
Collaboration with AEG
manufacture Air
Germany
Conditioners
Quality Management
System Certification for
Energy Meter ISO 9001
by SGS
1956 Incorporation
of Pak Elektron Limited
2019 Launch of Semi Automatic

Washing Machines with
Fit-wash technology.
Launch of new Arctic

Series Refrigerator
with New Aesthetics
Launch of 4K Coloron LED

2018 Smart TV Android 6.0
Marshmallow powered by
the massively successful
Android with high
resolution.
2012 2017 Commencement of Water

Dispenser Production.
Launching of “ Invert -o-
Cool" Air Conditioners, "
Arctic Premium Plus "
Deep Freezers and "
Convection Series"
Microwave Ovens.
2011 2013 Successful

Commissioning
of 220 KV GIS
Shalimar Grid
Station worthRs. 1.3
Billion 2016
Launching of New
Desire Series Launching of Inverter
Refrigerator Refrigerator & Air
Prequali cation with Conditioner Series
Saudi Electrical Successful Short
Company - SEC Circuit Testing of PEL
Green Transformer
2010 2014 2015
2009
Inauguration of New
Distribution Transformer
Factory by Prime Minister
of Pakistan under Technical Launching of Glass
Assistance from Pauwels, Launching of New Door Mirror Series
Belgium. Glass Door Refrigerator
with New Aesthetics
4th CSR National

Excellence Award
6th Annual
Environmental
Excellence Award
Export of Power
Transformer
CORPORATE INFORMATION
BOARD OF DIRECTORS
Mr. M. Naseem Saigol Chairman - Non Executive
Mr. Muhammad Murad Saigol Chief Executive Officer - Executive/Certified (DTP)
Mr. Muhammad Zeid Yousuf Saigol Director - Executive/Certified (DTP)
Syed Manzar Hassan Director - Executive/Certified (DTP)
Syed Haroon Rashid Director - Non Executive/Independent/Certified (DTP)
Mr. Muhammad Kamran Saleem Director - Non Executive/Independent/Certified (DTP)
Mr. Asad Ullah Khawaja Director - NIT Nominee/Independent
Mr. Usman Shahid Director - NBP Nominee U/S 164 of the Act / Non Executive
Ms. Azra Shoaib Director - NBP Nominee U/S 164 of the Act / Non Executive
AUDIT COMMITTEE BANKERS

Mr. Asad Ullah Khawaja Chairman/Member Albaraka Bank (Pakistan) Limited
Syed Haroon Rashid Member Askari Bank Limited
Mr. Usman Shahid Member Bank Alfalah Limited
Sheikh Muhammad Shakeel Member The Bank of Khyber
(Retired October 21, 2019)
The Bank of Punjab
Syed Manzar Hassan Member Sindh Bank Limited
(Appointed October 30, 2019)
Faysal Bank Limited
HR & REMUNERATION COMMITTEE Bank Islami (Pakistan) Limited
MCB Bank Limited
Mr. Asad Ullah Khawaja Chairman/Member
National Bank of Pakistan
Syed Haroon Rashid Member
Pak Brunei Investment Company Limited
Mr. Usman Shahid Member
Pak Libya Holding Company (Private) Limited
Syed Manzar Hassan Member
Pak Oman Investment Company Limited
Silk Bank Limited
COMPANY SECRETARY
Soneri Bank Limited
Muhammad Omer Farooq Standard Chartered Bank (Pakistan) Limited
Summit Bank Limited
CHIEF FINANCIAL OFFICER Saudi Pak Industrial and Agriculture
Syed Manzar Hassan, FCA Investment Company Limited
United Bank Limited
AUDITORS
Rahman Sarfaraz Rahim Iqbal Rafiq REGISTERED OFFICE KARACHI
Chartered Accountants 17- Aziz Avenue, Canal Bank, Kohinoor Building
A member of Russell Bedford International
Gulberg-V, Lahore 25-West Wharf Road,
LEGAL ADVISOR Tel: 042-35718274-6, Karachi
Fax: 042-35762707 Tel: 021-32200951-4
M/s Hassan & Hassan Advocates E-Mail: shares@saigols.com Fax: 021-32310303
COMPANY REG. NO. ISLAMABAD WORKS

0000802 Room # 301, 3rd Floor, 14-K.M. Ferozepur
Green Trust Tower, Road, Lahore
NATIONAL TAX NO. (NTN) Blue Area, Islamabad Tel: 042-35920151-9
2011386-2 Tel: 051-2824543, 2828941
Fax: 051-2273858
STATUS OF COMPANY
Public Interest Company (PIC) PEL Unit II
34-K.M.
SHARIAH ADVISOR Ferozepur Road,
Mufti Usama Ehsan Keath Village, Lahore
Safwa Shariah Advisory (Private) Limited Tel: 042-35935151-2
SHARE REGISTRAR
Corplink (Pvt.) Limited Wings Arcade,
1-K Commercial Model Town, Lahore.
Tel: 042-35916714, 35839182,
Fax: 042-35869037
E-Mail: shares@corplink.com.pk
SALES OFFICES SERVICE CENTERS

1. Plot no. 288, Shamasabad Colony, Multan 1. 203-L, Block-2 PECHS, Opp. Ghosia Masjid,
Karachi
2. 81-X, Sadiq Colony, Bahawalpur
2. E-19, Gulshan Iqbal, Block 4, Karachi
3. 94-A Satellite Town, Burewala
3. B-434, Sector 35/A, Gulshan-E-Hali Korangi
4. 96 Garden Town, Multan Road, Dera Ghazi No. 4, Zaman Town, Karachi
Khan
4. 5/A, Block-6, Unit 6, Latifabad, Hyderabad
5. Factory Area, Shahbaz Pur Road, Rahim Yar
Khan 5. A-115,Street 2 Sindh Cooporative Housing
Society, Airport Road, Sukkur
6. Plot no 44, Street no, 6, Gulshan Iqbal Town,
Arbab Road Stop, University Road, Peshawar 6. Plot 288, Shams Abad Colony, Multan
7. 5-A, Zakori Town, Daraban Road, Dera Ismail 7. Kohinoor Industries Limited, Madina Town,
Khan Faisalabad
8. Kohinoor Industries, College Road, Madina 8. 81-X, New Sadiq Colony, Bahawalpur
Town, Faisalabad
9. 173, Tehsil Road, Sahiwal
9. 174-B, Tehsil Road, Near Mesali Hotel,
Sahiwal 10. Factory Area, Shahbaz Pur Road, Rahim Yar
Khan
10. 99-A, Old Civil Lines, Bahadur Shah Zafar
Road, Sargodha 11. 99-A Old Civil Line, Bhahdur Shah Zafar
Road, Sargodha
11. Session Court Road, Street 1, 2-C-1,
Gujranwala 12. 16 Shah Jamal, Lahore
12. Khayam Palza, Taimoor Chowk, Police Line 13. 143/4 Begum Pura, GT Road, Lahore
Road, Gujrat 14. 2-C1, Street 1, Session Court Road, Civil
13. Mubarik Palace, Garden Town, Butter Road, Lines, Gujranwala
Sialkot 15. Khayam Plaza, Police Lines Road, Gujrat
14. 309-3rd Floor, Hashoo Centre, Abdullah 16. Mubarak Palace, Garden Town, Butter Road,
Haroon Road, Karachi Daska Road, Sialkot
15. 5-A, Block-E, Unit-06, Latif Abad, Hyderabad 17. 85-C/2 ,Block C, Satellite Town, Rawalpindi
16. Bismillah Appartment, Near PTCL Exchange, 18. Plot no.44, Street No.6, Gulshan-e-Iqbal
Govt-Girls Degree College Road, Sukkur Town, University Road, Peshwar
17. Al Syed Godown, Air Port Road, Quetta 19. Plot no. 5, Street 7, Phase 2, Wah Model
18. 1st Floor, Ali Center, 85-Jail Road, Opposite Town, Wah Cantt
Services Hospital, Lahore 20. Plot no. 5, Street 2, Peer Abdul Lateef Zakori
19. 4-B Road Al Raheem Arcade, National Town, Daraban Road, Dera Ismail Khan
Market, Sattelite Town, Rawalpindi
20. Plot no. 5, Street 7, Phase 2, Wah Model
Town, Wah Cantt
VISION
To excel in providing engineering
goods and services through
continuous improvement.
MISSION
To provide quality products and
services to the complete satisfaction
of our customers and maximize
returns for all stakeholders through
optimal use of resources.
To focus on personal development

of our human resource to meet
future challenges.
To promote good governance,

corporate values and a safe working
environment with a strong sense of
social responsibility.
STATEMENT OF ETHICS
employee found involved in any collusive
activity shall be subject to strict disciplinary
action.
AND BUSINESS 2. Coercive Practices means impairing or harming

or threatening to impair or harm, directly or
PRACTICES
indirectly, any person or the property of a
person to influence improperly the actions of
that person. Such practices may include
At PEL we are committed to high standards of threatening or engaging in illegal actions such
business ethics and effective risk management in as personal injury, abduction, damage to
order to protect company's assets, investments of property or to legally recognized interest in
share holders, to avoid reputational or financial loss order to attain undue advantage or to avoid an
and to ensure compliance of applicable laws, rules obligation. Provided that hard bargaining and
and regulations in addition to any specific the exercise of legal contractual remedies or
obligations linked to the company's sector or litigation are not considered coercive practices.
activities. 3. Corrupt Practices means offering, giving,
As a shareholder, director and employee, we all are receiving or soliciting, directly or indirectly,
passionate to strive to become role model of the anything of value to influence improperly the
principles. It is an organization of people who are actions of another party. Acceptance and
united to achieve the common goal. We are offering monetary/non-monetary benefits from
accountable for all our actions both individually / to people inside or outside the company that
and as a company. may jeopardize business processes shall be
considered as a serious violation of this code.
We act with absolute honesty, integrity and fairness Any favors/gifts extended by one employee to
in the way we conduct our business and in the way another intended for the employee's personal
we live and act. We observe strict compliance in the wellbeing or use should be immediately
organization discipline with respect to all the declined. Company shall not be responsible
applicable laws, company values, codes, policies, for some one's individual act to bribe
rules and regulations. someone. Receiving or offering of the bribe
will have same affect and repercussion in this
regard.
CODE OF CONDUCT 4. Fraudulent practices generally means cheating

by way of submission of fake bank guarantees
for award of contracts; or by submitting fake
PEL's Code of Conduct elucidate its mission, core inspection certificates or making fake calls with
values and business principles. Code of Conduct buying organization, submitting fake invoices
applies to directors, employees, affiliates and to company for reimbursement, providing
business partners with whom company has a incomplete or incorrect information to the
significant business relationship or over which company, its customers or business partners,
company has influence to adopt an equivalent deliberately obtaining benefits from the
commitment to prevent, detect, investigate and company which an individual is not eligible to
remediate any misconduct. receive and excessive or unnecessary use of
company's resources etc.
PEL discourages all sorts of misconduct and illegal,
unethical business practices and expects from "Our
People" to report if they are approached by
ORGANIZATIONAL
someone or required to do something or omit to
do something for any such improper purpose. Any
benefit or profit to the company shall not be
CULTURE
considered as a justification to absolve wrongdoer
from liability.
PEL has zero-tolerance policy for any form of Organizational culture at PEL is based on strongly
misconduct and if proven and leads to disciplinary held and widely shared set of values and beliefs
action being taken against all individuals involved. that are supported by our strategy and structure.
Disciplinary action by the company upon breach of Our culture sets the context for everything we do
this code shall not be in alternative of but shall be and is driven by our core values.
in addition to any criminal or civil proceedings
which PEL may, in its sole discretion, initiate against
the wrongdoer.
1. Collusive & Coercive Practices: PEL strictly
prohibits collusive practices i.e. entering into
an illegal agreement with anyone for
submission of a joint bid or submission of
identical tenders or for quoting pre-settled bid
price in consultation with competitors. Any
CORE
VALUES
Continued focus on Honesty and integrity in Adhering to high standards

customer satisfaction conducting business. of morality.
Being socially
responsible by giving
back to society.
GROUP STRUCTURE
PAK ELEKTRON LIMITED (PEL)

(PARENT COMPANY)
PEL contributes in your lives every day, by providing you not
just appliances for a better lifestyle, but with Power products
like transformers, switch gears and energy meters. We are the
pioneers of electrical manufacturing in Pakistan and we are
here to make a difference in your lives whether it is through
taking care of your home, your lifestyle, making your day to
day activities easier or by helping you save energy.
KOHINOOR INDUSTRIES LIMITED

(LEASING OUT PROPERTY AND MACHINERY)
Kohinoor Industries Limited is engaged
in leasing out its machinery and
building under operating lease
arrangements. Located at Kohinoor
Nagar, College Road, Madina Town,
Faisalabad. Kohinoor Industries Limited
is PEL’s associated company by virtue of
investment in ordinary shares by PEL
and common directorship.
THE FOUR SEASONS / THE MEADOWS

(A PROJECT OF REAL ESTATE)
The Four Seasons is a real estate project by Saigols which
launched its first project by the name of Four Seasons
Housing Scheme in 2007 that spans over 800 Kanals of
land area with 1000 housing units of various areas. The
objective of the project is to develop schemes designed
to meet all the requirements for a thriving commercial and
residential community built along futuristic lines that
ensures and enriches the quality of life. The Four Seasons
is an associated undertaking of the Company by virtue of
common partner/directorship. The Four Seasons is PEL’s
associated undertaking by virtue of common directorship.
RED COMMUNICATION ARTS (PRIVATE) LIMITED

(ADVERTISEMENT)
In 1996 RED COMMUNICATION was formed
to fulfill the gap in advertisement sector. To be
the best in the business, RED attracted the
best talent in the business and translated the
core belief into a full-fledged working
advertising machine. Its approach has helped
transform businesses by engaging consumers
and developing meaningful relationships with
them. RED has expanded into the three major
cities of Pakistan, and is among the fastest
growing AD agencies today. In 2008, RED
also became an affiliate of the Publicis
Groupe. Recently RED has extended its
business in Digital Sector. It has managed to
score a prominent position in the industry by
extensive growth through advertisement for
the leading brands of the country. It has won
many advertisement and reporting awards
like PAS, PAA etc. Red Communication Arts
(Private) Limited is PEL’s associated company
by virtue of common directorship.
SARITOW SPINNING MILLS LIMITED

(TEXTILE SPINNING)
In 1987, the Saritow Spinning Mills
located at Multan Road, Phool Nagar,
District Kasur was established under
the banner of Saigol Group of
Companies engaged in manufacturing
of yarn. Facilitated with the most
modern and efficient Japanese and
European Machinery, its knitted yarn is
renowned in Far east and Europe for its
finest quality. Saritow Spinning Mills
Limited is PEL’s associated company by
virtue of common directorship.
KOHINOOR ENERGY LIMITED

(POWER GENERATION)
Kohinoor Energy Limited was incorporated in April 1994
with an objective to take part in the prosperity of the
country through power generation. KEL having paid-up
capital of Rupees 1,695 million and is a joint venture of
Saigols Group of Companies (a well-known multi-
industrial group of Pakistan) and Toyota Tsusho
Corporation (an eminent consortium of multi-industrial
undertakings of Japan.) KEL is situated at 35-KM Link
Manga Raiwind Road Lahore. It is one of the pioneer
projects of Independent Power Producers in Pakistan. The
principle activities of the Company are to own, operate
and maintain a furnace oil power station with the net
capacity of 124 MW (gross capacity 131.44 MW). WAPDA
is the sole customer of KEL. Kohinoor Energy Limited is
PEL’s associated company by virtue of common
directorship.
HUMAN CAPITAL
Human Capital is considered as one of most
valuable resource at PEL. With significant
contributions towards the growth and
success of PEL, Human Capital remains one
the most important areas of focus as PEL
endeavors to ensure acquisition of top
talent and provision of best employee
development programs, healthy and safe
work environment and market
commensurate compensation packages.
SUCCESSION PLANNING
In its quest of the Top Talent, PEL has
formulated a comprehensive succession
plan which includes performance evaluation
and appropriate training requirements for
development of potential and prospective
future leaders. The succession plan allows
PEL to ensure availability of competent
personnel in each department.
RETIREMENT BENEFITS
PEL has put in place a retirement benefit
plan for its employees, in the form of an
approved funded contributory provident
fund “Pak Elektron Limited Employees
Provident Fund Trust”. All employees who
have completed a minimum qualifying
period of service as defined under the trust
are eligible. Equal monthly contributions are
made by PEL and employees in accordance
with the scheme, to cover the obligation.
Size of the fund as December 31, 2019

stood at Rs. 471 million. Investments of the
fund at the close of 2019 are valued at 430
million.
SIZE OF PROVIDENT FUND &

VALUE OF INVESTMENTS
500
450
400
350
Rupees in millons
300
250
200
150
100
50
-
2018 2019
Financial year
Size of fund Value of Investments
31% 34%
2019 2018
69% 66%
Deposit accounts with commercial banks Government Securities
MIX OF INVESTMENTS
ORGANIZATION CHART
Shareholders
Board of Directors
Audit Committee
Chief Executive
Officer
Manager Audit
Director Operations Director Finance
Sr. GM Marketing
Private Business
& WAPDA
Sr. Manager Sr. Manager

(Imports & Logistics) Corporate Finance
Sr. GM (Projects &
Private Sales)
PD
GM Manufacturing
Switchgear Finance Manager
(AD)/(PD) Financial Controller
Head of EPC
Functional Reporting
GM Manufacturing Administrative Reporting

Transformers
Company Secretary HR & Remuneration

Committee
GM Sr. Manager
Supply Chain Human Resources
GM
Chief IT Officer
IR & A
Sr. GM Sales Manager

(Appliances Division) Compliance
Sr. GM General Counsel-

Head of Legal &
Manufacturing & R&D Compliance
GM Sr. Manager
Manufacturing AC Marketing
& Deep Freezer (Appliances Division)
Manager
Manufacturing
Energy Meter
POSITION WITHIN THE VALUE CHAIN
APPLIANCES DIVISION
CUSTOMERS
General Public,
Retailers/Wholesalers,
Private/Corporate
Customers
FINAL PRODUCTS
Refrigerator, Deep
Freezer, Air Conditioner,
Smart LED TV, Microwave
Oven, Water Dispenser,
Washing Machine
CONVERSION & MANUFACTURING

Raw Material
Labour
Factory Overheads
RAW MATERIAL
Compressors, Condensers,
Coolants, Motors, Copper
pipes, Isocynate, Insulation
materials, Evaporators
POWER DIVISION
CUSTOMERS
WAPDA DISCOs, Private/
Corporate Customers
FINAL PRODUCTS
Distribution Transformer,
Power Transformer,
Energy Meter, Switchgear,
EPC Contracting
CONVERSION & MANUFACTURING

Raw Material
Labour
Factory Overheads
RAW MATERIAL
Copper coils, Silicon
steel sheets,
Transformer oil,
Magnet, Cables,
Cold-rolled grain
oriented (CRGO)
laminations
SIGNIFICANT FACTORS AFFECTING THE

EXTERNAL ENVIRONMENT
Businesses are influenced by the external environment that they're in and all the situational
factors that determine circumstances from day to day. It is because of this, that businesses
need to keep a check and constantly analyze the environment within which they operate and
respond to the changes accordingly. Some of the important factors that affect the Company's
external environment are as follows:
Significant change
Factors Description PEL's response
from prior year
These factors determine • Political The Company keeps a close

the extent to which a uncertainty eye on the political situation
government may of the country including
POLITICAL
influence the economy or changes in regulations and

a certain industry business policies in order to
be able to take timely
decisions to avoid any
unfavourable outcome on
the Company's business.
These factors are • Increase in Decline in general

determinants of an interest rates economic conditions has
economy's performance been the main cause of
that directly impacts a • Inflation decrease in profitability of
ECONOMIC
business and have • Rupee the Company.

resonating long term depreciation
effects.
• Reduced
Government
spending on
infrastructure
development
These factors scrutinize • Customers have The Company continuously

the social environment of become monitors customer
the market and gauge the technology characteristics and any
SOCIAL
demographic intensive changes there in and

characteristics, norms, marketing and product
customs and values of the • Decline in per development plans are
population within which capita devised and modified
the organization operates disposable accordingly.
income
Significant change
Factors Description PEL's response
from prior year
These factors pertain to • Energy efficient The Company recognizes

innovations in technology appliances have the importance of
that may affect the gained consumer-driven product
TECHNOLOGICAL
operations of the industry popularity development, makes

and the market favorably significant investments in
or unfavorably. This refers • Customers have research and development
to automation, research become and technologies, and
and development and the technology remains a technology
amount of technological intensive forerunner and market
awareness that a market leader in providing new
possesses. products and services to
meet the challenges and
technology intensive needs
of its customers.
These factors include • Finance Act, The Company has a

laws, rules and regulations 2019 professional in-house legal
that organizations are team, the members of
required to abide by. • New IFRSs and which are experts of their
amendments
LEGAL
respective fields as well as

thereto. has retained services of
accounting and law firms to
ensure that the Company
remains compliant with all
laws that are applicable.
These factors include all • Climate change Increase in average

those that influence or are temperature in the country
• Increase an
ENVIRONMENTAL
determined by the is expected to cause

surrounding environment. average increase in demand for
temperature. domestic appliances like Air
Conditioners, Refrigerators,
Deep Freezers and Water
Dispensers. The Company
has a proactive marketing
team capable of making the
most of this opportunity.
EFFECT OF SEASONALITY ON BUSINESS

Appliances Division’s cooling products; refrigerators, air conditioners, water dispensers and
deep freezers are season oriented products. The peak production and sales period is from
April to August, while other products are produced and sold through out the year. Power
Division products are produced and sold through out the year depending on ordering form
WAPDA Discos.
LOCAL VS IMPORTED RAW MATERIAL AND

IMPACT OF EXCHANGE RATE FLUCTUATION
The Company sources a significant part of its material procurement from international
markets. Majority of these are imported directly, however some the imported material is also
procured from local importers/vendors.
71% of the material procured during the year
was imported while 29% was sourced locally.
This exposes the Company to changes in
exchange rates which have an important
bearing on the financial performance of the
Company. Keeping all other factors constant,
a 5% depreciation or appreciation in Pak Imported 71%
Rupee during the year would have had an Local 29%

estimated impact of approximately Rs. 5.1
million on the profit before taxation. COMPOSITION OF RAW MATERIAL
SIGNIFICANT CHANGES FROM PRIOR YEAR

A. The Company has adopted the following new International Financial Reporting
Standards that have become effective during the year.
1. IFRS 9 'Financial Instruments': IFRS 9 introduces new requirements for the
classification and measurement of financial assets and financial liabilities, impairment
of financial assets and general hedge accounting.
2. IFRS 15 'Revenue from Contracts with Customer's: IFRS 15 establishes a five-step
model to account for revenue arising from contracts with customers. Under IFRS 15,
revenue is recognized at an amount that reflects the consideration to which an entity
expects to be entitled in exchange for transferring goods or services to a customer.
3. IFRS 16 'Leases': IFRS 16 sets out the principles for the recognition, measurement,
presentation and disclosure of leases and requires lessees to account for most leases
under a single on-balance sheet model.
B. In line with the Company's vision of product diversification, the Company has set up its
Washing Machine production line during the year and made entry in the market. The
Company made a massive launch with advertisement campaigns all across the country to
stamp the product awareness. Further, various new models of existing products with
improved features and aesthetics were launched during the year.
B
STRATEGY AND
RESOURCE
ALLOCATION
B 02 Pak Elektron Limited
OBJECTIVES AND STRATEGIES

Our short, medium and long term strategic objectives, strategies in place to achieve those
strategic objectives, KPIs monitored and their future relevance are as follows:
Relevant term Objective Strategies KPI's monitored
Short Term Product innovation and Improve existing • Improved product

development product features and features and
aesthetics through aesthetics for
research and existing products.
development and
• No of new models
efficient market
research for existing products
launched.
Short Term Development of Technical and non- • Training and

human capital technical training education programs
programs for for employees.
employees at all levels
both internally and
externally
Short Term Occupational health Ensure a safe and • Health and safety
and safety for congenial environment policies in place
employees for employees through
strict and stringent • Training activities
safety policies and conducted
regular health and • Number of health
safety trainings to and safety incidents.
avoid risk of accident
Short Term Maintaining supplier Monitor cash flow • Payable days
relationships requirements and
produce cash flow
projections for
payables to ensure that
timely payments are
made as and when due
Short Term Maintaining customer Improve access to • Sale/service center

relationships customers through a and dealer network
nationwide sale/service
• After sales services
center and dealer
network, continuous • Customer feedback
focus on after sales
services and monitor
customer feedback
Short Term Be a socially Promote a culture of • CSR initiatives and
responsible corporate giving back to the activities
entity community
Short / Have sufficient liquidity Monitor cash flow • Liquidity ratios

Medium / to meet liabilities when requirements and
Long term due produce cash flow • Timely payments
projections for the
short and long term.
Annual Report 2019 B 03
Relevant term Objective Strategies KPI's monitored
Maintain balance sheet

liquidity ratios, debtors
and creditors
concentration both in
terms of overall
funding mix and avoid
undue reliance on
large individual
customer.
Medium Diversification Continuously seek • Product range

Term avenues to diversify
within and outside the
Appliance and Power
Industry
Medium Enhance production Keep up-to-date with • Technology
Term facilities and processes the latest technology upgradation
to improve efficiency advancements to activities.
achieve production
efficiencies
Long Term Increase shareholder's Build on short and • Market share price
wealth medium term
objectives to increase
shareholder's wealth
Long Term Maintain industry Planned and • Market share

leadership and market integrated marketing
• Sales, service center
presence campaigns and
increasing access to and dealer network.
customers through a
nationwide sale/service
center and dealer
network
There were no significant changes in objectives and strategies from prior years. Further, all of
the above KPIs will continue to be relevant in future.
STRATEGY
RESOURCE ALLOCATION PLAN
Rs.
MANUFACTURED RELATIONSHIP HUMAN INTELLECTUAL FINANCIAL

CAPITAL CAPITAL CAPITAL CAPITAL CAPITAL
PEL is committed to provide best value to all its employees. Various technical and non-
its stakeholders for their engagement with technical training programs are carried out
the Company through efficient resource for employees at all levels both internally
allocation. and externally.
Manufactured Capital Financial Capital
The Company has continued focus on The Company currently has a long-term
product innovation and development and debt of Rs. 4,648 million and short-term
diversification. To achieve this the Company borrowings amounting to Rs. 10,955 million
does substantial spending on research and at the close of 2019. Long term debt is
development with the objective of obtained to finance capital expenditure and
improving features and aesthetics of exiting long term working capital which indirectly
product range and marker research to seek backs manufactured capital of the Company.
avenues for diversification within and Short term borrowings are contracted to
outside the appliance and electrical capital finance short term working capital
goods industry. The Company recognizes requirements in accordance with the
the importance of consumer driven product liquidity management framework of the
development and allocates resources Company, thereby supporting Human,
accordingly. Intellectual and Relationship Capital of the
Company.
Resources are also allocated for planned
and integrated marketing campaigns and Intellectual Capital
increase access to customers through a
nation-wide sales/service center and dealer The Company recognizes the importance of
network aimed at maintaining industry being a technology forerunner in order to
leadership and market presence. Further, achieve efficiencies and economies of scale.
the Company spares no expense in keeping The Company invests in development of
itself up-to-date in terms of technology as intellectual capital including product design
the Company recognizes that in order to and development, market research,
achieve efficiencies and economies of scale, management information systems, research
it has to remain a technology forerunner. and development, trademark protection and
licensing.
Human Capital
Social and Relationship Capital
Human Capital is considered as one of the
most valuable resources at PEL. With We believe that our sustainability depends
significant contributions towards the growth on our ability to maintain strong
and success of the Company, Human relationships with customers, vendors and
Capital remains one the most important with the society/community for whom we
areas of focus as the Company endeavors to also create value. A sizeable budget is
ensure acquisition of top talent and allocated for initiatives that align our
provision of best employee development activities with our stakeholder's expectations
programs, healthy and safe work whether it's our customers, suppliers, the
environment and market commensurate community, our employees and society as a
compensation packages. whole. We also contribute to the
society/community through a broad range
The Company also allocates adequate of community initiatives, charitable giving,
resources for training and development of foundation grants and volunteerism.
Annual Report 2019 B 05
BUSINESS MODEL
Our business model is at the heart of our strategy.
It enables us to prosper and positions us well to
deliver continued growth.
SUSTAINABILITY
Customer satisfaction is the one of main areas of focus
in our sustainability model which is achieved through a
comprehensive quality assurance mechanism and

excellent after sales services. Liquidity is the key to
smooth running of operations. Adequate reserves and
banking facilities are maintained by continuously
monitoring of forecasts and actual cash flows.
Continuous research and development has allowed us

to emerge as technology and innovation leader in the
GROWTH DRIVERS
industry.
Our growth is primarily driven by
increase in sales revenue resulting from
strong demand forour products and our
presence nationwide and internationally.
We have continued focus on improving

production effciencies and economizing
costs which, in turn contributes towards
improved profitability.
Effective planning is the key to achieving

our management objectives. Continuous
KEY ASSETS
monitoring enables us to identify gaps
and improve our planning process.
Human Capital, being our most important asset,

directly affects our performance.
Market goodwill and brand image is another

valuable asset that has been, and continues to
be, the primary ingredient to our
accomplishments.
Keeping abreast with latest technology is key

input to our continuous efforts to produce
innovative high quality products.
Our nationwide distribution network and

international presence enables us to reach a
wide range of customers.
LIQUIDITY MANAGEMENT
Liquidity Position
The Company's liquid assets comprise short
term investments and cash and bank balances
which stood at an aggregate of Rs. 535.5 million
at the close of 2019. Current ratio
Liquidity management 3.00
PEL continuously aims to maintain a strong 2.50
liquidity position through an effective liquidity 2.00
Times
management system to ensure availability of 1.50
sufficient working capital. The Board of 1.00
Directors has built an appropriate liquidity 0.50

management framework for the management -
of short, medium and long-term funding and 2014 2015 2016 2017 2018 2019
Years
liquidity requirements.
The Company's approach to managing liquidity
Quick Ratio
risk is to ensure, as far as possible, that it will
always have sufficient liquidity to meet its 2.00
1.80
liabilities when due, under both normal and 1.60
stressed conditions, without incurring 1.40
1.20
Times
unacceptable losses or risking damage to the 1.00

Company's reputation. The Company monitors 0.80
0.60
cash flow requirements and produces cash flow 0.40
projections for the short and long term. 0.20
-
Typically, the Company ensures that it has 2014 2015 2016 2017 2018 2019
sufficient cash on demand to meet expected Years
operational cash flows, including servicing of

financial obligations. This includes maintenance Liquid assets
of balance sheet liquidity ratios, debtors and
700
creditors concentration both in terms of overall 600
Rupees in million
funding mix and avoidance of undue reliance 500

on large individual customer and matching the 400
maturity profiles of financial assets and 300

200
liabilities. 100
-
Cash flow projections for the future indicate 2014 2015 2016 2017 2018 2019
availability of sufficient funds for timely Years
repayment of external debts as well as for Cash and bank balances Short term investments
retention for sustained profitability.
SIGNIFICANT PLANS AND DECISIONS

Company has a robust growth history by expanding its market share and up keep of higher
customer satisfaction level and brand equity. All necessary improvements in manufacturing
and testing facilities were made for market competitiveness and brand up keep. Further, to
cater the growth factor, necessary plant capacity expansion managed compactable latest
product designs to explore exports market. Company on the consistent market demand
enhanced its product range. During the year under review washing machine manufacturing
facility after successful commissioning started commercial production. Company is setting up
a Power Transformer manufacturing facility at 34 KM Ferozepur Road Lahore, which will be
completed in next year.
C
RISKS AND
OPPORTUNITIES
C 02 Pak Elektron Limited
RISKS AND OPPORTUNITIES

PEL's activities expose it to a variety of risks developing and monitoring PEL's risk
which are subject to difference levels of management policies.
uncertainty against which PEL has
implemented effective mitigating strategies. The Audit Committee oversees how
These risks can emanate from a number of management monitors compliance with
factors including but not limited to PEL's risk management policies and
uncertainties in financial markets, project procedures and reviews the adequacy of the
failures, legal liabilities, credit risk, accidents risk management framework in relation to
and disasters as well as deliberate the risks faced by PEL. The Audit Committee
aggressive actions from an adversary, or is assisted in its oversight role by Internal
uncertain or unpredictable events. Audit department. Internal Audit
department undertakes both regular and ad
Risk Governance Structure hoc reviews of risk management controls
and procedures, the results of which are
PEL's risk management policies are reported to the Audit Committee.
established to identify and analyze the risks
faced by PEL, to set appropriate risk limits The Human Resource & Remuneration
and controls, and to monitor risks and Committee focuses on risks in its area of
adherence to limits. Risk management oversight. This includes succession planning
policies and systems are reviewed regularly with a view to ensure availability of talented
to reflect changes in market conditions and functionaries in each area of critical
PEL's activities. PEL, through its training and company operations as well as assessment
management standards and procedures, of compensation programs to ensure that
aims to develop a disciplined and they do not escalate corporate risk.
constructive control environment in which
all employees understand their roles and Risk Assessment
obligations. The Board of Directors have carried out a
The Board of Directors has overall robust assessment of the principal riks
responsibility for the establishment and facing the Company, including those that
oversight of PEL's risk management wood threaten the business model, future
framework. The Board is responsible for performance, solvency or liquidity.
RISKS AND MITIGATION STRATEGIES

Likelihood /
Risk Source Capital affected Mitigation strategy
Magnitude
Technological shift Moderate / External Manufactured / Regular balancing,
may render PEL's High Intellectual Capital modernization and
production process replacement carried
obsolete. out at all production
facilities in order to
ensure state of the
art production
plants utilizing latest
technology resulting
in cost efficiencies
and improved
products.
Strong market Low / External Manufactured / PEL holds a
competition Moderate Intellectual Capital considerable market
lowering demand share and has
for PEL's products continued focus on
sustaining and
Annual Report 2019 C 03
Likelihood /
Magnitude
maintaining its
market share
through offering
new and improved
products and
effective marketing
strategies
Turnover of Low / Internal Human Capital PEL has formulated

personnel at critical Moderate a comprehensive
positions may affect succession plan
smooth running of which includes
operations performance
evaluation and
appropriate training
requirements for
development of
potential and
prospective future
leaders
Breach of IT Security Low / High Internal Financial / Adequate IT controls
may affect Intellectual Capital are in place to
operations and prevent
cause financial and unauthorized data
data loss access to
confidential
information. Regular
IT audits and
trainings are
conducted to
monitor IT controls
Accidents and Low / High Internal / Manufactured / PEL has put in place
disasters, natural or External Financial / a comprehensive
by deliberate Intellectual Capital Disaster Recovery
actions, may disrupt and Business
operations Continuity Plan
which has been
implemented at all
locations and PEL's
staff is fully trained
and equipped to
recover from any
disruption
Further strict and
standard operating
procedures are in
place and
implemented
together with

Likelihood /
Magnitude
employee trainings,
operational
discipline and
regular safety audits
Loss of customer Low / High External Manufactured Continued focus on

confidence in PEL Capital new and improved
brand adversely products and state
affecting sales of the art after sales
services to
customers
Breach of law Low / High Internal Manufactured / Monitoring of latest

resulting in fines, Financial Capital updates in
penal action or regulatory
suspension of framework is carried
business operations out to prevent in
breach of law. Expert
legal advice is
obtained before
taking any critical
decision
Default by Low / Internal Financial / PEL maintains

customers causing Moderate Relationship Capital procedures covering
financial loss the application for
credit approvals,
granting and
renewal of
counterparty limits
and monitoring of
exposures against
these limits. As part
of these processes
the financial viability
of all counterparties
is regularly
monitored and
assessed.
Outstanding
customer
receivables are
regularly monitored
and any shipments
to major customers
are generally
covered by letters of
credit or other form
of credit insurance.
Likelihood /
Magnitude
Liquidity shortfall Low / Internal Financial Capital The responsibility
resulting in inability Moderate for liquidity risk
to make payments management rests
as the fall due with the Board of
Directors, who has
built an appropriate
liquidity risk
management
framework for the
management of the
PEL's short, medium
and long-term
funding and liquidity
management
requirements.
Liquidity risk is
managed by
maintaining
adequate reserves,
banking facilities
and reserve
borrowing facilities,
by continuously
monitoring forecast
and actual cash
flows and matching
the maturity profiles
of financial assets
and liabilities
Increase in interest Moderate / External Financial Capital PEL manages

rates resulting high Moderate interest rate risk by
interest costs analyzing its interest
rate exposure on a
dynamic basis. Cash
flow interest rate risk
is managed by
simulating various
scenarios taking into
consideration
refinancing, renewal
of existing positions
and alternative
financing. Based on
these scenarios, the
management
calculates impact on
profit after taxation
and equity of
defined interest rate
shift, mostly 100
basis points

Likelihood /
Magnitude
Rupee depreciation High / High External Manufactured / The Company does
causing increase in Financial Capital continuous
costs monitoring of
expected/forecast
committed and non-
committed foreign
currency payments
and receipts. Reports
on forecast foreign
currency
transactions, receipts
and payments are
prepared on
monthly basis,
exposure to currency
risk is measured and
appropriate steps
are taken to ensure
that such exposure is
minimized
OPPORTUNITIES AND MATERIALIZATION STRATEGIES
Opportunity Source Capital affected Materialization strategy
There are still numerous Internal Manufactured Continuously seek

unexplored product lines Capital avenues to diversify
that are offered by current within and outside the
competitors of PEL. Appliance and Power
Industry
Demand for grid station External Manufactured The company is aiming

installations and Capital to capitalize on its brand
underground and on equity and commercial
ground electrifications due relations with WAPDA
to increase in housing Distribution Companies
sector schemes, in the emerging CPEC
upgrading of grid stations, Scenario along with
government's focus investment in initiatives
towards augmentation of to enhance relationships
transmission and dispatch with customers in the
Infrastructure and CPEC private/corporate sector
MATERIALITY APPROACH
Matters are considered to be material, if they, individually or in aggregate, are expected to
significantly affect the performance and profitability of the Company. Powers of the Board of
Directors and the management of PEL have been defined with reference to, and in compliance
with relevant regulatory framework, the Articles of Association of PEL, guidelines and
frameworks issued by professional bodies and best practices. Authorizations for transactions
and delegation of powers have also been defined clearly and carried out through formal and
implemented policies and procedures. Materiality levels are reviewed on a periodic basis and
updated as required.
SWOT ANALYSIS
STRENGTHS
• Product diversification
• Sufficient production capacity to
absorb the increase in volumes
• Technical Collaboration with
international reputed
organizations
• Latest Technologies
• Excellent labour skills to execute
Power Division orders
• Focused Research and
Development strategy
• Strong country wide dealers
network
• Strong, efficient and broad after
sales network
WEAKNESSES
• The Company has high financial

leverage
OPPORTUNITIES
• Government has plans to up

grade existing electricity infra
structure resulting into more
orders for Power Division.
• Appliances market is showing
growth.
• Local industry preferential
protection in international tenders.
THREATS
• Availability of timely working

capital
• Law and order situation and
political disturbance in the country
• Dependence on WAPDA/ DISCOs
Financial health
• Devaluation of Pak Rupee
• Change in regulatory framework
CAPITAL STRUCTURE
PEL's capital structure comprises of Rs. 4,977 million of ordinary share capital with net worth of Rs.
12,392 million, preferred share capital of Rs. 450 million, reserves of Rs. 24,853 and long term debt
(including current maturity) of Rs. 4,520 million at the close of 2018 with a debt-equity ratio of 13:87 as
compared to 18:82 in 2017.
Capital Structure
40,000
35,000
30,000
Rupees in million
25,000
20,000
15,000
10,000
5,000
-
2014 2015 2016 2017 2018 2019
Years
Orindary share capital Preferred share capital

Reserves Long term debt
REPAYMENT OF DEBTS
The Group's external long term debt stood at Rs. 4,648 million at the close of 2019 recording a net
increase of Rs. 128.38 million.
Short term borrowings showed an decrease of Rs. 1,888 million due to increase in cash generation
from operations resulting in lesser reliance on external borrowings for working capital requirements.
PEL is in the process of finalizing re-profiling exercise based on mutual agreement to be made
amongst the existing investors for redemption/settlement of outstanding preference shares.
PEL has remained current in debt servicing throughout the year. All payments on account of principal
repayments and interest have been made by due dates.
D
GOVERNANCE
D 02 Pak Elektron Limited
BOARD OF DIRECTORS
M NASEEM SAIGOL
Chairman/Non-Executive
Mr. M. Naseem Saigol is the Chairman of the Saigol Group of Companies including PEL. He holds a degree
in chemical engineering from USA. Mr. M. Naseem Saigol came up with the vision to serve the nation
through power industry in 1994 when Pakistan was facing a severe shortage of power supply. He joined
hands with Tomen Corporation Japan (later on acquired by Toyota Tsusho Corporation, Japan) and formed
Kohinoor Energy Limited (KEL) as an Independent Power Producer. KEL is proudly contributing to the dire
power needs of the country.
Mr. M. Naseem Saigol has been the Chairman of All Pakistan Textile Mills Association (APTMA), Vice
President of Lahore Chamber of Commerce and Industry, President of Faisalabad Chamber of Commerce
and Industry, and is member of Industrial Employers' Association. He holds the office of Honorary Consulate
of Belgium. Mr. M. Naseem Saigol through his business group in terms of services, manufacturing home
appliances and electrical equipment, textile products and exports thereof, and power generation, is not only
contributing to exchequer and the GDP of the country but also bestows businesses to local vendor industry
and provides job opportunities to thousands of Pakistanis. He, being an eminent textile entrepreneur, has
also the honor to provide technical and management expertise to the governments of Libya, Somalia and
Tanzania for establishing textile industry in their countries.
Mr. M. Naseem Saigol is also on the Boards of Kohinoor Energy Limited, Saritow Spinning Mills Limited,
Kohinoor Industries Limited and Kohinoor Power Company Limited.
M. MURAD SAIGOL
Chief Executive Officer
Mr. M. Murad Saigol is the Chief Executive and Managing Director of the Company. He did his
graduation from School of Oriental and African Studies, London UK. He looks after all of the Strategic
and Operational affairs of the Company. He joined PEL in 2005 and achieved certain land marks in
Company Business. In his current role he is responsible to drive the Company affairs in accordance
with Board of Directors Vision and Mission. He is a Corporate Governance Certified Director under
Directors Training Program.
Mr. M. Murad Saigol is also on the Boards of Saritow Spinning Mills Limited, Kohinoor Industries
Limited and Kohinoor Power Company Limited.
M. ZEID YOUSAF SAIGOL

Executive Director
Mr. M. Zeid Yousaf Saigol is an Executive Director on the Board of PEL. He holds Bachelors in Science
(BS) in Chemical Engineering from Carnegie Mellon University USA.
He is associated with Company since 2011 and is leading the Company's Power Division Operations.
He is a Corporate Governance Certified Director under Directors Training Program.
Mr. M. Zeid Yousaf Saigol is also on the Boards of Saritow Spinning Mills Limited, Kohinoor Industries
Limited and Kohinoor Power Company Limited.
SYED MANZAR HASSAN

Executive Director & CFO
Syed Manzar Hassan is an Executive Director on the Board of PEL and is also the Chief Financial Officer of
the Company. He is a Fellow Member of Institute of Chartered Accountants of Pakistan. He has over 20
years' experience in Financial Management, Financial & Management Reporting and handling Corporate
Matters with a Specialization in Corporate Finance. He joined PEL in 1998 and is responsible for financial
matters including budgeting and financial planning. In his current role, he is responsible for all necessary
financing arrangements for smooth cash flow, budgeting and business planning, management and
corporate accounting, company taxation and regulatory issues and company IT resource management. He is
a member of the Company's Human Resource & Remuneration Committee. He is a Corporate Governance
Certified Director under Directors Training Program.
Annual Report 2019 D 03
MUHAMMAD KAMRAN SALEEM

Independent Non-Executive Director
Mr. Muhammad Kamran Saleem holds L.L.M., ACA (Eng. & Wales), FCA (Pak.), FCMA, FCIS. He is also
the chairman of standing committee on Takaful and Window Takaful at Federation of Pakistan Chamber
of Commerce and Industry. He is a founding management employee at Pak Qatar Group. Mr.
Muhammad Kamran Saleem is Chief Executive Officer at Pak Qatar Investments (Private) Limited and
currently holds title of 'Director-Finance and Company Secretary' at Pak-Qatar Family Takaful Limited.
He has been member of team achieving key milestones i.e. implementation of SAP (FICO), Shariah and
Statutory Reporting, Taxation and Compliance for Insurance and Takaful Industry In Pakistan. He also
supervises Treasury through Fund Managers and is member of Investment Committee at Pak-Qatar
Family Takaful Limited with oversight of PKR 20 Billion in various assess classes. Being a qualified
lawyer, he also supervises legal team and has exposure in handling legal queries and cases at Pak-
Qatar Group including supervision of Risk Management Committee. He has also served in Automobile,
Sugar and Textile Conglomerate apart from his audit and consultancy assignments as external auditor
during professional practice.
He is a Corporate Governance Certified Director under Directors Training Program.
SYED HAROON RASHID

Independent Non-Executive Director
Syed Haroon Rashid has over twenty years of experience in corporate Finance and strategic
management having worked in various Financial as well as non-Financial institutions. He started his
career with the Experts Advisory Cell, a successor to the Board of Industrial Management, established
to assist the Ministry of Production in the management & control, corporate planning and performance
evaluation of public sector industrial enterprises in sectors ranging from fertilizer, automobiles, heavy
engineering, chemicals, petroleum, cement to steel. Subsequently, he served as Advisor with the
Investment Corporation of Pakistan which was the first closed-end mutual fund established in Pakistan
in the early 1960's. Later, he joined the Zarai Taraqiati Bank Ltd. as part of a senior management team
formed for the restructuring of the Bank where he served as Head, Restructuring (Project Loans) as well
as Head, Project Implementation Unit of the Asian Development Bank. He played a major role in
restructuring of corporate loan departments of the organization and worked to successfully revitalize
them. He is also a training consultant with the National Institute of Banking and Finance, Islamabad
(State Bank of Pakistan).
Syed Haroon Rashid has also served as NIT's (National Investment Trust) Director on Boards of various
public listed companies. He is also a Certified Director of the IFC (World Bank Group) sponsored by
Pakistan Institute of Corporate Governance.
Syed Harron Rashid is also on the Boards of Saritow Spinning Mills Limited, Baluchistan Wheels Limited
and Ghandara Nissan Limited.
OTHER DIRECTORS
In addition to the above directors the following are Nominee Independent Non-Executive Directors on
the Board of PEL.
1.) Asad Ullah Khawaja | Nominated by National Investment Trust
2.) Usman Shahid | Nominated by National Bank of Pakistan
3.) Azra Shoaib | Nominated by National Bank of Pakistan
BOARD OF DIRECTORS
COMPOSITION OF THE BOARD OF
DIRECTORS 17%
33% 33%
In order to ensure transparency, good
governance and smooth functioning of the 67%
50%
Company's operations, the Company has
implemented the regulatory framework in
terms of qualification, experience and Independent Directors
Executive Directors
Nominee Directors
composition of the Board of Directors as Other Non-Executive Directors
Non-Executive Directors
well as awareness of the Board Composition of

Non-Executive Directors
Composition of the Board
responsibilities. The Board comprises 9

directors effectively representing All directors are highly qualified and
shareholders' interests. There are 6 non- experienced and come from varied
executive directors including 2 independent discipline, which enables the Board to carry
directors and 3 directors nominated by out effective and efficient decision making.
holders of special interest under now Detailed profile of each member of the
Section 164 of the Companies Act, 2017. Board is presented page D-02.
INDEPENDENT DIRECTORS
The Company has 2 Independent Directors on its Board; Mr. Muhammad Kamran Saleem and
Syed Haroon Rashid who meet the definition of independence provided by Companies Act
2017 and they have submitted to the Company their declarations to this effect.
FEMALE DIRECTOR
Ms. Azra Shoaib is the only female director on the Board of Directors of the Company.
MEETINGS OF THE BOARD

The Board of Directors meets atleast four times every year as required by the regulatory
framework. Special meetings are also called to discuss and decide on important matters as
and when required. The Board met 4 times during the year. The notices, along with agenda,
were circulated in a timely manner.
The decisions taken by the Board were clearly documented in the minutes of meetings
maintained by the Company Secretary and were circulated to all directors for endorsement
within the stipulated time and were approved by the Board in subsequent meetings. All
Board Meetings were held in Pakistan during the year, had the requisite quorum as
prescribed by Code of Corporate Governance and were also attended by the Chief Financial
Officer and Company Secretary.
Name of Directors Attendance ATTENDANCE OF BOD MEETINGS
M. Naseem Saigol 4 10
No. of Directors present
M. Murad Saigol 3
08
M. Zeid Yousuf Saigol 3
Syed Manzar Hassan 4 06
Syed Haroon Rashid 4 04

Sheikh Muhammad Shakeel 2
02
Asad Ullah Khawaja 4
Usman Shahid 3 -
1st 2nd 3rd 4th
Jamal Baquar 1
Meetings of the Board
Azra Shoaib 2
Attendance Quorum required
Muhammad Kamran Saleem -
BOARD OPERATIONS the Board of Directors while Mr. Sheikh

Muhammad Shakeel, an existing director
Each member of the Board is fully aware of did not contest elections. Further, the
his responsibilities as an individual member Nominee Director Mr. Jamal Baquar was
as well as the responsibilities of all members
withdrawn by National Bank of Pakistan.
together as a board.
The Board actively participates in all major ANNUAL EVALUATION OF BOARD’S
decisions of the Company including PERFORMANCE
appointment approval of capital
expenditure budgets, investments, issuance PEL has put in place a comprehensive
of equity and debt capital, related party mechanism for undertaking annual
transactions and appointment of key evaluation of the performance of the Board
personnel. of Directors in accordance with the
The Board also monitors the Company's requirement of the Code of Corporate
operations by approval of financial Governance.
statements, review of internal and external The mechanism evaluates the performance
audit observations, if any and of the Board on the following parameters:
recommendation of dividend.
• Board composition, organization and
The Board has devised formal policies for scope
conducting business and ensures their • Board functions and responsibilities
monitoring through an independent Internal • Monitoring of Company's performance
Audit Department which continuously
monitors adherence to Company Policies. Evaluation forms and checklists are
circulated to all members of the Board and
The responsibility of implementing the each member is required to submit the
strategies as approved by the Board of same duly filled to the Company Secretary.
Directors is that of the management. The The results are consolidated and discussed
management conducts the routine business in the nest meeting to formulate a strategy
operations of the Company in an effective for improvement in Board's performance.
and ethical manner in accordance with the
strategies and goals approved by the Board
and identifies and administers the key risks
OFFICE OF THE CHAIRMAN AND
and opportunities which could impact the CHIEF EXECUTIVE OFFICER
Company in the ordinary course of The office of Chairman and that of the Chief
execution of its business. Management is Executive Officer of the Company are held
also concerned in keeping the Board separately, as part of the Company's
members updated regarding any changes governance structure, with clear division of
in the operating environment or risk profile. roles and responsibilities.
It is also the responsibility of management,
with the oversight of the Board and its Audit ROLES AND RESPONSIBILITIES OF
Committee, to prepare financial statements THE CHAIRMAN AND CHIEF
that fairly present the financial position of EXECUTIVE OFFICER
the Company in accordance with applicable
accounting standards and legal The Chairman acts as the head of the Board
requirements. and is responsible for assessing and making
recommendations regarding effectiveness
of the Board and ensuring effective role of
CHANGES TO THE BOARD
the Board in fulfilling all its responsibilities
Election of directors was held on October and has the power to set agendas, give
21, 2019, wherein a new member Mr. directions and sign the minutes of Board
Muhammad Kamran Saleem was elected on meetings.
BOARD OF DIRECTORS
The Chief Executive Officer is an executive DIRECTORS' TRAINING PROGRAM
director who also acts as the head of the
The following directors have obtained
Company's management in the capacity of
certification under the Directors' Training
managing director and implements the
Program from SECP approved institutes in
policies delegated by the Board within the
accordance with requirements of the Code
limits prescribed.
of Corporate Governance:
The main responsibilities of the Chief 1. M. Murad Sagol
Executive Officer include:
2. M. Zeid Yousuf Saigol
• Safeguarding the Company's assets 3. Muhammad Kamran Saleem
• Creation of shareholder value 4. Syed Haroon Rashid
• Identification of potential 5. Syed Manzar Hassan
• diversification/investment projects Certifications of the remaining members of

the Board are expected to be completed as
• Implementation of projects approved by per schedule prescribed by Listed
the Board Companies (Code of Corporate
• Ensuring effective functioning of the Governance) Regulations, 2019.
internal control system
DIRECTORS' REMUNERATION
• Identifying risks and designing mitigation
strategies There are formal and transparent
procedures for fixing the remuneration of
• Development of human capital and good
directors and no director is involved in
investors' relations
deciding his own remuneration.
• Compliance with regulations and best Remuneration levels are kept at a
practices. reasonable level in order to attract and
retain directors, without compromising
FORMAL ORIENTATION AT INDUCTION independence.
New members of the Board are taken
through a detailed orientation process at FOREIGN DIRECTORS
the time of induction. The orientation The Company does not have any foreign
process involves a familiarization program directors on its Board.
which mainly features the following:
• Vision, mission, core values and strategies IMPLEMENTED GOVERNANCE
and stakeholders. PRACTICES VS LEGAL
REQUIREMENTS
• Significant policies
PEL as an organization encourages
• Summary of financial position
proactive and accountable management
• Risks exposure and management system to ensure transparency and
compliance with laws. To further strengthen
• Critical performance indicators implementation of the same, PEL has well
• Roles and responsibilities of director composed and structured policies and
under the statute procedures based on international
standards that are ahead of our laws and
• Expectations from the Board regulations. For this we have instituted a
• Facets of business including strategic comprehensive legal and compliance
plans, forecasts, minutes of past meetings function in the company that goes beyond
legal requirements.
and litigations.
RELATED PARTIES
Related parties from the Company's perspective comprise subsidiary, associated companies
and undertakings, key management personnel and post employment benefit plan. Key
management personnel are those persons having authority and responsibility for planning,
directing and controlling the activities of the Company, directly or indirectly, and includes the
Chief Executive and Directors of the Company. The details of Company's related parties, with
whom the Company had transactions during the year or has balances outstanding as at the
reporting date are as follows:
Aggregate
%age of
shareholding
Name of related party Nature of relationship Basis of relationship Nature of transaction in the Company
Pak Elektron Limited Provident Fund Trust Contribution to N/A

Employees Provident Fund Trust provident fund
PEL Marketing (Private) Limited Subsidiary Investment Sale of goods N/A
Expense allocation
Kohinoor Power Company Limited Associated company Investment Purchase of services N/A
Red Communication Arts (Private) Limited Associated undertaking Common Directors Purchase of services N/A
Mr. M. Murad Saigol Key management personnel Chief executive Remuneration 0.0025%
Mr. M. Zeid Yousuf Saigol Key management personnel Director Remuneration 2.9637%
Mr. Syed Manzar Hassan Key management personnel Director Remuneration 0.0004%
The Board of Directors has approved a policy for Related Party Transactions, which require
that the company shall carry out transactions with its related parties on an arm's length basis
in the normal course of business. The term 'arm's length' requires conducting business on the
same terms and conditions as the business between two unrelated / unconcerned persons.
The policy specifies that all transactions entered into with related parties shall require Board's
approval.
There were no transactions with related parties on non-arm’s length basis.
PREPARATION AND FAIR PRESENTATION

OF THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with the accounting and reporting standards as applicable in
Pakistan and the requirements of Companies Act, 2017 (XIX of 2017) and for such internal
control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's
ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of directors is responsible for overseeing the Company's financial reporting process.
AUDIT COMMITTEE
Composition Designation sales, receipts and
payments, assets and
Mr. Asad Ullah Khawaja Chairman
liabilities and the reporting
Mr. Usman Shahid Member structure are adequate and
Sheikh Muhammad Shakeel Member effective.
Syed Haroon Rashid Member j) Review of Company's
statement on internal
control system prior to
Directors 28th 26th 23rd 30th Total
March April August October Attended endorsement by the Board
of Directors and internal
Mr. Asad Ullah Khawaja 4 audit reports.
Mr. Usman Shahid 3
k) Instituting special projects,
Sheikh Muhammad Shakeel 2 value for money studies or
Syed Haroon Rashid 4 other investigations on any
Syed Manzar Hassan 1 matter specified by the
Board of Directors, in
d) Facilitating the external consultation with the CEO
Salient Features & Terms
audit and discussion with and to consider remittance
of References of any matter to the
external auditors of major
The Board of Directors of the observations arising from external auditors or to any
Company have determined the interim and final audits and other external body.
following term of reference of any matter that the auditors l) Determination of
the Audit Committee: may wish to highlight (in compliance with relevant
a) Determination of the absence of statuary requirements.
appropriate measures to management, where
necessary). m) Monitoring compliance
safeguard the Company's with the best practices of
assets. e) Review of Management corporate governance and
b) Review of preliminary Letter issued by external identification of significant
announcements of results auditors and violations thereof.
prior to publication. management's responsible
thereto. n) Review of arrangement for
c) Review of quarterly, half staff and management to
yearly and annual financial f) Ensuring coordination report to audit committee
statements of the between the internal and financial and other matters
Company, prior to their external auditors of and recommend instituting
approval by the Board of Company. remedial and mitigating
Directors, focusing on: g) Review of the scope and measures;
• Major judgmental areas, extent of internal audit and o) Recommend to the Board
ensuring that the internal of Directors the
• Significant adjustments audit function has appointment of external
resulting from the audit, adequate resources and is auditors, their removal,
appropriately placed within audit fees, the provision of
• The going concern the Company.
assumption, any service permissible to
h) consideration of major be rendered to the
• Any change in findings of internal Company by external
accounting policies and investigations of activities auditors in addition to
practices, characterized by fraud, audit of its financial
corruption and abuse of statements, measures for
• Significant related party
power and management's redressal and rectification
transactions
response thereto. of non-complinaces with
• Compliance with the Code of Corporate
applicable accounting i) ascertaining that the Governance Regulations.
standards, and internal control systems
including financial and p) Consideration of any other
• Compliance with Code operational controls, issue or matter as maybe
of Corporate accounting systems for assigned by the Board of
Governance Regulations timely and appropriate Directors.
and other statutory and recording of purchases and
regulatory requirements.
HUMAN RESOURCE AND REMUNERATION COMMITTEE

Composition Designation Financial Officer, the
Mr. Asad Ullah Khawaja Chairman Company Secretary and
the Head of Internal
Mr. Usman Shahid Member
Audit, including their
Syed Manzar Hassan Member terms of appointment
Syed Haroon Rashid Member and remuneration
package.
Directors 28th Total
Attended
The Committee meets on as
March
required basis or when
Mr. Asad Ullah Khawaja 1 directed by the Board sets
Mr. Usman Shahid 1 the agenda, time, date and
Syed Manzar Hassan 1 venue of the meeting in
Syed Haroon Rashid 1 consultation with the
Chairman of the Committee.
Salient Features & Terms c) Recommending human Senior Manager Human
of Reference resource management Resources acts as Secretary
policies to the board; of the Committee and
The Board of Directors of the
Company have determined the submits the minutes of the
d) Recommending to the
following term of reference of meeting duly signed by
board the selection,
the Human Resource and Chairman to the Company
evaluation,
Remuneration Committee: Secretary. These minutes are
development,
then circulated to the Board
a) Recommend to the compensation (including
of Directors.
board for consideration retirement benefits) of
and approval a policy chief financial officer,
framework for company secretary and
determining head of internal audit;
remuneration of
e) Consideration and
directors (both executive
approval on
and non-executive
recommendations of
directors and members
chief executive office on
of senior management).
such matters for key
The definition of senior
management positions
management will be
who report directly to
determined by the
chief executive officer;
board which shall
and
normally include the first
layer of management f) Ensure, in consultation
below the chief with the Chief Executive
executive officer level; that succession plans are
in place and review such
b) Undertaking annually a
plans at regular intervals
formal process of
for those executives,
evaluation of
whose appointment
performance of the
requires Board approval
board as a whole and its
(under Code of
committees either
Corporate Governance),
directly or by engaging
namely, the Chief
external independent
consultant;
INFORMATION TECHNOLOGY GOVERNANCE

Information Technology has grown to Disaster Recovery Planning
permeate the business world, affecting
how companies make and market their As part of BCP, a Disaster Recovery site
products as well as how people (DR) has been established to further
communicate and accomplish their strengthen the availability of IT/Oracle
jobs. The need for IT governance has services in case of a disaster.
also become pivotal towards The site hosts backup servers for
organization sustenance and growth. shifting of services during a disaster. A
At PEL, IT Governance provides a comprehensive set of policies and
framework that is aimed at IT strategy procedures, including responsibilities
about IT infrastructure, risks and actions to recover computer,
management, deployment of new communications and network
techniques and ideas as well as environment in the event of an
delivery of IT services in an efficient unexpected interruption, have been
and economical way. PEL remains implemented to ensure a hassle free
focused on continuous exploration of movement of data from primary site to
best technologies and infrastructure, to DR site.
enable efficient and timely decision
making, in addition to economizing on Safety and security of IT record
the cost related to operating and
Safety and security of IT records is
decision making.
ensured through effective
implementation of the Company’s
Review of Business Continuity and
policy for Safety of Records, which has
Disaster Recovery Planning by the
been elaborated on page D-13.
Board
PEL has implemented an effective
Disaster Recovery System, for sustained
business operations in the event of a
disruption or disaster.
The Board of Directors has Reviewed
the Business Continuity and Disaster
Recovery Plan of the Company and
satisfied that the Company is well
protected against risks of loss arising
from any disaster.
Business Continuity Planning
Recognizing the critical importance of
technological dominance, extreme
competition and sustained/continued
business operations, PEL has
undertaken measures to enhance its
capacity to survive against disruptions/
calamities.
Business Continuity Planning instills
employee satisfaction, inculcates
confidence of customers as well as
investors inbusiness and helps protect
PEL’s image, brand and reputation.
PEL remains
focused on
continuous
exploration of best
technologies and
infrastructure, to
enable efficient
and timely
decision making.
POLICY DISCLOSURES
DIVERSITY POLICY CONFLICT OF INTEREST POLICY
PEL is committed to promoting and In order to avoid known or perceived or
maintaining a culture of diversity. Our human potential conflicts of interests, PEL has
capital is our most valuable resource, with the employed Avoiding Conflict of Interest Policy
individuals coming from different age, color, in addition to compliance of regulatory
disability, ethnicity, family or marital status, requirements and Code of Conduct, where a
gender identity or expression, language, formal disclosure of vested interest can made
national origin, physical and mental ability, by our people. A conflict of interest can arise
political affiliation, race, religion, sexual when one's judgment could be influenced, or
orientation, socio-economic status, veteran might appear as being influenced, by the
status, and other characteristics that make possibility of any personal benefit, relation or
each individual unique. bias, whether intentional or unintentional.
Our People have the responsibility to
All major areas of human resource
intimate their immediate manager about
management are subject to our diversity
policy, be it, recruitment and selection, potential conflict of interest. Conflict of
compensation and benefits, professional interest must be avoided at all costs.
development and training, promotions, INVESTORS' GRIEVANCE POLICY
transfers, social and recreational programs,
layoffs or terminations with strict disciplinary The Company believes in allowing full access
actions in case of non-compliance. to all shareholders including potential
investors, to call for information or detail on
CORPORATE SOCIAL RESPONSIBILITY Company operations, in addition to details
AND SUSTAINABILITY POLICY relating to his/her specific investment,
dividend distribution or circulation of
PEL is committed to act responsibly towards regulatory publications by the Company, with
the community and environment for our endeavours for prompt provision of
mutual benefit as PEL believes that the information or resolution of query/grievance
success of the Company emanates from the in accordance with the statutory guidelines.
development of the community. Our Social Investor grievances are managed centrally by
and Environmental practices have been the Corporate Affairs Department, through an
elaborated in the section relating to effective grievance management mechanism
'Corporate Social Responsibility', with the for handling of investor queries and
following distinct features: complaints, through the following key
• Community investment & welfare schemes measures:
• Increasing the investor's awareness
• Rural development programmes
relating to modes for filing of queries
• Corporate Social Responsibility handling of investor grievances in a timely
• Environmental protection measures manner
• Occupational health & safety • Grievances are handled honestly and in
good faith by PEL employees and without
• Business ethics & anti-corruption measures prejudice
• Consumer protection measures • Any grievances requiring attention of the
• Energy conservation management or the Board of Directors,
• Industrial relations are escalated to the appropriate levels
with full facts of the case, for judicious
• Employment of special persons settlement of the grievance
• National cause donations • Investigations are also carried out to
• Contribution to National Exchequer inquire whether the cause of the grievance
was a weakness in the system or
negligence/willful act on part of any
employee
• Appropriate remedial action is taken Website (speakup@pel.com.pk). The

immediately to ensure avoidance in the employees are required to report concerns
future directly to immediate supervisors, except
where, reporting to supervisors is
POLICY FOR SAFETY OF RECORDS impracticable, in which case, the level may
be raised to the senior management.
The Company has established a policy for
preservation of records in line with good The purpose of this policy is to encourage all
governance practice. stakeholders to raise questions and concerns,
These records include books of account, monitor the progress of resultant inquiries,
documentation pertaining to secretarial, provide feedback and where required, also
legal, contractual, taxation and other matters, voice concerns against any unsatisfactory
which have been archived where needed, in inquiry or proceeding. The Policy covers
a well preserved and secure manner. unethical conduct, offence, breach of law or
failure to comply with legal obligations,
The main objectives this policy are: collusion, coercive practices and possible
• To ensure that the Company's records are fraud / corruption. Due emphasis has also
created, managed, retained and disposed been placed on health, safety and
off in an effective and efficient manner; environmental risks. Inappropriate or
malicious reporting leading to wrongful
• To ensure preservation of the Company's convictions have been specifically forbidden,
records of permanent value to support with clear definition of consequences for the
both protection of privacy and freedom of persons making wrongful accusations. There
information; was no material incidence was reported to
• To ensure that information is held as long the Audit Committee during the year
as required to meet legal, administrative, regarding improprieties in financial,
operational and other requirements of the operating, legal or other matters. All minor
Company. events requiring management's attention
were duly addressed with dissemination of
These objectives are achieved through
messages across the Company for avoidance
implementation of access controls, on-site
of such incidents in the future.
and off-site backups, determination of
responsibilities for all Company departments
for safeguarding of their respective records HUMAN RESOURCE MANAGEMENT
and implementing mechanism for reporting POLICY & SUCCESSION PLANNING
of breach of security or damage of record to
PEL attracts the finest talent for induction in
the management.
all functions of the Company and ensures
provision of a conducive environment to
PEL's WHISTLEBLOWING GUIDELINES stimulate performance, in addition to market
PEL ensures accountability and integrity in commensurate remuneration to retain
conduct, by devising a transparent and qualityworkforce, and developing and
effective SPEAK-UP Policy and whistle refining their abilities for prospective
blowing guidelines for sounding of alerts leadership roles.
against any misconduct, deviations from The Company ensures availability of
policies, controls, applicable regulations, or competent personnel in each department
violation of the code of conduct. The Speak- through a comprehensive Succession Plan,
UP Policy is applicable to all employees, carried out in terms of an individual's
management and the Board and extends to potential, qualification, period of service and
every individual associated with theCompany professional attitude amongst other criteria.
including contractors, suppliers, business The succession policy is updated periodically
partners and shareholders etc., who can in line with the Company's requirements and
participate effectively and in confidentiality, career objectives.
without fear of reprisal or repercussions on
advertised speak-up channels on PEL Official
SHARIAH COMPLIANCE
CORPORATE GOVERNANCE
STATEMENT OF COMPLIANCE WITH LISTED COMPANIES (CODE OF
CORPORATE GOVERNANCE) REGULATIONS, 2019
The company has complied with the 7. The meetings of the Board were
requirements of the Regulations in the presided over by the Chairman and, in
following manner: his absence, by a director elected by the
Board for this purpose. The Board has
1. The total number of directors are Nine
complied with the requirements of Act
as per the following,
and the Regulations with respect to
a) Male: Eight frequency, recording and circulating
minutes of meeting of the Board;
b) Female: One
8. The Board have a formal policy and
2. The composition of the Board is as
transparent procedures for
follows:
remuneration of directors in accordance
Category Names with the Act and these Regulations;
Independent Director Mr. Asad Ullah Khawaja 9. The Board has arranged Directors
Mr. M. Kamran Saleem
Training Orientation Program for
Non-Executive Directors Mr. M. Naseem Saigol following Directors;
Syed Haroon Rashid
Mr. Usman Shahid a) Mr. Muhammad Murad Saigol
b) Mr. Muhammad Zeid Yousuf Saigol
Executive Directors Mr. M. Murad Saigol
Mr. M. Zeid Yousuf Saigol c) Syed Manzar Hassan
Syed Manzar Hassan
d) Syed Haroon Rashid
Female Director Ms. Azra Shoaib 10. The Board has approved appointment
of chief financial officer, company
3. The directors have confirmed that none secretary and head of internal audit,
of them is serving as a director on more including their remuneration and terms
than seven listed companies, including and conditions of employment and
this company; complied with relevant requirements of
4. The company has prepared a code of the Regulations;
conduct and has ensured that 11. Chief financial officer and chief
appropriate steps have been taken to executive officer duly endorsed the
disseminate it throughout the company financial statements before approval of
along with its supporting policies and the Board;
procedures;
12. The Board has formed committees
5. The Board has developed a comprising of members given below.
vision/mission statement, overall
corporate strategy and significant a) Audit Committee:
policies of the company. The Board has 1. Mr. Asad Ullah Khawaja
ensured that complete record of
2. Mr. Usman Shahid
particulars of the significant policies
along with their date of approval or 3. Syed Manzar Hassan
updating is maintained by the company; 4. Syed Haroon Rashid
6. All the powers of the Board have been b) HR and Remuneration Committee:
duly exercised and decisions on
1. Mr. Asad Ullah Khawaja
relevant matters have been taken by the
Board/ shareholders as empowered by 2. Mr. Usman Shahid
the relevant provisions of the Act and 3. Syed Manzar Hassan
these Regulations; 4. Syed Haroon Rashid
13. The terms of reference of the aforesaid 17. The statutory auditors or the persons
committees have been formed, associated with them have not been
documented and advised to the appointed to provide other services
committee for compliance; except in accordance with the Act, these
Regulations or any other regulatory
14. The frequency of meetings
requirement and the auditors have
(quarterly/half yearly/ yearly) of the
confirmed that they have observed IFAC
committee were as per following,
guidelines in this regard;
a) Audit Committee:
18. We confirm that all requirements of
1. March 28, 2019 regulations 3, 6, 7, 8, 27,32, 33 and 36 of
2. April 26, 2019 the Regulations have been complied
with; and
3. August 23, 2019
4. October 30, 2019 19. We confirm that there is no non-
compliance with requirements of CCGR.
b) HR and Remuneration Committee:
1. March 28, 2019
M. Naseem Saigol
15. The Board has set up an effective Chairman
internal audit function/ or has
outsourced the internal audit function to Lahore:
who are considered suitably qualified May 02, 2020
and experienced for the purpose and
are conversant with the policies and
procedures of the company;
16. The statutory auditors of the company
have confirmed that they have been
given a satisfactory rating under the
Quality Control Review program of the
Institute of Chartered Accountants of
Pakistan and registered with Audit
Oversight Board of Pakistan, that they
and all their partners are in compliance
with International Federation of
Accountants (IFAC) guidelines on code
of ethics as adopted by the Institute of
Chartered Accountants of Pakistan and
that they and the partners of the firm
involved in the audit are not a close
relative (spouse, parent, dependent and
non-dependent children) of the chief
executive officer, chief financial officer,
head of internal audit, company
secretary or director of the company;
AUDIT COMMITTEE’S REPORT ON COMPLIANCE WITH LISTED COMPANIES
(CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2019
The Committee comprises of members with the requirements of the Fourth
possessing considerable financial insight. Schedule to the Companies Act, 2017
The Audit committee has concluded its and the external reporting is consistent
annual review of the conduct and with management processes and
operations of the Company during 2019, adequate for shareholder needs.
and report that:
• All Directors have access to the Company
• The Company has issued a Statement of Secretary. All direct or indirect trading
Compliance with the Listed Companies and holdings of Company's shares by
(Code of Corporate Governance) Directors and executives or their spouses
Regulations, 2019, which has also been were notified in writing to the Company
reviewed by the External Auditors of the Secretary along with the all the necessary
Company. require information, including price,
number of shares, form of share
• Understanding and compliance with
certificates and nature of transaction,
Company codes and policies has been
which were notified by the Secretary to
affirmed by the members of the Board,
the Board within the stipulated time. All
the Management and employees of the
such holdings have been disclosed in the
Company individually. Equitable
pattern of shareholding. The Annual
treatment of shareholders has also been
Secretarial Compliance Certificates are
ensured.
being filed regularly within stipulated
• Appropriate accounting policies have time.
been consistently applied. All applicable
• Closed periods were duly determined
Approved Accounting and Financial
and announced by the Company,
Reporting Standards were followed in
precluding the Directors, the Chief
preparation of financial statements of the
Executive and executives of the Company
Company on a going concern basis, for
from dealing in Company's shares, prior
the financial year ended December 31,
to each Board meeting involving
2019, which present fairly the state of
announcement of interim / final results,
affairs, results of operations, profits, cash
distribution to shareholders or any other
flows and changes in equity of the
business decision, which could materially
Company.
affect the share market price of Company,
• The Chief Executive and the Chief along with maintenance of confidentiality
Financial Officer have endorsed the of all business information.
financial statements of the Company.
Internal Audit
They acknowledge their responsibility for
true and fair presentation of the • The internal control framework has been
Company's financial condition and effectively implemented through an
results, compliance with regulations and Internal Audit function established by the
applicable accounting standards and Board which is independent of the
establishment and maintenance of External Auditors of the Company.
internal controls and systems of the
• The Company's system of internal control
Company.
is sound in design and has been
• Accounting estimates are based on continually evaluated for effectiveness
reasonable and prudent judgment. and adequacy.
Proper and adequate accounting records
• The Audit Committee has ensured the
have been maintained by the Company
achievement of operational, compliance,
in accordance with the Companies Act,
risk management and financial reporting
2017. The financial statements comply
objectives and safeguarding of the assets
of the Company and the shareholders • The Auditors have been allowed direct
wealth at all levels within the Company. access to the Committee and the
effectiveness, independence and
• The Internal Audit function has carried
objectivity of the Auditors has thereby
out its duties under the charter defined
been ensured. The Auditors attended the
by the Committee. The Committee has
General Meetings of the Company during
reviewed material Internal Audit findings,
the year and have confirmed attendance
taking appropriate action or bringing the
of the 64th Annual General Meeting
matters to the Board's attention where
scheduled for May 29, 2020 and have
required.
indicated their willingness to continue as
• The Head of Internal Audit has direct Auditors.
access to the Chairman of the Audit
• Being eligible for reappointment as
Committee and the Committee has
Auditors of the Company, the Audit
ensured staffing of personnel with
Committee has recommended the
sufficient internal audit insight and that
appointment of Rahman Sarfaraz Rahim
the function has all necessary access to
Iqbal Rafiq, Chartered Accountants as
Management and the right to seek
External Auditors of the Company for the
information and explanations.
year ending December 31, 2020.
• Coordination between the External and
• The Firm has no financial or other
Internal Auditors was facilitated to ensure
relationship of any kind with the
efficiency and contribution to the
Company except that of External
Company's objectives, including a
Auditors.
reliable financial reporting system and
compliance with laws and regulations.
External Auditors Asad Ullah Khawaja
• The statutory Auditors of the Company, Chairman - Audit Committee
Rahman Sarfaraz Rahim Iqbal Rafiq, Lahore:
Chartered Accountants, have completed May 02, 2020
their Audit of the Company's financial
statements and the their Review of the
Company's Compliance with the Code of
Corporate Governance for the financial
year ended December 31, 2019 and shall
retire on the conclusion of the 64th
Annual General Meeting.
• The Audit Committee has reviewed and
discussed Audit observations and Draft
Audit Management Letter with the
External Auditors. Final Management
Letter is required to be submitted within
45 days of the date of the Auditors'
Report on financial statements under the
listing regulations and shall accordingly
be discussed in the next Audit
Committee Meeting. Audit observations
for interim review were also discussed
with the Auditors.
Rahman Sarfaraz Rahim Iqbal Rafiq
Chartered Accountants
72-A, Faisal Town,

Lahore - 54770, Pakistan.
T: +92 42 35160430 - 32
F: +92 42 35160433
E: lahore@rsrir.com
W: www.rsrir.com
Independent Auditor’s Review Report

To the members of PAK ELEKTRON LIMITED
Review Report on the Statement of Compliance contained in Listed Companies
(Code of Corporate Governance) Regulations, 2019
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate
Governance) Regulations, 2019 ['the Regulations'] prepared by the Board of Directors of PAK ELEKTRON
LIMITED for the year ended December 31, 2019 in accordance with the requirements of regulation 36 of the
Regulations.
The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our
responsibility is to review whether the Statement of Compliance reflects the status of the Company's compliance
with the provisions of the Regulations and report if it does not and to highlight any non-compliance with the
requirements of the Regulations. A review is limited primarily to inquiries of the Company's personnel and review
of various documents prepared by the Company to comply with the Regulations.
As a part of our audit of the financial statements we are required to obtain an understanding of the accounting
and internal control systems sufficient to plan the audit and develop an effective audit approach. We are not
required to consider whether the Board of Directors' statement on internal control covers all risks and controls or
to form an opinion on the effectiveness of such internal controls, the Company's corporate governance
procedures and risks.
The Regulations require the Company to place before the Audit Committee, and upon recommendation of the
Audit Committee, place before the Board of Directors for their review and approval, its related party transactions.
We are only required and have ensured compliance of this requirement to the extent of the approval of the
related party transactions by the Board of Directors upon recommendation of the Audit Committee.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of
Compliance does not appropriately reflect the Company's compliance, in all material respects, with the
requirements contained in the Regulations as applicable to the Company for the year ended December 31,
2019.
The director's report on the financial statements for the year ended December 31, 2019 was amended to disclose
a non-adjusting event occurring after the reporting period. We have, earlier, issued our review report on the
statement of compliance with Listed Companies (Code of Corporate Governance) Regulations, 2019, dated March
27, 2020, wherein we have expressed an unmodified conclusion on that statement. This is an amended review
report on the statement of compliance with Listed Companies (Code of Corporate Governance) Regulations,
2019. Our review procedures subsequent to that date were restricted to the subsequent amendment of the
director's report.
The engagement partner on the review resulting in this independent auditor's review report is ZUBAIR IRFAN
MALIK.
RAHMAN SARFARAZ RAHIM IQBAL RAFIQ

Lahore: May 02, 2020
Member of Russell Bedford International - a global network of independent professional services firms
E
PERFORMANCE
AND POSITION
E 02 Pak Elektron Limited
CHAIRMAN’S REVIEW
The cornerstone of our business
philosophy revolves around
customer satisfaction, capacity
building and human resource. Our
organization has passed through a
dynamic phase where skills,
technologies and scales are
developed. With the increased
capacity and improved
competitiveness our PEL brand is
well positioned as standout market
leader.
I am pleased to inform that in mile stone electricity generation revolves around customer
this challenging economic era capacity, augmentation of satisfaction, capacity building
your company maintained its electricity T&D infrastructure is and human resource. Our
share holders trust and market at of the priority list. After organization has passed through
share due to its quality products expected stability as a result of a dynamic phase where skills,
and business practices. measures by taken by technologies and scales are
incumbent Government, the developed. With the increased
At the close of 2019, Company
Company foresees a promising capacity and improved
achieved a revenue level of
way forward for this segment. competitiveness our PEL brand
Rs.37.621 Billion against Rs.
Seeing future potential in Power is well positioned as standout
38.990 Billion of previous year.
Division , company is setting up market leader.
Despite of overall economic
a Power Transformer
stress, Appliances Division
manufacturing facility at 34 KM
business maintained its revenue
Ferozepur Road Lahore, which M. Naseem Saigol
level at Rs. 27.787 Billion against
will be completed in next year. Chairman
Rs. 27.275 Billion of preceding
Our focus will remain on
year. In such a challenging Lahore
continuous research and
environment, this all is due to May 02, 2020
development which will enable
our team resilience, strong
us to not only cater for the local
customer focus and reception of
demands but also explore new
PEL's brand image in the
markets outside Pakistan.
industry.
Under the prevailing
Power Division business
competitive circumstances we
remained slower, with a revenue
remained committed to our
of Rs. 9.834 Billion against
strategy of steady growth in
11.715 Billion of previous year.
quality avenues with significant
Slow ordering from WAPDA and
emphasis on product
Discos is the underlying reason
development. The cornerstone
of this decline. After attaining
of our business philosophy
Annual Report 2019 E 03
CEO’S REMARKS
The year under review remained “High End Series” Super Silver & requirements during peak
highly challenging to meet Super, New energy efficient seasons and in timely deliveries
influences of prevailing tough Deep Freezer “Arctic Crystal against future high order
economic macros. Company Glass Door Series” with intakes.
business fundamentals are intact improved aesthetics launched
Aggressive marketing campaign
and it will again attain its growth during the year well received in
both by global & local brands,
momentum as country economy the market. The Company kept
persistent pricing pressure and
revives. The company is on way on improving product features,
strong market competition
to launch latest market introduce aesthetics and
continue to pose challenges for
competitive product models increase product range that led
Company profitability and
both in home appliances and to strengthening the customer's
performance. However, we
power division through ongoing confidence.
remain committed to drive the
R&D. The company aims to
The sales in Power Division business forward and explore
achieve sustainable growth by
remained lower by 16% due to the new avenues despite these
undertaking strategic and
low ordering from Government numerous challenges. Resilient
forward looking investments that
sector. However, seeing future Company performance during
build on our robust earning
potential, company is setting up 2019, besides our planned
base and meet the rising
a Power Transformer diversification & productivity
demand of company products.
manufacturing facility at 34 KM initiatives, improved brand
Despite of challenging Ferozepur Road Lahore, which equity and dedication provide
environment, In current year will be completed in next year. confidence of sustained
company achieved a revenue of We foresee a potential recovery profitability for the shareholders
Rs. 37,621 million which is lower and further growth momentum of the Company.
by 3.51% as compared to the in power division due to
corresponding period (2018 : electricity T&D infrastructure
Rs. 38,990 million). Decline in augmentation needs after M. Murad Saigol
sales is due to prevailing country managing electricity generation Chief Executive Officer
economic outlook and will shortfall.
reverse with the improvement in Lahore
Gross profit achieved in 2019
key economic indicators. May 02, 2020
amounts to Rs. 6,573 million as
Appliance Division showed a compared to Rs. 6,997 million in
mild a business volume increase 2018, resulting a decline of @ 6
of Rs. 511 million despite overall % as compared to previous year
decline in per capita disposable mainly due to increase in input
income. Revenues of this cost due to Pak Rupee
division increased to depreciation and increase in
Rs. 27,787 million against Rs. energy tariff. Profit after tax was
27,275 million of year 2018. recorded at Rs. 879 million as
Company continued to launch compared to Rs. 1,372 for the
“New Series” with improved previous year.
esthetics and energy saving
Earning per share is Rs. 1.68 as
feature, in all of the products to
compared to that of Rs. 2.67 of
strengthen its market presence.
previous year.
Washing Machine production
line, after successful Company is continuously
commissioning started its investing in manufacturing and
commercial production during operational capabilities, to
the year. PEL washing machine support the expected future
by quality product received a growth in revenue, production
warm market response. and profits. Company
Refrigerator energy efficient Investment in building, plant
“Life Series”, with extended and machinery, will increase the
space and improved esthetics production capacities and also
launched during the year is well improve operational efficiencies.
received in the market. Air This will enable us to meet the
conditioners energy efficient production and warehousing
DIRECTORS’ REPORT
The Board of Directors’ is pleased to present to you the annual report of the Company along with the
audited financial statements for the year ended December 31, 2019.
MACRO - ECONOMIC development budget, utilities improved from 138 to 108.

OVERVIEW tariff adjustments, and the
Industry Overview
policy rate increase (by 750
Global Economic Over View bps since Jan '18). So far, Large Scale Manufacturing
The rising trade barriers and these measures appear to Industries –LSMI sector
associated uncertainty (US- address the macroeconomic remained in pressure with
China trade war & Brexit) imbalances and push the negative 3.35% growth on
weighed on the global economy towards stability. YOY basis reported as on Dec
business sentiment and The passage from these 31, 2019 due to overall
activity. Global growth this stabilization measures has sluggish economy. Business
year was 2.5% and recorded a significantly improved the of Home Appliances with
weakest pace since the twin deficits, but on the other Imported inputs remained
financial crisis a decade ago. hand, it has also triggered the challenging due to massive
This weakness was headline inflation to reach as Pak Rupee depreciation,
widespread reflecting high as 14.5% in Jan '20. besides the margin cuts,
common influences across country market contraction
Market confidence seems to
both developed and observed as a result of drastic
be gradually returning, the
developing economies. Also central bank has paused its decline in disposable income.
refer to Post Balance sheet However, local value addition
interest rate hike cycle by
Events i.e. COVID 19 as protected industry against a
keeping the policy rate at
summarized later which will margin cut in proportion to
13.25% since July 2019.
have a tremendous effects on Pakistan's FX reserves have exchange rate fluctuation. On
Global and Local Economy. YOY basis (Jan ~ Dec),
been on the rise as they hit an
Refrigerators Production units
Domestic Economic almost two-year high at
declined by 30.89%, Air
Overview $12.27 billion in Jan '20.
Conditioners 7% while Deep
Current Account Deficit (CAD)
Pakistan was no exception to also declined and narrowed Freezers and TV Sets
the above. Having posted an to US$13.5 billion (4.8% of increased by 41.34 % and
average growth at 4.7% 0.86% respectively -Source:
GDP) in FY19 compared to
during FY14-18, our GDP LSMI Quantum Index
US$19.9 billion (6.3% of GDP)
growth decelerated to 3.3% (Pakistan Bureaus of
in FY18. The narrowing of the
in FY19 - a 2.2% decline Statistics).
CAD has continued in FY20,
compared to FY18. Growth as the CAD narrowed 75% to Power Division Business also
forecast during the year $2.153 billion in the first six remained subdued due to
ahead is revised downwards months of the fiscal year of overall economic slowdown.
at 2.4%; which, however, is 2020 driven by lower import As a result of slashed
expected to recover gradually for transport and machineries, development budget and an
to 3.0% in FY21. The followed by food items and overall sluggishness in Private
economic activity decelerated metals. The stock market has Industries, consumption of
in response to contractionary also recovered considerably Power Division Products also
monetary policy and other during Q4 of 2019. Sovereign went on slow down. Increased
structural adjustments e.g. rating and outlook of Pakistan input costs due to massive
transition to a market- and the Pakistani Banking Pak Rupee depreciation and
determined exchange rate System has been upgraded to rise in energy costs could not
allowing the rupee to find its “Stable”. be fully translated as margins
new equilibrium that resulted decline due to local value
a 35.5% downward revision Also, Pakistan's rank for “Ease
addition.
during the year, cut in the of Doing Business” stands
Company is continuously
investing in
manufacturing and
operational capabilities,
to support the expected
future growth in revenue,
production and profits.
M. Murad Saigol
Chief Executive Officer
DIRECTORS’ REPORT
ANALYSIS OF FINANCIAL AND NON-FINANCIAL PERFORMANCE
FINANCIAL PERFORMANCE
Summary of financial results for the current year in comparison budgeted results for the current and
with the reported results of the previous year is as follows:
Rupees in million
2019 2019 2018
(Actual) (Budget) (Actual)
Gross revenue 37,621 39,964 38,990

Gross profit 6,573 6,900 6,997
Operating profit 3,364 3,650 3,663
Finance cost 2,480 2,500 2,103
Profit before tax 881 1,180 1,557
Profit after tax 879 1,180 1,371
Earnings per share - Rupees 1.68 2.29 2.67
During the year, Company revenues registered at Rs. 37, 621 million with a decline @ 3.51% as
compared with Rs. 38,990 million of year 2018. Gross profit margin of the Company stands at Rs. 6,573
million against Rs. 6,997 million for the year 2018. Profitability also reduced to Rs. 879 million against
Rs. 1,371 million of previous year. Earnings per share reduced to Rs. 1.68 against Rs. 2.67 of year 2018.
Profitability contraction is resulted by challenging economic environment. Prevailing tough macro-
economic conditions have led to increase in input costs. The abrupt Pak Rupee depreciation, rise in
petroleum products prices and energy costs, mounting inflation and sharp rise in policy rate were the
economic challenges faced during the year. Home Appliances Division maintained its revenue despite
of challenging economic conditions and competitive environment; however, Power Division registered
a decline in revenues due to timing of orders in take and performance from WAPDA Distribution
Companies.
Financial Indicators
Revenue Break-up value per share
37,621 3.51%
60.76 1.37%
(Rs. in million) (Rs. in million)
Gross profit Financial leverage
6,573 6.06%
0.51 11.33%
(Rs. in million) (Times)
Profit after taxation Total assets
879 35.94%
51,311 1.51%
(Rs. in million) (Rs. in million)
Earnings per share Total equity
1.68 37.09%
30,688 1.35%
(Rupees) (Rs. in million)
Return on equity Share price
2.86 36.79%
27.07 8.71%
(Rs. in million) (Rupees)
NON-FINANCIAL PERFORMANCE
As regards non-financial targets, the Company continues to remain on track having
maintained its market share, added new products, improved existing product features and
aesthetics, continued focus on human resource development and maintained healthy
relationship with all key stakeholders.
Non-Financial Indicators
Capital forms Objective KPI's monitored Future relevance
Product innovation Improved product Yes.

and development features and
aesthetics for existing The Company continues
products. to recognize the
importance of consumer-
New series for driven product
MANUFACTURED refrigerator, air development.
CAPITAL conditioner and water
dispenser with new
features and improved
aesthetics were
launched during the
year.
Diversification Product range. Yes.

LED TV and washing There are still numerous
machines launched unexplored product lines
during the year and that are offered by our
well-received in the current competitors
market
Maintain industry Market share and Yes.
leadership and sales/service center
market presence and dealer network. Planned and integrated
marketing campaigns
The Company has and increasing access to
been able to maintain customers through a
its market shares nationwide sales/service
despite tough center and dealer
competition and has network is vital for the
nation-wide sales, Company to maintain
service center and industry leadership and
dealer network. market presence.
Enhance production Technology Yes.

facilities and upgradation activities.
processes to improve The Company believes
efficiency The Company has that in order to achieve
kept itself up-to-date efficiencies and
with the latest economies of scale, it
technology has to remain a
advancements to technology forerunner.
achieve production
efficiencies
DIRECTORS’ REPORT
Personnel Training and Yes.

development education programs
for employees. Human Capital shall
continue to remain one
Technical and non- of the most important
technical training areas of focus for the
HUMAN programs were Company.
CAPITAL arranged during the
year for employees at
various levels both
internally and
externally
Occupational health Health and safety Yes.

and safety policies in place,
training activities Employee safety shall
conducted and continue to remain and
number of health and integral part of the
safety incidents. Company's agenda.
The Company
provides a safe and
congenial
environment to its
employees. Strict and
stringent safety
policies have been
put in place to avoid
risk of accident. Health
and safety trainings
are were carried out
regularly during the
year. No major health
and safety incidents
occurred during the
year.
Have sufficient Timely payments Yes.

liquidity to meet
liabilities when due, The Company has Having sufficient liquidity
Rs.
under both normal maintained sufficient is critical for the
and stressed liquidity and has met Company's survival.
conditions, without its liabilities as and
FINANCIAL when due.
CAPITAL incurring
unacceptable losses
or risking damage to
the Company's
reputation
Increasing Market share price Yes.

shareholder's wealth
The Company's The Company's
market share price shareholders shall
decline during the continue to be of the
year as it is directly prime focus.
SOCIAL AND impacted by the
RELATIONSHIP Company's
CAPITAL performance
Maintaining supplier Payable days Yes.

relationships
The Company has The Company values its
substantially relationships with
maintained 'Payable suppliers and shall
Days' which is evident continue to make timely
of the Company's payments
policy for timely
payment to its
suppliers
Maintaining customer Sale/service center Yes.
relationships and dealer network,
after sales services The Company believes
and customer that customer relations is
feedback. a fundamental function
and is vital for the
The Company has a Company's growth
nationwide
sales/center and
dealer network to
maintain access to
customers and
provide efficient after
sales services, and
monitors customer
feedback for
improvement
Be a socially CSR initiatives and Yes.

responsible corporate activities.
entity At PEL, we pride
The Company ourselves in aligning our
undertook several CSR business strategy to
initiatives and meet societal needs.
activities during the
year and continued to
give back to the
community through a
broad range of
community initiatives,
charity giving,
foundation grants and
volunteerism.
DIRECTORS’ REPORT
Product innovation Improved product Yes.

features and
aesthetics for existing The Company
products. recognizes the
importance of meeting
New series for the innovation intensive
INTELLECTUAL refrigerator, air needs of its customers.
CAPITAL conditioner and water
dispenser with new
features and
improved aesthetics
were launched during
the year.
METHODS AND ASSUMPTIONS USED IN COMPILING KEY PERFORMANCE INDICATORS

The Company sets budgetary targets for various financial and non-financial indicators on an
annual basis which are approved by the Board of Directors. Key Performance Indicators are
identified based on how effectively these reflect the Company's performance and position.
Various factors, including but not limited to, general market conditions, the Company's
market positioning, competitors are taken into account while compiling these indicators.
Actual performance is analyzed against budgetary targets by monitoring key performance
indicators on a regular basis.
The Company's financial performance and position are the most basic financial indicators.
The Company analyses revenue, gross profit, profit after taxation, earnings per share and
return on equity to assess its performance. Total equity, total assets and break-up value per
share are analyzed to gauge the Company's financial position. Market share price is also a
very important financial indicator as the Company's market perception is measured directly
with reference to its market share price.
Non-financial indicators are set for business objectives associated with various forms of
capital including those pertaining business growth and expansion, product development,
human resource development and relationships with key stakeholders etc.
CHANGES IN INDICATORS AND PERFORMANCE MEASURES

There were no changes in indicators and performance measures from the previous years.
PRODUCT WISE Further a wide product Freezers, Visi Coolers and

OPERATING penetration gap especially in Chest Coolers in different parts
rural areas is yet to be bridged of Pakistan.
PERFORMANCE and your company is well
Company business
Refrigerator positioned to take the
fundamentals are intact and is
opportunity. A number of
Refrigerator, being a prime well equipped to grasp an
initiatives have been
product of the Company, opportunity as result of
premeditated with respect to
contributed 59% of the expected near future economic
product innovation which will
appliance division's revenues stabilization. A continuous R&D
be complemented with
and 43% towards overall process is on way to make the
appropriate marketing
revenues during the year 2019. product energy efficient,
campaigns.
There was a considerable durable and with improved
decline in disposable incomes Deep Freezer esthetics.
during the year; so,
Deep Freezer revenue Air conditioner (AC)
Refrigerator revenue are down
registered a decline of 14.55%
by 6.25%. Product cost increase Split ACs Business witnessed a
due to prevailing economic
due to massive local currency revenue growth of 30.88% on
slowdown. The shrinkage is
depreciation and energy price YoY basis. Air conditioners
observed in general consumer
hike could not be passed on to energy efficient “High End
base due to drastic decline in
customers in full due to their Series” Super Silver & Super
disposable income and
certain economic Matte with SEER (Seasonal
institutional sales. Company
vulnerabilities. Energy Efficiency Ratio) and
customized products are highly
improved esthetics launched
During the period under competitive due to “O Zone
during the year remained
review, Company launched Friendly Refrigerants" as per
market preferred choice.
energy efficient Refrigerator UN Montreal Protocol and are
Revenue growth is a
wide body “Life Series”, with reliable choice for MNCs in the
continuation of consumer
extended space, improved corporate sector. Company
confidence backed by
esthetics and cost effective customized product satisfies
performance of “AERO”,
product design. Company's the demand of Ice cream and
“ALLURE”, “ACE”, “APEX” and
refrigerators being energy beverage companies; and has
“FIT” models earlier launched.
efficient with improved earned strong brand equity.
Product development is fueled
aesthetics, lowest start-up, New energy efficient “Arctic
by the concept of energy
turbo cooling and freshness Crystal Glass Door Series” with
efficient and 4 star rating
LEDs are preferred consumer improved aesthetics received a
inverter technologies to meet
choice. Further R&D is on way warm market response. PEL
the customer satisfaction and
to develop energy efficient and Deep Freezers has become the
market competition.
quality products. The multi preferred choice of corporate
door and side-by-side Institutions like Unilever, Such a remarkable growth, in a
refrigerators are also Friesland Campina Engro drastically declining disposable
introduced in the market which Pakistan Limited (Engro Foods), income regime is backed by
fetched a very promising Lotte Akhtar Beverages (Pepsi), launch of energy efficient,
response from the customers. Sukkur beverages (Pepsi) meeting high quality standards
Parallel to product Pakistan Fruit Juice company with improved aesthetics. ACs
development initiatives, and Pakistan Dairies (Igloo) lower penetration level
continuous marketing who are the major customers of indicates its future growth
campaigns and tireless sales PEL's deep freezers. potential. Post economic
activities lead to maintain the stabilization a robust product
Your company is capitalizing on
market share. demand is expected and your
stronger relations and technical
company is well equipped to
With the continued stabilization expertise and our After-Sale
grasp the opportunity.
due to post IMF program Department has signed service
Emerging Middle-Class and
measures, again improvement agreements Lotte Akhtar
growing urbanization are
in disposable income of Beverages (PEPSI) and
potential market growth
middle class is expected and Friesland Campnia Pakistan
drivers. Uninterrupted and
demand of refrigerators will be Limited (Engro Foods) for
lower cost electricity supply will
again on its growth trajectory. repair services of Deep
further increase the market
DIRECTORS’ REPORT
demand. Company's country market with a brand “COLOR market attention and sizeable
wide highly responsive after ON”. A massive launch with growth is expected in the years
sales services network is also advertisement campaigns all to come.
playing a vital role to win across the country to stamp the
Distribution Transformer
"Consumer Confidence”. product awareness was then
(DTR)
made.
Microwave Oven
PEL, is amongst the Pioneers in
PEL LED Televisions with latest
During the period under review Distribution Transformer
features on competitive price is
Company registered decline of Manufacturing in Pakistan, has
well received in market. During
25.48% in revenue from last set up a state-of-the-art
the year 2019 a revenue
year. PEL microwave ovens have Distribution Transformer
increase @ 145.37 % over the
improved product features and manufacturing and testing
corresponding year is
offer a unique cooking facility in year 2009 to attain
registered.
experience and also include Global Quality Standards.
solo as well as grill models Introducing state of the art Distribution Transformer is
inspired by users' need for both technology regarding Video among company's premier
the options. PEL microwave Processing and Latest Sound products. During year 2019
ovens are equipped with Standards were adopted to product revenues remained
manual as well as digital meet with the customer lower by 25.91% due to slow
interface depending on requirements. Further now a ordering from WAPDA
customers' needs. These days due to versatility of distribution companies and
products are well-designed and ANDROID OS in mobiles, lower demand from Industrial
recommended for space-saving, television manufacturers also sector as a result of overall
they also offer customized focused to embed this feature in economic slowdown.
cooking experience. the LED TVs. We have
Power generation capacity is up
incorporated the ANDROID OS
Water Dispenser to mark right now in the country
in LED TVs to convert the
and augmentation of T&D
On consistent Market Demand television from NORMAL to
infrastructure is required to
to widen the Product Range SMART and offer the user to
make the generated electricity
Company entered into Water enjoy the SMART television
available to end consumers. As
Dispenser trading and after experience.
the current slowdown ends, a
seeing business potential
Washing Machines robust demand of Distribution
decided to set up a Production
Transformers is expected and
Facility and started Commercial The persistent urge of
Your Company is well equipped
Production in year 2017. enhancing our product portfolio
to take this opportunity. Also,
Company enlarging its brand and diversification has led us to
the revival of local Industrial
equity maintained a revenue set up a Washing Machine
sector will create an incremental
increase @ 14.16% during the manufacturing facility. There is
demand from private sector.
year 2019 Sales, despite of sizeable market of Washing
Further, we are confident that
prevailing economic adversities Machine which exists in the
we will gain our due share of
and drastic decline in country and it is also an
distribution transformer in
disposable income. The essential home appliances
present government's initiative
continuous research and product in domestic
of Five Million houses of “Naya
development activities are on consumption. There is a
Pakistan Housing Authority
the way to improve product growing niche of automatic and
Project”.
quality & esthetics. semi-automatic washing
machines observed in the Your Company also gaining
LED Television
country during recent years. ground in the export market in
Growing local LED Television Company foresees a reasonable Middle East, Africa, and Central
market induced Company to market share in near future. The Asia, Swaziland with special
enter into this segment of home state-of-the-art manufacturing focus on Afghanistan.
appliance products. As a key facility has been installed and
PEL transformer manufacturing
unit of home appliances commercial production is
facility continues to be the
product portfolio, PEL decided started in July 2019.
flagship of the Company by
to enter into the manufacturing
PEL automatic & semi automatic maintaining its image of being
of LED televisions. The
washing machines with latest the best state-of the-art
Company has set up its
product features and manufacturing set up in the
production line in year 2018
competitive sales price gaining region. With the highest quality
and made a colorful entry in the
human resource, manufacturing urbanization and Population Development & approval of

and design infrastructure your pressure will increase demand Three Phase GSM / GPRS based
Company is committed to not of Power Transformers. We are on MPECO Specification
only maintain, but enhance its confident that we will gain our Customized Meter and
brand image in local as well as due share of distribution development of Firmware,
global markets. transformer supply share in Programming and Calibration
present government Five Million Software has already been
Power Transformer (PTR)
houses of “Naya Pakistan obtained. And your Company is
Company started Power Housing Authority Project”. well positioned to grasp any
Transformer Business in year arising opportunity
Our focus will remain on
2004, in technical Collaboration
continuous research and Construction of Five Million
with GANZ Hungry. Power
development which will enable Houses by “Naya Pakistan
Transformer is a high value asset
us to not only cater for the local Housing Authority” is another
in any electrical network. There
demands but also explore new opportunity window for Energy
are limited Power Transformer
markets outside Pakistan. Meter Business and Your
suppliers in Pakistan. The
Company as part of its plan is Switch Gears (SG) Company is well positioned to
on its way to achieve another take its due market share.
Company is among the
milestone by setting up a EPC Contracting
Pioneers of Switch Gear Industry
complete Power Transformer
in Pakistan and is engaged in PEL- EPC Department takes up
manufacturing facility under
Switch Gear business since its turnkey contracts involving
company's flagship at 34 KM
inception in 1958. PEL is one of Engineering, Procurement and
Ferozepur Road Lahore which
the leading manufacturers of Construction (EPC) for building
will be completed in next year.
Pakistan. Switch Gear Business power infrastructure projects
During the year, sales revenue reflected declining trend @ comprising electrical
of Power Transformer increased 6.63% during the year under networks/electrification and
by 265.89% as compared to last review due to timing of ordering grid stations up to 220 KV level.
year, as company effectively by WAPDA distribution
managed the execution of companies and in private EPC Business reflected a
orders obtained. Company business as a result of overall declining trend @ 53.70 % and
obtained “STL Short Circuit economic slowdown. registered revenue of Rupees
Certification from VEIKI-VNL 1,452 million against 3,135
We are confident that as current million previous year. The
Lab, Hungary” last year after
slowdown ends robust demand decline in EPC business is
successful testing of Power
of switch gear items will arise as based on the envisaged
Transformer and also managed
result smooth ordering from reduced business plan of
successful short circuit from
WAPDA Discos and industrial Company during the year.
local WAPDA Laboratories. We
sector as well and your Company redefined its business
expect an order book
company is well positioned to plan due to certain shifts in
breakthrough in near future.
obtain its due market share. The business dimensions requiring
As earlier explained that after overall private business of long working capital days and
attaining required power housing schemes and low margins in recent economic
generation capacity, the next upcoming projects of industrial scenario. Company made a
priority to make the same estates seem very promising in deliberate effort to reduce its
available to end consumers for next following years. business size to control working
which augmentation of T&D capital deployment.
Energy Meters
infrastructure is required. And
demand of Power Transformers, Energy Meter Business during EPC Business still holds a great
being high value item in grid the review registered 34.40% potential due to development
stations, will increase. We are YOY growth due to timely of proposed SEZs under CPEC
confident that PEL being key execution of ordering from arrangements and your
player will gain its due business WAPDA Distribution companies. company is well prepared to
share from WAPDA Distribution Your company has already grasp arising future
Companies. With the revival of developed Single Phase, Three opportunities in this sector.
local industry an additional Phase GSM Energy Meters and
demand of Power Transformer is DLMS Compliant Single-Phase
expected. Housing Sector Energy Meter and got it
Growth backed by rapid approved from NTDC.
DIRECTORS’ REPORT
FINANCIAL RATIOS
Unit 2019 2018 2017 2016 2015 2014
Profitability Ratios
Gross Profit ratio % 23.56 24.60 29.41 30.87 29.59 30.75
Net Profit to Sales % 3.15 4.82 10.67 13.68 11.46 10.92
EBIT margin Rupees in millions 3,383 3,765 5,173 5,691 5,295 4,438
EBITDA margin Rupees in millions 4,368 4,616 6,055 6,541 6,041 5,195
% change in sales % (3.51) (7.93) 24.10 16.37 21.54 27.94
% change EBIT margin % (10.14) (27.23) (9.10) 7.47 19.32 71.07
EBITDA Margin to Sales % 15.66 16.23 19.53 24.38 24.05 25.32
Operating Leverage Times 2.89 3.44 (0.38) 0.46 0.90 2.54
Return on Equity
- without revaluation reserves % 3.56 5.79 14.56 17.61 18.96 20.33
- with revaluation reserves % 2.86 4.53 12.25 14.39 14.40 14.37
Return on Capital Employed % 1.87 3.12 7.68 9.28 8.13 7.45
Liquidity Ratios
Current ratio Times 1.76 1.77 2.40 2.84 2.52 2.44
Quick / Acid Test ratio Times 1.19 1.04 1.55 1.73 1.61 1.49
Cash to Current Liabilities Times 0.03 0.03 0.05 0.07 0.07 0.05
Cash Flow from Operations to Sales Times 0.13 (0.04) 0.06 0.08 0.08 (0.17)
Activity/Turnover Ratios
Inventory turnover ratio Times 2.30 2.27 2.74 2.64 2.83 2.79
No. of Days in Inventory Days 159 161 133 138 129 131
Debtor turnover ratio Times 3.86 3.73 4.42 4.23 3.96 3.83
No. of Days in Receivables Days 95 98 83 86 92 95
Creditor turnover ratio Times 23.11 26.07 27.39 24.72 23.59 17.63
No. of Days in Payables Days 16 14 13 15 15 21
Total Assets turnover ratio Times 0.54 0.55 0.71 0.67 0.69 0.63
Fixed Assets turnover ratio Times 1.62 1.75 2.39 2.04 1.85 1.63
Operating Cycle Days 238 245 203 210 206 206
Investment/Market Ratios
Earning per Share - Basic Rupees 1.68 2.67 6.56 7.51 6.61 6.13
Earning per Share - Diluted Rupees 1.68 2.67 6.56 7.51 6.61 6.13
Price Earnings ratio Times 16.12 9.33 7.24 9.49 9.46 6.68
Dividend Yield ratio % - - 5.16 2.46 2.00 -
Dividend Payout ratio % - - 37.34 23.31 18.91 -
Dividend Cover ratio Times - - 2.68 4.29 5.29 -
Cash Dividend per Share Rupees - - 2.45 1.75 1.25 -
Stock Dividend per Share % - - - - - -
Market Value per Share
- year end Rupees 27.07 24.90 47.49 71.28 62.54 40.93
- high during the year Rupees 28.74 61.85 123.73 74.64 94.97 40.93
- low during the year Rupees 14.32 21.96 43.10 53.57 42.33 18.87
Break-up Value per Share
- without revaluation reserves Rupees 48.66 46.72 44.76 40.97 33.07 26.57
- with revaluation reserves Rupees 60.76 59.94 53.35 50.36 45.14 38.04
Market capitalization Rupees in millions 13,472 12,392 23,635 35,475 24,900 16,296
Capital Structure Ratios

Financial Leverage ratio Times 0.51 0.57 0.49 0.45 0.69 0.84
Weighted Average Cost of Debt % 13.50 10.69 9.31 9.13 11.15 14.81
Debt to Equity ratio % 13:87 13:87 18:82 20:80 29:71 36:64
Interest Cover ratio Times 1.52 2.30 4.50 5.16 3.67 2.47
COMMENTS ON FINANCIAL RATIOS
Profitability Ratios Investment / Market ratios

Gross profit ratio has decreased by 4.23% as As a result of decrease in earnings in current
compared to the previous year 2018 year, EPS has also decreased to 1.68 as
primarily due to increase in input cost compared to 2.67 in the previous year.
mainly affected by Pak Rupee depreciation Economic uncertainty on the political front
of 11.32% and decrease in sales due to resulted in an oscillate price trend exhibited
prevailing economic conditions in the by the Company's share throughout the
country. Net profit to sales ratio also year. However, investor confidence is
decreased by 34.69% as compared to 2018 resuming in the light of improved share
mainly due to increased finance cost. As a price of Rs. 27.07 per share as at the close of
result return on equity and capital employed 2019 in comparison with Rs. 24.90 at the
also decreased by 36.79% and 40.02% close of 2018 and fundamentals like price
against the previous year. earnings ratio which is 16.12 in 2019 as
compare to 9.33 in year 2018.
Liquidity Ratios
Capital Structure Ratios
Current ratio as at close of 2019 has
Financial leverage improved in the current
remained substantially the same as at the
year to 0.51 times which is reduced by
close of 2018 due to efficient liquidity
11.33% as compared to the year 2018 when
management, which also resulted in an
it was 0.57 times. As a result of increased
improved cash flow from operations to sales
finance cost and low earnings recorded in
ratio.
year under review interest cover declined to
Activity/ Turnover Ratios 1.52 times as compared to 2.30 times in
year 2018.
Inventory days decreased in current year by
2 days as compared to previous year 2018
and receivable days improved by 3 days
due to efficient operating cycle
management. The overall operating cycle of
the Company improved by 7 days as
compared to the previous year 2018.
DIRECTORS’ REPORT
GRAPHICAL ANALYSIS
Profit After Tax Gross Profit
4,000 10,000
3,500 9,000
Rupees in millions
Rupees in millions
8,000
3,000
7,000
2,500 6,000
2,000 5,000
1,500 4,000
3,000
1,000
2,000
500 1,000
- -
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Years Years
Financial Leverage Return on Equity

0.90 16.00
0.80 14.00
0.70 12.00
0.60
% age
10.00
Times
0.50
8.00
0.40
6.00
0.30
0.20 4.00
0.10 2.00
- -
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Years Years
Current ratio Inventory Turnover

3.00 3.00
2.50 2.50
2.00 2.00
Times
Times
1.50 1.50
1.00 1.00
0.50 0.50
- -
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Years Years
Interest Cover Operating Cycle

6.00 300
5.00 250
4.00 200
Times
Days
3.00 150
2.00 100
1.00 50
- -
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Years Years
Earnings per Share Market Value per Share

8.00 80.00
7.00 70.00
6.00 60.00
Rupees
Rupees
5.00 50.00
4.00 40.00
3.00 30.00
2.00 20.00
1.00 10.00
- -
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Years Years
Statement of Financial Position Analysis (Assets)

30,000
Rupees in millions
25,000
20,000
15,000
10,000
5,000
-
2014 2015 2016 2017 2018 2019
Years
Non-current Assets Current Assets
Statement of Financial Position Analysis (Equity and Liabilities)
2019
2018
2017
2016
2015
2014
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Equity Long term debt Deferred liabilities/income Current liabilities
Statement of Profit or Loss Analysis (Revenue)

45,000
40,000
Rupees in million
35,000
30,000
25,000
20,000
15,000
10,000
5,000
-
2014 2015 2016 2017 2018 2019
Years
Gross revenue Net revenue
Statement of Profit or Loss Analysis (Expenses)

2019
2018
2017
2016
2015
2014
75% 80% 85% 90% 95% 100%
Cost of sales Distribution cost Administrative and general expenses Other expenses Finance cost
DIRECTORS’ REPORT
DUPONT ANALYSIS
Unit 2019 2018
Tax burden % 99.73 88.07

Interest burden % 26.04 41.37
EBIT margin % 12.12 13.23
Asset turnover Times 0.54 0.55
Leverage % 167.20 172.06
Return on Equity % 2.86 4.53
Net profit Sales Total assets Total liabilities Total equity

Rs. 879 M Rs. 27,900 M Rs. 51,311 M Rs. 20,623 M Rs. 30,688 M
Net profit margin Assets turnover Total equity Total assets

3.15 % 0.54 times Rs. 30,688 M Rs. 51,311 M
Return on assets Ownership Ratio

1.71 % 59.81%
RETURN ON EQUITY
2.86 %
GRAPHICAL PRESENTATION OF DUPONT ANALYSIS

16.00
14.00 14.37 14.40 14.39
Return on Equity (% age)
12.00 12.25
10.00
8.00
6.00
4.00 4.53
2.86
2.00
-
2014 2015 2016 2017 2018 2019
Years
COMMENTS ON DUPONT ANALYSIS

EBIT margin has slided down over the outgoing year primarily due to increase in input cost in
local and international markets resulting from Pak Rupee depreciation. Increase in finance
costs due to increase in interest rates has further decreased net profit, despite improvement
in leverage. To sum up, these factors caused return on equity to fall from 4.53% for 2018 to
2.86% for 2019.
FREE CASH FLOW

Rs. In millions 2019 2018 2017 2016 2015 2014
Profit before taxation 881 1,558 3,603 4,119 3,514 2,545

Adjustments for non-cash and other items 3,300 2,609 2,197 2,125 2,391 2,649
Changes in working capital 2,022 (3,066) (2,347) (3,085) (2,506) (5,834)
Payments for income tax, interest etc. (2,444) (2,224) (2,010) (1,864) (2,119) (2,918)
Net cash generated from/(used in) operating activities 3,759 (1,123) 1,443 1,295 1,280 (3,558)
Purchase of property, plant and equipment (2,069) (2,369) (1,843) (1,731) (1,878) (387)
Free Cash Flows 1,690 (3,492) (400) (436) (598) (3,945)
2,000
1,690
1,000
-
(436) (400)
Free Cash Flows
(598)
(1,000)
(2,000)
(3,000)
(3,492)
(4,000) (3,945)
(5,000)
2014 2015 2016 2017 2018 2019
Years
COMMENTS ON FREE CASH FLOW

Despite major Installations and expansions in Washing Machine and Power Transformer
manufacturing and extension of other product range, cash outflows for capital expenditure
remained on the lower side as compared to last year. Whereas improvement in working
capital, especially after recovery of investment in stocks has resulted in availability of free cash
flow as compared to previous year.
DIRECTORS’ REPORT
ECONOMIC VALUE ADDED
Rs. In millions 2019 2018 2017 2016 2015 2014
Operating profit 3,364 3,663 5,155 5,616 5,193 4,449

Taxation (2) (186) (295) (450) (634) (304)
Operating profit after taxation 3,361 3,477 4,860 5,166 4,559 4,145
Total assets 51,311 52,100 43,916 40,327 36,149 32,527

Current liabilities (15,012) (15,990) (1,941) (2,247) (1,721) (5,761)
Invested Capital 36,299 36,110 41,975 38,080 34,428 26,766
WACC 16.95 14.92 11.86 11.61 11.84 14.39
Cost of capital 6,154 5,389 4,977 4,420 4,076 3,852
Economic Value Added (2,793) (1,911) (117) 746 483 294
1,000
746
500 483
294
-
(117)
Economic Value Added
(500)
(1,000)
(1,500)
(2,000) (1,911)
(2,500)
(2,793)
(3,000)
2014 2015 2016 2017 2018 2019
Years
COMMENTS ON ECONOMIC VALUE ADDED

Interest rates increased significantly during the year which caused the weighted average cost
of capital of the Company to rise by 13.6 % and also, coupled with depreciation of Rupee,
negatively affected the financial performance of the Company. The increase in cost of capital
and decrease in profits caused economic value added to decline further since the close of
2018.
SUMMARY OF CASH FLOWS

Rs. In millions 2019 2018 2017 2016 2015 2014
Profit before taxation 881 1,558 3,603 4,119 3,514 2,545

Adjustments for non-cash and other items 3,300 2,609 2,197 2,125 2,391 2,649
Changes in working capital 2,022 (3,066) (2,347) (3,085) (2,506) (5,834)
Payments for income tax, interest etc. (2,444) (2,224) (2,010) (1,864) (2,119) (2,918)
Net cash generated from/(used in) operating activities 3,759 (1,123) 1,443 1,295 1,280 (3,558)
Purchase of intangible assets (4) (8) (4) - - -
Proceeds from disposal of property, plant and equipment 168 36 30 38 126 16
Acquisition of short term investments - - - - - (50)
Proceeds from sale of investments - - - 65 - -
Net cash used in investing activities (1,905) (2,341) (1,817) (1,628) (1,752) (422)
Long term debt obtained 1,780 226 3,810 58 2,063 1,850

Repayment of long term debt (1,887) (1,910) (4,153) (1,854) (2,912) (319)
Net increase/(deacrese) in short term borrowings (1,888) 5,616 2,246 313 426 345
Proceeds from issue of ordinary shares - - - 2,406 - 2,064
Advances against issue of ordinary shares - - - - 1,575 -
Proceeds from sale and leaseback activities 187 110 15 4 52 100
Dividend paid (4) (591) (1,611) (619) (494) -
Net cash generated from/(used in) financing activities (1,812) 3,451 307 308 710 4,041
Net increase/(decrease) in cash and cash equivalents 42 (13) (67) (25) 238 62
Cash and cash equivalents as at beginning of the year 472 485 553 578 340 278
Cash and cash equivalents as at end of the year 514 472 485 553 578 340
5,000
4,000
3,000
Rupees in million
2,000
1,000
-
(1,000)
(2,000)
(3,000)
(4,000)
2014 2015 2016 2017 2018 2019

Years
Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities
COMMENTS ON CASH FLOWS

Net cash used in operating activities amounted to Rs. 3,759 million, after payment of
interest/mark-up of Rs. 2,131 million and income tax payments of Rs. 314 million.
Net cash used in investing activities amounted to Rs. 1,905 million comprising payments for
capital expenditure of Rs. 2,069 million, and intangible assets of Rs. 3.8 million partially offset
by proceeds from disposal of property, plant and equipment amounting to Rs. 168 million.
Net cash used in financing activities amounted to Rs. 1,812 million comprising payments for
long term and short term debt amounting to Rs. 3,776 million and dividend payments of Rs.
3.6 million partially offset by long term finances obtained of Rs. 1,780 million and proceeds
from sale and lease back activities of Rs. 187 million.
DIRECTORS’ REPORT
HORIZONTAL ANALYSIS
2019 2019 vs 2018 2018 2018 vs 2017 2017
Rs. in M %age Rs. in M %age Rs. in M
EQUITY AND LIABILITIES
Equity 30,688 1.35 30,280 12.14 27,001

Non-current liabilties 5,611 (3.76) 5,830 (10.33) 6,502
Current liabilties 15,012 (6.12) 15,990 53.55 10,413
TOTAL EQUITY AND LIABILITIES 51,311 (1.51) 52,100 18.64 43,916
ASSETS
Non-current assets 24,842 4.59 23,752 25.68 18,899

Current assets 26,469 (6.63) 28,348 13.31 25,017
TOTAL ASSETS 51,311 (1.51) 52,100 18.64 43,916
PROFIT OR LOSS
Revenue 37,621 (3.51) 38,990 (7.93) 42,347

Gross profit 6,573 (6.06) 6,997 (23.24) 9,116
Operating profit 3,364 (8.17) 3,663 (28.95) 5,155
Profit before taxation 881 (43.43) 1,557 (56.78) 3,603
Profit after taxation 879 (35.94) 1,371 (58.54) 3,308
COMMENTS ON HORIZONTAL ANALYSIS

Non-current assets have increased as compared to 2018 primarily on the back of acquisition
of property, plant and equipment to support the increasing range of products offered by the
Company. Non-current liabilities have decreased due to repayment of long term debt.
Current liabilities and current assets have both decreased due to reduction in short term debt
and recovery of investment in inventories respectively resulting in lowering of net current
assets by 7.29%.
Decline in sales revenue is attributable to lower per capital disposable income and slow
ordering for the Company’s power products by WAPDA Discos. Profit margins decreased due
to increase in input cost, interest rates and depreciation of Pak Rupee.
2017 vs 2016 2016 2016 vs 2015 2015 2015 vs 2014 2014 2014 vs 2013 2013
%age Rs. in M %age Rs. in M %age Rs. in M %age Rs. in M
5.84 25,511 27.58 19,996 28.22 15,595 39.77 11,158

(6.73) 6,971 (17.33) 8,432 (13.82) 9,783 19.27 8,203
32.75 7,845 1.59 7,722 8.02 7,148 (8.15) 7,782
8.90 40,327 11.56 36,149 11.14 32,527 19.84 27,143
4.60 18,068 8.07 16,719 10.96 15,068 (1.49) 15,295

12.39 22,259 14.56 19,431 11.29 17,459 47.36 11,848
8.90 40,327 11.56 36,149 11.14 32,527 19.84 27,143
24.10 34,124 16.37 29,323 21.54 24,126 27.94 18,856

10.05 8,284 11.43 7,434 17.83 6,309 55.59 4,055
(8.20) 5,616 8.14 5,193 16.72 4,449 70.11 2,615
(12.53) 4,119 17.22 3,514 38.07 2,545 228.46 775
(9.86) 3,670 27.43 2,880 28.49 2,241 269.07 607
DIRECTORS’ REPORT
VERTICAL ANALYSIS
2019 2018
Rs. in M %age Rs. in M %age
Equity 30,688 59.81 30,280 58.12

Non-current liabilties 5,611 10.94 5,830 11.19
Current liabilties 15,012 29.26 15,990 30.69
TOTAL EQUITY AND LIABILITIES 51,311 100.00 52,100 100.00
ASSETS
Non-current assets 24,842 48.41 23,752 45.59

Current assets 26,469 51.59 28,348 54.41
TOTAL ASSETS 51,311 100.00 52,100 100.00
PROFIT OR LOSS
Revenue 37,621 100.00 38,990 100.00

Gross profit 6,573 17.47 6,997 17.95
Operating profit 3,364 8.94 3,663 9.39
Profit before taxation 881 2.34 1,557 3.99
Profit after taxation 879 2.34 1,371 3.52
COMMENTS ON VERTICAL ANALYSIS

Non-current assets have increased to 48.41% as compared to 45.59% at the close of 2018
primarily on the back of acquisition of property, plant and equipment to support the
increasing range of products offered by the Company. Non-current liabilities have decreased
to 10.94% from 11.19% at the close of 2018 due to repayment of long term debt. Current
liabilities and current assets have both decreased due to reduction in short term debt and
recovery of investment in inventories respectively resulting in lowering of net current assets.
Profit margins decreased due to increase in input cost, interest rates and depreciation of Pak
Rupee.
2017 2016 2015 2014

Rs. in M %age Rs. in M %age Rs. in M %age Rs. in M %age
27,001 61.48 25,511 63.26 19,996 55.31 15,595 47.94

6,502 14.81 6,971 17.29 8,432 23.33 9,783 30.08
10,413 23.71 7,845 19.45 7,722 21.36 7,148 21.98
43,916 100.00 40,327 100.00 36,149 100.00 32,527 100.00
18,899 43.03 18,068 44.80 16,719 46.25 15,068 46.32

25,017 56.97 22,259 55.20 19,431 53.75 17,459 53.68
43,916 100.00 40,327 100.00 36,149 100.00 32,527 100.00
42,347 100.00 34,124 100.00 29,323 100.00 24,126 100.00

9,116 21.53 8,284 24.28 7,434 25.35 6,309 26.15
5,155 12.17 5,616 16.46 5,193 17.71 4,449 18.44
3,603 8.51 4,119 12.07 3,514 11.98 2,545 10.55
3,308 7.81 3,670 10.75 2,880 9.82 2,241 9.29
DIRECTORS’ REPORT
QUARTERLY ANALYSIS
100%
1st 2nd 3rd 4th
Rupees in millions Quarter Quarter Quarter Quarter 90% 19% 19%
23%
24%
80%
Revenue 8,575 14,502 7,228 7,316
Sales tax and discount (1,959) (4,315) (1,419) (2,028) 70% 19% 21%
21% 22%
Revenue - net 6,616 10,187 5,809 5,288
60%
Cost of sales (4,846) (7,918) (4,506) (4,057)
Gross profit 1,770 2,269 1,303 1,231 50%
Other income 8 12 1 13
40%
39% 37%
31% 32%
Operating expenses (749) (1,019) (696) (778)
30%
Operating profit 1,029 1,262 608 466
Finance cost (575) (791) (536) (578)
20%
454 471 72 (112)
10% 23% 23% 23% 23%
Share of loss of associate 1 - (1) (3)
Profit before taxation 455 471 71 (115) 0%
Taxation (39) (78) (9) 124 Revenue Cost of Operating Finance
sales expenses cost
Profit after taxation 416 393 62 9 1st quarter 2nd Quarter 3rd Quarter 4th Quarter
COMMENTS ON QUARTERLY ANALYSIS
Sales revenue for the first quarter was Sales revenue for the second quarter
reported at Rs. 8,575 million, 2.36% was reported at Rs. 14,502 million,
higher than the corresponding quarter 2.66% higher than the corresponding
of the year 2018. However, gross quarter of the year 2018. However,
2nd Quarter
margin decreased to 26.75% in gross margin decreased to 22.27%
1st Quarter
comparison with 29.04% for from 23.23% for corresponding quarter

corresponding quarter of the year 2018 of the year 2018 due to increase in
due to increase in input cost resulting input cost resulting from Pak Rupee
from Pak Rupee Depreciation while net Depreciation while net profit margin
profit margin decreased to 6.3% from decreased to 3.9% in comparison with
8.5% for the corresponding quarter of 6.5% for the corresponding quarter of
the year 2018 due to increase in the year 2018 due to increase in
interest cost. interest cost.
Sales revenue for the third quarter was Sales revenue for the fourth quarter
reported at Rs. 7,228 million, 14% lower was reported at Rs. 7,316 million, 9.5%
than the corresponding quarter of the lower than the corresponding quarter
year 2018. The decrease in revenue is of the year 2018. The decrease in
3rd Quarter
4th Quarter
attributable to slow ordering of Power revenue is attributable to slow ordering

Division products by WAPDA Discos of Power Division products by WAPDA
and overall slash in the development Discos and overall slash in the
budgets by the Government. Gross development budgets by the
margin decreased to 22.43% in Government. Gross margin decreased
comparison with 22.6% for the to 23.28% in comparison with 24.63%
corresponding quarter of the year 2018 for the corresponding quarter of the
due to increase in input cost resulting year 2018 due to increase in input cost
from Pak Rupee Depreciation. resulting from Pak Rupee Depreciation.
DIRECT METHOD CASH FLOW STATEMENT
Rs. in millions 2019 2018 2017 2016 2015 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers - net 38,312 39,358 39,823 33,322 28,670 21,869
Payments to suppliers/service providers/employees etc - net (32,070) (38,096) (36,180) (29,983) (25,154) (22,473)
Payment to Workers' Profit Participation Fund (28) (87) (105) (107) (70) (27)
Payment to Workers' Welfare Fund (10) (74) (84) (72) (47) (9)
Interest/mark-up on borrowings paid (2,131) (1,414) (1,143) (1,203) (1,683) (2,748)
Income taxes (paid)/refund (314) (810) (867) (661) (437) (170)
Net cash generated from/(used in) operating activties 3,759 (1,123) 1,443 1,295 1,280 (3,558)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets (4) (8) (4) - - (0)
Proceeds from disposal of property, plant and equipment 168 36 30 38 126 16
Acquisition of short term investments - - - - - (50)
Proceeds from sale of investments - - - 65 - -
Net cash generated used in investing activties (1,905) (2,341) (1,817) (1,628) (1,752) (422)
CASH FLOWS FROM FINANCING ACTIVITIES
Long term debt obtained 1,780 226 3,810 58 2,063 1,850

Repayment of long term debt (1,887) (1,910) (4,153) (1,854) (2,912) (319)
Net increase/(deacrese) in short term borrowings (1,888) 5,616 2,246 313 426 345
Proceeds from issue of ordinary shares - - - 2,406 - 2,064
Advances against issue of ordinary shares - - - - 1,575 -
Proceeds from sale and leaseback activities 187 110 15 4 52 100
Dividend paid (4) (591) (1,611) (619) (494) -
Net cash generated used in investing activties (1,812) 3,451 307 308 710 4,041
Net increase/(decrease) in cash and cash equivalents 42 (13) (67) (25) 238 62
Cash and cash equivalents at the end of the year 472 485 553 578 340 278
Cash and cash equivalents at the end of the year 514 472 485 553 578 340
COMMENTS ON DIRECT METHOD CASH FLOW STATEMENT

Net cash used in operating activities amounted to Rs. 3,759 million, after payment of
interest/mark-up of Rs. 2,131 million and income tax payments of Rs. 314 million.
Net cash used in investing activities amounted to Rs. 1,905 million comprising payments for
capital expenditure of Rs. 2,069 million, and intangible assets of Rs. 3.8 million partially offset
by proceeds from disposal of property, plant and equipment amounting to Rs. 168 million.
Net cash used in financing activities amounted to Rs. 1,812 million comprising payments for
long term and short term debt amounting to Rs. 3,776 million and dividend payments of Rs.
3.6 million partially offset by long term finances obtained of Rs. 1,780 million and proceeds
from sale and lease back activities of Rs. 187 million.
DIRECTORS’ REPORT
SEGMENTAL REVIEW
An operating segment is a component of an entity:
a) that engages in business activities from which it may earn revenues and incur expenses (including
revenues and expenses relating to transactions with other components of the same entity),
b) whose operating results are regularly reviewed by the entity's chief operating decision maker to
make decisions about resources to be allocated to the segment and assess its performance, and
c) for which discrete financial information is available.
Information about the Group's reportable segments as at the reporting date is as follows:
Segments Nature of business
Power Division Manufacturing and distribution of Transformers, Switch Gears, Energy Meters,
Power Transformers and Engineering, Procurement and Construction
Contracting (EPC).
Appliances Division Manufacturing, assembling and distribution of Refrigerators, Air conditioners,
Deep Freezers, Microwave ovens, Water Dispensers, LED TVs, Washing
Machines and other Small Domestic Appliances.
Power Division Appliances Division

Power division recorded 16.06% decline in Appliance Division maintained its business
revenue in comparison with previous year volumes of Rs. 27 billion, as in the previous year,
resulting in segment profit of Rs. 141 million for despite overall decline in per capita disposable
the year, down by 49.64% from 2018. The income. However, profit margins went down by
decline was mainly attributable to slow ordering 43.49% from the previous year due to increase in
of power products by WAPDA DISCOs and interest rates and depreciation of Rupee. A
depreciation of Pak Rupee. A summary of summary of operating results of appliances
operating results of power division is presented division is presented below:
below:
Power Division Appliances division
2019 2018 YoY 2019 2018 YoY

Rs. in M Rs. in M %age Rs. in M Rs. in M %age
Revenue 9,834 11,715 (16.06) Revenue 27,787 27,276 1.87

Finance cost 791 689 14.80 Finance cost 1,689 1,415 19.36
Segment profit 141 280 (49.64) Segment profit 766 1,322 (42.54)
Revenue Revenue
Power Division Appliances Division
15,000 30,000
14,000
13,000 25,000
12,000
11,000 20,000
10,000
9,000 15,000
8,000
7,000 10,000
6,000
5,000 5,000
2018 2019 2018 2019
MARKET SHARE INFORMATION

The Company is listed on Pakistan Stock Exchange ['PSX'] which is a large and liquid stock
exchange, offering orderly and reliable market prices for its investors. As at December 31,
2019, the market capitalization of PEL's shares stood at Rs. 13,472 million, up by 8.71% from
previous year. PEL's share traded at an average of Rs. 21.53 per share. Market price
experienced fluctuations, principally, caused by market psychology, speculative investors and
material events occurring during the year, between Rs. 14.32 and Rs. 28.74 per share. Total
trading volume during the year was 1,421 million shares.
Share Price vs Volume Traded 2019

35,000,000 35.00
30,000,000 30.00
25,000,000 25.00
20,000,000 20.00
15,000,000 15.00
10,000,000 10.00
5,000,000 5.00
- -
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Volume Traded Share Price
Highest Share Price Lowest Share Price Average Share Price
SHARE PRICE SENSITIVITY

PEL's share price is directly affected by its performance. However, there are numerous other
factors which influence share price of the Company. These factors and the way the influence
the share price of the Company are as follows:
General Market Sentiment: The general stock market sentiment prevalent in the country not
affects share price but also the trading volumes. Market sentiment is generally based on over
political, economical and law and order situation of the Country and any uncertainty
regarding these adversely affects share prices.
Shares' market perception: Shareholders' perception of the Company's share affects how it is
valued on the exchange. A sell behavior induces a fall in share price.
Financial performance: The Company's financial performance is affected by a number of
factors which include, but are not limited to:
• Interest rates: The Company relies on debt financing to finance its working capital
requirements. Increase in interest rates increases the borrowing costs of the Company.
• Energy crises: The current energy crises has a direct bearing on the operations of the
Company. Hikes in electric power tariff increase the cost of operations thereby reducing
profitability.
• Rupee valuation: The Company is directors exposed to exchange rate fluctuation. Any
depreciation of Pak Rupee adversely impact the financial performance of the Company.
• Engineering and home appliances industry: Any growth or decline in the engineering and
home appliance industry has a direct impact on financial performance of the Company
• Government policies: Government policies, including those related to direct and indirect
taxes, can have a substantial impact on the Company's financial performance.
DIRECTORS’ REPORT
MARKET OVERVIEW successful campaign as the sales sky-
rocketed with a positive market feedback.
The appliances industry in Pakistan has
continued to grow steadily for the past few Going Digital
years. As domestic appliances become The year 2019 brought about a change in
more energy efficient and affordable, the marketing strategy at PEL. With the
penetration of these appliances is growing growing popularity of digital platforms the
day by day. Business growth potential idea was to invest in this area and capture
remains steady, with more households the potential target market. As a result in
willing to embrace our reliable home 2019 we spent 30% less on ATL but were
appliances for better living. Continued focus still able to maintain out Top of Mind Recall
of the Government on improvement of figures with the help of Digital platforms.
power generation and distribution Numerous digital campaigns were launched
infrastructure, the market outlook for power with PEL E-Shop and Khilaadi Online being
division looks promising. the highlights. PEL's own platform of
Government's initiatives in the energy sector ecommerce was launched which proved a
in light of recent energy deals signed, huge success. As 2019 had one of the
policies for IPPs and above all, CPEC will biggest cricketing seasons so PEL decided
create a pool of opportunities for power to bring something new and innovative for
products. EPC activity is also on a growth its followers. PEL partnered with cricingif
track due to the increase in housing sector and Khilaadi Online during the PSL and ICC
schemes and upgrading of grid stations. Cricket World Cup 2019. Khilaadi Online
Game was launched by PEL which gave a
PEL’s MARKETING ACTIVITIES chance to its audience to win instant cash
PEL is providing premium quality products prizes and bumper prizes of home
to consumers through its ever evolving appliances. The idea of Khilaadi turned out
dealer network which is spread all over the to be a success with over 250 million
country. PEL's market strategy encompasses impressions for the entire duration. PEL was
market research, brand positioning and awarded the Gamification Award at Pakistan
marketing communications as well as right Digi Awards 2019 for its Khilaadi Online
decisions in terms of incentives and dealers Game.
to ensure smooth Market Centric Promotions
running of dealers network. The sales of In continuation of our efforts last year we
power division mainly originate from continued with our market centric
tendering and our power division marketing promotions in 2019. The objective here is
team is well versed and equipped to win not only be prominent in the market but also
major orders. to educate and incentivize customers in
Product Launches order to make maximum conversions. We
kick-started this with our live demonstration
In 2019 product launches were a major of newly launched refrigerator air
chunk of the marketing activities. . PEL conditioners across all major markets of
launched completely redesigned and Pakistan. Our representative educated the
improved wider body range of refrigerators customers and dealers on the features of the
which offered “Pakistan's Largest Freezer in product and were able to attract massive
a Refrigerator”. PEL also launched the new crowds due to the impressive product and
range of Split Air Conditioners which had the creative display. In another campaign we
the highest ever SEER (Seasonal Energy had a Meal Partner on board and gave away
Efficiency Ratio) in the market. These free meal vouchers on purchase of PEL
campaigns were launched across all products. PEL also participated in the
platforms including Television, Radio and Annual Sales Mela organized by the Lahore
Digital forums. These turned out to be Dealers Market with “JEETO PEL SE”
DIRECTORS’ REPORT
campaign where regular lucky draws were Extensive quality assurance measures have
conducted gifts were distributed. PEL been implemented by PEL to provide best
partnered with Dolmen Shopping Mall 'value for money' products.
during its Shopping Festival 2019. During
Major Achievements
this festival PEL had a product display at the
mall with lucky draws giving out PEL Quality Control and Assurance team of
products to the lucky winners. appliances division has achieved a myriad of
significant milestones in recent years to
Trade Partners Support
address and unravel key chronic issues with
PEL initiated the Dealers Trainings in 2019. the implementation of customized and
Under this program trainings were held in all indigenous solutions. Some of their major
the major cities of the country where PEL achievements are:
product display was display was set up and
• Production Line Information System (PLIS)
dealers were briefed on the technical
is a software application designed to
features of all products and how they stood
monitor and improve the production
out from the rest of the competition. Dealers
processes. With its use, not only has PEL
thoroughly enjoyed this initiative where they
increased its product quality and
had a unique chance to know about the
productivity but it has also provided
product by interacting directly with the
management with the real time data for
owners of the products. PEL also proudly
correct decision making. It gives full
kick-started it's Merchandisers Activity in
product traceability and ensures that
2019. A young, energetic and talented team
product leaving the factory has been
was formed across all zones of the country.
produced and tested according to the
The aim of this team was to ensure perfect
specifications. PEL is first to introduce this
PEL product displays throughout the country
remarkable application.
in PEL decorated dealer shops and to
disburse the POS material as per company • PEL has installed a foolproof testing
standards. All the progress was tracked facility for its Deep Freezer plant in which
using a specifically designed mobile all the equipment is integrated
application. This activity also proved to be completely with system through PLIS
extremely popular with our dealer network application with the avid collaboration of
throughout the country as it helped them Agramkow Fluid Systems. With this up
make PEL conversions. gradation of the testing facility, the rate of
market complaints of Deep Freezer has
PRODUCT QUALITY ASSURANCE reduced tremendously.
PEL is dedicated towards maintenance of • Up-gradation of the testing facilities in
excellent product quality which is evident refrigerator plant is also in-process,
from evergrowing consumer confidence in whose first phase has recently been
PEL's products. completed in which Testing Line A is
The alpha and omega of our quality upgraded and integrated with system
objectives are increasingly customer centric. through PLIS with the overwhelming
Minimizing key critical complains on one support of Agramkow Fluid Systems. In
hand and introducing cutting edge continuation of the aforementioned
features/technologies in all of its worthy project, PLIS-3 was upgraded to PLIS-5;
products on the other, PEL is ready to take a thus integrating all the processes i-e:
radical leap through product innovation, Evacuation, Gas Charging, EST Testing,
diversity and unique business system from Gas Leakage Testing and Computerized
market driven to market driving in the future Performance Testing to the system
not too far. thereby rendering product quality
foolproof so that only good quality
products reach the customer’s door step.
PATTERN OF SHAREHOLDING
FORM 34
THE COMPANIES ACT 2017

[Section 227(2)(f)]
1. Name of the Company PAK ELEKTRON LIMITED
2. Pattern of holding of the shares held by the shareholders as at 31-12-2019
2.2 Number of Shareholding Total

shareholders From To shares held
1,004 1 100 35,982

2,034 101 500 846,913
1,962 501 1,000 1,847,477
3,552 1,001 5,000 9,909,959
1,027 5,001 10,000 8,148,537
389 10,001 15,000 5,023,137
243 15,001 20,000 4,467,541
179 20,001 25,000 4,210,650
108 25,001 30,000 3,074,986
57 30,001 35,000 1,891,079
55 35,001 40,000 2,121,046
40 40,001 45,000 1,743,968
92 45,001 50,000 4,517,543
22 50,001 55,000 1,177,025
26 55,001 60,000 1,536,645
18 60,001 65,000 1,144,975
17 65,001 70,000 1,159,918
19 70,001 75,000 1,398,405
10 75,001 80,000 784,422
13 80,001 85,000 1,078,305
17 85,001 90,000 1,504,168
12 90,001 95,000 1,122,227
40 95,001 100,000 3,992,465
6 100,001 105,000 621,083
9 105,001 110,000 973,707
4 110,001 115,000 448,375
6 115,001 120,000 717,700
5 120,001 125,000 619,000
5 125,001 130,000 641,400
6 130,001 135,000 803,625
3 135,001 140,000 416,000
5 140,001 145,000 714,770
11 145,001 150,000 1,650,000
4 150,001 155,000 609,500
3 155,001 160,000 472,599
4 160,001 165,000 654,000
1 165,001 170,000 169,000
3 170,001 175,000 522,000
2 175,001 180,000 359,500
4 185,001 190,000 757,000
3 190,001 195,000 575,000
16 195,001 200,000 3,196,400
1 200,001 205,000 203,000
2 205,001 210,000 415,800
2 210,001 215,000 426,500
2 215,001 220,000 433,990
4 220,001 225,000 898,500
1 225,001 230,000 230,000
2 230,001 235,000 465,076
1 240,001 245,000 245,000
3 245,001 250,000 748,500
1 255,001 260,000 257,500
1 265,001 270,000 268,000
3 270,001 275,000 823,000
DIRECTORS’ REPORT
4. Number of Shareholding Total

1 275,001 280,000 277,000

1 280,001 285,000 281,250
4 285,001 290,000 1,156,000
8 295,001 300,000 2,400,000
1 300,001 305,000 300,500
1 305,001 310,000 305,300
1 310,001 315,000 315,000
4 325,001 330,000 1,314,500
1 335,001 340,000 337,120
2 345,001 350,000 700,000
1 355,001 360,000 357,000
1 360,001 365,000 361,500
1 370,001 375,000 375,000
1 385,001 390,000 389,000
2 395,001 400,000 800,000
1 425,001 430,000 427,500
1 435,001 440,000 440,000
2 485,001 490,000 972,770
7 495,001 500,000 3,498,000
1 500,001 505,000 502,500
2 505,001 510,000 1,016,500
1 510,001 515,000 511,000
1 515,001 520,000 515,803
1 525,001 530,000 529,500
2 545,001 550,000 1,100,000
3 555,001 560,000 1,677,000
1 570,001 575,000 575,000
1 580,001 585,000 581,000
1 595,001 600,000 600,000
1 605,001 610,000 608,000
1 615,001 620,000 617,645
2 645,001 650,000 1,296,500
1 695,001 700,000 700,000
1 710,001 715,000 711,500
2 740,001 745,000 1,482,447
1 745,001 750,000 750,000
1 760,001 765,000 765,000
1 795,001 800,000 800,000
1 805,001 810,000 810,000
1 810,001 815,000 811,250
2 870,001 875,000 1,748,523
1 970,001 975,000 975,000
3 995,001 1,000,000 3,000,000
1 1,095,001 1,100,000 1,100,000
1 1,315,001 1,320,000 1,317,000
1 1,335,001 1,340,000 1,336,500
1 1,415,001 1,420,000 1,415,500
1 1,425,001 1,430,000 1,426,500
1 1,440,001 1,445,000 1,445,000
1 1,445,001 1,450,000 1,450,000
1 1,450,001 1,455,000 1,450,650
2 1,495,001 1,500,000 3,000,000
2 1,595,001 1,600,000 3,200,000
1 1,790,001 1,795,000 1,792,000
1 1,995,001 2,000,000 2,000,000
1 2,160,001 2,165,000 2,162,000
1 2,495,001 2,500,000 2,500,000
1 2,925,001 2,930,000 2,929,552
1 2,995,001 3,000,000 3,000,000
1 3,000,001 3,005,000 3,000,500
1 3,155,001 3,160,000 3,158,000
1 3,215,001 3,220,000 3,217,945
1 3,265,001 3,270,000 3,266,300
1 3,370,001 3,375,000 3,372,500
1 3,400,001 3,405,000 3,400,195
1 3,520,001 3,525,000 3,525,000
1 4,035,001 4,040,000 4,039,500
2.2 Number of Shareholding Total

1 4,710,001 4,715,000 4,710,893

1 4,925,001 4,930,000 4,926,500
1 4,995,001 5,000,000 5,000,000
1 5,305,001 5,310,000 5,306,000
2 6,695,001 6,700,000 13,400,000
1 7,375,001 7,380,000 7,378,000
1 7,495,001 7,500,000 7,500,000
1 8,465,001 8,470,000 8,468,625
1 13,495,001 13,500,000 13,500,000
1 14,735,001 14,740,000 14,737,537
1 106,845,001 106,850,000 106,849,067
1 126,635,001 126,640,000 126,635,715
11,172 497,681,485
CLASSIFICATION OF ORDINARY SHARES BY CATEGORIES AS AT DECEMBER 31, 2019

Categories of Shareholders Share held Percentage
Directors, Chief Executive Officer, and their spouse

and minor children 146,112,028 29.3585%
Associated Companies, undertakings and related party 1,450,650 0.2915%
NIT and ICP 5,232,738 1.0514%
Banks Development Financial Institutions Non Banking
Financial Institution 23,266,279 4.6749%
Insurance Companies 32,919,713 6.6146%
Modarabas and Mutual Funds 5,916,593 1.1888%
Share holders holding 10% or more 233,484,782 46.9145%
General Public
a) Local 233,867,060 46.9913%
b) Foreign 7,710 0.0015%
Others (to be specified)
1- Investment Companies 3,284,000 0.6599%
2- Joint Stock Companies 11,344,560 2.2795%
3- Foreign Companies 29,376,058 5.9026%
4- Pension Funds 3,455,947 0.6944%
5- Other Companies 1,448,149 0.2910%
DIRECTORS’ REPORT
CATEGORIES OF SHAREHOLDING AS ON DECEMBER 31, 2019
Sr. Name No. of Shares Percentage

No. Held
Associated Companies, Undertakings and Related Parties (Name Wise):
1 SARITOW (PAKISTAN) LIMITED 1,450,650 0.2915
Mutual Funds (Name Wise Detail)

1 CDC - TRUSTEE AKD INDEX TRACKER FUND (CDC) 58,275 0.0117
2 CDC - TRUSTEE AL AMEEN ISLAMIC DEDICATED EQUITY FUND (CDC) 900 0.0002
3 CDC - TRUSTEE AL-AMEEN ISLAMIC ASSET ALLOCATION FUND (CDC) 700 0.0001
4 CDC - TRUSTEE AL-AMEEN SHARIAH STOCK FUND (CDC) 357,000 0.0717
5 CDC - TRUSTEE ALFALAH GHP ISLAMIC DEDICATED EQUITY FUND (CDC) 10,315 0.0021
6 CDC - TRUSTEE ALFALAH GHP ISLAMIC STOCK FUND (CDC) 163,000 0.0328
7 CDC - TRUSTEE ALHAMRA ISLAMIC STOCK FUND (CDC) 529,500 0.1064
8 CDC - TRUSTEE FAYSAL MTS FUND - MT (CDC) 94,500 0.0190
9 CDC - TRUSTEE KSE MEEZAN INDEX FUND (CDC) 515,803 0.1036
10 CDC - TRUSTEE NBP ISLAMIC ACTIVE ALLOCATION EQUITY FUND (CDC) 67,500 0.0136
11 CDC - TRUSTEE NBP ISLAMIC STOCK FUND (CDC) 557,000 0.1119
12 CDC - TRUSTEE NBP MAHANA AMDANI FUND - MT (CDC) 107,000 0.0215
13 CDC - TRUSTEE NBP SAVINGS FUND - MT (CDC) 70,000 0.0141
14 CDC - TRUSTEE NBP STOCK FUND (CDC) 2,162,000 0.4344
15 CDC - TRUSTEE PAKISTAN CAPITAL MARKET FUND (CDC) 200,000 0.0402
16 CDC - TRUSTEE UBL STOCK ADVANTAGE FUND (CDC) 289,500 0.0582
17 CDC-TRUSTEE ALHAMRA ISLAMIC ASSET ALLOCATION FUND (CDC) 500,000 0.1005
18 MCBFSL - TRUSTEE ABL ISLAMIC STOCK FUND (CDC) 5,000 0.0010
19 MCBFSL TRUSTEE ABL ISLAMIC DEDICATED STOCK FUND (CDC) 100,000 0.0201
Directors, CEO and their Spouse and Minor Children (Name Wise):
1 MR. M. NASEEM SAIGOL (CDC) 126,635,715 25.4451

2 MR. MUHAMMAD MURAD SAIGOL 12,421 0.0025
3 MR. MUHAMMAD ZEID YOUSAF SAIGOL 14,749,958 2.9637
4 MUHAMMAD KAMRAN SALEEM 500 0.0001
5 SYED MANZAR HASSAN 2,041 0.0004
6 SYED HAROON RASHID 500 0.0001
7 MRS. SEHYR SAIGOL W/O MR. M. NASEEM SAIGOL (CDC) 4,710,893 0.9466
Executives: - -
Public Sector Companies & Corporations: - -
Banks, Development Finance Institutions, Non Banking Finance

Companies, Insurance Companies, Takaful, Modarabas and Pension Funds: 59,770,539 12.0098
Shareholders holding five percent or more voting intrest in the

listed company (Name Wise)
1 MR. M. NASEEM SAIGOL (CDC) 126,635,715 25.4451

2 MRS. AMBER HAROON SAIGOL (CDC) 106,849,067 21.4694
All trades in the shares of the listed company, carried out by its Directors, CEO, CFO, Company
Secretary, Their spouses and minor children:
S. No. NAME SALE PURCHASE
1 MR. M. NASEEM SAIGOL (CDC) - 1,730,000

2 MRS. AMBER HAROON SAIGOL W/O MR. M. AZAM SAIGOL (CDC) - 1,030,000
3 MRS. AMBER HAROON SAIGOL W/O MR. M. AZAM SAIGOL (CDC)
(Inheritance Transmission) - 3,589,534
2019
29.3585 146,112,028
0.2915 1,450,650
1.0514 5,232,738
4.6749 23,266,279
6.6146 32,919,713
1.1888 5,916,593
46.9145 233,484,782
46.9913 233,867,060
0.0015 7,710
0.6599 3,284,000
2.2795 11,344,560
5.9026 29,376,058
0.6944 3,455,947
0.2910 1,448,149
DIRECTORS’ REPORT
CAPITAL EXPENDITURE CORPORATE AND FINANCIAL
Customer satisfaction is a primary
REPORTING FRAMEWORK
organizational objective and company is The Directors are pleased to state that:
always determined for its energy efficient • The financial statements, prepared by the
and esthetically improved products for management of the company, present its
market competitiveness. Company is
state of affairs fairly, the result of its
consistently spending on development of
operations, cash flows and changes in
different models in its existing products to
equity.
cater market demand. On consistent market
demand, the Company during the year • Proper books of accounts of the company
added Washing Machine production line have been maintained.
which started commercial production from • Appropriate accounting policies have
July 2019. been consistently applied in the
Demand of energy efficient products with preparation of financial statements and
improved esthetics is latest market trend. accounting estimates are based on
Company for market competitiveness reasonable and prudent judgment.
spends a lot on required modifications in • International accounting standards, as
manufacturing line. Further, Company is applicable in Pakistan, have been
widening its product range on continues followed in preparation of financial
market demand. Both of the steps relate to statements and any departure there from
improved profitability and long term has been adequately disclosed.
business sustainability. In this way company • The system of internal control is sound in
safeguards the stake holders interest i.e. design and has been effectively
security of Investment and Payout. implemented and monitored.
DIVIDEND AND APPROPRIATIONS • There are no significant doubts upon the
Company's ability to continue as a going
In view of the financial results for 2019, the concern.
Board of Directors did not proposed any
dividend for the year 2019. • There has been no material departure
from the best practices of corporate
governance, as detailed in the listing
CORPORATE SOCIAL RESPONSIBILITY
regulations.
At PEL we pride ourselves in aligning our • Key operating and financial data for last
business strategy to meet societal needs. six (6) years in summarized form is given
We believe in giving something back to the on page E-16.
society because we care. For us it’s about
• The Company has been declaring regular
more than just aligning our activities with
dividends to its shareholders for the past
our stakeholder’s expectations whether it’s
our clients, suppliers, the community, our three years, however, in view of the
employees and society as a whole. Through financial results for 2019, the Board of
a broad range of community initiatives, Directors do not propose any dividend
charitable giving, foundation grants and for the year 2019.
volunteerism, we seek to create more value • There is nothing outstanding against the
for our society to continue to bring joy in Company on account of taxes, duties,
people’s lives. levies and charges except for those which
are being made in normal course of
TRADING IN SHARES BY DIRECTORS business.
AND EXECUTIVES
• The Company maintains Provident Fund
Details of trading conducted by directors, accounts for its employees. The values of
executives, their spouses and minor children the investments of the fund as on
in the shares of PEL during the year is given December 31, 2019 are given on page A-
on page E-38. 30.
BOARD OF DIRECTORS • The Board of Directors of Pak Elektron

Limited ['PEL'] and PEL Marketing
The composition of the Board of Directors, (Private) Limited ['PMPL'] in their
and their profile and attendance at meetings respective meetings held on March 27,
is give on page D-04.
2020 have approved the scheme of
arrangement for amalgamation of PMPL,
REVIEW OF RELATED PARTY a wholly owned subsidiary of PEL, with
TRANSACTIONS and into PEL with effect from April 30,
Details of all related party transactions are 2020. The amalgamation is pending
placed before the Audit Committee and apporval by the Securities and Exchange
upon recommendations of the Audit Commission of Pakistan.
Committee, the same are placed before the APPOINTMENT OF AUDITORS
Board for review and approval in
accordance with requirements of the Code Rahman Sarfaraz Rahim Iqbal Rafiq,
of Corporate Governance. Chartered Accountants, have completed the
annual audit of PEL for the year ended
INTERNAL FINANCIAL CONTROLS December 31, 2019 and have issued an
unmodified report. They will retire at the
A system of sound internal control conclusion of the forthcoming AGM, and
established and implemented at all levels of being eligible, have offered themselves for
the Company of the Board of Directors. The reappointment for the year ending
system of internal control is sound in design December 31, 2020. The Board of Directors
for ensuring achievement of Company’s on the suggestion of the Audit Committee
objectives and operational effectiveness and has recommended their re-appointment as
efficiency, reliable financial reporting and auditors of the PEL for the year ending
compliance with laws, regulations and December 31, 2020 at a fee to be mutually
policies. agreed.
SUBSEQUENT EVENTS FUTURE OUTLOOK

• COVID-19 started at the end of A detail Forward Looking Statement is give
December 19 and broke out in China in on page F-02.
January 2020. The material imports from
China remain suspended due to lock
ACKNOWLEDGMENT
down, Financial impact and materiality of
which is not quantifiable at present. We take this opportunity to thank all our
Further, the financial impact of local slow stakeholders for their patronage and look
down started from February 2020 and a forward to their continued support.
lock down in March is in progress and is
also not worked out yet. However, we
have sufficient production capacity to M. Murad Saigol
cope with supply shortfall in the balance Chief Executive Officer
period.
• Prime Minister announced a package of Lahore
Rs. 1,250 billion for general public and May 02, 2020
industries to mitigate the COVID-19
miseries. The State Bank of Pakistan
announced reduction of Policy Rate to 9%
along with the deferral of due principal
repayment for a period of up to one year,
however the borrowers will have to pay
markup as per agreed terms.
2018 2019 žÜ» ò
38,990 37,621 ãæW¦ù

6,997 6,573
3,663 3,364 «o
2,103 2,480
1,557 881 «oLi ZI
1,371 879 «oLi Zˆ
2.67 1.68 9zgX ãæW¥°
F
OUTLOOK
F 02 Pak Elektron Limited
FORWARD LOOKING STATEMENT

With the advent of COVID 19 initially in qualitative long term growth leading to
China and later to Globe including Pakistan , significant creation of value for all its
the economic stability across the world and stakeholders. In this regard, the Company
in Pakistan is looking vulnerable and is believes that principles of global best
dependent on huge stimulus. The practices will continue to provide a firm
Government capability is limited to cope up premise for its future endeavors.
with this humungous challenge. Moving
Viable energy solutions, improvement in
ahead, it is vital that the Government
Human Index Level, channelizing youth
continues to address underlying structural
potential and improvement in governance
vulnerabilities and put the economy on a
level are the measures to meet the
balanced and sustainable path. The global
challenges of growing population which is
support from the donor agencies and might
expected to double by 2050. Cost
help mitigating the challenges that will
competitiveness is right now major
surface as a result of uncertainity that exist in
challenge to local Industry, can be met
the times to come. The year 2020 will be a
through joint ventures & technical
very challenging year or years. This suggests
collaborations.
that current agenda needs to be reinforced
with deep rooted structural reforms. Recent China Pak Economic Corridor (CPEC) has
stagnancy in agricultural sector and decline emerged with tangible existence on the
in industrial output makes it pertinent to canvas. Most of the Energy Projects are
highlight the urgent need for supportive functional, and there is no electricity load
policies. Expansion of projects under CPEC shedding. Most of the developments of
and cooperation in the agriculture, industrial road infrastructure are completed or near to
and socio-economic sectors will be competition, while modalities of railway line
instrumental. project ML-I are under discussion. These all
developments will promote local industry
The current account balance recorded a
and Foreign Direct Investment (FDI). Six
surplus in October 2019 after a gap of four
Special Economic Zones -SEZ have been
years, a clear indication of receding
notified out of 46 SEZs proposed under
pressures on the country's external
CPEC arrangements and infrastructure
accounts. The rupee has strengthened its
development is almost complete.
position against US$ in the last seven
months, from trading at PKR 164 in June COMPANY PERFORMANCE AGAINST
2019 to the current rate of PKR 155. Foreign LAST YEAR PROJECTION
remittances have shown a healthy trend and
the government is confident that measures For the Year 2019 company budgeted
taken are likely to achieve the target of US$ revenue of Rs. 39,964 at 2.5% growth over
24 billion, set for the current fiscal year year 2018. Due to slow ordering by WAPDA
ending June 2020. distribution companies and shrink of
disposable income, the Company achieved
The exchange rate stability seen so far is revenue of Rs. 37,621 million at 3.51%
mainly the result of a massive reduction in below the budgeted number. Production
the import bill. However, squeezed imports cost increased due Rupee depreciation by
have downside effects on both government 11.32%, which could not be passed on to
revenues and industrial growth. customers in full due slow economic
Government needs to take measures to environment. Lower volume and cost
provide impetus to economic activity in increase resulted in lower gross profit of Rs.
order to increase the aggregate demand. 6,573 million against budgeted amount of
While the macroeconomic scenario paints a Rs. 6,900 million. Net profits also reduced to
picture of cautious optimism, the Company Rs. 851 million against budgeted profit of
is confident and aspires to continue its Rs. 1,180 million due increase in finance cost
journey with its sights set on sustained & along with the factors explained earlier.
Annual Report 2019 F 03
The Company is
confident and aspires to
continue its journey with
its sights set on
sustained & qualitative
long term growth
leading to significant
creation of value for all
its stakeholders.
FINANCIAL PROJECTIONS SOURCES OF INFORMATION AND

Company foresees a moderate revenue
ASSUMPTIONS
growth in future years keeping in view Revenue planning of existing products is
current economic indicators. Growing based on market feedback through
country population, rapid urbanization and countrywide sales net work, independent
required T&D infrastructure augmentation market survey and latest consumer trends.
are among major growth assumptions.
For new product launching market
Rs. in millions 2020 2021 2022 research, market surveys and sales
network feedback is based. If required,
Revenue 39,000 40,000 42,000
consultants are engaged for project
STATUS OF PROJECTS feasibilities. Before formal submission of
feasibilities underlying assumptions are
During the year, the Company completed discussed at length. The feasibility is then
the installation of Washing Machine presented to board for formal approval.
manufacturing facility and started its Board after thorough discussion of its
commercial production after successful trial financial viability by paying special
run. The Company is also setting up a Power attention realistic payback period
Transformer manufacturing facility at 34 KM, approves the feasibility report.
Ferozepur Road Lahore, which will be
completed in ensuing year. Besides these
developments, a continuous Plant BMR is
made to ensure improved quality
production.
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G
Stakeholders
Relationship and
Engagement
G 02 Pak Elektron Limited
STAKEHOLDERS RELATIONSHIP AND ENGAGEMENT
STAKEHOLDERS ENGAGEMENT PROCESS

The development of sustained stakeholder relationships is paramount to the performance of
any company. From short term assessments to longer term strategic relationship building,
'Stakeholders' Engagement' lies at the core of our business practices to promote improved
risk management, compliance with regulatory and lender requirements in addition to overall
growth of the Company.
The frequency of engagements is based on business and corporate requirements as
specified by the Code of Corporate Governance, contractual obligations or on requirements
basis.
The following table elaborates on the mode of engagement in addition to the impact of each
of the following stakeholders on Company's operations.
Annual Report 2019 G 03
Stakeholders Management of Stakeholders’ Engagement Effect and value to PEL

Institutional We recognize the trust our investors put in us and The providers of capital allow
Investors acknowledge it by providing a steady return on their PEL the means to achieve its
/Shareholders investments. vision
Customers & We recognize the importance of customer relationship Our success and performance
Suppliers management and have made significant investments in depends upon the loyalty of
this regard over the years going beyond extending our customers with the PEL
credit facilities and trade discounts. We also brand and effective supply
acknowledge that engaging reputed and dependable chain management
suppliers as business partners for supply of raw material,
industrial inputs, machinery and equipment is the key to
our continuous and sustainable growth.
Banks and other Banks and other providers of debt finances are one of Dealing with banks and other
lenders the key stakeholders who are engaged by us on a providers of debt finances is
regular basis for the purpose of short term and long key to our performance in
term financing. terms of access to cheaper
loans, minimal fee, higher
level of customer service, and
future planning.
Media Different communication mediums are used on need By keeping the media
basis to apprise the general public about new informed of the
developments, activities and products of the Company developments and activities
of PEL, more awareness of the
Company is developed along
with awareness of the
Company's products offered.
Regulators We pride ourselves in being a responsible corporate Laws and regulations, and
citizen and abide by the laws and regulations of other factors controlled by
Pakistan. the Government affect PEL
and its activities.
Analysts In order to attract potential investors, the Company Providing all the required
regularly engages with analysts on details of projects information to analysts helps
already disclosed to the regulators, with due regard to in clarifying any
regulatory restrictions imposed on inside information / misconception/rumour in the
trading, to avoid any negative impact on the Company's market
reputation or share price.
Employees Our commitment to our most valued resource, our Our employees represent us
human capital, is at the core of our HR strategy. PEL in in the industry and
provides a nurturing and employee friendly environment community, and are at the
to its employees. heart of our organization,
implementing every strategic
and operational decision of
the management.
Local community PEL regularly engages with general public at large The people of our country
and general public through its CSR initiates. This engagement helps us to provide the grounds for us to
identify required interventions in the field of education, build our future.
health and uplift of the society.
STAKEHOLDERS RELATIONSHIP AND ENGAGEMENT
INVESTORS' SECTION ON PEL WEBSITE

Detailed Company information regarding financial highlights, investor information, share
pattern/value and other requisite information specified under the relevant regulations, has
been placed on the corporate website of the Company, www.pel.com.pk, which is updated
on regular basis.
ISSUES RAISED AT LAST AGM

No issues were raised at the last AGM held on April 26, 2019.
ANALYST BRIEFINGS
The Company held one analyst briefing during the year 2019 and the Company, also plans to
hold such briefings in future to share business updates that are relevant to the analysts
coverage areas.
MINORITY SHAREHOLDERS
The minority shareholders of the Company are encouraged to attend general meetings of the
Company. A statement by the order of the Board is annexed to the notice of general
meetings in this regard.
“Engaging with stakeholders is

crucial to PEL's success of any
organization. Effective engagement
helps us translate stakeholder needs
into organizational goals and creates
the basis of effective strategy
development.”
STATEMENT OF VALUE ADDITION

2019 2018
Rs. '000 %age Rs. '000 %age
Wealth Generated
Contract Revenue 1,365,601 4.27% 2,899,882 9.01%
Sale of Goods 30,570,269 95.62% 29,255,895 90.93%
Other income 33,887 0.11% 17,977 0.06%
Total Wealth Generated 31,969,757 100.00% 32,173,754 100.00%
Wealth Distributed
Cost of sales 19,084,962 59.70% 19,443,171 60.43%
Employees remuneration and benefites 2,458,437 7.69% 2,248,596 6.99%
Operating expenses 2,006,935 6.28% 2,190,987 6.81%
Depreciation and Amortization 985,476 3.08% 851,104 2.65%
Finance cost 2,478,572 7.75% 2,098,403 6.52%
Finance cost 2,806 0.01% 2,456 0.01%
Donations 4,655 0.01% 7,674 0.02%
Government levies 4,069,321 12.73% 3,959,894 12.31%
Dividends to shareholders - 0.00% 597,218 1.86%
Retained in business 878,593 2.75% 774,251 2.41%
Total Wealth Distributed 31,969,757 100.00% 32,173,754 100.00%
2.75%
12.73%
0.01% Cost of sales
0.01%
Retained in business
7.75%
Government levies
3.08%
2019
Donations
Share of loss of associate
6.28%
59.70%
Finance cost
Depreciation and Amortization
7.69% Operating expenses
Employees remuneration and benefites
1.86% 2.41%
12.31%
0.01% Cost of sales
0.02%
Retained in business
6.52%
Government levies
2.65% Donations
2018
Share of loss of associate

6.81% Finance cost
Depreciation and Amortization
60.43%
Operating expenses
6.99%
Employees remuneration and benefites
INVESTOR RELATIONS
REGISTERED OFFICE BOOK CLOSURE DATES GENERAL MEETINGS &
VOTING RIGHTS
17-Aziz Avenue, Canal Bank, Share Transfer Books of the
Gulberg-V, Lahore. Company will remain closed Pursuant to section 132 of the
Tel: 042-35718274-6 from May 23, 2020 to May 29, Companies Act, 2017) PEL
Fax: 042-35762707 2020 (both days inclusive). holds a General Meeting of
shareholders at least once a
SHARE REGISTRAR DIVIDEND REMITTANCE year. Every shareholder has a
right to attend the General
Corplink (Pvt) Limited Ordinary dividend declared Meeting. The notice of such
Wings Arcade, 1-K Commercial and approved at the Annual meeting is sent to all the
Model Town, Lahore. General Meeting will be paid shareholders at least 21 days
Tel: 042-35839182, 35887262 within the statutory time limit of before the meeting and also
Fax: 042-35869037 30 days. advertised in at least one
(i) For shares held in physical English and one Urdu
LISTING ON STOCK form: to shareholders newspaper having circulation
EXCHANGES whose names appear in the in Karachi, Lahore and
Register of Members of the Islamabad.
Ordinary shares of Pak Elektron
Company after entertaining Shareholders having holding of
Limited are listed on Pakistan
all requests for transfer of at least 10% of voting rights
Stock Exchange Limited.
shares lodged with the may also apply to the Board of
Company on or before the Directors to call for meeting of
STOCK CODE / SYMBOL
book closure date. shareholders, and if the Board
The stock code / symbol for (ii) For shares held in does not take action on such
trading in ordinary shares of electronic from: to application within 21 days, the
Pak Elektron Limited at Pakistan shareholders whose names shareholders may themselves
Stock Exchange Limited is appear in the statement of call the meeting.
PAEL. beneficial ownership All ordinary shares issued by
furnished by CDC as at end the Company carry equal
STATUTORY COMPLIANCE of business on book voting rights, Generally,
During the year, the Company closure date. matters at the general
has complied with all WITHHOLDING OF TAX & meetings are decided by a
applicable provisions, filed all ZAKAT ON ORDINARY show of hands in the first
returns/forms and furnished all DIVIDEND instance. Voting by show of
the relevant particulars as hands operates on the
required under the Companies As per the provisions of the principle of “One Member-One
Act, 2017 and allied rules, the Income Tax Ordinance, 2001, Vote”. If majority of
Securities and Exchange income tax is deductible at shareholders raise their hands
Commission of Pakistan source by the Company at the in favor of a particular
Regulations and the listing applicable rates. resolution, it is taken as passed,
requirements. Zakat is also deductible at unless a poll is demanded.
source form the ordinary Since the fundamental voting
DIVIDEND dividend at the rate of 2.5% of principle in the Company is
in view of the financial results the face value of the share, “One Share-One Vote”, voting
for 2019, the Board of Directors other than corporate holders or takes place by a poll, if
did not proposed any dividend individuals who have provided demanded. On a poll being
for the year 2019. an undertaking for non- taken, the decision arrived by
deduction. poll is final, overruling any
decision taken on a show of
ANNUAL GENERAL MEETING DIVIDEND PAYMENTS
hands.
The 64th Annual General Cash dividends are paid
through electronic mode INVESTOR’S GRIEVANCES
Meeting of Shareholders of Pak
Elektron Limited will be held on directly in to the bank account To date none of the investors or
Friday, May 29, 2020 at 11:00 designated by the entitled shareholders has filed any
A.M. at 06-Egerton Road, shareholders whose names significant complaint against any
Opposite LDA Plaza, Lahore. appear in the Register of service provided by the
Shareholders at the date of Company to its shareholders.
book closure.
PROXIES
Pursuant to section 137 of the Companies Act, 2017 and according to the Memorandum and Articles of
Association of the Company, every shareholder of the Company who is entitled to attend and vote at a
general meeting of the Company can appoint another member as his/her proxy to attend and vote instead
of him/her. Every notice calling a general meeting of the Company contains a statement that a shareholder
entitled to appoint a proxy. The instrument appointing a proxy (duly signed by the shareholder appointing
that proxy) should be deposited at the office of the Company not less than forty-eight hours before the
meeting.
SERVICE STANDARDS
Listed below are various investor services and the maximum time limits set for their execution:
For requests received For requests received

through post over the counter
Transfer and transmission of shares 30 days after receipt 30 days after receipt
Issue of duplicate share certificates 30 days after receipt 30 days after receipt
Issue of duplicate dividend warrants 5 days after receipt 5 days after receipt
Issue of revalidated dividend warrants 5 days after receipt 5 days after receipt
Change of address 2 days after receipt 1 day after receipt
Well qualified personnel of the Shares Registrar have been entrusted with the responsibility of ensuring that
services are rendered within the set time limits.
WEB PRESENCE
Updated information regarding the Company can be accessed at its website, www.pel.com.pk The website
contains the latest financial results of the Company together with the Company’s profile.
Fundamental knowledge
and understanding of
financial market is crucial
for the general public
and lack of financial
literacy or capability
makes them vulnerable
to frauds. SECP
recognizes the
importance of investor
education and therefore
initiated this investor
education program,
called 'JamaPunji', an
investor training
program, to promote
financial literacy in
Pakistan.
www.jamapunji.pk
GLOSSARY OF TERMS AND DEFINITIONS

GLOSSARY OF TERMS
Term Description
CCG Code of Corporate Governance

CEO Chief Executive Officer
CFO Chief Financial Officer
CPEC China Pakistan Economic Corridor
CPI Consumer Price Index
CSR Corporate Social Responsibility
DISCOs Distribution Companies
DTR Distribution Transformer
EPC Engineering, Procurement and Construction
EPS Earnings per share
HV High Voltage
IFRS International Financial Reporting Standards
ISO International Standards Organization
KV Kilovolt
MNCs Multi National Companies
MVA Mega Volt Amp
PSX Pakistan Stock Exchange
PTR Power Transformer
WAPDA Water and Power Development Authority
WPPF Workers' Profit Participation Fund
WWF Workers' Welfare Fund
DEFINITIONS
Term Definition
Activity/Turnover Ratios Activity / Turnover ratios are used to evaluate the

operational efficiency of the Company to convert
inventory and receivables into cash against time taken
to pay creditors, measured in terms of revenue and cost
of sales.
DEFINITIONS
Term Definition
Approved Accounting Standards Approved accounting standards comprise of such IFRSS
issued by the International Accounting Standards Board
as notified under the provisions of the Companies
Ordinance, 1984, provisions of and directives issued
under the Companies Ordinance, 1984.
Capital Structure Ratios Capital Structure ratios provide an indication of the long
term solvency of the Company and its cost of debt, in
relation to equity and profits.
Gearing The level of a company’s debt related to its equity

capital. It is a measure of a company’s financial leverage
and shows the extent to which its operations are funded
by lenders versus shareholders.
Going Concern Assumption An accounting assumption that an entity will remain in

business for the foreseeable future.
Investment Market Ratios Investment ratios measure the capability of the

Company to earn an adequate return for its
shareholders. Market Ratios evaluate the current market
price of a share versus an indicator of the company’s
ability to generate profits.
Liquidity Ratios Liquidity ratios determine the Company’s ability to meet

its short-term financial obligations.
Management Letter Letter written by auditors to directors of the company,

communicating material issues, concerns and
suggestions noted during the audit.
Market Capitalization The value of a company that is traded on the stock

market, calculated by multiplying the total number of
shares by the present share price.
Materiality Financial statement items are material if they could

influence the economic decisions of users.
Profitability Ratios Profitability Ratios give and assessment of the

Company’s ability to generate profits in relation to its
sales, assets and equity.
H
CORPORATE SOCIAL
RESPONSIBILITY AND
SUSTAINABILITY
H 02 Pak Elektron Limited

AND SUSTAINABILITY
At PEL we pride ourselves in aligning our business strategy to meet
societal needs. We believe in giving something back to the society
because we care. For us it’s about more than just aligning our activities
with our stakeholde-r’s expectations whether it’s our clients, suppliers, the
community, our employees and society as a whole. We work hard to
minimize environmental impact to maximize social development.
Annual Report 2019 H 03
Our appliances and power division has opened doors to improving lives
through innovation, sustainability and adaptability. Through a broad
range of community initiatives, charitable giving, foundation grants and
volunteerism, we seek to create more value for our society to continue to
bring joy in people’s lives.
In order to keep up with

the expectations of the
society, “PEL Cares”. We
have a vast history of
contributing for the social
causes which help us
become a good corporate
citizen.

AND SUSTAINABILITY
CSR INITIATIVES
HEALTH
Every year PEL profoundly contributes for the
betterment of patients in different Hospitals. One
the largest health care center in Pakistan is Lahore
General Hospitals where thousands of non-
affording patients are being treated on daily basis
by the support of profound donors. Jinnah
ensures the most judicious use of donor’s funds.
Considering this fact, PEL made its contribution
by donating a handsome amount to support
underprivileged patients. PEL is also supporting
other charitable organizations and funding them
to promote their campaigns.
EID CHARITY DRIVE

According to the World Health Organization
(WHO), Pakistan ranks at 122 out of 190 countries
in terms of health care standards. There have
been many inter-ventions made in health care but
due to the poor standards of education, there is a
lack of doctors and health experts all over which
does not create a conducive atmosphere for
hospitals to thrive in.
Amongst all those who suffer children are the
ones who are affected the most. Children face
multiple obstacles, including birth injuries and
infectious diseases. Millions of children suffer
from short- and long-term adverse consequences
of illnesses, malnutrition and injuries that impact
their well-being and options in life, including
fewer educational opportunities and diminished
future economic prospects.
This year too, we conducted a charity drive
requesting employees to come forward and
donate for this cause. We collected substantial
amount of money and went to various children
wards in government hospitals to distribute Eidi
and give away goodie bags.
It takes a strong
awareness to succeed
in making Corporate
Social Responsibility a
daily habit.
“Giving is not just about

making a donation, but it is
about making a difference.”
NUST NEED BLIND PROGRAM

In an effort to build an intelligent future of
beloved Pakistan, PEL always seeks
opportunities to take a step-forward in
contribute for social good. This year, PEL
gave for the higher education
undergraduate engineering students at
NUST. PEL believes that paying for this kind
of CSR brings good for the society as a
whole. The students who will avail this
scholarship will at first benefit from our
part and later on they will start playing
their role. The graduates of a prestigious
institution like NUST will surely throw in a
great deal towards the engineering sector
of country. This is also excellent because
the one, who is taken care of, is most likely
to take care of others when he gets to this
kind of position.
SOS CHILDREN'S VILLAGE

MUZAFFARABAD
The orphan children of our society are
enormously neglected. PEL recognizes the
problem and always contributes keenly so
that these children who are the future of
Pakistan can be calmed. This year too, PEL
donated appliances to SOS Children's
Village Muzaffarabad. PEL aims to build a
society where less-privileged people don't
find themselves deprived of such
necessities of life.
NATIONAL CAUSE DONATIONS

PEL makes generous donations for national
cause on a regular basis.

AND SUSTAINABILITY
SUSTAINABILITY HIGHLIGHTS
The highlights of the Company’s installation of refrigerator like water
performance, policies, initiatives and plans dispensers that provided cool and clean
in place relating to various aspects of drinking water to the underprivileged
sustainability are as follows: community of Lahore. These water
dispensers were placed in parks where
ECONOMIC people rest under the cool shade of the
The Company is cognizant of both private tree, at railway stations, near government
and social economic impact on its hospitals and in marketplaces where
stakeholders and includes: most people travel back and forth by
foot.
a.) Economic Performance
A noble and encouraging initiative, “Pel
PEL is committed to providing persistent Se Zindagi” not only involved in
growth and steady value for all its spreading awareness about the
stakeholders. This growth and value can importance of clean water but also
be quantified and evaluated accurately instilled a desire among people to
through the audited financial statements perform their own acts of kindness.
of the Company and the statement of People were inspired to take a step
value addition and its distribution (which forward towards making a difference.
is reported on page G-05). They were encouraged to post their
b.) Market Presence stories or accounts of their good deeds
in order build a united community based
PEL not only provides employment but on charity.
also various business opportunities in
the market. The Company encourages b.) Energy Conservation
hiring staff members at all levels from PEL recognizes the importance of
local community. The Company also efficient use of limited energy resources
ensures that business opportunities are and responsible use of energy resources
first made available to local transporters, remains a priority at PEL.
contractors and vendors.
PEL has also developed an Energy
c.) Indirect Economic Impact Information System to help identity
Growth and development of the energy losses at PEL's production units
Company contributes towards the and those associated with PEL's
growth of our beloved country Pakistan. products. The system helps addressing
Wherever possible, the Company abnormalities in the system and enables
contributes towards development of PEL to defined benchmarks for energy
infrastructure and other facilities of the consumption per product thereby
country in general and of our premises improving energy consumption at PEL's
vicinity in particular. production units.
c.) Mitigating the Adverse Impact of
ENVIRONMENTAL Industrial Effluents
The highlights of the Company’s There are no industrial effluents at PEL's
performance, policies, initiatives and plans plants that might adversely impact the
in place relating to certain aspects of this environment.
dimension of sustainability are as follows:
a.) Clean Drinking Water SOCIAL
PEL launched “Pel Se Zindagi”, an on The Company has significant impact on the
ground activation that resulted in the social systems in which its operates. The
highlights of the Company’s performance,
policies, initiatives and plans in place career growth and development without
relating to certain aspects of this dimension discrimination.
of sustainability are as follows:
e.) Consumer Protection Measures
a.) Industrial Relations
The requirement for protection of
PEL recognizes importance of good and consumer rights and interests is greatly
positive relations with its employees valued at PEL. For this, an effective
and has put in place an effective system system has been put in place to ensure
to ensure that a mutual beneficial the consumer interests are
relationship is maintained. Salient safeguarded.
features of this system include
providing conducing working Our extensive dealer network ensures
environment, appropriate pay that our products are available
packages, rewards for performance with throughout the country. Well trained
discrimination and special incentives for officers employed at established and
maintenance of industrial peace. strategically located regional offices
handle customers complaints and
simultaneously provide guidance to
b.) Community Investment & Welfare consumers. Customers are provided
Keeping in perspective the need for business related information regularly
motivational packages, PEL has so that they remain abreast with latest
introduced an innovative form of products. Regular customer satisfaction
compensation to its employees. On an surveys are conducted to gain customer
annual basis, Lucky Draw is held for all feedback.
the employees of PEL who have been
with the company for a minimum f.) Occupational Health and Safety
duration of five years.
Employee safety is an integral part of
Ten lucky individuals are selected to PEL’s agenda. PEL heavily relies on
perform the noble cause of Hajj and Quality and Safety policy, strict and
their entire expenses in this regard are stringent safety policies have been put
borne by PEL. in place for workers to avoid the risk of
an accident and ensure maximum safety
c.) Product Quality Assurance of employees. PEL over the year has
implemented initiatives to promote
PEL continues to be a quality conscious awareness, training and communication
manufacturer with quality checks at targeting all employees. 46 technical
incoming, in-process and final stages. and non technical trainings were
The Company has implemented an conducted companywide for workers.
extensive and effective quality Three water filtration plants are installed
assurance system for its products, as in the company in compliance with
detailed on page E-32. World Health Organization (WHO) &
National Environmental Quality
d.) Employment of Special Persons Standards to provide clean drinking
PEL considers it a social and moral water to its employees.
responsibility to accommodate special
persons and ensure that there are g.) Rural Development Programs
ample opportunities for their hiring PEL has undertaken establishing a girls'
and retention. school near Luliani in coordination with
Special efforts are made for training and a charitable trust by the name of Care
development of special persons to Foundation. This will be followed by
enable them to compete with others establishing more schools in other rural
and to provide equal incentives for areas of the country.

AND SUSTAINABILITY
h.) Business Ethics and Anti-corruption k.) Forced or Compulsory Labor
Measures
PEL does not engage in forced or
PEL's Legal & Compliance Department compulsory work practices and
organized a Code of Conduct briefing maintains a free working environment.
session for its employees. An awareness PEL strongly discourage practices of
drive was set up for employees to modern slavery where labour/workers
comply with all applicable laws, were forced to work overtime or
regulations and corporate ethical working extra hours without pay by use
standards, while interacting with third of violence, threats or coercion.
parties. A seminar was conducted on
Value-Driven Workplace Environment”, l.) Grievance Mechanism
where panelist from Pakistan top
industries were called in to share their The Company is committed to provide
thoughts on importance of Code of every opportunity to every employee for
Conduct and Value Driven Workplace re-dress of any valid grievances arising
Environment. PEL top management from work related matters. The
including General Managers and management does not discriminate
department head participated in against any employee who elects to use
seminar. The primary goal was to the grievance procedure. The purpose
increase the participants' understanding of this policy is to encourage healthy
of the company's Code of Conduct and relationship between employees in
doing ethical business by creating a order to ensure smooth running of the
value-based working environment. business.
i.) Equal Opportunity and Non-

Discrimination
PEL takes pride in being an equal
opportunity employer. The Company
aims to create a working environment in
which every individual is able to
effectively and efficiently use their skills
and abilities, free from discrimination or
harassment, and in which all decisions,
rewards and/or promotions are
objectively based on merit. We do not
tolerate any form of discrimination,
harassment or bullying at the workplace.
j.) Child Labor

The Company strictly adheres to a
prohibition policy on any form of child
labor. No child has ever been employed
by the Company and the same policy
shall continue in future.
I
CONSOLIDATED
FINANCIAL
STATEMENTS
Annual Report 2019 I 03

72-A, Faisal Town,

T: +92 42 35160430 - 32
F: +92 42 35160433
E: lahore@rsrir.com
W: www.rsrir.com
INDEPENDENT AUDITOR’S REPORT

Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the annexed consolidated financial statements of PAK ELEKTRON LIMITED and its
subsidiary ['the Group'], which comprise the consolidated statement of financial position as at December
31, 2019, the consolidated statement of profit or loss, the consolidated statement of comprehensive
income, the consolidated statement of changes in equity, the consolidated statement of cash flows for the
year then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies and other explanatory information.
In our opinion, consolidated financial statements give a true and fair view of the consolidated financial
position of the Group as at December 31, 2019, and of its consolidated financial performance and its
consolidated cash flows for the year then ended in accordance with the accounting and reporting
standards as applicable in Pakistan.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing ['ISAs'] as applicable in
Pakistan. Our responsibilities under those standards are further described in the Auditor's Responsibilities
for the Audit of the Consolidated Financial Statements section of our report. We are independent of the
Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for
Professional Accountants as adopted by the Institute of Chartered Accountants of Pakistan ['the Code']
and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Key audit matter How our audit addressed the matter
1. First time adoption of IFRS 9 – Financial

Instruments
As referred to in note 3.1 to the consolidated Our key procedures to review the application of
financial statements, the Group has adopted IFRS 9 included, amongst others, review of the
IFRS 9 - 'Financial Instruments'. The new methodology developed and applied by the
standard requires the Group to make Group to estimate the ECL in relation to financial
allowance for impairment of financial assets assets. We also considered and evaluated the
using Expected Credit Loss ['ECL'] approach assumptions used in applying the ECL
as against the Incurred Loss Model methodology based on historical information and
previously applied by the Group. qualitative factors as relevant for such estimates.
Determination of ECL for financial assets Further, we assessed the integrity and quality of
requires significant judgment and the data used for ECL computation based on the
assumptions including consideration of accounting records and information system of the
I 04 Pak Elektron Limited
factors such as historical credit loss Group as well as the related external sources as
experience and forward-looking macro- used for this purpose.
economic information.
We checked the mathematical accuracy of the
We have considered the first time ECL model by performing recalculation on test
application of IFRS 9 requirements as a key basis.
audit matter due to significance of the
In addition to above, we assessed the adequacy
change in accounting methodology and
of disclosures in the consolidated financial
involvement of estimates and judgments in
statements of the Group regarding application of
this regard.
IFRS 9 as per the requirements of the above
standard.
2. First time adoption of IFRS 15 – Revenue

from Contracts with Customers
financial statements, the Group has adopted IFRS 15 included, amongst others, review of
IFRS 15 – 'Revenue from Contracts with managements' impact assessment of all contracts
Customers'. IFRS 15 introduces a new five with customers in light of application of the new
step model for recognition of revenue which standard, review of contracts to determine
is primarily based on the transfer of control whether performance obligations have been
to the customers along with detailed identified, classified and accounted for
presentation and disclosure about contracts separately, whether allocation of transaction price
with customers, information about between each performance obligation is
disaggregation of revenue, performance appropriate and whether the revenue has been
obligations, contract assets and contract recognized at a point in time or over a period of
liabilities. time appropriately.
We have considered the first time
application of IFRS 15 as a key audit matter
due to significance of the change in
accounting methodology, involvement of
significant estimates and judgments
resulting in adjustments, presentation and
incremental quantitative and qualitative
disclosures.
3. First time adoption of IFRS 16 – Leases

financial statements, the Group has adopted IFRS 16 included, amongst others, review of
IFRS 16 – 'Leases'. IFRS 16 sets out the managements' impact assessment of all lease
principles for the recognition, measurement, arrangements in light of application of the new
presentation and disclosure of leases and standard, review of lease contracts to determine
requires lessees to account for all leases whether the same are in scope of IFRS 16 and are
under a single on-balance sheet model with also subject to recognition exemption under IFRS
corresponding recognition of right-of-use 16 for short-term and low value leases. We also
asset. Lessor accounting under IFRS 16 is reviewed contracts to determine whether it is a
substantially unchanged from accounting lease contract, and if so its various components,
under IAS 17 'Leases' i.e. operating and lease term, rental amount, payment terms, etc.,
finance leases. For lessees all leases will be reviewed the appropriateness of discount rate
classified as finance leases only with the used by the Group to determine the present
exception of certain short-term leases. value of lease liability and calculation of related
depreciation and finance charge.

disclosures.
4. Inventory valuation
Stock in trade amounts to Rs 7,793 million as To address the valuation of stock in trade, we
at the reporting date. The valuation of stock assessed historical costs recorded in the
in trade at cost has different components, inventory valuation; testing on a sample basis
which includes judgment in relation to the with purchase invoices. We tested the
allocation of labour and overheads which reasonability of assumptions applied by the
are incurred in bringing the stock to its management in allocating direct labour and
present location and condition. Judgment direct overhead costs to inventories.
has also been applied by management in
We also assessed management's determination
determining the Net Realizable Value ['NRV']
of the net realizable value of inventories by
of stock in trade.
performing tests on the sales prices secured by
The estimates and judgments applied by the Group for similar or comparable items of
management are influenced by the amount inventories.
of direct costs incurred historically,
expectations of repeat orders to utilize the
stock in trade, sales contract in hand and
historically realized sales prices.
The significance of the balance coupled with
the judgment involved has resulted in the
valuation of inventories being identified as a
key audit matter
The disclosures in relation to inventories are
included in note 27.
5. Tax contingencies
As disclosed in note 20 to the annexed Our key audit procedures in this area included,
consolidated financial statements, various amongst others, a review of the correspondence
tax matters are pending adjudication at of the Group with the relevant tax authorities and
various levels with the taxation authorities tax advisors including judgments or orders
and other legal forums. Such contingencies passed by the competent authorities.
require the management to make judgments
We also obtained and reviewed confirmations
and estimates in relation to the
from the Group's external tax advisor for their
interpretation of tax laws and regulations
views on the status of each case and an overall
and the recognition and measurement of
opinion on the open tax position of the Group.
any provisions that may be required against
such contingencies. Due to inherent We involved internal tax experts to assess and
uncertainties and the time period such review the management's conclusions on
matters may take to resolve, the contingent tax matters and evaluated whether
management's judgments and estimates in adequate disclosures have been made in note 20
relation to such contingencies may be to the annexed consolidated financial statements.
complex and can significantly impact the
consolidated financial statements. For such

reasons we have considered tax
contingencies as a key audit matter.
Information other than the Consolidated Financial Statements and Auditor's Report Thereon
Management is responsible for the other information. The other information comprises the information
included in the annual report, but does not include the consolidated financial statements and our
auditor's report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Board of Directors for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with the accounting and reporting standards as applicable in Pakistan and the
requirements of Companies Act, 2017(XIX of 2017) and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the Group or
to cease operations, or has no realistic alternative but to do so.
The Board of directors is responsible for overseeing the Group's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs as applicable in Pakistan will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of user taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment
and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may cause the Group to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with the board of directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the board of directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the board of directors, we determine those matters that were of
most significance in the audit of the consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matters
As referred to in note 2.6, the annexed consolidated financial statements were amended by the
management to disclose a non-adjusting event occurring after the reporting period. We have, earlier,
issued an auditor's report, dated March 27, 2020, on the audit of consolidated financial statements before
the said amendment, wherein we have expressed an unmodified opinion on those consolidated financial
statements. This is an amended auditor's report on the audit of annexed amended consolidated financial
statements. Our audit procedures subsequent to that date were restricted to the subsequent amendment
of the financial statements as described in note 2.6.
The engagement partner on the audit resulting in this independent auditor's report is ZUBAIR IRFAN
MALIK.


Consolidated Statement of Financial Position

as at December 31, 2019
Note 2019 2018

Rupees '000 Rupees '000
SHARE CAPITAL AND RESERVES
Authorized capital 7 6,000,000 6,000,000
Issued, subscribed and paid-up capital 8 5,426,392 5,426,392

Capital reserve 9 4,279,947 4,279,947
Surplus on revaluation of property, plant and equipment 10 6,023,632 6,579,049
Accumulated profit 14,958,172 13,994,307
TOTAL EQUITY 30,688,143 30,279,695
LIABILITIES
NON-CURRENT LIABILITIES
Redeemable capital 11 - -
Long term finances 12 2,162,154 2,646,032
Lease liabilities 13 137,386 59,778
Warranty obligations 14 159,536 -
Deferred taxation 15 3,116,986 3,087,822
Deferred income 16 34,942 36,781
5,611,004 5,830,413
CURRENT LIABILITIES
Trade and other payables 17 1,203,624 922,850
Unclaimed dividend 15,052 18,650
Accrued interest/markup/profit 488,912 390,172
Short term borrowings 18 10,955,490 12,843,848
Current portion of non-current liabilities 19 2,348,957 1,814,311
15,012,035 15,989,831
TOTAL LIABILITIES 20,623,039 21,820,244
CONTINGENCIES AND COMMITMENTS 20
TOTAL EQUITY AND LIABILITIES 51,311,182 52,099,939
The annexed notes from 1 to 60 form an integral part of these financial statements.
M. MURAD SAIGOL M. ZEID YOUSUF SAIGOL

Chief Executive Officer Director
Note 2019 2018

ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 21 22,939,060 21,957,015
Intangible assets 22 306,332 313,352
Long term investments 23 5,763 6,985
Long term deposits 24 360,180 365,957
Long term advances 25 1,230,805 1,109,094
24,842,140 23,752,403
CURRENT ASSETS
Stores, spares and loose tools 26 848,347 859,145
Stock in trade 27 7,793,568 10,786,157
Trade debts 28 9,317,613 9,558,024
Construction work in progress 29 1,697,509 1,535,735
Short term advances 30 1,683,654 1,663,220
Short term deposits and prepayments 31 1,891,598 1,105,179
Other receivables 401,854 360,962
Short term investments 32 21,596 22,071
Advance income tax/Income tax refundable 33 2,299,396 1,985,785
Cash and bank balances 34 513,907 471,258
26,469,042 28,347,536
TOTAL ASSETS 51,311,182 52,099,939
SYED MANZAR HASSAN

Chief Financial Officer
Consolidated Statement of Profit or Loss

For the year ended December 31, 2019
Note 2019 2018

Revenue 35 37,621,269 38,990,247
Sales tax, excise duty and discounts 35 (9,721,351) (10,544,936)

Net revenue 27,899,918 28,445,311
Cost of sales 36 (21,326,893) (21,448,040)

Gross profit 6,573,025 6,997,271
Other income 37 33,887 17,977
Distribution cost 38 (1,956,380) (2,207,445)

Administrative and general expenses 39 (1,229,762) (1,073,652)
Other expenses 40 (56,872) (71,050)
(3,243,014) (3,352,147)
Operating profit 3,363,898 3,663,101
Finance cost 41 (2,480,088) (2,103,343)

883,810 1,559,758
Share of loss of associate 23.1 (2,806) (2,456)

Profit before taxation 881,004 1,557,302
Taxation 42 (2,411) (185,833)

Profit after taxation 878,593 1,371,469
Earnings per share - basic and diluted (Rupees) 43 1.68 2.67
M. MURAD SAIGOL M. ZEID YOUSUF SAIGOL SYED MANZAR HASSAN

Chief Executive Officer Director Chief Financial Officer
Consolidated Statement of Comprehensive Income

Note 2019 2018

Items that may be reclassified subsequently to profit or loss - -
Items that will not be reclassified to profit or loss

Surplus on revaluation of property, plant and
equipment recognised during the year 10 - 3,045,215
Deferred tax adjustment on surplus on revaluation of
property, plant and equipment
- recognised during the year 10 - (672,091)
- attributable to changes in tax rates 10 - 52,268
- attributable to change in proportion of income taxable under final tax regime 10 (26,753) 79,462
(26,753) 2,504,854
Other comprehensive (loss)/income (26,753) 2,504,854
Profit for the year 878,593 1,371,469
Total comprehensive income 851,840 3,876,323

Consolidated Statement of Cash Flows

Note 2019 2018

CASH FLOW FROM OPERATING ACTIVITIES
Cash generated from operations 44 6,204,103 1,100,498
Payments for:
Interest/markup on borrowings - Interest based arrangements (1,851,801) (1,217,343)
Interest/markup/profit on borrowings - Shariah compliant (279,033) (196,675)
Income tax (313,611) (809,596)
Net cash generated from/(used in) operating activities 3,759,658 (1,123,116)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,069,197) (2,369,292)

Purchase of intangible assets (3,802) (8,030)
Proceeds from disposal of property, plant and equipment 168,001 36,288
Net cash used in investing activities (1,904,998) (2,341,034)
CASH FLOW FROM FINANCING ACTIVITIES
Redemption of redeemable capital (101,875) (275,000)

Long term finances obtained 1,780,122 226,013
Repayment of long term finances (1,688,597) (1,542,813)
Proceeds from sale and lease back activities 187,180 109,944
Repayment of leased liabilities (96,885) (92,076)
Net decrease in short term borrowings (1,888,358) 5,616,480
Dividend paid (3,598) (591,334)
Net cash (used in)/generated from financing activities (1,812,011) 3,451,214
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 42,649 (12,936)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 471,258 484,194
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 45 513,907 471,258

Consolidated Statement of Changes in Equity

Revenue
Share capital Capital reserves
reserves
Surplus on
Issued revaluation of
subscribed and Capital property, plant Accumulated Total
Note paid-up capital reserve and equipment profit equity
Rupees '000 Rupees '000 Rupees '000 Rupees '000 Rupees '000
Balance as at January 01, 2018 5,426,392 4,279,947 4,274,019 13,020,232 27,000,590

Comprehensive income
Profit after taxation - - - 1,371,469 1,371,469
Other comprehensive income - - 2,504,854 - 2,504,854
Total comprehensive income - - 2,504,854 1,371,469 3,876,323
Incremental depreciation 10 - - (199,824) 199,824 -
Transaction with owners
Final dividend on ordinary shares
@ Rs. 1.20 per share - - - (597,218) (597,218)
- - - (597,218) (597,218)
Balance as at December 31, 2018 5,426,392 4,279,947 6,579,049 13,994,307 30,279,695

Impact of application of IFRS 15 - - - (443,392) (443,392)
Balance as at January 01, 2019 -
as adjusted 5,426,392 4,279,947 6,579,049 13,550,915 29,836,303
Profit after taxation - - - 878,593 878,593
Other comprehensive loss - - (26,753) - (26,753)
Total comprehensive income - - (26,753) 878,593 851,840
Transaction with owners - - - - -

Notes to the Consolidated Financial Statements

1 LEGAL STATUS AND OPERATIONS
The Group comprises of the following;
Parent Company
Pak Elektron Limited
Subsidiary Company
PEL Marketing (Private) Limited
1.1 Pak Elektron Limited - Parent Company
Pak Elektron Limited ['the Parent Company' or 'PEL'] was incorporated in Pakistan on March 03, 1956 as a Public Limited
Company under the Companies Act, 1913 (now Companies Act, 2017). Registered office of PEL is situated at 17 - Aziz
Avenue, Canal Bank, Gulberg - V, Lahore. The manufacturing facilities of PEL are located at 34 - K.M. Ferozepur road, Keath
village, Lahore and 14 - K.M. Ferozepur Road, Lahore. PEL is currently listed on Pakistan Stock Exchange Limited. 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 and Appliances Division. PEL's activities are as
follows:
Power Division: Manufacturing of transformers, switchgears, energy meters, engineering, procurement and construction
contracting.
Appliances Division: Manufacturing, assembling and distribution of refrigerators, deep freezers, air conditioners, microwave
ovens, LED TVs, washing machines, water dispensers and other home appliances.
1.2 PEL Marketing (Private) Limited - Subsidiary Company
PEL Marketing (Private) Limited ['the Subsidiary Company' or 'PMPL'] was incorporated in Pakistan on August 11, 2011 as a
Private Limited Group under the repealed 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.
2 BASIS OF PREPARATION
2.1 Consolidated financial statements
These financial statements are the consolidated financial statements of the Group comprising Pak Elektron Limited, the
Parent Company and PEL Marketing (Private) Limited, the Subsidiary Company.
A parent is an entity that has one or more subsidiaries.
A subsidiary is an entity in which the Parent Company directly or indirectly controls, beneficially owns or holds more than fifty
percent of the voting securities or otherwise has the power to elect and/or appoint more than fifty percent of its directors. The
existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing
whether the Group controls another entity.
The assets and liabilities of the Subsidiary Company have been consolidated on a line by line basis and the carrying value of
investment is eliminated against the Parent Company’s share in the net assets of the Subsidiary Group.
Inter-Group transactions, balances and unrealized gains/losses on transactions between the Parent and Subsidiary have
been eliminated. Accounting policies of the Subsidiary Company are same as those of the Parent Company to ensure
consistency in accounting treatments of like transactions.
2.2 Statement of compliance
These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in
Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:
- International Financial Reporting Standards ['IFRS'] issued by the International Accounting Standards Board ['IASB'] as
notified under the Companies Act, 2017;
- Islamic Financial Accounting Standards ['IFAS'] issued by Institute of Chartered Accountants of Pakistan as notified
under the Companies Act, 2017; and
- Provisions of and directives issued under the Companies Act, 2017.
Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS and IFAS, the provisions of and
directives issued under the Companies Act, 2017 have been followed.
2.3 Basis of measurement
These consolidated financial statements have been prepared under the historical cost convention except for certain items of
property, plant and equipment at revalued amounts, certain assets at recoverable amounts, monetary assets and liabilities
denominated in foreign currency measured at spot exchange rates and certain financial instruments measured at fair
value/amortized cost. In these financial statements, except for the amounts reflected in the statement of cash flows, all
transactions have been accounted for on accrual basis.
2.4 Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and
associated assumptions and judgments are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the result of which forms the basis of making judgments about carrying values of assets
and liabilities that are not readily apparent from other sources. Subsequently, actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
in the period in which the estimate is revised and in any future periods affected.
2.4.1 Critical accounting judgements
Judgments made by management in the application of accounting and reporting standards that have significant effect on
the financial statements and estimates with a risk of material adjustment in subsequent years are as follows:
(a) Business model assessment (see note 6.26.1)
The Group classifies its financial assets on the basis of the Group's business model for managing the financial assets and
the contractual cash flow characteristics of the financial asset. The Group determines the business model at a level that
reflects how financial assets are managed to achieve a particular business objective. This assessment includes
judgement reflecting all relevant evidence including how the performance of the assets is evaluated and their
performance measured, the risks that affect the performance of the assets and how these are managed.
(b) Satisfaction of performance obligations in construction contracts (see note 6.18.1)
The Group has determined that for construction contracts the customer controls all of the work in progress. This is
because these contracts are customer specific and the Group is entitled to reimbursement of costs incurred to date,
including a reasonable margin, if applicable, in case the contract is terminated by the customer.
2.4.2 Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting date that may
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are as follows:
(a) Calculation of impairment allowance for expected credit losses on financial assets (see note 6.26.1)
The Group recognizes a loss allowance for expected credit losses on financial assets carried at amortized cost on date of
initial recognition. The amount of expected credit losses is updated on each reporting date to reflect the changes in
credit risk since initial recognition of the respective financial asset. Estimating expected credit losses and changes there
in requires taking into account qualitative and quantitative forward looking information. When measuring expected
credit losses on financial assets the Group uses reasonable and supportable forward looking information as well as
historical data to calculate the difference between the contractual cash flows due and those that the Group would
expect to receive, taking into account cash flows from collateral and integral credit enhancements, if any. Probability of
default constitutes a key input in measuring expected credit losses. Probability of default is an estimate of the likelihood
of default over a given time horizon, the calculation of which includes historical data, assumptions and expectations of
future conditions. If the expected credit loss rates on financial assets past due had been 10% higher/lower as at the
reporting date, the loss allowance on financial assets would have been higher/lower by Rs. 61.254 million.
(b) Depreciation method, rates and useful lives of property, plant and equipment (see note 6.1.1)
The Group reassesses useful lives, depreciation method and rates for each item of property, plant and equipment
annually by considering expected pattern of economic benefits that the Group expects to derive from that item.
(c) Amortization method, rates and useful lives of intangible assets (see note 6.2)
The Group reassesses useful lives, amortization method and rates for each intangible asset annually by considering
expected pattern of economic benefits that the Group expects to derive from that asset.
(d) Revaluation of property, plant and equipment (see note 6.1.1)
Revaluation of property, plant and equipment is carried out by independent professional valuers. Revalued amounts of
non-depreciable items are determined by reference to local market values and that of depreciable items are
determined by reference to present depreciated replacement values.
(e) Recoverable amount and impairment of non-financial assets (see note 6.26.2)
The management of the Group reviews carrying amounts of its non-financial assets for possible impairment and makes
formal estimates of recoverable amount if there is any such indication.
(f) Taxation (see note 6.21)
The Group takes into account the current income tax law and decisions taken by appellate and other relevant legal
forums while estimating its provision for current tax. Provision for deferred tax is estimated after taking into account
historical and expected future turnover and profit trends and their taxability under the current tax law.
(g) Provisions (see note 6.16)
Provisions are based on best estimate of the expenditure required to settle the present obligation at the reporting date,
that is, the amount that the Group would rationally pay to settle the obligation at the reporting date or to transfer it to a
third party. This involves estimation of most likely amounts for one-off events such as litigations and estimation of
probability-weighted expected values for large populations of events, such as warrantees.
(h) Net realizable values of stock in trade (see note 6.5)
The Group estimates net realizable values of its stock in trade as the estimated selling price in the ordinary course of
business less estimated costs of completion and estimated costs necessary to make the sale.
2.5 Functional currency
These financial statements have been prepared in Pak Rupees which is the Group's functional currency.
2.6 Issue of consolidated financial statements
These consolidated financial statements were initially authorized for issue on March 27, 2020 by the Board of Directors of the
Parent Company. Subsequently, these consolidated financial statements were amended to disclose non-adusting event
occurring after the reporting period (see note 59.2). The amendment is restricted to note 59.2 only and there were no
amendments to the amounts reported in the previously issued consolidated financial statements.. The amended
consolidated financial statements were authorized for issue on May 02, 2020 by the Board of Directors of the Parent
Company.
3 NEW AND REVISED STANDARDS, INTERPRETATIONS AND AMENDMENTS EFFECTIVE DURING THE YEAR
The following new and revised standards, interpretations and amendments are effective in the current period but are either
not relevant to the Group or their application does not have any material impact on the interim financial statements of the
Group other than presentation and disclosures.
3.1 IFRS 9 - Financial Instruments
IFRS 9 introduces new requirements for the classification and measurement of financial assets and financial liabilities,
impairment of financial assets and general hedge accounting. The Group has applied IFRS 9 in accordance with the
transitions provision set out in the standard.
The date of initial application of IFRS 9 (the date on which the Group has assessed its existing financial assets and financial
liabilities in terms of the requirements of IFRS 9) is January 01, 2019. Accordingly, the Group has applied the requirements of
IFRS 9 to instruments that continue to be recognized as at December 31, 2019. Comparative amounts in relation to
instruments that continue to be recognized as at December 31, 2019 have not been restated as allowed by IFRS 9.
Classification and measurement
The classification and measurement requirements for financial liabilities have been substantially carried forward from IAS 39.
All recognized financial assets that are within the scope of IFRS 9 are required to be measured subsequently at amortized cost
or fair value on the basis of the Group's business model for managing the financial assets and the contractual cash flow
characteristics of the financial assets. Specifically:
- Financial assets that are held within a business model whose objective is to hold financial assets in order to collect
contractual cashflows and the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding are subsequently measured at amortized
cost and accordingly classified as 'financial assets at amortized cost’;
- Financial assets that are held within a business model whose objective is achieved by both collecting contractual
cashflows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding subsequently measured at
fair value through other comprehensive income and accordingly classified as 'financial assets at fair value through other
comprehensive income [FVTOCI]’;
- All other financial instruments are subsequently measured at fair value through profit or loss and accordingly classified
as 'financial assets at fair value through profit or loss [FVTPL]'.
Despite the foregoing, the Group may make an irrevocable election/designation at initial recognition of financial asset:
- To present subsequent changes in fair value of an equity instrument that is not held for trading nor contingent
consideration recognized by an acquirer in a business combination in other comprehensive income and classify it as
FVTOCI;
- To designate a debt instrument that meets the amortized cost or FVTOCI criteria as measured at FVTPL if doing so
eliminates or significantly reduces a measurement or recognition inconsistency.
When a financial asset measured at FVTOCI is derecognized, the cumulative gain or loss recognized in other comprehensive
income is reclassified to profit or loss as a reclassification adjustment except for equity instruments measured at FVTOCI,
where the cumulative gain or loss previously recognized in other comprehensive income is subsequently transferred to
accumulated profits.
The Group has reviewed and assessed the existing financial assets as at December 31, 2019 based on facts and
circumstances that existed at that date and concluded that initial application of IFRS 9 has had the following impact on the
Group's financial assets as regards their classification and measurement.
IAS 39 Classification IFRS 9 Classification
Long term advances Loans and receivables Financial assets at amortized cost
Long term deposits Loans and receivables Financial assets at amortized cost
Trade debts Loans and receivables Financial assets at amortized cost
Short term deposits Loans and receivables Financial assets at amortized cost
Bank balances Loans and receivables Financial assets at amortized cost
Short term investments Financial assets at fair value through Financial assets at fair value through
profit or loss profit or loss
Redeemable capital Financial liabilities at amortized cost Financial liabilities at amortized cost
Long term finances Financial liabilities at amortized cost Financial liabilities at amortized cost
Lease liabilities Financial liabilities at amortized cost Financial liabilities at amortized cost
Trade creditors Financial liabilities at amortized cost Financial liabilities at amortized cost
Foreign bills payable Financial liabilities at amortized cost Financial liabilities at amortized cost
Accrued liabilities Financial liabilities at amortized cost Financial liabilities at amortized cost
Employees' provident fund Financial liabilities at amortized cost Financial liabilities at amortized cost
Compensated absences Financial liabilities at amortized cost Financial liabilities at amortized cost
Unclaimed dividend Financial liabilities at amortized cost Financial liabilities at amortized cost
Other payables Financial liabilities at amortized cost Financial liabilities at amortized cost
Accrued interest/markup/profit Financial liabilities at amortized cost Financial liabilities at amortized cost
Short term borrowings Financial liabilities at amortized cost Financial liabilities at amortized cost
Impairment of financial assets
In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model as opposed to an incurred
credit loss model under IAS 39. The expected credit loss model requires the Group to account for expected credit losses and
changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of the
financial assets. Therefore, it is no longer necessary for a credit loss to have occurred before the same is recognized.
IFRS 9 requires the Group to measure the loss allowance for financial instrument at an amount equal to lifetime expected
credit losses if the credit risk has increased significantly since initial recognition, or if the financial instrument is a purchased or
originated credit impaired financial asset. However, if the credit risk on a financial instrument has not increased significantly
since initial recognition, except for a purchased or originated credit-impaired financial asset, the Group is required to
measure the loss allowance for that financial asset at an amount equal to 12-months expected credit loss. IFRS 9 also requires
a simplified approach for measuring the loss allowance at an amount equal to lifetime expected credit losses for trade
receivables, contract assets and lease receivables in certain circumstances.
3.2 IFRS 15 - Revenue from Contracts with Customers
IFRS 15 - Revenue from Contracts with Customers provides a single, principles based five-step model to be applied to all
contracts with customer.
- Identify the contract with customer.
- Identify the performance obligations in the contract.
- Determine the transaction price.
- Allocate the transaction price to the performance obligations in the contracts.
- Recognize revenue when (or as) the entity satisfies a performance obligation.
IFRS 15 - Revenue from Contracts with Customers' supersedes IAS 11 - Construction Contracts, IAS 18 - Revenue and related
interpretations and it applies to all revenue arising from contracts with customers, unless those contracts are in the scope of
other standards. The new standard establishes a five-step model to account for revenue arising from contracts with
customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be
entitled in exchange for transferring goods or services to a customer. The standard requires entities to exercise judgment,
taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with
their customers.
The group has applied IFRS 15 using the cumulative effect method and therefore comparative information has not been
restated and continues to be reported under IAS 8 and IAS 11. The accumulative effect of applying IFRS 15 has been
recognised as on January 01, 2019 with the corresponding adjustment to accumulated profit as on that date.
3.3 IFRS 16 - Leases (2016)
IFRS 16 supersedes IAS 17 - Leases, IFRIC 4 - Determining whether an Arrangement contains a Lease, SIC-15 - Operating
Leases- Incentives and SIC-27 - Evaluating the Substance of Transactions Involving the Legal Form of a Lease'. The standard
sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to
account for most leases under a single on-balance sheet model. Lessor accounting under IFRS 16 is substantially unchanged
from IAS 17. Lessors will continue to classify leases as either operating or finance leases using similar principles as in IAS 17.
Whereas, for lessees all leases will be classified as finance leases only. However, as per relevant guidelines issued by Institute
of Chartered Accountants of Pakistan, contracts under Ijarah will continue to be treated as operating leases under IFAS 2.
The Group adopted IFRS 16 using the modified retrospective method of adoption with the date of initial application of
January 01, 2019. Under this method, the standard is applied retrospectively with cumulative effect of initially applying
standard recognised at the date of initial application and accordingly the Group is not required to restate prior year results.
The Group assessed its existing contracts and concluded that right-of-use assets as disclosed in these financial statements
shall be recognised along with their corresponding lease liabilities. For other existing contracts, the Group elected to use the
recognition exemptions for lease contracts that, at the commencement date, have a lease term of twelve months or less and
do not contain a purchase option (‘short-term leases’), and lease contracts for which the underlying asset is of low value
(‘lowvalue assets’).
The right-of-use assets were recognised based on the amount equal to their corresponding lease liabilities, adjusted for
related prepaid and accrued lease payments previously recognised. Lease liabilities were recognised based on the present
value of the remaining lease payments. The Group did not have any sub-lease as on January 01, 2019. Accordingly, initial
application of IFRS 16 did not have any impact on the opening retained earnings as of January 01, 2019 and on these financial
statements, except for the recognition of right-of-use assets and corresponding lease liabilities as disclosed in these financial
statements.
3.4 IFRIC 23 - Uncertainty over Income Tax Treatments
The interpretation addresses the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits
and tax rates, when there is uncertainty over income tax treatments under IAS 12. It specifically considers:
- Whether tax treatments should be considered collectively
- Assumptions for taxation authorities' examinations
- The determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates
- The effect of changes in facts and circumstances
3.5 Prepayment Features with Negative Compensation (Amendments to IFRS 9 - Financial Instruments)
IFRS 9 - Financial Instruments have been amended regarding termination rights in order to allow measurement at amortised
cost (or, depending on the business model, at fair value through other comprehensive income) even in the case of negative
compensation payments.
3.6 Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28 - Investments in Associates and Joint Ventures)
IAS 28 - Investments in Associates and Joint Ventures have been amended to clarify that an entity applies IFRS 9 Financial
Instruments to long-term interests in an associate or joint venture that form part of the net investment in the associate or joint
venture but to which the equity method is not applied.
3.7 Annual Improvements to IFRS Standards 2015 – 2017 Cycle
The annual improvements have made amendments to the following standards:
- IFRS 3 - Business Combinations and IFRS 11 - Joint Arrangements - The amendments to IFRS 3 clarify that when an entity
obtains control of a business that is a joint operation, it remeasures previously held interests in that business. The
amendments to IFRS 11 clarify that when an entity obtains joint control of a business that is a joint operation, the entity
does not remeasure previously held interests in that business.
- IAS 12 - Income Taxes - The amendments clarify that the requirements in the former paragraph 52B (to recognise the
income tax consequences of dividends where the transactions or events that generated distributable profits are
recognised) apply to all income tax consequences of dividends by moving the paragraph away from paragraph 52A
that only deals with situations where there are different tax rates for distributed and undistributed profits.
- IAS 23 - Borrowing Costs - The amendments clarify that if any specific borrowing remains outstanding after the related
asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally
when calculating the capitalisation rate on general borrowings.
3.8 Plan Amendment, Curtailment or Settlement (Amendments to IAS 19 - Employee Benefits)
IAS 19 - Employees Benefits has been amended to provide that:
- If a plan amendment, curtailment or settlement occurs, it is now mandatory that the current service cost and the net
interest for the period after the remeasurement are determined using the assumptions used for the remeasurement. In
addition, amendments have been included to clarify the effect of a plan amendment, curtailment or settlement on the
requirements regarding the asset ceiling.
4 NEW AND REVISED STANDARDS, INTERPRETATIONS AND AMENDMENTS NOT YET EFFECTIVE.
Effective date
(annual periods beginning
on or after)
IFRS 17 - Insurance contracts (2017) January 01, 2021

Sale or contribution of assets between an Investor and its Associate or Joint Deferred Indefinitely
Venture (Amendments to IFRS 10 - Consolidated Financial Statementsand IAS 28 -
Investments in Associates and Joint Ventures).
Amendments to References to the Conceptual Framework in IFRS Standards January 01, 2020
Definition of a Business (Amendments to IFRS 3 - Business Combinations) January 01, 2020
Definition of Material (Amendments to IAS 1 - First-time Adoption of International January 01, 2020
Financial Reporting Standards and IAS 8 - Accounting Policies, Changes in
Accounting Estimates and Errors)
Interest Rate Benchmark Reform (Amendments to IFRS 9 - Financial Instruments, January 01, 2020
IAS 39 - Financial Instruments: Recognition and Measurements, and IFRS 7 -
Financial Instruments: Disclosures)
Other than afore-mentioned standards, interpretations and amendments, IASB has also issued the following standards
which have not been notified by the Securities and Exchange Commission of Pakistan ['SECP']:
IFRS 1 - First Time Adoption of International Financial Reporting Standards

IFRS 14 - Regulatory Deferral Accounts
IFRS 17 – Insurance contracts (2017)
The Group intends to adopt these new and revised standards, interpretations and amendments on their effective dates,
subject to, where required, notification by Securities and Exchange Commission of Pakistan under section 225 of the
Companies Act, 2017 regarding their adoption. The management anticipates that the adoption of the above standards,
amendments and interpretations in future periods, will have no material impact on the Group's financial statements other
than in presentation/disclosures.
5 CHANGES IN ACCOUNTING POLICIES
The adoption of new and revised standards, interpretations and amendments effective during the year has resulted in
changes to accounting policies as follows:
Previous accounting policy New accounting policy
A financial asset is assessed at each reporting date to The Group recognizes a loss allowance for expected credit
determine whether there is any objective evidence that it is losses on financial assets carried at amortized cost on date
impaired. Individually significant financial assets are tested for of initial recognition. The amount of expected credit losses
impairment on an individual basis. The remaining financial is updated on each reporting date to reflect the changes in
assets are assessed collectively in groups that share similar credit risk since initial recognition of the respective
credit risk characteristics. A financial asset is considered to be financial asset.
impaired if objective evidence indicates that one or more Impairment is recognized at an amount equal to lifetime
events have had a negative effect on the estimated future cash expected credit losses for financial assets for which credit
flows of the asset. risk has increased significantly since initial recognition. For
An impairment loss in respect of a financial asset measured at financial assets for which credit risk is low, impairment is
amortized cost is calculated as the difference between its recognized at an amount equal to twelve months'
carrying amount, and the present value of the estimated future expected credit losses, with the exception of trade debts,
cash flows discounted at the original effective interest rate. for which the Group recognises lifetime expected credit
Impairment loss in respect of a financial asset measured at fair losses estimated using internal credit risk grading based
value is determined by reference to that fair value. All on the Group's historical credit loss experience, adjusted
impairment losses are recognized in profit or loss. An for factors that are specific to debtors, general economic
impairment loss is reversed if the reversal can be related conditions, and an assessment for both the current as well
objectively to an event occurring after the impairment loss was as the forecast direction of conditions at the reporting
recognized. An impairment loss is reversed only to the extent date, including time value of money where appropriate.
that the financial asset’s carrying amount after the reversal All impairment losses are recognized in profit or loss. An
does not exceed the carrying amount that would have been impairment loss is reversed if the reversal can be related
determined, net of amortization, if no impairment loss had objectively to an event occurring after the impairment loss
been recognized. was recognized. An impairment loss is reversed only to the
extent that the financial asset’s carrying amount after the
reversal does not exceed the carrying amount that would
have been determined, net of amortization, if no
impairment loss had been recognized.
The Group writes off a financial asset when there is
information indicating that the counter-party is in severe
financial condition and there is no realistic prospect of
recovery. Any recoveries made post write-off are
recognized in profit or loss.
Liabilties against assets subject to finance lease / Lease liabilities
Leases in terms of which the Group assumes substantially all At the commencement date of the lease, the Group
risks and rewards of ownership are classified as finance leases. recognises lease liabilities measured at the present value
Assets subject to finance lease are classified as 'operating of lease payments to be made over the lease term. The
fixed assets'. On initial recognition, these are measured at lease payments include fixed payments (including in-
cost, being an amount equal to the lower of its fair value and substance fixed payments) less any lease incentives
the present value of minimum lease payments. Subsequent to receivable, variable lease payments that depend on an
initial recognition, these are measured at cost less index or a rate, and amounts expected to be paid under
accumulated depreciation and accumulated impairment residual value guarantees. The lease payments also
losses. Depreciation, subsequent expenditure, de- include the exercise price of a purchase option reasonably
recognition, and gains and losses on de-recognition are certain to be exercised by the Group and payments of
accounted for in accordance with the respective policies for penalties for terminating a lease, if the lease term reflects
operating fixed assets. Liabilities against assets subject to the Group exercising the option to terminate. The variable
finance lease are classified as 'financial liabilities at amortized lease payments that do not depend on an index or a rate
cost' ' respectively, however, since they fall outside the scope are recognised as expense in the period on which the
of measurement requirements of IFRS 9, these are measured event or condition that triggers the payment occurs.
in accordance with the requirements of IAS 17. On initial In calculating the present value of lease payments, the
recognition, these are measured at cost, being their fair value Group uses if the interest rate implicit in the lease. After the
at the date of commencement of lease, less attributable commencement date, the amount of lease liabilities is
transaction costs. Subsequent to initial recognition, minimum increased to reflect the accretion of interest and reduced
lease payments made under finance leases are apportioned for the lease payments made. In addition, the carrying
between the finance charge and the reduction of outstanding amount of lease liabilities is remeasured if there is a
liability. The finance charge is allocated to each period during modification, a change in the lease term, a change in the in-
the lease term so as to produce a constant periodic rate of substance fixed lease payments or a change in the
interest on the remaining balance of the liability. Deposits assessment to purchase the underlying asset.
against finance leases, subsequent to initial recognition are
carried at cost.
The following table summarises the impact of application of new and revised standards, interpretations and amendments
effective during the year, on the Group's consolidated financial statements, for the year ended December 31, 2019.
Without As
adoption Adjustment reported
Rupees '000 Rupees '000 Rupees '000
Impact on equity
Accumulated profits 15,434,016 (475,844) 14,958,172
Impact on liabilities
Warranty obligations - 475,844 475,844
Impact on profit or loss

Warranty period services 270,809 32,452 303,261
Impact on earnings per share

Decrease in earnings per share 1.75 (0.07) 1.68
6 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these financial statements
except of the change referred to in note 5.
6.1 Property, plant and equipment
6.1.1 Operating fixed assets
Operating fixed assets are measured at cost less accumulated depreciation and accumulated impairment losses with the
exception of land, building and plant and machinery. Land, building and plant and machinery are measured at revalued
amounts less accumulated depreciation and accumulated impairment losses, if any. Cost comprises purchase price,
including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and includes other
costs directly attributable to the acquisition or construction, erection and installation.
Assets' residual values, if significant and their useful lives are reviewed and adjusted, if appropriate, at each reporting date.
When significant parts of an item of operating fixed assets have different useful lives, they are recognized as separate items.
Major renewals and improvements to operating fixed assets are recognized in the carrying amount if it is probable that the
embodied future economic benefits will flow to the Group and the cost of renewal or improvement can be measured reliably.
The cost of the day-to-day servicing of operating fixed assets are recognized in profit or loss as incurred.
The Group recognizes depreciation in profit or loss by applying reducing balance method, with the exception of computer
hardware and allied items, which are depreciated using straight line method, over the useful life of each operating fixed asset
using rates specified in note to the financial statements. Depreciation on additions to operating fixed assets is charged from
the month in which the item becomes available for use. Depreciation is discontinued from the month in which it is disposed or
classified as held for disposal.
An operating fixed asset is de-recognized when permanently retired from use. Any gain or loss on disposal of operating fixed
assets is recognized in profit or loss.
Increases in the carrying amounts arising on revaluation of property, plant and equipment are recognised, net of tax, in other
comprehensive income and accumulated in surplus on revaluation of property, plant and equipment in share capital and
reserves. To the extent that the increase reverses a decrease previously recognised in profit or loss, the increase is first
recognised in profit or loss. Decreases that reverse previous increases of the same asset are first recognised in other
comprehensive income to the extent of the remaining surplus attributable to the asset; all other decreases are charged to
profit or loss. Each year, the difference between depreciation based on the revalued carrying amount of the asset charged to
profit or loss and depreciation based on the asset’s original cost, net of tax, is reclassified from the surplus on revaluation of
property, plant and equipment to accumulated profit.
6.1.2 Capital work in progress
Capital work in progress is stated at cost less identified impairment loss, if any, and includes the cost of material, labour and
appropriate overheads directly relating to the construction, erection or installation of an item of operating fixed assets. These
costs are transferred to operating fixed assets as and when related items become available for intended use.
6.2 Intangible assets
6.2.1 Goodwill
Goodwill represents the excess of the cost of business combination over the acquirer's interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities of the acquiree. This is stated at cost less any accumulated impairment
losses, if any.
6.2.2 Technology transfer
The intangible assets in respect of technology transfer are amortized over the useful life of plant and machinery involved in
use of such technology. Amortization of intangible commences when it becomes available for use.
6.2.3 Computer software and ERP
Computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific
software. Costs that are directly associated with the production of identifiable and unique software products controlled by
the Group, and that will probably generate economic benefits exceeding costs beyond one year, are recognized as
intangible assets. These costs are amortized over their estimated useful lives. Amortization of intangible asset commences
when it becomes available for use.
6.3 Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred (if any), and lease payments made at or before the commencement date less lease
incentives received (if any). Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the
lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful
life and the lease term. Right-of-use assets are subject to impairment.
6.4 Stores, spares and loose tools
These are generally held for internal use and are valued at cost. Cost is determined on the basis of moving average except for
items in transit, which are valued at invoice price plus related cost incurred up to the reporting date. For items which are
considered obsolete, the carrying amount is written down to nil. Spare parts held for capitalization are classified as property,
plant and equipment through capital work in progress.
6.5 Stock in trade
These are valued at lower of cost and net realizable value, with the exception of stock of waste which is valued at net realizable
value. Cost is determined using the following basis:
Raw materials Moving average cost

Work in process Average manufacturing cost
Finished goods Average manufacturing cost
Stock in transit Invoice price plus related cost incurred up to the reporting date
Average manufacturing cost in relation to work in process and finished goods consists of direct material, labour and an
appropriate proportion of manufacturing overheads.
Net realizable value signifies the estimated selling price in the ordinary course of business less estimated costs of completion
and estimated costs necessary to make the sale.
6.6 Employee benefits
6.6.1 Short-term employee benefits
The Group recognizes the undiscounted amount of short term employee benefits to be paid in exchange for services
rendered by employees as a liability after deducting amount already paid and as an expense in profit or loss unless it is
included in the cost of inventories or property, plant and equipment as permitted or required by the approved accounting
and reporting standards as applicable in Pakistan. If the amount paid exceeds the undiscounted amount of benefits, the
excess is recognized as an asset to the extent that the prepayment would lead to a reduction in future payments or cash
refund.
The Group provides for compensated absences of its employees on un-availed balance of leaves in the period in which the
leaves are earned.
6.6.2 Post-employment benefits
The Group operates an approved funded contributory provident fund for all its permanent employees who have completed
the minimum qualifying period of service as defined under the respective scheme. Equal monthly contributions are made
both by the Group and the employees at the rate of ten percent of basic salary and cost of living allowance, where applicable,
to cover the obligation. Contributions are charged to profit or loss.
6.7 Financial instruments
6.7.1 Recognition
A financial instrument is recognized when the Group becomes a party to the contractual provisions of the instrument.
6.7.2 Classification
The Group classifies its financial assets on the basis of the Group's business model for managing the financial assets and the
contractual cash flow characteristics of the financial asset. Financial liabilities are classified in accordance with the substance
of contractual provisions. The Group determines the classification of its financial instruments at initial recognition as follows:
(a) Financial assets at amortized cost
These are financial assets held within a business model whose objective is to hold financial assets in order to collect
solely payments of principal and interest on the principal amount outstanding.
(b) Financial assets at fair value through profit or loss
These are financial assets which have not been classified as 'financial assets at amortized cost' or as 'financial assets at
fair value through other comprehensive income', are mandatorily measured at fair value through profit or loss or for
which the Group makes an irrevocable election at initial recognition to designate as 'financial asset at fair value through
profit or loss' if doing so eliminates or significantly reduces a measurement or recognition inconsistency.
(c) Financial liabilities at amortized cost
These are financial liabilities which are not derivatives, financial guarantee contracts, commitments to provide loans at
below-market interest rate, contingent consideration payable to an acquirer in a business combination or financial
liabilities that arise when transfer of a financial asset does not qualify for derecognition.
6.7.3 Measurement
The particular measurement methods adopted are disclosed in individual policy statements associated with each financial
instrument.
6.7.4 Derecognition
A financial asset is derecognized when the Group's contractual rights to the cash flows from the financial assets expire or
when the Group transfers the financial asset to another party without retaining control of substantially all risks and rewards of
the financial asset. A financial liability is derecognized when the Group's obligations specified in the contract are expired,
discharged or cancelled.
6.7.5 Off-setting
A financial asset and financial liability is offset and the net amount reported in the statement of financial position if the Group
has legally enforceable right to set-off the recognized amounts and intends either to settle on a net basis or to realize the
asset and settle the liability simultaneously.
6.7.6 Regular way purchases or sales of financial assets
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame
established by regulation or convention in the market place. Regular way purchases or sales of financial assets are
recognized and derecognized on a trade date basis.
6.8 Ordinary share capital
Ordinary share capital is recognized as equity. Transaction costs directly attributable to the issue of ordinary shares are
recognized as deduction from equity.
6.9 Preference share capital
Preference share capital is recognized as equity in accordance with the interpretation of the provision of the repealed
Companies Ordinance, 1984, including those pertaining to implied classifications of preference shares.
6.10 Loans and borrowings
Loans and borrowings are classified as 'financial liabilities at amortized cost'. On initial recognition, these are measured at
cost, being fair value at the date the liability is incurred, less attributable transaction costs. Subsequent to initial recognition,
these are measured at amortized cost with any difference between cost and value at maturity recognized in the profit or loss
over the period of the borrowings on an effective interest basis.
6.11 Investments in equity securities

6.11.1 Investments in associates
Investments in associates are accounted for using the equity method of accounting. Under the equity method, investments in
associates are carried in the consolidated statement of financial position at cost as adjusted for post acquisition changes in
the Group's share of net assets of the associate, less any impairment in the value of investment. Losses of an associate in
excess of the Group's interest in that associate (which includes any long term interest that, in substance, form part of the
Group's net investment in the associate) are recognized only to the extent that the Group has incurred legal or constructive
obligation or made payment on behalf of the associate.
6.11.2 Investments in other quoted equity securities
Investments in quoted equity securities are classified as 'financial assets at fair value through profit or loss'. On initial
recognition, these are measured at fair value on the date of acquisition. Subsequent to initial recognition, these are measured
at fair value. Changes in fair value are recognized in profit or loss. Gains and losses on de-recognition are recognized in profit
or loss. Dividend income is recognized in profit or loss when right to receive payment is established.
6.12 Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase
option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term
reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate
are recognised as expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses if the interest rate implicit in the lease. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the
lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying
asset.
6.13 Short-term leases
The Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease
term of twelve months or less from the commencement date and do not contain a purchase option). Lease payments on
short-term leases are recognised as expense on a straight-line basis over the lease term.
6.14 Ijarah transactions
Ujrah payments under an Ijarah are recognized as an expense in the profit or loss on a straight-line basis over the Ijarah terms
unless another systematic basis are representative of the time pattern of the user's benefit, even if the payments are not on
that basis.
6.15 Trade and other payables
6.15.1 Financial liabilities
These are classified as 'financial liabilities at amortized cost'. On initial recognition, these are measured at cost, being their fair
value at the date the liability is incurred, less attributable transaction costs. Subsequent to initial recognition, these are
measured at amortized cost using the effective interest method, with interest recognized in profit or loss.
6.15.2 Non-financial liabilities
These, both on initial recognition and subsequently, are measured at cost.
6.16 Provisions and contingencies
Provisions are recognized when the Group has a legal and constructive obligation as a result of past events and it is probable
that outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can
be made of the amount of obligation. Provision is recognized at an amount that is the best estimate of the expenditure
required to settle the present obligation at the reporting date. Where outflow of resources embodying economic benefits is
not probable, or where a reliable estimate of the amount of obligation cannot be made, a contingent liability is disclosed,
unless the possibility of outflow is remote.
6.17 Trade and other receivables
6.17.1 Financial assets
These are classified as 'financial assets at amortized cost'. On initial recognition, these are measured at fair value at the date of
transaction, plus attributable transaction costs, except for trade debts that do not have a significant financing component,
which are measured at undiscounted invoice price. Subsequent to initial recognition, these are measured at amortized cost
using the effective interest method, with interest recognized in profit or loss.
6.17.2 Non-financial assets
6.18 Contracts with customers
6.18.1 Revenue
Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue
from a contract with customer when the Group satisfies an obligation specified in that contract. The following table provides
information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including
significant payment terms, and the related revenue recognition policies.
Nature and timing of satisfaction of performance

Product/service obligations, including significant payment terms Revenue recognition policies
Home appliances Performance obligation are satisfied when customers obtain Revenue is recognised when the
control of home appliances when these are delivered to and goods are delivered and have
Refrigerators, deep have been accepted at their premises. Invoices are generated been accepted by customers at
freezers, air at that point in time. Invoices are usually payable within a their premises.
conditioners, period ranging from 30 days to 90 days, except for retail sales
microwave ovens, LED which are payable at the time of purchase. Discounts are
TVs, washing allowed based on the payment terms and volume of sales.
machines, water There are no customer loyalty programs. These contracts do
dispensers and other not permit the customer to return any item. However, there are
home appliances. warranty provisions in place which provide for the Group's
obligations for service/replacement of products where these
do not meet the agreed specifications or otherwise do not
perform as guaranteed by the Group.
Electrical capital Performance obligation are satisfied when customers obtain Revenue is recognised when the
goods control of electrical capital goods when these are delivered to goods are delivered and have
and have been accepted at their premises. Invoices are been accepted by customers at
Transformers, generated at that point in time. Invoices, where customer is the their premises.
switchgears, energy Federal/Provincial Government, are payable in accordance
meters with the tender documents, usually upto 90 days. For private
customers, invoices are paid for in advance. These products do
not carry any discounts. There are no customer loyalty
programs. These contracts do not permit the customer to
return any item. However, there are warranty provisions in
place which provide for the Group's obligations for
service/replacement of products where these do not meet the
agreed specifications or otherwise do not perform as
guaranteed by the Group.
Construction contracts The Group constructs power grid stations for Government as Revenue is recognised over time
well as private customers. Performance obligations are using the output method based on
Engineering, satisfied over time by reference to stage of completion of measurements of the value of
procurement and contract activity at the balance sheet date. Invoices are issued services transferred to date,
construction services according to contractual terms and are usually payable within a relative to the remaining services
period ranging from 30 days to 90 days, except for those promised under the contract.
contracts for which transaction price has been received in
advance. A percentage of transaction price is retained by
Government customers as 'retention money' from payments
to the Group, which is released on expiry of an agreed period
after completion of contract activity. Uninvoiced amounts are
presented as contract assets.
6.18.2 Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. The Group
recognizes a contract asset for the earned consideration that is conditional if the Group performs by transferring goods or
services to a customer before the customer pays consideration or before payment is due.
6.18.3 Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received
consideration from the customer. A contract liability is recognized at earlier of when the payment is made or the payment is
due if a customer pays consideration before the Group transfers goods or services to the customer.
6.18.4 Warranty obligations
The Group accounts for its warranty obligations when the underlying product or service is sold or rendered. The provision is
based on historical warranty data and weighing-in various possible outcomes against their associated probabilities.
6.19 Comprehensive income
Comprehensive income is the change in equity resulting from transactions and other events, other than changes resulting
from transactions with shareholders in their capacity as shareholders. Total comprehensive income comprises all
components of profit or loss and other comprehensive income ['OCI']. OCI comprises items of income and expense,
including reclassification adjustments, that are not recognized in profit or loss as required or permitted by approved
accounting and reporting standards as applicable in Pakistan, and is presented in 'statement of other comprehensive
income'.
6.20 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the
temporary investment of specific borrowings pending their expenditure on qualifying asset is deducted from the borrowing
costs eligible for capitalization. All other borrowing costs are recognized in profit or loss as incurred.
6.21 Income tax
Income tax expense comprises current tax and deferred tax. Income tax expense is recognized in profit or loss except to the
extent that it relates to items recognized directly in other comprehensive income, in which case it is recognized in other
comprehensive income.
6.21.1 Current taxation
Current tax is the amount of tax payable on taxable income for the year and any adjustment to the tax payable in respect of
previous years. Provision for current tax is based on current rates of taxation in Pakistan after taking into account tax credits,
rebates and exemptions available, if any. The amount of unpaid income tax in respect of the current or prior periods is
recognized as a liability. Any excess paid over what is due in respect of the current or prior periods is recognized as an asset.
6.21.2 Deferred taxation
Deferred tax is accounted for using the' balance sheet approach' providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. In this regard, the
effects on deferred taxation of the portion of income that is subject to final tax regime is also considered in accordance with
the treatment prescribed by The Institute of Chartered Accountants of Pakistan. Deferred tax is measured at rates that are
expected to be applied to the temporary differences when they reverse, based on laws that have been enacted or
substantively enacted by the reporting date. A deferred tax liability is recognized for all taxable temporary differences. A
deferred tax asset is recognized for deductible temporary differences to the extent that future taxable profits will be available
against which temporary differences can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will be realized.
6.22 Government grants
Government grants that compensate the Group for expenses or losses already incurred are recognized in profit or loss in the
period in which these are received and are deducted in reporting the relevant expenses or losses. Grants relating to property,
plant and equipment are recognized as deferred income and an amount equivalent to depreciation charged on such assets
is transferred to profit or loss.
6.23 Earnings per share ['EPS']
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted
average number of ordinary shares outstanding during the year.
Diluted EPS is calculated by adjusting basic EPS by the weighted average number of ordinary shares that would be issued on
conversion of all dilutive potential ordinary shares into ordinary shares and post-tax effect of changes in profit or loss
attributable to ordinary shareholders of the Group that would result from conversion of all dilutive potential ordinary shares
into ordinary shares.
6.24 Cash and cash equivalents
Cash and cash equivalents for the purpose of cash flow statement comprise cash in hand and cash at banks. Interest income
on cash and cash equivalents is recognized using effective interest method.
6.25 Foreign currency transactions and balances
Transactions in foreign currency are translated to the functional currency of the Group using exchange rate prevailing at the
date of transaction. Monetary assets and liabilities denominated in foreign currency are translated to the functional currency
at exchange rate prevailing at the reporting date. Non-monetary assets and liabilities denominated in foreign currency that
are measured at fair value are translated to the functional currency at exchange rate prevailing at the date the fair value is
determined. Non-monetary assets and liabilities denominated in foreign currency that are measured at historical cost are
translated to functional currency at exchange rate prevailing at the date of initial recognition. Any gain or loss arising on
translation of foreign currency transactions and balances is recognized in profit or loss.
6.26 Impairment
The Group recognizes a loss allowance for expected credit losses on financial assets carried at amortized cost on date of
initial recognition. The amount of expected credit losses is updated on each reporting date to reflect the changes in credit
risk since initial recognition of the respective financial asset.
Impairment is recognized at an amount equal to lifetime expected credit losses for financial assets for which credit risk has
increased significantly since initial recognition. For financial assets for which credit risk is low, impairment is recognized at an
amount equal to twelve months' expected credit losses, with the exception of trade debts, for which the Group recognises
lifetime expected credit losses estimated using internal credit risk grading based on the Group's historical credit loss
experience, adjusted for factors that are specific to debtors, general economic conditions, and an assessment for both the
current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
All impairment losses are recognized in profit or loss. An impairment loss is reversed if the reversal can be related objectively
to an event occurring after the impairment loss was recognized. An impairment loss is reversed only to the extent that the
financial asset’s carrying amount after the reversal does not exceed the carrying amount that would have been determined,
net of amortization, if no impairment loss had been recognized.
The Group writes off a financial asset when there is information indicating that the counter-party is in severe financial
condition and there is no realistic prospect of recovery. Any recoveries made post write-off are recognized in profit or loss.
The carrying amount of the Group’s non-financial assets, other than inventories and deferred tax assets are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated. The recoverable amount of an asset or cash generating unit is the greater of its value in use
and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present
values using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset or cash generating unit.
An impairment loss is recognized if the carrying amount of the asset or its cash generating unit exceeds its estimated
recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of cash
generating units are allocated to reduce the carrying amounts of the assets in a unit on a pro rata basis. Impairment losses
recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the estimates used in determining the recoverable
amount. An impairment loss is reversed only to that extent that the asset’s carrying amount after the reversal does not exceed
the carrying amount that would have been determined, net of depreciation and amortization, if no impairment loss had been
recognized.
6.27 Dividend distribution to ordinary shareholders
Dividend to ordinary shareholders is recognized as a deduction from accumulated profit in statement of changes in equity
and as a liability, to the extent it is unclaimed/unpaid, in the Group’s financial statements in the year in which the dividends are
approved by the Group’s shareholders.
6.28 Basis of allocation of common expenses
Distribution, administrative and finance cost are allocated to PEL Marketing (Private) Limited ['PMPL'] on the basis of
percentage of resources used by PMPL, under the interservices agreement between the PEL and PMPL.
6.29 Segment reporting
Segment reporting is based on the operating segments that are reported in the manner consistent with internal reporting of
the Group. An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other
components. An operating segment’s operating results are reviewed regularly by the Chief Executive Officer to make
decisions about resources to be allocated to the segment and assess its performance and for which discrete financial
information is available.
Segment results that are reported to the Chief Executive Officer include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Unallocated items comprise mainly other operating income and expenses,
share of profit/(loss) of associates, finance costs, and provision for taxes.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment. The
business segments are engaged in providing products or services which are subject to risks and rewards which differ from
the risk and rewards of other segments.
7 AUTHORIZED CAPITAL
2019 2018 2019 2018

No. of shares No. of shares Rupees '000 Rupees '000
500,000,000 500,000,000 Ordinary shares of Rs. 10 each 5,000,000 5,000,000
62,500,000 62,500,000 'A' class preference shares of Rs. 10 each 625,000 625,000
37,500,000 37,500,000 'B' class preference shares of Rs. 10 each 375,000 375,000
100,000,000 100,000,000 1,000,000 1,000,000
600,000,000 600,000,000 6,000,000 6,000,000
8 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
2019 2018 2019 2018

Ordinary shares of Rs. 10 each

372,751,051 372,751,051 Issued for cash 3,727,511 3,727,511
Issued for other than cash:
137,500 137,500 - against machinery 1,375 1,375
408,273 408,273 - against acquisition of PEL Appliances Limited 4,083 4,083
6,040,820 6,040,820 - against conversion of preference shares 60,408 60,408
118,343,841 118,343,841 - as fully paid bonus shares 1,183,439 1,183,439
497,681,485 497,681,485 4,976,816 4,976,816
'A' class preference shares of Rs. 10 each
44,957,592 44,957,592 Issued for cash 449,576 449,576
542,639,077 542,639,077 5,426,392 5,426,392
8.1 'A' class preference shares
8.1.1 Current status of original issue
PEL, in the December 2004, issued 'A' class preference shares to various institutional investors amounting to Rs. 605 million
against authorized share capital of this class amounting to Rs. 625 million. In Januray 2010, PEL sent out notices to all
preference shareholders seeking conversion of outstanding preference shares into ordinary shares of PEL in accordance
with the option available to the investors under the original terms of the issue. As at the reporting date outstanding balance of
preference shares amounts to Rs. 449.58 million representing investors who did not opt to convert their holdings into the
ordinary shares of PEL. Subsequently, PEL offered re-profiling of preference shares to these remaining investors. See note
8.1.2.
The Securities and Exchange Commission of Pakistan ['SECP'] issued order to Pakistan Stock Exchange Limited ['the
Exchange'] dated February 6, 2009 for delisting of these preference shares. However, the Company took up the matter with
the honorable Lahore High Court which, through order dated October 10, 2017, accepted the appeal of PEL and set aside
the SECP order and the appellate order.
8.1.2 Re-profiling of preference shares
PEL offered re-profiling of preference shares to investors, who did not convert their preference shares into ordinary shares in
response to the conversion notices issued by PEL. The investors to the instrument had, in principle, agreed to the re-profiling
term sheet and commercial terms and conditions therein. Further, SECP had allowed PEL to proceed with the re-profiling
subject to fulfillment of legal requirements. The legal documentation was prepared and circulated amongst the concerned
investors which was endorsed by the said investors except for National Bank of Pakistan, as a result of which the original time
frame for re-profiling has lapsed. PEL is in the process of finalising another re-profiling exercise based on mutual agreement
to be made amongst the existing investors.
8.1.3 Accumulated preference dividend
As at reporting date an amount of approximately Rs. 427.098 million (2018: Rs. 384.388 million) has been accumulated on
account of preference dividend which is payable if and when declared by the Board, to be appropriated out of the
distributable profits for that year. In case the preference dividend continues to be accumulated it would be settled at the time
of exercising the redemption or conversion option in accordance with the under process re-profiling exercise.
As per the opinion of the Group's legal counsel, the provision of cumulative dividend at 9.5% p.a. will prevail on account of
preference dividend, as the approval process of the revised terms of re-profiling from different quarters is not yet complete.
9 CAPITAL RESERVE
This represents premium on issue of right ordinary shares recognized under Section 83(1) of the repealed Companies
Ordinance, 1984.
2019 2018
10 SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT
As at beginning of the year 6,579,049 4,274,019
Surplus recognized during the year

Surplus for the year - 3,045,215
Deferred taxation - (672,091)
- 2,373,124
Incremental depreciation transferred to accumulated profits
Incremental depreciation for the year (716,624) (280,450)
Deferred taxation 187,960 80,626
(528,664) (199,824)
Other adjustments
Deferred tax adjustment attributable to changes in proportion
of income taxable under final tax regime (26,753) 79,462
Deferred tax adjustment attributable to changes in tax rates - 52,268
(26,753) 131,730
As at end of the year 6,023,632 6,579,049
11 REDEEMABLE CAPITAL
These represent interest/markup/profit based debt securities issued to institutional and other investors. The details are as
follows:
Description 2019 2018 Pricing Security Arrangements and repayment

Shariah compliant
Sukuk Funds - 101,875 Three months KIBOR plus 1% Charge on present and These were issued for the purpose of refinance of existing machinery with
per annum (2018: Three future operating fixed diminishing musharaka facility.
months KIBOR plus 1% per assets of PEL. Later, PEL entered into restructuring arrangement, whereby, the outstanding
annum) subject to floor and principal was deferred till June 2015 with the outstanding liability payable in
cap of 8% and 16% sixteen equal quarterly installments commencing from June 2015. The Group
respectively. has fully redeemed these Sukuk Funds during the year.
Total - 101,875
Current portion presented
under current liabilities - (101,875)
- -
12 LONG TERM FINANCES
These represent long term finances utilized under interest/markup/profit arrangements from banking companies and
financial institutions. The details are as follows:

Shariah compliant
Diminishing Musharakah 642,857 750,000 Three months KIBOR plus 1% Charge over operating The finance has been obtained from Faysal Bank Limited for the purpose of
per annum (2018: Three fixed assets of the PEL balancing modernization and replacement requirements. The finance is
months KIBOR plus 1% per and personal repayable in fourteen equal quarterly installments commencing from August
annum). guarantees of 2019.
sponsoring directors of
the PEL.
Diminishing Musharakah 1,000,000 - Three months KIBOR plus Charge over present The finance has been obtained from Faysal Bank Limited for the purpose of
1.5% per annum. and future fixed assets working capital rquirement and for construction of washing machine unit and
of PEL and personal warehouse/godown. The finance is repayable in fifteen equal quaterly
guarantees of installments commencing from February 2020.
Interest based arrangement PEL.
Term Finance 208,333 375,000 Three months KIBOR plus Charge over present The finance has been obtained from Pak Oman InvestmentCompany Limited for
3.8% per annum (2018:Three and future current assets the purpose of financing capital expenditure. The finance is repayable in twelve
months KIBOR plus 3.8% per of PEL, mortgage of the equal quarterly installments commencing from March 2018.
annum). PEL's land and building.
Term Finance 1,071,429 1,928,571 Three months KIBOR plus Charge over operating The finance has been obtained from Bank Alfalah Limited for the purpose of
1.25% per annum (2018: fixed assets of the PEL financing the repayment of existing long term loans of the PEL. The finance is
Three months KIBOR plus and personal repayable in fourteen equal quarterly installments commencing from December
1.25% per annum). guarantees of 2017.
the PEL.
Term Finance - 14,517 Three months KIBOR plus Charge over operating The finance was obtained from The Bank of Punjab for the purpose of financing
2.10% per annum. (2018: fixed assets of the PEL capital expenditure. The finance has been fully repaid during the year.
Three months KIBOR plus and personal
2.10% per annum). guarantees of
the PEL.
Term Finance 130,122 - Three months KIBOR plus Charge over operating The finance has been obtained from The Bank of Punjab for the purpose of
1.5% per annum. fixed assets of the PEL erection of new power transformer manufacturing facility. The finance is
and personal repayable in sixteen equal quarterly installments commencing from September
guarantees of 2020.
the PEL.
Term Finance 131,250 - Three months KIBOR plus 2% Charge over operating The finance has been obtained from Pak Oman InvestmentCompany Limited for
per annum. fixed assets of PEL and the purpose of financing capital expenditure. The finance is repayable in sixteen
personal guarantees of equal quarterly installments commencing from August 2019.
PEL.
Term Finance 500,000 - Three months KIBOR plus Charge over operating The finance has been obtained from Saudi Pak Industrial and Agricultural
2.25% per annum. fixed assets of PEL and Investment Company Limited for the purpose of refinancing capital expenditure.
personal guarantees of The finance is repayable in sixteen equal quarterly installments commencing
sponsoring directors of from October 2020.
PEL.
Demand Finance 315,769 568,384 Three months KIBOR plus 2% Charge over operating This represents demand finance facility sanctioned by National Bank of Pakistan
per annum (2018: Three fixed assets of the PEL against an upfront payment of Rs. 1,650 million against Private Placed Term Finance
months KIBOR plus 2% per and personal Certificates. The finance is repayable in sixteen equal quarterly installments
annum). guarantees of commencing from April 2017.
the PEL.
Demand Finance 407,643 679,406 Three months KIBOR plus Charge over present The finance has been obtained from National Bank of Pakistan for settlement of
2.25% per annum (2018: and future current assets long term finances obtained from MCB Bank (Ex. NIB Bank Limited). The finance
Three months KIBOR plus of the PEL and personal is repayable in twenty three equal quarterly installments commencing from
2.25% per annum). guarantees of September 2015.
PEL.
2,764,546 3,565,878
Total 4,407,403 4,315,878
Current portion presented under
current liabilities (2,245,249) (1,669,846)
2,162,154 2,646,032
Note 2019 2018

13 LEASE LIABILITIES
Present value of minimum lease payments 13.1 & 13.2 241,094 102,368
Current portion presented under current liabilities 13.1 & 13.2 (103,708) (42,590)
137,386 59,778
13.1 These represent vehicles and machinery acquired under finance lease arrangements. The leases are priced at rates ranging
from three months KIBOR to six months KIBOR plus 1.5% to 3% per annum (2018: six months to one year KIBOR plus 1.5% to
4.5% per annum). Lease rentals are payable monthly over a tenor ranging from 3 to 4 years. Under the terms of agreement,
taxes, repairs, replacements and insurance costs in respect of assets subject to finance lease are borne by the Group. The
Group also has the option to acquire these assets at the end of their respective lease terms by adjusting the deposit amount
against the residual value of the asset and intends to exercise the option.
13.2 The amount of future payments under the finance lease arrangements and the period in which these payments will become
due are as follows:
Note 2019 2018

Not later than one year 133,420 50,351

Later than one year but not later than five years 152,359 64,573
Total future minimum lease payments 285,779 114,924
Finance charge allocated to future periods (44,685) (12,556)
Present value of future minimum lease payments 241,094 102,368
Not later than one year 19 (103,708) (42,590)
14 WARRANTY OBLIGATIONS
This represents provision for warranties related to goods sold during the current and previous years. The Group expects to
settle majority of the liability over the next three years.
Note 2019 2018

Present value of warranty obligations 14.1 475,844 -

Current portion presented under current liabilities 17 (316,308) -
159,536 -
14.1 Movement in warranty obligations

As at beginning of the year - -
Impact of application of IFRS 15 14.1.1 443,392 -
As at beginning of the year - as adjusted 443,392 -
Amounts charged against the provision (270,809) -
Unwinding of the discount/changes in discount rate 13,427 -
Addition during the year 304,664 -
Excess provision reversed (14,830) -
As at end of the year 475,844 -
14.1.1 The Group has recognized the cummulative effect of initially applying IFRS 15 as adjustment to opening balance as at
January 01, 2019. Accordingly, the comparative information has not been restated.
Note 2019 2018

15 DEFERRED TAXATION
Deferred tax liability on taxable temporary differences 15.1 3,982,402 3,708,750

Deferred tax asset on deductible temporary differences 15.1 (865,416) (620,928)
3,116,986 3,087,822
15.1 Recognized deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
2019
As at Recognized in Recognized on As at
January 01 profit or loss balance sheet December 31
Rupees '000 Rupees '000 Rupees '000 Rupees '000
Deferred tax liabilities
Operating fixed assets - owned 3,678,339 241,572 26,753 3,946,664
Right-of-use assets 30,411 5,327 - 35,738
3,708,750 246,899 26,753 3,982,402
Deferred tax assets
Provisions (189,804) (119,450) - (309,254)
Unused tax losses and credits (423,967) (132,195) - (556,162)
Long term investments (7,157) 7,157 - -
(620,928) (244,488) - (865,416)
3,087,822 2,411 26,753 3,116,986
2018
Operating fixed assets - owned 3,351,793 (213,815) 540,361 3,678,339
Operating fixed assets - leased 27,223 3,188 - 30,411
3,379,016 (210,627) 540,361 3,708,750
Deferred tax assets
Provisions (215,828) 26,024 - (189,804)
Unused tax losses and credits (742,959) 318,992 - (423,967)
Long term investments (6,878) (279) - (7,157)
(965,665) 344,737 - (620,928)
2,413,351 134,110 540,361 3,087,822
15.2 Deferred tax arising from the timing differences pertaining to income taxable under normal provisions and as a separate
block of the Income Tax Ordinance, 2001 ['the Ordinance'] has been calculated at 29% and 15% (2018: 29% and 15%)
respectively of the timing differences based on tax rates notified by the Government of Pakistan for future tax years for such
income.
2019 2018
16 DEFERRED INCOME
As at beginning of the year 36,781 38,717

Recognized in profit or loss (1,839) (1,936)
As at end of the year 34,942 36,781
16.1 The UNIDO vide its contract number 2000/257 dated December 15, 2000, out of the multilateral fund for the implementation
of the Montreal Protocol, has given grant-in-aid to PEL for the purpose of phasing out ODS at the Refrigerator and Chest
Freezer Plant of PEL. The total grant-in-aid of USD 1,367,633 (Rs. 91,073,838) comprises the capital cost of the project
included in fixed assets amounting to USD 1,185,929 (Rs. 79,338,650) and grant recoverable in cash of USD 181,704 (Rs.
11,735,188) being the incremental operating cost for six months.
The grant received in cash amounting to Rs.11,735,188 was recognized as income in the year of receipt i.e. year ended June
30, 2001. The value of machinery received in grant was capitalized in year 2001 which started its operation in January 2003.
The grant amounting to Rs. 1.839 million (2018: Rs. 1.936 million) has been included in other income in proportion to
depreciation charged on related plant and machinery keeping in view the matching principle.
Note 2019 2018

17 TRADE AND OTHER PAYABLES
Trade creditors 468,541 414,995

Foreign bills payable 17.1 101,960 108,823
Accrued liabilities 145,488 182,301
Advances from customers 82,678 93,969
Employees' provident fund 6,774 11,247
Compensated absences 33,902 34,162
Workers' Profit Participation Fund 17.2 11,431 26,765
Workers' Welfare Fund 17.3 18,011 31,883
Other payables 18,531 18,705
1,203,624 922,850
17.1 Foreign bills payable are secured against bills of exchange accepted by the Group in favour of suppliers.
Note 2019 2018

17.2 Workers' Profit Participation Fund

Interest on fund utilized by the Group 41 1,516 4,940
Charged to profit or loss for the year 40 11,431 26,772
Paid during the year (28,281) (87,397)
17.2.1 Interest on funds utilized by the Group has been recognized at 13.59 % (2018: 9%) per annum.
Note 2019 2018

17.3 Workers' Welfare Fund

Paid/adjusted during the year (31,883) (73,897)
18 SHORT TERM BORROWINGS
Secured
Short term finances utilized under interest/markup/profit arrangements from
- Banking companies - Interest based arrangement 18.1 9,149,436 10,788,911
- Banking companies - Shariah compliant 18.1 1,756,054 1,854,937
- Non Banking Finance Companies ('NBFCs') 18.2 50,000 200,000
10,955,490 12,843,848
18.1 These facilities have been obtained from various banking companies for working capital requirements and carry
interest/markup/profit at rates ranging from 8.03% to 16.86% (2018: 7.11% to 12.3%) per annum. These facilities are secured
by pledge / hypothecation of raw material and components, work-in-process, finished goods, imported goods, machinery,
spare parts, charge over book debts and personal guarantees of the sponsoring directors of PEL. These facilities are
generally for a period of one year and renewed at the end of the period.
18.2 These facilities have been obtained from NBFCs for working capital requirements and carry interest/markup at rates ranging
from 11.60% to 12.05% (2018: 7.12% to 11.55%) per annum. These facilities are secured by charge over operating fixed
assets of the Company and personal guarantees of the directors of PEL.
18.3 The aggregate un-availed short term borrowing facilities as at the reporting date amounts to Rs. 9,566 million (2018: Rs.
10,464 million).
Note 2019 2018

19 CURRENT PORTION OF NON-CURRENT LIABILITIES
Redeemable capital 11 - 101,875

Liabilities against assets subject to finance lease 13 103,708 42,590
2,348,957 1,814,311
20 CONTINGENCIES AND COMMITMENTS
20.1 Contingencies
20.1.1 Various banking and insurance companies have issued guarantees on behalf of the Group as detailed below:
2019 2018
Tender bonds 416,312 488,314

Performance bonds 2,638,598 2,863,884
Advance guarantees 390,174 647,033
Custom guarantees 87,670 72,064
Foreign guarantees 91,598 80,682
20.1.2 The Group may have to indemnify its Directors for any losses that may arise due to personal guarantees given by them for
securing the debts of the Group, in case the Group defaults.
20.1.3 Section 5A of the income tax ordinance 2001, imposes tax rate at 5% of the accounting profit before tax of a public company
that does not distribute atleast 20% of its after tax profits as cash dividend with in six months of the end of the tax year.
No provision for income tax on undistributed profits, has been made as the matter is subjudice before Lahore High Court and
the management of the Group expects a favorable outcome.
20.1.4 The Finance Act 2015 introduced Super Tax for rehabilitation of temporarily displaced persons vide newly inserted section
4B to the Ordinance whereby, at rates ranging from 2% to 3% of the income equal to or exceeding Rs. 500 million. No
provision for Super Tax has been made for tax years 2015 to 2019 as the matter is subjudice before Honorable Supreme
Court. The Group is not in a position to state about the outcome of the matter, which is entirely dependent on the judgement
of aforesaid Apex Superior Court.
20.1.5 Appeal of the Group for the tax years 2009, 2016 and 2017 were decided by the Commissioner Inland Revenue (Appeals)
[‘CIR(A)’]. The issues involve in these appeals were mostly those concerning allowance/disallowance of various expenses.
Appeals have been filed by Group as well as the Department before the Appellate Tribunal which are pending. The
management expects to get adequate relief from the Appellate Authority and no additional tax liability is expected to arise.
20.1.6 The Group claimed adjustment for the minimum tax paid amounting to Rs. 150.925 million in tax year 2017 and Rs. 350.821
million in tax year 2015 aggregating to Rs. 550.751 million. Minimum tax of Rs. 725.575 million was paid despite losses
sustained in the Tax Years 2010 to 2015. The CIR(A) placing reliance on the decisions of the Appellate Tribunal and
judgement of the Lahore High Court has concluded that in view of the loses sustained the Appellant is entitled to tax credit in
terms of Section 113(2)(c) of the income tax ordinance 2001. The Department and Group has filed appeals before the
honorable tribunal which are pending.
2019 2018
20.2 Commitments
20.2.1 Commitments under irrevocable letters of credit for import of

stores, spare parts and raw material 682,628 2,012,639
20.2.2 Commitments under ijarah contracts
The aggregate amount of ujrah payments for ijarah financing and the period in which these payments will become due are as
follows:
2019 2018
- payments not later than one year 79,822 13,295

- payments later than one year 169,728 16,139
249,550 29,434
I 36
21 PROPERTY, PLANT AND EQUIPMENT
2019
COST / REVALUED AMOUNT DEPRECIATION Net book

As at As at As at As at value as at
January 01 Additions Revaluation Disposals Transfers December 31 Rate January 01 For the year Revaluation Adjustment December 31 December 31
Rupees '000 Rupees '000 Rupees '000 Rupees '000 Rupees '000 Rupees '000 % Rupees '000 Rupees '000 Rupees '000 Rupees '000 Rupees '000 Rupees '000
Assets owned by the Group

Land 1,035,256 - - - - 1,035,256 - - - - - - 1,035,256
Building 5,683,232 - - - 2,513,713 8,196,945 5 2,238,728 186,915 - - 2,425,643 5,771,302
Plant and machinery 21,808,411 416,092 - (313,602) 1,134,546 23,045,447 5 8,010,621 706,155 - 5,431 8,722,207 14,323,240
Office equipment and fixtures 196,956 13,984 - (52,723) - 158,217 10 85,180 11,881 - (35,371) 61,690 96,527
-
Computer hardware and allied items 126,414 28,397 - (6,015) - 148,796 30 102,750 19,746 - (5,959) 116,537 32,259
-
Vehicles 301,123 16,839 - (49,775) 34,914 303,101 20 153,633 30,719 - (6,869) 177,483 125,618
29,151,392 475,312 - (422,115) 3,683,173 32,887,762 10,590,912 955,416 - (42,768) 11,503,560 21,384,202
Right-of-use assets
Plant and machinery 161,364 187,180 - - (51,420) 297,124 5 6,434 7,011 - (6,734) 6,711 290,413
Vehicles 100,139 48,431 - - (34,914) 113,656 20 36,754 12,227 - (20,326) 28,655 85,001
261,503 235,611 - - (86,334) 410,780 43,188 19,238 - (27,060) 35,366 375,414
Capital work in progress
Building 2,433,970 701,024 - - (2,513,713) 621,281 - - - - - 621,281

Plant and machinery 744,250 897,039 - - (1,083,126) 558,163 - - - - - 558,163
3,178,220 1,598,063 - - (3,596,839) 1,179,444 - - - - - 1,179,444
32,591,115 2,308,986 - (422,115) - 34,477,986 10,634,100 974,654 - (69,828) 11,538,926 22,939,060

2018
Assets owned by the Group

Land 552,488 - 482,768 - - 1,035,256 - - - - - - 1,035,256
Building 4,520,323 - 1,162,909 - - 5,683,232 5 1,636,443 144,194 458,091 - 2,238,728 3,444,504
Plant and machinery 18,543,220 391,790 2,936,118 (114,785) 52,068 21,808,411 5 6,308,542 614,754 1,078,489 8,836 8,010,621 13,797,790
Vehicles 309,313 18,583 - (45,906) 19,133 301,123 20 130,398 34,622 - (11,387) 153,633 147,490
24,280,830 457,499 4,581,795 (239,933) 71,201 29,151,392 8,304,298 822,134 1,536,580 (72,100) 10,590,912 18,560,480
Right-of-use assets
Vehicles 102,834 16,438 - - (19,133) 100,139 20 32,815 14,130 - (10,191) 36,754 63,385
206,322 126,382 - - (71,201) 261,503 43,568 18,767 - (19,147) 43,188 218,315
24,487,152 583,881 4,581,795 (239,933) - 29,412,895 8,347,866 840,901 1,536,580 (91,247) 10,634,100 18,778,795

Building 1,010,883 1,423,087 - - - 2,433,970 - - - - - 2,433,970
Plant and machinery 255,544 488,706 - - - 744,250 - - - - - 744,250
1,266,427 1,911,793 - - - 3,178,220 - - - - - 3,178,220
25,753,579 2,495,674 4,581,795 (239,933) - 32,591,115 8,347,866 840,901 1,536,580 (91,247) 10,634,100 21,957,015
21.1 Property, plant and equipment includes fully depreciated assets of Rs. 70.2 million (2018: Rs. 64.54 million) which are still in use of the Group.
21.2 Land is located at Mouza Kot Islampura, 34 - K.M, Ferozepur Road, Lahore with a total area of 511 Kanals (2018: 511 Kanals) and at 14 - K.M, Ferozepur Road, Lahore and Plot # 302-303,
Gadoon Industrail Area, Gadoon Amazai with a total area of 322 Kanals 15 Marla (2018: 322 Kanals 15 Marla).
Annual Report 2019
I 37
21.3 Disposal of operating fixed assets

2019
Accumulated Net Disposal Gain/(loss) Mode of
Particulars Cost depreciation book value proceeds on disposal disposal Particulars of buyer
Plant and machinery
Lamination Cutting Line TBA300 131,237 - 131,237 131,237 - Sales and Lease Back Orix Modaraba, Lahore
Servo Hydro Mechanical Clamping 175,119 1,303 173,816 187,180 13,364 Sales and Lease Back Sindh Leasing Company
Step Lap Lamination DTR 7,246 - 7,246 - (7,246) Sales and Lease Back Orix Modaraba, Lahore
313,602 1,303 312,299 318,417 6,118
Office equipment and fixtures
Table and chairs 31,975 21,914 10,061 199 (9,862) Negotiation Scrap sale
Mobile sets 1,018 280 738 - (738) Negotiation Scrap sale
Miscellaneous office items 18,561 12,349 6,212 2,875 (3,337) Negotiation Scrap sale
Assets having net book value
less than Rs. 500,000 each 1,169 828 341 156 (185) Negotiation Scrap sale
52,723 35,371 17,352 3,230 (14,122)
Computer hardware and allied items
less than Rs. 500,000 each 6,015 5,959 56 62 6 Negotiation Scrap sale
Vehicles
Audi A6 11,910 7,082 4,828 10,500 5,672 Negotiation Synergy Technology, Lahore.
Toyota Fortuner 6,229 2,126 4,103 3,229 (874) As Per Company Policy Amer Hamza (employee), Lahore.
Suzuki Jimny 2,293 1,579 714 1,409 695 Insurance Claim Adamjee Insurance Company Limited, Lahore.
Honda Civic 2,254 929 1,325 1,674 349 As Per Company Policy Muhammad Raza (employee), Lahore.
Honda Civic 2,113 986 1,127 1,319 192 As Per Company Policy Qazi Nisar (employee), Lahore.
Toyota Corolla 1,992 232 1,760 2,356 596 Negotiation First Habib Modaraba, Lahore.
Toyota Corolla 1,735 1,232 503 465 (38) As Per Company Policy Liaqat Ali (employee), Lahore.
Toyota Corolla 1,731 1,177 554 477 (77) As Per Company Policy Rehmat ali (employee), Lahore.
Toyota Corolla 1,543 636 907 1,198 291 As Per Company Policy Rafique Ahmed (employee), Lahore.
Suzuki Cultus 1,085 302 783 1,300 517 As Per Company Policy Gulzaib (employee), Lahore.
Suzuki Cultus 981 434 547 587 40 As Per Company Policy Asif Ilyas (employee), Lahore.
less than Rs. 500,000 each 15,909 10,480 5,429 8,958 3,529 As Per Company Policy Various employes
49,775 27,195 22,580 33,472 10,892
422,115 69,828 352,287 355,181 2,894
2018

Plant and Machinery

Thermo-Plastic Injection Molding 28,705 120 28,585 27,000 (1,585) Sale & Lease Back Askari Leasing
Thermo-Plastic Injection Molding 56,292 - 56,292 54,944 (1,348) Sale & Lease Back Askari Leasing
Servo Energy Saving System 8,212 - 8,212 8,000 (212) Sale & Lease Back Askari Leasing
JWS-130 ABS Sheet Extrusion
Line 21,577 - 21,577 20,000 (1,577) Sale & Lease Back Askari Leasing
114,785 120 114,666 109,944 (4,722)

Table and chairs 5,246 3,995 1,251 256 (995) Negotiation Various individuals
Air conditioners 6,719 5,268 1,451 328 (1,123) Negotiation Various individuals
Mobile sets 566 299 267 - (267) As Per Company Policy Various individuals
Miscellaneous office items 39,975 34,968 5,007 1,949 (3,058) Negotiation Various individuals
52,506 44,530 7,976 2,533 (5,443)
Computer and printers 10,961 10,961 - 512 512 Negotiation Various individuals
Laptops 4,441 2,792 1,649 2,901 1,252 Negotiation Various individuals
Mobile sets 427 359 68 39 (29) As Per Company Policy Various individuals
Allied items 10,907 10,907 - 382 382 Negotiation Various individuals
26,736 25,019 1,717 3,834 2,117
Vehicles
Audi A3 4,060 460 3,600 4,750 1,150 As Per Company Policy Mehdi Hassan (employee), Lahore.
BMW X1 5,217 591 4,626 5,737 1,111 As Per Company Policy Mehdi Hassan (employee), Lahore.
Honda City 1,494 971 523 747 224 As Per Company Policy Atif Imtiaz (employee), Lahore.
Honda Civic 2,439 1,505 934 642 (292) As Per Company Policy Waseem Ishaq (employee), Lahore.
Honda Civic 2,489 1,460 1,029 539 (490) As Per Company Policy Iftikhar Ahmed (employee), Lahore.
Honda Civic 2,469 1,448 1,021 560 (461) As Per Company Policy Tariq Irani (employee), Lahore.
Honda Civic 2,448 1,277 1,171 470 (701) As Per Company Policy Javed A Khan (employee), Rawalpindi.
Honda Civic 2,164 793 1,371 1,456 85 As Per Company Policy Atif Ali (employee), Lahore.
Honda Civic 2,521 892 1,629 328 (1,301) As Per Company Policy Sadiq Munir (employee), Lahore.
Porsche 1,202 439 763 3,000 2,237 Negotiation Performance Automotive, Lahore.
Suzuki Mehran 578 10 568 222 (346) As Per Company Policy Shees Butt (employee), Faisalabad.
Toyota Corolla 1,731 1,015 716 600 (116) As Per Company Policy Javed Iqbal (employee), Lahore.
Toyota Corolla 1,771 924 847 831 (16) As Per Company Policy Rizwan Cheema (employee), Lahore.
Assets having net book value less
than Rs. 500,000 each 15,323 9,793 5,530 10,039 4,509 As Per Company Policy Various employees
45,906 21,578 24,328 29,921 5,593
239,933 91,247 148,686 146,230 (2,456)
Note 2019 2018

21.4 The depreciation charge for the year has been allocated as follows:
Cost of sales 36 910,818 772,241

Administrative and general expenses 39 63,836 68,660
974,654 840,901
21.5 Revaluation of property, plant and equipment
Most recent valuation of land, building and plant and machinery was carried out by an independent valuer, Asif Associates
(Private) Limited, on December 31, 2018 and was incorporated in the financial statements for the year ended December 31,
2018. For basis of valuation and other fair value measurement disclosures refer to note 50.
Had there been no revaluation, the cost, accumulated depreciation and net book value of revalued items would have been as
follows:
2019
Accumulated Net
Cost depreciation book value
Land 189,184 - 189,184

Building 5,816,039 1,434,921 4,381,118
Plant and machinery 12,135,143 3,494,328 8,640,815
2018
Accumulated Net
Land 189,184 - 189,184

Building 3,302,326 1,321,029 1,981,297
21.5.1 As per most recent valuation, forced sale values of land, building and plant and machinery are as follows:
Rupees '000
Land 919,800
Building 2,927,828
Plant and machinery 11,998,078
15,845,706
22 INTANGIBLE ASSETS
Note 2019
Cost Accumulated Amortization Net book
As at As at As at For the As at value as at
January 01 Additions December 31 January 01 period December 31 December 31
Rupees '000' Rupees '000' Rupees '000' Rupees '000' Rupees '000' Rupees '000' Rupees '000'
Technology transfer agreement 22.1 117,054 - 117,054 42,888 3,708 46,596 70,458
Goodwill 22.2 312,341 - 312,341 91,859 - 91,859 220,482
Software 22.3 17,006 3,802 20,808 6,911 4,273 11,184 9,624
Enterprise Resource Planning system 22.4 31,675 - 31,675 23,066 2,841 25,907 5,768
478,076 3,802 481,878 164,724 10,822 175,546 306,332
2018
Goodwill 22.2 312,341 - 312,341 91,859 - 91,859 220,482
Software 22.3 8,976 8,030 17,006 4,853 2,058 6,911 10,095
470,046 8,030 478,076 154,521 10,203 164,724 313,352
22.1 The Group has obtained technology of single phase meters, three phase digital meters and also of power transformers from
different foreign companies. These are amortized on the same rate as of the depreciation of the relevant plant.
22.2 Goodwill represents the difference between the cost of the acquisition (fair value of consideration paid) and the fair value of
the net identifiable assets acquired at the time of acquisition of PEL Appliances Limited and PEL Daewoo Electronics Limited
by the Group. In view of cancelation of LG license, goodwill related to PEL Daewoo Electronics Limited was fully impaired by
providing impairment loss of Rs. 140.569 million in December 31, 2011. The carrying value represents goodwill related to
PEL Appliances Limited for which there is no indication of impairment.
22.3 The Group has acquired different software for its business purpose. These are being amortized at 33% per annum on
reducing balance method.
22.4 These are being amortized at 33% per annum on reducing balance method.
23 LONG TERM INVESTMENTS
This represent investments in ordinary shares of Kohinoor Power Company Limited, an associate. The investment has been
accounted for using equity method. The particulars of investment are as follows:
2019 2018
2,910,600 (2018: 2,910,600) ordinary shares of Rs. 10 each

Percentage of ownership interest 23.10% 23.10%
2019 2018
Cost of investment 54,701 54,701

Share of post acquisition loss - net of dividend received (11,663) (8,857)
43,038 45,844
Accumulated impairment (37,275) (38,859)
5,763 6,985
23.1 Extracts of financial statements of associated company
The assets and liabilities of Kohinoor Power Company Limited as at the reporting date and related revenue and profit for the
year then ended based on the un-audited financial statements are as follows:
Note 2019 2018

Assets 147,479 159,384

Liabilities 3,654 3,411
Revenue 7,831 4,473
Loss for the year 12,147 10,630
Share of loss 2,806 2,456
Market value per share (Rupees) 1.98 2.40
24 LONG TERM DEPOSITS
Financial institutions 24.1 27,601 7,858

Utility companies and regulatory authorities 24.2 167,734 42,351
Customers 24.3 164,845 315,748
360,180 365,957
24.1 These represent security deposits against Ijarah financing.
24.2 These have been deposited with various utility companies and regulatory authorities. These are classified as 'financial assets
at amortized cost' under IFRS 9 which are required to be carried at amortized cost. However, these, being held for an
indefinite period with no fixed maturity date, are carried at cost.
24.3 These have been deposited with various customers against EPC and other contracts and are refundable on completion of
projects in accordance with term of contracts. These are classified as 'financial assets at amortized cost' under IFRS 9 which
are required to be carried at amortized cost. However, due to uncertainties regarding dates of refund of these deposits, these
have been carried at cost.
25 LONG TERM ADVANCES
Note 2019 2018

Face value of advances 2,114,913 1,963,211

Less: unamortized notional interest 25.2 (294,611) (230,402)
1,820,302 1,732,809
Current portion presented under current assets 30 (589,497) (623,715)
1,230,805 1,109,094
25.1 These advances have been made to various customers for renovation of show rooms. These are classified as 'fianancial assets
at amortized cost' under IFRS 9 which are measured at amortized cost determined using a discount rate of 13.56% (2018:
10.72%).
Note 2019 2018

25.2 Unamortized notional interest

Recognized during the year 38.2 189,123 184,408
Amortization for the year (124,914) (80,374)
26 STORES, SPARES AND LOOSE TOOLS
Stores 279,668 290,865

Spares 455,386 452,987
Loose tools 132,117 134,117
867,171 877,969
Impairment for slow moving and obsolete items (18,824) (18,824)
848,347 859,145
26.1 There are no spare parts held exclusively for capitalization as at the reporting date.
27 STOCK IN TRADE
Raw material
- in stores 3,992,761 5,130,566
- in transit 1,315,147 2,110,833
Write-down to net realisable value (39,060) (37,037)
5,268,848 7,204,362
Work in process 656,835 758,928
Finished goods 1,875,761 2,829,889
1,867,885 2,822,867
7,793,568 10,786,157
27.1 Stock in trade valued at Rs. 1,849 million (2018: Rs. 1,754 million) is pledged as security with providers of debt finances.
Note 2019 2018

28 TRADE DEBTS
Gross amount due

- against sale of goods 8,723,451 7,090,620
- against execution of construction contracts 28.1 1,206,697 3,054,705
9,930,148 10,145,325
Impairment allowance for expected credit losses 28.2 (612,535) (587,301)
9,317,613 9,558,024
28.1 These include retention money for construction contracts in progress amounting to Rs. 551.251 million (2018: Rs. 617.648
million) held by the customers in accordance with contract terms.
Note 2019 2018

28.2 Movement in impairment allowance for expected credit losses

Recognized during the year 39 25,234 10,330
29 CONSTRUCTION WORK IN PROGRESS
This represents unbilled construction work in progress.
Note 2019 2018

30 SHORT TERM ADVANCES
Advances to suppliers and contractors

Gross amount due 620,050 622,554
Impairment allowance for doubtful advances (32,730) (32,730)
587,320 589,824
Advances to employees
Gross amount due 30.1 508,286 451,130
506,837 449,681
Advances to customers 25 589,497 623,715
1,683,654 1,663,220
30.1 These include advances for

- purchases 225,807 230,008
- expenses 125,672 105,524
- traveling 155,358 114,149
506,837 449,681
31 SHORT TERM DEPOSITS AND PREPAYMENTS
Security deposits
Impairment allowance for expected credit losses (5,379) (5,379)
330,852 308,133
Margin deposits 207,323 421,671
Prepayments 46,211 52,865
Sales tax refundable 979,702 -
Letters of credit 327,510 322,510
1,891,598 1,105,179
32 SHORT TERM INVESTMENTS
These represent investments in listed equity securities classified as 'financial assets at fair value through profit or loss'. The
details are as follows:
Note 2019 2018

Standard Chartered Bank (Pakistan) Limited

915,070 (2018: 915,070) ordinary shares of Rs. 10 each
Market value: Rs. 23.60 (2018: Rs. 24.12) per share
Changes in fair value 37 & 40 (475) 247
33 ADVANCE INCOME TAX/INCOME TAX REFUNDABLE
Advance income tax/income tax refundable 2,299,396 2,129,147

Provision for taxation 42 - (143,362)
2,299,396 1,985,785
34 CASH AND BANK BALANCES
Cash in hand 11,891 16,818

Cash at banks 502,016 454,440
513,907 471,258
35 NET REVENUE
This represents revenue recognized from contracts with customers
Sale of goods
- local 35,649,614 35,201,408
- exports 606,054 888,957
36,255,668 36,090,365
Construction contracts 1,365,601 2,899,882
37,621,269 38,990,247
Sales tax and excise duty (4,035,952) (3,710,466)

Trade discounts (5,685,399) (6,834,470)
(9,721,351) (10,544,936)
27,899,918 28,445,311
36 COST OF SALES
Finished goods at the beginning of the year 2,829,889 2,121,128

Cost of goods manufactured 36.1 19,328,681 19,723,220
Finished goods at the end of the year (1,875,761) (2,829,889)
Cost of goods sold 20,180,881 19,014,459
Cost of construction contracts 1,146,012 2,433,581
21,326,893 21,448,040
Note 2019 2018

36.1 Cost of goods manufactured
Work-in-process at beginning of the year 758,928 848,453
Raw material and components consumed 16,289,944 16,936,321
Direct wages 859,985 799,473
Factory overheads:
- salaries, wages and benefits 460,306 422,952
- traveling and conveyance 29,023 27,930
- electricity, gas and water 355,619 339,186
- repairs and maintenance 72,215 68,323
- vehicles running and maintenance 31,406 30,060
- insurance 36,990 35,855
- depreciation 21.4 910,818 772,241
- amortization of intangible assets 22 10,822 10,203
- provision for obsolete and slow moving stock 26 & 27 2,877 2,522
- carriage and freight 26,022 23,742
- erection and testing 125,106 151,605
- other factory overheads 15,455 13,282
2,076,659 1,897,901
19,985,516 20,482,148
Work-in-process at end of the year (656,835) (758,928)
19,328,681 19,723,220
36.2 These include charge in respect of employees retirement benefits amounting to Rs. 37.005 million (2018: Rs. 39.401 million).
Note 2019 2018

37 OTHER INCOME
Gain on financial instruments

Reversal of impairment loss on long term investments 23 1,584 593
Changes in fair value of short term investments at fair value through profit and loss 32 - 247
Gain on sale and lease back activities 13,364 -
Gain on disposal of property, plant and equipment - 2,267
14,948 3,107
Other income
Amortization of grant-in-aid 16 1,839 1,936
Others 17,100 12,934
18,939 14,870
33,887 17,977
38 DISTRIBUTION COST
Salaries and benefits 38.1 494,326 468,433

Traveling and conveyance 86,346 89,541
Rent, rates and taxes 101,432 111,552
Electricity, gas, fuel and water 23,977 23,116
Repairs and maintenance 8,277 8,555
Vehicles running and maintenance 56,821 59,421
Printing and stationery 11,030 11,680
Postage, telegrams and telephones 24,183 25,815
Entertainment and staff welfare 37,278 38,007
Advertisement and sales promotion 295,472 462,122
Insurance 17,214 17,940
Freight and forwarding 381,941 451,391
Contract and tendering 1,663 1,981
Warranty period services 303,261 317,342
Others 38.2 113,159 120,549
1,956,380 2,207,445
38.2 These include notional interest expense amounting to Rs. 21.745 million (2018: Rs. 104.034 million) on long term advances.
(See note 25.2).
Note 2019 2018

39 ADMINISTRATIVE AND GENERAL EXPENSES

Ujrah payments 40,229 46,788
Legal and professional 80,241 67,721
Electricity, gas and water 40,962 36,223
Auditor's remuneration 39.2 5,900 5,877
Printing, stationery and periodicals 5,334 5,016
Advertisement 7,168 12,693
Insurance 15,987 15,105
Provision for expected credit losses 28.2 25,234 10,330
Depreciation 21.4 63,836 68,660
Others 51,969 25,527
1,229,762 1,073,652
Note 2019 2018

39.2 Auditor's remuneration

Annual statutory audit 4,300 4,300
Limited scope review 800 800
Review report under corporate governance 500 500
Out of pocket expenses 300 277
5,900 5,877
40 OTHER EXPENSES
Loss on financial instruments

Changes in fair value of short term investments at fair value through profit and loss 32 475 -
Loss on disposal of property, plant and equipment 10,470 -
Loss on sale and lease back activities - 4,721
10,945 4,721
Others
Donations 4,655 7,674
Others 11,830 -
45,927 66,329
56,872 71,050
Note 2019 2018

41 FINANCE COST
Interest/markup/profit on borrowings:
redeemable capital 1,958 19,655
long term finances 650,503 443,864
lease liabilities 25,223 6,362
short term borrowings 1,547,712 1,168,730
2,225,396 1,638,611
Interest on Workers' Profit Participation Fund 17.2 1,516 4,940
Bank charges and commission 253,176 459,792
2,480,088 2,103,343
42 TAXATION
Provision for taxation

for current year 33 & 42.1 - 143,362
for prior year - (91,639)
- 51,723
Deferred taxation
adjustment attributable to origination and reversal of temporary differences 2,411 162,516
adjustment attributable to changes in tax rates - (28,406)
15.1 2,411 134,110
2,411 185,833
42.1 Provision for current tax has been made in accordance with section 113 and 154 (2018: section 18 and 154) of the Income Tax
Ordinance, 2001 ['the Ordinance']. Provision for the current year is nil due to utilization of available tax credits. No
reconciliation between applicable tax rate and the average effective tax rate has been presented accordingly.
42.2 Reconciliation between average effective tax rate and applicable tax rate for the year ended December 31, 2018.
Unit 2018
Profit before taxation Rupees 1,557,302
Provision for taxation Rupees 185,833
Average effective tax rate % 11.93
Tax effects of:

Income taxable under final tax regime % (3.74)
Admissible deductions, losses and tax credits % 25.39
Deferred taxation % (8.61)
Others % 4.03
Applicable tax rate % 29.00
42.3 Assessments upto Tax Year 2019 have been finalized under the relevant provisions of the Ordinance execpt for Tax Year 2009,
2016 and 2017. See note 20.1.5.
Unit 2019 2018
43 EARNINGS PER SHARE - BASIC AND DILUTED
Earnings
Profit after taxation Rupees '000' 878,593 1,371,469
Preference dividend for the year Rupees '000' (42,710) (42,710)
Profit attributable to ordinary shareholders Rupees '000' 835,883 1,328,759
Shares
Weighted average number of ordinary shares outstanding during the year No. of shares 497,681,485 497,681,485
Earnings per share

Basic and diluted Rupees 1.68 2.67
43.1 As per the opinion of the Group's legal counsel, the provision for dividend at 9.5% per annum, under the original terms of
issue of preference shares, will prevail on account of preference dividend.
43.2 There is no diluting effect on the basic earnings per share of the Group as the conversion rights pertaining to outstanding
preference shares, under the original terms of issue, are no longer exercisable.
2019 2018
44 CASH GENERATED FROM OPERATIONS

Adjustments for non-cash and other items
Interest/markup/profit on borrowings 2,225,396 1,638,611
Notional interest 64,209 104,034
Loss/(gain) on disposal of property, plant and equipment 10,470 (2,267)
Amortization of grant-in-aid (1,839) (1,936)
Amortization of intangible assets 10,822 10,203
Share of loss of associate 2,806 2,456
Reversal of impairment loss on long term investments (1,584) (593)
Changes in fair value of financial assets at fair value through profit or loss 475 (247)
Impairment allowance for expected credit losses 25,234 10,330
Impairmrnt allowance for obsolete and slow moving stock 2,877 2,522
(Gain)/loss on sale and lease back activities (13,364) 4,721
Depreciation 974,654 840,901
3,300,156 2,608,735
4,181,160 4,166,037
Changes in working capital
Stores, spares and loose tools 10,798 (112,737)
Stock in trade 2,989,712 (2,638,831)
Trade debts 215,177 535,563
Contract assets (161,774) (142,550)
Short term advances (54,652) (193,679)
Short term deposits and prepayments (786,419) 4,053
Other receivables (40,892) (49,872)
Long term advances (151,702) (416,285)
Long term deposits 5,777 5,979
Warranty obligation 32,452 -
Trade and other payables (35,534) (57,180)
2,022,943 (3,065,539)
Cash generated from operations 6,204,103 1,100,498
Note 2019 2018

45 CASH AND CASH EQUIVALENTS

513,907 471,258
46 TRANSACTIONS AND BALANCES WITH RELATED PARTIES
Related parties from the Group's perspective comprise associated companies and undertakings, key management
personnel and post employment benefit plan. Key management personnel are those persons having authority and
responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, and includes the Chief
Executive and Directors of the Parent Company. The details of Group's related parties, with whom the Group had transactions
during the year or has balances outstanding as at the reporting date are as follows:
Name of related party Nature of relationship Basis of relationship Aggregate

%age of
shareholding
in the
Company
Employees Provident Fund Trust Provident Fund Trust Contribution to providend fund 0.00%
PEL Marketing (Private) Limited Subsidiary Investment 0.00%
Kohinoor Power Company Limited Associated company Investment 0.00%
Red Comminication Arts
(Private) Limited Associated company Common directorship 0.00%
Mr. M. Murad Saigol Key management personnel Chief executive 0.0025%
Mr. M. Zeid Yousuf Saigol Key management personnel Director 2.9637%
Mr. Syed Manzar Hassan Key management personnel Director 0.0004%
Transactions with key management personnel are limited to payment of short term and post employment benefits, advances
against issue of ordinary shares and dividend payments. Transactions with post employment benefit plan are limited to
employer's contribution made. The Group in the normal course of business carries out various transactions with its
associated companies 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 and balances with related parties are as follows:
Note 2019 2018

46.1 Transactions with related parties
Nature of relationship Nature of transactions

Provident Fund Trust Contribution for the year 79,743 71,646
Associated companies and undertakings Purchase of services 76,743 50,304
Key management personnel Short term employee benefits 52 47,974 50,125

Post employment benefits 52 1,760 1,600
Directors and sponsors Dividend paid 3,598 295,933
46.2 Balances with related parties
Nature of relationship Nature of balances

Provident Fund Trust Contribution payable 6,774 11,247
Key management personnel Short term employee benefits payable 1,356 2,805
Associated companies and undertakings Purchase of services 11,921 -

47 CONTRACTS WITH CUSTOMERS
47.1 Disaggregation of revenue
The table below provides disaggregation of revenue and its relationship with revenue information disclosed for the Group's
Operating Segments presented in note 53.
Power Division Appliances Division Total

2019 2018 2019 2018 2019 2018
Rupees '000' Rupees '000' Rupees '000' Rupees '000' Rupees '000' Rupees '000'
Product/service lines
Home appliances - - 27,787,338 27,275,501 27,787,338 27,275,501
Electrical capital goods 8,468,330 8,814,864 - - 8,468,330 8,814,864
Construction contracts 1,365,601 2,899,882 - - 1,365,601 2,899,882
9,833,931 11,714,746 27,787,338 27,275,501 37,621,269 38,990,247
Timing of revenue
recognition
Products transferred at a
point in time 8,468,330 8,814,864 27,787,338 27,275,501 36,255,668 36,090,365
Products/services
transferred over time 1,365,601 2,899,882 - - 1,365,601 2,899,882
9,833,931 11,714,746 27,787,338 27,275,501 37,621,269 38,990,247
47.2 Contract balances
The information about receivables, contract assets and contract liabilties from contracts with customers is as follows:
Nature of balance Presented in financial statements as Note 2019 2018

Rupees '000' Rupees '000'
Receivables Trade debts 28 9,317,613 9,558,024

Contract assets Construction work in progress 29 1,697,509 1,535,735
Contract liabilties Advances from customers 17 82,678 93,969
11,097,800 11,187,728
47.3 Changes in contract assets and liabilities
Significant changes in contract assets and contract liabilities during the year
are as follows:
Contract Contract
assets liabilities
As at beginning of the year 1,535,735 93,969

Revenue recognized against contract liabilty as at beginning of the year - (93,969)
Net increase due to cash received in excess of revenue recognized - 82,678
Transfers from contracts assets recognized at the beginning of the year to receivables (1,535,735) -
Net increases as a result of contract activity 1,697,509 -
As at end of the year 1,697,509 82,678
48 FINANCIAL INSTRUMENTS
The carrying amounts of the Company's financial instruments by class and category are as follows:
2019 2018
48.1 Financial assets
Cash in hand 11,891 16,818
Financial assets at amortized cost

Long term advances 1,820,302 1,732,809
Trade debts 9,317,613 9,558,024
Short term deposits 207,323 421,671
Cash at banks 502,016 454,440
12,179,833 12,525,043
Financial assets mandatorily measured at fair value
through profit or loss
Short term investments 21,596 22,071
12,213,320 12,563,932
48.2 Financial liabilities
Financial liabilities at amortized cost

Redeemable capital - 101,875
Long term finances 4,407,403 4,315,878
Leased liabilities 241,094 102,368
Foreign bills payable 101,960 108,823
Short term borrowings 10,955,490 12,843,848
16,883,147 18,543,978
49 FINANCIAL RISK EXPOSURE AND MANAGEMENT
The Group’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including currency risk,
interest rate risk and price risk). These risks affect revenues, expenses and assets and liabilities of the Group.
The Board of Directors has the overall responsibility for establishment and oversight of risk management framework. The
Board of Directors has developed a risk policy that sets out fundamentals of risk management framework. The risk policy
focuses on unpredictability of financial markets, the Group's exposure to risk of adverse effects thereof and objectives,
policies and processes for measuring and managing such risks. The management team of the Group is responsible for
administering and monitoring the financial and operational financial risk management throughout the Group in accordance
with the risk management framework.
The Group’s exposure to financial risks, the way these risks affect the financial position and performance, and forecast
transactions of the Group and the manner in which such risks are managed is as follows:
49.1 Credit risk
Credit risk is the risk of financial loss to the Group, if the counterparty to a financial instrument fails to meet its obligations.
49.1.1 Credit risk management practices
In order to minimise credit risk, the Group has adopted a policy of only dealing with creditworthty counterparties and limiting
significant exposure to any single counterparty. The Group only transacts with counterparties that have reasonably high
external credit ratings. Where an external rating is not available, the Group uses an internal credit risk grading mechanism.
Particularly for customers, a dedicated team responsible for the determination of credit limits uses a credit scoring system to
assess the potential as well as existing customers' credit quality and assigns or updates credit limits accordingly. The ageing
profile of trade debts and individually significant balances, along with collection activities are reviewed on a regular basis.
High risk customers are identified and restrictions are placed on future trading, including suspending future shipments and
administering dispatches on a prepayment basis or confirmed letters of credit.
The Group reviews the recoverable amount of each financial asset on an individual basis at each reporting date to ensure that
adequate loss allowance is made in accordnace with the assessment of credit risk for each financial asset.
The Group considers a financial asset to have low credit risk when the asset has reasonably high external credit rating or if an
external rating is not available, the asset has an internal rating of ‘performing’. Performing means that the counterparty has no
past due amounts or otherwise there is no significant increase in credit risk if the amounts are past due in the normal course of
business based on history with the counterparty.
In assessing whether the credit risk on a financial asset has increased significantly since initial recognition, the Group
compares the risk of a default occurring on the financial asset at the reporting date with the risk of a default occurring on the
financial asset at the date of initial recognition. In making this assessment, the Group considers both quantitative and
qualitative information that is reasonable and supportable, including historical experience and forward-looking information
that is available without undue cost or effort. Irrespective of the outcome of the above assessment, the Group presumes that
the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more
than 30 days past due, unless the Group has reasonable and supportable information that demonstrates otherwise. This is
usually the case with various customers of the Group where the Group has long standing business relationship with these
customers and any amounts that are past due by more than 30 days in the normal course of business are considered
'performing' based on history with the customers. Therefore despite the foregoing, the Group considers some past due
trade debts to have low credit risk where the customer has a good history of meeting its contractual cash flow obligations and
is expected to maintain the same in future.
The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in
credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit
risk.
The Group considers 'default' to have occurred when the financial asset is credit-impaired. A financial asset is ocnsidered to
be credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that
financial asset have occurred.
The Group writes off a financial asset when there is information indicating that the counter-party is in severe financial
condition and there is no realistic prospect of recovery.
The Group's credit risk grading framework comprises the following categories:
Category Description Basis for recognizing ECL

Performing The counterparty has low credit risk Trade debts: Lifetime ECL
Other assets: Twelve month ECL
Doubtful Credit risk has increased significantly since initial recognition Lifetime ECL
In default There is evidence indicating the assets is credit-impaired Lifetime ECL
Write-off There is no realistic prospect of recovery Amount is written-off
49.1.2 Exposure to credit risk
Credit risk principally arises from debt instruments held by the Group as at the reporting date. The maximum exposure to
credit risk as at the reporting date is as follows:
Note 2019 2018

Long term advances 25 1,230,805 1,109,094
Trade debts 28 9,930,148 10,145,325
Short term deposits 31 207,323 421,671
Bank balances 34 502,016 454,440
12,202,871 12,488,629
49.1.3 Credit quality and impairment
Credit quality of financial assets is assessed by reference to external credit ratings, where available, or to internal credit risk
grading. The credit quality of the Group’s financial assets exposed to credit risk is as follows:
External Internal credit 12-month or Gross carrying Loss

Note rating risk grading life-time ECL amount allowance
Long term deposits 24 N/A Performing 12-month 332,579 -
ECL
Long term advances 25 N/A Performing 12-month 1,230,805 -
ECL
Trade debts 28 N/A Performing Lifetime ECL 9,342,847 25,234
N/A Doubtful Lifetime ECL 587,301 587,301
9,930,148 612,535
Short term deposits 31 N/A Performing 12-month 207,323 -
ECL
Bank balances 34 A3 - A1+, P 2 N/A 12-month 502,016 -
ECL
12,202,871 612,535
(a) Long term deposits
These include deposits placed with various utility companies and regulatory authorities and those place with customers
of construction contracts. Deposits with utility companies and regulatory authorities are substantially perpetual in
nature and therefore no credit risk is associated there with. Deposits with customers are against construction contracts
with government departments placed in accordance with the terms of tender documents and do not carry any
significant credit risk. Accordingly no loss allowance has been made.
(b) Long term advances
These advances have been extended to the customers who have long standing business relationship and excellent
credit history with Group. No credit risk is associated with these advances and accordingly no loss allowance has been
made.
(c) Trade debts
For trade debts, the Group has applied the simplified approach in IFRS 9 to measure the loss allowance at lifetime ECL.
The Group determines the expected credit losses on trade debts by using internal credit risk grading. As at the
reporting date, trade debts amounting to Rs 587.301 million and Rs. 612.535 million are considered 'doubtful' and 'in-
defult' receptively. Other trade debts are considered 'performing' including those past due as there is no significant
increase in credit risk in respect of these receivables since initial recognition. The ageing analysis of trade receivables as
at the reporting date is as follows:
2019 2018
Neither past due nor impaired 7,576,534 7,165,613

Past due by upto 30 days 1,095,453 1,172,774
Past due by 31 days to 180 days 665,626 1,219,637
Past due by 180 days or more 592,535 587,301
9,930,148 10,145,325
(d) Short term deposits
These are placed with financial institutions with reasonably high credit ratings and therefore no credit loss is expected.
Accordingly no loss allowance has been made.
(e) Bank balances
The bankers of the Group have reasonably high credit ratings as determined by various indpendent credit rating
agencies. Due to long standing business relationships with these counterparties and considering their strong financial
standing, management does not expect any credit loss.
49.1.4 Concentrations of credit risk
There are no significant concentrations of credit risk, except for trade debts. The Group's one (2018: two) significant
customer account for Rs. 325.405 million (2018: Rs. 930.603 million) of trade debts as at the reporting date, apart from which,
exposure to any single customer does not exceed 10% (2018: 10%) of trade debts as at the reporting date. These significant
customers have long standing business relationships with the Group and have a good payment record and accordingly non-
performance by these customers is not expected.
49.1.5 Collateral held
The Group does not hold any collateral to secure its financial assets.
49.1.6 Changes in impairment allowance for expected credit losses
The changes in impairment allowance for expected credit losses have been presented in note 28.
49.2 Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
49.2.1 Liquidity risk management
The Group's approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to
meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group's reputation. The Group monitors cash flow requirements and produces cash flow projections for the
short and long term. Typically, the Group ensures that it has sufficient cash on demand to meet expected operational cash
flows, including servicing of financial obligations. This includes maintenance of balance sheet liquidity ratios, debtors and
creditors concentration both in terms of overall funding mix and avoidance of undue reliance on large individual customer.
The Group also maintains various lines of credit with banking companies.
49.2.2 Exposure to liquidity risk
The following presents the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed
repayment periods. The analysis have been drawn up based on the undiscounted cash flows of financial liabilities based on
the earliest date on which the Group can be required to pay and includes both interest/markup/profit and principal cash
flows. To the extent that interest/markup/profit flows are floating rate, the undiscounted amount is derived from
interest/markup/profit rate curves at the reporting date.
2019
Carrying Contractual One year One to More than
amount cash flows or less three years three years
Redeemable capital - - - - -
Long term finances 4,407,403 5,320,079 2,753,784 2,448,023 118,272
Lease liabilities 241,094 285,779 133,420 152,359 -
Trade creditors 468,541 468,541 468,541 - -
Foreign bills payable 101,960 101,960 101,960 - -
Accrued liabilities 145,488 145,488 145,488 - -
Employees' provident fund 6,774 6,774 6,774 - -
Compensated absences 33,902 33,902 33,902 - -
Unclaimed dividend 15,052 15,052 15,052 - -
Other payables 18,531 18,531 18,531 - -
Accrued interest/markup/profit 488,912 488,912 488,912 - -
Short term borrowings 10,955,490 10,955,490 10,955,490 - -
16,883,147 17,840,508 15,121,854 2,600,382 118,272

2018

Redeemable capital 101,875 103,885 103,885 - -
Long term finances 4,315,878 4,962,564 2,059,357 2,903,207 -
Trade creditors 414,995 414,995 414,995 - -
Other payables 19,659 19,659 19,659 - -
18,543,978 19,205,230 16,237,450 2,967,780 -
49.3 Market risk
49.3.1 Currency risk
Currency risk is the risk that fair values or future cash flows of a financial instrument will fluctuate because of changes in
foreign exchange rates. Currency risk arises from transactions and resulting balances that are denominated in a currency
other than functional currency.
(a) Currency risk management
The Group manages its exposure to currency risk through continuous monitoring of expected/forecast committed and
non-committed foreign currency payments and receipts. Reports on forecast foreign currency transactions, receipts
and payments are prepared on monthly basis, exposure to currency risk is measured and appropriate steps are taken to
ensure that such exposure is minimized while optimizing return. This includes matching of foreign currency
liabilities/payments to assets/receipts and using source inputs in foreign currency.
(b) Exposure to currency risk
The Group's exposure to currency risk as at the reporting date is as follows:
2019 2018
Financial assets - -
Financial liabilities
Foreign bills payable
USD (86,161) (92,204)
CNY (2,617) (16,619)
EUR (11,391) -
AUD (1,791) -
(101,960) (108,823)
Net balance sheet exposure (101,960) (108,823)
Foreign currency commitments
CHF (19,546) (17,235)
CNY (85,928) (28,496)
EUR (114,229) (156,714)
GBP - (1,059)
USD (460,502) (1,809,135)
AUD (2,423) -
(682,628) (2,012,639)
Net exposure (784,588) (2,121,462)
(c) Exchange rates applied as at the reporting date
The following spot exchange rates were applied as at the reporting date.
2019 2018
GBP - 176.5100
EUR 173.5841 159.1000
USD 154.8476 139.1000
CHF 159.8674 141.2700
CNY 22.2409 20.2100
AED 42.1566 -
AUD 108.4785 -
(d) Sensitivity analysis
A five percent appreciation in Pak Rupee against foreign currencies would have incresed profit for the year and equity as
at the reporting date by Rs. 5.1 million (2018: Rs. 5.441 million). A five percent depreciation in Pak Rupee would have had
an equal but opposite effect on profit for the year and equity. The analysis assumes that all other variables, in particular
interest rates, remain constant and ignores the impact, if any, on provision for taxation for the year.
49.3.2 Interest rate risk
Interest rate risk is the risk that fair values or future cash flows of a financial instrument will fluctuate because of changes in
interest rates.
(a) Interest rate risk management
The Group manages interest rate risk by analysing its interest rate exposure on a dynamic basis. Cash flow interest rate
risk is managed by simulating various scenarios taking into consideration refinancing, renewal of existing positions and
alternative financing. Based on these scenarios, the Group calculates impact on profit after taxation and equity of
defined interest rate shift, mostly 100 basis points.
(b) Interest/markup/profit bearing financial instruments
The effective interest/markup/profit rates for interest/markup/profit bearing financial instruments are mentioned in
relevant notes to the financial statements. The Group's interest/markup/profit bearing financial instruments as at the
2019 2018
Fixed rate instruments - -
Variable rate instruments

Financial liabilities 15,603,987 17,363,969
(c) Fair value sensitivity analysis for fixed rate instruments
The Group does not have any fixed rate instruments.
(d) Cash flow sensitivity analysis for variable rate instruments
An increase of 100 basis points in interest rates as at the reporting date would have decreased profit for the year and
equity as at the reporting date by Rs. 156.04 million (2018: Rs. 173.64 million). A decrease of 100 basis points would
have had an equal but opposite effect on profit and equity. The analysis assumes that all other variables, in particular
foreign exchange rates, remain constant and ignores the impact, if any, on provision for taxation for the year.
49.3.3 Other price risk
Other price risk represents the risk that the fair value or future cash flows of financial instrument will fluctuate because of
changes in market prices, other than those arising from interest rate risk or currency risk, whether those changes are caused
by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments. The
Group is exposed to price risk in respect of its investments in equity securities. However, the risk is minimal as these
investments are held for strategic purposes rather than trading purposes. The Group does not actively trade in these
investments.
50 FAIR VALUE MEASUREMENTS
The Group measures some of its assets at fair value at the end of each reporting period. Fair value measurements are
classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements and has the
following levels.
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3 Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
The fair value hierarchy of financial instruments measured at fair value and the information about how the fair values of these
financial instruments are determined are as follows:
50.1 Financial instruments measured at fair value
50.1.1 Recurring fair value measurements
Financial instruments Hierarchy Valuation techniques and key inputs 2019 2018
Financial assets at fair value

Investments in quoted
equity securities Level 1 Quoted bid prices in an active market 21,596 22,071
50.1.2 Non-recurring fair value measurements
There are no non-recurring fair value measurements as at the reporting date.
50.2 Financial instruments not measured at fair value
The management considers the carrying amount of all financial instruments not measured at fair value at the end of each
reporting period to approximate their fair values as at the reporting date.
50.3 Assets and liabilities other than financial instruments.
For recurring fair value measurements, the fair value hierarchy and information about how the fair values are determined is as
follows:
Level 1 Level 2 Level 3 2019 2018

Land - 1,035,256 - 1,035,256 1,035,256

Building - 5,771,302 - 5,771,302 3,444,504
Plant and machinery - 14,323,240 - 14,323,240 13,797,790
For fair value measurements categorised into Level 2 the following information is relevant:
Valuation technique Significant inputs Sensitivity
Land Market comparable Estimated purchase price, A 5% increase in estimated

approach that reflects recent including non-refundable purchase price, including
transaction prices for similar purchase taxes and other non-refundable purchase
properties costs directly attributable to taxes and other costs directly
the acquisition. attributable to the acquisition
would result in a significant
increase in fair value of
buildings by Rs. 51.763
million (2018: Rs. 51.763
million).
Building Cost approach that reflects Estimated construction costs A 5% increase in estimated
the cost to the market and other ancillary construction and other
participants to construct expenditure. ancillary expenditure would
assets of comparable utility result in a significant
and age, adjusted for increase in fair value of
obsolescence and buildings by Rs. 288.565
depreciation. There was no million (2018: Rs.172.225
change in valuation million).
technique during the year.
Plant and machinery Cost approach that reflects Estimated purchase price, A 5% increase in estimated
the cost to the market including import duties and purchase price, including
participants to acquire non-refundable purchase import duties and non-
assets of comparable utility taxes and other costs directly refundable purchase taxes
and age, adjusted for attributable to the acquisition and other directly
obsolescence and or construction, erection and attributable costs would
depreciation. There was no installation. result in a significant
change in valuation increase in fair value of plant
technique during the year. and machinery by Rs.
716.162 million (2018: Rs.
689.89 million).
Reconciliation of fair value measurements categorized in Level 2 is presented in note 21.5.
There were no transfers between fair value hierarchies during the year.
51 CAPITAL MANAGEMENT
The Group's objective when measuring capital is to safeguard the Group's ability to continue as going concern while
providing returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure through
debt and equity balance. The Group manages its capital structure and makes adjustments to it in light of changes in
economic conditions. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid
to shareholders or issue of new shares. Consistent with others in industry, the Group monitors capital on the basis of gearing
ratio which is debt divided by total capital employed. Debt comprises long term finances, redeemable capital and lease
liabilities, including current maturity. Total capital employed includes total equity plus debt. The gearing ratios as at the
Unit 2019 2018
Total debt Rupees '000' 4,648,497 4,520,121

Total equity Rupees '000' 30,688,143 30,279,695
Total capital employed Rupees '000' 35,336,640 34,799,816
Gearing ratio % age 13.15 12.99
The Group is not subject to externally imposed capital requirements, except those related to maintenance of debt covenants,
commonly imposed by the providers of debt finance.
52 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
The aggregate amount charged to profit or loss in respect of chief executive, directors and executives on account of
managerial remuneration, allowances and perquisites, post employment benefits and the number of such directors and
executives is as follows:
Chief Executive Directors Executives

2019 2018 2019 2018 2019 2018
Remuneration 12,046 12,046 29,641 28,042 195,917 156,009

House rent 1,205 1,205 1,908 1,844 43,196 33,930
Utilities 1,205 1,205 1,205 1,205 19,592 15,601
Bonus - - - - 11,159 7,481
Post employment benefits - - 1,760 1,600 19,178 14,889
Meeting fee - - 435 345 - -
Reimbursable expenses
Motor vehicles expenses - - - - 18,045 15,501
Medical expenses - - 329 224 8,608 6,008
14,456 14,456 35,278 33,260 315,695 249,419
Number of persons 1 1 2 2 87 73
52.1 Chief executive, directors and executives have been provided with free use of the Group's vehicles.
52.2 No remuneration has been paid to non-executive directors
53 SEGMENT INFORMATION
(a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and
expenses relating to transactions with other components of the same entity),
(b) whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about
resources to be allocated to the segment and assess its performance, and
(c) for which discrete financial information is available.
Information about the Group's reportable segments as at the reporting date is as follows:
Power Division Manufacturing of transformers, switchgears, energy meters, engineering, procurement and
construction contracting.
Appliances Division Manufacturing, assembling and distribution of refrigerators, deep freezers, air
conditioners, microwave ovens, LED TVs, washing machines, water dispensers and other
home appliances.
2019
Power Appliances
Division Division Total
Rupees '000' Rupees '000' Rupees '000'
Revenue 9,833,931 27,787,338 37,621,269
Finance cost 791,153 1,688,935 2,480,088
Depreciation and amortization 453,387 532,089 985,476
Segment profit 141,135 765,660 906,795
Segment assets 18,809,516 30,174,911 48,984,427

2018
Power Appliances
Revenue 11,714,746 27,275,501 38,990,247
Finance cost 688,585 1,414,758 2,103,343
Segment profit 279,840 1,332,991 1,612,831
Segment assets 19,668,173 30,416,925 50,085,098
2019 2018
53.1 Reconciliation of segment profit

Total profit for reportable segments 906,795 1,612,831
Un-allocated other expenses (25,791) (55,529)
53.2 Reconciliation of segment assets

Total assets for reportable segments 48,984,427 50,085,098
Other corporate assets 2,326,755 2,014,841
Total assets 51,311,182 52,099,939
53.3 Information about major customers

Revenue derived from Lahore Electric Supply Company 922,592 -
Revenue derived from Multan Electric Power Company - 2,650,670
54 EMPLOYEES PROVIDENT FUND TRUST
The following information is based on the un-audited financial statements of the Pak Elektron Limited Employees Provident
Fund Trust for the year ended December 31, 2019.
2019 2018
Size of the fund - total assets Rupees '000' 471,337 389,017

Fair value of investments Rupees '000' 429,787 351,027
Percentage of investments made % age 91.18 90.23
The break-up of investments is as follows:
2019 2018
Rupees '000' % age Rupees '000' % age
Government securities 134,496 31.29 118,131 33.65

Deposit accounts with commercial banks 295,291 68.71 232,896 66.35
429,787 100.00 351,027 100.00
55 PLANT CAPACITY AND ACTUAL PRODUCTION
2019 2018
Actual Actual
Annual production Annual production
production during the production during the
Unit capacity year capacity year
Transformers/Power Transformers MVA 7,000 2,229 7,000 2,397
Switch gears Nos. 12,000 4,126 12,000 4,805
Energy meters Nos. 1,700,000 662,833 1,700,000 826,007
Air conditioners Tonnes 200,000 94,808 200,000 103,220
Refrigerators/deep freezers Cfts. 6,950,000 4,072,399 6,950,000 5,075,992
Microwave ovens Litres 2,500,000 707,249 2,500,000 1,945,097
LED TVs Sets 200,000 41,710 200,000 24,190
Washing machines Kgs 150,000 104,754 50,000 7,005
55.1 Under utilization of capacity is mainly attributable to consumer demand.
56 NUMBER OF EMPLOYEES
2019 2018
Total number of employees 5,185 5,817
Average number of employees 5,448 6,165
57 RECLASSIFICATIONS
The following have been reclassified for better presentation.
Particulars From To 2019 2018

Advances to customers Trade debts Short term advances 589,497 623,715
58 RECOVERABLE AMOUNTS AND IMPAIRMENT
As at the reporting date, recoverable amounts of all assets/cash generating units are equal to or exceed their carrying
amounts, unless stated otherwise in these financial statements.
59 EVENTS AFTER THE REPORTING PERIOD
59.1 The Board of Directors of Pak Elektron Limited ['PEL'] and PEL Marketing (Private) Limited ['PMPL'] in their respective
meetings held on March 27, 2020 have approved the scheme of arrangement for amalgamation of PMPL, a wholly owned
subsidiary of PEL, with and into PEL with effect from April 30, 2020. The amalgamation is pending approval by the Securities
and Exchange Commission of Pakistan. Once the amalgamation is approved, the entire issued, subscribed and paid-up
capital of PMPL, comprising of Rs. 10,000 ordinary shares of Rs. 10 each shall stand cancelled without any payment or other
consideration, from effective date.
59.2 COVID-19 pandemic started at the end of December 2019 and broke out in China in January 2020. The material imports from
China remain suspended due to lock down, financial impact and materiality of which is not quantifiable at present. The
economic impact of local slow down started from February 2020 and a lock down, commenced in March 2020, is in progress
and the financial impact of the same is not yet determinable. However, the management believes to have sufficient
production capacity to cope with the supply shortfall in the balance period. The Prime Minister of Pakistan announced a
package of Rs. 1,250 billion for general public and industries to mitigate the COVID-19 miseries. The State Bank of Pakistan
announced reduction of Policy Rate to 9% along with the deferral of due principal and mark up payments for period from
upto one year.
60 GENERAL
60.1 Figures have been rounded of to the nearest thousands.
60.2 Comparative figures have been rearranged and reclassified, where necessary, for the purpose of comparison. However,
there were no significant reclassifications during the year other than those referred to in note 57.

J
SEPARATE
FINANCIAL
STATEMENTS
Annual Report 2019 J 03

72-A, Faisal Town,

T: +92 42 35160430 - 32
F: +92 42 35160433
E: lahore@rsrir.com
W: www.rsrir.com
INDEPENDENT AUDITOR’S REPORT

Report on the Audit of the Financial Statements
Opinion
We have audited the annexed financial statements of PAK ELEKTRON LIMITED ['the Company'], which
comprise the statement of financial position as at December 31, 2019, the statement of profit or loss, the
statement of comprehensive income, the statement of changes in equity, the statement of cash flows for
the year then ended, and notes to the financial statements, including a summary of significant accounting
policies and other explanatory information, and we state that we have obtained all the information and
explanations which, to the best of our knowledge and belief, were necessary for the purposes of the audit.
In our opinion and to the best of our information and according to the explanations given to us, the
statement of financial position, the statement of profit or loss, the statement of comprehensive income,
the statement of changes in equity and the statement of cash flows together with the notes forming part
thereof conform with the accounting and reporting standards as applicable in Pakistan and give the
information required by the Companies Act, 2017 (XIX of 2017), in the manner so required and
respectively give a true and fair view of the state of the Company's affairs as at December 31, 2019 and of
the profit, other comprehensive income, the changes in equity and its cash flows for the year then ended.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing ['ISAs'] as applicable in
Pakistan. Our responsibilities under those standards are further described in the Auditor's Responsibilities
for the Audit of the Financial Statements section of our report. We are independent of the Company in
accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional
Accountants as adopted by the Institute of Chartered Accountants of Pakistan ['the Code'] and we have
fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
1. First time adoption of IFRS 9 – Financial

Instruments
As referred to in note 3.1 to the financial Our key procedures to review the application of
statements, the Company has adopted IFRS IFRS 9 included, amongst others, review of the
9 - 'Financial Instruments'. The new standard methodology developed and applied by the
requires the Company to make allowance for Company to estimate the ECL in relation to
impairment of financial assets using financial assets. We also considered and
Expected Credit Loss ['ECL'] approach as evaluated the assumptions used in applying the
against the Incurred Loss Model previously ECL methodology based on historical information
applied by the Company. and qualitative factors as relevant for such
estimates.
Determination of ECL for financial assets
J 04 Pak Elektron Limited
requires significant judgment and Further, we assessed the integrity and quality of
assumptions including consideration of the data used for ECL computation based on the
factors such as historical credit loss accounting records and information system of the
experience and forward-looking macro- Company as well as the related external sources
economic information. as used for this purpose.
We have considered the first time We checked the mathematical accuracy of the
application of IFRS 9 requirements as a key ECL model by performing recalculation on test
audit matter due to significance of the basis.
change in accounting methodology and
In addition to above, we assessed the adequacy
involvement of estimates and judgments in
of disclosures in the financial statements of the
this regard.
Company regarding application of IFRS 9 as per
the requirements of the above standard.
2. First time adoption of IFRS 15 – Revenue

from Contracts with Customers
statements, the Company has adopted IFRS IFRS 15 included, amongst others, review of
15 – 'Revenue from Contracts with managements' impact assessment of all contracts
Customers'. IFRS 15 introduces a new five with customers in light of application of the new
step model for recognition of revenue which standard, review of contracts to determine
is primarily based on the transfer of control whether performance obligations have been
to the customers along with detailed identified, classified and accounted for
presentation and disclosure about contracts separately, whether allocation of transaction price
with customers, information about between each performance obligation is
disaggregation of revenue, performance appropriate and whether the revenue has been
obligations, contract assets and contract recognized at a point in time or over a period of
liabilities. time appropriately.
disclosures.
3. First time adoption of IFRS 16 – Leases

statements, the Company has adopted IFRS IFRS 16 included, amongst others, review of
16 – 'Leases'. IFRS 16 sets out the principles managements' impact assessment of all lease
for the recognition, measurement, arrangements in light of application of the new
presentation and disclosure of leases and standard, review of lease contracts to determine
requires lessees to account for all leases whether the same are in scope of IFRS 16 and are
under a single on-balance sheet model with also subject to recognition exemption under IFRS
corresponding recognition of right-of-use 16 for short-term and low value leases. We also
asset. Lessor accounting under IFRS 16 is reviewed contracts to determine whether it is a
substantially unchanged from accounting lease contract, and if so its various components,
under IAS 17 'Leases' i.e. operating and lease term, rental amount, payment terms, etc.,
finance leases. For lessees all leases will be reviewed the appropriateness of discount rate
classified as finance leases only with the used by the Company to determine the present
exception of certain short-term leases. value of lease liability and calculation of related
We have considered the first time depreciation and finance charge.

disclosures.
4. Inventory valuation
Stock in trade amounts to Rs 7,789 million as To address the valuation of stock in trade, we
at the reporting date. The valuation of stock assessed historical costs recorded in the
in trade at cost has different components, inventory valuation; testing on a sample basis
which includes judgment in relation to the with purchase invoices. We tested the
allocation of labour and overheads which reasonability of assumptions applied by the
are incurred in bringing the stock to its management in allocating direct labour and
present location and condition. Judgment direct overhead costs to inventories.
has also been applied by management in
We also assessed management's determination
determining the Net Realizable Value ['NRV']
of the net realizable value of inventories by
of stock in trade.
performing tests on the sales prices secured by
The estimates and judgments applied by the Company for similar or comparable items of
management are influenced by the amount inventories.
of direct costs incurred historically,
expectations of repeat orders to utilize the
stock in trade, sales contract in hand and
historically realized sales prices.
The significance of the balance coupled with
the judgment involved has resulted in the
valuation of inventories being identified as a
key audit matter
The disclosures in relation to inventories are
included in note 26.
5. Tax contingencies
As disclosed in note 20 to the annexed Our key audit procedures in this area included,
financial statements, various tax matters are amongst others, a review of the correspondence
pending adjudication at various levels with of the Company with the relevant tax authorities
the taxation authorities and other legal and tax advisors including judgments or orders
forums. Such contingencies require the passed by the competent authorities.
management to make judgments and
We also obtained and reviewed confirmations
estimates in relation to the interpretation of
from the Company's external tax advisor for their
tax laws and regulations and the recognition
views on the status of each case and an overall
and measurement of any provisions that may
opinion on the open tax position of the
be required against such contingencies. Due
Company.
to inherent uncertainties and the time period
such matters may take to resolve, the We involved internal tax experts to assess and
management's judgments and estimates in review the management's conclusions on
relation to such contingencies may be contingent tax matters and evaluated whether
complex and can significantly impact the adequate disclosures have been made in note 20
financial statements. For such reasons we to the annexed financial statements.
have considered tax contingencies as a key
audit matter.
Information other than the Financial Statements and Auditor's Report Thereon
Management is responsible for the other information. The other information comprises the information
included in the annual report, but does not include the financial statements and our auditor's report
thereon.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Board of Directors for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with the accounting and reporting standards as applicable in Pakistan and the requirements
of Companies Act, 2017(XIX of 2017) and for such internal control as management determines is
necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
The Board of directors is responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs as applicable in Pakistan will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of user taken on the basis of these financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment
and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company's ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's
report. However, future events or conditions may cause the Company to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with the board of directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the board of directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the board of directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor's report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Based on our audit, we further report that in our opinion:
a) proper books of account have been kept by the Company as required by the Companies Act, 2017
(XIX of 2017);
b) the statement of financial position, the statement of profit or loss, the statement of comprehensive
income, the statement of changes in equity and the statement of cash flows together with the notes
thereon have been drawn up in conformity with the Companies Act, 2017 (XIX of 2017) and are in
agreement with the books of account and returns;
c) investments made, expenditure incurred and guarantees extended during the year were for the
purpose of the Company's business; and
d) no zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980).
Other Matters
As referred to in note 2.6, the annexed financial statements were amended by the management to
disclose a non-adjusting event occurring after the reporting period. We have, earlier, issued an auditor's
report, dated March 27, 2020, on the audit of financial statements before the said amendment, wherein we
have expressed an unmodified opinion on those financial statements. This is an amended auditor's report
on the audit of annexed amended financial statements. Our audit procedures subsequent to that date
were restricted to the subsequent amendment of the financial statements as described in note 2.6.
The engagement partner on the audit resulting in this independent auditor's report is ZUBAIR IRFAN
MALIK.


Statement of Financial Position

as at December 31, 2019
Note 2019 2018

SHARE CAPITAL AND RESERVES
Authorized capital 7 6,000,000 6,000,000
Issued, subscribed and paid-up capital 8 5,426,392 5,426,392

Capital reserve 9 4,279,947 4,279,947
Surplus on revaluation of property, plant and equipment 10 6,023,632 6,579,049
Accumulated profit 7,277,582 6,884,031
TOTAL EQUITY 23,007,553 23,169,419
LIABILITIES
NON-CURRENT LIABILITIES
Redeemable capital 11 - -
Lease liabilities 13 137,386 59,778
Deferred taxation 15 2,484,471 2,423,945
Deferred income 16 34,942 36,781
4,938,963 5,166,536
CURRENT LIABILTIES
Trade and other payables 17 1,074,549 823,850

Short term borrowings 18 10,955,490 12,843,848
Current portion of non-current liabilities 19 2,348,957 1,814,311
14,882,960 15,890,831
TOTAL LIABILITIES 19,821,923 21,057,367
CONTINGENCIES AND COMMITMENTS 20
TOTAL EQUITY AND LIABILITIES 42,829,476 44,226,786
M. MURAD SAIGOL M. ZEID YOUSUF SAIGOL

Chief Executive Officer Director
Note 2019 2018

ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 21 22,939,060 21,957,015

Intangible assets 22 306,332 313,352
Long term investments 23 5,863 7,085
23,611,435 22,643,409
CURRENT ASSETS
Stores, spares and loose tools 25 848,347 859,145

Stock in trade 26 7,789,297 8,374,111
Trade debts 27 2,490,298 4,870,122
Construction work in progress 28 1,697,509 1,535,735
Short term advances 29 1,094,157 965,614
Short term deposits and prepayments 30 1,891,598 1,105,179
Other receivables 401,854 360,962
Short term investments 31 21,596 22,071
Advance income tax/Income tax refundable 32 2,603,652 3,132,528
19,218,041 21,583,377
TOTAL ASSETS 42,829,476 44,226,786
SYED MANZAR HASSAN

Chief Financial Officer
Statement of Profit or Loss

For the year Ended December 31, 2019
Note 2019 2018

Revenue 34 27,696,469 27,182,898
Sales tax, excise duty and discounts 34 (5,346,720) (3,710,466)

Net revenue 22,349,749 23,472,432
Cost of sales 35 (19,021,046) (20,719,396)

Gross profit 3,328,703 2,753,036
Other income 36 32,303 17,384
Distribution cost 37 (953,701) (732,340)

Administrative and general expenses 38 (611,644) (516,884)
Other expenses 39 (44,427) (51,203)
(1,609,772) (1,300,427)
Operating profit 1,751,234 1,469,993
Finance cost 40 (1,539,898) (976,447)

Profit before taxation 211,336 493,546
Taxation 41 (33,494) 34,799

Profit after taxation 177,842 528,345
Earnings per share - basic and diluted (Rupees) 42 0.27 0.98

Statement of Comprehensive Income

Note 2019 2018

Items that may be reclassified subsequently to profit or loss - -
Items that will not be reclassified to profit or loss

Surplus on revaluation of property, plant and
equipment recognised during the year 10 - 3,045,215
Deferred tax adjustment on surplus on revaluation of
property, plant and equipment
- recognised during the year 10 - (672,091)
- attributable to changes in tax rates 10 - 52,268
- attributable to change in proportion of income taxable under Final tax regime 10 (26,753) 79,462
(26,753) 2,504,854
Other comprehensive (loss)/income (26,753) 2,504,854
Profit for the year 177,842 528,345
Total comprehensive income 151,089 3,033,199

Statement of Cash Flows

Note 2019 2018

CASH FLOW FROM OPERATING ACTIVITIES
Cash generated from operations 43 5,251,428 169,110
Payments for:
Interest/markup on borrowings - Interest based arrangements (1,004,269) (257,670)
Interest/markup/profit on borrowings - Shariah compliant (279,033) (196,675)
Income tax (229,294) (868,859)
Net cash generated from/(used in) operating activities 3,738,832 (1,154,094)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,069,197) (2,369,292)

Purchase of intangible assets (3,802) (8,030)
Proceeds from disposal of property, plant and equipment 168,001 36,288
Net cash used in investing activities (1,904,998) (2,341,034)
CASH FLOW FROM FINANCING ACTIVITIES
Redemption of redeemable capital (101,875) (275,000)

Long term finances obtained 1,780,122 226,013
Repayment of long term finances (1,688,597) (1,542,813)
Proceeds from sale and lease back activities 187,180 109,944
Repayment of lease liabilities (96,885) (92,076)
Net (decrease)/increase in short term borrowings (1,888,358) 5,616,480
Dividend paid (3,598) (591,334)
Net cash (used in)/generated from financing activities (1,812,011) 3,451,214
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 21,823 (43,914)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 357,910 401,824
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 44 379,733 357,910

Statement of Changes in Equity

Revenue
Share capital Capital reserves
reserves
Surplus on
Issued revaluation of
subscribed property,
and paid-up Capital plant and Accumulated Total
Note capital reserve equipment profit equity

Other comprehensive income - - 2,504,854 - 2,504,854
Total comprehensive income - - 2,504,854 528,345 3,033,199
Transaction with owners
Final dividend on ordinary shares
@ Rs. 1.20 per share - - - (597,218) (597,218)
- - - (597,218) (597,218)

Impact of application of IFRS 15 - - - (312,955) (312,955)
Balance as at January 01, 2019 -
as adjusted 5,426,392 4,279,947 6,579,049 6,571,076 22,856,464
Other comprehensive loss - - (26,753) - (26,753)
Total comprehensive income - - (26,753) 177,842 151,089
Transaction with owners - - - - -

Notes to the Financial Statements

1 LEGAL STATUS AND OPERATIONS
Pak Elektron Limited ['the Company'] was incorporated in Pakistan on March 03, 1956 as a Public Limited Company under the
Companies Act, 1913 (now Companies Act, 2017). Registered office of the Company is situated at 17 - Aziz Avenue, Canal
Bank, Gulberg - V, Lahore. The manufacturing facilities of the Company are located at 34 - K.M, Ferozepur Road, Keath Village,
Lahore and 14 - K.M, Ferozepur Road, Lahore. The Company is currently listed on Pakistan Stock Exchange Limited. 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 and Appliances Division. The
Company's activities are as follows:
Power Division: Manufacturing of transformers, switchgears, energy meters, engineering, procurement and construction
contracting.
Appliances Division: Manufacturing, assembling and distribution of refrigerators, deep freezers, air conditioners, microwave
ovens, LED TVs, washing machines, water dispensers and other home appliances.
2 BASIS OF PREPARATION
2.1 Separate financial statements
These financial statements are the separate financial statements of the Company in which investments in subsidiary and
associated entities are accounted for on the basis of cost rather than on the basis of reported results. Consolidated financial
statements are prepared and presented separately.
2.2 Statement of compliance
These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in
Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:
- International Financial Reporting Standards ['IFRS'] issued by the International Accounting Standards Board ['IASB'] as
notified under the Companies Act, 2017;
- Islamic Financial Accounting Standards ['IFAS'] issued by Institute of Chartered Accountants of Pakistan as notified under
the Companies Act, 2017; and
- Provisions of and directives issued under the Companies Act, 2017.
Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS and IFAS, the provisions of and
directives issued under the Companies Act, 2017 have been followed.
2.3 Basis of measurement
These financial statements have been prepared under the historical cost convention except for certain items of property,
plant and equipment at revalued amounts, certain assets at recoverable amounts, monetary assets and liabilities
denominated in foreign currency measured at spot exchange rates and certain financial instruments measured at fair
value/amortized cost. In these financial statements, except for the amounts reflected in the statement of cash flows, all
transactions have been accounted for on accrual basis.
2.4 Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and
associated assumptions and judgments are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the result of which forms the basis of making judgments about carrying values of assets
and liabilities that are not readily apparent from other sources. Subsequently, actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
in the period in which the estimate is revised and in any future periods affected.
2.4.1 Critical accounting judgements
Judgments made by management in the application of accounting and reporting standards that have significant effect on
the financial statements and estimates with a risk of material adjustment in subsequent years are as follows:
(a) Business model assessment (see note 6.26.1)
The Company classifies its financial assets on the basis of the Company's business model for managing the financial assets
and the contractual cash flow characteristics of the financial asset. The Company determines the business model at a level
that reflects how financial assets are managed to achieve a particular business objective. This assessment includes
judgement reflecting all relevant evidence including how the performance of the assets is evaluated and their performance
measured, the risks that affect the performance of the assets and how these are managed.
(b) Satisfaction of performance obligations in construction contracts (see note 6.18.1)
The Company has determined that for construction contracts the customer controls all of the work in progress. This is
because these contracts are customer specific and the Company is entitled to reimbursement of costs incurred to date,
including a reasonable margin, if applicable, in case the contract is terminated by the customer.
2.4.2 Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting date that may
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are as follows:
(a) Calculation of impairment allowance for expected credit losses on financial assets (see note 6.26.1)
The Company recognizes a loss allowance for expected credit losses on financial assets carried at amortized cost on date
of initial recognition. The amount of expected credit losses is updated on each reporting date to reflect the changes in
credit risk since initial recognition of the respective financial asset. Estimating expected credit losses and changes there
in requires taking into account qualitative and quantitative forward looking information. When measuring expected
credit losses on financial assets the Company uses reasonable and supportable forward looking information as well as
historical data to calculate the difference between the contractual cash flows due and those that the Company would
expect to receive, taking into account cash flows from collateral and integral credit enhancements, if any. Probability of
default constitutes a key input in measuring expected credit losses. Probability of default is an estimate of the likelihood
of default over a given time horizon, the calculation of which includes historical data, assumptions and expectations of
future conditions. If the expected credit loss rates on financial assets past due had been 10% higher/lower as at the
reporting date, the loss allowance on financial assets would have been higher/lower by Rs. 61.254 million.
(b) Depreciation method, rates and useful lives of property, plant and equipment (see note 6.1.1)
The Company reassesses useful lives, depreciation method and rates for each item of property, plant and equipment
annually by considering expected pattern of economic benefits that the Company expects to derive from that item.
(c) Amortization method, rates and useful lives of intangible assets (see note 6.2)
The Company reassesses useful lives, amortization method and rates for each intangible asset annually by considering
expected pattern of economic benefits that the Company expects to derive from that asset.
(d) Revaluation of property, plant and equipment (see note 6.1.1)
Revaluation of property, plant and equipment is carried out by independent professional valuers. Revalued amounts of
non-depreciable items are determined by reference to local market values and that of depreciable items are determined
by reference to present depreciated replacement values.
(e) Recoverable amount and impairment of non-financial assets (see note 6.26.2)
The management of the Company reviews carrying amounts of its non-financial assets for possible impairment and
makes formal estimates of recoverable amount if there is any such indication.
(f) Taxation (see note 6.21)
The Company takes into account the current income tax law and decisions taken by appellate and other relevant legal
forums while estimating its provision for current tax. Provision for deferred tax is estimated after taking into account
historical and expected future turnover and profit trends and their taxability under the current tax law.
(g) Provisions (see note 6.16)
Provisions are based on best estimate of the expenditure required to settle the present obligation at the reporting date,
that is, the amount that the Company would rationally pay to settle the obligation at the reporting date or to transfer it to a
third party. This involves estimation of most likely amounts for one-off events such as litigations and estimation of
probability-weighted expected values for large populations of events, such as warranties.
(h) Net realizable values of stock in trade (see note 6.5)
The Company estimates net realizable values of its stock in trade as the estimated selling price in the ordinary course of
business less estimated costs of completion and estimated costs necessary to make the sale.
2.5 Functional currency
These financial statements have been prepared in Pak Rupees which is the Company's functional currency.
2.6 Issue of financial statements
These financial statements were intially authorized for issue on March 27, 2020 by the Board of Directors of the Company.
Subsequently, these financial statements were amended to disclose non-adjusting event occurring after the reporting
period (see note 57.2). The amendment is restricted to note 57.2 only and there were no amendments to the amounts
reported in the previously issued financial statements. The amended financial statements were authorized for issue on May
02, 2020 by the Board of Directors of the Company.
3 NEW AND REVISED STANDARDS, INTERPRETATIONS AND AMENDMENTS EFFECTIVE DURING THE PERIOD.
The following new and revised standards, interpretations and amendments are effective in the current period but are either
not relevant to the Company or their application does not have any material impact on the interim financial statements of the
Company other than presentation and disclosures.
3.1 IFRS 9 - Financial Instruments
IFRS 9 introduces new requirements for the classification and measurement of financial assets and financial liabilities,
impairment of financial assets and general hedge accounting. The Company has applied IFRS 9 in accordance with the
transitions, provision set out in the standard.
The date of initial application of IFRS 9 (the date on which the Company has assessed its existing financial assets and financial
liabilities in terms of the requirements of IFRS 9) is January 01, 2019. Accordingly, the Company has applied the requirements
of IFRS 9 to instruments that continue to be recognized as at December 31, 2019. Comparative amounts in relation to
instruments that continue to be recognized as at December 31, 2019 have not been restated as allowed by IFRS 9.
Classification and measurement
The classification and measurement requirements for financial liabilities have been substantially carried forward from IAS 39.
All recognized financial assets that are within the scope of IFRS 9 are required to be measured subsequently at amortized cost
or fair value on the basis of the Company's business model for managing the financial assets and the contractual cash flow
characteristics of the financial assets. Specifically:
- Financial assets that are held within a business model whose objective is to hold financial assets in order to collect
solely payments of principal and interest on the principal amount outstanding are subsequently measured at amortized
cost and accordingly classified as 'financial assets at amortized cost’;
- Financial assets that are held within a business model whose objective is achieved by both collecting contractual
cashflows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding subsequently measured at
fair value through other comprehensive income and accordingly classified as 'financial assets at fair value through other
comprehensive income [FVTOCI]’;
- All other financial instruments are subsequently measured at fair value through profit or loss and accordingly classified as
'financial assets at fair value through profit or loss [FVTPL]’.
Despite the foregoing, the Company may make an irrevocable election/designation at initial recognition of financial asset:
- To present subsequent changes in fair value of an equity instrument that is not held for trading nor contingent
consideration recognized by an acquirer in a business combination in other comprehensive income and classify it as
FVTOCI;
- To designate a debt instrument that meets the amortized cost or FVTOCI criteria as measured art FVTPL if doing so
eliminates or significantly reduces a measurement or recognition inconsistency.
When a financial asset measured at FVTOCI is derecognized, the cumulative gain or loss recognized in other comprehensive
income is reclassified to profit or loss as a reclassification adjustment except for equity instruments measured at FVTOCI,
where the cumulative gain or loss previously recognized in other comprehensive income is subsequently transferred to
accumulated profits.
The Company has reviewed and assessed the existing financial assets as at December 31, 2019 based on facts and
circumstances that existed at that date and concluded that initial application of IFRS 9 has had the following impact on the
Company's financial assets as regards their classification and measurement.

Long term deposits Loans and receivables Financial assets at amortized cost
Trade debts Loans and receivables Financial assets at amortized cost
Short term deposits Loans and receivables Financial assets at amortized cost
Bank balances Loans and receivables Financial assets at amortized cost
Short term investments Financial assets at fair value through Financial assets at fair value through
profit or loss profit or loss
Redeemable capital Financial liabilities at amortized cost Financial liabilities at amortized cost
Long term finances Financial liabilities at amortized cost Financial liabilities at amortized cost
Lease liabilities Financial liabilities at amortized cost Financial liabilities at amortized cost
Trade creditors Financial liabilities at amortized cost Financial liabilities at amortized cost
Foreign bills payable Financial liabilities at amortized cost Financial liabilities at amortized cost
Accrued liabilities Financial liabilities at amortized cost Financial liabilities at amortized cost
Employees' provident fund Financial liabilities at amortized cost Financial liabilities at amortized cost
Compensated absences Financial liabilities at amortized cost Financial liabilities at amortized cost
Unclaimed dividend Financial liabilities at amortized cost Financial liabilities at amortized cost
Other payables Financial liabilities at amortized cost Financial liabilities at amortized cost
Accrued interest/markup/profit Financial liabilities at amortized cost Financial liabilities at amortized cost
Short term borrowings Financial liabilities at amortized cost Financial liabilities at amortized cost
In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model as opposed to an incurred
credit loss model under IAS 39. The expected credit loss model requires the Company to account for expected credit losses
and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of
the financial assets. Therefore, it is no longer necessary for a credit loss to have occurred before the same is recognized.
IFRS 9 requires the Company to measure the loss allowance for financial instrument at an amount equal to lifetime expected
credit losses if the credit risk has increased significantly since initial recognition, or if the financial instrument is a purchased or
originated credit impaired financial asset. However, if the credit risk on a financial instrument has not increased significantly
since initial recognition, except for a purchased or originated credit-impaired financial asset, the Company is required to
measure the loss allowance for that financial asset at an amount equal to 12-months expected credit loss. IFRS 9 also requires
a simplified approach for measuring the loss allowance at an amount equal to lifetime expected credit losses for trade
receivables, contract assets and lease receivables in certain circumstances.
3.2 IFRS 15 - Revenue from Contracts with Customers
IFRS 15 - Revenue from Contracts with Customers provides a single, principles based five-step model to be applied to all
contracts with customer.
- Identify the contract with customer.
- Identify the performance obligations in the contract.
- Determine the transaction price.
- Allocate the transaction price to the performance obligations in the contracts.
- Recognize revenue when (or as) the entity satisfies a performance obligation.
IFRS 15 - Revenue from Contracts with Customers' supersedes IAS 11 - Construction Contracts, IAS 18 - Revenue and related
interpretations and it applies to all revenue arising from contracts with customers, unless those contracts are in the scope of
other standards. The new standard establishes a five-step model to account for revenue arising from contracts with
customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be
entitled in exchange for transferring goods or services to a customer. The standard requires entities to exercise judgment,
taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with
their customers.
The Company has applied IFRS 15 using the cumulative effect method and therefore comparative information has not been
restated and continues to be reported under IAS 8 and IAS 11. The accumulative effect of applying IFRS 15 has been
recognised as on January 01, 2019 with the corresponding adjustment to accumulated profit as on that date.
3.3 IFRS 16 - Leases (2016)
IFRS 16 supersedes IAS 17 - Leases, IFRIC 4 - Determining whether an Arrangement contains a Lease, SIC-15 - Operating
Leases- Incentives and SIC-27 - Evaluating the Substance of Transactions Involving the Legal Form of a Lease'. The standard
sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to
account for most leases under a single on-balance sheet model. Lessor accounting under IFRS 16 is substantially unchanged
from IAS 17. Lessors will continue to classify leases as either operating or finance leases using similar principles as in IAS 17.
Whereas, for lessees all leases will be classified as finance leases only. However, as per relevant guidelines issued by Institute
of Chartered Accountants of Pakistan, contracts under Ijarah will continue to be treated as operating leases under IFAS 2.
The Company adopted IFRS 16 using the modified retrospective method of adoption with the date of initial application of
January 01, 2019. Under this method, the standard is applied retrospectively with cumulative effect of initially applying
standard recognised at the date of initial application and accordingly the Company is not required to restate prior year
results.
The Company assessed its existing contracts and concluded that right-of-use assets as disclosed in these financial
statements shall be recognised along with their corresponding lease liabilities. For other existing contracts, the Company
elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of twelve
months or less and do not contain a purchase option (‘short-term leases’), and lease contracts for which the underlying asset
is of low value (‘low value assets’).
The right-of-use assets were recognised based on the amount equal to their corresponding lease liabilities, adjusted for
related prepaid and accrued lease payments previously recognised. Lease liabilities were recognised based on the present
value of the remaining lease payments. The Company did not have any sub-lease as on January 01, 2019. Accordingly, initial
application of IFRS 16 did not have any impact on the opening retained earnings as of January 01, 2019 and on these financial
statements, except for the recognition of right-of-use assets and corresponding lease liabilities as disclosed in these financial
statements.
3.4 IFRIC 23 - Uncertainty over Income Tax Treatments
The interpretation addresses the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits
and tax rates, when there is uncertainty over income tax treatments under IAS 12. It specifically considers:
- Whether tax treatments should be considered collectively;
- Assumptions for taxation authorities' examinations;
- The determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates;
- The effect of changes in facts and circumstances.
3.5 Prepayment Features with Negative Compensation (Amendments to IFRS 9 - Financial Instruments)
IFRS 9 - Financial Instruments have been amended regarding termination rights in order to allow measurement at amortised
cost (or, depending on the business model, at fair value through other comprehensive income) even in the case of negative
compensation payments.
3.6 Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28 - Investments in Associates and Joint Ventures)
IAS 28 - Investments in Associates and Joint Ventures have been amended to clarify that an entity applies IFRS 9 Financial
Instruments to long-term interests in an associate or joint venture that form part of the net investment in the associate or joint
venture but to which the equity method is not applied.
3.7 Annual Improvements to IFRS Standards 2015 – 2017 Cycle
The annual improvements have made amendments to the following standards:
- IFRS 3 - Business Combinations and IFRS 11 - Joint Arrangements - The amendments to IFRS 3 clarify that when an entity
obtains control of a business that is a joint operation, it remeasures previously held interests in that business. The
amendments to IFRS 11 clarify that when an entity obtains joint control of a business that is a joint operation, the entity
does not remeasure previously held interests in that business.
- IAS 12 - Income Taxes - The amendments clarify that the requirements in the former paragraph 52B (to recognise the
income tax consequences of dividends where the transactions or events that generated distributable profits are
recognised) apply to all income tax consequences of dividends by moving the paragraph away from paragraph 52A that
only deals with situations where there are different tax rates for distributed and undistributed profits.
- IAS 23 - Borrowing Costs - The amendments clarify that if any specific borrowing remains outstanding after the related
asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when
calculating the capitalisation rate on general borrowings.
3.8 Plan Amendment, Curtailment or Settlement (Amendments to IAS 19 - Employee Benefits)
IAS 19 - Employees Benefits has been amended to provide that:
- If a plan amendment, curtailment or settlement occurs, it is now mandatory that the current service cost and the net
interest for the period after the remeasurement are determined using the assumptions used for the remeasurement. In
addition, amendments have been included to clarify the effect of a plan amendment, curtailment or settlement on the
requirements regarding the asset ceiling.
4 NEW AND REVISED STANDARDS, INTERPRETATIONS AND AMENDMENTS NOT YET EFFECTIVE.
Effective date
on or after)
IFRS 17 - Insurance contracts (2017) January 01, 2021

Sale or contribution of assets between an Investor and its Associate or Joint Deferred Indefinitely
Venture (Amendments to IFRS 10 - Consolidated Financial Statements and IAS
28 - Investments in Associates and Joint Ventures).
Amendments to References to the Conceptual Framework in IFRS Standards January 01, 2020
Effective date
on or after)
Definition of a Business (Amendments to IFRS 3 - Business Combinations) January 01, 2020

Definition of Material (Amendments to IAS 1 - First-time Adoption of January 01, 2020
International Financial Reporting Standards and IAS 8 - Accounting Policies,
Changes in Accounting Estimates and Errors)
Interest Rate Benchmark Reform (Amendments to IFRS 9 - Financial January 01, 2020
Instruments, IAS 39 - Financial Instruments: Recognition and Measurements,
and IFRS 7 - Financial Instruments: Disclosures)
Other than afore-mentioned standards, interpretations and amendments, IASB has also issued the following standards
which have not been notified by the Securities and Exchange Commission of Pakistan ['SECP']:
IFRS 1 - First Time Adoption of International Financial Reporting Standards

IFRS 14 - Regulatory Deferral Accounts
IFRS 17 – Insurance contracts (2017)
The Company intends to adopt these new and revised standards, interpretations and amendments on their effective dates,
subject to, where required, notification by Securities and Exchange Commission of Pakistan under section 225 of the
Companies Act, 2017 regarding their adoption. The management anticipates that the adoption of the above standards,
amendments and interpretations in future periods, will have no material impact on the Company's financial statements other
than in presentation/disclosures.
5 CHANGES IN ACCOUNTING POLICIES
The adoption of new and revised standards, interpretations and amendments effective during the year has resulted in
changes to accounting policies as follows:
Impairment of financial assets The Company recognizes a loss allowance for expected
credit losses on financial assets carried at amortized cost
A financial asset is assessed at each reporting date to on date of initial recognition. The amount of expected
determine whether there is any objective evidence that it is credit losses is updated on each reporting date to reflect
impaired. Individually significant financial assets are tested the changes in credit risk since initial recognition of the
for impairment on an individual basis. The remaining respective financial asset.
financial assets are assessed collectively in Company’s that Impairment is recognized at an amount equal to lifetime
share similar credit risk characteristics. A financial asset is expected credit losses for financial assets for which credit
considered to be impaired if objective evidence indicates risk has increased significantly since initial recognition. For
that one or more events have had a negative effect on the financial assets for which credit risk is low, impairment is
estimated future cash flows of the asset. recognized at an amount equal to twelve months'
An impairment loss in respect of a financial asset measured expected credit losses, with the exception of trade debts,
at amortized cost is calculated as the difference between its for which the Company recognises lifetime expected
carrying amount, and the present value of the estimated credit losses estimated using internal credit risk grading
future cash flows discounted at the original effective based on the Company's historical credit loss experience,
interest rate. Impairment loss in respect of a financial asset adjusted for factors that are specific to debtors, general
measured at fair value is determined by reference to that economic conditions, and an assessment for both the
fair value. All impairment losses are recognized in profit or current as well as the forecast direction of conditions at the
loss. An impairment loss is reversed if the reversal can be reporting date, including time value of money where
related objectively to an event occurring after the appropriate.
impairment loss was recognized. An impairment loss is All impairment losses are recognized in profit or loss. An
reversed only to the extent that the financial asset’s impairment loss is reversed if the reversal can be related
carrying amount after the reversal does not exceed the objectively to an event occurring after the impairment loss
carrying amount that would have been determined, net of was recognized. An impairment loss is reversed only to the
amortization, if no impairment loss had been recognized. extent that the financial asset’s carrying amount after the
reversal does not exceed the carrying amount that would
have been determined, net of amortization, if no
impairment loss had been recognized.
The Company writes off a financial asset when there is
information indicating that the counter-party is in severe
financial condition and there is no realistic prospect of
recovery. Any recoveries made post write-off are
recognized in profit or loss.
Liabilties against assets subject to finance lease / Lease liabilities
Leases in terms of which the Company assumes At the commencement date of the lease, the Company
substantially all risks and rewards of ownership are recognises lease liabilities measured at the present value
classified as finance leases. Assets subject to finance lease of lease payments to be made over the lease term. The
are classified as 'operating fixed assets'. On initial lease payments include fixed payments (including in-
recognition, these are measured at cost, being an amount substance fixed payments) less any lease incentives
equal to the lower of its fair value and the present value of receivable, variable lease payments that depend on an
minimum lease payments. Subsequent to initial index or a rate, and amounts expected to be paid under
recognition, these are measured at cost less accumulated residual value guarantees. The lease payments also
depreciation and accumulated impairment losses. include the exercise price of a purchase option reasonably
Depreciation, subsequent expenditure, de-recognition, certain to be exercised by the Company and payments of
and gains and losses on de-recognition are accounted for penalties for terminating a lease, if the lease term reflects
in accordance with the respective policies for operating the Company exercising the option to terminate. The
fixed assets. Liabilities against assets subject to finance variable lease payments that do not depend on an index or
lease are classified as 'financial liabilities at amortized cost' a rate are recognised as expense in the period on which the
respectively, however, since they fall outside the scope of event or condition that triggers the payment occurs.
measurement requirements of IFRS 9, these are measured In calculating the present value of lease payments, the
in accordance with the requirements of IAS 17. On initial Company uses if the interest rate implicit in the lease. After
recognition, these are measured at cost, being their fair the commencement date, the amount of lease liabilities is
value at the date of commencement of lease, less increased to reflect the accretion of interest and reduced
attributable transaction costs. Subsequent to initial for the lease payments made. In addition, the carrying
recognition, minimum lease payments made under amount of lease liabilities is remeasured if there is a
finance leases are apportioned between the finance modification, a change in the lease term, a change in the in-
charge and the reduction of outstanding liability. The substance fixed lease payments or a change in the
finance charge is allocated to each period during the lease assessment to purchase the underlying asset.
term so as to produce a constant periodic rate of interest
on the remaining balance of the liability. Deposits against
finance leases, subsequent to initial recognition are carried
at cost.
The following table summarises the impact of application of new and revised standards, interpretations and amendments
effective during the year, on the Company's financial statements, for the year ended December 31, 2019.
Without As
adoption Adjustment reported
Impact on equity
Accumulated profits 7,635,497 (357,915) 7,277,582
Impact on liabilities
Warranty obligations - 357,915 357,915
Impact on profit or loss

Warranty period services 188,441 44,960 233,401
Impact on earnings per share

Decrease in earnings per share 0.18 0.09 0.27
6 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these financial statements
except of the change referred to in note 5.
6.1 Property, plant and equipment
6.1.1 Operating fixed assets
Operating fixed assets are measured at cost less accumulated depreciation and accumulated impairment losses with the
exception of land, building and plant and machinery. Land, building and plant and machinery are measured at revalued
amounts less accumulated depreciation and accumulated impairment losses, if any. Cost comprises purchase price,
including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and includes other
costs directly attributable to the acquisition or construction, erection and installation.
Assets' residual values, if significant and their useful lives are reviewed and adjusted, if appropriate, at each reporting date.
When significant parts of an item of operating fixed assets have different useful lives, they are recognized as separate items.
Major renewals and improvements to operating fixed assets are recognized in the carrying amount if it is probable that the
embodied future economic benefits will flow to the Company and the cost of renewal or improvement can be measured
reliably. The cost of the day-to-day servicing of operating fixed assets are recognized in profit or loss as incurred.
The Company recognizes depreciation in profit or loss by applying reducing balance method, with the exception of
computer hardware and allied items, which are depreciated using straight line method, over the useful life of each operating
fixed asset using rates specified in note 21 to the financial statements. Depreciation on additions to operating fixed assets is
charged from the month in which the item becomes available for use. Depreciation is discontinued from the month in which it
is disposed or classified as held for disposal.
An operating fixed asset is de-recognized when permanently retired from use. Any gain or loss on disposal of operating fixed
assets is recognized in profit or loss.
Increases in the carrying amounts arising on revaluation of property, plant and equipment are recognised, net of tax, in other
comprehensive income and accumulated in surplus on revaluation of property, plant and equipment in share capital and
reserves. To the extent that the increase reverses a decrease previously recognised in profit or loss, the increase is first
recognised in profit or loss. Decreases that reverse previous increases of the same asset are first recognised in other
comprehensive income to the extent of the remaining surplus attributable to the asset; all other decreases are charged to
profit or loss. Each year, the difference between depreciation based on the revalued carrying amount of the asset charged to
profit or loss and depreciation based on the asset’s original cost, net of tax, is reclassified from the surplus on revaluation of
property, plant and equipment to accumulated profit.
6.1.2 Capital work in progress
Capital work in progress is stated at cost less identified impairment loss, if any, and includes the cost of material, labour and
appropriate overheads directly relating to the construction, erection or installation of an item of operating fixed assets. These
costs are transferred to operating fixed assets as and when related items become available for intended use.
6.2 Intangible assets
6.2.1 Goodwill
Goodwill represents the excess of the cost of business combination over the acquirer's interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities of the acquiree. This is stated at cost less any accumulated impairment
losses, if any.
6.2.2 Technology transfer
The intangible assets in respect of technology transfer are amortized over the useful life of plant and machinery involved in
use of such technology. Amortization of intangible commences when it becomes available for use.
6.2.3 Computer software and ERP
Computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific
software. Costs that are directly associated with the production of identifiable and unique software products controlled by
the Company, and that will probably generate economic benefits exceeding costs beyond one year, are recognized as
intangible assets. These costs are amortized over their estimated useful lives. Amortization of intangible asset commences
when it becomes available for use.
6.3 Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred (if any), and lease payments made at or before the commencement date less lease
incentives received (if any). Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of
the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated
useful life and the lease term. Right-of-use assets are subject to impairment.
6.4 Stores, spares and loose tools
These are generally held for internal use and are valued at cost. Cost is determined on the basis of moving average except for
items in transit, which are valued at invoice price plus related cost incurred up to the reporting date. For items which are
considered obsolete, the carrying amount is written down to nil. Spare parts held for capitalization are classified as property,
plant and equipment through capital work in progress.
6.5 Stock in trade
These are valued at lower of cost and net realizable value, with the exception of stock of waste which is valued at net realizable
value. Cost is determined using the following basis:
Raw materials Moving average cost

Work in process Average manufacturing cost
Finished goods Average manufacturing cost
Stock in transit Invoice price plus related cost incurred up to the reporting date
Average manufacturing cost in relation to work in process and finished goods consists of direct material, labour and an
appropriate proportion of manufacturing overheads.
Net realizable value signifies the estimated selling price in the ordinary course of business less estimated costs of completion
and estimated costs necessary to make the sale.
6.6 Employee benefits
6.6.1 Short-term employee benefits
The Company recognizes the undiscounted amount of short term employee benefits to be paid in exchange for services
rendered by employees as a liability after deducting amount already paid and as an expense in profit or loss unless it is
included in the cost of inventories or property, plant and equipment as permitted or required by the approved accounting
and reporting standards as applicable in Pakistan. If the amount paid exceeds the undiscounted amount of benefits, the
excess is recognized as an asset to the extent that the prepayment would lead to a reduction in future payments or cash
refund.
The Company provides for compensated absences of its employees on un-availed balance of leaves in the period in which
the leaves are earned.
6.6.2 Post-employment benefits
The Company operates an approved funded contributory provident fund for all its permanent employees who have
completed the minimum qualifying period of service as defined under the respective scheme. Equal monthly contributions
are made both by the Company and the employees at the rate of ten percent of basic salary and cost of living allowance,
where applicable, to cover the obligation. Contributions are charged to profit or loss.
6.7 Financial instruments
6.7.1 Recognition
A financial instrument is recognized when the Company becomes a party to the contractual provisions of the instrument.
6.7.2 Classification
The Company classifies its financial assets on the basis of the Company's business model for managing the financial assets
and the contractual cash flow characteristics of the financial asset. Financial liabilities are classified in accordance with the
substance of contractual provisions. The Company determines the classification of its financial instruments at initial
recognition as follows:
(a) Financial assets at amortized cost
These are financial assets held within a business model whose objective is to hold financial assets in order to collect
solely payments of principal and interest on the principal amount outstanding.
(b) Financial assets at fair value through profit or loss
These are financial assets which have not been classified as 'financial assets at amortized cost' or as 'financial assets at fair
value through other comprehensive income', are mandatorily measured at fair value through profit or loss or for which
the Company makes an irrevocable election at initial recognition to designate as 'financial asset at fair value through
profit or loss' if doing so eliminates or significantly reduces a measurement or recognition inconsistency.
(c) Financial liabilities at amortized cost
These are financial liabilities which are not derivatives, financial guarantee contracts, commitments to provide loans at
below-market interest rate, contingent consideration payable to an acquirer in a business combination or financial
liabilities that arise when transfer of a financial asset does not qualify for derecognition.
6.7.3 Measurement
The particular measurement methods adopted are disclosed in individual policy statements associated with each financial
instrument.
6.7.4 Derecognition
A financial asset is derecognized when the Company's contractual rights to the cash flows from the financial assets expire or
when the Company transfers the financial asset to another party without retaining control of substantially all risks and rewards
of the financial asset. A financial liability is derecognized when the Company's obligations specified in the contract are
expired, discharged or cancelled.
6.7.5 Off-setting
A financial asset and financial liability is offset and the net amount reported in the statement of financial position if the
Company has legally enforceable right to set-off the recognized amounts and intends either to settle on a net basis or to
realize the asset and settle the liability simultaneously.
6.7.6 Regular way purchases or sales of financial assets
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame
established by regulation or convention in the market place. Regular way purchases or sales of financial assets are
recognized and derecognized on a trade date basis.
6.8 Ordinary share capital
Ordinary share capital is recognized as equity. Transaction costs directly attributable to the issue of ordinary shares are
recognized as deduction from equity.
6.9 Preference share capital
Preference share capital is recognized as equity in accordance with the interpretation of the provision of the repealed
Companies Ordinance, 1984, including those pertaining to implied classifications of preference shares.
6.10 Loans and borrowings
Loans and borrowings are classified as 'financial liabilities at amortized cost'. On initial recognition, these are measured at
cost, being fair value at the date the liability is incurred, less attributable transaction costs. Subsequent to initial recognition,
these are measured at amortized cost with any difference between cost and value at maturity recognized in the profit or loss
over the period of the borrowings on an effective interest basis.
6.11 Investments in equity securities
6.11.1 Investments in associates
Investments in associates are accounted for using the equity method of accounting. Under the equity method, investments in
associates are carried in the consolidated statement of financial position at cost as adjusted for post acquisition changes in
the Company's share of net assets of the associate, less any impairment in the value of investment. Losses of an associate in
excess of the Company's interest in that associate (which includes any long term interest that, in substance, form part of the
Company's net investment in the associate) are recognized only to the extent that the Company has incurred legal or
constructive obligation or made payment on behalf of the associate.
6.11.2 Investments in other quoted equity securities
Investments in quoted equity securities are classified as 'financial assets at fair value thorugh profit or loss'. On initial
recognition, these are measured at fair value on the date of acquisition. Subsequent to initial recognition, these are measured
at fair value. Changes in fair value are recognized in profit or loss. Gains and losses on de-recognition are recognized in profit
or loss. Dividend income is recognized in profit or loss when right to receive payment is established.
6.12 Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase
option reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease
term reflects the Company exercising the option to terminate. The variable lease payments that do not depend on an index or
a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses if the interest rate implicit in the lease. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the
lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying
asset.
6.13 Short-term leases
The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease
term of twelve months or less from the commencement date and do not contain a purchase option). Lease payments on
short-term leases are recognised as expense on a straight-line basis over the lease term.
6.14 Ijarah transactions
Ujrah payments under an Ijarah are recognized as an expense in the profit or loss on a straight-line basis over the Ijarah terms
unless another systematic basis are representative of the time pattern of the user's benefit, even if the payments are not on
that basis.
6.15 Trade and other payables
6.15.1 Financial liabilities
These are classified as 'financial liabilities at amortized cost'. On initial recognition, these are measured at cost, being their fair
value at the date the liability is incurred, less attributable transaction costs. Subsequent to initial recognition, these are
measured at amortized cost using the effective interest method, with interest recognized in profit or loss.
6.15.2 Non-financial liabilities
6.16 Provisions and contingencies
Provisions are recognized when the Company has a legal and constructive obligation as a result of past events and it is
probable that outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of obligation. Provision is recognized at an amount that is the best estimate of the
expenditure required to settle the present obligation at the reporting date. Where outflow of resources embodying
economic benefits is not probable, or where a reliable estimate of the amount of obligation cannot be made, a contingent
liability is disclosed, unless the possibility of outflow is remote.
6.17 Trade and other receivables
These are classified as 'financial assets at amortized cost'. On initial recognition, these are measured at fair value at the date of
transaction, plus attributable transaction costs, except for trade debts that do not have a significant financing component,
which are measured at undiscounted invoice price. Subsequent to initial recognition, these are measured at amortized cost
using the effective interest method, with interest recognized in profit or loss.
6.18 Contracts with customers
6.18.1 Revenue
Revenue is measured based on the consideration specified in a contract with a customer. The Company recognises revenue
from a contract with customer when the Company satisfies an obligation specified in that contract. The following table
provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers,
including significant payment terms, and the related revenue recognition policies.

Home appliances Performance obligation are satisfied when customers Revenue is recognised over time using
obtain control of home appliances when these are the output method based on
Refrigerators, deep delivered to and have been accepted at their premises. measurements of the value of services
freezers, air Invoices are generated at that point in time. Invoices are transferred to date, relative to the
conditioners, usually payable within a period ranging from 30 days to remaining services promised under the
microwave ovens, LED 90 days, except for retail sales which are payable at the contract.
TVs, washing time of purchase. Discounts are allowed based on the
machines, water payment terms and volume of sales. There are no
dispensers and other customer loyalty programs. These contracts do not
home appliances. permit the customer to return any item. However, there
are warranty provisions in place which provide for the
Company's obligations for service/replacement of
products where these do not meet the agreed
specifications or otherwise do not perform as
guaranteed by the Company.

Electrical capital Performance obligation are satisfied when customers Revenue is recognised when the goods
goods obtain control of electrical capital goods when these are are delivered and have been accepted
delivered to and have been accepted at their premises. by customers at their premises.
Invoices are generated at that point in time. Invoices,
Transformers, where customer is the Federal/Provincial Government,
switchgears, energy are payable in accordance with the tender documents,
meters usually upto 90 days. For private customers, invoices are
paid for in advance. These products do not carry any
discounts. There are no customer loyalty programs.
These contracts do not permit the customer to return any
item. However, there are warranty provisions in place
which provide for the Company's obligations for
service/replacement of products where these do not
meet the agreed specifications or otherwise do not
perform as guaranteed by the Company.
Construction contracts The Company constructs power grid stations for Revenue is recognised over time using
Government as well as private customers. Performance the output method based on
obligations are satisfied over time by reference to stage measurements of the value of services
Engineering, of completion of contract activity at the balance sheet transferred to date, relative to the
procurement and date. Invoices are issued according to contractual terms remaining services promised under the
construction services and are usually payable within a period ranging from 30 contract.
days to 90 days, except for those contracts for which
transaction price has been received in advance. A
percentage of transaction price is retained by
Government customers as 'retention money' from
payments to the Company, which is released on expiry of
an agreed period after completion of contract activity.
Uninvoiced amounts are presented as contract assets.
6.18.2 Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. The Company
recognizes a contract asset for the earned consideration that is conditional if the Company performs by transferring goods or
services to a customer before the customer pays consideration or before payment is due.
6.18.3 Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received
consideration from the customer. A contract liability is recognized at earlier of when the payment is made or the payment is
due if a customer pays consideration before the Company transfers goods or services to the customer.
6.18.4 Warranty obligations
The Company accounts for its warranty obligations when the underlying product or service is sold or rendered. The provision
is based on historical warranty data and weighing-in various possible outcomes against their associated probabilities.
6.19 Comprehensive income
Comprehensive income is the change in equity resulting from transactions and other events, other than changes resulting
from transactions with shareholders in their capacity as shareholders. Total comprehensive income comprises all
components of profit or loss and other comprehensive income ['OCI']. OCI comprises items of income and expense,
including reclassification adjustments, that are not recognized in profit or loss as required or permitted by approved
accounting and reporting standards as applicable in Pakistan, and is presented in 'statement of other comprehensive
income'.
6.20 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the
temporary investment of specific borrowings pending their expenditure on qualifying asset is deducted from the borrowing
costs eligible for capitalization. All other borrowing costs are recognized in profit or loss as incurred.
6.21 Income tax
Income tax expense comprises current tax and deferred tax. Income tax expense is recognized in profit or loss except to the
extent that it relates to items recognized directly in other comprehensive income, in which case it is recognized in other
comprehensive income.
6.21.1 Current taxation
Current tax is the amount of tax payable on taxable income for the year and any adjustment to the tax payable in respect of
previous years. Provision for current tax is based on current rates of taxation in Pakistan after taking into account tax credits,
rebates and exemptions available, if any. The amount of unpaid income tax in respect of the current or prior periods is
recognized as a liability. Any excess paid over what is due in respect of the current or prior periods is recognized as an asset.
6.21.2 Deferred taxation
Deferred tax is accounted for using the' balance sheet approach' providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. In this regard, the
effects on deferred taxation of the portion of income that is subject to final tax regime is also considered in accordance with
the treatment prescribed by The Institute of Chartered Accountants of Pakistan. Deferred tax is measured at rates that are
expected to be applied to the temporary differences when they reverse, based on laws that have been enacted or
substantively enacted by the reporting date. A deferred tax liability is recognized for all taxable temporary differences. A
deferred tax asset is recognized for deductible temporary differences to the extent that future taxable profits will be available
against which temporary differences can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will be realized.
6.22 Government grants
Government grants that compensate the Company for expenses or losses already incurred are recognized in profit or loss in
the period in which these are received and are deducted in reporting the relevant expenses or losses. Grants relating to
property, plant and equipment are recognized as deferred income and an amount equivalent to depreciation charged on
such assets is transferred to profit or loss.
6.23 Earnings per share ['EPS']
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the year.
Diluted EPS is calculated by adjusting basic EPS by the weighted average number of ordinary shares that would be issued on
conversion of all dilutive potential ordinary shares into ordinary shares and post-tax effect of changes in profit or loss
attributable to ordinary shareholders of the Company that would result from conversion of all dilutive potential ordinary
shares into ordinary shares.
6.24 Cash and cash equivalents
Cash and cash equivalents for the purpose of cash flow statement comprise cash in hand and cash at banks. Interest income
on cash and cash equivalents is recognized using effective interest method.
6.25 Foreign currency transactions and balances
Transactions in foreign currency are translated to the functional currency of the Company using exchange rate prevailing at
the date of transaction. Monetary assets and liabilities denominated in foreign currency are translated to the functional
currency at exchange rate prevailing at the reporting date. Non-monetary assets and liabilities denominated in foreign
currency that are measured at fair value are translated to the functional currency at exchange rate prevailing at the date the
fair value is determined. Non-monetary assets and liabilities denominated in foreign currency that are measured at historical
cost are translated to functional currency at exchange rate prevailing at the date of initial recognition. Any gain or loss arising
on translation of foreign currency transactions and balances is recognized in profit or loss.
6.26 Impairment
The Company recognizes a loss allowance for expected credit losses on financial assets carried at amortized cost on date of
initial recognition. The amount of expected credit losses is updated on each reporting date to reflect the changes in credit
risk since initial recognition of the respective financial asset.
Impairment is recognized at an amount equal to lifetime expected credit losses for financial assets for which credit risk has
increased significantly since initial recognition. For financial assets for which credit risk is low, impairment is recognized at an
amount equal to twelve months' expected credit losses, with the exception of trade debts, for which the Company
recognises lifetime expected credit losses estimated using internal credit risk grading based on the Company's historical
credit loss experience, adjusted for factors that are specific to debtors, general economic conditions, and an assessment for
both the current as well as the forecast direction of conditions at the reporting date, including time value of money where
appropriate.
All impairment losses are recognized in profit or loss. An impairment loss is reversed if the reversal can be related objectively
to an event occurring after the impairment loss was recognized. An impairment loss is reversed only to the extent that the
financial asset’s carrying amount after the reversal does not exceed the carrying amount that would have been determined,
net of amortization, if no impairment loss had been recognized.
The Company writes off a financial asset when there is information indicating that the counter-party is in severe financial
condition and there is no realistic prospect of recovery. Any recoveries made post write-off are recognized in profit or loss.
The carrying amount of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated. The recoverable amount of an asset or cash generating unit is the greater of its value in use
and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present
values using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset or cash generating unit.
An impairment loss is recognized if the carrying amount of the asset or its cash generating unit exceeds its estimated
recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of cash
generating units are allocated to reduce the carrying amounts of the assets in a unit on a pro rata basis. Impairment losses
recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the estimates used in determining the recoverable
amount. An impairment loss is reversed only to that extent that the asset’s carrying amount after the reversal does not exceed
the carrying amount that would have been determined, net of depreciation and amortization, if no impairment loss had been
recognized.
6.27 Dividend distribution to ordinary shareholders
Dividend to ordinary shareholders is recognized as a deduction from accumulated profit in statement of changes in equity
and as a liability, to the extent it is unclaimed/unpaid, in the Company’s financial statements in the year in which the dividends
are approved by the Company’s shareholders.
6.28 Basis of allocation of common expenses
Distribution, administrative and finance cost are allocated to PEL Marketing (Private) Limited ['PMPL'] on the basis of
percentage of resources used by PMPL, under the interservices agreement between the Company and PMPL.
6.29 Segment reporting
Segment reporting is based on the operating segments that are reported in the manner consistent with internal reporting of
the Company. An operating segment is a component of the Company that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s
other components. An operating segment’s operating results are reviewed regularly by the Chief Executive Officer to make
decisions about resources to be allocated to the segment and assess its performance and for which discrete financial
information is available.
Segment results that are reported to the Chief Executive Officer include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Unallocated items comprise mainly other operating income and expenses,
share of profit/(loss) of associates, finance costs, and provision for taxes.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment. The
business segments are engaged in providing products or services which are subject to risks and rewards which differ from
the risk and rewards of other segments.
7 AUTHORIZED CAPITAL
2019 2018 2019 2018

500,000,000 500,000,000 Ordinary shares of Rs. 10 each 5,000,000 5,000,000
62,500,000 62,500,000 'A' class preference shares of Rs. 10 each 625,000 625,000
37,500,000 37,500,000 'B' class preference shares of Rs. 10 each 375,000 375,000
100,000,000 100,000,000 1,000,000 1,000,000
600,000,000 600,000,000 6,000,000 6,000,000
8 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
2019 2018 2019 2018

Ordinary shares of Rs. 10 each

372,751,051 372,751,051 Issued for cash 3,727,511 3,727,511
Issued for other than cash:
137,500 137,500 - against machinery 1,375 1,375
408,273 408,273 - against acquisition of PEL Appliances Limited 4,083 4,083
6,040,820 6,040,820 - against conversion of preference shares 60,408 60,408
118,343,841 118,343,841 - as fully paid bonus shares 1,183,439 1,183,439
497,681,485 497,681,485 4,976,816 4,976,816
'A' class preference shares of Rs. 10 each
44,957,592 44,957,592 Issued for cash 449,576 449,576
542,639,077 542,639,077 5,426,392 5,426,392
8.1 'A' class preference shares
8.1.1 Current status of original issue
The Company, in the December 2004, issued 'A' class preference shares to various institutional investors amounting to Rs.
605 million against authorized share capital of this class amounting to Rs. 625 million. In Januray 2010, the Company sent out
notices to all preference shareholders seeking conversion of outstanding preference shares into ordinary shares of the
Company in accordance with the option available to the investors under the original terms of the issue. As at the reporting
date, the outstanding balance of preference shares amounts to Rs. 449.58 million representing investors who did not opt to
convert their holdings into the ordinary shares of the Company. Subsequently, the Company offered re-profiling of
preference shares to these remaining investors. See note 8.1.2.
The Securities and Exchange Commission of Pakistan ['SECP'] issued order to Pakistan Stock Exchange Limited ['the
Exchange'] dated February 6, 2009 for delisting of these preference shares. However, the Company took up the matter with
the honorable Lahore High Court which, through order dated October 10, 2017, accepted the appeal of Company and set
aside the SECP order and the appellate order.
8.1.2 Re-profiling of preference shares
The Company offered re-profiling of preference shares to investors, who did not convert their preference shares into
ordinary shares in response to the conversion notices issued by the Company. The investors to the instrument had, in
principle, agreed to the re-profiling term sheet and commercial terms and conditions therein. Further, SECP had allowed the
Company to proceed with the re-profiling subject to fulfillment of legal requirements. The legal documentation was
prepared and circulated amongst the concerned investors which was endorsed by the said investors except for National
Bank of Pakistan, as a result of which the original time frame for re-profiling has lapsed. The Company is in the process of
finalising another re-profiling exercise based on mutual agreement to be made amongst the existing investors.
8.1.3 Accumulated preference dividend
As at reporting date, an amount of approximately Rs. 427.098 million (2018: Rs. 384.39 million) has been accumulated on
account of preference dividend which is payable if and when declared by the Board, to be appropriated out of the
distributable profits for that year. In case the preference dividend continues to be accumulated it would be settled at the time
of exercising the redemption or conversion option in accordance with the under process re-profiling exercise.
As per the opinion of Company's legal counsel, the provision of cumulative dividend at 9.5% p.a. will prevail on account of
preference dividend, as the approval process of the revised terms of re-profiling from different quarters is not yet complete.
9 CAPITAL RESERVE
This represents premium on issue of right ordinary shares recognized under Section 83(1) of the repealed Companies
Ordinance, 1984.
Note 2019 2018

10 SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT
As at beginning of the year 6,579,049 4,274,019
Surplus recognized during the year

Surplus for the year - 3,045,215
Deferred taxation - (672,091)
- 2,373,124
Incremental depreciation transferred to accumulated profits
Incremental depreciation for the year (716,624) (280,450)
Deferred taxation 187,960 80,626
(528,664) (199,824)
Other adjustments
Deferred tax adjustment attributable to changes in proportion
of income taxable under final tax regime (26,753) 79,462
Deferred tax adjustment attributable to changes in tax rates - 52,268
(26,753) 131,730
As at end of the year 6,023,632 6,579,049
11 REDEEMABLE CAPITAL
These represent interest/markup/profit based debt securities issued to institutional and other investors. The details are as
follows:
Shariah compliant
Sukuk Funds - 101,875 Three months KIBOR plus 1% Charge on present and These were issued for the purpose of refinance of existing machinery with
per annum (2018: Three future operating fixed diminishing musharaka facility.
months KIBOR plus 1% per assets of the Company. Later, the Company entered into restructuring arrangement, whereby, the
annum) subject to floor and outstanding principal was deferred till June 2015 with the outstanding liability
cap of 8% and 16% payable in sixteen equal quarterly installments commencing from June 2015. The
respectively. Company has fully redeemed these Sukuk Funds during the year.
Total - 101,875
Current portion presented under current liabilities - (101,875)
- -
12 LONG TERM FINANCES
These represent long term finances utilized under interest/markup/profit arrangements from banking companies and
financial institutions. The details are as follows:
Shariah compliant
Diminishing Musharakah 642,857 750,000 Three months KIBOR plus 1% Charge over operating The finance has been obtained from Faysal Bank Limited for the purpose of
per annum (2018: Three fixed assets of the balancing modernization and replacement requirements. The finance is
months KIBOR plus 1% per Company and personal repayable in fourteen equal quarterly installments commencing from August
annum). g u a ra n t e e s o f 2019.
the Company.
Diminishing Musharakah 1,000,000 - Three months KIBOR plus Charge over present and The finance has been obtained from Faysal Bank Limited for the purpose of
1.5% per annum. future fixed assets of the working capital rquirement and for construction of washing machine unit and
Company and personal warehouse/godown. The finance is repayable in fifteen equal quaterly
g u a ra n t e e s o f installments commencing from February 2020.
Interest based arrangements the Company.
Term Finance 208,333 375,000 Three months KIBOR plus Charge over fixed assets The finance has been obtained from Pak Oman InvestmentCompany Limited for
3.8% per annum (2018:Three of the Company and the purpose of financing capital expenditure. The finance is repayable in twelve
months KIBOR plus 3.8% per personal guarantees of equal quarterly installments commencing from April 2018.
annum). sposoring directos of
the Company.
Term Finance 1,071,429 1,928,571 Three months KIBOR plus Charge over operating The finance has been obtained from Bank Alfalah Limited for the purpose of
1.25% per annum (2018: fixed assets of the financing the repayment of existing long term loans of the PEL. The finance is
Three months KIBOR plus Company and personal repayable in fourteen equal quarterly installments commencing from December
1.25% per annum). guarantees of sposoring 2017.
directos of the
Company.
Term Finance - 14,517 Three months KIBOR plus Charge over operating The finance was obtained from The Bank of Punjab for the purpose of financing
2.10% per annum. (2018: fi x e d a s s e t s o f t h e capital expenditure. The finance has been fully repaid during the year.
Three months KIBOR plus Company and personal
2.10% per annum). g u a ra n t e e s o f
the Company.
Term finance 130,122 - Three months KIBOR plus Charge over operating The finance has been obtained from The Bank of Punjab for the purpose of
1.5% per annum. fixed assets of the erection of new power transformer manufacturing facility. The finance is
Company and personal repayable in sixteen equal quarterly installments commencing from September
g u a ra n t e e s o f 2020.
the Company.
Term Finance 131,250 - Three months KIBOR plus 2% Charge over operating The finance has been obtained from Pak Oman InvestmentCompany Limited for
per annum. fi x e d a s s e t s o f t h e the purpose of financing capital expenditure. The finance is repayable in sixteen
Company and personal equal quarterly installments commencing from August 2019.
g u a ra n t e e s o f
the Company.
Term Finance 500,000 - Three months KIBOR plus Charge over operating The finance has been obtained from Saudi Pak Industrial and Agricultural
2.25% per annum. fixed assets of the Investment Company Limited for the purpose of refinancing capital expenditure.
Company and personal The finance is repayable in sixteen equal quarterly installments commencing
g u a ra n t e e s o f from October 2020.
the Company.
Demand Finance 315,769 568,384 Three months KIBOR plus 2% Charge over operating This represents demand finance facility sanctioned by National Bank of Pakistan
per annum (2018: Three fixed assets of the against an upfront payment of Rs.1,650 million against Private Placed Term Finance
months KIBOR plus 2% per Company and personal Certificates. The finance is repayable in sixteen equal quarterly installments
annum). g u a ra n t e e s o f commencing from April 2017.
the Company.
Demand Finance 407,643 679,406 Three months KIBOR plus Charge over present and The finance has obtained from National Bank of Pakistan for settlement of long
2.25% per annum (2018: future current assets of term finances obtained from MCB Bank (Ex. NIB Bank Limited). The finance is
Three months KIBOR plus the Company and repayable in twenty three equal quarterly installments commencing from
2.25% per annum). personal guarantees of September 2015.
the Company.
2,764,546 3,565,878
Total 4,407,403 4,315,878
Current portion presented under current liabilities (2,245,249) (1,669,846)
2,162,154 2,646,032
Note 2019 2018

13 LEASE LIABILITIES
Present value of minimum lease payments 13.1 & 13.2 241,094 102,368
Current portion presented under current liabilities 13.1 & 13.2 (103,708) (42,590)
137,386 59,778
13.1 These represent vehicles and machinery acquired under finance lease arrangements. The leases are priced at rates ranging
from three months KIBOR to six months KIBOR plus 1.5% to 3% per annum (2018: six months to one year KIBOR plus 1.5% to
4.5% per annum). Lease rentals are payable monthly over a tenor ranging from 3 to 4 years. Under the terms of agreement,
taxes, repairs, replacements and insurance costs in respect of assets subject to finance lease are borne by the Company. The
Company also has the option to acquire these assets at the end of their respective lease terms by adjusting the deposit
amount against the residual value of the asset and intends to exercise the option.
13.2 The amount of future payments under the finance lease arrangements and the period in which these payments will become
due are as follows:
Note 2019 2018

Not later than one year 133,420 50,351

Total future minimum lease payments 285,779 114,924
Finance charge allocated to future periods (44,685) (12,556)
Present value of future minimum lease payments 241,094 102,368
Not later than one year 19 (103,708) (42,590)
14 WARRANTY OBLIGATIONS
This represents provision for warranties related to goods sold during the current and previous years. The Company expects
to settle majority of the liability over the next three years.
Note 2019 2018

Present value of warranty obligations 357,915 -

Current portion presented under current liabilities 17 (237,905) -
120,010 -
14.1 Movement in warranty obligations

As at beginning of the year - -
Impact of application of IFRS 15 14.1.1 312,955 -
As at beginning of the year - as adjusted 312,955 -
Amounts charged against the provision (188,441) -
Unwinding of the discount/changes in discount rate 9,479 -
Addition during the year 237,345 -
Excess provision reversed (13,423) -
As at end of the year 357,915 -
14.1.1 The Company has recognized the cummulative effect of initially applying IFRS 15 as adjustment to opening balance as at
January 01, 2019. Accordingly, the comparative information has not been restated.
Note 2019 2018

15 DEFERRED TAXATION
Deferred tax liability on taxable temporary differences 15.1 3,982,402 3,708,750

Deferred tax asset on deductible temporary differences 15.1 (1,497,931) (1,284,805)
2,484,471 2,423,945
15.1 Recognized deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
2019
Operating fixed assets - owned 3,678,339 241,572 26,753 3,946,664
3,708,750 246,899 26,753 3,982,402
Deferred tax assets
Provisions (189,804) (88,073) - (277,877)
Unused tax losses and credits (1,087,859) (132,195) - (1,220,054)
Long term investments (7,142) 7,142 - -
(1,284,805) (213,126) - (1,497,931)
2,423,945 33,773 26,753 2,484,471
2018
Operating fixed assets - owned 3,351,793 (213,815) 540,361 3,678,339
3,379,016 (210,627) 540,361 3,708,750
Deferred tax assets
Provisions (217,668) 27,864 - (189,804)
Unused tax losses and credits (1,236,102) 148,243 - (1,087,859)
Long term investments (6,863) (279) - (7,142)
(1,460,633) 175,828 - (1,284,805)
1,918,383 (34,799) 540,361 2,423,945
15.2 Deferred tax arising from the timing differences pertaining to income taxable under normal provisions and as a separate
block of the Income Tax Ordinance, 2001 ['the Ordinance'] has been calculated at 29% and 15% (2018: 29% and 15%)
respectively of the timing differences based on tax rates notified by the Government of Pakistan for future tax years for such
income.
2019 2018
16 DEFERRED INCOME

Recognized in profit or loss (1,839) (1,936)
16.1 The UNIDO vide its contract number 2000/257 dated December 15, 2000, out of the multilateral fund for the implementation
of the Montreal Protocol, has given grant-in-aid to the Company for the purpose of phasing out ODS at the Refrigerator and
Chest Freezer Plant of the Company. The total grant-in-aid of USD 1,367,633 (Rs. 91,073,838) comprises the capital cost of
the project included in fixed assets amounting to USD 1,185,929 (Rs. 79,338,650) and grant recoverable in cash of USD
181,704 (Rs. 11,735,188) being the incremental operating cost for six months.
The grant received in cash amounting to Rs.11,735,188 was recognized as income in the year of receipt i.e. year ended June
30, 2001. The value of machinery received in grant was capitalized in year 2001 which started its operation in January 2003.
The grant amounting to Rs. 1.839 million (2018: Rs. 1.936 million) has been included in other income in proportion to
depreciation charged on related plant and machinery keeping in view the matching principle.
Note 2019 2018

17 TRADE AND OTHER PAYABLES

Foreign bills payable 17.1 101,960 108,823
Advances from customers 70,125 77,154
1,074,549 823,850
17.1 Foreign bills payable are secured against bills of exchange accepted by the Company in favour of suppliers.
Note 2019 2018

17.2 Workers' Profit Participation Fund

Interest on funds utilized by the Company 40 1,516 4,940
Paid during the year (28,281) (87,397)
17.2.1 Interest on funds utilized by the Company has been recognized at 13.59% (2018: 9%) per annum.
Note 2019 2018

17.3 Workers' Welfare Fund

Paid/adjusted during the year (10,173) (30,972)
18 SHORT TERM BORROWINGS
Secured
Short term finances utilized under interest/markup/profit arrangements from
- Banking companies - Interest based arrangements 18.1 9,149,436 10,788,911
- Banking companies - Shariah compliant 18.1 1,756,054 1,854,937
- Non Banking Finance Companies ['NBFC's'] 18.2 50,000 200,000
10,955,490 12,843,848
18.1 These facilities have been obtained from various banking companies for working capital requirements and carry
interest/markup/profit at rates ranging from 8.03% to 16.86% (2018: 7.11% to 12.3%) per annum. These facilities are secured
by pledge / hypothecation of raw material and components, work-in-process, finished goods, imported goods, machinery,
spare parts, charge over book debts and personal guarantees of the sponsoring directors of the Company. These facilities
are generally for a period of one year and renewed at the end of the period.
18.2 These facilities have been obtained from NBFCs for working capital requirements and carry interest/markup at rates ranging
from 11.60% to 12.05% (2018: 7.12% to 11.55%) per annum. These facilities are secured by charge over operating fixed
assets of the Company and personal guarantees of the directors of the Company.
18.3 The aggregate un-availed short term borrowing facilities as at the reporting date amounts to Rs. 9,566 million (2018: Rs.
10,464 million).
Note 2019 2018

19 CURRENT PORTION OF NON-CURRENT LIABILITIES
Redeemable capital 11 - 101,875

Liabilities against assets subject to finance lease 13 103,708 42,590
2,348,957 1,814,311
20 CONTINGENCIES AND COMMITMENTS
20.1 Contingencies
20.1.1 Various banking and insurance companies have issued guarantees, letters of credit and discounted receivables on behalf of
the Company as detailed below:
2019 2018
Tender bonds 416,312 488,314

Performance bonds 2,638,598 2,863,884
Advance guarantees 390,174 647,033
Custom guarantees 87,670 72,064
Foreign guarantees 91,598 80,682
20.1.2 The Company may have to indemnify its Directors for any losses that may arise due to personal guarantees given by them for
securing the debts of the Company, in case the Company defaults.
20.1.3 Section 5A imposes tax rate at 5% of the accounting profit before tax of a public company that does not distribute atleast 20%
of its after tax profits as cash dividend within six months of the end of the tax year.
No provision for income tax on undistributed profits, has been made as the matter is subjudice before Lahore High Court and
the management of the Company expects a favorable outcome.
20.1.4 The Finance Act, 2015 introduced Super Tax for rehabilitation of temporarily displaced persons vide newly inserted section
4B to the Ordinance whereby, at rates ranging from 2% to 3% of the income equal to or exceeding Rs. 500 million. No
provision for Super Tax has been made for tax years 2015 to 2019 as the matter is subjudice before Honorable Supreme
Court. The Company is not in a position to state about the outcome of the matter, which is entirely dependent on the
judgement of aforesaid Apex Superior Court.
20.1.5 Appeal of the Company for the tax years 2009, 2016 and 2017 were decided by the Commissioner Inland Revenue (Appeals)
[‘CIR(A)’]. The issues involve in these appeals were mostly those concerning allowance/disallowance of various expenses.
Appeals have been filed by Company as well as the Department before the Appellate Tribunal which are pending. The
management expects to get adequate relief from the Appellate Authority and no additional tax liability is expected to arise.
20.1.6 The Company claimed adjustment for the minimum tax paid amounting to Rs. 150.925 million in tax year 2017 and Rs.
350.821 million in tax year 2015 aggregating to Rs. 550.751 million. Minimum tax of Rs. 725.575 million was paid despite
losses sustained in the Tax Years 2010 to 2015. The CIR(A) placing reliance on the decisions of the Appellate Tribunal and
judgement of the Lahore High Court has conclude that in view if the loses sustained the Appellant is entitled to tax credit in
terms of Section 113(2)(c). The Department and Company has filed appeals before the honorable tribunal which are
pending.
2019 2018
20.2 Commitments
20.2.1 Commitments under irrevocable letters of credit for import of

stores, spare parts and raw material 682,628 2,012,639
20.2.2 Commitments under ijarah contracts
The aggregate amount of ujrah payments for ijarah financing and the period in which these payments will become due are as
follows:
2019 2018
- payments not later than one year 79,822 13,295

- payments later than one year 169,728 16,139
249,550 29,434
J 36
21 PROPERTY, PLANT AND EQUIPMENT

2019
Assets owned by the Company

Land 1,035,256 - - - - 1,035,256 - - - - - - 1,035,256
Building 5,683,232 - - - 2,513,713 8,196,945 5 2,238,728 186,915 - - 2,425,643 5,771,302
Plant and machinery 21,808,411 416,092 - (313,602) 1,134,546 23,045,447 5 8,010,621 706,155 - 5,431 8,722,207 14,323,240
Vehicles 301,123 16,839 - (49,775) 34,914 303,101 20 153,633 30,719 - (6,869) 177,483 125,618
29,151,392 475,312 - (422,115) 3,683,173 32,887,762 10,590,912 955,416 - (42,768) 11,503,560 21,384,202
Right-of-use assets
-
Vehicles 100,139 48,431 - - (34,914) 113,656 20 36,754 12,227 - (20,326) 28,655 85,001
261,503 235,611 - - (86,334) 410,780 43,188 19,238 - (27,060) 35,366 375,414

Building 2,433,970 701,024 - - (2,513,713) 621,281 - - - - - 621,281
Plant and machinery 744,250 897,039 - - (1,083,126) 558,163 - - - - - 558,163
3,178,220 1,598,063 - - (3,596,839) 1,179,444 - - - - - 1,179,444
32,591,115 2,308,986 - (422,115) - 34,477,986 10,634,100 974,654 - (69,828) 11,538,926 22,939,060

2018
Assets owned by the Company

Land 552,488 - 482,768 - - 1,035,256 - - - - - - 1,035,256
Building 4,520,323 - 1,162,909 - - 5,683,232 5 1,636,443 144,194 458,091 - 2,238,728 3,444,504
Plant and machinery 18,543,220 391,790 2,936,118 (114,785) 52,068 21,808,411 5 6,308,542 614,754 1,078,489 8,836 8,010,621 13,797,790
-
Vehicles 309,313 18,583 - (45,906) 19,133 301,123 20 130,398 34,622 - (11,387) 153,633 147,490
24,280,830 457,499 4,581,795 (239,933) 71,201 29,151,392 8,304,298 822,134 1,536,580 (72,100) 10,590,912 18,560,480
Right-of-use assets
Vehicles 102,834 16,438 - - (19,133) 100,139 20 32,815 14,130 - (10,191) 36,754 63,385
206,322 126,382 - - (71,201) 261,503 43,568 18,767 - (19,147) 43,188 218,315

Building 1,010,883 1,423,087 - - - 2,433,970 - - - - - 2,433,970
Plant and machinery 255,544 488,706 - - - 744,250 - - - - - 744,250
1,266,427 1,911,793 - - - 3,178,220 - - - - - 3,178,220
25,753,579 2,495,674 4,581,795 (239,933) - 32,591,115 8,347,866 840,901 1,536,580 (91,247) 10,634,100 21,957,015
21.1 Property, plant and equipment includes fully depreciated assets of Rs. 70.2 million (2018: Rs. 64.54 million) which are still in use of the Company.
21.2 Land is located at Mouza Kot Islampura, 34 - K.M, Ferozepur Road, Lahore with a total area of 511 Kanals (2018: 511 Kanals) and at 14 - K.M, Ferozepur Road, Lahore and Plot # 302-303,
Gadoon Industrail Area, Gadoon Amazai with a total area of 322 Kanals 15 Marla (2018: 322 Kanals 15 Marla).
Annual Report 2019
J 37
21.3 Disposal of operating fixed assets
2019
Plant and machinery
Lamination Cutting Line TBA300 131,237 - 131,237 131,237 - Sales and Lease Back Orix modaraba, Lahore
Servo Hydro Mechanical Clamping 175,119 1,303 173,816 187,180 13,364 Sales and Lease Back Sindh Leasing Company
Step Lap Lamination DTR 7,246 - 7,246 - (7,246) Sales and Lease Back Orix modaraba, Lahore
313,602 1,303 312,299 318,417 6,118
Table and chairs 31,975 21,914 10,061 199 (9,862) Negotiation Scrap sale
Mobile sets 1,018 280 738 - (738) Negotiation Scrap sale
Miscellaneous office items 18,561 12,349 6,212 2,875 (3,337) Negotiation Scrap sale
less than Rs. 500,000 each 1,169 828 341 156 (185) Negotiation Scrap sale
52,723 35,371 17,352 3,230 (14,122)
less than Rs. 500,000 each 6,015 5,959 56 62 6 Negotiation Scrap sale
Vehicles
Audi A6 11,910 7,082 4,828 10,500 5,672 Negotiation Synergy Technology, Lahore.
Toyota Fortuner 6,229 2,126 4,103 3,229 (874) As Per Company Policy Amer Hamza (employee), Lahore.
Suzuki Jimny 2,293 1,579 714 1,409 695 Insurance Claim Adamjee Insurance Company Limited, Lahore.
Honda Civic 2,254 929 1,325 1,674 349 As Per Company Policy Muhammad Raza (employee), Lahore.
Honda Civic 2,113 986 1,127 1,319 192 As Per Company Policy Qazi Nisar (employee), Lahore.
Toyota Corolla 1,992 232 1,760 2,356 596 Negotiation First Habib Modaraba, Lahore.
Toyota Corolla 1,735 1,232 503 465 (38) As Per Company Policy Liaqat Ali (employee), Lahore.
Toyota Corolla 1,731 1,177 554 477 (77) As Per Company Policy Rehmat ali (employee), Lahore.
Toyota Corolla 1,543 636 907 1,198 291 As Per Company Policy Rafique Ahmed (employee), Lahore.
Suzuki Cultus 1,085 302 783 1,300 517 As Per Company Policy Gulzaib (employee), Lahore.
Suzuki Cultus 981 434 547 587 40 As Per Company Policy Asif Ilyas (employee), Lahore.
less than Rs. 500,000 each 15,909 10,480 5,429 8,958 3,529 As Per Company Policy Various emploees
49,775 27,195 22,580 33,472 10,892
422,115 69,828 352,287 355,181 2,894
2018

Plant and Machinery
Thermo-Plastic Injection Molding 28,705 120 28,585 27,000 (1,585) Sale & Lease Back Askari Leasing
Thermo-Plastic Injection Molding 56,292 - 56,292 54,944 (1,348) Sale & Lease Back Askari Leasing
Servo Energy Saving System 8,212 - 8,212 8,000 (212) Sale & Lease Back Askari Leasing
JWS-130 ABS Sheet Extrusion
Line 21,577 - 21,577 20,000 (1,577) Sale & Lease Back Askari Leasing
114,785 120 114,666 109,944 (4,722)

Table and chairs 5,246 3,995 1,251 256 (995) Negotiation Various individuals
Air conditioners 6,719 5,268 1,451 328 (1,123) Negotiation Various individuals
Mobile sets 566 299 267 - (267) As Per Company Policy Various individuals
Miscellaneous office items 39,975 34,968 5,007 1,949 (3,058) Negotiation Various individuals
52,506 44,530 7,976 2,533 (5,443)
Computer and printers 10,961 10,961 - 512 512 Negotiation Various individuals
Laptops 4,441 2,792 1,649 2,901 1,252 Negotiation Various individuals
Mobile sets 427 359 68 39 (29) As Per Company Policy Various individuals
Allied items 10,907 10,907 - 382 382 Negotiation Various individuals
26,736 25,019 1,717 3,834 2,117
Vehicles
Audi A3 4,060 460 3,600 4,750 1,150 As Per Company Policy Mehdi Hassan (employee), Lahore.
BMW X1 5,217 591 4,626 5,737 1,111 As Per Company Policy Mehdi Hassan (employee), Lahore.
Honda City 1,494 971 523 747 224 As Per Company Policy Atif Imtiaz (employee), Lahore.
Honda Civic 2,439 1,505 934 642 (292) As Per Company Policy Waseem Ishaq (employee), Lahore.
Honda Civic 2,489 1,460 1,029 539 (490) As Per Company Policy Iftikhar Ahmed (employee), Lahore.
Honda Civic 2,469 1,448 1,021 560 (461) As Per Company Policy Tariq Irani (employee), Lahore.
Honda Civic 2,448 1,277 1,171 470 (701) As Per Company Policy Javed A Khan (employee), Rawalpindi.
Honda Civic 2,164 793 1,371 1,456 85 As Per Company Policy Atif Ali (employee), Lahore.
Honda Civic 2,521 892 1,629 328 (1,301) As Per Company Policy Sadiq Munir (employee), Lahore.
Porsche 1,202 439 763 3,000 2,237 Negotiation Performance Automotive, Lahore.
Suzuki Mehran 578 10 568 222 (346) As Per Company Policy Shees Butt (employee), Faisalabad.
Toyota Corolla 1,731 1,015 716 600 (116) As Per Company Policy Javed Iqbal (employee), Lahore.
Toyota Corolla 1,771 924 847 831 (16) As Per Company Policy Rizwan Cheema (employee), Lahore.
Assets having net book value less
than Rs. 500,000 each 15,323 9,793 5,530 10,039 4,509 As Per Company Policy Various employees
45,906 21,578 24,328 29,921 5,593
239,933 91,247 148,686 146,230 (2,456)
Note 2019 2018

21.4 The depreciation charge for the year has been allocated as follows:
Cost of sales 35 910,818 772,241

Administrative and general expenses 38 63,836 68,660
974,654 840,901
21.5 Revaluation of property, plant and equipment
Most recent valuation of land, building and plant and machinery was carried out by an independent valuer, Maricon
Consultants (Private) Limited, on December 31, 2018 and was incorporated in the financial statements for the year ended
December 31, 2018. For basis of valuation and other fair value measurement disclosures refer to note 49.
Had there been no revaluation, the cost, accumulated depreciation and net book value of revalued items would have been as
follows:
2019
Accumulated Net
Land 189,184 - 189,184

Building 5,816,039 1,434,921 4,381,118
2018
Accumulated Net
Land 189,184 - 189,184

Building 3,302,326 1,321,029 1,981,297
21.5.1 As per most recent valuation, forced sale values of land, building and plant and machinery are as follows:
Rupees '000
Land 919,800
Building 2,927,828
Plant and machinery 11,998,078
15,845,706
22 INTANGIBLE ASSETS
Note 2019
Goodwill 22.2 312,341 - 312,341 91,859 - 91,859 220,482
Software 22.3 17,006 3,802 20,808 6,911 4,273 11,184 9,624
478,076 3,802 481,878 164,724 10,822 175,546 306,332
2018
Goodwill 22.2 312,341 - 312,341 91,859 - 91,859 220,482
Software 22.3 8,976 8,030 17,006 4,853 2,058 6,911 10,095
470,046 8,030 478,076 154,521 10,203 164,724 313,352
22.1 The Company has obtained technology of single phase meters, three phase digital meters and also of power transformers
from different foreign companies. These are amortized on the same rate as of the depreciation of the relevant plant.
22.2 Goodwill represents the difference between the cost of the acquisition (fair value of consideration paid) and the fair value of
the net identifiable assets acquired at the time of acquisition of PEL Appliances Limited and PEL Daewoo Electronics Limited
by the Company. In view of cancellation of LG license, goodwill related to PEL Daewoo Electronics Limited was fully impaired
by providing impairment loss of Rs. 140.569 million in December 31, 2011. The carrying value represents goodwill related to
PEL Appliances Limited for which there is no indication of impairment.
22.3 The Company has acquired different software for its business purpose. These are being amortized at 33% per annum on
reducing balance method.
22.4 These are being amortized at 33% per annum on reducing balance method.
23 LONG TERM INVESTMENTS
These represent investments in ordinary shares of related parties and are carried at cost less accumulated impairment. The
Note 2019 2018

PEL Marketing (Private) Limited - Unquoted

10,000 (2018: 10,000) ordinary shares of Rs. 10 each 100 100
Relationship: wholly-owned subsidiary
Ownership Interest:100%
Kohinoor Power Company Limited - Quoted

2,910,600 (2018: 2,910,600) ordinary shares of Rs. 10 each 23.1 5,763 6,985
Relationship: associate
Ownership Interest: 23.1%
5,863 7,085
23.1 Details of investment are as follows:

Cost of investment 54,701 54,701
Accumulated impairment (48,938) (47,716)
5,763 6,985
24 LONG TERM DEPOSITS
Financial institutions 24.1 27,601 7,858

Utility companies and regulatory authorities 24.2 167,734 42,351
Customers 24.3 164,845 315,748
360,180 365,957
24.1 These represent security deposits against Ijarah financing.
24.2 These have been deposited with various utility companies and regulatory authorities. These are classified as 'financial assets
at amortized cost' under IFRS 9 which are required to be carried at amortized cost. However, these, being held for an
indefinite period with no fixed maturity date, are carried at cost.
24.3 These have been deposited with various customers against EPC and other contracts and are refundable on completion of
projects in accordance with term of contracts. These are classified as 'financial assets at amortized cost' under IFRS 9 which
are required to be carried at amortized cost. However, due to uncertainties regarding dates of refund of these deposits, these
have been carried at cost.
2019 2018
25 STORES, SPARES AND LOOSE TOOLS
Stores 279,668 290,865

Spares 455,386 452,987
Loose tools 132,117 134,117
867,171 877,969
Impairment allowance for slow moving and obsolete items (18,824) (18,824)
848,347 859,145
25.1 There are no spare parts held exclusively for capitalization as at the reporting date.
2019 2018
26 STOCK IN TRADE
Raw material
- in stores 3,992,761 5,130,566
- in transit 1,315,147 2,110,833
5,268,848 7,204,362
Work in process 656,835 758,928
Finished goods 1,871,490 417,843
1,863,614 410,821
7,789,297 8,374,111
26.1 Stock in trade valued at Rs. 1,849 million (2018: Rs. 1,754 million) is pledged as security with providers of debt finances.
Note 2019 2018

27 TRADE DEBTS
Gross amount due

- against sale of goods 1,896,136 2,402,718
- against execution of construction contracts 27.1 1,206,697 3,054,705
3,102,833 5,457,423
Impairment allowance for expected credit loss 38 (612,535) (587,301)
2,490,298 4,870,122
27.1 These include retention money for construction contracts in progress amounting to Rs. 551.251 million (2018: Rs. 617.648
million) held by the customers in accordance with contract terms.
2019 2018
27.2 Movement in impairment allowance for expected credit loss

Recognized during the year 25,234 10,330
28 CONSTRUCTION WORK IN PROGRESS
This represents unbilled construction work in progress.
Note 2019 2018

29 SHORT TERM ADVANCES
Advances to suppliers and contractors

587,320 589,824
Advances to employees
Gross amount due 29.1 508,286 377,239
506,837 375,790
1,094,157 965,614
29.1 These include advances for

- purchases 225,807 189,350
- expenses 125,672 105,524
- traveling 155,358 80,916
506,837 375,790
30 SHORT TERM DEPOSITS AND PREPAYMENTS
Security deposits
Impairment allowance for expected credit losses (5,379) (5,379)
330,852 308,133
Margin deposits 207,323 421,671
Prepayments 46,211 52,865
Sales tax refundable 979,702 -
Letters of credit 327,510 322,510
1,891,598 1,105,179
31 SHORT TERM INVESTMENTS
These represent investments in listed equity securities classified as 'financial assets at fair value through profit or loss'. The
Note 2019 2018

Standard Chartered Bank (Pakistan) Limited
915,070 (2018: 915,070) ordinary shares of Rs. 10 each
Changes in fair value 36 & 39 (475) 247
32 ADVANCE INCOME TAX/INCOME TAX REFUNDABLE
Advance income tax/income tax refundable 2,603,652 3,132,528

Provision for taxation 41 - -
2,603,652 3,132,528
33 CASH AND BANK BALANCES
Cash in hand 9,539 8,102

Cash at banks 370,194 349,808
379,733 357,910
34 NET REVENUE
This represents revenue recognized from contracts with customers
Sale of goods
- local 25,724,814 23,394,059
- exports 606,054 888,957
26,330,868 24,283,016
Construction contracts 1,365,601 2,899,882
27,696,469 27,182,898
Sales tax and excise duty and discounts (5,346,720) (3,710,466)
22,349,749 23,472,432
35 COST OF SALES
Finished goods at the beginning of the year 417,843 360,059

Cost of goods manufactured 35.1 19,328,681 18,343,599
Finished goods at the end of the year (1,871,490) (417,843)
Cost of goods sold 17,875,034 18,285,815
Cost of construction contracts 1,146,012 2,433,581
19,021,046 20,719,396
Note 2019 2018

35.1 Cost of goods manufactured
Work-in-process at beginning of the year 758,928 848,453
Raw material and components consumed 16,289,944 15,556,700
Direct wages 859,985 799,473
Factory overheads:
- salaries, wages and benefits 460,306 422,952
- traveling and conveyance 29,023 27,930
- electricity, gas and water 355,619 339,186
- repairs and maintenance 72,215 68,323
- vehicles running and maintenance 31,406 30,060
- insurance 36,990 35,855
- depreciation 21.4 910,818 772,241
- amortization of intangible assets 22 10,822 10,203
- impairment allowance for obsolete and slow moving stock 26 & 27 2,877 2,522
- carriage and freight 26,022 23,742
- erection and testing 125,106 151,605
- other factory overheads 15,455 13,282
2,076,659 1,897,901
19,985,516 19,102,527
Work-in-process at end of the year (656,835) (758,928)
19,328,681 18,343,599
Note 2019 2018

36 OTHER INCOME
Gain on financial instruments

Changes in fair value of short term investments at fair
value through profit or loss 31 - 247
Gain on sale and lease back activities 13,364 -
Gain on disposal of property, plant and equipment - 2,267
13,364 2,514
Other income
Amortization of grant-in-aid 16 1,839 1,936
Others 17,100 12,934
18,939 14,870
32,303 17,384
Note 2019 2018

37 DISTRIBUTION COST

Electricity, gas, fuel and water 4,055 3,162
Printing and stationery 3,918 3,368
Advertisement and sales promotion 195,236 191,524
Insurance 10,618 7,524
Freight and forwarding 170,589 121,588
Contract and tendering 1,352 1,355
Warranty period services 233,401 111,565
Others 47,814 35,463
953,701 732,340
Note 2019 2018

38 ADMINISTRATIVE AND GENERAL EXPENSES

Ujrah payments 28,203 21,620
Legal and professional 63,708 49,258
Electricity, gas and water 31,430 27,215
Auditor's remuneration 38.2 4,850 4,827
Printing, stationery and periodicals 3,430 3,150
Advertisement 6,133 8,168
Insurance 9,449 8,882
Impairment allowance for expected credit loss 25,234 10,330
Depreciation 21.4 63,836 68,660
Others 35,479 24,351
611,644 516,884
2019 2018
38.2 Auditor's remuneration

Annual statutory audit 3,300 3,300
Limited scope review 800 800
Review report under corporate governance 500 500
Out of pocket expenses 250 227
4,850 4,827
Note 2019 2018

39 OTHER EXPENSES
Loss on financial instruments

Changes in fair value of short term investments at fair 31 475 -
value through profit or loss
Loss on disposal of property, plant and equipment 10,470 -
Loss on sale and lease back activities - 4,721
Impairment allowance on long term investments 1,222 1,863
12,167 6,584
Others
Donations 4,655 7,674
Others 11,830 -
32,260 44,619
44,427 51,203
40 FINANCE COST
Interest/markup/profit on borrowings:
redeemable capital 1,958 19,655
long term finances 650,503 443,864
leased liabilities 25,223 6,362
short term borrowings 700,180 209,057
1,377,864 678,938
Interest on Workers' Profit Participation Fund 17.2 1,516 4,940
Bank charges and commission 160,518 292,569
1,539,898 976,447
41 TAXATION
Provision for taxation

for current year - -
for prior years 32 & 41.1 (279) -
(279) -
Deferred taxation
adjustment attributable to origination and reversal
of temporary differences 33,773 (46,705)
adjustment attributable to changes in tax rates - 11,906
15.1 33,773 (34,799)
33,494 (34,799)
41.1 The Company is taxable under section 59AA of the Income Tax Ordinance, 2001 along with its subsidiary as a single unit. The
provision for the year has been allocated to the Company on proportionate basis. Provision for the current year is nil due to
utilization of available tax credits. There is no relationship between aggregate tax expense and accounting profit.
Accordingly no numerical reconciliation has been presented.
41.2 Assessments upto Tax Year 2019 have been finalized under the relevant provisions of the Ordinance execpt for Tax Year 2009,
2016 and 2017. See note 20.1.5.
Unit 2019 2018
42 EARNINGS PER SHARE - BASIC AND DILUTED
Earnings
Profit after taxation Rupees '000 177,842 528,345
Preference dividend for the year Rupees '000 (42,710) (42,710)
Profit attributable to ordinary shareholders Rupees '000 135,132 485,635
Shares
Weighted average number of ordinary shares outstanding during the year No. of shares 497,681,485 497,681,485
Earnings per share

Basic and diluted Rupees 0.27 0.98
42.1 As per the opinion of the Company's legal counsel, the provision for dividend at 9.5% per annum, under the original terms of
issue of preference shares, will prevail on account of preference dividend.
42.2 There is no diluting effect on the basic earnings per share of the Company as the conversion rights pertaining to outstanding
preference shares, under the original terms of issue, are no longer exercisable.
Note 2019 2018

43 CASH GENERATED FROM OPERATIONS
Adjustments for non-cash and other items

Interest/markup/profit on borrowings 1,377,864 678,938
Loss/(gain) on disposal of property, plant and equipment 10,470 (2,267)
Amortization of grant-in-aid (1,839) (1,936)
Amortization of intangible assets 10,822 10,203
Impairment of long term investments 1,222 1,863
Changes in fair value of financial assets at fair value through profit or loss 475 (247)
Impairment allowance for expected credit loss 25,234 10,330
Impairment allowance for obsolete and slow moving stock 2,877 2,522
(Gain)/loss on sale and lease back activities (13,364) 4,721
Depreciation 974,654 840,901
2,388,415 1,545,028
2,599,751 2,038,574
Changes in working capital
Stores, spares and loose tools 10,798 (112,737)
Stock in trade 581,937 (1,987,854)
Trade debts 2,354,590 604,247
Contract assets (161,774) (142,550)
Short term advances (128,543) (139,398)
Short term deposits and prepayments (786,419) 4,053
Other receivables (40,892) (49,872)
Warranty obligations 44,960 -
Trade and other payables 771,243 (51,332)
2,651,677 (1,869,464)
Cash generated from operations 5,251,428 169,110
44 CASH AND CASH EQUIVALENTS

379,733 357,910
45 TRANSACTIONS AND BALANCES WITH RELATED PARTIES
Related parties from the Company's perspective comprise subsidiary, associated companies, key management personnel
and post employment benefit plan. Key management personnel are those persons having authority and responsibility for
planning, directing and controlling the activities of the Company, directly or indirectly, and includes the Chief Executive and
Directors of the Company. The details of Company's related parties, with whom the Company had transactions during the
year or has balances outstanding as at the reporting date are as follows:
Name of related party Nature of relationship Basis of relationship Aggregate

%age of
shareholding
in the
Company
Employees Provident Fund Trust Provident Fund Trust Contribution to providend fund 0.00%
PEL Marketing (Private) Limited Subsidiary Investment 0.00%
Kohinoor Power Company Limited Associated company Investment 0.00%
Red Comminication Arts
(Private) Limited Associated company Common directorship 0.00%
Mr. M. Murad Saigol Key management personnel Chief executive 0.0025%
Mr. M. Zeid Yousuf Saigol Key management personnel Director 2.9637%
Mr. Syed Manzar Hassan Key management personnel Director 0.0004%
Transactions with key management personnel are limited to payment of short term and post employment benefits, advances
against issue of ordinary shares and dividend payments. Transactions with post employment benefits plan are limited to
employers' contribution made. The Company in the normal course of business carries out various transactions with its
subsidiary and associated companies 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 and balances with related parties are as follows:
Note 2019 2018

45.1 Transactions with related parties
Nature of relationship Nature of transactions

Provident Fund Trust Contribution for the year 64,658 59,394
Subsidiary Sale of goods 10,716,095 14,159,484

Allocation of common expenses - 1,379,621
Associated companies Purchase of services 48,866 50,304
Key management personnel Short term employee benefits 51 47,974 50,125

Post employment benefits 51 1,760 1,600
Directors and sponsors Dividend paid 3,598 295,933
45.2 Balances with related parties
Nature of relationship Nature of balances

Provident Fund Trust Contribution payable 6,774 11,247
Key management personnel Short term employee benefits payable 1,356 2,805
Associated companies Creditors 11,921 -

46 CONTRACTS WITH CUSTOMERS
46.1 Disaggregation of revenue
The table below provides disaggregation of revenue and its relationship with revenue information disclosed for the
Company's Operating Segments presented in note 52.
Power Division Appliances Division Total

2019 2018 2019 2018 2019 2018
Product/service lines
Home appliances - - 17,862,538 15,468,152 17,862,538 15,468,152
Electrical capital goods 8,468,330 8,814,864 - - 8,468,330 8,814,864
Construction contracts 1,365,601 2,899,882 - - 1,365,601 2,899,882
9,833,931 11,714,746 17,862,538 15,468,152 27,696,469 27,182,898
Timing of revenue
recognition
Products transferred at a
point in time 8,468,330 8,814,864 17,862,538 15,468,152 26,330,868 24,283,016
Products/services
transferred over time 1,365,601 2,899,882 - - 1,365,601 2,899,882
9,833,931 11,714,746 17,862,538 15,468,152 27,696,469 27,182,898
46.2 Contract balances
The information about receivables, contract assets and contract liabilties from contracts with customers is as follows:
Nature of balance Presented in financial statements as Note 2019 2018

Receivables Trade debts 27 2,490,298 4,870,122

Contract assets Construction work in progress 28 1,697,509 1,535,735
Contract liabilties Advances from customers 17 70,125 77,154
4,257,932 6,483,011
46.3 Changes in contract assets and liabilities
Significant changes in contract assets and contract liabilities during the

year are as follows:
Contract Contract
assets liabilities
As at beginning of the year 1,535,735 77,154

Revenue recognized against contract liabilty as at beginning of the year - (77,154)
Net increase due to cash received in excess of revenue recognized - 70,125
Transfers from contracts assets recognized at the beginning of the year to receivables (1,535,735) -
Net increases as a result of contract activity 1,697,509 -
As at end of the year 1,697,509 70,125
47 FINANCIAL INSTRUMENTS
The carrying amounts of the Company's financial instruments by class and category are as follows:
2019 2018
47.1 Financial assets

Cash in hand 9,539 8,102
Trade debts 2,490,298 4,870,122
Short term deposits 207,323 421,671
Bank balances 370,194 349,808
3,400,394 5,999,700
Financial assets mandatorily measured at fair value

Short term investments 21,596 22,071
3,431,529 6,029,873
47.2 Financial liabilities

Financial liabilities at amortized cost
Redeemable capital - 101,875
Long term finances 4,407,403 4,315,878
Leased liabilities 241,094 102,368
Foreign bills payable 101,960 108,823
Short term borrowings 10,955,490 12,843,848
16,858,695 18,482,549
48 FINANCIAL RISK EXPOSURE AND MANAGEMENT
The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including currency
risk, interest rate risk and price risk). These risks affect revenues, expenses and assets and liabilities of the Company.
The Board of Directors has the overall responsibility for establishment and oversight of risk management framework. The
Board of Directors has developed a risk policy that sets out fundamentals of risk management framework. The risk policy
focuses on unpredictability of financial markets, the Company's exposure to risk of adverse effects thereof and objectives,
policies and processes for measuring and managing such risks. The management team of the Company is responsible for
administering and monitoring the financial and operational financial risk management throughout the Company in
accordance with the risk management framework.
The Company’s exposure to financial risks, the way these risks affect the financial position and performance, and forecast
transactions of the Company and the manner in which such risks are managed is as follows:
48.1 Credit risk
Credit risk is the risk of financial loss to the Company, if the counterparty to a financial instrument fails to meet its obligations.
48.1.1 Credit risk management practices
In order to minimise credit risk, the Company has adopted a policy of only dealing with creditworthy counterparties and
limiting significant exposure to any single counterparty. The Company only transacts with counterparties that have
reasonably high external credit ratings. Where an external rating is not available, the Company uses an internal credit risk
grading mechanism. Particularly for customers, a dedicated team responsible for the determination of credit limits uses a
credit scoring system to assess the potential as well as existing customers' credit quality and assigns or updates credit limits
accordingly. The ageing profile of trade debts and individually significant balances, along with collection activities are
reviewed on a regular basis. High risk customers are identified and restrictions are placed on future trading, including
suspending future shipments and administering dispatches on a prepayment basis or confirmed letters of credit.
The Company reviews the recoverable amount of each financial asset on an individual basis at each reporting date to ensure
that adequate loss allowance is made in accordnace with the assessment of credit risk for each financial asset.
The Company considers a financial asset to have low credit risk when the asset has reasonably high external credit rating or if
an external rating is not available, the asset has an internal rating of ‘performing’. Performing means that the counterparty has
no past due amounts or otherwise there is no significant increase in credit risk if the amounts are past due in the normal
course of business based on history with the counterparty.
In assessing whether the credit risk on a financial asset has increased significantly since initial recognition, the Company
compares the risk of a default occurring on the financial asset at the reporting date with the risk of a default occurring on the
financial asset at the date of initial recognition. In making this assessment, the Company considers both quantitative and
qualitative information that is reasonable and supportable, including historical experience and forward-looking information
that is available without undue cost or effort. Irrespective of the outcome of the above assessment, the Company presumes
that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are
more than 30 days past due, unless the Company has reasonable and supportable information that demonstrates otherwise.
This is usually the case with various customers of the Company where the Company has long standing business relationship
with these customers and any amounts that are past due by more than 30 days in the normal course of business are
considered 'performing' based on history with the customers. Therefore despite the foregoing, the Company considers
some past due trade debts to have low credit risk where the customer has a good history of meeting its contractual cash flow
obligations and is expected to maintain the same in future.
The Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant
increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase
in credit risk.
The Company considers 'default' to have occurred when the financial asset is credit-impaired. A financial asset is considered
to be credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that
financial asset have occurred.
The Company writes off a financial asset when there is information indicating that the counterparty is in severe financial
condition and there is no realistic prospect of recovery.
The Company's credit risk grading framework comprises the following categories:
Category Description Basis for recognizing ECL

Performing The counterparty has low credit risk Trade debts: Lifetime ECL
Other assets: Twelve month ECL
Doubtful Credit risk has increased significantly since initial recognition Lifetime ECL
In default There is evidence indicating the assets is credit-impaired Lifetime ECL
Write-off There is no realistic prospect of recovery Amount is written-off
48.1.2 Exposure to credit risk
Credit risk principally arises from debt instruments held by the Company as at the reporting date. The maximum exposure to
credit risk as at the reporting date is as follows:
Note 2019 2018


Trade debts 27 3,102,833 5,457,423
Short term deposits 30 207,323 421,671
Cash at banks 33 370,194 349,808
4,012,929 6,587,001
48.1.3 Credit quality and impairment
Credit quality of financial assets is assessed by reference to external credit ratings, where available, or to internal credit risk
grading. The credit quality of the Company’s financial assets exposed to credit risk is as follows:
External Internal credit 12-month or Gross carrying Loss

Note rating risk grading life-time ECL amount allowance
Long term deposits 24 N/A Performing 12-month 332,579 -
ECL
Trade debts 27 N/A Performing Lifetime ECL 2,515,532 25,234
N/A Doubtful Lifetime ECL 587,301 587,301
3,102,833 612,535
Short term deposits 30 N/A Performing 12-month 207,323 -
ECL
Cash at banks 33 A3 - A1+, P 2 N/A 12-month 370,194 -
ECL
4,012,929 612,535
(a) Long term deposits
These include deposits placed with various utility companies and regulatory authorities and those placed with
customers of construction contracts. Deposits with utility companies and regulatory authorities are substantially
perpetual in nature and therefore no credit risk is associated there with. Deposits with customers are against
construction contracts with government departments placed in accordance with the terms of tender documents and do
not carry any significant credit risk. Accordingly no loss allowance has been made.
(b) Trade debts
For trade debts, the Company has applied the simplified approach in IFRS 9 to measure the loss allowance at lifetime
ECL. The Company determines the expected credit losses on trade debts by using internal credit risk grading. As at the
reporting date, trade debts amounting to Rs. 587.301 million and Rs. 612.535 million are considered 'doubtful' and 'in-
defult' receptively. Other trade debts are considered 'performing' including those past due as there is no significant
increase in credit risk in respect of these receivables since initial recognition. The ageing analysis of trade debts as at the
reporting date is as follows:
Note 2019 2018

Neither past due nor impaired 1,861,700 3,274,454

Past due by upto 30 days 372,340 654,891
Past due by 31 days to 180 days 276,258 940,777
Past due by 180 days or more 592,535 587,301
3,102,833 5,457,423
(d) Short term deposits
These are placed with financial institutions with reasonably high credit ratings and therefore no credit loss is expected.
Accordingly no loss allowance has been made.
(d) Bank balances
The bankers of the Company have reasonably high credit ratings as determined by various indpendent credit rating
agencies. Due to long standing business relationships with these counterparties and considering their strong financial
standing, management does not expect any credit loss.
48.1.4 Concentrations of credit risk
There are no significant concentrations of credit risk, except for trade debts. The Company's one (2018: two) significant
customers account for Rs. 325.41 million (2018: Rs. 930.603 million) of trade debts as at the reporting date, apart from which,
exposure to any single customer does not exceed 10% (2018: 10%) of trade debts as at the reporting date. These significant
customers have long standing business relationships with the Company and have a good payment record and accordingly
non-performance by these customers is not expected.
48.1.5 Collateral held
The Company does not hold any collateral to secure its financial assets.
48.1.6 Changes in impairment allowance for expected credit losses
The changes in impairment allowance for expected credit losses have been presented in note 27.
48.2 Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.
48.2.1 Liquidity risk management
The Company's approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to
meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Company's reputation. The Company monitors cash flow requirements and produces cash flow projections
for the short and long term. Typically, the Company ensures that it has sufficient cash on demand to meet expected
operational cash flows, including servicing of financial obligations. This includes maintenance of balance sheet liquidity
ratios, debtors and creditors concentration both in terms of overall funding mix and avoidance of undue reliance on large
individual customer. The Company also maintains various lines of credit with banking companies.
48.2.2 Exposure to liquidity risk
The following presents the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed
repayment periods. The analysis have been drawn up based on the undiscounted cash flows of financial liabilities based on
the earliest date on which the Company can be required to pay and includes both interest/markup/profit and principal cash
flows. To the extent that interest/markup/profit flows are floating rate, the undiscounted amount is derived from
interest/markup/profit rate curves at the reporting date.
2019
Redeemable capital - - - - -
Long term finances 4,407,403 5,320,079 2,753,784 2,448,023 118,272
Trade creditors 468,541 468,541 468,541 - -
Other payables 18,531 18,531 18,531 - -
16,858,695 17,816,056 15,097,402 2,600,382 118,272
2018
Redeemable capital 101,875 103,885 103,885 - -
Long term finances 4,315,878 4,962,564 2,059,357 2,903,207 -
Trade creditors 414,995 414,995 414,995 - -
Other payables 18,705 18,705 18,705 - -
18,482,549 19,426,699 16,458,919 2,967,780 -
48.3 Market risk
48.3.1 Currency risk
Currency risk is the risk that fair values or future cash flows of a financial instrument will fluctuate because of changes in
foreign exchange rates. Currency risk arises from transactions and resulting balances that are denominated in a currency
other than functional currency.
(a) Currency risk management
The Company manages its exposure to currency risk through continuous monitoring of expected/forecast committed
and non-committed foreign currency payments and receipts. Reports on forecast foreign currency transactions,
receipts and payments are prepared on monthly basis, exposure to currency risk is measured and appropriate steps are
taken to ensure that such exposure is minimized while optimizing return. This includes matching of foreign currency
liabilities/payments to assets/receipts and using source inputs in foreign currency.
(b) Exposure to currency risk
The Company's exposure to currency risk as at the reporting date is as follows:
2019 2018
Financial assets - -
Financial liabilities
Foreign bills payable
USD (86,161) (92,204)
CNY (2,617) (16,619)
EUR (11,391) -
AUD (1,791)
(101,960) (108,823)
Net balance sheet exposure (101,960) (108,823)
Foreign currency commitments
CHF (19,546) (17,235)
CNY (85,928) (28,496)
EUR (114,229) (156,714)
GBP - (1,059)
USD (460,502) (1,809,135)
AUD (2,423) -
(682,628) (2,012,639)
Net exposure (784,588) (2,121,462)
(c) Exchange rates applied as at the reporting date

The following spot exchange rates were applied as at the reporting date:
2019 2018
GBP - 176.5100
EUR 173.5841 159.1000
USD 154.8476 139.1000
CHF 159.8674 141.2700
CNY 22.2409 20.2100
AED 42.1566 -
AUD 108.4785 -
(d) Sensitivity analysis
A five percent appreciation in Pak Rupee against foreign currencies would have increased profit for the year and equity
as at the reporting date by Rs. 5.1 million (2018: Rs. 5.44 million). A five percent depreciation in Pak Rupee would have
had an equal but opposite effect on profit for the year and equity. The analysis assumes that all other variables, in
particular interest rates, remain constant and ignores the impact, if any, on provision for taxation for the year.
48.3.2 Interest rate risk
Interest rate risk is the risk that fair values or future cash flows of a financial instrument will fluctuate because of changes in
interest rates.
(a) Interest rate risk management
The Company manages interest rate risk by analysing its interest rate exposure on a dynamic basis. Cash flow interest
rate risk is managed by simulating various scenarios taking into consideration refinancing, renewal of existing positions
and alternative financing. Based on these scenarios, the Company calculates impact on profit after taxation and equity
of defined interest rate shift, mostly 100 basis points.
(b) Interest/markup/profit bearing financial instruments
The effective interest/markup/profit rates for interest/markup/profit bearing financial instruments are mentioned in
relevant notes to the financial statements. The Company's interest/markup/profit bearing financial instruments as at the
2019 2018
Fixed rate instruments - -
Variable rate instruments

Financial liabilities 15,603,987 17,363,969
(c) Fair value sensitivity analysis for fixed rate instruments
The Company does not have any fixed rate instruments.
(d) Cash flow sensitivity analysis for variable rate instruments
An increase of 100 basis points in interest rates as at the reporting date would have decreased profit for the year and
equity as at the reporting date by Rs. 156.04 million (2018: Rs. 173.64 million). A decrease of 100 basis points would
have had an equal but opposite effect on profit and equity. The analysis assumes that all other variables, in particular
foreign exchange rates, remain constant and ignores the impact, if any, on provision for taxation for the year.
48.3.3 Other price risk
Other price risk represents the risk that the fair value or future cash flows of financial instrument will fluctuate because of
changes in market prices, other than those arising from interest rate risk or currency risk, whether those changes are caused
by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments. The
Company is exposed to price risk in respect of its investments in equity securities. However, the risk is minimal as these
investments are held for strategic purposes rather than trading purposes. The Company does not actively trade in these
investments.
49 FAIR VALUE MEASUREMENTS
The Company measures some of its assets at fair value at the end of each reporting period. Fair value measurements are
classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements and has the
following levels:
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices).
Level 3 Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
The fair value hierarchy of financial instruments measured at fair value and the information about how the fair values of these
financial instruments are determined are as follows:
49.1 Financial instruments measured at fair value

Financial instruments Hierarchy Valuation techniques and key inputs 2019 2018
Financial assets at fair value

Investments in quoted
equity securities Level 1 Quoted bid prices in an active market 21,596 22,071
49.2 Financial instruments not measured at fair value
The management considers the carrying amount of all financial instruments not measured at fair value at the end of each
reporting period to approximate their fair values as at the reporting date.
49.3 Assets and liabilities other than financial instruments
For recurring fair value measurements, the fair value hierarchy and information about how the fair values are determined is as
follows:
Level 1 Level 2 Level 3 2019 2018

Land - 1,035,256 - 1,035,256 1,035,256

Building - 5,771,302 - 5,771,302 3,444,504
Plant and machinery - 14,323,240 - 14,323,240 13,797,790
For fair value measurements categorised into Level 2 and Level 3 the following information is relevant:
Land Market comparable Estimated purchase price, A 5% increase in estimated

approach that reflects including non-refundable purchase price, including non-
recent transaction prices for purchase taxes and other refundable purchase taxes and
similar properties. costs directly attributable to other costs directly
the acquisition. attributable to the acquisition
would result in a significant
increase in fair value of
buildings by Rs. 51.763 million
(2018: Rs. 51.763 million).
Building Cost approach that reflects Estimated construction costs A 5% increase in estimated
the cost to the market and other ancillary construction and other
participants to construct expenditure. ancillary expenditure would
assets of comparable utility result in a significant increase
and age, adjusted for in fair value of buildings by Rs.
obsolescence and 288.565 million (2018:
depreciation. There was no Rs.172.225 million).
change in valuation.
Plant and machinery Cost approach that reflects Estimated purchase price, A 5% increase in estimated
the cost to the market including import duties and purchase price, including
participants to acquire non-refundable purchase import duties and non-
assets of comparable utility taxes and other costs directly refundable purchase taxes and
and age, adjusted for attributable to the acquisition other directly attributable
obsolescence and or construction, erection and costs would result in a
depreciation. There was no installation. significant increase in fair
change in valuation value of plant and machinery
technique during the year. by Rs. 716.162 million (2018:
Rs. 689.89 million).
50 CAPITAL MANAGEMENT
The Company's objective when measuring capital is to safeguard the Company's ability to continue as going concern while
providing returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure through
debt and equity balance. The Company manages its capital structure and makes adjustments to it in light of changes in
economic conditions. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends
paid to shareholders or issue of new shares. Consistent with others in industry, the Company monitors capital on the basis of
gearing ratio which is debt divided by total capital employed. Debt comprises long term finances, redeemable capital and
lease liabilities, including current maturity. Total capital employed includes total equity plus debt. The gearing ratios as at the
Unit 2019 2018
Total debt Rupees '000' 4,648,497 4,520,121

Total equity Rupees '000' 23,007,553 23,169,419
Total capital employed Rupees '000' 27,656,050 27,689,540
Gearing ratio % age 16.81 16.32
The Company is not subject to externally imposed capital requirements, except those related to maintenance of debt
covenants, commonly imposed by the providers of debt finance.
51 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
The aggregate amount charged to profit or loss in respect of chief executive, directors and executives on account of
managerial remuneration, allowances and perquisites, post employment benefits and the number of such directors and
executives is as follows:
Chief Executive Directors Executives

2019 2018 2019 2018 2019 2018
Remuneration 12,046 12,046 29,641 28,042 195,917 156,009

House rent 1,205 1,205 1,908 1,844 43,196 33,930
Utilities 1,205 1,205 1,205 1,205 19,592 15,601
Bonus - - - - 11,159 7,481
Post employment benefits - - 1,760 1,600 19,178 14,889
Meeting fee - - 435 345 - -
Reimbursable expenses
Motor vehicles expenses - - - - 18,045 15,501
Medical expenses - - 329 224 8,608 6,008
14,456 14,456 35,278 33,260 315,695 249,419
Number of persons 1 1 2 2 87 73
51.1 Chief executive, directors and executives have been provided with free use of the Company's vehicles.
51.2 No remuneration has been paid to non-executive directors
52 SEGMENT INFORMATION
(a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and
expenses relating to transactions with other components of the same entity),
(b) whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about
resources to be allocated to the segment and assess its performance, and
(c) for which discrete financial information is available.
Information about the Company's reportable segments as at the reporting date is as follows:
Power Division Manufacturing and distribution of Transformers, Switch Gears, Energy Meters, Power Transformers,
Engineering, Procurement and Construction Contracting.
Appliances Division Manufacturing, assembling and distribution of Refrigerators, Air conditioners, Deep Freezers,
Microwave ovens, LED TVs, Washing Machines, Water Dispensers and other Home Appliances
2019
Power Appliances
Revenue 9,833,931 17,862,538 27,696,469
Finance cost 791,153 748,745 1,539,898
Segment profit 141,135 82,325 223,460
Segment assets 18,809,516 21,388,849 40,198,365
2018
Power Appliances
Revenue 11,714,746 15,468,152 27,182,898
Finance cost 688,585 287,862 976,447
Segment profit 279,840 247,525 527,365
Segment assets 19,668,173 21,396,929 41,065,102
2019 2018
52.1 Reconciliation of segment profit

Total profit for reportable segments 223,460 527,365
Un-allocated other expenses (12,124) (33,819)
52.2 Reconciliation of segment assets

Total assets for reportable segments 40,198,365 41,065,102
Other corporate assets 2,631,111 3,161,684
Total assets 42,829,476 44,226,786
52.3 Information about major customers

Revenue derived from PEL Marketing (Private) Limited 10,716,095 14,159,484
Revenue derived from Multan Electric Power Company - 2,650,670
53 EMPLOYEES PROVIDENT FUND TRUST
The following information is based on the un-audited financial statements of the Pak Elektron Limited Employees Provident
Fund Trust for the year ended December 31, 2019.
2019 2018
Size of the fund - total assets Rupees '000' 471,337 389,017

Fair value of investments Rupees '000' 429,787 351,027
Percentage of investments made % age 91.18 90.23
The break-up of investments is as follows:

2019 2018
Rupees '000' % age Rupees '000' % age
Government securities 134,496 31.29 118,131 33.65

Deposit accounts with commercial banks 295,291 68.71 232,896 66.35
429,787 100.00 351,027 100.00
54 PLANT CAPACITY AND ACTUAL PRODUCTION
2019 2018
Actual Actual
Annual production Annual production
production during the production during the
Unit capacity year capacity year
Transformers/Power transformers MVA 7,000 2,229 7,000 2,397
Switch gears Nos. 12,000 4,126 12,000 4,805
Energy meters Nos. 1,700,000 662,833 1,700,000 826,007
Air conditioners Tonnes 200,000 94,808 200,000 103,220
Refrigerators/Deep freezers Cfts. 6,950,000 4,072,399 6,950,000 5,075,992
Microwave ovens Litres 2,500,000 707,249 2,500,000 1,945,097
LED TVs Sets 200,000 41,710 200,000 24,190
Washing machines Kgs 150,000 104,754 50,000 7,005
54.1 Under utilization of capacity is mainly attributable to consumer demand.
55 NUMBER OF EMPLOYEES
2019 2018
Total number of employees 4,321 4,838

Average number of employees 4,546 5,107
56 RECOVERABLE AMOUNTS AND IMPAIRMENT
As at the reporting date, recoverable amounts of all assets/cash generating units are equal to or exceed their carrying
amounts, unless stated otherwise in these financial statements.
57 EVENTS AFTER THE REPORTING PERIOD
57.1 The Board of Directors of Pak Elektron Limited ['PEL'] and PEL Marketing (Private) Limited ['PMPL'] in their respective
meetings held on March 27, 2020 have approved the scheme of arrangement for amalgamation of PMPL, a wholly owned
subsidiary of PEL, with and into PEL with effect from April 30, 2020. The amalgamation is pending approval by the Securities
and Exchange Commission of Pakistan. Once the amalgamation is approved, the entire issued, subscribed and paid-up
capital of PMPL, comprising of Rs. 10,000 ordinary shares of Rs. 10 each shall stand cancelled without any payment or other
consideration, from effective date.
57.2 COVID-19 pandemic started at the end of December 2019 and broke out in China in January 2020. The material imports from
China remain suspended due to lock down, financial impact and materiality of which is not quantifiable at present. The
economic impact of local slow down started from February 2020 and a lock down, commenced in March 2020, is in progress
and the financial impact of the same is not yet determinable. However, the management believes to have sufficient
production capacity to cope with the supply shortfall in the balance period. The Prime Minister of Pakistan announced a
package of Rs. 1,250 billion for general public and industries to mitigate the COVID-19 miseries. The State Bank of Pakistan
announced reduction of Policy Rate to 9% along with the deferral of due principal and mark up payments for period from
upto one year.
58 GENERAL
58.1 Figures have been rounded of to the nearest thousands.
58.2 Comparative figures have been rearranged and reclassified, where necessary, for the purpose of comparison. However,
there were no significant reclassifications during the year.

K
ANNUAL GENERAL
MEETING
K 02 Pak Elektron Limited
NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 64th Annual General Meeting of Shareholders of Pak Elektron Limited
will be held on Friday, May 29, 2020 at 11:00 A.M. at 06-Egerton Road, Opposite LDA Plaza, Lahore to
transact the following business:
1. To confirm the minutes of Extra Ordinary General Meeting held on October 21, 2019.
2. To receive and adopt the Annual Audited Accounts of the Company for the year ended
December 31, 2019 together with Directors' and Auditors' Reports thereon.
3. To appoint Auditors to hold office till the conclusion of the next Annual General Meeting and to
fix their remuneration.
4. Any other business with the permission of the Chair.
By Order of the Board
Lahore: M. Omer Farooq

May 02, 2020 Company Secretary
Notes:
1. Share Transfer Books of the Company will remain closed from May 23, 2020 to May 29, 2020
(both days inclusive). Physical transfers/CDS Transactions IDs received in order at Company
registrar office M/s Corplink (Pvt.) Limited Wings Arcade, 1-K, Commercial Model Town, Lahore
on or before May 22, 2020 will be treated in time.
2. A member entitled to attend and vote at this Meeting may appoint another Member as proxy.
Proxies in order to be effective, must be received at17-Aziz Avenue, Canal Bank, Gulberg-V,
Lahore the Registered Office of the Company not later than forty-eight hours before the time
of the meeting and must be duly stamped, signed and witnessed.
3. Members whose shares are deposited with Central Depository System are requested to bring
their original National Identity Cards or original Passports along with their Account Numbers in
Central Depository System for attending the meeting.
4. Members are requested to notify the Company change in their addresses, if any.
5. Annual Audited Financial Statements of the Company for the Financial Year ended December
31, 2019 have been placed on the Company's website i.e. www.pel.com.pk.
6. SUBMISSION OF COPY OF CNIC/NTN DETAILS (MANDATORY)
Pursuant to the directives of the Securities and Exchange Commission of Pakistan CNIC
number of individuals is mandatorily required to be mentioned on dividend warrants and
pursuant to the provisions of Finance Act 2017, the rate of deduction of income tax under
section 150 of the Income Tax Ordinance 2001 from dividend payment have been revised as:
for filers of Income Tax return 15% and Non filers of Income Tax return 20%. In case of Joint
account, each holder is to be treated individually as either a filer or non-filer and tax will be
deducted on the basis of shareholding of each joint holder as may be notified by the
shareholder, in writing as follows, to our Share Registrars, or if no notification, each joint holder
shall be assumed to have an equal number of shares.
Company Folio/CDS Total Shares Principal Shareholder Joint Shareholder

Name Account No.
Name & Shareholding Name & Shareholding

CNIC No. Proportion CNIC No. proportion
No. of Shares No. of Shares
Annual Report 2019 K 03
The CNIC number/NTN details is now mandatory and is required for checking the tax status as
per the Active Taxpayers List (ATL) issued by Federal Board of Revenue (FBR) from time to time.
Individuals including all joint holders holding physical share certificates are therefore
requested to submit a copy of their valid CNIC to the company or its Registrar if not already
provided, For shareholders other than individuals, the checking will be done by matching the
NTN number, therefore the Corporate shareholders having CDC accounts are requested in
their own interest to provide a copy of NTN certificate to check their names in the ATL before
the book closure date to their respective participants/CDC, whereas corporate shareholders
holding physical share certificates should send a copy of their NTN certificate to the Company
or its Share Registrar. The Shareholders while sending CNIC or NTN certificates, as the case
may be must quote their respective folio numbers.
In case of non-receipt of the copy of a valid CNIC or NTN, the Company would be unable to
comply with SRO 831(1)/2012 dated July 05, 2012 of SECP and therefore will be constrained
under Section 243(3) of the Companies Act, 2017 to withhold dispatch of dividend warrants of
such shareholder. Further, all shareholders are advised to immediately check their status on
ATL and may, if required take necessary action for inclusion of their name in the ATL. The
company as per the new law, shall apply 20% rate of withholding tax if the shareholders name,
with relevant details, does not appear on the ATL, available on the FBR website on the first day
of book closure and deposit the same in the Government Treasury as this has to be done within
the prescribed time.
7. Payment of Cash Dividend Electronically
As per provision of Section 242 of Companies Act, 2017 any dividend payable in cash shall
only be paid through electronic mode directly in to the bank account designated by the
entitled shareholders. The shareholders are requested to provide their folio number, name and
details of bank account consisting of bank name, branch name, branch code, Account number,
Title of Account and IBAN in which they desire their dividend to be credited, failing which the
Company will be unable to pay the dividend through any other mode. Standard request form
has also been placed on website of the Company. The members are requested to send the
information on the same to our shares registrar (M/s Corplink Private Limited,
Wings Arcade, 1-K, Commercial, Model Town, Lahore.) at the earliest possible.
In case shares are held in CDC then the form must be submitted directly to shareholder's
broker/participant/CDC Investor account services.
8. Transmission of Annual Financial Statements through E-mail
The Securities and Exchange Commission of Pakistan vide SRO 787(I)/2014 dated September
08, 2014 has allowed companies to circulate annual balance sheet, profit & loss account,
auditors' and directors' reports along with notice of annual general meeting to its members
through e-mail. Members who wish to avail this facility can give their written consent. Standard
request form has also been placed on website of the Company. The members are requested to
send the information on the same to our shares registrar (M/s Corplink Private Limited, Wings
Arcade, 1-K, Commercial, Model Town, Lahore.)
9. Transmission of Annual Financial Statements through CD/DVD/USB
SECP through its SRO 470(I)/2016 dated May 31, 2016 have allowed companies to circulate
the annual balance sheet, profit and loss account, auditors' report and directors' report etc to
its members through CD/DVD/USB at their registered addresses. However a shareholder may
request to the Company Secretary at
Pak Elektron Limited, Factory Premises, 14-K.M. Ferozepur Road, Lahore to provide printed
copy of Annual Financial Statements and the same will be provided at his/her registered
address, free of cost, within one week of the demand.
NOTICE OF ANNUAL GENERAL MEETING

10. ZAKAT DECLARATIONS (CZ-50)
The Zakat will be deducted from the dividends at source at the rate of 2.5% of the paid-up
value of the shares (Rs. 10/- each) under Zakat and Ushr Laws and will be deposited within the
prescribed period with the relevant authority, Please submit your Zakat Declarations under
Zakat and Ushr Ordinance, 1980 & Rule 4 of Zakat (Deduction & Refund) Rules, 1981 CZ-50
Form, in case you want to claim exemption, with your brokers or the Central Depository
Company Ltd. (in case the shares are held in Investor Account Services on the CDC) or to our
Registrars, M/s Corplink Private Limited, Wings Arcade, 1-K, Commercial, Model Town, Lahore
(in case the shares are held in paper certificate form). The shareholders while sending the Zakat
Declarations, as the case may be must quote company name and respective folio numbers.

FORM OF PROXY
64TH ANNUAL GENERAL MEETING
LEDGER FOLIO SHARES HELD
I / We
of
appoint
(or of
failing him)
(being a member of the Company) as my / or proxy to attend and vote for me / us and on my / our behalf at
the 64th Annual General Meeting of the Company to be held on May 29, 2020 at factory premises, 06-
Egerton Road, Opposite LDA Plaza, Lahore at 11:00 A.M. and at every adjournment thereof, if any.
A witness my / our hand (s) this day of 2020.
Signed by the said

REVENUE
STAMP
Witnesses:
1) Name 2) Name
Address Address
CNIC No. CNIC No.
Notes:
1. A member entitled to attend and vote at this Meeting may appoint proxy in accordance with the
provisions of Article 54 of the Articles of Association of the Company. Proxies in order to be effective,
must be received at 17-Aziz Avenue, Canal Bank Gublerg-V, Lahore, the Registered Office of the
Company not later than forty eight hours before the time of holding the meeting and must be duly
stamped, signed and witnessed.
2. For CDC Account Holders/ Corporate Entities in addition to the above the following requirement
have to be met.
(i) Attested copies of CNIC or the passport of the Beneficial Owners and the Proxy shall be
provided with the proxy form
(ii) In came of a Corporate entity, the Board of Directors' Resolution / Power of Attorney with
specimen signatures shall be submitted (unless it has been provided earlier alongwith proxy
form to the Company).
(iii) The Proxy shall produce his original CNIC or original passport at the time of the meeting.
AFFIX
CORRECT
POSTAGE
The Company Secretary

PAK ELEKTRON LIMITED
17 - Aziz Avenue, Canal Bank,
Gulberg-V, Lahore.
64
64
2020
AFFIX
CORRECT
POSTAGE
The Company Secretary

17 - Aziz Avenue, Canal Bank,
Gulberg-V, Lahore.
www.pel.com.pk

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

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Maintaining Commitment to

Top Quality Products ..

PEL recognizes the importance of consumer-driven product

BEST CORPORATE AND SUSTAINABILITY

A ORGANIZATIONAL OVERVIEW AND EXTERNAL ENVIRONMENT

B STRATEGY AND RESOURCE ALLOCATION

C RISK AND OPPORTUNITIES

E PERFORMANCE AND POSITION

H SUSTAINABILITY AND CORPORATE

I CONSOLIDATED FINANCIAL STATEMENTS

2019 THE YEAR IN NUMBERS

2014 2015 2016 2017 2018 2019

APPLIANCES DIVISION 27,787

POWER DIVISION 9,834

2.86% Rs. 27.07

Rs. 60.76 Rs. 13,472M 1.76 Times

Share capital and reserves

78.83% Cost of sales

STRIVING FOR EXCELLENCE IN CORPORATE REPORTING

stages. We will continue to improve the

Start of commercial production after successful installation &

The Company comprises of two divisions; each offering a wide

POWER DIVISION APPLIANCES DIVISION

“Energy Efﬁcient” has been well received in the

Capitalizing on our technical expertise Entry of PEL Deep Freezers in retail

POWER TRANSFORMERS ENERGY METER

SUMMARY Sales Ofﬁces

• Afghanistan • Egypt • Mozambique • Tajikistan

PEL’S JOURNEY THROUGH

Formal start of EPC

2019 Launch of Semi Automatic

Launch of new Arctic

Launch of 4K Coloron LED

2012 2017 Commencement of Water

2011 2013 Successful

2010 2014 2015

4th CSR National

AUDIT COMMITTEE BANKERS

COMPANY REG. NO. ISLAMABAD WORKS

SALES OFFICES SERVICE CENTERS

To focus on personal development

To promote good governance,

AND BUSINESS 2. Coercive Practices means impairing or harming

CODE OF CONDUCT 4. Fraudulent practices generally means cheating

Continued focus on Honesty and integrity in Adhering to high standards

PAK ELEKTRON LIMITED (PEL)

KOHINOOR INDUSTRIES LIMITED

THE FOUR SEASONS / THE MEADOWS

RED COMMUNICATION ARTS (PRIVATE) LIMITED

SARITOW SPINNING MILLS LIMITED

KOHINOOR ENERGY LIMITED

Size of the fund as December 31, 2019

SIZE OF PROVIDENT FUND &

Deposit accounts with commercial banks Government Securities

Director Operations Director Finance

Sr. Manager Sr. Manager

GM Manufacturing Administrative Reporting

Company Secretary HR & Remuneration

Sr. GM Sales Manager

Sr. GM General Counsel-

POSITION WITHIN THE VALUE CHAIN

CONVERSION & MANUFACTURING